Home / random / Daily Links / Buzz: Stock market crash, 2G scam, Health Insurance Portability, Inflation & Infra bonds!

Buzz: Stock market crash, 2G scam, Health Insurance Portability, Inflation & Infra bonds!

It has been hectic week for the investigators and government authorities what with new findings into scams and various regulatory reports coming out almost every other day, as the investigation into slew of corruption charges takes its route.

On the other hand, even stock markets have reacted negatively based on same old news of inflation, rising interest rates and corruption charges. However, the fact remains that food inflation has softened for the week ended January 29.

At a time when Nifty has sulked by 1000 points over last 3 months, it gives me a feeling that markets have corrected on the back of almost no news at all. Inflation is the only genuine macro-economic concern on the block right now. It just needed a reason to correct after last 2 years of scorching bull run. Here’s a list of Top 10 Stocks to pick in this falling markets.

Indian Stock Market BSE

Let’s have a check on some important news of this week:

2G Spectrum Scam – Got Smaller in Size!

Telecom regulator TRAI has come out with new recommendations on 2G spectrum pricing parameters. The excess 2G pricing is likely to steeply increase pay-outs of telecom service providers to the extent of Rs.16000 crore for the spectrum.

Further, the new regulatory norm undermines the findings of CAG report’s estimated losses on account of 2G spectrum allocation scam from Rs.1.76 lakh crore to Rs.1.24 lakh.

Health Insurance Portability – Going Beyond MNP!

In India, the term ‘Portability’ has hardly been used in the context of business or finance related products / services until now. At best, I can remember electronic gadgets like iPod which were referred as portable music players.

But, with introduction of the mobile number portability in India, we all know what it is about. In fact, now even policyholders can ditch their current health insurer and carry on the benefits with a better insurance company. What’s more? Now they can also carry benefits for pre-existing conditions. Health insurance portability will start from July 1.

ADAG Stocks Mauled by Investors!

Few weeks back, we had an article on how Anil Ambani does flip-flops which making statements and revealing partial truth to the investors. However, this time around it was investors who mauled the ADAG stocks on the back of certain rumors and corporate governance issues coming on fore.

On 9th February, junior Ambani-led Reliance Infrastructure and other leading ADA Group stocks such as Reliance Communications, Reliance Capital and Reliance Mediaworks almost lost their 1/5th of the market capitalization on Indian bourses.

And, what proceeded later? No points for guessing! The famous blame game…

Food Inflation Subsides – Oh! Really?

Finally, all the hoopla surrounding the infamous food inflation seems to have taken a toll on the pricing pressures. Yes, the wholesale food inflation has dropped substantially to 7-week low of 13.07% for the week ended Jan 29.

The Analyst community differs on their views on food inflation – while some of them have pointed out that this softening in prices is due to last year’s high statistical base effect when food inflation stood at high of 22%; the others suggest that prices of food articles have genuinely dropped as the supply-pressures have eased.

Infra Bonds – Race to Save upto Rs. 6158/-

It’s time for the financial year end and investors are lapping everything that comes up as tax-saving instruments. Further, from this fiscal, the government has allowed an additional deduction amount of Rs.20, 000 for investment in long-term infrastructure bonds under Section 80 CCF of the Income Tax Act.

In latest, IDFC has raised around Rs.765 crore through its second tranche of such infrastructure bond issue with a face value of Rs.5000 each. Another government-notified company to raise money through this route is L&T Infra which has come up with tax-saving bonds of 10-year tenor period of face value of Rs.1000 each.

So, have you invested in the tax-saving instruments? Or are you still waiting for the last minute March-end entry into them?


About Viral Dholakia

Viral Dholakia is a Freelance writer for financial magazines & is passionate about blogging and Capital Markets. Stay in touch with him at bull4bears-at-yahoo.co.in or on Twitter at @viralsss

4 comments

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  2. Food Inflation has come down. I am reporting from Hyderabad. Today I went to shop in ‘More Supermarket’. They are selling Onion at Rs.14 a kilo and Tomato at Rs. 7 a kilo. All vegitables (Lady finger etc) are below Rs. 10 (ranging from 7 to 9) The harvest is in the markets. Every thing will come down now. I can dive into onion based curry now :)

  3. Arun Prabhudesai

    Altaf, Your comment is a post in itself…Thanks for the insights…

  4. Really, this week was a high beta week in terms of major news and their impact. 2G Spectrum scam has become old news and investigators are reaching to the base of the corrption with DB Reality, Unitech etc are the prominent names that are making rounds now. Another spectrum related scandal which did not live upto the expectation was S- band allocation to a company of ex-ISRO employee. How ever it became clear in the biginning it self that the accused did not gain any thing from it and now the govt is cancelling the alloted band. Insurance portability? Wow !! This concept of protability has been so exciting since mobile portability came into being. Now what else? May be Bank a/c portability? Exciting to think about it. ADAG shares mouling is anoptehr beta news this week. As soon as the news spread that ADAG group companies reported wrong profit loss statement, all the group shares were hammered down. I was unlucky to be 15 min late in placing buy orders for Rel Cap @ 400 and Rel Infra @ 500. As it was clarified that only few companies will be investigated, shares of Rel Indfra started going up. Those who bought Rel Infra at 500 are the lucky ones as today the shares closed above 600, a gain of 20% in two days. However Rel Cap is still at the borders of 400 and need careful look before any investment can be made. Rel Power is also a good bet below 100 specially with Rel Power getting cheap finance from Chinese banks and Sasan UMPP certified for clean energy initiative of United Nations which is entitled for carbon credits in thosands of crores. Food Inflation is expected to come down with the agricultural produce coming to harvest stage. As the rainy season was good overall for India (except few excesses in few places which caused flood related damages). Agricultural ministry is forecasting bmper crops for wheat, rice, cotton, maize, sugarcane. I am confident that we will not have problems related to shortages like inflation. However the problems forecast are that of excesses. That is food grains rotting in godowns, Now Tax saving Bonds : After scking up all available liquidity in market with mega IPOs and FPOs, govt is forcing people with investing in Bonds which will cause additional tightness in market. However the fall in markets is not due to weakness on part of India. In fact it is a good opportnity for investors. The crash happened not becase of any domestic reason (though scams caused small part). It is entirely de to FII hot money pulling out of India. As our agricultural output forecast to exceed that of 2008 (the best year so far), with industrial growth intact, companies will only perform better. From that view this is a good opportnity for people to start cornering stocks which have fallen beyond reason. Just my two paisa :)

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