rediff.com: Transcript of the Ramesh S Damani Chat


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Sep 11, 2001
Stock Talk

'Fiscal situation is getting out of control'

'Divest. Stop corruption. Stop the witch hunt that is going on. Open the markets to FDI and reduce bureacracy, says Ramesh Shrichand Damani

Administrator : Mr Damani should be joining just a few minutes. We are sorry about the delay.

reena : i advice we all should log out as mr damani will not be coming today
Ramesh Shrichand Damani : Thanks for joining in. Lets start

salil : Why is Hughes Software falling so much? Is it a buy at these levels?
Ramesh S. Damani : It issued a profit warning.The telecom sector is in a freefall. That accounts for the weakness. It is now below its offer price

micku : Do tech stocks have any hope now? Will you suggest tech stocks to anyone?
Ramesh S. Damani : As Assisi said where there is despair give hope. They will rise. Our future is a digital one.

ash : what is the future of infotech industry as a whole now? shall we buy now or wait for a further low.
Ramesh S. Damani : Its hard to see too much downside from these levels. Everything must stop.

Parth : are we in a phase where 3000 Sensex level will be the upper level for the mkt?
Ramesh S. Damani : IT could happen. The sense of drift in New Delhi is unbelievable. No response. A Kargil like tax will kill the economy. Worst thing to do.

teny : hi ramesh! can we still keep our fingers crossed or is the worst is over or is more yet to come. what will happen to smaller markets????
Ramesh S. Damani : Keep them crossed. What worries me the most is not the US response. But Bin Laden. He is unstable and unpredictable.

teny : are not you worried that while the other currencies are gaining against dollar, Rupee is on a downslide.
Ramesh S. Damani : That is largely due to UTI problem. That will be a red letter day. Our fiscal deficit is getting out of hand. Rupee could worsen.

Parth : what level for the $ do u think is OK at the current moment?
Ramesh S. Damani : In the vicinity of Rs 50-52.

KURUVILLA : Dear Mr.Damani,As an NRI should we hold on to our remittances or send them now in Rs.Watching the fall of rupee, what doyou think will happen in the next3 months
Ramesh S. Damani : My personal belief is that you should hold it. Rupee looks weak. Inflation may be round the corner.

deval : mr damani.it seems that we have now entered into a 7 yr bear market phase. your comments. is it a good adea to invest in gold or silver.
Ramesh S. Damani : It could well be the darkhorse among asset classes. Keep a small portion in gold.

praveenbhai : Will the badla come in somke other form in near future?
Ramesh S. Damani : If it doesn't, market will remain vulnerable to shocks and sharp price erosion.

teny : so what should the govt do to come out of this problem...our economy as such is in docks, and now with war looming large we need to do something?
Ramesh S. Damani : The budget is six months gone. The investigations are going on.We have to start the process of healing. We have to bring the buyer back. That can be accomplished by lack of fear and lower transaction cost. It is not difficult but unlikely that it will be done.

Damani : If the US suffers some more attacks because of these Afghan plans, will the situation in stock market go worser?
Ramesh S. Damani : Absolutely. Especially if another terrorist attack takes place.

KURUVILLA : Dear Mr.Damani,Will the World Trade Centre bombing affect our tourism?Prospects of Indian Hotel companies for instance?
Ramesh S. Damani : It will dramatically. Don't see many people on vacation to India. However, Indian Hotels market cap is Rs 600 crore. That is a steal. Downside is limited.

Amrapalee : Rameshbhai what is the botom of the Sensex and Nifty pls?
Ramesh S. Damani : It is impossible to predict. Let's say 2500 on the Sensex. Worst case is 1980. I hope it holds between 2500-2800 points.

Mandan : Mr. Ramesh,If Bin Laden wnt to buy some Indian shares, is it allowed or not.
Ramesh S. Damani : Not allowed.

suresh : Mr. Damani.. whats your opinion about ICICI shares ?
Ramesh S. Damani : Not a good time to own it due to problems in the financial sector.

sujit : Mr. Damani what do u think about the telecom stocks? are they value picks at present prices?
Ramesh S. Damani : Telecom stocks are melting worldwide. I would avoid them.

mihir : which is better wipro or infosys
Ramesh S. Damani : I prefer infosys.

Mandan : Ramesh, India govt. is looking for the foreign investment in private sector. If Bin laden is ready to invest a huge amount in different sectors, what is your opinion?
Ramesh S. Damani : Remember what Gandhiji said about means and ends. We are built of stronger stuff then that.

MadhuRanganathan : Why is "Sentiment" such a core factor in the vagaries of the market...why dont people just stick to the nut and bolt performance, earning, returns cycle and be hard nosed about it....
Ramesh S. Damani : That is a fascinating question. Stocks are the only thing in the world where when price goes up, demand goes up. We swing between fear and greed. That throws up opportunities. Imagine Himachal had a market cap of Rs 25000 crs from Rs 160 crs. That creates huge opportunities. Stock markets would cease functioning if they were totally rational. However, use rationality to profit.

Kalyanaraman : Continuation of my question on hdfc and hdfc bank, last week..i am asking this out of curiosity..the answer to this is critical for me to understand the future of our economy......all our FIs and banks (especially hdfc group) have huge exposure to real estate..(collateral security in the case of loans is real estate)..the net wealth created by some indian companies + remittances from NRIs/forigners will be much lower than the wealth destroyed by govts.,banks,PSUs etc..further,if our FIs and banks have to survive,they have to necessarily sell the assets of NPA accounts,which run to several thousands of crores and real estate will collapse...so will the share prices of all our FIs--including hdfc-will collapse?is our economy in danger due to this real estate bubble?
Ramesh S. Damani : I am sorry I don't understand the logic. The solution in this case is not selling, but monetisation of debt. THis leads to inflation and actually property prices going up. No government in India has the courage to sell and close. It will lead to inflation.

Hitesh : DAMANI WHAT IS OPINION ABOUNT NEXT FEW DAYS FOR SHARE MARKET.
Ramesh S. Damani : It will depend on US markets. I beleive the Dow has more points to go. It could see a sharper sell off.

KURUVILLA : Dear Rameshbhai, If as a result of large scale FII pullout from India as a result of redemption pressures in U.S., will the Govt.come out with another Millennium Bond or something
Ramesh S. Damani : They could. However i am still counting the cost of the last one.

Administrator : Due to technical problems, Mr Damani is unable to take any further questions. We apologise for this and hope to see you all next week.

Join the Ramesh S Damani chat every Tuesday at 1600 IST.

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