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'It is a good time to buy shares'Mumbai, March 23, 2004: 'It is hard to time the market but I feel it will recover and head higher,' says Ramesh Shrichand Damani.qq : Why is there so much volatility in the market? Ramesh S Damani : No easy answers at this time. Sam : Damaniji, is it true that investors are bullish on the Indian market? Ramesh S Damani : Global investors certainly are. investor : A leading financial daily in its editorial predicted fall in Indian equities during second half of this year due to FII pull out as US market is expected to perform better.. Your views pl.. Ramesh S Damani : Despite being unsettled by the fall investors remain bullish. The market seems to be in a technical funk. baracuda : what makes marc faber bearish on equities is he specific to any country and why doent he like india anylonger after a1000 piont fall are we still expensive a see alot of cos available at single digit pe multiples with double digit growth Ramesh S Damani : Marc gives a monthly view. He is bullish on India and China and Asia. He is bearish on US. However, what he was seeing was a sharp correction. BASANTMAHESHWARI : Ramesh babu, Don't you think that these investors give a lot of importance to the theory of zigs and zags( Technical charts). If Indian companies continues to shine I see no reason why we should entyer a bear market. Thecall is on the fundas of india Inc and not the supports and resisitances.SOme how I believe that we will see the worst very soon. Your take Ramesh S Damani : I tend to agree. The market is having a technical problem, not a fundamental one. HiRDamani : HELLO MR DAMANI, GOOD EVENING. I WAS LISTENING TO YOU ON CNBC,U SAID THAT WE SHOULD BE ABLE TO TEST 6200 - 6300 LEVELS OF BSE IN MAY-JUNE AND SHOULD BE ABLE TO TEST 7000 LEVELS BY END OF YEAR.DO U STILL BELIEVE THAT OR U HAVE CHANGED UR PERCEPTION AFTER THIS MASSACRE OF INDEX ? Ramesh S Damani : I remain bullish. I am surprised by the sharp fall. I can't see a specific reason other than oxygen being sucked out due to the IPO deluge. If that is the case then the market should start recovering. DAULATRAM : HI RAMESH! IN YOUR WINNING THEMES WRITE UP,(MONEYCONTROL) BEML WAS RS 250 NOW ITS BELOW 170 EVEN INGERSOLL RAND RAND IS NEAR RS 200 HOW DO YOU SEE THESE COS. PERFORMING IN NEXT 2 YEARS? TO ME THEY SEEM REASONABLY VALUED Ramesh S Damani : I feel they are doing well. Due to the elections BEML might see a slow down in orders over the next 1,2 quarters. Long term they are a great play on GDP growth. baracuda : nothing has changed for the metal pipe making cos infact things have got better all are hiking production capacity without diluting equity but still these stocks are falling off the cliff what has happened to man ind the management itself was buying at 98 Ramesh S Damani : Man's weakness is puzzling. They are having a good year and opportunity in the sector is good. DAULATRAM : PSUs SEEM TO HAVE DONE OKAY IN THIS CARNAGE. GOING FORWARD, WHICH PSUs do you like? I HEAR KARUR VYSYA IS DOING WELL - ANY REENT NEWS ON KARUR OR TRIGGERS THAT COULD START THE RUN UP? Ramesh S Damani : The same -- BEL, BEML, Neyveli. Karur is doing well and cheap compared to its peers. I own all of them. DAULATRAM : WITH THE RUPEE GETTING STRONGER, WHAT KIND OF IMPACT DO YOU SEE ON THE GOLDIAM STOCK ? Ramesh S Damani : Not a whole lot. Impact is greater in software. Shyam : Rameshji, you said global investors are bullish on India....what are the indications? Ramesh S Damani : Look at FII inflows, also the level of subscriptions in the IPOs. DAULATRAM : HOW BAD IS THE GLOBAL MARKET? DO YOU SEE SIGNS OF FURTHER WEAKNESS IN US AND OTHER ASIAN MARKETS? Ramesh S Damani : I remain worried about the US dollar. BASANTMAHESHWARI : If the dollar loses value FII would put in more money not pull out.Tech sector seems to be in trouble though but the rupee falls because indian processes become more efficient Japanese yen rallied 300% against the dollar and the americans drove toyota cars so while volumes will expand the margins might take a hit. Is it that simple or should we be worried...I have written an article for value notes India is shining But is the sun setting in the west. It should be up by tommorroa please read it. Ramesh S Damani : Productivity must increase or we will sink. I think we will do it. A rising rupee is of course bullish for the rest of the country. But India has still a long way to go before we write of the West. The BPO industry would not exist without the West. chandani : hello sir, beside your regular favourits which are the blue chip stocks we should look at now to have a fair return 6 months/ 1 year... Ramesh S Damani : Colgate is at a 5% yield almost and Godrej Consumer continues to buy back stock. chandani : hello sir, beside your regular favourits which are the blue chip stocks we should look at now to have a fair return 6 months/ 1 year... Ramesh S Damani : Look for contratian bets in FMCG. They give good dividends and are being beaten down. HiRDamani : HAVE U INVESTED IN SOMETHING NEW RECENTLY TAKING ADVANTAGE OF THE SHARP FALL?THANKS Ramesh S Damani : Not really. Been just pruning portfolios for year end. baracuda : sbi ,mercator lines, man ind,boingaigoan ref,ge ship,nagarjuna construction,are some of the cos with single digitpe and high double digit growth so why arent the warrenbuffet in our market not buying these stocksare we so shallow a market that is ready to ignore all fundamentals Ramesh S Damani : Market is shallow. I am not sure all the business that you mention can have a sustainable growth rate of 15%-20% or have great management. Some are in fact poorly run and good for only trading. BASANTMAHESHWARI : Most of us have lost more then 20% of the portfolio. Would you suggest to just stay calm and ride the storm or try and be clever by selling out and getting in. SOme how I cannot trade in stocks and many times it hurts... Ramesh S Damani : Most people cannot trade so it is best avoided. You have to take the highs and the lows. rohan : sir cipla has announced that it will split the the face value of Rs 10 To Rs 2 what is ur call on it hold or sell Ramesh S Damani : Cipla is a good conservative choice. ValueInvestor : Will the market again pick up and reach 6000 level or do u feel the bearish trend will pull it down below 5000 level? Ramesh S Damani : It is hard to time the market but my sense is that it will recover and head higher. nriinv : Have you been watching Onward Tech, share is quoting at Rs 20/- Kale buys preferential allotment at Rs 33/-. Don't you think it's a value pick. Recently Onward has got a good BPO order for 5 years Ramesh S Damani : I watch it but at these rates you could take a bet, however, I am not convinced about business strategy yet. baracuda : 50million cases of beer is what ubalong with malbare planning to sell by2005 that works out to 60crsbottles even if we keep aprice of rs10 for the co after all expenses that works out to 600crsgp,but till today even after selling 35million cases they are showing loses how do yu explain this Ramesh S Damani : I think Mr Mallya needs to answer that question. ValueInvestor : As the market is down right now ,Is it right time for people to buy shares or due u feel they have to wait and watch ? Ramesh S Damani : It is a good time to buy shares. HiRDamani : SOME PEOPLE HAVE STARTED TALKING ABT BEAR MARKET RATHER THAN THIS BEING A CORRECTION IN A BULL MARKET , DO U THINK THEY ARE BEING TOO PESSIMISTIC Ramesh S Damani : I think it is a correction. But if it falls 20% from peak we could say a bear market has started. Shankar : Rameshji,I have bought Tisco at 404rs and it has come down after going up to rs 450.do u think it is good to average at this price Ramesh S Damani : I am generally not in favour of averaging. I remain bullish on Tisco. nriinv : Mr. Damani, Warren Buffet No 2 and 3 men are Indian, despite this why doesn't he want to invest in India. I am sure they are watching the market but somehow are not getting convinced. Ramesh S Damani : I am sure Warren is looking. BASANTMAHESHWARI : I want you to answer this. At a certain percentage of dividend yield don't you think that stocks will stop tanking. Trent gives Rs6, HTMt around RS 7, Godrej consumer, very soon lever might join the club so will the down side be arrested? Ramesh S Damani : Absolutely. Dividend yield offers a floor to the price. Shankar : actually after the news about the freight rates on tonnage we were expecting the shipping industry to fare well and accordingly i bought GE shipping at 151rs but it has come down to 111 do u think it is temporary Ramesh S Damani : I think rates will remain firm. AnandBhatt : Hello SIr,The Re/dollar problem is bad and will get worse over time.Would you still buy that basket of midcaps[Logix,Crest,Nelco,Kale]?Please advise Ramesh S Damani : Yes I would. Probably add in the New Year. If you believe in tech/outsourcing story they are great bets. At these prices all the bad news is factored in. sanujkadavil : sirwhere is the market headed . clsa says below 5000. atul suri says 4850 . rajat bose sayys we entered in a bear phase ..what is ur call on sensex Ramesh S Damani : I remain bullish. nriinv : Mr. Damani you have mentioned in your earlier chats that somebody will write off 26% of equity of Mcdowells, if Malyaa does not fall in line. Can you elaborate. Ramesh S Damani : Some global value investor with cash will see this as a great opportunity. Look at the valuation of beer/alcohol companies in other emerging markets like Brazil, China. Some one is going to do it. Shankar : Ramesh ji,the recent reduction in the prices of detergent market has resulted in HLL getting bashed from a high of 200rs to 150 .Is it advisable to buy at this level.I feel that the indian market is too big to be affected by a reduction in the detergent price as HLL is quite diversified Ramesh S Damani : I don't own lever but I have no doubt they will find a way to make money. chandani : sir hello, use of computer PCs are increasing and will increase more asnd more which HARDWARE STOCKS WE SHOULD LOOK OUT FOR???? Ramesh S Damani : D-Link, TVS Electronics are good places to start. AnandBhatt : Thanks,you just answered that if we fall more than 20% from the peak we could say a bear market has started.If that happens should we exit even with some losses in some stocks? Ramesh S Damani : That is the theoretical definition, my sense tells me that we are in a bull market and I wont be easily shaken. kanny : hello sir u have been gr8 with your tips.sir on seeing the chart of godrej industries a head & shoulder pattern has emerged plz advice dus this signify more downward trend from present levels? Ramesh S Damani : Let me look at the chart. I am optimistic about its prospects. sanujkadavil : sir your call on maxindia. recently tey madea preferce at 180/share. and if we take telecom and insurance as a longterm play. max will bw a best pick. becoz max has stake in hutchison max, and max newyork life. at 25cr equity its market cap works out only 275cr. i think their insurance venture should value atlest 700cr. and stake in hutchison max as 450 cr.. would you buy max for 1-2 year horizon at these level Ramesh S Damani : Yes. It has fallen sharply. However your logic seems correct. BASANTMAHESHWARI : I always argue about TV 18 and the retail sector. Just heard that Sanjay Pugalia who was in star bews earlier is joining Tv 18 as hindi prog chief. Gave you taken a look at this company.It seems to have held out quite well and hindi prog. will generate more reach Ramesh S Damani : I am sure you are right. But Balaji is already doing that and I am getting it at a great valuation. MALIK : last week sir, who have recommended few stock like Mazda Control and linc Pen . Out of Two , I found Mazda Control to be better one.what is your views Ramesh S Damani : Both are penny stocks with good yield buy them as a basket. nriinv : Mr. Damani maybe Ajit Jain should watch Mcdowells because Berkshire Hathway has a nack of putting money in business which have mass consumption, right from Coke to Kitchen Ramesh S Damani : They would. I have no doubt problem remains with the management. They like good management. santana : macmillan has declared a div of rs4 per share and the dec qrt has not been bad atall infact it has been good at 7.1crs compared to 3 last year but in all this carnage the stock has gone unnoticedso also any discussion on the co Ramesh S Damani : 4+3 declared earlier. The company is doing well. Q1 is always the best. The stock is holding its own. sanujkadavil : sirwhat about your earlier picks like godrej. it has comr down to 40 level. float is only 11% in godrej. but my fear is mgmt will use this to buy and delist . in that case how it will effect retail shareholders, normally they will not pay huge discount to market price. are you still holding godrej . and would you buy more at these level Ramesh S Damani : Yes I would. They could de-list but they will be fair to shareholders. nriinv : Cant Warren buy the company agressivlely and change the management of Mcdowells and force Malyaa to go (maybe relaz in Goa with some horses) Ramesh S Damani : I would drink to that. ProfHANRI : Based on a statistical technical analysis model, i expect the market(sensex) to reach around 5000 by about middle of April 2004. Once market reverses towards north after that there will be fireworks to reach a target of 10,000 by middle of 2005. Your comments please. Ramesh S Damani : I don't understand these models. AnandBhatt : Thanks,I was watching the Appointment yesterday on CNBC [Raghav Behl with this Inidan person inthe IMF.....I forget his name..]He said although all the outsourcing outcry is political rhetoric and media hype now,it needs to be watched and it could become serious after elections.Do you think so?.Did you watch the interview????///////// Ramesh S Damani : I did not. Outsourcing is inevitable. Thanks all for joining. See you next week. Bye. |