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Friday, June 21, 2013

Looking through the Haze..

After the financial collapse in Oct 2008 .. US FED went on the largest ever monetary expansion mode..

Monetary base of US financial system was expanded from 1,129 Billion to 3,109 Billion .. It was predicted that the Dollar will crash (due to excess FED Printing) and everyone was predicting dollar collapse..

Nothing could be further from the truth..

From Oct 2008 to June 2013 Dollar has strengthened against.
Euro



Strengthened against the British Pound



Strengthened against the Indian Rupee

However the Chinese Yuan and the Japanese Yen have strengthened against the dollar

Chinese Yuan


Japanese Yen

So what we see is that countries who were competitive against US and had positive trade balance with US  (China and Japan) saw their currencies strengthen while countries which had -ve trade balance saw their currencies Fall.

What then happened to the greatest ever monetary expansion by the FED?
1. The FED publishes the monetary base (All the money in the system including money held with the Federal Reserve)
On Oct 2008 the Monetary base was: 1,129 Billion.
On Jun 2013 the Monetary base is: 3,109 Billion.

I remember once hearing a phrase .. like a bikin, with statistical numbers its not what they reveal but what they hide..

Everyone say's the FED is doing a great job by aggressive monetary expansion .. The truth is something completely different (hidden)

On Oct 2008:
Monetary Base: 1,129 Billion
Reserves of Institutions with FED not borrowed: -ve332 Billion(-ve indicates money borrowed from market and parked with FED)
Money in the System: (Monetary Base - Reserves held with FED) = 1,129 - (-332) = 1,461 Billion

Actual Money in the System in Oct 2008 was: 1,460 Billion USD




On Jun 2013:
Monetary Base: 3,109 Billion
Reserves of Institutions with FED not borrowed: 1,980 Billion
Money in the System:(Monetary Base - Reserves held with FED)= 3,109- 1,980 = 1,129 Billion

Actual Money in the System on June 2013 is:1,129 Billion USD

So the real truth is that "Money in the system in 2013" is still less than the "money in the system in 2008"
which translates to tight money condition and contraction of the economy.. 

What is this Monetary Base 3,109 Billion?

Every month the FED buys 85 Billion dollars worth of Bonds and Mortgage which is a fact.. but the quality of Mortgage and Bonds is suspect..so what the FED is doing is.. its cleaning the books of the FED registered Institutions (big banks) by replacing their suspect mortgage backed securities and Bonds by crisp full value US dollars which have "Zero Risk"
The banks then deposit the newly printed US Dollars back with the FED  as reserves..(resulting in Excess Reserve deposit by the Institutions with the FED)

This ensures there is no massive increase in dollar availability in the financial market which could weaken the dollar

"USD Money in the system in 2013" is less than "USD Money in the system 2008" ensuring the stability of the USD inspite of buying 85 billion dollar/month of bond/mortgage securities buying.. (85 billion bond buying is an eyewash.. its actually cleansing of the books of the large financial institutions and does not help the economy..)


All the FED monetary policies have been directed towards the big banks and nursing them back to health .. rather than the US economy. The US economy and the world economy cannot be encouraged due to the fact that "Peak Oil" is a reality and any economic expansion is going to directly result in more trade and more energy consumption. US energy/oil consumption is at a 15yrs low..

The US Dollar strength will be preserved cause loosing control over the value of the dollar could result in rise of other currencies (chinese Yuan) and loss of financial clout in global markets

Oil prices could rise sharply to bring "Peak oil" front and center of the "Dinner table discussion" 

Future looks more and more driving towards 
"Energy Efficiency/conservation"
"Chaos with population reduction: War/pandemics/natural disasters " 
"Volatility to shake and bake for asset accumulation"
"Further growing divide between rich and poor"
"Drive towards Local economic models"

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With growth prospects diminishing.. we can expect monopolistic companies with very little competition.
Dividend income would be major source of income for investors.. as investors are driven out of the market..
Stick to investing in basic requirements.. Food, Energy, Clothing and shelter (in that order)
Target Energy efficiency, carbon footprint, necessities.

There is going to be a Renaissance period .. where Art,Culture will be given higher priority.. Sports, entertainment would be growth areas.. Growth will take a backstage..

Monday, June 10, 2013

Jayant Agro: Latest FOB Data..

Have been digging around and have collected some more info with regards to Jayant FOB export numbers..
Though must state that the data is incomplete with missing days.. I am also reluctant to post raw data as it could be used as a competitive advantage by other castor oil and castor oil derivatives companies..

1. FOB data for Jayant Agro May 4,2013 to June 7,2013 is: 43.22cr Pls note there is data missing from May 21-May 26,2013

2. FOB Data for Ihsedu Agro , May 14 to June 7,2013 is: 77.18cr.. Pls Note that there is data missing for the period May 21 to May 27,2013



Jayant Agro is mostly exporting value added castor derivatives while Ihsedu is exporting low value high volume castor oil and 1st generation derivatives.

USA it seems still takes the cake as the largest export destination for Jayant Agro's low or high value added castor derivatives..

Jayant had 170 different shipments while Ihsedu had 46 different shipments.. All bulk sales seem to be exported from Kandla Port

Looking at May 2013 numbers I think we can expect 400cr + sales numbers for Q1 2014..

PN: This is based on information from various sources and could have errors.. Pls do your own deep dive before investing