Sunday, September 13, 2009


Indian stock market recommendations as of 13 September 2009

If you look at what analysts are recommending (that is, if you believe what analysts have to say after the events of the past few months), then the recommendations are never simple. The overall market situation remains complex:
- The rainfall over the past few weeks has reduced the overall rainfall deficit for the year drastically, as a result, the Government is now feeling a lower negative impact on overall growth
- The market has gained over the past few months, to the extent that there is a feeling that the market is now over-heated and a correction is now impending. If you read economic and equity stories, you will hear about how stock are now seen as expensive, and that fund managers are feeling pressure to invest else they will feel left behind, even though they feel stocks are now expensive
- The overall world economy seems to have stabilised and seems to be on the road to recovery, and this has been stated by many top economists and others (even if some of them are trying to make optimistic projections, there is a touch of reality)
- In India, the IPO market has suffered a setback because 2 recent issues of Adani Power and NHPC did not leave any value for investors, and hence the stock is already below the issue price. At the same time, there are huge institutional investments into IPO's, signifying that money is available to invest.
With all this information, what should the retail investor do ? This is really not the time to take too much risk, so be careful about bringing fresh money into the equity market. I, am going to keep evaluating certain stocks to see whether there is potential to invest in these stocks, and also trying to sell a portion of other stocks that have jumped a lot.
1. Nirlon: This is a risky stock. If the market goes down, this stock also goes down. However, if the realty sector and commercial rents pick up, then Nirlon is a good stock to own.
2. Ashiana Housing. Another realty company. The company share has been oscillating for the past few days, and I am looking to own these shares for atleast a period of 1-3 years, and hence am picking up shares on a gradual basis.
3. Mawana Sugar. In India, sugar is a difficult area right now, with sugar being in shortfall and overseas price high because of expectations of imports by India.
4. Cairns. It's oil wells in Rajasthan have started producing oil, and on the back of a global recovery, there is an expectation that oil prices will start increasing to ever higher levels.
5. Sharyans resources. The company's share took a major hit with the economic downturn, but now looks to be again regaining hope.

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