FINANCE & STOCK ADVICE: An Outlook on India Credit Policy

RBI Credit policy has been announced and it has revised the inflation targets upwards from 5% to 6.5% for FY10. RBI has said that it will ‘watch inflation like a hawk’. This clearly means that RBI is concerned about the spiralling prices and this could be the prime issue which would dictate the policy decisions in the coming months.

Apart from that, the RBI Monetary Policy was just another non-event.Interest rates were kept unchanged.Major announcement could be summarized as below:-

1. CRR was unchanged at 5%.

2. Repo rates unchanged at 4.75%.

3. Reverse repo rates unchanged at 3.25%.

4. SLR rate was hiked to 25% from 24% and this, the RBI says would not affect liquidity.

5. FY10 GDP forecast has been kept unchanged at 6% for FY10 with upward bias.

And at the same time, the policy has said that it expects to see a modest decline in agriculture. The RBI does not seem to be overtly worried about the decline in agri growth as it is feels this fall is seasonal and once the monsoons, hopefully, improves in the next year, things would fall back in place. It expects robust growth in industrial sector to more than make up for the decline in agri and that, RBI hopes, would keep the GDP buoyant.

RBI is also equally worried about the present situation of liquidity. And knowing this, it has pointed out that there is enough evidence pointing to excess liquidity feeding into asset prices. FY10 money supply growth projection has also been lowered to 17%.

Loans to real estate companies are to become more expensive as realty provisions have been hiked to 1% from 0.4%. The immediate fallout of this would be that some developers who are already having a huge interest cost would now have to pay more. This would mean, costs for realty companies would go up and in all probability, developers would pass on this cost to the consumers, meaning realty prices would go up.NPA norms for banks have been tightened, which is expected as always.

Collateral borrowings are to now attract CRR. So this is more like a back door entry of the hike in CRR which seems like a surety in Jan 2010, or even before that.

Indian Markets Reaction to the Policy

Markets were down 110 points just few minutes before the RBI Monetary Policy came in. And it continued to remain in the red, with realty companies slipping fast. Though a non-event, the market is now worried about the hawkish stance taken by RBI. It clearly sends out the signal that in the coming months, when the next policy is out in January 2010 or even before that, screws will get tightened.

MULTI BAGGER STOCK GROUP

Some of my group's multi bagger picks during the rally were NMDC , MMTC , STC , Larsen ,Jindal Steel & Power , Unitech , BF Utilities , Jai Corporation , Walchand Nagar Industries, RNRL , Reliance Infra (Reliance Energy) etc.

I had been long associated with a corporate engaged in financial services , where with the assistance of specialized tools along with my special analysis as per some historical accepted theories of stock market like W. D. GANN's Theory , Elliot Wave Theory and others are used with reliable insider information of so called " operators" who play a major role to make a stock ,a Multi Bagger ,I do make my gem picks in this market.

I had been running my group , where the associated people get the reliable and most beneficial to get the unexpected return as seen in the above mentioned tips. Say for example the stock called MMTC had jumped from 2000 level to 56000 per share of historical price where the capital appreciated by 28 times in very short period with 2700% return on capital employed. Likewise in RNRL we started accumulating at RS 25 level from where we saw it moving at 250 level giving 10 times with 900% return.

These sort of return is helpful as ,

1. Handsome gain will make a jack to our capital.

2. Limited stocks trade , as daily trade could be avoided , which is more risky.

3. Long term capital gain , so no tax liability.

4. Whole income in white, which could be further deposited into fixed deposit to get assured monthly income later.

5. Strong income tax file without paying any taxes.

Our role here could be summarized as :

1. Giving tips to all registered member at proper time , when the stock is just about to take off, neither too early not too late.

2. Make sure investor do not gt stuck into it.

3. Recommend to exit when the operator is about to leave it.which is the most important work or else the whole accumulated and deemed profit will be washed away along with part of investment and will remain stuck for long - long period.


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An Outlook on India Credit Policy