Wednesday, December 17, 2008

Self Destruction Ceremony

18:00 IST, 16-12-2008, Tuesday. We all received a mail which contained the breaking news 'SATYAM aquires MAYTAS' !! What rubbish... and IT company acquiring an Infra company? I dont find any common thing between both verticals expect the initial 'I'. The first thing that striked me is divestment(not diversification). I heard a lot about divesting business. One such classic example is Indiabulls which divested its businesses into Real estate, Finance & Securities an year back. But mearging of companies of two difference genres is something which I didnot hear till date.

Raju says... "its an unconventional move !". Analysts say it is a "foolish move." Shareholders say it is a "fraud move"! Whatever it is, this move has already effected the reputation of the firm.
The deal was called off overnight as there is a strong dissent among the shareholders. Satyam, stock was down 55% in NYSE & 30% in Indian bourses. Maytas stock was down 20% on each day for the past 3 consecutive trading sessions. Many deals in the pipeline will be effected and thereafter the impact of this act might cost its employees too. I will not be surprised if there is a change in top management in the next quarter or two. There are a series of similar things which have against Satyam in the recent past. First UPAID case. Then the WORLD BANK case & now the MAYTAS deal. This is no less than a self destruction ceremony. Dont know where we are headed & whats next in store but one more such immatured act might cost us dearly.

With major US financial & auto comapanies queuing up to file for bankrupcy and there after seeking bailouts, the future of all IT companies is looking bleak. This quarter can easily be the last one where the IT comapanies can show reasonable profits & growth rate. Its going to be too tough to sustain this growth from next quarter. If rupee starts appreciating once again, it will add to IT woes.

Tuesday, December 02, 2008

Fruits, Vegetables & Stocks !

The other day, on my way to home I saw a vegetables & fruits shop. To be frank I personally never go to buy any food items for my home. My mom takes care of all that... but for a change, I thought of buying a Pineapple. I don't even remember when was last time I bought some fruits/Veggies. I am clueless about the prices & measuring units!! I have learnt from the shopkeeper about the prices of various fruits in there. Interestingly SAPOTA(chikoo) last time when I bought(may be half a decade back) was given in dozens, now they are selling it in KGs! He said the cost of one Pipeapple is Rs. 20. One Apple - Rs. 15. Dozen Bananas - Rs. 20

I reached home without buying anything as I was a little skeptical about the prices. Better my mom handle this !

Now, when I look at my STOCKS PORTFOLIO, I saw half of my stocks are trading lower than Apples & Pineapples !!! It was surprisingly shocking to know that stocks have become cheaper than Vegetables,Fruits ! When I thought about this strange thing, I realised it is because of the infamous economic jargons - 1. Sub Prime Crisis & 2. Rising Inflation. Of course who doesnot know what effect these two had on us. If the former had taken a toll on the Multi National giants & Big Boys then the latter had a deep impact on the common man. In my view, the word of the year award should be given to 'Subprime'.

Approximate numbers: Sensex lost about 65% from its alltime high & Inflation has touched an all time high of 13% but my anual salary hike was just about 6% :-(
Thanks to the booming Indian economy :P