Posts Tagged ‘BJP

03
Dec
11

Retail FDI drama continues..

Political logjam continues over retail FDI issue in Parliament. Indian government had finally woken up from its slumber and cabinet passed one of the   boldest reforms in the history of modern India. Although, its timing may be questionable (just before UP assembly elections). I think, government might have been forced to act on reforms front on account of sharply depreciating rupee, ballooning fiscal deficit and policy paralysis criticism from every corner.  For once, I won’t criticize the Congress government. Opposition led by BJP have been protesting against this move. Left which is fighting survival battle has joined hands with untouchables (BJP), as they fondly call them, in stalling parliament proceedings during the winter session. It’s a shame that the world’s largest democracy parliament has not been allowed to function on account of this reform. Instead of discussing the pros and cons of the issue, opposition just wants voting. They are well aware that with allies (TMC, DMK) deserting them on the issue, the government is on a sticky wicket. If voting is done in parliament, government might not have majority on its side.

Retail stocks led by Pantaloon retail rallied hard on account of this FDI reform. Pantaloon was hammered out of shape after its Q2 FY12 results. Short covering and new longs helped India’s largest retailer to rally hard. If news reports are to be believed Pantaloon is in talks with French retailer giant, Carrefour for JV. In long-term this JV will surely help Pantaloon and improve its valuations. But if you read about country politics, then you might have been skeptical about the sharp rise in retailer share price. These kind of reforms are not difficult to pass and especially just before important UP elections. Lot of chief ministers have also raised their voice against allowing foreign retailers setting shops in their respective states. Traders are powerful lobby in this country and they will also protest. I have sold December series OTM calls and puts of Pantaloon retail (I have covered some calls after share price decline). Eventually this bill will pass and Pantaloon share price will rise, but not very sharply (http://www.business-standard.com/india/news/too-early-to-celebrate-for-pantaloon-retail/456608/). Neither its share price will fall very sharply now, as I don’t think this FDI will be rolled back. It might take some time but eventually this reform will be passed. In fact, on very sharp declines, I am looking to buy Pantaloon retail shares.

09
Jul
11

Why I would vote for congress in next general election..

State of affairs at congress government can be summed by the PM Manmohan Singh’s recent meeting with the press. Instead of talking about future or any new policy initiatives, which have completely stopped, he was defending himself and the government from various corruption charges. As the head of the most corrupt central government as yet, he never knows anything, and everything happens behind him. He was a good economist and policy maker but now looks like a product beyond its best before date.

Recently, there was Deepak Parekh’s interview in TOI, http://articles.timesofindia.indiatimes.com/2011-07-07/india-business/29747100_1_deepak-parekh-housing-loan-market-growth. It seems a lot of business groups are frustrated at delays in getting approvals for their projects. Instead of working on land acquisition bill, the government is busy on working with minority quota. As if, current reservation quota is not enough, they are keen on introducing one more quota within quota for minorities. Everybody wants our forests to be protected but not if it stalls development and growth. After 6 years delay, India’s largest FDI as yet by POSCO was given environmental clearance. I wonder if it would help India’s image as an investment destination.

After several months of delay, the Government found time to decide on the fate of Cairn-Vedanta deal. Being a politically sensitive matter in India, delay in petroleum products hike is understandable. Not sure how long this adhoc policy on petroleum products can continue. I hope UID project helps in directing subsidy to the target segment in a more effective manner. How can you provide subsidy to actor sunil shetty doing hayyy…hayyy…in his movies and driving his gas guzzler hummer on Mumbai roads (My friend Vinod Tirupati imitates him better). I don’t know what’s the extent of black money stashed abroad, but instead of bringing tax evaders to justice, government is busy fighting with Supreme court on SIT issue. Sad part is that, we don’t have alternative either. BJP is busy with infighting, Communists are struggling with ideological crisis. I think congress knows this very well, otherwise they would have done something. There is a widespread frustration and discontent among general public.

Congress government has introduced F-word on stock exchanges. F-word or FPO has been instrumental in wealth destruction of a  lot of PSU’s. Still government can’t understand that FPO is not an efficient method of divesting stake in Public sector units. As an option trader, predominantly option writer I love this government’s inaction. They allow me to play on my friend, time value. I am thinking about becoming a congress member and campaigning for them in 2014. I request all of you to vote for congress government in every election.




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