Thursday, December 23, 2010

Buy food processing scrips.

FDI in 2010 in the food processing sector has gone up by 175%. France, Germany and Canada are investing in the highly potential food processing sector in India.

We suggest you buy food scrips at declines. Wait for the market to bottom out and buy these scrips !

The major food scrips are

Nestle India Ltd
Cadbury's India Ltd
Kelloggs India
Hindustan Lever Ltd
Godrej Foods
MTR Foods Ltd
Ruchi Soya
Tata Tea


Amul's turnover is more than 1.7 billion USD. ITC Foods' Ashirvad and Sunfeast brands have already captured the market. MTR Foods is a good buy. It has been acquired by ORKLA. One need not unduly highlight the potential of the MNC scrips like Cadbury's, Nestle and Kellogs !

Still there are many challenges for the Indian f p industry. After the success of the Green and White revolutions, India became a major provider of foodgrains, fruits, vegetables and milk. But his success was not matched by developments in supply chain management and in new technologies for the preservation, processing and storage of food. More than 70% of fruits goes waste due to lack of infrastructural facilities, lack of cold storage units and warehouses. Near starvation and pockets of shortages, substantial wastage due to spoilage, quality deficiencies and inadequate returns to farmers characterise this sector.

The Indian F P Minister told the Western powers " We have the raw material, you have the technology. So please invest in India " He is right, as India produces 13% of the world's vegetables and 10% of the world's fruits !.

At the moment, India needs an investment of $30 b in this sector. Rising incomes for the middle class, rising urbanisation, rising dual income households, all point out to the fact that the numero uno industry for India will be food processing !

In Financial Astrology, Jupiter rules fruits and vegetables. His placement in the 9th does augur well for this industry. So you can invest in these scrips, when the market reacts sharply ! Buy cheap, sell dear !

Monday, December 13, 2010

Sensex falls, despite good results in Q2.

According to the Central Statistical Organisation, India's GDP growth during Q2 was 8.9%

IIP grew by 10.8%, farm sector a surprising 4.4% and other sectors also grew at a fair pace.

The Sensex had not gone up, on receipt of this news. It is still languishing in the 19 K mark.

Only six Indian states have got more than 75 billion SDP. They are Maharashtra ( 152 b), followed by UP (89 b), AP ( 31), W Bengal ( 76 b ), Gujarat (75 b) and Tamil Nadu ( 75 b ). Karnatatka comes seventh with 59 b, Rajastan with 43 and Kerala is placed 9th with 40 b, out of India's 1.2 trillion dollar economy !.

Still Indian states are far behind Singapore and Malaysia ( more than 200 b ), Taiwan ( 432 b ) and Korea ( 832 b ), the four Asian tigers !

In PPP, you can multiply the number by 3 and you get the GDP PPP. For instance India's 1.2 tr dollar economy becomes 3.5 tr at PPP. Similary you can multiply the state's GDP or SDP by three and you get more or less the GDP PPP.

Jupiter moving to Pisces augurs well for India. Good Monsoons means 1% more growth, according to Montek Singh. Now that Saturn is in the Third, India is geared up for furthur growth.

Today the market has gone up by 182 points. Nifty by 50 points.

Here are the percentage growths for different sectors

Agriculture, forestry and fishing 4.4%
Mining & Quarrying 8%
Manufacturing 9.8%
Electricity,Gas & Water Supply 3.4%
Construction 8.8%
Hotels, trade, transport & communications 12.3%
Financing, insurance & Real Estate 8.3%
Community, social & personal services 7.3%

The CSO warns that a prolonged recession in developed countries may affect adversely services and manufacturing sectors !

Monday, December 06, 2010

The Return of Asia !

Asia was the wealthiest continent during Miltonic times.

In a kingdom, far
That outshone the wealth of Ormuz and of Ind
Satan exalted sat !

Thus wrote Milton. Ormuz or Persia and Ind or India, then, were the richest countries of the world.

Now the pendulum is swinging in favour of Asia. The Industrial Revolution saw the West rising and becoming formidable in the economic sphere.

In the 19th and 20th centuries, Asia was turned into a captive market for the industrialised Western countries. A reversal of fortunes occured in the 1970s, when the affluent Western consumers enabled Japan, S Korea, Taiwan, Malaysia and Singapore to emerge as low wage manufacturing bases for consumer goods. Later China and India emerged as low wage services and manufacturing bases. India excelling in IT services and China in manufacturing, along with the expertise of Japan, will turn this into an Asian century !

Special Economic Free Trade Zones are being created in Chindia ( China and India ) and this will propel these two giants into towering economies. China's creation of SEZs saw many companies moving over to China to become competitive. China became the workshop of the world.

In 1992, India initiated economic reforms that ended India's socialist economy. The collapse of India's closest friend, the Soviet Union, had left no other option. Now India exports software more than 50 billion USD. India has already become a hub for
global service industries.

China, India and Japan contribute 65% of Asia's GDP. Asia will be the main driver of world growth for the next two decades, with a middle class base of more than 1.5 billion people. 600 million middle class Chinese, 520 million middle class Indians and the rest will fuel economic growth !

The Asia of 2050 will be like the Asia of the 17th century, which dominated the world in terms of wealth ! She is already spiritually wealthy, let her now be materially wealthy !

The Sensex will surpass 50000 within a decade and India's GDP, now 3.5 trillion USD as per PPP estimates, will quadruple. 2030 will see China as the first economic power, US the second and India the third !