Bulls & Bear Hfund of India

Why OMC stocks aren't reacting to crude prices Brent crude oil price has corrected sharply during the December 15 quarter, but its immediate beneficiaries -- the oil-marketing companies (OMCs) -- are not reflecting the favourable market conditions in their share prices. Brent crude, which reached $52.71/barrel on October 9, is now trading $36 with expectations of a further decline. However, despite a 46% correction in oil prices, the shares of Bharat Petroleum (BPCL), Hindust an Petroleum (HPCL) and Indian Oil (IOC) jumped only 6-8%. Analysts believe it is partly because the stocks of OMCs have already factored in the positives and are trading at rich valuations. The decline in crude prices, oil and gas reforms as diesel price deregulation and direct subsidy transfer for LPG, demand revival, improvement in refining and marketing margins and declining working capital requirements all have led the OMC stocks rising 2 to 4 times in past two years. It is only IOC that has la...

Rise and fall of Indian art funds Art may be a good asset to own if you enjoy it. But if you’re only looking to speculate, think twice Contemporary art, pink champagne, gemstones — it is always tempting to believe that hiring professional managers to select exotic investments such as these can yield far better returns, than investing in boring old bonds or equity. But the experience of investors in Indian art funds floated 10 years ago tells us that when it comes to investments, it is sometimes better to stick with the boring. The story of the rise and fall of art funds can be pieced together from the recent rulings by SEBI and the Securities Appellate Tribunal, on complaints from aggrieved investors in India’s first art funds. This is how it goes. Renaissance to Dark Ages The Indian art market was seeing renaissance from 2000 to 2005, with works by modern Indian artists, helped by the economic boom, fetching record sums at global auctions. This prompted two sponsors in India...

Gold Sees Modest Pop as ECB Eases Monetary Policy Gold prices are seeing a tepid bounce in the immediate aftermath of the European Central Bank lowering its deposit rate by 0.1%. The yellow metal is reacting in part to a surprising rally in the Euro currency and a big sell off in the U.S. dollar index following the ECB easing of its monetary policy. Gold prices overnight dropped to a 5.5-year low and silver prices hit a six-year low. Mild short covering and bargain hunting are featured in the gold and silver markets. February Comex gold was last up $2.20 at $1,056.20 an ounce. March Comex silver was last up $0.046 at $14.055 an ounce. The regular meeting of the ECB saw the central bank make its easing move, which was not unexpected. What is surprising is that the Euro currency rallied and the dollar index sold off. This is a classic “buy the rumor, sell the fact” scenario for the USDX and a “sell the rumor, buy the fact” for the Euro currency. Don’t be surprised if the same contr...

As expected by economists and markets, the Reserve Bank of India on Tuesday held its repo rate steady at 6.75%, having cut the policy rate by as much as 75 basis points in three tranches earlier this year. Repo, or repurchase, is the rate at which the central bank lends money to commercial banks. Most predictions had said the RBI would hold the rate at its bimonthly policy review Tuesday, arguing that Raghuram Rajan would likely wait unti l the US Fed makes a move on raising interest rates there; some even suggest that the RBI Governor might hold off of any more rate cuts until the next Budget. India’s economic growth, however, continues to lag behind the expected curve. For the quarter ended September 2015, India’s GDP grew at 7.4%, bumped up by a manufacturing boost, but made it all but impossible that the country would achieve an 8% rate of growth. Other economic data has also been lackadaisical;. Core sector growth on Monday came in at 3.2% for the month of October, unchan...