New economic numbers from India, the latest forecasts for the country’s voracious appetite for gold, iron ore and in particular coal and its plans for a sovereign wealth fund to look at mining deals abroad mean that the GVK-Rinehart tie-up could be the first of many.
The India Planning Commission recently released its preliminary forecasts for the country’s 12th five-year plan from 2012 – 2017 and The Economic Times quotes Montek Singh Ahluwalia, deputy chairman of the Planning Commission as saying India’s economy is expected to grow 7.5% – 8% over the next five years even if “we just carry on doing a little bit of progress at the pace we have managed at the last few years.” The official Indian government target is 9%.
The Financial Express reported the Planning Commission last week proposed that India should set up a sovereign wealth fund with an initial corpus of $10 billion, mainly to invest in energy and mining assets abroad.
The Planning Commission forecasts India’s coal demand to go up to 1,000 million tonnes by 2017, necessitating over 200 million tonnes of imports: “The domestic output is unlikely to exceed 750 million tonne leaving more than 200 million tonne shortfall to be met from imports. Even this assumes that the domestic output will be able to increase by over 200 million tonne from current levels.” The Planning Commission said the demand for coal rose by about 8% a year during the 11th plan.
India’s steel demand is likely to jump by over 70% to 113 million tonnes by 2017 after growing by 36 million tonnes per year, with the infrastructure sector projected to witness investments worth $1 trillion. India’s total steel demand stood at 65.61 million tonnes during the last fiscal year.
Last month the World Gold Council said despite a higher gold price, Indian demand grew 38% during Q2 2011 compared to the same period of 2010. This growth is likely to continue, due to increasing levels of economic prosperity, high levels of inflation and forthcoming key gold purchasing festivals.
The Economist reported on China and India’s “contest of the century” this way: As recently as the early 1990s, India was as rich, in terms of national income per head. China then hurtled so far ahead that it seemed India could never catch up. But India’s long-term prospects now look stronger. While China is about to see its working-age population shrink, India is enjoying the sort of bulge in manpower which brought sustained booms elsewhere in Asia. It is no longer inconceivable that its growth could outpace China’s for a considerable time.
courtesy : http://www.mining.com/2011/09/18/india-is-now-the-elephant-in-the-room/
Monday, 19 September 2011
Tuesday, 28 June 2011
Jhunjhunwala’s portfolio consists mainly of mid-cap stocks while the Sensex is composed of large caps
Over the past five quarters between January 2008 and March 2009, 48-year-old Jhunjhunwala’s portfolio of publicly traded stocks, of firms in which he owns at least a 1% stake, has underperformed the benchmark index. His portfolio has dropped at least 60% in value, according to data from exchanges, while the Bombay Stock Exchange’s (BSE’s) benchmark equity index Sensex dropped around 52% over the same period.
The Sensex has climbed back about 45% since, while Jhunjhunwala’s concentrated portfolio, which has largely been kept undisturbed, gained only about 15% over the same period.
Jhunjhunwala, the founder of proprietary trading firm Rare Enterprises—named using the first two letters of his and his wife Rekha’s names—twice declined to speak for this story. Most of his portfolio picks are held under this firm, by himself and in the name of his wife.
The most visible, albeit minor, changes made by Jhunjhunwala to his portfolio indicate a trend towards defensive sectors. He purchased an additional 0.65 million shares in software firm Geometric Ltd, where he now owns a 7.27% stake, and 0.3 million shares of Agro Tech Foods Ltd, in which he held a 7.8% stake at the end of December. He also purchased 0.17 million shares of Karur Vysya Bank Ltd and 0.13 million shares of drug maker Lupin Ltd.
On the other hand, he has cut his exposure to Hindustan Oil Exploration Co. Ltd, selling 1.4 million shares during the quarter ended March. Jhunjhunwala also sold about one million shares of Hyderabad-based Nagarjuna Construction Co. Ltd. He reduced the ownership in Pantaloon Retail (India) Ltd by 0.43 million shares and in Titan Industries Ltd by 0.12 million shares. Apart from large investments in a concentrated portfolio and smaller investments in a larger portfolio of listed firms, Jhunjhunwala owns sizeable chunks of equity in several closely held entities through his private equity and venture capital- style investments.
According to data published at the end of December, he owned at least a 1% stake in 31 firms, valued at about Rs1,466 crore.
And at the end of March, he owned at least 1% in 27 companies traded on BSE that declared their latest shareholding details. Some of his portfolio stocks, including the pharmaceutical services provider Bilcare Ltd, pharma firm Zenotech Laboratories Ltd, publisher Infomedia 18 Ltd and water treatment firm Ion Exchange India Ltd, are yet to update shareholding details.
Jhunjhunwala’s holdings in at least a dozen non-listed entities include the 16% stake in Diwan Rahul Nanda’s Tops Security Ltd, New Delhi-based A2Z Maintenance and Engineering Services Pvt. Ltd, Dharti Dredging and Infrastructure Ltd, Inventurus Knowledge Solutions Pvt. Ltd, Maneesh Pharmaceuticals Ltd, Nandan Biometrix Ltd and Concord Biotech Ltd, among others.
To be sure, Jhunjhunwala’s portfolio consists mainly of mid-cap stocks while the Sensex is composed of large caps.
And, despite the beating his portfolio has taken during the downturn, people who have worked with this whisky and cigar aficionado vouch for the soundness of his overall strategy.
“He has tonnes of patience and the temperament that makes him a rare stock market investor,” says Alok Agarwal, a Mumbai-based funds adviser who owns at least 2% in Aptech Ltd, a venture he started to provide computer education. At the end of March, the Jhujhunwalas held a 31.7% controlling stake in Aptech, valued at around Rs123 crore.
It is this so-called temperament that, starting with Rs5,000 in 1985 when the Sensex was trading at 150—on Friday it closed at 11,876.43—has allowed him to achieve almost cult status with investors in a country where only 3% of the 1.2 billion population invests in equity markets.
His investment strategy, followed closely by many individual investors, involves maintaining a steady portfolio of stocks with a long-term view while committing smaller amounts to the high-beta activity of equity trading such as day trading that tends to be highly volatile.
And to be fair to Jhunjhunwala, he is reported to have said that comparing him to Buffett is an insult to the chairman of Berkshire Hathaway Inc., who also happens to be one of the richest men in the world and has famously willed away almost all of his fortune to charity.
The Sensex has climbed back about 45% since, while Jhunjhunwala’s concentrated portfolio, which has largely been kept undisturbed, gained only about 15% over the same period.
Jhunjhunwala, the founder of proprietary trading firm Rare Enterprises—named using the first two letters of his and his wife Rekha’s names—twice declined to speak for this story. Most of his portfolio picks are held under this firm, by himself and in the name of his wife.
The most visible, albeit minor, changes made by Jhunjhunwala to his portfolio indicate a trend towards defensive sectors. He purchased an additional 0.65 million shares in software firm Geometric Ltd, where he now owns a 7.27% stake, and 0.3 million shares of Agro Tech Foods Ltd, in which he held a 7.8% stake at the end of December. He also purchased 0.17 million shares of Karur Vysya Bank Ltd and 0.13 million shares of drug maker Lupin Ltd.
On the other hand, he has cut his exposure to Hindustan Oil Exploration Co. Ltd, selling 1.4 million shares during the quarter ended March. Jhunjhunwala also sold about one million shares of Hyderabad-based Nagarjuna Construction Co. Ltd. He reduced the ownership in Pantaloon Retail (India) Ltd by 0.43 million shares and in Titan Industries Ltd by 0.12 million shares. Apart from large investments in a concentrated portfolio and smaller investments in a larger portfolio of listed firms, Jhunjhunwala owns sizeable chunks of equity in several closely held entities through his private equity and venture capital- style investments.
According to data published at the end of December, he owned at least a 1% stake in 31 firms, valued at about Rs1,466 crore.
And at the end of March, he owned at least 1% in 27 companies traded on BSE that declared their latest shareholding details. Some of his portfolio stocks, including the pharmaceutical services provider Bilcare Ltd, pharma firm Zenotech Laboratories Ltd, publisher Infomedia 18 Ltd and water treatment firm Ion Exchange India Ltd, are yet to update shareholding details.
Jhunjhunwala’s holdings in at least a dozen non-listed entities include the 16% stake in Diwan Rahul Nanda’s Tops Security Ltd, New Delhi-based A2Z Maintenance and Engineering Services Pvt. Ltd, Dharti Dredging and Infrastructure Ltd, Inventurus Knowledge Solutions Pvt. Ltd, Maneesh Pharmaceuticals Ltd, Nandan Biometrix Ltd and Concord Biotech Ltd, among others.
To be sure, Jhunjhunwala’s portfolio consists mainly of mid-cap stocks while the Sensex is composed of large caps.
And, despite the beating his portfolio has taken during the downturn, people who have worked with this whisky and cigar aficionado vouch for the soundness of his overall strategy.
“He has tonnes of patience and the temperament that makes him a rare stock market investor,” says Alok Agarwal, a Mumbai-based funds adviser who owns at least 2% in Aptech Ltd, a venture he started to provide computer education. At the end of March, the Jhujhunwalas held a 31.7% controlling stake in Aptech, valued at around Rs123 crore.
It is this so-called temperament that, starting with Rs5,000 in 1985 when the Sensex was trading at 150—on Friday it closed at 11,876.43—has allowed him to achieve almost cult status with investors in a country where only 3% of the 1.2 billion population invests in equity markets.
His investment strategy, followed closely by many individual investors, involves maintaining a steady portfolio of stocks with a long-term view while committing smaller amounts to the high-beta activity of equity trading such as day trading that tends to be highly volatile.
And to be fair to Jhunjhunwala, he is reported to have said that comparing him to Buffett is an insult to the chairman of Berkshire Hathaway Inc., who also happens to be one of the richest men in the world and has famously willed away almost all of his fortune to charity.
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