'Tech boom is for real'
Ramesh S Damani tells investors to understand that financial markets always gravitate between boom and bust, bullish and bearish, greed and fear. He also says that the tech boom is for real and India is building a world class software industry though valuations will keep swaying. He expects the old economy stocks to do well in the next quarter.
Mr Ramesh Damani (Wed Apr 5 2000 6:37 IST)
Hello everyone thanks for joining in. let's start.
krishna kant bagree (Wed Apr 5 2000 3:49 IST)
right now share market is fluctuating a lot.when will it get stable?
Mr Ramesh Damani (Wed Apr 5 2000 6:38 IST)
krishna - markets will stabilise when NASDAQ stabilises
Raghu (Wed Apr 5 2000 4:27 IST)
Hello Mr Damani how long do you see the Microsoft crisis affecting the stock markets? What do you think will be the fallout on the IT shares? Do you see people heading back to invest in Blue Chip companies?
Mr Ramesh Damani (Wed Apr 5 2000 6:43 IST)
Raghu, Microsoft will blow over When AT&T was split the Baby Bells prospered and a telecom revolution was born. Tech stocks will survive though only the larger ones. Money should flow in to the old blue chips like Colgate, Nestle etc
askme (Wed Apr 5 2000 6:20 IST)
what is happening in the market why is it so extremely volatile? Is it another bust that the market is facing like the cement and the finance busts in the past?
Mr Ramesh Damani (Wed Apr 5 2000 6:56 IST)
askme - financial markets always gravitate between boom and bust, bullish and bearish, greed and fear. We need to understand that. Tech boom is for real. We are building a worldclass software industry. However valuations will keep swaying.
vinu (Wed Apr 5 2000 6:36 IST)
is the circuit filter relevant for india? don't you think that this facility is being used for creating either buy or sell side panic
Mr Ramesh Damani (Wed Apr 5 2000 6:46 IST)
Vinu, SEBI is looking into the circuit filters. 8% , 30 mins cooling another 4%. Clearly they need to be re-thought because they currently have weaknesses.
vipul (Wed Apr 5 2000 6:37 IST)
why is SEBI and the BSE/NSE not considering relaxing margins or imposing sell side margins when the market is falling like crazy? how do they decide on the margins?
Mr Ramesh Damani (Wed Apr 5 2000 6:47 IST)
Vipul- market is going down of its on weight not short selling. Buyers should have special margins imposed. Shortsellers actually buy back scrips in a falling market to cover short positions. As such very little short position exists.
rushabh (Wed Apr 5 2000 6:39 IST)
how long will we mimic nasdaq mr damani?
Mr Ramesh Damani (Wed Apr 5 2000 6:49 IST)
rushabh - NASDAQ is an aging bull market. The Indian bull market is just one year old. At some time we will delink I believe. Maybe when the Infosys premium between NASDAQ and BSE Evaporates.
vinu (Wed Apr 5 2000 6:39 IST)
how are the markets regulated in the US in times of panic witnessed like yesterday?
Mr Ramesh Damani (Wed Apr 5 2000 6:51 IST)
Vinu- SEC is the regulating authority in USA. They keep hands off. In times of great panic, the Federal Reserve has tended to lower interest rates to provide liquidity. Sometimes they use "Moral Suasion" to prod players to act in a certain way. It is voluntary though. Operating principle is full disclosure but buyer beware.
poonam (Wed Apr 5 2000 6:48 IST)
what is your advice to investors like me whose portfolios have halved?
Mr Ramesh Damani (Wed Apr 5 2000 6:52 IST)
poonam - investments should be viewed as a long term affair. Trading is a full time affair and should not be done on a part time basis. Over years, equity investments outperform all other types of investments. In the short run they are extremely volatile. Pick good stocks, buy on days like yesterday when the market was in panic
vipul (Wed Apr 5 2000 6:47 IST)
is the new system that sebi is thinking about good enough or better than the existing ones?
Mr Ramesh Damani (Wed Apr 5 2000 6:55 IST)
Vipul - a bit better. Basically "A" group or index stocks should not have any circuits. Equities are meant to provide liquidity. Circuits act against that. However "B" group shares need the filter. However trading must be checked to prevent price rigging if it occours.
poonam (Wed Apr 5 2000 6:54 IST)
what are your current recommendations?
Mr Ramesh Damani (Wed Apr 5 2000 6:57 IST)
poonam - for fresh money a good mix is 50% tech and 50% old economy. I think the old economy stocks will do well in the next quarter.
vipul (Wed Apr 5 2000 6:49 IST)
if that is the case and FIIs and institutions are also net buyers in the last couple of days where is the seling coming from is it that people are going short now?
Mr Ramesh Damani (Wed Apr 5 2000 6:59 IST)
vipul - markets graviate between fear and greed. Only in financial markets when price rises of (stocks) demand rises for stocks. When prices fall people sell more. It is aginst the laws of demand and supply. However that is the way it is.
RAHULBI (Wed Apr 5 2000 6:58 IST)
ANY VIEWS ON USHA BELTRON?B/H/S NOW IN THE COMPULSORY DEMAT LIST
Mr Ramesh Damani (Wed Apr 5 2000 7:0 IST)
Rahulbi- Usha is correcting from a long climb up. Good support around 250 levels. Mgmt is working on a good restructuring plan.
RAHULBI (Wed Apr 5 2000 7:0 IST)
ESCOSOFT,ESCOTEL==ESCORTS IS IT A BUY? ANY STOP LOSS
Mr Ramesh Damani (Wed Apr 5 2000 7:2 IST)
Rahulbi- i dont follow Escorts but i think its a good bet. What's the investment logic?
gautam ahuja (Wed Apr 5 2000 7:2 IST)
good evening sir, i purchased pentamedia grapics and its come down to half the price i purchased
Mr Ramesh Damani (Wed Apr 5 2000 7:3 IST)
Gautam, Ouch! that must hurt. Pls read the answer I gave to Poonam earlier.
deep (Wed Apr 5 2000 7:1 IST)
what's happening in ZEE it has halved from its peak levels? what is the reason behind such a drastic fall? do you find value in Zee at the current levels?
Mr Ramesh Damani (Wed Apr 5 2000 7:5 IST)
Deep - Zee started falling the day it announced an ambitious $1.5 billion GDR. It should have a technical bounce from these levels
abhi (Wed Apr 5 2000 7:2 IST)
how good is exim policy i think it has brought in lots of sops to stock in FMCG and for stocks like BHEL?
Mr Ramesh Damani (Wed Apr 5 2000 7:6 IST)
abhi - explain sops. In fact competition in FMCG will open up.
deep (Wed Apr 5 2000 7:6 IST)
with satyam, zee etc. coming in index from next monday don't you think they are attractive at the current levels?
Mr Ramesh Damani (Wed Apr 5 2000 7:7 IST)
deep - good point. Index-based fund managers will buy.
Shriprakash (Wed Apr 5 2000 7:8 IST)
Since annual results of Infosys is approaching, do you suggest to buy at present rates ?
Mr Ramesh Damani (Wed Apr 5 2000 7:10 IST)
Shriprakashji - Infosys should report Rs 85 crore + in the last Quarter. nEXT Year it is on target for Rs 550 crore for the full year. Valuations look good. Also did you see Bharat Electronics results today? They were very good.
investmentbanker (Wed Apr 5 2000 7:8 IST)
mr damani you know my profession. i am scared of the coming supply of paper in India and US. will it afffect the secondary market substantially? See the Zee price...
Mr Ramesh Damani (Wed Apr 5 2000 7:11 IST)
investment banker - problem is good and it is with the quality of paper coming. Remember whar happened after the GDR issues in 1994. Greed and Fear though.
rinku (Wed Apr 5 2000 7:13 IST)
Please advice on what should one do with the present ICE stock portfolio which has nearly halved in the last few sessions.
Mr Ramesh Damani (Wed Apr 5 2000 7:15 IST)
RINKU - keep the leaders. The rest sell on rally unless you have some conviction
deep (Wed Apr 5 2000 7:13 IST)
RIL announced buyback meeting today after the market closed. The board is meeting for the same on 12th what is ur opinion on the stock?
Mr Ramesh Damani (Wed Apr 5 2000 7:16 IST)
deep - I am not bullish on the petrochemical sector.
rinku (Wed Apr 5 2000 7:17 IST)
Is SBI a good buy at present?
Mr Ramesh Damani (Wed Apr 5 2000 7:18 IST)
rinku - they will tend to do well in a declining int rate environment. Good value stock.
Mr Ramesh Damani (Wed Apr 5 2000 7:20 IST)
anil - outstanding positions in A group for all brokers summarised. SO you know how many shares ACC is long or short in the "MARKET"
Mr Ramesh Damani (Wed Apr 5 2000 7:21 IST)
We are almost out of time last Q
gautam ahuja (Wed Apr 5 2000 7:3 IST)
good evening sir, what is the best stock to buy rite now in 1.information sector 2.communication sector 3.entertainment sector 4.pharma sector 5.cyclical sector?
Mr Ramesh Damani (Wed Apr 5 2000 7:23 IST)
Gautam - buy 50% tech, 50% old economy. Two tech ideas are Info and Visual. Two old economy may be Colgate and Larsen. Good luck and thanks all for joining.
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