'Software stocks will have some more trouble'
Ramesh S Damani says the price movement in software stocks is weak and the weaker ones are breaking bottoms.
The Ramesh S Damani chat will henceforth take place every Tuesday at 1600 IST instead of Wednesdays.
deval (Wed Dec 20 100 3:59 IST)
i am trying to find a multibagger! any idea about: jupiter orga/citicorp securities/Fujitsu ICIM/Infotech Enterprises
Mr Ramesh Damani (Wed Dec 20 100 4:51 IST)
Deval- i like citicorp the best among the list you mentioned. Thanks for joining in. Let's start
vinoo (Wed Dec 20 100 4:22 IST)
good evening mr. damani, what's ur view of the software sector it seems like they have no bottoms? is it time to buy tech stocks? or is it better to wait for them consolidate?
Mr Ramesh Damani (Wed Dec 20 100 4:52 IST)
vinoo - clearly software stocks will have some more trouble
man (Wed Dec 20 100 4:25 IST)
what's happening in cement stocks? do u think one can buy into them at the current levels?
Mr Ramesh Damani (Wed Dec 20 100 4:55 IST)
man - I like acc as a takeover candidate.
vinoo (Wed Dec 20 100 4:34 IST)
what's ur expectation from infy?
Mr Ramesh Damani (Wed Dec 20 100 4:57 IST)
vinoo - infy will do well in EPS. The PE is compressing though
sam (Wed Dec 20 100 4:55 IST)
is it possible for me as an indian to buy american stocks either directly or indirectly?
Mr Ramesh Damani (Wed Dec 20 100 4:58 IST)
sam - currently indians can't. Though Indian mutual funds can
parvinder (Wed Dec 20 100 4:54 IST)
Mr. Damani why do u think the software stocks will have some more trouble and if so to how much more is the downside (10% or 20%) from current levels?
Mr Ramesh Damani (Wed Dec 20 100 4:59 IST)
parvinder - hard to say. The price movement is weak. The weaker ones are breaking bottoms.
shiv (Wed Dec 20 100 4:59 IST)
how much more PE compression do u expect to happen in the tech stocks? indian tech companies are yet to come out with earnings warnings?
Mr Ramesh Damani (Wed Dec 20 100 4:59 IST)
shiv - infy is at 65 times current year earnings. A bit pricey from traditional models
shiv (Wed Dec 20 100 4:51 IST)
How can the Indian market sustain considering the US and Japanese markets in a firm bear grip? what reasons could trigger a rally in India?
Mr Ramesh Damani (Wed Dec 20 100 5:0 IST)
shiv - US Interest rate cuts or massive PSU divestment
parvinder (Wed Dec 20 100 5:0 IST)
so you would advise to wait some more time before any fresh commitments?
Mr Ramesh Damani (Wed Dec 20 100 5:1 IST)
parvinder - in tech yes. though market rarely advertises before it moves up.
man (Wed Dec 20 100 4:39 IST)
why are the pharma stocks so dull in the last one year? aren't they attractive at current levels?
Mr Ramesh Damani (Wed Dec 20 100 5:2 IST)
man - the MNCs because of constant meddling by DPCO. The domestic ones are doing better but watch out for WTO
shiv (Wed Dec 20 100 5:2 IST)
what model should one follow for valuing tech stocks? don't u think the old models are not applicable to value stocks in the tech arena?
Mr Ramesh Damani (Wed Dec 20 100 5:3 IST)
shiv - good question. Look at market cap and try and visualise if a man would pay that kind of money to buy it. Would the promoters themselves?
sam (Wed Dec 20 100 5:3 IST)
can u see some value in steel and PSU stocks, some of them have started showing signs of a good move?
Mr Ramesh Damani (Wed Dec 20 100 5:4 IST)
sam - psu stocks look good if you beleive that GOI will divest.
sam (Wed Dec 20 100 5:5 IST)
which PSU stocks look good to you sir?
shiv (Wed Dec 20 100 5:6 IST)
which stocks would you suggest?
Mr Ramesh Damani (Wed Dec 20 100 5:8 IST)
SHIV - SAM , Two PSU stocks that have good movement currently are BEL (Bharat Electronics) and Shipping Corp
shiv (Wed Dec 20 100 5:9 IST)
what's the story in Shipping Corp
Mr Ramesh Damani (Wed Dec 20 100 5:9 IST)
shiv - disinvestment and shipping is doing well
shiv (Wed Dec 20 100 5:11 IST)
what's the story in BEL?
Mr Ramesh Damani (Wed Dec 20 100 5:11 IST)
shiv - a great company at a PE of 4 for FY 2000-2001.
sam (Wed Dec 20 100 5:11 IST)
do u think the govt. has the will and power to do the divestments if so what stocks should one buy?
Mr Ramesh Damani (Wed Dec 20 100 5:12 IST)
sam - unfortunately they have shown no spine
parvinder (Wed Dec 20 100 5:12 IST)
where do see the market headed? will it be volatile or again in a downward phase or consolidation phase?
Mr Ramesh Damani (Wed Dec 20 100 5:13 IST)
parvinder - I think we will hold at 4000 levels. Somehow!
sam (Wed Dec 20 100 5:14 IST)
how do u see the FIIs move to the MSCI adjustment? Will that affect India in a major way in the coming years or do u see the market adjusting to it slowly?
Mr Ramesh Damani (Wed Dec 20 100 5:15 IST)
sam - market will adjust to it. It is still atleast 6-12 months away
parvinder (Wed Dec 20 100 5:15 IST)
what do u think of VSNL as an investment at the current levels?
Mr Ramesh Damani (Wed Dec 20 100 5:16 IST)
parvinder - good bet if disinvested. Not otherwise, because pvt cos will make lunch of them in a few years
shiv (Wed Dec 20 100 5:16 IST)
why does it have such a low PE of 4? is it that the market is so wrong about this company or is it that there is something wrong which we don't know of?
Mr Ramesh Damani (Wed Dec 20 100 5:18 IST)
shiv - great quetion. One it is a PSU. Secondly it is defence so it is hush hush. Third that's where the greatest opportunities lie in the market. When market corrects you will have a geat payday. It is an excellent co deeply undervalued in my opinion.
parvinder (Wed Dec 20 100 5:17 IST)
which pvt. companies do u see as competition for them, are they listed in india?
Mr Ramesh Damani (Wed Dec 20 100 5:19 IST)
parvinder - technology is overtaking telecom. Interenet makes distance redundant and fibre optics makes bandwidth irrelevant.
shiv (Wed Dec 20 100 5:19 IST)
after today's news of govt. comsidering opening up the defense sector the stocks may hog the limelight in the coming days? who knows it could be a real great multi bagger?
Mr Ramesh Damani (Wed Dec 20 100 5:20 IST)
shiv - cheers to that
sam (Wed Dec 20 100 5:21 IST)
but for all the gateways is where the key lies, and that key is with VSNL? dont u think it has realised thios and is preparing itself fro the onslaught from the new entrants?
Mr Ramesh Damani (Wed Dec 20 100 5:22 IST)
sam - I doubt it. They dont have he operational freedom or incentives to take risk. The monoply will be broken
Mr Ramesh Damani (Wed Dec 20 100 5:23 IST)
thanks for joining in. See you next week. Bye
Money
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