- Indian stock market manipulations
The recent revelations of CBI that bank loans funding was diverted to stock markets for manipulating shares prices is not at all a shocker.
Indian stock markets are not only third rate but highly inflated and manipulated in clutches of corrupt mafia of operators,brokers and fraudulent financial advisory services companies.
Small small companies for example educomp have market capitalisation value in thousands of crores which is absurd, illogical and high level of frenzy and madness in stock markets. Thanks to government policies or rather no policies at all and laissez faire initiated by MM Singh and Sonia.
I give another example.There are hundreds of such examples in stock markets
Jet Airways- Every one knows that aviation industry is highly competitive, capital intensive, has high fuel and maintenance cost and widely fluctuates from season to season in set-km utilisation factors, traditionally this industry is not able to perform impressively .
Now see jet fundamentals: Current market price of stock after a Rs 100 huge fall recently Rs 804
Parameter March 10 year ending sept 10 Q end Sept 10 year End
P/E ratio -14.30 139.51 38.47
EPS growth 16.23% -103% -
Net PM -4.5 0.40 1.54
ROE -0.18% D/E ratio 5.26 book value per share Rs 96
The stock of this company recently touched 925 and now crashed still very high at Rs 804
It is surprising that there is frenzy in markets defying all logic and sense.The stock of this company is by no means worth the price prevailing in market.Who are the people who are buying the shares and raising the stock prices.
SEBI should examine such cases.They are plenty.
No wonder Indian stock markets are in grip of mafia and operators and there is madness and euphoria which is not justified by any parameters of measurements.
This is the contribution of MM Singh government which calls it development of economy.loot ,price rise and corruption is treated as development.
Investors should remain away from these markets propped up on crutches of FIIs and manipulated by a mafia network.
The commonsense calls that any stock that is sold at more than realisable book value of the company share must be justified beyond any reasonable doubts of income potential.
All these talks of estimated earnings in 2012 and 2013 are crap and tricks created by over paid and profiteering financial experts to fool investors into markets.No body can forecast future 3 years ahead.It is not even sure if company will last after 5 years.
Any stock selling at more than 15 P/E ratio in indian markets should be touched with care as it amounts to only 6.5% returns which is FD rate in bank.Any higher P/E ratio is simply speculation and hysteria.
I think indian stock markets should remain at levels of 4600-4800 Nifty.That is fair valuation of Indian companies and fair enough for entry by common man.
We don't expect MM Singh to do anything hence only solution is to dismiss this corrupt,incompetent and capitalist stooge government run by fraudulent experts.
People should understand that India cannot grow alone faster than rest of world in integrated world economy.This government is fooing the countrymen to help corrupt and capitalists loot the country.India also does not have land and natural resources.Add to this burgeoning population and addition of almost 1.6 crore people every year.
SEBI must do its role in a better way and new formula for stock valuation should be introduced to keep stock prices reasonable. In my view stock valuations are frtadulent and almost 70-100% more than what these should be offered to public.
Prof R K Gupta
Note: the named companies in above discussiosn were just for explanation and we have nothing against or for these companies.There are hundreds of such companies in market.
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