Budget Expectations 2011

Strong signals: 3G auction at a big premium to help narrow down fiscal deficit (even though one time revenue). Revenue collections from direct and indirect taxes from 2010-11 so far are buoyant and exceeding expectations. Economic growth vibrant with revised GDP growth at 8%. Domestic demand robust partially insulating us from the global anxieties on various fronts.

Expectations:

Direct taxes:

a) Personal income tax-No new relief/raising of exemption limit expected. This will be done with more changes in next year along with implementation of Direct tax code. Salaried employees may be exempted from filing IT returns.

b) Relief scheme for individuals to promote savings & investment particularly related to Real estate/Infrastructure.

c) Expectation on corporate taxation to be reduced by 5%-(may not materialize) along with removal of surcharge and cess.

d) Amnesty scheme to unearth black money and bring them back to IT net very much likely.

Indirect taxes:

a) Service tax may be amplified to cover new areas.

b) Excise duty net may be widened to cover SME”s who are exempt now. This may have some price impact in daily items used by common man.

c) Review of excise duty or petroleum/petroleum products due to rising crude prices.

Sectoral view:

• Power Sector will be the priority of the government to enhance capacities. Structured reforms to be introduced to attract investments and increase productivity. Green power sector will be encouraged with subsidies to ensure viability.

• Automobile sector is already under margin pressure. The rise in interest rates on bank lending may have impact on growth negatively. Fresh levies will dampen sentiments.

• PORT Developments at various new locations will be encouraged including public private partnership to handle increased traffic of goods and materials efficiently.

•  Infrastructure: Infrastructure is a capital intensive industry. Government spending and support is substantially required to improve the overall infrastructure in the country. The provisions required are to be at least doubled to cater to the development process. Expectation of NBFC and banks being allowed to raise Infrastructure bonds could help the situation.

Public – Private partnership to be encouraged to make the sector more vibrant and to complete the infra projects on time.

• Real Estate Sector – Housing may be considered on PRIORITY and for the first dwelling unit the Government can give relief in Interest rates through Banks (a small percentage) to continue the growth in this sector. More reforms to regulate the real estate sector are also expected.

• Telecom Sector – This sector has already shown phenomenol development in revenue contribution as also technology development. This is likely to continuefor the next few years.

• Agriculture – Could be one of the top priorities of the budget. Supports for various agricultural products and their effective public distribution system are likely to be announced in the budget. This is very critical to contain price of the various food Items and making them available at reasonable prices.

Reforms :

a) Increasing the FDI limit to 49% in Insurance sector from the current level could be brought about in this budget.

b) Highlights on the implementation of the GST (Goods and Service Tax) and DTC (Direct Tax Code) will be discussed in this budget.

c) New reforms on Public Distribution system may be announced.

Areas of Concern:

Continuous Uproar on 2G Auction and non functioning of Parliament during the entire winter session. This could blurt the importance on Budget presentation this year.


Crude Oil prices again reaching 100 USD per barrel could put the Government on Severe strain on Subsidies not provided for to that extent.

Higher inflation causing a great concern and regulatory measures of RBI could stagnate Growth.

Rising food and fuel prices are affecting the common man to a great extent and is a big drain on their savings.

Government will be forced to increase expenditure in Education, Healthcare, Food, Infrastructure , etc. There will be other social welfare schemes as well which will increase Government expenditure substantially.

Budget_Expectations_Bonanza_090211.pdf

Alert

For Cricketer Lovers. Watch Live (Cricket World Cup-2011) on this blog on 19/2/2011 at 2.00 pm onwards.

ADAG Stocks Dip

A day after the CBI questioned ADAG chairman Anil Ambani in connection with the 2G spectrum fiasco, the company's stocks took a beating on the bourses. Although ADAG group issued a statement saying that Anil Ambani was not 'summoned' by the CBI and that it was just part of Delhi visit, the sentiment for ADAG stocks remained subdued in morning trade.
Read more - Anil Ambani at CBI HQ for 2G probe

ADAG stock prices at 9.27 AM
Reliance Infrastructure was quoting at Rs 631.00, down Rs 0.65, or 0.10%.
Reliance Capital was trading at Rs 471, down Rs 5.40, or 1.13%
Reliance Communications dwindled to Rs 99.00, down Rs 0.60, or 0.60%
Reliance Broadcast Network hit Rs 69.50, down Rs 1.00, or 1.42%
Reliance Power was quoting at Rs 120.35, down Rs 1.40, or 1.15%
Reliance MediaWorks slipped to Rs 154.00, down Rs 1.90, or 1.22%.

Nifty Flat

The Nifty was quiet in opening trade today, with a positive bias. Asian markets too were trading with marginal gains. Metal, oil & gas and select financials were on buyers' radar while ADAG, realty and private bank stocks were under pressure.

Tata Steel gained 2% after 1.5% fall in initial trade, as the company's Q3 consolidated net profit was up by 122% at Rs 1,003 crore on year-on-year basis but EBITDA margin was at 11.6% as against 13% in same quarter the last year. Raw material costs increased at Rs 10,270 crore versus Rs 8,030 crore, YoY.

Among frontliners, DLF, SAIL, Reliance Capital, Reliance Power, Reliance Infrastructure, IDFC, Tata Motors, Axis Bank, HDFC and ICICI Bank were witnessing selling pressure.

However, L&T, Tata Power, BPCL, Infosys, TCS, ITC and HUL were supporting the markets.

At 9:17 hours IST, the 30-share BSE Sensex was trading at 18,314, up 40 points and the 50-share NSE Nifty rose 8 points to 5,489.

However, the Nifty February futures were trading at 9 points discount. The CNX Midcap fell just 10 points at 7,730.

Midcap & Smallcap space:

Hexaware shot up 5% as its adjusted net profit increased 135.7% at Rs 39.6 crore in fourth quarter of CY10 versus Rs 16.8 crore in previous quarter.

MIC Electronics and Thomas Cook were up 5% each. Escorts was up 2.5%.

M&M Financial up 1% as the compnay launched QIP worth Rs 426 crore, according to sources.

Intraday Trading

What Is Intraday Trading?
Intraday trading, often just "day trading" buy and sell financial products on the same day practice. It is often mentioned in relation to the stock market, but you can make many other types of day trading the financial vehicles. This is a high energy field, which is quite vulnerable, but also offers significant profit opportunities. Successful day trader can make a life good and consistent.

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Choose your Stocks
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Book Profits in Time
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