Crude price brings shocks to OMC’s

Government asks OMC’s to take up burden of crude oil price increase by Re. 1/- per litre. This is not a good decision, when crude prices dropped, they brought in duties to take advantage of the gains and filled the government kitty. That was a good decision because small difference in price which the consumers were used to spending will not help them save big & rather make them spend that gain in unwanted luxuries. The same amount if saved by the government will help them get some big projects done, which will benefit the whole population. It actually helped the government to clear off the bonds that it had given OMC’s to make good of the losses when crude was its peak as they were selling at lower prices to ensure that our economy does not suffer.

Now when crude prices moved up, government still wants to have the same revenue and pass the burden to the OMC’s just because they were used to it, is a bad decision. It shows that, Government is not worried about businesses going under loss, while it wants its share to be intact.

OMC stocks which gained strength on their own weight which was not so far since their existence now is again going back in the losing spiral. Stocks have started to bleed heavily post this decision from the government.

USD at ₹64, poised for 60 in few months

When it rains, it pours cats and dogs. how true is this saying. A period where everything is working in India’s favor, good governance, good geo-politics, international accreditation, good monsoon, pro-industry bureaucracy, lower commodity prices, high on reforms, high on FOREX and along with that strength of the INR.

A couple of months back, USD was trading at ₹69 to a dollar, now it is ₹64, a near 10% appreciation. If INR appreciates, it is pain for exporters. IT companies have lost 10% of their margins just because of this appreciation. Analysts expect the USD to reach 60 soon, IT and Pharma will become a sure no, no for investors.

In spite of the USD losing value, our FOREX reserves have reached historic peak, we are about to touch the $400 Billion mark by September 2017. Again another good thing is that, the remittances from NRI’s have been on the high, both because of the top class investment climate in India and the uncertainties of holding USD. Along with this advantage, Crude Oil prices holding at $60 is a big advantage for India.

Above 60B$ saved per annum and crude will not see its previous high of 126$ again, it will only decline. All these savings are expected to be ploughed into the economy in various ways, one of the main emphasis would be infrastructure. Look forward to see a totally changed India in the next decade.

India – The world’s investment destination.

SwachhBharath

The other day I was in the Millionaire Mind intensive seminar by Harv Eker. It was a 3 day intensive course on how to become a billionaire by taking away all the blocks in our mind. It was an impressive program. The learning for me was when Harv, told about the potential India has as an investment destination. The following is his words, ‘Your prime minister has been admired by the world, he has been called by other countries to take the opportunity of growth by either participating or investing. Not many leaders get such an opportunity, which means India is the world’s destination for investment. He has already been to the US, UK, recently to Australia and more to come very soon. All his thoughts are positive, I travelled through your country in the past weeks and I could witness people have only positive aspirations. For the next 10-15 years India is the place to make big money, your markets are going to roar. Being here in India, living in India at this part of its great journey, if you are not capitalizing on the potential, God, only God can give you another such opportunity. Take the opportunity, be invested, you will feel proud that you took the right decision when you look back to 2014 from 2019. If you wait for more confirmation, you will only be staring on a lost opportunity.”

Everything said in few minutes, I was very happy listening to this conversation, my judgement too was the same, India will all it glorious development in the next 5 years. Why is it so? What is so euphoric?

One by one if we look at the external situation

There is able administration, who are willing to take fast decisions.

Crude oilCrude Oil is a story that is next to over now, producing countries are no more waiting for their leader to hold production and dictate price, they are scrambling to get their maximum share in whatever they could sell at available price. It has become a buyers’ market, no more a sellers’ market. Something our generation has not experienced so far. No more new high’s possible in crude oil, it has begun the other part of the journey on its bell curve.

Very good rains this year, many of our dams are full. Many governments are planning to construct new dams. So, crops are going to be very good in the coming years.

1 trillion of investments coming into India from the International markets, this will bring many new businesses to India and so much employment opportunity.

Make-In-IndiaLogo650

Make in India, drive is going to add more value to our products and this means higher profits.

Swach Bharath drive is going to make our country crisp and clean, this is a great opportunity. A person wanting to open a window cleaning company can make billions, take our railways for example, it is so dirty that one company can run exclusively to do the cleaning business. As I write this I am travelling in the train from Salem to Bangalore. Like this if we look for cleaning opportunities as a business there are plenty.

More number of businesses and more employment means, people have more money to spend and all that money will circulate into the economy making people more and more rich.

Waking up infrastructure projects will ensure that we have more and better road networks which will make real estate accessible. This should ease out pressure on cities with growing population influx.

Infrastructure growth means big business opportunity for Cement and Steel companies, their businesses are going to soar.

There are a lot more that will be unfolding as days pass by.