Author: Raoji
Categories
Linkfest:Jan 11, 2013
Some stuff that I am reading today morning:
Gold is useful because it is useless (FirstPost)
US S&P 500 are back at 5 year high (ET)
India wastes 21 Million tonnes of wheat every year (FE)
Soon , Nifty futures on Osaka exchange (BS)
Govt may broaden scope of Rajiv Gandhi Equity Scheme (Mint)
Of Kingfisher and Mallya’s pot of gold (CapitalMind)
Howard Marks Memo to investors (OakTreeCapital)
Louis Dreyfus says China is manipulating the cotton market (Climateer)
Examining Ben Graham’s record:Skill or luck ? (Greenbackd)
What effect does living frugally play in the success of a trader? (SMB)
This post is in continuation of my Forecasting Folly series (see here)
On 29th Dec, 2012, Dalal Street’s finest at Kotak Securities came out with their equity outlook for 2013.
As is their wont, they recommended 5 stocks for 2013.
And guess what, one of the stocks recommended was Arshiya International.The then prevailing price was Rs.118, a target price of Rs.188 was assigned to the stock.
A short two weeks later, the stock has collapsed due to allegations of corporate governance issues.Now it is quoting at 77.0 , one third of the then CMP and looks like it is set to go down even further.
Kotak’s response to this is typical of our brokerages here ; it has suspended coverage of the stock !!A note to clients says
“The stock has declined by 40 percent over the last 12 months, largely driven by slowing economic growth which has led to less than estimated growth in segments like FTWZ/Container rail and high debt position. Given the above and lack of clarity on the alleged wrongdoing by the management we are suspending coverage on the stock till clarity emerges,”
This is probably a record in the Indian equity markets where a buy recommendation has collapsed in a space of two weeks !!
Forecasting folly, anyone?
Categories
The fall of Arshiya International
In an earlier post, I had briefly commented on Arshiya International.
Today again Arshiya has hit the lower circuit.In an article in Economic Times, employees of the company had alleged financial irregularities in the company.
“The promoters have misguided investors, stakeholders by painting a rosy picture so far, while the company is hollow – it is a mini Satyam,” said one of the sacked employees.”
Some bloggers had also wondered
how is that Arshiya with a networth of @ Rs 550 crs and ROCE of @ 10% and a Market Cap of under Rs 800 crs and a relatively high Debt Equity is executing Warehousing Projects of Thousands of Crs.
Only time will tell if Arshiya will turn out to be like DCHL.In the meantime, the ill-fated investors will have to grin and bear the losses.