But what I read in newspaper today was that PM is saying enough is enough, tough measures are to be taken soon and thus proposed a hike of Rs 2 per liter Afterall election year hai Bhai :cheerio: So honestly lets be realistic and believe that price of oil will not rise more than 10% at most till elections are there as scheduled, better we make assumptions from here only:- What about this deficit pulling rupee down and benefiting IT industry (including KPO/BPO)sooner than expected ? Actually I believe under current oil crisis this is not the battle of better country racing ahead but about the country which can still manage and make less loss taking lead in this phase or else the entire concept of crisis itself is a bit artificial or has arrived/been forced to arrive just a decade before expected
Andy :)
You mentioned a very important aspect of this crises, survival !! India had a good growth story in 2007, however, the Government of our country has a bigger role when it comes to the factors which will hamper our growth - we all know growth has a direct correlation with employement in any nation. Given we have a huge population, which is increasing at a faster rate (faster than 7% growth ateast), at this growth rate, we will be having a huge number of unemployed youth in next few years. No offense to PM, but he is taking India no where, lets summarize this month's events - Rs 2 hike in petrol - Farmer loan waiver - 71,000 Cr - China relief package - 1 billion (proposed)
We are sitting on 4% Fiscal deficit, Crude price will make the deficit even more, and we will be helping China with another billion, when it is known that China has recently increased its Oil consumption - for its new Navy troops? Imagine what will happen when our Coastal forces running out of Oil, in a middle of defense (if attacked by ~some~ bigger neighbouring power)
The Oil Secy has proposed 10 Rs rise in petrol, which is minimum to save Oil biggies, it gives me shiver when I think, IOC, HPCL, BPCL will shut down petrol pumps in metros next month, if this continues 😞
The Oil Secretary has asked for a 10 Rs hike in petrol... so they should arrive at a consensus for a Rs5 hike according to most... Even if there is a Rs2 hike media predicts a 8+% inflation.... thats why the rate sensitive sectors have come down so heavily... Do you guys feel the RBI will hike the CRR again... the rupee is also going weak.. so RBI may again intervene when it goes above 43.5/-..
i think after karnataka polls congress knows they will be beaten in elections anyhw why not inc petrol prices it doest matter much:puppydog:
Absolutely correct mate.Thats how shrewd politicians can be.Congress after facing big loss in Karnataka, is counting itself out from next general elections.Now increasing petrol is throw of dice from them to recover its losses. I wonder from where govt took decision to get petrol price up to Market price(RS 61.86) from Regulated price(Rs 45.52):angry:.Govt is reasoning misuse of petrol as reason.Now they want to help petrol companies.:angry:.
Lets pray next govt has something better to offer.Or its Bicycle time mates.
Raising petrol prices is a good thing. The companies have been facing millions and millions of losses due to this. If it continues, they could very well stop operating or export most of their output. Its about time this burden is passed on to the consumer.
You mentioned a very important aspect of this crises, survival !! India had a good growth story in 2007, however, the Government of our country has a bigger role when it comes to the factors which will hamper our growth - we all know growth has a direct correlation with employement in any nation. Given we have a huge population, which is increasing at a faster rate (faster than 7% growth ateast), at this growth rate, we will be having a huge number of unemployed youth in next few years. No offense to PM, but he is taking India no where, lets summarize this month's events - Rs 2 hike in petrol - Farmer loan waiver - 71,000 Cr - China relief package - 1 billion (proposed)
We are sitting on 4% Fiscal deficit, Crude price will make the deficit even more, and we will be helping China with another billion, when it is known that China has recently increased its Oil consumption - for its new Navy troops? Imagine what will happen when our Coastal forces running out of Oil, in a middle of defense (if attacked by ~some~ bigger neighbouring power)
The Oil Secy has proposed 10 Rs rise in petrol, which is minimum to save Oil biggies, it gives me shiver when I think, IOC, HPCL, BPCL will shut down petrol pumps in metros next month, if this continues :(
I think we will see the price of petrol increased by Rs 2. The duty on Oil will come down from 28% to ~ 22%. This will lower the burden on Oil companies. Fiscal deficit is part of all the world economies. Even US is at 2.6%, China at 3.2%. Being a developing Economies is 4% looks to be a good number I feel increasing the price of Oil wont help India a lot becaz it will push the inflation which will lead of slow down in economy. I feel its choosing the one of the passive devil Happy to answer any question Thanks Shalabh
Aviation sector is in real trouble. The are anyhw suffering huge losses and now with fuel hike their losses will double now. Can anyone telme why anybody invests cash in such loss making business and why r their share prices qouted such high?
The big groups like wadia and kingfisher jumped into the pool because the investement was one time and gave returns with only operating cost, because the planes are most of the times on lease. The input being only crude. Recall when the companies came into existence crude was less than 50$, they wouldnt have imagined world with 150$ crude. About the stock prices, Jet stock refuses to take off even in bull markets let alone the slump seen these days. I still feel they will continue to bleed till crude gets stable whatever the end price may be.
i mean now the situation will be that there will be a double whammy for airlines
1) prices will have to be raised by atleast 50% soon. I mean soon we mauy se lowest airfare at 6000 bucks and then only rich and uppper middle will be able to travel like was the case till 2002
2) i think all these low cost air carriers will go bust or merge
3) passanger traffic will slow down a lot already in 2007 growth was 10% vs 27% in 2006
also it highlights that every week one small airlines goes bankrupt in US
matter of time before air deccan,spicejet and indigo go belly up
as told by BA ceo airlines model is suitable till oil is 60 dollars after that airlines r over:new_shocked:
Thats true. Now will be true test for gopinath's "low cost airlines".
I am attaching a snapshot of jet airways NSE stock. 9634
If you see the stock the last bit of all investors left the stock in March with a red candle. Now for two months in a row it is languishing at lows of 500 which is half of what it was in frenzied january. So it does not seem a good buy. I reckon it will make new lows if crude continue to rise.
british airways ceo said on recrod that no airline can function if oil is above 60 dollars i have doubts whether oil will ever see 60 dollars again??????????
maybe airlines may have to slash employes salaries by huge margins
the salaries these pilots get of 2-3-4 lacs a month maybe a thing of thje past soon
who knows pilots may get 3\40k-50k pm soon
some big formula needs to be worked out or aviation sector is dead and burried
But dont you think only low cost airlines will suffer because their margins are very less. If you see the growth rate of aviation, agreed the rate was 27% for last 2-3 years has come down to 10% but still it is good considering the large base effect. Now if some business man has to fly from delhi to mumbai he will not consider if fares are 10k or 12k. The effect will be on low cost airlines. What say......is jet a good buy if it shows some signs of reversal.
9636
If you see the stock the last bit of all investors left the stock in March with a red candle. Now for two months in a row it is languishing at lows of 500 which is half of what it was in frenzied january. So it does not seem a good buy as of now. I reckon it will make new lows if crude continue to rise. but if crude goes stable which it wil eventually then perhaps it is destined to rise again on new lows of course.
chalo ek min ke liye tumhari baat man letein hain........
Lets see things relatively, there is Air India, Jet on international routes and Indian, Jet and Kingfisher on domestic routes. Then comes low cost airlines which are aplenty alongwith Jet's Jet lite.
Now if all the airlines companies are making losses then the first ones to leave the arena will be unsupported ones like Air Deccan and Air Sahara did, which could not support the negative profits.
Now if there is consolidation in these turbulent times which i am sure there will be then the company which comes on top will be one amongst Jet or Kingfisher.
and see that Jet was indeed in profits Q3 last year. So the downfall of stocks was atributed to strained balance sheet. Now it is at new lows of 500 which will surely come further down but dude Airlines are here to stay no matter if they make losses. Probably the fragile ones will leave, but others will surely overcome these turbulent times. For you and me it is a luxury, but for most of others it is fast becoming a necessity.
Moreover I am not buying it right away. At these valuations i will be seeing couple of quarters more. Now this bearishness in the stock and the losses are because they are unable to increase fares due ot fragmented markets. Once they increase fares, the industry will come back on track(like it was making profits an year back). Its just matter of couple of years before the airline industry consolidates. Dont write off the industry just because its operating expenses are increasing.
But dont you think only low cost airlines will suffer because their margins are very less. If you see the growth rate of aviation, agreed the rate was 27% for last 2-3 years has come down to 10% but still it is good considering the large base effect. Now if some business man has to fly from delhi to mumbai he will not consider if fares are 10k or 12k. The effect will be on low cost airlines. What say......is jet a good buy if it shows some signs of reversal.
9636
If you see the stock the last bit of all investors left the stock in March with a red candle. Now for two months in a row it is languishing at lows of 500 which is half of what it was in frenzied january. So it does not seem a good buy as of now. I reckon it will make new lows if crude continue to rise. but if crude goes stable which it wil eventually then perhaps it is destined to rise again on new lows of course.
Its perfectly okay to have sympathy towards a sector thats not performing...but its more important to understand the reasons behind it. The aviation industry suffered a loss of aroun $ 400m and this year its to get even worse. The oil is breaking its all time highs and every time it comes off. its creating higher bottoms. Thats surely a sign of bullishness which is not going to fade away in a short span of time. According to a mckinsy report, oil should touch a level of 200 by 2010 end. Now imagine what nightmare these airline companies are going through. Ofcourse they are trying to survive by cutting their costs and streamlining their operations, leasing out planes instead of buying them, focusing on movement of goods n cargo,sharing the ground staff and everything....but then again...you cant just survive with bleeding bottomlines....and the recent consolidation thats goin on is because of all this. Again i would say, dont get emotional and dont invest into aviation...if you havent done it already! 😉
guys - u also need to understand that Aeroplanes are not like Cars which will purchase oil when their tanks get empty... most of the international Airlines (especially the Euopean ones) would have entered into hedges long back ago which would help them to get fuel at a lower level than what is right now... m not sure abt indian companies though... so if a company has hedged their price at say $80 - it might make profits....
and slashing pilot fees etc. does not even make sense.... abt 90-95% of the costs are accounted by fuel... so the airlines will not gain much from squeezing out remaining 5-10%
The Indian markets had a very bad day with the SENSEX falling 352 points and NIFTY by 130 points .... Seems we have a bad time ahead... With the withdrawal of RSP an ally of CPI from the UPA ... there is speculation that the it could be a prelude to the Left withdrawing their support... though this is only pure speculation ...
The Indian markets had a very bad day with the SENSEX falling 352 points and NIFTY by 130 points .... Seems we have a bad time ahead..
It was expected, when RBI Governer published a statement, that government has tampered inflation data, my guess is inflation in our country has crossed 9.5% - 10.0%. Also PM had a press conference when he stated, the UPA government have no option but to hike fuel prices in India. It was interesting before the close when market bounced backed from 4710 levels. This week is also important, when US Consumer data will be out, with Inflation numbers on Friday.
Afterall election year hai Bhai :cheerio:
