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  • Category: Miscellaneous

    Will there will be a repeat of 2008 in 2018 ,God forbid.

    People who had some interest and link in the financial markets , or even just academic interest ,will never forget 2008 January. That was when the Indian stock market faced the heaviest crash ever. The downward journey started from then. Thousands of small and large investors lost heavily. Many of them could not recover from that shock. Lives of many changed from that. Many will never reveal the truth. They had to silently suffer the trauma.

    The main trigger was the Reliance Power share. People had unrealistic faith in Reliance (both brothers ) then. They were making many new initiatives in the market and industrial scene and investments. People were waiting for miracles to happen with the Midas touch. However the answer a cruel crash. The ultimate losers were only the innocent people.

    I am afraid what happened to the financial markets then may happen to the telecom sector. God forbid. Elder od the Ambani brothers brought Jio and we all know what impact it has caused in the industry. The public welcomed that with all their hands expecting a lot. Again they were feeling about a Midas touch. But soon following is the R Com ( led by younger Ambani) crash and collapse. Rcom has almost shut shop. They owe the banks about forty three lakh crores or so if we go by reports. Thousands of mobile users of Rcom are left i the lurch. Many have lost their prepaid balances. Network is shut without notice. In the panic many are porting to Jio. I pray it should not be a fall from the pan to the fire. God forbid. Let not what happened to stock markets in 2008 happen to telecom in 2018.
  • #614463
    Reliance big tv is sold to Tata sky, are these all part of the debt that the younger brother owes?

  • #614467
    My investment in share market is not that much which would give me sleepless night. However, as the market is going higher and higher, I have been booking partial profit from my equity mutual fund holdings since last ten days or so. If the market starts falling, I will start rruchasing good stocks and mutual fund units bit by bit.
    Caution: Explosive. Handle with care.

  • #614471
    The thread sounds scary. I recently made an investment in share market and if it crashes, I will definitely get sleepless nights. Hope that does not happen again like 2008.
    Regards
    Chitra
    "Do not give up, things might not favour you always"

  • #614477
    Yes, Venkiteswaran sir,
    Who can forget those bad old days, when I was a nascent investor in the stock markets and who lost almost 60 % of his total investments. Who can forget about Reliance Power, which came to IPO at a whopping Rs 430 and eventually went to around Rs. 20. To remind me the 2008 situation, I never sold Reliance Power shares. It still shows 85 % loss in my portfolio even though Anil Ambani gave bonus shares at that time. But 2008 crash gave me a good lesson to go deeper into the stock markets.

    But the current scenario is different except in the case of a war between US and North Korea. Today's markets are driven by domestic liquidity contrary to the case in 2008, wherein a small trigger in FII selling used to drag the markets like anything. But for the last two months, there is no harsh corrections in the market even though FIIs pulled out a lot.
    The beauty of the markets driven by domestic investors is that the money can't go out of Indian stock markets, whereas FIIs have the advantage of investing elsewhere, other than India. And that too most of the recent domestic investments came through SIP route, which will generally have long term perspective. So, in my opinion, we may not see 2008 like correction again.

  • #614487
    What I meant by this thread was whether a similar collapse will be forced on the Telecom sector by the Ambani brothers through their respective companies and their actions.

    I am a victim of the R Com's sudden shutting down of their network. It is almost akin to absconding. Customers are not able to contact the company in anyway. They are simply left in the lurch. Such a big problem and no one from political parties, people's representatives, TRAI, govt -all have kept quiet. They have kept their eyes, ears and mouth closed to the R Com's default.

  • #614495
    A very scary thought of repeat 2008 in 2018, there are many factors but as Mr. Bhuvan has said, the Indian market is in a better shape except for a major oil crisis or a nuclear crisis or a major political goof up, we should be stable.

  • #614508
    When diversifications takes place to bigger and newer projects, companies would sell away non performing and loss making ventures and try to amalgamate with other companies. And that is going on now.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #614581
    Agreed Mohan sir, all ideas will be tried out at our expenses, if the companies make money very good, if not they will just start a new arm, slowly merge or shift the assets and declare insolvency. Many times the promoters or the directors swindle majority of the money and in a matter of few days the price of the stock crashes or made inactive by the regulators.

  • #614586
    Although market is going higher and higher every week, there are some sectors which provide opportunity to the investors to enter. For example, investors can consider entering into pharma sector, as the present valuation of most of the pharma stocks is good from a long-term perspective. To cite a specific example, today Lupin, a leader in Pharma sector, has witnessed a fall of almost 17% providing buying opportunity to the long-term investors.

    So, we must be careful in the present scenario but should not be unduly worried. We must search buying opportunity when market dips.

    Caution: Explosive. Handle with care.

  • #614748
    I don't have much idea about shares. But with reliances industries, many of the people have a bitter experience only. Reliance Power, Reliance petrol bunks and now reliance telecom. All these left a bad experience to many. That is why these many people are going to many Mutual funds which area little safe when compared to stock market.
    drrao
    always confident

  • #614891
    Venkiteswaran Ji
    This thread is found to be quite interesting.
    My views are in variance with your views. According to me, the slump in the stock market in 2008 January was not a crash. History of market says it was a swing. A wide swing! Personally I got benefited in that event. Coming to the present scenario, I am also noticing the activities of DII as mentioned by Mr Bhuvan's response. FIIs are responsible for major fluctuations. Now a days we are noticing DIIs increased activities. I suspect, post demonetization major chunk of black money came back to the market through various routes as white money. If so, it is the positive aspect of demonetization. We know that GDP growth is slowing, industrial production is coming down, inflation is going up, and still market is going up. This shows huge money inflow in to the market.If you analyze IPO segment, you can see that almost all IPOs are heavily subscribed by QIBs only. Retail subscriptions are not that much. Even employee portions are undersubscribed. I can very well say that demonetization helped stock market. Stock market is happy with PM Modi's actions.
    Sad thing is that post demonetization retail money is blocked in the bank which crippled the small businesses and caused hardship to the common man.
    Your comment about power sector investment: Why people seek miracle in market? That is foolishness. Power sector is a laggard since years due to sorry state of affairs of state utilities. All state power utilities are to be privatized forcefully. Otherwise nothing will work out.
    Regarding Telecom sector, due to intense competition, market got stagnated.NPAs are soaring. The solution that I foresee is Govt should encourage/facilitate the Telcos for overseas ventures or acquisitions to improve their bottom-line. Business models never succeed always.
    Finally,If 2008 repeat in 2018,we can welcome it as an opportunity!

  • #614986
    I think I failed in making the thread clear. My focus was the probable collapse of telecom sector. due to the role of Reiance and Jio. (The Ambani brothers.)

    From the various news reports and news gossips and rumours, I am having such a scare. Reliance (R Com) mobile has shut shop. Rumours are that Jio will have some business arrangement with them in 4G and media operations.
    The latest report is Aircel may shut soon. Already a few mergers withdrawal have happened.

    So just as with the role of Reliance brothers stock market crashed in 2008, will there be a telecom sector crash in 2018 due to the consequential role of Reliance(Ambani) brothers?

  • #615090
    The answer to your recent question is most likely yes sir. The major telecom industry is putting up a brave face. the undercutting of the charges in the current price war has left a huge debt in many companies. tata telecom was the first in the tata flag ship to be closed down, then Rcom allegedly has debts around 46,000 crores and are being phased off. next would the airtel to some extent. Many companies have lost around 30-50% of their revenue and the subscriber base. This is more like an one sided game where in Jio has an unlimited pot to keep doling out perk after perk to the customers when on the other hand the competitors are struggling with a bowl in hand to stay alive in the market. The industry has to run so the authorities and the big players might come with a rescue plan and at least keep the job losses to the minimum (like tata being picked up by airtel).


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