MKTS EXPENSIVE; HOLD

Continuing on my previous post, markets still look expensive. So no new buy calls. HOLD on all current items held.

BOMBAY PROPERTY MKT for India.
SOVEREIGNS at an international level and
GOLD among commodities

look overvalued.

BOMBAY PROPERTY: Premium over other Tier-2 and Tier-3 towns has swelled, so also has prices increase over previous year. Volumes have obviously plummeted. Do not see the prices go down significantly but upside will be capped.

SOVEREIGNS: have inherited the risks of banks. Coupled with ageing population in the developed world and increasing social security costs. This might lead to downgrades of sovereigns. GREECE And SPAIN already underway.

GOLD: No real VALUE, no way to judge returns. No earnings, no dividends, not of heavy use in day-to-day activities e.g. STELL, COPPER, ALUMINIUM. Current prices driven by fear and greed. Upside if countries return back to gold standard. Otherwise a BEAR-CASE Scenario in short term.

RECMMONEDATION: Hold what you have, hedge across currencies and asset classes, keep whatever cash you have.NO NEW BUYS, unless you understand an industry well and are convinced of the prospects of a company within that industry.

Indian Markets: Overpriced. Only Buy in PSU Oil Counters

1. Indian Markets seem overpriced for the near term, but strong liquidity inflows can provide cushion (for now).

2. The only key names in BUY Zone are Oil PSU counters.
In relative strength IOC > HPCL > BPCL
BPCL is most expensive, probably because of it's Mosambique oil find. However, it is also the most vulnerable due to higher relative component of LPG Cylinder sales. These will be most price inelastic.

So, BUY on IOC.
HOLD on anything else, no need to sell though.

3. BBL(Bharat Bijlee) looking interesting among mid-caps. Transformers should be a growth area with growth in power sector. Other +ve's: Strong dividend record, reasonably priced and embedded value of Siemens shares close to 20% of BBL value.

4. Refineries could be a +ve too, given rise in GRM's lately, but no research done yet.