Teen Traders' Blog

North Korea launched yet another short range missile on Friday, the sixth in the week. The country has threatened to retaliate if punitive UN sanctions are imposed for its latest nuclear tests. US officials say that there are sins that Pyongyang maybe planning more long-range missiles.

The dwarf country on th East defences it self by telling that the missile launches are just for self-defence and argues that there has been 2,053 nuclear tests in the world so far and this one in their country was the 2054th nuclear tests.

The country’s foreign ministry told in a statement carried out by its official news network, Korean Central News Agency,”There is a limit to our PATIENCE.” Referring to the 2053 nuclear tests conducted in the world so far, it said, “The five permanent members of the U.N. Security Council have conducted 99.99 percent of the total nuclear tests.” A valid point.

Though Washington confirmed that it shall take strict actions and respond quickly if security of America or its Asian Allies are threatened ,things don’t seem to be happening soon as North Korea is preparing itself for land-to- sea missiles and launched the surface to air missile on Friday.

Things just don’t smell good.

Wal-Mart, the world’s largest retailer is set to open its first sales venture in India and has teamed up with Bharti Enterprises to open Wholesale stores in the country.

The Number 2 Fortune 500 company, which has been amongst the best companies to weather recession is planning to enter the country’s vast consumer market and has teamed up with the parent company of India’s largest telecom company, Airtel in a wholesale joint venture to be called Best Price Modern Wholesale.

Raj Jain, chief executive of Wal-Mart India says, “India is first of all a country with close to 1.2 billion people and a strongly growing economy which is driven by personal consumption,There’s a need to start out on a learning curve with the Indian consumer and this is the first significant step in that direction.”he told AFP.

The company isn’t opening up to consumers because of the country’s strict FDI rules in the consumer retail markets in which no overseas chains are permitted in the retail sector — except for single-brand outlets such as Nokia or Reebok. The rules have been setup after massive protests against the organised retailers amid fears that the country’s 15 million “mom and pop” stores shall be out of business.

Thus Wal-Mart can just be a wholesaler and must partner with domestic companies to enter the $400billion retail market which is pegged to grow much further.

Wal-Mart which had revenues of $405,607million in 2008 plans to open 15-20 outlets and employ about 5000 people in India.  CEO Jain hopes that the country opens up the  FDI (Foreign Direct Investments)norms in the sector  so that “Huge investments and better infrastructure ” shall be possible for the country’s unorganised retail sector.

But even when the Regional players like the Pantaloon  Retail(parent company of Food Bazaar and Big Bazaar) Reliance Retail (Reliance Fresh & Reliance Trends) there were concerns that the mom and pop stores shall be threatened by the organised players. But they weren’t. The consumers in India do not go to the organised retailers to buy good in small quantities. Only when they have to buy goods in greater quantities like buying stocks for the week, they go to the organised retailers which have been quite successful in getting the upper middle class of the country to their shops , largely by providing better discounts.

Lately, the country’s large retailers have been in debts due to the downturn as they has borrowed a lot when the situation was bright and things were looking very good. But when the optimism started to decline and the consumer sales fell, many retailers like Food Bazaar, More etc. had to shut down shops ,cut down spending and try their best to increase same-store sales in which the Pantaloon Retail group has been the most successful till now.

But whatever happens with a population of 1.2 billion and a large middle-class population, the country can surely not be avoided by the large enterprises who are looking at emerging markets after things the mature markets started looking bleak.

The software giant launches Bling search engine, the next-generation search service  at D7 Conference.

On Thursday, Microsoft CEO Steve Ballmer himself officially unveiled the Bling search engine at the D7 conference in California.  The product shall be rolled over the next couple of days until 3rd June by which it shall be available to everyone . The search engine has been designed as a “decision engine” to help people search the web more intelligently and is “aimed ” at giving people more ways to organize their search results.

The company also plans to spend $80 million-$100million on the promotion of the search engine through print , air and the web.

Microsoft has been trying real hard to be successful on its online business,  But just couldn’t make it to be the best. It had a decent start with the Hotmail email service but then slowly it started to  decline and despite the CEO’s claims that the company shall have the number 1 search engine, its services have been massively under performing with analysts even saying that Microsoft should just sell off its online business as it just can not handle it properly. This is the latest effort by the Software giant to get itself a decent online share and probably even the best yet after Hotmail.

Sources close to AOL say that the board shall make a final decision on 28th May on the spin off of AOL from Time Warner that the parent company had announced last month. Sources revealed that the it is a “Done Deal.”

Last month Time Warner announced that it would likely spinoff AOL And that itw ould Buy out Google’s 5% stake and a likely IPO. Nothing more was revealed.

AOL’s Total revenues in 2008 were $4.2. It had $150 Million operating income on revenues of $867 Million in the first Quarter of 2009. In January 2000, AOL and Time Warner announced plans to merge. The terms of the deal negotiated called for AOL shareholders to own 55% of the new, combined company. The deal closed on 11 January 2001 after receiving regulatory approval from the FTC, the FCC and the European Union.

Analysts just can’t stop predicting:

Know what ? They say Sensex might touch 19,500 this year.

Rediff:

Market experts believe that the reforms expected to be carried out by the new government may keep the market sentiment upbeat and propel the index to regain the levels, it had seen in 2007, in the months ahead.

“Our upside target for the Sensex is 19,500 this year which the index may climb if the government surprises us with a phenomenal budget,” Morgan Stanley managing director Ridham Desai said in an investor summit arranged by television channel CNBC TV 18.

That’s similar to what the “analysts ” said when the stock surged past 21,000 that it was likely to touch 30,000. I think all the research that they do is check out the past 1 month’s growth rate , average it and put it for the next 6 months. All right, they might just think of something more, but seriously, the not so great researcher-traders like me fall for these predictions and invest their bank balances into the market.

As you know whatever happened the day the stocks surged 2000 points is still not known.  Was it sheer optimism? Hope or Major FII(Foreign Institutional Investor) inflow? I think it was FIIs.  The FII tally till date in this month goes to Rs 17,288 crore and the inflows for the three remaining sessions can make it go well above the all-time high of Rs 18,948 crore recorded in September,2007.

My personal portfolio had declined 60% percent in the markets but now its just 12% negative and i hope it gets 0% -ve and starts profiting. Even though I have been Investing in the last 6 months but i still don’t feel i got the profit i deserved or maybe wanted.

As the Legendary Investor Warren Buffet says “Don’t believe in any tips & predictions . Do your own Homework.” Yeah, I know he is a BIG investor and we are just tiny fishes(maybe worms) in front of him , but I feel he is Verrry correct. We should do our homework before we put money into these markets specially in the adventure times.

On Tuesday Facebook confirmed that it received $200 million from Russian investment group Digital Sky Technologies in exchange for a 2% stake.The investment gives DST 2% stock of the company of the Palo Alto based private company. The deal has valued Facebook at $10 Billion, 33% lower than Microsoft’s $15 Billion valuation when it acquired a 1.6% stake in the company for $240 Million in October 2007. DST said in a statement, “Facebook has the potential to be one of the most profitable internet companies ever.” Given its vast Audience, it surely can.

Does the valuation mean that Facebook is now worth less than what it was a year back? CEO Zuckerberg says ” I wouldn’t say that.”

Last month Facebook surpassed 200 million users and is fast Growing. It is estimated that Facebook had revenues exceeding $300 million in 2008. Analysts say that Facebook hasn’t been able to profit yet due to its huge user base and its inability to advertise effectively to the huge and fragmented audience. But in October,2008, Zuckerberg did say that Facebook shall have a Business Plan in 3 years.

Bharti Airtel, India’s largest Telecom firm on Monday renewed its effort to acquire 49% in the South African telecom company MTN.

As we know, this is the second time the compnay is talking with Bharti and has previously has also talked with Reliance Communication but couldn’t proceed and talks were terminated. The Economist magazine had noted, “If anything, Bharti would be marrying up.”

The companies have now agreed discuss the potential transaction exclusively by July 31 this year.

The New Delhi based Bharti Airtel said in a statement “Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group… Bharti would acquire a 49 per cent shareholding in MTN and, in turn, MTN and its shareholders would acquire an approximate 36 per cent economic interest in Bharti, of which 25 per cent would be held by MTN with the remainder held directly by MTN shareholders,”

If the deal goes through, the combined entity will have revenues exceeding $20 Billion and a subscriber base of more than 200 Million.

The South Africa based mutinational, MTN has significant operations in many of the African and Middle Eastern Companies.

MTN often describes itself as “the leader in telecommunications in Africa and the Middle East”

Airtel has nearly 25% of the mobile connections in India.

CMD, Sunil Mittal said “We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. Both companies would stand to gain significant benefits from sharing each other’s best practices in addition to savings emanating from enhanced scale,” he added “We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation.”

MTN shall have appropriate representation on the Bharti Board, the company told in statement.

“Singapore Telecommunications, a major existing shareholder of Bharti, will continue to be a strategic partner and significant shareholder after the implementation of the potential transaction,” the Bharti statement said.

NetApp, Inc. the computer storage and data management company will buy DataDomain for $1.5 Billion.

Data Domain is a storage and software company  specializing in the deduplication of data. The firm has posted a decline in Profits butis a lucrative buy for NetApp as valuations have fallen considerably since the last year.

NetApp has decided to pay $25 per share in cash and stock. Such a deal is bound to increase NetApp’s global distribution and reach.

Richard Sherman from MMK partners said, “The smaller vendors like Data Domain are trying to execute against a pretty stiff headwind right now with firms like EMC out there in the marketplace exerting extensive amounts of account control.” And ,hence he told that now DataDomain can compete more effectively against EMC.

In 2008, NetApp had acquired storage service management software company Onaro.

Bank of America (BoA) raised $US13.471 billion through share sale taking the bank half way towards filling the $33.9 billion shortfall identified by the government following the recent stress testing of the bank.

The proceeds include the recent stake sale of BoA in China Construction Bank Corp for $7.3 billion.

The bank had issued 1.25 billion shares at an average price of $10.77 since last Friday.

Chief Financial Officer Joe Price said in a statement,”We’re pleased to have this portion of our capital plan completed,This strengthens and diversifies our capital structure.”

The bank plans to raise $17 billion more from asset sales and other means, it said in an statement.

Bank Of America was once considered the winner and the healthiest survivor of the 2007 credit crisis plunged in market value partly because of its purchase of Merill Lynch

Microsft on Friday signed a 3 year pact with China’s emerging Hangzhou province for setting up two new centers in Hangzhou in return for better IP(Intellectual Property) protection. The pact/deal is amongst the latest moves of the company to curb the use of illegitimate software throughout the world.

The city of Hangzhou has pledged to improve itsanti-piracy laws and promote the use of legitimate, non-pirated software by individuals, government offices and companies based in the city.

In Hangzhou Microsoft plans to setup development centres for  applications and new business models for “cloud computing”. Cloud Computing refers to accessing data systems and information on remote servers and recently gained on a huge popularity.

Simon Leung, CEO Microsoft in Greater China told WSJ “We wanted to find a showcase,The city had to be committed to doing the right thing.”

Cai Qi, Hangzhou’s mayor, said in a statement,”Partnering with leading IT companies like Microsoft will greatly boost Hangzhou’s innovative capabilities and help us build a model information technology city in China.”