Indian ITSector

The Indian IT sector seems ripe for a trading short from a three month perspective. The US economy, the largest market for the tech companies, is definitely slowing down. There are talks of deflation by the US Fed and that of reducing the interest rates further from the abysmally low levels of 0.25%. These are sure signs of trouble for the US economy. Remember, the present state of the US economy is after the massive bailout last year. Eurozone, despite the German economy is also a suspect. To top it all, the signing of the US Mexico border bill by the US president that increases the visa fees from US dollar 2000 to 4500 would mean an extra Rs 120000 annual expenditure for each tech employee of an Indian company working in the US. Multiply it by the no. of employees working there and you get the figure. The figure runs into a few hundred crores for the larger ones and in the range 20-100 crores for the small and medium ones. This additional expenditure could also dent the Indian software industry's pricing advantage compared to its competitors. So be careful with the sector. Happy Investing !

Patni Futures

While there is a strong buzz-a rumour as of now-about a stake sale by Patni promoters which has Patni futures at almost the same rates as the stock in cash(Cash 520,Aug Fut 518,Sept Fut 512) despite the cash price carrying a RS 63 dividend, the futures price carry a risk of correcting sahrply immediately. So better be careful trading the futures. If you are bullish for reasons like stake sale, better be in the cash segment which atleast has the hefty dividend. Happy investing !