Source: Reuters

Sep 2 2008 12:27AM

DUBAI (Reuters) - Gold jewellery sales in Abu Dhabi soared 300 percent in volume and almost 250 percent in value in August from a year earlier after the metal dropped to nine-month lows, the emirate's industry group said on Monday.

"It was the best month the market has seen in almost 30 years and it compensated for any drops we have seen earlier this year," Abu Dhabi Gold and Jewellery Group Chairman Tushar Patni told Reuters.

"We had never expected that if gold fell below $800 an ounce we would see a 300 percent increase in volume and 250 percent in value, especially as many buyers are abroad on holiday."

The Gulf Arab emirate's gold demand was steady in July, as many buyers, mainly from the Indian subcontinent, headed home for the summer holidays.

Gold dropped to a nine-month low of about $773 an ounce in mid-August before bouncing back, but it still has been trading far below its all-time high of $1,030.80 an ounce, hit in March.

The precious metal was trading around $827 an ounce in Europe on Monday.

"Many people took advantage of lower gold prices to buy all the jewellery they wanted for Ramadan and the Eid or because they want to keep it until prices rise again to make profit," Patni said.

The lunar month of Ramadan, which this year coincides with September, is a time when devout Muslims refrain from all food, drink and sex during daylight hours. It ends with the Eid, or feast, during which many couples marry.

"Many Indian buyers followed the same logic and bought gold for Diwali in August," Patni said.

Hindu weddings normally are held between September and November, and Diwali, the important Hindu festival of lights, is in October.

Tax-free jewellery shopping in the United Arab Emirates -- a seven-member federation that includes Abu Dhabi and Dubai, known as the "City of Gold" -- lures many Gulf and Western tourists.

Demand in the Gulf Arab country fell 10.7 percent to 26.6 tonnes in the second quarter of 2008, the industry-funded World Gold Council said last month.
...

If crude fall below $108/- then it has support at $95....

Are baba if Nuk deal get through; then Rolta will not only cross Rs.351/- but may touch Rs.801/- & Rs.1000/- level. (Base: 40 to 50 P/E)

So increase the level of petience.

Take the best decision....

SBI hiked Fixed Deposit rates to 10% for 1 year to 2 years tenure. Its indirectly outflow of funds & pressure on profitability....

45 constituents of NSG will meet today to discuss agreement between India & US for nuclear energy pact. The “Non-Proliferation treaty” will not tolerate to exempt India & allow going ahead with Indo-US Nuclear Power Project.

New Zealand, Brazil, Switzerland, Germany & many other countries have already shown their inconvenience regarding this pact between India & US. US officials told to media that they are going to take every step to obtain green signal for this deal.

But days have changed now. If 45 countries conclude to not permit this deal & deny to exempt India on “Non-Proliferation treaty” basis then US can do nothing. India will continue to struggle with its Black-Out like situation for another 7 to 10 years.

Moral of the story: DELAY, DELAY AND DELAY
...

By Fannie Mae and Freddie Mac,


Aug. 19 (Bloomberg) -- Credit market turmoil has driven the U.S. into a recession and may topple some of the nation\\`s biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund.

``The worst is yet to come in the U.S.,\\`\\` Rogoff, a Harvard University professor of economics, said in an interview in Singapore today. ``The financial sector needs to shrink; I don\\`t think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.\\`\\`

The U.S. housing slump has triggered about 0 billion in credit market losses for banks globally and led to the collapse and sale of Bear Stearns Cos., the fifth-largest U.S. securities firm. Bonds of regional banks such as National City Corp. and Keycorp are under pressure on expectations of more fallout. Rogoff, 55, said the government should nationalize Fannie Mae and Freddie Mac, the nation\\`s biggest mortgage-finance firms.

Freddie Mac and Fannie Mae ``should have been closed down 10 years ago,\\`\\` he said. ``They need to be nationalized, the equity holders should lose all their money. Probably we need to guarantee the bonds, simply because the U.S. has led everyone into believing they would guarantee the bonds.\\`\\`

Last month, President George W. Bush signed into law a housing bill that provides Treasury Secretary Henry Paulson the power to make equity purchases in Fannie Mae and Freddie Mac. Paulson asked for the authority July 13 after the shares of the firms, which own or guarantee almost half of the trillion of U.S. mortgages, slid to the lowest level in more than 17 years.

Shares Slump

The mortgage lenders have been battered by record delinquencies and rising losses. Fannie Mae fell 30 cents to .85 at 12:55 p.m. in New York Stock Exchange composite trading, its lowest level since May 1989 amid concern the government-chartered companies will fail to raise the capital they need to offset losses. Freddie Mac declined 8 percent to the lowest since January 1991.

Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent, according to RealtyTrac Inc., an Irvine, California-based seller of foreclosure data. U.S. builders broke ground on the fewest houses in 17 years last month, according to a Bloomberg News survey.

Rogoff told a conference in Singapore today that the credit crisis is likely to worsen and a large bank may fail, Reuters reported earlier. He was the IMF\\`s chief economist from August 2001 to September 2003.

``Like any shrinking industries, we are going to see the exit of some major players,\\`\\` Rogoff told Bloomberg, declining to name the banks he expects to fail. ``We\\`re really going to see a consolidation even among the major investment banks.\\`\\`

IndyMac Bancorp

IndyMac Bancorp Inc., once the second-largest U.S. independent mortgage lender, filed for bankruptcy protection Aug. 1, three weeks after it was taken over by the Federal Deposit Insurance Corp. amid a run by depositors that left it strapped for cash. Bear Stearns collapsed in March and sold itself to JPMorgan Chase & Co. for a share.
...

India expects exemption from NSG without any change to draft
(Press Trust Of India / Mumbai August 17, 2008, 17:59 IST)

Ahead of the two-day extraordinary plenary meeting of the Nuclear Suppliers Group (NSG) in Vienna from Thursday, India today said it expected an exemption from the NSG without any change to the draft that was circulated by the USA to suppliers.
India also expected the entire process to move in a manner consistent with the July 18, 2005, understanding.
"We have done everything that had to be done and now we expect the NSG exemption without any change to the draft that was circulated to them recently," Chairman, Atomic Energy Commission Anil Kakodkar said today.
NSG is holding a two-day extraordinary plenary meeting from August 21 especially to discuss the exemptions to India for international nuclear commerce.
Reacting to a letter written by non-proliferation experts and NGOs asking the NSG to to reject the US proposal to exempt India from long-standing global nuclear trade standards, Kakodkar said, "We expect the process to move consistent with the July 18, 2005, understanding and any change in their (NSG) position is problematic."
"We can not agree to further demands and there is no way we can," he said.
Last week, 150 non-proliferation experts and NGOs from around two dozen countries asked Foreign Ministers of the Nuclear Suppliers Group to reject the US proposal to exempt India from long-standing global nuclear trade standards.
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dont take any buy position in crude till 88$ other wise you may suffer huge losses ....

To Multibaggaers Thank you for your very good point. The fall in HDIL is low when we the ex-bonus rate is adopted. The fall appeared more pronounced than the cause of such fall.The error is regreted. Let us hope that the rise will be smart today and does not fill up the "tumbling block",to ofset the difference I mentioned. While reporting the a huge fall, care should have been taken. I am sorry. For I am also a holder of these shares as on date. with regards, v.krishnamoorthy...

Hi, Although the company posted good results, the share price has come down. I did a little digging and found that Merryl and another fund dumped the stock around 400 levels just before the crash. Another fund - Sophia fund interestingly sold the stock at 98 levels (see bulk deals on moneycontrol). Austral Coke & Projects Ltd. is a sister company of Gremach which has come out with an IPO last week. Sophia fund is one of the QIB investors for the IPO. I found something on the net which is interesting (source:natmaaddotcom - "Mystery behind heavy QIB selling unraveled" ) - excerpt is given below: Quote: "What is this Sophia Fund? The full name of this is Sophia Growth-A Share Class of Somerset India Fund and this is a sub-account of an FII, which is based in Hong Kong named as Geomatrix. They have around 12 sub-accounts in India and this Sophia Growth Fund or Somerset as it is popularly known as is one of their sub-accounts. They have a few holdings in the secondary market, which are smallcap companies, for example Master Trust, Kohinoor Broadcasting, Kaashyap Tech and Teledata Info. Very interestingly, in the case of one recent IPO, Austral Coke, a similar fund - Sophia Growth Fund - has allocated around 10% equity in pre-IPO placement of around 27.5 lakh shares. The same fund was also selling in their sister company, Gremach Infra who has been buying or they have pre-allotted equity in Austral Coke, which is a sister concern company. It is very interesting and baffling that the promoters of the company have hinted at having low valuations in the already listed entity of Gremach Infra and much higher valuations in the IPO coming in.” Sophia Growth Fund is the one FII. There’s nothing illegal about that entity it is perfectly registered with the SEBI but their name has mysteriously cropped up in many of the recent IPOs. Their way of operation is clear; they pick up a very large chunk in QIB and almost bail out the issue on the last day only to sell if not on the day one after listing but within the first few days of listing. All of this is of course organized or routed through the book running lead managers." Unquote Also there is a news (I have no verification - if some one has - pl post) that the promoters of Austral were actually kicked out of Gujarat NRE Coke in late nineties by the shareholders. The promoters do not seem to be very honest. Otherwise they would have issued clarification on several issues atleast on their own website (which by the way is not updated/ nor very well mainatained with lot of spelling mistakes, etc) So it is better to research the company well before going ahead just looking at the PE ratio. Or to wait till the promoters come out with all the clarifications regarding the Chinese Rigs / Mozambique mines, etc.....

Please describe the impact on Indian PSU Banks especially SBI in this context....

Hello friend. When vedanta group bought sesa and gave open offer @rs 2036, they were seeing the longterm value, today if you value sesagoa they have made 3 times in less than 2 years. Any government policy, will not completely be against the industry, government will try to maintain certain equilibrium...secondly if govt interference increases the FDI & FII outflow will bring down the daily tax income for govt which comes from stkmarket. Sesagoa will have enough scope to grow even with taxation, as spot prices / contract prices are at good levels for longterms as well as short term from whcih it will benefit. Anyways its always the timing in market when you enter and exit a stock and re-enter if you believe in it at better levels. In commodity sector steel prices will be more stable than other plays like oil...as demand is more & more. Interesting article to read which was published today in gulf daily. Abu Dhabi steel prices soar 91% By Ahmed A. Elewa, Senior Reporter Published: August 16, 2008, 23:51 Abu Dhabi: Limited domestic production and soaring international prices of building materials continued to drive the costs up substantially in Abu Dhabi last month, according to the emirate's Department of Planning and Economy (DPE). DPE's monthly building materials index revealed a rise in the prices of construction steel and cement in July when compared to June, recording a rise of 91 and 46 per cent respectively since the beginning of the year. "The average increase in the prices of various building materials last month varied sharply from 3 to 53 per cent, yet the fact remains that the overall prices have increased substantially during the first half of the year," said a report issued by the department. "One of the reasons is the overwhelming demand in Abu Dhabi, where the value of development projects from 2004 to 2007 stood at Dh880 billion, with Dh200 billion additional projects expected this year alone," the report said. The wide gap between the production and consumption of construction steel has been blamed for the market's imbalances. In terms of production, Abu Dhabi was successful to raise its output from 383,700 tonnes in 2003 to 830,000 tonnes in 2007, and by the end of 2009 this figure is expected to exceed 1.5 million tonnes. This projected increase is attributed to the expansion of Emirates Steel and the operation of new facilities, such as Gulf Steel Industries - which will begin production by the fourth quarter of 2008 with a capacity of 400,000 tonnes - and Union Steel which is still under construction. "Nevertheless, the steel consumption pattern in the capital suggests the continuation of the imbalance for years to come, given that the average annual growth of consumption stood at 24.6 per cent during the past three years. It rose from 1.69 million tonnes in 2006 to 2.11 million tonnes in 2007," the report said. Increasing imports is a natural result of the wide gap of more than 39 per cent between consumption and production. Steel imports grew from 806,000 tonnes in 2005 to 1.62 million tonnes in 2007, a 71.6 per cent increase. "Only 5.7 per cent of the imports come through Abu Dhabi's ports, while the majority comes through Dubai," the report said. The result was a 91 per cent increase in prices during the first half of 2008 from an average of Dh3,139 per tonne in January to Dh6,000 in June, with the rising costs of diesel and electricity by 40 per cent and labour by 15 per cent adding to the burdens faced by the domestic producers. ...

So then, effectively it means that I will have to wait until the shares get credited into my account. By then, people would have beaten down this stock blue and black to new lows!!! Bad luck, I would say....