morning thoughts...
The markets continued in a range and we expect the same
behaviour in the coming sessions with the markets providing opportunity to both
long and short traders with majority of movement in stock individuals.
Technically the markets are in a range and on downside major
supports exists at 6650 whereas stiff resistance will be witnessed at 6875
levels on the nifty front.
A view on big companies and their procedures which stakes
shareholders.
When Maruti Suzuki announced an unusual mode of arrangement with its parent
company Suzuki with respect to setting up a plant in Gujarat , the
investing community was miffed. The major bone of contention was that the deal
benefitted Suzuki and was detrimental to the interest of minority shareholders.
Little wonder then, that this sparked off a debate about MNCs in general and
their murky standards of corporate governance.
The other gripe that came to the fore was the matter of royalty payments. These are payments that the Indian subsidiary makes to the parent company for the use of the latter's technology, brand name etc. Because this forms part of the company cost structure, it has a direct bearing on margins and profitability.
The reason why royalty payments have become an issue is because these seem to have risen significantly ever since the restrictions on them were lifted in December 2009. As reported in the Business Standard, royalty payments rose from 13% of foreign direct investment (FDI) in 2009-10 to 18% in 2012-13. Overall, in four years, these payouts have increased 57%. So much so that the royalty payments that the parents are receiving from their subsidiaries exceeds the dividends received from them.
Plus, there seems to be not much evidence to support the fact that the use of technology has significantly contributed to overall performance. Thus, in the last 5 years while royalty payments made by the Indian subsidiaries have grown at a compounded annual rate of 31%, net sales and profits have grown at a much lower rate of 15% and 10% respectively during the said period.
The article suggests that a cap on royalty payments needs to be introduced. We are not sure if this is the only solution that will work out. We believe that there needs to be greater transparency between dealings of the parent MNCs with their subsidiaries. At least as far as royalty payments are concerned there needs to be better communication to shareholders as to the rationale for these payments as well as the method by which the percentage has been derived at. Because royalty payments impact profits and thereby eat into the share of minority shareholders, they have a right to expect a greater voice in this regard.
The other gripe that came to the fore was the matter of royalty payments. These are payments that the Indian subsidiary makes to the parent company for the use of the latter's technology, brand name etc. Because this forms part of the company cost structure, it has a direct bearing on margins and profitability.
The reason why royalty payments have become an issue is because these seem to have risen significantly ever since the restrictions on them were lifted in December 2009. As reported in the Business Standard, royalty payments rose from 13% of foreign direct investment (FDI) in 2009-10 to 18% in 2012-13. Overall, in four years, these payouts have increased 57%. So much so that the royalty payments that the parents are receiving from their subsidiaries exceeds the dividends received from them.
Plus, there seems to be not much evidence to support the fact that the use of technology has significantly contributed to overall performance. Thus, in the last 5 years while royalty payments made by the Indian subsidiaries have grown at a compounded annual rate of 31%, net sales and profits have grown at a much lower rate of 15% and 10% respectively during the said period.
The article suggests that a cap on royalty payments needs to be introduced. We are not sure if this is the only solution that will work out. We believe that there needs to be greater transparency between dealings of the parent MNCs with their subsidiaries. At least as far as royalty payments are concerned there needs to be better communication to shareholders as to the rationale for these payments as well as the method by which the percentage has been derived at. Because royalty payments impact profits and thereby eat into the share of minority shareholders, they have a right to expect a greater voice in this regard.
Astrologically a major
transit of retrograde mars has occurred and we have been intimating the same
from days before – get ready for its intense effects.
Coming to the commodity
markets bullions , base metals and energy will follow a range with a buy on
dips strategy.
Cera sanitary given as
free gift on akshaya tritya blasts by 50% in 3 days
Alchemist gains by 25%
in 3 days
Upl 270 ca doubled
Century 380 ca quadrupled
from 12 to 49 ( given last day as open free call )
Rallis rose by 27 rs
Hsil rose by 17 rs
Gold gained 277 rs
Silver gained 1200 rs
Natural rose by 7 rs
WE HAVE BEEN RECIEVING LOADS OF REQUESTS FOR
OUR SPECIAL PACKAGES, SO HERE WE BRING IT FOR MAXIMUM BENEFIT OF PEOPLE, SO AS
THEY EARN MAXIMIUM WITH LOWER RISK AND SMALL CAPITAL
DOUBLE BUMPER
DOUBLE YOUR CALL OPTION ( century 380 ca given last day reflected)
CONVERT 1 LOT NIFTY INTO 50K VIA DUAL TRADES
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DOUBLE BUMPER
DOUBLE YOUR CALL OPTION ( century 380 ca given last day reflected)
CONVERT 1 LOT NIFTY INTO 50K VIA DUAL TRADES
www.astroeyes.blogspot.in ( package details )
