Equities vs bonds
Equity pundits have long maintained that this is the best instrument for the long term. But now they face an unexpected contender bonds. The median 10-year return for a sample of 978 stocks that were listed and traded in 1998 is 10.5%, while the average return is 11.4%. This compares with the 10-year bond yield of 12.2% in December 1988, say Ridham Desai and Sheela Rathi, who penned a recent Morgan Stanley report on 10-year returns. The phenomenon is not limited to the Indian markets. Even the Dow Jones has listed zero return in the past 10 years. As primary market observer Prithvi Haldea puts it, Buy and forget was the rule of the past. As it was an era of physical share certificates, often the next generation discovered them and made fortunes, he says. Such a lottery is no longer possible, given the nature of the markets.
Source
http://www.indiainfoline.com/news/innernews.asp?storyId=89307&lmn=1
Wednesday, January 7, 2009
Satyam Accounting Lapses and Manipulations
7.1.2009
In a letter to the board, CEO Ramamlinga Raju has given balance sheet details. In a shocking revelation, he has said that the balance sheet details over the years was fictitious.
The balance sheet has inflated cash balances of Rs 5,040 crore (Rs 50.40 billion) and accrued interest of Rs 376 crore (Rs 3.76 billion) is non-existent. Rs 1,230 crore (Rs 12.30 billion) was arranged to Satyam and is not reflected in the books.
He admitted that second quarter numbers were inflated to Rs 2,700 crore (Rs 27 billion) when the actual figure was Rs 2112 crore (Rs 21.12 billion). He also said that other board member were unaware of the real numbers.
The Satyam balance sheet, as on September 30, 2008, had an accrued interest of Rs 376 crore (Rs 3.76 billion) which is non-existent. It also had an understated liability of Rs 1,230 crore (Rs 12.30 billion) on account of funds arranged by Ramalinga Raju. The balance sheet showed an overstated debtors position of Rs 490 crore -- Rs 4.90 billion -- (as against Rs 2,651 crore -- Rs 26.51 billion -- reflected in books).
The gap in balance sheet has arisen purely on account of inflated profits over a period of last several years.
Source:
http://www.rediff.com/money/2009/jan/07ramalinga-raju-resigns.htm
In a letter to the board, CEO Ramamlinga Raju has given balance sheet details. In a shocking revelation, he has said that the balance sheet details over the years was fictitious.
The balance sheet has inflated cash balances of Rs 5,040 crore (Rs 50.40 billion) and accrued interest of Rs 376 crore (Rs 3.76 billion) is non-existent. Rs 1,230 crore (Rs 12.30 billion) was arranged to Satyam and is not reflected in the books.
He admitted that second quarter numbers were inflated to Rs 2,700 crore (Rs 27 billion) when the actual figure was Rs 2112 crore (Rs 21.12 billion). He also said that other board member were unaware of the real numbers.
The Satyam balance sheet, as on September 30, 2008, had an accrued interest of Rs 376 crore (Rs 3.76 billion) which is non-existent. It also had an understated liability of Rs 1,230 crore (Rs 12.30 billion) on account of funds arranged by Ramalinga Raju. The balance sheet showed an overstated debtors position of Rs 490 crore -- Rs 4.90 billion -- (as against Rs 2,651 crore -- Rs 26.51 billion -- reflected in books).
The gap in balance sheet has arisen purely on account of inflated profits over a period of last several years.
Source:
http://www.rediff.com/money/2009/jan/07ramalinga-raju-resigns.htm
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