Blog
July 2, 2011
Note corruption is nothing new for the Big 4 firms with another one PriceWaterhouseCoopers caught red handed in the massive billion dollar Satyam corruption scam.Two of the partners of PWC were sent to jail in the fraud which involved cooking the books for almost 8 years.Having a Big 4 auditor is a must for any well known big public company.However the reputation of these Big 4 continues to get besmirched with newer scandals.It does not take a rocket scientist to guess that bribes were involved as rules were circumvented and Corporation Bank top brass was also involved.Government Tenders are a massive hotspot of corruption as they are opaque and powers rest with a few.Lack of transparency results in massive embezzlement of taxpayer money.Corporation Bank.Note Relaince India's biggest company is facing an investigation along with the oil and gas regulator DGH.Recently LIC Housing Finance one of India's largest housing finance companies was involved in a scam as well alongwith top official form other PSU Banks for taking bribes.This resulted in a massive stock price fall for a number of these companies.Expect Corporation Bank stock to take a similar dive hurting the shareholders.Investing in the Indian stock market has become more dangerous than ever where a corruption scam hides under every stone.Government companies which are considered safer by investors too are being proved problematic with PSU CEOs now being jailed for scams.India's largest aluminum company NALCO CEO has been jailed for accepting gold bricks in bribes
July 2, 2011
Vestas has been getting bigger orders and has been streamlining operations,however its stock price has continued to go down as investors see bleak future prospects wit hthe entry of Korean shipbuilders into the industry.Other heavyweights like Gamesa and Suzlon too have faced massive losses as margins have evaporated in the face of declining topline and prices.But now Vestas has got a lifeline from the renewable energy subsidiary of the French giant utility EDF.The order from is for 2000 MW of Wind Turbines over the next few years.While pricing was not disclosed,it would be certainly be at a discount to the normally premium prices charged by Vestas.This given order visibility to Vestas and provides price safety for EDF.The next frontier for Wind Energy Companies is going to be Offshore Wind and Siemens has stolen a march.Vestas is not going down without a fight recently introducing a 7 MW wind turbine for this segment
July 2, 2011
Indian Businessmen and Politicians have been looting the citizens and the treasury of billions of dollars through numerous corruption scams and scandals.While the focus has been on the big corruption scandals at the centre being perpetrated by ruling party politicians,opposition party has not been far behind.The Nira Radia Tapes revealed the extent to which the Indian politicians have sold the state to big business.Major ministers are appointed by the major industrial conglomerates leading to billions of dollars in embezzlement.There are numerous instances like the Commonwealth Games Scam,Adarsh Scam,the 2G Telecom Scam etc.Many of the politicians are now big businessmen themselves owning companies legally and illegally.According to Nira Radi,India's agricultural minister is the benami owner of one of the largest realty companies DB Realty whose CEO is cooling his heels in jail for the 2G Scam.The concerned minister is also involved in the Lavasa City Scam in which a whole city was built in partnership with HCC flouting all environmental norms and regulations.
July 1, 2011
Green Self Service Kiosks are set to become ubiquitous in branches run by India's largest bank State Bank of India.Finance has been greatly been benefited by the Information Technology solution reducing transactions costs and time greatly.Banks in India have been slow to roll out Technology Platforms .India due to the lack of penetration of technology has been far behind with large swathes of its population bereft of access to technology.SBI however has come up with an innovative idea Green Channel Counters (GCCs) which is a low cost solution to reduce costs and improve efficiency.These self service kiosks have a screen,keypad,passbook printers etc through which a customer of the bank can perform most of the functions.This would reduce the need for staffing and also lead to saving of paper.Normally it require a ton of forms to perform various functions like depositing,withdrawing money.However with these kiosks most of it can be done online which would greatly reduce paper usage saving trees as a result.
July 1, 2011
Solar Thin Film Companies are coming under siege again due to the relentless fall in the prices of crystalline silicon panels in recent months of 2011.Note large number of thin film companies went bankrupt the last time polysilicon prices fell off a cliff in the post Lehman crisis period in 2008 end.Applied Material the biggest solar equipment company killed off its SunFab Division which has a large customer list.Applied Materials saw the writing on the wall and concentrated its efforts on crystalline silicon equipment buying HCT Shaping and Baccini to become a billion dollar supplier of solar equipment.A number of weaker hands in solar thin film went out of business.However the prodigious growth in solar demand in 2010 saw large investments being made again.The biggest failure (not complete yet) seems to be the DOE and Obama darling CIGs startup Solyndra which has already used up a billion dollars with nothing much to write home about .Now Republicans are investigating whether the more than $500 million US government loan was done improperly.Abound Solar a CdTe startup has also managed a $400 million loan and I doubt whether it will manage to ever pay off the loan given that the lowest cost manufacturer of solar panels First Solar itself is under pressure from sharp cost reduction by integrated solar panel companies like Trina Solar.
July 1, 2011
Cheap Financing by massive state owned Chinese Banks like Chiina Development Bank (CDB),China Construction Bank etc is being used as a strategic weapon to push Chinese renewable energy exports.Note cheap financing has always been used by big nations like Japan and USA to push exports by their domestic companies.United States EXIM Bank has been financing solar projects in India at very cheap interest rates to help First Solar sells its Solar Panels.Similarly China too has started using the huge balance sheet of its state owned banks to push its large green companies.Note CDB has extended almost $35 billion in credit lines to big Chinese solar companies like Suntech,Trina,Yingli,LDK and others.These credit lines can be used by renewable energy companies to finance the projects of their customers.Note Chinese Banks had bankrolled massive power equipment purchases in India being made by Dongfang and Shanghar Electric Groups.
July 1, 2011
Australia has seen a big increase in solar panel installations due to generous subsidies given by individual states in Australia like New South Wales and others.Unlike other parts of the world where solar installations have started with large solar farms,residential rooftop installations have powered Solar Energy in Australia.The sharp growth in solar power has attracted most of the largest solar panel manufacturers in the world like Suntech, Canadian, REC, Kyocera, Sharp, Sanyo, Yingli, Suntech, Trina Solar and others.The major Solar Panel Suppliers in Australia are foreign manufacturers as Australia does not have a local content policy to promote manufacturing of solar cells or solar panels.Only a few handful of companies have manufacturing operations in the country.Almost all of the solar panels sold in Australia are imported.
June 30, 2011
Financing of Solar Energy Projects in India under JNNSM is proving to be a huge problem for the winners of Phase 1 auction under the federal subsidy scheme.Solar Energy in India has huge potential and attracted a number of companies to the first phase of the government tender under the 2020 plan to install 20 GW of solar energy.Note 620 MW of projects in the 5 MW and above category were awarded to 37 solar companies.Many of these firms had no background and had bid irrationally low to win these projects.With little experience and no established financial infrastructure it was an accident waiting to happen.MNRE offical has revealed that 18 of the companies have failed to achieve financial closure and would probably lose their license by the July 9 deadline.Note most of these bids were irrationally low and would not have made profits.Indian Banks and power financing institutions have refused to lend quite prudently.Note these companies are not putting collateral using their parent company's assets which means that they too doubt the feasibility of their projects.Only huge penalties will deter future non serious participants as at least half of the solar power capacity won't get installed in JNNSM Phase 1.It remains to be seen how this affects the future of the Indian Solar Mission.
June 30, 2011
China has increased the tax exemption limits for urban workers by 80% to $540 a month as soaring inflation and rising income inequalities has reached dangerous levels.Note increasing corruption and vast income inequalities have led to increasing incidences of violence and riots in the country.The prices of essential commodities like food and fuel have been increasing rapidly like in the rest of the developing world.Despite the central bank increasing interest rates,the prices have hardly moderated.Pork prices have touched new records making the life of the poorest quite unbearable.Note Gini's coefficient in China has reached 0.47 which is very high.While economic prosperity has increased,a vast section of the population remains poor.This is apparent in the fact that only 24 million workers out of 300 million urban workers earn more than $6500 per year .
June 30, 2011
Note the cost of Hydropower at $1-3/watt are quite large and if not planned and implemented correctly can lead to huge time and cost escalation.The Inga 3 Dam being proposed to be built on the Congo River in the DRC faces tough choices.The Hydro Dam on the Congo which will become the biggest hydro power project in Africa is wresting over design issues.The major choice is between tunneling through rock structures or keeping open channels.Note the total cost of the 7 GW Power Plant will be around $14 billion making it the biggest investment in Congo and the 5th largest Hydro Power Plant in the world.Note Africa suffers from chronic power shortages which will become more acute with rising cots of fossil fuels and increasing per capita electricity demands.Making correct decisions on energy is vitally important for the development of the African continent.China is the country with the largest hydro power capacity at 200 GW which it wants to further increase to a massive 400 GW by 2020.
June 30, 2011
Note Indian ministries and regulators have been found to be massively corrupt with the 2G Telecom Scandal facing the glare from the Supreme Court .Huge loss has been caused by ministers,corporate CEOs and various politicians a number of which are in jail right now.The CAG report had said that Reliance had doubled its cost in the KG-6 Basin leading to a huge loss for the Indian government.A number of other lapses (intentional) has been found by the DGH and the Ministry each time favoring the private oil and gas companies in India.Now the CBI has filed a case of corruption against the the former chief of the DGH V K Sibal for scuttling a probe by the Central Vigilance Commission (CVC) for showing undue favors to the private companies.Note India has been stuck by a number of scams in the stock market pertaining to mid cap and small caps.This has led to huge losses for investors with some companies like Reliance Telecom,Unitech having over 90% of their share values eroded.Reliance the biggest Indian company by market capitalization might be facing the same fate if the investigative agencies and the courts do their jobs.
June 30, 2011
Huge Solar Panel Projects are being planned in the USA by solar developers and utilities as solar panel prices have fallen by 20-30% in the second quarter of 2011 as solar panel manufacturers are faced with oversupply and inventory issues.Note building both coal and nuclear power plants in the US has become increasingly difficult with pollution and climate change issues coming to the fore.While natural gas is getting a boost due to cheap shale gas discoveries,solar energy is picking up pace due to the government support in the form of DOE Loan guarantees and Treasury Grant programs like 1705.Recently two very large solar panel projects have been announced or are in the process over the next 3-4 years.
June 30, 2011
NGO Krishi Bikash Shilpa Kendra (KBSK) members have been involved in the past in job heist schemes where they have fleeced money from unsuspecting villages using jobs as incentives.5 members of the organization had been arrested in West Bengal .The organization had also used the names of central officials and the national emblem to embezzle money from poor villages.It does not have an inspiring track record with a former secretary in jail as well.There is little details about how this NGO will go about this program or how it would get funds to do it as well.
June 30, 2011
Wind Power in India has been growing at a rapid pace making India the 5th largest global market for wind energy despite limited resources of wind energy.India Wind Power Plants are all set to grow with the entry of new wind power developers like Metal Traders MMTC and Ushudeve International.Note MMTC is the state owned metal trading giant while Ushudev is the 3rd largest private sector trader in metals after Adani and Surana Groups.New Wind Farm Developers like Caparo,Greenko,Genting,Techno Electric have already put agressive wind expansion plans in place.Now MMTC and Ushudev have joined the wind party as the economics of wind energy look enticing given the massive shortage of energy and the incentives given the government like GBI,Tax Breaks etc.
June 28, 2011
Orb Energy a non-profit supplier of off grid solar systems in Southern India has got a million dollars in additional funding from Acumen Fund.Orb Energy supplies solar systems to both residential and commercial customers in 4 states in India Kerala,Maharashtra,Tamil Nadu and Karnataka.It is headquartered in Bangalore and received initial funding from Zouk Ventures.Acumen Fund invests in socially relevant enterprises and has also invested in D.Light which is one of the major producers of LED Solar Lanterns in India.Note Orb Energy in its websites says that it sells around 1000 systems a month and plans to double the size of its operations by increasing the number of branches,employees.Solar System is a massive opportunity as Solar Power in India is set to grow exponentially in the coming years.Note Orb Energy is a system installer and does not manufacture solar panels in India.
June 28, 2011
Proprietary Trading by Foreign Banks and Brokerages has been allowed by the Finance Ministry overruling India's Central Bank RBI.There seems to be no logical reason given by the Ministry despite RBI objecting saying that it will affect the financial stability and lead to increased speculation in the Indian stock markets.Note Properietary Trading refers to trading in financial assets by investment banks using their money and has come under the regulatory glare in the US.Huge conflicts of interest arise due to this practise as brokerages can indulge in front running and other unethical and illegal acts.Already major investment banks like Goldman have been fined hundreds of millions of dollars over improper trading acts.Proprietary Trading encourages brokerages to mislead and defraud customers as they are generally on the other side of the trades and advising them as well.
June 28, 2011
What is Cloud Computing
Cloud computing refers to the use and access of multiple server-based computational resources via a digital network (WAN, Internet connection using the World Wide Web, etc.). Cloud users may access the server resources using a computer, netbook, pad computer, smart phone, or other device. In cloud computing, applications are provided and managed by the cloud server and data is also stored remotely in the cloud configuration. Users do not download and install applications on their own device or computer; all processing and storage is maintained by the cloud server. The on-line services may be offered from a cloud provider or by a private organization.
June 28, 2011
European Carbon Trading Market goes into a Huge Slump on Greek concerns,post 2012 Kyoto uncertainity
The European Carbon Trading Market which is the biggest cap and trade market in the world has gone into a monster slump with carbon credit prices having fallen to around 10 euros which is the lowest since March 2009 when almost every global asset had fallen to multi year lows.The trigger for the correction in prices is the future of the EUA scheme in which major carbon emitters in Europe are restricted to quotas and have to buy carbon credits if they exceed their limits.A huge amounts of United Nations CERs are sold into this market as they are allowed to to so.This has led to the mushrooming of a huge growth of carbon consultancies in India and China which help projects in obtaining these lucrative CERs.Note this has recently become highly controversial with a number of frauds happening in trading of these carbon credits.Top investment banks have been convicted of fraud and big sellers of CERs like the HFC producing companies have made ludicrous windfalls of hundreds of millions of Euros.Some of these companies have now started focusing in winning these CERs which are much more profitable than their core operations.
June 28, 2011
REC is looking to invest more than $600 million to set up 300-400 MW capacity in India and is already talking to the Himachal Pradesh government to set up plants there.REC has said that it is looking for power plants with a PLF of more than 50% which automatically rules out wind and solar energy.Its interesting that REC is concentrating on small hydro and biomass power capacity unlike other PSUs which are mainly concentrating on solar energy.India needs massive amounts of investment in renewable energy in order to meet its 15% Renewable Energy Obligation by 2020 from 5% at present.Its instrumental for the large government companies to invest heavily into clean sources of energy.Power Finance Corporation Green Energy has been set up by PFC to become one of the biggest lenders in Green Energy and now REC has also decided to directly invest in Green.More such initiatives will have to be taken to increase the cleantech energy capacity.
June 25, 2011
However analysts as they are wont are creatures of habit and don't go out of their comfort zone.They try to stay in the territory of the obvious and don't look at deeper problems.India has been rocked by a number of corruption scandals and telecom has been one of the biggest hit.Unitech Wireless one of the new operators is one the verge of having its properties attached by the Indian state while top executives on Reliance (ADAG) are in jail for colluding to defraud the Indian government of billions along with the former telecom minister Raja.While Airtel is not facing this problems,its insidious business practises are equally problematic if the come to light.In broadband companies in India,I wrote how service providers fleece and loot consumer through systematically fraudulent tactics.This is so widespread that I have no doubt that top management is aware if not actively promoting such activities.A refresher,telecom providers in India routinely activate value added services like ringtones (costing Rs 30/month) and other such services without the consumer's consent.As the amount is small and most of the consumers are illiterate without having the knowledge of what's happening ,these companies make a killing.Airtel is also doing this and making the biggest killing of the India consumer.Only a serious investigation on the lines of 2G telecom scam can uncover this corruption scam which goes on bringing hundreds of millions of illegal for these telecom companies.
June 24, 2011
The Nifty Trading Tip Industry is filled with innumerable websites,scamsters who are trying to make a quick buck of gullible retail investors.Almost all Indian websites are filled with text and print display ads in which websites offer you hundreds of percent returns on your money by providing you daily tips on the Nifty.You are bombarded with ads and even the Google home page contains ads by these scamsters.Note earning ANY MONEY through day trading is a tough task let alone 100% or more.The fraudsters provide you tips not based on any commissions but using a monthly rental.Note these websites have no business model except scamming for they have no costs except for marketing and spending.If they manage to snare even a single subscriber its a pure Rs 3000 profit .
June 23, 2011
India has set a target of 20 GW of Nuclear Energy by 2020 from around 5 GW now and has already signed deals with major nuclear equpment suppliers like Areva,GE-Hitachi and Toshiba.However the Nuclear Disaster at Fukushima has changed things on the ground with protests growing by the day.Note only are the proposed nuclear reactors at Jaitapur facing massive protests,even the existing nuclear power plants in India are seeing locals raising their voices.Recently many prominent citizens of India signed a protest letter against the upcoming Jaitapur plants.Note the advantages and disadvantages of nuclear power has been debated on for a long time.The catastropic risk of a nuclear reactor meltdown is the biggest con of nuclear energy and has made it intolerable in a number of countries.After Japan has decided to kill nulcear power in the country,other progressive countries like Germany,Italy and Switzerland too are going to switch off nuclear reactors once the life of the existing plants are over.
June 23, 2011
GoldPoly,SunOasis,China Technology Development Group Corplto invest $10 billion in European Solar Projects using Financing from China Development Bank and Merchants Bank.Note these 3 companies have integrated facilities from processing of polysilicon into wafers to making solar panels.Its the first time that 3 Chinese companies have combined to promote such a massive project.The 3 companies are not listed in the US stock or HK stock exchange unlike other major Chinese solar companies like Trina,GCL,Suntech,LDK and others.Note China Development Bank (CDB) which is owned by the Chinese government has already extended billions of dollars in credit to Chinese solar panel companies like JA Solar,LDK and others.
June 23, 2011
China installed almost 50% of the world's wind power energy capacity in 2010 as its market exploded from almost nothing to around 18 GW.China's massive energy needs and its growing emissions and pollution problems have led to strong tailwinds for the wind industry.This has also led to the growth of a massive domestic industry which has led to 8 Chinese Wind Turbine Producers among the top 15 global WTG suppliers.Now China is looking to make major inroads into offshore wind energy which is dominated by Europe.China has the only offshore wind farm in Asia off Shanghai and is looking to rapidly ramp up as its energy needs keep growing.With more than 70% of China's electricity coming from dirty coal and the country already consuming 3 billion tons of coal a year,energy sources have to be diversified urgently.
June 23, 2011
Solar Industry Mergers and Acquisitions (M&A) have picked up pace in recent times with a number of companies in distress with supply exceeding demand as Italy suddenly changed its solar subsidy policy in April 2011.With high inventory levels and prices crashing only the biggest and best solar panel manufacturers are managing to thrive.Note the Solar PV Industry has not seen too much M&A unlike the Solar Thermal Industry which has always been a hot area for M&A activity as giant industrial groups like Siemens,Areva,Alstom and GE have bought startups to improve their technology offerings.With the Solar PV industry having crossed more than $50 billion mark in 2010,more and more MNC conglomerates have now starting buying solar companies at cheap valuations.Here is a list of the recent buyouts,stake buys and mergers in the Solar PV Industry that have taken place recently.
June 23, 2011
Solar Energy in India has immense potential due to the massive growing demand of energy in an already deficient country.The Indian government too has realized this and set an ambitious plan of 20 GW by 2020 under JNNSM.Despite teething problems in the first phase of JNNSM,India should manage to grow its solar power capacity by more than 10x in 2011 to 700 MW.According to IREDA which is the main government renewable energy finance $2.2 billion would be invested in 2011 to grow the capacity to 700 MW.Note despite this impressive rise,note solar power in India comprises less than 0.5% of the total installed electricity capacity in the country and the growth comes off almost a non-existent base.
June 21, 2011
China does not have many friends in its neighborhood,in fact it does not have any friends with relations with most countries being quite tense.The only friends it has is a tinpot communist dictatorship North Korea which has managed to keep its citizens in the Stone Age and Pakistan which is well on its way to become a failed state with a suicide bombing a day.What is interesting is that China holds the world record for sharing borders with the maximum number of countries,so one would consider it prudent to hold good relations with a large number of them.On the contrary China has had tense relations with almost all of them with low level military incidents the order of the day.China has a very cagey relationship with India where tensions have risen all the time with numerous friction points like Tibet,Arunachal Pradesh,supplying Pakistan with arms and building ports in smaller countries.South Korea alleged cyberattack a few months ago from hackers close to the Chinese government as well.
June 21, 2011
India's JNNSM on the other hand has seen the first phase marked by a number of teething problems like debt financing,absurdly low bidding by noname companies,poor electricity infrastructure.The Second Phase is supposed to ally these problems but the first plans do not seem to be too great.The support for large solar farms will be increased from the current 5 MW cap to 20-25 MW cap.This will lead to only large investors,utilities and companies being left in the fray and lead to lesser competition.Also there is no support for rooftop solar which will help to broadbase the reach of solar energy.A Policy which helps distributed solar like Germany will do much more to boost solar in the country than supporting massive solar plants that will only help large companies making the most of the taxpayer subsidies.Note Delhi is the only state in India which is giing primacy to rooftop solar systems and is in the process of announcing a capital subsidy soon.The reason may be that Delhi mostly consists of urban homes and they have little option.
June 21, 2011
Japan's Solar Energy Manufacturing Industry is quite large and second only to China which may surprise a lot of readers. Sharp was the largest solar company by revenues and the other six zaibatsus have been present in the solar power manufacturing for a long time.Mitsubishi the Japanese conglomerate with diversified global interests has a big presence in solar and wind energy as well.It has a low profile solar module and system business.The company is known for its high quality panels and has a decent presence in USA and Japan.However like Kyocera it has not been aggressive enough leading to loss in marketshare.
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