Our Mission
At stockmarketgalathai.com, we highlight stocks where fundamentals don’t justify share valuation. There are many manipulative forces operating in the market and we want to say BEWARE OF MANIPULATORS.
Even so called analysts/investment gurus hereinafter referred to as “Stock BABA” create hype and panic about any share in market by looking at trend and not fundamentals.
What do Stock BABAS really do ? – If market or a particular stock is in uptrend, they will simply give ‘buy’ call even if stock is overvalued. Similarly if market is going down, they will give ‘sell’ call on the same stock saying its overvalued. Fundamentals doesn’t matter to BABAS. Simple examples of this are Siemens/ABB/Dixon/HAL/BEL/BHEL for which they gave buy and sell call in same month -July’2024. In that case why do we need STOCK BABAs. Our appeal is to ELIMINATE STOCK BABAS. News channel should give only news about particular stock and keep buy/sell call to themselves. Say no to Stock Babas. #stockmarketgandahai#stockmarketgalathai#stockmarketghatiyahai#eliminatestockbabas
Market Manipulation/ Satori baazi
Infinite manipulations but few of these are:
o Pump and Dump Schemes: In India, there have been cases where promoters or insiders artificially inflated stock prices through misleading statements or financial maneuvers, only to sell their holdings at a profit once retail investors bought into the hype. One infamous case was that of Satyam Computers, where the company’s founder falsified financial statements to inflate the stock price. Yes Bank and DHFL were other examples of under provisioning.
o Insider Trading: Instances of insider trading have been reported in India, where individuals with access to confidential information about a company traded on that information before it became public. The Securities and Exchange Board of India (SEBI) actively monitors and penalizes such activities to maintain market integrity but there are limitations to identify these transactions as these are routed through non-interested parties.
Wash Trading: While less common, instances of wash trading have also been observed in the Indian market, where traders artificially create trading volume by buying and selling the same security to give the appearance of market activity and influence prices.
Liquidity Issues: Certain stocks can be illiquid, meaning there is low trading volume. For example, stocks of small-cap companies or those in niche sectors may have limited trading interest. Due to low trading volumes, there is high risk of manipulation in prices by vested interests.
Analysts and Anchors: Cases have been reported where analysts and TV anchors (Stock Babas) have misled investors following their advice and they make profit out of this. In 2022, SEBI imposed charges against famous TV Stock Market Anchor which was later set aside by SAT.
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Share your experience of Manipulations or let us know if you feel there is manipulation going in any.
RISK DISCLOSURES ON DERIVATIVES – So are you really in 10% individual traders who profit from F&O?
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to ₹50,000
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
SEBI Chief: There are pockets of froth in mid-, small-caps that can build into a bubble. – Mar’2024
There are pockets of froth in the small and mid-cap space in the equity markets that has the potential to become a bubble and burst affecting investors, said Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India. Talking to reporters on the mandatory stress testing disclosures to be made by mutual funds, Buch said that it would not be appropriate to allow the bubble to build because they are liable to burst and impact investors adversely.
Even after SEBI Chief warning, Midcaps and Small caps are making daily highs. Even SEBI understands that market is overvalued and its just fund flows which are driving market which will eventually get impacted.
SEBI decision on futures and options expiry: Highly negative for Retail investors
In case a trader has an open position in a Stock Futures contract & In-The-Money Stock Options that has not been squared off on expiry date, these contracts would have to be physically settled. The trader thus gives or receives delivery of the stocks which were the underlying to settle the transaction. Couple of years back there was no requirement of physical settlement of In-The-Money Options and they used to get settled at closing rates just like Nifty and Bank Nifty, but SEBI changed the rule for mandatory physical settlement of In-The-Money Options. FIIs, DIIs and Satoris have deep pockets and are not impacted by this but for retailers this is highly risky as stocks are manipulated and closed at 5-10 paise higher or lower than strike price to make options In-The-Money. The problem is this happens in last 1 hour of trading in expiry and sometimes there are no buyers for In-the-money stock options. In that case it goes under physical settlement and eventually auction of those shares resulting in huge penalties and losses for retail investors.
Example 1: High movements and manipulations in Nifty and Bank Nifty on weekly expiry
Recent case is on 3rd July’24 when Bank Nifty rose 900 points on weekly expiry day. Again on 19th June’24 Bank Nifty rose by around 1000 points. This is frequently happening in last couple of months. Satoris/Manipulators buy very cheap call options for the expiry day and then take Bank Nifty/Nifty higher/lower to make enormous money on options. Why such high movements happen mainly only on Expiry day ??
Example 2 : Dixon Technologies
Dixon Technologies share rose more than 30% in June’24 and around 200% in last 1 year. P/E ratio is 200 and market capitalisation is 75k crore as on 5th Jul’24. Not even a single blue chip company has this high P/E ratio. For a company making just INR 364 crore in profits in 2024, valuations are exorbitant. This company is into contract manufacturing and they hardly make 4-6% margins for any contract. Even they share PLI scheme benefits with the customers and eventually PLI scheme is going to end in few years. So even if they get new orders, there margins will be in the same range and subsequently reduce when PLI benefits come to end. Average trading volume in this share is 2 lac shares and it has got high Insider Ownership of 24.9%. Obviously it is easy to manipulate share price. It is highly volatile and even being so expensive share, it rises 4-5% in a day. All BABAS say its good stock to keep just because it is on rising trend. The day it will start falling, they will start giving short calls.
Example 3 : ABB India and Siemens India
ABB and Siemens India have almost double in last 1 year and have P/E ratio of more than 120. Government is investing in lot of projects. Point taken. Its good for ABB and Siemens. But can they command market capitalisation of more than 2 lac crore ? ABB India market capitalisation is 20% of their Global Parent Entity. Trading volumes in both the shares is very limited. Profits of ABB rose around 20% YOY, while market capitalisation doubled. All driven by Satoris and BABAs.
Example 4 : Jubilant Food
Jubilant Food crossed 800 price on 8th Oct’2021 and since then its been falling. Jubilant is franchisee of Dominos. When it was rising in 2021, BABAs were giving daily new upwards target. Even BABAs used to show their photo eating Dominos pizza on TV channels. It used to rise like anything. Company gave news that are coming up with Briyani outlet theme, stock rose 10%, then they announced their new format of Hong’s Kitchen and it again went up. Both Biryani and Hong’s Kitchen didnt work for them. Jubilant came with announcement in 2020 that they will acquire 10.76% stake in Barbeque Nation for Rs. 92 crore and stock was up by more than 10% on this news. Investment was only 92 crore and market capitalisation of Jublfood increased by more than 3000 crore. Since then it has been on continuous decline and consolidating in range. Now no BABA talks about Jublfood. And since trading has always been less in this script, Satoris could manipulate easily.
Example 5 : Yes Bank, DHFL and Indiabulls Housing Finance
Yes Bank, DHFL and Indiabulls Housing Finance are cases of highly manipulated stocks. Till few years back, they used to make daily new highs and all BABAs were bullish on these stocks. RBI was aware of the manipulation in Financials and stepped very late and slowly and by the time concrete steps were taken, investors wealth got eroded. Its very easy for Management to give forward looking statements to manipulate the prices but then BABAs should be the one talking about real value of stock rather than just going by trend
Example 6 : Reliance Industries
26th June’24 – Reliance industries share rose around 120 points without any news available to Public. Even BABAs on TV channels said that there is no news but since it rose up, obviously analysts give buy calls. It further rose on 27th June’24 by another 30 points. Finally on 28th June’24, news came out that Reliance is increasing tariffs on Jio and stock went up by another 70 points. So were Satoris already aware of insider news that tariff increase is coming on 26th June because you don’t see this kind of movement in Reliance till there is big news ?? If this is true, they make hell lot of money.
Disclaimers:
By accessing this website, the users undertake to have read, understood and agreed to be legally bound by the terms of the following disclaimer: The views provided in the website are our own. We advise the users to check with duly registered and qualified advisors before taking any investment decision. We do not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. We don’t recommend buy or sell on any stock. Website is intended only to highlight risks in stock market (more specifically dealing in futures & options) so that people trade with caution and are aware of risks/manipulations involved in stock market. Website is not intended to offend anyone and just highlight the speculations which we believe/assume happen in stock market based on experience. We trust SEBI, RBI and other regulatory authorities are vigilant and working towards best interest of investors. PLEASE DO NOT MAKE ANY INVESTMENT DECISION BASED ON THIS WEBSITE.