BSE advances by 10 minutes, so what to expect from NSE?

Trading at the Bombay Stock Exchange will now start 10 minutes earlier than usual - at 9.45 a.m. instead of 9.55 a.m.

SEBI in October had given permission for the stock markets to operate between 9 to 5. The brokers and the bankers were not too happy with this decision. So BSE has decided to advance its operating hours in a phased manner. You can expect the NSE to follow suit very soon.

The other thinking was that since FIIs are a big part of for the Indian market. Singapore and Hong Kong go for lunch at 10 am Indian time. If we start the markets at 9:45 am we give the guys in Hong Kong and Singapore to do some trading before they go in for lunch.

Last month, BSE changed the expiry date of monthly index F&O contracts to the third Thursday instead of the last Thursday of each contract month. BSE has also introduced weekly options to bring some interest into the derivative market.

Stock Market Investment Strategies - Telecom stocks, Good time to buy!!!

All telecom stocks have taken a beating in the stock market. Do-Co-Mo started all this with its per second billing plan. All operators came under pressure to comply with per second billing. After DoCoMo it was Airtel which launched with per second billing and then Idea and so on. Everyone seems to be going for per second billing. The operating margins of the telecom companies which was greatly reduced due to the entry of players was even more compressed.

The Central Bureau of Investigation's probe into the 2G spectrum allocation scam further pulled down the telecom stocks. This scam has stopped the allocation of the spectrum for 3G which was to be held in a couple of months time. Presently all telecom stocks seems to be playing the number's game to attract more customers which would enable them to get larger share in the spectrum.

Bharti Airtel also saw disappointing Q2 results which reduced the stock to Rs 292.90 a 52-week low. Reliance communications also saw its stock value decrease to 176.

This presents a great opportunity for the investor to invest in telecom stocks. These stocks seem to have bottomed out already. If you have a long term view it would fetch good returns. However, in a couple of months you would be a able to see a clear picture of where the telecom stocks are heading.

Stock Market Investment Strategies - trading 9 to 5 to become a reality

SEBI has allowed the stock exchanges to extend trading hours of equity markets. When this is implemented, stock exchanges will start trading from 9am and close at 5pm. This is aimed at aligning Indian stock markets with international ones in a bid to woo more trades.

Most of the international stock markets work for eight hours a day, compared to Indian markets that are open for only five and a half hours. Presently India's stock markets work between 10 to 3.30.

The main hurdle for this to happen is of banks. Bank timings also needs to coincide with market timings since the transactions will have to go through it. This will also put tremendous pressure on the brokerage offices.

With this the volatility may come down which is observed in the Indian stock markets and also trading volumes will increase.

Stock Market Investment Strategies - Mindtree buys Kyocera

Mindtree one of the largest software services company in India has made a deal with San-Diego based Kyocera to buy its indian Subsidiary Kyocera wireless India.

Mindtree would make an upfront payment of $6 million to buy this firm. The IT firm expects the acquisition to contribute about $9 million in revenues for the period Oct 2009 to March 2010, with profit after tax expected to be in the range of 13-15 percent. This acquisition makes Kyocera a major strategic client for MindTree. Kyocera wireless india (KWI) which is based in Bangalore will continue to provide engineering services to San Diego-based Kyocera Wireless Corporation (KWC) and other Kyocera entities on a contract basis after the sale. Mindtree had earlier acquired Aztec and added 2.5k employees to its fold. The indian subsidiary of Kyocera employs about 600 people. This increases the total employee count to more than 10k.

Related News:

Mindtree launches Mobile Business

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Stock Market Investment Strategies - 3.9 billion for Perot Systems

Dell has struck a deal with Perot system by agreeing to buy Perot at 3.9 billion. This price is at a 67.5% premium to the existing share value. i.e. Dell would be paying $30 per share. With this deal Dell is expecting to compete with the other two service majors Hewlett Packard and IBM. Dell and Perot systems combine would be 8 billion dollar service company.

Dell has made this acquisition with the intention of entering into the healthcare and government services. Perot has a strong focus in this arena. Dell is far behind in terms of services in comparison to HP and IBM. While both these companies went on the buying spree Dell had remaining quite all this while. Now having made its intentions clear, many analysts feel that the price that Dell is paying is too high.

Stock Market Investment Strategies - Oil India IPO priced at 1050

The Oil India IPO issue price is fixed at Rs 1050 per share. The IPO has raised a total of 4982 crores for the state run Oil India company Limited.

The IPO will make its debut in the stock markets on September 30th. The bid for the IPO which closed on 10th sept was oversubscribed 31 times. The company issued a statment saying over 99% of the bids were at the higher band of 1050.

This is the third oil company in the last couple of months to issue an IPO after Adani power and NHPC which received an overwhelming response.

Related Posts:

NHPC IPO

Adani power IPO

Initial public offering

All about stocks

Stock Market Investment Strategies - Oil India IPO Status

In the IPO front the Oil companies seems to be getting tremendous response. Intially Adani Power, NHPC debuted in the stock exchange after this Oil India get a similar response for its IPO.

The QIB category saw a wonderful response with that category being oversubscribed by 50 times. The recession times has still put the retail subscribers away from the stock market with that category being oversubscribed only 1.7 times. When this category sees heavy oversubscribtion then you can really say that the downtime for the stock market is over.

-30.82 times on the final day

- 4.02 times until third day

- 1.44 times till second day

- 1.28 times on first day

Bidding status Details:

Retail: 1.76 times

QIB: 53.83 times

Non-Institutional Investors: 10.48 times

Employees: 0.27 times

Total: 30.82 times

Related Posts:

NHPC IPO

Adani power IPO

Initial public offering

All about stocks

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Stock Market Investment Strategies - BSE introduces IPO index!!!

BSE has launched an IPO index to track the value of stocks for two years after listing. The IPO index is similar to Sensex (which includes all the 30 sensex stocks) or the Bankex (this includes all the banking heavy weights). When the index was introduced there were 48 stocks in it. The BSE said its IPO index will track companies which have a market capitalisation of at least 1 billion rupees on listing day.

You can trade for these as if they are normal company shares. Even though they are a group of shares you cant trade them separately once you buy it. i.e. if you buy sensex then you can't sell RIL separately from the lot.

Looking at the history, it’s interesting to note that the IPO index is often rise at a faster pace than the market. However, BSE has states that a stock is included on the third day of its listing, and not at the price at which the stock was offered to the public. This takes away the listing gains that is often seen in the IPO market.

On the day IPO index was launched, some of the shares that are a part of it (in alphabetical order).

Adani Power

BGR Energy Systems

Brigade Enterprises

Edelweiss Capital

Everonn Systems

Future Capital Holding

Koutons Retail India

Mahindra Holiday Resorts

Motilal Oswal Financial Services

Mundra Port and Special Economic Zone

Omaxe

Onmobile Global

Power Grid Corporation of India

Puravankara Projects

Reliance Power

Religare Enterprises

Take Solutions

Transformers & Rectifiers

Related Posts:

NHPC IPO

Adani power IPO

Initial public offering

All about stocks

NHPC IPO to be listed on 1st sept

NHPC is to be make a debut in the stock markets on the 1st of next month.

NHPC has raised Rs 6,048 crore through the recently concluded IPO. The IPO, biggest since the Reliance Power issue in January 2007, was subscribed 23.5 times.

Listing Details:

IPO Listing Date: Sept 1

Script Code: 533098

Symbol: NHPC

Group: 'B' Group

Issue Price: Rs. 36/-

Related Posts:

NHPC IPO

Adani power IPO

Initial public offering

All about stocks

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Limit on usage of third party ATM

RBI has decided to do away with the unlimited usage of third party ATM for withdrawal from saving account. RBI had earlier given a circular to all banks allowing unlimited withdrawal from any ATM from across India. This was effective from April this year.

Third party ATM charge the bank with Rs 20 per transaction. This made the banks appeal to RBI for change in the usage of third party ATM's. It was seen than more often the consumer used other bank ATM's even for small withdrawals like a few hundred ruppees.

From October onwards there will be a maximum limit of 5 withdrawals from third party ATM's in a month. There is also a maximum limit of Rs 10,000 per transaction.

Adani Power IPO Unchanged on listing

Adani Power, which raised 30.2 billion rupees in the IPO, was almost unchanged in its debut. This may be because of speculation that the company’s future expansion may slow. The company will be using the funds to partly finance power projects in the state of Gujarat and Maharashtra.

The issue price of the IPO was fixed at Rs100 per share and at the end of the day it was seen at Rs100.1 This share should be seen as a long term investment. Any huge surge in this share soon is highly unlikely.

JSW Energy IPO soon

SW Energy is planning to raise Rs 3,000 crore via the initial public offering (IPO). JSW Energy is planning to use its IPO proceeds to fund expansion.  JSW Energy will primarily use the money to part fund power projects and mining venture. The company is building power plants with a combined capacity of nearly 3,000 megawatts (MW) and has plans to develop utilities in western, eastern and southern India.

Adani Power and state-run NHPC have raised a combined $1.9 billion through IPOs in the last one month with their offerings subscribed more than 20 times each.

JSW Energy is not a subsidiary of the listed company JSW Steel. It holds just about 5.7% stake in the company. This is how the entire promoter holding stands. Sajjan Jindal holds 5.5% stake, JSW Investments hold 39% stake and Sun Investments hold 19.82% stake. 

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Related Posts:

NHPC IPO

Initial Public Offering

All about Stocks

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Adani Power IPO Allotment

Click here allotment status for this IPO. 

The issue price for Adani Power IPO is fixed at Rs.100/- per equity share. This is the higher end of the price band. The IPO is expected to hit the market on August 20.

Related Posts:

ADANI IPO

All about stocks

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Initial Public Offering

IPO or the Initial Public offering is the first sale of stock by a private company to the public.They are usually issued by smaller, younger companies seeking capital to expand its operations. They are also done by large companies looking to become publicly traded.

IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future because there is often little historical data with which to analyze the company. However, this risky investment can fetch excellent results as well in a very short time.

The money paid by investors for the newly-issued shares goes directly to the company in contrast to a later trade of shares on the exchange, where the money passes between investors. The company is never required to repay the capital, but instead the new shareholders have a right to future profits distributed by the company.

A company that is planning an IPO appoints lead managers to help it decide on an appropriate price at which the shares should be issued. This is called the Issue price of the IPO. The most common method of issuing a IPO is though the book building process. The other method would be to fix a price by the company with the help of lead managers.

After the initial bidding of the IPO, the company issues the shares to successful bidders. This process takes about 15-20 days before it starts trading in the stock market. The initial day of trading usually sees a large fluctuation in the share value. This can used by traders for making profit.

Related Topics:

NHPC IPO

Adani Power IPO

All about stocks

NHPC IPO

After one of the major power IPO in this year now is the turn of another IPO NHPC. Adani power brought interest back to IPO's after a long time initially started by Mahindra holidays IPO. This one looks even better priced than Adani power.

NHPC IPO Details

Issue Open: August 7,2009 to August 11, 2009

Issue Type: 100% Book Built Issue (Initial Public Offer IPO)

Issue Size: 1,67,73,74,015 Equity Shares of Rs. 10

Face Value: Rs. 10

Issue Price: Rs 30-36

Bid Lot: 175 Shares or multiples

Maximum Subscription Amount for Retail Investor: Rs 100,000

About NHPC

Subscription Status:

Friday August 7: oversubsribed 3.5 times

Monday August 10: 3.76 times

Tuesday August 11: 6.16 times

Wednesday August 12: 23.74 times

More details:

QIB: 29.16 times
Non-Institutional Investors: 56.71 times
Retail: 3.87 times
Employees: 0.57 times

Overall: 23.74 times

Related Posts:

ADANI IPO

All about stocks

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Adani Power IPO

Adani Power is a power project company and a part of the Adani Group.

Details of IPO:

• IPO starts : 28-07-09
• IPO ends : 31-07-09
• Shares available for IPO : 301,652,031 shares
• Face value : Rs 10/-
• Price Band : Rs.90/- to Rs.100/-
• Bid Lot : 65 shares and multiples

This IPO has raised lot of interest since this is the first IPO this year to have seen full subscription on the first day of the offer. On the first day, the institutional investors portion of the issue was oversubscribed more than six times while non institutional-non retail investors bid for more than two times the number of shares reserved for them.

Subscription Details:

• 3.96 times subscription on day one
• 4.64 times on day two
• 6.86 times on day three
• 21.64 on last day

Sector wise detials of the subscription of the IPO

QIB: 39.48 times

Non-Institutional: 8.62 times

Retail: 2.97

Total: 21.64 times

The listing date of this share is expected to be August 20.

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Related Posts:

NHPC IPO

Initial Public offering

All about Stocks

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Stock Market Investment Strategies - best stock market quotes

Here is my collection of famous stock market quotes to keep in mind before trading on the stock market. Some of them are very useful.


Be fearful when others are greedy, and be greedy when others are fearful.
Warren Buffett


The stock market is simply the transfer of wealth from the impatient to the patient
Warren Buffett


It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.
George Soros


I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
Warren Buffett


Only buy something that you'd be perfectly happy to hold if the market shut down for ten years.
Warren Buffett


If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.
John (Jack) Bogle


Put not your trust in money, but put your money in trust.
Oliver Wendell Holmes


Money is like manure. You have to spread it around or it smells.
J. Paul Getty

Related Posts:
All about stocks

news updates 26 jun

Inflation raises marginally but still remains at sub zero levels. Inflation based on the wholesale price index remained in the negative zone for the second week in a row now. Inflation had dipped to negative in early June 2009 for the first time since 1977-78.

Crude oil price also breached the 70$ mark again. 

All regions in the country, where the monsoon has arrived, saw subdued rainfall for a couple of days immediately after the arrival of monsoon. A deficiency in rains is certain to adversely impact the productivity and prices of cash crops.The prices of these crops have been raising, and if the country fails to get enough rains soon, they are expected to become expesive.

Nandan M. Nilekani, one of the Board of Directors of Infosys, is all set to join the Central government, as chairperson of the Unique Identification Authority of India(UID). This is a new agency set up to provide UID numbers to all citizens for accessing various government services.Nilekani has been chosen to head the authority considering that the project will be based on techniques of Information Technology and there will be need to keep updating the system.

Tata Communications has bagged a voice services five year outsourcing deal from British Telecom worth about $300 million.

Stock Market Investment Strategies - All about stock market

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Stocks
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Stocks trading

Short selling

Key terms to watch in a stock

Multibaggers

IPO

Basics

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Mutual Funds
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Growth or Dividend

Tax saving

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Secondary

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Derivatives

Call option

put option

Futures

Stock Market Investment Strategies - Short Selling

Short selling is the practice of selling a share that the seller does not own at the time of the sale. Short selling is done with the intent of later purchasing the same at a lower price. The difference thus obtained from selling and later buying the share at lower price gives the profit.

If you want to short sell shares then you need to buy back the same shares by the End Of the Day(EOD). This is because short selling of shares is possible only for intraday transactions. If you fail to buy back the shares then it is possible that the broker would buy it at the auction before the EOD.

For example: lets say you sell a share at 100 and later on the same day you buy back the share at 90. This means you have earned a profit of 10 from this transaction(assuming no brokerage charges :-)). The only difference with normal trading is that the selling happens before you buy it. Lets take the same example again and you have sold the share at 100 but instead of the price falling, it instead rises to 120. In this case you will have to close this transaction and buy back the shares by the EOD even if you have to buy it at a higher price than what you have sold it for. If say you buy back at 120 then you inherit a loss of 20.

Short selling is useful if you are sure that the prices is going to fall. Thus you can make profit in share market even when the share price/ stock market is going down. However, remember that these kind of transactions are very risky.

Stock Market Investment Strategies - Mutual fund plans

Every mutual fund scheme comes with two types of plans.

Dividend plan: The investors opting for the dividend plan get dividend whenever the mutual fund declares dividend in the particular scheme. As a result, NAV of the fund falls by the amount of dividend declared. For example, if the NAV of the fund is Rs 100 and the fund house declares a dividend of Rs 10 per unit, then the NAV of the fund will go down by Rs 10, i.e. new NAV becomes Rs 90, since that amount gets distributed among its holders.

If you are looking for income then you can go for this plan. It will also help you book profits from time to time and thus protecting your investment from a sharp fall in the share market. Remember, returns on dividends are not guaranteed, so dont depend on it for regular income.

Growth plan: In growth plan, the investor does not get any dividend. Rather the NAV goes on increasing, generating capital appreciation. For example, if you have invested Rs 100 in a fund, whose NAV is Rs 50, you are allotted 2 units of the scheme. In the growth plan, if the NAV appreciates to Rs 60, the worth of these 2 units would be Rs 120. So while the number of units remains the same, the worth of your investment has gone up. You can benefit from this plan by selling your investment.

There is another variant for this plan called as Dividend Reinvestment plan. Here the dividends declared are re-invested into the same fund. In this case the number of units you hold will increase, but effectively it is same as growth.

If you are saving for some future long term goal like retirement planning, childrens marriage etc, then this plan is useful.

Rupee raises

Immediately after the market soar over 2100 points in a single day, the rupee also followed suit and strengthened a whopping 150 paise to reach 48 against the US dollar.

The domestic currency opened with a big gap of 92 paise from its previous close and then later appreciated further. This gain is on the back of the clear electoral verdict as many FII's would be attracted to invest in this country.

The foreign exchange market saw active trade in the early morning. The local stock market were shut down as it had reached the upper circuit. It went up by 2000 points. 

The strengthening of the rupee is bound to have an impact on the Indian IT stocks. Its better to stay away from all the technology stocks for now. Expectations are that the rupee will reach 45 per dollar very soon. This is bound put some pressure on the IT industry.

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Markets create history

Markets have stopped trading for the day as the benchmarks hit the upper circuit as soon as the trade resumed. The upper circuit was breached twice in the same day forcing the markets to be shut. The first upper circuit was reached in 15 seconds which forced the markets to close for an hour. The second time it opened the upper circuit was reached in 17 seconds forcing the markets to close for the day. This has happend for the very first time that two upper circuit was reached on a single day. Upper circuit and lower circuit is kept so that the market doest move up or move down to quickly.

The markets crossed the 14k mark. The markets went up by 2100 points on a single day. This has happened mainly due to the elections results that were announced on saturday. The results shows signs of a stable government headed by congress. With no other party gaining significant number of seats the day to day activites will be completely controlled by a single party. 

Markets had previously worried that gains by smaller regional parties would weigh on the already large fiscal deficit. However, despite the strong support to the UPA government from voters, it is likely to have a tough job in bringing back the economy back on track.

So what should investors do in such a market. It would be adviced to stay away from it till the markets settle down. However, this is a good time for traders. They couldnt play a big role today as the market was open only for a couple of minutes.

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Stock Market Investment Strategies - when to sell a stock

Lets say you to bought a stock at, Rs 50. You see it climb to Rs 100. The greed in yourself makes you cling onto the stock instead of selling it. And ultimately the stock reaches Rs 40 from Rs 100 in no time, before you can change your decision and sell it.

Investor are attracted to the stock market due to their greed and the sole purpose of making quick money. It makes us think that a rising stock will climb further. But until you sell, the increase in the value of the stock is only on paper.

The decision for the investors to make is to buy the stocks at the right time and sell it when it is at its peak. Even investment analysts and fund managers admit that finding the right time and price is very difficult. Here I present some of the guidelines that can help you in making the decision.

• First off, accept that it is almost impossible to sell the stock at its peak. When you sell, there will always a few more that you could have made. Accept this fact and be happy with the profit you made, as greed inevitably leads to costly mistakes. If your stock takes off then it's time to do a reality check. Is this a reasonable increase because the business fundamentals have improved that much? If yes, keep the stocks and your cool. If not, you're probably looking at a bubble. Get away from this stock immediately. Surely you may think that you didnt make slightly more profit, yet you should feel happy that you didnt have the stock when it will take a beating in the coming days.
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• The best strategy would be this "If you had no shares, would you buy some at the current price? If yes, stay put or buy more. If not, sell and cut back your losses." This should be done at particular intervals of time to re-balance your portfolio.
  
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• Whenever you buy a stock maintain a target price at which you will sell the stock partially or fully. When the target price of your stocks has been reached, taking a selling decision is easy.
  
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• By having a stop loss trigger you sell a stock, not to book profits, but to minimise your losses. A stop-loss sell order is a contingent order that will get triggered only if the stock does fall to a particular price.
  
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• There could be fundamental reasons why you should think of selling the stock that you have long owned. It could be a sudden about turn in the company’s financials or prospects
  
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• Whether it is a bull phase or a bear market rally, there will always be stocks in your portfolio that merit selling or replacing with other options.
  
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• Booking of profits is should be your aim as it leaves you with liquidity, which can be handy when there is an opportunity to buy.
  

Indian Elections

The final phase of the one month long elections concluded yesterday. The exit polls, the ban on which was lifted yesterday after the final phase of elections started giving their verdict on the elections. Most of them predicted around 200 seats both for UPA and NDA. They need 272 seats to form a government. Unable to find a clear winner and hopes of a stable government dying the market slumped today.

The results of the elections will be declared on May 16 i.e. on saturday this week. Since both alliance are short of the majority they would scramble with the smaller regional parties to establish a government. Since nobody would like another elections anytime soon a government is sure to be formed. The longer it takes for this to happen the more the economy will be affected. This will surely have its toll on the share market.

Problems for DLF

DLF is now facing more problems. Just last week it announced that their profits are down by 93% this year. And now the IT department has slapped a 400 cr notice on the India's largest real estate company. The real estate developer plans to challenge the government’s order. DLF shares fell 0.45% to 244.9 on the Bombay Stock Exchange, eventhough the Sensex rose by 1.37% on Thursday. The additional tax outgo will put the company in a difficult position. Recently, DLF had exited from the 9,300-acre Bidadi Satellite Township Project near Bangalore. Today, the Bangalore city corporation, has issued a public notice against investing in DLF’s proposed complex in bannergatta road, bangalore. These are some difficult times for DLF.

market updates

Today domestic markets have with a huge positive gap of over 500 points along with the majority of Asian which opened with phenomenal gains on the back of positive cues from US markets and the long weekend previously for the Indian market. The market was closed on las week on Thursday(elections) and Friday(May day).

However, political uncertainty, with polling for India's 15th Lok Sabha underway, say see some volatility in the market for a couple of weeks. Increasing oil prices also pulled along with it the energy shares prices and fresh economic data suggested that the key parts of the economy could be stabilizing. For traders this is a very good time to exit many stocks and may re-enter after a a couple of days. For investors, the first bull rally is not the right time to re-enter the market.

It is a good opportunity to exit shares like DLF which announced last friday that its profits decreased 93% from the last year. DLF updates

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slowdown hits DLF badly

The current economic slump has hit DLF Ltd, India's largest listed real estate firm very baldy. It reported a 93% slump in quarterly profit. The property prices tumbled and it sold fewer homes and office buildings space in an economic downturn. DLF said that its consolidated net profit fell to INR 159 crore in its fourth quarter ended March from INR 2,177 crore a year ago. This is surely going to have huge impacts on the Indian economy which has shown little effect of the global meltdown.

In a quarter that saw demand evaporate in all segments, residential and commercial, sale and leasing. Revenue fell by 69% to INR 1,350 crore from INR 4,370 crore.

While residential demand is expected to improve, the outlook for the commercial business continues to remain weak. This has forced DLF to launch more mid-income housing projects in Kochi, Bangalore and Hyderabad, among other cities, and divest stakes in some hotel projects to generate liquidity in the current fiscal.

Market to remain flat

The stock market seems to be heading nowhere. In the next few weeks till the election results are announed on May 16 the market may not show much improvement. You may expect the market to remain volatile for the next few days. Yesterday it slumped over 370 points due to weak global cues.

With congress doing a last minute act to clean up its records and saving its friends like removing name of Quatrocchi (a close friend of Congress) from Red corner notice, giving a clean chit to Jagadish Tytler, imposing a new investigation on Modi, it becomes fairly evident that congress is preparing itself to move of power.

With so many parties at the center, it will be very tough task to get a stable coalition government at the center. This may also pull down the market further which will become evident on May 16. Meanwhile till that date with no strong cues to drive the market it will be directly depend on the global markets.

US Indices was seen going down marginally on Tuesday, with the confidence of consumers shrinking on the health of US Banks and probably some impact of the swine flu which has hit mexico and regions of california badly. The rupee value also was seen decreasing in the last few days.

Market raises continously

Bulls are on the rampage with the market surging for almost seven weeks in a row amid signs of improvement in the Indian economy, possibility of further reduction in interest rates with inflation at near zero. Foreign funds have been buying heavily over the last few weeks. This has seen a sudden rise in the prices of the share market. Its not only the blue chips or big caps that ruled the market. Even the mid-caps and small-caps gave good returns over the last few weeks.
On tuesday RBI cut back its key rates by 25 basis points and the inflation increased to 0.26% from the previous week 0.18%.

Wipro gave results much better than their projected revenue. This gave hopes that the IT industry is back on the revival. Wipro did a major reorganization at the start of the year which is expected to make it stronger. Also the exports made by TCS increased.

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Savings account to earn more

Savings bank account is going to yeild more from this year onwards. The RBI has issued a directive in its policy document that will change the way interest is paid on the minimum amount present in a savings bank account each day.

At present, the is calculated on the minimum balance held in the account from the 10th of each month to the last day of that month. So, if a bank customer has Rs 1 lakh in his savings account one day and then Rs 100 another day, the minimum balance taken for calculation of interest in the period would be Rs 100.

But now the policy is being revised. the interest paid on the savings account will be on the daily minimum balance. In other words, even the Rs 1 lakh balance in the savings account will earn the customer interest, even if it is withdrawn later.

The Reserve Bank of India (RBI), as part of its annual credit policy review on Tuesday, said that banks should now calculate interest on savings account balances "on a daily product basis." alculation on a daily basis would be effective from April 2010 and the modalities would be worked out in consultation with banks.

This move is a depositor-friendly measure. For bankers though, the new calculation will imply a higher cost of funds. Senior bankers say that the salaried class and pensioners would benefit the most by RBI’s move. This will definitely motivate people to hold more money in their savings bank accounts.

Tech Mahindra wins Satyam

The satyam stake sale bid which has been going on for the last one month has finally ended in the hands of Tech Mahindra.

Only four companies entered the second round of bidding. Larsen & Turbo, Tech Mahindra, Ross and Cognizant. Out of this Tech Mahindra quoted for 58 Rs per share whereas L&T bid for only 49 per share. The bidding process would have continued if one of the company quoted atleast 90% of the highest bid. This didnt happen and so the bid was awarded to Tech Mahindra.

The shares of both the companies Tech Mahindra (up by 12%) and Satyam (up by 7%) have seen huge volumes of trading today. If the IT companies fare well in the coming days then this may turn out to be a good deal for both the companies. So it is better to stay away from these two company shares as of now. Infosys is about to announce their Q4 results soon. So all eyes are set on that.

Tax Evasion through DTAA

India has comprehensive Double Taxation Avoidance Agreement(DTAA ) with 79 countries. What it means is that there are agreed rate of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. India gives relief to both kind of taxpayers, those who reside in the country which has DTAA agreement with India and those who dont have the agreement.

A classic example of exploitation of this treaty is the sale of Hutchison to Vodaphone. No tax was paid to India for this transaction.

A large number of Foreign Institutional Investors who trade on the Indian stock markets operate from Mauritius. According to the latest report over 41% of the FDI comes from this country. According to the DTAA between India and Mauritius, Capital Gains arising from the sale of shares is taxable in the country of residence of the shareholder and not in the country of residence of the Company whose shares have been sold. Therefore, a company resident in Mauritius selling shares of an Indian company will not pay tax in India. Since there is no Capital gains tax in Mauritius, the gain will escape tax completely.

India has been trying to renegotiate its treaty with Mauritius for the past few years on account of suspected "round-tripping" of funds that takes place as a result of the DTAA. To this end, the Indian government even offered incentives in terms of a one-time compensation payment. Mauritius, however, is not willing to do so.

Round-tripping refers to taking the tax-evaded money from India and rerouting it back through a tax-friendly location like Mauritius. It's tough to get information on round-tripping.

The other way of evading tax is treaty shopping, under which firms headquartered in other countries like US, route their investments through Mauritius because of the low tax rate in that country.

Related posts:

Swiss Bank Robbery

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Markets closed today

Markets are closed today on the eve of Mahavir Jayanthi. This week another day i.e. friday is also a holiday for the share market on the occasion of Good Friday.

Here is a comprehensive list of all the trading holidays for the rest of the year:


07-Apr-09 - Tuesday - Mahavir Jayanti
10-Apr-09 - Friday - Good Friday
14-Apr-09 - Tuesday - Dr. Ambedkar Jayanti
30-Apr-09 - Thursday - Elections in Mumbai
01-May-09 - Friday - Maharashtra Day
21-Sep-09 - Monday - Ramzan ID
28-Sep-09 - Monday - Dasara
02-Oct-09 - Friday - Gandhi Jayanti
19-Oct-09 - Monday - Bhau Bhij
02-Nov-09 - Monday - Gurunanak Jayanti
25-Dec-09 - Friday - Christmas

Swiss Bank Robbery

Swiss bank is the term which we hear at the time of elections and no one talks about it once the elections are done. But this time BJP seems to be bringing up this issue in a big way. Advani had earlier written about this to PM but didnt get a proper reply. So now he seems to have advised all the state government CM's where NDA sthe government to write to PM to make him talk about it in the G20 summit.

So what is in a Swiss bank system and how is it affecting us? There are plenty of Swiss banks like UBS and Credit Suisse that operate under the Swiss law with bank secrecy policy. Swiss secret accounts are like any other accounts except that no one other than the account holder has access to the account.

Especially, the government of the country wont have access to it. Specifically the laws of the swiss banks are defined so as to attract black money. Since there is no tax on the income and government wont have access to it, nobody will get a sniff of the money deposited there.

Swiss banks take away wealth from us and therefore they have to be penalized for investing into our markets. That is just common sense. The question to be addressed is why the government has given the FII status to these banks? By approving aren’t we encouraging more citizens to invest in Swiss banks, which is like our competitor? Providing FII/FDI status to Swiss banks is like slapping our own face. We are letting our own wealth to enter through back door.

Since the issue is raised by political parties now its left to us citizens and mainly the media to keep the issue alive and bring back our money back to our country.

Related Posts:

Tax evasion methods

Future of Telecom - Reliance Communications

RCOM added 3.4 million subscribers in February 2009, maintaining the lead in monthly net new subscribers post its GSM launch in January 2009. February additions indicate strong momentum for RCOM . The GSM launch had seen a huge surge in the subscribers over the last two months and this is expected to continue in the coming months. Also, the MNP implementation also should help the company although it may take some time to be launched.
This is expected in CY09 will open up the GSM post-paid market for new GSM operators like RCOM.

The valuation of the scrip now is very attractive now. The scrip is down by over 70% in the last one year. RCOM is currently trading at 20-40% discount to Bharti.

deflation staring at India

India is staring at negative inflation. The last week inflation ended at 0.44% indicating that in a few weeks India might see disinflation. So the question in everybody's mind is why is it bad? We all know that high rate of inflation is very bad so why is it that when we see negative inflation it is considered bad. After reading this article you will get to know the reason.

As all other things, anything extreme is bad. This is the same with inflation. If the inflation is high or if it is in negative it is bad. First, lets see what is inflation and how is it calculated.
Inflation measures how the index for a particular week looks vis a vis what it was exactly a year back for the same week. For eg: 0.44% inflation means prices for 1st week ending March 7 2009 rose by only that percent compared to that of March 7 week of 2008. It is a common misconception that decreasing inflation means that the prices are decreasing. This is not the case because inflation is the value by which the value has increased while compared to previous year. So if you want to see the prices falling then it would be the case when there is negative inflation.

Another term that is normally used along with disinflation is deflation. But both are completely different, even though one of them might lead to another. Disinflation is negative inflation. But deflation is even more dangerous. Deflation means falling economy. Disinflation only means falling prices, however the economy is still running but with a slow pace. Presently India is staring at disinflation and not deflation.

Anyway prolonged disinflation may lead to deflation. This can happen because when there becomes a predictablity of falling prices then everyone would like to postpone their investments as they would get the same at the lesser price by delaying it. This will start hurting the economy. So even though everyone may be rejoycing that soon the prices would be falling, smiles will be short lived. If the same continues we may be staring at deflation and if it doesnt then again its isnt good news.

Potential stocks - Reliance Natural Resources Limited

This is very good stock for traders. This is one of the companies owned by Anil Ambani, others being reliance energy, reliance capital and reliance power.The share price of the company is very less in the range of 40's now. The company is engaged in gas based energy which it gets from the Reliance Industries. This has been a issue between the two Ambani brothers as to at what price this will be lent to RNRL. The operations of the company is yet to start in full swing. Therefore this stock blindly follows the share market. So this makes RNRL one of the best safest stock for traders. I wouldn't recommend this for investors because once the company starts its operations it may not live upto the expectations that are seen in the stock market.

The earnings of the company is mainly on papers. Hence its very tough to predict the actual value of this. Yet the public believes in all reliance stocks. That's the reason why this company is commanding a very high PE ratio of over 100 for a company that is yet to start operations. Yet this is a wonderful stock for traders. Since this blindly follows the share market the risk involved in trading in this stock is very less. For short term investors this is sure to give very good returns.

Best bank of India - State bank of India

State bank of India. The largest nationalized bank of India. The price of this stock has come down significantly along with all the other stocks. But the price of this stock is very attractive now. At current market price of Rs 952, the stock trades at less than its expected FY09 book value of Rs 965 and at 7 times its trailing one-year earnings.

At this time, when the stock market looks like it has almost bottomed out its better to invest in large caps stocks and whats better than nationalized banks. Surely this is not a time to go with private banks as nobody would like to take the risk on taking a loan from them. However, for traders this may be a very good option. Banks like ICICI will give very good returns in a short time whenever the market is up and vice versa. For long term investors its better to invest in SBI.

SBI has grabbed the first mover advantage in reducing lending rates. Having pegged its home loan rates at 8 per cent for the first one year (loans less than Rs 20 lakhs), it also cut rates on SME, auto, farm and other loans.

Other state banks like SBM, SBT are being brought under the same umbrella SBI. This would further help the bank in the coming months. Decision to merge all these has already been taken and its a matter of time before it would be merged.

IBM to buy satyam

13-3-09: After getting the approval find a strategic partner of 51% shares of satyam the bidding process for this share has begun. The Expression of interest in buying needs to be filed before 20th of march. With the start of this process many suitors have already expressed their interest. But what has surprised many is the interest shown by PE firms in this bidding.

As of now rumors say there are already about 70 firms interested but many of them may not be serious. They are just there to be a part of it. With the increasing numbers has become very difficult for the satyam and its board members to answer all the questions filed along with their interest. Many firms have come up with a huge list of questions that needs to be answered before they go ahead with the bidding process. All this may take a lot of time if the number of bidders increase. Already, many customers have withdrawn their projects from satyam looking at their state of affairs. With time the value of the company will get eroded so its really very tuff to say the number of serious bidders. Publicly only a few companies like Larsen and Turbo, spice, Tech Mahindra and hinduja group expressed their interest in buying these shares. Companies like IGate are into it only because they dont want to be left out in the race.

It is really very tuff to put a value on the shares before any of the information about the financial in the last quarter is released. The board has said that all the prospective bidders will get the information about all these soon. Only after this can anyone put a proper value on the company.

20-3-09: Today IGate exited from the race of bidding for satyam. IGate seems to have exited after learning that the entire process of bidding would last for another 2-3 months , not knowing about the financials of the company and continous erosion of the company value day by day.

As of now there seems to be three serious bidders for this company L&T, spice and Tech Mahindra.

3-4-07: Spice dropped out of the race saying that the bidding process is not transparent enough. One of the serious bidders (Spice) dropping out for this reason has affected the complete process. This has forced the board members to take some steps towards making this more transparent. Meanwhile, IBM and Ross also emerged as new bidders for satyam.

newsletter 14 march

With strong global cues today the share market gained over 5%. The market gained 412 points to end up at 8756. This is one of the strongest sessions in recent times.

During these times its better to stay invested on Large caps especially the shares that are included in the sensex. This is mainly because to attract investors artificially these shares are inflated. Also Large caps are a safe bet during these times because of its sound fundamentals.

In today's share market the main gainers were the Large caps. Mid caps and small caps didn't see much of rise in their shares however they may see the same on Monday if things are positive.

Inflation was seen at a seven year low at 2.43%. RBI had predicted saying that the inflation would be seen below 3% before the end of the financial year i.e. March 31 but this week itself it went below 2.5% to beach seven year lows. Last week inflation was close to 3%. Globally even UK expected their inflation to fall to a four year lows. With inflation rates falling everywhere these are seen as an indication for good times ahead.

Satyam announced the start of the bidding process for the sale of its 51% shares of which 20% is to be bought from the market though an open offer. This is seen as an opportunity for the investors hence the shares saw a surge by over 30% in the last two days. However today it was struggling to keep up its value today. However, it would be better to stay away from this stock. There has been no minimum bid for the buying of these 51% shares by the possible suitors. Hence it would be difficult to predict the exact value these shares would fetch. Many of the suitors may be in the fray only because there is no minimum bid.

satyam bidding

Globally Citibank announced 19 dollars revenue in the first two months of this year. This has been seen as a surprise after the bank has been seeing huge losses and receiving two federal bailouts in the last few months. This is perhaps an indication of the revival of the economy though it may take sometime to recover. This economic slowdown was created due to the US banks and now if those banks are recovering from their bad times then its good for the global economy.

This is the reason, the lows seen now in the sensex may not last long. It would be better to invest at this point of time, but only in stages as it has to be seen for how long the market would be bullish. My picks for investing now would be RNRL, RELCAPITAL, SBI, IBREALEST, LNT(in case its not successful in the bid for satyam this would see a sudden surge in its value).

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news 6 march

Share market fell very badly in the last few days and today it bounced by raised above 150 points. This was mainly led by finance, banks, IT sectors and real estate.

Satyam got the nod to sell 51% to a new partner. Hearing this news the shares rose by 19% by the end of the day to reach 42. It might rise further if there is a strong contender for buying this share. Anyway, it will be a risk now to buy these shares as the value of the company has degraded a lot in the last couple of months.

Following the RBI rate cuts, SBI today reduced interest rates by quarter percent. This is likely to be followed by other banks. The shares of SBI are available at a very low price of 925-950. For long term investors is a very good time to invest in shares like SBI. This bank has very good potential and is one of the biggest banks in India. Recently SBI also overtook citibank in the amount of deposits the bank has. All the banking stocks are available at a low price now after their stocks started falling continuously in the last one week.

Inflation as low as 3.03%

Inflation reached an 7 year low today to reach 3%. However, this had little affect on the share market which seems to be reaching new lows everyday. Today, it dropped another 250 points to reach 8150. Though it may recover in another couple of trade left in the day but it seems like investors have lost the faith in Indian companies.

This can also be seen in the value of the rupee. Rupee also reached an all time low of Rs.52 per dollar this week. This is even after RBI dropped key interest rates by 50 basis points.

This may be a good time for investors but they would be advised to invest in a staggered manner. My strategy would be to wait for the day when it would raise for a single day atleast before I start investing cause the market is decreasing everyday by a huge amount in a consistent manner.

stocks to pick 4th March

The stock market is at an all time low and is also expected since the election time is back again. Day by day the stocks are available at a cheaper price. So it would be better to wait for a day for the stocks to raise before buying it. Election dates are announced and it will be conducted during the time of april and may. 5 phase elections is to be conducted.

This is a good time for the investors to invest in stocks as they are available at a very good price. Some of the stocks are even available at PE ratio of less than 2 which is a good pick at this point of time. Ofcourse, you need to check if that company is going to survive the next few months or not.

Here are my list of hot stocks

SBI
RNRL
L&T
TATASTL

RPL RIL merger swap ratio

Mukesh Ambani's reliance has now announced the swap ratio for the merger of RPL and RIL. Swap ratio would be 1 share of RIL to be equivalent to 16 shares of RPL.
Current prices of these shares

RPL : 76.2
RIL : 1,265.05

RPL * 16 = 1219.2

The new merger is going to be effective from 1st march

Related Posts:

RPL RIL merger analysis

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weekly newsletter 1st march

This week is the only week before the election dates are announced. So therefore you can expect the stock market to move up tremendously this week. Not because of the announcement of election but mainly because none of the political parties cannot announce any new schemes after this. So whatever has to happen it should happen this week.

So this week is going to be the best week for all the investors. You can think of making a quick buck. Almost all of the stocks are going to gain. Probably you should start buying at the start of this week and you can hold the stocks till the time elections are announced.

My picks for this week would be:-

RNRL
RIL
SBI

Related Posts:

RIL and RPL

GDP

Multibaggers

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RPL and RIL merger

Yet again, for the second time merger of RPL and RIL is on the cards. In the last board meeting amalgamation of the two companies was announced. However, the ratio in which the shares will be converted is yet to be seen.

In 2002, merger of the two companies RPL and RIL had happened. This was good for the shareholders of both the companies with RIL shareholders benefiting the most. This time as well the same is expected. Earlier RPL has started its first refinery under the name of RPL and when it became operational it got merged with RIL. Then its second refinery was being built under the name of RPL. Now its time when this refinery is about to be operational. So the merger again.

The merger couldnt have been timed any better. This merger will bring two companies together, one of which has good potential to bring in high cash flow and the other having huge reserves for the investment.

Post merger the swap ratio could be anywhere between 1 share of RIL for very 15 or 24 shares of RPL. This would prove profitable to RIL shareholders rather than RPL.

So should we buy these shares next week. Buying RIL early next week would be profitable but its better to avoid RPL.

Related Posts:

Multibaggers

Oil price cuts

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New industrial policy for karnataka

With elections in mind the Karnataka government announced a new industrial policy intending to replicate the success achieved in Gujarat.

Some of the features of the new industry policy for 2009-2014 are:-

• Rs 30,000 crore to create additional one million jobs in the industrial sector in the next five years.
• To enhance the contribution of manufacturing sector to the state Gross Domestic Product to 20 per cent by end of policy period and priority for human resources development.
  
• 1000 to 2000 acres of land would be acquired and developed in each district for establishment of industries including foreign investments.
  
• A policy would be framed to ensure better price for farmers towards the land acquired for the purpose.
  
• New airports would come up in Shimoga, Hassan, Gulbarga, Bellary, Bidar and Bijapur districts along with 11 Air strips for other districts.
  
• Investments and concessions to cover new industrial investments including expansion, modernisation and diversification in 166 taluks out of 176 taluks in the state.
  
• interest free loan against VAT payment by large and mega scale industries
• small and medium industries will be eligible for production or employment-linked investment subsidy of Rs 5 lakh to Rs 35 lakh, stamp duty exemption ranging between 75 to 100 per cent in respect of all categories of industries for purchase of approved industrial layout and also for registering their term loan documents.
• five per cent interest subsidy on term loan availed by micro enterprises and incentives and concessions to export oriented industries.
  
• A separate Special Economic Zone (SEZ) policy. The new policy, aiming to facilitate smooth establishment of such zones, will permit acquisition of lands only on the consent of the land owners. It comprised incentives for developers which among others included exemption from state taxes for all purchases exemption of electricity duty, exemption of labour welfare cess and capital subsidy for CETP.
• The Government will also develop four eight-lane roads under the Suvarna Karnataka Development Corridor Programme.
• 4,000 acres of land to Ministry of Defence for setting up of all defence related activities in Challakere taluk of Chitradurga District.

Looking at all the steps taken the state has surely addressed many concerns and one feels like the government is ready to do something for the people unlike the center which only boasted about how it ruled for the last five years in the last budget.

Related Posts:

Oil rate cuts

solution to economic slump

GDP

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GDP growth falls to 5.3%

The overall gdp growth has now fallen down to 5.3%. This is purely an impact of the global slowdown that has effected the country's gdp as well. All the industries related to service are affected very badly by this.

The RBI should now take immediate action. Reduction in the intrest rates is likely. Both the repo and the revere repo rate should be reduced by atleast 50 basis for more cash flow in the market.

The agriculture and manufacturing sector is not impacted as much as the service industry and is contributing close to one third of the GDP. However, the service sector of the country is in a bad shape and is in need of some steps to revive it.

Related Posts:

New Industrial policy

oil rate cuts

You can expect many more such measures in the coming few weeks.

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solution to avoid economic slump

In the last week Obama has introduced new measures and even indicated that he is completely against outsourcing. He even warned companies against outsourcing saying that they will have to face more taxes. Obama's policies look to be more like a communist government. Anyway, all this is happening in US and why should it affect us. This is the thinking most of the people have. 60% of the software outsourcing work is done by India. So any measures like that is surely going to affect us. So if all these actions are being taken by US should India keep quiet. No, but is anybody listening. In India, all the politicians seem to be in the election mode. All they have done till date is to fill up their pockets with money.

So is there a solution to get out of all this. Of course, every problem has a solution. Today you have seen rupee hit a new low even breaching the 50 rupee per dollar mark. The first thing that everyone in the county should do is to encourage buying of Indian products. Please avoid buying any foreign product. Indian market is the second largest market in the entire world. Yet, if you see any general stores in the market you will find 70% of the products are foreign goods.

The government should have immediately increase the import duty on all foreign products. This would immediately bring down the sales of foreign products and Indian companies would come out of the situation that they are facing today. The fiscal deficit that India is facing today will also be avoided with this step. This would be a fitting reply to Obama's stand against outsourcing.

Anyway, you cant expect the government to take any action. So lets all take a pledge to avoid foreign products from today.

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buyers of satyam ?

satyam is going to be sold in a short time. So who is going to buy it. There are many names doing rounds but the biggest strong contender for it is L&T.

The construction gaint already has 12 percent stake in this company and is willing to invest more into it. At this time of global downturn its only companies that have huge reserve capital which can think about buying the company.L&T has expressed it many times that they would be interested in buying if the company is sold to them quickly as the customers are withdrawing projects and the employees getting eroded. Satyam is expected to complement the L&T infotech and hence its showing so much interest. However, for how long it is interested in the same needs to be seen.

The other contender is Spice. Modi has expressed that he has interest in buying this firm and even asking for online bidding. This is seen as a diversification of investments by spice which wants to move from being involved only in telecom sector. He is also said that he would take all the liabilites of the company along it. This shows how keen he is on taking the control of the company.

Tech mahindra also has shown interest in this. Deepak pariekh one of the board members of satyam is also heading the mahindra and mahindra. So he could influence the decisions of the company. It may or may not enter into the buyout plan.

Related Posts:

Satyam stocks

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stock market strategy

Today is the holiday for the stock market on account of shivaratri. Probably this is a good time for us to define our stock market strategy for the year. The economic slowdown that is going on has affected all the countries. Slowly in the last few months this has strated affecting the indian industries as well, as was predicted by the stock market. Signs of layoffs in MNC's have started emerging in India as well. Not only exports but now it has started affecting all industries. So at this time should we invest in stock markets. The markets doesnt look good for the next 8-9 months. Investing at this time is a big risk. There are more chances to lose money than getting profit.

Anyway presently the sectors Pharma and FMCG products seems to be good sectors to invest in. However you may not see upward trend in these sectors but it may not be much affected during a recession. i.e. value of these stocks may not see a downward trend like the other sectors, mainly because consumption of these products wont decrease. FMCG includes dialy used products like toothpaste, milk, soaps etc. Also the pharma sector forms the important necessities which nobody can avoid. These sectors look good to me only in the sense that the value of this may not be eroded like the companies in the other sectors.

inflation less than 4%

Inflation recorded has come down lesser than 4%. This is after a very long time that the inflation has come down so low. In fact the inflation rates had reached double figures at even stayed at that for a long time over the last one year. This is the precise reason that the inflation figures even if this is considered very low is not going to affect much.

There was a time when the inflation figures used to affect the stock market greatly and everyone used to wait for the inflation to be announced. This is not the case now.

Now, even if the inflation goes negative its going to have little impact. Only if it sustains negative levels over a few weeks will it have some impact on the stock market and economy.

However these figures are surely going to get some attention of RBI. Even though the government many not take any more significant actions, you can expect RBI to come up with some measures soon.

Basics of the stock market

There are three modes of buying or selling of stocks.

Margin: These are intraday trading of shares. You can either buy the shares first and then sell the same amount of shares or vice versa. This means that at any point of time if the stock market is not flat (no movement) you can earn money if you make the correct decision.

In case you only buy the stock during the normal working hours and dont sell the stock or vice versa then the stock broker would trade the same in the last half hour of trading on your behalf, since you have taken the stock saying you would dispose the stock at the end of the same day.

You can also change the mode of buying the stock from margin to delivery after you buy the shares before the end of the day. This is called conversion to delivery.

The facility of selling the stock first and then buying the same is called short selling. i.e. selling when you are short of those shares.

Delivery: This is the normal mode of trading. Delivery means the share will be bought and converted to demat form. You can sell the share after you get the share in its demat form. Although for the aquiring the share in the demat form takes about 2 days. During this time if you want to sell it then you have use ATST option. On the same day or after you get the share in the demat form you can use delivery to sell it.

ATST / BTST (Aquire/Buy today sell tomorrow): As mentioned earlier actually getting the shares takes 2 days. If you want to sell the share before you get the share in the demat form then you can use this option.

The broker charges for intraday (Margin) would be very less while compared to delivery.

Related Posts:

Market Quotes

Learning about stocks

Key terms

key terms used in the stock market

EPS is Earnings per Share, it is the earnings of a company divided by the total number of shares. This is calculated every three months and hence for that period EPS remains the same.

PE ratio is the ratio of the market to earnings per share or simply put
PE of a company = Market price / Earnings per share (EPS)

So why are these terms important. These determine the performance of the company and hence are very important parameters you should look at while buying a share.

In case the PE ratio is very high say 100 then it means that the market is ready to buy the share at 100 times more than its current price. (meaning it has huge expectations by the market).

So should anyone buy stocks with very high PE ratio. This purely depends on the individual company. Does the company have enough in it to sustain such huge expectation.

Similarly, are the companies that have very low PE ratio are a good buy? Here again you should check the reason why the market sentiment is very bad about the company. Anywhere between 5-20 PE ration is a decent ratio

Related Posts:

Basics of the stock market

Learning to buy/sell stocks

satyam

Satyam has been cleared and now an offer for sale would be made soon. There are already a few parties like L&T, spice and the hinduja group eyeing for it. When the actual sale of the company is done we may witness a few more companies and some surprise entries going for the bid.

So what is there for the investors. Is this the right time to invest in this stock. Probably yes. Over the last few days we have seen the price of this stock falling, but this wont be for long. However investing on this stock is a risk. Many companies would be intrested in buying this company purely because its valuations have decreased greatly in a couple of months. Finally at what price does the other company buys satyam is what we have to look at. Since the stock has been trading at an average price of 40 over the last few months the bidding for this company would start at this level.

However, I doubt if the company would be sold off anytime soon. This means, it would be better to look at other stocks rather than park your funds with this share. Instead if the offer for the same of the company is made anytime soon you may end up getting very good returns. So would go for it or not ...?

gold prices breach 15k

The marriage season in India is gone, yet the gold breaches the 15000 mark. These are the record high prices. The prices seem to be only speculative without much transactions taking place in the country. With the stock market crashing along with the global recession gold provides a safe haven for all the investors all over the world. Its good for the people who are ready to sell the yellow metal, possibly the best time.

2009 Multibaggers

My picks for the potential Multibaggers for this year 2009 are:-

• Reliance Natural Resources Limited (43.55)- The price is very less since the operations of this company is yet to begin. However since this is a stock from reliance there are lot of expectation from this.
• Reliance Petroleum Limited (78.2)- The petroleum unit of Mukesh is doing well. However the price crude oil has decreased so I would prefer RNRL over this.
• Tata Steel (168.5)- Comes from the group of tata's and the best in steel industry.
  
• KS Oils (46.15)- This has great potential. Also mentioned by money control as one of the potential multibaggers.
• Arvind Mills (13.98)- The one stock that I beleive in the textile industry. The price of this stock has gone very low and my pick in this industry.
• Moser Baer (53.8)- Recently has diversified into the solar cell manufacturing. The indian subsidiary is doing very well.
• Unitech (28.05)- One among the Real estate industry which has been battered a lot in the last few months.
• DLF (155.05)- The pick of the real estate sector.
• Power Grid (86.15)- My pick in the energy industry.
• Suzlon (41.35)- another in energy because the value of this stock decreased greatly for no proper reason.

With many people requesting the value of the stocks to be posted along with the stocks, I have updated the same above as on 20th-feb. I will be revisiting this post after an year.

stock market strategy

The criteria for selecting these stocks to accumulate (aimed at long term investers) in the coming months are:-

The value of the stocks has come down to a large extent in the last one year.
The intrinsic value of the company hasn't come down much but is affected by the economy.
The company has sound capital and wont shut down under any circumstances.

With this criteria the stocks that are my favorite are:-

• Tata Steel :- Comes from the group of tatas, and the entire steel industry is affected by the slowdown of the economy. The price has come down from 1000 last year to 170 now. Probably the best time to accumulate.
• LNT :- The value of this stock has come down drastically from over 3000 to just above 600 now. The fundamentals of the stock are very good.
• Arvind Mills :- One from the textile industy which has been affected greatly by the current situation.
• RNRL :- Probably this shouldnt have been included in this list, since it hasnt started its operations yet but this stock comes from reliance so is bound to give you good returns soon.

Always remember the golden rule. Be greedy when everyone is selfish and be selfish when everyone is greedy. Thats the reason why you see stocks from real estate, steel and textile industries listed when almost everyone is running away from it now.

Stock market investment strategies - Stocks to make money instantly

In the stock market there are many ways to make money instantly. The most important ones are intraday trading and trading on futures and options. As expected  they are both easy way to make money and equally easy way to lose money as well. However, if you want to cut out the risks you can try some of the shares mentioned below.

• MMTC - the volume is very low
• Spice communication - too much manipulation happening now
• Satyam - Running on speculation

These shares are very volatile and can give good returns in short time but bear the risk of bringing you huge losses as well.

stocks to accumulate in coming months

In the previous post I had talked about this time being the best time to invest in shares. Elections are due in a couple of months and this would surely have an impact on the stock market. Since there will no government action during the election time and slowdown looming large on the world market this would probably be the worst time for the stocks.

All private sector companies will have to strive hard to stay in the competetion. Recent times look like its best to invest in public sector companies even though the private sector companies will probably be at their all time lows.

My pick for the coming months would be SBI, RIL, RNRL, LNT.

future of the stock market....

Stock market this week may be going down. The US budget didnt have much effect on its market. The same way the budget announced by Pranab mukargee didnt have any effect on the indian stock exchange.

Without any other events expected in the next few days, you may see the stock market go down for the next few days. We need to wait for some event for the market to go up, and this seems to be unlikely. Elections are coming up soon and todays budget was the last for the present government, so any changes now is very unlikely. You may expect the bank intrest rates, etc to come down a little before the elections could start but that may not effect the stock markets.

The election times will be a good opportunity for the investors to invest since this is the time when the stocks will be battered the most. Although this might be a risk, in case there is no coalition government coming up but I feel its worth the risk. Absolute majority for any party is almost impossible. So lets wait and see the action (elections) and how it affects the stock market. Enjoy...

stimulus budget?

When everybody expected a third version of a stimulus budget due to the worldwide slowdown our FM came up with a budget mainly aimed at elections (or did it acheive even that). The budget was purely a report card for the last five years... oops sorry first 3 years of its rule, it successfully ignore the last 2 years of its rule when the slowdown occured. Pranab, who is presenting the budget after almost 25 years was expected to come up with something for everyone, but it just proved to be another election campain.
Almost immediately the stock market reacted. Due to elections coming up very soon everybody expected some sort of tax releif atleast. But it looks like for the UPA aam aadmi means the agricultrists. They dont care about the people living in the cities who produce the maximum revenue for the government. I am not against the farmers but something should have been announced to curtail the slowdown of the economy.

Interim budget

This is the third budget in the last few months with the world hit by a slowdown. This is the last stimulus budget before the elections. So what to expect from it. The previous two budgets are an indication of it. This one since it is the last one before elections maybe the best in terms of tax exemptions etc. Anyway the expections are very high and it doubtful if it will live upto it.

Anyway, the share market is down as I had mentioned yesterday in my blog. Even after the budget is announced it is doubtful if it will come up. Anyway good luck.

Top tax saving funds

This is that time of the year when you will look at investments. I prefer ELSS mutual fund tax saving investments while compared to others like insurance. It gives better returns ofcourse this has not been the case who invested in the last few years.

All the tax saving funds needs to be continues for more than 3 years. Expecting that the recession hit stock market will recover before that time, I feel its a good time to invest in ELSS tax saving funds.

So while investing in these funds better go for the funds that have been performing well for a long time. While considering this criteiria of proven records the ones the funds that come to my mind are :-

1. SBI magnum fund
2. Birla sun life tax saver 96
3. sundaram tax saver

We need to consider proven records while investing in any mutual fund because you are going to hand over your money to be managed by a fund manager who needs to have a good record. If he is new to this field then its a big risk you will be taking. Not worth it...

Another advise I would like to give is that while investing in mutual funds dont bother to look at NAV's because that hardly matters. After you invest all that matter is by what percentage the funds go up or down. Since the percentage is what matters your money in either funds doesnt hardly make any difference

How market will behave today

Tomorrow the market is expected to fall. For the last one week it has been good and the market was on a upswing. But it has never been the case that market been good for more than a week in recent times. So if possible make some profit booking on monday early morning, before it goes down. Anyway this is just my prediction, have to see whether it actually does work or not ;)