We were hearing people planning to retire by 50....no no 40.....or still less, but do they still hope to achieve it??
The melt down in the stock market which has made the blue chip stocks look like penny stocks has reduced savings for lot of investors.
We all know that in the longer term equity outperforms all investment class so it would be wise to continue your investment plans.....Reduced level of stock market gives a an opportunity to buy good stocks at throw away prices.
Instead of being greedy and buying lot of stocks at one go we and see get its value reduced by 10% we can buy regularly in small quantities...
Regular and disciplined investment will still give u the chance to achieve your financial freedom.....
Below 10K people are talking about going a lot down to find the bottom when price will stop falling and probably stop rising too and just hanging in there for sometime. I think now the Indian stock market warrants long term investments...
Downgrade in earnings are already covered in the fall in PEs and most of the bad news is factored... After the panic subsides and rationality comes back we will again see happy days...
Friday, October 17, 2008
Retirement Postponed!!
Why do we need stock market......
WHO, WHAT, WHY?
The BBC Magazine answers...follow the link....
http://news.bbc.co.uk/2/hi/uk_news/magazine/7672274.stm
FII Lending Data
FII Lending Data by Sebi released today...
HDFC Bank: 2.5 lakh shares
HDIL: 12.66 lakh shares
Hero Honda: 3.98 lakh shares
HUL: 7.85 lakh shares
ICICI Bank: 2.68 lakh shares
ITC: 22.91 lakh shares
L&T: 8.21 lakh shares
NTPC: 5.49 lakh shares
Punj Lloyd: 3.44 lakh shares
Rel Comm: 1.31 lakh shares
RIL: 1.21 lakh shares
RPL: 3.26 lakh shares
SAIL: 3.99 lakh shares
Tata Steel: 3.25 lakh shares
Axis Bank: 1.39 lakh shares
BHEL: 1.05 lakh shares
HDFC: 400 shares
Infosys: 38,611 shares
Thursday, October 16, 2008
Good Riddance
Good Riddance - Time of your life
"Time grabs you by the wrist, directs you where to go
So make the best of this test, and don't ask why
It's not a question, but a lesson learned in time"
Recent turmoil in the equity market has given us lot of valuable lessons though at a heavy price ;-)
Unpredictability , irrationality , greed are all part of this market.....Time and Price correction were both required..
Its very important to find the right value for everything then only we can identify whether it is cheap of expensive...
Earlier we were buying not because it is cheap ( stock might be horribly expensive) but is still going to rise more.....targets were set and nobody wants to miss out the joy ride.....
now all this seems to be a dizzying rollercoaster.......
Be patient and don't sell it at a loss, for long term investor some more downside should not be a dampner. Recession or slowdown from now on slowly and steadily we can start putting small amount of money in the markets.
Remember 50% downside will bring 100% profits
90% downside will bring 1000% if the stocks are retraced to their original levels...
Many stocks are already beaten down 80-90% and they don't have much to loose......
Finally...
It's something unpredictable, but in the end it's right.
I hope you had the time of your life.
Timing Matters in Stock Market
A very good article by Arun the stock guru
Timing is everything for investors
Go and enjoy reading it....Sunday, October 5, 2008
Rolta India - Stock Coverage
In current turmoil in stock market and not so good outlook for Indian IT industry which sources its revenue mainly from US and somewhat from Europe, the IT stocks are out of flavor. nearly 40% of the revenue comes from BFSI segment which has collapsed.
One stock which stands apart is Rolta India. It is a market leader in providing specialized IT-based solutions toe the geospatial and engineering sectors.Rolta has broadened its engagement and geographic footprint with strategic joint ventures with Stone & Webster and Thales.
It has a near monopoly in the verticals it is playing.
* 70% share of Indian GIS market
* 90% share of Indian EDA market
* 95% share of Indian Defence GeoSpatial market
Rolta provides a full complement of specialized services in the following areas:
Information security, software packaging and testing, ERP consulting and integrated CAD/CAM /GIS services
Animation,modelling, programming, interactive media. and game design solutions
Fully integrated C4ISTAR for armed forces
Global leader in IT-based Geospatial, Engineering Design and information security and defence solution
End-to end geospatial and photogrammetry solutions for diverse applications and industries
Engineering design and automation solution for the energy, ship building and industrial segments
I don't want to give a target price for this stock nor I have a right price for you to enter because I cannot judge the bottom of stocks in current scenario. Logic doesn't follow in fearful market. But if someone wants to be in the IT world in a niche segment which is growing they can take an exposure to this stock.
Rolta India can also benefit from the nuclear deal signed by India. It is aiming to provide engineering design and automation solutions to EPC players. L&T and BHEL are already its clients who are eyeing a huge pie in the nuclear business oppurtunities.
source : rolta india website, hindu business line
Interbank Rate
What is Interbank Rate?
It is the interest charged by one bank to other bank for short term loans. This interest rate is regularly fluctuating based on money availability, demand, current rates, time horizon and other terms.
There are some standard bank rates used as a reference by different banks and other interested parties in the economy.
Eg: LIBOR (London Interbank Offered Rate) , MIBOR (Mumbai interbank offer rate). Indian Banking Association(IBA) has pushed for it to the RBI.
Benchmark rate they say helps eliminate the fuzziness in loan and deposit pricing and usher in more transparency in the entire system.[source : Rupee time]
Why do bank need to borrow when they are themselves lenders?
Banks need to borrow to manage liquidity and meeting various statutory requirements placed by the RBI or other federal agencies.
Banks are required to keep some amount of liquid capital or asset to fulfill the withdrawal requirements of the customers. This is a fixed percentage of the total assets. If their is a temporary shortfall banks need to borrow to meet the liquidity requirements.
The lender bank earns interest on the excess assets lent.
Time to turn the tables?
Indian stock markets are in turmoil, thanks to current situation in the west with US,European Union and Japan facing recession.
Indian markets are classified as emerging markets and hence considered risky!! But are they riskier than the markets(considered developed) where capital is fleeing? Is US treasury bonds more attractive than our desi G-Secs?
We have for long depended on US and Europe for our growth. They grow, they consume so we grow. They provide capital for growth.
Do we need their capital or they need ours truely :) Household savings have increased and domestic market can be kept stable by local consumer demand and huge capital spends on infrastructure. Indian companies are buying abroad creating job oppurtunities or atleast saving the existing jobs abroad. They are providing cash to sick units and turning them around.
Now its time that we provide the support and stabilizing effect to the world finance. Foreign investors, instead of exiting can think this as oppurtunity here. We need to strengthen our markets from fickle incoming/outgoing capital.
In this globalized economy we can find succor locally in our less leveraged economy.
Friday, August 15, 2008
Future Growth Areas - Indian Stocks
Short term Outlook for India is bad as for as annual returns are concerned. Inflation is sky high , growth is slowing down , interest has started inching upwards giving pinch to consumers in every price band.
Currently inflation is 6-7% higher than last year and 2-3 times higher than cushion level of R.B.I.
Though the cyclic up-downs will continue to happen, promising themes will keep emerging which will provide huge growth and fuel Indian Economy.
Following themes can emerge as winners.
1. Aviation/Defence -
Indian Military yesterdat got its first Hawk (AJT) built by HAL . Technology transfers and localization promises a lot for Indian Manufacture. This will help us developing Defence Aviation industry. Component Manufactures will gain immensely. New bidding process require that the supplier honour a 50% offset clause, or source 50% of the components required to complete the order, by value, from domestic manufacturers.
Indian companies have to build capacity to absorb such huge offset work which would be coming to them.
Larsen and Toubro Ltd (L&T) which is India's largest Capital Goods and Infrastructure firm plans to bid for the order to the company winning the MMRCA(medium multi-role combat aircraft) contract of about 10 billion dollars.
The MMRCA deal involves buying 18 aircraft from the seller and manufacturing 108 under licence by 2012.
2. Energy and Power
India has a huge power deficit and demand for power is going to grow substantially. Many power projects are going to come up to scale up the supply. UMPP has been introduced through Electricity Act 2003.
Gas and Oil Finds in East Coast would provide much relief to energy hungry country benefiting fertilizer,power and other industries. It will also help reduce forex outflow.
3. Infrastructure
This theme is being played for last 2-3 years and will continue for some more years. If India has to grow it has to build huge infrastructure in every field - roads, ports, airports, power, oil/gas, housing, malls etc.
4. Nuclear Power
Power generation, equipment and capital goods manufacturers are very optimistic of Indo nuclear civilian deal.
They are hoping that components for the new nuclear deal will be manufacture locally and initially by serving foreign nuclear manufacturer, they will become supplier and become part of the supply chain eventually.
Saturday, May 31, 2008
Oil Marketing Companies
Price Hike!! Price Hike!! Price Hike!!
No decision yet taken by the government readying itself for upcoming elections. These companies have already taken huge losses.
We have seen strength in these companies last 1-2 weeks in hope of price hike.
I wonder how much these companies can gain given the fact that hike will only reduce their losses but not make them profitable. Gods knowns what will happen to already incurred loss.
Oils bonds are helping them partially but thats a sad story for common man because these bonds are just postponing the disaster.
Banking Space
Banking stocks are coming under hammer for quite a few days.
Sbi and ICICI are touching new lows everyday. With inflation soaring high and oil price on the anvil its a difficult phase for them.
With liquidity crunch, high interest rate , low credit offtake coupled with slowing economy banks are facing moderation in their earnings.
We have to wait and watch , and enter the stock at right time.
Larsen & Toubro
L&T gave the robust fourth quarter results with net up 38%. It has also announced a bonus of 1:1 . This is the second one in 2 years.
It has moved up sharply for last 2 days. Hope it helps in reviving the sentiments in the capital goods space.
Apart from the diverse operations, it is now eyeing JV with Indian Railways.
Last month it hived off RMC business stating it as non - core and made a cool profit.
Mark to Market loss is partially recovered and hope to square off soon.
Saturday, March 1, 2008
After long time
Sorry for not posting anything for a very long time. Truly I was really busy with my office work.
Hope to get sometime to devote here :-)
Budget is out and congrats everyone who has benefited from the tax exemptions. People in IT industry gearing up for lower salary hikes can get a little cushion from this exemption.
Short Term Capital gains tax has increased from 10 to 15%. Hope this helps in people investing for a longer time to avoid this tax.
But I doubt this will happen because of human tendency of earning faster without patience.
In current scenario that might happen because people are just holding on to recover their losses and not sell stocks at loss.
Most of you would have done your tax savings for this year.
Markets are volatile for past 1 month and half. Instead of avoiding the stock market completely people should continue investing in smaller amount and build a good portfolio for 2-3 years time frame.
Lot of stocks are available at attractive valuations.
Do you homework and be on track of your financial planning.
Happy Investing :-)
Sunday, February 10, 2008
Cement and Steel Sector
Cement and Steel Sector
Both these sectors can outperform index in 2008.
Companies having backward integration with raw materials in Steel industry are set to benefit .
Steel prices are rising and will rise more in 2008. Raw material prices are also on the rise.
Biggest consumer China has also seen production cost go up significantly.
Indian Steel demand is robust and focus on infrastructure will keep it that way.
Gujrat NRE coke,sesa goa, Tata steel looks good in this sector.
Cement sector is going in for huge expansion to cope up with the demand, but the new capacities will start coming in from first quarter of FY09. Demand and price realization will remain firm in these scenarios. Some government has tried to curb the price rise in cement saying they will import cheap cement from outside. But cement prices are high across asia and so poses no immediate threat to local cement makers.
Till the monsoon kicks in around june-july. These 2 quarters can see huge construction activity.
India Cements, Grasim Industries , Shree Cements looks good if one want to enter this sector.
Wednesday, February 6, 2008
Value Buying in GE Shipping
Through mail from Abhay.
CMP 437
P/E 5.17
Market cap 6654.37
MarketCap/Sales 2.20
Financials for last 12 months( Jan 07 to Dec 07)
Net Sales 3012.13(2186.31) Up by 37.74%
Net profit 1298.31(825.91) Up by 57.19%
EPS 84.86(54.24) Up by 56.45%
Other players in this segment with their net sales for FY07 (i didn't calculate last 12 months sales for all) & their P/E
Company NetSales NetProfit MarketCap current P/E
ABG Shipyard 704.36 116.29 3717.29 25.06
Essar shipping 1024.30 134.04 10,227.98 60.45
GE Shipping 1990.6 883.31 6646 5.12
Shipping corp 3703.44 1014.58 6405.44 7.54
Among these companies only ABG shipyard is growing at faster rate but on smaller base & has P/E of 25.06 almost 5 times that of GE. Shipping corp also looks cheap but growth has been slow compared to its peers.
MarketCap/Sales ratio of 2.2 & P/E of 5.12 with potential growth of 50% plus makes it very cheap.
Also after the fall in stock price in January it has shown momentum back from 330 levels.
Tuesday, February 5, 2008
Stock News
Jindal Saw bags Cairn Energy order worth $200m for pipes
Jindal Saw gets Rs 200 crore power project contract
After saw pipes Jindal saw betting on infrastructure for growth.
Punj Lloyd tripped for past few days after heavy unwinding of position by a big broker.Stock to rise soon.
GMR Infra
GMR Group’s Vemagiri power plant will become operational this month.
Hyderabad Airport to be operational by March 08: GMR
Stock will retest it previous highs in 2-3 months.
Chattisgarh to become powe hub of the country. With 40 power plants planned with investment commitment worth Rs 1,58,000 crore. This will help add 39,500 mw in next 8 years.
Saturday, February 2, 2008
Lessons learned
Current market turmoil as given lot of lesson to the investors new to the market.
People who were used to get returns just by investing blindly in the market past year have burnt their fingers recently.
Now people should stick to stocks which are fundamentally strong and should stay away from momentum stocks.
Fundamentally strong company can loose a little value in this kind of blood bath but they still retain their inherent value and will have premium in good markets.
We now have huge interest rate differential with US which is around 4.75%. We have to see its impact on capital inflow, dollar depreciation , industries affected, inflation because of inflows and RBI moves because of all these events.
Status quo by RBI recently has not been favorably received by most of the industry.
Indian stock market is at attractive levels now and should do well in coming years based on the growth estimates. Investors have to settle for lesser returns from past years but still it will be better than the traditional saving instruments.
The most important lesson which I have learnt is we always need to keep certain amount of cash aside. When market falls money not invested retains it value and gives you huge leverage when you can buy stocks when they are available at throw away prices.
If you are always 100% invested with all the money you have then when market falls you don't have dough/capital to use the opportunity knocking your door.
It can make huge difference if you buy in the depressed market condition.Though everyone is panicking , if you can hold your sentiments and invest wisely you can gain immensely.
1. Keep at least 15% of liquid cash to cash in on the market opportunities.
2. Buy and increase your holding in value stocks.
3. Always book profit in momentum stocks when market peaks and show sign of weakness.
4. Don't play on margins when market is in turmoil.
5. Don't over leverage.
6. Play only on cash. Don't risk more than you can afford.
7. Buy tax saving instruments when markets are on high and you don't have any alternative. Don't wait for January or February.
8. Buy equity when markets are at there lows.
9. Don't gamble play informed.
10. Don't panic and never loose. Don't convert winning stock into a loosing one.
Tuesday, January 29, 2008
Bottom fishing in MFs
In the recent market turmoil MFs have not been spared. In absence of FIIs buying, MFs and local institution has tried their bit.
Funds who were top performer for past few years have taken quite a beating. Most of them are some where close to 15-20%.
Here is the list of few funds for your shopping list. If you missed the train earlier here is the chance to catch it from long term perspective.
| MF NAVs | 52-wk | Current | % Change |
| Rel NRI Eq | 40.1 | 33.8 | -15.7107 |
| Kotak Opp | 56.3 | 48.09 | -14.5826 |
| DSP ML Tiger | 62.4 | 52.38 | -16.0577 |
| Rel Growth | 491 | 401.79 | -18.169 |
| ING Dom Opp | 44.9 | 38.24 | -14.833 |
| UTI Infra | 50.7 | 42.8 | -15.5819 |
| Sundaram Mid | 155.4 | 125.38 | -19.3179 |
| Magnum Contra | 64 | 53.63 | -16.2031 |
| Magnum Global | 70.4 | 57.52 | -18.2955 |
| JM Basic | 40.8 | 34.08 | -16.4706 |
| JM Emerging | 20.7 | 16.93 | -18.2126 |
| Rel Diver | 87.7 | 74.84 | -14.6636 |
Thursday, January 24, 2008
Heard on the Street
I am BULLISH!
I am BULLISH!
I am BULLISH!!!
I am BULLISH!!!!!!
I am BULLISH!!!!!!!!!!!!
But Still a word of Caution Came from Some Informed Circles still Believe that the Market can test the 15k level in next 15 days....
BHEL and L&T news snippet
Just In - BHEL bags order of Rs 2500 cr for Tamil Nadu power plant.
Equipment major Bharat Heavy Electricals Ltd (BHEL) on Tuesday said it has bagged a Rs 866-crore order from Reliance Industries for setting up a 345-MW captive power plant in Maharashtra.
This is the first commercial order on BHEL for an ‘advanced-class Frame 9FA’ gas turbine and will open up a new line of business for the company.
BHEL is currently quoting at 2148
L&T has bagged order worth Rs 1,057 crore in Middle East.
L&T may form a JV with US arms major Lockheed Martin to develop Mark 41 Vertical Launching Systems in India.
L&T gets Bhel-like privileges, may power super-critical drive.Private sector engineering major L&T is being officially promoted as the Bhel-II
L&T is currently quoting at 3751
Wednesday, January 23, 2008
Keep Calm
Are you still feeling jitters?? I think we should stay calm and do not panic. If you are in market for a long term then what happened currently is mostly notional loss from notional profits. Panic can make you take decisions which you might not otherwise. If you are staring at your losses then don't worry everyone else has lost too....
You are not alone and misery likes company.....
If you were trading on margins or were in derivatives trade. I must say beware and hold your hands for sometime till the market rationalize because as we have the famous saying....
Yes I didn't post anything for past 2 days and that was purposeful. I don't think anyone was interested in hearing any gyan :-) and even I was confused what to write :D
The stocks which everyone was recommending when indexes were at 21000( and I am talking about pure fundamental stocks and not the momentum plays...) still remains a good buy.
Yes there will be some moderation in gains but there will be gains. Fundamentally nothing has changed.
India is growing and it will be reflected in the companies which are working to make that happen.
Various central banks are coming out to help the markets. Fed has already cut rate by 75bps.
I am no one to advice but I think sticking with frontline large caps will be best bet.
And as a closing statement I would like to quote Mr Warren Buffet who says
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years"
If you think for few minutes you would certain find few gems in the market which falls into that category.
Sunday, January 20, 2008
Mutual Fund Investment Options
In the previous article we discussed about the basics of mutual fund and the types of mutual fund available.
Here we will discuss about the investment options available while buying a particular mutual funds.
Once you have decided on which fund to buy, you may have the option to choose between the following options
- Growth
- Dividend
- Dividend Reinvestment.
Sometimes people ignore the importance of choosing right kind of option and choose arbitrarily any one of them.
So now question comes as to which options is best to invest in...Frankly there is no fixed answer. Because choosing the correct option is based on the individual needs and also on the prevailing tax laws in the country.
Growth Option -Under this option no dividend is declared and your investment change according to the change in NAV. You will be taxed on the gain based on when you sell your units. If you sell your units after 1 year no tax is cut. Otherwise you have to pay short term capital gains tax.
Dividend Option- Under this option fund sometime declare dividend when they have surplus money.
This dividend is totally tax free whether given after 1 year or within 1 year. So returns on your investment within 1 year also becomes totally tax free. When dividend is provided NAV of the fund falls in equivalent amount.
Since there is regular payout, it can be considered as regular profit booking to reduce impact of market fluctuations.
Dividend Reinvestment Option - Tax free dividend declared by the fund is reinvested in the same fund or different fund of same AMC on a particular day set. Timing of the market may not be always favorable.
Current Scenario ..
-->Debt Funds currently attracts Dividend Distribution tax and Equity Funds are exempted currently.
-->Long term capital gain(Sale after 1 year) is fully exempted for growth schemes.
-->Short term capital gain is taxed.
--> Currently in absence of dividend distribution tax on equity-based funds and no long-term capital gains tax, there is absolutely no difference between the Growth option and the Dividend Reinvestment option
Impact of Tax Changes ...
--> If dividend distribution tax is reintroduced then growth option would be better than dividend reinvestment.
--> If Long term capital gain tax is introduced then dividend reinvestment would prove better than growth option.
Hope after reading this you will have better understanding of which option to choose according to your needs and prevailing tax laws.
This article was part II of the previous article posted on mutual fund...Read previous article here....
To know more in details about these options read the following 2 articles which explains in detail about these options.
Growth or Dividend - How to make the right choice?
Dividend Reinvestment v/s Growth – Let your taxes decide
Popular Articles
Driving through the maze of the blog can be sometime tiring and frustrating. I am trying to put few articles which are popular in last few days so that visitors can get the collection of good post on their finger tip.
Here I present in the tabular form of the popular post which I would be updating regularly.
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Mutual Funds Demystified...
A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income.
The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.
[source: wikipedia]
Mutual Funds come in various hues and colors. They can be catorized on various basis.
Mutual Funds can be categorized by their structure.
- Open Ended
- Closed Ended
- Interval
They can be categorized by their investment objective.
- Equity Scheme
- Debt Schemes
- Growth Scheme
- Balanced Scheme
- Income Scheme
- Money Market Scheme
- Tax-Saving Scheme
- Sectoral(Industry Specific) or Thematic Scheme
- Index Scheme
- and so on to list a few.......
and they can also be categorized into investment options
- Growth
- Bonus
- Dividend
- Dividend Reinvestment
-----------------------------------------------------------------------------------------------------------
1. By Structure
Open Ended Scheme doesn't have a fixed maturity and are available for sale and repurchase on any business day. These schemes are highly liquid and have become very popular.
Closed Ended Schemes comes with a fixed maturity period and are launched with an Initial Pulbic Offer(or New Fund Offer), Investor can buy and sell once they are listed.
Closed-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme.
Interval Schemes are combination of open and closed schemes, they can be traded or might be open for sale or repurchase.
---------------------------------------------------------------------------------------------------------
So now we can discuss the schemes with their
2. Investment objectives
Equity Schemes are also known as growth schemes and aims to provide capital appreciation over a period of time. These schemes invest majority of their funds in Equity and small portion in debt or money market instruments. These schemes are not for investor seeking regular income.
They are ideal for investors who have a long-term investment horizon.
Balanced Schemes are for the investor seeking both income and moderate growth. They invest both in shares and fixed income securities. They regularly distribute part of their income and capital gains. They are safe from huge market fluctuation because part money is invested in fixed income, so when market rise they don't rise as much, but when market fall it protects you from steep fall.
Tax Saving Schemes also known ELSS ( Equity Linked Saving Schemes) comes with a lock in period of 3 years where units purchased cannot be assigned / transferred/ pledged / redeemed / switched. These schemes are promoted to encourage individuals to save and invest in equities. They offer tax rebates and are good for investor seeking tax exemption under section 88.
Sectoral or thematic funds invest in a particular sector as defined in their investment objective. They tend to outperform if the sector is showing relative growth than the overall market. But these products are also risky because they are not diversified and weightage is given on a particular sector or industry. Recently Infrastructure, power and real estate funds have become very popular.
Index Schemes are schemes which aims to provide the returns equivalent of a particular index of an exchange. Some investors are interested in getting returns equivalent of the market and not of an particular sectors.
Index schemes are some times unmanaged schemes as they don't churn their portfolio and just try to perform equivalent to the index.
Money Market Schemes are for investors who wants to park their surplus money for a short period of time. These schemes provide moderate income with safety of invested capital. These schemes invest in gilts, inter bank call money, deposit certificate, commercial papers etc...
----------------------------------------------------------------------------------------------------------------
Next we need to discuss the schemes based on investment options. This can be a bit interesting topic because investor normally spend lot of time selecting a particular fund house and then a particular scheme in it, but once they have decided on the fund, they tend to ignore the investment option or sometime it is totally arbitrary or on the whims of the agent.
So I will take up the discussion on the mutual fund investment option in the part II of this article which will be published soon.
Double Edged Sword
The current turmoil in the dalal street is attributed to various factors acting in the stock market.
- Global slowdown theory.
- FII pulling out the money.
- Liquidity crunch due to huge IPOs and oversubscription on top of it.
- Valuations over stretched, with long bull market.
Historically good month for the market "January" has not been so good this time.
Earlier RBI has allowed foreign institutional investor to short sell and now SEBI will allow all categories of investors be it FII, Local Institutional Investors, Mutual Funds,Retail to short sell.
Short sell allows price discovery of a stock. Though this is a positive move and will add to the liquidity and depth of the market, it is yet to be seen whether it will tame the irrational rise/fall in the market.
Friday, January 18, 2008
Punj Lloyd News
Pipavav Shipyard has filed DHRP with Sebi. Planning to raise 200 million dollars.
Punj Lloyd has 25% stake in Pipavav shipyard. Punj LLoyd stake valued at $450 million.
Punj LLoyd is up 2% after this news.
Punj Lloyd is our favorite stock and you can see various articles posted about it on our blog.
http://beyond-basics.blogspot.com/2007/11/stock-pic-from-engineering-infra-space.html
http://beyond-basics.blogspot.com/2007/12/punj-lloyd-research-report.html
Reliance Power IPO Subscription
Reliance Power IPO Subscribed 9 times in Retail Category by EOD 17 Jan.
Indian Entertainment and Media Sector
Entertainment and Media Sector Overview
Entertainment and Media is going through a very exicting times. With challenges it is providing huge growth oppurtunities.
New technologies are evolving and convergence is the new buzz word.
This sectory comprises of various stake holders including Films, Television, Print,radio, music,mobile,Internet,studios,gaming,
animation,advertising,IPTV, DTH,
Mobile TV,content provider(Value added service, mobile money transfer),
production and distribution, multiplexes etc,etc.....
Indian film community has recieved industry status. Estimated at 4 billion dollar by 2011.
The whole sector is growing around an average of about 20% annually with Internet advertising showing highest growth of 40%.
Increased FDI limit is also providing boost to the industry.
Convergence of various entertainment platform will require more collaboration between various stake holders. Existing players are trying to gain foothold in whole value chain.
Eg : - ADAG :- Already in film production,distribution, multiplexes, radio, internet gaming etc...
Network 18 group :- stakes in various news channel, various websites and web content provider, internet advertising, JV with jagran prakashan for print media, Yellow Pages business etc.
With so much interest and huge investment flowing in this sector will be growing more than the Indian GDP.
Some Interesting Read :-
Industry Overview
Entertainment & media sector to grow 137% by 2010 : FICCI in news
Media and Entertainment
Previous Posts on Sectoral Overview :-
Infrastructure Funds and Sector Overview
Medical Tourism in India
Seamless Pipes Global Industry Scenario
JP Hydro Out of F&O Curb
Due to unwinding of some Open Interest in JP Hydro, FnO ban have been lifted from the Underlying.
Thursday, January 17, 2008
Good News for HFCL : merger with Datacom
DataCom which has got spectrum might be merged with HFCL Infotel.
After long time HFCL was not on lower circuit. It might start its upward journey.
Check this news
Stock News
Indian Stock Market News
BHEL :- It is getting hammered severely and has gone below 2300. It is becoming more attractive on every fall. Fundamentally very good long term play.
After sigining MOU with TN govt for power projects ,Bhel has begun negotiations to set up joint ventures with state government institutions in Maharashtra, Orissa and Uttar Pradesh, which will not only generate steady orders for the firm but potentially block out emerging rivals.
Bhel keep receiving flak for delays in power projects, but it has plans for new plants which will eventually improve the capacity.
BHEL is eyeing thaw in its relationship with NTPC. They have entered into joint venture for producing capital goods and NTPC may give nod to buy super critical boilers from BHEL instead of competitive bids.
RIL :- Reliance Industries may post more than 1 billion dollars of profit with quarter. May hive of E&P division and then Reliance Retail.
GMR , Reliance Energy and total 23 bidders have bid for amritsar airport modernization project.
ADAG :- After acquiring Adlabs, 10% stake in INOX is heavily bullish on Media and Entertainment space.Reliance Entertainment has acquired 250 cinema houses in the US. The company has plans to make 25-30 films all of which will go into production this year. Zapak.com is also ADAG group company.
Thought of the Day
The safe way to double your money is to fold it over once and put it in your pocket.
Wednesday, January 16, 2008
Stocks under F&O Curb
Following scrips are under ban because they have crossed 95% market wide position. FnO Curb (banned) Data as of 17th Jan 2008
| Sr.No. | Symbol |
| 1 | ADLABSFILM |
| 2 | BINDALAGRO |
| 3 | ESSAROIL |
| 4 | GMRINFRA |
| 5 | IFCI |
| 6 | ISPATIND |
| 7 | IVRPRIME |
| 8 | JPHYDRO |
| 9 | ORCHIDCHEM |
| 10 | PARSVNATH |
| 11 | RAJESHEXPO |
| 12 | RPL |
Source NSE India.
How to make Smart use of Loans for Investing
Here is an article from Anand who regularly invest by taking loans..
His article was also published in Rediff and was top emailed article.
To provide you with different ways of investing here is the link to the article.
How to make Smart use of Loans for Investing
Feel free to appreciate, suggest, or even find a catch in the strategy if you can.
He will be happy to receive your comments.
Tuesday, January 15, 2008
Infrastructure Funds and Sector Overview
Equity markets are on high for past few years and this has woken up the mutual fund industry which was in lull.
Because of stunning stock market performance, returns on lackluster mutual funds is also glittering.
This has prompted various AMC (Asset Management company) to mop up new money through various New Fund Offers.
Sectorial Funds can outperform the market if the particular sector is of current fancy.
Same is the case with Infrastructure.
Infrastructure in general has tremendous scope for growth as our country needs huge developments in that area.
Fund houses are trying to cash in on this boom.
Following list shows various sectorial/thematic infrastructure fund from various fund houses.
Fund
AIG Infrastructure & Economic Reform Fund
Birla Infrastructure Fund
Canara Robeco Infrastructure
DBS Chola Infrastructure Fund
Escorts Infrastructure Fund
HDFC Infrastructure Fund
ICICI Prudential Infrastructure Fund
Kotak Indo World Infrastructure Fund
Lotus India Infrastructure Fund
Principal Infrastructure & Services Industries Fund
Sahara Infrastructure Fund - Fixed Pricing
SBI Magnum Infrastructure Fund - Series 1
Tata Indo-Global Infrastructure Fund
UTI Infrastructure Advantage Fund
UTI Infrastructure Fund
Investors has lot of options to choose from. He/She needs to be prudent in making choosing the right fund of his choice.
Lot of money is coming to this sector and fundamentally this is good investment.
It can give sustained growth for few years to come.
As we have discussed about the rewards from this sector, we also need to address the risk.
Risks
High growth may not be sustainable and may slowdown.
Competition is increasing because of lot of interest.
Many Indian companies are in fray with multinational joining too in the race.
Margins are under pressure because of fight to bag the project under their banner.
This poses execution risks. Bidding lowest [sometime unreasonable low] poses high implementation risk.
Stocks
GMR Infra
Punj LLoyd
JP Associate
Bhel
L&T
RIL
Few Power Generation and Utility companies.
You can check the order book, execution capability and funding ability of the company before zeroing or finalizing any particular stock.
Hope now after reading this post you will be more informed about investing/diversifying into infrastructure stocks/funds
Sunday, January 13, 2008
New F&O Products by Sebi
Sebi has launched new long term F&O products. Options would be available both on Nifty and sensex for 3 years period.
Existing 3 months options will continue and 3 new options for bi -annual period will also be available considering June/December cycle.
Sebi said that the risk containment and other measures applicable for existing exchange traded equity index option contracts shall be extended suitably to long-term option contracts on index.
JP Associates News
JP Associates to get LoI tomorrow for Ganga Expressway project.
Emerges lowest bidder for all 4 passages in Project.
Ganga Expressway project worth over Rs.30,000cr.
So we can Expect a Huge Run-up in the Stock.
New Polls
The previous poll gave unanimous thumbs up to Reliance Power IPO.
The new poll is going on asking how you participate in the stock market....
Please go ahead and submit your vote....
Thought for the day
Y Derivatives??
Previous article : Derivative basics
Derivative products initially emerged as hedging devices against fluctuations in commodity prices.
But we will talk about use of Derivatives in Equity Market….
Use of Derivatives
Hedging
Making an investment to reduce the risk of adverse price movements on your Portfolio.
A perfect hedge reduces your risk to nothing.
--Is done by the People who are not confident enough on the choice of there investment.
Speculation
The process of selecting investments with higher risk in order to profit from an anticipated price movement.
They call it a form of Gambling.
--The way for making or losing a lot of money
Arbitrage
The simultaneous purchase and sale of a Stock/Security/Contract in order to profit from a difference in the price. This usually takes place on different exchanges or marketplaces.
--I am still not able to find a real time direction to profit from this.
Out of the Above three I mostly indulge in Speculative trading and very rarely in Hedging.
And Speculation to me is Intuition, News, Market whispers and Mahitosh's Tips :D
Previous article : Derivative basics
Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
--Warren Buffet
Friday, January 11, 2008
ULIP Vs Mutual Fund
If you thought Unit Linked Insurance Policies are similar to Mutual Funds and are alternative investment oppurtunities. You may be wrong.
Mutual Fund : - Pure investment.
ULIP :- Investment + Insurance.
Investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis.
ULIPs are good only for people ready to invest for a longer period of time.
Normally mutual funds have 2.5% entry load, but fund charges are huge in case of ULIPs in initial years.
Eg :- LIC Money PLus takes 25-26% as expenses in the first year. This percentage starts reducing as years passes.
Note also that ULIPs generally remove your units as their Annual management charge and monthly charges. Mutual funds account for those in the NAV itself. Therefore, for the same dates, your real return on the ULIP would be lower than the figures mentioned, but on the Mutual funds would be the same
Personally I feel that if someone needs both insurance and investment.
Then he/she should take the combination of Term Insurance(pure insurance) + Mutual Funds instead of going through ULIP route.
Term insurance are quite cheap compared to other insurance in terms of benefit amount.
The money saved on premium can be invested in high growth mutual fund.
Similar post : FMP Vs FD
Beyond Equity Trading -- Derivative Basics
Investopedia Definition:
A derivative security can be defined as a security whose value depends on the values of other underlying variables.
A Futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price.
An Option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date.
The primary Difference between options and futures is that options give the holder the right to buy or sell the underlying asset at expiration, while the holder of a futures contract is obligated to fulfill the terms of his/her contract.
Just try to look at the picture and get the basic understanding. Details will be available in future posts.
Click on the image to see larger picture.
Derivatives involve risks and are not suitable for everyone. Derivatives trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital.
Follow up article to Y Derivatives?
Thursday, January 10, 2008
Bad News for HFCL
Tata,Idea,Spice Tele receive LoIs from DoT
Unitech,Swan,S.Tel get LoIs from DoT
Unitech, Datacom, Shippingstop get LoIs
LoIs granted for pan India operations
No LoIs for HFCL,Allianze Infratech, Cheetah & Bycell
HFCL News
There are market rumours that HFCL might not get the spectrum it is expecting.
People holding this stock , can take their own decision to exit the stock if they want.
Wednesday, January 9, 2008
ICICI Bank
I was soon going to post a recommendation on my blog about this favorite stock of mine....
Like Punj lloyd is future L&T then I see ICICI bank is future Citibank.
Today ICICI Bank has given good news regarding unlocking value by listing its various subsidiary.
ICICI Bank will list at least four of its subsidiaries and the process could commence within six months, starting with its brokerage arm ICICI Securities.
This holds very good news for ICICI's shareholders
Happy Investing..
Stocks with huge dependency on US
This is the list of companies which had exposure to US, any slowdown in US will affect the prices.
Rank Company RIC
IT Services
1 Patni PTNI.BO 80%
2 Mphasis MBFL.BO 70%
3 Hexaware HEXT.BO 70%
4 Satyam SATY.BO 65%
5 MindTree MINT.BO 65%
6 Infosys INFY.BO 63%
7 Wipro WIPR.BO 60%
8 KPIT KPIT.BO 60%
9 TCS TCS.BO 26, 56%
10 HCL Tech HCLT.BO 56%
Non-IT Services
1 Arvind Mills ARMI.BO 35%
2 United Phosphorus UNPO.BO 29%
3 Sun Pharma SUN.BO 26%
4 Dishman DISH.BO 25%
5 Ranbaxy RANB.BO 25%
6 Glenmark Pharma 24%
7 Suzlon SUZL.BO 14,816 22%
8 Alok Industries 22%
9 Tata Tea TTTE.BO 20%
10 Shasun Chemical 20%
Housing Development & Infrastructure (HDIL)
Housing Development & Infrastructure (HDIL)
CMP Rs1,141
1 year Target Rs. 2000
HDILis a real estate development company with significant operations in Mumbai Metropolitan Region. Its business focuses on Real Estate Development, including construction and development of residential, commercial & retail projects, slum rehabilitation and development, land development including development of infrastructure.
It is a part of Wadhawan group which has been involved in real estate development in the Mumbai Metropolitan Region for almost three decades. Its residential project consists of apartments, towers, large multi-purpose townships which are sold to individual customers. It haspresence across all key segments – residential,commercial, retail, SEZs and particularly SRS
It is seeking to develop projects in other locations including
It has a significant upside potential from GVK Slum Rehabilitation Scheme (SRS) and upcoming special
economic zones (SEZs). HDIL has development pipeline of 120mn sqft (excluding GVK SRS and SEZs). It is also developing 276 acres of slum land adjacent to Mumbai airport.
HDIL’s presence in the Mumbai property marketand expertise in SRS will help it capitalise on the strong demand in the region, which has huge land shortage.
This makes it lucrative as a long term stock.
Suggestions
Regular readers,
I have added a new and a very useful feature in this blog. Now you can see your stock watch list, news related to it etc in this blog without going anywhere else.
This feature is available at the end of the blog or click Stock WatchList in New Stuff [Top Left]
I would like to hear from you. Please post your comments as to what you like in this blog, what kind of articles you would like to see regulars and general feedback.
Thanks.
Tuesday, January 8, 2008
Medical Tourism in India
Medical Tourism in India, also known as Health Tourism India, is a growing concept whereby people from all over the world visit India for their medication accompanied with a short holiday. The health care sector in India has witnessed an enormous growth in infrastructure in the private and voluntary sector. The private sector, which was very modest in the early stages, has now become a flourishing industry equipped with the most modern. state-of-the-art technology at its disposal.
As Indian corporate hospitals are on par, if not better than the best hospitals in Thailand, Singapore, etc there is scope for improvement, and the country may become a preferred medical destination. In addition to the increasingly top class medical care, a big draw for foreign patients is also the very minimal or hardly any waitlist as is common in European or American hospitals. In fact, priority treatment is provided today in Indian hospitals.
The Apollo Group, Escorts Hospitals in New Delhi and Jaslok Hospitals in Mumbai are to name a few which are established names even abroad. A list of corporate hospitals such as Global Hospitals, CARE and Dr L.V. Prasad Eye Hospitals in Hyderabad, The Hindujas and NM Excellence in Mumbai, also have built capabilities and are handling a steadily increasing flow of foreign patients. India has much more expertise than say Thailand or Malaysia. The infrastructure in some of India's hospitals is also very good. What is more significant is that the costs are much less, almost one-third of those in other Asian countries.
Key highlights:-
- Healthcare industry is the world's largest industry with total revenues of approx US$ 2.8 Trillion (2005).
- With global revenues of approximately US$ 20 Billion (2005), the medical tourism industry is one of the world's largest industry.
- India's cost effective treatment makes it an important player in this industry.
- India's high population makes it an important player in the Healthcare Industry. According to the Insurance Regulatory and Development Authority, the Indian healthcare industry has the potential to show the same exponential growth that the software industry showed in the past decade.
- In India, 80% of the healthcare expenditure is borne by the patients and that borne by the state is 12%. The expenditure covered by insurance claims is 3%. As a result, the price sensitivity is quite high and the high-level healthcare facilities are not in the reach of patients.
- Growing Medical tourism in India will be one of the major sources for foreign exchange.
- With increasing number of non-insured population in western countries and increasing healthcare expenditure to GDP resulting in people opting for treatment choices outside their country.
