Sep 30, 2009

Sensex climbs to 17000

At 10.40 am today, the Sensex touched the 17000 mark for the first time since May 23, 2008. Keen buying interest was seen in metal, auto, bank, capital goods and oil & gas stocks. However, FMCG stocks were trading weak. The broader indices, midcap and smallcap indices were up 0.50% each. Reliance, Infosys, ICICI Bank, L&T and SBI were the positive contributors to the Sensex.

We expect another positive start though Asian stock markets are mixed after overnight losses on Wall Street. If global cues remain indecisive the market might just turn choppy again being a curtailed week.

The market has already had a terrific run in anticipation of the imminent rebound. So, it remains to be seen how long the current momentum continues. The scope for further advance does appear to be limited and every rise will be interrupted with periodic falls.

Markets continued with its upward march taking cues from peers in Asia and on hopes of revival in global and domestic economy.

At 12:00, the Sensex was up 183 points or 1% at 17035, and the Nifty was up 50.95 points or 1.02% at 5057.80.


Sep 29, 2009

What is Stop-Loss Order? :: Pros and Cons

What Does Stop-Loss Order Mean?
In simple words, Stop-Loss Order is an order placed with a broker to sell a share/security when it reaches a certain price as per the risk taking capacity of the investor. A stop-loss order is designed to limit an investor's loss on a security position. It is solely decided as per the investors choice.

It is also known as a "stop order" or "stop-market order".

Stop-Loss Order Explained:
Taking an example here, you set a Stop-loss order of 10% on a share. Now, setting a stop-loss order for 10% below the price you paid for the stock will limit your loss to 10% as the share will be sold at the stop-loss price as set by you. This strategy allows investors to determine their loss limit in advance, preventing emotional decision-making and repending later.

For example, let's say you just purchased shares for Mahindra Satyam at Rs.120 per share. Right after buying the stock you enter a stop-loss order for Rs.100. This means that if the stock falls below Rs.100, your shares will then be sold at the prevailing market price.

When the stock fall considerably even below this set stop-loss order, you can again enter into the stock and make fresh positions. This is a very wise decision to make as here, losing some amount of money once, gives you a chance to earn even more. This not only covers your initial loss that you incurred in the very first instance but in addition, earns a good profit for you.

Positives and Negatives
The advantage of a stop order is that you don't have to monitor on a daily basis how a stock is performing. This is especially handy when you are on vacation or in a situation that prevents you from watching your stocks for an extended period of time. In this case, you simply place a stop-loss order with the broker and when the stock price reaches this limit, it will be sold by the system on your behalf, minimizing your losses to a certain limit.

The disadvantage is that the stop price could be activated by a short-term fluctuation in a stock's price. The key to this is picking a stop-loss percentage that allows a stock to fluctuate day to day while preventing as much downside risk as possible. Setting a 5% stop loss on a stock that has a history of fluctuating 10% or more in a week is not the best strategy. You'll most likely just lose money on the commissions generated from the execution of your stop-loss orders.

There are no hard and fast rules for the level at which stops should be placed. This totally depends on your individual investing style: an active trader might use 5% while a long-term investor might choose 15% or more.

Another thing to keep in mind is that once your stop-loss price is reached, your stop order becomes a market order and the price at which you sell may be much different from the stop price. This is especially true in a fast-moving market where stock prices can change rapidly.

A last restriction with the stop-loss order is that many brokers do not allow you to place a stop order on certain securities.

Advantages of the Stop-Loss Order
First of all, the beauty of the stop-loss order is that it costs nothing to implement. Your regular commission is charged only once the stop-loss price has been reached and the stock must be sold. You can think of it as a free insurance policy.

Most importantly, a stop loss allows decision making to be free from any emotional influences. People tend to fall in love with stocks, believing that if they give a stock another chance, it will come around. This causes procrastination and delay, giving the stock yet another chance. In the meantime, the losses mount.

No matter what type of investor you are, you should know why you own a stock. A value investor's criteria will be different from that of a growth investor, which will be different still from an active trader. Any one strategy may work, but only if you stick to the strategy. This also means that if you are a hardcore buy-and-hold investor, your stop-loss orders are next to useless.

The point here is to be confident in your strategy and carry through with your plan. Stop-loss orders can help you stay on track without clouding your judgment with emotion.

Finally, it's important to realize that stop-loss orders do not guarantee you'll make money in the stock market; you still have to make intelligent investment decisions. If you don't, you'll lose just as much money as you would without a stop loss, only at a much slower rate.

A stop-loss order is a simple tool, yet so many investors fail to use it. Whether to prevent excessive losses or to lock in profits, nearly all investing styles can benefit from this trade. Think of a stop loss as an insurance policy: you hope you never have to use it, but it's good to know you have the protection should you need it.


Bharti, MTN to conclude talks on Sep 30

With the deadline for the exclusive Bharti-MTN talks expiring on Wednesday (September 30), more clarity on the mega deal is likely to emerge soon.

The future of the Bharti-MTN deal is set to be decided possibly within the next 48 hours. Sources say there is very little possibility of an extension. The reason being that the deal structure has already been frozen and both principals have sort of shaken hands quite a few days back. What was left pending was the approval from the South African government side and to that end there were extensive negotiations between the South African and the Indian authority. In a scheduled meeting of the MTN board on September 28 they may take into account all these varied inputs and once that happens, a decision is taken that will be crucial input towards some sort of announcement.

That apart, while it may not be okay to speculate about what exactly is going to happen, the facts that are available at this point of time seems to suggest that SingTel, which has a 30.5% stake in Bharti Airtel, will have a significant role to play in this transaction. There are according to our sources discussions going on separately between Bharti and SingTel. What is the purpose of those discussions, what the likely outcome is cannot be speculated at this point of time but Bharti has indicated in the past that it would be willing to look at a sweetener as and when the demand is made. It is already clear that some sort of increase in the cash outgo portion of the deal may happen.


ADAG accuses RIL of short-changing govt on gas mktg margins

The Anil Dhirubhai Ambani Group (ADAG), which is involved in a bitter gas tussle with Mukesh Ambani?s Reliance Industries, has written to the Petroleum Ministry asking it to resolve the issue of marketing margin expeditiously.

Reliance Industries sells gas to ADAG and other companies at a price of USD 4.2 per unit ? ADAG's Reliance Natural Resources and RIL are already involved in a legal fight over the unit price ? and also charges marketing margins of USD 0.13 per unit.

ADAG, in its letter, said that RIL is not entitled to a marketing margin as it has not undertaken any marketing. It also said that RIL was depriving the government of its share of marketing margin and that it was violating the High Court's order and the decision of the Empower Group of Ministers over the issue.


Sep 25, 2009

Thinksoft IPO Price band reduced

Thinksoft Global Services has extended its initial public offering (IPO) closing date to October 1, 2009 from the earlier decided date, September 24, due to a lukewarm response from investors, especially qualified institutional investors (QIBs). It also reduced its IPO price band to Rs 115-125 from the earlier Rs 120-130 per share.

Commenting on this development, Asvini Kumar, MD, Thinksoft Global Services, said till yesterday QIBs had not contributed much whereas the high networth individuals (HNI) portion was oversubscribed twice and the retail portion was oversubscribed 1.3 times. 'The pricing and the extension is done on investor bankers? advice and they feel confident,' he added.

If you look at the data as of yesterday, the qualified institutional buyers (QIBs) have not contributed whereas the high networth individuals (HNI) portion has been oversubscribed twice and the retail portion has been oversubscribed 1.3 times. So, this is a very interesting trend. So, the questions here are why is the QIB so low and why are the other things looking good. So, we try to interpret this data and I can tell you that the QIBs do parametric investing, they will have their own set of rules and guidelines for investing. For example if one of the guidelines was size or something like I won?t invest below a certain thing or I will invest in a company with above a certain thing or issue size above a certain thing that could become a constraint but I really don?t know what their parameters were. But if you look at the HNI and retail response, one thing becomes very clear that there is a huge segment of individual retail investors, intelligent HNIs who look at their investing decisions based on the quality of the management, the promoters commitment, the company?s profitability, our topline and bottomline growth, our dividend record for ten years, good cash reserves, so they see a value proposition in this. According forester report, the specialist and niche players are not going to be affected much and it is the Indian outsourcing strength and our skills as a domain focused company we are in good state. So, I think the lesson to be learnt is that there is a new target and we have to give them time to come and invest and close out the issue and we have given them an opportunity, the MD said.


Reliance Infratel files IPO papers

Anil Dhirubhai Ambani Group (ADAG) company and subsidiary of Reliance Communications, Reliance Infratel, has filed for the draft red herring prospectus (DRHP) for an initial public offering (IPO) of 15.6 crore shares with the SEBI (Securities and Exchange Board of India).

The offer will be constituted 10.05% of the fully diluted post issue paid-up capital of the company. Post issue, Reliance Communication will continue to own 85% stake in the company.

Part of proceeds will use for repaying RCIL (Reliance Communications Infrastructure Limited) loan of Rs 4,931 crore. Out of proceeds, Rs 4,000 crore will be used to repay loans.

Reliance Infratel has total of 48,139 towers as of August 31, 2009. It reported revenue of Rs 4,934 crore and net profit of Rs 1,585 crore in FY09.


GE extends Mah Satyam's multi-billion dollar order by 3 yrs

GE has extended its multi-million dollar contract with Mahindra Satyam by three years from January 2010. It will cater to application development and engineering services.

Commenting on the order, Arvind Malhotra, Global Account Executive of Mahindra Satyam said, ?The contract will contain the same kind of work, basically ERP implementation, application support and development and they have added engineering services and BPO services. So, this will give us an opportunity to expand our service portfolio.?

Commenting on the whether the company had given any price discounts to retail GE contract, he said, ?Actually this time GE negotiated the contract not on price but on some other parameters like global delivery capability, maturity of our process and some other elements like that.?

After reinstating the variable compensation for its employees, Mahindra Satyam has now kicked off its promotion cycle. Promoted employees have also been given marginal pay hikes.

Mahindra Satyam's turnaround plan may take a while. But employees may have some reason to cheer. Earlier this month, Mahindra Satyam announced that it was reinstating the variable compensation given to employees, which had been withdrawn after the scam. The company is promoting junior and senior management employees. It is also offering marginal pay hikes to those promoted. When contacted, a spokesperson confirmed the news. He said, "Associates have been promoted across levels based on their performance. This move is a recognition of their commitment and dedication to the organisation."

Sources say that the pay hikes given to promoted employees is only marginal. Hike in the basic component of the salary will take time to be effected.


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Sep 22, 2009

Dell to buy Perot Systems for $3.9 bn

DELL - The world's number one PC maker, has finally put its healthy cash balance to use by agreeing to buy IT company Perot Systems for about USD 3.9 billion in cash. Dell said it expects the deal to add to its earnings from the fiscal 2012 and the deal may close in the November to January quarter.

Perot systems said it expects the healthcare vertical to be a major focus of the merged entity.

Michael Dell, Chairman and Chief Executive Officer, Dell, said, "Dell, Perot Systems combine will create USD 8 billion services company. Perot Systems' capability will help Dell reach wider customer base."

Ross Perot Junior, Chairman, Perot Systems, said, "We are teaming up with Dell to help Perot Systems reach into China and India. Perot Systems plans to make Dell a services powerhouse."


Bharti-MTN deal likely to be finalized this Weekend

The Bharti-MTN deal is now in its last lap. However, actual moves such as initialing the indicative agreement would be possible only post the scheduled MTN board meet on September 27. However, the deal may take another three months after it's announced to get a nod from the South African Competition Commission.

MTN is required to intimate the competition commission of South Africa on a change in control which will then take 40 days to 2 months to give its go-ahead.

The CCSA will also recommend deal to competition tribunal which in turn will take a month to come to a decision. Thereafter the competition tribunal will hold a public hearing on the deal.

Meanwhile, a team from South Africa comprising the treasury and Central Bank officials are expected to land in India soon.

This is perhaps the mandatory and the last official level visit prior to an announcement on the deal. Over the weekend, there had been talks between Mr Phuthuma Nhleko and Sunil Mittal and according to sources these went off very well. All the matters as far as the two companies are concerned are over and resolved and now it is only the process of approvals that is required. So the visit of the South African official delegation which begins tomorrow, they first come to Bombay and then come to Delhi, has to be seen in this light.


United Bk plans IPO in Jan 2010

United Bank of India (UBI) is looking to raise close to Rs 500 crore through its maiden initial public offer (IPO) that is expected to hit the markets by January 2010. UBI's listing will leave Punjab and Sind Bank as the only public sector undertaking (PSU) bank, which is yet to be listed.

The bank proposes to offload a 15% stake to the public by issuing 50 million shares that are likely to be priced between Rs 80-90 per share as per initial valuation estimates. The bank is confident that the issue will help it raise close to Rs 500 crore, proceeds that will be deployed in growing its asset base.

TM Bhasin, Executive Director of UBI says that they have submitted a request to the Government of India (GOI) and Reserve Bank of India (RBI) to go in for the IPO. "We expect to get the permission by October, and the IPO will hit the market by January." This year the government has assured the bank another Rs 550 crore. Their capital requirement has been worked out till 2012. Rs 1600 crore is the total requirement in tier one out of which Rs 550 crore will come and rest Rs 800 crore will be infused by the government next year.

The bank's capital has been restructured. Earlier the capital size was Rs 1,532 crore and Bhasin says it has been restructured to Rs 266 crore. The balance Rs 1,266 crore has been shifted to the capital reserve account. In addition, last year, the government infused Rs 250 crore via perpetual non-cumulative preference shares into the bank. This year, the government is going to infuse another Rs 550 crore, followed by another Rs 800 crore the year after.

"This year they have assured us another Rs 550 cr. Our capital requirement has been worked out till 2012. 1600 cr is the total requirement in tier 1 out of which 550 will come & rest 800 govt has assured they will infuse next year"

The bank is targeting a 40% credit growth this fiscal and also says an acquisition may be on the cards next year. With overall lending expected to improve, UBI is confident of its long term growth prospects.


Jindal Cotex listing Rs 77 on the NSE

Jindal Cotex listed at Rs 77 on the NSE, at a premium of 2.67% to its issue price of Rs 75 a share. The share touched an intraday high of Rs 77.25 and an intraday low of Rs 76.10 in the early trade. The total traded quantity was 1,52,682 shares and turnover was at Rs 117.55 lakh.

On the BSE, the share opened at its issue price of Rs 75. It touched an intraday high of Rs 83.70 and intraday low of Rs 75.

The issue of 1,24,53,894 equity shares was subscribed 2.2 times and company raised Rs 93.40 crore.

The proceeds from the issue (excluding public issue expenses) will be used for setting up a new facility for manufacturing of cotton yarn, yarn dyeing and garments and investment in subsidiaries namely Jindal Medicot & Jindal Specialty Textiles.

The company is engaged in the business of manufacturing of acrylic, polyester, and polyester-viscose, polyester cotton, combed and carded yarns, which are appropriate for apparels, suitings and knitted fabrics. The yarns produced by the company are used for made ups in apparels, hosiery & garment industry.

It has current installed capacity of 23,472 spindles for acrylic, cotton blended and polyester yarns with a manufacturing capacity of 6500 TPA. It manufactures and sell yarns under the trade name "JINDAL".


Sep 18, 2009

Inflation may cross 6% by March 2010: RBI

The Reserve Bank of India?s Deputy Governor, KC Chakrabarty comments that it is not the right time to plan an exit from the current stimulus. He adds that the RBI is looking at hiking the hold-to-maturity portfolio cap of banks and sees credit picking up in the next few months.

On inflation:
Wholesale Price Index inflation is seen crossing 6% by March, says Chakrabarty.

Seconding his stance, Atsi Sheth, Chief Economist, Reliance Equities, too, sees inflation at 4% by December and 6% by March 2010. "Rise in inflation was driven by higher food prices," she adds.

After remaining in the negative for 13 weeks, inflation for the week-ended September 5 came in at 0.12% versus minus 0.12%. However, the prices of daily basic necessities have increased drastically year on year (YoY) basis.


Sep 16, 2009

Indian Hotels can go upto Rs 105-110

Indian Hotels Company can go upto Rs 110-115, say Technical Analysts.

Indian Hotels will take a fairly long time in appreciating significantly from here on. It has to trade above the Rs 83-85 band in a consisten fashion with higher volumes for the bulls to really return with a great deal of conviction but coming 4-6 months we can expect it to trade in the triple digit mark, close to Rs 105-110 levels.


Pipavav IPO Overbid 2 Times

Pipavav Shipyard has opened its initial public offering (IPO) of 85,450,225 equity shares of Rs 10 each for subscription. It has been subscribed 1.94 times so far and has received bids for 13.62 crore shares as against the issue size till 16 hours IST, as per the data available on the NSE website.

Maximum bids were seen at Rs 60/share, the higher end of the price band. Qualified and non-institutional investors' portion subscribed 1.09 times and 5 times.

It will raise nearly Rs 513 crore at higher end of the price band Rs 55-60 per equity share. The issue will close for subscription on September 18, 2009.


US economy to bounce back soon: Warren Buffet

Warren Buffett, the Chairman and CEO, Berkshire Hathaway said that the markets are unlikely to fall more and only a 9/11 kind of a drastic situation could rock the economy now. ?The market sort of formed a plateau at the bottom right now but if you have got some horrible events, some of the 9/11 type of event or worse you could have something that could be really disruptive and start things all over again. We are past the critical point.?

Buffet said though the economy has not bounced back it has quit going down and it would soon come back. ?I have never been able to tell whether it's going to be a week, a month or six months but we are on the mend.?

On the real estate front Buffet said, ?We are certainly through the worst of our residential real estate in all probability and the reason is we are building a lot fewer houses than we are forming households, so that solves itself overtime than do it in a day or week, but it solves itself. Some of the toxic assets have been flushed through, there has been capital raised, we are measurably better off than we were a year ago.?


Sep 15, 2009

Market Outlook and Tips for 15th Sept,09

On Monday, the 14th September, the markets opened on a weak note and traded in a range bound manner with extreme volatility and choppiness as a result of weak confidence among the bulls after the opening with continuous phases of buying and selling in the market further worsened by the selling pressure.

During the whole session, the NIFTY kept hovering above and below the 4800 mark, with support seen at 4787 mark.

The NIFTY traded with extreme volatility above the 4800 levels, followed by repeated rounds of buying and profit booking witnessed at every dip and upside, and kept trading in a directionless manner due to lack of confidence among the traders and cautious approach on the part of investors.

The Nifty finally closed at 4808.60 losing 21 points or 0.43 %.

Market Outlook for 15th Sept, 2009:
The Intraday Support for the market shall be 4762 & 4718 while the market will experience resistance at 4849 & 4889.

Intraday Tips for 15th Sept, 2009:

Buy NIFTYabove 4834 with a Stop Loss of 4784

Sell NIFTY below 4784 with a Stop Loss of 4834

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OIL IPO Price fixed at Rs. 1050 per share

The price for the highly demanded Oil India's (OIL) initial public offering (IPO) has been fixed at Rs 1,050 per share by the priceminister's panel, the Oil Secretary RS Pandey informed.

According to the reports, the company will list its equity shares on the bourses on the September 30, 2009.

OIL, the second largest oil and gas company in India, had come out with the OIL IPO of 264.5 lakh equity shares of face value Rs 10 each and raised Rs 2,777 crore.

The issue has received an outstanding response from the investors, especially the QIB (qualified institutional investors). It has been subscribed 30.82 times and QIBs' reserved portion got subscribed 54 times followed by the non-institutional and retail investors; whose portion was subscribed 10.5 times and 1.8 times, respectively. The issue received more than 2.10 lakh applications for allotment.


Sep 14, 2009

Market Outlook and Tips for 14th Sept 2009

On Friday, the 11th September, 2009, the markets opened on a positive note backed by the global cues but soon shed all its early gains and turned extremely volatile and choppy after the opening trade. The Markets kept hovering into the positive and negative territory for the entire day assisted by continuous rounds of buying and selling.

The buying and profit booking kept coming in with every dip and upside, and kept trading zig-zag confused manner due to lack of confidence among the bulls and cautious approach on the part of investors.

At the end of the session, the Nifty finally closed at 4829.55 gaining 10 points or 0.21 %

Market Outlook for 14th Sept, 2009:

The Intraday Support for the market shall be 4782 & 4749 while the market will experience resistance at 4865 & 4917.

Intraday Tips for 14th Sept, 2009:

Buy NIFTY above 4855 with a Stop Loss of 4806

Sell NIFTY below 4802 with a Stop Loss of 4860.

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Sep 11, 2009

CIBIL Credit Report; Direct Access by March 2010

Arun Thukral, MD, CIBIL, Credit Information Bureau (India) Limited, talks about the importance and limitations of credit information reports.

When will we be able to access our own credit scores?

We are currently developing the infrastructure, systems and processes that would be needed to give individuals direct access to their credit information reports or CIRs. This will be in place by the end of this financial year. The CIR will give a factual snapshot of an applicant's credit history and payment records. As for the fee struct
ure, according to the Credit Information Companies Regulations (CICR) Act, 2005, the maximum fee that can be charged for a CIR is Rs 100.

The CIR does not contain the details of a borrower's assets and investments. Given its bearing on an individual's repayment capacity, shouldn't this be factored in?

CIBIL provides credit information about borrowers based solely on the data that has been made available to it by its members. This factual information, both positive and negative, is provided to its members in the form of risk management tools like CIRs, portfolio review reports, Cibil TransUnion Score, etc. Though these tools are important inputs for a lender to decide on credit disbursal, factors like the borrower's income, occupation, net worth, other lines of credit, etc, are also considered.

Does this mean that if one bank denies credit to a person, another bank can take a different view?

When it comes to offering credit, every financial institution has its own level of risk appetite, which is based on its credit and risk management policies. The CIR is used as a part of its due diligence procedure. So, yes, credit lenders can take different views on a particular CIR and use the information for their decision-making differently. Cibil does not pass any value judgements and it is up to the financial institution to sanction a loan or credit.

Now that RBI has directed banks to issue credit reports to customers on request, what is the incentive for customers to go to Cibil directly?

Customers can get their reports from a credit institution only if they have applied to it for credit. However, they will be able to access their CIRs from Cibil whenever they want. Also, the Cibil report that credit institutions access is tailored for them. An individual will need to see a report that is in a consumer-friendly format and can be understood more easily. The CICR Act enables transparent and active information sharing. It helps boost a sound credit culture, which translates into economic growth.

Source: IndiaInfoline


Market Outlook and Tips for 11th Sept 2009

Sensex gained 33 points or 0.2% at 16,216 while, Nifty ended flat to shut the shop at 4,819.

On Thursday, the 10th September, 2009, the NSE Nifty managed to hold on to the 4800 levels for the third straight day. The current rally seems to be running out of steam now as both the benchmark indices are witnessing selling at higher levels.

Traders and investors preferred to book some profits as the Nifty inched closer to the 4900 mark. Strong inflows from the FIIs (Foreign Institutional Investors), supported by some local buying have been driving the mark northward since last three consecutive days. But, today the market players chose to stay back because of many factors like drought, rising inflation and Interest rates.

Not only in Indian Markets, there are worries such as tepid consumer spending, high unemployment and hardening commodity prices for the global markets too.

Today the inflation numbers also came in. India’s inflation for the week ended August 29 came out to be -0.12% as against -0.21% in the previous week. The Market expected inflation to come in at -0.09%.

At the end of the session, the Nifty ended almost flat to shut the shop at 4819.

Trading Strategy for 11th Sept, 2009:

Buy NIFTY at 4855 with a Stop Loss of 4832 for a target of 4870 & 4898.
Sell NIFTY at 4811 with a Stop Loss of 4844 for a Target of 4782 & 4763.

Intraday Tips for 11th Sept, 2009:

Buy Educomp at 4265 with a Stop Loss of 4225 for a target 4303 & 4359.

Buy Jindal Steel & Power at 3502 with a Stop Loss of 3472 for a target of 3533 & 3561.

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Sep 10, 2009

Market Outlook and Tips for 10th Sept 2009

On Wednesday, the 9th September, 2009, the markets opened flat and turned out to be extremely volatile and choppy right after the opening, hovering into the positive and negative territory for the entire session of trade.

The Nifty traded with extreme volatility around the 4800 levels, followed by repeated buying and profit booking with every dip and upside, and kept trading in a direction-less trend due to lack of confidence among the bulls after witnessing the pitfalls of the year 2008.

The Nifty finally closed almost flat at 4814.25 gaining 9 points or 0.19 %

Market Outlook for 10th Sept, 2009:

The Intraday Support for the market shall be 4781 & 4742 while the market will experience resistance at 4847 & 4892.

Trading Strategy for 10th Sept, 2009:

Buy NIFTY above 4833 with a Stop Loss of 4794

Sell NIFTY below 4794 with a Stop Loss of 4833

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Sep 9, 2009

RBI to introduce 100 crore Rs 10 plastic notes

Good news for those who get frustrated when receiving a soiled note from a shopkeeper. You may see the crumpled soiled notes soon becoming a thing of the past with the Reserve Bank planning to introduce polymer plastic bank notes in the denomination of Rs.10 whose life span would be 4 times more than the normal paper currency notes. The brilliant advantage of these Pleastic notes is that they would be difficult to imitate.

The Reserve Bank of India bank has in an initial phase decided to introduce 100 crore pieces of Rs 10 polymer notes, for which it has hired a global tender.

Explaining the rationale for introduction of polymer notes, an RBI official said, these notes would have an average life span of 5 years compared to one year for the currency notes.

These notes are cleaner than paper notes and it would be difficult to counterfeit the currency.

Taking the history of the introduction of the polymer currency notes were first introduced in Australia to safeguard against counterfeiting of currency.

Besides Australia, many other countries have introduced plastic notes which include New Zealand, Papua New Guinea, Romania, Bermuda, Brunei and Vietnam.

Source: Economic Times


Market Outlook and Tips for 9th Sept 2009

On Tuesday, the 8th Sptember, 2009, the markets opened on a positive note backed by positive cues from the peer Asian markets and turned extremely choppy later after the opening.

The Markets traded with volatility during the entire day's session, followed by buying coming in at every downside with investors coming in at lower levels and profit booking at every upside.

Metals, Oil & Gas, Capital Goods, Banking stocks were on the gaining side while selling pressure was witnessed at the counters for FMCG, Auto, Pharma and IT stocks.

At the end of the session, the Nifty Index finally closed at 4805.25 gaining 22 points or 0.47 %

Market Outlook for 9th Sep, 2009:

The Intraday Support for the Nifty shall be 4755 & 4716 while it will experience stiff resistance at the levels of 4849 & 4896.

Trading Strategy for 9th Sep, 2009:


Buy above 4830 with a Stop Loss of 4765

Sell below 4775 with a Stop Loss of 4835

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Sep 8, 2009

Market Outlook and Tips for 8th Sept 2009

On Monday, the 7th September, 2009 the markets opened on a positive note backed by the positive cues from the global markets and continued the upward movement on sustained buying across all the counters.

Further, the strong European markets also lifted the investor confidence and the markets continued to move up.

Realty, Metal, Bank, Consumer Durable, Auto, Tech, PSU and Capital Goods stocks witnessed most of the buying in the days trade.

At the end of the session the Nifty finally closed at 4782.90 gaining 102 points or 2.19 %.

Trading Strategy for 8 Sep, 2009:

The Intraday Support for the market shall be 4735 & 4686 while the market will experience resistance at 4824 & 4865.

The Best Strategy shall be to:

Buy above 4804 with a Stop Loss of 4758

Sell below 4758 with a Stop Loss of 4804

Intraday Tips for 8th September, 2009:

BHARTIARTL : Buy above 422 with a Stop Loss of 417 for targets of 434,439

Or if trades below 409 Short BHARTIARTL SL 416 Targets 397,391

RELCAPITAL : Buy above 924 sl 919 Targets 934,938 Or if trades below 913 Short RELCAPITAL SL 918 Targets 903,899

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Sep 7, 2009

OIL IPO: Should I Subscribe?

Oil India Ltd. (OIL), the second largest oil and gas company in India, opened its initial public offering (IPO) of 26.45 lakh equity shares of face value Rs 10 each for subscription today (7th September, 2009). The issue price for the IPO has been fixed at Rs 950-1050 per equity share and it will raise around Rs 2,512 - Rs 2,777 crore.

The question that the investors are having in their minds is that should one subscribe to the issue or not.

While most experts say 'subscribe', many of them are advicing the investors to stay away from the issue.Moreover, those who advice to subscribe believe that this will be a long-term bet.

You are advised to subscribe to the issue for listing gains as well as with long term perspective. OIL is currently available at a discount to ONGC's current market price. Experts see Rs 1,200 a share on listing day though the primary market maybe affected a bit after Adani Power and NHPC slipping below their issue price.

We will probably get a good response on Oil India and the company looks reasonably well set given the kind of oil wells that they have and the kind of production activity that they?re carrying out and are likely to carry out in coming quarters.

Importantly after this IPO they would have about Rs 9,000 crore worth of cash in the books. Interestingly one will have to watch as to how they will deploy this cash in further production activities. So from that perspective the company looks reasonably good from an investment point of view.

In contrast to the above advise, some experts are rather guiding the investors to buy ONGC instead of Oil India. On of the leading investment advisors says, "We are not convinced even at the lower band of Rs 950 per share, but those who are keen to go for it, should contemplate applying at the lower band. It is infact worth and advisable to buy ONGC from the secondary market, instead of going in for this IPO. To justify the pricing of this IPO, share price of ONGC has to move up from its present level of Rs 1,185. So why not bank on the leader and giant instead of this tiny and regional player."

Another invesmtent consultancy says, "One should buy the stock if one is very patient but for the average investor, it was probably an avoided."


Market Outlook and Tips for 7th Sept 2009

On Friday, the 4th September, the markets opened on a positive note backed by the mixed cues from the global markets but soon volatile the situation turned volatile until the buying came in at the lower levels which helped the markets to sharply surge up.

Further wirh the strong opening of the European markets investor sentiments got boosted up and strong buying came into the markets during the mid session.

The strong buying continued mainly across the Auto, Metal, Oil & Gas and Capital Goods stocks.

At the end of the session, the Nifty finally closed at 4680.40 gaining 87 points or 1.89 %.

Market Outlook for 7th Sept, 2009:

The Intraday Support for Nifty shall be 4634 & 4580 while the market will experience resistance at 4724 & 4760.

Trading Strategy:-

Buy NIFTY above 4705 with a Stop Loss of 4658
Sell below 4655 with a Stop Loss of 4707.

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Sep 5, 2009

The Importance of Investing

Now that you are into a Job for quite some time now, do you remember the days when you were just awarded with your first job and your father told you to open a recurring deposit account in a bank and make all your tax saving investments in provident funds.

At that time there were not many investment options available or a more appropriate fact to quote here will be that people were not aware of all the investment instruments available to them so they rather trusted the very basic investment options available like the Recurring deposits and more easier way, to park their money in their savings account itself and earn interest on that.

After all, they always preferred the options that would give you assured returns with a capital guarantee. And the advised you to do the same. Those were the words of wisdom then, but not anymore. Times have changed drastically now and lets see to what extent.

Inflation is eating away your returns

Today, with all the things getting expensive, the inflation is eating into your returns even when you are sitting in front of your computer reading this article.

Lets quote an example here to understand this in detail:

If your monthly expenses today are Rs 10,000 and annual inflation rate for the economy is 5%, 20 years later, when you will most probably retire, you can expect your monthly expenses to rise to at least Rs 26,000. Now, taking the best case that Bank deposits will give you a return of 6%, but post inflation and tax; you will be left with a rate of return which actually runs into the negative. This means that while on the paper, you will be happy to see your returns as a handsome 6%, your capital is actually eroding in the real scenario.

You are going to live longer

Thanks to the increased life spans with the advancements in medicine, research shows that you are now going to live much longer. Your grandfather worked and earned an income for 25 years of his life, he lived for another 10 years after his retirement. Your father worked the same number of years but lived for 20 years post retirement. You will probably work almost the same number of years that they did, but in every probability live even longer! Therefore, you have to SAVE a lot more to plan and enjoy those extra twilight years of your life.

You have a Standard of living to maintain

Today, you like to drive around in an SUV, are a member of an Elite countryside club where you go golfing on the weekends, you treat your family to a fine dinner at least once a week and of course, love those weekend getaways to the holiday resorts with your children. Do you ever ponder over the thought of how many of these luxuries will you be able to actually afford after you retire?

Wealth creation is all about making money last till the end in order to continue enjoying all of these luxuries.

Planned expenses

Most of the large expenses in life are planned expenses. For instance, purchase of a home, your child’s education or marriage, your own retirement and so on. These expenses are to be incurred no matter what you do about them.

All of the above listed points take into account the importance of Investing in one lives by taking real life time examples and the actual problems faced by the most of us. Readers are welcome to share their individual thoughts on this topic in the comments section below.

Rather than cribbing about your financial sources and your job, we have to Plan accordingly and successfully create wealth to meet our individual needs.

Remember one thing in life:
Failing to plan is Planning to fail.

So, plan, save, have a happy life and Happy Investing!


Sep 3, 2009

Market Outlook and Tips for 3rd Sep 2009

On Wednesday, the 02nd September, 2009, the markets opened on the weaker side backed by the negative cues received from the global markets but soon after that, buying came in as the investor interest arose at the lower levels which helped the markets to recover from the opening losses and surged into the positive territory. Soon after this markets traded in an extreme choppy fashion for the entire session hovering into the negative and positive territory from time to time.

Weak European & Asian markets also added to the negative sentiments and dragged down the markets further and at the end of the day managed to recover from the earlier day's lows and ended in the marginally negative side.

Selling pressure was witnessed among the Realty, Capital Goods, Power and Auto stocks.

At the end of the session the Nifty finally closed at 4608.35 losing 17 points or 0.37 %

Market Outlook for 3rd Sep, 2009:

The Intraday Support for the market shall be 4560 & 4525 while the market will experience resistance at 4659 & 4700.

Intraday Trading Tips for 3rd Sep, 2009:

Buy NTPC above 207 with a Stop Loss of 205 for a target of 211.

Buy AMBUJACEM above 98 with a Stop Loss of 97.50 for a target of 101.

Sell NALCO below 328 with a Stop Loss of 333 for a target of 323.

Sell MARUTI below 1498 with a Stop Loss of 1517 for target of 1471.

Intraday Trading Tips for 2nd Sep, 2009:

SUZLON Buy Above 95 SL 93 Target 97 Target Achieved
BHEL Sell Below 2255 SL 2280 Target 2220 Target Achieved

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Sep 2, 2009

Reliance Infratel plans $1 bn IPO: Reports

According to reports, the telecom tower unit of Indian mobile operator Reliance Communications Ltd has revived its initial public offer plan and is looking forward to raise up to Rs 5,000 crore ($1 billion).

Reliance Infratel, 95-per cent owned by the country's No. 2 mobile firm, aims to sell at least 10 per cent stake to use the capital to fund its expansion plans.

The company would file the draft prospectus within a week.

In February last year, the company had filed a prospectus with the regulator seeking to offer 10.05 per cent of the post-issue capital, which according to the media reports stated that the company was looking to raise up to Rs 6,000 crore at that time.

But a slump in equity markets worldwide, including in India, forced Reliance Infratel to shelve the plan.

The revived IPO would help ease pressure on the company to raise funds from private equity firms, with whom it has in talks.

Indian companies have raised nearly $10 billion in share sales this year, surpassing 2008 volumes, helped by a 62 per cent rally in the main BSE index this year.

State-owned energy explorer Oil India Ltd is set to launch an IPO next week to raise up to Rs 2,780 crore, while private-sector shipbuilder Pipavav Shipyard Ltd IPO is expected to start roadshows later this month for about Rs 500 crore.

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Market Outlook and Tips for 2nd Sep 2009

On Tuesday, the 1st September, 2009, the markets opened positive backed by the firm cues from the Asian Markets as a result of which the Markets traded higher putting on fair gains during the early part of the day before the profit booking came in later at the higher levels.

The Weak European markets also added load and dragged the sentiments in the negative area during the second half in the day's session and leading the markets to lose all its early trade gains to slip deep into the reds.

The selling pressure from the investors was mainly seen in the Realty, Power, Pharma and Capital Goods sectors.

The Nifty faced resistance above 4712 mark while it experienced support at 4618 levels.

Nifty finally closed at 4625.35 to end the session losing 37 points or 0.79 %

Market Outlook for 2nd Sep, 2009:

The Intraday Support for the Nifty shall be 4570 & 4530 while the market will experience resistance at 4674 & 4720.

Intraday Trading Tips for 2nd Sep, 2009:

Buy SUZLON above 95 with a Stop Loss of 93 for a target of 97.
Buy TATA STEEL above 418 with a Stop Loss of 413 for a target of 429.

Sell IDEA below 78 with a Stop Loss of 81 for a target of 76.
Sell BHEL below 2255 with a Stop Loss of 2280 for a target of 2220.

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Sep 1, 2009

IPO Fever: Godrej Properties IPO in November

The initial public offering (IPO) season seems to be in its full swing with all the companies coming forward to collecting money from the markets.

The next to join the trend is Godrej Properties. According to reports, the proposed Godrej Properties IPO could be floated as early as November. Mr Adi Godrej, the Chairman of the Godrej Group, said on Monday that the draft red herring prospectus has been approved by the Securities and Exchange Board of India (SEBI).

Under SEBI guidelines, Godrej Properties has 10 months to float the IPO.

But Mr Godrej said the IPO is likely to be out within 2-3 months. Godrej Properties plans to sell 13.5 per cent of its stake. Mr Godrej said that the stake sale will bring in fresh cash infusion and this will not be a case of promoters selling their stake. ?The proceeds from the stake sale will be used by the company for its expansion,? he added.

Regarding the company?s expansion plans, Mr Godrej said that the affordable housing segment, broadly the Rs 5-25 lakh segment, has seen tremendous demand and the company will continue to focus on this segment. Ninety per cent of Godrej Properties? housing projects fall under the affordable housing category, he said.

He said the company is coming up with affordable housing projects in Bangalore, suburbs of Mumbai, Pune, Kolkata, Ahmedabad and Chandigarh.

?Costs of cement and steel are coming down and this along with lower mortgage rates forms a suitable atmosphere for undertaking affordable housing projects,? said Mr Godrej.

Source: The Hindu Business Line.


NHPC listed at Rs. 42 on NSE; 17% gains

NHPC listed at Rs 42 on the NSE this morning at a premium of 16.67% to its issue price of Rs 36 a share. However, the share slipped and was trading at Rs 37.20 at a premium of 3.33% to its issue price.

The share touched an intraday high of Rs 42 at which it opened and an intraday low of Rs 36.75 in the early trades today.

At 10:20 am on the 1st Sep, 2009, the total traded quantity was 15,20,36,582 shares and turnover was at Rs 56664 lakh.

However, on the BSE, the share opened at Rs 39, at a premium of 8.33% to its issue price. It touched an intraday high of Rs 39.75 and intraday low of Rs 36.75.

The initial public offering (IPO) was of 1,67,73,74,015 equity shares of Rs 10 each with a price band of Rs 30-36 per equity share. The issue was subscribed 23.74 times.

Qualified institutional investors' (QIBs) portion was subscribed 29.16 times. Non-institutional and retail investors' portion subscribed 26.7 times and 3.87 times, respectively.
The proceeds of the fresh issue will be used to part finance the construction and development costs of certain of projects, namely, Subansiri Lower, Uri ? II, Chamera - III, Parbati ? III, Nimoo Bazgo, Chutak, and Teesta Low Dam - IV.


Market Outlook and Tips for 01st Sep 2009

On Monday, the 31st of August, 2009, the markets opened with gap down opening backed by the negative cues from the Asian Markets and the selling pressure due to the negative sentiments in the market further dragged the markets down.

The Nifty experienced support at 4647 and smartly managed to recover from day's lows to end the day marginally above the met days lows.

Nifty finally closed at 4662 losing 70 points or 1.48 % approx.

Intraday Support for the market shall be 4618 & 4574 while the market will experience resistance at 4712 & 4753.

Trading Strategy for 1 Sep, 2009:

Buy NTPC above 212 with a Stop Loss of 209 for a target of 217.

Buy TATA STEEL above 426 with a Stop Loss of 421 for target of 435.

Sell IDEA below 81 with a Stop Loss of 82 for a target of 78.

Sell BPCL below 505 with a Stop Loss of 510 for a target of 496.

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