Archive for August, 2009

Weekly Equity Update 21st-28th August :)

Weekly Update

After closing almost flat in penultimate week, in the week gone by markets closed in green terrain following the global markets which rallied to 10-month highs buoyed by renewed hopes that the global economic recovery is gathering pace and is pulling out of its deepest recession since the 1930s.

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Closer home, revival of monsoon rains, fresh buying by FIIs and firm European market boosted sentiment.

Moreover the statement made by FM that government expects GDP growth to accelerate to over 8% in 2010-11, with the economy showing signs of recovery, acted as a booster to markets.

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However it is expected that higher food prices will lead to WPI inflation accelerating to 6% in the fiscal year to March 2010.

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On the world economic front, the US economy shrank at an annual pace of 1% between April and June 2009, unchanged from an initial estimate released last month.

From the United Kingdom, its economy contracted 0.7% in the second quarter as the recession prompted companies to cut investment and inventories while consumers scaled back spending.

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Japan‘s exports tumbled and stood at 35.7% for a tenth straight month in July as demand from all of the nation’s major markets deteriorated.

Trend of all markets is up though Shanghai has topped out and moving down which is a cause of concern.

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Nifty has support between 4600-4500 and Sensex between 15500-15000.

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Once again commodities have shown the buoyancy that they can hold the support.

One or two day’s correction in the prices couldn’t break the trend of commodities. However upside is limited.

Resembling last week, current week as well is jam-packed of event risk as GDP data of many countries will release which will make commodities volatile throughout the week accordingly.

Precious metals may trade in a range with upward bias.

Back at home, to see more upside it has to trade above the level of 15000 in MCX.

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In agro commodities, buying may return in spices as recent fall in the prices has made Indian parity more competitive in international market.

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MARKET OUTLOOK

Trend of all markets is up though Shanghai has topped out and moving down which is a cause of concern.

It seems that currently US markets are determining the overall trend and our markets might be linked up with US markets now as we have broken above 4730 Nifty.

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If US markets don’t react, then we should be seeing higher levels ahead.

Nifty has support between 4600-4500 and Sensex between 15500-15000.

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EQUITY TABLES :

1. Indian and Sectoral Indices :

weekly indices update

2. BSE Movers and Shakers & IA Equity Figures

BSE Movers and Shakers & IA Equity Figures

3. NSE Movers and Shakers :

NSE Weekly Movers and Shakers

4. MONEY MARKET & ECONOMIC INDICATORS :

MONEY MARKET & ECONOMIC INDICATORS

5. GLOBAL INDICES :

Weekly GLOBAL INDICES


From the United Kingdom, its economy contracted 0.7% in the second quarter as the recession prompted companies to cut investment and inventories while consumers scaled back spending.

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Where Are We Heading To? Part 2

Indian Stock Market Growth

From the positive happenings in the economy, let’s see how the stock markets have behaved amidst all this?

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The price charts of many companies reflected that the investors were in a catch-up mode.

This was evident from the stock price trajectory of most stocks, which saw a sharp spike in few days.

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In many cases, the stock prices nearly doubled in a matter of few trading sessions.

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It’s a kind of emotion that grips a commuter when he/she loses a train or bus by a fraction of a second.

When we see a bus/train departing in front of our eyes, we rush towards to it without caring about the risks involved.

What if you hurt yourself badly in the process? But who cares?

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Those days seem to be back where most of the frontline stocks are at their 52-week highs or better, but, still their valuations, measured by various ratios such as price-to-earning multiples or price-to-book value among others are far from the highs of 2008.

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Valuations come with expectations. πŸ™‚

Higher the valuations, greater is investor expectation from that particular stock.

To justify the elevated valuations, corporate earnings have to grow at a significant rate.

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Companies also have to improve the quality of earning i.e. the profit growth has to be accompanied with an equally rapid rise in cash flows and dividends payouts.

But can this really happen? To support this, we have the World Bank statement, who said that India would grow 8.1 per cent in 2010, ahead of China (7.5 per cent).

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The numbers in the survey also suggest India is finally ready to rub shoulders with its northern neighbour.

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The point is, India is better placed to face the economic slowdown as compared to other large economies because of the diversified nature of the economy in which some sectors witness robust demand to mitigate the impact of a demand slowdown in other sectors.

It is clear that the Indian economy is recovering from the clutches of the world economic crisis.

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Even the performance of the stock market has shown signs of revival of investor interest and confidence, both domestic and

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The confidence of FIIs in India started to built up in the last few months which is evident from the FII figure mentioned above and tends to be in upbeat mood going forward.

Therefore, even if economic growth does recover in India, it would be a different than what we have seen in the past.

And to gain, investors will have to offload baggage of the past and look at the future afresh.

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Where are we heading to? Part 1

Growth in Indian Industry

The Indian economy’s business sentiment has improved indicating a path of recovery.

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Let’s see, why do we say this?

A surprise improvement was witnessed in the IIP numbers for June 2009 at 7.8%.

The WPI based inflation has softened to below zero level.

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However, the prices of items of mass consumption (food articles) show no signs of softening and have risen substantially due to supply side constraints.

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The performance of inward investments has been fairly well.

The Foreign Direct Investment flows surged 13% at $4.3 bn for April-May 2009-10.

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Painting a picture of a resilient economy, Finance Minister believes the economy will grow by more than 6% despite a fear of drought and the decline in the sowing of the kharif crop, such as rice.

The strength of the economy in the slowdown is the large services sector, which has, historically, been less affected by cyclical downturns than manufacturing, a strong farm sector, robust savings rate, ambitious infrastructure development programme and upbeat foreign investors.

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The 224-million-tonnes cement industry is yet again set to strike a growth of 10 per cent in June.

The production numbers from the top cement makers are anything to go by, the continuous robust growth will be maintained.

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The Rs 82,000 crore Indian FMCG industry primarily seeking the implementation of the GST (Goods & Services Tax) by April 1, 2010 in the upcoming Union Budget, expects fiscal measures will spur growth of the FMCG sector in rural as well as urban India.

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Further, in a sign of confidence in the Indian markets, Foreign Institutional Investors pumped in over $6 billion, or about Rs. 29,940 crore this year, with over $1 billion coming in July alone.

An analysis of FIIs activity shows that overseas investors are the net purchasers of Indian stocks worth $6.18 billion (Rs 29,940.30 crore) from January to July this year.

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Also, with the India-Asean (Association of South-East Asian Nations)Β  that inked the long awaited Free Trade Agreement (FTA) for duty-free import and export of 4,000 products over a period of eight years at the Asean economic ministers meeting held in Thailand, the India-Asean trade is likely to surpass $50 billion by 2010.

The Indian economy’s business sentiment has improved indicating a path of recovery. Let’s see, why do we say this?

A surprise improvement was witnessed in the IIP numbers for June 2009 at 7.8%. The WPI based inflation has softened to

below zero level. However, the prices of items of mass consumption (food articles) show no signs of softening and have

risen substantially due to supply side constraints. The performance of inward investments has been fairly well. The

Foreign Direct Investment flows surged 13% at $4.3 bn for April-May 2009-10.

Painting a picture of a resilient economy, Finance Minister believes the economy will grow by more than 6% despite a fear

of drought and the decline in the sowing of the kharif crop, such as rice. The strength of the economy in the slowdown is

the large services sector, which has, historically, been less affected by cyclical downturns than manufacturing, a strong

farm sector, robust savings rate, ambitious infrastructure development programme and upbeat foreign investors.

The 224-million-tonnes cement industry is yet again set to strike a growth of 10 per cent in June. The production

numbers from the top cement makers are anything to go by, the continuous robust growth will be maintained.

The Rs 82,000 crore Indian FMCG industry primarily seeking the implementation of the GST (Goods & Services Tax) by

April 1, 2010 in the upcoming Union Budget, expects fiscal measures will spur growth of the FMCG sector in rural as well

as urban India

Further, in a sign of confidence in the Indian markets, Foreign Institutional Investors pumped in over $6 billion, or about

Rs.29,940 crore this year, with over $1 billion coming in July alone. An analysis of FIIs activity shows that overseas

investors are the net purchasers of Indian stocks worth $6.18 billion (Rs 29,940.30 crore) from January to July this year.

Also, with the India-Asean (Association of South-East Asian Nations) Free Trade Agreement (FTA) that inked the longawaited

Free Trade Agreement (FTA) for duty-free import and export of 4,000 products over a period of eight years at the

Asean economic ministers meeting held in Thailand, the India-Asean trade is likely to surpass $50 billion by 2010.

SEBI releases guidelines for interest rate futures :)

Interest Rate Futures

Market regulator SEBI on Friday issued guidelines for trading in interest rate futures under which the 10-year government securities can be traded on bourses, a development that will deepen the debt market.

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As per the guidelines, the contract size for futures trading would be Rs 2 lakh with a maximum maturity period of 12 months.

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The contract cycle, it added, would consist of four fixed quarterly contracts expiring in March, June, September and December.

The notional coupon rate for such trade, the guidelines said, would be 7 per cent to be compounded every six months.

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Welcoming the move SMC Capitals Equity Head Jagannadham Thunuguntla said, “It is a right step by SEBI. This will activate the debt market in the country.”

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The guidelines further said stock exchanges will have to seek approval of the SEBI before starting trading in interest rate futures in their currency derivative segment.

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The clearing system for the interest rate futures, it added, would be the same as for the currency derivatives segment.

The exchanges will also be required to disclose upfront the composition of the basket of deliverable grade securities and the associated conversion factors for each of the quarterly contract.

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Sebi’s Another Jolt to the Fund Houses – MF Exit Load for 1st Year !!

MF Exit Load Charges


Within weeks of shaking up the mutual fund industry by abolishing entry load in all schemes and moving to a uniform exit load regime, Sebi has given another jolt to the fund houses.

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The Securities and Exchange Board of India (Sebi), in a meeting with mutual fund heads, has recommended that the tenure for charging of exit loads be made uniform at one year.

This move is seen as Beneficial for Investors.

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Sebi suggested fund houses to move to a regime of charging exit loads only for the first year of investments.

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After Sebi mandated that all entry loads should go and exit loads should be uniform across-the-board, fund houses had gone into a rejig mode with their finances so that they could compensate MF distributors.

The change in the compensation structure was done with the assumption that exit loads could be there for perpetuity.

But β€œthe recent Sebi suggestion on exit load has sent all those changes to the compensation structure for a toss,’’ said a top official at a fund house.

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The Sebi chairman C B Bhave advised that increasing the exit tenure beyond a year would not be in keeping with investor interest.

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MF industry officials said that limiting exit load to a year could lead to increased inclination among investors to move out of a scheme if the returns over one year are good.

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Earlier, as part of the rejig exercise to change the compensation structure, a host of fund houses had increased exit load period.

Now if Sebi’s advice becomes a rule, all those will have to be reversed, industry players said.

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However, as the CEO of a fund house pointed out that so far Sebi has not come out with any formal letter. β€œIt’s still evolving. I believe a lot of things can happen before it is formally notified,’’ said the fund house CEO.

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Within weeks of shaking up the mutual fund industry by abolishing entry load in all schemes and moving to a uniform exit load regime, Sebi has given another jolt to the fund houses.

The Securities and Exchange Board of India (Sebi), in a meeting with mutual fund heads held on Tuesday, has recommended that the tenure for charging of exit loads be made uniform at one year.

In a late evening meeting on Tuesday, Sebi suggested fund houses to move to a regime of charging exit loads only for the first year of investments.

After Sebi mandated that all entry loads should go and exit loads should be uniform across-the-board, fund houses had gone into a rejig mode with their finances so that they could compensate MF distributors.

The change in the compensation structure was done with the assumption that exit loads could be there for perpetuity.

But β€œthe recent Sebi suggestion on exit load has sent all those changes to the compensation structure for a toss,’’ said a top official at a fund house.

β€œOur capacity to pay to the distributors will reduce substantially,’’ said the head of a local fund house.

“The Sebi chairman C B Bhave advised that increasing the exit tenure beyond a year would not be in keeping with investor interest,”

MF industry officials said that limiting exit load to a year could lead to increased inclination among investors to move out of a scheme if the returns over one year are good.

Earlier, as part of the rejig exercise to change the compensation structure, a host of fund houses had increased exit load period.

Now if Sebi’s advice becomes a rule, all those will have to be reversed, industry players said.

However, as the CEO of a fund house pointed out that so far Sebi has not come out with any formal letter. β€œIt’s still evolving. I believe a lot of things can happen before it is formally notified,’’ said the fund house CEO.

Indian Stocks Rise; Bharti, Telecom Companies Lead Advance

Bull & Bears

Indian stocks rose for the seventh day, driving the benchmark index to its highest monthly gain in more than a year. Telecom shares led gains after the government said it aims to auction high-speed mobile phone service permits.

Bharti Airtel Ltd., the largest mobile operator, jumped to a three-month high on news that so-called 3G licenses will be auctioned off at a starting price of 35 billion rupees ($716 million).

The Bombay Stock Exchange’s Sensitive Index, or Sensex, added 108.66, or 0.7 percent, to 15,889.73, according to preliminary closing prices. The gauge gained 4.3 percent this week. The S&P CNX Nifty Index on the National Stock Exchange advanced 0.8 percent to 4,723.85. The BSE 200 Index rose 0.7 percent to 1,945.33.

Building your Financial Future After a Divorce

financial-planning-after-divorce

You need to do long term financial planning when you are goingΒ through a divorce. It’s important that you recover from the split by assessing your situation as singles and setting up new financial plans with a focus on longevity. Here are five simple steps for building your financial future after a divorce:

1. Start with a plan.

Take a look at your finances before the divorce and then subtract what you’ve lost to give you a good perspective on your fiscal situation. Be realistic with yourself and set a budget that you can easily manage with your new single status.

2. Check your credit.

Maintaining your credit is an important step in walking away from a divorce financially intact. Examine your credit reports and ensure that any name changes or card closures are accurate and taken care of.

3. Ensure your retirement.

Confirm that all of your retirement arrangements are intact and that any assets or funds you are entitled to have been taken care of. Division of savings and accounts should be paramount in your review.

4. Obtain the necessary insurance.

Examine your insurance policies and make sure that you and your property are still covered.

5. Review your taxes.

Understanding the tax ramifications of your divorce is a key part of planning for your financial future. Confirm that all tax responsibilities between you and your spouse are coordinated appropriately.