Archive for September, 2009

Default On Even One?? Face Blocking of All Your Credit Cards :)

Banks to block all credit cards for default on one

Banks to block all credit cards for default on one

Due to severe measures being adopted by the banks, the comfort of using either of the multiple credit cards owned by the customer in case they default on making payments for even one will now not be allowed as the banks have now amended their credit card terms and conditions.

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Additionally, ICICI Bank already informed its customers about the change, coming into effect from October 5.

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Moreover, according to the new terms, if a customer holds two or more cards and fails to pay in one of the card accounts, the bank can block the credit limit as made available to the card member under all other ICICI Bank’s card accounts.

Also they will pull out such privileges/ benefits as made available under all such card accounts, till such time the defaulting card account is regularized by the card member.

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In addition, banks also authorized themselves with a tool that allows them to ask employers to subtract the outstanding amount from the salary while employees who may have defaulted on payment cannot object to this deduction of dues at source.

On the other hand, such deductions will be submitted to the bank and continued till the entire dues are recovered.

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Moreover the revised terms and conditions state no law or contract governing either the card holder or employers stops the bank from seeking such deduction and subsequent payment by the employer to the bank.

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The country’s largest private sector lender, ICICI Bank, has already informed its customers about the change, coming into effect from October 5, while other banks will soon follow the suit.

SEBI Asked BSE to Set its House in Order before Planning a Listing !!

Sebi has asked BSE to set its house in order before planning a listing :)

Sebi has asked BSE to set its house in order before planning a listing ๐Ÿ™‚

The Securities and Exchange Board of India (Sebi) asked BSE to set its house in order before planning a listing.

Of late, BSE has planned to list on the exchange for sometime and had approached Sebi for permission to list without an initial public offer.

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Sebi, however, also has to formalize norms for regulating self-listed companies while in order to sell their shares, some BSE members were eager on the listing of the exchange.

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Moreover, the market regulator communicated its position to the stock exchange informally and BSE started steps to develop its technology platform.

In addition, BSE acquired Marketplace Technology (MT) in order to offer back-office solutions for brokers estimated at Rs 43 crore.

On the other hand, BSE, over the years has regularly lost out to NSE on the technology front and new players like Financial Technologies are trying to ride the technology path setting up exchanges such as Multi-Commodity Exchange (MCX) and MCX Stock Exchange.

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Further, BSE has lost the top slot in terms of turnover even though it has more companies listed on it .

It will also be re-launching its derivatives trading and a new marketing campaign which is likely to help it popularize the product.

The move comes at a time when others such as MCX-SX are trying to enter the space.

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Festivals and Trading Holidays Set to Keep Dalal Street Less Lively This Week :)

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week, as festive mood and fewer trading sessions would see investors withhold their positions and postpone buying, analysts said.

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Brokers believe the market sentiment will remain positive, even as investors will get only three trading sessions before the second quarter results of companies starts coming in.

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“The market is expected to remain in consolidation phase on the back of less trading sessions and festive season,” SMC Global Vice-President Rajesh Jain said.

The market would trade only for three days this week, as Monday and Friday will be trading holidays on the occasion of ‘Dussera‘ and ‘Gandhi Jayanti‘, respectively.

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Over the week, the BSE Sensex slid 193.43 points, or nearly 1.14 per cent and closed at 16,693 points.

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The under current in the market is bullish, there are not much expectations by investors for this week, while stocks may also look for global cues,experts observed.

The result season will kick start with IT major Infosys scheduled to announce its second quarter results on October 9.

During the last week, foreign institutional investors have put in over Rs 6,528.1 crore in Indian markets.

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EPFO Panel to Meet in October for Parking Money in Stock Market

The Finance and Investment Committee (FIC), key advisory body of the Employees Provident Fund Organization, would meet next month in order to take a view on parking 3 to 5 per cent of its large corpus of Rs 2.57 lakh crore in the capital market.
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As per the EPFO sources, this was a long pending issue and was likely to be discussed at the committee meeting scheduled next month. If this proposal got the nod then it would result flowing of Rs 13,000 crore into the stock markets. FIC would make necessary recommendations to Central Board of Trustees, EPFO”s apex body, for the final decision, after the evaluation of the proposal

At a recent meeting of FIC, it was felt in order to enhance or maintain overall returns to the subscribers as fixed-income products, an alternative avenues are a must.

CBT this July had dumped the proposal of parking up to 15 per cent of its funds in equities. However, K P Krishnan, joint secretary in the finance ministry, then told the trustees that EPFO could start parking 3-5 per cent of corpus in stock markets, if CBT members had reservations about investing in equities.

BULLION TURNING TO BILLION

Gold has always been one of the favorite avenues for investors to put their money during any economic uncertainty. We’re into a new phase of this bull market that’s been going on since 2004. Factors like the credit crisis, ups and downs in the global economy, the response of the governments and the monetary authorities set up a very positive environment for gold, not only in the near term, but many years to come.
On the contrary,jewelry demand, however, has fallen off a cliffโ€”it’s almost non-existing right now and a lot of scrap is coming into the market due to very high prices. This is also one of the reasons for which we had witnessed some range bound moves in gold prices in past few months. (Two dynamics in the gold market were pulling against each other as strong investment demand and very weak jewelry demand.
Gold is up by roughly 250% since 1999 and approx. 25% from Sept. 2008 till date as we’re seeing money coming into the gold sector. I think the gold market is out of crisis mode. It has been recognized as an alternative, as a safe haven hedge. Sentiment among investors, especially individuals, is very positive. It’s mainly high net worth individuals who are buying the stuff up with a long-term view. Over the period of time we have also seen that investors are putting more and more money into gold as an investment. However, this increase in investment has come from tiny levels. Retail investment in gold remains tiny comparative to investments in equity and bond markets. Also, the physical gold market is such a tiny market comparative to equity, bond, currency and derivative markets that even small flows from these massively larger markets can result in outsize moves up in the gold price in future.

Gold has always been one of the favorite avenues for investors to put their money during any economic uncertainty.
Gold Coin

We’re into a new phase of this bull market that’s been going on since 2004. Factors like the credit crisis, ups and downs in the global economy, the response of the governments and the monetary authorities set up a very positive environment for gold, not only in the near term, but many years to come.

On the contrary,jewelry demand, however, has fallen off a cliffโ€”it’s almost non-existing right now and a lot of scrap is coming into the market due to very high prices. This is also one of the reasons for which we had witnessed some range bound moves in gold prices in past few months. (Two dynamics in the gold market were pulling against each other as strong investment demand and very weak jewelry demand.

Gold is up by roughly 250% since 1999 and approx. 25% from Sept. 2008 till date as we’re seeing money coming into the gold sector. I think the gold market is out of crisis mode. It has been recognized as an alternative, as a safe haven hedge. Sentiment among investors, especially individuals, is very positive. It’s mainly high net worth individuals who are buying the stuff up with a long-term view. Over the period of time we have also seen that investors are putting more and more money into gold as an investment.

However, this increase in investment has come from tiny levels. Retail investment in gold remains tiny comparative to investments in equity and bond markets. Also, the physical gold market is such a tiny market comparative to equity, bond, currency and derivative markets that even small flows from these massively larger markets can result in outsize moves up in the gold price in future.

G-5, G-8..Not Anymore..Its G-20 Now !!

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For the world, apparently, eight is no longer enough.

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The G-8 group of powerhouse economies, which expanded from the original G-5 one by one over three decades, stepped off center stage Friday with the ascension of the G-20 into the role of overseeing the global economy.

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The Group of 20 will take on the role of caretakers of the global economy.

The shift toward multilateral decision-making is sure to please some emerging economies โ€” China and India in particular โ€” and irritate those Americans who believe the United States shouldn’t be handing off its power to international institutions.

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Heading into the second day of a summit aimed at ensuring the world economy emerges from its worst recession in generations with better safeguards against another crisis, the G20 also vowed to keep emergency economic support in place until a recovery is secured, according to the draft obtained by Reuters.

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The document said G20 countries had a “responsibility to the community of nations to assure the overall health of the global economy” and pledged to try to secure next year a deal in long-running world trade talks.

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Larger G-20 would take over โ€” a council that, by simple virtue of a membership that unites more than 80 percent of the global economy, and would be a force to be reckoned with.

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The group, which also accounts for 90 per cent of the world’s economic output, also agreed to rein in financial industry excesses that triggered the credit crisis two years ago, and to tighten rules on how much capital banks must have to absorb losses.

The new rules aimed at improving the quality and amount of capital should be ready by the end of 2010 and will be phased in in the following two years, the draft said.


Rabi Crops Get a Lifeline on Late Rains :)

Lets Get to know of the latest Agri updates in the country ๐Ÿ˜€

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Rabi Crops Get a Lifeline on Late Rains:

Considering cumulative rainfall from June to September, expected retention of moisture in soil between October and December, and recharge in the ground water level, the agriculture ministry expects no major dip in the coverage of food crops in the coming rabi season.

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As for other rabi crops in 2009, the ministry sets the rice production target at 14.5 mt, for jowar at 3.9 mt and barley at 1.6 mt, which are almost similar to the last yearโ€™s level.

According to the fourth round of estimate by the ministry, rice production in the last rabi season was 14.6 mt, barley 1.5 mt and jowar 4.2 mt.

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At the same time, it has asked all wheat growing states to ensure that sowing of wheat is completed by the end of November and to see that maximum areas are covered with high yielding and high temperature tolerant varieties.

In Other major Agri Updates we can see that Monsoon has withdrawn and has left 22% shortfall in the country.

An erratic monsoon, which left the country 22 per cent short of normal seasonal rainfall and caused concern about the kharif harvest, has finally begun to withdraw, almost three weeks later than normal.

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The total monsoon rainfall this year till September 23 was estimated by the IMD at 66.83 cm, about 22 per cent below the normal level of 85.87 cm for the period.

According to the India Meteorological Department (IMD), the withdrawal line today passed through Ganganagar, Churu, Jodhpur and Barmer in Rajasthan.

However, many other parts of the country will still continue to get rain.

The maximum deficiency is in the north-west (34 per cent), followed by the north-east (25 per cent), central India (19 per cent) and southern peninsula (8 per cent).

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Know the Basics of Commodity Trading :) Part 2

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Hello Friends,yesterday we discussed about the importance and need for Commodity Trading.

Now its time to understand and know that how can we do commodity trading, what is the process for that and how commodity trading works

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Here we go with first question of the topic for the day ๐Ÿ™‚

How do you do commodity Trading?

When you buy a Gold Futures contract, you undertake to do three things.

1. Buy the amount of gold specified in the contract.

2. Buy it at the price specified in the contract.

3. Buy it on the expiry of the contract.

This could be after one month, two months, three months and so on.

Of course, if you sell the Gold Futures contract before it expires, then you don’t have to worry about actually buying the gold.

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Let’s say you buy the Gold Future contract at say Rs 15000 per 10 gm.

Your hunch comes true and the gold prices rally to Rs 16000 per 10 gm.

You can sell the Gold Futures any time before expiry of the contract.

Gold and other commodity futures prices are quoted on the commodity exchanges in exactly the same way in which stock prices or stock futures prices are quoted on a daily basis in the stock markets.

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Now let us see How Commodity Trading works?

They work just like stock futures :).

When you buy a Futures, you don’t have to pay the entire amount, just a fixed percentage of the cost.

This is known as the margin.

Let’s say you are buying a Gold Futures contract.
The minimum contract size for a gold future is 100 gms.
100 gms of gold may be worth Rs 72,000.

The margin for gold set by MCX is 3.5%.
So you only end up paying Rs 2,520.

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The low margin means that you can buy futures representing a large amount of gold by paying only a fraction of the price.

So you bought the Gold Futures contract when it was Rs 72,000 per 100 gms.

The next day, the price of gold rose to Rs 73,000 per 100 gms.

Rs 1,000 (Rs 73,000 โ€“ Rs 72,000) will be credited to your account.

The following day, the price dips to Rs 72,500.

Rs 500 will get debited from your account (Rs 73,000 – Rs 72,500).

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Things You need to know about Commodities Trading ๐Ÿ™‚

Compared to stocks, trading in commodities is much cheaper, because margins are much lower than in stock futures.

Brokerage is low for commodity futures.
It ranges from 0.05% to 0.12%.

Because of this, commodity futures are a speculator’s paradise.

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If you are a hard-core trader who follows the technical charts and do not really care what you trade, and if you are nimble and savvy, then commodity futures could be another asset class that you would be interested in.

The advantages in this line is that there are no balance sheets, no complicated financial statements.

All you need to do is follow the supply and demand position of the commodities you trade in very closely.

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Visit the commodities trading exchanges – NCDEX,NMCE and MCX – to find out which commodities are offered for trading, their contract size and other criterias.

You will have to get hold of a commodities broker but that should not be a problem.

There are lots of brokers that offer commodity trading these days.

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But, it would be wise to avoid commodity trading if you are a rookie or beginner.

A much better move would be always to initially trade in stock futures before opting for commodity futures.

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Just like stock futures (Read How to trade in Futures to understand how futures work).

When you buy a Futures, you don’t have to pay the entire amount, just a fixed percentage of the cost. This is known as the margin.

Let’s say you are buying a Gold Futures contract. The minimum contract size for a gold future is 100 gms. 100 gms of gold may be worth Rs 72,000.

The margin for gold set by MCX is 3.5%. So you only end up paying Rs 2,520.

The low margin means that you can buy futures representing a large amount of gold by paying only a fraction of the price.

So you bought the Gold Futures contract when it was Rs 72,000 per 100 gms.

The next day, the price of gold rose to Rs 73,000 per 100 gms.

Rs 1,000 (Rs 73,000 โ€“ Rs 72,000) will be credited to your account.

The following day, the price dips to Rs 72,500.

Rs 500 will get debited from your account (Rs 73,000 – Rs 72,500).

Know the Basics of Commodity Trading :) Part 1

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Are you comfortable enough to answer these given questions with certain level of confidence and conviction?

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For example,

What do you think gold prices will go up further?

Are you sure that crude oil prices are going to fall?

Have you heard that the soya crop this year is bad and will result in soya prices going up?

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If you think that your answers and predictions have a good chance of coming true and are willing to bet some money on them, you could try your hand at playing the commodity futures market.

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You might have heard about stock future trading quite often.ย  Lets discuss about commodity futures, now..

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The commodity markets have changed a lot from the poky, little hole-in-the-wall trading offices in narrow streets next to crowded markets where traditional dhoti-clad merchants used to trade.

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Now India’s boast of 3 major national level commodity exchanges

which are National Commodity and Derivative Exchange(NCDEX),

Multi Commodity Exchange (MCX) and National Multi

Commodity Exchange of India(NMCE).

These brand commodities exchanges have been set up and these are fully computerised.

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More and more stock brokers are setting up commodity brokerages as well, and trading volumes in commodity futures is widely predicted to rival the volume of derivative transactions (futures and options) on the stock exchanges.

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What’s more, you can also trade online.

Wellย  first lets talk on the need and importance of commodities trading.

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Why commodities trading?

Well, let’s suppose you want to buy gold because you believe that the price of gold will rise.

You could then buy gold ingots, store them, wait for them to go up in price, and then sell them at a profit.

But, you have to be sure that the gold you buy is pure, you have to find a place to store it, you have to provide the security, transport it to vault and other such hassles.

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A far better way to invest in gold would be to buy gold futures from the commodities exchange.

Next Blog we would touch upon issues like how can we do commodity trading, what is the process and how it works

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Stay Tuned for more and more on this ๐Ÿ™‚

However For More latest Industry,Stock Market and Economy News Updates, Click Here

Banks Pushes for Short Term Credit :)

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Banks have started pushing short-term credit to shore-up loan books before the end of the lean season.

Bank’s move is attributed to abundant liquidity.

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According to highly placed bank officials, credit off take continue to be lacklustre.

Credit growth this year was hardly a third of the level for the corresponding period of the previous year.

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This financial year, non-food credit was only Rs 29,133 crore as against Rs 98,840 crore during the corresponding year-ago period.

This translated into an incremental credit-deposit ratio of just 12 per cent as against 53 per cent for the same period of the last financial year.

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Meanwhile, the majority of corporate loan off-take (especially by large corporates) was in the form of short-term loans.

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Most of the loans are for short durations like of the 30 days.

These loans are refinanced with commercial paper (CP) issues.

Further, the loans were priced low, as between 7 and 8 per cent.

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Such short-terms advances were then repaid when corporate made their CP placements.

Last week alone, public sector corporates, including SAIL, had raised at least Rs 2,000 crore through six-month CP issues priced as low as 5 per cent.

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Bankers feel short-term credit push would help them beef-up loan books for the second quarter of the financial year.

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