Archive for September 25th, 2009

Know the Basics of Commodity Trading :) Part 1

commodity-trading-futures

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

πŸ™‚

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?

πŸ™‚

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.

πŸ™‚

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

πŸ™‚

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.

πŸ™‚

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.

πŸ™‚

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.

πŸ™‚

What’s more, you can also trade online.

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

πŸ™‚

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.

πŸ™‚

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

πŸ™‚

Stay Tuned for more and more on this πŸ™‚

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

Banks Pushes for Short Term Credit :)

banks-pushes-short-term-credit

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.

πŸ™‚

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.

😦

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.

😦

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

πŸ™‚

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.

πŸ™‚

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.

πŸ™‚

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

πŸ™‚

Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

QIPs Outstripped PE Funding & IPOs in Fund Raising Process ;)

QIP-investments-outpace-PEfunds

Qualified institutional placements (QIPs) have outstripped private equity (PE) funding since January by at least eight times, making it by far the most popular fund-raising route for firms this year.

πŸ™‚

QIPs raised at least Rs. 21,209 crore since January this year, while PE funds invested only Rs. 2,574 crore in listed firms.

πŸ™‚

QIPs have almost raised more than twice of initial public offerings.

A QIP is a private placement by a listed company of shares or securities convertible to equity with qualified institutional buyers approved by market regulator Securities and Exchange Board of India(SEBI).

πŸ™‚

Data from Delhi-based investment bank SMC Capitals Ltd shows another 48 QIPs worth Rs.43,891 crore are in the pipeline.

But analysts do not expect a significant rise in the number of, or funds through, PE deals this year.

πŸ™‚

Typically, PE investments take up to six months to complete, whereas a QIP can be done in up to four weeks, making the fund-raising process faster and more reliable since the institutional buyers are selected carefully.

πŸ™‚

Also, in a QIP, the institutional buyers rarely seek a seat on the company board, or management control, a common practice in large PE deals.

πŸ™‚

Since PE is perceptionally intrusive for promoters, QIP serves as a good alternative.

However this QIP structure is liked by investors and firms as in a QIP the window is shorter and money can be raised quickly.

πŸ™‚

While real estate firms typically prefer QIPs for their need of capital at short notice, the companies currently waiting to do QIPs are across sectors, including telecom, entertainment, retail and information technology.

πŸ™‚

In line for QIPs are Reliance Communications Ltd, Pyramid Saimira Theatre Ltd, Pantaloon Retail (India) LtdΒ  and few more.

πŸ™‚

Some firms, though, have taken both routes for their funding needs.

Historically, PE investments in India have been in the form of private investments in public enterprises, or PIPEs, which also happen to the only firms eligible for QIPs.

πŸ™‚

β€œPrivate equity investors have missed the boat,” Jagannadham Thunuguntla, head of SMC Capitals, said in a statement.

Companies that are in the pipeline for QIPs may also look for American depository receipts or global depository receipts for funds, heΒ  added.

πŸ™‚