Posts Tagged ‘Fidelity’

SMC Global Securities : A Leading Financial Services Provider in India :)

Before You Realise Your Loved Ones Will Grow πŸ™‚

If you find yourself asking the question –

Why should I Save ?

Why should I Invest ?

Where do I Invest ?

Who would Guide me to take informed decision on my Investments ?

…then look no further !

[:)]

SMC Global Securities, a leading Financial services provider in India, a vertically integrated investment solutions company, with a pan-india presence is there to guide you and provide complete investment solutions to you.

πŸ™‚

Currently, SMC has a highly efficient workforce of over 4,000 employees & one of the largest retail network in India currently serving the financial needs of more than 5,50,000 satisfied investors.

πŸ™‚

WEB:

http://www.smcindiaonline.com

http://www.facebook.com/pages/
SMC-GLOBAL-INVESTMENT-SOLUTION/
104149467952?ref=nf

http://www.facebook.com/group.php?
gid=90885076779&ref=ts


http://smcinvestmentsolutionindia.ning.com

http://networkedblogs.com/blog/smc_global
_blog_moneywise_be_wise/

If you find yourself asking the question –

Why should I Save ?

Why should I Invest ?

Where do I Invest ?

Who would Guide me to take informed decision on my Investments ?

…then look no further !

SMC Global, a leading Financial services provider in India, a vertically integrated investment solutions company, with a pan-india presence is there to guide you and provide complete investment solutions to you.

Currently, SMC has a highly efficient workforce of over 4,000 employees & one of the largest retail network in India currently serving the financial needs of more than 5,50,000 satisfied investors.

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.

Private Equity Funds Shying Away from PIPEs

Private equity-money-indian-rupees

Indian private equity firms are currently disinclined to conduct private investments in public equity (PIPE) deals, according to a report in the Business Standard. Their reticence is thought to be due to the recent secondary market crash, and the uncertainty that ensued.

According to the report, which cites a study by Venture Intelligence, private equity firms announced 24 PIPE deals in H1 2009, which were worth around $349m – a massive 68 percent decline on H1 2008’s $1.58bn, across 68 deals.

In addition, PIPE deals comprised 12 percent of the total private equity deal value – $2.89bn – for H1 2009.

For instance, in 2008, the value of Pipe investments worth $1.67 billion eroded to $1.22 billion, an absolute loss of $0.45 billion (26.85 per cent), said an SMC Capital report.

Vishal Tulsyan, chief executive officer of Motilal Oswal suggested to the Business Standard that losses arising from mark-to-market accounting may be partially to blame for this trend.

β€œPEs are staying away from PIPE deals due to the mark-to-market issue. PEs invest for a time-frame of four-six years. Since the market is uncertain, one would not like to take risk,” he said.

Furthermore, valuations have risen in the last nine months or so. β€œPIPE deals are not cheap anymore. The capital market makes sense for people who are looking at quick appreciation. The market has been range-bound and very volatile,” said Alok Gupta, the chief executive officer of Axis Private Equity, speaking to the Business Standard.

Private Equity Players Making Smart Exits!!

private equity players

Private equity players have finally made smart exits after the market turned northward during the last five months.

😦

PE players sold PE shares worth about Rs 1,500 crore during this period using the bulk and block deal window.

According to an ET analysis, selling primarily took place during the month of May and August, 2009 and major sellers included Chrys Capital and Citigroup Venture Capital.

😦

According to Jagannadham Thunuguntla, equity head at SMC Capitals, the severe correction in the stock market during the year 2008 resulted in substantial losses to private equity players which invested in listed companies.

The recent upward movement of the market helped in recovery of their losses.

This is also the main reason for private equity players selling their stakes.

πŸ™‚

As per another Expert, there are two main reasons for exit of PE players.

β€œEveryone is doing a business and one needs cash to carry out businesses. Market crash during September-October last year evaporated the liquidity” said an expert.

πŸ™‚

The positive rally of the equity market started on March 9, 2009. Since then the Sensex, has gone up by more than 84%.

In a block deal a minimum quantity of 5 lakh shares or shares with a minimum value of Rs 5 cr is transacted through a single transaction window provided by the stock exchange.

πŸ™‚

Whereas, if more than 0.5% of the number of equity shares of a company gets traded under a single client code, it is known as bulk deal.

πŸ™‚

Movers and Shakers of Today’s Market : 22nd AuG,2009 :)

gainers and Losers

MOvers and Shakers

πŸ™‚

Here we present you with the data of Top Gainers and Losers in BSE Index and NSE Nifty for today.

πŸ™‚

Top Gainers shows the list of stocks that have gained the most (% terms) compared to their last closing prices. πŸ™‚

πŸ™‚

Top Losers shows the list of stocks that have lost the most (% terms) compared to their last closing prices.

😦

1. Top Gainers in Sensex

πŸ™‚

Top Gainers Sensex

2. Top Losers in Sensex

😦

Top Losers Sensex

3. Top Gainers in Nifty

πŸ™‚

Top Gainers

4. Top Losers in Nifty

😦

Top Losers Nifty


Click HERE to view company’s detailed stock quote and company profile.

——————————————————————–

Top Gainers shows the list of stocks that have gained the most (% terms) compared to their last closing prices. πŸ™‚

Top Losers shows the list of stocks that have lost the most (% terms) compared to their last closing prices. 😦

VC/PE funds set their sight on Micro Finance companies :)

Venture Capitalists

Venture capitalists/PE (private equity) funds are now looking at investing in micro finance companies in India.

πŸ™‚

According to observers, around Rs 1,000 crore is expected to be invested by venture capitalists/PE funds in the Indian micro finance space (MFIs) this year.

πŸ™‚

In fact, of the 50 private equity deals worth $1 billion in banking and finance in the last 18 months, MFIs alone accounted for 20 deals amounting to $200 million.

πŸ™‚

Apart from MFI focused funds, other venture capitalists and PE funds who consider opportunities in the financial services space are now adding micro finance to their portfolio.

Many venture capitalists are excited about investing in this space now.

Many MFIs especially south-based ones have the right professionals and processes in place. Early stage investors are keen to enter this space.

πŸ™‚

The venture fund does early stage investment and primarily focuses in healthcare and technology.

πŸ™‚

Many MFIs have also demonstrated scalability of the business and also boast of a good management structure, essential elements for VC/PE funding.

πŸ™‚

The PEs Exodus???

The PE Exodus

Several PE Funds seen selling investments in Open Market.

As per Jagannadham T, equity head, SMC Capitals, the recent bounce in the markets have come as a fresh breather of life for many PE investments and they are using it to exit from some of the investments.

To know more on this issue watch the Video πŸ™‚

CLICK HERE



Institutional Investors have become more sceptical in committing funds!

Equity Head

Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more skeptical in committing funds without thorough research, experts says.

😦

The rush for PE investments into India has slowdown a bit at present.

Managers are studying the companies more carefully before making any new investment commitment as of now.

πŸ™‚

PE funds investing in India has turned cautious and limited partner or the part owners of funds are raising questions over the intent of the investment owing to the fact that global PE fund dipped to record lows during the second quarter of 2009.

😦

“Limited partners or institutional investors are increasingly becoming sceptical about their investment decisions and are questioning the intent of the General Partners,” SMC Capitals Equity Head Jagnnadham Thunuguntla said.

πŸ™‚

PE funds are now preferring to liquidate their stake asΒ Β  capital market sentiment is improved.

The degree of scepticisim in the Indian Market has reduced to what it was few months back.

πŸ™‚

However, with the capital market boom, PE funds are now preferring to exit via open market transactions,” Thunuguntla added.

πŸ™‚

However, India is among the few markets wherein the PE firms are still looking at investments in times of downturn, though cautiously.

During second quarter 2009, globally 89 private equity funds reached a final close securing $79.7 billion among them. as per the latest survey.

πŸ™‚

“The capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

The recent market bounce has given a fresh breather of life for several PE investments with impressive recovery of losses,” Thunuguntla said.

πŸ™‚

Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more sceptical in committing funds without thorough research, experts says.

Factors that Move the Interest Rates – Part 2 (MONETARY POLICY)

Monetary Policy

In previous Blog we have discussed about the major factors responsible for the change in interest rates and price of bonds indirectly.

All those three factors like Inflation, Currency and Liquidity have been touched upon in last blog.

πŸ™‚

Now time to look into another major factor which causesΒ  movement in the interest rate. The factor i am talking about is Monetary Policy. πŸ™‚

Monetary Policy: The RBI controls liquidity largely through monetary policy instruments –

(i) CRR & SLR – CRR (Cash Reserve Ratio) refers to a portion of deposits (as cash) which banks have to maintain with the RBI.

Banks are also required to invest a portion of their deposits in government securities as a part of their SLR (Statutory Liquidity Ratio) requirements.

If either of these is increased, liquidity tightens and so interest rates harden (increase).:(

Recently, RBI has reduced both these rates to infuse liquidity in the system – CRR is 5% (down 250 bps from March ’08) and SLR is 24% (down 100 bps).

πŸ™‚

(ii) Reverse repo rate – it is the overnight interest rate that a bank earns for lending money to the RBI in exchange for G-Secs.

A hike in reverse repo rate increases interest rates. Currently, reverse repo rate stands at 3.25%.

πŸ™‚

(iii) Repo rate – it is the discount rate at which a central bank repurchases government securities from the commercial banks.

To temporarily expand the money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities for cash).

To contract the money supply, it increases the repo rates. The current repo rate is 4.75%.

πŸ™‚

(iv) OMO and MSS – OMOs (Open Market Operations) are outright transactions in government securities.

When the RBI buys G-Secs, it is injecting money into the system, hence, increasing liquidity, which softens (reduces) interest rates.

When the RBI sells G-Secs, it sucks out excess money from the system i.e. reduces liquidity in the system which hardens interest rates.

MSS (Market Stabilisation Scheme) is the issuance of treasury bills and dated securities by way of auction by the RBI.

This affects interest rates in the same manner as OMOs.

πŸ™‚

Having collected updates on where the above parameters stand, one can have a better understanding of why interest rates are at their current levels, as well as which direction they are expected to move in.

πŸ™‚

If most of them indicate that a rise in interest rates is expected, bond prices are likely to fall in the future.

On the contrary, an expectation of a fall in interest rates means bond prices will rise.

A word of caution here though – timing interest rate changes is difficult. This is because there is a low likelihood of being able to precisely predict the movement in the factors discussed above.

So in order to minimize interest rate risk, one should ensure that the bond portfolio is diversified across various maturities.

πŸ™‚

4 Monetary Policy: The RBI controls liquidity largely through monetary policy instruments –

(i) CRR & SLR – CRR (Cash Reserve Ratio) refers to a portion of deposits (as cash) which banks have to maintain with the RBI. Banks are also required to invest a portion of their deposits in government securities as a part of their SLR (Statutory Liquidity Ratio) requirements. If either of these is increased, liquidity tightens and so interest rates harden (increase). Recently, RBI has reduced both these rates to infuse liquidity in the system – CRR is 5% (down 250 bps from March ’08) and SLR is 24% (down 100 bps).

(ii) Reverse repo rate – it is the overnight interest rate that a bank earns for lending money to the RBI in exchange for G-Secs. A hike in reverse repo rate increases interest rates. Currently, reverse repo rate stands at 3.25%.

(iii) Repo rate – it is the discount rate at which a central bank repurchases government securities from the commercial banks. To temporarily expand the money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities for cash).

To contract the money supply, it increases the repo rates. The current repo rate is 4.75%.

(iv) OMO and MSS – OMOs (Open Market Operations) are outright transactions in government securities. When the RBI buys G-Secs, it is injecting money into the system, hence, increasing liquidity, which softens (reduces) interest rates. When the RBI sells G-Secs, it sucks out excess money from the system i.e. reduces liquidity in the system which hardens interest rates. MSS (Market Stabilisation Scheme) is the issuance of treasury bills and dated securities by way of auction by the RBI. This affects interest rates in the same manner as OMOs.

Having collected updates on where the above parameters stand, one can have a better understanding of why interest rates are at their current levels, as well as which direction they are expected to move in. If most of them indicate that a rise in interest rates is expected, bond prices are likely to fall in the future. On the contrary, an expectation of a fall in interest rates means bond prices will rise. A word of caution here though – timing interest rate changes is difficult. This is because there is a low likelihood of being able to precisely predict the movement in the factors discussed above. So in order to minimize interest rate risk, one should ensure that the bond portfolio is diversified across various maturities.

Factors that Move the Interest Rates – Part 1:)

Interest rates

In earlier blog we have discussed about how Bonds are different than equities and why are they considered less risky instruments. πŸ™‚

Now coming on to this blog, we would talk about the 3 major factors (other than monetary policy) which moves the interest ratesΒ  and ultimately causes a price change in the Bonds.

πŸ™‚

To determine where the interest rates are headed, it is important to have an understanding of the factors that move the interest rates.

This will in turn help gauge which direction bond prices are going to take, and one can make appropriate adjustments to a bond portfolio in order to maximize gains or minimize losses.

πŸ™‚

1. Inflation:

Interest rates are directly related to inflation i.e. if inflation rises, so do interest rates.

This is because lenders demand higher interest rates to compensate for the decrease in purchasing power of the money they will be repaid in the future.

This causes bond prices to fall, since bond prices are inversely related to interest rates.

Inflation itself is affected by the economy’s currency and liquidity position.

In India, inflation is measured by WPI (Wholesale Price Index), for which is released every week.

For the week ended July 25, 2009, WPI was at (-) 1.58%. This may lead one to assume that inflation has gone down, but the reason for this low figure is a high base effect from 2008, when WPI showed doubledigit growth.

Current CPI (Consumer Price Inflation) figures are in the range of 8.6-11.5% for May-June 2009.

πŸ™‚

2. Currency: A weaker rupee causes rising inflation, which in turn results in a rise in interest rates.

This is because one’s purchasing power reduces – if one was paying $60 or Rs.2400 (Rs.40=$1) to buy 1 barrel of crude oil, a weaker rupee (Rs.45=$1) means the same 1 barrel will now cost Rs.2700 i.e. Rs.300 more.

Similarly, a stronger rupee increases one’s purchasing power and brings down inflation, causing interest rates to fall.

The latter scenario is seen as a positive for the bond market, since it leads to rising bond prices.

Since 2008, the rupee has weakened significantly to Rs.47- 48 in July-August ’09.

😦

3. Liquidity: Interest rates are directly related to liquidity.

A crunch in liquidity means money is not readily available, since people are not willing to part with their cash.

A lower interest rate is then offered, which increases the price of already existing bonds in the market. The vice-versa also holds true.

One way of measuring the liquidity present in the system is to check the money supply measure – M3.

πŸ™‚

There is another factor which is responsible for the movement in interest rates that is Monetray Policy which we would discuss in next blog

πŸ™‚

To determine where the interest rates are headed, it is important to have an understanding of the factors that move the interest rates. This will in turn help gauge which direction bond prices are going to take, and one can make appropriate adjustments to a bond portfolio in order to maximize gains or minimize losses.