A dumb guy's blog about investing and trading in the Indian Stock Market

Indian Technology Sector Prospects in 2010

2010-03-29T05:19:00.000-07:00

This article appeared in the March 2010 issue of Wealth Insight and was published on value research online.

From reaching starry highs to being virtually written off, to reaching for the skies again, information technology (IT) firms have come a long way. With the pressure of the recession decreasing on the West, they are again bagging new orders and getting old ones extended.

NASSCOM, which is charting this trend, says India’s IT and BPO exports are projected to grow 13-15 per cent in FY11 to $56-57 billion. For this fiscal, IT and BPO export revenues are seen growing 5.5 per cent to $49.7 billion. Added to the equation is the sizzling domestic demand for IT products.

The domestic market in this fiscal is expected to reach Rs 66,200 crore in revenue, which is a growth of 12 per cent over last year. Also, the next fiscal is expected to be better on the domestic front on greater public spending on e-governance. Even private companies are splurging on automation especially in retail, healthcare, and BFSI. This is likely to spur the growth rate to 15-17 per cent and revenue is seen at Rs 76,100-77,500 crore.

That the IT story is built on solid ground is evident from the bellwether — BSE IT index. It has consistently beaten Sensex. That does point to the near-term conclusion that the outlook, at least into the next fiscal (FY11), is positive, but beyond that uncertainty is overwhelming.

The good part of the trend is that the recovery of the IT sector had been led by the mid- and small-cap firms, thereby indicating they are getting savvier in promoting their businesses.

The top five firms have been treading a healthy path too with three of them logging a jump in net profits year-on-year (YoY), with Mphasis leading at 211 per cent, while Wipro’s stands at 67 per cent. But, HCL and Infosys net profits were down 35 per cent and seven per cent respectively. Quarter on Quarter (QoQ) the scene changes a little with net profits of Infosys rising almost 2 per cent. Wipro and HCL’s QoQ were negative. Mphasis has dominated on the net sales front, which surged 248 per cent as per December, 2009 data.

Prospects, going forward, for the industry remains positive. Take for example Infosys. The projected income growth YoY is anything between a range of 0.7 per cent to 1.5 per cent for the quarter ending March 31, 2010. BRICS Research summarises: “IT companies are expected to post better performances in FY11, but most of this is already factored in stock prices.”

On markets, the four top companies HCL, TCS, Wipro and Mphasis, barring Infosys, have posted over 200 per cent returns since the bull-run till February 23, 2010. Infosys returns was 115 per cent. Having gained handsomely, the valuations are already high, and prospects for upward movements are limited.

However, since, the industry’s fate is closely connected to the US economy, risks abound, especially as the unemployment rate there is going to stay high well into FY15. This indicated the US economy is going to log very slow growth, and IT companies here will chart a similar trend.

Budget 2010-11 will hit the IT sector too as it made no mention of the extension of a tax holiday scheme which ends in March, 2011. Also, the hike in Minimum Alternate Tax (MAT), which has been raised from 15 per cent to 18 per cent of book profits, will impact them adversely too.

Indian Stock Recommendations,latest brokerage reports

2010-03-28T05:09:00.000-07:00

NMDC Ltd (Hold)

Rs. 298.30 -5.90 (-0.06%)

STOP LOSS: Rs. 282.00 TARGET: Rs. 381.00

Ashu Bagri - Technical analyst at SBI Capital Securities

UCO Bank (Hold)

Rs. 56.30 0.40 (0.00%)

Sharad Avasthi - Senior equity analyst, SKP Securities

GAIL (India) Ltd (Hold)

Rs. 401.30 -0.40 (0.00%)

Sharad Avasthi - Senior equity analyst, SKP Securities

Larsen & Toubro Ltd (Hold)

Rs. 1635.55 -4.35 (-0.04%)

Sharad Avasthi - Senior equity analyst, SKP Securities

NMDC Ltd (Hold)

Rs. 298.30 -5.90 (-0.06%)

Sharad Avasthi - Senior equity analyst, SKP Securities

Bajaj Auto Ltd (Hold)

Rs. 1976.60 97.05 (0.97%)

STOP LOSS: Rs.1933.00 TARGET: Rs. 2020.00

Ashu Bagri - Technical analyst at SBI Capital Securities

Suzlon Energy Ltd (Hold)

Rs. 72.80 -0.20 (0.00%)

STOP LOSS: Rs.70.00

Mileen Vasudeo - Technical Analyst at Angel Broking

Cairn India Ltd (Hold)

Rs. 295.00 -3.45 (-0.03%)

Vikram Bhatt - Consultant at Positive Finnovationz

Dabur India Ltd (Hold)

Rs. 164.90 4.80 (0.05%)

STOP LOSS: Rs.146.00

Mileen Vasudeo - Technical Analyst at Angel Broking

ICICI Bank Ltd (Hold)

Rs. 947.70 22.10 (0.22%)

STOP LOSS: Rs.910.00

Mileen Vasudeo - Technical Analyst at Angel Broking

Unitech Ltd (Hold)

Rs. 71.40 -0.60 (-0.01%)

Naresh Pachisia - MD at SKP Securities

Latest Stock Recommendations

2010-03-19T22:28:00.000-07:00

Latest stock recommendations from the various research and brokerage firms

Reliance Industries Ltd (Hold)

Rs. 1089.80 14.75 (1.37%)

STOP LOSS: Rs.1060.00 TARGET: Rs. 1091.00
Ashu Bagri - Technical analyst at SBI Capital Securities

Technically, the stock has a strong resistance at around 1091 levels. The investor can hold the counter with a trailing-stop-loss at 1060 and exit at around 1091 levels.

Unitech Ltd (Hold)

Rs. 73.70 0.00 (0.00%)
Ashish Kapur - CEO at Invest Shoppe

The counter looks promising as the demand is picking up. Its debt is expected to go down. So the investor can hold from a long-term perspective, as the stock can pick up the momentum in coming days.

Unitech Ltd (Hold)

Rs. 73.70 0.00 (0.00%)

STOP LOSS: Rs.67.00 TARGET: Rs. 103.00
Ashu Bagri - Technical analyst at SBI Capital Securities

The counter can go up to 103 after breaking the immediate resistance of around 80 levels. The investor can hold the counter with a stop-loss at 67.

Bharti Airtel Ltd (Hold)

Rs. 311.85 11.85 (3.95%)
Ashish Kapur - CEO at Invest Shoppe

Fundamentally, the stock has good upside potential. The investor can hold and accumulate the counter from long-term perspective.

Bharti Airtel Ltd (Hold)

Rs. 311.85 11.85 (3.95%)

STOP LOSS: Rs.280.00 TARGET: Rs. 335.00
Ashu Bagri - Technical analyst at SBI Capital Securities

The counter looks upward in current trade-pattern. The investor can hold the counter with a strict stop-loss at 280 and exit at around 335 levels.

HDFC Bank Ltd (Hold)

Rs. 1818.20 15.15 (0.84%)
Ashish Kapur - CEO at Invest Shoppe

The housing sector is expected to boom in coming days and HDFC has a strong presence in housing loan segment. So its business looks secured and an investor can hold the counter from a long-term perspective.

HDFC Bank Ltd (Hold)

Rs. 1818.20 15.15 (0.84%)

STOP LOSS: Rs.2600.00 TARGET: Rs. 2685.00
Ashu Bagri - Technical analyst at SBI Capital Securities

The counter can go up to 3,292 if breaks the immediate resistance at around 2,865 levels. The investor can hold the counter with a trailing-stop-loss at 2600 for the first target at around 2865 levels.

Glenmark Pharmaceuticals Ltd (Hold)

Rs. 245.40 3.30 (1.36%)

STOP LOSS: Rs.229.00 TARGET: Rs. 272.00
Mileen Vasudeo - Technical Analyst at Angel Broking

The counter looks bullish technically. The investor can hold the counter for the target at around 272 levels with a stop-loss at 229 levels.

National Aluminium Company Ltd (Hold)

Rs. 403.25 0.60 (0.15%)

TARGET: Rs. 500.00
Vikram Bhatt - Consultant at Positive Finnovationz

Fundamentally, the stock looks positive. It has acquired new lease for its mines. The investor can hold the counter for medium-term target of 370 and long-term target of 500.

National Aluminium Company Ltd (Buy)

Rs. 403.25 0.60 (0.15%)

STOP LOSS: Rs.380.00 TARGET: Rs. 480.00
Mileen Vasudeo - Technical Analyst at Angel Broking

The stock can surge up to 480 levels after breaking the 414 resistance levels. The investor can hold the counter with a stop-loss at 380.

Indian Stock Screener Tools

2010-03-19T20:20:00.000-07:00

There are several ways to learn about new companies and sectors to invest your hard money in. I am being a dumb investor (yes, still I am even after a couple of years in the market!!) dependent so far on business news websites like moneycontrol.com, business-standard.com. Usually, I come across an interesting story, like millions of other readers, and then start to dig a little into sector and/or companies mentioned.

But, I learnt that this top-down approach is not the most effective way since the news papers, sites, analysts and brokerage firms can and will cover only a small percentage of the companies listed on NSE/BSE and you miss out on the bigger percentage where some of the best opportunities lie hidden. And you basically just follow the crowd since everyone have the same information as you!

So, the obvious (which was not so obvious till a week ago) question was "is there a better way?."

And the answer is yes, that’s what I got while reading a book yesterday and it’s called stock screening. Stock screening, simply put, is the process of filtering/identifying companies, from thousands across sectors and industries, based on parameters that meets an individual's risk, expected returns, and even taste. One example could be searching for companies with a dividend yield of 4% or more. Of course, this will only help you cut down the number of companies to look at from 1000s to, possibly, few 10s but then one needs to analyze each company further to better understand its business, past and future(expected) performance before making a decision of whether to invest in it or not.

Since we are lucky to be living in an internet age this screening process is not as daunting as it could sound like. There are several tools, limited for Indian stocks but numerous for US listed ones, that help with this and some of the good ones are really free! The following is the list of some sites and tools that provide free tools to screen NSE and BSE listed stocks.

IDBI Paisabuilder
http://www.idbipaisabuilder.in/Market_Content/CMcorpinfo.aspx

I had used this site in the past and I really like it. It provides a decent number of parameters, more than equity master which comes next in the list, to filter stocks on and the research section of the site also includes various other useful tools that can be really useful. The following screenshots shows the search form and the results for a search on stocks in NSE 500 that have a dividend yield of more than 3%

Search form:

Search results:

EquityMaster

http://www.equitymaster.com/research-it/company-info/search/internal.asp

This has a decent stock screener; the following screenshot shows the results I got for companies having a dividend yield between 3% and 4%.

There are few bugs with this tool though, the year criterion in the search form is only till 2007 but the search still does give results for 2009 and 2008 so I am not sure (have not compared against other tools) if the results are accurate and reflect latest information.It also has other useful tools like sector info,recent quarterly performance of some of the companies (I liked this one, see screenshot below)

ICICI Direct Research

http://content.icicidirect.com/research/customsearch.asp

ICICI Direct also provides a screener but the search form is limiting in the parameters e.g. I could only search large cap stocks, and not all, with dividend yield greater than 3%

BSE

http://www.bseindia.com/stockscanner/stockscanner.aspx

BSE website also find a stock screener but again the form is limited to four criteria (see screenshot below)

Buzzing Stocks

http://www.buzzingstocks.com/in/search.pl

This one is different in the sense that it lets you screen stocks based on technical parameters. The search form takes criterion in plain english and it also comes with a pre-defined list that users can use. I plan to use if I buy anything for trading purpose. The following screen shot shows list of stocks that have had serious buying interest and which could go up higher.

There could be other tools and I plan to update this post as and when I come across them.

RK.

Other posts that could be of interest:

Warren buffets low diversification good for average investors?

Think before investing in india's ETFs

Stock picks top 20 indian stocks to own

Financial bubbles of next decade

Little book that beats the market

India Brokerage Recommendations : Stock advices for first week of march

2010-03-07T00:10:00.000-08:00

This post covers some of the recommendations and advices of the Indian brokerage and research firms that came out in the first week of March. This is a follow up to my first post where I started tracking the recommendations from Indian brokerage and research firms.

In the last week - Aurobindo Pharma had two BUY calls, a number of IT companies also had a BUY and there was one REDUCE for Ranbaxy. The following is the list

Date	Brokerage/Research Firm Name	Stock	Recommendation	Target	Price on the date of recommendation

5-Mar-10	Prabhudas Lilladher	Infosys	BUY	3,250
5-Mar-10	Firstcall Research	NIIT	HOLD	76	66.5
5-Mar-10	Firstcall Research	Bilpower	HOLD	205	177.65
5-Mar-10	Reliance Securities	Dishman Pharma	HOLD	238	208
4-Mar-10	Firstcall Research	SREI Infra	BUY	90	73.45
4-Mar-10	Firstcall Research	Mundra Port	BUY	790	709
5-Mar-10	Karvy	Inox Leisure	MARKET PERFORMER	79
3-Mar-10	Sunidhi Securities	KPIT Cummins	BUY	140	112
4-Mar-10	Angel Securities	Balrampur Chini	NEUTRAL
3-Mar-10	Firstcall Research	Jyoti Structures	BUY	200	161
3-Mar-10	Firstcall Research	Tata Power	HOLD	1499
3-Mar-10	Emkay	South Indian Bank	BUY	180
3-Mar-10	SKP Research	Aurobindo Pharma	BUY	1800
3-Mar-10	Angel Securities	Ranbaxy Labs	REDUCE	445
3-Mar-10	Anand Rathi	Pratibha Industries	BUY	501	350
3-Mar-10	Hem Securities	Videocon Ind	BUY	280
2-Mar-10	Motilal Oswal	Financial Tech	BUY	1822
3-Mar-10	Karvy	Aurobindo Pharma	BUY	1283	970
26-Feb-10	Angel Securities	Tata Motor	BUY	942

Tracking India Brokerage And Research Firms Stock Advices

2010-02-27T20:35:00.000-08:00

Brokerage and independent research firms regularly come out with stock recommendations to help out the retail investors. But what we don't hear is how their recommendations and advices actually performed. So I am going to try to make an effort to gather the recommendations from various brokerages and track their performance. If I find the stocks picked by these firms perform then making money would be as easy as following their advice.

The following is the initial list gathered based on the recommendations from the last 2 weeks of this month. I will update this list once in a week or two and add on performance after a period of 3 months.

Date	Brokerage/Research Firm Name	Stock	Recommendation	Target	Price on the date of recommendation

26-Feb-10	ULJK Research	Polaris	BUY	197	146
26-Feb-10	FinQuest Securities	Yes Bank	BUY	315	236
26-Feb-10	Karvy	Kalpataru Power	BUY	1292	1026.2
26-Feb-10	Karvy	Bharti Airtel	MARKET PERFORMER	315	276
26-Feb-10	Karvy	Aventis Pharma	MARKET PERFORMER	1823	1630
25-Feb-10	Motilal Oswal	Mphasis	NEUTRAL	710	673
25-Feb-10	Anand Rathi	Bharti Airtel	SELL	325	276
25-Feb-10	Anand Rathi	Mphasis	BUY	890	673
25-Feb-10	ULJK Securities	Sunil Hitech	BUY	282	198
25-Feb-10	Emkay Global	Mphasis	HOLD		673
24-Feb-10	Firstcall Research	Mawana Sugars	BUY	42	33.7
24-Feb-10	Firstcall Research	Binani Cement	BUY	84	69.85
24-Feb-10	Firstcall Research	Indian Hotels	NEUTRAL		86
24-Feb-10	Firstcall Research	Torrent Cables	BUY	132	115
22-Feb-10	KRChoksey	Nestle India	HOLD	2786	2580
22-Feb-10	Motilal Oswal	GSK Pharma	BUY	1800	1681.75
22-Feb-10	Prabhudas Lilladher	KPIT Cummins	ACCUMULATE	150	108.85
22-Feb-10	IndiaInfoline	HDIL	BUY	333	294
22-Feb-10	Karvy	Shree Renuka	BUY	270	180
20-Feb-10	Firstcall Research	Kalindee Rail	HOLD	255	213.95
20-Feb-10	Firstcall Research	Allied Digital	BUY	260	220.3
19-Feb-10	Bonanza	Action Construction Equipment	HOLD		37
19-Feb-10	Parag Parikh Research	GlaxoSmithKline Pharma	ACCUMULATE		1650
19-Feb-10	Sunidhi Securities & Finance	Renaissance Jewellery	BUY	100	70
19-Feb-10	Karvy	ITC	MARKET PERFORMER	286	249
18-Feb-10	Angel Securities	Hindalco	ACCUMULATE	179	152
18-Feb-10	Karvy	PVR	UNDER PERFORMER	154	172
18-Feb-10	HDFC Sec	IVRCL Infra	BUY	372	315
17-Feb-10	Motilal Oswal	Tata Steel	NEUTRAL
17-Feb-10	Angel Securities	Tata Steel	BUY	697	585
17-Feb-10	KRChoksey	Tata Steel	BUY	718	584
16-Feb-10	Hedge Equities	Pratibha Inds	ACCUMULATE	447-521	328

India Stock Screeners: Tools to screen Indian Stocks listed on NSE and BSE

2009-12-27T01:14:00.000-08:00

So, the obvious (which was not so obvious till a week ago) question was "is there a better way?."

Search form:

Search results:

EquityMaster

http://www.equitymaster.com/research-it/company-info/search/internal.asp

This has a decent stock screener; the following screenshot shows the results I got for companies having a dividend yield between 3% and 4%.

ICICI Direct Research

http://content.icicidirect.com/research/customsearch.asp

ICICI Direct also provides a screener but the search form is limiting in the parameters e.g. I could only search large cap stocks, and not all, with dividend yield greater than 3%

BSE

http://www.bseindia.com/stockscanner/stockscanner.aspx

BSE website also find a stock screener but again the form is limited to four criteria (see screenshot below)

Buzzing Stocks

http://www.buzzingstocks.com/in/search.pl

Little book that beats the market

Financial Bubbles of the next decade!!

2009-12-16T06:40:00.000-08:00

Think you seen the end of bubbles?? Forbes does not think so, they have an article on forbes.com titled "Seven Looming Financial Bubbles" that lists the sectors/countries and areas which can go bust in the next decade. Here is the list and the reasons why they think so

Gold
Gold is up 300% over the last decade, in part because investors see it as a store of wealth during times of trouble and inflation. Look beyond the hype and you may see an asset with its best gains behind it. As an asset that generates no actual income, gold's price is purely a function of what others are willing to pay for it.

China
China has positioned itself as the factory for the world, pushing out everything from drywall to toys. It's growing in large part due to easy money. Its government is already on the hook for debt equal to over 70% of gross domestic product. By keeping its own currency artificially low, China has also pushed its citizens to invest at home, artificially inflating property and stock prices.

Emerging Markets
Investing in emerging markets was hugely profitable in 2009 as confidence in the U.S. waned. An ETF that tracks the Brazilian market has gained nearly 125% this year, but overall economic growth in Brazil has fallen short of forecasts. The main Russia ETF has gained more than 135% in 2009, even as the country's GDP shrank. Now is probably not a good time to be hopping on the notoriously volatile emerging-markets bandwagon.

Treasuries
Warren Buffett and Chinese Premier Wen Jiabao were among those who lamented the Treasury bubble in 2009 as the U.S. borrowed to fund its record budget deficit. Signs the bubble is at or near the bursting point: rates on short-term bills that have fallen to negative levels after inflation--meaning investors are paying the government to hold onto their money--and a growing national debt.

College Tuition
Over the last 20 years, college tuition has risen at double the rate of inflation. There are now more than 60 colleges charging over $50,000 a year, and the average student now leaves school with $20,000 in education loans. With financially strapped parents reluctant to foot the bills, colleges may soon be forced to cut amenities--like gourmet dining hall food--introduced in boom times. And some ivy-covered doors are likely to close for good.

Exchange-Traded Funds
These index- and sector-tracking products were designed to provide investors the breadth of mutual funds on the cheap. They were a big hit in the wake of the last recession, jumping in number from 152 ETFs in 2004 to nearly 760 today. But this once pristine area is on the verge of being overrun by opportunists. Some investment companies have been hawking ETFs with expense ratios more than four times higher than those of their rivals. It won't be long before ETFs join the ranks of the dubious financial products they were supposed to replace.

Copper
Spot prices for copper spiked during the mid-decade housing boom, shooting from about $1,500 a pound in 2004 to nearly $4,000 a pound in 2007. Copper plummeted in 2008 to below $2,000, but prices are once again approaching boom-time levels. Some of the demand is coming from China. Another source is ETFs that let average investors buy commodities contracts that were once restricted to institutions, resulting in an oversubscribed investing idea.

RK

Rakesh jhunjhunwala trims infoMedia 18 limited holding

2009-12-11T07:41:00.001-08:00

In case you are a follower of Rakesh jhunjhunwala then this news might be of interest to you. As per communication to stock exchanges he, his wife Mrs Rekha Jhunjhunwala and brother Mr. Rajeshkumar Jhunjhunwala have
sold 4,45,389 number of shares on December 09, 2009 and 2,22,366 numbers of shares on December 10, 2009. They still have about 4.2% in this company. So it will be interesting to see if they will hold on or sell it off.

update: Rakesh jhunjhunwala continues to dilute his holding in infomedia 18, there were transactions on Dec 11th again.

Info

2009-12-11T07:41:00.000-08:00

Indian telecom companies - invest or stay away?

2009-11-14T21:09:00.001-08:00

Indian telecom companies have been taking a pounding recently and the reasons are well known. I am in sync with those analysts and individuals who think this negativity is only a short term one and this is the right time to invest to make money 2 years down the line. This is a test to the big players and if these companies are worth their salt then they will emerge out stronger. My strategy will put in some money regularly for next few months into airtel and rcom.

There was an interesting analysis in the business line today. I'm copying it verbatim here
----------------/--------------------/-----------
Indian telecom companies have suddenly gone from being the institutional investors’ blue-eyed boys to last on the shopping list. Stocks such as Bharti Airtel are languishing close to their 52-week low even as the market is close to its yearly highs.

Telecom stocks now trade at 10-15 times forward earnings, compared to 20-25 times till end-September, and are at a substantial discount to the broader market. Fears of new players winning market share away from the entrenched players, sliding revenues and the spectre of “per second’ billing have all had a hand in battering telecom stock valuations.

However, how much of this de-rating of the likes of Bharti Airtel, Idea Cellular and Reliance Communications (RCom) is justified? Some correction in valuation may be called for, given that popular metrics such as ARPUs, subscriber additions and usage minutes have come down, hinting at lower growth for players. But the situation may not turn out as dire as markets now expect.

First, with all operators joining the per-second billing race, the loss of subscribers to new players may be temporary. Second, this offering itself may be short-lived because of its adverse impact on profitability, unless operators resign themselves to making losses on all short-duration calls.

Third, for players such as RCom and Bharti, non-cellular businesses have been contributing significantly to overall revenues and at robust margins, providing a cushion against competitive pressures in mobile services.

With Idea Cellular, entry into lucrative new circles as it becomes a pan-India GSM player offers scope for growth. This is evident from the fact that with these launches, Idea has also increased its subscriber addition run-rate in the month of October. Here’s an analysis of the concerns and the reasons why larger players may survive this phase.

Tariff war and its longevity
The new regime of per-second billing, recently launched by Tata DoCoMo (GSM arm of Tata Teleservices), has set the cat among the pigeons in the telecom space. In the few months since this billing was introduced, Tata DoCoMo became the largest incremental market-share gainer with four million subscribers added in September.

RCom joined the battle soon, offering Rs 0.5 per minute for all calls, local and STD. This led to fears of slowing subscriber growth for other top players. This assessment, though justified in the short term, may not, however, hold good in the long run.

First, with all operators now joining the ‘per-second’ bandwagon, the market share drift to one or two operators may be limited sooner than later. Witness to this is the fact that, after a lull in September, all the frontline operators have seen rapid improvement in subscriber additions for October. Overall GSM additions (excluding Tata DoCoMo and RCom) in October are up 14.2 per cent relative to September to over 10 million.

Second, the economics of the per-second itself suggests that it may not last too long.

Players such as Bharti, RCom, Idea and Vodafone derive about 50-56 paisa per minute as revenue per subscriber. The cost of providing a mobile call for Bharti works out to approximately 40-42 paisa per minute, and may be similar or marginally higher for other players.

For regional players (though many have pan-India licences), the cost of providing this service may be higher as they do not have the scale and nationwide connectivity and may have to rely on pan-India players for NLD and roaming services.

The termination charge an operator pays for a call made by its subscriber to another operator’s is about 20 paisa per minute.

This suggests that only a subscriber who speaks for at least 40 seconds would ensure break-even! For example, a person who has spoken for exactly 60 seconds would ensure realisations are above current levels for operators, while another who speaks for 20 seconds would entail a stiff loss.

The calls made between different operators (local and NLD) account for 44 per cent of the total calls, according to data released by the telecom regulator. Unless, termination charge is shifted to a per-second basis, and cost of providing calls is drastically reduced (which is impossible for a new operator), this pricing cannot continue indefinitely.

‘Failing’ in metrics
The tariff wars apart, the September quarter earnings numbers of telecom majors too were a reason for their de-rating after they came in below market expectations.

For Bharti, Idea, RCom, Vodafone and TTML, ARPU (average revenues per user) fell 7-20 per cent sequentially and about 20-25 per cent from year-ago levels. Subscriber additions for Bharti and Idea fell below their quarterly run-rates.

But how much should an investor be worried about this?

Two factors need to be kept in mind. One, revenue growth for telecom operators has not hinged on subscriber growth in recent years. Two, companies have improved margins substantially amid a slower pace of revenue growth. Revenue growth has substantially lagged subscriber growth from 2005. Between 2005 and 2008, while the annual growth in subscribers was 61-74.8 per cent for the top operators’ revenues grew by only 27.7-50.9 per cent. Though ARPUs have fallen 34-45 per cent in absolute terms over these years, all operators actually expanded their margins!

Even with the fall in tariffs, the number of minutes used by subscribers has been falling steadily over the last 4-5 quarters. The usage minutes fell 11-14 per cent, but rate per minute declined 9-10 per cent.

Though monthly subscriber additions have gone up from 5 million to over 10 million the last 3-4 years, thanks to a series of tariff cuts, innovative schemes and, finally, the disruptive ‘lifetime recharge’, this hasn’t resulted in proportionate revenue growth. This suggests that the incremental subscribers, especially from the rural areas, were not revenue accretive at all.

Subscriber additions, ARPU and minutes of usage may serve as an accurate gauge when there is a connect between subscriber adds and revenue growth. That is no longer the case, and underperformance on this count should not be the cause to de-rate stocks.

Second, there is the problem of multiple SIM cards that subscribers tend to use. So, depending on the use, and affordable tariff plans, a subscriber may use the services of multiple operators. So, subscribers would show up in different operators’ networks at different points in time, creating significant duplication. Bharti estimates such subscribers to be as much as 30 per cent of the subscriber base, while Idea pegs the number at 20 per cent.

Other businesses of telcos
Though there have been tariff cuts over the years, Bharti, RCom and Idea have EBITDA margins of 27-40 per cent. This suggests that players ensure a sufficient margin of safety before they sacrifice profits to tariff wars.

Majors such as Bharti and RCom also generate a substantial portion of their revenues from a host of non-mobile services. These revenues also sport EBITDA margins over 40 per cent for these companies, which are well-placed to take advantage of potential, both in India and overseas.

RCom derives over 30 per cent of its revenues from its global, broadband and enterprise data business, while for Bharti, this forms just over 20 per cent of revenues. Since Bharti, RCom and BSNL are the only players with a pan-India fibre-optic network, they provide NLD connectivity to a lot of incumbent players as well as new operators. This apart, Bharti and RCom are among the top players in the enterprise data connectivity market in India, estimated to be Rs 7,400 crore currently and set to go up to over Rs 13,000 crore by 2013, according to a Frost & Sullivan report.

Reliance Infratel, the tower infrastructure arm of RCom, also has been successful in increasing tenancy for its towers. It has signed several deals in recent times, prominent among them being a Rs 10,000-crore outsourcing contract with Etisalat DB.

Both these companies also have over a million DTH subscribers, suggesting another sustainable revenue stream.

With tailor-made packages, capability to deliver both free and pay channels, and ability to drive value-added services, DTH ARPU (average revenue per user), which is in the Rs 150-160 range, could grow over the next few years. A recent PwC report states that DTH households are likely to increase to 35 million(from 16 million currently) by 2013.

Idea, which acquired Spice Communications and also new licences over the last 18 months has become a pan-India player. It is in growth mode and is being fully funded for all its expansions, through infusion from Axiata and Providence.

Most of the new circles that the company has launched operations in are metros such as Mumbai, Chennai and Kolkata, apart from other profitable States. Being a partner in Indus Towers means it has been able to get operations up and running in new circles quicker than many new entrants.

Clearly, all these three players have substantial potential. Investors need to look beyond the immediate price wars and view the industry from a 2-3 year horizon. They may accumulate all the three stocks, especially Bharti Airtel.

----------------/--------------------/-----------

Rk

How Rakesh Jhunjhunwala became a crorepathi (millionaire)!!

2009-10-30T02:43:00.000-07:00

Rakesh Jhunjhunwala said the following during a recent interview how he made his millions and name in the Indian stock markets. If you go through the transcript you will see how easy it is to make money, you just have to invest in a good stock and let it zoom!! ;)

Sesa Goa had a big fall because there was a depression in the iron ore
industry and then prices for the next year had been considerably raised
about 20-25%. The stock was available abysmally cheap around Rs. 25-26.
There was a projection of a very good growth in profitability in the next
year but nobody seemed to believe it.

When I saw the facts, I wanted to invest but I did not have capital. Between
1986 and 1989 I must have earned Rs 20-25 lakhs. After 1986, the market went
into a big depression for two three years but I put that money in Tata Power
and the Tata Power stocks became about 1100-1200.

Now I was worth Rs 50-55 lakhs. I bought 4 lakh shares of Sesa Goa in
forward trading, worth Rs 1 crore. I sold about 2-2.5 lakh shares at Rs
60-65 and another 1 lakh at Rs 150-175. The prices then went up to Rs 2200
and I sold some shares. I did some other trading too. I had net worth of
about Rs 2 - 2.5 crore.

Indian Stock Picks : Top Analysts recommendations

2009-08-07T19:33:00.000-07:00

Here are some of the recommendations from analysts in recent weeks

ONGC
Research: Citigroup
Target price: Rs 910

Citigroup has rated ONGC a 'sell', with a price target of Rs 910, citing lower crude prices and lack of clarity on fuel subsidy burden. "Weak to moderate crude prices have started hurting ONGC, despite lower subsidy sharing, as realisations on JV (joint venture) and international crude suffer," the foreign brokerage said in a report.

My take: I always prefer trading in ONGC, it has support around 990 so I would be buying at this level if markets are not in a panic mode

Aban Offshore
Research: Macquarie
Target price: Rs 605

Macquarie has raised its price target on Aban to Rs 605 from Rs 315 while reiterating its 'underperform' rating after the company's net profit beat estimates, despite falling. The hike in price target is in the wake of the company's plans to raise capital through share issue.

GMR Infrastructure
Research: Enam
Target price: Rs 171

Enam Securities has maintained its 'outperformer' rating on GMR Infrastructure, relative to the sector, with a price target of Rs 171, post its June quarter earnings.

Unitech
Research: ICICI
Target price: Rs 73

ICICI Securities has downgraded its rating on Unitech to a 'sell' from hold, with a price target of Rs 73, citing expensive valuations.

Genus Power
Reasearch: Sharekhan
Target Price: 338

In its results update note, Sharekhan has maintained ‘Buy’ recommendation on Genus Power with a price target of Rs 338 which is an upside of over 90 per cent from its current market price.

Voltamp Transformers
Reasearch: Religare
Target Price: 884

Religare Securities has maintained ‘Buy’ recommendation on Voltamp Transformers with an upgraded price target of Rs 884.

Kalpataru Power
Reasearch: Kotak Securities
Target Price: 865

Kotak Securities has initiated coverage on Kalpataru Power and Transmission with a price target of Rs 865, which is around 20 per cent upside from current market price of Rs 715.

rk

Stock Picks: Top 20 Indian Stocks to own by Forbes India

2009-07-13T06:54:00.000-07:00

The following is the list of 20 stocks that were recommended by Forbes India in their recent release

Page Industries: A small company that makes a small product with big margins

Pidilite Industries: Pidilite has brands like Fevicol, M-Seal, car polish Motomax and other assorted consumer art materials and specialised home paints

Dabur: This company has focus. Five years ago, Dabur got out of the pharmaceutical business and put all its effort, like the best brand companies, behind five of its brands

Procter and Gamble Hygiene: Over the last three years, the money that P&G invested did not translate into market cap gains

Marico: Till 2008-09 came by, the company’s sales and profits had grown for 30 consecutive quarters, indicating a stable track record

Blue Star: Two decades to reach Rs. 1,000 crore in sales; two years to reach Rs. 2,000 crore in 2008

BHEL: For 2009-10, the company is increasing its capacity from 10 GW to 15 GW

Power Finance Corporation: At about 25 per cent, the company’s net profit margin is close to what the best software companies earn at half their price-to-earnings ratio

Mahindra & Mahindra: Rural India is earning well because of infrastructure boom. M&M’s SUVs are selling briskly and its market share in the SUV space has gone from 51 per cent to 57 per cent in the last two years

Allcargo Global Logistics: This stock was one of the earliest to recover after it fell dramatically in October

Crisil: The 800-pound gorilla of rating agencies, it rates 1,000 firms today

ICRA: There is room for both Crisil and ICRA in the space

HDFC Bank: A cautious and solid bank, it is safe because its government bond holdings are 3 per cent over the statutory liquidity ratio (SLR) requirement

Kingfisher Airlines: The company has a debt-equity ratio of 3:1

Oracle Financial: It suffered when foreign banks went broke

Suzlon: Debt is high and so are the receivables.

Ranbaxy: The last 12 months have been bad. Sales are down, research hasn’t paid off and US FDA is after it for manufacturing lapses

NIIT: As IT crashed so did the IT trainer. Its stock fell 85 per cent to Rs. 14

Wockhardt: Its core business is in fine fettle. Its problems are foreign loan repayments and derivative losses

Hindalco: The acquisition of Novelis tripled Hindalco’s sales but caused an 11 per cent decline in net profits

RK

Nifty adopts Free Float market cap calculation methodology

2009-06-26T23:31:00.000-07:00

Nifty has moved on to free float method for calculating the weights of the companies in the index. I just checked on investopedia for the definition of free-float methodology and this is what it says

Free-float methodology market capitalization is calculated by taking the equity's price and multiplying it by the number of shares readily available in the market. Instead of using all of the shares outstanding like the full-market capitalization method, the free-float method excludes locked-in shares such as those held by promoters and governments.

Calculated as:

And it also goes on to say that "The free-float method is seen as a better way of calculating market capitalization because it provides a more accurate reflection of market movements."

And what was the impact of this?

"stocks that will lose their weightage in the index have seen sharp falls in share prices in the past few days," says a report from business line. It also points out that the selling is from the index funds who have to realign their portfolios based on the new weights assigned. Some of the companies that have lost weightage are NTPC, ONGC, Power Grid, SAIL and Bharti Airtel.

In general I think this is a move in the right direction for NSE and Nifty.

rk

Warren Buffet's funny and sensible quote

2009-06-24T20:01:00.000-07:00

Warren Buffet is supposed to have quoted the following during an interview on US economic recovery

"You can't produce a baby in one month by getting nine women pregnant."

it does make sense, doesn't it?

Top 10 challenges for India to overcome!!

2009-06-21T04:12:00.000-07:00

Goldman Sachs Economic Research has come out with a list of challenges that India needs to overcome if she has to achieve her true potential. The paper titled Global Economics Paper contains the following list

1. Improve governance
2. Raise basic educational achievement
3. Increase quality and quantity of universities
4. Control inflation: Try Inflation Targeting?
5. Introduce a credible fiscal policy: a medium-term strategy
6. Liberalize financial markets
7. Increase trade with neighbors
8. Increase agricultural productivity
9. Improve infrastructure
10. Improve environmental quality

Well, there are no surprises in this list. They are more or less obvious and they are definitely the areas to invest in.

RK

Indian Mutual Fund Investors can rejoice!!

2009-06-18T20:30:00.000-07:00

There is GOOD news for the Indian Mutual Fund investors. Sebi decided yesterday that there will be no ENTRY LOAD for any of the mutual fund schemes AND the distributor commission is to be paid by customers themselves and it wont be deducted by the fund anymore. What needs to be done now is to make sure that this message reaches the general public. Here is the snippet taken out of the news report on CNBC

The board considered the question of the existing manner of payment to the mutual fund advisors by investors and decided that there will be no entry load for any schemes. The investor will decide the commission that he is to pay to the distributor directly. It will not be deducted by the fund and then paid to the distributor. If the investor is making an application for Rs 100 that means the entire Rs 100 will get invested. There will be no deduction from that because there is no entry load. The board also decided that if the distributor is selling different schemes then he must disclose to the investor as to what commission he is getting for different schemes. This will avoid the conflict of interest and will allow investors to understand why a particular scheme is being recommended to them.

Reliance Mutual Fund's underperformance

2009-05-23T18:53:00.000-07:00

Even though I am not a big fan of MFs, I still have some money a couple of MFs. One of them is Reliance's regular equity savings plan. I got the SOA (Statement of Account which I mistakenly took as Service Oriented Architecture based on the subject and kept wondering why Reliance sends anything about Architecture!!! see how dumb? uffff!) and when I saw the statement why I was left speechless!
No, my money did not double within 6 months (Dec 08 was when I put in this money) and no it did not grow by 50% and no, it did not grow by .0000000000001%

It infact was down by about 5%!!!!!!!!!!!!!! This statement was sent out on 21st May so the question is what the **** was this doing? I did much better I guess with my individual investments , I was down 50% in dec 08 and I am down only by 10% now. I came across a message in one of the investment groups that Reliance AMC was sitting on 33% cash till last week. That could explain why it underperformed.

This kind of results strengthens my belief that an individual with patience and little bit of learning can earn similar returns as that of an average MF by just holding onto some of the blue chips. Having said that I am not going to pull out my money, I am a patient man so will wait a couple of years before deciding.

RK

A really little book that could help you beat the Market

2009-05-15T21:10:00.000-07:00

I was visiting a friend a couple of weeks ago and we were having our usual discussions about investing and stock picking and he mentioned about a blog that rates the stocks in the Sensex and Nifty based on a ‘Magic formula’. Of course the words ‘Magic formula’ got me curious and who wouldn’t be? So I came back home and looked up this blog and found that this formula is actually from a book that the blogger had read in the past.

The title was “The Little Book That Beats the Market” and I almost screamed aloud “what the ****!!”

Don’t we already have countless number of books from third-rate writers or investors that claim to make you rich overnight and/or present you with strategies that let you earn supernormal returns? And I really thought that this blogger must be nuts to follow a shameless author who TOOTS his own horn so loud!

But then for some unknown reason I bothered to look at the author’s credentials.And, wow, weren’t they that bad! The author goes by the name of Joel Greenblatt and he is the founder and managing partner of Gotham Capital, a private investment partnership that has achieved 40% annualized returns since its inception in 1985. Having read this I asked myself does this guy really needs any cheap publicity or quick money?

Maybe not!

So I went ahead and picked up a copy of this book from the local library. And I have to admit that this was the simplest and the smallest investment book that I have read in the shortest time. The book has been deliberately kept free of financial jargons which I liked the most about this book and I could easily grasp the concepts. The concepts are not new, most of the value investors already use them in one way or the other, but the strategy keeps the whole process very simple which should keep emotions and attachments to particular stocks out the door.

I think this book should be most useful to the starters and not so financially savvy and I also tend to believe that this should work to give good returns if not the super normal returns promised by the author.

More information can be found at the following site https://www.magicformulainvesting.com/

Warren Buffet's low diversification strategy good for small and average investors?

2009-04-30T20:13:00.000-07:00

Warren Buffet is a great man and I am a big of him and his investment principles. He puts in lots of wisdom in those few words. However there is one principle of his that I do not fully agree with, or, at the least think is not good for small investors and for starters to follow. That's his "low diversification" strategy!

He espouses the virtue of concentration, rather than diversification, for beating the markets. This is valid but to do that the guy needs to be knowing exactly what he is doing and he needs to have lots of common sense and lots of financial acumen. But how many guys have it? 20%? maybe if you apply the 80:20 principle. That's why I think, and I experienced it first hand as well, diversification is the most important aspect that a guy, who has just started on his investing journey, and small investors, who put in their hard earned money, should follow.

For this category of investors I believe avoiding big losses and disappointments is the key and the only way to do this is through diversification - spreading your money across 30-40 stocks for e.g.. Of course one cannot achieve market beating results with this kind of diversification but one can at least limit downside on their investments. This can be the base that one can build on as they spend few years on the market and pick up the nuances of stock picking. Of course this means that one should spend the time and effort in trying to learn and gain knowledge. If the time and interest is not there then it is better to outsource your money management to a mutual fund manager.

I started investing at the end of 2007, right at the peak of the Indian markets. And I did the mistake of putting in too much money on too few stocks and too quickly. I did them by following analyst's recommendations and by following the technical charts. The result of it is that when the markets crashed my investments were down more than twice the index drop.

I have been trying to learn more about the markets and about stock picking since then. And I am also open to following different strategies to see which works for me and which I am comfortable with. Diversification and periodic investments(weekly) of smaller amounts is something that I am following now and it seems to be working for me - either because it really works or because the markets have been doing well of late. But it certainly does give me time to analyze each of these companies, that I like, in more detail without missing the upside and also limiting the downside.

RK

Warren Buffet mistakes in 2008

List of 50 stocks excluded from NSE futures and options contracts

2009-04-22T04:14:00.000-07:00

The following list of stocks have been excluded from NSE futures and options contracts for an year. As per the report

the existing unexpired contracts for the month of and April, May and June 2009 would continue to be available for trading till their respective expiry and new strikes would also be introduced in these existing contract months.
This circular shall be effective from May 4, 2009

3i Infotech Limited

Alok Industries Limited

Amtek Auto Ltd

Aptech Limited

Arvind Limited

Balaji Telefilms Ltd.

Ballarpur Industries Limited

Bata India Ltd

Birla Corporation Ltd

Bombay Dyeing & Mfg Co. Ltd

Central Bank of India

Development Credit Bank Limited

Edelweiss Capital Limited

Escorts Ltd

Everonn Systems India Limited

Gateway Distriparks Limited

Gitanjali Gems Limited

Gujarat Narmada Valley Fertilizer Co. Ltd.

Gujarat Alkalies and Chemicals Ltd.

Havells India Limited

HCL Infosystems Ltd

Hindustan Oil Exploration Co. Ltd

IRB Infrastructure Developers Limited

Jet Airways (India) Ltd.

JSL Limited

Kesoram Industries Ltd.

KSK Energy Ventures Limited

The Karnataka Bank Limited

Lakshmi Machine Works Ltd.

Mahindra Lifespace Developers Limited

Maharashtra Seamless Ltd

MindTree Limited

Monnet Ispat Ltd

MRF Ltd.

Nava Bharat Ventures Limited

New Delhi Television Limited

Network 18 Fincap Limited

NIIT Limited

Peninsula Land Limited

Rajesh Exports Ltd.

Reliance Industrial Infrastructure Limited

S. Kumars Nationwide Ltd

SREI Infrastructure Finance Limited

SRF Ltd.

Strides Arcolab Limited

Thermax Ltd

Torrent Power Limited

TVS Motor Company Limited

UTV Software Communications Limited

Wockhardt Limited

Indian Companies 2008 - 2009 Annual Results on 17th Apr 2009

2009-04-17T17:20:00.000-07:00

The following companies have reported their annual and 4th quarter results on 17th April 2009.

SBI Home Finance:- For the full year ended March 2009, net loss reported to Rs 24.63 crore as against net loss of Rs 18.25 crore during the previous year ended March 2008.

GRUH Finance:- For the full year ended March 2009, net profit rose 18.75% to Rs 50.28 crore as against Rs 42.34 crore during the previous year ended March 2008.

Sukhjit Starch & Chemicals:- For the unaudited full year, net profit declined 40.45% to Rs 12.00 crore in the year ended March 2009 as against Rs 20.15 crore during the previous year ended March 2008.

Logix Microsystems:- For the unaudited full year, net profit rose 82.35% to Rs 8.37 crore in the year ended March 2009 as against Rs 4.59 crore during the previous year ended March 2008.

Mysore Paper Mills:- For the unaudited full year, net profit rose 337.35% to Rs 22.13 crore in the year ended March 2009 as against Rs 5.06 crore during the previous year ended March 2008.

Sonata Software:- For the full year, net profit rose 45.43% to Rs 53.36 crore in the year ended March 2009 as against Rs 36.69 crore during the previous year ended March 2008.

Power Finance Corporation:- For the unaudited full year, net profit rose 12.30% to Rs 1355.19 crore in the year ended March 2009 as against Rs 1206.76 crore during the previous year ended March 2008.

ETC Networks:- For the unaudited full year, net profit declined 59.93% to Rs 9.36 crore in the year ended March 2009 as against Rs 23.36 crore during the previous year ended March 2008.

Compuage Infocom:- For the full year, net profit rose 3.74% to Rs 4.44 crore in the year ended March 2009 as against Rs 4.28 crore during the previous year ended March 2008.

Saving money, cutting expenses during recession

2009-04-03T04:11:00.000-07:00

I liked to buy the latest editions of popular magazines as soon as they go on sale. Now I save up some money by waiting a month or two and picking up a copy at the nearby library.

Also read "A funny way to cut costs"

RK

Smart ways to save money during recession

2009-03-10T06:52:00.000-07:00

1. If you have more than one girl friend then layoff the most expensive ones
2. If you have a single girl friend then cut down on expensive dinners and gifts
3. If girl friend is not reasonable then meet her less often or better take a break and enjoy your single hood
4. If you have a mistress then its needless to say that you won't be able to maintain her any longer. So people!!! recession is not a bad thing after all. It actually helps your spouse to remain faithful to you.
5. If you have a wife then god save you!

funny?

RK

Think before investing in India's Exchange Traded Index Funds

2009-03-06T23:03:00.000-08:00

Index Funds are good. How about Exchange Traded Index Funds? They are good. That's what we are told and that's what I thought until I checked the volumes of the ETFs listed on NSE. To my horror and surprise I found that the volumes are miserably low and for some funds there were no trades at all. I use the stats from 6th Mar 2009 to drive home my point

Benchmark Mutual Fund-Nifty Junior Benchmark ETF -6257
Benchmark Mutual Fund-Nifty Benchmark ETF -76129
Benchmark Asset Management Company Pvt. Ltd. - Bank Index -1900
Reliance Mutual Fund -Banking Exchange Traded Fund (ETF) -236
Quantum Index Fund -Exchange Traded Fund (ETF) -104
Benchmark Mutual Fund - PSU Bank Benchmark Exchange -510
Traded Scheme
Kotak Mahindra Mutual Fund -0

From the stats you can clearly see that the volumes are pathetically low so its quite possible that you won't be able to sell when you want and at the prices you want since the spread between the bid and ask prices are high. Out of these funds only Nifty Benchmark Index seems to have decent volumes so that may be the only fund worth looking at.

I think the concept itself is very good but unless more people are aware of these funds and participate in them you are in real danger of getting stuck. You may not find buyers and you may get quotes far less than the market price. So think hard before investing in the ETFs.

RK

Warren Buffets big mistakes

2009-03-01T04:19:00.000-08:00

Warren Buffet's mistakes? Does he ever make one? If you don't think so then you are wrong. He has made some big mistakes last year i.e. 2008 and like any great man he had the courage to admit in his latest annual letter to this share holders. The following is the admission taken from his report

I told you in an earlier part of this report that last year I made a major mistake of commission (and maybe more; this one sticks out). Without urging from Charlie or anyone else, I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.

I made some other already-recognizable errors as well. They were smaller, but unfortunately not that small. During 2008, I spent $244 million for shares of two Irish banks that appeared cheap to me. At yearend we wrote these holdings down to market: $27 million, for an 89% loss. Since then, the two stocks have declined even further. The tennis crowd would call my mistakes “unforced errors.”

Quarterly and Annual Results - Tata Steel, Thomas Cook, Bata India

2009-02-28T21:38:00.000-08:00

There were declaration of quarterly and annual results from few companies this past week i.e. 23 - 27 Feb 2009. This post summarizes some of them

Thomas Cook - They announced their annual results for the period 01-JAN-2008 to 31-DEC-2008. Thomas Cook posted a net profit of 3732.50 lakhs and recommended a dividend of 37.5% on each equity share of Re 1/

Tata Steel - It reported a net profit of 73221.00 lakhs in its third quarter (01-OCT-2008 to 31-DEC-2008 ). The stock ended up by a little over 5% on friday

Bata India - They reported their annual results for the period from 1st Jan 2008 till 31st Dec 2008 and the company has recommended a dividend @ 25%. The net profit was about 5905.70 which is better than last year.

The last company covered in this post is Videocon industries. It reported a net profit of 109893.00 for the year 01-OCT-2007 to 30-SEP-2008 and it has recommended dividend of Re. 1/-per share. The stock ended the day down by a little over 1.5%

Invest in Indian Auto companies now and make MONEY

2009-02-21T04:33:00.000-08:00

Auto sector has been doing pretty bad for at least a couple of years now. Last year was a disaster as we all know. My investments in Maruti and Tata Motors, which were made in 2007 when I thought that they were cheap, went down 50% and 90% resp in 2008. Maruti has come back well but Tata Motors is still down 80%. I did not look at the auto companies for quite some time now but with the interest rates coming down there is hope that the bad ends are about to end.

With the hope that this could be the right time to get in so that I am in before the stocks run up too far I decided to take a look at some of the auto companies. It became quite clear after a quick look that I have already missed the bus with some of the frontline stocks. Here are some of the numbers

Maruti Suzuki is up 50 % from its 52 week in December, Bajaj Auto is up more than 50% its 52 week dec low and Hero Honda, which has outperformed the whole of last year, is around its 52 week high. The case of Hero Honda shows that a good profitable business is what it matters and not the sector. These were the outperformers and other like Mahindra & Mahindra, TVS and Ashok Leyland are up 20 odd %. The only frontline company that missed this bus is Tata Motors and the reasons are pretty well know so its hovering around its 52 week low.

Performance has been good only for the auto companies but not the ancillaries. Exide Industries, Amara Raja and Shanthi gears are around their 52 week lows, maybe its time to get in them so not to come back in few months time and find them 50 odd % up.

As far as I am concerned there is n't much downside in autos at the moment so I will put in some money and see where it ends up at the end of the year.

RK

Investing in Index funds - So boring but I will still do it

2009-01-25T06:17:00.000-08:00

I came across the book "The bogleheads guide to investing" in the public library recently. I took it since the name Bogle sounded familiar and I had only 15 mins to choose a book before the library closes down for the day. I assumed it was written by John Bogle but it was not be so. It had three authors - all leaders of an online forum called bogleheads who are basically diehard fans of John C Bogle's investment philosophy. I was sceptical but the book was quite ok. The opinions and advice of the authors had lots of common sense and some of them had really caught my attention and I really want to put them in practice even though my ego is still actually reluctant to follow them.

One of the points was to invest a bulk or all of your money in index funds – equity and/or bond. I am also a DIY investor who started a year ago, right at the peak of the Indian Bull Run. And I don’t have to say that I am not doing too well with my portfolio. It’s obvious isn’t it? But I don’t know if that’s attributable to the financial crisis that swamped the global markets since I started or it’s my poor stock selection. Anyhow!! Coming back to the topic of Index funds I know for sure that investing in these funds are the easiest and the most efficient, and perhaps most assured, way to long term wealth. It does not need much of your time – you don’t have to spend hours going through company’s financials, prospects for the sector, profiling the quality of the management etc. Basically you don’t have to do anything except for choosing an index fund with good track record and low expense. That’s it!! It’s as simple as that.

But the problem lies in this simplicity. Is it not too boring? Where is the challenge, where is the uncertainty, where is the thrill? Don’t we want to beat the market and those highly paid and fancied fund managers? Yes, we certainly want to do that and we can do that – that’s what our ego tells us. But if you really let your commonsense rule then you know for sure this is the way to go forward. So, reluctantly, I am going to look for an index fund that gave decent returns over 5 year period and has a low expense ratio and put in 50% or more of my money. Rest I will manage actively to feed my ego. I may do well or may not, I don’t know yet but what I know for sure is that the 50 odd % of my money in the index funds will do its job of compounding my wealth at decent percentage every year.

So, now let me focus on choosing an index fund!!

Oracle India trims salaries with hour-based payments

2009-01-06T06:53:00.000-08:00

"Oracle India trims salaries with hour-based payments" - This is the heading of a report I read today on business standard. Couple of paras from this report are given below. They had also mentioned that the employees, while still being on the Oracle payroll, can take up contract work. These guys are effectively suggesting employees to look for a new job without actually forcing them to do it. Its good in one way that if you stick it out for next few months then the situation will be back to normal.

The world’s second-largest software products company Oracle is understood to have begun linking the payment of its 20,000-odd employees in India with the productive hours they spend in the company. This has resulted in salary cuts, ranging between 10 and 50 per cent across the board

Company sources explain that if an employee is a billable resource for 15 days a month, he will be paid in full for that period while for the rest of the period, he is paid a “nominal” amount. Replying to an email query, a company spokesperson in India said: “Oracle does not comment on speculation or rumours.

Gujarat Mineral Development Corporation Bonus shares delivered

2009-01-04T04:19:00.001-08:00

Well! it took time but it happened finally! The bonus shares of GMDC have finally been added to my demat account. These bonus shares are of little solace considering that the price of the stock is down more than 90% of my buy price and I don't see it going back to that price ever again.

If you are an ICICIDirect customer then you won't see these shares added in your portfolio. You need to go to demat allocation page to see them added.

Satyam plans to send staff on sabbatical to trim costs

2008-12-03T21:26:00.000-08:00

"Satyam plans to send staff on sabbatical to trim costs" - This is another headline that caught my eye today. They are doing an infosys and want to send employees for social causes and they will make a final decision on this based on the third quarter results. The following is the snippet from the news report

The company is looking at sending its employees on a sabbatical, but will take a final decision depending on the third-quarter results. Satyam has already scaled down its hiring projections for the current fiscal to around 8,000-10,000 compared to 15,000 that it had earlier projected.

“We are looking at various options to reduce costs and sabbatical is one such option. We will be able to shift our employees to take up social activities relating to our own corporate social responsibility programmes. Employees can also look at working with NGOs during the time of sabbatical. But, they will have to compromise on their salary during sabbatical as the pay structure will be lower than what they are currently drawing,” said SV Krishnan, global head (HR), Satyam Computer Services.

Indian IT and BPO has an Union to take up layoffs and long working hours

2008-11-25T18:39:00.000-08:00

Here is a story from businessstandard that caught my eye today. I did not know about such a body until today and its heartening to see it take up some of the concerns

-------------------------------------
The Indian arm of the Union for Information & Technology Enabled Services (UNITES) is planning to file a public interest litigation (PIL) against the alleged “arbitrary policy’ of many Indian and multinational IT/ITeS firms in India who have, for the past two months, reportedly been enforcing longer working hours that violate the daily eight-hour working mandate of the Indian Factories Act, 1948.

UNITES, the country’s first union in the IT-BPO sector, is affiliated to the Indian National Trade Union Congress (Intuc). It claims to have around 10 per cent of the total IT-BPO workforce of 2 million as members, and said the numbers have been dramatically rising over the last two months on the back of lay-offs in the sector. The union is also part of Union Network International (UNI), which has over 16 million workers in 13 different sectors from 163 countries.

IT firms, on their part, insist that the Act is not being violated since IT workers have to work for 48 hours a week — eight hours daily for six days. However, since most IT firms have a five-day working week, they work longer hours, hence the misconception.

But some IT-BPO employees and UNITES are not buying the story. “The labour law in India allows an eight-hour working day, whereas in most IT companies in India people are involuntarily working for over 12 hours daily,” R Karthik Shekhar, UNITES’ secretary general for India told Business Standard.

He added that the increase of daily working hours from eight to almost 10 hours by Indian and multinational companies officially is “a double standard by the IT firms, who, on the one hand are firing people saying they are not getting enough work, and on the other hand, forcing employees to work more since they are getting more work”.

He said UNITES has requested industry body Nasscom to step in to clarify the stance.

The IT sector in India was once the torchbearer of many best HR practices, including flexi-office hours.

However, the situation has changed on the back of a slowing economy. Global IT services firm Accenture, for instance, is reportedly planning to increase working hours by almost an hour with effect from January 1 next year. Infosys, India’s second-largest IT exporter, too, has asked its employees' to strictly abide by the duty hours that the company has fixed as 9.15 hours a day on all working days. Wipro also has stipulated 9.5 hours working hours a day, and is becoming much stricter in terms of timing.

On condition of anonymity, a team leader working with vCustomer, said: “In call centres people are used to long working hours. During peak season (December-January), they work even 14 hours a day. But now due to the ongoing crisis, expectation levels are very high. Performance is being monitored frequently.”

A software engineer with Satyam Computers, Hyderabad, added: “Earlier we could extend our project deliveries by a day or two. Now the management has mandated to deliver by the deadline otherwise it will be marked on performance sheet. Our performance is being evaluated every week. This was a norm from earlier times, but now the management is taking it seriously.”

An engineer from Orange (which does IT and BPO support for the telecom major), concurred, “Besides the long working hours, cost cutting measures are worrying us, and the company has started ferrying seven people in a cab against five earlier.”

An account manager placed with Barclays in Noida, said “The insecurity level is very high. Quality parameters have been raised and everything is monitored very closely, they are marking us down wherever they can.”

Shekhar alleges that most IT firms do not display a “standing order” (regarding the eight-hour duty), which is certified by the labour department, on a notice board at the entrance of every firm. Instead, they have the order posted on the company’s Intranet.

“I believe stressing on increased input is always a mistake — the industry needs to focus on more productivity and value creation on the output side,” said Ganesh Natarajan, Chairman, Nasscom, when contacted. He, however, did not comment on whether Nasscom would be working on fixing a limit on daily working hours for companies.

“The IT industry in India still follows the best practices it had introduced earlier. But this does not mean employees will work less. If they are being asked to stick to duty hours, this will increase the productivity,” explained Infosys Technologies HR head TV Mohandas Pai.

“Besides,” he added, “they are also being paid well to work hard. These are difficult times and if they don’t work hard then there will not be any industry left in coming days.”

Is TCS the worst affected Indian IT major in the ongoing financial crisis?

2008-11-17T06:57:00.000-08:00

Is TCS the worst affected Indian IT major in the ongoing financial crisis? This is a question that came to my mind when the TCS stock was getting hammered on the bourses. I thought so since they are huge and have a larger share of their revenues coming from the Financial Services. This is reflected in the share price already. Today I saw this report that confirmed this view. According to this report TCS is likely to bring down the hikes to 0% by 2010 and it also shows how its competitors are doing in this front

For now, the other IT services majors like Wipro has already announced a 7-8% hike in wages for its offshore employees while for Infosys it has been in the range of 11-13%.

I also heard unconfirmed news about HCL not giving the hikes and, worse, even cutting the salaries. News about lay offs are not good for anyone except for the markets which is a positive since its going to cut down costs and improve profitability.

Infosys had come up with a sabbatical policy yesterday which is innovative. We have to wait and see what measures other IT majors will take to cut costs.

RK

Infosys asks employees to take Sabbatical!! What is the Real Intention?

2008-11-16T02:00:00.000-08:00

We are in midst of a huge Financial Crisis, that's clear. And its also clear that the impact is not going to be limited to financial sector, the effect is now being slowly but surely felt on industries that are important to the real economy. Even though we, in India, are not part of the core crisis that started in India we still are greatly affected - markets are being hammered, foreign money is being pulled out of the country, promised investments aren't coming, companies depending on exports are closing down and people losing jobs.

IT sector, which is the horsepower that drove India's growth in 90's and which is still the foreign currency earner, is not left untouched. All top Indian IT companies have a decent portion of their revenues from the US Top Financial Institutions. There is a huge concern that these companies will not be able to deliver the same results in the coming quarters as the spending from affected institutions will be cut down and the projects will be shelved. There is also an opposite point of view that thinks US problems will translate into more revenues since US companies will start pushing more work to India.

We have to wait and see which view comes true in the near future. But, right now, I could see the impact. Its not as bad as the technology bubble but its there. No salary hikes, worse some companies cut the salaries, employee weeding in the name of performance, Satyam used wrong claims that were as old as 1 year to lay down a few, and now Infosys have come up with a policy where the employees can take sabbatical from their work to get involved in philonthropic activities.

I cannot comment on their real intentions. I see it as very innovative way of cutting down costs without actually looking like you are in trouble and also earning the good name in the society for its philonthropic inclience. Ofcourse they can easily use it as a tool to increase efficiency by making some of the non-performers take it. So they are not officially laid off, they can still be happy that they get 50% of their salaries.

But this also raises the question how effective these guys are going to be when they come back after an year - will they be refreshed and raring to go or will they be out of touch and find it difficult to get going? And also what if the conditions are still bad? Can Infosys just take them and put them on bench? And will they really keep on their promise of taking them back?

I see that it can be effective tool to cut costs in the near term by retaining the guys for half of the costs and having the option of getting them as soon as situation improves. You dont have to spend time and money to recruit new resources and train them on Infosys way.

Infy, this is really a smart way of doing things!

Top Indian Stocks To Buy : Buying Axis Bank stock around Rs 475 a good choice to make some money

2008-11-14T07:00:00.000-08:00

Axis bank is very close to its support levels at the moment and is a good choice as per me to get into for a quick trade. I put in half of my money around Rs 505 and I will put the other half after a couple to days seeing where the markets go.

Actually I did not think that the Indian Stock Market will be down today due to the low inflation numbers that came in yesterday and also the good showing by the global markets. So I put in a buy at a defensive price. I will wait for 2 days and if the markets tank I will double up the money on Axis. One of the reason why I am confident on this stock is that its in banking which are beneficiaries of lower inflation and this company has had no negative news exposure.

Top Indian Stocks To Buy, Stock Picks : Which companies are attractive now in the Indian Stock Market?

2008-11-12T19:10:00.001-08:00

I like few companies that are very attractive for investing/trading on the Indian Stock Market

For investment purposes I like Bartronics (No bad news here), IDFC (I think slowdown in infra lending considered here ) and Suzlon (I think it has been battered enough and all the bad news has been incorporated). I will buy Bartronics at the current levels but will wait for IDFC and Suzlon to fall a little since they have run up quite a bit in the last week or so.

For trading purpose I like banks - Axis and ICICI. This sector again was the most affected and I think only better times are ahead for this sector esp with the falling lending/interest rates. Axis is a definitely a buy at current price but ICICI has to go down to around 350 or less to be a buying stock.

RK

Indian Markets :- Indian Companies that are better choices for investments during this financial crisis

2008-11-03T20:15:00.000-08:00

I came across a study on BusinessStandard that listed Indian Companies that are sitting on huge cash reserves with good business growth potential. As is often said companies with cash are expected to do better during turbulent times, like this year, where the financial crisis jolted the world economies. I believe in this saying and I do like some companies among the list from this study and I am certainly looking at putting in some money into these stocks during these times. I am sharing this list on this blog hoping it will be of use to readers.

CASH KINGS
Rs crore	Cash + CE	Ent Value	Cash + CE/ Ent Value (%)	Mkt Cap	Price (Rs)	P/E (x)	P/BV (x)	Dividend Yield (%)
Reliance Power	13,440	23,074	58.2	22,626	94.40	209.8	1.7	-
Sterlite Inds	14,074	21,467	65.6	16,392	231.30	11.6	1.2	1.7
Hind.Zinc	7,695	11,732	65.6	11,732	277.65	3.0	1.0	1.8
Aditya Birla Nuvo	6,718	11,386	59.0	4,739	498.80	18.1	1.3	1.2
MTNL	3,758	3,926	95.7	3,915	62.15	7.4	0.3	6.4
Bajaj Holdings	3,213	3,413	94.2	3,413	337.30	5.9	1.1	5.9
Indiabulls Fin	7,412	13,823	53.6	2,601	102.55	6.9	0.9	8.3
Financial Tech	1,402	2,741	51.2	2,316	504.65	2.2	1.6	4.0
Jai Corp	1,825	2,394	76.2	2,312	129.55	30.0	0.9	0.8
Max India	3,842	6,076	63.2	2,253	101.50	33.8	1.1	-
Edelweiss Cap	1,910	3,653	52.3	2,083	278.00	81.0	1.5	0.7
Engineers India	1,417	1,959	72.3	1,959	348.90	8.0	1.7	3.2
GTL	1,277	2,452	52.1	1,750	185.05	14.6	1.9	1.6
PTC India	1,452	1,094	132.7	1,094	48.10	14.2	0.7	2.1
TV 18 India	883	1,562	56.6	1,015	84.65	24.8	2.1	2.4
Market Price, Price/Book Value (P/BV), Price-to-earnings ratio (PE), Market Capitalisation and Dividend Yield as on October 28, 2008 CE= Cash equivalents (investments minus those in group/associate companies); Mcap=Market capitalisation; Ent Value=Enterprise value (market cap + debt) Source: Capitaline Plus

Top Indian Mutual Funds Comparison - Best of 2008

2008-10-11T08:02:00.000-07:00

I have a need to invest some amount into mutual funds this year so was looking at the top rated funds. While doing so I prepared notes that will be useful to me to make a decision and I thought publishing here might people who might be looking for the same. I used the information provided in ValueResearchOnline website and came up with this table. The information may not be 100 % accurate however it should provide you a quick comparison guide.

Fund

Type

Performance

Top Stocks/Sectors

Charges

Manager

DSPML T.I.G.E.R. Reg-G

Average Risk

Open End

Growth Diversified,

SIP available

NRIs allowed, Repatriable

No swap

No reinvestment

Launch May 2004

Bad this year,

Better on good years Benchmark BSE 100

Return Since Launch - 24.82

Manage > 3000 crs

Large caps, high concentration on energy,

Diversified with 60 stocks,

Top 10 Holdings are 39.67 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

www.dspmlmutualfund.com

Anup Maheshwari
Since: Apr - 2008
Mr. Maheshwari holds a BCom Degree and is an MBA from IIM (Lucknow).
He joined DSPML in April 2001, prior to which , he was with Chescor as Senior Analyst. He has also worked for IRIS and SCICI as analyst and project officer.

DSPML Top 100 Equity Reg-G

Low Risk

Open End

Growth Diversified,

SIP available

NRIs allowed, Repatriable

Swap Yes

No reinvestment

Launch Feb 2003

Good this year

Above Average on good years

Benchmark BSE 100

Return Since Launch - 35.29

Manage > 1000 crs

High on energy. tech and consumer sectors

Top 10 Holdings are 50 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

Apoorva Shah

Since: Apr - 2006

Mr. Shah is a Commerce Graduate and PGDM from IIM, Ahmedabad.

Prior to joining DSPML AMC, he has worked with GPC India as Portfolio Advisor & Head of Products and with DSP Merrill Lynch.

DWS Alpha Equity-G

Low Risk

Open End

Blend

Diversified,

SIP available

NRIs allowed, Repatriable

Swap Yes

No reinvestment

Launch Jan 2003

Good this year

Above Average on good years

Benchmark S&P CNX Nifty

Return Since Launch - 30.25

Manage > 159 crs

Very High on energy. tech and consumer sectors

Top 10 Holdings are 50.55 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

www.dws-india.com

Aniket Inamdar
Since: Jun - 2007
Mr. Inamdar is an Engineer, and holds a PGDM, from IIM, Ahmedabad.
He joined Deutsche Asset Management Pvt. Ltd. in May 2007.Prior to this, he was with ICICI Prudential AMC for 3 years and has also worked with DBS Cholamandalam AMC and UTI AMC.

DWS Investment Opportunity-G

Average Risk

Open End

Blend

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Jan 2004

Bad this year

Average on good years (only one)

Benchmark BSE 200

Return Since Launch - 17.64

Manage > 161 crs

Very High on energy. tech and consumer sectors

Top 10 Holdings are 39.37 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

ICICI Pru Infrastructure-G

Average Risk

Open End

Growth

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Aug 2005

Not bad this year

High on good years (only one)

Benchmark S&P CNX Nifty

Return Since Launch - 20.49

Manage > 3500 crs

High on energy. Metals, Diversified

Top 10 Holdings are 53 %

More Debt portion currently

2.25 % entry, 1 % exit within 180, 0.5% within a year

www.icicipruamc.com

Sankaran Naren

Since: Oct - 2005

Mr. Naren is a B.Tech from IIT, Madras and holds a PGDM from IIM Calcutta.

Prior to joining Pru ICICI AMC, he has worked with Refco Sify Securities, HDFC Securities and Yoha Securities.

Mrinal Singh

Since: Aug - 2008

Mr. Singh is Bachelor of Engineering (Mechanical) and PGDM from SPJIMR, Mumbai.

He has over 6 yrs. of experience of which 3 months in equity market.

Kotak Opportunities-G

Average Risk

Open End

Growth

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Aug 2004

Bad this year

Above Ave on good years (only one)

Benchmark S&P CNX 500

Return Since Launch - 23.46

Manage > 756 crs

High on Financial Services. Technology, Energy

Top 10 Holdings are 38.05 %

2.25 % entry, 1 % exit within a year

www.kotakmutual.com

Anurag Jain
Since: Jul - 2007
Mr.Jain is a Chemical Engineer and holds a Diploma in Management from IIM Kolkata.
Joined the equity markets in 2001 working with SBI Mutual Fund, ICICI Bank followed with SSKI securities. He joined the AMC in August 2005, as a part of the equity fund management team for evaluating investment opportunities in equities.
Krishna Sanghvi
Since: Jul - 2007
Mr.Sanghvi is a Commerce Graduate, pursued Cost & Work Account from ICWAI, Master of Management Studies (Finance) from NMIMS, Mumbai and CFA from ICFAI.
Has an experience in Credit Appraisal & Credit Risk Management. Prior to joining Kotak AMC, had worked with Kotak Mahindra Primus Ltd., Kotak Mahindra Finance Ltd. & Kotak Mahindra Old Mutual Life Insurance Ltd. He has also worked with IDBI for nearly 2 yrs.

Magnum COMMA-G

Above Average Risk

Open End

Blend

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Jul 2005

Bad this year

Average on good years (only one)

Benchmark BSE 200

Return Since Launch - 9.28

Manage > 508 crs

Very High on Energy. Metals, Chemicals since it is for investing in commodities

Top 10 Holdings are 55.28 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

www.sbimf.com

Sudhanshu Asthana

Since: Oct - 2007
Mr.Asthana ia a M.A in Economics from Mumbai University and holds a Diploma in Investment Management from NMIMS
Has more than 7 years of experience in the financial services industry. Before being designated as fund manager had worked in same capacity and as Equity Analyst with the Quantum AMC for 1 year, for 5 months was with Quantum Advisors Pvt. Ltd.

Magnum Contra –G

Below Average Risk

Open End

Blend

Diversified,

SIP available

NRIs allowed, Repatriable

Swap Yes

No reinvestment

Launch Jul 1999

Bad this year

High on good years

Benchmark BSE 100

Return Since Launch - 24.74

Manage > 2050 crs

High on Energy, Financial Services. Technology,

Top 10 Holdings are 32.50 %

2.25 % entry, 1 % exit within 180, 0.5% within a year

Pankaj Gupta
Since: May - 2007
Mr. Gupta is a Commerce Graduate and MBA from IIM, Luchnow.
Has over 4 yrs. of experience in Mutual Fund, Equity Research and Corporate Banking. He had his previous assignment with ICICI Bank Ltd.

Reliance Regular Savings Equity

Below Average Risk

Open End

Growtjh - MidCap

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch May 2005

Average this year

High on good years

Benchmark BSE 100

Return Since Launch - 11.53

Manage > 733 crs

Mid Cap oriented

High on Energy, Financial Services. Technology,

Top 10 Holdings are 32.43 %

2.25 % entry, 1 % exit within a year

www.reliancemutual.com

Arpit Malaviya
Since: Oct - 2007
Mr.Malaviya is a Commerce Graduate and holds a CA degree.
Prior to joining Reliance AMC, he had worked with JM Financial AMC and ICAP India Pvt.Ltd. as fixed income securities dealer and also with Haribhakti & Co.
OmPrakash Kuckien
Since: Nov - 2007
Mr. Kuckian holds an AICWA degree.
He has more than 18 years of experience. Prior to this he was associated with HDFC Securities Ltd, SMIFS Securities Ltd, and Canbank Financial Services.

Sundaram BNP Paribas Select Focus Reg-G

Below Average Risk

Open End

Growtjh

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Jul 2002

Good this year

High on good years

Benchmark S&P CNX Nifty

Return Since Launch - 32.46

Manage > 916 crs

High on Energy, Financial Services. Technology,

Top 10 Holdings are 41.14 %

Has about 28% in debt and other instruments currently

2.25 % entry, 1 % exit within a year

www.sundarambnpparibas.in

Srividhya Rajesh
Since: Jul - 2002
She is an alumnus of BITS Pilani.
Prior to joining Sundaram, she has worked for two years in Kotak Mahindra.

Tata Infrastructure-G

Average Risk

Open End

Growtjh

Diversified,

SIP available

NRIs allowed, Repatriable

No Swap

No reinvestment

Launch Dec 2004

At par this year

High on good years

Benchmark Sensex

Return Since Launch - 23.22

Manage > 2046 crs

Very High on Energy, Financial Services. Basic Engg,

Top 10 Holdings are 44.51 %

2.25 % entry, 1 % exit within 180 days

www.tatamutualfund.com

M Venugopal
Since: Feb - 2005
Mr Venugopal is B.Sc in Mathematics and also holds an MBA degree with specialisation in Finance.
From August 1995 to September 1997, gained good understanding of the stock market having worked as dealer at Tata Asset Management Ltd for about two years after which he assumed equity fund management responsibility. Has good exposure to large number of industries and companies having done fundamental research over the years

UTI Infrastructure-G

Average Risk

Open End

Growtjh

Diversified,

SIP available

NRIs allowed, Repatriable

Swap Yes

No reinvestment

Launch Apr 2004

Bad this year

High on good years

Benchmark BSE 100

Return Since Launch - 22.75

Manage > 1625 crs

High on Energy,Basic Engg, Diversified, Technology

Top 10 Holdings are 43.77 %

Hard Core infra fund

2.25 % entry, 1 % exit within 180 days

www.utimf.com

Sanjay Ramdas Dongre
Since: Nov - 2005
Mr. Dongre holds a B.E. and a post-graduate degree in management from IIM (Kolkata).
He joined UTI in 1994.Initially, he was asigned a job of Debt analyst which was acting as a support service for fund management activity. He also worked as Equity Research analyst covering wide range of corporates and industries. Subsequently he worked as

Iceland gets swamped by the financial crisis

2008-10-09T02:07:00.000-07:00

We have heard some of the major investment banks go bust during the current financial crisis but what a whole country? But it could really happen and pretty soon if things don't work out well for Iceland!

All the top 3 banks in Iceland have run into trouble and no Western European country has come to its rescue so far. All they need is 4 billion euro and none of its friends have come forward. On the contrary to its NATO members response Russia has shown interest and is in talks at the moment and obviously they are doing it for much more than economic reasons. But this does not come out well then Iceland can go bankrupt. The following is the excerpt from a news report

Iceland took control on Thursday of its biggest bank, Kaupthing, to try to shore up a teetering banking system.
The state has now seized control of three of the nation's major banks after Landsbanki and Glitnir were taken over earlier this week.

At the center of a financial hurricane which has claimed several of the world's biggest banks, Iceland's prime minister has warned of the risk of national bankruptcy.

The central bank has tried then abandoned attempts to prop up its battered currency.

Valuable lessons taught by Stock Markets in 2008

2008-10-06T06:07:00.000-07:00

As a novice to investing and still in my first year I truly believe that this period is teaching me valuable lessons in having ones patience and courage and also in not taking the markets for granted. This period showcases the risk that's inherent in investing in stocks which everyone seemed to have forgotten in the ensuing great bull run. In these dark days teachings or principles of Warren Buffet prove so correct. I mean his emphasis on preservation of capital as the most important aspect of investing.

My emotions keep varying during these days but I still drum up the courage to continue with my SIPs and I now tend to think that markets are now at the last phase of this bear run. Lets see whats in store for the rest of year.

RK

Indian Markets : Are we at the end of the mayhem?

2008-10-06T05:56:00.001-07:00

Just like optimism is at its highest during the last phase of a bull market could this be the lowest point that is common during the end of a bear market? I can't see how more pessimistic one can be! How can one explain blue chips falling 10% or more in a day! The markets are now purely fear driven and no one can talk about fundamentals anymore. Just sit and watch and hope!

Just a while ago Mr. Deepak Parekh said on CNBC that even 100 Crores were not available in the market today. You could feel the pain in his voice when he was talking and he went to the extent of blaming RBI for the mayhem today because of their rigidity in infusing liquidity in the market.

RK

Gujarat Mineral Development Corporation finally fixes record date for bonus!!!

2008-10-03T03:53:00.000-07:00

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The wait is over!! GMDC has finally fixed the record date for the 1:1 bonus it declared in Jan 2008. The stock is heavily beaten down already so not sure how much of a help this is going to be! Anyhow the following is the news report on this issue.

Gujarat Mineral Development Corporation Ltd (GMDC) has informed that the shareholders in the adjourned Annual General Meeting held on September 24, 2008 have approved issuance of Bonus shares in the ratio of 1:1 and authorized the Board of Directors to fix a record date to decide the entitlement of Bonus. Accordingly, the Board has decided October 17, 2008, as the record date for the purpose of deciding entitlement of shareholders for Bonus.

House in US sells for $1.75 on eBay - Weird but true!!

2008-10-02T19:28:00.000-07:00

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This is something I came across today which sounded totally untrue but it seems to be for real

New York: In the midst of the housing mortgage crisis gripping the US, a Chicago woman has won an online bid to acquire a home in Michigan for just $1.75.

Noting that the price of the home in Saginaw, Michigan, was less than the price of a McDonald's value meal, a media report said that it received total eight bids on eBay.com and was sold for $1.75 on Wednesday evening.

However, the winner of the bid, 30-year-old Joanne Smith of Chicago, would have to pay about $850 towards pending taxes yard clean-up costs, the Saginaw News reported.

The winner herself, however, does not want to move to the house and wants to sell it further.

"I am going to try and sell it," she told the newspaper, adding, "I don't have any plans to move to Saginaw. I don't have any plans of moving out from Chicago."

Smith has not yet seen the property. "People from whom I bought the house are not giving me any information about it," the report quoted her saying.

"I know that the property is abandoned and that there are taxes owed on the house, but all I have is their e-mail," she added.

The newspaper reported that it could not reach the seller, Southern Investments LLC, for comment.

"I was trying to go and see it, but I am not going to make a 300-mile trip if I can't go in the house and see inside," Smith told the daily, adding, "It could be haunted or something."

"She will pay additional charges, aside from the dollar and change it cost her, to win the auction. Back taxes and a trash/weed clean-up will set the final price tag around $850. The fee is due by Tuesday, March 31, or the city will foreclose on the property," the report said.

My stock picks for the month of september and october

2008-09-25T19:28:00.000-07:00

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I had listed the stocks that I am looking during this month at http://theindiastockmarket.blogspot.com/2008/09/stocks-to-invest-during-month-of.html

There I had listed Tata Steel, Hotels and Reliance Communications as the ones which I am trying to get into. I got in Reliance Communications and Tata Steel in the first week but as you know Lehmann brothers and AIG screwed the entire financial industry and the Indian stock market went for a spin. They are atleast 10% down from where I bought them. I got into Indian Hotels as well and its stuck at the price where I bought which was after the crisis. They still remain my choices esp Indian Hotels and Tata Steel, I am looking to add some more of them.

In the mean time I took this meltdown to get into Reliance Industries and also used the bounced back after 700 bn Fed package to get out Infosys which proved to be a wise choice. I still have a major portion of my portfolio in technology and I know for sure that I am stuck with them for another couple of years.

I am also looking at Tata Chemicals, I already have it in my portfolio but only a meager number of shares. I added in few and will add some more. ICICI and DLF are at mouth watering price but already made a significant investment there so got to wait for few more weeks to add on more.

And I am going to use any upswing to get out of technology. I will keep cash and wait. Thats what I am going to do for the moment. Hope its not a long wait!!

16 Sep 2008 - My Investment Portfolio and How I Suck!!!

2008-09-16T06:36:00.000-07:00

This is my portfolio. I had started investing from Nov 2007, the peak of Sensex. I am down by about 21% so far. I decided why the hell shouldn't I just publish my portfolio and see how it performs publicly. I have to see if I am as bad or as good, depending on your view, as the analysts in picking stocks. I am negative in almost all except for Infosys and Reliance Industries which I just picked up yesterday. About 40% of my portfolio was built during Nov '07 - Jan '08 period and I just started that's one of the reason why I feel not so bad about this performance. I intend to post this weekly (try!!).

MARUTI -17.02%

TATA MOTORS -42.51%

ICICI BANK -33.23%

IDFC -10.32%

ACC -25.18%

TATA CHEMICALS -3.59%

DLF -21.07%

BARTRONICS -19.27%

INFOSYS +4.90%

NIIT -38.48%

NIIT TECH -49.75%

SATYAM COMP -3.13%

TCS -26.41%

GUJARAT MINERAL -62.45%

TATA STEEL -8.33%

PFIZER -14.84%

NTPC -3.24%

SUZLON -32.85%

INDIAN OIL -18.95%

RELIANCE IND + 4.96%

RELIANCE PETROL -20.18%

RELIANCE COMM -9.18%

RK

Lehman bankruptcy, Merrill Lynch acquistion, Global Meltdown - Are we doomed?

2008-09-16T06:04:00.000-07:00

Meltdown of the markets following the lehman bankruptcy and Merrill Lynch acquistion, on one hand, provides an opportunity to pick up some of the blue chip stocks at attractive prices but I think only the bold and the experienced can have the heart to get into it. I, as a novice, was in double mind whether to pick up stocks and continue with my strategy of value averaging or just give up on investing altogether.

With the markets so bad and never ending shocks I had to think hard whether investing in stocks is such a sensible option after all. I know for sure that the markets can be very different in another 2 years time but the emotions were stronger than logic. Even though I was confused I did manage to pick up a small piece of Reliance Industries. But I learned something for sure during this past year - its no use listening to all the analysts out there. They seem to know as little as what I know.

Beginning of the year there was a herd shouting that the Sensex will reach 25k and just a couple of months ago there was another herd that predicted oil reaching 200 dollars. Where the fuck are these people and on what basis do they predict things.

Its very obvious that analysing the global environment and the performance of an index and that of companies are so god damn hard and, maybe, impossible that many of them were just guessing. I agree with some studies that some of the successful managers were just plain lucky and if you hold stocks for a long term then stock picks from a novice like me can outperform these highly paid and knowledgeable professionals.

Maybe I am just overreacting at how greed of these big banks and institutions is causing so much distress. They are not at fault totally since I also got into stocks to earn double figure returns and its in, well, most of us. They are also human so we can forgive them.

I truly think that the world is getting complicated all the time, people dont like things simple anymore. Otherwise why the need for such complex financial products? And people are now more materialistic, we are never satisfied with what we have. We perenially want better devices, better returns, better lifestyle, bigger houses, bigger paychecks and so on. I have the feeling that we, humans, are paving the path for our own destruction. Its clear everywhere you see!!

RK

Stocks to Invest during the month of September

2008-09-11T20:25:00.000-07:00

I had mentioned in my other blog post the stocks that I am looking at the moment to put in, in fact I already did, my money. One of them is Tata Steel. I thought I will look at the various analyst/brokerage houses predictions for Tata Steel and see whose estimate was closer to the actual stock price.

My decision to buy Tata Steel is purely on its reaching its 52 week low. I do hear news about steel prices cooling down which will in turn reduce the margins of these companies but I assume this information has been reflected in the stock price which should be according to the efficient market theories.

The following gives the estimates from 4 houses which I picked from Rediff. One interesting thing is that Tata Steel's price has nose dived in the last few days which were after these houses published their recommendation. I don't know the reasons for this but lets see how far these houses are right. I will keep updating this post for any new estimates and track this stock progress.

Broking house Action Date Price (Rs)

Edelweiss Research Buy Sep 10, 08 1,035.00

Indiabulls Hold Sep 10, 08 605.00

Religare Buy Sep 09, 08 780.00

Merrill Lynch Buy Sep 04, 08 700.00

RK

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Tata's have the will to overcome obstacles with Nano

2008-09-11T19:38:00.001-07:00

The following is another news item that shows Ratan Tata's will to deliver Nano on the promised date

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News Report:-

Tata Motors is all set to manufacture 1,000 Nanos at its Pune plant. The vendors have released their last lot of components for Nano on Thursday, which will be delivered to Pune within a day or two.

“Tata Motors, which is keenly watching the developments at Singur, is getting itself ready to rollout Nano in October. If the Singur logjam is not resolved within a fortnight, then they have to make some arrangements to roll out Nano from any of its plants. As of now, this does not look to be a part of the much-speculated Plan B,” Tata circles indicated.

Incidentally, Tata Motors had informed its 55-odd vendors of Nano to supply components for 1,000 Nanos by September 8 to the Pune factory. This was also confirmed by a leading vendor, who had invested in the Singur vendor park, and will be supplying sheet metal for Nano chassis.

Incidentally, nearly 3,000 components are required to manufacture a Nano. However, the vendors also feel that the Pune plant will not be able to meet the volumes that Tatas are looking at for Nano in the next two to three years time.
The official Tata Motors spokesperson told: “Tata Motors wishes to dissociate itself from any speculation regarding Nano.”

Interestingly, after tension escalated at Singur, Tata Motors had issued technical approvals to vendors which will enable them to supply components for Nano, if the car is produced at the company’s Pantnagar, Pune and Lucknow plants.

Work at the vendor park in Singur has come to a standstill after the decision on Sunday to stop work there till the joint committee zeros in on land that can be doled out to the landlosers.

A senior official of Rucha Engineering said: “We can only start work at the site if Tata Motors gives us the green signal and if the environment becomes conducive at Singur. Tata Motors has given us a October 1 deadline to be ready with our plant. As of now, we have not got any other communication from Tata Motors. We are hopeful that Singur issue will be resolved at the earliest.”

Skeptics answered - Tata's Nano passes Indian road test

2008-09-11T04:49:00.000-07:00

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Here is the news for those skeptical about the Nano!! Nano passed the road test so its fit to be sold anytime from now on.

Here is the news report

The Singur plant may not be ready to roll out the Nano just yet, but the Rs 1 lakh car is now officially roadworthy for Indian tarmac.

The car was successfully ‘homologated’ by the Pune-based Automotive Research Association of India (ARAI), which handed over the Nano’s clearance certificate to Tata Motors last week.

This means that the car has met all the specified criteria for roadworthiness laid out by the government including emissions or noise & vibration and can now ply on Indian roads.

Indian Retail slow down claims another victim - a big one!!

2008-09-11T04:33:00.000-07:00

A RIL spokesperson said in an email, "We started the mart with 1,55,000 sq ft. We have right sized to 1,00,000 sq ft. We plan to use the excess space generated for other retail ventures in the pipeline."

This statement speaks the story. This is what was stated in CNBC

Reliance had to slowdown expansion and even downsize its hypermarkets, just two years since the launch of its retail operations. In Ahmedabad, it is leasing out an entire floor to other retail players, possibly an American restaurant. The hypermarket that started out over three floors is being reduced to two, the third being leased out

Too many players entered into retail in too short a period of time. This happens time and again -businesses trying to get pie of a market that has huge growth potential subsequently creating a bubble which can then only grow as big before it bursts. Virtue of patience is lost by individuals and businesses alike. Everybody wants to have those profits right now, can't wait for few years. This includes me as well, I don't have the patience to hold on to stocks that are stagnant but have good potential in few months time.

Warren Buffet is right when he says

"The stock market is designed to transfer money from the active to the patient."

RK
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Investment opportunities for the month of September

2008-09-11T04:22:00.000-07:00

I am looking at Tata Steel and Indian Hotels for investments during September. I follow the Value averaging method of investing. I already picked up some shares of Tata Steel today at 525 apiece. I really think it is available at a discount with minimal downside.

I really would like to pick up Indian Hotels, they had announced today to set up 50 new hotels under Gateway name. But I ran of money for this month since I picked up some piece of Reliance Communication which is also available at a great price with limited downside.

I am selling off some of the non-performing stocks to get the rupees to invest these good stocks. But I am confused if I should put in more money this month or should I wait for October. I think the markets will still be as volatile as now for the next 2-3 months so I should be able to pick them up at prices closer to what they are right now. Lets see!

RK

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DLF decision to buy back good for the stock?

2008-09-09T05:01:00.000-07:00

I don't know the exact reason why DLF decided to buy back shares in the open market and I really don't care since I believe it is a very good company and will continue to do well in future and, more importantly, I think it is available at great price. May be that's one reason why they want to buy back!

Anyhow, I am more interested in seeing if this has any impact on the stock price. Will it raise in the short term? Is it good for the investors who would like to hold on? I think the price could move up a little bit and also that it is good for the rest of the guys who like to keep invested as, obviously, there will be fewer number of shares and shareholders to trade in so there will be a big demand when the markets correct in the coming months.

But having said that I think one needs to keep an eye on DLF when the stock price reaches peak levels. Will they take that opportunity to sell off and make a gain? This is something that needs to be looked in the next 2-3 years time.

RK

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Tata Nano and the Singur Issue - Mamata Banerjee's dangerous political game

2008-09-03T06:43:00.000-07:00

Is Mamata Banerjee a bitch who is out to gain political mileage by acting to promote the farmer's cause or is she the true savior as she seeks to project herself? Well, its hard to answer this especially without knowing the truth behind the protests.

There is definitely a point in the protests but, only if, the farmers are not adequately compensated for their lands and also for their future. What I mean by that is if farmers were paid much below the market prices and if they are not being offered any kind of jobs within the plant, however menial it maybe, that can ensure their future income.

In my opinion the small farmers are better off selling their land and getting employed. Farming is no easy job anymore - We hear news about the suicides from so many parts of the country, don't we?

Protests, for any other reason, is either purely political or Tata's corporate rivals could be playing their dirty games to stall the Nano from taking off.

I have to praise Mamata for one thing - the timing of her entry. She waited till the last moments to take up this cause knowing fully well that Tata's have no option but to settle when the plant is at its final stages. Its too expensive for Tata's to move anywhere else at this point and this could put the entier Nano thing at risk. She is a shrewd woman, thats for sure.

So whatever may be the motives there is only one way out i.e for Tata's and the West Bengal Govt. to compromise and give in to some, if not all, of the demands.

RK

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Stocks that I missed to buy

2008-09-03T03:42:00.000-07:00

One of the stock which I thought will do well but that I missed to buy is Crompton Greaves. I was watching for some time now and I saw it fall to 200 and I wanted to get in but I always got distracted by other stocks when it came to actually put in my money. I bought minuscule number of shares around 220 and sold at 250. I wanted to get in when it came back to 200 but it never did and its right now hovering 280.

Stocks in my focus at the moment!!

2008-09-03T03:37:00.000-07:00

Some of the stocks that I am looking to get in at the moment (these vary almost on daily basis) are

IDFC - I think its available at a good price
IndiaBulls Financial Services - I think it fell too sharply so provides a good trading opportunity. To be frank I don't have much idea about its business and the reason for the fall.
Indian Hotels - Again its available for a good price

I would also like to get into Reliance Communications but not too sure about Mr.Anil Ambanis future plans for it. And my plan was to invest more into DLF and some of the banks but unfortunately the oil prices dropped and these stocks zoomed.

Investment Jokes, Trading Jokes, Business jokes

2008-08-15T01:20:00.000-07:00

Some of the jokes I liked...

Bull Market:

Is a random market movement causing an investor to mistake himself for a financial genius.

Bear Market:

Is a 6 to 18 month period when the kids get no allowance, the wife gets no jewelry and the husband gets no sex.

Funny Quote:

When asked what the stock market will do, J.P Morgan (1837-1913) (banker, financier, businessman) replied:"It will fluctuate."

Funny Story:

A woman walks into a bank in New York City and asks for the loan officer. She says she’s going to Europe on business for two weeks and needs to borrow $5,000. The bank officer tells her that the bank will need some kind of security for such a loan, so the woman hands over the keys to a new Rolls Royce that’s parked on the street in front of the bank.

Everything checks out, and the bank agrees to accept the car as collateral for the loan. An employee drives the Rolls Royce into the bank’s underground garage and parks it there.

Two weeks later, the woman returns, repays the $5,000 and the interest, which comes to $15.41. The loan officer approaches her and says:

“We are very happy to have had your business, and this transaction has worked out very nicely, but we’re a little puzzled. While you were away, we checked out your accounts and found that you were a multimillionaire. What puzzles us is why would you bother to borrow $5,000?”

“Well, where else in Manhattan can I park my car for two weeks for fifteen bucks?”

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To trade or invest during 2008?

2008-08-15T01:06:00.000-07:00

Throughout these months I am torn between two ends - Should I sell off and book profits when the market moves up and re-enter again at lower levels or Should I just hold and follow the buy-and-hold strategy. I am sure many of you would have faced this dilemma. I still could not decide which one to follow. I basically want to follow the buy-and-hold principle but the markets are too volatile during this year where it really makes sense to sell at higher levels and re-enter later when the markets crash. Of course it is not known if the markets will crash again but there are too many factors that point to the inability of the markets to hold higher levels for a sustained period of time.

So trading can give you at least some returns during these volatile times but it is against the principle of investing. I have seen many stocks which were 10-15% in the positive and now they are way down at -20%. Is this loss of opportunity to make a decent return? Or does it make sense to just stick to your principles?

I am not able to decide on one. For the moment I am prepared to sell off stocks that are sensitive to interest rates and oil prices at higher levels and hold on to ones, esp technology, that I perceive as relatively stable. One drawback is of course if the Oil continues to fall then I can miss out on higher returns as these rate sensitives can move up pretty fast. This is a learning phase for me so I am just prepared to make mistakes and learn.

RK

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Selling BHEL and Crompton Greaves after Congress victory a good choice?

2008-08-03T02:20:00.000-07:00

This is a follow-up to this post where I wrote about my decision to sell BHEL and Crompton Greaves immediately following the victory of the Congress government. Reason being that I thought those highs were due to public euphoria and optimism than anything else. Both of these stocks went down from the very next day onwards. I see BHEL move back to 1750 region and I still believe that BHEL will be a good buy around 1450-1500 which is where I would like to get in. And I see Crompton Greaves moving in a range - 225-250, it has been doing so for quite a while. It is a good stock and I will get into it around 220. That is the price I am comfortable paying and holding for long.

So, for now, decision to sell seems to be good but I can't say it conclusively until I can get back in to these stocks at the prices that I am comfortable with.

India Stock Markets, Indian Stocks :- BHEL and Crompton Greaves

2008-07-23T06:55:00.001-07:00

Sensex ended on a huge high!!! I took this opportunity to get out of BHEL and Crompton Greaves.

I bought BHEL at 1638 and Crompton at 237, Sold them today at 1786 and 257 resp.

Its not that I wanted to make a gain, I think this rally was pure hysteria and wont last long!!

I think both BHEL and Crompton have a little more downside where I want to re-enter and then hold them for long. I believe in both these companies but not comfortable holding them at 1600 and 240. Will be comfortable to hold them for long at 1400 and 210 resp.

I will see how the markets now and if there is no immediate downside then will get into Satyam. It is at a good support level and it has bounced back pretty couple of times before and I dont see any change in the market conditions or with the company itself to prevent another rally.

R

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Indian Companies announcing quarterly results on 25 April 2008

2008-04-25T03:02:00.000-07:00

3I INFOTECH
ABB LTD
ALBRIG WIL C
ALEMBIC LIMI
AMBUJA CEME
ANDHRA BANK
AREVA
ARMAN LEA FI
ASHIAN AGR I
B&A MULTIWAL
BAJ HIN SUG
BALA TEC GL
BEST & CROMP
BHARAT ELECT
BHARTI ARTL
BIOPAC INCOR
BIRLA VXL
BLUE CHI TEX
BRIGADE
CENTRUM CAP
CHASE BRIGHT
CHOLA DBS
CIPLA LTD.
DB(INTR)STBR
DIC INDIA
DUJODWA PROD
ESQUIR MONEY
FOODS & INNS
GANDHI SPG.M
GLAXOSMI CON
GLOBAL BROAD
GUJ HOTELS L
HINDO SPG WV
HINDUS CONST
I BRIGHT ST
INDIACO VEN
INTEGR KNIT
INTEGRA HIND
JASCH INDUSR
JAYSHRE TEA*
JAYSHREE CHE
JHUN.VANS.
JINDAL SOUTH
JP HYDROPOW
KALE CONSUL
KANIKA INFOT
LIBORD INFO
LIBORDS SECU
LIC H. FINAN
M.R.F LTD
MAHINDRALIFE
MIC ELECTRON
MODERN DAIRE
MULLER & PHI
NEOCORP INTE
ODYSSEY TEC
POLYCHEM LTD
QUINTEGRA SO
RAS RESR APR
REGENCY CERA
ROBIN WORLD
RSYSTEMS INT
SAWACA BUSI
SE INVESTM
SHEETAL BIO
SHOPPER STOP
SIDDHESW GAR
SIEMENS LTD
SIMMOND MARS
SOLVAY PHARM
SRF LIMITED
STEWART LLOY
SYNERG LOGIN
TANFAC INDUS
TAYO ROLLS
THANA ELE SU
THIRU AROORA
TITAN IND.
UNI LEGEWEAR
WALCHAND IN
WENDT INDIA

Testosterone is the key to success in stocks? What bullshit!!

2008-04-15T20:07:00.000-07:00

According to some nutty researchers from University of Cambridge testosterone could be the key to success in stock market trading. I have not heard of a bigger bullshit than this. Read the report here

RK

Hot off the shelf : India-focused hedge funds lose over 25% in 2008

2008-04-14T21:00:00.000-07:00

Just because they are big and secretive doesn’t make them safe from market corrections! India-focused hedge funds have lost a jaw-dropping 26.6 per cent till date in 2008, after clocking returns of nearly 52 per cent last year. Hedge funds are believed to be able to generate positive returns, even when the stock markets fall as they use a host of strategies such as short selling, market timing and arbitrage to take advantage of every blip in the market.

The loss suffered by these India-centric funds led by little-known ‘hedgies’ (hedge fund managers), dwarfs the losses made by similar country-specific funds in China (negative 13.7 per cent), Russia (negative 4.6 per cent), Brazil (negative 4.2 per cent), real-time estimates captured from hedge fund tracking firm HedgeFund.net (HFN) show. The developments are in line with the difficult period faced by funds such as Monsoon Capital, a $1.2 billion hedge fund firm, which lost over 40 per cent till March 20. Hedge fund managers earn fat fees, sometimes as high as 20 per cent, for earning high returns.

The financial market turmoil that clamped down on fund flows into emerging markets such as India, and apprehensions about the effect of US recession on domestic companies have resulted in Indian investors cumulatively losing nearly Rs 20 lakh crore in wealth, as shares prices have plunged.

India whining

After a less punishing February, where 40 India-focused hedge funds lost just 3.2 per cent, the pain continued in March. Fifteen such funds have already reported losses aggregating to over 14 per cent for March, HFN’s India-specific average shows. It could get much worse as more than half the funds are yet to turn in their numbers. Interestingly, hedge funds focused on US, the original root of the current financial conundrum, have lost only 2.3 per cent in all of 2008, with the month of January alone accounting for the bulk of losses.

Difficult March

The majority of hedge fund strategies lost ground in March contributing to the first negative Q1 performance on record. Increased volatility surrounding the ultimate failure of investment banking giant Bear Stearns and the ensuing the US Treasury actions defined a difficult month, HedgeFund.net said while releasing the March estimates. Overall, hedge funds with a country-specific mandate have performed the worst (negative 12.5 per cent) this year, followed by long-only funds (negative 10.7 per cent) and capital structure arbitrage funds (negative 8.8 per cent).

source: Sify Piece by Kumar Shankar Roy

rk

Analysts and Brokerages Views and analysis round up - 15 Apr 2008

2008-04-14T19:59:00.000-07:00

R Sukumar of Franklin Templeton said the markets will see more declines than advances. "Another 10% downside cannot be ruled out from current levels. News flows will remain negative from a fundamental perspective."

Sukumar expects earnings to grow in 15-20% band instead of 30% earlier. "Forex derivatives losses will also impact profitability."

Nitin Rao, Executive VP, HDFC Bank recommends people to start looking at fundamentals more closely. “We strongly believe that the fundamental valuation levels for the market would point to a forward P/E range of 17 and we strongly believe that these levels offer attractive investment opportunities for investors over a one-year period at least” he says.

SN Rajesh, Director of UTI Ventures says that while picking up companies, they look at the execution capabilities because growth capital and a lot of success comes from their execution capability and the ability to build big.

Rajen Shah of Angel Broking said Infosys’ numbers would be very much in line with its guidance. "The new guidance for FY09 could probably be lower than what the market estimates because they will factor in maybe a rupee appreciation. In order to control inflation, we could probably see the government letting the rupee appreciate."

rk
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India Stocks, Stock Market and Business News Round up - 15 Apr 2008

2008-04-14T19:55:00.000-07:00

FIIs three-times more bullish than promoters
Sify.com Yesterday at 8:16 PM

It is the 'heavy selling' by FIIs being blamed squarely for meltdown at Dalal Street, but if their market activity patterns are to be believed, overseas investors seem to be over three times more confident than India Inc itself regarding the market's future growth.

Banks may hike lending rates if RBI hikes CRR
Sify.comYesterday at 8:13 PM

Top Bankers today said the lending rates may go up by upto 0.5 per cent after RBI's credit policy on April 29, which may hike CRR by upto 0.5 per cent to contain inflation.

US financial crisis not to derail India growth story: Soros
Sify.comYesterday at 7:24 PM

Showering praise on Prime Minister Manmohan Singh-led reform process and Ambani brothers for their contributions to Indian economy, legendary investor George Soros has said that the US financial crisis would not have much impact on the country's growth story.

Stainless steel supply sufficient: ISSDA
Sify.comYesterday at 6:42 PM

Amid concerns that the government may curb exports to contain rising inflation, stainless steel makers today said there is no dearth of the commodity in India and as such they should not be treated at par with carbon steel industry which is facing flak for raising prices.

IOC losing Rs 320 crore per day
rediff.comYesterday at 8:48 PM

Indian Oil Corp, the nation's largest oil firm, today said it is losing Rs 320 crore (Rs 3.20 billion) a day on fuel sales and may see future projects getting impacted if the current situations continues in 2009. "We are losing about Rs 320 crore a day on sale of petrol, diesel, domestic LPG and PDS kerosene," IOC Chairman Sarthak Behuria told reporters on the sidelines of 5th Asia Gas Partnership Summit in New Delhi.

Interest rates may rise after April 29
rediff.comYesterday at 8:48 PM

Bankers have said that lending rates could go up to 0.5 per cent after the Reserve Bank's annual credit policy, which is widely expected to take stringent monetary measures to contain price rise. Many expect the central bank to effect a hike in cash reserve ratio (CRR), the rate of amount all commercial banks need to keep with the Reserve Bank, in its annual credit policy on April 29. Many banks, including SBI, had revised their lending rates downwards early this year.

rk
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