Is it time to sell your investments
With the markets crashing today, the question running in everyone’s mind is whether to stay put or rush for the door. In one of my previous articles, we analyzed several reasons for selling stocks. This article attempts to address reasons for selling your mutual fund schemes.
Before you consider exiting your mutual fund investment/s, one of the important questions to ask yourself is the reason for buying this particular scheme. I am sure there might be several reasons but for most people it is “High (Highest) Returns”. This reason can easily fizzle out as it is very difficult if not impossible for schemes to consistently give High(est) returns. Some of the funds have performed consistently well in both up and down markets and have demonstrated their ability to be in the top quartile of funds, but there may be instances where these funds lag the market for various reasons.
Does that mean you should rock the boat at the smallest sign of trouble? The answer is ‘No’. Investing in Mutual Funds like investing in stocks is akin to getting into a relationship. The idea is to share the good and the bad times. Well you will have no problems sharing the great times (read investment rocking or bull markets) but going through a rough patch (read returns lower as compared to peers or bear markets) is testing time for most of us. However there will be times, which will necessitate you to take those tough calls.
Here are 6 such times when you should consider selling your mutual funds.
1. Poor Performance
The first and foremost reason for quitting any investment is that the fund has demonstrated poor performance. Infact this should be the last reason to consider quitting a scheme. First analyze the reasons for poor performance and the period over which the fund has demonstrated poor performance. Is it that the fund manager has taken some stock specific or sectoral calls that have gone wrong? Are some of the stocks out of favor currently? After all the reason that you have opted for a scheme is the track record of the fund manager in managing the scheme in good and bad times. So as long as there is no change in the fund manager you need to take stock whether underperformance for a few months warrants exit from the investment.
There are times when a star manager /fund management team will falter. You should not penalize the fund manager for sticking to the investment mandate of the fund. After all, this is what you would expect from him. However if he does not stick to the investment mandate of the fund but takes calls that he should not be taking, then one can look at moving out. For example someone who is mandated to be invested in equities at all times moves out when he takes the view that the markets are overvalued at 12,600. Since then the markets have delivered 20% and investors have lost on this opportunity. Well you can argue both ways that being in cash is a better strategy or not, a scheme that is mandated to be invested at all points should just do that.
For example Sundaram Select Mid Cap Fund has had consistently more than 22% in cash and this seems to have dented returns. One could attribute the high cash levels to a lack of conviction in the market or the belief that one can time the market. Both these reasons are detrimental to the future performance of a fund.
Keep an eye on the scheme whether it under performing continuously for a couple of quarters. If the fund doesn’t recover after several quarters of underperformance you can look at exiting the fund.
2. Follow the Manager
Fund houses often promote schemes that have done exceptionally well and the fund manager is accorded godly status. The scheme is then aggressively marketed and subsequently new schemes are launched using the star manager’s name. Then suddenly when the fund manager departs, the fund house is quick to do a volte-face and retort that we are a process oriented fund house. The fund house cannot have it both ways. So one needs to be careful of the statements a fund house makes. Take the example of SBI Mutual Fund and Sandeep Sabharwal. There was a lot of noise created around his midas touch during the launch of SBI Bluechip Fund. But as soon as the NFO was over, there was not even a murmur about his departure and exit. Such steps can prove to be harmful for investors. Luckily for SBI, the incoming Head of Equity proved to be as competent as his predecessor and was able to maintain the sheen of most of the SBI funds. Needless to say SBI Bluechip bombed. Similarly Lotus Mutual Fund was purely marketing their schemes on the basis of Sabharwal’s brand and track record. However when he quit the fund house just before the launch of their maiden equity offerings, Lotus seemed to have lost its trump card. There is no strong evidence that a fund’s performance will suffer for sure after a star fund manager’s departure but yes it’s a very important factor.
When a fund manager departs, check whether a competent fund manager with a consistent track record has stepped in. Also check if the fund manager sticks to the investment strategy of the fund or deviates from it. Reading and a finer analysis of the fact sheet will give you a sense whether there has been a churn in the portfolio in terms of stocks , sectors , asset allocation or strategy.
If a team of fund managers manages the scheme, one exit will not disrupt the fund and hence you should stay put and evaluate the investment for two quarters. However if there is an experienced fund manager who comes in the picture, you can look at opting for better options.
3. Size of the Fund
Size of the fund could have impact on a scheme’s returns. Funds such as Reliance Growth, HDFC Equity continue to shine even with a corpus of 3900 and 4400 crore respectively just as they did when they were much smaller in size. However funds such as SBI Magnum Global and Sundaram BNP Paribas Select Midcap seem to have tapered down under the pressure of too much money. This is particularly true for small and mid cap funds as it is difficult to move in and out of such stocks quickly. Reliance Growth had shut shop at 1700 crore but is open for subscription at almost 2.5 times of its previous closure. When closing the fund becomes a fashion nobody wants fresh subscriptions and hence launching a new scheme becomes a no brainer. After all, who wants to have Daal every day?
A look at Sundaram BNP Paribas Portfolio shows around 115 stocks. This shows that there are several marginal ideas besides some excellent ones. When the fund does not know what to do with the new money that comes in, it’s generally time to exit the investment and take it elsewhere. Whether it has 5 star rating or not is immaterial. A fund has got a 5 star rating because of its past performance and not because of its future performance. So 5 star or not, it’s time to look at the door.
4. Are your investments really diversified?
One of my readers had come across had around 40 funds with Rs 10,000 invested in each of them. Infosys was the common stock in 38 of his funds. This does not amount to diversification. Infact 20 stocks were common across 30 of his schemes. There was hardly any element of diversification. The point is having many funds does not mean you are diversified as funds often have similar kind of stocks in one’s portfolio. You can sell most of your funds if you find yourself in such a situation and keep only two funds with a good track record in each category diversified across fund managers, houses, type of stocks, sectors and style of investing. So take a hard look at whether a fund really complements your portfolio and exit where there is significant overlap between the funds.
5. Need Money for a Goal
This is one of the most important reasons to sell a fund. When you need money for a fund and you have achieved your targets, you can move partially 50% in debt or 100% depending on the market outlook. Since it is often difficult to time the markets, it is better to sell your fund and move into debt 6-12 months before you need money for a goal.
6. Rebalancing your portfolio / Moving into Cash or Debt
In today’s market, your equity allocation would have exceeded the figure that you like to have as a part of your portfolio. If this is the case, then you can either move some of your worst performing funds into debt / cash OR add additional funds to the debt part of your portfolio namely FMP’s. It’s best to undertake the asset allocation exercise as an annual ritual.
Finally before you press the Sell button, take stock of the tax implications and exit loads if any. If you can a tax by being invested for a few days or months, it makes sense to wait and then sell on completion of 1 year. However sometimes it’s good to exit (at the cost of paying short term capital gains tax and exit loads) if you have made substantial profits in a very short period of time or if the scheme is in deep trouble.
One of the biggest and most common reasons why people sell which I have not mentioned is the worry of market coming down and whether the markets can sustain at 15,000 levels. Well I don’t have the answer whether the markets will stay at this level in the next few days or will correct sharply as the Gloom Doom Guru repeatedly says on business channels. Market moves are random and one certainly cannot predict the next set of moves whether up and down with a consistent level of accuracy.
Corporate India’s report card will be out this week starting with bellwether Infosys and though corporate earnings will slow down from 30% plus levels to higher teen levels, a 15% earnings growth for the next 4 years remains a possibility. This can translate into a 12-15 % return by well-managed diversified equity schemes or for that matter even by balanced funds.
Sunday, January 27, 2008
Thursday, January 24, 2008
Comparing MF portfolios? 5 points to note
Investors who do a bit of research on their own are often stumped by how mutual funds with relatively similar portfolios have sharp variance in their performances. They expect such funds to post similar results by virtue of similar portfolios.
We believe this can be explained easily if investors factor in some points in their analysis.
At Personalfn, clients taking a keen interest in their investments are a common sight. They often evaluate their investments critically and do their homework, like comparing portfolios of various mutual funds looking for patterns, reasons for outperformance/underperformance and why similar portfolios have wide disparities in performance.
It's always a good sign for investors to take more than a casual interest in their investments. Although the financial planner is there to guide them, investors must never lose sight of the fact that it is after all their money.
While comparing portfolios of various mutual fund schemes, investors must keep the following points in mind:
1) If you wish to compare portfolios of two mutual funds, first ensure that they belong to the same category. For instance, comparing the portfolios of two diversified equity funds that invest across the market (large caps, mid caps) is rational but comparing a thematic fund's portfolio with that of a diversified equity fund isn't.
While comparing mutual funds across categories is flawed right from the start, there may be some instances when a diversified equity fund's portfolio might coincide with that of a thematic fund. But such a scenario is likely to be rare and short-lived. Short of these instances, such a comparison would give very misleading results.
2) Investors often evaluate portfolios to get into the fund manager's mind so to speak. At least that is the case with some popular names like Warren Buffett.
However, some investors go a step further and compare portfolios of two mutual funds to understand why there is a disparity in their performance despite the presence of similar stocks and sectors across the two portfolios.
For instance, they will compare the latest portfolios of two mutual funds and try to figure out why their returns over 3-year are so disparate? There is a fundamental flaw in this evaluation. The latest portfolios cannot unravel what happened 3 years ago.
To understand that, investors will have to go back 3 years and evaluate the portfolios of both the mutual funds over this time frame i.e. from then until now. The disparity in the two portfolios over this period (3 years in this case) should explain the disparities in their performance.
3) Another point that investors ignore while studying portfolios is that simply being invested in similar stocks and sectors is not reason enough for mutual funds to deliver the same performance.
Even when two portfolios have the same stocks and sectors, they could have invested in these stocks/sectors in varying allocations/proportions and over varying time frames, which could explain the disparities in their performance.
4) Let's assume there are two mutual fund portfolios with fairly similar stocks and sectors in roughly similar allocations, but yet have varying performance.
To unravel the disparity in their performances, it's necessary to examine the performance of each stock and sector in their respective portfolios in detail. When investors get down to doing that, they will find that there is at least one stock/sector that has appreciated very sharply which eventually proves to be the difference between the two funds.
That is what one smart investment decision can do to a mutual fund's performance. There have been many instances of just a couple of investment decisions changing the fortunes of a mutual fund dramatically. However, for investors to determine which particular investment decision made all the difference, they will have to evaluate each investment made by the mutual fund (in terms of stocks and sectors).
5) To continue the previous point, at times investors may not be able to trace a particular stock/sector that made a huge difference to the mutual fund's fortunes. In such a scenario, it could well be that it was not an investment in a particular stock/sector that did the trick; it could simply be a higher cash allocation in a particular month which coincided with a stock market crash.
We have seen this happen in the past, when a mutual fund's performance jumped not so much due to its stock/sector investments as much as its cash allocation during a market downturn. While evaluating mutual fund portfolios, investors must also keep this point in mind.
So while it is an encouraging sign to see investors take an avid interest in their investments, they must adopt the right approach so as to make an accurate evaluation. This way, they can have a fairly good idea about why certain mutual funds are doing well or have done well in the past.
How to tell when a share's price may fall
Instead of rationalising, sell the stock when trouble strikes the company and reassess the situation from a cooler distance.
"It's different this time" are the most expensive words in the investment business. They are a rationalization trap of the highest magnitude, particularly in reassuring yourself to hold on to a share when it's clearly better to sell it.
Confronting Reality
Although business situations are seldom if ever identical, success in business can be analyzed; patterns of managerial behavior are recorded, categorized, and taught in graduate business school classes. In the same way, there are common contributors to failure which are discernible in deteriorating investment situations. Following is a list of some of the danger signs:
- Heavy promotion of the stock by management or agents
- Projections of unusually strong/lengthy growth
- Use of round numbers for predictions (e.g., 50 per cent growth, or a "$ 10-billion market")
- Questioning the motives or expertise of reasonable doubters
- Strong claims to being the best, unique or exclusive in a business
- Defining the market narrowly so that, by definition, one is the leader
- Ready excuses faulting outside forces when performance falls short
- Lateness in reporting earnings (against either prior practice or SEC filing deadlines)
- Change in outside auditors
- Change in lead banker without improvement in interest cost and/or size of credit facilities
- Substantial insider selling of the stock
- Resignation of key officers or of directors
- Sales or margins trends diverging negatively from those of the competitors
- Inconsistent management statements
- Identical (seemingly rehearsed) management statements
- Stonewalling when trouble is obviously present.
Faced with some combination of perhaps three or four of the above, an investor can reasonably and prudently conclude that something is wrong and should get out of the stock. To insist that a particular combination of adverse events as seen in another situation can be fully repeated before concluding the stock is in trouble is naive, and probably costly.
Things do not get better by themselves. When a company's affairs appear to be deteriorating, even if certain negative events have not been reported, investors are well advised to assume the worst by projecting that the situation is likely to continue worsening.
The point is, investors should be looking diligently for disturbing similarities to other problem situations rather than watching for comforting differences. The objective is to detect trouble as early as possible, thereby preventing or limiting loss of one's capital. There is an analyst's clich� that the first earnings disappointment will not be the last.
Similarly, be suspicious at the first signs of any type of trouble. Unless a neutral or skeptical observer can be convinced that all is well, exit before things have a chance to become worse. Ask dispassionately whether, in light of today's facts, it is a good idea to buy now.
There is a real but subtle difference between the "this-time-it's-different" rationalization and "this can't be happening to me." If what is going wrong is like something that went wrong once before, there is probably a reason. Putting it bluntly, the same mistake has been made again.
Simply hoping that the same mistake could not have happened again, however, is just across the reality-denial border from "this is not happening." This indicates a need to deny that anything is wrong, a blocking of the pain caused by a mistake. And, of course, when a mistake is public knowledge (the broker knows, and at year's end the tax accountant will know, too) the distaste is all the more deep and embarrassing.
What usually happens in these situations is that the investor focuses in the wrong direction; he turns subjective and inward. But the reality is that whatever is happening (collapsing earnings, a dividend cut, executive stock sales or resignations) is happening to the company -- not the investor -- in the objective plane, entirely unconnected causally to this particular investor's current ownership of the stock. It is happening, period.
The personal internalization that says "it is happening to me" and eventually "this can't be happening to me" is a rationalization. Sometimes an investor grasps at the discernible differences from a disastrous past investment experience and uses them to tell himself shakily that it will be alright, it is not at all the way it looks.
Instead of rationalizing, sell the stock at the point in time when trouble strikes the company and reassess the situation from a cooler distance. Remember that things do not right themselves. And realize that some serious buying power from other investors will be required to get the stock back up to higher levels.
A smart investor asks this key question: If I did not own the stock, with today's knowledge would I be a buyer now? When trouble first appears, prepare for the worst. This includes developing a mental scenario of what other shoes might drop, how long it all will take to play out the situation and how the market will react to the problem.
The most important aspect of performing this mental exercise is to examine prior situations in search of their similarities rather than differences. Then from a big-picture standpoint, remember that history does repeat.
20 great stocks to buy in 2008
20 great stocks to buy in 2008
Stock selection will be the key factor in determining returns in 2008, given concerns of a global slowdown and premium valuations in domestic markets.
Year 2007 saw the market deliver good returns amidst volatility, especially in the second half, thanks to global concerns. The BSE Sensex was up a good 46.6 per cent, helped by strong foreign and domestic inflows.
And what led to these inflows was none other than a strong performance by India Inc. For investors, the moot question is how will 2008 be? The answer is not simple given that none of the global concerns have eased, while the Indian rupee is still firm and India Inc is experiencing a deceleration in growth rates.
"Year 2008 will be difficult globally, although it is not yet known how deep the US downturn will be," says Andrew Holland, managing director -- strategic risk group, DSP Merrill Lynch.
While India's vulnerability to global shocks has been put to test adequately over the past year, the overall macroeconomic growth remained strong owing to infrastructure, capital goods and real estate sectors.
Notably, the story is not likely to be very different in 2008 barring drastic surprises, which means that domestic consumption plays should remain in flavour.
By this logic, the most certain sectors are capital goods, financial services, infrastructure, power, logistics and oil, gas and energy sectors among others. Even among these sectors, not all stocks can be expected to do well, owing to the differences in business models and the individual strengths and weaknesses.
Further, in our selection, we have looked at the fundamentals of companies and their potential to deliver earnings growth of over 20-25 per cent.
But, while growth is a must, valuations too need to be fair, which is why we kept a tab on the price earnings to growth (PEG) ratio. Here, most stocks are trading at a PEG of less than 1 times based on FY09 earnings estimates, which ensures that the price is not exorbitant.
To ease your effort of picking the juiciest fruits from the orchard, we have handpicked a few likely winners of 2008. Read on.
Adlabs Films [Get Quote]
With a strong presence across the entertainment industry value chain of content production, distribution, and exhibition, Adlabs becomes the choicest pick.
Domestic consumption and leisure spends will remain buoyant as disposable incomes rise across the country fuelling growth at Adlabs.
Adlabs produces and distributes films, and is a dominant player in the multiplex segment. It has also acquired 51 per cent stake in television content producer Synergy Communications, the maker of Jhalak Dikhhla Jaa and Kaun Banega Crorepati.
In the FM radio business, its subsidiary, which runs Big FM has 44 FM licenses across India. This could also become a value unlocking opportunity going forward.
Over the past three years, Adlabs has impeccably delivered a top line growth of over 100 per cent y-o-y, along with high profitability. In the September 2007 quarter, it raked in a whopping 69 per cent operating profit margin.
But going by the past numbers, operating margins have remained in excess of 50 per cent consistently, with net profit margins at over 22 per cent. The stock has appreciated three-fold since January 2007 and should do well.
Bank of Baroda [Get Quote]
Bank of Baroda has a strong presence in western India -- a key zone for retail and industrial growth-- with equally good rural network.
Further, the bank is one of the few banks having a substantial international presence, which contributes 18-20 per cent to total business and 30 per cent to profits. This business is expected to rise further with the bank growing its global presence.
The bank has improved its fundamentals over the past several years on key parameters such as net interest margins (NIMs) and asset quality despite growing at a robust pace (asset growth CAGR of 19 per cent in FY04-07). Going ahead, the bank's focus on NIMs backed by moderate growth augurs well.
Besides, its initiatives such as online trading services, and joint ventures in insurance and asset management, will help it create value for its shareholders.
Additional triggers could be in the form of consolidation within the public sector bank space. All this put together makes this stock, which is reasonably valued at 1.4 times its FY09 estimated book value, an attractive investment opportunity.
Bharat Bijlee [Get Quote]
Though Bharat Bijlee has risen by a whopping 228.5 per cent in the last one year, even at current levels, it is inexpensive.
Consider this: The company has investment in various companies including Siemens, HDFC [Get Quote] and ICICI Bank [Get Quote].
At current rates, their combined value works out to Rs 317 crore (Rs 3.17 billion), or about Rs 560 per share.
Excluding this, the core business is valued at attractive valuations of 20 times FY08 earnings and 15 times FY09 estimated earnings.
The company is capitalising on the emerging opportunities in the power transformer sector, which accounts for 65 per cent of its total revenues with the balance from motors.
In the Eleventh Five Year Plan, a total power generation capacity of 78,000 mw is planned. This augurs well for transformer manufacturers such as Bharat Bijlee.
The company on its part has recently expanded its transformer capacity to 11,000 MVA from 8,000 MVA. The motors business is also witnessing 25 per cent growth and Bharat Bijlee has forayed into higher frame motors of up to 400 kw. All this put together make Bharat Bijlee a good pick.
Bharati Shipyard [Get Quote]
Stocks of shipbuilding companies have been re-rated on the back of rising order book-to-sales to over seven times. The stock price of ABG Shipyard [Get Quote] has gone up 267 per cent, while Bharati Shipyard is up 107 per cent over the last one year.
The gain has been higher in the case of ABG Shipyard, thus stretching its valuation at 33 times its FY08 estimated earnings. Bharati Shipyard is still trading at a comfortable 18 times estimated FY08 EPS and 13 times FY09 EPS.
Also, its current order book of about Rs 4,639 crore (Rs 46.39 billion) (11 times its FY07 revenue) is strong enough for maintaining 50 per cent growth for the next three years.
Bharati is building a greenfield shipyard which will enable it to build six vessels up to 60,000 dwt (dead weight tonne) against 15,000 dwt currently by December 2008. This will enable Bharati to improve its execution speed and bid for more projects.
Besides, it is planning to invest Rs 2,000 crore (Rs 20 billion) along with Apeejay Shipping to set up a shipbuilding yard on the eastern coast, which will be commissioned in FY 2011. A relatively lower valuation and strong earnings visibility makes this stock an attractive investment.
Bhel
Today, the biggest constraint in the power sector is the supply of equipment, especially the critical power equipment required for the larger projects.
But, for Bhel, which commands about 65 per cent market share in the domestic power equipment industry, this provides long-term earnings visibility.
While competition is rising with new players like L&T and Chinese companies vying for a share, Bhel's order book of Rs 62,400 crore (Rs 624 billion), almost 3.6 times its FY07 revenues, instils confidence. The successful acquisition of orders for super critical boilers and high technology gas turbines required for the bigger projects would only improve its order book further.
Considering the huge order backlog and the orders in pipeline, Bhel is expanding its capacities by 67 per cent to 10,000 mw by January 2008, which will further increase to 15,000 mw by December 2009.
Bhel is also expanding its forging and casting capacities and a new fabrication plant to help reduce its dependence on imports. These should also help lower costs in the years to come. Overall, a better industry outlook, strong order book and expansion of existing capacities will drive the stock from the current levels.
Bharti Airtel [Get Quote]
With a mobile subscriber base of 51 million, Bharti Airtel is India's largest mobile service provider. While it has added an average of 2 million subscribers a month in Q2, it is expected to crack the 100 million subscriber mark by FY10.
While the company has experienced good growth, its ARPU has fallen by 10 per cent over the last three quarters, much ahead of the 4 per cent decline experienced by Reliance Communications [Get Quote]. Even then, operating margins have improved, on the back of higher margin in broadband business and cost reduction.
Going forward, increase in scale of operations will keep costs in check. Capital and operating expenditure is also likely to come down after the formation of Indus, a tower infrastructure company, which will manage the tower infrastructure of Bharti, Vodafone and Idea.
A trigger for the stock could be the listing of Bharti Infratel, the tower division and which holds 42 per cent in Indus. Bharti Infratel already has 20,000 towers and plans to set up more.
RCOM will be the biggest threat for the company if it manages to soon roll out its GSM services across 15 circles. Additionally, any unfavourable outcome over the spectrum issue will have its impact; it could lead to increased investments in upgradation of existing equipment.
To conclude, Bharti's revenues should grow by 35 per cent in the next two years on the back of subscriber expansion, start of Sri Lankan operations by March 2008, and launch of IPTV and DTH. A sum-of-parts valuation puts the per share value of Bharti at Rs 1,200, a 27 per cent upside from the current levels.
Blue Star [Get Quote]
The central air conditioning major, Blue Star, is a key beneficiary of the economic boom in the country across sectors like IT/ITES, retail and telecom.
This is reflected in the strong CAGR of 32 per cent and 40 per cent in sales and operating profit respectively in the past three years.
Notably, such strong growth traction is expected to continue as the company is sitting on a strong order book position, which is at Rs 1,030 crore (Rs 10.30 billion) as on September 2007. It is likely to get repeat orders from its existing customers as they expand operations.
It is expanding its capacities by investing about Rs 60-70 crore (Rs 60-700 million), which will lead to economies of scale and rationalisation of costs leading to margin expansion. Its return on equity and return on capital employed, which were at 34 per cent and 26 per cent, respectively, in FY07, will only improve.
However, the full benefits will be reflected only from the next financial year. The macro factors too continue to be robust, with huge investments planned in all the above mentioned sectors.
Dishman [Get Quote] Pharmaceuticals
Dishman, a pharma outsourcing player, is moving up the value chain from being a commoditised chemicals supplier to a research partner for innovator companies.
Its acquisition of Swiss-based Carbogen-Amcis (CA), which offers drug development and commercialisation services, has helped it tap into the client base of CA that includes seven of the top ten US drug companies.
With three projects in phase-III development, and likely to hit commercial production in two years, CA's revenues are expected to grow 15 per cent annually to Rs 400 crore (Rs 4 billion) by December 2008.
Dishman caters to 50 per cent of Dutch pharma major Solvay Pharma's requirement of eposartan mesylate, an anti-hypertension medication. Its acquisition of Solvay's Vitamin-D business will boost revenues. Its foray into China to manufacture Quats, a catalyst, is also seen positively.
All these should help reduce Solvay's share of 25 per cent in Dishman's revenues going forward. With earnings expected to grow between 25-30 per cent in the next two years (Rs 12 in FY08, Rs 15 in FY09 and Rs 20 in FY10), the stock can deliver 28-30 per cent returns in one year.
Educomp Solutions [Get Quote]
Educomp, the market leader in Kindergarten-12 education products, is a successful niche player. It has made some smart acquisitions, entered new areas. and garnered a client base of almost 6,000 schools across India besides, a small presence in Singapore and the US. Its first mover advantage makes it difficult for competition to catch up anytime soon.
Besides, the company has so far acquired and built the abilities to design and create content for schools, learning and school infrastructure management solutions, online teaching solutions, community building solutions and more recently into setting up its own schools.
Financially, Educomp's top line has almost doubled every year and operating margins have been maintained above 50 per cent.
Considering the growth potential in the Indian education industry, Educomp is likely to keep its juggernaut rolling for the coming few years. In FY09, Educomp will double its top line again and grow its earnings by 75 per cent. Although there has been a concern over valuations, the consistent earnings growth justify the same.
HDFC
HDFC is an ideal play on the gamut of financial services. Besides market dominance in housing finance, it provides huge potential for value unlocking from its investment in banking, insurance and mutual fund subsidiaries.
The proposed UTI Mutual Fund IPO, stake sale by Reliance Capital [Get Quote] in its mutual fund entity and the probability of listing of insurance companies though in the long term, should provide triggers. Moreover, there is a possibility of a merger with HDFC Bank.
Its core business--housing finance will continue to do well. Its loan book is expected to witness a CAGR of 25 per cent over the next two years. Its net interest margins are expected to remain stable at around 3 per cent.
And, HDFC is known for its asset quality. HDFC's stock trades at about 5 times FY09 estimated book value (adjusted for the value of its subsidiaries, which is about 30 per cent of HDFC's market capitalisation), and is a worthy pick.
India Infoline [Get Quote]
India Infoline is another company representing financial services, except the lending business.
Its stock price has grown more than fourfold in the last one year amid many positive triggers like capital raising for expansions, tie-up with strategic investors for investments in subsidiaries and restructuring of its various businesses.
Besides equity broking, it has expanded its product basket to include institutional equities broking, commodities broking, margin finance, investment banking and, distribution of life insurance, mutual fund and loans products.
It is investing towards building a strong distribution network (596 branches in 345 cities) and customer base (5 lakh clients) for its various services. Accordingly, the share of its traditional broking business of about 56 per cent in FY07 revenues is expected to come down over the years.
The stock trades at 51 times and 44 times estimated earnings for FY08 and FY09, respectively. While it looks cheaper than Edelweiss, in terms of market capitalisation to revenues, it trades at a higher P/E than Indiabulls [Get Quote].
However, it has the most de-risked business model compared to other players. Given India Infoline's aggressive growth strategy, the stock is ideal for long term investors.
Jain Irrigation
Jain Irrigation, which is in the businesses of micro irrigation systems, food processing and plastic pipes and sheets, is a direct play on the growing emphasis on agriculture. Irrigation systems account for 30 per cent of its revenue. It's revenues from micro irrigation have grown at 70 per cent annually.
Growth will be maintained on the back of its plans to launch new irrigation systems, higher replacement demand, focus on geographical diversification.
Jain's five overseas acquisitions, including a 50 per cent stake in NaanDan of Israel, the world's fifth largest micro-irrigation company, will help in terms of access to technology and access to large markets such as South Africa, US, and Europe.
In food processing, which accounts for 14 per cent of total income and grew by 74 per cent in FY07, Jain produces juices and dehydrated vegetables for companies like Coco Cola, Nestle [Get Quote], etc. This business to grow at healthy from hereon.
In plastic pipes and sheets, its products find application in agriculture (30 per cent market share) and telecom (70% share) among others and, should continue to grow at a healthy pace.
To sum up, Jain is operating in high growth areas, while exports too are expected to grow rapidly, which makes it a good investment case.
Jindal Saw [Get Quote]
Jindal Saw, the most diversified Indian pipe manufacturer, makes submerged arc welded (Saw), seamless and ductile iron spun pipes, which are used in diverse applications like oil & gas and water-based infrastructure.
The company is expanding its capacities in phases which will bring economies of scale-- longitudinal Saw pipes (by 25 per cent), helical Saw pipes (233 per cent) and seamless pipes (150 per cent) -- by FY09. These expansions are well-timed due to strong demand for pipes on account of surging demand for oil and gas globally.
Over the next three-four years, global demand (including India), for Saw pipes is estimated at 200,000 km involving an investment of $60 billion.
Jindal Saw is likely to gain due to restructuring of the investment holdings in Jindal Group companies, wherein it has substantial investments in Nalwa Sons, Jindal Stainless [Get Quote], JSW Steel [Get Quote] and Jindal Steel & Power, are worth about Rs 2,200 crore (Rs 22 billion). Excluding the value of investments, the stock trades at 9 times its FY09 estimated earnings, which is attractive as compared with 17 times for Welspun Gujarat.
Larsen & Toubro
Reinventing itself and successfully developing new businesses are among L&T's key strengths. That, along with the domestic infrastructure and global hydrocarbon investments, is responsible for the rising revenues and order book. It is now targeting a turnover of Rs 30,000 crore (Rs 300 billion) by FY10 as compared with Rs 18,363 crore (Rs 183.63 billion) in FY07.
Going forward, there is more business to come, as the government has estimated an infrastructure investment of $500 billion during the Eleventh Five Year Plan. Besides, a lot of money will also be spent by domestic players in the metal, oil and gas, power and other industries.
Little wonder, L&T's order book has been rising. As of September 2007, the engineering and construction division had an order book of Rs 42,000 crore (Rs 420 billion).
Going forward, L&T is also focusing on the overseas markets and has targeted exports to increase to 25 per cent of 2010 sales. It is entering shipbuilding, railway locomotives, power generation and power equipment as well.
While all these investments in different businesses will help sustain future growth, the medium term continues to be robust. Some of it is already rubbing off positively on the share price. Although the stock seems richly valued, it can fetch good returns.
Maruti [Get Quote] Suzuki
On the back of a sound foundation of existing products (13 models priced between Rs 2 lakh and Rs 15 lakh), strong distribution, efficient service network and new product launches, Maruti Suzuki will maintain its dominant position.
The company has 52 per cent market share by volume of the Indian car market and 62.5 per cent of the small car segment, which is commendable given the stiff competition from global majors.
Maruti grew at a scorching 18 per cent, compared with the 13 per cent recorded by passenger car market in H1 FY08. For eight months ended November 2007, sales volume was up 19.7 per cent to 500,108 vehicles led by 49 per cent growth in exports. Notably, exports are expected to grow 40 per cent annually for the next two years; its share in total sales is likely to move up to 12 per cent in 2010 from 7 per cent in FY07.
Maruti is already augmenting capacities by 3 lakh in a phased manner by FY10 to a million units. Besides, it has lined up Splash (A2 segment) and the concept car A-Star (A1 segment), while a Swift sedan is on the cards. These will help earnings grow by 20 per cent annually in the next two years. Aggressive pricing, enhanced margins on the back of improved product mix, indigenisation and scale benefits, will help Maruti do well.
ONGC [Get Quote]
Oil exploration companies are set to benefit from the current high oil prices and firm outlook. India's largest oil exploration company, ONGC is the best bet in this space. ONGC with interest in 85 domestic blocks including 52 offshore fields, has made 28 discoveries in the past two years, of which, 14 were made in FY08 itself.
Further, its 100 per cent subsidiary, ONGC Videsh has stakes in 26 blocks across 15 countries and is expected to be the key growth driver with its share in ONGC's consolidated revenues and profits expected to rise to 20 per cent (14 per cent now) and 14 per cent (9 per cent now), respectively.
ONGC's substantial interests in MRPL, Petronet LNG [Get Quote], GAIL and Indian Oil Corporation [Get Quote] are the topping. Moreover, the IPO of Oil India in the next few months could provide further triggers.
What also makes ONGC attractive is that it is the cheapest among its Asian peers trading at 10.1 times estimated FY09 earnings and enterprise value per barrel oil equivalent of about 7.5 times for FY09.
Going ahead, exploration successes especially in the KG basin and favourable announcement on various issues like sharing of subsidy burden, cess and deregulation in gas prices will be big positives.
Patel Engineering [Get Quote]
Patel Engineering, which is having an order book of Rs 5,400 crore (Rs 54 billion) almost 4.8 times its FY07 revenues, would be the key beneficiary of the boom in the construction, power and real estate sectors.
Within power sector, the 11th Five Year Plan has an outlay of Rs 70,000 crore (Rs 700 billion), adding another 18,000 mw in hydropower generation. Patel Engineering has 22 per cent market share in the domestic hydropower construction, which accounts for 60 per cent of its current order book.
Also, the company has pre-qualified for new projects worth over Rs 6,000 crore (Rs 60 billion) as on September 30, 2007.
Besides, its entry into own power generation setting up of 1,200 mw thermal power plant at an investment of Rs 5,000 crore (Rs 50 billion) are positive triggers. Meanwhile, its core businesses including construction of dams, transportation and micro-tunneling are growing at a faster pace thus providing sustainable earnings growth.
The immediate trigger would come from its real estate business. Patel Engineering has transferred a land bank of about 1,000 acres spread across Bangalore, Chennai, Hyderabad and Mumbai to Patel Realty India, a 100 per cent subsidiary.
According to estimates, the real estate business is valued between Rs 500-520 per share. All of these make Patel Engineering an attractive investment.
Reliance Communications
Reliance Communications (RCOM) has a mobile telephony market share of 18 per cent and subscriber base of 38 million, which is rising by a million every month. And this should continue to rise as RCOM penetrates into smaller towns.
What's more interesting is that despite concerns over declining, operating margins have improved to 42.2 per cent in Q2 FY08, thanks to the benefits of larger scale.
This is expected to improve further if RCOM gets the go-ahead to operate an additional 15 GSM circles as 65 per cent of passive infrastructure such as telecom towers, is common to both GSM and CDMA technologies and the investments in its existing networks will be incremental.
Additionally, it is the value unlocking in its subsidiaries that are likely to provide further triggers.
In 2008, RCOM is likely to announce a stake sale and subsequently list its tower subsidiary, Reliance Telecom Infrastructure, list its submarine cable subsidiary, FLAG Telecom, hive off of its SEZ and BPO businesses and the launch IPTV and DTH services by the first quarter of 2008.
Analysts estimate that a conservative sum-of-parts valuation based on FY09 numbers for RCOM comes to Rs 850-Rs 900 per share, which indicates an appreciation of 17-24 per cent from current levels.
Reliance Industries [Get Quote]
In 2008, Reliance Industries' (RIL) exploration and production (E&P) division, which accounts for 50 per cent of its sum-of-parts valuation, will start selling gas from the KG Basin. The only ambiguous aspect here seems to be the pricing of gas and settlement with the ADA group and NTPC.
Within a few months, Reliance Petroleum [Get Quote] will also start operations, all of which should lead to a jump in RIL's profits.
Also, the bids for NELP VII will be awarded by July 2008. While further wins will add to reserves, new discoveries at existing reserves should further add to valuations and the possible de-merger of RIL's E&P division would unlock value.
While the company is yet to prove its mettle in its retail and SEZ initiatives, given its track record managing mammoth projects, one can hope to see positive results here as well.
Notably, analysts maintain their bullish outlook on the core businesses. Refining margins for RIL, already the best among global players, should remain firm until FY11, while petrochemical margins are expected to be stable with good growth in volumes. At a P/E of under 12 times FY09 estimated core earnings, RIL is a worthy investment.
State Bank of India
SBI's move to merge State Bank of Saurashtra with itself has the potential to trigger the re-rating of public sector banking stocks by pushing the much needed consolidation process.
To further expedite consolidation, the boards of SBI and its other six associate banks are meeting in January to consider merger. Should that happen, SBI's standalone balance sheet size will grow 1.5 times to Rs 8.20 lakh crore (Rs 8.20 trillion), almost double the size of ICICI Bank's.
Also, its branch network will jump 50 per cent to 14,400 branches. But, the improvement in valuations (re-rating) should get a boost when the merged entity is able to rationalise costs and extract benefits from the merger.
SBI will raise Rs 17,000 crore (Rs 170 billion) through a rights issue that should provide fuel for future growth. In a competitive Indian banking business, it is important for banks to achieve size and scale to be globally competitive.
And for investors, it is more important to find such banks at reasonable valuations. SBI meets both these criteria. SBI's stock trades at 2.2 times and 2 times its estimated consolidated book value for FY08 and FY09, respectively.
Further, SBI has investments in mutual fund and life insurance subsidiaries, which make valuations more compelling.
We can pay more tax only if...
Finance Minister P Chidambaram told reporters recently that Indians should pay their taxes if they wanted rates to be more moderate.
But here's the thing: most of middle class India are okay paying taxes at current rates. At 30-odd per cent at the margin plus the myriad offsets and exemption, the average Indian's tax burden is not all that punitive -- by one calculation, not more than 10 per cent of taxable income actually goes to the national exchequer.
The point is that more Indians would be happy to pay their taxes if they perceived a true cost-benefit relationship.
To extend the argument a bit more, most would never baulk at paying better service charges for a whole host of state services for the same reason.
Yet, this simple trade-off between government and its citizens is all but non-existent in India.
Given that the average tax-paying urban Indian routinely contends with power cuts, water shortages, bad roads, poor security and appalling public health services, it would be safe to say that the costs of paying taxes (in itself a traumatic experience if anyone has visited the income tax office) are far heavier than any benefits that may accrue from them.
In fact, the ironic fact about our post-nineties unabashedly capitalist Indian state is that it appears to have fulfilled a Marxian prediction, though not quite in the way he would have envisaged: it has all but withered away.
The bigger irony is that this withering away has contributed to the growing prosperity of a host of private sector services that have, with true entrepreneurial vision, cashed in on shortages to provide citizens with services for which they pay taxes or service charges to the state.
Here in the plush capital city of New Delhi, for instance, private water tankers have sprung up as a flourishing business. They have prospered by charging a premium simply because the local government is unable to provide adequate water supplies to its fast-growing citizenry that is nevertheless expected to pay water taxes.
In the fashionable suburb of Gurgaon with its well-heeled business and expat community, local rickshaw services and empty call centre SUVs are able to make a killing because of the absence of local state-provided transport.
Water supplies and local transport, however, are small and localised by their nature. But there are a whole host of businesses that have developed on a national scale -- they would qualify for the label of "organised sector" -- because of the absence or inadequacies of state services.
They range from the private hospitals business that charge exorbitant amounts to provide those who can afford it health services of often dubious quality to courier businesses that benefit from India's inefficient postal services to the private security business, an expensive alibi for the absence of efficient and honest public policing.
Note that all of these are businesses that are not only ranked among India's fastest growing, they've also attracted large amounts of foreign investment interest.
Consider the packaged water business, one of the earliest shortage-driven business opportunities. It is growing at a spanking pace of 40-50 per cent only because publicly provided potable water is non-existent in India.
This was the opportunity that Bisleri's shrewd promoter Ramesh Chauhan spotted well before anyone else � so much so that his brand has become a generic name for packaged water in India. Today, multinationals Coke and Pepsi vie for this space and even Evian from Danone is trying to build a premium niche in the business.
Five-star hotels are able to extract what can only be called a rent of ten times by charging the health-conscious more than Rs 100 for a Rs 10 one-litre bottle of partially sanitised drinking water.
The genset business is another early bird beneficiary of shortages, dating back to the eighties. Since then, it has "jus' growed", to paraphrase Topsy in Uncle Tom's Cabin.
What's more, it's not going to slow down anytime soon. A recent Frost and Sullivan report predicts that the industry will grow more than 15 per cent between 2007 and 2012 on the back of rapid economic growth and a demand-supply deficit in power.
The point about all these private services is that they are not necessarily optimal in either quality or the cost people pay for them. They flourish in the near-absence of alternatives.
A rich neighbour and small-time businessman once said he never paid income tax because he didn't "believe" in doing so. He's the kind of guy Chidambaram needs to focus on when he talks of better compliance.
For most others, it's not a question of what citizens can do for the country -- but what the country can do for them for payments it receives.
Rs 18,000,000,000,000 lost in 7 days
On Wednesday morning, the Indian stock market may have opened high on the back of a 0.75% rate cut by the US Fed, giving some respite to market players. But investors on Dalal Street have lost a whopping Rs 18.05 trillion in the last seven days of market mayhem that included a fall of more than 4,000 points in the benchmark 30-share Sensitive Index or Sensex.
The Bombay Stock Exchange, which opened on a weak note Tuesday morning, managed to rebound from the day's low but finally ended the day at 16,729.94, a fall of 875.41 points. On Wednesday it has risen smartly, with major index stocks ruling high.
However, on Tuesday, within minutes of the market opening, investors had lost over Rs 6 trillion. Trading was immediately suspended for an hour after the 30-share barometer hit the circuit limit of 10 per cent.
On Tuesday alone investors lost over Rs 6 trillion. Add to it the over Rs 12 trillion loss suffered by investors on Dalal Street in the last six days.
"Retail investors should stay away from markets for the next few days. If they intend to invest they should go for mutual funds. Investors with a long-term perspective should however go for a stock specific approach," R K Gupta, managing director, Taurus Asset Management Co said.
Markets Take a U -turn lets c some recovery
The broader markets moved into the negative territory during the previous two hours of trade as selling activity was witnessed at higher levels. While stocks from the engineering, power and steel sector are reeling under pressure, heavyweights from the banking, FMCG and auto sector are leading the pack of gainers. The overall market breadth is also negative with losers outnumbering gainers by a ratio of 1.7:1.
The BSE Sensex is trading at 17,560 (down 35 points) while the NSE Nifty is trading at 5,166 (down 37 points). The rupee is trading at 39.38 to the dollar.
Lakshmi Energy and Foods (LEAF) announced a topline growth of 36% YoY in 3QFY08, led by higher volume and higher average realisations. Lower raw material costs led to the expansion in the margins by 380 basis points. Further the company's by products also helped the growth. The bottomline grew by 17% YoY. The net profits grew at a slower rate than the topline due to higher interest, depreciation and tax costs. The stock is trading higher by 1%.
Shriram Transport Finance has reported a net profit reported 78.9% YoY growth in total income during the 3QFY08, while net profit grew by 94.8% YoY during the same period. The company has been able to maintain its cost of funds at 11% for the quarter. The total disbursement stood at Rs 35 bn during the period under review. After the preferential allotment of Rs 3.84 bn last month, the company's capital adequacy has improved to 20%. The demand for used commercial vehicles remained intact, while new medium and heavy vehicles reported poor off-take of. Despite all this the company was able to sustain a buoyant growth, given its niche presence in the rural areas and nearly monopolistic share of the organised pre-owned truck financing market. The stock, along with its peer Mahindra Finance is trading higher by 1%.
Sensex ends huge gain: realty, oil, metal stocks surge
Sensex ends huge gain: realty, oil, metal stocks surge
It was a good day for the investors after seven consecutive and relentless fall wherein the markets opened with huge gap up and proceeded to trade strong and stable for most part of the day. Sensex also recorded biggest single day gain of over 1200 points during later half of the day and finally shut shop with substantial gains.
Market breadth was impressive for most part of the day on both BSE and NSE, however the volume was relatively poor. Realty, power, metal, oil & gas and banking stocks were the most active counters during the todays trade and the midcaps were also in focus. Most of these indices were up nearly 10 for most part of the day.
Sensex shut shop today with a gain of 864.13 points or 5.17% at 17594.07, and the Nifty ended up 304.10 points or 6.21% at 5203.40. On BSE, about 1376 shares advanced, 1568 shares declined, and 39 shares remained unchanged. BSE midcap index also surged today and ended up 8.15% at 7789.31 and Smallcap closed with a gain of 3.96% at 10,425.34.
BSE auto space ended up 4.46% at 4675.33. Ashok Leyland, MRF, Apollo Tyres and Punjab Tractors were up. Top Sensex gainers were Satyam, BHEL, SBI, SBI, Reliance Industries.
BSE Bankex was up 5.64% at 10731.24. Union bank, Allahabad bank, Andhra bank and IOB were the top gainers in the banking domain.
BSE capital good index closed up 4.67% at 17221.13. Triveni Engineering, Praj Industries, Kirloskar Oil and Jyoti Structure were the leading gainers.
BSE FMCG index ended up 5.01% at 2100.34. Bata India, Marico, UB Group and Unites Spirits were the most gainers.
BSE pharma index shut shop with a gain of 4.35% at 3627.42. Panacea Biotech, Dishman Pharma and Glenmark Pharma led from the front in the pharma space.
BSE IT index was up 5.45% at 3631.37. Satyam, TCS, Financial Tech and Patni Computers were the top gainers from the IT space.
BSE metal index was up 6.85% at 15081. Hind Zinc, Sesa Goa, Maharasthra Seamless and Jindal Stainless were the top gainers.
BSE oil & gas index was up 8.73% at 10845.58. Essar Oil, RNRL, RPL and Petronet LNG were the top gainers.
BSE power index was up 9.81% at 3943.23. Torrent Power, Reliance Energy, Tata Power and NTPC were the top gainers.
BSE realty index was up 11.44% at 10609.67. Omaxe, Peninsual Land, Ansal Properties and mahindra Life led from the front.
Turnover Today: Turnover today was lower. Total turnover was at Rs 62430.55 cr. Turnover in the BSE cash segment was at Rs 7101.17 cr and NSE cash was at Rs 19255.52 cr and the NSE F&O segment it was at Rs 36073.86 cr.
Market Snapshot:
* 3rd biggest singel day point gain for Sensex ever
* Markets witness relief rally at the back of fed rate cut albeit low turnover
* Sensex ends up 864 pts at 17594; Nifty ends up 304 pts at 5203
* CNX Midcap up 7.5%; BSE Smallcap up 4.2%
* All sectoral indices up over 4%; All Sensex stocks end in green barring Bharti Airtel
* BSE Realty Index up 11.5%; DLF up 5.6%, Unitech up 12.4%
* BSE Oil & Gas up 9%; RPL up 15%, Gail up 9.4%, Reliance up 8.2%, HPCL up 5.1%, ONGC up 3.4%
* BSE Metals Index up 7.1%; SAIL up 12.7%, Hindalco up 7.4%, Tata Steel up 4.2%
* BSE Bank Index up 7%; PNB up 11.6%, SBI up 8.7%, HDFC Bank up 7.6%
* Power Stocks: REL up 20.3%, Tata Power up 16.2%, NTPC up 13%, Suzlon up 7.9%
* Other Index Gainers: Satyam up 11.2%, TCS up 9.2%, Bajaj Auto up 7.8%, BHEL up 7.6%
* NSE Advance Decline is 2:1
* Total Turnover at Rs 62,430 Cr
FNO SNAPSHOT
F&O space sees low turnover:
Unwinding in stock futures at higher levels after double digit run ups seen
Increased margin keeps turnover subdued
Nifty witnesses high intraday activity
Swings between premium and discount
Selective Stocks see long buildup
Fresh Longs:
Misc: IDFC, ICICI Bank, , Ambuja Cem, S Kumars, IFCI,
Large Caps: Reliance, L&T, ITC, Suzlon Energy, HDFC Bank, SAIL
Unwinding at Higher Levels:
Momentum Stocks: RNRL, RPL, IDBI, Ispat, Ashok Ley, TTML, IFCI, Arvind Mills, JP Assocites, MRPL, Hotel Leela, JP Hydro, Oswal Chem, Balrampur Chini
Power: Power Grid, NTPC, Neyveli Lignite
Sugar: Bajaj Hind, Balrampur Chini
Banks: Dena Bank, Vijaya Bank
Mkt trading near day's high: Biggest ever gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1200 points and Nifty is up nearly 400 points. It has been biggest ever intra day gains for Sensex. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains. Europe has opened with a fair amount of strength.
At 2:00 pm, the Sensex is up 1,258.59 points or 7.52% at 17988.53, and the Nifty up 412.10 points or 8.41% at 5311.40. About 1401 shares have advanced, 1535 shares declined, and 46 shares are unchanged.
CNX Midcap is up 9% and Smallcap index is up over 5%. BSE Realty index is up 15%, Unitech is up 16.5% and DLF is up 11.5%. NSE Advance:Decline is at 5:2
Top gainers on the Sensex are HDFC Bank, Bajaj Auto and Hindalco up 9%. NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top loser on the Sensex are Wipro down 1.4%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5% gains.
Mkt trading near day's high: Biggest ever intra day gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1000 points and Nifty is up 350 points. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 1.06 hrs IST, the Sensex is up 1017 points at 17745, and the Nifty up 334.25 points or 6.82% at 5233.55.
About 1175 shares have advanced, 1760 shares declined, and 47 shares are unchanged.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; small caps under pressure
The markets have once again picked up some momentum but are still off early highs. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 12:00, the Sensex is up 584.09 points or 3.49% at 17314.03, and the Nifty up 192.90 points or 3.94% at 5092.20. About 1151 shares have advanced, 1779 shares declined, and 52 shares are unchanged.
Market breadth have been impressive so far with over 700 stocks on the advancing side and nearly 400 stocks on the decline side on NSE. However, turnover has been some concern today. Rupee was quoting at 39.36 against USD.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; metal, oil stocks up
The markets bounced back smartly in the opening trade today after seven consecutive fall and are trading strong but off day's high. Huge buying has been taking place across the sectors led by the realty, banking, metal and oil & gas. All the Sensex stocks are in green with substantial gains. Midcap space is also very strong and the market breadth has been very impressive so far with very good volume so far.
At 10.55 am, the Sensex is up 347.00 points or 2.07% at 17076.94, and the Nifty up 150.75 points or 3.08% at 5050.05. About 1046 shares have advanced, 1875 shares declined, and 61 shares are unchanged.
Top gainers on the Nifty are Reliance Energy at Rs 1,785 up 8.27%, Unitech at Rs 378 up 7.82% and Reliance Comm at Rs 618 up 7.44%.
Top losers on the Nifty are NALCO at Rs 410 down 4.33%, Wipro at Rs 417.50 down 3.35% and Sun Pharma at Rs 940.50 down 2.94%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts open with huge gap up; Sensex jumps over 900 pts
The markets have bounced back smartly in the opening trade with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.
At 9:56 am Sensex was up 907 points at 17437 and Nifty jumped 196 points at 5096. Major gainers in the opening move were Infosys, ICICI bank, BHEL, ONGC, Rel Comm, NTPC, Rel Energy, Reliance.
Asian markets were trading higher. Hong Kong's Hang Seng surged 7.28% or 1584.55 points at 23,342.18. Japan's Nikkei gained 3.35% or 421.27 points at 12,994.32. Singapore's Straits Times advanced 2.97% or 85.27 points at 2,951.82. South Korea's Seoul Composite shot up 1.74% or 28 points at 1,637.02. However, Taiwan's Taiwan Weighted was down 0.17% or 12.91 points at 7,569.05.
US markets: Dow Jones was down 1.05% or 127.62 points at 11971.68. The Standard & Poor's 500 index slipped 14.69 points, or 1.11%, to 1,310.50, while the Nasdaq composite index plunged 47.75 points, or 2.04%, to 2,292.27.
Market cues:
* FIIs net sell USD 601.3 million in equity
* MFs net buy Rs 1,998 crore in equity
* NSE F&O Open Interest down by Rs 21,005 crore at Rs 89,100 crore
* Relief rally in Asia; US ends sharply off-lows
It was a good day for the investors after seven consecutive and relentless fall wherein the markets opened with huge gap up and proceeded to trade strong and stable for most part of the day. Sensex also recorded biggest single day gain of over 1200 points during later half of the day and finally shut shop with substantial gains.
Market breadth was impressive for most part of the day on both BSE and NSE, however the volume was relatively poor. Realty, power, metal, oil & gas and banking stocks were the most active counters during the todays trade and the midcaps were also in focus. Most of these indices were up nearly 10 for most part of the day.
Sensex shut shop today with a gain of 864.13 points or 5.17% at 17594.07, and the Nifty ended up 304.10 points or 6.21% at 5203.40. On BSE, about 1376 shares advanced, 1568 shares declined, and 39 shares remained unchanged. BSE midcap index also surged today and ended up 8.15% at 7789.31 and Smallcap closed with a gain of 3.96% at 10,425.34.
BSE auto space ended up 4.46% at 4675.33. Ashok Leyland, MRF, Apollo Tyres and Punjab Tractors were up. Top Sensex gainers were Satyam, BHEL, SBI, SBI, Reliance Industries.
BSE Bankex was up 5.64% at 10731.24. Union bank, Allahabad bank, Andhra bank and IOB were the top gainers in the banking domain.
BSE capital good index closed up 4.67% at 17221.13. Triveni Engineering, Praj Industries, Kirloskar Oil and Jyoti Structure were the leading gainers.
BSE FMCG index ended up 5.01% at 2100.34. Bata India, Marico, UB Group and Unites Spirits were the most gainers.
BSE pharma index shut shop with a gain of 4.35% at 3627.42. Panacea Biotech, Dishman Pharma and Glenmark Pharma led from the front in the pharma space.
BSE IT index was up 5.45% at 3631.37. Satyam, TCS, Financial Tech and Patni Computers were the top gainers from the IT space.
BSE metal index was up 6.85% at 15081. Hind Zinc, Sesa Goa, Maharasthra Seamless and Jindal Stainless were the top gainers.
BSE oil & gas index was up 8.73% at 10845.58. Essar Oil, RNRL, RPL and Petronet LNG were the top gainers.
BSE power index was up 9.81% at 3943.23. Torrent Power, Reliance Energy, Tata Power and NTPC were the top gainers.
BSE realty index was up 11.44% at 10609.67. Omaxe, Peninsual Land, Ansal Properties and mahindra Life led from the front.
Turnover Today: Turnover today was lower. Total turnover was at Rs 62430.55 cr. Turnover in the BSE cash segment was at Rs 7101.17 cr and NSE cash was at Rs 19255.52 cr and the NSE F&O segment it was at Rs 36073.86 cr.
Market Snapshot:
* 3rd biggest singel day point gain for Sensex ever
* Markets witness relief rally at the back of fed rate cut albeit low turnover
* Sensex ends up 864 pts at 17594; Nifty ends up 304 pts at 5203
* CNX Midcap up 7.5%; BSE Smallcap up 4.2%
* All sectoral indices up over 4%; All Sensex stocks end in green barring Bharti Airtel
* BSE Realty Index up 11.5%; DLF up 5.6%, Unitech up 12.4%
* BSE Oil & Gas up 9%; RPL up 15%, Gail up 9.4%, Reliance up 8.2%, HPCL up 5.1%, ONGC up 3.4%
* BSE Metals Index up 7.1%; SAIL up 12.7%, Hindalco up 7.4%, Tata Steel up 4.2%
* BSE Bank Index up 7%; PNB up 11.6%, SBI up 8.7%, HDFC Bank up 7.6%
* Power Stocks: REL up 20.3%, Tata Power up 16.2%, NTPC up 13%, Suzlon up 7.9%
* Other Index Gainers: Satyam up 11.2%, TCS up 9.2%, Bajaj Auto up 7.8%, BHEL up 7.6%
* NSE Advance Decline is 2:1
* Total Turnover at Rs 62,430 Cr
FNO SNAPSHOT
F&O space sees low turnover:
Unwinding in stock futures at higher levels after double digit run ups seen
Increased margin keeps turnover subdued
Nifty witnesses high intraday activity
Swings between premium and discount
Selective Stocks see long buildup
Fresh Longs:
Misc: IDFC, ICICI Bank, , Ambuja Cem, S Kumars, IFCI,
Large Caps: Reliance, L&T, ITC, Suzlon Energy, HDFC Bank, SAIL
Unwinding at Higher Levels:
Momentum Stocks: RNRL, RPL, IDBI, Ispat, Ashok Ley, TTML, IFCI, Arvind Mills, JP Assocites, MRPL, Hotel Leela, JP Hydro, Oswal Chem, Balrampur Chini
Power: Power Grid, NTPC, Neyveli Lignite
Sugar: Bajaj Hind, Balrampur Chini
Banks: Dena Bank, Vijaya Bank
Mkt trading near day's high: Biggest ever gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1200 points and Nifty is up nearly 400 points. It has been biggest ever intra day gains for Sensex. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains. Europe has opened with a fair amount of strength.
At 2:00 pm, the Sensex is up 1,258.59 points or 7.52% at 17988.53, and the Nifty up 412.10 points or 8.41% at 5311.40. About 1401 shares have advanced, 1535 shares declined, and 46 shares are unchanged.
CNX Midcap is up 9% and Smallcap index is up over 5%. BSE Realty index is up 15%, Unitech is up 16.5% and DLF is up 11.5%. NSE Advance:Decline is at 5:2
Top gainers on the Sensex are HDFC Bank, Bajaj Auto and Hindalco up 9%. NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top loser on the Sensex are Wipro down 1.4%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5% gains.
Mkt trading near day's high: Biggest ever intra day gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1000 points and Nifty is up 350 points. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 1.06 hrs IST, the Sensex is up 1017 points at 17745, and the Nifty up 334.25 points or 6.82% at 5233.55.
About 1175 shares have advanced, 1760 shares declined, and 47 shares are unchanged.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; small caps under pressure
The markets have once again picked up some momentum but are still off early highs. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 12:00, the Sensex is up 584.09 points or 3.49% at 17314.03, and the Nifty up 192.90 points or 3.94% at 5092.20. About 1151 shares have advanced, 1779 shares declined, and 52 shares are unchanged.
Market breadth have been impressive so far with over 700 stocks on the advancing side and nearly 400 stocks on the decline side on NSE. However, turnover has been some concern today. Rupee was quoting at 39.36 against USD.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; metal, oil stocks up
The markets bounced back smartly in the opening trade today after seven consecutive fall and are trading strong but off day's high. Huge buying has been taking place across the sectors led by the realty, banking, metal and oil & gas. All the Sensex stocks are in green with substantial gains. Midcap space is also very strong and the market breadth has been very impressive so far with very good volume so far.
At 10.55 am, the Sensex is up 347.00 points or 2.07% at 17076.94, and the Nifty up 150.75 points or 3.08% at 5050.05. About 1046 shares have advanced, 1875 shares declined, and 61 shares are unchanged.
Top gainers on the Nifty are Reliance Energy at Rs 1,785 up 8.27%, Unitech at Rs 378 up 7.82% and Reliance Comm at Rs 618 up 7.44%.
Top losers on the Nifty are NALCO at Rs 410 down 4.33%, Wipro at Rs 417.50 down 3.35% and Sun Pharma at Rs 940.50 down 2.94%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts open with huge gap up; Sensex jumps over 900 pts
The markets have bounced back smartly in the opening trade with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.
At 9:56 am Sensex was up 907 points at 17437 and Nifty jumped 196 points at 5096. Major gainers in the opening move were Infosys, ICICI bank, BHEL, ONGC, Rel Comm, NTPC, Rel Energy, Reliance.
Asian markets were trading higher. Hong Kong's Hang Seng surged 7.28% or 1584.55 points at 23,342.18. Japan's Nikkei gained 3.35% or 421.27 points at 12,994.32. Singapore's Straits Times advanced 2.97% or 85.27 points at 2,951.82. South Korea's Seoul Composite shot up 1.74% or 28 points at 1,637.02. However, Taiwan's Taiwan Weighted was down 0.17% or 12.91 points at 7,569.05.
US markets: Dow Jones was down 1.05% or 127.62 points at 11971.68. The Standard & Poor's 500 index slipped 14.69 points, or 1.11%, to 1,310.50, while the Nasdaq composite index plunged 47.75 points, or 2.04%, to 2,292.27.
Market cues:
* FIIs net sell USD 601.3 million in equity
* MFs net buy Rs 1,998 crore in equity
* NSE F&O Open Interest down by Rs 21,005 crore at Rs 89,100 crore
* Relief rally in Asia; US ends sharply off-lows
Wednesday, January 23, 2008
Five reasons for a market rally
The recent declines have knocked the wind out of many a traders sails. While it may appear that the end of the world is here, I present my contrarian views -
1) The open interest in the market has shrunk to Rs 91,070 crore as on Tuesday evening, as compared to nearly Rs 1,35,000 crore barely 10 days. The weaker hands are all but out of the game. While the process of elimination has been brutal, markets like chains, are as strong as the weakest links of the chain. Qualitatively speaking, the surviving players are much more stronger than the erstwhile bulls
2) The put-call ratio gives a fairly accurate picture of the market outlook as patient players tend to take a medium term outlook through the options route. Currently, the marketwide PCR is at 0.20 : 1, the Nifty PCR is at the 0.95 : 1. The Nifty PCR was nearing the 1.40 : 1 barely a fortnight ago.
These are indications that the bears do not see significant downsides from here. It is a proven fact that the bears are more savvy than the bulls and are bigger risk takers. If their risk appetite is shrinking, the bulls should step on the gas logically.
3) The implied volatility is at 116 per cent annualised, and that indicates a market that has moved out of whack. Implied vols are a measure like a leash around a dog’s neck.
The length of the leash determines how far the pet strays from the owner. At 116 per cent, the implied volatility is way too high to sustain the momentum on the declines. An upmove is in the offing.
4) The Fed rate cut will be a positive trigger for the market sentiments. While it may not reverse the bearish trend completely, the decline will be halted. Markets rally on cheaper money and end of long drawn wars. This fact is established by market historians.
5) Technically speaking the 4800 level is a multiple support as per many schools of thought. The level is close to the 200 day SMA and is also a retracement support as per Fibonacci studies. Having remained above this threshold on a closing basis, the bulls have proved their willingness and ability to defend this threshold.
As per oscillator studies, the markets are in an oversold zone and ready to leap higher provided a slight buying support is witnessed.
1) The open interest in the market has shrunk to Rs 91,070 crore as on Tuesday evening, as compared to nearly Rs 1,35,000 crore barely 10 days. The weaker hands are all but out of the game. While the process of elimination has been brutal, markets like chains, are as strong as the weakest links of the chain. Qualitatively speaking, the surviving players are much more stronger than the erstwhile bulls
2) The put-call ratio gives a fairly accurate picture of the market outlook as patient players tend to take a medium term outlook through the options route. Currently, the marketwide PCR is at 0.20 : 1, the Nifty PCR is at the 0.95 : 1. The Nifty PCR was nearing the 1.40 : 1 barely a fortnight ago.
These are indications that the bears do not see significant downsides from here. It is a proven fact that the bears are more savvy than the bulls and are bigger risk takers. If their risk appetite is shrinking, the bulls should step on the gas logically.
3) The implied volatility is at 116 per cent annualised, and that indicates a market that has moved out of whack. Implied vols are a measure like a leash around a dog’s neck.
The length of the leash determines how far the pet strays from the owner. At 116 per cent, the implied volatility is way too high to sustain the momentum on the declines. An upmove is in the offing.
4) The Fed rate cut will be a positive trigger for the market sentiments. While it may not reverse the bearish trend completely, the decline will be halted. Markets rally on cheaper money and end of long drawn wars. This fact is established by market historians.
5) Technically speaking the 4800 level is a multiple support as per many schools of thought. The level is close to the 200 day SMA and is also a retracement support as per Fibonacci studies. Having remained above this threshold on a closing basis, the bulls have proved their willingness and ability to defend this threshold.
As per oscillator studies, the markets are in an oversold zone and ready to leap higher provided a slight buying support is witnessed.
Mkts bounce back: What are experts suggesting?
After two days of mayhem at the markets, there has been some attempt of a smart bounceback today. The markets opened the trade today with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.
PN Vijay, Portfolio Manager, said, "Over the next week or two, I definitely expect some buying to emerge. In the last two days, there has been a severe cutting of positions by brokers and banks on clients who do not come up with the margins. In the last two days markets have been driven by the market internals and my sense is that between today and tomorrow heavy FII selling should get slowly eased out as liquidity comes to these intermediaries. Going forward, the market is a screaming buy at this stage for retail investors. There is a World Bank report, which said that India among the large countries is the least dependent on the US for its economic growth. So the retail investor should just forget what the foreigners are saying and just keep picking up good stocks."
Manish Chokhani, MD of Enam Financial Consultant, said, "We remain in a bull market; we remain in a corrective phase in a bull market and like we have spoken in the past, one would have had three sources of potential supply to the market; one was the prop books, IPO and the leverage positions and all three have coincided fabulously in January to give what I think is a great buying opportunity to investors."
However, FIIs are not very optimistic. Adrian Mowat of JP Morgan thinks that market volatility will fall and people's confidence will reassert itself. The markets this morning are quite encouraging, rather than aggressive. He said, "I think India will still see net foreign selling; the market had two sharp days of fall, but it generally has been outperforming in the last three months than other emerging markets. It continues to have quite a substantial valuation premium, so I would expect India to underperform and therefore for foreigners to be net sellers."
PN Vijay, Portfolio Manager, said, "Over the next week or two, I definitely expect some buying to emerge. In the last two days, there has been a severe cutting of positions by brokers and banks on clients who do not come up with the margins. In the last two days markets have been driven by the market internals and my sense is that between today and tomorrow heavy FII selling should get slowly eased out as liquidity comes to these intermediaries. Going forward, the market is a screaming buy at this stage for retail investors. There is a World Bank report, which said that India among the large countries is the least dependent on the US for its economic growth. So the retail investor should just forget what the foreigners are saying and just keep picking up good stocks."
Manish Chokhani, MD of Enam Financial Consultant, said, "We remain in a bull market; we remain in a corrective phase in a bull market and like we have spoken in the past, one would have had three sources of potential supply to the market; one was the prop books, IPO and the leverage positions and all three have coincided fabulously in January to give what I think is a great buying opportunity to investors."
However, FIIs are not very optimistic. Adrian Mowat of JP Morgan thinks that market volatility will fall and people's confidence will reassert itself. The markets this morning are quite encouraging, rather than aggressive. He said, "I think India will still see net foreign selling; the market had two sharp days of fall, but it generally has been outperforming in the last three months than other emerging markets. It continues to have quite a substantial valuation premium, so I would expect India to underperform and therefore for foreigners to be net sellers."
Mkt trading near day's high: Biggest ever gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1200 points and Nifty is up nearly 400 points. It has been biggest ever intra day gains for Sensex. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains. Europe has opened with a fair amount of strength.
At 2:00 pm, the Sensex is up 1,258.59 points or 7.52% at 17988.53, and the Nifty up 412.10 points or 8.41% at 5311.40. About 1401 shares have advanced, 1535 shares declined, and 46 shares are unchanged.
CNX Midcap is up 9% and Smallcap index is up over 5%. BSE Realty index is up 15%, Unitech is up 16.5% and DLF is up 11.5%. NSE Advance:Decline is at 5:2
Top gainers on the Sensex are HDFC Bank, Bajaj Auto and Hindalco up 9%. NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top loser on the Sensex are Wipro down 1.4%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5% gains.
Mkt trading near day's high: Biggest ever intra day gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1000 points and Nifty is up 350 points. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 1.06 hrs IST, the Sensex is up 1017 points at 17745, and the Nifty up 334.25 points or 6.82% at 5233.55.
About 1175 shares have advanced, 1760 shares declined, and 47 shares are unchanged.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; small caps under pressure
The markets have once again picked up some momentum but are still off early highs. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 12:00, the Sensex is up 584.09 points or 3.49% at 17314.03, and the Nifty up 192.90 points or 3.94% at 5092.20. About 1151 shares have advanced, 1779 shares declined, and 52 shares are unchanged.
Market breadth have been impressive so far with over 700 stocks on the advancing side and nearly 400 stocks on the decline side on NSE. However, turnover has been some concern today. Rupee was quoting at 39.36 against USD.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; metal, oil stocks up
The markets bounced back smartly in the opening trade today after seven consecutive fall and are trading strong but off day's high. Huge buying has been taking place across the sectors led by the realty, banking, metal and oil & gas. All the Sensex stocks are in green with substantial gains. Midcap space is also very strong and the market breadth has been very impressive so far with very good volume so far.
At 10.55 am, the Sensex is up 347.00 points or 2.07% at 17076.94, and the Nifty up 150.75 points or 3.08% at 5050.05. About 1046 shares have advanced, 1875 shares declined, and 61 shares are unchanged.
Top gainers on the Nifty are Reliance Energy at Rs 1,785 up 8.27%, Unitech at Rs 378 up 7.82% and Reliance Comm at Rs 618 up 7.44%.
Top losers on the Nifty are NALCO at Rs 410 down 4.33%, Wipro at Rs 417.50 down 3.35% and Sun Pharma at Rs 940.50 down 2.94%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts open with huge gap up; Sensex jumps over 900 pts
The markets have bounced back smartly in the opening trade with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.
At 9:56 am Sensex was up 907 points at 17437 and Nifty jumped 196 points at 5096. Major gainers in the opening move were Infosys, ICICI bank, BHEL, ONGC, Rel Comm, NTPC, Rel Energy, Reliance.
Asian markets were trading higher. Hong Kong's Hang Seng surged 7.28% or 1584.55 points at 23,342.18. Japan's Nikkei gained 3.35% or 421.27 points at 12,994.32. Singapore's Straits Times advanced 2.97% or 85.27 points at 2,951.82. South Korea's Seoul Composite shot up 1.74% or 28 points at 1,637.02. However, Taiwan's Taiwan Weighted was down 0.17% or 12.91 points at 7,569.05.
US markets: Dow Jones was down 1.05% or 127.62 points at 11971.68. The Standard & Poor's 500 index slipped 14.69 points, or 1.11%, to 1,310.50, while the Nasdaq composite index plunged 47.75 points, or 2.04%, to 2,292.27.
Market cues:
* FIIs net sell USD 601.3 million in equity
* MFs net buy Rs 1,998 crore in equity
* NSE F&O Open Interest down by Rs 21,005 crore at Rs 89,100 crore
* Relief rally in Asia; US ends sharply off-lows
At 2:00 pm, the Sensex is up 1,258.59 points or 7.52% at 17988.53, and the Nifty up 412.10 points or 8.41% at 5311.40. About 1401 shares have advanced, 1535 shares declined, and 46 shares are unchanged.
CNX Midcap is up 9% and Smallcap index is up over 5%. BSE Realty index is up 15%, Unitech is up 16.5% and DLF is up 11.5%. NSE Advance:Decline is at 5:2
Top gainers on the Sensex are HDFC Bank, Bajaj Auto and Hindalco up 9%. NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top loser on the Sensex are Wipro down 1.4%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5% gains.
Mkt trading near day's high: Biggest ever intra day gain for Sensex
The markets are trading firm at the day's high on buying seen in scrips across sectors. Sensex has rallied over 1000 points and Nifty is up 350 points. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 1.06 hrs IST, the Sensex is up 1017 points at 17745, and the Nifty up 334.25 points or 6.82% at 5233.55.
About 1175 shares have advanced, 1760 shares declined, and 47 shares are unchanged.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; small caps under pressure
The markets have once again picked up some momentum but are still off early highs. Metal, realty, oil & gas and banking space have been in the focus since opening. All the key BSE indices are trading in green with substantial gains barring consumer durables and smallcap index which have given up most of its early gains.
At 12:00, the Sensex is up 584.09 points or 3.49% at 17314.03, and the Nifty up 192.90 points or 3.94% at 5092.20. About 1151 shares have advanced, 1779 shares declined, and 52 shares are unchanged.
Market breadth have been impressive so far with over 700 stocks on the advancing side and nearly 400 stocks on the decline side on NSE. However, turnover has been some concern today. Rupee was quoting at 39.36 against USD.
Top gainers on the Sensex are NTPC at Rs 213.70 up 8.64%, Reliance at Rs 2,561 up 8.61% and BHEL at Rs 2,154 up 8.50%.
Top losers on the Sensex are Wipro at Rs 417.95 down 2.54%, Bharti Airtel at Rs 836 down1.57% and Ambuja Cements at Rs 115.30 down 0.82%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts strong but off early highs; metal, oil stocks up
The markets bounced back smartly in the opening trade today after seven consecutive fall and are trading strong but off day's high. Huge buying has been taking place across the sectors led by the realty, banking, metal and oil & gas. All the Sensex stocks are in green with substantial gains. Midcap space is also very strong and the market breadth has been very impressive so far with very good volume so far.
At 10.55 am, the Sensex is up 347.00 points or 2.07% at 17076.94, and the Nifty up 150.75 points or 3.08% at 5050.05. About 1046 shares have advanced, 1875 shares declined, and 61 shares are unchanged.
Top gainers on the Nifty are Reliance Energy at Rs 1,785 up 8.27%, Unitech at Rs 378 up 7.82% and Reliance Comm at Rs 618 up 7.44%.
Top losers on the Nifty are NALCO at Rs 410 down 4.33%, Wipro at Rs 417.50 down 3.35% and Sun Pharma at Rs 940.50 down 2.94%.
Top Sensex gainers were HDFC, SBI, NTPC, SBI, DLF and ICICI Bank. In the realty space, Peninsula Land, Omaxe, Sobha Developer, Parsvnath and Anant Raj Inds were up over 10%.
In the metal sector, the counters which are in focus were Hind Zinc, Sesa Goa, Mah Seamless, JSW Steel and Sterlite Inds. IT space was also in focus today and I Flex, Mphasis, Patni Computers and HCL tech were tradin with over 5%^ gains.
Mkts open with huge gap up; Sensex jumps over 900 pts
The markets have bounced back smartly in the opening trade with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.
At 9:56 am Sensex was up 907 points at 17437 and Nifty jumped 196 points at 5096. Major gainers in the opening move were Infosys, ICICI bank, BHEL, ONGC, Rel Comm, NTPC, Rel Energy, Reliance.
Asian markets were trading higher. Hong Kong's Hang Seng surged 7.28% or 1584.55 points at 23,342.18. Japan's Nikkei gained 3.35% or 421.27 points at 12,994.32. Singapore's Straits Times advanced 2.97% or 85.27 points at 2,951.82. South Korea's Seoul Composite shot up 1.74% or 28 points at 1,637.02. However, Taiwan's Taiwan Weighted was down 0.17% or 12.91 points at 7,569.05.
US markets: Dow Jones was down 1.05% or 127.62 points at 11971.68. The Standard & Poor's 500 index slipped 14.69 points, or 1.11%, to 1,310.50, while the Nasdaq composite index plunged 47.75 points, or 2.04%, to 2,292.27.
Market cues:
* FIIs net sell USD 601.3 million in equity
* MFs net buy Rs 1,998 crore in equity
* NSE F&O Open Interest down by Rs 21,005 crore at Rs 89,100 crore
* Relief rally in Asia; US ends sharply off-lows
When sensex falled some enjoyed
TUTA TUTA APNA SENSEX AISE TUTA,K FIR JUD NA PAYA.LUTA LUTA FII's NE ISKO AISE LUTA K FIR UDH NA PAYA.GIRTA HUA WO ASMANSE AKAR GIRA ZAMINPAR.KHWABOME FIR B PROFITS he SAB KEHTE RAHE MAGAR.k allah k bande hasde,jo aaj gaya KAL FIR AYEGA.
Tuesday, January 22, 2008
Saare zameen par: Now jokes hit markets
If one person's misery is the other's happiness, then it is also true that people make fun of things that they fear like the carnage in the stock market.
In the middle of turmoil, the stock markets have become the butt of jokes being circulated across media such as the Web and mobile phones.
"Bankrupt allowed to return to their native place without ticket -- (Railway Minister) Lalu Prasad," goes one rude SMS joke.
Other 'jokes' border on being stupid: "Good time to invest in stocks of Rupa Frontline, VIP underwear, Jockey briefs etc. 'Sab ki chaddi utar gayi' (everyone has lost their briefs). So, everyone will buy a new one."
Share market investors have lost over Rs 14 trillion in the last seven days, which saw stock prices fall sharply over fears about a possible recession in the United States.
"Bankrupt will be given red imported wheat free on ration - (Agriculture Minister) Sharad Pawar," was one other joke that a self-styled funnyman came up with.
Also from his stable, was a joke about Finance Minister P Chidambaram announcing a decision to treat 'all losses in the market as tax deducted at source.'
Another jester came up with this spoof on the Ambanis, whose group companies usually drive the market: "Latest blockbuster movie 'Saare Zameen Par' (stars bite dust; a spoof on the Bollywood hit film, Taare Zameen Par) -- premiere on BSE and NSE directed, produced and acted by Ambani brothers. Power on, market gone."
Only 4.3 million of India's over one billion people invest in stock markets.
In the middle of turmoil, the stock markets have become the butt of jokes being circulated across media such as the Web and mobile phones.
"Bankrupt allowed to return to their native place without ticket -- (Railway Minister) Lalu Prasad," goes one rude SMS joke.
Other 'jokes' border on being stupid: "Good time to invest in stocks of Rupa Frontline, VIP underwear, Jockey briefs etc. 'Sab ki chaddi utar gayi' (everyone has lost their briefs). So, everyone will buy a new one."
Share market investors have lost over Rs 14 trillion in the last seven days, which saw stock prices fall sharply over fears about a possible recession in the United States.
"Bankrupt will be given red imported wheat free on ration - (Agriculture Minister) Sharad Pawar," was one other joke that a self-styled funnyman came up with.
Also from his stable, was a joke about Finance Minister P Chidambaram announcing a decision to treat 'all losses in the market as tax deducted at source.'
Another jester came up with this spoof on the Ambanis, whose group companies usually drive the market: "Latest blockbuster movie 'Saare Zameen Par' (stars bite dust; a spoof on the Bollywood hit film, Taare Zameen Par) -- premiere on BSE and NSE directed, produced and acted by Ambani brothers. Power on, market gone."
Only 4.3 million of India's over one billion people invest in stock markets.
Why Sensex trading was suspended?
The Bombay Stock Exchange benchmark Sensex on Tuesday (January 22, 2008) tumbled by 2,029 points, or 11.53 per cent, leading to suspension of trading on the bourse for an hour. This was the fourth time in the history of Indian stock market that the trading has been halted.
Why suspend trading?
* According to norms, if the stock market witnesses a movement of 10 per cent on either side, the trading has to be suspended for an hour.
* Based on the closing level of 20,286.99 points on December 31, the circuit limit is 2,028 points.
* If the Sensex hits the 10 per cent circuit limit again, trading will be halted for another two hours.
Earlier meltdowns
* This is the fourth instance that the market has hit 10 per cent lower circuit. The Sensex is down 25 per cent, Nifty, down 28 per cent and CNX Midcap is down 31 per cent from its life-time highs.
* The first time was during the Harshad Mehta scam in 1992;
* Then in 2004, when the NDA lost to the Congress ;
* In October 2007, when the P-Note issue was on.
The 30-share barometer tumbled 2,029.05 points to 15,576.30 within minutes of start of trading. The 30-share barometer had yesterday (January 21, 2008) lost 1,408 to 17,605.35 points on concerns regarding the US economy going into recession. Similarly, the wide-based National Stock Exchange index Nifty plunged 12.10 per cent or 639.30 points to 4,569.50.
Cumulative losses
The Sensex has lost 25 per cent since January 10, 2008, when it hit its peak of 21,206.77 points. Nifty has come 28 per cent below its high of 6,357.10, reached on January 8, 2008.
Why suspend trading?
* According to norms, if the stock market witnesses a movement of 10 per cent on either side, the trading has to be suspended for an hour.
* Based on the closing level of 20,286.99 points on December 31, the circuit limit is 2,028 points.
* If the Sensex hits the 10 per cent circuit limit again, trading will be halted for another two hours.
Earlier meltdowns
* This is the fourth instance that the market has hit 10 per cent lower circuit. The Sensex is down 25 per cent, Nifty, down 28 per cent and CNX Midcap is down 31 per cent from its life-time highs.
* The first time was during the Harshad Mehta scam in 1992;
* Then in 2004, when the NDA lost to the Congress ;
* In October 2007, when the P-Note issue was on.
The 30-share barometer tumbled 2,029.05 points to 15,576.30 within minutes of start of trading. The 30-share barometer had yesterday (January 21, 2008) lost 1,408 to 17,605.35 points on concerns regarding the US economy going into recession. Similarly, the wide-based National Stock Exchange index Nifty plunged 12.10 per cent or 639.30 points to 4,569.50.
Cumulative losses
The Sensex has lost 25 per cent since January 10, 2008, when it hit its peak of 21,206.77 points. Nifty has come 28 per cent below its high of 6,357.10, reached on January 8, 2008.
How to make hay when the market crashes
Most people have entered panic mode. Retail investors are hurling abuses at FIIs, the finance minister, P Chidambaram, the Securities and Exchange Board of India (SEBI) and everyone else who has caused panvati (curse) to the markets.
Those who are long on futures and holding call options, have had their wealth wiped out, instantly. But it is important to understand that we have a similar scenario every time there is a correction.
I always warn people that the markets can be very lethal if you enter without proper knowledge. But powered with knowledge, market corrections and falls are a great opportunity to create wealth.
You can rise in the fall!
A 1,400-point fall at the Sensex scares away speculative buyers and in turn makes things a lot cheaper. Many stocks today are being offered at discounted prices compared to their earlier highs.
Many of them still continue to have growing profits and in some cases even improved fundamentals. Some of the world’s richest investors have used market corrections and pessimism to buy cheap, and create their millions and billions in the long term.
Warren Buffet loves buying when others are pessimistic. Remember, people who create wealth do things that others don’t. When everyone panics and sells quality stocks, you can accumulate them at a lesser price. If you have a long-term perspective of at least one or two years you will create a lot of wealth.
So, what do you do?
Ignore those people who are busy spreading doomsday theories. Look back and you will see how the market keeps making a new high after every correction. Always keep some cash handy to make the most of these times.
No matter what the levels of the markets, undervalued companies will always exist. In fact, a few undervalued companies I have invested in, have become even cheaper now. This makes it all the more appealing for me to buy more.
Sos, make the most of such situations and I assure you, you will create a lot of wealth.
Those who are long on futures and holding call options, have had their wealth wiped out, instantly. But it is important to understand that we have a similar scenario every time there is a correction.
I always warn people that the markets can be very lethal if you enter without proper knowledge. But powered with knowledge, market corrections and falls are a great opportunity to create wealth.
You can rise in the fall!
A 1,400-point fall at the Sensex scares away speculative buyers and in turn makes things a lot cheaper. Many stocks today are being offered at discounted prices compared to their earlier highs.
Many of them still continue to have growing profits and in some cases even improved fundamentals. Some of the world’s richest investors have used market corrections and pessimism to buy cheap, and create their millions and billions in the long term.
Warren Buffet loves buying when others are pessimistic. Remember, people who create wealth do things that others don’t. When everyone panics and sells quality stocks, you can accumulate them at a lesser price. If you have a long-term perspective of at least one or two years you will create a lot of wealth.
So, what do you do?
Ignore those people who are busy spreading doomsday theories. Look back and you will see how the market keeps making a new high after every correction. Always keep some cash handy to make the most of these times.
No matter what the levels of the markets, undervalued companies will always exist. In fact, a few undervalued companies I have invested in, have become even cheaper now. This makes it all the more appealing for me to buy more.
Sos, make the most of such situations and I assure you, you will create a lot of wealth.
Infosys fines CEO for breaking rule
Infosys Technologies Ltd has fined its Chief Executive for not reporting on time a change in his share ownership, the company said in a filing with the US Securities and Exchange Commission on Tuesday.
The audit committee of Infosys imposed a fine of Rs 500,000 on S Gopalakrishnan for 'inadvertently failing' to notify the company within one business day following the change in his shareholding as per its insider trading rules.
Gopalakrishnan had inherited 12,800 shares from his mother on Dec. 24, the No. 2 Indian software services exporter said.
Infosys said it had directed the CEO to pay the penalty to a charity and he had complied.
The audit committee of Infosys imposed a fine of Rs 500,000 on S Gopalakrishnan for 'inadvertently failing' to notify the company within one business day following the change in his shareholding as per its insider trading rules.
Gopalakrishnan had inherited 12,800 shares from his mother on Dec. 24, the No. 2 Indian software services exporter said.
Infosys said it had directed the CEO to pay the penalty to a charity and he had complied.
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