New NFO - Mirae Asset Global Commodity Stocks Fund.

>> Saturday, June 28, 2008

Mirae Asset – Asia's Leading Asset Management Group has Launched India's First Global Commodity Stocks Fund NFO "Mirae Asset Global Commodity Stocks Fund"

v Investment Objective : The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio

investing in equity and equity related securities of companies that are engaged in commodity and commodities related sectors/sub sectors/ industries, with at least 65% of the corpus invested overseas in Asia Pacific and Emerging Markets. There is no assurance or guarantee of returns.

v Asset Allocation : 65% - 100% : Asia Pacific and/or Emerging Markets Equities and Equity Related Securities (excluding Indian equities and equities related securities) of companies that are

engaged in commodity and commodities related sectors/sub sectors/industries

0 – 35% : Indian Equities and Equity Related Securities, including but not limited to those that are engaged in commodity and commodities related sectors/sub sectors/industries

v Investment Options : (a) Growth Option

(b) Dividend Option

v NFO Opens : 24th June, 2008

v Minimum Investment : Rs.5,000/- (multiples of Re. 1/- thereafter) Systematic Investment Plan (SIP): Rs. 1,000/- (multiples of Re.1/ - thereafter), minimum 6 installments (Monthly), Rs. 1,500/- (multiples of Re.1/- thereafter), minimum 4 installments (Quarterly).

v Entry Load : Regular Plan <>NIL

v Entry Load for SIP : 2.25%

v Exit Load : Regular Plan <>

(b) Redemption on or after 6 months (180 Days) and up to 12 months (365 Days) from the date of allotment 0.50%

(c) Rs. 5 Crores & above - NIL

v Exit Load for SIP : If redeemed within 12 months (365 Days) from the date of allotment : 1.00%

v NFO Closes : 23rd July, 2008

v Benchmark Index : MSCI Asia Pacific ex Japan and India Energy & Materials Index (55%)+ MSCI Brazil

Energy & Materials Index (10%) + BSE 200 (35%)

Download The Form Here Click Here.

And also write ARN-1308 & Sub-Brokers Code as 1308

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Investing In Gold.

>> Thursday, June 26, 2008

People like the look of gold, and they'll do what they can to get it. Even though it costs more now, people still want it. If you're interested in investing in gold, do some research before you shell out the money for it.Here's some things you should know before you take that big, financial leap:In addition to gold coins, there are different ways that you can you can invest.You can use metals, mutual funds, mining company stock, or futures, as additional ways to make investments with gold. You can also invest in gold using bars, if you wish.You can get more information by going to a metal dealer. Or you can search online to find some reputable ones. If you are a first time investor, it might be better for you to visit a facility to speak with a dealer in person.If you have a lot of questions, you should write them down.Find out how long the dealer has been established. If they've been there a while, chances are they are very knowledgeable about what they do.You'll want to educate yourself before you visit with a dealer. That way, you'll have an idea of how investing in gold really works. You'll also find out if what the dealer is telling you lines up with your research.If you do decide to pursue this, you should also think about investing in gold stocks and funds. It's been proven that gold funds are a reliable choice to invest in. However, when you're dealing with stocks, you're dealing with a single entity. That means the gold stocks are not diversified and your investment isn't as reliable as gold funds.When you're trying to decide what you're going to purchase, don't be in a hurry to make a decision.Don't buy the first thing you see because you may regret the purchase later. All gold pieces are not easy to sell if you want to get rid of them.You can also purchase certificates as an alternate option. This for you, would solidify that you own a piece of gold.When researching about gold, find out how much it would be worth if it was kept polished and free of nicks and scrapes? What about if it's not so polished? More than likely, it won't be as much as the former. The better you maintain your gold, the better price you can get for it.Investing in gold futures is for those who can afford to take the risk.If you're just starting out and don't have the money to risk for it, then you should pass on this for now. With futures, you have to be certain that you can handle the volatility of this segment.Futures is considered a financial risk because you have to constantly figure out whether the price of gold will go up or down. Sometimes you may hit it on the head, other times you may not. If you get involved in this, you will have to either buy or sell for a certain price.The dependence on how much the gold is worth during that time determines how much money you will make.Investing in gold can be lucrative, but you have to know what you're doing when you get involved in it.

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Indian Entertainment & Media Industry.

>> Sunday, June 22, 2008

Fact file on Indian Entertainment Industry: -
India has largest selling newspaper in the world - Dainak Jagran.
India has the largest selling English newspaper in the world - The Times Of India.
India produces largest no. of films in the world.
India Buys largest no of movie tickets.
India has the 3rd largest cable TV homes in the world.
But the ad spend to GDP in India is less than half of world average (0.98%)
And the Indias share to the global industry is ($1.4 trillion) which is less than 1%
Markety cap of entertainment industry in India is < 1/ 10 of top 10 US players.
This will change as the industry moves from unorganisaed to organised manner.

Now an eye on the listed stocks: -
Adlads Films
PVR Ltd.
Sun TV
TV 18
Zee entertainment
Zee News.
Dish TV.
Mid-Day ltd.
HT Media.
And many more.

Reasons for this industry to prosper: -
Per Capita income is increasing at a faster pace.
So people tend to spend in Luxories and outings.
Media brings every thing to light so every one reads it.
People are getting literate day by day so the need for news papers will increase.
Colabration of Indian Inds. with Hollywood Inds. will prosper.
Industry is undervalued at present.
So invest Right.
Happy Investing!!

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Seven Ways To Survive The Stock Markets Correction.

>> Saturday, June 21, 2008

Global markets all have corrected lately. Irrespective of which market you are investing in, you would have been affected by the recent volatility. You could be an investor in America, India, China, Korea or anywhere else in the world- your situation would be pretty much the same. Many of you who are new investors might have entered panic mode, where you are unable to relax and have lots of stress and depression. I understand how it must be for somebody who just started investing in either stocks or mutual funds two months ago to see a notional loss of 30% or more now.

I remember the first time several years ago when I witnessed a stock market correction, my portfolio was down by over 50% and I too had entered panic mode. But thankfully after reading books on investing and listening to more experienced investors, I decided not to panic and hold my quality stocks. I am a much happier person today thanks to that decision.

Here are seven simple ways to survive a stock market correction as an investor:

1. Stop Listening To Analysts

Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them won’t be of any help. The reason people listen to analysts is because they are looking for peace and hope. Trust me you will get none of that by listening to somebody else. Peace and hope are all within you.

2. Stop Staring At Your Portfolio Every Thirty Minutes

Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This won’t help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happy. If it isn’t, find out if you need to exit. The stock price will catch up in the near future if business is growing. Do you stare at your money kept in a bank FD everyday? Most probably not. Use the same principle when you invest in stocks or mutual funds.

3. Be Patient

Many of you might not have a lot of cash to buy cheap now; however please be patient with whatever you have bought. Even the youngest billionaire on Earth today is 23 years old. It took him 23 years to be a billionaire and he didn’t do it in few days or weeks. The youngest billionaire probably in history is 23-year-old Mark Zuckerberg - the founder of the social networking site-Facebook.

4. Speak To Actual Investors With Experience

Instead of interacting with analysts or your broker, speak with people who are actual investors and who have been in the market for longer periods of time than you. They will tell you how they have survived various stock market corrections and what has made them richer. Read and learn more about people who have actually created wealth and sustained it over a long period of time.

5. Stop Following Crazy Tips

Please for heaven’s sake stop following ‘hot’ tips which promise to make you a millionaire in a matter of months. Maybe the ‘hot’ tip is only meant for billionaires who would end up as millionaires in case they do follow the tip. If it seems to good to be true, it is probably just a scam, which hopes to take money away from retail investors and put them in the hands of greedy manipulators. Similarly stop following rumours about how fundamentally strong companies are going to be shut down and go bankrupt in the next few months. Use your own head and trust yourself.

6. Understand Market Cycles

Every asset class has a cycle. Stock markets, mutual funds, real estate all move in cycles. Please realize that nothing can keep going up forever in a single direction. There will be phases when prices will come down and again move up. If you go back into history you will see several instances when stock prices came down, however over a period of time quality companies always reward investors. Understand market cycles, and don’t become a slave to them.

7. Follow The Guru

Today the richest man on earth, Warren Buffett, is an investor who has created wealth because he has stayed away from what everybody else is doing and has simply invested in quality companies for the long term. He invested in Gillette, for the simple reason that he believed that men won’t stop shaving. It makes sense to follow, as I call him, “The Guru” and think long term and remember people who create wealth do things that others don’t.

I’m sure if you follow the simple techniques above you will be a much happier and a calmer investor. Investing is about controlling your emotions and being disciplined about what you do.

Happy Wealth Creation!

Yogesh Chabria

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Inflation at 11.05% at 13 years high.

>> Friday, June 20, 2008

Fuelled by increase in petroleum product prices, the wholesale price index (WPI)-based inflation rate soared to 11.05 per cent for the week ended 7 June as compared to 8.75 per cent in the previous week. Inflation rate stood at 4.28 per cent for the corresponding week in the previous year.

During the week the index for fuel group rose 7.8 per cent due to higher prices of petrol (11 per cent), light diesel oil (21 per cent), LPG (20 per cent), naphtha (17 per cent), furnace oil (15 per cent), aviation turbine fuel (14 per cent), high speed diesel oil (10 per cent) and bitumen (7 per cent).

Among the primary articles prices of condiments and marine fish rose while the prices of fruits and vegetables declined.

The government also revised inflation rate for the week ended April 12 to 7.95 per cent as compared to 7.33 per cent as reported earlier.

Source - Business Standard.

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Markets on 20th June.

Markets expected to open higher due to global cues.
US markets up Nasdaq up 32 points Dow up 30 points.
Hang Sang up 415 points. Chinas market up by 4.51%
We expect a gap up opening.
Nifty should maintain the range of 5400.
Poll expects inflation data to be in double digits.

Stocks to look out for today is Praj Ind.
Tgt of 199.70 , 201.50 , 203.60
Use stop loss of 193.90

Happy Investing.

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Karuturi Global - A Report.

>> Thursday, June 19, 2008

Incorporated in 1994-95, Karuturi Global Limited is engaged in three businesses: floriculture, processing foods
– gherkins, and information technology. The company was initially set up as Karuturi Floritech in
Doddaballapur, near Bangalore with an annual capacity to process 12 million premium cut roses at its state-ofthe-
art facilities.
Promoted by Ramakrishna Karuturi, the company has set up a wholly owned subsidiary in Ethiopia, Africa
Ethiopian Meadows Plc - to produce roses with a special focus on HT roses. And today with the combined production capacities of India and Ethiopia, Karuturi ranks amongst one the largest cut rose producers in the world with a strong global presence.
In addition to cut roses, the company also supplies cut rose products such as rose plants, coco peat and coco cups to customers across over 15 countries including Holland, Germany, United Kingdom, Italy, Singapore,
Taiwan, Bahrain, Muscat, Dubai, Australia, Japan, New Zealand, Brunei and across North America.

Having consolidated its presence in floriculture, Karuturi has now expanded into the fast growing agro-based and food processing business sector to export bulk and bottled gherkins to international processed food firms and super markets in major consuming nations such as the US, Europe and Russia, which are also the company's key rose markets.
Information technology

The Company has also diversified into IT and network solutions under which it provides bandwidth to multinational companies and also develops software for the auction portal in its floriculture business.
The synergy between its two business divisions – floriculture and IT - is apparent in , its Portal website for floriculture which is conceptualised, designed, developed and hosted by the combined efforts of the two divisions.

Investment Highlights

  • _ Largest player in cut flower business
  • _ Rising Income in India which is leading to a change in consumer behaviour
  • _ Domestic demand growing at the rate of 40 per cent per annum, significantly higher than the
  • global average.
  • _ Global supply-demand mismatch puts the industry in a strong position
  • _ Indian Floriculture Industry still nascent – Huge opportunities for Karuturi
It is trading at a very low price and can be termed as a free price.
At CMP of 24 one can start accumulating it around this price. With an PE of 65 and EPS of 0.37 the stock seems attractive.
One start accumilating this stock around this levels for target of Rs 50 in medium to long term.
Happy Investing.

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Fear TO The Indian Markets.

Indian markets have lost much of its gained glory. The 21K Sensex has tumbled down to 14K within 6 months. I think the major barriers to the markets are : (The Fear Factors.)

  • Rising crude oil prices.
  • Rising Inflation rate.
  • Selling by FII's.
  • Rupee depreciation on US $.
  • Liquidity Crunch.
  • Forthcoming Elections.
So if these things are not back to normal we will be having a free fall in the markets. Crude oil is a major worry. But what I would say that why did the Stone Age end it was not because of lack of stones , but they found a better substitute. So rather I would say that this oil Age will end and soon the people will find a better substitute.

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Real Resons For The Oil Prices To Rise.

By now it is becoming too obvious that the United States is playing the oil game all over again. And this is the desperate gamble of a country whose economy is neck deep in trouble.

Given this scenario, managing prices of oil is central to the US economic architecture. Expectedly, this gamble has been played in a great alliance between the US government, US financial sector and the media.

I have earlier written about:

  • The impending collapse of the US dollar on account of the inherent weakness in the US economy caused by its structural weakness as reflected in the sub-prime crisis;
  • The repeated softening of the interest rates in the US that has the potency to kill the US dollar; and
  • How the fall in the US dollar suits the US corporate sector, especially its omnipotent financial sector.
Naturally, since the past few years, the US financial sector has begun to turn its attention from currency and stock markets to commodity markets. According to The Economist, about $260 billion has been invested into the commodity market -- up nearly 20 times from what it was in 2003.

Coinciding with a weak dollar and this speculative interest of the US financial sector, prices of commodities have soared globally.

And most of these investments are bets placed by hedge and pension funds, always on the lookout for risky but high-yielding investments. What is indeed interesting to note here is that unlike margin requirements for stocks which are as high as 50 per cent in many markets, the margin requirements for commodities is a mere 5-7 per cent.

This implies that with an outlay of a mere $260 billion these speculators would be able to take positions of approximately $5 trillion -- yes, $5 trillion! -- in the futures markets. It is estimated that half of these are bets placed on oil. Readers may note that oil is internationally traded in New York and London and denominated in US dollar only. Naturally, it has been opined by experts that since the advent of oil futures, oil prices are no longer controlled by OPEC (Organization of Petroleum Exporting Countries). Rather, it is now done by Wall Street.

This tectonic shift in the determination of international oil prices from the hands of producers to the hands of speculators is crucial to understanding the oil price rise.

Today's oil prices are believed to be determined by the four Anglo-American financial companies-turned-oil traders, viz., Goldman Sachs, Citigroup, J P Morgan Chase, and Morgan Stanley. It is only they who have any idea about who is entering into oil futures or derivative contracts. It is also they who are placing bets on oil prices and in the process ensuring that the prices of oil futures go up by the day.

But how does the increase in the price of this oil in the futures market determine the prices of oil in the spot markets? Crucially, does speculation in oil influence and determine the prices of oil in the spot markets?

Answering these questions as to whether speculation has supercharged the demand for oil The Economist, in its recent issue, states: 'But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of 'paper barrels,' but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.'

On both counts -- that speculation in oil is not pushing up oil prices, as well as on the issue of the build-up of inventories -- the venerable Economist is wrong.

The finding of US Senate Committee in 2006

In June 2006, when the oil price in the futures markets was about $60 a barrel, a Senate Committee in the US probed the role of market speculation in oil and gas prices. The report points out that large purchase of crude oil futures contracts by speculators has, in effect, created additional demand for oil and in the process driven up the future prices of oil.

The report further stated that it was 'difficult to quantify the effect of speculation on prices,' but concluded that 'there is substantial evidence that the large amount of speculation in the current market has significantly increased prices.'

The report further estimated that speculative purchases of oil futures had added as much as $20-25 per barrel to the then prevailing price of $60 per barrel. In today's prices of approximately $130 per barrel, this means that approximately $100 per barrel could be attributed to speculation!

But the report found a serious loophole in the US regulation of oil derivatives trading, which according to experts could allow even a 'herd of elephants to walk to through it.' The report pointed out that US energy futures were traded on regulated exchanges within the US and subjected to extensive oversight by the Commodities Future Trading Commission (CFTC) -- the US regulator for commodity futures market.

In recent years, the report however pointed out to the tremendous growth in the trading of contracts which were traded on unregulated OTC (over-the-counter) electronic markets. Interestingly, the report pointed out that the trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron into the Commodity Futures Modernization Act in 2000.

The report concludes that consequential impact on account of lack of market oversight has been 'substantial.'

NYMEX (New York Mercantile Exchange) traders are required to keep records of all trades and report large trades to the CFTC enabling it to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. In contrast, however, traders on unregulated OTC electronic exchanges are not required to keep records or file any information with the CFTC as these trades are exempt from its oversight.

Consequently, as there is no monitoring of such trading by the oversight body, the committee believes that it allows speculators to indulge in price manipulation.

Finally, the report concludes that to a certain extent, whether or not any level of speculation is 'excessive' lies entirely in the eye of the beholder. In the absence of data, however, it is impossible to begin the analysis or engage in an informed debate over whether our energy markets are functioning properly or are in the midst of a speculative bubble.

That was two years back. And much water has flown in the Mississippi since then.

The link to the spot markets

Now to answer the second leg of the question: how speculators are able to translate the future prices into spot prices.

The answer to this question is fairly simple. After all, oil price is highly inelastic -- i.e. even a substantial increase in price does not alter the consumption pattern. No wonder, a mere 3-4 per cent annual global growth has translated into more than a 40 per cent annual increase in prices for the past three or four years.

But there is more to it. One may note that the world supply and demand is evenly matched at about 85 million barrels every day. Only if supplies exceed demand by a substantial margin can any downward pressure on oil prices be created. In contrast, if someone with deep pockets picks up even a small quantity of oil, it dramatically alters the delicate global demand-supply gap, creating enormous upward pressure on prices.

What is interesting to note is that the US strategic oil reserves were at approximately 350 million barrels for a decade till 2006. However, for the past year and a half these reserves have doubled to more than 700 million barrels. Naturally, this build-up of strategic oil reserves by the US (of 350 million barrels) is adding enormous pressure on the oil demand and consequently its prices.

Do the oil speculators know of this reserves build-up by the US and are indulging in rampant speculation? Are they acting in tandem with the US government? Worse still, are they bordering on recklessness knowing fully well that if the oil prices fall the US government will be forced to a 'Bears Stearns' on them and bail them out? One is not sure.

But who foots bill at such high prices? At an average price of even $100 per barrel, the entire cost for the purchase of this additional 350 million barrels by the US works out to a mere $35 billion. Needless to emphasise, this can be funded by the US by allowing it currency printing presses to work overtime. After all, it has a currency that is acceptable globally and people worldwide are willing to exchange it for precious oil.

No wonder Goldman Sachs predicts that oil will touch $200 to a barrel shortly, knowing fully well that the US government will back its prediction.

And, in the past three years alone the world has paid an estimated additional $3 trillion for its oil purchases. Oil speculators (and not oil producers) are the biggest beneficiaries of this price increase.

In the process, the US has been able to keep the value of the US dollar afloat -- perhaps at an extra cost of a mere $35 billion to its exchequer!

The global crude oil price rise is complex, sinister and beyond innocent economic theories of demand and supply. It is speculation, geopolitics and much more. Obviously, there is a symbiotic link between the US, the US dollar and the oil prices. And unless this truth is understood and the link broken, oil prices cannot be controlled.

by M R Venkatesh -

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Choosing MFs in volatile markets

For those who shy away from the volatile equity markets, experts’ advice is to take the mutual funds route. During the period of steep correction , both direct investors in the market and mutual fund investors suffered losses.

The investor mood is on an upbeat when the market is booming. But during a fall, they tend to panic. New investors simply sell everything and quickly get out with losses. However, seasoned investors look for opportunities even in volatile markets.

Here are a few points to keep in mind when investing in mutual funds in volatile conditions:


Ride through the volatile markets by amply diversifying across different categories, sectors , segments, schemes and fund houses. However, overdiversification too brings with it a bundle of woes. Through effective diversification, an investor can achieve his risk/reward objectives and reduce risk effectively .

Go long term

Have a long-term perspective. Only those who need money urgently sell their lot in a distress market condition. Otherwise, stay invested. The volatile markets will stabilise soon. If you decide to invest in a diversified equity fund with a strong track record, remember to stay for the long term. These funds will bounce back once the markets pick up steam.

Mix of funds

Build a strong portfolio with the right mix of funds. The fund manager plays a critical role in the selection of stocks that make up the fund. Some people end up with similar funds from different fund houses, with the same objectives . Like two large-cap growth funds from two different fund houses. This simply represents two funds from the same fund category . The result is inefficient diversification.

Regular investing

Investing regularly in systematic investment plans, irrespective of market behavior, will help you manage volatility. Investing a small amount every month will bring down your risk tremendously . Otherwise, some investors who get the timing wrong could invest a lump sum when the markets are at high levels.

Defensive stocks

A falling market is not appealing to the investor. He can wait till the downside ends. The more adventurous can invest in funds that in turn put the money in defensive stocks. Defensive stocks are not significantly affected by factors that make the markets volatile. However, it is tough to say how high these will soar in an upswing. Defensive stocks are least influenced by market trends.

Reduce risk

Reduce your exposure to risk and anticipate less reward. It makes no sense to expect big returns out of volatile markets. Taking too many risks can consume your hard-earned money.


Strict investment discipline is critical for those who intend to ride safe and see profits. Spontaneous investors seldom get the timing right and can turn out to be big losers. How regularly one invests dictate the difference between a loser and a gainer.

Source: The Economic Times
To Invest in MF contact us at or call me (Chirag) at 9833771136

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