>> Tuesday, July 29, 2008

The Reserve Bank of India (RBI) today announced a 25 basis points hike in the cash reserve ratio (CRR) and a 50 basis points hike in the repo rate, both rates will be up to 9%.

The rate hikes were announced in the First Quarter Review of Annual Statement on Monetary Policy for FY09 presented by RBI Governor Y Venugopal Reddy.


  • Bank Rate kept unchanged
  • Reverse Repo Rate under LAF kept unchanged
  • Repo Rate increased by 50 basis points from 8.5% to 9.0%
  • Cash Reserve Ratio to be increased by 25 basis points to 9.0% with effect from the fortnight beginning August 30, 2008
  • GDP growth projection for 2008-09 revised from the range of 8.0-8.5% to around 8.0%, barring domestic or external shocks
  • While the policy actions would aim to bring down the current intolerable level of inflation to a tolerable level of below 5.0% as soon as possible and around 3.0% over the medium-term, at this juncture a realistic policy endeavour would be to bring down inflation from the current level of about 11.0-12.0% to a level close to 7.0% by March 31, 2009
  • While there are early signs of some moderation in money supply and deposit growth, they continue to expand above the indicative projections warranting continuous vigilance and appropriate and timely policy responses
  • In view of the evolving environment of heightened uncertainty in global markets and the dangers of potential spillovers to domestic markets, liquidity management will continue to receive priority in the hierarchy of policy objectives over the period ahead
  • Barring the emergence of any adverse and unexpected developments in various sectors of the economy, assuming that capital flows are effectively managed, and keeping in view the current assessment of the economy including the outlook for growth and inflation, the overall stance of monetary policy in 2008-09 will broadly continue to be:

    *To ensure a monetary and interest rate environment that accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum

    *To respond swiftly on a continuing basis to the evolving constellation of adverse international developments and to the domestic situation impinging on inflation expectations, financial stability and growth momentum, with both conventional and unconventional measures, as appropriate

    *To emphasise credit quality as well as credit delivery, in particular, for employment-intensive sectors, while pursuing financial inclusion.

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Investing in profits.

>> Monday, July 28, 2008

One of the biggest mistake people do is investing when the markets are too high and cry when the markets come down. My suggestion is that investing sensibly when ever does makes sense. Most of the people before entering the stock markets think by investing they will become millionaire and billionaires. But this is not the case. Stock markets are volatile and people with soft hearts should be away from it when it is in such a bear market phase. Companies which have good profits margin are bond to perform well.
Profits drive profits - as it is said money drives money.
Investing is an art and an hobby.
I have a few good companies which will excel in long term.
Here is the list.
Rajesh Export. - Due to high sales and is also coming out with a retail show room.
Spice Jet. - Good fundamentals always in rumors and is very cheap at present.
Karuturi Global. - Roses are sweet. Click here. to view report.
Marksans Pharma - Pharma this is one sector I am bullish on.

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Reliance SIP + Insurance.

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Weekly Stock Market Forecast - 27th July - 1st Aug.

>> Sunday, July 27, 2008

As the government has now won the confidence vote and the Left parties are out of the way, there is now a growing optimism amongst market participants that the new coalition government could speed up the reform agenda. This feeling has been buttressed by the statements of the Finance Minister in the aftermath of winning the confidence vote in Parliament . However, with Indian inflation at close to 12%, its highest in the past 13 years, the top-most priority of the government now would be to try and contain inflation.

With the quarterly monetary policy review of the Reserve Bank of India scheduled for early next week (Tuesday, 29 July 2008), the markets are likely to witness higher volatility in the week ahead, supplemented by the derivatives settlement during the week ahead. Another factor that could influence the direction of the markets would be the revival of monsoons, particularly in the western and southern states which have hitherto received deficit rainfall.

With expectations running high and oil seeming to cool off, the downside could get capped. But for now, investors would do well to keep booking partial profits in the event of sharp rallies and await entry opportunities at lower levels.

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Life stages in life Insurance.

>> Saturday, July 26, 2008

Life Stages

Your insurance need will change as your life does, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyse various insurance needs accordingly.


Young and Single

An important stage where one lays down the foundation of a successful life ahead. Take advantage of the time and power of compounding to ensure that you build up your dreams. Start saving early.

Your needs

  • Save for a home and wedding
  • Tax Planning
  • Save for Golden years


Just Married

Marriage brings about a significant change. New dreams and new opportunities also bring in additional responsibilities. While both of you look forward to a happy and secure life , it is equally important to ensure that eventualities don’t come in the way of shaping your dreams.

Your needs

  • Planning for home / securing your home loan liability
  • Save for vacation
  • Save for your first child


Proud Parents

Once you have children, your need for life insurance is even more. You need to protect your family from an untoward incident. Ensure your protection umbrella takes into account the future cost of securing your child’s dream. You will want life to go on for your loved ones, and having enough life insurance is a way to help ensure that.

Your needs

  • Provide for children’s education
  • Safeguarding family against loan liabilities
  • Savings for post-retirement


Planning for Retirement

While you are busy climbing the ladder of success today, it is important for you to take time and plan for your life after retirement. Having an early start for retirement planning can make a significant difference to your savings. Think about your golden years even before you have reached them. The key is to think ahead and plan well using your time and money.

Your needs

  • Provide for regular income post retirement
  • Immediate Tax benefits
  • Lead a secure, independent and comfortable life style in your retirement years
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ULIP V/S Traditional Insurance.

Types of Insurance Plans - Traditional Life Insurance or Unit Linked Insurance Plan

Insurance Plans - At a glance

Broadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail of both segments:

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer. These include:

1. Flexibility

1. Flexibility to choose Sum Assured.

2. Flexibility to choose premium amount.

3. Option to change level of Premium /Sum Assured even after the plan has started.

4. Flexibility to change asset allocation by switching between funds

2. Transparency

1. Charges in the plan & net amount invested are known to the customer

2. Convenience of tracking one’s investment performance on a daily basis.

3. Liquidity

1. Option to withdraw money after few years (comfort required in case of exigency)

2. Low minimum tenure.

3. Partial / Systematic withdrawal allowed

4. Fund Options

1. A choice of funds (ranging from equity, debt, cash or a combination)

2. Option to choose your fund mix based on desired asset allocation

Traditional Plans

These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:

1. Steady Investment

1. Major chunk of investible funds are in debt instruments

2. Steady and almost assured returns over the long term

2. Features

1. Death benefit is Sum Assured + guaranteed & vested bonus

2. Helps in asset creation as they are for a long tenure

3. Premium to Sum Assured ratios are fixed for each plan and age.

4. Generally withdrawals are not allowed before maturity

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Insurance at age.

How much at what age

At every stage of life, there is an element of risk for the individual. For instance, if you are married and have children, an untimely death or accident is going to cause serious financial loss to your family.

Adequate insurance cover is, therefore, advocated by all financial planners to make sure that your family does not go through any financial hardships.

However, while it is important that you have enough insurance, too much of it is also bad. This is because insurance, as a product, does not give you great returns. So, you need to have a proper mix of insurance and investment to meet all your financial goals. Let us look at different life stages and what are the elements that you need cover for:

From birth till end of education

There is actually no need to have any life cover as the individual's ability to earn any income is nil. In case of an untimely death, the parents are more bereaved because of the loss of a child, and less on the account of any financial loss. Of course, the entire family should have a family floater which covers the child as well.

Single without dependents

Once you start working, the need for insurance does become important. If you are someone who does not have any dependents, then you can opt for medical cover and life insurance, in the form of term insurance and/or personal accident insurance. Since buying an insurance cover at an early age is cheaper, it makes sense to go ahead and buy it as early as possible.


Life insurance - term cover and/or personal accident insurance

Health insurance (mediclaim)

Single person with dependents

However, if you have dependents, especially old parents, it is best that you take more cover. If there are more people dependent on your income, you should take more life insurance. This need may rise to cover medical bills, outstanding debts, caretaker expenses for the surviving dependents, and education costs for surviving children

Life insurance - term cover and/or personal accident insurance

Health insurance (mediclaim)

Couples with no children

In case only one spouse is earning, it is important to have good cover for him/her. This ensures that the dependent does not have any financial bottlenecks due to an accident or unfortunate death of the bread earner. Also, if both the spouses are working, it is important to have adequate cover for both the members. The need for insurance may especially arise for medical bills and outstanding debts, if any.


Life insurance - term cover

Motor/motor cycle insurance

Health insurance (mediclaim) for self and spouse

Overseas medical claim - as required (for all categories)

Personal accident insurance for self and spouse

Couples with children

If both the spouses are earning members, it is possible that if one of them were to expire, the other may be able to cope financially on his/her's remaining income. However, in case there are joint loans and other obligations, then it is imperative to have a strong insurance backup. If you have acquired a house by now you should also be looking at fire and burglary covers.


Life insurance - term cover

Motor insurance

Health insurance (mediclaim) for family

Household insurance

Personal accident insurance for self and spouse

Building insurance, including fire and burglary

Increased term cover for the home loan

Older couple

As you grow older, the need for insurance increases. You would be more prone to falling ill, thereby increasing the burden on your funds. Also, if you are looking for a retirement home, you will need to insure it that against all kinds of dangers.


Life insurance

Motor insurance

Health insurance (Mediclaim) for family

Household insurance

Personal accident insurance for self and spouse

Retired couple

l" style="text-align: justify;">Besides a retirement corpus, this is the time you need insurance most. Incidents of illness, possibility of critical illness and death increases exponentially during this last stage. So, it is best that you are well covered to hedge against any risk.


Motor insurance

Health insurance (Mediclaim) for family

Personal accident insurance for self and spouse

To conclude, the above is a basic guide to the covers you require. However, this will keep on changing with the profile of the person. But you need to remember that your liabilities like credit card outstanding, home loan and other debt should be over by the time you reach the retirement period. This will help you to have a debt-free retirement.

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Life Insurance Vs. Other Savings

Life Insurance Vs. Other Savings

Contract Of Insurance:

A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.


Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

Aid To Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary. In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.


In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.

Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.

Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time.

Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).

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Market plummets 516 pts; ICICI Bank plunges 9%.

>> Friday, July 25, 2008

The 30-share index fell further deep into the negative terrain, touching a low of 14,259.02 as huge sell off is seen across board. Sustained selling pressure is being witnessed in banking, realty, oil and auto stocks.

BSE Midcap and Smallcap index declined 0.65% and 0.59 % respectively.

Sensex is trading down 516.67 points, or 3.50%, at 14,260.34; while the broad-based NSE Nifty fell 115.3 points, or 2.60% at 4318.25. (1.05 p.m.)

Overall market breadth was weak. Out of the total 2,475 shares traded at BSE, 917 advanced, 1479 declined while 79 remained unchanged.

All sectoral Indices are trading in negative led by Bankex (6.15 %), Oil & Gas (5.11%). Realty (3.59%). Rest all other stocks traded down marginally. However Health Care rose.

Gainers at the BSE Sensex were Ranbaxy, which rose 2.96%, HUL and Satyam moved up by 1% each. RComm, Bharti Airtel, ACC and NTPC also rose.

Laggards at the BSE Sensex include ICICI Bank, which plummeted 9% followed by HDFC and HDFC Bank, which plunged over 7% each. RIL, Reliance Infra, DLF, JP Associates, SBI, L&T, Tata Motors, Ambuja Cement and TCS also declined.

Source: - Iris.

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Inflation at 11.89%; Experts expect RBI to raise rates.

Inflation for the week ended July 12 is at 11.89 % versus 11.91%.

A CNBC-TV18 inflation poll conducted earlier, saw inflation for week the ended July 12 at 11.89%.

Inflation for week-ended May 17 was revised to 8.66%, it had earlier been estimated at 8.10%.

So, what do experts see RBI doing next?

Mohan Shenoi, Treasury-Head, Kotak Mahindra Bank, said the chances of RBI pursuing a wait-and-watch policy has increased substantially as WPI has reached a plateau after a rapid rise and international crude oil prices also seems to be coming down. “RBI might just focus on managing liquidity and give the policy rate hike a pass this time. However, the RBI might make some announcements on CRR in order to curb liquidity and to show that inflation is still a concern.”

RVS Sridhar, Senior Vice President‑Treasury, Axis Bank, expects a repo rate hike by RBI. “I don’t see a hike in CRR. There will be some volatility in the next few weeks or months depending on the trajectory of inflation and the expectations on RBI action. Crude oil coming down and should be a great help in these conditions.” He sees interest rates for 10-year bond yields at around 9.25%.

Shubhada Rao, Chief Economist, Yes Bank, said these last two weeks’ numbers definitely point to some stability in the week-over-week increase in prices. “It is going to need significant effort to bring down the week-over-week index number much lower. If the current trend of marginal week-over-week increase continues for a larger part of the year, we could see inflation peaking at around 14-14.5%. Beyond that we could see it lowering. On the flipside, the patchy performance of monsoon is something that we need to watch out for.”

She sees inflation arising in primary articles. “There should be some relief on manufactured product prices. I expect double-digit inflation for a larger part of the current fiscal because the index has risen much higher in the last six week.”

She does not see a rate or CRR action by RBI. She sees rate action between two policy periods, i.e. between July and October.

Inflation Internals:

  • Primary articles up 0.6%
  • Food Articles up 0.6%
  • Coffee up 8% and Fruits and Vegetables up 2%
  • Moong and Jowar up 1%
  • Tea down 2% and Spices down 1%
  • Non-Food Articles up 0.8%
  • Sunflower and Raw Rubber up 3%
  • Rape and Mustard Seeds up 2%
  • Fuel, Power, Light and Lubricants was unchanged
  • Manufactured Products up 0.05%
  • Textiles down 0.1%
  • Tyre and Cord up 1%
  • Basic Metals and Alloys up Marginally
  • Lead Ingots up 6% and Zinc Ingots up 3%
  • Machine and Machine Tools up 0.2%
  • Electrical and Elec Equipment up 0.2%
  • Edible Oil down 0.3%, Oil Cakes up 0.6%
  • Synthetic Resins and Plastic Materials up 0.2%
  • Electical Industrial Machinery up 0.4%
Source:- MoneyControl
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Inflation a risk you can't escape.

>> Thursday, July 24, 2008

It's hard to take inflation seriously when you don't feel its effects today, tomorrow or even next year. If you ask me for Rs.100 and I can loan you only Rs.97, you could probably still make your purchase. It's only Rs.3 right?

Three percent inflation for one year is no big deal, but take a look at what 3% inflation does to Rs.100 over 25 years.

What Inflation Does to Rs.100
Inflation Rate Value after

3% Rs.97 TO Rs.64 Rs.64

5% Rs.97 TO Rs.30 Rs.30

This is a hypothetical scenario using 3% and 5% inflation rates

Who needs to worry about inflation?

Inflation doesn't discriminate. Prices keep going up over time for all of us regardless of where we sit on the socio-economic scale.

Not much escapes the ravages of inflation. If you're lucky, your paycheck will keep pace with inflation. If you got a 3% raise in a year when inflation was 4%, however, your standard of living actually decreased by 1 %.

Inflation does the most damage to retirees and those living on a fixed income. Typically, they're more dependent on income from their investments than people still collecting a regular paycheck.

Some investments fare better than others

Your real rate of return on an investment is the amount left after inflation is subtracted. Real rates of return give you a more realistic idea of how much you'll actually have available to spend.

When you look at long-term returns for stocks, bonds and cash-equivalent investments after they re reduced by the inflation rate, you'll see that stocks did the best job of keeping ahead of inflation.

How to protect yourself from inflation?
Consider the following strategies for inflation-proofing your portfolio:

Start investing as soon as you can to take advantage of the power of compounding.
Seriously consider investments with a track record of beating inflation.
Talk with your financial advisor about an investment plan tailored to your personal needs.

Happy Investing

Vinod Jethmalani.

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Oil & Gas Sector

Oil & Gas Sector:
The oil and gas industry in recent years been characterized by rising consumption of oil products, declining crude production and low reserve accretion. India remains one of the least-explored countries in the world, with a well density among the lowest in the world. With demand for 100 million tonne, India is the fourth largest oil consumption zone in Asia, even though on a per capita basis the consumption is a mere 0.1 tonne, the lowest in the region- This makes the prospects of the Indian Oil industry even more exciting.

The sector is among the largest contributors to the central and state exchequers in India. Its share US$13.58 billion. Driven by a boom in the automobiles sector, demand in the Indian oil sector has been growing consistently.

You can look in for investing in RIL, ONGC and GAIL with a long term perspective.

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Profit booking expected from tomorrow`s high level.

``It`s a well known fact that the market was cheerful due to the fact that government had won the confidence motion, also taking cues from low oil prices and global markets. Surprisingly the market was able to sustain at higher level without any profit booking, and this was somewhat a surprise element. Anyhow in the daily charts the market entered into the over bought zone. So one can probably expect some profit booking or weakness from the tomorrow`s high level,`` said technical analyst, Suresh Iyer.

``The Nifty has support levels at 4,442, 4,408, 4,361, 4,352, and 4,273 and resistance stands at 4,532, 4,561 to 4,586 and 4,646,`` Iyer added.

For tomorrow, the strategy should be to watch for an intial hour, and subsequently the short term traders should book profits, Iyer adviced.

With regard to the performance of sectors today Iyer commented, ``Banking and power sectors were out performers, but participation was seen from all sectors. Mainly Reliance, Reliance Communication, State Bank of India, ICICI bank and BHEL contributed towards the rally.``

Source: - Iris.

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Sensex nears 15k mark.

>> Wednesday, July 23, 2008

Sensex continues to trade in positive terrain and has touched one month high, nearing 15,000 mark. The 30 share Index has gained 844.24 points to touch the high of 14, 948.44 during the day. Heavy buying interest can be seen across the board.

Currently the Sensex is trading up 820.88 points, or 5.82%, at 14,925.08. While the broad-based NSE Nifty climbed 234.85 points, or 5.54%, to 4,474.95. (2.39 pm)

Overall market breadth has been positive. Out of the total 2,689 shares traded at BSE, 2,245 advanced, 391 declined while 53 remained unchanged.

All sectoral Indices are trading in positive, led by BSE Bankex which surged 9.97%. The other gainers were BSE Power and BSE Realty which rose 8.38% and 8.28% respectively.

Biggest gainers in the 30-share index were Reliance Communication (12.96%), BHEL (12.53%), ICICI Bank (12.20%). Reliance Infra, HDFC, HDFC Bank and SBI were also other gainers,

Except Cipla which declined 0.99%, there were no other losers in the Sensex.

Source: - Iris

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Market fate depends on outcome of confidence motion.

>> Tuesday, July 22, 2008

Technical analyst, Vishwas Agarwal said, ``Tuesday is very important day for Indian politics as no one knows the result of confidence motion. Hence market fate is totally depended on the confidence motion outcome.``

Agarwal advised investors to wait for the result of confidence motion and not to enter the market untill the fate of nuke deal is known, as it is dangerous to step in the market now.
Source: - Iris.

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Market is likely to remain choppy tomorrow.

>> Monday, July 21, 2008

Alex Mathew, head research centre -Geojit Financial Services said, ``Today we had seen a subdued market turning into a bull lead market on the back of huge short covering by FII`s and hedgers with defensive sectors like Pharma and FMCG stocks along with the beaten down sectors like banking and realty sector stocks leading the rally. IT stocks were down because of decline in frontline IT ADR price while profit booking was seen in capital goods stocks.

In the morning session markets remained subdued as the uncertainty in the political front was prevailing. The investors were covering their short positions on Nifty on rumors that UPA government may win the vote of confidence as they expect an unexpected addition to fill their quorum. If the UPA government wins the vote of confidence, we may see some reforms being implemented prior to the elections which were on hold since the UPA government came to power.

Nifty has immediate support at 4,125, 4,115 while resistance is there at 4,225, if breaks this level then we may see huge short covering which may take Nifty towards 4500 levels. The best strategy to adopt at these levels will be buy two lots of Nifty at the money call options and hold one lot of Nifty put options.``

P. K. Agarwal, president, research, Bonanza Portfolio, said ``Indian markets saw buying interest continuing last week`s strong close. As the UPA`s Vote of confidence debate began in parliament, some weakness was seen in the markets.

Nifty went to low of 4072. But during the last hour of trade buying returned, short covering took the markets further up. Nifty touched a high of 4168 and closed near the high at 4159. Nalco, Hero Honda, Cipla, Maruti and Banking sector were up.

Whereas, Satyam, BPCL, Ambuja Cement, HCL tech and IT sector were under pressure.

Market is likely to remain choppy tomorrow as voting on trust vote is to take place.A sharp rally can emerge if Govt. wins the trust vote. On upside 4200/4220 can be resistance levels. On downside 4060 can provide support.

Investors may start buying in small quantity in case UPA govt. survives.``

Source: - MyIris

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Weekly Stock Market Forecast - 21st to 25th July.

>> Sunday, July 20, 2008

The week gone by began on a subdued note and the indices continued to extend their losses, hitting a new 15 month low during on account of heavy selling across sectors. This unabated selling intensified as Fitch Ratings revised the outlook on India’s long-term local currency Issuer Default Rating (IDR) to Negative from Stable, against the backdrop of expected worsening in the fiscal position of the government in FY09. To put things in perspective, according to EPFR data, India-dedicated funds witnessed an outflow of USD 944 million in the month till 9 July 2008 which ranks amongst the highest redemptions faced by any country-specific funds.

However, later in the week, thanks to the steep correction in crude oil prices which fell close to USD 16 per barrel in three trading sessions and lower than expected inflation numbers at 11.91%, market sentiments were further boosted. Resultantly, the markets recouped all its losses of the week and the Sensex rallied over 1,000 points in the last two trading sessions, registering one its fastest up-move in recent times.

The global markets too registerd impressive gains with the Dow Jones Industrial Average gaining over 3.5% during the week followed by Nasdaq and S&P 500, each gaining 1.95% and 1.7% for the week.

Though a big positive for the market this week was the first sign of oil prices cooling off, the Federal Reserve had already cautioned against growth and inflation risks which are straining the US economy. The same was also reflected in the lower than anticipated volume growth in the quarterly numbers announced by the Indian IT companies.

Adding to the apprehension, the recent downgrade in the ratings is expected to put additional pressure on the rupee which has depreciated by over 10% since the first week of May 2008. Political uncertainty too looms largely as the Government prepares itself to prove its majority in Parliament early next week.

Thus for the week forward, the markets are expected to trend sharply on either side till the confidence vote is out of the way on Tuesday. Thereafter, the focus will shift back to oil and if it cools off, a rally could be in the offing. However, considering the recent crisis unfolding in the US financial sector, additional write-offs going forward by these companies need to be closely monitored. Furthermore, it would be prudent to remember the oil price scenario, which could change overnight with even one untoward statement by the leadership of the US, Israel or Iran.

Investors would thus be better off exercising some caution and taking partial profits during up-moves and waiting for some of the immediate uncertainties to settle, before taking a call on the market .

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Market may fall drastically if govt. falls

>> Saturday, July 19, 2008

Next week especially Monday, Tuesday is very important from the Indian politics perspective as no one knows the outcome and in such case any big commitment can make profit or losses in market,`` said technical analyst, Vishwas Agarwal.

``The number game (272 seats) in parliament is neck to neck and the clear picture will come out only after the outcome of confidence motion,`` Agarwal said.

Agarwal expects a huge fall in market if the government falls, and the nuke deal thus getting cancelled.

Agarwal advised investors to buy only from investment perspective and not from trading perspective and be cautious if nuke deal is rejected.
Source: - myiris.com

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How long will a bear market last?

>> Friday, July 18, 2008

Author: P.V. Subramanyam

Are we in a bear market?

Well I do not know. But surely the index is a far cry from 21,000 index that we had seen earlier this year. Is this the first time that we are going through a bear market in India?

The answer is a mixed one.

It is a no if you consider that 1993, 1997, 2001-2, etc. However, there is a big difference. This is the first time when there is a huge sales force getting people to invest in equities. Business channels, Business magazines, Newspapers are all espousing the cause of investing during tough times - and SIP is the greatest invention by mankind since sliced bread.

Almost all mutual fund houses are running SIP ``schemes`` - HDFC, Templeton, are also doing their bit! The number of `SIP` sales is increasing at a brisk pace. In fact Mirae (fund house) sells a lot of SIPs internationally.

Banks are opening branches and recruiting relationship managers, branch managers, personal bankers, etc. This is surely increasing the number of people coming into the equity markets.

Maybe all this money will hold up the market - and absorb all the sales done by the FIIs. Maybe inflation will reach 17% and thus many people will realise the futility of investing in RBI bonds and PPF.

On the other hand in case you start seeing articles saying ``Did you know Mr. Mehta has got negative return in fund xyz by doing an SIP for 3 years``. This will scare people off the markets - and they will stay away for long.

There is also a big bunch of high commissioned guys (more gals) selling unit linked insurance. This market is booming. So if sales of unit linked plans, mutual funds, PMS, etc. are happening at a brisk pace, and the clients are not watching carefully, the market may not go down further.

P.V. Subramanyam.
Source: -www.myiris.com

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Investors can buy selectively in small lots.

P.K. Agarwal, president - research, Bonanza Portfolio said, Indian markets opened on a positive note. After trading flat with positive bias for first 2 hours, a nice rally developed.

Nifty went to a high of 4,110 and closed near the high at 4,092. Banking and Reality sectors were the best performers.

Buying was also seen in ICICI Bank, HDFC, HDFC Bank and Bharati Airtel.

However, IT sector, Satyam, Ranbaxy, Wipro and HCL Tech were under selling pressure.

Political event on July 22 will determinethe medium term trends of the markets.

If govt. passes the confidence vote, markets can extend this rally.

Nifty levels of 3985/4025 will provide support, while 4140/4220 could be the
resistance on the upside.

Investors can buy selectively in small lots``.

Alex Mathew Head, research centre , Geojit Financial Services said, ``Nifty has surged around 3.34%, the rally was partly due to short covering, and Nifty closed above its 10 day exponential moving average of 4004, if Nifty closed consecutively for 2 days above 4004, then we can expect further upside to nifty and Nifty may test 4500 levels, if there no major political crisis in coming days.

Nifty futures once breached 3965 and have prompted many investors to cover their shorts. Shorts were covered in stock futures like Reliance like Reliance, SBI, ICICI Bank, DLF and HDIL.

The IT sector stocks remained weak due to the fear of slowing down in US. Infosys, Wipro, TCS and Satyam has fallen heavily due to long unwinding.

The trend is positive and also the market breadth. If the government survives then the market may move up towards 4200 and 4600 in the short time of span.

Crude is weak below USD 135 and once USD 129 levels has been breached, once again it may fall towards USD 121 levels. Buy only at declines on Monday and avoid carry over positions for next day.``

Source: -www.myiris.com

Please do read our Disclaimer.

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Sensex ends up 523.55 pts, breaches 13,500 mark.

Market maintained its rally for the second consecutive day, supported by lower than expected inflation figures and weakening crude oil prices. The tremendous rally was led by banking, realty, power, oil, FMCG stocks.

BSE Midcap and Smallcap index rose 1.63% and 1.08% respectively.

ICICI Bank, HDFC, HDFC Bank, Jaiprakash Associates, Bharti Airtel, were the major contributors, which led the rally.

The Sensex ended the day with a gain of 523.55 points, or 3.99% at 13,635.40 after touching a high of 13684.27 and a low of 13093.34. The broad-based NSE Nifty gained 145.05 points, or 3.67% at 4092.25 after hitting a high of 4110.55 and a low of 3926.30.

Most Asian stocks dropped on Friday on concern of slow economic growth and oil companies dropped after the oil prices plunged further to USD 129.29 a barrel yesterday (Thursday).

Overall market breadth was positive. Out of the total 2,686 shares traded at BSE, 1,616 advanced, 980 declined while 90 remained unchanged.

All sectoral indices at BSE closed with a positive note, led by Bankex (8.05%), Realty (5.47%), Oil & Gas (4.29%), Consumer Goods (3.57%), Power (3.43%), FMCG (2.79%). However IT and Metal fell 2.57% and 0.25% respectively.

Major gainers in the 30-share index were ICICI Bank (12.05%), Housing Development Finance Corporation (9.47%), HDFC Bank (7.87%), Jaiprakash Associates (7.72%), Bharti Airtel (7.10%), and DLF (6.99%).

On the other hand Satyam Computer Services (7.51%), Wipro (3.75%), Ranbaxy Laboratories (3.26%), Tata Steel (2.43%), Infosys Technologies (2.2%), and Hindustan Unilever (0.05%) were the major losers in the Sensex.

The wholesale price index, inflation, which was released on Thursday was below market expectation. The inflation trudged vertically up to 11.91% for the week ended July 05, as compared with 11.89% in the previous week fuelled by high prices of all essential commodities

Oil prices bounced above USD 130 a barrel on Friday as buyers came back into the market after a more than 10% slide in three days. But prices are still below the record high of USD 147.27 on July 11.

Source: - www.myiris.com

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Buy in dips and book profit at sharp rise

Technical analyst, Vishwas Agarwal said, As a result of further drop in crude prices global market is somewhat relieved. Whereas in India, market is in over sold zone due to that some sectors jumped but still confidence motion on nuke deal is pending. So market will remain volatile.``

Due to announcement of corporate quarterly results, confidence motion and credit policy, there will be high volatility in market, he said.

Agarwal recommended investors to buy in dips and book profit at sharp rise.

Disclaimer: These recommendations are on a technical basis and myiris.com and the technical analyst are not responsible for any losses suffered. The analyst has no open positions in the above-recommended stocks. Such reports shall only be taken as a source of information.

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A Penny Stocks to invest for as of now.

>> Thursday, July 17, 2008

According to my knowledge L&T from CMP 2400Rs. Cannot become 4800Rs. in just 2 months. But Penny stocks have done so as many of the stocks have rallied from 2 Rs to 30 Rs in a period of one year.
At present I think a penny stocks are a must buy.
Scrip:- Facor Alloys.
BSC code : - 532656.
CMP:- Rs. 9.35
Tgt:- Rs. 17
Time Frame:- 6-8 Months.
FACOR was founded in 1956 which put the new industrial town of Shreeramnagar on the world map of Ferro Alloys.

Shreeramnagar, situated about 100 kms North of Vishakapatnam fort, on the east coast of India, became the first major producer of bulk Ferro Alloys in the country. It began with a production capacity of 45,000 tonnes per annum that met the requirement of the growing iron and steel industry in India.

Then in 1968, two more furnaces were added for Low Carbon & High Carbon Ferro Chrome products and in 1981 a 16 MVA furnace was put up for production of Ferro Silicon or additional quantities of High Carbon Ferro Chrome.

In the meanwhile, FACOR was keenly developing indigeneous technology, through its research and development department, to utilise low grade chrome ores, from its own mining leases to produce Charge Chrome. Based on its in-house technology adopted and proved to an experts committee of Government of India, in the 7.5 MVA plant at Shreeramnagar, it set up a 100% Export Oriented 50,000 tonnes per annum Charge Chrome Plant in 1983 at DP Nagar, Randia, in Bhadrak District in Orissa. Having established this base FACOR decided to add value to its own output by getting into forward integration. A sophisticated steel plant was set up at Nagpur to produce Carbon Steel, Manganese Steel, Alloy Steel and Stainless Steel.

In order to meet part of their power requirements FACOR has established two power plants of capacity 3x10 MW and 2x10 MW at Shreeramnagar and Randia respectively in 1989-90. These diesel power plants are supplied by MAN B&W Germany and are operating with heavy fuel oil (Furnace Oil or LSHS).

This of course, is not the only high point of achievement of the R&D Department. The department has for long enjoyed the recognition of the Department of Science and Technology, Council of Scientific and Industrial Research, Ministry of Steel for having developed and established processes for:

Beneficiation of low grade chrome ore
* Agglomeration of ore fines and concentrates by way of briquetting and sintering
* Production of intermediate Carbon Ferro Chrome
* Production of Magnesium Ferro Silicon
* Metal Recovery Plant of 20 T/Hr capacity established in 1994 to recover metal entrapped in slag
Facor alloy is a small company from the saraf families. Other group
companies include facor steel and ferro alloy (minning). This is a
high growth potential company with incestor friendly and transparent
mgmt. Mr Saraf is MBA from Havard. The group has big expanision plans
from the profit earned in the ferro metal business. This includes
power, infrastructure and platinum mining. Currently traded at penny
values it may become a future multibagger. It is also a debt free

We will give 2 penny stock ideas every month.
Happy Investing.

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Stocks to watch today.

>> Wednesday, July 16, 2008

Following stocks are likely to be in the limelight today, July 16.

Larsen & Toubro (L&T) plans to form a Rs 20 billion forging venture with Nuclear Power Corporation of India (NPCIL), reports Business Standard. NPCIL is in negotiations with L&T for the last few months for setting up a new venture. Shares of the company fell Rs 111.95, or 4.68%*.

Jubilant Organosys reported a robust growth in its consolidated net profit for the first quarter ended June 2008. During the quarter, the profit of the company surged 2.19 times from a year-ago to Rs 1,204 million. Shares of the company declined Rs 2.75, or 0.9%*.

Sintex Industries is said to be in race to acquire US-based industrial composite moulder, Continental Structural Plastics for around USD 70-80 million, reports Economic Times. Shares of the company slipped Rs 11.05, or 3.78%*.

Sanra Software plans to acquire a gaming company and launch two full-length animation movies by March next year, reports Business Standard. Shares of the company lost Rs 2.15, or 4.96%*.

Kavveri Telecom Products is planning to raise USD 10 million for financing its inorganic growth plans for fiscal 2009 and its capex plan of Rs 80 million, reports Business Standard. Shares of the company declined Rs 4.6, or 4.64%*.

Infotech Enterprises and Dassault Aviation signed an MoU to jointly collaborate and perform activities related to the ministry of defense, Government of India proposed medium multi role combat aircraft offset program. Shares of the company fell Rs 8.2, or 3.94%*.

Novartis India disclosed a good rise in its standalone net profit for the quarter ended June 2008. During the quarter, the profit of the company increased 29.77% to Rs 296.40 million from Rs 228.40 million in the same quarter, last year. Shares of the company declined Rs 0.9, or 0.33%*.

Rallis India disclosed a phenomenal rise in its standalone net profit for the first quarter ended June 2008. During the quarter, the profit of the company rose 2.98 times to Rs 42.30 million from Rs 14.20 million in the same quarter, previous year. Shares of the company decreased Rs 2.85, or 0.7%*.

*Closing share prices as on Tuesday, Jul. 15, 2008.
Source: - myiris.com

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Brokers` outlook: Nifty may fall below 3,800.

>> Tuesday, July 15, 2008

Alex Mathew, head - research centre, Geojit Financial Services said, ``We had seen a choppy session with Nifty ending in red at 4,039.7, losing 0.23%. The culprits for the fall today were IT counters of which Infosys, Satyam, TCS and Wipro faced heavy bull liquidation due to fear of slow down in these sectors. The situation was further dampened after the forex losses revealed by the company. This sector may face some more selling before consolidation.

The beaten down Banking sector stocks were in good demand in the weak market. Sentiment was further improved on the good quarterly numbers of Axis Bank. Private sector banks, which have already increased the lending ratio by 0.5% to 0.75%, were also supporting the uptrend.

Fall in crude, after the Iran oil well finding, helped the auto sector stock like M&M, Maruti and Tata Motors to witness good demand.

Nifty is struggling to stay above 4,000 levels. If it moves down we can expect further downtrend which will even bring down the Nifty below 3,800.
Source: - myiris.com

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Markets closes in negative amidst volatility.

>> Monday, July 14, 2008

Indian equities closed in negative amid volatility. Heavy selling activity was witnessed in Pharma, technology, FMCG, while Auto, Oil & Gas and Metal stocks gained. Midcap and Smallcap index declined 0.64% and 1.10% respectively.

The BSE Sensex opened on a negative note, following weak global cues, at 13,360.34, down 109 points from the Friday`s close.

Ranbaxy, Satyam, Infosys, TCS, HDFC, Hindalco and ACC were the major draggers.

Asian stocks dropped on Monday, led by transportation and the pharma companies. Transportation companies fell on assumption soaring oil prices will increase the cost, resulting in lower profits. Pharma companies declined after U.S. court alleged Ranbaxy Laboratories failed to meet quality controls on generic drugs.

The Sensex ended the day with a loss of 139.34 points, or 1.03% at 13,330.51 after touching a high of 13,559.36 and low of 13,269.62. The broad-based NSE Nifty closed down 9.3 points or 0.23% at 4,039.70.

Overall market breadth was negative. Out of the total 2,649 shares traded at BSE, 1,009 advanced, 1,576 declined while 64 remained unchanged.

All sectoral indices traded in negative led by BSE IT (5.94%), Tech (3.83%) and FMCG (1.46%). However, Metal, Auto and Oil & Gas advanced.

Leaders at the BSE Sensex include ONGC and NTPC, which surged over 3% and M&M rose 2.91%. SBI, Tata Steel, Ambuja Cement, Tata Motors, Reliance Infra and Cipla were among the other gainers.

Biggest losers in the 30-share index were Ranbaxy, which slumped 10.45%, Satyam and Infosys plummeted over 7% each. The other losers were TCS, HDFC, BHEL, Hindalco, HDFC Bank, Wipro and ACC.

* Q - Quote , N - News , C - Chart , F - Financials

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Inflation soars to a fresh high of 11.89% on rising prices.

>> Friday, July 11, 2008

Inflation raced to a fresh high of 11.89 per cent for the week ended June 28, 2008, on the back of surging food and commodity prices.
Food products rose 0.3 per cent and primary articles were up 0.9 per cent. Likewise, vegetables were up 3.7% and chemicals and products rose 1.2 per cent. However, iron and steel fell 1.4 per cent and fuel remained unchanged.

Inflation trend continues to remain higher and is expected to touch 11.9% next week ended July 04, 2008.

Inflation had already soared to 11.63 per cent for the week ended June 21, 2008. Sadly, however, there is no respite in sight from this soaring inflation. Finance ministry officials have already said that inflation could inch up to 13 per cent before making a slow descent.

Experts too are of the opinion that double-digit inflation is here to stay for some more time, but could trend down in September. With prices of crucial commodities like steel likely to rise further, inflation is expected to stay over 11 per cent before it peaks around September, they say.

It is estimated that steel and steel products (used in industries like auto, housing, white goods, capital goods etc) contribute almost 21 per cent to inflation. Cement prices are expected to remain soft, thanks to capacity addition.

It is the 20th consecutive week that the inflation rate has been above 5.5 per cent, the central bank's target for the end of the fiscal year in March 2009.

On Tuesday, Finance Minister Palaniappan Chidambaram said the government was relying on monetary policy to cool demand and calm prices. Last month, the central bank raised its main lending rate by 75 basis points and increased banks' reserve requirement by 50 basis points to contain inflation expectations. Its next scheduled review is on July 29, but it can act before then. Market is expecting a further repo rate cut of 25bps.

The wholesale price index is more closely watched than the consumer price index (CPI) because it includes more products and is also published weekly. The CPI is released monthly.
Source: - ET

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24 x 7 Chat Room.

Chat Room 24 x 7.

Chat rules - Plz dont spam.

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Equity market still the favourite for investors.

The equity market is in the doldrums and a recovery looks some way off. But most institutional investors appear to favour this risky asset class over relatively safer fixed income debt instruments. At least, that seems to be the case among holders of foreign currency convertible bonds (FCCBs), who have decided to exercise the option of converting their bonds into shares, instead of redeeming the investment.

Leading foreign investors such as Goldman Sachs, Swiss Finance Corporation, Deutsche Bank and Lehman Brothers are among those who have chosen to convert their FCCB holdings into equity. This would help ease some redemption pressure on the respective companies which otherwise would be required to borrow funds from the market to meet their repayment obligations, say investment bankers. In some cases, the holders have gone for conversion into equity, though the market price is lower than the conversion price.

In the past, many corporates raised huge funds through FCCBs as the cost of borrowing is much lower than domestic funding options like debentures and loan from banks and financial institutions. FCCBs are issued in foreign currency with an option to convert them in shares of the issuer company. They are quasi-debt instruments, which carry coupon and have tenure between five and eight years.

“Some of the companies where conversions have happened could be financially sound and paying good dividend. Investors would not mind holding shares of such companies for a long period, irrespective of movements in their shares. Again, FCCBs do not yield much returns as coupon rates are low,” said Mayank Dalal, head of investment banking, Centrum Capital.

Recently, KLG Systel offered 3,27,750 shares to Deutsche Bank on conversion of FCCBs worth $3 million issued in 2007. The shares, which account for 2.8 per cent of the company’s equity, were issued at a price of Rs 400 per share against the market price of Rs 585 on the day of allotment (May 26 ‘08). The stock, however, has been on a decline since the conversion, ending at Rs 377 on Thursday, a 6 per cent discount to the conversion price. KLG System company secretary Jayant Gupta told ET that the company had issued FCCBs for a total amount of $ 22 million, out of which $ 16 million are outstanding as on Thursday. The bonds will mature in 2012.

In another example, Jubilant Organosys has converted FCCBs worth $19 million in six lots between February 13 and June 30, 2008. A clutch of investors like Swiss Finance Corporation, Copthall Mauritius, Grants Investments and CQS Master Fund has been allotted close to 30 lakh shares, or 2 per cent of the company’s equity, at Rs 273, while the share price moved between Rs 314 and Rs 381 during the period. Jubilant Organosys shares closed 1 per cent down at Rs 308 on Thursday. Among other companies, GTL Infrastructure and Jain Irrigation Systems have issued shares to Goldman Sachs while Micro Technologies converted some FCCBs of Lehman Bros into equity.

Some investment bankers feel the intention behind FCCB holders exercising conversion option in the choppy market could to be to avail an exit option before the market price falls below the conversion price. Shares of two companies — GTL Infrastructure and KLG Systel — are currently quoting at a discount to their respective conversion prices.
Source: - ET.

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Infosys Q1 net profit up 22.76% YoY, 6.76% QoQ

Infosys Technologies Ltd on Friday said it has posted a net profit of Rs 1,262 crore for the quarter ended June 30, 2008, on standalone basis, up 22.76 per cent compared to Rs 1,028 crore for the quarter ended June 30, 2007. Total income increased 22.09 per cent to Rs 4,647 crore in the April-June quarter of 2008, from Rs 3806 crore in the year ago quarter.


The IT bellwether’s June quarter net profit was up 6.76 per cent from Rs 1,182 crore in the January-March quarter. Net sales for the first quarter grew 6.63 per cent against Rs 4,235 crore in the immediate preceding quarter.

Consolidate Basis

Infosys reported for the quarter ended June 30, 2008, a net profit of Rs 1,302 crore, up 4.24 per cent from Rs 1,249 crore in the preceding quarter ended on March 31, 2008. Net sales stood at Rs 4,854 crore for the April-June quarter, against Rs 4,542 crore in the March quarter, a growth of 6.86 per cent.

Tax Provision

Tax provision for the quarters ended June 30, 2008 and June 30, 2007 includes tax reversal of $7 million and $13 million, respectively. Excluding this reversal, EPS for the respective quarters would have been $0.53 and $0.44; YoY growth of 20.5 per cent.

Indian GAAP

Q1 revenues grew by 28.7 per cent year on year; sequential growth 7 per cent


Q1 revenues grew by 24.5 per cent year on year; sequential growth 1.1 per cent

Outlook for Q2

The IT major has guided for consolidated revenues of $1,215 million to $1,225 million for the quarter ending on September 30; year on year growth of 18.9-19.9 per cent.

Consolidated earnings per American depositary shares is expected to be in the range of $0.55 to $0.56; YoY growth of 14.6-16.7 per cent.

Outlook FY09

Infosys estimates consolidated revenues in the range of $4.97 billion to $5.05 billion; YoY growth of 19-21 per cent.

Consolidated earnings per ADS is expected between $2.32 and $2.36; YoY growth of 14.3-16.3 per cent. This includes tax reversal of $7 million in fiscal 2009 and $30 million in fiscal 2008. Excluding the tax reversal, the EPS is seen at $2.31 and $2.35 for the year ending March 31, 2009; YoY growth of 16.7-18.7 per cent.

Q1 Highlights

Consolidated revenues $1,155 million, up 24.5 per cent from same quarter last fiscal

Earnings per ADS increased to $0.54 from $0.46 last year, YoY growth of 17.4 per cent

Company, subsidiaries added 49 new clients during the April-June quarter

Gross addition of 7,182 employees (net 3,192)

Company had total 94,379 employees on its rolls as on June 30, 2008
Source: - ET

Infosys Technologies Apr-Jun, 08
Amount(Rs. million)
Interest Earned/Net Income from sales/services
Cost of Sales/Services
Software Development Expenses
Gross Profit
General Administrative Expenses
Selling and Distribution Expenses
Operating Profit Before Interest
Exceptional Item
Operating Profit After Interest and Exceptional Items
Other Income
Profit (+)/ Loss (-) from Ordinary Activities before Tax
Net Profit (+)/ Loss (-) from Ordinary Activities after Tax
Extraordinary Items
Net Profit
Minority Interest
Share of Profit & Loss of Asso
Net Profit after Mino Inter & Share of P & L
Any Other
Income Attributable to Consolidated Group
Cost of Investment In Sub
Equity Capital
Face Value (in Rs)
EPS before Extraordinary items (in Rs)
EPS after Extraordinary items (in Rs)
Basic EPS after Extraordinary items
Diluted EPS after Extraordinary items
Number of Public Shareholding
Percentage of Public Shareholding

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