Finance Minister P Chidambaram on Thursday said he is not expecting interest rates to rise following the Reserve Bank of India’s (RBI’s) decision to hike banks’ mandatory reserve requirements.
To tame inflation, the RBI on Tuesday raised the cash reserve ratio (CRR), the money banks have to keep as deposit with the central bank, by 0.25 percentage points to 8.25 per cent. India’s wholesale prices-based inflation rate has been hovering over 7 per cent for the last few weeks.
“By and large, banks have welcomed and appreciated the stance of the RBI. They (banks) were quite happy that only the CRR had been hiked and policy rates had been left untouched,” Chidambaram said after a meeting with state-owned bank chiefs.
“They (banks) do not expect the CRR hike to impact interest rates. So, going forward in the reasonable future I do not expect any increase in interest rates by state-run banks,” he said.
Chidambaram, who reviewed the performance of the public sector banks, said agricultural loans grew by 23.33 per cent, while loans to small and medium enterprises grew by over 36 per cent during 2007-08.
Personal loans increased by 16.3 per cent, of which, housing loans grew by 16.44 per cent and automobile loans by 23.01 per cent.
Chidambaram also expected banks to return a better performance in 2008-09. The RBI has projected 20 per cent growth in advances and 17 per cent growth in deposits for 2008-09.
Gross bad debt of the public sector banks declined to 2.17 per cent in 2007-08 from the previous year’s 2.7 per cent.
Chidambaram also urged banks to focus on debt-swap schemes, where they offer loans to farmers to pay off local money lenders.
The finance minister also underlined the need for banks to lend more to persons of non-farming professions such as artisans, barbers and cobblers in rural areas.
He urged them to review their derivative portfolios and make sure customers understand them fully. Chidambaram expected loans to the housing sector to increase without impacting interest rates as the RBI had changed housing loan portfolio norms.
Thursday, May 1, 2008
No hike in Interest rates, says Chidambaram.
Monday, April 28, 2008
Downward trend of Stock Market turns Mutual Funds into net sellers now
As stock markets is continuing in its bearish onslaught, domestic mutual funds are turning net sellers. So far, up to March 18, they have been net sellers to the tune of Rs 1,515 crore, as per the data on mutual fund transactions released by SEBI.
The development comes in the wake of their waning interest in taking up fresh investment commitment with the mutual fund industry’s net purchases coming down to Rs 513 crore in February from Rs 7,700 crore in January.
Analysts see this as a natural reaction to the market trend as during March alone the pivotal index of the BSE, the Sensex, fell by 10.09 per cent. During January-February it declined by more than 13 per cent.
In the current market anyone would be cautious. One is not sure at what level the market will stabilize. There is hardly any positive clue coming from any quarter. So some selling is expected.
RELIANCE POWER TO ISSUE BONUS SHARES IN THE RATIO OF 3:5
Mumbai, April 25, 2008: Reliance Power Limited today announced date of closure of its Register of Members from Tuesday, June 3, 2008 to Thursday, June 5, 2008 for the purpose of determining the entitlement of shareholders to the Bonus shares to be issued by the Company.
As approved by the shareholders of the Company, Reliance Power will issue Bonus shares in the ratio of three new equity shares of Rs 10 each for every five existing equity shares of Rs 10 each held, to the public shareholders of the Company.
The bonus shares will be issued to those shareholders whose names appear in the Register of Members as at the end of the close of business hours on Monday, June 2, 2008.
Gray Market
Definition: an unofficial market in which goods are bought and sold at prices lower than the official price set by a regulatory agency. Also Gray Market is an unofficial market where new issues of shares are bought and sold before they become officially available for trading on the stock exchange. The sale or import of goods by unauthorized dealers.
Trading in gray or "when-issued" markets can provide a good indication of demand for a new issue. In some parts of the world "gray" is spelled "grey". In this case, items that were manufactured abroad and imported into a country without the consent of the trademark holder would be a gray market good.
Gray Market Merchandise
American consumers are purchasing bargain priced merchandise that was originally not intended for sale in the U.S. marketplace, in increasing number
This "grey market" merchandise ranges from perfume and watches, to electronic items and cars, and is usually sold through the mail, at specialty stores, discount outlets and at some larger retail outlets.
While not usually illegal, grey market merchandise can result in unexpected disadvantages to the buyer, the Better Business Bureau warns.
In many cases, the disadvantages may outweigh the cost savings. For example, grey market goods may not be covered by the manufacture's warranty or if the product does come with a warranty, it may not be valid in the U.S. If such a product breaks or is defective, the manufacturer may not be willing or even required to rectify the problem. Other disadvantages may be nuisances; for example, instructions may be printed in a foreign language.
In some instances, the product may not comply with U.S. laws and may require costly adjustments prior to being used legally within the U.S. Grey market cars, for example, may not comply with federal pollution and safety standards, and thereby will require a number of costly alterations in order to become legally titled and licensed in the U.S.
The BBB recommends that before you buy a grey market item, decide whether any potential savings are worth the trade off. Have the merchandise inspected by someone knowledgeable about the product. In the case of cars, you can check the vehicle identification number with the manufacturer's authorized representative. Keep in mind that these goods are seldom eligible for manufacturers' price rebates, may be models no longer available in the U.S., and may require work not offered by the U.S. distributor.
Saturday, April 5, 2008
Share Market Analysis - Two sides of a coin
A very good article. One must ponder over the points mentioned in the article. Please read till the end because every coin has 2 sides. And who says that there is gain on One side and loss on the other. You can take benefit from both the side.
It good to read if you are investing in share market….If you had bought 100 shares of Wipro at the rate of Rs 100 per share in 1980, they would be worth Rs 200 crore today. If you had invested Rs 10,000 in Infosys shares in 1992, you would be richer by Rs 1.5 crore today. If you had invested Rs 1,000 in Ranbaxy in 1980, you would have got Rs 1.9 crore today! And not so far back in time, if you had invested Rs 40,000 in Unitech during the lows of 2004, your bank account would see a whopping Rs 1.1 crore today!
Some guy out there knew this. Today, he is laughing all the way to the bank.So what was the magic strategy that made this guy so rich? Simple.He bought, he waited. Waited for all those share splits and bonus declarations. Waited for the company to grow from strength to strength. Waited even when the shares teetered only to recoup in a few years' time. Just as a child takes time to realize his/ her full potential, so does an investment need time to reward you handsomely. Sure, the times are uncertain now. But let that not scare you to sell for a loss.
Patience pays. Look back. You will notice that selling in such times makes no real sense in the longer run. Those who didn't sell their stocks during the May 2006 crash but had, in fact, bought more would be a very happy lot today. Investing long term is like that: it rewards you handsomely. Always. Exercise patience. As champion broker Rakesh Jhunjhunwala said recently, if you want to learn more about patience, get married! The way I see it, you don't really need to get married to learn patience. Just look back in time. All these stocks have been multi-baggers for those who stayed on for the long term. They would have fetched you unimaginable returns today.
Do your research. You will learn a thing or two about making crores from a few lakhs. You can still make those crores! Turn a deaf ear at the sceptics; look at beaten down sectors.
Consider aviation and hospitality. Today, aviation stocks are way below their lifetime highs. But, as India grows, so will travel. And within the next three years, they will reward you handsomely. Most people ignore aviation and hotels. And that is why they merit my attention. Pick up stocks that others are ignoring. People who create wealth do things that others do not. I am sure you could make crores if you do too!
And the response to this..........
You have stated only one side of the long term investment story citing Infosys, Ranbaxy and Unitech. That too u have mentioned the investment year as 1980/1992. Now I would like to state that the other side of the investment story pertaining to the year 1992 to date. Take K - 10 stocks. e.g. Square D Software, Himachal Futuristic, Global Tele, Silverline, Pentafour software, SSI etc., If any one invested their money in these stocks during tech boom particularly the period year 1999-2000 and waited till date how many folds their money increased? Everybody lost the principal, interest and ended with huge loss. For their patience they received only mental worries.
Therefore my point is don't wait for longer time. If your investment gives you at least 20/30 percent just come out and invest in some other counter. Select the scrip on the basis of good track record of the company. Invest during correction. Once you book the profit in one company immediately don't switch over to another company blindly. Study the scrip. Take technical look also. It is always good to show you an idea of support and resistance to you.
All the existing and new investors are please be careful on the market.. Don't give weightage to one side of the story. Each coin has two sides. so see , think and decide it.
Anonymous
Monday, March 10, 2008
Steps to survive a Stock Market Correction
Seven ways to survive the Stock Market Correction
Global markets 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 Looking 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.
Thursday, February 21, 2008
Stocks of BSE Sensex
Which stocks comprise of the BSE Sensex?
The SENSEX Index is composed of 30 major Indian stocks and regarded as the country's premier stock market index. Theses stocks are:
ACC
Ambuja Cements
Bajaj Auto
BHEL
Bharti Airtel
Cipla
DLF
Grasim Industries
HDFC
HDFC Bank
Hindalco
Hindustan Lever
ICICI Bank
Infosys
ITC
Larsen & Toubro
Mahindra & Mahindra
Maruti Udyog
NTPC
ONGC
Ranbaxy Laboratories
Reliance Communications
Reliance
Reliance Industries
Satyam Computer Services
State Bank of India
Tata Consultancy
Tata Motors
Tata Steel
Wipro
