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February 13, 2011
reliancegold
Reliance Mutual Fund is launching Reliance Gold Savings Fund which intends to invest in units of Reliance ETF. We know about many Gold ETFs and what is this Reliance Gold Savings Fund all about?
This is a fund which invests in already existing Reliance Gold ETF to the extent of at least 95% of the corpus size, and becomes a fund of funds which is first in its kind in India.

The Fund allows the investors to invest in Gold the through physical mode and thus makes it convenient for investors who do not have a broking account or a demat account. The fund seeks to make the investment in gold in a more convenient manner by allowing investment through systematic investment and transfer plans.The fund focuses on providing the returns as provided by Reliance ETF, which invests 99.5% of its portfolio in bullion.

NFO Features:
Open Ended Fund of Funds.
Issue open:14 February, 2011 -28 February, 2011.
NFO Offer Price: Rs.10 per unit.
Minimum Application Amount : Rs.5,000.
Entry Load: Nil.
Exit Load: 2% - if redeemed 1 year from the date of allotment of units.
Options: 1.Growth 2.Dividend (Dividend Pay-out and Dividend Re-Investment)
Also :SIP/STP/SWP/Auto switch/ Trigger facility available.

Gold prices are in an upswing in the recent times and in the year 2010 gold prices were noticed to have touched it highest in the last two decades.For the tenth year in a row, gold prices gave positive returns in 2010. Investors across the globe have started investing in gold in order to hedge against inflation and currency risk, apart from investing in gold as a separate asset class. Hence one can invest in this fund but with a limited exposure of not more than 5-10% of one's portfolio.

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January 10, 2011
trading-formula
Do Technical Analysis and Charting Work? Can Technical Analysis and Charting make me money? Is there any Secret Formula for Success in Trading? These are the questions which are always on every trader's mind.

There are many documented success stories of individuals who win big year after year, using technical trading methods exclusively.There's Ed Seykota, who multiplied his clients’ accounts by 2500 times(250,000%) in about ten years and Michael Marcus, who parlayed a $30,000 initial stake into $80 million.

Another famous trader, Larry Williams, who won a national trading competition in 1987 by multiplying $10,000 into over $1,000,000 in one year. He subsequently wrote a book titled, How I Turned $10,000 Into $1 Million in One Year.

Is there any Secret Formula to make such money? Did these gentlemen discover the secret to riches? Not according to them. Each of these traders said they use technical methods, almost exclusively. If you read their interviews, you will find that each trader said basically the same thing - "develop a trading system that matches your trading style,and maintain discipline in sticking to your system".

According to them, the Formula for Success in Trading is:

1. Find a trading style that matches your personality.
2. Develop a system according to the trading style.
3. Stick to the system (discipline).


Every successful trader develops a trading style that matches his or her personality. You, too, have a natural inclination towards your own, personal style. And whatever your style, it is important that your trading match it.
  • You may be very short-term oriented, wanting to capitalize on quick, five-to-ten-day moves to make many small profits over a long period of time.
  • If you are less active or more sensitive to commission costs, you may want to trade every six weeks or so, and to set wide stops so that your trades have breathing room.
  • You may want to focus on the general market trend, or may feel more confident trading short-term opportunities against the trend. 
Hence, almost any method will work, if it matches your personality and incorporates good money management principles. So, select a method which suits you well , trade accordingly and avoid looking for Trading Tips.
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January 04, 2011
market-outlook
The Sensex didn't perform as well in 2010 as it did in 2009. In 2009 the Sensex returns was 77% and in 2010 it was just about 18%. But some of the individual sectors performed better than the benchmark index. The top sectoral perpformances came from the consumer durables with a spectacular 64% return, followed by the auto sector and the healthcare sector which posted an impressive 33% returns each.The biggest loser was the realty sector,down about 25% and the power sector fell by 7%.

So, going forward, what is the outlook for equity markets and other investing opportunities in 2011? One of the most important things to look at for 2011 is where to invest. Should one choose Stocks, Bank FDs or Commodities like precious metals?


Equities: There is no doubt markets are fairly valued on FY11 Sensex EPS numbers and Investors entering at current levels have not big upside left. But for a longer time horizon , there is for scope for making gains, based on FY12 numbers. The Sensex EPS estimates are between 1250-1290, based on various brokerage estimates. Based on 5 year average P/E for Indian markets, the Sensex has targets of about 21250-21900. Hence,investors can enter only on corrections to buy fundamentally sound large and mid cap stocks and the sectors to watch out are Banking, Capital goods,Midcap IT and Metals. So one has to be very stock specific to make better returns than the index. Keep watching the Stock Watch section for more stock specific updates.

Fixed Income: Fixed Income returns are to become more robust. The last few years' return in fixed income assets has barely been able to match inflation. But this is set to change, since interest rates are on the rise and Bank FD rates ( 9 to 9.5% p.a) reflecting the same. Hence one can expect higher returns in Bank FDs than the past couple of years.

Gold and Silver: While the stocks have gone up reasonably, the precious metals - gold and silver - have massively outperformed them.However, will silver and gold continue to outperform stocks like it has done in the previous year? It is most likely will continue to do well but Gold unlike other investments acts as an insurance policy against inflation.Hence 10-15% is the maximum exposure one could have exposure to Gold and Silver and not go overboard on this.

Hence, investors can take cue from the above mentioned points and depending upon their risk profile thye should take their decisions.

Be a wise investor !
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December 11, 2010
masterandstudent-psu-banks
Punjab and Sind Bank, a PSU Bank, is coming out with an IPO of 4cr shares of Rs.10 each in the price band of Rs.113- Rs.120. The main objective of the issue is to augment capital base to meet future capital requirements and other general corporate purposes.PSB is a mid-sized bank with a network of 920 branches, serving over 5m customers.

The bank has over 100 years of banking experience and established relationships with customers, including the Central and State Governments and public sector enterprises and their presence is predominantly in Punjab and other north Indian states.

The revenues for FY10 stand at Rs.4326cr and PAT at 506cr , resulting in an EPs of Rs.27. The book value of the bank is at Rs.105, while the most of the mid-cap PSU banks are quoting between 1-1.5 times book value, the pricing of the issue seems okay. Medium to Long term investors can go for this issue.

Details of the issue:

Issue Open: Dec 13, 2010 - Dec 16, 2010.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs. 113 - Rs. 120 Per Equity Share.(5 % discount offered to retail investors)
Market Lot: 50 Shares.
Listing at BSE and NSE.
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December 08, 2010
Despite falling last week on the heels of a poor jobs report—United States unemployment rose to 9.6% and nonfarm payrolls did not rise as highly as forecasted—the U.S. dollar began to firm up against both the euro and the yen. Federal Reserve Bank Chairman Ben Bernanke announced in an interview on 60 Minutes that the latest quantitative easing project might go beyond the original $600 billion projection. These factors suggest, then, that even with this short-term gain, the U.S. dollar will continue to weaken, thus creating uncertainty and skittishness on the part of traders as the market finds its way. Long-term positions, then, could be favorable for those trading against the dollar, though this will be a tough bet.

As euro zone finance ministers struggled to protect the euro from the U.S. dollar, Japanese exporters had begun to sell the euro so that they could buy the yen while it remained above 111.000. This happened after the U.S. dollar gained on the yen to reach 82.85 yen over 82.58 yen last week. Likewise, the euro fell on the morning of the 6th of December to 1.3363 U.S. dollars, a slight drop from 1.341 of last week. Only time will tell how these pairs will shift throughout the week, given the upcoming talks regarding Ireland's aid package woes, as well as whether or not the European Union will revamp its budget rules.

So what is the sensible move for early December? Although it's a bit stingy right now, the market could favor the euro after the Irish budget passes and the European Union's aid package goes through for Ireland, though euro investor confidence will slow after that, based on the recent Sentix report that dropped noticeably after a nice rise in November.

This drop in the confidence index could push EUR/USD to a short-term resistance around last Friday's high of 1.3438 or thereabouts, in which case traders might consider selling for a tidy turn around if they can afford it. The recent sharp downturn happened quickly, however, so there's the possibility that corrections might occur in the next few days, so adjust your stop-loss accordingly so you don't get caught out in the open and unprepared.

Those of you following the EUR/USD trends, the job situation in the United States, and Bernanke's quantitative easement plan might consider going on to further do some in-depth research on this matter. Either way, it's definitely an interesting time for the U.S. dollar, the euro, and the yen, which will make for some exciting trading these next few months.

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December 04, 2010
capital markets
Currently, Indian Capital Markets swinging to the tunes of Global markets & Scams and the Sensex is trading between 19k and 20k, after hitting a 3 year high of 21k a month ago. What does this all mean to an individual investor and what should he do at this point of time - buy, sell or hold?

Before we come to any conclusions, let us check out some of recent happenings in and around us. Recently markets have been hit with many scams, some of them directly impacting the markets, like the housing loans and Global events like European crisis, Korean shoot outs and other similar events. These events are causing substantial swings in the markets and the much talked about US Fed’s QE2 program is not having much impact, either.

Currently Sensex at 20k, trading at 17.1 x FY11E EPS and 14.6X FY12E EPS, which is at fair valuations. The strong FII inflows and strong earnings growth are providing support to the Indian markets' valuations at 15-18 x  FY12E EPS, above its 12-15x historical range, which would mean the Sensex in the range of 15-16k.The P/E expansion in multiples could be led by (1) continued strong FII inflows, (2) positive macro-economic outlook and (3) strong earnings growth, which could lead the markets higher.

To sum up, there is no doubt that the markets are at fair valuations, but the factors mentioned above could take the markets further up. Hence, existing investors could hold and ride the wave and anyone who wants to enter now, can participate in the current rally by taking the SIP method of investing in mutual funds.New investments and big ticket investments could be made only when sensex is available around historical range mentioned above.

After all investing is not that easy,  isn't it?
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November 21, 2010
moil-ipo
Manganese Ore India Limited (MOIL) largest producer of manganese ore and a 'Mini Ratna' PSU, is coming out with an IPO of 33,600,000 Equity Shares of Rs.10 each in the price band of 345-375. MOIL accounts for approximately 50.0% of India's total production of manganese ore and the company hopes to maintain its leadership position in the manganese ore market.

MOIL operates seven underground mines and three opencast mines to produce more then 1m tonnes of manganese ore. The company is well positioned to capture the growth potential of the Indian steel industry, due to its track record and strategic location of the mines. The key risk is that the Manganese ore and alloy industry has historically derived demand from the steel industry and hence is directly exposed to the volatility and the cyclicality of the global steel industry.

Details of the issue:

Issue Open: Nov 26, 2010 - Dec 01, 2010.
Issue Size: 33,600,000 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs.340-375 Per Equity Share.
Listing at BSE and NSE.

The EPS for the year FY10 stands at Rs.28 and at the higher band of Rs.375 the company would be trading at 14 P/E, which is well priced. There is no direct comparable listed peer with which the stock can be compared with other than NMDC which trades at at 25 P/E.

With the expectations of robust growth in the domestic steel production, demand for manganese ore is likely to increase during the next few years. The domestic manganese ore demand to grow at a CAGR of about 9% during the next 2-3 years.

After the stupendous success of Coal India IPO, the MOIL IPO too, will evoke good response from institutional and retail investors. Hence, long term investors can apply for this issue and not for listing gains alone.
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