MEGHA INVESTMENTS AND RESEARCH, Indian Stock Market, Sensex, Nifty, Stock Tips

World Steel Production up 6.8% in 2011

2012-01-28T00:01:00.001-08:00

World steel production rose 6.8% last year to a record 1.53 billion tonnes, the World Steel Association said, .
Growth was 8.9% in China, 7.1% in the US, 1 per cent in Germany, 5.7%, in India and 17 per cent in Turkey, the Brussels=based group said in a report on its website on Monday. While, Japan 's steel production fell 1.8%.

UK unemployment rate rises to 16 year high

2012-01-26T22:09:00.000-08:00

The economically troubled UK's unemployment rate has rise in November at 8.4% as per Office of National Statistics figures, which was highest since January 1996. The unemployment rate is calculated based on International Labour Organisation methods.

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2012-01-26T20:20:00.000-08:00

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Dow Jones analysis:New high possible in next 2-4 years

2012-01-25T10:01:00.000-08:00

Dow Jones analysis:New high possible in next 2-4 years

The Dow Jones index made recent bottom of 6470.11 on 6 march 2009 on the back of Subprime housing crisis and Lehman brothers bankruptcy.

The level it made on 2 may 20011, 12807.36 must cross to blast above to touch and cross life time high of 1 oct 2007, 14198.10 lifetime high.

It has crossed 12724.41 made on 21 july 2011, on on jan 23, 2012 and made high of 12764.41, but failed to close above the 12724.41 level and closed at 12709.20.

So now Dow jones has to cross and close above first 12724.41 and then 12807.36 made on 2 may 2011, a daily close above this will confirm dow Jones up move upto 13412 and weekly close will likely confirm the breach of the all time high made on 1 oct 2007 14198.10 and rise above it.

Dow jones recently made low of 10404.49 on 4 oct 2011, but did not close on low made on the day and closed in positive (green candle) on the recent low day.

It consolidated between 11500 and 10500 in august, September and October months of 2011 before ultimately breaking above in the last week of October 2011.

Encouraging economic data, the decline of unemployment rate to around 8% and the upcoming presidential elections has helped the flow of positive fundamental news. However, any slowdown in USA economy, worsening of European Union debt crisis situation and a imminent Chinese slowdown can change the trajectory of the Dow jone index.

Fundamental news flow and moves which change the technical set up of the chart. The index also need to cross 13112 to give final indication for upmove as explained above. While the 10510 support must not be breache. If Dow jones 10510 levels then it can make more correction.

Dow Jones is the major stock market benchmark of USA like we have Sensex in India.

Here, we have presented a historic view with analysis and some of comments as it is not possible to include all technical analysis and comments as it will make the article bigger and complicated to understand.

Visit this site for updates on this article…

Is 5800 possible in H2 FY12?

2012-01-15T22:11:00.000-08:00

Market Trend

Nifty has given a better than expected start in 2012 since investors focus has shifted from gloomy scenario of sovereign euro debt crisis to positive economic data of US economy. Nifty has given a spectacular performance, rallied from the low of 4588 to the high of 4899 in just 10 trading sessions!! My view on short term trend is bullish where markets can make a high of 5050-5100, with 5100 being the key resistance area. But the hindrance to the market rally could be weak quarterly earnings, depreciating rupee and any important news relating to Euro debt crisis. However S&P downgrade of 8 Eurozone countries (Thank god Germany was spared) will lead to consolidation of Nifty in next two or three sessions.

But there is joker in a pack, IT giant (TCS) and Two wheeler giants (Bajaj-Auto and Hero Motocorp) are all set to announce quarterly results in the following week. Not to forget, most awaited RBI January monetary policy review on 24th January would also be keenly watched by the investors and traders. Any cut in Repo rates or CRR will be warmly welcomed by the markets and give a strong boost to interest sensitive sectors like Banking and Automobiles.

RBI would take a call on rates cut based on inflation data which is to be announced on 16 January. If inflationcomes out between 7.5 % to 8% then there are good chances that RBI might surprise markets announcing the rate cuts. However experts feel that December inflation is likely to be dropped to 7.5%. The following two weeks are going to be very crucial for markets as many important events are happening starting from earnings release and ending to RBI monetary policy review.

Technically speaking, Nifty key resistance areas are 4910, 5050 and 5100. Support lies at 4800, 4760 and 4670. A Bull run can come in H2 FY12 and Nifty can touch 5700-5800 at the end of FY12 if RBI keep on cutting interest rates and thus inducing money supply in the economy and boosting growth and GDP. Along with that a solution to Euro zone crisis would also play a very important role in taking Nifty and Sensex to further higher levels.

Contributed by Shruti Bansal, Research Associate

Investment classified into 4 on the basis of duration of investment

2012-01-04T04:28:00.000-08:00

Now no confusion on what is short term investment and what is medium term and long term!

Read our unique classification of investment based on duration or period of investment.

Plan your investing activity based on our unique classification of investment based on duration of investment.

THE CONCEPT OF SHORT TERM, MEDIUM TERM, LONG TERM AND LONGER TERM INVESTMENTS:

Many (most in fact) investors are confused about equity investments. Main reason being the volatility of markets and the investor’s inability to manage his emotional response to it.

Other than psychological/behavioral aspects, the investor is also devoid of basic understanding as simple and as basic as ‘what is asset allocation?’ and “what should be called long-term investing and what not?”

Here in this article we have clearly explained the classification of equity investments on the basis of duration of investment. The classification mainly include the

usually known classification of short-term investing, mid-term investing, and one unique but vital and important concept of ‘longer term’ investing which is mainly based on premises of life-long investing and investing philosophy of Warren Buffett.

We classify investment into 4 types when it comes to period or on duration basis.

Short-term investment: (duration 3 months to 1 year)

Short term investment is basically nothing but trading because there is nothing like investing when we talk about it using word ‘short term’. However we call it ‘investment or short term investment’ and we have put it as that type of investor who buys stock for a holding period of minimum 3 months to maximum 1 year. To standardize and clarify the classification types of investment on durational basis we have had to mark the 4 types into months to months time period.

We have put the minimum time frame of holding stocks to qualify it for short term is 3 months and up to 1 year. Above 1 year will become medium term investment. The logic behind this is that a period of 3 months is bigger when compared to intraday trading or futures trading which is mainly based on month to month expiries. also the upper cap of 1 year is placed to freeze it as short term duration investment because above one year holding puts an investors into events involving taxation issues, dividend payouts, voting in annual meeting, declaration of annual results of the firm, and so on which is mainly accepted and expected by an investor who want to hold stock for more than 1 year (which we classify as medium term) Thus, one investing as ‘short-term investor’ according to our classification will limit his or her investment up to around one year as he is not interested to give the stock and in turn the company one year cycle and don’t want factors which can come up over one year time duration of certain nature as annual meeting and so on company side and taxation issues on his personal side; to affect/influence his stock investment which is in fact based on short term factors of analysis and also bringing results in short term which according to us we have put at 3 months to 1 year.

Medium term investment: (duration 1 year to 3 year)

Medium term investment duration is defined by us as any type of investment which is held for more than 1 year but not more than 3 years. As more than 3 years up to 5 years.

We call this type of investment as medium-term duration investment as the characteristics of completion of economic or stock market cycle is absent from this type of investment mentality. Thus, we would not like it to call as long-term investment if one is invested for even 2 or more years but less than 3 years. However most market analyst and investment advisors will tell it as long term investment as most of them believe anything above 1 year is long term investment, which we do not agree as per our theory presented here.

Long term investment: (duration 3 years to 5 year)

The period of 3-5 years is in general what is called to be long-term investment by the investment community. The basic premise behind such belief and argued logic is that an economy sees a cycle turn in about at least 3 years to 5 years. Same can follow about stock market movements also.

We also follow this and put a tag of long-term investment to any investment held at leas for 3 years and up to around 5 years.

It is advisable that an investor undertakes comprehensive portfolio review and shuffle at his/her investment at this turn of duration.

Longer term investment – duration minimum 10 years and beyond

Our this completely new coined word follows the investing duration and point of view adhered by warren Buffett.

For him the ideal holding period of investment is ‘forever’. He likes to buy stocks that he can hold forever. his this belief follows concept and principle of value investing in which investing in stocks is viewed as buying a part of actual business and not the shares that are quoted and traded on stock exchanges. He buys undervalued stocks of very selected sectors and businesses having particular characteristics and similarly avoids some sectors and businesses on counter basis.

Every body knows and hears about investing for ‘long term’ and ‘long –term ‘investing is good and so on. But no analyst or educator has clarified between what should be termed as ‘long-term’ and what shouldn’t. Also none has clarified on what is should be called when a person buys stocks for holding 3 months to one year (which we clarified in short-term investment). You will hear on tv and read on newspapers mostly about 1 year and 3 year and 5 year timelines when it comes to investing.

Getting back to understand the concept of ‘longer term investment’, one thing you understood that it is alike warren Buffett style approach when it comes to the duration of holding. To define it in years we put any investment holding held for 10 years and more as longer-term investing.

The duration of 10 years is beyond and above the usual economic (viewed in interest rate cycle terms mainly) and stock market cycle (bull top outing and bear bottom outing) Thus it surpasses the notion that the investor was looking for cyclical gains or considerations as in long-term investment.

The long enough duration of 10 years also makes it possible that the cost price of the original investment to become nil or zero on account of the return from dividend payouts and stock price appreciation from the stock.

In 10 years the company may consider to delist itself from stock exchanges, the company can come with new products, mergers, amalgamations, takeovers etc. all envisagable and imaginable outcomes and events are possible during such a big duration. So thus the investor has really invested for longer-term’ that is here 10 years on valuations fit to him for such a duration under such considerations.

the investor who is investing for such a longer duration mainly have ‘speculative’ element completely absent in his investment decision, as he is not eying benefits out of stock price or some short term events but completely and solely interested only into the average and fundamental and mature growth of the company as can happen over such a long period a decade and more.

The readiness and ability and confidence to invest and hold for 10 years and more comes from following the tenets of value investing like warren Buffett. Thus, the investor is confident of buying the stock at considerable discount price and ready to average at declines and deem declines as opportunity to buy more of them.

…we will update more comments in this article as and when…

NIFTY SPOT TECHNICAL CHART

2011-12-25T05:56:00.000-08:00

(Click on the chart for bigger view)

Nifty spot closed at 4713 with heavy profit booking and all short term long positions winding up as short Christmas vacation is coming up. As indicated a chart of nifty daily from mid 2009, we can see volatility of nifty index. In 2011,
nifty show negative trend in the whole year and perform a range bound in a linear support and resistance (trend line) which is shown in figure. There was a bearish trap in February month which is circled area in chart. In our last movement, price line has faced a strong resistance of a short term trend line. Moreover, MACD (84.52) has faced a resistance of trend line in daily basis and it came down back in recent weeks. 2011 was the secondary trend which was negative. As far as primary trend is concerned, it is positive and nifty outlook is favorable for long term investment, in next 2 years, however in the short term the market is looking to continue in the correction phase with very strong long term support for nifty at 4336.

Excerpts of Letter of Warren Buffett to Shareholders, year 1978

2011-12-13T04:53:00.000-08:00

Excerpts from Warren Buffett’s Letter to Shareholders for year 1978

....We make no attempt to predict how security markets will behave; successfully forecasting short term stock price movements is something we think neither we nor anyone else can do. In the longer run, however, we feel that many of our major

equity holdings are going to be worth considerably more money

than we paid…

…Slow capital turnover, coupled with low profit margins on sales, inevitably produces inadequate returns on capital

ON TEXTILES BUSINESS

...We hope we don’t get into too many more businesses with such tough economic characteristics

…We get excited enough to commit a big percentage of insurance company net worth to equities only when we find (1) businesses we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4)

priced very attractively. We usually can identify a small number of potential investments meeting requirements (1), (2) and (3), but (4) often prevents action.

…We continue to find for our insurance portfolios small portions of really outstanding businesses that are available, through the auction pricing mechanism of security markets, at prices dramatically cheaper than the valuations inferior

businesses command on negotiated sales.

ON ATTITUDE OF NOT EXPECTING IMMEDIATE RISE IN STOCK BOUGHT AND RATHER READINESS TO BUY MORE AT DECLINE-

...We are not concerned with whether the market quickly revalues upward securities that we believe are selling at bargain prices. In fact, we prefer just the opposite since, in most years, we expect to have funds available to be a net buyer of

securities. And consistent attractive purchasing is likely to prove to be of more eventual benefit to us than any selling opportunities provided by a short-term run up in stock prices to levels at which we are unwilling to continue buying.

ON HOLDING MINORITY INTEREST WITH NO POLICY AND MANAGERIAL CONTROL-

…Of course, with a minor interest we do not have the right to direct or even influence management policies of SAFECO. But why should we wish to do this? The record would indicate that they do a better job of managing their operations than we could do ourselves. While there may be less excitement and prestige in

sitting back and letting others do the work, we think that is all one loses by accepting a passive participation in excellent management. Because, quite clearly, if one controlled a company run as well as SAFECO, the proper policy also would be to sit

back and let management do its job.

ON COMPANIES RETAINING EARNINGS-

We are not at all unhappy when our wholly-owned businesses retain all of their earnings if they can utilize internally those funds at attractive rates. Why should we feel differently about retention of earnings by companies in which we hold small equity interests, but where the record indicates even better prospects for profitable employment of capital? (This proposition cuts the other way, of course, in industries with low capital requirements, or if management has a record of plowing capital

into projects of low profitability; then earnings should be paid out or used to repurchase shares - often by far the most attractive option for capital utilization.)

Excerpts of Letter of Warren Buffett to Shareholders, year 1977

2011-12-12T05:58:00.000-08:00

Excerpts/Key Learnings from Warren Buffett’s Letter to Shareholders for year 1977:

The excerpts are taken from the letter and not changed with words or sentences. References are given as and wherever necessary.

…After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding.

…Except for special cases (for example, companies with unusual debt-equity ratios or those with important assets carried at unrealistic balance sheet values), we believe a more appropriate measure of managerial economic performance to be return on equity capital.

…The textile business again had a very poor year in 1977. We have mistakenly predicted better results in each of the last two years. This may say something about our forecasting abilities, the nature of the textile industry, or both.

…..Ken Chace’s efforts after the change in corporate control took place in 1965 generated capital from the textile division needed to finance the acquisition and expansion of our profitable insurance operation.It is comforting to be in a business where some mistakes can be made and yet a quite satisfactory overall performance can be achieved. In a sense, this is the opposite case from our textile business where even very good management probably can average only modest results. One of the lessons your management has learned - and, unfortunately, sometimes re-learned - is the importance of being in businesses where tailwinds prevail rather than headwinds.

Insurance business-.…As markets loosen and rates become inadequate, we again will face the challenge of philosophically accepting reduced volume. Unusual managerial discipline will be required, as it runs counter to normal institutional behavior to let the

other fellow take away business - even at foolish prices.

Insurance companies offer standardized policies which can be copied by anyone. Their only products are promises. It is not difficult to be licensed, and rates are an open book. There are no important advantages from trademarks, patents, location,

corporate longevity, raw material sources, etc., and very little consumer differentiation to produce insulation from competition. It is commonplace, in corporate annual reports, to stress the difference that people make. Sometimes this is true and sometimes it isn’t. But there is no question that the nature of

the insurance business magnifies the effect which individual managers have on company performance. We are very fortunate to have the group of managers that are associated with us.

… We select our marketable equity securities in much the same way we would evaluate a business for acquisition in its entirety. We want the business to be (1) one that we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) available at a very attractive price. We ordinarily make no attempt to buy equities for anticipated favorable stock price behavior in the short term. In fact, if their business experience continues to satisfy us, we welcome lower market prices of stocks we own as an opportunity to acquire

even more of a good thing at a better price.

…Our experience has been that pro-rata portions of truly outstanding businesses sometimes sell in the securities markets at very large discounts from the prices they would command in negotiated transactions involving entire companies. Consequently, bargains in business ownership, which simply are not available directly through corporate acquisition, can be obtained indirectly through stock ownership. When prices are appropriate, we are willing to take very large positions in

selected companies, not with any intention of taking control and not foreseeing sell-out or merger, but with the expectation that excellent business results by corporations will translate over the long term into correspondingly excellent market value and dividend results for owners, minority as well as majority.

Fake Exports Scam?: Black Money coming back to India by exports-over-invoicing with help of government

2011-12-10T02:32:00.000-08:00

In a report dated 10 Oct 2011, Sanjeev Prasad, Sunita Baldawa and Amit Kumar of Kotak, unearthed the possible export-scam amounting to even more than combined 2G, mines and all other scams.

The report said that in between 2008-09 and 2010-11, exports to the Bahamas jumped to $2.2 billion from $2.2 million. Yet, India’s share in Bahamas’ imports, which totalled $2.8 billion in 2010, is a relatively minor 7.5 percent. Thus, this 1000 fold in 2 yrs is no-doubt an issue which demands criminal investigation.

According to UNCTAD —The global trade and investments monitoring agency of UN— says, the number in no way matches the data on the Bahamas’ global imports, which, was $2.8 billion in 2010. There are more reasons to smell scam in these figures. The 29-island Bahamas have an economy not larger than $8 billion and a population of only 3,50,000.

These and other skyrocketing increase in ‘copper articles’ exports points that some black money might have been repatriated back to the country via ‘over-invoiced’ exports (done by billing high fake amounts for overseas transactions with fake buyers or shell companies) given that international scrutiny is increasing over unaccounted funds in Swiss bank accounts and other financial centres.

It is clear that how India could continue achieving blistering rates of growth in exports (almost more than 50 percent each month) when the US and Europe, two top export destinations, are clearly in major financial trouble.

Recently, the fin min Pranab Mukherjee said that tax authorities had obtained 9,900 leads from foreign banks about suspicious overseas transactions involving Indian citizens, as well as examining data on another 30,700 domestic transactions for suspected tax evasion and money laundering. However, the Washington-based Global Financial Integrity released a report last year that estimated about$213 billion ($462 billion at today’s prices) was illegally transferred overseas between 1948 and 2008.

Some reports have alleged that some individuals may have been compelled to bring back funds through the official route by simply over invoicing exports or even resorting to fraudulent exports due to reasons such as (1) increased international scrutiny of unaccounted funds in bank accounts in Switzerland and other financial centres, and (2) heightened debate in India about action against unaccounted overseas wealth.”

WHILE EXORTS SCAM MIGHT SEEM A REALITY, FII INFLOW ALSO CASTS DOUBTS REGARDING PHONY MONEY

2010-11 foreign investor flows added up to $22 billion, according to official figures. But a cross-check with international sources like exchange-traded funds and EPFR Global (which tracks $ 15 trillion in global investment flows) shows that not more than $4.5 billion came to India. Though it is obvious that EPFR data is not 100 percent foolproof, since its sometimes excludes sovereign and private equity funds, the gap of $17.5 billion is simple too huge to be explained by normal data omissions.

If true, these type of fake fund flows via FII route could be camouflaging (1) hot money/illicit, unaccounted or black money from overseas accounts of resident Indians, and (2) high levels of proprietary positions of global investment banks, and (3) round-tripped money from Indian companies.

THE GOVERNMENT’S EXPLANATION ON DATA-CRASH AND SYSTEM-MISTAKE:

Commerce Secretary Rahul Khullar, exports were overstated by around $9.4 billion during April-October this year because of a system crash in the commerce ministry and mistakes in data classification and data entry.

People in media are asking that-ok, if this is computer mistake than why after many months the outsiders-reporters found out this mistake and told your, and not any of the government agencies not even your your ministry’s Directorate General of Commercial Intelligence and Statistics (DGCI&S). This fiasco, (hoping it is not a real scam) will also worsen the already bad reputation of data collection and reporting in India. The media is also asking that if the computer crash at DGCI&S happened at the start of the financial year, how come it took you six months to report the problem to us. They further add that RBI-which has cross check mechanism-as it has to keep up with the researve requitement and balance of payments situation-could not alarm about a mistake as big as $9.4 billion (Rs.50,000) Even after this reporting of the data mistake-the media reports also add that the real goof-up is not merely $9.4 billion, but much bigger. For example, the figures given out on Friday spoke of a $15 billion over-reporting of engineering exports, and a $12 billion underestimation in the case of petroleum and gems and jewellery. The net figure may be $9.4 billion, but what has really happened is a $27 billion error – since one error in engineering and another in petroleum and gems cannot really cancel each other out. While some other media reports that there were exaggerations of up to $0.5-1 billion each in some other product categories and ‘all sorts of things’, including double counting.” At last one website asks citing the Kotak report, that if the data crash thing happened this year, than what about the huge discrepancy in exports date for previous year which showed 79% surge in exports?

Let us all hope that this is just the computer mistake only and not a deliberate scam involving the Ministry of Finance, RBI, Directorate General of Commercial Intelligence and Statistics (DGCI&S), the commerce minister, the commerce secretary and others who are running the country…

Indians’ per capita income rises 2.5 times in a decade

2011-12-09T23:32:00.000-08:00

From year 2001-02’s Rs.18450, the per capita income of average investor risen to Rs.54000 in 2010-11. The per capital income calculated at current prices registered an annual average growth rate of about 12.80% during this time period.

NIFTY SPOT TREND LINE CHART

2011-12-04T21:05:00.000-08:00

NIFTY SPOT INDEX: (click on the chart for larger view)

The NSE Nifty spot closed at 5050 up by 2.29% on weekend. Nifty spot

stood above 21 and 34 day EMA but didn't cross 100 and 200 day EMA which

doesn't show buying opportunity. Short term long position takers should be

cautious for next week, because of having some negative diversion in stochastic

on daily basis. There are various resistances like 5089/5129/5163 with supports

like 5005/4981/4939.

----04/12/2011

BSE Derivatives Segment records largest ever turnover: Sensex futures shine

2011-11-06T21:02:00.000-08:00

It looks like the incentive scheme is ultimately working at least as of now. Last week on 3rd Novembar 2011, the derivatives segment of BSE recorded largest ever turnover of 759.24 crore (about 1520 crore both sides).

The sensex futures turnover was Rs.625 crore, highest ever since launch of the vastly tracked Indian index.

Total 128 members put trades in derivatives segment. It is noticeable that since last few days, the turnover of BSE derivatives segment has been rising 50-75 crores rupees everyday.

Whiile on the other side the derivatives market leader NSE is way too up. It records average of atleast 1.20 lakh crore volume daily.

USEFUL LINKS:
Sensex futures live quotes link-
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=1&app=0&id=998193
BSE Derivatives market watch link- http://www.bseindia.com/deri/HotLinks/Derimarketwatch.aspx?L=2&id=hd0&Lid=0

According to our view the MCX and MCX-SX promoters FTIL (financial technologies india limited) and BSE should make a pact (or even merge) to give competition to NSE. With the technological expertise, established no.1 commodity exchange in India (mcx, which is ahead of NSE’s commodity exchange NCDEX in volumes and reach) and across-the-globe market knowledge of FTIL and strong brand presence in Retail Indian investors, now an SME Exchange and an established equity segmentof BSE, will have a great synergy. Only this could not happen if FTIL is overambitious to own its own equities exchange and BSE remain in rhetoric of its paranoia of old-time-exchange of India.

It is notable that the founder of FTIL, Mr.Jognesh Shah, started his career way back in 1980s at BSE as a software engineer and went out to create India’s largest used trading terminal ODIN DIET, biggest commodity exchange MCX and most numbers of exchanges/tie-ups through out the globe out of India.
In October this year BSE tied-up with FTIL for ODIN software to relaunch it's derivatives scheme after getting approval from SEBI in June-2011 to launch Liquidity Enhancement Incentive Scheme for which BSE has earmarked 107 crore for 7 months in 2 phases. FTIL's ODIN software enjoys 80% marketshare in CTCL (computer to computer link) platform solutions for exchanges in India. Most of the rest is accounted for NEAT of NSE and BOLT of BSE.
With international financial exchange markets already on the brinks of saturation of not saturated, the Indian local exchange players should cement their position before the financial markets reforms kick in and International players take them by storm.

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Daily Market Wrap

2011-11-04T05:06:00.000-07:00

On the last day of trading this week, the markets closed with moderate gains today and barring oil & gas, all sectoral indices closed positive. The CNX Midcap index was up 0.9% and the BSE Smallcap index gained 0.3%. The market breadth was positive with advances at 817 against declines of 606 on the NSE. Metals was top rising sector today. Other sectors with substantial gains included capital goods and banking and oil & gas was the only sector that closed negative. The Sensex closed at 17563, up 81 points from its previous close, and the Nifty shut shop at 5284, up 18 points. The CNX Midcap index closed with 1% gain while the BSE Smallcap index gained 0.4% in today's trade. The market breadth was positive with advances at 818 against declines of 612 on the NSE. The top Nifty gainers were Ambuja Cements, Hero MotoCorp, Hindalco and Cairn, havells, sun tv, gsk, voltas, shree cement, lanco infra while the biggest losers included Ranbaxy, Tata Power, Reliance Infra, jain irrigation, motherson sumi, crisil and Dr Reddy's.

The market had a gap up opening on the back of positive cues from the US markets. The mood was somewhat relaxed as Greece dropped the idea of a referendum on bailout package and European Central Bank unexpectedly lowered interest rates to 0.25% at 1.25%. After touching the intraday high the market witnessed some profit booking which result in Sensex slipping down briefly into negative terrotory . Reliance witnessed cut of around 1% during the afternoon session even as few FMCG and auto stocks too slipped under pressure. Positive openings in European market enabled the market to bounce back from the lows and end the day on a positive note. Midcap and small cap stocks outperformed the front liners.

The market could not sustain those gains in the second half of trade due to volatility in Europe, especially ahead of G-20 meet. Investors too were worried about the financial and political stability in the eurozone. Some global experts believed that Greek default has already been priced in and not the focus is more on Italy, Spain and the banking side of the problem. Total traded turnover was more than Rs 1.05 lakh crore.

NIFTY FUTURE-

Nf in the opening had merely less than 30 points range of high and low, however it slipped in 1st hour of trade to make a low of around 5320 and then trading for most of the day around 5330-40 levels before finally rising to make day high of 5353.95 and then giving up gains in next 30-50 minutes making a low of 5283 and then rising again to end the day at 5318 with a premium of around 35 points to spot index. Traders had hard times earning points on the rise, which was illusive and ate mosts' stoploss. While sell positions put above 5315 levels were at least parted with 20 points with ease.

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Weekly Market Wrap-

The markets closed in negative territory this week, with auto being the worst performer. Midcap counters outperformed largecap stocks and the CNX Midcap index was the only one that closed positive.The Sensex was down 1.4% while the Nifty lost 1.5% during the week. The CNX Midcap index was up 1.1% and the Bank Nifty lost 1% over the week. The BSE IT was down 1.3%, BSE OilGas lost 1.7%, BSE Auto was down 3.5% and BSE Metal closed with 2.5% loss during the week. The top Nifty gainers during the week were HUL, RComand SBI while the biggest losers included Tata Motors,ICICI Bank, SAIL and Mahindra & Mahindra.

Daily Market Wrap

2011-11-03T04:34:00.000-07:00

Today markets witnessed a volatile day comprising movements of both up and downs where market risen into green then again falling back before ultimately giving close in the green. The BSE-30 Sensex index and NSE-50 Nifty index closed day green about 0.10% gain at 17484.93 and 5265.75 respectively, while the nifty future (largest trading instrument after nifty options) closed day with 0.56% at 5309.90 showing a huge premium of

44.15, indicating increased and sustained bullish undertone in the futures contract.

Nifty future was trading in tight range after it made fresh low of 5,221.15 around 1 pm in the noon. however then onwards nf traded about 5240-50 till ultimately started rising in the last 1 hour of the trade after 02.30 pm.

Amongst the indices realty, power, oil and gas, and capital goods stock outperformed most other sectors. There was mixed trading in banking stocks. BSE Smallcap index closed flat while Midcap index closed with half percetage gain. The market breadth (advance-decline ratio) remained negative with 752 stocks declining against 653 stocks rising.

Amongst the frontline gainerss Reliance infra, Acc, Dlf, Bhel, PFC, Sun tv, jsw steel, while indiabulls financial services, jp infra, crisil, and sail. HUL, Tata motors lost.

Stock Traders expected market to panick and make new low as the news from ongoing Greece crisis arrived. The Greece ruling party law makers called for the resignation of existing PM George Papandreou, whose government has agreed to tight measures as suggested by EU, and IMF in turn for a bail out. While the biggest risk out of this development is that if the George Panapdreou government collapses, the new opposition will likely turn the matters upside down as they are very much against the austerity and debt restructuring plan. The Greece markets and European markets fell 1-2% on the news and recoverd later on. However Indian market maintained ground and rose in last hour despite this bad news which has again reinforced the bullish undertone in the market persisting through out the beginning of this present derivatives expiry. Media reports suggests the market inched up as European markets showed strength and hopes that the Greece referendum will not happen. Some global experts are also contending that a Greek default might in fact be welcomed by the markets and not responded with a panick. However, the ripple effects of such a default could be devastating for the rest of the eurozone nations. The world markets are also looking for the G-20 meeting that started today. Our approach of buy on dips and avoid 'jump and sell' strategy made some money while avoiding loss of a lot.

Renowned Economist Nauriel Roubini warns Lehman-type scenario out of European debt crisis

2011-10-31T23:25:00.000-07:00

Eminent international economist NAURIEL ROUBINI who has so far been most accurate economic forecaster than most of others, has recently warned on 2008-Lehman-type credit crisis scenario and slowing-trend in growth of world’s major developed economies as well as China’s.

He also warned of Euro currency falling apart and Greece to be the first amongst those leaving eurozone monetary union.

On China, he said there is going to be hard-lending and following slower growth or no incremental growth which will have effect on world economy as china is now a growth engine for world in many ways.

Read the full article below,

PERTH (MarketWatch) –

Nouriel Roubini, the economist best known for predicting the global credit crash, said Tuesday the advanced world is sliding toward another recession and Europe could experience a series of sovereign defaults triggering market disruption on a scale witnessed after the crash of Lehman Brothers in 2008.

The U.S.-based economist also warned that China's growth path is unsustainable and a massive banking crisis and hard landing in two years time is possible, robbing the world of it's major growth engine.

His bleak outlook comes as Europe's leaders inch toward a deal to shore up the euro zone and the region's banks.

"There's a significant probability there's going to be another recession in most advanced economies ," Roubini told business leaders gathered here for the Commonwealth of Nations conference. He singled out the euro zone, the U.K. and the U.S. as prime targets for economic contraction.

Roubini said regardless what agreement is reached in Europe, the single currency could still fall apart with Greece likely the first to leave and the biggest risk is for a disorderly series of defaults in the euro zone stretching from Portugal to potentially Spain and others.

"The shock that could occur could be as large, if not larger, than the disorder after the collapse of Lehman," said Roubini, who teaches at New York University and is sometimes known as Dr. Doom. He said Europe's leaders must embrace much deeper fiscal cooperation.

For the world's second-biggest economy, China, which has been enjoying growth rates above 9.0% helped by massive stimulus through the form of bank lending, Roubini said the property sector there poses a severe risk and could turn sour, leaving both banks and the government burdened with heavy debts.

"There could be a hard landing in China over the next two or three years," he said. "There's not a single episode of coming out of an over-investment boom with a soft landing. Real estate booms always end up in busts."

But there are positives in the world. Latin America, parts of sub Saharan Africa, central Europe and the Middle East are holding up while firm demand for resources means Australia and Canada should escape the worst of any slump, Roubini said.

-By Enda Curran

Below is the link to the news item from www.marketwatch.com

http://www.marketwatch.com/story/roubini-sees-double-dip-slump-in-major-economies-2011-10-25?Link=obinsite

KOTAK MAHINDRA BANK CHART

2011-10-31T11:49:00.000-07:00

The state of the markets: Contemplating similarity and difference between 2008 and 2011 market corrections and the possible road ahead

2011-10-31T11:07:00.000-07:00

The state of the markets: Contemplating similarity and difference between 2008 and 2011 market corrections and the possible road ahead.

After seeing sell off in the initlal 4 days of the current October derivatives expiry to low of 4741; nifty index has been steadily showing upward trend resulting in a high of 5402.75 on the second day (28th oct and start of nov expiry) of diwali muhurt trading day.

We had seen a sell off to 4720 level from above 5700 in at the end of the august derivatives expiry beginning from the end of july expiry (july was tight ranged and low volatile trading band month for the indice) following consistent correction in the august expiry as said.

If we go back even further and want to take a sneak of diwali to diwali map than we can see market making clear lower top lower bottom pattern (one of the few sure-shot highly reliable and predictive technical patterns) since last diwali which was on 5th of november 2010.
We can see in the chart no-1 that nifty made high of 6338.50 on 5 november that is the 2010 diwali day!

Head and shoulders pattern-

According to another highly reliable, time-tested and predictive techncal pattern the nifty index has made head and shoulder pattern as seen in red box lines in chart-1 and according to that if nifty do not sustain the 5200-5400 range then it is bound to slide lower and break the support levels of these pattern which are at 5200 and then slide below 4720 which is recent low of the indice. According to use of our other indicators and news analysis and prediction model nifty can rise to 5400 (also to fill opening gap, which was bound to fill up as we were saying repeatedly when nifty was sliding lower and now on 29 oct 2011 has hit that level) and above before Christmas in December or before it. The point is that in Christmas nifty will have consolidated and filled al the gaps it made earlier and going to make in nov month and then decide the course for mid-term trend and low volatility and high action activity which is not the case presently.

DRAWING ANALOGY BETWEEN 2008 CORRECTION AND 2011 CORRECTION AND WAY AHEAD IN 2012-
2007-2008 correction details-
High made 6357.10 on 08-01-07, low made 2252.75 on 27-10-08 , time taken between high and low was 10 months.(conclusion/view=mkt may correct sharply but does not remain down for long and bounces back, thus our approach to remain invested at all times)
Main reasons-
USA’’s not-before-ever type of financial markets crisis followed by/bringing in 1933 type real-market recession/depression.(1987 crash,LTCM crisis,enron issue was limited to wallstreet and not wide spread in throughout all type of financial markets and into the real economy like 2008 type)
Lehman brothers collapse due to financial markets crisis.
Fear or recession/depression.
Fear of stagflation (which was and proved overdone)
Unemployment rate reaching abv 9% first time after 1933 recession (still at same levels but tolerance of financial markets of this indicator has increased).
USA DowJjone index before, through and now-after the 2008 phenomena.

2011 situation=
2011 saw the steep monetary tightening in by Chinese and Indian central banks (RBI so far has done 13 rate hikes) which were apparently aimed at bringing down inflation which was hurting to economy and consumers and monetary system while the monetary tightening/credit contraction efforts brought down profitability/earnings of corporates in India (assume Chinese corporates situation on same lines)
After 2008 in 2009 and more in 2010 and even more in 2011; the European Union has come out with more drama in terms of the debt problems of its euro zone countries mainly Portugal, Italy, Greece, Spain. After coping with Spain, Greece has become a headache for EU leaders and since last week there was no doubt that Greece will default and nothing can be done by eu leaders (before 2 days EU announced 50% write off of Greece debt and 5-times increase of bailout fund for euro zone debt-struck nations along with other smaller measures till date since the crisis surfaced. It is apparent that all the measures are aimed at keeping sufficient liquidity in the system, cushioning banks from failing and in overall avoiding Lehman-type moment. Austerity and direct-indirect bailout of sovereigns and banks have been the main course. Dont talk about growth related measures. You don't arrange party in sinking ship but try to put down the holes first.
it is important to note that the global markets were ripe for correction in terms of commodities prices shoot up and heating up of emerging economies like India, china and Brazil during 2008 correction. while 2011 was indeed including 2010 followed with monetary tightenig by those countries. while Brazil still remains darling amongst the BIRCS (brazi, india, russia, china) nations china is seeing concerns on its property market bubble ‘shadow economy’ and so-called ‘ghost city’ phenomena which is raising concerns among investors of a multiyear slow-down measures by the govt (not gdp slowdown but the efforts of the govt to slow down the gdp!)
On the other hand India is witnessing huge political turmoil including big scams involving corporates, and govt bureaucrats and politicians alike followed by arrest of some of them (cases filed now), then the nation-wide anti corruption movement, consequences of which belieed to have decreased the chances and raised fear among the foreign investors the present cong led govt to win power in next union elections.Then if things were not too bad the govt came out with 26% profit sharing mining bill we believe negative impact of which is not yet fully discounted in mining companies stock prices, then the much-up roared land reforms bill is also feared to increase the cost of acquisition of land for industries however the impact of which is yet to be seen and the fine print of the act is also not out. The consolidating and bottoming out of voice-tariff rates and new telecom reforms are expected to bring cheers to telecom companies however they are also still to be put in black and white by the govt, which should be done by next quarter.
-30/10/2011
…to be continued.

Brief Detail of our ADVISORY PRODUCTS FOR INVESTORS

2011-09-30T08:03:00.000-07:00

DETAIL OF SERVICES FOR INVESTORS:

SR.	SERVICE	FEATURES & SPECIFICATIONS	FEE/CHARGES
1	ACTIVE STOCK PORTFOLIO ADVICE	-6 different stock portfolios mainly based on time-duration. -Advice of updating given actively. -See details.	Different for different duration (see table)
2.	STANDARD PORTFOLIO ADVICE	-Ready-to-invest, non-updated different stock portfolios. -See/Check out which standard portfolios are available. -Time-duration , return, theme etc different for different portfolios. -No updates given. One-time servicing only.	Rs.2500 per portfolio
3	STOCK SIP ADVICE	-1 fundamental stock reco. every month given with tgt, return and holding period.	Rs.6000 for 1 yr
4	PORTFOLIO SHUFFLING ADVICE	-advice on existing stock portfolio is given. -onetime upto 15 stocks -Continuous yrly upto 15+15 stocks	Rs.5000 for one-time PSS Rs.12,000 for Continuous PSS for 1 yr.
5	Annual paid membership	-Indian investors club service -multibagger stock reco. throughout the yr. -see details for frequency of stk recommendation and schedule of sending advice etc. Good for those who do not want/fit in any of the above 4 service.	Rs.7000 for 1 yr

Brief Detail of our ADVISORY PRODUCTS FOR TRADERS

2011-09-30T07:44:00.000-07:00

BRIEF DETAIL OF SERVICES FOR TRADERS: (Click on the links for more detail of products)

	SERVICE	FEATURES & SPECIFICATIONS	FEE/CHARGES
1	Intraday stock cash calls (hotcalls)	2 to 4 intraday calls daily. 3-6 btst calls in a week.	Rs.2500 monthly
2	Stock Future calls
	Intraday stock future calls	2-3 intraday calls daily. 4-8 btst/stbt calls in a week.	Rs.8000
	Stock future Assured Profit Scheme	Mainly positional but intraday also given.	Rs.10000 fee for Rs.50,000 profit.
	3. Stock future profit- sharing plan	On call and by sms service. Advance refundable fee of Rs.5000. Intraday, positional both type.	No fixed fee taken. Then 25% profit sharing/ performance based fee.
3	Reliance+Tata Calls	Intraday and btst calls from reliance and tata group stocks only in cash segment.	Rs.3500 monthly
4	Intraday Nifty Future Calls	Assured 500 points profit. Trade with given compulsory guidelines.	Rs.5000 monthly/for 500 net points
5	ASSURED SURESHOT STOCK CASH	Weekly 1 call & 10-20% profit in each call. Minimum 1 lakh value to be purchased. Assurety of profit of min Rs.25,000.	Rs.5000
6	Commodity futures trading advice-
	1. Regular monthly package fixed fee	· All/any type of calls from any commodity will be given . Daily 2-4 calls will be given by sms only	Rs.8000 monthly
	2. Profit Sharing Plan	Profit sharing fee of 25% taken from profits.	Rs.5000 advance, then 25% profit-sharing fee.
	Assured Profit Scheme	Assurity of Profit of Rs.1,00,000 is given.	Rs.20,000 profit-based Expiry
7	Mixed/All-in-1 Pack	All Traders and investors based service for 1 month Excludes some products having one-time service delivery mainly in investors products basket	Rs.25,000 monthly

POSITIONAL STOCK CASH (DELIVERY BASED) AND INDEX FUTURES TRADING ADVICE:

FII CALLS ARE PROVIDED IN FOLLOWING 4 TYPES OF INSTRUMENTS:

TYPE OF FII CALL	Features and Specific Details
(1) FII STOCKS CALLS	Trading Calls from mainly A and B group will be advised. There will be approx. 1-3 calls during a week. Some positions shall be squared off with starting from 5% gain, while few position shall be held for higher gains. At any point of time, there will be maximum 4 positions held at a time. Usual holding period will range from 1 week to 3-4 weeks for some positions.
(1) FII NIFTY FUT CALLS	Trading Calls from NIFTY Futures and Options will be advised. There will be approx. 2-4 calls during a week. Minimum gap of 50 points adhered. Mainly overnight nature position but squared-off intraday if required as per situation. Usual holding period will range from 1 week to 3-4 weeks for some positions.
(2) FII BANK NIFTY FUT CALLS	Trading Calls from BANK NIFTY Futures and Options will be advised. There will be approx. 2-4 calls during a week. Minimum gap of 100 points adhered Usual holding period will range from 1 week to 3-4 weeks for some positions.
(3) FII CNX IT FUT CALLS	Trading Calls from CNX IT Futures and Options will be advised. There will be approx. 2-4 calls during a week. Minimum gap of 50 points adhered Usual holding period will range from 1 week to 3-4 weeks for some positions.

PACKAGES AND FEE STRUCTURE:

PACKAGES & DURATIONS	Fee Structure
	FII STOCKS	FII NIFTY F	FII BANK NIFTY	FII CNX IT FUT
3 Months	Any 1 of the above- Rs.4,000 Any 2 of the above-Rs. 6,000 Any 3 of the above-Rs.10,000 All the 4 of the above-Rs.12,000
6 Months	Any 1 of the above- Rs.6,000 Any 2 of the above-Rs.10,000 Any 3 of the above-Rs.14,000 All the 4 of the above-Rs.20,000
12 Months	Any 1 of the above- Rs.10,000 Any 2 of the above-Rs. 16,000 Any 3 of the above-Rs.24,000 All the 4 of the above-Rs.32,000

George Soros sold all Gold Investment early this year

2011-09-23T05:38:00.000-07:00

SHORT-ONLY LONG-ONLY Trading Calls

2011-09-22T05:38:00.000-07:00

SHORT-ONLY LONG-ONLY Trading Calls

Separate Trading Advice for Bulls & Bears.

Main Feature:

This is basically not a whole new trading advisory product in itself. However one may find this useful if one is biased towards either only buy-and-trade mentality of short-selling-only mentality.
Only short-selling or Long-only trading calls are given as per your trader’s preference.
Calls will be given in intraday stock cash, intraday stock futures, stock futures overnight, and nifty futures overnight as per the preference of the trader.
FEE STRUCTURE:

OPTION-1: You can subscribe/activate any of our SERVICES FOR TRADERS and opt for any of the two i.e. short-only or long-only calls preference. The fees remain the same.

OPTION-2: Here the fee for one month is only Rs.5000. You will get long-only of short-selling-only calls as per your preference. You will receive calls in intraday, overnight as per our analyst.

LOGIC for Short-only Long-only Trading Calls Service-

-There is this simple logic behind launching such an advisory product.

-Some people are inclined to trade with a ‘buy-and-trade’ bias only. While similarly, some are born short-seller, they trade with ‘sell-and-trade’ bias.

-However any type of bias is not useful in stock markets; they just like it that way. If the markets are rising Short-seller will wait for it to decline if he is confident about his call then average his short. Similarly buy-only or long-only trading mentality persons will remain on the sidelines in a decline phase or will not short, even in many cases he knows that market/stocks can go below certain levels. This type of long-only bull trader will wait and then take opportunity to buy at right moment.

-Thus, simply these preferences of only buy-n-trade, or only sell-n-trade is present in most of lay traders. Just take your example. Many of you might also have preference to either buy-and-trade or only sell-n-trade. As we said ahead that it is not good to have any type of bias; however such preference should not be counted as unprofessional. Many professional and renowned traders also have such preferences. But at the same time, one should also be aware about it.

So, best luck for both bulls and bears!

Regards,

Operations Manager,

MEGHA INVESTMENTS AND RESEARCH

Wealth Destruction in INDIAN AVIATION/AIRLINES STOCKS & How we avoided it

2011-09-22T00:28:00.000-07:00

Dear readers, following was our msg to all on 19 sept 2010.....

MOST IMPORTANTLY NOTE-
Long-term investors
AVOID Education, dotcom website, and Airlines stocks.
keep this in mind.
www.MeghaInvestments.com

[to view this sms, click below link and go to old pages for past yr msges,
http://www.smsgupshup.com/groups/freestockidea
(go to 46th page) ]
Also below is the print-screen of the same original msg,-

....after than also on occasions we have been alerting for exit/avoiding/sell aviation sector stocks in our sms, email, website.
….....this is due to our inherent dislike of this sector......and the till-date overall depressing history of aviation sector throughout the whole world.
…...you can read in the msg that how much emphasize we have put by telling ‘most imp note’ and writing ‘keep this in mind’

…......we have also mentioned same caution on dotcom website and education stocks.
...you might want to know whay we are a no-no to certain sectors such as aviation. There are particular reasons to that. We follow Warren Buffett’s philosophy, and in that also aviation is a no-no, so our attitude regarding airlines stocks goes with this also,
….......(...by the way...retail investor deceived/misguided/ill-guided by tv analysts etc.(usually serving vested interest of the broking/fund industry’, some of them who know (most other completely ignorant regarding this) that aviation sector will take away your money still recommend in tv and articles and other media etc.)

HORRIBLE WEALTH DESTRUCTION BY airlines stocks (our investors exited or/and avoided these stocks and saved their capital) -

1	2	3	4	5	6	7	8
AIRLINE STOCK NAME	Open price as on-20 sept 2010	lifetime high	high made since our msg	close price on-20 sept 2011	lifetime low price	low price made since our msg	% crash from (4) in stk price
Jet Air	768.80	1383	925.65	281.40	115.20	250.15	87.64%
KFA	65.25	334.45	90.15	25.80	22.10	23.35	74.09%
Spicejet	73.90	98	98	24.50	19.30 (19 aug 2011)	19.30	80.30%%

CLEARLY OUR INVESTORS SAVED THEMSELVED FROM 80% CRASH IN AIRLINES STOCKS BY FOLLOWING OUR INSIGHTFUL RESEARCH.

Find out details of our SERVICES FOR INVESTORS on below page-

http://www.meghainvestments.com/p/services-for-investors_13.html

-----------------------------------

ABOUT EDUCATION SECTOR-

More or less, the Education sector high-flyer stocks have also met similar fate.
Please Also read similar post on ‘HOW THOUSANDS OF INVESTORS SAVED THEIR MONEY FROM EDUCATION SECTOR STOCKS BUST’ Click below link-
Coming soon....

ALSO READ BELOW AN ARTICLE ON ‘WEALTH DESTRUCTION IN STOCK MARKETS”=
http://www.meghainvestments.com/2011/05/wealth-destruction-in-stocks-sks.html

Read below a recent post on KingFisher Airlines Auditors remarks about credential as 'going concern'-
Source: http://www.firstpost.com/business/kingfisher-lands-in-soup-auditors-questions-viability-84359.html

The company’s audit firm, BK Ramadhyani & Co, said in its remarks published in the company’s annual report that Kingfisher’s ability to stay in business will depend on its promoters being able to maintain a steady flow of funds into the company. It also said the company has not deposited with the government, money collected from employees as tax deducted at source and Provident Fund contributions.

Kingfisher Airlines Chairman Vijay Mallya. Luke MacGregor/Reuters

Kingfisher has accumulated losses of Rs 4321 crore, which is more than 50 percent of the company’s total networth at the end of financial year 2010-11.

The company however defended its financial health. “It is incorrect to say that Kingfisher Airlines (KFA) auditors have raised serious doubts about the survival of the Airline,” Ravi Nedungadi, CFO of UB Group, of which Kingfisher is a part, said in a statement, The Economic Times reported.

He also added that as per RBI directives, Kingfisher’s lenders had made an independent assessment of the airline’s viability.

“During the year, RBI had directed the banks to independently assess the viability of KFA and this was in fact, carried out by the lenders with the assistance of SBI Capital Markets confirming that KFA is viable i.e. as a going concern,” the airline said in an e-mail to Reuters.

Though the lenders showed confidence in the company, investors admitted the auditor’s report was a cause of concern.”Clearly, the auditor is sceptical of the “going concern” credentials of Kingfisher Airlines,” said Neeraj Monga, executive VP of Toronto-based Veritas Investment Research, in a report dated 12 September on the company’s accounting policies.

The company has also reportedly defaulted on its loans to banks and private institutions.

The airline has not posted profit since its inception in 2005. For the quarter ended June, Kingfisher widened its net loss by 43 percent to Rs 264 crore.

The term “going concern”, in accounting parlance, refers to a company’s ability to continue operations in the near future.

The annual report has been posted on the Bombay Stock Exchange website.

The auditor’s comments come at a juncture when Indian carriers are struggling despite a booming aviation market. All three major carriers Kingfisher, Air India and Jet Airways are loss-making as prices of key inputs like crude remain volatile, and consequently are unable to raise equity.

In late August, Kingfisher Airlines Ltd said its board had approved a rights issue of shares to raise up to Rs 2000 crore ($434 million).

The company gave no timing or details of the proposed issue, but analysts say raising funds for an airline company is not going to be easy.

“Resolutions have been taken, but its been three years since the airline industry has not been able to raise funds at all,” said Mahantesh Sabarad, sector analyst at Fortune Equity Brokers.

The CAG also said there have been some delays in remitting some statutory dues, pertaining to provident fund, fringe benefit tax, investor education and protection fund and employees’ state insurance.

Earlier this year, the carrier had cut its debt through a debt restructuring process in which the airline issued 116.3 million shares to a consortium of 13 banks led by State Bank of India, after conversion of compulsory convertible preference shares at Rs 64.48 a share.

The airline had restructured its debt by converting almost Rs 1200 crore of loans into equity and its debt stands at about Rs 6000 crore at end April.

Indian Investors Club: Get full-year Multi-bagger & Value-investing Stock Recommendations

2011-09-17T01:39:00.000-07:00

MEGHA INVESTMENTS AND RESEARCH

Launches

“INDIAN INVESTORS CLUB” www.IndianInvestorsClub.com

A plain-vanila full-year

Multi-bagger & Value-Investing

Stock Recommendation Service.

(Please visit the dedicated site for details)

Become an Annual Privilege Member Today!

NOTE FROM MANAGER’S DESK-

-You will find thousands of websites and analysts Very less professional and research firms online provide dedicated service to investors who seek for advice to invest in Indian stock markets.

-We already have 4 different types of advisory products for investors. However standardized they were, but there was an element of individualization and customization to each of 4 of them. While we found a whole class of investors, mainly neo investors and short to mid-term and highly active investors, who want regular advice and updates. They want to invest haphazardly unlike the 4 types of service we already have; they want ‘as and when’ type stock recommendation for investors.

-These encouraged us to design this product named INDIAN INVESTORS CLUB where our investment analyst team give out stock recommendations on as and when basis. The stock recommendation are mainly value-investing and multi-bagger types with expected target, return in % and expected holding duration. Also, the stock recommendation will include midcap, smallcap and high risk high return multi-bagger stock recommendation. While recommendation will also be given for short-duration investors of 3-6 months.

Click below for detailed features-

http://www.indianinvestorsclub.com/p/privilege-membership_22.html

Click below for details of the SMS/Email Schedule of ‘What/How you get?-

http://www.indianinvestorsclub.com/p/what-you-get.html

What we Have?-

http://www.indianinvestorsclub.com/p/what-we-have.html

About iiC-

http://www.indianinvestorsclub.com/p/about-iic.html

Fill membership form below-

http://www.indianinvestorsclub.com/p/membership-form.html

(M) 0800095267, Email- membership@indianinvestorsclub.com

Praj Industries Ltd- A sceptical viewpoint

2011-09-10T10:13:00.000-07:00

Our team member met one of our olden days informant and member of big investor group in Mumbai who happen to have a age old experience and contacts among elite investors group in Mumbai. Among many other things he said Praj Industries could become a penny stock. This was interesting if not shocking for our analyst. He tried and dug dip. The informant said some big institutional holders are considering to sell this stock which has been underperforming since 2007 from 250 levels to around 50 levels now. The guy also said that interest into green energy has peaked for the medium term atleast. Also the present global recession will cause traditional energy resources prices to correct significantly and make the green energy costlier than the traditional ones. After this stint our guy came down and the research team tried to dig deeper into this counter.

YEAR	2004	2005	2006	2007	2008	2009	2010	2011
% HOLDING OR RAKESH JHUNJHUNWALA	12.33	12.33	10.77	8.23	7.30	8.57	7.73	8.8
% SHARE HOLDING OF VINOD KHOSLA	-	-	1.94	8.88	6.15	5.26	4.01	3.11
SHARE PRICE IN JUNE MONTHS OF RESPECTIVE YEAR	5	35	80	240	175	110	80	70

(% HOLDING IS AS ON JUNE FILLINF AS PER BSE INDIA WEBSITE DATA.

RAKESH JHUNJHUNWALA HOLDING IS CALCULATED AS TOTAL OF RAKESH JHUNJHUNWALA AND REKHA JHUNJHUNWALA HOLDING.

Share prices in june is round about prices between high and low of that month.)

KEY TAKEAWAYS FROM THE ABOVE TABLE:

Vinod Khosla decreased his holding constantly from 2007 to its low at now 3.11 and sources says he is likely to exit completely by 2013. Also you can see that the holding of Rakesh Jhunjhunwala has declined from 12.33% in earlier years to below 8% to 2010 since 2007. In another words he booked profit in 5.03% from 2005 to 2008. However his holding for year 2011 is 8.8%.

Sources also says Rakesh Jhunjhunwala may be a smart investor. But in case of Praj Ind Vinod Khosla is smarter as he is a technocrat and not only financial investor like Rakesh Jhunjhunwala. He understands the industry and its present and future better than Rakesh Jhunjhunwala. So he was right in exiting the company from his holding of 8.88% to now 3.11%.

If we see from another different angle than the stock price is speaking for itself as the stock price has been witnessing sustained downtrend even though the firm’s topline has remain around 600 however declined to 555 after rising significantly to 775 in 08-09. One assumption is also that some high risk players did not like this type of shanty performance, who invested in expectation of high returns.

In the closing note the informant added that the stock price and investors like Rakesh Jhunjhunwala are holding up due to reserve that is close to 500 cr and it close to debt-free status.

Observing the stock price, we can say that it has been trading below 100 since last three years. The point is that what possible catalyst can lift this sector or this particular. There does not seem to be any big driving force coming out and pushing the prospects of this stock to a new level. If this has to be true than the performance of the company peaked in 2008-09 and now you may see in fact a decline in top line. Any way the operating margins have halved in last financial year to previous one. As said above, the close to debt free status and reserve as well as the 30% plus premium-institutional investors holding is keeping the company alive amongst others. Which is also helping the stock from becoming a penny stock by now.

Anyway, weather Praj Ind stock goes down from 70 to 7 and become a penny stock or not (remember praj is a 25 yr old company and has established facilities in diversified green energy solutions segments, also wel positioned to take any opportunity arising in this sector. The firm is mainly active in alchohol /fuel ethanol plants, brewery plant,water and waste water treatment,bio nutrients,process equipments and agri services); as per our philosophy this sector is highly specialized sector and fit for plays of PEs, VCs and wealthy private investors as well as global specialized funds. We have always advocated for small investors to keep away from complex and incomprehensible businesses. The one of Praj’s may not be incomprehensible but surely a complex one and clearly a difficult one to gauge, anticipate and estimate the impact of economic ups and downs in general conditions of country and world. This is how Warren Buffett also acts, in our opinion. Also, one has to see the pitfalls to follow in the foots of highly acclaimed successful investors (whose success and strategy is overstated many times). One has to understand since when the investor one is following is invested, when does he exits, when does he increase, decrease stake, his risk appetite. The point is following blindly to investors can be, in fact it is dangerous. Particularly true with Rakesh Jhunjhunwala, as he is not only an investor, but trader and speculator as well.(some people don't know and some will not want to believe this)

You can Read our previous article on renewable energy companies here http://www.meghainvestments.com/2010/06/renewable-energy-hydro-wind-solar-power.html However, Praj Ind is not a power generating company but solutions provider.

(Disclaimer: Some of the information is source based while some of the content is as per our research on deemed to be reliable available public data while some are the opinions of our analyst. We do not hold/recommend to buy or sell Praj ind. We do not take responsibility of reliability or accuracy of sourece based information.)

ALSO NOTE THAT THE STOCK INVESTING ARE SUBJECT TO UPDATES AND CHANGES FROM TIME TO TIME IN LIGHT OF NEW DEVELOPMENTS IN ECONOMY AND COMPANY AND SUCH OTHER THINGS.

(If you want to communicate with regard to this article then address your email to Mr.Varun on info@meghainvestments.com)

Parag Parikh's video tutorial on Behavioral Finance

2011-09-07T23:58:00.001-07:00

USFUL EXCERPTS:
If you have one set of losers and one set of winner stocks, and you need money then rather than selling the winners you may choose to sell half half of both. In this way you are managing your finances as well as avoiding behavioural anomalies.
One should not have more than 20 stocks in a portfolios because it reduces return and it is difficult/impossible to track these many 20-50 stocks.

Loss aversion wil be very low if your allocation is across asset class.
Equity stocks are best form of assets and best hedge against inflation.
Regarding gold- People now think that it is right form of investment only because the prices are rising. Behind this type of thinking your casino mindset is working
The innovations of financial markets like derivatives are always against the end user.
Write down rational behind each investment.
If you bought 1000 share of xyz at 50, and if the stock price comes to 30 and you do not think more can be bought at this level then you should sell your all holding of xyz.
Over time profits become boring and losses become terrifying.
If the profits/gains are gradual, it gives more happiness.
Keep less attention to your investment. Don’t go on looking your investments every day, why the stock went up or down.
Receiving stock alerts is only a way of destroying your mental peace.
Life is too simple but we make it complicated by technology and gadgets.
Check your inv once in a month. Just to check.
Mainly brokers make more money than traders.
Don’t sell your stock because it has doubled or you are making huge money. Sell it if you think it is overvalued and sell it if the answer to your question that will you buy it at this price is no.
Infrastructure companies mainly keep asking money from investors rather than throwing money at investors.
Deciding not to decide is also a decision.
Each one of us have to know our appetite for loss.
Company visits, analyst meets etc.is part of endowment effect. So do not determine investment decision based on that type of experience.
If the stock price goes down after you purchase it does mean that you are wrong.

Disclaimer: We are in no way related with ppfsltd.

Stock Market Blog, Stock Trading Blog, Indian Stock Market Blog, Stock Investing Blog

2011-09-07T23:11:00.000-07:00

www.meghainvestments.com is a blog cum website of MEGHA INVESTMENTS AND RESEARCH team based in Ahmedabad.

You will find,

Informative
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content in this blog cum site, as well as the details of fee based service offered by us to those interested in becoming a paid member.

Since November-2008, our research team has been producing useful content in form of reports, forecasting, investment and trading related articles, stock tips, trading strategies, indian stock market updates, mcx/ncdex commodities tips and updates, forex and world stock markets updates, multibagger stock recommendations, penny stock recommendation, value investing recommendation, and so on.

Analytical: Our research team has made milestones by regularly forecasting several market events in terms of specific security and for overall market in general. You can find the detail of which on this site and links provided on this site at various places.

Educative: You can find a host of articles which will give you non-traditional education not just in terms of knowledge of markets but sort of relealation of facts of market and investing in bold voice. Please surf the website for this articles. ‘beware investors’ is the most famous label among these articles.

Informative: informative part is mainly in terms of weekly market wrap, and such things. It is mainly public domain available information. But the specialty of reading it on megha investments blog is that you get to read insightful and bold straight from the mouth comments along with the depiction/description of events/information.

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2011-09-07T22:31:00.000-07:00

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Indian Mutual Funds monthly buy highest in August-2011 after 38 months since June 2008

2011-09-06T23:47:00.000-07:00

In a very positive note and condolence when Indian stock markets has grossly underperformed and in fact remained the 2^nd worst performing stock market after Bangladesh in Asia; the mutual fund industry has given glimpse of a silver lining.

According to data released by Sebi, the monthly net investment by Indian mutual funds for august month was at Rs.2524. Such type of huge monthly buying was way back in June 2008, almost 38 months back.

It is a well known fact that FIIs have been selling Indian stock markets since Christmas 2010 (as per our observation and updates). We have been advocating that decoupling is the only remedy for emerging economies, however it is not easy and we acknowledge not to do generalization and oversimplification for all that is to de-coupling. This type of reverse trend amongst domestic mutual funds is very encouraging. However as per another set of data, the numbers of mutual fund investors has seen a decline as well as the participation of retail investors. Read separate article below,

http://www.meghainvestments.com/2011/07/declined-participation-of-retail.html

However, the lay investors will ask, if the Indian mutual funds have bought such a hugely, then why Indian markets faced the year’s worst month that August was (after January of course) ?

Keep visiting us for more on decoupling and so on.

NIFTY SPOT closed in Red for JULY & AUGUST as per our Forecasting on 1 July based on monthly charts pattern

2011-09-04T07:00:00.000-07:00

See below, how we clearly told that JULY AND AUGUST months will close in red for Nifty Spot based upon monthly chart. OUR SMS WAS SENT ON 1^ST JULY 2011.

NIFTY SPOT MONTHLY PRICES:

MONTH	CLOSE PRICE	HOW MUCH LOWER THAN PREVIOUS MONTH CLOSE
JUNE 2011	5647.40	-
JULY 2011	5482	165.4 POINTS
AUG 2011	5001	481 POINTS
SEPT 2011	Expected to close the month abv 5001	subject to technical updates

NIFTY SPOT MONTHLY CHART:

Please click on the image to see in full size,

BELOW IS THE PRINTSCREEN OF THE SMS SENT:

(You can go back to 5^th or 6^th page on this (http://www.smsgupshup.com/groups/freestockidea) link. To go back you will see page num links on bottom right of the page on this site) (FREESTOCKIDEA is a group of free stock market sms by our company on private free sms website www.smsgupshup.com)

Please click on the image to see in full size, (YOU WILL NOTICE IN THE MSG THAT WORD 'WILL' IS USED TWICE, this shows our certainty. We have not used word like 'may','might',or 'can' or possible etc.

MEGHA INVESTMENTS AND RESEARCH team posts 2-3 SMS daily on this group.

Anyone can join free of cost by simply sending sms from their mobile,

JOIN FREESTOCKIDEA

to 567678.

If you do not receive sms on mobile timely, then you can always visit the link given to check out our updates, views and stock tips.

Inflation drags down Indians’ Savings rate at 15 year low

2011-09-04T00:34:00.000-07:00

According to a recent publication by RBI (Reserve Bank of India), the central bank of India; the rate of net financial savings of Indians’ have come down below 10% of GDP (Gross Domestic Product).

It was at 12% of GDP in 2010 while for 2011, the RBI figure is 9.7%. Stunningly this is the lowest level in last 15 years.

Economists and RBI official say sustained inflation in basic necessity products is the main culprit for this situation which is eating up extra into pockets of Indian consumers. They also believe once the inflation moderates, the savings rate should also improve again.

The financial savings of Indians’ includes cash, currencies, bank deposits, corporate of other type of deposits, shares debentures, mutual funds, life insurance, pension funds and other types of small savings schemes.

The RBI also said that there also has been an increase in household liabilities, mainly due to debt taken from commercial banks at higher rates.