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Stocks open higher following inflation reading
Wednesday May 14, 9:37 am

Wall Street higher in early trading following better-than-expected inflation reading

NEW YORK -- Stocks are higher in early trading, with the government's better-than-expected consumer price report easing some concerns about inflation.
The Labor Department's report Wednesday that consumer prices rose 0.2 percent last month alleviated Wall Street's worries about a big spike in consumer inflation due to the recent surge in energy costs.

In the first minutes of trading, the Dow Jones industrial average is up 42 points at the 12,874 level.

U joined January 2008 and ur post count is 2052! There is a limit yar! I mean 2052???? how? copy-pasting? reveal the secrets sir.hats off to u.even sudoku is a baby compared to u!

A raindrop may look too small but somewhere a thirsty flower awaits its fall.A post from sudoku seems too small ...but a sending heart remembers U a lot...
hats on sir....!

Quote of the Day ? "Analise your portfolio once in a week for sure"

'No pooling' norm to hit PMS hard, push up costs
15 May, 2008, 0415 hrs IST,

MUMBAI: Portfolio managers across the country are slowly coming to terms with the enormity of complying with the latest SEBI diktat on Tuesday, banning the pooling of clients assets under their portfolio management services (PMS) offerings.

Most brokers agree that the new regulation will make investing through PMS a lot more transparent and investor friendly. However, they also point out that it will also result in a lot of extra documentation.

Brokerages offering PMS houses will also need to hire more people to run their operations so that they can comply with the latest rule.

There is some good news for NSDL and CDSL though. Market watchers predict a huge rush for demat accounts as the erstwhile pooling allowed PMS managers to function with a single demat account for several of its customers.

As per industry estimates, close to Rs 10,000 crore is housed in portfolio management schemes, of which more than three-fourths is operated in the pool format. SEBI has given a time frame of six months for PMS houses to fall in line with changed regulations.

“They (portfolio managers) would be required to keep assets of each client separately and not in a pooled manner,” SEBI said in a release on Tuesday.

Over past few years, brokerages and PMS players had been pushing pool PMS to retail investors, eager for a slice of action in the booming stock market. As per the agreement signed, customers who had similar investment preferences could join in, without even having to open a demat account.

Pool account, in spirit, operate on the lines of asset management companies. Brokerages open ‘pool PMS’ as a common account, under one head. Fund managers pool-in investments received from clients and start investing on behalf of the whole group. The purchased bouquet of stocks are allotted pro-rata to the clients’ portfolio as per their investments into the PMS.

This ensured minimal documentation procedures for the investors and easier operations for the PMS provider. With SEBI clamping down on these pool PMS, investors who have been availing of this facility will have to open separate demat accounts. Each of these accounts will contain shares purchased specifically for the investor by the fund manager.

PMS managers also say that managing individual accounts and execute trades separately will lead to enormous strain on the brokerages. Under pool PMS, brokerages could execute trades for hundreds of clients at one go. Now with new guidelines on, brokerages will be forced to execute trades for each and every client separately. Brokerages will be forced to pass on additional transaction costs (by way of more trades and more dealers involved) to customers, they warn.

“If SEBI had intended to apply brakes on pool PMS, it would have done well by raising the threshold limit,” said a PMS fund manager. What he means is SEBI could have put a limit (say Rs 25 lakh ) over which no pool PMS could be permitted.

Broking houses usually find it easier (and economical) to manage investors with lower absolute investments in the pool format. One needs at least Rs 5 lakh to invest in PMS, as per current regulations. However, according to PMS fund managers, most brokerages will find non-pool PMSs an unviable proposition as broker’s commission on a Rs 5-6 lakh PMS account is less than Rs 1,000 every month.

SEBI has also banned portfolio managers from floating any scheme which is akin to mutual fund activity. This would mean that each investor can hope for customised services (indeed a custmised investment solution) from his PMS provider.

Ten golden rules of Dalal Street
14 May, 2008, 1350 hrs IST,Dinesh Thakkar,


Currently, the Indian markets are in doldrums and nobody is talking of stocks or investments. You may think justifiably so, as the markets are headed in no direction. Is it not exactly the opposite of the exuberant times we were witnessing a few months back. Conversely, bottoms are made in turbulent times.

It is difficult, if not impossible, to say when the markets will halt their southward journey and change direction for the better. Who knows, we might have already hit the bottom and the markets may soon return back to their upward trajectory.

My empirical observation and research have proved it that wealth making in the market has more to do with discipline and the power of time to compound growth than being smart at stock picking and timing the markets just right. To help you in your quest to make wealth in our markets, I suggest you follow the 10 golden rules of markets that will virtually ensure reasonable, steady wealth appreciation.

Bear in mind, you cannot have your cake and eat it too. Saving and consumption do not go hand-in-hand. You need to plan today for the lifestyle you want after you stop working, i.e. the finances you will require after you retire. Accordingly, save the necessary portion of your income to invest in equities. Equities, or stocks, may appear risky, but they are just volatile, they go up and down, and time is the perfect hedge against volatility.

Therefore, Rule No 1: Plan for tomorrow, today. Start saving for it now! Stagger your investments throughout your earning phase. Invest regularly and invest for the long term to buy in at an average price that includes both markets’ up and down ticks.

Never wait until you have large amounts of money to invest. However small the amount you are able to save, start early. The earlier you start, the better are your chances of making great wealth. Remember to make great gains. Time is a crucial factor, as wealth creation is a factor of both the power of compounding and the returns on your investments.

Accordingly, Rule No 2: Start early so that the power of compounding begins sooner; time is the magic that converts paise into rupees. In exuberant phases, when we have earned good money from our investments, most of us get greedy, and derivatives and futures provide an outlet for the expression of human greed. While such instruments often satisfy the whims of human greed, if taken to unrealistic levels, irresponsible investment in these securities can lead to financial ruin.

Hence, Rule No 3: Do not leverage, it is difficult, if not impossible, to predict short-term trends.
Buy markets, not stocks. We all know that our economy is in a secular phase of prosperity and the stock market is the best proxy for the growth of an economy. To benefit from our soaring economy, buy the market as a whole and not any single stock.

Consequently, Rule No 4: Buy stocks that mirror the broader indexes, but never buy a single, or a handful of stock exposures. This means that you need to spread your risk across various market segments in the event a particular stock does not perform for reasons beyond the company’s control. It is easier to predict company earnings, but difficult to predict stock prices of the same company in the short run. Ironically, over the long term, stock prices mirror growth in a corporation’s earnings.



Therefore, Rule No 5: Look at company earnings, not at stock prices. Stock prices may tempt or give the wrong impression of a company’s welfare. But to build real wealth in equities, you must always rely on declared profits and facts, rather than make decisions based on stock movements. We all tend to sell stocks when we have made profits and keep the ones that have not appreciated. Eventually, we end up holding a portfolio of companies that are not performing! It is only human to sell for profits and not to want to take losses.

Hence, Rule No 6: Keep the winners, sell the losers. Stay on top of your investments. Check constantly for stocks that are not performing and eliminate them from your portfolio if the outlook does not seem promising. This way, you will have all winners left in your portfolio to take you to your goals.

In exuberant times, we all tend to believe that the good times will last longer than they actually will. And before D-day, we will be able to sell our investments that were bought at unjustified levels. Just then, it happens that the markets turn and before we can sell out, we are left holding the bag.

For this reason, Rule No 7: Avoid being the “Bigger Fool;” it is imperative that you recognise the difference between price and value. Buy value and not momentum. When investing in stocks, your head should prevail over your heart. Resist the urge to get consumed by market chatter. Ignore hot tips from dealers and friends. It is advisable to do your own home work.

As the result, Rule No 8: Pick stocks with your brain, not your heart. Large-caps are the ones that have already proven themselves over longer periods of time and have the balance sheet acumen, strong cash flow and brains to manage businesses effectively according to prevailing situations and realistic opportunities available.

Hence, Rule No 9: Prefer large-cap stocks to small- and medium-caps. Investment in small and mid-cap stocks requires expertise and strong tracking abilities, that without, your portfolio will under-perform. Do not short sell a stock just because it is going up, and thus, one day it must come down. Newton’s law is not applicable to the markets. What goes up does not necessarily come back down! If companies are able to sustain earnings’ growth for long periods, then its stock may go up, up and up, or it can even remain high without any reason for a long period of time.

Because of this, Rule No 10: Markets can remain irrationally up, or continually climb for the right reasons. Therefore, never go short. It will expose you to unnecessary risks.

Realty does reality check, prices fall 15-20% in Q1
14 May, 2008, 0630 hrs IST,

NEW DELHI: If high prices have been holding you from buying your dream house all these years, here’s something to cheer about. In the first quarter of this year, there has been a 15-20% price correction in markets across the country, especially in the residential segment.

In fact, in many markets, the level of transactions have gone down drastically, which has resulted in this dip. This is also because residential capital values in some micro markets in the metros have shown a negative growth in the last one quarter.

After tracking capital values in metros such as Mumbai, Chennai, Bangalore as well as Pune and the National Capital Region (NCR), the result was that either there has been a fall in prices of residential values or they have not increased in the last three months. In fact, places like Gurgaon have seen a dip of 15%, while the plot rates have come down by 20% in Noida. In Greater Noida, the plots which were selling at Rs 55,000-60,000 are now available for Rs 40,000 to Rs 45,000. In Indirapuram, rates of flats have come down to Rs 2,500 to Rs 2,700 per sq ft from Rs 3,000 to Rs 3,200 per sq ft.

Even prime areas in Delhi such as Friends Colony, Maharani Bagh, GK I & II, Prithviraj Road and Hauz Khas have witnessed a 5-10% fall in the prices.
However, in Mumbai, prices at Colaba, Cuffe Parade, Central Worli, Bandra and Juhu have remained stable in the last three months. The story is the same in Bangalore, Hyderabad and Chennai where the market has not witnessed an increase in the last one quarter. In Pune, localities like Kalyani Nagar have witnessed a dip of 15% in residential values in the last three months.

Says Shveta Jain associate director (residential) Cushman & Wakefield India: “The exceedingly high price points and spiralling interest rates have contributed to a reduction in interest from speculative investors due to decrease in holding power, resulting in a clear shift to a largely end-user-led demand. More price sensitive locations and developments in certain parts of the country have been witnessing a rationalisation of capital values in recent months, wherein the market is finally reaching price thresholds.”


Agrees Santhosh Kumar, deputy CEO of Jones Lang LaSalle Meghraj (JLLM), a property consultant. “In the current real estate scenario, what is being observed is a stabilisation of select markets. A consistent upswing is not possible in any market,” he says.

“When a large level of supply is in the offering. Real estate markets have observed high growth levels in the recent past. However, in certain areas, market stabilisation has been observed. This indicates that there are not many buyers for the prices quoted for various real estate typologies at this point of time,” says Santhosh Kumar, deputy CEO of Jones Lang LaSalle Meghraj.

In fact, Sunday ET spoke to a number of developers, but they refused to comment on the price correction. But they agreed that there was a slowdown in the last three months. Many of them felt that the biggest risk to growth in this sector was sales to speculators. Of course, how this inventory build-up will affect prices going forward remains to be seen. Further, the developers’ tendency to divert money from one project to another — rather than to keep a financial cushion — can lead to a chain reaction, they added.

In various markets, despite a slowdown in demand, essentially from the speculative investors, developers have refrained from reducing rates and instead some of them have started offering incentives to attract buyers. Sales in secondary markets have also taken a beating with very few transactions taking place at relatively lower price points than market expectations.

Anu's Laboratories IPO subscribed 0.25 times
14 May, 2008, 1652 hrs IST,

MUMBAI: The initial public offering of Anu's Laboratories was subscribed 0.25 times till 4 pm Wednesday, as per the NSE website. The issue closes on May 15.

The issue has received 9,63,720 bids against 38.20 lakh shares on offer in the price band Rs 200-210 per share. Around 2,55,720 bids were received at the cut off price.

The issue comprises a reservation of upto 2,00,000 equity shares for employees and a net issue to the public of 36,20,000 equity shares. The issue will constitute 31.63 per cent of the fully diluted post issue paid-up capital of the company.

The non-institutional investor portion of 5,43,000 shares was subscribed 0.39 times. Qualified institutional buyers bid 0.21 times the 18,10,000 shares allocated to them. The retail portion was subscribed 0.10 times the 12,67,000 shares allocated. Employee reservation of 2,00,000 shares was subscribed 0.23 times.

Asian stocks, dollar gain; Sony jumps 9 pc
15 May, 2008, 0856 hrs IST,

HONG KONG: Asian shares and the dollar rose on Thursday after investors welcomed benign US inflation data as a sign the Federal Reserve will have more wiggle room to deal with the downturn in the world's biggest economy.

Improving earnings prospects also comforted markets. Japan's Sony Corp surged 9 per cent a day after it issued a surprisingly upbeat operating profit forecast despite the challenges posed by a slowing US economy and a stronger yen.

Oil prices retreated from record levels, easing some of the inflation fears that have hit Asian stocks this month, and encouraging investors to sell their safe bond holdings to bet on riskier assets.

"There is certainly positive momentum in the market," said Lucinda Chan, division director at Macquarie Equities in Sydney.

"I think that despite all the uncertainty, these are often very good times for investments and people are beginning to sense that mood now," she said.

A rally in Asian stocks last month fizzled when May started with it a surge in oil prices to record highs that reinforced fears the world economy could face a crippling combination of high inflation and meagre growth.

The MSCI index for Asian stocks outside Japan rose 0.5 per cent as of 0215 GMT, up some 18 per cent since the mid-March lows but down about 7 per cent for the year.

The gains matched Walls Street's advance after data on Wednesday showed US consumer prices rose a 0.2 per cent in April, less than expected.

That is expected to give the inflation-wary Federal Reserve more latitude to keep US interest rates low at 2 per cent as it seeks to support the national economy and calm financial markets.

RESILIENT EARNINGS

Japan's Nikkei share average rose 1 percent, extending its gains for a fourth day, reflecting growing optimism about earnings prospects and gains of exporters such as Honda Motor Co Ltd, which benefit from a soften yen.

Sony posted on Wednesday a surprise quarterly loss due to the falling value of some securities it holds, but its operating profit forecast for this financial year was rosier than expected as it aims to boost TV sales and wipe away losses on the PlayStation 3.


Improved earnings outlooks also lifted other regional stocks, with South Korea's LG Electronics Inc up 5 per cent afer hitting a record high earlier in the day.

South Korea's KOSPI index jumped 1.5 per cent, with Samsung Electronics Co Ltd hitting a new all-time high a day after announcing a top management reshuffle.

Sock markets in in Taiwan, Australia, Singapore, Hong Kong <.HSI> and Shanghai gained less than 1 percent.

DOLLAR GAINS

The dollar edged up against other Asian currencies, crawling back towards a two-month high, as the tame US price data helped ease fears that high inflation could jeopardise efforts to kick-start the sluggish economy.

The dollar was up 0.2 per cent to 105.27 yen, near the 105.70 level it hit earlier this month, which had marked its highest since late February.

Some of the inflation concerns also eased after oil prices retreated from the record $126.98 a barrel hit on Tuesday after assurances by Iran it had no plans to cut exports and a U.S. inventory report that showed a rise in supply of distillates.

US crude futures were down 46 cents at $123.76 in Asian trade.

Gold also tracked oil prices lower, trading at $863.20/864.20 compared to $865.05/866.25 in late New York trade on Wednesday.

As is usual in cases of rising risk appetite, regional bonds fell, with Japanese government bond futures extending sharp losses suffered the previous day.

SEBI approves Rel Comm unit IPO: Report

New Delhi, May 15: Reliance Communications has got approval from the market regulator for an initial public offer of 10 percent of its telecom tower unit, two people familiar with the development said on Thursday.

One source said the IPO could raise up to USD 1.4 billion.

"The comments have come from the SEBI," a banking source with direct knowledge of the deal said. "That means the company can go ahead with the IPO, taking into account the comments."

He did not give details of the comments from the Securities and Exchange Board of India (SEBI).

A spokesman for SEBI could not be reached immediately.

Reliance Communications, part of the Anil Dhirubhai Ambani Group, has said it planned to sell 89.2 million shares in Reliance Infratel, or 10.05 percent of the post-issue capital, in the IPO.

Reliance Infratel owns mobile towers and other infrastructure.

"SEBI has approved the prospectus. Now it will go to the Registrar of Companies," said a second source, who also had direct knowledge of the issue.

"Plans are to raise 50-60 billion rupees (USD 1.2-USD 1.4 billion)," he said.