Tuesday, 31 January 2012

Morning Summary- Market Synopsis- 31 January, 2012

Good Morning Everyone,
Indian benchmark indices rose over one percent in the morning session today on fresh buying by funds and retail investors tracking a firm trend in the Asian markets. The Sensex was up 182 points at 17045 and the Nifty was up 58 points at 5144. SBI is trading higher by 2.5% at Rs 2042 after the government agreed to infuse Rs 7900 crore into the bank through a preferential issue. Globally, at a summit meeting on Monday, European leaders agreed on a permanent rescue fund for the euro zone and endorsed a German-inspired stricter budget discipline, but they fell short of reconciling fiscal austerity with growth. Sectorally, all the indices except Capital Goods were seen trading in the green. Market breadth was positive and three stocks advanced against every single decline.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Thomas Alva Edison


Market Heatmap- January 30, 2012

On the sectoral front, all indices ended negative. The Capital Goods index stood as the biggest loser of the day followed by the Power and Realty indices. The market breadth too closed weak as only three stocks were seen advancing for every eight declines.Find out more at : http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 30 January, 2012



Markets snapped a four week long rally today and started the week on a negative note. Some profit-booking was seen after a month's strong rally. Further, ahead of today's EU leaders' summit, the undercurrent remained cautious. In addition, lower-than-expected Q4 GDP growth in the US is causing investors to be a little more guarded. Even the broader indices were in the red. The Small-Cap and the Mid-Cap counters closed down by nearly 1.9% each.
(Pic. Source- bseindia.com)

BMA Gyaan- What is Contrarian Investing?


The BMA Wealth Creators Screensaver

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Intraday Summary- Market Synopsis- 30 January, 2012

The market is seen sliding down since morning. Currently, the Sensex is trading near the 16950 level, whereas, the Nifty is hovering around 5120 level. The midcap and the small-cap counters are trading negative.  On the sectoral front, all the indices are trading in red. Capital Goods and Power indices are leading the list of losers. Further, the market breadth is negative as only four stocks are seen advancing for every seven declines.
(Pic. Source- bseindia.com)

Monday, 30 January 2012

Morning Summary- Market Synopsis- 30 January, 2012

Good Morning Everyone,
As anticipated, the Indian equity indices lost ground in the early morning trade. Investors are seemed to be stepping back after a month's strong rally while the undercurrent remains cautious ahead of today's EU leaders' summit. Lower-than-expected Q4 GDP growth in the US has also caused investors to be a little more guarded. The midcap and the small-cap counters are trading negative. On the sectoral front, except for the FMCG index, all the other indices are trading in red. Further, the market breadth is negative as only two stocks are seen advancing for every three declines.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Mahatma Gandhi. BMA Wealth Creators pays homage to Mahatma Gandhi on Martyrs' Day


Saturday, 28 January 2012

Market Heatmap- January 27, 2012

Sectorally, Oil & Gas, Consumer Durables and Technology stocks led the uptrend advancing over two percent each while Realty, FMCG, Banking and Power remained subdued for the day. Market breadth was favourable for the bulls and two stocks advanced against every single decline.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 27 January, 2012

The key Indian equity benchmarks ended higher today extending the three week old rally after the RBI slashed the cash reserve ratio (CRR) by an aggressive half a percentage point to ease liquidity conditions and boost credit. The undercurrent today was also supported by a global rally after the Federal Reserve pledged to keep interest rates exceptionally low till the end of 2014 and indicated at a possible QE3 down the line to boost the US economy. 
(Pic. Source- bseindia.com)

BMA Gyaan- A brief history of the Indian Rupee

India was one of the first issuers of coins (circa: 6th Century BC), and as a result it has seen a wide range of monetary units throughout its history. There is some historical evidence to show that the first coins may have been introduced somewhere between 2500 and 1750 BC. However, the first documented coins date from between the 7th/6th century BC to the 1st century AD. These coins are called 'punch-marked' coins because of their manufacturing technique.
Over the next few centuries, as traditions developed and empires rose and fell, the country's coinage designs reflected its progression and often depicted dynasties, socio-political events, deities, and nature. This included dynastic coins, representing Greek Gods of the Indo-Greek period followed by the Western Kshatrapa copper coins from between the 1st and the 4th Century AD.
In 712 AD, the Arabs conquered the Indian province of Sindh and brought their influence and coverage with them. By the 12th Century, Turkish Sultans of Delhi replaced the longstanding Arab designs and replaced them with Islamic calligraphy. This currency was referred to as 'Tanka' and the lower valued coins, 'Jittals'. The Delhi Sultanate attempted to standardise this monetary system and coins were subsequently made in gold, silver and copper.
In 1526, the Mughal period commenced, bringing forth a unified and consolidated monetary system for the entire Empire. This was heavily influenced by the Afghan Sher Shah Suri (1540 to 1545) who introduced the silver Rupayya or Rupee coin. The princely states of pre-colonial India minted their own coins, all which mainly resembled the silver Rupee, but held regional distinctions depending on where they were from. During the late 18th Century when political unrest occurred, agency houses developed banks such as the Bank of Bengal and Bahar, The Bank of Hindustan, Orient Bank Corporation and The Bank of Western India. These banks also printed their own paper currency in the Urdu, Bengali and Nagri languages.
It was only in 1858 when the British Crown gained control of the one hundred Princely states, and subsequently ended the Mughal Empire, that the coin's native images were replaced by portraits of the Monarch of Great Britain to indicate British Supremacy. In 1866, when the financial establishments collapsed, the control of paper money also shifted to the British Government. This was subsequently passed to the Mint Masters, the Accountant Generals and the Controller of Currency. In 1867, the Victoria Portrait series of bank notes was issued in honour of Queen Victoria.
After gaining its independence in 1947 and becoming a republic in 1950, India's modern Rupee reverted back to the design of the signature Rupee coin. The symbol chosen for the paper currency was the Lion Capital at Sarnath which replaced the George VI series of bank notes. In 1996, the Mahatma Gandhi Series of Paper notes was introduced.

Intraday Summary- Market Synopsis- 27 January, 2012

The benchmark indices pulled back from day's lows as buying activity resumed at lower levels even as the cues from peers were subdued. The Sensex is up 110 points at 17187 while the Nifty has advanced 34 points to 5200 levels. Sectorally, Oil & Gas, Consumer Durables and Metals were leading the list of gainers with gains of over two percent. On the other hand, Realty, FMCG, Banking and Power were seen trading in the negative territory. Market breadth was positive and two stocks advanced against every single decline.
(Pic. Source- bseindia.com)

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Morning Summary- Market Synopsis- 27 January, 2012

Good Morning Everyone,
After the RBI’s 50 basis points CRR cut, the Federal Reserve has surprised the markets by pledging to keep interest rates “exceptionally low” till late 2014. Besides, the Fed has also hinted at QE3 in future to mitigate the impact on the US from the euro area debt debacle. The Indian markets began the trading session on a positive note with the Sensex having opened at 17,201, up 124 points and the Nifty at 5216, up 58 points. Though the markets have come off their days highs, still they are trading with a positive bias. The market breadth is positive as the broader indices are also seen trading with gains of around one percent. Most of the sectoral indices are in the positive terrain, led by Metals, Teck, Consumer Durables, IT and Oil & Gas stocks. On the other hand, FMCG and Banking indices are trading in the negative.

(Pic. Source- bseindia.com)

Thursday, 26 January 2012

EQUITY RESEARCH: IRFC Bond Issue

Tenets of Investing
IRFC (Indian Railway Finance Corporation), a dedicated financing arm of the Ministry of Railways has come up with an issue of tax free secured redeemable Non Convertible bonds with an issue size of Rs. 3,000 Crores, with an option to retain oversubscription upto Rs. 6,300 Crores.  The company offers 8.15% and 8.30% per annum to the retail customers (individual and HUF below Rs. 5 lakh investments) for bonds with maturity periods 10 and 15 years respectively. HNIs (High net worth individuals) and QIPs (Qualified institutional investors) will get interest rates of 8.00% and 8.10% p.a. for the same terms. The bonds have secured the rating of ‘AAA’ by ratings agencies CRISIL, CARE and ICRA
The tenets for application to the above bond are as follows:

Take the advantage of peaking of the interest rate cycle: The Reserve Bank of India had earlier indicated that the interest rates have peaked and further rate reduction would depend on growth and inflation. In the monetary policy meet yesterday, it has reduced the cash reserve ratio to 5.5% from 6% which highlights that the interest rate cycle has peaked and that the central bank is now attempting to increase liquidity. When the interest rates are at peak, it is the best time to invest in fixed income instruments as the value of bonds will increase with a fall in market interest rates.  Thus, with the interest rates probably at its peak, retail investors will benefit if they sell the bonds after some period when the interest rates in the market goes down enough to reward high premium.

Tax Advantage: Tax-free bonds are issued by the government entities as they are important to the government in terms of building the country’s infrastructure.  The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961. These bonds score well for those in the highest tax bracket. So if you invest 1 lakh in IRFC, and you are in the highest tax bracket, you will get an interest income of Rs 8,300 per annum for 15 years which is tax free. As against this, even if you earn a 9% interest in bank fixed deposit and you are in the highest tax bracket (30.9%) you will earn an interest of Rs 9,000 per annum but will pay a tax of Rs 2,781, so the net interest you earn is only Rs 6,219, or yield of 6.22%.


Listing Gain:  These bonds do not qualify for upfront tax savings, but the interest generated is tax-free as against the 80CCF infrastructure bonds whose interest is taxable. With the tax exemption on the interest of the bond and an effective pre-tax interest rate of 11.8% for a person who falls in the tax bracket of 30%, we expect the bond to list at a premium of around 10-12%.

Thus, the investor will get a significant return on listing premium in a very short time. To this, if we add the increase in price due to a fall in interest rate of around 1% in the coming year, we expect a further premium of 10-15%. Thus, one can expect a significant premium in the bonds in the coming years with the fall in the interest rates and the recurring tax benefit on the interest income.

Terms of the Issue















(BMA Wealth Creators: Equity Research)

Market Heatmap- 25 January, 2012

Sectorally, all the sectors except Capital Goods closed in the positive. Market breadth was positive and two stocks advanced against every single decline. The stock market will remain closed tomorrow, 26 January 2012, on account of Republic Day.Find out more at : http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 25 January, 2012

The market opened flat today with an upward bias, following positive cues from other Asian peers. However, trading was volatile during the day as traders squared off positions of January series F&O contracts. A positive opening across European peers, combined with consistent buying in Metal and PSU stocks ensured progress above the equator during mid-session, and an upbeat closing. Sensex closed at 17011 with a gain of 81 points while Nifty ended the day at 5158 adding 31 points.
(Source- bseindia.com)

Republic Day: Let's believe in India by A.P.J. Abdul Kalam

I have seen three Indias in my life. The first one was the country of my childhood - a nation ruled by a foreign colonial power. It was a country struggling for independence . That country had a vision for independence which was led by great mass leaders like Mahatma Gandhi and Jawaharlal Nehru.

After we got independence in 1947, I witnessed another India. That India was independent but it still strived for recognition as it recuperated from the injustices of the colonial rule that lasted for more than a century. It was an India of hopes and dreams. It was an India that dreamt of having self-sufficiency in food, a strong economy and a position of respect in the international arena, which it really deserved. Many leaders, scientists, servicemen and social reformers worked very hard to build the newly independent nation through economic development coupled with social equity and democracy.

Then I saw the third phase of India, an era which belongs to present-day youth. Now, India is a land of opportunities, growth at previously unimaginable rates, a strong workforce and technological leadership . Six decades back, few would have dared to imagine that a nation of such diversity - often termed by some as an experiment in democracy - would eventually find its place amongst the top economies of the world. Who would have imagined that one day India would have worldclass educational institutions and it would be the first country to discover water on the lunar surface.

The three Indias I have lived in and witnessed are quite different from each other. We have come a long way since 1950, when we became a republic. Of course, there are still many important issues such as poverty , illiteracy and corruption that need to be addressed.

The Indian economy was growing at an average of 9% per annum till 2008. In 2009-10 , our economy was affected by global economic turbulence, but still it managed to grow at more than 7% at a time when many other countries were facing recession . Even in the last quarter of 2011, with the economic scenario in the US and Europe looking quite bleak, India grew at 7%. In the present circumstances, I often ask myself what type of innovation is needed to enrich the Indian economy and make other world economies better. I have been talking about this important issue with many experts including those from the Indian Institutes of Management.

On the basis of these discussions, I believe that our economy will not be affected by the current financial crisis. India will escape this turbulence because of the following reasons:

The liberalization process in India has its checks and balances which are consistent with the unique social requirements of the country

The Indian banking system has always been conservative which has protected from the global crisis The Indian psyche is generally savings oriented and living within one's means is part of our mindset The purchasing power of the 350-millionstrong Indian middle class While developed nations are in turmoil, in India sectors such automobile, cement and financial services have been posting significant gains. We have reached a level of development where innovation has become part of our thinking. Now we need to apply this thinking to rejuvenate the agricultural sector. It's time to make value addition to the agriculture sector and to small- and mediumscale industries and enterprises so that they can all make greater contribution to India's growing GDP.

I foresee tremendous possibilities for creating new markets and jobs. This can be done by tapping the potential of the rural population and by creating more employment in the countryside. There is huge potential for what I call public-private-citizen (PPC) partnerships and international cooperation in these areas.

India's performance in information technology, pharmaceuticals, small-scale industries and infrastructure has given a new dimension to our economy. With a credible legal framework , robust banking and financial system, skilled manpower and a dynamic 600-million-strong workforce , India has become an attractive proposition for the global order.

At the domestic level, India is focusing on bringing sustainable development to its people through rural and urban infrastructure , quality education, healthcare, environmental upgradation, efficiency in public institutions for better and enhanced delivery of essential services on time, reforms in the financial system for better global integration and a proactive regulatory system.

All this is critical to India becoming a truly global player. More than 60 years of democratic vibrancy - which has provided good leadership to the nation -- gives us confidence to manage socio-economic turbulence. It also helps us in providing leadership to 1.2 billion people in a democratic , multicultural, multi-linguistic and multi-religious environment.

With such a positive outlook, here is how I visualize India in the year 2020. Eight years from now, India will be a nation, where The rural-urban divide is reduced to a thin line There is equitable distribution and adequate access to energy and quality water Agriculture, industry and service sectors work together in symphony Education is not denied to any meritorious candidate because of social or economic discrimination.


(The writer was President of India from 2002 to 2007. He is the author of 'India 2020: A Vision for the New Millennium')
(Source- http://timesofindia.indiatimes.com)

BMA Gyaan- What is Net Present Value (NPV)?


THe BMA Wealth Creators Screensaver


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Morning Summary- Market Synopsis- 25 January, 2012

The Indian Indices began the trading session on a positive note with the barometer index, Sensex, regaining the psychological 17000 mark. Both the indices, however lost some of their gains and are currently trading almost flat with moderate gains. The indices are expected to remain volatile on the back of mixed global cues and the F&O expiry for the January series contracts due today. Most of the sectoral indices were seen trading in the green with Banking and Capital Goods being the only losers. Market breadth was positive and two stocks were seen advancing against every single decline.
(Source- bseindia.com)

Wednesday, 25 January 2012

BMA Words of Wisdom by Mahatma Gandhi


News Hour- TCS gets green signal for Indore SEZ

NEW DELHI: Government today permitted IT software major Tata Consultancy Services (TCS) to set up a Special Economic Zone at Indore in Madhya Pradesh, even as it allowed Videocon group to pull out from its SEZ project at Jalpaiguri in West Bengal.

"SEZ proposal by TCS has been cleared," a Commerce Ministry official said after meeting of the Board of Approval (BoA). 

The green signals to TCS and a few other promoters have been given at a time when SEZs have lost sheen as a vehicle of investment in the wake of imposition of Minimum Alternate Tax (MAT) on the SEZ developers and units in the zones. Slowdown in the realty market has also added to the uncertainty among the developers. 

The Commerce Ministry, the nodal authority for the SEZs, seems concerned over the entrepreneurs losing interest in these zones, which were initially meant to be tax-free areas. 

"SEZs will be strengthened if we allow people to come and go as and when they want," a Commerce Ministry official said. 

The BoA allowed L&T and Videocon Realty & Infrastructure to withdraw SEZ projects. The L&T project was to come up at Coimbatore in Tamil Nadu.

"Yes, whosoever has asked to exit, we are not standing in their way," he said. 

The Videocon firm had approached the Centre to withdraw its project at Jalpaiguri due to "latest business outlook" in the northern region of West Bengal. It had been granted a formal approval in May 2009. 

Eleven developers, including that of Parsvnath SEZ Ltd had requested for extension of time for execution of their projects. 

Out of 381 notified zones in the country, only 148 have become operational. The maximum number of them are in sectors such as IT/ITES, engineering, electronics, hardware and textiles. 

Commerce Ministry has floated a discussion paper to revamp its SEZ policy. 

(Source- http://economictimes.indiatimes.com)

Market Heatmap- 24 January, 2012

Market Heatmap,
Mining and Mineral, FMCG, Realty and Capital Goods- Electrical Equipment ended in red. Power Generation and Distribution, Automobile and Non Ferrous Metals had mixed performances. Other sectors ended in green.Find out more at : http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 24 January, 2012

Key benchmark indices trimmed gains in late trade as European stocks dropped. The Sensex settled below the psychological 17,000 mark, having alternately moved above and below that mark in intraday trade. The Reserve Bank of India (RBI)'s latest move to cut the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at a quarterly policy review today boosted investor sentiment. The breadth of the market was positive as three stocks advanced against two declining stocks. The near-month January 2012 F&O contracts expire tomorrow.High volatility is expected on the bourses tomorrow as traders roll over positions in futures & options (F&O) segment from the near-month January 2012 series to February 2012 series.
(Source- bseindia.com)

FUTURE SHINING - An exclusive interview of our MD & CEO Mr. Anubhav Bhatter on Wealth Management and Financial Planning

With a customer base of over 1,00,000, BMA Wealth Creators Ltd aims to be the biggest financial service provider in eastern India, says Anubhav Bhatter

What do you mean by wealth management and financial advisory?
Wealth management is a professional service which is a combination of financial/investment advice, accounting/tax services, and legal/estate planning in exchange for a fee. Financial advisory is an in-depth discovery process where an advisor will work with you to understand and document what you want to do in this lifetime, from now until retirement. 

What is the current wealth management scenario?
The wealth management service sector in India is a highly fragmented industry served by more of unorganized players. Given the favorable market landscape and expected regulatory boosts by the government to promote this sector, the wealth management sector is well poised for growth in the coming times. 


When should one start on financial planning?
Financial planning should start as early as possible. Those who begin investing at a young age stand to lose less than those who start investing at a later age. 


How are an individual’s financial goals determined?
The first step in financial advisory services is determining an individual’s financial goals, i.e. his purpose and priorities in life. Financial planning then focuses on devising a realistic plan to achieve and attain these goals. 


Does wealth management help to deal with economic uncertainty?
Financial planning is most important during periods of extreme volatility. When economies are going through financial turmoil, you need the highest level of certainty and clarity to know what you should be doing. 


Describe the journey of BMA and its future plans... 
Established in the year 2005, we started our retail operations in 2006 and soon became one of the fastest growing financial companies in India. In the year FY11, our company marked its entry into the retail asset business. Currently, we cater to a customer base of over 1,00,000.We aim to be the biggest financial service provider in eastern India. 


    — Bhatter is MD & CEO, BMA Wealth Creators Limited
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Ref: Economic Times, Kolkata, Tuesday January 24, 2012



News Hour- Indian enterprise IT spending will grow 10.3% in 2012: Gartner

BANGALORE: Indian enterprise IT spending across all industry markets is forecast to surpass $ 39 billion in 2012, a 10.3 per cent increase from the previous calendar year figure of $ 36 billion, says Gartner Inc. 

The growth of IT in India is expected to continue, with an annual increase to exceed this level through to 2015, the technology researcher said in a statement. 

"The pace of economic growth in India, with a mild, by global standards, dip during the worldwide recession in late 2008 and 2009 --has brought the role of IT into sharp focus within many enterprises," said Derry Finkeldey, principal research analyst at Gartner. 

The Indian enterprise market is quite distinct from other markets in Asia/Pacific, said Finkeldey. 

"The retail industry is expected to achieve the strongest growth in percentage terms in 2012, where IT spending is forecast to grow 11.8 per cent," Gartner said. 

"Recent decisions to allow 100 per cent foreign direct investment in single brand retail, and up to 51 per cent in multi-brand retail, are expected to provide the sector with a significant boost in terms of IT usage and adoption. Selection of partners with deep vertical expertise will be crucial to success," it said. 

The best growth opportunities in terms of actual dollars would remain within the large manufacturing, government- and state-owned enterprises, communications and financial services sectors, it was state
d.
(Source- http://economictimes.indiatimes.com)

BMA Gyaan- Golden Rules of Investment.


Intraday Summary- Market Synopsis- 24 January, 2012

The market was trading at nearly two-month high with Sensex gaining 290 points at 17,050 and Nifty moving up by around 90 points to 5,137. The gains came with RBI's attempt to inject liquidity by cutting cash reserve ratio (amount of funds that banks have to keep with RBI) by 50 basis points to 5.5% - for the first time since January 2009. Though the repo rate, which is the rate at which the RBI lends funds to banks, remained unchanged, the easing of liquidity is expected to lead to bring in a relief in the current credit squeeze. The rate sensitive sectors which were hard hit in the morning, led the list of gainers currently. Banking, Capital Goods, Realty and Metals registered gains of over two percent. Market breadth was strong and nearly two stocks advanced against every single decline.
(Pic. Source- bseindia.com)

News Hour- Banking stocks shine after CRR cut by RBI

NEW DELHI: Banking stocks rallied on Tuesday after the Reserve Bank of India (RBI) cut the cash reserve ratio for banks by 50 basis points to 5.50%, a move that eases tight liquidity in the banking system. 

The cash reserve ratio, the proportion of deposits that banks have to hold with the RBI, is a popular instrument to inject cash into the system. It now stands at 5.5%. 

Banks are borrowing more than Rs 1.2 lakh crore from the RBI, which is double of what the central bank has said it is comfortable with. 

"The move was expected as the central bank had to release some liquidity in the market to reduce banks' reliance on overnight funding from the RBI. It's a little premature to look at interest rate cut by the central bank," said Deepak Parekh, chairman, HDFC Bank

Based on technical parameters Bank Nifty could see levels up to 10,025 in the near term and SBI will be the major contributor to the bank Nifty as the largest public sector bank has already crossed its highest levels of Rs 1990 seen in October 2011. The rise in Bank Nifty will be followed by ICICI Bank and Axis Bank," said Rakesh Gandhi, Sr Technical Analyst at LKP Securities Ltd. 

"Maruti Suzuki India Ltd and Tata Motors also look attractive at current levels in the auto space," added Rakesh. 

The BSE Banking index is the largest gainer among the sectoral indices and is up over 200 points or 2.5%, compared with less than 1.3% gain in the benchmark index Sensex. 

Among the individual stocks, Bank of India is the largest gainer in the BSE Banking index, up over 6% followed by Bank of Baroda (up 5.6%), Canara Bank (up 4.9%), IDBI Bank (up 3.5), State Bank of India (up 3.2%) and ICICI Bank (up 2.9%) at 12:15 p.m. 

(Source- http://economictimes.indiatimes.com)

BMA Gyaan Video- What Is An Annuity?


BMA Words of Wisdom by J.R.D. Tata.


Morning Summary- Market Synopsis- 24 January, 2012

Good Morning Everyone,
Markets traded with moderate gains today, ahead of the Reserve Bank of India’s review of the monetary policy. The Sensex advanced over 45 points at 16797 while Nifty jumped nearly 10 points at 5056. The rate sensitive sectors were seen trading in the red with Realty, Auto and Banking posting the biggest losses. The opinions for RBI’s stance in todays monetary policy meet are mixed. While some feel that the RBI may cut cash reserve ratio (CRR), others feel that for now the central bank will maintain a status quo with a dovish outlook. The market breadth was neutral with one stock advancing for every single decline.

(Pic. Source- bseindia.com)

Tuesday, 24 January 2012

News Hour- Monetary policy: RBI likely to keep policy rates unchanged, say bankers

NEW DELHI: The Reserve Bank is likely to keep policy rates unchanged in the third quarterly review of monetary policy tomorrow, even as inflation and economic growth rate have eased, say bankers. 

"I don't see moderation in the interest rate (in the upcoming policy review). CRR (Cash Reserve Ratio) cut I am not hopeful," SBI Chairman Pratip Chaudhuri said.

"I think there would be strong measures to indicate that RBI wants inflation to be stamped out totally," he said. 

Headline inflation fell to a two-year low of 7.47 per cent in December, 2011. Food inflation stood at (-)0.42 per cent as of January 7. 

On the other hand, in the July-September the economy grew by 6.9 per cent -- the lowest level in over two years. 

Indian Overseas Bank CMD M Narendra also said the central bank is likely to keep policy rates unchanged for a while. 

There is a little possibility of changing the CRR in the coming policy review, Narendra added. At present, CRR, the portion of deposits which commercial banks keep with the central bank, stands at 6 per cent. 

Canara Bank Chairman and Managing Director S Raman said that there was some possibility of RBI slashing CRR by 25 basis points to infuse liquidity in the light of moderation in industrial activity. 

Kotak Mahindra Bank Managing Director Uday Kotak said: "Domestic liquidity is tight as you can see at numbers...at the most the market can hope something on CRR to correct the domestic liquidity situation". 

Banks are drawing over Rs 1,00,000 crore from the repo window everyday, even though RBI is carrying on Open Market Operation on weekly basis to ease liquidity pressure. 

It is to be noted that in its last review in December, the RBI pressed the pause button on its monetary tightening measures and said it might go for rate cuts in the future depending on moderation in inflation.  "From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth," RBI Governor Subbarao had said in the last policy review. 

The central bank had hiked interest rates by 375 basis points between March, 2010 and October, 2011 to deal with the persistently high inflation, including rising prices of food items. 

The government has already revised the GDP growth forecast downwards for the current fiscal. GDP is expected to clock a growth rate of about 7 per cent against 9 per cent projected earlier.

Market Heatmap- 23 January, 2012

Refineries, Mining and Mineral Products, Non Ferrous Metals ended in red. Banks, IT, Automobiles, Steel, Pharmaceutical and Power and Distribution sectors had mixed performances. Rest of the sectors ended in green. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 23 January, 2012

Indian stocks held near a six-week high before the Reserve Bank of India (RBI)'s policy meeting tomorrow. The central bank is widely expected to keep its key lending rate viz. the repo rate steady at the third Quarter Review of Monetary Policy 2011-12 as headline inflation remains high. Reliance Industries Ltd. fell the most in three weeks after disappointing Q3 results. Larsen & Toubro Ltd., the largest engineering company, and Maruti Suzuki India Ltd., the biggest carmaker, erased losses after their earnings report. Sensex, gained less than 0.1% to close at 16,751.73 while S&P CNX Nifty Index decreased 0.05% to close at 5,046.25. The breadth of the market was neutral as one stock advanced against each declining.
(Pic. Source- bseindia.com)

News Hour- Wipro ties up with Oracle to offer cloud-based HRM modules

BANGALORE: Wipro Technologies, the global information technology, consulting and outsourcing business of Wipro Ltd, today announced the launch of 'Wipro SprintHR', a cloud-based platform offeringOracle Fusion Human Capital Management (HCM) modules. 

"It is available as a SaaS (software-as-a-service) model and is designed to help enable enterprise customers transform their HR processes," city-headquartered Wipro said in a statement. 

"Leveraging its strong relationship with Oracle and co-development experience on Oracle Fusion Applications, Wipro SprintHR helps significantly reduce cost and deployment timelines," it said. 

Based on Wipro's rapid deployment framework for cloud applications, Wipro SprintHR is a productised service that helps customers configure the functional scope while deploying this solution, with little impact on business continuity, it said. 

It offers a blend of Fusion HCM modules that include HCM processes such as talent management, benefits management and core HR administration, the statement said. 

(Source- http://economictimes.indiatimes.com)

BMA Gyaan- Interesting facts about Wall Street

Wall Street was laid out behind a 12-foot-high wood stockade across lower Manhattan in 1685. The stockade was built to protect the Dutch settlers from British and Native American attacks.


The “stock market” began in May 17th, 1792 when 24 stock brokers and merchants signed the Buttonwood Agreement.The buttonwood tree was simply the local name for the sycamore tree.

The first stock ticker was invented by Edward A. Calahan in 1867.
The Securities Exchange Act of 1934 creates the Securities and Exchange Commission, charged with the responsibility of preventing fraud and to require companies provide full disclosure to investors.


Despite the New York Stock Exchange’s notoriety, it was not the first stock exchange in the United States. That distinction belongs to the Philadelphia Stock Exchange, which was founded in 1790.

The Massachusetts Investors Trust was the first official mutual fund, created on March 21st, 1924.
The Wellington Fund, created in 1928, was the first mutual fund to include stocks and bonds.


Wells Fargo Bank established the first index fund in 1971. John Bogle would use it as the basis for building low cost index funds at The Vanguard Group.

The first exchange traded fund, or ETF, was SPDR. It was cretaed in 1993 by State Street Global Advisors and tracks the S&P 500 stock index.

Intraday Summary- Market Synopsis- 23 January, 2012

Key benchmark indices alternately swung between gains and losses in mid-morning trade. The market breadth was strong with four stocks advancing against three declining stocks. Index heavyweight Reliance Industries (RIL) slumped more than 3% after poor Q3 results. Cement major UltraTech Cement hit record high after strong Q3 results. L&T gained after its Q3 results beat estimates. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. Metal stocks were mixed after LMEX, a gauge of six metals traded on the London Metal Exchange dropped 1.06% on Friday.
(Pic. Source- bseindia.com)

News Hour- Rupee edges higher as dollar inflows aid; policy eyed

MUMBAI: Rupee was stronger on Monday aided by dollar inflows that offset choppy local shares, though dealers said, importers' demand for the greenback could put a lid on the gains. 

At 10:48 a.m. (0518 GMT), the partially convertible rupee was at 50.2050/2100, compared with Friday's close of 50.32/33, after moving in a 50.1700 to 50.4050 band. 

"There are some inflows today, because of which the rupee is strengthening. It does not look as if the RBI is intevening," the chief forex dealer of a state-run bank, said. 

However, traders with two foreign banks said theReserve Bank of India likely sold dollars around 50.40. 

Three state-run banks said dollars inflows supported the rupee. The RBI usually sells dollars through state-run banks. 

India's main stock index was up 0.05 percent, after opening down. 

Traders said an uptick in dollar demand from oil importer to meet their month-end payment requirement is likely to prevent a sharper rise in the local unit. 

Oil is India's largest import item and oil refiners are the largest buyers of dollars in the local market. 

"There has been some (dollar) selling by the nationalised banks, and by some foreign banks as well. But I expect some buying by the oil importers," said Vikas Babu, a foreign exchange trader at state-run Andhra Bank

Dealers expect the the rupee is likely to stay in a range in the near-term, after its recent rally, and are awaiting the centrakl bank's policy on Tuesday for further direction. 

"It should consolidate at these levels for sometime before breaking in either direction," said said Ashtosh Raina, head of foreign exchange trading at HDFC Bank

The rupee strengthened 2.41 percent last week, its biggest weekly rise since the last week of October. 

The Reserve Bank of India will review its policy on Tuesday and none of the 22 economists polled by Reuters last week expect it to cut rates. 

One-month offshore non-deliverable forward contracts were quoted at 50.62, indicating some weakness in the short term in the onshore spot rate. 

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all were around 50.28 on total volume of $1.2 billion.

(Source- http://economictimes.indiatimes.com)

BMA Words of Wisdom by Netaji Subhas Chandra Bose. BMA Wealth Creators remembers the Great son of India on his 115th Birth Anniversary.


BMA Gyaan Video- Understanding Beta


Monday, 23 January 2012

Morning Summary- Market Synopsis- 23 January, 2012

Good Morning Everyone,
Markets opened on a flattish note after a spectacular rally in the past week. The key benchmark indices reached their highest closing level in more than six weeks last week. High volatility is expected in this week as traders roll over their positions in futures & options (F&O) segment from the near-month January 2012 series to February 2012 series. Reliance Industries (RIL), India's biggest company by market value, reported that net profit fell 13.6% to Rs 4440 crore on 40.2% growth in turnover to Rs 87480 crore in Q3 December 2011 over Q3 December 2010. The company said that it would buyback up to 12 crore shares at a maximum price of Rs 870 and payable in cash upto an aggregate amount not exceeding Rs 10440 crore from the open market through stock exchanges. The maximum buyback price represents a nearly 10% premium over 20 January 2012 closing price of Rs 793.35 on BSE. L&T, Maruti Suzuki India, Sterlite Industries (India), Idea Cellular, GAIL (India) and Kotak Mahindra Bank will unveil their Q3 results today. The Chinese markets are closed for the whole of this week, while Hong Kong bourses are shut for three days starting today for Lunar New Year holidays. The stock market in Taiwan which has been shut since 19 January 2012 for Lunar New Year holidays remains closed for the whole of this week. Stock markets in Indonesia, South Korea and Singapore were also closed for a holiday today.

(Pic. Source- bseindia.com)

Sunday, 22 January 2012

News Hour- Fiat to expand its presence in India through Chrysler's Jeep; To launch Alfa Romeo & Maserati

MUMBAI: Italian carmaker Fiat has plans to add heft to its diminutive presence in the Indian market by leaning on Chrysler, the US automaker in which it acquired a majority stake three years ago, as well as by launching a few of its own premium brands such as Alfa Romeoand Maserati

A team of senior officials from Chrysler recently visited India to conduct product clinics for the Jeep Grand Cherokee, an SUV in a price segment similar to that of Toyota's Fortuner, Ssangyong's Rexton and Chevrolet's Captiva. 

A person close to the development said a blueprint is being created to increase Fiat's presence in India with new models and, if these plans fructify, the new launches will be outside the 50:50 joint venture Fiat has with Tata Motors to make cars for the two companies as well as transmissions and engines. 

The Chrysler model will be brought into the country in completely-knocked-down (CKD) condition and assembled at the Tata-Fiat manufacturing operations in Ranjangaon, near Pune, on contract; the Fiat brands will be brought in via the CBU (completely built unit) route. 

While almost every global automaker has expanded operations in India by launching cars in segments from compacts to luxury sedans, Fiat hasn't quite stepped on the gas. By getting the cult Jeep brand, Fiat will plug a gap in its portfolio by carving out a presence in the SUV segment. Fiat India CEO Rajeev Kapoor said: "I have no comments to make on this." 

Ariel Gavilan, spokesperson for Chrysler, said, "There are no new plans to be announced at this time." 

People close to Fiat point out that Chrysler has big plans for emerging markets, and India is at the core of that strategy.

(Source- http://economictimes.indiatimes.com)