Thursday, 31 May 2012

Morning Summary- Market Synopsis- 31 May, 2012

Good Morning Everyone,
As anticipated, the frontline Indian indices gave a gap down opening, tracking global cues amid no sign of relief from debt-laden eurozone countries such as Greece and Spain. The Sensex is currently trading near the level of 16150 i.e., down by around 170 points and the Nifty is trading near the level of 4900 i.e., down by nearly 50 points. This has led the midcap and the small-cap counters to trade negative by nearly half a percentage point each. On the sectoral front, except for the FMCG index, all the other indices are trading red. Auto index is leading the list of losers, with losses of over one and a half percentage points. Further the market breadth is negative as only one stock is seen advancing for every two declines.

(Pic. Source- bseindia.com)

Investors should not chase low multiple stocks blindly

i. Low multiple stocks:
The P/E is sometimes referred to as the "multiple". It is calculated as (Market value per share / Earnings per share). It shows how much investors are willing to pay per rupee of earnings.

ii. Low multiple also reflect poor fundamental: Generally all stocks fall in bearish market conditions, including stocks with strong fundamentals, resulting in low P/E. However, it is crucial to filter the stocks when picking low multiple stocks as stocks with poor fundamentals also trade at low multiple.

Closing Summary- Market Synopsis- 30 May, 2012

Indian markets ended the today’s session on a negative terrain. The key indices witnessed accelerated fall in the last one hour of trade. Market players were rattled by heavyweight Tata Motors and few other corporates massive selling. The Sensex finally closed unchanged at 16312.15 and the Nifty closed at the level of 4950.75 i.e., down by 39.35 points. This led the mid-cap and the small-cap counters to close negative by over a percentage point each. On the sectoral front, except for IT and Teck indices, all the other indices closed in red. Auto index closed as the major loser, with losses of nearly four percentage points. Further, the market breadth closed in favor of the bears as only two stocks were seen advancing for every five declines.
(Pic. Source- bseindia.com)

News Hour- Mahindra & Mahindra net profit rises by 36% at Rs 911 crore

Anand Mahindra
MUMBAI: Utility vehicle and tractor major, Mahindra & Mahindra(including MVML) posted a net profit of Rs 911 crore , a growth of 36% for the quarter ended March 2012. 

The revenues during the quarter was higher by 37% at Rs 10,333 crore. The growth in profits , despite the relentless increase in material cost is due to a good volume performance of both vehicles and tractors and tight cost control on expenses, the company said in a statement. 

The board of directors has recommended a dividend of Rs 12.5 per share of face value Rs 5 which will absorb a sum of Rs 868.61 crore. 

In the passenger utility vehicle segment, the company sold a total of 202217 vehicles registering a growth of 19% in FY12. For the third consecutive year, the company was the single largest tractor company in the world by volume with sales of 236666 tractors against 214325 tractors sold last year a growth of 10%. 

The company exported 29176 vehicles in Fy2012 as against 17138 vehicles , registeringa growth of 70% to markets such as SAARC, South America and South Africa. 

With global risks escalating, and continued weakness in the domestic macro environment, the near term outlook for the economy is quite challenging. 

However the company through its focus on new launches, cost control, process innovation expects to meet these challenges. The company expects growth to pick up in the second half of 2012-13.

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

BMA Gyaan: Return On Equity (ROE)

BMA Words of Wisdom by Henry Ford


Wednesday, 30 May 2012

Morning Summary- Market Synopsis- 30 May, 2012

Good Morning Everyone,
Persistent worries over the eurozone debt crisis and slowing growth in China led the key Indian stock indices to give a gap down opening in the early morning session. The undercurrent also became weak after the rupee fell below the 56 per dollar mark this morning. The Sensex is currently trading at 16350 i.e., down by around 80 points and the Nifty is trading near the level of 4960 i.e., down by nearly 30 points. This has led the midcap and the small-cap counters to slip in red. On the sectoral front, the indices are trading mixed. IT index is leading the list of gainers, with gains of 0.4% points while Auto index is leading the list of losers, with losses of nearly three percentage points. Further the market breadth is negative as only three stocks are seen advancing for every five declines.

(Pic. Source- bseindia.com)

Bargain hunt for golden stocks among quality Stocks

i. Bargain Hunting:
Bargain hunting implies that a stock is worth less than it should be and is therefore undervalued. The idea is to being able to pick undervalued stocks or so called value-investing to generate superior return in the long run.

ii. Device a strategy to filter stocks:
The value investors may use many measures to pick stocks such as P/E or P/BV depending on their preference. One should device a strategy and stick to it rather than being influenced by emotions.

iii. Invest in quality stocks only:
One should always invest in stocks which have strong fundamental or that have a strong potential to grow in the long run. It is generally seen that great losses result not from buying quality stock at high price but from buying low quality stock at a price that seems good value

Market Heatmap- 29 May 2012

The key Indian indices finished nearly flat. After opening with a slight positive bias, the Indian market did show some strength in the first half but the upswing was short lived, as the frontline indices erased all the day's gains in the second half. The market lost steam after the European markets surrendered some of the early gains. This led the Sensex to close flat at the level of 16438.58 i.e., up by 21.74 points and the Nifty to close at the level of 4990.1 i.e., up by 4.45 points. Even the midcap and the small-cap counters closed flat to negative. On the sectoral front, the indices closed mixed. IT index closed as the major gainer with gains of over a percentage point, while FMCG index closed as the major loser with losses of nearly a percentage point. Further, the market breadth closed neutral. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

News Hour- January-March GDP growth seen flat at 6.1%

BANGALORE: Annual economic growth probably held steady in the January-March quarter at 6.1 per cent and the global economic slowdown, government policy paralysis and a record low currency suggest little chance of a pick up in the current quarter. 

A poll of 31 economists produced a median forecast of 6.1 per cent, unchanged from the growth of the October-December quarter. Forecasts ranged from 5.5 per cent to 7.3 per cent. 

While 6.1 per cent would be the envy of most developed nations, it is the lowest growth rate for India in almost three years. Growth slowed for seven successive quarters through the three months ended December 2011. 

"Growth is constrained because of three main factors," said Leif Eskesen, economist at HSBC. 

"Lax affects of monetary tightening, the spillover to domestic sentiment because of the weak global economic backdrop which is also hurting exports. And thirdly the persistence of policy paralysis is also hurting investor sentiment and that is of course hurting the investment cycle." 

GDP probably rose 6.7 per cent in the fiscal year to March 2012, the slowest pace in three years, and well below the 8.4 per cent clocked in the previous year. 

The Reserve Bank of India had predicted growth of 6.9 per cent. 

"We continue to expect the investment cycle to be relatively subdued because of these factors. You will see the domestic private consumption still reasonably resilient but most of the slowdown will be from the investment side," said Eskesen, who expects April-June growth at 6.2 per cent. 



WEAK INVESTMENT CLIMATE Indian industrial production, which accounts for about 15 per cent of GDP, grew at a muted annual pace during the first three months of the year, averaging just 0.6 per cent. 

Factory sector growth picked up in April, helped by bulging order books, the HSBC-Markit purchasing managers' index shows, but the output index fell for a third straight month, suggesting the sector is not out of the woods yet. 

India's car sales rose in April just 3.4 per cent from a year earlier, the weakest pace since a surprise 24 per cent drop in October and sharply below the 13.2 per cent annual growth in April 2011. 

"We are dealing with a very weak investment climate because of domestic lack of confidence as policymakers are really slow in approving structural projects and India's businesses do not have faith in the fundamentals being turned around by policy," said Dariusz Kowalczyk at Credit Agricole-CIB. 

A sluggish global economy has also cut demand for India's goods overseas, despite the falling rupee, which means exports may also not grow enough to compensate for the domestic weakness. 

CURRENCY HEADACHE The weak rupee - which has shed nearly 12 per cent from its 2012 high - adds to policymakers' headaches by elevating import costs, most notably for crude oil, 80 per cent of which must be shipped in from overseas. It also adds to the burden and risk exposure of Indian firms with foreign-currency debts. 

High inflation, stoked in part by the falling rupee, leaves the central bank little room to cut interest rates further. The RBI last month delivered a larger-than-expected 50 basis point cut in benchmark rates but warned that it sees limited scope for more reductions. 

"A cheaper rupee is probably helpful but it does mean that inflation pressures will be higher rather than lower and that will make it even harder to cut rates further," said Andrew Kenningham, senior global economist at Capital Economics. 

However, India's growth rate will still remain higher than many Western economies, which are either contracting or showing only anaemic expansion. 

The euro zone economy came to a standstill in the first quarter of the year, while the United States grew at an unimpressive 2.2 per cent annualised rate. 

Other major Asian economies are also slowing down. China's economy grew 8.1 per cent in the first quarter from a year earlier, its weakest pace in almost three years.

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

BMA Gyaan- Do you know what is Asset-liability Modelling?


BMA Words of Wisdom by Abraham Lincoln


Tuesday, 29 May 2012

Morning Summary- Market Synopsis- 29 May, 2012

As anticipated, the key Indian stock indices started the session on a positive note, however the momentum seems to be fading down. In the constant fight between the bulls and the bears, who finally takes over is awaited to be seen. Meanwhile, the Sensex is trading flat near the level of 16450 i.e., up by 32 points while the Nifty is trading near the level of 4990 i.e., up by 8 points. This led the midcap and the small-cap counters to trade slightly positive. On the sectoral front, the indices are trading mixed. Healthcare index is leading the list of gainers with gains of over half a percentage point while Consumer Durables index is leading the list of losers with losses of nearly half a percentage point. Further, the market breadth is slightly positive, as four stocks are seen advancing for every three declines.
(Pic. Source- bseindia.com)

Investigate any suspicious movement of Stocks

i. Identify suspicious movements:
At times, due to the involvement of the speculators or operators, some stocks turn highly volatile e.g. the overall market is bearish, yet there is a significant surge in a particular scrip which is neither supported by market conditions nor the fundamentals of the company. This could indicate that market participants are artificially pushing up the stock price. Likewise, if a stock falls significantly when the markets are doing well might indicate that participants are offloading their position either to pick the stocks at lower valuation or just booking profits from the artificial price created earlier. One should stay away from such stocks.

ii. Investigate before investing:
If one sees such suspicious activity in a stock, one should investigate thoroughly in such stocks before investing. There are various criteria (price-earnings, market capitalization and price variation) to scrutinize these stocks. One should check if the performance of the company in the past, the fundamentals of the business and other key parameters are supporting the stock valuation.

iii. Better to stay away from such stocks:
When such movements are seen in a stocks, investors should be vigilant and should refrain from investing in them. If one is already invested in such stocks, then it is advisable that he exits the positions.

News Hour- Rupee post biggest winning streak in over two-and-half months; ends at 55.18 per dollar

MUMBAI: The rupee rose for a third successive session on Monday, its biggest winning streak against the dollar in over two-and-half months, as a recovery in global risk sentiment helped local stocks post strong gains. 

The rupee, which hit a record low of 56.40 to the dollar on Thursday after a string of all-time lows, has since recovered 2.2 percent, helped by a mix of central bank interventions and improved global risk appetite. 

The local unit rose as much as 55.01 to the dollar at one point on Monday, its highest in nearly a week, but month-end dollar demand from oil importers kept further gains in check, dealers said. 

Traders said a move to supply dollars directly to oil importers via a special window would help the rupee, given these investors constitute the bulk of dollar demand in the forex markets. Such hopes were raised last week after central bank governor Duvvuri Subbarao did not rule out such an action. 

"We are seeing a correction in the USD/INR from the overshot 56 levels. However, it is primarily driven by the recent comments from the central bank," said N.S. Paramasivam, chief executive at NSP Forex, a forex consulting firm. 

The rupee closed at 55.185/195 per dollar after ending at 55.37/38 on Friday, as per State Bank of India data. Trading volumes were also muted, with Monday being a public holiday in the United States. 

A move by the government not to pursue any immediate hike in diesel and liquefied petroleum gas prices did not have a major impact as the market had discounted the possibility of such a move after the protests that followed the petrol price hike, dealers said. 

However, a move to supply dollars to oil importers could spur a rally in the rupee to 54 levels in a knee-jerk reaction, traders said, though they doubted whether it could sustain the gains given the steep global risk aversion and continued worries about India's fiscal challenges. 

India's main BSE stock index rose 1.2 percent, helped by buying in financials and blue chips. The one-month non-deliverable forward rate was quoted at 55.54, while the three month was at 56.28. 

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 ended around 55.22 on a total volume of $6.2 billion.

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

Market Heatmap- 28 May 2012

The Indian stock indices ended on a positive note. After rising on a weekly basis after a long time, the Indian stock markets continued the trend and started the current week on a healthy note. The Nifty closed near the level of 4985 after making a high near the 5000 mark and the Sensex ended above the 16,400 mark. This led the midcap and the small-cap counters to close positive by 1.21% and 0.87% points respectively. On the sectoral front, all the indices closed positive. Bank, Power and Consumer Durables indices closed as the major gainers with gains of over two percentage points each. Further, the market breadth closed in favor of the bulls, as two stocks were seen advancing for every one decline. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

News Hour- Indian Oil net profit up 224% at Rs 12,670 crore, beats estimates

NEW DELHI: Indian Oil Corporation on Monday announced a net profit of Rs 12,670.43 crore for the quarter ended March 31, 2012, a 224 percent YoY increase from Rs 3,905.16 crore in the year-ago period.

Analysts expected the company to post a net profit of Rs 9,400 crore during the quarter, up 140.70 percent YoY, according to ET Now estimates. 

Total income increased to Rs 1,30,305.35 crore in the fourth quarter from Rs 99,130.03 crore for the March 2011 quarter, the company said in a BSE filing. 

The group posted a net profit after tax & minority interest of Rs 4,225.98 crore for the year ended March 31, 2012, compared to Rs 7,830.72 crore for the year ended March 31, 2011. 

Total income increased to Rs 4,12,111.16 crore for the year ended March 31, 2012, from Rs 3,13,244.71 crore in the previous year. 

The IOC board recommended a dividend of Rs 5.00 per ordinary share for the financial year ended March 31, 2012. 

At 02:10 p.m., the company's shares were trading 0.6 percent higher at Rs 267. The stock has hit a high of Rs 271.10 and a low of Rs 265.10 in trade so far.

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

BMA Gyaan- Earnings Report Explained.


BMA Words of Wisdom by Walt Disney


BMA Wealth Creators congratulates the entire Kolkata Knight Riders team for lifting the IPL 5 trophy. Korbo Lorbo Jitbo re....


Monday, 28 May 2012

Morning Summary- Market Synopsis- 28 May, 2012

Good Morning Everyone,
As anticipated, the major Indian indices opened the day on a flat to positive note. It currently seems to be carrying forward the positive momentum as the Sensex is trading positive by over 110 points and Nifty is trading positive by over 30 points. Meanwhile, the midcap and the small-cap counters are trading positive by over half a percentage point each. On the sectoral front, all the indices are trading positive. Auto, Bank and Metal indices are leading the list of gainers with gains of over half a percentage points each. Further, the market breadth is trading positive, as five stocks are seen advancing for every two declines.

(Pic. Source- bseindia.com)

Demat is a convenient way to trade

Demat is a convenient way to trade

i. What is a Demat?
Demat stands for De-materialization. In Demat form, there is no physical scrip in existence as neither the individual who owns the shares nor the depository keeps the scrips. The depository maintains the electronic ledger of the securities under its control.

ii. Proof of the developing Securities market:
Freely traded securities are an essential component of any developing securities market and is a step towards the advancement.

iii. Benefits:
a.)The depository system and dematerialized securities offer paperless trading and transfer of shares through the use of technology.
b.)It eliminates the paper work involved in scrip-based trading and share transfer system.
c.)The threat of loss of certificates or fraudulent interception of certificates in transit, that causes anxiety to the investors, are
eliminated.
d.)The investor is also relieved of problems like bad delivery, fake certificates, shares under litigation, signature difference of transferor and the like.

Sunday, 27 May 2012

News Hour- Yes, decision-making has stalled: Kaushik Basu

NEW DELHI: A month after he was forced to backtrack on his comment about gridlock slowing down economic reforms, the government's chief economist, Kaushik Basu, acknowledged on Friday that coalition compulsions and an excessively cautious bureaucracy have snagged decision making. 

Asked about the perception of policy logjam, Basu told TOI in an interview, "I agree with this criticism; in my view there has been a slowdown in decision-making because of over-caution on the part of bureaucrats and slowdown in reforms because of the strains of coalition democracy . I expect - or should I say hope - this will change sooner rather than later." 

In a lecture in Washington on April 18, Basu had said reforms were unlikely before the elections in 2014. He had also pointed to slowing of decision-making due to a risk-averse bureaucracy following the exposure of scams and due to the government's coalition constraints. 

The remarks triggered a volley of protests from ministers , though he merely appeared to be echoing a deeply felt view. The reaction forced Basu to issue a clarification on April 20, saying his reference to 2014 was regarding the unfolding economic crisis in Europe wherein banks would have to begin repaying $1.3 trillion dollars worth of loans received from the European Central Bank. It was wrongly juxtaposed with the general elections, he said. 

However, speaking to TOI on Friday, the chief economic adviser in the finance ministry minced few words as he confirmed the pervasive experience about the delay in critical decisions. 

Kaushik Basu, chief economic advisor in the finance ministry, has acquired a reputation of being candid in his views. In an e-mailed interview, he discusses the rupee fall and the slowdown in decision-making . Excerpts: 

Do you think RBI has done enough to stem the rupee's fall? Is RBI being too predictable in its approach to tackle the rupee's woes? 

RBI's response to the recent rupee depreciation has been, in my view, balanced and aptly measured. The bulk of the recent exchange rate depreciation is not an India-specific problem but has global roots. You have to take my views on these seriously because I have in the past criticized RBI. And, I have also refused to put all the blame for all our troubles on the global economy; in fact, some of my own troubles stem from this refusal. 

It is easy to over-react to exchange rate movements, because whether it is an appreciation or depreciation, some people get hurt, and going by the human nature, that group will be the most vocal. RBI's aim should be to curb volatility and not to try to buck the market trend. While excessive depreciation is indeed worrisome, it has to be recognized that this is a global phenomenon. 

Several emerging economy currencies have been depreciating since August 2011 and sharply over the last two months. The South African rand, the Brazilian real, for instance, have moved in step with rupee and, over the last six weeks, the Korean won and the Mexican peso have also sharply depreciated. 

This is a response to the Eurozone uncertainty and flight of capital to the safety of US treasuries and a few other havens; and we will have to live with this until at least June 17 - the time of the Greek election. I believe the depreciation is an overreaction - a global bubble that will partly correct itself eventually. 

Has the government done its bit to tackle the rupee? What has the government done to attract inflows? Are more steps needed? 

Appreciation and depreciation offer different magnitudes of difficulty because the former needs access to rupee or, as some would say, a printing press, and the latter to forex reserves, which are limited. There are basically two ways to tackle a depreciation : RBI releases forex reserves in the market and opens the doors to more capital inflows. Both these are being done. 

But, we have to realize that given the fact that India has had higher inflation than the US, the nominal exchange rate depreciating over the last two years is only to be expected. The impression given at times that we expect the rate to be at the same level as in January 2011 is unrealistic and markets can call the bluff. When we intervene it should be limited , conditional intervention without trying to hold the rupee value artificially high. 

Having said this, I must point out that what is getting overlooked is that depreciation is also an opportunity -the opportunity to export more. Till recently, everybody used to envy China flooding the world with its goods using the leverage of its depreciated currency. Canada gained massively in the global market when the Canadian dollar used to be weaker by over 25% vis-a-vis the US dollar. And Iceland is climbing back to normalcy on the shoulders of a weaker krona . So, while taking steps against excessive depreciation , what we must do and are not doing enough is to get our exports booming. We need to remove hurdles, bureaucratic and otherwise, to achieve this. 

There is a perception that the government has been lethargic in its policy responses. Some commentators say that "the gloom and doom in the economy" is linked to the policy paralysis in government? Your views on the whole issue of policy paralysis... 

I agree with this criticism ; there has been a slowdown in decision-making because of over-caution on the part of bureaucrats and slowdown in reforms because of the strains of coalition . I expect - or should I say hope -- this will change sooner rather than later.

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

Harland David Sanders: Founder of the Kentucky Fried Chicken

Harland David Sanders, better known as Colonel Sanders (September 9, 1890 – December 16, 1980) was an American entrepreneur who founded Kentucky Fried Chicken (KFC). His image is omnipresent in the chain's advertising and packaging, and his name is sometimes used as a synonym for the KFC product or restaurant itself.

Sanders was born to a Presbyterian family in Henryville, Indiana. His father, Wilbur David Sanders, died when Harland was five years old, and—since his mother worked—he was required to cook for his family. He dropped out of school in seventh grade. When his mother remarried he ran away from home because his stepfather beat him. During his early years, Sanders worked many jobs, including steamboat pilot, insurance salesman, railroad fireman, farmer, and enlisted in the Army as a private when he was only 16 years old (by lying about his age), spending his entire service commitment in Cuba.

At the age of 40, Sanders cooked chicken dishes and other meals for people who stopped at his service station in Corbin, Kentucky. Since he did not have a restaurant, he served customers in his living quarters in the service station. His local popularity grew, and Sanders moved to a motel and restaurant that seated 142 people and worked as the chef. Over the next nine years, he developed his method of cooking chicken. Furthermore, he made use of a pressure fryer that allowed the chicken to be cooked much faster than by pan frying.

He was given the honorary title "Kentucky Colonel" in 1935 by Governor Ruby Laffoon. He was re-commissioned in 1950 by Governor Lawrence Wetherby. Although he had been a Kentucky Colonel for nearly two decades, it wasn’t until after 1950 that Sanders began to look the part, growing his trademark mustache and goatee and donning his white suit and string tie.


Colonel Sanders is the official face of KFC, and appears on the logo as well as numerous advertisements and promotions of the fast food chain.

Sanders died in Louisville, Kentucky, of pneumonia on December 16, 1980. 

Saturday, 26 May 2012

BMA Wealth Creators Ek Paisa Offer

You should not invest in a business that you do not understand

i. Follow the EIC Framework:
A detailed EIC (Economy, Industry & Company) study is compulsory before investing in the business of any firm.

ii. Study and Analyze the Company:
Understanding the firm’s line of operation, its strengths and weaknesses along with its past performance and future prospects, is a must.

Market Heatmap- 25 May 2012


The key Indian equity benchmarks finished virtually unchanged today. After having staged a smart pullback from the session lows in the afternoon trade, it gave rather a sad close. The momentum was backed by a smart recovery in the Indian Rupee before losing again. This led the midcap and the small-cap counters to close positive by merely half a percentage point each. On the sectoral front, the indices closed mixed. Metal and Capital Goods indices closed as major gainers with gains of over half a percentage point each whereas, FMCG index closed as major loser with losses of nearly half a percentage point. Further, the market breadth closed slightly positive as three stocks were seen advancing for every two declines. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

News Hour- Rupee slide: RBI Governor D Subbarao meets Prime Minister Manmohan Singh

NEW DELHI: A day after hinting that the central bank would take necessary steps to arrest the rupee's slide, RBI Governor D Subbarao today met Prime Minister Manmohan Singh and is believed to have discussed the issue with him.

Although the rupee has recovered after yesterday's announcement by Subbarao on the possibility of selling dollars directly to oil companies, it had fallen to 56.07 to a dollar in the morning trade, after yesterday's close of 55.65.

The meeting, according to sources, was also attended by Chairman of Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan, who had favoured direct sale of dollars to oil marketing companies (OMCs) to ease pressure on rupee.

The oil firms buy dollars in large quantities to import crude from the international market. India's crude oil import bill was USD 155.6 billion in 2011-12.

In the mid-session, meanwhile, the rupee was trading 26 paise higher at 55.39 on fresh selling of dollars by banks and exporters.

Subbarao had also hinted at the possibility of issuance of overseas sovereign bonds to tide over the worsening balance of payment situation.

"RBI will do whatever is necessary. Some structural changes are necessary for improvement in current account. Meanwhile, the RBI is monitoring the situation and we will do whatever is necessary, consistent with our policy," he had said yesterday after meeting of the central board of RBI in Mussorrie.

On the issue of direct sale of foreign exchange to oil marketing companies, he had said that the issue was on the table. "I am not ruling it out. I am also not saying that we are going to do it right know. It's an open issue. We have done it in past. At the moment, we have not done it so far," he had said.

As regards the sovereign bonds, RBI chief had said, "I cannot say in favour or out of favour. We have done it in the past, it might be done in the future... but it's not something that is being contemplated right now."

India in the past had raised funds from overseas markets from issues like Resurgent India Bonds to deal with the balance of payment problems.

Since March 1, rupee has nearly lost over 13 per cent and 11 per cent since the presentation of Budget on March 16 in the face of withdrawal of funds by foreign investors from stock markets.

The Budget contained proposals like retrospective taxation and general anti-avoidance rules (GAAR) which impacted foreign portfolio investment.

Another import reason for weakening of rupee was the rising current account deficit, which is the difference between inflow and outflow of foreign exchange. It rose to 4 per cent of GDP at the end of December 2011, as against 3.3 per cent during 2010-11.

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

BMA Gyaan- What is Roll Period?


Know the facts well before going for FIIs or MFs

i.Both in general move in Opposite Directions:
It's well known that one sells, the other one buys and the vice versa i.e., if domestic institutions investors are seen buying the stocks, theFIIs are generally seen selling, and when DIIs are seen selling, the FIIs are seen buying.

ii.Mode of Selection:
FIIs select on the basis of growth prospects of the country and strong management, whereas, DIIs select on the basis of past performance.

Friday, 25 May 2012

USDINR, Is The Upmove Over..?

Morning Summary- Market Synopsis- 25 May, 2012

Good Morning Everyone,
The Indian markets opened moderately lower todat following downtrend in Asian markets. Weak global data and endless eurozone woes continued to weigh on the markets globally. Sensex fell by 33 points to 16189, while Nifty shed 11 points to 4910. Sectorally, the indices were trading mixed. Metal and Power were the top gainers gaining close to 30 basis points while Oil & Gas lost over half a percentage point. The market breadth was weak and seven stocks were seen advancing against every nine declines.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Theodore Roosevelt


Market Heatmap- 24 May 2012

After two straight days of losses, the Indian stock indices closed high amid renewed buying interest in beaten down stocks. In addition, the sentiment also got a lift from a smart intraday recovery in the Rupee. This led the midcap and the small-cap counters to close positive by over half a percentage point each. On the sectoral front, all the indices closed in green. Bank index closed as the major gainer, with gains of over two percentage points. Further, the market breadth closed in favor of the bulls as five stocks were seen advancing for every three declines.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

News Hour- Crude oil near seven-month low of around $90 a barrel in Asia

SINGAPORE: Oil lingered near seven-month lows around $90 a barrel Thursday in Asia as Europe's debt crisis festers and China's economy continues to slow. 

Benchmark oil for July delivery was up 25 cents to $90.15 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.95 to settle at $89.90, the lowest since Oct. 21, in New York on Wednesday. Brent crude for July delivery was down 8 cents at $105.48 per barrel in London. 

Crude has plunged about 15 percent from $106 three weeks ago because economic growth and oil demand in Europe, the U.S. and China are likely to be less than expected this year. 

On Thursday, HSBC Corp. said its Purchasing Managers Index based on a survey of Chinese manufacturers showed activity weakened further in May. 

A preliminary PMI, based on responses by 85 to 90 percent of companies surveyed for the full index which is released later, fell to 48.7 from April's 49.3 on a 100-point scale. Numbers below 50 indicate a contraction. 

China's Cabinet promised Wednesday to step up efforts to boost growth after the economy expanded 8.1 percent in the first quarter, the lowest in almost three years. 

Political turmoil this month in Greece has also spooked investors, who fear the country may leave the euro common currency, which could spark financial and economic chaos in Europe. 

"The number one issue is the uncertainty and financial instability a chaotic Greek exit from the euro would cause,'' said Victor Shum, an energy analyst with consultant Purvin & Gertz in Singapore. "However, barring such an exit, crude demand should improve over the summer and prices should strengthen moderately.'' 

Tightening crude supplies in the U.S. have also weighed on oil prices. The Energy Department's Energy Information Administration said Wednesday that crude inventories last week rose for a ninth consecutive week.

In other energy trading, heating oil was up 0.3 cent at $2.82 per gallon and gasoline futures were steady at $2.80 per gallon. Natural gas slid 1.2 cents at $2.73 per 1,000 cubic feet.

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

BMA Gyaan- Introduction To Enterprise Value


Trading should be done through a registered broker only

i.Difference between registered and un-registered brokers:
The brokers need to register themselves with SEBI and are called registered brokers. Any broker failing to comply with the above rule is known as un-registered broker.

ii.Trading through unregistered brokers:
You will be wholly and solely liable for any sort of trading done through an un-registered broker. It may lead to fraud and in any such situation no relief can be availed for the same from SEBI.

iii.Regulation:
As per SEBI regulations, only registered members can operate in the stock market. One can trade by executing a deal only through a registered broker of a recognized Stock Exchange.

Thursday, 24 May 2012

Morning Summary- Market Synopsis- 24 May, 2012

Good Morning Everyone,
As anticipated, the Indian Stock indices gave a flattish opening. The sharp hike in petrol prices overnight and a late recovery on Wall Street has led to mixed sentiments in the market. Meanwhile, this has led the midcap and the small-cap counters to trade flat. On the sectoral front, the indices are trading mixed. Oil&Gas index is leading the list of gainers with gains of over a percentage point whereas, IT and Auto indices are leading the list of losers with losses of over half a percentage point each. Further, the market breadth is neutral.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by John F. Kennedy


Market Heatmap- 23 May 2012

The bourses extended their previous session’s losses and ended deep in red as the rupee tumbled to yet another all-time low of 56.22 against the dollar amid weak global trends. At the end of day, the Sensex lost 78 points or 0.49%, from the previous close and shut at 15948 while the Nifty closed at 4836, lower by 25 points or 0.51%. IT and Healthcare closed with minor gains while all the other sectoral indices closed in the negative. Capital Goods was the biggest loser and lost two percent from the previous close. The market breadth was weak and five stocks were seen advancing against every nine declines. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

News Hour- Rupee breaches 56 levels, RBI cautious

MUMBAI: The rupee dropped to a record low against the dollar on Wednesday, sparking mild intervention from a RBI seen by traders as reluctant to be more aggressive against such a strong down trend. 

The rupee touched the symbolically significant level of 56 to the dollar as concerns about the euro zone prompt global risk aversion and expose country's domestic vulnerabilities, most prominently a widening current account deficit and sluggish policy reforms. 

The rupee has now fallen more than 5 per cent this year against the dollar to make it the worst-performing Asian currency monitored daily by Reuters. It has dropped more than 13 per cent from its 2012 high reached in February. 

Currency traders say the slide in the rupee in recent sessions has been made easier by a cautious Reserve Bank of India, the central bank, which has refrained from heavy dollar selling. 

"If there is global risk aversion, how can the RBI defend the currency? The conditions prevailing are such that the fall in the rupee is justified," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank

However, inaction carries dangers of its own, traders said, because it would deepen an impression of a RBI that is unwilling to take action. It does have measures to hand, such as selling dollars to oil importers, they said. 

Still, it is important for the RBI to intervene in the market from time to time to be able to stem any steep fall, C. Rangarajan, the chairman of the prime minister's economic advisory council, told television channel. 

"Sometimes markets always have a tendency to overshoot. I think if the impression goes that it will not intervene at all, it will have an adverse impact," Rangarajan said. 

The drop on Wednesday to 56 per dollar marked the sixth consecutive day that the currency had hit a record low. The RBI's intervention, which dealers described as mild, was the first since Thursday. 

The currency was weighed down by relentless dollar demand from oil importers and other companies. 

Traders are looking ahead to an RBI board meeting scheduled for Thursday in Mussoorie, although the RBI tends not to make major announcements following such meetings. 

The central bank has taken several measures to stem the rupee's slide, including raising deposit rates for non-resident Indians and forcing exporters to convert half of their foreign currency holdings into rupees, but none has had any notable impact. 

The RBI has shied away from action that traders believe would make a significant difference, including most immediately selling dollars directly to oil importers. 

Nomura argues such a move would reduce market dollar demand by $8.8 billion per month, or the average monthly value of petroleum and crude imports in the last fiscal year. 

However, such a move would expose the RBI to greater market risk and erode its already diminishing stockpile of dollars. 

Some observers expressed sympathy with the RBI's position, given stronger actions carry their own risks. 

"There are costs associated with each response and these in any case will only be stop-gap measures that won't address the underlying macro imbalances including the unsustainably large CA (current account) deficit," CLSA economist Rajeev Malik wrote in a recent note. 

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

BMA Gyaan- Secured Bond Explained.


Why evade taxes when you can save by planning

i)The basic Difference between Planning and Evading:
There is a clear-cut difference between tax planning and tax evasion. One is legally acceptable and the other is an offense.

ii)Gift of Tax Planning:
Right planning leads to tax avoidance and savings.

iii)Boon of Avoidance:
Hiding or un-disclosure of income and facts leads to tax evasion and high penalty along with imprisonment.

Wednesday, 23 May 2012

Morning Summary- Market Synopsis- 23 May, 2012

Good Morning Everyone,
The Indian markets opened lower, following Greece concerns and sharp fall in rupee. Former Greek Prime Minister Lucas Papademos said preparations for the country's exit from the euro zone are being considered. He further said that such a move is unlikely to materialize but the risk is real.The BSE benchmark was down 57 points to 15970 and the NSE benchmark fell 18 points to 4842. Except PSU, all the sectoral indices on BSE were trading in the negative. Consumer Durables, Auto and FMCG posted maximum declines with over half a percentage losses. The market breadth was negative and two stocks were seen advancing against every three declines.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Albert Einstein


Market Heatmap- 22 May 2012

Just one thought crossed our minds that the market could keep the momentum going and immediately came the fresh wave of vicious selling. The major indices were seen plunging down by over several points from the intra-day high. Fitch ratings downgrade of Japan’s Long-term Foreign and Local - Currency Issuer Default Ratings (IDRs) to A+ from AA and AA- pulled on the selling trigger in the market. This led the Sensex to close at 16026.41, with a decline of 156.85 points and the Nifty to close at 4860.50, with a decline of 45.55 points. Even the midcap and the small-cap counters could not sustain the pressure and finally closed negative by over half a percentage point each. On the sectoral front, except for IT, Teck and Consumer Durables, all the other indices closed in red. Metal and Bank indices closed as major losers with losses of over one and a half percentage points each. Further the market breadth closed negative, as only one stock was seen advancing for every three declines.
Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118