ONGC stake sale cleared, auction to happen soon

ONGC disinvestment has been given nod by the Empowered Group of Ministers (EGoM) today for the 5% stake sale. The auction is expected to happen in a couple of days. The floor price for the auction is expected to be be disclosed in exchange notice. 

The ONGC stake sale is likely to fetch the exchequer around Rs 12,000 crore. The government is looking at various options to meet its disinvestment target which has been hit due to adverse market situation.

Auto Industry: What to expect in budget 2012?

The two word answer to the above question is undoubtedly "higher tax". It is alsmost certain that the finance minister will levy higher taxes on the auto sector. However, it’s the quantum that will determine what happens to the stocks. Excise duty hike of 2% on passanger cars is almost discounted in the stocks. However some analysts believe that it can be reverted back to pre crisis levels of 12%. 

Considering the huge losses that oil marketing companies are having on diesel fuel sales, it is very likely that we could see a flat levy on diesel cars to compensate for the benefits of low running cost. This would place both petrol and diesel variants on par with each other from a cost point of view. This could dampen the sales of diesel cars and utility vehicles going forward.

Which Sector to Invest in 2012

Please vote and tell us which sector(s) or Industry you are most bullish on and betting on to generate maximum return for your portfolio. 

You can also comment below to provide your justification for your choices. 

Please share this survey with your friends to get maximum response which will help all of us in understanding the mood of the nation. Best of luck...

Warren Buffett Letter to Shareholders 2011 - 2012 : PDF

Berkshire Hathaway Chairman, Mr. Buffett, sends an annual letter to all of its shareholders and he has been doing this every year since 1977. 

The letter is very informative and Warren Buffett don't forget to highlight his mistakes in the letter (if any), which is a part of a leadership style that has helped him build a company with 270,000 workers and draw crowds of more than 20,000 to hear him speak during annual general meeting. “A friend once asked me: If you’re so rich, why aren’t you smart?” Warren Buffett, said in a letter accompanying the 1996 annual report. 

If you are looking to read some or all of those letters then use the link to download them in PDF format:

Oil in not well - Nymex Crude tops $105

In the recent run up in stock markets all over the world there is something that bulls have completely ignored which is oil. Oil prices jumped to a nine-month high near $105 a barrel today in Asia after Iran said it halted crude exports to Britain and France in an escalation of a dispute over the West Asian country's nuclear programme.


With Nymex crude topping $105 and brent crude crossing $120 per barrel, bulls in India at least are expected to run out of steam. Oil is a significant threat to Indian fiscal situation which is already under strain and that threat could halt the rally that we are seeing in Indian stock markets. Couple of points to consider:

Buy Adani Port and SEZ

After a pretty long gap InvestorZclub has come out with an investment idea. The reason for the gap has been continuous fall in risky assets and uncertainties in global markets in past 6 months. But sentiments are now much better and barring Greece, global economy is in a relatively better shape. It appears that even if markets falls it will not be very deep. Hence companies in promising sector, sound management and reasonable valuations can be bought at every dip.

One such company that fits all the above three criteria of InvestorZclub is Adani Ports and SEZ. Investors with a three-year perspective can consider exposure to company's stock which is currently ruling at a price of Rs.150 as on 17th Feb 2012. 

The company has taken advantage of the perennial capacity constraint in major ports to quickly build a premium clientele for itself. As a result, its volumes expanded a robust 27 per cent compounded annually in the last three years ending FY-11 as against a mere 3 per cent expansion managed by major ports. 

Sensex, Nifty gained for seventh straight week

Key benchmark indices gained for the seventh straight week to scale highest closing level in 28 weeks as latest government data showed that inflation in January eased to a 26-month low. Nifty continues to form higher highs throughout the week and finally closed above 5550 levels. 

Foreign institutional investors (FIIs) pumped in another 3500 crores during last week taking total for 2012 to 24,100 crores (till February), as per provisional data from the stock exchanges. The BSE benchmark Sensex was up by 540.70 points or 3.05% for the week to settle at 18289.35 levels. The NSE flagship Nifty ended at 5564.30 levels, up by 182.70 points or 3.40%. 

Bharti Airtel Research Report - 2012

Bharti Airtel, being the largest telecom company in India, is being tracked by almost all major broking and research houses in India. 

Following are some of the latest research reports covering the prospects of Bharti Airtel in immediate future.

Bharti Airtel Research Report by Motilal Oswal , Angel Broking,  Prabhudas Liladhar

One Up On Wall Street Notes ebook PDF

One up On wall Street

The New York Times best seller "one up on wall street by Peter Lynch" has sold millions of copies through out the world. Peter Lynch, the world's greatest and the most successful fund manager, was undoubtedly the best stock picker of his time. Anise C. Wallace of The New York Times says "Mr. Lynch investment record puts him in a league by himself ".

Any investor should pay heed to what Mr. Lynch has to say and this book is full of advises by Mr. Lynch himself. He has shared loads of his own personal experiences of stock picking during his tenure at Fidelity Magellan Fund, which is truly a priceless treasure for any equity investor. 

Stocks to avoid in 2012

Stock Markets globally has been on a tear away rally and has advanced around 20% in general in past 2 months. 

Indian stock markets also went up from the Nifty level of 4550 to 5600 since 20th Dec 2011. In this rally many stocks have either made 52 week high or are near their 52 week high. But there are some stocks which instead of going up are making fresh 52 week low. These stocks are usually in small cap category and has some kind of problem or the other. Hence retail investors should completely stay away from these stocks. 

The stocks which made fresh 52 week low as on Feb 17, 2012 are show below:

Income Tax Saving Options / Instruments in India : 2012

With financial year FY 2011 - 2012 ending soon, tax savings is usually a big headache. Where to invest, how much is the return and other questions boggles our mind. Hence InvestorZclub has compiled a list of instruments which would help you in knowing the products that can save you tax and generate good returns on your investments

Employee Provident Fund: EPF (80 C)

As pet IT Act 80C, EPF scheme offers a total yearly exemption of INR 1 lakh. In this fund, 10 % to 12 % of a person's basic salary gets deducted and the other 12 % is contributed by the employer.

Average returns: 9.5%

Maturity period: One can withdraw the entire amount in instances of leaving job, retirement after 58 years of age or taking VRS. Partial withdrawal can be done for home, medical related expenses.

List of Stock Market based Movies: Must Watch for Traders and Investors

I have seen lot of stock market based movies sometimes for learning and sometimes for the sheer adrenalin rush. I particularly like following movies and would recommend investors and traders to see them as they not only provide good learning but also boils your blood and keep you on which is very essential in stock markets.

Margin Call (2011) : A taut, sinewy drama set in a Wall Street investment bank. 

Wall Street (1987) : The classic Wall street film. You will love Michael Douglas' character Gordan Gekko

Warren Buffett Biography PDF

Warren Buffett, the world's richest investor turned philanthropist, has turned the ailing textile business of Berkshire Hathaway into a multi billion dollar furniture to Insurance giant after acquiring it in 1965. 

At the age of six, Buffett purchased 6-packs of Coca Cola from his grandfather's grocery store for twenty five cents and resold each of the bottles for a nickel, pocketing a five cent profit. While other children his age were playing hopscotch and jacks, Warren was making money. Its very encouraging to see that buffett who used to sell coca cola on trolley at the age of Six is now the owner of Coca Cola. He is the largest shareholder of the company as on FEB 2012. 

Tips to succeed in equity investing: 4 Mantras to remember

We all know that the way to make returns higher than inflation is to invest in equities directly or indirectly. This helps investor grow their capital much faster and will help beat inflation inspite of sharp periods of decline. Direct equity investment involves buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises.

If one remembers following points while investing in equities the chances of doing blunders reduces substantially.

ONGC Q3 FY 2011 - 2012 Result Analysis

Oil and Natural Gas Corporation (ONGC), India's largest oil and gas exploration company, reported a 4.8% decline in net profit at Rs 6,741 crore for the quarter ended December 2011 as against Rs 7,083 crore in December 2010.

Net sales too fell 2.5% to Rs 18,123 crore from Rs 18,586 crore in the same period a year ago. ONGC also reported a royalty reversal of Rs 3,142 crore as against an expectation of Rs 2,500 crore.

Bharti Airtel Q3 FY 2011 - 2012 Result Analysis

Bharti Airtel, India's largest telecom service provider, grew its revenues by 7% to Rs 18,477 crore in Q3 of current fiscal over the September 2011 (Q2) quarter. Its earnings before interest, tax, depreciation and amortization grew 2.5% sequentially while net profit declined by 16.6% y-o-y and 1.5% q-o-q to Rs 1,011.3 crore. Bharti’s third quarter performance shows that while it has managed to grow revenues, maintaining profitability is increasingly becoming a challenge.

Bharti reported a higher than expected SG&A of Rs 3,465 crore compared to estimates of Rs 3,116.7 crore. The impact of this higher SG&A spend has hurt the bottom line by Rs 235 crore. The company’s EBITDA margins too have contracted sequentially from 33.6% in Q2 to 32.2% in Q3.

Bharti’s ARPM rose to Rs 0.446 compared with Rs 0.436 a quarter earlier. Consequently, the company’s ARPU (average revenue per user) improved by Rs 4 sequentially to Rs 187 during the quarter.