Indian Rupee (INR) vs Pakistan Rupee (PKR)

Forget USD, you will be surprised to see that Indian Rupee has weakened by more than 15% against Pakistan rupee in past 3 months. Three months back an Indian Rupee could fetch 1.85 PKR (Pakistani Rupee) while now as on 28th Aug it's fetching just 1.54.

Countries that support Syria vs Nations against Syria

The countries in the region and western world are divided over the military attack on Syria following the suspected chemical attack carried out in country against it's people which has claimed more than 300 lives. If the tension increases, it could have serious repercussion for financial markets globally. 

Following is the summary of each countries stand as far as military action in Syria is concerned.

Crude Oil historical price in India: 10 year chart

As of 27th August 2013, the crude oil basket in India crossed Rs. 7500 per barrel on MCX, an all time high level due to INR at all time low of 66 plus against USD.

Sell Tata Steel 310 Call at 0.60 premium

Tata Steel has moved up sharply from the lows of 195 (7th Aug) to 180 (23rd Aug) due to short covering and improving fundamentals of steel domestically. However a 44% rise has been too steep in short period of time and hence might face significant resistance going forward. As on 29th May 2013, the stock started it's steep fall from 322 odd levels to a low of 195, and technically a 61.8% Fibonacci retrenchment ends at 275 odd level which could broadly be a big supply zone. 

Valuation wise Tata steel is trading at around 6 times EV to EBIDTA which is expensive compared to Arcellor Mittal Valuation which is trading at around 5.6 times EV to EBIDTA based on FY-14. Considering all these factors once can sell 310 call option of Tata Steel at current premium of 0.60 and generate 1.2% return on margin amount in 4 days.

Total Return from the trade:

Considering one is able to sell the Aug Call option of Tata Steel 310 strike price at current market premium of 0.60 he/she can generate following return from this trade:

USD vs INR: Is this the top?

Ask any exporter, importer, analyst, currency expert or economics expert no one would have imagined 20% plus fall in Indian currency vs USD in matter of less than 4 months. INR depreciated from 53.80 levels on 1st May 2013 to 65.50 as on 22nd Aug 2013 a sharp fall of 21.7% in less than 4 months. 

Point taken that our currency is not alone in this fall and other emerging market currencies having high current account deficits fell sharply as well like Brazilian Real (BRL) is also down around 20% since 1st of May 2013 but the fall has been too much, particularly for INR, in very short span of time and the reversal is inevitable. Just consider the following facts:

1. Indian Economy is expected to grow by at least 5% in FY-14 and at least 6.0% in FY-15 vs U.S economy expected GDP growth rate of 2.6% in FY-14 and 2.8% in FY-15. In terms of growth rate difference India should continue to attract growth oriented capital from west from medium to long term perspective.

Emerging Market Currencies vs USD

The talks of United Stated Fed tapering has made emerging market currencies go into tailspin. Some countries such as India and Brazil has lost more than 15% of it's currency value against USD since 1st of May 2013 which has led to both equity and bond market selloff. Indian Rupee fell to all time low of Rs 64.50 against the greenback on 21st Aug 2013.

Is Rakesh Jhunjhunwala betting on Auto sector in India?

Rakesh Jhunjhunwala, known for his contra bets, seems to have turned bullish on Autos as he recently bought over 6 lakh shares of Escorts at around Rs.88 on 14th August when stock got locked in 20% upper circuit. 

Escort delivered good set of number in the 3rd quarter of FY-14 and is trading at attractive valuation based on TTM EPS. The company's trailing 12-month (TTM) EPS was at Rs 16.23 per share including EPS of Jun, 2013 quarter. The latest book value of the company is Rs 131.94 per share. At Rs.88 the stock's price-to-earnings (P/E) ratio was 5.46 and price-to-book value at 0.67. 52 week high low for the stock is 95.40 - 48.40 respectively.

NSDL Transaction Charges

With effect 1st September 2013, Depositories (NSDL and CSDL) has levied transaction charges of Rs 4.5 and Rs 5.5 per ISIN respectively on debit instruction. These charges are irrespective of the transaction value and would be levied on delivery Sell trades in cash segment.

Points to note:

• NSDL/ CDSL charges are levied only on Delivery Sell transaction and not on Delivery Buy transactions

• NSDL / CDSL charges are levied on per scrip basis at net level.

• NSDL / CDSL charges are levied per scrip irrespective of value or quantity of transaction

• There is no change for Intra-day transaction or F&O transactions.

• Applicable service tax would be levied.

Brokerage Houses View on Hindalco Industries

With Q1 Fy 2014 results slightly disappointing, most of the global brokerage firms have published their ratings on the India's Largest Aluminium Company. Some have retained their previous rating while others have reduced their price target on the stock. 

Following is the list of brokerage houses and their rating and price targets for Hindalco Industries.

Individual's Forex Limit for Investing outside India

In order to curb dollar outflow and control current account deficit, the Reserve Bank of India has reduced the limit of forex an Individual can remit from India under Liberalised Remittance Scheme (LRS). Earlier the limit was $2,00,000 (Two Hundred Thousand) which is now reduced to $75,000 (Seventy Five Thousand) as on 14th Aug 2013.

Arvind Mayaram, Economic Affairs Secretary, said that individuals can no longer use forex for buying realty abroad however genuine forex needs can be approved by the apex bank. According to the revised norms, an Indian can now invest overseas only upto 100% of his networth compared to 400% earlier. 

Limit on rupee gifts to Non Resident Indians also cut to $75,000 a year. In 2102-13 outward remittance under LRS was more than $1.2 billion.

Infrastructure Companies Debt and Stock Valuation

Since past 5 years, every time there was a big fall in infrastructure related stocks, investors felt that was the bottom and could not fall further only to be disappointing as the stock of those companies kept falling relentlessly. Majority of the boom time infra stocks are now virtually penny stocks, down more than 95% from it's peak and around 90% from 2010 highs.

Take for instance GMR infrastructure which was ruling at Rs 70 in Jan 2010 is now trading at Rs.12 as on 7th Aug 2013. Lanco Infratech has fallen 93% to Rs.5 from the levels of Rs.75 it was at in August 2010. GVK power fell from 52 levels in Jan 2010 to Rs.6 again a fall of more than 88%. HCC touched a high of 81 on 18th Jan 2010 and has fallen to Rs 10 as on 7th Aug 2013, a fall of around 88% in 3.5 years. HCC peaked at Rs140 in Jan 2008. Nagarjuna Constructions is down more than 90% since June 2010. The stock touched a high of Rs.192 in June 2010 but has now come down to Rs.19.

Allahabad Bank Dividend Yield and History

Public Sector Banks stocks have fallen like house of cards on the back of heavy portfolio selling fearing the exponential rise in non performing assets in coming months. 

The gross and net non-performing assets of almost all public sectors banks are rising fast since past couple of quarters mainly due to debt restructuring and casualties in specific large accounts. However the steep fall in stock prices have made most of the PSBs attractive for medium to long term investors as they are trading at historical low valuations and high dividend yields.

HUL Q1 FY 2014 Result Analysis

Hindustan Unilever (HUL) reported average set of numbers for the first quarter of current financial year with tepid volume growth of just 4% YOY. Net profit reported for the quarter was at Rs.1,019 crores on revenues of Rs.6,687.49 crores against net profit of Rs.1331.19 crores on revenues of Rs.6,250.15 crore in the corresponding quarter last year.

Year on Year the net profit has fallen 23% while revenues have gone up 7%. For FY-14, HUL is expected to generate around Rs.28000 crores of revenue and Net profit of Rs.4000 crores, against revenue of Rs.26317 crores and Net profit of Rs.3829 crores in FY-13.

Wockhardt Ltd: Valuation bubble burst

Many investors and traders might have been curious to know what went wrong in the well know pharmaceutical company Wockhardt Ltd and why it's stock fell like nine pins in the past couple of months. 

The main reason for the fall is valuation bubble burst. Investors are paying the price of irrational exuberance as Wockhardt continue to crash from the peak of 2170 made in March this year. The stock has fallen 70% since then and has lost around 17000 crores of market value in 4 months . As on 24th July the stock closed at Rs.660 and has a market value of Rs.7244 crores.

Reliance Industries Q1 FY - 2014 Result Analysis

Reliance Industries (RIL) has announced first quarter results which were inline with street expectations with slight disappointment on GRM front. Following are the key takeaways from the RIL's Q1 FY - 2014 results.

Net profit in Q1 FY - 2014 is lower than previous quarter (Q4 FY-2013). The refining giant reported Rs 5,589 crore in March 2013 while it posted Rs 5,352 crore in June 2013.

Sell Infosys 1700 Put Option of July series at 6.50

With Infosys q1 result scheduled on 12th July, the Implied Volatility across deep in the money Puts and far out of the money calls are very high resulting in reasonable premiums for even 1700 Put or 3200 calls which are almost 30% away from current market price of 2540.

In our view  1700 Put option is highly safe considering the current valuation of the company and expectation from N. Murthy. 

Traders can sell Infosys 1700 put at current premium of 6.5 thereby earning a return of almost 2.5% in 14 days.

Total Return from the trade:

Considering one is able to sell the July Put option of Infosys 1700 strike price at current market premium of 6.50 he/she can generate following return from this trade:

Rakesh Jhunjhunwala stake in Kesoram Industries

Rakesh Jhunjhunwala seems to have turned bullish on ailing Kesoram Industries, a diversified company chaired by B.K Birla, having large capacities in Tyres, Cements, Spun Pipes etc.

Rakesh Jhunjhunwala through his wife's account has acquired 60 lakh shares in Kesoram Industries taking his shareholding in the company to around 7%. The shares were acquired through rights issue. The company had recently offered its shareholders to buy additional shares in the ratio of 7:5 at Rs 65 apiece.

The other major investor in the company is LIC holds over 10% of the equity shares. As of March-end, promoters had 27.12% stake in the company.

Advantages for traders using Metatrader Signals Service

As described in this post (trading signals by Metatrader 5) forex traders using the trading signal on Metatrader 5 platform have number of advantages over conventional forex brokers and platform providers. Following are some of the key advantages of using Metatrader Signals Service:

FIIs take back 44000 crores from Indian Capital Markets

Foreign Institutional Investors pulled out more than $7.5 billion from Indian debt and equity put together in the month of June 2013. The withdraw has been the highest from Indian capital markets in a single month ever, thanks to our dilapidated current account deficit and currency. Since April 2013 the Indian currency depreciated more than 10% in 2 months thereby erasing all the benefits of interest rate arbitrage that existed between U.S. and India. 

Investors in U.S. borrow in their home country at less than 2% and invest in Indian govt. and corporate debts at over 8% thereby yielding huge return. But since the overseas investors are borrowing in USD and investing in INR the depreciation in the invested currency beyond the arbitrage points makes it unattractive and worthless for them to stay invested. Similar is the situation for overseas equity investors, as they benchmark their return in their home currency, the depreciation in invested currency negated all the equity returns of April and May this year, which led to significant outflow from Indian stock markets as well.

World largest gold company stock falls to 20 year low

Barrick Gold (ABX:US), the world's largest gold producing company having reserves of more than 140 million ounces of gold in it's mines all over the world fell to a two decade low recently due to crash in gold prices and some of it's own internal problems.

The average cost of production of 1 ounce of gold at barrick gold is around $950 USD and was selling it at more than 100% premium when the gold price touched $1900 per ounce in 2011. Consequently the stock touched an all time high of $56 on 21st April 2011 and was having a huge market value of around $56 billion then. The stock is now hovering around $15 with a market value of $15.5 billion.

How to trade forex based on MetaTrader trading signals from successful traders

Whether you are new to forex trading or an experienced one, trading signal from Metatrader 5 platform will surely enhance your success rate and profits. Trading Signals can help you monitor trades of successful traders and have your terminal automatically reproduce everything your target trader is doing. You need to choose a provider and connect to his signal using setting provided in your client terminal. Once the signal provider is selected all his trades gets executed for your account.

New SEBI Guidelines on Buyback, FIIs and SME Listing

SEBI has introduced some key changes in rules for share buyback by Indian Companies, SME listing and Foreign Institutional Investors (FIIs). Following are the highlights of changes introduced:

On buyback

• Mandatory to buy back 50% of offer size; penalty of 2.5% on failing to do so
• Buyback period reduced to six months from one year
• Tender route compulsory if buyback size is over 15% of paid-up capital

BSE A Group stocks that under-performed Sensex

Since 21st may 2013 BSE Sensex had fallen from 20300 odd levels to around 18800,  a fall of around 7.4% in one month time frame. Though the fall in index is quite large but the cracks in individual stocks have been massive and some stocks from BSE A group has fallen as much as 40 to 50%. Following is the list of stocks from BSE A group which have fallen more than 20% in last one month.

The gloom doom and panic - Is everything all that bad?

With all the talk of FII money flowing back to US markets from India and analysts suggesting levels which are unnerving, there is complete panic out there and people might be thinking what to do now. So in this gloomy scenario, is that all bad or people are over reacting? Lets look at the following points:

1. The Quantitative easing by Fed was anyway expected to start rolling back by year end and people were well aware that this massive money printing cannot go on foreever. As a result there has not been any bubble like situation in equity asset classes around the world. Most of the equity market are reasonably valued and Indian markets are also trading below historical average valuation. Hence there will be valuation support on further fall in equity markets in India. 

Model Portfolio Update - June 2013

The market crash has provided a descent opportunity to accumulate some good quality stocks at attractive valuations. Hence my model portfolio which had 109k cash has been updated with stock that I believe has attractive valuation and long term story.

Check out the my updated portfolio here: Amit Agarwal's Model Portfolio

Top 3 Free Futures & Options trading simulators online

There are many free trading simulators for cash based buying and selling of stocks on virtual money and almost all the popular ones are good without having huge differences. 

But when it comes to Futures and Options (derivative) trading simulators there are not much choices and the virtual world in this space is pretty much occupied by following three. 

Sell IndusInd Bank: Recommends Citigroup

Citigroup has recommended a "sell" rating on IndusInd Bank with a target price of 455 rupees, citing stretched valuations.

The investment bank says IndusInd has transformed itself into a "unique" bank that is also a non-banking financial company (NBFC).

However, Citi adds that "future growth will likely be less dynamic, amid a tougher macro, and less unique" as other NBFCs are applying for banking licenses.

The stock has been a huge out-performer in the last 2 years and has more than doubled from 250 odd levels in June 2011 to 500 in May 2013. Going forward the credit growth is expected to slowdown due to slowdown in India GDP and capital expenditures which is expected to put pressure on Banks and financial institutions in general.

Fitch India Rating History

Fitch has maintained the long term rating of India at BBB- in 2013 but revised to outlook in 2013 to Stable from Negative in 2012. India had negative outlook in May 2001 and post that it was stable till 2012 when the outlook was revised again to negative. Stable outlook should provide some relief to fast depreciating rupee and help in getting some flows in debts and equity.

Nifty support @ 5800

After the relentless rise in the month of April and May this year market is finally showing some correction, thanks to our domestic problems such as currency depreciation, reform slowdown and general election next year.

Nifty has corrected 5% in the last 20 days and is witnessing selling pressure at higher levels beyond 6100. Defty (dollar nifty) has corrected 8% in last 20 days due to massive correction in INR vs USD.

Though the upside seems fairly capped at 6100, the downside also seems to be capped at 5800. As on 7th June the Nifty closed at 5880. Below are the indicators which are suggesting limited downside for Nifty below 5800 in the current month. However in case INR blows out completely or some grave news comes out of Europe or US, the 5800 level could get broken and the market could slide down significantly as the major support would have got broken.

Educomp Solutions: The rise and fall of the euphoria

Educomp Solutions is another example of investor's exuberance and irrational behavior which, like others, ended in blood bath. So what went wrong with Educomp and why it went up crazy and then crashed? Lets take a brief look at the timeline:

22nd Dec 2005 - Educomp Solution IPO (issue price = Rs 125) closed got hugely oversubscribed on projected education boom in India. At Rs 125 the company was valued at a reasonable market value of Rs 200 crores. The Face Value of each share was Rs. 10

13th Jan 2006 - The shares of Educomp got listed on NSE and BSE and went to as high as Rs 315 but closed at Rs. 285. The shares 

28th Mar 2006 - The stock price touched 400 level and a PE valuation of more than 45. People started talking about exponential growth in the multimedia educational product of the company and justified high valuation.

30th  Mar 2007 - The stock price touched Rs 1000 mark and a PE valuation of 42 times as the company Net profit more than doubled from 14 crores in FY-06 to 38 crores in FY- 07. Within 15 months from the listing the stock and the market value went up 7 times to Rs 1600 crores.

Buy RIL on dips in the range 770 - 780

• Reliance Industries witnessing strong support in 765 to 770 band and has bounced back many times from those levels in past 10 months.

• Fundamentally the outlook beyond 2014 looks positive as the gas price agreement will be over and there could be good amount of increase in per mmbtu prices

• The stock is attractively valued based on FY-15 EPS

• Has been an underperformer since last 3 - 4 years which has resulted in significant base building for the stock.

• Fundamentally or technically the stock seems to have limited downside below 760 levels.

India GDP Growth Rate in last 10 years: 2003 - 2013

In last 10 years India GDP grew at a compounded annual growth rate of around 7% with growth rate as high as 9.5% in FY 2006 and 9.3% in more recent year 2011 to as low as 4% in 2003 to 5% in the latest year 2013. 

FII Inflow Data in India since 1993: Debt and Equity

Since the Indian economy was liberalized in 1991 and Foreign institutional investors were allowed to participate in Indian Stock Markets, flood of money has come to Indian equities and debt instruments since then. Though it remained a bit sluggish in initial years but has picked up pace since 2004 when we received around 40000 crores from FIIs. 

In 20 year period between FY-1993 and FY-2013 we had only two years FY-1999 and FY-2008 when FII were net sellers and taken money out. FY-2013 witnessed record inflows of 140000 crores or $26 billion USD which is more than the inflows of first 10 years put together. 

MQL 5 Market: The Best Marketplace for Trading Robots and Software

Trading Robots or Automated trading system / software has gained huge importance in the last few years specially in forex environment, and slowly the automated trading or algorithm trading is catching up in the stock markets as well. 

As far as trading robots are concerned there are plenty with some absolutely free and some very expensive depending upon the popularity and track record. The dis-advantage of trading forex through trading robots is that there is no human intervention and the software does everything according to what's there in the algorithm, however this is it's biggest strength as well as it works on strict rules written for profit maximization and loss minimization. 

Make 1.25% return in 5 days

Japanese Stock Market fall of more than 7% and quick appreciation of Yen vs USD on the back of fear of inflation in Japan has led to a very high conviction trade that can generate more than 1.2% return in 5 days.

The trade is to sell 1750 May call option of Maruti at current market premium of 3.2 expecting that Maruti should not cross 1750 levels in next 5 days.The recent month closing high for the stock was around 1742.

Total return from the strategy

Just Dial Valuation Very Expensive - Avoid

Just Dial provides search services on the information and user reviews from its local business, product and services database across India. Its search service is available to users through multiple platforms: Internet, mobile, telephone (voice) and text (SMS). 

In fiscal 2012, the company addressed over 254.3 million search requests across its platforms. As of December 31, 2012, the company was conducting approximately 195,100 campaigns for the paid advertisers.

Momentum Trading - Is it a good trading strategy?

The answer depends on what kind of risk return profile this strategy has and whether your temperament matches up to the temperament required in this strategy. So it's important to understand the contours of the Momentum trading style first to make a decision.

Technically momentum is mass times velocity and Physics says that if an object's velocity of movement is accompanied by large mass it will have very high tendency to continue to move in it's direction until and unless a massive force try to stop it or change it's direction. It has been witnessed that the same physics applies to stocks and markets as well. Whatever be the direction, if the movement of the stock is accompanied by larger volume it will have natural tendency to continue to move in that direction. 

Sell ITC 360 Call Option at 1.60 premium

With ITC Q4 result out which was largely inline with market expectations, the stock has shown muted reaction. The stock offcourse is very expensive trading at 35 times forward year EPS and is having huge market valuation of 2.66 lakh crores.

Considering the recent price action and overall valuation of the stock once can easily sell May series ITC's 360 call option at the current market premium of Rs 1.30.

Total Return from the trade:

Considering one is able to sell the May Call option of ITC 360 strike price at current market premium of 1.30 he/she can generate following return from this trade:

ROE: Return on Equity or Return on Ego?

ROE is off-course Return on Equity that measures returns generated on shareholders wealth and companies across sectors try hard to maximize it. But as far as Hotel Industry in India is concerned it seems ROE is certainly Return on Ego as the promoters of most of the hotel companies in India went on to expand on leverage and at any cost without considering the return economics in mind. This is primarily due to the fact that there is a certain aspiration and glamour around hotels, especially in the high-end luxury segment, and many developers get in the race to build grand properties rather than one that will give them the best financial return.

Best Software for Trading Signals on Forex and Stocks

Metatrader 5 has taken trading based on Trading Signal to an altogether new level. Now beside having technical charts providing you trading signals for your trades in forex and stock markets now you can subscribe trading signals from the most successful traders and copy their trades for maximum profits. As far as trading platform is concerned, Metatrader is undoubtedly the best as it offers highest number of functions among all competitors and has been in existence for over a decade now. It also commands over 80% market share.