Veritas Research Report on RCOM, DLF: PDF

Veritas Investment Research, a Canada based equity research firm has pegged the actual worth of India's largest real estate company DLF and Anil Ambani owned second largest telecom company  Reliance Communications (RCOM) at Rs. 100 and Rs. 15 respectively.  

Veritas dubbed India’s largest realtor ‘a crumbling edifice’ in its March 2012 report and on 19th June 2012 the equity research firm, which torn apart Kingfisher Airlines’ financials last year — well before the world woke up to the reality of the doddering airline, has snubbed RCOM numbers and has recommended sell  on the stock with a target price of Rs. 15.

EPF Transfer vs. Withdrawal - Rules and Benefits

Employee Provident Fund or EPF is the only investment instrument in India which enjoys EEE advantage. 

EEE is acronym for exempt from tax during deposit, exempt during interest accumulation and exempt from tax during withdrawal on the corpus after retirement or specified period.

EPF is commonly seen as retirement fund which is accumulated and compounded at a very high interest rate for the tenure of your employment. The benefits of EPF is only visible when it is left for accumulation for 30 - 35 years. 

Rakesh Jhunjhunwala Interview

Rakesh Jhunjhunwala, the billionaire investor and trader who is often compared to the legendary investor Warren Buffett, doesn't want to be recognized as India's Warren Buffett. "It's not a fitting comparison. In terms of wealth, success and maturity, he's far, far ahead," says Jhunjhunwala in an interview at his office in a prime location in Mumbai overlooking the Arabian Sea."I'm not a clone of anybody. I'm Rakesh Jhunjhunwala," he booms. "I have lived the world on my own terms. I do what I enjoy. I enjoy what I do."

Buy Hindustan Unilever for short term trading

Hindustan Unilever made a new life time high today and remained strong throughout the trading session today as on 13th June 2012. The stock touched a lifetime high of 448.50 before closing for the day at 447.50. 

For the past few trading sessions the stock is witnessing strong delivery based buying which suggest that there is more upside left in the stock. Traders can go long at the current levels of 446, 447 keeping a tight stop loss at 439 for a possible target of 460 in next few trading sessions. However if stock moves past 460 continue to hold the stock with insurance of trailing stop loss placed 2% below the then existing price.

Sensex 2013 PE valuation near historical bottom

Historically India's benchmark Index, SENSEX, has bottomed out at a PE valuation of 10 to 12 times. At the current index level of around 16,500 and an estimated EPS of 1250 for the financial year 2013, the index is trading at a PE multiple of around 13 times FY 13 earnings. Above that considering the appreciation of dollar against rupee, the valuation in dollar terms is already around 11 times if we assume an average dollar rate of 48 against INR.

The Confusing Stock Analysts

Warren Buffett once said that serious investors should not believe on all those talking heads coming on CNBC or other business news channels frequently giving out recommendation on stocks you should buy. I spotted a very interesting instance which will make you understand why Mr. Buffett said so.

In the following snapshot, if you look at the encircled area you would notice that there are two recommendations on Hindalco both given on 7th June 2012 at a difference of just 1.5 hours. The target prices given are poles apart. Now the question is whom to believe and whom to leave. The chances of success and failure are equal. So even if you succeed once there is no guarantee that you will succeed next time again. That is why for a layman who just buy/sell stocks based on analysts recommendation it is impossible to make money consistently in the long run.

Buy Saregama India for trading

Kolkata based RPG group company, Saregama India, has zoomed over 10% to Rs 86 on back of over ten-fold surge in trading volumes. Over 9 lakh share, representing around 5% of the total equity of the company were traded on NSE and BSE put together, against an average sub 40,000 shares that were traded daily in past ten trading days on both the exchanges.

The entertainment company has reported a net loss of Rs 7.42 crore, due to Rs 11 crore provision for doubtful debts and advances for the quarter ended March 2012. The company had a net profit of Rs 5.32 crore in the same quarter of previous fiscal. Total operational income too, declined 7% at Rs 41.81 crore on year-on-year basis.

Global Economic Events Calender - June 2012

05/06/2012:

Australia RBA Interest Rate Decision

Germany Purchasing Manager Index Services (PMI) data for May 2012

Bank of Canada Interest Rate Decision

07/06/2012

Japan Gross Domestic Product Annualized (Q1)

United Kingdom BoE Interest Rate Decision

United States Consumer Credit Change

Switzerland Unemployment Rate

08/06/2012

Germany Exports and Imports (April)

Best example to understand Inflation

If it has been difficult for you to understand inflation just by reading the definition from your text book or financial dictionary then the following video is for you. 


The illustration shown in the video below will certainly make you understand inflation from the bottom of your brain.

Goodbye Inflation Confusion.

Reliance Industries (RIL) buyback Update

As expected, the recent fall in stock markets is not affecting RIL stock price as much due to the fact that on any massive fall RIL does aggressive buying of it's own shares under the ongoing buyback programme. As on May 24, RIL had purchased a total of 19.22 million shares. 

Rough calculations show the company has so far bought shares worth Rs 1,364 crore, about 13 per cent of the maximum buyback amount. RIL’s Rs 10,440-crore buyback offer is the largest ever in India Inc’s history. The programme started on February 7 and is scheduled to continue till January 19, 2013.

Though the buyback program began in February, it gained momentum only in May. The company picked up 12 million shares in May 2012 as against three million in April. Interestingly, 25 percent of the share trading volume in the RIL counter this month has come from the buyback.

InvestorZclub believes that the stock is looking attractive in terms of valuations and Rs 680 to 700 range should act as strong support zone. 

Global Investment Banks downgrades India 2013 GDP forecast

India's fourth quarter 2012 GDP growth of 5.3 percent sent shockers to the global investors which led to series of downgrades in expected 2013 GDP growth by leading global investments banks. 

Morgan Stanley has cut its 2012 economic growth estimates to 5.7 per cent from 6.3 per cent, after already downgrading its forecasts about two weeks ago from an initial estimate of 6.9 per cent growth. 

Standard Chartered Bank cut its financial year 2013 gross domestic product (GDP) forecast to 6.2 per cent from 7.1 per cent while CLSA said it “will probably” lower its consensus GDP forecast of 6.3 per cent to around six per cent. 

InvestorZclub believes that there is increased chance of another rate cut of 25 bps to 50 bps in next RBI meet in spite of inflation being in un-comfort zone. The inflation in India is mainly due to supply side bottlenecks which can hardly be controlled by keeping rates high. A 50 bps points cut in interest rate will not feed into inflation too much but could be a big confidence booster for investors which would lead to increased inflows and could fix our current account deficit.

EUR vs. USD - 5 Year Chart

EUR has seen precipitous fall against USD in the past 1 year, from the levels of 1.47 in early 2011 to 1.24 in May 2012,due to weakening Euro Zone situation.

In the past 5 years EUR has seen the lowest closing level of  1.19 as on 8th June 2010. A fall below this level would see further downside for the EUR currency. 

However it seems that most of the negatives in the Euro Zone is already priced into the currency. In case Greece exits from the Euro Zone, a fall below the levels of 1.19 cannot be ruled out.

Sell In May And Go Away - How true is the proverb?

As far as Dalal Street is concerned the adage "Sell in May and go away" seems to be holding true for the three years in succession. 

During the month of May 2012 the benchmark index, Sensex has fallen by over 1,100 points. This would be the third consecutive year of a large-scale plunge during the month of May for the Indian stock market, as also for many global markets, the historic data suggest.

Mark Zuckerberg Biography PDF - ebook: Download

Facebook founder, Mark Zuckerberg, who is being compared with the legendary Apple founder Steve Jobs, is a 26 year old billionaire as on May 2012. After the successful IPO of Facebook on 18th May 2012 at $38, Zuckerberg became one of the richest person in the world with networth exceeding $19 billion. 

Zuckerberg is the largest individual shareholder with 28.4 percent of the common stock and controls 56.9 percent of the voting power in Facebook. 

White Paper on Black Money in India - Highlights

The long-awaited White Paper on black money, which got tabled in Parliament on Monday, prescribed moderate tax rates and measures to rein in the parallel economy in real estate, the financial sector and stock markets. The paper neither gave any estimate of unaccounted money nor revealed any names that could be held responsible for its accumulation.

Citing the examples of the US, UK, France and Germany, the paper said, "In the past, India has also opted for voluntary disclosure schemes. A similar scheme, targeted at black money stashed abroad, can be a one-time option in view of the increasing capacity of tax administration to access information from foreign jurisdiction."  

Cairn India, BOB and Godrej Consumer enters MSCI, Suzlon Out

Cairn India, Bank of Baroda and Godrej Consumer Products has been included in MSCI global indices effective 1st jun 2012. These stocks have rallied in an otherwise weak market.

Godrej Consumer Products has rallied over 9% to Rs 567 on the National Stock Exchange.  Cairn India and Bank of Baroda are up 3% each on back of huge volumes.

However, Suzlon Energy has slipped 5% at Rs 18.85 on removal from the MSCI index. All changes in MSCI indices will be implemented on close of May 31, 2012.

Rakesh Jhunjhunwala buys RBS stake in Prime Focus

Rakesh Jhunjhunwala has increased his stake in visual entertainment services firm Prime Focus by acquiring additional shares worth Rs 11 crore through open market transactions.

According to bulk data available with the stock exchanges, Jhunjhunwala purchased 25.50 lakh shares (amounting to 1.71% stake) of Prime Focus held by Royal Bank of Scotland (RBS) for Rs 42.05 a share, valuing the deal to Rs 10.72 crore.

As of last month, Jhunjhunwala and his wife Rekha Jhunjhunwala held 5.93 per cent stake in the company.

Undervalued beaten down stocks in Sensex and Nifty

There can be no better alternative to stocks which are sector leaders and are available at very attractive valuations. Not very often we get opportunities where the market leaders are trading at discount to their intrinsic values. InvestorZclub has compiled a list of stocks which are leader in the sector they operate in but are available at the bottom range of the historical valuation due significant fall in stock prices. 

Sell Reliance Industries 640 Put Option at Rs.3

Option traders can consider selling 640 Put option of Reliance Industries (May Expiry) at the current market premium of Rs. 3.00. This trade would generate more than 3 percent return in less than 20 days. However it must be noted that if RIL falls below 637 then there would be loss of Rs. 250 on every rupee fall in the stock for each lot (RIL lot size 250).

Following are the details of the trade:

NIFTY to face resistance at 5125 - 5160 levels

Nifty after breaching of the last two months trading range has struggled to move past the 200 DMA (5103) during last week trade. The Nifty drifted lower after testing the 200 days SMA on Tuesday's trade. The corrective price action may continue until we see a faster retracement of the recent falls and a breach of the lower peaks and troughs formations.

Nifty has closed below the 61.8% retracement level (4950) of the December-February rally. In the process, it has also filled the previous rising gap area of 4980 formed on January 19, 2012. Sustenance below 4950 levels in the coming sessions will see the index eventually heading for a deeper retracement of the January-February rally to the extent of 70-75%, which projects major support near 4850-4800 area.

Countries with highest income tax rate of 50 percent

Are you based out of US, India or Canada and blame government for very high tax rates where the highest income tax rates are somewhere 30-33%. Checkout the income tax rates of the following countries and you will not feel that bad.

Austria: Average income in Austria, one of the world's best place to live, is about USD 50,700 while the highest income tax rate is 50%.

Belgium: Belgians in 2011, with average income of USD 52,700 pay, took home less than 45% of what they cost their employer, according to a survey by OECD. Here also the highest income tax rate is 50 percent.

Japan: It's the only asian country to have top tax rate of 50% which is more than double Asia's average rate of 23%

United Kingdom: UK increased its highest tax rate by 10 percentage points in 2010 to 50%.

Implied Volatility of NSE Nifty Options - India VIX Index - PDF

India VIX (Volatility Index) in a index to measure the implied volatility of Nifty 50 Index Option prices over the next 30 day period. The index reflects the investor's sentiment and is a helpful indicator of the amount of fluctuation that markets might witness in near term. Higher the implied volatility, higher the India VIX value and vice-versa.

Volatility is often described as the "rate and magnitude of changes in prices" and in finance often referred to as risk. 

Pipavav Shipyard's promoter stake pledge at 97 percent

In a disclosure made by the company to stock exchanges it was found that more than 97% of the promoter's stake have been pledged. Such high level of stake pledge is alarming for the investors as it's not clear whether the promoter is still interested in the company or not.

Following are the details of the equity capital structure of the company and the number of shares pledged by the promoter.

Capital (No. of Shares in Million): 691.20

Promoter Stake (No of Shares in Million): 299.58

Promoter Stake (in %) : 43.34

Pledged Shares (No of Shares in Million) : 291.47

% of Paid up Equity Pledged: 42.17

% of Promoter Stake Pledged : 97.29

Bharti Airtel Q4 2012 - 2013 Result Analysis

Bharti Airtel Ltd today reported a consolidated net profit of 10.06 bln rupees for the quarter ended March 2012, missing the Street's expectation of 12.46 bln rupees. The company's consolidated revenue for the quarter was 187.29 bln rupees.

Following are the highlights of the reporting quarter's earnings and comments of the company's management team: 

Barclays overweight on Bharti Airtel

Barclays has retained its "overweight" recommendation on Bharti Airtel, after the company announced its fourth quarter result, with a target price of 440 rupees.

The brokerage believes that improving subscriber additions could turn revenue growth dynamics in the company's favour. Also, the cancellation of some operators' second-generation licences will help competitive dynamics and allow Bharti Airtel the flexibility to balance pricing and volume. 

Home Loan Calculator with EMI Comparison Feature

Several Home Loan Calculators are available on internet for calculating your EMI (Equated Monthly Installments) obligation for taking a Home loan. 
InvestorZclub brings to you an advanced mortgage calculator which will not only calculate your EMI obligation but will also help you in comparing the EMI's for different rates, tenure and principals in the same window so that you can decide better based on your pocket.

Peter Lynch Quotes PPT / PDF

Peter Lynch, former fund manager of Fidelity Magellan Fund and author of New York Times Bestsellers "One up on Wall Street" and "Beating the Street", is regarded as one of the world's most successful fund managers. 

His core investment philosophy was value investing, as proposed by Sir Benjamin Graham, but with a little bit of customization. Investors all over the world pay heed to what Mr. Lynch has to say and try to follow his investment techniques. 

A lot can be learned about his strategies and philosophy by reading his famous quotes. The following PPT presentation covers some of his most famous quotes on slides.

S&P downgrades India outlook to Negative from Stable

Standard and Poor (S&P), the foreign rating agency, has revised India outlook to negative BBB- Rating due to slowdown in investment and economic growth and widening of CAD.

The Indian Stock Markets reacted negatively to the news and fell around 1% from previous day close.

CLSA view on TCS

A better than expected result from India's largest software exporter, Tata Consultancy Services Ltd, have cheered the street but failed to impress one of the world's largest rating agency CLSA. 

Telecom spectrum bands and their significance

After the TRAI's recommendation on pricing of several spectrums, people might be thinking why 700 MHz band is priced so steep to 1800 Mhz band. The basic answer to this question is that lower level spectra can travel more with the same number of towers. In other words, operators would need to install much lower number of towers in lower-range spectra. As such, such spectra is more valuable.

Spectrum can be broadly divided into six classes. As their frequency (MHz) increases, their penetration power falls and the operators need to put more and more towers to cover the same area. It is approximately 70% cheaper to provide mobile broadband coverage at frequencies around 700MHz than using the core 3G frequencies at 2100 MHz. 

Following is a short description on each of the spectrum bands currently being used in India.

700 MHz -- Used for terrestrial TV transmission (Doordarshan) and possibly ready for broadband use by 2015.

A letter from a Tax Payer to the Income tax department: Humor

Date: 18th Feb 2012


To, 
The Internal Revenue Service (IRS), 
Department of Treasury 
Washington, DC

Sub: Payment of Tax Dues

Dear Sir / Madam,


Enclosed is my 2012 Form 1040, together with payment. Please take note of the attached article from USA Today archives. In the article, you will note that the Pentagon paid $171.50 each for hammers and NASA paid $600.00 each for toilet seats.


Please find enclosed in this package 4 toilet seats (value $2,400) and 6 hammers (value $1,029). This is in payment for my total tax due of $3,429.

Bharti Airtel subscribers base crosses 180 million

Bharti Airtel added 2.5 million new subscribers to its user base in the month of March 2012, highest in the last 12 months, due to increased number of MNPs going in favour of the India's largest telecom company, following the Supreme Court order for cancellation of 122 licences issued during A.Raja tenure.

As of March 2012, Bharti Airtel remains at No.1 position with a total subscriber base of 181.3 million while Idea maintains it's third position with 112.7 million subscribers. Vodafone remains second with total subscriber count at 150.5 million at the end of March.

Warren Buffett Quotes PPT - PDF

Warren Buffett, the billionaire investors and chairman of Berkshire Hathaway, has openly revealed his success formula and investment mantras in various interviews, meetings and discussions. 

Market Share of Sugar Producing Companies in India

Warren Buffett suffering from Prostate Cancer

Warren Buffet has recently been diagnosed with a stage 1 prostate cancer, which is believed to be non life threatening. The eighty one year old, billionaire investor, will begin a two month treatment of daily radiation in July. 

“I feel great -- as if I were in my normal excellent health -- and my energy level is 100 percent,” Buffett said in the letter yesterday. “I will let shareholders know immediately should my health situation change. Eventually, of course, it will; but I believe that day is a long way off.”

Prepayment charges on home loans abolished

Reserve Bank of India, in it April 2012 monetary policy review, has abolished the prepayment charges charged by banks from home loan borrowers on the prepayment of the outstanding principal before the loan maturity. 

The move is definitely positive for consumers but slightly negative for banks like ICICI Bank which are heavily exposed to home loans. 

However some private banks have already been providing home loans without prepayment charges.

Merrill Lynch bullish on IVRCL

Merrill Lynch Capital Markets bought additional 2.125 million shares of IVRCL Ltd. in a bulk deal today as on 16th April 2012 at Rs 70.83 apiece for Rs 15 crore through an open market transcation.

Last week, Merrill Lynch Capital Markets bought 1.6 million shares of IVRCL for Rs 11.83 crore.

Why FMCG Companies Trade at Expensive Valuations?

BSE FMCG index has gained 22 per cent since January 2011 even as the Sensex lost 15 per cent in that period. The index has been consistently making new all time highs in the month of March and April 2012. 

In 2007, the FMCG index had only a narrow premium over the PE of the broader market. In April 2007, for example, the FMCG index traded at 21.5 times, the Sensex was at 18.7 times and the BSE 500 at 16.8 times.

The gap in valuations of FMCG index, sensex and broader BSE 500 remained narrow from 2005 to 2009 but the premium began to rapidly inflate from 2010 onwards. The BSE FMCG index is now at a price-earnings multiple of 35 times. In contrast, the BSE Sensex trades at 17.6 times, and the broader BSE 500 is at 19.1 times (see the image above).

If one looks at the business model of the FMCG companies closely, it would become clear why the stocks of these companies are in high demand and trades at hefty premium.

George Soros Biography PDF

George Soros, a hungarian business man, investor and philanthropist, is the founder chairman of Soros Fund Managment. 

In September 2011, Forbes announced that George, has for the first time made to the list of top 10 wealthiest Americans, with a net worth estimated at $22.0 billion. According to this list, George is the 46th richest person in the world. 

India's IIP growth @ 4.1 percent in Feb 2012

For the month of February 2012 IIP (Industrial Production) growth stood at 4.1% as against 6.8 % in January 2012. But the statistical department revised the number for January 2012 sharply from 6.8% to 1.1% mainly on account of wrong data forwarded by the Ministry of Consumer Affairs. Sugar production was wrongly taken at 13.41 million tonnes, as compared to 5.81 million tonnes.

With such poor IIP data, there is a an increased possibility now that RBI might cut rates soon by 25 basis points if not 50 basis points in April to boost confidence. That should provide floor to the market and we might see some rally in interest rate sensitives.