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Showing posts from July 27, 2008

Go for Gold--BUY GOLD ETF;

Vidyalaxmi and Preeti Kulkarni, ET Bureau

The average return on gold in the past year has been around 30 per cent. But if you are planning to buy gold for investment purposes, make sure it comes with tax benefits and security. Gold has been doing well because of inflationary fears and the downtrend in equity markets.

It is also proving to be a good hedge against inflation, justifying Indians' age-old faith in the yellow metal. The average return on gold in the past one year has been in the range oDue to the current economic downturn and inflationary fears, gold is doing well," says Keyur Shah, associate director, World Gold Council, India. Gold has been rising over the past one year and experts feel the trend will continue . Some analysts expect the average gold price to hover around Rs 14,000 (per 10 gram) by December 2008.

Considering that gold prices are fluctuating between Rs 12,500 and Rs 13,000 of late (after touching the high of Rs 13,680 on July 15), there…

Sesa Goa jumps amid volatility

Our Bureau Kolkata, Aug. 1 Punters seem to be warming up for a rally in Sesa Goa. In the last one week, the stock has gone up by over 12 per cent. According to analysts, the prospect of substantially higher rates from one-year contracts and increased tilt towards the spot market, which is fetching even higher realisations, have not gone unnoticed in certain market circles.Enhanced Attention However, market sources said limited delivery volumes were behind the recent appreciation. The forthcoming bonus issue (1:1) is also a trigger for enhanced attention. It has fixed August 18 as the record date for bonus issue and sub-division of shares (from Rs 10 to Re one).The first quarter results also suggested that the company has been able to take advantage of 100 per cent spot price mark up through higher contract-to-spot and China-to-other market ratios. In a recent report, Indiabulls said it expected the trend of higher realisation and sales to continue during this fiscal year on…

HEG tumbles as board defers buyback decision

HEG slumped 7.94% to Rs 250 at 11:53 IST on BSE after the company deferred buyback plan till the next board meeting. The company made this announcement after market hours yesterday, 31 July 2008. Ahead of the announcement, the stock had surged 13.29% to Rs 271.55 Meanwhile, the BSE Sensex was down 63.08 points, or 0.44%, to 14,292.67 on weak cues from global markets. US stocks fell on Thursday, 31 July 2008, led by Exxon Mobil after its earnings fell short of Wall Street's expectations and as disappointing economic data revived fears of a US recession. On BSE, 49,644 shares were traded in the counter. The scrip had an average daily volume of 24,682 shares in the past one quarter. The stock hit a high of Rs 261 and a low of Rs 248 so far during the day. The stock had a 52-week high of Rs 609 on 1 January 2008 and a 52-week low of Rs 174 on 2 July 2008. Earlier after trading hours on 21 July 2008, HEG had announced that its board will consider buyback of shares on 31 J…

Triveni Engineering gains on turnaround June 2008 quarter results

Triveni Engineering & Industries gained 1.84% to Rs 94 at 12:20 IST on BSE after the company reported net profit of Rs 24.60 crore in June 2008 quarter as compared to net loss of Rs 19.97 crore in June 2007 quarter. The company announced the results after trading hours on Wednesday, 30 July 2008. Meanwhile, the BSE Sensex was down 44.59 points, or 0.31%, to 14,242.62. On BSE, 3.09 lakh shares were traded in the counter. The scrip had an average daily volume of 4.41 lakh shares in the past one quarter. The stock hit a high of Rs 97.30 and a low of Rs 93.10 so far during the day. The stock had a 52-week high of Rs 195.70 on 17 December 2007 and a 52-week low of Rs 55.10 on 10 August 2007. From a recent low of Rs 84.7 on 15 July 2008, the stock rose 8.97% to Rs 92.3 on 30 July 2008. The stock gained 1.10% to Rs 92.30 on 30 July 2008 ahead of teh results. The small-cap company had outperformed the market over the past one month till 30 July 2008, gaining 38.07% compare…

Now, apply for IPO without spending money

A file picture displaying IPO and mutual fund forms at Dalal Street. Our Bureau Mumbai, July 30 SEBI on Wednesday issued details on the modalities by which investors can apply for an IPO, while still keeping the application money in their bank account till finalisation of the allotment. For this purpose, SEBI has introduced a supplementary process for applying for public issues called as "Application Supported by Blocked Amount" (ASBA) process.ASBA process This application would authorise banks to block the application money in a bank account. The ASBA process shall be applicable to all book-built public issues, which provide for not more than one payment option to retail individual investors. The issuer will be treating these applications similar to non-ASBA applications while finalising the basis of the allotment, said SEBI. The ASBA process will be offered by "Self Certified Syndicate Banks" (SCSB). Banks that wish to offer this facility must submit a …

HIGH DEVIDEND YIELD STOCKS

With inflation ruling high at nearly 12 per cent, investments in debt instruments including bank deposits that offer about 10 per cent returns per annum have turned unattractive as the real rate of return works out to be negative. Considering the other adverse factors like high crude oil and commodity prices and the economic slowdown being experienced in India and globally, even equities do not look attractive.But, amid these gloomy times, there is a ray of hope in the form of high dividend yield stocks, which typically do relatively better during market downturns while offering reasonably good upsides when the investment environment turns favourable.Judicious selection of stocks though is very crucial. For instance, it is advisable to considerfactors like consistent track record (financial and dividend paying), company's strengths in its business and its market position, positive cash-flows, management quality, sound business model and ability to sustain growth rates.I…

Large orders engineer recovery in Sunil Hitech Engineers

Sunil Hitech Engineers surged 7.02% to Rs 202.85 at 12:56 IST on BSE after the company said it has bagged three different orders aggregating to Rs 649.22 crore from three different clients. The company made this announcement during trading hours today, 28 July 2008. Meanwhile, the BSE Sensex was up 73.93 points, or 0.52%, to 14,348.87. On BSE, 1.58 lakh were traded in the counter. The scrip had an average daily volume of 22,956 shares in the past one quarter. The stock hit a high of Rs 225 and a low of Rs 186 far during the day. The stock had a 52-week high of Rs 415 on 2 January 2008 and a 52-week low of Rs 156.25 on 2 July 2008. The small-cap company had underperformed the market over the past one month till 25 July 2008, declining 6.65% compared to the Sensex's decline of 1.02%. It had also underperformed the market in the past one quarter, declining 32.66% compared to Sensex's decline of 16.65%. The company has an equity capital of Rs 12.28 crore. Face value …

Winning the trust vote makes Govt richer by Rs 64,000 cr in M-cap

Aarati Krishnan BL Research Bureau The recent political tussle, which ended with the incumbent government winning the Trust vote on July 22, has left the Union Government richer by Rs 86,600 crore, at least on paper. With stock prices of listed PSUs rallying strongly over the past two weeks, the market value of the Government's equity stakes in these companies has shot up sharply. Stocks of State-owned companies have been propelled by expectations that, with the Trust vote out of the way, the Government may push through with its divestment programme and put a portion of its stakes in these companies on the block. The total Central Government holding in the listed PSUs, put together, is worth Rs 8.29 lakh crore at today's market prices, up from Rs 7.42 lakh crore on July 9. The bulk of these gains, Rs 63,900 crore to be precise, have come after the Government managed to win the Trust vote. National Aluminium (33 per cent gain), ITI (31 per cent) and HMT (29 per cent)…

PE ratio helps an investor pick stocks

investors hould aim at picking up stocks with a low price earning ratio (PE ratio). The term PE ratio is commonly used in investment decisions. Investors rely on this ratio to base their investment decisions in equities.
Simply stated, a P/E ratio is the ratio between the market price of the share and the earning per share. The ratio tells us how many times the market price of a share is vis-a-vis its earning. According to one view, lower the PE ratio, the better it is for the investors, as there are chances of appreciation, and vice versa. Moreover, the risk element also increases. According to others, it is the other way around. However, there are exceptions to these rules.
A PE ratio is a valuation ratio of a company's current share price as compared to its per share earnings. It is calculated as market value per share divided by earnings per share (EPS). For example, if a stock price is Rs 100 and it has an EPS of Rs 5, the PE ratio is Rs 100 divided by Rs 5, that is, …

Better times ahead?

Despite the benchmark Sensex tanking by close to 700 points in the last two trading sessions of the week, market participants are confident that the goodwill effect borne out of the UPA winning the trust vote will continue.
All eyes are, of course, on the revival of some of the government's stalled economic reforms. The most pertinent for the market being whether or not the government will raise the foreign investment limit for the insurance sector to 49%, open up the pension sector, increase voting rights of investors in private banks proportional to their shareholding and go ahead with the signing the nuke deal.

Stocks that are closely linked to sectors that will undergo policy changes are expected to benefit in the coming days.
"Being a long-pending issue, pension reforms will be on top of the government's agenda. Any step in this direction would immensely help banking firms offering insurance services. Similarly, increased voting rights will make banks …

which sector to invest now?

Investors with a long-term view can also look at accumulating stocks in sectors such as capital goods, construction, media and entertainment. In the case of construction, the investment would be 'contrarian', as the sector has been beaten down heavily in the last few months.

Aggressive investors can also look at banking and financial services as these could get a much-needed reform boost soon. But remember that these sectors are still not free from the problem of high interest rates. In the end, it's you who will have to decide whether you have the confidence in the potential of the stock markets.

IVRCL Infrastructures: Buy

Investors with a 2-3 year perspective can consider buying into the stock of IVRCL Infrastructures and Projects (IVRCL). The company has managed to sustain the pace of order flows in 2007-08 — a relatively tough year which saw a slowdown in the order flows for a number of infrastructure and engineering companies. Healthy growth in the order book combined with the company's strength in irrigation and water projects — a segment that has received significant attention in the Government's Budget and five-year plans — are likely to augur well for the company's earnings growth.Given the current turbulence in the markets, investors can consider accumulating the stock in tranches, on declines linked to the broad markets. At the current market price, the stock trades at 12.5 times the company's estimated (standalone) earnings for 2009-10. It trades at about 11 times its 2007-08 consolidated earnings. While the contribution from subsidiaries may be significant over the …