Showing posts from 2009

how much i should pay tax for buying shares

Making money from Indian stock market was never so simple. Even though markets are in the upswing we can find more and more people losing in stocks. A close study shows non understanding of financial markets as the major reason for this. Fundamental study helps you to identify potential winners which can be multi-baggers. Technical analysis helps to time the markets. But there is one more important factor that affects the profits of your investments that is Tax. In this article we have briefly explained different types of Taxes that influences your Returns. There are thousands of companies in India all of them require capital for functioning and they issue securities to get funds.
Securities Transaction Tax (STT) Securities Transaction Tax (STT) is a tax on the evalue of shares bought and sold on a stock exchange. The Tax has to be paid irrespective of your profit or loss; it is a turnover based tax. STT has been introduced in the in the year 2004-05. It is levied on the purchase or sa…

Some do's and don'ts about Cost Averaging

One of the most common problems that many investors face is whether to
sell or to resort to cost averaging when the price of a stock, or the
NAV of a mutual fund, drops just after a purchase is made.

A typical question I face goes something like this: "I bought a stock
at 80, and when it dropped to 40 I bought some more to bring my
average cost price down to 60. Now the stock has dropped below 30.
Should I sell to reduce further losses, or buy some more to bring the
average cost down further, or just hold on till I get back my average
cost price of 60?"

There are no easy answers to such a question. The answers will depend
on the type of stock, the investor's risk tolerance and holding
period. So, instead of providing answers, let me try to list out some
do's and don'ts that can better prepare investors to face a similar

Do's about Cost Averaging

1. Before you pick any stock or fund, do a due-diligence. Find out
as much as you can about the track record of the pr…

From C. Kutumba Rao - Nov 30, 2009

Rattled by Dubai's debt crisis, stock markets slumped on fears that although the major central banks have stabilised the financial system, some of the 'excesses' simply refuse to disappear and may disrupt the system again.Erasing most gains of three-week rally, the benchmark indices fell by more than two per cent during the week ended. On the BSE, the Sensex fell by 390 points to end at 16,632 and the Nifty on the NSE shed 110 points to close at 4,942. However, the bounce back from intra-day lows on Friday reflects the bullish undertone and resilience of the markets. Fears over tax on capital inflows and withdrawal of stimulus packages have been allayed by the finance minister, but the impact of rising food inflation is a cause of concern. Dubai's effort to reschedule its debt is a sign that government spending alone won't be enough to protect markets.Differentiation between riskier and less risky asset classes in which correlatio-ns have risen, making it…

By C. Kutumba Rao - November 16th, 2009

Propelled by robust industrial numbers and positive global cues markets extended their gains during the week ended.
On the Bombay Stock Exchange (BSE), the Sensex gained 690 points to end the week at 16,849 and the Nifty on the National Stock Exchange (NSE) scored double century to close barely below 5,000-mark at 4,999.
The government's assurance that there will be no withdrawal of stimulus packages till the global economy stabilises, fast track clearance of disinvestment of some public sector units and a renewed buying from institutional investors kept the market sentiment positive.
Keep an eye on the four important Bills to be tabled in the Parliament in the Winter Session. A quick passage will indicate the present United Progressive Alliance (UPA) government's resolve to implement reforms on the fast track.
Barring any unforeseen negative cues from global front or any "ruckus" in Parliament over the UPA government's aggressive reform agenda, markets are expect…

Honing stock-selection skills

To reap gains in the stock market over the long term, understand what type of investor you are and then make your investment moves accordingly.
Manish ShahInvesting in equities may seem like a simple business, but more often than not, it is more complex than one would imagine. The moot question is that with all of the hundreds of thousands of stocks available in the market for us to choose from, how does one know which stocks to invest in? Should one pick a stock because it is in an industry that interests him or her? Or should investors let their emotions drive their stock picks? Here, we look into the mind of a value investor to understand how one should go about investing in the equity markets in order to realise gains on a long-term basis.But before that, you may have to understand what type of investor category you fit in. Type I This class of investors does not have the time or the ability to make judgmental calls on the stocks/sectors. There are investors who have very…

Cox and Kings (India) — IPO: Invest

The company's strong brand image, wide geographical reach, synergies of operations and the economies of scale it enjoys are positives.

Mr A. B. M. Good, Chairman, and Mr Peter Kerkar, Executive Director. Srividhya SivakumarInvestments with a long-term perspective can be considered in the initial public offering of the global tour operator Cox and Kings (C&K). The company's strong brand image, wide geographical reach — both within the country and across major global markets — synergies of operations between its various subsidiaries and the economies of scale it thus enjoys are positives to the offer. Despite last year's declining trends in the global travel and tourism space, C&K managed to not just grow it revenues but also improve its operating margin and profits. C&K's strong domestic market position helped by improving discretionary spends by Indian consumers and its newly acquired presence in high potential markets of the US and Australia offe…

Retail investors set to get rich pickings of Central PSUs

Shares to be offered at a discount; NTPC, Satluj Jal and REC divestment this fiscal. Plans ahead Govt hopes to mop up Rs 8,000 crore from NTPC disinvestmentDisinvestment Dept initiates talks with Ministries to identify cos for divestment– Ramesh Sharma

Shedding stake: The Disinvestment Secretary, Mr Sunil Mitra, and the Joint Secretary, Ms Minakshi Ghose, at a press conference in the Capital on Friday. Our Bureau New Delhi, Nov. 13 The Government is likely to offer public sector shares at a discount to individual investors as part of its disinvestment programme. The next offering could be NTPC. The Government expects to garner at least Rs 8,000 crore through the sale of an additional 5 per cent of its stake in the power major. The mop up target is three times the Rs 2,700-crore that the Government got in 2004 for sale of a 5.24 per cent stake in NTPC. The other two PSUs identified for disinvestment this fiscal are Satluj Jal Vidyut Nigam Ltd and Rural Electrification C…

PVR firmly in the picture as promoter hikes stake

PVR galloped 7.79% to Rs 137 at 15:22 IST on BSE, after one of the promoter group companies hiked its stake in the firm. The company made this announcement after market hours on Monday, 9 November 2009. Meanwhile, the BSE Sensex was down 54.08 points, or 0.33%, to 16,444.64. On BSE, 1.40 lakh shares were traded in the counter as against an average daily volume of 1.03 lakh shares in the past one quarter. The stock hit a high of Rs 138.10 and a low of Rs 129.50 so far during the day. The stock had hit a 52-week high of Rs 157.70 on 25 September 2009 and a 52-week low of Rs 57.50 on 2 December 2008. The small-cap stock had underperformed the market over the past one month till 9 November 2009, falling 8.99% as compared to the Sensex's 0.86% fall. It had also underperformed the market in the past one quarter, rising 5.74% as compared to the Sensex's return of 8.83%. The company's equity capital is Rs 23.01 crore. Face value per share is Rs 10. The current pri…

By C. Kutumba Rao - November 9th, 2009

Recovering most of its losses during the early part of the week, markets ended a highly volatile week finishing higher for the week.On the Bombay Stock Exchange, the Sensex gained 262 points to end the week above 16,000-level at 16,158 and the Nifty on the National Stock Exchange (NSE) logged 85 points to close at 4,796.Statements from the Union finance ministry putting at rest speculation about the withdrawal of stimulus packages, positive news flow about the public sector units disinvestment policy and clarifications over the implementation of new direct tax code have helped markets "recover" quickly.A renewed buying support from both foreign and domestic institutional investors and positive global cues turned the sentiment positive for near term.Keep an eye on IIP (Index of Industrial Production) numbers (expected to be weak on underperformance of the infrastructure sector in September) and cues over global economies from G-20 conference in Scotland.For the week ahead, ch…

PSU stocks react positively to disinvestment plans

Timing, pricing of public issues would be vital: Analysts.
Our Bureau Mumbai, Nov. 6 Shares of PSUs with more than 90 per cent Government stake gained between 10 and 20 per cent in Friday after the Cabinet decided to raise public shareholdings in the companies to at least 10 per cent. The Cabinet Committee on Economic Affairs on Thursday approved a mandatory minimum 10 per cent public ownership in all listed and profit making PSUs. The committee also approved listing of all the unlisted but profitable PSUs."This is a very positive move as it will bring more accountability and more transparency to the Government companies," said Mr Gopal Agrawal, Head of Equity, Mirae Asset AMC.All the PSU stocks registered gains after the stock market opened on Friday, but the gains were the most in those listed PSU with less than 10 per cent public shareholding.The stock of MMTC (Rs 10 face value) gained 20 per cent to close at Rs 36,146.85 on the BSE. Public holding in MMTC is …

Directive on PSU listing opens disinvestment tap

Proceeds to directly fund social sector schemes till March 2012. Big push All listed, profit-making units to meet the mandatory minimum of 10 per cent public ownership. All unlisted profitable PSEs have to get listed.Eligible candidates include behemoths such as NMDC, MMTC, Neyveli Lignite Corporation, Rashtriya Chemicals and Fertilizers, National Fertilizers, Coal India, BSNL and Engineers IndiaOur Bureau New Delhi, Nov. 5 Giving its disinvestment programme a big push, the Centre has asked all listed, profitable central public sector enterprises (CPSEs) to meet the mandatory listing norm of at least 10 per cent public ownership. It has also asked all unlisted CPSEs with positive networth, no accumulated losses and a net profit track record in the three preceding consecutive years to get listed. Both these decisions are likely to lead to a slew of equity offerings including follow-on public offerings (FPOs). The eligible candidates include behemoths such as NMDC, MMTC,…

By Kutumba Rao - Nov 2, 2009

It's time to focus on earnings visibility November 2nd, 2009 By C. Kutumba Rao

Spooked by the hawkish stand of the Reserve Bank of India in its mid-year policy review, none too enthusiastic results, scepticism over the global recovery, markets fell like a set of bowling pins during the week ended. On the Bombay Stock Exchange, the Sensex tumbled by 915 points to end the week at a two-month low below 16,000-level at 15,896 and the Nifty on the National Stock Exchange crashed by 285 points to close at 4,712.The sell off was broad based with realty, banking, oil and gas and metals being the worst hit. The five per cent to 15 per cent correction that many people have been calling for since the summer is finally in place, say old timers. With the end of results season, it is time to pick the companies that have shown good performance and have good earnings visibility for next few quarters.It is pertinent to note that both domestic institutions and FIIs were buyers on Friday, the day whe…

mulling proposal for fewer trading holidays

MUMBAI: Market regulator SEBI is looking into a proposal by several investors to allow fewer trading holidays on stock exchanges in line with the global practice. "SEBI is actively considering the proposal to reduce the trading holidays at bourses and is likely to take a decision on the matter soon," an official close to the development said. According to analysts, this move by Securities and Exchange Board of Ind ia (SEBI) will increase the trading volume in domestic bourses and would also attract foreign investors. SMC Capitals Equity Head Jagannadham Thunuguntla said, "From the global standards, India has more number of trading holidays. The reducing of holidays would increase the participation of investors, including the foreign ones, and would increase the tradi ng volume," he said. For 2009, the Bombay Stock Exchange has 19 listed trading holidays and these exclude the weekly Saturday and Sunday off. In developed countries the trading holiday at…

Rural Electrification Corp: Buy

Fresh investments can be considered in the stock of Rural Electrification Corporation (REC), a navratna public sector undertaking, which finances all the segments across the power value chain. Secured advances with a high asset quality (net non-performing assets of almost zero) coupled with sustainable spreads are the key positives for REC when compared to most finance companies. Even after gaining more than 165 per cent this year, the company's stock is trading at a modest 12 times its estimated FY10 earnings (assuming 15 per cent equity expansion post-offer) and at 1.6 times its estimated book value. A power sector debt funding requirement of more than Rs 15 lakh crore over the Eleventh and Twelfth Plans is the major growth driver for REC. Its proposed follow-on public offer will augment the capital base, enabling balance sheet expansion. The Reserve Bank of India's recent policy change which pegs bank's risk weights to the borrowers credit rating, will also f…

Will it last?

Ram Prasad Sahu / Mumbai October 26, 2009, 18:25 ISTWhile there are visible signs of a recovery in the real estate market, price hikes by developers and any increase in interest rates could halt this momentum. The realty sector, which was the worst affected by the downturn last year, seems to be exhibiting early signs of a recovery. Price cuts on projects over the last six months and healthy pre-sales during the festive season seems to suggest that demand, which had all but disappeared in the third and fourth quarter of 2008-09, seems to be trickling back. Developers are tweaking their business model by launching smaller apartment sizes and playing the volume game to keep prices low and create buyer interest. What has helped matters, believes Ramnath S, director, Research, IDFC-SSKI, are factors such as job security and affordability, which are gradually improving, and a lot of companies likely to…

SEBI allows stock exchanges to go 9-5

Our Bureau Mumbai, Oct. 23 The Securities and Exchange Board of India (SEBI) on Friday allowed stock exchanges to extend trading time by almost two-and-a-half hours, permitting them to operate between 9 a.m. and 5 p.m.An NSE official said the extended trading would commence "very soon" on that exchange, although he would not commit to a specific date. The BSE too "welcomed" the move. "It has been decided to permit the stock exchanges to set their trading hours subject to the condition that the trading hours are between 9 a.m. and 5 p.m. and the exchange has in place risk management system and infrastructure," a SEBI circular said. SEBI had earlier said that this was considered to allow Indian players to take advantage of the global information flows.Currently the cash and equity derivatives market is open from 9:55 a.m. to 3:30 p.m. The currency derivatives market is open from 9:00 a.m. to 5:00 p.m., while the commodity derivatives market is ope…

NTPC posts Rs 2,151.95 cr profit in Q2

MUMBAI: State-run power producer NTPC on Friday reported a marginal rise of 1.96 per cent in its net profit to Rs 2,151.95 crore for the second quarter ended September 30.

The company had a net profit of Rs 2,110.51 crore during the September quarter last financial year (2008-09).

Net sales of the company rose to Rs 10,782.79 crore in the latest quarter of the current financial year from Rs 9,661.42 crore of the corresponding period a year earlier, NTPC said in a filing to the Bombay Stock Exchange (BSE).

Shares of NTPC were trading at Rs 213.95, up 0.47 per cent in afternoon trade on the BSE.

Sensex may reach 19,000 level by March 2010: JP Morgan

MUMBAI: The Bombay Stock Exchange's benchmark index Sensex may reach 18,000-19,000 points level by end-March 2010 led by improved investor confidence, a survey by J P Morgan Asset Management company said.

"Both investors and advisors expect (the) Sensex to reach 18,000-19,000 in March 2010. Ninety-three per cent of advisors and 68 per cent of retail investors expect the Sensex to rise from current levels," J P Morgan said in a report 'Investor Confidence Index'.

The BSE index today closed over 17,223 points. J P Morgan said these expectations hinged on prospects of a global economic recovery coupled with a sustained confidence in the Indian economy across the board.

According to the survey, the Investor Confidence Index stood at 146.4 in September 2009, up by 10.5 points from July 2009, the survey said.

The report said about 50 per cent of corporate investors considered GDP growth and the possibility of India exceeding the 7 per cent target for FY 1…