FII inflows in 2013 has crossed USD 7 billion

The investment by overseas investors into Indian stock market since the beginning of 2013 has crossed USD 7 billion mark, out of which more than USD 3 billion were pumped in the month of February alone.

Foreign Institutional Investors (FIIs) infused a net amount of USD 3.23 billion (about Rs 17,211 crore) during February, taking the total for 2013 so far to USD 7.29 billion (Rs 39,270 crore ) for Indian stocks.

Market analysts attributed strong FII inflows to signs of easing interest rates by the Reserve Bank and the subsequent impact of improved liquidity position.

Additionally, a slew of measures taken by the government, including the postponement of GAAR (General Anti Avoidance Rules) implementation by two years to April 1, 2016 and partial decontrol in diesel prices have also attracted foreign investors.

During February, FIIs were gross buyers of shares worth Rs 34,298 crore, while they sold equities amounting to Rs 17,087 crore, translating into a net investment of Rs 17,211 crore (USD 3.23 billion), as per data available with market regulator Sebi.

Foreign fund houses also infused Rs 1,249 crore (USD 234 million) in the debt market in February. This takes the overall net investments by FIIs into debt markets at Rs 4,196 crore (USD 785 million) so far this calendar year.

"FIIs have been betting high on Indian equities since last six-seven months and reform measures taken by the government has further boosted the sentiments," Wellindia Executive Director Hemant Mamtani said.

"Besides, FIIs have been infusing money into the Indian market on account of change in RBI's monetary policy that have added liquidity to the system. This liquidity will help in growth of the country," he added.

FIIs bought equities worth USD 24.4 billion in 2012, about USD 5 billion below record purchases two years ago.

The stock market barometer has gained 58 points so far this year to end at 19,484.77 points on Friday.

As on February 8, the number of registered FIIs in the country stood at 1,761 and total number of sub-accounts were 6,333.

Stock pick-Hexaware

Hexaware is showing a - RSI positive divergence and is highly oversold

  A risk-reward trade buy at 87-88.5, stop loss at 84 and target of 100-110.

Banking Amendment Bill

With the passing of the Banking Amendment Bill in the Rajya Sabha being a formality, we highlight once again that the most likely contenders for new bank licenses are L&T Finance, Cholamandalam, M&M Financial Services, Bajaj Finance, Sundaram Finance, and Shriram City Union Finance.

In a long-awaited move, the Lok Sabha (India’s Lower House of Parliament) passed the Banking (Amendment) Bill yesterday, often cited as a necessary prerequisite for the Reserve Bank of India (RBI) to issue new bank licences. The salient features of the Bill are as follows:
a) empowering the RBI to approve acquisition of shares and / or voting rights in excess of 5% in a bank  to persons who are deemed ‘fit and proper’;
b) concurrently empowering the RBI to supersede the Board of Directors of a bank in order to protect depositors’ interest;
c) facilitating consolidated supervision (of other companies within the same group as the bank) by the RBI;
d) aligning voting rights with ownership (subject to a ceiling of 26% in private sector banks and a ceiling of 10% in public sector banks); and
e) Liberalizing the available modes of raising equity capital in public sector banks (critical given the Basel-III timeline that begins January 2013).

The Banking Regulation (Amendment) Bill getting repeatedly stalled in the Parliament has often been cited as the stumbling block to the Reserve Bank of India (RBI) granting new bank licences. The RBI was keen to have two of these amendments in place before proceeding with the issue of new banking licences.

Whilst the Bill needs to be further passed in the Upper House of the Parliament (likely to be a formality), the process of issuing new banking licences is likely to take at least 12-18 months.
 
Given that the thinking behind allotting new banking licences is to bring financial inclusion to rural India and given that banking is still not lucrative in such regions, a new bank would need to make heavy investments without corresponding returns in its formative years. 

Hence, contenders with deep pockets and experience of financing rural India/weaker sections of society could get a preference over others when the RBI allots new bank licences. L&T Finance, Cholamandalam, M&M Financial Services, Bajaj Finance, Sundaram Finance, and Shriram City Union Finance appear to be front runners for a banking licence.

As we approach 20,000 sensex once again,here are some milestones the market crossed over the past 22 years


Sensex-1000, July 25, 1990 - On July 25, 1990, the SENSEX touched the four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

January 15, 1992 - On January 15, 1992, the SENSEX crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.

February 29, 1992 - On February 29, 1992, the SENSEX surged past the 3000 mark in the wake of the market-friendly Budget announced by Manmohan Singh.

March 30, 1992 - On March 30, 1992, the SENSEX crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and SENSEX witnessed unabated selling.

October 8, 1999, the SENSEX crossed the 5,000-mark.

February 11, 2000 - On February 11, 2000, the information technology boom helped the SENSEX to cross the 6,000-mark and hit and all time high of 6,006.

June 21, 2005 - On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the SENSEX crossed 7,000 points for the first time.

September 8, 2005 - On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index – the SENSEX - crossed the 8000 level following brisk buying by foreign and domestic funds in early trading.

December 9, 2005 - The SENSEX  crossed 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

February 7, 2006 - The SENSEX  touched 10,003 points during mid-session. The SENSEX finally closed above the 10,000-mark on February 7, 2006.

March 27, 2006 - The SENSEX crossed 11,000 and touched a peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the SENSEX first closed at over 11,000 points.

April 20, 2006 - The SENSEX  crossed 12,000 and touched a peak of 12,004 points during mid-session at the Bombay Stock Exchange for the first time.

October 30, 2006 - The SENSEX  crossed 13,000 for the first time. It touched a peak of 13,039.36 and finally closed at 13,024.26.

December 5, 2006 - The SENSEX  crossed 14,000.

July 6, 2007 - The SENSEX  crossed 15,000 mark.

September 19, 2007 - The SENSEX  crossed the 16,000 mark.

September 26, 2007 - The SENSEX  crossed the 17,000 mark for the first time.

October 9, 2007 - The SENSEX  crossed the 18,000 mark for the first time.

October 15, 2007 - The SENSEX  crossed the 19,000 mark for the first time.

October 29, 2007 - The SENSEX  crossed the 20,000 mark for the first time.

Jan  2008 - The SENSEX  touched all time peak of 21078 before closing at 20873.

November 5, 2010 - The SENSEX closes at 20,893.6 with highest peak in two years.

Choose the right plan while investing in mutual funds

From the Economic Times

Many mutual fund schemes are no longer available for retail investors, as fund houses have stopped offering these plans to comply with one scheme one plan policy announced by SEBI on September 1.

Earlier fund houses used to offer multiple plans with varying minimum investment amount to cater to the needs of various subclasses of investors. For example, retail plan was aimed at individual investors who can start with Rs 5000, whereas institutional plans were aimed at institutions and ultra high networth individuals, in which minimum investment could be Rs 1 crore.

It led to different expense ratio for each plan. Typically institutional plans offered lower expense ratio resulting in higher gains for investors, as the assets base typically would be larger than the retail plan. To ensure that the retail investors  do get to participate in the larger pool and benefit from lower expense ratio, SEBI made it mandatory for the fund houses to launch only one plan under each scheme.

In some cases the fund houses opted to continue with a retail plan, but in some cases the fund houses decided to opt for institutional plan. This was especially true about the fixed income schemes investing in short term paper, where most of the money is institutional money and not much retail participation. For example, Templeton India Ultra Short Term Bond Fund now has only super institutional plan.

There are instances where additional purchase requests in such plans lodged by investors are declined by the fund houses concerned. "Investors must confirm if the plan they are keen to invest into is open for fresh subscription and the minimum investment for that scheme," says Nikhil Kothari, director and chief financial planner, Etica Wealth Management.

Your distributor too can help you identify the plan that is open for investments. If you are transacting on your own, you can either call up the fund house or visit the websites of the AMC  and get this information. There are instances where investors do not get any transaction confirmation. In such cases, it is better to call up the customer care service and check your transaction status by quoting your name and PAN.

Though these plans are no more available, your existing investments in these plans won't suffer. You may continue to hold on to your investments. But you cannot buy more into them now.

Investment buys

Some good buys for  long term invesment

1.Hindalco
2.Sarda Energy
3.Avanthi Feeds
4.Navneet Publications

BSE remains world's top bourse, leaves NYSE, Nasdaq behind

Leading bourse BSE has extended its lead as the world's top exchange in terms of the number of listed companies, outpacing the major global peers like NYSE, Nasdaq and London Stock Exchange by almost 100 per cent.

The BSE had a total of 5,174 companies listed on its platform at the end of last month, outpacing its closed rival Canadian bourse TMX Group by more than 1,000 firms or over 20 per cent, as per the latest data available with the World Federation of Exchange (WFE).

The number of listed companies on BSE platform is almost double that of major bourses like UK's London Stock Exchange and American bourses like NYSE.

Another Indian bourse, National Stock Exchange (NSE) is ranked 10th with a total number of 1,660 listed companies.

The listed firms on BSE has increased from 5,115 in January to 5,174 in October, the WFE data showed. The number of companies listed on BSE rose by 11 companies in October alone.

BSE is followed by TMX Group, BME Spanish Exchanges, London SE Group, NASDAQ OMX, NYSE Euronext (US), Tokyo SE Group, Australian SE, Korea Exchange and NSE in the top ten.

While TMX has 3,964 listed companies, London Stock Exchange has 2,782 companies, NASDAQ OMX has 2,598 and NYSE Euronext (US) has 2,345.

WFE said the data is based on number of companies which have shares listed on an exchange at the end of October, split into domestic and foreign, excluding investment funds and unit trusts. A company with several classes of shares is counted just once, according to WFE.

As per the data, all the listed companies on the BSE are of domestic orgin -- which are firms that are incorporated in the same country as where the exchange is located.

In terms of number of listed foreign companies, London Stock Exchange is on the top position with 583 such entities, followed by NYSE Euronext (US) with 525 listed overseas firms.

India will receive $70 billion remittances in 2012

India will receive record $70 billion remittances in the year 2012, topping the list of developing countries which are expected to receive a total of $406 billion this year, the World Bank has said.

After India, China will stand second with $66 billion, followed by Mexico and the Philippines with $24 billion each, a latest report by the bank said yesterday.

In all, worldwide remittances—including those to high-income countries—will reach $534 billion in 2012, according to a newly updated World Bank brief on global migration and remittances.

Other large recipients are Nigeria ($21 billion), Egypt ($18 billion), $14 billion each for Pakistan and Bangladesh, followed by Vietnam ($9 billion) and Lebanon ($7 billion).

Officially recorded remittance flows to developing countries are estimated to grow by 6.5 per cent over $351 billion in 2011, with India again topping the chart with $58 billion, followed by China ($57 billion), Mexico ($24 billion) and the Philippines ($23 billion).

Worldwide remittances, including those to high-income countries, are projected to grow to $685 billion in 2015. According to the World Bank, remittances to developing countries are expected to rise eight per cent in 2013 and 10 per cent in 2014 to reach $534 billion in 2015.

In its report, the World Bank notes that the true size of remittance flows, including unrecorded flows through formal and informal channels, is believed to be significantly larger.

"Compared to private capital flows, remittance flows have shown remarkable resilience since the global financial crisis, registering only a modest fall in 2009, followed by a rapid recovery. The size of remittance flows to developing countries is now more than three times that of official development assistance," the World Bank said.

Among the developing country regions, South Asia and Middle East and North African (MENA) saw the strongest growth, driven primarily by strong economic activity in the Gulf Cooperation Council (GCC) countries.

For South Asia, remittances in 2012 are expected to total $109 billion, an increase of 12.5 per cent over 2011. East Asia and Pacific region, is estimated to attract $114 billion, an increase of 7.2 per cent over 2011; while MENA is expected to receive $47 billion, an increase of 8.4 per cent over the previous year.

Remittances to Egypt have surged since 2010, perhaps driven by increased support by migrants to their families in the face of political uncertainty or savings brought by returning migrants.

Remittances to Latin America and Caribbean (LAC) were supported by a recovering economy and moderately improving labour market in the US, but were moderated by a weak European economy.

As a percentage of GDP, the top recipients of remittances in 2011 were Tajikistan (47 per cent), Liberia (31 per cent), Kyrgyz Republic (29 per cent), Lesotho (27 per cent), Moldova (23 per cent), Nepal (22 per cent), and Samoa (21 per cent).

Remittances are expected to remain flat to Europe and Central Asia and Sub-Saharan Africa regions, mainly because of the economic contractions in high-income European countries. Remittance flows to Europe and Central Asia are estimated at a virtually unchanged $41 billion and $31 billion to Sub-Saharan Africa this year, although both regions are projected to make a robust recovery in remittance flows in 2013.

Diwali discounts on Paid Services

There are 2 services  that i currently offer

1.A  paid service.

• In this service i recommend 1-2 scripts a  week..
• This is purely for medium term investors with a 1-3 month perspective

The subscription charges are Rs 6000 for 6 months and Rs 10,000 for 12 months.                                      

     I am offering a Diwali discount of 20% 

2.A Premium service

• In this service i recommend 2 scripts a week and sometimes 1 script.
• I also recommend 5 good stocks once in 4 months with a sure return of 20% to 30% within  3-4 months on each stock.
• I will sometimes recommend positional calls with Buy-range and sell-range as well as time period.
• Stocks to accumulate with a  long term perspective (1 year or more) will also be recommended sometimes.
• The subscription charges are Rs 10000 for 6 months and Rs 15,000 for 12 months.

            I am offering  a  diwali discount of 10%


Those interested can email me at   gvelugoti@gmail.com.

Stocks for Diwali-2012

3 good stocks for investment.I expect a 30% return on each.

1.Ramco Industries
2.Indoco Remedies
3.JBF Industries