Friday, November 25, 2005


ICICI Bank's public issue of equity shares of Bank in India will open on the 1st of December 2005. The issue will close on December 06, 2005. The size of the issue is Rs 5000 crore. In addition, under the green shoe option, the Bank has the option to allocate additional equity shares up to Rs 750 crore with J M Morgan Stanley Pvt Ltd as the stabilising agent. The issue and the green shoe option aggregate to Rs 5750 crore.

The public issue is part of the Bank's consolidated capital raising exercise of Rs 7000 crore with a green shoe option of Rs 1050 crore. Of this total amount, Rs 2300 crore (including a green shoe option of Rs 3000 million) is proposed to be raised through an issue of American Depositary Shares (ADS) including a "Public Offering Without Listing" (POWL) component in Japan.

The issue will be made through the book-building route. Up to 5 per cent of the issue, or Rs 250 crore, is reserved for existing retail shareholders of the Bank. Retail bidders, including existing retail shareholders, will be allotted shares at a price 5 per cent lower than the issue price determined through the book-building process. Retail bidders also have the option to pay Rs 150 per share on application with the balance payable on allotment.

Sensex - Stock Market Myths

1. You can tell if a Stock(Share) is cheap or expensive by the Price to Earnings Ratio.

False: P/E ratios are vesy easy to calculate, that is why they are listed in newspapers,websites etc. But you cannot compare P/E ratios of companies from different industries, as the forces acting on those companies and industries have are different. Even comparing within an industry, PE ratios do not tell you about various other financial fundamentals and nothing about a stock’s value.

2. To make Money in the Stock Market, you must take High Risks.

False: Tips to Lower your Risk:
· Do not put more than 10% of your money into any one stock.
· Do not own more than 2-3 stocks in any industry.
· Buy your stocks over time, not all at once.
· Buy stocks with consistent and predictable earnings growth by looking at the balace sheet.Also you need to compare the balance of the last five years to be safe.
· Buy stocks with growth rates greater than the total of inflation and interest rates.

3. Buy Stocks on the Way Down and Sell on the Way Up.

False: People believe that a falling stock is cheap and a rising stock is too expensive. But on the way down, you have no idea how much further it may fall. If a stock is rising, especially if it has broken previous highs, there are no unhappy owners who want to dump it. If the stock is fairly valued, it should continue to rise.

4. You can Hedge Inflation with Stocks.

False: When interest rates rise, people start to pull money out of the market and into bonds, so that pushes prices down. Plus the cost of business goes up, so corporate earnings go down, along with the stock prices.

5. Young People can afford to take High Risk's.

False: The only thing true about this is that young people have time on their side if they lose all their money. But young people have little disposable income to risk losing money. If they follow the tips above, they can make money over many years. Young people have the time to be patient.

BSE-Sensex hits all time high

The benchmark index, the Sensex, has hit a new all time high of 8,829 levels.

A new all-time high was expected. There is still some head-room left and the Sensex can touch 9,000 levels where profit booking should come in.

Leading the charge on the Sensex is BHEL at Rs 1,384. The stock has gained 3.4 per cent followed by HLL, which has firmed up by 2.4 per cent.

The CNX mid-cap index at 3,798 levels has gained 33 points or 0.9 per cent. Ispat Industries at Rs 11 levels is the biggest gainer and has firmed up by 5.8 per cent.

Thursday, November 24, 2005

ABG Shipyard Limited To Extend Closing Date Of IPO!

IL&FS Investsmart, manager to the ABG Shipyard issue, has informed the Bomany Stock Exchange that the book building issue of ABG Shipyard, which was to close on November 24, 2005, will now close on November 26, 2005.

Lower Price Band: Rs.155
Upper Price Band: Rs.185

Applications have to be made in mutiples of 35 shares.


How to Invest and not to worry at the same time!

Well, you say you’re ready to being investing, on your own. No stockbrokers, no financial advisers, just you and the Capital market.Wait, are you seriously considering this proposition?

Kindly allow me to give you a bit of advice: "Don’t do it". I say this eith some experience, having lost my fair share in the “open market” as a do-it-yourself investor. The odds of success in this kind of investing is comparable to the odds of wining a lottery.Unless you are willing to take the time to investigate,study, learn and then invest. Successful investing is not a privilege of the stock broker and the financial analyst, alone. It is an area open to voluntary participation from all walk's of life. The catch here is that you must know what you are doing, or you will lose.It is important to be financially literate.

Take the time to understand all the components of the investing arena, before you risk losing all your dough. What you have spent a lifetime saving can be gone in as little as ten minutes. Now, that should be a scary thought for any sane and rational investor.

If you still intend to invest alone, here are a few tips and guidelines to help ensure your success. If you are going to invest, at least hire some form of investment professional to give you advice. It’s not necessary to let them do the investing, but use common sense, here. They know things you do not, and have not had time to learn.

Another piece of advice: If it sounds too good to be true, it is. Hands down, dream investments do not exist. If you know someone who acted on a friend’s great tip, you can bet that someone worked hard for that information, and it probably isn’t going to produce the mega return promised.

You must be patient when investing. Investing is like saving, it takes time to accumulate real returns. Don’t panic, take the time to step back and look objectively at your investment and the market indicators. Panic will cost you money. Hand in hand with the patience, there must be some read education about the investing process on your part. If you’re going to invest, take the time to learn the process, learn how to read a prospectus, how to calculate and distinguish a healthy business from one that is about to fold. Your knowledge will be your ticket to successful investing with a show of real returns.

It can be done, it is done everyday, by people just like you and I. You just need to understand the enormity of the commitment necessary to become a successful investor.

Incase you still decide invest on your own, I suggest you to become financially literate and learn what are the various finanacila ratio's and use the same befrom making an investment decision.

Also you need to check the track records of the company you wish to Invest in.

All the best!!

Tuesday, November 22, 2005

Buy and Hold!

Does It Always Work?

Well,It sure does.Buy and Hold certainly does not mean buying any stock at any time, holding it for an indefinite period and hoping this makes for great investment strategy. Buy and hold is applicable only when a bull market is on. What it essentially means is that you refrain yourself from selling all your good stocks while the markets continue to move north even when you are getting a more than expected return on your investment. The key is to fight off the urge to book profits early and ride the wave right through..

The goal is to make the most of the move and not let yourself settle for crumbs. What you have to do, is not sell while the upward trend continues in the market.Just sit back and enjoy the ride, and just wait for the right moment to get off.

So buy and hold can be hugely rewarding, only if you remember it is not really buy and hold it is more like buy, hold and sell when the time is right.

Sensex - Everest Kanto Cylinder Ltd. IPO

Issue Date:
Opens: 22 November 2005
Closes: 25 November 2005

Everest Kanto, which supplies companies like BOC Ltd., also has a unit in Dubai and is setting up a joint venture in China. Also Everest Kanto has 80% market shares of gas cylinders in India.That is an near monopolistic business.

The company intends to set up a plant to manufacture 340,000 high pressure cylinders a year in the western state of Gujarat, at a cost of 1.05 billion rupees.

EKC today supplies the widest range of cylinders for industrial gases. medical gases, fire fighting equipments, beverage industry, accumulator shells, aerospace, scientific research, CNG-NGV cylinders for vehicles and many more applications. Along with its cylinders EKC also offers its customers with range of neck threads, painted finish and mounted accessories. EKC also supplies storage cylinders cascades complete with fittings and accessories.

Price Bands:
Lower Price Band: Rs.140
Upper Price Band: Rs.160

Applications have to be made in minimum 40 shares and in multiples of 40 shares.

Company website:

Monday, November 21, 2005

Sensex - Value Investing

What is Value Investing?

The strategy of selecting stocks that trade for less than their intrinsic value. Value investors actively seek stocks of companies with sound financial statements that they believe the market has undervalued.
Very simply, value investing means attempting to buy a stock (or other financial asset) for less than it's worth.Value investors believe the market always overreacts to good and bad news, causing stock price movements that do not correspond with their long-term fundamentals. The result is an opportunity for value investors to profit by taking a position on an inflated/deflated price and getting out when the price is later corrected by the market. Typically, these investors select stocks with lower-than-average price-to-book or price-to-earning ratios and/or high dividend yields.

Historically, this has meant the purchase of shares in companies which have low price earnings ratios (P/Es), a high level of asset backing, or high dividend yields, or a mixture of all three. As such it is contrasted with growth investing, where the investor focuses only on the potential for future earnings growth and is prepared to pay much high P/E multiple.

So value investing lies in comparing two figures:

1)Current Market Value:

Multiply the number of ordinary shares in issue by the current price of each share to produce the market capitalisation. You can look up the market capitalisation of a quoted company in the financial pages of most newspapers, and on many financial websites.

2)Intrinsic Value of the Company:

There is no single way of establishing what the value of a company should be. Instead, value investors use a number of different valuation techniques, based on asset values, dividends, earnings, cash flows and other financial criteria.

Value investors don't try to predict which way interest rates are heading or the direction of the market or of the economy, but only look at a stock's current valuation ratios and compare them to their historical range. For example, say a particular stock's P/E ratio has ranged between a low of 15 and a high of 50 over the past five years, value investors would consider buying the stock if it's current P/E is around 20 or less. Once purchased, they would hold the stock until it's P/E rose to the 40-50 range before considering selling. The only reason they'd sell the stock sooner is if the company's long-term fundamental outlook significantly worsened.?

Sensex- Trading Rules

1 Plan your trades. Trade your plan.
2 Keep records of your trading results.
3 Keep a positive attitude, no matter how much you lose.
4 Don't take the market home.
5 Forget your College degree and trust your instincts.
6 Successful traders buy into bad news and sell into good news.
7 Successful traders are not afraid to buy high and sell low.
8 Continually strive for patience, perseverance, determination, and rational action.
9 Limit your losses - use stop loss!
10 Never cancel a stop loss order after you have placed it!
11 Place the stop at the time you make your trade.
12 Never get into the market because you are anxious because of waiting.
13 Avoid getting in or out of the market too often.
14 The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.
15 Always discipline yourself by following a pre-determined set of rules.
16 Remember that a bear market will give back in one month what a bull market has taken three months to build.
17 Don't ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.
18 Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.
19 Split your profits right down the middle and never risk more than 50% of them again in the market.
20 The key to successful trading is knowing yourself and your stress point.
21 The difference between winners and losers isn't so much native ability as it is discipline exercised in avoiding mistakes.
22 Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.
23 Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.
24 Accept failure as a step towards victory.
25 Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker!

Sunday, November 20, 2005

Race to 9,000

Year-end buying to cash in on Jan FII inflows causes Sensex spur.

December is just round the corner and it is almost time for the ‘warehousing effect’ to be witnessed on the equity bourses. Every year, during November and December — both operators and investors — increase their activity to ‘warehouse’ stocks in order to make a profit in January when foreign institutional investors (FIIs) come with fresh allocations. This, in turn, acts as a trigger, pushing the benchmark indices further northwards.
Interestingly, in the last six years since 1999, the bourses have always gained ground in the one-month period between November 15 and December 15. Take the case of 2003. The benchmark 30-share Sensex of the Bombay Stock Exchange (BSE) gained nearly 11% — or 525 points — between November 15 and December 15.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) gained 11.19% or 173.50 points in the same period. Market experts say that FIIs coming with fresh allocations in January is an annual feature and so investors buy and ’warehouse’ stocks in Nov-Dec so that they can sell in January at a premium.

SP Tulsian, investment consultant, said, “The markets may not see much activity from FIIs in the latter half of December. However, with the holiday season over, foreign investors will come to the Indian market with fresh allocations in January and that is the time when local investors would sell their holdings at a premium.”

This buying activity might also push the Sensex to higher levels, added Mr Tulsian. Historically, since 2000, the Sensex has always gained more than 5% in this one-month period.

In 2001 and 2002, the Sensex gained an impressive 5.45% and 9.71%, while Nifty gained 5.04% and 8.90% respectively. Vinit Birla, analyst, Pranav Securities, corroborates this and says that FII activity might slow down in the latter half of December only to resume in January.