Saturday, January 07, 2006

Diversify in 2006 - Mutual Funds

Of all the tax saving options for people, Equity-Linked Savings Schemes(ELSS) are by far the most exciting of all the tax-saving schemes. The Year 2006 will the of year of innovations as finacial companies will keep comming out will newer and more innovative products, as the experts are still positive on the long term growth story. We have a plethora of category of funds in the market, expamle: ELSS,Diversified Funds, Mid cap funds, Commodity funds, Infrastructure Funds...etc.

ELSS are the best bets to start investing in funds. Only that the Lock in period is 3 years. I would suggest anyone to invest in equities at this stage through the mutual funds route using the SIP (Systematic Investment Plan) options which helps you to not to worry about timing the market.

If you can handle risk and have an decent risk appetitie, you can try Mid-cap Funds. These smaller, but well managed companies can grow to large caps.

But before investing is any funds it's important to track the funds performace for the last 5 years. This is imporatant to get a clear idea of the future prospects of the fund.

Whats Experts Recommend: (Funds)

1. For ELSS- HDFC Tax Saver.
2. Diversified Funds- Franklin Blue chip.
3. Midcaps Funds- Franklin - Prima Fund.
4. Balanced Funds- Prudential ICICI Balanced Fund.

Wednesday, January 04, 2006

Bank of Baroda-IPO

Issue Opens: 16 January, 2006
Issue Closes: 20 January, 2006
Issue Size : 71,000,000 (No. of Shares)

Lower Price Band : Rs.200
Upper Price Band : Rs.225

Application Multiple: 25and in multiples of 25.

Information URL :
Prospectus URL :

*The above price band is indicative

Bank of Baroda is one of the early birds to have tapped the equity market in December 1996 after returning the Govt. capital of Rs 381 crores. Today, out of the total equity capital of Rs 294 crores, one third is held by non-Govt. investors comprising employees, retail investors, banks and financial institutions, FIIs and OCBs, Mutual Funds and insurance companies.

Bank Of Baroda has now started working from 8am to 8pm to encouter the competition it faces from other private sector bank. Also it has setup a siginificant number if ATM's in the last few months.

Tuesday, January 03, 2006

The Million dollar question...

Will 2006 see the sensex scale greater heights or will crash devastatingly :)

Ever since Sensex crossed the level 8,000 level in September, the one question on every investor’s mind was when will the Sensex cross the 9000 level?

The bulls didn't keep investors,traders and of course speculators waiting for long, and it took just approx 50 trading sessions for the Sensex to scale peak 9,000 in intraday trading on November 29. Just days later another milestone was reached on December 9 when the benchmark index closed above the 9,000 level for the first time ever.

Since the beginning of the rally in May 2003, the Sensex has more than tripled buoyed by fantastic foreign fund flows, which have been backed by solid corporate performance. Earnings have grown over 25 per cent per annum over the past four years, but now expectations are that growth will slow down though long-term story still remains intact.

As bull runs progress, mid and small caps tend to outperform others. In several sectors the valuation gap between large and small companies has narrowed remarkably making a strong case for
investing in established companies with a proven track record than those, which are driven by hope and faith.

Many experts feel that that the Sensex will easily cross the 10000 Mark in 2006. But then all we can do is wait and watch as no one can predict what that markets will do. Also its important to keep a watch on stocks that are still undervalued, although this may be difficult at this time. Still stocks such as ranbaxy are good pick for long term investors. Its important too look at sectors and stocks individually.

Punters have always favoured midcap stocks over largecap. The reason being, while a small amount of money flowing into the former can send it soaring skywards, it's difficult to move large caps so fast. The other reason being, Big stocks are well-researched, so money is to be made in comparatively neglected mid-cap and small-cap scrips.

With the Stock markets showing no signs of slowing down, fears are growing that if the end comes, it could be fairly catastrophic for both investors and the economy. But that may not be the case. The biggest stock crash in history was when the Dow Jones fell by 22.5% in a day. This barely affected the US economy, which continued to tick along well. Even in a boom year for the market, bank credit and overseas borrowing remains more important as a source of funds for companies. Finally, investment in shares is just a shade over 1 per cent of household financial assets,investments.So consumer wealth will not be greatly affected either.

Happy New Year!