The deal regarding the bargains on what is known as the first day of the holiday shopping season
Here are the eight things to watch out for on the Black Friday, or the first day of the holiday shopping season…
Nifty has broken out after consolidating over the last two weeks and may be headed for 8,550.
In Friday’s closing report, we had mentioned that the Indian benchmark will have to push past 8,420 to rally higher. Up to 2pm in the afternoon Monday, the NSE’s CNX Nifty moved in a range of 8,349 and 8,380. After crossing Friday’s closing, it witnessed a strengthened up move. Nifty hit its new lifetime high and closed near to the day’s high.
S&P BSE Sensex opened at 28,019 and moved up to the level of 28,206 after hitting a low of 27,921. Nifty opened at 8,378 and hit a low 8,349 before reaching up to the high of 8,438. Both Sensex, Nifty closed Monday at their new life time high. Sensex closed at 28,178 (up 131 points or 0.47%), while Nifty closed at 8,431 (up 41 points or 0.49%).
NSE recorded a volume of 90.96 crore shares. India VIX rose 3.13% to close at 14.4100.
Prime Minister Narendra Modi, speaking at the G20 summit, called for close global coordination to address the challenges posed by tax avoidance. President Barack Obama announced a $3 billion US contribution to an international fund to help poor countries cope with the effects of climate change.
India’s merchandise exports in October contracted by 5.04% at $26.09 billion from $27.48 billion in the same month last year. Imports, on the other hand, rose by 3.62% reaching $39.45 billion compared to $38.07 billion in October last year. Trade deficit in October rose to $13.35 billion from $10.59 billion last year, according to the data released Monday. In September, it had widened to $14.25 billion. In October, gold imports soared by a whopping 280.39% reaching $4.17 billion as against $1.09 billion.
There are reports that the Reserve Bank of India (RBI) is in talks with the government on increasing curbs on gold imports.
JSW Energy (12.13%) was the top gainer in ‘A’ group on the BSE. It informed BSE that it has agreed to acquire from Jaiprakash Power Ventures Ltd and other shareholders, 100% stake in Himachal Baspa Power Company Ltd for Rs9,700 crore. The board of directors of Jaiprakash Power Ventures has approved the transfer of, the 300 MW Baspa II hydro-electric project and the 1091 MW Karcham Wangtoo hydro-electric project, both located in Himachal Pradesh into a separate company, i.e. the Himachal Baspa Power Co Ltd.
Coming back to stock markets, Rasoya Proteins (19.91%) was the top loser in ‘A’ group on the BSE. The stock hit its 52-week low today. The company posted a weak result on Friday.
State Bank of India (SBI) (up 5.44%) was the top gainer in Sensex 30 pack. The stock hit its 52-week high today. The bank was in news as it had signed a memorandum of understanding with Adani group to provide a loan of up to $1 billion for the development of Carmichael mine in Queensland, which it aims to build by the end of 2017.
ICICI Bank (1.27%) was the top loser in Sensex 30 stock. According to reports, the bank recently raised 600 million yuans from the Chinese debt market (Dim Sum bonds) or a little over $ 95 million, at a coupon of 4%.
US indices closed Friday flat. A report from the US Commerce Department on Friday showed that retail sales in October increased 0.3% after a 0.3% drop in September, as American consumers ate out and shopped for clothes, enjoying a windfall from cheaper gasoline. The US Federal Reserve reports the US industrial production data for October today.
Except for Jakarta Composite (0.09%), rest of the Asian indices, which were trading closed Monday in the negative. Nikkei 225 (2.96%) was the top loser.
Japan's GDP unexpectedly shrank in the third quarter. Japan's real GDP shrank 1.6% on an annualised basis in July-September third quarter as firms cut inventories and held back on capital investment. The figure marked the second quarter of contraction, after the economy shrank 7.3% in the April-June second quarter after the national sales tax ticked up to 8% from 5% on 1 April 2014.
European indices were trading lower while US Futures too were trading in the red.
Close-ended scheme are usually not worth it. What about SBI Equity Opportunities Fund?
SBI Mutual Fund has launched SBI Equity Opportunities Fund, a three-year close-ended scheme. The new fund offer for the second series of this scheme will close on 1 December 2014. SBI Equity Opportunities will invest in a diversified portfolio of stocks across all market-cap and sectors. There is nothing unique about the investment strategy or the portfolio allocation. The scheme will invest 80% or more in equity and the rest in debt and money market instruments. From the beginning of 2014, as many as 27 equity diversified close-ended schemes were launched (including the different ones in a series). A few are in the pipeline.
Fund houses prefer to launch close-ended schemes as the assets are locked-in for the tenure of the scheme. However, for the investor, such schemes turn out to be illiquid. Even tough close-ended schemes are listed on the exchange; there is hardly a market of buyers and sellers for such schemes.
Moneylife has mentioned several times in the past, the performance of close-ended schemes depends on the market conditions at the time of investing and at the time of maturity. If you invest in a period where the markets command a high valuation, chances are that the market may head lower and if the market conditions do not improve, you may end up with a fairly low return or even a loss at maturity. Being close-ended, you will not be able to invest systematically. Hence, the cost of your investment will be fixed, which is at the time of subscription.
In a recent article published in Moneylife Magazine (Avoid Close-ended Schemes-http://www.moneylife.in/article/39084.html), we pointed out that close-ended schemes not only have no track record but turn out to be more expensive than schemes which are in existence for a few years or more and have gathered a larger asset base. Expenses are calculated based on the corpus of a scheme. For example, a scheme with a corpus of Rs1,000 crore will be able to charge a maximum annual fee (expense ratio) of 2.55% per annum, on the other hand, a scheme with a corpus of Rs100 crore or less (average corpus size of a close-ended scheme) is allowed to charge a maximum expense ratio of up to 3% p.a.
Hence, close-ended schemes turn out to be a risky choice. So is SBI Equity Opportunity Fund.