The real test for the market will be after Thursday
The Sensex opened at 18,950, up seven points from its previous close and the Nifty resumed trade this morning unchanged at 5,687. The benchmarks touched the day's lows soon after the opening bell, but resumed their upward move on sustained institutional buying and easing crude prices, for the fourth day in a row. At the day's low, the Sensex fell to 18,945 and the Nifty was at 5,681.
We expect the uptrend to be halting from the current level, but the market has "turned buy on dips" as long as 17,800 on the Sensex and 5,350 on the Nifty are not breached. The real test of the market will be after Thursday, 31st March, when not only will the derivatives of the March series be settled, but the financial year will come to an end. There is an incentive to keep the prices up until then.
A sudden spike in the shares of DB Realty to Rs100.05 a piece, a gain of nearly 20% from its previous close of Rs83.40, propped up the realty sector in morning trade. The scrip had touched an all-time low of Rs81.40 yesterday, on news of the resignation of the company's director Sundaram Rajagopal. Mr Rajagopal is the fourth executive to leave the company amid the ongoing investigation into the company's involvement in the 2G spectrum allocation scam.
Two directors of the company, Asif Balwa and Rajiv Agarwal, were arrested by the Central Bureau of Investigation (CBI) today. Asif is the brother of Shahid Usman Balwa, the former managing director of DB Realty who is already in CBI custody. DB Realty closed the day up 19.66% at Rs99.80.
The market continued its northward journey on all-round buying support, extending the rally into the sixth day. The indices touched their day's highs in late trades with the Sensex at 19,226 and the Nifty at 5,770. However, the indices witnessed a marginal retracement from those levels to close in the green for the sixth consecutive day. The Sensex closed at 19,121, a gain of 178 points, and the Nifty settled 49 points higher at 5,736. The advance-decline ratio on the National Stock Exchange was negative at 752:1038.
The Sensex has added 1,282 points in this financial year-end rally that began on 22nd March and the Nifty has put on 372 points in the period.
Since July 1990, the Nifty has rallied for six consecutive days on 150 occasions (including the current rally). Of the previous 149 instances, the market has ended in the positive 78 times on the next seventh trading day, while it has been in the negative for 71 times on the next seventh day.
While the Sensex continued to make fresh highs, the broader indices settled in the red with the BSE Mid-cap index shedding 0.02% and the BSE Small-cap index declining 0.44%.
All sectoral gauges ended in positive territory with the BSE Auto index (up 1.70%) as the top gainer. BSE TECk (up 1.28%), BSE Metal (up 1.10%), BSE Consumer Durables and BSE IT (up 1.07%) followed the leader.
Reliance Communication (up 4.13%), Maruti Suzuki (up 3.61%), DLF (up 3.26%), Bharti Airtel (up 2.88%) and Tata Power (up 2.37%) were the toppers in the Sensex list. BHEL (down 1.48%) and ICICI Bank (down 0.03%) were the only two losers on the index.
Foreign direct investment (FDI) in India registered its second consecutive decline in February 2011, dipping by 30% year-on-year to $1.2 billion in the backdrop of the uncertain economic recovery in Europe. In February 2010, India attracted foreign direct investment (FDI) worth $1.7 billion. During the 11-month period from April 2010 to February 2011, FDI inflows into India declined by 25% to $18.3 billion.
Asian markets closed on a mixed note as global investment firm Goldman Sachs cut its forecast for Japan's economic growth. Profit booking in the Chinese market dragged the index lower. On the other hand, refiners and automakers aided the rise in the Korean market.
The Shanghai Composite was down 0.86%, the Hang Seng shed 0.03%, the Jakarta Composite declined 0.31%, the Nikkei 225 fell 0.21% and the Straits Times was almost unchanged, down 0.01%. On the other hand, the KLSE Composite gained 0.39%, the Seoul Composite surged 0.77% and the Taiwan Weighted advanced 0.51%.
Back home, foreign institutional investors were net buyers of equities worth Rs890.02 crore on Monday while domestic institutional investors were net sellers of stocks worth Rs286.52 crore.
Aban Offshore (up 0.15%), engaged in offshore drilling services, on Tuesday said its subsidiary Sinvest AS will sell its entire 50% stake in Venture Drilling AS to Norway's Petrolia ASA for $34 million (about Rs152 crore). After completion of the transaction, Sinvest's shareholding in Venture Drilling AS will become nil.
McNally Bharat Engineering Company (down 1.05%) has received an order from Neyveli Lignite Corporation for supply and maintenance of design, manufacture, fabrication, supply and assembly/erection, movement to mines, commissioning, testing and handing over of all mechanical, structural and electrical components of a 700 litre bucket wheel excavator for a total value of Rs115.56 crore. The scheduled time for completion of the order is 30 months.
Kajaria Ceramics (up 3.72%) has successfully completed the expansion programme of polished/glazed vitrified tiles at the existing location at Gailpur in Rajasthan with an annual capacity of 6 million square metres. Recently, the company completed the conversion of a part of its ceramic tile production facility into a vitrified line at Sikandrabad, in Uttar Pradesh.
NSDL says smart investors choose the demat route for mutual fund. But the really smart investors would not want to waste their money, or get into unnecessary hassles which the demat system involves
Two years after the regulator pushed mutual fund investors down the stockbroker-demat route, the strategy is beset with high charges and low customer interest. Undaunted, the National Securities Depository Ltd (NSDL) is still pushing it hard.
An advertisement blitz just released reads: "Be a smart investor. Hold your mutual fund units in demat." Investors are indeed smart. Demat is a costly affair and many smart long-term investors actually do not demat even their old shares. Since holding mutual funds in demat form is not compulsory, unlike shares, investors exercise the smart choice, avoiding NSDL's pitch to go the demat route.
A demat account for mutual funds is similar to that for shares. Now, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are offering a platform to buy and sell mutual funds. You can subscribe to mutual fund units through your stock broker using the stock exchange platform. On subscription, the asset management company (AMC) or registrar and transfer agent (RTA) will credit the mutual fund units to your demat account. For existing mutual fund holdings, you have to obtain a conversion request from your depository participant (DP) and after appropriate verification, the AMC or RTA will credit the mutual fund units to your demat account.
Demat does have its advantages. It helps consolidate all of one's holdings and allows a view of investments in a single snapshot, rather than having to go through several statements issued by different mutual funds. Earlier, if one had 20 schemes in 15 different fund houses, there would be as many statements. You one can get a simple statement for all holdings with all the AMCs. Also, holding mutual fund units in the demat format enables one to manage a portfolio better. One can monitor all the schemes at one go. Buying and selling in dematerialised units is supposed to be faster and simpler.
But if one does not trade in fund units, is it really worth the cost? There are several layers of costs associated with holding mutual fund units in demat form: the depositories and brokers are both out to claw some money from you. One would have to pay a charge to open the demat account, as well as the annual demat fees. Sales of units would also involve a charge of Rs20 on each occasion. This charge varies from DP to DP. And if the DP is not the bank that is directly linked to the AMC, it could take around 7-10 days for the money to be credited to your account. Sometimes, there's confusion regarding the differences in the name, or the initials in the name in which the demat account is opened and the one in the bank records. If the demat account has the name Anjali R Shah and the bank account has the name Anjali Shah, getting the amount credited could take months together. Banks have a habit of putting these kinds of small disputed amounts mindlessly in a suspense account and making you run around for it. At that time, you will not look smart and NSDL will surely not be anywhere to help.
The demat route has brokerage costs as well. The broker charges his normal commission at the time of purchasing or selling MF units (generally 0.30-0.40% of the value of units bought or sold). Again, the brokerage is negotiable and depends upon the broking firm one chooses. An investor using an online brokerage portal will be charged by the online trading company. Most importantly, while dealing through stock brokers, you cannot do SIPs/STPs, which are very popular with mutual fund investors. In fact, when we called a broking company about opening a demat account to buy mutual funds, we were dissuaded to do so because of the unnecessary costs involved.
So, while NSDL claims that it is smart to use the demat route for mutual funds, the problems on the ground and the cost of taking this route for no added benefit will continue to keep investors away. Keep your financial life simple–avoid mutual fund demat as long as it is not compulsory.
While the rest of the cold drink brands are stuck with babes, stunts and lifestyles, Pepsico has sprung a new interesting concept that is a relevant and highly campaignable idea
Must say for this hot, hot, searing summer, PepsiCo, the makers of 7UP, have come up with a cool, cool idea. So while the rest of the cold drink brands are still into babes, stunts, lifestyle, etc, 7UP has sprung up with a new and very interesting concept: Anger management. Ergo, the cold drink will now help you keep your head cool, and avoid potential conflicts caused by heat and rage.
'Gussa Hatao, Chill Machao' is the message, and I really think they are on to a good thing out here. Because the country is angry, there is a lot of pent up frustration among the junta. There is rage against bad governance, inflation, corruption, traffic, pathetic living conditions… the list is endless. All, of course, compounded during summer. And indulging in road fury has become a national pastime. In this heated scenario, a cold drink becomes a natural corollary. Yup, it's a powerful idea, and in the Indian context, one wonders why no one thought of it before.
The commercial I watched (and I assume there shall be more) features 7UP's brand ambassador, actor Sharman Joshi. A parked bike rider has mud splashed all over him by a speeding truck. Enraged, he gives the trucker a hot pursuit to teach him a hard lesson on road etiquette. Sharman, meanwhile, is seated at the back of the open truck. And he playfully engages the heated bike rider in a conversation. With questions like whether he is a black belt holder, a regular gymmer, a medical insurance holder or a police officer's son. When the biker responds to all in the negative, Sharman advises him not to risk a confrontation with the macho trucker, and instead gulp his anger down with a cool 7UP.
Well, a decent commercial. Reasonably funny, and Sharman, true to his screen image of a cool dude, is cast correctly. But 7UP needs to milk this solid idea with zanier commercials. And produce many of them, so that the brand quickly becomes the custodian of anger management in India. A relevant, long-term, highly campaignable idea, this one. And rage isn't gonna go away from India in a hurry… rather, it will only rise!
Moral of the story: A good idea is everything; once that's in place, all else follows smoothly. A lesson for the rest of the cold drink makers stuck with mega movie stars, heavy duty sportsmen and beautiful faces, and some really silly scripts and executions.