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In 2005, SEBI (Securities and Exchange Board of India) plugged loopholes in the preferential allotment rules by introducing a stringent three-year lock-in and regulating the price at which preferential equity/warrants could be offered. This ended promoters’ self-enriching game of giving...

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Sometime in the middle of October, when mutual funds, especially fixed maturity plans (FMPs), faced huge redemption pressures, the market was rife with rumours about the serious problems faced by several fund houses. Lotus Asset Management quickly exited the mutual fund business by selling out...

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Banking stocks were the best performers among A-graded stocks Winners Among the A-grade stocks in the momentum list, bank stocks were the best performers last fortnight. Bank of Baroda and Punjab National Bank were on top, rising 15% and 12%, respectively. Bank of Baroda (BoB) announced that...

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Remember ethanol, a form of alcohol that was supposed to be the answer to diminishing fossil fuels and make a lot of people rich, even as alarmists cried that it would create a food shortage? Well, there are cycles in everything. The ethanol dream has turned into a nightmare. Among the big...

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We have made three changes, downgrading one stock to B and adding two stocks to the A grade Gainers None of the stocks could make it to the A grade last fortnight. Of the B-graded stocks 39 were in the positive. In the previous fortnight, Bhagwati Banquets was at the bottom of the list having...

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One of the few people who made tonnes of money during the recent crash was a hedge fund manager called Kyle Bass, managing partner of Hayman Advisors. Way back in August 2006 he put together a fund that would bet on the housing market meltdown. Within six months, Bass was proved right. Home...

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Trimming of IT costs by US & European companies does not augur well for Indian IT companies Gainers Bank stocks are on top of the A-graded list. Union Bank of India has formed a joint venture with leading Belgian financial player KBC group to launch mutual fund business. The stock surged 25%....

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A few public information officers (PIOs) and the babudom are trying to brand the sunshine act, Right to Information (RTI), as a nuisance. The onus is on all RTI applicants to fight back. Many information officers dare to furnish false and misleading information or often put out information...

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Don’t panic, make up your own mind about your company's future Last week, a young manager came over for career advice. He works with a mid-size marketing company. Things were going fine till one of their investors pulled out. The firm remains operational, since they have other investors who...

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Emergency measures introduced during a crisis need to have an expiry date to avoid their misuse We are in the middle of a global financial crisis and Indian regulators and policy-makers must, indeed, initiate quick regulatory and policy changes to minimise systemic shocks that could hamper...

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The ferocious daily fight between bulls and bears will not be resolved soon In the last issue, we had said that over the next few weeks, the extreme short-term rally that we are witnessing would give way to a fresh decline. The decline may start on fresh bad news from global markets or purely...

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What is remarkable about Sun Pharma? Or for that matter, Hindustan Lever? Have you looked at Nestlé? What is the common thread that runs through these stocks? Well, between 22 January 2008 and 27 October 2008 – a period during which the Sensex halved from 15,332 to 7,697, these stocks bucked the...

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In the last issue, we had mentioned that some institutional value-buying, which was anticipated, would provide a little respite to the market’s free fall. On the week-ended 24 October 2008, the Sensex terminated its fall at 8,701. In earlier issues, we had mentioned several levels at which the...

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How opaque portfolios, misuse of mandate and misrepresentation, shortchanged investors of Fixed Maturity Plans and created a crisis. Sucheta Dalal explains   When the whirlwind of global financial turmoil hit the Indian shores in late September, it wasn’t Indian banks that were...

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Please refer to R Balakrishnan’s views on “Insurance vs Mutual Funds” in MoneyLIFE of 9 October 2008. It makes interesting reading. However, some facts need clarity. For instance, he says that “the commission can be as high as 40% of the first year’s premium.” Are you referring to this rate of...

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For the past two months, the global economy has been badly shaken up by the failure of some of the world’s largest banks and financial companies. The US and some European countries have officially acknowledged to be in a state of recession. The US government has allocated a huge US$800...

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Stick to what is safe, even if the returns are not very high Over the past nine months, the Sensex dived precipitously from a high of over 21,000 to nearly a third of its value when it sank to 7,700 (intra-day) on 27th October. Millions of retail investors have suffered heavy losses on equity...

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  The world economy is in turmoil and various countries are adopting different strategies to contain the damage. While some countries are ‘leading’ by coming up with innovative ideas, others are blindly ‘following’ in their footsteps. Our finance minister could consider this innovative idea – a...

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The market has been clobbered by massive waves of institutional selling. Over the previous few issues, we had mentioned 13,400, 12,500 and 9,800 as possible weekly support levels. None of these held. The totally unexpected precipitous slide to the current level of about 8,500 has taken us...

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That there are only two defaults on CRISIL’s long-term credit ratings (both manufacturing entities) in the first six months of 2008-09 probably paints too optimistic a picture. The finance minister admitted that forex derivative losses were a massive Rs27,300 crore but pose no systemic risk. But...

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