Foreign Institutional Investors, who deserted the Indian bourses last year, leaving them to face the heat of the global economic crisis are likely to make a come back in the second half of this year.

FIIs, which pulled out over 13 billion dollar from the Indian stock markets in 2008, following severe credit crunch in the US and Europe are likely to again gain momentum in the later part of this year.

According to a latest India strategy report by BNP Paribas, currency appreciation could be a significant driver of FII inflows.
“Our outlook on Rupee appreciation implies that FII inflows into Indian equities could restart in H2CY09. Concerns on capital outflows still exist (due to deleveraging in developed markets), but our empirical analysis shows currency appreciation is a significant driver of FII inflows,” BNP Paribas analyst Manishi Raychaudhuri said in the report.

The report stated that even as there is an ongoing debate about whether currency appreciation causes FII inflows or vice-versa.

Meanwhile, not giving any prediction about the time period by when the FII flows into the country may be revived, Coxe Advisors LLC Global Capital Markets Strategist and CEO Donald Coxe told PTI that with return of confidence in the market the inflows would pick up.

“By some estimates, USD 650 billion in dollar-denominated bank loans to Emerging Market private sector banks need to be refinanced or rolled over in 2009, and that is a steep overhang.

If the refinancing moves smoothly for even a few months, there will be a huge return of confidence and FII will respond favourably,” Coxe said.

The BNP Paribas report revealed that the Indian experience shows currency appreciation to be the causal variable and when the Rupee had started appreciating from mid-2002, FII flows had began accelerating a year later from mid-2003.

Further, brokerage firm Reliance Money said in its market strategy report that going forward, higher capital flows coming back led by strong FII buying and more than expected appreciation in the Indian Rupee would be the positive drivers for the market.

“Markets are likely to continue to be governed by the momentum driven by the global news flows, which is predominantly negative with potential earnings downgrades expected in the near medium term,” the Reliance Money report said.

In January so far, FIIs sold as much as Rs 3,961.80 crore (nearly one billion dollar. However, they have been buying in debt segment to the tune of Rs 1,045 crore in the month.

FIIs had been net sellers in Indian equities to the extent of USD 13.3 billion in calender year 2008, the first time since 1999. And this outflow was on the back of a record inflow of USD 17.4 billion in 2007.

According to another domestic brokerage Motilal Oswal’s report, following the significant outflows by FIIs, their holdings in BSE 500 companies came down to 16.7 per cent in September 2008 from 19.4 per cent in 2005. – ET

Nothing much fascinating this year for the Indian Stock Markets. In the third week of the year market saw a night mare. Except that we saw many stocks reaching their lifetime high in Jan first and second week. Third week onwards investors started loosing their money as there we two consecutive lower circuits on 21 and 22 on Indian Markets.

Since the peek of some 21K markets fell at 7800 odd and now are at 9K levels. It lost its shine as it looses 60% in not even a year.

Dalal Street turned into Halal Street.

I doubt if any one booked their full profits.

This year we saw both the phases of the stock markets – Bull Market (for 15 days odd) and rest of the year bear phase.

Just don’t forget – “Every thing which has gone up has to come down again”

There are many more things, but these are the once which I think are of immense importance.

Sectors which Outperformed.

I can say none of them all are in red.

The worst hit sectors.

Reality / Infrastructure.

Metals.

Auto.

Airline.

Stocks which declared good dividend.

Disa India declared 2000% dividend on a face value of Rs. 10

Colgate Palmolive declared 900% on a face value of Re. 1

Best Performing Mutual Funds of the year – Download File

People staying in Mumbai if you want to invest in Mutual Funds pls do contact here.

Happy New Year 2009.

Happy Investing!

Subscribe for free Email Updates – Click here.

Free SMS Updates subscribe – Click here.

]]> http://www.moneygain.in/2008/12/31/best-and-worst-of-2008-for-the-indian-stock-markets/feed/ 0 http://www.moneygain.in/2008/12/27/will-markets-rally-till-new-year/ http://www.moneygain.in/2008/12/27/will-markets-rally-till-new-year/#comments Sat, 27 Dec 2008 14:11:00 +0000 Chirag http://www.indianmoneyplus.com/?p=377

We never needed it more: a Santa Claus rally. The big question is whether it will happen in 2008? Much like the Wall Street, history
Santa and stocks
says Indian stock markets tend to rally from Christmas Eve to the New Year’s Day (or the first trading day of the New Year).

FIIs or mutual funds
or big investors may not be bullish but if Santa has his way, investors will have something nice to finish the year, which saw Sensex lose over 50% of its value.

If investors want some hope, they can take heart from the fact that from 2000 onwards the sensex has never given negative returns for this period, which falls within the Yuletide.

Santa Claus rallies are said to happen as people tend to consume more, invest for tax breaks and more importantly, pessimists stay on vacation during this week, say experts.

For the rally to happen in 2008, the start seems to be a little off the track with Sensex losing 240 point on Friday. But people haven’t lost hope.

“An encore of 2003, 2004 or even 2006 could see Sensex gain anything between 3% and 6%. The sentiment not withstanding, we never know what markets might throw at us,” an institutional head at a local brokerage said.

A rally at this point could be a possibility because downsides from slowdown and lesser profits in third quarter are already there in the prices to a certain extent, he said.

For a 6-7 day window that exists between Christmas Eve and the first trading of the New Year, Santa has made decent stops at the Indian stock markets. – ET

Investing in Equities has made many people rich. Warren Buffet today is the richest in the world who is an American investor who has earned a great name and reputation 

Indian GDP stands at 7.6% v/s 7.9% in last quater.

India’s economy grew at the slowest pace since 2004 last quarter, increasing pressure on the central bank to cut interest rates.

Asia’s third-largest economy expanded 7.6 percent in the three months to Sept. 30 from a year earlier, after a 7.9 percent gain in the previous quarter, the statistics office said in a statement in New Delhi today. The median forecast of 16 economists in a Bloomberg News survey was for 7.2 percent growth.

Governor Duvvuri Subbarao may have to deepen the rate cuts he started last month to support growth in India’s $1.2 trillion economy as the world sinks into recession. Reducing borrowing costs would also shore up investor confidence after terrorist attacks since Nov. 26 killed at least 121 people in Mumbai, the nation’s financial hub.-Blomberg

 The annual Wholesale Price Index-based inflation rose 8.84 per cent for the week ended November 15, marginally down from the previous week’s yearly rise of 8.90 per cent. The latest WPI inflation rate was the lowest reading since May 17 and well below early August’s peak of 12.91 per cent.

The official WPI for ‘All Commodities’ for the latest reported week rose by 0.04 per cent to 235.1 points, up from 235 points for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at 3.35 per cent during the corresponding week of the previous year.

Fish-Marine cheaper

The Primary Articles Group rose 0.1 per cent as the index for ‘Food Articles’ group rose by 0.1 per cent due to higher prices of moong, rice and bajra (3 per cent each), ragi (2 per cent) and masur, maize and fruits and vegetables (1 per cent each). However, the prices of fish-marine (12 per cent) and gram and tea (2 per cent each) declined.

Soyabean dearer

The index for ‘Non-Food Articles’ group rose marginally due to higher prices of soyabean (11 per cent), gingelly seed and castor seed (2 per cent each) and linseed (1 per cent). However, the prices of raw rubber (4 per cent), cotton seed groundnut seed and raw cotton (2 per cent each) and raw silk (1 per cent) declined.

The fuel, power, light and lubricants group index remained unchanged at its previous week’s level of 353.3 points. The Manufactured Products group rose by 0.05 per cent as the index for the ‘Food Products’ group declined by 0.1 per cent due to lower prices of cotton seed oil (5 per cent), imported edible oil (4 per cent), rice bran oil (3 per cent) and gur (2 per cent).

However, the prices of bran (all kinds) (5 per cent), gingelly oil (4 per cent), sooji (rawa) (2 per cent) and salt and atta (1 per cent each) moved up. The index for the ‘Textiles’ group rose by 1.0 per cent due to higher prices of cotton yarn-cones and hessian and sacking bags (4 per cent each), texturised yarn (2 per cent) and hessian cloth and cotton yarn-hanks (1 per cent each). However, the prices of synthetic yarn (2 per cent) declined.

The index for ‘Rubber and Plastic Products’ group declined by 0.2 per cent due to lower prices of PVC fitting and accessories (12 per cent). The index for ‘Chemicals and Chemical Products’ group rose by 0.3 per cent due to higher prices of acetylene (70 per cent) and oxygen (8 per cent). However, the prices of vitamin liquids (4 per cent) declined.

The index for the ‘Base Metals Alloys and Metal Products’ group declined by 0.6 per cent due to lower prices of ferro silicon (24 per cent), steel ingots (plain carbon) (16 per cent), basic pig iron and foundry pig iron (7 per cent each), zinc (3 per cent), steel sheets, plates and strips (2 per cent) and ms bars and rounds (1 per cent). However, the prices of joist and rolls and other iron steel (3 per cent each) moved up. – TheHinduBusinessLine

Wednesday’s terrorist attack that rocked the financial capital of the country could further dampen investor sentiment already shattered by the credit crisis, say analysts and marketmen.

However, most of them do not expect a sharp fall in key indices.

“There might be a knee-jerk reaction in the market when it opens”, said Mr Manish Sonthalia, Vice-President, Equity Strategy, Motilal Oswal Financial Services Ltd.

Both Bombay Stock Exchange and National Stock Exchange were officially closed on Thursday following the terror attack.

“I don’t see a great impact tomorrow on markets,” said Mr U. K. Sinha, Chairman & Managing Director of UTI AMC. In the past also such developments had only a temporary impact on trading, he said.

Both BSE and NSE said that the expiry in futures and options, and settlement due on Thursday, were postponed to Friday.

The Singapore Nifty Index Futures opened a little lower than the previous close and ended lower by 64 points.

The terror attack as such is not going to impact the market but will have sentimental impact and foreigners may defer their investment plans, said Mr Dinesh Thakkar, CMD of Angel Broking Ltd.

Some analsyts feel that in the event of a market crash, domestic institutions such as LIC might come to the rescue, said the head of research at a broking firm.

On Tuesday, Sensex ended higher by 331.19 points at 9026.72.

Downgrade seen

As foreign tourists were held captive in top hotels, there might be a downgrade on the big and reputed names in the hotel industry, said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

The terror attack is bound to create a panic amongst the foreign investors which in turn could impact foreign direct and institutional investments.

The US traded shares of Indian companies were up on Wednesday. ICICI bank was up by 1.8 per cent, Infosys by 6 per cent, MTNL by 3.1 per cent and Wipro by 3.8 per cent.

Meanwhile, the SEBI board, scheduled to meet tomorrow, is expected to consider, among others, the exit route for regional stock exchanges and guidelines for separate exchanges for small and medium enterprises.

The equity, currency, bonds and money markets were officially closed on Thursday.

Source – TheHinduBusinessLine.

Shocking terror attact in Indias Financial Capital. Over 80 are Dead and 200 are injured (Sources).

PINC Research has maintained its hold rating on Tata Chemicals in its November 25, 2008 research report. “Tata chem. announced successful refinancing of the USD 300 million bridge loan it had taken for funding the GCIP (General Chemicals Industrial Products Inc.) acquisition in Mar’08.”

“At the CMP of Rs 138, Tata chem. is trading at a P/E of 4.5x and EV/EBIDTA of 4.3x its FY10 estimates. With slowdown in construction activity and automobile manufacturing, prices of glass are witnessing significant correction. The same would put pressure on soda ash prices, especially at a time when full year contracts are due for renewal in Jan’09 for BMG and GCIP facilities. We have factored in a 15% reduction in soda ash prices across all facilities. The correction in soda ash prices can be more severe than estimated by us. Hence we maintain our ‘HOLD’ recommendation,” says PINC’s research report.

Angel Broking has recommended a buy rating Union Bank of India with a target of Rs 194 in its November 21, 2008 research report. “We believe UNBK is amongst the more profitable, efficient and competitive PSU Banks. We have a positive outlook on the bank due to traction in CASA deposit growth driven by large branch expansion plans as well as cost-efficient operations. We expect the Bank to deliver 12% CAGR in Net Profit and 24% RoE over FY2008-10E.”

“At Rs 144, the stock is trading at 4.2x FY2010E EPS of Rs 34.3 and 0.9x FY2010E ABV of Rs 161.9. The stock has been trading at a median one-year forward P/ABV multiple of 1.1x since April 2002. We value the stock at 1.2x FY2010E ABV to arrive at a 12-month Target Price of Rs 194, implying an upside of 35%. We recommend a Buy on the stock,” says Angel Broking’s research report.