idea4trade

A lost shepherd in the realty space

2008-04-14T07:08:00.000-07:00

Some analysts, backing DLF, have felt that the sharp fall in this stock in recent times, in line with others in the sector and the market, was unjustified. Realty shares have, of late, fallen on concerns of slowdown in demand for property, which has led to softening of prices in several pockets of the country.

DLF shares have more than halved from its highs in mid-January, while the BSE’s Realty Index has fallen 47% in the period. Analysts tracking the company said DLF should not have been clubbed with the rest in the sector, given its better focus on commercial assets compared to several of its peers and diversification in its revenue portfolio.

They say commercial properties will be more resilient to fall in prices than residential. But, pessimists argue that a slowdown in information technology and related sectors, led by a US recession, ensures that even commercial properties are not totally insulated from drop in prices.

They estimate that these sectors, till recently, contributed 50-60% of the key office properties in the country. It is said that such uncertainty has resulted in the company delaying its plans to list DLF Office Trust, a real estate investment trust(REIT), on the Singapore REITs market.

'Crude Oil would trade $187 a barrel in 3 years'

2008-04-14T02:25:00.000-07:00

MUMBAI: Crude Oil prices have been going up and up all these months. Do you remember that six years back in 2002, the oil price was $20 a barrel? Now that oil price has gone past $100, how far can it go?

According to Keith Fitz-Gerald, Investment Director of Money Morning/The Money Map Report, crude oil would trade as high as $187 a barrel in the next three years.

Back in early 2002, when oil was trading at less than $20 a barrel, Fitz-Gerald had predicted that oil prices would reach $100 a barrel within 10 years.

Now again, the seasoned analyst writes:

"Late last year, when oil was trading in the range of $90 a barrel, I first publicly predicted that crude would trade as high as $187 a barrel in the next three years . In the middle of March, just days after I reiterated that prediction and provided some potential related investment opportunities in an edition of Money Morning , Wall Street giant Goldman Sachs Group Inc. ( GS ) issued a report predicting crude oil prices would reach $175 in the next few years.

Real pricing changes and the altered behavior that flows out of such stressful stretches can only take place when prices are high and when shortages become apparent. Without the benefit of all the information uncovered by such a volatile environment, forecasting can be a fool's game.

As I've demonstrated, whenever I've made price projections, I've always made sure to factor in as many variables as possible. But it's clear to me that the Energy Department did not do the same.

Therefore, as much as we'd love to believe that gasoline prices will stop their incredible ascent at $3.60 a gallon this spring, we can't. Not only does the government's price point seem to be little more than another guess in a long line of baseless predictions, it's even contradicted by the saga that's unfolding on the global economic stage.

Absent the introduction of proven alternatives to gasoline, we're entering an era in which a pump price of $3.60 a gallon is going to be looked back on as a bargain.

And while it's going to be a painful period, investors who view this as an opportunity may well find ways to take the sting out of escalating energy prices."

Seven ways to survive a Stock Market Correction!

2008-03-08T01:19:00.001-08:00

Here are seven simple ways to survive a stock market correction as an investor : -

1. Stop Listening To Analysts

Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them won’t be of any help. The reason people listen to analysts is because they are looking for peace and hope. Trust me you will get none of that by listening to somebody else. Peace and hope are all within you.

2. Stop Staring At Your Portfolio Every Thirty Minutes

Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This won’t help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happy. If it isn’t, find out if you need to exit. The stock price will catch up in the near future if business is growing. Do you stare at your money kept in a bank FD everyday? Most probably not. Use the same principle when you invest in stocks or mutual funds.

3. Be Patient

Many of you might not have a lot of cash to buy cheap now; however please be patient with whatever you have bought. Even the youngest billionaire on Earth today is 23 years old. It took him 23 years to be a billionaire and he didn’t do it in few days or weeks. The youngest billionaire probably in history is 23-year-old Mark Zuckerberg - the founder of the social networking site-Facebook.

4. Speak To Actual Investors With Experience

Instead of interacting with analysts or your broker, speak with people who are actual investors and who have been in the market for longer periods of time than you. They will tell you how they have survived various stock market corrections and what has made them richer. Read and learn more about people who have actually created wealth and sustained it over a long period of time

5. Stop Following Crazy Tips

Please for heaven’s sake stop following ‘hot’ tips which promise to make you a millionaire in a matter of months. Maybe the ‘hot’ tip is only meant for billionaires who would end up as millionaires in case they do follow the tip. If it seems to good to be true, it is probably just a scam, which hopes to take money away from retail investors and put them in the hands of greedy manipulators. Similarly stop following rumours about how fundamentally strong companies are going to be shut down and go bankrupt in the next few months. Use your own head and trust yourself.

6. Understand Market Cycles

Every asset class has a cycle. Stock markets, mutual funds, real estate all move in cycles. Please realize that nothing can keep going up forever in a single direction. There will be phases when prices will come down and again move up. If you go back into history you will see several instances when stock prices came down, however over a period of time quality companies always reward investors. Understand market cycles, and don’t become a slave to them.

7. Follow The Guru

Today the richest man on earth, Warren Buffett, is an investor who has created wealth because he has stayed away from what everybody else is doing and has simply invested in quality companies for the long term. He invested in Gillette, for the simple reason that he believed that men won’t stop shaving. It makes sense to follow, as I call him, “The Guru” and think long term and remember people who create wealth do things that others don’t.

I’m sure if you follow the simple techniques above you will be a much happier and a calmer investor. Investing is about controlling your emotions and being disciplined about what you do.

HDFC Bank, Centurion boards okay merger plan

2008-02-24T02:01:00.000-08:00

Mumbai: The boards of HDFC Bank and Centurion Bank of Punjab have approved in principle a merger between the two banks. In a joint statement issued after the board meetings on Saturday, the banks said the merger will be subject to “satisfactory due diligence, a fair share-swap ratio, requisite statutory, regulatory and corporate approvals, including those from the Reserve Bank of India, the stock exchanges and shareholders of both banks.”

The boards of both banks will again meet on February 25 to consider the share swap ratio after the receipt of the valuation reports. A decision with regard to the draft scheme of amalgamation and any other matters as required will be taken by the boards on February 28, the statement said.

Deepak Parekh, Chairman, HDFC, the promoter of HDFC Bank, said: “We get scale…we will get about 400 branches at one go. Today, size is important in the banking sector. They (Centurion) have good presence in Punjab – thanks to Bank of Punjab, which was merged with Centurion – where they have sizeable exposure in the agriculture sector. Similarly, they have a large branch network in Kerala following the merger of Lord Krishna Bank. This would help us leverage the NRI business and probably tap opportunities in the Gulf.”

According to analysts, the advantages of the merger for shareholders of both the banks can be ascertained only after knowing the exact swap ratio. A section of analysts, however, feels that the swap ratio could work out to be 20:1 or even more than that.

“The swap ratio could be 20:1, If we assume the share price of Centurion Bank to move up to say, Rs 75 (Rs 58 last traded price on Friday) post the news of merger, then the swap ratio could work out to be 20:1 (1474/75) Rs 1474 being the last traded price of HDFC Bank’s scrip; that is 20 shares of Centurion would fetch one share of HDFC Bank,” said Vishwas Agarwal, an analyst.

Centurion Bank of Punjab has acquired a number of banks, the most recent one being the Lord Krishna Bank in August 2007. Earlier, it had acquired BankMuscat’s Indian operations in 2003, which was then followed by Bank of Punjab in 2005.

Reliance Power IPO

2008-01-22T07:29:00.000-08:00

We are a wealthy nation! 'Soneki chidiya aa gayi hai!'( The golden birdie has arrived).
The overwhelming response to Reliance Power IPO substantiates this fact. Let me put this in the proper perspective. This IPO was for approx US $ 3 billion. It has been oversubscribed 67 times. That means approximately US $ 200 billion have moved towards this IPO. This is a huge amount. The retail portion was supposed to be 30% (US $ 1 billion). That has been oversubscribed 16 times. So retail investors like you and me have put in US $ 16 billion for this IPO.
Let us first compare this US $ 200 billion number with other numbers.
India's foreign exchange reserves are US$ 265 billion. And here there are US $ 200 billion for a single IPO.
The FII inflows for the entire year 2007 have not exceeded US $ 20 billion. This IPO has generated 10 times more that amount.
George W Bush has announced a 'growth package' for the revival of American economy yesterday. That package is US$ 150 billion. Much lower than this amount generated here.

What does this mean for the future?

The money from the retail investors after refunds is not going to go back to the FDs and PPFs. It will soon be back in to the stock markets applying for quality stocks. The over subscription from HNI and QIB will also find its way back into the stock markets looking out for quality stocks.

Who are eyeing this money?

Many Indian and Foreign funds, promoters, banks, governments are going to look at this opportunity to tap this wealth. There are going to be many issues of quality stocks in the primary markets. There would also be promoters of dubious records trying to cash in on this wealth.

So what should we do?

We should just hold on to our stocks,mutual funds, land banks, gold, commodities, what have you. Move into quality assets and be patient. This flood of money is likely to raise asset prices to much higher levels. We can do some accumulation of good stocks in the meanwhile. Stocks that are ripe for unlocking value. Some names that come to my mind are Reliance Industries, HDFC,ICICI Bank, Larsen and Toubro. There are many more. GOI will also come out with some follow on offers of PSUs. The opportunity is huge.

Hopefully our regulators and educators keep a check on the issues coming into the markets. Investor education and proper guidance remains the primary need of the hour. India and its retail investor have arrived on the scene. Happy investing!

New To Market Check Here

2007-11-18T21:41:00.000-08:00

INVESTMENT :

It is when we buy shares as the purpose of investment that is we buy shares and get them transfer by our name to our Demat account . It is usually done to gain long term gains and grow ur capital with growth of company and get regular dividents. It may be short term (1-3 months) mid term (6-12 months) and long term (more then 1 year) .It is mostly considered safe .Just be careful while selecting ur portfolio and profile.

TRADING :

Trading is done usually to to gain fastly . It is considered to be of high risk as we all know the funda (HIGH RISK HIGH GAIN ) , So u could end up a day gaining some good amount as well may be loosing (bad luk that wat we say when we loose) .

So wat is TRADING ?

It is done at the market time say we buy some shares of bajaj auto @ 2300 rs ..after and after some time say within the same day and market hours it has gained 50 rs ..now priced at 2350 , so now we can sell them .How much we gained say for 100 shares 100X50= 5000 rs. For trading usually the broker charge us very low , and for some reason say if the market price got lowered then our buy price we have to book the loss.
We can also carry our deal that is buy deal for selling say tommorrow or some other day but that will cause the shares as to be delievered, so we may have to pay some good amount of commision to our broker so that will too add up in our buy price.
Trading within same day i.e buying and selling with in same day is usually called as intrady trading .
i.e we have to buy and sell at the same day.
For this we get some limit from our brokerage after giving them some deposit and we can buy and sell within that much of amount , for eg after giving them a deposit of 30,000 we get the limit of 200000 so we can buy and sell within that limit only .

FEW TERMS USED in MARKETS :-

CMP : -

Current Market Price (Termed as price on whicg the share of a company is trading ).

BTST :-

Buy Today Sell Tommorow ( when u buy something for today for selling tommorow also called overnight positions)

STBT :-

When u sell something today to buy tommorrow. same as BTST but opposite.

FUTURE AND OPTIONS (F&O)

Future trading is something considered to be of highest risk .Needless to say highest return too..
so first of all wat is future? In future trading we buy and sell similar way as of trading but here the style and game is different.
Futures trading consist of lots of a company . These lots depends upon various aspects , markets capitalization , current market price of share. Lots may be of 1000,2000, 7000, 14000..as hogh and as low as 500,200.150 , 100 in case of infy.
SO when u buy a Futrs lot u seems to be have bought that much shares virtually , usually people do that on the margin they have got with their brokerage house.
It not some thing u have to pay for these many quantity .U just buy them with a fixed amount of security required as per the norms with ur brokerage house that may be 1 lac, 2 lac, 5 lac . Depends upon the capital required and value of futrs.
For eg : if one buys a Fut lot of Infosys @ 2000 he has done a buy of 2000X100 (100 as lot size) so = 200000 comes out to be 2 lac .
so for that the brokerage may ask for 1 lac for security.
Similarly prices of futrs lot varies as the prices varies in cash buy ..Why Risky ?Simple if the price falls , and u are holding a future lot of 5000 shares , every rupee fall will make ur wealth less by 5000 so a 10 rs fall in market means 50,000 loss.
But similarly a 10 Rs gain means 50,000 rs profit . and that happens within minutes .
Futrs u can buy any time in the month but u need to sell it on or nefore last thursday as it is termed as F&O Expiry day . If u dont sell Exchange will sell it on ur behalf at the closing on curent market price.
There is also a term called market rollover . Which is nothing but when u continue holding ur future lot of shares to next month and that is done by selling the current month Future and buying the next month future.so in the end u are having same company share for next month also .

SHORT SELLING :-

Short Selling is something that keeps market regulated and on track . It is useful in certain cases say :when markets are moving more than what was expected and when a certain share is trading higher than wat is expected .SO in these cases and many more short selling is done . It a highly risky trade.
SO what exactly short selling is ?
Short selling is nothing but when a person sells the stock before buying it .Strange : yes..but here how it goes..SAY Mr X thinks that th current market price of a script eg : infosys is highand he thiks that it can fell from cmp of 2000 to 1800 rs .so he sells the infosys @ 2000 and if surely infosys fells to 1800 he can buy (also called recover)in market @ 1800 rs ..so by doing above actually he had made a buy at 1800 and sold at 2000 so a profit of 200 rs per share.
but in the worst case if Mr x sold infosys at 2000 and the share price rises further to 2100 after selling and he thinks its not coming down and it does'nt so he will buy at 2100 rs now .. which is same as buying at 2100 and selling at 2000so a loss of 100 rs per share.

BASIC QUESTIONS:-

You must have heard stories of the fabulous returns made in the stock markets in recent months. And you longed wishfully for a piece of the action.
But you could also have heard horror stories of how a friend lost his shirt in the stock market.
And were promptly thankful that you didn't lose yours.
Let's set the record straight.

Wisely chosen (those are the key words), stocks are a must for any serious investor.

They add that extra zing to your collection of investments.
Study after study has revealed that over the long term, stocks outperform all other assets. That means you can expect to earn more from shares than from bonds, fixed deposits or gold.
No doubt the risk is higher with shares. But if you are in for the long haul, so are the potential returns.
But before you take the plunge and invest in the stock market, get your basics right.
This series will tell you about the basics of investing in stocks.

1. Stocks are not only for the brilliant

Stocks are far from being rocket science.
The strategies you need to know to maximise your wealth and the pitfalls you need to avoid are not beyond comprehension.
Even if you feel that you don't have the time, and prefer to entrust your money to a portfolio manager or mutual fund, the least you need to know is which funds are better, how to choose your fund manager, and keep a tab on his performance.

2. So what is a share?

Any business has a lot of assets: The machinery, buildings, furniture, stock-in-trade, cash, etc.
It will also have liabilities. This is what the company owes other people. Bank loans, money owed to people from whom things have been bought on credit, are examples of liabilities.
Take away the liabilities from the total assets, and you are left with the capital.
Assets - Liabilities = Capital.
Capital is the amount that the owner has in the business. As the business grows and makes profits, it adds to its capital.
This capital is subdivided into shares (or stocks).
So if a company's capital is Rs 10 crore (Rs 100 million), that could be divided into 1 crore (10 million) shares of Rs 10 each.
Part of this capital, or some of the shares, is held by the people who started the business, called the promoters.
The other shares are held by investors. These investors could be people like you and me or mutual funds and other institutional investors.

3. What does this mean for me?

You must have realised by now that owning a share means owning a share in the business.
When you invest in stocks, you do not invest in the market. You invest in the equity shares in a company. That makes you a shareholder or part owner in the company.
Since you own part of the assets of the company, you are entitled to the profits those assets generate. Or bear the loss.
So, if you own 100 shares of Gujarat Ambuja Cement, for example, you own a very small part -- since Gujarat Ambuja has millions of shares -- of the company. You own a share of its assets, its liabilities, its profits, its losses, and so on.
Owning shares, therefore, means having a share of a business without the headache of managing it.
Your Gujarat Ambuja shares, for instance, will rise in value if the company makes good profits, or may do badly if people stop building houses and demand for cement falls.

4. What do mean by rise in value?

If the company has divided its capital into shares of Rs 10 each, then Rs 10 is called the face value of the share.
When the share is traded in the stock market, however, this value may go up or down depending on supply and demand for the stock.
If everyone wants to buy the shares, the price will go up. If nobody wants to buy them, and many want to sell the shares, the price will fall.
The value of a share in the market at any point of time is called the price of the share or the market value of a stock. So the share with a face value of Rs 10, may be quoted at Rs 55 (higher than the face value), or even Rs 9 (lower than the face value).
If the number of shares in a company is multiplied by its market value, the result is market capitalisation.
For instance, a company having 10 million shares of a face value Rs 10 and a market value of Rs 30 as on November 1, 2004, will have a market capitalisation of Rs 300 million as on November 1, 2004.
5. So how does one buy shares?

Alright, you have decided you want part of the action. Shares are bought and sold on the stock exchanges -- the two main ones in India are the National Stock Exchange (NSE), and the Bombay Stock Exchange (BSE).

You can use three different routes to buy shares: Through your broker, trade directly online, or buy shares when a company comes out with a fresh issue of shares. This is called an initial public offering (IPO).

Now that we have demystified the key words -- shares, face value, market value and market capitalisation -- in the subsequent articles, we will explore how to buy and sell stocks, and how to subscribe to a new issue.
Stay tuned!

DON'T MISS!Make money with shares

The basics of trading:

Buying Low and Selling High Almost all of us hear this term, buy low and sell high. Most of the analyst also say that if you buy low and sell high then you will make good money.

Now the question is what is low and what is high?

This is very difficult question as well as a very easy one. I will try to explain that below with examples. This strategy can be used for intraday, short term as well as long term trading. Why? How can one strategy be used for all the trading types? Well, trading is no rocket science and you don’t need to know a hell lot of things to learn trading. It is all about doing the basics right.

Now lets take some example.

IDBI

Image1
Image2

What I have picked up above is not an ideal case. This is a general case which you can find in almost all the scrips.

Both the charts are of IDBI. The intraday chart is for 28th August, 2007.
The market was volatile on this day and was oscillating between red and green for the entire day.

Now lets read the charts. I will start with the intraday chart.

As the day was volatile so you can also see that the entire day trade was volatile. But can you see a buying opportunity and selling opportunity in this chart?

I can see one opportunity to short sell first and buy at a later stage.

Where? At the top?

The answer is no. You can never catch a high or a low. If some one tells you can do that, then I would say he is bluffing. If some one did catch the high or a low, then it is just a coincidence and nothing else.

So where is the short sell opportunity in this chart?

The opportunity is around 12 o’ clock.

If you see the chart, the charts were making a lower high and a lower low for every spike. This means that the trend is bearish and the scrip is going to fall to lower levels. So this is an entry point for intraday trade. Short sell at this point.

Now the next question comes, where to exit this trade?

If you around 1:30 pm, you can see that the bearish trend has changed and the chart shows that the scrip is making higher high and higher lows. This is a signal of change in mood of the traders and you can exit at this point. i.e. cover you shorts.

Now, you must have noted that I have not taken an opportunity to short sell at the highest point nor have I covered at the lowest point. Why?

The answer is simple. How do you know which is a high and which is a low?

So rather than trying to catch a high or low, always try to catch a trend.

What I have shown you above is a very small move and you might catch a 1% move in this chart. On a better day, you will get a much better move.

So what you should do now? Choose your scrip. Watch the intraday chart for the scrip and try to identify entry and exit points. And then compare your calls at the end of the day. You need not trade. But be honest with your calls and let me know what calls you had identified. If the calls failed, I will try to tell you why it failed.

While identifying your calls, keep two things in mind. Try to go with the general trend in the market. If the market is bearish, look out for short sell opportunity. If the market is bullish, look out for buying opportunity.

Can you identify any buying and selling opportunity in the 1st chart given?

Gold Falls on Speculation Rally Was Overdone; Silver Also Drops

2007-10-30T04:12:00.000-07:00

Gold fell in London on speculation a three-week rally to within 0.7 percent of $800 an ounce didn't reflect expectations that mining companies are expanding production. Silver also dropped.

China's gold output increased 13 percent in the first nine months of this year, closing in on South Africa's century-long reign as the world's largest producer. Gold is trading above the 25-day, 55-day, 100-day and 200-day moving averages, indicating for some traders who use charts to gauge direction that prices may stall.

``I can see enough things in front of me to be worried'' that the rally may stall, said Robin Wilkin, head of commodities and foreign exchange technical analysis at JPMorgan Chase & Co. in London. ``Upside momentum is starting to die off.''

Gold for immediate delivery dropped $7.40, or 0.9 percent, to $784.40 an ounce at 9:40 a.m. in London, the first decline since Oct. 22. Prices climbed 7 percent in the past three weeks to a 27-year high of $794.70 yesterday as the dollar extended declines against the euro and crude oil prices gained. The dollar gained today and crude oil declined.

Today's drop may be enough to revive demand and send prices to $800 in the next day or two, Wilkin said. Over the next one or two weeks, prices may drop to $760 and then rebound to $820 or $850 by the second quarter of next year, he said.

Silver fell 24 cents, or 1.7 percent, to $14.275 an ounce.

Source Link Bloomberg

US gold ends up on weak dlr, crude; eyes $800/oz

2007-10-30T03:59:00.000-07:00

U.S. gold futures finished $5
higher on Monday after initially surging to just below $800 in
electronic trade, as a dollar slump and record crude oil prices
prompted bullion investors to enter the market.

However, analysts cautioned that a near-record high in
speculative net long positions in the futures market could
prompt a correction in gold before prices could rise further.

Carlos Perez-Santalla, a COMEX floor trader at Hudson River
Futures in New York, said that he was bullish on gold in the
near term because the downside for gold futures was limited
despite several chances for price correction last week.

Most-active December gold (GCZ7: Quote, Profile, Research) on the COMEX division of
the New York Mercantile Exchange settled up $5.10 at $792.60 an
ounce. It hit a low of $787.70.

In overnight electronic sessions, COMEX gold traded as high
as $798.30 as the dollar fell to a fresh record low against the
euro and a major currency basket on speculation that the Federal
Reserve will cut U.S. interest rates.

The Federal Reserve is widely seen cutting rates by a
quarter point to 4.5 percent on Wednesday from the current 4.75
percent, but other analysts said it may try to cut even more to
ease the credit markets and boost the ailing housing sector.

Oil prices jumped to a record high for a third straight day
on Monday as Mexico briefly halted one-fifth of its production
due to bad weather and the dollar hit new lows. U.S. crude
(CLc1: Quote, Profile, Research) soared to an all-time high above $93 a barrel.

Gold is used by investors as a hedge against inflation,
while a lower dollar makes gold, which is denominated in the
greenback, cheaper for holders of other currencies.

CORRECTION IMMINENT?

Meanwhile, the Commodity Futures Trading Commission said in
its latest Commitment of Traders report that speculative net
long positions in COMEX gold fell 7.7 percent in the week to
Oct. 23, after gaining 5.9 the previous week.

John Reade, head of precious metals strategy of UBS in
London, told clients in a note that the large long positions
made him wary of recommending purchases at the current levels.

"But with positioning so long in all metals -- and no sign
of supportive jewellery or industrial demand, a correction, when
it comes, will be likely brutal," Reade said.

Gold futures had rallied almost $50 to Monday's session high
of $798.20 from its low of $749 last Monday.

In a note to clients, Jon Nadler, senior analyst at Kitco
Bullion Dealers in Montreal, cited cautionary signs and
overbought conditions for the gold market.

Nadler said that 1,000 rupees per gram price of India's gold
futures <0#mau:> was a "visible dent" to the country's
festival-related buying. India is the world's largest consumer
of bullion.

Meanwhile, the New York Mercantile Exchange said the open
interest levels of its gold futures breached 500,000 contracts
to a new record high. [ID:nN29429399]

In addition to the Fed's rate-setting decision on Wednesday,
major economic indicators later this week, including the advance
reading of the third-quarter real gross domestic product and
October payrolls report, will likely to set the tone for the
precious metals market.

At 2:15 p.m. EDT (1815 GMT), spot bullion traded at
$788.90/789.70, compared with the Friday New York close at
$783.80/784.30. Earlier, spot gold hit a new 28-year high of
$794.40. London bullion dealers fixed the afternoon spot
reference price at $788.50.

COMEX estimated final volume at 116,300 contracts, and gold
options were estimated at 36,324 lots. Turnover in Chicago Board
of Trade electronic 100-oz gold futures was 28,497 lots at 2:41
p.m. EDT (1841 GMT) http://www.cbot.com/cbot/pub/page .

Platinum futures also rose to an lifetime contract high of
$1,374.90 in early sessions on robust investment demand.

However, NYMEX January platinum (PLF8: Quote, Profile, Research) reversed initial
gains to finish down $3.60 at $1,465.50 an ounce. Spot platinum
was quoted at $1,454/1,458.

COMEX December silver (SIZ7: Quote, Profile, Research) closed up 15.0 cents or 1.1
percent at $14.430 an ounce, trading between $14.290 and
$14.540.

Spot silver was quoted at $14.39/14.44, higher than
Friday's late New York quote of $14.20/14.23. London silver was
fixed at $14.41.

December palladium (PAZ7: Quote, Profile, Research) eased 55 cents to end at $375.20
an ounce. Spot palladium fetched $371/375.

SEBI ON P-NOTES

2007-10-28T08:55:00.000-07:00

SEBI ON P-NOTES

Sebi board cleared proposal to have a separate exchange for SME Segment
Date of calculation of AUC will be Sept 30

Sub accounts not to be allowed to issue PNs

PNs can't be issued with ODIs as underlying

FIIs shall not issue P-notes as underlying as derivatives has been approved

Current position to be wound up within 18 months

Board has decided further issuance of P-notes by sub accounts of FIIs to be discontinued with immediate effect

Sub accounts issuing P-notes have applied for registration of FIIs: Sebi

Until a final decision is taken on their being FIIs, sub accounts can continue as normal

Both proprietary and corporate sub-accounts will be allowed to do business till final decision is announced.

Reliance Power IPO: Ministry may refer issue to SEBI

2007-10-24T10:45:00.000-07:00

The Ministry of Corporate Affairs (MCA) is likely to refer the complaints received on the proposed initial public offering of the Anil Ambani Group company Reliance Power to the capital market regulator, Securities and Exchange Board of India.

Shareholder value

Official sources said that the Ministry has received representations from various quarters including some Members of Parliament alleging that the proposed IPO would destroy shareholder value of the parent company Reliance Energy (REL), which is a listed entity.

“Since the company has already filed its draft red herring prospectus with the capital market regulator, the Ministry is not directly involved. However, in order to ensure that the regulatory norms including those prescribed under the Companies Act are not flaunted, the Ministry is taking necessary precautions,” sources said.

Violation

Earlier this month, Reliance Power filed its draft red herring prospectus with the SEBI. According to the complaints, the proposal to transfer all projects from REL to Reliance Power has not been taken to the shareholders of Reliance Energy.

“The projects have been transferred under the agreement of September 14, 2007. This is highly irregular and is in clear violation of Section 293 (1) (a) of the Companies Act,” it has been alleged.

As per the Section, the board of directors of a public company cannot transfer any undertaking of the company without the consent of shareholders.

Credit Rating

Meanwhile, a spokesperson of REL refuted the charge that there is any irregularity in the company having transferred these power generation projects to its group company Reliance Power for execution by it. These projects have been conceived a long time ago and it was the decision of the independent members of the Board of Reliance Energy some time in 2004 that REL’s exposure to these projects be restricted to 50 per cent, he clarified.

Indeed, he added, the decision predates even that of the restructuring of Reliance Industries as part of a settlement among members of the Ambani family, the promoters of Reliance Industries and other group companies.

Execution of projects

The decision was also vindicated by the fact that credit rating agencies had rated the company’s debt instrument at the highest level as the risks of execution of these projects was not on the books of Reliance Energy, he added, reports The Hindu Business Line.