Mahindra satyam:Sell till Rs.85/-
Avoid this share till clear picture emanates. We got good shares like patni computers etc which are good now.
Unitech: sell
This share will be taken out of NIfty from tomorrow and heavy selling is expected. So those having unitech may sell it today.
It appears that this company is involved in CAG's indictment of 2G spectrum case. There is possibility of its indictment and also its plan to come out of telecom business through subsidiary is now resisted by CAG by indictment. Since Supreme court is also looking in this matter and hence this company may lose sizable amount.
Sesa Goa, Bajaj auto : Buy now
They will be included in Nifty from tomorrow.
Expect buying increases in these stocks.
Tata steel: Rs.644Buy till Rs.675/-
* Tata Steel UK signed a senior facility agreement with a syndicate of 13 banks for £3.53 billion term loan. The new financing structure is in two parts — a five-year loan of around £1.86 billion equivalent and a seven-year loan of $1.58 billion equivalent. The revolving credit facilities for working capital purposes have been increased to $1.08 billion and will have a tenor of five years.
Tata steel succeeded as per their plan to refinance around $4.5-5.5 billion (Pound sterling 3.53 B) while the gross debt is around $9.5 billion.
Indian and International steel price also may firm up at any time.
Buy software stocks:Buy Patni which is cheap around Rs.425/- Target Rs.450/-
In USA, Senate Republicans successfully blocked the passage of an anti-offshoring Bill that would have denied tax breaks to US companies which move jobs overseas.This is a positive signs and relief to software companies.“The Bill would have increased the costs of US enterprises and made them uncompetitive in global markets…It (the defeat of the Bill in US Senate) is a good development for the Indian IT industry too because regulatory pressures will not, in any way, impair the ability of global customers to freely use the global delivery model,” Mr Krishnakumar Natarajan, CEO and Managing Director of MindTree, said.
Reliance industries.(Rs.988) Target Rs.1050/-
There will be another round of talks between Reliance industries and BP for RIL’s exploration and production (E&P) deal. The plan initially was for RIL to club certain blocks and sell 30% to British Petroleum. In April 2010, the valuation of RIL blocks were seen at USD 30 billion. Now reliance wants to create funds for shale gas deals and hence may plan for selling some blocks for sizable amount.BP is expected to discuss RIL's interest in its exploration assets in North Africa, downstream assets in West and South Africa and its petrochemical operations in Vietnam (which BP is looking to exit). BP and RIL may even revive their talks of a possible “farming in” opportunity in RIL's flagship KG-D6 oilfield, according to sources familiar with the matter as per business standard press note.
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.Expected good refining margins. Expected good half yearly earnings.The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010. IFCI will get bank licence. All companies including L&T, Reliance capital etc. are in the process of applying for bank licences and are awaiting for guidelines.
East India Hotels:Buy
The Royal battle begins. Now ITC also will subscribe to rights offer. So there will be good fight between reliance and ITC to take control of ITC in managment and it will benefit the investors.
Sterlite industries: Sell
Court directed sterlite industries to close their Tuticorin copper smelting unit and arrange for alternative employment or compensation to the workers and officers.This is the thrid setback for company in the recent happenings.
Bank, reality stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan giving income tax benefit will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI for exit of FIIs. Finance ministry may look into it.
Banks now have NPAs in dangerous levels in education loans, agri loans and to some extent in housing loans. Also there will be less housing loan business expected for reality and banking sector after revised Direct tax code comes in as no income tax benefit is given for repayment of principal of housing loans. Financial consultants,banks, reality companies and experts should recommend to Govt about bringing back the benefit under Sec.80C. Banks will feel the heat once many more private players enter into the areana of banking field like reliance capital, L&T and IFCI etc.
Bank of baroda, Union bank of india and dena bank will be infused with more capital by govt of india. Small quantities of Dena bank and UBI may be purchased at current price.
Suzlon: rs.53/- Buy small qty
Suzlon Energy, which holds 91 percent of REpower, is the world's third-largest wind turbine maker behind Denmark's Vestas and Spain's Gamesa. Now it plans to purchase the balance 9% also. Then there will be plan to sell 25% of it stake to bulk buyer in order to reduce its loans. Buy in small quantities .
Ayodhya verdict by High court will be released on 30.09.2010 at 3.30 pm i.e . after trading hours on Thursday. It appears that there will not be much commotion except small incidents here and there. All political parties agreed to keep peace and respect verdict of court.
Wednesday, September 29, 2010
Tuesday, September 28, 2010
free stock tips for trade on 29.09.2010
Tata steel: Rs.655 Buy till Rs.665/-
Ayodhya verdict by High court will be released on 30.09.2010 at 3.30 pm i.e . after trading hours on Thursday. It appears that there will not be much commotion except small incidents here and there. All political parties agreed to keep peace and respect verdict of court.
Sterlite industries: Sell
Court directed sterlite industries to close their Tuticorin copper smelting unit and arrange for alternative employment or compensation to the workers and officers.
Unitech: sell
It appears that this company is involved in CAG's indictment of 2G spectrum case. There is possibility of its indictment and also its plan to come out of telecom business through subsidiary is now resisted by CAG by indictment. Since Supreme court is also looking in this matter and hence this company may lose sizable amount.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010. IFCI will get bank licence. All companies including L&T, Reliance capital etc. are in the process of applying for bank licences and are awaiting for guidelines.
Tata steel: Rs.645:Buy
Now hold or buy upto Rs.660/-. Now Corus will be rechristened as Tata steel and the restructuring of loans of Corus which will be transferred to New entity Tata steel in Europe will be beneficial to Tata steel. The debts may be reduced to half nearly. Also there is likelyhood of steel price hike at any time.
Visa steel
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the iron ore mines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company who is ready to take risk corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
Reliance industries.(Rs.1001) Target Rs.1050/-
There will be another round of talks between Reliance industries and BP for RIL’s exploration and production (E&P) deal. The plan initially was for RIL to club certain blocks and sell 30% to British Petroleum. In April 2010, the valuation of RIL blocks were seen at USD 30 billion. Now reliance wants to create funds for shale gas deals and hence may plan for selling some blocks for sizable amount.
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan giving income tax benefit will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI for exit of FIIs. Finance ministry may look into it.
Banks now have NPAs in dangerous levels in education loans, agri loans and to some extent in housing loans. Also there will be less housing loan business expected for reality and banking sector after revised Direct tax code comes in as no income tax benefit is given for repayment of principal of housing loans. Financial consultants,banks, reality companies and experts should recommend to Govt about bringing back the benefit under Sec.80C. Banks will feel the heat once many more private players enter into the areana of banking field like reliance capital, L&T and IFCI etc.
Bank of baroda, Union bank of india and dena bank will be infused with more capital by govt of india. Small quantities of Dena bank and UBI may be purchased at current price.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
Suzlon: rs.53/- Buy small qty
Suzlon Energy, which holds 91 percent of REpower, is the world's third-largest wind turbine maker behind Denmark's Vestas and Spain's Gamesa. Now it plans to purchase the balance 9% also. Then there will be plan to sell 25% of it stake to bulk buyer in order to reduce its loans. Buy in small quantities .
Ayodhya verdict by High court will be released on 30.09.2010 at 3.30 pm i.e . after trading hours on Thursday. It appears that there will not be much commotion except small incidents here and there. All political parties agreed to keep peace and respect verdict of court.
Sterlite industries: Sell
Court directed sterlite industries to close their Tuticorin copper smelting unit and arrange for alternative employment or compensation to the workers and officers.
Unitech: sell
It appears that this company is involved in CAG's indictment of 2G spectrum case. There is possibility of its indictment and also its plan to come out of telecom business through subsidiary is now resisted by CAG by indictment. Since Supreme court is also looking in this matter and hence this company may lose sizable amount.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010. IFCI will get bank licence. All companies including L&T, Reliance capital etc. are in the process of applying for bank licences and are awaiting for guidelines.
Tata steel: Rs.645:Buy
Now hold or buy upto Rs.660/-. Now Corus will be rechristened as Tata steel and the restructuring of loans of Corus which will be transferred to New entity Tata steel in Europe will be beneficial to Tata steel. The debts may be reduced to half nearly. Also there is likelyhood of steel price hike at any time.
Visa steel
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the iron ore mines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company who is ready to take risk corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
Reliance industries.(Rs.1001) Target Rs.1050/-
There will be another round of talks between Reliance industries and BP for RIL’s exploration and production (E&P) deal. The plan initially was for RIL to club certain blocks and sell 30% to British Petroleum. In April 2010, the valuation of RIL blocks were seen at USD 30 billion. Now reliance wants to create funds for shale gas deals and hence may plan for selling some blocks for sizable amount.
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan giving income tax benefit will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI for exit of FIIs. Finance ministry may look into it.
Banks now have NPAs in dangerous levels in education loans, agri loans and to some extent in housing loans. Also there will be less housing loan business expected for reality and banking sector after revised Direct tax code comes in as no income tax benefit is given for repayment of principal of housing loans. Financial consultants,banks, reality companies and experts should recommend to Govt about bringing back the benefit under Sec.80C. Banks will feel the heat once many more private players enter into the areana of banking field like reliance capital, L&T and IFCI etc.
Bank of baroda, Union bank of india and dena bank will be infused with more capital by govt of india. Small quantities of Dena bank and UBI may be purchased at current price.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
Suzlon: rs.53/- Buy small qty
Suzlon Energy, which holds 91 percent of REpower, is the world's third-largest wind turbine maker behind Denmark's Vestas and Spain's Gamesa. Now it plans to purchase the balance 9% also. Then there will be plan to sell 25% of it stake to bulk buyer in order to reduce its loans. Buy in small quantities .
Monday, September 27, 2010
Free stock tips 28.09.2010
Unitech: sell
It appears that this company is involved in CAG's indictment of 2G spectrum case. There is possibility of its indictment and also its plan to come out of telecom business through subsidiary is now resisted by CAG by indictment. Since Supreme court is also looking in this matter and hence this company may lose sizable amount.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010.It is a stock in hibernation but any time it will come out of shell and climb upto Rs.70/-
Tata steel: Rs.645:Buy
"Steel prices may go up by Rs 1,500 a tonne
Press Trust Of India / New Delhi September 28, 2010, 0:08 IST
Domestic steel manufacturers may increase prices by up to Rs 1,500 a tonne in the next few days to cash in on the pick up in demand in the festive season, the second hike in as many months.
Now hold or buy upto Rs.660/-. Now Corus will be rechristened as Tata steel and the restructuring of loans of Corus which will be transferred to New entity Tata steel in Europe will be beneficial to Tata steel. The debts will be reduced to half nearly. Also there is likelyhood of steel price hike."
Visa steel
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the ines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
Reliance industries.(Rs.1001) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Don't miss to purchase it now thus not repenting later.Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.
The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
Banks now have NPAs in dangerous levels in education loans, agri loans and to some extent in housing loans. Also there will be less business expected after DTC in reality sector as no income tax benefit is given for repayment of principal of housing loans.
Bank of baroda, Union bank of india and dena bank will be infused with more capital by govt of india. Small quantities of Dena bank and UBI may be purchased at current price.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
It appears that this company is involved in CAG's indictment of 2G spectrum case. There is possibility of its indictment and also its plan to come out of telecom business through subsidiary is now resisted by CAG by indictment. Since Supreme court is also looking in this matter and hence this company may lose sizable amount.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010.It is a stock in hibernation but any time it will come out of shell and climb upto Rs.70/-
Tata steel: Rs.645:Buy
"Steel prices may go up by Rs 1,500 a tonne
Press Trust Of India / New Delhi September 28, 2010, 0:08 IST
Domestic steel manufacturers may increase prices by up to Rs 1,500 a tonne in the next few days to cash in on the pick up in demand in the festive season, the second hike in as many months.
Now hold or buy upto Rs.660/-. Now Corus will be rechristened as Tata steel and the restructuring of loans of Corus which will be transferred to New entity Tata steel in Europe will be beneficial to Tata steel. The debts will be reduced to half nearly. Also there is likelyhood of steel price hike."
Visa steel
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the ines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
Reliance industries.(Rs.1001) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Don't miss to purchase it now thus not repenting later.Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.
The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
Banks now have NPAs in dangerous levels in education loans, agri loans and to some extent in housing loans. Also there will be less business expected after DTC in reality sector as no income tax benefit is given for repayment of principal of housing loans.
Bank of baroda, Union bank of india and dena bank will be infused with more capital by govt of india. Small quantities of Dena bank and UBI may be purchased at current price.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Free stock tips today 27.09.2010
Tata steel: Rs.645:
Exercise caution. Now hold or sell.
Reliance industries.(Rs.1001) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.
Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Don't miss to purchase it now thus not repenting later.Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.
The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
ONGC: Buy:
Same as above. Also good interim dividend declared Rs.18/- per share for which record date will be 22.12.10
Cairn india: Open offer will be increased soon to rs.405/- to induce all miniority share holders. So buy.According to Indian market norms, a rival offer by ONGC against the offer of Vedanta has to be made within 21 days of the open offer being issued. But the state-run explorer ONGC still can make a counter-offer or exercise its claimed pre-emption right in certain properties of Cairn India before the extraordinary general meeting called by Cairn Energy Plc on October 7, to ratify the sale to Vedanta. If the company chooses to do so, ONGC will have to approach the Cairn Energy management before October 7 and, upon acceptance of its offer by the board, go to market regulator Sebi to stop Vedanta`s open offer for Cairn India shares to be launched on October 11.But it appears that open offer will sail through and revised offer will be made before Oct 7 by Cairn energy through Vedanta for Rs.405
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Steel and cement stocks - Buy
There is talk of another price rise by Jindal steel.All others will follow the same. Buy steel stocks including visa steel. Bulk investors can study visa steel and plan to grab sizable % in this steel gem which is growing just like tata steel.
"Visa steel"
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the ines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010.It is a stock in hibernation but any time it will come out of shell and climb upto Rs.70/-
Unitech: sell
This company is involved in CAG's indictment of 2G spectrum case.The economic times of today date states:
": Adding a new twist to the 2G spectrum scam, the Comptroller and Auditor General (CAG) has in its latest communication told the department of telecom (DoT) that a vast majority of the 126 licences controversially issued by the government in 2008 are illegal.
The sensational audit finding will further complicate the situation for the UPA government as Supreme Court begins to monitor investigations into the allocation of 2G spectrum under the stewardship of telecom minister A Raja in January 2008.
According to sources, CAG wrote to DoT in the second week of September that more than 75 licences issued in the 2G spectrum allocations have violated several of the guidelines for granting Unified Access Services Licence in a Service Area. These guidelines were issued on December 14, 2005 by DoT.
The CAG's communication to DoT says these licences were awarded to companies that did not meet several of the basic criteria laid down under the licence conditions. The finding comes over and above CAG's draft report that has indicted Raja for personally approving many of the important decisions that finally resulted in nine companies -- five of them with no experience in the telecom sector -- pocketing precious spectrum at throwaway prices.
CAG has listed a host of violations of DoT guidelines by the five new entrants and their several newly-floated companies. Among those indicted by CAG in its latest communication are Unitech, Loop, Swan, Datacom and Allianz Infra. Through various companies floated by them, together they hold over 75 of the total 126 licences given by the government without an auction. Some estimates have calculated the loss to the exchequer because of this sale in the region of Rs 60,000 crore.
CAG has also found some cases of forgery. In many of the licences, the Memorandum of Association of the applicant companies did not specify that they were being set up for telecom business, many of them were for construction business. So to overcome the need to have new MoAs approved by the registrar of corporate affairs, some of them put up unsigned MoAs in their applications. Many companies did not have adequate paid-up capital, and in some cases, they had violated cross-holding rules in telecom sector.
In the case of eight companies of Unitech, all of them held the annual general meetings just a day or two before the application was to be submitted. Officially, the AGMs were all held over two days within hours of notices being given, showing the farcical nature of the entire exercise.
The CAG findings now go beyond the issue of auction, and highlight the fact that DoT did not ensure that the companies adhered to its own guidelines. Raja had recently managed a law ministry opinion that CAG cannot question government's policy decisions, but the latest findings show that his department did not even carry out basic due diligence.
The findings add further complications to the 2G spectrum scam. Earlier, in its draft report, CAG had pointed out that Raja personally approved the issue of the now infamous press release of January 10, 2008, insisting on first-come-first-serve basis for allocation of licences, and giving operators just an hour's window to deposit demand drafts. The press release also advanced the cutoff date for submission of applications to September 25, 2007.
Raja had approved and signed the approval notings for the allocation of 2G spectrum to all the nine companies. Raja personally decided on the various cut-off dates in 2007, and later in January 2008, which favoured select companies, CAG found. First-come-first-serve was never DoT policy for granting licences, contrary to Raja's claims. It had been the policy only for release of spectrum after licences were granted, the CAG draft report said. "
Exercise caution. Now hold or sell.
Reliance industries.(Rs.1001) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.
Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Don't miss to purchase it now thus not repenting later.Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.
The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
ONGC: Buy:
Same as above. Also good interim dividend declared Rs.18/- per share for which record date will be 22.12.10
Cairn india: Open offer will be increased soon to rs.405/- to induce all miniority share holders. So buy.According to Indian market norms, a rival offer by ONGC against the offer of Vedanta has to be made within 21 days of the open offer being issued. But the state-run explorer ONGC still can make a counter-offer or exercise its claimed pre-emption right in certain properties of Cairn India before the extraordinary general meeting called by Cairn Energy Plc on October 7, to ratify the sale to Vedanta. If the company chooses to do so, ONGC will have to approach the Cairn Energy management before October 7 and, upon acceptance of its offer by the board, go to market regulator Sebi to stop Vedanta`s open offer for Cairn India shares to be launched on October 11.But it appears that open offer will sail through and revised offer will be made before Oct 7 by Cairn energy through Vedanta for Rs.405
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Steel and cement stocks - Buy
There is talk of another price rise by Jindal steel.All others will follow the same. Buy steel stocks including visa steel. Bulk investors can study visa steel and plan to grab sizable % in this steel gem which is growing just like tata steel.
"Visa steel"
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the ines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010.It is a stock in hibernation but any time it will come out of shell and climb upto Rs.70/-
Unitech: sell
This company is involved in CAG's indictment of 2G spectrum case.The economic times of today date states:
": Adding a new twist to the 2G spectrum scam, the Comptroller and Auditor General (CAG) has in its latest communication told the department of telecom (DoT) that a vast majority of the 126 licences controversially issued by the government in 2008 are illegal.
The sensational audit finding will further complicate the situation for the UPA government as Supreme Court begins to monitor investigations into the allocation of 2G spectrum under the stewardship of telecom minister A Raja in January 2008.
According to sources, CAG wrote to DoT in the second week of September that more than 75 licences issued in the 2G spectrum allocations have violated several of the guidelines for granting Unified Access Services Licence in a Service Area. These guidelines were issued on December 14, 2005 by DoT.
The CAG's communication to DoT says these licences were awarded to companies that did not meet several of the basic criteria laid down under the licence conditions. The finding comes over and above CAG's draft report that has indicted Raja for personally approving many of the important decisions that finally resulted in nine companies -- five of them with no experience in the telecom sector -- pocketing precious spectrum at throwaway prices.
CAG has listed a host of violations of DoT guidelines by the five new entrants and their several newly-floated companies. Among those indicted by CAG in its latest communication are Unitech, Loop, Swan, Datacom and Allianz Infra. Through various companies floated by them, together they hold over 75 of the total 126 licences given by the government without an auction. Some estimates have calculated the loss to the exchequer because of this sale in the region of Rs 60,000 crore.
CAG has also found some cases of forgery. In many of the licences, the Memorandum of Association of the applicant companies did not specify that they were being set up for telecom business, many of them were for construction business. So to overcome the need to have new MoAs approved by the registrar of corporate affairs, some of them put up unsigned MoAs in their applications. Many companies did not have adequate paid-up capital, and in some cases, they had violated cross-holding rules in telecom sector.
In the case of eight companies of Unitech, all of them held the annual general meetings just a day or two before the application was to be submitted. Officially, the AGMs were all held over two days within hours of notices being given, showing the farcical nature of the entire exercise.
The CAG findings now go beyond the issue of auction, and highlight the fact that DoT did not ensure that the companies adhered to its own guidelines. Raja had recently managed a law ministry opinion that CAG cannot question government's policy decisions, but the latest findings show that his department did not even carry out basic due diligence.
The findings add further complications to the 2G spectrum scam. Earlier, in its draft report, CAG had pointed out that Raja personally approved the issue of the now infamous press release of January 10, 2008, insisting on first-come-first-serve basis for allocation of licences, and giving operators just an hour's window to deposit demand drafts. The press release also advanced the cutoff date for submission of applications to September 25, 2007.
Raja had approved and signed the approval notings for the allocation of 2G spectrum to all the nine companies. Raja personally decided on the various cut-off dates in 2007, and later in January 2008, which favoured select companies, CAG found. First-come-first-serve was never DoT policy for granting licences, contrary to Raja's claims. It had been the policy only for release of spectrum after licences were granted, the CAG draft report said. "
Sunday, September 26, 2010
Family Planning- China example - India to learn
Central planners of china say the one-child policy has spared China from the pressures of hundreds of millions of additional people that would have strained scarce water and food resources as well as the nation's ability to educate and employ them. But India is not taking any step to stop this population increase.Family planning is utter failure in india and politicians are bold enough to take bold decisions. The future for India will be bleak when external revenue sources dry up and monsoon play havoc. So politicians , without seeing party benefits, should agree on passing the benefits of freebies/rations only to family of husband and wife,first one or two children of family and parents. Thus maximum benefit should be restricted to six only. This will go in long way to ensure water, house and employment etc, to future generations. Political parties should plan for peaceful living for future generations thus planning and preserving resources. Otherwise, there will be conflicts based on caste, creed, religion etc. on poor resources. We are already late in keeping the population on tight control. No allowance should be given to any religion in respect of ceiling. This appeal is to Congress and BJP who can do magic in indian politics if they are united on common principles of preservance of indian culture and unity. Kashmir also should be made purey an Indian state just like other states and any indian can buy, sell properties and settle in Jammu and Kashmir so that India is one can be proved. Plight of Kashmiri pandits should be eye opener for all those who supports article 370 which is a nail in the unification of India and brotherhood of all communities. Young politicians like Rahul Gandhi should think on these lines so that threat extended by separatists can be faced by India with full throat.After removing article 370, for ten years , Jammu and Kashmir should remain under president's rule and all type of helps and development should be given to the people of Jammu and Kashmir and pandits should be settled in their own place with security. This can be done in consultation with BJP and communist parties so that future of united India is assured. China emphasis for nations security first is the one to be followed by india.
UNO also should take steps to control population of certain countries like Africa. Since when population explodes, slowly neighbouring lands will be occupied and battles will be fought Also lot of heat, gases etc. released by more people will spoil the ozone layer and cause great havoc to world.
UNO also should take steps to control population of certain countries like Africa. Since when population explodes, slowly neighbouring lands will be occupied and battles will be fought Also lot of heat, gases etc. released by more people will spoil the ozone layer and cause great havoc to world.
Saturday, September 25, 2010
New Mining Policy on onvil- some positive thinking
New mining policy- Profit sharing 26% need review
RK Sharma, secretary general of Federation of Indian Mineral Industries rightly said in an interview regarding the above topic that “ Profit is the reward for the entrepreneurship, efficiency and the risk which capital owner undertake”.
He is right in the sense that benefit cannot be given in all spheres. At present already rule is there for giving employment for land oustees. Apart from this, sharing profit to the extent of 26% is too much. In mining areas, law and order problem, mafia problem etc. are more and the person taking mining lease have to bear lot of mental and financial liability for facing those problems. Also local bodies and state govt pressurize mine lease takers to take financial participation in welfare schemes of the localities in which mine is situated for which they have to spend crores of rupees.
What is the way out?
Govt of India can give two options to the land oustees and land providers for mining lease:
First option:
Give employment to the displaced person or to the kith and kin of the displaced persons with compensation for the land at market rate.
Second option:
Arrange to give compensation 25% in the form of shares in the company and 25% in the form of debentures and also a residential flat for the displaced persons. Eligible persons should have the land in their name at least 3 years and if any one acquired the land within 3 years and claim comensation at market place, they will be compensated to the level of registered amount in registrar office with some 20 to 25% additional % based on market price. Balance can be given to previous owner if he has owned it for more than 5 years.
This may clear off many problems of both sides. This will satisfy all except the mafia which grabs the land for getting good deal or illegal mining.
RK Sharma, secretary general of Federation of Indian Mineral Industries rightly said in an interview regarding the above topic that “ Profit is the reward for the entrepreneurship, efficiency and the risk which capital owner undertake”.
He is right in the sense that benefit cannot be given in all spheres. At present already rule is there for giving employment for land oustees. Apart from this, sharing profit to the extent of 26% is too much. In mining areas, law and order problem, mafia problem etc. are more and the person taking mining lease have to bear lot of mental and financial liability for facing those problems. Also local bodies and state govt pressurize mine lease takers to take financial participation in welfare schemes of the localities in which mine is situated for which they have to spend crores of rupees.
What is the way out?
Govt of India can give two options to the land oustees and land providers for mining lease:
First option:
Give employment to the displaced person or to the kith and kin of the displaced persons with compensation for the land at market rate.
Second option:
Arrange to give compensation 25% in the form of shares in the company and 25% in the form of debentures and also a residential flat for the displaced persons. Eligible persons should have the land in their name at least 3 years and if any one acquired the land within 3 years and claim comensation at market place, they will be compensated to the level of registered amount in registrar office with some 20 to 25% additional % based on market price. Balance can be given to previous owner if he has owned it for more than 5 years.
This may clear off many problems of both sides. This will satisfy all except the mafia which grabs the land for getting good deal or illegal mining.
Indian Govt thinks of increasing retirement age to 62
In order to curb outflow of money in the form of gratuity, pension etc Govt of india is thinking to raise the age limit to 62.
This is not a good suggestion and it is going against the young generation. Any political party has to plan for present generation and future generation. Just for avoiding outflow of funds, if the plan is there to extend retirement age to 62 years, it is laughable. Then there is no limit for upper age limit and with the present salary structure, working govt employees will be happy but seeing the unemployment figures in India, Govt will be doing injustice to the unemployed youths. Already there are lot of complaints about high salary structure with secured jobs with good pension drive manay caste and communities to grab govt jobs and award to their communities and partymen. So Congress Govt should not allow this to happen in the interest of future generation. Policies like export of iron ore, cotton etc are the blows to Indian economy as we do not attempt to make value added item exports using the base raw materials and many industies like cotton textiles mills which are giving employment to millions in India are in the process of losing export orders due to increase in price of cotton. So govt should plan long term view and not short term view. The maximum age ceiling should not go beyond 60 years. On the other hand, Govt should think of extending old age pension to orphaned ones in the society by bringing some supertax on companies so that slowly it can create social benefit schemes for the old. Also giving tax advantage to old age homes with proper scrutiny periodically about running of old age homes with panel of public figures will go in long way to bring progress of indian people.
This is not a good suggestion and it is going against the young generation. Any political party has to plan for present generation and future generation. Just for avoiding outflow of funds, if the plan is there to extend retirement age to 62 years, it is laughable. Then there is no limit for upper age limit and with the present salary structure, working govt employees will be happy but seeing the unemployment figures in India, Govt will be doing injustice to the unemployed youths. Already there are lot of complaints about high salary structure with secured jobs with good pension drive manay caste and communities to grab govt jobs and award to their communities and partymen. So Congress Govt should not allow this to happen in the interest of future generation. Policies like export of iron ore, cotton etc are the blows to Indian economy as we do not attempt to make value added item exports using the base raw materials and many industies like cotton textiles mills which are giving employment to millions in India are in the process of losing export orders due to increase in price of cotton. So govt should plan long term view and not short term view. The maximum age ceiling should not go beyond 60 years. On the other hand, Govt should think of extending old age pension to orphaned ones in the society by bringing some supertax on companies so that slowly it can create social benefit schemes for the old. Also giving tax advantage to old age homes with proper scrutiny periodically about running of old age homes with panel of public figures will go in long way to bring progress of indian people.
Thursday, September 23, 2010
Free stock tips 24.09.2010
Ayodhya verdict by Allahabad High court will be delivered on 28.9.2010 instead of 24.09.2010. So market will not be affected much till such time.
Reliance industries.(Rs.998) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.
Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Cheap Energy stock. Don't miss to purchase it now thus not repenting later.
Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up.
Cairn india: Open offer will be increased soon to rs.405/- to induce all miniority share holders. So buy.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Steel and cement stocks - Buy
There is talk of another price rise by Jindal steel.All others will follow the same. Buy steel stocks including visa steel. Bulk investors can study visa steel and plan to appoint director in this growing steel gem which is growing just like tata steel.
"Visa steel"
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get it soon. Present price is Rs.38.5 Target Rs.50 within 6 months.
The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company. Promoters are managing the share price low so that no one can dare to take over. But debts will compel them to come out of shell and when they sell the stake,then real value will come out for open offer by new partner.
EIH: Buy Rs.140/-
News repot from economic times:
" EIH, owners of the Oberoi and the Trident hotel chains, will raise up to Rs 1,300 crore by selling rights shares, the company said on Thursday without disclosing the end-use of the proceeds.
In a board meeting in Bangalore, the first after Reliance Industries bought 14.8% stake in EIH last month, the company has decided the size of the rights offer. It has also formed a committee to determine the price and ratio of the offer. "
So soon open offer will come out and benefit investors. So cash in.
IFCI: Buy Rs.62.20 Target short term rs.65
Govt has appointed advisor for IFCI who will submit report before dec2010.
Currency- Buy US $ Rs.45.60
Nifty Put 6000 Buy
Reliance industries.(Rs.998) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.
Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Cheap Energy stock. Don't miss to purchase it now thus not repenting later.
Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up.
Cairn india: Open offer will be increased soon to rs.405/- to induce all miniority share holders. So buy.
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Steel and cement stocks - Buy
There is talk of another price rise by Jindal steel.All others will follow the same. Buy steel stocks including visa steel. Bulk investors can study visa steel and plan to appoint director in this growing steel gem which is growing just like tata steel.
"Visa steel"
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get it soon. Present price is Rs.38.5 Target Rs.50 within 6 months.
The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company. Promoters are managing the share price low so that no one can dare to take over. But debts will compel them to come out of shell and when they sell the stake,then real value will come out for open offer by new partner.
EIH: Buy Rs.140/-
News repot from economic times:
" EIH, owners of the Oberoi and the Trident hotel chains, will raise up to Rs 1,300 crore by selling rights shares, the company said on Thursday without disclosing the end-use of the proceeds.
In a board meeting in Bangalore, the first after Reliance Industries bought 14.8% stake in EIH last month, the company has decided the size of the rights offer. It has also formed a committee to determine the price and ratio of the offer. "
So soon open offer will come out and benefit investors. So cash in.
IFCI: Buy Rs.62.20 Target short term rs.65
Govt has appointed advisor for IFCI who will submit report before dec2010.
Currency- Buy US $ Rs.45.60
Nifty Put 6000 Buy
Wednesday, September 22, 2010
Free stock market tips 23.09.2010
East India hotels Buy (Rs.140/-) Target Rs.160/-.
Buy as per my previous recommendation
Buy L&T and BHEL
Today cabinet committee will decide about imposing duty on imported power equipment. The imported power equipments from China is cheaper by nearly 15% over domestic price. In order to bridge the gap and to award contracts for mega and super mega power projects in India, cabinet may favour levy of
a 10 per cent Custom duty and 4 per cent Special Additional Duty.(initial plan) This planned levy may be diluted in favour of 5 per cent Customs duty, 10 per cent countervailing duty and 4 per cent SAD on import of equipment for mega and ultra mega power projects
Buy reliance industries: Rs.1002/-Target Rs.1025/-.
Oil price will increase and growth potential is good for future due to shale gas company purchases.
Steel stocks and cement stocks: Buy . Good one as monsoon is over and construction activities are building up.
Software stocks: As usual, sell them now and wait for good time to enter. Expected growth may not materialise.
Bank stocks: overvalued. Anytime it will shatter.IFCI can be purchased as per my previous recommendation.
Buy dollar/rs currency at Rs.45.85 Oct10 futures.
It appears that nothining significant will happen in India on coming Friday though Babri Masjid court verdict by High court will come on that day. The aggrieved party will go to supreme court. Some minor incidents may happen.
Buy as per my previous recommendation
Buy L&T and BHEL
Today cabinet committee will decide about imposing duty on imported power equipment. The imported power equipments from China is cheaper by nearly 15% over domestic price. In order to bridge the gap and to award contracts for mega and super mega power projects in India, cabinet may favour levy of
a 10 per cent Custom duty and 4 per cent Special Additional Duty.(initial plan) This planned levy may be diluted in favour of 5 per cent Customs duty, 10 per cent countervailing duty and 4 per cent SAD on import of equipment for mega and ultra mega power projects
Buy reliance industries: Rs.1002/-Target Rs.1025/-.
Oil price will increase and growth potential is good for future due to shale gas company purchases.
Steel stocks and cement stocks: Buy . Good one as monsoon is over and construction activities are building up.
Software stocks: As usual, sell them now and wait for good time to enter. Expected growth may not materialise.
Bank stocks: overvalued. Anytime it will shatter.IFCI can be purchased as per my previous recommendation.
Buy dollar/rs currency at Rs.45.85 Oct10 futures.
It appears that nothining significant will happen in India on coming Friday though Babri Masjid court verdict by High court will come on that day. The aggrieved party will go to supreme court. Some minor incidents may happen.
stock tips 22.09.2010
Buy reliance industries: This is one of the stock that is not reached its potential.
Target Rs.1070
Sell bank stocks
Sell software stocks: increase in value of rupee and future business growth at cross roads make us to think to sell off software stocks and wait for good days
Steel and cement stocks appear to be good to buy.
East india hotels Good buy at Rs.138/- Target rs: 150 AGM is on 23.09.2010 (tomorrow)and right issue will be announced which may be around Rs.100.There appears to be competition between many companies to acquire shares.So reap the harvest.
Story: Oberoi family owns 32.3% in EIH.ITC holds 14.9%. Reliance industries purchased most of 14.8% stake from oberai family at the rate of Rs.184/- per share. Now tomorrow EIH will be offering rights in AGM.There may be an understanding between reliance and ITC that the latter will not subscribe to the rights issue and renounce in favour of reliance industries. This will automatically drive reliance industries to give open offer of 20% to shareholders of EIH. This is market rumour and appears to be genuine.
If any FI corner certain % of stocks, it can bargain with reliance industries.
currency : Buy doller rs. Oct 2010. present price : Rs.45.76 target Rs.46.50
Target Rs.1070
Sell bank stocks
Sell software stocks: increase in value of rupee and future business growth at cross roads make us to think to sell off software stocks and wait for good days
Steel and cement stocks appear to be good to buy.
East india hotels Good buy at Rs.138/- Target rs: 150 AGM is on 23.09.2010 (tomorrow)and right issue will be announced which may be around Rs.100.There appears to be competition between many companies to acquire shares.So reap the harvest.
Story: Oberoi family owns 32.3% in EIH.ITC holds 14.9%. Reliance industries purchased most of 14.8% stake from oberai family at the rate of Rs.184/- per share. Now tomorrow EIH will be offering rights in AGM.There may be an understanding between reliance and ITC that the latter will not subscribe to the rights issue and renounce in favour of reliance industries. This will automatically drive reliance industries to give open offer of 20% to shareholders of EIH. This is market rumour and appears to be genuine.
If any FI corner certain % of stocks, it can bargain with reliance industries.
currency : Buy doller rs. Oct 2010. present price : Rs.45.76 target Rs.46.50
Tuesday, September 21, 2010
Free stock tips 21.09.2010
Sell software stocks. Infosys is worried about spreading of ban on outsourcing to other europeon countries following suit of USA
Buy East India Hotels: Rs.140/-. Target Rs.160/-
EIH will be coming out with rights offer soon.For this special AGM is called on 23.9.2010. The rights may be between Rs. 80 to Rs.100/-.
Sell Bank stocks: Overvalued and it will crack quickly on any flimsy news.
Buy : Nifty put 5900: There is chance of market going down from Thursday
Buy : currency Oct 2010 Rs. 45.95 There is a chance of depreciation of rupee as stock market is expected to fall to some extent by 200 points.
Buy: Visa steel (Rs.39.50): good steel stock. It is a candidate for take over slowly by steel barons like mittals . It is a profit giving and growth oriented share. Due to huge capital outgo in building up production of various steel products , its debt is high. But due to increased sales, increased demand and increased price, it can shine. It is a golden share according to me. Stainless steel production also in the cards soon. Targe Rs.50 within 6 months and Rs.70 within a year if the present demand for steel keeps up globally. Borosteel also will help to boost its profitability.
Cement stock: Buy Binani cement:(Rs.80) Target Rs.88/-
Due to hardening of cement price and also reduction of equity capital due to buy back and also PE ratio to the revised equity capital is lowest among cement stocks, this needs attention of equity shareholders.
Buy East India Hotels: Rs.140/-. Target Rs.160/-
EIH will be coming out with rights offer soon.For this special AGM is called on 23.9.2010. The rights may be between Rs. 80 to Rs.100/-.
Sell Bank stocks: Overvalued and it will crack quickly on any flimsy news.
Buy : Nifty put 5900: There is chance of market going down from Thursday
Buy : currency Oct 2010 Rs. 45.95 There is a chance of depreciation of rupee as stock market is expected to fall to some extent by 200 points.
Buy: Visa steel (Rs.39.50): good steel stock. It is a candidate for take over slowly by steel barons like mittals . It is a profit giving and growth oriented share. Due to huge capital outgo in building up production of various steel products , its debt is high. But due to increased sales, increased demand and increased price, it can shine. It is a golden share according to me. Stainless steel production also in the cards soon. Targe Rs.50 within 6 months and Rs.70 within a year if the present demand for steel keeps up globally. Borosteel also will help to boost its profitability.
Cement stock: Buy Binani cement:(Rs.80) Target Rs.88/-
Due to hardening of cement price and also reduction of equity capital due to buy back and also PE ratio to the revised equity capital is lowest among cement stocks, this needs attention of equity shareholders.
Monday, September 20, 2010
free stock tips 20.09.2010
Visa Steel (Rs.39.70)Target Rs.50/-
One Golden share in steel segment can be grabbed.Though it is debt ridden, it has good inherent value and growth. It is a profit giving company . Now in every quarter, the growth will be definitely high due to its growth plan and achievement. Increase in price of steel since this year start will help the company to improve its bottom.Any institution/FI/PEs can eye on this company slowly so that at throw away price, control can be achieved. It has applied fofor mining lease also and it will get mines once the new mining legislation is enacted. Grab this at this stage. Very soon stainless steel prodn also will be started.
Now Indian market is overheated. Investors advised to exercise caution.
Since on coming Friday, High court decision is going to come on Babri Masjid case, there may be chance of stock market coming down.
Sell software stocks as slowly other nations also started looking into options for banning outsourcing.
One Golden share in steel segment can be grabbed.Though it is debt ridden, it has good inherent value and growth. It is a profit giving company . Now in every quarter, the growth will be definitely high due to its growth plan and achievement. Increase in price of steel since this year start will help the company to improve its bottom.Any institution/FI/PEs can eye on this company slowly so that at throw away price, control can be achieved. It has applied fofor mining lease also and it will get mines once the new mining legislation is enacted. Grab this at this stage. Very soon stainless steel prodn also will be started.
Now Indian market is overheated. Investors advised to exercise caution.
Since on coming Friday, High court decision is going to come on Babri Masjid case, there may be chance of stock market coming down.
Sell software stocks as slowly other nations also started looking into options for banning outsourcing.
Saturday, September 18, 2010
free stock tips for indian market 20.09.2010
Buy Binani cements: Rs.81 Target Rs.85
Since equity base is reduced due to buy back offer and consequentially its EPS has increased and also hardening of cement price invite us to invest in this stock at this price.
Buy Moser Bayer:
price Rs.65 Target Rs.68:
Dividend is due within a week. So anyone wants taxfree income can purchase moser bayer.
Buy IFCI:(Rs.60/-)
Govt is going to appoint one advisor for suggestions for improvement in IFCI and also give recommendations for making it as a bank. He has to submit the report within Dec10. So investor can buy for a short term target of Rs.70/- and a long term target of Rs.100/-.
Buy steel stocks
There are talks going on for increasing price of flat steel by Oct 2010.
Also Prices of domestic galvanised steel products are likely to rise by another Rs 500-1,000 per tonne over the next two-months on the back of a growing demand and rise in input prices, Uttam Galva Steel said today.
"As compared to the global markets, domestic prices are very low. Hence, we expect prices here to increase by Rs 500-1,000 per tonne over the next two-months. This is due to the rise in zinc prices as also in domestic demand," Uttam Galva Steel's Director (Commercial), Ankit Miglani, told reporters after the company's annual general meeting here.
News item in business standared.
Sell Textile, leather stocks:
News item states:
Govt slashes duty refund rates for exports by up to 30%
NEW DELHI: In a set back to exporters in sectors like leather, textiles and sports, the government on Saturday decided to reduce duty drawbacks - tax refund - by up to 30 per cent.
The new rates will be effective from September 20, the Central Board of Excise and Customs (CBEC) said in a notification.
Duty drawback - refund of import duties on raw materials used in exports - for cotton garments has been reduced to 7.5 per cent against the present rate of 8.8 per cent.
For blended garments - containing cotton and manmade fibre, the revised drawback rate is 8.6 per cent, down from 9.8 per cent.
“The drawback rates have been determined on the basis of certain broad parameters, like the prevailing prices of inputs...and the incidence of service tax,” the CBEC said.
Since equity base is reduced due to buy back offer and consequentially its EPS has increased and also hardening of cement price invite us to invest in this stock at this price.
Buy Moser Bayer:
price Rs.65 Target Rs.68:
Dividend is due within a week. So anyone wants taxfree income can purchase moser bayer.
Buy IFCI:(Rs.60/-)
Govt is going to appoint one advisor for suggestions for improvement in IFCI and also give recommendations for making it as a bank. He has to submit the report within Dec10. So investor can buy for a short term target of Rs.70/- and a long term target of Rs.100/-.
Buy steel stocks
There are talks going on for increasing price of flat steel by Oct 2010.
Also Prices of domestic galvanised steel products are likely to rise by another Rs 500-1,000 per tonne over the next two-months on the back of a growing demand and rise in input prices, Uttam Galva Steel said today.
"As compared to the global markets, domestic prices are very low. Hence, we expect prices here to increase by Rs 500-1,000 per tonne over the next two-months. This is due to the rise in zinc prices as also in domestic demand," Uttam Galva Steel's Director (Commercial), Ankit Miglani, told reporters after the company's annual general meeting here.
News item in business standared.
Sell Textile, leather stocks:
News item states:
Govt slashes duty refund rates for exports by up to 30%
NEW DELHI: In a set back to exporters in sectors like leather, textiles and sports, the government on Saturday decided to reduce duty drawbacks - tax refund - by up to 30 per cent.
The new rates will be effective from September 20, the Central Board of Excise and Customs (CBEC) said in a notification.
Duty drawback - refund of import duties on raw materials used in exports - for cotton garments has been reduced to 7.5 per cent against the present rate of 8.8 per cent.
For blended garments - containing cotton and manmade fibre, the revised drawback rate is 8.6 per cent, down from 9.8 per cent.
“The drawback rates have been determined on the basis of certain broad parameters, like the prevailing prices of inputs...and the incidence of service tax,” the CBEC said.
Friday, September 17, 2010
Good useful finance articles
Readers of this site are requested to visit my site at ramadvice dot wordpress dot com also for seeing good finance articles. Also don't fail to see all the blogs in the said site.
free stock tips 17.09.2010
Buy Reliance industries: Target 1050
Good one taking note of its approach to its growth.
Sell bank stocks: overvalued. Cautions investors
Buy : IFCI Target Rs. 80/- in long run.
Good one taking note of its approach to its growth.
Sell bank stocks: overvalued. Cautions investors
Buy : IFCI Target Rs. 80/- in long run.
Thursday, September 16, 2010
supplementary stock tips 16.09.2010
Wait before putting money on cairn india at the current rate of Rs.336/-.
The open offer is yet to be confirmed.The present open offer is only Rs.355/-.
One news items states
"Analysts say, even if the price offered to minority shareholders is increased to Rs 405 per share and all minority shares including Petronas’ 14.94% are tendered in the open offer, the average price would work out to Rs 343, with 20% of shares tendered at Rs 405 and the remaining 17.36% being held at Rs 272"
The open offer is yet to be confirmed.The present open offer is only Rs.355/-.
One news items states
"Analysts say, even if the price offered to minority shareholders is increased to Rs 405 per share and all minority shares including Petronas’ 14.94% are tendered in the open offer, the average price would work out to Rs 343, with 20% of shares tendered at Rs 405 and the remaining 17.36% being held at Rs 272"
supplimentary recommendation 16.9.2010
Buy IFCI (Rs.60.20) Target Rs.80
There is every possibility of IFCI become bank soon. So buy it at current price and keep it for a period of 6 months to 1 year.
When anyone looks the PE ratio of banks, investor can understand the strength in IFCI stock. It will flare up once IFCI is given licence by Indian govt and it is likely.
There is every possibility of IFCI become bank soon. So buy it at current price and keep it for a period of 6 months to 1 year.
When anyone looks the PE ratio of banks, investor can understand the strength in IFCI stock. It will flare up once IFCI is given licence by Indian govt and it is likely.
Free stock tips- Indian markets- 16.09.2010
Tata Steel: Rs.604/- Target Rs.650/-.
Good Management logistics for having completed almost cover for raw material supply for Indian operations and slowly now covering supplies to Corus group. With Teeside is on the way out and South African unit is going thumps up, there is lot of steam in Tata steel. This is the fourth largest steel producer in the world . Again there is talk of increasing the price of certain types of steel
Excerpts from interview of MD of Monnet Ispat (Financial express)
“Q: What is the demand acceptance or resistance to this price hike and how much can you go? At what point will the landed price become a rival?
A: If you see the overall industry as such—the steel industry remains to be on a very sound footing. India is growing rapidly and it is the India story for the next probably one or two decades. There is a lot of steel consumption and the steel consumption is going to increase rapidly as well. But this is just a very temporary kind of a thing where monsoons have just set in and for strange reasons—nobody is really been able to put a finger on as to why the demand suddenly fell after April.
But, yes, it has been a little muted but we are very confident because overall the industry looks on a very sound footing and form October onwards we see steel prices going up by at least 10% from where they are today and cost not going up further because I think that’s gone up enough. Therefore, the steel makers will continue to enjoy decent and good margins.
Q: What is the landed price of steel for the product that you are making? Is the difference wide enough for you to go ahead and hike and not expect people to turn to importers?
A: Yes, that’s what I meant. From now up to October if we increase about 7% to 10% I think that’s the margin we are looking at. I think we will be able to push that much without losing.”
2. Bank shares:
It is better to quit bank shares for the time being. They are all overvalued. When any crash of market comes, bank shares will lead the fall as their rise earlier. There may be a nominal increase in repo rates which will not have any impact on the stock market. Already the advance tax of most of the banks in the quarter is not on the increase as compared to last year quarter but their share price doubled. So exercise caution. Also competition is hotting up and there will be pressure on margins.
3.Cairn India : (Rs.332) -Target Rs.340)
Cairn Energy is going to arrange for increase the open offer price to minority share holders . Open offer will be from Oct 11 to Oct 30 subject to SEBI’s approval. The present open offer is Rs.355 per share and Rs.405 to cairn energy. There is likelihood of Rs.405 for minority shareholders also. For this independent directors are appointed to look into this for satisfying minority shareholders and get maximum surrender from them.
Reliance industries: Rs.1010/- (Target Rs.1020)
Hold it. There is a talk about increasing the price of gas and proposal is submitted to Indian govt for consideration.
Good Management logistics for having completed almost cover for raw material supply for Indian operations and slowly now covering supplies to Corus group. With Teeside is on the way out and South African unit is going thumps up, there is lot of steam in Tata steel. This is the fourth largest steel producer in the world . Again there is talk of increasing the price of certain types of steel
Excerpts from interview of MD of Monnet Ispat (Financial express)
“Q: What is the demand acceptance or resistance to this price hike and how much can you go? At what point will the landed price become a rival?
A: If you see the overall industry as such—the steel industry remains to be on a very sound footing. India is growing rapidly and it is the India story for the next probably one or two decades. There is a lot of steel consumption and the steel consumption is going to increase rapidly as well. But this is just a very temporary kind of a thing where monsoons have just set in and for strange reasons—nobody is really been able to put a finger on as to why the demand suddenly fell after April.
But, yes, it has been a little muted but we are very confident because overall the industry looks on a very sound footing and form October onwards we see steel prices going up by at least 10% from where they are today and cost not going up further because I think that’s gone up enough. Therefore, the steel makers will continue to enjoy decent and good margins.
Q: What is the landed price of steel for the product that you are making? Is the difference wide enough for you to go ahead and hike and not expect people to turn to importers?
A: Yes, that’s what I meant. From now up to October if we increase about 7% to 10% I think that’s the margin we are looking at. I think we will be able to push that much without losing.”
2. Bank shares:
It is better to quit bank shares for the time being. They are all overvalued. When any crash of market comes, bank shares will lead the fall as their rise earlier. There may be a nominal increase in repo rates which will not have any impact on the stock market. Already the advance tax of most of the banks in the quarter is not on the increase as compared to last year quarter but their share price doubled. So exercise caution. Also competition is hotting up and there will be pressure on margins.
3.Cairn India : (Rs.332) -Target Rs.340)
Cairn Energy is going to arrange for increase the open offer price to minority share holders . Open offer will be from Oct 11 to Oct 30 subject to SEBI’s approval. The present open offer is Rs.355 per share and Rs.405 to cairn energy. There is likelihood of Rs.405 for minority shareholders also. For this independent directors are appointed to look into this for satisfying minority shareholders and get maximum surrender from them.
Reliance industries: Rs.1010/- (Target Rs.1020)
Hold it. There is a talk about increasing the price of gas and proposal is submitted to Indian govt for consideration.
Wednesday, September 15, 2010
free stock tips 15.09.2010
Buy Tata steel- (Rs.596/-)- Target Rs.650/-.
Reason: Tata steel strengthens its supply of raw material base. See today's news in business-standard:
Tata steel is the only stock which is yet to reach its highest stock rate quoted. Now it is slowly targetting to reach the same and it has inherent value which will be shown in the coming result seasons due to variety of good steps taken by Tata Management.
Today Business standard news:
Tata Steel ties up Canadian ore supply project
Tata Steel has decided to exercise its option of acquiring an 80 per cent interest in the direct shipping ore project of New Millennium Capital Corp, Canada (NML).
Tata will reimburse 80 per cent of NML’s cost to date on the DSO project and arrange funding up to C$300 million ('1,350 crore) of capital costs for the project. It will also commit to take all the project’s iron ore products of specified quality, at world market prices, for the life of the mining operation.
The JV will produce four million dry tonnes of iron ore products per year, commencing in 2012. Incidentally, Tata Steel has a 27.4 per cent stake in NML.
“We are pleased to take the investment decision to develop the DSO project. The project’s location, infrastructure and ore quality ensure a reliable and consistent source of supply for Tata Steel. This agreement with New Millennium is a clear demonstration of our strategy and we continue to analyse opportunities to increase the percentage of raw material security. We are hopeful that along with our partner, we would be able to move forward on various aspects of the project, including training activities, and commence construction with a view to commission the Project in 2012,” said Tata Steel’s managing director, H M Nerurkar.
“Now that we have set a course for DSO production, we can look forward to working with Tata Steel on the much larger Taconite project,” said Robert Martin, president and chief executive officer of NML.
Taconite comprises the KeMag and LabMag projects. The KeMag project — reserves of around 2.1 billion tonnes, in Canada’s Quebec province — has been included in the exclusivity agreement with Tata Steel. The LabMag project, with 3.5 billion tonnes (Labrador and Newfoundland provinces), was part of the exclusivity agreement signed in 2008; the KeMag project has now been included, too.
Tata Steel’s move to increase raw material security is aimed at buffering its European operations against volatility in the market. Its India operations have 100 per cent iron ore and 50 per cent coking coal security, while Corus, the European arm, which accounts for around 65 per cent of the group’s production capacity, has no captive mines.
Also see ramadvice dot wordpress dot com for more finance topics
2. Buy Patni computers: (Rs.442/- Target Rs.470/-. Good one and there is chance of stack sale. It is not affected by ban by Ohio state of USA.
3.Buy Ispat industries:(Rs.21.50) target Rs.25/- It may be taken over by tata steel or mittal any time. Talks are going on.
Reason: Tata steel strengthens its supply of raw material base. See today's news in business-standard:
Tata steel is the only stock which is yet to reach its highest stock rate quoted. Now it is slowly targetting to reach the same and it has inherent value which will be shown in the coming result seasons due to variety of good steps taken by Tata Management.
Today Business standard news:
Tata Steel ties up Canadian ore supply project
Tata Steel has decided to exercise its option of acquiring an 80 per cent interest in the direct shipping ore project of New Millennium Capital Corp, Canada (NML).
Tata will reimburse 80 per cent of NML’s cost to date on the DSO project and arrange funding up to C$300 million ('1,350 crore) of capital costs for the project. It will also commit to take all the project’s iron ore products of specified quality, at world market prices, for the life of the mining operation.
The JV will produce four million dry tonnes of iron ore products per year, commencing in 2012. Incidentally, Tata Steel has a 27.4 per cent stake in NML.
“We are pleased to take the investment decision to develop the DSO project. The project’s location, infrastructure and ore quality ensure a reliable and consistent source of supply for Tata Steel. This agreement with New Millennium is a clear demonstration of our strategy and we continue to analyse opportunities to increase the percentage of raw material security. We are hopeful that along with our partner, we would be able to move forward on various aspects of the project, including training activities, and commence construction with a view to commission the Project in 2012,” said Tata Steel’s managing director, H M Nerurkar.
“Now that we have set a course for DSO production, we can look forward to working with Tata Steel on the much larger Taconite project,” said Robert Martin, president and chief executive officer of NML.
Taconite comprises the KeMag and LabMag projects. The KeMag project — reserves of around 2.1 billion tonnes, in Canada’s Quebec province — has been included in the exclusivity agreement with Tata Steel. The LabMag project, with 3.5 billion tonnes (Labrador and Newfoundland provinces), was part of the exclusivity agreement signed in 2008; the KeMag project has now been included, too.
Tata Steel’s move to increase raw material security is aimed at buffering its European operations against volatility in the market. Its India operations have 100 per cent iron ore and 50 per cent coking coal security, while Corus, the European arm, which accounts for around 65 per cent of the group’s production capacity, has no captive mines.
Also see ramadvice dot wordpress dot com for more finance topics
2. Buy Patni computers: (Rs.442/- Target Rs.470/-. Good one and there is chance of stack sale. It is not affected by ban by Ohio state of USA.
3.Buy Ispat industries:(Rs.21.50) target Rs.25/- It may be taken over by tata steel or mittal any time. Talks are going on.
Thursday, September 9, 2010
Free stock tips 09/09/2010
Stay away from Bank stocks as NIM is reducing. CASA of banks also reducing and the cost
of Saving bank account is also on the rise due to compound rate of interest on daily basis.
Tata steel: Buy at Rs.580/- Target Rs.600/- in short term and Rs. 700/- in long term say 1 year.
Tata steel MD Mr.Nerurkar denied media reports that Tata Steel was considering sale of assets at its South African unit Tata Steel KZN. KZN has an annual capacity of 150,000 tonnes, produces high carbon ferrochrome and charge chrome. Tata steel wants to stabilize it further after turning the unit from loss making to profit making. Also it is in talks with various banks to raise nearly 5 billion loan to refinance debt for its unit Corus and there will not be any difficulty in getting good bargain in interest rate (LIBOR+3 to 4%).
East India Hotels: Buy for long term say within a year.
Even though ITC, which has 14.98 per cent stake in EIH, has repeatedly said it would not launch a hostile takeover, analysts believe it was a matter of time before ITC would have looked at gaining control. So there will be tug up war between two groups , reliance and ITC and stake holders of EIH will get benefit. The analysts also say that the succession plan at EIH (splitting the 46 per cent promoter stake among two sons of P R S Oberoi) would be thee opportune moment to launch an open offer for the one who attack first.
Now NIFTY may likely to fall soon and so exercise caution and choose stocks of low PE value.
of Saving bank account is also on the rise due to compound rate of interest on daily basis.
Tata steel: Buy at Rs.580/- Target Rs.600/- in short term and Rs. 700/- in long term say 1 year.
Tata steel MD Mr.Nerurkar denied media reports that Tata Steel was considering sale of assets at its South African unit Tata Steel KZN. KZN has an annual capacity of 150,000 tonnes, produces high carbon ferrochrome and charge chrome. Tata steel wants to stabilize it further after turning the unit from loss making to profit making. Also it is in talks with various banks to raise nearly 5 billion loan to refinance debt for its unit Corus and there will not be any difficulty in getting good bargain in interest rate (LIBOR+3 to 4%).
East India Hotels: Buy for long term say within a year.
Even though ITC, which has 14.98 per cent stake in EIH, has repeatedly said it would not launch a hostile takeover, analysts believe it was a matter of time before ITC would have looked at gaining control. So there will be tug up war between two groups , reliance and ITC and stake holders of EIH will get benefit. The analysts also say that the succession plan at EIH (splitting the 46 per cent promoter stake among two sons of P R S Oberoi) would be thee opportune moment to launch an open offer for the one who attack first.
Now NIFTY may likely to fall soon and so exercise caution and choose stocks of low PE value.
Wednesday, September 8, 2010
Buy Tata steel: Target Rs.600/-
Plan to sell another unit in South Africa which is profit giving. The sale price will be more than Rs. 5000 crores. Orissa unit will start from next month thus indian steel market can be captured further. Also for raw materials, adequate steps are being taken. Hence it will cross its peak 52 week high soon. It is a growth company.
Sell: reliance communication
Buy: East india hotels: Target Rs.155/-. Soon there will be tug up war between ITC and reliance industries for take over attempt
Plan to sell another unit in South Africa which is profit giving. The sale price will be more than Rs. 5000 crores. Orissa unit will start from next month thus indian steel market can be captured further. Also for raw materials, adequate steps are being taken. Hence it will cross its peak 52 week high soon. It is a growth company.
Sell: reliance communication
Buy: East india hotels: Target Rs.155/-. Soon there will be tug up war between ITC and reliance industries for take over attempt
Tuesday, September 7, 2010
free stock tips 7.8.2010
Sell- Reliance communication: with the tower asset sale being called off with GTL, RCom now has to wait for a new plan before it can reduce its staggering Rs 33,000 crore debt, which would have been reduced by over half (Rs 18,000 crore) if the tower deal would have gone through. The company’s debt increased after it paid Rs 8,585 crore towards 3G spectrum fee.
Buy Tata Steel: Target Rs.600/- With increased price rise coupled with agreement to sell Teeside will increase profitability of Tata steel. Also plan to retire high cost debt with low cost debt and increased demand in the world due to China's problem will add benefit to Corus.
Buy Tata Steel: Target Rs.600/- With increased price rise coupled with agreement to sell Teeside will increase profitability of Tata steel. Also plan to retire high cost debt with low cost debt and increased demand in the world due to China's problem will add benefit to Corus.
Monday, September 6, 2010
CENVAT for layman
Value added Tax:
This tax was brought in by States in order to avoid cascading effect of tax on the raw materials which suffered tax already earlier.
Generally in the production process, output of a manufacturer may become the input of another manufacturer. If X company purchases raw material from another company say Y for a total value of Rs.100 and the prevailing excise duty/tax rate is 10%, then the selling price of X will be Rs.110 and buying price of Y will be Rs.110/-. This raw material is value added one for Y and it will use it and when it sells in the normal course putting additional labour and material cost of Rs.90/-, the total cost including previous excise duty/tax will be Rs.200/-. When it sells , it has to include excise duty/ tax @10% i.e. Rs.20 and sell the finished product for Rs.220/-. Actual tax should be on Rs.90/- which is the raw material and labour cost additionally added and tax is only Rs.9. This is before VAT regime. In this case, the raw material of R.100 purchased from X suffered excise duty/tax at two points i.e. Rs.10+ Rs. 11. This artificially increases the end product cost and it involved no value addition . In order to avoid double taxation and to reduce the end cost to customer, VAT is brought in and Y will be given tax rebate of Rs.10 on the raw material purchased by it and used by it in value addition of end product. This is applicable only to capital goods to be sold. Proper accounts need to be kept to claim deduction under VAT. It was renamed as MODVAT (Modified value added tax) and was introduced in 1986. Later it was re-christened as CENVAT (Central value added tax) and came into force from April 2000.
Now in the above example, under CENVAT, Y can sell to ultimate buyer at the following rate.
Rs. 100 raw material cost of X+ VAT of Rs.10 on Material cost of x purchased+ Rs.90 valued added labour and material+ Rs.9 as VAT on additional labour and material= Rs.209/- instead of Rs.220/-. Y will get relief or rebate of Rs.11 on the VAT payable calculated on the total value added cost of Rs.220/- thus removing the double taxed elements from the end calculations.
As per CENVAT rules, CENVAT credit is available to all ‘final products’ and capital goods received in the factory. According to rule 3 (e) of the CENVAT Credit rules, ‘final product’ means excisable goods manufactured from input except match sticks. Input definition does not include High speed oil, Light Diesel Oil and Motor spirit.
This tax was brought in by States in order to avoid cascading effect of tax on the raw materials which suffered tax already earlier.
Generally in the production process, output of a manufacturer may become the input of another manufacturer. If X company purchases raw material from another company say Y for a total value of Rs.100 and the prevailing excise duty/tax rate is 10%, then the selling price of X will be Rs.110 and buying price of Y will be Rs.110/-. This raw material is value added one for Y and it will use it and when it sells in the normal course putting additional labour and material cost of Rs.90/-, the total cost including previous excise duty/tax will be Rs.200/-. When it sells , it has to include excise duty/ tax @10% i.e. Rs.20 and sell the finished product for Rs.220/-. Actual tax should be on Rs.90/- which is the raw material and labour cost additionally added and tax is only Rs.9. This is before VAT regime. In this case, the raw material of R.100 purchased from X suffered excise duty/tax at two points i.e. Rs.10+ Rs. 11. This artificially increases the end product cost and it involved no value addition . In order to avoid double taxation and to reduce the end cost to customer, VAT is brought in and Y will be given tax rebate of Rs.10 on the raw material purchased by it and used by it in value addition of end product. This is applicable only to capital goods to be sold. Proper accounts need to be kept to claim deduction under VAT. It was renamed as MODVAT (Modified value added tax) and was introduced in 1986. Later it was re-christened as CENVAT (Central value added tax) and came into force from April 2000.
Now in the above example, under CENVAT, Y can sell to ultimate buyer at the following rate.
Rs. 100 raw material cost of X+ VAT of Rs.10 on Material cost of x purchased+ Rs.90 valued added labour and material+ Rs.9 as VAT on additional labour and material= Rs.209/- instead of Rs.220/-. Y will get relief or rebate of Rs.11 on the VAT payable calculated on the total value added cost of Rs.220/- thus removing the double taxed elements from the end calculations.
As per CENVAT rules, CENVAT credit is available to all ‘final products’ and capital goods received in the factory. According to rule 3 (e) of the CENVAT Credit rules, ‘final product’ means excisable goods manufactured from input except match sticks. Input definition does not include High speed oil, Light Diesel Oil and Motor spirit.
Sunday, September 5, 2010
Stock Trading through mobile phone- NSE
1.National Stock Exchange is taking steps to arrange for stock trading through mobile catering to 800 NSE brokers thus indirectly covering 1.20 crore clients. This may be operational either in the middle of Sep 2010 or early Oct2010.
2. Clients can place orders, view positions and trade from anywhere in the country.
3. Trial run will be from 6th Sep 2010 and data like the best bid and ask prices of Nifty stocks, other stocks, derivatives and currencies will be made available to 50 brokers picked up randomly by computer. If successful, it will be extended to 800 active brokers and their investors from 13th Sep 2010.
4. NOW software is used for this mobile trading by NSE and it will be provided free of cost to NSE brokers first and then later on to clients of brokers. The trading will be similar to internet stock trading.
5.Brokers will be given a URL by NSE and as usual login will be there using user id and password to verify the identity of user. Similar case for clients of brokers. Brokers will have to give software to their clients for this purpose. Connectivity for cellphones will be as fast as high-speed Internet through Airtel, BSNL and Tata.
6. So stock trading is made easier one covering even rural areas where mobile phones are working and hence it will attract more investors to NSE. There is no need for internet. Those having GPRS connections also can use this facility. Thus it will cover almost 100% of mobile users.
7. Those who travel abroad also use mobile phone of any one and trade using id and password just like internet trading.
2. Clients can place orders, view positions and trade from anywhere in the country.
3. Trial run will be from 6th Sep 2010 and data like the best bid and ask prices of Nifty stocks, other stocks, derivatives and currencies will be made available to 50 brokers picked up randomly by computer. If successful, it will be extended to 800 active brokers and their investors from 13th Sep 2010.
4. NOW software is used for this mobile trading by NSE and it will be provided free of cost to NSE brokers first and then later on to clients of brokers. The trading will be similar to internet stock trading.
5.Brokers will be given a URL by NSE and as usual login will be there using user id and password to verify the identity of user. Similar case for clients of brokers. Brokers will have to give software to their clients for this purpose. Connectivity for cellphones will be as fast as high-speed Internet through Airtel, BSNL and Tata.
6. So stock trading is made easier one covering even rural areas where mobile phones are working and hence it will attract more investors to NSE. There is no need for internet. Those having GPRS connections also can use this facility. Thus it will cover almost 100% of mobile users.
7. Those who travel abroad also use mobile phone of any one and trade using id and password just like internet trading.
Activity Based costing in Service sector like banks
Activity Based Costing (ABC) is a technique for calculating the expenditure associated with the performance of group of tasks within an organization.
• Cost objects consume activities.
• Activities consume resources.
• This consumption of resources is what drives costs.
Activities know no boundaries of dept or division as some activities like loans depending on values go to higher levels for sanction. Costs increases or decreases as there are changes in the work load that affect the activity costs via their cost drivers. Work activities are triggered by events and the costs react as the effect.
Some definitions:
An Activity is defined as "a value adding process which consumes resources.
Cost driver is "an activity or factor which generates cost", for example, a cost driver could be no. of material receipts in the stores dept which is measurable or it can be a natural disaster like earth quake or electrical short-circuit fire which cannot be expected or measurable in advance. We are concerned with measurable drivers.
Resource drivers: Trace expenditures to work activities.
Activity drivers: trace work activity to cost objects.
An activity driver may be the number of times an activity is performed—transaction driver—or the length of time an activity is performed-duration driver or deep intensive operation -intensity driver.
The traditional report and activity based report are shown below(Table A & B). The General Ledger uses a chart of account whereas ABC uses a chart of activities as its language. When you translate those “chart of accounts” expenses into the “chart of activities” that consume the financial general ledger’s expenses, a manager’s insights from viewing the activity costs begin to increase. His responsibility is defined and he will take interest in showing performance.
ABC is very work-centric whereas the General Ledger is transaction-centric. The General ledger view on the traditional view describes “what was spent” whereas the activity-based view describes “what for it was spent?”
Traditional Presentation of Costs (Table A)
Dept: X
Expense Head Amt in Rs.
Direct Labour cost 2600
Direct material 100
Direct expenses 100
Indirect expenses 500
Total costs: 3300
ABC Method of presentation of costs (Table –B)
Dept: X
Departmental activities cost No. of transactions Cost /trans (actual Rs)
Sanctioning and opening loan a/cs - term loans 1000 10 100
Sanctioning and opening loan a/cs - project loans 1500 10 150
Follow up of term loans 50 10 5
Follow up of project loans 50 10 5
Transactions in term loans 300 15 20
Transactions in project loans 400 20 20
Total activity costs: 3300
The Six General Steps to Activity-Based Costing Implementation:
1. Identify Cost Centers or Strategic Business units:
First identify the cost centers or SBU of the banks or service units.
2. Identify Activities:
First we should conduct an in-depth analysis of the operating processes. Each process may consist of one or more activities required by outputs. Activities may be subdivided into tasks if need be.
Some of the activities in a savings section of a bank which is a service sector are
Opening savings account
Cash collection
Cheque collection
Cheque payment
Electronic payment
Setting up internet account access
Cheque issue,
Customer complaint/enquiry processing
Pass book updating
Activity Dictionary is to be made department wise or cost centre wise which will help mapping up all activities and to avoid any overlapping of activities. If this is supported by codes will help to prepare a software wherein all costs/revenues can be captured as a routine and for identification activity wise.
3. Assign resource costs to activities:
This is also referred to as "tracing," assigning costs to cost objects determines why costs were incurred.
4. Identify outputs:
Then we have to identify all of the outputs for which activities are performed and resources are consumed. Outputs can be products, services, or customers-persons or entities to which a bank is required to provide goods or services.
5. Assign activity costs to outputs:
We can use activity drivers to assign activity costs to outputs based on individual outputs' consumption of or demand for activities. For example, a driver may be the number of times an activity is performed—transaction driver—or the length of time an activity is performed-duration driver or intensity driver which emphasize about intensity or quality of the product.
6. Note and report un-necessary activities and unused capacity:
We can note down and report un-necessary activities which consume resources but not benefit to customers and growth of bank and also report any underutilized capacity. These can be identified when we look into facets of activities and its importance in value chain of the bank.
For activities, there is one unwritten rule i.e. “It is wise to pay heed to the “5% rule” which states that if any activity which does not account for 5% or more of the depts’s time, then it should probably be aggregated with another activity “. So in a department, there can be maximum of 20 activities.
CR Venkata Ramani AICWA
Published in ‘The Chartered Accountant “ journal by the author
• Cost objects consume activities.
• Activities consume resources.
• This consumption of resources is what drives costs.
Activities know no boundaries of dept or division as some activities like loans depending on values go to higher levels for sanction. Costs increases or decreases as there are changes in the work load that affect the activity costs via their cost drivers. Work activities are triggered by events and the costs react as the effect.
Some definitions:
An Activity is defined as "a value adding process which consumes resources.
Cost driver is "an activity or factor which generates cost", for example, a cost driver could be no. of material receipts in the stores dept which is measurable or it can be a natural disaster like earth quake or electrical short-circuit fire which cannot be expected or measurable in advance. We are concerned with measurable drivers.
Resource drivers: Trace expenditures to work activities.
Activity drivers: trace work activity to cost objects.
An activity driver may be the number of times an activity is performed—transaction driver—or the length of time an activity is performed-duration driver or deep intensive operation -intensity driver.
The traditional report and activity based report are shown below(Table A & B). The General Ledger uses a chart of account whereas ABC uses a chart of activities as its language. When you translate those “chart of accounts” expenses into the “chart of activities” that consume the financial general ledger’s expenses, a manager’s insights from viewing the activity costs begin to increase. His responsibility is defined and he will take interest in showing performance.
ABC is very work-centric whereas the General Ledger is transaction-centric. The General ledger view on the traditional view describes “what was spent” whereas the activity-based view describes “what for it was spent?”
Traditional Presentation of Costs (Table A)
Dept: X
Expense Head Amt in Rs.
Direct Labour cost 2600
Direct material 100
Direct expenses 100
Indirect expenses 500
Total costs: 3300
ABC Method of presentation of costs (Table –B)
Dept: X
Departmental activities cost No. of transactions Cost /trans (actual Rs)
Sanctioning and opening loan a/cs - term loans 1000 10 100
Sanctioning and opening loan a/cs - project loans 1500 10 150
Follow up of term loans 50 10 5
Follow up of project loans 50 10 5
Transactions in term loans 300 15 20
Transactions in project loans 400 20 20
Total activity costs: 3300
The Six General Steps to Activity-Based Costing Implementation:
1. Identify Cost Centers or Strategic Business units:
First identify the cost centers or SBU of the banks or service units.
2. Identify Activities:
First we should conduct an in-depth analysis of the operating processes. Each process may consist of one or more activities required by outputs. Activities may be subdivided into tasks if need be.
Some of the activities in a savings section of a bank which is a service sector are
Opening savings account
Cash collection
Cheque collection
Cheque payment
Electronic payment
Setting up internet account access
Cheque issue,
Customer complaint/enquiry processing
Pass book updating
Activity Dictionary is to be made department wise or cost centre wise which will help mapping up all activities and to avoid any overlapping of activities. If this is supported by codes will help to prepare a software wherein all costs/revenues can be captured as a routine and for identification activity wise.
3. Assign resource costs to activities:
This is also referred to as "tracing," assigning costs to cost objects determines why costs were incurred.
4. Identify outputs:
Then we have to identify all of the outputs for which activities are performed and resources are consumed. Outputs can be products, services, or customers-persons or entities to which a bank is required to provide goods or services.
5. Assign activity costs to outputs:
We can use activity drivers to assign activity costs to outputs based on individual outputs' consumption of or demand for activities. For example, a driver may be the number of times an activity is performed—transaction driver—or the length of time an activity is performed-duration driver or intensity driver which emphasize about intensity or quality of the product.
6. Note and report un-necessary activities and unused capacity:
We can note down and report un-necessary activities which consume resources but not benefit to customers and growth of bank and also report any underutilized capacity. These can be identified when we look into facets of activities and its importance in value chain of the bank.
For activities, there is one unwritten rule i.e. “It is wise to pay heed to the “5% rule” which states that if any activity which does not account for 5% or more of the depts’s time, then it should probably be aggregated with another activity “. So in a department, there can be maximum of 20 activities.
CR Venkata Ramani AICWA
Published in ‘The Chartered Accountant “ journal by the author
Activity Based Costing- Part I
For service companies, customer profitability is far more important than product profitability because the costs of providing a service product are usually determined by customer behavior. Take the example of a standard product like a Savings/current account. One customer may make very few deposits, withdrawals or balanced and service requests, and use only electronic channels - ATM and internet. Such a customer imposes low demands on the bank’s resources. A second customer, however, may manage her Savings/current account balance very closely, keeping only the minimum amount on hand, and make many in-person branch withdrawals and deposits. This customer’s account may be highly unprofitable under current pricing arrangements. Service companies need to identify the differential profitability of individual customers, even those using standard products. The customer almost completely determines the quantity of demands for the organization’s operating activities so, unlike manufacturing companies, the variation in demand for organizational resources is much more customer-driven than product-driven. Customer balances or sales volume are poor proxies for profitability. Small-balance customers can be quite profitable and large-balance customers can be highly unprofitable. And to complete the picture, financial service companies need to integrate information about the transfer price of funds and the cost of risk (e.g., loan loss provisions and reserves, and risk-adjusted cost of equity) when calculating individual customer profitability.
Activity based costing (ABC) helps to find out customer profitability as well as product profitability. Before going deep into it, we must know when to go in for ABC as it is slightly costly affair as compared to other traditional costing methods.
The use of volume-based allocations which is traditional one will provide fairly accurate calculated costs when the following conditions exist.
Few and very similar products and service lines
Low overhead expenses
Homogeneous processes, channels, customer demands and customers.
Very very high margins.
How many banks posses those characteristics today? Hardly any.
Five people go to a restaurant. One of them does not want to eat, he orders one cool drink. The others order cocktail drinks, a full meal and a desert. The total bill comes to Rs.5000. Whether this amount will be shared by all? If it is to be shared, then this is the surest way of losing friends. In a sense, ABC is like this. You have to put the resources in the right activity, right pocket. Otherwise, you lose customers.
In Traditional accounting, no. of transactions or volume forms the base for apportioning the total expenses among products. Transaction for a particular activity may be sizable and for another, it may not be so, for e.g., for opening a cash credit account process, activities are more but for opening one simple savings account, it is simpler on KYC basis. One activity takes much more time and effort as compared to another. So there is differential cost impact.
In another example, a machine manufactures two products. Assuming that the production volume of the two products is the same, using traditional costing methods, the cost of using the costly machine will be factored by two and assigned to the two products. However this might not be correct as one product might require more processing time in the machine than the other. Traditional costing methods always assume a relation between overhead and the production volume. It always fails to take into account the size or complexity of the product. In reality, it is not safe to assume that the manufacture volume of the finalized product is directly proportionate to the product cost as not all overheads vary with the number of units produced. With traditional costing methods, there is always a danger of one product subsidizing another.
In one more case, a company was having ten products and the advertisement and selling costs are apportioned based on volume of sales. When concerned Sales Manager was interviewed, he gave the view that he did not labour much for nearly seven products and orders were automatically coming. Out of the advertisement and selling costs budget, hardly 20% is spent on seven fast moving products. Only for three products, he was compelled to do lot of canvassing by way of advertisements, personal persuasions, and visuals etc.by spending 80% of budget for pushing up sales. In fact seven products cross-subsidizes the three products.
Another good example, we all know that most customers have a better payment history than others. Let's say ABC assessed cost to chase customer payments is Rs.10, 00,000 a year and concerned bank have 10000 customers. On traditional cost basis, the cost per customer will be Rs.100. ABC dictates that only customers who pay late cause the costs of “chasing customers for late payment”. If 90% of bank customers pay on time, then the remaining 10% alone should receive this cost, i.e. Rs.1000 per customer. Further when we go deep into the details, some customers had to be reminded many times about late payments and hence their share should have been more than Rs.1000 as compared to others. So application of traditional method which is based total number of customers and total cost of chasing the customers for payment affects customer relationship i.e. 9000 customers who do not want to pay for this activity for which they are not responsible. They will be dissatisfied with this levy though they are right in time for payment. This type of view could not be obtained through traditional costing methods.
Any sensible marketing man will not sell his product unless he recovers men, material and overhead costs along with some profit. Only in exceptional cases and market catching activities, compromise may be made temporarily on pricing. In the same way, each activity enjoyed by the customer of any firm or bank should pay for the services. Otherwise, in the long run, the firm/bank may incur losses. At least a total income from bundle or complex activities should exceed the cost of the activities though some plus and minuses are there among the activities. Hence ABC is the remedy for this complex business where overhead plays major part and customers in service sectors are demanding only complex or bundle of products nowadays.
ABC stands out from traditional costing methods especially when:
- Overhead is high,
- Products are complex
- Competition is stiff
CR Venkata Ramani AICWA
Published in ‘The Chartered Accountant “ journal by the author
Activity based costing (ABC) helps to find out customer profitability as well as product profitability. Before going deep into it, we must know when to go in for ABC as it is slightly costly affair as compared to other traditional costing methods.
The use of volume-based allocations which is traditional one will provide fairly accurate calculated costs when the following conditions exist.
Few and very similar products and service lines
Low overhead expenses
Homogeneous processes, channels, customer demands and customers.
Very very high margins.
How many banks posses those characteristics today? Hardly any.
Five people go to a restaurant. One of them does not want to eat, he orders one cool drink. The others order cocktail drinks, a full meal and a desert. The total bill comes to Rs.5000. Whether this amount will be shared by all? If it is to be shared, then this is the surest way of losing friends. In a sense, ABC is like this. You have to put the resources in the right activity, right pocket. Otherwise, you lose customers.
In Traditional accounting, no. of transactions or volume forms the base for apportioning the total expenses among products. Transaction for a particular activity may be sizable and for another, it may not be so, for e.g., for opening a cash credit account process, activities are more but for opening one simple savings account, it is simpler on KYC basis. One activity takes much more time and effort as compared to another. So there is differential cost impact.
In another example, a machine manufactures two products. Assuming that the production volume of the two products is the same, using traditional costing methods, the cost of using the costly machine will be factored by two and assigned to the two products. However this might not be correct as one product might require more processing time in the machine than the other. Traditional costing methods always assume a relation between overhead and the production volume. It always fails to take into account the size or complexity of the product. In reality, it is not safe to assume that the manufacture volume of the finalized product is directly proportionate to the product cost as not all overheads vary with the number of units produced. With traditional costing methods, there is always a danger of one product subsidizing another.
In one more case, a company was having ten products and the advertisement and selling costs are apportioned based on volume of sales. When concerned Sales Manager was interviewed, he gave the view that he did not labour much for nearly seven products and orders were automatically coming. Out of the advertisement and selling costs budget, hardly 20% is spent on seven fast moving products. Only for three products, he was compelled to do lot of canvassing by way of advertisements, personal persuasions, and visuals etc.by spending 80% of budget for pushing up sales. In fact seven products cross-subsidizes the three products.
Another good example, we all know that most customers have a better payment history than others. Let's say ABC assessed cost to chase customer payments is Rs.10, 00,000 a year and concerned bank have 10000 customers. On traditional cost basis, the cost per customer will be Rs.100. ABC dictates that only customers who pay late cause the costs of “chasing customers for late payment”. If 90% of bank customers pay on time, then the remaining 10% alone should receive this cost, i.e. Rs.1000 per customer. Further when we go deep into the details, some customers had to be reminded many times about late payments and hence their share should have been more than Rs.1000 as compared to others. So application of traditional method which is based total number of customers and total cost of chasing the customers for payment affects customer relationship i.e. 9000 customers who do not want to pay for this activity for which they are not responsible. They will be dissatisfied with this levy though they are right in time for payment. This type of view could not be obtained through traditional costing methods.
Any sensible marketing man will not sell his product unless he recovers men, material and overhead costs along with some profit. Only in exceptional cases and market catching activities, compromise may be made temporarily on pricing. In the same way, each activity enjoyed by the customer of any firm or bank should pay for the services. Otherwise, in the long run, the firm/bank may incur losses. At least a total income from bundle or complex activities should exceed the cost of the activities though some plus and minuses are there among the activities. Hence ABC is the remedy for this complex business where overhead plays major part and customers in service sectors are demanding only complex or bundle of products nowadays.
ABC stands out from traditional costing methods especially when:
- Overhead is high,
- Products are complex
- Competition is stiff
CR Venkata Ramani AICWA
Published in ‘The Chartered Accountant “ journal by the author
Lay man guide to know about finance
Definition -1
The science of the management of money in the form of cash/bank/forex and other assets and liabilities. It can of individuals or firms or company or Govt or any entity having the above.
Definition 2
Finance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance.
We are now concerned about business finance. Mostly motives of every business company are :
1. To meet the vision and mission of the company.
2. To earn reasonable return to shareholders.
3. To keep its employees capable of generating revenues and keep improving them in their efficiency by training.
4. Taking care of employee welfare.
5. To do some social benefit to society to which it belongs.
Finance plays its part in every sphere where fund is involved to achieve the above motives of the business.
Finance Functions:
1. Overseeing proper Accounts maintenance including finalization of accounts.
2. Fund management
3. Cash flow management
4. Budgetary controls.
5. Costing controls.
6. Tax matters
7. Audits.
8. Forex management.
9. Project Analysis control.
10. Pay roll accounting.
11. Asset Management
The science of the management of money in the form of cash/bank/forex and other assets and liabilities. It can of individuals or firms or company or Govt or any entity having the above.
Definition 2
Finance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance.
We are now concerned about business finance. Mostly motives of every business company are :
1. To meet the vision and mission of the company.
2. To earn reasonable return to shareholders.
3. To keep its employees capable of generating revenues and keep improving them in their efficiency by training.
4. Taking care of employee welfare.
5. To do some social benefit to society to which it belongs.
Finance plays its part in every sphere where fund is involved to achieve the above motives of the business.
Finance Functions:
1. Overseeing proper Accounts maintenance including finalization of accounts.
2. Fund management
3. Cash flow management
4. Budgetary controls.
5. Costing controls.
6. Tax matters
7. Audits.
8. Forex management.
9. Project Analysis control.
10. Pay roll accounting.
11. Asset Management
Free stock tips- supplementary -6.9.2010
Buy Tata steel: Target Rs.600/-
"Global steel production has come down to 114 million tonnes in July from a high of 124 million tonnes in May. Unlike India, steel manufacturers worldwide were not able to cope with the rise in raw material prices, particularly in the face of a demand meltdown in the last few months, said a steel company official. Production in China, the world's largest steel producer, was down 4 per cent at 51.74 million tonnes in July, when compared month-on-month as smaller steel producers shut their units due to sharp rise in raw material prices.
India's flat steel imports in July were up from June levels of 5.5 lakh tonnes to seven lakh tonnes. Data for August are expected in the coming days.
Major steel producers such as SAIL, JSW Steel, Essar Steel and Ispat have already hiked prices, while Tata Steel is expected to do so this week. The recent hike bodes well for companies as it will help them offload some high-cost inventory.The move to increase prices has been implemented even though cost of raw materials such as iron ore and coking coal have started falling and set to come down further in the December quarter due to weak demand"
Courtesy: Thehindu businessline dt 05.09.2010
Buy Cairn India
"Global steel production has come down to 114 million tonnes in July from a high of 124 million tonnes in May. Unlike India, steel manufacturers worldwide were not able to cope with the rise in raw material prices, particularly in the face of a demand meltdown in the last few months, said a steel company official. Production in China, the world's largest steel producer, was down 4 per cent at 51.74 million tonnes in July, when compared month-on-month as smaller steel producers shut their units due to sharp rise in raw material prices.
India's flat steel imports in July were up from June levels of 5.5 lakh tonnes to seven lakh tonnes. Data for August are expected in the coming days.
Major steel producers such as SAIL, JSW Steel, Essar Steel and Ispat have already hiked prices, while Tata Steel is expected to do so this week. The recent hike bodes well for companies as it will help them offload some high-cost inventory.The move to increase prices has been implemented even though cost of raw materials such as iron ore and coking coal have started falling and set to come down further in the December quarter due to weak demand"
Courtesy: Thehindu businessline dt 05.09.2010
Buy Cairn India
Saturday, September 4, 2010
New Direct Tax code - 1.4.2012
Some of the amendments in New Direct tax code which was approved by cabinet needs attention of indian tax payers. This will be applicable from 1.4.2012 instead of 1.4.2011.
1. ELSS(Equity Linked Savings Scheme), repayment of principal amount of the housing loan,NSC, term deposits with banks for 5 years or more and ULIPs would not be eligible for deduction under the Sec.80C from 1.4.2012. Only superannuation benefits like PF, pension, Life insurance policies without ULIP are eligible for deduction upto Rs.1,00,000 per year.
2.It is important to note that only life insurance policies where the premium does not exceed 5% of the capital sum assured in any year during the term of the policy would be eligible for deduction under Sec.80C.
3.Addition deduction of Rs.50,000 is allowed under sec.80c for Premium paid for health insurance policy by an individual for self, spouse, his dependent children or parents . Also, any sum paid towards tuition fee to any school, college , university, or any other educational institution situated in India for the purpose of full time education of any two children of an individual would be eligible for deduction.
4.An individual can claim deduction for interest paid on loan taken for pursuing his higher education or higher education of his spouse, child or a student under his legal guardianship.The principal loan repayment will not eligible for this rebate. Higher education means any course of study pursued after passing the senior secondary examination or its equivalent conducted by any board or university, recognised by the central or state government or any authority authorised by the government.
5.The LTA will be clubbed as a part of the income and deduction is also allowed subsequetly. The idea behind this reporting mechanism is to ascertain the amount of money an employee gets as the LTA. So far, LTAs don't reflect in either salary slips or in Form 16. After the amended DTC Rules , the LTAs will also find mention in Form 16 issued by employers.
6.The basic exemption limit for individual income tax is up from Rs 1.6 lakh to Rs 2 lakh. Thus single tax slab is suggested for male and female. The male will gain tax advantage of Rs.4000.(10% on Rs.40000). For female, tax limit is raised to 2 lakhs from 1.90 lakhs thus tax gain of Rs.1000/- (10% on Rs.10000). Also, for senior citizens above the age of 65, the basic exemption limit has been raised to Rs 2.5 lakh. For them also, the limit is raised from 2.4 lakhs to 2.5 lakhs thus tax gain of Rs.1000 on Rs.10000/-.
7. No Long term capital gain tax for securities held more than a year.
8.For short term capital gains in securities, the taxes are reduced . Gains will be taxed at 50% of applicable taxes for individuals, HUF etc. So for individuals, the tax rate may be 5% for the persons in the tax slab of 10%, 10% for the persons in the tax slab of 20% etc. This is against existing uniform tax rate of 15% uniformly to all categories.
8.For corporate, it will not apply and corporte have to pay at maximum rate of 30%.
9.Corporate tax is reduced from 33.22% to 30% due to abolition of surcharge and education cess. All corporate taxpayers will now be liable to MAT, including those availing of the incentives linked to investments and profits.
10.Companies can carry forward MAT credit that is equivalent to the difference between the corporate tax and the actual MAT paid for 15 years instead of current 10 years.
11.DTC Bill proposes to impose a five per cent dividend distribution tax (DDT) on mutual fund houses and ULIP insurers on income distributed by them. This will reduce income to investors in mutual funds and ULIP holders slightly less amount as 5% will be deducted in advance by mutual funds and insurers on investors’ behalf. This is applicable for funds investing 65% in equity or more.
12.For rest of the schemes like debt oriented etc the tax will be applicable rates rather than 5% and it will be heavy. In these cases, TDS will be 10%.
13.Annual value for house property will be actual rent received and not notional rental value. For deductions under rented house under house property, only 20% of annual value will be given as rebate for repairs instead of 30%.
14.The wealth tax rate of 1% is now applicable for assets above Rs 1 crore. Earlier, this rate was applicable on assets above Rs 30 lakh. Earlier, any cash holding above Rs 50,000 was considered as part of wealthand new code proposes to increase it to Rs 2 lakh. Deposits in banks abroad are also going to be a part of wealth . Also, watches, art and painting have been brought under wealth tax net.
1. ELSS(Equity Linked Savings Scheme), repayment of principal amount of the housing loan,NSC, term deposits with banks for 5 years or more and ULIPs would not be eligible for deduction under the Sec.80C from 1.4.2012. Only superannuation benefits like PF, pension, Life insurance policies without ULIP are eligible for deduction upto Rs.1,00,000 per year.
2.It is important to note that only life insurance policies where the premium does not exceed 5% of the capital sum assured in any year during the term of the policy would be eligible for deduction under Sec.80C.
3.Addition deduction of Rs.50,000 is allowed under sec.80c for Premium paid for health insurance policy by an individual for self, spouse, his dependent children or parents . Also, any sum paid towards tuition fee to any school, college , university, or any other educational institution situated in India for the purpose of full time education of any two children of an individual would be eligible for deduction.
4.An individual can claim deduction for interest paid on loan taken for pursuing his higher education or higher education of his spouse, child or a student under his legal guardianship.The principal loan repayment will not eligible for this rebate. Higher education means any course of study pursued after passing the senior secondary examination or its equivalent conducted by any board or university, recognised by the central or state government or any authority authorised by the government.
5.The LTA will be clubbed as a part of the income and deduction is also allowed subsequetly. The idea behind this reporting mechanism is to ascertain the amount of money an employee gets as the LTA. So far, LTAs don't reflect in either salary slips or in Form 16. After the amended DTC Rules , the LTAs will also find mention in Form 16 issued by employers.
6.The basic exemption limit for individual income tax is up from Rs 1.6 lakh to Rs 2 lakh. Thus single tax slab is suggested for male and female. The male will gain tax advantage of Rs.4000.(10% on Rs.40000). For female, tax limit is raised to 2 lakhs from 1.90 lakhs thus tax gain of Rs.1000/- (10% on Rs.10000). Also, for senior citizens above the age of 65, the basic exemption limit has been raised to Rs 2.5 lakh. For them also, the limit is raised from 2.4 lakhs to 2.5 lakhs thus tax gain of Rs.1000 on Rs.10000/-.
7. No Long term capital gain tax for securities held more than a year.
8.For short term capital gains in securities, the taxes are reduced . Gains will be taxed at 50% of applicable taxes for individuals, HUF etc. So for individuals, the tax rate may be 5% for the persons in the tax slab of 10%, 10% for the persons in the tax slab of 20% etc. This is against existing uniform tax rate of 15% uniformly to all categories.
8.For corporate, it will not apply and corporte have to pay at maximum rate of 30%.
9.Corporate tax is reduced from 33.22% to 30% due to abolition of surcharge and education cess. All corporate taxpayers will now be liable to MAT, including those availing of the incentives linked to investments and profits.
10.Companies can carry forward MAT credit that is equivalent to the difference between the corporate tax and the actual MAT paid for 15 years instead of current 10 years.
11.DTC Bill proposes to impose a five per cent dividend distribution tax (DDT) on mutual fund houses and ULIP insurers on income distributed by them. This will reduce income to investors in mutual funds and ULIP holders slightly less amount as 5% will be deducted in advance by mutual funds and insurers on investors’ behalf. This is applicable for funds investing 65% in equity or more.
12.For rest of the schemes like debt oriented etc the tax will be applicable rates rather than 5% and it will be heavy. In these cases, TDS will be 10%.
13.Annual value for house property will be actual rent received and not notional rental value. For deductions under rented house under house property, only 20% of annual value will be given as rebate for repairs instead of 30%.
14.The wealth tax rate of 1% is now applicable for assets above Rs 1 crore. Earlier, this rate was applicable on assets above Rs 30 lakh. Earlier, any cash holding above Rs 50,000 was considered as part of wealthand new code proposes to increase it to Rs 2 lakh. Deposits in banks abroad are also going to be a part of wealth . Also, watches, art and painting have been brought under wealth tax net.
Recovery agents- Banks- lay man guide
Banks are using recovery agents now to recover loans timely from bank customers. Their commission is depending upon the recovery of loans and hence they use lethaland uncivilised ways to collect loans.Antisocial elements on behalf of recovery agents for banks make life hell for people with untimely visits and abusive phone calls. Based on complaints from cutomers, RBI has framed certain guidelines in respect of recovery agents.
1.The bank will initiate the recovery proceedings only after inorming the borrower in writing . This is as per the code of commitment.
2.The agents are supposed to contact the customer at a specified place of his/her choice and are duty bound to interact in a ‘civil manner’.
3.Also the recovery agent can make calls or visits only between 7 am and 7 pm. and should not disturb in the night.
If recovery agent is not following these guidelines, the bank customer can complain to bank in writing about recovery agent and if no respite is coming, then he can go to ombudsmen for claiming damage.
1.The bank will initiate the recovery proceedings only after inorming the borrower in writing . This is as per the code of commitment.
2.The agents are supposed to contact the customer at a specified place of his/her choice and are duty bound to interact in a ‘civil manner’.
3.Also the recovery agent can make calls or visits only between 7 am and 7 pm. and should not disturb in the night.
If recovery agent is not following these guidelines, the bank customer can complain to bank in writing about recovery agent and if no respite is coming, then he can go to ombudsmen for claiming damage.
Bank competition-CASA War-IDBI shows the way
IDBI decided to do away with minimum deposit for CASA (current and savings accounts) accounts and it is a welcome move. "RM Malla, CMD of the bank said the move is aimed at improving low-cost deposits (savings and current account) which stand at 14% — probably lowest in the industry. IDBI has a low share of retail deposits as a large part of its balance sheet originated from the erstwhile Industrial Development Bank of India, which relied largely on wholesale funds. Until now, IDBI was charging depositors fees in the range of `100 to `200 if the quarterly average balance fell below `5,000 for SB accounts and Rs.10000 for Current account.
Banks should realise that they need funds at minimum rates so that they can lend to others at higher rate and manage their expenses and profit within that margin of difference. But forgetting this, many banks started charging various fees on savings and current account holders in order to earn fee income which is slowly more than the interest income. This is a not a good sign. The banks should encourage savings so that they can lend it to others and earn margins. Slowly the money is going to share market and also to big companies in the form of loans and debentures. In order to stop this exodus, the banks should evolve ways to attract CASA. In olden days, banks used to give employment to the kith and kin of big depositors in order to allure them to have big deposits thus making them profitable.Demand drafts are issued at par. Now the reverse tendency is going on. For flimsy reasons, fees are charged on customers. IDBI has come out of this shell and declared that there will not be bank charge for not maintaining any minimum deposit. A good and sensible move. CASA is the cheapest source of funds for banks and they should strive hard to get more so that they can have sizable funds at their disposal for lending. Now very soon, funds will be a problem and banks should foresee this and plan now itself. Due to computers, manpower costs have come down heavily and there is no reason for any flimsy charges on CASA holders.
Banks should realise that they need funds at minimum rates so that they can lend to others at higher rate and manage their expenses and profit within that margin of difference. But forgetting this, many banks started charging various fees on savings and current account holders in order to earn fee income which is slowly more than the interest income. This is a not a good sign. The banks should encourage savings so that they can lend it to others and earn margins. Slowly the money is going to share market and also to big companies in the form of loans and debentures. In order to stop this exodus, the banks should evolve ways to attract CASA. In olden days, banks used to give employment to the kith and kin of big depositors in order to allure them to have big deposits thus making them profitable.Demand drafts are issued at par. Now the reverse tendency is going on. For flimsy reasons, fees are charged on customers. IDBI has come out of this shell and declared that there will not be bank charge for not maintaining any minimum deposit. A good and sensible move. CASA is the cheapest source of funds for banks and they should strive hard to get more so that they can have sizable funds at their disposal for lending. Now very soon, funds will be a problem and banks should foresee this and plan now itself. Due to computers, manpower costs have come down heavily and there is no reason for any flimsy charges on CASA holders.
Sales Drive- success
It is the right time for firms like Tata , reliance etc. not to charge any initial charges for internet pen drives for laptops. Tata is charging Rs.2500/- and reliance is also charging the same amount. This initial amount is not liked by the customers and hence the sales is not that much expected.
In order to increase their sphere of sales and catch up new customers especially homes , the above companies should come with the sales idea just like cable operators like airtel, sun, tata etc. are doing. They should not charge any amount for installation of internet stick and usage of it. If they forego this amount of Rs.2500 or so which is initial amount, they can get continuous revenue of Rs.500 or more depending upon the user's requirement of speed and download. This will tempt laptop users to purchase this on large numbers. This will increase the usage of company capacity to large extent thus increasing the reveneus. The companies can say that customers can pay the amount of scheme , say, Rs.750/- initially or at the most they can add Rs.25 every month as rent for usage of internet pen drive like Tata photon etc.
Will companies listen??
In order to increase their sphere of sales and catch up new customers especially homes , the above companies should come with the sales idea just like cable operators like airtel, sun, tata etc. are doing. They should not charge any amount for installation of internet stick and usage of it. If they forego this amount of Rs.2500 or so which is initial amount, they can get continuous revenue of Rs.500 or more depending upon the user's requirement of speed and download. This will tempt laptop users to purchase this on large numbers. This will increase the usage of company capacity to large extent thus increasing the reveneus. The companies can say that customers can pay the amount of scheme , say, Rs.750/- initially or at the most they can add Rs.25 every month as rent for usage of internet pen drive like Tata photon etc.
Will companies listen??
free stock tips on 6.9.2010
Sell suger stocks- Centre is not agreeable for suger decontrol. It will refer the issue to states. States will not accept it as they may be in trouble in times of price rise and they have to purchase from outside.
Reliance indus: Buy at this rate as oil price is likely to increase.
Metals may shine.
Bank stocks overvalued and investors have to exercise caution.
Reliance indus: Buy at this rate as oil price is likely to increase.
Metals may shine.
Bank stocks overvalued and investors have to exercise caution.
Wednesday, September 1, 2010
stock tips today 01-09-2010
Buy tata steel- There is talk of steel price increase
Buy suzlon- There is a talk of stake sale to third parties to tide over fund problems and open offer likely
Buy Patni computers- Now investors who invested for getting tax free dividend have sold their stock after dividend date.Now it will increase
sell bank stocks which are overvalued.
Buy suzlon- There is a talk of stake sale to third parties to tide over fund problems and open offer likely
Buy Patni computers- Now investors who invested for getting tax free dividend have sold their stock after dividend date.Now it will increase
sell bank stocks which are overvalued.
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