Market Snapshot for April Series –

 April series ended with marginal negative of 0.12%

As expected April series followed trend of February series, settled in negative territory with marginal loss of 6.3 points or 0.12% to 5,254 and 13 out of 22 trading sessions FIIs were net buyers to the tune of Rs 6,637 crore.

Rollover– Overall rollover cost for April series was negative 

By observing lower rollover in Nifty by 1081bps as compared to market wide rollover indicates traders are more confident of individual stock movement than Index. As compared to 6 month average, Nifty rollover was higher by 600bps with larger negative cost of ~17bps in today sessions. Less expired contract, higher rollover than 6 month average and marginal overall negative rollover cost indicates May series to be volatile with upward basis.  

Outlook for May Series- Earn ROI of 13.3% by selling 5,400 CE & 5,200 PE of May Series

We expect Nifty May series to trade and settle within range of 5,538-5,062 by observing the concentration in Call & Put with their premium. We would recommend traders to sell 5,400 CE & 5,200 PE of May series and hold till expiry. Expected ROI on above strategy would be ~13.3% at an investment of Rs 52,000.  

Sector-wise Rollovers

Highest long Roll: Bullish Signal 

Realty (92.7%), Sugar (91.5%), Cement (91.2 %)

Highest Short Roll: Bearish Signal 

Hotels (87.8%), FMCG (82.3%)

Lowest Rollover

FMCG (82.3%), Technology (78.1%), Capital Goods (75.6%)

Stocks Rollovers (Exhibit 4-6)

Highest long Roll: Bullish Signal

GTLINFRA (95.8%), ULTRACEMCO (95.1%), FINANTECH (94.7%)

Highest Short Roll: Bearish Signal

WELGUJ (94.9%), WELGUJ (94.9%), BRFL (93.8%)

Lowest Rollover

CUMMINSIND (54.4%), NAGARCONST (59.0%), TATAMOTORS (61.9%)

 FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 90 crore with Gross buyers of Rs 3,889 crore and Gross Sellers of Rs 3,799 crore.

·         DIIs were net buyers of Rs 266 crore with Gross buyers of Rs 1,402 crore and Gross sellers of Rs 1,135 crore.

India VIX

·         Volatility for 29^th April, 2010 close at 21 which is 6.75% lower as compared to previous close, after touching an intraday high of 21.85 and low of 20.3.

Revised F&O Lot Size - NSE

List of underlying in which market lot is being revised downwards but new lot size is not a multiple of old lot size:

Thanks,

DENIP Consultants Pvt. Ltd.

List of underlying in which market lot is being revised downwards:

Thanks,

DENIP Consultants Pvt Ltd.

Below Companies Q4 results expected today:

1. Ashok Leyland.

2. Andhra Bank.

3. Bata.

4. Biocon.

5. Cadila.

6. Ceat.

7. CESC.

8. HCL Infra.

9. India Bull Real Estate.

10. ING Vysya Bank.

11. IOB.

12. KEC.

13. MRF.

14. OBC.

15. Siemens.

16. Thomas Cook.

17. Ultratech.

18. Uniphos.

19. ShilpaMedi.




Thanks,
DENIP Consultants Pvt. Ltd.

Model Portfolio Performance.

Please click on the image below to check the complete table. This is the perfomance of our Model Portfolio suggested on 19 August 2009 - 27 April 2010. Overall returns is 23%.

Thanks,

Nimesh.

Disclaimer Post applies to this blog.

India becomes seventh largest shareholder in World Bank.

India becomes seventh largest shareholder in World Bank.

India will have a larger say in the affairs of the World Bank as it has become the seventh largest shareholder in the multilateral lender with 2.91% voting rights. India has become the seventh largest shareholder in the World Bank after the Washington-based financial aid institution raised the voting share of the South Asian economic powerhouse.

China has overtaken Germany, France and the UK to become the third largest shareholder in the Bank with 4.42% voting rights. Both India and China hitherto enjoyed an identical 2.77% voting rights.

India’s shareholding in the Bank had been declining since 1970s and the trend has been reversed for the first time in a generation.

The changes announced Sunday bring about a 3.13 percentage-point shift in favour of the developing countries giving them just over 47.19 percent of the total votes, while advanced economies' share of the total falls to just under 52.81 percent.

The development committee of the World Bank, which met on 25th April in Washington, decided to increase the financial capacity of the Bank and the role of developing countries in its governance.


There is an overall shift of 3% voting share in favour of developing countries, bringing their total vote share to 47%. The change will give emerging nations more say in how the bank is run and how its funds are disbursed.

Membership of the financial institution gives certain voting rights, which are the same for all countries. But additional votes are granted depending on a country’s financial contribution to the organization.

The development committee agreed to raise the capital base of the Bank through a general capital Increase. This increase is taking place after a gap of over 30 years. There is agreement to raise the authorized capital of the Bank by $58 billion with a paid-in portion at 6% amounting to $3.5 billion.

The Bank is restricted by its Articles to restrict its total outstanding loan commitments to its total authorized capital. As a result of the increase in demand for Bank assistance, it was likely that the Bank would have reached its statutory lending limit. This would have constrained the Bank’s lending capacity and there would have been a decline in Bank assistance to countries.

The increase in its capital base, along with the capital that would flow in as a result of the realignment in shareholding, would allow the Bank to lend an additional $86 billion.

As one of the largest borrowers of the Bank, India would be able to secure additional assistance from the Bank. The enhanced lending capacity would enable India to receive additional assistance to the extent of $7-10 billion.

Member nations also agreed to raise more funds for global aid at the annual spring meeting of the World Bank and the International Monetary Fund (IMF).

The increase in shareholding of developing countries fulfils the development committee’s commitment in Istanbul in October 2009 to generate an increase of at least 3 percentage points in the voting power of developing and transition countries. The governments also approved over $90 billion in extra money for the Bank’s various arms that provide aid and capital to member countries.



Source: Economictimes, sifyfinance.

Thanks,
Nimesh.

Markets Today - 27/04/2010 - Analysed !

In April series, Nifty registered a gain of 48.7 points or 0.92% to 5,309.1 and 12 out of 20 trading sessions FIIs were net buyers to the tune of Rs 7,253 crore. 

Rollover– Average rollover cost in marginal positive zone of ~7bps 

By observing lower rollover in Nifty by 561bps as compared to market wide rollover indicates traders are more confident of individual stock movement than Index.

Nifty witnessed long roll of 42.2% with marginal positive rollover cost of ~6bps. We expect volatility to increase in next 2 trading sessions on account of lower rollover as compared to previous series.

Sector-wise Rollovers 

Highest long Roll: Bullish Signal 

Realty (64.5%), Cement (61.8%), Media (57.6%)

Highest Short Roll: Bearish Signal 

Hotels (50.4%), Capital Goods (45.9%), FMCG (40.9%)

FIIs and DIIs activity in capital market segment

·         FIIs were net sellers of Rs 164 crore with Gross buyers of Rs 2,701 crore and Gross Sellers of Rs 2,865 crore.

·         DIIs were net buyers of Rs 1 crore with Gross buyers of Rs 993 crore and Gross sellers of Rs 992 crore.

India VIX

·         Volatility for 27^th April, 2010 close at 19.8 which is marginally higher as compared to previous close, after touching an intraday high of 20.1 and low of 19.65.

Implications: Volatility maintained yesterday level of 19 and did not change much for today’s session. We maintain our view of volatility moving up to 30 levels and inverse relationship with Nifty. 

Rollover Analysis - 26th April 2010

Rollover Analysis - April Series - 26.04.2010

Market Snapshot for April Series – Consecutive third month for FIIs inflow in positive zone

In April series, Nifty registered a gain of 62.1 points or 1.2% to 5,322 and 11 out of 19 trading sessions FIIs were net buyers to the tune of Rs 6,887 crore. 

Rollover– Rollover cost in marginal positive zone 

By observing lower rollover in Nifty by 929bps as compared to market wide rollover indicates confidence missing among traders to rollover their positions in Nifty.

Nifty witnessed Long roll of 25.3% with marginal rollover of 7bps. We may see some increase in volatility for next 3 trading sessions on account of lower rollover and lack of confidence among traders. 

Sector-wise Rollovers 

Highest long Roll: Bullish Signal 

Cement (51.7%), Realty (51.3%), Finance (39.2%)

Highest Short Roll: Bearish Signal 

Hotels (38.0%), FMCG (29.3%)

Lowest Rollover

HOTELS (38.0%), FMCG (29.3%)

Stocks Rollovers 

Highest long Roll: Bullish Signal

GTL (77.3%), GLAXO (71.6%), GTLINFRA (65.9%)

Highest Short Roll: Bearish Signal

BHARATFORG (60.2%), DRREDDY (58.6%), SESAGOA (53.8%)

Lowest Rollover

CHENNPETRO (11.4%), STERLINBIO (11.5%), SUNTV (11.6%)

Thanks,

Dewang K Mehta

DENIP Consultants - www.denip.in

Launching Aditya Birla Real Estate Fund.

Aditya Birla Real Estate Fund.

Amongst the various investible asset classes that is available to an investor today, in terms of its timing and potential for significant gain, nothing can possibly parallel the opportunity afforded by Real Estate. While attached to this mail is a presentation that elaborates on the offering and relevant critical details, I would like to highlight certain salient aspects of the offering which I strongly believe will guide us to success.


Post the meltdown, Realty is one of the strongest sectors in terms of recovery and is expected to sustain this growth over the long term

Investing in this asset class today is bound to give the investor significant upside potential which may not be paralleled by any other comparable asset class/es

The fund's Investment strategy and focus will be investments in Residential realty; a sector that constitutes about 80% of the total demand potential of this industry & business

The fund's philosophy is to maximize downward protection for its investments by generally entering its investments at the stage of 'Land acquisition'

The fund's investments will be primarily in the Western & Southern zones of India, and mostly in tier I cities

The fund has at its helm an experienced team who have raised investments, deployed them and exited investments, successfully; in short, seen through a cycle successfully...

If there is any other support or information that we can provide, please do let us know. Also, we would be more than glad to meet up with you to take matters forth.

Thanks,
Nimesh.

Markets Today - 26/4/2010 - Analyzed

Market Overview

In April series, Nifty has registered a gain of 62.1 points or 1.2% to 5,322 and 11 out of 19 trading sessions FIIs were net buyers to the tune of Rs 6,887 crore. Nifty witnessed Long roll of 25.3% with marginal rollover of 7bps. We may see some increase in volatility for next 3 trading sessions on account of lower rollover and lack of confidence among traders.   

Option Analysis

•                    Call Writing: Major writing was seen at 5400CE and shedding at 5200CE indicates limited downside in April Series.  Major concentration of open interest is still observed at 5400CE strike price of 72.5 lacs shares.

•                    Put Writing: Fresh addition of open interest was observed at 5300PE strike price of 4.3 lacs shares. Major concentration of open interest is still observed at 5200PE of 99.8 lacs shares.

Implications: Call shedding and Put writing at lower levels indicates limited downside. However, by observing today activity and concentration level implies April series to settle between 5,200 at lower end and 5,300 at higher end.                         

 FIIs and DIIs activity in capital market segment

•                    FIIs were net buyers of Rs 234 crore with Gross buyers of Rs 2,121 crore and Gross Sellers of Rs 1,887 crore.

•                    DIIs were net sellers of Rs 73 crore with Gross buyers of Rs 821 crore and Gross sellers of Rs 895 crore.

India VIX

•                    Volatility for 26th April, 2010 close at 19.8 which is 2% lower as compared to previous close, after touching an intraday high of 20.85 and low of 18.85.

Implications: Volatility did not make any significant moves and is trading at current levels from past few days. We hold our positive view on Volatility and there is an inverse relationship between VIX and Nifty.

Free Financial Planning Session!! - Weekdays 6 pm - 8 pm. Saturday 10 am - 2 pm.

DENIP Launches Finalyzer (Financial Analyzer)!!

Finalyzer


Finalyzer is a product developed by DENIP Consultants Pvt. Ltd. for providing Financial Planning services to its client. Finalyzer means Financial Analyzer. In this software the client will have to answer 15 questions and on the basis of these answers a portfolio will be suggested to the client. The portfolio will consist of different instruments like Equity, MF, Insurance and Fixed Deposits. After discussing the requirements with the client and on the basis of the portfolio suggested, a complete financial plan will be developed for client.

Why Financial Planning using “Finalyzer”?

• As you ascend newer highs in your life, your aspirations and needs grow proportionately.
• These ever-increasing needs are further compounded by inflation, which depreciates the purchasing power of your hard-earned money.
• To achieve your dreams and fulfill your future obligations, you need to carefully plan your finances.
• This can be done via sound financial planning that takes into account your current and future needs, your individual risk profile and your income to chart out a roadmap to meet these anticipated needs.


Our Approach:

Our needs-based, customer-centric focus is based on three cornerstones:

• Sow and Grow – (young adult) - During this phase of your life, you build assets. You get your first job, first home, first car. In addition, you acquire familial responsibilities – you may get married and have children. Yet it is also a time when debts could begin to grow. Your first car and first home may be acquired with the help of a loan.

• Strengthen – (mid life) - At this stage of your life, your income and expenses both grow. As you get more secure in your career, your advancement could result in a larger income. But your expenses may grow too. You tend to upgrade your lifestyle. You pay for the best education that you can afford for your children, get them married and help them settle into their careers. Perhaps you also use a part of your growing income to pay off the debts incurred in the ‘Sow and Grow’ stage and the ‘Strengthen’ stage.

• Reap – Spend well, live well - (post retirement) – During your golden years, financial responsibilities to your near and dear ones could diminish. You would like to focus more on living the lifestyle you have always wanted to. You may take holidays, pursue hobbies and donate to charities that you support. Unfortunately, it is also a time when health issues could begin to catch up with you. At this stage of life you must be financially very well equipped to ensure that you can live your retirement dreams and meet your health expenses.

Our method of Financial Planning:

1. Understanding your financial needs-the first step is to understand you and your needs through detailed discussions and analysis. Our structured tools create a financial plan addressing your specific requirements.

2. Supporting informed decision-making by you–Our financial planning process lays strong emphasis on your active involvement while identifying the most appropriate financial solutions for your needs.

3. Customized and integrated approach–Our endeavor to provide consistent and structured financial planning to you is supported by an integrated approach to investments and insurance wherein specific product solutions are suggested after a comprehensive financial plan has been put in place. After creating a personalized financial plan, your needs and financial situation are regularly reviewed to suggest solutions in line with your changed circumstances.

Finalyzer Product introduction:

Our continuum of product solutions is guided by its appropriateness for our customers. A careful and thorough scrutiny is done to select the basket of investments or insurance products that endeavor to address your specific needs.

We endeavor to become your one stop financial planning shop, offering you a wide spectrum of investment and insurance solutions.

Investments: Mutual Funds, Structured Products, Portfolio Management Services, Bonds, Bank Deposits, Equity & Derivatives.
Life Insurance: Unit Linked Whole Life Plan, Unit Linked Endowment Plan, Term Return Of Premium etc.
General Insurance: Health, Travel, Home Content, Personal Accident, Auto Insurance etc.
Loans: Personal Loan, Home Loan, Education Loan, etc.


Thanks,
Nimesh.

DENIP ties up with S-Global for Traning Academy!!

We are proud to announce that we are now associated with S-Global (http://www.sglobal.org/) for conducting Trainings. Mr. Pramod Jain (Founder - S-Global) will conduct workshops in Mumbai. We will now also be conducting programmes for CFA, CA, CFP, special workshops like "Finance for everyone", "Awaken the winner in you", etc. We are thankfull to Pramod Sir for this association.

Mr. Pramod Jain is a nationally acclaimed Motivational Speaker and Corporate Trainer in the fields of Finance, International Financial Reporting Standards (IFRS), Cost Control and Cost Reduction, Strategic Business Management, Team Building, Leadership, Motivation and Human Potential Enhancement.


Mr. Jain, in all has eleven formal qualifications to his credit. It includes MBA in Finance and Marketing from Symbiosis Institute of Business Management (SIBM), Company Secretary (FCS), Cost & Management Accountant (AICWA), Post Graduate Diploma in Financial Analysis (PGDFA), Bachelor of Law (LL.B), Chartered Financial Analyst (CFA) and Chartered Accountant (ACA).

He has over 20 years' rich corporate experience at middle and senior level with Indian and multinational companies handling various aspects of Accounts, Financial Administration and Control, Company Law, Costing, Audit, Taxation, Financial Re-engineering and Corporate Restructuring.

He has authored three books on “Financial Management”, “Management Accounting” and “Financial Accounting & Control” for management institutes. And four more books, on “A Master manual on Project Finance”, “Living with Sharks, Yet Growing Joyfully”, “Finance for Managers and Non-Finance persons” and “Awaken the Winner in you” are in the process of being completed.

He has contributed numerous articles to Management Journals and presented Papers in Seminars and Conferences organised by various professional bodies such as ICAI, ICWAI, ICFAI, ICSI and Rotary International in India and abroad.

We will be coming up with a programme in month of May. Will let you all know the details of the programme soon!!

Thanks,
Nimesh.

Jaypee Infratech Ltd IPO

BRLM:Morgan Stanley/DSP Merrill Lynch/Axis Bank/Enam Securities.ICICI Securities/IDFC-SSKI/JM Financial Consultants/Kotak Mahindra Capital/SBI Capital Markets

Issue Period: April-29 to May-04, 2010

Price Band: Rs.102/- to Rs.117/-

Lot Size: 50 Equity Shares into mulitiples of 50 Equity Shares

Registrar: Karvy Computershare Private Limited

Issue Size : Rs.1650 Crores

QIB Book: 60% of Net issue size

HNI Book: 10% of Net issue size

Retail Book: 30% of Net issue size

Please do not invest in ULIPs !!

The so-called turf-war on ULIPs that SEBI and IRDA have been fighting has now taken on a life of its own. In reality, just about the least important thing is who regulates ULIPs, while the most important thing-or rather, the only important thing-is that investors understand what they are getting into and make the choices that are best for them. I find that there's a great deal of misinformation floating around about ULIPs and why exactly are so investment advisors so critical of them. ULIP proponents generally give a set of reasons which in their opinion invalidate criticism of ULIPs.

Argument: ULIP expenses have been lowered by IRDA. ULIP expenses are now down to just 3 per cent for ULIPs of up to 10 years and 2.25 per cent for longer ones. Mutual funds, by comparison, have a higher fund management charges.
Reality: The way IRDA has framed the rules, 2.25 or 3 per cent is effectively the average over the entire lifetime of a ULIP. The charges are heavily front-loaded. During the first year, these charges are as high as 40 to 70 per cent. If the customer cannot continue with a policy for any reason, then his real expenses are far higher. And as it happens, a huge proportion of policies lapse during the earlier years. The front-loading has no logic, except to enrich insurers and agents. And fund management charges being lower than mutual funds is a not a full comparison. In mutual funds, total expenses are capped at 2.25 per cent for equity funds and less for other funds. These are not comparable to the fund management charges of ULIPs because ULIP customers also pay premium allocation charges, policy administration charges, mortality charges, and for guaranteed ULIPs, guarantee charges. Comparing fund management charges alone is a joke.

Argument: ULIPs have led to a massive rise in insurance penetration in India.
Reality: Insurance means insurance, in the sense when the insured person dies, his family gets money to pay for food, rent and education. In a country with as little social security as ours, the  growth of insurance has to mean the growth in the reach and quantum of risk cover for lives. To call  a non-insurance, market risk-bearing product such as ULIP insurance and then present it as evidence of the growth of insurance is simply dishonest.

Argument: The insurance industry provides a huge amount of employment. 30 lakh people have found work through insurance.
Reality: If ULIPs were a sound financial product than this would be wonderful news. Since they are not (see above reasons), this issue is a complete red herring. It is not the responsibility of ULIP customers to provide agents employment by giving away vast proportion of their premiums as commission. If crores of people's money has to be mis-invested to provide employment for lakhs of people, then it's better for those lakhs to find some other, more productive employment.

Argument: ULIP fund flows are important for the stock market and for infrastructure development.
Reality: The same as the employment argument. It is not the responsibility of ULIP customers to buy expensive and non-transparent investment products so that the stock markets can be boosted. Wouldn't it be possible to create infrastructure if ULIPs could be made more investor friendly.

I find the last two points to be particularly dishonest. They somehow imply that if ULIPs were made more investor-friendly, then lakhs of people would immediately become unemployed and money would stop flowing into development. However, ULIP critics like myself have nothing against the concept of ULIPs. If ULIP cost is brought down and made non-front-loaded; and if transparency is enhanced to the level of other asset classes, then they would be a very good product. The fact that the ULIP's enforce gradual SIP-style investments could actually make them a superior product.

Also, do not forget the ULIP charges that are cut from an investors money so that the Insurance house can run smoothly !

Special Thanks to Value research online for write such a brilliant article !

Markets Today - 22/4/2010 - Analyzed

Market Overview

Nifty futures closed at 5265.4 at a 4 point discount to Nifty spot which closed at 5269.35

Implications: Markets giving a mixed trend some on positive and negative. Positive: Consecutive second trading sessions for strong writing at put and PCR increase across strike prices. Negative: Volatility is trading near to its historic low and futures turning into discount. Nifty futures closing at a 4 point discount.

Option Analysis

·         Call Writing: Consecutive second trading sessions towards shedding of open interest across the strike prices. Major shedding was observed at 5200CE of 15.3 lacs shares. Major concentration of open interest is still observed at 5,400CE

·         Put Writing: In today’s trading session, activity across strike prices was weak except 5,300. Fresh addition of open interest was witnessed at 5300PE of 13.8 lac shares. Major concentration of open interest is still observed at 5200PE of 90 lacs shares

Implications:  Consecutive second trading session of strong writing in put than call options and increase in PCR across all strike prices indicates market may continue its upward momentum till 5,300.

 FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 518 crore with Gross buyers of Rs 3,288 crore and Gross Sellers of Rs 2,770 crore.

·         DIIs were net buyers of Rs 181 crore with Gross buyers of Rs 1,608 crore and Gross sellers of Rs 1,426 crore.

India VIX

·         Volatility for 22^nd April, 2010 close at 20.5 which is 6.75% higher as compared to previous close, after touching an intraday high of 20.8 and low of 18.75.

Implications: Volatility from past few days has been hovering at current levels. We maintain a positive bias on the same and expect it to touch 30 odd levels and there being an inverse relationship between VIX and Nifty we recommend to go short on Nifty and long on VIX.

Thanks,

Dewang K. Mehta

DENIP Consultants - www.denip.in