Sensex

Friday, October 26, 2007

$$ DreamGains !! $$ Was It All Worth It...A One Bed Flat... A better side of an Indian professional...Pls read

As the dream of most parents I had acquired a degree in Software
Engineer and joined a company based in USA , the land of braves and
Opportunity. When I arrived in the USA ; it was as if a dream had come true.

Here at last I was in the place where I want to be. I decided I would be
Staying in this country for about Five years in which time I would have
Earned enough money! To settle down in India .

My father was a government employee and after his retirement, the only
Asset he could acquire was a decent one bedroom flat. I wanted to do some
Thing more than him. I started feeling homesick and lonely as the time
Passed. I used to call home and speak to my parents every week using
Cheap international phone cards. Two years passed, two years of Burgers at
McDonald's and pizzas and discos and 2 years watching the foreign
Exchange rate getting happy whenever the Rupee value went down.

Finally I decided to get married. Told my parents that I have only 10
Days of holidays and everything must be done within these 10 days. I got my
Ticket booked in the cheapest flight. Was jubilant and was actually
Enjoying hopping for gifts for all my friends back home. If I miss anyone
Then there will be talks. After reaching home I spent home one week going
Through all the photographs of girls and as the time was getting shorter

I was forced to select one candidate.
In-laws told me, to my surprise, that I would have to get married in 2-3
Days, as I will not get anymore holidays. After the marriage, it was time
To return to USA , after giving some money to my parents and telling the
Neighbors to look after them, we returned to USA .

My wife enjoyed this country for about two months and then she started
Feeling lonely. The frequency of calling India increased to twice in a
Week sometimes 3 times a week. Our savings started diminishing. After two more
Years we started to have kids. Two lovely kids, a boy and a girl, were
Gifted to us by the almighty. Every time I spoke to my parents, they
Asked me to come to India so that they can see their grand-children.

Every year I decide to go to India . But part work part monetary
Conditions prevented it. Years went by and visiting India was a distant dream. Then
Suddenly one day I got a message that my parents were seriously sick. I
Tried but I couldn't get any holidays and thus could not go to India . The
Next message I got was my parents had passed away and as there was no one
To do the last rights the society members had done whatever they could. I
Was depressed. My parents had passed away without seeing their grand children.

After couple more years passed away, much to my children's dislike and my
Wife's joy we returned to India to settle down. I started to look for a
Suitable property, but to my dismay my savings were short and the
Property prices had gone up during all these years. I had to return to the
USA . My wife refused to come back with me and my children refused to stay in
India. My 2 children and I returned to USA after promising my wife I
Would be back for good after two years.

Time passed by, my daughter decided to get married to an American and my
Son was happy living in USA . I decided that had enough and wound-up every
Thing and returned to India . I had just enough money to buy a decent 02
Bedroom flat in a well-developed locality. Now I am 60 years old and the
Only time I go out of the flat is for the routine visit to the nearby
Temple . My faithful wife has also left me and gone to the holy abode.

Sometimes I wondered was it worth all this? My father, even after staying
In India , had a house to his name and I too have the same nothing
More.

I lost my parents and children for just ONE EXTRA BEDROOM.
Looking out from the window I see a lot of children dancing. This damned
Cable TV has spoiled our new generation and these children are losing
their values and culture because of it.

 

I get occasional cards from my children
Asking I am alright. Well at least they remember me.

Now perhaps after I die it will be the neighbors again who will be
Performing my last rights, God Bless them. But the question still remains
'Was all this worth it?'
I am still searching for an answer...... ......... .!!!!

By an Indian SE.

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BigGains !!
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$$ DreamGains !! $$ FIIs Registration Process

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$$ DreamGains !! $$ Singapore Nifty Details

NSE vs. SGX vs. BSE


One of the most interesting features of the global securities markets in the late 1980s and early 1990s was the battle which took place between Singapore and Japan on the question who would dominate futures trading on the Japanese stock market index.

Index derivatives are purely cash settled; there is no physical settlement involving shares. Hence, an exchange anywhere in the world can trade index derivatives using any index, regardless of capital controls or the lack of connectivity to the depository. This is in contrast with trading shares, where a foreign exchange is unable to compete with an Indian exchange without access to settlement at NSDL.

The Singapore International Monetary Exchange (SIMEX) commenced trading on the Nikkei 225 index futures on 3 September 1986. Prior to this, in 1985, the index futures had started trading at the Chicago Mercantile Exchange (CME). At the time, Japanese regulators were dithering about whether or how index derivatives should trade. The Japanese regulators were fearful of cash settlement. They first permitted a physically settled index on the Kabusaki 50. This was the world's only attempt at a physically settled index derivatives product, and it failed. On 3 September 1988, exactly two years after SIMEX got started, cash--settled Nikkei 225 futures started trading at Osaka.

In the early days, Osaka and Chicago dominated the market, while SIMEX struggled along. In 1991, the regulators of Japan did SIMEX a great favour. Osaka raised margin requirements (from 9% on 23 August 1990 to 20% on 31 Jan 1991) while SIMEX cut margin requirements (going from 12% on 30 July 1990 to 9.5% on 31 Jan 1991). As of early 1992, the margin required at Osaka was 30% while SIMEX was at 14.2%. In addition, brokerage fees and transaction charges at SIMEX were lower. Within a matter of weeks, the Nikkei 225 market started moving to SIMEX, with volumes going from 4,000 to 20,000 contracts a day.

This led to a remarkable situation where a flourishing market for the Japanese index futures was to be found in Singapore. This lasted all the way to the late 1990s, when Japan started remedying these problems and the market significantly moved back to Japan.

What about India? The Singapore economy is too small to sustain a serious financial market, so Singapore's future lies in being an international financial centre. The Nikkei 225 product did a world of good for trading at SIMEX, and for the positioning of Singapore as a centre for international finance. With this market fading away, Singapore needed to look for a country with a large economy and a good chance of finding incompetent regulators.

The natural choice for this is the Indian stock market index and the dollar-rupee exchange rate. On both these, SIMEX can easily do cash--settled derivatives without requiring any cooperation from Indian authorities. Both these products have regulators in India with a conservative track-record. Hence, SIMEX, now in its new incarnation as SGX, looked at the field, which consists of the NSE-50 index, the BSE Sensex, and the Morgan Stanley, IFC and Barings indexes. They needed to choose the index which had the best chance of winning the domestic index derivatives market, so they picked Nifty. The Nifty futures started trading at NSE in June, and on SGX in September.

There are a few important differences between the Nifty product in Singapore versus that on NSE:

  • The SGX product is denominated in dollars; i.e. it is a futures on Defty, not Nifty. This means that a foreign portfolio or FDI investor directly gets currency protection when he uses the SGX product for hedging. In the case of Nifty futures, this foreign investor would need to combine a position on the Nifty futures with a position on the dollar-rupee forward market.
  • Foreign investors face a variety of hurdles in accessing the Nifty futures or the dollar-rupee forward market. The SGX product is unencumbered.
  • SGX will soon move on to options, while India's regulators are still "evaluating" how and when options trading will start.
  • The margins at SGX are lower than those found at NSE.

NSE now faces the battle of its life. SGX is a competitor with technology, branding, proven track record of high ethical standards, and managerial capability that equals or exceeds that of NSE. NSE is constrained by the speed at which India's regulators allow derivatives trading to grow, and by the speed at which India's securities firms plunge into derivatives trading. However, NSE has one great edge: monopolistic access to the great Indian retail market. India's remarkable equity market liqudity is dominated by retail trading, and until capital account convertibility comes about, this investor base cannot go to SGX. This edge will fade away as India moves towards capital account convertibility, but it will take a while for SGX terminals to be as prevalent in rural Andhra Pradesh as NSE terminals.

These developments open up one new market: arbitrage between Nifty at SGX and Nifty at NSE. As mentioned above, there is one catch in this arbitrage, which is the currency. Hence, arbitrageurs will fall into two groups: (a) those who use the dollar-rupee forward market that prevails in Hong Kong or Singapore, or (b) those who are permitted to engage in forward transactions on the dollar-rupee forward market in India under existing RBI regulations.

What does this mean for the BSE? The BSE suffers from several problems. The first is a weak product, the BSE Sensex, which delivers inferior hedging effectiveness and higher impact cost. The BSE spent many years engaging in political lobbying to block index derivatives. In this period, NSE has become strongly associated with the idea of derivatives. In this period, NSE also got a head start on systems, procedures and product design. The NSE is the largest equity market, a fact which hurts the extent to which futures on the BSE Sensex can obtain efficiency. Finally, the BSE will be sidelined in the arbitrage activities between Singapore and NSE.

The BSE Sensex has greater mind--share amongst the less sophisticated part of the market. Hence, the more knowledgeable users will initially converge on Nifty, and then there could be a catch--up for BSE as the less-knowledgeable participants come into the market.

This will be an interesting horse race. The score so far is : Nifty futures are at Rs.9 crore a day at NSE and Rs.7 crore a day at SGX. BSE Sensex futures are at roughly Rs.6 crore a day. International investors and NRIs, with an interest in hedging India risk, already know about derivatives; they will quickly start using the SGX products. The question is about Indian retail: how quickly with India's securities firms and retail investors get comfortable with using index derivatives?

I believe that this is only a question of when and not whether. India's retail users will switch from stock trading to derivatives trading, and when this happens, India will own the Indian index futures market. How fast this happens significantly depends on how fast India moves on a variety of policy questions on the spot and derivatives markets. Until these questions are resolved, I think it is quite possible to see SGX pulling ahead of NSE.




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BigGains !!
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$$ DreamGains !! $$ FW: Sharekhan Post-Market Report dated October 26, 2007

 

 

From: The Sharekhan Research Team [mailto:marketwatch@research.sharekhan.com]
Sent: 26 October 2007 15:36
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated October 26, 2007

 

 

 Sharekhan's daily newsletter

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October 26, 2007

 

Index Performance

Index

Sensex

Nifty

Open

18,823.66

5,564.25

High

19,276.45

5,716.90

Low

18,629.53

5,513.35

Today's Cls

19,243.17

5,702.30

Prev Cls

18,770.89

5,568.95

Change

472.28

133.35

% Change

2.52

2.39

 

Market Indicators

Top Movers (Group A)

Company

Price 
(Rs)

%
chg

Gainers

Engineering India 

726.35

20.00

Dredging Corporation

786.10

17.73

HMT

65.75

15.76

IndusInd Bank

94.85

14.00

Jaiprakash Associates

1,352.90

12.92

Losers

Idea Cellular

138.60

-8.82

Asian Paints

1,011.00

-6.41

Aditya Birla Nuvo

1,533.30

-4.55

Cummins India

399.55

-4.53

Ispat Industries

27.35

-4.04

Market Statistics

-

BSE

NSE

Advances

1,737

765

Declines

1,029

372

Unchanged

67

28

Volume(Nos)

42.93cr

72.48cr

 Market Commentary 

Sensex storms past 19K as capital goods rally

The Sensex closed above the 19200 mark on strong gains in capital goods, banking and PSU stocks.

Continuing on a cautious note, the market witnessed another round of selling as the Sensex lost over 141 points form the previous day's close to touch the  

 

intra-day low of 18630. However, the market recovered thereafter as brisk buying in front-line shares pushed the benchmark index to an all-time high of 19,276. Capital goods stocks led the rally after sector heavyweight Larsen and Toubro posted a whopping 73% rise in net profit from the previous quarter. Stocks also rallied as the Securities and Exchange Board of India had dispelled confusion on curbs on P-notes yesterday. The Sensex finally closed near its all-time high with a gain of 472 points at 19243, while the Nifty ended the session by adding 133 point at 5702. 

The market breadth was positive. Of the 2,833 stocks traded on the BSE, 1,737 stocks advanced, 1,029 stocks declined and 67 stocks ended unchanged. Among the sectoral indices, the BSE CG Index was the major gainer and rose 7.08% followed by the BSE PSU Index that added 3.93% and the BSE Bankex Index that gained 3.52%. However, the BSE FMCG Index shed 0.28%.

Among the major gainers, L&T jumped 12.40% at Rs3,885, SBI added 7.53% at Rs2,091, BHEL shot up by 6.35% at Rs2,435, ONGC flared up 4.12% at Rs1,160, M&M moved up 3.82% at Rs802, ICICI Bank advanced 3.81% at Rs1,190, Satyam Computer scaled up 3.68% at Rs477 and Reliance Industries surged 2.42% at Rs2,692. However, Bharti Airtel dropped 2.66% at Rs993, ITC slipped 1.42% at Rs180, HLL fell 1.34% at Rs218 and Ranbaxy shed 1.15% at Rs425.

Capital goods stocks were in the limelight today. Laxmi Machine Works flared up 14.98% to Rs3,171, Crompton Greaves rose 7.44% at Rs420 and Kalpataru Power scaled up 6.81% at Rs1,795.

Over 2.75 crore Reliance Natural Resources shares changed hands on the BSE followed by Himachal Futuristic Communication (2.05 crore shares), Reliance Petroleum (2.03 crore shares), Tata Teleservices (1.57 crore shares) and Power Grid Corporation (1.46 crore shares).

Value-wise L&T clocked a turnover of Rs433 crore followed by Reliance Petroleum (Rs404 crore), Reliance Industries (Rs363 crore), Reliance Natural Resources (Rs272 crore) and Reliance Energy (Rs265 crore).

European Indices at 16:15 IST on 26-10-2007

Index

Level

Change (pts)

Change (%)

FTSE 100

6595.80

19.50

0.30

CAC 40 Index

5756.49

-3.81

-0.07

DAX Index

7938.94

6.50

0.08

Asian Indices at close on 26-10-2007

Index

Level

Change (pts)

Change (%)

Nikkei 225

16505.63

221.46

1.36

Hang Seng

30405.22

550.73

1.84

Kospi Index

2028.06

51.31

2.60

Straits Times

3771.55

64.41

1.74

Jakarta Composite Index

2624.43

27.77

1.07

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