10 important things to analyse in an Annual Report

Listed companies come out with their reports highlighting annual performance to its shareholders. These reports are primary source of information for an investor to understand the company, sector, management views and analyse the financials.

You can get annual reports from company website under investor relation section, BSE/NSE website and will receive in post / email if you are shareholder of a company.

10 important things to analyse while reading an annual report are as follows:

1)      Vision and mission statements of the company

In this section, you will get to read vision and mission statement, values and goals of the company. These statements are general in nature. Take a look at vision and mission statements of Infosys:

Vision: "We will be a globally respected corporation."

Mission: "Strategic Partnerships for Building Tomorrow’s Enterprise."

Some companies also set a vision like “To touch revenues of Rs 5000 crore in 5 years.”

Value of the information: Low to medium (since these statements are generic in nature)

2)      Corporate information

In this section, you will get details of directors, bankers, auditors and registered and corporate office. Key things to look is designation of each board members, incase auditors are reputed they provide additional comfort to the company you are investing.

Value of the information: Medium

3)      Products overview and financial highlights in last 5 to 10 years

Get details of products being manufactured by a company, segment wise performance in last two years, key raw materials consumed, etc. Some companies publish financial highlights of 5 to 10 years in annual reports. You will get to analyse trend of revenue, earnings before interest, tax, depreciation and amortization (EBITDA), profit after tax (PAT/Net income / loss) from income (profit and loss) statement and also get a glimpse on shareholders equity, assets, debtors, liability and total debt from balance sheet over the years.  Important ratios are also presented in charts over 5 to 7 years time line.

Value of the information: Medium

4)      Director’s report

This section provides brief summary on financials, explanation of the financial results, key developments in the company. Key things to look in here are operational parameters of the company such as capacity additions, capex plan / executed during the year, order book as on financial year end, average length of stay, occupancy rates, average revenue per occupied bed, average revenue per user, etc. Terms used to discuss operation of the company varies depending on sectors so get some knowledge about industry terms or use glossary to get better insights. Read the past 3 to 5 years director report to see whether management has achieved the set revenue target over the years, whether strategies adopted over the years were favorable for company and did management able to perform during roller coaster ride of an economy. Also, look at the tone of the director report while reading annual report. Ideally, it sounds positive in good years and negative in bad years of the company performance.

Value of the information: High

5)      Management discussion and analysis (MDA)

This section provides information on trends in the industry, SWOT analysis of the company, insights on key line items of financial statements and risk factors/concerns affecting the company performance. You will get relevant information to understand the industry while reading this section. It’s appreciated to read at least 3-5 years of MDA to understand trends of the company in different economy scenario.

Value of the information: High

6)      Report on Corporate governance

This section gives insight on corporate governance followed by a company, composition of board of directors, brief background information on directors and independent directors of the company, attendance of directors in board meetings and annual general meetings, remuneration of directors, re-appointment of directors after completing the term, composition of sub-committees, etc. Key things to look here is composition of board of directors, sub committees and attendance records of directors during meetings, relate remuneration paid to directors with profits earned by the company. Analyse whether profile of independent directors match with the requirement of company as per sector of a company.

Value of the information: High

7)      Information on shares of the company

This section provides information on historical performance of share price, share holding pattern of the company, pledging of shares by promoters during the year, split of shares, bonus shares distributed, etc.

Value of the information: Medium

8)      Auditors report

This section gives information on comments by auditors on the financials of the company. You look out who are the auditors for the company and any qualifications by the auditors on internal processes. The information on change in accounting policy if any will be highlighted in this section.

Value of the information: High

9)      Financial statements

This section provides detailed information on profit and loss accounts (income statement), balance sheet as on year end, cash flow statement and schedules of the financials for two years. Analyzing numbers from this section help us to check financial health of the company. We will explain in other article key things to look in financial statements for fundamental analysis of a company.

Value of the information: High

10)   Notes to accounts

In this section you will get information on accounting policy followed by a company, depreciation method, forex losses / gains, segmental reporting, inventories, liabilities, leases, etc. It will be helpful if you read notes to account section of last 3 to 5 years. This will help to get information on any change in accounting year or accounting policy which can inflate revenues or profits of the company, trend in segmental revenues / profitability, contingent liabilities over the years, related party transactions, etc.

Value of the information: High

You may find reading an annual report is tedious exercise for the first time. However, it’s an advice to analyse at least 2 to 3 years past annual reports of a company to understand in and out about operations of the company, financials and management’s view/stand in various economic trends. A corporate and analyst presentation available on company website are useful sources of information with reading an annual report then take a decision of buy, sell or hold of stocks with your understanding.

Weekly Forecast NIFTY Spot at 7615

In our last weekly report we had mentioned that NIFTY had a target of 7707 and we were expecting profit booking to emerge from 7736. If the NIFTY were to close above 7736, the next upside target was 7862. Last week NIFY made a weekly low @ 7617 and rallied to make a weekly high @ 7728 and finally closed the week @ 7716. In the current week NIFTY has support @ 7627 - 7573 - 7483 and resistance @ 7736 - 7888 - 8060. 

In the current if NIFTY trades below 7736 and then also breaks 7627 on the down side, we can understand the market has entered into a mode of sideways - down correction. This correction can last for a minimum of 3 days or more and bring down the NIFTY to next support levels of 7573 - 7483. 

Bulls should keep a SL @ 7627 on long positions, below which profit booking is advisable. While this correction is not for short selling aggressively. However, it should be noted that this a correction in a bull market and it will be advisable to buy selectively towards the end of correction. 

Nifty Weekly Forecast NIFTY@7704

In our last weekly report we had mentioned that NIFTY was to be bought on a 2 day decline to 7423-7380, with a SL @ 7257 and target of 7707. Accordingly NIFTY posted a 3 day decline to make a weekly low @ 7405 and then rallied to make a new weekly high @ 7714 and finally closed the week @ 7704. 

In the current week NIFTY has support @ 7605 - 7485 - 7405 and resistance @ 7707 - 7736 - 7862. 

In the current truncated week, NIFTY is expected to trade with a positive bias. If the NIFTY closes above 7736, the next upside target is likely to be 7862. As we have a small 3 trading day week, followed by 2 trading holidays and also the financial year ending on 31st march, we can see some profit booking emerge around 7736 levels.

Nifty Weekly Forecast Spot 7540

In our last weekly report we had mentioned that NIFTY was likely to trade in a trading range of 7528 - 7223, for the entire week. Accordingly NIFTY traded in a weekly trading range of 7424 on the downside and 7547 on the upside and finally closing the week @ 7510. 

In the current week NIFTY has support @ 7423 - 7380 - 7223 and resistance @ 7598 - 7707 - 7800. 

In the current week, while the undercurrent of the market is expected to be strong, NIFTY can correct for 1-2 days upto 7423 - 7380, with a stop loss @ 7257 on a closing basis. If the SL of 7257 is held, NIFTY can once again rally to levels of 7707 - 7800. If the SL @ 7257 is broken NIFTY can fall down to 7223 - 7053. 

Buy on 2 day decline to 7423 - 7380, with a SL @ 7257 and target of 7707. 

INDIA’S Return On Equity FOR 25 YEARS (FROM 1991 TO 2016)

1. India is in a Low RoE Phase.

2. Looking at India’s RoE for last 25 years, we can say that we are in lull period, but we can’t say           how long this period may extend.

3. Every economic cycle contains seeds for another cycle and it goes on.  So, if today we are at 15%       ROE after some years we will be again at 20+% RoE (thereafter again at 15%).

4. Investments, generally, pay-off well only when they are made during lull period, as cost of                   Investment (CMP)      tends to be low in this phase.

5. At what price, one should Buy 15% RoE is subjective, depending on the options available to               deploy the capital, interest rate, inflation and various other things.

6. Today Equity is cheap, tomorrow it may be cheaper by another 10%, but in 5 yrs it has potenti             get priced 300% higher. As during Low RoE phase market assign low PE and in high ROE phase       market assign high PE.

NIFTY Weekly Forecast

We clearly mansion in last NIFTY forecast on 22 Th Feb that NIFTY if enable to move above 7315 then correct 250 points & its correct from 7255 to 6960.We also suggest that buy closer to 6960/80 with SL of 6850 for next target of 7400. Nifty test 6825 on budget session but close above 6980 & now near 7400. I hope you all enjoy it.

Now NIFTY at 7370 which is 23.5% Retracement & if close above that level on weekly basis then 7700 will still open.As of now 7370 can surly expected , while 7700 look a little stretched.

Expect minor deeps before weekly closing above 7370/80. Next Support near 7250/40. 

TATA STEEL Will Move Till 435 From Here ??? CMP@245 !!!

As per Monthly chart we have seen that after 2008 each & every fall TATA STEEL re test its 61.8% of Retracement from his pick level.

In 2008 TATA STEEL fall from 957(Jan 2008) to 157(Nov 2008) & again rise till 700(April 2010) which is 61.8% retracement level.

In 2011 TATA STEEL again fall from 740(April 2010) to 202(July 2013) & again rise till 580(June 2014) Which is its 61.8% of retracement level.

Now again TATA STEEL Fall From 580( July 2014) to 199(Sep 2015) & This time retracement level is 435. Notes:  contents of this message should be construed   as buy/sell/hold advise . Investment in equity shares has its own risks.  all discussions  may be taken  as educational & for information purpose.

Global cotton prices at six-year-low on fears China may offload reserves

Futures are trading at 57.41 cents, a level seen back in August 2009

international market has crashed to a level seen over six years ago and futures are now trading on ICE at around 57.41 cents. The price is lowest after August 2009. The fall is because of widespread fears of China, which has been a net big importer, will soon start selling cotton from reserves. ICE futures have fallen 10 per cent in 2 months.

"This is mainly due to the threat that China may offload its reserve cotton in the global markets. In 1999-2000 China turned net exporter after carrying reserves for prior three years and during this time the imports turned minimal during the time it exported cotton," said Prerana Desai, Vice President-Research - Agri Value Chain, Edelweiss Integrated Commodity Management Ltd. ICE cotton futures fell 16 per cent from July 2015 when international cotton season began.

The falling international prices along with lower imports by China has made India's cotton exports unviable. India has exported 44 lakh bales (170 kg each) so far and the Cotton Advisory Board under Textile Commissioner's office has estimated 70 lakh bales exports this year. At present exports to Pakistan and Bangladesh is happening due to freight advantage Indian players have which make it viable.

With falling global prices and farmers holding huge stock expecting higher demand due to lower crop have now started offloading according to trade sources. Prices in local market has fallen to Rs 33.400 per candy (356 kg each).

Edelweiss expect sthe downside to the Indian prices remain limited mainly because at lower levels demand from exporters as well as millers will increase and stop the prices from going sharply lower.

Cotton consumption data as given by the Ministry of Textiles suggest a sharp decline in Nov 2015. At 23.75 lakh bales the consumption for November 2015 was down 3% m-o-m. The cumulative January-November consumption at 277 lakh bales has slowed down to 2.7% from the earlier cumulative growth.

How Gujarat Can Avoid Textiles, Diamonds & Ceramics sectors in budget ?

In the state Budget presented in the Gujarat Assembly Tuesday, the state government gave a big push to GIFT-City project in Gandhinagar and the ailing ceramic industry in Morbi by providing necessary tax relief. It also imposed fresh taxes on luxury vehicles, industrial salt and e-commerce transactions, while fully exempting other items, like mosquito nets, sanitary napkins and adult diapers.

Presenting a Rs 245-crore surplus Budget, state Finance Minister Saurabh Patel, in the tax proposals for the year 2016-17, slashed the taxes on ceramic products. “In order to sustain the employment provided by this industry, I propose to reduce the rate of tax on ceramic products from current rate of 15 percent to five percent (including additional tax),” stated the minister, providing a relief of approximately Rs 171 crore to the sector.

Expressed relief, the ceramic industry Tuesday termed the tax reduction as its “second life”. Chunibhai Patel, secretary, Gujarat Tiles Manufacturing Association, said, “Along with the reduction of VAT to five percent, the state government has also provided relief for matters relating to C-form and pardoning of some penalties and interest. This is considered to be a very significant move by the finance department and brings relief to manufacturers in the state.”

Meanwhile, in a boost to operations at GIFT-City, Gandhinagar, a proposal has been made to exempt share brokers, who establish their registered office in GIFT-City and also operate and trade from the same place, from stamp duty payment. “We hope this announcement will encourage broking community to consider GIFT as their preferred business destination,” said Ajay Pandey, MD & Group CEO of GIFT-City.

The Budget is surprisingly silent on the diamond sector in the state where a number of units have shut down during the last one year. It mentions about Rs 500-crore allocation for the textile industry, which is also not in good shape.

The minister also exempted “frozen semen” sold in the state from the current 15 percent rate of tax. This was done to boost animal husbandry and dairy sector. Similar full-tax exemptions were also given to sanitary napkins, adult diapers, mosquito nets, pedal and cycle rickshaws, bamboo and articles made from bamboo where the current rate of tax is five percent.

However, the government went ahead and raised taxes for a few segments, including luxury cars, SUVs and two- wheeler. The tax on cars and SUV s priced more than Rs 15 lakh and two-wheeler costing more than Rs 2.5 lakh has been increased to 20 percent (including additional tax) from the earlier 15 percent. This will boost the state’s tax revenues by Rs 30 crore annually.

The state government will earn another Rs 10 crore by levying five percent tax on industrial salt. However, the biggest revenue is expected to come from sale of pan masalas — Rs 75 crore per annum — where the rate of tax has been increased from the current 15 percent to 25 percent.
An “entry tax” has also been proposed on e-commerce transactions where goods are supplied from outside the state. “This has been done to give a level-playing field to traders in the state,” Patel said. The state is expected to earn about Rs 30 crore in revenues from this tax. A bill to amend the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001, will be introduced in the current session of the Legislative Assembly.

As the Goods and Service Tax is expected to roll out soon, the state government is planning to bring in an “amnesty scheme” for recovery of tax dues under the Sales Tax Act and the Value Added Tax Act.

The government also plans to earn an additional Rs 50 crore by increasing the rate of tax to 20 percent (from the current 15 percent) on vehicles purchased by companies, firms, institutes, associations, trusts, government departments, boards, corporations, local self governments etc (except school buses, college buses, passenger buses and goods trucks). The Budget also proposes to reduce electricity duty for hotels and restaurants to 10 percent from the earlier 15 percent and to private hospitals to 15 percent from the current 25 percent.

All you wanted to know about...The Baltic Dry Index

The Baltic Dry Index is all at sea and this is making global investors edgy. The index sank like a stone, to hit an all-time low of 290 points on February 10. Baltic indices are one of the most widely watched global benchmarks and are believed to be leading indicators to everything from the state of the world economy, to the outlook for commodities.

What is it?

The Baltic indices track how much it costs to move materials by sea. There are three major indices in the group — the Baltic Dry Index which takes freight rates for bulk commodities such as coal, iron ore and grain, the Baltic Dirty Tanker Index which tracks rates for crude oil, and the Baltic Clean Tanker Index for petroleum products. These indices are published by the London-headquartered Baltic Exchange since 1985.

Why is it important?

The Baltic indices are considered leading indicators of global economic health. Most world trade, after all, still happens over the sea and by ships. So, if the Baltic indices move higher, it suggests good demand for shipping, an indicator that global trade and the economy are expected to sail along fine. But if they scrape the bottom as the Baltic Dry Index did earlier this month, it suggests anaemic global demand for goods — indicating worries on trade and economy.

The world economy is now navigating choppy waters with the mega commodity guzzler China losing steam. This has meant a meltdown in commodity prices, with exports of many nations including India taking a hit. Weak global trade is leading to pain in the Baltic Dry Index. But there’s another factor at play too — the number of ships lying idle. In the go-go days before the global financial crisis struck in late 2008, shipping companies went on an ordering binge and added aggressively to their fleet sizes. And why not - the Baltic Dry Index was at a lofty 11,800 points and seemed set to head higher. But after the party ended, all these new ships, bobbing in the waters, have left shippers high and dry. The twin whammy of weak demand and oversupply of ships has laid low the Baltic Dry Index - it has lost about 98 per cent from the peak. Ouch!

The point is, while the Baltic Indices are an indicator of global demand conditions, that’s not the only factor impacting them, ship supply dynamics matter too. So, all-time lows in the Baltic Dry Index may not be a sign of impending doom. Here it is worth noting that the Baltic Tanker Indices, both dirty and clean, have dipped far less than the Dry Index in recent months. Importing countries seem to be making the most of the crude oil decline to shore up their reserves and product supplies.

Why should I care?

Why should you not? A healthy global economy will mean better economic growth for India and better employment and income prospects for you. Commodity price swings directly decide domestic inflation rates and whether they will pinch your purse. For those of you who dabble in stocks of commodity or shipping companies which have sunk in this rout, it is the Baltic Indices that will bring advance signs of better days ahead.

The bottom line

Worried the global economy is rudderless? Watch the Baltic indices; they’ll give you direction

(This article was published in the Business Line print edition dated February 23, 2016)

Market Movement & Industry Performance

Dear all

About 10 days back we saw 25 pages  list of 52 week low, now it is around 5/6 pages, indicating that stocks are  seeking lower levels .

We discussed    few weeks back  now it flow of funds will have more importance compared to  fundamentals

Prevailing  sentiment has  created negativity  among investors thus  which may lead to lower inflow of funds     to DII, it is possible that dii funds inflow may turn   lower & pipe line of investing may get  dryer or even negative  because sentiment do overpower .

There is also fear of LTCG  period may get extended 

FII flow to remain  key factor of hope,

Tax free bonds attracting  good attn and sucking liquidity of market , NHAI  bonds rate is 7.69 %, which likely to get fairly good response on very first day it seem.

There is global slow down in demand ,   companies having higher exports  like chemicals  / textile /leather etc  one need to take due care.

Metal /steel/forging  already  facing problems .

Engineering infra facing  funding issues.

We know state of banking .

Capital good facing slow down .

Thus investors need to be very selective .

NIFTY Weekly Forcast

NIFTY weekly support @ 7125 - 6975 - 6870 and resistance @ 7325 - 7445 - 7490.
In the current week if the NIFTY is unable to move above (bear SL) 7315, by Tuesday, it can fall down by around 250 points to levels of 7128 - 6980. In this fall NIFTY can be bought near 7000, with a bull stop loss @ 6850, for a target of around 7400+.

In case NIFTY breaks below 6850, it can fall down to 6700 levels.

Time To Build Your House Not To Buy House !!

  Prices of key materials are down and labor is easily available. This may be the best time to build a house

  This is not the best time to buy a house.

Though an estimated 2.45 lakh houses are lying unsold across the country, the correc tion expected in property prices has still not happened. Interest rates too are not coming down. Even so, the dip in commodity prices means this could be the ideal time to construct a house. Prices of key construction materials that account for nearly 47% of the total construction costs have come down 6-21% in the past six quarters, bringing down the overall costs by more than 6% (see graphic). These figures are based on prices of construction material in Delhi's Burari Market between April 2014 and September 2015.

Steel accounts for the biggest chunk of the costs of construction material. Last week, the government imposed a minimum import price on steel to protect the domestic industry.

This is likely to cause a spike in steel prices which had dropped almost 18% between April 2014 and September 2015.

The other big component is cement. Cement prices have hardened in the past few months but still remain 5% below their April 2014 levels. Bricks, paints, electrical fittings and sanitaryware are also cheaper now.

Some other costs such as labour, archi tect's fee and other ancillary expenses would have obviously gone up in the past two years. Also, the ban on sand mining around Delhi has caused prices to go up.

However, given the slowdown in the real estate sector, not too many projects are taking off. This means artisans, labourers and construction equipment are easily available now. If you have already secured the land and necessary clearances for your future home, the current market conditions are perfect for you to begin executing your plan.

Can't buy in bulk There are, however, certain limitations to making the best of this opportunity.

It is not easy to find space to store building materials like cement, bricks and steel.Even if you have enough space, cement cannot be stored for extended periods of time. So, you can't buy the entire steel and cement required for construction at one go.

These will have to be purchased in small installments, according to usage.

Moreover, many items will not be immediately required.

Prices of paints, electrical fittings and tiles are down but they are needed when the structure is ready, which could be 4-6 months down the line.

By the time you need these items, their prices might have gone up.

Even so, if you have been planning to build a house, this is the best time to take the plunge. Overseeing the construction of a home is an arduous task, which is why many house owners endlessly procrastinate the decision. However, delaying the decision could mean missing out on the low construction costs.

Our calculations show that if the total cost of construction is `30 lakh, one can save close to `1.9 lakh by acting now.

Keep in mind that construction i nvo l ve s a l o t o f time-consuming pa 47% * perwork as well. Getwe ting the initial per mission from municipal authorities alone can take a few weeks. Finalising the architectural drawings and arranging for finances also take up a lot of time. So if you start now, the construction might start only two to three months later. 8%

MUTUAL FUNDS - ARE YOU INVESTING RIGHT?

Investors poured an estimated `92,000 crore into equity funds in 2015. An online survey by ET Wealth examines whether these investors have adopted the right strategies and where they might have erred

Indian equity investors, particularly those investing through mutual funds, are known to be notoriously fickle and impatient. When the stock market is fir ing on all cylinders, neat sums of money are directed into equity funds. The fascination only lasts so long as the market is moving north. A few hiccups, and the panic starts creeping in. Investments are either stopped outright or pulled out quickly. Studies have shown that around 70% of mutual fund in flows typically occur when markets are already overvalued--just 4-5% inflows happen when markets are undervalued. But, of late, a strange phenomenon has been playing out.Over the past year, there has been a drastic shift in investors' attitude towards equity mutual funds. January marked the twentyfirst consecutive month of positive net inflows into equity funds, though it was much subdued compared to previous months.While lump sum investments seem to have moderated, SIP investments continue in full swing. The industry has seen a monthly rise of around two lakh SIPs since March last year. This is despite a shaky, uncertain market environment over the past few months.Data shows that in the first eight months of 2015-16, some 35 lakh new investors put their money in mutual funds. Out of this, around 27 lakh invested in equity funds--typically a mainstay of individuals, not corporates.While the influx of money came as no surprise during the initial wave of optimism around the Modi government's ascension to power, the sustained interest after the market hit turbulent weather last year seems out of the ordinary.
ET Wealth surveyed 2,306 investors to get a sense of what is motivating them to invest.Have investors come into the market with the right perspective? Will they continue to put money into the market even if it remains weak in the coming months, or will they head for the exit? What is their approach to investments? Do they have a clear plan of action? Here we present some key findings from our survey, highlighting what investors are doing right and what requires their urgent attention.
MANY FIRST-TIME INVESTORS CAME IN PAST ONE YEAR ...
The market rally that started around the 2014 elections has drawn many inves tors to equity funds for the first time.
One of three respondents has invested in mutual funds only over the past one year. Half the respondents have admitted to putting money into equity funds only during the past three years. It is likely these investors were drawn by the promise of a sustained bull run, riding an economic recovery spurred by a government seen to be pro-reforms. Some 44% of the investors who have come in during the past three years fall in the 31-40 age bracket. Another 32% are from a younger lot, aged less than 30 years. Experts say, this behaviour is typical of any bull market. Tanwir Alam, Founder and MD, Fincart, says, “When there is so much euphoria around the stock market, many investors tend to get carried away under the fear of missing out on the rally.“ The exact opposite is also true: when there is a sense of panic in the market, investors tend to move out in droves. Ultimately, most investors end up buying high and selling low, thus getting a negative experience from their stay in the market. “If you try to ride a wave, you are likely to get in and get out at the wrong time,“ insists Suresh Sadagopan, Founder, Ladder 7 Financial Services. Nimesh Shah, MD, ICICI Prudential Mutual Fund, agrees, “Investor experience has not been good, despite the market giving great returns over time, because investors have this habit of trying to time the market.“ Experts hope that the new entrants will not repeat these mistakes, and stay invested to reap the benefits of long-term investments.
... BUT EXPOSURE TO EQUITIES REMAINS LOW
Although the number of people investing in equity funds has been rising, the portfolio of the average investor continues to be woefully short on exposure to equities. Our survey shows that 331 investors have less than 10% allocation to equities in their portfolio. Some have zero allocation to this asset class. On digging deeper, we found that investors have not aligned their investments with time horizons. Out of the 1,338 investors who are salting away money for goals more than five years away, 341 have put in less than 10% of their savings into equities. These investors are only likely to realise much later that the corpus they have generated is insufficient to fund their goals. Clearly, this is an area where investors need to make changes. Experts insist that investors need to increase the exposure to equities to capture the longterm wealth generating potential of this asset class. Alam asserts, “The power of compounding may not be visible in the initial years of the investment. It is only later that the magic becomes tangible.“

MOST INVESTORS DO THEIR OWN RESEARCH ...
Investors, it appears, no longer require handholding to pick investments. Now adays they prefer to do their homework to identify mutual fund investment op tions. Three out of every five respondents claim to do their own research to pick a mutual fund than take advise from others.Interestingly, only one in five investors has taken a financial advisor's help to build a fund portfolio. Alam says, “Many investors today want more control in their hands. Besides, increased awareness and knowledge has led to investors make informed decisions.“ But, what are these `do-it-yourself' investors basing their decision on? Is it the fund's rating or the fund manager's reputation? Are they investing in the best funds over the last one year, or are they relying on a longer term track record? Sanjiv Singhal, CEO, Scripbox, says that while access to information on mutual funds has got a lot easier, how people interpret this information may not always be correct. Our survey indicates that past performance is definitely a reference point for many investors and, it is the longer term track record that seems to influence the funds. Out of the 1,389 respondents, who claim to pick funds on their own, only 72 relied on one-year performance to select a fund. More than 350 claimed to go with 3-5 year performance history. More interestingly, almost half the investors preferred to sift through the funds considering a combination of factors including 3-5 year fund performance, fund house track record as well as fund ratings.
... BUT MOST DON'T HAVE A PLAN IN PLACE
While investors continue to show faith in equities, it ap pears, they do not have a clear goal linked to their in vestments. As many as 559 out of the 2,306 respondents admitted that, other than general wealth creation, they had no purpose guiding their mutual fund investments. In other words, one in every four investors is putting in money without giving thought to any specific goal. Besides, one in every five respondents has not defined any time horizon for these investments. This puts serious doubts on whether these investments will continue, irrespective of the market situation. “There is a clear danger of investors moving out in a hurry during a market decline if there is no context to their investments,“ says Sadagopan. This will compromise important financial milestones in one's life, he adds.
The solution is to tie-up every investment to a clearly defined goal--retirement, child's education and marriage, buying a house etc.This gives a sense of purpose to every rupee invested, and thus instils an investing discipline. You are less likely to shirk your savings responsibilities if you know it will hurt a par ticular goal. If you know a certain sum of money has to flow on a periodic basis towards, say, funding your child's higher education, you will not compromise on the same. Harsh Roongta, a Registered Investment Advisor, says, “When you are knowingly investing a certain amount towards your child's education, it is no longer an investment in some product, but an investment into an education fund.“
But, if `wealth creation' is your only goal, it implies that your singular objective is to try and make the money grow as much as possible. This entails treating all your investments as one big money pot from which to withdraw as and when the need arises to fund a goal. Here, one runs the risk of overdrawing funds for the nearest goal, leaving much less for goals still to come. It is not surprising that most Indians are left with little for their retirement, having previously drawn on their savings towards other goals.Starting an SIP is only half the job done.Linking it to a financial goal and staying the course is critical. Roongta says, “A combination of SIPs along with defined goals is an ideal approach to investing. The choice of investment is of much lesser importance.“
SIPs REMAIN THE PREFERRED ROUTE
It seems investors have become much more amenable to regular, automated instalments rather than investing in an arbitrary manner. Almost every other investor in our survey claims to invest only through SIPs. This includes investors who have been putting in money only over the past three years. While just a few prefer to make lump sum investments, many go with a mix of both. Experts reckon that investors have realised the folly of trying to make quick gains by simply jumping into the fray.Manoj Nagpal, CEO, Outlook Asia Capital, says, “Earlier, lump sum investments were the norm during a market rally. This shift in preference to SIPs is surely a positive.“ Sadagopan says the concept of SIP has also clicked with the salaried class of investors. “For most people, who draw their income on a monthly basis, having a monthly SIP dovetails perfectly with their cash flows. People are now more comfortable setting their investments on autopilot without bringing their emotions into the picture.“
Industry data shows that the mutual fund sector added 19 lakh Systematic Investment Plan (SIP) accounts in the first nine months of 2015-16. This took the SIP count to 92 lakh at end-December 2015 from 67 lakh a year ago--a rise of 37%. Not only has the number of SIP investors risen, there has also been an uptick in the ticket-size of the average SIP and an increase in the SIP tenure. The average SIP ticket-size touched `2,938 in December 2015, up 35% from `2,100 in March 2013. The flows have continued into this year, with retail investors pumping in `6,702 crore in January through mutual fund SIPs. Singhal insists the increase in SIP numbers is a reflection of sustained educational efforts put in by mutual funds and advisors. “Getting people to commit to a long-term investment path is not easy. This is where the investor outreach programmes have worked wonders,“ he says.
MOST INVESTORS ARE THERE FOR THE LONG TERM
The big question on everyone's mind is: will investors will contin ue their SIPs if the market weak ens further? Usually investors tend to terminate their SIPs during a market downturn. Considering that returns via the SIP route, over the past one year, are also in the negative, one would expect investors to be nervous about their investments. Interestingly, however, our survey indicates that this time investors may be in for the long haul. Three out of every four investors who put in money via SIPs intend to remain invested and continue with their monthly commitments in the coming months. The number of investors who intend to redeem, partially or fully, or terminate their SIP altogether, is very few. Some even say that they would consider investing more under this mode.
This is corroborated by the recent DSP BlackRock India Investor Pulse Survey, in which almost half the respondents said they would like to increase their exposure to stocks and equity mutual funds over the next 12 months. According to this survey, investors in the country appreciate the growth potential and value creation from equities, including mutual funds. It also finds that despite global economic uncertainties, the financial sentiment among Indians is the best among all markets surveyed, and savings and investment decision-making confidence is very high. Some experts believe, this time, investors seem to be ready to ride out the market volatility. Roongta says, “I have not had to handhold my clients during this choppy season. Clearly, investors have understood the long-term benefits of sticking with an SIP and have come in with their eyes open.“ He remains confident that retail investors' interest in equity funds will continue, irrespective of a further fall in the equity market.
However, there are some who are not sure that investors will hold on for long, if the market weakness persists. Nagpal argues, “For the SIP trend to hold strong, we need a sustained uptick in the market. But, if the market doesn't revive in the coming months, people may start moving out.“ However, most expect the experienced lot of investors to ride out the volatility. Shah points out, “Those who have been investing over many years, and have experienced an entire cycle or two, would be more inclined to stay invested through this period of uncertainty.“
Indeed, investors who have persisted with their SIP investments over the past five or more years have generated great returns from their investment in an otherwise topsyturvy market scenario.

GSFC to commission Nylon plant in Baroda for Rs 140 crore CMP 61

JAIPUR: Gujarat State Fertilizers and Chemicals Ltd today said it will commission Nylon-6 plant at Baroda unit at an estimated cost of Rs 140 crore.

"GSFC is commissioning Nylon-6 plant at Baroda unit at an estimated cost of Rs 140 crore which will enhance nylon-6 chips production by 15,000 MTPA.

"The company has strengthened its base innylon yarn by implementing a project of 2,600MTPA recently at its fibre unit at cost of Rs 50 crore approximately," FM Daymakumar, Senior Vice President, marketing-Industrial Products,GSFC, said here today.

The company has undertaken Melamine Project at an estimated project cost of Rs 1,000 crore which will become operational by financial year 2018-19.

Digital India !! Its useful or Not

I spent some time in the bank with a old person, as he had to transfer some money.

I couldn't resist myself & asked... ''Uncle, why don't we activate your internet banking ?''

He asked... ''Why would I do that ?''

''Well, then you wont have to spend an hour here for things like transfer. 

You can even do your shopping online. Everything will be so easy!'' 

I was so excited about initiating him into the world of Net banking.

He asked ''If I do that, I wont have to step out of the house? 

''Yes, yes''! I said. I told him how even grocery can be delivered at door now and how amazon delivers everything!

His answer left me tongue-tied. 

He said ''Since I entered this bank today, I have met four of my friends, I have chatted a while with the staff who know me very well by now.

You know I m alone...this is the company that I need. I like to get ready and come to the bank. I have enough time, it is the physical touch that I crave.

Two years back I got sick, The store owner from whom I buy fruits, came to see me and sat by my bedside and cried. 

My wife fell down few days back while on her morning walk. My local grocer saw her and immediately got his car to rush her home as he knows where I live. 

Would I have that 'human' touch if everything became online ?

Why would I want everything delivered to me and force me to interact with just my computer? 

I like to know the person that I'm dealing with and not just the 'seller' . It creates bonds ~~Relationships

Market Movement & Industry Performance

We like debt free companies with good cash,  i feel investors too should aim same for own    portfolio  that is good bottom line  along with good cash in hand parked in liquid funds /tax free bonds . This will give regular annuity income & regular cash flow.

We have seen down grade of rating for Saudi Arabia & Bahrain  it is possible  that it may have negative impact as  many of Indian companies have businesses over there & few Indian banks have branches over there . there is talk of  that down grading may lead to devaluation of currencies too. thus  uncertainty to prevail.

This may lead to more NPA ,  and banking to have more pains .

Investors need to  be cautious even in pvt banks too.

Fortunately we avoided  banking / metals / psu stocks / engineering business related with oil& gases   over last few years , it is very important  where  not to invest,

It is always better to stay  with performing businesses .

We may see  good business opportunities in view of falling raw material prices  at the same time it may not be easy to earn decent  gains in portfolio in 2016/17.

Investors need to spend good time on study & practical  approach  to identify sectors .

MID TERM VIEW ON NIFTY BEFORE ELECTION TGT 6800/7000/7500+ REASON IS USD WILL FALL FROM 70 NOT EXPECT MORE UPSIDE RECENTLY & CRUDE ALSO BIG BIG FALL,GOV RESTRUCTURE ETC & WILL PRIDICT NIFTY AFTER 3-4 YEAR TRADE ABOVE 12000/13000 SENSEX ABOVE 39000 DON’T PANIC WE ARE THE BEST & WE WILL THE BEST SO "" BE A BEST ""

NIFTY CLOSE 5995 CRUCIAL LVL WE EXPECT NIFTY NOT GIVEN CLOSING BELOW 5975 THEN EXPIRY WILL ABV 6250 ATLEAST AND BANK WILL LEAD THE MARKET

EVERY MONTH OPPORTUNITYES WILL COME 8-10 DAYS ONLY (AS PER OUR EXPERIENCE SINCE LAST 10 YEARS )WE WILL ENCASH THAT DAYS WITH EXCELENT GAIN & TRADE HIGH QTY.

ON 07.11.2013 10.38 AM TELL YOU MY HOLD POSITION IN BAJAJFINSERVE 660 >>> NOW 713

11.11.2013 10.33 AM GIVEN >> BUY MAXX FROM HERE SBIN 1715 NOW 1830, AXIS 1087 TO 1150,BOB 585 TO 640,CANBANK 246 TO 266,INDUS 415 TO 427 ,KOTAK 712 TO 746,UNION 123 TO 133,PNB 513 TO 544, UCO 72 TO 79

AS PER MY LAST WEEK POST I SUGGEST YOU ALL THAT WE BUY MAX FROM THAT LVL IN ALL BANKS & NOW ALL BANKS ALMOST UP BY 5-8% IN LAST TWO TREADING SESSIONS

Oct 23, 2013 12:15:13 PMdhirajsagar_4143 SELL ACC FUT 1118/24 SL 1135 TGT 1050 ( SL HIT ON SAME DAY OF RESULT ) NOW 1050 ) BAD LUCK>> & Oct 25, 2013 10:04:35 AM dhirajsagar_4143 : BUY STAR 860 SL 830 TGT 925/995 NOW 925 1st TGT ACHIVED GOOD LUCK

THIS IS THE LEVL THAT WE CAN BUY MAXX FROM HERE NIFTYFUT AT 6140 SL 6075 (TWO CONSECUTIVE CLOSE BELOW THAT ) TGT 6380/6450/6500 BUY ALL BANKS FROM HERE AGAIN SBIN 1715-1680, AXIS 1022-1035,BOB 582-84,CANBANK 243,INDUS 412,KOTAK 710,UNION 121,PNB 510

TODAY 07.11.2013 MY HOLD POSITION TATACOFFE AT 1045, BAJAJFINSERVE 660,JETAIRWAYS AT 342 & DIVISLAB AT 1005

LONG TERM TGTS HERO MOTOR TGT 2200,23400,2400,NMDC TGT 150-160, M&M TGT 1050-1080,ASHOK LEYLAND TGT 23-25,VENKYS INDIA TGT 700,850,1000

OUR LONG TERM TGTS KKCL TGT 1150-1200,NCC 30-32, JET TGT 400-500,CRUDE LONG TERM TGT 7580$,GOLD LONGTERM TGT 1200$, COPPER LONG TERM TGT 410

Mahurat Tips In Advance : Don't Forget God In Good Times & Equities In Bad Times !!!!

Nifty closes up 9.8% in Oct 13.Exactly the same % gain as in Oct 2003, which was also 6 mths prior to elections But In Next Month Nov 03 Bounce Of 20% In NIFTY >>> Will History Reapet Again In Nov 13 ???

H&S PETTERN FOUND IN USD INR TGT SET 52.00/51.90

ENJOY THE CUP OF TEA WID ACC ABV 1305 SL 1280 ( CLOSING BASIS ) TGT 1400

BUY SBIN AUG FUT 2060 SL 2030 ( CLOSING BASIS ) TGT 2170

SBIN CUP& HANDLE BREKOUT IF CLOSING ABV 2250 SL 2050 TGT 2600+

BUY CRUDEOIL NEAR 4575-4590 SL 4545 TGT 4830

CRUDE OIL AT 4785 ON 20.06.2012