Sunday, June 17, 2018

Believe in india's growth story..

Fwd as received on Whatsapp :

Dear Investor

India, as an Investor, has just learned to invest in Equity and Mutual Fund. But, I always find that we, Indian Investors, are very skeptical of our country's progress. With slight negative news or by few percentage market decline, we start worrying about our Investment.

That is one of the reason, foreigners have made tons of money from our stock market and and lot lot more than Indian Investors. They are very confident of our country's growth prospects.

Let's look at Multinational Companies Investment in India.

Amazon has spent most out of Rs. 35000 crores earmarked for India, has also announced to spend additional 12000 crores to defy competition. Amazon's spending in India caused Amazon USA to report losses in USA. Amazon has such a high conviction in India story.

Walmart, seeing Amazon's growth, trying to buy major stake in Flipkart, that will result in to Investment of close to Rs. 70000- 80000 crores in India story.

Japan's SoftBank declared in 2014 that it will invest close to Rs. 65000 crores in Indian market by 2024. In April 2018, SoftBank said it has already invested Rs. 52000 crores in India now and will complete target by 2022 instead of 2024.

Global Hotel chain Marriott has now highest rooms in India. Marriott has now 22000 rooms in India, 2nd highest Taj has 14000 rooms. If you go through plan of another foreign hotel chain The Hilton group, they too want to expand furiously in next couple of years.

HDFC Bank declared result last week. It posted massive Rs. 4799 crore profit for Jan - March quarter and Rs. 17486 crore profit for last financial year. But, who benefits from HDFC Bank's success story, Indians? Absolutely not. We don't trust our companies. Foreigners own 74% of HDFC bank. They benefitted from success of HDFC bank. They are consistently owing 74% for last many years now.

Our entire focus is on one Nirav Modi and one Vijay Malya and we choose to miss whole India story. While foreigners, too, take note of Nirav Modi and Malya but they don't take their eye off big India story, which will continue to play for many years to come.

Other very successful Companies,Paytm and Makemytrip are owned by foreigners, Indians have just minor stake in it.

Message is just sit on your investment in Equity and Mutual Fund. whole world is coming here to invest. And, they are not foolish. They have studied opportunity very well. They have benefitted earlier from other such developing markets hence they know size of the opportunity.

*Stay Invested.*

Saturday, May 12, 2018

Sensex and Nifty :

What are Sensex and Nifty:

The Sensex and Nifty are "indices of a stock market". There are many other indices other than these indices.

A stock market is a place where you can sell or buy shares or stocks of companies.

An index is basically an indicator which gives us a general idea about stocks going up or down.

The Sensex is an indicator of all the major companies listed on BSE(Bombay Stock Exchange) which is situated at Bombay. The Nifty is an indicator of all the major companies listed on NSE (National Stock Exchange) which is situated at Delhi.

The Sensex goes up when prices of stock of major companies on BSE goes up and it goes down when the latter goes down. The same condition applies to Nifty.

These two are the major stock exchanges in the country. Most of the stock trading in the country is done though the BSE & the NSE.

Now coming to how the Sensex and Nifty are calculated:

The Sensex is calculated taking into consideration stock prices of 30 different companies listed on BSE . It is calculated using the “free-float market capitalization” method. This is one of the best methods for calculating a stock market index.

The 30 companies that are taken into consideration are changed from time to time. This is done to make the Sensex an accurate index.

Which 30 Companies:

The 30 companies that make up the Sensex are selected and reviewed from time to time by an “index committee”.

This “index committee” is made up of academicians, mutual fund managers, finance journalists, independent governing board members and other participants in the financial markets.

This committee follows a list of certain criteria to do so.

In the order , we need to understand what Market Capitalization is :

Market Capitalization is the worth of a company in term of it's shares. To get the market capitalization of a company we simply multiply the current price of a share with total number of shares issued by the company.

Now we can understand what the Free Float Market Capitalization Method is:

Many types of investors hold shares of a company. But only the "open market shares" of a company are available for trading in stock markets. A company provides list of all it's shareholder to BSE.

BSE has it's certain set of measures through which it decides how many share of the company falls under "open market shares".

So the Free Float Market Capitalization is the total amount we have to pay for buying all the open market shares of a company.

Once we find the Free Float Market Capitalization, we are very close to findig the sensex.

Final Calculation:

All we need to do is to find the total Free Float Market Capitalization of all the 30 companies and add them. Now use method of ratios and proportions to relate the current value of sensex to sensex base.

What I mean to say is:

Suppose, for a “free-float market cap” of Rs. 50,000 Cr... the Sensex value is 4000…
Then, for a “free-float market cap” of Rs.150,000 Cr... the Sensex value will be..

The Nifty uses stocks of 50 companies....

Thursday, February 1, 2018



*#* FY18 fiscal deficit at 3.5% of GDP, target was 3.2% but the slippage was widely expected (fiscal deficit is flat YoY). Fiscal deficit for FY19 forecasted at 3.3% of GDP as compared to consensus forecast of 3.2%. Govt is committed towards Fiscal Reforms and Budgetary Management (FRBM) Committee report, will bring down central govt  debt to GDP ratio to 40%

*#* FY19 Market Loans forecasted at Rs 6.06 trillion ($ 95bn) as compared to Rs6 trillion in FY18 (budget forecast was Rs5.8 trillion, few days back it was raised by Rs0.2 trillion).

*#* Divestment target in FY19 is Rs800bn; FY18 divestment target upped to Rs1 trillion

*#* Higher direct tax revenue and divestment is partly making up for shortfall in GST (only 11 months of GST collection will reflect in FY18)

*#* Long Term Capital Gains (LTCG) exceeding Rs1lakh will be taxed @10% without benefit of indexation. All gains till 31st Jan 2018 will be grandfathered ie.any  gain earned after 31st Jan 2018 will be charged at 10% (ex. If a stock had touched 120 before 31st Jan 2018, and the sale happens at 140..then tax will be on 20 and not on 140—cost). STCG will be cont to be taxed at on distribution of equity oriented at 10%, this will hurt the dividend MF options. FM expects these schemes will bring Rs200bn in the first year…

*#* TAX benefit for MSMEs: Extends reduced corporate tax rate of 25% to companies with turnover <Rs2.5bn. In the last budget this reduced tax rate was floated for cos with turnover <Rs0.5bn abd benefited 25% of total companies filing tax returns..

*#* No change in tax for salaried tax payers.  Avg tax paid by salaried tax payers is ~Rs76,000 per person as compared to Rs25,000 per person in case of business tax payers. Standard deduction of Rs40,000 in lieu of transport and medical expenses (this was anyway ~Rs33,000).

*#* Senior citizen incentives : exemption on interest income on FDs/Post office deposit to be increased from Rs10,000 to Rs50,000. Raising limit of health insurance from Rs30,000 to Rs50,000.

*Rural Income/ Housing:*
*#* Focus on rural income and affordable housing continues – LT target is to double farm income by 2022 and provide house to every poor by 2022.

*#* In this year govt would raise MSP for Kharif crop (monsoon) to 1.5x of cost of produce

*#* Free cooking gas to 80mn poor households

*#* Will spend Rs14.34 trillion (224bn $) for rural livelihood in FY19

*#* Will increase allocation for agri credit from Rs10 trillion (156 bn $) to Rs11 trillion  (172 bn $)

*#* Launched flasgship national health protection scheme to cover 100mn families and 500mn beneficiaries. Will provide Rs5 lakh benefit per family per year coverage…this is very sizable

*#* 70 lakh formal jobs were created in FY18

*#* Govt will contribute 12% salary towards EPF to employees of all sectors (would be govt employees I assume, though FM did not mention)

*#* Fixed term eployment will be extended to all sectors. It was applicable in textile and footwear industry in FY18
*#* Women cintri to PF be redyced to 8% from 12% in first 3 years

*#* Nation needs investment of ~Rs 50 trillion in infra upgrade

*#* Govt upped infra spend target by 20.9% YoY to Rs 5.97 trillion

*#* Aims to complete 9000km of highway construction in FY18

*#* Railways: Aims to electrify 4000kms of railway lines in FY19. Maintenance of track infrastrucrure and safety will be the focus. Aims to do 3600 km of track renewal in FY19. Deployment of escalatators, CCTVs, wifi on stations

*#* Aim to expand airport capacity by 5x to handle 1bn trips. Udaan scheme to connect 56 unserved airports and 31 helipads.

Friday, January 5, 2018

Trading Holidays for the calendar year 2018

Trading Holidays for the calendar year 2018 : Equities
Sr. No.
Republic Day
Mahavir Jayanti
Good Friday
Maharashtra Day
Independence Day
Bakri ID
Ganesh Chaturthi
Mahatama Gandhi Jayanti
Gurunanak Jayanti

*Muhurat Trading will be conducted. Timings of Muhurat Trading shall be notified subsequently.
Source : NSEindia

Sunday, December 31, 2017

Basics terms of Stock Fundamental Analysis

Share Price=PE X EPS

P/E ratio=
Market Value per Share / Earnings per Share(EPS)

Industrial PE ratio= Average of PE Ratio of all peer Companies

EPS = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares

Book value of a stock = book value of total assets – total liabilities.

Dividend--A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Return on Equity(ROE) = Net Income/Shareholder's Equity

ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employee

Revenue is simply the total amount of cash generated by the sale of products or services associated with the company's primary operations.

Net income=Revenue-Total Expenses

Market it small,medium or large.
Select as per your investment plan.

Volume traded = Intra day traded shares + Inter day traded share.

Deliverables = Inter day traded share.

Deliverables % = (Inter day traded shares/Total volume traded) × 100

Reserves - Balance sheet reserves represent the amount of money insurance companies set aside for future insurance claims or claims that have been filed but not yet reported to the insurance company or settled.

Net worth - Net worth is the amount by which assets exceed liabilities.

Debit - A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.

Liabilities - A liability is a company's financial debt or obligations that arise during the course of its business operations.

Assets - An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.Increasing Value indicates business expansion.

Promoters - A promoter is an individual or organization that helps raise money for some type of investment activity.

Financial Statements - Standalone financial statements show the financial position of the company alone (and no other legal entity).

Consolidated financial statements show the financial position of the company itself along with it’s subsidiary companies, associate companies and joint ventures.

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