Highlights of the Month of January 2012:

SE Sensex gained 11.25 % in the month of January.
NSE Nifty gained 12.45 % in the month of January.

BSE Bankex Gained 24.44 % in the month of January.
BSE Realty Gained 24.16 % in the month of January.
BSE Metal Gained 23.73 % in the month of January.

Yes Bank Gained 38.29 % in the month of January.
Union Bank of India Gained 35.15 % in the month of January.
Axis Bank Gained 33.15 % in the month of January.

Anantraj Gained 53.08 % in the month of January.
HDIL Gained 49.25 % in the month of January.
Sobha Developers Gained 36.49 % in the month of January.

JSW Steel Gained 37.73 % in the month of January.
Tata Steel Gained 34.53 % in the month of January.
Sesa Goa Gained 33.86 % in the month of January.

STC India Gained 89.95 % in the month of January.
Spanco Ltd Gained 85.67 % in the month of January.
IVRCL Ltd Gained 79.08 % in the month of January.

Reliance Communications gets Rs 8,700 cr loan from China Development Bank

MUMBAI: Reliance Communications says it has finalized a $1.93 billion Chinese loan which will save it hundreds of millions in interest.

The loan, the largest ever between the two Asian giants, comes amid often frosty relations.

Debt-ridden Reliance says it will use $1.33 billion to refinance pricey 3G spectrum fees and the rest for imports of Chinese telecom equipment from Huawei and ZTE.

Reliance Communications said it would see annual interest cost savings of more than Rs 500 crore ($111 million).

China Development Bank has underwritten the loan and is part of a consortium of Chinese banks providing funding.

Reliance Communications, India's second biggest mobile phone operator, had in December signed an accord with China Development Bank for a $1.93 billion, 10-year, syndicated loan.

The drawdown of the loan, is likely to start this month.

Reliance Communications has to reduce a $7 billion mountain of debt ahead of a major bond redemption next year.

Last year, Reliance Communications attempted to sell a 26 per cent stake in itself to pare debt. But it found no takers. A plan to float its tower unit in an initial public offering also failed to take off and a deal to merge its tower arm with a rival collapsed.

Reliance Communications is battling a fast-growing but ferociously competitive Indian cellular market in which call charges have fallen and operational costs have risen, triggering declines in margins, while regulatory worries have also increased.

The shares have fallen about 35 percent this year, making them the eighth worst performer globally among large capitalised firms.
~
Source: ET

Returns from L/M/S Cap

Now those who talk about asset allocation generally end the discussion at these various asset classes. However, equity investors would do well to go a step even further. They can further allocate their equity portion between large caps, mid caps and small caps. While large caps are the safest of the lot, mid and small caps while being risky can generate the best returns over a long run. So a proper blend of these different categories of stocks can help you generate good yet stable returns over a 5 to 10 year period.

Now as we move into 2010, investors in small cap stocks must be the happiest lot. This is on the back of about 125% returns of BSE-Smallcap during 2009. This is higher than the returns recorded by the BSE-Midcap (106%) and BSE-Sensex (80%).

3 Idiots of Commodities

At a time when the Aamir Khan-starrer ‘3 Idiots’ is making waves in Indian cinema world with the movie grossing over Rs 100 crore in the first four days after the release, investors in the country will be interested in knowing the big three blunders they made in commodities during the past year.

And, this will also give them some insight into the way they should invest in the present 2010. The biggest Idiot 1 among the three last year was the investor who dumped all his interests in equity and put his whole liquidity in gold bars and ETFs. If you want some statistics, just check out these facts. From a low at 8,100 in early March, the BSE Sensex is now within touching distance of 17,500.

The extreme pessimism at the beginning of the year made way for rising hopes in May as soon as Manmohan Singh was handed a stronger mandate than anybody ever imagined by the Indian electorate. For the first time ever, stock markets were closed for the day after just two minutes of trading as Sensex hit the second upper circuit to end the day with a gain of 2,100 points. With an 81% gain in 2009, veterans of the street feel that 2010 could be a good year, but repeating the year just went by may not be possible.

In comparison, take the case of gold. Those who embraced gold may claim that they had gone for safety of the gold. But remember safety at what cost. They have lost a lot of money just to park it at a safe have which the world said is the best bet during the times of recession and crisis. Check out the statistics. Gold gained below 30 per cent in 2009 in India. And, the demand for the commodity is sliding fast because of its high prices. India’s import of gold is down in 2009. If you take turmeric, price of the agri commodity has gone up 300 per cent in India in 2009. So, it is time for the Idiot No.1 to rue his mistakes and take corrective steps.

Now, Idiot No.2: The investor who thought gold is the only metal which will post big gains and cleared all investments ion other metals to put his money on yellow metal. Much to his chagrin, mainly silver and platinum performed much better than gold and yielded good money for the wise investors. In fact, silver had given good hint in early 2009 itself that the metal is the one to watch and many investors had in the middle of the year jumped ship to put money in silver. Those who did that got good rewards and silver outperformed gold at the end of the year. Silver prices soared around 50% in 2009, pipping gold to the post in the price race.

Idiot No. 3 is the person who still banks on gold for 2010 and believes that platinum and silver will not fetch him money in the coming year. The advice to him is don’t be an idiot like the ‘Silencer’ in the movie. Change according to the times and dump gold fast to make good money in other metals and commodities like garlic and turmeric. Garlic has fetched more money than anything for investors in China last year because Chinese believe that it can fight swine flu.

And the threat of swine flu still continues, and Chinese are all set to buy more garlic, then India can also benefit. Prices are set to go up. Turmeric as I said witnessed a 300 per cent rise last year. So, is the case of several other agri commodities. Because, weather was bad last year and commodity supply is less. So, most of the agri commodities are set to soar in 2010. So, wake up idiots! And make money by using your brains before putting your money at right places!

10 stocks to watch in2010:

10 stocks to watch in 2010:

Shree Renuka Sugars
IVRCL Infra
Sun Pharma
Yes Bank
Rallis India
Tata Steel
Axis Bank
Lupin
SBI
M&M

PSU investors richer by Rs 26,000 crore in a single day

~
The market capitalisation of public sector companies jumped by a near Rs 26,000 crore today bouyed by positive sentiment after the government's decision to divest 10 per cent stake in all publicly traded firms.

The total market capitalisation of the 48 listed PSUs on the Bombay Stock Exchange's PSU index soared by Rs 25,956 crore to Rs 15.76 lakh crore in a single day.

On Wednesday, the market valuation of these firms stood at Rs 15.51 lakh crore.

Shares of public sector firms were in demand on counters. Out of 48 companies in the BSE's PSU Index, 41 ended in the green, while 7 firms bucked the trend and closed in red.

Rashtriya Chemicals & Fertilizers led the gain among PSU stocks and ended the trade at Rs 65.90, up 12.17 per cent from its previous close.

According to market analysts, the rise in PSU investor wealth has been due to the upbeat investor sentiment on government's decision to divest 10 per cent stake in the listed PSU entities.

Hindustan Copper advanced 9.98 per cent to close at Rs 233.05 and oil major Gail India gained 6.89 per cent to close at Rs 367.90 on the BSE.

The BSE's PSU Index gained 139.31 points or 1.67 per cent to close at 8,463.77 points today.

~ET

Sell off-boon-Govt-richer-by-Rs-50k-cr-in-1-session

Reason behind India's lowest telecom tariffs in the world

~
India today boasts of the lowest telecom tariffs in the world. If it is down to a tariff in the range of 30 paisa per minute, that did not really happen overnight. It was the result of continuous innovation and fine-tuning of costs that operators worked on assiduously.

What transpired was India putting in place the world’s low-cost telecom model. For its part, the government lowered termination charges, offered spectrum at prices lower than many other countries and setting the base for full-fledged competition. The cost benefits were eventually passed on to the consumer.

What really happened? A combination of outsourcing non-core processes and infrastructure sharing enabled operators to shave costs to the bone. India’s largest operator by subscribers and revenues, Bharti Airtel set the process in motion which its competitors adopted quickly. The company challenging paradigms like ‘high average revenue per user per month (ARPU) is good’ or ‘post-paid is better’ or for that matter, ‘technology must be in-house’.

“We knew to succeed in this market, we had to address affordability because there is a huge disparity in the country. Since there are customers who make a one-minute call as well as a ten-minute call, we decided to concentrate on minutes and not ARPUs. We started building cost structures around minutes,” says Bharti Airtel’s deputy CEO Sanjay Kapoor.

In 2004, the company first outsourced the management of its IT functions to technology giant, IBM in a $750 million contract. This was then followed by outsourcing its networks and call centre operations.

“We started outsourcing all non-core processes to people who could handle them better than us. The advantages of outsourcing come in terms of improved productivity, scaling up and qualitative aspects,” he explains. The IBM contract was unique then and began a debate around the rationale of outsourcing. Not much later, it became a trend-setter, with other telcos like Idea Cellular and Vodafone Essar following suit.

Idea’s chief information officer, Prakash Paranjpe points out that his company’s outsourcing deal with IBM helped in reducing overall costs. “With outsourcing, the costs are predictable in percentage and absolute terms. It is a critical component of Idea’s ability to optimise costs,” he adds.

Sharing of passive infrastructure like telecom towers, generators and shelters was the next step in bringing down costs. “The advantages of infrastructure sharing are huge. It has an impact on long term productivity for a capital-intensive model and helps in conserving cash,” says Mr Kapoor.

According to Ascentius Consulting principal analyst Alok Shende, the disaggregation of the industry’s value chain freed capital from the books of operators, which facilitated the process of slashing costs. “Outsourcing allowed for conversion of capital expenditure (capex) model into an operational expenditure model (opex). This allowed operators to align costs on a per minute revenue model,” he rationalises.

According to him, the decision of the regulator in bringing down the termination charges was critical. This is paid by one operator for terminating calls on the network of another operator. Likewise, having a fierce competition scenario kept a lid on pricing which has still augured well for the consumer. Quite clearly, nothing works like a healthy value for money proposition in India.
~ET