21 September 2014

GOLD -It’s a clear signal to sell: Business Line

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The upward movement in dollar and end of the quantitative easing are negative for gold
With the Federal Reserve cutting down stimulus by another $10 billion and taking a more hawkish stance on interest rates this time, gold price moved sharply lower last week. It dropped to $1,215.7/ounce, down 1 per cent.
Despite the Fed’s statement that interest rates may continue to be near zero for a considerable time, the fact that more officials projected a rate hike by next year saw the precious metals lose sheen.
Silver and even platinum prices took a knock. Silver closed at $17.8, down 4 per cent. Platinum ended at $1,336, down 2.5 per cent.
The US SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, saw holdings drop to 784.2 tonnes from 788.4 tonnes in the previous week.
Data on Monday showed that the industrial production in the US in August dropped by 0.1 per cent against the expected gain of 0.3 per cent. Data on housing starts in the US that was released on Thursday showed a drop in new home construction. The enthusiasm this created among gold bulls was dampened later by the FOMC announcement.
Cues to watch

With the hints from the Fed that rate hikes will happen by next year, there is a possibility of prices dropping below $1,200/ounce by the end of the year. The dollar is steadily moving up and there are new highs on Wall Street every other day.
So, gold investors need to exercise caution. The Dollar index ended at 84.7 last week, up 0.5 per cent, moving closer to the technical target of 89, following weakness in the euro. Brent crude prices, on the other hand, continue to trade below $100, lowering inflation expectations.
This week, the US economic calendar is heavy. On Monday is the existing home sales data. On Wednesday is the release of new home sales data. Thursday will see the Labour Department give out jobless claims number.
On Friday, September 26, the final estimate of the second quarter GDP will be released.
On the charts

There is a clear sell signal in the gold chart. Prices are targeting $1,200 levels.
When this level is breached, it may trigger sell stop loss orders and a steeper fall may be witnessed. With prices hitting a low of $1,213.8 on Friday and recovering only mildly to close at $1,229.6, this week, prices may move further down.


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In a tight spot, bank on your FD : Business Line

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A loan against your FD carries lower interest rates than a personal loan and comes without processing fees
Personal loans are not the only way to meet your short-term financial needs. If you have been conscientious and put away money in fixed deposits (FDs) periodically, consider a loan against your FD. Here’s why.
Lower rates
The biggest benefit is that a loan against FDs comes at a much cheaper rate than a personal loan. Usually, banks charge an interest rate between 2-3 per cent over-and-above the FD’s interest rate. If you take a personal loan, the interest rate can even cross 20 per cent.
With the highest bank FD interest currently at 9.3 to 9.4 per cent, your FD loan rates will be cheaper by a mile.
For example, ICICI Bank and HDFC Bank offer a maximum of 9 per cent interest on their FDs. Axis Bank offers 9.2 per cent. So, in these cases, your interest rate on the loan against FDs could be capped at 12-12.2 per cent.
On personal loans, ICICI Bank charges 13.5-18 per cent, while HDFC Bank charges 15.75-20 per cent. And at Axis Bank, the interest rate can vary between 15.5 per cent and a high of 24 per cent.
The nitty-gritty
The quantum of loan that can be availed on an FD varies across banks, usually at 70-95 per cent of the principal and the interest accrued on your FD.
For example, public sector banks such as the State Bank of India and Canara Bank offer up to 90 per cent. On the other hand, HDFC Bank offers only up to 75 per cent of the deposit value.
It doesn’t matter what type of FD it is; you can get a loan against FDs of any tenure. You can even get a loan against a tax-saving deposit. The only criterion, in some cases, is that the FD should have completed and earned interest for at least three months.
It’s not just banks you can turn to for such loans. Non-banking financial companies (NBFCs) also offer loans against FDs. But with NBFCs, the quantum of loan offered is on the lower side compared to a bank.
Most NBFCs offer only up to 75 per cent of the present value of your FD. For example, Dewan Housing Finance offers 75 per cent of the value as loan amount. In the case of Mahindra Finance, it can start from 60 per cent and go up to a maximum of 75 per cent.
Payments
While a personal loan is given for a fixed tenure, there is no fixed period for loans against FD. In general, the period of your FD is the maximum tenor offered for these loans.
That is, if you have invested in a five-year deposit and are taking a loan at the end of the second year, the remaining three years will be the maximum period that would be available for you to repay the loan.
The mode of repayment is decided mutually between you and the bank at the time of taking the loan. You can either pay it back as equated monthly instalments, or the entire loan amount plus the interest can be deducted once the FD matures. Any remaining amount left in the deposit after such deduction will be paid back to you.
Then there’s Mahindra Finance, which has other options. One, you can pay just the interest on the loan every month and the entire principal would be deducted once the FD matures. Or you can opt for a payout after deducting both the principal and the interest amount at the time of maturity.
There is no pre-payment penalty either. Your FD will continue to earn interest during your loan period as well.
Pros and cons
While you have your choice of banks to get a personal loan at the best rate, for a loan against an FD, you are restricted to the bank or NBFC in which you have the deposit.
The drawback of a loan against FD is that the amount of loan you can take is capped.
And if your bank requires a higher margin, your loan amount will be reduced to that extent. If you have invested small amounts in multiple FDs across banks and need a big amount as loan, then approaching all these banks is a hassle.
However, the loan sanctioning process is simpler as all your details are already with the bank. This is the main reason why most banks do not charge any processing fee. Personal loans have a processing fee.


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Domestic mutual funds favoured MNCs but FIIs held a bearish view on these stocks : Business Line

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In addition to sound fundamentals, buying interest from institutional investors — foreign institutional investors and mutual funds — also supported the rally in pharma stocks. But the stock choices of these two classes of investors have been quite different.
Buying large-cap
In the last one year, FIIs have been buyers in Indian pharma stocks.
Dr Reddy’s has been the top addition in the large-cap space; FII holding in the stock has increased from 32.7 per cent at the end of June 2013 to 35.3 per cent this June. Strong performance over the last few quarters and a sharp 20 per cent-plus correction in the stock price during the first half of 2014 possibly triggered buying interest in this stock.
Other stocks where FIIs have taken fresh positions in the last one year include Ranbaxy Labs (2 per cent increase), Lupin (1 per cent), Cipla (0.58 per cent), Cadila (0.51 per cent) and Sun Pharma (0.19 per cent). Sun’s acquisition of Ranbaxy and the former’s good long-term prospects may have evoked interest in Sun Pharma’s stock, despite the strong rally in the stock over the last year. FIIs may have capitalised on the Ranbaxy route to buy into Sun Pharma.
For Cipla, improvement in profitability on a sequential basis due to concerted efforts to scale down low-margin businesses, expected pay-offs from its investments such as the inhaler franchise in the EU have added to the attractiveness of the stock.
Though FIIs have increased their exposure to Lupin in the last one year, they have marginally reduced exposure in the last six months. However, next to Dr Reddy’s, FIIs hold significant stake in Lupin.
As of June 2014, FII holding in the stock stood at 31.7 per cent.
FIIs have also picked up a reasonably big chunk in select small- and mid-cap pharma companies. Aurobindo Pharma tops the list; foreign institutions have bought an additional 9.72 per cent of the company’s total equity in the last one year. Shasun Pharma was the other stock which saw significant increase in FII holding — from barely 0.1 per cent last year to 6.68 per cent as of June 2014. Equity investment by animal health JV partner Sequent Scientific may have aroused institutional interest in this stock.
Other small-cap names that have seen significant increase in FII holding include Natco Pharma, Ajanta Pharma, Shilpa Medicare, Sequent Scientific, Granules India and Bliss GVS Pharma. In the mid-cap space Torrent Pharma and Divi’s Labs were favoured by FIIs.
Sellers in MNCs
When it comes to their investment calls on multinational pharma companies, FII moves have largely been on expected lines. Barring Pfizer India and AstraZeneca Pharma (India), where foreign institutions have bought 0.97 per cent and 0.65 per cent of their respective outstanding equity, they have been reducing exposure to other multinationals.
They have sold a little over 21 per cent in GSK Pharma during the year; possibly offloading a large part of their holding during the open offer made by the parent in February this year.
They have also trimmed holdings in Abbott India, Sanofi India, Merck and Wyeth India.
But what did MFs bet on?
Domestic mutual funds did quite the opposite of what their foreign peers did! They were buyers in stocks of most multinationals even as FIIs held a bearish view on these stocks, GSK Pharma, Pfizer India and Sanofi India being the exceptions. Merck India topped the list of stocks that saw an increase in mutual fund holding — from 7.9 per cent at the end of June 2013 to 9.97 per cent as of this June. Novartis India, Abbott India, Wyeth and AstraZeneca were the other multinational companies that appealed to domestic fund houses.
They sold most large-cap stocks which were picked up by FIIs — Dr Reddy’s, Ranbaxy Labs, Cadila Healthcare and Sun Pharma were their top sells. However, Lupin and Cipla did find some appeal among MF houses; their holdings in these stocks have gone up by 0.48 per cent and 0.16 per cent, respectively, in the last one year.
Not surprisingly, MFs were sellers in the small-cap stocks that were bought by FIIs.
The list includes Natco Pharma, Aurobindo Pharma, Shasun Pharma and Dishman Pharma. Instead, MFs chose to bet on a varied set of small-cap stocks such as TTK Healthcare, Unichem Labs, Jubilant Lifescience, Suven Life Science and Vinati Organics.


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20 September 2014

IndiaER Poll: 55% expect correction in October 2014. VOTE NOW- what do YOU think?

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Will Sensex/Nifty Correct by 20% in 2014?

CURRENT results:
  • Yes, In October (55%)
  • No correction in 2014 (22%)
  • Yes, in December (11%)
  • Yes, In November (7%)


IndiaER Poll: 55% expect correction in October 2014. VOTE NOW- what do YOU think?


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19 September 2014

Sharda Cropchem to be listed on Tuesday, 23rd September 2014

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Sharda Cropchem to be listed on Tuesday, 23rd September 2014

ALL TH BEST TO applicant who got shares!



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Investor Categorywise Turnover-- 19 Sep 14

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FII / FPI trading activity on BSE, NSE & MCX-SX in Capital Market Segment Cr. )
CategoryDateBuy ValueSale ValueNet Value
FII/FPI19/09/20149,067.979,074.50-6.53

DII trading activity on BSE, NSE & MCX-SX in Capital Market Segment Cr. )
CategoryDateBuy ValueSale ValueNet Value
DII19/09/20141,581.361,344.21237.15



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NSE, Block deals, 19-Sep-2014

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DateSymbolSecurity NameClient NameBuy / SellQuantity TradedTrade Price /
Wght. Avg.
Price

15-Sep-2014ENERGYDEVEnergy Development CompanCITRUS SECURITIES PVT LTDSELL16,59,59320.00-
15-Sep-2014ENERGYDEVEnergy Development CompanGATISHEEL TRADERS LLPBUY16,59,59320.00-







�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��