MARKET VIEW 30 APRIL 2008

Hello Readers,

Today FED meet in U.S. to discuss interest rates, we expect 25 bps cut.

RBI came out with Monetarty policy & hiked CRR by 25bps, Markets expected a hike in repo rate too but RBI surprised everyone by not hiking the same, this was highly +ve for mkts & we saw the same results yesterday.

Also markets managed to close above 200 DMA on such volatile day which is 17400 for Sensex & 5150 Nifty.

We would like to continue with our previous recomendations & would like to trail stop losses to ur long positions. Book profits in markets once you get 10% or 15% or even higher returns.

Nifty close 5195.5
Supports : 5150, 5125 , 5080
Resistances : 5210, 5225, 5250

Yesterday we have asked our sms group members to BUY HDIL @ 735 WITH SL 700 & TG 800 - 825+, MADE HIGH OF 780 YESTERDAY ITSELF, one can check out our website http://www.smsgupshup.com/groups/AlliesFin for more details of our sms alert services

MARKETS WILL BE CLOSED ON THURSDAY 1 MAY 2008 ON ACCOUNT OF MAHARASHTRA DAY.

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MARKET VIEW 29 APRIL 2008

Hello Readers,

29 April 2008, a very crucial day for Indiam Stock Markets as Reserve Bank Of India ( RBI ) is going to announce Monetary policy.

The things which RBI wil take care while discussing policy is

INFLATION

Which is very high as compared to last few years.

The RBI has recently hiked CRR by 50 Bps in 2 crunches, one effective 26 April 2008 & other 10 May 2008, this wil absorb Rs 18,500 Crores of liquidity from the system.

Experts feel that due to high inflation RBI wil hike repo & reverse repo rates to tame inflation. But if the hike comes then this factor is already discounted by the markets.

ANYWAYS WE LIKE TO CONTINUE WITH OUR PREVIOUS VIEWS POSTED ON THIS WEBSITE, CLICK ON THIS LINK TO GET THE SAME VIEWS http://alliesfin.blogspot.com/2008/04/market-view-28-april-2008.html


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MARKET VIEW 28 APRIL 2008

Hello Readers,

April 2008 was a great month for stock markets as Nifty rallies from 4800 to 5100 + lvls. This we have predicted in our newsletter Dt 04 April 2008 , please click on this link to read the same newsletter : http://alliesfin.blogspot.com/2008/04/market-view-4-april-2008.html

Also technical reasons were given showing charts that y we r bullish on markets, after reading u will to get the idea.

There we have spotted Nifty lvls like
" Anyways our views are bullish on the markets & we will see upside rally in the days to come as imp resistances are 4925 , 5050 , 5170 & 5250 while imp supports are 4725 , 4650 & 4580. "

We are very close to 5170 lvls as we Nifty closes abv 5100+ lvls, any close abv 5170 lvls nw wil take markets to 5250 , 5325 & 5400+ lvls, this r pure technical lvls, Those who are long on the markets can use trail stop loss like 4925 lvls on closing basis. Any close below 4925 spot lvls can reverse the trend.

We have given Technical buy calls on 04 April 2008 like Reliance pack, Banking Stocks & Engineering / capital goods stocks, one can check the then prices & prices closed on 25 April 2008, Stock prices just rose by 10 to 15 % approx

In last few days other sectors which outperformed were Telecom, Metals, Sugar.

We would like to continue with our trading recomendations on Reliance pack, Banking & Capital goods / Engineering stocks with trail stop losses or Trail stop loss @ 4925 spot Nifty lvls.

One who is happy with such 10 to 15% gains in prices can book profits as these are handsome returns in short span of time.

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Worth Reading

Perspective!!!!

One day, the father of a very wealthy family took his son on a trip to the country with the express purpose of showing him how poor people live.

They spent a couple of days and nights on the farm of what would be considered a very poor family.

On their return from their trip, the father asked his son, 'How was the trip?'

'It was great, Dad.'

'Did you see how poor people live?' the father asked.

'Oh yeah,' said the son.

'So, tell me, what did you learn from the trip?' asked the father

The son answered:
'I saw that we have one dog and they had four.

We have a pool that reaches to the middle of our garden and they have a creek that has no end.

We have imported lanterns in our garden and they have the stars at night.

Our patio reaches to the front yard and they have the whole horizon.

We have a small piece of land to live on and they have fields that go beyond our sight.

We have servants who serve us, but they serve others.

We buy our food, but they grow theirs.

We have walls around our property to protect us, they have friends to protect them.' The boy's father was speechless.

Then his son added, 'Thanks Dad for showing me how poor we are.

' Isn't perspective a wonderful thing?

Makes you wonder what would happen if we all gave thanks for everything we have, instead of worrying about what we don't have.

Appreciate every single thing you have.

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RPL PROGRESS REPORT

CLICK HERE TO GET RPL PROGRESS REPORTS UPTO 16 APRIL 2008

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FIND THE FILE WITH THE SAME NAME RPL PROGRESS REPORT

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MARKET VIEW 17 APRIL 2008

Hello,

PLS READ OUR PREVIOUS POSTS ON THIS WEBSITE & SEE WHAT HAS HAPPENED TO THE MARKETS.

CLICK HERE http://alliesfin.blogspot.com/2008/04/market-view-10-april-2008.html TO GET THE MACRO PICTURE OF WHAT WE SAID ON 10TH APRIL 2008.

THIS WAS OUR PREDICATIONS FOR THE MARKETS SINCE LAST WEEK & PEOPLE CAN SEE TODAY THE SAME HAPPENING.

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FIIs three-times more bullish than promoters

Hello,

Important updates about Indian stock markets ;-)

It is the 'heavy selling' by FIIs being blamed squarely for meltdownat Dalal Street, but if their market activity patterns are to bebelieved, overseas investors seem to be over three times moreconfident than India Inc itself regarding the market's future growth.

According to an analysis of the changes in the listed companies'shareholding patterns since the beginning of this year, the number ofcompanies where foreign institutional investors have raised theirholding is bigger than that of those where FII holdings have gonedown.

In contrast, the promoters have cut down their holdings in more numberof companies as compared to those where they have raised their stakesduring the same period.

The data shows that among all the firms having disclosed their latestshareholding pattern as on end of January-March quarter, at least onein three firms have seen an increase in its FII holding. Incomparison, only about one in nine has seen its promoters raisingtheir shareholding in the company.

However, indicating a relatively less bullish stand on large-capcompanies, the overseas investors have mostly cut down their exposureto the firms with high market values while accumulating more shares inthose with lesser valuations.

So far, close to 900 companies have released their shareholdingpatterns as on March 31, 2008. Out of these, the FIIs have raisedtheir shareholding in as many as 320 companies, while promoter holdinghas increased in just 117 companies from the levels as on the end of2007.

Those companies where FIIs have cut down their holdings, include HDFC,ICICI Bank, HDFC Bank, IVRCL Infra, Spice Communications, UnitedPhosphorus, Dr Reddy's Labs, DCB, Axis Bank, Tata Motors, HCLInfosystems and J&K Bank.

The stock market benchmark Sensex fell about 25 per cent between January and March, while FIIs were net sellers to the tune of sharesworth close to three billion dollars during this period.

The companies where FIIs have upped the ante, include Yes Bank, EssarShipping, Centurion Bank of Punjab, Financial Technologies, Sesa Goa,Godrej Consumer, Shree Cement, BEML Ltd, MphasiS, Zee News, TitanIndustries, BPCL, Corporation Bank, IL&FS Investsmart, PNB Gilts andKinetic Motor.

The number of companies where promoters have cut down their holdingscurrently stands higher at 171, while FII holdings have declined in298 companies since beginning of 2008.

There are a total of 48 companies so far where FII holding has gonedown, but promoters have hiked their exposure, indicating a ratio ofone in 20 firms.Such companies include Aditya Birla Nuvo, Bajaj Hindustan, BombayDyeing, EID Parry, GE Shipping, Indian Hotels, JSW Steel, RelianceEnergy, Tata Metalliks, Ultratech Cement, United Breweries Holding andUnited Phosphorus.Besides, 85 companies so far, indicating a ratio of about one in 10,have disclosed an increase in FII holding, but decline in thepercentage of shares held by their promoters.

These firms include Ansal Properties, Gammon Infra, Glenmark Pharma,Financial Technologies, IL&FS Investsmart, Karur Vysya Bank, LancoInfratech, M&M Financial, MphasiS, MRF, Petron Engineering, RoltaIndia, Thomas Cook India, Uttam Galva Steel and Yes Bank.

Promoters have cut down their shareholdings also in companies likerealty giant DLF, Wipro, Reliance Communications, Adlabs Films, HCLInfosystems, Kotak Mahindra Bank, Punj Lloyd, Axis Bank, Mastek, 3iInfotech, Dr Reddy's Labs, HDFC Bank and GV Films.

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Market View 10 April 2008

Hello Readers,

We would like to continue with our previous views & recomendations that we r +ve on mkts.

If we close abv Sensex 15900 & Nifty 4800 then we can see more upside in the markets

As told last time that markets are forming a triangle, Break on either side wil see huge movements. for more information read our previous recomendations posted on this website below this article, also charts r posted which wil tel u many things.

Reliance pack, Banking & Engineering, Capital goods stocks will see some momemtum trading.

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MARKET VIEW 4 APRIL 2008

Hello Readers,

We are posting our views for markets after many days on this blog site.

Nifty is forming a triangle on charts as shown here in the figure where its not breaking the trendline lows & not crossing the trendline highs. Any side break out or break downs with volumes with create a great situation as if upside break out comes then we can see 10 % rally from yesterday close & break down rally comes then we can see the same % rally on down side.

Anyways our views are bullish on the markets & we will see upside rally in the days to come as imp resistances are 4925 , 5050 , 5170 & 5250 while imp supports are 4725 , 4650 & 4580.

On charts we have highlighted few indicators which shows bullish signs on the daily nifty charts. this are pure personal views & please read disclaimer & diclosures on this website posted on the lower end.

Technically the stocks which lead to the rally are Reliance pack stocks which has good weightage on the index. Stocks like Reliance industries, Reliance capital, Reliance communications, Reliance Petroleum. But we wil give more weightage to Reliance industries & Reliance petroleum.

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SEBI's proposed additional norms for share trading members

MUMBAI - INDIA :-)

Securities and Exchange Board of India today proposedadditional guidelines for trading members of stock exchanges toimprove their sales practises.

Among key proposals, SEBI has sought to strengthen Know YourClient norms, provide suitable investment advice in the best interestof clients,and avoid conflict of interest among various activitiessuch as proprietarytrading, investment banking, research, etc.

The capital market regulator has invited comments and suggestionson these proposals before Apr 15.

INTRODUCTION

SEBI has received suggestions for further improvement in salespractices followed by the trading members of the Stock Exchanges.

It is observed that the code of conduct mentioned in the SEBI(Stock-brokers and Sub-brokers) Regulations, 1992 as well as thebyelaws/circulars/rules/ regulations of the exchanges lay downguidelines inrespect of sales practices.

The matter was discussed with the Stock exchanges. It is felt thatthereis a need to enhance the regulatory framework and also to createa sense of awareness among investors in this regard.

Accordingly, based on the suggestions received from exchanges, itis proposed that brokers adopt the guidelines prescribed below:

1. STRENGTHENING KYC NORMS

a) The Exposure/Turnover limit given by the trading members should becommensurate with the financial details of the clients reported in theKYC. The said limit to be specified in the KYC and strictly adhered toor the details in KYC to be suitably modified.

b) Only person with financial standing at least comparable to that oftheclient he is introducing should be accepted as introducer. Thedocuments such as PAN Card, Income Tax Return / Proof of residenceetc to be maintained along with the KYC of the client to whom he isintroducing.

2. WORK HISTORY & BACKGROUND OF THE TRADING MEMBER

a) Trading Members may be required to inform the clients (upfront atthe time of entering into Member-Client agreement) about work history&background of their firm.

b) Actions against the trading member for non-compliance/breach ofregulatory requirements, investor grievances & arbitration casesfiled,pending etc. may be disclosed.

3. SALES PRACTICES

a) Trading members owe their clients a duty to provide suitableinvestment advice in the best interest of the clients. The basis ofsalesefforts should reasonably represent fair treatment for the personstowards whom the sales efforts are directed.

b) While recommending purchase or sale of any security / derivativescontract to a client, trading member shall have reasonable grounds forbelieving that the recommendation is suitable for such client on thebasis of the facts disclosed by such client as to his / her financialposition, other security holdings, past investment experience &patternand investment needs.

c) Prior to the execution of transactions on behalf of a non-institutionalclient, trading member shall make reasonable efforts to obtain the following information regarding the client Financial statusInvestment objectivesPast investment experience & patternRisk appetite of the client.Such other information considered to bereasonable by the trading member.

d) Trading members shall not recommend to any client any transactionsunless they have reasonable grounds for believing that the entirerecommended transaction is not unsuitable for the client, based on theinformation provided by the client and after reasonable enquiry by thetrading member.

e) Trading members shall ensure that the client is adequately informedof the nature and the implication of the recommended transactions andthe facts or circumstances which the client needs to know in order tomake informed purchase or sale decision.

f) Trading members shall also assure themselves that the clientunderstands the risks involved in such orders and has sufficientnetworth to be able to assume the risks and bear the potential lossesifsuch orders result in trades.

g) Trading members shall not recommend to their clients securities orderivative contracts on such securities in a concentrated manner,which represents a subjective or arbitrary supply of information.

h) Trading members shall also ensure timely execution of suchtransactions of their clients so as to ensure best available price fortheclient.

4. EXCESSIVE TRADING ACTIVITY

Trading members shall not encourage or induce excessive trading orspeculative activity in a client's account which is not in accordancewiththe objectives, risk appetite and financial situation of the client involved.

5. FAIR DEALING WITH CUSTOMERS WITH REGARD TO DERIVATIVE PRODUCTS ORNEW FINANCIAL PRODUCTS

a) Trading members shall ensure fair dealing with customers whenmaking recommendations or accepting orders for derivatives contractsand new financial products.

b) As new products are introduced from time to time, it is imperativethat trading members make every effort to familiarize themselves witheach customer's financial situation, trading experience, and abilityto meet the risks involved with such products and to make every effortto make customers aware of the pertinent information regarding suchproducts.

c) The clients may be required to have certain minimum amount ofnetworth(e.g.5 lacs) for trading in Derivative Segment. A net-worthcertificate from a practicing Chartered Accountant or acknowledgementfor I.T. return filed should be accepted in this regard.

d) While registering any client for Derivative Segment, apart fromsigning a Risk Disclosure Document, the trading member also shouldensure that adequate training vis-a-vis risk associated (includingmargin requirement) with Derivative Segment is imparted to the clients.

6. CONFLICTS OF INTEREST

a) Trading members must maintain Chinese wall among its variousactivities such as proprietary trading, investment banking, researchetc.

b) No trading member may directly or indirectly offer favorableresearchor a specific price target to a company as consideration orinducementfor the receipt of business or compensation.

c) Trading members shall ensure that no research analyst maypurchaseor sell any security issued by a company that the researchanalystfollows or derivative of such security, for a period beginning30calendar days before and five calendar days after the publication of aresearch report concerning the company.

d) Trading member shall ensure that no research analyst may purchaseor sell any security or derivative of such security in a mannerinconsistent with the research analyst's recommendation as reflectedin the most recent research report published by the member.

e) A member must disclose in research reports and a research analystofthe trading member must disclose in public appearances:

(a) if the research analyst or a member of the research analyst'shousehold has a financial interest in the securities of the subjectcompany, and the nature of the financial interest (including,without limitation, whether it consists of any option, right,warrant, future, long or short position)

(b) any other actual, material conflict of interest of the tradingmember or research analyst of which the trading member knowsor has reason to know at the time of publication of the researchreport.

7. RECORD KEEPING

Trading members shall establish and maintain procedures to ensurethat sufficient information is recorded and retained about theirbusinessand clients for enabling themselves to justify the risk profiling oftheirclients and the suitability of any advice given.

8. GENERAL OBLIGATIONS

a) Fictitious accounts: Trading members shall not allow establishmentoffictitious accounts in order to execute transactions which otherwisewould be prohibited or to disguise such transactions.

b) Unauthorized transactions: Trading members shall not cause toexecute transactions which are not explicitly authorized by the clientconcerned.

c) Misuse of customers' funds or securities: Trading members shall notuse clients' funds and / or securities otherwise than as prescribed inthe rules, bye-laws, regulations and circulars issued there under.

d) Front running: Trading members shall not execute transactions forownaccount in securities ahead of making recommendations to theirclients in such securities. Trading members shall also have adequatesystemsin place to maintain the confidentiality of the informationabout theirdealing by their clients.

e) Trading members or their representatives shall not indulge in anyfraudulent activities, such as forgery, non-disclosure or misstatementof material facts, manipulations and various deceptions. Making,directly or indirectly, any false or misleading advertisement or anyuntrue statement of a material fact, constitutes a fraudulent,deceptiveor manipulative act on the part of trading members.

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FOREX DERIVATIVES CONTRACTS – WHAT LIES BENEATH ?

There is this major hullabaloo being made about the directive issued by the Institute of Chartered Accountants of India (ICAI), the body that seeks to regulate the profession of accountancy in India. Accusatory fingers are being pointed at ICAI stating that it is responsible for the markets falling by over 726 points on 31st March 08’, the last day of fiscal FY08.


So now the confusion is - what exactly did ICAI announce, was it some new policy or guideline? Absolutely not! ICAI has merely clarified the already existing directive and it had to do this due to the current storm brewing up between the banks, which had entered into contracts in forex derivative, at the behest of its clients. Now the clients are suing the banks, stating that they were responsible for booking losses on these “exotic currency” contracts.


Actually this storm has been brewing for quite some time now. It all started with Hexaware, a profit making company which was forced into booking exceptional losses of Rs.102.99 crore when one if its employees entered into certain foreign currency transactions which were not disclosed to the senior management and the Board of Directors. This had happened when the markets were booming and at that time, no one was in any mood to listen to any bad news. And now, with the markets down and one skeleton after the other tumbling out of the cupboards, this one about the companies posting huge derivatives losses is choking the markets.


A fortnight ago, Sundaram Multi Pap had sued ICICI Bank, alleging it of having sold by mistake some forex derivatives contracts for speculative purposes. And now there is another company, Sabare International, which has taken ICICI Bank to court over similar forex derivatives contracts. There is news in the market that many banks, mainly the private sector banks, have got involved in such forex derivatives contracts and there are many companies that will now be forced to declare losses.


Naturally, this led to people pointing fingers at the banks, accusing them of putting their clients into losses. And now this is where it needs to be said that it is unfair to point the fingers at the banks. Yes, they can be blamed for getting into such transactions but then; did they not invest the money after having got the approval from the clients? Hexaware booking losses, now that is the responsibility of the company, how can it allow its employee to do such a thing right under its nose? That’s a question of corporate responsibility and governance but what we are dealing with here is different. Its like this – there is a client A and his bank B tells him about an opportunity where he could park his funds for better returns. Now A does not understand the complex financial instruments but yet, signs on the dotted line and gives the go-ahead to B. Then B invests and the markets go haywire, currencies fall and B is left with no option but to book losses as that is actually the most prudent thing to do as per the stipulated accounting standards. A is now crying foul and suing B.


And it is here that ICAI has stepped in for clarifications. It has merely quoted the Accounting Standards (AS) norms, wherein under AS-30, which deals with such forex derivative instruments, it is stated that accounting for derivatives is to become recommendatory from 1.04.2009 and mandatory from 1.04.2011. And if the companies decide not to follow this AS-30, then they have to follow AS-1, which explains the principles of prudence, stating that losses are to be considered and profits are to be excluded.


ICAI has urged the companies to adopt AS-30 as soon as possible. This will promote greater integration with international practices and will also promote greater transparency, which could probably help avert similar such situations arise in the future.


There is no ambiguity about the enforceability of this AS-30 and the timing when companies should adopt it. ICAI urging the companies to adopt it early is recommendatory which means that companies will have to consider the AS-30 norm while making the financial statements for the year ended 31/03/08.


The markets are construing this AS-30 as a new accounting standard and this is where all the confusion lies. But the underlying truth in all this is that companies who have parked their funds in exotic forex derivatives will certainly take a hit on their balance sheets for which they themselves are more responsible than the banks, which did the transactions. This uncertainty of losses is what is actually keeping the sentiments low. We can only now wait and watch, the financial figures will start coming out soon. If we enjoyed the party, we have to nurse the hangover too!

So investors / traders this are the days where you have to do your own homework to park your funds in banks, bonds, mutual funds, stocks etc. AFTER ALL ITS ALL ABOUT MONEY HONEY !