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Sunday, February 24, 2008
Grey Market Premiums
Rural Electrification 90 to 105 23 to 25
GSS America InfoTech 400 to 440 Discount
IRB Infra 185 12 to 15
Manjushree Extrusion 45 5 to 7
Tulsi Extrusions 85 7 to 10
V. Guard Ind. 80 to 85 12 to 15
Jesse Lauriston Livermore - Investment Advice
- "In a bull market your game is to buy and hold until you believe that the bull market is near its end."
- "My dear boy," said old Partridge, in great distress "my dear boy, if I sold that stock now I'd lose my position; and then where would I be?"
- "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!"
- "Men who can both be right and sit tight are uncommon."
- "The market does not beat them. They beat themselves, because though they have brains they cannot sit tight."
- "He really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend."
- "Obviously the thing to do was to be bullish in a bull market and bearish in a bear market."
- "When your security is acting right, you can safely add to your line from then forward!"
- "When I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all."
- "When this happens I sell the stock short that is, technically. In other words, I sell more stock than I actually hold."
- "Experience has proved to me that real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start."
- "It is literally true that millions come easier to a trader after he knows how to trade, than hundreds did in the days of his ignorance."
- "If my stock does not act as I anticipated, I immediately determine that the time is not yet ripe – so I close out my commitment."
- "The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements."
- "From my point of view, the investors are the big gamblers. They make a bet, stay with it, and if all goes wrong, they lose it all."
- "A great many smashes by brilliant men can be traced directly to the swelled head — an expensive disease everywhere to everybody, but particularly in Wall Street to a speculator."
- "There is only one side to the stock market; and it is not the bull side or the bear side, but the right side"
- Reminiscences of a Stock Operator by Edwin Lefèvre, the source work from which most of these quotations are taken. This is a newly edited and updated version for ease of online reading, with fully restored typography conventions and author's phrasing to accurately reflect intended meaning of the original published work. Hyperlinks to external references have been introduced to help clarify unfamiliar terminology and offer background context about key personalities and events mentioned in the text.
Reliance Power - bonus ratio to be the key..
Even as legal minds continue to debate the technical issues surrounding Reliance Power’s proposed bonus issue, investors are eagerly awaiting the bonus ratio expected to be announced after the board meet on Sunday.
The Reliance Power board is scheduled to meet on Sunday to consider issue of bonus shares and/or other measures aimed at reducing the cost of acquisition for minority shareholders, who have suffered losses due to the poor performance of the stock since listing.
Since the promoters will not be issued any bonus shares, their stake will automatically be diluted from the current 90%, once the board clears the proposal. Shares of R-Power closed at Rs 417 on BSE, down 1.2% on Friday.
For instance, if the market price on the record date is Rs 400 a share, then the minority shareholders’ cost of acquisition will come down by Rs 42-150 per share, depending on whether the company allow one bonus share for every five held, or one bonus share for every one held. There would have been no gains to any shareholders if the promoters would also have subscribed to the bonus issue.
The calculation is based on the post-bonus dilution in equity capital of R-Power and a pro-rata adjustment in its share price. If the board decides to issue one bonus share for every five shares held by the non-promoters on the record-date, then dilution works out to 2% and there would be a similar decline in the stock price. In comparison, the investor’s acquisition cost will fall by 20%.
In case of a 1:1 bonus, the dilution works to be 10% and the R-Power market price is expected to be adjusted by the similar price while the investor’s acquisition cost will come down by half.
If price falls below Rs 400, the gains will heavily depend on the bonus ratio. For example, if the price on the record date falls to Rs 300 per share, the investors stand to profit only if the company decides to issue at least one share for every two shares held. In the worst case scenario, if the share prices of R-Power plunge to Rs 250 by the record date, then the investors will not make money even if the bonus ratio is a liberal 1:1.
Saturday, February 23, 2008
Sensex drops 750 pts for the week
The markets declined on thin volume during the week ended February 22 on worries about the impending recession in the US. Investors, however, have pinned hopes on the budget scheduled to be presented on February 29.
Analysts are expecting a significant move next week as the derivatives contracts expires on February 28 - a day ahead of the budget.
The main index of the Bombay Stock Exchange, the Sensex, moved between a high of 18,314.10 and low of 17,294.73 before ending the week at 17,349.07 - a fall of 766.18 points over the last weekend close of 18,115.25.
The National Stock Exchange's S&P CNX Nifty declined 192.15 points to 5,110.75 from the previous weekend close of 5,302.90.
REL, ICICI Bank, RPower February 2008 futures at discount
Turnover in F&O segment declines
Nifty February 2008 futures were at 5077.50, at a discount of 33.25 points as compared to spot closing of 5110.75.
The NSE's futures & options (F&O) segment turnover was Rs 36,386.23 crore, which was lower than Rs 43,409.74 crore on Thursday, 21 February 2008.
Reliance Energy (REL) February 2008 futures were at discount, at 1547, compared to the spot closing of 1560.60.
ICICI Bank February 2008 futures were at discount, at 1093.20, compared to the spot closing of 1099.80.
Reliance Power (RPower) February 2008 futures were at discount, at 413, compared to the spot closing of 417.15.
In the cash market, the S&P CNX Nifty lost 81.05 points or 1.56% at 5110.75.
HDFC Bank to buy CBoP in all-stock deal
HDFC Bank, India’s third largest bank, is all set to buy Centurion Bank of Punjab in an all-stock deal.
The boards of both the banks will meet on Saturday to finalise the contours of the deal, which will be the biggest banking merger in India.
The banks’ top brass have been involved in marathon meetings in the past two days to work out the details of the proposed merger.
The swap ratio will be decided later. Initial calculations suggest that a Centurion shareholder will get one share of HDFC Bank for every 20 shares, according to sources familiar with the development.
However, the exact ratio will be arrived at after a consensus, said an HDFC executive. Post the deal, HDFC Bank will get around 400 branches and thus surpass ICICI Bank in terms of branch presence.
More importantly, the bank’s presence in the north and south will receive a boost. Centurion has nearly 170 branches in the north and around 140 branches in the south, whereas HDFC Bank has 250 branches in the north and 150 in southern India.
“We will also acquire a strong small and medium enterprises portfolio from Centurion,” the executive added. HDFC Bank has almost 10 million customers compared with Centurion’s 2.5 million.
The proposed merger has been spearheaded by Housing and Development Finance Corporation chairman Deepak Parekh, Centurion Bank of Punjab chairman Rana Talwar and Ambit CEO Ashok Wadhwa, said a senior HDFC Bank executive.
The shares of Centurion, which rose sharply yesterday due to the merger buzz, declined today by 1.14 per cent to end at Rs 56.40 on the Bombay Stock Exchange. The HDFC Bank scrip closed lower by 4.40 per cent to Rs 1474.95
Via Business Standard
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