SHARE PRICE RIGGING ??...!!

Share Rigging can be described as attempts to pump up a company's stock price by floating favourable news about the company's earnings.
 
A report on the Indian stock markets prepared by the Intelligence Bureau suspects that a market operator, Vimal Rathod was accumulating shares on behalf maverick investor C Shivasankaran based on insider information. The IB has passed on the information to the CBI and the market regulator, the Sebi for further action.

SEBI is targeting some firms intimating that these companies have been involved in the price rigging activities.

HORROR SHOW

Following are the companies which involved in show and created blood bath..

1) Shree Ashtavinayaka Cine Vision--Stock Price rocketed from 15 to 51 within 5 months back to 15 levels in 3-4days !!

2)  Karutari Global -- Stock Price rocketed from 18 to 38  within 5 months back to 158levels in 3-4 days !!

3) Ruchi Soya -- Stock Price rocketed from 90 to 140 within 8 months back to 82 levels in  2-3 days !!

4) Hanung Toys -- Stock Price rocketed from 125 to 410 within 11 months back to 190 levels in 4-5days !! 

5) Welspun Corporation -Stock Price was rangebound between 225-275  almost for 1 year  is now trading at 153 levels which is 52 week low !! 

6)Ackruti City Ltd -Stock Price was rangebound between 480-550  almost for 1 year  is now trading at 258 levels which is 52 week low !! 
 
7)Murli Industries --Stock Price was rangebound between 75-115  almost for 6 months is now trading at 55 levels!! 

8) Uflex Ltd -- Stock Price rocketed from 95 to 325 within 9 months back to 160 levels in 3-4days !!

How they did it?

As per Economic times the modus operandi in each instance was the same. The companies would have a set of investment arms, which would sell shares to various entities controlled by the Dangi group.

This cartel would then push up the stock price by buying some more shares from the market, and at the end of the operation, sell the shares back to the company’s investment arms. The profits would be shared by the Dangi group and the companies. The Dangi group entities traded through a large number of stock brokers, primary among them being Ashika Stock Broking, Sanchay, Systematix Shares & Stocks and Anand Rathi Financial Services.

What is the Penalty?

According to Economic Times late on Thursday, the regulator barred the promoter groups of Murli Industries, Ackruti City, Welspun Corporation and Brushman India from dealing in their shares till further notice, for colluding with share trader Sanjay Dangi and his associates, and the Ashika Group in rigging the stock price of their respective companies. Sanjay Dangi and his group of investment arms, and the Ashika group of firms too have been banned.

How spokes person of few companies responded?

Clarifying his stance on the issue, Naveen Jain, Company Secretary of K S Oils informed, "We understand from the mandatory disclosures made by Mr. Sivasankaran a few months back to us that companies belonging to him had purchased a certain block of our company shares in a secondary market transaction  from Citi Venture Capital, a private equity investor in our company.

Ackruti City Managing Director Vimal Shah said he would challenge the Sebi order. 

Whats the lesson to be learnt?

The saying ‘small is beautiful’ is always not true. Small and mid cap companies are prone to manipulation of stock prices by Operators.
Few Operators who specialise in rigging public issues,have set up off-shore entities, which fulfil the requirements for a ‘foreign institutional investor’ status. The operators then buy into the IPOs through these ‘FIIs’. 
In some cases merchant bankers agree to mobilise the funds as required by the promoter, but price the issue much higher. The difference is usually shared by the merchant banker and the operator. 

Whats going on now?

Few companies got clean chit and their share prices went up like rocket on Dec 11-2010
1) KS oil up 22%
2) Ruchi soya up 10%
3) Hanung up 5%
  
On 13th December
 KS oil agin up 10%
Ruchi soya 5%

On 14th December

KS oil agin up 1.5%
Ruchi soya 2%
Hanung up 9%

On 15th December

KS oil agin up 16%
Ruchi soya 2.5%
Hanung up 1.6%

On 16th December
Ruchi soya 2.9%
Hanung up 0.6%

---to be continued

 

DECEMBER 8TH PERFORMANCE

 BY GODS GRACE

DELTA CORP B@100 S@104--4%PROFIT
JAYASREE TEA B@152 S@156--2.6% PROFIT
TATASTEEL HOLDING B@628---STOP LOSS TRIGGERED@610 ON 9TH DECEMBER--2.86% LOSS

TO BUY 1 LOT GOLD CAPITAL REQUIRED IS 80000--LOT SIZE 100

GOLD S@20670 B@20590--10% PROFIT (8000Rs)PER LOT

GOLD B@20600--HOLDING
GOLD B@20400S@20550--15000PROFIT( 18.75%)PER LOT

TO BUY 1 LOT COPPER CAPITAL REQUIRED IS 20000--LOT SIZE 1000
COPPER B@403 S@412--9000 PROFIT(45%) PER LOT
COPPER S@413 B@411--2000 PROFIT(10%) PER LOT

GREAT INFO GIVEN JUST FEW MONTHS BACK

KOUTONS TOLD NOT TO ENTER AT AROUND 350LEVELS  NOW TRADING @ 50 LEVELS AS INDICATED EARLIER.

SATYAM TOLD NOT TO ENTER AROUND 98 LEVELS NOW TRADING @65 LEVELS.


NOT ENTERING WRONG STOCK IS ALSO EXTREMELY IMPORTANT TO KEEP YOUR CAPITAL SAFE.

THANK GOD:-)

RECENT CALL PERFORMANCE

HCL TECH 424 TO 439 IN 2 DAYS.EXITED IN PROFIT OF 3.5% IN 2 DAYS

HEXAWARE BOUGHT @92 EXITED @102 --INTRADAY PROFIT 10Rs PER SHARE-MEANS 10.86% RETURNS IN SINGLE DAY

GOLD SHORTED@20900 COVERED AT 20790 PROFIT OF 11000PER LOT--MEANS 13.75% RETURNS IN ONE TRADE--TODAY

GOLD BOUGHT@20630 BOOKED PROFIT AT 20680 PROFIT OF 5000PER LOT--MEANS 6.25% RETURNS IN ONE TRADE--TODAY


By Great Grace of GOD :-)

Five investment ideas to beat inflation

Shooting well past the 5 per cent mark, inflation could pose the biggest risk yet to your plans of buying a home or living well on retirement. And with traditional investment options struggling to beat inflation, it's time to look at alternatives for your long-term portfolio, says Aarati Krishnan. For most of us, inflation only conjures up images of sky-rocketing onion or milk prices that can throw the household budget into disarray. But have you thought about the serious damage that inflation can inflict upon your long-term wealth? Even a small but sustained increase in inflation rates can completely wreck your carefully constructed plans for buying a home, funding your daughter's engineering degree or even living it up after retirement (See table). Prepare for 8 per cent The risk of inflation upsetting your financial plans is not theoretical; it is very real, for two reasons. One, inflation in India is usually discussed in terms of the Wholesale Price Index or WPI, which captures product prices at the factory level. But it is the Consumer Price Index (CPI Industrial Workers) that better reflects products and services used by middle-class consumers. Annual inflation in the CPI (8 per cent) has consistently stayed well above WPI (6 per cent) in the last five years. Two, inflation has climbed steadily in recent years, with a rising middle-class stoking demand for everything from apartment blocks to vegetables. Therefore, while financial advisors in India have traditionally used a 5 per cent inflation rate to construct long-term investment plans, inflation today is already at twice that level. So what inflation rate should investors budget for over the next decade or so? A study of inflation trends over the past 30 years shows that 8 per cent would be a realistic number. Studying 30-year data for CPI (using ten-year rolling returns) reveals that consumer prices rose at over 8 per cent annually almost sixty per cent of the time since 1980. Inflation stayed at 5 per cent or less only five per cent of the time. If inflation itself is to reduce the value of money by 8 per cent every year, how should you rejig your portfolio to keep ahead of it? Here are five ideas that may help investors win the battle against inflation: Stop shunning stocks Whether inflation hurts or actually helps stock prices has been the subject of a wide academic debate. However, a study of real-life trends in the Indian stock market shows that stocks are the only asset class that have done a decent job of delivering ‘inflation-plus' returns to their investors, with any degree of consistency, over the last 30 years. A rolling-return analysis of the BSE Sensex vis-à-vis the consumer price index shows that for investors who held on for ten years at a time, the BSE Sensex beat the consumer price index on nearly 80 per cent of the occasions. Yes, there were certain ten-year periods (for instance, between 1992-93 and 2002-03) where stocks actually declined and left investors high and dry. But the big gains notched up in the good years would still have left investors in a comfortable position had they waited a couple of years to cash out. In contrast, gold, the retail favourite did not match inflation nearly 50 per cent of the time! Investors who bought gold for the extended period between 1987 and 1995 would have found the value of gold holdings not keeping pace with inflation rates over the next ten years. In recent years, however, gold has done a splendid job of beating inflation, thanks to the spurt in returns on the yellow metal. Fixed deposits, where most people park the bulk of their savings, have not delivered positive ‘real' returns on most occasions. All this suggests that stocks are a must-have in the portfolio for anyone saving money towards any 10-year plus financial goal. For a person with a debt-only portfolio earning a return of 8 per cent now, allocating 20 per cent to stocks may lift returns to a respectable 10 per cent, assuming stocks deliver 16 per cent over the next ten years. Beating inflation by a bigger margin will require a bigger stock component. Debt-plus funds Those not comfortable dabbling directly in stocks can take the mutual fund route. Monthly income plans that add a dash (15-20 per cent) of equity to a debt portfolio are one option. However, only a handful of them have trounced inflation over the past five years — the category as a whole has managed a 8.4 per cent return. Reliance Monthly Income Plan, CanRobeco Monthly Income and HDFC Monthly Income Plan are a few funds that registered a 11-12 per cent annual return. Though they come with higher risk, balanced funds (which use a 65:35 combination of equity and debt) seem a much better option for conservative investors seeking to beat inflation. One, all of the 15 balanced funds that have a ten-year record have comfortably beaten a 9 per cent inflation rate, their returns ranges between 13 and 27 per cent and averaged 17 per cent for ten years. Two, returns from balanced funds, as they are treated as ‘equity-oriented funds', suffer lower tax compared to monthly income plans. Thus they may yield higher effective returns for investors in the higher tax slabs. Yes, balanced funds will see their values plummet in any stock market meltdown. But regulated equity exposures and a 10-year plus holding period should mitigate this risk to a good extent. Real estate & rents Though there is no ‘property index' to support this, inflationary periods in India have usually been accompanied by rising prices of real estate. Real estate investments help you keep ahead of inflation in two ways. One, as a home tops the ‘must-buy' list for most Indian salary-earners, property prices usually move in step with income levels (a key inflation driver) over the long term. Two, rents on residential property, especially in the cities, also tend to march with inflation. Therefore, owning a second home and renting it out, ensures that a portion of your monthly income is automatically benchmarked to inflation over the next decade or so. Most Indians already have a sizeable portion of their wealth locked up in property, thanks to the value of their own homes. A self-occupied home allows the owner to protect himself against inflation in his monthly rent outgo. However, those who have little or no investments in property should actively consider real estate investing to counteract the impact of inflation. Buying plots of land, an affordable home in the suburbs or real estate funds to participate in property price appreciation are options. However, investors keep tabs of their overall portfolio structure while doing this — having over 50 per cent of your total wealth invested in property would be tantamount to putting all your eggs in one basket! Make use of leverage Ever thought about why the EMI (equated monthly instalment) on the flat you bought five years ago seems so manageable today? That's because of inflation too. One of the key side-effects of inflation is that, by steadily nibbling away at the value of a rupee, it puts the borrower at a distinct advantage over the saver in the long run. The EMI of Rs 30,000 a month on the home loan you took five years ago may have amounted to 50 per cent of your monthly salary in 2005. But if your salary itself has kept pace with inflation (growing at 8 per cent a year), then you would today be shelling out only one-third of your monthly salary as loan repayment. The appreciation in the market price of your home would also have increased your comfort levels in paying off your debt. Yes, higher inflation may push up the interest rates if you have a floating rate home loan. However, the tax incentives on home loan repayments, on top of the relatively low interest rates on home loans, still make leverage a particularly good option to fund your property purchases. Now, we are not suggesting that maxing out your credit card while shopping or borrowing to bet on IPOs is an inflation-beating idea! However, judicious use of loans to fund long-term goals such as acquiring a degree or purchasing property does help you win the battle against inflation. Stock up to win the inflation battle When it comes to beating inflation, all stocks are not equal. The following points may help investors choose stocks that can inflation-proof their portfolio. Stick to blue-chips: Though mid-cap stocks tend to deliver bigger returns than large caps in a bull market, mid-sized companies in India have historically proved more vulnerable to rising raw material prices than large ones. That makes them less well-placed to deliver profit growth in high inflation scenarios. For instance, the Sensex companies in India have traditionally enjoyed over twice the profit margins of their mid-sized peers, given their market leadership, procurement strengths and pricing power. Thus, investors looking to add a stock component to their mainly-bond portfolios may add Sensex/Nifty ETFs or funds to get the equity exposure. Lean towards commodity processors: A scenario of high global inflation usually puts commodity processors (like Tata Steel or a Hindalco) at an advantage over converters of commodities (like a Welspun Gujarat or an Apollo Tyres). The former benefit from high commodity prices while the latter usually lose. Look for pricing power: A high inflation scenario usually forces companies to look for avenues to pass on higher input costs to their customers without hurting demand. Companies that have high pricing power usually hold a monopoly or dominant market shares in their category, operate in niche markets or offer premium products that are in high demand. In recent times, companies that market products directly to consumers (consumer durable and auto makers) have enjoyed good pricing power even in an inflationary scenario, owing to strong consumer demand. Industrial product makers who sell to other businesses have been forced to absorb higher costs. A company's operating profit margins are the best test of pricing power. ------ Note: This article came in Hindu Business Line on 5th december 2010.I personally thank the author and sharing his views to visitors of my blog.Since this article can be mailed to friends publishing this in my blog is allowed as per copyright act.

---

---

Investment Advisory Services

Quality Tips

NSE,BSE- CASH ,FNO
COMMODITY
CONTACT
godmktguru@gmail.com

Investor Education Series

October 18 2010

My Dear Investors,

I wish to share the knowledge (obtained from my experience) with my valuable customers. So I am starting this series. Your queries, Feedback, arguments,critics are most wel-come.

1) Most retail investors FEAR about the Current price of the share

Remember share price doesnt matter but valuation of the stock matters.

For eg:
a) Look at this company
http://money.rediff.com/companies/orissa-minerals-development-company-ltd/15110056

Share price Rs. 56,391.45 per share. Today it is up 3.91% up by 2120.35 Rs. It managed to make new 52 week high in volatile market.
On 21st september its price was 24957Rs. Within one month it has gained 125%..means more than money double.


b) also have a look at http://money.rediff.com/companies/birla-cotsyn-india-ltd/16490252
On 9th september its price was 1.27Rs. Nearly one month it is down 37%.
Share price 80paise per share. Today it fell 4.7%

So dont think that share price is @ Rs.2000 hence it is costlier to buy. or If the share price is @2Rs means it is cheaper to buy.

What matters is underlying business and future prospectives of the company/business.

100Rs. stock up by 1 Rs is same as 1000Rs stock up by 10 Rs. So what matters is how much % u can gain.

Eg: for 10000 u can get 100 shares costing 100Rs. each or 10 shares of 1000Rs each.
at the end of the day 100Rs quotes 101 and 1000 Rs. shres quotes 1010 amout u gained is 100Rs. flat 1% in each case.

So Dont worry about the share price but look for share vluations.

Happy Investing.
God Bless all of Us.

--
KIRANKUMAR