Stock Market reaction to Budget

With an 2 hours to go for the budget, the stock market is raring to go. Many pundits say the market will crash. But i feel, the market to be range-bound around 4850 levels.

Whether the market goes up or goes down, play safely.

If the market goes down steeply, go ahead and buy good stocks, as every steep fall is a good buying opportunity.

If the market goes up, it is a good sign. If you have any open position, book profit. It may go up to 4920 levels.

April is crucial, as many publish their 4th quarter results.

All the best with your investments.

Any one wants to watch the budget live in office or where you dont have a TV, you can watch it in the net (

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Little master's great knock!

Today, it is one of the finest day in Indian cricket history, rather the ODI history. Yes, the little master ripped the SA attack with an unbeaten 200 in 147 balls to steer India a comfortable 153 run victory.

With 93 International centuries, 147 half  international centuries, about 200 international wickets, highest run getter in both forms of cricket, he is undoubtedly a MASTER !!

Wishing him more success in the cricket and god bless him with more energy and good health.


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Countdown to the Union Budget - our wishlist

We are just a day from the Union Budget. More focus on Pranab's strategy to
  • counter the fiscal deficit, 
  • push the GDP growth, 
  • control the inflation,
  • roll out plan for GST
  • Plan for the Direct Tax Code roll out
For individuals,
  • Increase in basic tax exemption
  • increase in medical reimbursement limit (from 15000 to atleast Rs.50,000), considering the cost of medication.
  • Increase in the deduction limit u/s 80D for mediclaim insurance to Rs.50,000.
  • With the skyrocketing education cost, there should be a separate deduction for this. This category should be removed from 80C.
  • Increase in the exemption limit for transportation (from the current Rs.800 pm) in line with the pay commission recommendation.
  • Increase in the gratuity exemption limite (from Rs.3,50,000 to Rs.10,00,000).
  • Increase in the 80C deduction limit from Rs.1,00,000 to Rs.2,00,000
  • Reducing the short term capital gains.
  • Senior citizens - Increase in the basic exemption limit.
For Business:
  • Phased removal of stimuli - rather than sudden removal
  • GST roll out plan
  • Extension of STPI tax benefit
 Let us see, how much Pranab can make the wish come true.

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Railway budget highlights

Mamta presented the rail budget today. It is a plain vanila budget with some benefits to the freight, passengers, employment opportunities, more trains etc.,

Some of the benefits to passengers:
  • No change to the passenger fare
  • Cancer patients can travel free, for treatment, in third AC and sleeper classes.
  • Service charges on e-tickets reduced to Rs 10 for sleeper class and Rs 20 for AC classes. The present charges are Rs 15 and Rs 40, respectively.
  • The benefit of 50% concession to the spouse of accredited journalists has been extended to the companions of those who do not have a spouse. Their dependent children of up to 18 years of age would also get 50% concession once a year.

Highlights of the Rail Budget, presented today

No hike in passenger fares
Cancer patients travel free in AC3
Concession to film industry and press.
Children upto 18 yrs travel free
To launch 10 more duronto trains
  1. Yeswantpur (Bangalore) -Delhi (AC) (Weekly)
  2. Mumbai-Secunderabad AC (Bi-weekly)
  3. Pune –Howrah AC (Bi- weekly)
  4. Mumbai-Ernakulam AC (Bi-weekly)
  5. Indore- Mumbai AC (Bi-weekly)
  6. Jaipur-Mumbai AC (Bi-weekly)
  7. Chandigarh-Amritsar
  8. Chennai–Coimbatore
  9. Puri-Howrah
  10. Howrah-Digha
Aims at electrification of 1,000 km route in FY11 Special train named ' Bharat Tirth' to connect Himachal to Kanya Kumari. (all over the country).
Janmabhoomi train: connected areas in western sectors, linking Jodhpur, Lalgarh, etc. To run every week
Karmabhoomi: sleeper trains introduced for the unorganised sector
Introduction of ladies special trains in the name of Matribhumi
Work under Mumbai suburban area under MUTP phase 1 to be completed this year, and under phase 2 to be completed by March 2014
Kolkata Metro to be extended inside the city, 5 stations to be renamed.
Funding for METRO RAIL projects up 5%
FY11 operating ratio pegged at 93.2%
Impact of 6th Pay Commission to railways at Rs 55,000 cr
Will link western corridor development - deal with Japanese firm in March
Cost sharing projects bagged from Andhra Pradesh Government
Propose to run a special train from West Bengal to Bangladesh

FY11 Gross Traffic Receipts seen at Rs 94,700 crore
To acquire 80,000 new wagons
FY11 working spend seen at Rs 87,100 crore
To beat FY10 freight target by 8 million tonnes
To start door-to-door service for freight movement
To launch tourist trains on 16 routes
To introduce 54 new trains  in FY11
Will launch double-decker trains on pilot basis
Allocation for implementing 1,000 km news lines in a year almost doubles to Rs 4,411 crore.
Passenger amenities Rs 1,200 cr
Appropriation for pension fund at Rs 14,500 cr

Expenditure of 783 cr after meeing the dividend liability
Budget estimates: Target for freight set at 944 million tonnes (up 54 million metric tonnes)
Non core business earning seen at Rs 1,000 cr
Cuts freight on foodgrains, kerosene by Rs 100 / wagon
22.6 million free CFL lights already distributed
Premium tatkal service for parcel and freight movement
Autmobile and ancillary hubs in 10 different locatins on PPP mode
5 wagon industry in JV-PPP mode, in Secundrabad,AP,Guwahati,Orissa and Haldia
Wagon repair shop in Mumbai
Agrees to set up railway coach factory in Singur if land is available;
Intergral coach factory in Chennai to be modernised
Rae Bareli coach factory, the work will begin within a year.
Railway will establish strong research partnership with institutes like IIT, CSIR etc
Corporate Social Responsibilty thorugh expansion of Rashtriya Swastha Yojana
Railways has 80,000 women employees. creches and hostels to be set up for children of women employees
MoU with health and HRD Ministry; 101 secondary hospitals, and multi functional hospitals with AIIMS and Vellore to be set up
Staff Welfare: 'House for all' scheme for railways employees - Boost for construction materials
Railways to be the lead partner in Common Wealth Games 2010. Also to introduce special train for the games.
To provide increased employment opportunity in railways through sports quota
To promote sports, wil build  five sports complexes in Delhi, Secundabad, Chennai Kolkata and Mumbai.
To strengthen the RPF security force; Mahila bahini -  for security of women to be introduced
Will construct underpasses at railway stations to counter problem of lack of usage of foot overbridges.
3,000 level crossings to be mended this year, rest to be done in within next 5 years.
Introducing modern trolleys at all imp stations to assist senior citizens, physically handicapped and children
Six bottling plants on PPP basis to provide clean water at cheaper rates to passengers
Upgradation of 94 stations. Propose to take up another 93 multi functional stations.
Examination fee to be exempted for minority & women,with income less than Rs.50,000 in a year
117 trains will be flagged off
Target: To implement 1,000 route km in one year, 25,000 km in Vision 2020
No privatisaton of railways, says is proud of 14 LAKH employees. To set up a special task force to clear proposals for investments within 100 days
Only 10,419 km of railways added between 1958 and now.
Vision 2020 goals broken up in to short, medium and long term projects. The latter two will require funds and can be done in 5 years.

Source: Business Standard & Live budget presentation

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Will Mamatha outsmart Lalu in the Railway budget

Stock markets are ignoring the railway related stocks (Kalindee, Texmaco, Titagargh...etc.,). Market sentiments are that Mamatha is not doing any great in terms of growth plans. These stocks were the creams when the railway budgets were presented. She has to do wonders to get the support of the market.

Tomorrow (24th Feb) is the Railway budget and India expects something from the Mamatha's team:
  • More faster trains
  • No increase in fares
  • More thrust to PPP (Private Public Partnership) - ACC, L&T & Adani may benefit.
  • Increase revenue through freight (transportation)
  • More connecting rails
Let us see how the market reacts after the Railway budget. Keep an eye on the stocks.

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ULIP - Who needs to control - SEBI or IRDA ?

IRDA questions market regulator’s show cause to insurers on conceptual, legal, structural grounds. SEBI's contention is that the insurance companies are offering products mixing Insurance and Financial Products (in the nature of Mutual fund).

What if SEBI treats it as Mutual fund and starts governing these ULIP, apart from IRDA?
  • The accounting will be different.
  • The initial load will go off (GOOD NEWS), as commissions are not allowed.
  • Exit load (surrender value) will also come down.
  • More investor protection measures & transparency will come into play.
  • Tax benefits will vary (Any way we are not sure what the tax benefits after the new tax code, be it either Insurance related or Mutual fund)

Following is the full article for your reading. Source: Business Standard.
The Insurance Regulatory and Development Authority (Irda) has said the Securities and Exchange Board of India’s (SEBI) notice to insurance companies on unit-linked insurance plans (Ulips) sold by them was “misconceived on conceptual, legal and structural grounds”.

Irda’s letter to the market regulator comes after the latter’s showcause notice to insurance companies last month, asking why they had not taken Sebi’s approval to sell Ulips.

In a letter to Sebi Chairman C B Bhave last week, Irda’s Deputy Director (Life) Sudipta Bhattachaya pointed out that the regulatory set up in India, which had legal backing, was clearly demarcated.

In its letter, the insurance regulator said the road map for regulation of Ulips by Irda was “well laid down, and settled,” and there was “no merit” in the contention that insurers must obtain a certificate of registration from the Sebi for selling these products.

Following the Sebi showcause notice on January 15, life insurers had approached Irda. “While there is an element of market exposure, the insurance component is much higher. The rules are fairly clear and investor interest is clearly protected,” said the CEO of one of the largest life insurance companies. For some private players, Ulips account for close to 90 per cent of new business.

Application of mutual fund rules to Ulips would mean that companies will not be able to pass on the commission to customers, since entry loads have been banned for mutual funds. In addition, the investment and accounting rules are different for Ulips and mutual funds.

Sources close to the development said Irda’s letter has pointed out the legal provisions that limited Sebi’s jurisdiction to securities and securities related transaction.“What constitutes a security has been defined in the Securities Contract (Regulations) Act, 1956 and insurance contracts are not regulated under these securities laws,” it said.

Further, Irda said that structurally, Ulips are distinct from mutual funds and pointed out that the minimum capital requirement for an insurance company was Rs 100 crore and also maintain around 3 per cent as solvency capital. In contrast, an asset management company “is required to manage thousands of crores of assets with just Rs 10 crore”.

“Certain similarities in the features of various products issued in the financial world would not necessarily imply regulatory overlap,” Irda added.

Asked to comment, a senior Sebi official said: “Ulips are hybrid investment products with insurance cover and since it involves management of funds, Sebi has a role in protecting the interests of investors... Ulips are fit for regulation under Sebi’s mutual fund regulations.”

He, however, added that the Sebi was waiting for replies from insurance companies before deciding on how to regulate them.

In its letter to Sebi, sources said Irda also attached a copy of its mandate, which states that the regulator has to “protect the interest of the holders of insurance policies”.

Sandeep Parekh, a faculty member at the Indian Institute of Management, Ahmadabad and a former Sebi legal advisor said buyers of insurance policies were not sophisticated enough to understand the fine print or the risks associated with such plans.

“Ulips, which are mutual fund products with a fig leaf of insurance, ought to be regulated by Sebi. This is notwithstanding the fact that the insurance regulator already regulates it. There is nothing unusual with more than one regulator regulating a product,” he added and pointed to the joint regulation of currency futures by the Reserve Bank of India and Sebi.
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Some clarifications on the subjects to be covered in the blog!

Thank you so much for the immediate response to my move to post articles on Health, Sports and Job Market. I have received calls showing concerns that I may move out from the finance side.

Just to clarify, I just thought of posting Health and Job related articles in this blog, as it is more relevant to today's executives.  With lot of stress, lack of time to exercise, irregular food habits, today's executive finds it very difficult to cope the work pressure. So, that is the reason I have started to post articles on these lines.

Again, this blog will not deviate from the purpose for which it is created. To put in finance related language, the Main objects remain the same and only the incidental objects are invoked. :-).

Thanks once again for your concern for my blog.

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SBI providing seed capital to SMEs for budding entrepreneurs.

Good news for Small and Medium Enterprises (SMEs). State Bank of India is providing seed capital upto Rs.10 lakhs to budding entrepreneurs. What is so special? Here is the speciality:
  • The seed capital is interest free
  • You can repay the seed capital in 5 year
This is a good opportunity for the aspiring entrepreneurs to start their ventures. So, walk up to your nearby SBI and get more information on the requirements to avail this seed capital.

I know many bright entrepreneurs looking out for funds and finding it difficult in this economic downturn, to get loans or finance. Either they are asked to pledge their properties or the rate of interest is too high to make it viable to borrow.

So avail this opportunity. Who knows - in the next election, the parties will announce writing off this seed capital also!!

Below is the news article, which appeared in the Economic Times today.


NEW DELHI: State Bank of India (SBI) will provide interest-free seed capital of up to Rs 10 lakh to aspiring entreprenuers under a new scheme, SBI SMILE, which is specially targeted to encourage small and medium enterprises in the country.

The scheme will be in place initially for one year, after which the bank could extend it, if the situation warrants.

“Given the economic downturn, some entrepreneurs have not been unable to raise any capital. The scheme will provide them a platform to kick-start their businesses,” said BS Bhasin, chief general manager, SME, at the country’s largest lender.

Currently, banks give loans to the entrepreneurs, only if they have a substantial capital to invest. The loan amount is around 70-80% of the total project cost. Under the new scheme, SBI will provide the seed capital and entrepreneur will also be able to seek a loan. Loan terms and interest rates will be determined as per the existing guidelines. “There will be no interest on the seed capital. You can pay that amount after you’ve serviced your loan,” Mr Bhasin said.

The bank will offer a five-year moratorium on paying the seed capital amount.

The bank, however, has not set any target for the amount it will disburse under the scheme. Already, SBI has SME loans of Rs 1,00,000 crore outstanding on its account books.

As per the central bank guidelines, a bank can give up to Rs 10 crore as loan to a medium enterprises for investment in plant and machinery.

Other banks are not impressed with the scheme. “This is another gimmick. The bank is flush with liquidity and hence this scheme. Otherwise how would you explain that SBI has lowered the target from 29% to 25% for the current fiscal,” said a senior official with a Mumbai-based private sector bank.

Earlier, the banking regulator RBI had expressed concerns over a slowdown in lending to SME sector. It had extended a special refinance scheme of $1.4 billion to Small Industries Development Bank of India (SIDBI) to enable it to lend to banks and financial institutions towards incremental SME loans.
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Go Green.....Gardening & Oraganic vegetables at home

Today, I was chatting with my colleagues in the cafetaria. To my surprise, I found that most of them are interested in organic foods, growing vegetables in their places. One has already attended a course on organic forming, conducted by a foreign NGO.
The topic started over a cup of tea. They asked me why I take green tea and which is the good brand. My interest level in the dicussion went up, inspite of the people cheering Shewag for his half century. I started expalaining what a Green Tea and how it differs from the normal tea.

Slowly, the topic changed and one of my colleagues mentioned that he attended a day long training program on organic farming, preparation of organic manure at home. What was interesting is that there were many participants in their early 30s, who attended and shared their experiences in growing vegetables in their terraces. The more interesting part is that they are all techies, working in MNCs. They are getting good vegetables at their home and when in excess, share the same with their neighbours. The vegetable inflation has not bothered them and they are smiling at the inflation.

When I started saying that I am growing Tomato, Mint, Palak, Ladiesfinger, Onion, Lemongrass, Wheatgrass apart from the flowing plants in my balcony, they disengaged themselves from the cricket match and started listening to me.

Lot of ideas came out during the discussion, on balcony and terrace gardening and preparation of manure for the plants at home, without any chemicals.

Will share the growing of some good plants inthe balcony in the coming posts.

Let us go Green, plant our own vegetables, save the economy and improve our health.

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Wheat Grass - Natural healthy food

I was discussing this with my colleague, who is also getting into the wheat grass world, on growing the grass at home.

Not many know that we can grow and have juice of wheat grass. Why suddenly wheat grass?

Yes, of late if you visit any restauarants of thematic nature, they serve you Wheat Grass juice? What is so special about it?

It has:
  • Chlorophyll,
  • beta carotene,
  • more than 80 minerals,
  • 18 amino acids
  • Vitamins - C, E, B12
  • Iron
  • Calcium

Research has shown that 1 kg of wheatgrass matches the nutritional value of 22 kg of ordinary garden vegetables.

Wheatgrass is generally consumed as juice which is a complete food with regenerative and protective qualities. Its regular use
  • improves perception and increases mental and emotional calmness.
  • aids in digestion,
  • prevents graying of hair,
  • prevents skin diseases,
  • prevents asthma, arthritis and diabetes
  • helps in detoxification of heavy metal from the body.
In fact, because of its blood purifying qualities, wheatgrass is used in the treatment of leukemia and some other forms of cancer.

The normal dosage of wheatgrass juice is 25 to 50 gm twice a day on an empty stomach. The average dosage taken by consumers of wheatgrass is 3.5 grams (powder or tablets).

Some also have a fresh-squeezed 30 ml shot once daily or for more therapeutic benefits a higher dose up to 2–4 oz (60 - 120 ml) taken 1-3 times per day on an empty stomach and before meals. For detoxification, some users may increase their intake to 3–4 times per day.

It can be extracted from wheatgrass in a juicer. One problem with the grass is that it cannot be stored and has to be consumed immediately.

You can chew the wheatgrass and discard the pulp.

Sounds interesting....yes...more interesting is that you need not have space to grow this grass. Let me tell you how to grow this grass in the next post. I have grown this in my apartment and it is very easy to maintain.

The above details are sourced from various websites relating to wheatgrass.

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Constructive feedbacks !!


It is really nice to get feedbacks and if you are open-minded, you will get more suggestions. I had many suggestions during the course of this one year of my blogging:

  1. Write the blogs in a masked name

  2. Write on something which is of recent happening

  3. Write on the recent economic situations

  4. Write on Stock market basics

  5. Write on certain financial jargons (to make life easy)
I tried my best to take note of these suggestions and impelemented the same.

Recently, one of my well wishers (my name sake), suggested to write on simple topics which is of importance to everyone! Sounded resonable to me. I took the advise of my friend to write in a masked name (refer 1 above) and am writing there, venting out my feelings and thoughts on the day to day matters. Now, for some of the general matters, I can write in this blog itself. I have created a separate tag called "Random" meaning random thoughts - Ranging from Health, Sports, Job Market etc.,!

Thanks to all for giving me the feedback and suggestions - Keep suggesting me.

Am feeling happy that I am being a consultant on blog designing to a 5th person ! (The funniest part is I am not a tech person :-D )

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Budget - 2010, expectations


It is budget time again. What to expect from the Finance Minister?

Tax proposals:
  • Stimulus to continue
  • More tax benefits
    • Deductions
    • Increase Basic exemption limit
    • Increase the gratuity limit
    • Increase the medical reimbursement limit (from Rs.15,000)
  • Reduction in tax rates
    • Short term capital gains
    • Personal tax slabs to be widened
  • Controlling the inflation by tax sops to industries
The above are just to kindle the interest and may I request you to get the list ready, so that we can see where we are against the budget!

Plan outlay

How he is going to fix the situation? I mean, the fiscal deficit. It is widening.

Also, we need to see how the previous budget vs. the actual situation is.

Look forward to your views.

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The NTPC Follow on Public Offere was fully subscribed (overall -1.2 times and the retail sector 0.25 times) - Thanks to LIC and SBI for pitching in to save the dignity of this issue. While the below average issues are over-subscribed, the fundamentally strong issue like NTPC is not even subscribed by the public. Why? Let me share my thoughts on the same and would like others also to share their views.

(1) French auction method
Under this method the highest bidders get a priority on allotment. This is useful when the current market price is much more than the offer price. Here the offer price was Rs.201 and the market price was Rs.205. Who will buy in the issue, block the funds. If the market falls, they may get even below Rs.200! Government failed to understand this.

(2) The Government holding was offered and they could have given at a lower price to the retail investors. This also, contributed for the failure. Probably, they thought that people will be mad to get these shares.

(3) If the market price and the offer price are very close, investors will get attracted, if the stocks are not that liquid (not widely traded in volumes) in the market. Here, NTPC was traded widely.

(4) If they are not really looking at the retail sector, then they could have directly placed the shares with LIC & SBI. This would have saved the issue cost and saved the government from this embarassment.
So, what is the fun in this FPO - NOTHING. With the other FPOs - REC & NMDC in the offing in Feb 2010, they would have learnt the lesson with the NTPC issue.

I solicit your views on this.

Cheers and Happy Weekend,
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