United Stock Exchange of India

A new stock exchange,United Stock Exchange of India, has been promoted by Bank of India, Canara Bank, Andhra Bank, Bank of Baroda, Allahabad Bank, Indian Overseas Bank and Oriental Bank of Commerce jointly with MMTC. Other shareholders include Standard Chartered Bank, Federal Bank, TCS and STCI.

This exchange is expected to come on line this month and is the fourth Currency Futures exchange after BSE, NSE and MCX-SX. For offloading the rest of the stake, the exchange is understood to be in talks with Chicago Mercantile Exchange, the world’s largest financial exchange.

Currently, volumes on the existing currency futures exchanges are just $0.5 billion which is 1/10th of the $50-billion volume on the over-the-counter currency forward market.The objective of this new exchange is to get different constituents of the market onto the currency platforms, and thereby increase participation. Currently, participation comes from the stock and commodity market players with many brokers, including banks, running proprietary books to increase currency volumes.

You can access the website at United Stock Exchange of India

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Kotak Nifty ETF

Kotak Mutual Fund is launching a new open-ended scheme Kotak Nifty ETF. The scheme is like any another Nifty ETF, floating in the market. The investment objective of the fund is to provide returns that closely correspond to the total returns of the S&P CNX Nifty.

The Indicative allocation is 90 to 100% in the stocks comprising S&P CNX Nifty and 0 to 10% in Debt and Money market instruments. The units of the scheme will be listed on NSE and Investors can buy or sell units on the stock exchange.


The minimum investment amount during new fund offer is Rs.10,000 and in multiples of further purchases can be made once the units are listed on the exchange.The nav of the units is closely related to value stocks that form a part nifty.

We already have similar schemes like Nifty Bees and couple of other similar schemes listed. You can read more about at What is Nifty Bees and the Update.

What should investors do?

ETF being a passive investment carries lesser risk as compared to active fund management. The portfolio follows the index and therefore the returns depend on the performance of the index. Hence investors can invest in this scheme and also in a systematic manner once the units are listed on the NSE.

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Market Outlook 2010

Indian Stock Markets have started the year 2010 on a positive note. After a stupendous rise of 80% over the past year , what's in store for Indian Markets this year? Moving into 2010 , Sensex at 17,000 levels, most positives based on FY10E earnings are firmly in the price. The risk-reward is not in favor buying heavily into equities, atleast in the index stocks.

Having said that, in the near term, markets would look forward to the upcoming results season for clues into future corporate profit growth. Indian economy's fundamentals should strengthen further as we move into CY10 and momentum in GDP growth should likely gain steam. This should keep the foreign investors interested in the India story.

Currently India trades at trailing P/E of 19 times of current year earnings. Historically markets have gone upto 20/21 times of current year's earnings, which can propel the Sensex to higher levels of about 18500/19000. And only during bubble times, markets have traded above 30 P/E. which is unlikely.

The key risks for our markets are higher interest rates triggered by rise in inflation, global uncertainties on monetary and fiscal tightening. Any sharp interest rate hike in U.S and in India, could trigger the anticipated correction.

Hence the rally is likely to continue, optimism needs to be backed by higher earnings visibility for FY11 and also earnings upgrades. We can expect market gains to be moderate after a strong 2009.

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Cadila Healthcare

Cadila Healthcare is targeting revenues of US$1 bn in FY2011E versus revenues of US$620 mn reported in FY2009. CDH is ranked fifth in India by revenue. International generic sales accounted for a third of the company’s FY2009 revenues. The company has a presence in niche consumer segments in India. CDH has invested in NCE research in three segments but benefits from these investments are not yet visible.

Some updates on the Company:

Cadila Healthcare has created multiple platforms to ensure stable growth over the medium term. France,US and Japan are expected to drive revenues in the near term. Despite the Rupee appreciation and higher R&D costs in FY2010-11E, the margins are expected to be stable.

The Indian finished dosage remains the most important segment in valuating the company. This is followed by the US market and consumer/animal healthcare business.Early success in the transdermal and oncology segments can drive the price even higher.

Key risks :

Regulatory risks in the form of price controls by the government are the most important. Other industry risks relate to (1) pricing reforms in Europe, (2) increasing consolidation of the global generics industry, (3) global generics players using India’s manufacturing cost advantage, and (4) continuing volatility of the Indian Rupee against the US Dollar.

The EPS for FY09 is Rs.22 and is expected EPS for FY10 is Rs.33. At current market price of Rs.650, the stock is trading at forward p/e of 19. The stock is worth looking at during sharp declines.
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Biggest Scams in Indian Stock Markets

Markets are less volatile, so why not look back at those people who created huge volatility and mess in the Indian stock markets. Yes, we are talking about biggest scamsters in Indian stock markets. These are the biggest scams that hit the Indian stock markets which created havoc among investors and traders.

Read it, know it and don't forget it !

Ramlinga Raju , Founder, Satyam Computers.
Amount : Rs.8,000 crores.
The fraud: Cooked up account books of his company.
Method: Inflated revenues and hid liabilities.


Harshad Mehta, Broker.
Amount : Rs.4,000 crore.
The fraud: Responsible for the securities scam of 1992.
Method: Accused of diverting funds from banks to the tune of over rs.4,000 crores to stock brokers bewteen 1991-1992.

Ketan Parkekh Promoter, NH securities.
Amount : Rs.1,500 crores.
The fraud: Accused of price rigging.
Method: Used to trade in shares under fictious names.

CR Bhansali, Founder, CRB capital markets.
Amount : Rs.1,200 crores.
The fraud: Cheated public of over 1.000 croroes and the sbi of 57 crores.
Method: Raised money from public and transferred it to non-existent companies.

Dinesh Dalmia former MD, DSQ Software.
Amount : Rs.595 crores.
The fraud: Dalmia resorted to illegal ways of making money.
Method: Dalmia resorted to illegal ways of making money through the shares of DSQ software.

Buyer beware !
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Dubai World and Markets

Dubai World, a government investment company, which is having debts totaling around $60 billion, has asked creditors to postpone its forthcoming payments until May. This move by Dubai World has caused fears of a potential default and panic among the global financial system, particularly in banks and emerging markets. Weakness is also attributed to the continuing slide in the dollar, which earlier fell to a 14-year low against the yen.

Dubai’s debt reschedule has cast a shadow on the world, pulling down all the markets from Sydney to Sao Paulo.Markets across Asia and Europe crashed on Friday by fears of fresh financial trouble, threatening to derail the global recovery and holding huge ramifications for India.

For India, which has lakhs of its citizens living and working in Dubai, the concerns are pretty much cleat - job losses and sharply reduced trade. Many Indian companies, particularly in the Infra and Realty sectors which could possibly be hit are Nagarjuna Construction, Larsen & Toubro, Voltas ,Bank of Baroda,SpiceJet and Aban Offshore.

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