Master And Student - All About Stock 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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Buying Mutual Funds Online has been made easy. The National Stock Exchange -NSE is set to launch a Mutual Fund Service System - MFSS on November 30. Recently, SEBI had earlier permitted brokers to use stock exchange terminals to buy or sell Mutual Fund products. This move is aimed at increasing the reach of Mutual Fund products.

The new system allows brokers to buy and sell mutual funds through the exchange. Transactions are to be settled on a T+1 basis. Currently NSDL will be the sole Depository, for settlement of the system.

What does this mean for the investors?

This would essentially mean that investors can buy Mutual Fund units through their brokers. They can buy Mutual Fund units in their existing trading account, just like buying shares. It is going to bring about more convenience for the investors who need not have to go to a separate distributor now.

Investments in mutual funds have been made easy for the investors, with just a click or through a phone call. But there are couple of points to ponder about.
1. Investments made through distributors or direct online purchases don't have an entry load. But, in this case you are expected to pay the brokers the usual commissions of about 1%, which is definitely on the higher side.
2. Though it is made easier for retail investors, the Mutual Fund investments may end-up turning investors into traders, as it is been happening in equity markets.

Anyway this is another paradigm shift for the mutual fund industry and for the investors from the way they have been investing till now.

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Cox and Kings (India) one of the leading holiday brands that is known for its - One Stop Shop for all travel services, is coming out with an IPO of 18,496,640 equity shares of Rs 10 each for cash at a price band of Rs 316-330/share.

Details of the issue:
Issue date: Open from November 18, 2009 to November 20, 2009.
Issue size : Rs 610 crores.
CARE has assigned a IPO GRADE 4 and it indicates above average fundamentals.
Listing at BSE and NSE.

The objective of the issue is for repayment of loans,acquisitions and upgrading existing operations. Its business can be broadly categorized into Corporate Travel, Leisure Travel,Forex and Visa Processing. It provides end to end travel solutions including land, air and cruise bookings,local sightseeing,hotel bookings,visa, passport and medical insurance assistance.

The standalone EPS for the year 2009 is Rs.14 and at lower end of the price band, it would trade at an P/E of 22 and at higher end, it is 26. The issue looks reasonable but the only concern being, recent IPOs have not gone well with the market due to overpricing of many issues. Long term investors can consider investing in this issue.

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