Investment Valuation in India

At the crux of this entire political conundrum, the core issue, which lays quite forlorn and forgotten is the nuclear issue. Today the politicians might have turned it into an opportunity to topple the UPA Govt but few remember that it all started with the nuclear deal. Surely few of these politicians would have actually taken the effort to read the 82-page nuclear deal and tried to understand what it is all about. Somehow that does not come as a surprise at all! So without getting into the “political” angle of it, let us take a look at what exactly is this nuclear issue. What would India gain if UPA wins the vote and what we stand to lose if the deal gets cancelled? What exactly is nuclear power? Nuclear power is generated using Uranium, which is a metal mined in various parts of the world. It produces around 11% of the world's energy needs, and produces huge amounts of energy from small amounts of fuel, without the pollution that you'd get from burning fossil fuels. W...

Markets Correlation with the Trust Vote Nov 7, 1990 VP Singh Lost 1381 (sensex on vote date) +3.7% Sensex up 2.2% next day at 1412 May 28, 1996 AB Vajpayee Resigned before motion 3636 (sensex on vote date) -0.5% Sensex up 2.9% next day at 3740.40 April 11, 1997 HD Dewe Gowda Won 3634 (sensex on vote date) +1% Sensex down 1.2% next day at 3589.70 April 17, 1999 ABVajpayee Won 3327 (sensex on vote date) -6.9% Sensex up 3.7% next day at 451.4 July 22, 2008 Manmohan Singh Won 14104.2 (sensex on vote date) +1.83% Sensex up 5.94% next day by 836 points at 14942.28 Ref: www.ndtvprofit.com

When most investors think about the fundamental value of a company, they usually think of the price to earnings ratio. The P/E ratio tells you how much you are paying for each rupee of a company's earnings (profit). It is popular because it's easy to understand, but in some situations it can be misleading and is not a substitute for real fundamental research. Still, it is a useful tool for valuing an individual stock and can also be used to help you form an opinion on the likely future direction of the stock market as a whole. Understanding the Price to Earnings Ratio The P/E ratio is simply a mathematical calculation. It is the current price of one share of stock divided by earnings per share. The first thing to understand about the P/E ratio is that it is designed to value a share of stock, not a company, and stocks are priced per share. The P/E ratio tells you what the market is willing to pay right now for anticipated future earnings, assuming that the earnings remain const...

SEBI has made rules for valuation of securities by Mutual Funds. Lets look at the valuation Equity Securities for now. Mutual funds shall categorise the securities according to the following norms 1. TRADED SECURITIES : When a security (other than Government Securities) is not traded on any stock exchange on a particular valuation day, the value at which it was traded on the selected stock exchange or any other stock exchange, as the case may be, on the earliest previous day may be used provided such date is not more than thirty days prior to valuation date. 2. THINLY TRADED SECURITIES : (i) Thinly Traded Equity/Equity Related Securities : When trading in an equity/equity related security (such as convertible debentures, equity warrants, etc.) in a month is less than Rs. 5 lacs or the total volume is less than 50,000 shares, it shall be considered as a thinly traded security and valued accordingly. Where a stock exchange identifies the "thinly traded" securities by applyi...

Well I know thats a similar title as the previous post.... but just didnt want the previous one to get lengthier. We have a come a long way from 130's to 13000's from the 80's till date. That's a 1300 times increase in 20 years. Thats a 26% CAGR in-spite of the fall from 20,873 (8th jan'08) to 13,635 (18th July'08). Mr Amitabh Chakraborty 's (President, Equities, Religare Securities; CFA; FRM) views on the markets are as follows (extracts): Limited downside from now. Sensex to be in the range of 10500 to 14500 this year There is a slow down of growth but not de-growth Estimate sales grwoth is 29% while estimated PAT growth is 18% Capital Goods sector looks good . the Banks look sluggish but may still come out surprisingly well. RBI should ease the rates by the year end. Oil should trade in the range of $100-110 per barrel. FED should hike rates by december leading to money flow from commodities to Equities. Political condition should be OK and the Government...

Hi guys, This saturday (19th July '08), I attended the All India Conference on Capital markets organised by the ICAI at the Taj Bengal, Kolkata where dignatories of the Capital markets arrived and presentade their views on the markets and the road ahead. I was pleasantly surprised to note that almost all the speakers (trust me, they are the big shots in the industry) are positive on the marekets ahead. I am keen to highlight some of the points Mr Nilesh Shah (Deputy Managing Director, ICICI Prudential AMC, managing close to US$14bn, a CA Gold Medalist and a Cost accountant) came up wth. What went wrong with the markets? High Oil Price (India has the highest Oil import to GDP ratio) Higher Trade Deficit (weaker Rupee) Higher Inflation (backed by higher subsidy burden) High Fiscal Deficit High Interest rate Slowing Growth Traders are short and investors are sitting on cash Rising oil prices (India currently pays $50bn for oil annually) Clearly nothing has been going good for the ec...

This is for all CAs in Practice or those who want to obtain a Certificate of practice. We all know what a Practicing CA does. But most of who are not in practice would know that there are a lot of restrictions on a practicing CA. The olst important of them is that a Practicing CA is not allowed to enter into any other business without the prior approval of the CA Institute/council. However, This is not the case any more. Although the council still maintains that a member holding Certificate of Practice (CoP) has to take prior approval, there has been major relaxations. The Chartered Accountants Act states that ;- A member of the Institute shall be deemed “to be in practice” when individually or in partnership with Chartered Accountants in practice, he, in consideration of remuneration received or to be received- (i) engages himself in the practice of accountancy; or (ii) offers to perform or performs service involving the auditing or verification of financial transactions, books, acco...