ALLAHABAD BANK Remains a good banking stock to hold

Why ALLAHABAD BANK Remains a good banking stock to hold?
The ALLAHABAD BANK presented a very good results for the first quarter ended 30th June 2009. For Q1FY10, the bank posted a YoY 28% rise in total income earned at Rs.2377.70 crore. Deposits were at Rs 89,400 crore and advances at Rs 61,000 crore, meaning the total business of the bank has crossed Rs,150,000 crore. Operating profit was at Rs 591 crore almost twice that was posted in Q1FY09. The net profit rose three times at Rs.302.86 crore. This surge is more pronounced as in Q1FY09, the bank had made a huge provisioning of Rs.202.24 crore as against Rs.39.63 crore in current Q1. Its net interest income grew 34.3% to 629 crore. The growth in trading profit was also quite smart – it was up over 5 times at Rs.214 crore.
The bank has recovered Rs 50 crore from defaulters. It upgraded loans to the tune of Rs.97 crore and has written off Rs.50 crore. Gross NPA is at 1.79% as against 1.87% in Q1FY09 and net NPA was at 0.37%, up from 0.72% in Q1FY09.
This is one of the oldest public sector banks of India, established way back in 1865. The Govt of India has a 55.23% stake and institutions hold 26.45% of which LIC has a 11.63%, leaving a floating stock of 18.32%.
The stock touched a high of Rs.90 on 2nd June 2009 in anticipation of the Budget making some favorable recommendations, Since then, it has come down but yet managed to hold strong and is now quoted at Rs.79. Remains a good banking stock to hold. thanks

INDOWIND ENERGY Stay away Stock

Net profit is at Rs.7.06 crore, its highest ever in any quarter and almost equal to Rs.7.20 crore which it posted for 12 months FY09. QoQ, net profit is up more than 7.5 times and YoY, it is up 60%.
It has a net sales for Q1FY10 of Rs.8.83 crore, down 72% on a QoQ and down 34% on a YoY. OPM is at an unbelievable 101% and NPM at 80%. This is even better than a realty company!
The company has an other income of Rs.2.19 crore and operating expense is down to a meager Rs.2.05 crore of which Rs.1.81 crore is via ‘other expense’ and Rs.24 lakhs on employee cost . Where is the expense on raw materials? Does this mean that income in first quarter was from trading income only? Something somewhere smells completely fishy here.
The stock was up yesterday by 9.76% at Rs.36. Purely a speculative stock. Just get out using this momentum as the results are more of a warning than a sign of good tidings. thanks

SATYAM Bidding process News Satyam Share price

SATYAM STAKE SALE Bidding process will be received by 10 a.m. on 13th April and would be opened on that day itself. Since market is closed on 14th April,
Who are final bidders for Satyam?
As of date, there are 4 serious bidders in the fray and they are L&T, Tech Mahindra, Cognizant Technologies and P E Firm W L Ross.
Earlier, iGate, Hinduja Group and B K Modi controlled Spice Group opted out of the race, though, Spice Group maintains that it could re-enter the bidding, if its conditions for an open auction and transparent process are met.
There has been speculation that IBM has pulled out of the race, on fears of 13 US Class Action Suits, filed against Satyam in courts by ADR holders.

What will be the expected Satyam Share price after bidding?
Satyam is owning close to 75 lakh Sq.Feet of constructed area across the globe.
The present value of all these real estates is pegged at close to Rs. 4,000 crores.
prospects of recovering funds of Satyam, having diverted to Maytas. valuation of Rs.60- Rs.72 per share. Also, if two top acquirers are in a 10% band, open bidding can take it to upper range of Rs. 72.

Suggestion to the Satyam Stock investors.
Going with current trends bids are likely to be aggressive and share price is likely to react upward. In this situation, if one remains invested upto 15th April in the stock would stand to gain.

Make Profit Out Of Satyam Shares Loss Trick Here

Want to make profit out Of Satyam Shares Investment Loss. Everybody is aware of recent Satyam fiasco. I got badly stung and I would like to share my experience so that others can avoid making similar mistakes.

The day Ramalingam Raju resigned, I saw the share price of Satyam tumble from Rs 180 to Rs 90 in a matter of minutes. Now that by itself cannot be a valid reason for the share price to tumble. I became greedy and bought 2000 shares of Satyam @ Rs 90.

Later on in the same day, I learn that he confessed to committing a series of frauds !!! Now that is something serious. If the profits had been manipulated to the extent of Rs 7,000 Crores over several years, then the real value of the Satyam share should be Rs 10.

Justifiably, the share price of Satyam fell to Rs 10 (or actually to Rs 6.50 also) the very next day and is fluctuating between Rs 20 to Rs 38.

I lost a great deal of money in the process. How does one come out of the messy situation?

The only solution is to sell some shares of Satyam at every rise and buy them back at a lower price. Even if I sell 500 shares every day and buy back at a profit of Rs 2 after deducting all expenses, I make a profit of Rs 1,000 per day. I may not be lucky enough to do it every day so it may take a year to come out of the mess.

IT SECTOR – GOOD, BAD OR UGLY

The Satyam scam is not even a week old. The skeletons continue to threaten falling from the cupboard of Satyam and there is no doubt that the confidence of the investor has now been literally beaten to a pulp. With the eyes of the world on India in the aftermath of this scam breaking out, what is commendable is the swift way in which the Govt has managed to swoop down and take control. Probably we have seen such speed from the Govt for the first time ever.
The new board with eminent personalities like Deepak Parekh of HDFC, Kiran Karnik and former SEBI member C Achutan has managed to repose some faith back. Wipro. Another biggie from the Big Four IT companies of India, Wipro disclosed that the World Bank had determined in June 2007 the company would be ineligible for the bank's direct contracts up to 2011 citing a conflict of interest policy. Wipro said its revenues from World Bank were insignificant and the decision would not affect its business and results.
ow does the IT sector for now?
One cannot beat the chest and say for sure, crying from rooftops that this is the sector to back! Satyam revival would depend on how the Govt goes ahead and one has to see if there is any company willing to takeover. After Wipro, the market, right now, does not know how many more companies would now come back with such damaging disclosures.
To a large extent, a lot would depend for the sector on the Q3FY09 results of Infosys, expected tomorrow. Though analysts are of the opinion that it might miss its guidance, even if the company manages to show a growth rate over 20% in the topline and bottomline, the sentiments would improve.
So if IT is your flavour, best to wait and see how Satyam goes ahead from here and how Infy manages to post its Q3 numbers. Mid cap and small cap IT stocks would mostly have no reckoning on the bourses.

PSU Sixth pay revision

Govt approves higher pay for central PSU officers 20, 2008

Union Cabinet today (November 20) has approved revised pay scales for Central Public Sector Undertaking (CPSU) employees.Union Cabinet approved uniform fitment of 30% of basic pay plus dearness allowance (DA) for profit making PSUs with effect from Jan. 1, 2007. The decision, taken by the Cabinet at a meeting chaired by Prime Minister Manmohan Singh today, was based on recommendations given by the Second Pay Revision Committee.
For weak and non-profitable PSUs, the fitment will depend on their affordability and will range between 10% and 20%.
The package would include revision in other allowances like house rent allowance (HRA), besides performance related incentives, said Prithviraj Chavan, minister of state in prime minister`s office.While the new pay structure would be implementable from Jan. 1 2007, the new allowances would accrue to employees only after the decision is notified by individual units.
The Cabinet relied on the committee of secretaries recommendations to classify PSUs into four categories - A, B, C and D, instead of five categories - A+, A, B, C and D recommended by the Rao Committee in May.

The package would include revision in dearness allowance and other allowances, besides performance related incentives. Extra outgo on account of the new pay structure would be borne by individual CPSUs and no budgetary support is involved. While the new pay structure would be implementable from January 1, 2007, the new allowances would accrue to employees only after the decision is notified by individual units.

Related links:
PSU pay panel for 50-60% revision

http://www.myiris.com/newsCentre/newsPopup.php?fileR=20081120161707194&dir=2008/11/20&secID=livenews

Testing Indian Stock Market A GOLDEN OPPORTUNITY

The Monday morning blues worsened with the stock exchanges in India opening with a resounding crash. It was with utter disbelief that one watched the stocks and indices plummet, flirting close with their new 52-week lows. It has been a free fall and no one could really predict the bottom at this juncture. The only verdict which all agreed upon was – the going looks very tough right now.

The Indian markets had to absorb two new’s at one time – one was Lehman Brothers filing for bankruptcy and then the other news of Merrill Lynch, the world’s largest broking firm, being bought over by Bank of America for $50 billion. These are two of the biggest “FIIs” for India and the fact that these two are in such grave trouble, sent a wave of panic. There is now panic that any and every bank in USA could topple. There are similar, concerned hushed whispers in the corridors about the health of AIG and Washington Mutual. So the reason for the panic right now is – how many more banks/fund houses in USA are on the brink and would collapse? Though analysts said that the Indian markets were over reacting, the markets paid no heed and continued southwards.

Right now the biggest worry is the selling by FIIs, which is expected to continue like an avalanche, would take the markets down further. As per data on the NSE, Foreign institutional investors (FIIs) were net equity seller’s worth Rs 1497.67crore on Friday, 12 September 2008. FIIs were net sellers of Rs 777.40 crore in the futures & options segment. What has aggravated the sell off by the FIIs is that some of the Asian markets are closed today, and in their panic to liquidate, they are selling today on Dalal Street.

The sell off is happening mainly in frontline and mid range stocks. Real Estate sector stocks faced a major sell off on perception that FIIs have invested heavily in this sector. Lehman has confirmed that there would be no threat to the investments it made in Unitech but the markets were in no mood to listen and the stock touched a new low today. Lehman Brothers Real Estate partners have invested Rs.740 crore for a 50% stake in Unitech’s Western Express Highway project in Mumbai.

IT stocks were down as banking, insurance and finance forms a large chunk of business from USA. Confidence has been shaken due to the collapse of Lehman Brothers and its effect on the US financial sector. Banking stocks have also been butchered as after Lehman collapse, investors seem to have lost all appetite for financial stocks.

This is not a time to book profits/losses, there is no need to work oneself into a panic. This is the best time to go bottom picking. Yes, globally things do not look very good and maybe, some more liquidation would come in; there would be major global retrenchments; lowering of earning estimates. But this fall on the Indian markets was necessary for re-correcting, cooling off the over heated bubble Indian markets had reached.

New bottoms will most likely get tested and index could go down further from this level. But in USA, this churning appears to be the last and things are nearing the end. At this juncture, it is difficult to pick the bottom for the markets. But yes, India remains relatively safer, economically. The falling price of crude is good news. The US dollar vis-à-vis the other currency has fallen but is rising against the rupee due to the FII sell off. Indian markets would take the cue from the Asian markets which would open tomorrow morning and from the US markets tonight. There could be some more sell off’s tomorrow and now we should look for stabilisation and not recovery.

By Ruma Dubey

When To Invest in Shares Market

Investing in Shares is an art and a science. The best time to start is NOW. To understand why, please visit prashantjain.pdf
Best returns are typically on investments made in bad times!
The markets have become very volatile. The best way to invest is as follows:

1. Open an on-line Trading Account

2. Link it to your Demat and Bank Account

3. Make a list of 4 to 10 fundamentally good shares

4. Decide how much you want to invest lump-sum (NOW) and every month

5. Invest only half the lump-sum amount NOW. Keep the other half in a liquid fund where you can withdraw at will to invest whenever the markets crash. There are some liquid funds that offer as much as 9% p.a. returns.

6. To understand the rest, let us assume you wish you invest Rs 10 lakhs NOW and additionally Rs 50,000 more every month.

7. The model portfolio chosen is:

Name of the Share	Current Market Price	No of Shares to be purchased NOW	Investment
Reliance Industries	2100	60	126,000
Infosys	1700	75	127,500
Nagarjuna Fert	37	3200	118,400
JP Hydro	50	2500	125,000
		TOTAL	496,900
		Cash	503,100
		Grand Total	1,000,000

8. If you want to buy 1000 shares of JP Hydro @ Rs 50 each, don’t be in a hurry and place the order as “Buy 1000 shares of JP Hydro @ Rs 50”. Place the order as follows:

Buy 100 Shares @ Rs 50.00

Buy 200 more @ Rs 49.75

Buy 300 more @ Rs 49.50

Buy 400 more @ Rs 49.25

9. Do not worry if the share price does not fall to Rs 49.25 and you are un-able to buy all the shares. Place the order again the next day for the residual shares. In case the price drops below Rs 49.25, use the surplus cash to keep buying small lots. Make sure that you DO NOT place BUY orders for more shares that what you can pay for to take delivery as you may have to sell them at a loss in case the price closes at a lower level. You should be able to pay for and take delivery of all the shares bought.

10. Having bought the shares, place a SELL order @ 1% + Brokerage immediately. If you bought 100 shares @ Rs 50, place a sell order for 100 shares @ Rs 50.55 (assuming intra day brokerage is 0.05, profit would be Re 0.50 or 1%). Having sold the shares, place another BUY order for 100 shares @ Rs 50 and keep repeating the process. So, for every squared-up transaction, you will earn 1%.

11. In case, you are un-able to sell the shares on the same day, place the SELL order on the next trading day @ Rs 51 OR the opening price (which-ever is higher). Having sold the shares, try to buy back at Re 0.55 less. Make sure that you DO NOT place SELL orders for more shares that what you have for giving delivery as you may have to buy them back at a loss in case the price closes at a higher level. Place the sell orders in the reverse order ( Sell 100 @ 51.00, 200 @ 51.25, 300 @ 51.50 and 400 @ 51.75)

12. By constantly following these rules, you will keep on reducing the cost of acquisition of your portfolio.

13. It is very important to decide the PIVOT point everyday. You should keep buying more shares at every fall below the PIVOT point and sell them at every rise above the PIVOT point. This is slightly complicated and requires some experience.

14. Make sure that you keep pulling out some money whenever the profits are high so that you will always have money to buy more shares at lower levels when the markets crash. The maximum gain will accrue from shares purchased at the lowest level after the crash. The pull back is usually sharp and will result in handsome profits.

15. If you have a lot of shares, then you can still implement the ideas by putting your shares in the Demat Account (instead of cash in the Bank Account). For example, if you have 1000 shares of Infosys, you should sell 10 shares at every Rs 5 rise ( (sell 10 shares @ 1700, sell 10 more @ 1705, sell 10 more @ 1710, ...) and buy them back at a profit of Rs 10. For transactions squared up on the same day, intra-day commission would be less than Rs 2, so the buying orders should be placed at Rs 12 less than the sale price. For those shares which could not be bought back on the same day, brokerage for buying and selling would be less than Rs 20, so the buying orders should be placed at Rs 30 less. You would have sold all the shares only if the price goes beyond Rs 2200 - a remote possibility for the next two years.

16. Keep selling small quantities of those shares that have risen the most and use the money to purchase shares that have fallen the most. Not all shares rise when the markets are rising and not all fall when the markets are falling.

Please send an email to fitnessfundas[at]yahoo[dot]com or call on +91 40 6456 9367 to discuss and get going.

“

The courage to press on, regardless of whether we face the calm seas or rough seas, and especially
when the market storms howl around us, is the quintessential attribute of the successful investor.”

- John C. Bogle

Mutual Funds

Equity Funds

Reliance Regular Savings Fund – Equity plan

SBI Magnum COMMA Fund

Kotak Opportunities Fund

Sundaram BNP Paribas Select Focus

Kotak 30

Reliance Growth Fund

HDFC Top 200

Reliance Vision Fund

Birla Sunlife Frontline Equity Fund

Birla Sunlife Equity Fund

Balanced Funds

Kotak Balance

Birla Sunlife 95 Fund

HDFC Prudence

ELSS

Principal Personal Tax Saver

Principal Tax Savings Fund

Birla Sunlife Capital Tax Relief – 96 Fund

SBI Magnum Tax Gain Fund

Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing.

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon.

2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house.

3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C.

4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary.

5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would pay FBT. It is @30 per cent on 20 per cent of the value thereby bringing down the effective rate to 6 per cent. Better still, the employee owns the car and the employer pays the cost of petrol and maintenance.

6. Contributions up to Rs 1 lakh (Rs 100,000) per annum to Superannuation Fund of the employee is not taxed either as fringe benefit in the hands of the employer or as perk in the hands of the employee.

7. Contributions to some specified schemes (Company PF, PPF, NSC, life insurance premia, etc.) qualify for a deduction u/s 80C from gross total income with an overall ceiling of Rs 1 lakh. PPF has a ceiling of Rs 70,000 to contributions made to the accounts of self and minor children whereas the contributions to accounts of self, wife and children (major or minor) attract the deductions.

8. Employer's contribution to Company PF in excess of 12 per cent of employee's salary is taxable. Employee contributes equal (or more) amount to his PF account. Again, any excess over 27 per cent of salary contributed by the employer to company Provident Fund and Superannuation Fund put together is to be treated as perks.

9. Any death-cum-retirement gratuity received up to Rs 3.5 lakh (Rs 350,000) -- subject to certain conditions -- is exempt.

10. Leave Travel Allowance given as reimbursement of expenses incurred by the employee and his family for traveling while on leave is exempt, once in two years.

11. Transport allowance for commuting between residence and place of duty is exempt up to Rs 800 per month.

12. Reimbursement, not exceeding Rs 15,000 in a year, for medical treatment from any doctor for himself and his family members is deductible.
13. Under section 80D, deduction up to Rs 15,000 paid as medical insurance premiums on the health of assessee himself, his spouse, parents (dependent or not) and dependent children is allowed. Where an individual has insured a senior citizen (parent or himself) a higher ceiling of Rs 20,000 is available. Additional deduction up to Rs 15,000 on premiums paid for parent/s of the assessee has been made available w.e.f. 1.4.08.

14. Professional tax paid by an employee is deductible u/s 16(iii).

15. ESOP was brought under the purview of FBT by Finance Act 07. The employer has a right to collect the FBT tax paid by him on ESOP from the employee. In that case, it will be treated as tax paid by the employee.

# 16. In respect of HRA, the least of the following is exempt from tax u/s 10(13A): (a) 40 per cent of salary (50 per cent for Mumbai, Kolkata, Delhi and Chennai).
# (b) HRA for the period the house is occupied by the employee.
# (c) The excess of rent paid over 10 per cent of salary.

An employee living in his own house or where he does not pay any rent is not eligible for this exemption. If you are staying in a house belonging to your family members (preferably not your wife), start paying rent to the owner and ask for HRA from the employer.

17. A helper engaged for the performance of the duties of an office or employment of profit is not considered as a perk.

18. If the employer employs a gardener for the building premises belonging to the employer, it would not be treated as a perk. The possibility of it being extrapolated to other servants is logical.

19. Perk value of concessional loan to the employee for purchase of house or motor cars shall be the difference between the interest payable calculated at the rate of interest for similar loans, charged by SBI and the actual interest charged.

20. Loan for medical treatment specified in Rule-3A is exempt, provided it is not reimbursed under any medical insurance scheme. Where it is reimbursed, the perquisite value shall be charged from the date of reimbursement on the amount reimbursed but not repaid against the outstanding loan taken specifically for this purpose.

21. Small loans up to Rs 20,000 in the aggregate are exempt.

22. Expenses on meals provided to the employee during his hours of duty are not treated as perks. FA 08 has declared that expenditure on non-transferable pre-paid electronic meal cards is not a perk.

23. FA 08 has also declared that provision of creche facility for children of the employee and sponsoring of an employee sportsman is not a perk.

24. Employer pays FBT on the value of the gifts. Gifts up to Rs 50,000 received without consideration by an individual from any person are tax-free in the hands of the donee. However, the Department may claim that such gifts are in lieu of salary.
25. Employer pays FBT on the value of the facility of credit cards and expenses for the club.

26. Where a movable asset is transferred by an employer to his employee directly or indirectly, the perquisite value shall be the actual cost to the employer minus the cost of normal wear and tear @10 per cent for each completed year during which such asset was put to use. In the case of motor cars the normal wear and tear would be @20 per cent whereas in the case of computers, data storage and handling devices, digital diaries, printers, etc., it would be @60 per cent. These do not include household appliances (i.e., white goods) like washing machines, microwave ovens, mixers, hot plates, ovens etc.

27. Uniform allowance to meet the expenditure incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit is exempt.

28. Expenses for soft furnishings (table cloths, curtains, etc.) including maintenance at the residence for those officers entertaining guests at home for official purpose are also exempt.

29. Goods at concessional rates, membership of professional associations, subscriptions for technical and business journals and newspapers are not considered as taxable perks.

30. Payment or reimbursement by the employer towards bills on Telephones and cellular is not a perk.

Caution: If employer is exempt from FBT, employee pays the tax

Fringe Benefit Tax is not applicable to an employer who is an individual, HUF, any fund or trust or institution eligible for exemption u/s 10(23C), or registered u/s 12AA. Rule 3 has been amended so as to include valuation of perquisite in case of benefits provided by such employers to its employees w.e.f. FY 07-08 by Notification SO 1896(E) dt 7.11.07.

Why you need a financial planner?

Why you need a financial planner?

Before we venture into how to select a financial planner, let us first understand, why you need a financial planner in the first place.

The financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives. Post-investment, he monitors your investments and ensures that you are on course to achieve your investment objectives. If necessary, he suggests changes to your financial plan so that you are able to achieve your investment objectives as planned.

Given the critical inputs provided by the financial planner in helping you achieve your financial goals, it is important that you select the right financial planner. We outline a simple 6-step strategy that you need to consider before employing the services of a financial planner.

Certification
More than anything else, this is a pre-requisite from the compliance point of view. Your financial planner should be certified and registered as a mutual fund agent with AMFI (The Association of Mutual Funds in India). Ensure your financial planner and his team members are certified.

Competence
Gone are the days when financial planning simply required delivering application forms. The traditional "one-size fits all" approach is passe and the sooner financial planners recognise this fact, the better it is for all concerned, especially their clients.

With the increasing list of investment avenues on offer, selecting the one that suits you the best is becoming a challenge. To that end, competence and skill set are the basic criteria that investors should look for in an investment planner.

Financial planners should be competent enough to provide you with a solution that can help you in achieving various objectives such as retirement and child's marriage/education. Furthermore, the recommendations offered by your financial planner should be backed by solid research.

Value-add services
In addition to financial planning, your financial planner must provide related, value-add services that can assist you in the investment process. On-line tools and calculators are some of the more popular value-add services. These tools can help you keep track of your investments. These value-add services must form an integral part of the financial planner's offering.

One-stop shop
Every individual has different needs and the same undergo a change over a period of time. The financial planner should be capable enough to understand these needs and offer suitable products to fulfill them. Also, he should provide you with the entire range of investment products from mutual funds, bonds, fixed deposits to small savings schemes. In other words, he should offer a "one-stop" solution for all your investment needs.

Objective advice
The financial planner needs to have thorough knowledge of all the products offered by the various companies so as to provide unbiased and meaningful recommendations regardless of how much he stands to gain by way of commissions.

Albeit evaluating the investment planner on this parameter may not be possible initially, you should be able to do so over a period of time (alternatively, references can prove useful in evaluating financial planers on this parameter). Providing objective and unbiased advice, which is in your interest (i.e. client's interest), should be the planner's number one priority.

source