The Hindu Business Line : Sunday, December 01, 2002

BSL open offer: Accept
INVESTORS holding shares of BSL Ltd can consider accepting the open offer being made at Rs 80 per share for the acquisition of 30 per cent of the company's equity by Kolmak Chemicals. This is at a premium of about 20 per cent to the current ... More

FINANCIAL SERVICES

No demat account closing charge
The National Securities Depository Ltd has indicated that there will be no charges for closing a demat account, following a SEBI directive to this effect. However, transaction charges will be charged. These changes are effective November 1. ... More

INVESTMENTS

What is loss aversion?
AN investor I know bought Infosys for Rs 6,000 two years ago and refuses to sell the stock unless the price moves above that level. His action, called loss aversion, is typical of all small investors. What is loss aversion? Note that the ... More

INDUSTRY ANALYSIS

`Overseas markets will account for 30% turnover in 2 years'
Sun Pharmaceutical Industries has frequently used mergers and buy-outs to expand its presence in the domestic market. A few years ago, the company appeared to mimic the strategy being followed in the US market, by taking a large equity stake ... More

Pharmaceuticals — Health is not necessarily wealth
AN ANOMALOUS situation has emerged in the stock market valuation of pharmaceutical companies. Even as top Indian pharma companies have successfully built a structure that should significantly increase sales and profit, the stock market has ... More

Generics and contra-indications
THE global generic market is heterogeneous. Loosely, the market may be demarcated based on the way the patent laws are imposed. Many countries in Asia and Africa have weak patent laws and are, therefore, easy targets for a number of Indian ... More

TELECOMMUNICATIONS

Charge your mobile
If you are a Wings customer, you can now charge your cards at the ATMs of ICICI Bank in Chennai. For this purpose, RPG Cellular Services and ICICI Bank have entered into an arrangement. The facility will be available at all the 85 ATMs of the ... More

AIRLINES

Taj-Delta SkyMiles
Taj Hotels has become a partner in Delta Airlines' (an American airline) SkyMiles programme. SkyMile members will earn 500 miles for each qualifying stay at participating Taj luxury and international hotels in India and abroad. The Taj group, for ... More

Concessional air fares too go up
INDIAN Airlines and Jet Airways have announced a 10 per cent hike in the concessional fare schemes offered on various routes. The revised fares cover schemes such as `Apex' and `Everyone can fly', and will be effective from December 1. All ... More

More flying options
Qatar Airways has launched direct flights between Doha in the UAE and Hyderabad. These flights are scheduled for Sunday, Wednesday and Friday. There will also be connecting flights from Doha to other destinations in the Gulf and Europe. ... More

AUTOMOBILES

Automobile industry: Vrooming ahead
THE passenger car segment's growth expectation for this year has changed from one of resignation — a slow 3-4 per cent growth — to a more optimistic 9-10 per cent growth. The change in sentiment has come after the pre-festive season ... More

INSIGHT

How many funds make one diversified?
Three is good company
uity funds may be appropriate and hold the scope for reducing risks. Taking this approach further by adopting rebalancing strategies may however not pay. Transaction costs, taxes and the lack of depth in the markets render rebalancing ... More

It's returns that count
THE ten funds represent some of the better-performing ones in the category. The exclusion of the other funds is not expected to significantly alter the outcome. Since a substantial proportion of excluded funds under-performed the funds in ... More

A question of choice
ARRIVING at a selection of mutual funds to include in a portfolio is a tricky challenge. There are close to 100 equity funds to choose from now. Selecting two or three from this list is difficult. The question of allocation of one's monies ... More

L'affaire Grasim-L&T: Losers all
IT is a game where there are no winners. Whether it be the Birlas, the Securities and Exchange Board of India (SEBI), the investors that the latter claims to represent, or the investment bankers — all have lost something in the drama ... More

Growing reserves and uncertainty
THE rapidly growing foreign exchange reserves of India have implications even for the retail investor. They may ensure that interest rates stay benign and decline further. They may also have implications for stock price movements. Reserves are ... More

Grasim's missed calculations
BY TRYING to save a few hundred crore rupees, relying on a rather thin SEBI ruling in the ACC-Gujarat Ambuja case and making use of the facility of market price-linked open offer provided by the takeover law, Grasim has missed a good business ... More

MUTUAL FUNDS

The Alliance'95 Fund: Sell
INVESTORS in The Alliance'95 Fund can contemplate cutting exposures despite its impressive performance over a seven-year period and fairly good performance in the last year. The possibility that Alliance Capital may decide to exit the Indian ... More

G-Sec funds: SEBI's new checks and balances
GILT Funds, or G-Sec Funds, which invest in Government of India securities, have steadily gained in popularity in the last two years. The Securities and Exchange Board of India has now issued new guidelines they should follow to provide for ... More

Zurich India Capital Builder Fund: Switch
INVESTORS who hold the bulk of their investment portfolio in Zurich India Capital Builder Fund can switch their investments to another diversified fund with a good five-year track record. The portfolio is now highly weighted in FMCG, IT and ... More

Franklin India Infotech Fund: Sell
THE sharp run-up in the prices of leading technology stocks was reflected in the performance of Franklin India Infotech Fund last month. The fund's improved performance can be used to pare down exposures now. This is because the valuation of ... More

Alliance Frontline Equity: Hold
INVESTORS in Alliance Frontline Equity Fund can stay with the fund for now. Barely four months after its IPO, it is early days yet to take a call on its performance. Fresh investments need not be contemplated as there appears to be no particular ... More

Towards regulated selling
THE deadline for mutual fund distributors is fast approaching. From March 31, 2003, all mutual fund distributors have to be AMFI Certified Investment Advisors. More important, they have to be registered with AMFI. In other words, AMFI is emerging ... More

STOCKS

Wipro: Cut exposure
EXISTING investors in the stock of Wipro can consider reducing their exposures. The stock price of Wipro has run up sharply in recent trading sessions. Improving sentiment for leading IT players as well as stock-specific factors such as expected ... More

Gujarat Ambuja: Pare Exposures
WITH the possibility of a sizeable financial burden that could take a toll of its earnings and growth, shareholders of Gujarat Ambuja Cements can pare exposures. The stock's valuation has not factored in this element and that can be used to good ... More

Goodlass Nerolac: Hold/Buy on declines
SHAREHOLDERS in Goodlass Nerolac Paints can continue to hold on to the stock at the current level of Rs 135. Those seeking to add the scrip to their portfolio can consider doing so at lower levels. Goodlass Nerolac is the second largest player ... More

Escorts: Hold
DESPITE a slightly higher `other income' component, thanks to the profit from the sale of its equity in Escorts Claas Ltd, Escorts has witnessed a sharp erosion in its bottomline for the first half of this fiscal. The net loss at Rs 69.97 crore ... More

West Coast Paper: Hold
SHAREHOLDERS of West Coast Paper can stay invested and look at profit-booking opportunities if the stock price moves up by around Rs 20-25 from present levels. However, investors who had entered the stock at considerably low prices can ... More

Tata Chemicals: Buy
INVESTORS with an appetite for risk can consider accumulating the Tata Chemicals stock at the current price levels of Rs 50. Though the company's business mix (consisting of caustic soda, soda ash, urea and salt) appears unappealing, the company ... More

LIFE INSURANCE

Term assurance policy: A plain cover
A COMPLAINT frequently voiced by the insurance industry is that people think of policies only when some tax planning has to be done. The industry may have to live with this phenomenon because few investment avenues match an insurance policy's tax ... More

Computation of bonuses
BONUSES form an integral part of all insurance policies. If one were to consider the possibility of investing in a savings-oriented policy, such as an endowment plan or a money-back plan — considered more as investment vehicles rather than ... More

STOCK MARKETS

HLL may seek higher levels
Nifty (1050.15): As anticipated last week, the index continued to move up. The overall outlook for Nifty continues to remain positive. However, the recent non-stop rally has pushed the indicators (14-day Relative Strength Index in ... More

Short-term uptrend in Tata Tea
EXTENDING the recent upward momentum, the stock market continued to witness a buoyant mood during the just concluded week. Except for a brief correction on Wednesday, the Sensex managed to close on a positive note on the remaining four days of ... More

Nasdaq: Downward correction likely
THE trading activity at the American stock market was effectively curtailed to three and half trading days on account of "Thanksgiving" holiday. After being closed on Thursday, market resumed trading for a brief while on Friday. Except for a ... More

Growth in car sales jacks up Tata Engg
Grasim Industries (Rs 287): The stock price of the cement major went down by 5.3 per cent this week. The stock has been witnessing downward trend ever since the controversy erupted following the SEBI's objection to the company's open ... More

DEBT MARKET

Bonds carry downward bias
THE yield curve flattened further week-on-week, with the tail showing the maximum fall. The benchmark 10-year yield currently stands at 6.44 per cent, 7.5 bps lower than the previous week. Going forward, bonds are likely to trade in a range, ... More

DERIVATIVES MARKETS

Positive week for HPCL
EQUITIES continued to edge up in the preceding week on the heels of an inflow of foreign investment. Consequently, the bellwether BSE Sensitive Index moved up by 2.76 per cent to finish the trading week ended November 29, 2002 at 3,229 ... More

Contract size and corporate actions
The LC Gupta Report did not make any recommendation regarding minimum contract size. However, the Standing Committee on Finance of Parliament while considering the amendment to SC(R)A pertaining to derivatives recommended that the threshold limit ... More

Options guide

Futures guide

FIXED DEPOSITS

HDFC: Well-covered
HOUSING Development Finance Corporation's fixed deposit programme is one of the safer options. However, it comes with a relatively low interest rate. The short-term rates are almost at a par with that of average bank deposit rates. Investors who ... More

Bharat Overseas Bank's floating rate scheme
Bharat Overseas Bank launched a floating rate deposit scheme on November 15. The idea is to offer greater flexibility for long-term deposits. The floating rate deposit schemes offers rates with a reset every six months. The interest rate for this ... More

INCOME TAX

Capital gains tax — Time limits for saving tax
I SOLD my house in Chennai in June. To avoid capital gains tax, I am planning to buy another one in Bangalore. Kindly let me know the following:

The time limit for purchasing a flat or house, which has already been constructed?

The ... More

Exemption on sale of house
I PROPOSE to sell my house, which was constructed by getting a loan from a financial institution. Out of the sale proceeds, I propose to pay back Rs 2 lakh. Can a tax exemption be claimed in respect of his repayment of housing loan? If I invest ... More

PUBLIC OFFERS

HSBC Income Plan: Unattractive
INVESTORS need not participate in the initial offer from HSBC Income Fund for the following reasons: Firstly, government and corporate bonds have risen sharply since 2001. According to the JP Morgan India Government Bond Index, short-term bonds ... More

HSBC Equity Fund: Unattractive
HSBC Equity Fund is a plain vanilla product — an open end, diversified equity fund which plans to invest with a focus on large and mid-sized companies. The fund is charging an initial entry load of 2 per cent, which will be appropriated ... More

CARTOON