Anil Ambani Group Blames `Illegal Trading’ for Share Plunge, Seeks Probe
Billionaire Anil Ambani ’s group asked India’s stock exchange and regulator to investigate “illegal trading” after shares in its telecoms, power and infrastructure companies plunged the most in more than a year.

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Galleon Holdings PLC – Trading Statement

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KBC Advanced Tech – Pre-close trading update

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Forex Trading Investment In India

Trading is a fast moving world, where you do not always have time to fully consult all your options before you make your decisions. It is an exciting world, because you will be tapping powerful resources which will generate income. It is a 24-7 job, because world trading markets do not sleep. What is more, any high-profit activity can be risky. That is why you need a reliable partner, with a reliable system, which will control the risks for you. But shop around – the best systems do not just schedule deals for you, they are informative, so that you can develop as a trader.

Forex markets are higher-yielding than equity markets, and have the added flexibility of being able to trade the U.S., European and Asian Pacific sessions. What’s more, you can trade from home or the office, quickly and effectively, with no commissions and far exceeding the typical 15:1 margin on futures or the 2:1 margin offered by equity brokers, achieving a surprising 100:1 leverage.

The commercially successful systems that are available tend to focus on pairs of currencies – they are looking for volume of trading and high interest. This helps to minimise the risks.The benefits of certain systems is that they have set trading times, obviating the pressure of 24-hour monitoring of the markets. There are certain peak times when the markets are most reliable and have the greatest volume of trade, and a typical day in any one market would have two or three trading peaks. Subscribers to a trading system typically enter a broadcast in real-time, where new trades are indicated, with a trader presenting them and discussing and analysing their merits as well as calling the trades. Generally speaking, forex trading tends to be a shorter-term investment than those carried out using other vehicles. Short-term strategies can last from as little as a few minutes to a few days, with longer-term strategies for bonds and stocks stretching over months or years. Forex Trading Investment In India

The distinguishing feature of forex trading is that interest can be earned on open positions on a daily basis, according to your leveraged trade volume. This could not be said of other types of market, which don’t yield interest on open trades. Depending on fluctuations in interest rates, this can accumulate over the years to hundreds of percentile points. There is a risk factor in the fluctuation of exchange rates between your chosen currencies, but the interest will be entirely predictable and guaranteed. Further revenue will naturally be accrued by currency appreciations or depreciations. What’s more, investing in various currencies is a great way to diversify your portfolio and spread your investment. It will not cost you as much as you would think to join the high-flyers of forex traders. Many foreign exchange trading brokers will allow you a three week trial period to test their trading platforms, to see if you can get along with it, before you sign up fully. The more established systems will typically offer a mini-account to get you started, where initial investment will set you back as little as 250$. before opening any live account always practice at least 200 trades with a demo account in order to get a feel of what trading with real money will be like. Never open a forex trading with money that you can not afford to lose. There is a 95% chance that you are going to lose your money as a beginner in the currency trading market, so if you are going to open a live account, make sure you open it with the minimum amount of funds possible. Forex Trading Investment In India

Forex Trading Investment In India

Confused about how to proceed with your investment venture in the share market of India? Consider the stock market situation analogous to trees right from the sapling stage to the matured trees that have strong roots, wide branches, big stems, and dominates a big area. These trees are the various companies listed in the NSE and the BSE of the Indian stock market. If you are investing in the big matured tree, you can no doubt expect returns, especially in the long term. If you invest in smaller trees, which cannot withstand heavy stormy weather, there are chances of incurring losses. Similar is the case with plants. Saplings can move forward to grow as at the moment no storm can uproot them. Yes the matured tree will hardly grow further though leaves will shed during winter and newer leaves will give shape to the tree. Growth prospects are thus limited. Now, following the given example, you can well comprehend where to invest!

The Indian stock market is not without ups and downs. If you have a look at the sensex India performance, you will come across the changing figures, sometimes ending on a positive note and at times at a negative note. Of course, if you are engaged in BSE trading, you will have to keep a close watch on sensex India quotes. There are investors who swim swiftly along with the tide and are hardly bothered about the volatility of the share market of India. These investors are highly knowledgeable and are conversant with the complete nuances of the Indian stock market. Years of research and expertise have resulted in the same. There are no doubt thousands of investors who are totally opposite, i.e. they are hardly able to make it. This is because they cannot decide which stocks in the share market of India are potential and which are not. Such a situation happens due to lack of knowledge. Forex Trading Investment In India

You must have been already advised by your financial guide to go into diverse investment trading. This is a good choice to follow. There are loads of investment opportunities in the market other than the stock market. If you invest in the right products you will earn good returns in no time. Few of these investment options include mutual funds of India, commodity market, forex trading, and related paraphernalia. Risk is one factor that is a part and parcel of all investment products no matter whether you invest in the mutual funds of India or commodity market or other options.

The answer to all your solutions to gaining is knowledge. The more knowledgeable you are the better are the prospects of gaining because you will then be able to take informed decisions. Get registered at an online trading portal for having access to a wealth of information related to news on the Indian stock market, sensex India, commodity market, mutual funds of India and more. You will not regret for the membership! Forex Trading Investment In India

The Internet boom has changed the very facet of the business world. Today, online trading is a reality and investors from any corner of the world can engage in shares trading. The time and efforts of visiting a stock broker personally or visiting the stock office to view charts for shares trading are done away with online share trading. The part-time investor, from the comfort of his/her space, can view and read about market conditions, figures in the nifty & sensex, gainers and losers, share prices, mutual funds and lot more information by a click of the mouse. A laptop or a personal computer plus an Internet connection are the requirements.

To engage in share trading in India or for online trading, you are required to open a demat account with some funds in it. The complete process can be guided by a stock broker, who will handle your shares trading operations. The stock broker, once the account is opened, will direct you to buy shares and then sell them; the amount gets automatically transported and credited based on the cost and profit/loss respectively.

A beginner in share trading in India should be equipped with the share market basics as well as tag along some share trading tips so that his/her investment doesn’t go into the drains. Lack of knowledge of share market basics can end you up in making losses rather than profits. Wise investment requires careful planning, watching the market closely and following some share trading tips given by experts. When the web world is at your fingertips, why worry? Just browse through the pages that carry information on share trading tips and share market basics. In addition, also equip yourself with knowledge concerning the A-Z of the stock world. These may be news about sensex India, Nifty, top losers, share prices, charts, etc. All these can be viewed at any brokerage portal like nirmalbang.com. The share trading tips offered by the online trading sites are analysis by experts loaded with years of expertise in the stock market. They study market sentiments, conduct technical scrutiny, study past experiences of companies that are gaining at a stretch, and related regalia, and based on these aspects, they guide the readers by projecting the right share trading tips. You can also register yourself at one of these online platforms so that online trading becomes easy for you. As a registered member, you can avail a number of benefits in addition to getting updated about market conditions, getting expert advice, and lots more. If you subscribe, you can get these right in your mailbox or receive sms updations.

Today, the investors’ world is not restricted to serious investors only. People from different vocational backgrounds including housewives and retired employees are into online share trading. A decade ago, there were not many stock market investors; over the years the numbers turned multi-fold until pre-recession. During recession and post recession, the numbers dropped off and with the sensex displaying an upbeat trend, the numbers have risen again.

No matter which equity trading strategy you follow; market analysis, equity news, annual reports of various blue chip companies, and other stock related external and internal factors require a deep analysis.

Equity trading strategies

The equity market is thronged by various investors who follow various types of investment strategies. Some follow the fundamental approach and others are more inclined towards psychological strategies. Academic approach is also followed by certain investors in making their portfolios. However, the eclectic approach that combines the features of all the other three is found to be the most suitable in the real time share market. India has a stock market that requires penetrating analysis before any investment strategy is followed.

Fundamental strategy and psychological approach

The fundamental strategy focuses on buying undervalued equity shares and selling overvalues equities. Although fundamental approach is essential to establish benchmarks when you enter the share market, India has an equity market that is very volatile to depend entirely on this strategy. As per psychological strategy, the equity prices are influenced by the mood and psychology of the investors. People following the psychological approach believe that investor’s moods can make the market bullish or bearish. Although this strategy is very useful in certain instances, it can not be relied on completely or in isolation.

Academic strategy and eclectic strategy

Academic strategy states that share prices are highly influenced by the flow of information and past trends of stock prices are not good enough to predict its future prices. Any new piece of equity news or any other relevant information has the power to promptly affect the share prices and make the past records redundant. Stock market is neither so organized as stated by the academic strategy nor it is as speculative as psychological approach assumes it to be. Eclectic strategy combines various strategies to take a balanced equity investment decision.

So, in order to formulate a balanced equity trading strategy, it is advisable to combine all the above strategies and use them according to the existing market conditions.

Equity share market is a dynamic set up that can not be packed up with few rules and strategies. However, this article provides some of the countless underlying concepts on which an investment decision can be based.

Diversification of your equity stock portfolio

One of the major strategies followed by many investors is about hedging risks. Diversification of portfolio allows an investor to hedge his/her investment risks by distributing his/her funds among different kind of securities. For instance, a balanced portfolio is the one that has a combination of regular dividend generating equities, stocks with good growth prospects, and stable equities to protect the amount invested in the share market. There are many online websites that provide guidelines for new investor to make a profitable portfolio.

Strategies for aggressive equity investors

Aggressive investors are vigorous and active players of the share market who devote comparatively more time and effort in management of their portfolio. They have a greater appetitive for risk and in turn they expect higher rewards for their tireless efforts. Some of the strategies for such players are:

Pay more attention to the economy and market than the company you invest in. Monitor and analyze the environment keenly.
Pay attention to growth shares and try to anticipate profits ahead of the share market.
In bullish environment, try to leverage your portfolio and take prompt corrective steps, when required.

Strategies for conservative equity investors

Conservative equity players are not very adventurous and have a comparatively low risk appetite. Some basic strategies that these safe players can adhere to are as follows:

Spend some time listening to equity news in order to look in for safe investment opportunities in the primary equity market.
Avoid investing in certain kinds of shares such as unlisted, manipulated, concerned, and inactive shares.
Avoid short-term switch hitting and follow a strict screening criterion.
Seek advice from portfolio managers or go through guidelines given by online websites.

“AFTER HEAVY FINANCIAL CRUNCHES IN THE ECONOMY, FOR A CORPORATE ENTITY, IT IS QUITE SIGNIFICANT TO HAVE A PERFECT BLEND OF VARIOUS CAPITAL SOURCES TO ENSURE GOOD RETURNS AND OVERCOME FROM THE DEPTH OF LOSSES.”

HERE, SOME CRUCIAL TERMS HAVE BEEN DEFINED WITH REFERENCE TO THE FINANCIAL SYSTEM OF A COMPANY:

CAPITAL STRUCTURE

            The types of securities to be issued and proportionate amounts that make up the capitalization is known as capital structure or financial structure.

            Capital structure refers to the proportion of different kinds of securities issued by a company to raise long-term finance. Thus capital structure denotes: (1) the types of securities issued (equity shares, preference shares and debentures), and (ii) the relative proportion of each type of security. In other words, capital structure represents the proportion of equity capital and dept capital used for financing the operations of a business. Proper balance must be obtained in the following securities or sources of finance to maximize the wealth of the equity shareholders of the company:

(a)              equality shares,

(b)              preference shares, and

(c)              debentures

Features of Sound Capital Structure

A company’s capital structure is said to be optimum when the proportion of debt and equity is such that it results in maximizing the return for the equity shareholders. Such a structure would vary from company to company depending upon the nature and size of operations, availability of funds from different sources, efficiency of management, etc.

A SOUND CAPITAL STRUCTURE SHOULD POSSESS THE FOLLOWING FEATURES:

(i)    MAXIMUM RETURNS.

(ii) LESS RISKY.

(iii) FLEXIBILITY

(iv) ECONOMY.

(v) DYNAMIC.  

FINANCIAL LEVERAGE OR CAPITAL GEARING

A company can raise capital by issuing three types of securities: (a) equity shares, (b) preference shares, and (c) debentures. Preference shares carry a fixed rate of dividend and debentures carry a fixed rate of interest. The equity shares are paid dividend out of profits left after payment of interest on debentures, and dividend on preference shares. Thus, dividend on equity shares may vary year after year. Equity shares are known as variable return securities and debentures and preference shares as fixed return securities. If the rate of return on fixed return securities is lower than the rate of earnings of the company, the return on equity shares will be higher. This phenomenon is known as financial leverage or capital gearing.

Thus, financial leverage is an arrangement under which fixed return bearing securities (debentures and preference shares) are used to raise cheaper funds to increase the return to equity shareholders. It may be noted that a lever is used to lift something heavy by applying less force than required otherwise.

       Capital gearing denotes the ratio between various types of securities and total capitalisation. Capitalisation of a company is highly geared when the proportion of equity to total capitalization is small and it is low geared when the equity capital dominates the capital structure.

       Capital gearing is calculated by determining the ratio between the amount of equity capital (representing variable income bearing securities) and the total amount of securities (equity shares, preference shares and debentures) issued by a company. Here capital structure of two different companies is presented. Both the  companies have issued the total securities worth Rs. 20,00,000 and they have equity shares worth Rs. 5,00,000 and Rs. 15,00,000 respectively. Company A is highly geared as the ratio between equity capital to total capitalization is small, i.e., 25%. But in case of company B, this ratio is 75%, so it is low geared.

ANALYSIS OF CAPITAL GEARING

                                                 Company A

                                                    (Rs.)

Company B

 (Rs.)

(a) Equity share capital                5,00,000

(b) Debentures                            15,00,000

(c) Total Capitalisation               20,00,000

(d) Capital Gearing      (a /c × 100) = 5,00,000     ×100

                                                           20,00,000

                                                        = 25%

                                                     High Gearing

15,00,000

  5,00,000

20,00,000

15,00,000    × 100

20,00,000

= 75%

 Low Gearing

The various securities issued should bear such ratio to total capitalization that capital structure is safe and economical.

       Equity shares should be issued where there is uncertainty of earnings. Preference shares, particularly the cumulative ones, should be issued when the average earnings are expected to be fairly good. Debentures should be issued when the company expects fairly higher earnings in future to pay interest to the debenture-holders and increase the return of equity shareholders.

TRADING ON EQUITY

Trading on equity is an arrangement under which the financial management raises funds by issuing securities which carry a fixed rate of interest (or dividend) which is less than the average earnings of the company. This is done to increase the return on equity shares.

       Let us suppose that a company requires an investment of Rs. 10 Lakhs to earn Rs. 2.5 lakhs @ 25 per cent p.a. In order to raise this amount, we may consider two proposals, namely, (A) to issue 1 lakhs equity shares of Rs. 10 each: and (B) to issue equity shares worth Rs. 2.5 lakhs (i.e., 25,000 shares of Rs. 10 each), 8  % preference shares worth Rs. 2.5 lakhs, and 10 per cent debentures worth Rs. 5 lakhs. The rate of tax is assumed to be 40 per cent. The earnings per share under proposal ‘B’ will be higher because of application of ‘trading on equity’. As shown in the following table, the earnings per share (EPS) under proposal B are Rs. 4.00 as compared to Rs. 1.50 under Proposal A because of the use of debentures and preference capital for raising funds.

EFFECT OF TRADING ON EQUITY

Particulars                                                                     Proposal A

Proposal A

Earning before Interest and Taxes (EBIT)                  Rs. 2,50,000

Less Interest on Debentures (10%)                                            Nil

Earning after interest and before Taxes                            2,50,000

Less Taxes (40%)                                                             1,00,000

Earning after Interest and Taxes                                       1,50,000

Less Preference Dividend (8%)                                                 Nil

Earning available to Equity Shareholders                         1,50,000

No. of Equity shares outstanding                                       1,00,000  

Earning per share (EPS)                                                Rs. 1.50

Rs. 2,50,000

         50,000

      2,00,000

         80,000

      1,20,000

         20,000

      1,00,000

         25,000

        Rs. 4.00