SEBI fixes lot size for derivative contracts

SEBI fixes lot size for derivative contracts and it will come into effect from March 31, 2010.

A rival for Sensex? Dow Jones unveils India Titans Index

A rival for the fabled Sensex is on the anvil. Rupert Murdoch-owned Dow Jones Indexes - which owns the widely tracked Dow Jones Industrial Average index that covers 30 large US companies listed on the New York Stock Exchange - has unveiled a blue chip index for India. The Dow Jones India Titans 30 Index will measure the performance of the 30 largest and most liquid stocks listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Dow also announced the launch of The Global Dow, an index whose components are selected by the editors of The Wall Street Journal. The indexes were unveiled by Rupert Murdoch, chairman and chief executive of News Corporation in Mumbai on Monday.

"I'm excited to announce the launch of a new blue-chip index for India. It will be licensed to financial institutions as the basis of investment products, such as exchange-traded funds," Murdoch said. "It's to be seen how the Dow's India index is going to be accepted. The Sensex is synonymous with the stock markets. Even the NSE's Nifty Index could not challenge the position of the Sensex," said BSE dealer Pawan Dharnidharka. The Sensex (short for BSE Sensitive Index), which tracks the movement of 30 major stocks listed on the BSE, is the most widely tracked marker in India now.

The Titans Index is weighted with individual components capped at 10 per cent. The index is calculated in US dollar and Indian rupee and reviewed annually in March. As of July 31, 2008, the Dow Jones India Titans 30 (US $) has gained 62.03 per cent back tested from its base date, December 31, 2005.

"What the world needs is a trusted means of measuring this country's development and an index that can be used by investors around the world to track the progress of Indian companies and the Indian economy. We will see huge capital flows both from and to India in coming years and that is an opportunity for us as a financial information company, as well as for international investors who want to take advantage of this profound trend," Murdoch said.

Murdoch said: "The world is changing and how we measure that change economically and financially is clearly a challenge and an opportunity. We have seen a reweighting of risk, but the world itself is being economically rerated and so we need an index that allows investors to take advantage of these changes." According to Murdoch, Indian companies will obviously have a place in The Global Dow "as will companies from other emerging countries where we have seen an unprecedented economic emancipation over the past two decades".

Robert Thomson, managing editor, The Wall Street Journal said, "While we must reflect the global stock market as it is, we must also recognise the rapid rise of companies in countries such as India." The Global Dow will track the share prices of existing and future global leaders in every industry.

Link - http://in.biz.yahoo.com/080804/203/6w6u5.html

Why Reliance Energy going down ?

Since yesterday Reliance Energy fallen from 1900 to 1200 (today). There are rumors in the market that the Reliance Power IPO has been rejected by SEBI.But still no official confirmation on the same by Reliance Energy official. I have got some info on the "The Tribune". Same I am sharing with you -

• Independent probe urged into Reliance Power
• IPOMinister urged to stop loot of Reliance Energy
• SEBI probing promoters' contribution in Reliance Power

For detailed info read the The Tribune website - http://thetribuneonline.com/business.htm

Good Websites for Market Watch

LETS TRY TO UNDERSTAND THE MARKET AND BE AN INFORMED AND INTELLIGENT INVESTOR... :) "The only good is knowledge and the only evil is ignorance"

For Global Markets:

• http://new.quote.com/world/
• http://www.bloomberg.com/markets/stocks/wei.html

For Foreign Exchange Rates and Forex News:

• http://new.quote.com/forex/
• http://www.bloomberg.com/markets/currencies/fxc.html

For Crude Oil Prices:

• http://www.bloomberg.com/energy/
• http://www.nymex.com/index.aspx

For Current Rates like

• Policy rates ( Bank Rate , Repo rate , Reverse repo rate )
• Reserve ratios ( CRR , SLR )
• Lending/Deposit rates ( PLR , Savings bank rate, Deposit rate )
• Exchange rates and more..

Site -http://www.rbi.org.in/home.aspx

FOR INTELLIGENT INVESTOR -

Sites -

• http://www.watchoutinvestors.com/search_new.asp
• http://www.investorhelpline.in/

* Dalal Street (In Hindi - Dalāl means a broker or dealer) in downtown Mumbai, India is the location of the Bombay Stock Exchange (in the Phiroze Jeejeebhoy Towers, at the intersection of Dalāl Street, Bombay Samāchār Marg and Hammam Street) and many related financial firms and institutions.

Subprime lending - Is the prime topic?

Subprime lending (also called B-Paper,near-prime, or second chance lending)is a general term that refers to the practice of making loans to borrowers, who do not qualify for the best market interest rates because of their deficient credit history. Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, poor credit history, and murky financial situations often associated with subprime applicants. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk.

Subprime lending is highly controversial. Opponents have alleged that the subprime lending companies engage in predatory lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to default, seizure of collateral, and foreclosure.

Occasionally some borrowers might be classified as subprime despite having a good credit history. The reason for this is because the borrowers has elected to not provide verification of income or assets in the loan application process.

Definition of subprime lending

While there is no official credit profile that describes a subprime borrower, most in the United States have a credit score below 620.

Subprime lenders

To access this increasing market, lenders take on the risks associated with lending to people with poor credit ratings. Subprime loans are considered to carry greater risk for the lender due to the aforementioned credit risk characteristics of the typical subprime borrower. Lenders use a variety of methods to offset these risks. In the case of many subprime loans, this risk is offset with a higher interest rate. In the case of subprime credit cards, a subprime customer may be charged higher late fees, higher over limit fees, yearly fees, or up front fees for the card. Subprime credit card customers, unlike prime credit card customers, are generally not given a "grace period" to pay late. These late fees are then charged to the account, which may drive the customer over their credit limit, resulting in over limit fees. Thus the fees compound, resulting in higher returns for the lenders.

Subprime borrowers

Subprime offers the opportunity for borrowers with less than ideal credit to gain access to credit. Borrowers use this credit to purchase homes, or in the case of a cash out refinance, finance other forms of spending such as purchasing a car, paying for living expenses, remodeling a home, or even paying down a high interest credit card. However, due to the risk profile of the subprime borrower, this access to credit comes at the price of higher interest rates.

Generally, subprime borrowers will display a range of credit risk characteristics that may include one or more of the following:

• Two or more loan payments paid past 90 days due in the last 12 months, or one or more loan payments paid past 60 days due the last 36 months;
• Judgment, foreclosure, repossession, or non-payment of a loan in the prior 48 months; Bankruptcy in the last 7 years;
• Relatively high default probability as evidenced by, for example, a credit bureau risk score (FICO) of 660 or below (depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability likelihood. The loans in this classification are called stated income and/or stated asset (SISA) loans or even no income/no asset (NINA) loans.

The Sensex story: 1000 to 15000

Despite weak global cues, indian stocks were in great demand, especially auto, pharma, IT and metals stocks. On Friday, this lifted the Bombay Stock Exchange's benchmark 30-share Sensex past the magical 15,000-mark. (See below for the timeline).

The unprecedented Bull Run started on May 6, 2003 when the Sensex was at 3,001.21 level. In took just 67 trading sessions to cross the 4,000-mark and touch 4,026.27 points on August 19, 2003.

The rally continued and the index gained another 1,000 points in 54 trading sessions to post 5,068.66 points on November 3, 2003.

Thereafter, it pierced through the 6,000 mark on January 2, 2004 in another 43 trading sessions. The market then seemed to pause for breath as it took a whopping 370 trading sessions to cross the 7,000 mark, at 7001.55 on June 20, 2005.

From 7,000-mark, the sentiment turned distinctly firm following good liquidity that played a significant role to determine the market direction and Sensex crossed 8,000-mark in just 55 trading sessions at 8,060.26 on September 8, 2005 and 54 trading days to cross 9,000-mark at 9,005.63 on November 28, 2005.

From 9K to 10K, it took just 48 trading sessions. The index crossed 10,000-mark on February 6, 2006 at 10,002.83.

From 10K to 11K, it only took 29 trading sessions.

The Bombay Stock Exchange, the oldest stock exchange in Asia, was established in 1875 as the Native Share and Stock Brokers Association at Dalal Street [Get Quote] in Mumbai. A lot has changed since then when 318 persons became members upon paying Re 1.

In 1956, the BSE obtained permanent recognition from the Government of India -- the first stock exchange to do so -- under the Securities Contracts (Regulation) Act, 1956.

The Sensex, first compiled in 1986, is a 'Market Capitalisation-Weighted' Index of 30 component stocks representing a sample of large and financially sound companies. The BSE-Sensex is the benchmark index of the Indian capital markets.

The BSE Sensex comprises these 30 stocks: ACC, Bajaj Auto , Bharti Tele, BHEL, Cipla, Dr Reddy's, Gujarat Ambuja, Grasim, HDFC, HDFC Bank, Mahindra & Mahindra, Hindalco, HLL , ICICI Bank, Infosys , ITC, L&T, Maruti , NTPC, ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors, Tata Power, TCS, Tata Motors and Wipro.

Following is the timeline on the rise and rise of the Sensex through Indian stock market history.

1000, July 25, 1990

On July 25, 1990, the Sensex touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

2000, January 15, 1992

On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.

3000, February 29, 1992

On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh.

4000, March 30, 1992

On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.

5000, October 8, 1999

On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election.

6000, February 11, 2000

On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006.

7000, June 20, 2005

On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time.

8000, September 8, 2005

On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading.

9000, November 28, 2005

The Sensex on November 28, 2005 crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

10,000, February 6, 2006

The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006.

11,000, March 21, 2006

The Sensex on March 21, 2006 crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points.

12,000, April 20, 2006

The Sensex on April 20, 2006 crossed the 12,000-mark and closed at a peak of 12,040 points for the first time.

13,000, October 30, 2006

The Sensex on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

14,000, December 5, 2006

The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the Sensex to move from 13,000 to the 14,000 mark.

15,000, July 6, 2007

The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.