Indian stocks soared to an all-new new high as the nation’s  main index, the Sensex, rocketed to more than 20,000 points  this week as foreign investors ploughed cash in.

The Sensex, which is comprised of India’s 30 largest   companies,gained 3.8% to close at 19,977.97,after reaching   a record high of 20,024.87 points earlier on Monday.

Already this year foreign investors have injected some
$18bn into Indian equities, driving the index up almost 40%   and experts are forecasting more growth.

Earlier in the month, the Indian Government announced it
was taking measures from 25 October to monitor anonymous foreign investing which, although it caused some initial  market concern, has been welcomed by experts as an extra layer of regulation which should ultimately protect investors. The chief worry is that foreign investors could withdraw large amounts of cash from the Indian market, which could subsequently lead to a sharp slump in equity prices.

Arun Mehra, manager of the Fidelity India Focus fund said: ‘India is changing and new themes are emerging all the time. For example, huge gas and oil fields have been found recently on the East coast which will have an impact on the rupee and imports. Lifestyles are changing, more people are using the internet and thinking about healthcare. Property development is also increasing.’

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After a three-day hiatus, FIIs became net   buyers on Monday at Rs 688 crore.

The Sensex surged above 20,000 for the   first time on Monday in tune with other   Asian markets, as traders priced in another   rate cut by the US Federal Reserve this   week.

Expectations of a status quo in the Reserve   Bank of India’s monetary policy stance  
also contributed to the rally, which saw the   index ending up 3.82 per cent, or 734.50 points, at 19,977.97, just off a high of 20,024.87 hit in late trade.

After a three-day hiatus, foreign institutional investors (FIIs) became net buyers on Monday at Rs 688 crore. The fact that there is no pressure on them to unwind their holdings through participatory notes was the buying trigger on Monday.

Analysts said the new Sebi norms on issuance of P-notes had been quite accommodative. As most P-notes linked to equities and issued by sub-accounts will be regularised as soon as they register as FIIs, foreign investors are under no pressure to unwind them even after 18 months.

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A record-breaking performance by India’s stock markets has put the industrialist Mukesh Ambani at the top of a list of the world’s richest people.

Buoyed by unprecedented inflows from US and European investors, the benchmark Mumbai Sensex stock index topped 20,000 for the first time yesterday – having almost doubled in value in the last two years.

One of the results of the surge in share prices has been a boost for Mr Ambani’s Reliance Industries, a powerhouse of the country’s industrial strength and its most valuable firm. Its excellent performance, along with that of two other of the group’s companies, saw the net worth of its chairman and managing director rise to $63.2bn (£30.6bn) yesterday.

The Press Trust of India reported that the increase placed Mr Ambani above such figures as Microsoft’s Bill Gates and Mexico’s Carlos Slim Helu, who are each worth just over $62bn.

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BL Research Bureau Congratulating yourself for entering the markets when the Sensex was hovering at 10,000? As the Sensex soars to an intoxicating high of 20,000, here is a sobering thought. There is a 7 in 10 chance that you picked a laggard! While the Sensex may have doubled in value, it is very likely that your portfolio has not matched this stellar performance.

An analysis of 1015 actively traded stocks (listed on the NSE) between June 19, 2006 and October 29, 2007 shows that 50 per cent of the stocks have not managed even half the returns of the Sensex. About a fourth of the stocks have actually declined during this period. While the BSE Midcap and BSE Smallcap indices have broadly kept pace with the Sensex, the rally appears to have been narrow in mid-cap and small-cap universe as well. Ninety per cent of the underperformers were stocks with a market capitalisation of less than Rs 5,000 crore. Not surprisingly, several underperformers belong to the sugar, textiles and plantation sectors. Some stocks from these sectors have tanked more than 50 per cent in the 10K-20K journey.

Among the large-caps, pharmaceutical majors such as Cipla, Ranbaxy and Dr. Reddy’s and FMCG companies such as Hindustan Unilever and ITC also feature in the laggards list.

There has, however, been a sharp polarisation in performance within the listed space. Had you picked the likes of Jai Corporation, India Infoline, B.A.G. Films and IFCI, your investment would have multiplied 20 times.

Overall, the portfolio of these 1015 stocks would have delivered a median return of about 40 per cent. In other words, adjusting for the extremes, the average portfolio would have managed this return, though the Sensex has doubled in value.

Source….

What is an IPO?

An IPO, or Initial Public Offering, is the sale of shares by a company to the public for the first time. Colloquially, it is said that a company is ‘going public.’

How is then that companies like ONGC and GAIL which are already listed are going for an ‘IPO’ again?

The government is the majority stockholder in these companies and it is offering a percentage of its stock now to the public. So strictly speaking, public sector companies that are already listed are not having their ‘IPO’ but they are going for a ‘public offering’ of their shares. It’s a technical distinction and one that should not bother individual investors.

How can I apply for an IPO?To apply to an IPO you have to fill an IPO application form. These forms are available in stalls outside the stock exchanges and with vendors in various other areas.

You can also get an application form through a share broker or investment consultant, if you have one. Else forms are available at various banks.

A good idea is to check the Web site of Karvy Consultants (www.karvy.com) who are often registrars or lead managers for issues.

The other option is to check the SEBI Website (http://www.sebi.gov.in/) for the prospectus of a particular IPO. The prospectus lists the lead managers for the IPO and you can get a copy of the application form from their centers.

Once you get the form, you have to fill it, remit the amount after calculating the number of shares applied for in the bank that is designated in the form as collecting centre for that IPO.

If you have a demat account, then you can apply for the shares directly through your demat account or there is an option of physical delivery of share certificates.

Some IPOs offer only demat (dematerialised) form of shares, while others offer both demat as well as regular (physical) shares.

SEBI advises investors to get the allotment in demat form as the shares in IPO are tradable only in demat segment in the stock exchanges. Dealing of physical shares (allocated in IPO) is not accepted.

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Life insurance companies use several factors when determining the premium for a policy. These include, but are not limited to, health status, health history, tobacco/nicotine use, gender and age. The last one seems fairly simple to determine. After all, your age is what the calendar says it is. Unfortunately, many life insurance companies see it a different way.

Life insurance companies generally use one of two methods for determining an applicant’s insurance age for the purpose of issuing a life insurance policy.

1. Actual AgeThe first method of age calculation is called Actual Age (sometimes referred to as Age Last Birthday). This method calculates your insurance age based on your last birthday. Let’s look at a couple of examples:

• Example 1

• Example 2

The Actual Age calculation method is very straightforward as it is simply a measure of an applicant’s calendar age on any given date.

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