The weakness in Asian markets only sought to undermine the sentiment further. After opening around 200 points below its previous close, the 30-share Sensex kept sliding through the session to close at 17,349.07, down 385.61 points, or 2.2%, over Thursday’s level. The 50-share Nifty dropped 81.05 points, or 1.6%, to close at 5,110.75.

Brokers said traders were keeping their commitments to the minimum, waiting for the Union Budget next week before firming up their views.

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According to CNBC TV18, HDFC Bank is in advanced talks to merge Centurion Bank of Punjab (CBoP) with itself.

“…the talks are at a critical stage,” the channel reported.

“The talks are at an advanced stage and the two banks are working hard to somehow see this deal go through,” the report said, but added that it won’t be surprising if the deal doesn’t go through.

However, both the banks denied that there was any deal being worked out. In a clarification to the stock exchange, HDFC Bank said that, “at present, there is no such proposal for the consideration of the Board of Directors of the bank.”

A CBoP spokesperson termed the report “speculative”.

“It is not the practice to comment on speculative reports,” the bank said in a statement to the Bombay Stock Exchange.

A quick calculation shows that if the deal goes through, it will make HDFC the seventh-largest bank in terms of assets, ahead of state-owned IDBI, Union Bank and Central Bank of India.

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A mutual fund is made of of many investors who buy shares of the fund.
Mutual funds are a long term investment for retirement, 401k plan, etc. They give you diversification which means less risk but in the long term also means less reward.

A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities.These are investment opportunities offered by a finance institution which may be in the form of shares, bonds and other forms of securities.The investor buys hundreds of shares and other investments. You can participate and own a fraction of those investments. If the funds investments do well, you do well. The investor gets paid from fees, usually about 0.5 - 2% of the money invested.

Different funds specialise in differnt types of stocks. A fund manager picks those stocks and buys and sells them in order to increase the value of the fund.

The essential difference between the two is that a share has the advantage of the holder discerning market trends with respect to the specific company while in a mutual fund the investor often cannot determine the exact channels of return on investment which is the domain of the portfolio manager in charge of the mutual fund

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The primary markets advisory committee of Sebi has suggested that the face value of all new stocks should be a uniform Re 1 per share.

If accepted, the panel’s recommendations will force all new issuers to offer their shares at an affordable price because of a Re 1 par value.

Reports indicate that the Sebi board will meet in about three weeks to take a decision on the proposal.

This could be the first big decision taken by new Sebi chairman C.B. Bhave who assumed office yesterday.

If Sebi decides to clear the proposal, it will end controversies such as the one that erupted last August when Anil Ambani decided to fix the face value of the Reliance Power stock at Rs 2 and offer it to the public at around Rs 90.

After a barrage of allegations from certain quarters and intervention by the market regulator, the par value of the Reliance Power stock was fixed at Rs 10 and offered to investors in a price range of Rs 405-450 a share.

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On five occasions out of the 11, the market has given negative returns in the two weeks ending on budget day and out of these five occasions, the market has fallen in 3 years in two weeks post-budget. In the rest two years, the market had reversed the losses, albeit marginally, in the post-budget period. In four out of those five occasions, market had taken a hit on D-day also, thereby proving the fact that lack of positive surprises actually has an impact on overall market movement, though in short-term only.

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In a communiqué Monday to the Bombay Stock Exchange (BSE), RPL said the slide was compounded by “a vicious and orchestrated campaign of market manipulation and market abuse, unleashed by unscrupulous rival corporate interests, to hammer down all RADAG stocks”.

The statement added that this was an attempt to undermine the group’s “fair name and reputation and cause losses to million of genuine investors”.

The company said it had written to markets regulator Securities and Exchange Board of India (SEBI) seeking an investigation.

RPL also informed BSE that its board would consider a proposal Feb 24 to issue bonus shares to all categories of shareholders except the promoters.

The bonus issue would be considered “in keeping with the Reliance ADA Group’s fundamental and overriding philosophy of creating value for genuine long-term investors.

“This will include inter alia consideration of a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group, thereby protecting investors even from notional short-term losses.

“The proposal will result in dilution of the promoter group’s shareholding in Reliance Power.”

From the time of opening of the Reliance Power initial public offer (IPO) Jan 15, the sensitive index (Sensex) of the Bombay Stock Exchange was down 13 percent. The company’s stock was down by a comparatively lower level of 11 percent from the issue price for retail investors, the company said.

Despite drawing record subscriptions, the first day of listing saw the Reliance scrip close at Rs.372 on the opening day Feb 11, with a huge discount over the issue price of Rs.450.

This had created huge resentment and disappointment among investors, who had overwhelmingly subscribed to the issue, as many expected the scrip to debut higher at around Rs.750-850 a share.

The IPO had attracted more than five million bids from all categories of domestic and international investors with aggregate commitment of over Rs.7.5 trillion ($189 billion) against the issue size of Rs.115.60 billion ($2.91 billion).

The company is currently developing 12 power projects in the country with a total planned installed capacity of 28,000 MW. This is among the largest portfolios of power generation assets under development.

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Source……..

The Indian market wide NIFTY index from the Indian Stock Exchange is down 15 per cent between 1 January and 15 February compared the ASX 300 being down 12 per cent and the US S&P down 8 per cent.

But IPOs in India are recovering faster than elsewhere, so fast that the dawning economic superpower could salvage and breathe new life in the global IPO market.

“It seems India is one country saving the ailing Global IPO market with US$3.3 billion worth of proceeds from eight deals, making it the largest IPO market in the world so far this year,” said Thomson Financial’s Deals Express report.

“The bulk of volumes came from the biggest IPO deal so far this year - Reliance Power’s US$3 billion IPO last January 21.”

Thomson Financial also noted, “India garnered 49.1 per cent of Global IPO proceeds compared to just 3.7 per cent in the same period last year. A feat considering the Global IPO decline of 36.1 per cent compared to the same period last year.”

This however just confirms how slow the IPO market is looking globally. “Taking off Reliance Power’s US$3 billion IPO - Global IPO decline must have gone down by 64 per cent. Both Top Two Largest IPO markets last year, China and US, experienced declines compared to the same period last year,” said Thomson Financial.

The news gets even better for investors willing to jump back into the subcontinent. “India still has a hefty IPO pipeline to come. In fact, this week, a total of three IPOs from India is set to launch. Emaar MGF’s IPO, estimated at US$1.6 billon will be the second largest IPO in the world so far this year, behind Reliance Power’s US$3 billion IPO.”

If India is bouncing back faster than anyone expected, then why is it still so hard for planners to invest into the country? Influential planners who attended the recent Financial Standard Chief Economists Forum said that encouraging their platforms to put Indian funds onto their platforms was so difficult they were considering to go direct instead.

As far as India is concerned, maybe it’s time for wealth management to catch up with the economic reality.

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There are three investment banks in particular – Goldman Sachs, Deutsche Bank and Barclays Capital – that some Euromarket spectators would enjoy seeing taking a fall which would require them to be stretchered away by paramedics and into intensive care. There used to be four, but Société Générale spectacularly met its own internal Waterloo – have you also noticed how little sympathy there is for the French bank?

Of course, the attitude of the ghoulish spectators is based largely on jealousy. Société Générale was “too clever by half”, and how could a medium-sized French bank dominate the huge international equity derivatives sector?

Despite the revelations about Jérôme Kerviel, that equity derivatives franchise is still intact. The only question is whether Société Générale’s main counterparties will remain as loyal as before.

Goldman Sachs is involved in almost every single large public transaction, but underneath it is a trading house which lives on its risk management and trading prowess. Where it excels is in its allocation of capital resources.

Time after time it moves its own capital around at lightning speed and makes, usually but not always, correct bets, while its flat-footed competitors are left holding stale portions which produce substantial losses.

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Technology has really taken away a lot of fun from watching the stock markets in action. All you see is bleary-eyed executives sitting in front of several screens. One press of a button and a transaction is through.

Watch clips of the old outcry system and you will realise that Darwin was right. Jobbers jumping and pumping their hands with each quote, much like a group of monkeys acting excitedly in their cage. While technology has made one species of monkeys vanish, it has left several new species that need to be tackled.

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So, here’s the equation. Three crore rupees creates one direct job and another two jobs indirectly. You don’t have to look any further to see why the latest growth estimates look like they do.

GDP growth estimated for 2007-08 might be slightly lower than what was anticipated but that’s hardly the statistic to be worried about. The worrying number is the growth in household consumption expenditure - just above 6.5 per cent. So, an economy growing at nearly 9 per cent can’t generate consumption growth of even 7 per cent.

On the other hand, everyone reading this article must have experienced exactly the opposite in the past one year. Their consumption expenditure has surely grown faster than their income. That’s because all of us who speak in English, surf the Net and read columns about the stock markets have done well for ourselves in the past few years.

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