Accelerated Share Repurchase – ASR:
A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company. The shares are returned to the client through purchases in the open market, often purchased over a period that can range from one day to several months.
Accelerated share repurchases allow corporations to transfer the risk of the stock buyback to the investment bank in return for a premium. The corporation is therefore able to immediately transfer a predetermined amount of money to the investment bank in return for its shares of stock. ASRs are often used to buy shares back at a faster pace and reduce the amount of shares outstanding right away.
Goldman Sachs will pick up a 9.4% stake in Max India for Rs 5.4 billion (USD 116 million), the Economic Times and Business Standard newspapers reported on Sunday, citing the outcome of a board meeting held on Saturday.
Max India will issue compulsory convertible debentures that will be converted to shares after 15 months. The proceeds will be used to fund the company’s existing insurance and healthcare businesses, the newspapers said.
Emergency Fund :
An account that is used to set aside funds to be used in an emergency, such as the loss of a job, an illness or a major expense. The purpose of the fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses as well as reduce the need to use high interest debt, such as credit cards, as a last resort.
This was the question asked by someone on the famous website for Indian mutual funds Valueresearchonline.com, here’s the complete question and its answer provided by it… http://new.valueresearchonline.com/story/h2_storyView.asp?str=101079
The complete question goes like this…
I am looking to invest in a fund which has both gold and equity. Can you please suggest a fund which invests in an equal amount in both? Can you please furnish details such as past performance, ratings and risk return profile?
There is one fund which invests both in gold as well as equity – UTI Wealth Builder Series II. It invests up to 35% of the assets in UTI’s Gold ETF (Exchange Traded Fund). And rest into equities.
Although this can be an answer to the question above, a more profound question is why would someone like to invest in such a fund? Today there is only one such fund, tomorrow there may be many. But one should realize what is he actually achieving by investing in such a fund. If the fund is simply investing a part of its asset into one of the gold ETF’s then can’t you yourself do it? I mean why you need a fund to do that?? Invest directly in gold ETF for your thirst of gold investment. And invest the remaining amount in any of the equity diversified mutual funds – and there are tons of very nice mutual funds in this category.
The point I want to make is, a high degree of interdependency between two varieties of investment is not good for the investor as it him gives less control over his investments. In this case, if he separates Gold and Equity investments then he would have a plethora of choices for his investment, but if he decided to merge them, he just has only one. Besides that, although UTI Gold ETF is a good choice for gold investment , the rest 65% of the asset that is the equity diversification that fund is going to achieve for the investor is not the best! There are many good and trusted equity diversified funds, with proven track record, that can give him better equity investment portfolio and returns.
Moral: Think about the interdependency between the varieties of investments before you invest in any investment vehicle(e.g: a Mutual Fund).
Without being descriptive…let me put forward some of the objective points which have come in picture after the Railway Minister Mamata Banerjee’s Railway Budget.
- No change in Passenger Fares.
- Freight Rates untouched.
- One Doctor to be available on long distance trains to attend to passenger/staff medical emergencies.
- Ticket booking services to open in 800 new locations.
- 5000 Post Offices pan India to provide Railway ticket booking facility.
- ‘Turant AC’ sleeper trains to be introduced between major metros.
- Rs 1750 crore to be spent on Gauge conversion.
- Students to receive a 60% concession on train tickets.
- Non-stop trains to be operational soon on select routes.
- 50 Railway Stations to be built at par with international standards.
- Extension of ‘Ladies Special’ trains to major metros like Delhi, Kolkata and Chennai.
- 50% concession for Scribes.
- Rs 81685 crore to be the estimated working expenditure.
- Kachrapara, Bengal to get new coach factory.
- Scholarship schemes for Girl child of Group B Railway employees.
- Women commandos to be increased in key routes.
- Physically challenged passengers to be accomodated in specially designed coaches.
- Increase in utility stores such as PCO/STD/ISD booths and book stores.
- Increased emphasis on security (platform and train).
- Catering facilities to be upgraded in order to address growing number of passenger complaints/feedback.
- SMS updates for waiting list status.
- Tatkal booking scheme reduced from 5 days to 2 days.
- Setting up of ATMs on 200 stations identified.
- High capacity double decker AC trains to be introduced on select routes.
- Railwas will no longer be guided by economic viability but social commitment said Mamta Banerjee.
- Cold storage facilities to be developed for farmers storing vegetables and fruits.
- New Hospitals to be Opened up for Hospital Staff.
- Indian Railways to lease out land for commercial purposes to increase revenue.
Bear Spread : An option strategy seeking maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.
- Lok Sabha elections in April/May- Satyam defers buyback meet; to consider issues incl dilution of promoter stake on Jan 10.
- Satyam Promoters say institutions may have sold stake to cover margin calls.
- 3G auction process deferred by 2 weeks; last date for application likely around Jan 20: Srcs
- IBM, Accenture & Capgemini likely suitor for Satyam – ET
- Jet Airways to cut fares by 15-40% from today, raises Rs 1000 cr from banks
- Kingfisher Airlines To Cut Air Fares From Jan 1.
- Simplex bags order to construct 2 commonwealth stadiums for Rs 75 cr
- Suzlon’s 1800 cr rights issue cleared 2 months after the co suspended the plan
- Jindal Power to raise the capacity at the Chhattisgarh plant, plans to raise Rs 7000 cr – PTI
- BHEL bags Rs 5040cr contract from Jindal Power for the same
- Hind Zinc raises the price of zinc by Rs 1800/tonne to Rs 63400/tonne
- PSU banks told to shed SLR, lend more – ET
- Reliance retail set to offer big discount to drive up footfalls and beat slowdown – ET
- ICICI BK likely to cuts rates by 50-75 bps by Jan – ET
- US Co Travaxo wins case against Ajanta Pharnma, preventing from selling eye drop under brand name Travaxo in India – ET
- SRK promoted Red Chillies finalises comedy sitcom with NDTV imagine – ET
- Core Projects may acquire US based Princeton UK 12 for $25-30m – ET
- Rolta to buy US IT consultancy firm – ET
- Tata Power to buy 2000 MW from spice – ET
- 23 brokers opt to exit BSE derivatives biz since Oct as prices correct 90%, volumes hit a low of Rs 85 lakh vs Rs 1500 cr – BS
- Tilaiya UMPP bids to be opened today – BS
Note: The information in post is taken from www.moneycontrol.com
The current situation in market is a chaos! Valuations of companies have fallen by about 50-60% for most of the companies and for some companied its above 95%! Yes, there are some real estate companies which have fallen that bad, for example, Orbit corporation once used to trade above Rs:1000 but now its trading around Rs; 50!
We need to analyze the companies before we invest in them, and the factors we are considering for this analysis will be robust and will be helpful in long term investing. I read an article some time back on http://economictimes.indiatimes.com/ and I am taking some part of it here which will help you a lot.
One tool that can help in identifying the right company is an investment strategy called CANSLIM. Developed by William O’Neil , the acronym actually stands for a very successful investment strategy. This strategy has been proven and has yield good returns in the past. CANSLIM consists of seven components. They are mainly quantitative parameters to be applied while selecting any company for investment. Each letter of the word CANSLIM denotes one parameter to be analysed in depth. They are:
C – Current quarterly earnings per share
It is important to choose stocks that have grown on a quarterly basis. For example, a company’s earnings per share (EPS) figures reported in this year’s April-June quarter should have grown relative to the EPS figures for that same three-month period of the previous year.
The percentage of growth a company’s EPS should grow by is subjective , but the CANSLIM system suggests around 18-20 percent. This suggests that basically all of the high performance stocks show an outstanding quarter-on-quarter growth.
A – Annual earnings per share
These figures should show meaningful growth over the past five years. CANSLIM stresses on the importance of annual earnings’ growth. The system indicates that a company should have shown good annual growth (annual EPS) in each of the last five years.
N – New things
The third criterion for a good company is that it has recently undergone a change, which is often necessary for a company to become successful. It could be a new management team, a new product, a new market, or a new high in stock price.
S – Shares outstanding
This should be a small and reasonable number. CANSLIM investors are not looking for older companies with a large capitalisation.
L – Leaders:
Buy market leaders and avoid laggards. In each industry, there are always those that lead, providing great gains to shareholders, and those that lag behind In CANSLIM analysis, distinguishing between market leaders and market laggards is of importance.
I – Institutional sponsorship
Buy stocks with at least a few institutional sponsors who have better-than-average recent performance records. Explore all the factors that should be considered when determining whether a company’s institutional ownership is of high quality.
M – General market
The market will determine whether you win or lose. So learn how to discern the market’s current direction, to interpret the indices (price and volume changes), and actions of the individual market leaders.The final CANSLIM criterion talks about market direction. When picking stocks, it is important to recognise the type of market.
The first two parts of the CANSLIM system are logical steps employing quantitative analysis by identifying a company that has demo strated strong earnings both quarterly and annually. By rigorously following them you have a good basis for a good stock selection.
I personally feel that the CANSLIM has the S and L factors contradicting eachother. S factors tells us that the shares outstanding should be low, that mean it’s not concentrating on small companies but the L factors says that copanies should be a leader in its segment, but hows that possible practically? How can a small company be a market leader? Take examples of market leaders of sectors, Infosys, Larsen and Toubro, Reliance, DLF etc all are market leaders but are huge companies. Anyways, I would rather give importance to S factor than the L factor because we should concentrate upon choosing the future market leaders rather than the current market leaders. If we modify the L definition a little bit then perhaps a better CANSLIM will come forward.
Changing definition of L: Let L mean to choose the future market leaders, rather than current market leaders. We can track the growth of market capitalisation of the companies which can give us an insight on this.
After you invest following this strategy and if the price falls and you become restless then again analyze the stocks you purchased and thereby again draw the conclusions whether you want to hold it or sell it or want to buy more!
Index ETF: Exchange-traded funds that follow a specific benchmark index as closely as possible. Index ETFs are much like index mutual funds, but whereas the mutual fund shares can only be redeemed at one price daily, the closing net asset value (NAV), index ETFs can be bought and sold throughout the day on exchanges. Through an index ETF, investors get exposure to a large number of securities in a single transaction. Index ETFs can cover U.S. and foreign markets, specific sectors, or a specific class of stock (i.e. small-caps, ADRs, etc.) but all incorporate a passive investment strategy, only making portfolio changes when changes occur in the underlying index.keep looking »