Forex trading is both exciting and profitable although it is also very competitive and
Any basic foreign exchange trading course should include a variety of different facets of trading including trading terminology, concepts and processes that are all vital to give the beginner confidence as he venturforex signalsforex forex forex chartsforex forumforex managed forex with performance recordsforex brokerstrading forexforex 2bcapital 2bmarket
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The first step on the road to being a truly successful Forex trader is training and there are a lot of different ways to master the intricacies of Forex trading. But, although the knowledge acquired through training is fundamental to your success in trading, it is just one part of the puzzle for your true success.
So, before you rush straight from your Forex training course into the live world of trading, here are 6 indispensable tips.
1. Adopt the right attitude. The really successful Forex traders know only too well that attitude is crucial and that adopting an approach to do whatever is needed for success is key.
You can read as many tip sheets as you wish and listen to the 'gurus' for hours on end but success is not going to come until you equip yourself with the knowledge that is needed, carefully set down your own personal strategy for trading and then get out there and do what your senses tell you is necessary to turn a profit.
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2. Pick the right method. There are several different methods for predicting the course of the foreign currency markets, as well as some extremely sophisticated software to help with this task, and you have to choose one particular method and stick to it.
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You will need to master the skills of mapping and charting and will have to develop your own particular system for deciding precisely when to enter and exit the market. There will be ups and downs and you will find yourself questioning your method and being tempted to give it up in favor of an alternative method but you will have to stand your ground. As soon as you start chasing one method after another in response to a trading loss you soon find that one loss turns into two and then three and so on.
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3. Be disciplined. Although this naturally follows on from the comments made above about sticking to your chosen method it is something that you need to adopt in every aspect of life as a Forex trader. Having established your trading strategy and method you should stick with it and must not allow yourself to be thrown off course either by events or by the opinions of others.
4. Adopt the right mental attitude. Foreign currency trading can be very stressful at times and the volatility of trading and the inevitable swing between profit and loss on individual trades may and indeed frequently does produce considerable mental pressure. Learning to handle the stresses of trading life is no less important than learning the workings of trading.forex scalperforex trading machineforex trading software onlineforex trading stylelearn forexadm forex
5. Do not be afraid to take a risk. A common mistake amongst Forex traders is a fear of taking risks. Risk and reward go hand in glove and you will not succeed if you are continually turning away from taking a risk. Taking risks does not of course imply throwing caution to the wind and merely diving in head first, but it means that, having calculated the risks involved, you are happy to trade assertively based upon your reading of the market and in spite of the risks.forex blogforex informationswiss online forex brokertools online currency forex tradingforex enterprisesforex managed accountsforex signal softwarelearn to trade forexcursos de forexcustom forex indicatorsforex freewareforex made easy
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forex charts join in the fun will need to have at least a bit of basic Forex trading training.6. Take your own trading decisions. It is essential that you focus your attention when it comes to your own trading and not to be knoecked off your course by the opinions of others. You will be working alongside individuals who are more than willing to offer you their advice but you need to remember that most of them will do nothing more than talk a good trade. Truly successful traders are a rare breed and they invariably steer their own ship.Hurrying into Forex trading without the required training is an extremely risky game but, once you have acquired the knowledge needed, success will depend very much on your ability to establish a clear course and then steer to it despite anything that might come along to throw you off your course.forex market hours
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forex trading systemes into the currency market for the very first time. The very best Forextraining courses will also focus particular attention on the sheer size of the market and the volume of trading and prepare the beginner to think on his toes and to make decisions quickly.
Novice traders will have to learn things like the different types of order used in buying and selling, bids, margins, leverage and rollover. He also has to appreciate the psychology of trading and the importance of risk management, patience, discipline, stress management managed forexonline forex tradingtrading spot forex
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managed forex account Additionally, novice traders need to learn the skills of market analysis and will need to have a clear understanding of both technical and fundamental analysis and master the skills of plotting and reading Forex charts.
A grounding in the history of the foreign exchange market is also a key element of any Forex trading training, though it is normally overlooked or covered merely in passing. However, a sound understanding of the background of the market together with an understanding of many of the mistakes made as the market has grown is invaluable in helping to build a strategy for trading.
Fortunately there are many ways to study Forex trading nowadays and beginners are spoilt for choice. But, this can of course be both good and bad and makes selecting the learning method that is ideal for you a bit difficult.
Like many things the starting point for most people is going to be a book or two on Forex trading and this is undoubtedly an excellent place to begin as it is quite cheap and will often help considerably when deciding whether foreign exchange trading is right for you. Nevertheless, forex software
forex signal
beth graves forexthough this is an excellent introduction, you will have to have some type of more personal training before beginning to trade and this means attending Forex classes or seminars locally or choosing one of the many online Forex courses.
Whichever route you decide to pick you should do your homework carefully and consider just what you will be getting for your money. This is one investment that you need to make and the expense of your training will be worth it in the long run. However all training courses are not equal and some will provide you with much more value for your money than others. Wherever you are able to seek the opinions of trusted colleagues and friends about particular choices and, if this is not possible, do not be afraid to shop around and ask plenty of questions before committing yourself.
Foreign currency trading is an exciting world that is happily now open to even those among us with relatively small capital and it can be both very lucrative and great fun. Starting trading without some type of sound Forex trading training is however a recipe for disaster.
Tuesday, November 27, 2007
The most important thing that you should know about forex trading
Getting Into The Lucrative World Of Forex Trading
For many years the foreign exchange market was the preserve of major players such as national banks and multi-national corporations. In the 1980s however new rules were introduced which permitted smaller investors to enter the market through a margin account. In simple terms, a margin account allows you to trade with more money than you actually have in your trading account. For example, a 100:1 margin account allows you to participate in trading up to $100,000 with an investment of only $1,000.
Now, although this entry level has opened up the market to the smaller investor, care needs to be taken as Forex trading is not easy and is certainly not without its risks. For this reason the very first thing that any novice trader needs to do is to sit down, study the foreign exchange markets carefully and learn the ins and outs of trading before putting any money at risk.
In addition to some basic training, the newcomer will also need to find a good broker as all trading must be conducted through a broker. Here a personal recommendation is often the best place to start but, in the absence of this, you should choose a broker who is registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This will provide you with protection against both abusive trade practices and fraud.
It is normally a simple process to open an account with a broker and once this is done and funds are added to your account you can start trading. Brokers will normally offer a number of accounts to suit individual clients and most will have "mini" accounts which will allow you to begin trading with as little as $250. The margin on which you are permitted to trade will vary from one account to the next.
One thing that you should always look for when selecting a broker is the ability to cut your teeth by carrying out simulated, or paper, trades for a period of time. This is a facility which many good brokers will provide and which simply allows you to trade in the normal manner but to do so simply on paper and without any money changing hands until you have found your feet. Many online brokers provide simulated accounts allowing you to make free paper trades for up to 30 days.
One thing that worries newcomers is the subject of trading charges and brokerage fees. Unlike many other markets, the Forex market is free of commission and so you can make as many trades as you like without worrying about running up huge brokerage fees. Your broker will make his profit from the 'spread' on each trade, which is the difference between the buying and selling price of a currency pair and is a subject all of its own.
A Guide to Choosing the Right Forex Trading Software
Continued advancements in forex trading software are responsible for the continued growth of the foreign exchange trade industry. Forex trading software is readily available and is more user friendly than ever before. If you have ever been discouraged from trying your hand at online investing because the software was too complicated, now is the time to try it again. The software offered on most of the large forex trading platforms comes with full 24 hour customer support. Forex traders demanded better trading systems, and the service providers have responded.
Quick fact : The Forex market is by far the largest financial market in the world, and includes trading between large banks,central banks, currency speculators,multinational corporations, governments, and other financial markets and institutions.
One site that offers their own version of forex trading software when you open an account with them is forex. com. This custom designed software is widely used and has a high rate of customer satisfaction. The site's customer service center is open 24 hours a day Monday through Friday (basically when the worldwide forex markets are open) so that you can address any issues that you may have immediately. Experienced forex traders know just how costly down time can be, so it's important to have someone to turn to immediately should any problems occur.
Did you know that the average daily trade in the global forex markets currently exceeds US$ 2-2.5 trillion !
Another great website that offers free downloadable forex trading software when you open an account is gftforex. com. The software they make available to their clients is called Dealbook360. This state of the art trading software is simple enough to allow even beginning forex traders to feel comfortable but powerful and comprehensive enough to keep even the most demanding foreign exchange traders happy and satisfied . In addition, Dealbook 360 monitors some of the tightest bid/buy spreads available, thus increasing your profit margins.
A third reference that you may find useful is fxstreet. com. This page lists all of the major trading companies and the financial institutions that they run out of. This site also lists what kind of software each trading company is currently utilizing. Aside from listing the forex trading software that a particular company is using, this site also provides useful current information about pip spreads and a few other details about each site. Do you want to know if a particular company offers live technical support? You can find the answer quickly on fxstreet. com.
Like any operating software, most brands of forex trading software are all built around the same basic template. While there might be slight functional differences in the way that they operate, they are all pretty much the same. The biggest differences and the differences that make a difference are found in the intangibles. Things like customer service records, availability of updates, and compatibility are all features that cause some forex trading software to stand beyond their competition when compared. Take the time to read what other consumers have written about various software providers and you will soon see which versions stand out in customer satisfaction.
A Guide to Choosing the Right Forex Trading Software
Continued advancements in forex trading software are responsible for the continued growth of the foreign exchange trade industry. Forex trading software is readily available and is more user friendly than ever before. If you have ever been discouraged from trying your hand at online investing because the software was too complicated, now is the time to try it again. The software offered on most of the large forex trading platforms comes with full 24 hour customer support. Forex traders demanded better trading systems, and the service providers have responded.
Quick fact : The Forex market is by far the largest financial market in the world, and includes trading between large banks,central banks, currency speculators,multinational corporations, governments, and other financial markets and institutions.
One site that offers their own version of forex trading software when you open an account with them is forex. com. This custom designed software is widely used and has a high rate of customer satisfaction. The site's customer service center is open 24 hours a day Monday through Friday (basically when the worldwide forex markets are open) so that you can address any issues that you may have immediately. Experienced forex traders know just how costly down time can be, so it's important to have someone to turn to immediately should any problems occur.
Did you know that the average daily trade in the global forex markets currently exceeds US$ 2-2.5 trillion !
Another great website that offers free downloadable forex trading software when you open an account is gftforex. com. The software they make available to their clients is called Dealbook360. This state of the art trading software is simple enough to allow even beginning forex traders to feel comfortable but powerful and comprehensive enough to keep even the most demanding foreign exchange traders happy and satisfied . In addition, Dealbook 360 monitors some of the tightest bid/buy spreads available, thus increasing your profit margins.
A third reference that you may find useful is fxstreet. com. This page lists all of the major trading companies and the financial institutions that they run out of. This site also lists what kind of software each trading company is currently utilizing. Aside from listing the forex trading software that a particular company is using, this site also provides useful current information about pip spreads and a few other details about each site. Do you want to know if a particular company offers live technical support? You can find the answer quickly on fxstreet. com.
Like any operating software, most brands of forex trading software are all built around the same basic template. While there might be slight functional differences in the way that they operate, they are all pretty much the same. The biggest differences and the differences that make a difference are found in the intangibles. Things like customer service records, availability of updates, and compatibility are all features that cause some forex trading software to stand beyond their competition when compared. Take the time to read what other consumers have written about various software providers and you will soon see which versions stand out in customer satisfaction.
Becoming A Forex Trader Means Mastering The Tools Of The Trade
The Forex market is very much a technical market and as such it is supported by a barrage of software tools which are not simply helpful to the trader but are an absolutely essential part of trading in a market which enjoys both high volume and considerable volatility. It is essential therefore that traders not only know what tools are available to them but are skilled in their use.
At the heart of Forex trading is a wealth of information which has to be not only constantly updated but which also has to be accurate. Such data, which is essentially displayed through a series of computer screens, needs to cover both current currency price data and historical price data and the systems in use needs to be able to analyze and display this data in a form that is of value to the trader.
In addition traders need to have fast and easy access to current and historical political and economic data and have to have the ability to analyze currency movements in relation to such information.
There are two fundamental forms of trading in operation today - reactive trading (in which a trader buys and sells in direct response to political and economic events) and speculative trading (in which a trader buys and sells on the basis of his prediction of the direction in which the market will move in response to current political and economic events). Whether a trader is buying and selling on a reactive or speculative basis it is essential that he has accurate and up-to-date information on which to base his decision.
But information alone is not enough and traders also need to have access to a range of tools that allow them to analyze this information, whether such analysis is fundamental or technical in nature.
Fundamental analysis is based upon the belief that the market moves in response to such things as political events, economic news, changes in trading patterns, movements in interest and similar events. Tools required here will therefore include such things as software programs that can plot currency movements against trade data and interest rate data and use historic data to build models which predict movements in a huge variety of different political and economic conditions.
Technical analysis by contrast is based upon the belief that the market follows a pattern which has been well established over time and that future movements in the market can be predicted by analyzing and charting historical data to produce a series of models which can be used to predict future patterns.
Whatever your position either as a reactive or speculative trading and whether you are buying or selling on the basis of a fundamental or technical analysis of the market the one thing you need is information. In essence this means using a range of complex analytical tools and you will need to take the time to familiarize yourself with the tools available to you and then to master the skill of using these tools.
Forex Trading UK
Taking a bit of time to learn how the forex market reacts to news and events will greatly enhance your trading profits. You can learn to chart and follow markets in the Forex trade world on your own, or you can rely on a broker as you would in the New York stock exchange. Forex brokers make their money on the spread that means the difference between the Bid and Ask price.
So trading the forex market is simply trading foreign currencies. If you focus on the Forex for a few months you can make that dream a reality and create time and money to do what you REALLY want. If you plan to trade forex full time, you need to treat it like a job or a business, and not like a get rich quick scheme.
You really should familiarise yourself with any forex trading software as soon as possible. There is much complexity involved in the foreign exchange market, and if you are not completely knowledgeable about the concepts and processes involved, you may not be able to enter into the proper Forex trading patterns. This is of primary interest to any forex trader as any positions taken can yield enormous returns.
Trade smartly, and gain the maximum out of FOREX, good luck. As trades are always done in pair of currency pairs, FOREX traders can always find chance to make money in anytime, regardless on the fall or rise period of one single country currency. The liquidity of the Foreign Exchange Market is also very attractive for the Forex investor as trades range.
Traders will inevitably make mistakes - consequently, they will lose real money. Forex is gives you a 40% return on your investment. Other factors that make the forex market unique are the high liquidity of the market, the wide variety of traders and institutions involved, and the wide variety of factors which affect prices. This versatility attracts many investors to become Forex traders. For this reason Forex traders are not limited to the general time constraints of the New York Stock Exchange or NASDAQ.
When you recognize an uptrend or a downtrend in Forex charts try to create the channel that includes this trend. These "mini-trading" accounts are a good way to begin forex trading and often there is no commission attached to your trading. Irrespective of any stock market collapse, the forex market continues 24 hours every day without fail.
Thousands of investors are now turning the benefits of Forex trading into great returns. Whether it be an at home forex trading course or a live forex seminar, take the time to get educated. Forex offers the possibility of huge profits in relatively short periods of time. The forex market is the most liquid and most actively traded market in the world. You should find Forex companies with the ability to provide you with timely news and the latest updates on the currency situation so that you will be properly informed and be aware of what is happening currently.
Forex trading companies allow an automatic take profit option which allows the investor to preset the rate at which you want to see and it will do it for you.
If you'd like access to more information and resource links pertaining forex trading, then check out my site at
The Value Of Picking The Best Forex Training Course
Forex trading is both exciting and profitable although it is also very competitive and volatile and anybody who wants to join in the fun will need to have at least a bit of basic Forex trading training.
Any basic foreign exchange trading course should include a variety of different facets of trading including trading terminology, concepts and processes that are all vital to give the beginner confidence as he ventures into the currency market for the very first time. The very best Forex training courses will also focus particular attention on the sheer size of the market and the volume of trading and prepare the beginner to think on his toes and to make decisions quickly.
Novice traders will have to learn things like the different types of order used in buying and selling, bids, margins, leverage and rollover. He also has to appreciate the psychology of trading and the importance of risk management, patience, discipline, stress management and a great deal more. Additionally, novice traders need to learn the skills of market analysis and will need to have a clear understanding of both technical and fundamental analysis and master the skills of plotting and reading Forex charts.
A grounding in the history of the foreign exchange market is also a key element of any Forex trading training, though it is normally overlooked or covered merely in passing. However, a sound understanding of the background of the market together with an understanding of many of the mistakes made as the market has grown is invaluable in helping to build a strategy for trading.
Fortunately there are many ways to study Forex trading nowadays and beginners are spoilt for choice. But, this can of course be both good and bad and makes selecting the learning method that is ideal for you a bit difficult.
Like many things the starting point for most people is going to be a book or two on Forex trading and this is undoubtedly an excellent place to begin as it is quite cheap and will often help considerably when deciding whether foreign exchange trading is right for you. Nevertheless, though this is an excellent introduction, you will have to have some type of more personal training before beginning to trade and this means attending Forex classes or seminars locally or choosing one of the many online Forex courses.
Whichever route you decide to pick you should do your homework carefully and consider just what you will be getting for your money. This is one investment that you need to make and the expense of your training will be worth it in the long run. However all training courses are not equal and some will provide you with much more value for your money than others. Wherever you are able to seek the opinions of trusted colleagues and friends about particular choices and, if this is not possible, do not be afraid to shop around and ask plenty of questions before committing yourself.
Foreign currency trading is an exciting world that is happily now open to even those among us with relatively small capital and it can be both very lucrative and great fun. Starting trading without some type of sound Forex trading training is however a recipe for disaster.
Different Types of Commercial Real Estate
Real estate investing can be an excellent career, if you keep your wits about you and handle things right. However, it's possible to make big mistakes if you're not well educated. That's why knowing about the different types of commercial property can be a big help. Being aware of the different kinds of commercial real estate gives you access to the benefits and drawbacks of each. Here's a little bit of information to help you get started.
Commercial real estate covers a wide range of properties, including apartments, malls, office buildings, shopping centers, distribution locations, warehouses, and research properties. Some properties fit into two of these categories at once, such as buildings that combine office and industrial uses. These are referred to as flex properties. If the property contains more than half its area in office space, it's called office/flex. When it's mostly industrial use, it's called industrial/flex. Other flex properties may include shopping areas or laboratory and research and development areas.
Hotels may also be included in the category of commercial real estate. However, some investors consider a hotel to be more of an operating business, and categorize them with the subset of properties including nursing homes or assisted living facilities and casinos. The one thing that all commercial properties have in common, with the exception of raw land, is that they're capable of producing income. That income may come in the form of capital gains, or it may be through the receipt of rents from tenants.
In addition to these major property types, you may also see commercial real estate categorized as niche property. This category includes specialty properties like apartments built for students, age restricted living meant for older residents, self-storage, and office buildings that are suited to a particular sort of business, such as the medical field.
Raw land is the last category of commercial property. This is undeveloped land without any existing structures on it. Some investors acquired this land, intending to obtain the right permits to build commercial properties on it, within local zoning laws. These properties can then be used to obtain income, either as rentals or in the form of capital gains. So, raw land can eventually produce income, too. It just does so less directly.
Each type of commercial property comes with its own benefits and problems. For instance, raw land allows the developer to build as he or she chooses. However, the cost of building and the time required is often greater than fixing up an existing property to your standards. Raw land can make up for this by being less expensive than property which has already been developed, and is a great choice if your project needs a specific location or you'd like to control the building process. Raw land can also be a great choice if you can buy it while it is still zoned agricultural and change the zoning to commercial. The change in zoning alone can add great value to the property.
Shopping malls provide a great deal of rental income, provided that they're properly designed. Shopping centers are similar, but may require a lower initial investment, since they can be purchased at a smaller size. It's important, when building these kinds of facilities, to plan properly. Provisions for food and beverage outlets and adequate parking make a big difference in the amount of trade that is available to provide income for your property.
Warehouses and self-storage units have the benefit of requiring minimal staff and upkeep, although it's important to maintain them. Properties such as research and development or research laboratories may sell for a greater amount than if the building were put to a lower use.
Each type of property has its own characteristics. Picking the right one can take some work. Therefore, it's a good idea to talk to people who have experience in the field to decide what kind of commercial property investment is right for you. Doing your research before you invest and staying informed is an important part of being successful in a commercial real estate investment career. Knowledge is the best way to avoid making a big mistake, and can turn a potential money sink into a profit.
Saturday, November 17, 2007
KR Choksey Sec is bullish on Rel Ind, MRPL in oil sector
Commenting on the run up in the oil sector Jigar Shah of KR Choksey Securities said factors like the short supply of crude and refining capacities is leading to this rally and enjoy high margins. Shah added that in terms of the existing problems like recovery, oil bonds and pricing flexibility, he does not see the government taking very concrete steps to overcome them.
Shah is quite bullish on MRPL in this sector and would definitely look at this stock on a decline. However, he said that Reliance Industries will be his favourite pick within this sector.
Excerpts of CNBC-TV18’s exclusive interview with Jigar Shah:
Q: How are you looking at the oil sector and the run up that you have seen? You think it is justified? Do you have picks in the space?
A: As far as the oil sector concerned, there are 2-3 important factors which are leading to the rally. First of all, internationally, apart from crude which is in short supply, the refining capacity is in even greater short supply. Even a country like Iran, which is the second largest producer of crude oil, doesn’t having refining capacity and has to import the finished product. So the boom in refining products for petroleum is definitely likely to sustain for medium to long-term. That is causing these stocks to rally and enjoy very high margins on the gross refining basis.
The second aspect is that, on a relative basis, some of the refineries in India, especially in the private sector, Reliance has shown wonderful progress and they have been able to register fantastic profit margins. As a result of that, more coastal refineries can come up. Relatively, PSU refineries are quoting at much lower amount of market capitalisation particularly due to the socialistic policy followed by the government. That is the catching that’s happening.
But in terms of the problems that exist like under recovery, oil bonds and pricing flexibility, they continue. I really do not see a very concrete step being announced by the government, at least as of now, to takeaway those fears. So that continues and it’s not changed. But there is a relative catch up that has happened in the wake of optimism that something will happen. Now that something, whether it will happen or not, only time will tell. But fundamentally, we cannot really compare the PSU refineries and Reliance Petroleum, that’s about it.
There is a fantastic run up that has happened and the market capitalizations have now caught upto a very great extent. That leaves very small room from this level for their market cap to go up.
Q: You said that most of the value seems to have been caught up on the part of the PSU oil companies. What are your buys in that space? Also from the small caps space stocks like MRPL, Manali Petro, South Asia Petro all of these stock that have run up today?
A: As far as the petroleum refining stocks are concerned, I have been liking MRPL because of its business model which is slightly different from the others and they have been able to export a lot. But now, with this catch up, I would still stick to Reliance Industries, not even Reliance Petroleum at this level, and that would still be my favorite pick within the sector.
In the public sector, I think, there’s a tremendous amount of stock price increase that has happened in the short-term and therefore, I would avoid. But on declines I would definitely look favorably at MRPL. As far as the other small stocks which have risen in the petrochemical stock, I really do not have any specific view.
Only RBI must regulate currency futures: Curr Fut draft
The Currency Futures Draft says that RBI should be single regulator for currency futures. The panel is divided on setting up special exchange Vs using existing bourses.
The margining of credit risk will be with exchanges, it added. The overall control for position limits will remain with the RBI, it added. The panel suggested that the RBI should stipulate participants and fix participant-wise position limit. The RBI should also decide contract design, the Panel advised.
The panel prefers single contract over multiple contracts. The contract size must be small if target audience is retail, it says. It also prefers cash settlement of currency futures contracts. The RBI panel wants currency futures contracts to mature mid-month. The currency future markets should be for residents - FIIs, NRIs should only be there as hedgers, it feels. Brokers and banks may be allowed as intermediaries. Only dollar-rupee contract will be permitted initially, the draft says.
Midcap outperformance may continue in future: Experts
Pankaj Vaish of Lehman Brothers has a view that midcap out performance may continue in future and regulatory action has instilled some risk premium. He adds that regulators have been fairly successful, rupee has stabilised. The flows have slowed down and people are looking at other alternatives to invest in Indian market.
Sangeeta Purushottam of Religare Securities sees some pockets of excesses in both large & midcaps and also sees pockets of fair rationality in some sectors. She thinks that investors were looking for opportunities outside large caps.
Excerpts from CNBC-TV18’s exclusive interview with Pankaj Vaish and Sangeeta Purushottam:
Q: What is your sense of this kind of divergent performance that you have seen this week? Do you expect that to continue?
Vaish: Yes, I think that is possible. The good thing about the markets now is that two-way risk has come back. About a month ago, it looked like the only way the stock market knew to go was up and that clearly is not sustainable. So, it took some regulatory action for the market to do a major seesaw.
But it has instilled some amount of much needed equity risk premium, saying that we have to be careful and valuations do matter. So, we are in that second stage where people should look at the specific name. They should see good valuations behind the name that they are picking. So, I think this is healthy. I think this is good that people are actually thinking of looking beyond the 10 or so names. The breadth had become extremely narrow all the way up and those are generally unhealthy markets. So, I take that as a sign of something a little more meaningful now.
Q: Do you agree because you could equally argue that some of the names that have gone up 25-50% this week probably do not have so much by way of value or fundamentals about them? Are you seeing any excesses in midcaps or are you generally relieved that the market is spreading out?
Purushottam: I think that there are some pockets of excesses both in the midcaps and the large caps and in some ways it is a slightly peculiar market that you see these pockets of excesses and also you see these pockets of fairly extreme rationality, where if companies have not done well, they have got deeply punished.
You are seeing both phenomenon sort of operate side by side. Overall, I am actually not really surprised that the action has moved to the midcaps. That is partly because the large caps had led a large part of the move that had happened in the markets and it was just getting very hard to find value or stories in the large caps. Also, we saw the regulatory action on the telecom sector take the zing out of that sector for a while; IT has been under a cloud. So, if we really look at sectoral stories amongst the large caps, they were getting narrower, which meant that you needed to look for opportunities outside the frontliners and simultaneously because the rally had been led by the large caps, there was value emerging in the midcaps. Some of them have done extremely well in terms of their results.
I think it was a natural shift and this is not really the first time that that has happened. We have often seen this that market action tends to get concentrated first in the large caps and moves into the midcaps and then moves back again and that is really the phase that we are seeing.
Q: What is happening from an FII perspective. Of course the volume of FII action has diminished considerably but do you think FIIs are also making some kind of switch between largecaps and midcaps?
Vaish: In that sense, I think the regulators have been fairly successful and what they set out to do and you can also see besides the numbers and in terms of FII investments on a daily basis but also in the rupee now stabilizing where it is. In that sense I think they have been able to be successful. FIIs are now in a strategic mode, trying to figure out what is the best way to access the Indian markets. So dealers like us are working with some of them in terms of the front door that Sebi had talked about; bringing in people through sub accounts and we are working on that.
In the interim as those solutions are put in place and some more clarity is sought from Sebi it is going through a process where the flow has slowed down to a trickle and we are looking at new alternatives in terms of bringing them in through the front door.
Q: How do you read this India out performance for the last few days, even on days when there is a fairly sharp global sell-off, India hardly blinks, how do you explain that and do you think this out performance is sustainable?
Purushottam: This is partly reflected of the fact that a lot of people believe that the India story is actually a structural one. So despite the movements that we see in other markets, overall we do tend to take cues from what’s happening overseas. But then that belief is really what keeps the out performance going. And that is something which is not just with a lot of the FIIs but its really also domestic money coming into play.
If we look at the numbers over the last few weeks, the strength in the market has not really been on the back of all the money, its really being domestic money. So the domestic investor today also believes that and here I mean non-institutional investor also. So there is a lot of liquidity, which is there domestic, retail money, HNI money etc, which is also supporting the markets. So that has a part to play in it as well.
Wednesday, November 14, 2007
De-listing part of overall capital cleanup process: iGate
Phaneesh Murthy, CEO, iGate Global Solutions said the company is doing well and that they will keep IT concerns in mind. Murthy added that the delisting is part of an overall capital cleanup process. Commenting on the IT sector he said that 2008 budgets are going marginally up to flat.
According to Murthy, the IT industry continues to be strong from a growth perspective. On the dollar-rupee concerns, he said they would start showing up in margin depletion a little later than anticipated.
Excerpts of CNBC-TV18’s exclusive interview with Phaneesh Murthy:
Q: Your shareholders will be trying to arrive at what is a fair price. What do you think you can deliver in FY09 in terms of earnings just to enable your shareholders to value your company well. Do you think it will be Rs 30/per share next year?
A; We are at a current run rate of Rs 7.25 which was what we did last quarter and if one annualize that, it’s about Rs 29/per share. We are continuing to grow so we think we will deliver slightly higher than that. We haven’t made any positive guidance, but from the numbers, one can see that margins are going up and the numbers look reasonably okay.
Q: What’s your own expectation in this case, the decision is not yours as the executive management of the company, but for the promoter who own the 80% plus. You probably will ask the question to your self as a shareholder of iGATE on whether you should be tendering or not. As a CEO, what is the fair price for iGATE 400 plus. You have to take the decision your self in few weeks time?
A: I think there are combination of factors, as you can clearly see, all IT stocks have been hammered because of the rupee dollar concerns and the slowing of the US economy of concerns. At the same time, our numbers are going up quite nicely.
If I look back, before this announcement and before the board meeting in October, our stock was near the Rs 250-260 range. I think we’ve factored in all of this and we have come up with some price. Clearly the price has been around the Rs 360 or 350 mark or thereabouts for the last couple of weeks now.
I think there are all these kind of factors which are going into our assessment. The parent company has it’s own factors in terms of budget, what they are thinking is the fair price etc, which we have not much visibility into it. Like you said, we are also participants and some spectators in this events.
The democratic process specified by Sebi is that all shareholders tend their stock at whatever price they want and that’s what we’ll also do.
Q: Even so, a couple of brokerages refer that the fair value is closer to Rs 420. In you conversations with the promoters how open are they to considering a price like that?
A: It’s difficult to say how open they are, because they are reasonably motivated to getting this transaction done, it’s part of an overall capital structure clean up which we have been wanting to do for sometime. We had two options whether to continue with the US listing or continue with the Indian listing. To that extent there is enough motivation to get the transaction done.
On the flip side, the amount of cash available on the balance sheet and what they think is a fair price is something that we have not been exposed to. If I look back at history, there is a six-month price and clearly there has to be a premium over the six-month price and that six-month price is looking fairly irrelevant right now.
I know that I have to also take a decision at to what price to tender our stocks at and I will do that in the next week or so.
Q: You might be in a more candid position to talk about what is happening in the industry? What do you read of the intense bearishness there is on this sector and the kind of concerns there are on the currency front. Is it over done, or do you think there are genuine problems for this sector over the next few quarters?
A; If I look back, in my assessment 2008 budgets are going marginally up to flat over 2007, so that’s good news overall. However, the challenge coming up in the immediate couple of quarters is that the 2007 fourth quarter run rate on spending budget is actually higher than the next years budget on an annualized basis.
What has happened is because in 2007 the IT spending went up over the year; the run rate of 2007 Q4 is actually higher than the run rate of Q1 next year. So to that extent, while the over all budget for the year is higher in 2008, from a run rate prospective, we are estimating Q1 on spending is lower. That’s probably what is putting a bit of pressure or bringing in little bit of bearishness.
But fundamentally, I think the industry continues to be reasonably strong. The outsourcing demand continues to be strong, customers continue to spread more and more of their IT budgets in India and do more and more services in India. So from that entire front, I would argue that from a growth perspective, from numbers perspective, one would not see too much of a problem as reported by many companies. That will be all right, so that’s not a concern.
On the dollar-rupee front, that is something which is going out ahead more than few quarters because most companies have hedged their positions for the 18-24 months in front like us. So I would argue that while it is a concern, it will start showing up more in terms of margin depletions little further out than many people are anticipating.
That’s my analysis, but if the rupee does end at Rs 38-36 to a dollar, the industry has to get a lot more productive and a lot more efficient. Employees also have to rise up to the challenge to try and figure out what they can do to make sure that they are equal participant in the fact that, they have so show their productivity at that 20% higher rupee-dollar parity than what was existing, may be 12 months ago.
Q: Have you spoken to any of your institutional holders at iGATE just to come back to the delisting. Would there in all fairness expecting any kind of a patience premium because you have made your shareholders wait a bit while you were going through that consolidation restructuring internally and just when the numbers start showing up, you are taking your stock out. Would it be fair on the part of the mutual funds who own your stock to say that for us who have been patiently holding out, don’t give me today’s price but give me a bit of premium above that?
A: We haven’t had any conversations with them, it’s really iGate corps place to actually have that conversation with them and not from the company management point of view.
But from an analysis we have found that many of the mutual funds who hold the stock are not very old shareholders. Some of them have invested in the stock less than 6 to 12 months ago and some of them invested in the stock for about two years.
To that extent I’m not entirely sure that they might want a patience thing, they might want a premium because the company is doing better, but that is a different issue altogether.
Q: Just one quick question on your observation on this whole reverse book process since you are in the thick of it. Do you think the modality is need to be tweaked a little bit. Why if lower price for example, which is quite meaningless, do you think a cap can be indicated by the parent who is making the offer to tell investors this is the price beyond which we don’t want to except shares and the chances of it going through are low. Would you have any other parameters guiding this reverse book principal?
A: I think the process of a floor price is reasonably a good one and it tries to protect the shareholders, I think the reverse booking is fairly a democratic process.
I think the one part of the puzzle which I just couldn’t figure out is, you have a board meeting, you announce it and then you have a shareholder meeting which is typically 3-4 weeks apart and then you make a public announcement. Now in that three to four weeks, there could be lot of speculative interest. My own take is that there should be some process by which that whenever the formal announcement is made you look back 6 months and take that as some kind of floor price, rather than wait for a future period where there could be high amount of speculative interest.
That’s the only one suggestion that I would try and come up with it, to try to figure out those 3-4 weeks gap between the board meeting and the decision taken at the board or calling of the EGM at the board meeting and then the general body meeting, where this resolution is passed. We need to figure out how to take care of that.
Q: You did indicate that if the offer doesn’t go through, the parent my consider other forms of consolidation. Right now, how high are chances of this offer going through because of the holding structure?
A; If one looks at it from multiple perspective, this is as ideal a case as you want for this kind of a buy back offer. Once you reach a 90% level, you can do a de-listing. 81.1% is already owned by the promoter, there is about 4-4.5% owned by key employees, another 5.5% owned by some institution and the balance 9.5-10% in the retail. So if you look at it from that perspective, because it is 81% versus a 50%-55%, to that extent it increases the probability of that offer going through dramatically more. I would be surprised if it doesn’t happen.
Q: One of your viewers has SMSd saying to ask you, in the interest of your children, not to tender the stock at less than Rs 425?
A: My kids would be quite happy to hear any higher price that we can get.
How has the stock performed? CNBC-TV18 Analysis reports...
The parent company is going to delist iGATE, the global Indian listed subsidiary via book building and they are fixing a floor price at Rs 288. If you take a look at how the stock has moved 10 days even before the announcement has come - at that time it was Rs 219 and the stock has given about close to 65% gain. After that it is trading right now close to Rs 360-370 levels. CNBC-TV18 has spoken to lots of analysts and the consensus arising is that the fair value, if done on the DCF method, the forward earnings could be anywhere between Rs 400 to 425. The 52-week high for the company has been Rs 432.
So if one looks at Rs 400 to Rs 425 band - we’ll be looking at 15 times forward earnings on FY09. Most analyst are expecting close to Rs 29 to Rs 30, which will be 15 times one and a half years forward earnings. How does it put vis-à-vis other peers - smaller peers such Mastek, Hexaware or even Patni, Aptech - all are trading below 10 times FY09 earnings. Tier I, the premium league is trading close to 19 and 20 times. So it will be midway between these two; you are giving the significant premium because they are listing also. Performance-wise iGATE has done a little bit better in the past two quarters; especially in this quarter, they have done better. Most analysts are expecting better performance going forward. If one takes a larger view going back and look at how they have performed over the past 12 quarters, they have been going through transition phase and most of them they have changed the way they have been working.
Mkts open with modest loss; cap good, metals gain
Following the stupendous run yesterday, the markets opened with modest loss today on the back of weak cues from the global markets. Market breadth was positive with over 550 stocks on the advancing side and about 300 stocks on the decline side.
At 9:56 am, Sensex was down 94 points at 19834 and Nifty was down 1 points at 5937. major gainers in the opening move were Hindalco, L&T, BHEL, Tisco, Tata Motors, Rel Energy, ONGC, Bharti, Airtel and Essar Oil.
Asian markets were trading lower. Hong Kong's Hang Seng plunged 0.53% or 153.32 points at 29,012.69, Taiwan's Taiwan Weighted fell 0.21% or 18.53 points at 8,924.40, Singapore's Straits Times tumbled 0.62% or 22.03 points at 3,502.88, South Korea's Seoul Composite was down 0.30% or 5.95 points at 1,966.63. However, Japan's Nikkei rose 0.34% or 52.53 points at 15,552.09.
US markets: The Dow fell 76.08 points, or 0.57%, to 13,231.01. Broader stock indicators also fell. The Standard & Poor's 500 index lost 10.47 points, or 0.71%, to 1,470.58, while the Nasdaq composite index tumbled 29.33 points, or 1.10%, to 2,644.32.
Market cues:
- SEBI Board approves new derivative products
- New products include mini contracts on indices and volatility index
- FIIs net buy USD 30.3 million in equity on Nov 13
- MFs net sell Rs 12.8 crore in equity on Nov 13
- NSE F&O Open Interest up by Rs 2,182 crore at Rs 98,207 crore
F&O cues:
- Futures Open Interest up by Rs 1,388 crore, Options Open Interest up by Rs 793 crore
- Nifty Futures shed 19 lakh shares in Open Int; at a 21-pt premium
- Stock Futures shed 1 cr shares in Open Interest
- Nifty Open Int PCR at 1.21 vs 1.16
- Nifty Puts add 7.9 lakh shares in Open Interest
- Nifty Calls add 1.8 lakh shares in Open Interest
- Nifty 5900 Put adds 2.6 lakh shares in Open Interest
- Nifty 5700 Put adds 2.6 lakh shares in Open Interest
- Nifty 6200 Call adds 1.65 lakh shares in Open Interest
Monday, August 13, 2007
Foreign exchange market
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex markets currently exceeds US$ 2 trillion. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks
The foreign exchange market is unique because of:
* its trading volume,
* the extreme liquidity of the market,
* the large number of, and variety of, traders in the market,
* its geographical dispersion,
* its long trading hours - 24 hours a day (except on weekends).
* the variety of factors that affect exchange rates,
Exchange-traded forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, but only accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).
Average daily global turnover in traditional foreign exchange market transactions totaled $2.7 trillion in April 2006 according to IFSL estimates based on semi-annual London, New York, Tokyo and Singapore Foreign Exchange Committee data. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $2.9 trillion a day. This was more than ten times the size of the combined daily turnover on all the world’s equity markets. Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues such as internet trading platforms has also made it easier for retail traders to trade in the foreign exchange market. [2]
Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 32.4% in April 2006.
The ten most active traders account for almost 73% of trading volume, according to The Wall Street Journal Europe, (2/9/06 p. 20). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually only 0-3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203. Minimum trading size for most deals is usually $100,000.
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100 / 1.2300 for transfers, or say 1.2000 / 1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e. 0.0003). Competition has greatly increased with pip spreads shrinking on the major pairs to as little as 1 to 2 pips.
Sunday, August 5, 2007
How to trade Forex?
Trading foreign exchange is exciting and potentially very profitable, but there are also significant risk factors. It is crucially important that you fully understand the implications of margin trading and the particular pitfalls and opportunities that foreign exchange trading offers. On these pages, we offer you a brief introduction to the FX markets as well as their participants and some strategies that you can apply. However, if you are ever in doubt about any aspect of a trade, you can always discuss the matter in-depth with one of our dealers. They are available 24 hours a day on the Saxo Bank internet trading system, SaxoTrader.
The benchmark of its service is efficient execution, concise analysis and expertise - all achieved whilst maintaining an attractive and competitive cost structure. Today, Saxo Bank offers one of Europe's premier all-round services for trading in derivative products and foreign exchange. We count amongst our employees numerous dealers and analysts, each of whom has many years experience and a wide and varied knowledge of the markets - gained both in our home countries and in international financial centres. When trading foreign exchange, futures and other derivative products, we offer 24-hour service, extensive daily analysis, individual access to our Research & Analysis department for specific queries, and immediate execution of trades through our international network of banks and brokers. All at a price considerably lower than that which most companies and private investors normally have access to.
The combination of our strong emphasis on customer service, our strategy and trading recommendations, our strategic and individual hedging programmes, along with the availability to our clients of the latest news and information builds a strong case for trading an individual account through Saxo Bank.
Terms of trading are agreed individually depending on the volume of your transactions, but are generally much lower in cost when compared to banks and brokers. Your margin deposit can be cash or government securities, bank guarantees etc. Large corporate or institutional clients may be offered trading facilities on the strength of their balance sheet. The minimum deposit accepted for an individual trading account depends on the account type. Trade confirmations and realtime acount overview are built into SaxoTrader, while further account information can be produced in accordance with your specific requirements.
terms used in forex trading
| • Appreciation |  | An increase in the value of a currency. |
| • Ask | | The price requested by the trader. This usually indicates the lowest price a seller will accept. |
| • Base currency | | The currency that the investor buys or sells (i.e. EUR in EURUSD ). |
| • Bear | | Someone who believes prices are heading down. A bear market is one in which there is a sustained fall in prices and which does not look like it will recover quickly. |
| • Bid | | The price offered by the trader. This usually indicates the highest price a purchaser will pay. |
| • Bid/Ask | | The Bid rate is the rate at which you can sell. The Ask (or offer) rate is the rate at which you can buy. |
| • Bull | | Someone who is optimistic about the market. A bull market is characterised by enthusiastic and sustained buying. |
| • cross | | When trading with currencies, the investor buys one currency with another. These two currencies form the cross: for example, EURUSD . |
| • Cross rate | | An exchange rate that is calculated from two other exchange rates. |
| • Depreciation/decline | | A fall in the value of a currency. |
| • EURUSD | | Means that you trade EUR against dollars. If you buy Euro you pay in dollars and if you sell Euro you receive dollars. |
| • FX, Forex, Foreign Exchange | | All names for the transaction of one currency for another, e.g. you buy £100.00 with USD 150.25 or sell USD 150.25 for £100.00. |
| • Interbank | | Short-term (often overnight) borrowing and lending between banks, as distinct from banks' business with their corporate clients or other financial institutions. |
| • Interest rate differential | | The yield spread between two otherwise comparable debt instruments denominated in different currencies. |
| • Leverage (gearing) | | In this case leverage means that the investor only funds part of the amount traded. |
| • Long | | To buy. |
| • Long position | | A position that increases its value if market prices increase. |
| • Margin | | The deposit required when entering into a position as well as to hold an open position. Your margin status can be monitored in the Account Summary. |
| • NYSE | | The New York Stock Exchange. |
| • Pips | | A pip is the smallest unit by which a Forex cross price quote changes. So if EURUSD bid is now quoted at 0.9767 and it moves up 2 pips, it will be quoted at 0.9769. |
| • Secondary currency (variable currency or counter currency) | | The currency that the investor trades the base currency against (i.e. USD in EURUSD ). |
| • Short position | | A position that benefits from a decline in market prices. |
| • Short | | To sell. |
| • Speculative | | Buying and selling in the hope of making a profit, rather than doing so for some fundamental business-related need. |
| • Spot | | A Spot rate is the current market price of an asset. |
| • Spread | | The difference between the bid and the ask rate. |