123 Sensex

Today's Hot News from the market

2009-05-27T09:14:00.000-07:00

NHPC IPO to hit market by July.

Simplex Projects Upper Circuit - Wins order worth 203 crores.

Gammon Infra hits Upper Circuit - wins order worth 861 crore.

IVRCL Infra bagged order worth 299 crore.

BSE Holidays 2009 / NSE Holidays 2009

2009-05-26T08:57:00.000-07:00

Day	Date	Holiday
Thursday	8th January 2008	Moharram
Monday	26th January 2008	Republic Day
Monday	23rd February 2009	Mahashivratri
Tuesday	10th March 2009	Id-E-Milad
Wednesday	11th March 2009	Holi
Friday	3rd April 2009	Ram Navmi
Tuesday	7th April 2009	Mahavir Jayanti
Friday	10th April 2009	Good Friday
Tuesday	14th April 2009	Dr. Ambedkar Jayanti
Friday	1st May 2009	Maharashtra Day
Monday	21st September 2009	Ramzan Id
Monday	28th September 2009	Dasera
Friday	2nd October 2009	Gandhi Jayanti
Monday	19th October 2009	Diwali ( Bhaubeez)
Monday	2nd November 2009	Gurunanak Jayanti
Friday	25th December 2009	Christmas
Monday	28th December 2009	Moharram

Source - Chittorgarh.com

Oil India IPO may hit the market before September 10th this year

2009-05-26T08:54:00.000-07:00

Oil India IPo may hit the market before september 10th 2009 , the reason is if they go public before september 10th 2009 , they dont need to file for DRHP again , They might raise almost 400-500 million dollar through IPO.

I'll invest to the full capacity. Will you too?

Source - Rupya.com

And finally a correction

2009-05-26T08:53:00.001-07:00

Markets ended sharply lower after consolidating in the last two sessions. A correction was due as the markets had run up quite significantly in the last two and a half months. Heavyweights witnessed huge selling pressure ahead of F&O expiry on Thursday.

The BSE Sensex finally closed 323.99pts or 2.33% lower at 13,589.23. The Nifty shed 120.85pts or 2.85% to settle at 4,116.7. Broad market indices lost more. While the BSE Midcap index ended 3.4% lower, the BSE Small Cap index lost 3.12%. This explains the negative market breadth as A/D ratio was 0.91:1 on the BSE.

Barring the BSE IT index, all the sectoral indices ended lower. The top losers were the BSE Realty, Bankex, Capital goods and Consumer Durables indices. The top losers from the BSE-30 were RCom, Ranbaxy, Tata motors, NTPC and ICICI Bank. The top gainers were Hindalco, Infosys, Wipro and Sterlite.

With the markets correcting today, we recommend a cautious approach on fresh longs as there is a strong possibility that the markets may fall further

Source - HDFCSEC

UBS raises India's 2009-10 GDP forecast to 6.2%

2009-05-26T08:52:00.001-07:00

Foreign investment bank UBS in its latest report said India's economy may grow at 6.2% in 2009-10, revising its estimate of 5.2% growth, citing lower interest rates, smaller excess capacity and a fall in risk aversion.

The Reserve Bank of India has recently forecast growth at about 6%. In the previous three fiscal years, the economy expanded at or more than 9%.

Industrial output could pick up in a limited way to 5-8% in the fiscal year ending in March 2010, from 2.4% in the past year but move decisively above 10% in 2010/11, UBS said.

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Hindustan Dorr Oliver hits upper circuit - wins order worth 24.5 crore.

HSIL hits upper circuit after very good QTR Results.

ERA Infra Engineering hits Upper Circuit - Bags 2 Orders.

12 mutual fund terms you must know

2008-04-20T07:39:00.001-07:00

As you probably know, a mutual fund is an investment that pools together money from a number of investors. It then uses professionals to manage and invest this money with the aim of achieving a return.

The mutual funds industry is regulated by the Securities and Exchange Board of India.

If you are interested in investing in mutual funds, here are some terms you need to understand.

AMC

An Asset Management Company is the fund house or the company that manages the money.

The mutual fund is a trust registered under the Indian Trust Act. It is initiated by a sponsor. A sponsor is a person who acts alone or with a corporate to establish a mutual fund. The sponsor then appoints an AMC to manage the investment, marketing, accounting and other functions pertaining to the fund.

For instance, ABN AMRO Trustee (India) Private Limited is appointed as the trustee to the ABN AMRO mutual fund.

ABN AMRO Asset Management (India) Limited is appointed as its investment manager.

Various funds with different objectives can be floated under the umbrella of one parent.

So ABN AMRO Equity Fund, ABN AMRO Opportunities Fund and ABN AMRO Flexi Debt Fund are all independent schemes of ABN AMRO Mutual Fund. They are managed by the ABN AMRO AMC.

NAV

The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is priced Rs 10. Later, depending on the value of the investments, this price could rise or fall.

Load

This is a fee that is charged when you buy or sell the units of a fund.

When you buy the units of a fund, you pay a percentage of it as a fee. This is known as the entry load.

Let's say you are investing Rs 10,000 and the entry load is 2%. That means you pay Rs 200 as the entry load and Rs 9,800 is invested in the fund.

Now, let's assume you are selling the units of your fund. And the Rs 10,000 you invested initially is now Rs 15,000. Let's further assume the exit load is 2%. So you pay Rs 300 and get back Rs 14,700.

Generally, if funds charge an entry load, they will not charge an exit load. Or vice versa. Only one of the loads is charged.

The load is a percentage of the NAV.

Portfolio

This is the term given to all the investments made by the fund as well as the amount held in cash.

Corpus

Let's assume a very small mutual fund has an initial investment of 1,000 units and each unit is worth Rs 10. Hence, the total amount with the fund is Rs 10,000. This is referred to as the corpus. Later, some other investors invest Rs 2,000. Now the corpus will be Rs 12,000 (Rs 10,000 + Rs 2,000).

The total amount invested (Rs 12,000) is called the corpus or the total amount of money invested in the fund.

AUM

Assets Under Management is the total value of all the investments currently being managed by the fund.

Let's say the corpus is Rs 12,000 but, due to a rise in the price of the shares it has invested in, the value of the units has increased. So the Rs 12,000 invested is now worth Rs 15,000. This figure is referred to as AUM.

Diversified equity mutual fund

This is a mutual fund that invests in stocks of various companies in various sectors.

ELSS

Equity Linked Saving Schemes are diversified equity mutual funds with a tax benefit under Section 80C of the Income Tax Act.

To avail of the tax benefit, your money must be locked up for at least three years.

Balanced fund

A fund that invests in both equity (shares) and debt (fixed return investments) is known as a balanced fund.

Debt fund

These are funds that invest in fixed return investments like bonds. A liquid fund is one that invests in money market instruments, these are fixed return investments of a very short tenure.

NFO

A New Fund Offering is the term given to a new mutual fund scheme.

SIP

A Systematic Investment Plan refers to periodic investing in a mutual fund. Every month or every three months, the investor will have to commit to putting in a fixed amount. This will go towards the purchase of units.

Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000.

If the NAV on the day you invest in the first month is Rs 20, you will get 50 units.

The next month, the NAV is Rs 25. You will get 40 units.

The following month, the NAV is Rs 18. You will get 55.56 units.

So, after three months, you would have 145.56 units. On an average, you would have paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.

12 mutual fund terms you must know

2008-04-20T07:39:00.000-07:00

The mutual funds industry is regulated by the Securities and Exchange Board of India.

If you are interested in investing in mutual funds, here are some terms you need to understand.

AMC

An Asset Management Company is the fund house or the company that manages the money.

For instance, ABN AMRO Trustee (India) Private Limited is appointed as the trustee to the ABN AMRO mutual fund.

ABN AMRO Asset Management (India) Limited is appointed as its investment manager.

Various funds with different objectives can be floated under the umbrella of one parent.

So ABN AMRO Equity Fund, ABN AMRO Opportunities Fund and ABN AMRO Flexi Debt Fund are all independent schemes of ABN AMRO Mutual Fund. They are managed by the ABN AMRO AMC.

NAV

The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is priced Rs 10. Later, depending on the value of the investments, this price could rise or fall.

Load

This is a fee that is charged when you buy or sell the units of a fund.

When you buy the units of a fund, you pay a percentage of it as a fee. This is known as the entry load.

Let's say you are investing Rs 10,000 and the entry load is 2%. That means you pay Rs 200 as the entry load and Rs 9,800 is invested in the fund.

Generally, if funds charge an entry load, they will not charge an exit load. Or vice versa. Only one of the loads is charged.

The load is a percentage of the NAV.

Portfolio

This is the term given to all the investments made by the fund as well as the amount held in cash.

Corpus

The total amount invested (Rs 12,000) is called the corpus or the total amount of money invested in the fund.

AUM

Assets Under Management is the total value of all the investments currently being managed by the fund.

Diversified equity mutual fund

This is a mutual fund that invests in stocks of various companies in various sectors.

ELSS

Balanced fund

A fund that invests in both equity (shares) and debt (fixed return investments) is known as a balanced fund.

Debt fund

These are funds that invest in fixed return investments like bonds. A liquid fund is one that invests in money market instruments, these are fixed return investments of a very short tenure.

NFO

A New Fund Offering is the term given to a new mutual fund scheme.

SIP

Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000.

If the NAV on the day you invest in the first month is Rs 20, you will get 50 units.

The next month, the NAV is Rs 25. You will get 40 units.

The following month, the NAV is Rs 18. You will get 55.56 units.

4 Good Reasons to Get a Refinance Home Loan

2008-03-02T07:53:00.001-08:00

Refinance Your Home Now and Lower Your Interest Rate

What is a refinance home loan?
A refinance home loan or a home loan refinance is a new loan obtained through your lender or a new lender to pay off existing loan. However, you may opt to apply for a lower interest rate and or cash out on your homes equity.

When should I refinance my home? It is a known fact that interest rates are lower than they have been in years. This is due to our fast paced and ever changing economy and market. Now would be the perfect opportunity to refinance your home to obtain a lower interest rate. Even a .25 difference can save you thousands of dollars a year in mortgage payments.

Why should I refinance my home?
There are several reasons home owners decides to refinance. The four most common reasons include:

To obtain a lower interest rate
Home owner generally are aware of interest rate down fall. They take advantage of this opportunity by applying to a refinance loan to lower their existing interest rates and save money on mortgage expenses. The money that a borrower saves on mortgage expenses can be invested in other financial investments.

To receive a refinance cash out
Some home owners who have enough equity accumulated in their homes refinance to cash out their equity and get a lower interest rate

To make home improvements
Sooner than later you will find that maintaining your home is hard work (not to mention quite expensive). In most cases, home owners will pursue a refinance, rather than a personal loan, in order to save on interest rates. A personal loan may have higher interest rates and are normally, not as large as a home improvement loan.

To change loan programs
A majority of home owner refinance because they are not satisfied with their current loan program. They may be under a 5 year arm, but somewhere down the line they decided they would prefer a 30 year fixed loan. Whatever the reason may be, a refinance home loan will solve the problem.

What are the benefits of refinancing my home?
There are several benefits included with refinancing your home, including:
Your credit may be in better standings then before you purchased your home, now you can refinance and obtain a more suitable loan, with lower interest rates and terms.
Or, you can obtain a home equity line of credit and have cash available when you need it.
With refinance cash out, your lender can consolidate your bills and pay off all of your debt. You will not have to deal with the hassle by yourself.

What are the different refinance loan options?
As with a traditional loan, refinance home loans offer some of the same loan programs, such as:
10/15/30 year fixed
Zero Down
Interest Only
And so on

Where can I refinance my loan?
You can apply for a refinance home loan through your current lender. Or you may search for a new lender more suitable to your financial needs. This search can be done by internet search, flipping through the yellow pages, or consulting with your real estate agent.

4 Good Reasons to Get a Refinance Home Loan

2008-03-02T07:53:00.000-08:00

Refinance Your Home Now and Lower Your Interest Rate

Why should I refinance my home?
There are several reasons home owners decides to refinance. The four most common reasons include:

To receive a refinance cash out
Some home owners who have enough equity accumulated in their homes refinance to cash out their equity and get a lower interest rate

What are the different refinance loan options?
As with a traditional loan, refinance home loans offer some of the same loan programs, such as:
10/15/30 year fixed
Zero Down
Interest Only
And so on

10 Easy Ways To Organize Your Business Finances

2008-03-02T07:52:00.001-08:00

Whether you are a new entrepreneur or a more experienced business owner, taking control of your finances can feel like a part-time job. Some simple tips can help you streamline your time, organize your finances and reduce the stress of business money matters.

1. Keep Your Bills in One Place

When the mail comes, make sure it goes in one place. Misplaced bills can be the cause of unwanted late fees and can damage your credit rating. Whether it's a drawer, a box, or a file, be consistent. Size is also important. If you get a lot of mail, use an area that won't get filled up too quickly.

2. Pay Your Bills on Schedule

Bill paying can be simplified if it's done at scheduled times during the month. Depending on how many bills you receive, you can establish set times each month when none of your bills will be late. If you're paying bills as you receive them, chances are you're spending too much time in front of the checkbook. Although bills may state "Payable Upon Receipt", there's always a grace period. Call the creditor to find out when they need to receive payment before the bill is considered late.

3. Read Your Credit Card Statements

Most people take advantage of low interest credit card offers but never read their statements when paying the bill. Credit cards are notorious for using low interest as bait for new customers then switching to higher rates after a few months. Make a habit of looking at your statement carefully to see what interest rate you are paying each month and if any transaction fees have been applied. If the rate increases or a transaction fee appears on your statement, a simple call to the credit card company can oftentimes be beneficial in resolving the matter. If not, try to switch your money to a more favorable rate.

4. Take Advantage of Automatic Payments

Most banks offer a way to automatically deduct money from your account to pay creditors. In addition, the creditors usually offer a lower interest rate when you sign up for this payment option because they get their money faster and on-time. Consider it as one fewer check to write, envelope to lick and stamp to buy. Just make sure you record the deduction when the automatic payment is scheduled or you run the risk of bouncing other checks.

5. Computerize Your Checkbook

Using a software program is a handy way to organize your finances. Whether it's Quicken(r), Microsoft Money(r) or another package, these easy-to-use programs make bill paying and bank reconciliation a cinch. Computer checks can be ordered almost anywhere and fit right into most printers. Once the checks are printed, all of the information is automatically recorded in your electronic checkbook. Furthermore, many banks have direct downloads into these software packages so when money is deposited or withdrawn, the transaction is entered immediately onto your computer. And, when it comes time to do taxes, it couldn't be easier.

6. Get Overdraft Protection

Most banks have a service where, if you run the risk of bouncing a check, the money will come from another source. For a nominal fee, the bank will link your checking account to either a savings, money market, or credit card so the embarrassment of bouncing a check will be avoided. Call or visit your bank to learn about this convenient feature.

7. Cancel Unused Accounts

Whether it's a credit card or bank account, write a letter requesting that the account is formally closed. Not only will this improve your credit score, it is a useful way to avoid money from being scattered all over the place. Don't let department stores and credit card companies lure you into opening new accounts by offering favorable interest rates and purchase discounts. It's easy for credit to get out of hand by taking advantage of every credit offer that comes your way.

8. Consolidate Your Accounts

If you have several credit card accounts with outstanding balances, try to consolidate them into one. Be careful and check the balance transfer interest rates and one-time fees. Also, make a list of all your open Money Markets, Savings, CDs, IRAs, Mutual Funds, and other accounts to see if any consolidation can be done. Keeping your money in fewer places eliminates all of the guesswork involved and reduces errors.

9. Establish Automatic Savings

Create a link from your checking account into a savings account that will not be touched. This can usually be done through the banks and automatic amounts will be transferred over each month. Most people will not put money into a savings account on a regular basis. They may wait until a large tax refund check arrives or some other event to actually deposit money into savings, retirement or other accounts. If you establish an automatic savings deposit every month, your accounts will begin accumulating money faster than you think.

10. Clean up Your Files

Make sure your paid bills are organized in a filing cabinet. Keep individual files for paid bills. Go through your files at the end of each year and throw out bills and receipts no longer needed for auditing purposes. Contact your local IRS office to see how long records need to be kept for audits. Usually federal tax return audits can be done three years back but cancelled checks may need to be kept for seven. Consult the Internet for auditing and records-keeping procedures for your state or region.

10 Easy Ways To Organize Your Business Finances

2008-03-02T07:52:00.000-08:00

1. Keep Your Bills in One Place

2. Pay Your Bills on Schedule

3. Read Your Credit Card Statements

4. Take Advantage of Automatic Payments

5. Computerize Your Checkbook

6. Get Overdraft Protection

7. Cancel Unused Accounts

8. Consolidate Your Accounts

9. Establish Automatic Savings

10. Clean up Your Files

Saving is sin, and spending is virtue...Interesting article by an unknown Indian Economist

2008-03-02T07:47:00.001-08:00

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over 100 billions. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $800 billion. Yet, the American economy is considered strong and trusted to get stronger.

But where from do Americans get money to spend?

They borrow from Japan , China and even India . Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars.

India itself keeps its foreign currency assets of over $100 billions in US securities. China has sunk over $600 billion in US securities. Japan 's stakes in US securities is in trillions.

Result:

The US has taken over $5 trillion from the world. So, as the world saves for the US , Americans spend freely. Today, to keep the US consumption going, that is for the US economy to work, other countries have to remit $180 billion every quarter, which is $2 billion a day, to the US !

A Chinese economist asked a neat question. Who has invested more, US in China , or China in US? The US has invested in China less than half of what China has invested in US.

The same is the case with India . We have invested in US over $100 billion. But the US has invested less than $20 billion in India .

Why the world is after US?

The secret lies in the American spending, that they hardly save. In fact they use their credit cards to spend their future income. That the US spends is what makes it attractive to export to the US . So US imports more than what it exports year after year.

The result:

The world is dependent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money.

It's like a shopkeeper providing the money to a customer so that the customer keeps buying from the shop. If the customer will not buy, the shop won't have business, unless the shopkeeper funds him. The US is like the lucky customer. And the world is like the helpless shopkeeper
financier.

Who is America 's biggest shopkeeper financier? Japan of course. Yet it's Japan which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not grow. To force the Japanese to spend, the Japanese government exerted it self, reduced the savings rates, even charged the savers. Even then the Japanese did not spend (habits don't change, even with taxes, do they?). Their traditional postal savings alone is over $1.2 trillions, about three times the
Indian GDP. Thus, savings, far from being the strength of Japan , has become its pain.

Hence, what is the lesson?

That is, a nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend. Dr. Jagdish Bhagwati, the famous Indian-born economist in the US , told Manmohan Singh that Indians wastefully save. Ask them to spend, on imported cars and, seriously, even on cosmetics! This will put India on a growth curve. This is one of the reason for MNC's coming down to India , seeing the consumer spending. "Saving is sin, and spending is virtue."

But before you follow this neo economics, get some fools to save so that you can borrow from them and spend!!!

Saving is sin, and spending is virtue...Interesting article by an unknown Indian Economist

2008-03-02T07:47:00.000-08:00

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over 100 billions. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $800 billion. Yet, the American economy is considered strong and trusted to get stronger.

But where from do Americans get money to spend?

They borrow from Japan , China and even India . Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars.

India itself keeps its foreign currency assets of over $100 billions in US securities. China has sunk over $600 billion in US securities. Japan 's stakes in US securities is in trillions.

Result:

A Chinese economist asked a neat question. Who has invested more, US in China , or China in US? The US has invested in China less than half of what China has invested in US.

The same is the case with India . We have invested in US over $100 billion. But the US has invested less than $20 billion in India .

Why the world is after US?

The result:

Hence, what is the lesson?

But before you follow this neo economics, get some fools to save so that you can borrow from them and spend!!!

38 steps to becoming a trader

2008-03-02T07:46:00.003-08:00

1. We accumulate information - buying books, going to seminars and researching.

2. We begin to trade with our 'new' knowledge.

3. We consistently 'donate' and then realise we may need more knowledge or information.

4. We accumulate more information.

5. We switch the commodities we are currently following.

6. We go back into the market and trade with our 'updated' knowledge.

7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.

8. We start to listen to 'outside news' and to other traders.

9. We go back into the market and continue to 'donate'.

10. We switch commodities again.

11. We search for more information.

12. We go back into the market and start to see a little progress.

13. We get 'over-confident' and the market humbles us.

14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED.
15. We get serious and start concentrating on learning a 'real' methodology.

16. We trade our methodology with some success, but realise that something is missing.

17. We begin to understand the need for having rules to apply our methodology.

18. We take a sabbatical from trading to develop and research our trading rules.

19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.

20. We add, subtract and modify rules as we see a need to be more proficient with our rules.

21. We feel we are very close to crossing that threshold of successful trading.

22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.

23. We continue to trade and become more proficient with our methodology and our rules.

24. As we trade we still have a tendency to violate our rules and our results are still erratic.

25. We know we are close.

26. We go back and research our rules.

27. We build the confidence in our rules and go back into the market and trade.

28. Our trading results are getting better, but we are still hesitating in executing our rules.

29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.

31. We continue to trade and the market teaches us more and more about ourselves.

32. We master our methodology and our trading rules.

33. We begin to consistently make money.

34. We get a little over-confident and the market humbles us.

35. We continue to learn our lessons.

36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.

37. We are making more money than we ever dreamed possible.

38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Most traders will identify with this list and should be able to place themselves within these steps.

Keep in mind that very few people progress through these steps in an orderly fashion. Developing your trading skills is an iterative process.

For example, you may reach Step 13., find that although you were making money, your basic premise for trading was flawed (you might have been benefiting from the bull market, rather than your own trading prowess and then have been rudely awakened when the market entered a bear phase) and you may drop back to Step 4 and start 'climbing' the steps again.

Having the proper mindset, attitude and psychological makeup becomes increasingly important as you progress through the steps.

The focus of the earlier steps is on external issues, i.e. developing proficiency in the mechanics of trading while the focus of the latter steps (particularly from Step 30, on) is on internal issues, i.e. improving ourselves mentally and psychologically, maturing as trader.

Dollar Vs Rupee - The Currency Fight

2008-03-02T07:46:00.002-08:00

Like past few weeks, whenever I happen to see the exchange rate comparison in the evening news, I see the US dollar value dropping day by day instead of going up which was the case in the past. Its surely grabing lot of attention these days among the economist and traders all over the world.

Just in few months, dollar value has gone down around 35% pairing with most famous currencies like EURO, YEN, JPN and SWISS. Like every other NRI, especially I was watching very closely Rupee (Rs) over US ($) value. It seems in just last year or so, US dollar has come down 7 to 8 over the Rupees. As an Indian, I am happy to see that Rupee is gaining strength but on the other side as an NRI I was bit concerned.

Why Dollar weakening?
In general the weaking effect of Dollar can be contributed by various factors like government, market forces of supply and demand for a particular country's currency, interest rates, inflation, and consumers' expectations about what will happen in the future. At present financial experts seems to point out the feat factor on lot of economical aspects like Housing market crash, consumer slow down, oil price increase being the culprits. They predict that the collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates.

I am sure many of you might have seen a popular forward email about India becoming a super economic power with a reverse trend happening like,

Americans waiting in big lines at the Indian Embassy for work visas
Value of Rupee goes up lik 1 Rupee = 45 dollar
Americans take telephone interviews for Indian Jobs

We already seen most of it happening right now except the dollar value reversal. Looks like the days are not too far for that one to be true.
In yesterday's news, Financial minister P.Chidambaram commented that "US dollar weaking is really good for India as it benefits India in lot of ways while our trader and exporters are struggling with it. Buying price of oil is little cheaper and also it really slows down our inflation rate".

Is this a Good news for Indians or Bad one for NRI's? I somehow have a mixed feeling on it. May be its a good news as we see Rupee is gaining strength over Dollar. But in lot of ways it really hurts the Indian Export industry and NRI's very importantly.

How does it affect really?

Because of the Dollar value weakening, the buying power of the dollar has gone down and you end up buying less compared to a year back. So exporters who get paid by dollars are seeing crunch in their profit margins. This really makes big impact when you are competiting with other global countries.

On the other instance, NRI's investing back at home will have major set back. For example, past year if you can buy 4.5 lakhs worth of property in just $10000 now it needs $11500, an increase the dollar spend. Similary if an NRI is sending money back home an average $1000 yielded 43,000 rupees after commission but not only yield 39,000 rupees. On average 8% decrease in the yield. I knew lot of NRI's who wanted to take advantage of the high interest rate in India, so converted their money and saved in Indian Banks which also helped India forex. Now with current dollar value reduction, NRI's are losing lot of money on conversion day by day which surely not encouraging the savings idea in India.

Overall, Dollar weakening is really good think for India on a broader outlook but it does truely affects many Indian exporters and NRI's in particular to a large extent. There is a lot of hope that its just a short term trend and should revert back pretty soon as its all part of a cycle.

38 steps to becoming a trader

2008-03-02T07:46:00.001-08:00