Month: November 2009

India ETF List — ETF Traded in India

I have tried to compile a comprehensive India ETF list. This contains all ETFs available to Indian investors currently. All these trade on the National Stock Exchange, and if I have missed any, please let me know.

India ETF: Equity

Nifty BeEs: This is an index ETF that tracks the Nifty, which means that it holds the stocks in the same proportion as they are present in the Nifty index. It has an expense ratio of 0.50% as on 29th May 2009.

Junior Nifty BeEs: This is an index ETF that tracks the performance of the CNX Junior Nifty index. It has an expense ratio of 1%.

Bank BeEs: This is an index ETF that tracks the performance of the CNX Bank Nifty. It has an expense ratio of 0.50% annualized.

PSU Bank BeEs: This is an index ETF that tracks the performance of CNX PSU Bank Index. It has an expense ratio of 0.75%.

Shariah BeEs: This is an index ETF that tracks the CNX Nifty Shariah index. The expense ratio of this ETF is 1.00% annualized.

S&P CNX Nifty UTI Notional Depository Receipts Scheme (SUNDER) ETF: This is an Index ETF that tracks the S&P CNX Nifty.

Kotak PSU Bank ETF: This is an index ETF that aims to provide returns corresponding to the CNX PSU Index. It has an expense ratio of 0.65%.

Reliance Bank Exchange Traded Fund: This is an index ETF that tracks the CNX bank index. It has an expense ratio of 0.80% up to Rs. 500 crore of assets, and 0.70% beyond that.

Quantum Index Fund QNIFTY ETF: This is an index ETF that tracks the performance of the CNX Nifty. It has an expense ratio of 0.75%.

India ETF: Liquid

Liquid BeEs: Liquid BeEs invests in a basket of call money, short-term government securities and money market instruments of short maturities while maintaining safety and liquidity. It has an expense ratio of 0.60% annualized.

India ETF: Gold

Here is the list of all the gold ETFs in India from an earlier post.

Name Expense Ratio Pricing Per Unit Inception Date
Benchmark Mutual Fund – Gold Benchmark Exchange Traded Scheme 1% Approximately 1 gram of gold 07 – March 2008
UTI Mutual Fund – UTI Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 3rd Jan 2007
Kotak Mutual Fund – Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 21st June 2007
Reliance Mutual Fund – Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 1st November 2007
Quantum Gold Fund – Exchange Traded Fund 1.25% Approximately half a gram of gold 27th February 2008
SBI Mutual Fund – SBI Gold ETF 1.50% Approximately 1 gram of gold 30th March 2009

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Economy and your finances carnival November 7th 2009

Welcome to this edition of the carnival. I hope you are having a good Sunday and here are some great posts to make it better.

Debt

Nate Kragness presents My Free Cash | Debt Consolidation Loans: Should You Pay a Firm to Manage and Eliminate Your Debts? posted at My Free Cash | Your Guide to Money Management, saying, “Credit card consolidation firms offer many ways to help you get out of debt, from consolidation loans to debt negotiations with your creditors. But before you decide to work with a firm to help you manage and eliminate your debts, make sure you read and understand these important steps that you can take yourself, that may ultimately save you interest on you high interest loans.”

Silicon Valley Blogger presents Discover Credit Card Rewards, Sign Up Bonuses and Holiday Promotions posted at The Digerati Life

Economics

anotherjen presents The Recession is Over!… So, Why Don’t Things Feel Better? posted at The Next Rich Girl, saying, “Why the recession doesn’t feel over yet…”

Investments

Ray @ Financial Highway presents Gold Investment posted at Financial Highway, saying, “With increasing Gold Prices, investing in gold has become a hot topic. Although I do not like gold as an investment, here are some reasons why people do invest in gold.”

Tom @ Canadian Finance Blog presents Book Review – Stocks For The Long Run | The Canadian Finance Blog posted at The Canadian Finance Blog, saying, “Stocks For The Long Run, written by Jeremy J. Siegel, is a great book that as the name suggests, promotes the superior return of stocks over an extended period of time.”

Continue reading “Economy and your finances carnival November 7th 2009”

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Interesting Reads November 7th 2009

The most interesting thing I read this week was: Do Smart,  hard working people deserve to make more money? by James Kwak at the Baseline Scenario. The title tells you what the post is about, and I recommend that you head there and read it. I felt a strong emotion while I was reading it, and the last I saw, the post had 270 comments, so I wasn’t alone.

Now, on to other great stuff this week.

Articles

How to increase your productivity with the Pomodoro Technique @ Pen Stalker

Ally Bank (GMAC Bank) Review @ The Digerati Life

Balance Transfer Credit Cards @ The Smarter Wallet

How much can you save by doing a balance transfer? by Cash Money Life

Treasury and the blogs @ Baseline Scenario

How to tell if a credit card number is fake? @ Dough Roller

Hindu’s website design at foreign source @ The Tip Guy

Carnivals

Carnivals of Money Hackers # 89

Carnival of Twenty Something Finances Lost Edition

Festival of Stocks

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What should be your time horizon while investing in stocks?

This question popped up in a comment last week, and since I hadn’t thought of it for a long time – I had never written about it. I thought it’d be a good idea to address this question with a quick post.

Before you start reading the post, I should warn you that this is just the opinion of your humble blogger and nothing more than that.

Okay, now on to the question itself.

What should be your time horizon while investing in stocks?

The short answer is:

Very Long

Now, the long answer:

Here are my top three reasons why you should hold stocks for very long.

Continue reading “What should be your time horizon while investing in stocks?”

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Too Big to Fail by Andress Ross Sorkin: Book Review

I’ve just finished reading: Too Big to Fail by Andress Ross Sorkin, and I really enjoyed it. It reads like a novel and takes you through the events, people and stories around the financial panic last year. It starts off with JP Morgan agreeing to buy Bear Sterns and ends after the government decides to inject billions of dollars in the top financial institutions last October.

The book is entertaining, and I found it hard to keep it down once I started reading it. It is easy to read and focuses on the people, their stories and emotions, rather than delve deep on the technical matters related to the crisis. It is written for everyone, and is not just for people interested in Wall Street or finances in general.

Andrew Ross Sorkin has recreated a lot of conversations, and that makes the book really great. It makes you feel you are going through the events yourself, and adds real flavor to the whole thing.

Continue reading “Too Big to Fail by Andress Ross Sorkin: Book Review”

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Take gold action!

IMF had announced its intention to sell 400 metric tons of gold a few months ago. They wanted to raise money to lend to weaker nations by selling some of their gold. At that time, — China, Russia and India had evinced interest in buying IMF’s gold.

India finally bought half or — 200 tons of gold from IMF in the last two of weeks of October. The price tag was 6.8 billion dollars, which valued one ounce of gold at 1,045 USD. The transaction was done in hard cash, which I think means that India paid IMF in USD.

A lot of other countries (most notably China) have increased their gold holdings in the last year, so this is no surprise. China’s government holdings of gold increased to 1,045 tons this year from 400 tons in 2003. But, the deal was certainly big enough to push gold to all time highs yesterday.

After last year’s crisis, many countries are looking to diversifying their reserves and reduce their exposure to the US dollar. India had a relatively smaller percentage of gold in its reserves and RBI’s data for October 23rd 2009 shows that the percentage is still below 4%. After October 30th, when the gold purchase is complete, the percentage should have risen to 6%.

RBI Reserves

Continue reading “Take gold action!”

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GEM of a stock exchange

Growth Enterprise Market (GEM) is the brand new stock exchange of China. It is a NASDAQ style stock exchange aimed at providing finance to smaller companies.

It started trading last Friday, and on the first day of trading — created 13 paper billionaires. 28 companies listed on the GEM, aka ChiNext, and they rose between 76% and 210% in the first day of trading.

It’s another thing that 25 out of these 28 companies fell on the second day, and many of them fell by as much as 10% (which was the lower limit).

I read a few articles about ChiNext or GEM, and there were several things that caught my eye:

  1. Volatility: The first thing that I noticed was volatility. Anyone following the Chinese IPO market will not be surprised by it, but it’s hard to not take notice of. China’s IPO market is the biggest in the world right now, and the IPO market is really hot there. Given this backdrop, regulators were expecting volatility, and it seems they have created some rules to curb speculation, and have warned investors that they will crack down on aggressive speculation.
  2. Continue reading “GEM of a stock exchange”

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ASTEC LIFESCIENCES LIMITED IPO

Price Band and Dates of Astec IPO

The IPO is priced between Rs. 77 to Rs. 82. It opened on October 29th 2009, and will close on November 4th 2009.

IPO Grading

ASTEC Lifesciences has been graded 2 out 5 by CARE, which denotes below average fundamentals.

Business of ASTEC

Astec is engaged in the following two segments:

  1. Agrochemicals
  2. Pharmaceuticals

The agrochemicals segment involves manufacture of active ingredients, intermediates and formulations. The company is involved in manufacturing products that are used in crop protection and anti fungal agents.

The Triazole fungicide — its main product — is used in the agrochemical segment, and contributed 65.81% to sales. Dicap, its key product in the pharmaceutical segment contributed 14.14% of sales during FY 2008 – 09. So, you can see that the major chunk of revenue come from the agrochemical sector.

It has two plants – one in Mahad, Maharastra and the other in Dombivili, Maharashtra. The company is coming out with the IPO primarily to raise funds for expansion of the manufacturing facility of the Mahad plant and expanding the R&D facility of the Dombivili plant.

Financials of Astec

The company had net sales of Rs. 8,441.46 lakhs in 2008 – 09, up from 6,120.78 lakhs in 2007 – 08. The corresponding net profit for the two years was Rs. 1072.98 lakhs and Rs. 793.64 lakhs.

The company had an EPS of Rs.11.37 for the last year, and the P/E ratio comes out between 6.77 and 7.21 on the higher and lower band based on the earnings. BL states that much larger companies such as Hikal, Meghmani Organics and Sabero Organics command multiples of just 5 – 6 times.

Risk Factors

There are several criminal and civil legal proceedings against the company, its directors and promoters. Any decision against them will impact the future of the business.

Astec operates in the agrochemical industry and is vulnerable to seasonal and weather fluctuations.

The company is subject to product liability claims in relation to the quality of and use of its products. This means that if someone is harmed by the use of its products, the company can be liable to pay claims. This exposes it to potential legal costs.

Conclusion

These were some key factors that you should keep in mind while thinking of investing in the Astec IPO. The grading, earning comparison, and industry that the company is in are all important factors to keep in mind while deciding whether you should invest in the company or not.

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