MCX IPO

MCX (commodity trading) IPO which has got the highest rating by CRISIL, is expected to launch by August, in the mid of the volatile market conditions. MCX, which received the SEBI approval for IPO on May 15, has to tap the market before August 15, after which the SEBI approval will expire.

Companies has to proceed with the Issue before 90 days of sebi's approval, or else they have to re-file the offer documents. MCX will become the first commodity exchange trading to list in India.

The grade indicates that the fundamentals of the issue are strong. It is neither a trading recommendation, nor a comment on the future market price or its suitability, it said.

Falling markets shrink super rich club

Since there is a decline in the stock prices for the past six months, the super-rich club is reducing in a fast pace. Sensex touched its all-time high during January 8th and the number of Indian billionaires started increasing but now Billionaires (net worth of Rs 100 crore and above) are becoming millionaires as a result of bear market. Some of the reluctant millionaires include Usha and Suresh Shah of Consolidated Constructions, Gaurang Gandhi of Pioneer Investcorp, Anuradha Shukla of Bag Films, the Kansagra family of SpiceJet and Siddharth Sriram of Mawana Sugars.

The market wealth or net worth has been calculated on the basis of the promoters' holding in their respective companies as on March 31, 2008, and the difference in the market price — as on January 8 and on July 4 this year. The calculations ignore cross-holdings. The issue price is considered a market price for companies listed after January 8.

Even Reliance ADAG Chairman Anil Ambani has been affected due to market condition. His wealth declined by Rs 1,37,690 crore since the January 8 peak of Rs 2,53,567 crore.

With the market turbulence, the number of billionaires-turned millionaires is only expected to grow, market analysts feel.

Inflation to cool off at 8.5%

Inflation has been rising steadily and has hit all time high of 13% during 2nd week of June. Moody's, Global credit rating agency, had commented that the inflation rate would come down to 8.5% by this year end by tightening the monetary policy and duty cuts.

Recently Reserve Bank of India has raised the interest rate of short term lending to the banks and the mandatory deposits which the lenders are required to maintain with the Central Bank by 0.5% each to face the inflation.

Moody's also said that the RBI would further tighten the monetary policy this year.

According to the Finance Minister's adviser Subhasis Gangopadhyay,

"Do not harp on double digit inflation because double digit inflation will stay for some time even if prices completely stabilise because of the way we calculate inflation on the basis of this week last year".

Edelweiss IPO

Many brokerage firms have started to come in IPO's. Recently after, Motilal Oswal Financial and Religare Enterpirises , one more firm namely Edelweiss capital is tapping the market from today. Both the IPO's which had come earlier had seen a good result. So, may be the case of this IPO.

Edelweiss Capital is a company which is involved in the business of providing investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients.

The ipo price range is Rs. 725-Rs. 825 per share. And minimum order quantity is 8. So one should apply in 8 lots. And the ipo is from Nov 15-Nov20.

CRISIL the rating agency has rated the ipo as 4/5 (above average). The IPO has been already subscribed 5.24 times on the first day.

The other brokerages already listed include Indiabulls Financial Services, Emkay Share and Stocks Brokers Ltd, Almondz Capital & Management Services Ltd, India Infoline, IL&FS Investmart and Geojit Financials.

IPO of Barak Valley Cements Limited

The Initial Public Offering (IPO) of Barak Valley Cements Limited is scheduled from 29-Oct-2007 to 01-Nov-2007. The issue price range is Rs. 37/- to Rs 42/-. The minimum order quantity is 150 shares and the market lot is 150 shares (i.e., you can order only in multiples of 150 shares.)

This company is located in the Barak Valley region of Assam. Because of its location in the north eastern part of our country, it enjoys various benefits offered by the government for that region. Some of the benefits are 100% central excise duty exemption, 100% central sales tax exemption and 100% income tax exemption. For more complete details of the benefits it enjoys, check here.

This company has been awarded Certificate of Excellence from Institute of Economic Studies (IES), Delhi. But, after reading this, I am not very much impressed with that award. Anyway, wait for the recommendations to decide about this IPO.

Stop-Loss Order

A stop-loss order, or stop order, is a type of advanced trade order that can be placed with most brokerage house. A stop loss order gives your broker a price trigger that protects you from a big drop in a stock. You enter a stop loss order at a point below the current market price. If the stock falls to this price point, the stop loss order becomes a market order and your broker sells the stock. If the stock stays level or rises, the stop loss order does nothing. This differs from a conventional market order, in which the investor simply specifies that he or she wishes to trade a given number of shares of a stock at the current market-clearing price. Thus, a stop-loss order is essentially an automatic trade order given by an investor to his or her brokerage. It will only become active and be executed once the price of the stock in question falls to the specified stop price stated in the investor's stop-loss order.To say in short, Stop loss orders are cheap insurance that protects you from a loss.For most stop-loss orders, the brokerage house normally looks at the prevailing market bid price (i.e. the highest price for which investors are willing to buy the stock at a given point in time), and if the bid price reaches the specified stop-loss price, the order is executed and the shares are sold. The bid price is used for stop-loss sell orders - instead of the ask price or the market-clearing price - because the bid price is the price a seller can receive presently in the market.

A stop-loss is designed to limit an investor's loss on a security position. Setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%.

Positives and Negatives

The advantage of a stop order is you don't have to monitor on a daily basis how a stock is performing.
The disadvantage is that the stop price could be activated by a short-term fluctuation in a stock's price. The key is picking a stop-loss percentage that allows a stock to fluctuate day to day while preventing as much downside risk as possible. Setting a 5% stop loss on a stock that has a history of fluctuating 10% or more in a week is not the best strategy: you'll most likely just lose money on the commissions generated from the execution of your stop-loss orders.

There are no hard and fast rules for the level at which stops should be placed. This totally depends on your individual investing style: an active trader might use 5% while a long-term investor might choose 15% or more.

Another thing to keep in mind is that once your stop price is reached, your stop order becomes a market order and the price at which you sell may be much different from the stop price. This is especially true in a fast-moving market where stock prices can change rapidly.

A last restriction with the stop-loss order is that many brokers do not allow you to place a stop order on certain securities like OTC Bulletin Board stocks or penny stocks.

Not Just for Preventing Losses

Stop-loss orders are traditionally thought of as a way to prevent losses thus it's namesake. Another use of this tool, though, is to lock in profits, in which case it is sometimes referred to as a "trailing stop". Here, the stop-loss order is set at a percentage level below not the price at which you bought it but the current market price. The price of the stop loss adjusts as the stock price fluctuates. Remember, if a stock goes up, what you have is an unrealized gain, which means you don't have the cash in hand until you sell. Using a trailing stop allows you to let profits run while at the same time guaranteeing at least some realized capital gain. A Stop Loss Order can be placed only with a limit price.

ICICI Bank's "BankAtHome"

ICICI Bank launches new services to all its savings and current account customers namely "BankAtHome" service. It is a facility where we can give orders to the bank either through internet or phone, and they will come to home to provide the service. ICICI's bank's head Mahinder Juneja(Retail Liability group) says

"Bank@Home is like a courier service wherein the banking facility is made available at the customer's doorstep."

The services being offered to the customer through BankAtHome includes cash pick-up and delivery, cheque pick-up, demand draft and pay order delivery. This service would be available to customers across 28 locations and 294 branches. Currently only few places this service is offered, and they are planning to extend the service to all branches in all destinations.