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How You Can Get Rich - The Only 3 Ways

2007-10-10T05:17:00.000+05:30

There are only 3 ways you can get rich. While actually getting rich is different for everyone, everything boils down to these three wealth producing principles. The 3 wealth builders ways all involve the 3 legs of your personal finance triangle. While it may not happen overnight, if you sufficiently strengthen any or all of those three legs, you'll eventually get rich. To get rich more quickly, you must rely on maximizing the effects of all three financial legs.

To maximize the three legs you can increase your income, spend less money, or make your existing money work harder. Spending less will allow you to use your existing income for investing, savings, and expenses you'd otherwise have to borrow for. There are many things you can do to spend less money, but in order to get started strengthening this leg, you need a baseline of how much you are spending now. Make a budget and include all your current monthly expenses. After you've done this, you'll be able to see where you can cut spending and where you can't.

To increase you income, you have a few options. You can earn more at your current job, change jobs to one with higher pay, or get an additional job to augment your existing income. Part time jobs are great for this. You can start your own part time business, or pick up one working for someone else. If you try to earn ore at your current job, you'll need to find out what comparable positions pay elsewhere, so you know where to start. If you're of a mind to change jobs, you can choose to switch to a different position within your field, or change careers entirely.

The third leg of the personal finance triangle involves making the money you already have work harder for you. You can do this by investing it if you don't really invest now, or by earning a greater return if you are an investor already. You can also take advantage of the principle of leverage to multiply your money's growth power. A great example of this is investing in real estate. Real estate, or any other leveraged investment, allows you to control, and profit from, a relatively large amount of capital with a comparatively small amount of money.

There are many ways to strengthen the three legs of the triangle. Between creative ways to save money, places to find employment, getting more money where you work now, and investing to earn greater returns, you'll be able to grow a nest egg that will really make you rich, just don't expect it to happen overnight.

Holiday Insurance: Protecting Your Holiday Home Against Damages And Claims

2007-10-10T05:15:00.000+05:30

Buying a holiday home is a big responsibility. You can't just buy a home and hope that things will turn out just the way you want them to be. To make sure that your investment in your holiday home is well protected, you should get a holiday home insurance upon purchase of the property. Always remember that when it comes to holiday insurance, timing is very important. Note that any incidents that happen prior to the issuance of the holiday insurance is no longer covered by the policy so it is very important that you get a holiday home insurance on your property immediately after buying it.

Things To Consider When Buying Holiday Home Insurance

Before you buy a holiday home insurance, you need to take an inventory of the things that you want to be covered by the policy. A comprehensive insurance policy should be able to protect your building and the contents of that building. Your building insurance should be enough to rebuild the vacation home in the event where if become totally damaged. On the other hand, the amount of the coverage for the contents of the vacation home should be enough to pay for everything you will want to take if you do decide to move house. Yes, insuring everything can cost you a lot of money but this is the only way to fully protect your interest on your property. Note that you will end up losing more money if you do not take a comprehensive insurance coverage on your property.

Aside from getting a comprehensive holiday home insurance coverage on your building and it contents, you should also get an insurance coverage against liabilities. Liability insurance is especially important if you plan to rent your vacation home during times when you do not need it. Note that under the law, the owner of the property can be held liable if a guest gets injured while staying at the property. Since claims for damages can be very expensive, it is very important indeed that property owners get liability insurance.

Checking The Fine Print

Reading the fine prints on an insurance contract is very important. When getting holiday insurance for your holiday home, never skip the fine prints before buying the policy. If there is something that you do not understand in the insurance contract, do not hesitate to ask the insurance underwriter for clarification. Always remember that the things that you do not know about can actually hurt you.

Buying pre foreclosure homes

2007-10-10T05:13:00.000+05:30

When a borrower fails to make his payments for several months in a row, the bank starts the foreclosure process. The phase of the foreclosure lasts for a few months and the borrower needs to come up with a way to pay off his debts and avoid foreclosure. Many investors would like to buy a foreclosure home because of the low price, but another option of making profit from foreclosures is to buy a pre foreclosure home. Instead of losing the house to the bank, the owner may decide to sell it. But in most cases, pre foreclosure homes are sold at a very low price and this is where investors appear. It might be hard for the owner to sell his house at a low price, but this option if often preferred instead of foreclosure.

There are many advantages for buying a pre foreclosure home. At this stage, the owner is about to lose the ownership of the house and the back will soon take possession of the property and sell it at a low price. The owner can repay his loan until the day when the house is being foreclosed and the bank tries to offer him many possibilities to avoid foreclosure. As a last resort, most people try to sell their home to any buyer just to avoid foreclosure. If you know where to look for a pre foreclosure home, the owner will surely pay attention to your offer, no matter how low it is. In some cases, the owner is willing to drop the normal price to 50%. The advantage of buying a pre foreclosure home over a foreclosure home is that you have no competition. When the bank sells a foreclosure home, many bitters will attend the public auction and the prices may rise. But if you are the soul buyer, you can deal straight with the owner and you can get a good price. If the owner fails to sell the house, he will lose everything, but if you buy it from him, he will still end up with something. Everybody wins from this situation and buyers shouldn't feel guilty for buying a pre foreclosure home - they are actually helping the owner. Further more, the owner is not obligated to accept your offer so you shouldn't have any moral constrains about how much you want to give him for the house.

If you want to buy a pre foreclosure home you need to check out one of the 3 sources: the newspaper, online lists or lenders. Each option has its advantages and you can find a great pre foreclosure home with any one of them. If you are looking for a new home you should start with pre foreclosure homes because they have the lowers prices, the highest quality and you have no competition. If you by foreclosure homes from a bank, they might be in a poor condition. After the initial owner loses his home, there is no one responsible with the maintenance so you might have to clean it up after you buy it. But if you buy a pre foreclosure house, you just have to move in. It can be your dream house or your next investment.

Pre foreclosures can be profitable. Anyone can start searching for this type of real estate and make a profit. The only difference between pre foreclosure houses and normal houses is the price and pre foreclosures are a huge investment opportunity for real estate business men.

Baby Boomers - The future of the stock market by Daniel Kertcher

2007-09-22T02:22:00.000+05:30

You have no doubt heard of the "Baby Boomers", those individuals born between 1943 and 1963. Following World War II, Australia's population grew at record levels. Australia was not alone in this phenomenon. The United States, New Zealand and Canada all experienced Baby Booms at a similar time.
The Baby Boomers are an important phenomenon to understand. They have had dramatic effects on society and will substantially impact the way the stock market performs over the next 20 years. For this reason, it is important to understand some of the background on this interesting group of people. As mentioned, the Baby Boom was experienced in various countries around the world. Part of the reason for the "Boom" was that these countries were immigrant receivers and immigrants tend to be in their 20's, the prime childbearing years. At its peak in 1957, the US boom hit 3.7 children per family. Canada hit its peak in 1959 with Canadian women averaging 4 offspring each; that was over 479,000 new births that year alone! Australia's boom was not quite as big as the Canadian or US booms; however, we still have a disproportionate number of people who are today in their 40's and 50's. Following the Baby Boom, we had a Baby Bust. Far fewer children were born during the late sixties, leaving Australia with an asymmetrical population graph.

The Baby Bust group, born between 1964 and 1976 are a much smaller group than their predecessors and are commonly referred to as Generation X.

Baby Boomers are a very significant and important group. It is not that, individually, they are any different than any other group who preceded them, it's just that there are so many of them. Due to their large numbers, Baby Boomers have had a significant impact on our society, making substantial changes as they grew. They have changed the economy, driven housing and other markets and transformed social attitudes and lifestyles.

In Australia and North America today, the fastest growing industries, apart from technology, are financial management, leisure activities and health care. It is very easy to see why. Boomers have been working all their adult lives, usually for someone else. They have raised their children and are now focusing on their retirement. They have had a magnificent time. They have not endured wars, or a depression like their parents and grandparents. They have enjoyed fantastic luxuries such as cars, world holidays and computers. They have been at the forefront of the age of discovery.

Unfortunately, the majority have not prepared themselves financially for their retirements, believing instead that like their parents, they would enjoy a comfortable pension from their employers and/or government. The stark realities are now coming to light. Everybody, especially the Boomers, must take responsibility for their financial futures. Our government will simply not be in a position to provide adequate pension incomes for a growing number of retirees. Today, for every person who is retired, there are four people working, providing income to the government. By 2025, there will be only 2 people working for every retiree. What's more, the Boomers, as they start to retire, will live longer than any group before them, well into their 70's and 80's on average. As a result, it is up to each of us as individuals to take responsibility of our own personal financial planning.

The Australian government has made substantial improvements and preparations for the growing populations. They have introduced a compulsory superannuation scheme which all employers and employees must participate in and which is gradually rising in required contributions, but it will be too little, too late. The key to investment growth is time, a luxury many Boomers no longer possess.

Consider this fact, that at a return of 8% per annum, net of tax, an investment of $30,000 would require over 15 years to triple in value, not even considering the effects of inflation. Most investment strategies commonly promoted to the public boast returns of 4% to 10% per annum. We often see managed funds, superannuation schemes, bank term deposits and property investments offering such results. Many people consider these returns appropriate and even good! Unfortunately, many members of the public require a much greater return on their investments to adequately improve their financial positions before they retire (if they can ever afford to!).

In future issues we will explore ways of generating high returns and how to self manage your own super.

http://www.danielkertcher.com
http://www.platinumpursuits.com

About the Author

Daniel Kertcher is a licensed stock market educator. Daniel has trained many people from North America, Australia and Europe in various trading systems. Join his trading mail list http://www.platinumpursuits.com and read more about him at his personal website http://www.danielkertcher.com

Controlling The Speed Of Money by Kalinda Rose Stevenson, PhD

2007-09-22T02:18:00.000+05:30

Of all the ways the Federal Reserve controls the money supply, the one that gets the most publicity concerns interest rate changes.

Before scheduled Federal Reserve meetings, you'll hear a lot of speculation about what the Fed will do. These speculations affect the stock market. Media reports also speculate about the effect of possible interest rate changes on consumer credit cards, mortgages, and auto loans.

This media attention obscures an important fact. The interest rate, which is also called the discount rate, concerns the rate commercial banks must pay when they borrow money from Federal banks. The interest rate changes do not directly affect your credit card interest rate.

Whenever the Fed changes the discount rate, it does so to either make it more or less profitable for the commercial banks to borrow money from the Fed to make loans.

These are the essential points to keep in mind: 1. The purpose of the Federal Reserve system is to control the amount of money in the system. 2. The purpose of commercial banks is to make money. They make money by loaning money to borrowers.

It is a matter of profit. If the banks must pay more to borrow money whenever the Fed raises the interest rate, the banks make less profit from their loans to customers. If the banks can pay less to borrow money whenever the Fed decreases the interest rate, the banks increase their profit from loans to customers.

When the Fed changes the interest rate it charges banks, this affects the speed of money in the economic system. The lower the interest rate, the faster banks can loan out money and increase the amount of money in the system. The higher the interest rate, the slower banks can loan out money. So, even though the interest rate directly affects banks, these rate changes matter to all of us.

The bottom line fact is that the Fed does not change consumer interest rates. The banks might decide to change interest rates on credit cards and adjustable rate mortgages, but these changes are not directly tied to any changes the Fed makes in the rate it charges banks to borrow money.

About the Author

Are you earning money or making money? Check out real estate investing book book, "No Money Limits," to find out how banks make money. Use owner financing to increase your profit.

10 Potential Negatives, Often Overlooked, to Consider When Selecting a Residential Development Site

2007-08-28T07:14:00.000+05:30

Finding property to develop can be difficult. To complicate this even further, it's even more difficult to find a piece of property large enough to develop into an entire residential community. It's easy to want to jump and purchase the property immediately when you finally find it, but there are some negatives that you need to be aware of. These ten negatives can impact and impede and even destroy the development and eventual sale of your property.

#1) It's extremely important that you have the soil tested when you are considering the property. There are all kinds of things that have one way or another made their way into the soil that would kill your deal before you'd ever made it. Land that has previously been used by industry could be land that has waste in it like oil, lead, or toxic waste. These kinds of things make the land not able to be developed. If you purchase land that ends up not able to be developed you will be stuck with the property. That means that you'll be paying taxes on said property and not be able to do anything with it.

You may be able to clean up the land, but that will take additional investment and you additional time before the land will be able to be developed. If you already own the property and find that it does have these problems you may be able to hire someone to clean up the land by bringing in fresh dirt after turning over the polluted earth and taking it away. Again, this will probably be a long, arduous process which means that the land will not be able to begin the long development process before it is entirely cleaned up and completely free of all problems.

#2) If you are close to an area that has bad smells in the surrounding air you may have a problem selling your lots once the land has been developed. For example, a community was developed just outside of a landfill and that community took quite a long time to come up. Not many want to live in an area that will smell bad with each warm day when they go outside. This will make the land harder to sell and develop which may end up in the developer losing money in the long run.

#3) Another area that you would want to stay away from as a developer would be one that is near a loud location. An airport would be a good example. When planes come and go they are quite loud. If a residential neighborhood is developed too close to this, it will be hard to sell the lots and get people to live so close to such noise.

#4) Sites that have health hazards too close to them can be hard to determine but they can also be sites that will lose money for the developer as people will be concerned living so close to these hazardous things. Some examples are areas that are close to high power lines, a car manufacturing plant, or other plants that will emit toxic wastes. Not many would want their children exposed to such dangers and therefore would not want to purchase a lot in this area.

#5) If the land that you're considering investing in is near or would provide a view of something sinister like a cemetery or something unpleasant and loud such as a string of bars, casinos, or a prison, use this reason to decide against the investment. Not many would want to look out onto a cemetery from their kitchen window. Those raising families traditionally would not like the noise and danger from things like bars, casinos, or a nearby prison.

#6) Land that may be considered unincorporated may be difficult to sell to consumers. This means that the properties will have well water instead of city water. Some will be willing to buy bottled water and still live in this area, but many will not. Another negative about this type of area is the fact that the people that purchase the lots will have to use septic tanks rather than city utilities. Again, many people will not want the extra hassle of dealing with septic tanks that have to be maintained and often clog.

#7) When you take a look at the land you're considering for development be sure to see if it there are any wetlands within your acreage. Wetlands are extremely difficult to build on, if they can be built on at all. With wetlands your only hope for development would be to fill those lands in with earth that can absorb the water. In many cases these wetlands are protected by the government and will not be build able anyway.

#8) Certain soils are also hard to develop on as well. Rocky soils and soils that are not compatible with septic systems will not be able to be developed. This will again result in either additional money having to be spent to make the land able to be developed or additional taxes.

#9) Be sure to pay attention to local politics. If there are any political people that are not for development they could make your project difficult to do. If you have those kinds of problems you may never be able to develop the land.

#10) Be aware of any other local development. Other local development may make your development more difficult to sell. People that are looking to purchase property to build a home may not like other development that is coming up and this will make your properties harder to sell. Be sure you know all other nearby developments and how the community feels about them.

Developing land into a residential community can be a very profitable venture, but you have to be careful with your investment. As long as you are aware of the ten above negatives and are careful to avoid them, you are on your way to selecting a great development site.

About the Author

Tony Seruga, Yolanda Seruga and Yolanda Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.

Real Estate Investment Companies

2007-07-30T08:43:00.000+05:30

Real estate investment companies acts as brokers and represents both buyers and sellers and create ideal opportunities for real estate investors. They represent clients in the sale, purchase, exchange and the finance of the real estate investment. Real estate investment companies are ideal for individual investors who want to take advantage of the real estate market but are unable to spend time on it. Most companies give personal attention and due importance to individual investors as they are their primary and most crucial segment of business.

The real estate investment companies deal with active brokers, a wide variety of investors, vendors, consultants and governmental agencies. Individuals can avoid many dangers associated with real estate investment by investing through companies as most companies employ personals that are trained to handle the pressure situations that often crop up in real estate investment. The investors who see the market clearly and make decisions based on the best evidence would get much profit from the real estate investment company. The investors can achieve the financial security and freedom which enables them to pursue other involvements.

Acquisitions, property management, due diligence, redevelopment, leasing, debt analysis and procurement, tax documentation, disposition analysis and detailed monthly reporting are some of the important services provided by real estate investment companies. Real estate investment companies are also referred as Real estate investment trust (REIT). Real estate investment companies have special federal tax treatment and must comply with certain tax requirements. There is a slight difference between Real estate investment companies and real estate investment trusts. For a company to become a real estate investment trust, it should share out 90 percent or more of its taxable income to its shareholders once in a year.

Before selecting a particular company, look whether they are registered under proper acts. Get as much information on a company from as many sources you can. [http://www.e-RealEstateInvestments.com]Real Estate Investments provides detailed information on Real Estate Investments, Real Estate Investment Trusts, Real Estate Investment Loans, Real Estate Investment Financing and more. Real Estate Investments is affiliated with [http://www.e-investmentproperties.com]Buying Investment Properties.

Real Estate Investment Trusts - Their Seven-Year Run on the Decline

2007-07-30T08:42:00.000+05:30

Many books and articles have recommended new investors put their money into real estate. For investors just starting out, they probably do not have the backing or cash in the bank to purchase real estate on their own. The Real Estate Investment Trust (REIT) is a good way to invest in real estate with minimal funds.

REITs are mutual funds that own real property assets or mortgages, called debt-based securities. They allow even the smallest investor the opportunity to own a piece a real estate investment without going it alone.

Real Estate Investment Trusts came into their own during the housing bubble with attractive dividends, some of which paid 300 percent since the end of 1999. With the current real estate market, however, REITs are losing favor amongst investors.

According to a January 29th article in BusinessWeek, many Real Estate Investment Trusts are currently overpriced with dividend yields that are less than Treasury bills. In January, REITs were yielding only 3.6 percent. That is 1.3 percentage points lower than Treasury bills.

Current REIT investors can only hope that payouts will increase or the underlying property values rise. Real Estate Investment Trusts legally must pay out 90 percent of their taxable income in dividends; so, an increase in payouts is doubtful — cash flow does not grow fast enough to offer substantial increases within a short timeframe. Of course, the current real estate market means that property values are not steady. Where real estate values used to steadily rise year-after-year, positive value changes are no longer reliable. Many are still falling, especially in the office and apartment REIT investment arenas.

In 1997, Real Estate Investment Trusts were trading at 33 percent premium to their underlying property values, called the net asset values (NAVs). After the market bottomed in late 1999, they were discounted by 20 percent. In January, they were traded at a seven percent premium to NAV.

While market optimists believe REITs still have some running room, many investors believe the NAVs are now inflated. That means the REITs were taken out at a price significantly higher than their NAV estimates, inflating the property valuations. Some industry analysts justify the inflation, since REITs are in an asset class separate from bonds or stocks. They are considered to have matured as an asset class, making them an increasingly important part of many investment portfolios.

Though many investors and money managers are exiting out of Real Estate Investment Trusts, no one is recommending investors rid their portfolios entirely of REITs. Analysts only suggest you reconsider investing in new REITs and trim your current holdings.

Investing in Real Estate Securities for High Yield

2007-07-30T08:40:00.000+05:30

If you do not want to deal with the management hassles, and do not have the time to spend for carious requirements of direct property ownership, investing in real estate securities can make an ideal choice for you. It is a kind of indirect real estate investment, but it has tremendous ability to produce high yields and potential capital appreciation for you. However, in order to get success in this indirect investment, you must have the proper knowledge regarding different types of securities. Only then can you decide how to make huge wealth by investing in which type of securities. Let me explore a few of the tremendous possibilities.

Real Estate Investment Trust (REIT):

Real estate investment trusts offer an excellent way to capture high yields and huge capital appreciations. Let me explain how it works. These companies are very organized and are regulated by law. That is the reason why they pay more than ninety percent of their total income as dividends to their shareholders. Thus, being a shareholder, you can also make hay while the sun shines. Moreover, you income is taxed only once. Professional management, high yields, long term capital appreciations, tax benefits and so on – what else do you need?

Mutual Funds:

Likewise, real estate mutual funds are also an equally effective way to capture high yields. These investment securities also offer almost al the features of real estate investment trusts, such as high yield, long-term capital appreciation, professional management and diversification etc. However, the only negative part is that since they are associated with real estate investment trusts, you need to pay double management fee and other expenses – first, to the trust management and second, to the mutual fund manager. However, keeping in view the high yield and other advantages it offers, this expense seems negligible.

Private Mortgage Notes:

Private mortgage note is also one of those investment securities that can provide high return to you. These securities are fully associated with income producing real estate, and you can use them for the acquisition, rehabilitation or equity cash out of residential and commercial properties. This way, in the first trust deed positions, you can obtain return, as much as 12% to 14%, and in second trust deed positions, the return can be even fifteen to eighteen percent. Moreover, you can enjoy various other advantages. For example, most loans can easily be closed in three weeks or less, which generally require ten weeks or more. Again, it is highly secure investment with no risk at all. Let me explain how. Since the lending judgment is always based on real property itself, you, as a private mortgage note holder can concentrate your due diligence efforts on the real estate securing the loan without worrying about the borrower’s credit issue.

Hence, here we see how investing in various real estate securities can help you capture high yields and long-term capital appreciation without dealing with any management hassle and with little or no risk at all.

Real Estate REIT - Investing In Commercial Real Estate Is Easy With A Real Estate Investment Trust

2007-07-30T08:39:00.001+05:30

REIT's are an easy way to invest in commercial real estate. But is easy a criteria that you should use when evaluating investments? Does ease of investing have any influence on how high your return will be in a real estate investment trust?

Ease of use has an impact on certain things. Software, for example, is measured on how easy it is to use. Ease of use has an impact on how many people will be successful in utilizing the purpose of the software. "Out of the box experience" is an ease of use event that people judge software and other items.

Ease of use does not have the same impact on real estate investments. However, ease of buying and selling do contribute to your investment liquidity. A publicly traded REIT will give you the ability to invest in commercial real estate without the illiquidity that traditionally has accompanied real estate investing.

Liquidity is a benefit when evaluating investments. You want to be able to get in and get out when you feel the need for either event. That is understandable. But liquidity does not necessarily have a positive impact on returns.

Just because you can get in and out of an investment easily does not guarantee that you will lock in a profit from that investment. So ease of use does not impact investment returns like it does software purchases.

Many people mix different criteria for evaluating things in their lives. They buy a minivan with two sliding doors that have remote controls because the vehicle is easy to use. They buy a computer because it is easy to set up and use immediately when they take it out of the box. People buy information like books and music on the internet because it is easy to purchase and they can use it immediately.

So ease of use improves people's lives in many ways. However, having an easy way to invest in commercial real estate should not be a criteria for judging the rate of return that you are likely to receive from an investment in a REIT.

Understanding Real Estate Investment Trusts

2007-07-30T08:38:00.000+05:30

So you want to be a landlord without having the problem of repairing faulty roofs and lights? Maybe real estate investment trusts are for you. These structures are basically legal structures to allow investors to get access to the rental proceeds via dividends. These rental proceeds are net of property management fees and other legal fees pursuant to the transaction.

Developers use this instrument to offload properties in their stable into the real estate investment trusts so as to generate cash to purchase other commercial buildings while retaining a sizeable stake in the REIT. Each year or half yearly depending on the REIT, they distribute rental income in the form of dividends to investors. Things to take note off include what the properties in the REIT are. Sometimes developers try to move their non-performing assets into the REIT so that their listed companies can report better illusory earnings and you should take note of this.

Now that we have explained what a REIT is, the rest of the article will highlight three reasons why you might want to invest in a REIT.

Firstly, owning units in a REIT allows us to gain rental exposure to large commercial buildings. Let’s face it most of us real estate investors do no have the financial ability to own large commercial buildings so sometimes it will be good to purchase units of a real estate investment trust so that we can participate in the upswing in office rental of a commercial building.

Secondly, owning units in a REIT because of its trust like structure allows for a tax flow through of the profits (this means no tax on profits from the REIT). If in doubt, spend some time consulting your tax attorney for advice on this. Another way to get some tax knowledge is to ask for a copy of the prospectus of the REIT and read the section on tax advice.

Thirdly, listed REITs are tradable like shares so you can do the normal things that you would do with shares. The advantage of this is that you can examine the usual commercial rental data to determine whether rentals are going up or not and when you should purchase the units in the REIT. Always remember the importance of value investing especially so in an investment involving real estate. Spend time researching on the REIT that you are interested and figure out the value that you think it is worth and wait for the unit price to drop and swop in to make your purchase.

In conclusion, we have gone through the basic concepts of how real estate investment trusts work and highlighted three reasons why you might want to invest in a real estate investment trust (REIT). Remember that like with all investments, do your due diligence, time your entry and exit properly and you can make money both from the equity value and the rental yield of the underlying properties.

What is a Real Estate Investment Trust

2007-07-30T08:37:00.000+05:30

“Well, real estate is always good, as far as I'm concerned.” -Donald Trump

A real estate investment trust, or REIT, is a company that sells real estate but allows the public and individual investors to buy shares. REITs are just like any other stock option which represents a company. However, there are two defining features of real estate investment trusts which make it a great investment opportunity. The first feature is that it's only business is coordinating and monitoring property investments. The second feature is that it has to hand out its profits in the form of dividends.

The reason why real estate investment trusts are so popular is that having the REIT status means that corporate tax is not applied to the business. When non REIT companies make a profit they must pay taxes first and then disturb what is left. However, real estate investment trusts do not get taxed and therefore can distribute all the profits made in the form of dividends to their investors. If you have a large principle which you can invest, real estate investment trusts may be a great option for you. If you are interested in REITs contact a financial advisor who can point you in the right direction and offer advice on how to pick the perfect REIT for you.

REITs are great if you are interested in making an income and living off your investments. REITs have a similar status of high yield bonds in profit producing power and rate of return. Remember, both REITs and high yield investments are high risk which is why they can be, if all goes well, extremely profitable. Real estate investment trusts can be affects by th same factors which influence the stock market and the economy. These may include supply and demand, interest rates, inflation, and deflation. A rise in interest rates is a good indicator of a slowly growing economy. This is great for people invested in REITs because it means that businesses are growing and looking to rent or buy more space. The same is true with residential housing. When the economy is doing well people want to buy homes, apartments, and condos.

REITs are companies that reap the benefits of no corporate tax by managing real estate properties and paying out the majority of their profits in dividends. Dividends can offer an extremely large and stable income which can be much more then the returns from Treasury options or even small cap stocks.

Oil Stocks As A Long Term Investment

2007-07-26T08:30:00.002+05:30

The demand for world oil is increasing while world reserves are decreasing. This is a known fact. The current price of oil can certainly confirm this statement. Consensus also agrees that we will never see $25.00 oil again. The logical conclusion to our above statement is oil stocks should be a good long term investment. However, the location of the oil companies’ reserves can affect their bottom line and valuation.

Some of the largest reserves in the world are found in Venezuela, Saudi Arabia, Russia and Canada. Political unrest in Venezuela, unstable and unpredictable government in Russia and Osama Bin Laden targeting Saudi Arabia leave Canada, namely the Alberta Oil Sands, as the largest, most reliable oil reserves in the world.

Companies like Exxon Mobil Corp., Royal Dutch/Shell Group and Canadian Natural Resources Ltd. are planning to spend billions during the next 10 years to develop Alberta's unusual oil deposits as demand for crude rises and output from existing reserves decline. Oil sands output in Alberta may double to 2 million barrels a day by 2013, according to a presentation by Enbridge Inc. earlier this month. Oil sands are deposits of bitumen - heavy oil that must be treated to convert it into crude oil for use in refineries to produce gasoline and diesel fuels. The U.S. Energy Department revised its global oil resource estimates to include the oil sands 174 billion barrels of proven reserves that can be recovered using current technology.

With demand for oil and other commodities from China and India increasing due to their growing economies, strong trading relationships are procuring with Canada - a country with numerous resources, political stability and neutral military views.

Companies with reserves in the Alberta oil sands look like a great investment for the next decade

There are many companies with reserves in the Oil Sands here are some with strong exposure.

Stock Chart Reading

2007-07-26T08:30:00.001+05:30

As an investor you will want to check

out any equity before you buy it. Many investors

go to Morningstar which is one of the largest

providers of mutual fund information in the world.

It is assumed that their information is correct.

After all that is what you are paying for.

Recently the SEC (Securities and

Exchange Commission) called them on the carpet for

not correcting an error within a reasonable time

(whatever that is according to the SEC). Everyone

makes errors and this was no big deal.

It seems that when you went to their

site and drew up a chart or asked for statistics

on Rock Canyon Top Flight mutual fund it failed to

notify the potential buyer that the fund had

issued a very large dividend of approximately 25%

and the NAV (Net Asset Value) dropped from $15 to

$11 to reflect the $4.00 dividend.

When you ask for a chart of this fund

on MarketWatch, Yahoo, TheStreet or Bloomberg they

only post the NAV and do not make any adjustment

for the dividend or capital gains distributions.

Looking at the chart it appears the fund fell out

of bed. Because I look at so many charts I knew

immediately that this was a distribution and not

some calamity. It is best to call the fund to

verify this.

Most funds that make dividend and capital gains

distributions usually do so in December, some in

November and very few at other times during the

year.

Some nitpicker called the SEC and made

a complaint about Morningstar. Not that I am a big

fan of them (in fact I think their reports are

worthless) they get their price information from

other sources such as the above. If you are not

familiar with the requirement of mutual funds to

disburse their profit before year end you might be

fooled when you see the price suddenly drop.

This is important for potential

investors. I caution everyone to get a chart on

the Internet of at least a one year performance of

any mutual fund before buying. It is better to go

back to year 2000 to see if the fund manager was

able to keep from losing money during the last 4

years. Almost none of them could so they bamboozle

about how they did better than the S&P500 Index

which had a huge loss of 50% and remains down 25%

from those highs at this time. Don’t fall for that

one.

Once again I caution that any purchase

should have an exit plan. One of the basic rules

of investing is never to lose a lot if you are

wrong. Small losses will not ruin your portfolio,

but big losses can ruin your retirement. Set your

loss limit (5%, 10% or ?) and stick with it.

Charts can help you with

buying/selling decisions, but check out their

accuracy as charting is not an exact science.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!"

has helped thousands of people make money

and keep their profits with his simple 2-step method.

Read the first chapter at http://www.mutualfundmagic.com

and discover why he's the man that Wall Street does

not want you to know.

Understanding a Stock's PEG Ratio

2007-07-26T08:28:00.000+05:30

A PEG ratio cannot be used alone but is a very powerful tool when integrated with the basics (price, volume and chart reading). You must enjoy crunching numbers and have a calculator handy to estimate your own PEG ratio. Access to quality statistical information from the web such as past earnings and future earning estimates is essential to calculate this fundamental indicator. A variety of websites produce a PEG ratio but I have not found one site that has a reliable PEG ratio that I can use for my own research, so I calculate it myself, ensuring accuracy with the final number.

I am going to use the definition from investopedia.com as it makes complete sense and doesn’t get too confusing (below the definition is further explanation and a current real time example, using Apple Computer).:

The PEG Ratio:

“The PEG ratio compares a stock's price/earnings ("P/E") ratio to its expected EPS growth rate. If the PEG ratio is equal to one, it means that the market is pricing the stock to fully reflect the stock's EPS growth. This is "normal" in theory because, in a rational and efficient market, the P/E is supposed to reflect a stock's future earnings growth.

If the PEG ratio is greater than one, it indicates that the stock is possibly overvalued or that the market expects future EPS growth to be greater than what is currently in the Street consensus number. Growth stocks typically have a PEG ratio greater than one because investors are willing to pay more for a stock that is expected to grow rapidly (otherwise known as "growth at any price"). It could also be that the earnings forecasts have been lowered while the stock price remains relatively stable for other reasons.

If the PEG ratio is less than one, it is a sign of a possibly undervalued stock or that the market does not expect the company to achieve the earnings growth that is reflected in the Street estimates. Value stocks usually have a PEG ratio less than one because the stock's earnings expectations have risen and the market has not yet recognized the growth potential. On the other hand, it could also indicate that earnings expectations have fallen faster than the Street could issue new forecasts.”

- provided by www.Investopedia.com

PEG Ratio Example:

Using Apple Computer Inc., I will demonstrate how to calculate the PEG ratio without relying on other websites.

First, you will need to gather the past earnings numbers; going back at least 2 years and going forward two years. (All data is from Thursday, June 23, 2005)

AAPL:

2003: 0.09

2004: 0.36

2005: 1.31 (E)

2006: 1.52 (E)

Now we need to calculate the growth from year to year.

Subtract the earnings of 2004 by 2003 and then divide by 2003.

Repeat the process to determine the growth rate for the following years:

2004: (0.36-0.09)/0.09 x 100 = 300% growth rate

2005: (1.31-0.36)/0.36 x 100 = 264% growth rate

2006: (1.52-1.31)/1.31 x 100 = 16% growth rate

Now, take the current price (we will use the close from Thursday, June 23, 2005: $38.89) and divide it by 2004 earnings and then by the 2004 growth rate:

2004: 38.89/ 0.36 / 300 = .36 PEG Ratio

2005: 38.89/ 1.31 / 264 = .11 PEG Ratio

2006: 38.89/ 1.52 / 16 = 1.59 PEG Ratio

Using the definition from above, Investopedia states that a stock is evenly valued at a PEG ratio of 1 in a rational and efficient market. Please note that the stock market is not very rational or efficient so we only use this number as a secondary indicator and tool, after our fundamental and technical analysis is complete. Apple’s PEG Ratio of 0.11 for 2005 was discounted into the price when these estimates first hit the street, giving us the big run-up late last year. Going forward, the stock’s earning potential looks to slow considerably and the PEG ratio clearly shows us the tremendous jump in numbers from 2005 to 2006. A PEG ratio of 1.59 for 2006 is not the best rating going forward but still under the red flag ratio of 2.00.

Learn to Calculate a Stock's Pivot Point

2007-07-24T09:55:00.000+05:30

Stocks breakout from properly formed bases everyday but many investors don’t understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. William O’Neil, the founder of Investor’s Business Daily is considered the pioneer of the pivot point in modern times. As Jesse Livermore explains in his book (1941), the pivot point can also be described as the point of least resistance. When a stock breaks the point of least resistance, we are presented with an opportunity where a stock has the greatest chance of moving higher in a short period of time, especially when volume accompanies the breakout.

The pivot point can be calculated as the stock is forming the handle on a cup-with-handle base. The ideal buy price would be $0.10 higher than the highest spot during the handle, also know as the top of the right side of the base. The intraday high can qualify at the highest point and does not have to be the closing price of the stock. If the stock closes at the high for the day, then we will use this number as the high point.

The exact methods used for finding pivot points vary depending on the base pattern that is forming on a daily and/or weekly chart.

When a flat base occurs, an investor should look for a move $0.10 higher than the top point on the left side of the base or the start of the formation.

A saucer-with-handle follows the same rules as the cup-with-handle and is described in detail above.

A double-bottom formation triggers a pivot point that will be $0.10 higher than the middle peak in the “W” shaped pattern.

Many investors will try to cheat the rules and place a position prematurely before the stock breaks out and passes the pivot point. I do not suggest buying until the stock triggers the pivot point on above average volume also known as qualifying volume. The area considered as the least amount of resistance is weighed so heavily because all overhead sellers are gone as we break into new high territory. The pivot point usually comes within 5% to 15% of the stock’s old high 52-week high.

Don’t chase a stock that is 5% or more above the proper pivot point. This does not mean that you can’t buy on normal corrections and pullbacks to support or moving averages, especially if the stock remains in an uptrend. This rule only applies to the pivot point area as the stock becomes extended. If you buy with the pivot point and sell when a stock falls 7-10% from the pivot point, I guarantee that your yearly performance will increase dramatically.

In The Stock Market Greater Risk Could Mean Greater Profit

2007-07-24T09:54:00.000+05:30

One of the many ways to make a larger profit on the stock market is to take grater risks. There are several advanced strategies and techniques and - or strategies that you can use. Each has its own level of risk and as we say, "In the stock market, greater risk could mean greater profit".

Before we get into the different techniques, it needs to be clear that when using any trading strategy or technique, you should play with money that is liquid. In other words, money you can live without, should things go badly. Never play the market with money you need to survive. Trade responsibly and knowledgeably.

One strategy is investing in an IPO (Initial Public Offer). An IPO is way that a company is moved from being privately owned to being publicly held, or stockholder owned. Simply put, they offer common stock to a few hand picked investors. If the need for capital is greater, then they might offer stock on the open market.

One way to use IPOs is to jump in right at the beginning, buy stock at the initial IPO price and hope for a big price jump initially. Then you would sell those shares on the stock floor and pocket the profits. The risk here is that the company may not be accepted well by investors at first. If that happens, the stock price will fall and you will lose money.

Another IPO technique is to simply sit back and watch the IPO stock after it has opened. If the stock is fairly priced, and goes up in value you can buy and make a profit but not as much as the trader who jumps in as soon as the stock is issued. The basic rule is "buy low, sell high and get out". This method carries the same risk but in the stock market, greater profit means greater risk.

Short selling is an advanced technique that is not used to its full potential. This is due to the high-risk level involved. Short selling is a serious speculation technique and carries maximum risk. A trader will sell stocks he doesn't actually have at a higher price in the hope of a downturn. If the stock goes down, he buys at the lower price, pockets the profit and returns the shares to the owners. The risk here is very high for obvious reasons. If the shares price increases rather than decreases, the trader loses money. Plus there is still the matter of the broker's commission, which is still owed regardless.

Then there is margin trading where a trader borrows money to buy a stock. The money can be borrowed from a broker, normally up to 50% of the investment. Obviously, if the stock goes up, you make the profit on your 50% of the purchase price and pay the broker back. Without the benefit of margin trading, the trader shoulders the responsibility of the entire purchase plus the broker's commissions.

Of course, if the stock goes down, you have lost part of your original cash investment and you still need to pay the broker for the loan and his commissions. This is another technique that is heavily laden with speculation and carries maximum risk.

Online Stock Market Trading

2007-07-23T10:08:00.001+05:30

Most of us have seen slices of future in flashes, largely feared or frowned upon. But there’s much to this occurrence. Internet has a paramagnetic attraction attracting all kinds of businesses to flourish upon. Internet is indeed a great window into the stocks world today and it is through this prism that rest of the people looks at stock market. What is about online stock market trading that attracts a multitude of people to invest? Indeed, it is a surprise to see the stocks software bags with “direct trading” feature selling in the market area of cyber space.

In more recent times, middle class gentry have become a major part of the stock’s world. The notion of the bureaucrats, ultra-riches and creams of society, occupying the market, no more exists. Stock market investing, day trading no more involves traveling long distances to the stock market, flooded with people moving here and there, noting down the prices, yelling on phones and so. It just involves your access to cyber space and magic software’s providing you the rates of stocks. Sitting in an air-conditioned room, playing with stocks, handling your business along with trading seems to be a game for future that has turned into reality.

Internet access helps you to be self-sufficient. Online stock trading is so widespread that one need not to hunt for virtual brokers. Online brokers are available to assist you to make more money out of the hard earned invested. Well, behind every success there are several reasons. When evaluating the success reasons of online stock market trading, it revealed the popularizing aspects.

Easy way: Today nearly, 15% of stock trading is done through Internet. It is expected to rise to 30 to 40 % within a span of 2-3 years. Online trading seems to be a better way to trade because people don’t need too much paper work. Even banks are also providing the facility of 3-in-1 accounts including Savings account, Checking account and online trading account, needed to trade in stocks. However, it becomes the easiest and simplest way to trade without much of the paperwork involvement.

Self-trading: Traditionally, trading in stocks meant going to stock market with a broker and it was the broker who actually traded on behalf of you. The feature of self-trading added to the popularity of online trading. Now, it is the actual trader who is involved in day trading of stocks.

User-friendly: Online trading is quiet a simple way to trade in stocks. It just needs uploaded stock software on your PC and then you can be a part of stock market. It is quiet easy and user-friendly software to lean upon.

Cost: The cost of opening an account is an important factor for any investor. This cost is known as brokerage charge for opening and maintaining the account under a firm. In return, of this brokerage, the firm allows you to invest in stocks along with the tips regarding the future prospect of bulls and bears of the stock market. However, the cost diminishes with the increasing and frequent trading of the investor.

Security: This is another factor that attracts trader to trade online. Some investors do not believe in its security but with the passage of time, it is accepted that online investment is safe and secured. The companies providing the facility of online trading makes sure to provide secured trading. Passwords and locks are strict measures that are kept in mind.

“Every coin has two sides”-this is a saying that goes with online stock market trading. Despite of the fact that it has become a paramagnetic attraction, its darker aspects cannot be ignored. Being a technology, it misses that pinch of personal touch. The expert’s advice play important role while waving with bulls and bears, which is not available on the same scale as the traditional method. The slow connectivity and other technical faults may turn out be disastrous.

What Is A Bull Stock Market And Bear Stock Market

2007-07-23T10:06:00.000+05:30

Unless you are involved in the stock market, or understand the jargon you may not understand what the term bull market or a bear market means. Stock prices are reflected in what is known as the financial market trends. These trends can best be demonstrated in a price chart and the purpose is to pick the best investment and trading opportunities. You may ask what drives these trends. Buyers and sellers are the driving factor, they are also known as the bulls and the bears.

When we say that it is a bull or bear stock market we are talking about the driving force behind the market. The bulls are the buyers so that would make the sellers the bears. Incidentally when we use the term bull or bear we could also be talking about specific securities and sectors.

A bull market is a market that is associated with investor confidence. As a result of this increase in confidence investors are more likely buy in anticipation of making a capital gain. The most memorable and longest running bull market was seen in the 1990s. This was the time when the U.S. and other global markets saw their fastest growth spurt ever.

Just to recap, in a bull stock market the investors are buying. They are looking for more ways to increase their capital gains. So then if it is a bear market, the opposite would be true. Investors will be more pessimistic about buying and are more inclined to sell their stocks to cut their losses. A bear stock market does not come about from a small decline, but a considerable drop in prices over a prolonged period of time. From 1930 to 1932 was probably the most infamous bear market in history. This bear market was the beginning of the Great Depression. There was a much less severe bear market from 1967 - 1983, which included the energy crises of the 1970s and the unemployment surge in the 1980s.

As we already stated a bear stock market does not come about as a result of a small dip in stock prices, it indicates sizable fall in prices over a prolonged period of time. It is most commonly accepted that in order for the stock market it to be considered a bear market there has to be a price fall of at least 20% in a key stock market index from a recent peak that happens over at least two months.

To summarize a bull stock market has investor looking to buy to increase their capital gains. They will be seeking out the best investment opportunities. A bear stock market has these same investors looking to sell their stocks so they can minimize their losses. Historically the U.S. has been a bull market. That is one of the factors why we have been considered the land of opportunity.

Car Buying Checklist

2007-07-19T15:40:00.001+05:30

Ten tips that will help you avoid some of the complications of buying a car.

- Before you begin looking for a new or used car, you should already know what vehicle you want, what your budget is and what the bank's interest rate is. To make the buying process much faster, try to get pre-approved.

- Watch out for introduction only ads that ca be seen on television or in newspapers. A small disclaimer will give you a stock number that will tell you if that automobile will either be sold when you get there or will be an average car that has no options or options no one wants. The majority of dealers use this form of advertising to get you sucked in.

- Shop on rush time for the dealers. You should negotiate and buy during the last 2 days of the month and the last 2 working hours of the dealership.

- Always take someone to go to the dealership with you. This will give you an edge with the salesman.

- You should always purchase used vehicles from lots that are connected to new car dealerships. This is because they keep only the best trade-ins.

- Get new and used car prices from another dealer, bookstore or the library. Otherwise, you must insist on seeing the dealer's invoice.

- Before you try to make a deal, you should ask competitive dealers about rebates and incentives. Do not include these rebates in your negotiation process and deduct them from the bottom line at closing time.

- Before you buy a used car, you should always have it thoroughly checked out by an impartial mechanic first.

- Remember to buy on price and not on payment. Dealers can disguise the actual cost of a vehicle by manipulating the down and monthly payment as well as length of the loan in their favor. You can easily be ripped off if you buy on payment.

- When you are trading in, get back the keys to your trade-in before you begin your negotiations so that you can go away whenever you like.

Car Leasing is a great way to make personal vehicles more affordable. To learn benefits of leasing a car click here: http://www.myleaseguide.info

Stock Portfolios

2007-07-19T15:36:00.000+05:30

Stock portfolio is a complete combination of securities as well as investments that are held by an individual or institution. A portfolio comprises of an array of government and company bonds, common stocks from various business establishments and many other forms of securities and assets. There are many different stocks available in the market such as common stock, preferred stock, original issue stock, penny stock, story stock, synthetic stock, treasury stock and widow-and-orphan stock. It is very important to understand the risk factors associated with each type of stock before choosing one. Stock trading brokers can help investors select an investment product that has the probability of giving them the best returns.

The practice of creating stock portfolios for profitable investment is not new. As the stock market is very volatile, stock market traders depend on various information resources so that they can purchase the shares of the corporation with the potential for maximum appreciation in a given time frame. This information is usually available for free and traders put in place a set of rules that have been tried and tested by other successful traders. It is possible to trade stocks online and the Internet allows traders to share and discuss their experiences with various methods of speculation.

Traders have to correctly identify the direction in which stock prices are moving, especially in a volatile market. It is equally vital to anticipate the timing of price fluctuations. The reason for this is that an unfavorable price change can result in a huge loss in the short run while the trader can get a profit eventually. Conversely, a trader might buy a stock whose price may rise after the purchase but he might not sell in the anticipation of an even higher price rise. In this case, if the price falls suddenly, the trader is bound to suffer a huge loss. Therefore, timing is considered vital in online stock trading, which makes many new investors apprehensive while taking up trading.

Portfolios provides detailed information on Portfolios, Portfolio Management, Stock Portfolios, Leather Portfolios and more. Portfolios is affiliated with Project Portfolio Management.

Limit Moves In Futures Trading

2007-07-09T19:30:00.001+05:30

The soybean futures market went limit-up at the open on Friday (29 June, 2007).

Limit days are one of the reasons I prefer day-trading to other trading styles where positions are held for days or weeks. Imagine you had been long when the market closed on Thursday. Then you would be delighted with the action on Friday, sitting on a large windfall profit!

But imagine for an awful moment that you were short on Thursday close with a stop placed 5 points above the close. When the market opened on Friday your stop would have been triggered, but if the stop order was actioned at all it would have been at around 50 points above the previous close! That is an instance of the market gapping through your stop loss and inflicting far greater losses than you had anticipated - ten times more in this case.

But that is not the half of it! More than likely, the stop order would not execute because under the rules for trading this contract, the market was locked limit up (50 points) for much of the session and trading was suspended. Fortunately, on this occasion, price pulled back late in the session allowing trading to recommence, so your stop would have executed before the end of the day. But imagine how you would feel if the market remained limit up into the close. You would endure a miserable weekend wondering if Monday would be another limit up day, costing you another 50 points with no way to exit your trade. Indeed, it is possible to have a run of several limit days in succession, with disastrous consequences for your account.

Of course, markets can gap through stop loss points when day-trading as well, but it is much rarer than when you hold positions over night or across weekends. The day-trader always closes outstanding positions before the end of the primary session, so is not nearly so exposed to dramatic moves through stop loss points.

Is there anything you can do about limit days? The best defense is to protect your position with futures options instead of normal stops. For example, when you go short soybeans at, say, 840 you may be able to purchase the 840 futures call option for 18 points ($900). If you choose to execute this option, you are granted a long futures contract at 840 points. This means that no matter how high the market goes, you cannot lose more than 18 points (because your 840 short is offset by the 840 long, so your only exposure is the 18 point premium).

This insurance will cost you, of course, because if you exit your short position at, say, 820 for a 20 point profit, you will find that the price you get for your 840 futures call will be much less than you paid. If you can get 6 points for it, you have made 20 points on your short futures position, but lost 12 points on your long call position, giving a net profit of 8 points. For the long term trader, this may be less significant. For instance, if the market declines over a few weeks to 700 giving you a 140 point profit, your futures call option will almost certainly have lost the full 18 points of value, but this still leaves you a full 122 point profit and lets you sleep easy through events like limit up days.

Even if you decide against using options in your normal trading strategy, they might still save your bacon in an emergency. When the US experienced the first discovery of Mad Cow Disease the futures market for live cattle went limit down for several days. This was in a period where there had been a sustained up-trend in cattle prices, so many traders were caught in long positions. The thing to remember is that when the futures market goes limit up or down, trading is suspended in futures contracts but not in futures options. Therefore, when the live cattle went limit down, it was still possible to buy futures put options which would serve to protect against further major declines. The problem with this is that the put option premiums are sky high in this scenario, so you will still incur a very substantial loss. Still, if you want to get out at all costs and the futures market is locked, this is the way to do it.

The other thing to notice from this discussion is the importance of trading small. If you are trading too many contracts and get caught on the wrong side of a limit move, you can be wiped out in a flash. That is why professional traders limit planned exposures (their planned stop loss points) to less than 2.5% of their overall account. Even if a disaster occurs, and they suffer a loss 10 times greater than they planned for, they are still in the game. Anybody risking more than 4 or 5% is likely to be dealt a blow from which they cannot recover, and anybody risking 10% or more is dead in the water.

A further consideration is that limit moves following sudden bad news are often over reactions. If your position is small relative to your account size, you will have the capacity to ride out the storm, and exit at much better prices when the first panic recedes and prices retrace towards former levels. Traders carrying too much risk will not be able to do this because they will suffer margin calls and be forced to exit contracts at the worst possible time.

What Is A Futures Contract?

2007-07-09T19:29:00.000+05:30

Futures contracts are based on a standardised unit of some commodity. For example, 5,000 bushels of No. 2 yellow grade soybeans.

Some contracts are based on artificially created commodities. For example, 5 times the Dow Jones index. (If the Dow Jones Index is 10,000 then this contract value would be $50,000.)

The only criterion that the underlying commodity unit has to meet is that it is unambiguously defined.

A futures contract is either a commitment to buy (LONG) or to sell (SHORT) the standard unit of the commodity at a specified future date.

There is no requirement to own the commodity before entering a short contract. This sometimes confuses people. How can I sell something I don’t own? The answer is that it is a futures contract. When you go short, you are committing to sell at a future date, not now. Of course, if you don’t own the underlying commodity at the moment, you will need to buy it before the contract expiry date. Alternatively you could enter a long contract to cancel out the short position.

Only commercial operators plan to hold futures contracts through to delivery dates. This enables them to fix prices in advance, making it easier to manage their businesses.

Futures contracts are not personalised and can be bought and sold on a futures exchange. The prices at which the contracts are traded vary as the value of the underlying commodity fluctuates.

Speculators buy and sell futures contracts depending on their view of the price movement of the underlying commodity. They do not hold them until the contract expiry date, because they have no wish to deliver or take delivery of the commodity.

A speculator enters a long trade by buying a contract, and exits the trade by selling it. This is profitable if the value of the underlying commodity increases. For example, if soybeans increase in price by $0.02 per bushel, the contract value increases by $100 (5,000 X $0.02).

A speculator enters a short trade by selling a contract, and exits the trade by buying it back. This is profitable if the value of the underlying commodity decreases. For example, if a trader shorts the futures contract based on the Dow Jones index just before it falls 30 points, the contract value decreases by $150 (30 X 5). The trader buys it back at the lower price to realise the profit.

Contracts are traded on futures exchanges around the world. Two large exchanges in the US are the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT). Look under the Products links on these web sites to see the range of contracts available and to examine the contract specifications.

Futures Trading

2007-07-09T19:28:00.000+05:30

All futures contracts are generally made for the purpose of speculation or hedging. As such, the general procedure for settlement is the neutralization of the original contract by an opposite contract on settlement, so that only difference between the current and the contract price is paid or received. It is rare that actual delivery of the goods is taken, and the price paid in settlement of futures contracts.

Futures trading is the most notable feature of business activity on the commodity exchange. In fact, the commodity exchanges are organized mainly for futures contracts. The futures contracts are made for two distinct purposes: speculation and hedging. Accordingly, they are either speculative or hedging contracts. Speculative activity is such an important part of the commodity exchanges that commodity exchanges are sometimes referred to as the speculative market.

All speculation represents an attempt on the part of individual to peep far into the future out of the window of the present. Speculation refers to an attempt to estimate the future trend of prices and proceed on that basis, to result in profit. Commodities may be bought at the current price with the assumption of selling them at a higher price in future or vice-versa.

What are Your Options Regarding Forex Options Brokers?

2007-07-09T19:27:00.000+05:30

Forex option brokers can generally be divided into two separate categories: forex brokers who offer online forex option trading platforms and forex brokers who only broker forex option trading via telephone trades placed through a dealing/brokerage desk. A few forex option brokers offer both online forex option trading as well a dealing/brokerage desk for investors who prefer to place orders through a live forex option broker.

The trading account minimums required by different forex option brokers vary from a few thousand dollars to over fifty thousand dollars. Also, forex option brokers may require investors to trade forex options contracts having minimum notional values (contract sizes) up to $500,000. Last, but not least, certain types of forex option contracts can be entered into and exited at any time while other types of forex option contracts lock you in until expiration or settlement. Depending on the type of forex option contract you enter into, you might get stuck the wrong way with an option contract that you can not trade out of. Before trading, investors should inquire with their forex option brokers about initial trading account minimums, required contract size minimums and contract liquidity.

There are a number of different forex option trading products offered to investors by forex option brokers. We believe it is extremely important for investors to understand the distinctly different risk characteristics of each of the forex option trading products mentioned below that are offered by firms that broker forex options.

Plain Vanilla Forex Options Broker - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic option contracts that are traded through an over-the-counter (OTC) forex dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or forex put option contract.

There are only a few forex option broker/dealers who offer plain vanilla forex options online with real-time streaming quotes 24 hours a day. Most forex option brokers and banks only broker forex options via telephone. Vanilla forex options for major currencies have good liquidity and you can easily enter the market long or short, or exit the market any time day or night.

Vanilla forex option contracts can be used in combination with each other and/or with spot forex contracts to form a basic strategy such as writing a covered call, or much more complex forex trading strategies such as butterflies, strangles, ratio spreads, synthetics, etc. Also, plain vanilla options are often the basis of forex option trading strategies known as exotic options.

Exotic Forex Options Broker - First, it is important to note that there a couple of different forex definitions for "exotic" and we don't want anyone getting confused. The first definition of a forex "exotic" refers to any individual currency that is less broadly traded than the major currencies. The second forex definition for "exotic" is the one we refer to on this website - a forex option contract (trading strategy) that is a derivative of a standard vanilla forex option contract.

To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.

Exotic forex options are generally traded by commercial and institutional investors rather than retail forex traders, so we won't spend too much time covering exotic forex options brokers. Examples of exotic forex options would include Asian options (average price options or "APO's"), barrier options (payout depends on whether or not the underlying reaches a certain price level or not), baskets (payout depends on more than one currency or a "basket" of currencies), binary options (the payout is cash-or-nothing if underlying does not reach strike price), lookback options (payout is based on maximum or minimum price reached during life of the contract), compound options (options on options with multiple strikes and exercise dates), spread options, chooser options, packages and so on. Exotic options can be tailored to a specific trader's needs, therefore, exotic options contract types change and evolve over time to suit those ever-changing needs.

Since exotic forex options contracts are usually specifically tailored to an individual investor, most of the exotic options business in transacted over the telephone through forex option brokers. There are, however, a handful of forex option brokers who offer "if touched" forex options or "single payment" forex options contracts online whereby an investor can specify an amount he or she is willing to risk in exchange for a specified payout amount if the underlying price reaches a certain strike price (price level). These transactions offered by legitimate online forex brokers can be considered a type of "exotic" option. However, we have noticed that the premiums charged for these types of contracts can be higher than plain vanilla option contracts with similar strike prices and you can not sell out of the option position once you have purchased this type of option - you can only attempt to offset the position with a separate risk management strategy. As a trade-off for getting to choose the dollar amount you want to risk and the payout you wish to receive, you pay a premium and sacrifice liquidity. We would encourage investors to compare premiums before investing in these kinds of options and also make sure the brokerage firm is reputable.

Again, it is fairly easy and liquid to enter into an exotic forex option contract but it is important to note that depending on the type of exotic option contract, there may be little to no liquidity at all if you wanted to exit the position.

Firms Offering Forex Option "Betting" - A number of new firms have popped up over the last year offering forex "betting." Though some may be legitimate, a number of these firms are either off-shore entities or located in some other remote location. We generally do not consider these to be forex brokerage firms. Many do not appear to be regulated by any government agency and we strongly suggest investors perform due diligence before investing with any forex betting firms. Invest at your own risk with these firms.

Royal Orchid Q4 net profit at Rs 10.6cr

2007-06-18T18:35:00.000+05:30

Royal Orchid has announced its fourth quarter results. The company has posted net profit of Rs 10.6 crore (Rs 106 million) in Q4 of FY07 versus Rs 7.9 crore (Rs 79 million) in Q4 of FY06.

Its net sales stood at Rs 26.8 crore (Rs 268 million) as against Rs 20.9 crore (Rs 209 million).

Elecon Eng Q4 net profit up at Rs 18.55 cr

2007-06-18T18:34:00.000+05:30

Elecon Engineering declared its Q4FY07 result. The company in Q4 posted net profit was up at Rs 18.55 crore versus Rs 10.95 crore on YoY basis. During the corresponding quarters, its net sales was up at Rs 284.8 crore versus Rs 187.3 crore on YoY basis.

Geodesic Information Q4 net profit at Rs 21.2cr

2007-06-18T18:30:00.000+05:30

Geodesic Information Systems has come out with fourth quarter results. The company has posted net profit of
Rs 21.2 crore (Rs 212 milion) in Q4 of FY07 versus Rs Rs 24.32 crore (Rs 243.2 million) in Q4 of FY06.

FY07 revenue stood at Rs 177 crore (Rs 1.77 billion) as against Rs 100 crore (Rs 1 billion).

Geodesic Information board has approved 1:2 bonus issue and has planned to raise USD 150 million.

Inox FY07 net profit up at Rs 24.8 cr

2007-06-18T18:28:00.000+05:30

INOX declared its FY07 result. Its net profit was up at Rs 24.8 crore versus Rs 17.5 crore.

AIA Engg Q4 net profit up 63.22% to Rs 22.15cr

2007-06-09T07:30:00.000+05:30

AIA Engineering has announced its Q4FY07 results. The company has posted a good growth of 63.22% in standalone net profit to Rs 22.15 crore (Rs 221.5 million) from Rs 13.57 crore (Rs 135.7 million) in corresponding quarter of previous year.

Alstom bags Rs 255-cr Delhi Metro contract

2007-06-09T07:07:00.000+05:30

Alstom has bagged a Rs 255-crore contract from Delhi Metro Rail Corporation to design, manufacture, supply, install and commission the train control and signalling system for Delhi Metro's two phases.

Ispat Industries Q4 net profit at Rs 82 cr

2007-06-09T07:06:00.001+05:30

Ispat Industries announced its Q4 FY07 result. The company's Q4 net profit was down at Rs 82.12 crore versus loss of Rs 153 crore on YoY basis. During the corresponding quarters, its net sales was up at Rs 2105 crore versus Rs 1281 crore. Its operatinf profit margin stood at 24% versus 12% during the corresponding quarters.

PVR Q4 net profit up at Rs 2.2 crore

2007-06-09T07:04:00.000+05:30

PVR announced its Q4 FY07 result. The company's Q4 net profit was up at Rs 2.20 crore versus Rs 1.67 crore on QoQ basis. During the corresponding quarters, its net sales was up at Rs 40.6 crore versus Rs 39.5 crore. Its operatinf profit margin stood at 16% versus 13.5% during the corresponding quarters.

Ashok Leyland to borrow $250 m from overseas market

2007-06-09T07:02:00.000+05:30

Ashok Leyland will raise $250 million (Rs 1,100 crore) through the ECB-route. "We will hit the market within a week," the company's Executive Director-Finance, Mr K. Sridharan, told Business Line on Tuesday. The money would be used to finance the company's capital expansion projects at Ennore and Uttaranchal

NIIT Q4 net profit up 106% to Rs 17.1cr

2007-06-09T07:01:00.002+05:30

NIIT has declared its Q4FY07 results. The company has posted growth of 106.02% in net profit at Rs 17.1 crore (Rs 171 million) in Q4 of FY07 versus Rs 8.3 crore (Rs 83 million) in Q4 of FY06 and 122.8% in revenues at Rs 256 crore (Rs 2.56 billion) as against Rs 114.9 crore (Rs 1.14 billion).

Ashok Leyland May sales at 5,804 units

2007-06-09T07:01:00.001+05:30

Ashok Leyland has come out with May sales numbers. The company has sold 5,804 vehicles in May 2007 as against 5,849 units in April 2007.

MTNL to develop 80,000-sq m IT park in Noida

2007-06-09T07:00:00.001+05:30

MTNL is planning to develop a 80,000-sq metres IT park in Noida, a suburb of New Delhi, say sources. For the development of the IT park, sources add, the telecom service provider has already identified a consortium of developers.

MTNL will take 18 months time to develop the IT park, which will come up in Sector-62, Noida.

TNPL Q4 net profit at Rs 21.7 cr

2007-06-09T06:59:00.001+05:30

TNPL (Tamil Nadu Newsprint and Papers) declared its Q4FY07 result. The company's Q4 net profit was down at Rs 21.7 crore versus Rs 34.6 crore on YoY basis. Its net sales was up at Rs 225.6 crore versus Rs 209.2 crore during the corresponding quarters. Its operating profit margin in Q4 was at 22.1% versus 24.3%.

DLF buys 200 acres in Haryana for Rs 3,200 cr

2007-06-09T06:58:00.001+05:30

DLF has acquired 200 acres of land in Panchkula, Haryana for Rs 3,200 crore.

Crude prices cross $66/bbl mark

2007-06-09T06:57:00.000+05:30

Crude prices have risen up by 1.7% percent to above the USD 66 mark amidst supply concerns from West Asia and Nigeria.

Worries of a cyclone in Oman also weighed down on sentiments.

On the Nymex, crude was trading at USD 66.02 up 94 cents.

Premji's son Rishad to join Wipro as business manager

2007-06-09T06:56:00.000+05:30

Mr Rishad Premji would join as a business manager in the fairly new practice that has been set up under the banking and financial solutions unit of Wipro Technologies, said Mr Pratik Kumar, Executive Vice-President, Human Resources, Wipro.

Mr Rishad will report to Mr Somitro Ghosh, Senior Vice-President, who in turn reports to Mr Girish Paranjpe, President, Finance Solutions, Wipro Technologies.

Tata Tea FY07 cons net up 48.2% to Rs 443cr

2007-06-02T06:48:00.000+05:30

Tata Tea has announced its Q4 and FY07 results. The company's FY07 standalone net profit was up 63.6% to Rs 306 crore (Rs 3.06 billion) and consolidated net profit up by 48.2% at Rs 443 crore (Rs 4.43 billion).

Total income has gone up by 10.02% to Rs 1146 crore (Rs 11.46 billion) for FY07 and consolidated total income surged by 30.2% to Rs 4,103 crore (Rs 41.03 billion).

The company's Q4 standalone net profit stood at Rs 3.9 crore (Rs 39 million) versus Rs 19.3 crore (Rs 193 million) and total income was up by 6.6% to Rs 259 crore (Rs 2.59 billion).

DLF, Fortis JV plan Rs 6,200 cr for setting up hospitals

2007-06-02T06:46:00.002+05:30

Ahead of its initial public offer, real estate giant DLF has entered into an agreement for floating a joint venture with Ranbaxy group company Fortis Healthcare to set up hospitals across the country with about Rs 6,200 crore of investments.

Fortis Healthcare Managing Director Shivinder Singh told that Fortis will have a majority holding with 74 % and the rest will be with DLF in the proposed joint venture.

Industry sources said an agreement for the proposed JV has already been signed.

The JV plans to set up a chain of 200-450 bed hospitals in 31 cities in India within three to five years, the sources added.

While the joint venture will mark DLF's foray into the healthcare segment, for Fortis the move is a part of its strategy to become a pan-India player in the healthcare segment and resolve real estate problems for setting up new hospitals.

The planned investment of Rs 6,200 crore would go toward meeting cost of land, construction and medical equipments, the sources said.

The JV plans to build hospitals in cities where DLF has a presence. Already DLF has a land reserve of 10,255 acres in 31 cities.

Hero Honda May 2-wheeler sales at 2.85 lakh units

2007-06-02T06:46:00.001+05:30

Hero Honda Motors has announced its May sales numbers. The company has sold 2.85 lakh 2-wheeler units in May 2007 as against 3.03 lakh units in May 2006.

Neyveli Lignite Q4 net profit at Rs 26.4cr

2007-06-02T06:45:00.000+05:30

Neyveli Lignite has declared its fourth quarter results. The company has posted net profit of Rs 26.4 crore (Rs 264 million) as against loss of Rs 65.86 crore (Rs 658.6 million) in Q4 of FY06.

M&M May Auto sales up 50% to 18,116 units

2007-06-02T06:44:00.003+05:30

Mahindra and Mahindra, M&M has come out with its May sales numbers. The company has posted a growth of 50% in auto sales by selling 18,116 vehicles in May 2007 versus 12,117 vehicles in May 2006 and 12,867 vehicles in April 2007.

Tractor sales surged by 2% to 8,142 units from 7,958 units and UV sales up 23% at 10,986 units versus 8,945 units.

LCV sales was up 65% to 1,006 units from 611 units. Its May Scorpio sales stood at 3,384 units versus 2,640 units.

Recently launched M&M's Logan sales was at 2,786 units.

Rolta India plans acquisition worth $ 50-60 m

2007-06-02T06:44:00.001+05:30

Rolta India is looking for acquisition and is in talks with 2-3 companies. The company said acquisition will be in USD 50-60 million range and hopes to finish deal soon.

KK Singh, CMD, Rolta India, said higher exposure to the domestic market would help in reducing the rupee appreciation impact.

The company has a forex cover of $20-30 million and an orderbook of around Rs 900 crore.

TV Today Q4 net profit at Rs 12.3cr

2007-06-02T06:43:00.001+05:30

TV Today has announced its fourth quarter results. The company has reported net profit of Rs 12.3 crore (Rs 123 million) in Q4 of FY07 versus Rs 14.1 crore (Rs 141 million) in Q3 of FY07 and Rs 11 crore (Rs 110 million) in Q4 of FY06.

HCL Tech may bag $200m outsourcing deal

2007-06-02T06:42:00.000+05:30

The company is likely to bag USD 200 million order for a five-year deal from a global dairy product company. The dairy company is among top 10 in the world, with sales of over USD 10 billion. The deal is for information services & applications development, sources said. It is at due diligence stage and likely to happen in couple of months,

Bajaj Auto total May sales at 1.93 lakh units

2007-06-02T06:41:00.001+05:30

Bajaj Auto has come out May sales numbers. In all, the company has sold 1.93 lakh units in May 2007 compared to 2.25 lakh units in May 2006.

Its Bike sales also slipped to 1.69 units in May 2007 from 1.99 units in May 2006.

PFC to raise Rs 150 Cr via 3yr & 5 yr bonds

2007-06-02T06:40:00.000+05:30

The Power Finance Corporation, or PFC, is going to raise Rs 150 crore via 3-year and 5-year bonds.

VK Garg, CMD, PFC, says the spread margins could be under pressure for shorter term. The money raised will be used for lending to borrowers for power projects.

Vijay Mallya is Vice-Chairman of Deccan Aviation

2007-06-02T06:38:00.002+05:30

UB Holdings will buy 26% stake in Deccan Aviation. They will also make a subsequent 20% open offer. The company will pay Rs 155 per share for the Deccan Avaiation stake and will pay a total of Rs 550 crore. While Rs 150 crore will be paid now, Rs 400 crore will be paid before June-end.

They Deccan Aviation board has approved of the stake sale and they will make a preferential allotment to UB Holdings. Kingfisher and Deccan Aviation will now hold 32 – 34 % of the market share. Deccan and Kingfisher will, meanwhile, continue as separate identities.

Captain Gopinath will remain the Chairman of Deccan Aviation while Vijay Mallya will be the Vice Chairman. CFO Ramki Sundaram will become the officiating CEO.

Inflation for week ended May 19 at 5.06%

2007-06-02T06:38:00.001+05:30

Inflation for the week ended May 19 stood at 5.06% versus 5.27%.

The market had estimated it at 5.06%

TVS Motor May sales at 1.08 lakh units

2007-06-02T06:37:00.002+05:30

TVS Motor has declared its May sales numbers. The company has sold 1.08 lakh units in May 2007 as against 1.24 lakh units in May 2006.

Maruti May sales above estimates, sells 59,400 units

2007-06-02T06:37:00.001+05:30

Car market leader Maruti Udyog has announced its May sales numbers. The company has sold 59,400 vehicles in May 2007 as against 53,396 vehicles in May 2006. This includes 3,448 units of exports.

It has sold 55,952 vehicles in the domestic market in May 2007 versus 50,904 vehicles in May 2006.

Maruti’s volume in the domestic C segment grew by 22.7%. In the A3 segment, the sales grew by 103.8%, while the A2 segment posted a growth of 7.8% during the month, according to press release.

GE to set up India infra fund of over $300-500 m

2007-06-02T06:35:00.000+05:30

GE will set up an India infrastructure fund of USD 300-500 million, which will double over time. Jeffrey Immelt, the company chairman, says the Indian market never offered more potential than today.

Immelt's visit coincides with the Indian economy achieving its highest growth in 18 years. That kind of pace is an aspiration for GE, says the CEO who has set the goal of making GE grow at two or three times the world GDP growth rate. He says, “If GE can grow at the same pace as Indian economy we will be a great company.”

To make the world's most admired company greater still, GE is betting on six broad themes. Infrastructure, which is a 4 trillion dollar business over the next 8 years is one of them. Demographics is another. The third is the emerging world. Since India has a fit in all these three, it will provide the jet fuel for GE's growth in the future. So far GE has sold from India but never in India. But now, that will change.

Immelt says, “The Indian market has never offered more potential than today.”

GE says it will be a voice for development of infrastructure in India. It will invest in green technologies, including nuclear energy, and is tapping the worldwide excess liquidity for India. Immelt adds, “It is inevitable that we will set up a USD 300-500 million infrastucure fund for India.”

GE has an eight by ten strategy for India, which is USD 8 billlion each in revenues and assets by 2010. It projects revenues of USD 3 billion this year. That, however, is still a small amount for a company projected to earn USD 175 billion in revenues this year.

Telecom Malaysia open to merge Spice with Idea

2007-06-02T06:33:00.000+05:30

Telecom Malaysia Bhd, which has 49 per cent stake in Spice Communications, said that it would be open to the possibility of merging its Indian venture with Idea Cellular Ltd to get a larger share of the world's fastest-growing cellular phone market.

Idea Cellular and Spice Communications may be in talks with each other for a possible merger of their operations to create the country's fifth largest mobile entity. While Spice has operations in two circles, Idea Cellular has services in 11 circles.

Both companies are looking to expand their network to become a pan-India operator. Both the companies have applied for additional licences to expand their footprint to compete with the likes of Bharti Airtel, Reliance Communication and Vodafone.

Finland firm Incap buys TVS Electronics unit

2007-06-02T06:32:00.000+05:30

Incap Contract Manufacturing Services Pvt Ltd, a subsidiary of Incap Corporation, Finland, expects its electronics manufacturing services business in India to double in its first year of operations and sustain a 50-100 per cent growth in the coming years.

Incap Contract today finalised a Rs 41.12-crore deal acquiring the TVS Electronics Ltd contract manufacturing unit at Tumkur, 80 km west of Bangalore.

Briefing reporters on Incap Corporation's plans here, Mr Juhani Hanninen, President and CEO, Incap Corporation, said that this was the company's first facility outside Europe.

The € 89-million (Rs 480 crore) Incap Corporation expects to double its business by 2010 with more than half its revenues coming from facilities outside Europe. The company manufactures electronics and mechanical components and equipment for use in industrial electronics, electrical power technology, telecommunications, healthcare and security.

L&T investing Rs 2,500 cr in expansion

2007-06-02T06:31:00.001+05:30

The company will set up new factories and expand its operations across the country over the next few years, said Mr A.M. Naik, Chairman & Managing Director.

Orders were growing at 35-40 per cent but execution was only at 19-20 per cent, owing to both paucity of skilled manpower and capacity constraints, he said.

L&T hopes to finalise a location for its shipbuilding operations. Currently, this business is operating out of its existing facility at Hazira where only smaller ships can be built. An investment of Rs 2,000 crore would be required for a new shipbuilding facility.

L&T also targets Rs 4,000 crore in revenues from its power in four or five years, from Rs 800 crore to Rs 1,000 crore currently.

Manpower constraints

To address its manpower constraints, especially for skilled workmen such as fitters, welders, masons and the like, the company is embarking on a massive training programme.

It will establish 10 training centres across the country and may tie up with ITIs as well. The company currently has 28,000 employees, 60 per cent of whom are engineers. Along with its subsidiaries (mainly L&T Infotech) L&T will recruit around 10,000 persons this fiscal.

To raise $300 m

L&T plans to raise $300 million by way of either syndicated loan or private placement of debt, said its Chief Financial Officer, Mr Y.M. Deosthalee. The company wants an increased tenure of about 10 years for the loan, he said.

Crude trading at $64.22/bbl

2007-06-02T06:29:00.000+05:30

Crude prices rose to above the USD 64 mark on concerns that US refiners aren't increasing production fast enough to restore fuel stockpiles for the summer.

In after hours access trading, crude was trading on the Nymex at USD 64.22 up 21 cents.

Mallya flies Deccan, gets 26% stake for Rs 550 cr

2007-06-01T06:26:00.002+05:30

The Air Deccan Board has approved stake sale to UB Holdings, reports CNBC-TV18. UB Holdings will get 26% stake in Air Deccan at Rs 550 crore.

Ravi Nedungadi, President & CFO of UB Group confirmed the development in an exclusive interview to CNBC-TV18. The group will buy 26% stake of Deccan Aviation at Rs 155/share, thereby pipping ADAG's Rs 135/share offer.

Out of the Rs 550 crore, Rs 150 crore will be paid immediately; the rest will follow later. UB Holdings is expected to make subsequent open offer to the Air Deccan shareholders, about which the stock exchanges have already been informed.

On the management side, Captain Gopinath would continue as Chairman of Deccan Aviation.

GDP growth to be close to 8.2-8.3% in FY08: Crisil

2007-06-01T06:26:00.001+05:30

Q4 GDP growth in FY07 is seen at 9.1% as compared to 10% in the same period last year. For FY07, GDP growth was 9.4% as against 9.2% last year.

The manufacturing sector grew 12.4% in Q4 FY07 as compared to 9% in the same period last year. Growth in the farm sector fell to 3.8% in Q4 FY07 as against 6.2% last year. GDP growth in construction sector fell to 11.2% in Q4 FY07 as compared to 16.1% in the same period last year.

Q4FY07 GDP growth seen at 9.1%

2007-06-01T06:24:00.000+05:30

Q4 GDP growth in FY07 is seen at 9.1% as compared to 10% in the same period last year. For FY07, GDP growth was 9.4% as against 9.2% last year

Manufacturing grew 12.4% in Q4 FY07 as compared to 9% in the same period last year. Growth in the farm sector fell to 3.8% in Q4 FY07 as against 6.2% last year. GDP growth in construction sector fell to 11.2% in Q4 FY07 as compared to 16.1% in the same period last year.

Cummins India Q4 net up 20% to Rs 65cr

2007-06-01T06:23:00.000+05:30

Cummins India has announced its fourth quarter results of FY07. The company has posted net profit of Rs 65 crore (Rs 650 million) in Q4 of FY07 versus Rs 54.09 crore (Rs 540 million) in Q4 of FY06, a growth of 20.17%.

Tata Tea to acquire majority stake in Mt Everest

2007-06-01T06:22:00.002+05:30

Mt Everest will be making a preferential allotment to Tata Tea, reports CNBC-TV18. The company’s promoters also plan to sell 11% stake to Tata Tea. With this, Tata Tea is set to acquire majority stake in the company.

Tata Tea will also make an open offer to Mt Everest shareholders at Rs 145-150 per share. The board will convene on June 1 to approve the acquisition. It will invest nearly Rs 250 crore for the stake buy.

Welspun India Q4 net profit at Rs 10.3 cr

2007-06-01T06:22:00.001+05:30

Welspun India declared its Q4 FY07 result. The company's Q4 net profit was at Rs 10.3 crore versus Rs 10.7 crore on YoY basis. The other income figure during the corresponding quarters stood at Rs 16.5 crore versus Rs 9 crore on YoY basis.

Shriram Transport Finance Q4 net up at Rs 48.4 cr

2007-06-01T06:21:00.001+05:30

Shriram Transport Finance declared its Q4 FY07 result. The company's net profit was at Rs 48.4 crore in Q4 versus Rs 31.1 crore on YoY basis. The net income figure stood at Rs 427 crore versus Rs 235.4 crore on YoY basis.

Lloyds Steel Q4 net profit down at Rs 8.67 cr

2007-06-01T06:20:00.002+05:30

Lloyds Steel declared Q4FY07 result. The company's Q4 net profit was down at Rs 8.67 crore versus Rs 46.8 crore on YoY basis. During the coresponding quarters the company posted net sales at Rs 534.7 cr vs Rs 339 cr.

Hindustan Motors Q4 net up at Rs 53 cr

2007-06-01T06:20:00.001+05:30

Hindustan Motors declared its Q4FY07 result. The company's net profit was at Rs 53 crore in Q4 versus Rs 13.8 crore on QoQ basis. The net sales figure stood at Rs 154.8 crore versus Rs 167.4 crore on QoQ basis. During the corresponding quarters the company had other income at Rs 67.9 cr vs Rs 1.40 cr. Its operating loss was at Rs 4.94 crore versus Rs 4.3 crore.

Motorola to cut 4,000 jobs

2007-06-01T06:19:00.002+05:30

Cell-phone maker Motorola will cut 4,000 more workers during 2008. The company said it is on track to save USD 400 million annually.

Motorola posted its first loss in three-years in its first quarter earnings, thus forcing the management to undertake cost cutting measures.

Tata Power Q4 net profit down at Rs 69.9 cr

2007-06-01T06:19:00.001+05:30

Tata Power announced its Q4FY07 result. The company's Q4 net profit was down at Rs 69.9 crore versus Rs 138.8 crore on YoY basis. During the corresponding quarters, the net sales figure stood at Rs 947.4 crore versus Rs 1171 crore.

Operating profit margin was down at 0.53% versus 13.4% in the corresponding quarters. The company also registered Q4 other income at Rs 178.7 crore versus Rs 75 crore on YoY basis.

Indian Oil gets nod to build refinery in Turkey

2007-06-01T06:18:00.000+05:30

Indian Oil Corporation Ltd will undertake a detailed feasibility study on the plans to build a $4.9-billion refinery in southern Turkey. This moves follows the approval from Turkey's energy market regulator to IOC and Turkish builder Calik Holding to build a refinery in that country.

IOC in collaboration with Calik proposes to set up a 15 MMTPA grassroots integrated refinery-cum-petrochemicals complex at Ceyhan in Turkey. This is part of IOC's plans for expanding business in Turkey, Africa, West Asia and Commonwealth of Independent States. This approval marks the entry of IOC in Turkey and also this would be first time that a non-state company of Turkey will build a refinery there.

Crude trades at $63/bbl

2007-06-01T06:17:00.000+05:30

Crude
prices rose yesterday amid speculations that increased gasoline output won't push US fuel prices much lower.

On the Nymex crude was trading at USD 63.36 down 13 cents.

Bush picks Zoellick as new World Bank President

2007-05-30T17:29:00.002+05:30

US President George W. Bush has chosen Robert Zoellick, a former US trade representative to replace Paul Wolfowitz as President of the World Bank.

Bush will announce his selection later today and expects the Bank's board to accept Zoellick. However, World Bank Directors have never blocked a nomination in the past.

Birla Corp Q4 net profit at Rs 101cr

2007-05-30T17:29:00.001+05:30

Birla Corporation has announced its fourth quarter results. The company has posted net profit of Rs 101 crore versus Rs 67 crore in Q4 of FY06.

Tata Chem posts Q4 net profit at Rs 94cr

2007-05-30T17:28:00.003+05:30

Tata Chemicals has come out with fourth quarter results of FY07. The company has posted net profit of Rs 94 crore in Q4 of FY07 compared to Rs 64 crore in Q4 of FY06.

Net sales stood at Rs 803 crore (Rs 8.03 billion) versus Rs 754 crore (Rs 7.54 billion).

Crompton Greaves FY07 net profit at Rs 192.4cr

2007-05-30T17:28:00.001+05:30

Crompton Greaves has declared its FY07 results. The company has posted net profit of Rs 192.4 crore (Rs 1.92 billion) versus Rs 163 crore (Rs 1.63 billion) in FY06.

FY07 net sales stood at Rs 3,660 crore (Rs 36.60 billion).

Kamat Hotels Q4 net profit at Rs 9.5cr

2007-05-30T17:27:00.001+05:30

Kamat Hotels has announced its Q4FY07 results. The company has reported net profit of Rs 9.5 crore (Rs 95 million) in Q4 of FY07 versus Rs 5.8 crore (Rs 58 million) in Q4 of FY06.

Net sales for Q4 stood at Rs 35.8 crore (Rs 358 million) as against Rs 25.3 crore (Rs 253 million).

Madras Cement FY07 net profit at Rs 308cr

2007-05-30T17:26:00.000+05:30

Madras Cement has announced its FY07 results. The company has posted net profit of Rs 308 crore (Rs 3.08 billion) in FY07 as against Rs 79 crore (Rs 790 million) in FY06.

JSW Steel to raise USD 325 million via FCCB

2007-05-30T17:24:00.002+05:30

JSW Steel has lined up USD 325 million FCCB programme, priced at a premium of 50% over yesterday's close.

The FCCB issue is for USD 325 million with the conversion price of Rs 953.40 per share and the conversion price is at 50% premium over yesterday's close. This hasn’t come as a big surprise as it was mentioned in their result press conference that the company is looking to raise money via FCCB or ADR route.

Their 5-year, zero coupon convertibles are at annual YTM of 7.25%. The company is also looking to list on Singapore Stock Exchange and the closing date is on June 27 with ABN AMRO, Rothschild and Citigroup as joint book runners. The conversion price of Rs 953.40 per share would lead to an equity dilution of 7.8%.

The company is raising money for capex plan and is looking at increasing capacity from 3.8 mtpa to 10 mtpa by September 2010. The company has announced a capex of Rs 7,000 crore for expansion plans out of which Rs 2,000 crore is through internal accruals while Rs 5,000 crore will be financed via debt and quasi-debt instruments.

Britannia Q4 net profit up at Rs 39.8 cr

2007-05-30T17:24:00.001+05:30

Britannia announced its Q4FY07 result. The company's Q4 net profit was at Rs 39.8 crore versus Rs 27.8 crore on YoY basis. Its net sales figure was up at Rs 599 crore versus Rs 454 crore during the corresponding quarters. Its OPM stood at 6.45% in Q4FY07 versus 4.95% in Q4 of last fiscal. FY07 EPS stood at Rs 44.

Piaggio, SBI in pact for vehicle finance

2007-05-30T17:22:00.002+05:30

Targeting a 30 per cent jump in the sales of its `Ape' range of three-wheelers this year, Piaggio Vehicles Pvt Ltd has tied up with State Bank of India (SBI) for extending finance options to the customers.

As part of the tie-up, SBI would offer finance to customers on both commercial and passenger vehicles of Ape range of three-wheelers in all branches across the country, Mr Simon Fernandes, Deputy General Manager (SME Division), SBI, told newspersons here on Tuesday.

"The finance schemes are being offered with an interest rate of Rs 11.5 per cent. However, if we see in the market terminology of flat rates, the interest would work out to around 8 per cent and there are no hidden charges," he said. The bank would extend 85 per cent of the on-road price of the vehicle as loan.

Mr S. Ramachandra, Head of Institutional Sales, Piaggio, said the target was to sell 6,000 Ape vehicles through SBI finance in Andhra Pradesh before December. "Soon, we will also launch gas-run three-wheelers and also foray into four-wheeler segment," he said. The vehicles are priced between Rs 1.29 lakh and Rs 1.32 lakh.

During the last fiscal, Piaggio had sold over 1.37 lakh and 37,000 vehicles in the country and Andhra Pradesh, respectively. "Now, there are over five lakh Ape three-wheelers on the road in the country and we have a 50 per cent market share," he added.

Software exports from AP up 48%

2007-05-30T17:22:00.001+05:30

Software exports from Andhra Pradesh topped Rs 18,582 crore (about $4.5 billion), registering a growth of 48 per cent over last year (Rs 12,521 crore), thereby, accounting for 14 per cent of the country's total exports estimated at Rs 1,34,000 crore (preliminary).

Crude prices fall below $64/bbl

2007-05-30T17:20:00.002+05:30

Crude prices fell below USD 64 amid speculations that US refiners have raised operating rates to an eight-month high to increase fuel stockpiles for the fourth week.

On the Nymex, crude was trading at USD 63.28 up 13 cents.

RIL to supply gas to Gail

2007-05-30T17:20:00.001+05:30

Reliance Industries Ltd, or RIL, is going to supply 5-10 m cu meter gas/day to Gail.

The public sector unit is going to buy the gas from RIL at the rate of $4.25-4.75/mbtu.

Ranbaxy wins 4 Atorvastatin patents in Norway

2007-05-30T17:19:00.000+05:30

Ranbaxy has won four patents in Norway. However, the world's largest drugmaker Pfizer says that it will appeal against the ruling.

Ranbaxy has won four Atorvastatin patents in Norway. The Atorvastatin branded Lipitor has a USD 40-50 million market size in Norway.

Bharti Fieldfresh to enter ready-to-eat biz

2007-05-30T17:17:00.002+05:30

Rakesh Mittal, Vice-Chairman of Bharti Enterprises stated that Bharti Fieldfresh will get into the processing of fruits and vegetables and it will launch products in the ready-to-eat segment in the next two years, reports CNBC-TV18.

Mittal said that the company will get into an arrangement with the farmer, whereby, "once the producer is ready on a predetermined formula, that produce will be bought by us for the domestic market and for my exports. Going forward, Fieldfresh is looking at avenues of getting into processing, whether it is vegetables or fruits, ready-to-eat salads or ready-to-eat fruits. I believe, in the next 18-24 months, as the organised retail starts kicking in, the consumers will require these products.”

Thermax Q4 net up at Rs 69.73cr

2007-05-30T17:17:00.001+05:30

Thermax has announced its Q4 and FY07 results. It has posted net profit of Rs 69.73 crore in Q4 of FY07 versus Rs 41.97 crore in Q4 of FY06.

Its Q4 net sales were up at Rs 804 crore as compared with Rs 469 crore in the corresponding quarter previous year.

HPCL Q4 net profit at Rs 549cr

2007-05-30T17:16:00.000+05:30

HPCL has announced its Q4 and FY07 results. It has posted net profit of Rs 549 crore (Rs 5.49 billion) in Q4 of FY07 versus Rs 2,013 crore (Rs 20.13 billion) in Q4 of FY06.

The company has reported net profit of Rs 1571 crore (Rs 15.71 billion) in FY07 compared to Rs 405.6 crore (Rs 4.05 billion) in FY06 and net sales of Rs 89,041 crore (Rs 890.41 billion) versus Rs 71,037.9 crore (Rs 710.37 billion).

Sebi bans Adani Enterprises from mkts

2007-05-30T17:14:00.000+05:30

Sebi has banned the promoters of Adani Enterprises, formerly known as Adani Exports, from the stock market for a period of two years.

Sebi's action was based on an investigation which revealed that the promoters of Adani Exports were involved in circular trading with Ketan Parekh and his entities and aided them in manipulating the Adani scrip.

Sebi alleges that Adani Enterprises was involved in manipulative activities to influence the price of Adani scrip. The manipulative activities include synchronised trading, circular trading and creation of artificial volume. It observes that there was a movement of shares and funds between Adani Group and KP Entities and the funds were used by KP for manipulating stock markets and settlements.

L&T Q4 net profit at Rs 700.8cr

2007-05-30T17:13:00.000+05:30

Larsen and Toubro, L&T has come out with fourth quarter and FY07 numbers. It reported net profit of Rs 700.8 crore (Rs 7 billion) in Q4 of FY07 as against Rs 458.8 crore (Rs 4.58 billion) in Q4 of FY06 and net sales of Rs 6,248.24 crore (Rs 62.48 billion) versus Rs 4,616.9 crore (Rs 46.16 billion).

For FY07, the net profit stood at Rs 1,403 crore (Rs 14.03 billion) versus Rs 942.4 crore (Rs 9.42 billion) in FY06 and net sales at Rs 17,578.8 crore (Rs 175.78 billion) as against Rs 14,734.8 crore (Rs 147.34 billion).

Operating profit margin was at 12.96% in Q4FY07 versus 11.83% in Q4 FY06.

For FY07, the company posted growth of 70.06% in consolidated net profit to Rs 2240.14 crore (Rs 22.40 billion) from Rs 1317.21 crore (Rs 13.17 billion) and 23.93% growth in revenues to Rs 20347.85 crore (Rs 203.47 billion) from Rs 16418.31 crore (Rs 164.18 billion).

Bharat Forge mulls South America acquisition

2007-05-23T06:34:00.003+05:30

Bharat Forge has become the first Indian auto components company to touch the billion dollar mark. Now it wants to grow even bigger.

Bharat Forge is mulling an acquisition in South America to tap crucial automotive markets like Brazil. The company will announce acquisition of non-automotive forging business in North America and Europe during this year.

Bharat Forge plans to expand its non-automotive business from current 17% of total revenue to 40% in four to five years. Its Baramati facility will start operations in April 2008 and it will have the world's largest forging hammer.

Bharat Forge stated that the capacity utilisation in Chinese JV is below 40%. They are incurring a loss of around Rs 16 crore currently. They expect the Chinese JV to turn profitable next year.

Central Bank files IPO prospectus with Sebi

2007-05-23T06:34:00.001+05:30

Central Bank has filed and IPO prospectus with Sebi, reports CNBC-TV18.

It will issue 8 crore shares.

Zicom Electronics to invest USD 2 mn in Hong Kong arm

2007-05-23T06:33:00.000+05:30

Manohar Bidaye, Chairman, Zicom Electronics, says the company is setting up a Hong Kong subsidiary, Zicom Manufacturing with an investment of USD 2 million. The Hong Kong subsidiary will help in sale of overbranded products.

The company recently bought 49% stake in Dubai-based Unisafe Fire Protection.

Regarding the financial target for FY08, Bidaye says, the company will continue with the 78-80% growth rate, which it posted during past two years.

Bidaye says the company is looking for a couple of acquisitions, but will not be able provide details at this juncture.

Bharat Forge Q4 net profit at Rs 64.3cr

2007-05-23T06:32:00.004+05:30

Bharat Forge has announced its fourth quarter and FY07 results. The company has posted standalone net profit of Rs 64.3 crore (Rs 643 million) in Q4 of FY07 versus Rs 53 crore (Rs 530 million) in Q4 of FY06 and net sales of Rs 510 crore (Rs 5.1 billion) as against Rs 438.4 crore (Rs 4.38 billion).

Other income stood at Rs 22.2 crore (Rs 222 million) versus Rs 14.3 crore (Rs 143 million).

For FY07, company has reported net profit of Rs 241 crore (Rs 2.41 billion) compared to Rs 206.7 crore (Rs 2.06 billion) in FY06 and net sales of Rs 1,864 crore (Rs 18.64 billion) versus Rs 1,578 crore (Rs 15.78 billion).

USD 20 bn spend in realty sector expected: JM Financial

2007-05-23T06:32:00.003+05:30

JM Financial expects extra USD 15-20 billion investment in the Indian real estate sector. The lower expectancy of returns is holding back investors, from investing their capital in the real estate sector, it believes.

JM Financial sees 20% plus appreciation in some pockets of real estate. It says the actual demand for real estate will not come down.

Everest Kanto Q4 net profit at Rs 5.12cr

2007-05-23T06:32:00.001+05:30

Everest Kanto Cylinder has come out with fourth quarter numbers of FY07. The company has reported net profit of Rs 5.12 crore (Rs 51.2 million) in Q4 of FY07 as against Rs 10.2 crore (Rs 102 million) in Q4 of FY06.

Net sales posted flat at Rs 80 crore (Rs 800 million). OPM stood at 17.2% versus 19.6% and FY07 consolidated EPS at Rs 39.

Crude ends above $66/bbl on Nigeria unrest

2007-05-23T06:31:00.002+05:30

Crude prices spiked 2.1% to above USD 66 a barrel as continued unrest in Nigeria threatened the OPEC nation's oil exports. Speculation that demand will increase as US refiners make more gasoline to supply summer fuel needs provided support for the prices.

In after hours acces trading, crude is trading at USD 66.89 per barrell up 2 cents on the Nymex.

Target India: Vodafone launches low cost handsets

2007-05-23T06:31:00.001+05:30

Even before Vodafone makes its entry into the Indian mobile market, the UK-based company has launched its first branded entry-level handsets priced between $25 and $45. The Vodafone branded handset has been launched aimed at the emerging and developing markets such as India.

"The Vodafone 125 and Vodafone 225 are part of Vodafone's ongoing commitment to expand access to mobile in emerging markets, where mobile technology and networks are often the only viable and cost effective telecom service. The handsets are therefore key to offering a range of services, particularly in rural areas where mobile penetration is often at its lowest," said a press release.

TV 18 group plans general entertainment channel

2007-05-23T06:30:00.002+05:30

The TV 18 group has decided to launch a general entertainment and infomercial channel, initially in India and eventually entering the West Asian, UK and US markets.

According to the plans, the Indian operations would be launched with an investment of around $13 million, funds for which would be routed through companies incorporated in the Cayman Islands and Cyprus, sources said.

The main company through which funds would be routed is Cyprus-based HSN Cyprus.

HSN Cyprus is a joint venture company between Cayman Islands-based Network 18 Holdings Ltd and Mauritius-based SAIF II Mauritius Company Ltd, a subsidiary of SB Asia Investment Fund II LP, which manages funds worth $643 million.