Nifty has reached a crucial level, The Stochastic has reached oversold level & the fast line is above slow line signalling upward move. We can try going long at this price of 5255 but we can have committed move above 5307.
Stocks to bet will be NELCO, Unitech, M&M, RPower & Essar Oil. We may hedge it with short position in ZEE below 293/-
The SL for Nity would be 5235
Tuesday, April 20, 2010
Thursday, April 15, 2010
Differential Voting Right (DVR)
SEBI has given nod for issue of Differential voting Rights, synonymn to different classes of shares in many developed countries.
Internationally such DVR trade at a discount to share price, but the dicount is not very steep. The discount is arount 5 % to 10 % in European countries & not more than 20 % in US.
These products if the voting rights are less , than the dividend is little higher or the returns are more sweetened than normal equity.
There are 2 companies listed companies who have issues shares with differential voting rights. They are TELCO & Pantaloon retail.
Both DVR has not performed in tandem with its share price, hence Investors who are bullish on underlying can bet on DVR as it will have lower downside.
It is not advisable to do arbitrage between DVR and underlying ie buy DVR & sell the stock futures, because the price discovery between CASH & DVR may take a longer time.
Guj NRE Coke has also decided to issue right DVR & Bonus DVR , but the dates are not fixed.
Internationally such DVR trade at a discount to share price, but the dicount is not very steep. The discount is arount 5 % to 10 % in European countries & not more than 20 % in US.
These products if the voting rights are less , than the dividend is little higher or the returns are more sweetened than normal equity.
There are 2 companies listed companies who have issues shares with differential voting rights. They are TELCO & Pantaloon retail.
Both DVR has not performed in tandem with its share price, hence Investors who are bullish on underlying can bet on DVR as it will have lower downside.
It is not advisable to do arbitrage between DVR and underlying ie buy DVR & sell the stock futures, because the price discovery between CASH & DVR may take a longer time.
Guj NRE Coke has also decided to issue right DVR & Bonus DVR , but the dates are not fixed.
Tuesday, March 23, 2010
Demerger of Regional channel from ZEE News
Regional channels are getting demerged from zee news and the same is getting mergered with zee tele.
The ratio of merger with zee is 19 : 4 ie the shareholer of Zee news will get 4 shares of Zee tele also he will own the shares of zee news which will have news channel in it.
I expect the base valuation of zee news after demerger to be Rs 20/-. Also the demerger date will be announced soon as the scheme is sanctioned by various courts.
There is an arbitrage opportunity between Zeenews & Zeetele as you can buy zee news befor bookclosure & sell zee tele futures.
Buy ZEE News 6650 62.50 415625
Sell ZEE tele futures -1400 265.00 371000
Residual cost of ZEE news 6650 44625
ie cost of each share is RS 6.72
and I value Zee news post demerger at Rs 20 /-
The ratio of merger with zee is 19 : 4 ie the shareholer of Zee news will get 4 shares of Zee tele also he will own the shares of zee news which will have news channel in it.
I expect the base valuation of zee news after demerger to be Rs 20/-. Also the demerger date will be announced soon as the scheme is sanctioned by various courts.
There is an arbitrage opportunity between Zeenews & Zeetele as you can buy zee news befor bookclosure & sell zee tele futures.
Buy ZEE News 6650 62.50 415625
Sell ZEE tele futures -1400 265.00 371000
Residual cost of ZEE news 6650 44625
ie cost of each share is RS 6.72
and I value Zee news post demerger at Rs 20 /-
Thursday, March 18, 2010
http://www.scribd.com/doc/28547966/Transitory-Prices-and-Portfolio-IBS-Paper-Jigam-Gandhi
The paper presented by me at IBS hyderabad on 12th & 13th March 2010.
The paper presented by me at IBS hyderabad on 12th & 13th March 2010.
Tuesday, March 16, 2010
Listing of NSE S&P Index Option on SGX
The Exchange & SEBI is gung-ho about its turnover being migrated to SGX NIFTY, It also understand that SGX nifty is the driver for opening prices on India Stock Exchange. In order to avoid price discovery being migrated overseas, SEBI mulled opening Equity markets one hour earlier.
But on other hand NSE entered into alliance with singapore stock exchange to list other india dominated index Futures & Options on SGX.
The paper said that it may list S&P Index in India, but it failed to report of NSE option listing on SGX, Also NSE press release used proper words to hide this development.
NSE knows very well that once the Nifty options are listed on SGX, FII positions on Nifty options will move to singapore, only big money will be able to earn from spreads between Nifty options & SGX nifty options. maybe foriegn money will help in better price discovery and maybe FII will have better say in market.
The volumes on Indian equities may shink & Once again NSE will increase the timing at 9 to 5.
Is this a strategy of NSE to diversify / derisk its volumes, as there is growing competition among exchanges in India specially when MCX is launching its own exchange.
No matter if the volumes gets diverted, NSE will earn fees from licensing, but what we will lose is volume &
government will lose STT. but FII would be invested in India dominated products only.
But on other hand NSE entered into alliance with singapore stock exchange to list other india dominated index Futures & Options on SGX.
The paper said that it may list S&P Index in India, but it failed to report of NSE option listing on SGX, Also NSE press release used proper words to hide this development.
NSE knows very well that once the Nifty options are listed on SGX, FII positions on Nifty options will move to singapore, only big money will be able to earn from spreads between Nifty options & SGX nifty options. maybe foriegn money will help in better price discovery and maybe FII will have better say in market.
The volumes on Indian equities may shink & Once again NSE will increase the timing at 9 to 5.
Is this a strategy of NSE to diversify / derisk its volumes, as there is growing competition among exchanges in India specially when MCX is launching its own exchange.
No matter if the volumes gets diverted, NSE will earn fees from licensing, but what we will lose is volume &
government will lose STT. but FII would be invested in India dominated products only.
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