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Monday, May 25, 2009

Sensex from 1k to 21k : A HISTORY

1000, July 25, 1990
On July 25, 1990, the Sensex touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.

2000, January 15, 1992
On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.

3000, February 29, 1992
On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh.

4000, March 30, 1992
On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.

5000, October 8, 1999
On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election.

6000, February 11, 2000
On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006.

7000, June 20, 2005
On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capitaland IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time.

8000, September 8, 2005
On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading.

9000, November 28, 2005
The Sensex on November 28, 2005 crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors.

10,000, February 6, 2006
The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006.

11,000, March 21, 2006
The Sensex on March 21, 2006 crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points.

12,000, April 20, 2006
The Sensex on April 20, 2006 crossed the 12,000-mark and closed at a peak of 12,040 points for the first time.

13,000, October 30, 2006
The Sensex on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the Sensex to move from 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.

14,000, December 5, 2006
The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36 days for the Sensex to move from 13,000 to the 14,000 mark.

15,000, July 6, 2007
The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.

16,000, September 19, 2007
The Sensex scaled yet another milestone during early morning trade on September 19, 2007. Within minutes after trading began, the Sensex crossed 16,000, rising by 450 points from the previous close. The 30-share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.The Sensex finally ended with its biggest-ever single day gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at 4,732.

17,000, September 26, 2007
The Sensex scaled yet another height during early morning trade on September 26, 2007. Within minutes after trading began, the Sensex crossed the 17,000-mark . Some profit taking towards the end, saw the index slip into red to 16,887 - down 187 points from the day's high. The Sensex ended with a gain of 22 points at 16,921.

18,000, October 09, 2007
The BSE Sensex crossed the 18,000-mark on October 09, 2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market set several new records including the biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the worries of an impending election.

19,000, October 15, 2007
The Sensex crossed the 19,000-mark backed by revival of funds-based buying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670.

20,000, October 29, 2007
The Sensex crossed the 20,000 mark in just 14 days all because of huge FII's money inflows into large cap stocks making almost all of the to touch their highs. Index touched intraday high of 20,024 on the basis of DII's & Mutual Funds buying.
Huge buying in midcaps, small caps stocks like RNRL, RPL, ISPAT IND, IFCI etc

21,000, January 9, 2008
Sensex was in the range of 19,200 to 20,000 for 2 months and on 9th January 2008 the index touched to 21,000. This was on an excitment of Reliance Power IPO at Rs.440/sh.
Large caps such as Reliance Ind went to Rs.3050.50, Rel.Cap to Rs.2,695.50, Rel.Infra to Rs.2,654.35, Grasim Ind to Rs.3,400, Aditya Birla Nuvo to Rs.2,456.90.
The very next day Sensex touch to its all time high of 21,206.

On October 27, 2008 Sensex touched its lows of 7697.39 down 1003.68 points & Nifty at 2252.75 in intraday giving a closing of 8,509.56 down nearly 64% from its high due to global recession and selling pressures & 

MAY 18,2009 A two thousand point rally on the Sensex within sixty seconds was the day on which the world saw the largest intra day rise on any index anywhere in the world. The first time was after the Sensex hit the upper circuit, the second time it hit the upper circuit after two hours the roof almost came off!
SEBI had no choice but to suspend trading for the day. Investors were jubilant all day around the BSE.

Monday, May 18, 2009

18th May 2009 WILL BE AN GOLDEN MONDAY FOR THE INDIAN STOCK MARKET, THE FIRST EVER UPPER CIRCUIT

The 30-share Sensex closed 2,110.79 points or 17.34% higher at 14,284.21 and the Nifty surged 651.50 points or 17.74%, to settle at 4,323.15. It hit all 3 circuit limits in today's trade. The trading on both the BSE and the NSE was halted today as markets hit a 20% upper circuit after re-opening in trade. At the beginning of today's trade, 9:55 am, the markets were locked at 15% upper circuit and exchanges halted the trade for two hours. Total trade turnover Cash+ F&O was Rs. 3103 cr.
The Sensex has hit circuits on four occassions — including today — in the past five years.
However, on all three instances Sensex was locked at 10% lower circuit.
Jan 22, 2008: This was the latest instance, when the market hit 10% lower circuit. The reason for the down circut was subprime loss & dismal global markets cues.
Oct 17, 2007:The BSE Sensex crashed by 1743 points on 17 October 2007. The crash was led due to concerns of the Securities and Exchange Board of India (SEBI) issuing new guideline for P-Notes
May 17, 2004:The markets crashed 5 years back when the then incumbent National Democratic Alliance (NDA) alliance lost power during the general elections in 2004.
The UPA's (United Progressive Alliance) clean sweep win has cheered the markets and helped the benchmark indices to hit 20% upper circuit today.
The Sensex saw the 14,000 mark and the Nifty surpassed the 4,300 level for the first time since September 22, 2008.The Nifty May futures ended with 46.85 points premium.

Friday, May 15, 2009

STOCK EXCHANGE & AMBANI's

In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures. It was rumored that company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell Reliance shares, its being said that nearly 11 lakhs shares of Reliance were shorted on March 18, 1982 and stock went down from Rs.131 to Rs.121 in minutes. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange. Ambani through his known brokers indirectly bought more than 8,00,000 shares from that 11,00,000 shares sold by bear cartel. 

The Bear Cartel was acting on the belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the "Badla" trading system operative in the Bombay Stock Exchange. The bulls kept on buying and a price of Reliance went to Rs. 152 per share & was maintained till the day of settlement. On April 30, 1982, the day of settlement, the Bear Cartel was taken aback when the Bulls demanded a physical delivery of shares only. To complete the transaction, the much needed cash was provided to the stock brokers who had bought shares of Reliance, by none other than Dhirubhai Ambani. In the case of non-settlement, the Bulls demanded an "Undha Badla" (a penalty sum) of Rs. 25 - Rs. 35 per share. With this, the demand increased and the shares of Reliance shot above Rs. 180 in minutes. The settlement caused an enormous uproar in the market and Dhirubhai Ambani was the unquestioned king of the stock markets. He proved to his detractors just how dangerous it was to play with Reliance.

To find a solution to this situation, the Bombay Stock Exchange was closed for three business days. Authorities from the Bombay Stock Exchange (BSE) intervened in the matter and brought down the "Undha Badla" rate to Rs. 2.00/share with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it was also learnt that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of "The Bear Cartel's adventure". After this incident, many questions were raised by his detractors and the press. Not many people were able to understand as to how a yarn trader till a few years ago was able to get in such a huge amount of cash flow during a crisis period. The answer to this was provided by the then finance minister, Pranab Mukherjee in the parliament. He informed the house that a Non-Resident Indian had invested up to Rs. 22 Crore in Reliance during 1982-83. These investments were routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters.

Thursday, May 14, 2009

A few points discussed on Limited Liability Partnership

1. Liability of partners can go up to the extent of Capital contributed by him.
2. There are few legal/procedural requirements in LLP in comparison of The Companies Act.
3. Board meetings are not required in case of LLPs.
4. Under LLP, the profit distribution is flexible, i.e. A partner can be given any %age of profit irrespective of the capital contributed by him.
5. LLP CAN NOT be formed for a charitable purpose.
6. Any body corporate or Foreign company can be a partner in LLP.
7. An LLP/Foreign LLP can also be a partner in LLP.
8. A partnership firm CAN NOT be a partner in LLP.
9. In LLP, individual partners are not mandatory. Any two companies or two LLPs can also form an LLP.
10. At least 2 designated partners require DPIN. Its not mandatory for all partners to obtain DPIN, like in case of a company where it is mandatory for all directors to obtain DPIN.
11. DPIN is required for the designated partner even if he is having a DIN also.
12. Minimum 2 persons are required to form an LLP, but there is no restriction on the maximum number of persons.
13. In case, an individual and a company are the partners in LLP, then it shall be required for the company to nominate a designated partner other then the individual.
14. One designated partner is required to be Resident of India, and the conditions given in LLP Act for residential status have to be checked on the DATE OF APPOINTMENT only. Later on if these conditions are not fulfilled, even then that person can remain as designated partner.
15. Vacancy of any designated partner has to be filled within 30 days. If this vacancy is not filled in 30 days, then all the partners of LLP shall be treated as designated partners.
16. Incorporation document – Declaration in Incorporation document has to be given by an advocate/CA/CS/ICWA AND ONE SUBSCRIBER ALSO.
17. LLP has to be incorporated by the Registrar within 14 days, provided the documents are complete. Period can not be extended.
18. In case of a LLP, if any application of change in registered office is filed with the department, shall take effect from the DATE OF FILING OF FORM only. Means, it can not be changed with retrospective effect.
19. It has to be noticed that all invoices, documents etc of LLP has to bear the name of LLP, Address, and REGISTRATION NUMBER of LLP.
20. Unlike in partnership firms, the partner in LLP shall be treated as agent of LLP only, and not of other partners.
21. Accounts of LLP can be made either on CASH BASIS OR MERCANTILE BASIS. Hybrid system is not allowed.
22. Statement of Account and Solvency has to be filed within 6 months from the end of the financial year, whereas Annual return has to be filed within 60 days only.
23. Audit of LLP is mandatory by virtue of the LLP Act itself.
24. Loan by the partner is allowed in LLP.
25. Partner of LLP can do business with the LLP itself and can earn profits from LLP.
26. ALL OFFENCES UNDER LLP ACT SHALL BE TREATED AS CRIMINAL OFFENCES UNDER INDIAN PENAL CODE.

Friday, May 8, 2009

For the first time since October 2008 the benchmark Sensex of the Bombay Stock Exchange has closed beyond the 12,000. This achievement is not a sign of the fact that the country has came out of the worst economic storm in fifty years but its an indication that we’re at least getting there. Dalal Street can finally afford to give out a smile; restless traders can afford to wipe the sweat of their brow because the buyers are finally starting to return.
By no means should the last statement be interpreted as something which would lead someone to believe that a new bull market has been born .No, India is yet to reach that cornerstone just like the rest of the world.
By all indications it has become clearer that if a new global bull market has to start it has to first lay root in the BRIC countries.
The hectic activity on the Indian stock markets has resembled the highs and lows of a heart monitor. Many a time sellers have resorted to profit booking which has driven down the Sensex,a few months ago this was the predominant trend.
What we are now seeing is that when the sellers are making their move so are the buyers. The latter were reluctant a few months ago because everytime they tried to rally they were beaten down by the bears who were intent on profit booking alone.
Now that the impact of the recession has reduced just a little bit because governments have been pro active in making funding available, things are beginning to change.
The buyers are beginning to return and are slowly beginning to accept market risk. They’re willing to shell out their money towards investments. If over a period of time this trend continues then we can say that a bull market has indeed been born.
The Bombay Stock Exchange and the National Stock Exchange have both seen the return of FII’s.Moreover,the most encouraging fact about the recent spike in the Sensex has been due to the participation of the big Mutual Fund houses.
The very same institutions that pressed the ‘sell’ trigger a few months ago leading to a massive drop in the Sensex and the nifty.
What could spoil the party is the perception that this is only a ‘fake rally’. A phrase often used by bearish traders; it indicates that the situation is just as worse as before or getting even worse and this rally is just a sentimental one or a ‘rebound’. If indeed it’s true then it would be a sad event. The chances of this spike being a ‘fake rally’ are low but its possibility cannot be ruled out entirely.
It is now up to companies themselves to create an easy demand situation in the market. Now that the markets have cooled off they can concentrate on making sure that they break the last line of defense of a recessionary economy by making it easier for the consumer to get back to spending his money.
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