Markets
Rumours
Last week was a painful market for traders as the fluctuation and volatility got narrower. At the end of the week, some relief to traders was witnessed as we saw a week-to-week net positive move.
Last week, the Sensex opened at 15390.15 attained a low at 15321.56 and moved to a weekly high of 15957.24 before it finally closed the week at 15807.64 and thereby showed a net rise of 467 points on week-to-week basis.
Weekly resistance will be at 16609, 16450 and 16705. Weekly support will be at 15433-15297, 14994 and 14789-14677.
On daily charts, important support is at 15300. A fall and close below 15300 will take the Sensex down to test the low of 14677 and could subsequently violate to make new low of the current falling leg from 21206. If the Sensex falls and closes below 14677, then expect a slide down to 14100-14000. The 0.382 level of the fall from 2594 to 21206 is placed at 14097.
Importantly, the Sensex must cross and close above all the weekly resistances. A close above 16500 can extend the pull back towards 16900 at least and to 17646 to an outer extent.
On the upside, the Sensex faces resistance at the 16,372 and 16,608 levels. It has support at the 15,699 and 15,332 levels. On the upside, the Nifty faces resistance at the 4899 and 5025 levels. The 4647 and 4482 are important support levels for the Nifty. Again 4820 is the major resistance. Only buy above this level. Above 4820 nifty lead upto 4880/4900.
After a sharp fall from 15 Jan 2008 to 21st Jan 2008, Nifty made a low of 4449. After that market tried to consolidate for more 3 months to pull down the averages on lower levels and waiting for opportunities to pick stocks on lower levels. A very long consolidation is always good for bull market. From last 7-8 sessions market is taking support near 4630- 50 levels, which is a very good Supports. On the other side Nifty Resistance line going down 8-10 points per day. So, at present 4911 is a Major resistance for Nifty. For the trading point of view Traders can go short near 4830-4850 levels with strict stop loss of 4930 as closing base for the target of 4650 levels. Below 4650 the next target is 4450 and Above 4930 very sharp move expected for the level of 5150-5200.
Last week, the Sensex opened at 15390.15 attained a low at 15321.56 and moved to a weekly high of 15957.24 before it finally closed the week at 15807.64 and thereby showed a net rise of 467 points on week-to-week basis.
Weekly resistance will be at 16609, 16450 and 16705. Weekly support will be at 15433-15297, 14994 and 14789-14677.
On daily charts, important support is at 15300. A fall and close below 15300 will take the Sensex down to test the low of 14677 and could subsequently violate to make new low of the current falling leg from 21206. If the Sensex falls and closes below 14677, then expect a slide down to 14100-14000. The 0.382 level of the fall from 2594 to 21206 is placed at 14097.
Importantly, the Sensex must cross and close above all the weekly resistances. A close above 16500 can extend the pull back towards 16900 at least and to 17646 to an outer extent.
On the upside, the Sensex faces resistance at the 16,372 and 16,608 levels. It has support at the 15,699 and 15,332 levels. On the upside, the Nifty faces resistance at the 4899 and 5025 levels. The 4647 and 4482 are important support levels for the Nifty. Again 4820 is the major resistance. Only buy above this level. Above 4820 nifty lead upto 4880/4900.
After a sharp fall from 15 Jan 2008 to 21st Jan 2008, Nifty made a low of 4449. After that market tried to consolidate for more 3 months to pull down the averages on lower levels and waiting for opportunities to pick stocks on lower levels. A very long consolidation is always good for bull market. From last 7-8 sessions market is taking support near 4630- 50 levels, which is a very good Supports. On the other side Nifty Resistance line going down 8-10 points per day. So, at present 4911 is a Major resistance for Nifty. For the trading point of view Traders can go short near 4830-4850 levels with strict stop loss of 4930 as closing base for the target of 4650 levels. Below 4650 the next target is 4450 and Above 4930 very sharp move expected for the level of 5150-5200.
Rumours
Nano to Jaguar will drive Tata Motors
Reliance to offer from oil to milk
Nestle is very safe bet in FMCG
3M India has huge product portfolio
Go for a long drive with Hero Honda
Rumors of mergers of RIL and RPL and offer of 20:1 shares
Italian company’s open offer to Hind Oil : HNI eyes on Praj engineering
Plethico Pharma’s Dubai connection : XL Tele bags order worth Rs. 154 crore
Investors rush to purchase stocks of IL&FS : Dabar to take personal care
Indication of Bull Run in Idea : Target price of L & T is set at Rs. 4000
Madras Cement to provide sound return : Unity Infra to see huge buying
Stock News (Super Stocks )Reliance to offer from oil to milk
Nestle is very safe bet in FMCG
3M India has huge product portfolio
Go for a long drive with Hero Honda
Rumors of mergers of RIL and RPL and offer of 20:1 shares
Italian company’s open offer to Hind Oil : HNI eyes on Praj engineering
Plethico Pharma’s Dubai connection : XL Tele bags order worth Rs. 154 crore
Investors rush to purchase stocks of IL&FS : Dabar to take personal care
Indication of Bull Run in Idea : Target price of L & T is set at Rs. 4000
Madras Cement to provide sound return : Unity Infra to see huge buying
The pendulum swings are on. The way the market is behaving and may unfold tomorrow is developing a predictable pattern. Do not trust the big fall nor get carried away by that rise. Analysts are busy calculating how deep the benchmark shall dip and how long shall the pain last. Despite all this, some scrips were singularly good or bad and the price movements in them were independent of the prevailing market mood or sentiment.
Orchid Chemicals, the pharma company from the South, was badly caught in the Bear & Stearns sell-off. Its Managing Director, K. Raghavendra Rao, who currently holds 17% stake, is a weak stakeholder after incurring a loss of over Rs.75 cr. in stock value in the sell-off. Ranbaxy has already purchased over 9% of Orchid through its group company, Solrex Pharma. No wonder, Orchid jumped to Rs.240 from a fortnight back low of Rs.106.50 even though the market was volatile, swinging large ups and downs.
The company produces chemicals and drugs. Ranbaxy is ready to buy the stake in the Orchid Chemicals at the cost of Rs. 985 crores. Consolidated turnover of the company in first nine month of FY 2007- 08 is Rs. 908.5 crores. During FY 2006-07 operating profit of the company has increased by 11.7 per cent and reached the level of 28 per cent. Patent right periods of
many Anti bacterial drug ends in Fy 2009-10, which provide Aurobindo Pharma to market the same with prior approval at world level. The stock price of the company has moved up by 37 per cent during last three sessions. Considering the earning prospects of the company investo can invest in the scrip to reap good profit in long run.
Ranbaxy, the Indian pharma major, encashed on this God given opportunity and is likely to increase its stake to just 14% to avoid the open offer. It makes great sense for it to acquire Orchid at a P/E multiple of 8 against the industry’s P/E multiple of 17. Orchid’s Cephalosporin and other formulations give Ranbaxy a chance to consolidate its anti-biotic range further.
With the Orchid promoter unwilling to handover control and taking the fight to the finish means that some more fireworks are likely in this counter.
The moral of the story is that Mr. Rao would have been better off managing the company rather than dabbling in the F&O trading of his own company. Orchid’s share price would have moved northwards even otherwise on its own molecule and formulations portfolio.
Bharat Forge, the stellar performer from the Kalyani stable is believed to have acquired 89% stake in a French forging company, Groupe Sifcor. This acquisition will give Bharat Forge an entry into the French automotive market and give it an exposure to clients like PSA Citreon and Renault. Little wonder, the scrip picked up a neat 5% in value despite the ups and downs in the market.
Welspun Gujarat (Rs. 390.00) (Code 532144) :- Oil And gas demand is constantly increasing at world level, which has compelled oil companies to lay a pipeline network around the country, connecting one area with another area. The development has proved to be an advantage of the company having good rapport with oil and gas companies at international level. The wellspun Gujarat is likely to reap reach benefit from the development. The company is expected to reap benefit from three sources.
During the quarter ended in Dec. 2007 the company has earned net profit of Rs. 97.4 crores from the sale of Rs. 1036 crores. The EPS of the company has reached the level of Rs. 5.7. Forward PE Multiple of company is 11.3 And 6.2 in comparison to the present price level. Investors, who afford to forget the money for two to three year after investment have good opportunity to earn sound profit.
BASF INDIA (Rs. 204.60) (Code 500042) :- The company is into agro chemicals and fine chemicals for food, pharma, animal feed and cosmetics. It is also into leather chemicals, tanning agents, textile chemicals and polymer dispersion.BASF India, a partof $66 billion BASFGroup, has more than17 years of payingdividends consistently. Sales grew 3 per cent to Rs 714 crore while net profit grew to Rs 55 crore at a faster rate of 18 per cent.For March 2008, we expect sales in the region of Rs 904 crore and net profit in the region of Rs 58.48 crore The company has equity capital of Rs 28.19 crore, giving FY08 projected earnings of Rs 20.74. The current market price of Rs 186 discounts the same by 8.97 time. Don't be surprised if the company declares dividend in the range of 85 per cent this year. grab the opportunity.
TATA CHEMICAL (Rs. 329.00) (Code 500770) :- Tata Chemicals has successfully completed the acquisition of General Chemical Industrial Products Inc. Tata chem has become the second largest soda ash player in the world after Solvay. To finance the acquisition TCL will raise $850 million through debt and the rest will be through internal accruals. As a result of acquisition, TCL will now garner larger share of the global soda ash market going ahead. On the valuation front, the CMP of Rs 311 discounts itsFY08E earnings by 13.25x. Even the dividend yield of 2.60 per cent makes the counter a better buy .High rate of the stock is rs 431 and low is Rs.202.
MOSER BEAR (Rs. 167.00) (Code 517140) :- Moser Baer is a world leader in the development and manufacture of removable data storage media. It is also into the business of global photo voltaic and solar power markets, MBPV has signed a MoU with a leading global equipment supplier to secure supply of critical equipment for a 565 MW phased expansion of its Thin Film Photovoltaic modules manufacturing capacity, which together with the current project capacity of 40 MW will take the total manufacturing capacity to over 600 MW by 2010. Current level the stock is trading at a P/E of 26x (standalone). Aurobindo Pharma (Rs. 302.00) (Code 524804) :-The Hyderabad based Aurobindo Pharma has sound product portfolio of 250 products in 6 different therapeutic category, which include Antibiotic, Retroviral, Cardiovascular systems, Central nervous system, Gastro entrologicals and Anti allergy. The company’s net profit continuously moving up from Fy2005-06. It has reached the level of 18 per cent this FY. Looking at the past progress of the company profil level is likely to go up. During FY 2008-09 topline of company is expected to reach Rs. 2400 crores and bottomline to touch the level of Rs. 216 crores. The stock trades at Rs. 302.00 current market, which is around eight time lower than the estimated EPS of FY 2008-09. Thus investment in the scrip is expected to provide good return.
HUL, a market leader in its 75th year dedicates itself to remain as dedicated, relevant and strong over the next 75 years too. Devising a five fold strategy of growth, the company plans a quantum jump in revenues as well as becoming more responsive to social changes. Banking stocks under the leadership of ICICI Bank, HDFC Bank and BoI did manage to dodge the volatility in the Sensex successfully. The rally in banking may sustain if the RBI does no increase the interest rates and inflation is handled by managing the supply side and controlling commodity prices. This hope has given a new impetus to banking stocks!
JP Hydro Ltd.’s 200 MW hydro-power plant at an investment of Rs.25,000 cr. in Arunachal Pradesh by 2016 may be the most expensive project calculated on a per MW basis. But its cost is high considering the length of the project as it has factored in a cost escalation of about 5% p.a. and also accounts for a huge interest pay out at about 12% p.a. These two factors along have brought about a cost burden of Rs.12,000 cr. into the project cost.
Its first hydro-power plant with a capacity to generate 1000 MW of electricity in Himachal Pradesh by 2010 has an outlay of Rs.5,500 cr. JP Hydro has signed a power purchase agreement (PPA) with Power Trading Corporation (PTC) to sell the electricity so generated. With these two mega projects under its belt and a 600 MW power project in Arunachal Pradesh and two more in Meghalaya with a combined capacity of 1000 MW, it joins the big league.
Orchid Chemicals, the pharma company from the South, was badly caught in the Bear & Stearns sell-off. Its Managing Director, K. Raghavendra Rao, who currently holds 17% stake, is a weak stakeholder after incurring a loss of over Rs.75 cr. in stock value in the sell-off. Ranbaxy has already purchased over 9% of Orchid through its group company, Solrex Pharma. No wonder, Orchid jumped to Rs.240 from a fortnight back low of Rs.106.50 even though the market was volatile, swinging large ups and downs.
The company produces chemicals and drugs. Ranbaxy is ready to buy the stake in the Orchid Chemicals at the cost of Rs. 985 crores. Consolidated turnover of the company in first nine month of FY 2007- 08 is Rs. 908.5 crores. During FY 2006-07 operating profit of the company has increased by 11.7 per cent and reached the level of 28 per cent. Patent right periods of
many Anti bacterial drug ends in Fy 2009-10, which provide Aurobindo Pharma to market the same with prior approval at world level. The stock price of the company has moved up by 37 per cent during last three sessions. Considering the earning prospects of the company investo can invest in the scrip to reap good profit in long run.
Ranbaxy, the Indian pharma major, encashed on this God given opportunity and is likely to increase its stake to just 14% to avoid the open offer. It makes great sense for it to acquire Orchid at a P/E multiple of 8 against the industry’s P/E multiple of 17. Orchid’s Cephalosporin and other formulations give Ranbaxy a chance to consolidate its anti-biotic range further.
With the Orchid promoter unwilling to handover control and taking the fight to the finish means that some more fireworks are likely in this counter.
The moral of the story is that Mr. Rao would have been better off managing the company rather than dabbling in the F&O trading of his own company. Orchid’s share price would have moved northwards even otherwise on its own molecule and formulations portfolio.
Bharat Forge, the stellar performer from the Kalyani stable is believed to have acquired 89% stake in a French forging company, Groupe Sifcor. This acquisition will give Bharat Forge an entry into the French automotive market and give it an exposure to clients like PSA Citreon and Renault. Little wonder, the scrip picked up a neat 5% in value despite the ups and downs in the market.
Welspun Gujarat (Rs. 390.00) (Code 532144) :- Oil And gas demand is constantly increasing at world level, which has compelled oil companies to lay a pipeline network around the country, connecting one area with another area. The development has proved to be an advantage of the company having good rapport with oil and gas companies at international level. The wellspun Gujarat is likely to reap reach benefit from the development. The company is expected to reap benefit from three sources.
During the quarter ended in Dec. 2007 the company has earned net profit of Rs. 97.4 crores from the sale of Rs. 1036 crores. The EPS of the company has reached the level of Rs. 5.7. Forward PE Multiple of company is 11.3 And 6.2 in comparison to the present price level. Investors, who afford to forget the money for two to three year after investment have good opportunity to earn sound profit.
BASF INDIA (Rs. 204.60) (Code 500042) :- The company is into agro chemicals and fine chemicals for food, pharma, animal feed and cosmetics. It is also into leather chemicals, tanning agents, textile chemicals and polymer dispersion.BASF India, a partof $66 billion BASFGroup, has more than17 years of payingdividends consistently. Sales grew 3 per cent to Rs 714 crore while net profit grew to Rs 55 crore at a faster rate of 18 per cent.For March 2008, we expect sales in the region of Rs 904 crore and net profit in the region of Rs 58.48 crore The company has equity capital of Rs 28.19 crore, giving FY08 projected earnings of Rs 20.74. The current market price of Rs 186 discounts the same by 8.97 time. Don't be surprised if the company declares dividend in the range of 85 per cent this year. grab the opportunity.
TATA CHEMICAL (Rs. 329.00) (Code 500770) :- Tata Chemicals has successfully completed the acquisition of General Chemical Industrial Products Inc. Tata chem has become the second largest soda ash player in the world after Solvay. To finance the acquisition TCL will raise $850 million through debt and the rest will be through internal accruals. As a result of acquisition, TCL will now garner larger share of the global soda ash market going ahead. On the valuation front, the CMP of Rs 311 discounts itsFY08E earnings by 13.25x. Even the dividend yield of 2.60 per cent makes the counter a better buy .High rate of the stock is rs 431 and low is Rs.202.
MOSER BEAR (Rs. 167.00) (Code 517140) :- Moser Baer is a world leader in the development and manufacture of removable data storage media. It is also into the business of global photo voltaic and solar power markets, MBPV has signed a MoU with a leading global equipment supplier to secure supply of critical equipment for a 565 MW phased expansion of its Thin Film Photovoltaic modules manufacturing capacity, which together with the current project capacity of 40 MW will take the total manufacturing capacity to over 600 MW by 2010. Current level the stock is trading at a P/E of 26x (standalone). Aurobindo Pharma (Rs. 302.00) (Code 524804) :-The Hyderabad based Aurobindo Pharma has sound product portfolio of 250 products in 6 different therapeutic category, which include Antibiotic, Retroviral, Cardiovascular systems, Central nervous system, Gastro entrologicals and Anti allergy. The company’s net profit continuously moving up from Fy2005-06. It has reached the level of 18 per cent this FY. Looking at the past progress of the company profil level is likely to go up. During FY 2008-09 topline of company is expected to reach Rs. 2400 crores and bottomline to touch the level of Rs. 216 crores. The stock trades at Rs. 302.00 current market, which is around eight time lower than the estimated EPS of FY 2008-09. Thus investment in the scrip is expected to provide good return.
HUL, a market leader in its 75th year dedicates itself to remain as dedicated, relevant and strong over the next 75 years too. Devising a five fold strategy of growth, the company plans a quantum jump in revenues as well as becoming more responsive to social changes. Banking stocks under the leadership of ICICI Bank, HDFC Bank and BoI did manage to dodge the volatility in the Sensex successfully. The rally in banking may sustain if the RBI does no increase the interest rates and inflation is handled by managing the supply side and controlling commodity prices. This hope has given a new impetus to banking stocks!
JP Hydro Ltd.’s 200 MW hydro-power plant at an investment of Rs.25,000 cr. in Arunachal Pradesh by 2016 may be the most expensive project calculated on a per MW basis. But its cost is high considering the length of the project as it has factored in a cost escalation of about 5% p.a. and also accounts for a huge interest pay out at about 12% p.a. These two factors along have brought about a cost burden of Rs.12,000 cr. into the project cost.
Its first hydro-power plant with a capacity to generate 1000 MW of electricity in Himachal Pradesh by 2010 has an outlay of Rs.5,500 cr. JP Hydro has signed a power purchase agreement (PPA) with Power Trading Corporation (PTC) to sell the electricity so generated. With these two mega projects under its belt and a 600 MW power project in Arunachal Pradesh and two more in Meghalaya with a combined capacity of 1000 MW, it joins the big league.
Tower Talks
*Traders and speculators can buy Aventis Pharma with a stop loss of Rs.775 and a target price of Rs.860.
* Micro Technologies has launched Micro LNTS (Lost Notebook Tracking System), which can locate stolen laptops from any corner of the world leveraging the World Wide Web. Keep accumulating the scrip at declines.
* Something is cooking in Selan Exploration. The scrip has shot up 70% in couple of weeks on the back of serious buying by some smart cookie.
* Vakrangee Software is betting more on private sector orders rather than the government sector, which implies a better discounting to the scrip. The scrip looks strong technically as well.
* This is the best time to accumulate SEAMEC at such cheap valuation. Its fourth vessel SEAMEC-Princess has been deployed for the next 18 months at a charter rate of more than $70,000 per day. Simply buy and hold for handsome returns.
* Fortis Healthcare is on a consolidation spree inviting private equity (PE) players to part fund its expansion plan in the disgnostic chain.
* The Goa festival of media planners acknowledges the increased clout of the TV medium boosting the prospects of NDTV and TV18.
* Realty stocks have yet to complete the correction. Inflation may spook the balloon in realty stocks.
* ABB, BHEL, Siemens, Areva T&D and Alstom Projects are identified by a foreign fund for investments in power generation.
* BHEL along with Areva T&D and NTPC are working on a nuclear energy project which marks their foray into atomic energy.
* Arvind Mills has come out from the thirties range after a long time. This breakout may take it to Rs.50 plus in the next round of the rally.
* IndBank Merchant Banking is available at attractive valuations and is fancied for its holdings in unlisted stocks. A fair buy at current levels.
* Q4 results of companies may be affected by high steel prices and inflation. Hence all short-term investments need to be carefully undertaken.
* Bodal Chemicals with 20% interim dividend is an attractive buy for the medium-term.
* ANG Auto is an auto stock available at cheap valuations but full of value.
* Orchid Chemicals is hovering around Rs.230 levels uncertain of the takeover story. But even at current levels it is available at attractive valuations.
*Traders and speculators can buy Aventis Pharma with a stop loss of Rs.775 and a target price of Rs.860.
* Micro Technologies has launched Micro LNTS (Lost Notebook Tracking System), which can locate stolen laptops from any corner of the world leveraging the World Wide Web. Keep accumulating the scrip at declines.
* Something is cooking in Selan Exploration. The scrip has shot up 70% in couple of weeks on the back of serious buying by some smart cookie.
* Vakrangee Software is betting more on private sector orders rather than the government sector, which implies a better discounting to the scrip. The scrip looks strong technically as well.
* This is the best time to accumulate SEAMEC at such cheap valuation. Its fourth vessel SEAMEC-Princess has been deployed for the next 18 months at a charter rate of more than $70,000 per day. Simply buy and hold for handsome returns.
* Fortis Healthcare is on a consolidation spree inviting private equity (PE) players to part fund its expansion plan in the disgnostic chain.
* The Goa festival of media planners acknowledges the increased clout of the TV medium boosting the prospects of NDTV and TV18.
* Realty stocks have yet to complete the correction. Inflation may spook the balloon in realty stocks.
* ABB, BHEL, Siemens, Areva T&D and Alstom Projects are identified by a foreign fund for investments in power generation.
* BHEL along with Areva T&D and NTPC are working on a nuclear energy project which marks their foray into atomic energy.
* Arvind Mills has come out from the thirties range after a long time. This breakout may take it to Rs.50 plus in the next round of the rally.
* IndBank Merchant Banking is available at attractive valuations and is fancied for its holdings in unlisted stocks. A fair buy at current levels.
* Q4 results of companies may be affected by high steel prices and inflation. Hence all short-term investments need to be carefully undertaken.
* Bodal Chemicals with 20% interim dividend is an attractive buy for the medium-term.
* ANG Auto is an auto stock available at cheap valuations but full of value.
* Orchid Chemicals is hovering around Rs.230 levels uncertain of the takeover story. But even at current levels it is available at attractive valuations.
Mutual Fund
ICICI Prudential Focused Equity Fund
(Minimum Investment – Rs.5000, Entry Load – 2.25% below Rs.5 cr.)
NFO Dates: April 8, 2008 to May 7, 2008.
Scheme Objective: ICICI Prudential Focused Equity Fund seeks to generate long term capital appreciation and income distribution to unit holders from a portfolio that is invested predominantly in equity and equity related securities of about 20 companies and the balance in debt securities and money market instruments. If the total assets under management in this scheme goes above Rs.1000 cr. the Fund Manager reserves the right to increase the number of companies to more than 20.
Analysis: The scheme has large cap orientation, which is an attractive proposition as it plans to invest in profitable companies which are leaders in the industries in which they operate. The other criteria is that these companies should have rapid growth potential over the next 3 to 5 years and a track record of superior proven management and solid balance sheets. Moreover, with the recent market corrections large caps will be the first ones to rise in case the market rebounds as liquidity is expected to flow in here initially.
Further, it also intends investing in depository receipts including American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), debt securities convertible into common shares, preference shares and warrants. However, this may enhance the risk of this scheme significantly for retail investors as the currency factor would also come into play.
The entry load is extremely high at 2.25%. Add to it the management and other expenses and the scheme becomes costly.
Recommendation: While large cap stocks may be attractive picks at the current market levels, diversification and sector exposure will have to be monitored. Investors may wait and watch as this is an open-ended scheme before taking a plunge as in the backdrop of the current market volatility, they may be able to get in at a lower rate.
ICICI Prudential Focused Equity Fund
(Minimum Investment – Rs.5000, Entry Load – 2.25% below Rs.5 cr.)
NFO Dates: April 8, 2008 to May 7, 2008.
Scheme Objective: ICICI Prudential Focused Equity Fund seeks to generate long term capital appreciation and income distribution to unit holders from a portfolio that is invested predominantly in equity and equity related securities of about 20 companies and the balance in debt securities and money market instruments. If the total assets under management in this scheme goes above Rs.1000 cr. the Fund Manager reserves the right to increase the number of companies to more than 20.
Analysis: The scheme has large cap orientation, which is an attractive proposition as it plans to invest in profitable companies which are leaders in the industries in which they operate. The other criteria is that these companies should have rapid growth potential over the next 3 to 5 years and a track record of superior proven management and solid balance sheets. Moreover, with the recent market corrections large caps will be the first ones to rise in case the market rebounds as liquidity is expected to flow in here initially.
Further, it also intends investing in depository receipts including American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), debt securities convertible into common shares, preference shares and warrants. However, this may enhance the risk of this scheme significantly for retail investors as the currency factor would also come into play.
The entry load is extremely high at 2.25%. Add to it the management and other expenses and the scheme becomes costly.
Recommendation: While large cap stocks may be attractive picks at the current market levels, diversification and sector exposure will have to be monitored. Investors may wait and watch as this is an open-ended scheme before taking a plunge as in the backdrop of the current market volatility, they may be able to get in at a lower rate.
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