Friday, 21 July 2017

Reliance Jio Phone 4G mobile launched - Bad days ahead for Airtel and idea ?

Reliance Jio Phone 4G mobile launched. Bad days ahead for  Airtel , Dish Tv or do they have something up their sleeve ?
Reliance Jio today announced the launch of its much rumoured 4G feature phone, which is named as JioPhone. Along with that it has announced its cable TV device. The JioPhone will be available for free but buyers will have to deposit a fee of Rs 1500 which will be refundable after three years on returning the phone. This means the phone will be available at an effective price of zero. JioPhone will be available for beta testing this 15th August, while pre booking will start from 24th August; physically it will available from September this year.
 

JioPhone

Price and data plans:

1. Reliance Industries Limited chairman Mukesh Ambani on Friday announced the JioPhone, a 4G VoLTE feature phone which he called ‘India ka Smartphone’.
2. The JioPhone’s effective price is Rs 0. This means, you can buy the phone at Rs 1500, which will be refunded after 3 years.
3. The phone is a feature phone, but with a larger screen, access to apps and of course 4G data and 4G VoLTE calls and will effectively cost the customer Rs 0 for the device.
4. JioPhone users will have to pay just Rs 153 a month, including the cost of the phone. There will be a weekly plan of Rs 54 and a two-day plan of Rs 24 with all the same features.
Features:
5. The highlight of this phone is the 4G VoLTE, it has a voice command interface, and comes pre-loaded with Jio’s apps loaded on it.
6. JioPhone has 2.4-inch display, and can play the JioCinema app as well. So users can watch movies on this feature/smartphone smash.
7. It has an SOS feature as well, which can be activated by pressing 5. There is support for NFC that enables quick payments, and the ability to cast content.
Availability and date of sale:
8. The phone will be available for beta testing from August 15 and for prebooking from August 24.
9. The phones will be available for sale at a first come, first serve basis from the last quarter of 2017. The target is to make 5 million phones available every week.
10. The JioPhone will always have free voice calls. From August 15, the JioPhone will come with free unlimited data.

Made in India JioPhone:

11. The phone has been created by Indian engineers for an Indian audience.

Other things to know:

12. The phone will offer an innovative cable link to television to help users view content on a big screen at home. Users will need to buy the Jio Dhan Dhana Dhan package of Rs 309 to get the extra data needed for this.
13. The phone also responds to voice commands, which is unprecedented for a feature phone anywhere in the world.
14. Jio will be the greatest accelerator of the Bharat-India connectivity, said Mukesh Ambani.
15. Mukesh Ambani declared 15th August 2017, as ‘DIGITAL FREEDOM’ for all feature phone users with JioPhone.

JioPhone is bad news for Bharti Airtel, Idea Cellular , Dish TV , Hathway cable and shilpi cable 

 



Thursday, 29 June 2017

GST EXPLAINED IN LAYMAN WORDS

Meaning of GST
GST is abbreviation for Goods and Service Tax. GST is also known as Value Added Tax (VAT) in few countries.
GST / VAT is a consumption based tax wherein the basic principle is to tax the value addition at the each business stage. To achieve this, tax paid on purchases is allowed as a set off/ credit against liability on output/income.
GST is levied on all transaction of goods and services. Thus, in principle, GST should not differentiate between ‘goods’ and ‘services’.
For Example:
Stage 1 (Manufacturer)
Imagine a manufacturer of Trouser . He buys raw material or inputs — cloth, thread, buttons, tailoring equipment — worth Rs 100 a sum that includes a tax of Rs 10. With these raw materials, he manufactures a trouser
In the process of creating the trouser, the manufacturer adds value to the materials he started out with. Let us take this value added by him to be Rs 30. The gross value of his good would, then, be Rs 100 + 30, or Rs 130.
At a tax rate of 10%, the tax on output (trouser) will then be Rs 13. But under GST, he can set off this tax (Rs 13) against the tax he has already paid on raw material/inputs (Rs 10). Therefore, the effective GST incidence on the manufacturer is only Rs 3 (13 – 10).
Stage 2 (Manufacturer to Wholesaler)
The next stage is that of the good passing from the manufacturer to the wholesaler. The wholesaler purchases it for Rs 130, and adds on value (which is basically his ‘margin’) of, say, Rs 20. The gross value of the good he sells would then be Rs 130 + 20 — or a total of Rs 150.
A 10% tax on this amount will be Rs 15. But again, under GST, he can set off the tax on his output (Rs 15) against the tax on his purchased good from the manufacturer (Rs 13). Thus, the effective GST incidence on the wholesaler is only Rs 2 (15 – 13).
Stage 3 (Wholesaler to Retailer)
In the final stage, a retailer buys the trouser from the wholesaler. To his purchase price of Rs 150, he adds value, or margin, of, say, Rs 10. The gross value of what he sells, therefore, goes up to Rs 150 + 10, or Rs 160. The tax on this, at 10%, will be Rs 16. But by setting off this tax (Rs 16) against the tax on his purchase from the wholesaler (Rs 15), the retailer brings down the effective GST incidence on himself to Re 1 (16 –15).
Thus, the total GST on the entire value chain from the raw material/input suppliers (who can claim no tax credit since they haven’t purchased anything themselves) through the manufacturer, wholesaler and retailer is, Rs 10 + 3 +2 + 1, or Rs 16.
To conclude in GST regime there will be “NO TAX ON TAX and there will be seamless credit of tax available at each value addition of business stage



Tax Rates Before And After GST



Toothpaste, Branded Cereals May Cost More


Rates Up For Mobile Phones, Refrigerators





Shampoos, Perfumes May Cost More

Higher Rate On Electric Hot Plates

Wallpaper, Paints In Highest Slab

Fresh Milk, Vegetables Exempt


No Tax On Condoms

Lower Tax On Kerosene

Plastic Products To Cost More

Eating Out, Phone Calls Costlier



Saturday, 10 June 2017

How to Pick Profitable Stocks ?

Stock selection

In Indian Stock market, a disciplined stock selection strategy is very are important for an investor to grow his personal wealth drastically. Investors stock picking strategies depend upon some factors which includes the performance of company, market and industry trends, and share prices.

Pick Profitable Stocks

Let us simplify for you some of the best stock picking strategies based on different investing style.

Investing for Growth

In this strategy, you need to focus on fast growing companies, which are showing major increase in revenues and profits. This kind of investors who focus on this strategy intend on making money from the significant increase in the share prices of companies they decide to invest.

Returns from growth stocks

The returns from growth stocks are largely higher than that of other type of stocks. Though, the risks involved in this type of stocks are high as compared to others. This type of investors pick young and fast-growing companies, regardless of the expensiveness of these stocks, as the investors bet on the future growth potential of the companies. The fundamental idea of growth investing may differ from industry to industry and company to company.

Investing in Value Stocks

This kind of strategy is different to growth investing mentioned above. These investors focus on stocks, which are trading below their intrinsic values. Value investors look into the fundamentals of the companies cautiously and they believe that the market undervalues these stocks.

Value investing

Value stocks are comparatively cheaper to the net asset value (NAV) of their respective companies. Value investing does not mean to pick a cheap stock, rather investing in undervalued stocks that have good growth potential.

GARP Investing Strategy

GARP (Growth At Reasonable Price) Investing Strategy, is a mixture of value investing and growth investing strategies. Through GARP investing strategy, an investor focus on stocks that are reasonably priced, at the same time possess robust growth potential.
In other words GARP investors do not go for high growth stocks that have high risks or cheaply priced stocks, which are in problem. So, GARP investors avoid expensive high-growth stocks. The significant barometer for GARP investors is PEG ratio, which is PE ratio divided by growth.

Fundamental Analysis of Stocks

Using Fundamental analysis, an investor or analyst tries to estimate the intrinsic value of a stock based on fundamentals. Although this strategy takes more time and effort, it is appropriate for long-term investors.

Earning trends

With fundamental analysis, an investor try to understand the earning trends of a company and expected earnings in the future, rather than market sentiments. Further more than earnings and revenues, investors also focus on factors such as, ROIC (Return On Invested Capital), ROE (Return on Equity), cash flows and P/E ratio etc. Many Indian Business magazines are available with all of these factors for each company.

Using Technical Analysis to Pick stocks

Technical analysis ( chart analysis), is an investing strategy through which investors weigh the future price movement of a stock through past performance. Technical analysis mainly depends upon the demand and supply of the particular stock and trading volumes.

Intrinsic value stock

Technical analysis is quite contrary to fundamental analysis. Technical analysts do not bother much about the intrinsic value stock.
Regardless of the advantages and disadvantages of the above-mentioned stock picking strategies, many investors are making millions irrespective of the strategies they choose.
Always an investor’s choice of a particular strategy should depend upon his/her knowledge about the market, industry trends and growth potential of companies. Most important is investors devotion of time and risk calculation capabilities play major role in choosing a particular stock picking technique.
A mixture of above strategies to fine tune and pick the winning stocks works the best in Indian Stock markets.

Thursday, 11 May 2017

Why is promoter holding in a stock so important factor in choosing a stock?

This is because the promoter to a company is like the father to a daughter.

A company is an artificial person created by law and the person responsible for incorporating it is the promoter.

A promoter works so hard to get the company incorporated and he knows that once the company goes public, it won't be his company alone, in the similar way as the father knows that the daughter would leave him one day.

Having said that, if a shareholder sees the trust and vision of a promoter in the company he wants to invest in, he is in the same ship as the promoter is in.

A promoter generally holds a major portion of the company's capital and he put out his heart for the sake of his company. If a promoter is credible, so will be the company (not generalising). As like the father, like the daughter.

Say for that matter, if someone as charismatic and visionary as Narayan Murthy is the promoter of Infosys, then of course the shareholder would prima facie trust the vision of the promoter too.

To sum up, a promoter is the face of the company. In fact people misunderstand promoter as the sole owner of the company. When someone talks about RelianceIndustries Ltd, the first face which comes is of Mukesh Ambani. Similarly, for Reliance communication, it is Anil Ambani.




Hence, one would be interested to buy shares of Reliance industries rather than reliance communication just based on the track record of the promoters.


For the very same reason people who bought the shares of the company based on the trust of the promoter will start selling the same if the promoter starts selling as they will believe now that the promoter is himself questioning the company's performance.

So what made the price decline?
Promoters are the person who initially started a company. Now if the real owners are selling their holdings, its create a environment that something going wrong with company.
The person who were managing company from the day it started are selling shares. So it may be possible that in future some thing will go wrong with company.
This mentality among traders make them sell share of that company which leads to decline in price.
You can check the promoter's details from
http://www.bseindia.com/

Friday, 7 April 2017

Why does any company in the stock market give a 1:1 bonus or a 2:3 bonus?

Suppose you want to open a shop of kid's garment for premium segment.
And total investment is Rs 20 lacs. You have only Rs 10 lacs take Rs 10 lacs from your friends as capital, rather than loan. 
When you give share capital to others it means they will have equal profits as per their proportion of share capital.

After 3 years of start you have earned Rs 20 lacs profits in last 3 years. Now you feel you should give back some profits to your shareholders as reward.

Option 1 - Dividend- First option is to pay them profits in cash which technically means giving dividend. But this has one problem. You have to take cash from the business and pay out. If you want to pay complete Rs 20 lac's as dividend,you have to take 20 lac's out of business and pay. banks will also not lend to pay this.


Option 2- Bonus shares- Other option is you issue them more shares, but now without any money coming from them. They will get free shares as bonus. 
Benefit of issuing a bonus share is that you will be not required to pay cash out of the business funds and your shareholders will also be happy as they have got more shares.

They will go to market and sell those bonus shares to anybody and encash the amount. 

Many companies give bonus shares instead of dividends to save cash flow out of business on one side and rewarding shareholders on other side

Many times, when some company makes some non regular gains in any year, they normally go with this route of rewards.

There is no legal complusion to issue shares. Normally companies with good intentions to reward their shareholders in big manner, takes this stance





Ratio of bonus is directed by how many new shares a company wants to issue.
For example, a Company's Equity Capital comprises 1 Cr shares (of Rs. 10 each), and it wants to double the number of shares, it would issue a 1:1 Bonus. 
If they want to quadruple the number of shares, it would issue a 3:1 Bonus. Some points to note:



1. A Bonus issue (in any ratio) does not increase a company's Net-worth (Capital plus Reserves). In a Bonus, part of reserves are used to issue new shares

2. A Bonus also does not increase the Market Capitalization (worth on markets). Of course, a Bonus is issued as a signal by company to market/investors that a company's prospects are good, and that often leads to gains in share price/market capitalization

3. A Bonus is different from a Split. In a split, the Face Value of a share is split (from say, Rs 1o to Rs 5). They effect of this on share price will be similar to that of a 1:1 Bonus. 

4. In some markets (like in US), there is not concept of a Face Value. So, they do not have a concept of Bonus, but only Split. 

Happy Learning and Investing!

Friday, 3 March 2017

You’ll be Surprised to Learn that Stock Market is Similar to Horse Racing !

Many professional gamblers have often said that there are many similarities between the stock market and horse racing. Some of them have listed more than one similarity. They believe that many people lose at horse racing not because they have a bad luck, but because they do not have a clue what they are up against. They use weird techniques that are plain and very predictable.
You need to make a note of certain indicators and then gamble in horse racing. It is a tricky business and you have to be careful about investing money in it. Here are a few tips for you to keep in mind while investing in horse racing. We also tell you how dealing in the stock market is very similar to horse racing.
#1-Read, Read and Read More
It is a good idea to read up on all the horses, and then place a bet on them. The information is provided before the betting begins. This is very much like fundamental analysis and many experts believe that it works very well. It is a good way to start making small amounts of money.
#2-Identify the Trainers
Another good way to go about it is to choose the trainers who have already proven their worth in races before. This is very similar to the stock market because many people buy shares of the company that is doing good financially in the market. There are less chances of losing money this way.
#3-Analyse
There are many experts who use computers to analyse data and algorithms to access data and provide information regarding a particular race or a trainer. This is also similar to the stock market where lots of analysis goes into making the final investment. You can approach these experts and take their advice. There is a level of security attached to this option.
#4-Money Management
Some experts credit the championships for their wins at horse racing events. Another key factor that is sustainable in this business is to have sound knowledge of money management. Many insist that you will not be able to take the hits if you do not practice restraint when it is needed.
#5-Scalp Trading and Dome Betting
Another way of trading is called scalp trading. You can bet on more than one horse to make your position more secure. This is called dome betting. This technique is also derived from the stock market.
You need to do your research properly. If you don’t, then you’ll lose. Understanding the game is the key to winning it. Also, practice makes perfect. So, you need to give the game time before you start making money. Take advice from experts who have been gambling in horse racing for a while now. If you do not know anyone personally, search the Internet and join a group of experts.
Take advantage of the situation and time your entry. Do not be vulnerable. Take a basic strategy and play well. Be objective. Feelings and emotions are very important, but you have to keep in mind the previous performance of the horses.