Be safe not sorry

The markets have been falling for the last seven days but are now marginally higher than the beginning of the year The week saw the BSESENSEX losing 29642 points or 150 per cent to close at 1948477 points The NIFTY lost 9540 points or 159 per cent to close at 590350 points The broader market lost more with the BSE100 BSE200 and BSE500 losing 186 per cent 192 per cent and 206 per cent respectively The BSEMIDCAP and BSESMALLCAP were even bigger losers with losses of 304 per cent and 372 per cent Union Finance Minister P Chidambaram announced that the expected GDP for the nation is 55 per cent for the year ending March 2013 File pic The BSEFMCG was the only gainer up 173 per cent The losers included BSEPSU down 467 per cent BSEMETAL down 435 per cent BSEOIL down 382 per cent and BSEREALTY down 270 per cent In individual stocks TCS was up 571 per cent HDFC up 372 per cent and Infosys up 061 per cent u00a0The losers included Sterlite Industries down 956 per cent BHEL down 748 per cent and Sesa Goa down 756 per cent The markets have certainly turned bearish and but for the FIIs one gets a feeling that nobody else is bullish onu00a0 the economy Low growth The Central Statistical Organisation CSO has predicted a GDP of 5 per cent for the current year ending March 2013 Post the announcement the Finance Minister claimed the same would be 55 per cent Where we actually end up is a matter of speculation but the clear fact is that the country is headed for its worst growth in a decade Successful sale NTPCrsquos Offer For Sale OFS was a grand success with the offer receiving bids for 172 times the issue size of 7832 crore The floor price fixed was Rs 145 and the allocated price was R14555 and upwards The government has garnered Rs 11400 crore from this divestment which takes the total collection to R20000 crore against the budgeted R30000 crore The FIIs were aggressive buyers last week and have bought shares in the OFS of NTPC The total investment by FIIs in the week was R15100 crore while domestic institutions sold shares worth R2050 crore The Indian Rupee depreciated during the week closing at 5350 instead of 5319 against the US dollar in the previous week New exchange On Saturday the Finance Minister formally inaugurated MCXSX the latest stock exchange in the city Trading would commence from today on the newest bourse which has the MCXSX40 as its flagship index The SENSEX has 30 stocks while the NIFTY has 50 stocks and this would be an apt number coming midway between the two at 40 stocks The closing level of the MCXSX40 was 1141970 based on Fridayrsquos closing price The index has a base of 10000 and has its base date as March 31 2010 It has 1116 companies in the lsquopermitted to tradersquo category With the equity and derivatives segments set to commence from today it would be interesting to see how brokers invite business from clients to the new exchange It is quite clear that for the new exchange to grow it needs to bring benefits to all its stakeholders be it brokers clients or corporates Coming up The week ahead sees an IPO from Sai Silk Kalamandir Limited a sari and garment retailer predominantly located in Hyderabad and Bengaluru with some presence in Tamil Nadu It is launching its issue to garner R89 crore in a price band of Rs 7075 The issue opens today February 11 and closes on Wednesday February 13 The issue has an attractive USP of a lsquosafety netrsquo which allows original retail investors allotted upto 1000 shares to offer their shares back to the promoter group in a time frame of six months at the original price if the share trades below the issue price on even a single day This is a voluntary safety net offered by the promoter group and would help in instilling confidence in retail investors who have been losing money in almost 75 per cent of the issues which have tapped the capital markets in the last four to five years I believe this safety net offers an assurance of sorts to the investor giving him an option to reap profits in the market and sell at issue price in case of a downfall to the promoter for a reasonable time of six months from issue Readers should look at the issue as it seems to be a rewarding one The markets have become quite nervous and with a continuous sevenday fall are likely to break the trend today or tomorrow However it cannot be said whether the markets will be able to sustain it or if it will just be a one day wonder With the budget less than three weeks away one would look at developments on that front to drive the market which in turn is at best likely to drift The BSESENSEX has support at 19383 points then at 19298 points then at 19150 points and finally at 18975 points It has resistance at 19616 points then at 19786 points then at 19850 points and finally at 19975 points The NSENIFTY has support at 5873 points then at 5845 points then at 5803 points and finally at 5755 points It has resistance at 5943 points then at 6002 points then at 6038 points and finally at 6084 points Trade with extreme caution Arun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt Ltd Readers are invited to read more about these and other issues on his website httpak57in Disclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions based on information published here Any reader taking decisions based on any information published here does so entirely at his or her risku00a0