Moolyankan Unitvalue 113.89 (Returns Since 10th Sept'07 - 13.89%)
Sensex Returns - (06.39)% ; () denotes -ve returns
Sensex today - 14657 (Sensex 15593 - 10 sept'07)
Corpus Size - Rs 202,650
Total Number of Units - 1779.33
Sunday, August 3, 2008
Moolyankan Unitvalue - 1 Aug'08
Friday, July 11, 2008
Hedging the Moolyankan cash portfolio
We have started hedging our cash portfolio by buying some puts in F & O segment. It goes without saying these are troublesome times and you need some protection against the wild swings of the market.
In layman's language by buying puts your portfolio gains when market falls. When market falls obviously the value of your cash portfolio reduces and to protect it from free fall you need the comfort of some instrument through which you can gain when market falls.
As if now we have bought the Nifty 3700 PE July series Put. Considering the present scenario we feel it is a must since in the present circumstances we are not looking at the relative returns compared to sensex. We are already outperforming the sensex by a margin of 20%, but we strongly believe it makes no sense to say our returns are -5% since sensex has gone down by 25%. It is time to look for absolute returns and we are going to ride puts unless the market condition stabilizes.
Today again inflation figures were bad and has increased to 11.89% and we think RBI would be further increasing the key policy rates soon. We are in a election year and government would want the inflation to reduce at any cost even of GDP growth. In high interest rate scenario there is only a point up till which companies can pass on the cost increase to the customers after which there is a elasticity of the demand comes in and it contracts. This affects the margins of the companies.
It seems there bad news just keeps pouring in. Industrial production growth has slipped to 3.8% -its lowest levels in last 6 years. It makes the job of policymakers even more difficult with high inflation at one hand and slowing growth on the other hand.
Earnings season has started and Infosys came out with a good set of numbers for Q1 FY-09 along with revised guidance of 99.34-101.06 for the full FY-09. Biggest contributing factor to the revised guidance is the rupee depreciation. There are concerns on the deals coming from the BFSI vertical which is the main reason Infosys tanked despite good set of numbers and revised guidance. But we believe there is some scope of rerating in the stock and in the next 3-4 months it should outperform the sensex and nifty. We are definitely looking at buying into the IT stocks.
Oil continues to boil and has crossed its previous high of USD 145.85 per barrel on July 3. Supply side concerns from strike in Brazil, violence in Nigeria and geopolitical tension in Iran continue to provide fuel to the oil price rally. We can't comment how is the present price is due to speculation or genuine supply side concerns but we believe the world has entered into a phase where it is continuously going to see higher prices.
In layman's language by buying puts your portfolio gains when market falls. When market falls obviously the value of your cash portfolio reduces and to protect it from free fall you need the comfort of some instrument through which you can gain when market falls.
As if now we have bought the Nifty 3700 PE July series Put. Considering the present scenario we feel it is a must since in the present circumstances we are not looking at the relative returns compared to sensex. We are already outperforming the sensex by a margin of 20%, but we strongly believe it makes no sense to say our returns are -5% since sensex has gone down by 25%. It is time to look for absolute returns and we are going to ride puts unless the market condition stabilizes.
Today again inflation figures were bad and has increased to 11.89% and we think RBI would be further increasing the key policy rates soon. We are in a election year and government would want the inflation to reduce at any cost even of GDP growth. In high interest rate scenario there is only a point up till which companies can pass on the cost increase to the customers after which there is a elasticity of the demand comes in and it contracts. This affects the margins of the companies.
It seems there bad news just keeps pouring in. Industrial production growth has slipped to 3.8% -its lowest levels in last 6 years. It makes the job of policymakers even more difficult with high inflation at one hand and slowing growth on the other hand.
Earnings season has started and Infosys came out with a good set of numbers for Q1 FY-09 along with revised guidance of 99.34-101.06 for the full FY-09. Biggest contributing factor to the revised guidance is the rupee depreciation. There are concerns on the deals coming from the BFSI vertical which is the main reason Infosys tanked despite good set of numbers and revised guidance. But we believe there is some scope of rerating in the stock and in the next 3-4 months it should outperform the sensex and nifty. We are definitely looking at buying into the IT stocks.
Oil continues to boil and has crossed its previous high of USD 145.85 per barrel on July 3. Supply side concerns from strike in Brazil, violence in Nigeria and geopolitical tension in Iran continue to provide fuel to the oil price rally. We can't comment how is the present price is due to speculation or genuine supply side concerns but we believe the world has entered into a phase where it is continuously going to see higher prices.
Moolyankan Unitvalue - 12 July'08
Moolyankan Unitvalue 107.71 (Returns Since 10th Sept'07 - 07.71%)
Sensex Returns - (13.61)% ; () denotes -ve returns
Sensex today - 13470 (Sensex 15593 - 10 sept'07)
Corpus Size - Rs 191,652
Total Number of Units - 1779.33
Tuesday, July 8, 2008
So......finally left...
So..Finally left withdraws support from the UPA govt after long drama over nuclear deal.
Does it really affect market ?
Answer to this question lies in the fact that market recovered after the news formally came out today afternoon. Market never like uncertainty and in a way it is good with the general election due next year march, so it hardly matter whether elections happen 3-4 months before scheduled time. We believe markets have already discounted the news.
Right now there are far greater issues before the market - earnings slowdown, high oil prices, rising inflation.
Although market valuations have down from the peak in January this year and now trades at PE multiples of 14 (Sensex EPS - 950).
Can the market go lower from these levels ?
In the near term it seems market has formed some strong support near recent lows of 3830-3850 (Nifty) but another rally in oil prices or further spurt in inflation can break all these support very easily and nifty could slide to further lower levels (In general 1 pt change in nifty results in 3 pt change in sensex, although there is no written rule).
Oil has cooled off today to US$ 136.7 from its recent highs of US$ 145.85 per barrel on July 3. Along with oil prices of many commodities has cooled off from there highs. With slowing economies across the world and resulting slowdown in demand the prices of many commodities are bound to come down including oil. But if there is any new geopolitical development such as Israel attacking Iran price of oil might flare up.
Slowing economies coupled with high inflation (Stagflation) beyond the comfortable range is giving headache to most central bankers across the world. ECB recently raised the interest rates by 25 bps to counter inflation in the Euro zone and situation is same across the world. In India inflation is expected to rise off further before high base effect of last year kicking in.
From this friday extremely important earnings season will start with Infosys declaring the result. If there is any nasty surprise from the companies than it is no-brainer market will go down significantly lower from here.
Does it really affect market ?
Answer to this question lies in the fact that market recovered after the news formally came out today afternoon. Market never like uncertainty and in a way it is good with the general election due next year march, so it hardly matter whether elections happen 3-4 months before scheduled time. We believe markets have already discounted the news.
Right now there are far greater issues before the market - earnings slowdown, high oil prices, rising inflation.
Although market valuations have down from the peak in January this year and now trades at PE multiples of 14 (Sensex EPS - 950).
Can the market go lower from these levels ?
In the near term it seems market has formed some strong support near recent lows of 3830-3850 (Nifty) but another rally in oil prices or further spurt in inflation can break all these support very easily and nifty could slide to further lower levels (In general 1 pt change in nifty results in 3 pt change in sensex, although there is no written rule).
Oil has cooled off today to US$ 136.7 from its recent highs of US$ 145.85 per barrel on July 3. Along with oil prices of many commodities has cooled off from there highs. With slowing economies across the world and resulting slowdown in demand the prices of many commodities are bound to come down including oil. But if there is any new geopolitical development such as Israel attacking Iran price of oil might flare up.
Slowing economies coupled with high inflation (Stagflation) beyond the comfortable range is giving headache to most central bankers across the world. ECB recently raised the interest rates by 25 bps to counter inflation in the Euro zone and situation is same across the world. In India inflation is expected to rise off further before high base effect of last year kicking in.
From this friday extremely important earnings season will start with Infosys declaring the result. If there is any nasty surprise from the companies than it is no-brainer market will go down significantly lower from here.
Saturday, June 28, 2008
Moolyankan Unitvalue - 27 June'08
Moolyankan Unitvalue 111.25 (Returns Since 10th Sept'07 - 11.25%)
Sensex Returns - (11.48)% ; () denotes -ve returns
Sensex today - 13802 (Sensex 15593 - 10 sept'07)
Corpus Size - Rs 197,951
Total Number of Units - 1779.33
Wednesday, June 25, 2008
Moolyankan Unitvalue - 25 June'08
Moolyankan Unitvalue 113.46 (Returns Since 10th Sept'07 - 13.46%)
Sensex Returns - (8.81)% ; () denotes -ve returns
Sensex today - 14220 (Sensex 15593 - 10 sept'07)
Corpus Size - Rs 201,879
Total Number of Units - 1779.33
Tuesday, June 24, 2008
Moolyankan Unitvalue - 24 June'08
Moolyankan Unitvalue 113.12 (Returns Since 10th Sept'07 - 13.12%)
Sensex Returns - (9.53)% ; () denotes -ve returns
Sensex today - 14107 (Sensex 15593 - 10 sept'07)
Corpus Size - Rs 201,280
Total Number of Units - 1779.33
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