Where is the stock market going? Will it rise further? Or will they crash? What should a small investor do in such a scenario? Should he hold on to his stocks or sell them? Should he buy stocks now or stay away from the market?
In an hour-long chat on rediff.com on Friday, market expert Pranav Sanghavi responded to many such readers' queries. Here is the transcript:
PRANAV SANGHAVI says, Good afternoon everyone. Hello and welcome to the chat. Let's begin.
ytdt asked, Hi Pranav, do you think there would be a small correction before the rally related to third quarter results?
PRANAV SANGHAVI answers, at 2008-01-04 12:01:17I think we witnessed that correction when the markets tested the 19,000 level a week ten days back. I think now the next correction should come post a rally and before the budget. Unless ofcourse there is some adverse news with a heavy influence on our markets simultaneously with the results season.
ytdt asked, what should be the strategy now? i have some money which i want to put in tax saving mutual funds and some select shares... when do i do that?
PRANAV SANGHAVI answers, If you are not invested already, you could pick stocks who you think should deliver spectacular results but have not started moving up yet or moving sideways for some time. If you want to invest heavily then wait for the correction.
karan asked, Good Afternoon Pranav, what is your outlook about the markets for this month, some of the large caps like RIL, L&T ,SBI,BHEL etc have not risen significantly in past two months. do you see a buying opportunity here?
PRANAV SANGHAVI answers, I see tremendous buying opportunity in these these stocks. SBI for example has paid an advance tax of around 1000 crores for the last qtr, as compared to 600 crores and 800 crores for th eprevious two quarters. RIL has paid an advance tax of 1000 odd crores as compared to 440 odd crores in the previous quarter. So these companies have paid substantially higher advance tax which should result in spectacular profits.
karan asked, what is your take on reliance power ipo
PRANAV SANGHAVI answers, Even though is a huge IPO of over US$ 2.5 billion, I would still subscribe to it. India is a power hungry growing country and Rel Power only looks to bridge the gap. There is also tremendous interest from foreign investors in this sector and especially this stock.
Anand asked, What is your take on idea,i bought it at 149
PRANAV SANGHAVI answers, A couple of months back I had recommended a buy saying that not being a leader it will still follow close in the heels of its larger peers like RComm and Bharti and its doing that. I think it will slowly and steadily move up. Also some beneficial news could rerate the stock. I don't think the governmental policies will make a very deep impact on the company.
nikhil asked, WHAT IS YOUR IDEA ON THE PRICING OF RPL AND RNRL AFTER 3 YEARS.
PRANAV SANGHAVI answers, RNRL I'm still not sure of the business model. But RPL could easily double in three years from now. Idea also should move up steadily with handsome returns post three years.
GB asked, Hi Pranav, Which are the best stocks now to take considering long term profit with nearly 50K to invest?
PRANAV SANGHAVI answers, I would look at L&T, DLF, SBI, RIL, IDFC etc.
SARATHY asked, I HOLD SBI 10 SHARES PURCHASED @ 2300/- Kindly how long should i hold? when the rights issue likely to come and what will be price?
PRANAV SANGHAVI answers, I would surely hold on. Also wait for the rights issue and do subscribe to it. You shall surely benefit from the same. I expect SBI to post stellar results too.
Pranavsfan asked, Hi Pranav, I have RNRL, Ispat Industries, GV Films, Teledata. Can I continue to hold?
PRANAV SANGHAVI answers, I would book profits in Ispat and GV Films. You could look at SAIL instead of Ispat. The other two you could continue to hold on. Also RNRL's major push should come post the result of its ongoing battle with RIL over the gas reserves and its deployment.
sen asked, Hello.. Wish u a happy new year.. What do u feel about the intra day trading.. Do u feel it is more risky than the normal..
PRANAV SANGHAVI answers, Day trading is definately risky if you are not completely learned about the markets. It could have disastrous results. Investing and holding is always a better method.
sidk asked, Hi PRanav, Can I buy Crompton Greaves at Rs 400. Pls let me know. Thanks!!
PRANAV SANGHAVI answers, Yes you could still look at Crompton. There is some real estate related news on top of its engineering business.
Anand asked, Can i get into Tata Steel at CMP
PRANAV SANGHAVI answers, I think it is still a good buy with a 2-3 year outlook. By then the TATA group will have managed to substantially reduce their Corus acquisition debt burden and plus the Corus numbers will start reflecting on Tata Steels Balance sheet which will augment its profitability.
cinki asked, Hi. I am 30 yrs old. My take home is approx. 100k p.m., expenses around 30k p.m., 36k p.m. SIP (Rs.4k each in FIDELITY EQUITY FUND GROWTH HDFC PRUDENCE FUND GROWTH OPT. DSP ML TIGER FUND GROWTH OPTION HDFC TOP 200 FUND - GROWTH OPT. SBI MAGNUM GLOBAL FUND - GROWTH ICICI SERVICES INDUSTRIES GROWTH RELIANCE GROWTH FUND - GROWTH PLAN PRU. ICICI EMERGING STAR FUND - GROWTH FRANKLIN INDIA OPPORTUNITIES FUND - GROWTH), FD worth 6 lacs, real estate investment worth 80 lacs in today's market, one retirement plan from Icici pru with annual premium of 35k and one child's policy with annual premium of 26k. Also approx 11 lacs (cost price) investment in Equity. Pls tell me of the above funds which ones i needn't have in my portfolio. I have 2 yrs old daughter. I would want to retire in another 15 years from now by when i want to accumulate atleast 1 crore after inflations for my daughter and also have a monthly income of 1lac after inflation for myself. How can i achieve this?
PRANAV SANGHAVI answers, Please send me an email for me to reply to this lengthy query. Thank you.
Gaurav asked, Top 3 stocks for 2008
PRANAV SANGHAVI answers, L&T, SBI & DLF.
balaji asked, can i purchase SVC Superchem and KRISHNA Life at present price. Both are BUYERS ONLY today. On your advise, i can go our purchase in thousands so as to get some decent returns.
PRANAV SANGHAVI answers, I don't follow either of the stocks but you should be carefull when B2 stocks hit buyer circuits it is not always market driven.
Gaurav asked, 1 year outlook for ICICI bank. Is it a good buy at 1200
PRANAV SANGHAVI answers, Yes definately.
Ani asked, I have bought 200 shares for PBA infrastructure at 171.75 Rs each. How good ist this share and are there any predictions as per the target?
PRANAV SANGHAVI answers, I don't follow that stock so will not be able to help you.
cinki asked, What are your views on Micro technologies and Hindustan Zinc. Can they be long term horses..if so, what kind of targets can one expect from 2 to 3 yrs perspective.
PRANAV SANGHAVI answers, Hind Zinc is a metal commodity stock and commodities by nater are cyclical. Although HZ has a strong balance sheet and good workings. You could look at it with a long term outlook.
kumar asked, i hold IFCI 100 shares purchased @ Rs. 108/- Recently there was selling presssure due to some report and went below to Rs. 70 and it is recovering now. How long should i hold to get some returns? Whether it will reach my purchase rate?
PRANAV SANGHAVI answers, You have bought in very close to its all time highs. You will have to hold on for a very long time as the disinvestment process failed the first time and for the whole process to start again and find genuine investors without management stake could take time.
ni3 asked, hi, what is the future of Burnpur Cement and bgr energy ?
PRANAV SANGHAVI answers, Burnpur Cem has had a phenominal run yesterday but the scary part is that 95% was traded volume and only 5% turnover of over 150 million shares resulted in deliveries. There looks to be something fishy there. I would stay away.
ganesh asked, Sir Can I buy ITC and Ambuja cement at this level for longterm
PRANAV SANGHAVI answers, Yes you could look at both. Even though FMCg is not in favor their hotel thrust could propel the stock. And Even though people feel there will be a glut of cement once fresh capacities start production, I personally feel that the demand will have risen substantially by then to take in all the fresh production capacities.
Nagesh asked, Hi Pranav , I work in Singapore ..i want to invest in Endowment plans of LIC i can pay a premium of 50000 per year .please advise which policy should i take ...
PRANAV SANGHAVI answers, I am not a certified Insurance advisor so cannot give you advice. But email me your details and I could surely put you in touch with a top 10 all India LIC advisor who could help you.
Nisha asked, Can you tell me about this scripts Indotech Transformer,Gujarat NRE Coke,Man Industries
PRANAV SANGHAVI answers, Indotech transformer is still undervalued if you just go by peer group valuations and PE multiples. It has scope for giving 30-40 % returns in the medium to long term. Guj NRE coke should perform well as coal demand does not look to bow down plus they are making foray in to power production themselves and will have coal available inhouse.
Kannan asked, BEST WISHES FOR A HAPPY NEW YEAR 2008. IT IS A FACT THAT I TREMENDOUSLY BENEFITED BASED ON YOUR TIPS. SINCERE THANKS TO YOU. I hold Welspun India, Man Industries (rs.144), Vijaya Bank (Rs.91), m&m (rS. 812, UCO (Rs.61), obc (rs. 240. Coud you tell the target price for above and exact exit time.
PRANAV SANGHAVI answers, Thank
you Kanan and wishing you the same. I will not be able to give you a target but the PSU banks could really jump once the interest rates start to drop around September or maybe earlier depending on our inflation and gdp numbers.
tp asked, wat r ur views on Neyville Lignite, Rohit Ferro, Cinemax, Balrampur, IDFC, Wipro, Tourism Finance, Royal Manor Hotels......Shud I hold or sell?? Thnxs in advance
PRANAV SANGHAVI answers, I think you have a good mix of companies and could hold on to the same.
tapan asked, sir whether it would be right decision to invest in ispat industries
PRANAV SANGHAVI answers, When a stock witnesses a 50% plus jump in a single week, you must study the stock very well to invest at these levels. I would stay away.
aditya asked, Can I buy Gujarat Sidhee in cement sector or can you suggest some low prices potential script in Cement sector ?
PRANAV SANGHAVI answers, Yes you could look at the stock.
raman asked, market will fall before bidget as it happened last year
PRANAV SANGHAVI answers, Yes it could correct especially if there is a rally due to the result season.
Shantanu asked, Hello I have investments in equity opprtunity funds. Now I feel I should have made investment in sectorial funds like Infrastructure funds Why equity opportunity funds are not scoring over infrastructure funds?
PRANAV SANGHAVI answers, If you are bullish on the sector no harm in making investments in sectoral funds. Infrastructure in general has tremendous scope for growth as our country needs huge developments in that area. The last statement is not true there are many equity funds who are scoring high on returns.
nath asked, What is your views about PNB Gilts. I heard that it is going to merge with PNB. Is it correct and whether I can enter PNB Gilts now.
PRANAV SANGHAVI answers, PNB gilts by itself is a good stock. If it merges it will only add value.
tp asked, which sectors and stocks r u bullish on even at these levels over long term???
PRANAV SANGHAVI answers, I am still bullish on banking, real estate, infrastructure, power, heavy and light engineering and telecom.
Garv asked, I have Indiabulls Fin & Indiabulls REal Estate. Shall I hold or book profit
PRANAV SANGHAVI answers, I would surely hold on.
ravi asked, What is the future prospect of STC ?
PRANAV SANGHAVI answers, It has huge assets and I would hold on.
nmbmbn asked, Is Godfrey Philips in FMCG a good buy ?
PRANAV SANGHAVI answers, Cigarettes as a segment is a non favor segment with the government and it is likely to have an excise increase like previous years which may affect its pricing during the budget days. But beyond that cigarette consumption is not going down despite the heavy excise so longer term it should do well.
nmbmbn asked, Can I enter India Bulls and Punj Llyopd at these levels ?
PRANAV SANGHAVI answers, Yes surely. Both stocks should give you good returns over 6 to 12 months especially Punj.
sanjay asked, i was buy ajanta soya 200 @ 19.95 .right now it trading in 21.90 along with same is freez. what you think rate about after 7 days.b'coz i was a short tarm inv.
PRANAV SANGHAVI answers, I would book proifits and exit such stocks.
nmbmbn asked, Can I add Gujarat Alkalies and Gujarat Power at these levels ?
PRANAV SANGHAVI answers, Yes you could look at them but I would buy on dips.
raman asked, sir, it would be wise to invest in hdfc growth mutual fund, and at what target price
PRANAV SANGHAVI answers, You could invest into the scheme.
nmbmbn asked, Is Dredging Corporation a good buy ?
PRANAV SANGHAVI answers, Yes, the dredging industry is reportedly going to get further sops from the government during this budget.
nmbmbn asked, IS bHARATI SHIPYARD A GOOD BUY ?
PRANAV SANGHAVI answers, Just today there is news of Shipbuilders getting some form of benefit from the government. So Bharti Shipyard should also benefit.
email@example.com asked, sir i want to buy hmt & rcf . is it right time to enter in it
PRANAV SANGHAVI answers, Both have appreciated substantially but you could still look at them.
nmbmbn asked, cAN YOU PLEASE SUGGES UR PICK FROM THE FOLLOWING .. 1. Ispat Ind. 2. Gtl Infra 3. Hind Motors 4.. Rico Auto 5.. FDC 6.. KEI ind 7.Shanthi gears 8.Shreyas shipping 9. Harig crank shaft 10. Balasore alloys
PRANAV SANGHAVI answers, From the stocks you mention, I would hold on to Rico, FDC, KEI, Shanti gears.
Madhav asked, sujjest me the outperforming IPOs
PRANAV SANGHAVI answers, I think Reliance Power should be a good IPO.
Shantanu asked, Pranav, I have been impressed by the contents of your speeches. I would like you to evaluate Indian market before budget 2008. Are we safe? Can we sustain at present level?
PRANAV SANGHAVI answers, Thank you Shantanu. We are at the beginning of a growth curve in India. With the right kind of policies at the centre we could easily extend this growth curve from a mere 2-3 year phenomenon to a 10 to 15 year period of growth an prosperity for our country. This budget looks like being a populist one as it is so close to the elections. I dont see why India cannot sustain the growth with the right help from the centre. It is said in research reports that by 2015 we should have over 250 million people in the earning and spending category as compared to a little under 100 million right now. That itself could propel our GDP growth tremendously.
Pradeep asked, Dear Sir, What will your call on Silverline Technologies, RPL, RNRL & Voltas
PRANAV SANGHAVI answers, I like Voltas and RPL.
vinuser asked, IS ICICI is a worth buy at current Levels.Wats is the target in next 6 months.
PRANAV SANGHAVI answers, Yes I would look at it with 6 months outlook.
sanjeevkumar.koneri asked, Hi Pranav sir
PRANAV SANGHAVI answers, Hello.
Killbill asked, Where is IFCI heading? How would you compare Lloyd Steel versus Ispat Industry?
PRANAV SANGHAVI answers, I wouldn't compare either. I would stick to SAIL or TIsco.
ANANDAND asked, WHATS IS TARGET FOR JYOTI STR I PURCHASED AT 230
PRANAV SANGHAVI answers, I am not a technical analyst so I cannot give you price targets, sorry.
shankar asked, Hi Good Afternoon, I have no knowledge in Mutual. I am in Chennai. Could you pls give me some guidelines on how to invest in Mutual funds?
PRANAV SANGHAVI answers, Please send me your wquery by email id and I shall put a qualified MF advisor in your touch.
deepakj asked, hi i have 50 infosys at 1820 rs what shuld i do hang on same i have wipro bought 50 at 424 rs shuld i hol on what sir i have brigade 54 shares shuld i sell them or wait for some time
PRANAV SANGHAVI answers, The tech stocks still have some weakness left. I would not invest in them right now. Brigade you could hold on who looks like a strong regional player.
DS asked, sir, whether Bharti is still holding for one year. My purchase price 950 one month back.will it be better to switch over to another stock.
PRANAV SANGHAVI answers, The telecom sector looks shaky right now due to the governmental policies which could harm especially the established GSM players. But in the longer term it should do well.
KMV asked, Dear Pranav Firstly a 'Very Happy New Year 2008' and i have Rs.2lacs to invest in stocks. Kindly suggest me to get 10-15% returns per month.
PRANAV SANGHAVI answers, Dear KMV. Wishing you the same. Getting a 10 to 15% return in a month is not an easy task even for hedge fudns who's ultimate goal is returns only. Getting a 20 to 30% return per annum is a decent benchmark that you could work with.
Nilesh asked, I have TCS 35 shares what should i do
PRANAV SANGHAVI answers, If you are holding form a longer term then hold on.
sam asked, sir, good afternoon, i have inversted money in mutual fund syuch as reliance diversified, vision, growth retials plan, 15 ICICI dynamic plan, tata infra, uti infra, SBI multiplier, Franklin templeton, birla sun life, can you tell me , my decosion was ok? and also i want to invest 3 lac now , where should go for investment?
PRANAV SANGHAVI answers, Yes you seem to have made good choices. You could go to the through the insurance sector. Last year the monies invested by the Insurance sector beat MF's investments. This year they look to cross the FII investments.
asha asked, dear sir, i have franklin small comp. fund (growth), do i stay invested in this, as smaller companies are gaining now? pl. tell me as today is the last day of trading for this fund.
PRANAV SANGHAVI answers, Yes you could hold on.
DC asked, outlook on TCS, wipro, satyam,and infosys for next 3 to 6 months
PRANAV SANGHAVI answers, They may remain rangebound and move based on news.
Prasad asked, Hi pranav, I am working in bahrain(gulf) and would like to invest in Reliance Power IPO....what is the best procedure for the same
PRANAV SANGHAVI answers, I would advise you to contact your local bank in India and they should assist you with the same.
PRANAV SANGHAVI says, Well its been great chatting with you people. Wishing all of you a very Happy New Year and Happy Investing. Hope the new year is extremely propserous for you all. Bye
Chat with Pranav every week!