Maybe, here comes 1000 - 1500 points off the Sensex
VJ DS
market, the Sensex crashed big time. Infact, the trading was stopped
for an hour or so in the market.
Today history could repeat and we will not be surprised to see this as
a trigger to much required and expected correction. Maybe, here comes
the 1000 – 1500 points off the Sensex.
So, What is a Promisory Note (P-Note)?
P-Notes are offshore derivative instruments on Indian stocks sold by
big brokerage houses to their foreign clients for a substantially
higher fee than what the investors would have paid had they invested
directly in the market, that is through the Sebi-Registered FII route.
However, a large number of Foreign Investors prefer P-Notes which
protect their identity and give them easy and quick entry-exit
opportunity. This money is used for huge market manipulations.
SEBI proposes steps to control P-Notes to avoid the market speculation
by the controlling the huge inflow of US $ for short term. By doing
this they will protect the interests of long term investors. It is an
attempt to control leveraging.
International investors will definitely not like this intervention.
This would make the market violent for a short term. However, long
term investments would remain intact.
SEBI has called for an emergency meeting on 20th Oct.
Its immediate impact
1) Market would soften and could loose upto 10% (i.e. 1500 to 1800
points off the sensex)
2) Major Dollar Outflow will depreciate Rs against US $ - This could
improve profitability of the export based companies like IT Sector.
What should an individual investor do now?
1) If you are sitting on profit and have not sold yet – do not delay
another second and do some profit booking
2) Do not jump right away for fresh buying
3) Let the market cool-off a day or two atleast and then do the
selective buying
Read the complete SEBI report here:
Sebi release Paper for discussion on Offshore Derivative Instruments
(Participatory Notes)
http://www.sebi.gov.in/commreport/OffshoreDerivative.pdf
Happy Trading!
http://www.vjondalalstreet.com
Bus Naam hi kaafi hain...
To subscribe vjondalalstr...@yahoogroups.com
You can also join the group with your mobile phone and get updates
through sms. To subscribe sms
JOIN VJonDalalStreet to 567673434
Disclaimer
All information provided is for informational purposes only, not
intended for trading purposes or advice. Prior to execution of any
trade, you are advised to consult your financial advisor to verify the
accuracy of all information. We are not liable for any informational
errors, incompleteness, delays, or for any actions based on
information contained herein.