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Monday, January 21, 2008

Parsvnath lines up Rs 60,000cr investment

Realty major to diversify into SEZs, airports, expressways and retail businesses in 5 years.

Aiming to turn a ‘conglomerate’ from being a real estate major, Parsvnath Developers has announced an investment of Rs 60,000 crore in next five years in diversified areas such as SEZs, airports, express ways and retails business.

 BUILDING GROWTH

# The group will bid for upcoming airports in Udaipur, Greater Noida and Maharashtra

# Parsvnath will focus on development of SEZs, hotels, highways, retail and telecom

# The company plans to leverage its huge land bank
“We shall be bidding for upcoming airports such as Udaipur, Greater Noida, Maharashtra and other states. Besides, SEZs will be another major investment area in the coming three to five years,” Pradeep Jain, chairman of Parsvnath Developers, said.

Asked about the source of funding, Jain, who started as a broker about 15 years back grew to become India’s leading real estate developer, said: “Funding for new businesses will not be an issue... We shall leverage our huge large land bank”.

Among the major projects, Parsvnath would be focusing on development of SEZs, hotels, highways, retail and telecom, he said adding the company has 191 million square feet of developable area, including six SEZs.

Though it has been denied an entry into telecom business as Parsvnath’s application for the unified license was rejected by the Department of Telecom (DoT) last week, Jain said: “We will get into the telecom sector and our investment will be in the range of up to Rs 20,000 crore”.

He, however, declined to elaborate on telecom business plans, saying the company was watching the situation.

On other businesses, Jain said the company would enter the retail business in a big way and would soon announce its roadmap. The company is in talks with some of the major international retailers.

Parsvnath is also believed to be in talks with two French majors Carrefour and Club Casino to set up retail chains in India. Jain said that “we are sure to open our first retail store in 2008 and possibly will start with Delhi”.

Although he did not name the suitor, Jain said that the roll out of the retail outlets would start from this calendar year itself.

Jain, who has been included in the list of billionaires by Forbes, is hoping to grow at the rate of 102-140 per cent year-on-year basis to become a Rs 15,000 company in next five years from about Rs 1,500 crore turnover now.

About the types of retail stores and branding, Jain said the details were being worked out but the stores would be in large formats such as complete food bazaar and as far as branding was concerned, the company would take a decision after finalising the overseas partner.

The company owns over 14 million square feet of land for retail business in 48 cities and that would be an advantage for Parsvnath as all other prospective retailers would have to bank upon them for space.

Posted by Srivatsan at 7:13 AM

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Understanding Short Term Trading

Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.

Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.

Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.

Types of Moving Averages

1) Simple Moving Average (SMA)

SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.

2) Exponential Moving Average (EMA)

EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.

The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.

A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.

In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.

Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.

Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.