We look at five economic and financial aspects of the company each quarter for the stock price valuation and have developed a valuation technique called 'Pancha Tattva Stock Teknik'. This is same interplay as exists with nature's five elements namely Earth, Water, Fire, Air and Sky. Each valuation should be assessed in terms of a delta change from neutral value of 1000 points. Higher the value, the better is the stock and the market price may be due for appreciation above neutral value.

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Thursday 2 September 2010

Direct Tax Code provisions

Friends, 
  The Direct Tax Code which has been tabled in parliament after revision is OK from the angle of stock market participants. It levies no tax on long term gains in equities. Also it has provided for clubbing with income only 50% of the short term gain. So, in a way, the markets will attract a lot of money for this simple reason of tax saving. The other welcome feature is that insurance policies with premium at up to 5% of the risk cover will be given exemption to the extent of Rs 50K in a separate pocket. There will be no tax on maturity and withdrawal too. It may therefore be expected that this provision will make people go for ULIPs in a big way and the companies will be offering suitable plans to cater to this requirement. This is wonderful provision as it will ensure more financial security for the masses in case of misfortune striking and also will divert savings into right channels for expansion of economy through stock exchange route. 
  The corporates have been given some relief by keeping the rate of tax at 30% which is lower than the present level and which is low by what it is in other countries. Our markets are reflecting what happens in world's other leading markets but have displayed strength all through the past month by not overly reacting. Today Nifty has opened at over 5500 mark and may close the day with gains retained. The auto-sales have maintained in high-gear. But you not go in for investing in auto stocks as the stocks seem to have achieved full price potential and may show weakness in next six months as the auto sales would not as robust as they have been recent past due to higher interest rates.
Hari Om, 
Krsna Khandelwal 
BIRDINFO Stock Rx - A prescription for stock market
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