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Summary: In the face of Asian competition and possible supply shocks to the uranium market, UxC president Jeff Combs urges U.S. utilities to ?support the expansion of production in the United States.? He believes there?s a good chance for $50/pound uranium this year. ?Any shock to supply could send prices much, much higher.?

StockInterview: How would you sum up the uranium market right now?

Jeff Combs: There?s a very tight supply/demand situation that exists now for deliveries over the next several years. If you were going out today to buy uranium for 2007, 2008, and 2009, there?s not that much available supply. The supply/demand balance is very tight, and I think that?s going to be reflected in prices continuing to rise for a while as utilities seek to fill demand for those delivery years. Since most contracting in uranium is done on a term basis, you?re always looking out several years. By the time you reach 2009, for example, you?re looking to fill needs in 2012 and beyond. By that time, supply might have responded sufficiently, or even ?over-responded.? Of course, whether or not the supply/demand balance is tighter then depends on how nuclear power expansion is progressing at that point and what happens with respect to the HEU deal. But, in the meantime, production will have had more time to react to higher prices, and this could alleviate some of the supply/demand pressures.

StockInterview: How are escalating market-related contracts impacting the uranium price?

Jeff Combs: It?s pretty much a sellers? market right now. You have escalating floor prices that are maybe not too much lower than the current spot price. If you have ceiling prices, they?ll be much higher than the current price, and those will also escalate. In some cases, you don?t even have ceiling prices. In rare cases, you don?t have either ceiling or floor prices. Most producers are looking to sign market-related contracts and not fix the price even on an escalated basis in the future, although they would want floor protection. To a large extent, the utilities don?t have too much choice in the matter except to wait and hope that the competitive landscape changes in the future. However, in many cases they need to procure uranium now and can?t afford to wait. Thus, they must accept what is being offered.

StockInterview: Do you continue to see a speculative frenzy in the market?

Jeff Combs: There?s still some speculative activity in the market, but I wouldn?t call it so much a frenzy. The importance of this speculative buying has been somewhat over-blown. Total hedge fund/investor volume to date is about 11 million pounds. This buying started towards the end of 2004. The bulk of it was during 2005, and it has continued into this year. It will be much less over the first part of this year versus the first part of 2005; about a half a million pounds so far this year versus 5.5 million pounds through May of 2005. There is probably too much emphasis put on the role of hedge funds or investment funds in the market. If you look at the market, the price ? especially the long term contract prices ? has been leading the spot price up. The speculators really aren?t involved in that part of the market.

Over the same time the hedge funds/investor funds were buying, you?ve probably had a third of a billion pounds transacted under long-term contracts. If you go forward several years from now, you see a very tight supply/demand situation in the market. If you wanted a pure base-escalated contract, the base price for this might be close to $50 today, a good bit higher than the spot price and about a third or so higher than the long-term price at the beginning of the year.

StockInterview: We?ve been led to believe the HEU deal with Russia will not be renewed. What is your feeling?

Jeff Combs: You need to consider how much things have changed from when the current HEU deal was signed. At that time, the Russian economy was struggling, as was Russia?s nuclear power program. Now Russia?s economy is much more robust, thanks to energy exports. Russia is experiencing a nuclear power renaissance of its own. From this perspective, I think it?s quite unlikely that the HEU deal will be renewed. When I say that, I?m referring to the deal between an agent acting for the Russian Government and an agent acting for the U.S. Government. I don?t think that necessarily means that there will not be any HEU blended down after the current deal is over, but that could be done for internal consumption in Russia or be used as supply for countries where Russia is exporting fuel for Russian-supplied reactors.

StockInterview: The trading volume on the spot uranium market has fallen off after what transpired in 2005.

Jeff Combs: The volume now is certainly less than what it was last year. Volume so far for the year is 6.3 million pounds on the spot market. If this rate were maintained, it would put volume close to 20 million pounds for the year. This would make it more of a typical market in terms of volume from the standpoint of recent history before 2005. Whether or not volume is higher than this depends a lot on the extent to which utilities that are out in the long term market, right now, are able to get offers to cover requirements in 2007, 2008, and 2009. If they?re not successful, they might come back into the spot market. That could boost spot buying somewhat later in the year. Also, some producers have been buying on the spot market. If this buying picks up, it could add to volume as well

StockInterview: Do you believe we?re going to see $50/pound uranium in the near term?

Jeff Combs: Oh yes, I think there?s a good chance that we?ll see $50 per pound uranium this year, more likely in terms of long term contracts. I think the highest prices may be reached within the next couple of years. I think that?s when supply will be the tightest. In our uranium market report, we develop three price scenarios ? a base case, a high-price case, and a low-price case. Price spikes or overshoots its long-run equilibrium in all three scenarios. In the high case, which would be the most dramatic spike, I would say it would be somewhere in the $60 – $70 range. Price certainly could be higher than this if the wheels come off the wagon. I think you?re definitely looking at price going into the $50s. It?s not too difficult to see a scenario where price goes into the $60s. And then it would come down from there.

StockInterview: What goes up must come down?

Jeff Combs: I don?t think these higher prices are sustainable in the long term. You also have the situation now where utilities are going out to buy uranium, and they?re not finding what they want over the 2007-2009 period. It might be the case that some of these newer producers, or producers in the process of expanding production, really aren?t in a position to offer the supplies in those years. Ultimately, they will have the supply to offer in maybe 2009 or 2010. Since they?re not offering it right now, price can be pushed up a fair amount, setting up the possibility for a correction in a few years when more of these supplies become available to the market. In the short term, uranium supply and demand are very inelastic. This Read more…

SUMMARY: TradeTech LLC Chief Executive Gene Clark talked with StockInterview about the uranium bull market, where his price models show uranium prices heading and when to expect the peak of the current upward cycle of the bull market. When will ?hard? times again hit the uranium market, and how long will the trough last? And what does the future hold for the uranium price? An industry insider gives us his insights.

StockInterview: When the uranium bull market began, did you foresee $40/pound uranium, now that the spot price has risen above this level?

Gene Clark: I don?t think any of us saw $40 per pound coming. We had price projections at the time that indicated probably $25 per pound, which would be a long term equilibrium price in constant dollar terms. But, I think it was a surprise the price went up so high. I think what?s going, the biggest factor right now, is the advent of the so called hedge funds or speculator funds and other such groups. The price started to go up, and they came into the market with the express purpose of buying for holding and then selling into the market later to realize the trading profit. In 2005, the hedge funds were responsible for purchasing about 10 million pounds of the 29 million pounds purchased. I think the market is now finally adjusting to the realities of primary supply and demand. It?s been a depressed market for 20 or 30 years, primarily from the draw down of excess inventories, and what we call secondary supply.

StockInterview: Will the speculators remain active in driving the spot uranium price higher?

Gene Clark: I think there is still some room for further speculation activity. Uranium Participation Corporation, for example, is rumored to be about to come to the equities market again to raise funds for another purchase. They?re asking for authority to buy UF6, as well as U308, and different forms of uranium than they were locked into before. Whether it be at the 10 million pound level (size of purchase), I think it kind of depends on where the market goes. If it tends to flatten out, then I think there?s going to be obviously less interest on their part. When they were active in the market, they, of course, wanted the price to go up. Therefore, they weren?t too careful about what they paid for uranium. I think that?s a part of it. In the long run, it was due for a readjustment to reflect prices of the cost of new production facilities. But, the hedge funds came in and overdrove the market. Eventually, what it?s going to wind up doing is, if they sell off, it could have the impact of driving prices back down below where they would otherwise have gone.

StockInterview: Did the speculators interfere with the trading efficiency of the uranium market?

Gene Clark: In theory, speculators come in, tend to take the risk and smooth out market prices. But, it never really works out that way. They always come in and only take the risk, if there?s an opportunity to make money. So some people make a lot of money. It does tend to upset the market. If you get away from the primary users of uranium and primary producers of uranium as your market participants, then you tend to introduce more noise than you would like.

StockInterview: With that in mind, in which direction are your price projections going?

Gene Clark: We?re actually updating our uranium price forecast right now. We haven?t decided on a reference case yet. The reference cases we?re looking at will peak at about $50 to $55 per pound in about three years, and will then drop off pretty drastically. It has to do with a selling of the speculator reserves, the uranium that?s being held (for speculative purposes). I can see it coming back down to $30, maybe below $30 per pound. Then, in the long run ? out through 2020 ? getting easily back up over $40 per pound.

StockInterview: Are you predicting a down cycle during the course of the uranium bull market?

Gene Clark: Yes. It?s pretty consistent with everything we?re doing with the changes in requirements, in different cases of high, low, and medium demand. Our modeling system is projecting this. It has to do with the supply and demand balance and the cost on the margin. The way to describe it is that prices have come to a point now of higher than we would have projected them to be, such that over-supply is going to evolve. The large low cost projects will reach a point where supply then overshoots demand for a few years, which causes the price to come back down. Then demand growth, in the long run, picks up and puts a lot of pressure on the supply market to be able to meet the demand. So you wind up with pressure toward the end of the period.

StockInterview: But the markets are finicky, filled with variables, and can frequently trick price models.

Gene Clark: Here?s what it would take to shoot that down: We have a problem with small numbers, and there are some very large projects ? Cigar Lake, for example. The expansion of Olympic Dam in Australia would be going from about 12 million pounds of production to over 30 million pounds, if they finish. If you shift that out by four or five years, or if the owner decides, ?No, we?re not going to expand at all,? you have a drastic effect. Then you would wind up with $100 per pound uranium, I think.

StockInterview: What are your estimates on the peak price years and the bottom years?

Gene Clark: A lot of things could change, but here is what we?re looking at. In one case scenario, the speculators are really going to stay out of the market and holding onto their stuff for a long time. If so, then we?re going to be at the peak by the end of this year. If they stay active in the market and buying, then that stretches it out further. Depending on the scenario, we see the peak possibly at 2008 or so. I would say we?re looking at a trough around the timeframe of 2011 to 2013. Then back up after that.

StockInterview: How do you arrive at your weekly numbers for the spot uranium price?

Gene Clark: We get our data from all of the key sources: the utility fuel managers, sales staff and management of uranium producers and processors, and uranium traders, brokers and asset managers. Some are, of course, more cooperative than others, and whom we call depends on the type of information we are seeking. Since our price indicators are a judgment call, we often focus on the losers in particular recent transactions, as those will be the next to make offers in the market.

StockInterview: Let?s back up a bit. Why has uranium gone up past the levels of the ?cost of production,? which would place the spot price between $25 and $35/pound?

Gene Clark: The biggest factor, in signaling the market, was when utilities went out for long term bid requests. They found they reached a period in which producers would have to build new facilities. Producers building those facilities felt, ?I have to make at least enough profit to cover a return on the construction costs for these facilities.? That was much higher than the market at the time. Basically, you reached a point where the cheap stuff has been sold. Now, we have to actually spend some money, some capital, to build new facilities, new mines and new mills. That was, I think, the earliest signal of the price needing to adjust.

StockInterview: Isn?t there a ton of hype across all media channels about the ?nuclear renaissance? and the demand for more nuclear energy?

Gene Clark:
First of all, all the hype about nuclear renaissance is really in the United States. The Chinese have had plans to expand for a long time. The Japanese have been steadily adding new capacity. Koreans have been adding new capacity. Indians have been adding new capacity all along, all the way through this, even before we started this discussion on nuclear renaissance. I think that phrase is really focused more in the United States, which really hasn?t ordered a plant since 1976 or something like that. There is a boom. Maybe it?s the uranium renaissance.

StockInterview: Is all of what we?ve been reading just plain hype?

Gene Clark: There is some hype, but there is also some substance. A part of it is certainly a change in public attitude about nuclear power. If I was riding on an airplane, ten years ago, and someone asked me what I did for a living, I was guaranteed to have a lousy trip, arguing about nuclear power. When I mention it now, I get a positive response. There’s been a marked shift in public attitude about Read more…

Trading in the uranium market is done by a very small number of players. After all, there are about 440 nuclear reactors worldwide, a few dozen trading firms, fuel managers, and a relatively small number of utilities who participate in the actual buying of uranium. It?s the front end of the nuclear fuel cycle. Without it, nuclear reactors shut down. The uranium price has been skyrocketing since Christmas week 2000, with no end in sight. Forecasts range from $50/pound to well above $100/pound. Few believe the spot uranium price will go lower in the near future.

It?s become a fun game. Every Tuesday night (Monday afternoon, if you are a subscriber to the Ux Consulting), you will see the spot uranium price posted on the company?s front webpage. Moments later, the Yahoo and other Internet chat boards light up with commentary about the current uranium price and where it might head next. The spoiler is that TradeTech LLC issues its spot uranium price on Friday to subscribers and to the general public on Sunday night. Investors have been betting on the price swings of their favorite junior uranium stocks (more leverage, more risk/reward) by trying to second-guess the uranium spot price. Now, you can find out exactly how Ux C arrives at their weekly spot uranium price, from the president of Ux C, himself: Jeff Combs.

StockInterview: How does Ux Consulting arrive at your weekly spot uranium price?

Jeff Combs:
We have a pretty specific definition. What we?re looking for is the lowest offer of which we are aware, at around the time we publish the price. The quantity being offered has to meet certain parameters. It has to be a certain size transaction within a certain timeframe. So we?re not really trying to cover transactions, per se. Obviously, where there is a transaction that takes place, there?s an offer embodied in that. We?re really trying to capture where the market is going based on current offers, rather than where it has been.

StockInterview: So is your published spot price more of a predictor than an actual trade?

Jeff Combs:
It?s a predictor only in the sense that the next deal is likely to be done at the Read more…

I want to buy the Foreign Currency and Trade in india (daily Buying and selling), Is there any Restriction in that in RBI act or other Specified Act’s?

We talked, in a taped telephone interview at his home in Singapore, with Billionaire Jim Rogers, legendary commodities trader, who picked the bottom of the commodities bull market in 1999. With George Soros, Jim Rogers co-founded the Quantum Fund in 1970.

Over the next decade, Quantum Fund grew by more than 3,300 percent. Rogers retired, later a guest professor of finance at the Columbia University Graduate School of Business, and still later circumnavigating the globe to firsthand discover new investment opportunities. He is widely and often quoted in the media about his views on the commodities market. Bestselling author, investment biker, adventure capitalist and widely followed, Jim Rogers talks about what he’s now investing in.
StockInterview: Is the United States heading toward the same demise as previous colonialists: England, France, Holland, Germany and even previous world powers, such as Spain and Portugal?

Jim Rogers: If all powers, which have risen, have eventually peaked, plateau?ed, and then declined, we of the U.S. certainly have things going on which would indicate that we are. I don?t think anybody would dispute that we are a mature economy and a mature society. Whether we?re still growing or not is another question. I see many factors where we?re overextended financially, overextended geo-politically, and overextended militarily. I would suspect the U.S. is in a plateau phase, and perhaps has even gone over the line and is in a decline, certainly on a relative basis.

StockInterview: Who, then, would replace the U.S.? Russia, India, Japan or China?

Jim Rogers: Not Russia. No, Russia is a disaster spiraling downward into a catastrophe. I see little hope for India replacing anybody. India is more likely to break up into a few countries in the next few decades than it is to become the world power. Japan has serious demographic problems. Japan?s population is in decline for the first time in recorded history. Unless something happens demographically in Japan, Japan is going to have huge problems in the next few decades. They?ve got gigantic internal debt, which somebody?s Read more…

QUESTION: what do North-American real property owners have to do with the Middle East conflict? ANSWER: everything and anything they can possibly imagine.

Fluctuations in the world economy are largely driven by confidence. A changing level of public confidence is the ultimate driver behind much of the variation in individual and national incomes, in employment rates, in corporate earnings, in interest rates and in many other measures of the world economy. All the more so when nations, and indeed entire continents, are as economically intertwined as nowadays. In these times of globalization, the political-economic policies of the European Union, for good or bad, are exported to North America. Unrest in China or a terrorist attack in Mumbai are reflected in the public confidence of financial and investment markets. A more and more despotic and dictatorial Putin has the effect of altering the commodities markets by undermining investors’ confidence worldwide.

But there is nothing, nothing at all short of another September 11 disaster that works so much as an impediment to financial and real estate markets in North America than a conflict in the Middle East. And this week’s attack of Lebanon on Israel is yet another proof of it. Just take a look at the dive of the Dow Jones of these past few days. Just take a look at the spike of the price of crude. To be sure, it is not so much the Lebanese or Hizbollah per se that kill investors’ confidence in North America. Afterall the Lebanese or Hizbollah are, taken all and by themselves, nothing more than a bunch of ignorant, fanatical boors. But it is what’s behind them that worries Capitalism.

It’s the crude, dude!

There is a very specialized field of Economics, known as ?Behavioral Finance’, which applies scientific research on human and social cognitive and emotional biases to better understand economic decisions and how they affect market prices, returns and the allocation of resources. Behavioral Finance is the heart of Capitalism, the pump that moves money worldwide. To better realize how important is Behavioral Finance, one must understand that one of the tenets of Capitalism is that democracy has significant indirect effects which contribute to growth. Democracy is associated with higher capital accumulation, lower inflation, less political instability, and greater economic freedom. Anytime democracy is threatened either by war, terrorism or unwarranted attacks to free and soverign countries, even in places as far away as the Middle East, Capitalism grinds to a halt. Capitalism abhors the uncertainty created by political instability.

This particular concept is very clear to the ?Masters of Capitalism’ – all the American Administrations since the end of WWII. And of all places on the planet, no one is as important to Capitalism as the oil fields of Islam. This is the reason for American direct political involvement in the Middle East since mid-1947, following the departure of Britain from Palestine and the creation of the State of Israel. This is also one of the key reasons behind Washington’s intervention in Iraq – to take control of that country’s massive oil resources. Controlling the region in order to ensure US access to its ample oil resources has been one of the key features of American foreign policy for decades, dictated in large part by Arab flimsiness and unreliability. And in light of this policy, a strong, powerful and nuclear Israel has been and is the best sentry America can have in the region. Thus the USD 4 billion plus that America shells out to Israel annually in loans, grants, financial aids and military armaments, as well as the political support at the United Nations (another unreliable organization in large part financed by America).

Oil is essential to the economies of the industrialized world, at least for now. Yet it is a finite resource, and there is less of it in the Earth’s crust than the general public probably wants to realize. We have at least enough to last for another few decades – although that is not a huge amount of time, considering how central oil is to our lives. Furthermore, while we are not about to run out of oil, we may soon run out of cheap oil. That is, oil which can be pumped out of the ground without great difficulty, and that therefore can be brought to markets at the sort of prices we have become accustomed to in recent years. In the coming decades, we can expect an intensified international competition, even military rivalry, over the increasingly valuable remaining reserves of cheap oil, most of which are located in the volatile Middle East.

In light of this geopolitical and economic context, naturally one might expect a relation between oil and house prices, since high oil prices Read more…

Year 2005 brought an unexpected success for the real estate industry in India. Prices sky-rocketed in multiples of last year prices. The boom maintained its pace in year 2006 and doing well. The 100% Foreign Direct Investment opened gates for foreign investors with a promise of lucrative returns. The real estate infrastructure is flourishing by continued supply of foreign exchange to the building industry investment funds. Some real estate firms like Dubai based “Emma r” were few of taking advantage of this Foreign Direct Investment (F.D.I.) relaxation.

Some reports surfaced the fact that Indian Real Estate market will be growing to a US$102 billion in the next 10 years from current US$14 billion. This growth is not unexpected given the professionalism in government policies, new favorable demographics, better financing products and increased purchasing capacity. Cities like Delhi, Mumbai, Bangalore, Pune, Hyderabad and Punjab are likely to grow 600% in terms of commercial spaces. The residential sector has enormous amount of townships on the way by big players like Uni-tech, Omaxe , D.L.F. and T.D.I. with their promising projects. Some builders are even coming up with specialized and themed commercial and residential developments like home appliance
malls, auto malls, food plazas and many more.

M.V.L., the real estate division of consumer electronics giant ‘Media Video Limited’, is launching a US$400 million IT Park project called ?Softech Village? in Gurgaon. The park ?Softech Village? is scheduled to be completed in 24 months. The project will offer around 400000 square feet to information technology firms seeking a foothold in India.

The A.P. State Government is now turning attention to the hardware sector. The State Government has identified 1,200 acres of land for promoting the hardware sector to woo companies, along with plans to locate few special economic zones for IT companies.

Gujrat is also not out of this boom. An Special Economical Zone will come up on 127.9 hectares on the Ahmedabad highway.Ahmedabad based real estate business major, N G Group, has proposed to build special economic zone (S.E.Z) at the cost of US$414 million for industrial machinery and ancillaries.

I.C.I.C.I Bank, India’s largest private sector bank introduced Integrated Real Estate Services through which you can capitalize on the Indian real estate boom. With their wide geographical reach, they are able to invest money across sectors and cities. Transparent and credible real estate solutions are welcoming. A vast experience and expertise, a strong network of Read more…

The bubble is coming! The bubble is coming! Yeah, right ? and so are the aliens, at least those belonging to the Empire of the Rising Sun.

In the general order of things, when short-term interest rates of U.S. Treasury bonds exceed long-term rates, market sentiment suggests that the long-term outlook is poor, and that the yields offered by long-term fixed income will continue to fall. This generates an inverted-yield curve, typically an indicator of a pending economic recession. So far, however, there has been no inversion of any consequences in the yield terms of U.S. Treasury bonds as measured from the 91 days through the 30 years redemption periods. In addition, long-term rates are behaving very, very well partially because of the tremendous demand for long-term treasuries that has been coming from places like Japan.

Clearly, most real estate investors care about the future of interest rates, and so do most lenders. In the United States, the Treasury yield curve is the first mover of all domestic interest rates and an influential factor in setting global rates. As governments compete with corporations and lending institutions to attract investors in the open financial markets, any bond or debt security that contains greater risk than that of a similar Treasury bond must offer a higher yield. For example, the 30-year mortgage rate historically runs 1% to 2% above the yield on 30-year Treasury bonds. While this is true to a certain extent, it has not influenced the spread between short and long-term rates in the beginning months of 2006. As long-term rates on treasuries are stationary, the recent hikes of interest rates seem to have affected only the short-term bond rates.

The Treasury yield curve reflects the cost of U.S. Government?s debt and is, therefore, ultimately a supply-demand phenomenon, central to the Fed?s monetary policy. If the Fed wants to increase rates, it supplies more short-term securities in open market operations. The increase in the supply of short-term securities restricts the money in circulation since borrowers give money to the Fed. In turn, this decrease in the money supply increases the short-term interest rate because there is less money in circulation (credit) available for borrowers. Which is exactly what has happened in the first few months of 2006.

But two additional very important events have also occurred, concomitantly. First, Japanese investors have and are snapping up U.S. treasury long-term bonds at a pace almost double that of equivalent long-term Japanese treasury bonds. Secondly, Chinese investors are beginning to do the same thing. Much to the dismay of Beijing, who recently announced its intention to issue long-term treasury bonds worth some 100 billion Yuans to finance mainly infrastructure development, science, technology and education facilities, environmental improvement and ecological conservation projects and technological upgrading in enterprises, Chinese investors and savers prefer not to convert their dollars into Yuans. Even New Delhi is getting into the bond game. India ? which all and by itself sits on a pile of some US $150 billion ? is purchasing US Treasury long-term bonds and reselling them to Indians for a mark-up.

Bottom line, therefore, is that the only ones who seem to be worried about the American debt are, well … the Americans. Everybody else seems to be willing to give the U.S. Treasury all the credit in the world, literally. Which is not only a political vote of confidence for Washington but also, in retrospective, makes a lot of sense if one thinks about it. Since, if you are a non-US national sitting on a pile of US Dollars, and are looking to invest into low-risk securities there is no better place to invest your money than into debt instruments guaranteed by, well ? the United States Government. Which fact is sure to lighten up with joy a great many Confederate faces in the Bush Administration, who are beginning to see their financial and foreign policies vindicated, at last.

How does all this affect American real estate consumers?

For one thing, if investors of the Asian Tigers are willing to inject their ?Godzilladollars? back into the U.S. economy basing their decisions only on the financial strength and good reputation of the U.S. Treasury, and without a corresponding increase in U.S. bonds long-term interest rates, it Read more…

The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE.

The 30 stock sensitive index or Sensex was first compiled in 1986. The Sensex is compiled based on the performance of the stocks of 30 financially sound benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the stock market was the liberal financial policies announced by the then financial minister Dr. Man Mohan Singh.

The up-beat mood of the market was suddenly lost with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of Indian stock market diverted huge funds from banks through fraudulent means. He played with 270 million shares of about 90 companies. Millions of small-scale investors became victims to the fraud as the Sensex fell flat shedding 570 points.

To prevent such frauds, the Government formed The Securities and Exchange Board of India, through an Act in 1992. SEBI is the statutory body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio managers investment advisors etc. SEBI oblige several rigid measures to protect the interest of investors. Now with the inception of online trading and daily settlements the chances for a fraud is nil, says top officials of SEBI.

Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005. Many foreign institutional investors (FII) are investing in Indian stock markets on a very large scale. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. Experts now believe the sensex can soar past 14000 mark before 2010.

The unpredictable behavior of the market gave it a tag ? ?a volatile market.? The factors that affected the market in the past were good monsoon, Bharatiya Janatha Party?s rise to power etc. The result of a cricket match between India and Pakistan also affected the movements in Indian stock market. The National Democratic Alliance led by BJP, during 2004 public elections unsuccessfully tried to ride on Read more…

U.S. Federal Reserve Chariman Ben Bernanke stated lately that the enormous U.S. trade deficit that the U.S. has incurred over the years is nothing to worry about because it merely reflects global savings patterns. He states that emerging economies has a huge glut of savings and thus the U.S. necessarily must have a great debt to balance out the rest of the world