Franklin India Smaller Companies Fund - NFO -

Mail received from my broker
Franklin India Smaller Companies Fund - NFO
Take A Small Step…Into India’s Bright Future

Issue opens: November 16, 2005 Issue closes: December 14, 2005

Franklin Tempelton Investments (India), one of the leading fund houses* in the country in launching a new equity fund called – Franklin India Smaller Companies Fund (FISCF). It is a 5 – year closed end fund that seeks to provide long-term capital appreciation by investing in mid and small cap stocks. The initial issue period at Rs .10 will be from November 16, 2005 to December 14, 2005, and the fund will provide fro liquidity every six months.

‘The India Growth ‘ story has been gaining wide spread acceptance in India as well as the world, on the back of strong economic and corporate fundamentals. Smaller companies (those with a market capitalization lower than the 100th stock in S & P CNX 500) in particular are expected to benefit from the structural economic shift being witnessed in recent years. However, given the liquidity levels and the stages of business cycle these companies belong to, one needs to take a long-term view to reap the complete benefits of potential growth. FISCF through its closed end nature and focus on smaller companies help investors do exactly that. We believe that this unique fund should be part of every investor’s equity portfolio given the advantage that it offers

Typically one of the problems faced while investing in mid and small cap companies is the lack of adequate research. The investment team in Templeton has built an extensive research database of smaller companies over the past decade or so which will come I handy while managing FISCF. The rich experience of managing one of the largest * and oldest mid cap funds (Franklin India Prima Fund) will be available to investors in the new fund.

Why invest in FISCF?
Smaller companies offer higher potential growth: Historical evidence suggests that stocks of smaller companies (mid & smaller cap) exhibit higher growth over the long term, compared to large firms. Moreover, smaller companies are not as widely researched as their larger counterparts, which mean there are opportunities to uncover companies at an early stage in their development, before they are discovered by the markets.

The closed end advantage: The closed –end nature of the fund would mean that the investment team can take a long-term perspective, without getting impacted by asset flow in and out of the fund. This is especially useful while investing in smaller companies, given the possible volatility in earnings over short term and consequently their share prices. There is an option to withdraw investments in part or in full every six months during a pre –determined 7-day period, to meet any urgent needs (subject to applicable charges).

Equities deliver: There is a growing global consensus about India’s potential to become one of the largest economies in the world. The recent strong economic growth places India amongst the fastest growing economics in the world and key drivers such as –investment led by corporate India & infrastructure spending, increased consumption driven by positive demographics and global outsourcing, are expected to help sustain this growth.

This can help corporate India in sustaining the robust earnings growth witnessed in recent times, which will reflect in their stock prices. As a result, equities as an asset class are expected to provide superior risk –adjusted returns over the long term, not withstanding the short-term volatility.

Tax Benefits: The absence of any long-term capital gains tax is a key advantage for long-term equity investors (however, investors are liable to pay Securities Transaction Tax as applicable.)

While the over all investment philosophy of FISCF will be in line with this, the main difference would be that the investment team can make decisions without the pressure of dealing with constant fund cash flow considerations. In that sense, Templeton Mutual Fund will be looking to take advantage of the closed –end nature of the fund to focus on long term opportunities in the mid and small cap space – companies that are strategically placed to take advantage of the closed –end nature of the fund to focus on long term opportunities in the mid and small cap space – companies that are strategically placed to take advantage of robust economic growth in India and the global outsourcing trend. We believe that such a product would be ideal for investors looking to participate in the potential rapid growth of smaller companies.

Over the years, Franklin Tempelton has used a disciplined and process –driven approach to investing that has helped us in identifying companies with good long term potential and in providing consistent returns to our investors for over 11 years. Franklin Tempelton is one of India’s leading mutual funds with over Rs. 16,513 crores of assets under management and an investor base close to 11,00,000 (as of October 31, 2005). It manages one of the most comprehensive ranges of mutual funds (33) catering to varied investor requirements, and offering different investment styles to choose from. It has offices in 33 locations across the country.

Summing Up
Smaller companies offer the potential for higher growth, but one needs to choose the right companies with a long-term perspective. Franklin India Smaller Companies Fund does this for you in single investment. To invest, or find out more about this fund, call your investment advisor or nearest Investor Points, today.
Key Facts about the NFO
Min. Investment Amount :Rs. 5000
Load Structure :Entry –Nil.

CDSC –On redemption /Repurchase /Switch-out before maturity of the fund.
Redemption period (from the Date of allotment)
As % of NAV
Upto 12 months 4 %
After12 months but upto 24 Months 3%
After 24 months but upto 36 Months 2%
After 36 months but upto 48 Months 1%
After 48 months but upto 54 Months 0.5%

This week options

This week options

This week I am going try following options.

Buying Nifty Dec 2650 calls @48-52 . If Nifty goes past 2700 I would break even and I expect a Rs 30 profit in 15 to 20 days. This will work only if there no bad news and stability in oil prices.

Also going to sell ONGC Nov 1020 call @ Rs. 16 – 17 with a stop loss of 1040 . I hope ONGC price would go below 1000 in next four days.
Lets see my luck.

Brokers view


The markets opened slightly weak in the morning yesterday
but recovered immediately and continued its northward
journey throughout the day. The Nifty futures were however,
not able to keep pace with the spot and the discount increased
further in Nifty futures indicating sluggishness in the rally. The
Put call ratio of open interest has increased slightly due to
increased addition in put options in comparison with call
options. The market is expected to open on a positive note
today. Traders are advised to trade long if Nifty is able to
sustain abov e 2470 levels for targets of 2485 and 2500. On the
other hand if Nifty is unable to sustain above 2445-2450 levels
then we might see the index slipping till 2430-2435 levels.
Traders can also contemplate trading short from around 2500
levels with a stop loss placed above 2505.
The supports for Nifty are placed at 2455, 2445 and 2430 levels
while the resistances are placed at 2470, 2485 and 2505 levels.

Stocks with Bullish Engulfing Patterns for week ended 4.11.2005

Stocks with Bullish Engulfing Patterns for week ended 4.11.2005
The following stocks have been trending downward in the short and intermediate terms and have formed a bullish engulfing pattern in charts. The probability of an upward reversal in prices has increased. Trade at your own risk.
Security Name Close
AARTI INDS 140.00
BERGER PAINTS 59.10
DS KULKARNI 127.10
GIC HOUSING FINA 43.85
JBF INDS 69.50
JINDAL POLY FILM 293.45
RAJ SPINNING 125.60
SSI LTD 77.30

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