Created: Thursday, 28 August 2014 13:35
Gold jewels play an important role during festive season in India, and buying gold is regular habit prevailing in the country as the prices of precious metals is in a locked in period for a few months before the festivals arrive at.
In the events of 2014, the market scenario expected this year is unconventional as gold is trading below Rs. 28,000 per 10 grams in refraction to global trading at $ 1,280 per ounce.
Despite the prevalent rates, a commodity analyst said, "Gold is correcting its price in the market with consolidation to the global prospects. Opportunities for buying gold at a lower price are still to come."
Though there is no fixed price for gold trading, researchers pinpoint it at between the trending level of $1,180 and $1,200 per ounce which is the production cost now.
One of the factors which will play an important role in balancing gold prices is strengthening of interest rates in US. Though, gold price is falling in the market, analyst are expecting "hardening in US fed interest rates" which will add more pressure on price of yellow metal to decline in trade.
In simple terms, one can understand it through economical law of demand which shifts from lesser attractive investment to higher one because of its higher value or revenue. In market concern, when secured financial asset that is US bank accounts and bonds will return higher on investments after which investors will switch from safer havens of gold to financial tools. Hence, price of gold is likely to fall on increasing interest rates in US.
In global markets, crude oil is trading higher than its prior levels injected since tensions evoked in the middle east. In the last month, price of Brent crude dropped down from $111 per barrel to $100.89 per barrel. Whenever oil prices drop it is popular trend that price of gold will slip as there is an indication of deflation in the market overview.
Gold is struggling in the weakening market now where we are expecting a correction in the price. A Mumbai based asset management company's founder said, "If anyone is planning to purchase gold in a month or two, it is better to wait for some time.” However, there is a blinking warning that it is important to wait but be careful it is not too long, i.e. until the last day when the demand starts rising.
In case of gold jewelry purchase consumers should hold them as long-term securities because small changes in the price of metal are unable to pay off the making charges which amount to 15 to 20 percent of total price.
Created: Wednesday, 27 August 2014 13:39
Paint manufacturing shares are posting in growing revenues which is citing commencement of bull run in the sectoral industry following the hiking stocks of paint companies' on BSE. Stocks of top paint manufacturers including Asian Paints, Kansai Nerolac, and Berger Paints are performing over the highest expectations of market analyst starting last month and will probably continue the trend in the coming time.
Kansai Nerolac premiered first in the market as the shares of the decorative paint industry set a new life time high in July. Asian Paints and Berger Paints followed the league as their stocks marked fresh heights on the stock exchanges as early investors chipped in to buy equities for medium to long-term gains.
Painting industries growth is standing on pillars of strong demand and recovery in sectoral growth. The companies backed up with high demand destined to grow as their key pillar, demand of paints is generally higher during the festive season, on the way to Indian markets.
The industry advocates a profitable investment as falling of crude oil prices is another profit jumping news. Crude oil produces titanium oxide which is a key ingredient in production cycle of plastic paints.
In the first quarter of FY 2014-15, the three major companies in painting producing sector reported higher revenues pushed up by growth in volumes of sales. Industrial recovery followed country's economic growth where companies worked up to regain exploding market share.
Kansai Nerolac headed the industrial sector as it captured 45 percent of total revenues. Berger paints and Asian paints shared 20 percent each of the total profits flourished in the segment. Nerolac is leading Indian markets and standing among the top three positions in the world decorative and painting industry.
Berger is walking on the strategic motive to capture premium paying audience by creating higher brand equity value in the market over the previous year. The company bought out the market share under influence of small dealers unable to touch Asian Paints brand loyalty customers.
Asian paints is gaining on its strong position in the market which is consistently paying off its bills. The company nurtures on its key strength of strong pricing power due to consumer loyalty and trust.
It's expansion plan in the vertical of providing home accessories like modular kitchens and faucets did not produce estimated results according to some opposing analyst lower than optimistic analyst who are supporting the group.
Overall, the company is making a small investment compared to its large variant of working capital of 3.5 percent. Therefore, the company is still joyous on its return from painting vertical.
Economists are looking at the sector with blue eyes hoping to see further growth in the market of decorative paint companies who are launching new products. Key strength backing up the market growth enlisted is availability of premium products, regular demand of product and consumers high purchasing power.
Asian Paints is trading over 32 times FY-16 predicted profits, Berger Paints over at 27 times, and Kansai Nerolac up at 24 times, against their previous averages at 30 times, 20 times and 25 times, respectively. All paint companies are gaining after they prospects of growth improved in the market.