Parchayi.com – Personal Finance Simplified

Recently I read reports that PowerShares plans to introduce an India ETF in the US based on the Halter Index (HXI). However, HXI is not really an India Index. It is an index of ADR’s and companies in the US whose primary business is in India. The index consists of very few components and doesn’t really represent the Indian market as a whole.

What I would wish for is an ETF, based on the MSCI India Index – They have one in Singapore, how about giving us one in the US?

However, it should be noted that India Fund Inc. (IFN) and the Morgan Stanley India Investment Fund (IIF) have both been outperforming the Indian indices (BSE and NSE). I would assume they are also outperforming the MSCI Index?

I have my account at Scottrade and the India Fund Inc. (IFN) rights got deposited today (instead of last Monday). I called up Scottrade (Richmond) because rights offer subscriptions can only be done on the phone but they can’t do anything about the offer now because ‘it is not in their system yet’.

Last year, unlike now, everything happened on time except that Scottrade took money out to pay for shares from the rights around one month later than the shares were deposited into the account! I’m hoping they do that this year too

The India Fund Inc. announced its rights offering on Friday. Shareholders as of 3rd of July receive 1 right per share. For every three rights you can buy one share of IFN at 95% of NAV on Aug 4. As of Friday (16th Jun), the premium on IFN was 32%. Assuming this premium stays high until Aug 4, you have a significant return for using the rights offer to buy more India Fund.

India Fund is up almost 5% despite another drop in the Indian Indices, with the BSE ending below 9000. This generally indicates a positive start tomorrow for Indian indices.

INTC and AMD, both of which I mentioned yesterday are up over 3% after analyst upgrades.

Panera Bread, unfortunately is down to 61$, but well can’t have it all go up in a day, can I?

Today the Indian market (^BSESN) jumped 514 points (5.5%). A similar gain is not noticed in the India Fund Inc. (IFN), probably because it did not fall yesterday along with the Indian markets. Does mean we will see continued improvements? Well, who knows. We saw several worse down days than today is an up day. I’d wait for a few more gains before jumping in. The volatiliy, though not uncommon with India Fund and the Indian markethas been larger than usual in the last couple of months. I’m still hanging on to IFN.

The Indian stock market has taken more beatings over the last two days, sending IFN down along with it. The Indian index closed below 10000 again today and all gains since Jan 27 have been erased in just over a week.

Despite today’s 200 point drop, IFN has not similarly dropped possibly due to strangth in US markets and the fact that it is already at early January levels. Morningstar still shows a premium of over 30% for IFN! Is it time to get in? I’d wait for several consecutive days upwards before buying. However I do feel that the current levels for the Indian indices are reasonable.