Do you have any recommendation (or just opinion or information) for online discount-brokerage service for the NRI’s to trade in Indian market?

Thanks,

- Sambit

Most of the big banks in India like ICICI (IBN) and HDFC Bank (HDB) offer online trading at reasonable rates. The other online brokers I hear about a lot are Indiabulls and the very creatively named ShareKhan. I have not had any first hand experience with them and hence cannot recommend any of them. I would be interested in hearing about your experience if you decide to use one of them.

A Non-Resident Indian can open an NRE or NRO account to trade online. Given below are a couple of helpful links,

http://content.icicidirect.com/product_nri.asp

http://www.nriol.com/resources/faqs/banking.html

An NRE account could be a great way to get a higher rate of interest and hedge against further declines in the dollar provided the RBI stops pegging the rupee to the dollar. 

You mention that you’ve been reducing your position in WIT over the last few months. Is it your feeling that the high P/E offshorers like WIt and INFY will have slower growth from now on?

CTSH has an even higher P/E ratio, but after a 2007 pullback it seems to be rising again. What is so special about CTSH other than it seems to be owned entirely by US institutional investors?

INFY went through a sale of insider stocks recently in order to increase the number of ADR stocks. I thought that it was to make it more attractive to institutional investors and to make it eligible for Nasdaq 100. How can one tell if institutional investors are increasing or reducing their position? The Yahoo Finance figures on ‘Major Holders’ is as of Dec 31, 2006.

Thanks.

Thomas

Apart from Indiabulls and Sharekhan that Asif mentioned, GeoJit is another good online broker option.

Anis.

I do expect growth at companies like Wipro (WIT) and Satyam (SAY) to slow down as the US economy slows down. They have been taking steps to diversify their revenue sources geographically but more than half the revenue still comes from the US. To validate the effect of this slowdown on consulting and staffing companies, check out the disappointing outlook mentioned by Kelly Services (KELYA) and Robert Half International (RHI).

The declining US dollar has also been great for outsourcing companies as the rupee was pegged ot the dollar and this inflated revenues coming in from Europe and other parts of the world. With the rupee now gaining against the dollar and the dollar close to an all time low against the British pound, foreign exchange will actually negatively impact their earnings.

There is nothing special about CTSH as it is in the same business as Infosys, Wipro, Satyam and TCS. The company has executed very well and since the shares do not trade in India, there is no premium associated with them.

I was not aware of the insider sales at Infosys to increase the number of ADRs. Thanks for sharing that with me.

Regarding institutional trading activity, Thompson Financial’s I-Watch service is an excellent resource. Check out this FAQ about how to profit from using I-Watch and this 1-week chart for Infosys.

With the outsourcing boom and all the major Indian IT companies generating a lot of free cash flow, TCS probably did not see the need the raise additional capital by listing on the Nasdaq or NYSE.

I plan to post another blog entry about TCS in the next few days that may be able to address your question further.