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Thursday, November 30, 2006
FII: FII - Rs 63 Cr
FII Gross purchases Rs 1907 Cr Gross Sellers Rs 1970 Cr Net seller Rs 63 Cr
Our View:
Markets were down one way yesterday so its not surprising to get a negative FII number. However the flows are warning and thats not encouraging at all
Close: Sensex choppy on FNO as is always !
Cautious FNO settlement day; Good economic figures helped sentiment as did global cues
Market remained ranged through out the day because of FNO settlement day except in the last hour of the day when short covering intensified and helped sensex to close handsomely. Positive Global cues helped the sensex for a good start but inflation concerns and selling in Energy stocks because of cut in Petrol and Diesel prices made the market choppy. ONGC and Reliance were weak all day long. The high volumes during the final hour of trade was triggered by the reports of strong performance of the Indian economy during the second quarter of this fiscal. As reported by the Central Statistical Organisation (CSO), India's GDP growth during the quarter ended September 2006 was around 9.2% which shows that economy continues to do well and that is reflected in the figures.
Sensex ended up by 80 points at 13696.31. It was helped up by gains in HDFC Bk (1118.4,+3 percent), Wipro (598.95,+3 percent), TCS (1191.85,+2 percent), Dr Reddys (750.8,+2 percent) and Cipla (253.85,+2 percent). Restricting the gains were Ranbaxy (372.3,-2 percent), TISCO (467.95,-2 percent), Hindalco (173.35,-1 percent), Guj Ambuja (144.15,-1 percent) and ACC (1132.65,-1 percent).
China's currency rose to a fresh high against the US dollar on Monday, as the central bank set its rate at 7.8402 yuan per dollar, the highest level since the current exchange system was set up in July 2005. China allows the dollar-yuan rate to move no more than 0.3 percent above or below the daily parity rate each day. Other currency pairs -- the yuan's values against the Japanese yen, Hong Kong dollar, euro and British pound -- are allowed to move within 3 percent of the parity rate each day. Beijing has allowed the yuan's value to rise by about 3.33 percent since it revalued the currency by 2.1 percent in July 2005, ending its longtime peg against the US dollar. Washington has been prodding Beijing to let its currency float more freely with market forces, arguing that controls keep the yuan undervalued, giving Chinese exporters a price advantage overseas and adding to China's trade surplus with the US, which the US side put it at US$202 billion last year." This has implication for the Textile companies. Alok, Raymond, Arvind, Century are the large plays Mostly all stocks in this sector ended positive with good gains made through out the day.
For IT companies, time is money. A 30-minute increase in working hours could net them a 2% hike in profitability. For the software professionals at HCL Technologies, the daily working hours have increased by half an hour- a move that will have a direct impact on the company's profitability. That's because 70% of HCL's business is based on time and material billing. In other words, the pricing is linked to man-hours. And so 30 minutes more will result in nine billable hours as against the earlier eight and half. Its manpower shortage which is hitting the industry and these are ways of increasing the usage of current manpower. However it would be important to understand whether the professionals are already working overtime which will not bring in the desired effect. TCS has cut the number of annual vacation days for its India-based employees to 16 from 22. Reduction of vacation days will bring in productivity benefits for the company. TCS ended the day up by 2.6% while HCL T was up by 1.36% at the time of close.
Bharti Airtel and Google announced a strategic partnership that is expected to set new grounds in mobile search and help redefine mobile internet in India. As a part of the agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal. Google will also incorporate advertising through its Mobile Ads product on the Airtel Live mobile portal. The Google search engine on Airtel Live mobile portal will enable the Airtel users to use the Google search engine to easily access content. The stock ended the day up by 1.8%.
Technically Speaking: Overall trading was choppy but ended firm. Volumes were low at 3954cr but is normal for a FNO settlement day. The breadth has been in favor of Decliners as they were at 1.1 times that of Advances. The Resistance was at 13756 -13808 while Support at 13641 -13579 levels.
Performance as usual was fantastic. DTP calls on Prithvi, Bhel, Nifty Futures and ICICI Bank all booked with superb gains while a call on Parsvanath hit the target. See our impressing track record and subscribe. Wow call on Ahlcon Parentals was booked partially with more than 20% gains in a day while it was a good day for Quickies with calls on R-systems booked with fabulous 20% gains in just 2 days and calls on CESC and Premier tyres all closed with superb gains.
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Mammoth plans ahead for Parsvnath Developers
After receiving a robust response during the subscription period from investors, real estate major Parsvnath Developers has listed with good premium of 80% over its offer price of Rs 300 per share.
Pradeep Jain, Chairman of the company, gives some insight to where the company is headed and informs investors about growth plans and future prospects of the company.
He says that the company plans to come out with 14 SEZs across the country, and have already received the government approval for 11.
He also notifies that the company will be developing 14 five-star hotels, the land for which is already acquired, and plans to complete this in the next 3-4 years.
Q: This is a big listing for you; more than Rs 550, but now your investors would want to know all the details of your land bank, which you could not quite talk freely about before your issue. Could you lay out where all the land banks are and what kind of reasonable market value one can ascribe to those?
A: We have land banks across the country; we are enjoying the truly pan Indian presence across the country. At present, we are working in 41 cities, 14 states in all the verticals, which includes integrated townships, shopping malls, office complexes, standalone housing complexes and the unique thing we are enjoying is the Delhi Metro.
The total-developing rights with the company as of today is about more than 180 million sq ft. Also, we are coming out with 14 SEZs across the country, and out of 14 SEZs we have already got approval for 11 SEZs from the Centre as well as from the State Governments.
A: In Delhi we are developing a Metro. In Gurgaon we are developing a number of projects, and also in Noida and Greater Noida it is the same. If you divide 108 million sq ft area, about 40% of it is in North India and the rest of the area is in other parts of the country like Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, Maharashtra.
We are also on the way to set up 14 five star hotels across the country for which the land is already acquired by the company. The blueprint is also ready and we are on the way to sign the management contract with the operator and then we will start. We are expecting to complete all these hotels in three-four years.
Q: There are some research reports about valuations of your company and some of them predict that in FY07 you could actually go on to get revenues of a couple of thousand crore which could go up to Rs 4,000 crore of actual revenues realized from your projects by FY08. Are those reasonable estimates you think?
A: I am not going towards the number, but from the last five years our annual growth is more than 140% and we keep continuing with that because we have a big land bank. A lot of projects are already secured by the company. We plan that our results will be better than the numbers you have just mentioned.
Q: Are you saying that it could be even more than Rs 4,000 crore of booked revenues in FY08?
A: I am not talking about the numbers, but in FY06 it was Rs 653 crore and historically, for the last five years our annual growth is more than 140%. We are expecting more than that in time to come.
Q: Could you break up your expected cash flows without going into specific numbers on how much would come from residential development, commercial property development and how much from other shopping malls, multiplexes that you are seeking to develop?
A: As far as the commercial side goes, we are leasing out all the metro stations- not selling. The seven properties out of eleven are on the way to be completed by March 07. The rest of the properties will be completed in next two and half to three years. And related to the other commercial developments, 60-75% we will be leasing and rest we are selling.
Talking about revenues, 70-75% of it will come from the residential side- either from the integrated township or standalone housing complexes- and 25% will come from others related to the lease rentals and from sale of the commercial places etc
Q: Of this 108 mn sq ft that you have in terms of a developable land bank, how do you see yourself staggering the sales over the next three-four years in terms of development and realizing the cash flows?
A: The construction of almost all the projects is going on but we foresee this 108 million sq ft area to be completed over a period of next three-five years.
Q: Will it be staggered towards the end of the fourth-fifth year or will it evenly spread out more or less over the next four-five years?
A: The completion of the projects is over a period of three-five years. The residential and integrated township revenues keep coming in during the year. The lease rental and the hotel revenues keep coming in regularly. Apart from this 108 million, as I have already said, we have 14 SEZs and from these 14 SEZs we have already got an approval for 11 SEZs. From these 11 SEZs, four are going to start this financial year and the rest in the next financial year after getting all the approvals from the concerned authorities.
Q: What kind of landbank acquisition programme do you have from hereon aside from developing, what you have on hand at 108 million sq ft, do you see yourself aggressively adding to your landbank over the next couple of years and what kind of capital expenditure would you have outlined for that?
A: It is very difficult to give you the numbers related to the land acquisition valuation but apart from this 108 million related to the SEZ about 257 million sq ft area to be added, which is not take much time to acquire and we are into the real estate as you know from last more than fifteen years and our business is basically to acquire the lands and to develop.
This is a continuous process with us after this 108 million even in these days, number of the tenders and the negotiations is going on and this keeps increasing day by day. We have very strong management team within the house to acquire and to go to the smaller town sites at tier II and tier III cities apart from the metros and we keep increasing the landbank in a big way time to come.
Q: Some analysts have valued at current market rates your landbank at 5,000 crore, is that an accurate assessment?
A: We are not in the business of selling real estate land as such; we are in the business of to selling or leasing out the finished products we develop. Analysts have worked out their valuations in their own way. But all I can say is that the cost to the company of 108 million sq ft area is less than Rs 200 per sq ft. Now you can do your own mathematics or the investor and the analysts can do their own mathematics to work out what is the valuation of the land and what is the realization valuation of the land today.
Q: Who is going to be the operator for these 14 five-star hotels?
A: We are talking to big operators globally, but so far we have not decided nor signed up with anybody.
Q: These are large hotel companies?
A: Yes, theses are large hotel companies with whom we are negotiating. Our hotel team is very closely working with the hotel operators and very soon we are going to sign up some of the transactions.
Q: Would it be a hotel management contract you would sign with them or would there be equity participation?
A: It will be purely management contracts; we are not offering equity participation to any of the operators.
Q: And this will not be done through a separate JV but through the listed Parsvnath Developers entity?
A: We are doing in a single balancesheet of Parsvnath Developers Ltd. We do not have the multiple JVs or multiple companies. Whatever I have spoken about will be done through Parsvnath Developers Ltd only, which is the listed company.
Q: How do you see yourself compared to the other big boys in the real estate space like Unitech and DLF, the comparisons are inevitable in your line, how do you see yourself, in terms of strategy, landbank, all of it?
A: The management of the Unitech and DLF are the well-wishers of my company. I started working twenty-three years ago as a real estate broker and I used to work with all those who are the big boys today in the market and with their blessings I am here. I am not comparing myself with them at all.Sharekhan Investor's Eye dated November 30, 2006
PULSE TRACK
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GDP clocks above 9% growth—better than expected
STOCK UPDATE
New Delhi Television
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs260
Current market price: Rs235
Karan Johar on board
In what is being touted as the first step towards launching a world-class general entertainment channel (GEC) NDTV today announced its partnership with Karan Johar's production company, Dharma Productions. Under the agreement, Mr Johar will be on the board of NDTV's GEC holding company, NDTV Venture, and Dharma Productions will hold an undisclosed equity stake in it.
Selan Exploration Technology
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs94
Current market price: Rs75
Relatively attractive
Key points
- Comparatively cheaper: Selan Exploration Technology (SETL) is comparatively much cheaper than the benchmark valuation of $10.7 per barrel of oil & oil equivalent (boe) of Cairn India at the upper band of its forthcoming public issue. Even as compared with its peer Hindustan Oil Exploration (HOEC), SETL is trading at one-third of HOEC's valuation.
- Efforts to monetise oil assets: Apart from the cheaper relative valuations, SETL is likely to get re-rated from the success of its efforts to monetise its oil assets. The company has invested Rs17.3 crore in the first phase of the development of its oil field that is likely to result in the commercialisation of four new oil wells.
- Maintain Buy call: At the current market price SETL trades at 13.3x FY2007 and 6.1x FY2008 estimated earnings. We maintain our Buy call on the stock with a price target of Rs94 (valued at $1.5 per boe).
SECTOR UPDATE
Real estate
Rather pricey
The much-awaited listing of Parsvnath Developers was quite heartening for the investors as well as the other real estate companies that have plans to raise funds through offerings in the domestic and/or overseas markets. Parsvnath's share price closed at Rs526 that works out to a premium of 75.3% over the issue price of Rs300 per share. The stock touched an intra-day high of Rs579 per share.
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IT and banking stocks lift market
Sensex Open:13631 High:13745 Low:13631
Led by the sharp appreciation in IT and metal stocks, the upmove in the index was also supported by the gains in the techs. The Sensex opened higher at 13745 but slipped in early trades. The market staged a smart bounce back after trimming 100 points in the afternoon. The Sensex finally wrapped up the session with gains of 80 points at 13696. The Nifty advanced 26 points to close at 3954. The breadth of the market was negative. Of the 2,628 stocks traded on the BSE, 1,337 stocks declined, 1,225 stocks advanced while 66 stocks remained unchanged.
Among the sectoral indices the BSE IT index led the pack with gains of 1.38% at 5107. The BSE Teck index was up 1.37% at 3560 and the BSE Bankex gained 1.29% at 7180. The BSE FMCG index closed with marginal gains. However, the BSE Metal index declined 1.13% at 8,880. The rest of the sectoral indices closed in negative territory.
Among the techs Wipro surged 2.74% at Rs599, TCS advanced 2.36% at Rs1,192, Financial Technologies gained 2.32% at Rs2,100 and Satyam Computers added 1.69% at Rs459. However, Mphasis BFL declined 1.20% at Rs263. i-flex, Patni Computers and Hexaware closed with losses.
HDFC Bank surged 2.87% at Rs1,118, Dr Reddy’s added 2.20% at Rs751 and Cipla gained 1.97% at Rs254. ICICI Bank, Reliance Communication, Bharti Airtel, BHEL and HDFC closed with marginal gains. On the other hand Ranbaxy declined 2% at Rs372. Tata Steel, Hindalco, Gujarat Ambuja, ACC, Reliance Energy, NTPC and Bajaj Auto also closed with losses.
Parsvnath Developers Ltd made its debut on the BSE and touched the day's high of Rs579 and a low of Rs482. The stock ended on at Rs526. The stock was sold at Rs300 in the public offer.
Over 64.99 lakh IDFC shares changed hands on the BSE followed by Lanco Infratech (38.33 lakh shares), Dena Bank (22.31 lakh shares), Hindalco (15.94 lakh shares) and ITC (15.40 lakh shares).
Contracts expiry fails to dampen sentiment
The market, which had softened from a peak, regained strength in the fag hours, the Sensex crossing 13,700 as buying resumed after the settlement of November 2006 derivative contracts. The November contracts expired today. As per reports, NSE F&O Open Interest had shot up by Rs 1,008 crore, to Rs 60,719 crore.
The 30-shares BSE Sensex finished with a gain of 79.58 points (0.58%), at 13,696.31. It was off 13,745.16, the day's high, reached within minutes of commencement of trade. Its low for the day was 13,630.58.
The S&P CNX Nifty rose 26.30 points (0.67%), to 3,954.50.
The market-breadth was negative, with 1,341 shares declining on BSE, compared to 1,217 that advanced. As many as 58 shares were unchanged. The BSE Small-Cap index closed at 6,647.08, a gain of 12 points while the BSE Mid-Cap index lost 6 points, to settle at 5,721.60.
The BSE clocked a turnover of Rs 3,954 crore, lower than Rs 4,409 crore on Wednesday.
Among the 30-Sensex pack, 18 advanced while the rest declined.
Private sector banking major HDFC Bank was the top gainer, up 3.21% to Rs 1,122, on a volume of 71,305 shares. It had moved in a range of Rs 1,102.90 – Rs 1,124. The BSE Bankex rose 1.30%; ICICI Bank (up 1.53% to Rs 870), SBI (up 1% to Rs 1314), Karnataka Bank (up 3.89% to Rs 129.50), UTI Bank (up 0.83% to Rs 475) and Kotak Mahindra Bank (up 1.86% to Rs 380) being the major beneficiaries of the rally in banking stocks.
IT shares witnessed renewed buying, with the BSE IT index being the top gainer among sectoral indices, advancing 1.38%, or 69.48 points, at 5,107.22.
Satyam Computers (up 0.73% to Rs 455), Wipro (up 1.70% to Rs 593) and Infosys (up 0.51% to Rs 2,168.20) advanced. The ADRs of the IT triumvirate, Infosys, Satyam and Wipro, rose between 0.5 - 1.8% on Wednesday. IT pivotals have surged in the past few days after reports that top Indian IT firms are chasing over a dozen deals on an average, the sizes of which range between $50 - $100 million.
Software major TCS rose 2.11% to Rs 1,189, after signing a 7-year deal worth $65 million for reorganising Somerfield's IT services. Somerfield is a leading UK-based, small-format food retailer.
Dr Reddy’s Lab rose 2.91% to Rs 756, as ICICI Securities reiterated a 'buy' on the stock, fairly valuing it at Rs 997. In a report released on Wednesday (29 November), ICICI Securities has revised upwards its FY 2007 EPS forecast for Dr Reddy’s by 33%, to Rs 43.60. It has revised upwards its FY 2008 EPS forecast by 6% to Rs 31.50. ICICI Securities expects strong earnings momentum to continue for Dr Reddy’s Lab over the next 3 - 4 quarters, on the back of a possible 180-day exclusivity for generic Zofran, and robust growth in the core generics business.
India’s largest private steel maker Tata Steel was the top loser, down 1.99% to Rs 467.50, as 4.36 lakh shares changed hands on BSE.
Index heavyweight Reliance Industries was down 0.24% to Rs 1,246.10, on a volume of 4.84 lakh shares.
Parsvnath Developers settled at Rs 526.30, on a high volume of 1.60 crore shares. It debuted on BSE at Rs 540, and surged to an intra-day high of Rs 579, the low being Rs 481.50. The real estate developer had priced its IPO at Rs 300 per share. The company's paid-up equity capital is Rs 181.60 crore. Face value per share is Rs 10. NSE has also admitted the scrip to its derivatives segment at a market lot of 700 shares.
Oil & refinery stocks slipped after the government announced a cut in retail prices of diesel and petrol by Re 1 and Rs 2, respectively, on Wednesday. This move will further hurt oil marketers' profitability. Indian Oil Corporation (down 3.74% to Rs 446), Hindustan Petroleum Corporation (down 2.72% to Rs 284) and Bharat Petroleum Corporation (down 2.88% to Rs 344) declined.
Among side-counters, Raipur Alloys & Steel jumped 20% to Rs 122.70, as Reliance Mutual Fund acquired 12.5 lakh shares at Rs 100.47 per share, vide block deals, on Wednesday. There were outstanding buy orders for 1.14 lakh shares at the upper limit, on BSE.
Leather products maker Crew BOS Products rose 2.13% to Rs 168, and Aztec Software advanced 1.75% to Rs 163.20 amid reports that RBI has raised FII-ceilings in both. While the apex bank has permitted 100% FII-buying in Aztec Software, it has been restricted to 49% in Crew BOS Products.
Gujarat Apollo Equipments surged 8.03% to Rs 197.10, extending Wednesday’s rally, as the company deferred the rights issue indefinitely on Tuesday. The company, in January 2006, announced a 1:2 rights issue at Rs 100 per share (premium Rs 90 per share), which entailed 50% equity dilution.
Crude oil prices eased for the first time this week on Thursday, but remained near a two-month high above $62 after a surprise draw-down in US winter fuel stocks and signs of solid economic growth in the world's top consumer. US light crude was 5 cents lower at $62.41 barrel, slipping after rising above $65.50 on Wednesday to its highest since 2 October, breaking free from the $58 - $62 confine, that has defined prices in the past two months.
All Asia/Pacific markets were trading in the positive, while European indices were a mixed bag.
The Nikkei average rose 1.23% to its highest level in more than two weeks on Thursday, as Honda Motor Co and other exporters advanced on upbeat US growth data and a weaker yen, and securities brokers such as Nomura Holdings climbed on the Tokyo market's rally. The Nikkei ended up 198.13 points, at 16,274.33, the highest since 14 November 2006.
Hang Seng index rose 0.96%, or 179.55 points, to 18,960.48.
The domestic economy grew by 9.2% in the July-September quarter from a year earlier, higher than market expectations of 8.90%, data released earlier today showed. The annual growth rate in the second quarter of the 2006/07 financial year was higher than the April-June rate of 8.9%.
On 28 November 2006, FIIs were net sellers of stocks to the tune of Rs 335.30 crore (gross purchases worth Rs 1894.80 crore and gross sales of Rs 2230.10 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 268.87 crore (gross purchases worth Rs 404.04 crore and gross sales of Rs 672.91 crore).
US stocks jumped on Wednesday, after the government raised its estimate for economic growth, and a surge in oil price lifted energy stocks, helping major indices recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74%, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92%, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81%, to end at 2,432.23.
Sensex settles on the cusp of 13,700
The market, which had softened from a peak, regained strength in the fag hours, the Sensex crossing 13,700 as buying resumed after the settlement of November 2006 derivative contracts. The November contracts expired today. As per reports, NSE F&O Open Interest had shot up by Rs 1,008 crore, to Rs 60,719 crore.
The 30-shares BSE Sensex finished with a gain of 79.58 points (0.58%), at 13,696.31. It was off the higher level after hitting 13,745.16, the day's high, within minutes of commencement of trade. Its low for the day was 13,630.58.
The S&P CNX Nifty rose 26.30 points (0.67%), to 3,954.50.
The market-breadth was negative, with 1,341 shares declining on BSE, compared to 1,217 that advanced. As many as 58 shares were unchanged.
The BSE clocked a turnover of Rs 3,954 crore.
Among the 30-Sensex pack, 18 advanced while the rest declined.
Private sector banking major HDFC Bank was the top gainer, up 3.21% to Rs 1,122, on a volume of 71,305 shares. It had moved in a range of Rs 1,102.90 – Rs 1,124.
Dr Reddy’s Lab rose 2.91% to Rs 756, as ICICI Securities reiterated a 'buy' on the stock, fairly valuing it at Rs 997. In a report released on Wednesday (29 November), ICICI Securities has revised upwards its FY 2007 EPS forecast for Dr Reddy’s by 33%, to Rs 43.60. It has revised upwards its FY 2008 EPS forecast by 6% to Rs 31.50. ICICI Securities expects strong earnings momentum to continue for Dr Reddy’s Lab over the next 3 - 4 quarters, on the back of a possible 180-day exclusivity for generic Zofran, and robust growth in the core generics business.
India’s largest private steel maker Tata Steel was the top loser, down 1.99% to Rs 467.50, as 4.36 lakh shares changed hands on BSE.
Index heavyweight Reliance Industries was down 0.24% to Rs 1,246.10, on a volume of 4.84 lakh shares.
Parsvnath Developers settled at Rs 526.30, on a high volume of 1.60 crore shares. It debuted on BSE at Rs 540, and surged to an intra-day high of Rs 579, the low being Rs 481.50. The real estate developer had priced its IPO at Rs 300 per share. The company's paid-up equity capital is Rs 181.60 crore. Face value per share is Rs 10. NSE has also admitted the scrip to its derivatives segment at a market lot of 700 shares.
Oil & refinery stocks slipped after the government announced a cut in retail prices of diesel and petrol by Re 1 and Rs 2, respectively, on Wednesday. This move will further hurt oil marketers' profitability. Indian Oil Corporation (down 3.74% to Rs 446), Hindustan Petroleum Corporation (down 2.72% to Rs 284) and Bharat Petroleum Corporation (down 2.88% to Rs 344) declined.
Crude oil prices eased for the first time this week on Thursday, but remained near a two-month high above $62 after a surprise draw-down in US winter fuel stocks and signs of solid economic growth in the world's top consumer. US light crude was 5 cents lower at $62.41 barrel, slipping after rising above $65.50 on Wednesday to its highest since 2 October, breaking free from the $58 - $62 confine, that has defined prices in the past two months.
All Asia/Pacific markets were trading in the positive, while European indices were a mixed bag.
The Nikkei average rose 1.23% to its highest level in more than two weeks on Thursday, as Honda Motor Co and other exporters advanced on upbeat US growth data and a weaker yen, and securities brokers such as Nomura Holdings climbed on the Tokyo market's rally. The Nikkei ended up 198.13 points, at 16,274.33, the highest since 14 November 2006.
Hang Seng index rose 0.96%, or 179.55 points, to 18,960.48.
The domestic economy grew by 9.2% in the July-September quarter from a year earlier, higher than market expectations of 8.90%, data released earlier today showed. The annual growth rate in the second quarter of the 2006/07 financial year was higher than the April-June rate of 8.9%.
On 28 November 2006, FIIs were net sellers of stocks to the tune of Rs 335.30 crore (gross purchases worth Rs 1894.80 crore and gross sales of Rs 2230.10 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 268.87 crore (gross purchases worth Rs 404.04 crore and gross sales of Rs 672.91 crore).
US stocks jumped on Wednesday, after the government raised its estimate for economic growth, and a surge in oil price lifted energy stocks, helping major indices recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74%, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92%, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81%, to end at 2,432.23.
Market prunes gains; breadth turns negative
After being positive for the previous two sessions, the market-breadth turned negative on BSE as selling emerged for small-cap and mid-cap stocks. Meanwhile, the market had also eased a bit on selling.
At 13:26 IST the Sensex was up 47.60 points, at 13,665.31. It was off the higher level after hitting 13,745.16, the day's high, within minutes of commencement of trade. Its low for the day was 13,630.90. However, volatility is likely during the latter part of trading as investors square off their positions, or roll over the November 2006 derivative contracts to the December series. The November derivatives contracts are set to expire today. As per reports, NSE F&O Open Interest has shot up by Rs 1,008 crore, to Rs 60,719 crore.
The market-breadth turned negative, with 1262 shares declining on BSE, compared to 1,193 that advanced. As many as 65 shares were unchanged.
The BSE clocked a turnover of Rs 2,550 crore.
Among the 30-Sensex pack, 15 advanced while the rest declined.
Private sector banking major HDFC Bank was the top gainer, up 2.93% to Rs 1,119, on 49,285 shares. It moved in a range of Rs 1,102.90 – Rs 1,123.
IT shares witnessed renewed buying. Satyam Computers (up 0.73% to Rs 455), Wipro (up 1.70% to Rs 593) and Infosys (up 0.51% to Rs 2,168.20) advanced.
Software major TCS rose 2.11% to Rs 1,189, after signing a 7-year deal worth $65 million for reorganising Somerfield's IT services. Somerfield is a leading UK-based, small-format food retailer.
Ranbaxy Laboratories was the top loser, down 1.28% to Rs 375.05, on a volume of 71,847 shares.
Hindalco (down 1.11% to Rs 174), NTPC (down 1.21% to Rs 146.65) and ONGC (down 1% to Rs 848) were the other big losers.
Among side-counters, Raipur Alloys & Steel jumped 20% to Rs 122.70, as Reliance Mutual Fund acquired 12.5 lakh shares at Rs 100.47 per share, vide block deals, on Wednesday. There were outstanding buy orders for 1.2 lakh shares at the upper limit, on BSE.
Leather products maker Crew BOS Products rose 4% to Rs 171.60, and Aztec Software rallied 4.3% to Rs 167.35 amid reports that RBI has raised FII-ceilings in both. While the apex bank has permitted 100% FII buying in Aztec Software, it has been restricted to 49% in Crew BOS Products.
The domestic economy grew by 9.2% in the July-September quarter from a year earlier, higher than market expectations of 8.90%, data released earlier today showed. The annual growth rate in the second quarter of the 2006/07 financial year was higher than the April-June rate of 8.9%.
On 28 November 2006, FIIs were net sellers of stocks to the tune of Rs 335.30 crore (gross purchases worth Rs 1894.80 crore and gross sales of Rs 2230.10 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 268.87 crore (gross purchases worth Rs 404.04 crore and gross sales of Rs 672.91 crore).
US stocks jumped on Wednesday, after the government raised its estimate for economic growth, and a surge in oil price lifted energy stocks, helping major indices recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74%, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92%, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81%, to end at 2,432.23.
Sharekhan Commodities Buzz dated November 30, 2006
Crude oil: Product side demand supports prices
As anticipated crude oil prices moved past $62 a barrel on the back of the cold weather and a fall in the US inventories. The distillate supplies fell by one million barrels against an expected gain of 400,000 barrels.
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15 venture funds to invest in real estate
Around 15 venture funds from the US and Southeast Asia will be making investments in the Indian real estate sector through the FII route. The average ticket size of the investments likely to be made by these funds is around $200-250 million.
Funds that are presently making enquiries on investing in the real estate sector in India include the Blackstone Group, Berkshire Hathaway, JP Morgan, CalPERS, Lehman Brothers and GIC, according to a report by real estate consultant Jones Lang La Salle.
Eight to ten venture funds both from India and overseas have already announced plans to foray into the real estate sector.
The funds include big names like ICICI and the US based Tishman Speyers, Ascendas, GE of Singapore and US, HDFC, US based IREO, Fire Capital, an India based fund, Morgan Stanley, Merrill Lynch, New Vernon, and the US based Xander.
With the entry of 15 more funds, the total size of foreign investments in the Indian real estate sector will increase to $5 billion. According to Lang Salle, the objective of the existing funds varies as both investors and developers are setting up these funds.
Ascendas IT Park Fund and ICICI-Tishman Speyers will develop real estate, whereas HDFC Fund and Fire Capital are likely to be pure vanilla investors.
IREO has formed a SPV with a local developer in Pune in which it would hold 25 per cent to 35 per cent equity and finance the balance by extending a loan at 4 per cent per annum for 15 years. It plans to increase its stake in the SPV by converting the soft loan into equity in a phased manner.
Singapore based Keppel Land and Indonesia based Salim Group have entered India after the relaxation in FDI norms in real estate by entering into joint ventures with local developers or corporates.
UAE based Emaar Group has also tied up with MGF Group to develop properties across India. This apart, hotel chains like Accor and Four Seasons have also entered the country through management contracts with real estate developers.
India’s Punj Lloyd bags QP order for pipeline project
India’s engineering and construction major Punj Lloyd has bagged an engineering, procurement and construction (EPC) order worth Rs8bn (QR650mn) from Qatar Petroleum for the Doha Urban Pipeline Relocations Project (DUPRP).
The DUPRP project involved the installation of 97.2km of new pipeline ranging in diameter from eight to 36 inches, a Punj Lloyd release here said. Punj Lloyd will also build three new booster stations and modify six more as well as decommission the existing pipeline and nine stations, it said.
Commenting on the contract, Punj Lloyd chairman Atul Punj said, “Punj Lloyd has a very strong presence in the Middle East particularly in the civil pipeline and process plants segment. With this order, we will further strengthen our foothold in the Middle East.”
Punj Lloyd is among the largest engineering and construction companies in India providing integrated design, engineering, procurement, construction and project management services for energy and infrastructure projects with operations spread across the Middle East, Asia-Pacific, Africa and South Asia.
Meanwhile, the Middle East Economic Digest (Meed) in its latest issue said Turkey’s Tekfen has won a $45mn contract to build the Umm Bab-Mesaieed main oil line. Tekfen’s contract calls for the laying of 80km of pipeline. Additionally, it involves some demolition work, Meed said. The project completion is set for early 2008.
The journal also said bids have recently been invited for the construction package on the Ras Laffan-Mesaieed ethylene pipeline project. For the ethylene pipeline contract, technical bids are due to be submitted on December 11. The project being handled by Qatar Chemical Company-II on behalf of Ras Laffan Olefins Company (RLOC) involves the construction of a 130-km-long pipeline with a capacity of about 145t/hour of ethylene.
The product will be delivered from the Ras Laffan Ethane Cracker, under construction by RLOC, to new downstream units at Mesaieed planned by Q-Chem II and Qatofin, a Qatar-France joint venture.
Sobha Developers IPO - Subscription Details
QIB - 168 .84 times
NII+HNI - 193.95 times
Retail - 20.68 times
Employees - 0.93 times
Total - 114.31 times
Sobha Developers Employees have lost it!
Good luck folks .. One hell of a issue .. Is it a record ?
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Parsvnath Developers phenomenal debut
Parsvnath Developers was trading at Rs 550.10 on BSE in early trade, an 83.3% premium over the IPO price of Rs 300.
The scrip hit a low of Rs 481.50 and a high of Rs 579. As many as 40,400 shares changed hands in the counter on BSE.
NSE has also admitted the scrip for derivatives trading, at a market lot of 700 shares.
The company’s paid-up equity capital is Rs 181.60 crore, the face value per share being Rs 10.
The company had priced its IPO at the higher end of the Rs 250 - Rs 300 price band. The IPO had strong investors response. It was subscribed over 60 times, FIIs making a beeline for the public offer.
Parsvnath Developers derives most of its revenue from residential and integrated township projects in Harayana and Uttar Pradesh (UP). The company plans to diversify its revenue in terms of locations as well as projects.
Parsvnath Developers has acquired land/ development rights to develop 20 integrated townships, 27 commercial complexes including shopping malls, multiplexes, office space and a complete metro station and 25 residential projects. The company intends to construct 14 hotels and four information technology parks on commercial land acquired by it.
The track record of Parsvnath Developers includes 17 projects comprising nine housing projects and eight commercial complexes. The company had floated the IPO early this month, to finance 11 of the 90 projects on hand.
As of 15 October 2006, Parsvanth Developers directly owned or held development rights for an estimated 108.64 million square feet of sale worthy area.
In last five fiscals, Parsvnath Developers’s revenue has grown at a CAGR of 121% and net profit at a CAGR of 139%. On the flip side, Parsvanath Developers had a negative operating cash flow in the last two financial years. In the quarter ended June 2006, too, the operating cash flow was negative.
The company has obtained in principle approvals from the government for nine SEZs. As per provisions of sec 80-IAB of the Income-Tax Act, 1961, the company is eligible for 100% deduction of profit derived from developing an SEZ notified on or after 1 April 2005 under the Special Economic Zones Act, 2005, for 10 consecutive assessment years.
Indiainfoline - EMCO
EMCO Ltd CMP Rs711 BUY
EMCO Ltd., one of the leading players in the power and distribution transformers industry commanding about 12% market share ranking third after BHEL and Crompton Greaves. It is the market leader in special transformers like furnace and rectifier transformers. It has the widest range of oil filled transformers spanning from 500KVA/11kV to 315MVA/400kV with its presence in power, distribution, furnace, rectifiers and loco transformers. About 75% of the company’s revenues come from its transformer division of which distribution transformers contribute 60-70% and the remaining comes from the power transformers. The company also has its presence in the electronic meters and undertakes EPC projects too. It offers a range of metering solutions including automatic meter reading solution and prepaid meters for single phase and polyphase applications.
EMCO recently enhanced its transformer capacity to 10,000MVA during FY06 from 8,500MVA in FY05. It is debottlenecking its facility inorder to further enhance its capacity to 15,000MVA, which will come onstream by FY07. It also plans to add another 5,000MVA to this capacity by the end of FY08. It sells about 75% of its transformers to the SEB’s which have an in built escalation clause. Out of the remaining revenues from the division 15% is contributed via exports and the balance from sale to industrial clients like Tata Power, Suzlon, Siemens, L&T etc. In its efforts to derisk its business model the company plans to increase its share of exports to 30%.
The company has on order book of Rs8.1bn, which is to be executed over the next 12-18 months. The company is planning to venture into manufacturing of switchgears and setting up a power generation plant. It is working upon the funding mix for the same. The power plant will be under a separate entity EMCO Energy. We recommend a buy with a long term perspective.
Indiainfoline - How Market Fared
Market ends flat
The key indices ended on a flat note ahead of F&O expiry. The firm Asian Markets boosted the domestic bourses to bounce back and reverse its yesterdays losses, however after surging by almost 100 points in the opening trades the markets was unable to sustain at higher levels as profit booking was seen in scrip’s like ONGC, BHEL, Telecom major Bharti Airtel and IT front runner Infosys dragging the benchmark Sensex to hit a low of 13586.04. Finally, the BSE Benchmark Sensex added 14 points, to close at 13616. NSE Nifty was up 6 points to close at 3928.
Dr Reddy’s Lab advanced 1.6% to Rs734 after the company entered in to an agreement with Torrent Pharma for selling drug in Russia. The scrip touched an intra-day high of Rs750 and a low of Rs715 and recorded volumes of over 4,00,000 shares on NSE.
Opto Circuit surged 3% to Rs333 as reports stated that the company is eyeing a French acquisition the deal size of which could be in the range of Euros 30mn to 35mn. The scrip touched an intra-day high of Rs339 and a low of Rs327 and recorded volumes of over 3,00,000 shares on NSE.
AIA Engineering gained 1.4% to Rs1196 after the company announced that they would raise Rs1.25bn from select Investors for further expansion program. The scrip touched an intra-day high of Rs1254 and a low of Rs1185 and recorded volumes of over 98,000 shares on NSE.
Jindal Saw surged 6.7% to Rs407 as the company posted a net profit of Rs475.68mn (up 97%) for the quarter ended Sept 30, 2006 and total income (net of excise) is up 98% at Rs11.40bn. The scrip touched an intra-day high of Rs415 and a low of Rs385 and recorded volumes of over 3,00,000 shares on NSE.
Banking stocks were trading with smart gains. The Mid-Cap stocks led from the front PNB rose 1.7% to Rs545, Bank of India gained 1.5% to Rs200 and Bank of Baroda was up 1.35 to Rs265. However index heavy weights like HDFC Bank and ICICI Bank ended lower.
Metal stocks were up on back of fresh buying. Tisco edged higher 0.4% to Rs477, Jindal Steel gained 0.9% to Rs2133, Hindustan Zinc was up 0.8% to Rs934 and Sterlite Industries added 0.2% to Rs544.
Technology stocks were a mixed bag. Again, Mid-Cap stocks were in demand NIIT Ltd gained 3.5% to Rs404, Mastek is up 1.5% to Rs322 and HCL Tech added 1% to Rs626. While bluie chips like Wipro and Infosys were among the major losers.
Auto stocks were in momentum as the Government is all set to cut fuel prices at the retail level according to reports, petrol will get cheaper by Rs2 per litre while diesel prices will cut by Re1 a litre. Bajaj Auto, Maruti and Hero Honda were among the major gainers.
Tyre stocks recorded smart gains. Ceat surged 4.1% to Rs132, Apollo Tyre advanced 4.2% to Rs359, JK Industry spurred 4.9% to Rs142 and MRF gained 3.3% to Rs4608.
Gems and Jewellery stocks also shined brightly. Gitanjali Gems was frozen at 10% upper circuit to Rs238.65, Classic Diamond surged 2.1% to Rs498 and Suashish Diamond gained 1% to Rs142.
Indiainfoline - STRATEGY INPUTS FOR THE DAY
Romancing the street!
Romance should never begin with sentiment. It should begin with science and end with a settlement – Oscar Wilde.
More than romancing, the bulls have been flirting around a bit too long changing their preferences while keeping the overall sentiment positive. The market is a combination of sentiment, science (can be read as signs also), art, history, geography and what have you. It's settlement time and bulls and bears may decide to smoothly rollover after all, though the usual volatility associated with F&O expiry will be there.
Global cues are positive, barring a spike in oil prices. Markets in the US ended higher while in Asia too key stock indices in Tokyo and Hong Kong have opened on a firm footing. The only cause of worry could be the higher crude oil prices, which are now trading above the $62 per barrel mark.
The FII outflows in the past couple of days may also prompt investors to remain cautious. Yesterday, foreign funds pulled out Rs2.41bn from the cash segment while on Tuesday they were net sellers to the tune of Rs3.35bn in the cash segment. Mutual Funds were net sellers of Rs2.69bn on the same day. On the F&O side, FIIs were net sellers of Rs3.98bn yesterday.
The government will announce the GDP figure for the second quarter today. Asia's fourth-largest economy is estimated to have grown by 8.9% in the July to September quarter, matching the advance in the first quarter. If this turns out to be the case, the bulls may get fired up all over again.
The market has taken a breather in the past couple of days. There may be a fresh bout of buying once the derivative settlement is out of the way. But, if the slowdown in FII inflows continues we may see some meaningful correction. In short, the short-term direction hinges on the foreign capital flows.
For today, the immediate outlook is bright on the back of a rally in global markets. Still, we would continue to advise caution. Fresh buying should be avoided at this stage unless one is willing to wait for 2-3 years. Select stock specific approach is the order of the day.
Parsvnath Developers' shares will get listed on the bourses today. The IPO of Sobha Developers has been subscribed 108.51 times. Bids have been received across the price band of Rs 550-640 per share. The company has offered 88,93,332 equity shares.
LT Overseas has offered a Daawat to invest. The company is entering the capital market with an IPO of 7,035,714 shares of Rs10 each for cash at a premium to be decided through a 100% book-building process. The issue price has been fixed between Rs50 and Rs56 per share. The issue closes today. Read interview
ICSA (India), Lakshmi Energy and Foods, ANG Auto, CESC, CREW B.O.S. Products, AZTEC Software and Sujana Universal Industries could rise as the RBI has approved the plan to hike the investment limit for FIIs. Meanwhile, in DCB and K Sera Sera, the central bank has curbed immediate buying by FIIs, as their investment has reached the permissible limit.
US stocks had their biggest gain in three weeks on Wednesday after the world's largest economy expanded at a faster pace last quarter than initially estimated without stoking inflation.
Exxon Mobil and other energy producers advanced as crude rose to a two-month high, lifting the S&P 500 Energy Index to a record. Tiffany & Co. jumped after raising its full-year earnings forecast. AT&T led telephone companies higher as Fitch Ratings said they will gain Internet subscribers.
The S&P 500 climbed 12.76, or 0.9%, to 1399.48. The Dow Jones added 90.28, or 0.7%, to 12,226.73. For both measures, it was the largest rally since Nov. 6. The Nasdaq advanced 19.62, or 0.8%, at 2432.23.
GDP in the US grew at 2.2% annual rate in the third quarter versus an initial estimate of 1.6%. Economists had forecast a GDP growth of 1.8%.
A separate report showed that the pace of new home sales in the US slowed at a faster-than-expected rate in October. But the average price of a new home jumped.
US light crude oil for January delivery jumped $1.47 to settle at $62.46 a barrel on the New York Mercantile Exchange. Oil jumped after the weekly oil inventories report showed a surprise dip in crude, gas and distillate supplies. The front-month contract was quoting 17 cents higher at $62.29 a barrel in extended trading in Asia this morning.
Treasury bond prices fell, raising the yield on the 10-year note to 4.52% from 4.50% late on Tuesday. In currency trading, the dollar bounced back versus the euro and the yen after the GDP report. COMEX gold fell $1.90 to settle at $641.80 an ounce.
Among the Indian ADRs, Infy was up 1.6%, Satyam gained 1.8%, Dr. Reddy's jumped 2.5%, HDFC Bank advanced 2.2%, ICICI Bank rose 1.2% and MTNL was down 1.8%.
Asian stocks rose on Thursday morning, hitting a six-month high, after the US economy grew at a faster pace last quarter than an earlier estimate and South Korea's government increased its 2006 forecast for exports.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.8% to 135.33 as of 12:05 p.m. in Tokyo, its highest since May 17.
Japan's Nikkei 225 Stock Average added 96 points to 16,173 while the Hang Seng in Hong Kong was up 193 points at 18,974. Markets around the region rose. Singapore's Straits Times Index climbed to a record.
European shares broke a five-session losing streak on Wednesday after comments from Federal Reserve Chairman Ben Bernanke supported the dollar and as drug stocks got a boost from cost cuts at Pfizer.
The pan-European Dow Jones Stoxx 600 index rose 1.3% to 354.19. The German DAX Xetra 30 closed up 1.3% at 6,363.80, the French CAC-40 increased 1.4% to 5,381.25 and the UK's FTSE 100 rose 1% to 6,084.40.
Emerging markets also closed sharply higher yesterday. Russia's RTS index was up 2% at 1765 while the Bovespa in Brazil surged by 2.26% to 41,970, and the IPC index in Mexico climbed 1.8% to 24,777.
Technical Breakout:
Maruti has given a break out after giving a close above Rs920. One can consider buying the scrip for short-term period for a price target of around Rs950-960 with an appropriate SL of Rs902. The scrip has given Rounded Bottom breakout, indicating a possible reversal of the current downtrend to a new uptrend.
Major Bulk Deals:
Templeton MF has sold Simplex Infra; Emerging Markets has sold Astra Microwave; Birla Sun Life MF has bought Gayatri Projects; Macquarie Bank and Morgan Stanley have picked up International Hometex; BNP Asset Management and HSBC Financial have sold Milkfood; UBS has bought Pioneer Embroideries; Reliance MF has purchased Raipur Alloy; Morgan Stanley has sold SREI Infra.
Insider Trades:
Matrix Laboratories Limited: Mr. K R V Subrahmanian, Director has sold in open market 12500 equity shares of Matrix Laboratories Limited on 23rd November, 2006.
Tech Mahindra Limited: Vineet Nayyar, Managing Director has sold in open market 5000 equity shares of Tech Mahindra Limited on 20th November, 2006.
IL&FS Investsmart Limited: Mr. Ramesh Bawa, Managing Director & CEO has sold in open market 7000 equity shares of IL&FS Investsmart Limited on 23rd November, 2006.
Market Volumes:
The turnover on NSE was down by 2.1% to Rs80.83bn.The BSE FMCG index was the major gainer and gained 1.47%. BSE Metal index (up 0.67%), BSE Auto index (up 0.60%), BSE Consumer Durable index (up 0.55%) and BSE Capital Good index (0.26%) were the other major gainers. However, BSE Oil & Gas index lost 0.74%.
Volume Toppers:
Lanco Infratech, Unitech, Torrent Power, Voltas, Gujarat Ambuja Cement, R Com, Hindalco, IVRCL Infra, ACE, Ashok Leyland, Info Edge, CEAT, ITC, Karnataka Bank and Jyoti Structures.
Delivery Delight:
Apollo Tyres, Assam Company, Bajaj Auto, BEML, Birla Corporation, CEAT, Cummins India, Dena Bank, Escorts, Gammon India, Gitanjali Gems, Gujarat Ambuja Cements, Havells India, Infotech Enterprises, IVRCL Infrastructures, J K Cements, Jyoti Structures, Maruti, Matrix, MRF, Nagarjuna Construction, Shaw Wallace, SBI, Unitech and Voltas.
Brokers Recommendations:
Reliance Industries – Accumulate at Edelweiss
Indotech Transformers – Buy from Sharekhan
Long Term Investment:
Voltamp Transformers
Major News Headlines:
TCS signs 7-year, $65mn deal with Somerfield
AIA Engineering to raise Rs1.25bn from select investors
Praj Industries secures contract from Belgium
Unitech to sell shares in unit in London: reports
Dr Reddy's, Torrent Pharma in accord for selling drugs in Russia
IOC to give 4 shares for every 37 shares of Bongaigaon
NIIT inks pact with Egypt Govt for building manpower
L&T JV wins Rs4.56bn order from NTPC
Abu Dhabi Energy to invest up to $1bn in power plants
Cummins India to invest $13mn in High Horse Power unit
Bajaj Hindusthan to consider fund raising plan on Dec 6
Market may open positive
The gains in overnight US indices and strong ongoing asian indices help domestic market to witness further uptrend on the back of a bullish sentiment. The Nifty could rise further to 3960-3970 level on the upside while it has a crucial support at 3910 on the downside. The Sensex has resistance at 13625 and support at 13560.
US indices registered gains, while the Dow Jones closed above the level at 12227, up 90 points, while the Nasdaq moved up by 19 points to close at 2432.
Indian floats, too, were upbeat on strong domestic and US markets. Except MTNL, other Indian ADRs ended at higher levels. Dr Reddy led the upmove and surged 2.49% while HDFC Bank gained 2.18%, Infosys, Satyam, VSNL, Patni, Tata Motors and ICICI Bank gained over 1% each.
Crude oil prices in the international market gained further, with the Nymex crude oil for January delivery advanced by $1.47 to close at $62.46 a barrel and in the commodity segment, the Comex gold lost $1.90 to settle at $641.80 respectively.
Volatility may remain high due to derivatives expiry
The market is likely to open on a firm note taking cue from firm global markets. However, volatility may remain high as investors square off or roll over November 2006 derivatives contracts to December 2006 series. The November derivatives contracts expire today.
Mutual funds may remain active in the market today to support their month-end net asset values (NAVs).
FIIs were net sellers to the tune of Rs 335 crore on Tuesday (28 November). This was their biggest daily inflow this month. As per provisional data, FIIs were net sellers to the tune of Rs 241 crore on 29 November. They were net buyers to the tune of Rs 291 crore in index-based futures on 29 November. They were net sellers to the tune of Rs 730 crore in individual stock futures on that day. Weakness in index heavyweights restricted Sensex’s gain on Wednesday (29 November) to 15 points.
Asian shares rose on Thursday, led by exporters and resource stocks, after upbeat US growth data eased concerns about the health of the economy in Asia's biggest export market. Japanese shares rose to their highest in nearly two weeks, South Korean stocks hit a six-month high and Singapore's benchmark index notched up a record peak.
US stocks jumped on Wednesday after the government raised its estimate for economic growth and a surge in oil prices lifted energy stocks, helping major indexes recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74 percent, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92 percent, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81 percent, to end at 2,432.23.
US oil futures dipped, but still remained near a two-month high after weekly U.S. inventory data showed a surprise decline in heating fuel stocks in the world's biggest consumer. NYMEX crude for January delivery fell 17 cents to $62.29 a barrel.
FII: - Rs 335 cr & MF - Rs 269 cr
FII Gross purchases Rs 1895 Cr Gross Sellers Rs 2230 Cr Net Sellers Rs 335 Cr
MF Gross Purchases Rs 404 Cr Gross Sellers Rs 673 Cr Net Sellers Rs 269 Cr
Provisional figures Net negative 241. Clearly there is selling happening and the euphoria is being used by the FIIs to takeprofits. This does not indicate that markets have turned..its just that money should be taken off the table. Markets may tend to be choppy on FNO closing..
Close: Profit selling continues..!
Moving away from the trend seen yesterday the market opened on strong positive note with global cues being positive. Sensex moved swiftly in the early hours of trade but then profit booking was seen across the day. Markets traded ranged ahead of the FNO expiry and ended in green but flat. Cement stocks played vital role helped by the announcement of cut in diesel prices, Sensex closed in positive territory. Apart from cement, buying was seen in sectors like Chemicals, and Tyres. Heavy Buying was seen in Small Caps. Asian markets ended strong while European markets are trading firmly in the positive territory.
Sensex ended up by 15 points at 13616.73. It was helped up by gains in ACC (1146,+4 percent), Grasim (2789.8501,+3 percent), ITC (184.15,+2 percent), Guj Ambuja (146.15,+2 percent) and Dr Reddys (734.65,+2 percent). Restricting the gains were Cipla (248.95,-3 percent), ONGC (856.5,-1 percent), Bharti Tele (621.1,-1 percent), BHEL (2474.3,-1 percent) and NTPC (148.8,-1 percent).
It was however a day for the mid caps. The advance decline was 2 shares advancing for 1 declining. Interest is shifting towards value. Some more gains possible on cards.
Steel prices are expected to soften going forward as news have been making rounds that steel companies are likely to cut prices in December. Depending upon various categories the reduction would be in the range of Rs 500 to Rs 800 per ton. There has been a plunge in international prices of steel and due that the difference between the domestic and the international price is currently around US$ 30 to US$ 40 per ton. Besides shortages of steel in the global markets are reducing as the availability of steel has increased in the domestic market. Steel Authority traded firm.. Tisco was weak.
OVL (ONGC Videsh) the overseas arm of state-run Oil and Natural Gas Corp (ONGC) has won an oil exploration block in Brazil. OVL paid $6,80,000 for the offshore S-M-1103 block in the Santos basin. (S-M-1103) has potential for natural gas and light oil. The company was among the host of global energy giants that were awarded six blocks in Brazil's eighth annual auction of oil and gas concessions. OVL has started producing 4 MT of oil out of which 3 MT coming from its Sudan block. The company has 25 properties spread across 14 countries. It will be beneficial it will increase the share of OVL in the overall production levels of the group. ONGC ended lower by 1% on the back of cut in fuel prices. The subsidy will continue to bog this one down.
Technically Speaking: Market was ranged as it started positive and rallied between the channel of 13711 - 13586 level. Volumes were good at 4388 cr. However, the breadth had been in the favor of Advances as they were 1.77 times the Decliners. The Resistance lies at 13760 - 13683 while Support at 13558 -13509 levels.
Sweet Land of Liberty
Back in 2001, when Indian Hotels Corporation Limited (IHCL) was implementing Total Productivity Maintenance (TPM) and the Kaizen approach across its properties, it benchmarked with the Ritz Carlton on customer satisfaction measurements in luxury hotels. Just five years later, IHCL has signed an agreement to acquire the Boston-based Ritz-Carlton hotel, a luxury property in operation since May 19, 1927, for about $170 million. With the deal scheduled to close mid-January, this will be the second us hotel to be acquired by the Tata Group company (which owns the Taj chain of resorts and hotels), after it took management control of The Pierre, a luxurious landmark hotel on New York's 5th Avenue, for $50 million. Clearly, Indian Hotels is morphing from being a leading Asian chain of luxury hotels into a global one with presence in the gateway cities of the world. In five years, it aims to have a third of its revenues from overseas operations-and the US would account for a fair share of those sales.
Indian Hotels is not the only company for which the US is a key fragment of a globalisation blueprint. According to a CRISIL report titled "Creating the Indian MNC", acquisitions by Indian companies overseas have touched $7.3 billion in the April 2005-September 2006 period. A little over a quarter of these target companies are in the US, with the total deal value amounting to a cool $1.9 billion. Tata Tea's $677-million acquisition of a 30 per cent stake in the Glaceau, an enhanced water company, is till date the largest us acquisition by an Indian company and skews the us share substantially in 2006-07 to 52.7 per cent, but the us was the #1 destination even in 2005-06 with an 18.3 per cent share of all overseas acquisitions.
Whilst niche American buyouts have been taking place for some time now-it services majors like TCS, Wipro and Satyam have been particularly busy as has a clutch of pharma majors-a handful of Indian corporations are now beginning to make us acquisitions for sheer size and scale. Rain Calcining Ltd, Asia's largest manufacturer of calcined petroleum coke (CPC), acquired a 20 per cent stake in GLC Carbon Corporation and is reportedly looking to acquire full control. If successful, Rain will emerge the world's largest producer of CPC. Rain has the capacity to manufacture 480,000 tonnes per annum of CPC, while GLC, with its four facilities in Texas, Oklahoma, Louisiana and Argentina, is about four times the size with an annual capacity of 2.3 million tonnes. Clearly, scale is an important factor in influencing the decision for Rain Calcining as market leadership brings with it the ability to influence pricing, especially in a commodity industry.
For other manufacturers with global ambitions, the US is one land that they just can't ignore. When last June, Bharat Forge, the second largest forgings firm in the world, purchased Federal Forge Inc., a company engaged in the design and manufacture of complex forged steel components, for $9.1 million, it gained an immediate foothold in the us passenger car and light truck market; and most importantly, a manufacturing base close to some of Bharat Forge's largest customers.
Access to markets has been a key driver of these acquisitions and the US being the largest market in the world, has been a big draw. Says Sunil Alagh, Chairman, SKA Advisors, a Mumbai-based marketing and branding consultancy: "The level of importance of entering the us markets depends on the product. Indian companies should enter any market and more specifically the US, from a position of strength, that is in sectors like it, textiles, specialty teas, Indian cuisine-based foods, etc. It will be of little importance in areas like soaps, cosmetics, confectionery or air conditioners. Entering the us market should not be a 'fashion' but 'opportunity-based'."
The Indian textiles industry has been trying something similar-to make inroads into the $30-billion (Rs 1,35,000-crore) US and EU home textiles market by aligning its low-cost manufacturing base with us-based brands. Companies like GHCL have chosen to grow via the inorganic route-it acquired Dan River, the third largest player in the us home textiles market, the owner of the brand 'Bed in a Bag' and preferred supplier to large retailers like JC Penny and Linen & Things, Wal-Mart and Bed, and Bath & Beyond. GHCL Joint Managing Director R.S. Jalan says: "The acquisition provides us the opportunity to quickly move into the us market with a ready customer base and infrastructure in place." S. Kumars, too, is reportedly bidding for one of the largest American home furnishing manufacturing and distribution companies, America Pacific, and the deal size is rumoured to be in the range of $100-120 million (Rs 450-540 crore). America Pacific supplies bedding, bath and window products to many us brands, including Nautica, Dockers and Liz Claiborne. It also makes and markets home linen under its own brand.
So, how much of an imperative is penetrating the us-the final frontier in some ways-for Indian companies with MNC ambitions? Rama Bijapurkar, an independent market strategy expert, explains that America shouldn't be blindly pursued because it's potentially the most lucrative market. Rather, the importance of a country must be based on how feasible it is to build a decent sized, profitable, and competitive position. "So, if that is better done in Africa or Uzbekistan or UK, why not?" asks Bijapurkar. That may explain why some Indian companies have made big-ticket acquisitions in less likely regions-Suzlon in Belgium, Aban Loyd Chiles in Norway and Gail in Bermuda.
Crude to trade firm
Crude oil: Firm prices
The cold weather in the USA has lifted crude back above $61 a barrel amid concerns that OPEC might trim production if oil prices continue to fall. The remarks by Bernanke further confirmed that energy inflation is still looming large and posing a threat to the economy. Expect the prices of crude to stay firm and any surprise draw down in the inventory would further support crude.
Bullion: US GDP to give direction
Existing home sales bouncing back saw some profit taking in gold ahead of the Federal Reserve chairman's speech. However, the durable goods numbers dropped and consumer confidence fell, which supported gold from its initial slide. Further, Bernanke’s comments that there was inflationary risk supported the precious metals.
Today, the US Q3 gross domestic product numbers should dictate the market direction. Initial forecasts are dollar positive, but any surprises would see huge volatility in the evening. We continue to reiterate that gold should be accumulated on dips.
Soybean: Bird flu in South Korea
Soybean prices declined sharply on the news of an outbreak of bird flu in South Korea. The outbreak could disrupt Indian soy meal exports in the short term. As per trade estimates, India exported around 600,000 tonne of soy meal to South Korea in 2005-06 (October 2005-September 2006), up from around 204,000 tonne a year ago. The situation would be clearer in the coming days.
Soy oil: External factors at play
Soy oil prices declined in conjunction with soybean prices on reports of an outbreak of the bird flu. The weakness in palm oil futures also added to the decline. The counter saw some profit booking after a huge rally in the last few days. If the weakness in soybean continues then the soy oil prices too could come under pressure.
Mustard: Affected by soy
Mustard prices ended lower in tandem with the prices of soybean and soy oil. The counter too witnessed profit booking after a sharp rally. The demand at higher levels has not been encouraging. NAFED has decreased its selling price by Rs10 to Rs1,870 per quintal. The off take by the processors has also decreased in the last few days.
Wheat: Range-bound
Imported wheat is available in some south Indian states. The total quantity of piled up wheat now stands at 3.5 lakh tonne. Due to the poor stock position the FCI has not been selling wheat to millers since the last couple of months, reducing the supply in the market.
Wednesday, November 29, 2006
Investor Complaint - Intime Spectrum & Parsvanath
Kindly publish this on your blog so anybody who have not received any
response from Parsvnath, I will take the matter with SEBI. Also send
it to other Indian Financial Bloggers.
Thanks,
Chetan
Dear Investors,
Pissed off with Intime Spectrum treatment of not reciving Phone calls
nor fax nor reply to e-mail messages, I left all my work today and
kept hunting for journalists and bloggers. I have got good response.
They want me to collect all the grievances and present to them and
they have assuerd they will talk to SEBI and also publish about
problems faced by small investors.
I had also called SEBI office and he told me, unless I give a written
complaint he won't be able to start investigation. I have sent my
individual complaint. Even if i have to spend money out of pocket I am
willing to. Lets fight Intime legally and expose them.
Kindly send me your Application Number, No. of Shares Applied, City
and if you have tried to contact Parsvnath or Intime - a brief 3-5
sentences.
I will compile everything and send them to Sucheta Dalal and others.
My e-mail address is ichetan AT Gmail Dot Com.
Thank you for your time.
Alphageo India: Sharekhan Stock Idea dated November 29, 2006
Alphageo India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs214
Current market price: Rs150
Back on the shopping list
Key points
- Order wins improve growth visibility: Alphageo India (Alphageo) has recently bagged orders worth Rs32 crore and has built a healthy pipeline of orders that is likely to bring in additional orders of around Rs30-35 crore. The company also has an option to accept a Rs20-crore low-margin order from Oil India. Consequently, the revenue growth visibility for the next fiscal (FY2008) has improved considerably. Moreover, one of the orders is from Rajasthan (as against the current concentration of order backlog from the North-East region), which should help in mitigating the seasonality pattern resulting from the closure of operations during the monsoon season in the North-East region.
- Growth to be funded through equity dilution: The huge capital investment required to support the estimated exponential growth in revenues is likely to be partially funded by dilution of equity. The company is expected to raise around Rs15 crore through a preferential issue of shares/warrants to promoters and/or institutional investors. The issue is estimated to result in 22% dilution of its equity base.
- Re-initiating coverage: We are re-initiating coverage on Alphageo as the visibility of its revenue growth has improved considerably on the back of the recent order wins and the healthy order pipeline. Consequently, we recommend a Buy call on the stock with a price target of Rs214 (10x its FY2008 estimated earnings per share on a diluted equity base).
Capita Telefolio Volume 5 - Nov 29th 2006
Wednesday Capita Telefolio Volume No 5, Issue No 23 dated Wednesday, 29th
November 2006.
The following recommendation is based on price as on Wednesday, 29th
November 2006.
BUY : Savita Chemicals at Rs 485
Now full details:
BUY : Savita Chemicals at Rs 485
BSE Code : 524667
NSE Symbol : SAVITACHEM
Market Lot : 1
Savita Chemicals is one of the largest players in transformer oils and a key
player in white oils used in FMCG industry. Strong growth in power sector
and in turn the transformer industry augurs well for the sustained high
growth of the company. The scrip is available cum 2:3 bonus.
Actual EPS for year ended March 2005 : Rs 33.7
Actual EPS for year ended March 2006 : Rs 42.8
Projected EPS for year ended March 2007 : Rs 56.5
End of Wednesday Capita Telefolio Volume No 5, Issue No 23 dated Wednesday,
29th November 2006.
Focus shifts to small-cap, mid-cap shares
Small-cap and mid-cap stocks came to the fore today as investors rotated money from frontline shares. The valuations of small-cap and mid-cap shares have turned attractive vis-a-vis frontline stocks following a surge some of the frontline stocks in the past few months.
BSE Small-Cap Index rose 103.62 points or 1.5% today to settle at 6,635.01 and BSE Mid-Cap Index advanced 76.64 points or 1.3% to 5,727.85. In comparison, Sensex rose a muted 14.78 points or 0.1% to settle at 13,616.73. The S&P CNX Nifty rose 6.45 points or 0.16% to settle at 3,928.20.
Volatility was high. After surging over 100 points at the onset of trading tracking firm Asian markets, Sensex gradually pared gains later and it even slipped into the red at one point of time at the fag end of the trading session. It recovered from the red and moved into the green again at close.
Sensex hit a low of 13,586.04 and high of 13,711.76.
Liquidation of positions in the November 2006 derivatives contracts ahead of expiry of November contracts on Thursday weighed on the bourses today. Five Sensex heavyweights Infosys, ICICI Bank, ONGC, Bharti Airtel and Reliance Industries (RIL) slipped into the red. These five stocks have a combined weightage of over 40% in Sensex.
Asian and European markets were firm today. Japan’s Nikkei 225 average jumped 221 points or 1.3% to 16,076.20 following robust industrial output data.
The market sentiment remains bullish due to strong FII inflow and expectations that corporate earnings growth will remain strong. Sensex has risen sharply over the past few weeks. The barometer index is up almost 45% in calendar 2006 so far.
Market would keenly watch the extent of rollover to December contracts from November 2006 contracts which expire on Thursday 30 November. A large rollover would mean traders expect the rally on continue whereas lower rollover would indicate correction might be on the cards.
The broad market depicted bullish trend today as gainers outpaced losers by a ratio of 1.77:1 on BSE. Select side counters surged.
BSE clocked a turnover of Rs 4388 crore compared to Tuesday’s Rs 4161 crore.
Cement shares extended their recent upmove on firm cement prices. ACC gained 3.6% to Rs 1140, Gujarat Ambuja Cements rose 2.3% to Rs 146.55 and Grasim gained 2% to Rs 2770.
Cigarette major ITC advanced 2.5% to Rs 184.40. 9.3 lakh shares changed hands in the counter on BSE.
Auto shares rose after the government today announced a cut of Rs 2 per litre in price of petrol and rupee one per litre in diesel. Bajaj Auto rose 1.1% to Rs 2670, Tata Motors gained 0.8% to Rs 817 and car major Maruti Udyog added 0.6% to Rs 920.
Refinery shares slipped on worries that cut in retail fuel prices would put further pressure on their marketing margins. HPCL shed 3.5% to Rs 291.50 and BPCL lost 1.7% to Rs 354.
Indian Oil Corporation dropped 4.7% to Rs 459.90 and Bongaigaon Refinery shed 5.5% to Rs 50.65. Indian Oil Corporation (IOC) today recommended a swap ratio of four IOC shares for every 37 shares held in Bongaigaon Refinery, for merger of Bongaigaon Refinery in IOC.
Oil exploration major ONCG dropped 0.8% to Rs 859.80. ONGC has to sell crude at a discount to state-run refiners to help them reduce losses incurred due to state-set prices.
Bharti Airtel dropped 1.3% to Rs 620 on profit taking. Communist Party of India said on Tuesday it was against the entry of Wal-Mart Stores Inc. in India, a day after Bharti Enterprises – a Bharti Airtel group company announced a tie-up with the world's biggest retailer on Tuesday.
ICICI Bank shed 0.8% to Rs 855 and Reliance Industries dropped 0.1% to Rs 1249.
Software major Infosys shed 0.7% to Rs 2151 in volatile trade. On Tuesday, Infosys ADR rose nearly 1%.
Tata Steel dropped 0.04% to Rs 475.60 in volatile trade after Anglo-Dutch steelmaker Corus Group said on Wednesday its third-quarter earnings rose 63% on the back of higher steel prices. Corus last month agreed a 4.3 billion-pound takeover offer from Tata Steel. However, Brazil's Companhia Siderurgica Nacional has since proposed making a higher bid and it has been conducting due diligence with the help of senior Corus management. Corus this week delayed a shareholder meeting to vote on Tata's takeover offer until Dec. 20.
Tyre shares extended their recent rally as natural rubber prices remained low. JK Industries gained nearly 5% to Rs 141.90, CEAT rose 4.4% to Rs 131.75, Apollo Tyres rose 4% to Rs 357 and MRF rose 2.7% to Rs 4612.
Shriram Transport Finance jumped 6% to Rs 140. The company today reported 11.4% growth in net profit for Q2 September 2006 to Rs 39.49 crore (Rs 35.44 crore). Total income rose 37.8% to Rs 318.21 crore (Rs 230.76 crore).
Recently listed Lanco Infratech jumped 14% to Rs 267. The scrip rose on huge volume of 1.1 crore shares on BSE.
Torrent Power jumped 20% to Rs 84.80. Volumes in the stock were a huge 70.9 lakh shares on BSE. Torrent Power is the umbrella company of the newly amalgamated generation, transmission and distribution businesses of the Torrent Group. It debut on the bourses was listed on the bourses on Tuesday (28 November).
Distillation equipment maker Praj Industries gained 4% to Rs 195.20 after the company said on Wednesday it had secured an order worth 2 million euros to design a bio-ethanol complex in Belgium
Bilpower rose 0.2% to Rs 154.15 after the company said on Wednesday it bought 30,999 shares of Tarapur Transformers for Rs 3.41 crore. The firm has also funded Tarapur to the tune of Rs 4.95 crore
Jindal Saw jumped 6% to Rs 404.90 on strong Q4 results. Jindal Saw reported a surge in net profit for Q4 September 2006 to Rs 47.56 crore from Rs 24.13 crore in Q4 September 2005. Net sales rose 98.9% to Rs 1123.39 crore from Rs 564.71 crore.
Voltas gained 2.4% to Rs 110. 21.3 lakh shares changed hands in the counter on BSE.
GE Shipping lost 5% to Rs 213. The stock was relisted on Monday following a scheme of arrangement whereby it transferred its offshore services division to a separate company Great Offshore which would be listed separately.
Gujarat NRE Coke rose 20% to Rs 32.25 after the company said the shareholders of Zelos Resources which is listed in the Australian stock exchange last week passed a resolution giving effect to the company taking a controlling 85% stake in the Australian resources firm. Zelos Resources is now being renamed Gujarat NRE Resources NL.
BPO firm Tricom India rose 10% to Rs 123.60. On Monday, the company announced that it plans to put up a new centre at Nashik with a recruitment of 400 freshers to its fold.
NDTV lost 1.3% to Rs 229.75 after the company said it has entered into a strategic alliance with Karan Johar and Dharma Productions for its entertainment business
Torrent Pharma rose 3.6% to Rs 197. Dr. Reddy's Laboratories said on Wednesday it had signed a deal with Torrent Pharmaceuticals to sell the latter's anti-cholesterol products, Listril and Listril Plus, in Russia.
Kamat Hotels India rose 0.7% to Rs 170.45. The company said on Tuesday that Kotak Securities under its portfolio management schemes, raised its stake in the company to 5.09 percent. The schemes of Kotak Securities acquired 47,648 shares, or a 0.36 percent stake, on Nov. 24, the company said.
Gitanjali Gems rose 10% to Rs 239.90 on reports is in talks to acquire U.S. jewellery retailer Samuels Jewelers Inc. in a transaction valued at $25 million.
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