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Wednesday, October 10, 2007

Model Portfolio Update

Model Portfolio Update

List of gainers

Jaiprakash Associates, Tata Power, Jindal Steel & Power and Sobha Developer are among the other gainers.

Gujarat state controlled Gujarat Mineral Development Corporation (GMDC) surged 20% to Rs 1,632.60 and it topped gainers in the BSE’s A group shares. Earlier on 8 October 2007, the company's shareholders had approved proposal to split each share of Rs 10 each into five equity shares of Rs 2 each.

Diversified firm Jaiprakash Associates spurted 12.93% to Rs 1,288.30. It came second among top gainers in A group. The company will announce Q2 September 2007 results on 15 October 2007.

Power generator and distributor Tata Power soared 11.43% to Rs 1,089.65 and it stood third among top gainers in A group. The company will announced Q2 results on 30 October 2007.

Sponge iron maker Jindal Steel & Power moved up 10.61% to Rs 7414.50. It was the fourth biggest gainer in A group.

Real-estate developer Sobha Developer rose 10.10% to Rs 983.55 and it came fifth among top gainers in A group. As per reports, the company has bagged a real-estate project worth Rs 6400 crore at Hyderabad. The project will be jointly developed with Reliance Energy and Andhra Pradesh Industrial Infrastructure Corporation. Sobha will hold 23% in the project.

Nifty futures at premium

Turnover declines

Nifty October 2007 futures were at 5,457.25, at a premium of 15.8 points as compared to spot closing of 5,441.45.

The NSE futures & options (F&O) segment turnover was Rs 79,786.18 crore, which was lower than Rs 82,362.26 crore on Tuesday, 9 October 2007.

State Bank of India October 2007 futures settled at premium, at 1,938, compared to the spot closing of Rs 1,923.50.

Larsen & Toubro October 2007 futures settled at discount, at 3,366, compared to the spot closing of Rs 3,371.35.

Bharti Airtel October 2007 futures settled at discount, at 1,064.50, compared to the spot closing of Rs 1,070.90.

In the cash market, the S&P CNX Nifty was up 114.20 points or 2.14% at 5,441.45. Nifty hit lifetime high of 5,454.70 today.

Banking Sector

Banking Sector

Insurance Sector

Insurance Sector

SBI, Sun Pharma, iGate

SBI, Sun Pharma, iGate

Stock Ideas

Stock Ideas

Hindustan Motors, Zenotech Labs

Hindustan Motors, Zenotech Labs

Market Close: Ends on new high, so whats next??

After yesterday historic rally, the euphoria in the market continued today also. It was one more fantastic day for Indian markets as well as the investors. Fears of a major rift between ruling UPA and the Left parties have eased to an extent and also the strong global cues fueled the Indian indices to open on higher note and continue the rally. Investors are riding high with expectations of robust corporate earnings which have just started. Investor did opted for profit booking at the higher levels but buying intensified as sensex traded at all time high. First the sugar sector rocked with some positive news from the government and then the rally was continued by the IT sector. Capital goods, Banking, Realty and Metal stocks surged and ended higher with Auto stocks being out of favor. Besides some positive developments on the home front a steady trend in the global markets and the seemingly endless appetite of the FII Fund flows keeping market up.

IT sector surged up as the IT big boss Infosys is going to announce the results. Ahead of better results and guidance the IT stocks cheered the day. Expectations have started riding ahead of the results with many analyst expecting growth of almost 8.4% on the topline and about 2.4% on the net profit. But the main watch is on the guidance this is the strongest quarter for the comapny and also increase their guidance. Lets wait and see what the big daddy has to give the market. Will it surprise or make investors unhappy.. well we have to wait for tommorow. Mid and Small caps under performered compared to front line indices. Asian markets ended in green, currently European markets trading in green.

Sensex closed up by 378 points at 18658.25. It was helped up by gains in L & T (3372,+7 percent), BHEL (2330.6499,+4 percent), Hindalco (170.3,+4 percent), Infosys (2124.55,+4 percent) and ACC (1218.15,+4 percent). Restricting the gains were Dr Reddys (633.15,-1 percent), Bajaj Auto (2620.95,-1 percent), Ranbaxy (424.8,0 percent), Maruti (1101.05,0 percent) and ITC (184.05,0 percent).

Government announced that a slew of measures including subsidized loans to sugar mills to help those to clear dues of farmers besides making mandatory the blending of 5 % ethanol in petrol. As per some reports, Oil refiners will sell gasoline with 5 % ethanol starting this month. The government has also extended the export incentives of as much as 1,450 rupees ($37) a ton to sugar exporters by one year. Also putting fuels to it was that the Cabinet Committee gave its approval for providing loans to sugar mills from the banks under special guidelines. They would be entitled to loans of an amount equivalent to central excise duty paid by them. The mandatory blending of ethanol will create an assured market for the sugar makers and help them boost earnings even if the sugar market is unbalanced. The Indian sugar industry is facing its worst crisis, due to higher supply of sugar. Most companies have incurred losses in the last two quarters. The decision would bring some relief to the industry. This was cheered by the sugar companies as they opened up over 18% each at the start and also ended high with some profit booking seen in some of teh stocks.

Solar Explosives Limited (SEL) a part of Solar Group started manufacturing Slurry Explosives in the year 1996-97. It also manufactures Detonators and Detonator components through Economic Explosives Limited and Solar Components Private Limited. The Group started manufacturing Bulk Explosives through wholly owned subsidiary Solar Capitals Limited in the year 2000. With a Licensed Capacity of 2 lac tone Explosives (Bulk and Packaged), 140 Million numbers of Detonators and 20 Million Meters of Detonating Cord, it is one of the largest suppliers of Packaged Explosives in India. Recently the company had announced that it would be merging one of its subsidiaries. SEL has three subsidiaries "Economic Explosives Ltd, Solar Capitals Ltd and Solar Components Private Ltd." Solar Capitals which manufactures bulk explosives and has 5 plants and 7 transfer plants will get merged with SEL. The remaining subsidiaries would also merge with each other which are manufacturing detonators and the accessories. The company had recently announced that it had bagged orders from CIL and some are also in pipeline. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector. The stock rallied ahead of result; we will update more on results soon.

Software solutions provider, iGate Global Solutions posted over two fold increase in net profit at Rs 24 cr for the quarter ended September 30, compared with Rs 11 cr for the same quarter last year. The total income of the company increased by 2% to Rs 191 cr for the quarter ended September 30, from Rs 187 cr for the corresponding quarter a year ago. But if seen on a qoq basis then the topline has been flat. It has been a good quarter for the company in terms of margins. The EBDITA has expanded by 260 bps (q-o-q) in this quarter. The company has added three new clients during the three months period of the second quarter. Offshore volume contribution stood at 78% in Q2FY08, which was higher as against 72% in Q2FY07. The combined usage rate also climbed to 75%. The company stated that its parent, US-based iGATE Corp, has decided to delist the company shares from the Indian bourses. But, the delisting is subject to shareholders approval and a regulatory authorization. Igate Corp.'s has to increase its holding in the unit to more than 90% from the current 81% to get it de listed. If fulfilled, the purchase of these shares will be done in line with SEBI rule via a shareowner-led reverse book building process.

Equities set new highs

Equity indices scaled new highs Wednesday as investors remained bullish even after the sharp climb Tuesday. Analysts maintain the market is in an overbought zone, but given the rate of fund flows, it is quite likely the run up will continue.

With the immediate term targets crossed, only a slowdown in earnings of blue chip companies could reduce the momentum, said Hitesh Sheth, head of research at Prabhudas Lilladher.

“All eyes are on Infosys Technologies; we expect a positive report from the company. Market has discounted the rupee appreciation, which hurt the company's margins last quarter,” he said.

IT Index was one of the biggest sectoral gainers on the BSE, closing higher by 3.25 per cent at 5,049. Infosys (up 3.74%), Satyam Computer (2.91%), Wipro (2.83%) and Tata Consultancy Services (2.6%) were amongst the biggest gainers.

Capital goods shares also advanced ahead of earnings as investors are optimistic on the sector in keeping with the India growth story. Larsen & Toubro shot up 6.6 per cent and BHEL rose 4.2 per cent on news of the conglomerates bagging new orders.

Bombay Stock Exchange's Sensex finished 2.07 per cent or 378 points higher at 18,658.25, making an all-time high of 18,703.67 before the close.

National Stock Exchange's Nifty closed 2.14 per cent or 114 points at 5,441.45. The index touched a life time high of 5454.7.

As the indices defy fundamentals and go on to make new highs almost every session, there is cause for concern. “The market is vulnerable at these levels; people are finding it difficult to exit at current levels. Any negative news on the political front will cause damage,” Hitesh Sheth said

Sensex scales another record high, closes above 18,650

The record-breaking trend continued on the bourses, with the Sensex crossing another milestone of 18,700 in today's trades. Domestic indices rallied today following the surge in Asian indices, cheered by the gains in Wall Street after the minutes from the US Federal Reserve supported hopes for another interest rate cut to stimulate economic growth in the USA. Taking cues from strong global trend, the Sensex opened with wide upside gap of 193 points and scaled a new peak of 18,704 by noon on sustained buying in information technology, capital goods, and banking stocks. Peace on political front also supported the market to remain buoyant. The Sensex recorded gains for the third straight session and added 378 points to close at 18,658, while the Nifty moved up by 114 points at 5,441.

Surprisingly, the market breadth was negative. Of the 2,806 stocks traded on the Bombay Stock Exchange (BSE) 1,417 stocks declined, 1,325 stocks advanced, and 64 stocks ended unchanged. Out of 12 sectoral indices on the BSE, ten indices ended in positive territory. The BSE CG index ended firm with gains of 4.37% at 16,631, while the BSE IT index rose 3.25% at 5,049 and The BSE Metal index added 2.58% at 14,444. However, the BSE CD index and the BSE FMCG index ended weak.

Action in several index heavyweights lifted the market. L&T led the pack and shot up by 6.60% at Rs3,372. BHEL soared 4.20% at Rs2,331, Hindlaco surged 3.84% at Rs170, Infosys flared up by 3.74% at Rs2,125 and ACC jumped by 3.53% at Rs1,218. Reliance Energy added 3.40% at Rs1,586, Bharti Airtel advanced by 3.04% at Rs1,072, Satyam Computer moved up by 2.91% at Rs484, and Wipro was up 2.83% at Rs503. However, Dr Reddy's Lab slipped 1.47% at Rs633 while, Bajaj Auto at Rs2,621, Ranbaxy at Rs425, Maruti Udyog at Rs1101, ITC at Rs184 and HLL at Rs224 slipped marginally.

IT stocks rallied sharply on expectations of better quarterly numbers. Tech Mahindra shot up by 9.32% at Rs1,441, Mphasis soared 3.70% at Rs301, HCL Tech flared up by 3.42% at Rs330 and I-flex Solutions added 2.94% at Rs1,919.

Over 2.61 crore Reliance Natural Resources shares changed hands on the BSE followed by Reliance Petroleum (2.44 crore shares), Ispat Industries (1.57 crore shares), Tata Teleservices (1.56 crore shares), and IFCI (1.36 crore shares).

Valuewise, Reliance Industries registered a turnover of Rs433 crore on the BSE followed by Reliance Petroleum (Rs417 crore), Reliance Energy (Rs386 crore), Reliance Communication (Rs353 crore) and Reliance Natural Resources (Rs244 crore).

No stopping the bulls; Sensex gains 378 points

After Tuesday (9 October 2007)'s solid surge, the market firmed up further today. The market hit new all-time high towards the latter part of the trading session. Easing of political worries and firm Asian markets boosted the bourses for the second day in a row. IT stocks edged higher ahead of Infosys' results which are due tomorrow, 11 October 2007. Capital goods, banking, realty and metal stocks surged. Auto stocks underperformed. The market breadth turned negative in the latter part of trade.

The market had pared gains in mid-morning trade after an initial surge to a record high. Mid-cap and small-cap indices underperformed the Sensex. European markets, which opened after Indian markets, were subdued today.

Asian markets, which opened before Indian markets, ended on positive note. MSCI's measure of Asia Pacific stocks excluding Japan hit a record high today.

The BSE 30-share Sensex rose 378.01 points, or 2.07%, to 18,658.25, a record closing high. Sensex opened with an upward gap of 193.19 points at 18,473.43. Sensex had climbed 423.23 points for the day at the day's high of 18,703.67 in late trade. It hit a low of 18,436.99 in the day.

The broader based S&P CNX Nifty was up 114.2 points, or 2.14%, to 5,441.45, a record closing high. It had hit a all-time high of 5,454.70 in late trade.

BSE clocked a turnover of Rs 8503 crore, higher than Tuesday (9 October 2007)’s Rs 7,815.67 crore.

Nifty October futures were at 5,457.25, a premium of 15.8 points or 0.29% over spot price of 5,441.45.

Nifty F&O segment clocked a turnover of Rs 79,786.18 crore today, 10 October 2007 compared to a turnover of Rs 82,362.26 crore on Tuesday, 9 October 2007.

The Congress-led United Progressive Alliance (UPA) government at the centre and its communist allies stepped back from the brink on Tuesday, 9 October 2007, agreeing to meet again this month to resolve a row over a nuclear deal with the United States. The next meeting of the UPA-Left committee which is looking into Left Front’s concerns over nuclear deal will be held on 22 October 2007. The committee held its fourth meeting in New Delhi yesterday, 9 October 2007.

The meeting was held in the backdrop of widening of rift on the nuclear deal with Left parties rejecting a plea of the government that it be allowed to engage in negotiations with International Atomic Energy Association (IAEA) over the nuke deal.

The fact the two sides would meet again signaled that the communists, whose parliamentary support keeps the ruling coalition in power, would not withdraw their support for the government immediately which the stock market had feared. News that the two sides would meet again sent Sensex surging 789 points on Tuesday, 9 October 2007.

Of the 30 shares of the Sensex, 24 had moved up, while the remaining were trading down. The market breadth turned weak on BSE in late trade: 1,291 scrips advanced, 1,405 declined, while 244 remained unchanged. The breadth was strong earlier during the day.

The BSE Mid Cap index rose 1.16% to 7,484.36 and BSE Small Cap index rose 0.51% to 9,022.75. Both these indices underperformed Sensex .

BSE Capital Goods index (up 4.37% to 16,631.35), BSE IT index (up 3.25% to 5,049), BSE Metal index (up 2.58% to 14,443.52), BSE Teck index (up 2.93% to 4,171.56) outperformed Sensex.

BSE Auto index (up 0.53% to 5,456.93), BSE Bankex (up 1.62% to 9,423.19), BSE Oil & Gas (up 1.11% to10,550.55), BSE Realty (up 1.99% to 9,944.78) underperformed the Sensex.

Infosys rose 3.74% to Rs 2,124.55 extending its recent solid rebound. Infosys will announce Q2 September 2007 results on Thursday, 11 October 2007. TCS (up 2.6% to Rs 1,124.95), Wipro (up 2.83% to Rs 503.15) and Satyam Computer Services (up 2.91% to Rs 484.25), also edged higher ahead of Infosys' results.

A total of seven brokerages expect a between 0.58% fall to a 4.6% rise in Infosys’ consolidated net profit as per Indian GAAP to between Rs 1,072.70 crore to Rs 1128.70 crore in Q2 September 2007 compared to net profit of Rs 1,079 crore Q1 June 2007. They expect a between 6.8% to 9.7% growth in Infosys’ revenue at between Rs 4,028.60 crore to Rs 4,138.40 crore in Q2 September 2007 compared to revenue of Rs 3,773 crore in Q1 June 2007.

Capital goods stocks surged. Larsen & Toubro (L&T) surged 6.6% to Rs 3,372. It hit an all-time high of Rs 3,450 today after it bagged $ 60 million order in Saudi Arabia.

Bharat Heavy Electricals (Bhel) rose 4.2% to Rs 2,330.65. It hit an all-time high of Rs 2,387 today. Suzlon Energy rose 5.7% to Rs 1,768.55. It hit an all-time high of Rs 1,791 today.

India’s largest private company in terms of market capitalisation and oil refiner Reliance Industries rose 0.65% to Rs 2,617.35. It hit an all-time high of Rs 2,675 today.

Auto stocks underperformed Sensex. Hero Honda Motors (up 1.28% to Rs 753.70) and Tata Motors (up 1.78% to Rs 805.85) edged higher whereas Bajaj Auto (down 0..85% to Rs 2,620.95) and Maruti Suzuki India (down 0.39% to Rs 1,101.05) drifted lower.

ACC rose 3.53% to Rs 1,218.15 and was among the major gainers from Sensex pack.

Reliance Energy rose 3.4% to Rs 1,585.85. It hit an all time high of Rs 1,624.60 today. The stock rose today on reports a special purpose vehicle two-third owned by Reliance Energy won a contract to build a Rs 6,000 crore, 100-storeyed tower and a business centre in Manchirevula in Ranga Reddy district, in the outskirts of Hyderabad.

Ranbaxy Laboratories (down 0.45% to Rs 424.80), ITC (down 0.3% to Rs 184.05), Dr. Reddy’s Laboratories (down 1.47% to Rs 633.15), were top losers from Sensex pack.

Metal stocks extended gains. Tata Steel (up 1.31% to Rs 844.55), Hindalco Industries (up 3.84% to Rs 170.30) and JSW Steel (up 3.44% to Rs 879.20) edged higher.

Realty stocks blossomed. DLF (up 3.1% to Rs 892.45), Unitech (up 1.73% to Rs 332.25) and Indiabulls Real Estate (up 0.6% to Rs 648.80) edged higher.

Side counters, Ashco Industries (up 20% to Rs 46.20), Sandesh (up 20% to Rs 204.75), Adlabs Films (up 21.67% to Rs 648.15), Triton Valves (up 20% to Rs 1,781.10) and Gujarat Mineral Deevelopment Corporation (up 20% to Rs 1,632.60), surged.

Madhya Desh Paper (down 10.44% to Rs 13.30) and Majestic Auto (down 10.58% to Rs 31.70) edged lower.

Drug maker Lupin rose 0.48% to Rs 588 after it acquired Japanese generic drug maker Kyowa Pharmaceutical Industry Co.

iGate Global Solutions rose 7.06% to Rs 339.50 on BSE after it said its net profit surged 124% in Q2 September 2007 over Q2 September 2006.

GAIL India declined 0.35% to Rs 383.90, after it signed gas sales agreement with Pragati Power Corporation for gas supply to a power project.

Bharti Airtel was up 3.04% to Rs 1,071.95 after Reserve Bank of India allowed foreign institutional investors to buy further shares in the company as their holding has gone below the caution limit of the company’s paid up capital

Tata Motors moved up 1.78% to Rs 805.85 after it raised prices on its entire range of commercial vehicles by 2% to 2.5% effective from 8 October 2007.

ICSA India was up 1.93% to Rs 1628.50, after it today, 10 October 2007, set record date for 5-for-1 stock split.

Moser Baer (India) moved up 2.62% to Rs 303.95 on reports the company plans to launch low-end VCD and DVD players.

Lloyds Metals & Engineers declined 5% to Rs 222.10 on BSE, on fixing record date for 5-for-1 stock split.

Glenmark Pharmaceuticals rose 4.52% to Rs 426.80 on receiving final approval from the US Food and Drug Administration for marketing oxcarbazepine tablets.

Kinetic Engineering was up 3.04% to Rs 133.95 after its board approved issuing 1.5 crore redeemable non-convertible preference shares to Reliance Capital.

Power Finance Corporation rose 1.31% to Rs 208.05 on reporting 22.5% rise in net profit to Rs 282.22 crore in Q2 September 2007 over Q2 September 2006.

European markets trading in red today. France’s CAC 40 (down 0.27% to 5,846.13) and FTSE 100 (down 0.05% to 6,612.40) edged lower. Germany’s DAX (up 0.2% to 7,996.16) edged higher.

Asian markets, which opened before the Indian markets, were trading in green today. Hong Kong’s Hang Seng (up 1.21% to 28,569.03) Japan's Nikkei (up 0.1% at 17,177.89), South Korea’s Seoul Composite (up 1.34% to 2,041.12) edged higher. Singapore’s Straits Times (down 1.33% to 3,814.45) edged lower.

The BSE 30-share Sensex saw a record single day rally of 788.85 points, or 4.51%, to 18,280.24, an all-time closing high on Tuesday, 9 October 2007. Sensex completed its 17,000 to 18,000 journey in just 8 trading sessions, the second fastest 1,000-point rally ever. The market had hit 17,000 mark on 26 September 2007.

Short covering by trapped bears, who went short anticipating political problems, also pulled up the market significantly yesterday.

Heavy FII buying and hopes of a further cut in interest rates by the US Federal Reserve at its next policy meeting on 30-31 October 2007 have boosted the bourses in the past few days.

Kouton Retail Listing

On 12 October 2007

Koutons Retail India will list on exchanges on Friday, 12 October 2007. It will be placed in the B1 group on BSE.

The company had fixed its initial public offer issue price at Rs 415 per share, the upper end of the Rs 370-415 price band.

At the IPO price of Rs 415, the PE multiple works out to 36.72, based on the year ended March 2007 EPS of Rs 11.3.

Koutons Retail India ended on 21 September 2007 with 45.52 times subscription. It received total bids for 16.04 crore shares as against the IPO size of 35.24 lakh shares.

The qualified institutional buyers (QIBs) category was subscribed over 66 times. The non-institutional investors category was subscribed 19 times. The retail investors category was subscribed 15 times. The employees category was subscribed 1.11 times.

Koutons Retail proposes to utilise the proceeds to set up exclusive brand outlets, establish a integrated manufacturing facility, purchase plant and machinery to increase the finishing and manufacturing capacity and improve its information and technology network.

It proposes to open 140 exclusive brand outlets for its brands ‘Koutons’ and ‘Charlie Outlaw’ in the next two years. It has been allotted approximately 13,000 square feet of land on a freehold basis by Haryana Urban Development Authority at Gurgaon.

Koutons Retail reported a net profit of Rs 34.49 lakh on sales of Rs 402.40 crore in the year ended March 2007.

Looking Glass , Market Mantra, Future O Scope

Looking Glass - Oct 10 2007
Market Mantra and Future-O-Scope - Oct 10 2007

Poll - You are ...

Retail Investor - 766 (79%) votes

HNI - 75 (7%) votes

Work for a Indian Brokerage house - 97 (10%) votes

Work for a FII - 25 (2%) votes

Total Number of Votes - 963

Thanks everyone!

How can we make use of this reader base ? Mail us at dpstock @ (Please mention the Subject as "VISITOR" )

Ambani brothers - the richest in the world

Move over Bills Gates, Carlos Slim and LN Mittal, the Ambanis are coming. While you may still be figuring out your gains from the phenomenal 788 points rally on Tuesday, the Ambani brothers are on their way to the top echelons of global billionaires’ club. By the time the market closed on Tuesday, the Ambani brothers were worth nearly $81 billion. That is a whopping 8% of what India’s GDP was last year.

Combined, this is greater than the net worth of Carlos Slim, the Mexican billionaire, who was recently crowned as world’s wealthiest individual ahead of Bill Gates.

In all, the top-15 business families in India (excluding the Tatas) added close to $11 billion to their net worth all in a day. The combined net worth of the top 15 stands at $213 billion, or close to 20%, of the GDP.

What’s more, Mukesh Ambani is now within striking distance of dethroning LN Mittal as the richest Indian. Though the latest figures are not available, LN Mittal is estimated to be worth around $48 billion, only $2 billion more than the current net worth of Mukesh Ambani. Another 4% appreciation in Reliance Industries stock price and Mukesh Ambani will go past Mr Mittal. The rate at which the Mukesh Ambani-owned companies are going, his net worth rose by $3.25 billion on Tuesday, this might well have happened by the end of the day.

Equally astonishing has been the rise of Anil Ambani. The younger Ambani sibling added over $3 billion to his net worth on Tuesday. He is now worth nearly $35 billion and second only to his elder brother.

The other big gainer for the day was Sunil Bharti Mittal, who is riding high on the rising market capitalisation of Bharti Airtel. The telecom czar added nearly $1.25 billion to his net worth on Tuesday, thanks to a 5.6% rise in his company’s market price. He is now worth $22.4 billion. DLF’s KP Singh also got richer by a billion dollars and he is just a shade behind Anil Ambani at $32.6 billion at number three. (All calculations have been made by netting out the crossholding among group companies)

Options for retail investors

If you sail a small boat, what do you do in choppy seas complete with high tidal waves? You could dive deep to stay off turbulence on the surface and spare being thrown around. Apply the strategy to the volatile stock markets, and you may still have an opportunity to weather the storm. Consider this. Since July, the benchmark sensex shot up 22%, while the index for medium-sized companies represented by BSE midcap index rose only by 11.7%. The index for BSE smallcap stocks rose 13.6%. Fund managers see an opportunity here.

Says Samir Rachh, fund manager, Emkay PMS: “As the trading gets more institutionalised, the focus is on the top 100 stocks. Investors should look for good stocks below the radar of large fund managers.’’ Think of FIIs as large whales, who have a big appetite. In the last couple of days, as they poured big money, they lapped up frontline stocks making some of them look expensive.

Their logic was simple. Should there be any shock in the system, the more liquid large stocks will allow them a quick exit. With action diverted, medium and small cap stocks seemed lost for attention. Says another fund manager in one India’s largest mutual fund: “After a while, the action is bound to trickle down the smaller companies. After all, it is some of these companies that will eventually become large cap stocks.’’

How do investors pick these businesses? Rachh says today there is a premium for growth and size, rather traditional value based investing . For example, though oil companies like BPCL and HPCL may be valuable based on their assets, investors aren’t buying these stocks as they can’t see a growth story for these companies. Instead, smaller businesses like Educomp and Elecon Engineering have risen faster, on the basis of growth plans and healthy order books respectively.

Says Bharat Shah, CEO and managing director of ASK Investment Managers, who manages over $600 million: “Today, growth is an important subset of value. There is value only if there is real growth.’’

Shah, one of India’s earliest fund managers, says that to make money, investors should have the stomach for quotational losses. He also advises that the popular price-to-earnings ratio is an inefficient metric to value stocks.

He would rather prefer to arrive at the value of a business based on the life time earnings potential of a company. “In a market of 6,000 stocks, not everything is expensive. There are enough stocks available at reasonable prices to fill a portfolio.’’

Via ET

Daily Call - Oct 10 2007

Daily Call - Oct 10 2007

Daily Technicals, Futures - Oct 10 2007

Daily Technicals, Futures - Oct 10 2007

Morning Call

Market Grape Wine :

In House :

Intra day: Buy Icicibank and JPassociates

Buy Tatapower above 975 with a TGT of 1015 and a SL of 963

Buy Maruti above 1105 with a TGT of 1150 and a SL of 1090

Out House :

Markets at a support of 17786 & 18077 levels with resistance at 18484 & 18675 levels .

Buy : RIL ( Bonus and split rumours target 3050 s/l of 2420 )

Buy : REL target 1800 s/l of 1441

Buy : HDIL

Buy : Bharti & RComm

Buy : JpAsso

Buy : Divis

Buy : NTPC

Buy : JpAsso


Dark Horse : RPL , REL , HDIL , RIL , Jp , Colgate & SBIN

Sweet Sugar : BajajHind with strict stop loss

Bullet for the Day : RIL & Rel with stop loss .

Pre Open Market Commentary

Indian market is likely to have a positive opening on the back of positive global and domestic cues. On Tuesday, the Indian markets closed on a strong note which is the highest ever in the history of Indian stock market. The BSE Sensex surged by 788.85 points to close at 18,280.24 while Nifty advanced by 242.15 points to close at 5,327.25. The yesterday''s rally was on the back of the surprise news that both the UPA and Left have agreed to carry on the meeting over the US nuclear deal on October 22. We expect the market that the profit booking may prevail at higher levels .

Tuesday, the US markets closed in a positive territory. The Dow Jones Industrial Average (DJIA) surged 120.80 points to close at 14,164.53. The S&P 500 (SPX) index increased by 12.57 points to close at 1,565.15 and the NASDAQ Composite (RIXF) grew 16.54 points to close at 2,803.91.

Indian ADRs ended in green. In technology sector, Patni computers grew by (4.36%) along with Satyam by 3.54%, Wipro by 3.24% and Infosys by 2.84%. In banking sector, ICICI bank and HDFC bank gained (4.30%) and (3.47%) respectively. VSNL and MTNL advanced by (4.20%) and (3.72%) respectively. In Metal sector, Sterlite industries increased by (4.43%).

The major stock markets in Asia are trading strong. Hang Seng Index grew by 363.44 points to trade at 28,591.48. Japan''s Nikkei is trading up by 57.63 points at 17,217.53. Singapore''s Straits Times index advanced by 18.47 points to trade at 3,884.22. Seoul Composite trading higher by 22.04 points at 2,036.17.

Yesterday, the gross equity purchased was Rs.9,160.40 (in crores), and the gross debt purchased was Rs458.30 (in crores). The gross equity sold was Rs5,740.60 (in crores), and the gross debt sold was Rs202.90 (in crores). The net investment of equity was Rs3,419.80 (in crores) and the net debt investment was Rs255.40 (in crores).

Today, Nifty has support at 5,201 and resistance at 5,381 and BSE Sensex has support at 17,860 and resistance at 18,463.

Daily Technicals, Futures, Outlook - Oct 10 2007

Daily Technicals, Futures, Outlook - Oct 10 2007

ValueLine (Hindi) for October 2007

ValueLine (Hindi) for October 2007

Rally to continue

The market is likely to witness upward trend as major Asian gauges like the Nikkei, the Hang Seng index, the Kospi index and the Jakarta index have gained substantially in current trades and US Market also ended with a positive note. The domestic indices also gained by strong volatility on Tuesday and saw the index gain over 750 points during intra-day trades to finally closed above 18250 marks. However, strong intra-day volatility may weigh on the sentiment. Among the key indices, the Nifty is likely to resists around 5400 levels and has a key support at 5260 levels in the near-term. The Sensex has a likely support at 17500 and may face resistance at 18800.

Stocks rallied sharply on Tuesday, sending the Dow Jones to all-time highs as the minutes from the last Fed meeting supported hopes for another interest rate cut by the end of the year. While the Dow Jones moved up by 121 points at 14165, the Nasdaq managed to add 17 points at 2,804.

All the Indian floats had a field day on the US bourses. Patni Computer flared up by 4.36% and VSNL jumped 4.20% , while Dr Reddy's, Tata Motors, ICICI Bank, HDFC Bank, Infosys, Satyam, VSNL and Wipro gained over 1-3% each.

Crude oil prices moved above $80, with the Nymex light crude oil for November delivery gained by $1.24 to close at $80.26 a barrel. In the commodity space, the Comex gold for December delivery jumped by $4.40 to settle at $743.10 an ounce.

Sugar stocks may move up

The following stocks be in the limelight in today's trade.

Sugar stocks may see an upside on reports that cabinet ministry has approved relief package for sugar Industry. Government makes 10% ethanol blending in petrol mandatory from 8 October 2007 and 5% ethanol blending in petrol mandatory with immediate effect.

As pre reports, iGate Global Solutions has reported a net profit of 126.73% to Rs 22.9 crore in Q2 September 2007 as against Rs 10.1 crore in Q2 September 2006. Revenue declined 1.4% to Rs 200 crore in Q2 September 2007 from Rs 203 crore in Q2 September 2006. The company will officially announce the Q2 September 2007 results today.

Reliance Energy (REL) has reportedly bagged transmission project worth Rs 2,000 crore. As per reports, Jyoti Structures will provide EPC services for REL project.

Cummins, one of the principal customers and shareholders of Kpit Cummins, is reportedly looking to raise its stake in the latter to near 15% from about 13% currently. Kpit Cummins' board will meet on 17 October to consider preferential allotment to Cummins.

Moser Baer Entertainment is reportedly in talks with all electronic majors including Philips, LG, Samsung and Mirc to jointly collaborate and launch a low-end VCD and DVD player, priced around Rs 1,000 and Rs 1500 respectively.

The Board of Control for Cricket in India (BCCI) has reportedly decided to blacklist Zee Sports form participating in the bidding of the broadcast rights for the Indian Premier League (IPL) — BCCI's version of the Twenty20 game in view of the ongoing fracas between BCCI and the Subhash Chandra-owned Indian Cricket League (ICL).

Almondz Global Securities has entered into an agreement with Noble Group, an independent investment bank in the UK. It plans to jointly set up two foreign institutional investor desks in Mumbai and London, start primary equity operations and a fund.

DS Kulkarni Developers' board approved the merger of Oyster Promoters & Developers with itself.

S Kumars Natiowide reportedly sees its net profit at Rs 190-200 crore on revenue of Rs 1700 crore in 2007/08, driven by its brands and garment business.

Foreign institutional investors were net buyers of equity worth Rs 1416.72 crore on Tuesday, 9 October 2007 while domestic institutional investors net sold Rs 529.38 crore, according to provisional data on NSE.

Grey MArket - Reliance Power, Supreme, Consolidated, Kouton

Dhanus Tech. 295 70 to 72

Koutons Retail 415 80 to 85

Consolidated Construction 510 185 to 190

Supreme Infra 108 60 to 62

Saamya Biotech 10 8 to 9

MAYTAS Infra 320 to 370 130 to 135

Circuit Systems (India) Ltd. 35 3 to 4

Reliance Power - 38 to 40

Trading Calls

Nifty (5327) Sup 5251 Res 5444

Buy Renuka Sugar (729) SL 723 Target 741, 745

Buy JP Associates (1141) SL 1130
Target 1165, 1170

Buy GAIL (387) SL 382
Target 395, 398

Sell Aurobindo Pharma (582) SL 588
Target 570, 568

Sell Bharat Forge (281) SL 285
Target 273, 271

Rich Dad, richer sons

It isn't so much trouble to get rich as it is to tell when we have got rich.

We expect another strong opening, on the back of rally across global markets, led by Wall Street. The undertone for the morning remains upbeat, but we do not rule out some cooling following the staggering advance in the past few weeks. And guess what, in recent memory, the sun outage season was more than sunshine for the bulls as the bears got burnt by the heat.

Dhirubhai's legacy of wealth creation is known. But Mukesh Ambani has reportedly increased his wealth by roughly Rs4mn every single minute in recent months, thanks to surging stock prices of his company. He is reportedly close to becoming the richest Indian if another 5% appreciation is seen in his stocks. Anil Ambani and KP Singh of DLF are following behind with a gap.

But how much has your portfolio moved? After yesterday's breathtaking rally that catapulted the Sensex well above the 18,000 mark - much to the surprise of most market participants - there is already talk of 20k before Diwali. Forget about who’s richest and where the Sensex is headed. As we mentioned yesterday, protect yourself and don’t worry if you are under-performing temporarily. Better to lose notional profit than real money.

Going by the mood the bulls are in the 20k target doesn't look too steep. Especially, if the foreign funds continue to pump money at the pace at which they have been doing ever since the Fed rate cuts. The temporary tempering of rhetoric by the Congress and the Left has added fuel to the fire. What's more, if the two parties can burry the hatchet at a crucial meeting scheduled for Oct. 22, nothing like it. There could be more goodies coming the bulls' way this festival season, if the Fed decides to play Santa again, on Oct. 31.

Before that, the Bank of Japan is meeting tomorrow and is most likely to hold its line on interest rates given the sluggish growth in the world's second-largest economy and concerns on the US economy. This will add to the so-called "carry trades" and boost inflows to emerging markets like India.

The only party pooper could be Dr. Y.V. Reddy. What the RBI Governor does on Oct. 30 will have a bearing on the market. Given the unprecedented surge in overseas inflows and the consequent pressure on inflation could prompt another liquidity tightening move from the central bank. That could have some negative effect on the market sentiment.

One will also have to keep an eye on quarterly results and take a call accordingly. Though valuations are already way ahead of fundamentals, in a momentum market this doesn't really matter. Still, one has to be guarded, as the rise has come too fast and is also not broad based.

Reliance stocks (belonging to both the Ambani brothers) have been on fire, but when the tide turns, even they may not be able to withstand the sell-off if any.

Sugar shares are likely to do well after the Government announced a new set of relief measures to help the industry cope with the current downturn.

Bihar Tubes, Indo Wind Energy, PFC, South India Bank, Spice Tele and Supreme Industries will announce their results today.

iGate Global will be in focus as the company said that it has received a letter from its US parent, informing its intention to delist the shares from the stock exchanges in India. The company has also announced its Q2 results. The bottomline shows a surprising jump on the previous quarter though the sequential growth in the topline is more muted.

US stocks rallied on Tuesday, sending the Dow Jones Industrial Average and S&P 500 index to all-time highs, as investors breathed a sigh of relief that the minutes from the last Fed meeting fueled optimism for another interest rate cut by the end of the year.

The minutes from the last FOMC meeting allayed investors' concern that the US economy is heading for a recession.

Fed policy makers backed a decision to cut the benchmark lending rate by half a percentage point at the Sept. 18 meeting and said a decline in inflation will probably be sustained.

The S&P 500 added 12.57 points, or 0.8%, to 1,565.15. The Dow Jones increased 120.80 points, or 0.9%, to 14,164.53. The Nasdaq Composite Index rose 16.54 points, or 0.6%, to 2,803.91.

US shares drifted higher through the morning, flattened out in the early afternoon and then began to rise as investors digested the Fed minutes.

After the close, Alcoa reported results. The aluminum maker and Dow component reported earnings of 64 cents per share, up from 62 cents a year earlier and 2 cents short of forecasts. Revenue fell from a year ago, but met forecasts.

Market breadth was mixed. On the New York Stock Exchange, winners and losers were narrowly mixed on volume of 620 million shares. On the Nasdaq, decliners beat advancers four to three on volume of 1.13 billion shares.

Treasury prices fell after the minutes, raising the yield on the benchmark 10-year note to 4.65% from 4.64% late on Friday. In currency trading, the dollar rose against the euro and yen. COMEX gold for December rose $4.40 to settle at $743.10 an ounce.

US light crude oil for November delivery rose $1.24 to settle at $80.26 a barrel on the New York Mercantile Exchange after slumping $2.20 in the previous session.

European shares ended higher as well. The pan-European Dow Jones Stoxx 600 index rose 0.5% to 387.77. The UK's FTSE 100 closed up 1.1% at 6,615.40, the German DAX 30 advanced 0.1% to 7,980.44 and the French CAC-40 added 0.6% to 5,861.93.

In the emerging markets, the Bovespa in Brazil was up 1.4% to 63,549 while the IPC index in Mexico was flat at 31,801. The RTS index in Russia gained 0.5% to 2141 and the ISE National-30 index in Turkey surged by 3.3% to 73,885.

Asian markets extended their gains this morning. The Nikkei in Tokyo was up 35 points at 17,195 while the Hang Seng in Hong Kong jumped 380 points to 28,616. The Kospi in Seoul surged 20 points to 2034 and the Straits Times in Singapore added 15 points to 3880.

Honda paced gains among regional exporters. BHP Billiton advanced in tandem with metals and crude oil prices. DBS Group Holdings climbed after Singapore's economy grew faster than expected.

The Morgan Stanley Capital International Asia Pacific Index climbed 0.3% to 167.52 as of 10:26 a.m. in Tokyo, set for its highest close. Benchmarks in China, Australia and Singapore were also headed for records. Taiwan's market is closed today for a holiday.

Bulls on a new high

Mile stones after mile stones, every session seems to be a historical one as bulls continue its record breaking run. It was the second fastest 1,000 point rally in eight trading session. Earlier, the fastest 1,000 point rally was from 16k-17k completed in six session’s in September. FII invested $3.54bn in the cash market during the 17-18k journey and also recorded its highest intra-day gain ever.

Among the BSE sectoral indices, BSE Oil & Gas index (up 6.7%), BSE Realty index (up 5.1%) and BSE PSU index (up 4.5%).

Finally, BSE 30-share benchmark Sensex ended 788 points higher to close at 18,280. NSE Nifty jumped 242 points to close at 5,327.

Parvnath gained 6.3% to Rs369 after the company announced that they have secured approval for SEZ. The scrip touched an intra-day high of Rs373 and a low of Rs335 and recorded volumes of over 8,00,000 shares on NSE.

Petron Engineering spurred over 5.7% to Rs284 after the company announced that it has received order worth Rs13.5mn from Moser Baer. The scrip touched an intra-day high of Rs292 and a low of Rs256 and recorded volumes of over 38,000 shares on NSE.

IVRCL Infrastructure advanced 6% to Rs439 after the company announced that it secured Rs7.61bn contract. The scrip touched an intra-day high of Rs443 and a low of Rs392 and recorded volumes of over 12,00,000 shares on NSE.

Ganesh Housing slipped 1.1% to Rs472. The Company announced their plans to enter retail. The scrip touched an intra-day high of Rs499 and a low of Rs461 and recorded volumes of over 13, 000 shares on NSE.

BHEL advanced 2% to Rs2236 after the company announced that they won Rs3.9bn power plant order. The scrip touched an intra-day high of Rs2248 and a low of Rs2140 and recorded volumes of over 13,00,000 shares on NSE.

GTL Infrastructure spurred by over 5% to Rs37. The company announced that they may raise funds overseas selling securities. The scrip touched an intra-day high of Rs38 and a low of Rs33 and recorded volumes of over 16,00,000 shares on NSE.

Power stocks were among the major gainers. REL surged by over 11% to Rs1533, Tata Power spurred over 8.5% to Rs980, Powergrid gained over 6.5% to Rs101 and PFC advanced by 5.5% to Rs205.

Realty index was the top gainer, the index gained over 5%. Akruti rallied by over 10% to Rs814, DLF surged by over 3% to Rs865, Unitech jumped over 5.5% to Rs326 and Parsvnath was up 6.3% to Rs369.

IT index continued its bounce back despite rupee rose to highest since February 27, 1998. Wipro surged over 4% to Rs489, Satyam Computer advanced 3.5% to Rs471, Infosys was up 2.1% to Rs2047 and TCS added 1.5% to Rs1094.

Stocks in News:

State Bank of India (SBI) received government approval to raise capital up to Rs100bn by March 2008.

ONGC Mittal Energy Service Limited, a joint venture between ONGC and Mittal, has decided to suspend the operation of the overseas hydrocarbons trading and supply chain management joint venture.

L&T bags Rs6.9bn contract from IOC for setting up of its recovery units.

Reliance Energy Ltd bags Rs60bn deal to build 100 storey tower and a business centre in Manchirevulla, Hyderabad, with Sobha Developers being the other major partner with 23% stake.

DLF is close to signing a licensing deal with Italian luxury brand, Giorgio Armani, providing it the rights to retail and market the brand in the Indian sub-continent.

Tata Motors is firming up plans to launch new cars in 2007-08 and is likely to unveil a new multi-utility vehicle during 2007.

Tata Motors and M&M have announced hike in commercial vehicle prices and Ashok Leyland is expected to follow soon.

Wockhardt plans to triple its revenues from US by 2009 from Rs2bn, using both organically and inorganically routes.

Bharati Shipyard and Apeejay group are expected to announce a shipbuilding and repair unit in Orissa.

Gujarat State Petroleum Corporation has decided to call for fresh bids from global majors to sell up to 30% stake in Krishna Godavari Basin block.

Moser Baer plans to make an entry in to the consumer electronics segment by offering low end VCD and DVD players.

Mauritius based FIIs are expected to acquire 47% stake in the biotech arm of Intas Pharamceutical.

United Breweries will spend Rs10bn over the next 2-3 years on capacity expansion and upgrading its existing plants.

Cummins will up its KPIT stake to 14.9%.

Kavveri Telecom is expecting to get major Indian defense orders after the completion of test by 2010.

Advance tax collection from IT companies in September grew by 110% to Rs5.1bn and was up by 153.8% for April – September period.

Telecom commission decided against the auction of 2G spectrum and said that the country will continue with the existing subscriber base linked allocation of radio frequency.

Maharashtra faces load shedding with demand for power overshooting supply.

Cement dispatches were up by 10% in the first half of the year at 81mn tons.

The government will subsidise loans to the sugar mills and make blending of 5% ethanol mandatory.

The excise duty collection grew 7.2% yoy basis in September 2007 at Rs101.9bn and customs duty grew by 16.1% during April – September period to Rs484.8bn.

Government is unlikely to relax 5-yr rule for airlines to qualify for international operations.

Fund Activity:

FIIs were net buyers of Rs14.17bn (provisional) in the cash segment on Tuesday while the local institutions pulled out Rs5.29bn. In the F&O segment, foreign funds were net buyers at Rs8.39bn. FIIs were net buyers of Rs34.2bn in the cash segment on Monday.

Major Bulk Deals:

Bear Stearns has bought C&C Construction while Edelweiss has sold the stock; Emerging Capital Advisors has sold Evinix; Merrill Lynch has purchased Trans Freight Containers.

Upper Circuit:

Ruby Mills, KEI Industries, Swan Mills, Yashraj Containers, Victoria Mills, RIIL, Usher Agro, XL Tele, Bombay Burmah, Jai Corp, Igate Global and Marksans.

Lower Circuit:

Rei Agro and IID Forgings

India Macro Picture

India Macro Picture

Nifty October 2007 futures at premium

Turnover surges

The Nifty October 2007 futures were at 5337, at a premium of 9.75 points as compared to spot closing of 5327.25.

The NSE F&O turnover was Rs 82,362.26 crore, which was higher than Rs 69,842.20 crore on Monday, 8 October 2007.

Reliance Capital October 2007 futures settled at premium, at 1,778, compared to the spot closing of Rs 1,768.

Bhel October 2007 futures settled at premium, at 2,245 compared to the spot closing of Rs 2,236.80.

IFCI October 2007 futures settled at premium, at 87.60, compared to the spot closing of Rs 86.60.

In the cash market, the S&P CNX Nifty was up 242.15 points or 4.76% at 5,327.25. Nifty recorded a lifetime high of 5,348.70 today.

Strategy, Cairn India, Economy

Strategy, Cairn India, Economy

Model Portfolio

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