Tuesday, November 27, 2007
Hindustan Petroleum Corp Ltd plans to invest 2.5 billion dollars (over Rs 9,961 crore) in expanding its Visakhapatnam refinery capacity to 16 million tons, the Rajya Sabha was informed on Tuesday.
HPCL plans to de-bottleneck units at Visakhapatnam refinery to augment the throughput to 10 million tons from current 7.5 million tons, by the end of XIth plan (2012), Minister of state for Petroleum & Natural Gas Dinsha Patel said in a written reply to a question.
The company would then raise the capacity to 16 million tons by the end of XII plan (2017). "HPCL has undertaken a preliminary feasibility study to set up a petrochemical complex at Visakhapatnam in consortium with a partner, after which, the capacity and costs can be firmed up," he said.
To a separate question, Patel said public sector fuel retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum lost Rs 26,363 crore during first half of current fiscal on sale of petrol, diesel, domestic LPG and PDS kerosene at prices below cost.
The companies lost Rs 2,638 crore on petrol, Rs 9,919 crore on diesel, Rs 8,206 crore on PDS kerosene and Rs 5,608 crore on domestic LPG, he said.
The retailing firms would be issued bonds for an amount equal to 42.7 per cent of their under-recoveries and one-third of the revenue loss would be borne by upstream companies like ONGC, he said.
To another question, Patel said the fuel retailers have planned 3,215 new petrol pumps in the country during 2007-08.
Frontline shares yo-yoed within a narrow range in negative territory on Tuesday due to weak global cues and devoid of any uplifting domestic triggers.
"Traders who bought scrips last week when the Nifty fell below 5500 levels are now booking profits. Others are not really participating as the immediate to near term direction is not clear. I expect this lacklustre movement to continue till the F&O expiry on Thursday, after which more clarity will probably emerge," said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment Interrmediates.
Expecting limited movement in index stocks, Iyer advises traders not to go long till Nifty crosses 5790.
National Stock Exchange's Nifty today closed 0.59 per cent or 33 points lower at 5,698.15. The index touched an intra-day low of 5655.60 and high of 5743.55.
Bombay Stock Exchange's Sensex ended down 0.62 per cent or 120 points at 19127.73 after dipping to an intra-day low of 19,019.33. The high was 19,211.58.
Bharti Airtel (down 3.32%), ICICI Bank (2.18%), Reliance Energy (1.91%), Maruti Suzuki (1.5%), NTPC (1.53%) and Hindalco (1.52%) were the major index losers.
Top Sensex gainers were BHEL (up 2.6%), Bajaj Auto (2.54%), State Bank of India (1.38%), Tata Consultancy Services (1.2%) and Wipro (1.12%).
Even as action in frontline was minimal, select non-index stocks rallied. Ashok Leyland (up 16.65%), TVS Motor (12.24%), Chennai Petrochemicals (11.16%), Bongaigaon Refineries (8.71%), Indian Oil (5.79%), Orchid Chemicals (5.55%) and Apollo Tyre (4.24) topped the list of BSE gainers.
Realty stocks also ended significantly higher, driving the BSE Realty Index up 1.24 per cent, the biggest sectoral gainer of the exchange. Phoenix Mills climbed 4.69 per cent, HDIL was up 3.5 per cent, Indiabulls rose 2.94 per cent and Mahindra Gesco advanced 2.22 per cent.
Asian shares also ended in the negative with the Hang Seng and Straits Times down 1.51 per cent and 1.34 per cent respectively. The Nikkei, however, bounced back from early lows and ended half a per cent higher.
European indices traded in-line with Asia. London's FTSE lost 0.36 per cent, Germany's DAX shed 0.53 per cent and France's CAC was 0.28 per cent lower.
The Abu Dhabi Investment Authority will invest $7.5 billion in Citigroup, offering the nation's largest bank needed capital to offset big losses from mortgages and other investments.
The cash from the sovereign investment fund of the Gulf Arab state, which has benefited from this year's surge in oil prices, will be convertible into no more than 4.9 percent of Citigroup Inc.'s equity. Citigroup characterized the investment as passive and said the fund will not be able to name any board members to the bank.
The Investment Authority will receive equity units that pay an 11 percent annual yield -- a high price for Citigroup, whose dividend yield is 7.3 percent. They will then be converted into Citigroup common shares at a price of up to $37.24 a share between March 15, 2010, and Sept. 15, 2011.
The purchase, announced late Monday, would make the Investment Authority one of Citi's largest shareholders.
"We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth," said the Investment Authority's managing director, Sheikh Ahmed Bin Zayed Al Nahayan. "This investment reflects our confidence in Citi's potential to build shareholder value."
The investment, which was expected to close within the next several days, will be considered Tier 1 capital for regulatory purposes. That will help Citi reach its goal of returning to its target capital ratios -- essentially, its ratio of cash to debt -- in the first half of 2008, the bank said.
The Sensex opened with a negative gap of 119 points at 19,129 on the back of weak cues from the global markets. The index managed to touch a high of 19,212 before slipping to a low of 19,019 - a swing of 193 points - in early trades.
The Sensex, thereafter, exhibited range-bound movement for the remaining part of the day, and finally ended with a loss of 120 points at 19,128.
The market breadth was negative - out of 2,842 stocks traded, 1,476 declined, 1,300 advanced and 66 were unchanged today.
Bharti Airtel plunged 3.3% to Rs 917. ICICI Bank and Reliance Energy dropped around 2% each to Rs 1,132 and Rs 1,755, respectively.
Maruti and NTPC slipped 1.5% each to Rs 938 and Rs 235, respectively.
Hindalco and ACC, also declined 1.5% each to Rs 191 and Rs 1,112, respectively.
Reliance declined over 1% to Rs 2,842. Ranbaxy was also down 1% at Rs 393.
...AND THE MOVERS
BHEL and Bajaj Auto surged 2.5% each to Rs 2,673 and Rs 2,653, respectively.
SBI rallied 1.4% to Rs 2,273. Wipro and TCS advanced over 1% each to Rs 458 and Rs 997, respectively.
Mundra Port and Special Economic Zone (SEZ) was listed at Rs 770, a 75% premium to the issue price of Rs 440. The stock soon zoomed to a high of Rs 1,150. The stock finally ended the day with a gain of 119% at Rs 962.
VALUE & VOLUME TOPPERS
Debutant Mundra Port topped the value chart with a turnover of Rs 1,458 crore followed by Essar Oil (Rs 362 crore), Reliance Petroleum (Rs 242.70 crore), Jindal Steel (Rs 185.40 crore) and Deccan Aviation (Rs 143.70 crore).
Ashok Leyland led the volume chart with trades of around 2.12 crore shares followed by Essar Oil (1.70 crore), Mundra Port (1.48 crore), Ispat Industries (1.35 crore) and IFCI (1.35 crore).
One of our readers posts the following - bolo - Chor kaun ?
In response to your coverage i would like to post some comments
Reliance Industries announced last Friday sale of 4% equity in Reliance Petroleum Ltd. at an average price of Rs.223 per share.
These sales were made between November 10 and November 23,2007.
Interestingly just one week prior to RIL (owned by Mukesh Ambani) selling the shares, an unknown group of people bet their shirts on a fall in Reliance Petroleum’s share price, in a magnitude never seen before in Indian stock markets.
Between November 1 and November 6, 2007, this group made short sales of 10crore shares of Reliance Petroleum in the futures segment of National Stock Exchange.
These short sales were made at prices between Rs.275 and Rs. 295 per share.
These numbers are based on official data published by NSE.
The value of these short sales is an unprecedented Rs.3,000 crores approximately.
This group of persons has made a cool profit of approx. Rs 1,000 crores in less than a month, because the Reliance Petroleum shares have now crashed from Rs.295 to Rs 195 per share!. These guys have made Rs.100 per share.
Who are these super smart traders?
Who financed these traders for their margins? Where has this profit gone?
What is the connection of these people with Mukesh Ambani, RIL and connected people?
And who has suffered the corresponding loss of Rs. 1000 crores? Its innocent small investors who bought Reliance Petroleum shares at the high prices, not knowing that this unholy alliance was indulging in insider trading and making illegal profits while Mukesh Ambani’s own company RIL was selling shares without disclosing this to investors!!
Amid rumours about US energy giant Chevron exiting Reliance Petroleum, derivatives trading in the company's scrip has been banned.
A Chevron spokesperson said from California that it was evaluating its options regarding RPL. The petroleum major owns five per cent stake in RPL, currently valued at about one billion dollar as against a purchase price of 300 million dollars.
Meanwhile, RPL shares have been seeing huge turnover in both cash and derivatives segment over the past few days. The derivatives trading was banned soon after it resumed trading on Monday after a previous ban.
According to a circular issued by National Stock Exchange, the RPL stock futures had crossed 95 per cent of the market-wide position limit and is currently in the ban period.
Late last week, RIL said that it sold 18 crore shares of RPL for over a billion dollar, reducing its stake to 70.99 per cent. This triggered speculations that Chevron could offload its five per cent stake as it might not be able to raise its stake to the desired 29 per cent level.
While taking a five per cent stake in RPL last year, Chevron was also given an option to acquire a further 24 per cent. However, speculation hit the market that the US company might acquire a maximum 20 per cent stake now as RIL would not like to dilute its stake to below 51 per cent.
"Chevron continues to evaluate options with our ownership in Reliance Petroleum. We will provide specific project updates when definitive decisions are made," the company spokesperson said in a statement.
An RPL spokesperson could not be contacted immediately.
Religare maintains 'buy' on DS Kulkarni Developers
MUMBAI: Religare Securities believes DS Kulkarni Developers has solid growth prospects and maintains ‘buy’ on the stock with a target price of Rs 502. At the current price of Rs 280, DS Kulkarni trades price to earnings of 12 times 2007-08 estimated earnings per share of Rs 23.3 and 5.6 times 2008-09 EPS of Rs 49.9.
The company quotes at 0.4 times one-year forward net asset value of Rs 627 which is relatively cheaper than Mumbai and Pune-based reality players. The target price of Rs 502 for the scrip represents a multiple of 0.8 times one-year forward net asset value.
DS Kulkarni Developers has entered into an agreement with Netherlands-based GTC Real Estate for joint development of 250 acre multi-services special economic zone at Pune. The company has possession of the land and has already received in principle approval for the SEZ which will have both processing and non-processing areas.
The company has commercial terms with GTC for 230 acres. The remaining 20 acres will be utilised for film animation school, with the several European countries evincing interest in establishing strategic tie-ups for the same.
The Dutch real estate developer will be investing $96 million in the zone in a phased manner. The company’s saleable land bank expands to 34 million square feet, which is expected to be executed by 2013.
Religare Securities recommends a ‘buy’ on Vishal Retail with a potential appreciation of 45 per cent.
Vishal Retail is one of the fastest growing retail companies, having opened 70 stores in 49 cities over past five years. The company rolled out 1.3 million square feet of retail space at the end of 2006-07 and plans to add another 5 million square feet over next three years. Of this, it aims to add 1.1 million square feet in 2007-08 and already tied up with real estate developers for 0.8-0.9 million square feet.
Religare expects the new rollouts and steady growth in old stores to enable Vishal to witness 77 per cent revenue CAGR to Rs 3,320 crore over FY07-FY10.
The brokerage has undertaken a comparative valuation of Vishal Retail with Pantaloon Retail and Shoppers’ Stop. Although the comparison is not on a like-to-like basis, Religare sees common ground in the growth potential for all these companies.
India’s $300 billion retail sector is at a point of inflexion and is estimated to grow at CAGR of 6-7 per cent over 2007-10. According to industry sources, organised retail is estimated to grow at CAGR of 25-30 per cent over 2007-10 to reach $60 billion.
Both existing and new players have announced aggressive expansion plans. Religare estimates that the organised retail sector will receive investments over $20 billion over next five years.
Vishal has highest EBITDA margin amongst peers like Shoppers’ stop and Pantaloon retail. The brokerage believes tighter cost control has enabled Vishal to record strong margin expansion, with the EBITDA margin coming in at over 11 per cent for 2006-07.
As a conservative measure, Religare has maintained the existing discount to peers in its valuation based on 2008-09 estimates, thus the target 2008-09 P/E multiple of 22.6 times for Vishal Retail, a 52 per cent discount to its peer. This gives a target price of Rs 1,018 for the stock, which signifies a price-to-sales ratio of 1 times 2008-09.
Downward start for Indian indices triggered by the global weakness but Asian indice traded mixed with Nikkei closing in green while Hang Seng ended in red. After yesterdays surprise rally Indian Indices took some hitting from investors as they traded cautious. Indices traded volatile through out the day, the entire day was lackluster ahead of FNO expiry week. But indices recovered to end with modest losses. Selling was seen across the board except Aviation, Auto and Realty stocks and selective Capital Goods. Mid caps stocks like Deccan Aviation, Ashok Leyland, Ceat and Cinemax were among the top gainers in this space. The small caps closed marginally up. Mundra port was one of the bumper listing today as it traded up 100% from its issue price. Currently Europe trading mixed.
Sensex ended down by 120 points at 19127.73. Weighing on the Sensex are losses in Bharti Tele (916.5,-3 percent), ICICI Bk (1132.4,-2 percent), Rel Energy (1755.45,-2 percent), Maruti (937.55,-2 percent) and NTPC (234.95,-2 percent). Losses are restricted by gains in BHEL (2672.95,+3 percent), Bajaj Auto (2653.05,+3 percent), SBI (2273.25,+1 percent), TCS (996.8,+1 percent) and Wipro (457.75,+1 percent).
Ceat Tyres rallied after the company reported of restructuring plans. As per the restructuring policy share holder would be issued 3 new shares of Ceat Tyres along with 1 share on the new company. The new company formed by Ceat would have the investments held by the group and which would also be listed. Post the implementation of the restructuring plan Ceat Tyres would continue to contribute to the top line. The higher input costs are a threat to the margins of the company. It has now taken the outsourcing strategy in order to maintain the bottom lines. The products are out sourced from China and manufacturing units of Pirelli. However, the strategy we believe would deliver only to a certain extent as the Chinese tyres lack quality to be successful on Indian roads. As result of this stock closed up by 16%. Compared with other players Ceat fails to be a fundamentally strong story; one can take a trading opportunity. Do read our note on this for more details.
Leading foreign investors like Goldman Sachs and Blackstone are in final stages of negotiations to buy 26% stake in India Infoline Distribution Co (IILD), the distribution subsidiary of the brokerage firm India Infoline, are willing to pay Rs 400 cr. The new subsidiary IILD, will take care of the entire loan portfolios of India Infoline. The company has a retail network of over 200 branches. It distributes financial products such as mutual funds, IPOs and fixed deposits, besides distributing mortgages and selling loan products. The financial services institution also boasts of a burgeoning insurance distribution business. In December 2006, India Infoline sold its stake in the subsidiary Khambhat Investment & Trading Co, a non-banking finance company, to Merrill Lynch. It has hired experienced hands from foreign banks including Citi. Recently, the company had also roped in four senior executives of CLSA. The company?s plans are to strengthen its position in the institutional trading segment, and also build a strong team in investment banking and private equity. The company informed that the Singapore-based Orient Global will acquire 22.5% cent stake in its consumer finance subsidiary for about Rs 300 cr. As a result strong futuristic plans stock closed up by 11%.
Technically Speaking: It was a volatile session for the whole day. Sensex touched intraday high of 19,212 and low of 19,019. Overall breadth was in favor of Declines, where the Advances stood at 1280, while Declines at 1463. The turnover was pretty low at Rs 5795 cr. Sensex has failed to cross above the 20DMA moving average in the current pull back rally. We are cautious till the expiry on Thursday. Sensex resistance lies at 19360 and 19520. Support lies at 18880 and 18500.
The market ended lower, after decent rise in the past two sessions, due to losses in the US markets on renewed worries over the fallout from the US subprime mortgage crisis. European markets, which opened after Indian markets, slipped into the red in volatile trade.
Earlier, select Asian markets recovered from an initial fall after Abu Dhabi Investment Authority reached a deal to buy an equity stake in Citigroup. US stocks tumbled on Monday, 26 November 2007, as investors worried rising US mortgage defaults and credit market losses will drag on the US economy, fueling fears that US consumers will slash spending during the vital holiday season.
Banking and metal shares declined. Realty, auto and IT shares were in demand. Two index heavyweights Reliance Industries (RIL) and ICICI Bank edged lower. Mid-cap and small-cap stocks bucked the weak trend. But the market breadth was negative. 18 out of 30 stocks in the Sensex pack were in red.
The 30-share BSE Sensex lost 119.81 points or 0.62% to 19127.73. The Sensex hit a low of 19,019.33 in morning trade. At day’s low, the Sensex shed 228.21 points.
The broader based S&P CNX Nifty lost 33.55 points or 0.59% to 5698.15.
The BSE Mid-Cap index was up 0.11% to 8,393.49, off session’s low of 8,310.55. The BSE Small-Cap index was up 0.28% to 10,372.07, off session’s low of 10,293.30. Both these indices outperformed the Sensex.
The market breadth was negative. On BSE, 1478 stocks declined, 1299 stocks advanced and 66 stocks remained unchanged. 18 out of 30 stocks from the Sensex pack were in the red.
BSE clocked a turnover of Rs 5795 crore, lower than Monday (26 November 2007)'s Rs 6,035.19 crore.
Nifty November 2007 futures were at 5727, a premium of 28.85 points as compared to spot closing of 5698.15.
NSE’s futures & options (F&O) segment turnover was Rs 75192.11 crore, which was lower than Rs 75903.04 crore on Monday, 26 November 2007.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 1.42% to Rs 2842.
India's largest private sector bank by assets ICICI Bank lost 2.18% to Rs 1132.40.
The BSE Bankex fell 0.90% to 10,495.46. It underperformed the Sensex. Federal Bank fell 2.93% to Rs 324.25, Kotak Mahindra bank fell 1.70% to Rs 1122.35, Centurion bank of Punjab lost 1.48% to Rs 43.35 and HDFC Bank shed 0.68% to Rs 1632.45.
Telecom stocks declined. Bharti Airtel dropped 3.32% to Rs 916.50 and Reliance Communications fell 0.49% to Rs 684.55.
The BSE Auto index moved up 0.99% to 5,348.21. It outperformed the Sensex. Ashok Leyland surged 16.65% to Rs 47.65, TVS Motors spurted 12.24% to Rs 70.15, Hindustan Motors soared 10.53% to Rs 41.45 and MRF jumped 9% to 7377.10.
The BSE Realty index rose 1.24% to Rs 10,206.60. It outperformed the Sensex. DLF moved up 0.68% to Rs 897.95, Unitech rose 1.14% to Rs 364.60, Indiabulls Real Estate gained 2.94% to Rs 641.
The BSE IT index moved up 0.23% to 4,107.48. It outperformed the Sensex. TCS rose 1.20% to Rs 996.80, Wipro gained 1.12% to Rs 457.75, Satyam Computers rose 0.23% to Rs 427.35.
India's second largest software exporter by sales Infosys Technologies fell 0.03% to Rs 1575.80.
The BSE Metal index fell 1.03% to 17,344.05. It underperformed the Sensex. Jindal Saw dropped 3.28% to Rs 788.25, Hindalco Industries fell 1.52% to Rs 191.35 and Steel Authority of India (Sail) fell 0.57% to Rs 263.65. Sterlite Industries gained 1.27% to Rs 908.15 and Hindustan Zinc jumped 6.60% to Rs 737.15.
India’s largest steel firm by sales Tata Steel fell 0.16% to Rs 847.60. The company may reportedly pick up a 35% stake in its newly formed Mozambique joint venture for a consideration of Australian $100 million. Report suggests that the stake will help Tata Steel get exclusive rights to the coal being mined in the new coal mine and will use it as feedstock for its plants both in India and abroad.
The BSE Power index fell 0.67% to 4,347.50. It underperformed the Sensex. Tata Power fell 3.65% to Rs 1135.80, Torrent Power declined 3.12% to Rs 174.10, Power Grid Corporation of India fell 2.30% to Rs 148.50, Reliance Energy fell 1.91% to Rs 1755.45 and NTPC fell 1.53% to Rs 234.95.
Mundra Port and Special Economic Zone settled at Rs 961.70 on BSE, a premium of 118.56% over the IPO price of Rs 440. The stock debuted at Rs 770 a premium of 75% over the IPO price of Rs 440. The stock hit a high of Rs 1,150 and a low of Rs 770.
Steel strips maker Bhushan Steel slumped 13.17% to Rs 1368.20. Market regulator Securities & Exchange Board of India (Sebi) will reportedly look into the sudden share price rise in Bhushan Steel stocks which rose 46% from Rs 1,086 to Rs 1,576 on Monday. Reports suggest that Sebi would study the price movement before taking any action on it.
Realty firm Parsvnath Developers was down 1.11% to Rs 342.85. The company reportedly plans a consortium with a Turkish airport operator TAV Airports Holding and domestic infrastructure finance firm IL&FS Transport Network (ITNL) to bid for the Greater Noida airport. Parsvnath plans to hold majority stake in the consortium. The formation of the consortium will ultimately depend on whether the Central Government permits the development of the Greater Noida airport, the report added.
Brokerage firm India Infoline jumped 11.42% to Rs 1284.70. The company has inked a $76.7 million equity deal by selling stake in its consumer finance subsidiary India Infoline Investment Services (IIIS) to Singapore-based Orient Global. The latter has picked up a 22.5% stake in IIIS.
Consumer products maker Godrej Industries was up 5% to Rs 243.60. The company said on Monday, 26 November 2007, its board has approved entering into a strategic partnership, joint venture or sell its medical diagnostic business. An extra-ordinary general meeting will be held on 28 December 2007 to approve this, it said in a statement.
State-run Allahabad Bank was up 0.31% to Rs 111.95 on reports that the bank has plans to buy about 74% of a small bank in Africa for up to $15-20 million.
Detergent maker Nirma jumped 9.02% to Rs 224.10 after it said it would buy US-based soda ash maker, Searless Valley Minerals Operations Inc and Searless Valley Minerals Inc.
Debutant Mundra Port and Special Economic Zone clocked highest turnover of Rs 1458.51 crore on BSE. Essar Oil (Rs 361.87 crore), Reliance Petroleum (Rs 242.75), Jindal Steel & Power (Rs 185.95) and Deccan Aviation (Rs 143.70 crore), were the other turnover toppers on BSE in that order.
Ashok Leyland registered highest volumes of 2.12 crore shares on BSE. Essar Oil (1.69 crore shares), Mundra Port and Special Economic Zone (1.48 crore shares), Ispat Industries (1.35 crore shares) and IFCI (1.35 crore shares), were the other volume toppers on BSE in that order.
In Europe, key indices in UK, France and Germany were down by between 0.20% to 0.54%.
South Korea’s Seoul Composite index was up 0.24% and Japan’s Nikkei 225 index was up 0.58%. Key benchmark indices in Hong Kong, China, Singapore and Taiwan were down by between 1.3% to 1.97%.
The Dow Jones industrial average slid 237.44 points, or 1.83%, to close at 12,743.44 on Monday, 26 November 2007. The Standard & Poor's 500 Index sank 33.48 points, or 2.32%, to 1,407.22. The Nasdaq Composite Index plunged 55.61 points, or 2.14%, to close at 2,540.99.
After surging over 395 points in yesterday's trades, the market failed to rally further as weak Asian indices and the overnight fall in the US bourses weighed on the sentiment. Barring the realty and auto stocks, most of the sectors came under selling pressure. The Sensex opened with a negative gap of 119 points at 19,129 and did not recover through the day from the early slide. While the market moved in a range for the better part of the trading session, the index saw some profit bookings in the afternoon and touched the day's low of 19,019. However, the Sensex pared some losses on selective buying and ended the session with a loss of 120 points at 19,128, while the Nifty declined by 34 points to close at 5,698.
The market breadth was weak. Of the 2,843 stocks traded on the Bombay Stock Exchange (BSE), 1,478 stocks declined, 1,299 stocks advanced and 66 stocks ended unchanged. Among the sectoral indices, the BSE Metal index dropped by 1.03%, while the BSE Bankex index, the BSE Power index and the BSE Teck index were down over 0.50% each. However, the BSE Realty index was up by 1.24%, the BSE Auto index added 0.99%, while the BSE IT and the BSE CG index gained marginally.
Heavyweights led the fall in the Sensex. Bharti Airtel slipped by 3.32% at Rs917, ICICI Bank slumped by 2.18% at Rs1,132, Reliance Energy shed 1.91% at Rs1,755, Maruti Suzuki lost 1.55% at Rs938, NTPC was down 1.53% at Rs235 and Hindalco tumbled by 1.52% at Rs191. ACC, Reliance Industries, ONGC and Ranbaxy declined by around 1% each. Among the gainers BHEL rose 2.60% at Rs2,673, Bajaj Auto jumped 2.54% at Rs2,653, SBI surged 1.38% at Rs2,273, TCS gained 1.20% at Rs997, Wipro moved up by 1.12% at Rs458, while Tata Motors, DLF, Ambuja Cement, Grasim and Satyam Computer ended with modest gains.
Over 2.12 crore Ashok Leyland shares changed hands on the BSE followed by Essar Oil (1.69 crore shares), Mundra Port (1.47 crore shares), Ispat Industries (1.35 crore shares) and IFCI (1.35 crore shares).
Mundra Port was the most actively traded counter with a turnover of Rs1,457 crore on the BSE followed by Essar Oil (Rs361 crore), Reliance Petroleum (Rs242 crore), Jindal Steel (Rs185 crore) and Deccan Aviation (Rs143 crore).
The market closed on a negative territory due to selling of scrips across the sectoral indices scrips. The market keeps on trading on the negative territory since from the opening bell, as the global cues are not in favor. After a good rally for the last two trading session, the market slipped today. While BSE Realty and Auto indices scrips seems to attract the investor''s confidence as the closed higher. The BSE Sensex fell by 119.81 points to close at 19,127.73 and NSE Nifty slipped by 33.55 points to close at 5,698.15. Overall, the market breadth was weak as 1,478 stocks are closed in red while 1299 are closed in green. Both BSE Mid cap and Small cap closed up by 9.24 points and 28.82 points to close at 8,393.49 and 10,372.07 respectively.
BSE Realty index surged 125.33 points to close at 10,206.60. Pushing it up are Phoenix Mill (4.69%), HDIL (3.50%), India Bull Real (2.94%), Omaxe Ltd.(1.08%) and DLF (0.68%).
BSE Auto index closed higher by 52.58 points at 5,348.21. Pushing it up are Ashok Leyland (16.65%), TVS Motor (12.24%), MRF (8.98%), Apolla Tyre (4.24%).
BSE Metal index dropped by 180.49 points to closed at 17,344.05. Pushed down by Jindal steel (5.94%), Jindal Saw (3.28%), Ispat Industries (2.32%), Hindalco Industries (1.52%) and SAIL (0.57%).
BSE Capital Goods index closed marginally higher by 1.08 points at 19,752.73. Pushing it up are BHEL(2.60%), Thermax (1.07%) and ABB (0.36%). while Kalpataru Power (2.16%), Siemens (1.26%) and L&T (0.11%) are closed lower.
BSE oil & gas index dropped by 18.28 points to closed at 12,197. Pulling it down are RPL (2.96%), RNRL (2.54%), Reliance industries (1.42%) and ONGC by (0.99%).
BSE Power index slipped by 29.23 points to close at 4,347.50 as Tata Power 3.65%, Crompton Greaves 3.22%, Torrent Power 3.12%, Power Grid 2.30% and Reliance energy 1.91% closed lower.
BSE IT index closed higher by 9.25 points at 4,107.48. Scrips that grew I-FLEX (4.75%), Wipro (1.12%), TCS (1.20%), Rolta (1.09%), Tech Mahindra (0.69%).
We recommend a buy in Cairn India at current levels. From the charts of Cairn India, we note that it has been on a long-term uptrend since its IPO in early January 2007. However, the stock touched its life high at Rs 230 in early November and made a short-term corrective decline to Rs 195 levels. Recently, the stock found support at Rs 195 levels, which coincides with 50-day moving average line and it resumed its uptrend. We see that there is an increase in volume in the l ast trading session. The daily momentum indicators are rising towards the bullish region. The immediate support for that stock is at Rs 195 and the next support is at Rs 184 levels. Short-term investors can utilise this correction for buying the stock with stop loss at Rs 197. We expect the stock to move up and reach our target of Rs 240 in the short-term.
Kolte-Patil Developers Limited has issued a public notice to the Investors on 25th November 2007 in response to a letter received from SEBI on 19th November 2007. The notice outlines the points raised by one Mr. C.V.L. Sastry and response of Kolte-Patil Developers. As required by SEBI. Kolte Patil Developers has also given an option to the investors to withdraw from the issue. Should they feel so.
As seen from the said notice, the main issue is the claims made by said C. V. L. Sastry against Kolte Patil Developers in respect of its Project Whispering Meadows II, being developed over 3 acres of land at Bangalore. Out of 35,000 sq. ft. of super built up area claimed, Kolte Patil Developers has handed over 20,560 sq. ft. of super built up area to NTI Society, through which Mr. Sastry is claiming his rights against Kolte Patil Developers, and remaining area would be handed over in its Whispering Meadows Phase II. As directed by Supreme Court, Kolte Patil Developers has also deposited Rs. 3.5 crores with the IDBI Bank.
Kolte Patil Developers is developing about 39.38 million sq.ft. of saleable area in its various projects in Pune and Bangalore. Out of the said area, the area in dispute is only 14,440 sq. ft. of super built up area.
Reliance Power - Trading has been stopped
Jyothi Lab. 620 to 690 340 to 350
Burnpur Cement Ltd. 12 4 to 5
eClerx Services 270 to 315 70 to 80
BGR Energy 425 to 480 140 to 150
Edelweiss 725 to 825 725 to 750
Renaissance Jewellery 125 to 150 35 to 40
Kolte Patil 125 to 145 90 to 95
Kaushalya Infra 50 to 60 12 to 15
Mundra Port & Sez 440 625 to 650
SVPCL 42 - 3 to -5
The market is likely to edge lower as US stocks tumbled on Monday, 26 November 2007, as investors worried rising US mortgage defaults and credit market losses will drag on the US economy, fueling fears that US consumers will slash spending during the vital holiday season. Volatility may remain high ahead of expiry of November 2007 derivatives contracts on Thursday, 29 November 2007.
FIIs made heavy purchases in index-based futures on Monday, 26 November 2007, the day when Sensex had surged 395 points or 2.09% to 19,247.54 on the back rally across global markets. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 2,098.07 crore and sold index options worth Rs 3.35 crore on Monday. They were net sellers of stock futures to the tune of Rs 50.70 crore and sold stock options worth Rs 0.32 crore. FIIs were net buyers to the tune of Rs 2,043.70 crore in the futures & options segment on Monday.
In the cash market, FIIs bought shares worth a net Rs 50.40 crore on Monday, 26 November 2007, as per provisional data by NSE. Domestic institutions bought shares worth a net Rs 274.06 crore on Monday.
In Asia, key benchmark indices in Hong Kong, China, South Korea, Singapore and Taiwan were down by between 0.27% to 1.57%. Nevertheless, most Asian markets had pared early losses of the day. In fact, Japanese market had turned into green from red. The Nikkei was up 0.84%.
The Dow Jones industrial average slid 237.44 points, or 1.83%, to close at 12,743.44 on Monday, 26 November 2007. The Standard & Poor's 500 Index sank 33.48 points, or 2.32%, to 1,407.22. The Nasdaq Composite Index plunged 55.61 points, or 2.14%, to close at 2,540.99.
Bargain hunting had triggered a surge on the domestic bourses in the past two trading sessions. Earlier, FII sales caused by redemption pressure in their home countries and fears of a US recession arising from housing slump and credit crisis had spooked stocks across Asia over the past few days.
FII outflow in November 2007, till 23 November 2007, reached Rs 4628.80 crore. FIIs had made heavy purchases in September 2007 and October 2007. FIIs had bought shares worth a net Rs 16132.60 crore in September 2007 and Rs 20590.90 crore in October 2007.
Indian market is likely to have negative opening due to weak global cues. On Monday, the Indian market opened with handsome gains and rallied to close the session on an impressive note due to heavy buying in the index heavyweights. The BSE Sensex surged 394.67 points to close at 19,247.54 and NSE Nifty closed higher by 123.1 points at 5,731.70. We expect that the market will remain cautious, as the profit booking will take a lead during the trading session.
On Monday, the US market closed in negative territory. The DJIA closed lower by 237.44 points at 12,743.44. The Nasdaq and S&P 500 index fell by 55.61 points and 33.48 points at 2,540.99 and 1,407.22 respectively.
Indian ADRs ended in red. In technology sector, Satyam declined by (4.06%) along with Wipro by (2.50%) and Infosys by (1.13%). In banking sector, ICICI bank and HDFC bank fell (5.91%) and (5.54%) respectively. MTNL and VSNL dropped by (3.49%) and (1.11%) respectively.
The major stock markets in Asia are trading weak. Hang Seng is trading lower by 891.33 points at 26,735.29. Japan''s Nikkei is trading down by 320.34 points at 14,814.87. Singapore Strait times is trading at 3,340.53 fell by 78.05 points. Taiwan weighted declined by 271.02 points to trade at 8,257.31 and Seoul Composite dropped by 50.34 points to trade at 1,804.99.
The FIIs stood as the net seller yesterday as the gross equity purchased was Rs.2,756.30 (in crores) and the gross debt purchased was Rs174 (in crores). The gross equity sold was Rs2,929.70 (in crores), and the gross debt sold was Rs367.40 (in crores). The net investment of equity was -Rs173.40 (in crores) and the net debt investment was -Rs193.40 (in crores).
Today, Nifty has support at 5,581 and resistance at 5,739 and BSE Sensex has support at 18,746 and resistance at 19,260.
Credit market turmoil offsets the decent news from holiday season sales
US Market which started on a positive note today, Monday, 26 November, 2007 ended substantially lower after credit market turmoil once again rocked the market. Concerns about the credit markets and weakness in the financial sector continued to weigh on investor sentiment. This offset the positive decent news on the holiday shopping front. All ten economic sectors posted losses today, led by a financial shares.
The Dow Jones industrial Average ended the day with a loss of 237.44 points at 12,743.44. The Nasdaq Composite Index, finished lower by 55.61 points at 2,540.99. S&P 500 finished lower by 33.48 points at 1,407.22.
Twenty-eight out of thirty Dow stocks ended in red. AIG, Citigroup and JP Morgan headed the team of Dow laggards. Boeing and Johnson & Johnson were the sole Dow winners today.
In the financial sector, Citigroup came under pressure after reports that the company may lay off as many as 45,000 workers because of the subprime-mortgage crisis. The stock slipped by more than 3% today. On the other hand, UBS downgraded both Fannie Mae and Freddie Mac – USA’s largest suppliers of mortgage capital.
Preliminary reports from National Retail Federation said sales at retail stores jumped 8.3% to $10.3 billion on "Black Friday" - the day after Thanksgiving, which unofficially kicks off the holiday shopping season. However, shoppers seemed to spend about 3.5% less per person.
Cisco Systems weigh on technology stocks
HSBC Holdings too came out with its share of bad news today. The company said that said it would move two of its structured investment vehicles onto its balance sheet and provide up to $35 billion in funding.
On the tech front, Cisco Systems was the main laggard. The company’s stock came under pressure after Morgan Stanley said that Cisco's emerging market business is slowing and is an area of concern.
Barring Dr Reddys, Rediff and Patni Computers, which registered minor gains, all other Indian ADRs slipped into red. HDFC Bank and ICICI Bank led the losers dropping 5.5% and 5.9% respectively.
Crude oil eases a bit on OPEC speculation
A possible production increase from the Organization of Petroleum Exporting Countries (OPEC) and the sliding dollar sent oil prices a little lower today. Price rose earlier in the day but then gave up all its gains. Crude-oil futures for light sweet crude for January delivery closed at $97.7/barrel (lower by $0.49/barrel or 0.50%) on the New York Mercantile Exchange. Prices are up 65% from a year ago.
Traders speculated today that the 12 members of the OPEC will probably increase output 1.1% to 31.6 million barrels a day this month. Earlier in September, 2007, OPEC had agreed to raise production targets for the 10 members with quotas by 1.9% starting 1 November.
Trading volumes showed 1.5 billion shares exchanging hands on the New York Stock Exchange and 2.1 billion on the Nasdaq Stock market. Declining stocks topped gainers by 25 to 8 on the NYSE and by 3 to 1 on the Nasdaq.
Tomorrow, the Conference Board will release the November Consumer Confidence reading at 10:00 ET and market expects the number to come in at 91.5. Other than that, a few earning reports are expected.
A recovery in most of the Asian indices in ongoing trades and prevailing strong bullish sentiment may help the local market advance further. However, bouts of strong intra-day volatile moves may weigh on the sentiment. Among the key indices, the Nifty has a resistance at 5900 and has a key support at 5394 in the near-term. The Sensex has a likely support at 18800 and may face resistance at 19500.
US indices tumbled on Monday, as investors feared that credit crisis could lead to recession. While the Dow Jones fell over 237 points, the Nasdaq moved down by 56 points.
Indian floats trading on the US bourses slipped on Monday, the losers were, ICICI Bank registering the highest fall of 5.91% while HDFC Bank lost 5.54%. VSNL, Tata Motors, Infosys, Wipro, Patni Computer and ICICI Bank slipped over 1-3% each.
Crude oil prices moved down, while the Nymex light crude oil for January delivery slipped by 48 cents to close at $97.70 a barrel. In the commodity segment, the Comex gold for December series moved up by $1.80 to settle at $826.50 an ounce.
Nifty (5732) Sup 5675 Res 5795
Buy Parsvnath (347) SL 342 Target 356, 359
Buy Voltas (236) SL 232
Target 244, 246
Buy DLF (892) SL 885
Target 906, 910
Sell Tata Chem (307) SL 312 Target 299, 296
Sell Wockhardt (398) SL 403 Target 390, 388
You can't drive straight on a twisting lane.
After swinging to positive beats for two days, the bulls have to adjust to the changing global tempo and may well end up adjusting to the twist and shout. While speed breakers just slow down the pace, the sharp twists catch many market drivers unawares.
The key indices have been pretty volatile in November. This yo-yo pattern has made life difficult for all category of investors, particularly the day traders. Predicting the movement of the market has become tougher The bulls and the bears will take their turns on the dance floor, each hoping it doesn’t get Dangerous.
What's worse for the bulls is that FIIs appear to have taken a backseat. Though local funds and other institutions like insurance companies may be acting as a counter force, their clout is relatively less effective for now. On the bright side our market has managed to hold its own despite negative news coming from global markets, especially the US, and the reversal of FII inflows. We haven't capitulated under the weight of bad news on the US economy and there is no panic like situation.
Today, we expect a lower opening, in line with the trend across global markets. Intra-day gyrations may increase ahead of Thursday's F&O expiry. The broader trend is still not clear. Stick to your strong counters and lighten positions in trading counters, unless you know something, which many others don’t.
Reports say SEBI has denied permission to Mundra Port to list in the F&O segment. Expect the stock to at least double on listing today. The offer price was fixed at Rs440 per share.
US stocks fell sharply after a volatile session as worries over the continuing pain in the financial sector offset upbeat signs about holiday shopping. Questions about government help for ailing mortgage-lender Countrywide Financial were cited for accelerating losses in late trading and leading bonds to rally.
Citigroup, Bank of America and JPMorgan Chase retreated after Goldman Sachs said HSBC faces $12bn in additional writedowns. Fannie Mae and Freddie Mac, the largest US mortgage-finance companies, tumbled after UBS said higher credit costs will cause earnings growth to slow. Target and Macy's led retailers lower on concern that consumers will spend less on holiday gifts.
The Standard & Poor's 500 Index dropped 33.48, or 2.3%, to 1,407.22, leaving the benchmark down 0.8% in 2007. The Dow Jones Industrial Average tumbled 237.44, or 1.8%, to 12,743.44, paring its gain for the year to 2.3%. The Nasdaq Composite Index lost 55.61, or 2.1%, to 2,540.99 and is up 5.2% in 2007.
Market breadth was negative. Almost six stocks fell for every one that rose on the New York Stock Exchange.
As of Monday's close, the Dow is down 10% from its October high and the S&P 500 is down 10.1%. The Nasdaq is off 11.1%.
The Fed's last scheduled policy meeting of the year is on Dec. 11 and many market observers feel the American central bankers will choose to cut the fed funds rate again, to help the world's biggest economy combat an impending recession. The fed funds rate currently stands at 4.5%. Fed watchers are split about whether the bank will cut the rate by a quarter or half percentage point, or possibly not at all.
Treasury prices jumped, lowering the yield on the benchmark 10-year note to 3.83% - the lowest level since June 2005 - from 4% late on Friday. In currency trading, the dollar dipped versus the euro, but held above the all-time low hit on Friday. The greenback fell versus the yen.
US light crude oil for January delivery fell 48 cents to settle at $97.70 on the New York Mercantile Exchange, erasing earlier gains. COMEX gold for December delivery settled at $826.50 an ounce, down from Friday's close.
European shares closed lower as well after a see-saw session. The pan-European Dow Jones Stoxx 600 index closed down 0.6% at 355.78. The UK's FTSE 100 ended 1.3% lower at 6,180.50, while the German DAX 30 fell 0.6% to 7,567.36 and the French CAC-40 lost 1.1% at 5,458.39.
Latin American stocks declined sharply. The main Sao Paulo stock index in Brazil ended 3.1% lower at 59,069. The benchmark last closed below the 60,000 level on Sept. 26. Mexico's IPC index gave up early gains to close with a 2.9% loss, ending at 27,883.01. Argentina's Merval index fell 1% to 2,190.82, and Chile's IPSA slid 1.7% to 3,060.63.
In other emerging markets, the RTS index in Russia was up 1.2% at 2177 and the ISE National-30 in Turkey gained 0.95% at 66,842.
Asian stock benchmarks have staged a remarkable comeback after a weak opening. The Nikkei is now up 153 points at 15,288 while the Hang Seng is down only 94 points at 27,532. The Kospi in Seoul was up 4 points at 1859.
The MSCI Asia Pacific Index declined 1.3% to 156.49 as of 9:36 a.m. in Tokyo, halting a two-day, 3% advance. Financial shares were the biggest drag among the benchmark's 10 industry groups. Toyota led a drop among regional exporters after the yen strengthened to the highest since June 2005 against the dollar.
Positive bias to continue
After opening with a positive gap, key indices managed to hold on to their gains throughout the session as bulls were all over the bourses. Positive cues form the regional markets and all round buying kept the momentum going. Metal stocks were in demand with others like Realty, Power and IT stocks following suit.
Among the 30-scrips of Sensex 28 stocks ended with positive gains while only 2 stocks ended in red. RIL, Bharti Airtel, HDFC Bank and L&T were among the major gainers and Banking heavyweight SBI and Tata Motor were among the major laggards.
Finally, 30-share Sensex surged 394 points to close at 19,247 and Nifty closed 123 points lower at 5,731.
Sterlite Industries gained 1.7% to Rs896. According to reports Supreme Court denied approval to the Rs40bn alumina refinery project of Sterlite Industries and Vedanta Alumina in Orissa. The scrip touched an intra-day high of Rs919 and a low of Rs881 and recorded volumes of over 21,00,000 shares on NSE.
BEML advanced 9% to Rs1775 after reports stated that the company would buy government owned mining equipment plant for Rs1bn. The scrip touched an intra-day high of Rs1849 and a low of Rs1650 and recorded volumes of over 85,000 shares on NSE.
Zydus Cadilla advanced 1.2% to Rs292 after reports stated that the company has planned to launch 100 generic drugs that are expected to go off patent in the next five years in US and
Balaji Telefilms rallied by over 12% to Rs376 after reports stated that they may offload 15% stake in its wholly owned motion pictures arm. The scrip touched an intra-day high of Rs388 and a low of Rs336 and recorded volumes of over 85,000 shares on NSE.
Vivimed Labs advanced 2.6% to Rs119 after the Board of Directors of the company declared that they would consider plan to sell shares/warrants. The scrip touched an intra-day high of Rs124 and a low of Rs118 and recorded volumes of over 40,000 shares on NSE.
Hexaware Technologies declined by over 17% to Rs73 after the company announced that Board of Directors appointed a special committee to conduct an internal investigation and make recommendations for changes to its foreign exchange management practices. This action is due to certain actively concealed and potentially fraudulent foreign exchange option transactions conducted by one official. The scrip touched an intra-day high of Rs90 and a low of Rs72 and recorded volumes of over 33,00,000 shares on NSE.
Power Grid gained 1% to Rs152 after the company announced that it signed Joint venture pact with REL. Power Grid to hold 26% while, REL to hold 74% in the venture. The scrip touched an intra-day high of Rs156 and a low of Rs151 and recorded volumes of over 1,00,00,000 shares on NSE.
REL advanced 4% to Rs1790. The company announced that they have sold 5,85,423 shares to overseas investors at Rs1,006.92 per share. The scrip touched an intra-day high of Rs1814 and a low of Rs1751 and recorded volumes of over 32,00,000 shares on NSE.Sadbhav Engineering was up 2.5% to Rs1080 after the company announced that they won orders worth Rs900.1mn from Chhattisgarh government. The scrip touched an intra-day high of Rs1117 and a low of Rs1060 and recorded volumes of over 8,000 shares on NSE.
What the FIIs are doing
FIIs were net buyers of just Rs504mn (provisional) in the cash segment on Monday while the local institutions pumped in Rs2.74bn.
In the F&O segment, foreign funds were net buyers of Rs20.44bn yesterday.
On Friday, FIIs were net sellers to the tune of Rs1.73bn.
Stocks in News:
BSNL has applied for a nation-wide full-fledged CDMA license.
Chevron is considering options to raise its 5% stake in Reliance Petroleum.
The JSW group is planning to invest Rs400bn over the next three years in various steel and power projects.
NTPC Board has cleared investment proposals of Rs72.5bn.
Reliance Power is in talks with banks and financial institutions to raise Rs140bn debt for its Sasan project. It plans to invest US$1bn in overseas coal blocks.
Multiplex chains Adlabs, Inox and Shringar Cinemas are believed to be in talks with DLF’s multiplex venture DT Cinemas for equity partnership.
Ashok Leyland will launch hybrid CVs next year.
Tata Chemicals is planning a major foray into the wholesale retail business of fruits and vegetables through its JV with Ireland’s Total Produce.
Tata Steel may pick up a 35% stake in its newly formed Mozambique JV for Australian $100mn, subject to regulatory approvals.
JSW Energy plans to raise Rs30-50bn via an IPO by April 2008. The company plans to invest Rs120bn in the energy sector in the next three years.
IFCI Board will have to consider Rs9.2bn debt given by the Union Government while finalizing how much of debt it owes to banks will be converted to equity.
Parsvnath Developers is planning a consortium with Turkey based TAV Airports Holding and IL&FS to bid for Greater Noida Airport project.
Parsvnath Developers is in talks with international retail chains for joint venture.
Elder Pharmaceuticals plans to enter into CIS and European markets by launching eight drugs in women healthcare, wound care and nutraceutical segments.
Nitco Tiles is investing Rs1.5bn to expand its production capacity.
Ceat is to demerge its tyre and investment business into separate companies. Ceat will finalize plans to set up a new CV radial tyre plant by December-January.
Jharkhand Government has agreed to give iron ore mines of Ankua region for expansion of Tata Steel’s existing plant in Jamshedpur.
Union Bank expects its net interest margin to rise to 3% in the current fiscal from 2.56% in Q2 FY08.
Gas sales contracts signed by JV partners of Panna-Mukta and Tapti fields have come under petroleum ministry’s scanner for violating PSC norms.
Orchid Group of hotels is planning to invest over Rs10bn in next 18 months to set up seven 5-star hotels.
Siemens is in talks with Reliance Industries and L&T for a possible tie-up for the proposed Navi Mumbai International Airport.
Voltamp Transformers is considering setting up second manufacturing facility in Gujarat.
Punjab National Bank targets to recover Rs15-20bn NPAs by FY08.
Syndicate Bank plans to double its business in the Northern region to Rs45bn by FY08.
Dena Bank plans to cut bad loans and to bring down net non-performing assets to net advances ratio to ~1% by FY08 from ~2% in FY07.
Indiabulls plans to set up 30 hypermarkets across smaller cities in the next 15-18 months with an outlay of Rs15bn.
Malaysian car maker Proton is planning to enter Indian markets through small cars and sedans.
Supreme Court has sought environmental safeguards for Vedanta’s Alumina Refinery Project in Orissa.
Suzuki is planning to launch premium bikes between 125cc-175cc in India by April.
The Government is planning to introduce advance pricing arrangement as a part of changes in the country’s transfer pricing regulations.
Turkmenistan has offered preferential treatment to Indian companies for allocation of oil blocks.
The Union Cabinet has approved for accession to the Cape Town Covention/Protocol by India, which will help aviation companies to get cheaper credit and broaden their aircraft financing options.
Citigroup has bought Arshiya International; Prabhudas Liladhar has picked up Ashco Industries; HSBC Global has sold JK Cement; Lotus Global has sold Kashyap Tech; Merrill Lynch has purchased Marg Construction; Goldman Sachs has sold Sujana Tower; CLSA has picked up Vakrangee Software while Merrill Lynch has sold the stock.
BGR Energy Systems which makes energy equipment has set Rs 425 to Rs 480 per share price band for its initial public offer (IPO). The 9.14 million share issue would constitute a fresh offer of 4.32 million shares and sale of 4.82 million shares by promoters.
The offer opens on 9 December 2007 and closes on 12 December 2007. BGR plans to use the money to set up plants in India, China and the Middle East.
Mundra Port and Special Economic Zone will list on exchanges on Tuesday, 27 November 2007. The company had fixed the IPO price at the top end of the Rs 400-440 price band.
At the IPO price of Rs 440, the PE multiple works out to 93.61, based on the year ended March 2007 anualised EPS of Rs 4.7.
The Mundra Port had IPO ended on 8 November 2007 with 115.84 times subscription. It received total bids for Rs 466.24 crore shares as against the issue size of 4.02 crore shares.
The qualified institutional buyers (QIBs) category was subscribed 159.59 times. The non institutional investors category, made up of corporates and high net investors, was subscribed 156.45 times. The retail investors category was subscribed 16.19 times.
Net issue to public comprises 4,01,00,000 shares constituting 10.05 per cent of fully diluted post issue capital.
Mundra Port plans to use proceeds of the issue to part finance construction and development of basic infrastructure and the allied facilities in the proposed SEZ at Mundra; construction and development of a terminal for coal and other cargo; contribution towards investment in Adani Petronet (Dahej) Port; contribution towards investment in Adani Logistics and contribution towards investment in Inland Conware.
Nifty — The index opened on a strong note and traded positive throughout the day’s trading session. It ended the day with gains of 123 points.
10 & 20 day moving average — The index has closed around the 10 dma = 5756 and 20 dma = 5776. Intra-day strength can be expected on index sustaining above the 5776 level, and the index can test 5855 levels. Intra-day support is around 5690; lower support is around 5600 levels.
Conclusion — Expect higher levels around 5855 levels.
Even as Reliance Power's initial public offer (IPO) awaits clearance from market regulator, SEBI, a dispute has broken out among traders in the grey market, where deals had been entered into even before the issue’s price band has been fixed.
Market watchers say the situation has arisen following the company’s decision to float the shares at a face value of Rs 10 instead of Rs 2 as announced earlier.
A section of grey market operators, which had short sold Reliance Power shares in the grey market, and are staring at potentially huge losses, is using this development as a pretext to renege on their commitments. Technically, if there is a change in the face value of a share, the premium or discount will change to reflect the new face value.
Transactions in the grey market are done purely on the basis of trust and there are no documents because the activity — though widely prevalent — is outlawed in the first place.
Grey market players said some brokers in Mumbai and Ahmedabad, who initially threatened to backtrack from their commitments, have now agreed to stand by their trades. However a large number of brokers in Jaipur, who owe allegiance to a Mumbai-based operator, are said to have refused to honour their commitments.
The operator in question is said to have run up a loss of over Rs 50 crore. All these players are believed to have been selling Reliance Power shares short when they were trading at a premium of Rs 30-35 per share a couple of months back.
While the issue has been delayed, the premium in the grey market has been steadily on the rise. As a result these players have run up significant losses.
Interestingly, Reliance Power is the first instance of an IPO being traded in the grey market even before the price band has been fixed. Premium or discount in the grey market is linked to the price band. But in the case of Reliance Power, it was the purely the premium that was being traded.
“This (grey) market operates purely on faith and if that is broken, people will be wary of entering into deals,” said a broker who arranges transactions in the grey market. The deals are entered into verbally, and the shares change hands on the trading screen once they are listed.
Grey market is a thriving racket in many small towns of the country, where applicants “rent out” their permanent account numbers (PAN) and demat accounts for a fee. These applicants subscribe to IPOs, but have already handed over signed delivery instruction slips to the brokers with whom they have struck the deal. Once the shares are allotted, the broker transfers those shares into his own account.
Chevron Corporation, one of the world’s largest global energy companies, may pull out of Reliance Petroleum (RPL) by selling its 5 per cent equity to Reliance Industries.
This follows Reliance Industries’ divestment of 4 per cent stake last week in RPL for over Rs 4,023 crore. Reliance Industries’ stake in RPL now stands at 71 per cent.
A Chevron spokesperson told : “We continue to evaluate our options with our ownership in RPL. We will provide specific project updates when definitive decisions are made.”
A Reliance Industries spokesperson said the company would not like to react to market speculation about its future stake in RPL.
Chevron bought 5 per cent in RPL at Rs 60 a share one-and-a-half years ago before RPL’s Rs 2,700-crore public issue.
The US energy giant has the option to raise its stake to 29 per cent either three months after the RPL project is commissioned or three years from the date the agreement was signed, whichever is later. The agreement between the two was signed in April 2006.
RPL is setting up a refinery of 580,000 barrels per day at Jamnagar in Gujarat.
Industry sources said Chevron is not keen to increase its stake in RPL at the current market price, which will cost it nearly Rs 22,000 crore.
Shares in RPL fell 2.6 per cent today to Rs 204.05. The stock hit a life-time high of Rs 295 on November 1 on speculation that Chevron may increase its stake in the company, but the rise in prices was a deterrent for the US firm to raise its stake, analysts said.
A massive build-up of F&O positions was being created in the Reliance Petroleum (RPL) stock at premier exchanges a few weeks before Reliance Industries sold its stock.
Obviously, some bravehearts in the market were willing to bet their shirts that the stock would fall. They bet big and in hindsight, they were proved correct. Their earnings? In hundreds of crores, say market sources.
The share witnessed a sudden spurt in volumes in the derivatives segment from October 24.
The volume build-up continued into uncharted territories till it hit a high of 16.22 crore shares outstanding on November 6.
On October 23, the total outstanding position was 4.71 crore shares. It fell to 1.46 crore shares on October 25, before polevaulting to 8.46 crore shares on October 26. Reliance Industries began selling RPL shares from November 14.
Prices rise initially but then slip as traders speculate about a possible production increase
A possible production increase from the Organization of Petroleum Exporting Countries (OPEC) and the sliding dollar sent oil prices a little lower today, 26 November, 2007. Price rose earlier in the day but then gave up all its gains.
For the day ending Monday, 26 November, 2007, crude-oil futures for light sweet crude for January delivery closed at $97.7/barrel (lower by $0.49/barrel or 0.50%) on the New York Mercantile Exchange. Prices are up 65% from a year ago.
Brent crude oil for December settlement fell $0.66 (0.7%) to $95.1 on the London-based ICE Futures Europe exchange.
Traders speculated today that the 12 members of the OPEC will probably increase output 1.1% to 31.6 million barrels a day this month. Earlier in September, 2007, OPEC had agreed to raise production targets for the 10 members with quotas by 1.9% starting 1 November.
Last week, prices rose to $98.62/barrel during intra day trading on 7 November, 2007. Oil prices had rose 16% in October, 2007, the biggest one-month gain since September 2004.
Crude oil remains almost unchanged at MCX
Natural gas was little changed in New York on speculation supplies are adequate for heating needs in a winter forecast to be warmer than usual. Gas for December delivery rose 1.1 cents to $7.711 per million British thermal units.
Against this backdrop, December reformulated gasoline dropped 2.56 cents at $2.4414 a gallon, while December heating oil rose 0.24 cents at $2.7066 a gallon.
Earlier this month, OPEC reduced its fourth-quarter estimate of global oil demand growth to 1.97%, down from 2.1%, citing warmer winter weather in the Northern Hemisphere and the higher price of gasoline. The cartel also trimmed this year's world oil demand growth to 1.4% from 1.5%, but the cartel kept the first quarter of next year unchanged at 1.8%.
Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.
At the MCX, crude oil for December delivery closed at marginally higher at Rs 3869/barrel, higher by Rs 1 (0.02%) against previous day’s close. Natural gas closed at Rs 320.1/mmtbu as against previous close of Rs 317.4/mmtbu, higher by Rs 2.7/ mmtbu.
Turnover in F&O segment surges
Nifty November 2007 futures were at 5761.25, at a premium of 29.55 points as compared to spot closing of 5731.70.
NSE’s futures & options (F&O) segment turnover was Rs 75,903.04 crore, which was higher than Rs 66,744.48 crore on Friday, 23 November 2007.
Jindal Steel & Power November 2007 futures were at premium, at Rs 14,615, compared to the spot closing of Rs 14,107.50.
Reliance Petroleum November 2007 futures were at discounts, at Rs 203.80, compared to the spot closing of Rs 204.05.
Reliance Natural Resources November 2007 futures were at premium, at Rs 158 compared to the spot closing of Rs 157.55.
In the cash market, the S&P CNX Nifty gained 123.10 points or 2.19% at 5731.70.