Saturday, December 01, 2007
Kotak Mahindra Bank
CMP: Rs 1,122.35
Target Price: Rs 1,363
Motilal Oswal Securities has initiated coverage on Kotak Mahindra Bank with a buy rating and a price target of Rs 1,363. “Kotak (Bank) is aggressively building up its banking franchise, with focus on affluent customers and retail services. Its asset management business should see exponential growth,” the Motilal Oswal note to clients said.
“Though its insurance business has been losing market share, we expect better utilisation of Kotak’s distribution strength to change this. We believe KMB deserves premium valuations, given the strong growth expected across its businesses, fast traction in earnings, and quality management,” the note added.
CMP: Rs 1,531.70
Target Price: Rs 1,850
Merrill Lynch has initiated coverage on Titan Industries with a buy rating and a price target of
Rs 1,850, terming it a “high growth domestic consumption story.” “We expect Titan’s watch business to benefit from mix up-trading and distribution moving more towards high margin channel of ‘World of Titan’”.
“In jewellery, we expect volume growth to remain explosive at around 40% as Titan forays into second-tier cities with the new value format “Gold Plus”,” the Merrill note to clients said. “In the premium “Tanishq” format, larger stores and higher efficiencies should drive margins. Lastly, we expect the new venture of prescription eyewear to take off and account for 4% of EBITDA (earning before interest, taxes, depreciation and amortisation) FY10,” the note added.
CMP: Rs 223
Target Price: Rs 312
Parag Parikh Financial Advisory Services has assigned a buy rating to Salora International with a price target of Rs 312. “The company derives 85% of its revenues from the telecom & infocom distribution business and more than 90% of the EBIT (earnings before interest and taxes) from the business of distribution, thus making it a clear contender for a re-rating from a CTV components manufacturer to a full-fledged distributor,” the PPFAS note to clients said.
“The company has active plans to get into retailing of products that it is already distributing; the modalities of the same will be out very shortly. The company is very well placed to show a topline growth of above 35% for some time in our expectations,” the note further said, adding that the recently initiated restructuring of the CTV components business will keep overall profitability intact.
CMP: Rs 134.60
Target Price: Rs 175
ICICI Securities (I-Sec) has initiated coverage on 3i Infotech with a buy rating and a price target of Rs 175. “3i Infotech, with a balanced mix of software products and services (~1:1), has differentiated itself from peers by adopting a diversified business model with a strong foothold in high-growth areas.
With software services providing stability to revenue stream, products add non-linearity to the overall business model,” the I-Sec note to clients said. Additionally, the sharp rupee appreciation, which has baffled the whole software sector, is relatively a lesser concern for 3i Infotech as it derives around 31% revenues from the domestic market and the net dollar exposure is estimated to be less than 10%. Also, 3i Infotech remains comparatively aloof from other sectoral worries such as the subprime issue, impending economic slowdown in the US, wage inflation, attrition,” the note added.
CMP: Rs 410.35
Target Price: Rs 482
Citigroup Global Markets has assigned a buy rating to Colgate Palmolive with a price target of Rs 482. “Colgate’s business has demonstrated strong growth over the eight quarters, with sales growing in excess of 15%. It has gained share in rural areas through its ‘Cibaca’ brand and has also rolled out innovative toothpaste variants at the higher end, which have gained strong acceptance and helped accelerate growth,” the Citigroup note to clients said.
“With major capital expenditure behind it, and incremental tax and excise savings from its new plants, cash generation is likely to accelerate. We estimate about Rs 1,230 crore of free cash generation over the next three years, more than two times of what was generated over the previous three years and as such, dividend payout could increase,” the note added.
RIL 270 (44%)
RPL 402 (65%)
RNRL 247 (40%)
RELCAPITAL 138 (22%)
RIIL 100 (16%)
RCOM 263 (42%)
OTHER 96 (15%)
OVERALL - 612 votes
Each vote could select multiple options
WOW, 65% of you own RPL ! Hope most of you got it at IPO and made huge returns
RIL and RCOM have got 42% ownership, RNRL is equally owned at 40%
Thanks for the overwhelming response!
National Stock Exchange has elbowed out its South African counterpart to become the world's largest platform for stock futures trade, with a trading volume more than double of its nearest competitor.
NSE, bigger than its Indian rival Bombay Stock Exchange in trading volume, is already the world's largest bourse in terms of value of individual stock futures trade.
According to the latest data compiled by World Federation of Exchanges, as many as 2.4 crore stock futures contract were traded at NSE in October as against 83.67 lakh at Johannesburg Stock Exchange (JSE).
JSE was the world's biggest stock futures trading platform till September, when it traded 5.74 crore stock futures contracts -- nearly four times NSE's 1.77 crore.
Stock futures contract is an instrument that allows investors to reap benefits of a stock's performance without actually owning it.
In terms of total turnover of all stock futures contract, NSE recorded the highest amount of about 285 billion dollars during the month, which was nearly 20 times its nearest rival Euronext Liffe's 14.6 billion dollars.
BSE, the world's biggest stock exchange in terms of number of companies listed, is among the lowest ranked bourses in terms of number of stock futures contracts and their turnover.
The BSE witnessed trading of just 587 single stock futures contracts during the month, with a total turnover of just about six million dollars.
Via Economic Times
On November 6, RIL sold the largest chunk of 7.18 crore shares, which amounted to 1.60% of RPL and earned about Rs 1,691.48 crore, at an average sum of Rs 235, in the process.
This was the single-largest chunk to be unloaded, with the subsequent tranches accounting for less than 1%.
After November 6, there was a lull.
RIL returned to the markets on November 13 to 16, selling 0.30%, 0.65%, 0.38% and 0.13% RPL stakes, respectively. From November 19 to 23, the shares sold were again less than a percentage point. In this period, RIL sold 0.34%, 0.22%, 0.08%, 0.20% and 0.12% of RPL stake, respectively.
What’s intriguing is that huge voluminous trades were registered a few days before RIL started selling RPL shares. The whole November saw intriguing trading spikes in the RPL counter.
On November 1, the two premier exchanges witnessed frenetic activity as the refinery share recorded an intra-day all-time high of Rs 295 before it ended the day’s high-octane trading at Rs 261.85 per share. On that day, the delivery of shares accounted for 4.5 crore. And the character of trading that day was also very different as it ended with an unusually huge wave of deliveries.
About 4.46 crore RPL shares were delivered that day. On November 2, the deliveries recorded in the RPL counter in both the exchanges were muted at 1.76 crore share. On November 5, the spike was witnessed again as deliveries pole-vaulted to 3.36 crore and the share price ended at Rs 267.55.
While some demand was witnessed in the counter, it should be noted that there were sellers who matched the wits of buyers by unloading shares for delivery instead of squaring off, as in day trading.
India’s most important city finally has a good shot at urban renewal. On Thursday, lawmakers in Maharashtra, of which Mumbai is the capital, repealed the three-decade-old Urban Land Ceiling Act, voiding the state’s claim on as much as 500ha (1,234 acres) of private property.
Analysts say the actual amount of vacant land held in violation of the law, although not identified by the government for acquisition, may be 10 times that figure. If all this land becomes available for redevelopment, the city’s acute space shortage will surely ease up. Tenants in Mumbai offices now pay higher rents than their counterparts in the financial districts of London, New York and Tokyo.
The full impact of the change may take a while yet.
“The land needs to be cleared up and approvals have to be taken for development before actual construction can take place,” says Anshuman Magazine, managing director for South Asia at CB Richard Ellis Group Inc., the world’s largest commercial real estate broker.
It is, nonetheless, a change with far-reaching consequences. The Indian government has an ambitious plan to turn Mumbai into an international financial centre. That will require everything from new office towers and apartment buildings to schools, markets and art galleries. All of that has to be accommodated in a city built on a narrow peninsula protruding into the Arabian Sea with limited land resources. Freeing up the property market will go a long way in making Mumbai a financial centre that can compete with more established rivals.
A lousy law
The Urban Land Ceiling Act was enacted by Parliament in 1976 during a 21-month period of emergency rule by then prime minister Indira Gandhi, who suspended civil liberties, put opposition leaders in prison and muzzled the press. The legislation said that any landowner in possession of more than 500 sq. m of property in a class A city, such as New Delhi and Mumbai, would have to surrender the excess property to the state so that the urban poor could be rehabilitated.
However, the law also specified the escape routes. It cited a number of conditions under which the government could be lenient in applying the ceiling, provided landlords ask to be exempted. And thus began a sordid chapter in wholesale bribery. The state acquired very little land; and where owners failed to protect their property through bribery, they went to the court. The real estate market froze up. Rents rose. Good land remained vacant or underutilized.
Mumbai’s pricey loss
The poor and the middle class lost out on affordable housing. Of the 19 million people, who reside in Mumbai and its suburbs, half live in slums. In 1999, almost a decade after India began opening its economy and started correcting the mistakes of its socialist past, the federal government took a bold decision to repeal the land ceiling law.
Once the government had won parliamentary approval for the plan, it advised the states to follow suit and change their own laws accordingly. Most states acquiesced; Maharashtra, and a few others, held out. To get the laggards to fall in line, the government in New Delhi dangled a carrot in front of them. States were told they could tap Union government funds to rebuild their creaky urban infrastructure, provided that, among other things, they removed the draconian land ceiling law from their statute books.
The repeal of the land ceiling law in Maharashtra was “long overdue,” says Magazine of CB Richard Ellis.
The restrictive legislation choked Mumbai just as it was straining to expand. Mumbai, which looked both listless and hopeless even until the late 1990s, began its comeback after the Indian economy, and the stock market, came out of slumber in 2004. This year, a survey of global centres of commerce by MasterCard Inc. put Mumbai in 10th place—ahead of Shanghai, Hong Kong, Sydney, Singapore and Zurich—in “financial flows”.
Already, the National Stock Exchange, based in Mumbai, is the world’s second most active market for single-stock and index futures trading. The cash segment of the equity market has traded an average $4 billion (Rs15,920 crore) worth of shares daily this year, compared with less than $800 million five years ago. The currency market, too, is in the midst of an unprecedented boom. India’s daily foreign exchange turnover in April was $34 billion—almost a fivefold increase since 2004, the Switzerland-based Bank for International Settlements noted in a recent study.
Bollywood, Mumbai’s movie industry, is also doing much better now than a few years ago. All this means more business and jobs for Mumbai, and greater pressure on the city’s cramped real estate. Even tycoon Mukesh Ambani has had trouble this year with the ownership of the land, where he wants to build a house. And Ambani is the richest resident of Mumbai—or rather, one of the wealthiest denizens of the planet—with a net worth of about $49 billion, according to Forbes magazine.
That should tell you how tough it is for ordinary millionaires—the poor investment bankers—to find decent accommodation in the city. Maybe now they will have better luck.