India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Friday, January 25, 2008
Readers Soundoff - How good was your broker ?
How good was your broker during the recent crash ? Did you use online trading account and have problems ? Site not working ? Not letting you buy? Rejecting orders ?
Were your calls not answered ?
Let all of us know! Leave a comment!
Do mention Brokerage house, situatin you were put through
Sharekhan admits, can others follow suit ?
One of our readers has forwarded Sharekhan sending out a email to their customers.
Atleast, they have the guts to admit that they screwed up. Can the others put up their hands please and apologize to their customers
Dear Customer,
The last few days took all of us off guard. To make things worse, a lot of you faced issues with our service levels. Some of the issues faced by customers were trading system downtime, customer service cell not responding, fund transfer not happening etc. We don’t want to offer any excuses on why this happened as there can be no justification for the hardship you have undergone.
We apologize for the inconvenience caused to all of you. We will strive to make amendments in all the areas concerned to improve the service delivery to you.
We exist because of you- our customers. It’s the confidence that you have placed in us that has resulted in us doing more than 4 lacs transactions per day and adding 45,000 new customers this month.
We accept that we were found wanting on service delivery due to the sudden spurt in transactions/queries caused by this fall. We commit to improve upon the same in the days to come.
Warm Regards,
Tarun Shah
CEO
Reddy to fire on all cylinders!
We’ve seen the highs and we’ve seen the lows this week. An action-packed week is in store ahead. With a Fed meeting and hopes of another rate cut, a lot will hinge on how global market pick up. Even if the Fed doesn’t do anything further, the tone and outlook would be of prime importance.
With the yield advantage held by Indian bonds reaching a six-year high, Finance Minister P Chidambaram said that US interest rate cuts may influence any RBI decision. The RBI is meeting next week has held rates for 10 months. With inflation below the central bank's target for eight months, optimism of a rate cut is high.
Corporate results will add to individual stock interest and as if all this is not enough, we have the F&O expiry too. With a number of positions getting forcefully cut in this week’s carnage, it remains to what extent the rollover takes place.
BSE Bulk Deals to Watch - Jan 25 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
25/1/2008 532870 ANKIT METAL MAVI INVESTMENT FUND LTD B 200000 85.00
25/1/2008 505506 AXON INFOTEC BANSAL VINIMOY PVT. LTD. B 17000 59.36
25/1/2008 505506 AXON INFOTEC AGRAWAL BROKERAGE PVT. LTD. B 17000 59.50
25/1/2008 505506 AXON INFOTEC BSR FINANCE AND CONSTRUCTIONS LTD S 12000 59.30
25/1/2008 532380 BABA ARTS SANJAY R KOHLI B 53889 27.73
25/1/2008 532380 BABA ARTS GIFTS AND NOVELTIES IMPEX S 50581 28.04
25/1/2008 532845 BHAGWATI BAN MORGAN STANLEY MAURITIUS COMPANY LTD S 240140 59.45
25/1/2008 531127 ENRICH INDUT NAMITA JAGDISH BHARWANI B 54868 3.36
25/1/2008 532876 EVERONN SYS NANDITA MIHIR MEHTA B 159300 928.25
25/1/2008 532876 EVERONN SYS B R INTERNATIONAL S 159300 928.21
25/1/2008 531025 INCA FINLEAS RASHEL AGROTECH LTD. B 15000 131.30
25/1/2008 530543 MARG CONSTRU KIDUJA INDUSTRIES LIMITED S 175000 405.82
25/1/2008 513446 MONNE ISPAT LIVE STAR MARKETING PVT LTD S 265000 470.94
25/1/2008 507864 PIONEER INVE PEANENCE COMMERCIAL PVT LTD. B 60105 673.40
25/1/2008 507864 PIONEER INVE SWISS FINANCE CORP LTD S 54260 673.80
25/1/2008 532791 PYRAMID SAIM NIRMAL KOTECHA B 163087 333.88
25/1/2008 531500 RAJESH EXPOT GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 225000 720.00
25/1/2008 524480 RIDD SID GLU NAKUL ARUN JAGJIVAN S 34833 230.91
25/1/2008 532886 SEL MANUF MAVI INVESTMENT FUND LIMITED S 100000 175.00
25/1/2008 531781 SURYADEEP CH SHIVANI SURYAKANT SHAH B 131000 2.15
25/1/2008 531781 SURYADEEP CH AVINASH SHANKAR SHASTRI S 135715 2.15
25/1/2008 590048 TYCHE PERIPH RNA BUILDERS N G B 42222 91.82
25/1/2008 532765 USHER AGRO PRAVIN BALIRAM BANDARKAR B 100900 181.60
25/1/2008 532765 USHER AGRO MAVI INVESTMENT FUND LIMITED B 150000 181.60
25/1/2008 520113 VESUVIUSINDA HDFC LONG TERM ADVANTAGE FUND B 400000 220.00
25/1/2008 520113 VESUVIUSINDA TEMPLETON MUTUAL FUND AC FRANKLIN INDIA PRIMA FUND S 400000 220.00
25/1/2008 506142 VYAPAR INDS V J PATEL INVESTMENT B 44272 189.26
25/1/2008 506142 VYAPAR INDS V J PATEL INVESTMENT S 44272 189.11
Weekly Close: High voltage sensex !
Volatility marked its history for global markets and this time India couldn't stay isolated. Indian indices also participated in the roller coaster with global indices. This week Indices marked with deep fall and Sensex Locked in lower circuit to see a halted in trading. And it was more shocking to see that it hit lower circuit for second consecutive day. Panic was seen across the board. But the down fall was further intensified as the broker curtailed buying on shortfall of limits. This fall was really mayhem for investors but it was also an opportunity lost for many who couldn't take the advantage of the fall. The market saw almost 2500 fall however recovered sharply. Session continue to highly volatile throughout the week.
Markets this week: Sensex down 640 points down after swing of 3053 points during the week. Nifty 320 points down. Mid cap -9%, Small cap -14%, MTNL -21%n, ONGC -16%, Suzlon -12%, Tata Power -13.5%, Satyam +9%, Infosys +4%, SBI +1.8%, Bharti Tele +3.5% up. RNRL, Nagarjuna and Hind motors each down by 30%.
Recession fear almost took over US at last. Fed still continues its attempt to heal the wounds. Yesterday Fed announced relief package for the public to maintain consumer confidence. We still maintain our view that this is really delaying the worst. Does it really helps or not needs to be seen.
Indian Economy: Inflation stood at 3.83%. Now it seems to be inching up. Inflation was low so far but it was a base effect. Now as the base effect is over we will come to know the actual inflation number. For now it seems to be headed up. But as crude declines.. Govt. is likely to avoid any petrol and diesel hike on the face of election..So some relief on that front.
Next week will major event to watch for is RBI credit policy. Market is expecting rate cut..and we don't disagree on this.
Greenply came out with good numbers. Top line grew by 39% to Rs.139crs and margins saw fantastic improvement. Greenply is one of our best performers. The stock has really done well since our coverage. The company is into interior infrastructure.. plywood and laminates. The company still seems to be a good play.. and we maintain hold here.
As always Titan had good time. The company posted good growth but margins were bit disappointing as gold prices surge. Valuations were on extremely higher side..However the market correction has once again given a chance enter and enjoy the gains. We are positive here.
SpiceJet reported healthy numbers.. Topline almost doubled to Rs 408.5 crore. EBIDTA witnessed loss on the back of higher crude price (above USD 90-100/barrel). The industry has also shown slow capacity growth during the quarter which implies a cautious approach. Management is more focused on the cost cutting exercise which made them perform well this quarter. We will update more on this very soon.
We had fresh research on Gujarat State Petronet Limited (GSPL). The first company in India to transport natural gas on open access basis and is a Pure Natural Gas Transmission Company. GSPL is developing energy transportation Infrastructure in Gujarat and connecting major natural gas supply sources and demand markets. GSPL provides an 'open access' gas pipeline network to link gas 'owners' with large consumers/city gas distribution companies. GSPL does not run the risk or marketing gas nor does it invest in gas inventories which makes its safe. But we still feel it is best avoided..Do read our note for the same.
Exide Inds a leader in Battery manufacturer was another splendid one which came out with great numbers. Topline grew by 58% on yoy basis. EBIDTA Margins improved by 20bps to 15.1% despite high lead prices in Oct December duration. EBIDTA grew by 60%yoy. Bottomline also reported a good 58% growth on yoy to Rs 55.2cr. Lead prices slipped from december to trade near $2600 per ton from nearing $4000/ton. Thus a further fall in lead prices may not benefit margins immediately. The company expects lead to stabilise around $2500/t. There is an element of valuation of the Life insurance company stake. Exide owns about 50% stake in the Ing Vysya Life Insurance. Valuations appear fair at current levels. Exide with its market leader position is well placed to exploit the opportunity.
Technically speaking Sensex witnessed a big fall of over 3k loss but had big lead of over 2k points in two days. Sensex is on a pullback rally. We expect this rally to get exhausted near 19200--19300. Traders are advised to reduce their exposure to midcaps on rise.
Post Market Commentary - Jan 25 2008
The Indian market surged to close with handsome gains as the investors showed their eagerness in buying to book their positions. Taking the favoring cues from the global market, the Indian market opened with handsome gains and kept on marching forward throughout the trading session. The Mid Cap and Small Cap also joined the rally of the benchmark indices as they also closed with good gains. India''s wholesale price index grew 3.83% in the 12 months to 12 January 2008 higher than the previous week''s growth of 3.79%. All the sectoral indices closed in green but most buying was seen in Metal, Capital goods and Bankex indices scrips. The BSE Sensex closed higher by 1139.92 points at 18,361.66 and NSE Nifty grew by 349.9 points to close at 5,383.35. The BSE Mid Cap and Small Cap increased by 483.22 points and 406.94 points to close at 8,021.12 and 10,420.90 respectively.
BSE Realty index grew by 1056.24 points to close at 11,198.06. Scrips that pushed are Unitech (17.79%), Indbul Real (13.75%), HDIL (13.71%), Parsvnath (8.95%), Penland (8.81%) and Omaxe (6.53%).
BSE Metal index surged 1383.11 points to close at 15,603.79. Scrips that gained are Jindal Steel (19.78%), SAIL (15.03%), Hindalco Inds (14.01%), Bhushan Steel (13.23%) and JSW Steel (9.27%).
BSE Oil & Gas index advanced by 699.89 points to close at 11,197.84. Scrips that grew are Essar Oil (24.39%), RNRL (9.73%), Aban Offshore (9.32%), ONGC (7.54%), RPL (7.25%) and HPCL (7.17%).
BSE Capital Goods index closed higher by 1080.70 points at 17,463.18. Scrips that advanced are Kalpataru Power (18.39%), Areva (9.96%), L&T (9.95%), Punj Lloyd (7.65%) and ABB (7.22%).
BSE Bankex index increased by 796.89 points to close at 11,379.77 as ICICI bank (11.16%), Axis bank (9.20%), Andhra bank (8.94%), BOI (8.44%), Allahabad bank (7.76%), PNB (7.63%) closed lower.
BSE IT index grew by 212.58 points to close at 3,800.36 as NIIT Techno (17.06%), I-Flex (16.83%), Aptech (15.79%), Patni Comp (15.68%) and Educomp Soln (11.15%) closed in red.
Unabated rally
The market displayed tremendous strength on firming global cues. The Sensex went into a major recovery mode after yesterday's fall and surged by over 1,150 points during the intra-day trades. The rally in Asian markets cheered investors, and the Sensex had a gap-up opening at 17,504, up 282 points. Realty, metal and banking stocks led the rally and the respective indices posted over 8-10% gains on Bombay Stock Exchange (BSE). Firm close in major Asian indices and surge in European markets also helped the sentiment remain bullish, with Sensex crossing the 18,000 mark by the afternoon and maintaining upwards bias thereafter. Sustained buying in frontline stocks saw the Sensex surge past the 18,400 mark to touch the day's high of 18,406 towards close. The Sensex ended the session by gaining 1,140 points or 6.62% at 18,362, while the Nifty added 350 points or 6.95% at 5,383.
The breadth of the market was positive. Of the 2,758 stocks traded on the BSE 1,558 stocks advanced, 1,164 stocks declined and 36 stocks ended unchanged. Among the sectoral indices the BSE Realty Index flared up by 10.41%, the BSE Metal Index rose 9.73% and the BSE Bankex Index moved up by 7.53%. The other indices also ended with gains over 4-6% each.
All the Sensex stocks ended at higher levels. Hindalco flared up 14.01% at Rs173, Reliance energy shot up by 11.81% at Rs2,030, ICICI Bank zoomed 11.16% at Rs1,259, L&T moved up by 9.95% at Rs3,890, NTPC scaled up 9.11% at Rs222, Bajaj Auto surged by 9.02% at Rs2,300, M&M jumped by 7.76% at Rs674 and Tata Motors gained 7.70% at Rs712.
Over 1.42 crore RNRL shares changed hands on the BSE followed by Ispat Industries (1.41 crore shares), IFCI (1.08 crore shares), GMR Infrastructure (99.65 lakh shares) and Reliance Petroleum (99.05 lakh shares).
Valuewise, Reliance Capital clocked a turnover of Rs255 crore followed by Reliance Energy (Rs207 crore), RNRL (Rs199 crore), GMR Infrastructure (Rs179 crore) and Reliance Industries (Rs158 crore).
Central bank’s monetary policy review to set the tone
Indian central bank's quarterly review of its monetary policy on Tuesday, 29 January 2008 would set the tone for the bourses next week. As per media reports, a sharp cut in US interest rates this week has increased the possibility of a 25 basis points repo rate cut by Reserve Bank of India.
The Q3 December 2007 results announced by corporate India, so far, have been more or less in line with market expectations. Any bad news from US markets could mar the sentiment of investors after recent slur in the domestic markets.
Market men would be closely looking at Q3 results of Maruti Suzuki India, Steel Authority of India, Mahindra & Mahindra, Bajaj Auto, Hindalco Industries and ACC which are due next week.
The ongoing liquidity crunch in the secondary market caused by huge funds tied to the recently concluded mega Rs 11000 crore IPO of Reliance Industries, will continue till the time of allotment of shares in the IPO. Meanwhile, another mega IPO that of Emaar MGF Land about 40% owned Dubai's Emaar Properties opens for bidding on 1 February 2008. The company will raise about $1.8 billion from the IPO.
Indian market could witness an upsurge in foreign money after US Federal Reserve in a surprise move on Tuesday, 22 January 2008, cut Fed funds rate and discount rate by 75 basis points each. The Fed funds rate is now at 3.5%.
FII outflow in January 2008 totaled Rs 9943.70 crore (till 23 January 2008).
Annual inflation, based on the wholesale price index (WPI), moved up 3.79% in the week ended 5 January 2008 compared with 3.5% in the week ended 29 December 2007.
Market ends lower in choppy trade; small-cap, mid-cap shares mauled
It proved as the most eventful week on the stock markets. What started as a bloodbath on the street ended with a solid recovery. Credit crisis in the United State and fears of a US recession caused bloodbath on the domestic bourses at the onset of the week with share prices falling like nine pins. Margin calls created havoc on the bourses in causing a steep decline in share prices that was initially triggered by a setback in global markets and selling by foreign institutional investors.
Margin trading is where investors trade shares without paying the full cost of the share. Instead a margin or percentage is paid as collateral, and when the market moves against the investor, the margin needs to be topped up. If the investor does not make payment, the shares can be sold by the broker. A margin call is also triggered when shares that an investor had bought with borrowed money decrease in value. If the investor is not able to put up additional margin, the broker/financer will resort to sale of shares.
US Federal Reserve came to the rescue of stock markets, cutting key US interest rates by a steep 75 basis points to 3.5% late on Tuesday, 22 January 2008, after Indian markets had closed. The US central bank's move followed two days of steep losses in Asian and European equities on worries that a deteriorating US economy would drag other regions down with it. The US economy has been hit hard by rising defaults in the sub-prime mortgage sector in which Americans with bad credit records are struggling to pay back housing loans given to them during the housing boom. But a strong rebound on the Indian bourses on Wednesday proved short lived as the market lost ground again on Thursday. The market struck back with vwnegeance with Sensex registering a record gain and the first-ever, four-digit single day gain for the index, on a closing basis.
Sensex gained in 2 out of 5 trading sessions in the week ended Friday, 25 January 2008. It lost 652.04 points or 3.42% to 18,361.66 in the week. The S&P CNX Nifty fell 321.95 points or 5.64% to 5,383.35.
The BSE Mid-Cap index plunged 872.59 points or 9.81% to 8,021.12 in the week. The BSE Small-Cap index lost 1,739.55 points or 14.3% to 10.420.90.
The market extended losses in highly volatile trade led by setback in stocks across the globe with Sensex declining 1408.35 points or 7.41% to 17,605.35, its biggest single-day point fall on a closing basis on Monday, 21 January 2008. The Sensex hit a low of 16,951.50 in late-afternoon trade. At the day’s low, the Sensex had declined 2062.22 points. Metal, Oil& Gas and realty stocks battered severely. The sharp fall was triggered by setback in global markets, selling by foreign institutional investors and margin calls after a proposed US stimulus package failed to soothe fears the US will tip into recession. Small and mid-cap stocks were battered brutally. Both these indices underperformed the Sensex.
Market wide circuit filters were applied after an intra-day 10% fall occurred in key benchmark indices in minutes of commencement of trade on Tuesday, 22 January 2008. Trading on the bourses was halted for one hour as the 10% market wide circuit filters were applied after the sharp fall. Volatility was high after trading began at 10:55 IST. Sensex lost 875.41 points or 4.97% to 16,729.94 as margin calls created havoc on the bourses. Though the market ended sharply down, it came off lower level after a huge intra-day fall. European markets recovered with major markets regaining positive zone. However stocks tumbled across Asia as panic gripped markets that a US recession could derail global economic growth.
The market surged after a two-day rout with Sensex galloping 864.13 points or 5.17% to 17,594.07 on Wednesday, 23 January 2008 on speculation, more funds will move to emerging markets after an emergency 75 basis points announced by the US Federal Reserve on Tuesday, 22 January 2008, after Indian markets had closed. Despite the sharp spurt, the market breadth was negative on BSE. Trading was choppy throughout the day. The market opened with a spurt but immediately pared gains. It started firmed up again in mid-morning trade supported by firm Asian markets. Banking and financial shares surged on hopes of a rate cut from the Reserve Bank of India following the Fed rate cut. The BSE Mid-Cap index outperformed Sensex whereas BSE Small-Cap index underperformed Sensex. European markets opened higher but most of them slipped in the red as the day progressed.
The market tumbled with BSE Sensex declining 372.33 points or 2.12% to 17,221.74 on Thursday, 24 January 2008 as selling pressure emerged for index pivotals in the second half of the day. Nonetheless, it recovered some ground after a massive fall in afternoon trade. The market breadth was weak. Earlier, the market had surged in opening trade tracking rally in Asian markets. The market breadth was quite weak. European markets were strong while majority of Asian markets were trading higher.
Taking their cue from firm global markets, share prices surged with the Sensex registering its biggest ever single day rise in absolute terms on a closing basis on Friday, 25 January 2008. The 30-share BSE Sensex rose 1158.85 points or 6.73% to 18380.59, its biggest gain in absolute terms on a closing basis. It was also the first-ever, four-digit single day gain for the index. Stocks across the globe were buoyed by several factors including strong corporate sentiment in Germany and a return of some confidence in the US economy after solid employment data and a congressional fiscal package. The Bush administration's fiscal package includes $150 billion of tax rebates and business incentives meant to prevent a slowdown in the country's economy.
India’s second largest private sector bank in terms of net profit HDFC Bank rose 1.62% to Rs 1,601.40. The company’s net profit rose 46.2% to Rs 429.36 crore on 64.4% rise in operating income to Rs 3,405.79 crore in Q3 December 2007 over Q3 December 2006.
India's fourth largest IT services exporter Satyam Computer Services rose 9.04% to Rs 406.30. The company’s net profit rose 5.71% to Rs 441 crore on 8.33% rise in sales to Rs 2,110.58 crore in Q3 December 2007 over Q2 September 2007.
Grasim Industries plunged 9.2% to Rs 3,033.45. The company’s net profit rose 34.6% to Rs 553.79 crore on 15.3% rise in sales to Rs 2,629.93 crore in Q3 December 2007 over Q3 December 2006.
India's largest oil exploration firm by sales ONGC declined 16.04% to Rs 1,015.45. The company’s net profit declined 6.5% to Rs 4,366.54 crore on 2.9% decline in sales to Rs 15,120.83 crore in Q3 December 2007 over Q3 December 2006.
India’s largest private sector bank by assets ICICI Bank rose 1.11% to Rs 1,259.25 on reports its broking unit aims to raise up to $1 billion through a pre-IPO placement. The board of ICICI Securities, the brokage arm of ICICI Bank, at a meeting held on 19 January 2008 had approved the proposal for an initial public issue and private placement of securities. The maximum dilution of ICICI Bank's holding in ICICI Securities through the proposed public offering and private placement would be up to 15% of the post-issue capital base of ICICI Securities, the bank had said in a statement to BSE. ICICI Bank holds 99.9% in its brokerage arm ICICI Securities.
India's largest engineering and construction company in terms of revenue Larsen & Toubro slipped 1.01% to Rs 3,890.40 after the company said it has bagged orders worth Rs 1057 crore from the Gulf region. Larsen & Toubro LLC, Oman a subsidiary of Larsen & Toubro (L&T) has bagged three engineering, procurement and construction (EPC) contracts worth Rs 457 crore from Oman Electricity Transmission Company (OETC) for electrical grid stations and associated transmission system in Oman.
India's second largest power utility firm by revenue Reliance Energy declined 4.42% to Rs 2,030.25. The company said on 23 January 2008 it won a railway project worth Rs 2500 crore from the Delhi Metro Rail Corporation in consortium with Spain's CAF.
Reliance Industries (down 6.79% to Rs 2,609.55), DLF (down 6.03% to Rs 945.10) declined in the week. Infosys (up 3.87% to Rs 1,521), State Bank of India (up 1.55% to Rs 2,405), HDFC Bank (up 1.62% to Rs 1,601.40) edged higher.
Finance Minister P Chidambaram said on 22 January 2008, the fundamentals of the economy are strong. Chidambaram said there was no reason at all to allow the worries of the Western world to overwhelm us. Our economy is very different from some developed economies which are facing some stress, he said.
On 23 January 2008, Petroleum Secretary M.S. Srinivasan informed that the government may consider cutting government tax levies alongside a rise in fuel prices to compensate state-run oil firms reeling under millions of dollars of daily losses. A decision on raising administered retail prices for petrol and diesel is unlikely before next month as a Group of Ministers that is expected to decide on the issue cannot meet before then.
A total of 8.11 million telephone connections were added in December 2007 compared with 8.22 million connections added in November 2007. The total number of telephone connections stood at 272.88 million end December 2007 over 264.77 million in November 2007. The overall tele-density was 23.89% end December 2007 as against 23.21% in November 2007.
On 23 January 2008, Director of External Relations of the International Monetary Fund, Masood Ahmed stated that a significant slowdown in world economic growth appears inevitable and downside risks still predominate.
The US Federal Reserve in a surprise move on Tuesday, 22 January 2008, cut Fed funds rate and discount rate by 75 basis points each. The Fed funds rate is now at 3.5%.
Annual inflation, based on the wholesale price index (WPI), edged up 3.82% in the week ended 12 January 2008 from 3.79% in the week ended 5 January 2008. The market estimate was 3.83%. Inflation stood at 6.15% in the corresponding week last year.
Sensex soars 1,140 points in record-breaking rally
In what has been a dramatic recovery, the market spurted today with the Sensex recording its biggest ever-single day rise in absolute terms on a closing basis. The rebound was solid coming in the backdrop of carnage on the street witnessed earlier in the week. Rally in global markets aided the sharp surge.
Stocks across the globe were buoyed today by several factors including strong corporate sentiment in Germany and a return of some confidence in the US economy after solid employment data and a congressional fiscal package. The Bush administration's fiscal package includes $150 billion of tax rebates and business incentives meant to prevent a slowdown in the country's economy.
Hindalco, Reliance Energy and ICICI Bank spurted. All the sectoral indices in BSE were in green. Realty stocks surged. Market breadth was strong. However, volumes were low.
India's wholesale price index rose 3.83% in the 12 months to 12 January 2008 marginally higher than the previous week's rise of 3.79%, government data showed on Friday, 25 January 2008. The annual inflation rate was 6.15% during the corresponding week of the previous year.
Meanwhile, all-India bank strike has prompted stock exchanges, BSE and NSE, to cancel clearing and settlement of trades, scheduled to be held today. Settlement of trades done on Wednesday, 23 January 2008, will be now done on Monday, 28 January 2008.
The 30-share BSE Sensex soared 1,139.92 points or 6.62% to 18,361.66, its biggest ever singe day rise in absolute terms on a closing basis. It is also the first-ever, four-digit single day gain for the index.
The Sensex had opened with a positive gap of 262.26 points. Continual buying in index pivotals led the index gain 1184.51 points at the day's high of 18,406.25 touched at the fag end of the trading session.
The broader CNX S&P Nifty jumped 349.90 points or 6.95% to 5383.35.
The BSE Mid-Cap index rose 6.41% to 8,021.12, while the BSE Small-Cap index rose 4.06% to 10,420.90. Both these indices underperformed the Sensex.
BSE clocked a turnover of Rs 5199 crore compared to Rs 6,379.33 crore on 24 January 2008.
Nifty January 2008 futures were at 5405, at premium of 21.65 points compared with spot closing of 5383.35.
The NSE futures & options (F&O) segment turnover was Rs 39,007.70 crore, which was lower than Rs 39,442 crore on Thursday, 24 January 2008.
The market breadth, which was weak till the mid-afternoon, turned strong in the last one hour of the trading session. On BSE, 1558 shares advanced as compared to 1164 that declined. 36 remained unchanged.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 4.78% to Rs 2609.55.
Among the Sensex gainers, Hindalco Industries surged 14.01% to Rs 173.35, Reliance Energy soared 11.81% to Rs 2030.25, Larsen & Toubro jumped 9.95% to Rs 3890.40, NTPC spurted 9.11% to Rs 222.25, Bajaj Auto sprout 9.02% to Rs 2300 and Mahindra & Mahindra jumped 7.76% to Rs 674.20.
Banking stocks were in demand as sharp cut in US interest rates this week has reportely increased the possibility of a 25 basis points repo rate cut by Reserve Bank of India. The BSE Bankex rose 7.53% to 11,379.77. It outperform the Sensex. India’s largest private sector bank by assets ICICI Bank rose 11.16% to Rs 1259.25. Axis Bank soared 9.20% to Rs 1098.30, Andhra Bank moved up 8.94% to Rs 95.05, Bank of India spurted 8.44% to Rs 395.20, Oriental Bank of Commerce jumped 8.38% to Rs 272.80 and Allahabad Bank gained 7.76% to Rs 119.40.
The Indian central bank will unveil quarterly review of its monetary policy on Tuesday, 29 January 2008. The BSE Bankex was up 7.87% at 11,416.03.
India’s largest commercial bank State Bank of India rose 2.52% to Rs 2405. The bank on 24 January 2008 reported 69.82% rise in net profit to Rs 1808.64 crore 33.10% increase in operating income to Rs 15364 crore in Q3 December 2007 over Q3 December 2006.
The BSE Realty index rose 10.41% to 11,198.06. It outperform the Sensex. Unitech surged 17.79% to Rs 439, Indiabulls Real Estate soared 13.75% to Rs 661.15, Parsvnath Developers spurted 8.95% to Rs 296.50, Omaxe jumped 6.53% to Rs 322 and DLF rose 5.89% to Rs 945.10.
The BSE Metal index jumped 9.73% to 15,603.79. It outperform the Sensex. Steel Authority of India surged 15.03% to Rs 230.30, Hindalco Industries soared 14.01% to Rs 173.35, National Aluminum Company (Nalco) jumped 13.75% to Rs 436.40, Tata Steel moved up 6.37% to Rs 714.10 and Sterlite Industries rose 4.87% to Rs 786.75.
FMCG stocks lagged behind in today’s rally. The BSE FMCG index rose merely 4.73% to 2,160.03. It underperform the Sensex. Tata Tea soared 10.24% to Rs 793.40, United Breweries spurted 6.82% to Rs 309.25, Hindustan Unilever jumped 6.24% to Rs 199.30, ITC gained 5.15% to Rs 198.20 and Rei Agro moved up 5% to Rs 985.65.
Engineering & construction firm GMR Infrastructure soared 19.34% to Rs 194.40. The firm on 24 January 2008 reported 2750.91% surge in net profit to Rs 15.68 crore.
Software services firm Patni Computer Systems rose 15.68% to Rs 268.60 after it said its board would consider a share buyback next month.
Liquor maker United Spirits jumped 1.70% to Rs 1719.15. The company reportedly plans to acquire three more distilleries as well as enter into third-party contracts with six more as it aims to increase its volumes 33% to 100 million cases between two-three years. The company currently has a total of 67 distilleries, which includes 29 owned, 24 on contract and 14 associates.
Offshore logistics provider Sical Logistics was locked at upper limit of 5% at Rs 214.75. The company is reportedly close to acquiring a freight forwarding company. According to reports, three companies are being evaluated for taking over and a talk with one of them is at an advanced stage. While not disclosing the name of this company, reports suggested that the target firm was a 25-year-old freight forwarding company, with a good clientele.
Reliance Capital clocked the highest turnover of Rs 255.68 crore on BSE. Reliance Energy (Rs 207.85 crore), Reliance Natural Resources (Rs 199.77 crore), GMR Infrastructure (Rs 179.20 crore) and Reliance Industries (Rs 158.78 crore), were the other turnover toppers on BSE in that order.
Ispat Industries reported the highest volume of 1.41 crore shares on BSE. GMR Infrastructure (99.65 lakh shares), Reliance Petroleum (90.56 lakh shares), Indusind Bank (69.90 lakh shares) and NTPC (34.25 lakh shares), were the other volume toppers on BSE inthat order.
In Europe, key indices in UK, France and Germany were up by 1.01% to 1.60%.
In Asia, key indices in Hong Kong, South Korea, Taiwan, Singapore, and Japan were up by 0.93% to 6.73%.
The US stocks finished higher overnight after the Bush administration and lawmakers announced details of an economic stimulus plan aimed at stemming mortgage market losses. Dow closed up 108.44 points or 0.88% at 12,378.61, the Nasdaq climbed 44.51 points or 1.92% to 2,360.92 and the S&P 500 added 13.47 points or 1.01% to 1,352.07.
Crude oil prices rose in Asian trade Friday as stock markets around the world firmed, China revealed strong growth and on expectations that OPEC will not increase crude output next week. In Asian deals Thursday, crude was trading at $89.77 a barrel. Light, sweet crude for March delivery jumped $2.42 to settle at $89.41 a barrel on the New York Mercantile Exchange on Thursday.
It was a dramatic recovery on the bourses today coming in the backdrop of carnage on the street witnessed earlier in the week. Sensex had plummeted 2,283.76 points in just two days on Monday, 21 January 2008 and Tuesday, 22 January 2008. Market wide circuit filters were applied after an intra-day 10% fall occurred in key benchmark indices in minutes of commencement of trade on Tuesday, 22 January 2008.
Margin calls created havoc on the bourses in causing the steep decline in share prices that was initially triggered by a setback in global markets and selling by foreign institutional investors. Credit crisis in the United State and fears of a US recession has hit global markets hard earlier in the week.
Midcapmania Multibaggers - Jan 25 2008
Buy Finolex Industries @ Rs 77.15 for a target of Rs 200+ in 12-18 months (Can touch Rs 350+ levels when its private jetty at Ratnagiri is leased out and a new company floated)
Buy House of Pearl @ Rs 196.55 for a target of Rs 500+ in 12-18 months (risk free buy @ c.m.p. against Issue Price - Rs 550 1 year back)
Buy Parekh Aluminex @ Rs 175.4 for a target of 450+ in 12-18 months (Many mutual funds have recently picked up stake)
by Uttam Saraf is a independent analyst
Disclaimer - DP doesn't vouch for these recommendations, do due diligence,research before buying
Market to move up on global cues
The market is likely to display a positive trend on the back of increasing investor confidence on heavyweights and positive global cues. However, caution should be maintained as higher bouts of intra-day volatility is likely to persist. Among the local indices, the Nifty could test higher levels in the 5400-6300 range and has a support at 4550. The Sensex on the downside may slip to15900 and may face resistance at 17734. On the earnings front Ashok Leyland, BEML, BHEL, Dish TV, Dr Reddy's Lab, Federal Bank, Matrix Lab, TVS Motors, Uco Bank and Voltas are expected to announce their quarterly numbers.
US indices advanced for a second session on Thursday as investors continued to buy equities after a steep selloff. While the Dow Jones flared up by 108 points at 12379, the Nasdaq moved up by 45 points to close at 2361.
Except few most of the Indian ADRs traded weak on the US bourses. Dr Reddy's Lab led the pack with gains of nearly 3% while Infosys, Wipro and Tata Motors moved up by 1% each. Among the losers ICICI Bank, Satyam, HDFC Bank, MTNL, VSNL and Rediff slipped around 1-5% each.
Crude oil prices advanced further, with the Nymex light crude oil for March delivery gaining by $2.42 to close at $89.41 a barrel. In the commodity space, the Comex gold for February delivery rallied sharply by $23.90 to settle at $883.10 an ounce.
Grey Market - Onmobile Global, KNR Constructions, EMAAR MGF
Future Capital Holding 765 370 to 380
Reliance Power 450 150 to 160
Emaar MGF 610 to 690 180 to 200
J. Kumar Infraprojects 110 to 120 5 to 8
Cords Cable Ind. 125 to 135 15 to 20
KNR Construction 170 to 180 12 to 15
On Mobile Global 425 to 450 80 to 90
Bang Overseas 200 to 207 30 to 32
Market to head higher
The market is expected to recover tracking firm global markets. However, volatility may remain high as has been the case this week after a carnage in share prices witnessed early this week. Meanwhile, stock exchanges have postponed clearing and settlements today due to strike by bank employees. Settlement of trades done on Wednesday, 23 January 2008, will be done on Monday, 28 January 2008.
As per provisional data, FIIs sold shares worth a net Rs 2254.93 crore on Thursday, 24 January 2008, the day when Sensex had lost 372 points. Domestic funds bought shares worth a net Rs 1117.03 crore on that day.
Foreign institutional investors (FIIs) were net buyers to the tune of Rs 2,541.52 crore in the futures & options segment on Thursday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 341.18 crore and sold index options worth Rs 67.35 crore. They were net buyers of stock futures to the tune of Rs 2,270.27 crore and sold stock options worth Rs 2.58 crore.
Stocks rose in Asia today, 25 January 2008, buoyed up by several factors including strong corporate sentiment in Germany and a return of some confidence in the US economy after solid employment data and a congressional fiscal package. The Bush administration's fiscal package includes $150 billion of tax rebates and business incentives meant to prevent a slowdown in the country's economy.
Morning Call - Jan 25 2008
Market Grape Wine :
In House :
Nifty at a supp of 4995 with resis at 5117 and 5202. Nifty expected to inch up to 5400~5550
Intra Day: Buy Reliance above 2490 with a TGT of 2535 and a SL of 2478
Buy SBIN above 2345 with a TGT of 2379 and a SL of 2334
F&O: Buy Nagarjuna Construction above 284 with a TGT of 297 and a SL 278
Buy GTL above 258 with a TGT of 271 and a SL of 253
Delivery: Buy ICICI Bank , BHEL , Centurytext, PTC, Birlajute, Kamath Hotel,Adhunik Metalik, ESAB India
Aptech, DCM Shriram Consolidated (Accumulate with a view of 4~6 mths)
Out House :
Markets at a support of 17007 & 16786 levels with resistance at 17575 & 17979 levels .
Buy : RIL & RelCap
Buy : Religare & IBulls
Buy : SBIN
Buy : JPhydro & JPASSO
Buy : Adlabs
Buy : RPL & IOLBroad
Dark Horse : IOlBroad , Aban , GE , RIL , Sbin , Relcap & REL
TGIF : Thank God Its Friday : Markets consolidating buy at dips and hold for good returns in coming weeks .
US Markets up on stimulus package
As economic reports disappoint, stimulus package from Bush administration cheer investors
US Market managed to end higher for the second consecutive day today, Thursday, 24 January, 2008. Reports that a bond insurer bailout is not imminent weighed on the stock market shortly in the morning hours. But a stimulus package from the Bush administration to ward off recession in US cheered investors and stocks rallied in the post lunch hours.
The Dow Jones industrial Average ended the day with a gain of 108 points at 12,378. The Nasdaq Composite Index, finished higher by 45 points at 2,360. S&P 500 finished higher by 13 points at 1,352. Twenty-one out of thirty Dow stocks ended in the green today.
As per the stimulus package from the current administration, House leaders Nancy Pelosi and Treasury Secretary Paulson announced their bipartisan $150 billion fiscal stimulus plan. As per the plan, individuals who earn up to $75,000 will be eligible for a $600 check and couples who earn up to $150,000 will be eligible for $1,200. Individuals who do not pay income tax, but have earned more than $3,000 will be eligible for a $300 check. Parents will get $300 per child. Businesses will get $50 billion in incentives.
Though, the stimulus plan still has to pass the House and Senate, investor sentiments got a good boost as the morning economic reports did not have much of a good news to deliver.
December existing home sales lower than expected
On the economic front, December existing home sales came in at a worse than expected. December existing home sales was reported at 4.89 million. This was short of the consensus estimate of 4.95 million. Existing sales are down 2.2% compared to last month's reading of 5 million. The median sale price of an existing home is down 6% against last year.
Also, weekly jobless claims came in at 301,000, lower than the expected reading of 320,000. The good part was that the figure is less than the typical recessionary levels of over 450,000
Earlier this week, it was announced that the Federal Open Market Committee (FOMC) approved a 75 basis point intermeeting cut in the fed funds rate to 3.50%. The Board of Governors also approved a 75 basis point cut in the discount rate to 4%. This was Fed’s first move this year to keep recession at a bay.
Crude prices erased all of yesterday’s gains and prices rallied today. Prices rose today after the Bush Administration announced a stimulus package to ward off recession. Prices rose despite Energy Department announcing a rise in crude inventories for week ended 18 January, 2008. Crude-oil futures for light sweet crude for February delivery today closed at $89.41/barrel (higher by $2.42/barrel or 2.8%) on the New York Mercantile Exchange. Prices are 61% higher than a year ago.
As per the weekly inventory report by the Energy Department, U.S. crude inventories, rose for a second week, increased to 289.4 million barrels in the week ended 18 January. Crude inventories at Cushing, Oklahoma, the delivery point for Nymex-traded crude, fell by 800,000 barrels to stand at 15.7 million barrels. Total commercial petroleum inventories, including crude, motor gasoline, heating oil, increased by 2.2 million to 972.3 million barrels last week, and were in the middle of the average range for this time of year.
Volume on the New York Stock Exchange neared 2.2 billion, and advancing stocks topped those declining almost 2 to 1. On the Nasdaq, more than 2.5 billion shares traded, and advancing issues outran decliners 4 to 3.
Indian ADRs mostly ended in the red today. ICIC Bank was one of the main losers today shedding 3.8%. Dr Reddys remained one of the winners gaining 3%.
Investors will again be focused on earnings reports tomorrow. Caterpillar and Honeywell are the main Dow names to report their earnings tomorrow.
Strike well with banks!
The reason lightning usually doesn't strike twice in the same place is that the same place isn't there the second time.
The stock market is here to stay no matter what strikes it. As if all the turbulence and volatility was not enough, investors and traders could have tough time today due to the nationwide bank strike. Ironically, if you wish to take some position (only if you have the money), banking is the sector to be in. The RBI meet next week (Jan. 29) will ensure that there is plenty of action in these counters. The flip side is F&O expiry could cause wild swings no matter which counter you enter.
Stock exchanges have had to alter their settlement schedules because of the bank strike. No clearing and settlement will take place today with banks across the country downing their shutters on a slew of issues. All trades executed on Jan. 24 and Jan. 25 will be settled on Jan. 28. In a nutshell, money could again be in short supply and may pose some more strain despite the bounce back across global markets.
And, though trading will continue as usual, one fears that traded volume will take a hit owing to the weak undertone and the bank strike. In addition, there are reports of brokers still not having recovered from this week's big sell-off. A couple of brokers are reportedly in trouble. The system is still not fully fit to resume a full fledged rebound as aftershocks of the global meltdown will continue to haunt the bulls. Meanwhile, the NSE has clarified that it has not allowed brokers to fund their pay in commitments in the form of shares with certain conditions.
Intra-day traders may continue to find life difficult for a while till the overall sentiment improves considerably and there is complete stability. This may take time. How long is anybody's guess. For long-term investors though, this is a big opportunity to prepare for a long haul, as the outlook on the Indian economy remains pretty good. We expect a firm opening on the back of strong global cues. Having said that, things will continue to be uncertain and choppy. One will have to continue to keep an eye on global markets for near-term direction of the market.
One big worry is the relentless selling by the FIIs. Unless there is a favourable change on this front, things will remain uncertain and volatile. FIIs were net sellers of 22.55bn (provisional) in the cash segment yesterday. On the other hand, domestic funds continued to pump money, and were net buyers of Rs11.17bn. In the F&O segment, FIIs were Rs25.42bn buyers. On Wednesday, foreign funds were net sellers of Rs24.99bn. With this, they have pulled out well over US$3.2bn in the past six days (excluding yesterday). Mutual Funds were net buyers of Rs8.77bn on Wednesday.
Results Today: Andhra Cement, Ashok Leyland, Atlanta, Barak Valley, BEML, BEL, BHEL, Century Textiles, Dalmia Cement, Dish TV, Dishman Pharma, Dr. Reddy's, Emkay Share, Federal Bank, Force Motors, Goa Carbon, Gujarat Industries & Power, ICRA, ING Vysya Bank, Jyoti Structures, Kale Consultants, KEI Industries, Marg Construction, Matrix Labs, Novartis, PTC India, REI Agro, Rico Auto, TVS Motor, UCO Bank, Unity Infraprojects, Voltas and Zee News.
Asian markets were trading mostly higher this morning. The Nikkei in Tokyo gained 367 points to 13,459 while the Hang Seng in Hong Kong surged 1049 points to 24,558. The Kospi in Seoul advanced 16 points to 1679 while the Straits Times in Singapore rose 66 points to 3119.
The Shanghai Composite in China was flat at 4715 and the Taiex in Taiwan was up 196 points to 7713.
US stocks ended higher on Thursday as investors continued bottom fishing after the recent drubbing. Announcement of a tentative economic stimulus package by the White House lifted the sagging spirits of the bulls.
Xerox Corp. and Lockheed Martin reported profit that topped analysts' estimates. Freeport-McMoRan Copper & Gold, Exxon Mobil and Alcoa led gains in commodities producers after China's economy posted a fourth- straight quarter of growth above 11%.
The S&P 500 climbed 13 points, or 1%, to 1,352.07, paring its decline this year to 7.9%. The Dow Jones Industrial Average, which yesterday fell 326 points before ending the day 299 points higher, added 108 points, or 0.9%, to 12,378.61. The blue chip gauge is still down 6.7% in 2008. The Nasdaq rose 44 points, or 1.9%, to 2,360.92, still off 11% in 2008.
Market breadth was positive. On the NYSE, winners topped losers three to two on volume of 2.17bn shares. On the Nasdaq, advancers beat decliners by more than four to three on volume of nearly 3bn shares.
Treasury prices fell, raising the yield on the 10-year note to 3.71% from 3.6% late on Wednesday. In currency trading, the dollar fell versus the euro and rose against the yen.
US light crude oil for March delivery rose $2.42 to settle at $89.41 a barrel in New York after the government reported a stronger-than-expected rise in crude supplies last week. COMEX gold rallied $22.70 to settle at $905.80 an ounce.
After the close, Microsoft, Sun Microsystems and Amgen reported their quarterly results. Microsoft reported higher quarterly sales and earnings that topped estimates, sending shares 5% higher in extended-hours trading.
Sun also reported higher quarterly profit that beat estimates. Shares were little changed after the close. Amgen reported higher earnings and weaker sales in the fourth quarter, both above analysts' expectations. Shares gained 5% in extended-hours trading.
Nokia reported a 44% jump in net profit and said it had reached its goal of 40% market share in handset sales. The company also said that while it expects continued growth in 2008, first-quarter growth would slow from the last quarter of 2007. Shares jumped 12.5%.
On late Wednesday, Qualcomm reported strong fiscal first-quarter results and forecast second-quarter and full-year profit in line with forecasts. Shares jumped over 10% in active Nasdaq trade.
European shares posted their biggest one-day advance in nearly five years, as investors seized upon strong results from Nokia and others to pick up battered shares. The pan-European Dow Jones Stoxx 600 index climbed 5.2%, or 16.05 points, to 322.08, the most it has risen in one day in percentage terms since a 5.6% rise logged in March 2003.
UK's FTSE 100 closed up 4.8% at 5,875.80, while the German DAX 30 surged 5.9% to 6,821.07 and the French CAC-40 jumped 6% to 4,915.29.
All the emerging markets closed up. The Bovespa in Brazil shot up almost 6% to 57,463 while the IPC index in Mexico added 1% to 27,905. The RTS index in Russia gained 5.15% to 1988 while the ISE National-30 index in Turkey rose 6.3% to 57,053.
Bull bear slugfest continue
Bears once again showed their strength today shrugging off bulls off the bourses. After staging a strong come back in the previous session and starting off the day in style bulls were not able to hold on to their gains as markets wiped off all its early gains on back of weak cues from the Asian markets and all round profit booking.
The upward trend short lived and markets turned volatile gyrating almost 1,000 points between its days high and low, The benchmark Sensex dropped 372 points to close at 17,211 and NSE Nifty slipped 169 points to close at 5,034.
Reliance Industries was down 2.5% to Rs2488. According to reports the company is eyeing a larger pie of $25bn global plastic industry may rollout expansion plans soon. Reports have also stated that its retail subsidiary entered into a joint venture with Citigroup to offer retail finance The scrip touched an intra-day high of Rs2645 and a low of Rs2435 and recorded volumes of over 48,00,000 shares on NSE.
Hindustan Zinc slipped 12.2% to Rs568 after the company announced that they lower zinc prices to Rs1,01,900 per ton and cut lead prices to Rs1,12,500 per ton. The scrip touched an intra-day high of Rs650 and a low of Rs550 and recorded volumes of over 1,00,000 shares on NSE.
HB Stockholdings was locked at 5% lower circuit. The company announced that it increased its stake in DCM Shriram Industries Ltd to 35,23,143 equity shares comprising 23.03% of it total equity through open market purchases. The scrip touched an intra-day high of Rs94 and a low of Rs88.70 and recorded volumes of over 13,000 shares on NSE.
BHEL was down 2.5% to Rs2090. The company declared that they secured order worth Rs24.75bn. The company announced that it would set up 600MW Thermal power unit. The scrip touched an intra-day high of Rs2260 and a low of Rs2075 and recorded volumes of over 11,00,000 shares on NSE.
Madras Cement gained 2% to Rs3707. The company announced that they would consider buy back offer on Jan 31. The scrip touched an intra-day high of Rs4200 and a low of Rs3585 and recorded volumes of over 6,000 shares on NSE.
Essar Shipping was locked at 5% lower circuit to Rs189.45. Reports stated that the company may merge Essar Group’s exploration and drilling business. The scrip touched an intra-day high of Rs209.35 and a low of Rs189.45 and recorded volumes of over 28,00,000 shares on NSE.
Jet Airways slipped 2.6% to Rs719. The company announced that they planned to set up two new subsidiaries maintenance, repair and overhaul and flight-catering unit. The company is also looking for other funding sources according to reports. The scrip touched an intra-day high of Rs796 and a low of Rs705 and recorded volumes of over 43,000 shares on NSE.
Tata Tea advanced by over 7.5% to Rs728 following reports that the company opened it first out-of-home segment first outlet ‘Chai Unchai’ in Bangalore. The scrip touched an intra-day high of Rs744 and a low of Rs685 and recorded volumes of over 3,00,000 shares on NSE.
HCL Technologies dropped 4.2% to Rs230. The company announced that it has been selected as the provider of a mobile and remote working solution to Wiltshire Police. Valued at 4mn USD, the partnership will last for five and a half years, including an initial six month implementation period. The scrip touched an intra-day high of Rs252 and a low of Rs225 and recorded volumes of over 11,00,000 shares on NSE.
SBI gained 1% to Rs2343. The company announced that they have purchased 91% stake in Global Trade Finance, for Rs5.25bn. SBI acquired the stake from three of the four promoter shareholders of GTF at a price of Rs75 per share, according to reports. The scrip touched an intra-day high of Rs2399 and a low of Rs2300 and recorded volumes of over 13,00,000 shares on NSE.
News Snippets:
- Land troubles may delay Sasan ultra mega power project developed by Reliance Power. (Mint)
- Reliance Industries and Gail in race for supplying 8mscmd of gas to Karnataka Power Corp’s 1,400MW power project at Bidadi. (Mint)
- NK Minda Group plans to invest Rs4bn for units in Chennai and Pune over next 18 months. (Mint)
- Britannia Industries plans to enter ready-to-eat foods and strengthen presence abroad. (Mint)
- Aditya Birla Retail looking for an IPO in 3-5 years. (Mint)
- M&M launches Scorpio Pik-up in Brazil. (Mint)
- Tata Motors’ mini truck to be launched in USA. (BS)
- Areva T&D bags Rs28bn order from Qatar General Electricity and Water Corporation. (BS)
- BHEL gets award of Rs25bn contract from Tamil Nadu Electricity Board. (BS)
- Pyramid Saimira plans Rs2bn investment on proposed SEZ. (BS)
- PBA Infrastructure secures Rs1.5bn order from Municipal Corporations of Greater Mumbai and Pimpri Chinchwad. (BS)
- Electrotherm India won orders worth US$14mn for furnaces and other accessories supply for a steel billet plant in Turkey. (BS)
- Patni Computers to consider a share buyback. (BS)
- Ansal Properties enters into tripartite agreement with subsidiary of Educomp Solutions to construct and develop school properties. (BS)
- Blue Dart appoints Yogesh Dhingra as COO. (BS)
- RCom plans to offer broadband in Bhutan. (BS)
- Adani Enterprises planning to add capacities in energy, real estate and agri businesses in next 3-5 years. (BS)
- JSW Steel gets into galvalume production. (BL)
- BSNL ties up with US firm SOMA for Wimax. (BL)
- TCS wins US$40mn New India Assurance deal. (BL)
- Sony Ericsson launches new handsets in Indian market. (BL)
- United Spirits plans acquisition to increase volumes by 33% to 100mn cases in 2-3 years. (BL)
- Reliance Retail in talks with global players for new store formats. (BL)
- PNB may take its wholly owned subsidiary PNB Housing Finance for a public offer in coming months. (BL)
- ING Vysya Life Insurance looks to raise Rs1bn more capital by March 2008. (BL)
- ICICI Bank ties up with UAE Xchange to promote its travel card. (BL)
- IOC may get Rs39.8bn subsidy from upstream companies. (BL)
- Gayatri Projects eyes projects in water, infrastructure and power. (BL)
- Sical Logistics close to buying freight forwarding company. (BL)
- Cadila Healthcare and US based Prolong Pharmaceuticals tie-up to develop anaemia drug. (BL)
- Spanco Telesystems plans SBU to market product that enables real time monitoring of vehicles. (BL)
- Rolta India agrees to buy Broech of US for Rs1.8bn. (BL)
- The proposed IPO of National Hydroelectricity Power Corporation (NHPC) to face hurdle on non compliance of regulatory clause. (FE)
- Infosys to develop information, communication technology to connect farmers with retailers. (FE)
- JSW Steel recommissions one of its galvanizing line. (FE)
- Monsanto India to sell Butachlor & Alachlor biz to Sinochem International for $8.4mn. (FE)
- RNRL applies for coal blocks to turn coal into gas. (FE)
- NDTV Imagine plans to make contemporary international cinema available to viewers through various platform. (FE)
- M&M in negotiations to take over the Belgian automotive gear maker VCST for ~Rs14bn including pound 125mn in debt. (ET)
- Aditya Birla Retail looking to foray in Consumer Durable, Footwear, fashion, books or music. (ET)
- Capgemini denies that Indian IT companies like Wipro may possibly be acquiring parts of the company. (ET)
- Concor looking for a major chunk of the air cargo biz in the country. (ET)
- Concor plans to build two air cargo complexes in Goa and the North east. (ET)
- ICICI Venture plans US$3bn infra fund to invest in road, port and Power projects. (ET)
- Areva T&D India looking to double its transformer capacity in India by 2010. (ET)
- SBI plans to buy 91% stake in GTF Global Trade Finance. (ET)
- Dr Reddy’s Lab, Sun Pharma lead US patent litigation race. (FE)
Economic Snippets
- EPF rate for 2007-08 kept unchanged at 8.5%. (Mint)
- Railways to invest Rs200bn in three years over 100 projects. (BL)
- Telecom industry seeks duty cut on wireless data cards. (BL)
- Finance Minister to take appropriate measures to curb certain kinds of capital inflow that are speculative in nature. (FE)
- Department of revenue and economic affairs agrees to waive STT on option where the right to buy or sell is not exercised. (FE)
- Civil aviation ministry in pact with Saudi Arabia government to enhance air traffic between two countries. (FE)
- TRAI orders telecom service providers to provide hard copy of the bill free. (FE)
- Existing DTH players decide to levy a carriage fee to limit the introduction of new channels. (FE)
- TDSAT defers the hearing of GSM operators’ petition against dual technology. (FE)
- Asian Development Bank (ADB) to provide a loan of $350mn to improve Urban Infrastructure in India’s Northern state of Uttarkhand. (FE)
- Applications from NBFC seeking no objection certificate (NOC) for branch expansion have to be registered with RBI on a case to case basis. (FE)
- The united forum of Banks unions have called a strike on January 25, 2008 to highlight their charter of demands. (ET)
Gold crosses 900 dollar mark again
Gold crosses the 900 mark once again as ECB hints at steady interest rate
Precious metal prices soared today as US stock market made a recovery since the past two days and the dollar slipped against the euro. Rising concerns about growth in the US economy had pressured bullion metals since the past couple of days. Silver prices also gained today.
Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for February delivery rose $22.7 (2.6%) to close at $905.8 an ounce on the New York Mercantile Exchange. Earlier in the day, it hit an intraday price of $8911 an ounce. Prior to today, gold prices had reached a record $916.10 on 15 January. This year, prices have gained 8.5% till date. Last week, gold suffered a loss of 1.8%.
Comex Silver futures for March delivery rose 36.3 cents (2.3%) to $16.333 an ounce. Silver has gained 10% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
In the currency markets today, the dollar was down against most major counterparts, pressured by weaker-than-expected existing-home sales data. The dollar was mainly down against the euro. The dollar index, which tracks the performance of the greenback against six other major currencies, dropped 0.9% at 75.685. On the other hand, European Central Bank officials signaled interest rates would remain steady to cap inflation.
In the energy market today, crude oil rose by more than $2 after the Bush Administration came out with a stimulus package to ward off recession.
Earlier this week, Federal Reserve slashed its benchmark interest rate 0.75% to 3.5% after global equity markets tumbled on concern the slumping U.S. economy will drag down the growth rates of other nations. Federal Reserve’s decision came as a surprise to everyone but Fed took the same as stocks markets worldwide, had been plunging on fear that US economy would be hitting a recession soon.
Gold had climbed 31% in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. The Fed reduced federal funds rate three times in FY 2007.
At the MCX, gold prices for February delivery closed higher by Rs 224 (1.9%) at Rs 11,484 per 10 grams. Prices rose to a high of Rs 11,517 per 10 grams and fell to a low of Rs 11,275 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 330 (1.6%) higher at Rs 21,017/Kg. Prices opened at Rs 20,775/kg and rose to a high of Rs 21,210/Kg during the day’s trading.
Crude oil firms up
Prices end more than $2 higher as Bush Administration announces stimulus package
Crude prices erased all of yesterday’s gains and prices rallied today, Thursday, 24 December, 2008. Prices rose today after the Bush Administration announced a stimulus package to ward off recession. Prices rose despite Energy Department announcing a rise in crude inventories for week ended 18 January, 2008.
Crude-oil futures for light sweet crude for February delivery today closed at $89.41/barrel (higher by $2.42/barrel or 2.8%) on the New York Mercantile Exchange. Prices are 61% higher than a year ago.
As per the weekly inventory report by the Energy Department, U.S. crude inventories, rose for a second week, increased to 289.4 million barrels in the week ended 18 January. Crude inventories at Cushing, Oklahoma, the delivery point for Nymex-traded crude, fell by 800,000 barrels to stand at 15.7 million barrels. Total commercial petroleum inventories, including crude, motor gasoline, heating oil, increased by 2.2 million to 972.3 million barrels last week, and were in the middle of the average range for this time of year.
EIA also reported that U.S. gasoline supplies rose by 5 million barrels in the latest week, but distillate stocks fell by 1.3 million barrels. U.S. refineries operated at 86.5% of their operable capacity last week, down from the previous week's 87.1%.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
Natural gas caps six days of slipping streak
Last Tuesday, Federal Reserve slashed its benchmark interest rate 0.75% to 3.5% after global equity markets tumbled on concern the slumping U.S. economy will drag down the growth rates of other nations. Federal Reserve’s decision came as a surprise to everyone but Fed took the same as stocks markets worldwide, had been plunging on fear that US economy would be hitting a recession soon. On that day, futures touched $85.42 after the Fed announcement during intraday trading.
Brent crude oil for March settlement today rose $2.45 (2.8%) to $89.07 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Natural gas advanced today on speculation the U.S. will avoid a recession and fuel demand will increase. Gas for February delivery rose 18.1 cents (2.4%) to settle at $7.802 per million British thermal units. EIA reported today that U.S. natural-gas supplies declined by 155 billion cubic feet to stand at 2.536 trillion cubic feet in the week ended 18 January.
Against this backdrop, February heating oil gained 5.32 cents to $2.4763 a gallon and February reformulated gasoline rose 3.2 cents to $2.2828 a gallon.
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February, 2008 meeting in Vienna.
At the MCX, crude oil for February delivery closed at Rs 3,491/barrel, higher by Rs 42 (1.2%) against previous day’s close. Natural gas for January delivery closed at Rs 308.1/mmtbu, higher by Rs 7.9/mmtbu (2.6%).
Nifty January 2008 futures at discount
Turnover in F&O segment rises
Nifty January 2008 futures were at 5001, at discount of 32.45 points as compared to spot closing of 5033.45.
The NSE's futures & options (F&O) segment turnover was Rs 39,442 crore, which was higher than Rs 36,073.86 crore on Wednesday, 23 January 2008.
Reliance Industries January 2008 futures were at discount, at 2486, compared to the spot closing of 2488.90.
In the cash market, the S&P CNX Nifty lost 169.95 points or 3.27% at 5033.45.
Cords Cable IPO Subscription,Allotment Details
| Sr.No. | Category | No. of times of total meant for the category | ||
| 1 | Qualified Institutional Buyers (QIBs) | 6.8271 | ||
| 1(a) | Foreign Institutional Investors (FIIs) | |||
| 1(b) | Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) | |||
| 1(c) | Mutual Funds | |||
| 1(d) | Others | |||
| 2 | Non Institutional Investors | 5.1132 | ||
| 2(a) | Corporates | |||
| 2(b) | Individuals (Other than RIIs) | |||
| 2(c) | Others | |||
| 3 | Retail Individual Investors (RIIs) | 2.5818 | ||
| 3(a) | Cut Off | |||
| 3(b) | Price Bids | |||
| 4 | Employee Reservation | 1.0143 | ||
| 4(a) | Cut Off | |||
| 4(b) | Price Bids |
Short Term Trading Calls
Buy Reliance Industries with a stop loss of Rs 2400 for a short-term target of Rs 2822.
IPCA Labs, Lupin, Sanghvi Movers, Marico, PNB
Ipca Laboratories
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs875
Current market price: Rs638
Results in line with expectations
Result highlights
- Ipca Laboratories (Ipca) reported a 21.2% year-on-year (y-o-y) increase in its net sales to Rs281.8 crore in Q3FY2008. The sales growth was in line with our expectations and was driven by a 32% rise in the domestic business and a 14% growth in the exports.
- After a subdued performance in Q2FY2008 (on account of lower sales of anti-malarials), Ipca's domestic formulation business resumed its strong momentum. The domestic formulation sales grew by an impressive 32.1% in Q3FY2008, clearly outpacing the industry growth of 12.3%. The strong performance was driven by increased traction seen in the chronic therapy segments of cardiovascular, diabetology and arthritis.
- Ipca's formulation exports grew by 19.2% to Rs86.4 crore during the quarter. This was on the back of a strong performance in Europe, on account of new product approvals received during H1FY2008. The African, Asian and Commonwealth of Independent States (CIS) markets also performed well. The performance seems impressive when viewed in light of the ~12-13% appreciation in the rupee against the US Dollar.
- Ipca's active pharmaceutical ingredient (API) business grew by 13.1% to Rs77.0 crore in Q3FY2008, driven by a 33.3% rise in the domestic API sales and a muted 6.6% growth in the export of APIs. Ipca's API exports have been under pressure over the last few quarters, due to the sharp appreciation in the rupee against the US Dollar. However, Ipca has now initiated the process of raising prices across some of the key products and remains confident of a much improved performance in the coming quarters, given the strong order visibility.
- Ipca's operating profit margin (OPM) expanded by 40 basis points to 21.8% in the quarter. The expansion in the margin was driven by a 100-basis-point drop in the staff cost and a 150-basis-point reduction in the other expenses. Consequently, the operating profit grew by 23.7% to Rs61.6 crore in Q3FY2008.
- Ipca's pre-exceptional net profit increased by 12.8% to Rs38.3 crore and was in line with our estimate. The growth in the net profit was restricted due to a sharp reduction in the other income. On the other hand, the net profit was boosted by an 80-basis-point drop in the tax incidence of the company.
- At the current market price of Rs638, Ipca is discounting its FY2008E earnings by 10.6x and its FY2009E earnings by 8.7x. The valuations at these levels seem absolutely compelling when viewed in context of the strong growth potential that awaits the company. We retain our positive stance on the stock and maintain our Buy call with a price target of Rs875.
Lupin
Cluster: Apple Green
Recommendation: Buy
Price target: Rs840
Current market price: Rs515
Another strong quarter
Result highlights
- Lupin's consolidated revenues increased by 43.8% year on year (yoy) to Rs721.3 crore in Q3FY2008. The growth in the top line was above our expectations and was driven by a 25.3% growth in the domestic formulation business, an appreciable 169.8% jump in the export of formulations to advanced markets and the consolidation of the recent acquisitions. Excluding the impact of the acquisitions (which contributed Rs65-70 crore collectively during the quarter), the like-to-like growth stood at ~30% yoy.
- Lupin's consolidated operating profit margin (OPM) shrank by 40 basis points yoy to 16.8% in Q3FY2008, led by a 50-basis-point rise in the other expenses. The operating profit grew by 40.8% to Rs121.5 crore in the quarter.
- The company received Euro 20 million from the sale of its Perindopril patent rights to Laboratories Servier of France, which boosted the other income and the net profit substantially. As a resultant, the net profit level grew by a whopping 191.6% to Rs180.9 crore in Q3FY2008. The profit growth was way above our expectation of Rs149 crore. Excluding the impact of the Euro 20 million received from the sale of the Perindopril patent rights and its associated tax impact, the net profit grew by approximately 70% yoy.
- With Lupin still awaiting the approval of US Food and Drug Administration (USFDA) for generic Altace, the exclusivity opportunity for Lupin remains uncertain, as Cobalt (the first-to-file for generic Altace) has already launched the product in the USA towards the end of December, thus triggering off the 180-day exclusivity period. While the management is confident of securing a sizeable time period of limited competition to benefit out of the Altace opportunity, any delay in the USFDA resolution could significantly restrict Lupin's window of opportunity. The USFDA resolution and clarity on the launch would act as a near-term catalyst for the stock.
- At the current market price of Rs515, Lupin is discounting its FY2008E earnings by 14.4x and its FY2009E earnings by 11.7x. Keeping in mind the strong business fundamentals and the growth potential of the company, we reiterate our Buy recommendation on Lupin with a price target of Rs840.
Sanghvi Movers
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Under review
Current market price: Rs290
Q3FY2008 results: First-cut analysis
Result highlights
- For Q3FY2008 Sanghvi Movers Ltd (SML) has reported a spectacular growth of 65.4% in its top line to Rs64.4 crore. The growth is above our expectation.
- The operating profit of the company grew by 66.9% to Rs46.9 crore during the quarter. The operating profit margin improved by 60 basis points to 72.8% as against 72.2% in Q3FY2007.The operating profit margin for the company has been improving on the back of better capacity utilisation and lower maintenance cost.
- The interest cost increased by 13.2% to Rs7.5 crore while, the depreciation charge was up 33.3% to Rs11.7 crore in Q3FY2008.
- The profit after tax grew by a whopping 111.2% to Rs17.8 crore, which is way above our expectation. The robust top line growth and stable operating performance led to a strong growth in the profits of the company.
- The company plans to acquire100 cranes at a total cost of Rs550 crore over the next 18 months. These will include 72 second hand cranes from the USA worth Rs160 crore, mainly for the use of the power sector.
Marico
Cluster: Apple Green
Recommendation: Buy
Price target: Rs70
Current market price: Rs60
Q3FY2008 results: First-cut analysis
Result highlights
- Marico's sales growth in Q3FY2008 was in line with our expectations. The company posted a strong top line growth of 23.7% year on year (yoy) in Q3FY2008 to Rs506.2 crore aided by an impressive performance across businesses. The impressive top line growth was a result of a 19% organic growth and a 5% inorganic growth.
- Affected by a hefty 34% year-on-year increase in the staff cost and a higher than expected increase in the other expenses (up 32.9% yoy to Rs81.2 crore) the operating profit margin declined by 79 basis points to 12.68%. Thus, the operating profit grew by 16.4% yoy to Rs64.2 crore.
- The raw material cost was under check as copra prices during the quarter were lower by about 10-12% yoy. However, the input cost for edible oils continued to rise and was up 20-30% across categories.
- A much higher other income of Rs7.53 crore (against Rs0.33 crore in Q3FY2007) and a lower tax incidence aided a strong 81% rise in the adjusted net profit to Rs50.2 crore.
- The company changed the method of charging depreciation on factory building that led to a one-time charge of Rs4.29 crore; after this the reported net profit stood at Rs45.9 crore, which was up 61.5% yoy.
- Marico continues to implement its three-pronged growth strategy of enhancing the existing products, introducing new products and achieving inorganic growth through acquisitions. During the quarter it entered the South African ethnic hair care and health care markets by acquiring the consumer division of Enaleni Pharmaceuticals, which has an annualised turnover of ~Rs53 crore.
- We remain positive on Marico's businesses and maintain our Buy recommendation on the stock with a price target of Rs70. At the current market price of Rs59.7 the stock trades at 17.9x our FY2009E earnings per share of Rs3.34.
Punjab National Bank
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs675
Current market price: Rs618
Q3FY2008 results: First-cut analysis
Result highlights
- For Q3FY2008, Punjab National Bank (PNB) reported a profit after tax (PAT) of Rs541 crore, beating our estimate of Rs502 crore. The Q3FY2008 PAT indicates a growth of 26% year on year (yoy), but remains largely flat on a quarter-on-quarter (q-o-q) basis.
- The quarterly performance at the net interest income (NII) level was lacklustre, with reported NII registering a 1.5% decline yoy and a growth of 10.3% quarter on quarter (qoq). The disappointing NII performance was primarily due to the net interest margin (NIM) contraction yoy coupled with a moderate growth in the advances.
- On a year-on-year (y-o-y) basis, NIM continued to remain under pressure. The calculated NIM for Q3FY2008 was 3.2% compared with 3.8% for the year-ago period and 3.2% for the previous quarter. The y-o-y decline of 58 basis points in NIM was due to the higher cost of funds (up 106 basis points yoy), which outweighed the 48-basis-points y-o-y improvement in the yield on funds. The reported NIM for the quarter stood at 3.66% compared with 3.85% for the year-ago period.
- Meanwhile, the non-interest income jumped by 49.6% yoy to Rs483 crore. Of the total non-interest income, treasury income contributed Rs134 crore.
- The rise in the operating expenses was contained at 12.8% yoy compared with a 22.4% growth in H1FY2008. The increase in the operating expenses was driven equally by the staff expenses and the other operating expenses. However, the resulting operating profit grew by a weak 3.6% yoy.
- Despite the weak operating profit growth, the PAT grew substantially, mainly due to a significant 56% y-o-y decline in provisioning.
- Advances at the end of the quarter stood at Rs101,534 crore indicating a growth of 15.8% yoy, while remaining flat on a q-o-q basis. The growth in advances was primarily due to a strong growth of 28% yoy in retail advances (excluding trade advances) and a healthy growth in agricultural advances. Meanwhile, the deposits grew by a healthy 17.2% yoy to Rs152,622 crore. Currently, the management's focus area is controlling the quality of the existing advances book and not the advance growth per se.
- Asset quality improved sequentially as evidenced by a 28% q-o-q decline in gross non-performing assets (GNPA) to Rs1,339 crore and a 10% decline in net non-performing assets (NNPA) to Rs4,251 crore. While the sequential improvement in asset quality is a positive, the NPA levels (%GNPA of 4.1%, %NNPA of 1.3%) are still high compared with peers in public and private sector banking space.
- Capital adequacy ratio (CAR) as on December 2007 stood at a comfortable 14% compared with 12.6% in September 2007 and 12.9% in December 2006.
Labels:
IPCA Labs,
Lupin,
Marico,
PNB,
Research Report,
Sanghvi Movers
DP Group! | Facebook | Twitter
Subscribe to:
Posts (Atom)