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Monday, February 04, 2008
NSE Bulk Deal Watch - Feb 4 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
04-FEB-2008,ARIES,Aries Agro Limited,WF INDIA RECONNAISSANCE FUND LTD,BUY,150000,170.00,-
04-FEB-2008,BHARTISHIP,Bharati Shipyard Limited,SBI MUTUAL FUND,BUY,400000,625.00,-
04-FEB-2008,GTL,GTL Limited,INDEA CAPITAL PTE LTD-INDEA ABSOLUTE RETURN FUND,BUY,500000,260.00,-
04-FEB-2008,HORIZONBAT,HORIZON BATTERY TECH. LTD,RAJESH SHARMA ,BUY,300000,205.05,-
04-FEB-2008,KHAITANELE,Khaitan Electricals Ltd,ACCORD CAPITAL MARKETS LIMITED,BUY,100000,96.00,-
04-FEB-2008,KHANDSE,Khandwala Sec. Ltd,VICCO PRODUCTS BONBAY LTD.,BUY,59999,71.70,-
04-FEB-2008,MADHAV,Madhav Marbles and Granit,SHRIPAL SHARES AND SECURITIES LIMITED,BUY,46000,74.40,-
04-FEB-2008,RPGLS,Searle (India) Ltd,LOTUS GLOBAL INVESTMENTS LIMITED,BUY,110000,84.50,-
04-FEB-2008,ARIES,Aries Agro Limited,LAVINA A GOENKA,SELL,136711,170.01,-
04-FEB-2008,BHARTISHIP,Bharati Shipyard Limited,BLACKSTONE ASIA ADVISORS L L C A/C THE INDIA FUND INC,SELL,574500,625.14,-
04-FEB-2008,GOLDTELE,Goldstone Teleservices Lt,RJL INFRASTRUCTURE PVT LTD,SELL,255000,44.15,-
04-FEB-2008,HORIZONBAT,HORIZON BATTERY TECH. LTD,KROSSLINK INFRASTRUCTURE LIMITED,SELL,300000,205.05,-
04-FEB-2008,KHAITANELE,Khaitan Electricals Ltd,RACHNA VINIMAY PVT LTD,SELL,100000,96.00,-
04-FEB-2008,KHANDSE,Khandwala Sec. Ltd,SHREEPATI HOLDINGS AND FINANCE PVT. LTD.,SELL,60000,71.70,-
04-FEB-2008,MADHAV,Madhav Marbles and Granit,MEENAKSHI JATIA,SELL,76889,74.34,-
04-FEB-2008,RPGLS,Searle (India) Ltd,SANTOSH INDUSTRIES LTD,SELL,110000,84.50,-
BSE Bulk Deals to Watch - Feb 4 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
4/2/2008 531247 ALPHA HI-TEC MAGUNTA RAGHAV S 53461 3.81
4/2/2008 500029 AUTOLITE INE ACCORD CAPITAL MARKETS LTD B 150100 100.00
4/2/2008 500029 AUTOLITE INE MICRO MANAGEMENT LTD S 50000 100.00
4/2/2008 505506 AXON INFOTEC RUPAK DEVELOPERS PRIVATE LIMIT B 39919 54.00
4/2/2008 531591 BAMPSL SECUR JMP SECURITIES PVT. LTD. B 512260 1.99
4/2/2008 531591 BAMPSL SECUR PUNEET GARG S 660000 1.99
4/2/2008 512332 BIRLA CAP AYODHYAPATI INVESTMENT PVT LTD S 51150 13.05
4/2/2008 531671 BISLERI GUJ JMP SECURITIES PVT. LTD. S 336428 4.44
4/2/2008 531682 CAT TECHNOL SHASHIKANT SONU PAWAR B 264000 9.76
4/2/2008 531682 CAT TECHNOL SARFARAZKHAN SARVARKHAN PATHAN B 510353 10.01
4/2/2008 531682 CAT TECHNOL SARFARAZKHAN SARVARKHAN PATHAN S 508028 10.04
4/2/2008 532363 COMP-U-LEARN NARENDRA VELJI SHETHIA HUF B 63750 19.00
4/2/2008 526033 CRYSTAL SOFT RICHLINE FINVEST P LTD S 25300 8.64
4/2/2008 532271 CYBERMAT INF SARFARAZKHAN SARVARKHAN PATHAN B 730545 11.02
4/2/2008 532271 CYBERMAT INF SARFARAZKHAN SARVARKHAN PATHAN S 869664 11.10
4/2/2008 531750 ENCORE SOFT ALPESH A DOSHI B 44380 20.85
4/2/2008 531750 ENCORE SOFT HINGLAJ ENTERPRISE S 44380 20.85
4/2/2008 526560 ENGLISH I.CL VISHAL TANSUKHLAL MINDA S 23962 2018.75
4/2/2008 531486 FILMCIT MEDI JMP SECURITIES PVT. LTD. S 502378 1.97
4/2/2008 532439 GOLDSTN TELE RJL INFRASTRUCTURE PRIVATE LIMITED S 245000 44.15
4/2/2008 531913 GOPAL IRON PIYUSH M PARIKH B 44000 11.91
4/2/2008 517372 GUJ.INTRUX ZIELLE VENTURES PRIVATE L S 21059 43.31
4/2/2008 531025 INCA FINLEAS MAHARASHTRA OVERSEAS LIMITED B 17500 154.25
4/2/2008 517250 INTEGRA HIND PATHPIONEER MANG.SER.PVT.LTD B 5500 277.36
4/2/2008 530405 JINDAL CAP. JMP SECURITIES PVT. LTD. S 16181 47.17
4/2/2008 507870 LLOYD FINANC JMP SECURITIES PVT. LTD. S 201661 4.16
4/2/2008 501209 MAST MEDI SY BAKLIWAL FINANCIAL SERVICES INDIA PVT LTD B 23895 64.15
4/2/2008 508989 NAVNEET PUBLICATIONS (I) LTD. NOTZ STUCKI ET CIE S A AC ARUNA FUND B 3362000 125.15
4/2/2008 508989 NAVNEET PUBLICATIONS (I) LTD. RELIANCE CAPITAL TRUSTEE CO LTD AC REL LONG TERM EQ FUND S 3433650 125.01
4/2/2008 532086 OCEAN INFRST JMP SECURITIES PVT. LTD. S 50771 5.89
4/2/2008 521246 PARAS PETROF JMP SECURITIES PVT. LTD. S 1002281 2.63
4/2/2008 532606 PAREKH ALUM U P SHAH HUF B 90000 198.94
4/2/2008 532606 PAREKH ALUM KAMLESH M KANUNGO B 50000 192.00
4/2/2008 532606 PAREKH ALUM U P SHAH HUF S 90000 192.00
4/2/2008 505141 SCOOTERS IND GOVINDBHAI LALJIBHAI KAKADIA S 18984 25.50
4/2/2008 511754 SHALIBHA FIN REETA JAIN B 26400 13.11
4/2/2008 530155 TONIRA PHARM IPCA LABORATORIES LIMITED B 65000 27.02
4/2/2008 531703 TRIBHVAN HSG MAGNA VANIJYA LTD S 25500 28.20
4/2/2008 531703 TRIBHVAN HSG KAILASHPATI FOREST PVT LTD S 41500 28.20
4/2/2008 504605 UNIABEX AL P RAJIV ARORA S 11772 138.18
Market Close: good time! Will this hold?
It was a Good day of strength for Indian markets coupled with favorable cues from the global markets. Following to the Friday?s momentum Indian markets continued with a gap-up and the Sensex mount to gain more than 500+ points. Value buying was seen in sectors like Realty, IT, Capital goods and Metal space. Post opening indices traded extremely strong and stable, gripped to its gains for most of the day. But after mid session profit booking kept the indices down from high level. However the value buying at lows fueled the recovery and ended with a big gain for the day. Mid and Small caps were in focus and the indices ended with good gains of nearly 3% in line with the frontline indices. Oil Marketing Companies buzz the news that cabinet may hike fuel prices, as result of this stock rallied for the day. Asian indices closed in the green with a big gain from Shanghai (+8.13%), Hang Seng (+3.77%) and Nikkei (+2.69%) while the European markets witnessing a positive trade.
Alok Industries (Alok) quarterly numbers for December ended 2007 were in line with the expectations. Topline for the quarter grew by 15% yoy to Rs 551 Cr. Exports sales during the quarter grew by 62% to Rs 251 Cr from Rs 155 Cr during the corresponding quarter last year while sales were comparatively down. Ebidta margins witnessed healthy growth to 24.5%. Increase in export sales of value added products helped out the growth. Going forward margins are expected to grow after new capacities come on stream. Net profit margins grew marginally up by 120 bps for this quarter on YoY basis. The progress on the company's ongoing expansions under Phase-III and Phase - IV are progressing satisfactorily and are likely to be completed as per schedule. Alok is also hiking its holding in Mileta International by acquiring an additional 19.80% stake in Mileta International for 1.75 mn Euro thereby taking its stake in Mileta to 79.80%. Valuations are good for the textile company which is now restructuring itself and focusing more on each segment. Expect a detailed note on the numbers and re-structuring exercises done by the company very soon. Stock ended up by 14%.
Rcom today reported that it will come out with Tower business IPO Reliance Infratel, The issue will constitute 10.05% of the post-issue paid-up capital of Reliance Infratel. At least 30% of the issue shall be available for allocation on a proportionate basis to retail bidders. The company's business is to build, own and operate telecommunication towers and related assets at designated sites and to provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other communications service providers under long-term contracts. These customers use the space on the company's telecommunication towers to install their active communication-related equipment to operate their wireless communications networks. The issue proceeds will be utilized to finance the development of passive infrastructure sites and for general corporate purposes. With the valuation on the towering business of new entity Rcom surged higher on the back of same news and ended higher by 14% for the day.
Technically Speaking: Market traded strong with positive market breadth and favorable external cues. Volume was relatively muted today at Rs 5743 Cr. The breadth was in favor of advances as there were 2325 advances against 635 Declines. Sensex seems headed towards our target of 19200. The immediate resistances are at 18850 and 19020. Supports at 18480 and 18230 levels.
Post Market Commentary - Feb 4 2008
The market galloped during the trading session to close with handsome gains on the back of heavy buying across the sectoral indices scrips. The market opened on a firm note taking the favoring cues from the global markets and march forward to gains further grounds during the session. But the market lost some of its gains after the mid session as the market was unable to sustain at higher levels due to selling pressures. The Mid Caps and Small Caps also joined the rally of the benchmark indices as they also faced most buying across the counters. Almost all the sectoral indices closed in green.The BSE Sensex closed higher by 417.74 points at 18,660.32 while NSE Nifty closed up by 146.25 points at 5,463.50. The BSE Mid Cap and Small Cap indices also closed higher by 243.37 points and 289.46 points at 8,004.91 and 10,361.78 respectively.
BSE Metal index closed higher by 528.03 points at 16,438.19. Scrips that grew are JSW Steel (10.95%), Sesa Goa (7.21%), Ispat Inds (6.25%), Bhushan Steel (3.75%), Sterlite Inds (3.98%) and Tata Steel (3.39%).
BSE Oil & Gas index grew by 270.51 points to close at 11,293.36. Gainers are BPCL (12.44%), Aban Offshore (8.31%), IOCL (6.51%), HPCL (5.41%), Cairn India (4.83%).
BSE Auto index closed up by 102.83 points at 5,107.70 as Ashok Leyland (6.89%), Hero Honda (6.21%), Escorts (5.69%), MRF (3.90%), Amtek auto (3.70%), M&M (3.24%) and Tata Motors (2.07%) closed in green.
BSE Bankex index advanced by 220.64 points to close at 11,110.91. Scrips that rallied are Oriental bank (9.13%), Union bank (8.56%), IOB (8.21%), Canara bank (7.95%), PNB (7.91%).
BSE Realty index increased by 644.13 points to close at 10,513.46. Scrips that surged are Purvankara (13.89%), DLF (8.54%), Sobha Dev (8.46%), Indbul Real (7.61%), HDIL (6.46%), Parsvnath (6.08%).
BSE IT index rose by 163.34 points to close at 4,097.61 as Rolta India (23.68%), Educomp Soln (14.45%), Mphasis (11.33%), Tech Mahindra (6.44%), Wipro (6.16%), I-Flex (5.60%) and TCS (5.03%).
Strong global cues trigger rally
All-round buying continued for the second straight session, with the Sensex gaining nearly 400 points during the intra-day trades on strong global cues. Riding on the back of firm Asian indices, the Sensex resumed 250 points higher at 18,496 and soon edged past 18,895 in the early trades. While the market remained buoyant above 18,400 levels for the most part, buying accelerated towards the close with gains in heavyweights, realty, technology, information technology (IT), and public sector unit (PSU) stocks lifting the index to an intra-day high of 18,895. The Sensex closed the session with gains of 418 points at 18,660, while the Nifty advanced 157 points at 5,463.
The breadth of the market was positive. Of the 2,844 stocks traded on the BSE, 2,270 stocks advanced, 536 stocks declined and 38 stocks ended unchanged. All the sectoral indices had a decent outing. The BSE Reality index led the pack and soared 6.53% at 10,513 followed by the BSE Teck (up 4.48% at 3,573), the BSE IT index (up 4.15% at 4,097), the BSE PSU index (up 3.36% at 8,658) and the BSE Metal index (up 3.32% at 16,538).
Among the heavyweights, Reliance Communications vaulted 11.96% at Rs685, DLF rose 8.54% at Rs883, Wipro scaled up 6.16% at Rs464, TCS jumped 5.03% at Rs976, NTPC moved up by 4.36% at Rs214.45, SBI advanced 3.93% at Rs2,271, Satyam flared up 3.85% at Rs437.25 and Ranbaxy spurted 3.75% at Rs373. However, HDFC Bank, Maruti, BHEL and Reliance Energy inched marginally lower.
Realty stocks notched up significant gains. Puravankara flared up 13.89% at Rs361.15, Sobha Developers spurted 8.46% at Rs810, Indiabulls Reality scaled up 7.61% at Rs678.60 and HDFC added 6.46% at Rs978. In the tech segment, Rolta surged 23.68% at Rs312.30, Reliance Communications jumped 11.96% at Rs685, Mphasis appreciated by 11.33% at Rs274.70 and Tata Teleservices advanced 9.67% at Rs38.55. TV18, Tech Mahindra, Wipro, Adlabs, I-Flex and TCS moved up by over 4-6% each.
Sensex vaults 418 points as Asian markets rally; Reliance Communications surges
The market surged for the second straight day in volatile trade on continued buying support in index pivotals. The market had soared in afternoon trade extending early gains as Asian stocks rose with sentiment boosted by Microsoft Corp's bid for Yahoo Inc and following China's buy of a large stake in takeover target Rio Tinto. However, it turned volatile in mid-afternoon trade and pared some gains as two index heavyweights Reliance Industries and ICICI Bank eased from day’s highs.
The market breadth was strong. 26 from the 30-member Sensex pack were in the green.
European markets, which opened after Indian markets, were trading slightly higher.
Reliance Power, which raised a record $3 billion in its initial share sale in January 2008, said on Friday, 1 February 2008, it had begun refunding excess application money to investors. The initial public offer had received bids for $190 billion.
The Finance Ministry on Friday, 1 February 2008 sought views from the public and other stakeholders on a set of measures proposed to strengthen the existing listing requirements. The Government now proposes to stipulate a public stake of 25% for a company to be listed and to continue to be listed on the stock exchanges.
The 30-share BSE Sensex rose 417.74 points or 2.29% at 18,660.32. It opened 253.45 points higher at 18,496.03 and surged to hit a high of 18,895.34 in afternoon trade. At day’s high it gained 652.76 points. It slipped to day’s low of 18,439.33 in mid-afternoon trade, when the Sensex was up 204.67 points for the day.
The broader CNX S&P Nifty was up 146.25 points or 2.75% at 5,463.50. Nifty February 2008 futures were at 5478, a premium of 14.50 points as compared to spot closing.
The BSE Mid-Cap index was up 3.14% to 8,004.91, while the BSE Small-Cap was up 2.88% at 10,362.37. Both these indices outperformed the Sensex
The market breadth was strong on BSE: 2264 shares advanced as compared to 551 that declined. 36 stocks remained unchanged.
The total turnover on BSE amounted to Rs 5743 crore as compared to Rs 5,578.94 crore on Friday, 1 February 2008
The total turnover on NSE’s futures & options segment amounted to Rs 40169.33 crore as compared to Rs 35830.69 crore on Friday, 1 February 2008
All sectoral indices on BSE settled higher. BSE Metal index (up 3.32% to 16,438.19), BSE IT index (up 4.15% at 4,097.61), BSE TecK index (up 4.48% to 3,573.55), BSE Oil & Gas index (up 2.45% at 11,293.36), BSE Power (up 2.58% to 3,890.57), BSE Realty index (up 6.53% at 10,513.46), BSE PSU index (up 3.36% to 8,658.29), outperformed the Sensex
BSE Auto (up 2.05% at 5,107.70), BSE FMCG index (up 0.87% at 2,244.44), BSE Consumer Durables index (up 0.67% to 5,155.67), BSE Health Care index (up 1.77% at 3,707.06), BSE Bankex (up 2.03% at 11,110.91), BSE Capital Goods index (up 2.21% at 16,797.31), underperformed the Sensex
India’s second largest listed telecom firm by sales Reliance Communications (RCom) galloped 13.01% to Rs 691.40 on 35.23 lakh shares. It was the top gainer from Sensex pack. Reliance Infratel, a subsidiary of RCom has filed its draft red herring prospectus for an initial public offer (IPO) with the Securities and Exchange Board of India (Sebi). The company will offer 8,91,64,100 shares of Rs 5 each for cash, constituting 10.05% of its post-issue paid-up equity capital.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 2.22% to Rs 2598.20. 6.93 lakh shares changed hands on the counter on BSE. The stock moved in a range of Rs 2562 and Rs 2643 during the day.
ICICI Bank, the country’s largest private sector bank in terms of net profit slipped from day’s high of Rs 1245.20. It was up 1.11% to Rs 1211.
Among the mid-cap state run banks, Andhra Bank (up 4.57% to Rs 96.20), Bank of Baroda (up 3.76% to Rs 421), Bank of India (up 3.68% to Rs 377.60), Canara Bank (up 7.25% to Rs 317.20), Oriental Bank of Commerce (up 10.44% to Rs 273.50) and Vijaya Bank (up 4.61% to Rs 69.25), surged
DLF, the largest real estate developer in terms of market capitalisation advanced 9.89% to Rs 894. The stock will replace Glaxosmithkline Pharmaceuticals, in S&P CNX Nifty index from 14 March 2008.
Other shares from real estate sector, Unitech (up 5.77% to Rs 394.30), Sobha Developers (up 8.46% to Rs 810.10) and HDIL (up 7.42% to Rs 987), also logged gains
IT stocks extended Friday (1 February 2008)’s gains after Microsoft on Friday made a $45 billion bid for Yahoo Inc. Infosys Technologies (up 3.39% to Rs 1645), TCS (up 4.17% to Rs 968.10) and Satyam Computers (up 3.33% to Rs 435.05), gained.
India’s third largest software services exporter Wipro soared 6.11% to Rs 464 on reports the company plans to build electronic warfare systems, radars and flight simulators locally for US defence contractors.
Shares from mid-cap IT pack - i flex Solutions (up 6.56% to Rs 1135), Tech Mahindra (up 6.61% to Rs 799), Rolta India (up 25.95% to Rs 318), NIIT Technologies (up 3.10% to Rs 114.75), and Polaris Sofware Lab (up 5.25% to Rs 90.40), also joined the rally
Tata Motors, the country’s largest truck manufacturer in terms of sales, rose 2.10% to Rs 770.05. It reported a 11.76% fall in its passenger car sales in the domestic market during January 2008 at 20,119 units compared with 22,801 units in the same month a year ago.
Steel stocks were in action on reports of price hike. Tata Steel gained 3.93% to Rs 807, and Steel Authority of India (Sail) rose 2.26% to Rs 231. Tata Steel has increased the prices of hot rolled (HR) coils by Rs 2,000-2,500 per tonne, while Steel Authority of India Ltd (Sail) has hike prices by Rs 1,500-2,500 per tonne.
India’s largest oil exploration company in terms of market capitalisation Oil & Natural Gas Corporation (ONGC) saw high volatility today. It slipped sharply from day’s high of Rs 1121.90 to day’s low of Rs 1032. It settled 1.87% higher at Rs 1064. As per reports, British oil major British Gas is all set to pick up a 30% stake in ONGC’s Krishna Godawari basin block and 25% in Mahanadi basin block.
India’s top small car maker in terms of sales Maruti Suzuki India slipped 1.30% to Rs 893. It was the top loser from Sensex pack. The stock slipped from day’s high of Rs 924.90. The company has raised prices of many of its models by Rs 1,000 to Rs 11,000 per unit.
Reliance Energy (down 0.69% to Rs 2001), ITC (down 0.17% to Rs 2040.50), HDFC Bank (down 1.03% to Rs 1551.10), were the other losers from Sensex pack.
Future Capital Holdings was the most active counter on BSE with a turnover of Rs 533.35 crore followed by Reliance Communication (Rs 234.93 crore), Reliance Natural Resources (Rs 215.23 crore), Reliance Energy (Rs 202.15 crore) and Reliance Industries (Rs 180.93 crore) in that order.
Ispat Industries led the volume chart with trades of around 1.87 crore shares followed Reliance Natural Resources (1.49 crore shares), Tata Teleservices (Maharashtra) (97 lakh shares), Reliance Petroleum (92 lakh shares) and IFCI (85.50 lakh shares), in that order
Shares from sugar pack surged on momentum buying. Dwarikesh Sugar (up 5% to Rs 83.15), Sakthi Sugar (up 5.40% to Rs 79.10), Triveni Engineering (up 9.38% to Rs 140), Balrampur Chini Mills (up 12.51% to Rs 88.15), Shree Renuka Sugars (up 4.36% to Rs 930), and Bajaj Hindustan (up 9.37% to Rs 229.40) surged.
Shares of oil marketing companies gained on reports that Centre is likely to take a decision on increasing petrol and diesel prices today Monday, 4 February 2008. Hindustan Petroleum Corporation (up 5.39% to Rs 276.50), Bharat Petroleum Corporation (up 12.61% to Rs 433.20), and Indian Oil Corporation (up 6.83% to Rs 525.90), edged higher
Hero Honda Motors rose 4.47% to Rs 757. It reported 31.4% rise in net profit to Rs 275.01 crore on 3.5% growth in total income to Rs 2795.17 crore in Q3 December 2007 over Q3 December 2006. The results were announced after market hours on 31 January 2008.
EID Parry (India) rose 3.51% to Rs 182 after the company’s board decided to withdraw an offer to buyback shares. The company had earlier announced a plan to buy back up to 25% of its paid-up capital and free reserves at a maximum price of Rs 160 per share.
Ramsarup Industries gained 4.33% to Rs 199 after the company said it has increased prices of steel wires in range of Rs 3500 per metric tonnes to Rs 4000 per metric tonnes with immediate effect.
Walchandnagar Industries surged 4.79% to Rs 5725 on setting 3 March 2008 as record date for a 5-for-1 stock split and a 1:1 bonus issue.
McNally Bharat Engineering Company rose 5% to Rs 241.25 after it received an order worth Rs 198.44 crore from Uranium Corporation of India for Tummalapalle project in the state of Andhra Pradesh.
Puravankara Projects jumped 15.41% to Rs 366 on reports the company plans to raise Rs 2000 crore from private equity firm by selling 49% stake in five of its real estate projects.
Deep Industries gained 4.99% to Rs 157.90 after it signed memorandum of understanding with Indian Oil Corporation for exploring the possibility of joint development of two coal bed methane (CBM) blocks and three marginal gas fields and marketing of gas.
Prithvi Information Solutions spurted 7.26% to Rs 329.45 after the company received an order worth Rs 309 crore for supply of transmission equipment to state-run Bharat Sanchar Nigam.
Elecon Engineering Company advanced 9.50% to Rs 219 on bagging an order worth Rs 11 crore from Sichaon Electricity Power Design & Consulting Company, Chandrapur, Maharashtra for supplying wagon tipplers.
European markets, which opened after Indian markets, were trading slightly higher. Key benchmark indices in United Kingdom (up 0.01% to 6,029.60), Germany (up 1.04% to 7,041.80), and France (up 0.16% to 4,985.91), advanced
Asian markets, which opened before Indian markets were trading higher. Hong Kong's Hang Seng (up 3.77% to 25,032.08), Japan's Nikkei (up 2.69% to 13,859.70), Singapore's Straits Times (up 2.30% to 3,077.80), South Korea's Seoul Composite (up 3.40% to 1,690.13), and China’s Shanghai Composite (up 8.13% to 4,672.17), all edged higher
US stocks rose on Friday, 1 February 2008 capping Wall Street's best week in almost five years, after Microsoft Corp's $44.6 billion bid for Yahoo Inc overshadowed news that employers cut payrolls for the first time since 2003.
The Dow Jones industrial average finished up 92.83 points, or 0.73% to 12,743.19. The Standard & Poor's 500 Index gained 16.87 points, or 1.22%, to 1,395.42. The Nasdaq Composite Index shot up 23.50 points, or 0.98% to 2,413.36.
Chalco, a unit of China’s state-owned Chinalco teamed up with US aluminium producer Alcoa Inc to buy a $14 billion stake in Rio, threatening BHP Billiton’s efforts to acquire Rio.
George Soros - Investing Quotes
Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.
If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.
The main difference between me and other people who have amassed this kind of money is that I am primarily interested in ideas, and I don't have much personal use for money. But I hate to think what would have happened if I hadn't made money: My ideas would not have gotten much play.
The prevailing wisdom is that markets are always right. I take the opposition position. I assume that markets are always wrong. Even if my assumption is occasionally wrong, I use it as a working hypothesis. It does not follow that one should always go against the prevailing trend. On the contrary, most of the time the trend prevails; only occasionally are the errors corrected. It is only on those occasions that one should go against the trend. This line of reasoning leads me to look for the flaw in every investment thesis. ... I am ahead of the curve. I watch out for telltale signs that a trend may be exhausted. Then I disengage from the herd and look for a different investment thesis. Or, if I think the trend has been carried to excess, I may probe going against it. Most of the time we are punished if we go against the trend. Only at an inflection point are we rewarded.
Trading Calls - Feb 4 2008
Nifty (5317) Supp 5200 Ress 5450
RCOM (611) SL 605
Target 625, 630
Hindalco (177) SL 173
Target 187, 190
HCL Tech (265) SL 260
Target 275, 278
Sell Birla Corp (218) SL 222 Target 209, 206
Sell Allahabad Bk (112) SL 116 Target 103, 101
Market likely to move up on global cues
The market is expected to extend Friday (1 February 2008)’s solid surge tracking firm Asian markets. Asian stocks surged on Monday, 4 February 2008, with sentiment boosted by Microsoft Corp's bid for Yahoo Inc and following China's buy of a large stake in takeover target Rio Tinto.
Microsoft's $44.6 billion deal for Yahoo overshadowed unexpected weakness in US employment data on Friday, helping to boost optimism about company valuations after the recent stock market sell off.
Meanwhile, in another development, Chalco, a unit of China’s state-owned Chinalco teamed up with US aluminium producer Alcoa Inc to buy a $14 billion stake in Rio, threatening BHP Billiton’s efforts to acquire Rio. Key benchmark indices in Hong Kong, China, Japan, Singapore and South Korea were up by between 2.2% to 6.3%.
US stocks rose on Friday, capping Wall Street's best week in almost five years, after Microsoft Corp's $44.6 billion bid for Yahoo Inc overshadowed news that employers cut payrolls for the first time since 2003. The Dow Jones industrial average finished up 92.83 points, or 0.73% to 12,743.19. The Standard & Poor's 500 Index gained 16.87 points, or 1.22%, to 1,395.42. The Nasdaq Composite Index shot up 23.50 points, or 0.98% to 2,413.36.
Foreign institutional investors sold shares worth a net Rs 126.93 crore on Friday, 1 February 2008. Domestic institutions sold shares worth a net Rs 115.4 crore on that day.
FIIs were net buyers to the tune of Rs 1,746.15 crore in the futures & options segment on Friday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 1,266.09 crore and bought index options worth Rs 293.35 crore. They were net buyers of stock futures to the tune of Rs 195.57 crore and sold stock options worth Rs 8.85 crore.
Meanwhile, the Finance Ministry on Friday sought views from the public and other stakeholders on a set of measures proposed to strengthen the existing listing requirements. The Government now proposes to stipulate a public stake of 25% for a company to be listed and to continue to be listed on the stock exchanges.
Pre Market Watch - Feb 4 2008
The Indian Market is likely to have a positive opening due to strong favoring cues from the global markets. On Friday, the market closed on an upbeat note tracking favoring cues from the global markets. Heavy buying across the counters led the benchmark indices to beat its four day losing trend. Further the smooth expiry of January 2008 derivatives contracts also gave a boost. The market opened on a firm note but lost the grip soon t but later on gathered the momentum towards the mid session to close with handsome gains. Whereas the Mid cap and Small Cap failed to attract the investors confidence as most selling was seen from these baskets. Inflation based on the wholesale price index (WPI) rose to 3.93% for the week ended 19 January 2008 from 3.83% in the previous week. The BSE Sensex closed higher by 584.71 points at 18,233.42 while NSE Nifty closed up by 179.8 points at 5,317.25. We expect that the market may some see some bull run during the trading session
On Friday, the US market closed in green. The Dow Jones Industrial Average (DJIA) closed higher by 92.83 points at 12,743.19. S&P 500 index closed up by 16.87 points at 1,395.42 and NASDAQ grew by 23.50 points to close at 2,413.36.
Indian ADRS ended in positive. In technology sector, Satyam grew by (5.78%) along with Infosys by (5.07%) and Wipro by (4.64%). In banking sector, ICICI bank and HDFC bank by (2.47%) and (1.42%) respectively.
The major stock markets in Asia are trading firm. Hang Seng is trading up by 895.53 points at 25,019.11 along with Japan''s Nikkei trading higher by 335.24 points at 13,832.40 and Singapore Starit Times trading at 3,080.03 up by 72.23 points.
The FIIs on Friday stood as net seller in equity. The gross equity purchased was Rs5,323.70 Crore while the gross equity sold stood at Rs8,717.10 Crore. Therefore, the net investment of equity reported was (Rs3,993.40 Crore).
Today, Nifty has support at 5,282 and resistance at 5,439 and BSE Sensex has support at 18,038 and resistance at 18,926.
Morning call - Feb 4 2008
Market Grape Wine :
In House :
Nifty at a base support of 5100 and 5130 with resistance at 5347 above 5400 likely to see 5600 levels .
Buy : REL above 2040 target of 2100 s/l of 2015
Buy : TataMotor above 761 target 785 s/l of 753
Buy : Sail in F&O
Out House :
Markets at a support of 17786 & 18081 levels with resistance at 18484 & 18786 levels .
Buy : RIL & RelCap
Buy : Satyam & INFY
Buy : SBIN & IciciBank
Buy : JPASSO & IndiaGlycol
Buy : Praj & Lupin
Buy : SKumar & aban
Buy : PrimeSec & Geship
Buy : BajaHind & Balrampur
Buy : Tisco & Sail
Dark Horse : Tisco , IndiaGlycol ,Geship , IciciBank , IOlBroad , Aban , , RIL , Sbin , & RELCap
Discounts at Grey Market
Reliance Power 450 150 to 160
Emaar MGF 540 to 630 45 to 50
J. Kumar Infraprojects 110 Discount
Cords Cable Ind. 135 5 to 8
KNR Construction 170 Discount
Onmobile Global 440 20 to 25
Bang Overseas 207 20 to 25
Shriram EPC 290 to 330 Discount
IRB Infra 185 to 220 70 to 75
Wockhardt Hospital 225 to 260 Discount
Manjushree Extrusion 45 2 to 3
Tulsi Extrusions 80 to 85 9 to 11
SVEC Construction 85 to 95 8 to 10
Motivational Monday…missing the blues!
Motivation is what gets you started. Habit is what keeps you going.
Global cues being positive, the bulls sure are motivated to start with a bang. For a change, they surely won’t miss the Monday blues of recent weeks. The carnage has shown that speculators could lose their capital while investors have every chance of making good their losses with a slight change in sentiment. Don’t be surprised if the blue-chips return to their past glory soon.
Friday’s post-lunch rally helped the Sensex and the Nifty surge by 3.3% and 3.5%, respectively. However, small-cap and mid-cap shares remained subdued. The market breadth was negative, calling into question the strength of the rally.
But, the blue chips could well lead the way as things could continue to improve this week and perhaps for the month, spurred by the Fed rate cuts, euphoria over Reliance Power's listing and general optimism ahead of the budget. IT stocks could see some short term buying. The reasons are many and there is buzz that some IT companies may consider a buyback. Remember, it’s just a buzz.
Of course all this could change soon if more bad news comes out of the US or other parts of the world. So, keep an eye on global factors that could derail the nascent recovery across international equity markets. A view is gaining increasing currency that Asia, and particularly India, will be relatively insulated from the impending recession in the US (back to decoupling!).
Europe and other parts of the world, including Japan and China, though will suffer from the US downturn. India stands to gain from the ongoing upheavals, though prolonged weakness across key global economies may continue to play havoc with sentiment. And, given last month's sharp and swift correction, it will take time for confidence and conviction to return on the street. It will be a slow process and laden with periodic bouts of volatility. One could look at selling into any rally if one is not patient enough to hold onto shares for minimum of two years.
Oil marketing companies could be in focus amid growing talk of a small hike in fuel prices. On the other hand, steel companies may see some pressure following Steel Ministry's threat that it will review the across the board price hike announced last week.
Asian markets are doing quite well this morning. The Nikkei in Tokyo was up 335 points at 13,832 while the Hang Seng in Hong Kong rallied 908 points to 25,024. The Kospi in Seoul gained 56 points to 1691 while the Straits Times in Singapore rose 73 points to 3081. The Shanghai Composite in China surged 237 points to 4557 and the Taiex in Taiwan advanced 152 points to 7673.
The MSCI Asia Pacific index climbed 1.5% to 147.30 at 10:07 a.m. in Tokyo, extending a two-day, 2.8% rally. All of the benchmark's 10 industry groups advanced. Benchmarks advanced in all other markets open for trading.
US stocks rallied on Friday, gaining for a second session, as investors welcomed Microsoft's bid for Yahoo and more talk of a bailout for the troubled bond insurer sector. The positive news helped temper worries about a recession following a surprisingly weak January jobs report. All three major stock indices posted gains of about 1% in the early morning trading, dipped into negative territory by mid-morning and then rebounded a bit in the afternoon.
US stock indices also rose on the week after the Fed's second interest rate cut in nine days boosted banks, homebuilders and retailers. The S&P 500 climbed 4.9% for the week, trimming its yearly loss to 5%. The benchmark for US equities has risen for two consecutive weeks after falling 9.8% through Jan. 18, its worst-ever start for a year. The Dow Jones Industrial Average added 4.4% and the Nasdaq Composite climbed 3.8%, boosted by Microsoft's bid for Yahoo!.
Washington Mutual, the largest savings and loan, Lennar Corp., the third-biggest homebuilder, and Wal-Mart helped lead gains. All 10 sectors and 461 stocks in the S&P 500 advanced after the half-point reduction in the Fed's target for overnight loans between banks bolstered speculation that a recession may be averted.
For the Dow and S&P 500 it was the second week in a row this year for posting weekly gains, while for the Nasdaq, it was the first week this year that the average posted a weekly gain.
The drop in interest rates to 3% overshadowed the first decrease in jobs since 2003, the biggest yearly drop in new-home sales on record and fourth-quarter economic growth that was half the rate economists forecast.
The government jobs report, showing that employers trimmed payrolls for the first time in four years set off alarm bells. But the report tells only part of the horror story about the underlying weakness in the US labor market. The number of Americans out of work for at least six months is rising.
And while some economists believe that the drop in jobs reported in January might later be revised to show a narrow gain, it's clear that the rise in long-term unemployment is a far more established trend and won't going away anytime soon.
Long-term unemployment is not just a problem for those struggling to find jobs, according to some economists. It poses a risk for the US economy as a whole and cuts into household earnings and economic output, they say.
Other US economic readings came in mixed. Construction spending dropped 1.1%. The January consumer sentiment index from the University of Michigan was revised down to 78.4 from an initial 79.
On the upside, the Jan. ISM manufacturing index climbed more than expected, rising to 50.7 in the month from 47.7 in the previous month.
Treasury prices gave up gains, with the yield on the 10-year note standing at 3.59%, little changed from where it stood late Thursday. In currency trading, the dollar gained versus the yen and the euro.
US light crude oil for March delivery fell $2.79 to settle at $88.96 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery fell $14.50 to $913.50 an ounce.
European shares posted strong gains on Friday on the back of Microsoft's big takeover bid for rival Yahoo!. Rio Tinto led a rally among resources shares after Chinalco and Alcoa said they had picked up a 12% stake in the mining major.
The pan-European Dow Jones Stoxx 600 index rose 1.9% to 328.41, led by Rio Tinto which climbed 13%. It was a welcome reversal for the index from what was its worst January on record. The UK's FTSE 100 closed up 2.5% at 6,029.20, while the French CAC-40 advanced 2.2% to 4,978.06. The German DAX 30 rose 1.7% to 6,968.67.
In the emerging markets, the Bovespa in Brazil rose 2.7% to 61,079 while the IPC index in Mexico gained 2.2% at 29,429. The RTS index in Russia shot up by 3.25% to 1968 while the ISE National-30 index in Turkey jumped 4.3% to 55,729.
Bulls fly by 18k; IT stocks shine
A Strong show on Wall Street, the Asian markets and positive start in equity markets across Europe lifted the sentiment on Dalal Street on Friday. Although, after a strong start; markets turned choppy in the morning trades on back of profit booking. But this time bulls fought back staging a strong bounce back lifting the benchmark index above the 18k mark. It was the IT stocks that led the way with Metal, Auto and Oil & Gas stocks following suit.
Satyam Computers was the top gainer among index heavyweights, the scrip surged by over 8% to Rs421. Infosys rose 5.8% to Rs1,591, Wipro was up 5.7% to Rs437 and TCS advanced 6.1% to Rs992.
Among key secotral indices, The BSE IT index (up 6.2%), BSE Metal index (up 3.9%), BSE Auto index (up 3.4%), BSE Oil & Gas index (up 3%) and BSE FMCG index (up 2.9%).
Finally, the 30-share Sensex closed at 18,233, gaining 584 points or 3.3%. It touched an intra-day high of 18,312 and a low of 17,534. The NSE Nifty gained 179 points to close at 5,317 after hitting an intra-day high of 5,339 and a low of 5,090.
Overall about 1,130 stocks advanced, 1,619 stocks declined and 46 stocks remained unchanged. Among the BSE 30 index 27 stocks advanced and only 3 stocks declined.
Future Capital, promoted by Pantaloon Retail India, the flagship company of the Future Group got listed at Rs1,081 against issue price of Rs765. After hitting high of Rs1,100 in the opening trades the scrip immediately slipped to a low of Rs825 finally managing to close at Rs909 translating into a premium of 19% recording volumes of over 1,00,00,000 shares on BSE.
The IPO of Future Capital Holdings Ltd., the financial services arm of the Future Group, was subscribed by a whopping 133 times. The QIB portion was subscribed 180 times while the Non-Institutional portion was subscribed 84 times and the retail portion was subscribed 55 times.
Elecon Engineering dropped by over 9.7% to Rs200. The company announced that they secured contract worth Rs615mn. The scrip touched an intra-day high of Rs223 and a low of Rs194 and recorded volumes of over 60,000 shares on BSE.
Punj Lloyd dropped by over 9% to Rs401. The company posted a net profit of Rs391.60mn for the quarter ended December 31, 2007 as compared to Rs190.30mn for the quarter ended December 31, 2006. The total income has increased from Rs6694.10mn for the quarter ended December 31, 2006 to Rs12582.00mn for the quarter ended December 31, 2007. The scrip touched an intra-day high of Rs449 and a low of Rs390 and recorded volumes of over 74,00,000 shares on NSE.
BPCL surged by over 6.5% to Rs386. The company announced that it approved Rs19.96bn investment in venture. The scrip touched an intra-day high of Rs396 and a low of Rs356 and recorded volumes of over 2,00,000 shares on NSE.
Cranes Software slipped 2.5% to Rs142. The company announced their plans to raise its stake in Esqube Communication Solutions Pvt Ltd to 76% from 15%. Cranes Software International is a provider of enterprise analytics and engineering simulation software products and solutions across the globe. The scrip touched an intra-day high of Rs146 and a low of Rs140 and recorded volumes of over 6,000 shares on NSE.
TVS Motors gained 1.3% to Rs40. The company announced its January two-wheeler sales at 93,385 units down 23%. The scrip touched an intra-day high of Rs40 and a low of Rs39 and recorded volumes of over 22,00,000 shares on NSE.
Colgate Palmolive edged higher 0.2% to Rs420. The company posted a net profit of Rs604.70mn for the quarter ended December 31, 2007 as compared to Rs503.40mn for the quarter ended December 31, 2006. The total revenue has increased from Rs3389.40mn for the quarter ended December 31, 2006 to Rs3903.30mn for the quarter ended December 31, 2007. The scrip touched an intra-day high of Rs424 and a low of Rs412 and recorded volumes of over 59,000 shares on NSE.
FIIs were net sellers of Rs1.27bn (provisional) in the cash segment on Friday. Domestic Institutions were also net sellers of Rs1.15bn. In the F&O segment, foreign funds were net buyers of Rs17.46bn.
FIIs were net sellers of Rs6.11bn in the cash segment on Wednesday, taking their net outflows over the past 11 days to over US$4bn. Mutual Funds were net buyers of Rs4.16bn on the same day.
News Snippets:
British Gas to pick up a 30% stake in ONGC's KG basin block and 25% in Mahanadi basin block.(ET)
Spencer's Retail, an RPG group company plans to roll out 500 new retail outlets across the country within a year at an investment of Rs10bn.(BS)
Maruti Suzuki has raised prices of many of its models by Rs1,000-11,000, mostly due to higher raw material prices.(FE)
Reliance Telecom Infrastructure is planning to raise nearly Rs50-60bn through an IPO.(ET)
ICICI Venture has picked up New Vernon Bharat’s 40% stake in Chennai-based Updater Services, for ~Rs1bn.(ET)
ICICI Bank has shelved plans to divest stake in a holding company that was to be created for its insurance and mutual fund businesses, after failure to get the Reserve Bank nod for such a company.(BS)
Posco India chief Soung-sik Cho has said that the Indian project is not feasible without a mining lease.(FE)
Wipro will build electronic warfare systems, radars and flight simulators locally for US defence contractors.(Mint)
Jet Airways will be divesting 5% stake before 31st March, 2008.(BL)
Holcim will invest about Rs100bn in the next five years to set up plants and raise capacity by 25mn tons in the country.(BS)
The Aditya Birla Group is planning to invest $120mn in a carbon black plant in Sri Lanka.(BS)
Tata Motors has reported a 11.76% fall in its passenger car sales in the domestic market during January at 20,119 units.(BS)
IFCI allots equity worth Rs13.2bn to 30 public sector banks and financial institutions.(ET)
Hinduja Group is considering investments in a proposed chemical hub in West Bengal.(ET)
Purvankara Projects is in the final round of negotiations with PE firms to raise Rs20bn.(ET)
Ispat Industries proposes a 40mn tons capacity minor port at its existing facility.(ET)
BHEL has emerged as the sole bidder for a Rs26.4bn boiler order for stage II of NTPC’s 1,320MW Barh project.(Mint)
The country’s major oil & gas Companies, including ONGC, GAIL and BPCL, are set to invest over Rs400bn in gas supply chain by financial year 2012.(FE)
The Aditya Birla group will invest Rs80-100bn over the next three years to expand the More chain of supermarkets.(DNA)
MTNL has slashed international call rates to Re1 per minute for its VoIP customers to about 100 countries.(ET)
The cap on crude pricing from ONGC’s marginal fields may be removed.(BL)
ITC Welcome Group Hotel plans to foray into medical tourisim.(BL)
Tata Chemicals may get into the biofuel business on a large scale if its pilot project at Nanded, Maharashtra, is successful.(BS)
Kotak Mahindra Bank may get more than a 51% stake in the Ahmedabad Commodity Exchange (ACX).
Dishman Pharma is planning to acquire a company in Europe with a war chest of around Rs2bn.
TAJ GVK Hotels & Resorts will spend Rs4-5bn on increasing the room capacity to 2,000 from 1,200 by 2010.(BS)
Infrastructure developer Ashoka Buildcon has offloaded 15.62% stake to IDFC’s private equity fund for around Rs7bn.(BS)
Syndicate Bank plans to come out with its second follow-on public offer (FPO) in three-six months to fund its business growth and meet Basel-II norms.(BS)
Indian Overseas Bank (IOB) has set a revenue target of Rs100bn from its overseas expansion, slated to take place over the next year.(BS)
UCO Bank has decided to lower its benchmark PLR, thereby becoming the first bank to do so in three years.(BS)
The National Pharmaceutical Pricing Authority (NPPA) has announced a price cap on medicines sold in liquid form, bringing an additional 15% of the retail medicine market worth over Rs40bn under direct price control.(BS)
In a move to increase revenue for the Government, the DoT is planning to levy an upfront spectrum acquisition charge.(FE)
A host of public sector banks may cut lending rates following premier home loans lender HDFC slashing the rates by 0.25%.(FE)
The government is vetting a proposal put forward by SEBI to provide for a tax waiver on dividend income of Real Estate Investment Trust.(ET)
The government has allowed public sector banks to raise quick capital through QIP or preferential allotment of shares.(ET)
The EGoM will take up SEZ land cap issue today.(ET)
Assets under management of mutual funds have declined by Rs8.3 or 0.15% as on January 31, after a severe liquidity crunch in the markets forced banks and corporate bodies to withdraw money from liquid funds.(BS)
The Power ministry has blamed BHEL for the delay in setting up power projects in the country.(ET)
RBI has announced sale of bonds worth Rs165bn in next week.(ET)
The disbursal of interest-free loans to sugar mills against excise payments is getting delayed.(BS)
Chemicals and Fertilisers Minister Ram Vilas Paswan said that the proposed policies for the pharma and fertiliser sectors are likely to be cleared soon by the two Groups of Ministers (GoMs) that are looking into the issue.(BS)
The finance ministry has proposed raising the public shareholding limit for listed companies to at least 25% from the existing 10%.(BS)
The Centre’s proposed National Policy on Biofuels is expected to be ready by March’08.(BL)
US Market tries to consolidate
Market succeeds in gaining back some of its January losses
US Market tried coming to the recue of its battered stocks during the week that ended on Friday, 01 February, 2008. Earning reports, economic reports, Federal Reserve’s crucial verdict on interest rate and lastly, Microsoft’s bid for Yahoo on the last day of the week, dominated the headlines for most part. Other than that, there was bond related news. But market indeed succeeded in gaining back some of its substantial losses that it suffered during January, 2008.
The Dow Jones Industrial Average gained 536 points for the week. Tech - heavy Nasdaq gained 87 points. S&P 500 gained 36 points.
The prospect of further rate cuts, and then the rate cut itself, fueled the bullish bias that had been missing for most of January. Market ended higher on the first two days of the week.
On 30 January, Wednesday, The Federal Open Market Committee decided to cut the fed funds rate 50 basis points to 3% and the discount rate 50 basis points to 3.50%. This was on top of last week’s 75 basis point intermeeting cut in the fed funds rate to 3.50%.
The central bank also said that the credit markets in US remain under "considerable stress." Fed's statement also added that credit has tightened further for some businesses and households. The housing slump is getting worse, and there's new weakness in some labor markets.
But the reaction to Fed’s decision was very limited on that day. Market was soon gripped by news that one of the two major bond insurers was going to be downgraded by a credit rating agency. It was also reported that Ambac and MBIA, two bond insurers will lose more money than they are currently predicting from guarantees sold on complex mortgage-related securities.
On Thursday, 31 January, market opened lower initially on a disappointing economic report. But some encouraging outlook from bond insurers turned around the investor sentiments and the indices rallied for the rest of the day. The Labor Department reported today that the number of Americans filing first-time claims for unemployment benefits rose to a 27-month high. But then, the turnaround in sentiment came after bond insurer, MBIA offered assurances that it had enough cash to ride out the meltdown in the mortgage market.
On Friday, 01 February, market showed good resilience even after a weak non farm payroll data. Labor Dept reported that U.S. employers cut back their hiring in January for the first time in more than four years. Nonfarm payrolls fell by an estimated 17,000 in January. This was the first decline since August 2003. But market shrugged off the report and the indices ended substantially higher for the day.
Among major important earning reports during the week, McDonald's topped earnings expectations while Verizon came in-line with expectations. 3M and UPS reported fourth quarter earnings topping estimates. 3M also reiterated its 2008 guidance. Boeing beat Wall Street expectations. Merck reported a fourth quarter loss. Google earnings fell short of expectations.
On the economic front during the week, December durable orders rose 5.2%, larger than the expected 1.6% rise. Excluding transportation, orders still rose a healthy 2.6%. Other than that, the Conference Board said January consumer confidence stood at 87.9, down from December's revised reading of 90.6.
Among economic reports, Dept. of Commerce said December personal income rose 0.5% and spending rose 0.2%, which were mostly in-line with expectations. Market expected income to rise 0.4% and spending to rise 0.1%. The report's price index for personal consumption expenditures, a gauge of inflation closely monitored by the Fed, rose 0.2% in December from November levels. Fourth quarter employment costs rose 0.8%, in-line with expectations.
Executive Summary
For the week, indices tried regaining back most of January’s losses and the indices registered substantial gains. DJIx and S&P 500 closed up by 4.2% and 4.9% respectively. Nasdaq closed up by 3.7%.
US stocks tried to regain further ground during the week as Fed slashed interest rates by another 50 bps. Market smartly ignored a couple of weak economic reports. Earning reports continued to dominate the headlines and were mixed in nature. Bond insurers sent some nervousness initially but banks are trying to come at their rescue. Microsoft offered its bid for Yahoo for the second time.
US and the world are currently extremely worried about chances of the US economy plunging into recession. US business pundits are trying all sorts of recession warding plans. But, nothing is of sure, as of now. For the year, Dow, Nasdaq and S&P 500 are down by 4%, 9% and 5% respectively.
Crude ends week lower
Prices slip more than 3% on Friday on weak non farm payroll report
Crude prices ended lower for the week that ended on Friday, 01 February, 2008. Prices ended lower by $1.75 (1.9%). Price rose initially earlier in the week on anticipation of rate cuts from Federal Reserve. A lower interest rate has chances of helping the US economy warding off recession and thus boosts energy demand. But then, prices slipped on the last two days of the week. Price fell during the later part on weak economic reports.
For the week ending Friday, 01 February, crude-oil futures for light sweet crude for February delivery closed at $88.96/barrel (lower by $2.79) on the New York Mercantile Exchange for the day. Prices fell to $88.25 during intra day trading.
On 30 January, 2008, the Federal Reserve lowered interest rates 0.5% point to 3% today. This was after the 75 bps rate cut to 3.5% that Fed did last week. The interest rate cuts are to avoid the US economy from plunging into recession. Prices gained almost $2 during the early part of the week.
But on the last two days of the week, crude lost almost $3.37/barrel. On Friday, Labor Dept reported that U.S. employers cut back their hiring in January for the first time in more than four years. Nonfarm payrolls fell by an estimated 17,000 in January, the Labor Department said. This is the first decline since August 2003. Crude tumbled by almost 3% on that day.
As per the weekly inventory report by the Energy Department this week, U.S. crude inventories rose for a third week, up 3.6 million barrels to 293 million barrels in the week ended 25 January. Crude imports averaged about 10.1 million barrels per day last week, down 100,000 barrels per day from the previous week.
EIA also reported that U.S. gasoline supplies rose by 3.6 million barrels to 223.9 million in the week under review, while distillate supplies, which include heating oil and diesel, fell by 1.5 million barrels to 127 million. U.S. refineries operated at 85% of their operable capacity, down from the previous week's 86.5%.
Also on Friday, Organization of Petroleum Exporting Countries decided to keep current output levels unchanged.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
Bullion falls as dollar rebounds
Gold and silver prices give up earlier gains as dollar rebounds
Gold prices dropped sharply on Friday, 1 February, 2008. Gold and silver prices dropped sharply erasing their strong gains from earlier in the session, as the dollar rebounded. Silver prices also ended considerably lower for the day.
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 April delivery fell $14.5 (1.6%) to close at $913.4 an ounce on the New York Mercantile Exchange. Last Wednesday, 30 January, 2008 prices had hit a high of $941 in the after hours trading. On Friday, prices touched a high of $941.8 earlier in the session but then dropped.
This year, prices have gained 9.7% till date. In Janauary, prices gained 11%, the highest monthly gain since April 2006. For the week, gold prices closed lower by $2.7 (0.3%) against previous close of $916.1.
Comex Silver futures for March today fell by 12.5 cents (0.74%) to $16.870 an ounce. Silver has gained 13.3% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years. In January itself, prices climbed 14%.
On 31 January, 2008, the Federal Reserve lowered interest rates 0.5% point to 3% today. This was after the 75 bps rate cut to 3.5% that Fed did last week. The interest rate cuts are to avoid the US economy from plunging into recession.
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 on Friday, the dollar recovered from weakness tied to an unexpected contraction in the U.S. job market as Wall Street largely shrugged off recessionary fears. The dollar index, which tracks the performance of the greenback against six other major currencies, was at 75.481, up from 75.197.
Reliance Tower IPO - will RCOM move up like REL ?
Anil Ambani’s appetite for raising funds from the primary market seems to be insatiable. Barely a fortnight after his Reliance Power completed the country’s biggest public issue, another company from the group Reliance Telecom Infrastructure (RTIL) is gearing up to raise nearly Rs 5,000-6,000 crore through an initial public offering.
The company has decided to file the draft red herring prospectus with the market regulator Sebi this week, it is learnt. The list of merchant bankers appointed for the IPO includes J P Morgan, Enam, UBS and ABN Amro.
Bankers close to the development said RTIL will sell nearly 10% of its post-issue share capital through the IPO which will put its valuation more than double of what it achieved in July when it privately placed 5% stake to a group of institutional investors. RTIL, a 95% subsidiary of Reliance Communications (RCOM), sold the stake for Rs 1,400 crore to a host of investors including George Soros, HSBC, Fortress Capital, New Silk, Galleon, DA Capital and GLG Capital in a deal which had put its valuation at Rs 27,000 crore.
Going by the IPO size, the equity valuation of RTIL, a company engaged in the business of building, owning and operating communications towers, will be around Rs 50,000-60,000 crore. This will translate into nearly Rs 250-300 per RCOM share. The RCOM stock closed at Rs 612.15 on Friday on the BSE. When contacted, a spokesperson for the group declined to comment.
RCOM demerged its tower assets in RTIL last year in a move which was followed by most telecom companies in India. RTIL has a presence in all 23 telecom circles in the country. It has a 10-year master services agreement to provide passive telecom infrastructure to RCOM. Additional tenants in the form of external wireless operators on RTIL's towers will provide incremental growth for it.
Bankers found the increase in number of towers responsible for the possible increase in valuation. “RTIL had 14,000 towers across the country when the first stake sale happened in July. Now, it will end up this financial year with 40,000 towers. Also, it plans to add another 20,000 towers next year. With new players getting into the 2G and 3G spaces, the tenancy ratio for every tower is expected to go up to four. In short, the business proposition of the company looks more bright than what it was in July,” said a person related to the developments.
RTIL is putting in an investment of Rs 16,000 crore this year and is expected to pump in Rs 8,000 crore more next year. It has a minimum of four tenancy slots and it is in the process of upgrading this to host seven tenants by 2009. It expects to reach the one lakh tenancy figure this week.
Reliance Power, another R-ADAG group company, last week completed the allotment of shares of its Rs 11,560-crore IPO. The issue helped Reliance Power to became India’s biggest company in terms of the number of shareholders (42 lakh). RNRL had close to 22.3 lakh shareholders at the end of December 2007, followed by the Mukesh Ambani-led Reliance Industries with close to 20.6 lakh shareholders. Reliance Communications is the fourth-largest in this list with around 19.8 lakh shareholders. Reliance Petroleum has close to 16.9 lakh shareholders.
Via Economic Times
Weekly Stock Recommendations
Yes Bank
Research: JP Morgan
Rating: Overweight
CMP: Rs 254
JP Morgan has an ‘overweight’ rating on Yes Bank and increases the March ’09 target price to Rs 293, with 21% upside potential. It has a high return on equity (RoE), high growth and zero non-performing loans (NPLs). It reported a 116% growth in Q3 profit, with 1.5% return on assets (RoA) and 20.5% RoE despite its November issuance.
While the stock has outperformed the Sensex over the past year, it now presents an excellent entry point, given its flat absolute performance over the past month. Catalysts include its upcoming equity placement, wide launch of its retail initiatives, likely addition of 100 branches by July ’08 and launch of non-banking businesses over the next 12 months.
Improved low-cost mix, firm margin trends, robust fee growth and 104% deposit growth have boosted the bank’s operating profit 111% year-on-year (y-o-y). NPLs continue to remain nil. Retail loans are not a priority for the bank currently, since its growth is driven by small and medium enterprise (SME) loans.
High balance sheet growth, low margins, high fees, low operating expenditure and low provisions drive 10-20% increase in EPS over FY08E-FY10E. JP Morgan also factors in an equity issuance of Rs 500 crore in FY09, assuming 2 crore shares at Rs 250 per share. The stock trades at 3.5x book versus the target of 3.76x, based on Gordon Growth Model, assuming 23.6% normalised RoE.
Britannia Industries
Research: India Infoline
Rating: Buy
CMP:Rs 1,408
India Infoline has recommended a ‘buy’ on Britannia Industries with a target price of Rs 1,789, an upside of 24.3%. Britannia registered strong 15.6% y-o-y growth in revenues at Rs 660 crore during Q3 FY08, aided by excise savings.
The enhancement in excise exemption purview to include biscuits with Rs 100/kg maximum retail price from Rs 50/kg covers almost 75-80% of Britannia’s biscuit portfolio, due to which, its key brands like Tiger, 50:50, Marie Gold, Nice, Milk Bikis and Good Day are now out of the excise ambit.
The increasing utilisation of the Baddi unit for manufacturing high-end products may have also helped to reduce excise duty. Net profit for the quarter increased by 147.7% y-o-y, driven by strong revenue growth, coupled with improved operating efficiency. Adjusted net profit, after voluntary retirement scheme cost of Rs 3.4 crore, rose by 176.8% y-o-y to Rs 45.4 crore, translating into an annualised EPS of Rs 76.
Since Britannia is the largest player in the fast-growing biscuits category, it is the biggest beneficiary of the excise exemption (biscuits priced below Rs 100/kg) on biscuits. India Infoline expects the reduction in excise duty, increasing capacity utilisation at Baddi and reduction in pack sizes to drive volumes and result in improved profitability, going forward.
Britannia is also looking at new growth triggers like acquisitions in new categories, both in India and overseas. At the current market price of Rs 1,439, the stock is trading at 16.1x FY09E EPS of Rs 89.4.
Jain Irrigation Systems
Research: Morgan Stanley
Rating: Buy
CMP: Rs 622
Morgan Stanley has retained its ‘overweight’ rating on Jain Irrigation Systems (JISL). Strong momentum in micro irrigation systems (MIS) and fruits & vegetables (FV) processing continues to drive growth.
Margins have expanded by 270 bps in 9M FY08 to 18.6%, led by faster growth in micro irrigation, which now comprises 33% of JISL’s standalone revenues, against 28% in the previous corresponding period. In Q3 FY08, JISL reported standalone revenues of Rs 400 crore (36% y-o-y growth) and EBITDA of Rs 82 crore (75% y-o-y growth).
MIS grew 69% y-o-y to Rs 170 crore, driven by strong growth in all key states. EBITDA margins of the business expanded by 60 bps y-o-y, driving EBITDA growth of 72%. It currently has an MIS order book of around Rs 330 crore, which will largely be executed by March ’08.
Agro-processing (AP) grew 76% y-o-y, driven by 170% growth in FV processing to Rs 41.8 crore, while onion dehydration declined 52%. The plastics business grew 11% y-o-y to Rs 200 crore, impacted by lower exports to the US (PVC sheets) and slowdown in domestic PVC pipes business. Morgan Stanley estimates that margins will expand over the next 3-5 years, with faster growth in MIS and earnings growth, which will push up revenues.
GMR Infrastructure
Research: JM Financials
Rating: Buy
CMP: Rs 175
JM Financials remains positive on GMR Infrastructure, given the valuable Delhi and Hyderabad airport assets, real estate development prospects of 1,255 acres around the airports and rising share of power assets in project portfolio (over 1,000 mw under development).
JM Financials maintains a target price of Rs 297 for the company. GMR Infra reported a y-o-y profit growth of 20% for the December ’07 quarter. This was largely driven by other income, which rose by 133% y-o-y to Rs 28.2 crore. Passenger traffic growth at the Delhi airport has remained strong at over 20% during 9M FY08E. Non-aeronautical revenues, which accounted for 60% of the airport turnover, continue to drive airport profitability.
GMR Infra’s existing power projects are based on fixed RoE power purchase agreements. Hence, though the plants operated at higher than the usually low plant load factors, EBITDA levels were maintained. GMR Infra’s only operational road projects are two annuity-based projects, which also have steady cash flows. GMR’s Delhi airport subsidiary received bids for 45 acres around the airport, which will be developed commercially.
Given the continuing disagreement with the government regarding receipt of a larger proportion of deposits than lease rentals, the opening of bids has been delayed. The management has indicated that the issue is expected to be resolved favourably by the end of February ’08.
Steel Authority of India
Research: Credit Suisse
Rating: Neutral
CMP: Rs 226
Credit Suisse maintains ‘neutral’ rating on Steel Authority of India (SAIL). The company reported Q3 results in line with expectations, with lower sales volumes offsetting better-than-expected realisations. 9M FY08 production has outpaced sales by 1 million tonnes (mt).
SAIL has 1.6 mt of finished goods inventory. In the past, the fourth quarter has typically seen a surge in sales. This should help the company meet FY08 estimates. The company’s employee costs were surprising, mainly due to a Rs 400-crore provision for gratuity and leave encashment. There will be another Rs 328-crore impact in Q4. The management expects a 20% increase in employee costs due to the Sixth Pay Commission’s recommendations.
There is some potential for tightness in coking coal availability in March ’08 due to flooding in Australia, but the company has asked Coal India and its American supplier to compensate for this. SAIL has received approval to buy 90% coking coal on long-term contracts (80% earlier), reducing its dependence on spot markets. 30% of the orders have been placed for the company’s Rs 53,000-crore expansion.
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Market Technicals - Feb 4 2008
| The market weathered the settlement and seems to have settled into a phase of consolidation with support just above the 200 Day Moving Average. The Nifty closed the week on 5317.25 points with a loss of 1.22 per cent while the Sensex was down 0.69 per cent at 18233 points. The Defty lost 1.12 per cent as the rupee strengthened. |
| Breadth was poor with more declines than advances. The Junior was down 4.46 per cent. The FIIs continued their unabated selling. The Midcaps was down 3.77 per cent and the BSE 500 was down 2.08 per cent. Volumes dropped drastically- even settlement didn't bring action to the market. |
| Outlook: The 200 DMA has held through this traumatic period when the FIIs sold over Rs 17,000 crore. Assuming that there isn't another wave of FII exits, expect the Nifty to swing within a range of 5000-5500 with high daily volatility and low volumes. The intermediate trend is negative, the short-term trend is positive and tentatively, the long-term trend may still be bullish. |
| Rationale: The 200 DMA is a key lagging indicator of the long-term market trend. Since the major indices have held above this level after testing it, we believe that the long-term trend is probably intact. In the short-term, the short-covering on Friday could continue and drive the Nifty back to levels of around 5475-5525. |
| Counter-view: This downtrend was triggered by FII selling that led to cascading margin calls for leveraged Indian retail players and operators. If the FIIs continue to sell, there is no counter-party capable of absorbing that. Closes below the 200 DMA (Nifty 5075) would signal a worsening trend. Closes below 4900 would confirm a long-term bear market. This is a distinct possibility. |
| Bulls & bears: Banks were hard-hit this week because the RBI refused to make rate cuts that were expected. The BankNifty dropped a disproportionate 4.4 per cent. If there's a sectoral bounce, expect ICICI, Indian Overseas Bank and Yes Bank to lead the way. |
| Conversely, the CNX IT gained 3 per cent due to expectations that the rupee would weaken due to FII outflows. Practically every stock in the sector rose. Unfortunately this may not be sustainable. The best picks appear to be Satyam and HCL Tech. |
| Among other stocks, there was a bullish flavour to the auto industry, which has seen a sell off through the past 6 months. Bajaj Auto, Hero Honda, Maruti and Tata Motors all participated. |
| Otherwise, there was some buying scattered across BPCL, Airtel, Cipla, HDFC, NTPC, ONGC, Tata Power and Tata Steel. The Reliance and ADA group counters remained depressed but most are at levels, which will attract investment buying. |
| MICRO TECHNICALS |
| Bajaj Auto Current Price: 2449.35 Target Price: 2400, 2525 (Range-trading) |
| The stock is testing a critical resistance at current levels. If it crosses 2460, it could rise till the 2525 level. On the downside, there is support at 2410. Expect daily swings through a range of 2400-2525. If 2400 is broken, the next support is at 2360. Use 2450 as a pivot and go long or short depending on whether the stock opens above or below 2450. |
| Cipla Current Price: 196.4 Target Price: 210 |
| Cipla hasn't generated high volumes but it has gained consistently over the past 6-7 sessions. There's room for the stock to appreciate till the 210 level before it runs into stiff resistance. Keep a stop at 191 and go long. |
| NTPC Current Price: 205.7 Target Price: NA |
| The stock appears to have bottomed out after heavy selling. It has a potential upside till 225 with a timeframe of about 15 sessions. Keep a stop at 196 and take delivery. Book profits above 225. |
| Reliance Petroleum Current Price: 167.8 Target Price: NA |
| The stock seems to have found a reliable bottom with support at 155-165. There's a potential upside till the 185 level. Keep a stop at 163 and go long. If the stop is broken, go short with a target of 154 and a stop at 167. |
Via Business Standard
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