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Monday, November 10, 2008
Sensex up 571 pts, closes at 10,536.16
Markets surged on Monday with the benchmark Sensex notching up a handsome gain of over 570 points to regain the 10,000-level on buying support sparked by strong global trends, bolstered by China's multi-billion stimulus plan for its economy.
The bellwether index closed higher by 571.87 points, or 5.74 percent, at 10,536.16 after regaining the 10,000-level in the morning trade itself.
The National Stock Exchange index Nifty also spurted by 175.25 points at 3148.25.
Marketmen said stocks moved to positive zone on firm overseas trends which were bolstered by China's stimulus plan and anticipation that governments elsewhere would follow suit.
Reliance Industries, the heaviest among all Sensex stocks, recorded handsome gains on reports that the company might slow work at the special economic zone because of global financial turmoil.
The breadth of the market was attractive as 28 shares in the 30-BSE Sensex were higher and two recorded losses. ITC fell by Rs 2.40 at Rs 172.40 and Maruti Suzuki by Rs 1.60 at Rs 596.05.
BSE Bulk Deals to Watch - Nov 10 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
10/11/2008 500303 ADI BIR NUVO SWISS FINANCE CORP MAU LTD B 669263 652.00
10/11/2008 533029 ALKALI OPG SECURITIES P LTD B 324504 186.06
10/11/2008 533029 ALKALI MANSUKH STOCK BROKERS LTD B 54313 185.31
10/11/2008 533029 ALKALI SAM GLOBAL SECURITIES LTD B 55480 183.36
10/11/2008 533029 ALKALI B K SHAH CO B 58934 184.35
10/11/2008 533029 ALKALI MEENAL NITESH THAKUR B 74849 184.25
10/11/2008 533029 ALKALI OPG SECURITIES P LTD S 324504 186.11
10/11/2008 533029 ALKALI MANSUKH STOCK BROKER LTD S 54313 185.22
10/11/2008 533029 ALKALI SAM GLOBAL SECURITIES LTD S 55480 182.90
10/11/2008 533029 ALKALI B K SHAH CO S 60515 185.06
10/11/2008 533029 ALKALI MEENAL NITESH THAKUR S 74849 180.26
10/11/2008 519485 ASIA IND NET LRS PORTFOLIO AND ADVISORY SER PVT LTD B 48779 13.41
10/11/2008 519485 ASIA IND NET DEVANG J GADOYA S 30410 13.40
10/11/2008 504028 GEE LTD VIDYA FINVEST LIMITED B 77755 33.65
10/11/2008 532715 GITANJALI GE SWISS FINANCE CORP MAU LTD B 622468 93.75
10/11/2008 531439 GOLDSTON TEC PIONEER NIRMAN INDIA PRIVATE L B 100000 37.35
10/11/2008 531439 GOLDSTON TEC MASUMI OVERSEAS PRIVATE LIMITED S 400000 37.35
10/11/2008 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH S 415000 37.35
10/11/2008 531439 GOLDSTON TEC BHAVESH PRAKASH PABARI S 179000 37.40
10/11/2008 531439 GOLDSTON TEC PIONEER NIRMAN INDIA PRIVATE L S 100000 41.25
10/11/2008 508918 GREYCELLS EN SAJEEVE THOMAS B 21444 299.93
10/11/2008 530005 INDIA CEMENT SWISS FINANCE CORP MAU LTD B 2520000 89.70
10/11/2008 530773 IVRCL INF PR SWISS FINANCE CORP MAU LTD B 3405049 157.50
10/11/2008 524794 MATRIX LABS SWISS FINANCE CORP MAU LTD B 2140000 88.50
10/11/2008 532606 PAREKH ALUM AAP INVESTMENTS B 265000 70.27
10/11/2008 532606 PAREKH ALUM INVESTRICK SECURITIES INDIA PVT LTD S 200000 70.01
10/11/2008 531646 RFL INTERNAT GEETA NARENDRA SHAH S 83101 0.76
10/11/2008 531646 RFL INTERNAT URVI B MEHTA S 38000 0.76
NSE Bulk Deals to Watch - Nov 10 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
10-NOV-2008,ALKALI,Alkali Metals Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,123548,185.12,-
10-NOV-2008,ALKALI,Alkali Metals Limited,B K SHAH CO KETAN BHAILAL SHAH,BUY,80492,184.31,-
10-NOV-2008,ALKALI,Alkali Metals Limited,CHOKHANI SECURITIES LTD,BUY,113142,186.25,-
10-NOV-2008,ALKALI,Alkali Metals Limited,CPR CAPITAL SERVICES LTD.,BUY,90872,181.60,-
10-NOV-2008,ALKALI,Alkali Metals Limited,MANSUKH SECURITIES & FINANCE LTD,BUY,65094,183.75,-
10-NOV-2008,ALKALI,Alkali Metals Limited,NIKUNJ K SHAH,BUY,62512,187.20,-
10-NOV-2008,ALKALI,Alkali Metals Limited,PRASHANT JAYANTILAL PATEL,BUY,62045,194.36,-
10-NOV-2008,ALKALI,Alkali Metals Limited,R.M. SHARE TRADING PVT LTD,BUY,138475,185.55,-
10-NOV-2008,ALKALI,Alkali Metals Limited,SHINDE BALASO VITHAL,BUY,65482,186.41,-
10-NOV-2008,ALKALI,Alkali Metals Limited,YUVAK SHARE TRADING PVT LTD,BUY,51827,188.04,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,BUY,112190,37.86,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,BASI REDDY BHASKAR REDDY,BUY,225000,37.94,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,BUY,231466,38.21,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,KUSUMA KALA B,BUY,300000,36.95,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,SETU SECURITIES LTD,BUY,96506,39.44,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,BUY,163635,37.79,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,YUVAK SHARE TRADING PVT LTD,BUY,133116,39.52,-
10-NOV-2008,ALKALI,Alkali Metals Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,123548,185.46,-
10-NOV-2008,ALKALI,Alkali Metals Limited,B K SHAH CO KETAN BHAILAL SHAH,SELL,80743,184.38,-
10-NOV-2008,ALKALI,Alkali Metals Limited,CHOKHANI SECURITIES LTD,SELL,113142,187.80,-
10-NOV-2008,ALKALI,Alkali Metals Limited,CPR CAPITAL SERVICES LTD.,SELL,91372,181.83,-
10-NOV-2008,ALKALI,Alkali Metals Limited,MANSUKH SECURITIES & FINANCE LTD,SELL,65094,184.10,-
10-NOV-2008,ALKALI,Alkali Metals Limited,NIKUNJ K SHAH,SELL,62512,187.38,-
10-NOV-2008,ALKALI,Alkali Metals Limited,PRASHANT JAYANTILAL PATEL,SELL,62045,194.74,-
10-NOV-2008,ALKALI,Alkali Metals Limited,R.M. SHARE TRADING PVT LTD,SELL,138475,185.51,-
10-NOV-2008,ALKALI,Alkali Metals Limited,SHINDE BALASO VITHAL,SELL,30482,187.19,-
10-NOV-2008,ALKALI,Alkali Metals Limited,YUVAK SHARE TRADING PVT LTD,SELL,51826,187.77,-
10-NOV-2008,BARTRONICS,Bartronics India Limited,PRIME INFO INVESTMENT LTD,SELL,176000,80.99,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,SELL,67190,37.60,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,SELL,246466,38.65,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,HEMANT M.SHETH,SELL,144258,37.84,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,MASUMI OVERSEAS PRIVATE LIMITED,SELL,453000,37.08,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,PABARI BHAVESH PRAKASH,SELL,130000,36.95,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,SANCHANIYA ANKIT RAJENDRA,SELL,160000,36.95,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,SETU SECURITIES LTD,SELL,82551,40.01,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,SELL,109135,38.87,-
10-NOV-2008,GOLDTECH,Goldstone Tech Ltd.,YUVAK SHARE TRADING PVT LTD,SELL,202126,39.54,-
RIL, metal shares lead a near 6% Sensex surge
Unabated buying in blue chips throughout the day triggered a solid rally after China's massive economic stimulus plan raised expectations that authorities elsewhere would follow suit. The BSE Sensex vaulted 571.87 points or 5.74%. Buying was conspicuous across-the-board with all the sectoral indices on BSE logging gains. Reduction in India's economic growth forecast by global investment banking and securities firm Goldman Sachs failed to put brakes on the rally.
The BSE Sensex surged past the psychologically vital 10,000 mark and the S&P CNX Nifty raced past the psychological important 3,000 mark. Though the barometer index BSE Sensex had breached 10,000 level a number of times in intraday trade on Friday, 7 November 2008, it had ended below that level.
Goldman Sachs today, 10 November 2008, cut its economic growth for India to 6.7% from 7.5% in the year ending March 2009 due to the knock-on effects of the global financial crisis. It also cut its growth projection for the year ending March 2010 (FY 2010) to 5.8% from 7% on concerns negative global financial stocks will continue to slow activities across the board.
European shares rose as commodity stocks soared after China unveiled a nearly $600-billion economic stimulus plan to boost domestic demand. Key benchmark indices in UK, Germany and France were up by between 3.11% and 3.35%.
China's Shanghai Composite surged 7.27% after the government on Sunday, 9 November 2008, announced $586 billion in infrastructure and public welfare spending to slow the global financial crisis's impact on its economy, the world's fourth-largest. Other Asian markets, too, were firm. Key benchmark indices in Hong Kong, Japan, Singapore and South Korea were up by between 1.16% and 5.81%. However Taiwan's Taiwan Weighted was down 0.04% despite announcing 25 basis points cut in interest rates for the fourth time in two months after exports dropped in October 2008 by most in three years.
Trading in US index futures indicated the Dow will rise 204 points at the opening bell.
Meanwhile, economic officials from 20 leading nations called Sunday for increased government spending to boost the troubled global economy and said developing countries deserve a prominent role in talks to overhaul the world financial system. Each country will have to design its own stimulus package to meet its specific needs, said David McCormick, the US Treasury's undersecretary for international affairs.
US President-elect Barack Obama on Friday, 7 November 2008, vowed to act swiftly to address the global financial crisis.
The BSE Sensex surged 571.87 points or 5.74%, to close at 10,536.16. The Sensex jumped 606.29 points at the day's high of 10,570.58 in late trade. At the day's low of 10,095.90, the Sensex rose 131.61 points in early trade.
The S&P CNX Nifty advanced 175.25 points or 5.89%, to settle at 3148.25. Nifty November 2008 futures were at 3167, at a premium of 18.75 points as compared to spot. Turnover in NSE's futures & options (F&O) segment declined to Rs 30,290.49 crore from Rs 36,963.32 crore on Friday, 7 November 2008.
The barometer index BSE Sensex is down 9750.83 points or 48.06% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10670.61 points or 50.31% below its all-time high of 21,206.77 struck on 10 January 2008.
The market breadth, indicating the overall health of the market, was strong on BSE with 1705 shares advancing as compared with 856 that declined. 70 shares remained unchanged.
The BSE Mid-Cap rose 3.57% to 3,475.09 and the BSE Small-Cap index advanced 2.25% to 3,988.03.
The total turnover on the BSE amounted to Rs 3689 crore as compared to Rs 3458.24 crore on Friday, 7 November 2008.
Among the 30-member Sensex pack, 28 advanced while the rest slipped.
The BSE Metal Index surged the most among the sectoral indices on BSE, rising 10.92% to 5,714.83, on hopes Chinese demand will rise after the stimulus package. India's top aluminium and copper producer by sales, Sterlite Industries jumped 14.16% to Rs 281 on 15.69 lakh shares. It was the top gainer from the Sensex pack.
Hindalco Industries (up 9.76% to Rs 66.35), National Aluminium Company (up 12.35% to Rs 186.20), Steel Authority of India (up 5.75% to Rs 89.30), and Hindustan Zinc (up 12.59% to Rs 355), surged.
World's sixth largest steel maker in terms of capacity Tata Steel galloped 12.78% to Rs 214.40, even as its subsidiary and Europe's second largest steelmaker by sales Corus, said on Friday, 7 November 2008, that it decided to extend the production cuts it announced last month beyond December 2008. Corus, in October this year, announced plans to reduce third quarter production by 1 million tonnes of crude steel, equivalent to 20% of its output.
Sesa Goa galloped 8.32% to Rs 86.55 on reports the government has altered the duty structure on iron ore exports, aiming to trim the tax burden on miners.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) advanced 7.16% to Rs 1305 on 16.66 lakh shares, ahead of a court verdict on the gas dispute with National Thermal Power Corporation on 11 November 2008. NTPC, India's biggest power generation firm by sales, rose 8.63% to Rs 164.25
India's top oil exploration company by net profit ONGC spurted 8.69% to Rs 806.05 after media reports quoted ONGC's chairman RS Sharma on Saturday, 8 November 2008, as saying that the company is not facing cash flow problems and is still looking for acquisition opportunities despite the global financial crisis. Sharma added that ONGC was looking at possible acquisitions in Africa and Latin America. The BSE Oil & Gas index shot up by 6.11% to 6,381.08.
Telecom pivotals gained on fresh buying. Reliance Communications, the country's second largest telecom services provider by sales rose 5.81% to Rs 241.40 whereas India's largest telecom services provider by market share Bharti Airtel spurted 10.85% to Rs 720.50.
Recent reports indicated government will allocate spectrum for next generation wireless networks to successful bidders by the end of January 2009 after holding an auction as planned earlier in the month.
L&T, Indian top engineering and construction firm by sales and Bharat Heavy Electricals, the country's largest power equipment maker by sales, led gains in the BSE Capital Goods index. It rose 6.33% to 8,118.43. Larsen & Toubro surged 5.17% to Rs 916 after its consortium with Malaysia's Scomi Engineering Bhd won an order worth Rs 2460 crore. Bharat Heavy Electricals gained 6.82% to Rs 1500.90
Suzlon Energy slipped 2.62% to Rs 68.85 after Morgan Stanley downgraded the stock while lowering the price target to Rs 52.45 from earlier Rs 450 citing slowdown in the global wind turbine market and the unresolved technological issues.
Banking shares edged higher boosted by the Reserve Bank of India's (RBI) announcement after market hours on Friday, 7 November 2008 to provide foreign exchange (forex) liquidity to banks that are facing liquidity crunch following the drying up of lines of credit globally. The Bankex gained 4.53% at 5,782.49.
ICICI Bank (up 8.99% to Rs 470), State Bank of India (up 5.26% to Rs 1314.90), and HDFC Bank (up 0.14% to Rs 1089.80) gained.
Axis Bank (up 4.48% to Rs 607), Kotak Mahindra Bank (up 5.03% to Rs 432.20), and Punjab National Bank (up 1.89% to Rs 505.50), advanced.
Auto stocks were mixed after latest data showed fall in sales in key segments in the month just gone by. The BSE Auto index was up 2.46% to 2,727.
India's top truck maker by sales Tata Motors vaulted 7.11% to Rs 170.20 on bargain hunting even as the company said it will shut down its commercial vehicle plant at Pune to avoid unnecessary inventory build-up. The stock was down 49.81% to Rs 158.90 in one month on 7 November 2008.
India's top tractor maker by sales Mahindra & Mahindra rose 5.29% to Rs 391.95. India's top small car maker by sales Maruti Suzuki India lost 0.60% to Rs 594.05 after moving in a band of Rs 583.30 and Rs 610 during the day.
According to the figures released by the Society of Indian Automobile Manufacturers (Siam), passenger car sales declined 6.6% to 98,900 units in October 2008 over October 2007. Sales of trucks and buses fell 35.9% to 28,027 units.
IT pivotals advanced, with the BSE IT index rising 5.44% to 2,815.88, as firm American depository receipts offset a strong rupee. India's third largest IT exporter by sales Satyam Computer Services rose 6.97% to Rs 297.10 as ADR jumped 10.64%. India's fourth largest IT exporter by sales Wipro rose 4.43% to Rs 272 as ADR advanced 6.51%, on the New York Stock Exchange on Friday, 7 November 2008.
India's second largest IT exporter by sales Infosys rose 6.16% to Rs 1346, off sharply from day's low of Rs 1237. Its ADR surged 7.97% on the New York Stock Exchange on Friday, 7 November 2008. India's largest IT exporter by sales Tata Consultancy Services rose 4.47% to Rs 548.
The partially convertible rupee was at 47.38/39 per dollar, stronger than Friday's close of 47.65/66 per dollar, as a rally in the stock market raised expectations of renewed capital inflows. A rise in rupee impacts margins at IT firms as they derive a lion's share from exports to the US.
Power stocks rose even as the Power secretary Anil Razdan today, 10 November 2008, said the government has deferred bidding for the 4,000 ultra mega power project at Tilaiya in eastern India by a month because of the credit crisis. Tata Power Company advanced 11.89% to Rs 825.05 and Reliance Power rose 4.27% to Rs 122.20. The BSE Power index gained 7.84% to 1,916.99.
Ranbaxy Laboratories (up 6.11% to Rs 231.75), DLF (up 6.05% to Rs 297.70), and Grasim (up 5.45% to Rs 1100), edged higher from the Sensex pack.
India's top cigarette company by sales, ITC slipped 1.55% to Rs 172.10 on profit booking after gaining 13.58% in the week ended 7 November 2008. It was the top loser from the Sensex pack.
Infrastructure stocks extended recent gains after the latest data showed rise in infrastructure output. Reliance Infrastructure (up 11.29% to Rs 624.25), GVK Power & Infrastructure (up 14.46% to Rs 20.82), GMR Infrastructure (up 17.41% to Rs 79.25), and Lanco Infrastructure (up 8.32% to Rs 183) surged.
IVRCL Infrastructures & Projects jumped 11.47% to Rs 155 on bagging a lift irrigation project worth Rs 893 crore.
India's infrastructure sector output grew 5.1% in September 2008 from a year earlier, well above 2.3% annual growth in August 2008, government data released during trading hours on Friday, 7 November 2008 showed.
State-run oil marketing firms slipped after an initial surge as crude oil prices rose. Bharat Petroleum Corporation (down 4.86% to Rs 316, off day's high of Rs 340), Hindustan Petroleum Corporation (down 1.48% to Rs 216, off day's high of Rs 225) slipped. Indian Oil Corporation was up marginally by 0.18% to Rs 368, off day's high of Rs 377.
State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. US light crude for December 2008 delivery rose $2.46 or 4% to $63.50 a barrel today, 10 November 2008 fuelled by top exporter Saudi Arabia's plans to cut December supplies to Asia, a weaker dollar and hopes that global economies' plans to lift growth could avert recession.
Sugar shares gained after prices rose by Rs 10 a quintal to Rs 1,840 today, 10 November 2008 in the wholesale foodgrains market. Shree Renuka Sugars (up 9.61% to Rs 68.45), Bajaj Hindustan (up 6.01% to Rs 53.80), and Balrampur Chini Mills (up 4.34% to Rs 45.70), advanced
Among the side counters, Bombay Dyeing & Manufacturing Company (up 21.88% to Rs 227), Arvind Mills (up 21.24% to Rs 19.75), and Praj Industries (up 18.30% to Rs 85.35), surged.
Deccan Chronicle Holdings soared 20.44% to Rs 54.50 on reports the company had transferred franchise rights for the Indian Premier League's Hyderabad team to its newly formed unit.
Aurobindo Pharma surged 20.55% to Rs 136.40 on receiving final approval from the US Food & Drug Administration for manufacturing and marketing Sertraline hydrochloride in 20 miligram strength. The company made this announcement after trading hours on Friday, 7 November 2008.
Post Session Commentary - Nov 10 2008
The domestic market continued its rally for the second consecutive day to close with handsome gains on the back of intensive buying across the counters. The market extended its gains to more than 5% on favorable global cues led by China after it announced about massive economic stimulus package worth $ 586 billion in an attempt to lift its weakening economy. Further, Taiwan cuts interest rates by 25 bps, fourth time in two months after exports dropped in October by most in three years. The market opened on upbeat note and continued its northward journey till end on strong cues from the markets all over the world. It was a fabulous session for the market. The BSE Sensex ended above 10,500 level with gain of more than 5.7% and NSE Nifty closed above 3,100 with increase of more than 5.8%. From the sectoral front, the Metal index surged to close with increase of more than 10%. Besides, the Power, Capital Goods, Oil and Gas, Teck, PSU, IT and Realty index also followed the rally to post good buying. Along with that, Midcap and small cap stocks were also in the limelight.
Among the Sensex pack 28 stocks ended in green territory and 2 in red. The market breadth was positive as 1694 stocks closed in green while 855stocks closed in red and 73 stocks remained unchanged.
The BSE Sensex closed higher by 571.87 points at 10,536.16 and NSE Nifty ended up by 175.25 points at 3,148.25. The BSE Mid Caps and Small Caps closed with gains of 119.71 points 3,475.09 and by 87.93 points at 3,988.03. The BSE Sensex touched intraday high of 10,570.58 and intraday low of 10,095.90.
Gainers from the BSE Sensex pack are Sterlite Industries (13.43%), Tata Steel (12.81%), Reliance Infra (10.93%), Hindalco (10.50%), JP Associates (10.21%), Tata Power (9.64%), ICICI Bank (9.24%), Bharti Airtel (9.13%), ONGC Ltd (8.65%), BHEL (7.66%) and NTPC Ltd (7.28%).
Losers from the BSE Sensex pack are ONGC Ltd (1.37%) and Maruti Suzuki (0.27%).
The BSE Metal index ended higher by (10.92%) or 562.50 points at 5,714.83. Major gainers are NMDC Ltd (17.93%), Jindal Steel (14.93%), Sterlite Industries (13.43%), Hindustan Zinc (13.38%), Tata Steel (12.81%) and Nalco (11.64%).
The BSE Power index surged (7.84%) or 139.42 points to close at 1,916.99. Gainers are GMR Infra (15.11%), GVK Power (13.58%), Torrent Power (11.94%), Reliance Infra (10.93%), ABB Ltd (9.24%) and Siemens Ltd (8.98%).
The BSE Capital Goods index advanced by (6.33%) or 483.02 points to close at 8,118.43. Gainers are Praj Industries (17.05%), Alstom Proje (10.44%), ABB Ltd (9.24%), Siemens Ltd (8.98%), Crompton Greaves (8.44%) and BHEL (7.66%).
The BSE Oil & Gas index gained (6.11%) or 367.51 points to close at 6,381.08. Major gainers are Cairn Ind (10.99%), ONGC Ltd (8.65%), Reliance (7.00%), Esar Oil Ltd (5.11%), Reliance Natural Resources (4.74%) and Aban Offshore (4.32%).
The BSE Teck index ended higher by (5.98%) or 124.79 points to 2,210.63 as Deccan Chronicle (19.56%), Aptech Ltd (12.24%), UTV Software (11.77%), Tata Telesrv (10.81%), Balaji Tele (9.72%) and Rolta India (9.39%) ended in positive territory.
The PSU index ended up by (5.62%) or 278.87 points at 5,244.67 as NMDC Ltd (17.93%), Nalco (11.64%), ONGC Ltd (8.65%), BHEL (7.66%), NTPC Ltd (7.28%) and Mahanag Tele (6.56%) in positive territory.
Unabated rally
The market displayed tremendous strength on firming global cues. The Sensex went into a major recovery mode after the last week’s fall and moved up more than 600 points during intra-day trades. The rally in Asian markets cheered investors back home and the Sensex opened 191 points up at 10,155. Metal and Power stocks led the rally and the respective indices posted gains of more than 7-10%. Firm close in major Asian indices and surge in European markets also helped the sentiment remain bullish, with the Sensex crossing 10,300 by afternoon and maintaining its upwards bias thereafter. Sustained buying in frontline stocks saw the Sensex surge past 10,500 to touch the day's high of 10,571 towards close. The Sensex ended 572 points or 5.74% at 10,536, while Nifty added 175 points at 3,148.
The market breadth was positive. Of the 2,622 stocks traded on the BSE 1,696 stocks advanced, whereas 853 stocks declined. Seventy three stocks ended unchanged. Among the sectoral indices, BSE Metal flared up by 10.92%, BSE Power rose 7.84% and BSE CG moved up by 6.33%. Other indices also ended with gains of more than 0.6% each.
All the Sensex stocks ended at higher levels. Sterlite Industries flared up 13.43% at Rs279.20, Tata Steel shot up by 12.81% at Rs214.45, Tata Power zoomed 11.89% at Rs825.05, Reliance Infrastructure moved up by 10.93% at Rs622.20, Hindalco Industries scaled up 10.50% at Rs471.10, Bharti Airtel surged by 9.13% at Rs709.35 and ONGC jumped by 8.65% at Rs805.
Over 3.10 crore shares of GVK Power & Infrastructures changed hands on the BSE followed by Suzlon Energy (2.07 crore shares), Unitech (1.20 crore shares), Hindalco Industries (1.06 crore shares) and Reliance Natural Resources (94.57 lakh shares).
Valuewise, Reliance Industries clocked a turnover of Rs212 crore followed by Suzlon Energy (Rs142 crore), Reliance Capital (Rs120 crore), Tata Steel (Rs112 crore) and ICICI Bank (Rs101 crore).
Daily Call - Nov 10 2008
The markets are likely to take-off from where they left on Friday. The reasons are obvious. First is that the US markets have done well in terms of taking in its stride the adverse job data that came in on Friday. And secondly the Chinese have announced a massive half a trillion dollars economic stimulus plan. While we remain skeptical about the ability of China to make up for the lost GDP growth of the western hemisphere, it will never the less, give the commodities a bounce.
Commodity stocks will be in demand. Metal stocks had seen healthy longs in the derivatives on Friday. These stocks should see a pop in the opening trade and cement stocks could also join the rally. The Chinese Tiger balm should sooth the frayed nerves of the commodity stocks.
Pre Session Commentary - Nov 10 2008
Today a market is expected to have positive opening on favorable global cues. The market looks strong as US markets ended with gains and the Asian markets made are trading higher. On Friday, Domestic market closed in green after showing volatility during the first half of the trading on significant buying over the ground. The Indian market opened on downbeat note and soon turned choppy on the back of negative cues from the US markets. Market continued to swing between positive and negative territory till mid session but turned its movement and started recovering since afternoon. Further, market continued its northward journey till end to close with gains. Positive European markets, improvements on the Asian markets and a positive mood in US index futures also added to the sentiments. The BSE Sensex bounced back to 10,000 level during final trading but ended below that level and NSE Nifty closed above 2,900. From the sectoral front, the Power, PSU, Oil & Gas, Metal, Reality, Teck, IT and Bank stocks were in limelight as most of the buying was seen from these baskets. We expect that market to trade higher during the trading session.
The BSE Sensex closed higher by 230.07 points at 9,964.29 and NSE Nifty ended up by 80.35 points at 2,973. The BSE Mid Caps and Small Caps closed with gains of 36.97 points 3,355.38 and by 19.83 points at 3,900.10. The BSE Sensex touched intraday high of 10,065.37 and intraday low of 9,631.59.
Friday, the US stock market ended with gains despite weak economic and earnings data. Nonfarm payrolls declined 240,000 in October, lifting the unemployment rate to a 14-year high of 6.5% from 6.1% the month before.
The Dow Jones Industrial Average (DJIA) closed higher by 248.02 points at 8,943.81. NASDAQ index gained 38.70 points to 1,647.40 and the S&P 500 (SPX) surged 26.11 points to close at 930.99 points.
Indian ADRs ended up. In technology sector, Satyam ended higher by (10.64%) along with Infosys gained (7.97%), Wipro ended up by (6.51%) and Patni Computers closed higher by (8.79%). In banking sector ICICI Bank was up by (8.93%) and HDFC Bank gained (4.93%). In telecommunication sector, Tata Communication inclined by (4.92%), and MTNL was up by (8.42%). Sterlite Industries increased by (4.03%).
Today major stock markets in Asia are trading higher. China has announced a massive economic stimulus package worth $ 586 billion in an attempt to lift its weakening economy. Further, Taiwan cuts interest rates by 25 bps, fourth time in two months after exports dropped in October by most in three years.
Hang Seng is higher by 850.44 points at 15,093.87. Further Japan''s Nikkei added 470.90 points at 9,053.90 and Singapore''s Straits Times gained 26.21 points at 1,889.70. The Taiwan Weighted surged 2.31 points at 4,744.64 and South Korea’s Seoul Composite gained 20.41 points at 1,154.90.
The FIIs on Friday stood as net seller in equity and in debt. Gross equity purchased stood at Rs1522.90 Crore and gross debt purchased stood at Rs131.80 Crore, while the gross equity sold stood at Rs1936.90 Crore and gross debt sold stood at Rs583.90 Crore. Therefore, the net investment of equity and debt reported were (Rs414.00 Crore) and (Rs452.10 Crore) respectively.
On Friday, the Indian rupee ended at 47.65/66 per dollar, virtually unchanged from Thursday''''s close of 47.66/69. It was stuck in a narrow 47.65-47.95 band all day. The Rupee smartly recovered from early losses and closed flat, as the stock market rallies encouraging investors to sell dollars at higher levels on expectations of renewed capital inflows.
On BSE, total number of shares traded was 28.71 Crore and total turnover stood at Rs. 3,458.24 Crore. On NSE, total volume of shares traded was 59.79 Crore and total turnover was Rs 9,254.54 Crore.
Top traded volumes on NSE Nifty – Suzlon Energy with total traded volume of 56379476 shares, followed by Unitech Ltd with 19783631 shares, Hindalco with 16565508 shares, RPL with 13502488 shares and Tata Steel with 12510935 shares respectively.
On NSE Future and Options, total numbers of contracts traded in index futures were 920834 with a total turnover of Rs.12,640.35 Crore. Along with this total number of contracts traded in stock futures were 855955 with a total turnover of Rs.9,203.69 Crore. Total numbers of contracts for index options were 960095 and total turnover was Rs.14,647.02 Crore and total numbers of contracts for stock options were 42397 and notional turnover was Rs.472.26 Crore.
Today, Nifty would have a support at 2,927 and resistance at 3,152 and BSE Sensex has support at 9,736 and resistance at 10,550.
Market may rise on positive global cues
The gains in the US markets and positive opening in the most of the Asian indices may help the local market to add gains. However, bouts of high volatile moves and marginal rise in crude oil prices could dampen the sprit of the market. Among the key indices, the Nifty has a strong resistance at 5750 and has a key support at 5394 levels in the near-term. The Sensex has a likely support at 18250 and may face resistance at 19000.
US indices posted gains on Friday with the Dow Jones added 248 points at 8944, the Nasdaq was up 39 points at 1647.
Except Tata Mototrs of the Indian ADRs trading on the US bourses closed in the green. Satyam led the pack with gains of over 10.64% followed by ICICI Bank, MTNL and Patni Computers which gained above 8%. Infosys, Wipro, Dr Reddy's, HDFC Bank, VSNL and Rediff gained over 3-7% each.
Crude oil prices in the US markets moved up marginally, with the Nymex Light crude oil for December delivery moving up by 27 cents to close at $61 a barrel. In the Commodity segment, the Comex gold for December series gained $2 to settle at $734.20 a troy ounce.
Trading Calls - Nov 10 2008
Nifty (2973) Sup 2910 Res 3045
Buy Bharti (650)
SL 645 Target 660, 663
Buy Aban (970)
SL 962 Target 986, 990
Buy Dr Reddy (407)
SL 402 Target 417, 419
Buy HDFC (1700)
SL 1685 Target 1730, 1740
Sell ABB (497)
SL 502 Target 487, 485
Daily News Roundup - Nov 10 2008
ONGC Videsh informs London Stock Exchange that it is yet to receive approvals from the Russian anti-monopoly authority for acquiring Imperial Energy Corporation.(BL)
BSNL to spin off infrastructure business into separate company.(ET)
Gujarat NRE Coke is in the process of setting up a one-million-tonne coke making plant near Krishnapatnam in Andhra Pradesh.(BL)
Adani Group says its first power plant of 330MW capacity to be operational in first quarter of 2009.(Mint)
JSW Steel to cut output by 20% in November.(BS)
Hyderabad-based Lanco Infratech has emerged as the sole bidder for the Punjab government's 1,200 MW thermal plant at Rajpura.(BS)
Corus, a subsidiary of Tata Steel, says it would cut crude steel production by about 30% till March 2009.(BL)
Sun Pharma extends Taro share purchase offer to December 19.(BS)
United Spirits to incur Rs500mn in capital expenditure.(BS)
Indian Oil Corp will shut a 120,000 barrels per day crude unit and some secondary plants at its Panipat refinery for maintenance.(TOI)
Axis Bank raises Rs15bn through NCDs.(ET)
Daiichi Sankyo concludes Ranbaxy deal; stake goes up to 63.9% in the latter. (ET)
Government asks Reliance Industries to supply LNG to Dabhol project.(Mint)
FIPB rejects Tata Investments’ plan for zero coupon bonds.(BS)
SAIL is likely to cut down production from its steel unit at Rourkela.(DNA)
Aurobindo Pharma receives final approval from the US FDA to manufacture and market Sertraline Hydrochloride oral concentrate.(BL)
Glenmark Pharmaceuticals postpones acquisition plans in the US but hopeful of clinching two out licensing deals in 2008-09.(TOI)
ONGC, SK Energy win Colombian blocks.(BS)
Reliance Industries is understood to be evaluating at least four overseas locations for setting up two plants for semiconductor fabrication and manufacturing solar grade wafers and polysilicon.(DNA)
Maruti Suzuki India plans to revamp its entire product portfolio to meet EU’s standards by 2010.(ET)
Canara Bank cuts home, auto loan rates.(BS)
BSNL says that it is looking at acquiring companies in Africa and Middle East.(DNA)
Videocon may reconsider plans for cash and carry.(ET)
Blue Dart earmarks Rs1bn capex.(BS)
Tata Motors says it will shut down its CV plants in Pune and Lucknow for six days during this month due to slump in demand.(FE)
Realty prices to fall 50%, according to chairman of SBI.(FE)
Corus to lay off 400 employees to cut expenditure.(BS)
Lupin to launch cardiac drug to tap Rs36bn market.(BS)
Elder Pharmaceuticals enters into a manufacturing and marketing agreement with Japanese pharma company, Daiwa Pharmaceuticals.(ET)
Kalpataru Power Transmission plans three more agri-logistics parks in Gujarat.(BS)
IDBI cuts benchmark PLR by 75 bps to 13.5% pa.(ET)
Telco Construction Equipment Company, a subsidiary company of Tata Motors, to have five day week till the end of November.(ET)
GM plans a rival to Maruti’s M800 model.(TOI)
Airports Authority of India plans to encash Kingfisher’s bank guarantee worth Rs700mn unless the airline comes with either cash or a plan to clear its dues within a week.(TOI)
Forex reserves declined by US$5.5bn to touch US$253bn for the week ended October 31.(BL)
Fertilizer subsidy for the current fiscal expected to decline by around Rs190bn.(BS)
Railways cuts freight charges on iron ore for export by 10-15%.(ET)
DoT is planning to ban sale of equity shares owned by Indian promoters of new telecom companies for a period of 3-5 years.(BL)
RBI to provide forex swap line to banks.(BL)
Power firms may get to sell more to open access buyers.(ET)
Index for six core sector industries increased by 5.1% in September 2008, lower marginally compared with 5.8%.(BL)
According to finance ministry, Rs131bn tax arrears mop-up doubtful.(BS)
Government to invest Rs250bn in the next six months without creating adverse impact on fiscal deficit, says Commerce and industry minister.(FE)
Prime Minister projects GDP growth at 7-7.5% next fiscal.(TOI)
Government considering a proposal to extend withholding tax exemptions on core sector ECBs.(FE)
Ship orders decline 90% in October.(BS)
India expects to earn US$840mn-US$1bn in revenues annually from a higher spectrum fee to be levied on mobile telecoms firms, says Telecom Minister.(FE)
Smart start…keep learning!
We learn something every day, and lots of times it's that what we learned the day before was wrong.
We have some good news. We have some bad news. The learnings of recent times make us worry though. The good news first (though we know you'll hurry to see what the bad news is). At the very outset, it looks like a better day for global equity markets, notwithstanding the grim US unemployment data released on Friday. In fact, one can trace the seemingly all-pervasive feel-good to that day's trading on Wall Street. US shares rallied in the face of the ugly jobs report and GM's big quarterly loss. The Dow Jones Industrial Average advanced 2.9%, while the Standard & Poor's 500 index gained 2.9% and the Nasdaq Composite rose 2.4%. Major European indices also gained between 2-2.5%. This morning, Asian markets are in a really cheerful mood, boosted partly by China's big-bang economic stimulus package and Taiwan's rate cut. Group of 20 (G 20) nations have also signaled that they will keep lowering borrowing costs and increase public spending, in a bid to arrest the economic slump across the globe.
All these measures have lifted the spirits of Asian markets. Japan's Nikkei ended the morning session up 5.5% at 9,053.90 while the Hang Seng in Hong Kong jumped 6.1% in early trading and the Shanghai Composite index was up 6.5%. Given the bullish sentiment across Asia, we expect a gap-up opening for Indian stocks as well. In fact, the Nifty futures contract for November settlement was up 2% in Singapore. So, the bulls can look forward to a bright day ahead.
Having said that, the good times may not last too long, as the overall trend still remains negative due to the global economic gloom. There is no dearth of bad news. US employers cut 240,000 jobs from their payrolls in October, marking the 10th straight month of cuts. That brought the number of job losses in 2008 to nearly 1.2mn. The unemployment rate surged to 6.5%. Both figures were worse than expected. Japanese machinery orders tumbled 10.4% last quarter, matching the biggest drop on record. China's exports are likely to have grown at the slowest pace since March 2007. Rio Tinto will cut output at its iron ore mines in Western Australia by 10% because of reduced demand from steelmakers in China. Already, Brazilian rival Vale has taken the lead in cutting iron ore output.
Back home, we have seen a slew of companies cutting production, capex plans and even jobs to tide over the sharp slowdown in the Indian economy. India Inc. has also postponed plans for new investments and ventures as it struggles to cope with the rising headwinds. Talking of the Indian economy, the Government will release the IIP data for September on Wednesday. The core sector, comprising six key industries and forming a quarter of the IIP, has shown improvement over August. So, one can expect a bounce from August's dismal IIP figures. However, in the past we have seen lot of fluctuations in the IIP numbers. So, one should not get carried away if there is indeed a big jump in it in September.
FIIs were net sellers of Rs192.7mn (provisional) in the cash segment on Friday while local institutions too pulled out Rs1.47bn. In the F&O segment, the foreign funds were net sellers at Rs819mn. On Thursday, FIIs were net sellers of Rs4.14bn in the cash segment.
US stocks rallied on Friday, with investors using Wall Street's record-breaking slide over the last two sessions as a reason to scoop up battered shares, despite a brutal October jobs report and GM's massive quarterly loss.
The Dow climbed 248 points to close at 8,943 while the S&P 500 gained 26 points to end at 930 and the Nasdaq rose 38 points to finish at 1,647.
All three major stock gauges fell for the week, after the previous week's big rally. The Dow and the Nasdaq both lost 4.2% in the week, while the S&P 500 fell 3.8%.
US stocks had been in the positive zone throughout Friday's session, losing some steam after the late-morning release of General Motors' big loss, before rebounding again. Stocks again lost some ground ahead of President-elect Barack Obama's afternoon press conference.
However, they managed gains as investors took advantage of a big selloff in the two sessions following Obama's historic victory, with recession fears sparking a retreat after a sharp rally through Election Day. The Dow had lost 929 points, its biggest two-day point loss ever.
The Wall Street Journal reported that part of this massive selloff was as a result of selling on the part of Citadel Investment Group. The $16bn hedge fund has reportedly been asked by several banks to post additional collateral to cover big losses, the WSJ reported.
Obama said that the US economy is facing the greatest economic challenge of its lifetime, and said he will take all necessary steps to confront the crisis. He said if a second stimulus package is not passed by the lame-duck Congress that it will be his first priority once he takes office on January 20.
GM posted a third-quarter operating loss of $4.2bn, or $7.35 per share, far worse than expected. GM said it burned through $6.9bn in the quarter and is running out of cash. The company also indicated that merger talks with Chrysler have ended. GM shares plunged 9%.
Ford reported a $3bn operating loss in its latest quarter and said it would cut staff and capital spending in order to hang on to capital. Its shares rose 2%. Along with Chrysler, the heads of Ford and GM had met with Congressional leaders on Thursday to discuss a potential bailout.
In the day's other economic news, pending home sales fell 4.6% in September, after rising 7.5% in the previous month. Another report showed wholesale inventories fell 0.1% in September after rising 0.6% in the previous month.
A third report showed borrowing by consumers increased in September by more than had been expected.
The dollar fell against the euro and gained versus the yen. COMEX gold for December delivery rose $2 to settle at $734.20 an ounce.
US light crude oil for December delivery settled up 27 cents to $61.04 a barrel on the New York Mercantile Exchange, after ending the previous session at a 19-month low. Gasoline prices fell another 2.6 cents to a national average of $2.314 a gallon.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.78% from 3.69% late on Thursday.
The credit market continued to improve. The 3-month Libor fell to 2.29% from 2.39% on Thursday, a nearly four-year low, according to Dow Jones. Overnight Libor held steady at 0.33%, after falling to an all-time low of 0.32% earlier this week. Libor is a key interbank lending rate.
Europe stocks closed higher on Friday. After two days of big losses, the pan-European Dow Jones Stoxx 600 index climbed 1.8% to 219.26. For the year, however, the Stoxx 600 is down close to 40%.
The UK's FTSE 100 , a day after a 1.5% point rate cut from the Bank of England, advanced 2.7% to 4,387.14. Germany's DAX 30 jumped 2.6% to 4,938.46, and the French CAC 40 rose 2.4% to 3,469.12.
In the emerging markets, the Bovespa in Brazil was up 0.8% at 36,665 while the Bolsa in Mexico rose 1% to 19,865. The RTS index in Russia was down 2.2% to 760 and the ISE National 30 index in Turkey fell 3% to 34,013.
The BSE benchmark Sensex started off the day lower on the back of negative cues from the US markets and mixed cues from the Asian markets. The index, however, after trading in a narrow range broke from its range bounced back into the positive zone led by gains in the Power, PSU, oil & gas and metal stocks.
Finally, the BSE benchmark Sensex surged 230 points or 2.3% to close 9,964 and the NSE Nifty index was up 80 points to close at 2,973.
Among the 30-components of Sensex, 25 stocks were in the positive terrain and 5 stocks ended in the red. Reliance Industries, ITC, HDFC, SBI and RCom were among the major gainers. On the other hand, ICICI Bank, M&M and ONGC were among the major laggards.
Shares of Tata Motors slipped by a percent to Rs159. Tata Motors clarified that in its course of operation, adjusts its production to meet the demand for its products, like working on single shift basis or three shift basis instead of normal / double shift operations as also temporary shut down.
This shut down at Pune is one such measure taken by the Co. to avoid unnecessary inventory build up. The scrip touched an intra-day high of Rs162 and a low of Rs148 and recorded volumes of over 9,00,000 shares on BSE.
Shares of Roman Tarmat rallied by over 9% to Rs25.80 after the company announced that got new work orders amounting to Rs442mn from Cochin International Airport Ltd. for re-carpeting of runways along with related pavment up gradation work at Cochin International Airport, Nedumbassery. The contract period is for 9 months.
The scrip touched an intra-day high of Rs25.85 and a low of Rs23 and recorded volumes of over 2,000 shares on BSE.
Shares of JSW Steel plunged by over 5% to Rs285 after the company announced that it would cut total production by about 20% from November.
The company’s October flat product output also dropped 2% to 247,000 tons. However, steel production for the month of October rose 5%. The scrip touched an intra-day high of Rs297 and a low of Rs273 and recorded volumes of over 4,00,000 shares on BSE.
Shares of Bharat Forge gained by 0.5% to Rs101 after 2.4% of equity shares changed hands in a single transaction. The scrip touched an intra-day high of Rs109.5 and a low of Rs100 and recorded volumes of over 2,00,000 shares on BSE.
Shares of Alembic rallied by over 12% to Rs34.7 after the board of directors of the company announced that they would consider buyback of equity shares on November 14, 2008. The scrip touched an intra-day high of Rs36 and a low of Rs29.2 and recorded volumes of over 1,00,000 shares on BSE.
Market may continue to witness high level of volatility in the coming week, as it struggles to find a bottom after rebounding last week from the recent lows. As usual, the Indian indices will continue to be at the mercy of global cues, as the result season is over and there are hardly any local factors to drive the market.
YES Bank
Investors can consider accumulating the YES Bank stock at the current market price (CMP) of Rs 81.9. The stock has gained 49 per cent from its all-time low of Rs 55 on October 27, but remains a good investment option for investors with a two-three year time frame.
At the CMP, YES Bank is trading at 10.4 times its trailing twelve-month earnings and 1.7 times its latest book value.
The Price-earnings multiple is at a discount to that of bigger private sector peers such as ICICI Bank, Axis Bank and HDFC Bank and is cheap for a bank which has high growth potential.
Growth in advances
While growth rates of the past two years may moderate on a larger base, healthy growth in corporate advances may result in above-industry growth rates for YES Bank. Its loan book is dominated by the wholesale business-corporate advances (58 per cent) and business banking (41 per cent).
A high proportion of core ‘other income’ (43 per cent), negligible exposure to retail advances (0.15 per cent) where there are quality concerns, low NPAs and strong profitability ratios (Return on Assets of 1.4 per cent, Return on Equity of 18 per cent) are investment positives.
Sustained growth
YES Bank has sustained strong net profit (growth 40.5 per cent), advances and deposit growth (53 per cent and 44 per cent respectively) in the September quarter.
This is backed by net interest income growing by 50 per cent, even as Net Interest Margins moderated from 2.88 per cent to 2.80 per cent. Though the yield on advances increased due to the lending rate being increased, cost of funds moderated the margins.
Due to its focus on wholesale lending, the bank has low gross NPA/advances at 0.19 per cent, the lowest among all banks. Slippages, however, cannot be ruled out as the size of the book increases.
Over the next few quarters, even as lending rates ease from current levels, robust demand for credit, liquidity easing measures by the Reserve Bank of India and growth in income from third-party distribution, resulting from branch expansion (now 14 per cent of other income), may help earnings growth.
A favourable equity market over the medium term may also aid income from treasury and financial advisory services.
Key constraint
A higher cost structure, due to a lower proportion of low-cost deposits (9 per cent), is a key constraint for the bank.
However, the bank targets 25 per cent low-cost deposits in the next 18 months, with branch expansion. Increased risk in the loan book, as it expands in size, and a sharp deterioration in the macro environment for companies, are also a risk.
Bartronics India
The IT hardware and software segment sports many stocks that are at ‘attractive’ valuations. But many of them are grappling with businessand/or currency risks that make them a risky investment even at single-digit price-earnings multiples. This fear is compounded for mid- and small-cap stocks.
However, there are stocks in this category with strong business prospects, sustainable growth and a lower risk-to-earnings from macro factors.
In this light, investors with a one-two year perspective can buy the shares of Bartronics, considering its strong business prospects in a niche area and reasonable valuations. At the current share price of Rs 81, the stock trades at about three-four times its likely earnings for 2008-2009.
The triple-digit growth experienced by Bartronics in revenues and profits over the last three years has come on the back of a rapid scale-up of operations and expanding geographic presence, including a strong domestic focus. For a player which is hardware-intensive, a net profit margin of over 17 per cent is healthy. This is likely to be maintained for now.
Bartronics’ automatic information and data capture (AIDC) business and the smart-card business, which has seen an increasing pipeline of orders from government initiatives, provides a sustainable revenue stream for the company. Importantly, many of these deals may provide scope for improving margins over the next couple of years. Bartronics primarily sells products and solutions for data capture in the areas of logistics and inventory management, time and attendance management and asset tracking operations.
It has now enhanced its AIDC offering to include services such as bar coding, biometrics, radio frequency identification and radio frequency data communications and electronic article surveillance.
The company derives 50 per cent of its revenues from India, 30 per cent from the US and the rest from countries such as Singapore and Malaysia, providing reasonable geographic diversification.
Smart Cards drive growth
The smart cards business, for which the company has its own manufacturing facility, holds considerable promise with opportunities in areas such as SIM cards, identity cards, credit cards and social security cards. The company has a production capacity of 80 million smart cards. Bartronics has subsidiaries in Singapore and the US to cater to the local markets. The Singapore facility has already started contributing to profits. This segment is expected to contribute to over 50 per cent of total revenues in the next couple of years.
Government Deal
Bartronics continues to benefit from government technology initiatives.
For example, the Bhamashah Financial Empowerment Scheme of the Government of Rajasthan intends to cover about 50 lakh families through biometrically identifiable smart cards. Bartronics has commenced operations for this project, valued at about Rs 150 crore.
A similar project, involving issuance of 39 lakh smartcards envisaged by the Bihar Government, has also kicked off.
Bartronics’ Rs 400-crore contract win from the Employees State Insurance Corporation (ESIC) further strengthens its domestic presence, apart from bolstering its order-book.
The order-book size of around Rs 500 crore at the end of the second quarter of this fiscal,amounts to 1.8 times its 2007-08 revenues.
The present contract involves providing smart cards across 609 districts in the country under the Rashtriya Swasthya Bhima Yojna.
The revenue inflow is likely to be over several years from this contract.
The company’s target to reach 100 per cent utilisation from the 65 per cent levels of its manufacturing facility, appears to be on course.
These multi-purpose smart cards also mean better realisations for the company.
There is also a national identification card project on the anvil to be introduced across the country and Bartronics would look at tapping this opportunity.
Promise in AIDC
In AIDC, the company is well-placed to capture a significant share of manufacturing clients, both in India and abroad.
The boom in organised retail in the country also offers opportunities to ramp-up revenues.
With strong client base in the manufacturing space — in the areas of inventory control and material tracking — this segment continues to be the main contributor to revenues (over 50 per cent) as of now.
With the Railways also looking at RFID (radio frequency identification) enablement across trains in the country and increased spends therein, Bartronics with its prominent presence in this segment appears well-qualified to capitalise on investments made by the Railways in IT enhancement. East Coast Railways, Reliance Group, the Vedanta group and several State governments are the company’s latest client additions.
Risks
Competition from players such as CMC in the RFID space is a risk. Direct entry by the company’s overseas principals (from which Bartronics sources some products), into the Indian market, is also a risk if there is an absence of non-compete agreements.
Bullion metals end mixed for the week
Weak job reports hammers the dollar thereby lifting gold prices
Gold prices ended higher on Friday, 07 November, 2008. Gold prices rose as dollar weakened. The rise in US unemployment figure weighed on the greenback on that day. Silver prices dropped on Friday.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. Losses in equity markets had also forced traders to sell gold. Since past couple of weeks, precious metals, mainly gold, had dropped as traders tried to gain back some of the money that had lost in other markets.
On Friday, Comex Gold for December delivery rose $2 (0.3%) to close at $734.2 an ounce on the New York Mercantile Exchange. Prices earlier rose to a high of $744.9. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (29.4%) since then. For the week, gold prices ended higher by 2.2%. For the month of October, gold ended lower by 18%. It was the biggest percentage loss for gold since February, 1983.
This year, gold prices have lost 11.6% till date. The dollar index has gained 9% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Friday, Comex silver futures for December delivery fell by 9 cents (0.9%) to $9.963 an ounce. For the week, silver gained 2.3%. For the month of October, silver slipped by 20%. Till date, silver has lost 33% this year. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.
At the currency market on Friday, the dollar weakened against the euro and the British pound after the Labor Department reported the U.S. economy lost 240,000 jobs in October.
The Labor Department reported on friday, 07 November, 2008 that the U.S. labor market has collapsed in the past three months, shedding 651,000 jobs and driving the unemployment rate to its highest point in more than 14 years.
U.S. nonfarm payrolls fell by 240,000 in October, worse than expected lifting the unemployment rate to 6.5% from 6.1%. The job losses and the unemployment rate were worse than expected. Over the first 10 months of 2008, 1.2 million jobs have been lost with over half of those losses coming in the past three months.
Payrolls losses in September were revised down sharply to 284,000, the largest job loss in seven years.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the latest move, the Federal Reserve has cuts its target bank lending rate to 1% from 5.25% in September, 2007. The Fed did it in eight steps.
Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
Crude ends marginally higher
Prices shed 10% for the week
Crude prices ended marginally higher on Friday, 07 November, 2008. Economic concerns and weak economic report were the main reasons for crude prices to remain under pressure on that day. But ultimately, crude managed little gains due to the weak dollar.
On Friday, crude-oil futures for light sweet crude for December delivery closed at $61.04/barrel (higher by $0.27 or 0.4%) on the New York Mercantile Exchange. Prices reached a low of $59.97 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63.5% since then. For the week, prices fell by 10%. On a yearly basis, crude price is lower by 37.5%. For this year in 2008, crude prices have dropped 38.5%.
For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
At the currency market on Friday, the dollar weakened against the euro and the British pound after the Labor Department reported the U.S. economy lost 240,000 jobs in October.
The Labor Department reported on friday, 07 November, 2008 that the U.S. labor market has collapsed in the past three months, shedding 651,000 jobs and driving the unemployment rate to its highest point in more than 14 years.
U.S. nonfarm payrolls fell by 240,000 in October, worse than expected lifting the unemployment rate to 6.5% from 6.1%. The job losses and the unemployment rate were worse than expected. Over the first 10 months of 2008, 1.2 million jobs have been lost with over half of those losses coming in the past three months.
Payrolls losses in September were revised down sharply to 284,000, the largest job loss in seven years.
The EIA reported earlier this week that crude supplies were unchanged last week and remained at 311.9 million barrels for the week ended 31 October, 2008. Data show that crude stocks had climbed nearly 22 million barrels over the last six weeks. But motor gasoline supplies climbed unexpectedly, up by 1.1 million barrels in the latest week to 196.1 million. Supplies of distillates, which include heating oil, rose 1.2 million to 127.8 million.
OPEC officials decided last month at its meeting at Vienna that OPEC will pare production by 1.5 million barrels a day w.e.f 1 November, 2008. The official production quota is currently 28.8 million barrels, and it cut by 1.5 million in November.
Last month, the Centre for Global Energy Studies said that global oil demand may fall for the first time in 15 years in 2008 and stagnate next year.
For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.
Against this background, December reformulated gasoline ended up 1 cent to $1.35 a gallon and December heating oil gained 4 cents to $1.98 a gallon.
December natural gas fell 27 cents to $6.98 per million British thermal units
Oriental Bank - BUY
We recommend a buy in Oriental Bank of Commerce from a short-term horizon. It is clearly apparent from the charts of Oriental Bank of Commerce that following an intermediate downtrend from January peak of Rs 321, it found support at the early July low of Rs 122 and began to consolidate sideways. In October, the stock took support at around Rs 122, a significant support level and bounced upward.
We notice that the stock’s recent bounce appears to be the second bottom of a double bottom (bullish reversal) pattern. A bullish divergence in the daily relative strength index (RSI) supports the stock’s recent reversal. The daily RSI is rising in the neutral region and the weekly RSI is also behaving similarly. The moving average convergence and divergence (MACD) is signalling a buy, supporting our view.
We are bullish on the stock from a short-term horizon. We expect the stock’s upmove to prolong until it hits our price target of Rs 164. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 140.
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