Eveninger - Apr 13 2009
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Monday, April 13, 2009
BSE Bulk Deals to Watch - Apr 13 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
13/4/2009 507852 ADDI INDUSTR CHAMAN LAL JAIN B 233901 4.61
13/4/2009 507852 ADDI INDUSTR NOSTALGIA CONBUILD PVT LTD S 133500 4.61
13/4/2009 507852 ADDI INDUSTR AKNANDWANI HUF S 96000 4.61
13/4/2009 524075 ALBERT DAVID DARSHAN FINANCIAL SERVICES PVT LTD B 30394 49.53
13/4/2009 524075 ALBERT DAVID RB POLYMERS LTD S 30469 49.53
13/4/2009 590059 BIHAR TUBES AVANTIKA ENTERPRISES S 107082 46.45
13/4/2009 531337 CHAN GUIDE I PREMLATA REMESH SARAOGI B 100000 18.22
13/4/2009 531337 CHAN GUIDE I RAJESH NEMICHAND JAIN S 88110 18.22
13/4/2009 532707 DYNEMIC PRO GHANSHAM G. DUSEJA B 100000 25.37
13/4/2009 532707 DYNEMIC PRO PALAKDASHARATHBHAIPATEL S 65950 25.18
13/4/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 96611 168.86
13/4/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 96611 169.15
13/4/2009 523277 G V FILMS LT CREDIT SUISSE SINGAPORE LIMITED S 3030000 1.21
13/4/2009 532947 IRB INFRA DEUTSCHE SECURITIES MAURITIUS LIMITED S 1762596 108.17
13/4/2009 500540 PREMIER LTD SURYA CORPORATION B 158519 45.50
13/4/2009 517447 R S SOFTW I DHEERAJ KUMAR B 40771 12.96
13/4/2009 517447 R S SOFTW I ASHOK POPATLAL SHAH S 63291 12.61
13/4/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC CHANDARANA INTERMEDIARIES BROKERS P. LTD B 99881 801.78
13/4/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD B 280062 795.80
13/4/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC CHANDARANA INTERMEDIARIES BROKERS P. LTD S 101481 801.56
13/4/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD S 280062 797.21
13/4/2009 531952 RIBA TEXTILE MONA SANDIP SHAH B 40000 45.69
13/4/2009 500366 ROLTA IND OPG SECURITIES P LTD B 2977566 93.55
13/4/2009 500366 ROLTA IND OPG SECURITIES P LTD S 2977566 93.72
13/4/2009 531898 SANGUINE MD VISHU ENTERPRISE B 148000 2.55
13/4/2009 531898 SANGUINE MD BLC TRADING AND AGENCIES PRIVATE LIMITED S 200112 2.53
13/4/2009 531898 SANGUINE MD ANKURANILAGRAWAL S 77701 2.54
13/4/2009 521034 SOMA TEX IND BASMATI SECURITIES PVT. LTD. B 196693 9.52
13/4/2009 521034 SOMA TEX IND S V ENTERPRISES B 189100 9.52
13/4/2009 521034 SOMA TEX IND S V ENTERPRISES S 220491 9.61
13/4/2009 512413 SPECTACLE BHANUMATIDHARAMRAJGIRI B 335279 52.11
13/4/2009 512413 SPECTACLE BHANUMATIDHARAMRAJGIRI S 298787 52.46
13/4/2009 512048 SPLASH MEDIA SURESHKUMARKHANDELIA B 10000 80.75
13/4/2009 512048 SPLASH MEDIA MANJUKHANDELIA B 10000 80.75
13/4/2009 512048 SPLASH MEDIA KIRIT V DAVE S 24500 80.75
13/4/2009 519228 TEMPT.FOODS VENTURE BUSINESS ADVISORS PVT LTD B 489147 30.55
13/4/2009 519228 TEMPT.FOODS ARION COMMERCIAL PRIVATE LIMITED S 315015 30.53
13/4/2009 519228 TEMPT.FOODS AMRABATHI INVESTRA PVT. LTD. S 184985 30.55
13/4/2009 505854 TRF LIMITED SUNDARAM BNP PARIBUS MUTUAL FUND B 35000 335.00
13/4/2009 505854 TRF LIMITED SUNDARAM PNB PARIBUS MUTUAL FUND B 31600 335.00
13/4/2009 505854 TRF LIMITED DSP MERILL LYNCH MUTUAL FUND S 65546 335.00
13/4/2009 531874 VENUS VENT CHANDRA SHEKHAR SUNIL BHATT B 55095 33.99
13/4/2009 507410 WALCHAND IN ALPHA PORT SERVICES PVT LTD S 198765 129.19
13/4/2009 531249 WELL PACK PA KAMLESH NAHAR S 30000 144.30
13/4/2009 514470 WINSOME TEXT HIREN BHUPATRAI MEHTA B 29973 34.89
NSE Bulk Deals to Watch - Apr 13 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
13-APR-2009,ALCHEM,Alchemist Ltd,HS FII INVESTMENTS LTD,BUY,454000,55.01,-
13-APR-2009,BAJAJHIND,Bajaj Hindusthan Ltd,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,1200000,65.76,-
13-APR-2009,EVERONN,Everonn Systems India Lim,C D INTEGRATED SERVICES LTD,BUY,81101,169.96,-
13-APR-2009,GOLDTECH,Goldstone Tech Ltd.,ANKIT RAJENDRA SANCHANIYA,BUY,5616,16.40,-
13-APR-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1806164,129.57,-
13-APR-2009,HDIL,Housing Development and I,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,BUY,1955000,133.16,-
13-APR-2009,IFCI,IFCI Ltd.,PRASHANT JAYANTILAL PATEL,BUY,3874010,23.62,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,A TO Z STOCK TRADE PRIVATE LIMITED,BUY,94398,803.02,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,ADROIT FINANCIAL SERVICES PVT LTD,BUY,116131,798.07,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,ARCADIA SHARE AND STOCK BROKERS PVT LTD,BUY,168232,800.10,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD,BUY,240358,799.13,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,CHANDARANA INTERMEDIARIES BROKERS P. LTD,BUY,90551,797.82,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,370346,791.78,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,P R B SECURITIES PRIVATE LTD,BUY,97255,812.26,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,SMC GLOBAL SECURITIES LTD.,BUY,74611,793.73,-
13-APR-2009,ROLTA,Rolta India Ltd.,ADROIT FINANCIAL SERVICES PVT LTD,BUY,1163923,92.56,-
13-APR-2009,ROLTA,Rolta India Ltd.,C D INTEGRATED SERVICES LTD,BUY,1354526,94.46,-
13-APR-2009,ROLTA,Rolta India Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,1227207,96.69,-
13-APR-2009,ROLTA,Rolta India Ltd.,WARD FERRY MANAGEMENT LTD A/C WF ASIAN SMALLER COMPANIES FU.,BUY,1763000,84.82,-
13-APR-2009,SATYAMCOMP,Satyam Computers Ltd,OM INVESTMENTS,BUY,6243714,51.77,-
13-APR-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,BUY,5014060,51.43,-
13-APR-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PVT LTD,BUY,1339156,14.70,-
13-APR-2009,ADORWELD,Ador Welding Limited,RELIANCE CAPITAL MUTUAL FUND,SELL,100000,112.80,-
13-APR-2009,ALCHEM,Alchemist Ltd,GANESH VISUAL AID PRIVATE LTD,SELL,451473,55.00,-
13-APR-2009,EVERONN,Everonn Systems India Lim,C D INTEGRATED SERVICES LTD,SELL,79601,170.42,-
13-APR-2009,GOLDTECH,Goldstone Tech Ltd.,ANKIT RAJENDRA SANCHANIYA,SELL,106597,16.16,-
13-APR-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1806164,129.52,-
13-APR-2009,IFCI,IFCI Ltd.,PRASHANT JAYANTILAL PATEL,SELL,3874010,23.60,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,A TO Z STOCK TRADE PRIVATE LIMITED,SELL,94398,804.42,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,ADROIT FINANCIAL SERVICES PVT LTD,SELL,116931,793.15,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,ARCADIA SHARE AND STOCK BROKERS PVT LTD,SELL,172032,797.57,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD,SELL,240358,799.52,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,CHANDARANA INTERMEDIARIES BROKERS P. LTD,SELL,90551,799.66,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,370346,792.28,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,P R B SECURITIES PRIVATE LTD,SELL,97255,813.04,-
13-APR-2009,RIIL,Reliance Indl Infra Ltd,SMC GLOBAL SECURITIES LTD.,SELL,83386,801.18,-
13-APR-2009,ROLTA,Rolta India Ltd.,ADROIT FINANCIAL SERVICES PVT LTD,SELL,1163923,93.61,-
13-APR-2009,ROLTA,Rolta India Ltd.,C D INTEGRATED SERVICES LTD,SELL,1354526,94.66,-
13-APR-2009,ROLTA,Rolta India Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,1227207,96.79,-
13-APR-2009,SATYAMCOMP,Satyam Computers Ltd,OM INVESTMENTS,SELL,6243714,51.81,-
13-APR-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,SELL,5014060,51.46,-
13-APR-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PVT LTD,SELL,1272604,14.73,-
Post Session Commentary - Apr 13 2009
Indian market ended on firm note after a volatile session on sustained buying seen in key stocks. The firm cues from the global markets also contributed to the upward journey. Resumption of buying by the foreign funds also led buying in the domestic bourses. However, market pared some of its gains after Commerce Secretary G K Pillai, said that India’s exports are expected to drop about 31% in March 2009 from a year earlier amid the global slump. He said that provisional figures of India''s exports in March fell below $12 billion, showing negative growth for the sixth month in a row. The import may also continued to fall by 37%.
The domestic market started the day on green territory backed by positive cues from the global markets. Thursday, the US stock market surged on the back of better than expected earnings pre-announcement from Wells Fargo that has fueled the financial sector which surged by 15.5%. However, benchmark indices soon turned volatile on some profit booking. Despite firm cues, investors were also cautious as market will remain closed on Tuesday for a holiday. BSE Sensex breached 11,000 mark during the trading and finally ended above 10,950 level. Along with this, NSE Nifty crossed 3,400 level and at last ended above 3,350 mark. From the sectoral front, Metal, Bank, Reality, PSU, Auto, Capital Goods and Power stocks contributed to the most of the buying. Mid Cap and Small Cap stocks also followed the same trend. However, Consumer Durable and IT stocks remained out of favor as witnessed most of selling from these baskets.
Among the Sensex pack 19 stocks ended in green territory and 11 in red. The market breadth indicating the overall health of the market remained positive as 2064 stocks closed in green while 514 stocks closed in red and 64 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 163.36 points at 10,967.22 and NSE Nifty ended up by 40.55 at 3,382.60. BSE Mid Caps and Small Caps closed with gains of 106.57 and 147.61 points at 3,464.92 and 3,915.16 respectively. The BSE Sensex touched intraday high of 11,069.54 and intraday low of 10,800.84.
Gainers from the BSE Sensex pack are Tata Motors (12.01%), Tata Steel (8.31%), Sterlite Industries (7.39%), SBI (6.80%), DLF Ltd (5.04%), HDFC Bank (4.84%), ICICI Bank (4.49%), RCom (3.49%), M&M Ltd (3.39%) and JP Associates (3.25%).
Losers from the BSE Sensex pack are TCS Ltd (1.91%), Wipro Ltd (1.90%), Grasim Indus (1.59%), HUL (1.33%), Infosys Tech (1.22%), NTPC Ltd (1.00%) and HDFC (0.99%).
Indian Market will remain close on Tuesday (14th April 2009) for Dr. Ambedkar Jayanti holiday.
On the global markets front the Asian markets which opened before the Indian market, ended mostly higher with Shanghai getting a boost from upbeat lending data and gains in resource shares. Shanghai Composite, Straits Times index and Seoul Composite ended higher by 69.48, 48.26 and 2.22 points at 2,513.70, 1,876.77 and 1,338.26 respectively. However, Nikkei 225 lost 39.68 points at 8,924.43.
The BSE Metal index advanced by (5.49%) or 373.36 points at 7,174.92. Scrips that gained are NMDC Ltd (19.99%), Jai Corp Ltd (10%), Tata Steel (7.31%), Welspan Gujarat SR (7.41%) and Sterlite Industries (7.39%).
The BSE Bank index increased by (5.07%) or 255.88 points to close at 5,301.15 on fresh buying on expectation of a further easing of the monetary policy by the regulatory body with headline inflation nearing to zero. Main gainers are Indian Overseas Bank (12.97%), Yes Bank (9.55%), Karnataka Bank (8.08%), Canara Bank (8.07%) and Kotak Bank (7.93%).
The BSE Realty index gained (4.14%) or 84.43 points to close at 2,125.76 on hopes that lower rates will spur housing demand. Gainers are Housing Development (15.72%), Parsvnath (8.67%), Pheonox Mill (7.79%), Penland Ltd (5.54%) and Omaxe Ltd (5.31%).
The BSE PSU index increased by (1.76%) or 179.78 points at 5,876.29. NMDCL Ltd (19.99%), ST Trade Corp (14.01%), Indian Overseas Bank (12.97%), Indian Bank (12.08%) and Hind Copper (9.99%) ended in positive territory.
The BSE Auto stocks also gained (2.73%) or 90.05 points to close at 3,384.74. Major gainers are Tata Motors (12.01%), Apollo Tyre (11.72%), MRF Ltd (9.92%), Ashok Leyland (4.93%) and Bharat Forge (4.84%).
The BSE Consumer Durables ended lower by (2.23%) or 43.53 points at 1,906.99. Losers are Titan Ind (7.67%) and Videocon Ind (0.64%).
Satyam Computer ended higher by 3.61%. Tech Mahindra has won the bid for Satyam Computer Services at Rs 58 per share as against L&T offer of around Rs 49 for each Satyam share. Tech Mahindra will have to pay Rs 1757 crore to buy for 31% stake at Rs 58 per share in Satyam Computer Services, whereas for the total 51% stake the company will have to pay Rs 2890 crore. Satyam Computer will have a market cap of Rs 5,666 crore on expanded equity.
Pfizer surged 10.02% on report that its parent Pfizer Inc said it will launch a tender offer to buy a 33.77% stake in the company at a price of Rs 675, representing a premium of 0.16% to the current ruling price.
Sun Pharma gained 1.75%. The drug maker has received US regulatory approval to market Roxicodone, Oxycodone hydrochloride tablets used as painkillers.
Glenmark Pharmaceuticals Ltd. increased by 4.65%. The company (GPL) announced that its candidate for neuropathic pain, osteoarthritis and other inflammatory pain disorders -GRC 10693 has successfully completed Phase I trials in Europe.
NTPC lost 1%. The company as well as NHPC, PowerGrid and Damodar Valley Corporation (DVC) have entered into an agreement to set up a laboratory for testing electrical equipment in the country. They have signed an agreement for the incorporation of a JV company to set up an online high power indigenous test laboratory, an official statement said.
Asian markets kick off week steadily
Singapore, Shanghai, Sensex post-good gains as most of the region closed for Easter holiday
Stock market in Asian region closed in positive territory on Monday, 13 April 2009, as expectations about the recovery in global economy increased. Positive closing on Wall Street on Thursday, led by Wells Fargo, and comments over the weekend by President Barack Obama that glimmers of hope are visible on the horizon of U.S economy, coupled with the announcement of a stimulus package by Japan to revive the economy, influenced sentiment across the markets.
On Wall Street, stock markets ended the week on Thursday with huge gains as better-than-expected earnings pre announcement from Wells Fargo sent the financial sector considerably higher. It was coupled with encouraging same store sales data from Wal-Mart induced buying in the broader market thereby helping the Dow move up beyond 8,000 once again. After opening 160 points up earlier during the day, The Dow Jones Industrial Average ended higher by 246 points at 8,083. The Nasdaq Composite Index, ended higher by 62 points at 1,652. S&P 500 ended higher by 31 points at 856.
In the commodity market, crude oil fell in New York after the International Energy Agency said 2009 demand might slump to the lowest in five years as factories shut and car sales tumble amid a deepening global recession. Crude oil consumption will fall 2.4 million barrels a day this year, about the same amount that Iraq produces, to 83.4 million barrels a day, the IEA said on 10 April 2009 as trading in New York and London was closed for the Good Friday holiday. U.S. crude supplies are at their highest since July 1993, the Energy Department said on 8 April 2009.
Crude oil fell as much as $1.54, or 2.9%, to $50.70 a barrel at 11:24 a.m. in London. Brent crude oil for May settlement fell $1.06, or 1.96%, to $53 a barrel on London’s ICE Futures Europe exchange at 11:44 a.m. London time.
Gold climbed for a second day. The yellow metal for immediate delivery added 0.9% to $888.90 an ounce at 11:24 a.m. London time after dropping 1.3% last week in the third weekly decline
In the currency market, the US dollar edged up on the yen in quiet trade on Monday, with many Asian and European financial centers closed for the Easter Monday holiday and as markets waited for the U.S. corporate earnings season to get into full swing.
The Japanese yen gained ground against its major despite a report showed that the Japanese wholesale prices fell 2.2% in March. The Japanese currency jumped to a 100.45 versus the US dollar.
The South Korean won ended at 1,329 won to the dollar, up 4 won from Friday's close, as demand from offshore investors rose to buy local stocks.
The Taiwan dollar strengthened against the US dollar as it closed trading at NT$ 33.697, up by NT$ 0.098 from Friday’s close of NT$33.795.
Coming back in equities, stock market in Australia, New Zealand, Thailand and Hong Kong were closed on the account of Easter Monday.
In Japan, stock market finished the session mixed, after swinging between gains and losses, as investors booked profit after the Tankan survey data showed in March Japan’s wholesale prices fell at the fastest pace in almost seven years, adding to signs the world’s second-largest economy may return to deflation. The Nikkei 225 Stock Average index dived 39.68 points, or 0.4%, to 8,924.43, while the broader Topix was 3 points, or 0.3%, higher to 849.
On the economic front, the Bank of Japan said producer prices, the costs companies pay for energy and raw materials, sank 2.2% in March from a year earlier, the biggest slide since May 2002. Japan’s producer price index fell 0.2% month-over-month in March.
Taro Aso, Japan’s prime minister, on Friday launched a 15.4 billion yen ($154bn, €117bn, £105bn) fiscal stimulus designed to sustain an economy in its worst slump since the Second World War.
The figure amounts to 3.1% of Japan’s gross domestic product and will be the largest ever for a single year, surpassing former Prime Minister Keizo Obuchi’s JPY 8.5 trillion stimulus during the Asian financial crisis in 1998. Japan’s Prime Minister Taro Aso has unveiled three packages third since taking office in September and bringing total spending to 25 trillion yen.
The proposal includes a 1.6 trillion yen investment in low-carbon technology, 1.9 trillion yen on employment measures and 370 billion yen for subsidies of new car purchases.
In Mainland China, the stock index finished the session sharply higher, touching eight months high, with strong gains across the board, as market consumers appear more optimistic as China lending data over the weekend showed stimulus efforts may be bearing fruit and the recent stock rebound driven by world stock market gains and expectations on recovering macro economy in the first quarter.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, rose 2.8%, or 69.47 points to 2,513.70. The Shenzhen Component Index was up 2.08%, or 194.36 points to close at 9539.80.
On the economic front, the People’s Bank of China (PBOC) said banks extended 1.89 trillion Yuan ($276.6 billion) in local currency denominated loans in March, bringing the total for the first quarter to 4.58 trillion Yuan, nearing the government’s full-year target of at least 5 trillion Yuan.
China’s annual industrial output growth accelerated to 8.3% in March, picking up from a record low of 3.8% in the first two months of the year, Premier Wen Jiabao said on Saturday.
The National Bureau of Statistics said in a statement that Real-estate prices in 70 major cities fell 1.3% in March from a year earlier and new construction by floor area fell 16.2% in the first quarter.
The total value of China’s exports and imports in March dropped 20.9% as compared with the 24.9% drop recorded in February, according to the statistics released by China’s General Administration of Customs on Friday. China’s exports in March were $90.29 billion, only 17.1% less than March exports a year earlier, whereas imports in March dived 25.1% year on year to $71.73 billion.
In March, the country recorded a trade surplus of US$18.56 billion, up 41.2% from a year earlier, and up as much as 287% over the previous month.
In South Korea, stocks closed higher after swerving in and out of negative terrain, as investors were cautiously optimistic over the first-quarter earnings outlook. After trading in a narrow range, the benchmark Korea Composite Stock Price Index (KOSPI) advanced 2.22 points, or 0.17 percent, to close at 1,338.26.
In Taiwan, stock market continued its climb for third straight session on Monday, 13 April 2009, following the regional trend, touching year-to-date high, as China readied to sign economic cooperation agreement with Taiwan which will benefit both the Chinese and Taiwanese economies, facilitating their joint effort in linking up with the Asia-Pacific regional economic cooperation mechanism.
The main Taiex share index bang on its upward rally, taking the benchmark index above the level of 5800 – points giving a new six and half months high stature. Taiex sprang 75.68 points or 1.31%, closing the day at 5857.64, the highest closing since 26 September 2008 when market closed the day at 5929.63.
On the economic front, according to the Taiwan Association of Machinery Industry (TAMI) Taiwan exported US$16.633 billion of machinery in 2008, for a moderate 2.8% growth year-on-year from US$16.175 billion. Despite the slight growth, the industry saw continued decline in exports in the last two months of 2008 due to the global recession. The Taiwan Association of Machinery Industry’s tallies show that Taiwan’s exports of machinery amounted to US$1.259 billion and US$1.095 billion in November and December last year, down 7.7% and an amazing 30.8% respectively.
In other economic news, to cope with rising unemployment, the Cabinet-level Council of Labor Affairs (CLA) has decided to cut the quota for foreign laborers to keep jobs for locals.
Council of Labor Affairs therefore announced at the beginning of this year that 30,000 foreign workers would be cut, and within only two months some 15,800 such laborers have been chopped, more than half of the target.
Meanwhile, the cabinet-level Financial Supervisory Commission (FSC) in Taiwan is considering setting up a financial stabilization fund, similar to the deposit insurance system used by the banking sector, said FSC chairman Sean Chen. The FSC plans to use the insurance sector’s business taxes to set up a special reserve fund to protect the insured. At present, Taiwan’s insurance industry, including life and non-life sectors, has NT$16.6 billion (US$491.12 million) in insurance stabilization funds. The insurance stabilization funds, including the annual taxes of between NT$7 billion (US$207.1 million) and NT$8 billion (US$236.68 million) levied on the insurers, will be more or less helpful to offset the debts of financially troubled insurers.
In Philippines, the equity market closed lower, weighed down by the razor sharp losses registered in the industrial index, which tumbled more than 4%. Moreover, heavy selling in heavyweight index also dragged the composite index lower. The benchmark index PSEi slipped 1.42% or 29.61 points to 2,043.20, while the All Shares index fell 0.54% or 7.30 points to 1,321.72.
In India, high volatility characterised trading in the last one hour. The market came off the higher level after a surge, which took the Sensex past the psychological 11000 mark in late trade. Metal, banking and realty shares surged. Shares of software outsourcers, however, lagged as rupee gained against the dollar.
The BSE 30-share Sensex rose 163.36 points or 1.51% to 10,967.22. At the day's high of 11,069.54, the Sensex rose 265.68 points in the mid-afternoon trade, its highest level since 15 October 2008. The S&P CNX Nifty was up 24.90 points or 0.75% at 3366.95. The stock market remains closed tomorrow, 14 April 2009, on account of Dr. Ambedkar Jayanti.
Elsewhere, Malaysia's Kula Lumpur Composite index was up 1.1% or 10.02 points to 917.89 while Indonesia’s Jakarta composite index jumped by 5.1% or 74.65 points ending the day at 1540.40.
Coming to the other regional markets, the European regional indices were also closed on the account of Easter Monday holiday.
Small-cap, mid-cap stocks hog limelight
Buying in metal, banking and auto shares today, 13 April 2009, led rally on the domestic bourses which have witnessed a solid surge in the past one month. The barometer index BSE Sensex breached the psychological 11,000 mark in late trade. It, however, failed to end above 11000 mark as IT pivotals slipped. The Sensex rose 163.36 points or 1.51%. It was the Sensex's highest closing in almost six months.
Mid-and small-cap stocks were the flavor of the day. However, blue chips pared intraday gains after trade secretary G K Pillai said India's exports are expected to have fallen about 31% in March 2009 from a year earlier with the global slump hurting overseas sales of Indian firms. Pillai said provisional figures show exports just under $12 billion in March 2009. India's imports may have fallen 37% in March 2009, he added.
Traders refrained from building large positions ahead of a holiday. The stock market remains closed tomorrow, 14 April 2009, on account of Dr. Ambedkar Jayanti.
The trading session was marked with intense volatility. After a strong opening triggered by a rally in global equities, the market slipped into the red. It soon recovered as the sentiment remained firm on resumption of buying by foreign funds in the past few days. The market pared gains in afternoon trade after trade secretary Pillai's comments on dismal exports last month.
The market came off the lower level and surged again in the mid-afternoon trade. After hitting 11,000 market, the Sensex once again pared gains in late trade.
The BSE 30-share Sensex rose 163.36 points or 1.51% to 10,967.22, its highest closing since 14 October 2008. At the day's high of 11,069.54, the Sensex rose 265.68 points in the mid-afternoon trade. At the day's low of 10,800.84, the Sensex fell 3.02 points in early trade.
The S&P CNX Nifty rose 40.55 points or 1.21% at 3382.60, its highest closing since 14 October 2008. Nifty April 2009 futures were at 3378.90, at a discount of 3.7 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 51688.1 crore lower than Rs 62970.1 crore on Wednesday, 9 April 2009.
The BSE Mid-Cap index was up 3.17% and the BSE Small-Cap index was up 3.92%. Both the indices outperformed the Sensex.
The market breadth was strong. On BSE, 2064 shares rose as compared to 514 that declined. A total of 64 shares were unchanged.
The BSE reported a turnover of Rs 5398 crore, lower than Rs 5932.83 on Thursday, 9 April 2009.
Signs of an improvement in the Indian economy and easing of the credit crisis triggered a solid rally on the domestic bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 2806.82 points or 34.39%.
There are signs that the credit crisis is easing. Indian corporate bonds sales posted their best quarter on record as government-backed infrastructure and finance companies raised funds to bolster their capital. Indian companies raised Rs 37800 crore from bonds in the quarter ended March 2009, 44% more than in the same period a year earlier. State-owned lender India Infrastructure Finance Company raised Rs 7370 crore in the biggest bond sale of the quarter, followed by a Rs 3950-crore issue by the National Bank for Agriculture & Rural Development, known as Nabard. The credit offtake from the banking sector is also improving.
Asian markets surged today, 13 April 2009 after Japanese prime minister Taro Aso more than doubled stimulus spending and Chinese lending rose by a record. Key benchmark indices in China, Singapore, South Korea and Taiwan were up by between 0.17% and 2.95%. Indonesia's Jakarta Composite Index surged 4.61% after elections boosted the position of the country's president. However, the Nikkei 225 average was down 0.44%.
On 10 April 2009, Japan's Aso unveiled a record 15.4 billion yen ($153 billion) stimulus plan, his third since taking office and bringing total spending to 25 trillion yen. The proposal includes a 1.6 trillion yen investment in low-carbon technology, 1.9 trillion yen on employment measures and 370 billion yen for subsidies of new car purchases.
China's banks, which are mostly state-owned, have already met the bulk of the government's target of at least 5 trillion yuan of new loans this year. The People's Bank of China said the government's stimulus package is showing initial results and it will continue to ensure sufficient liquidity after new loans surged sixfold to a record in March 2009.
Several Asia-Pacific markets including Hong Kong, Thailand, New Zealand and Australia were are shut today, 13 April 2009 for Easter Monday. European markets were also closed for Easter Monday
Trading in US index futures showed the Dow could fell 33 points at the opening bell on Monday, 13 April 2009
US markets jumped on Thursday, 9 April 2009 after Wells Fargo said it expects to report a record quarterly profit, fueling a month-long rally prompted by hopes that deterioration in the financial sector was abating. The Dow Jones Industrial Average rose 246.27 points, or 3.14%, to 8,083.38, the Standard & Poor's 500 Index gained 31.40 points, or 3.81%, to 856.56 and the Nasdaq Composite Index climbed 61.88 points, or 3.89%, to 1,652.54.
US President Barack Obama said on 10 April 2009, the US economy is starting to see progress toward recovery. He cited a 20% increase in government-backed loans to small business in the past month as one sign the economy is on the rebound.
Closer home, the market sentiment was firm due to resumption of buying by foreign funds in the past few days. Foreign institution investors (FIIs) bought shares worth a net Rs 90.60 crore on Thursday, 9 April 2009. FII inflow totaled Rs 1678.10 crore in the first few days this month.
Emerging-market equity funds carried into April 2009 their first-quarter momentum, taking in $2.2 billion in inflows on the week to 8 April 2009, fund tracker EPFR Global said on 10 April 2009. It was the fifth consecutive week of positive net inflows for emerging-market equity funds, EPFR said. "You have to think that all this liquidity being pumped in by central banks around the world is finally removing some of the shackles," EPFR Global's managing director Brad Durham said in a press release.
Emerging-market equity funds' $2.2 billion weekly inflow, or 0.9% of their total assets, brought year-to-date inflows to emerging-market stock funds to $5.4 billion, EPFR Global said.
Asia ex-Japan Equity Funds enjoyed another solid week, with an inflow of $794 million in the week ended 8 April 2009. It was the best week of inflows for Emerging Asia since April 2008. More than half of the $794 million of weekly inflows were received by China equity funds.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 2.09%. The stock has a highest weightage of 17.63% on the Sensex. The company recently started pumping gas from the Krishna Godavari (KG) which is estimated to add close to $2 billion to the company's profit at peak production levels.
Telecom software outsourcer Tech Mahindra soared 12.31% after the company won the bid for acquiring scam-hit IT firm Satyam Computer Services. As per reports Tech Mahindra bid for Satyam at Rs 58 per share, while Larsen & Toubro, the other player in the fray, bid at Rs 49.50 per share. Tech Mahindra would pay Rs 1,757 crore for a 31% stake in Satyam.
India's largest engineering firm by revenue Larsen & Toubro (L&T), which has a sixth highest weightage of 5.53% on the Sensex, fell 0.59% after its its chief financial officer said in a television interview that L&T will continue holding its stake in Satyam Computer .
L&T had acquired 4% in Satyam at Rs 174 per share before Satyam's founder B Ramalinga Raju admitted on 7 January 2009 of a Rs 7,000-crore accounting fraud at the IT firm. L&T later had to hike its stake in Satyam to 12% as the initial cost of investment in Satyam was at risk after the Satyam stock tumbled hit by Raju's confession of the fraud on 7 January 2009.
Satyam Computer Services rose 3.61%. Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, and put in doubt the survival of the company once ranked as India's fourth-largest software services exporter.
India's second largest software outsourcer by sales Infosys Technologies, which has a second highest weightage of 8.98% on the Sensex, fell 1.22% on market talks that the IT bellwether may give a cautious outlook for the year ending March 2010 (FY 2010).
Infosys will unveil its FY 2010 guidance at the time of unveiling Q4 March 2009 results on Wednesday, 15 April 2009. According to analysts, pricing pressure remains a major headwind for the IT sector as the global economy slows down.
Other software outsourcers also fell as the rupee firmed up against the dollar. Wipro lost down 1.90% and TCS fell 1.91%. The rupee firmed up against the dollar. The rupee was trading at 49.85 against the dollar, lower than Thursday's close of 50/50.02. A firm rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.
But geospatial engineering design maker Rolta India surged 43.20% after a domestic brokerage firm issued a report stating that Rolta is likely to benefit from relaxation of AS-11 norms. The brokerage expected Rolta to grow in top line and bottom line by around 40% this fiscal, given the relaxation in implementation of AS-11. Rolta can opt not to provide for mark-to-market (MTM) losses during the current fiscal, which will positively impact its bottom line. Resultantly, it might write back Rs 84 crore MTM provided during H1FY09, the report said.
Shares of FMCG companies fell as recovering equity market forced investors to dump these so called defensive plays. India's largest cigarette maker by sales ITC, which has a third highest weightage of 6.29% on the Sensex, fell 0.24%.
India's largest FMCG company by sales Hindustan Unilever fell 1.33%.
Shares from fast moving consumer goods (FMCG) sector are perceived as defensive and safe haven for investment in turbulent times. The sector is considered so due to the strong characteristics of the FMCG business that relies on domestic consumption.
FMCG sector, however, tends to underperform when the secondary markets rally. Investors typically offload these defensive shares when markets recover to look for bargain in other high growth sectors.
Metal shares rose on firm metal prices on the London Metal Exchange. Hindustan Zinc (up 1.39%), Steel Authority of India (up 2.66%), Jindal Steel & Power (up 3.84%), Sesa Goa (up 3.07%), and Welspun Gujarat Stahl Rohren (up 7.41%), soared.
World's sixth largest steel maker Tata Steel surged 8.31% on reports the company relied heavily on government-funded projects and the Railways in the face of a demand downturn to boost steel sales in Q4 March 2009. This indicates the company may declare good results Q4 March 2009 results.
India's biggest aluminum producer by sales Hindalco Industries rose 1.19% even as the rating on the stock was reduced to underperform' from 'neutral' by Credit Suisse Group, citing the weak outlook for the industry.
Shares of copper makers surged after India's copper futures hit a new high today, 13 April 2009. India's largest private sector copper maker by sales Sterlite Industries jumped 7.39%.
India's third-largest producer of copper by sales Hindustan Copper extended gains for the seventh day rising 9.36% on the BSE. Prices of copper in the spot market rose 7.71% to Rs 222.65 a kilogram in this fortnight to 9 April 2009 on the Multi Commodity Exchange. The red metal is up 57.68% in 2009 from Rs 141.20 on 31 December 2008. Besides this, another reason for the surge in the stock price could be the low public float in the company. The total promoter holding in the company is 99.59%, while the total public float is merely 0.27% as on 31 December 2008.
Steel ropes maker Usha Martin surged 7.01%, extending gains for the sixth session on reports the European Union has scrapped a 23.8% tariff on steel ropes.
Bank stocks rose on expectations of a further easing of the monetary policy by the Reserve Bank of India with headline inflation at near zero. India's second largest private sector lender by market capitalisation ICICI Bank rose 4.49%. India's largest private sector bank by market capitalisation HDFC Bank rose 4.84%. India's largest public sector bank by assets State Bank of India rose 6.80%.
Kotak Mahindra Bank (up 7.93%), Karnataka Bank (up 8.08%), Oriental Bank of Commerce (up 6.09%), Allahabad Bank (up 7.30%), Indian Overseas Bank (up 12.97%), and Yes Bank (up 9.55%), were the other bank shares that soared.
Inflation based on the wholesale price index (WPI) rose 0.26% in the year through 28 March 2009, lower than previous week's 0.31% rise, data released by the government on Thursday, 9 April 2009, showed. It was the lowest growth in WPI inflation in at least two decades.
Auto shares rose on revival of demand in the past few months. India's largest truck maker by sales Tata Motors rose 12.01% after its American depository receipt soared 15.06% to $7.64 on Thursday, 9 April 2009. Meanwhile, Tata Motors received a strong response for booking world's cheapest car 'Nano'.
State Bank of India alone is reported to have witnessed around 1.5 lakh bookings for Nano from its various branches on day one. Booking from Nano commenced on 9 April 2009. Tata reportedly expects to receive over six lakh applications during the booking period that ends on 25 April 2009.
India's largest tractor maker by sales Mahindra & Mahindra (M&M) jumped 3.39%. Escorts (up 2.76%), TVS Motor Company (up 4.98%), Ashok Leyland (up 4.93%), and Maruti Suzuki (up 1.98%), rose.
Total passenger car sales in the domestic market increased marginally in March 2009 to 1,29,358 from 1,28,098 units in March 2008, according to the figures released by the Society of Indian Automobile Manufacturers (SIAM) on 8 April 2009.
Shares of five sugar firms extended gains for the third day after a downward revision in the output estimate. Shree Renuka Sugars (up 2.10%), Triveni Engineering & Industries (up 7.36%), DCM Shriram Industries (up 2.90%), Balrampur Chini Mills (up 9.37%), and Simbhaoli Sugar Mills (up 5%), rose in anticipations of high sugar prices.
Sugar production is estimated about 45% lower at 14.2 million tonnes during the current season ending September 2009 compared with last year's 26.4 million tonnes. This would be the lowest production since 2004-05, when 12.7 million tonnes were produced. The fall is because lower cane availability has forced mills to end crushing earlier than expected.
Recovery of sugar from the cane has also been affected this year due to adverse weather conditions in the growing areas. Another key reason for the likely fall in output is that more sugar cane in India is being used to make jaggery that sells for almost double the price of white sugar. Farmers in Maharashtra, India's biggest sugar cane growing region, get 13% higher prices from jaggery makers compared with sugar mills.
LED display maker MIC Electronics hit upper circuit limit of 9.87%. On 6 April 2009, its chief said in a television interview that the company expects to do sales of Rs 450 crore in 2010 and profit is expected to be around Rs 100 crore.
India's largest listed retailer by sales Pantaloon Retail India jumped 8.04% ahead of its board meeting later today to decide on restructuring the company and changing its name. The board will decide on preferential issue of shares to the promoters and investors.
Drug maker Strides Arcolab rose 6.96% ahead of a board meet to consider various options of reorganizing the business of the company and its subsidiary companies.
India's biggest maker of wind-turbine generators by sales Suzlon Energy soared 11.66% after Tulsi Tanti, chairman of India's biggest maker of wind-turbine generators by sales, said the firm may return to profit in the quarter ended March 2009 after new orders boosted sales. Suzlon signed more than 300 megawatts of orders in the three months ended March 2009 from companies in Australia and China. The turbines will be supplied in the current quarter.
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ICRA
Investors can consider accumulating the stock of Investor Information and Credit Rating Agency (ICRA). Having consistently delivered a high rate of earnings growth, ICRA is expected to manage growth at a fair clip over the next two-three years, given the sizeable opportunities in the credit rating business.
The sector’s oligopolistic nature, strong brand equity and higher demand for rating services likely from India Inc’s increased domestic capital raising plans, offer a sizeable opportunity for the company. The strong cash flows and low debt requirements of the business, impressive operating profit margins for the ratings business (51 per cent), also make the stock a stable addition to one’s portfolio, despite a small cap status.
At the CMP of Rs 485, ICRA is trading at a trailing one year PEM of 13.7 on a consolidated basis, at a discount to the lone listed competitor CRISIL. The discount may be justified by CRISIL’s more diversified business profile, even as ICRA is highly reliant on rating services.
Business
ICRA is engaged in the business of credit ratings, advisory, outsourcing, information and IT services. Over the last few years, the company has set in motion initiatives to diversify its revenues, although rating services still contribute the major chunk of revenues and earnings. For the nine months ended December 2008, rating services contributed 64 per cent of the total revenues and 92 per cent of the operating profit (EBIDT).
ICRA’s consolidated revenues grew at 34 per cent CAGR in the last three years (FY 2006- FY2008) while net profit grew by 41 per cent in the same period.
For the first nine months of 2008-09, the company’s profits grew by 35 per cent, due to a surge in rating income which grew by 39 per cent. Other businesses such as consultancy and outsourcing have grown at 42 per cent and 127 per cent, respectively, on a lower base.
The operating margin for the standalone business is 51 per cent; this drops to 35 per cent on a consolidated basis, as other business incurred higher operating costs.
With ratings being the key driver of margins, operating profit margins may see some moderation in the coming quarters. A decline in the average size of rating mandates (as the company rates smaller companies), even as the cost of monitoring rises (given the more susceptible credit environment), may keep realisations under check.
This may be partially offset by moderating employee costs as attrition-related pressures decline (employee costs account for 41 per cent of operating revenues).
In the non-rating businesses, ICRA’s Information service segment has seen fall in revenues and may continue to be vulnerable to the slowdown in coming quarters. Advisory services, given their lumpy nature, may not be a consistent contributor. ICRA’s IT subsidiary has acquired two companies (Axiom Technologies and Sapphire International Inc) in the last fiscal but the benefits from these acquisitions can only be reaped in the long term.
Growth Prospects
The near-term revenue driver for Indian rating agencies is the mandatory requirement of ratings for bank loan exposures. Industry estimates suggest that about 30 per cent of the current loan exposures of banks by value and about 55 per cent in number remain unrated as of now.
The RBI requires all commercial bank loans of above Rs 10 crore to be rated by end of 2008-09. Alternatively they will have to set aside more capital for such un-rated loans (through higher risk weights).
That may prompt banks to obtain ratings on the residual loans to free up capital for lending. ICRA has already signed MoUs with more than 23 banks, including SBI, Canara Bank, Central Bank of India and Andhra Bank for providing rating services and can be expected to reap revenues from their mandates.
Incremental loans advanced will also require ratings, spelling an ongoing opportunity for ICRA. Apart from the ‘line of credit rating’, banks may also require ICRA’s services when they raise capital to meet their capital adequacy norms. According to the RBI’s currency and finance report projection released in September 2008 , the banking sector would require additional capital of Rs 5,68,744 crore over the next five years to maintain capital adequacy of 12 per cent.
With India’s corporate debt market in a nascent stage, corporate credit ratings will be the key medium to long-term revenue driver for rating agencies such as ICRA.
With the focus of Indian companies turning back to domestic debt (post credit crisis), domestic debt funding will play a major role in India Inc’s capital raising plans over the next five years; spending related to the Five Year Plan may also expand debt raising. Estimates suggest that new issues in corporate debt have surged by 44 per cent in the first quarter of 2009.
The moribund state of the equity markets may also prompt more companies to turn to debt, especially given the downward bias in interest rates. In addition to corporate bonds, state and local level entities (municipal bonds and state level bonds) are also expected to tap the market for funding requirements. The securitisation market also offers huge potential but is still in an early stage of development.
Election and economics
Amidst the dust and din of the great Indian general elections, the world’s largest democracy faces some key questions: what are the economic and market-related issues on which these elections are being fought? And how do various political parties plan to deal with these, based on their election manifestos? No, we aren’t focussing here on which political dispensation is better, rather, we are providing a bird’s eye view of current economic problems and what a given political entity plans to do with it.
We take up fiscal deficit, disinvestment and foreign direct investment for discussion.
Widening Fiscal Deficit
The Fiscal Responsibility and Budget Management (FRBM) Act requires that the fiscal deficit of the country be kept at less than 3 per cent of the GDP. When a government’s expenditure exceeds its revenues, fiscal deficit arises. So, in simple words, it is a measure as to whether a country is living within its means.
Decline in revenues in the form of tax collections and expenditures on various stimulus packages, lower excise duties and incentives to prop up the domestic economy are the chief reasons cited for our current fiscal deficit.
The fiscal deficit, according to official estimates, is expected to be 5.5 per cent. But it may shoot up to 11 per cent if state deficits and off balance sheet items (usually bonds issued to oil and fertiliser companies) are included.
This means that the government has to borrow more from the Reserve Bank or from the market to fund its projects. A higher fiscal deficit means less funds for investing in various sectors.
Countries around the world are running heavy deficits as the world economy slips into a prolonged slowdown. Economists argue that this may be the best way to come out of a recession. But there is a view that a high deficit may increase inflation as well.
While the manifestos of the BJP and the Congress do not get to specifics on this issue, the CPI(M)’s manifesto says it would scrap the FRBM Act itself and would raise the borrowing limits of State governments.
Disinvestment blues
Over the past decade, governments have sought to reduce their holding in several companies, making for higher private ownership. The process is expected to unlock government funds and reduce its role in running several behemoth organisations as well as a lot of small ones. The counter argument questions the logic of disinvesting from profitable PSUs, which are actually contributing to the government’s kitty. Here again, experts suggest that greater efficiency, transparency, quicker (autonomous) decision making and adaptability to changes are positives from disinvestment.
In addition to disinvestment in listed companies, the listing of several public sector companies such as NHPC, Coal India and BSNL is still awaited. Of course these offers will have to surmount the combination of bad market conditions and resistance from trade unions.
On these issues, again, the manifestos of the two leading national parties are mum. The CPI(M) and the CPI, however, have made it clear that there would be a complete halt to the disinvestment of profitable and potentially viable PSUs, if they are voted to power.
Foreign direct investment
There are several sectors that have a regulatory ceiling on the extent of foreign ownership in companies. Sectors such as Telecom (74 per cent) and Real-Estate (100 per cent, subject to certain criteria) have very high FDI limits, whereas sectors such as Insurance and media have a 26 per cent cap. There are demands for the cap to be increased to 49 per cent in these sectors.
Foreign investment paves the way for funding during times of a cash crunch or as with the current situation where domestic banks are hesitant to lend due to risk aversion. FDI also allows transfer of technology and expertise across borders.
But the counter argument is that it creates a non-level playing field between those able to access foreign funds and those that are not able to. Those who oppose FDI also point out the risks of allowing foreign investors’ participation in sectors of strategic or national importance.
The BJP’s manifesto, while remaining mum on FDI in other sectors, has made it clear that it would ban FDI in retail trade. The current norms allow for a 51 per cent foreign ownership subject to the retail format.
The argument here is that FDI in retail would destroy the livelihoods of millions of small vendors and ‘kirana’ stores. The CPI(M) has also indicated that it would scrap any FDI in retail, education, print and electronic media and banking.
In Insurance it has said that it would scrap any law to increase the existing FDI norms. It has also indicated that it would prevent any ‘backdoor’ entry of foreign investment. The Congress being the incumbent government has not mentioned FDI in its manifesto.
What does all this imply?
As young investors, it is important for you to understand that each of these issues has implications for different sectors and companies. A higher deficit would mean greater government borrowings, which could lead to higher inflation or interest rates. Disinvestment would affect all PSUs and especially those that are on the block. The fates of these stocks, therefore, may hang in balance till it becomes clear as to which political dispensation comes to power.
The story will be no different for the many cash-strapped companies that are awaiting a take on FDI relaxation in order to tap funds and bring in foreign partners.
So, even if you are not the kind that follows the bickering amongst different political parties, in the best interests of your investments, you must keep a tab on who wins!
via BL
Pre Session Commentary - Apr 13 2009
Today domestic markets are likely to have gap up opening as Asian markets are trading firm and the US markets on Friday closed in green. The buying by foreign funds on the last session of previous trade shows some encouraging sentiments. Moreover, the increase in stimulus spending by the government of Japan also likely to give a boost to the sentiments of the investors. On the stock specific front, Satyam Computers to remain in the limelight as the board of directors of the company is likely to announce the bidder. However, L&T seems to lead the race from he list of the bidders. The market which outperformed the global counterparts last week, looks to trade positive with volatility later during the session.
On Thursday, BSE Sensex recorded sixth consecutive gains. After a bang opening in less than an hour’s time the markets plunged in red, however the resurgence of buying sentiments lifted the markets to northward. The IIP data which recorded 1.2% contraction for the month of February as against 9.5% growth in the previous year thrashed the sentiments of investors. However the markets managed to close flat at the end. Sectors like Realty, Metal, Bankex, CD and CG witnessed huge buying as they gained 5.42%, 3.72%, 2.64%, 2.59% and 1.31% respectively. However on the other hand sectors like FMCG, Auto and PSU suffered selling pressures. Smallcap and Midcap stocks stole the charm of the day from the heavyweights. During the session we expect the markets to be trading positive with little bit of volatility.
The BSE Sensex closed with gain of 61.52 points at 10,803.86 and NSE Nifty ended flat at 3,342.05. BSE Mid Caps and BSE Small Caps ended with gains of 55.76 points and 61.58 points at 3,358.35 and 3,767.55 respectively. The BSE Sensex touched intraday high of 10,932.12 and intraday low of 10,655.96.
On Thursday, the US Markets ended in positive on the back of better than expected results of Wells Fargo. Wells Fargo expects to earn $0.55 per share for the quarter, which is far better than Analysts forecast of $0.24 per share. Wells Fargo also indicated its combined net charge-offs are down sequentially and that the legacy Wachovia business is operating well. This news helped the financial sector to gain 15.5% during the day’s trade. Wal-Mart posted positive March same-store sales, however it was a laggard in the day’s trend. On the other hand, the initial jobless claims for the week ending April 4 totaled 6,54,000 which was 20,000 low as compared to the previous week. Continuing claims climbed to a record high of 5.80 million. The US light crude oil for May delivery inclined by 5.2% to settle at $51.97 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed high by 246.27 points at 8,083.38 the NASDAQ Composite (RIXF) index inclined by 61.88 points to close at 1,652.54 and the S&P 500 (SPX) inclined by 31.40 points to close at 856.56.
Today major stock markets in Asia are trading positive. Shanghai composite is up by 56.58 points at 2,500.80. Hang Seng is trading up by 426.55 points at 14,901.41 followed by Strait Times which is up by 47.80 points at 1,876.31. Taiwan Weighted is up with gains of 66.20 points at 5,848.16 and Seoul Composite points is also up by 5.64 points at 1,341.68 respectively. However, Japan’s Nikkei is down by 16.03 points at 8,948.08.
Indian ADRs ended higher. In technology sector, Infosys ended up by 2.80% however Wipro fell by 0.45%. Further, Patni Computers gained 3.12% while Satyam closed up by 8.16%. In banking sector ICICI Bank and HDFC Bank gained 10.27% and 6.73% respectively. In telecommunication sector Tata Communication and MTNL advanced by 2.87% and 3.89% respectively.
The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 3,796.90 Crore and gross debt purchased stood at Rs 544.70 Crore, while the gross equity sold stood at Rs 3,312.80 Crore and gross debt sold stood at Rs. 688.40 Crore. Therefore, the net investment of equity and debt reported were Rs 484.10 Crore and Rs (143.70) Crore respectively.
On Thursday, the Rupee closed at Rs. 50.02/03, 0.38% stronger than its previous close of Rs. 50.19/20. The local currency closed stronger due to expectations of green back inflow as domestic stock markets are continuously rising.
On BSE, total number of shares traded were 58.46 Crore and total turnover stood at Rs 5,932.83 Crore. On NSE, total number of shares traded was 123.71 Crore and total turnover was Rs 17,365.44 Crore.
Top traded volumes on NSE Nifty – Unitech with 79449575 shares, Suzlon Energy with 45768596 shares, DLF with 20913995 shares, ICICI Bank with 18592959 shares followed by Hindalco with 15897043 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1082999 with a total turnover of Rs 17,393.95 Crore. Along with this total number of contracts traded in stock futures were 551156 with a total turnover of Rs 19,697.19 Crore. Total numbers of contracts for index options were 1428439 with a total turnover of Rs 24,068.08 Crore and total numbers of contracts for stock options were 47760 and notional turnover was Rs 1,810.88 Crore.
Today, Nifty would have a support at 3,292 and resistance at 3,407 and BSE Sensex has support at 10,613 and resistance at 11,093.
Gains may continue
The market is likely to see further action on the back of a firm US markets and over 2% gains in majority of the Asian indices in the prevailing trades. Surging FII fund inflows coupled with firm economy outlook also may help the market advance further. Among the key local indices, the Nifty has a strong support between 3300-3250 range, while on the upside the index could test higher level in the 3380-3420 range. The Sensex has a likely support at 10650 and may face resistance at 10950.
US indices gained sharply on Friday with the Dow ended higher at 8083 up 246 points, while the tech-laden Nasdaq advanced to close 62 points upper at 1653.
Crude oil prices gained. The US light crude oil for May series advanced by $2.86 at $52.24 a barrel. In the commodity space, the Comex gold for June delivery declined by $2.60 to settle at $883.30 an ounce.
Market seen opening firm on positive global cues
Key benchmark indices are seen extending a recent solid surge,as market opens after a long weekend, on the back of positive global cues. Trading in US index futures showed the Dow could rise 46 points at opening bell today, 13 April 2009. However, some profit taking in day's second half session cannot be ruled out.
Fall in headline inflation and weak industrial production data for February 2009 raised expectations of a further easing of the monetary policy by the Reserve Bank of India (RBI). Resumption of buying by foreign funds also bolstered sentiment.
Signs of an improvement in the Indian economy triggered a solid rally on the domestic bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 2,643.46 points or 32.39%.
Inflation based on the wholesale price index (WPI) rose 0.26% in the year through 28 March 2009, lower than previous week's 0.31% rise, data released by the government today, 9 April 2009, showed. It was the lowest growth in WPI inflation in at least two decades.
Asian markets were trading firm today, 13 April 2009 after Japanese prime minister Taro Aso more than doubled stimulus spending and Chinese lending rose by a record. Key benchmark indices in China, Singapore, South Korea, Taiwan and Japan were up by between 0.23% and 2.57%. Several Asia-Pacific markets including Hong Kong, Thailand, New Zealand and Australia were are shut today, 13 April 2009 for Easter holiday.
US markets jumped on Thursday, 9 April 2009 after Wells Fargo said it expects to report a record quarterly profit, fueling a month-long rally prompted by hopes that deterioration in the financial sector was abating.
The Dow Jones Industrial Average rose 246.27 points, or 3.14%, to 8,083.38, the Standard & Poor's 500 Index gained 31.40 points, or 3.81%, to 856.56 and the Nasdaq Composite Index climbed 61.88 points, or 3.89%, to 1,652.54.
Back home, key benchmark indices registered small gains in a highly volatile trade on Thursday, 9 April 2009. The BSE 30-share Sensex rose 61.52 points or 0.57% to 10,803.86, its highest closing since 15 October 2008. The S&P CNX Nifty was almost unchanged at 3,342.05 compared to Wednesday (8 April 2009)'s close of 3342.95. The stock market was closed on Friday, 10 April 2009, on account of Good Friday.
According to provisional data on NSE, foreign institutional investors (FIIs) were net buyers worth Rs 170.92 crore while mutual funds sold shares worth Rs 308.39 crore on Thursday, 9 April 2009.
Market may target 200 DMA at 3,450
The massive resistance at around 3,450 is unlikely to be overcome unless there is a volume explosion.
The market continued to surge ahead. The Nifty hit intra-days highs of 3,400-plus before settling to close at 3,342 points for a gain of 4.08 per cent. The Sensex was up 4.4 per cent at 10,803 points. The Defty gained 4.75 per cent as the rupee recovered to above the 50 level.
While FIIs were heavy buyers through the week, domestic institutions also bought, thereby contributing to the rally. Volumes rose perceptibly in both the cash and derivative segments. The advances-to-declines ratio was positive. The broader BSE 500 was up 5.2 per cent.
Outlook: Most of the signals were positive and the market tested resistance at around 3,400. However, the rally is looking overbought and a reaction is overdue. There is massive resistance at around 3,450. That is unlikely to be overcome unless there's a volume explosion. On the downside, there's support at around 3,225 and strong secondary support at 3,100.
Rationale: The market has seen gains of over 31 per cent since March 6, rallying from the 2,539 mark. It was unable to beat resistance between 3,350 and 3,400, though it tested that level in the last two sessions. Momentum signals are overbought and the RSI is also pretty high. This could mean a reaction. If this is a typical bear market rally, the downturn would be severe. The market could easily lose back the 30 per cent it has gained in the next four weeks.
Counter-view: The 200 Day Moving Average is between 3,440 and 3,470, depending on method of computation. If the Nifty closes above that level, there would be room for optimism and hopes that the long-term bear market was coming to an end. In theory, the rally could last for up to six weeks. But proximity to elections and Fibonacci time calculations suggest that it is likely to peter out within the next 5-10 sessions. Either way, expect high intra-day volatility on high volumes.
Bulls & Bears: The Nifty Junior and Midcaps 50 outperformed the Nifty/Sensex pair this week, mainly because the gainers within these indices rose far more than the losers fell. Metals, real estate and housing finance stocks were among the bullish drivers with most major banks also doing well.
IT stocks saw a small pullback as the rupee strengthened. However more than short-term currency fluctuations, Infosys' 2008-09 results and advisory are liable to prove crucial to future direction in IT industry scrips. Towards the end of the truncated week, stocks started running into resistance at higher levels, mirroring the position of the indices.
MICRO TECHNICALS
ICICI Bank
Current price: Rs 398
Target price: Rs 365
The stock is ripe for some profit-booking. It's hitting resistance above Rs 400. On the downside, there is support between Rs 360-Rs 370 and that is likely to be tested on intra-day basis at least. Keep a stop at Rs 405 and go short. Book profits below Rs 365. Be prepared for 10 per cent intra-day swings.
Punj Lloyd
Current price: Rs 114
Target price: Rs 125
The stock has made what seems like a valid breakout from a base at Rs 105. It has a potential target of Rs 125. Keep a stop at Rs 110 and go long. Start booking profits above Rs 122. If the stock dips below Rs 106, the next reliable support is at Rs 97. So a short would be possible.
Suzlon Energy
Current price: Rs 57.5
Target price: Rs 63
The stock has made a breakout past resistance at Rs 54 on a volume expansion. It has a potential target of Rs 63 and perhaps Rs 65. Keep a stop at Rs 55 and go long. There is massive resistance at Rs 67- Rs 68 so the stock is very unlikely to cross the level.
LIC Housing
Current price: Rs 282
Target price: Rs 300
The stock has broken out past resistance at Rs 250 on high volumes. It could achieve a target of about 300. Keep a stop at Rs 276 and go long. Be prepared for major bursts of volatility in what is usually a very stable stock. Book some profits above the Rs 290-mark.
Unitech
Current price: Rs 42
Target price: Rs 48
The stock has moved up on strong volume expansion. It has a potential upside till the Rs 48 level and if there is a burst of profit-booking, it could collapse back till the Rs 37-Rs 38 level. Keep a stop at Rs 40.5 and go long. Start booking profits above Rs 46.
via Business Standard
Indian Overseas Bank
We recommend a buy in Indian Overseas Bank from a short-term trading perspective. It is clearly visible from the charts of Indian Overseas Bank that after encountering significant resistance in the band of Rs 80-85 in early January 2009, it began to decline.
The stock conclusively penetrated a support at Rs 60 in late January and was on a medium-term downtrend till early March low of Rs 37. This low is also a 52-week low. It reversed from this level and has been on a medium-tem uptrend since then.
The stock broke above its medium-term down trend-line and 21-day moving average in late March and continued its up move. On April 9, the stock breached its 50-day moving average, gaining 3 per cent.
We notice that there is an increase in volume for the past two trading sessions. The daily relative strength index (RSI) has entered in to the bullish zone and the weekly RSI is on the brink of entering in to the neutral region from the bearish zone. Moreover, the daily moving average convergence and divergence indicator is likely to enter positive territory. We are bullish on the stock from a short-term perspective.
We anticipate it to move up until it hits our price target of Rs 58. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 49.
Hindalco
Investors with a long-term perspective can continue to hold the Hindalco (Rs 59) stock even if the company’s near-term earnings performance is lacklustre. Hindalco’s operations have delivered reasonable growth on a standalone basis, but muted profitability and high debt of the Novelis acquisition have brought down valuations in recent times. As a low cost and integrated producer of aluminium, Hindalco could capitalise on Novelis’ value-addition capability and diversified user base in the event of an economic recovery. The tilt towards user sectors such as beverages and infrastructure makes it less vulnerable to demand slowdown than many of its global peers.
At a PE multiple of 7 times its estimated 2008-09 earnings, the stock trades at a discount vis-a-vis its Indian and global competitors.
Aluminium: Main revenue generator
Aluminium and copper are Hindalco’s main business streams. On a standalone basis, aluminium contributes 37 per cent to Hindalco’s revenues, but its share in net profits is as high as 80 per cent. Extensive brownfield expansions and low-cost acquisitions implemented over the last five years have put Hindalco on the list of global low-cost aluminium manufacturers. The company concentrates on producing rolled aluminium, ingots, bars and foils. These finished goods are sought after by infrastructure companies, capital goods manufacturers and power transmission and distribution companies.
While the automobiles industry accounts for about one-fourth of Hindalco’s demand (on a consolidated basis), the improvement in domestic passenger vehicle sales offers some comfort. For the nine months ended December 2008, Hindalco’s net profits (on a standalone basis) from the aluminium segment rose by about 6 per cent and revenues by 10 per cent.
Hindalco acquired Novelis, maker of value-added products such as beverage cans and alloy wheels in May 2007 for $6 billion. Though this changed Hindalco’s business and geographic profile, the deal weakened its balance-sheet as Hindalco was forced to take on Novelis’ debt burden of $2.9 billion.
Novelis Acquisition
Born in early 2005 as a result of spin-off from its parent company Alcan, Novelis has a diversified clientele — Coke, Ford, General Motors, Audi, Lotte, Kodak and Tetra Pak. But in a bid to pump up its business, Novelis entered into fixed price supply contracts with some of its major customers.
Trouble began in 2005 when raw material prices spiralled sharply. Since Novelis was compelled to sell below cost due to contractual obligations it reported losses of $102 million from operations for the nine months ended December 2008. This swelled to $1.82 billion, after the company charged goodwill impairment and losses on derivative contracts.
Despite this, Novelis’ business does offer long-term benefits to Hindalco. Facility to produce value-added products may aid Hindalco’s margins over the long term. The fixed price contractual obligations of Novelis end by January 1, 2010. Moreover, Novelis has embarked on cost savings and had undertaken a production cut. In addition, it is accounting for goodwill impairment which may help Hindalco benefit from the deal
Copper: Yet to shine
Hindalco’s copper business (where demand is mainly from the domestic market) has been facing margin pressures from declining realisations. While the segment’s contribution to revenues is 67 per cent, its high cost structure has limited its share in profits to as low as 20 per cent.
Copper cathodes and rods find use in high end industries such as electrification, housing and construction and infrastructure projects. Apart from US and Europe, Hindalco exports copper to the BRIC nations, which offset decline in demand from US and Europe in 2007-08. But with even the BRICs witnessing a slowdown in 2008, Hindalco’s revenues from copper slipped by 5 per cent for the nine months ended December 2008.
LME prices
Copper prices in the London Metal Exchange corrected sharply, by 62 per cent, between July and December 2008. They have since recovered 44 per cent. Easing warehouse stocks and signs of higher Chinese demand have raised hopes about an early recovery in the copper price cycle.
On the other hand, aluminium prices remain subdued, though they have risen 19 per cent from the February 2009 lows. LME inventories show some improvement in aluminium demand but the recovery is more tentative than for copper.
Financial overview
A strong commodity cycle saw Hindalco deliver sales growth of 24 per cent and operating profit growth of 25 per cent between 2003 and 2007.
In 2007-08, the company saw a manifold growth in consolidated sales from Rs 193 crore to Rs 600 crore (attributable to the acquisition of Novelis), while operating profits rose 50 per cent. But high interest costs from the Novelis acquisition led to a dip in net profits. From a consolidated debt service coverage ratio of 15 times in until 2006-07, it fell to three in 2007-08.
The bridge loan taken for the buyout (due in November 2008) has been fully repaid by the company, through rights issue proceeds amounting to $920 million. For the remaining debt, the company has again borrowed $982 million (at a rate of LIBOR + 80 bps) after liquidating its investments.
The financial year 2007-08 saw a sharp surge in crude oil prices, which had cascading effect on transportation costs and cost of alternative energy sources such as coal. Going forward, Hindalco’s margins are likely to benefit from the substantial correction in crude oil and coal prices.
Other concerns
The major constraint for the aluminium division is the threat of import substitution. With the government recently hiking import duties on the metal, this problem has been addressed adequately. The copper division continues to face raw material supply constraints, resulting in production capacities remaining unutilised.
Moreover, Hindalco faces margin pressures because of depressed treatment and refining charges, which determine conversion margins on copper and this is expected to persist in the near future also.
AIA Engineering
Investors can consider buying the stock of AIA Engineering, the world’s second largest manufacturer of high-chrome mill internals. Our recommendation stems from the steady demand for AIA’s products from cement companies, both domestic and global, as also the revival of enquiries from the mining sector. Production cuts taken by some of its potential clients in the mining sector had earlier limited AIA’s revenue opportunities.
AIA, with a dominant presence in the domestic and overseas markets, appears well-placed to leverage from the revival in demand from the mining sector. At the current market price of Rs 163, the stock trades at about 9 times its likely FY-10 per share earnings.
While valuations are at a premium to capital goods stocks, that AIA is the only listed player in this space justifies its premium. However, given the recent surge in the markets, investors may be better off phasing out their exposure to this stock over a period of time.
Demand boosters
AIA specialises in design, manufacture, installation and servicing of high-chrome mill internals (which find application in cement, mining and thermal power industries). The demand for AIA’s products stems primarily from the switch in the user industries’ preference to high-chrome mill internals against the conventional forged ones.
This leaves plenty of room for growth as the current share of high-chrome mill internals stands at only about 15 per cent of the total demand. High-chrome mill internals, which are used to grind clinker in cement mills; coal in thermal power plants and mineral ore in mines are likely to attract higher demand in the coming years as they offer higher productivity, greater control over grinding process, lower power consumption and lower wear rates.
Demand for AIA’s products may also derive strength from the fact that there has not been any major scaling down in capex plans by the cement majors.
While sustained capex may help keep the demand from the cement sector strong (the sector is the primary revenue contributor for AIA), a good part of the company’s overall business (nearly 70 per cent) comes from replacement demand. That, to an extent, insulates AIA’s revenues from any sharp slowdown in its user industry’s capital spending cycle.
Besides, AIA is also looking to increase the share of its revenues from the mining sector. This appears to hold promise, as the market potential in this sector is immense, while competition is limited. Besides, it also plans to tap global market in this space. Trends in order inflows from the mining sector, therefore, may bear a close watch in the coming quarters.
Going slow on expansion
While the company had earlier gone in for a large capacity expansion programme, it has in conformity with the current market scenario toned its capex plans considerably. The second phase of its capacity expansion plan (100,000 tonnes) is now under review. AIA now plans to incur limited capex that will entail only the de-bottlenecking its current capacity. This appears prudent, as it will help the company conserve its cash.
Earnings scorecard
For the quarter ended December 08, AIA managed to report a 45 per cent growth in consolidated revenues, helped primarily by the new capacities it had added last May as also an improvement in its realisations. In terms of sales break up, exports made up for 57 per cent of its revenues and domestic sales the rest.
The cement sector continued to be the lead contributor, making up a good 65 per cent of its total sales. Utilities and mining segment made up for 25 per cent and 10 per cent respectively. But revenues in the coming year may be more or less flat as the management expects realisations to drop, led by the correction in raw material prices, even as it expects an increase in sales volumes.
Operating margins for the quarter, however, dropped by about 2.2 percentage points to 25.5 per cent, driven by a high base effect (as the company had initiated price hikes last year) and then prevalent high raw material prices. Net profit growth was pegged at about 17 per cent.
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