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Friday, October 09, 2009
Direct Tax Code...Govt identifies 7 areas for examination
Finance Minister announced that the Government has identified seven critical areas on the Direct Taxes Code for further detailed examination. At an interactive session with representatives of trade and industry, Pranab Mukherjee said that the areas identified after interactions with all stakeholders are: the concept of Minimum Alternative Tax (MAT) based on gross assets; Capital Gains Taxation in the case of non-residents; The Income Tax Act and the Double Taxation Avoidance Agreement (DTAA); General Anti-Avoidance Rule (GAAR); Issues relating to effective management control and taxation of foreign companies in India; Taxation of charitable organizations; and Shift from EEE to EET taxation system. On the apprehensions expressed regarding the time schedule for implementation of the new Direct Taxes Code, the Finance Minister assured that next steps would be taken only after a comprehensive review of the draft by taking on board the suggestions received. "Every effort would be made to meet the aspirations and expectations of our taxpayers and our vibrant corporate sector," Mukherjee said.
Best ELSS funds to save tax
Inall probability, your checklist for the month's errands reads something likethis: get the house painted before the festive season; refurbish the livingroom; finish the Diwali shopping. Now, add one more to this list: start taxplanning. But it's just October. Why should you start your tax planning rightnow? It should be done at the beginning of the new year when your employersends you the tax deduction notice, right?
Wrong.We have said this before and we are saying it again. Don't compress your taxplanning in the last one or two months of the financial year. Spreading yourinvestments over the year is crucial if you are investing in tax-saving mutualfunds. Stock markets have been very volatile in the past two years. If youdon't want to be caught on the wrong foot, take the SIP route instead of alump-sum investment at the end of the year.
Wehave shortlisted eight of the best tax plans for you. Performance is not theonly reason why these funds have been chosen. Each scheme has been handpickedon the basis of its risk profile, consistency of returns, investment style andquality of holdings. Using the same parameters, we have put these eight fundsin four broad categories (see tables). This is not a ranking of the ELSS funds;all are good performers. Your choice should depend on your risk profile andexpectations.
Large-capsolidity
Slowand steady wins the race. Both Franklin Templeton Taxshield and SBI MagnumTaxgain have a decidedly large-cap orientation. While this means muted returnswhen the markets are rising, it also means a limited downside when the goinggets tough. Franklin Taxshield fell less than the category in 2008, but hasrisen less than the average ELSS fund in 2009. In fact, both the funds haveunderperformed the category in the short term, but outperformed it over thelonger term. Investors can expect returns in line with the broader market.
Incidentally,Magnum Taxgain is the largest ELSS fund, with assets worth Rs 4,434 crorealmost 40% of the ELSS category. It tops the category for a five-year periodwith annualised returns of 35.56%. Don't expect an encore though. It is likelyto give middle-of-the-road returns.
Fast-trackgrowth
Forthose who like to drive a bit faster, the Sundaram BNP Paribas Taxsaver andFidelity Tax Advantage are good options. Though the former has underperformedthe category in 2009, don't let this stop you. The fund has given scorchingreturns over the longer term 19% in the past three years and 33% in the past fiveyears. It has 35% of its assets in mid-cap stocks, which can prove veryrewarding. Fidelity Tax Advantage has matched the category average, but thiscan change to outperformance due to the 25% exposure to mid-caps and 11% tosmall-caps in its portfolio.
Mid-capaggression
Nopain, no gain. If you can stomach a little risk, you have two winners in HDFCTaxsaver and Canara Robeco Equity Taxsaver. Both the funds have a sizeableexposure to mid-caps and small-caps. This aggression has paid rich rewards. WhileCanara Taxsaver has shot up 110% in the past six months, HDFC Taxsaver hasrisen 100%. It doesn't always pan out this way. HDFC Taxsaver was among thebest performing ELSS funds between 2002 and 2005, but slipped subsequently. Ithas now regained lost ground. On the other hand, Canara Robeco Taxsaver hasconsistently beaten the category average and has been the best performer since2006.
Turbo-chargedon small-caps
Small-capstocks are like performance enhancing drugs. In the six funds discussed earlier,the maximum allocation to small-caps was 12%. However, Taurus Taxshield andSahara Taxgain have invested almost 20% in this high-risk zone. This can bevery rewarding when the going is good, but a dream run can easily become anightmare.
Taurus Taxshield has given 76.12% returns in2009, the highest in the category, but its performance has been erratic. Thefund lost 10% in 2006 when the category rose by 30%. The next year, the fundshot up by 111%, while the ELSS average was 57%. Buy if you can handle therisk.
via Indiainfoline
Weekly Newsletter - Oct 9 2009
The market continues to be volatile as the main indices consolidate after hitting multi-month highs. The Sensex and the Nifty erased all of the previous week's gains amid nervousness about the results. The Reliance bonus announcement and Infosys' strong results cum guidance too could not counter the jitters with regard to high valuations and an uncertain external situation. Liquidity flows from FIIs have also turned choppy lately. The performance of the stocks post IPOs haven't been all that inspiring either. The outlook has turned a little murky after a seven-month rally as most players are reluctant to take fresh bets in the absence of fresh good news.
One might just get some good news though next week when the IIP data for August is released on Monday. The industrial output grew by 6.8% in July after an impressive 7.8% gain in June. A top government official sees IIP at double-digits by December. What impact it will have on sentiment remains to be seen, as this could increase the chance of rate hikes by the RBI, especially if inflation too starts spiking.
On Tuesday, the market will be shut due to the Maharashtra state assembly polls. Next week also marks the start of the annual festival of light - Diwali. The bulls will be hoping that goddess Laxmi showers her blessings on the market. The traditional Mahurat session will be held on Oct. 17.
Meanwhile, the result announcements will only gather momentum keeping the market on tenterhooks. Among the top companies declaring their results next week are: Axis Bank, DCB, Exide, Praj Industries, Sintex, HDFC, HDFC Bank, Bajaj Auto, JP Hydro, Concor, Infotech Enterprise, Motilal Oswal, Parsvnath, KPIT Cummins, Wyeth, GTL Infra, TCS and UltraTech Cement.
In the US the economic reports to watch out for are retail sales, FOMC minutes, CPI, industrial production and consumer sentiment.
Telecom stocks tank on price war woes
The booming Indian telecom sector witnessed one of its bloodiest weeks on the bourses, as the predatory pricing unleashed by a few wireless players heightened worries over the adverse fallout on the companies' bottomlines. A new plan launched by RCOM coupled with comments from TRAI chief on 'per-second-billing' added fuel to the fire though the regulator tried to assuage investors' concerns by saying that the plan may will not be made mandatory. Bharti, RCOM and Idea shares tumbled badly before recovering on Friday. A string of brokerages slashed their earnings expectations for the telecom titans amid fears that the price war is only likely to intensify with a number of new players waiting in the wings.
Telecom operators would be free to offer various tariff plans to their subscribers, including the per-second billing scheme, TRAI said. Telecom firms would also be free to fix the tariff per second, the telecom regulator said. "We are not looking at mandating per-second billing for the operators. We would float a consultation paper on it and decide only if the industry sees benefits in the system," TRAI chairman J.S. Sarma said. The regulator plans to issue a consultation paper by the end of this year. Currently, majority of the wireless operators charge customers on per minute basis even if the call terminates before 60 seconds. The per-second-billing model is being followed by Tata DoCoMo and new entrant Sistema Shyam.
Tata DoCoMo recently switched to a 'pay per second' tariff model and several other new entrants are expected to launch wireless services with competitive pricing that will likely put pressure on the incumbent players to follow suit. One such company, RCOM, this week swung into action to mitigate the impact on its operations by unveiling a plan called "Simply Reliance" whereby customers (both pre-paid and post-paid) can make Local and STD calls across networks at 50 paise per minute by paying a small one-time fee. The 50 paisa-a-minute rate also applies to SMSes and roaming calls. "TRAI has been following a policy of forbearance so this development comes as a surprise," Manoj Kohli, CEO & Joint MD of Bharti Airtel said. Top officials from Vodafone Essar and Idea echoed his view.
BSE Bulk Deals to Watch - Oct 9 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
9/10/2009 515055 ANANT RAJ IN COPTHALL MAURITIUS INVESTMENT LIMITED B 4287801 132.00
9/10/2009 515055 ANANT RAJ IN ORIENT GLOBAL CINNAMON CAPITAL LIMITED S 4307688 132.01
9/10/2009 524760 ARVIND INTER SUNITA GOYAL S 30745 10.82
9/10/2009 512149 AVANCE TECHN SHWETA KISHORE BHATIA B 1300000 2.93
9/10/2009 531591 BAMPSL SECUR B.S.KHANDELWAL S 1097000 0.57
9/10/2009 511672 CLARUS SMITA LEKHRAJ KANUNGO B 25964 10.99
9/10/2009 511672 CLARUS MANJU LEKHRAJ KANUNGO B 50000 10.86
9/10/2009 511672 CLARUS CELEBRITY CONSULTANTS PRIVATE LIMITED S 20100 10.90
9/10/2009 505232 DENISON HYDR REKHA SUBHASH JAIN B 16500 314.40
9/10/2009 505232 DENISON HYDR SNEHA DILIP BHAI VARIYA B 16500 326.43
9/10/2009 505232 DENISON HYDR REKHA SUBHASH JAIN S 16500 326.43
9/10/2009 505232 DENISON HYDR SNEHA DILIP BHAI VARIYA S 16500 314.39
9/10/2009 522261 DOLPHIN OFF DHANANJAY MONEY MANAGEMENT SERVICES B 82958 367.98
9/10/2009 522261 DOLPHIN OFF DHANANJAY MONEY MANAGEMENT SERVICES S 82958 371.27
9/10/2009 532666 FCS SOFTWARE TRANSGLOBAL SECURITIES LTD. B 238667 120.88
9/10/2009 532666 FCS SOFTWARE OPG SECURITIES P LTD B 305340 121.92
9/10/2009 532666 FCS SOFTWARE TRANSGLOBAL SECURITIES LTD. S 238667 120.85
9/10/2009 532666 FCS SOFTWARE OPG SECURITIES P LTD S 305340 121.94
9/10/2009 532768 FIEM INDS SUNEET LAL B 67926 107.85
9/10/2009 532768 FIEM INDS SUNEET LAL S 67926 108.55
9/10/2009 531486 FILMCIT MEDI WELLNESS COMMUNICATION (P) LTD S 2500000 0.99
9/10/2009 500033 FORCE MOTR JAMNALAL SONS LTD B 76378 155.00
9/10/2009 500033 FORCE MOTR ANANT TRADING COMPANY S 76378 155.00
9/10/2009 531863 GEEKAY FINAN RAJESH C R NAIR B 138000 320.40
9/10/2009 531863 GEEKAY FINAN YOUSUF BUX S 100000 320.41
9/10/2009 532857 GLORY POLY ROSY DEAL COMM PRIVATE LIMITED S 190000 26.93
9/10/2009 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA B 97026 28.18
9/10/2009 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA S 97026 28.00
9/10/2009 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH S 155000 28.21
9/10/2009 509684 INDIA FOILS SAINATH HERBAL CARE MARKETING P.LTD B 179183 16.79
9/10/2009 504336 INDTRADECO L ROOPA S SHAH B 1521500 0.42
9/10/2009 504336 INDTRADECO L VARSHA INDL TOWNSHIP ORGANISERS PVT LTD. S 1500000 0.42
9/10/2009 530643 INFOTREK SYS B K SONI HUF B 31500 29.20
9/10/2009 504786 INV PRECIS C VINOD RAHEJA P B 27181 105.06
9/10/2009 530395 K DHANDAPANI GANDIV INVESTMENT PVT. LTD. B 20688 39.96
9/10/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 227614 7.50
9/10/2009 530255 KAY POW PAP SATISH KUMAR GUPTA B 110377 7.62
9/10/2009 530255 KAY POW PAP GIRRAJ PRASAD GUPTA B 56451 7.84
9/10/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 281878 7.54
9/10/2009 530255 KAY POW PAP SATISH KUMAR GUPTA S 110377 7.40
9/10/2009 530255 KAY POW PAP GIRRAJ PRASAD GUPTA S 56000 7.40
9/10/2009 531692 KHYA MULT EN SHAILENDRA KUMAR TIWARY S 50000 1.85
9/10/2009 531602 KOFF BR PICT NIRMALABEN SURESHBHAI PARIKH B 487308 2.65
9/10/2009 524654 NATURAL CAPS VIVOG COMMERCIAL LTD B 70409 37.77
9/10/2009 531272 NIKKI GLOB F SUDEEP GOENKA B 28178 35.16
9/10/2009 511702 PARSHART INV BHARGAV JASHUBHAI PATEL B 31000 28.75
9/10/2009 511702 PARSHART INV SHIVA INVESTMENT B 20000 28.75
9/10/2009 511702 PARSHART INV PRADIPBHAI RAMBHAI PATEL S 73437 28.75
9/10/2009 533107 PIPAVAVSHIP TRANSGLOBAL SECURITIES LTD. B 3803479 57.27
9/10/2009 533107 PIPAVAVSHIP OPG SECURITIES P LTD B 3642944 57.25
9/10/2009 533107 PIPAVAVSHIP TRANSGLOBAL SECURITIES LTD. S 3803479 57.28
9/10/2009 533107 PIPAVAVSHIP OPG SECURITIES P LTD S 3642944 57.28
9/10/2009 590077 RANKLIN SOLU SATYANARAYANA VARAPRASAD GARIKIPATY B 28335 36.88
9/10/2009 590077 RANKLIN SOLU PARVATHANENI MOUNISHA S 25995 37.07
9/10/2009 531099 RUBRA MEDICA VINITA K AGARWAL B 35000 22.85
9/10/2009 531099 RUBRA MEDICA NILESH CHANDRAKANT SHETH S 35000 22.85
9/10/2009 531099 RUBRA MEDICA DHARMENDRA J MADHANI S 45100 22.85
9/10/2009 531901 SAARC NET GOVIND SHARDA B 500000 2.29
9/10/2009 531901 SAARC NET HEMCHAND JAIN S 300000 2.29
9/10/2009 505590 SCENARIO MED REKHA MEHTA B 5000 115.75
9/10/2009 505590 SCENARIO MED RAKESH MEHTA B 5000 115.75
9/10/2009 505590 SCENARIO MED RANGA RAO NUTHAKKI B 7500 115.75
9/10/2009 505590 SCENARIO MED POONAM AGGARWAL B 5000 115.75
9/10/2009 505590 SCENARIO MED KAMAL KUMAR AGARWAL B 4400 115.75
9/10/2009 505590 SCENARIO MED KUSUM GUPTA S 5150 115.75
9/10/2009 505590 SCENARIO MED GEETA DEVI SINGHAL S 7000 115.75
9/10/2009 505590 SCENARIO MED SMP SECUTITES LIMITED S 5150 115.75
9/10/2009 530075 SELAN EXPLO* HITESH SHASHIKANT JHAVERI B 75598 327.62
9/10/2009 530075 SELAN EXPLO* HITESH SHASHIKANT JHAVERI S 71716 327.28
9/10/2009 526733 SUASHIS DIAM DUETSCHE ASSET MGMT A/C DWS MONEY PLUS ADVANTAGE FUND B 200000 351.09
9/10/2009 526733 SUASHIS DIAM K GIRDHARLAL INTERNATIONAL LTD S 118249 350.89
9/10/2009 506003 SUDAL INDUST PRADEEP KUMAR JAIN B 50000 53.51
9/10/2009 506003 SUDAL INDUST HITESH SHASHIKANT JHAVERI B 61740 52.55
9/10/2009 506003 SUDAL INDUST SOHINI DILIP BASTAWALA B 24045 53.58
9/10/2009 506003 SUDAL INDUST HITESH SHASHIKANT JHAVERI S 61744 53.59
9/10/2009 506003 SUDAL INDUST AJITH THARAKAN MATHEW KANJIRAM PARAMPIL S 30000 53.56
9/10/2009 590047 SUNDARAMMUL FAIRDEAL INFIN SERVICES PVT. LTD. B 416243 18.89
9/10/2009 590047 SUNDARAMMUL CITIGROUP GLOBAL MKTS. (M) PVT. LTD. B 4900000 18.75
9/10/2009 590047 SUNDARAMMUL INVENTURE FINANCE PVT LTD S 1060198 18.75
9/10/2009 590047 SUNDARAMMUL UPDATE MARKETINGS PRIVATE LIM S 393000 18.75
9/10/2009 590047 SUNDARAMMUL SIDDHAYU AYURVEDIC RESEARCH F S 542000 18.75
9/10/2009 590047 SUNDARAMMUL PRASIDH COMMERCIAL SERVICES P S 1325000 18.83
9/10/2009 590047 SUNDARAMMUL NOVA MARKETING PRIVATE LIMITE S 920000 18.75
9/10/2009 590047 SUNDARAMMUL MARKDATA ADVERTISING PRIVATE S 1000000 18.76
9/10/2009 590047 SUNDARAMMUL MAHALAXMI COMMERCIAL SERVICES S 410000 18.75
9/10/2009 509945 THACKER P.K.VAKIL(HUF) B 500 195.10
9/10/2009 509945 THACKER INDIRAKANTI LAL SHAH S 500 195.10
9/10/2009 531917 TWINSTA SO E RAJESHKUMAR RAMESHBHAI PATEL B 89000 3.23
9/10/2009 531917 TWINSTA SO E NAMITA STOCKTRADE PRIVATE LIMITED S 107000 3.23
9/10/2009 532477 UNION BANK MORGAN STANLEY INVESTMENT MANAGEMENT INC. S 2636624 244.81
9/10/2009 532478 UNITED BREW DEUTSCHE SECURITIES MAURITIUS LIMITED S 3000000 142.00
9/10/2009 519152 VADILAL ENTE VSL SECURITIES PVT LTD B 6000 88.90
9/10/2009 519152 VADILAL ENTE CHAMPAKLAL MANSUKHLAL GANDHI S 5407 89.07
9/10/2009 530961 VIKAS GLO MOONLITE PETRO PRODUCTS PRIVATE LIMITED B 23154 22.95
9/10/2009 530961 VIKAS GLO USHA JAIN S 23030 22.95
9/10/2009 507880 VIP INDUSTRIES LTD. (BSE INDON HITESH SHASHIKANT JHAVERI B 167810 150.78
9/10/2009 507880 VIP INDUSTRIES LTD. (BSE INDON HITESH SHASHIKANT JHAVERI S 167816 150.53
9/10/2009 511147 WALL STREE F RAJASTHAN GLOBAL SEC LTD B 85872 57.22
9/10/2009 511147 WALL STREE F TAIB BANK A/C TSML B 125000 57.87
9/10/2009 522108 YUKEN INDIA NIRMAL INVESTMENTS B 15331 80.69
9/10/2009 522108 YUKEN INDIA EQUITY INTELLIGENCE INDIA PRIVATE LIMITED S 15000 80.70
NSE Bulk Deals to Watch - Oct 9 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
09-OCT-2009,ALKALI,Alkali Metals Limited,MBL & COMPANY LTD.,BUY,55079,209.35,-
09-OCT-2009,EVERONN,Everonn Education Limited,MBL & COMPANY LTD.,BUY,95838,439.59,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,DINESH MUNJAL(HUF),BUY,88043,123.57,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,NIKON FINLEASE PVT. LTD,BUY,75834,123.77,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,OM INVESTMENTS,BUY,131452,122.46,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,TRANSGLOBAL SECURITIES LTD.,BUY,264122,120.64,-
09-OCT-2009,FIEMIND,Fiem Industries Limited,SUNEET LAL,BUY,73898,108.95,-
09-OCT-2009,GLORY,Glory Polyfilms Limited,PUNEET SECURITIES PVT. LTD.,BUY,89098,27.51,-
09-OCT-2009,HGSL,Hinduja Global Sols Ltd,HINDUJA VENTURES LIMITED,BUY,200000,479.50,-
09-OCT-2009,HTMEDIA,HT Media Limited,RELIANCE MUTUAL FUND,BUY,2786000,117.00,-
09-OCT-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,9373753,23.08,-
09-OCT-2009,NOVAPETRO,Nova Petrochem Limited,VEDPRAKASH DEVKINANDAN CHIRIPAL,BUY,500000,27.15,-
09-OCT-2009,NOVOPANIND,Novopan Industries Ltd,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,BUY,45103,49.94,-
09-OCT-2009,PIPAVAVYD,Pipavav Shipyard Ltd,TRANSGLOBAL SECURITIES LTD.,BUY,3770317,57.35,-
09-OCT-2009,SELAN,Selan Exploration Technol,AJAY ASSET MANAGEMENT PRIVATE LIMITED,BUY,91768,321.78,-
09-OCT-2009,SELAN,Selan Exploration Technol,JMP SECURITIES PVT LTD,BUY,88501,327.00,-
09-OCT-2009,TELEDATAIT,Teledata Technology Solut,ANGEL INFIN PRIVATE LIMITED,BUY,904069,4.78,-
09-OCT-2009,UBHOLDINGS,United Breweries (Holding,PLATINIUM INVESTMENT MGMT LTD A/C PLATINUM INTERNATIONAL FUN,BUY,1624000,217.00,-
09-OCT-2009,VIVIMEDLAB,Vivimed Labs Limited,INDIA EQUITY GROWTH FUND LIMITED,BUY,54732,103.70,-
09-OCT-2009,XLTELENE,XL Telecom & Energy Ltd,ANGEL INFIN PRIVATE LIMITED,BUY,132095,46.05,-
09-OCT-2009,ALKALI,Alkali Metals Limited,MBL & COMPANY LTD.,SELL,55079,209.41,-
09-OCT-2009,EVERONN,Everonn Education Limited,MBL & COMPANY LTD.,SELL,95838,439.27,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,DINESH MUNJAL(HUF),SELL,88043,123.49,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,NIKON FINLEASE PVT. LTD,SELL,75834,123.77,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,OM INVESTMENTS,SELL,131452,122.53,-
09-OCT-2009,FCSSOFT,FCS Software Solutions Li,TRANSGLOBAL SECURITIES LTD.,SELL,263755,120.84,-
09-OCT-2009,FIEMIND,Fiem Industries Limited,SUNEET LAL,SELL,73898,108.53,-
09-OCT-2009,GLORY,Glory Polyfilms Limited,HANURANG VINIMAY PVT. LTD,SELL,193004,26.29,-
09-OCT-2009,GLORY,Glory Polyfilms Limited,PUNEET SECURITIES PVT. LTD.,SELL,88898,27.46,-
09-OCT-2009,GLORY,Glory Polyfilms Limited,ROSY DEAL COMM PVT. LTD.,SELL,110000,27.16,-
09-OCT-2009,HGSL,Hinduja Global Sols Ltd,INVEST INDIA MAURITIUS LIMITED,SELL,200000,479.50,-
09-OCT-2009,HTMEDIA,HT Media Limited,SANDSTONE CAPITAL INDIA MASTER FUND LIMITED ,SELL,3068376,117.02,-
09-OCT-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,9392129,23.12,-
09-OCT-2009,NOVAPETRO,Nova Petrochem Limited,CHIRIPAL INDUSTRIES LIMITED,SELL,500000,27.15,-
09-OCT-2009,NOVOPANIND,Novopan Industries Ltd,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,SELL,62198,49.45,-
09-OCT-2009,PIPAVAVYD,Pipavav Shipyard Ltd,TRANSGLOBAL SECURITIES LTD.,SELL,3770317,57.38,-
09-OCT-2009,PVP,PVP Ventures Limited,PVP MALAXMI ENERGY VENTURES PRIVATE LIMITED,SELL,2550000,47.67,-
09-OCT-2009,SELAN,Selan Exploration Technol,AJAY ASSET MANAGEMENT PRIVATE LIMITED,SELL,87771,322.70,-
09-OCT-2009,SELAN,Selan Exploration Technol,JMP SECURITIES PVT LTD,SELL,83501,326.99,-
09-OCT-2009,TELEDATAIT,Teledata Technology Solut,ANGEL INFIN PRIVATE LIMITED,SELL,700677,4.77,-
09-OCT-2009,UBHOLDINGS,United Breweries (Holding,CROWN CAPITAL LIMITED,SELL,775969,217.03,-
09-OCT-2009,UBHOLDINGS,United Breweries (Holding,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,1424031,217.00,-
09-OCT-2009,XLTELENE,XL Telecom & Energy Ltd,ANGEL INFIN PRIVATE LIMITED,SELL,97448,45.58,-
Post Session Commentary - Oct 9 2009
Extending losses to more than 1%, the domestic market ended below the yesterday’s close tracking fall in European markets. Market extended losses also on fall in US index futures. In addition, investors booked profit in several frontline stocks since morning. IT stocks extended losses after IT bellwether Infosys said strengthening rupee was a big concern for its earnings. Meanwhile, Finance Minister Pranab Mukherjee today said that proposed direct tax law would be implemented in 2011. The new direct tax law is likely to slash the corporate tax rate to 25%, phase out exemptions and make things easier for rules on mergers. BSE Sensex ended below 16,700 level and NSE Nifty closed below 5,000 level.
Market opened higher backed by better than expected Infosys result, higher Asian market and strong trade in the US market overnight. On Thursday, the US stock market closed higher, as jobless claims fell and Alcoa kicked off the earnings season with better-than-expected revenue. Besides, continued weakness in US dollar also motivated the sentiments. However, Indian stocks lost momentum soon after start and turned volatile. Further, market was continual to extend losses and touched the day’s low. Benchmark indices dipped sharply during last trading hours on account of all round selling. From the sectoral front, Auto, Bank, Capital Goods, Power, IT and Metal stocks witnessed most of the selling from these baskets. BSE Midcap and Smallcap stocks also followed the same trend. However, Consumer Durable stocks were able to gain favour from the market.
Among the Sensex pack 26 stocks ended in red territory and 4 in green territory. The market breadth indicating the overall health of the market remained negative as 1792 stocks closed in red while 968 stocks closed in green and 71 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 200.88 points or (1.19%) at 16,642.66 and NSE Nifty ended down by 57.05 points or (1.14%) at 4,945.20. BSE Mid Caps and Small Caps closed with loses 43.53 and 50.93 points at 6,301.38 and 7,371.79 respectively. The BSE Sensex touched intraday high of 16,963.08 and intraday low of 16,606.95.
Losers from the BSE Sensex pack are Tata Motors (6.66%), Sterlite Industries (3.35%), Reliance Infra (2.91%), Grasim Industries (2.55%), M&M Ltd (2.39%), Maruti Suzuki (2.37%), SBI (2.32%), JP Associates (2.32%), ICICI Bank (2.29%), Wipro Ltd (2.17%), BHEL (2.15%), TCS Ltd (1.98%), HDFC (1.54%) and Infosys Tech (1.49%).
Gainers from the BSE Sensex pack are Bharti Airtel (2.54%), ONGC Ltd (1.40%), RCom (1.24%) and HUL (0.09%).
On the global markets front, the Asian markets that opened before the Indian market, ended higher on the back of investor’s optimism about global economy. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits and Seoul Composite ended higher by 132.29, 6.54, 183.92, 1.56 and 31.33 points at 2,911.72, 21,4999.44, 10,016.39, 2,652.51 and 1,646.79 respectively.
European markets, which opened after the Indian market, are trading in red. In Paris the CAC 40 is lower 4.39 points at 3,802.42, in Frankfurt DAX index is trading down 8.81 points at 5,707.73 and in London FTSE 100 is trading lower by 3.68 points at 5,150.96.
The BSE Auto index ended lower by (1.72%) or 113.15 points at 6,450.01 on profit taking. Main losers are Tata Motors (6.66%), Ashok Leyland (2.77%), Amtek Auto (2.47%), M&M Ltd (2.39%) and Maruti Suzuki (2.37%).
The BSE Bank index decreased by (1.60%) or 158.65 points at 9,771.71. Losers are Federal Bank (3.66%), Punjab National Bank (3.07%), SBI (2.32%), ICICI Bank (2.29%) and Axis Bank (1.62%).
The BSE IT index closed lower by (1.43%) or 62.19 points at 4,276.81. Losers are Patni Computer (4.76%), Rolta Ind (2.93%), Financ Tech (2.81%), Aptech Ltd (2.18%) and Wipro Ltd (2.17%).
The BSE Power index ended down by (1.43%) or 44.78 points at 3,082.39, as ABB Ltd (2.92%), Reliance Infra (2.91%), Lanco Infra (2.61%), Siemens Ltd (2.54%) and GVK Power (2.22%) ended in red.
The BSE Capital Goods index dropped by (1.42%) or 197.56 points at 13,687.81. Losers are Reliance Industrial Infra (3.64%), Bharat Elect (3.02%), ABB Ltd (2.92%), Punj Lloyd (2.55%) and Siemens Ltd (2.54%).
The BSE Consumer Durables index gained (0.35%) or 12.84 points 3,670.87. Gainers are Titan Ind (3.41%) and Blue Star L (1.90%). Losers are Videocon Ind (4.54%), Gitanjali GE (2.05%) and Rajesh Export (0.38%).
Infosys Technologies ended lower by 1.49%. Net profit of the company increased by 7.5% to Rs 1,540 crore for the quarter ended September 2009, on y-o-y basis. Besides, as compared to June 2009 quarter, its revenue grew by 2.1% and net profit went up by under 1%. Infosys posted a net profit after tax of Rs 1,438 crore for the quarter ended September 30, 2009 as compared to Rs 1,390 crore for the quarter ended September 30, 2008. Total Income has increased from Rs 5,143 crore for the quarter ended September 30, 2008 to Rs 5,433 crore for the quarter ended September 30, 2009.
Tata Motors Ltd slipped 6.66% on equity dilution worries after the company said it will raise long-term capital of upto $ 600 million through global depositary receipts and convertible notes issue.
Mastek Ltd shrunk 7.44% after consolidated net profit declined 25.12% to Rs. 26.41 crore in Q1 September 2009 over Q4 June 2009.
MTNL climbed 0.12% on reports the company is keen on acquiring a majority stake in Zambia''s Zamtel and has signed a non-disclosure pact with the company.
Siemens Ltd lost 2.54% after a consortium of the company secured an overseas order worth Rs 403 crore.
SRF Ltd lost 1.12% on reports the company plans to invest about Rs. 1,000 crore on a new factory to make fluorine-based products for export markets.
ICICI Bank decreased by 2.29%. The bank reduced the auto loan rates by 50 basis points and will now cost 10.75% to 11%.
SBI closed lower by 2.32%. The government has agreed for an in-principle approval to State Bank of India (SBI) and State Bank of Indore’s merger, on Thursday a senior finance ministry
Nifty October 2009 futures at discount
Turnover declines
Nifty October 2009 futures were at 4,931, at a discount of 14.20 points as compared to the spot closing of 4,945.20. Turnover in NSE's futures & options (F&O) segment was Rs 63,622.53 crore, lower than Rs 69,732.16 crore on Thursday, 8 October 2009.
Tata Motors October 2009 futures were at discount at 528.50 compared to the spot closing of 542.
Reliance Industries October 2009 futures were at discount at 2,089.40 compared to the spot closing of 2,097.
Infosys Technologies October 2009 futures were at discount at 2,176 compared to the spot closing of 2,181.05.
In the cash market, the S&P CNX Nifty fell 57.05 points or 1.14% at 4,945.20.
Asian markets reveals mixed trend
Shanghai, Seoul, Nikkei, Hang Seng ends higher while Sydney, Sensex, NZX 50 drift downward
Stock market in Asian region exhibited cautiously optimistic mood on Friday 9 October 2009, thanks to the overnight rally on Wall Street on the back of encouraging economic and corporate news. Most of the markets in the region started off on a strong note, but only few pared early gains.
In the commodity market, crude oil fell in New York, paring its weekly gain, as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has improved sufficiently.
Crude oil for November delivery fell as much as 66 cents, or 0.9%, to $71.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.16 at 2:11 p.m. Singapore time. Yesterday, it rose $2.12 to settle at $71.69.
Brent crude oil for November settlement dropped as much as 71 cents, or 1 percent, to $69.06 a barrel on the London-based ICE Futures Europe exchange. The contract was at $69.19 at 2:31 p.m. in Singapore. Yesterday, it rose 3.8% to end the session at $69.77, the biggest gain since 30 September 2009.
Gold dropped in London for the first time this week, paring its biggest weekly advance since April, as a stronger dollar cut demand and some investors sold the metal to lock in gains from its climb to a record. Gold for immediate-delivery bullion slid $9.20, or 0.9%, to $1,045.90 an ounce by 9:19 a.m. London time. The metal climbed to a record $1,061.55 yesterday and is set for a seventh weekly gain in eight. December gold futures were 0.9% lower at $1,047.10 an ounce on the New York Mercantile Exchange's Comex division.
In the currency market, the U.S. dollar was higher against the yen after U.S. Federal Reserve Chairman Ben Bernanke said in early Asian hours that the U.S. central bank will be ready to tighten policy.
The Japanese yen strengthened against major currencies. The Japanese yen was quoted at 88.75 against the greenback.
The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar trimmed some of its impressive gains on Friday but managed to hold above 90 US cents, buoyed by the likelihood interest rates at home will rise faster than elsewhere. The US dollar earned a reprieve after US Federal Reserve Chairman Ben Bernanke indicated that monetary policy might have to be tightened there as a recovery takes hold.
By the local close, the Australian dollar was buying 90.34 US cents. It was also buying 80.62 yen, 56.4 pence and 61.36 euro cents. The dollar was up about 3 per cent for the week against the greenback.
In Wellington trade, the New Zealand dollar squeaked briefly above US74.50c for the first time in more than 14 months as some good economic news pushed investors towards riskier assets.
Growing optimism of a burgeoning economic recovery saw the US dollar fall to a 14-month low against a basket of currencies as demand for riskier assets grew at the expense of the safe-haven greenback. From US73.99c at 5pm yesterday, the kiwi reached US74.52c early today before easing to US74.30c by 8am.
The South Korean won closed at 1,164.5 won to the U.S. dollar, up 2.5 won from Thursday's close and a fresh yearly high, as rallies in global equities stoked investors' appetite for risk.
The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.2330, 0.0900 down from Thursday's close of NT$32.1430.
In the Asian equity market, most of the major Asian markets ended higher with Shanghai surging as trading resumed after a string of holidays, while Japanese shares rallied on the back of a modest pullback in the yen.
In Japan, shares market endured gains for fourth consecutive day, with materials and resources got a boost as commodities prices rallied. Export related stocks bounced as halt in the yen's raise prompted investors to test the upside amid optimism the global recovery gaining traction, meanwhile the retailers posted strong gains following the upbeat US retail sales data. At the closing bell, the Nikkei 225 Stock Average index rose 183.92 points or 1.87%, to 10,016.39, while the broader Topix was up 10.24 points, or 1.15% to 897.83.
In Mainland China, share market soared on the first trading day after the eight-day National Day holiday, with broad based gains across the sector on strengthening optimism a recovery in the economy was sustainable after reports that Liu Mingkang, chairman of the China Banking Regulatory Commission, predicted that China's GDP growth will exceed 8% in September. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 132.29 points, or 4.76%, to 2,911.72, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 5.29%, to 3,163.71.
In Hong Kong, the stock market ended morning session slightly higher with benchmark indices managed to hold winning streak for fifth consecutive day, after oscillating in and out of boundary at least four times. Banks and financials extended gains on expectations that Chinese policymaker might raise interest rates, following a similar move by Australia. Properties stocks rose on hopes a rebound in the global economy would fuel demand for real estate. The Hang Seng Index rose 6.54 points, or 0.03%, to 21,499.44, while the Hang Seng China Enterprise added 40.22 points, or 0.32%, to 12,496.06.
In Australia, the shares market finished the choppy session in south direction, snapping three days of winning streak after hovering in and out of boundary line despite a positive start, as investors looked to book profits ahead of the weekend. At the closing bell, the benchmark S&P/ASX200 index slid 15.70 points, or 0.33%, to 4,752.9, meanwhile the broader All Ordinaries has shed 8.8 points, or 0.18%, to 4,754.6.
In New Zealand, stock market ended the last trading day of the week in the negative terrain after inching up by almost 1% yesterday. Although the share market edged up during early trade, the share market was unable to maintain the momentum to end the session down almost 0.2%. The NZX50 fell 0.18% or 5.68 points to 3163.25. The NZX 15 declined 0.43% or 24.73 points to close at 5739.75.
On the economic front, as per the 2008-2009 Annual Report released by the Reserve Bank on Friday, New Zealand has escaped major damage in the worst global financial crisis in decades, but the experience has highlighted imbalances and vulnerabilities. The Reserve Bank's role is supposedly only to implement the country's monetary policy and provide financial stability - but this year it's provided a stunning profit as well. The just released annual report shows that for the year to June the RBNZ made a whopping $906 million profit - giving the Government a chunky and no doubt welcome $630 million dividend cheque into the bargain.
In South Korea, stocks closed higher as investor sentiment was buoyed by the central bank's interest rate freeze. The benchmark Korea Composite Stock Price Index (KOSPI) jumped 31.33 points to 1,646.79.
In Singapore, stock market was little changed in the north direction, extending winning streak for fifth consecutive day, after hovering most of time around in and out of boundary line. Shares of banks and properties were in diverse terrain amid bout of profit booking and buying at lower level, meanwhile manufacturing shares and other major blue chip rose on strengthening optimism about the global economic outlook. The blue chip Straits Times Index was ended at 2,652.51, gained 1.56 points or 0.06%.
In Taiwan, stock market once again finished the Friday on fabulous note, giving a right finish for the week. The gain was supported by the news that China and Taiwan are gearing up for the talk on cross-Strait Economic Cooperation Framework Agreement (ECFA), scheduled for inauguration in lat October. n Taiwan, the benchmark Taiex share index took a turnaround on Friday by ending the day higher by 68.65 points or 0.91% in a day, closing the day at 7571.96. For the week, the index spurted 160.08 points or 2.15% of its value.
In Philippines, equities bucked the trend in the other regional markets to trend lower today as selling pressure emerged after the market consolidated in a range in last few days. The failure of the key 3000-point level to be breached on the upside turned the sentiments around as the market participants preferred to sell the stocks ahead of weekends. The benchmark index PSEi lost 0.85% or 25.24 points to 2,942.78, while the All Shares index fell 0.40% or 7.51 points to 1,850.76.
In India, the key benchmark indices lost ground as lower European stock started lower and fall in US index futures triggered profit taking. Intraday volatility was high. The BSE 30-share Sensex was down 200.88 points or 1.19% to 16,642.66. The S&P CNX Nifty was down 57.05 points or 1.14% to 4,945.20.
Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.30% or 3.73 points to 1233.82 while stock markets in Indonesia's Jakarta Composite index ended the day lower at 2474.40.
In other regional market, European shares looked set to end a broadly positive week on a muted note after miners shaved off some gains as gold futures backed away from recent highs. On a regional level, the U.K. FTSE 100 index rose 0.1% to 5,157.26, the German DAX index increased by 0.1% to 5,720 and the French CAC-40 index trading flat at 3,805.90.
Telecom, IT stocks lead correction
A sell-off in telecom stocks on concerns over declining tariffs and rising competition dragged the market lower last week. A liberal 1:1 bonus issue by Sensex heavyweight Reliance Industries failed to lift investor sentiment.
The BSE 30-share Sensex fell 491.89 points or 2.87% to settle at 16,642.66 in the week ended Friday, 9 October 2009. The S&P CNX Nifty fell 138.2 points or 2.71% to 4945.20 in the week
The BSE Mid-Cap index fell 0.63 points or 0.01% to 6,301.38 and the BSE Small-Cap index fell 215.39 points or 2.84% to 7,371.79. Both the indices outperformed the Sensex.
FII inflow in October 2009 totaled Rs 1939.10 crore (till 7 October 2009). Foreign funds had bought equities worth Rs 17,328 crore in September 2009. FII inflow in the calendar year 2009 totaled Rs 62,076.30 crore (till 7 October 2009).
Inflation based on the wholesale price index (WPI) rose 0.7% in the year through 26 September 2009, lower than a rise of 0.83% in the year through 19 September 2009, data released by the government on Thursday, 8 October 2009, showed. Food article index in the WPI was up sharply at 15.45%. Meanwhile, the government revised upwards inflation for the year through 1 August 2009 to a decline of 0.83% from an estimated fall of 1.74%.
Finance Minister Pranab Mukherjee said on Friday, 9 October 2009, that there is steady expansion in domestic demand and savings and investment rates have picked up. The Finance Minister had on Thursday said the rate of economic expansion in the July-September quarter is not expected to be much faster than the 6.1% pace set in the previous three-month period, but he saw acceleration happening starting next month. But with wholesale price inflation expected to top 5% by the end of the fiscal year March 2010, the finance minister said the pursuit of growth would be balanced with the need to keep inflation under check.
The Reserve Bank of India (RBI) Governer, D Subbarao said on Monday, 5 October 2009, while there was broad agreement that the central bank needs to wind back some of its easy policy stance, there were risks if the move was mistimed. An early exit from the accommodative monetary stance on inflation concerns runs the risk of derailing the fragile growth, while a delayed exit may engender inflation expectations, he said. The central bank has pumped huge liquidity in the system and drastically cut policy rates in the aftermath of the global financial crisis last year.
Meanwhile, the water level in main reservoirs was at 60% of capacity as on Thursday, unchanged from a week ago and about 10% below the 10-year average following a poor monsoon, government data showed on Thursday. Reservoir levels have been below average this year as monsoon rains in the June-September season were 23% below average, the worst since 1972. Reservoirs start depleting after the June-September monsoon ends as supply of water diminishes after the rainy season.
Reservoirs are important for hydropower, which accounts for a quarter of India's generation capacity. They also provide water to irrigate winter crops like wheat and rapeseed.
Telecom stocks led a setback on the bourses as trading resumed after a long weekend on Monday, 5 October 2009. The market fell as investors priced in a sharp weakness in global markets on Friday, 2 October 2009, when the Indian market was closed for a public holiday. The BSE 30-share Sensex fell 268.14 points or 1.56% to 16,866.41. The S&P CNX Nifty lost 80.20 points or 1.58% to 5003.20.
Late buying demand in FMCG, metal and banking shares helped key benchmark indices register decent gains after a steep intra-day slide on Tuesday, 6 October 2009. Firm global stocks and expectations of strong Q2 September 2009 results aided a strong intraday rebound that day. The BSE 30-share Sensex rose 92.13 points or 0.55% to 16,958.54. The S&P CNX Nifty was up 24.20 points or 0.48% to 5,027.40.
The two key benchmark indices failed to hold higher levels after trading firm at the onset of the day's trading session on Wednesday, 7 October 2009. The BSE 30-share Sensex fell 151.88 points or 0.90% to 16,806.66. The S&P CNX Nifty was down 41.65 points or 0.83% to 4985.75.
The key benchmark indices garnered small gains in a choppy trade on Thursday, 8 October 2009, as global stocks surged. Higher US index futures also aided gains. The BSE 30-share Sensex rose 36.88 points or 0.22% to 16,843.54. The S&P CNX Nifty rose 16.50 points or 0.33% to 5,002.25.
The key benchmark indices lost ground on Friday, 9 October 2009, as lower European stocks and fall in US index futures triggered profit taking. The BSE 30-share Sensex fell 200.88 points or 1.19% to 16,642.66. The S&P CNX Nifty declined 57.05 points or 1.14% to 4945.20.
IT bellwether Infosys Technologies fell 6.34% in the week. The company announced higher-than-expected Q2 September 2009 results before trading hours on Friday, 9 October 2009. However, the company said strengthening rupee is a big concern for its earnings. The rupee has risen sharply in the past few days. A stronger rupee negatively impacts operating margins of IT firms as the sector earns a lion's share of revenue from exports.
Infosys raised its earnings and revenue guidance in both dollar and rupee terms for the year ending March 2010 at the time of announcing Q2 September 2009 results before trading hour today, 9 October 2009.
The company has forecast a between 6.7% to 7.1% fall in earnings per American depositary share at between $2.09 to $2.10 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 11.1% to 12.4% fall in earnings per American depositary share.
Infosys has forecast a between 1% to 1.3% fall in revenue in dollar terms at between $4.60 billion to $ 4.62 billion for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 3.1% to 4.6% fall in consolidated revenues in dollar terms
The company has forecast 4.4% to 4.8% fall in EPS at between Rs 99.60 to Rs 100 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast 8.2% to 9.6% fall in FY 2010 EPS
The Bangaluru-based software exporter has forecast 1.2% to 1.7% growth in revenue at between Rs 21961 crore and Rs. 22055 crore for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 0.3% growth to a 1.3% decline in FY 2010 revenue.
Infosys' consolidated net profit rose 0.85% to Rs 1540 crore on 2.06% growth in revenue to Rs 5585 crore in Q2 September 2009 over Q1 June 2009. The operating profit margin rose to 34.6% in Q2 September 2009 from 34.1% in Q1 June 2009
Infosys said pricing has stabilised. The company added 35 new clients in Q2 September 2009. It added a gross 6,069 employees in Q2 September 2009. The net employee addition was 1,548.
India's largest software services exporter Tata Consultancy Services (TCS) fell 11.12%. The company will pursue larger deals and leverage its full service offerings, its newly appointed chief executive and managing director N. Chandrasekaran said early in the week. India's third largest software services exporter Wipro fell 8.91%.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 3.24%. The stock had risen 0.96% on Thursday after the company announced a liberal 1:1 bonus issue after market hours on Wednesday. Reliance, listed in 1978, has so far issued bonus shares thrice in its history - in 1980, 1983, and 1997. The company maintained its dividend for the fiscal year ended March 2009 at Rs 13 a share. Both the bonus and the dividend are applicable to shareholders of the erstwhile Reliance Petroleum, which has been merged with RIL.
Chief Financial Officer Alok Agarwal on Wednesday said the company was on track with the production ramp-up for its KG D6 oil and gas fields off India's east coast, and has the financial flexibility to make further investments. The company has produced 2.7 million tonnes of crude oil and 5 billion cubic metres of gas from the KG D6 field since 1 April 2009, and started 16 of 18 wells needed to achieve maximum capacity, he said.
Meanwhile, Anil Ambani Group firm Reliance Infrastructure has reportedly agreed to pay marketing margin to Reliance Industries in less than a month after it stopped paying the levy and has asked the Mukesh Ambani firm to resume natural gas supplies to its power plant. Reliance Infrastructure fell 1.4%.
The company, which had paid US$0.135 per million British thermal unit in marketing cost to RIL for over four months without protest, had on 15 September 2009 written to RIL saying it will no longer pay the 'unauthorised and illegal' levy.
Three telecom majors slumped on worries lower tariffs and increased competition would hurt profitability. Reliance Communications (down 21.59% to Rs 249.35), Bharti Airtel (down 21.18% to Rs 343.15), and Idea Cellular (down 15.45% to Rs 62.40), tumbled.
Telecom stocks witnessed sharp selling pressure ever since media reports suggested on Tuesday, 6 October 2009, that the telecom regulator may ask telecom operators to give their customers the option of paying tariff based on usage per second instead of the current per minute pulse.
Under the 'per second' model', a customer speaking for 20 seconds would only be charged 20 paise for the call rather than the full 60 paise charged currently.
However, the telecom regulator later said the telecom operators would be free to offer various tariff plans and there is no plan to make per-second billing mandatory. Telecom Regulatory Authority of India (Trai) chairman J S Sarma said on Thursday, 8 October 2009, that Trai is not looking at mandating per-second billing for the operators. It would float a consultation paper on the issue and decide only if the industry sees benefits in the system. The regulator plans to issue a consultation paper by the end of this year.
Banking stocks fell on profit taking after recent strong gains. India's largest private sector bank by net profit ICICI Bank fell 2.50%. The bank reduced auto loan rates by 50 basis points. The auto loans from the ICICI Bank will now cost 10.75% to 11%.
India's largest bank by net profit and branch network State Bank of India fell 6.51%. As per recent reports, the state-run bank is planning to raise $1 billion by bond issuance as a part of the bank's Medium Term Note program or MTN, a tool that allows raising funds through various products including floating rate notes or on a fixed rate, subject to necessary regulatory approvals.
However, India's second largest private sector bank by net profit HDFC Bank rose 1.86% as the bank is seen reporting good Q2 results next week on the back of strong growth in fee income. A total of seven brokerages expect 16.3% to 31.5% growth in HDFC Bank Bank's net profit at between Rs 614.10 crore to Rs 694.10 crore in Q2 September 2009 over Q2 September 2008. HDFC Bank unveils Q2 results on 14 October 2009.
Auto stocks fell on profit taking. Auto stocks are seen reporting strong Q2 results on higher volumes and increase in profit margins.
India's largest truck maker by sales Tata Motors fell 5.48%. The stock witnessed major correction on Friday, 9 October 2009, on equity dilution concerns after the company said during market hours it has raised $750 million through an issue of global depositary receipts (GDRs) and convertible bonds. The company said it will use the funds to repay debt taken for acquisition of Jaguar Land Rover (JLR)
Tata Motors said the GDRs were issued at $12.54 each -- a 1.5% discount to Thursday's closing price of Rs 589.25 on NSE. The convertible notes were issued at a 7.5% conversion premium over the GDR price with a yield to maturity of 5.5%.
India's top small car maker by sales Maruti Suzuki India fell 10.67%. The company's total sales rose 17.3% to 83,306 vehicles in September 2009 over September 2008. The figures were released during trading hours on 1 October 2009.
India's largest tractor maker by sales Mahindra & Mahindra fell 0.12%. Its total sales rose 10.94% to 28434 vehicles in September 2009 over September 2008. The company unveiled the sales figures during trading hours on 1 October 2009.
India's largest bike maker by sales Hero Honda Motors rose 0.67%. The firm's total sales rose 4.16% to 4,01,290 units in September 2009 over September 2008.
Heavyweights under pressure
The key benchmark indices lost ground as lower European stocks and fall in US index futures triggered profit taking. Intraday volatility was high. The BSE 30-share Sensex fell 200.88 points or 1.19%, off close to 320 points from day's high and up 35 points from the day's low. Index heavyweights ICICI Bank, Infosys and Reliance Industries led the decline
The S&P CNX Nifty fell below the psychological 5,000 mark. It had settled just above that level on Thursday, 8 October 2009. The market breadth turned weak in late trade in contrast to a strong breadth in early trade.
IT stocks fell after IT bellwether Infosys said strengthening rupee is a big concern for its earnings. IT stocks had surged in early trade on good Q2 September 2009 results from Infosys before trading hours.
Tata Motors plunged on equity dilution worries. Index heavyweight Reliance Industries (RIL) dropped in volatile trade. The stock had risen slightly on Thursday boosted by a liberal 1:1 bonus issue. Banking and auto stocks fell on worries interest rates may harden. Capital goods stocks also fell.
The market was volatile. It slipped into the red soon after a firm opening triggered on good Q2 September 2009 results from IT bellwether Infosys before trading hours and higher Asian stocks. The Sensex regained positive zone on a strong rebound in RIL. The market faltered again later before cutting losses. The market cut losses after hitting a fresh intraday low in early afternoon trade. The market hit a fresh intraday low in mid-afternoon trade.
Stock and sector-specific activity may dominate trade in the coming days based on expectations on Q2 September 2009 results. Auto firms are seen reporting strong Q2 results on strong volume growth and on lower input costs. Cement firms too are seen reporting good Q2 numbers on the back of volume growth, higher realisation and decline in costs like imported coal. Metal firms are seen reporting fall in net profit due to a sharp fall in metal prices on year-on-year basis.
Fall in volumes in the commercial property segment and lower realisations in both commercial and residential property segments, will pull earnings of realty firms lower. A sharp surge in equity markets may help treasury gains for some banks.
Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.
Finance Minister Pranab Mukherjee today said a proposed direct tax law would be implemented in 2011. The new direct tax law is expected to cut the corporate tax rate to 25%, phase out exemptions and simplify rules on mergers.
The chief statistian Pronab Sen today said industrial output numbers will cross double digits by December 2009. He also said inflation may cross Reserve Bank's comfort zone by then. He warned against contractioniary policies based on the data adding that both industrial production and inflation numbers are essentially on the base effect of last year.
Mukherjee said earlier in the day that there is steady expansion in domestic demand and savings and investment rates have picked up. The Finance Minister had on Thursday said the rate of economic expansion in the July-September quarter is not expected to be much faster than the 6.1% pace set in the previous three-month period, but he saw acceleration happening starting next month. But with wholesale price inflation expected to top 5% by the end of the fiscal year March 2010, the finance minister said the pursuit of growth would be balanced with the need to keep inflation under check.
Inflation based on the wholesale price index (WPI) rose 0.7% in the year through 26 September 2009, lower than a rise of 0.83% in the year through 19 September 2009, data released by the government on Thursday showed. Food article index in the WPI was up sharply at 15.45%. Meanwhile, the government revised upwards inflation for the year through 1 August 2009 to a decline of 0.83% from an estimated fall of 1.74%.
Early this week, the Reserve Bank of India (RBI) Governer, D Subbarao said while there was broad agreement that the central bank needs to wind back some of its easy policy stance, there were risks if the move was mistimed. An early exit from the accommodative monetary stance on inflation concerns runs the risk of derailing the fragile growth, while a delayed exit may engender inflation expectations, he said. The central bank has pumped huge liquidity in the system and drastically cut policy rates in the aftermath of the global financial crisis last year.
Meanwhile, the water level in main reservoirs was at 60% of capacity as on Thursday, unchanged from a week ago and about 10% below the 10-year average following a poor monsoon, government data showed on Thursday. Reservoir levels have been below average this year as monsoon rains in the June-September season were 23% below average, the worst since 1972. Reservoirs start depleting after the June-September monsoon ends as supply of water diminishes after the rainy season.
Reservoirs are important for hydropower, which accounts for a quarter of India's generation capacity. They also provide water to irrigate winter crops like wheat and rapeseed.
European equities edged lower on Friday, as weaker miners offset telecom shares that rose after Europe's largest telecom company Telefonica offered bigger-than-expected dividends. Key benchmark indices in France, Germany and UK were down by between 0.11% to 0.25%.
The prices of goods leaving British factories in September 2009 rose 0.4% compared to the same month last year, government data showed Friday. Economists had forecast a 0.1% drop. On a monthly basis, producer price inflation rose 0.5%, compared to forecasts for a 0.1% rise.
Most Asian stocks rose today as investors favored companies linked to the global economic recovery. Key benchmark indices in South Korea, Singapore, Taiwan and Hong Kong rose by between 0.03% to 1.94%. China's Shanghai Composite rose 4.76% after Chinese stock markets reopened after a long holiday.
Japan's Nikkei rose 1.48%. Japanese machinery orders rose less than estimated in August, barely rebounding from a record low. Orders, an indicator of business investment climbed 0.5% in August from July, when they fell 9.3%, the Cabinet Office said today in Tokyo.
US index futures reversed intraday gains. Trading in US index futures indicated the Dow could fall 13 points at the opening bell on Friday, 9 October 2009.
Federal Reserve Chairman Ben Bernanke said in early Asian hours on Friday, 9 October 2009, that the US central bank will be ready to tighten policy. "When the economic outlook has improved sufficiently, we will be prepared to tighten the stance of monetary policy and eventually return our balance sheet to a more normal configuration," the Fed chairman said.
The US central bank has cut interest rates to near zero percent and pumped hundreds of billions into the financial system to counter the worst financial crisis since the Great Depression.
US markets advanced on Thursday after jobless claims fell. The Dow gained 61.29 points, or 0.6%, to 9,786.87. The S&P 500 index added 7.90 points, or 0.8%, to 1,065.48, while the Nasdaq Composite index rose 13.60 points, or 0.6%, to 2,123.93. Stocks rose after the number of workers filing new claims for jobless insurance fell to a nine-month low last week. In other economic news, wholesalers pared inventories for a 12th straight month in August, while the same store sales gain was the largest in more than a year.
Closer home, a section of the market is, however, concerned that a glut in share sales may suck liquidity from the secondary market. As per reports, 30 companies have filed their draft red herring prospectuses in September 2009 with market regulator Securities & Exchange Board of India (Sebi) for raising funds through initial public offering.
The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.
As per one report, companies plan to raise over Rs 50,000 crore through initial public offers (IPOs), follow-up public offers, divestment of stake sale in the second half of the current financial year. Reliance Infratel also announced on 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.
Divestment of state-run firms by the government may also increase the supply of paper in the market. As per recent reports, the government is planning to announce a blueprint for selling its stake in state-owned firms in the first week of October 2009. The policy is expected to suggest how the government will eventually bring down its stake in public sector companies to 75% over a period of time.
Some caution may prevail on the bourses ahead of assembly polls in three states viz. Maharashtra, Haryana and Arunachal Pradesh on 13 October 2009. The counting of votes will take place on 22 October 2009. The stock market remains shut on 13 October 2009 on account of the assembly elections
The BSE 30-share Sensex fell 200.88 points or 1.19% to 16,642.66. The Sensex rose 119.54 points at the day's high of 16,963.08 in early trade. The barometer index fell 236.95 points at the day's low of 16,606.95 in mid-afternoon trade.
The S&P CNX Nifty fell 57.05 points or 1.14% to 4,945.20. Nifty October 2009 futures were at 4,931, at a discount of 14.20 points as compared to the spot closing of 4,945.20. Turnover in NSE's futures & options (F&O) segment was Rs 63,622.53 crore, lower than Rs 69,732.16 crore on Thursday, 8 October 2009.
BSE clocked a turnover of Rs 5707 crore, lower than Rs 6474.18 crore on Thursday, 8 October 2009.
The market breadth, indicating the overall health of the market was weak. The breadth was strong in early trade. On BSE, 960 shares advanced as compared with 1790 that declined. A total of 71 shares remained unchanged.
Among the 30-member Sensex pack, 26 fell while the rest rose.
The Sensex is up 6995.35 points or 72.5% in calendar year 2009 as on 9 October 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8482.26 points or 103.94% as on 9 October 2009. FII inflow in the calendar year 2009 totaled Rs 61,714.40 crore (till 8 October 2009).
Coming back to today's trade, the BSE Mid-Cap index fell 0.69% and the BSE Small-Cap index fell 0.69%. Yet, both the indices outperformed the Sensex.
Sectoral indices on BSE displayed mixed trend. the BSE Consumer Durables index (up 0.35%), the BSE FMCG index (down 0.18%), the BSE Oil & Gas index (down 0.41%), the BSE Teck index (down 0.42%), the BSE Realty index (down 0.78%), the BSE PSU index (down 0.85%), the BSE Metal index (down 1.09%), the BSE Healthcare index (down 1.09%) outperformed the Sensex.
The BSE Auto index (down 1.72%), the BSE Bankex (down 1.6%), the BSE IT index (down 1.43%), the BSE Power index (down 1.43%), the BSE Capital Goods index (down 1.42%), underperformed the Sensex.
IT bellwether Infosys Technologies fell 1.49% to Rs 2,178.351 reversing early surge after the company said strengthening rupee is a big concern for its earnings. The stock came off the day's high of Rs 2293.65. The rupee has risen sharply in the past few days. A stronger rupee negatively impacts operating margins of IT firms as the sector earns a lion's share of revenue from exports.
Infosys raised its earnings and revenue guidance in both dollar and rupee terms for the year ending March 2010 (FY 2010) at the time of announcing Q2 September 2009 results before trading hour today, 9 October 2009.
The company has forecast a between 6.7% to 7.1% fall in earnings per American depositary share at between $ 2.09 and $ 2.10 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 11.1% to 12.4% fall in earnings per American depositary share.
The company has forecast a between 1% to 1.3% fall in revenue in dollar terms at between $4.60 billion to $ 4.62 billion for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 3.1% to 4.6% fall in consolidated revenues in dollar terms.
The company has forecast 4.4% to 4.8% fall in EPS at between Rs 99.60 to Rs 100 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast 8.2% to 9.6% fall in FY 2010 EPS.
The company has forecast 1.2% to 1.7% growth in revenue at between Rs 21961 crore and Rs. 22055 crore for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 0.3% growth to a 1.3% decline in FY 2010 revenue.
Infosys' consolidated net profit rose 0.85% to Rs 1540 crore on 2.06% growth in revenue to Rs 5585 crore in Q2 September 2009 over Q1 June 2009. The operating profit margin rose to 34.6% in Q2 September 2009 from 34.1% in Q1 June 2009.
Infosys said pricing has stabilised. The company added 35 new clients in Q2 September 2009. It added a gross 6,069 employees in Q2 September 2009. The net employee addition was 1,548.
India's largest software services exporter TCS fell 1.98%. The company will pursue larger deals and leverage its full service offerings, its newly appointed chief executive and managing director N. Chandrasekaran said early this week. India's third largest software services exporter Wipro fell 2.17%.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 0.9% to Rs 2100.05. The stock was volatile. It hit a high of Rs 2132.45 and a low of Rs 2090. The stock had risen 0.96% on Thursday after the company announced liberal 1:1 bonus issue after market hours on Wednesday. Reliance, listed in 1978, has so far issued bonus shares thrice in its history - in 1980, 1983, and 1997. The company maintained its dividend for the fiscal year ended March 2009 at Rs 13 a share. Both the bonus and the dividend are applicable to shareholders of the erstwhile Reliance Petroleum, which has been merged with RIL.
Chief Financial Officer Alok Agarwal on Wednesday said the company was on track with the production ramp-up for its KG D6 oil and gas fields off India's east coast, and has the financial flexibility to make further investments. The company has produced 2.7 million tonnes of crude oil and 5 billion cubic metres of gas from the KG D6 field since 1 April 2009, and started 16 of 18 wells needed to achieve maximum capacity, he said.
Meanwhile, Anil Ambani Group firm Reliance Infrastructure has reportedly agreed to pay marketing margin to Reliance Industries in less than a month after it stopped paying the levy and has asked the Mukesh Ambani firm to resume natural gas supplies to its power plant. Reliance Infrastructure fell 2.91%.
The company, which had paid US$0.135 per million British thermal unit in marketing cost to RIL for over four months without protest, had on 15 September 2009 written to RIL saying it will no longer pay the "unauthorised and illegal" levy.
Oil exploration stocks rose as crude oil futures jumped on Thursday on renewed confidence in the global economy that buoyed equity markets. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 1.4%. India's second biggest state-run oil exploration firm by revenue Oil India rose 1.92%. But Cairn India fell 1.43%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
But PSU OMCs fell as higher crude oil prices will increase under-recoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. HPCL, Indian Oil Corporation (IOC) and BPCL fell by between 0.9% to 2.27%.
Light, sweet crude for November delivery settled $2.12, or 3.1%, higher at $71.69 a barrel on the New York Mercantile Exchange on Thursday.
Banking stocks fell on profit taking after recent strong gains. India's largest private sector bank by net profit ICICI Bank fell 2.29% after it reduced auto loan rates by 50 basis points. The auto loans from the ICICI Bank will now cost 10.75% to 11% the bank said in a statement.
India's second largest private sector bank by net profit HDFC Bank fell 0.73% even as its ADR rose 1.46% on Thursday. The bank is seen reporting good Q2 results next week on the back of strong growth in fee income. A total of seven brokerages expect 16.3% to 31.5% growth in HDFC Bank Bank's net profit at between Rs 614.10 crore to Rs 694.10 crore in Q2 September 2009 over Q2 September 2008. HDFC Bank unveils Q2 results on 14 October 2009.
India's largest bank by net profit and branch network State Bank of India fell 2.32%. As per recent reports, the state-run bank is planning to raise $1 billion by bond issuance as a part of the bank's Medium Term Note program or MTN, a tool that allows raising funds through various products including floating rate notes or on a fixed rate, subject to necessary regulatory approvals.
Auto stocks fell on profit taking. Auto stocks are seen reporting strong Q2 results on higher volumes and increase in profit margins. India's largest tractor maker by sales Mahindra & Mahindra fell 2.39%. Total sales rose 10.94% to 28434 vehicles in September 2009 over September 2008. The company unveiled the sales figures during trading hours on 1 October 2009.
India's largest bike maker by sales Hero Honda Motors fell 1.42%. The firm's total sales rose 4.16% to 4,01,290 units in September 2009 over September 2008.
India's top small car maker by sales Maruti Suzuki India fell 2.37%. The company's total sales rose 17.3% to 83,306 vehicles in September 2009 over September 2008. The figures were released during trading hours on 1 October 2009.
India's largest truck maker by sales Tata Motors fell 6.66% on equity dilution concerns after the company said during market hours it has raised $750 million through an issue of global depositary receipts (GDRs) and convertible bonds. The company said it will use the funds to repay debt taken for acquisition of Jaguar Land Rover (JLR).
Tata Motors said the GDRs were issued at $12.54 each -- a 1.5% discount to Thursday's closing price of Rs 589.25 on NSE. The convertible notes were issued at a 7.5% conversion premium over the GDR price with a yield to maturity of 5.5%.
India's largest engineering & construction company by sales Larsen & Toubro fell 1.04% extending losses for the second straight day on equity dilution concerns. The company has reportedly raised $600 million through a share issue to qualified institutional buyers and convertible debentures. Meanwhile, Larsen & Toubro has also launched an offering of foreign currency convertible bonds for an aggregate amount of up to $200 million.
India's largest power equipment maker by sales Bharat Heavy Electricals fell 2.15% on profit taking. The stock had risen sharply in the past few days on expectations of good Q2 September results. The company unveils Q2 results on 23 October 2009.
Among other capital goods stocks, Praj Industries, Siemens, ABB, BEML fell by between 1.58% to 2.92%.
Shares of diversified firm Grasim fell 2.55%. The company said on Saturday, 3 October 2009 it will transfer its cement business to its unlisted unit Samruddhi Cement. The demerger will be completed by March 2010 after which Samruddhi Cement will be listed. Samruddhi will then make an offer to UltraTech Cement for consolidation of the group's cement business. For every share, shareholders of Grasim will get one share of Samruddhi.
Meanwhile, shares of UltraTech Cement gained 3.47%. The cement maker at its board meet held on 6 October 2009 gave in principle approval to a proposal to absorb group firm Samruddhi Cement.
Aditya Birla group Grasim and UltraTech Cement currently operate a combined production capacity of 42 million tonnes a year or a fifth of India's cement capacity.
Among other cement stocks, Ambuja Cements and Birla Corporation, rose by between 0.76% to 0.92%.
Construction shares fell on profit taking. Higher government spending on infrastructure sector in the Union Budget 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction. Nagarjuna Construction Company, Punj Lloyd, Valecha Engineering, Era Infra Engineering fell by between 0.49% to 2.55%.
The government has set a target of spending $20 billion a year on road construction.
India's largest thermal power generator by sales NTPC fell 1.2% on recent reports the government plans to sell 5% its stake in power producer through a follow-on public offering in January 2010.
Among other power stocks, Torrent Power, Power Grid Corpration of India, Tata Power Company fell by between 0.34% to 0.74%.
Telecom stocks rose after recent sharp fall after telecom regulator Telecom Regulatory Authority of India (TRAI) said on Thursday operators would be free to offer various tariff plans to their subscribers, including the per-second billing scheme, and they would also be free to fix the tariff per second.
This would come as a relief to the telecom operators who would have taken a hit on their revenues, if the per-second-billing model was to become mandatory, as telcos are already facing low revenues per subscriber. Telecom stocks had tumbled in the past four days on concerns over declining tariffs and rising competition.
India's largest cellular services provider by sales Bharti Airtel rose 2.54%. Chief Executive Manoj Kohli said on Wednesday that the company is considering a bid for Millicom's assets in Sri Lanka. Sweden's Millicom has put its mobile operations in Sri Lanka up for sale.
India's second largest cellular services provider by sales Reliance Communications (RCom) rose 1.24%.
RCom on Monday, 5 October 2009 reduced call charges across networks to a flat 50 paise per minute, heating up the tariff war in a market that is getting increasingly competitive. Its move came after an almost similar tariff cut by Bharti Airtel last month. A reduction in tariffs by Reliance Communications (RCom) also raised concerns of a fresh tariff war.
FMCG stocks fell on profit taking. FMCG firms derive substantial revenue from the rural sector. United Spirits, Dabur India, Hindustan Unilever, ITC, Britannia Industries fell by between 0.07% to 1.83%.
Metal stocks fell on profit taking. LMEX, a gauge of six metals traded on the London Metal Exchange rose 4.2% on Thursday, 8 October 2009.
India's largest private sector steel maker by sales Tata Steel fell 0.47%. The company's domestic steel sales rose 19% in July-September 2009 quarter to 1.46 million tonnes from a year earlier. Domestic operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker.
Among other metal stocks, Hindalco Industries, National Aluminum Company, Hindustan Zinc, Sterlite Industries fell by between 0.21% to 3.35%.
Private sector ship builder Pipavav Shipyard settled at Rs 56.80 a discount of 2.07% over the initial public offer price of Rs 58. The stock debuted at Rs 60.05 a premium of 3.53% over its offer price of Rs 58.
Hotel stocks surged on hopes hotel occupancy rates may rise on a recovery in domestic economy. Indian Hotels, Hotel LeelaVentures and EIH rose by between 1.41% to 11.88%.
Pipavav Shipyard clocked highest volume of 5.03 crore shares on BSE. Cals Refineries (4.08 crore shares), Unitech (1.06 crore shares), Ispat Industries (0.94 crore shares) and SpiceJet (0.74 crore shares) were other volume toppers in that order.
Pipavav Shipyard clocked highest turnover of Rs 286.20 crore on BSE. Reliance Industries (Rs 191.98 crore), Bharti Airtel (Rs 168.72 crore), Reliance Capital (Rs 157.06 crore) and State Bank of India (Rs 154.37 crore) were other turnover toppers in that order.
Rakesh Jhunjhunwala predicts crash
Big bull Rakesh Jhunjhunwala feels the Indian stock markets, currently on an upward rally, may "burst" in a month or two
"If your see the formation of the indexes, all the stocks are going up, indexes are going up. (There are) minor corrections at every point. You cannot have this kind of a rise...(a) peak without burst. I think the burst will come within one or two months," Rare Enterprises, Partner, Rakesh Jhunjhunwala said at the Private Equity International India Forum 2009, here today.
Indian capital markets have been heading northward led by robust liquidity positions and on the belief that economic recovery has begun.
However, Jhunjhunwala said that "I have a right to be wrong and I may change my opinion very fast."
He said that the future of Indian markets depended on the performance of the Indian economy and the international scenario.
"I think economic growth in India is going to be between 12-14 per cent over the next 5-7 years. I think the factors that are guiding this growth are irreversible, whether it is skills, tolerance, democracy, demographics," Jhunjhunwala said.
"And if growth in corporate profits is going to be a percentage of nominal GDP growth which it is worldwide, I don't see any reason why corporate profits should not grow between 15-17 per cent compounded," he added.
However, there is still some pain left for the western economies which have not yet witnessed the peak of the economic slowdown.
"As far as the economic slowdown goes, I think we have not (yet) seen the peak. I think the next 2-3 years for the western world are going to be far slower than for the rest," Jhunjhunwala said.
According to him, even though India places significant importance on foreign fund inflows, the amount of local money invested in the markets in the last five-years has been far greater than foreign money.
The Dalal Street guru said he has decided not to invest in start-up companies "because you have to nurture them and bringing them to size is a bit of a painful process".
"This year, I think Rs 2,500-3,000-crore local money will come and in two years maybe Rs 6,000 crore. I am bullish. The flow of money is going to go through the roof," he said.
The market pro said he does not expect India to hike interest rates before March next year.
via Economic Times
Pipavav Shipyard Listing Price
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Pipavav Shipyard | 58 | 5 to 7 |
| Thinksoft Global | 115 to 125 | 4 to 5 |
| Euro Multi Vision | 70 to 75 | 5 to 5.50 |
| Indiabulls Power | 40 to 45 | 6 to 7 |
Infosys may edge higher on upward revision in FY 2010 guidance
IT bellwether Infosys Technologies may edge higher after the company raised its earnings and revenue guidance in both dollar and rupee terms for the year ending March 2010 (FY 2010) at the time of announcing Q2 September 2009 results before trading hour today, 9 October 2009.
The company has forecast a between 6.7% to 7.1% fall in earnings per American depositary share at between $ 2.09 and $ 2.10 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 11.1% to 12.4% fall in earnings per American depositary share.
The company has forecast a between 1% to 1.3% fall in revenue in dollar terms at between $4.60 billion to $ 4.62 billion for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 3.1% to 4.6% fall in consolidated revenues in dollar terms
The company has forecast consolidated EPS of between 4.4% to 4.8% fall in EPS at between Rs 99.60 to Rs 100 for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast 8.2% to 9.6% fall in FY 2010 EPS
The company has forecast 1.2% to 1.7% growth in revenue at between Rs 21961 crore and Rs. 22055 crore for FY 2010. At the time of announcing Q1 June 2009 results, Infosys had forecast a between 0.3% growth to a 1.3% decline in FY 2010 revenue.
The consolidated net profit rose 0.85% to Rs 1540 crore on 2.06% growth in revenue to Rs 5585 crore in Q2 September 2009 over Q1 June 2009. The operating profit margin rose to 34.6% in Q2 September 2009 from 34.1% in Q1 June 2009
Private sector ship builder Pipavav Shipyard will list on the stock exchanges today, 9 October 2009. The company had priced its initial public offer (IPO) at Rs 58 per share. The company had offered 7.01 crore shares in the price band of Rs 55- 60 in the IPO, which remained open for subscription between 16 - 18 September 2009.
Reliance Industries may reportedly explore new business opportunities in health, education and affordable housing.
Siemens' consortium with Siemens AG won an export order worth Rs 403 crore.
Jet Airways has reportedly initiated talks with Delhi-based low-fare carrier SpiceJet for an operational alliance in engineering and ground operations.
Meanwhile, Jet Airways' chief executive officer (CEO) Wolfgang Prock-Schauer has resigned, effective 15 October 2009.
Pantaloons Retail (India) reportedly intends to raise Rs 500 crore by selling minority stakes in its three subsidiaries to private equity investors.
Provogue India reportedly plans to open 50 retail stores in the next two years. The average investment per shop is Rs 40-50 lakh, so the company is likely to invest Rs 20-25 crore.
Essar Oilfields Services, a unit of Essar Shipping Ports & Logistics, reportedly expects to achieve financial closure for two jack-up rigs built by ABG Shipyard by end October 2009.
Reliance Infrastructure will reportedly complete and operationalise five road projects within the next 18 months.
Mahanagar Telephone Nigam (MTNL) is reportedly looking to move ahead with a consortium bid for Kuwait telecom Zain and is also interested in buying a stake in Zambian telecom firm Zamtel.
BGR Energy Systems
We recommend a buy in BGR Energy Systems from a short-term perspective. It is evident from the charts of the stock that after recording a 52-week low of Rs 107 in March, it commenced an uptrend. Since then, the stock has been forming higher peaks and troughs and has been on an intermediate-term uptrend. In its upward journey the stock broke through a major resistance level. Recently the stock took key support at Rs 440 (a long-term support level) and bounced up resuming its uptrend. It has gained 7 per cent accompanied with good volume over the past two sessions. The stock is trading well above its 21-day and 50-day moving averages. The daily relative strength index (RSI) has entered into the bullish zone and the weekly RSI is already featuring in this zone. The medium-term up trendline of the stock is still in place. We are bullish on the counter from a short-term perspective. We expect it to rally further until it hits our price target of Rs 530 in the approaching trading sessions. Traders with a short-term perspective can buy the stock, while maintaining a stop-loss at Rs 460.
via BL
Pre Session Commentary - Oct 9 2009
Today domestic markets are likely to open positive as majority of Asian markets have also opened in green. US markets closed higher due to better corporate announcements and better than feared job less data. The fourths straight positive closing of US markets have brought a lot of cheer in other markets as well. In the domestic arena, Infosys reported a moderate rise in quarterly profit by 7.5% thus paving encouraging corporate result expectations. Domestic markets are likely to trade positive during the day.
On Thursday, domestic market closed flat after a jittery trade. The opening was on a subdued not despite RIL coming up with a news of giving bonus shares in the ratio of 1:1. There was little charm during the day and traders were cautious ahead of the forthcoming second quarter results. Asian and European markets traded with remarkable gains exuding signs of buying sentiments and firmness at broader level. Trading was in a narrow range, and market participants left no stone unturned to book profits at day’s high that finally resulted in a flat note ending. Realty, FMCG and Auto were the leaders with gains of 2.09%, 2.01% and 1.66% respectively. On the other hand, laggards included Teck, IT and CG as they slumped by 2.80%, 1.86% and 0.01% respectively.
The BSE Sensex closed higher by 36.88 points or (0.22%) at 16,843.54 and NSE Nifty ended flat at 4,988.35. BSE Mid Caps and Small Caps closed with gains 49.85 points and 16.27 points at 6,344.91 and 7,422.72 respectively. The BSE Sensex touched intraday high of 16,998.52 and intraday low of 16,775.36.
On Thursday, the US stock market closed higher as markets recorded its fourth straight gain on the back of encouraging corporate announcements. Dow component Alcoa (AA 14.35, +0.15) reported an adjusted $0.04 per share, which was considerably better than the loss of $0.09 per share that had been widely expected. Alcoa''s report encouraged traders to propel the materials sector to record a remarkable 2.0% gain. On the macro economic perspective the broader market was supported by news that initial claims for the week ending October 3 fell 33,000 to 521,000, which is below the expected 540,000. Meanwhile, continuing claims fell 72,000 to 6.04 million, much below the consensus call of 6.11 million. Energy, Materials and Consumer Discretionary were the leaders of the day with respective gains of 2.3%, 2.0% and 1.5%. However, the Telecom and Health Care were the laggards of the day with losses of 0.8% and 0.1% respectively. US light crude oil futures for November delivery closed with a gain of 3.0% at $71.68 per barrel, on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) ended with gain of 61.29 points at 9,786.87. NASDAQ index surged 13.60 points to 2,123.93 and the S&P 500 (SPX) closed higher by 7.90 points at 1,065.48.
Indian ADRs ended in green on Thursday. In the telecom space, Tata Communication was up 2.07% and MTNL was up 0.57%. In the banking space, HDFC Bank was up 1.46% and ICICI Bank was up 0.64%. In the IT space, Infosys was up 1.92%, Satyam Computers was up 0.16%, Wipro was up 0.49% while Patni Computers was down 1.12%. In other sectors, Dr Reddy''s Labs was up 5.04%, Sterlite Industries was up 2.88% and Tata Motors was up 0.62%.
The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 4,071.70 Crore and gross debt purchased stood at Rs 2,564.70 Crore, while the gross equity sold stood at Rs 3,298.50 Crore and gross debt sold stood at Rs 45.10 Crore. Therefore, the net investment of equity and debt reported were Rs 773.10 Crore and Rs 2,519.60 Crore respectively.
On Thursday, the partially convertible rupee ended at 46.34/35 per dollar, 0.70% stronger than previous closing at 46.66/67 per dollar. The expectations of further capital inflow helped the local currency record its highest gain in a year. The weakening dollar as against other major currencies has also helped the local currency grow stronger every day.
On BSE, total number of shares traded were 53.58 Crore and total turnover stood at Rs 6,474.18 Crore. On NSE, total number of shares traded were 87.22 Crore and total turnover was Rs 20,841.57 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 58979178 shares, followed by Bharti Airtel with 41637786, Suzlon Energy with 23935413, Idea Cellular with 17856625 and Reliance Comm with 17731381 shares.
On NSE Future and Options, total number of contracts traded in index futures was 665970 with a total turnover of Rs 15,969.80 Crore. Along with this total number of contracts traded in stock futures were 685024 with a total turnover of Rs 22,662.83 crore. Total numbers of contracts for index options were 1131203 with a total turnover of Rs 28,624.24 Crore and total numbers of contracts for stock options were 77846 and notional turnover was Rs 2,475.29 Crore.
Today, Nifty would have a support at 4,998 and resistance at 5,078 and BSE Sensex has support at 16,880 and resistance at 16,996.
Market may open higher on good Q2 September result by IT bellwether Infosys
The market may open higher on good set of Q2 numbers and on higher EPS and revenue guidance announced by IT bellwether Infosys at the onset of trading session. Positive Asian stocks may further support indices.
As per consolidated result, Infosys's net profit rose 0.9% to Rs 1540 crore on 2.1% rise in total income to Rs 5585 crore in Q2 September 2009 over Q1 June 2009. Infosys said full year ended March 2010 consolidated EPS seen at $2.09 to $2.10, down 6.7-7.1% from year ago. It said full year consolidated revenue seen at $4.6 billion to $4.62 billion, down 1-1.3% from year ago period. It said December quarter consolidated EPS seen at $ 0.5 down 13.8% from year ago. It said December quarter consolidated revenue seen at $ 1.16 billion to $ 1.165 billion from a year ago. It said company added 35 clients in September quarter.
Stock and sector-specific activity may dominate trade in the coming days based on expectations on Q2 September 2009 results. Auto firms are seen reporting strong Q2 results on strong volume growth and on lower input costs. Cement firms too are seen reporting good Q2 numbers on the back of volume growth, higher realisation and decline in costs like imported coal. Metal firms are seen reporting fall in net profit due to a sharp fall in metal prices on year-on-year basis.
Fall in volumes in the commercial property segment and lower realisations in both commercial and residential property segments, will pull earnings of realty firms lower. A sharp surge in equity markets may help treasury gains for some banks.
Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.
Finance minister Pranab Mukherjee on Thursday said the rate of economic expansion in the July-September second quarter is not expected to be much faster than the 6.1% pace set in the previous three-month period, but saw acceleration happening starting next month. But with wholesale price inflation expected to top 5% by the end of the fiscal in March 2010, the finance minister said the pursuit of growth would be balanced with the need to keep inflation under check.
Inflation based on the wholesale price index (WPI) rose 0.7% in the year through 26 September 2009, lower than a rise of 0.83% in the year through 19 September 2009, data released by the government today showed. Food article index in the WPI was up sharply at 15.45%. Meanwhile, the government revised upwards inflation for the year through 1 August 2009 to a decline of 0.83% from an estimated fall of 1.74%.
Meanwhile, the water level in India's main reservoirs was at 60 % of capacity on Thursday, unchanged from a week ago and about 10 percent below the 10-year average following a poor monsoon, government data showed on Thursday. Reservoir levels have been below average this year as monsoon rains in the June-September season were 23 % below average, the worst since 1972. Reservoirs start depleting after the June-September monsoon ends as supply of water diminishes after the rainly season.
Most Asian stocks rose today as investors favored companies linked to the global economic recovery over haven assets including utilities shares. The key benchmark indices in South Korea, Taiwan and Hongkong rose by between 0.01% to 1.63%. China's Shanghai Composite rose 3.52% after Chinese stock markets reopened after a long holiday.
Japan's Nikkei rose 0.6%. Japanese machinery orders rose less than estimated in August, barely rebounding from a record low .Orders, an indicator of business investment climbed 0.5 % in August from July, when they fell 9.3 %, the Cabinet Office said today in Tokyo
The US markets advanced on Thursday after jobless claims fell. The Dow gained 61.29 points, or 0.6%, to 9,786.87. The S&P 500 index added 7.90 points, or 0.8%, to 1,065.48, while the Nasdaq Composite index rose 13.60 points, or 0.6%, to 2,123.93. Stocks rose after the number of workers filing new claims for jobless insurance fell to a nine-month low last week down 33,000 to a seasonally adjusted 5, 21,000 last week. In other economic news, wholesalers pared inventories for a 12th straight month in August, while the same store sales gain was the largest in more than a year.
Closer home, a section of the market is, however, concerned that a glut in share sales may suck liquidity from the secondary market. As per reports, 30 companies have filed their draft red herring prospectuses in September 2009 with market regulator Securities & Exchange Board of India (Sebi) for raising funds through initial public offering.
The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.
As per one report, companies plan to raise over Rs 50,000 crore through initial public offers (IPOs), follow-up public offers, divestment of stake sale in the second half of the current financial year. Reliance Infratel also announced on 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.
Divestment of state-run firms by the government may also increase the supply of paper in the market. As per recent reports, the government is planning to announce a blueprint for selling its stake in state-owned firms in the first week of October 2009. The policy is expected to suggest how the government will eventually bring down its stake in public sector companies to 75% over a period of time.
Some caution may prevail on the bourses ahead of assembly polls in three states viz. Maharashtra, Haryana and Arunachal Pradesh on 13 October 2009. The counting of votes will take place on 22 October 2009. Stock exchanges would remain shut on 13 October 2009 in view of the General Assembly Elections.
The key benchmark indices garnered small gains in a choppy trade on Thursday as global stocks surged. The BSE 30-share Sensex rose 36.88 points or 0.22% to 16,843.54 on that day.
As per provisional figures on NSE, foreign funds sold shares worth Rs 376 crore and doimestic funds sold shares worth Rs 20.83 crore on Thursday.
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