Sunday, July 18, 2010
The Nifty closed on a positive note on Friday on the back of a strong spike in volume in the last one hour of trade. Overall, derivatives volume declined by over 25 per cent on Friday as participants preferred to stay away from the market on account of the weekend as well as range-bound movement in markets.
Unit-linked insurance products or ULIPs are perhaps the most widely discussed and written about financial products in recent times, and not all for the right reasons. First, there was the battle over who would regulate them, and then came a series of regulatory changes to reform the product.
Investors with a two-year horizon can buy the shares of Wipro, a leading software services and hardware player, given the revival in volumes (person-months billed) in its IT services business and strengthening domestic presence (IT products) in the light of large deal wins.
Investments with a one-two year time horizon can be considered in the stock of Punjab National Bank (PNB), as the bank despite its size, holds strong growth prospects. The overall pick-up in credit growth augurs well for PNB, which has been steadily improving its market share. The bank's ability to source funds at a low cost to finance lending would mean strong core earnings.
Disappointing results over several quarters and the sharp run-up in the stock of ABB after the announcement of an open offer, have resulted in the stock trading at very steep valuations, far higher than peers and not supported by current fundamentals.
Investors with a high appetite for risk and a two-three year perspective may buy the stock of Simplex Infrastructures, a diversified construction contractor. Our previous buys on this stock were at Rs 137 in January 2009 and at Rs 415 in September 2008. A pick up in order inflow, diversified presence in terms of segments and geography and a graduation to build-operate-transfer projects bode well for the company.