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Tuesday, July 27, 2010
SKS Microfinance fixes IPO price band at Rs 850-985 per share
The IPO opens for subscription on 28 July 2010
SKS Microfinance on Monday fixed the price band for its initial public offer (IPO) at Rs 850-985 per share. The issue of 1.68 crore shares by India's largest microfinance company will open for subscription on 28 July 2010 and close on 2 August 2010 for retail and non-institutional investors. For qualified institutional buyers (QIBs), the issue will close on 30 July 2010.
Engineers India FPO Analysis
Engineers India (EIL), the public sector undertaking under the ministry of petroleum and natural gas, is engaged in the business of project implementation and engineering consultancy services primarily for the hydrocarbon sector in India and overseas. Of late, the company has also extended its consultancy and turnkey service to other sectors including non-ferrous mining & metallurgy and infrastructure sector. It offers a complete range of project services including design, engineering, procurement, construction, and project management.
SKS Microfinance - Apply or Not ?
Rich valuation of poor's financier
The high valuation is based on sharp growth rates witnessed in the past, but does not adequately reflect many risks typical of this business
SKS Microfinance, promoted by Dr. Vikram Akula, was originally founded as Swayam Krishi Sangam or SKS Society in 1997 and functioned as a non-governmental organization (NGO) that provided microfinance in Andhra Pradesh. SKS Society transferred its business and operations to SKS Microfinance as a newly incorporated private limited company in India in 2003. SKS Microfinance is the largest Microfinance Institution (MFI) in India in terms of total value of loans outstanding, number of borrowers (called members) and number of branches.
BSE Bulk Deals to Watch - July 27 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/7/2010 530713 Ajel Info RAPIDCREDITSAND MERCANTILES PRIVATE LIMITED S 75000 31.00
27/7/2010 531678 Anand Credit KALPESH C PATEL B 40000 63.50
27/7/2010 531678 Anand Credit DHARMENDRA HARILAL BHOJAK B 31000 64.90
NSE Bulk Deals to Watch - July 27 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-JUL-2010,ATLASCYCLE,Atlas Cycles (Haryana) Lt,CNB FINWIZ LIMITED,BUY,39660,247.87,-
27-JUL-2010,ATLASCYCLE,Atlas Cycles (Haryana) Lt,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,36378,246.56,-
27-JUL-2010,ATLASCYCLE,Atlas Cycles (Haryana) Lt,MANSUKH SECURITIES & FINANCE LIMITED,BUY,11416,247.89,-
RBI’s move in sync; bulls cheer
Today's major news
Reserve Bank of India hikes repo, reverse repo rates
Reliance Industries Q1 net profit zooms 32% yoy; the stock closes 0.14% up
Larsen and Toubro Q1 net profit at Rs666 crore; the stock ends 2.94% lower
Auto shares in top gear
The key benchmark indices ended a tad higher as firm European stocks and higher US index futures, helped the domestic bourses shrug off a rate hike from the Reserve Bank of India (RBI) at a quarterly monetary policy review. The BSE 30-share Sensex was up 57.56 points or 0.32%, off close to 70 points from the day's high and up close to 80 points from the day's low.
Grey Market Premiums - SKS Microfinance
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Aster Silicates Ltd. | 118 | 5 to 7 |
| Midfield Industries Ltd. | 133 | 17 to 18.50 |
| Engineers | 270 to 290 | -- |
| SKS Micro Finance | 850 to 985 | 62 to 65 |
| Prakash Steelage | 100 to 110 | 5 to 5.50 |
Market seen volatile ahead of RBI's monetary policy
The market is likely to open higher following positive global cues. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could rise 22.50 points at the opening bell. However, volatility may arise ahead of the Reserve Bank of India's monetary policy reviewed today, 27 July 2010.
Analysts expect another 25 basis points rate hike from the central bank on Tuesday, 27 July 2010, aimed at anchoring inflation expectations. The Reserve Bank of India (RBI) on 2 July 2010, hiked the repo rate by 25 basis points to 5.5% from 5.25%, with immediate effect. It also hiked the reverse repo rate, at which it absorbs excess cash from the banking system, by an equal 25 basis points to 4% from 3.75%. The central bank said the latest rate hike was a part of the calibrated exit from the expansionary monetary policy.
The RBI is also expected to provide an outline on new banking licenses at Tuesday's quarterly monetary policy review. Finance Minister Pranab Mukherjee had announced in this year's budget that the central bank would consider issuing fresh banking licenses to business houses and also to non-banking finance companies (NBFCs).
The Prime Minister's Economic Advisory Panel on Friday, 23 July 2010, forecast 8.5% growth in GDP in the fiscal year that ends in March 2011 (FY 2011). It expects 4.5% growth in farm output in FY 2011. The headline inflation will be at 6.5% by March 2011, the panel said in a report. The report also said net capital inflows would be $73 billion.
Prime Minister's Economic Advisory Council C. Rangarajan said fertiliser subsidy bill must come down and diesel prices could be freed once inflation begins to come down.
Volatility may also remain high in the near future as traders rollover positions in derivatives segment from July 2010 series to the August 2010 series ahead of the expiry of the near-month July 2010 contracts on Thursday, 29 July 2010.
Ashok Leyland, Glenmark Pharma, GTL, HCL Technologies, Hindustan Unilever, JSW Steel, Larsen & Toubro, Oil India, Patni Computers, Reliance Industries, among others will announce their April – June results today, 27 July 2010.
On the corporate front, the combined net profit of a total of 509 companies fell 14% to Rs 24779 crore on 18.50% rise in sales to Rs 320364 crore in Q1 June 2010 over Q1 June 2009.
Most Asian markets were trading higher today, 27 July 2010, as better- than-estimated new home sales in the US boosted the prospects for global economic growth. The key benchmark indices in Hong Kong, Japan, South Korea, and Indonesia were up by between 0.13% to 0.62%. But, the key benchmark indices in China, Taiwan and Singapore were down 0.38% to 0.10%.
US stocks extended gains on Monday, 26 July 2010 as sentiment was boosted by a surge in new home sales and higher company earnings.
The Dow Jones Industrial Average jumped 100.81 points, or 0.97%, to a two-month high of 10,525.43. The Nasdaq composite index gained 26.96 points, or 1.19%, to 2,296.43, while S&P 500 index added 12.35 points, or 1.12%, to 1,115.01.
Back home, the annual monsoon rains were 7% below normal during the period from 1 June 2010 to 26 July 2010, improving rapidly from a deficit of 16% on 19 July 2010 as the rain-bearing monsoon winds ended a weak phase in the middle of the month.
The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The weather office expects this year's monsoon rains to be at 102% of the long-period average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
The key benchmark indices edged lower on Monday, 26 July 2010, as European stocks moved off highs and as US index futures fell. The BSE 30-share Sensex fell 110.93 points or 0.61% to 18,020.05 and the S&P CNX Nifty fell 30.50 points or 0.56% to 5,418.60.
As per provisional data from the stock exchanges, foreign funds bought equities worth a net Rs 196.32 crore and domestic funds dumped shares worth a net Rs 718.87 crore on 26 July 2010.
Focus on RBI and results!
The ability to focus attention on important things is a defining characteristic of intelligence. - Robert J. Shiller
Given the global cues, we may be in for a positive start. But the market is likely to pay more attention to what the RBI has to say. For containing the inflation persistence and anchoring inflation expectations, anti-inflationary monetary policy actions become a necessity," the RBI mentioned. We expect the central bank to continue its gradual normalization of monetary policy by hiking both the repo and reverse repo rates by 25bps today.
Stressful day…Sensex snaps 3 day winning streak
Indian stocks ran out of steam on Monday amid an all-round selling, as disappointing results from Maruti and Jaiprakash Associates offset an upgrade of India's local currency rating by credit rating agency Moody's Investor Service.
Daily News Roundup - July 27 2010
OIL & Natural Gas Corporation plans to spend US$5bn to develop gas fields to boost output by almost 60% in six years. (ET)
NMDC is contemplating buying coking coal mines in Russia from Kolmar for US$400mn. (BS)
Fortis Healthcare reaps Rs3.8bn as it pulls out of Parkway bid. (BS)
Gap-up start likely; RBI's move eyed
Headlines for the day:
NMDC eyes two mines in Russia for Rs1,881 crore
Dabur picks up Turkey firm for Rs323.78 crore
RBI says inflation remains a target lest it hurt growth
FedEx guidance and housing data lift US stocks
Twenty-nine out of thirty Dow components ended higher
An increased forecast from FedEx and some better-than-expected new home sales figures sent the US stock market up solidly on Monday, 26 July 2010. With Monday's gains, stocks closed higher for third straight day. There weren't any major earnings announcements for traders to digest this morning. The dollar index fell against its competing currencies.
Bullion metals end mixed
Gold drops but silver rises as housing data checks in better than expected
Bullion metal prices ended mixed on Monday, 26 July 2010 at Comex. Gold prices dropped but silver rose after the housing report at Wall Street checked in better than expected. Housing data reduced gold's investment appeal but silver rose due to industrial demand.
Copper prices benefit from strong new home sales data
Lower dollar aids further in prices going up
Copper prices ended higher for sixth straight day at Comex on Monday, 26 July 2010. Lower dollar and better than expected report on the housing front led to higher metal prices on Monday. Copper is heavily used in construction wiring and benefitted from the new home sales news.
Crude ends flat
Prices rise earlier in the day following strong housing data
Crude oil prices ended flat on Monday, 26 July 2010 at Nymex. Prices fluctuated throughout the day and rose earlier during the day following better than expected housing data. Then, prices pared early gains and settled flat for the day.
Tata Elxsi
We recommend a sell in the stock of Tata Elxsi from a short-term perspective. It is evident from the charts of the stock that after encountering a significant long-term resistance in the zone between Rs 340 and Rs 350 in March 2010 itstarted to decline. Since then, the stock has been on a medium-term downtrend. Moreover, it met with twin resistance (down trendline and resistance level) around Rs 290 in early July and it had resumed its medium-term downtrend. On July 26, the stock tumbled 5 per cent, breaching its 21 and 50-day moving averages decisively. The volume traded was above average on that session. The daily relative strength index has entered in to the bearish zone from the neutral region and weekly RSI is slipping towards this zone in the neutral region. After signalling a sell, the daily moving average convergence divergence oscillator is entering in to the negative territory implying downward momentum. Considering that the stock's medium-term down trend-line is intact, our short-term forecast on the stock is bearish. We expect the stock to decline further until it hits our price target of Rs 250 or Rs 240 in the approaching trading sessions. Short-term traders can sell the stock while maintaining stop-loss at Rs 276.
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