Momentum Picks - Aug 6 2010
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Friday, August 06, 2010
Fag-end fall for second straight day
Today's major news
Power Grid Q1 net profit up 29% yoy; the stock ends 0.76% higher
Fortis Healthcare Q1 consolidated net loss at Rs14.31 crore; the stock closes 0.42% higher
Jain Irrigation gains on bagging order; the stock ends 3.02% higher
BSE Bulk Deals to Watch - Aug 6 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
6/8/2010 531678 Anand Credit BHAVESH SHANTILAL TRIVEDI B 75000 62.80
6/8/2010 531678 Anand Credit KALPESH C PATEL B 68200 62.03
NSE Bulk Deals to Watch - Aug 6 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
06-AUG-2010,ABHISHEK,Abhishek Corporation Ltd.,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,BUY,82354,21.82,-
06-AUG-2010,AMBIKCO,Ambika Cotton Mills Limit,IDFC MUTUAL FUND,BUY,500000,207.00,-
Market drifts lower for the second straight day
The key benchmark indices reversed initial gains as investors preferred profit taking ahead of the weekend. Index heavyweight Reliance Industries (RIL) dropped. But, media and consumer durables stocks rose. Realty stocks reversed initial gains. Bank stocks fell on profit taking after a sustained rise over the past days. Commercial vehicles maker Tata Motors surged close to 4% on expectations of strong Q1 June 2010 result which is due early next week. Other auto stocks were mixed. The BSE 30-share Sensex shed 28.84 points or 0.16%, off about 100 points from the day's high and up close to 25 points from the day's low.
Bajaj Corp subscribed heavily, grey market premium stable
| Engineers | 290 | 40 to 45 |
| SKS Micro Finance | 985 | 45 to 47 |
| Bajaj Corp. Ltd. | 630 to 660 | 55 to 60 |
| Prakash Steelage | 100 to 110 | 9 to 10 |
Stay light, yet prepared
In the field of observation, chance favors only the prepared mind. - Louis Pasteur.
Market may edge lower on weak Asian stocks
The market may edge lower for the second straight day, tracking subdued Asian stocks which fell after overnight losses on Wall Street. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could fall 9.50 points at the opening bell.
Markets to get a flat start
Headlines for the day:
Returns on ULIP pension plans set to rise
TRAI signals phase-out of analogue cable TV services by 2013
NTPC to get Rs25,000 crore for capacity addition
Daily News Roundup - Aug 6 2010
RIL to buy 60% stake in US shale-gas venture for US$392mn. (ET)
NTPC to get Rs250bn long-term loans from banks to fund its expansion plans to generate 128,000MW by 2032. (BS)
L&T bags orders worth Rs17.5bn from state-run firms. (ET)
Flat start, down day for Sensex
After a tepid start and mostly rangebound session, the Indian market slipped late in the day despite further decline in food inflation and not-so-bad global cues. European markets picked up pace after a slow start and markets in Hong Kong and China recovered.
US stocks end lower as initial claims data disappoint
Investors search direction for clarity on the sustainability of the economic recovery
Disappointing initial claims data gave a very weak start to stocks on Thursday, 05 August 2010. Stocks were stuck in negative territory with modest losses for the entire session. The action came ahead of tomorrow's pivotal nonfarm payrolls report. At the end, stocks managed to pare part of heir losses though. Investors searched for clarity on the sustainability of the economic recovery ahead.
Wockhardt
We recommend a buy in the stock of Wockhardt from a short-term horizon. It is seen from the charts of the stock that it found support at Rs 115 in late May 2010, which is a significant long-term support and bounced upward. Since then, the stock has been on a short-term uptrend. On Tuesday, the stock jumped 7 per cent accompanied with heavy volume, breaking through its near-term resistance level of Rs 145. Further, the stock's bullish momentum accelerated and it penetrated 200-day moving average as well as key resistance at Rs 160 by surging 7 per cent on August 5. We notice that there has been an increase in volume over the past four trading sessions. The daily relative strength index is featuring in the bullish zone and weekly RSI has entered in to this zone from the neutral region. The weekly moving average convergence divergence indicator is on the brink of entering in to the positive territory. We are bullish on the stock from a short-term perspective. We anticipate the stock to rally further until it hits our price target of Rs 169 or Rs 172 in the forthcoming trading sessions. Short-term traders can buy the stock while maintaining stop-loss at Rs 157.
via BL
Gold kisses the $1,200 mark
Prices rise as Indian wedding season nears
Bullion metal prices ended higher on Thursday, 05 August 2010 at Comex. A weaker than expected initial claims data increased the appeal of precious metals as an alternate investment. Physical demand of precious metals also rose in anticipation of India's wedding season, starting later this month, as jewelers are expected to snap up the metal at
bargain prices ahead of the festivities.
Crude ends lower for second straight day
Prices drop in tandem with US stocks after initial claims data disappoint
Crude oil prices ended lower for second straight day on Thursday, 05 August 2010. Prices dropped in tandem with US stocks after initial claims data disappointed traders today.
Thursday, August 05, 2010
Mixed bag for Asian stocks
Markets stay braced up for critical economic data on both sides of the Atlantic
Asian markets had a very mixed outing today as the sentiments were mostly dull ahead of the key European Central Bank (ECB) interest rate decision today and the US non farm payrolls data tomorrow. The US markets had a decent outing in the last session as the ADP Employer Services showed US payrolls, excluding government agencies, climbed by 42,000 last month, recording a rise for the sixth consecutive month. The US dollar lost out in the London trades today, having stayed almost unaltered in the bulk of the Asian session, paving way for a very minute upturn in the US index futures. Select markets went up but the rest of the pack saw uninspiring moves. Yesterday, in the US, the major averages closed firmly in positive territory, after losing out in the previous session. The Dow added 44.05 points or 0.4% the Nasdaq rose 0.9% while the S&P 500 climbed 0.6%.
RIL, ADAG shares slide as Sensex snaps 3-day rally
A likely increase in interest rates by the Reserve Bank of India (RBI) at a mid-quarter policy review on 16 September 2010 triggered profit taking on the bourses after the key benchmark indices struck 2-1/2-year highs at the onset of the trading session. Stock-specific buying continued based on the first quarter result announcements/expectations about first quarter results of individual firms. Two Sensex stocks - TCS and State Bank of India (SBI) scaled record highs.
Market retreating from a 30- month high
Today's major news
Reliance Industries in Marcellus Shale JV with Carrizo Oil & Gas; the stock closes 0.88% lower
Larsen & Toubro bags Rs1,749 crore orders; the stock closed higher by 0.17%
Food inflation eases to 9.53%
Bajaj Corp Final Subscription Figures
Qualified Institutional Buyers (QIBs) 20.19
Non Institutional Investors 53.49
Retail Individual Investors (RIIs) 6.62
BSE Bulk Deals to Watch - Aug 5 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/8/2010 511706 Action Fin KRUNAL CHANDRAKANT PARMAR S 62902 20.00
5/8/2010 532975 Aishwarya Tele PARMESHWAR HUGER B 200000 31.08
5/8/2010 530713 Ajel Info HEMANT KISHANGOPAL SANGANERIA S 55000 26.93
NSE Bulk Deals to Watch - Aug 5 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-AUG-2010,AHLWEST,Asian Hotels (West) Ltd,AKSHI FINANCE PRIVATE LIMITED,BUY,78129,414.67,-
05-AUG-2010,AHLWEST,Asian Hotels (West) Ltd,MARWADI SHARES AND FINANCE LIMITED,BUY,99297,417.41,-
One day before close - Bajaj Corp Grey Market Premium
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Engineers | 290 | 40 to 45 |
| SKS Micro Finance | 850 to 985 | 42 to 45 |
| Bajaj Corp. Ltd. | 630 to 660 | 52 to 55 |
| Prakash Steelage | 100 to 110 | 3 to 4 |
Late day rally helps US stocks to end modestly higher
Earning data keeps the momentum positive across the market
A late day rally helped US stocks end modestly higher on Wednesday, 04 August 2010. Stocks kicked off the day higher but traded with mild gains throughout most part of the day. Better than expected economic data for the day were the main reasons that helped stocks end higher.
Market may extend gains on higher Asian stocks; food inflation data eyed
The market may extend gains for the fourth straight day, tracking higher Asian stocks, which rose after positive economic data in the US. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could gain 9 points at the opening bell. On the macro front, the government will unveil data on some wholesale price indices for the year through 24 July 2010 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST today.
New highs, time to let go!
Some people think it's holding on that makes one strong- sometimes it's letting go. – Anonymous.
A strong show by IT majors ensured the bulls had a good day in office. But market breadth was neutral and volume once again tepid. Yes, we might just see the Nifty piercing 5500 today. But the big question is can the market sustain the advance?
Nifty ends at new 30-month high
The bull-bear slugfest continued today but the bulls emerged triumphant after a fairly volatile session. The Indian market pulled off a late advance after stocks in Hong Kong and China rebounded even as European markets remained in red.
Daily News Roundup - Aug 5 2010
TCS is eyeing two contracts for strategic defense communication systems worth Rs28bn. (BS)
ONGC-led consortium of state-owned energy firms proves viability of 2.7 trillion cubic feet (tcf) Mahanadi block. (ET)
L&T bags orders worth Rs10.25bn for the construction of two hospital, residential projects in Mumbai and a cement plant. (BL)
Andhra Pradesh government awards ~Rs121bn Hyderabad Metro Rail Project to L&T. (BS)
Tamil Nadu government signs three MoUs worth about Rs130bn with major companies for various projects, including setting up of a liquefied gas terminal by IOC. (BS)
Maruti Suzuki may manufacture cars for Volkswagen’s global business on contract basis. (BL)
Maruti Suzuki to advance Manesar plant operations by six months. (ET)
DoT to seek legal view on RCom audit for allegedly under-reporting its revenues to the government. (BL)
M&M is now firming up plans to enter the domestic motorcycle market by the end of this year. (BS)
M&M board is likely to approve the company’s bid for ailing Korean SUV maker Ssangyong at its meeting on Thursday. (ET)
Reliance Power will be able to commission the 4,000MW Krishnapatnam ultra mega power project eight months ahead of schedule. (BS)
Godrej Consumer Products in talks with P&G to give up its license to sell air freshener brand ‘Ambipur’ in India. (BS)
JK Tyres to invest Rs15bn in facility in near Chennai. (BL)
NMDC hikes capex for FY-11 to Rs10bn. (BL)
Mundra Port to invest Rs60bn over the next three to five years for port development. (ET)
Independent News & Media has sold its residual 5.7% stake in Jagran Prakashan for Rs2.01bn to a bunch of domestic and foreign funds. (ET)
IDBI has raised its benchmark prime lending rate by 50 basis points (bps), effective August 5.(BS)
Videocon will invest Rs15bn over the next five years at Manamadurai SIPCOT Industrial Park. (BS)
Piramal Healthcare is looking to grow its healthcare business which consists of CRAM, OTC and critical care segments, through acquisitions as well as normal expansion. (BS)
State government opposes the draft Constitutional Amendment Bill that gives the Union Finance Minister a veto power in matters relating to State GST. (BL)
Union Ministry of Information Technology and Communication wants uniform tax soaps for all IT units. (BL)
FDI declined by about 45% to $1.41bn in June this year. (ET)
Tea exports fell by around 15% to 12.7mn kg in June this year. (ET)
Ministry of heavy industries and public enterprises has sought imposition of up to 14% Customs duty on import of power equipment. (ET)
RBI issues draft proposals for credit protection on infra bonds. (BS)
Domestic markets all set for a gap-up start
Headlines for the day:
Decontrol of petrol prices not enough to tame subsidy bill
Bharti Walmart opens third cash-and-carry store in Punjab
R-Power may commission UMPP eight months ahead of schedule
Copper strengthens
Prices rise as economic data surpass expectations
Copper prices ended substantially higher at Comex on Wednesday, 04 August 2010. Prices rose to three-month high figure following better than expected economic data.
Mixed end for bullion metals
Gold stays a little shy of $1,200 mark
Bullion metal prices ended mixed on Wednesday, 04 August 2010 at Comex. Gold prices rose and crossed the $1,200 mark during intra day trading. Silver prices dropped though.
Crude ends winning streak
Prices drop as gasoline inventories rise for last week
Crude oil prices ended their four-day winning streak and ended lower on Wednesday, 04 August 2010. Prices dropped as energy department reported build up in gasoline inventories for last week. A strong dollar also led to drop in prices.
Wednesday, August 04, 2010
Bajaj Corp IPO subscribed 10.49 times
Gets bids for 3.87 crore shares
The initial public offering (IPO) of hair oil producer Bajaj Corp was subscribed 10.49 times by 16:00 IST on the last day of bidding for qualified institutional buyers (QIBs) today, 4 August 2010. The IPO garnered bids for 3.87 crore shares.
Select markets down in Asia
US economic worries hurt the sentiments, key data releases ahead also keep buying under check
Midfield Industries surges on debut
Settles at Rs 163.05 on BSE
Midfield Industries settled at Rs 163.05 on BSE, a 22.59% premium over the initial public offer price of Rs 133. The stock debuted at Rs 159.40, a 19.85% premium over the initial public offer (IPO) price. The stock hit a high of Rs 174.90 and a low of Rs 150. On BSE, 2.38 crore shares were traded on the counter.
Bajaj Corp Subscription Details
Qualified Institutional Buyers (QIBs) 20.19 times
Non Institutional Investors 0.39 times
Retail Individual Investors (RIIs) 0.40 times
Prakash Steelage IPO Analysis
Prakash Steelage was incorporated by Prakash C Kanugo, a first generation entrepreneur, as a private company in 1991 in Mumbai mainly for trading in stainless steel sheets, coils and plates. In 1997 it was converted into a public limited company following the setting up in 1996 its first plant in the Union Territory of Dadra and Nagar Haveli, with a capacity of 4000 MT per annum, for manufacturing of welded & seamless stainless steel pipes, tubes and U-tubes. In 2007 the company started its second unit at Umbergaon, Gujarat, with a capacity of 8200 MT with total capacity reaching to 12,200 MT.
IT stocks lead rally; TCS scales record high
The key benchmark indices scaled 2-1/2-year highs on strong services sector data and on revival of monsoon rains in the crucial sowing month of July 2010. Data showing sustained buying by foreign funds over the past two months, underpinned sentiments. European stocks and US index futures fell. Asian stocks were mixed. IT stocks surged after IT major Cognizant reported stellar results and raised its guidance significantly.
Daily News Roundup - Aug 4 2010
The joint venture between Cairn India, ONGC, Videocon Industries and Ravva Oil will get a new price of US$4.2/mBtu for gas produced from its East Coast Ravva Fields. (BL)
Reliance Industries and Essar are bidding to acquire the retail assets and lubricants business of BP in five African countries — Zambia, Malawi, Botswana, Namibia and Tanzania. (BS)
Avoid the chase
If you want to catch something, running after it isn't always the best way.- Lois McMaster.
Grey Market Premiums - Bajaj Corp, SKS Microfinance
| Midfield Industries Ltd. | 133 | 17 to 20 |
| Engineers | 290 | 9 to 10 |
| SKS Micro Finance | 850 to 985 | 45 to 50 |
| Bajaj Corp. Ltd. | 630 to 660 | 55 to 60 |
Market may open flat; IT stocks in focus
The market may open higher if trading of the S&P CNX Nifty futures on the Singapore stock exchange is any indication. It indicated that the Nifty could gain 5 points at the opening bell. Sustained buying by foreign funds over the past two months and revival of monsoon rains in the crucial sowing month of July 2010, may support equities. Asian stocks were mixed on Wednesday.
Flat opening likely on cards
Headlines for the day:
Adani buys Aussie coal assets in $2.7 billion deal
Strides gets UK health regulatory nod for Brazil facility
Godrej to invest Rs300 crore in chemical biz
US stocks end modestly lower
Mixed earning and economic reports weigh on stocks
US stocks ended modestly lower on Tuesday, 03 August 2010. Stocks kicked off the day the day in the red, continued to stay somber following disappointing earning reports, and mixed batch of economic data. The July auto sales that were released today also failed to cheer investors.
Bullion metals continue to glitter
Prices rise as dollar continues to stay weak
Bullion metal prices ended higher on Tuesday, 03 August 2010 at Comex. A weak dollar helped prices rise modestly today.
Red metal sheds gains
Prices drop as economic data hints at weak demand
Copper prices ended lower at Comex on Tuesday, 03 August 2010. Prices fell due to weaker than expected set of economic data that hit the wires at Wall Street today. A day earlier, on copper had closed at the highest level in three months.
Crude stays above $82
Prices stay at highest level in three months
Crude oil prices ended substantially higher on Tuesday, 03 August 2010. A weak dollar coupled with mixed economic data led to rise in prices.
Tuesday, August 03, 2010
Sensex ekes out modest gains
Today’s major news:
Hindalco Industries Q1 net profit up 11% yoy; the stock ends 0.64% higher
Strides Arcolab gets MHRA nod for Brazilian unit; the stock closes 1.71% higher
Tulip Telecom inks pact with Qualcomm Inc; the stocks ends 0.30% up
BSE Bulk Deals to Watch - Aug 3 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
3/8/2010 524448 Ahlcon Par BIKRAMJEET AHLUWALIA B 173817 77.53
3/8/2010 524448 Ahlcon Par GLOBAL CREDIT CAPITAL LTD. S 48000 77.50
3/8/2010 524448 Ahlcon Par ABHISHEK FINANCE CO.LTD. S 120000 77.48
NSE Bulk Deals to Watch - Aug 3 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
03-AUG-2010,ASTERSILI,Aster Silicates Limited,ALFA FISCAL SERVICES PVT LTD,BUY,73316,131.99,-
03-AUG-2010,ASTERSILI,Aster Silicates Limited,ANIL FINTURE PVT LTD,BUY,50000,127.95,-
03-AUG-2010,ASTERSILI,Aster Silicates Limited,BP FINTRADE PRIVATE LIMITED,BUY,92498,132.43,-
ICICI Bank, RIL advance in range bound market
The key benchmark indices eked out small gains, rising for the second straight day, as banking stocks and index heavyweight Reliance Industries (RIL) rose. Strong sales reported by auto firms for July 2010, data showing sustained buying by foreign funds over the past two months and revival of monsoon rains in the crucial sowing month of July, supported the domestic bourses. The BSE 30-share Sensex was up 33.62 points or 0.19%, off close to 55 points from the day's high and up close to 40 points from the day's low.
Grey Market Premium - SKS Microfinance, Bajaj Corp
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Midfield Industries | 133 - 18 to 20 | |
| Engineers | 290 | 9 to 10 |
| SKS Micro Finance | 850 to 985 | 63 to 65 |
| Bajaj Corp. Ltd. | 630 to 660 | 85 to 90 |
| Prakash Steelage | 100 to 110 | 3 to 4 |
A good start again!
Cease to ask what the morrow will bring forth. And set down as gain each day that fortune grants - Horace.
After a fairly dull July, the Indian indices had the fortune of kicking off August on a healthy note. A combination of robust domestic fundamentals and improving external scenario sent stocks soaring on Monday. It all started in Asia, where a slowdown in China’s manufacturing sector stoked expectations of a slow tightening. Europe picked up the cues after HSBC and BNP Paribas announced stellar results, and euro-zone PMI climbed. On Wall Street, investors cheered a less than anticipated fall in manufacturing PMI, while construction spending rose unexpectedly.
Market may extend gains on firm Asian stocks
The market may extend Monday's (2 August 2010) gains on firm Asian stocks. Strong sales reported by auto firms for July 2010 will keep sentiment firm. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could gain 14 points at the opening bell.
Stocks may shine at the start
Headlines for the day:
Mobile phone companies push for indigenisation
Reliance Retail's ex-chief plans $100 million PE fund
Rashtriya Chemicals & Fertilisers plans expansion at home, abroad
Daily News Roundup - Aug 3 2010
Maruti Suzuki has raised prices of all its models, except Alto, by up to Rs7,500 owing to sharp increase in its input costs. (ET)
L&T has secured an order worth Rs65bn from Jaiprakash Power Ventures for a 1,980MW power plant in Uttar Pradesh. (ET)
Banks lift Sensex above 18k
Bulls staged a smart comeback on Dalal-Street on Monday with the NSE Nifty ending near days high and the BSE Sensex closing above 18,000. After losing over 1% in the previous week, benchmark stock indices opened with a gap on account of healthy gains in the Asian markets. As the day progressed, a strong rally in European markets perked up the mood in India.
Banking stocks led today's advace, followed by Consumer Durables and Metals stocks. The Mid-Caps and the Small-Cap stocks extended recent gains.
Finally, the Sensex advanced 213 points to end at 18,081, while the Nifty rose 64 points to end at 5,432
Dena Bank
Investors with short-term trading perspective can buy the stock of Dena Bank. The stock recently moved above the key long-term resistance at Rs 98 that was the peak formed in January 2008. If the stock sustains above this level it will be considered a long-term break-out that can take it much higher from the current levels. The stock has been holding above this level, hovering in the zone between Rs 97 and Rs 102 since July 7.
Nifty August 2010 futures at premium
Turnover declines
Nifty August 2010 futures were at 5,440, at a premium of 8.35 points over spot closing of 5,431.65. Turnover in NSE's futures & options (F&O) segment was Rs 61,661.85 crore, lower than Rs 68,419.88 crore on Friday, 30 July 2010.
HSBC earning report gives a huge lift to US stocks
Dow trades with triple digit gains throughout the day
US stocks rallied right out of the gate on Monday, 02 August 2010 and stayed consistently higher throughout the day. Better than expected reports from couple of banks in Europe coupled with stronger than expected economic data at home helped stocks trade with triple digit gains throughout the day. Crude prices and other commodities also shot up with dollar weakening.
Red metal adds more sheen
Copper closes at the highest level in three months
Copper prices ended substantially higher at Comex on Monday, 02 August 2010. A weak dollar coupled with strong rally in US stocks and better than expected economic data led to rise in prices. Copper closed at the highest level in three months.
Bullion metals end higher
Silver shines while gold remains in search of direction
Bullion metal prices ended higher on Monday, 02 August 2010 at Comex. A weak dollar coupled with strong rally in US stocks and better than expected economic data led to rise in prices.
Crude shoots up
Prices rise to highest level in three months
Crude oil prices ended substantially higher on Monday, 02 August 2010. A weak dollar coupled with strong rally in US stocks and better than expected economic data led to rise in prices.
SKS Microfinance Final Subscription Figures - Allotment Chances
Qualified Institutional Buyers (QIBs) 20.38
Non Institutional Investors 18.26
Retail Individual Investors (RIIs) 2.81
Retail investors who applied for full, will get around 32/33 shares
Monday, August 02, 2010
Bulls back in action; Sensex reclaims 18K
Today's major news
Larsen & Toubro bags Rs6,500 crore order from JP Group; the stock ends 0.84% up
Maruti Suzuki's July sales zoom 29.2% yoy; the stock closes 0.86% higher
Gail India's Q1 net profit up by 35% yoy; the stock ends 2.05% up
SKS Microfinance IPO subscribed 13.37 times
Gets bids for 18.41 crore shares
The initial public offer (IPO) of Hyderabad-based microfinance firm SKS Microfinance was subscribed 13.37 times by 16:00 IST on the last day of the issue today, 2 August 2010. The IPO garnered bids for 18.41 crore shares.
August beginning for the new month; Sensex settles above 18,000
The key benchmark indices jumped on the first trading day of August 2010, boosted by strong auto sales in July 2010 and after data showed manufacturing activity picked up pace in the month just gone by. Revival of the monsoon rains in the crucial sowing month of July, sustained buying by foreign funds, and firm global equities, also underpinned sentiments. The barometer index BSE Sensex settled above the psychological 18,000 mark. India's largest private sector bank by market capitalisation and index heavyweight ICICI Bank surged almost 4% after reporting good Q1 results. Other banking stocks also surged.
BSE Bulk Deals to Watch - Aug 2 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
2/8/2010 530431 Ador Fontech NOVASTAR FUND ADVISORS PRIVATE LIMITED B 23005 292.68
2/8/2010 500003 Aegis Logistics SUNDEEP CREDITS PVT LTD B 132046 474.87
2/8/2010 500003 Aegis Logistics SUNDEEP CREDITS PVT LTD S 133117 487.55
NSE Bulk Deals to Watch - Aug 2 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
02-AUG-2010,AMARJOTHI,Amarjothi Spinning Mills,SAR AUTO PRODUCTS LIMITED,BUY,5000,71.40,-
02-AUG-2010,APLAB,Aplab Limited,SURAJ SARKAR,BUY,34984,44.78,-
Daily Newsletter - Aug 2 2010
Most US stocks rose, extending the biggest monthly gain in a year for the Standard & Poor’s 500 Index, as higher-than-estimated consumer confidence and business activity tempered concern the economic rebound is slowing. The NASDAQ and S&P 500 gained 0.20% and 0.01%, respectively, while Dow Jones fell 0.01% respectively. MetLife Inc. climbed 4.6% as the biggest US life insurer topped income projections. McAfee Inc. had the biggest gain in the S&P 500, rising 9.4%, after the maker of security software reported second-quarter profit that beat analysts’ estimates
Bajaj Corporation better grey market premium than SKS Microfinance
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Midfield Industries Ltd. | 133 | 18 to 20 |
| Engineers | 270 to 290 | 9 to 10 |
| SKS Micro Finance | 850 to 985 | 63 to 65 |
| Bajaj Corp. Ltd. | 630 to 660 | 85 to 90 |
| Prakash Steelage | 100 to 110 | 3 to |
4 |
Market may edge higher on gains in Asian stocks; ICICI Bank in focus after Q1 results
Stocks may edge higher on the first trading day of August 2010 on higher Asian equities. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could gain 38 points at the opening bell.
Private banking major, ICICI Bank's net profit rose 17% to Rs 1026 crore in Q1 June 2010 over Q1 June 2009. The bank announced the result on Saturday, 31 July 2010.
Daily News Roundup -Aug 2 2010
Bajaj Auto reported a 66% jump in motorcycle sales to 2,79,781 units in July, it sold 1,68,163 units in July last year. (BS)
Tata Motors reported a 41% increase in vehicle sales to 67,799 units in July, 2010, compared to 48,054 units in the same month of the previous year. (BS)
TVS Motor sales increased by 35% to 1,63,106 units in July, 2010 as compared to 1,20,944 units in previous year. (BS)
Weekly: Sensex, Nifty lose 1.5% each
The bulls seem to have given up their chase as the key indices struggled this week and failed to build on previous few weeks rally. Volatility on account of F&O expiry and mixed corporate results prevented the NSE Nifty from piercing 5,500. In fact, it closed below 5,400. Meanwhile, targeting to check the double digit inflation, RBI hiked its short-term lending and borrowing rates by 0.25% and 0.50% respectively. Finally, the Nifty closed the week lower by 1.5%.
Companies with high margins
Profitability ratios help investors in checking the financial health of the company. With the help of the profitability ratios investors can answer quick questions like - Is the company good at running its business? Is it making money? How profitable is it compared with its competitors?
Indian equities head for a gap-up start
Headlines for the day:
Crompton makes $400-million bid for Emerson's transformer business
Biyani sees a Rs8,500-crore NBFC giant
Maruti restarts selling LPG WagonR in old version
Enjoy the start!
Enjoyment is not a goal, it is a feeling that accompanies important ongoing activity.- Paul Goodman.
The past three months have been anything but enjoyable for the Indian market. The key indices had a dismal May due to European debt worries. Stocks rebounded in June. But hopes of an encore in July were dashed with the market slipping into a consolidation phase. In contrast, world markets (especially the US and Europe) did extremely well, as concerns over the euro-zone debt crisis ebbed. Also, earnings were largely healthy.
US stocks manage to shake off early weakness
Second quarter GDP data checks in lower than expected
US stocks ended mixed with little changes for the week that ended on Friday, 30 July 2010. Majority of the companies finished announcing their earnings by the end of this week. Though Dow and S&P 500 managed to eke out minor gains, Nasdaq ended with little losses. Economic data also dominated the week. The second quarter GDP reading was the most important economic data for the week, which disappointed on the last day of the week.
Mixed batch of economic data helps copper pare earlier losses
Copper ends 12% higher for July 2010
Copper prices ended higher at Comex on Friday, 30 July 2010. Prices pared earlier losses due to mixed batch of economic data at Wall Street on Friday.
Crude nears $79 mark
Prices pare earlier losses in tandem with US equities
Crude oil prices managed to pare their earlier losses on Friday, 30 July 010 at Nymex and ended higher for the day. Prices rose in tandem with US equities which managed to shed most of their earlier losses in the course of the day
and finish near the unchanged mark at the end.
Bullion metal prices stay steady for the week
Gold registers worst monthly drop in seven months
Bullion metal prices ended higher on Friday, 30 July 2010 at Comex. A weaker than expected second quarter GDP report increased the appeal of precious metals as an alternate investment.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. Recently, the embattled euro has played stronger role in moving prices rather than dollar fluctuation. Bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.
On Friday, gold for December delivery ended at $1,183.9 an ounce, higher by $12.7 (1.1%) on the New York Mercantile Exchange. For the week, gold ended lower by a mere 0.3%.
Gold ended the month of July lower by 5%. It was the worst monthly loss for gold since December 2009. Before this, it ended June higher by 2.5%. For the second quarter, gold ended up by 12%, its seventh consecutive quarterly gain. For the first quarter of this year, gold rose by 1.7%. On a year to date basis, gold is higher by 8.9%.
On Friday, September Comex silver futures ended higher by 39 cents (2.2%) at $18 an ounce. For the week, silver ended almost unchanged. For the month of July 2010, silver shed 3.7%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.2%.
Data showed that U.S. economy expanded at an annualized rate of 2.4% in the second quarter, but that was a bit below the 2.5% that had been widely expected and down from the first quarter's upwardly revised 3.7% growth rate. It was also well below the average 4.4% increase over the past six months.
Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Sunday, August 01, 2010
Infotech Enterprises
Investors can book profits in shares of Infotech Enterprises (Infotech), an engineering and geospatial services provider, given the margin concerns that the company is likely to witness and challenges in the form of declining contribution from key verticals.
Bajaj Auto
Investors with a one-to-two-year perspective can consider an investment in the Bajaj Auto stock. The company had a dream run in 2009-2010, aided by a demand revival after the slowdown of 2008. This performance has extended to the first quarter as well. For the quarter ended June 2011, net sales grew 65 per cent year on year to Rs 3,737 crore. Profits almost doubled to Rs 590 crore. This year, the industry growth is expected to moderate to about 15 per cent. Nevertheless, robust volume growth aided by its ‘twin brand' strategy, higher operating margins from a superior product mix, and expanding exports lend visibility to the company's earnings in the near to medium term. At the current market price of Rs 2,688, the stock trades at a reasonable 17 times its estimated 2010-11 earnings, providing room for appreciation.
Birla Corporation
Investors with a two- year perspective can consider investing in the stock of Birla Corporation, a cement manufacturer whose target markets are the northern, central and eastern regions.
Presence in high-demand markets, aggressive capacity expansion with sufficient cash in the kitty and improving operating efficiency on added captive power sources are key positives.
Lanco Infratech
Investors with high risk appetite can consider fresh exposure to the stock of Lanco Infratech with a two-year investment horizon. The company plans to add 1888 MW of additional capacity, trebling its capacity in FY11 which will significantly boost its earnings. It has already commissioned 733 MW of power projects in the June quarter of this fiscal, taking the current operating capacity to 2082 MW.
Interestingly, the company had only a 511 MW project as of March 31 2009.
While the scaling up of capacity led to re-rating, the stock may give better returns as it enters the big league of power utilities. The potential upside to the stock from here would be determined by its on-time execution capabilities for bigger projects, short-term power tariffs and financial closure of residual projects under construction.
At current market price of Rs 66, the stock is discounting its FY12 earnings by 14 times and 2.7 times its estimated FY12 book value. In terms of book value multiple, only public sector peers with regulated margins are at a discount to Lanco making it one of the cheaper stocks in the power sector.
Lanco will immensely benefit from the current short-term tariffs as against the future projects when the merchant rates are expected to soften. Despite the earnings moderation in other revenue segments such as EPC (engineering, procurement and construction), real estate and accounting change done in depreciation, the stock will continue to have strong profit growth.
Business
Lanco Infratech is an integrated infrastructure player with presence in power, other infra segments, power trading and real estate. A significant proportion of its revenues comes from EPC/construction and power generation followed by power trading.
In-house EPC tends to reduce execution risk and sustainable revenue stream for the company when the capital is still locked up during the construction stages. Earnings from EPC (inclusive of internal accruals from power) can be used for funding the equity portion of other projects.
The capacity of power projects is set to jump from 2082 MW (which include the recently commissioned Lanco Kondapalli unit of 133 MW and the Udipi unit of 600 MW) to 3970 MW over the next one year and capacity will go up to 9300 MW by end-2014. It has another 2500 MW in planning stages.
In terms of fuel mix the company has moved from gas projects to coal projects which have better fuel availability. The company is also executing relatively bigger hydro projects. The fuel mix by 2014 would be 74 per cent coal, 8 per cent hydro and 18 per cent gas.
Lanco has around 666 MW (Amarkantak-1 and Kondapalli Ph II) of merchant capacities currently. This proportion is set to go up as the company structured its off-take with part power purchase agreements (PPAs) for most of the projects.
This judicious mix of purchase agreements enable it to earn higher returns (around 25 per cent) while reducing the off-take risk to some extent. The company has signed most of the PPAs with fuel as a pass-through component, to reduce fuel price volatility. Only the Udupi project is running on imported coal while the other coal-based projects either have coal linkages or captive coal blocks.
Funding
Of the 7229 MW under construction, 2700 MW of projects are in advanced stages of completion. Around 2600 MW of project have attained financial closure with the management expecting financial closure of bigger projects in the first half of this fiscal. While more than Rs 35,000 crore capex in pipeline, equity funding of more than Rs 8,000 crore seems very high.
The company last year raised Rs 723 crore through a QIP for funding the near-term projects. Internal accruals over the next four years would take care of most of the equity funding for the company. The debt-equity ratio of the company stood at 2.5 as of March 31 2010, down from 4 the preceding year.
Financials
The consolidated net profits have grown at 28 per cent annual rate over the last four years with higher contribution from the EPC segment. Currently, EPC and construction contribute 55 per cent of the sales and 61 per cent of EBIDTA. However, power generation, which contributes 38 per cent to EBIDTA, is all set to grow manifold. As of March 31, 2010, the EPC and construction segments have an order book of around Rs 25,700 crore.
However, barring the projects nearing completion, the rest are in the initial stages of construction which may mean volatile revenue flow from this segment.
Lanco Infratech's trading arm continues to contribute to short-term trading volumes allowing an additional income stream for the company. In addition, carbon credits for some of its gas-based and alternative-energy projects contribute marginally to the earnings. As of March 31, 2010, the EBIDTA margin of the EPC segment was 14.7 per cent which may moderate to industry levels of 10-11 per cent as more projects outside of the power sector are taken up.
Risks
Additional cess on coal and hike in MAT rate are key negatives for Lanco which are already priced-in. The company is using Chinese equipments which are not tested for Indian coal.
Given the high leverage of the company, any adverse movements in interest rate would increase the interest costs for the company.
Bajaj Corp IPO Review
The Initial Public Offer (IPO) from Bajaj Corp may not be suitable for investors with a conservative risk profile. Though the company occupies a lucrative niche in the hair oil market, it relies heavily just on this one segment to drive growth and profitability. Bajaj Corp plans to diversify by foraying into new products, backed by heavy spending on advertising and promotion with money raised from this IPO.
Aster Silicates slumps after strong debut
Shares of Aster Silicates Ltd. doubled on debut before tumbling by 20% on the last trading day of the week. The stock closed the week at Rs196.30. It had been as high as Rs258 during the week and as low as Rs123. The issue price was fixed at the higher end of the price band of Rs112-118 a share. The IPO of sodium silicate maker was open between June 24 and June 28. The issue was subscribed 4.47 times. Sodium silicate includes food grade sodium silicate, special drilling grade silicate and detergent grade silicate. Aster produces sodium silicate both in glass and liquid form. Food grade sodium silicate is used in the manufacturing of Silica precipitate and Gel, which finds its applications in toothpaste, salt, cosmetics, glucose powder, tyre, rubber and pesticides etc. Sodium silicate, (special drilling grade silicate) is also used in off-shore drilling and for reactivation of old oil and gas fields. Aster intends to use issue proceeds for expansion of manufacturing facilities and additional working capital requirements.
Tulip Telecom to buy 13% in Qualcomm's India arm
Tulip Telecom Ltd. (Tulip), one of India’s largest Enterprise Data Service providers, today announced a strategic partnership with Qualcomm Inc. for a Broadband Wireless Access (BWA) venture. Subject to Government approvals, Qualcomm will have a 74% stake in the venture, while Global Holding Corporation (GHC) and Tulip will hold 13% each, in compliance with applicable Indian Foreign Direct Investment regulations. Tulip’s investment in this venture for the 13% stake will be approximately Rs. 1,400 million.
HCC announces Rs20bn Lavasa IPO, bonus
Hindustan Construction Company Ltd. (HCC) said that the Board of Directors of Lavasa Corporation Ltd. has approved the proposal to undertake, subject to market conditions, obtaining necessary shareholder and regulatory approvals, an initial public offering (IPO) of its Equity Shares for an amount up to Rs20bn. Lavasa Corp.'s Q1 net sales were at Rs1.81bn and net profit at Rs490mn during the quarter ended June 30. Separately, HCC's Board of Directors also approved the issue of Bonus Shares in the ratio of one equity share of Re. 1 each for every existing one equity share of Re1 each held by the Shareholders.
Noel Tata steps down as Trent MD
N. N. Tata, on stepping down as the Managing Director of Trent, has been appointed as the Managing Director of Tata International Ltd. Tata will continue his association with Trent as its non executive Vice Chairman. N. N. Tata has overseen the profitable growth of Trent from a single store company in 1998 to over 90 stores across its retail formats - Westside, Star Bazaar, Landmark, Fashion Yatra, Sisley and Zara. During this period, Trent has entered into a strategic franchise and sourcing agreement with the well-known international retailer Tesco of UK for the Star Bazaar business. Under N. N. Tata’s leadership, the consolidated turnover of Trent has increased from Rs80mn in FY99 to Rs11.37bn in FY10.
Nifty may trade in London
India’s National Stock Exchange (NSE) and The London Stock Exchange Group (LSEG) signed a Letter of Intent to evaluate joint strategic business opportunities, and to co-operate together more closely in the future. As part of the agreement, both exchanges declared their intent to explore the feasibility of an agreement whereby FTSE Group may licence the FTSE 100 Index to the NSE, and whereby the NSE may licence the S&P CNX Nifty (Nifty 50) to LSEG for the purpose of issuing and trading options and other index contracts. Additionally, the two signatories will explore the possibility of holding joint training and education courses besides holding seminars with a particular focus on Small and Medium sized Enterprises (SMEs). The LoI was signed in Mumbai by Xavier Rolet, Chief Executive of LSEG and Chitra Ramkrishna, Joint Managing Director of the NSE, in the presence of the George Osborne MP, the Chancellor of the Exchequer of the United Kingdom, who is leading a high profile British business delegation to Mumbai.
Food inflation slides...falls below 10%
India's food inflation declined in the week ended July 17, falling to single digit levels for the first time in many months while inflation in the fuel group remained elevated. Inflation in the Primary Articles group also fell, the Government said. According to the data released by the Commerce & Industry Ministry, inflation in the Food Articles group stood at 9.67% in the week ended July 17 versus 12.47% in the previous week. Inflation in the Primary Articles group was at 14.5% as against 16.48% in the week ended July 10 while inflation in the Fuel & Power group rose to 14.29% from 14.27% in the preceding week.
Mobile device sales in India are forecast to reach 138.6 mn in 2010: Gartner
Mobile device sales in India are forecast to reach 138.6 mn in 2010, an increase of 18.5% over 2009 sales of 117 million units, according to Gartner, Inc. The mobile handset market is expected to show steady growth through 2014 when end user sales surpass 206 million units.
Weekly Stock Picks - Aug 1 2010
Buy IVRCL Infra
Buy Exide Inds
Buy LIC Housing Finance
Buy Bank of India
Buy Sun TV
Weekly Newsletter - Aug 1 2010
Indian market seems to have hit a soft patch after a really good June, with the key indices struggling to break above the current range. Disappointing earnings from a few bellwethers have not been of any help even as uncertainty prevails over the state of the global economy. Even the fact that food inflation has dipped below 10% and that monsoon deficit has shrunk failed to offset jitters linked to corporate results. Bulls are hoping that August turns out to be better than July.
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