Market may open positive

The gains in overnight US indices and strong ongoing asian indices help domestic market to witness further uptrend on the back of a bullish sentiment. The Nifty could rise further to 3960-3970 level on the upside while it has a crucial support at 3910 on the downside. The Sensex has resistance at 13625 and support at 13560.

US indices registered gains, while the Dow Jones closed above the level at 12227, up 90 points, while the Nasdaq moved up by 19 points to close at 2432.

Indian floats, too, were upbeat on strong domestic and US markets. Except MTNL, other Indian ADRs ended at higher levels. Dr Reddy led the upmove and surged 2.49% while HDFC Bank gained 2.18%, Infosys, Satyam, VSNL, Patni, Tata Motors and ICICI Bank gained over 1% each.

Crude oil prices in the international market gained further, with the Nymex crude oil for January delivery advanced by $1.47 to close at $62.46 a barrel and in the commodity segment, the Comex gold lost $1.90 to settle at $641.80 respectively.

Volatility may remain high due to derivatives expiry

The market is likely to open on a firm note taking cue from firm global markets. However, volatility may remain high as investors square off or roll over November 2006 derivatives contracts to December 2006 series. The November derivatives contracts expire today.

Mutual funds may remain active in the market today to support their month-end net asset values (NAVs).

FIIs were net sellers to the tune of Rs 335 crore on Tuesday (28 November). This was their biggest daily inflow this month. As per provisional data, FIIs were net sellers to the tune of Rs 241 crore on 29 November. They were net buyers to the tune of Rs 291 crore in index-based futures on 29 November. They were net sellers to the tune of Rs 730 crore in individual stock futures on that day. Weakness in index heavyweights restricted Sensex’s gain on Wednesday (29 November) to 15 points.

Asian shares rose on Thursday, led by exporters and resource stocks, after upbeat US growth data eased concerns about the health of the economy in Asia's biggest export market. Japanese shares rose to their highest in nearly two weeks, South Korean stocks hit a six-month high and Singapore's benchmark index notched up a record peak.

US stocks jumped on Wednesday after the government raised its estimate for economic growth and a surge in oil prices lifted energy stocks, helping major indexes recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74 percent, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92 percent, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81 percent, to end at 2,432.23.

US oil futures dipped, but still remained near a two-month high after weekly U.S. inventory data showed a surprise decline in heating fuel stocks in the world's biggest consumer. NYMEX crude for January delivery fell 17 cents to $62.29 a barrel.

Edelweiss - Simplex

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FII: - Rs 335 cr & MF - Rs 269 cr

FII Gross purchases Rs 1895 Cr Gross Sellers Rs 2230 Cr Net Sellers Rs 335 Cr
MF Gross Purchases Rs 404 Cr Gross Sellers Rs 673 Cr Net Sellers Rs 269 Cr

Provisional figures Net negative 241. Clearly there is selling happening and the euphoria is being used by the FIIs to takeprofits. This does not indicate that markets have turned..its just that money should be taken off the table. Markets may tend to be choppy on FNO closing..

Close: Profit selling continues..!

Moving away from the trend seen yesterday the market opened on strong positive note with global cues being positive. Sensex moved swiftly in the early hours of trade but then profit booking was seen across the day. Markets traded ranged ahead of the FNO expiry and ended in green but flat. Cement stocks played vital role helped by the announcement of cut in diesel prices, Sensex closed in positive territory. Apart from cement, buying was seen in sectors like Chemicals, and Tyres. Heavy Buying was seen in Small Caps. Asian markets ended strong while European markets are trading firmly in the positive territory.

Sensex ended up by 15 points at 13616.73. It was helped up by gains in ACC (1146,+4 percent), Grasim (2789.8501,+3 percent), ITC (184.15,+2 percent), Guj Ambuja (146.15,+2 percent) and Dr Reddys (734.65,+2 percent). Restricting the gains were Cipla (248.95,-3 percent), ONGC (856.5,-1 percent), Bharti Tele (621.1,-1 percent), BHEL (2474.3,-1 percent) and NTPC (148.8,-1 percent).

It was however a day for the mid caps. The advance decline was 2 shares advancing for 1 declining. Interest is shifting towards value. Some more gains possible on cards.

Steel prices are expected to soften going forward as news have been making rounds that steel companies are likely to cut prices in December. Depending upon various categories the reduction would be in the range of Rs 500 to Rs 800 per ton. There has been a plunge in international prices of steel and due that the difference between the domestic and the international price is currently around US$ 30 to US$ 40 per ton. Besides shortages of steel in the global markets are reducing as the availability of steel has increased in the domestic market. Steel Authority traded firm.. Tisco was weak.

OVL (ONGC Videsh) the overseas arm of state-run Oil and Natural Gas Corp (ONGC) has won an oil exploration block in Brazil. OVL paid $6,80,000 for the offshore S-M-1103 block in the Santos basin. (S-M-1103) has potential for natural gas and light oil. The company was among the host of global energy giants that were awarded six blocks in Brazil's eighth annual auction of oil and gas concessions. OVL has started producing 4 MT of oil out of which 3 MT coming from its Sudan block. The company has 25 properties spread across 14 countries. It will be beneficial it will increase the share of OVL in the overall production levels of the group. ONGC ended lower by 1% on the back of cut in fuel prices. The subsidy will continue to bog this one down.

Technically Speaking: Market was ranged as it started positive and rallied between the channel of 13711 - 13586 level. Volumes were good at 4388 cr. However, the breadth had been in the favor of Advances as they were 1.77 times the Decliners. The Resistance lies at 13760 - 13683 while Support at 13558 -13509 levels.

Technical Trends - Nov 30 2006

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Thanks Vishesh

Sweet Land of Liberty

Back in 2001, when Indian Hotels Corporation Limited (IHCL) was implementing Total Productivity Maintenance (TPM) and the Kaizen approach across its properties, it benchmarked with the Ritz Carlton on customer satisfaction measurements in luxury hotels. Just five years later, IHCL has signed an agreement to acquire the Boston-based Ritz-Carlton hotel, a luxury property in operation since May 19, 1927, for about $170 million. With the deal scheduled to close mid-January, this will be the second us hotel to be acquired by the Tata Group company (which owns the Taj chain of resorts and hotels), after it took management control of The Pierre, a luxurious landmark hotel on New York's 5th Avenue, for $50 million. Clearly, Indian Hotels is morphing from being a leading Asian chain of luxury hotels into a global one with presence in the gateway cities of the world. In five years, it aims to have a third of its revenues from overseas operations-and the US would account for a fair share of those sales.

Indian Hotels is not the only company for which the US is a key fragment of a globalisation blueprint. According to a CRISIL report titled "Creating the Indian MNC", acquisitions by Indian companies overseas have touched $7.3 billion in the April 2005-September 2006 period. A little over a quarter of these target companies are in the US, with the total deal value amounting to a cool $1.9 billion. Tata Tea's $677-million acquisition of a 30 per cent stake in the Glaceau, an enhanced water company, is till date the largest us acquisition by an Indian company and skews the us share substantially in 2006-07 to 52.7 per cent, but the us was the #1 destination even in 2005-06 with an 18.3 per cent share of all overseas acquisitions.

Whilst niche American buyouts have been taking place for some time now-it services majors like TCS, Wipro and Satyam have been particularly busy as has a clutch of pharma majors-a handful of Indian corporations are now beginning to make us acquisitions for sheer size and scale. Rain Calcining Ltd, Asia's largest manufacturer of calcined petroleum coke (CPC), acquired a 20 per cent stake in GLC Carbon Corporation and is reportedly looking to acquire full control. If successful, Rain will emerge the world's largest producer of CPC. Rain has the capacity to manufacture 480,000 tonnes per annum of CPC, while GLC, with its four facilities in Texas, Oklahoma, Louisiana and Argentina, is about four times the size with an annual capacity of 2.3 million tonnes. Clearly, scale is an important factor in influencing the decision for Rain Calcining as market leadership brings with it the ability to influence pricing, especially in a commodity industry.

For other manufacturers with global ambitions, the US is one land that they just can't ignore. When last June, Bharat Forge, the second largest forgings firm in the world, purchased Federal Forge Inc., a company engaged in the design and manufacture of complex forged steel components, for $9.1 million, it gained an immediate foothold in the us passenger car and light truck market; and most importantly, a manufacturing base close to some of Bharat Forge's largest customers.

Access to markets has been a key driver of these acquisitions and the US being the largest market in the world, has been a big draw. Says Sunil Alagh, Chairman, SKA Advisors, a Mumbai-based marketing and branding consultancy: "The level of importance of entering the us markets depends on the product. Indian companies should enter any market and more specifically the US, from a position of strength, that is in sectors like it, textiles, specialty teas, Indian cuisine-based foods, etc. It will be of little importance in areas like soaps, cosmetics, confectionery or air conditioners. Entering the us market should not be a 'fashion' but 'opportunity-based'."

The Indian textiles industry has been trying something similar-to make inroads into the $30-billion (Rs 1,35,000-crore) US and EU home textiles market by aligning its low-cost manufacturing base with us-based brands. Companies like GHCL have chosen to grow via the inorganic route-it acquired Dan River, the third largest player in the us home textiles market, the owner of the brand 'Bed in a Bag' and preferred supplier to large retailers like JC Penny and Linen & Things, Wal-Mart and Bed, and Bath & Beyond. GHCL Joint Managing Director R.S. Jalan says: "The acquisition provides us the opportunity to quickly move into the us market with a ready customer base and infrastructure in place." S. Kumars, too, is reportedly bidding for one of the largest American home furnishing manufacturing and distribution companies, America Pacific, and the deal size is rumoured to be in the range of $100-120 million (Rs 450-540 crore). America Pacific supplies bedding, bath and window products to many us brands, including Nautica, Dockers and Liz Claiborne. It also makes and markets home linen under its own brand.

So, how much of an imperative is penetrating the us-the final frontier in some ways-for Indian companies with MNC ambitions? Rama Bijapurkar, an independent market strategy expert, explains that America shouldn't be blindly pursued because it's potentially the most lucrative market. Rather, the importance of a country must be based on how feasible it is to build a decent sized, profitable, and competitive position. "So, if that is better done in Africa or Uzbekistan or UK, why not?" asks Bijapurkar. That may explain why some Indian companies have made big-ticket acquisitions in less likely regions-Suzlon in Belgium, Aban Loyd Chiles in Norway and Gail in Bermuda.

Crude to trade firm

Crude oil: Firm prices
The cold weather in the USA has lifted crude back above $61 a barrel amid concerns that OPEC might trim production if oil prices continue to fall. The remarks by Bernanke further confirmed that energy inflation is still looming large and posing a threat to the economy. Expect the prices of crude to stay firm and any surprise draw down in the inventory would further support crude.

Bullion: US GDP to give direction
Existing home sales bouncing back saw some profit taking in gold ahead of the Federal Reserve chairman's speech. However, the durable goods numbers dropped and consumer confidence fell, which supported gold from its initial slide. Further, Bernanke’s comments that there was inflationary risk supported the precious metals.

Today, the US Q3 gross domestic product numbers should dictate the market direction. Initial forecasts are dollar positive, but any surprises would see huge volatility in the evening. We continue to reiterate that gold should be accumulated on dips.

Soybean: Bird flu in South Korea
Soybean prices declined sharply on the news of an outbreak of bird flu in South Korea. The outbreak could disrupt Indian soy meal exports in the short term. As per trade estimates, India exported around 600,000 tonne of soy meal to South Korea in 2005-06 (October 2005-September 2006), up from around 204,000 tonne a year ago. The situation would be clearer in the coming days.
Soy oil: External factors at play
Soy oil prices declined in conjunction with soybean prices on reports of an outbreak of the bird flu. The weakness in palm oil futures also added to the decline. The counter saw some profit booking after a huge rally in the last few days. If the weakness in soybean continues then the soy oil prices too could come under pressure.

Mustard: Affected by soy
Mustard prices ended lower in tandem with the prices of soybean and soy oil. The counter too witnessed profit booking after a sharp rally. The demand at higher levels has not been encouraging. NAFED has decreased its selling price by Rs10 to Rs1,870 per quintal. The off take by the processors has also decreased in the last few days.

Wheat: Range-bound
Imported wheat is available in some south Indian states. The total quantity of piled up wheat now stands at 3.5 lakh tonne. Due to the poor stock position the FCI has not been selling wheat to millers since the last couple of months, reducing the supply in the market.

Apollo Sindhoori - Closing Notes

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Investor Complaint - Intime Spectrum & Parsvanath

Kindly publish this on your blog so anybody who have not received any
response from Parsvnath, I will take the matter with SEBI. Also send
it to other Indian Financial Bloggers.


Thanks,
Chetan


Dear Investors,

Pissed off with Intime Spectrum treatment of not reciving Phone calls
nor fax nor reply to e-mail messages, I left all my work today and
kept hunting for journalists and bloggers. I have got good response.
They want me to collect all the grievances and present to them and
they have assuerd they will talk to SEBI and also publish about
problems faced by small investors.

I had also called SEBI office and he told me, unless I give a written
complaint he won't be able to start investigation. I have sent my
individual complaint. Even if i have to spend money out of pocket I am
willing to. Lets fight Intime legally and expose them.

Kindly send me your Application Number, No. of Shares Applied, City
and if you have tried to contact Parsvnath or Intime - a brief 3-5
sentences.

I will compile everything and send them to Sucheta Dalal and others.

My e-mail address is ichetan AT Gmail Dot Com.

Thank you for your time.

Motilal Oswal - Sintex

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Motilal Oswal - Siemens

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Alphageo India: Sharekhan Stock Idea dated November 29, 2006

Alphageo India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs214
Current market price: Rs150

Back on the shopping list

Key points

• Order wins improve growth visibility: Alphageo India (Alphageo) has recently bagged orders worth Rs32 crore and has built a healthy pipeline of orders that is likely to bring in additional orders of around Rs30-35 crore. The company also has an option to accept a Rs20-crore low-margin order from Oil India. Consequently, the revenue growth visibility for the next fiscal (FY2008) has improved considerably. Moreover, one of the orders is from Rajasthan (as against the current concentration of order backlog from the North-East region), which should help in mitigating the seasonality pattern resulting from the closure of operations during the monsoon season in the North-East region.
• Growth to be funded through equity dilution: The huge capital investment required to support the estimated exponential growth in revenues is likely to be partially funded by dilution of equity. The company is expected to raise around Rs15 crore through a preferential issue of shares/warrants to promoters and/or institutional investors. The issue is estimated to result in 22% dilution of its equity base.
• Re-initiating coverage: We are re-initiating coverage on Alphageo as the visibility of its revenue growth has improved considerably on the back of the recent order wins and the healthy order pipeline. Consequently, we recommend a Buy call on the stock with a price target of Rs214 (10x its FY2008 estimated earnings per share on a diluted equity base).

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Capita Telefolio Volume 5 - Nov 29th 2006

Wednesday Capita Telefolio Volume No 5, Issue No 23 dated Wednesday, 29th
November 2006.

The following recommendation is based on price as on Wednesday, 29th
November 2006.

BUY : Savita Chemicals at Rs 485

Now full details:

BUY : Savita Chemicals at Rs 485
BSE Code : 524667
NSE Symbol : SAVITACHEM
Market Lot : 1

Savita Chemicals is one of the largest players in transformer oils and a key
player in white oils used in FMCG industry. Strong growth in power sector
and in turn the transformer industry augurs well for the sustained high
growth of the company. The scrip is available cum 2:3 bonus.

Actual EPS for year ended March 2005 : Rs 33.7
Actual EPS for year ended March 2006 : Rs 42.8
Projected EPS for year ended March 2007 : Rs 56.5

End of Wednesday Capita Telefolio Volume No 5, Issue No 23 dated Wednesday,
29th November 2006.

Focus shifts to small-cap, mid-cap shares

Small-cap and mid-cap stocks came to the fore today as investors rotated money from frontline shares. The valuations of small-cap and mid-cap shares have turned attractive vis-a-vis frontline stocks following a surge some of the frontline stocks in the past few months.

BSE Small-Cap Index rose 103.62 points or 1.5% today to settle at 6,635.01 and BSE Mid-Cap Index advanced 76.64 points or 1.3% to 5,727.85. In comparison, Sensex rose a muted 14.78 points or 0.1% to settle at 13,616.73. The S&P CNX Nifty rose 6.45 points or 0.16% to settle at 3,928.20.

Volatility was high. After surging over 100 points at the onset of trading tracking firm Asian markets, Sensex gradually pared gains later and it even slipped into the red at one point of time at the fag end of the trading session. It recovered from the red and moved into the green again at close.

Sensex hit a low of 13,586.04 and high of 13,711.76.

Liquidation of positions in the November 2006 derivatives contracts ahead of expiry of November contracts on Thursday weighed on the bourses today. Five Sensex heavyweights Infosys, ICICI Bank, ONGC, Bharti Airtel and Reliance Industries (RIL) slipped into the red. These five stocks have a combined weightage of over 40% in Sensex.

Asian and European markets were firm today. Japan’s Nikkei 225 average jumped 221 points or 1.3% to 16,076.20 following robust industrial output data.

The market sentiment remains bullish due to strong FII inflow and expectations that corporate earnings growth will remain strong. Sensex has risen sharply over the past few weeks. The barometer index is up almost 45% in calendar 2006 so far.

Market would keenly watch the extent of rollover to December contracts from November 2006 contracts which expire on Thursday 30 November. A large rollover would mean traders expect the rally on continue whereas lower rollover would indicate correction might be on the cards.

The broad market depicted bullish trend today as gainers outpaced losers by a ratio of 1.77:1 on BSE. Select side counters surged.

BSE clocked a turnover of Rs 4388 crore compared to Tuesday’s Rs 4161 crore.

Cement shares extended their recent upmove on firm cement prices. ACC gained 3.6% to Rs 1140, Gujarat Ambuja Cements rose 2.3% to Rs 146.55 and Grasim gained 2% to Rs 2770.

Cigarette major ITC advanced 2.5% to Rs 184.40. 9.3 lakh shares changed hands in the counter on BSE.

Auto shares rose after the government today announced a cut of Rs 2 per litre in price of petrol and rupee one per litre in diesel. Bajaj Auto rose 1.1% to Rs 2670, Tata Motors gained 0.8% to Rs 817 and car major Maruti Udyog added 0.6% to Rs 920.

Refinery shares slipped on worries that cut in retail fuel prices would put further pressure on their marketing margins. HPCL shed 3.5% to Rs 291.50 and BPCL lost 1.7% to Rs 354.

Indian Oil Corporation dropped 4.7% to Rs 459.90 and Bongaigaon Refinery shed 5.5% to Rs 50.65. Indian Oil Corporation (IOC) today recommended a swap ratio of four IOC shares for every 37 shares held in Bongaigaon Refinery, for merger of Bongaigaon Refinery in IOC.

Oil exploration major ONCG dropped 0.8% to Rs 859.80. ONGC has to sell crude at a discount to state-run refiners to help them reduce losses incurred due to state-set prices.

Bharti Airtel dropped 1.3% to Rs 620 on profit taking. Communist Party of India said on Tuesday it was against the entry of Wal-Mart Stores Inc. in India, a day after Bharti Enterprises – a Bharti Airtel group company announced a tie-up with the world's biggest retailer on Tuesday.

ICICI Bank shed 0.8% to Rs 855 and Reliance Industries dropped 0.1% to Rs 1249.

Software major Infosys shed 0.7% to Rs 2151 in volatile trade. On Tuesday, Infosys ADR rose nearly 1%.

Tata Steel dropped 0.04% to Rs 475.60 in volatile trade after Anglo-Dutch steelmaker Corus Group said on Wednesday its third-quarter earnings rose 63% on the back of higher steel prices. Corus last month agreed a 4.3 billion-pound takeover offer from Tata Steel. However, Brazil's Companhia Siderurgica Nacional has since proposed making a higher bid and it has been conducting due diligence with the help of senior Corus management. Corus this week delayed a shareholder meeting to vote on Tata's takeover offer until Dec. 20.

Tyre shares extended their recent rally as natural rubber prices remained low. JK Industries gained nearly 5% to Rs 141.90, CEAT rose 4.4% to Rs 131.75, Apollo Tyres rose 4% to Rs 357 and MRF rose 2.7% to Rs 4612.

Shriram Transport Finance jumped 6% to Rs 140. The company today reported 11.4% growth in net profit for Q2 September 2006 to Rs 39.49 crore (Rs 35.44 crore). Total income rose 37.8% to Rs 318.21 crore (Rs 230.76 crore).

Recently listed Lanco Infratech jumped 14% to Rs 267. The scrip rose on huge volume of 1.1 crore shares on BSE.

Torrent Power jumped 20% to Rs 84.80. Volumes in the stock were a huge 70.9 lakh shares on BSE. Torrent Power is the umbrella company of the newly amalgamated generation, transmission and distribution businesses of the Torrent Group. It debut on the bourses was listed on the bourses on Tuesday (28 November).

Distillation equipment maker Praj Industries gained 4% to Rs 195.20 after the company said on Wednesday it had secured an order worth 2 million euros to design a bio-ethanol complex in Belgium

Bilpower rose 0.2% to Rs 154.15 after the company said on Wednesday it bought 30,999 shares of Tarapur Transformers for Rs 3.41 crore. The firm has also funded Tarapur to the tune of Rs 4.95 crore

Jindal Saw jumped 6% to Rs 404.90 on strong Q4 results. Jindal Saw reported a surge in net profit for Q4 September 2006 to Rs 47.56 crore from Rs 24.13 crore in Q4 September 2005. Net sales rose 98.9% to Rs 1123.39 crore from Rs 564.71 crore.

Voltas gained 2.4% to Rs 110. 21.3 lakh shares changed hands in the counter on BSE.

GE Shipping lost 5% to Rs 213. The stock was relisted on Monday following a scheme of arrangement whereby it transferred its offshore services division to a separate company Great Offshore which would be listed separately.

Gujarat NRE Coke rose 20% to Rs 32.25 after the company said the shareholders of Zelos Resources which is listed in the Australian stock exchange last week passed a resolution giving effect to the company taking a controlling 85% stake in the Australian resources firm. Zelos Resources is now being renamed Gujarat NRE Resources NL.

BPO firm Tricom India rose 10% to Rs 123.60. On Monday, the company announced that it plans to put up a new centre at Nashik with a recruitment of 400 freshers to its fold.

NDTV lost 1.3% to Rs 229.75 after the company said it has entered into a strategic alliance with Karan Johar and Dharma Productions for its entertainment business

Torrent Pharma rose 3.6% to Rs 197. Dr. Reddy's Laboratories said on Wednesday it had signed a deal with Torrent Pharmaceuticals to sell the latter's anti-cholesterol products, Listril and Listril Plus, in Russia.

Kamat Hotels India rose 0.7% to Rs 170.45. The company said on Tuesday that Kotak Securities under its portfolio management schemes, raised its stake in the company to 5.09 percent. The schemes of Kotak Securities acquired 47,648 shares, or a 0.36 percent stake, on Nov. 24, the company said.

Gitanjali Gems rose 10% to Rs 239.90 on reports is in talks to acquire U.S. jewellery retailer Samuels Jewelers Inc. in a transaction valued at $25 million.