Investsmart - Morning Call

Market Grape Wine :

In House :

Nifty at a support of 3730 & 3710 levels with resistance at 3850 & 3880
levels .

Markets to remain under pressure at higher levels with negetive Bias .

Hindalco board meets likely the counter to be under pressure .

Out House :

Sensex at a support of 13013 & 12800 levels with resistance at 13292 &
13335 levels .

Maintain strict stop loss as markets to be very choppy and volatile .

Inflation expected to be 6.17% to 6.22 % likely .

Buy : RIL & RelComm

Buy : Infy & Satyam

Buy : IciciBank & UTIBank

Buy : Polaris & Mphasis

Buy : IFCI & RNRL

Buy : NIITTech

Buy : IVRCL , HCC & NagarConst at dips

Buy : Glenmark , Gitanjali , Adalbs , NDTV & TvToday

Dark Horse : Infy , Polaris , Gitanjali , Rnrl , IFCI , Satyam , UtiBank ,
GlenMark & PrajInd

TGIF : Thank God its Friday : Markets at a corrective mode buy good scripts
with 3 months prespective and be invested .

Thanks Yash

Anagram - Daily Call

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Investors and Scientists - Chetan Parikh

In a great book, "The only three questions that count", the author, Ken Fisher, writes about investing and scientific inquiry.

“When I was a kid, if you wanted to be a scientist they made you take Latin or Greek. I was a good student generally and took Latin not because I wanted to be a scientist—I didn’t—but because I couldn’t figure out the benefit of my other options, Spanish or French. Since no one speaks Latin, I forgot almost everything immediately thereafter, except the life lessons in which Latin abounds—like Caesar distinguishing himself by leading from the front of his troops, not the rear as most generals did (and do). It’s maybe the most important single lesson of leadership.

Another lesson: The word science derives from the Latin scio—to know, understand, to know how to do. Any scientist will tell you science isn’t a craft; rather, it’s a never-ending query session aimed at knowing. Scientists didn’t wake up one day and decide to create an equation demonstrating the force exerted on all earthly objects. Instead, Newton first asked a simple question like, “I wonder what the heck makes stuff fall down?” Galileo wasn’t excommunicated and immortalized for agreeing with Aristotle. He asked, “What if stars don’t work like everyone says? Wouldn’t that be nuts?” Most of us would see the best scientists of all time, if we could meet them face-to-face, as maybe nuts. My friend Stephen Sillett, today’s leading redwood scientist, changed the way scientists think about old growth redwoods and trees in general by shooting arrows with fishing lines tied to them over the tops of 350-foot-tall giants, tying on a firmer line, and free-climbing to the tops. He found life forms and structures up there no one ever knew existed. Dangling off those ropes 350 feet from terra firma is nuts. Nuts! But he asked the questions: What if there is stuff in the very tops of standing trees that isn’t there when you cut them down? And if there is, would it tell you anything about the trees? In the process, he discovered much no one had ever known existed. Why am I telling you this?

Because most of what there is to know about investing doesn’t exist yet and is subject to scientific inquiry and discovery. It isn’t in a book and isn’t finite. We just don’t know it yet. We know more about how capital markets work than we did 50 years ago, but little compared to what we can know in 10, 30 and 50 years. Contrary to what the pundits and professionals will have you believe, the study of capital markets is both an art and a science—one in which theories and formulas continually evolve and are added and adjusted. We are at the beginning of a process of inquiry and discovery, not the end. Its scientific aspect is very much in its infancy.

Scientific inquiry offers opportunities ahead as we steadily learn more about how markets work than we ever imagined we could know previously. What’s more, anyone can learn things now that no one knows but in a few decades will be general knowledge. Building new knowledge of how capital markets work is everyone’s job, whether you accept that or not. You’re part of it, whether you know it or not. By knowingly embracing it you can know things others don’t—things finance professors don’t know yet. You needn’t be a finance professor or have any kind of background in finance to do it. To know things others don’t, you just need to think like a scientist—think freshly and be curious and open.

As a scientist, you should approach investing not with a rule set, but with an open, inquisitive mind. Like any good scientist, you must learn to ask questions. Your questions will help you develop hypotheses you can test for efficacy. In the course of your scientific inquiry, if you don’t get good answers to your questions, it’s better to be passive than make an actionable mistake. But merely asking questions won’t, by itself, help you beat the markets. The questions must be the right ones leading to an action on which a bet can be made correctly.”

Investsmart - Budget 2007-2008

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Budget Analysis - UBS, DB, ENAM, Morgan Stanley

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If you are looking for other BUDGET reports, click on the Budget SEARCH label below!

FII: - Rs 415 cr, MF + Rs. 348 cr

FII Gross purchases Rs 3048.70 Cr Gross Sellers 4693 Cr Net Sellers Rs 1644.30 Cr.
MF Gross Purchases Rs 1224.73 Cr Gross Sellers Rs 981.25 Cr Net Buyers Rs 243.48 Cr.

Our View:

These numbers reflect the selloff and the global disenchantment with emerging markets. The budget did not help at all. Provisional sell figure of over 400 crores for FIIs means more cautious note tomorrow.. though the closing momentum of today may be seen tomorrow as well in the early session.

Close: Post Budget chaos continues

here was no clear direction in the initial trading sessions as to where the market was headed after a volatile start and was followed by choppy sessions. Buying / Short covering was seen in final trading session after buying activity picked up at lower levels before ending the day in green. Steel stocks traded strong as Hot Rolled coil prices were hiked. Support from the Global front was lacking as volatility in Chinese markets continued to send jitters to investors Global investor. Asian Indices ended in Red while the European indices were in positive.

Sensex closed higher by 221 points. The Gainers for the day were Satyam (436, +6%), TCS (1,253, +5.43%), HDFC Bank (980, +5.08%), Wipro (586, 4.48%). While restricting the Gains were Bajaj Auto (2517, -3.82%), ACC (875, -2.78%), Gujarat Ambuja (113, -2.54%), Hindalco (137, -2.26%).

The monthly sales numbers of the Auto companies were released by the respective companies. Sales of Hero Honda stood at 2.8 lakh units up 12% yot. The numbers were good in a competitive two wheeler segment. Market share touched 40% in November. No price hike is planned by the company. In fact the papers today talked of a price cut. The stock slid by a percent down for the day. Bajaj Auto also slipped down on negative numbers.

TVS Motors reported a 6% jump in motorcycle sales during February at 70,155 units compared to 66,391 units in the same month last year. The company reported a 10% increase in its total two-wheeler sales at 1,20,110 units during the month against 1,08,923 units during February 2006. TVS expects to launch a new model this month month and expects stronger growth in the segment during the year. TVS sold 19,937 units of gearless scooters 'TVS Scooty' in February compared to 16,052 units in the same month a year ago, an increase of 24%. The company's exports grew by 33% in February at 8,017 units. The numbers have been above the expectations and the decent growth is seen in the exports. TVS too slipped lower for the day.

Bajaj Auto the arch rival of Hero Honda in the Two Wheeler segment also reported a negative growth of 2% on Yearly basis. Sales of motorcycles fell to 1,71,780 units from 175,256 units. While the over all sales of all two-wheelers fell 3% to 1,74,220 units from 1,79,880 units. Company continued to grow in the three-wheeler segment. Sales in this segment increased by 8% and stood at 27,992 units against 25,896 units in the same month previous year. However, Stock was smashed down by 4% for the day.

Cement companies were hammered on increase in excise duty by 50%. Unlikely that cement will sell below 190 per bag. The price hike will be passed on screamed the papers.. but clearly the manufacturers are on the backfoot given the FMs unhappiness on the price increase.

Technically Speaking: Declines out numbered the Advances and there were 1435 declines against 1140 advances. The volume for the day stood at Rs. 4097 cr. The resistance for the day was between 14,227-14,401 levels while support lied at 12,945-12737 levels. Sensex is moving towards 13,300 levels which could be a pull back. As of now Bulls have clearly showed strength at 12,800 levels.

Sharekhan Investor's Eye dated March 01, 2007

PULSE TRACK

• Q3FY2007 GDP up by 8.6%

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STOCK UPDATE

Bharat Electronics
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,715
Current market price: Rs1,550

Budget positive for BEL

The budgetary allocation for the defence sector has been pegged at Rs96,000 crore for 2007-08, which amounts to a growth of 7.9% over the earmarked figure of Rs89,000 crore in the last year’s budget. The same is 11.6% higher than the Rs86,000 crore shown in the revised estimate for 2006-07. The growth in the total defence allocation is in line with the trend seen in the past couple of years.

The huge jump in the capital outlay for equipment is likely to benefit a company like Bharat Electronics Ltd (BEL), which has emerged as one of the key suppliers of electronic and other high tech equipment to the defence forces. This coupled with the order backlog of around Rs7,300 crore (as on December 2006) and a strong traction in civilian business provides a reasonably strong revenue growth visibility for the company. Moreover, the recent alliances with leading defence contractors would also add to the overall growth in revenues over the coming years.

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VIEWPOINT

GlaxoSmithKline Pharmaceuticals

Powered by rich product pipeline of parent
GlaxoSmithKline Pharmaceuticals (Glaxo), for the full year CY2006, reported a marginal revenue growth of 4.6% to Rs1,552.92 crore. The growth was lower because the company had divested its low-margin animal healthcare business during Q3CY2006. The operating profit margin (OPM) expanded by 180 basis points to 30.6%, resulting in an 8.6% rise in the net profit to Rs545.5 crore. The full year numbers are not strictly comparable with those of the previous year, as the company had divested its animal healthcare business during Q3CY2006.

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SECTOR UPDATE

Automobiles

Two-wheelers in low gear

• Bajaj Auto’s February sales were disappointing, the same declined by 1.2% year on year (yoy).
• Hero Honda Motors’ performance continued to be steady. It recorded a growth of 11.9% yoy in February 2007, with sales of 280,515 vehicles.
• After a dismal performance in the last two months, growth in TVS Motors’ sales was in line with the industry growth. The company sold 120,110 vehicles, recording a growth of 10.3%.
• Maruti Udyog reported a growth of 53.3% for February 2007. The growth rate appears high due to a low base in February 2006 in anticipation of an excise duty cut in the last budget.
• Mahindra and Mahindra’s February sales were good, however the growth rate seems to have slowed down in comparison with the earlier months.

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Indian Bank Bulk Deals

532814 INDIAN BANK GOVERNMENT OF SINGAPORE I B 4732116 91.55
INDIANB,Indian Bank,GOVERNMENT OF SINGAPORE INVT CORPN PTE LTD,BUY,8632177,92.19,-
INDIANB,Indian Bank,CLSA MERCHANT BANKERS LIMITED A/C CLSA (MAURITIUS) LIMITED,BUY,3500000,95.22,-
INDIANB,Indian Bank,Citibank International Plc. A/c Global Emerging Markets Equi,BUY,5700000,93.43,-

MindTree Consulting IPO Allotment

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Edelweiss - Post Budget

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Merrill Lynch - Model Portfolio - ITC

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Golman Sachs - Budget Review

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Nomura - STRATEGY: IF CHINA SNEEZES, DOES THE WORLD CATCH A COLD?

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Market witnesses a bounce

The Sensex, which showed signs of recovery by opening with gains of over 142 points, failed to hold on to its early gains on relentless selling in heavyweight and cement stocks and touched an intra-day low of 12861. The index pared some losses in the afternoon but fell sharply on profit booking at higher levels in cement, auto and consumer durables stocks. Substantial buying in Wipro, TCS, Reliance Communications and Satyam Computer restricted the southbound journey and the Sensex notched up significant gains in late trades to touch an intra-day high of 13193. The Sensex closed with gains of 221 points at 13160, while the Nifty gained 66 points and closed at 3811.

However, the market breadth was negative. Of the 2,614 stocks traded on the BSE 1,407 stocks declined, 1,143 stocks advanced and 64 stocks ended unchanged. Among the sectoral indices the BSE IT index surged 4.13%, the BSE Teck index jumped 3.36%, the BSE Bankex added 2.75% and the BSE CD index was up 2.04%. However, the BSE Auto index shed 0.77%.

Several index heavyweights notched up significant gains on fresh buying support. Among the major gainers TCS soared 5.65% at Rs1,256, Satyam Computers surged 5.47% at Rs435 and HDFC Bank jumped 5.20% at Rs981. Reliance Communications and Wipro added 5.09% each at Rs428 and Rs589 respectively. Infosys at Rs2,153, L&T at Rs1,540, ICICI Bank at Rs855, Tata Steel at Rs452 and NTPC at Rs142 gained 2-3% each.

Select counters came under selling pressure and ended in the red. Bajaj Auto tanked 3.93% at Rs2,514, Gujarat Ambuja declined 3.62% at Rs112, ACC dropped 2.61% at Rs877, Dr Reddy's slumped 2.10% at Rs663 and Hindalco shed 1.75% at Rs137.

The IT counters rallied sharply. Mphasis soared 7.79% at Rs279, HCL Technologies jumped 5.96% at Rs632, Tech Mahindra added 3.95% at Rs1,491 and Patni Computer gained 1.92% at Rs429.

Value-wise Indian Bank registered a turnover of Rs287 crore on the BSE followed by Reliance Industries (Rs203 crore), ACC (Rs121 crore), Bajaj Auto (Rs97 crore) and Reliance Communications (Rs89 crore).