Fibonacci Levels - Jan 3 2008
India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Thursday, January 03, 2008
Daily Technicals - Jan 3 2008
Nifty — The index opened on a flat note and saw a sharp decline in morning trade after which it rallied throughout the trading session. It ended the day with gains of 35 points.
Upward bar reversal — The index has posted a perfect upward bar reversal on the daily bar chart (i.e. the index traded below the previous day’s low and closed above the previous day’s high and close).This suggests the index should move up from current levels. On the upside index can test the 6260 levels. On the downside it has support around 6168 and 6100 levels.
Conclusion — Expect upswing to continue.
NSE Bulk Deal Watch - Jan 3 2008
02-JAN-2008,ANSALHSG,Ansal Housing and Constru,CLSA MAURITIUS LIMITED,BUY,297815,397.75,-
02-JAN-2008,ERACONS,Era Constructions (India),MONEY MATTERS ADVISORY SERVICES LIMITED,BUY,132000,807.01,-
02-JAN-2008,BOC,BOC India Limited,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,316000,221.77,-
02-JAN-2008,HTMTGLOBAL,HTMT Global Solutions Ltd,TATA EQUITY MANAGEMENT FUND,SELL,130000,580.84,-
02-JAN-2008,MAHLIFE,Mahindra Lifespace DevLtd,BSMA LIMITED,SELL,200000,868.60,-
02-JAN-2008,STINDIA,STI India Ltd,BSMA LIMITED,SELL,760000,28.40,-
India best performing markets
India dominated a list of the best-performing stocks in 2007, according to an analysis of stocks in Russell Investment Group's global indexes released on Wednesday.
A list of the top 100 stocks, based on total return, showed India with 41 of the top 100 and five of the top 6.
China, represented by Inner Mongolia Yitai Coal Ltd, was at the top of the list. The stock returned 1,017 percent last year, according to Russell.
The returns are calculated in U.S. dollar terms.
Forty-eight of the top 100 stocks are based in the BRIC countries of Brazil, Russia, India and China, Russell said.
Six of the stocks are U.S.-based companies.
More than one-third of the top 100 stocks, 39, are in the materials and processing sector.
The second-biggest gainer in 2007 was India-based Jai Corp Ltd, up 877 percent.
Rounding out the top five were Reliance Natural Resources Ltd, up 823 percent, Ispat Industries Ltd, with a return of 742 percent, and Jindal Steel & Power Ltd, up 664 percent. All of them are India stocks.
India-based Essar Oil Ltd was in sixth place, up 570 percent.
The MSCI India index rose 70.53 percent in 2007, calculated through of Dec. 28.
The vast majority of stocks in the top 50 were smaller companies, as measured by market capitalization. Forty-three were from the small-cap tier and only seven from the large-cap tier.
The Russell Global Index uses the Russell 3000 as its U.S. component. That index includes the small-cap stocks in the Russell 2000 as well as larger stocks in the Russell 1000.
Stocks below the Russell 2000 bottom cut-off are not included in the global indexes.
Precious metals glitter
Gold rallies to twenty eight year high as crude kisses $100 mark and dollar weakens
Precious metals ended considerably higher today, 02 January, 2008, the first trading day of FY 2008. Gold prices rallied and crossed the $864/ounce mark during intra day trading after crude oil prices hit a record roof touching the $100 mark for the first time ever. Weakening of the dollar also contributed to higher gold prices.
Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for February delivery rose $22 (2.6%) to close at $860 an ounce on the New York Mercantile Exchange on Wednesday, 02 January, 2008. prices touched $864.5 during intraday trading. Last year, on 7 November, prices had touched $848/ounce. Today’s closing prices was the highest price after a record $873 that gold hit on 21 January, 1980.
Comex Silver futures for March delivery rose 37 cents (2.5%) to $15.29 an ounce. Prices touched 26 year high on 7 November, 2007, after reaching $16.275. The metal had climbed 15.5% in FY 2007. The metal also has gained for seven straight years.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
In the currency market today, the dollar extended losses against most major rivals, mainly against the yen after a weak Institute of Supply Management report. The ISM report said the U.S. factory sector contracted in December for the first time in nearly a year as new orders collapsed.
The dollar index, which measures the greenback against a basket of six major currencies, was down about 0.8% at 75.970.
In the energy market today crude oil rose to $100 a barrel for the first time in New York as record global fuel consumption threatens to outpace production. It extended FY 2007’s rally when crude gained 57%.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. Crude is 57% higher on a yearly basis. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold had climbed 31% in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record.
The Fed reduced federal funds rate three times in FY 2007. The current interest rate stands at 4.5%. The Fed also lowered its discount rate twice, the interest it charges on direct loans it makes to banks, and currently it stands at 4.75%. With these interest rate cuts, dollar has been tumbling down. Market anticipates that there will be more rate cut in the coming year.
At the MCX, gold prices for February delivery closed higher by Rs 273 (2.6%) at Rs 10,879 per 10 grams. Prices rose to a high of Rs 10,920 per 10 grams and fell to a low of Rs 10,616 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 406 (2.1%) higher at Rs 19,884/Kg. Prices opened at Rs 19,490/kg and went to a high of Rs 20,020/Kg during the day’s trading.
Gold is expected to rally to all-time highs in the first quarter in FY 2008 as higher oil prices and a weaker dollar will continue to boost demand.
Crude at $100
Crude prices soar as traders expect another drawdown in crude inventories
Fresh violence in Nigeria and supply concerns pushed crude oil prices to record territory today, Wednesday, 02 January, 2008. Price also rose as dollar weakened. Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
Today crude-oil futures for light sweet crude for February delivery closed at $99.62/barrel (higher by $3.64/barrel or 3.8 %) on the New York Mercantile Exchange. Earlier, during the lunch hours, crude oil for February delivery rose $4.02 (4.2%) to $100 a barrel on the New York Mercantile Exchange, the highest since trading began in 1983.
Prices shot up today after fresh violence was reported at Nigeria, which is the world's 12th-largest oil producer and ranks as the fifth-largest exporter of oil to the U.S. prices also rose after traders speculated that Energy Department will report steep drawdown in crude inventories for week ended 28 December, 2007.
In the currency market today, the dollar extended losses against most major rivals, mainly against the yen after a weak Institute of Supply Management report. The ISM report said the U.S. factory sector contracted in December for the first time in nearly a year as new orders collapsed. Dollar slipped more than 1% against the euro.
Brent crude oil for February settlement today rose $3.99 (4.3%) to $97.84 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in Fy 2007, the most since 1999 when prices more than doubled.
Heating oil and gasoline contracts make record
February natural gas today rose 36.2 cents to stand at $7.845 per million British thermal units.
Against this backdrop, February reformulated gasoline gained 7.81 cents to $2.5689 a gallon, and February heating oil soared 9.1 cents to $2.7404 a gallon. Gasoline contract touched an intraday record of $2.5784. Heating oil futures touched $2.7465, the highest intraday price since trading began in 1978.
At the MCX, crude oil for January delivery closed at Rs 3,898/barrel, higher by Rs 124 (3.3%) against previous day’s close. Natural gas for December delivery closed at Rs 306.6/mmtbu, higher by 10.5/mmtbu (3.5%).
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February, 2008 meeting in Vienna.
As per EIA, global oil markets will likely remain tight through 2008 and monthly average oil prices are expected to near $85 per barrel over the next year. The IEA, an adviser to 27 nations, said global demand in 2008 will rise 2.5% to 87.8 million barrels a day.
The U.S. Energy Information Administration will issue inventories reports at 10:30 a.m. Eastern tomorrow, a day later than usual because of the New Year's holiday.
Wednesday, January 02, 2008
Reliance Energy - the story
Via Unkown Source - Not our view, we don't subscribe to these views . Do your due diligence
Do you know-
One stock that has surprised almost every-one on street in terms of stock performance (no analyst could justify that on fundamental grounds !!!)
One company that has led to re-rating of utility valuations
One company with most flamboyant Chairman who never hesitates to paint rosy picture
One company that has miserably failed in past to deliver (investors paid premium valuations to this stock 4 years ago, but were let down)
One company who now plans the biggest corporate governance frauds (by floating the parallel company in same business to increase promoter shareholding)
One company that wants to be 30 GW over next 9 years, but don't know exactly how
One company (group) that believes they can get 10X price to book for their power plants today (while their first projects will begin construction soon !!!)
Well I am talking about RELE-Reliance Power here.
1. The stock performance took everyone for a big surprise and led to re-rating of all the utility stocks in India. The company today wanted to set up 30 GW capacity over next 9 years; let me remind you that the same company had promised to set up the largest single location gas power plant 4 years ago, while the main plant has not
been ordered yet. (It is easier for this stock lovers to say that gas didn't come through, so is it Reliance Energy's fault).. Well here is a question I want to ask, when investors pay premium valuations, they assume there is almost ZERO risk in project. And this company failed to live upto the investor expectations.
2. This company is doing the same mistake once again - while they have been announcing new capacities left - right - centre; do they now have fuel tie-ups for all their projects. (I believe they don't have fuel supply surety for more than 1-2 projects). Aren't they doing the same mistake again? Before you announce a project, a management is expected to do all sorts of due-diligence to make sure the project comes on time. (Unfortunately declaring projects can get you market-cap; why to bother about fuel linkages today.)
3. As far as Reliance Power is concerned, where is the need to float this company when Reliance Energy is there. If at all Reliance Energy wants all power projects should come in one SPV; why is Reliance Energy not having 100% stake in this SPV. WHY ANIL AMBANI OWNS 50% of Reliance Power and just 50% stake is given to RELIANCE
ENERGY. ANIL AMBANI has very smartly increased his share in the growing power capacity of Reliance Energy to 75% (50% directly and 50% through his holding in Reliance Energy, which holds 50% of Reliance Power), by just paying US$ 125 mn. And now wants US$ 25-30 bn for Reliance Power.
4. Promoter contribution to Reliance Power is US$ 250 million for 100% stake. They want to offload 10% stake for US$ 2.5 bn (this would lead to biggest investment appreciation, 100 times) in a span of 5 months of formation of Reliance Power). With promoters contribution a capacity of just about 1000 MW can be set-up. Imagine the situation
- entire risk of projects is on minority share holders (after listing of Reliance Power IPO, the money that comes in would be used as equity contribution for upcoming projects); and ANIL would create personal wealth of US$ 17 - 20bn (Direct and indirect stake on Anil post listing would be ~ 67.5% in Reliance power).
5. If promoters are really serious about their business, they should have atleast contributed full equity for first 8-10 GW, commissioned these projects and then come to markets. With the small promoter contribution of US$ 125 mn, if they want to set up 25-30 GW, it is quite clear that entire risk is being shifted to those who contribute larger sum (which is going to be minority share holders post listing; as I heard it that 10% stake would be offloaded at US$
2.5 bn). Are you ready to put your money to face all the entire execution risk connected to projects and just to make ANIL richer. Well I won't.
I believe a couple of broking houses would try to justify the RELE stock price (might do NAV for its power projects that he plans to), might revise their target price upwards factoring in US$ 25 bn or US$ 30 bn value of Reliance Power etc, just because they can't afford to lose the IB deal from Anil Ambani group..
What should an independent analyst do???
(Independent analyst may not be able to say BUY on the stock on fundamental grounds; may not be able to say SELL as-well because of momentum in the stock. But can very well release a note saying we decide to drop coverage on this stock because I simply don't understand this company. It would be a nice way to say we don't subscribe to what's going on in Reliance Energy and Reliance Power. Believe me lot of level headed fund managers would appreciate it. In
London people liked our view.)
Or else let us just do a IB deals for them and earn big brokerage out
of it rather than just give trading calls on this stock
Stock is hitting lifetime highs as we are reading this................................
Reliance Power - the biggest IPO to hit the markets
Based on the upper limit of the price band, the company would raise Rs 11,700 crore with the sale of 260 millon shares in the public offer. This would be the biggest-ever IPO in India surpassing the public issue of realty giant DLF that raised about Rs 9,000 crore last year.
Best Regional Investors in India
Here is a funny question that came to find ...
Who do YOU think are the best community of investors in the country
Are they - Gujju bhais, the evergreen Mumbaikars or the Marwadis or the Mallus or Tams or those Software engineers in Karnataka who spend more time on ICICIDirect than at their work
Go ahead - leave a comment - tell us which community is the best and why - some funny stories or references would be nice :)
Don't be offensive, those comments will be rejected
(Comments will have to be manually approved - please leave a comment only once)
Subscribe to:
Posts (Atom)