Monday, January 14, 2008
ICICI to cut home loan rates
Lower rates will be applicable to new as well as existing floating-rate clients.
Home loan consumers in India may get some good news in the months to come with country’s biggest private lender ICICI Bank saying it could cut interest rates in the first quarter of the next financial year.
Lower rates would not be only for new customers, but existing floating-rate clients also, ICICI Bank’s Managing Director and CEO K V Kamath said.
“We expect the (interest) rates to drop in the first quarter. After that we will see if we can write down the rates (for our customers),” Kamath said when asked if ICICI Bank would cut housing loan rates.
Syndicate Bank - Jan 14 2008
We recommend a buy in Syndicate Bank. From the weekly chart of Syndicate Bank we note that it has been on a long-term uptrend since April 2007 low of Rs 57. From the daily chart, we note that the stock’s uptrend began to accelerate in October 2007 and has been on a medium-term uptrend since then. However, after marking an all-time high of Rs 131 on January 2, the stock began to decline and is currently finding support at the 21-day moving average line as well as the uptrend line at around Rs 115. The weekly momentum indicator is featuring in the bullish region. The weekly moving average convergence divergence lines are steadily rising in the positive territory, indicating bullishness. The immediate support for the stock is at Rs 105 and the next support is at Rs 95 levels. Considering the intactness of the medium-term up trendline, we expect the stock to resume its uptrend and move up further to the immediate resistance level of Rs 131 level in the short-term. The short-term investors can buy the stock while keeping the stop-loss at Rs 107 level.
Via Businessline
US Market in search of a solid footing
Indices end lower for the third consecutive week as recessionary signals pour in
It was another consecutive week of losses for the US Market for the week ending on Friday, 11 January, 2008. Market witnessed extreme volatile trading during the week in pursuit of some solid footing. It was the third weekly loss for the indices. The “recession” word once again cropped up in everybody’s mind and credit market continued to create trouble. Gold prices struck new highs almost on all the days of the week.
Pessimistic statements from AT&T CEO in between the week brought economic concerns back to the forefront. Capital One reduced its profit outlook due to increased loan delinquencies. Countrywide Finance, the country’s largest mortgage lender firm, was in the news for the whole week. Initially there was news of bankruptcy that the firm might be facing. Then on Friday, 11 January, 2008, Bank of America announced a $4 billion buyout of the firm.
The Dow Jones Industrial Average lost 195 points for the week. Tech - heavy Nasdaq lost 65 points. S&P 500 lost 10.6 points. Percentage wise, once again, Nasdaq suffered the maximum losses.
On Monday, 7 January, 2008, stocks ended mixed with Dow registering nominal gains but Nasdaq once again ending in the red. IBM weighed heavily on the technology stocks after UBS Securities downgraded the stock citing that the company’s hardware and services sales could be pressured because IBM has the largest financial services exposure in the sector.
On Tuesday, 8 January, 2008, AT&T's CEO reportedly said the company is disconnecting more home phone and broadband Internet customers for failing to pay their bills. After staying up by 100 points earlier in the day, the Dow Jones industrial Average finally ended the day with a loss of 238.3 points and Nasdaq Composite Index, finished lower by 59 points.
With the help of Financial and Technology stocks, US stock market made a sudden but modest comeback on Wednesday, 09 January, 2008 and all the three indices closed higher simultaneously for the first time in FY 2008.
Dow Component DuPont raised its earnings guidance for 2007 and 2008 and this gave stocks a good boost. The chemical company revised its forecast due to strong growth from its agricultural and nutrition business segment and strong demand in all segments in emerging markets, which more than offset a slower U.S. economy.
On Friday, 11 January, 2008, stocks resumed their slide as more problems in the financial sector and ongoing credit market troubles weighed on the market. American Express increased its loan loss reserves due to an increase in defaults and slower card member spending. The company’s guidance was lowered quite below expectations and the news came just a day after Capital One lowered its guidance.
On the economic front, November pending home sales reportedly fell 2.6%, compared to the expected decline of 0.7%. Initial jobless claims for the week ended 5 January unexpectedly fell to 322,000 from 337,000 the prior week. December same-store retail sales disappointed, and many retailers lowered earnings guidance. Wal-Mart was an exception which topped its expectations.
On the earnings front, Dow component Alcoa reported stronger than expected earnings.
Among other major events of the week, President Bush and Federal reserve Chairman, Ben Bernanke spoke about the economy. President Bush noted that the housing slump and high energy prices are among today's challenges. He also said he is determined to make sure taxes stay low. His comments did not have any dramatic effects on the stock market that day.
Ben Bernanke said that the Fed is not currently forecasting a recession, and the expectation is for sluggish growth but he did note the downside risks to the economy. He clearly stated that necessary steps would be taken to shave off a recession clearly hinting another interest rate cut at the month’s end.
Executive Summary
For the week, indices registered substantial losses for the third consecutive week. DJIx and S&P 500 closed down by 1.5% and 0.8% respectively. Technology sector was the most affected and Nasdaq went down by 2.6%.
Pessimistic statements from AT&T CEO in between the week brought economic concerns back to the forefront. Capital One and American Express reduced their profit outlook due to increased loan delinquencies. Bank of America ended up buying the much troubled Countrywide Financial in $4 billion, all stock buyout.
For the year, Dow, Nasdaq and S&P 500 are down by 5%, 8% and 4.5% respectively. A downgrade of IBM by UBS weighed heavily on Nasdaq for the week.
Crude plummets
Prices drop after hitting record last week as recession talks crop up surrounding US and Japan
Crude prices ended higher in just one of the days of the week which ended on Friday, 11 January, 200. All other days, prices slipped. Crude-oil future prices for sweet light crude for February delivery touched the $100/barrel mark for the first ever time last week dropped this week on demand concerns. Prices also dropped as EIA reported increase in fuel stockpiles.
Traders speculated that recession might hit US and Japan, which together account for about one-third of world’s total oil consumption. The U.S., China and Japan, the three biggest oil consumers, are responsible for almost 40% of global demand.
For the week ending Friday, 11 January, 2008 crude-oil futures for light sweet crude for February delivery closed at $92.69/barrel (lower by $5.22/barrel or 5.3%) on the New York Mercantile Exchange. Prices are almost 79% higher than the year before.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
As per the weekly inventory report by the Energy Department, U.S. crude inventories dropped by 6.8 million barrels to 282.8 million barrels for the week ending 4 January, 2008, the lowest in more than three years.
The report also said that gasoline supplies rose by 5.3 million barrels in the latest week, and distillate supplies, which include heating oil and diesel, grew by 1.5 million barrels. U.S. crude oil imports averaged 9.8 million barrels per day last week, down 203,000 barrels per day from the previous week. U.S. refineries operated at 91.3% of their capacity, the highest in more than four weeks.
EIA expects crude oil prices to average $94 per barrel in January. The Western Texas Intermediate crude oil, the underlying crude for Nymex crude-oil futures, is expected to average about $87 per barrel in 2008 and $82 in 2009. WTI prices averaged $72 per barrel in 2007.
Sunday, January 13, 2008
Reliance Power - 2 days to go!
Reliance Power - To Apply or Not ?
Yes ! Anil bhai's dream! 777 (66.9%)
No! Scam !! 385 (33.1%)
Votes so far: 1162
See Older Trends
And the winners are ...
We asked you to give your picks for 2008
Out of the over 60 recommendations by you! Here are we think are the best justified picks
Recommendations of Lowkey
1) PSTL: The company is a value buy on FY09E EPS basis(@Rs 530) and the growth story gives strength to that. It is the largest Multiplex chain in the world and OPM are comparable to other multiplxes even though it operates mainly in Tier1 and Tier2 cities simply because of the digital transmission technology. The overall structure of the company involving dimple advertising, the digital transmission, international footprint, production, distribution and Food malls only strengthen the strong growth being seen in the bottom line.
The current EV of PSTL is less than its US, Malaysia and Singapore subsidiaries.
2) Williamson Magor and Company Ltd:
The group has other listed companies like Eveready and Williamson Tea Assam Ltd(which is the largest tea estate in India). The company has just concluded a tie up with D1 Oils. The company is involved with Jatropha plantation and bio fuel production. The idea of securing loans to the farmer and supplying them Jatropha seeds and then buying them at a gauranteed price means that even if the margin is considered at Re 1 per Litre, the bottom line should increase by 20x times in the next 3-4 years. The promoters are good and business plan and excution more transparent than IKF Technologies(the other listed company in this space). The company has a big promoter holding (67%) unline IKF(4%), however, this reduces the free float of the stock and so the price will remain range bound until the stock is split or restructured. Keep a lookout for Crude prices and liquidate your holdings in this company if crude hits $60 per barrel since then price of bio diesel becomes unviable.
3) Adani Enterprises: should show a steady growth over a period of next two years. The group has good plans and management has shown strong execution.
Recommendations of Sridhar Kondoji
My picks for the year 2008 and for next few years are
1) Dish and WWIL (wire & wireless)
2) Rajesh exports
3) IGL (indraprastha gas)
4) Educomp
1) Dish and WWIL: I am assuming that households will continue to spend money on home entertainment and can't cut down on expenses even if India enters slow growth era. There is still huge subscriber base to go after. Even though DISH and WWIL belong to same parent and are competing with each other i see room for both these companies to survive and leave a possibility of merger going ahead for the benefit of shareholders and bring value to their investments.
2) Rajesh exports: This is one of my favorite pick. Being a goldsmith, i know how time consuming the process of buying gold and making ornaments. Going forward consumers will be reluctant to wait that long to wear the ornamnets and just head to jewellery retail outlets to buy their ornaments. Whether Gold price goes up or down, the margins of retail outlets like Rajesh exports will be maintained. Also with a large and innovative design gallery, they will continue to lure customers away from traditional jewellers like our family.
3) IGL (indraprastha gas)
I like their PNG and CNG business. However i see huge money in PNG segment going forward for the convenience it brings to consumers who are used to cylinders. They are leaders in this segment and have first mover advantage and they are set up to take advantage of this position.
4) Educomp: More and More schools will adopt Educomp and they will reap the benefits of their hardwork they put in all these years. They are moving in the right direction. This will be a true multibagger in next few years.
Weekly Technical Analysis
The markets ended on a divergent note last week. The BSE Sensex gained 140 points, while the NSE Nifty shed 74 points.
The Sensex, which surpassed the 21,000-mark, found it difficult to sustain above the mark owing to profit taking. From a low of 20,438, the index rallied to a fresh all-time intra-day high of 21,207 and finally ended the week at 20,827.
The Nifty touched a fresh all-time high of 6,357 and then tumbled to a low of 6113, before settling with a loss of 74 points at 6,200.
The short-term trend seems confusing. The Sensex may see 21,300 on advances, while it may drop to 20,350 levels in case of weakness. The on-going results season and overseas cues are some of the factors that would add to the market volatility.
There is firm support for the Sensex on the monthly chart around 19,300 to 19,700. The broad range for this quarter is between 18,200 and 22,350, while 19,000 and 21,570 would be significant support and resistance points.
The Nifty, which has trailed the Sensex so far this year, is likely to find strong support around 5,950 in case of a further downmove. On the upside, it may target 6,500 by the month-end. The broad range for the index is 5,400 and 6,870.
The index is well above its 20-day moving average, which is 6,073, and the 50-day moving average which is 5,915. The 9-day RSI is also comfortably placed at 59.
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