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Monday, September 13, 2010
Divi's Labs
Investors with a long-term perspective can consider accumulating the stock of Divi's Laboratories, an established player in the global pharmaceutical outsourcing market. Divi has well-established working relationships with a number of the top 20 global innovator firms. With global pharma companies beginning to restock inventories, it will only be a matter of time before it reflects in the company's financial performance.
Grey Market Premiums - Eros International, Ashok Buildcon, CTV Network
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Indosolar Ltd. | 29 to 32 | 2.50 to 3 |
| Tirupati Inks (FPO) | 41 to 43 | -- |
| Eros International | -- | 29 to 30 |
| Microsec Fin | 110 to 120 (Approx) | 29 to 30 |
| CTV Network | 100 to 110 (Approx) | 17 to 18 |
| Ashok Buildcon | 280 to 300 (Approx) | 47 to 48 |
| VA Tech Wabag | 1200 to 1300 (Approx) | 260 to 265 |
Market may extend gains on robust industrial production growth
Data showing robust industrial prodcution growth in July 2010, sustained buying by foreign funds and firm Asian stocks will help domestic bourses score further gains. Indian stocks are currently hovering at their highest level in nearly 32 months. Trading of the S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 41 points at the opening bell.
Daily News Roundup - Sep 13 2010
The government expects to complete the ONGC and IOC divestments in this financial year and to raise up to Rs190bn from the process. (BS)
Dr Reddy's plans to spend Rs16bn for capacity expansion in two years. (BS)
HCL Tech bags 3-year IT infra deal from New Zealand government. (ET)
Weekly: Sensex, Nifty gains 3% each
It was the short and sweet week for the bulls as the Nifty managed to scale up 2.9% and Sensex advanced by 3.2% during the week. Indian benchmark indices managed to outperform the world markets led by a rally seen in the large cap stocks. Better-than-expected US monthly jobs report acted as a sentiment booster for Dalal Street.
Rejoice on the street!
Too few rejoice at a friend's good fortune. - Aeschylus.
If trend is the friend, then bulls may look at some more rejoicing on the street. Festive fervour is picking up in India and the bulls appear in high spirits going by last week’s breakout above 5600.
Markets set for a strong opening
Headlines for the day:
Land prices up 50 times in 10 years
3G operators may come under scrutiny of CAG
Vedanta set to source bauxite from Gujarat
Copper weakens
Prices register weekly losses for first time in four weeks
Copper prices registered weekly losses for the first time in four weeks on Friday, 10 September at Comex. Prices dropped on reports that Chinese regulators are investigating positions in rubber
futures that spurred speculation that some traders may be forced to sell commodities.
Orient Ceramics
The revival in demand for tiles with pick-up in real-estate activities, the company's growing retail presence and modest valuations are reasons for investing in the stock of Orient Ceramics and Industries.
IDBI Bank
Fresh investments with a two-to-three year time horizon can be considered in the stock of IDBI Bank, the youngest of the public sector banks. The bank focuses mainly on infrastructure lending, a segment expected to contribute heavily to the incremental credit growth of the banking system, going forward.
Weekly Recommendations - Sep 13 2010
Axis Bank
* Current market price (CMP): Rs 1,380/ target price (TP): Rs 1,688/ Upside: 22%
* Rationale: The Bank has expanded its network at 33% CAGR since FY2005, doubling its CASA market share to 4.0% by FY2010 (20bp yoy increase in FY2010). Angel Broking expects the bank to continue market share gains of 30-50bp every year driven by strong branch expansion. Fee income contribution across a spectrum of services has been a meaningful 2% of assets (almost twice the level in PSBs) over FY2007-10. The bank`s high credit growth was backed by strong low-cost deposit growth, rather than chasing risky loans using high-cost deposits. Moreover, with the improving economic outlook and reducing corporate leverage, NPA concerns are receding and could provide upside to our earnings estimates (which still factor NPA provisions at 0.5% of assets in FY2011E vs. an average of 0.4% over FY2006-10). The stock is trading at attractive valuations of 2.6x FY2012E P/ABV. Hence, it maintains a `Buy` on the stock with a target price of Rs1,688 (at 3.2x FY2012E P/ABV).
US stocks stay steady for the week
Energy sector and Chinese data impart good momentum to US stocks
US stocks ended almost near the unchanged mark by registering little gains for the week that ended on Friday, 10 September 2010. The holiday-shortened week did not have much of corporate news and economic reports. The week ended on a positive note following a better-than-expected initial claims data and higher crude oil prices. Banks were in focus throughout the week.
Sunday, September 12, 2010
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