ICICI Bank FPO - June 19 2007
India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Tuesday, June 19, 2007
China stocks rise to record highs again
China’s key stock index rose to a record, having taken less than two weeks to rebound from a rout that erased more than $400 billion (Rs16.4 trillion) of market value.
China Merchants Bank Co. and property developer China Vanke Ltd paced gains after policymakers held off from raising borrowing costs. Premier Wen Jiabao last week said monetary policy needs “moderate tightening,” after reports showed inflation is at a two-year high and money-supply growth exceeds the central bank’s target.
Sichuan Changhong Electric Co., the nation’s second biggest television-set maker, was one of the 10 stocks included in the CSI 300 Index to surge by the 10% daily limit after Microsoft Corp. agreed to buy a stake in the company.
The CSI 300 climbed 128.19, or 3.1%, to 4227.57 at the close, with about 90% of the shares included in the measure advancing. It has tripled in the past year, the biggest gain among 90 global benchmarks tracked by Bloomberg.
“Investors keep buying shares as a rumoured clampdown involving measures such as interest-rate increases failed to materialize over the weekend,” said Chen Shide, who manages the equivalent of $212 million at GF Fund Management Co. in Guangzhou. “It can’t be ruled out that the government will still take action.”
The CSI 300, which tracks yuan-denominated A-shares listed on China’s two exchanges, plunged as much as 22% from 29 May’s record close of 4168.29 after the government tripled the tax on securities trades. It took about a month to recoup a single-day loss of 9.2% on 27 February, the biggest slide since the gauge was introduced in April 2005.
Investor interest has waned little since stamp duty was tripled to 0.3%. About 250,000 new securities accounts were opened daily last week, compared with the quarter’s average of some 300,000, official figures show.
Merchants Bank, which has the biggest weighting in the CSI 300, jumped 1.78 yuan, or 8%, to 23.98. Industrial & Commercial Bank of China Ltd, the nation’s No.1 lender, rose 0.09 yuan, or 1.8%, to 5.24. Bank of China Ltd, the second biggest, added 0.07 yuan, or 1.3%, to 5.36.
China Vanke Ltd, the country’s largest listed developer, climbed 0.87 yuan, or 4.6%, to 19.97. Gemdale Corp., a Chinese developer that partnered with ING Groep NV, jumped 3.28 yuan, or 10%, to 36.09. Shanghai Lujiazui Finance & Trade Zone Development Co., a developer in Shanghai’s financial district, gained 1.08 yuan, or 3.7%, to 30.09.
China’s bank regulator has found that eight banks including Bank of China have illegally lent money to companies that used the funds to buy stocks, Capital Week magazine reported. The regulator retracted a 5 June press release on its findings amid concern the news will trigger a market slump that causes borrowers to default on their loans, it said.
China’s securities regulator summoned managers and chief investment officers of 57 mutual funds last week, telling them to refrain from speculating on market rumours for short-term gains, China Business News reported on Monday. Sichuan Changhong Electric jumped by the daily limit after the company announced Microsoft Corp. has agreed to buy 15 million new shares for 94 million yuan ($12 million), or 6.27 yuan each. The shares rose 0.99 yuan to 10.92.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, gained 2.9% to 4253.35. The Shenzhen Composite Index, which covers the smaller one, rose 2.8% to 1257.75.
“The government didn’t raise interest rates over the weekend and that’s bolstering sentiment,” said Yao Maogong, head trader at Shanghai Securities Co.
The People’s Bank of China has raised interest rates twice this year to rein in industrial expansion and tame inflation, with both announcements made over weekends.
It has also ordered commercial banks five times to set aside more money as reserves to curb lending.
Even so, bank savings rates trail inflation, helping steer funds in to stocks.
Household yuan deposits fell by 278.4 billion yuan in May, after sliding in April for the first time since February 2003. Commercial banks’ deposit rates are capped at the central bank’s one-year deposit rate of 3.06 %, less than the 3.4% inflation rate.
Merrill Lynch - Larsen and Tourbo, Panacea Biotec
Merrill Lynch on L&T
We came back reassured of our bullish stance on L&T, with the management reiterating its strong growth guidance & the possibility of further margin expansion at our Asia conference. Besides, the potential listing of its L&T IT in 2008 is on track & new projects addition at L&T Infra subs., ensure value creation. Buy
Price target of 2150
Merrill Lynch on Panacea Biotec
Panacea’s 4Q PAT of Rs234mn (104% growth YoY) was 27% ahead of MLe, buoyed by strong 66% YoY growth in revenues (Rs2.26bn). As in the previous quarters, both vaccines and domestic business registered strong growth of 74% and 37% YoY, respectively. Despite a sharp 250% increase in personnel expense (YoY) and 60% increase in R&D spend, EBITDA margin for 4Q remained high at 19%. Reiterate Buy with PO of Rs513/share.
Citigroup - Daily Technicals
Citigroup in their technical report
Nifty — The index opened on a positive note, posting an intra-day high of 4208 in morning trade. It was unable to hold onto opening session gains. The index exhibited intra-day volatility and closed down 24 points.
Resistance — The index made a matching high at 4209 (past two trading session highs were around 4209) and the 20dma is at 4217. Stiff intra-day resistance should be expected in the 4209-4217 band [dma=daily simple moving average].
Support — Support levels are around 4121 (50dma) and 4100 (low of 12 June 07). Intra-day Nifty can decline towards the 4100 levels.
Conclusion — We expect intra-day declines towards 4120-4100, while an intra-day bounce will face stiff resistance around 4209.
No retail worries seen for ICICI offer
ICICI Bank need not worry about the retail subscription of its Rs 10,062-crore domestic issue. All that Indian investors have to do is to invest only around Rs 3,000 crore to enable the bank to issue the rest of the shares to foreign investors, without breaching the 74% foreign investment limit post-issue.
In addition to the domestic issue, the bank is mobilising funds through the American depository receipt route, which will take the total mop-up to Rs 20,124 crore.
Overseas investors can hold up to 74% in a private sector bank. In case of ICICI Bank, foreign investors currently hold 71.13%. In the local market, ICICI Bank will raise Rs 8,750 crore. Around Rs 4,375 crore have been set aside for retail investors and non-institutional investors.
The issue also has a greenshoe option of Rs 1,312.5 crore. However, bankers are betting on domestic investors picking up at least around Rs 5,000 crore in the issue, primarily on the back of strong institution and corporate interest. This would give the bank enough leeway for foreign investors post issue.
Even in the last issue LIC and SBI were among the biggest Indian investors. This time around too, among the state-owned corporations LIC, SBI, and GIC are likely to subscribe to the issue. Some of the other bigger public sector banks are also expected to subscribe the issue. Currently, LIC holds a 7.63% stake, while GIC and other general insurance companies have another 3.86% stake. Domestic retail investors hold 6.55%.
Few corporate bigwigs are said to have shown commitment to the issue, including a large south Mumbai-based company. Currently, Bajaj Auto holds a 4.06% stake in the bank. Incidentally, Bajaj has increased its stake in the bank. As on June 2005, Bajaj’s stake was 3.12% while LIC’s had 9.86%.
The ICICI Bank scrip rose marginally on the BSE to close at Rs 917.85. Retail investors have been shying away from some of the bigger issues in recent times. In case of DLF too, retail investors had subscribed 0.97% of the issue.
The bank has offered sweeteners to retail investors including a discount of Rs 50 per share, options of partly paid-up shares and 5% reservations for existing shareholders. Under the partly paid share option, a retail investor will have to pay Rs 250 as on application and Rs 250 as on allotment. These shares will be also listed on the exchanges. This option is said to be attracting retail investors.
EXCLUSIVE - Equibrain Report - June 19 2007
EXCLUSIVE - Equibrain Report - June 19 2007
You can customize the above report for your own stocks. Contact Aditya (details inside in the PDF) who can do this for you for any stocks you want
Monday, June 18, 2007
Weekly Cherries
BEML, Uptrend, BUY, Support @ 1062-1000, Resistance @ 1160-1196
Glaxo, Uptrend, BUY, Support @ 1282-1253, Resistance @ 1334-1356
L&T, Uptrend, BUY, Support @ 1885-1823, Resistance @ 1988-2028
Apar Industries, Uptrend, BUY, Support @ 157-153, Resistance @ 167-172
PSL, Uptrend, BUY, Support @ 242-228 Resistance @ 270-284
Finolex Cables, Uptrend BUY, Support @ 89-86, Resistance @ 94-95
Market Close: Gains wiped off at the end
Market opened with significant gap up on the back of strong cues from Asian markets. After the morning session market turned to be bit lacklustre and ranged. There seems to be liquidity outflow from the system given the major IPO from ICICI Bank. However indices could hold on the gains and slipped into red during mid session. This sell off was led by selling in IT, Pharma, Auto and Consumer durable stocks. However, Banking, Cap goods and Oil & Gas indices managed to hold gains. Midcaps could not sustain and closed flat while the smallcap ended in red. Most of the Asia markets ended in green except Europe.
Sensex traded down by 83 points at 14080.14. Weighing on the Sensex were losses in Ranbaxy (359.25,-4 percent), Hero Honda (653.7,-4 percent), TISCO (588.95,-2 percent), HDFC Bk (1087.9,-2 percent) and TCS (1166.6,-2 percent). Losses were restricted by gains in ICICI Bk (917.85,+1 percent), ONGC (889.5,+1 percent), Hindalco (162.1,+0 percent), ACC (823.6,+0 percent) and ITC (152.9,+0 percent)
Software counter was mixed. Market reported that Cranes Software (Software products maker) is close to buy out the Bangalore-based anti-virus software maker Proland Software. The proprietary firm Proland Software has been in the business of designing, developing and supporting anti-virus software products for over 15 years. Proland has anti-virus offerings on almost every platform, namely Windows Vista, Windows XP, Windows 98, Windows 2000 and NetWare among others. Sold under the Protector Plus brand, Proland's anti-virus software products have users in over 100 countries. Proland derives about 65% of its revenues form the US market, while Europe was its second largest market. The stock runs up on the news which is inline with the business. Cranes Software ended up by 4.5% while its pears like Hexaware Technologies was up 2%.
It was a good listing day for Plastic packaging maker Glory Polyfilms which started the day at its issue price of Rs 48 and touched a high of Rs 84 in the trade. Strong support from buyers helped the stock to hold above Rs 60 till the end despite sluggish markets in the late mid trade. Glory Polyfilms expect FY09 topline at Rs 150 crore. They also expect operating profit margin and net profit margin at 20-22% and 10%, respectively. The company entered capital markets with around Rs40crs. The issue will be used to part finance the expansion of multlayer film, printing capacity and lamination film. Money will also be used for meeting the working capital margin requirements. The stock ended the day down by 2.5% on account of heavy selling pressure.
Technically Speaking: Market drifted to lower levels as selling pressure eroded the gains. Sensex touched intraday high of 14283 and days low of 14057. Resistance lies at 14360 levels and Support lies at 13860 levels. Overall breadth was in favor of Decliners, where the Declines were 1323 against 1237 Advancers. Market is expected to be ranged for the week.
Subscribe to:
Posts (Atom)