SBI November 2009 futures at discount

Turnover declines

Nifty November 2009 futures were at 4797, near spot closing of 4,796.15. Turnover in NSE's futures & options (F&O) segment was Rs 77,394.87 crore, sharply lower than Rs 96,498.50 crore on Thursday, 5 November 2009.

State Bank of India (SBI) November 2009 futures were at discount at 2186 compared to the spot closing of 2202.

Tata Steel November 2009 futures were near spot price at 500 compared to the spot closing of 500.50.

Housing Development & Infrastructure November 2009 futures were near spot price at 363 compared to the spot closing of 363.10.

In the cash market, the S&P CNX Nifty rose 30.60 points or 0.64% at 4,796.15.

Weekly Support and Resistance Levels

October, 2009
COMPANY NAME	S3	S2	S1	CLOSING PRICE	R1	R2	R3
ABB	638	675	707	740	776	813	845
ACC	615	650	683	715	750	785	818
Ambuja Cem	74	77	81	85	88	91	95
BHEL	1,949	2,046	2,123	2,200	2,297	2,394	2,471
BPCL	473	486	498	510	522	535	547
Bharti	246	274	292	309	337	366	383
Cairn	237	250	259	267	281	294	302
Cipla	245	261	276	290	306	322	337
DLF	284	320	344	367	404	440	463
Gail	302	329	344	360	386	413	428
Grasim	2,019	2,065	2,123	2,181	2,227	2,273	2,331
HCL Tech	245	267	283	298	321	343	359
HDFC Bank	1,524	1,568	1,596	1,625	1,669	1,712	1,741
Hero Honda	1,336	1,402	1,464	1,526	1,591	1,657	1,719
Hindalco	89	103	112	120	134	148	157
HUL	254	259	267	274	280	286	293
HDFC	2,439	2,540	2,601	2,661	2,762	2,862	2,923
ICICI Bank	706	760	794	828	883	937	971
Idea	42	45	48	51	54	57	60
Infosys	2,016	2,089	2,146	2,203	2,276	2,349	2,406
ITC	225	232	241	251	258	266	275
L&T	1,395	1,465	1,510	1,555	1,625	1,694	1,739
M&M	795	863	905	947	1,015	1,083	1,125
Maruti	1,282	1,348	1,405	1,462	1,528	1,594	1,651
Nalco	317	340	354	368	391	413	427
NTPC	191	198	203	209	216	223	229
ONGC	1,057	1,096	1,120	1,144	1,183	1,221	1,245
Powergrid	94	99	102	105	110	115	118
PNB	771	815	844	873	918	962	991
Ranbaxy	342	370	386	402	431	459	475
Rcom	144	157	166	174	187	200	208
Reliance	1,676	1,785	1,848	1,912	2,021	2,130	2,194
Reliance Infra	831	926	998	1,070	1,165	1,260	1,332
Reiance Power	121	130	136	142	150	158	164
Satyam	91	95	99	103	107	112	116
Siemens	445	475	495	515	544	573	593
SBI	1,931	2,036	2,100	2,163	2,268	2,374	2,437
SAIL	140	150	157	163	173	182	189
Sterlite	631	698	737	777	843	910	949
Sunpharma	1,281	1,325	1,358	1,391	1,436	1,480	1,513
Suzlon	43	52	57	63	72	81	86
Tata Com.	283	311	338	364	393	421	448
TCS	568	587	603	620	638	657	673
Tata Motors	502	525	547	568	591	615	636
Tata Power	1,104	1,151	1,225	1,299	1,345	1,392	1,466
Tata Steel	379	426	453	480	527	574	601
Unitech	63	72	78	83	92	102	107
Wipro	541	562	578	595	615	635	652
Zee	200	216	227	239	255	271	282
Zee	224	234	243	253	263	273	282

Warren Buffett buys Burlington Northern

Warren Buffett’s Berkshire Hathaway Inc. said it is planning to buy railroad Burlington Northern Santa Fe Corp. The purchase, the largest ever for Berkshire, will cost the company US$26bn, or US$100 a share in cash and stock, for the 77.4% of the railroad it doesn’t already own. The deal is valued at US$44bn. Fitch Ratings said that it may downgrade its ratings on Berkshire Hathaway and its insurance subsidiaries on the proposed deal to acquire the shares of Burlington Northern Santa Fe Corp. Berkshire does not already own. Fitch said that it is concerned how the transaction will affect Berkshire's asset profile and capitalization.

Fed leaves rates steady...sees weak US recovery

The Federal Reserve indicated yet again that it is no hurry to raise interest rates, saying that the US economy remains weak even though the worst recession in decades appears to be winding down. The US central bank reiterated its long-standing stance to keep interest rates exceptionally low for an extended period because it expects only a weak recovery. As anticipated, the Fed policymakers maintained the target range for the federal funds rate at 0 to 0.25%. "Economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations are likely to warrant exceptionally low levels of the federal funds rate for an extended period," the FOMC said in a statement.

Economic activity has continued to pick up and conditions in financial markets were roughly unchanged, the FOMC said. It added further that activity in the housing sector has increased over recent months. "Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit," the FOMC said.

Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales, the FOMC said. With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the FOMC expects inflation to remain subdued for some time.

GVK Power buys 12% in Bangalore Intnl Airport

GVK Power & Infrastructure announced that its Board of Directors approved the acquisition of 12% equity share capital of Bangalore International Airport Ltd. (BIAL) at a total cost of Rs4.85bn. GVK Airport Developers Pvt. Ltd. (GVKADPL) will purchase 46.1mn shares from Flughafen Zuerich AG. Zurich Airport is the original co-promoter of the new Bengaluru International Airport Ltd. (BIAL). The Swiss company will keep 5% stake in BIAL and continue to operate the 17-month-old airport. BIAL, built at nearly Rs25bn, is promoted by Siemens Project Ventures, Zurich Airport, L&T as 40:17:17 private sector partners; the Airports Authority of India and the Karnataka-owned KSIIDC hold 13% each. According to reports, the existing partners in BIAL had the first right of refusal for Zurich Airport’s stake. GVKADPL is a wholly owned subsidiary of GVK Power & Infrastructure Ltd (GVKPIL). The acquisition will be completed upon obtaining necessary consents. GVKPIL also entered into a Strategic Alliance Agreement (SAA) with Unique Airports Worldwide AG (Zurich Airport) to collaborate for new airport projects in Indian sub-continent.

TCS bags contract from Cardiff City Council

UK's Cardiff Council signed a 15 year deal with Tata Consultancy Services (TCS), reportedly worth £150mn (Rs11.64bn). Under the deal, TCS will work alongside Cardiff’s own IT department. Cardiff Council said none of its staff will be transferred to TCS. The deal will support Cardiff’s transformational agenda in which it is attempting to improve shared services across public sector bodies in the city, alongside improvements in citizen services. It beat IBM and BT to the contract. The supplier will integrate different software platforms used by the council, including SAP, as well as focusing on workflow, automating business processes, and improving knowledge management and business intelligence. Cardiff is the first council to work with TCS, which has work in central government including a contract with the Child Maintenance and Enforcement Commission.

Erratic monsoon, floods to hit Kharif production

Kharif foodgrains output, including rice, coarse cereals and pulses, is expected to be lower by 21.07mn tons for 2009-10 as against the final estimates for the previous year. According to reports, the decline has been attributed to drought in 12 states and floods in some others. The first advance estimates put the kharif foodgrains estimates for 2009-10 at 96.63mn tons as against 117.70mn tons in the first advance estimates of 2008-09. According to the first advanced estimates released by the Government, the country's rice output is expected to decline by 15.13mn tons this marketing season from 84.58mn tons in the kharif season last year. Similarly, production of coarse cereals is projected to decline to 22.76mn tons this kharif season from 28.34mn tons a year earlier. Pulses output is estimated to fall to 4.42mn tons from 4.78mn tons during the same period last year. Oilseeds production is likely to decline to 15.23mn tons from 17.88mn tons. Agriculture Minister, Sharad Pawar, said that he expects rabi foodgrains output to be 8.5mn tons higher than last year’s 116.18mn tons.

India's Sept exports down 13.8% YoY exports down

India's merchandise exports were down -13.8% at US$13.61bn in September 2009 while imports fell 31.3% to US$21.38bn from the same period last year, the Commerce Ministry said on Tuesday. As a result, the trade gap for the month under review has come down to US$7.77bn from US$15.3bn in September 2008. Oil imports were down 33.5% at US$6.34bn in September 2009 while non-oil imports slumped 30.4% to US$15.03bn. In rupee terms, exports were down 8.4% in September 2009 while imports slid 27% from the same month a year earlier.

Cumulatively (April-September 2009-10), exports fell by 28.5% to US$77.86bn while imports on the same basis were down 32.7% to US$124.58bn, the Commerce Ministry data revealed today. The trade deficit for the first six months of FY10 shrunk to US$46.73bn versus US$76.10bn in the year-ago period. Oil imports during the first half of FY10 were down 45% at US$34.81bn while non-oil imports during the same period were down 26.2% to US$89.77bn.

Food inflation spikes to 13.39%: Govt

Food prices continue to climb in India, according to the latest data released by the Government. For the week ended Oct. 24, the annual inflation, calculated on a point-to-point basis, stood at 13.39% as against 12.85% in the previous week, while the same for the Primary Articles group inched up to 8.94% from 8.67%. Inflation for the Fuel & Power index was at (-)6.2%, unchanged from the week ended Oct. 17. The weekly release of Wholesale Price Index (WPI) will henceforth cover only the Primary Articles and commodities in the broad group "Fuel, Power, Light & Lubricants". Monthly WPI covering all commodities will be released for the month of October 2009 next week on November 12.

Roubini and Rogers spar on asset bubble issue

A war of words erupted between New York University economist Nouriel Roubini and commodities bull Jim Rogers on the issue of whether bubbles are building in asset classes like emerging market equities and gold. Emerging market stocks or commodities have rallied too far, too fast and the global economy will experience an anemic recovery rather than the hoped-for V-shaped recovery, Roubini said. Investors worldwide are fueling huge bubbles that may spark another financial crisis by borrowing dollars in the mother of all carry trades, Roubini said. A forecast by billionaire investor Rogers that gold will double to at least US$2,000 an ounce is utter nonsense, Roubini said. There is no inflation or near-depression to drive gold prices that high, he said at the Inside Commodities Conference in New York. "Maybe it will reach US$1,100 or so but US$1,500 or US$2,000 is nonsense," Roubini said.

But, Rogers, the investor who predicted the start of the commodities rally in 1999, said that Roubini is wrong about the threat of bubbles in gold and emerging-market stocks. "What bubble?" Rogers said. "It’s clear Mr. Roubini hasn’t done his homework, yet again." Many commodities are still down from record highs and equity markets are not on the brink of collapse, Rogers, chairman of Singapore-based Rogers Holdings, countered Roubini. Gold rose to a record US$1,098.50 in New York on speculation that central banks and investors will buy more of the precious metal to hedge against a declining dollar. Gold, up 24% this year, has outperformed US stocks and bonds.

Separately, Arnab Das of Roubini Global Economics said that emerging markets are poised to extend their biggest rally in a decade as investors borrow dollars to buy stocks, bonds and currencies in the world’s fastest growing economies. Richard C. Kang, chief investment officer with Emerging Global Advisors LLC, said that Gold will climb to US$1,350 an ounce and oil will top US$100 a barrel in the next six months, driven by a "herd mentality" fueling an investment boom.

Asia-Pacific must invest up to US$9.7 trillion by 2030 to meet energy needs: ADB

The Energy Outlook for Asia and the Pacific projects regional energy demand to grow 2.4% every year between 2005 and 2030, outpacing the world average of 1.5%.

The Asia and Pacific region must invest between US$7 trillion and US$9.7 trillion in the energy sector from 2005 to 2030 to meet the rapidly growing demand for energy in the region, according to a new report released by the Asian Development Bank (ADB).

The Energy Outlook for Asia and the Pacific projects regional energy demand to grow 2.4% every year between 2005 and 2030, outpacing the world average of 1.5%.

Nearly 80% of the region’s energy needs in 2030 would have to be met by fossil fuels – coal, oil and natural gas – and this will drive the growth in carbon dioxide emissions, the report warned. Net imports of oil are projected to increase substantially, nearly doubling the 2005 level by 2030.

The report is jointly published by ADB and the Asia-Pacific Economic Cooperation. It was launched together with another report, Energy Statistics in Asia andthe Pacific (1990-2006), during the Pacific Energy Summit. The two studies were undertaken by the Asia Pacific Energy Research Centre of The Institute of Energy Economics of Japan.

During the launch, ADB Vice-President Lawrence Greenwood called on all stakeholders to seek a low-carbon path to meet growing energy demand in a socially, economically and environmentally sustainable way.

"Cooperation among the economies is needed to enhance energy security and sustainable development in the region," Mr. Greenwood said. "This can be done through sharing policy information, facilitating energy trade and conducting joint energy projects."

The Energy Statistics report found that the region consumed 34% of the world's total primary energy supply in 2006. But the per capita electricity generation of 1,800 kWh in the region is still 37% below the world average of 2,870 kWh.

Access to modern forms of energy is a necessary condition for economic development and a high standard of living. In 2005, in theAsia and Pacific region, about 930 million people did not have access to electricity.

Xianbin Yao, ADB's Director General for Regional and Sustainable Development Department, said that there is a need to build a more robust energy database in the region.

These publications are the first attempt to consolidate and project energy demand and supply information in Asia and the Pacific by country, sub-region and the region as a whole. These will provide insights into the recent energy situation and a wealth of information for stakeholders inside and outside the region to chart their course of action in planning for energy investments,sustainable development, and poverty alleviation.

The two reports consolidate historical trends of energy demand and energy outlook up to 2030 in ADB's 48 regional members.

The Pacific Energy Summit, organized by National Bureau of Asian Research and co-sponsored by ADB, is a gathering of the world’s top leaders in science, government, and industry to advance regional cooperation on technologies, programs, and policies necessary in meeting resource requirements, sustaining economic growth, and reducing environmental impact throughout the Asia-Pacific.

Govt to step up disinvestment

The Government said it has decided that all profitable listed Central Public Sector Enterprises should meet the mandatory listing of 10% public ownership. In addition, all unlisted CPSEs having positive networth, no accumulated losses and having a net profit in the three preceding consecutive years should get listed on the stock exchanges. The disinvestment proceeds would be channelised into the National Investment Fund (NIF), the Government said in a statement. The corpus comprising deposits from April 2009 till March 2012 would be available in full for investment as capital expenditure in specific social sector schemes determined by Planning Commission and Department of Expenditure. The status quo ante of NIF will be restored from April 2012, it added. The President’s Address to the Joint Session of Parliament on 4th June and Finance Minister’s Budget Speech on 6th July had articulated the intention of the UPA Government to encourage people participation in the disinvestment programme. It had mentioned that CPSEs are the wealth of the nation, and part of this wealth should rest in the hands of the people while retaining at least 51% Government equity in our enterprises.

The decision, which was announced by Home Minister P Chidambaram after a meeting of the Cabinet Committee on Economic Affairs (CCEA), opens the doors for around 50 companies to get listed, prominent among them being BSNL, RITES and Ircon. Though, 18 PSUs are listed and do not comply with the mandatory 10% public float norm, about 10 such companies are profitable and will need to come out with a follow on issue. These include MMTC and NMDC, Neyveli Lignite, State Trading Corp. and National Fertilizers. The Government owns 98.38% in NMDC, 99.33% in MMTC and 91.02% in State Trading corp., according to filings to the Bombay Stock Exchange (BSE). Hindustan Copper is 99.59% government-owned, while Rashtriya Chemicals & Fertilizers (RCF) is owned 92.5% by the Government. The Government didn’t provide any timeframe or schedule of share sale. The Government's disinvestment plan may help it mobilise more resources and reduce its dependence on borrowings, economists said

Weekly Stock Picks - Nov 6 2009

Buy HDFC
Buy M&M
Buy Aban
Buy Reliance Industries

Weekly Newsletter - Nov 6 2009

Fear seems to gain more credence than greed these days. Volatility has escalated as traders and investors get cautious after a stupendous rally that began in early March. Corporate earnings and economic activity have show signs of improvement but there remains some apprehension about immediate prospects.

The sentiment will remain at the mercy of global cues and trend in fund flows. Stock-specific activity will continue depending on the news flow on corporate and economic data. Inflation and inflationary expectations coupled with concerns over overheated valuations and possible asset bubbles could keep a lid on the gains.

Central banks across the globe have at least started thinking in terms of when and how to withdraw the extraordinary stimulus measures without causing much upheavals. How they devise and execute their so-called "exit" strategies remain to be seen.

So, stick to basics as uncertainty and volatility are not going to go away in a jiffy. Don't buy into anything aggressively and don't forget to do your due diligence before picking up stocks. Though, there is no need to panic with the long term outlook positive, booking profits in the short term will enhance your portfolio.

Stocks could remain under pressure on Monday as the monthly jobs data in the US has come in worse than forecast. The October unemployment rate surprisingly climbed as high as 10.2% against average expectations of 9.9%. US firms shed 190,000 non-farm jobs versus prediction of 150,000.

RBI buys 200 tons of gold from IMF

The International Monetary Fund (IMF) said that it sold 200 tons of gold to the Reserve Bank of India (RBI) for US$6.8bn. Traders had expected China to be the leading contender. The sale was concluded at an average price of about US$1,045 an ounce over a two-week period in the latter half of October. "This transaction is an important step toward achieving the objectives of the IMF's limited gold sales program, which are to help put the fund's finances on a sound long-term footing and enable us to step up much-needed concessional lending to the poorest countries," the IMF's Managing Director, Dominique Strauss-Kahn, said in a statement. Traders said that the IMF news could add to recent gains in the precious metal.

India's foreign exchange reserves held at the central bank totaled US$285.5bn on Oct. 23, of which gold comprised more than US$10bn. The RBI paid on average about US$1,045 an ounce for the gold and the transaction would be paid in hard currency and not in IMF Special Drawing Rights.

The IMF declined to say whether other central banks have expressed interest in buying the remaining 203.3 tons of gold on tap for sale. Strauss-Kahn said if no other central banks came forward, the IMF would proceed as planned to sell the gold in the market. It was the first time since 2000 that the IMF sold gold to a central bank. Between December 1999 and April 2000 in separate transactions, the IMF sold a total of 12.9 million ounces of gold to member countries Brazil and Mexico.