Daily Newsletter - Dec 31 2009
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Thursday, December 31, 2009
Hindustan Oil Exploration
We recommend a buy in the stock of Hindustan Oil Exploration Company from a short-term perspective. It is evident from the charts of the stock that after bottoming in March low of Rs 44 the stock has been on an intermediate-term uptrend. In June the stock's uptrend accelerated and after breaking through the long-term resistance at Rs 170 the stock recorded an all-time high of Rs 398 in September. Since then, the stock had been on a medium-term corrective downtrend till it found support at Rs 260 in mid December. This corrective decline has resembled a falling wedge pattern, a bullish continuation pattern. On December 30, the stock broke through this pattern by gaining 10 per cent accompanied with good volume. Moreover, it has penetrated downtrend-line as well as 21 and 50-day moving averages. The daily relative strength index (RSI) has entered the bullish zone from the neutral region and weekly RSI is heading towards this zone. Our short-term outlook on the stock is positive. We expect it to move up until it hits our price target of Rs 328. Traders with short-term perspective can consider buying the stock while maintaining a stop-loss at Rs 281.
via BL
5 worst small cap stocks - 2009
The year 2009 for Dalal Street proved to be a highly volatile. The beginning of the year was gloomy, the mid-year was quite good, while the ending came as a sparkling shock with good Q2 GDP numbers, strong IIP figures and stimuli provided by government.
Indian equities earned over 75% returns in the year 2009 outperforming global markets by a wide margin. Global markets witnessed a marginal rise of over 20%.
As someone has rightly said, ``There are two sides of every coin``; this is applicable to stocks too. While few stock outperformed the Sensex returns, few stocks underperformed.
Let`s have a look at the `5 worst performing small cap stocks` which plunged to almost half of its values in the year 2009 as against their highs in a year ago.
> Austral Coke and Projects
Austral Coke and Projects, engaged in the manufacture and sale of low ash metallurgical coke and refractory in India is the leading worst performing stock in the small cap index. Stock price of the company plunged 91.53% to stand at dismal Rs 9.06 a share as on Dec. 23, 2009 as against Rs 107 as on Dec. 31, 2008.
Why all of a sudden downside in a scrip price? This could be attributed to the capital market watchdog, Securities and exchange board of India (SEBI) finding fraud transactions on their accounts and not permitting them to raise money. SEBI barred it from raising any fresh equity after the income tax department exposed an alleged more than Rs 10 billion fraud in the company`s transactions.
The company has a market capitalization of over Rs 2,676 million. The P/E ratio is Rs 9.18.
> Ramco Industries
Ramco Industries, a leading manufacturer of fiber cement sheets, pressure pipes, accessories & allied building materials and cotton yarn is the second nastiest performing stock from small-cap index that fallen over 86% to Rs 53.50 as on Dec. 23, 2009 from Rs 408.25 a share as on Dec. 31, 2008.
The company`s market cap is Rs 4571.48 million. The P/E ratio is Rs 16.84. P/BV is at 0.11.
> Shree Ashtavinayak Cine Vision
Shree Ashtavinayak Cine Vision, engaged in film production, distribution and exhibition is the third stock falling 85% from Rs 499.3 a share as on Dec. 31, 2008 to just Rs 74.9 as on Dec. 23, 2009. The company`s market cap is Rs 8036.89 million. The P/E ratio is Rs 40.52.
> Hindusthan National Glass & Industries
Hindusthan National Glass & Industries, engaged in making all kinds of glass containers is the fifth stock which plunged over 75% in the year 2009 to stand at Rs 137.2 a share against Rs 556.95 a share as on Dec. 31, 2008. The company`s market cap is over Rs 12,214 million. The P/E ratio is at Rs 7.84 while P/BV is at 1.12.
>Vishal Information Technologies
Shares of Vishal Information Technologies, involved in areas of data digitization & conversion, e-publishing, digital library solutions and print on demand conversion lost over 96% to stand at Rs 11.71 a share as on Dec. 23, 2009 as against Rs 301.35 as on Dec. 31, 2008. The company`s market cap is Rs 3,019.97 million.
via IRIS
5 best small cap stocks - 2009
The year 2009 proved to be a very scintillating year for the equity markets, across the globe, particularly for markets like India, which are still emerging.
India`s benchmark 30-share index, the Bombay Stock Exchange (BSE) Sensex is been amongst the best performers across key world markets during the current year, gaining more than 75% so far.
The small cap companies performed outstandingly too. This is evident from the fact that BSE Small Cap index, witnessed a 2.2 times yearly rise, as on Dec. 24, 2009.
Let`s have a glimpse of 5 star performers among the Small cap stocks in 2009 which have managed to make a mark while many others have failed:
Ahluwalia Contracts India:
Ahluwalia Contracts India (ACIL), a New Delhi based civil engineering contracting firm is engaged in construction of malls, hospitals, educational institutes, commercial complexes, luxury hotels, corporate office complexes, and multistoried residential complexes.
Stock price of the company zoomed 516.61% to stand at Rs 180.05 a share as on Dec. 23, 2009 as against Rs 29.2 as on Dec. 31, 2008.
Its stock performance during the year can be mainly attributed to factors like, during the year the company bagged new projects and orders nearly worth Rs 15.28 billion. Also it reported 63.80% growth in its NPAT for September quarter 2009.
OCL Iron and Steel:
OCL Iron and Steel mainly engaged in manufacture and sale of steel billets and sponge iron. These products are used by producer/manufacturer of finished/semi finished goods. It manufactures power from waste heat available at the sponge iron plant and also from coal.
Stock price of the company jumped 515.47% to stand at Rs 27.45 a share as on Dec. 23, 2009 as against Rs 4.46 as on Dec. 31, 2008.
Jindal South West Holdings:
Jindal South West Holdings (JSWHL) is a non-banking financial company (NBFC) registered with Reserve Bank of India (RBI). Its main business activities involve investment in shares, stocks, or other securities in India or abroad. It also provides management consultancy services for customers in finance, organization, management, commencement or expansion etc.
Stock price of the company zoomed 499.90% to stand at Rs 1,807.5 a share as on Dec. 23, 2009 as against Rs 301.3 as on Dec. 31, 2008.
Jindal South West Holdings` net profit rose 31.2% in Sep Q2 `09 over Q2 September 2008.
Kiri Dyes and Chemicals :
Kiri Dyes and Chemicals is a manufacturer and supplier of high quality dyes and intermediates for the dyestuff industry.The company also has has a well established customer base in India and countries like Korea, Turkey, Taiwan, Bangladesh, USA, and Canada among other countries.
Stock price of the company zoomed 497.81% to stand at Rs 627.7 a share as on Dec. 23, 2009 as against Rs 105 as on Dec. 31, 2008.
During the year Kiri Dyes reported many developments like acquisition of DyStar Group and its selective assets through insolvency, incorporation of wholly owned subsidiary named Kiri International Hong Kong abroad also its net profit for Sep quarter jumped 72.32% as against same period in the prior year.
Ajmera Realty and Infra India:
The company is engaged in the manufacture of pre-coated steel strips/aluminium strips, which are cold-rolled and galvanised. The product-mix includes alkyd/polyester coated and PVC laminated cold-rolled and galvanised coils. The group also has strong presence in the fields of textiles, printing, information technology and entertainment.
Stock price of the company zoomed 473.24% to stand at Rs 215.25 a share as on Dec. 23, 2009 as against Rs 37.55 as on Dec. 31, 2008.
While 2009 was seen as year with a clear uptrend market, 2010 is expected to be a volatile year driven by event risks which will trigger the direction, but still keeping our fingers crossed we hope that `small still remains beautiful` in the coming year too.
via IRIS
Daily News Roundup - Dec 31 2009
NTPC is set to get nod from government to sell 10% of its power capacity at market determined prices. (ET)
Infosys to invest Rs3bn in Orissa project. (BL)
TCS to step up hiring as info-tech spending takes off. (BL)
DLF is taking up a major restructuring exercise that can see the company splitting into five verticals. (FE)
M&M to launch 1 ton LCV Maximo on January 5. (BS)
JSPL may raise offer for Australia’s Rocklands Richfield. (BS)
Bharti Airtel to enter wi-fi space by rolling ‘hotspots’ at several locations across the country. (ET)
The National Housing Bank is likely to give HDFC two more years to comply with capital market exposure norms. (BS)
HCL Infosystems has bagged Rs1bn radio network contract in partnership with Motorola from Delhi Government. (ET)
LIC has raised its equity holding in Canara Bank to 7.08%. (ET)
JSL plans to expand its stainless steel capacity to 2.5mtpa by 2014. (ET)
BSNL puts mega tender plan for 93mn lines on hold. (ET)
Nalco has decided to locate its proposed 0.5mn ton Indonesian aluminum smelter project in east Kalimantan province. (BL)
Godrej Consumer Products is aggressively looking at acquisition including the house-hold insecticide business of Sara Lee Corp. (BS)
HCC has bagged an order worth Rs3.75bn for construction related works in Karnataka. (BS)
Panacea Biotech plans a buyback up to Rs1.05bn. (BS)
Cox & Kings acquires Australian travel firm MyPlanet Australia Pty Ltd and Bentors International Pty Ltd. (ET)
Hotel Leelaventures has bought back FCCBs worth US$25mn. (BS)
Diageo-Radico JV has received government approval for increasing foreign equity participation to 100%. (FE)
State Bank of Mysore to raise Rs6bn from rights issue. (BL)
United Bank of India has filed a DRHP for an IPO to raise Rs500mn. (BS)
Zylog to usher in low cost computing and has partnered with IBM and Canonical Ubuntu. (BL)
Foursoft has bagged a contract from a Canadian based Sheritt International Corporation for a logistic management system. (BS)
Credit growth back in double digits, growing at 10.8% yoy for the fortnight ended November 23, 2009. (BS)
Kelkar led commission proposes hike in state’s share of tax revenues. (ET)
Banks reject RBI’s move to dump BPLR based norms. (ET)
Life Insurance Companies business grew 22% in first eight months of the current fiscal. (ET)
Bank lending in December has jumped nearly five-folds over the previous month. (ET)
Iron ore exports to slide by 6mn tons on duty hike. (ET)
Time not right to exit stimulus measures, says FM. (ET)
RBI has sought details from banks about their investments in mutual funds. (ET)
The government has cleared 9 FDI proposals worth Rs5.2bn. (BS)
Ban on sugar futures trade extended till September 2010. (BS)
3G spectrum auction likely from February 13. (BL)
Banks want CRR and SLR exemption for infrastructure bonds. (BL)
Have a nice time!
All that really belongs to us is time; even he who has nothing else has that.
The time has come for a spectacular year to draw to a close. Timing the start of the market has been the latest debate and time in the market is going to get longer after today. We hope 2010 brings in even better gains though that may seem asking for too much. World equities have had a phenomenal rally from bear market troughs. Much will depend on how the global economic recovery progresses. Among the events to watch out for will be the Fed’s policy actions and its fallout on financial markets, particularly the dollar. RBI moves on CRR and/or interest rates should come as no surprise whenever it happens.
Though the Nifty has made a new high for 2009, the market has been pretty much in a holiday mood this month. We expect a dull start amid subdued global markets. Volatility will prevail due to the F&O expiry. The Nifty is likely to face resistance at 5180-5200. A decisive close above 5200 could see the Nifty shooting to 5300-5650. Support is placed at 5100 and below that at 5000. Take all the rest you can during this long weekend. We continue to advocate caution on small-cap and mid-cap stocks.
Key events that will shape the future for the Indian markets in the initial months of 2010 will be quarterly earnings, trend in inflation, RBI's policy moves and the Union Budget. Possible triggers could come from the Government's positive movement on certain policy measures such as the GST, the new Direct Tax Code and the long-pending reforms in a few sectors like insurance, pension, banking, etc. The timing and nature of the 'EXIT' from the fiscal stimulus may pose some challenges for policymakers. Later on in the year, monsoon will be a crucial factor.
FIIs were net buyers in the cash segment on Wednesday at Rs1.13bn on a provisional basis. The local funds were net buyers of Rs691.1mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs2.78bn. As per the SEBI figures, FIIs were net buyers of Rs3.85bn in the cash segment on Tuesday.
US stocks ended a choppy session barely higher on Wednesday, with the Dow and Nasdaq eking out fresh 2009 highs, as investors mulled a stronger dollar and opted to play it cautious at the end of a tumultuous year.
The Dow Jones Industrial Average added 3 points, ending at the highest point since Oct. 1, 2008. The S&P 500 index ended just above the unchanged line, closing just shy of 15-month highs hit two days ago. The Nasdaq rose by 3 points, ending at the highest point since Oct. 3, 2008.
A stronger dollar put some pressure on the market, dragging on commodity prices and stocks, and pulling down shares of companies that do a lot of business overseas. After sliding for most of the year versus the euro and yen, the dollar has gained over the last few weeks.
Trading volume has been low this week, with many market pros and individual investors on vacation. Lighter trading volume can cause increased volatility. All US financial markets are closed on Friday for the New Year's Day holiday.
Year-to-date, the Dow has risen 20%, the S&P 500 has climbed almost 25% and the Nasdaq has gained 45%, as of Tuesday's close. All three indexes have posted more substantial gains since falling to multi-year lows on March 9 amid the height of the financial crisis.
US stock gains next year could be a lot milder, analysts say, as the government stimulus fades and a sluggish US economy struggles to create jobs. Consumer spending is likely to stay weak, the dollar could firm up and the Federal Reserve is expected to begin raising interest rates in the second half of 2010.
In the day's economic news, the Chicago PMI, a regional read on manufacturing, rose to 60 in December from 56.1 previously. The improvement was a surprise, with economists expecting it to drop to 55.1.
Troubled auto and mortgage financing firm GMAC Financial Services is expected to receive a third round of bailout funds, according to a published report. GMAC is expected to get an additional $3.8 billion on top of the $13.5 billion it has already received since Dec. 2008.
COMEX gold for February delivery fell $5.60 to settle at $1,092.50 an ounce. Gold closed at an all-time high of $1,218.30 an ounce earlier this month.
US light crude oil for February delivery rose 41 cents to settle at $79.28 a barrel on the New York Mercantile Exchange.
Treasury prices rose, lowering the yield on the 10-year note to 3.79% from 3.80% late on Tuesday.
European stocks declined, pulling back after setting 14-month highs in the previous session, with banks posting big declines. Swiss pharmaceutical company Basilea dropped sharply following a setback on a key drug.
The Dow Jones Stoxx 600 index fell 0.4% to close at 253.16, but the pan-European index came off lows after Wall Street opened in a narrow range. Tuesday marked the index's highest close since October 2008.
Among the main country indexes, the German DAX 30 index closed down 0.9% at 5,957.43 in a shortened trading session. The German market will remain closed on Thursday. It notched up a 23.8% rise over the course of the 2009 - its best year since 2005. Read about the German market's 2009 performance.
The French CAC 40 index dipped 0.6% to end at 3,935.50, and the UK's FTSE 100 index shed 0.7% to finish at 5,397.86.
Main Indian stock indices closed in the red on Wednesday even as uncertainty prevails on the issue of extending the trading hours beginning January 4. The market continued to be lackluster with only a day to go in the year 2009 and due to anxiety about the prospects for equities in 2010.
Thursday's F&O expiry ensured that there was enough volatility as traders pondered over possible strategies to adopt ahead of another long weekend. What's more, Asian markets were pretty mixed and European stocks declined from multi-month highs.
The key indices opened higher, then turned choppy, only to slide to the day's low. From then on they successfully managed to come back into the positive zone before turning flat. In the end, the BSE Sensex and the NSE Nifty ended slightly down.
The Sensex finished at 17,343.82, down 58 points or 0.33% over the previous close. Earlier, it touched a high of 17,440 and a low of 17,322 after opening at 17,402. The Nifty shut shop at 5169, down 19 points or 0.36% from the last close. The Nifty touched a high of 5197 and a low of 5160 after opening at 5188.
Meanwhile, the small-cap and mid-cap counters extended gains from Tuesday. The BSE Small-Cap index and BSE Mid-Cap index rose 1.1% and 0.3% respectively.
Off the BSE sectoral indices, Consumer Durables and Real Estate indices posted modest gains. Select IT, Auto and Banking shares also ended higher. Notable losers included FMCG, Metals, Capital Goods, Oil & Gas and Pharma.
The big losers within the Sensex were ITC, Hero Honda, Sun Pharma, Hindalco, Tata Steel, L&T and ONGC. The list of winners included Reliance Infra, ACC and Grasim.
Outside the key stock indices, the top losers were BL Kashyap, Great Offshore, Max India, 3i Infotech, PTC India, Time Technoplast, Abbott India, Zandu Pharma, GTL Infra and Jindal Steel.
Essar Shipping, Gammon Infra, HOEC, Marksans Pharma, TVS Motor, Jyoti Structures, JM Financial, Heidelberg Cement, Jagran Prakashan, Balaji Tele, Shiv-Vani Oil and Assam Co. were among the top gainers outside the main indices.
Shares of Gammon India and Gammon Infra rose a day after the National Highway Authority of India (NHAI) gave a clean chit to Gammon India and Hyundai Engineering in relation to the collapse of a bridge in Kota (Rajasthan) over the Chambal River which killed 30 people.
Gammon India closed at Rs226 on the BSE, almost unchanged over the previous close. It toughed a high of Rs236 and a low of Rs225 after opening at Rs226. On Tuesday, Gammon India's stock closed at Rs225 on the BSE, down Rs14.50 or 6%. Gammon Infra was up 11.6% at Rs22.65.
Shares of Shipping Corporation of India (SCI) rose on Wednesday after a senior company official said that the public sector company plans to acquire three new container ships in 2010 and has set aside US$200-225mn to fund these purchases.
SCI ended at Rs147 on the BSE, up Rs1.80 or 1.2% over the previous close. It toughed a high of Rs150 and a low of Rs146 after opening at Rs149.
Marksans Pharma Ltd. shares gained as much as 10% in Mumbai trading after the company's board said that it will seek approval from the shareholders to raise as much as US$125mn in capital and sell or lease its active pharmaceutical ingredient (API) plant in Pune.
The stock finished at Rs5.78 on the BSE, up Re0.52 over the previous close. Traded volume on the counter shot up to 17.43 lakh shares.
Shares of Panacea Biotech Ltd., the world’s biggest maker of the polio vaccine, shot up in Mumbai trading after saying that it plans to buy back its shares. The New Delhi-based company’s board will consider a stock buyback plan today.
The stock was locked in 5% upper circuit limit at Rs211.55 on the BSE, up Rs10 over the previous close. It touched a low of Rs207 after opening circuit up at Rs211.55. Traded volume on the counter stood at 1,44,910 shares.
Four Soft Ltd. rose by its 5% daily upper limit to close at Rs28.20. Canada’s Sherritt International Corp. selected Four Soft’s software for installation at multiple locations.
Wednesday, December 30, 2009
Top Stock Picks for 2010
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