India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Wednesday, November 15, 2006
Bullion: Easing inflationary concerns cap upside
Gold fell in New York for the third straight session after the prices paid to US producers matched the biggest monthly slide ever in October, reducing the precious metal's appeal as a hedge against inflation. The 1.6% drop in the prices paid to factories, farmers and other producers followed a 1.3% decline in September. Analysts expect the USA to report lower consumer prices on November 16, which would put further pressure on gold.
Download here
BREAKING NEWS - Welspun Gujarat gets 4.60 bln rupees order
Steel pipes maker Welspun Gujarat Stahl Rohren Ltd.
A stock exchange notice earlier said the company had secured orders, but Welspun Gujarat said in a statement that it was a single order.
The company expects to execute the order for the 120-kilometre (74.56 miles) pipeline by 2007. Its order book stands at about 25 billion rupees, it said.
Shares in the company rose 0.61 percent to 82.40 rupees in a firm Mumbai market.
Sensex may strike new high on strong FII inflow
Continued strong FII inflow and surge in US stocks on Tuesday may see Sensex strike fresh all time high today. RBI staking on Tuesday that recent fall in global crude oil prices should help ease inflation pressures would further boost market sentiment. But higher levels may attract profit taking due to a sharp surge in Sensex over the past few weeks.
As per provisional data, FIIs were net buyers to the tune of Rs 1270 crore on Tuesday (14 November), the day when Sensex had gained 26.50 points in volatile trade. Their cumulative inflow for calendar 2006 has reached $7.5 billion (till 13 November) compared to a record inflow of $10.7 billion in 2005.
Revision in earnings estimates by brokerages for companies following strong Q2 results has fuelled surge in FII inflow in the past few weeks. Another factor that has contributed to the surge in FII inflows is the fresh number of FIIs registering with Sebi every day. Since January this year, there has been an addition of over 150 FIIs, and the aggregate now stands at 978. A strong global liquidity, too, has aided the fund flow.
A section of the market attributes the solid surge on the Indian bourses to increasing recognition of India’s long-term growth prospects. From 4,644 on 23 June 2004, it has galloped 189% in less than two and a half years.
Asian stocks were in the green on Wednesday (15 November). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.04% to 0.6%.
US stocks rallied on Tuesday, pushing the Dow to a record closing high, after Wal-Mart Stores Inc. and Target Corp. posted stronger-than-expected profits and inflation data eased interest-rate concerns. Tuesday's record finish is the 15th record close for the blue-chip Dow average since the beginning of October. The Dow Jones industrial average shot up 86.13 points, or 0.71 percent, to end at a record 12,218.01. The Standard & Poor's 500 Index gained 8.80 points, or 0.64 percent, for a close at 1,393.22. The Nasdaq Composite Index rose 24.28 points, or 1.01 percent, to 2,430.66.
Firm global indices may lift sentiment
Overall buoyancy in the international markets coupled with rising FII inflows in the current month and strong fundamentals may help the market edge higher. All the Asian indices are marginally up in morning trades which may help the domestic indices commence on a firm note. On the market technicals, the Nifty could test higher levels around 3857 while on the downside it has a support at 3830-3810 range. The Sensex has a likely support at 13330 and may face resistance at 13500.
US indices rallied sharply for the second consecutive session on Tuesday with the Dow Jones adding 86 points to close at 12218, this been the 15th record close since the beginning of October, while the Nasdaq advanced by 24 points to close at 2431.
Barring few all the Indian ADRs had a firm outing on the US bourses. Rediff was the major gainer and rose over 5% followed by Wipro which up by 4%, Infosys, Patni Computer and HDFC Bank gained over 2% each. However amongst the losers VSNL shed over 2% followed by ICICI Bank which was down by 1%. Tata Motors and Dr Reddys ended with marginally losses.
Crude oil prices in the US market slipped on Tuesday, with the Nymex Light Crude oil for December delivery falling by 30 cents to close at $58.28 a barrel and the London Brent crude declining by 66 cents at $59.05 per barrel. In the commodity space, the Comex gold for December series lost 50 cents to settle at $625.30 a troy ounce.
On Nov 13 2006, FIIs were net buyers of stocks to the tune of Rs778.20 crore (purchases worth Rs1927.70 crore and sales of Rs1149.50 crore) while domestic mutual funds were net buyers of stocks to the tune of Rs52.10 crore (purchases worth Rs549.28 crore and sales of Rs497.27 crore).
Google and the selling of simplicity - Jonathan Weber
Can Google succeed in the print world the same way it has online?
The incredible success of Google is easy enough to understand - the company built a better mousetrap, and the world beat a path to its door. Its search results are generally much better than that of other search engines, and it has discovered that relevant text ads next to search results are a powerful advertising medium. The relevance of the ads that Google places on other publishers' websites is far higher than that offered by competitors and thus they get more clicks, and the publisher gets more money. I've seen this first-hand on NewWest.Net.
From another standpoint, however, Google's current dominance of the online advertising world looks anomalous. A large and growing chunk of Google's business involves serving as the middleman between advertisers and publishers and that's a position, in the age of the internet, which is supposed to be inherently insecure. That's especially true when the middleman takes a huge cut. Google is so powerful that it doesn't feel the need to tell its customers how much it is taking, but judging by the company's profits it is a lot.
In theory, cutting out this ravenous middleman should be easy. All a publisher need do is look at the ads showing up on Google Adsense, call the advertiser, and offer them the same link for less. The result? Cheaper ads for the advertiser and more profit for the publisher. But this kind of thing doesn't seem to be happening much - at least not yet. Google has made things simple and effective for the advertiser and they like it that way.
Indeed, it has succeeded so well in selling simplicity that the company is now widening its net. It is making a substantial effort to sell advertising in other media including radio, television and newspapers. Google will use its systems to target and auction ad space, and provide advertisers with creative support as well as buying power. It is, in part, a simplification of the services traditionally offered by ad agencies, which small advertisers cannot afford.
Google's initial foray into selling print magazine pages has reportedly been something of a bust but the company seems undeterred. Certainly, the agency system could use some modernising, and there seems to be a market for offering more and better tools to small advertisers. But will Google enjoy the same competitive edge in this business as it does in the world of search? I'm not sure.
Its online advantage is huge. For all the dramatic growth in online advertising and all the talk of millions of new publishers with blogs and podcasts and YouTube videos, a remarkable 75 per cent of all online advertising revenue is flowing to the ten largest ad-supported websites (with Google, of course, at the very top of the list). Either the consolidation of the new media world has already happened and the leaders have built a position of dominance that will last for some time, or we are still at a very early stage and the 'long tail' of smaller, newer internet enterprises is just beginning to wag. I tend to believe the latter.
Google continues to insist that it is not a media company because it does not produce or own content; it is an aggregator that provides services to the media industry. It would stand to reason that content companies, once they stop bemoaning the end of the good old days and begin re-making their businesses in earnest, will be able to develop some of these services themselves. At the very least, any business carrying the kind of gross margins that Google enjoys will attract - indeed is already attracting -a ton of competition. All kinds of intermediaries will be trying to connect advertisers with relevant media and specific types of consumer behavior.
A popular question on the conference circuit these days is whether Google is a friend or a foe of media companies. I think it is neither: it is a vendor, one whose services currently command a large premium because they are superior to those of the competition. Will that last forever? I have my doubts.
DLF settles minority shareholders' issue
DLF on Tuesday resolved the pending minority shareholders' issue, which clears the way for the company to file the draft red herring prospectus with the market regulator SEBI for its initial public offering.
In an extra-ordinary general body meeting, the company approved the revival/revalidation and issue of 81,983-two per cent unsecured redeemable debentures of Rs 100 each.
The debentures are optionally, fully or partly convertible at par or at premium to the shareholders in accordance with their entitlement.
Rewrite prospectus
The company will have to rewrite its prospectus accordingly, a process that it will initiate shortly and file for the IPO "very soon", said a source close to the development.
The IPO size may also be revised by the company, he said. The process of allotment of these 81,983 debentures will take about two weeks.
The company also approved that the debentures on issue and allotment and on being fully paid-up, be converted into equity shares in the ratio of 10 equity shares of Rs 10 each for every one debenture of Rs 100 each held by them.
Approves share split
The EGM also approved the split of shares so issued into five shares of Rs 2 each for every Rs 10 paid-up share.
A further bonus share issue of seven equity shares of Rs 2 each for every share of Rs 2 held after the conversion of the debentures into equity shares and subsequent splitting of shares was also approved.
The new shares so issued will rank pari-passu with existing shares of the company and carry the same benefits.
The Board of Directors had been advised that there were no lapses committed by the company in respect of the offer of debentures made to the shareholders in December 2005, but keeping the interest of the minority shareholders in mind and to maintain their goodwill, the board decided to revive the lapsed offer of debentures to the minority shareholders.
The move will benefit minority shareholders of DLF. The EGM was attended by around 55 shareholders and their representativesFII: +Rs778.20Cr & MF +Rs52Cr
FII Gross purchases Rs 1927.70 Cr Gross Sellers Rs 1149.50 Cr Net Buyer Rs 778.20 Cr
MF Gross Purchases Rs 549.28 Cr Gross Sellers Rs 497.27 Cr Net Buyers Rs 52 Cr
Strong buying continues and markets continue to be strong. The provisional buy figure of Rs 1270 crore which includes a 900 cr block deal of TCS
Greaves Cotton plunges 18 pc
The stock of Greaves Cotton plummeted by more than 18 per cent on Tuesday on the BSE on rumours that Piaggio is likely to set up a plant in India. Given that 30-35 per cent of the company's revenue comes from Piaggio, this news is expected to dampen its future prospects.
Greaves Cotton manufactures diesel engines for Piaggio. Dealers also said that a leading domestic fund, which holds more than six per cent equity in the company, had turned seller on this counter. The stock closed at Rs 322.55, down 18.23 per cent
Subscribe to:
Posts (Atom)