Tuesday, 30 September 2008

Analyst and Brokerage Views - 01/10/2008

Bank of Rajasthan can touch Rs 70-72: E Mathew

E Mathew told CNBC-TV18, "The chart of Bank of Rajasthan is not looking as encouraging as that of Axis Bank but yes, there is still headroom here. In fact Bank of Rajasthan when you look at it it’s a low-priced scrip, there is headroom upto Rs 70-72 which percentagewise works out to a very decent return."

Intact Uptrend in Axis Bank, says E Mathew

Technical Analyst, E Mathew is of the view that uptrend in Axis Bank is very much intact. As soon as the dust settles down in the market, this is certainly going to be an outperformer, he added.

Above Rs 110, Moser Baer has target of Rs 137: Mathew

Technical Analyst, E Mathew is of the view that above Rs 110, Moser Baer has target of Rs 137. It is also good for trading bet or even a very short-term investment call, he further said.

Buy ICICI Bank at Rs 500: Vijay

Vijay told CNBC-TV18, "I will buy ICICI Bank at Rs 500. I think its been driven by humongous set of room among us for last 20 days; first, insider selling and then questioning the provisions made and repeatedly the management has been saying, this is rubbish. I respect the ICICI Bank management, I think they do not tell lies, they are professionally run bank and if I believe what they said I think at Rs 500 it’s a screaming buy.”

Add ICICI Bank, target of Rs 650: Kotak Institution

Kotak Institution has maintained its add rating on ICICI Bank with a target price of Rs 650, reports CNBC-TV18.

Accumulate HCL Tech, target of Rs 258: P Lilladher

Buy ratng on HCL Technologies with a 12-month target of Rs 258 in its September 29, 2008 research report.

Buy Lupin, target of Rs 933: Motilal Oswal

We believe that the stock has the potential of getting rerated given the differentiated business model of the company. If the current INR v/s the USD rate sustains (@ Rs 46/USD), we expect an upside to our estimates. We reiterate Buy with a price target of Rs 933 (28% upside).

IT Companies worst hit

“The crisis is turning out to be worse than expected and I guess that some 600-800 small and medium banks in the US will go out of business as the credit flow dries up,” said Mr Phaneesh Murthy, CEO of iGATE Corp.

“As a result of this credit squeeze and consolidation, I think there will be a 15-20 per cent cut in IT budgets of financial services sector for 2009,” Mr Murthy added.

Celent estimates indicate that IT spending by financial institutions has already slowed down in past two years. IT spending stood at $342.1 billion in 2007, a year-on-year increase of 5.9 per cent, but lower than 8.7 per cent growth achieved in 2006.

“I guess there would be a moderate cut of 10-15 per cent because of consolidation and reduction in scale” Mr S.Sabyasachi, research director at neoIT, an offshore advisory firm.

Transformational and business process reengineering projects could take a back-seat as financial institutions look to efficiency to cut their costs, Mr Sabyasachi added

“As of today, 20 per cent of the IT budgets for 2009 will be cut,” said Mr Sudin Apte, analyst and head of for Forrester Inc’s India operations. Consolidation and disappearance of some large entities from the financial services arena would lead to budget cuts.

“There will be immediate scrutiny of new discretionary projects and compliance will become a key as government plans a bail-out package. As a result, there will be more spending on compliance,” Mr Apte said.

Recently Forrester said 40 per cent of the large businesses in North America and Europe have reduced their overall IT budgets for 2008 in reaction to a slowing economy.

About half of the financial services clients surveyed by Forrester have slashed their IT budgets for 2008.

Baseless and malicious - Kamath

In a statement, Mr K.V. Kamath, Managing Director and CEO, said, “ICICI Bank is aware that rumours are being repeatedly circulated in certain centres regarding the financial strength of the bank. The bank states that these rumours are baseless and malicious.”

The bank said the absorption of the impact of current market conditions on investment portfolio valuation will not pose any challenge to the bank’s capital position.

It has a capital adequacy ratio of 13.4 per cent as on June 30, 2008, which reflects the healthy capital position and comfortable level of leverage.

The stock on Tuesday, which had suffered heavy pressure on Monday, gained 8.42 per cent on the Bombay Stock Exchange and closed at Rs 534.85 against the previous close of Rs 493.30. On Monday, the share was down 12.11 per cent.

Sell Adani: CMP Rs 467

We recommend a sell in Adani Enterprises from a short-term perspective. It is evident from the charts that the stock has been in a long-term downtrend from its January high of Rs 1,335.

On September 29, the stock tumbled more then 9 per cent and found support around Rs 500 level, which is also the March trough. However, this halt proved to be temporary. The stock conclusively broke through this support level by declining 6 per cent with high volume on September 30, reinforcing the bearishness.

The counter is trading well below its 21 and 50-day moving averages. The daily and weekly relative strength indices are featuring in the bearish zone. Moreover, the daily and weekly moving average convergence and divergence are featuring in the negative territory. The long-term down trend line is intact and is still in place.

Our short-term forecast for the stock is negative. We expect the stock’s downtrend to prolong until it hits our price target of Rs 420 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 490.

Day Trading Guide - 01/10/2008


Initiate fresh long-position if the stock moves above Rs 550 with tight stop-loss.


In the last trading session, the stock found support at Rs 1,300 and recovered. Buy the stock in dips with tight stop-loss at Rs 1300.


On Tuesday, the counter gained 4 per cent with good volume and formed piercing line candlestick pattern, which signals bullishness. We recommend a buy in this counter.


Desist trading in this counter for the session, as the outlook is cautious.

Reliance Capital

The stock has formed piercing line candlestick pattern that signals bullishness. We recommend a buy.

Reliance Communications

Fresh long position can be initiated if the stock crosses Rs 342 level, with stiff stop-loss.

Reliance Industries

The outlook remains positive as long as the stock trades above Rs 1,900 level. Buy the stock in declines.

Satyam Computer

The stock has formed a spinning top candlestick pattern, indicating indecisiveness in the previous trading session. Avoid trading in this stock.


The stock rallied shaping a bullish engulfing candlestick pattern on Tuesday. We notice above average volume. We recommend a buy.


We retain our buy recommendation in this counter.

Monday, 29 September 2008

Battered and bruised

Weakness in metal, oil, and realty stocks took a heavy toll on the market and the Sensex shed 3.87% at close.

The market’s southbound journey continued, as slump in global indices and concerns of a possible recession in the USA made the investors edgy, triggering a major sell-
off. The Sensex started the day on a positive note at 13,109, up seven points and hovered above its last close of 18,114 till the early morning trades. However, a strong bout of selling in afternoon saw the Sensex amass losses of 700 points to touch the day's low of 12,403. The Sensex dropped 3.87% and was down 506 points for the day at 12,596. The Nifty shed 3.39% and was down 135 points at 3,850.

All the 13 sectoral indices were mauled by 1-6% each. The BSE Bankex was the major loser and crashed by 6.02%, followed by the BSE CD (down 5.68%), BSE IT (down 5.47%), BSE Realty (down 5.26%), BSE Power (down 5.22%) and BSE Teck (down 5.13%). The second-rung benchmark indices--BSE mid-cap and BSE small-cap tanked by over 3-4% each.

The market breadth was negative. Of the 2,685 stocks traded on the BSE, 2,287 stocks declined, while only 357 stocks advanced. Fourty one stocks ended unchanged. Except Hindustan Unilever Ltd (HUL), the other 29 stocks that makes the Sensex ended lower. Among the major losers, ICICI Bank crashed by 13.23% at Rs487, Jaiprakash Associates plunged by 11.77% at Rs106.80, Satyam Computer Services slumped 9.30% at Rs292, Tata Consultancy Services crumbled 8.86% at Rs616.55. Tata Power plummeted by 6.75% at Rs920.05, Mahindra & Mahindra dropped 6.69% at Rs495, Reliance Infrastructure shed 6.43% at Rs795 and Reliance Communications tanked 6% at Rs257. Other heavyweights also came under sustained selling pressure and lost 2-5% each. However, HUL gained 0.79% at Rs254.50.

Over 1.41 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (0.89 crore shares), Chambal Fertlisers & Chemicals (0.71 crore shares), Jaiprakash Associates (0.63 crore shares) and ICICI Bank (0.58 crore shares).

In value terms, Reliance Capital registered a turnover of Rs309 crore on the BSE followed by Reliance Industries (Rs299 crore), ICICI Bank (Rs295 crore), Axis Bank (Rs157 crore) and Larsen & Toubro (Rs134 crore).

- Sharekhan

Thursday, 25 September 2008

Sell: Pantaloon Retail India

Stock: Pantaloon Retail India
CMP: Rs 274
Target: Rs 246 - short-term perspective
Stop Loss: Rs 288
Reason: Technical Analysis
Recommended By: Hindu BusinessLine

Day Trading Guide - 26th Sep 08


Desist trading in this counter for the session as the stock is in a sideways consolidation.


A significant support for the stock is at the Rs 1,457-level. Buy the stock in dips with tight stop-loss at Rs 1,457.


The stock was volatile in the previous trading session and it formed a doji candlestick pattern, indicating neutral stance. Avoid trading in this counter for the day.


Initiate fresh long position only if the counter exceeds the Rs 1,085-level, with stiff stop-loss.

Reliance Capital

The stock is trading in a narrow range bound. We retain our prior view of avoiding trading in this counter for the session.

Reliance Communications

We retain our buy recommendation in this counter.

Reliance Industries

Initiate fresh long-position if the stock surpasses Rs 2,060-level with close stop-loss.

Satyam Computer

Buy the stock in dips with stop-lose at Rs 305.


Fresh short-position can be initiated if the stock declines below the Rs 1,467-level with stiff stop-loss.


In the last trading session, the stock penetrated the support level of Rs 700 by declining 3 per cent. We re-affirm our sell recommendation

- Hindu BusinessLine

IFCI can go upto Rs 47-48

Stock: IFCI
CMP:Rs 40.50
Target: Rs 47-48
Recommended By: E Mathew

Punj Lloyd can touch Rs 350-360

E Mathew is of the view that above Rs 330, Punj Lloyd can touch Rs 350-360.
E Mathew told CNBC-TV18, "If one looks at a stock like Punj Lloyd, one would certainly realize that maybe the sell off has been overdone a bit too much. In fact I see an uptrend from around Rs 190-195 zone in it and if the stock now sustains above this Rs 328-330 which is a tough resistance zone, this uptrend could further surprise you on the upside subject to it crossing Rs 330 and staying above that we could easily see the stock like Punj Lloyd go to Rs 350-360."

Source: MoneyControl

Buy GMR Infra

Stock: GMR Infra
CMP: 89
Target: Rs 105-108
Recommended By: E Mathew

Accumulate Idea Cellular

Stock: Idea Cellular
CMP:Rs 79.50
Target: Rs 94
Recommended By: September 19, 2008 research report of Prabhudas Lilladher
Reason: " We initiate coverage on Idea cellular with an accumulate rating and a DCF based target price of Rs 94 (WACC=13%, Terminal growth rate=3%). Idea cellular is in the early stage of wireless coverage and at least 3-4 years away from attaining maturity. Further, new rollouts are currently gestation businesses (with around 10-12 quarters away from breaking even). Hence, we have used DCF as our prime tool to capture the true potential of the business,"

Accumulate Zee News

Stock: Zee News
CMP:Rs 43.50
Target: Rs 55
Recommended By: September 24, 2008 research report of Prabhudas Lilladher
Reason: "We expect the company to post 24% and 37% revenue and earnings CAGR, respectively in FY08-11E. The stock currently trades at 22.9x and 16.8x our FY09E and FY10E earnings estimates and remains one of the cheapest stocks in our broadcasting universe. We assume coverage on ZNL with a Accumulate rating and a target price of Rs 57,"

Value Picks give by HDFC Securities

HDFC Securities report: We have attempted to shortlist companies based on Graham and Buffet’s style of investing. Our domain of companies includes the CNX 500 and BSE 500 companies and time frame for the study is 3 years. We have short listed companies from the CNX 500 and BSE 500 stocks along with ideal entry levels for each of the stocks:-

Buy Sun Pharma

Stock: Sun Pharma
CMP:Rs 1466
Target: Rs 1640
Recommended By: Sharekhan

Buy Sterlite Industries

Stock: Sterlite Industries
CMP:Rs 476
Target: Rs 647
Recommended By: Morgan Stanley

If your idea clicks at Google, get paid up to $10 mn

NEW DELHI: Google is turning 10 and has thought of a novel idea to celebrate a decade of its existence. It is working towards changing the world. If you have an idea that could change the world, or at least help a lot of people, the internet giant Google wants you to share it with them. And hold your breath, if the idea rocks and clicks, you get as much as $10 million to make it a reality.

Google has named the project "10 to the 100th" and the initiative will seek input from the public and a panel of judges in choosing up to five winning ideas, to be announced in February.

"These ideas can be big or small, technology-driven or brilliantly simple -- but they need to have impact," Google said in a news release. "We know there are countless brilliant ideas that need funding and support to come to fruition."

Those are ideas such as the Hippo Water Roller, which Google cited as the kind of concept the company would be interested in rewarding. Developed in Africa, where it is most used, the Hippo Water Roller is a barrel-shaped container, attached to a handle, that holds 24 gallons of water and can be rolled with little effort like a wheelbarrow, making it easier for villagers on foot to transport critically needed fresh water to their homes.

People are encouraged to submit their ideas, in any of 25 languages, at www.project10tothe100.com through October 20. Entrants must briefly describe their idea and answer six questions, including, "If your idea were to become a reality, who would benefit the most and how?"

- EconomicTimes

Buy Balaji Telefilms

Share: Balaji Telefilms
CMP: Rs 148
Target: Rs 268
Recommended By: Sharekhan

WaMu is largest US bank failure

WASHINGTON: A rescue for the US financial system unraveled on Thursday amid accusations Republican presidential candidate John McCain scuppered the deal, and Washington Mutual was closed by US authorities and its assets sold in America's biggest ever bank failure.

As negotiations over an unprecedented $700 billion bailout to restore credit markets degenerated into chaos, the largest US savings and loan bank was taken over by authorities and its deposits auctioned off. US stock futures fell by more than 1 percent.

The third-largest US bank JPMorgan Chase & Co said it bought the deposits of Washington Mutual Inc, which has seen its stock price virtually wiped out because of massive amounts of bad mortgages. The government said there would be no impact on WaMu's depositors and customers. JPMorgan said it would be business as usual on Friday morning.

Had a bailout deal been reached in Congress, it may have helped the savings and loan, founded in Seattle in 1889. Efforts to find a suitor to buy WaMu faltered in recent days over concerns about whether the government would reach a deal to buy its toxic mortgages.

- Economic Times

Wednesday, 24 September 2008

Day trading Tips

We retain our previous view of initiating fresh short-positions if the stock declines below Rs 585, with tight stop-loss.

In line with our anticipation, the stock fell in the last trading session. The stock tumbled over 6 per cent in the last two trading sessions, signalling weakness. We retain our sell recommendation.

Though the stock managed to close positive on Wednesday, it has formed a gravestone doji candlestick pattern that indicates bearish. We recommend a sell in this counter.

Sell the stock in rallies with tight stop-loss at Rs 1,100 level.

Reliance Capital
The stock is pausing at around current levels. Avoid trading in this counter for the session.

Reliance Communications
The counter is moving sideways in a narrow range. Buy the stock dips with stiff stop-loss at Rs 360.

Reliance Industries
Initiate fresh long-position if the stock surpasses the Rs 2,075 level with close stop-loss.

Satyam Computer
The stock was volatile and shaped spinning top candlestick pattern with heavy volume on Wednesday. Desist trading in this stock for the day.

The outlook is cautious for the stock. Avoid trading in this stock for the session.

The near-term stance is bearish for the stock. We re-affirm our sell recommendation.

- Hindu Business Line


Stock: IVRCL
CMP: Rs 250
Target: Rs 308
Recommended By: Prabhudas Lilladher

Buy Jindal Saw

Stock: Punj Lloyd
CMP: Rs 615
Target: Rs 675
Period: short-term trading perspective
Stop Loss: Rs 584
Recommended By: Hindu Business Line

Buy Punj Lloyd

Stock: Punj Lloyd
CMP: Rs 290
Target: Rs 532
Recommended By: Sharekhan

Buy Power Grid

Stock: Power Grid
CMP: Rs 93
Target: Rs 110
Recommended By: Indiabulls in their latest research report
Reasons: "At the current market price of Rs 91.10, the Company is trading at a price to book multiple of 2.73x. Our valuation model gives us a target price to book multiple of 3.29x and a estimated fair value of Rs 110. We have assumed a discount rate of 9.25%. Our target price shows an upside of 21% from the current price. We therefore initiate coverage with a BUY rating"

Stock tip: Satyam Computers

Stock: Satyam Computer Services
CMP: Rs 334
Recommended By: SP Tulsian, Investment Advisor
Period: buy with 3-6 months perspective
Reasons: Weaker Rupee, cheapest among peers

It has also been recommended by Ashwani Gujral. He thinks long term investors can invest in this stock. As per him Satyam has support around Rs 280-300 and could get above Rs 400-410 levels.

Vijaya Bank likely to move up by 10%

Stock: Vijaya Bank
CMP: Rs 35
Target: Rs 40+
Recommended By: Prakash Gaba, Technical Analyst

Tuesday, 23 September 2008

Buy: Federal Bank

CMP: Rs 219.60
Target: Rs 242 (Short term target)
Recommended By: Hindu BusinessLine
Reason: Technical Analysis

Buy: Havells India

CMP: Rs 300
Target: Rs 450
Recommended By: KIM ENG Securities
Reasons: stock is down 60% year to date; Business growing at 20%; year and next year of about 20% of growth

Tech Stocks

Technical Analyst, Rajat K Bose is of the view that Technology stocks are suggesting more weakness ahead.
Bose told CNBC-TV18, "Technology stocks are suggesting more weakness ahead, especially if you look at TCS and Wipro. They are suggesting that more downside perhaps would be there going forward and TCS falling below Rs 715-710 range could mean that another 40-50-point cut in the short-term is likely. Only some amount of strength is still there in Infosys of course firstly the strength will evaporate, if Rs 1,500 were to be broken." He further added, "Satyam, I would say that as of now you can only hope that Rs 324-320 level holds, if it doesn’t then it will also experience quite a deep cut."

Source: MoneyControl

Sugar Stocks

Rajat K Bose, Technical Analyst, has said that one can buy Sugar stocks at lower levels with a medium term perspective.

Don’t buy on dips, stay cautious: Sajiv Dhawan

It was another day of weakness on Dalal Street. The indices were bogged down by stocks in IT, realty, and banking getting battered and finally closing near the day's lows. The Nifty closed at 4,127 down 96 points, while the Sensex shut shop at 13,570 down 425 points.

Sajiv Dhawan of JV Capital Services said this is not time to be aggressive and start buying the index as a contrarian call. "You need to see where this market is going to breakout. That means at least a 100-150 points on the upside. There is no point trying to trade the Nifty for just 20-30 points, that’s too tricky for most traders at the moment."
He feels investors should remain cautious and sit on the sidelines rather than buying this dip. "We have been advising clients for the last several weeks that 4,500-4,600 was the cap for the market, there is no reason for it to go above that. We had that good bounce back to 4,300, but have seen a lack of follow-up buying. The markets are still very concerned because the situation in the US is very fluid. It’s very difficult to call whether it’s going to hit 4,300 or 3,800 first. But any investor who comes in at 3,800-4,000 levels can hold on for three-six months and will see decent upsides. But timing in short-term is very tricky."

Source: MoneyControl

Market Volatile

Dhiraj Agarwal, Independent Market Analyst, feels the markets will continue to remain fairly volatile with significant amount of downward pressure. "The market will continue to remain fairly volatile with significant amount of downward pressure. We will continue to see very large single day moves, which is not very healthy. This volatility needs to tone down for any meaningful recovery to happen. I won't rule out a retest of previous lows from which we bounced back because of liquidity and sentiment at this point of time. I don't think there is too much downside from a valuation perspective, but there could be some more hammering down from flows or sentiment perspective."

He sees about 3,800-3,900 on the lower side and about 4,500 on the upper side as the current range for the Nifty. "It is impossible to say whether we break through 3,800 or not, but even if we do, we will go down to significant new lows. I don't think the range will persist through the year. The range will break on one side or the other as we go towards the end of the year. After chopping around a couple of times in this range, it will probably break-up towards the end of this year in a strong bear market rally. Such high volatility after a deep cut or a strong rally is usually a sign of a trend reversal. However, we see a number of bouts of ups and down before the trend reversal finally sets in. "

Source: MoneyControl

Goldman Sachs and Morgan Stanley loss is IT's gain!!

When Goldman Sachs and Morgan Stanley gave up their independent investment banking status, it gave reason for Indian IT vendors to smile. For, more regulations, as a commercial bank, could mean more business for software service providers. While the collapse of the other investment banks in the past few months sent jitters among the software vendors in India, government control of Goldman Sachs and Morgan Stanley gave the Indian IT some reasons to cheer. Because, morphing into a full-fledged bank not only implies greater access to funds but also more regulation. And tighter regulation could mean tweaking their existing technology by adding more software and processes. They would have to adopt systems in areas such as retail banking, consumer banking, cards and corporate banking.

Source: Economic Times

Stocks to buy

CMP: Rs 721
Target Price: Rs 938
Recommended By: Citigroup Global Markets
Reasons: Small acquisitions and the buyout of a majority stake in Pharma Dynamics of South Africa
Rating: Medium risk

Opto Circuits
CMP: Rs 287.25
Target Price: Rs 463
Recommended By: Kotak Securities
Reasons: Strong market positioning, potential introduction of new products, front end R&D set up (with the Criticare acquisition) and strong management.
Rating: Low risk

Monday, 22 September 2008

JP Associates

Technical Analyst, Ashwani Gujral is of the view that should sell JP Associates on rallies.
Gujral told CNBC-TV18, "JP Associates has been a weak stock, made new lows. It has support at Rs 118. It needs to get past Rs 153 to gain any sort of strength. Again it’s a sell on rallies."


CMP 352
Technical Analyst, Ashwani Gujral is of the view that Satyam Computer Services can test Rs 420 levels.

MIC Electronics

E Mathew has given a short term target of Rs 130-135 for MIC Electronics with a stop loss of Rs 92-95. The CMP of this stock is Rs 105. Expected gain 30% from the current levels.


VP of PMS at Centrum Broking Mr Mehraboon Irani is of the view that investors can buy HDFC Bank, HDFC and Yes Bank at lower level. He said "The names which stand out are HDFC Bank, the HDFC or the Yes Bank those type of banks where irrespective of the overall situation as far as credit crisis goes in the world, I feel if these banks come down for any reason as to what is going to happen as far as global events go if they come down sharply investors should just go ahead and buy, I am sure they will be rewarded."

Bigger bull run yet to come: Rakesh Jhunjhunwala

Here is a verbatim transcript of Investor and Trader, Rakesh Jhunjhunwala's exclusive interview with Mitali Mukherjee on CNBC TV18's Wealth Creators show.

Rakesh Jhunjhunwala is India's most successful investors; one of the stock market's most successful stories. The sometimes maverick, often mercurial but always a respected voice. He is a wealth creator and a man who anyone who enters the stock market wants to be.

Q: You are the first Individual Wealth Creator we are chronicling. I am curious to know, what does the term mean to you?

A: I don't know when I started on in life, I had some ambitions. My parents never liked the idea that I should go to the stock market. I started life financially with just USD 100 or only Rs 5000 and my first thought was that when I went to the markets, I had just come from Chartered Accountancy; used to earn Rs 150 a month. So my first concept in life was that I should be financially independent. I never started with the idea that I will be a great wealth creator and I will have some great wealth or anybody will know me. I thought I must be able to earn my daily bread. I loved the markets. I thought India was in a very initial stage and this would be one of the places which will develop and the opportunity would be huge.

Q: Do you also find it odious sometimes because you are a wealth creator in your own right and I don't think you have taken on the mantle of leading a lot of people with you. But you get that. A stock that you would pick up will be picked up by others. They would want to know why Rakesh bought it - why he is buying so much or why he wants to buy more?

A: I think these are all misconceptions. When you buy stocks, you should be ensured that other people will buy stocks. Then only you should buy the stocks. I have a different concept in life. If a stock is beautiful, the suitor will come. If a girl is beautiful a suitor will come. If a stock is beautiful, a suitor will come. So I don't search for suitors when I buy the stock.

Q: Tell me where you have to be the most patient with the market?

A: I think my greatest patience with the market was in 2001 September to April 2003. That was because I was a lone bull. I wrote an article in the Economic Times in June 2002 that India is on the threshold of a structural secular bull market and people said, he has bought stocks and he is caught and now he is asking us also to come into the cage. People didn't just believe what I thought or what my opinion was. That was a testing period.

Q: Did it bring confidence down to its knees for you?

A: You have your conviction and I always staked what I could afford. So say, when markets went down in August 2002, I had no problems there. In spite of my opinion, I did not stake so much that if markets did not go up in the manner that I thought, I would be on the roads. I was well-off absolutely. So you know it was a trying time. But then there was a great dividend; the kind of bull market we had - 3000 to 21000.

Q: And you really rode it didn't you? There are so many terms people use about you - The young tiger, pin up boy of the bull market, India's Warren Buffet. Do you find it pointless? Do you find it flattering? How do you take it?

A: I don't know. I have learnt two things about the press and wives. When they something – don't react.

Q: Are you the same guy that you were? Are you the same guy you were 15-years back?

A: Why are you asking me? Ask my friends, if I have changed in any way.

Peer View:

N Jayakumar, CEO, Prime Securitie says, "As earthy as it comes, he is as raw as it can be and he is as direct as it can hurt. He is all of this and I think at the end of the day it is not because he is a wealth creator, he is all of this, but he has been that since the time I have known him and he has just remained much of the same."

Q: Is It tough to be tight with people from the same community - the stock markets? Can you be close to some one who is part of the same?

A: I am close to a lot of people from the stock market. Actually, my best friend and whom I consider my guru, Mr. Radhakrishna Damani - he is from the stock market. Actually he has taught me so much in life and we are the best of friends. We can discuss anything. We go on holidays together. We've done so many things together and my other friends - they are from the stock market. Also let me not pretend. I don't have much interest in life other than the stock market.

Did you know:

The name of Rakesh's organisation is actually a combination of his initials and his wife's initials. So, Rakesh plus Rekha equals RARE Enterprises. As Rakesh says, she is the only one he likes being answerable to.

Peer View:

Samir Arora, Helios Capital says, " I am very impressed with Rakesh not because he has done so well in the stock market which itself is very impressive but to have done that without raising any controversy, without creating enemies, which is a problem in India for successful people."

Q: You are very much into the individual behind the business. Who runs it and how well it is run. Tell me how carefully you look at that when you look at a business that you wanted to be a part of?

A: I look at the situation. I look at the possible outcomes and then I think what could be the outcome? For example, when I invested in Titan, my thinking was, can Titan become India's largest specialist retailer? That was the question I asked myself. Will it always occupy a 50-60% share in branded jewellery? Will it always remain a leader in Indian watch industry? Will it enter into other areas of retailing? I asked myself all these questions and the answer I thought was yes.

So this is the basic analysis I did. Then I went to the office - Titan office was like a young advertising agency. So I thought marketing is in their blood. I met their management team including their Managing Director. I was thoroughly impressed by them. I took the decision. I put my life behind it.

Q: What impressed you?

A: Their sheer approach. The Managing Director told me that the task is difficult. But we'll overcome it. We have to suck the capital and increase the profits and that's what they have done. So, when I take a decision there are three-four matters that I consider - opportunity. I am from the investment thought which says nobody can be bigger than the opportunity. Second, I look at the competitive ability. In a capitalist society, you cannot deliver product and make a profit unless you do it in a competitive manner and competitive does not mean the most expensive. Then I look at scalability. Scalability is very important. When I invested in Pantaloons, the biggest idea was can ten stores become five-hundred? It was written behind a Maruti -- when I grow will I be a Mercedes? Great are the challenges of scalability.

Then what I look at is valuation. It's important what you buy. It is more important what price you buy. Somebody bought Hindustan Lever at an Index of 2900 - the price was Rs 320. When the Index was 7000 - the price was Rs 145. You bought Hindustan Lever - best quality company, best pedigree and everything and I made lot of money by buying United Breweries and McDowell's at a valuation of Rs 200 crore. There was no corporate governance. People told you you're down the drain. I made five-times my money in two-years.

Q: Sometimes there are tough lessons to learn as well? Just on the subject of valuations, you would be watching the media space and there are a couple of howlers over there by way of stock performance, for example, MiD DAY (Multimedia) - have there been more tough lessons to learn?

A: Every mistake teaches you a lesson. There is always a risk in investing in midcap stocks because if they succeed, the gains are huge. If they don't succeed and scalability does not come, then the losses are also huge. I don't regret having invested in MiD DAY because I always allocate my assets and I don't do it in a planned manner. I don't put more than a certain percentage of my wealth in incomplete situations. So, I might have made a mistake. The decision is tough, but okay, the good comes with the bad.

Peer View:

Atul Suri, Rare Enterprise says,"I have known Rakeshji for over five-years and I have traded on his behalf. I use technical analyses but not once has he interfered in a single trade of mine and that is very special. For a very accomplished trader to see a different approach in trading and not interfere with him and that really comes from the basic thing I have noticed in him is that he respects other disciplines also to the markets."

Q: You're very patient, though?

A: What is the choice?

Q: The choice is to book out.

A: Well, its not that I'm not booking out because I'm afraid to take a loss. I'm not booking out because I still think there is reason to believe that things can change.

Q: Were you surprised Rakesh - could anybody have seen where we are right now in January this year?

A: I have made presentations to show in October, that this is going to be an unprecedented fall. And I have reasoned out how much is the lending to subprime, and that this problem cannot be stopped by reducing interest rates. The American bull market has come to an end. It may be a long correction.

I've made these presentations in writing. I have them on record. I don't say I foresaw the failure of any particular organisation but I thought it'll be very tough and I didn't rule out in my mind that some organisations can fail.

Q: Is there any question in your mind that we as well are in a bear market?

A: In India?

Q: Yes.

A: What is a bear market, what is a bull market, I don't know. Numerically - surely, since we have broken the last lows that we had in August 2007, we'll have to term it as a bear market. But I don't think the long-term Indian stock bull market has ended. I think it's in interruption mode.

This bull market is based on two factors. One is economic growth of India, which I think is based on factors that are irreversible, whether democracy, whether skills, whether demographics, whether cultural factors. They are irreversible. I think India's economic growth will always trend upwards.

Then it is based on the platforms that we have created to attract money into the Indian markets -- the trading strategies, the regulation and the under-exposure of Indians to equity. I will surely say that it's an interruption. How long? Nobody knows.

Q: You've been cautious, though, Rakesh, right till since last Samvat you've been striking a cautious note?

A: If the Index instead of going from 3,000 to 21,000 had gone from 3,000 to 13,000, and then back to 11,000 - would that not have been a bull market? Then it would have been termed a bull market correction. So at levels, where you saw the participation, the valuations, you saw what was coming in the Western world, you saw the sheer corporate greed in India; you saw the senselessness with which people in India just wanted to buy anything. They were all indicators - so what is wrong in being cautious?

Q: Are you feeling better about all those indicators? Do you think things have cooled down now?

A: I think now we've begun to reverse slowly. Now things will be overdone but that's the way markets are. As I told you, markets are like the weather. Whether you like it or not, you have to bear it.

Q: There is courage of conviction as well, to be a wealth creator? If someone were to sit you down and ask you, do you think that over the next five years, Indian equities is still the place where you'll see the most significant wealth creation, would you say yes?

A: I would think so, as far as Indian assets are concerned. I don't have much knowledge about global assets. My good friend Mr. Shankar Sharma has said, equity has one quality - it is always an asset which trends upwards. India will remain in a phase of very good economic growth for the next 30 years.

Q: Do you feel we will have to be a lot more patient with it though, this time around?

A: As I told you markets are like women, you have to be patient.

Q: No, but you know we've had a fantastic run. We've had the mother of all bull runs in the past three years.

A: I disagree with you.

Q: You do?

A: The mother of bull runs is still to come

Q: Really?

A: In my opinion, yes. But it could start after one-year. It could start after eighteen-months or after six-months. But the next high and the next bull market will be far bigger and have far more participation and far more excesses than we had in the last one-year.

Peer View:

Ramesh Damani, Member, BSE says, "He is so free with his information. He will willingly share with you his ideas. He will willingly share with you his investment style or his thought processes with the market and there is almost leisurely number of young men or Turtles as we call them on the street who've benefited enormously and handsomely from his advice including myself. Earlier in my career he really helped open my eyes, showed me how to dream and allowed me how to take position with the market. So above all, we respect that – the ability to share that information in a business that is so secretive - he is an open book, always willing to help."Q: Do you see a lot of people who are part of the stock market, returning back some of the wealth creation? I know that you have a Jhunjhunwala Foundation. You're actually actively part of a lot of NGOs and you donate significantly amounts over there. Is that an important part of being a wealth creator for you - to spread it as well?A: I cannot forget my late father, who has never asked me ever that what is your wealth? The only thing that he would ask is how much charity have you done this year, and are you going to continue it or not? So, I'm making my own efforts towards some good social cause that I'm supporting. I've built a Home for 400 boys in New Bombay. God has given me one daughter and I'm going up 400 children. I cannot give them absolutely what I've given my daughter but I'll send them to English medium schools. I'll see that they have all the needs of life and I want to bring them to a stage where they can get good jobs and they can contribute back to the Home.I think the greatest wealth is giving the person ability to learn. Then I'm supporting lots of causes with children like girls' education. I'm supporting other small causes for street children. We're building a temple in Lonavala. It is my target in life. This year by budget is Rs 10 crore, next year it should be Rs 12.5 crore and on my twenty-fifth wedding anniversary, which is on February 21, 2012, the gift I want to give my wife is - I'm going to give Rs 500 crore to her foundation.Q: Is this a bigger high than being part of the stock market?A: I don't think it is a high. It is a duty. To donate and to help others are very good attributes.

Urmila Jhunjhunwala, Rakesh Jhunjhunwala's Mother says," When he was a little boy, whenever our friends used to come, he used to tell them which shares are good to buy.

Rekha Jhunjhunwala, Rakesh Jhunjhunwala's Wife, says, "I think the market is only first priority for him. His first wife is only market. When he started, he had nothing, absolutely nothing. Everyone used to say, what will you do in stock market? But he wanted to do that only."

Q: What's your biggest faith?

A: Myself. I am confident of myself and I don't rely on anybody.

Q: What's the big dream for Rakesh Jhunjhunwala - the wealth creator because we have had entrepreneurs who say I want my business to go to XYZ level, I want my turnover to double, triple, four-times?

A: I have two-three dreams in life. The first dream is that when I die and only truth of life is death, how many people come to my funeral and say, a good man has died. That is the greatest ambition in my life. Second thing is I want to earn the greatest wealth of the world in the most legitimate manner; practical legitimate manner and leave the largest part of it to charity.

Rapid Fire:

Q: Favourite trade – long or short?

A: Long.

Q: Rank the following companies on a scale of 1 to 10:

Q: Reliance.

A: I would rank it 2.

Q: Infosys

A: 1.


A: 9.

Q: Titan.

A: 8.

Q: Answer the following questions with just bullish or bearish:

Q: Crude.

A: Bearish.

Q: Gold.

A: Neutral.

Q: The S&P 500.

A: Bearish.

Q: The Indian bond market.

A: I expect the yields to go down. I am bullish on the bond market.

Q: The Nifty 50

A: I am bullish.

Q: If you weren't a man of the market, what would you be?

A: I never think about it because being man of the market is so good and exciting.

Q: The worst advice someone has ever given you about the market.

A: You can never earn money in the market. You will go bankrupt.

Q: And the best advice someone has ever given you about the market.

A: Be careful. Be responsible. It's fire.

Q: You have told me what you want to be remembered as. But what's the one piece of advice you would give someone who wants to get into the stock market?

A: First advice is respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible.

Buy Pantaloon Retail

At its CMP of Rs 310 Morgan Stanley advices its investors to accumulate Pantaloon Retail. The stock is trading at 14x FY09E earnings, adjusting for value of its subsidiaries Future Capital, Home Solutions, Future Media and Future Bazaar. Morgan Stanley expects Pantaloon to deliver an EPS CAGR of 56% for the next five years.

Sunday, 21 September 2008

GMR Infrastructure: Hold

I advice the investors to hold the stock with a long term perspective. Though the company has big projects including power projects in the pipeline, such projects have long gestation period.: Ashish Kapur: CEO: Invest Shoppe

72K cr gain in a week!

Shares of over 340 companies including blue chips like Reliance Industries, ONGC and Bharti braved the global financial crisis and gained Rs 72,000 crore in market valuation in the past week.

Interestingly, banking stocks including HDFC Bank, Kotak Mahindra Bank, Punjab National Bank, Yes Bank, Axis Bank, Bank of Baroda and Oriental Bank also saw their market valuations swell up.

Surprisingly, country's largest private sector housing finance company HDFC gained over Rs 3,000 crore in marketcap in the past five trading sessions. Its marketcap stood at Rs 65,613 crore on Friday last week as against Rs 61, 934 crore at the end of previous week.


HDFC Securities has given a Buy rating for Nestle from a medium term perspective. CMP of this stock is Rs 91.

ICICI on recovery

ICICI had lost almost 22% in the last seven sessions on fear of over exposure to the foreign markets and that it could be adversely hit by the current crisis. On Friday it made an assurance that it has made all disclosures of its foreign investments. On back of Friday’s rally the share recovered almost 10%.

The stock closed 9.07 per cent higher at Rs 628.10, off the day’s high of Rs 635.

Asian Stock markets a happy lot

Monday has come as good news as Asian share prices soared in early trade on the back on news of US government’s mammoth rescue plan for the battered financial sector. Highlight is the move by the US Treasury to ask Congress for authority to spend 700 billion dollars to buy bad mortgage-related assets from financial institutions. This has in some marginal way returned the investor’s confidence back into the markets.

Japanese shares were up 1.98 per cent in morning trade and Australia's market jumped 3.5 per cent, with financial stocks leading the charge. New Zealand rose 2.47 per cent by mid-afternoon. Chinese prices opened up more than eight per cent, Hong Kong rose 2.8 per cent, Singapore was up 1.03 per cent and South Korea's KOSPI index gained 1.62 per cent.

Saturday, 20 September 2008

IT all began with the sub-prime crisis.

If you lost your money in the market crash of January 2008, here's the route to your loss, in chronological order.

2001-2005: House prices in the US begin to rise rapidly. Banks lend aggressively and create a subprime industry.
Sub-prime lending refers to lending (at slightly higher interest rates) to people who may not be eligible for a loan under normal circumstances. Maybe they don't have a regular job or income, or have defaulted in the past.
Banks traditionally did not lend to such people due to high risk of default. But since these loans were mortgaged against property and property prices were rising continuously, banks started doing so. If customers defaulted, they good sell the mortgaged property.

2005: The booming housing market halted abruptly in many parts of the US.

2006: Prices are flat, home sales fall.

February 2007: Sub-prime industry collapses in the US; more than 25 sub-prime lenders declare bankruptcy, announce significant losses, or put themselves up for sale.
While they were lending, banks did not factor in the possibility of a fall in property prices. When the Federal Bank (the US equivalent of RBI) started increasing interest rates, the sub-prime borrowers started defaulting and banks started selling off the mortgaged properties. As more and more properties came into the market for selling, the property prices fell.

August 2007: Many leading mortgage lenders in the US filed for bankruptcy

March 2008: Bear Sterns falls.

September 2008: Lehman Brothers file for bankruptcy. Merrill Lynch sells off to Bank of America.

Between 2001 and 2006, the US financial markets had developed a new product - a bond securitised against the mortgages.
In simple terms it means that the mortgage banks borrowed money against the mortgages on the condition that they would repay to lenders as soon as they recovered their mortgages. The lenders in this case were financial institutions (like Bear Sterns, Lehman and Merrill Lynch) who in turn sold retail bonds to individuals.
Sadly, the repayment never happened. And institutions like Bear Sterns, Lehman, Merrill Lynch and AIG were the casualties. Since the mortgages were not honoured, the banks could not repay these financial institutions who in turn could not repay retail investors

ICICI Bank can rally upto Rs 625-630: Gujral

Technical Analyst, Ashwani Gujral is of the view that ICICI Bank can rally upto Rs 625-630.
Gujral told CNBC-TV18, "ICICI Bank hits a key support zone between Rs 500-550. The stock when it falls 10% on rumours of management selling, that is probably a good time to buy into that. It was at Rs 700 just seven days back. So, I think you could see a rally right up to Rs 625-630."
He further added, "Ranbaxy has seen a lot of bad news. Even Rs 350-360 is a good level from a medium-term perspective. It will take some time to recover. But you could get resistance around Rs 425-430."


Above Rs 400, ICSA has target of Rs 900: Agarwal

Sanjeev Agarwal of Globe Capital Market is of the view that above Rs 400, ICSA has target of Rs 900.
Agarwal told CNBC-TV18, "ICSA India is a good company; fundamentally it is in a right space. They are providing solutions to the electricity boards and they are in the power space. So a lot of reforms are getting in and all these electricity boards require these kinds of expertise, which opens up a huge market for this particular company."
He further added, "Technically this company has been outperforming and it has a sideways kind of a structure. Right now we are seeing a range between Rs 200 and Rs 400. Once it crosses Rs 400, we are looking at a target of somewhere around Rs 900 for that. So this seems to be an extremely bullish pattern, which is unfolding. The breakout of that is somewhere around Rs 395-400." Disclosure: Analyst doesn't hold the above stock but have recommended it to the clients.


Shiv Vani Oil has target of Rs 725: Gumashta

Abhishek Gumashta, Research Analyst of Sharekhan is of the view that Shiv Vani Oil & Gas Exploration Services has target of Rs 725.


Accumulate banking stocks: Choksey

According to Deven Choksey of KR Choksey Securities in falling market banking should be accumulated.
Choksey told CNBC-TV18, "For me I think bank is a good holding into the portfolio, so as far as the investment is concerned there is no question of looking back into the banking stocks. You would have such kind of jerks coming in because of what has happened to ICICI Bank but market has probably overdone most of the time in such kind of situation. Even in case of ICICI Bank, if one looks at it, I think if one has to factor the full Mark to Market (MTM) provision for whatever outstanding that they have into the overseas market, including Lehman's outstanding position, then I think also the maximum amount of loss per share for ICICI would be not more than Rs 8/share."
He further added, "If you see the loss of market capitalisation it is something very substantial. So I would say that in such situation, given the kind of merits with the banks like ICICI, I would venture into some kind of a buying at lower levels and not sell my portfolio, which I am holding into the baking stock particularly with the PSU banking stock like State Bank of India. So my position is very clear in falling market banking should be accumulated."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.


Buy ICICI Bank on dips: E Mathew

Technical Analyst, E Mathew is of the view that one should buy ICICI Bank on dips.
E Mathew told CNBC-TV18, "At a cursory glance, ICICI Bank just looks like a squeeze but I should say chaotically there is still quite a long way to go though it has been a magnificent move up today. I think, it could be a buy on dips strategy now for ICICI Bank and an important bottom has been made in place. If one has got a heart especially if one could get the stock somewhere round about Rs 590-595 zone, this stock could provide great opportunity not only for traders but as well as investors. The target for this move is surely somewhere round about Rs 685-700 zone."
Disclosure: It is safe to assume that analyst & his clients may have an investment interest in the stocks/sectors discussed.


Bannari Amman Sugars: Buy

The sugar cycle is on the verge of an upturn, with the sharp contraction in sugarcane acreage pointing to lower sugar output and tighter supply over the next couple of years. With sugar prices already beginning their ascent, producers can look forward to a sharp improvement in realisations and profitability over the next couple of years.
The stock of Bannari Amman Sugars (Rs.824), offers a good investment opportunity for those looking to take advantage of the likely earnings momentum in the sugar sector. Facilities located mainly in Karnataka and Tamil Nadu and a history of good relations with farmers ensure that Bannari Amman Sugars enjoys access to adequate quantities of cane even in a deficit year.
Hindu BusinessLine

Shree Cement: Buy

Hindu BusinessLine have put a buy rating on Shree Cement. The sharp de-rating of cement stocks, due to concerns about limited pricing power, has trimmed valuations for producers such as Shree Cement.
Investors who bought the stock on our earlier recommendation should hold on, given the prospect of upside linked to better valuations. The stock can be accumulated by investors willing to hold on for a 3-year time frame.

PINC puts 'buy' on Everest Kanto for target Rs 385

MUMBAI: PINC Research has initiated ‘buy’ on Everest Kanto Cylinder for a target price of Rs 385. The company is a leading manufacturer of high pressure seamless cylinders for both industrial and compressed natural gas (CNG) uses. Besides serving domestic market, it also exports to countries across S.Asia, M.East and CIS.

Economic Times

IT stocks could be preferred investors' choice: analysts

MUMBAI: IT stocks could be the preferred investors' choice due to rupee depreciation and hopes of improvement in global market sentiment after the intervention of the US Federal Reserve for rescuing insurance giant AIG, according to market analysts. The persistent global financial turmoil is likely to ease following prompt efforts by the US government. And coupled with rupee’s weakness against the greenback, this can be seen as a positive trigger for IT stocks as the sector's revenue visibility is expected to improve, HDFC Securities, Head Retail Research, Deepak Jasani said. “The US financial crisis may be coming to end temporarily and sales orders would be visible for the IT companies in the near future,” he said. A weaker rupee would also help the sector earn more margins on their future orders, Jasani added. Echoing similar sentiments, an analyst with a leading broking house said this is the right time to enter the market and IT sector could be one of the better options as yields are more or less based on company profile in the current scenario. However, SBI Capital Securities’ Head of Research, Anil Advani, said, "Market is yet to come out of the adverse global financial crisis but the companies having less exposure can be a better option for the investors." Most of the IT stocks, on Wednesday, surged during the day on fresh buying, despite a down trend in the market, after a sharp fall in rupee and reports of softening credit crisis. Early buying also emerged in the tech counters on hopes that a weaker rupee would help the sector regain some of the lost sheen. IT sectoral index on BSE was one of the least affected indices that ended with a marginal negative gap. However, it moved up over 2 per cent in the afternoon and most of the IT stocks traded with a comfortable positive gap for most of the time during the session. Wipro was the top gainer ending up 2.04 per cent at Rs 399.75. Infosys Technologies ended up 0.75 per cent at Rs 1576.00, after moving up 3.6 per cent at Rs 1,612.10. However, Satyam Computer Services closed 1.91 per cent down and TCS down by 2.77 per cent. Continuous depreciation of rupee, to nearly 47.00 level on Tuesday, has raised hopes of improvement in IT stocks, which were hit badly in the last couple of years when the Indian unit kept on appreciating, according to market analysts. The partially convertible Indian currency fell to 46.98 against the dollar--its weakest level since July 24, 2006, on increasing demand from banks earning arbitrage between domestic and offshore markets amidst fluctuating sentiments in the stock market. Sustained high demand from oil companies and the banks indulged in non-deliverable forward contracts resulted in a sharp depreciation of rupee against the greenback this year due persisting global financial crisis but has raised hopes for companies much dependent on rupee movement, marketmen observed.
Economic Times

US rescue plan seeks $700 bn to buy bad mortgages

WASHINGTON: The Bush administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained on Saturday by a news agency. The plan would give the government broad power to buy the bad debt of any US financial institution for the next two years. It would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. The proposal does not specify what the government would get in return from financial companies for the federal assistance. "We're going to work with Congress to get a bill done quickly," President Bush said at the White House. Without discussing details of the plan, he said, "This is a big package because it was a big problem." The White House and congressional leaders hoped the developing legislation could pass as early as next week. Administration officials and members of Congress were to negotiate throughout the weekend. The plan is designed to let faltering financial institutions unload their bad debt on the government, and in turn the taxpayer, in a bid to avoid dire economic consequences.

Economic times

Comeback, and How!

The market rallied sharply, up 726 points, to close marginally above the 14,000 mark due to sharp appreciation in realty and information technology stocks.

After a subdued trend in the last few sessions, the market staged a solid comeback today. The bulls were back in action after closing flat yesterday.
Taking lead from buoyant international markets, the Sensex started the day at 13,764 (448 points above its previous close) on the back of strong buying in heavyweights, realty, information technology, Teck, oil & gas, power and banking stocks. At its day's high of 14,097 by afternoon, the Sensex closed the session 727 points higher at 14,042 and Nifty advanced 207 points to close at 4,245.
The market breadth was highly positive, Of the 2,700 stocks traded on the BSE, where 1,888 stocks advanced only 740 stocks declined. 72 stocks ended unchanged. All the sectoral indices notched up significant gains. BSE Realty index was the biggest gainer and soared 7.59% followed by BSE IT index (up 6.67%), BSE Teck index (up 5.86%), BSE Oil & Gas index (up 5.52%), BSE Power index (up 5.16%), BSE Bankex (up 5.03%) and the BSE CD index (up 4.72%).
Barring few, all the stocks in the Sensex basket ended at higher levels. Satyam Computer Services led the upsurge and flared 10.48% at Rs370.10. Among the other major gainers ICICI Bank surged 9.07% at Rs628.10, HDFC Bank moved up by 8.32% at Rs2308.45 and Tata Power advanced 8.30% at Rs1,027.30. DLF vaulted 7.78% at Rs426.90, ONGC shot up by 7.30% at Rs1072.10, Infosys Technologies added 6.59% at Rs1,623.85 and Tata Consultancy Services rose 6.37% at Rs766. However, HDFC Bank, BHEL, Reliance Industries, Jaiprakash Associates and Reliance Communications ended with gains of over 4-5% each.
Realty stocks were the stars of the day. Ansal Properties & Infrastruture soared 18.36% at Rs89.95, Indiabulls Realestate jumped 17% at Rs224.05, Akruti City added 11.52% at Rs908.20 and Peninsula Land gained 5.65% at Rs50.50.
Over 1.48 crore JP Associates shares changed hands on the BSE followed by Reliance Natural Resources (1.33 crore shares), IFCI (1.27 crore shares), Sesa Goa (1.12 crore shares) and Kohinoor Broadcasting Corporation (0.75 crore shares).

- Sharekhan

Friday, 19 September 2008

Stock Tip: Indian Overseas Bank

Hindu Business Line have given a buy on Indian Overseas Bank from a short-term trading perspective. They have given a stop loss of 104 with a target of Rs 122. CMP is Rs 110.45.


Part – A: The Lehman Story

The deepening upheaval on Wall Street has been creating ripples throughout New York.
The fall of Lehman Brothers which headed for the biggest ever bankruptcy filing ever, sale of its
competitor Merrill Lynch & Co Inc in a $50 bn stock deal to Bank of America and the efforts of
insurer American International Group all headquartered in Manhattan definitely shook up the
Global economy.

Indian Government says:

The Government of India seems to be putting up a brave face. The government believes the
bankruptcy filing by America’s fourth largest investment bank will not impact India directly. India
has been more or less insulated from the sub prime crisis in the past and prima facie, the crisis in
the US may not have any impact on India.
The details in developments would have to be watched however. Bankruptcy experts pointed that
Western investment companies might be forced to sell off their assets in India at throwaway prices.

Our Outlook:

• Cost to Indian real estate could be dear given Lehman’s existing investments worth $500
mn in realty firms especially for firms which haven’t received funds yet from Lehman.
• Signals of a deepening credit crisis for Indian developers should be watched.
• Any distress sale by Lehman will impact valuation of existing realty projects.
• IT companies might find financial clients’ appetite for considering “transformational”
change in their business models practically gone.
• The shift to quality from cost could get hastened.
• Large Indian IT firms might include innovative products from smaller IT firms under their

Part-B: Losing sleep over the Rupee

The rupee which has in the recent months been battered to almost 47/US $ and the call money
rates spiking at 16%, triggered the RBI to come up with a slew of measures last evening to stanch
market instability. Comparisons with the 1997 Asian Financial Crisis seem to be springing up.

Our View:

Forex reserves with RBI seem reassuringly large at $288.81 billion week ended 5 September.
We say this because; we considered the following areas which are inherent to decide comfort
levels in Forex and we did get positive vibes:
a) Do we have enough forex to maintain stability in times of global turmoil?
b) How many months of imports can be bought with our forex?
c) Does forex exceed the foreign debt levels and are they larger than money

We think India looks safe.

However our concerns are as follows:

• Our dependence on volatile capital inflows to finance current account deficits puts us in a
highly risky situation. This is part of deeper alterations in our balance of payments.
• Foreign institutional investors (FIIs) have already sold close to $8 billion of Indian equities
this year, and it is quite likely that there will be further selling in the weeks ahead if the
global financial system slips into deeper trouble.
• The rupee has already dropped

Till now the focus was on oil and inflationary pressures but we think there could be growing
pressure on the Indian economy and RBI may have to use more of its reserves to protect the rupee.

From the Economist’s Desk
UTI Mutual Funds

Thursday, 18 September 2008

Post Market Report - September 18, 2008


An across-the-board rally saw the market bounce back sharply from its early losses of more than 700 points to end 52 points higher.
Today the market saw a smart rally despite weakness in global markets. Despite slipping over 700 points in early trades, the Sensex witnessed a relief rally led by across-the-spectrum buying.

The index recovered from its lows and closed posstive, as value buying emerged at lower levels. The Sensex received major support from banking, oil & gas and power stocks. The market gathered steam towards the close and the Sensex crossed the mark of 13,300 and touched the day's high of 13,347 before closing at 13,263, up 53 points. The Nifty too bounced back sharply and advanced 30 points to close at 4,038.

The breadth of the market was extremely negative, as of the 2,690 stocks traded on the BSE, where only 676 stocks advanced, 1,944 stocks declines. 70 stocks ended unchanged. Most of the sectoral indices closed with significant gains. The BSE Bankex was the major gainer and soared 2.68% followed by the BSE Oil & Gas index (up 2.36%) and the BSE CG index (up 0.95%). However, the BSE Realty and BSE CD index slipped over 4% each. The BSE IT index, BSE Teck index, BSE HC index and the BSE Metal index closed with marginal losses.Attracting strong buying support, Sterlite Industries surged by 3.43% at Rs454.50, HDFC Bank shot up by 3.17% at Rs1,222, Reliance Industries jumped by 3.16% at Rs1,932.85, NTPC advanced by 3.05% at Rs174, ICICI Bank scaled up 2.78% at Rs575.85, Maruti Suzuki India zoomed 2.70% at Rs718.45, Mahindra & Mahindra added 2.46% at Rs550.55, Reliance Infrastructure vaulted by 2.43% at Rs849.60, ONGC firmed up by 2.14% at Rs999.15 and ACC climbed 2.02% at Rs601.35. Among the laggards, Ranbaxy Laboratories slipped 10.06% at Rs340.95, Jaiprakash Associates shed 6.73% at Rs127.40, Satyam Computer Services declined by 4.16% at Rs335, while Infosys Technologies, Tata Steel, DLF, Tata Power and HDFC fell 1-4% each.
Banking stocks witnessed sustained buying support. Indian Overseas Bank soared 7.49% at Rs110.45, Bank of Baroda added 5.80% at Rs327.35, Kotak Bank scaled up by 4.72% at Rs579.45 and Punjab National Bank gained 4.38% at Rs517. Over 1.97 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (1.34 crore shares), S Kumars (1.33 crore shares), KS Oils (1.20 crore shares) and Jaiprakash Associates (1.10 crore shares).

Movers & Shakers
Pratibha Industries lost despite receiving orders worth Rs156 crore from Delhi Jal Board.

- Sharekhan

Wednesday, 10 September 2008

Rising Dollar $$$$

The movement of Rupee is one among several factors affecting revenues of an IT company.

Rupee Vs Dollar the most visible parameter greatly influences the stock price movement in IT sector.

Dollar has reached an all time high of Rs 45.4 and this has once again created a buzz around IT stocks!!!

The stocks of major IT firms like TCS, Infosys, Satyam, Wipro etc have already gained a good margin.

This depreciation in Rupee might result into good Quarter results for IT firms.

Keep Investing!!

Monday, 8 September 2008

Rally may not last long

Ajay Bagga CEO, Lotus India AMC, said the underlying economics or fundamentals are still quite rocky.

“I don’t expect this rally to last too long. It is a relief rally globally, and could take us higher. The fundamentals need to be worked out and that will take time. The credit and liquidity contraction that is happening can’t be whished away and that will take time to go away.”

"We may see little sideways action in coming weeks before the markets actually forms newer lows. We will retain our bearish stance unless the market crosses 4,650. Currently, the market is seeing a bounceback from 3,800. So, one leg down is still left. In the last 10-15 days, there has been a lot of selling by FIIs. After a strong lull, we are seeing renewed vigour coming into selling. The markets are completely in favour of a bearish set up. Right now, one should be very careful about any longs. Safer players may look at buying puts and the more adventurous ones can go for selling Nifty shorts."

Friday, 5 September 2008

RPL to start production from new unit by Sep

Reliance Petroleum (RPL), a subsidiary of Reliance Industries (RIL), will likely start production from it`s new refinery by early September, reports Business Standard.

The company has already finished with the technical work on the refinery and has started testing the refinery. The company will test various quantities of crude oil by processing them into petroleum products, the entire testing will take around two months.

The company will increase production gradually before December to reach full capacity of 580,000 barrels per day.The 580,000-barrels-per-day refinery at Jamnagar in Gujarat is being commissioned at cost of Rs 270 billion and is world`s sixth largest refinery and is commissioned earlier than expected.

The stock is expected to grow steadily but will take pace in next 4 months target expected 250 in next 8-10 months

TTML launches `Instachat` voice conferencing service

Tata Teleservices (Maharashtra) (TTML) is partnering with Kodiak Networks, a provider of advanced wireless voice systems, to launch `Instachat` conferencing service to all its customers in Maharashtra and Goa.

TTML is the first CDMA operator in the world to offer this service which is accessible from any Tata Indicom post-paid handset. By dialing a single number, Tata Indicom subscribers will be able to simultaneously reach a group of up to 9 other telephone users.

The group calling application is aimed at large corporates, small and medium enterprises, community groups and families, wherever there is a need for instant, voice-based group communication.

The unique, revenue-enhancing voice application is enabled by the all-IP, standards-based Kodiak Real-time Exchange System

Buy Karuturi Networks

Religare research report has maintained buy rating on Karuturi Global with target price of Rs 35 in its June 19 report.
"International cut flower market valued at USD 64 billion; expected to grow at 10–12% CAGR. Roses command largest share of industry turnover at 70% with Europe being the biggest cut flower market, accounting for 50% of global consumption. Cut flower cultivation shifting to developing countries like Kenya, Ethiopia and India due to favourable cost and climate conditions.
Karuturi Global is the world's largest producer of roses, cultivating 585 million stems per annum. Boasts over a decade of experience in rose cultivation with operations in Ethiopia, Kenya and India. Strategic foothold in Ethiopia and Kenya would enable the company to cater to burgeoning demand from Europe and augment its global market share.
At the current level the stock is quoting at 7.4x and 5.5x its FY09E and FY10E earnings respectively. We have assigned the stock a P/E multiple of 8x as we expect a re-rating due to its premium positioning in the industry as well as its recent foray into food processing. We have a target price of Rs 35. Buy" according to Religare report.

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.