Tuesday, 4 November 2008

Mutual funds: A brewing scam?

The next (if not current) big story is the possible collapse of many Indian mutual funds. As usual, the victims are hapless retail investors.

Forget about equity funds, many of which are heading to extinction in the current stock market crash.

This is about fixed income MFs – the sort that are supposed to be risk-free, investing only in bank certificates of deposit and the best commercial paper. With the Government exempting income from MFs from tax, it seemed a better option than taxable bank deposits, for the same risk.

Little of repo-eligible assets

Thinking they only had liquidity problems but prime assets, the RBI innocently announced it would offer a repo line to MFs through banks. That was when the cat came out of the bag. The repo window drew bids of just a fraction of its size, clearly showing distressed MFs held little of repo-eligible assets - the bank CDs, which the RBI was willing to bridge finance.

It turns out that many liquid, money market and debt funds have put their money not in first class manufacturing companies with established businesses and credit histories but real estate ventures – creatures of the recent boom in the sector – with untested managements and stuck with plenty of unsaleable semi-finished projects. In present market conditions, they are obviously in no state to retire their liabilities to MFs.

How did they get there? On paper, the stricken MFs have invested only in ‘AAA’ paper. But the ‘AAA’ label is not what it used to be. Ask any credit rating agency.

Predictably, there are loud and powerful voices pleading, demanding a bailout.

The IBA too (strangely) has added its penny’s worth as has the ICICI Bank Chairman, Mr K.V. Kamath.

If this is agreed to, the RBI will, in effect, repo junk, toxic – whatever you call them – MF assets and may still have to be done for the nowadays familiar ‘systemic risk’ argument. Of course, it will be justified saying even the US Fed is doing it.

Considering what’s happened (whoever imagined debt funds could go belly up), it is fortunate that provident and pension fund reforms stalled. They propose investing in equities to improve returns.

We must thank our stars for the (much criticised) delay. Otherwise, we might have had the spectre of ‘hot shot’ fund managers losing in short order the life’s savings of millions of ordinary people in the market crash.

That would have been tens of thousands of crores of rupees bill for the Government.

Source: TheHinduBusinessLine

Aviation stocks soar on fuel price cut

Aviation stocks were flying high on Tuesday as the State-run oil retailers cut the price of aviation turbine fuel (ATF) for the second time in a week.

Indian Oil Corporation cut jet fuel prices by 17 per cent last week and again by another Rs 2,100 a kilolitre on Monday.

The price cuts came after the Government decision on Friday to abolish the five per cent customs or import duty on jet fuel.

The share price of Spicejet gained 4.83 per cent on Tuesday to close at Rs 13.46; Jet Airways climbed 6.23 per cent to close at Rs 203.65 and Kingfisher Airlines closed at Rs 35 gaining 3.55 per cent.

“The cut in fuel prices will result in a fall in the operating costs of the airline companies and therefore increase their profitability,” said an analyst with a stock broking firm.

According data available on the Indian Oil Corporation Web site, the ATF prices in Delhi, Kolkata, Mumbai and Chennai are now between Rs 44,965.7 and Rs 53,663.53 a kilolitre. This means an average decrease of 19.7 per cent from what they were a month back.

The price of ATF had increased almost 60 per cent between April and September.

Marketmen said that the benefits of the reduction in jet fuel prices will only be known over a period of time, though in the short-run this would give some lift to the dwindling bottom lines of the airline carriers.

In the past week, the shares of Spicejet and Kingfisher Airline surged 15 per cent while that of Jet Airways shot up 32 per cent.

Source: TheHinduBusinessLine

Day Trading Guide - November 5, 2008


In the last trading session, the stock breached the resistance level Rs 450. The outlook remains positive as long as the stock trades above Rs 445. We recommend a buy.


The stock declined 3 per cent with above average volume on Tuesday. The counter is witnessing selling pressure. We recommend a sell.


The stock surged in line with our expectation in the last trading session. Moreover, it crossed over the 21-day moving average, reinforcing bullishness. We reiterate our buy recommendation in this counter.


The near-term outlook is bullish for the stock. We retain our buy recommendation in ONGC.

Reliance Capital

We re-affirm our buy recommendation in this stock.

Reliance Communications

Fresh long-position can be initiated if the stock surpasses Rs 259 level, with tight stop-loss.

Reliance Industries

The stock is currently testing the resistance level of Rs 1,465. Buy the stock in dips with stop-loss at Rs 1,420.

Satyam Computer

The stock tumbled 7 per cent, penetrating the 21-day moving average accompanied with above average volume. We recommend a sell in this counter.


We recommend a buy.


Sell the stock in rallies with stiff stop-loss at Rs 527.

Source: TheHinduBusinessLine

Amara Raja Batteries (Rs 52.90): Buy

We recommend a buy in Amara Raja Batteries from a short-term perspective. It is clearly evident from the charts of Amara Raja Batteries that it has been on a long-term downtrend from its February high of Rs 183. The stock has been forming lower bottoms and lower peaks since then. However, the stock’s downtrend appears to have got arrested around Rs 40, which is a long-term key support level (2001 peak). The stock recently formed a bullish engulfing candlestick pattern, indicating a short-term reversal. On November 3, the stock surged 9 per cent accompanied with good volume. We notice that the daily relative strength index (RSI) is displaying positive divergence and weekly RSI is recovering from deeply oversold territory. Moreover, the daily moving average convergence and divergence is signalling a buy. We are bullish on the stock from a short-term horizon. We expect the stock to move up until it hits our price target of Rs 60 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 50.

Source: TheHinduBusinessLine

South Africa not immune from global crisis: Central bank

The economy of South Africa, Africa's economic powerhouse, cannot be immune from the effects of the global financial financial market c
risis, the central bank's monetary policy review committee said on Tuesday.

"The volatile and uncertain financial market environment will continue to complicate monetary policy decision-making for some time," the committee said in its bi-annual report.

The bank will, however, continue to focus on medium-term inflation targetting despite the global financial market crisis, it said. "The main risks to the inflation outlook emanate from the possibility of further electricity price increases, which will be announced next week," said the report.

Petrol, food price increases and the volatile exchange rate are some of the factors contributing to the inflation uncertainty. Since last year, South Africa's inflation of 12 percent has been hovering above the target range of between 3.0 to 6.0 percent.

The inflation rate for the overall food price component of the CPIX increased from 15.4 percent in March to 19.2 percent in August, before slowing to 17.9 percent in September.

"Although South African markets have been fairly resilient to the current crisis, the heightened levels of uncertainty about the global economy are contributing to a challenging monetary policy-making environment," the bank said.

The most recent International Monetary Fund (IMF) data show that world growth in real gross domestic product (GDP) was five percent in 2007 and will slow to an estimated 3.9 percent this year against the backdrop of increasing turmoil in global financial markets and stagnating growth in the advanced economies.

The South African economy grew at an annualised rate of 4.9 percent in the second quarter of this year, compared to a much slower rate of 2.1 percent in the first quarter.

Source: EconomicTimes

Meltdown blues reduce techies' marriage market value

Farmer OP Kurien, whose income has for ages depended on the fluctuating prices of farm produce, had just begun to look for a well
-settled techie groom for his techie daughter when the current global financial meltdown washed away his dreams for a more stable future.

Till recently young men and women working in India's mushrooming information technology (IT) firms and earning fat salaries were among the most sought after potential brides and grooms in the marriage market. But not any more.

Kurien's daughter who works in one of the top IT firms in the country has made it clear that she is just not going to marry another techie.

"My daughter tells me jobs in IT firms are no more stable and it is better to marry someone in the more traditional manufacturing sectors where there is greater job protection," says Kurien.

Early this year, the 150-odd IT firms in Kerala employing about 25,000 techies, for the first time notched up software and services export revenues of more than Rs.10 billion.

It was then party time for IT professionals with hefty pay hikes, foreign trips and all kinds of special perks and allowances. But the lights began to go off from the beginning of October. Suddenly, IT companies were handing over pink slips.

With media reports indicating that more than 200 software professionals have already been sacked in the state, the others employed in the IT sector are now sleepless in Kerala.

IT firms in the state such as IBS Software Services, a leading software company in the field of travel, transportation and logistics, have recently come under fire from the media for terminating jobs without notice. IBS, for instance, recently asked close to two dozen techies to leave in a whiff.

Says a shell-shocked software professional earlier with IBS: "I was asked to report to the HR department. They asked me for my ID card and said that I have to resign or else I would be handed a job termination letter. I had no option but to leave."

IT firms, however, say it is business as usual. "We do regular performance reviews of our employees and this is not the first time that we have asked employees to leave. Maybe right now this appears to have hit headlines because of the global recession," an IBS spokesperson said.

In the past few days newspapers and television channels have been highlighting the woes of IT professionals and how firms are asking them to leave without notice.

Even websites that carry news of software technology parks such as Technopark here are now full of reports and analyses by techies who feel that things are not rosy.

Technopark's founder and chief executive officer, G Vijayaraghavan, however, feels there are a lot of positives as well as negatives in what is happening now.

"The sad part is that right now only the negatives are being highlighted and this is not going to augur well for the industry prospects here," he says.

"If there is a crisis in the public sector, governments pump in money but when there is a crisis in the IT industry, it is the entrepreneur who has to take care of himself," says Vijayaraghavan, defending the action of the IT firms.

Job cuts in the IT industry also spell trouble for banks as they target IT professionals for home and car loans as techies with just three years' experience earn as much as Rs.40,000 a month.

"If this tight situation continues for months together, home and car loan repayments will come to a grinding halt. God forbid that such a thing should happen," says a bank manager here requesting anonymity.

All the publicity in the media has now forced the state government to react. "Labour laws have to be followed even if an IT firm is in a special economic zone," said state Labour Minister PK Gurudasan here Saturday. Special economic zones enjoy many benefits such as tax waivers and easier regulations.

"We have come to know about recent happenings in Technopark companies where employees are being treated with disdain. We will interfere even if there are no complaints," said Gurudasan.

The minister has asked the state Labour Commissioner to visit Technopark and submit a report. There is a flip side to all this. They may be technology geeks, but with the looming crisis, IT professionals are now increasingly flocking to temples, mosques and churches.

Source: EconomicTimes

Can the Middle East weather the financial storm?

Middle East investors are facing their biggest challenge in six years as the world's worst financial crisis since the 1930s threatens to engulf the oil producing nations and slow booming economic growth.

The advent of the financial crisis has all but halted interbank lending across the Gulf Arab region, raised the specter of a property crash hitting its commercial hub Dubai and turned stock markets so jittery investors from Kuwait have called for government intervention. Meanwhile Qatar's sovereign wealth fund has stepped in to shore up ailing banking stocks.

The region, which used a more than six-fold rise in oil prices since 2002 to pour billions of dollars into infrastructure projects, has now seen crude almost halve since July, leaving questions hanging over future growth.

Regional budgets range from $40 to $50 a barrel, but Qatar's prime minister last week signaled $70 to $90 would make it satisfied. In response to the oil price decline, OPEC at the end of the month cut production by 1.5 million barrels.

"The confidence has collapsed," said Mustafa Alani at Dubai-based think tank Gulf Research Center. "It's a wait and see time and whether it's sovereign wealth funds or private investors, the whole environment is holding on to its cash."

Gulf investors are keen to dismiss the scaremongering.

Last week, Sultan Ahmed bin Sulayem Chairman of Dubai World said Dubai's largest property firm Nakheel was not facing any problems in its home market and its financial position was a strong as ever.

This came as Fitch Ratings reaffirmed its assessment that Dubai debt alone amounted to $70 billion and it could well face difficulties refinancing debt in the long term. Any shock in the Dubai market would have a profound impact on its neighbors, analysts say.

"I think we will witness in the coming months a complete paralysis in the world investment market," said Alani. "We will see a lot of promises and statements saying there is no problem, but investors departing with their money is another thing."

Internationally, Middle East investors are increasingly seen as the cash kings. Bin Sulayem pointed out that current asset prices globally were providing once-in-a-lifetime opportunities.

Investments in British bank Barclays from Qatar and Abu Dhabi highlighted that for the right price, Middle East investors would step in.

How much so remains to be seen. Britain's Prime Minister Gordon Brown flew into the Gulf this weekend, saying regional money was vital to dampening the crisis. He follows the US deputy treasury secretary and France's trade minister.

"That deal (Barclays) was in favor of the investors ...they will never get such a deal in normal times, but for Brown, I think he will get nothing, apart from a smile," said Alani.

Top executives will address the Middle East financial climate in light of the ongoing financial crisis at the Reuters Middle East Investment Summit in Dubai and Kuwait from Nov 3 to 5.

Source: EconomicTimes

BoE likely to deliver biggest rate cut in 15 years

The Bank of England could deliver its biggest interest rate cut in 15 years this week as it tries to prevent a prolonged and painful recessio

Mounting evidence that the economy is shrinking sharply has led markets to price in a rate cut of three-quarter of a percentage point, which would be the biggest cut since 1993 and in the 11 years since the Monetary Policy Committee was set up.

Ten of 62 analysts polled by Reuters on Tuesday predicted borrowing costs, currently at 4.5 percent, could fall by a full percentage point. That would also be the biggest rate cut since 1993 as the MPC rarely moves rates by more than a quarter point.

The financial crisis has completely changed old habits with policymakers saying they have not seen anything this bad before. Last month, the BoE, along with other major central banks, delivered an emergency half point rate cut.

The European Central Bank is also expected to cut interest rates by half a percentage point on Thursday, according to analysts. Some investors are betting on an ever bigger cut.

"The MPC needs to make aggressive cuts in the Bank Rate in the months ahead: our assumption is a cumulative 200 basis points by February," said Geoffrey Dicks, chief UK economist at RBS. "If that is correct, the November decision is mainly tactical."

Bernanke moment

In a blunt speech last month, BoE Governor Mervyn King said the British economy was likely entering recession, comments widely interpreted as opening the doors to much lower rates, as Federal Reserve chairman Ben Bernanke did in January. Economists say another half point rate cut is a done deal. The question is whether the BoE will do more.

MPC member David Blanchflower, once the sole voice calling for lower rates, looks certain to vote for a full percentage point reduction, but his colleagues may prefer to be more cautious. They could cut by half a percentage point now and deliver another half point before Christmas.

But given the clamour for a bigger move, a 50 basis point cut could actually end up being a disappointment. Opting for a 75 basis point rate cut now would no longer smack of panic as markets have priced it in. But the BoE may also prefer to save its thunder for now as there are only so many confidence-boosting rate cuts it can deliver when rates are already at 4.5 percent.

In the early 1990s, rates fell in 1 percentage point moves but had been in double-digits previously. Cutting rates very rapidly now might perversely also lift sterling which has fallen sharply in recent weeks. Policymakers expect the weakness in the pound's exchange rate to help boost the economy, even though weak global demand may mean this effect is less pronounced than in the past.

Moreover, rate cuts will help less than in the past since lenders, who are suffering from a global credit crunch, are not necessarily passing them on to borrowers. That means rates may need to fall even lower than the half-century low of 3.5 percent seen in mid-2003.

"We expect rates to fall to just 1 percent or so, but the credit crunch has diminished the effectiveness of monetary policy," said Vicky Redwood of Capital Economics.

Source: EconomicTimes


I suggest investors to hold the stock. The counter looks very attractive at current levels but fresh buying should only be done if the stock crosses Rs 85 and sustains at those levels.: Simi Bhaumik: Tech Analyst: simibhaumik.com

Source: ndtvprofit


I suggest the investor to quit the stock. The counter may fall further from current levels.: Simi Bhaumik: Tech Analyst: simibhaumik.com

Source: ndtvprofit


I suggest the investors to accumulate more at lower levels. The EPS of the stock is Rs 380 on an annualized basis and the counter is a dark horse for sure.: VVLN Sastry: Country Head: Firstcall India Equity Advisors

Source: ndtvprofit


I advice the investor to exit the counter on rallies. The stock will remain down for some more time now. : Simi Bhaumik: Tech Analyst: simibhaumik.com

Source: ndtvprofit

FM statement lifts Sensex 293 points higher

Led by banking and realty stocks, the markets ended sharply higher at 10,631 after the Finance Minister assured of more liquidity measures and said that PSU banks have agreed to cut rates.

The markets opened marginally lower today and throughout the day the key indices were choppy, slipping in and out of the red turf. The markets rallied in the last one-hour of the trade after the statement from the P. Chidambaram, who met PSU bankers today. Addressing the media after the meet, he said the PSU banks have agreed to cut deposit rates by 50 bps and also reduce their lending rates by 75 bps. He also said that the government would take steps to boost the dollar liquidity.

Broader stock indicator Nifty also surged 28 points to end at 3142 levels.

“The statement by finance minister brought a very positive sentiment in the market. Such measures strengthen the medium- to long-term growth momentum of India,” said Upendra Kulkarni, director & CEO of Fortress Financial Services.

The realty index on the BSE surged 12.1 per cent. The Finance Minister said steps would be taken to meet the funding needs of housing sector. DLF and Unitech were the top gainers in the group, both up more than 14.5 per cent.

Banking index on the BSE gained 6.6 per cent with Bank of Baroda, Kotak Mahindra Bank and Bank of India leading the gains.

The other sectoral indices that ended with major gains were capital goods, metals and FMCG. “The Nifty has strong resistance at 3180-3200 levels. If these levels are crossed only then the upsurge would continue. Else the bounce back may get punctured,” said Bharat Dalal, Fund Manager, Dawnay Day AV Financial Services.

Among the Sensex stocks, realty major DLF led the gainers, up nearly 14.7 per cent. Ranbaxy, Tata Power, and JP Associates were the other major gainers, gaining more than 8 per cent each.

Suzlon Energy led the gainers on the Nifty. It rose nearly 21 per cent after the company announced it would acquire Martifer's stake in RE Power SystemsAG by next month. The acquistion was earlier scheduled to take place in May 2009.

DLF, Unitech and Reliance Power were the other prominent gainers on the Nifty.

Telecom stocks gained today after news reports said that there would be no delay in the plan to complete the 3G spectrum auction by mid-January. RCom, Tata Tele gained over 7 per cent each.

Asian stock markets were mixed in cautious trade after Wall Street’s relatively flat finish ahead of the US presidential election.

Japan's market jumped after being closed for a holiday. Hong Kong's Hang Seng Index edged up 0.2 per cent and South Korea's Kospi rose 1.2 per cent, while benchmarks in Singapore and Shanghai fell more than 1 per cent.

Source: ndtvprofit

30 US states in recession, 19 at risk: Moody's

Thirty US states were mired in recession in September, and 19 others are at risk of falling into recession in the coming months, a survey by ratings agency Moody's Investors Service said on Tuesday.

Moody's defined recession for the study as a decline in a state's gross domestic product (GDP) on average over a six-month period, compared with the prior six-month period.

According to the March-September study, 27 states were already in recession in August.

States with shrunken GDPs were concentrated in the eastern half of the United States - the Midwest, the southeast and the northeast - and the West (California, the largest state economy; Oregon; and Hawaii).

At-risk states were located in the centre of the country and in the northeast, including New York state.

Moody's said the only state that showed growth was Alaska, whose economy is dominated by the oil and gas industry.

While not one of the 50 states, Moody's survey included the US capital Washington, also called the District of Columbia, where the heavily government-dependent economy also grew during the period.

Source: ndtvprofit

Reduce Dabur India: IIFL

IIFL has recommended reduce rating on Dabur India, in its November 04, 2008 report. "Dabur India's 2QFY09 results were broadly in line with our expectation. Pre exceptional net profit grew 12.2% YoY (estimated growth of 12.6%) whereas profit growth adjusted for retail business losses was higher at 17% YoY. Sales grew 18% YoY, ahead of our estimate of 15% growth, buoyed by international business revenues, which were up 40%. Underlying volumes grew by 10%. EBITDA margins were down 180bps on account of retail business losses and higher advertising costs. Continued slowdown in Dabur’s domestic FMCG business in oral care and foods categories is an area of concern. Reduce," says IIFL's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

HPCL a market performer: Karvy

Karvy Stock Broking has rated Hindustan Petroleum Corporation (HPCL) as a market performer with a target of Rs 230 in its November 4, 2008 research report. "HPCL has reported loss during Q2FY2009 even after accounting for oil bonds of Rs 42,212 million (oil bonds of Rs 23,555 million in Q2FY2008) and receipt of Rs 30,190 million (Rs 9380 million) towards subsidy under recovery share from upstream companies. The company reported a loss before prior period items of Rs 32,189 million (profit of Rs 8,530 million)."

"Market sales tonnage grew by 19.5% YoY to 6.01 million ton, but refinery throughput was lower at 4.19 million ton as against 4.25 million ton. Pending clarity on further issuance of oil bonds, we maintain our target price of Rs 230 and rate the stock as Market performer," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy EID Parry, target of Rs 230: Karvy

Karvy Stock Broking has maintained its buy rating on EID Parry (India) with a target of Rs 230 in its November 4, 2008 research report. "For Q2FY09, EID Parry (I) reported the revenue increase of 55.7% YoY (QoQ increase of 16.4%) to Rs 2.51 billion due to higher sugar sales. The company has reported profit of Rs 117.8 million at PBIT in Q2FY09 as compared to loss of Re 347.7 in Q2FY08."

"We expect the revenue to increase at a CAGR of 22% to Rs 9.7 billion in FY10. We expect the profit of Rs 333 million in FY09 and Rs 691 million in FY10. We maintain sugar business valuation at EV/ Ton of Rs 0.35 million to FY09 capacity. Considering the addition of cash Rs 81 per share from sale of stake in Sanitaryware business, we are valuing sugar business at Rs 149. The valuation from 69% stake in Coromandal fertilizer is maintained to Rs 81 per share. We maintain our valuation based on sum of parts with target price Rs 230 with BUY rating," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy ABG Shipyard, target of Rs 278: Angel

Angel Broking has maintained its buy rating on ABG Shipyard with a target of Rs 278 in its November 3, 2008 research report. "ABG Shipyard (ABG) released its 2QFY2009 results and the Top-line rose by 32.3% to Rs 280.2 crore. The Net Profit of the company declined by 28.5% during the quarter to Rs 27.2 crore (Rs 38.0 crore)."

"At CMP the stock trades at 2.3x and 0.5x its FY2010E EPS and BV respectively, which we believe is fairly attractive. However, in view of the current macro scenario, we have downgraded our Target Multiple for the stock from 8x to 5x. We maintain a Buy with a Revised 18-month Target Price of Rs 278 (Rs 446)," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Corporation Bank, target of Rs 274: Indiabulls Sec

Indiabulls Securities Research has maintained its buy rating on Corporation Bank with a target price of Rs 274 in its November 3, 2008 research report. "The bank’s operating profit and net profit grew by 19.3% and 18.7% yoy respectively, driven chiefly by a modest 14.7% yoy growth in NII. We have valued the standalone Bank by using a three-Stage Discounted Equity Cash Flow model. Based on our assumption of a 14.6% cost of equity and a 11.1% terminal growth rate, we have arrived at a target price of Rs 274, which implies a potential upside of 30% over the current market price of Rs 210. The stock also quotes a forward P/B of 0.6x which makes it a compelling value play. Thus, we reiterate our Buy rating," says Indiabulls Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Lloyd Electric, target of Rs 61: Angel

Angel Broking has maintained its buy rating on Lloyd Electric and Engineering with a target of Rs 61 in its November 3, 2008 research report. "The top-line of Lloyd Electric (Lloyd) declined by 17.3% yoy to Rs 121.9 crore (Rs 147.3 crore) in 2QFY2009. The 2QFY2009 Net Profits of the company have declined by 77.1% to Rs 3.2 crore (Rs 14.1 crore)."

"Further during 2008, the company has acquired a plant in Czech from Luvata which would give Lloyd a foothold in Europe and add to its Top-line and Bottom line. The company has registered a Top-line and Bottom-line de-growth during 2QFY2009, primarily due to tight liquidity scenario and a slowdown in the white goods segment, accounting for which we are downgrading our Top-Line and Bottom-Line estimates for FY2009–10. At CMP the stock trades at 3.1x its FY2010E EPS. We are bullish on the company due to its excellent positioning in the AC market in India thus we maintain a BUY with a Revised Target Price of Rs 61 (Rs 112)," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Bharti Airtel, target of Rs 951: Asit C. Mehta

Asit C. Mehta has maintained its buy rating on Bharti Airtel with a revised target price of Rs 951 in its November 4, 2008 research report. "During the quarter ended Sep 2008, the revenues increased by 41.1% to Rs 89.2 billion. Revenues from mobile services represented 81% of the total revenues for the quarter ended September 30, 2008. The company continues to maintain its leadership position with strong earning visibility and excellent execution record. Bharti’s strong cash position will enable the company to continue with its expansion plans. We believe that Bharti will continue to be the market leader with 25% market share by the end of FY10. Therefore we maintain BUY on “Bharti Airtel Ltd” with a revised price target of Rs 951," says Asit C. Mehta's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Angel Broking neutral on Hindalco

Angel Broking has manitained its neutral rating on Hindalco Industries in its November 3, 2008 research report. "In 2QFY2009, Hindalco posted a yoy standalone Topline growth of 14.4% to Rs 5,683 crore (Rs 4,967 crore), which was mainly due to higher Aluminum prices, rupee depreciation and higher volumes of Alumina and Aluminium led by Brownfield expansion. Hindalco’s Standalone Net Profit grew comparatively slower rate of 12% yoy to Rs 720 crore (Rs 643 crore) in 2QFY2009."

"We believe that the weak outlook for the Copper business due to declining Tc/Rc margins, expected decline in the demand for aluminium and weak price outlook and significant equity dilution on account of the Rights issue would be the negatives that would impact the company’s performance going ahead. Novelis’s fixed price contracts would also be a drag on the company’s Profitability in the near term. Hence, we remain Neutral on the stock," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate NTPC, target of Rs 196: Anagram

Anagram Research has maintained an accumulate rating on NTPC with a target of Rs 196 in its November 4, 2008 research report. "We believe that the stock is trading at attractive valuation. Typically growth in topline comes with capacity addition as company have no pricing power as tariffs are capped (14% ROEs) but looking at the current deficit scenario and capex plans till FY 12 it makes us believe that company will grow by atleast 15% CAGR over 4 years and any increase in price of coal will provide a further upside to sales growth (as coal price increase are passthrough)."

"Company also plans to add 2000 MW of nuclear capacity in twelfth five-year plan. We arrive at a price target of Rs 196 at a P/E of 20x on FY09 E EPS of Rs 9.8 (Earlier our target price of Rs 210 was based on P/E of 21.5). We maintain Accumulate rating on the stock," says Anagram's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Kirloskar Brothers, target of Rs 113: KRChoksey

KRChoksey has recommended buy rating on Kirloskar Brothers with a target price of Rs 113, in its October 23, 2008 reports. "At the CMP of Rs 80.5, the stock is trading at 7.7x FY08 EPS of Rs 10.4 and 7.6x FY09E EPS of Rs 10.6. We ‘Re-rate’ the stock and recommend a BUY with a target price of Rs 113, implying an upside potential of 40%. At the target price, the stock would be valued at 10.7x FY09E EPS of Rs 10.6," says KRChoksey's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy CRISIL, target of Rs 3650: Emkay Global

Emkay Global Financial Services has maintained its buy rating on Credit Rating Information Services of India (CRISIL) with a target of Rs 3650 in its November 3, 2008 research report. "CRISIL’s net profit of Rs 423 million for Q3CY08 was ahead of our expectations driven by better than expected growth in revenues and improvement in operating leverage."

"We have revised our earnings for the stock by 19% for CY08E and 13% by CY09E. The stock is currently trading at 13.1x its CY08E EPS and 10x CY09E EPS. However, we had valued the company at 40% premium to the Sensex multiple which itself has been derated to 10.0x. We are revising our price target on the stock to Rs 3,650, which values the company at 14.0x CY09E EPS (40% premium to the Sensex multiple). We maintain our BUY recommendation on the stock," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

PVR an outperformer: ICICIdirect.com

ICICIdirect.com has rated PVR as an outperformer with a target price of Rs 116 in its November 3, 2008 research report. "PVR (standalone) reported a topline of Rs 78.84 crore for Q2FY09, growing 30.93% QoQ and 27.34% YoY largely due to higher occupancy. With the given economic slowdown and higher inflation, multiplexes are facing a tough time coping with declining footfalls and occupancy levels. PVR, as the industry leader, has also felt the heat. The company has delayed the roll out plans and is coming up with only one more new property by the end of FY09. At the CMP of Rs 96, the stock is trading at P/E multiple of 9.03x FY09E EPS of Rs 10.63 and 7.46x FY10E EPS of 12.88. Given the near term slowdown we value the company conservatively at 9x FY10E EPS to arrive at a target price of Rs 116. Hence, we rate the stock as OUTPERFORMER," says ICICIdirect.com's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Bank Of Baroda, target of Rs 310: Emkay Global

Emkay Global Financial Services has maintained its buy rating on Bank Of Baroda with a target of Rs 310 in its November 3, 2008 research report. "Bank of Baroda (BOB) reported a net profit of Rs 3.9 billion, marginally ahead of our expectation driven by higher NII and fee income growth coupled with lower operating expenditure. The growth in NII at 15.5% to Rs 11.3 billion was inline with expectations. The growth in NII was led by healthy advances growth."

"We have revised our estimates for FY09 and FY10 by 14% each to take into account robust Q2FY09 numbers. The stock is currently quoting at 4.5x its FY10E EPS and 0.6x FY10E ABV. The bank is likely to report a RoE of 15.0% for FY10E. We maintain our BUY rating on the stock with a price target of Rs 310," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Shiv Vani Oil, target of Rs 607: HDFC Sec

HDFC Securities has maintained its buy rating on Shiv Vani Oil & Gas Exploration Services with a target of Rs 607 in its November 4, 2008 research report. "It reported a Net Sales of Rs 1876 million (divergence of -5.3%), higher by 92% yoy and lower by 1% qoq. PAT was Rs 476 million (divergence of +14.1%) higher by 141% yoy and 31% on qoq basis."

"Shiv-Vani Oil is the largest private onshore oil field service provider in India. It has a strong order book position of Rs 48 billion that is 4.8 (x) its FY09E turnover, providing clear visibility of its future revenues. We expect the revenues and profits of the company to grow at a CAGR of 62% and 62% from FY08 to FY10E. At the CMP of Rs 307 it is trading at 8.6x and 5.4x its FY09E and FY10E FDEPS. We have revised our DCF based target price from Rs 744 earlier to Rs 607 (upside of 102% from current levels). We maintain our BUY rating on the stock," says HDFC Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Sell JSW Steel: HDFC Securities

HDFC Securities has maintained its sell rating on JSW Steel in in its November 4, 2008 research report. "Net sales grew by 58.5% YoY in Q2FY09 to Rs 42,692 million from Rs 26,942 million mainly driven by growth in realisations. Net profit plummeted to Rs 3,175 million in Q2FY09 (-40.6% YoY) owing to 126% YoY increase in interest cost and Rs 2,684 million of foreign exchange loss due to translation of raw material liabilities and loans. There will be increasing stress on margins for JSW Steel going forward due to lower steel prices and unchanged raw material prices, especially for coking coal where its yearly contract is set to expire in March 09."

"We are revising our FY09E and FY10E EPS by 38.0% and 38.4% downwards to Rs 62 and Rs 117 respectively, from Rs.100 and Rs.190 earlier due to weakening steel prices, delayed expansion plans and high leverage (expected net D/E ratio of 1.65x). At the CMP, JSW Steel is trading at 5.6x and 3.0x of FY09E and FY10E EPS respectively. We, therefore, maintain our SELL rating on the stock," says HDFC Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

I went out of town, couldn't claim my tax refund

THERE are times when you cannot claim your income tax return on time. What happens to that money then? How can you claim it back? wealth reader Alok had a similar query.

I received an income tax return cheque (drawn on the State Bank of India), but since I was out of the country during the cheque validity period (28/12/2007 to 27/03/2008), I could not encash it. I have also changed my residence now. I had filed my returns for 2007-08 at Kolkata, now I have shifted to Bhubaneshwar, Orissa. How do I get a new income tax refund order?

-- Alok

1. Firstly, inform the PAN authorities about the change of address. You will have to file an application with the National Securities Depository Limited (NSDL) for the same. For this, you can visit the website www.incometaxindia.gov.in. Thereafter, you will get a fresh PAN reflecting your new address (your PAN will remain the same but the address will get altered).

2. You then need to write a letter to the concerned IT officer in Kolkata informing him of the change of address and ask him to transfer your case papers to the concerned IT officer in Bhubaneshwar. For this, you will need to find out the jurisdiction of the correct officer in Bhubaneshwar before you can make an application for transfer of papers.

3. Similarly, make an application to the IT officer in Bhubaneshwar informing him that you were assessed to tax with the concerned officer in Kolkata and that you have applied for transfer of your papers and that henceforth, you will file your IT return in Bhubaneshwar.

Smart tip: Getting a tax advisor/ CA to help you with these tasks is advisable. At a practical level, you, as a layman, will find it very difficult to follow up with different officers.

4. As far as the return cheque is concerned, you need to return the original cheque to the IT officer who issued the same and request him to issue a fresh cheque at your changed address. However, please note that merely writing a letter will not serve the purpose. You will have to follow up vigorously with the officer before you get a fresh cheque.

Smart tip: Keep a photocopy of the cheque with you and make sure you take an acknowledgement from the IT officer on the letter that you file. This will help you in case of any delays and discrepancies for the issue of the fresh cheque.

Disclaimer: While we have made efforts to ensure the accuracy of our content (consisting of articles and information), neither this website nor the author shall be held responsible for any losses/ incidents suffered by people accessing, using or is supplied with the content.

Source: Moneycontrol

HDFC to 'wait and watch' before reducing rates: Parekh

India's premier mortgage lender, HDFC's Chairman Deepak Parekh on Tuesday said the lender would wait and watch for some time prior to taking
a call on a possible lending rate cut.

"We need to wait and watch (for) some time (before taking a call on interest rates). The deposit rates have to come down first before cutting lending rates," Parekh told reporters here on the sidelines of a function.

After Finance Minister P Chidambaram held a meeting with the public sector bankers today, Finance Secretary Arun Ramnathan would meet heads of private sector banks tomorrow to discuss the impact of recent liquidity infusion in the system and the need for lower interest rates.

Source: EconomicTimes

India to have near 0% inflation in H2 of '09

The country is likely to have near zero inflation in certain periods of second half of 2009 on account of economic slowdown and falling commodity prices, says a report by broking house Edelweiss Securities.

Inflation stood at 10.68 for the week ended October 18. "Given the possibility of a further strong softening in commodity prices amidst a marked global slowdown, domestic inflation can be zero or near zero during H2 CY'09," Edelweiss analyst Siddhartha Sanyal in his research report.

The US and the UK have already reported contraction in output and most emerging economies are also likely to be hit in CY09, the report said, adding that the slowdown is likely to soften overall price levels in most economies.

Slowing global industrial production will further weaken the base metal prices, especially after the decline in demand from China. Economic slowdown is expected to significantly cut down energy demand, the report noted.

A softened crude price will mean lower prices of various chemicals, fertilisers, etc. Accordingly, recession accompanied by deflation is a strong possibility in case of several industrial economies, it said.

"India is a large importer of crude oil, chemicals, capital goods, etc; these commodities taken together influence about 25-30 per cent of the overall WPI basket in India," Sanyal said.

Edelweiss used assumptions of modest growth in food prices (about 6 per cent), crude oil price of $60-70 per barrel leading to about 10 per cent cut in domestic petro prices, and about 10 per cent reduction in prices of metals.

"If the recent spike in domestic inflation was dramatic, its fall in the coming months could be even more stunning," Sanyal noted, adding that he expected softening of inflation from the fourth quarter of FY'09.

Source: EconomicTimes

Japan seen slipping into recession in Q3

Japan's economy has joined much of the developed world in a recession, economists polled by Reuters say, with GDP seen contracting for a seco
nd consecutive quarter as the financial crisis hits exports and capital investment.

Economists had previously expected Japan to eke out weak growth in the third quarter, but sliding exports to crisis-hit countries and related weakness in company spending removed two key areas of growth in the world's second-largest economy.

Much of the developed world is now in recession, officials and economists say, based on the most common definition of two consecutive quarters of shrinking gross domestic product (GDP), and economists see little sign of improvement anytime soon.

Newly issued weak global vehicle sales figures for October, issued on Monday and Tuesday, add to the problems for Japan, where the central bank trimmed interest rates and slashed its growth forecast on Friday, saying it saw almost no growth for Japan in the year to March 2009.

"The Japanese economy entered a downturn phase from early this year and the trough is likely to deepen as the financial crisis further impacts the real economy," said Takuto Murase, an economist at the Japan Research Institute, who saw a further contraction in the fourth quarter.

Murase said exports would further weaken in light of deteriorating economic conditions in the United States and Europe and a slowdown in emerging economies, and as companies become more cautious in capital investment. The median forecast from a Reuters poll of 11 economists estimated the Japanese economy dipped at an annual rate of 0.2 percent in the July-September quarter, after shrinking at an annual rate of 3.0 percent in April-June -- its biggest fall in seven years.

Preliminary gross domestic product data for the third quarter is due out on Nov. 17 at 8:50 a.m.
Tokyo stocks had their worst month in history in October, with the benchmark Nikkei average <.N225> falling 24 percent in the wake of the economic woes and a sharp rise in the yen, as investors unwound investments based on borrowed Japanese currency.

The Nikkei rose 6.3 percent on Monday, reflecting a weaker yen in recent days. Late last month the dollar hit a 13-year low below 91 yen, adding to fears for the repatriated profits of Japan's big exporters, but has since recovered to around 99 yen.

RECESSION BLUES The European Commission said on Monday that the euro zone is already in a recession, and the United States contracted at an annual rate of 0.3 percent in the third quarter, the sharpest rate in seven years. While Japan's major banks have been largely untouched by the crisis, and have even invested in weaker rivals to expand overseas, the economy has not escaped the fallout from the global cash squeeze.

Source: EconomicTimes

Lloyds to sell stake in merged Lloyds-HBOS: Report

British banking major Lloyds TSB, which is to buy out its rival HBOS, is in talks with insurance groups and sovereign wealth funds for sellin
g stake in Lloyds-HBOS, a media report said.

"Lloyds TSB is in talks with sovereign wealth funds and UK insurance groups about selling stakes in a merged Lloyds- HBOS group," The Times said in a report published online today.

According to The Times report a preliminary deal is scheduled to take place by January.

The UK daily noted that Lloyds intends to use the cash to help redeem four billion pounds of expensive and restrictive government preference shares in Lloyds and HBOS at the earliest opportunity. This would allow the bank's board to keep its promise of restarting dividend payments next year.

"It is understood that Lloyds is in negotiations with up to ten Middle Eastern and Asian sovereign wealth funds about selling the stake. Funds from Dubai, Kuwait and Brunei are obvious contenders, as is Temasek of Singapore. Chinese funds, which have made loss-making investments in Western financial institutions including Barclays are not candidates," the report pointed out.

Quoting sources, the report said Lloyds, which is advised by Merrill Lynch, UBS and Citigroup, has been in talks with a number of sovereign funds for more than a month.

"The talks were put on hold as the state-sponsored funds concentrated on a potential investment in Barclays, but are now said to be back on in earnest. The board of Lloyds is understood to be keen to seal a deal by January when Lloyds and HBOS will formally merge to demonstrate confidence in the business," it added.

Source: EconomicTimes

Oil prices fall as US economic woes mount

Mounting evidence of a US recession and waning Chinese demand sent crude oil prices drifting on Tuesday below the previous day's closing.

Monday's rally in oil futures proved short-lived after U.S. manufacturers reported lethargic activity numbers for October. The Institute for Supply Management said its manufacturing index fell to 38.9, the worst reading in more than a quarter century. Any reading below 50 signals contraction.

Light, sweet crude for December delivery slid 31 cents to $63.60 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. After rising above $69 per barrel Monday, light, sweet crude for December delivery tumbled $3.87 to settle at $63.91 overnight.

The manufacturing data along with weak U.S. auto sales ``poured cold water'' on the oil market, said Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore.

``The overriding concern is the economy in the U.S.,'' Shum said. ``For 2008 there is unlikely to be any demand growth for oil and in 2009 there may be some modest growth but much less than we would have seen otherwise.''

Adding to the gloomy outlook for the oil market, Credit Suisse cut its forecast for growth in China's oil demand next year to nearly zero from 4 percent on the back of lower economic growth forecasts.

``The latest set of economic data out of China suggests a much more severe economic slowdown is under way there. Hopes of even a slightly decoupled China in 2009 are fading fast,'' the investment bank said in a report.

Oil industry analysts had believed he booming economies of India and China would pick up any slackening of demand if Western nations went into recession. That view has weakened in recent months, as the economic crisis in the United States spread across the globe.

Stock markets, often a barometer of the economy for oil traders, were mixed in Asia. Japan's Nikkei 225 stock average jumped 6.3 percent as investors played catchup to Asia's rally Monday following a long weekend. Hong Kong's stocks edged up 0.3 percent, but markets in China and Singapore fell.

Shum said he expects oil to continue trading within its recent $60 to $70 band. Prices have tumbled since spiking to nearly $150 a barrel in July.

The recent output cut by the Organization of Petroleum Exporting Countries is likely to achieve a ``fairly good level'' of compliance from member nations, creating a floor for the oil price, he said.

But a second cut at OPEC's next meeting in December seems unlikely and would be difficult to implement, Shum said.

To keep prices from falling further, Venezuela's Oil Minister Rafael Ramirez has said OPEC, which controls about 40 percent of world crude oil production, will need to cut production by at least 1 million barrels daily on top of the already announced cut of 1.5 million barrels a day.

One quick benefit of falling oil prices has been less pricey gasoline in the U.S. and elsewhere.

Gasoline futures fell more than a penny to $1.35 a gallon, adding to a steep fall overnight on the Nymex. In his Schork Report, trader and analyst Stephen Schork noted that prices at the pump now are ``47.2 cents ... below the corresponding level from a year ago'' _ a 16 percentage point decline.

Heating oil was essentially flat at $1.98 a gallon while natural gas for December delivery fell just over 3 cents to fetch $6.87 per 1,000 cubic feet.

In London, December Brent crude fell 51 cents to $60.50 on the ICE Futures exchange after plummeting $4.84 overnight.

Source: EconomicTimes

Nokia to cut almost 600 sales and marketing jobs: company

The world's leading maker of mobile phones, Nokia of Finland, said on Tuesday that it would cut almost 600 jobs, mainly in its sales and ma
rketing division.

"As a follow-up to Nokia's reorganisation in the beginning of 2008, Nokia plans further changes in its sales and marketing activities in the markets unit," it said in a statement.

"Nokia estimates that approximately 450 employees, maximum 100 in Finland, in the markets unit will be affected by the planned changes," the company said, adding that another 130 employees at the Nokia Research Centre (NRC) would also be affected.

A spokeswoman for the group, Arja Suominen, said the job cuts would affect permament and not temporary employees, but that the overall number of jobs cuts was an estimate.

She said the company would begin negotiations with the unions and employee representatives, and "obviously the final figures will only be known after that."

Nokia said the changes would be effective January 1, 2009.

The company also announced that it would close its plant in Turku, in southwestern Finland, which employs 220 people and relocate its activities to the nearby town of Salo.

The closure will be finalised by the end of January 2009, and employees will be offered the possibility to work in Salo or in the Helsinki area.

Source: EconomicTimes

Now, bankers come under fire for high bonuses in UK

UK has set up a bank reconstruction agency to oversee its GBP 37 bn bailout of banks, in order to ensure banks start lending to recession-hit industry. The arms length agency will manage the government's contribution even as British MPs start a formal enquiry into the financial crisis.

Chancellor Alistair Darling, BoE governor Mervyn King, and FSA chairman Lort Turner are facing a grilling from MPs, who have in an unusual move asked the public to write in with their questions for the enquiry. While UK's bank bailout plan was initially lauded, the honeymoon is now over, and there's increasing criticism because the move has not yet started the banks lending.

More critically, the City's bonus culture is expected to come under fire, including what measures the government will take to curb it. This comes at a time when there's a public outcry that despite taking state aid, troubled banks like Royal Bank of Scotland has set aside GBP 1.7 billion for staff bonuses, and Barclays has opted for gulf money to protect its bonuses.

It's a bad time to be a banker. Once seen as masters of the universe, investment bankers have become social pariahs. People in the financial business say that these days, as soon as they meet anyone, the first thing they have to say is "I'm not an investment banker, I work in something else." Tales from the City abound about how many investment bankers are switching over to other professions, keeping the Ferraris in the garage and taking the tube, and even hiding their profession at dinner parties. High street gossip is that trophy wives are also now sneaking around luxury stores and spas instead of triumphantly marching around them.

Nobody has yet thrown stones at their houses, but British society, never very happy with mega-rich lifestyles of the few in the City, is moving from glee that the mighty have fallen, to outright anger as ordinary taxpayers and the rest of the public is dragged down in the crisis. Homeowners may be the next on the hate list.

There's still some bullishness about emerging markets. PwC has argued that emerging economies like India and China may overtake the developed world in as little as 5 years, accounting for more than 50.2% of world GDP by purchasing power parity. John Hawksworth, PwC's chief economists, said that the lopsided nature of the global downturn means a shift in the balance of power by 2013, reports the Guardian. PwC's projections estimate that emerging economies, which now account for 43.7% of global GDP are on track to grow.

China is on course to overtake the euro area as the world's second biggest economy, while India would be challenging Japan for fourth place. According to the PWC calculations, the US would remain the world's biggest economy but its share of global GDP would decline from 21.3% now to 18.8%, while Britain will drop to a 2.9 % share, behind Russia. While Russian estimates may need to be scaled down, the same could be said of western country growth projections, PwC has argued, since emerging economies are less affected.

Source: EconomicTimes

World hopes for a less arrogant America

A world weary of eight years of George W. Bush was riveted Tuesday by the drama unfolding in the United States. Many were inspired by BarackProfile: Barack Obama
Obama's focus on hope, or simply relieved that - whoever wins - the current administration is coming to an end.

From Berlin's Brandenburg Gate to the small town of Obama, Japan, the world gears up to celebrate a fresh start for America.

In Germany, where more than 200,000 flocked to see Obama this summer as he moved to burnish his foreign policy credentials during a trip to the Middle East and Europe, the election dominated television ticker crawls, newspaper headlines and Web sites.

Hundreds of thousands prepared to party through the night to watch the outcome of an election having an impact far beyond America's shores. Among the more irreverent festivities planned in Paris: a "Goodbye George" party to bid farewell to Bush.

"Like many French people, I would like Obama to win because it would really be a sign of change," said Vanessa Doubine, shopping Tuesday on the Champs-Elysees. "I deeply hope for America's image that it will be Obama."

Obama-mania was evident not only across Europe, where millions geared up for all-night vigils, but even in much of the Islamic world, where Muslims expressed hope that the Democrat would seek compromise rather than confrontation.

The Bush administration alienated Muslims by mistreating prisoners at its detention center for terrorism suspects at Guantanamo Bay, Cuba, and inmates at Iraq's Abu Ghraib prison - human rights violations also condemned worldwide.

"I hope Obama wins (because) of the need of the world to see the U.S. represent a more cosmopolitan or universal political attitude," said Rais Yatim, the foreign minister of mostly Muslim Malaysia.

"The new president will have an impact on the economic and political situation in my country," said Muhammad al-Thaheri, 48, a civil servant in Saudi Arabia. Like so many around the world, he was rooting for Obama "because he will change the path the U.S. is on under Bush."

Nizar al-Kortas, a columnist for Kuwait's Al-Anbaa newspaper, saw an Obama victory as "a historic step to change the image of the arrogant American administration to one that is more acceptable in the world."

Yet John McCain was backed by some in countries such as Israel, where he is perceived as tougher on Iran.

Source: EconomicTimes

Tata Steel has target of Rs 230-250: Mathew

Technical Analyst, E Mathew is of the view that Tata Steel has target of Rs 230-250.

Mathew told CNBC-TV18, "Tata Steel is not coming out of the downtrend. I think the downtrend is still intact. Optimistic target in this move could be somewhere between Rs 230-250. I would still look at it as a bounce back even if it goes beyond Rs 250 as a very strong bounce back. If it sustains above Rs 250, we could look at a target of around Rs 280. I would be extremely surprised if it is able to cross Rs 250."

He further added, "If you look at the weekly charts or even the monthly charts, the downtrend has been totally demolished. Though fundamentally to a lot of people it would look interesting, I would recommend that even for long-term investors one must be very cautious in this scrip between Rs 230 and Rs 250. I think people should try to exit this scrip around that region."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

IVRCL Infra can rally upto Rs 129-130: Mathew

Technical Analyst, E Mathew is of the view that IVRCL Infrastructure and Projects can rally upto Rs 129-130.

Mathew told CNBC-TV18, "We are participating in a pullback rally. I will not say that IVRCL is out of its downtrend. It has the capability of going up to around Rs 129 to Rs 130. At best if we see that the Nifty is rallying to around 3,300-3,400 zone, you could see it rolling around Rs 145-150 but beyond that it looks difficult. I would be surprised if it sustains even above Rs 130."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

NTPC a safe bet: Vijay

Portfolio Manager, PN Vijay is of the view that NTPC is a good bet.

Vijay told CNBC-TV18, "One could probably look cautiously at NTPC; of course it was butchered by the FII based short selling, it was one of the big shorted stock and it seeing a huge short covering in the market last few days. But having said that NTPC valuations are very good and they are at the right placed at the right time. They were hit by high material cost, steel prices etc but that’s probably behind them and the pricing has now been formalised. The power producers are getting nice formula and they are now open to distribution issues, which other distributing electricity companies are. So it is a safe nice bet."

Disclosure: It is safe to assume that analyst may have positions in the above stock/sector.

Source: Moneycontrol

Keep a stoploss of Rs 35 in Chambal Fert: Mathew

Technical Analyst, E Mathew is of the view that in Chambal Fertilisers and Chemicals one can keep Rs 35 as a stoploss.

Mathew told CNBC-TV18, "The fertilizer and the sugar sector are trading favorites. We are in a trading market, these are not investment calls, and these are pure trading calls. If one can keep a stoploss of around Rs 35 on Chambal Fertilizers, one could play for a target of around Rs 62. This chart is looking reasonably good."

He further added, "As far as sugar is concerned whether it is a Balrampur or a Shree Renuka, I find that relative to the massacre, which has taken place in the Nifty, I am quite impressed by the charts of some of these sugar stocks. There is a trading opportunity on Shree Renuka. Keeping a stoploss of Rs 48-50, one could play for a target of as high as Rs 78-80. So these are all good trading opportunities but at the same time one must remember that if the Nifty is going to peak out somewhere between 3,330 and 3,400, I am sure these guys would also run out of steam."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

Tata Motors can test Rs 250: Mathew

Technical Analyst, E Mathew is of the view that Tata Motors can go to Rs 250.

Mathew told CNBC-TV18, "Tata Motors charts certainly looks promising from a pure trading angle not from an investment angle. It has the scope to go up to about Rs 250 and if you stretch it to Rs 280. Given the choice in this sector, I would any day prefer a Maruti. Both chartically and fundamentally, I think that stock looks far stronger than Tata Motors."

He further added, "It has become fashionable for everyone to thrash the real estate stocks and even I agree to that view. I feel an optimistic target in DLF could be around Rs 285 to Rs 290."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

Exit Orbit Corporation at higher level: Mathew

Technical Analyst, E Mathew is of the view that one should exit Orbit Corporation at higher level.

Mathew told CNBC-TV18, "In Orbit Corporation I still feel that it is a pullback rally and at best if one is taking a trading call, one has to keep a tight stop loss around Rs 62-63 zone. This pullback rally could take you to Rs 86-88 zone where there is very stiff resistance but I think beyond that one is being adventurous and one should book out at higher levels."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

Infosys has target of Rs 1800: Mathew

Technical Analyst, E Mathew is of the view that Infosys Technologies has target of Rs 1800.

Mathew told CNBC-TV18, "I do not think IT stocks have topped out. They are just taking a little bit of a rest. IT could be one sector, which may surprise on the upside selectively. If you take a chart of Infosys or of TCS, what they need to do now is to consolidate a little at lower levels especially a stock like Infosys has had a handsome run. I would be a buyer again in Infosys at around Rs 1,150-1,200 zone. I think if the Nifty is to rally above 3,400, Infosys would outperform. In the medium-term, from six months view, I think one could look for a target of Rs 1,800 in Infosys."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

Buy Hindalco Industries on declines: Mathew

Technical Analyst, E Mathew is of the view that one can buy Hindalco Industries on declines.

Mathew told CNBC-TV18, "Hindalco has seen a magnificent rally if you look at it from the bottom of Rs 35. Fundamentally a lot of people are seeing great value in it but in my opinion the stock has virtually doubled from its bottom. I think the stock needs to consolidate at lower levels to attract buying interest again. The stock has to maybe at the level at which it would attract buying interest, which would be somewhere between Rs 50-52 zone. I think the trading bounce back is still not over in Hindalco because the fall has been phenomenal and once it consolidates around Rs 48-50 zone, the next upmove could possibly take Hindalco all the way to Rs 85-90 zone."

He further added, "As far as SAIL is concerned, I think the chart is not looking as good as that of Hindalco’s and the bounce back at best could take it to around Rs 105 zone. So given the choice between the two, both as trading bets, my strategy would be to buy Hindalco on declines."

Disclosure: Analyst associate company has sold out of money calls.

Source: Moneycontrol

Prefer HDFC Bank, Axis Bank: Mohoni

Technical Analyst, Deepak Mohoni is of the view that one can switch to HDFC Bank, Axis Bank or even HDFC or some stocks which are individually doing well like Titan Industries, Divis Lab.

Mohoni told CNBC-TV18, "Lot of these stocks, which got battered down in the bear market; stocks which have lost 60-90% have had a good bounce in the last few days, Tata Motors is one of them. Now unless the whole market bottoms out and starts a bull market stocks like Tata Motors will probably continue to make new lows. So you should take advantage of the fact that the stock has risen in the last three-four days and switch immediately to stock that doesn’t have so much downside risk and which would go up anyway if the market goes up. So switch to some of the banks like HDFC Bank, Axis Bank or even HDFC or some stocks which are individually doing well like Titan Industries, Divis Lab that maybe a good strategy."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Don't invest in 4 wheelers stks: G Shah

Gaurang Shah of Geojit Financial Services advises not to invest in any of the four wheeler companies.

Shah told CNBC-TV18, "Not only Tata Motors the entire pack amongst the four wheelers whether it is Mahindra & Mahindra or Tata Motors or Maruti Suzuki, I think we are going to see a sluggish kind of quarters at least for the coming three-four quarters and our guess is that the slowdown in the vehicle will possibly increase in Q3. You might see some kind of sanity returning in Q4 but beyond that it’s going to be very sluggish in consolidation."

He further added, "The slowing down of the economy itself is going to be a cause of concern because a common man is not going to look forward to go ahead and buy a car. I think basic necessities would be the one that he would address and by the virtue of that you might see the offtake of month on month numbers slowing down and that would possibly reflect on the negative side on the topline and on the bottomline and no doubt that generating finances or creating finances for their projects would be difficult. But I think it would be on a slower pace and as some of the reports rightly pointed out that four wheelers companies have slowed down their projects and expansion capacities going forward. "

"So I would guess Rs 435 or even Rs 400 or even Rs 375 would take a very long time for it to possibly come to those kinds of levels but anything in excess of Rs 225 would reduce some part of the loss. But I would recommend that unless you have three-four years kind of timeframe, I do not think it would be advisable to get invested into any of the four wheeler companies."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Shree Renuka Sugars can test Rs 71: Bose

Technical Analyst, Rajat K Bose is of the view that Shree Renuka Sugars can test Rs 71.

Bose told CNBC-TV18, "Sugar can show a short-term rally provided the Nifty doesn’t backfire in a big way. Shree Renuka has got maximum strength in the sugar space and once it touches Rs 66 then there would be some resistance. Beyond that may be Rs 71 also could be scaled up."

Disclosure: Analyst doesn't hold the above stock.

Source: Moneycontrol

Hold PSU banking stks: Dhawan

Sajiv Dhawan of JV Capital Services is of the view that one can hold PSU baking stocks.

Dhawan told CNBC-TV18, "Banking is a sector, which has been liked probably for two reasons. Over the next coming one year, the sector has been heavily sold off but again it obviously had a good bounce of 20-30% from the lows, on today’s news you must have seen all the banking stocks again rally sharply. It is one sector with the constant flow of good news will probably remain in the limelight, so hold on to your PSU banking stocks. Private sector banks can be bought with a bit more speculative money considering the liquidity situation, the fear that investors have for those banks at the moment. But otherwise it is a sector; I won’t be in any particularly in hurry to get out of just yet."

Source: Moneycontrol

Sell Suzlon Energy on advances: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that Suzlon Energy for short to medium-term players is actually a sell on advances because there is going to be huge amount of overhead supply coming in from players who are trapped at higher levels.

Bhambwani told CNBC-TV18, "Suzlon for short to medium-term players is actually a sell on advances because there is going to be huge amount of overhead supply coming in from players who are trapped at higher levels. So up moves are likely to be much laboured."

He further added, "As far as Satyam is concerned I think this is one of the more top heavy frontline technology counters and short to medium-term investor should actually use any kind of advance to get out of this stock."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

PSU banking space looks attractive: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that PSU banking space looks attractive at current level.

Bhambwani told CNBC-TV18, "If one has the patience to wait for at least four more quarters even current levels seem like an attractive proposition because they have been beaten down very mercilessly in the last couple of weeks. So, I think leading with SBI, I do hold a lot of fond hope with the PSU banking space."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Current rally to go on, eco growth seen lower: JP Morgan

Adrian Mowat of JP Morgan expects the current market rally to continue. He believes the markets have already seen the worst in terms of price correction.

According to Mowat, economic data from developed countries was very disturbing.

The US, Mowat said, has seen the worst consumer recession since 1940s. "The world is moving into a period of significantly lower economic growth."

He feels India’s capital expenditure plans and growth rate forecasts need to be reduced. He expects inflation to ease as consumer spending slows down

Source: Moneycontrol

Worst for mkts to be over by mid-2009: CLSA

Sharmila Whelan of CLSA said the Reserve Bank's rate cut was bigger than expected. She expects another 100 bps cut in CRR and a 150 bps cut in repo.

According to Whelan, CLSA's GDP forecast for FY09 and FY10 is unchanged at 7.3% and 6.5%.

She said inflation is falling, but it will continue to eat into consumer spending.

The credit crunch and lower profit margins are impacting capex spending, she said. “The effects of interest rate cuts will emerge only after some time.”

Commenting on the markets, Whelan feels the worst would be over by mid-2009 and she sees the next business cycle by 2010.

Source: Moneycontrol

US financial institutions owe executives over $40 billion

Amid the uproar over slashing salaries to top management executives, American financial institutions receiving assistance from the Federal
government owe more than 40 billion dollars in pay and pension to its executives up to the end of 2007.

An analysis by The Wall Street Journal showed that financial giants getting cash injections owe over 40 billion dollars for the past year's pay and pension.

The US government recently announced an economic bailout package of 750 billion dollars, which included buying stakes in banks, and once the government becomes a stakeholder, these entities are required to have restrictions on executive pay.

"... Overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces," the report pointed out.

The sums are mostly for special executive pension and deferred compensation, including bonuses, for previous years. Because the liabilities include stock, they are subject to market fluctuation. Given the stock-market decline of this year, some may have fallen substantially, it added.

According to the report, the liabilities at Goldman Sachs Group are 11.8 billion dollars, at JPMorgan Chase about 8.5 billion dollars, and at Morgan Stanley 10-12 billion dollars.

The Wall Street Journal said that except Goldman Sachs, few firms report the size of these debts to their executives.

"In most cases, the Journal calculated them by extrapolating from figures that the firms do have to disclose. Most firms haven't set aside cash or stock for these IOUs. They are a drag on current earnings and when the executives depart, employers have to pay them out of the corporate coffers," the report said.

Source: EconomicTimes

Economic plans of John McCain

Economic plans of John McCain

4 Nov, 2008, 1716 hrs IST, REUTERS

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Presidential candidates John McCain and Barack Obama this week unveiled new plans to head off a recession and help boost economic growth as government officials cope with a financial crisis that threatens economies around the world. Here is a summary of their competing plans.

Republican John McCain proposed a $52.5 billion plan that would:

• Use $300 billion of the $700 billion financial rescue package recently enacted to buy troubled mortgages and replace them with manageable fixed-rate mortgages.
• Reduce taxes on the first $50,000 of withdrawals from IRA and 401(k) retirement accounts to 10 percent for the next two years. Currently withdrawals at retirement are taxed at regular income tax rates which range from 10 percent to 35 percent.
• Suspend rules that require retirees to begin withdrawals from retirement accounts six months after they reach the age of 70. The delay would allow retirees to ride out the current market crisis and stock market decline.
• Increase the amount of capital losses from the sale of stocks and other assets that can be written off against ordinary income to $15,000 from $3,000.
• Reduce the top tax rate on long term capital gains, currently at 15 percent, to 7.5 percent for two years.

Exempt unemployment benefits from taxes for two years.

Source: EconomicTimes

Economic plans of Barack Obama

Democrat Barack Obama proposed a $60 billion package that would:

• Give businesses a $3,000 refundable tax credit for each new full-time employee hired in the United States over the next two years.
• Allow small business to immediately write off up to $250,000 in spending for new equipment and property through the end of 2009. The stimulus package enacted earlier this year provided for the $250,000 investment expensing limit only through the end of this year.
• Eliminate capital gains taxes on investments in small businesses.
• Make $25 billion immediately available for the construction and repair of roads, bridges, schools and other infrastructure.
• Make $50 billion in loan guarantees available and keep other options open to help U.S. automobile manufacturers retool and develop a new generation of fuel efficient cars. Congress has made $25 billion available.
• Provide a permanent tax cut of $500 for most individual workers and $1,000 for families. Eliminate taxes for seniors making up to $50,000. The tax cuts would be expedited through refunds based on 2007 tax returns.
• Extend unemployment insurance for long-term jobless workers who have exhausted their benefits. Temporarily suspend taxes on those benefits.
• Temporarily allow penalty-free withdrawals of 15 percent from tax-preferred retirement accounts up to $10,000.
• Suspend rules requiring retirees to begin withdrawing from retirement accounts six months after they reach the age of 70.
• Increase home heating cost aid.
• Instruct the Secretaries of the Treasury and Housing and Urban Development (HUD) to use their existing authority to more aggressively modify the terms of mortgages.
• Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging more mortgage restructuring.
• Implement a 90 day foreclosure moratorium for homeowners making good faith efforts to pay their debt.
• Provide $25 billion to states to help them cope with the economic downturn without having to raise property taxes or cut vital services.
• Provide a 10 percent refundable tax credit for mortgage interest to taxpayers who do not itemize their returns.

Source: EconomicTimes

Realty stocks ride high on FM's assurance

As the Finance Minister assured housing and SME sectors of adequate liquidity availability and hoped that interest rate cuts will help credit
flow more freely, realty stocks surged by as much as 12.14 per cent on the Bombay Stock Exchange on Tuesday.

Reflecting the upbeat mood of the realty stocks, the BSE Realty index turned best performer among sectoral indices, with a hefty rise of 260.16 points, or 12.14 per cent, at 2,402.44 points after touching an intra-session high of 2,436.93 points.

All the 14 components of the sectoral indice recorded gains in the range of 2.31 to 14.66 per cent.

Sentiments turned bullish after Finance Minister P Chidambaram's statement that adequate liquidity would be provided to housing sector. RBI would soon take a decision on extending a line of credit of Rs 10,000 crore to the National Housing Bank to ensure that adequate funds were available for the housing sector.

Stock analysts said expectations that state-run banks would ill interest rates following a slew of measures announced by RBI last week-end accelerated buying interest in realty stocks, one of the hardest hit segments on the bourses.

They said the cut in rates would improve liquidity in the market and lower borrowing cost for corporates.

Source: EconomicTimes

Rupee posts biggest single-day gain since 1998

The rupee posted its biggest single-day gain in more than a decade on Tuesday, driven by another rise in shares, heavy dollar sales by a larHow are exchange rates determined?
ge corporate, and the unwinding of long dollar positions by banks.

The partially convertible rupee closed at 47.69/71 per dollar, 2 percent stronger than 48.64/65 at Monday's close. Last week, the rupee had dropped to a record low of 50.29.

It was the biggest single-day gain for the rupee since Jan. 19, 1998, when the rupee had risen 3.6 percent after the central bank had taken a number of steps including a hikes in the cash reserve ratio, repo rate and bank rate.

"There was a lot of dollar supply and no real demand in the market," said Agam Gupta, head of forex trading at Standard Chartered Bank. Dealers said dollar inflows from a large pharmaceutical company also helped the rupee rally.

Shares rose 2.8 percent on Tuesday, a fifth straight gain that took them to their highest close in two weeks, on hopes that cuts in bank lending rates would help credit flow more freely and ease a cash squeeze.

Foreign funds bought nearly $500 million of stocks over Friday and Monday. They have sold a net $12.6 billion worth of Indian shares so far in 2008, helping push the rupee down more than 17 percent.

They bought a record $17.4 billion in 2007, when the rupee rose 12.3 percent. "The unwinding of long dollar positions based on the non-deliverable forward rates resulted in large stops being triggered, which led to the all-round dollar selling," the chief dealer with a state-run bank said.

"Closing below 47.75 looks bullish for the rupee, it may strengthen beyond 47 per dollar if it holds near these levels tomorrow," he added. One-month offshore non-deliverable forward contracts were quoting at 48.02/22 per dollar, weaker than the onshore spot rate, but much stronger from 51-52 levels seen last week, indicating some improvement in rupee sentiment.

Source: EconomicTimes

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.