Tuesday, 11 November 2008

13 cos announce buyback



As shares plumb new lows in the market, several companies have started announcing buyback of shares.

Over the past three weeks, 13 companies have announced board approval of buyback plans, SEBI data showed.

EID Parry, Eicher Motors, Ganesh Housing, Gemini Communications, Godawari Power and Ispat, ICI, Maestro Mediline Systems, Monnet Ispat, R Systems, Everest Kanto, IPCA Laboratories and Zen Technologies have announced buyback offers.

The buyback trend is not surprising, said Mr Nitin A. Khandkar, Senior Vice-President at Keynote Research. “During such market conditions, the promoters of the companies feel that the shares should be at better valuations and hence buy back their shares. Such buybacks increase the earnings per share as the company’s equity is lessened to the extent of the bought-back shares.”

Numbers


The buyback offers approved are between Rs 4 crore and Rs 99 crore. “This is not that big a number compared to the meltdown in the financial markets,” said Mr Prithvi Haldea, Chairman and Managing Director of Prime Database. Companies that have announced buybacks are not big ones and the amount they are buying back is small, he added.

Mr Gopalakrishnan P., Vice-President-Finance, EID Sugar, said: “The company believes that its market valuation is lower than its real value. The buyback arrangement provides an opportunity to the shareholders to sell their shares.” EID Parry announced that they would buy back 29.27 lakh shares from the public at not more than Rs 160 a share.

Attractive Prices


Most companies’ buyback prices are much higher than current market prices.

Isn’t it cheaper for the companies to buy it directly from the market rather than paying a higher buyback price? Unless the buyback offer is attractive, investors will not tender their shares, said the broker. Open market purchases restrict the buyer to a 5 per cent stake buy a year, otherwise open offer conditions would be triggered, he said. A buyback could be for a larger stake and can go on for a period of one year.

“Most of the shares are trading below their intrinsic value now, which is why buybacks are on the rise. And by taking the buyback route the companies are trying to infuse some investor confidence,” said Mr Alex Mathew, Head of Research at Geojit Financial Services.

Source: TheHinduBusinessLine

Day Trading Guide - November 12, 2008



ICICI Bank

Initiate fresh short position if the stock declines below Rs 425, with tight stop loss.

Infosys

The near-term outlook is bearish for the stock. We recommend a sell in this counter.

L&T

As long as the stock trades above Rs 835, the outlook remains positive. Buy the stock in dips with tight stop-loss at Rs 835.

ONGC

After encountering resistance at around Rs 800, the stock tumbled almost 9 per cent in the last trading session and it appears to have resumed its downtrend. We recommend a sell.

Reliance Capital

Utilize rallies to sell the stock with stiff stop loss at Rs 672.

Reliance Communications

Fresh short position can be initiated if the stock declines below Rs 214 with tight stop-loss.

Reliance Industries

We recommend a sell in this stock.

Satyam Computer

Initiate fresh short position if the stock breaches Rs 261 with tight stop-loss.

SBI

Desist trading in this counter for the session.

TCS

Initiate short position if the stock reverses from the key resistance level of Rs 551 with tight stop-loss.

(The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop-loss level is breached. There is a risk of loss in trading)

Source: TheHinduBusinessLine

EIH (Rs 83.45): Buy



We recommend a buy in EIH from a short-term trading perspective. It is evident from the charts of EIH that it has been on a medium-term downtrend from its September peak of Rs 172, gradually forming lower troughs and lower peaks.

However, the stock recently found support at around Rs 75 (June 2006 trough) and in pausing there. As the stock recovered from this long-term support level, the medium-term downtrend appears to have been arrested. The stock is currently testing the medium-term down trendline. The daily relative strength index (RSI) is displaying bullish divergence, signalling trend reversal and is heading towards the neutral region from the bearish zone.

The weekly RSI is recovering from the oversold territory. Moreover, the moving average convergence and divergence is indicating a buy, supporting our view. Our short-term forecast for the stock is positive. We expect the stock to penetrate the down trendline and rally until it hits our price target of Rs 92 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.

Source: TheHinduBusinessLine

GM shares hit 65-year low amid liquidity concerns

DETROIT (Reuters) - Shares of General Motors Corp plummeted 15 percent to a 65-year low on Tuesday, extending recent steep declines on lingering concerns that the automaker's cash holdings might fall below the necessary minimum during the first quarter.

Shares of other automakers and parts suppliers also declined across the board amid increasing concerns over whether the industry could survive a deep downturn in U.S. auto sales.

Credit analysts at JPMorgan said on Tuesday GM has several options to improve liquidity, but added that the No. 1 U.S. automaker's short-term survival will require the help of the government, the company's suppliers, or both.

While government aid would decrease the risk of a bankruptcy, analysts have warned that any assistance would come at a significant cost to existing shareholders.

The White House said on Tuesday it was open to considering any proposals from Congress to accelerate loans to the ailing U.S. auto industry from the already-appropriated $25 billion package.

GM's shares were down 15 percent, or 51 cents, at $2.85 on the New York Stock Exchange. The stock earlier dropped as much as 18 percent to $2.76, its lowest level since 1943.

GM shares have lost nearly 40 percent since Friday when the company reported a deeper-than-expected third-quarter loss and said its cash burn rate had accelerated, as an extended slump in car sales raised questions about the future of the U.S. auto industry.

GM announced additional steps to increase liquidity, but said that even with those moves, liquidity would be at or near the minimum needed to run its business through the rest of 2008 and would fall significantly short of the minimum needed during the first two quarters of next year.

Shares of Ford Motor Co fell 8.3 percent, or 16 cents, to $1.77, while auto parts supplier Lear Corp slumped 19 percent, or 32 cents, to $1.35.

Glaxo steps up job cuts with UK factory closure

LONDON (Reuters) - GlaxoSmithKline, the world's second biggest drugmaker, said on Tuesday it planned to close its Dartford manufacturing site in south-east England by 2013 with the loss of 620 jobs.

The decision to close the facility reflects falling demand for drugs made at the site as patents expire. It is part of an ongoing review of operations across the group by Chief Executive Andrew Witty, who has made increased efficiency a priority.

Last week, Glaxo told staff it was axing 1,000 sales jobs in the United States by the end of 2008, as it reorganises the operation there to compete in an increasingly tough market.

Earlier this year, it announced plans for 1,200 job cuts in research and development.

Downturn may tighten Mafia grip on Italy's economy

ROME (Reuters) - Italian shopkeepers pay about 250 million euros a day to Mafia protection rackets and loan sharks and fear the current downturn could allow the mob to further tighten its stranglehold on the vulnerable economy.

The warning came on Tuesday from the Italian shopkeepers' association Confesercenti, many of whose members are frightened into paying the "pizzo" -- as protection money is known -- to the various regional crime groups in southern Italy.

"The economic crisis makes the Mafia even more dangerous," said Confesercenti Chairman Marco Venturi, presenting a study called "Crime's Hold on Business".

"Mafia businesses threaten to use the economy's weakness and uncertainty to strengthen their position," he said, urging banks and government to secure credit so that desperate firms do not turn to loan sharks, though an estimated 180,000 already have.

The four biggest mafias -- Calabria's 'Ndrangheta, Sicily's Cosa Nostra, Naples' Camorra and Puglia's Sacra Corona Unita -- make up "a huge holding company with total turnover of about 130 billion euros ($165.6 billion) and profits approaching 70 billion euros".

This chimes with recent data suggesting that these groups' combined earnings would make them the biggest company in Italy, equivalent to a large chunk of the country's economic output.

Interior Minister Roberto Maroni said last month that the 'Ndrangheta alone, which, with its hold on the European drugs market, has outgrown the Cosa Nostra, makes 45 billion euros a year, which he said was "almost 3 percent of GDP".

The new study focused on Mafia activities directly relating to the business world, from protection money and usury to night clubs, restaurants, building, butchers, fish markets, bakeries and even funerals -- a commercial empire worth about 92 billion euros a year or 6 percent of the economy, the association said.

"Every day a huge mass of money goes out of the pockets of Italian shopkeepers and entrepreneurs and into those of the mafias, something like 250 million euros a day, 10 million an hour and 160,000 a minute," said Confesercenti.


EXECUTIVE PAY

The study, drawing on information from Confesercenti's huge network of members and its own Mafia research arm, SOS Impresa, even gave estimates of pay structures in the mob, ranging from 10,000-40,000 euros a month earned by a "Clan chief or CEO" to the 1,500 euros paid to a racket "enforcer" or a drug pusher.

It detailed the going rates for protection money in Sicily and Naples, with building sites forking out 10,000 euros a month to avoid sabotage, supermarkets 3,000-5,000 a month, small shops 200-500 and market stalls handing over a few euros a day.

There were stomach-churning tales of the mafia in the food industry, from shady butchers repackaging rotten salami or meat from diseased livestock to bakeries using unsafe fuel for ovens -- "in some cases wood from coffins after bodies were exhumed".

Italy's centre-right prime minister, Silvio Berlusconi, has promised to deal decisively with organised crime, as grass-roots movements in Sicily and Naples increasingly urge businesses to refuse to pay the "pizzo", despite the threat of violence.

But Confesercenti warned against the "double morality" of some businesses who obey "the rules of the state and the market when they operate in northern central Italy but adapt very easily to mafia rules if they have interests in southern Italy".

Thousands flock to see Nepal's mystery "Buddha" boy

KATHMANDU (Reuters) - Thousands of people flocked to a remote jungle in southeast Nepal to see a boy, some believe is a reincarnation of Lord Buddha, who reappeared after missing for more than a year, police said on Tuesday.

Seventeen-year-old Ram Bahadur Bamjon spoke to devotees from nearby villages on Monday in the remote forest in Ratanpuri, 150 km southeast of Kathmandu, Prakash Sen, a police constable said.

Bamjon made international headlines in 2005 when tens of thousands of people turned up to see him sitting cross-legged under a tree in a dense forest for nearly ten months, reportedly without food and water.

Hundreds of devotees, including many from neighbouring India are trekking the five-km site to see him on Tuesday, Sen said.

"He spoke to the devotees standing near a temple in the forest," Prakash Sen said after a visit to the site.

"He had shoulder-length hair and had his body wrapped in a white cloth."

"Since many people are walking to see him, I think he has some of the qualities Lord Buddha had," he said.

Buddha, the founder of Buddhism, was born a prince in Lumbini, a sleepy town in Nepal's rice-growing plains about 350 km southwest of Kathmandu more than 2,600 years ago.

He is believed to have attained enlightenment at Bodh Gaya in Bihar, which borders Nepal.

Philips develops "intelligent pill"

Dutch group Philips has developed an "intelligent pill" that contains a microprocessor, battery, wireless radio, pump and a drug reservoir to release medication in a specific area in the body.

Philips, one of the world's biggest hospital equipment makers, said on Tuesday that the "iPill" capsule, measures acidity with a sensor to determine its location in the gut, and can then release drugs where they are needed.

Delivering drugs to treat digestive tract disorders such as Crohn's disease directly to the location of the disease means doses can be lower, reducing side effects, Philips said.

While capsules containing miniature cameras are already used as diagnostic tools, those lack the ability to deliver drugs, Philips said.

The "iPill" can also measure the local temperature and report it wirelessly to an external receiver.

The company plans to present the "iPill" at the annual meeting of the American Association of Pharmaceutical Scientists (AAPS) in Atlanta this month.

The iPill is a prototype but suitable for serial manufacturing, Philips said.

Source: Reuters

Fall of largecaps brought Index under extreme pressure : Udayan Mukherjee

Bad news today. I am afraid after yesterday’s move up in the market, today there was hope but it just collapsed; 700 points down on the Sensex, 200 points down on the Nifty. These are very sharp cuts which have opened up 6-7% cuts on the index that’s really bad going. It did not look like that early in the day because Asia seems to be dealing with that last minute reversal in the US quite well, most markets were very flat in the morning but as the day progressed Asia started coming off and India started coming off quite a bit. So from the middle of the day onwards it was just one way and that was down. Europe opened up quite weak while we were trading, the Dow futures was also pointing downwards and all of those global cues went into that 700 point cut that we finally came away with.

All the stocks which helped the market up yesterday whether its capital goods and infrastructure they were down led by the BHELs and ABBs of the world whether its real estate led by DLF and Unitech and the metal space which was the big mover yesterday on the way up but all those gains got wiped out today whether its Hindalco, Tata Steel, Sterlite or SAIL they all got pounded 10%-12%.

What is worse were all the largecap pillars of the index like Reliance Industries, ONGC, ICICI Bank and Bharti Airtel, they collapsed between 7%-10% and that brought the index under extreme pressure.

In the internal, the volumes were higher today by about 10,000 crore. That’s disturbing that on the day up the volumes were lower, on the day down the volumes have picked up.

Source: Moneycontrol

Earnings in Asia to fall 20% next year: Merril Lynch

Mark Matthews, Chief Asia Strategist, Merrill Lynch, expects earnings across Asia to fall by at least 20% next year year-on-year. Consensus forecast a 10% earnings growth for Asia next year. He, however, said it wouldn’t have an adverse effect on markets. “The markets are virtual, whereas the economy is real. The markets have already discounted this [earnings]. I don’t mind the fact that analysts are still far too high because the market is much smarter and has already efficiently discounted the recession that we are going to experience next year.”

Source: Moneycontrol

Sensex to bottom around 7,650: Dhiraj Agarwal

Independent Analyst Dhiraj Agarwal sees a decent rally in markets by the year-end. He considers 7,650 levels as bottom for the Sensex. "Bad news in the short run has been discounted. I see the Sensex broadly in a range of 12,500-13,500."

Source: Moneycontrol

Good time to invest in equities: Vallabh Bhanshali

Vallabh Bhanshali, Chairman of Enam Securities, sees no serious selling and feels this is a good time to invest in equities. He feels that the volatility in the market is reducing and that has prevented investors from buying. He said that concerted global monetary and fiscal action was a positive cue. He added that costs and working capital have fallen drastically and that was another positive cue for the market. He believes prices have become very attractive from a long-term perspective.

Bhanshali said that the company was very confident about investor-fear giving way to evaluation and added that he has not changed his long-term fundamental view about strong companies.

Bhanshali feels that short-term investors would continue to be cautious.

Bhanshali fears that projects stuck half way are going to suffer but said that planned projects would do well. He added that big companies would find it easier to tap capital in the next few months. He feels companies are confident about managing their bottomline due to falling costs.

Source: Moneycontrol

Luxury duplex apartments in Mumbai left without buyers

The project, however, currently does not have any takers. The last sale was reported in February, when two duplexes were sold in the building

Duplex apartments in a posh Mumbai neighbourhood that could cost Rs100 crore and offer stunning views of the Arabian Sea have failed to find a single buyer in eight months, reflecting the telling impact of a realty slowdown.

Morarka Bungalow on 29, Nepean Sea Road, in south Mumbai, not far from Altamount Road—recently tagged the world’s 10th most expensive street by Wealth Bulletin published by News Corp.—is being rebuilt from a palatial colonial bungalow into a high-rise. At Rs80,000 per sq. ft, each of the 12,000 sq. ft duplexes in the building would cost some Rs100 crore.

The project, however, currently does not have any takers. The last sale was reported in February, when two duplexes were sold in the building.

Sea-facing residences have always been in great demand in the city, more so given their extremely short supply. Most are sold privately by invitation only.

The current economic depression, it seems, has not spared even the country’s uber-rich. In the past six-eight months, sales of the country’s most expensive apartments have stopped, even as sellers struggle to stick to their prices, and network heavily with so-called high networth individuals, the target buyers for such residences.
Priced at around Rs80-100 crore, these apartments are scattered in and around Nepean Sea Road, Malabar Hill and Altamount Road.

To be sure, Pankaj Shah, promoter of Satellite Group, which is developing the Morarka bungalow project, is sticking to his guns. “The building is going to be very exclusive and we will complete it soon,” he said. “I can’t disclose the booking price and status of sale for the project.”

Pujit Agarwal, managing director of Orbit Corp. Ltd, a publicly traded property developer, is candid when he says the last apartment he managed to sell in the Orbit Arya project on Nepean Sea Road was seven months ago at Rs58,000 per sq. ft. Three out of nine apartments in the high-rise remain unsold.

The developer was more cautious with his other project, Orbit Haven, in the same area. To counter the slowdown, the builder has shrunk the apartments, from 4,500 sq. ft to 2,500 sq. ft, with a sticker price of Rs55,000 per sq. ft.
The results have not been markedly different.

“We thought bigger the flats, the more expensive they become, and hence more difficult to sell,” said Agarwal. “But we have sold only two out of 18 apartments since we opened bookings in April.”

The last big ticket sale in south Mumbai was in May 2007—a Rs30 crore apartment bought at Rs1.2 lakh per sq. ft by actor and Bharatiya Janata Party MP Vinod Khanna in the Il Palazzo building on Malabar Hill.

Property prices spiralled upwards from 2005 when even resold properties in the financial capital were going at unbelievable prices. In December 2006, a 3,000 sq. ft apartment at Maker Tower B in Cuffe Parade was sold at Rs73,000 per sq. ft and another flat in the high-profile NCPA building on Marine Drive was resold at Rs63,000 per sq. ft.

“Apartments, particularly big ticket ones above Rs25-30 crore, are getting difficult to sell. Demand is down and that has reflected in the sales,” said Abhisheck Lodha, director of Lodha Group.

The company’s project Lodha Solitaire on Nepean Sea Road, which has only nine apartments, one to a floor, has 20% of the stock left, the last sold about nine months ago, Lodha said.

A south Mumbai property consultant said another residential project with 11 apartments on Altamount Road hadn’t sold a single flat since it opened for bookings six months ago. The price quoted for the 5,500 sq. ft apartments was about Rs55,000 per sq. ft at that time. “The project got the occupancy certificate six months back and now the sellers are willing to negotiate at a price of Rs30,000-35,000 a sq. ft as well,” the consultant said on condition of anonymity.

Agarwal says current market conditions have also propelled him to consider leasing out his upcoming project rather than waiting to sell or sell at a lower price.
S.G. Maheshwari, former chairman of lobby group Estate Agents Association, said he doesn’t expect sales to gain in the next six months. “Developers will compromise heavily on their profit margins because they can’t afford to sit on such expensive properties without selling them,” he said.

Financial services firms on hiring spree as talent freed up

Credit Suisse Global has added four senior executives to its investment banking team in India in the past three months

Layoffs, sackings and pink slips may be the buzzwords for most companies cutting across sectors, given the pressure on them to reduce costs in the face of global financial turmoil and a slowing domestic economy.

But some financial services firms in India are hiring, and there’s no shortage of jobs, at least for the top names and at senior management levels, as the global crisis frees up talent and lowers salary expectations. It’s also a sign of companies betting on India’s long-term growth prospects.

“With the current turmoil in the market, good talent is far more accessible now,” says Shalini Kamath, managing director for corporate communications and human resources at Ambit Holdings Pvt. Ltd, a Mumbai-based financial services firm. “We look at this as an opportune time to grow our team strength and consolidate our businesses.”

The devastation of the financial services industry in the US has led to tens of thousands of job losses in the world’s biggest economy and spread contagion to Europe and Asia. Bear Stearns Companies Inc. was acquired by JPMorgan Chase and Co., Lehman Brothers Holdings Inc. filed for bankruptcy and Merrill Lynch and Co. sold itself to Bank of America Corp. in the US financial meltdown.

Ambit hired three top bankers from DSP Merrill Lynch (now renamed DSP BlackRock) in India in September. They include Andrew Holland,Vaibhav Sanghvi and Piyush Shah. Holland joined as the chief executive officer for institutional equities and equity proprietary trading at Ambit Capital Pvt. Ltd, while Sanghvi and Shah joined, respectively, as director and vice-president in charge of equity proprietary trading.
The company also hired Nikhil Puri as managing director of corporate finance. Puri moved to Ambit and India from Bear Stearns, where he was managing director in the beleaguered investment bank’s global industries group. Ambit says it will continue to look for suitable talent.

Credit Suisse Global has added four senior executives to its investment banking team in India in the past three months. In October, it hired Sai Tampi as a director and head of multi-asset class solutions, a part of Credit Suisse’s asset management division in India.

Tampi moved from HSBC Investments in India where he was working as senior vice-president and head of portfolio management. In September, Credit Suisse hired Pankaj Kalra from DSP Merrill Lynch in Mumbai as managing director in its India investment banking division to handle select large-cap clients in the energy, industrial and telecom sectors.

A month before that, the firm appointed Sughosh Moharikar and Samita Shah who joined as managing directors of its investment banking division. Moharikar joined from banking and financial services company Kotak Mahindra Group, where he worked as executive director and head of mergers and acquisitions, while Shah moved from Lehman Brothers’ Indian unit, where she was managing director and co-head of the Asia special situations team.

Ashim Ahuja moved from Deutsche Bank AG, where he was director, global corporate finance, to join as a director of Credit Suisse’s investment banking team.
“India is a strategic market for Credit Suisse in Asia-Pacific, both in terms of business opportunities and operations support for our businesses globally,” said Josephine Lee, director of corporate communications, Asia-Pacific, at Credit Suisse. “The growth prospects over the medium and longer term in India are excellent.”

JPMorgan Chase is also ramping up its India team. In October, the global financial services company hired Jahangir Aziz as chief economist for its Indian operations.
Aziz came from the ministry of finance where he was the principal economic adviser. Before this, the company had appointed Kalpana Morparia as the chief executive officer of its Indian operations. Morparia, a well-known face in India’s financial services sector, was chief strategy and communications officer and vice-chairperson for insurance, securities and asset management at the country’s largest private sector bank, ICICI Bank Ltd.

Other financial services firms that have been hiring include Avendus Advisors Pvt. Ltd, DLF Pramerica Life Insurance Co. Ltd and Max Bupa Health Insurance Ltd, said search firm executives mandated by these companies to recruit for them.
Avendus, a Mumbai-based investment bank, has been actively hiring people, from analysts to senior managers. The firm, which has at least 100 employees, has increased headcount by 15% over the past three months with a majority of the new recruits being hired for its leadership team.

“The availability of good quality talent is encouraging companies to gun for it at reasonable salaries which was not possible when the market was buoyant,” says Charul Madan, partner at Executive Access India Pvt. Ltd, an executive search firm. For some, it’s preparing for the future. “We are building a state of preparedness within the organization, so when the markets come back to normalcy, we can capitalize on the opportunities the marketplace will offer,” said Ambit’s Kamath.

Source: Livemint

Goldman pegs India’s FY09 growth at 6.7%

The brokerage lowered its GDP growth numbers for FY09 to 6.7% from 7.5% and for FY10 to 5.8% from 7%, Goldman said in a research note on Monday

Goldman Sachs cut its growth forecast for India citing “larger-than-expected shock” to the financial sector over the last couple of months, and its knock-on effects on both domestic and external demand.

The brokerage lowered its GDP growth numbers for FY09 to 6.7% from 7.5% and for FY10 to 5.8% from 7%, Goldman said in a research note on Monday.

“We believe there is little fiscal room for additional stimulus in FY10. We expect growth to trough at a quarterly pace of 5.0% in the April-June quarter of FY10, before recovering to 6.6% by end-FY10. The slowdown, in our view, is very much cyclical in nature,” the brokerage said.

Goldman Sachs said the gathering financial crisis over the past several weeks has affected India’s financial sector significantly, with both domestic and external liquidity drying up. This has impacted the financing for corporates, loans for households, and trade credit for exporters.

Goldman believes the large global and domestic financial sector shock will continue to slow activity across the board, in capex plans, exports growth, and consumption demand.

According to the note, corporates will be hurt. This will in turn impact investment and external demands, and slow down consumption. On the production side, a significant slowdown in construction and real estate, and in industry is expected.
However, the brokerage sees a silver lining. “A large monetary policy stimulus, prospects of a good agricultural crop supporting rural demand, lower commodity prices, and ongoing infrastructure spending would limit further downside to growth,” it said.

Source: Livemint

Fed’s bailout for AIG swells to more than $150 bn

The new AIG package includes a $40 billion chunk of the $700 billion financial bailout

When the government offered an emergency loan to insurer American International Group in September, eyebrows shot up at the $85 billion price tag. Now it looks like pocket change.

The size of the AIG lifeline swelled to more than $150 billion on Monday, a record for a private company. But the head of the broader financial rescue package was cool to other companies reaching for a piece of the bailout pie.

The new AIG package includes a $40 billion chunk of the $700 billion financial bailout. It’s the first time money from the big rescue bill has gone to any company other than a bank.

General Motors, Ford and Chrysler, burning through cash and bleeding jobs, are prodding the government for more help. The leaders of the House and Senate have urged Treasury Secretary Henry Paulson to get some of the $700 billion to the Big Three.

The automakers, covering all their options, are also pushing to get help as part of a new, multibillion-dollar stimulus package for the economy if Democrats push it through Congress when a lame-duck session convenes next week.
President-elect Barack Obama has said his transition team would explore options to provide relief to the auto industry, and President George W. Bush’s press secretary said Monday the White House would “listen to” Congress if they try to help automakers.

Any money would be on top of the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.
Neel Kashkari, the interim head of the $700 billion bailout program, was cool to the idea of funneling the money to companies beyond banks and AIG.

“This morning’s action with AIG was a one-off event necessary for financial stability. It is not the establishment of a new program,” he said at a financial conference in New York.

The original Fed loan to AIG was $85 billion, and the Fed added a $38 billion loan in October. But that has not been enough to firm up the company, which is so big and interconnected to other firms that its failure would devastate the economy.
Under the new plan, the Fed will provide $60 billion in loans. The Treasury will provide $40 billion to buy up preferred stock. And the government will spend close to $53 billion to buy up mortgage-backed assets and other AIG contracts on debt.
Total package: $153 billion. And AIG has also taken advantage of a federal plan to buy up short-term debt routinely issued by companies, known as commercial paper.
The $40 billion going to AIG will buy preferred shares of company stock, giving taxpayers an ownership stake. In turn, restrictions will be placed on executive pay at the firm.

The Fed stepped in with an $85 billion loan in September because the company is so big linked to mutual funds and retirement products held by millions of Americans, not to mention ties to US mortgages that its failure would have devastated the economy.

AIG also came under fire for spending hundreds of thousands of dollars on a California retreat just days after the Fed loan was announced in September.

In other bailout news Monday, mortgage finance company Fannie Mae said it may have to tap a $100 billion government lifeline as early as next year after posting a massive third-quarter loss.

Fannie Mae, seized by federal regulators more than two months ago, posted a staggering loss of $13 per share for the July-to-September quarter, compared with a loss $1.56 a share, for the same period last year.

The company’s net worth what it owns minus what it owes fell to $9.4 billion at the end of September, from $44.1 billion at the end of last year. If that number turns negative, Fannie Mae said it would be required to tap Treasury for help.
The new package for AIG was unveiled as the insurer issued new, bleak quarterly results. It lost $24.5 billion in the third quarter after turning a $3.1 billion profit in the third quarter of 2007.

Under the restructuring, AIG also gets easier terms on the Fed loans, reducing the risk AIG will have to sell off assets at firesale prices to pay back the government.
Fed officials expressed confidence the money would eventually be repaid to taxpayers, and presidential press secretary Dana Perino said it would also be good for the fragile US economy.

Source: Livemint

Top US electronics retailer seeks bankruptcy protection

The filing comes one week after the 59-year-old retailer said it would close 155 US stores, or more than one-fifth of its retail base, and cut 17% of its US work force

Circuit City Stores Inc, the No. 2 US consumer electronics retailer, filed for bankruptcy on Monday just weeks before the start of the holiday shopping season, becoming the largest retailer to file for Chapter 11 since Kmart in 2002.

Circuit City fell victim to tighter credit terms from vendors, a dwindling cash position and decreased consumer spending amid a deepening economic crisis.

The filing comes one week after the 59-year-old retailer said it would close 155 US stores, or more than one-fifth of its retail base, and cut 17% of its US work force.
The retailer and 17 affiliates filed for protection from creditors in US bankruptcy court in Richmond, Virginia, where it is based. Its Canadian operations also filed for creditor protection in an Ontario court.

Analysts said there was now a possibility the company would close more US stores as it negotiates to exit costly leases in Chapter 11.

The company could face an uphill struggle to reorganize and emerge from bankruptcy since credit is tight and consumer spending has plummeted.

US home-goods retailer Linens ‘n Things tried to maintain operations by closing a portion of its stores after its May Chapter 11 filing, but finally liquidated altogether. Last week, smaller electronics chain Tweeter filed Chapter 11 and said it was holding store-closing sales.

Circuit City received court approval for a $1.1 billion debtor-in-possession revolving credit facility that would provide critical liquidity while it reorganizes.
The financing is provided by the lenders of Circuit City’s current asset-based credit facility and enables it to pay vendors and other business partners in the ordinary course for goods and services received after the filing.
Circuit City expressed hope it would be able to emerge from Chapter 11 in the first half of 2009.

In a filing, the company said 1,300 workers were laid off on 7 November. That day, the Richmond newspaper reported that hundreds of workers had been let go from company headquarters.

Source: Livemint

RIL breached gas contract: Jairam Ramesh

The tussle between Reliance Industries Ltd (RIL) and national Thermal Power Corporation (NTPC) does not seem to be nearing an end.

On Tuesday, Jairam Ramesh, Minister of State for Power said that Reliance Industries has breached the gas sale contract that it had with NTPC.

It’s, however, a bit surprising that the Minister passes his judgement on a high profile case that is still being heard in the courts.

Ramesh is not known for taking on corporates head on, but on Tuesday, perhaps exasperated with the delay in the supply of RIL’s gas to its power plants, he criticized the country’s largest company.

The minister said that it is time RIL honours a perfectly valid contract on gas supply.

“There was a letter of intent (LoI) placed on RIL and as far as NTPC is concerned RIL is in breach of that contract. So, there is no dilution at all in NTPC's position whatsoever,” said Ramesh.

RIL's $2.34 per mmbtu bid won NTPC's favour in 2004, but after issuing the letter of intent Reliance refused to sign the final contract saying it cannot supply gas at such a low price.

However, Ramesh's comment may trigger yet another debate, as it’s the first time someone from the government came out and said that RIL has breached the contract with NTPC.

Meanwhile, in a separate litigation that is fought between the Ambani brothers, Mukesh and Anil, over the KG basin gas, the court on Tuesday directed the government to file a separate affidavit on pricing.

But legal sources said that the oil ministry would not do so as the price has already been fixed as per the production-sharing contract.

Source: ndtvprofit

Crisis worst since Great Depression



Chief of JP Morgan Jamie Dimon is a person who many have called the superhero of this global financial crisis. Jamie Dimon has ensured that J P Morgan is not only the biggest bank in America with a market cap of about $150 billion but is also one of the safest banks on planet today.

Dimon avoided JP Morgan taking on sub prime loans and all those derivatives. In fact, that is what makes it so much safer and different from all the other banks.

He has also acquired many major banks and firms recently to make J P Morgan the biggest bank in America. Jamie Dimon is also reported to be at the heart of negotiations with the US government and has been involved in many of the government's rescue plans. So there's no one else who knows about this crisis and what to do about it better than Dimon.

NDTV: Sir, thank you very much for joining us.

Jamie Dimon: It's a pleasure to be here.

NDTV: How bad do you rate the current crisis? The worst in 100 years, 80 years? How bad is it?

Jamie Dimon: Well you know as a student of history I think it's probably the worst since the Great Depression. We've had a lot of financial crisis. We have had them every 5 or 10 years. We have seen the internet bubble, the emerging markets, the Asian crisis of 1997..so I wouldn't take it as far as the Great Depression. I don't expect it to be that bad but that would be the worst.

NDTV: So worst in about 80 years. Now I'm not going to ask you when it's going to end. That's probably the most difficult thing to predict. But for investors, if you could tell us what key indicators, what signs should they look out for that indicate that the crisis is coming to an end and recovery is on its way. What are the key things one should look out for?

Jamie Dimon: I think one of the key things you have already seen and that is taking place is that the Central Banks and the governments in the world are taking very aggressive, bold and often creative never done before kind of actions. They are trying to mitigate the situation. So I think the fact that they can gauge the situation like that is a pretty positive sign. If you are optimistic, you could think that that will start to work over time and that you'll see lib rates come down. The real sign to look in markets will be that companies again will be able to borrow in the market place, they are going to pay more for money, people will demand less leverages in certain companies but they'll be able to raise finance in the balance sheets in the ordinary course of business.

NDTV: So for an average person, say one of our viewers, as an average investor what should he look out for? Is it difficult to know when companies start borrowing and lending again and the confidence comes back? What are the signs that an average person should look out for?

Jamie Dimon: I think the average person will look out for less value for markets. You'll stop reading about financial crisis in newspapers every single day. This will become less and less of an issue and you'll start to see normal functioning of rates and deposits and even the news will spend a lot less time on it.

NDTV: We are looking forward to that actually! Now we've seen this unprecedented package from the US government and many other governments. You've seen it in different varieties, in different parts of the world. Which policies do you think are actually going to have an impact and which ones are little less impactful than we had hoped?

Jamie Dimon: Guaranteeing deposits which a lot of companies have done is very impactful because it really means that any one who invests in a bank knows that they are going to get their money back. Recapitalizing the banks, we know is going to work somehow because if some banks had a cut back on lending, there is lesser need to do that and other banks who didn't need the money can use it for more aggressive purposes. So we do not know exactly how it's going to work because it's kind of unprecedented but I do think that will be helpful. Those two things will play the most important steps that they have done.

NDTV: The US government has given a lot of money to the nine top banks. J P Morgan is safe, it has got adequate capital, capital adequacy is absolutely fine. Why did you take the money if you didn't really need it? Did they force you?

Jamie Dimon: No they didn't force us. I would say that they had a strong opinion about it. What they wanted to do was to inject capital into 9 companies. So it wasn't the stigma to take the money so that a lot of other banks would take the money and it would allow more capital into the banks and reduce the burden on the balance sheet which will make them start to grow again. I actually believe that their argument is a fair argument, they enforced it upon you but they said that if any one bank doesn't do it then the other banks may not do it. We merely spoke to our board afterwards. We did not need the money, we probably needed it less than any one in the room. It's quite clear to me that this is of asymmetric benefit to companies, the weaker you are a company the more you benefit. On the other hand it was good for the system. It was good for J P Morgan but we didn't think that J P Morgan for self assure procure reasons should stand in the way of treasury to do something good for the system. We wanted to be supportive and we thought it was a pretty obvious thing to do.

NDTV: You know in a crisis like this US banks tend to look inwards, solve a lot of their own problems obviously introspective and kind of withdrawn from the emerging markets. Is that happening?

Jamie Dimon: Most likely not to happen with J P Morgan because we are devoted to growing our businesses overseas. I think you may see some banks do that, not because they want to do it but because they don't have the capital to do it at this point. It is possible that you see some banks put back a little bit.

NDTV: Watching all the rescue plans across the world, what do you think the Indian authorities should do for India ?

Jamie Dimon: Well India is doing far better than most of the countries. I think India may slow down a little bit but it is poised to have pretty good growth. So I don't think India should do anything that has been done elsewhere.

NDTV: Yes but say for emerging market countries, what should the authorities do?

Jamie Dimon: In general for emerging market countries I think they have to be prepared for the slowdown in the States, Europe and Japan. Three major economies in the world are on a slowdown and so it will have an effect on them. So if I was in an emerging market country, I would be prepared for some form of stimulus package that includes infrastructure and also make sure that orphanage institutions were sound and that they have the borrowing capability and also check in case they needed some help.

NDTV: J P Morgan came out of this whole terrible crisis relatively unscathed. Actually it is amazing that you didn't get caught in all that subprime stuff. How much of it was luck, how much did you see coming?

Jamie Dimon: If you make a whole long list of problems, then we were engaged in lot less of them. And the ones we were engaged in were in a smaller way. And a lot of that was the risk management of the company. We get very nervous by the subprime early on and cut way back on exposures. We minimized on our exposure levels and lending. We still make plenty of mistakes. We don't travel around and say that we were flawless we make plenty of mistakes. We have a lot to learn so we make sure that we become a stronger company.

NDTV: There is widespread anger or unhappiness among ordinary people on the streets on the amount of money, bonuses and perks that Wall Street and bankers get. Is that anger justified?

Jamie Dimon: I'm a believer that people have complaints; I was really trying to think through whether its right or wrong. There is no question that there was compensation paid in certain cases that wasn't due or shouldn't have been paid. We know that in hindsight. But it is wrong to blanket everyone and to say that everyone did it in exactly the same wrong way. I understand the anger but I think people should be very careful about what are the answers, about how to fix that and what should be done about that.

NDTV: So, what should be done ? Do you feel that if you cut back, you won't get the best talent. Let the market decide or should there be more checks and balances in the remuneration of the top management of banks?

Jamie Dimon: That's a good question. I do think there is a free market out there. Forget the CEO for a second, you have it in sports, you have it in arts, you have it in business where if you want to get the best talent you have to pay for it. If you restrict companies from doing that it will damage the future of the companies. Some CEOs may get what they deserve and some of them don't. I'm not against people paying more. In States there is a big debate about whether people who make a lot of money should pay more in taxes. I have been in complete support of that. People who make a lot of money have been beneficiaries of the country. It is fine for them to spread the wealth in the country. You see the Republicans in United States may help a lot of us to spread the wealth. We have had a progressive tax system since World War I and we should think about society in an equitable manner and taxes are a way of doing that. Boards should be a lot more conscious about how they pay executives. If they do pay executives pay them for the performance for an extended period of time and not based upon the year they won't pay them on excessive risk.

NDTV: You said we're distributing wealth. That's a kind of bad word in these elections and socialism in India is a terrific word. Rightly or wrongly in America it's an awful word. But what the government of America is doing is buying stocks in banks. Does that smack of socialism?

Jamie Dimon: I didn't use the word socialism. I never believed that we've had free markets since I have been in business so what we need are better regulations. When we talk about spreading the wealth then most countries have progressive tax system and that is what I mean. Buying stakes in banks is not really socialism as the US did it earlier also in 1932. It could become socialism if the state actually controls the company as opposed to assisting the company. So it really depends on who you are in the spectrum.

NDTV: Another media report which is probably a little truer. You are in the running for Treasury Secretary. Right?

Jamie Dimon: I honestly don't know. But it's not what I would expect to be.

NDTV: Would that position attract you?

Jamie Dimon: Honestly, I've never thought of myself suited for a government type of job. I love my job and my intent would be to make JPMorgan a great company. We've tried very hard to help our country and I think it's reasonable enough to ask people to help them. J P Morgan has been a fabulous corporate citizen in the United States, in fact wherever we do business.

NDTV: Your answer was not quite a no. If you were actually asked to be the Treasury Secretary, you may accept it the way you accepted $25 million even though you really don't need either.

Jamie Dimon: Well, I don't expect to be asked but if so, I'll consider it based on what they say to me.

NDTV: Why did you support Obama in these elections over McCain ?

Jamie Dimon: I'm not allowed to support or endorse any one and it is known that I'm a Democrat so there is an assumption that I'm a Obama supporter.

NDTV: We won't go down that road since you are under certain restrictions there. Just coming back to India, how is this crisis going to affect your plans for India?

Jamie Dimon: I don't think the crisis affects our plans at all. We are a major investment bank in India and we have expanded our cover to 160 banks now. We will be here and build investment banking, commercial banking and asset management. We are very optimistic about the future of India and I think the country is going to do well over a period of time. We are planning strategy to do things in a bigger and better way. I think when you invest in a country then you do it relentlessly and we want people in India to look at J P Morgan and say you have helped in every way you can.

NDTV: Indians are worried about outsourcing in America and there may be punitive measures for firms that outsource in America. Are you in favour of that?

Jamie Dimon: There is a lot of anti-trade sentiment around the world and it comes from both the left and the right. Personally I think the trade has been a great thing for the world. Most economies' estimate is lifting 2 billion people out of poverty. There are some negatives but for the most part America has been a major beneficiary of the trade. Indians buy a lot of stuff from America which in some effect means you outsource jobs to America. I think we should continue trade and make the world come closer. It is also important that the governments make sure that they have policies in place that will help anybody who is displaced by trade. We've got 12000 people here in the global service centre in addition to the 500 in investment banking, asset management and commercial banking. They do everything from call centre operations, complicated computer programming, risk management to research. It's been great for people here and for J P Morgan and we plan to do more of it and not less.

NDTV: How are you positioning yourself over the next two years?

Jamie Dimon: We've done two acquisitions and if there is a great opportunity well do more. Our troops are tired and you have to make sure you have the capability for it. There may be an opportunity to distract us from all other jobs and we may look at doing it. We want to do something big in Asia and hope to see that opportunity.

NDTV: Thank you Jamie Dimon for being so candid. Great to have you on the show. And congratulations for what you've done so far.

Jamie Dimon: Thank you for having me on the show.

Source: ndtvprofit

Sell or hold?

The Nifty has a very strong resistance at 3200. It can test this resistance this week.

Momentum indicators are very positive for Nifty. Volatility shall also come down as Implied Volatility of Nifty Options are correcting from higher levels of 80 per cent.

However, certainly one cannot term this upmove as the end of bear phase. Unless, Nifty crosses 3650, the markets would continue to be in bear trend and investors should use any rise to sell.

3200 is the first resistance and if momentum breaks this, then Nifty may come close to 3650. But this looks less likely.

Midcap stocks should be avoided as for the next one year action will remain in frontline Stocks.

Gold

Gold has a very strong resistance between $780 to $810. On the downside, there is no meaningful support prior to $650 hence the downside risk remains very significant.

Investors can go long in gold only once it crosses $810 on the upside.

Currency

The rupee gained against dollar last week. Momentum indicators have turned negative for the dollar. However, it has very strong support at 47.07. If it breaks this level, then it can come down to 45.

But looking at the structure, it looks less likely that dollar will come below 47.

Source: ndtvprofit

Amid poor economy, even mighty Harvard struggles

Despite amassing an almost $37 billion endowment, Harvard University is warning that the economic slowdown has reached America's richest university.

President Drew Faust said Monday the school is looking at ways to cut spending and will review compensation costs, which account for nearly half of the budget.

Harvard also is reviewing its ambitious expansion program, including plans announced early last year to expand across the Charles River from its Cambridge campus into Allston, she said.

The university is considering the steps because the economic slowdown may reduce federal grants and the school's substantial endowment, Faust said.

"We need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial restraint," she said.

Harvard's efforts to address the economic downturn mirror what is happening elsewhere in the country, including other Ivy League schools. While wealthy schools can fare better in a downturn, they are also seen as vulnerable to prolonged market slumps because they tend to fund a greater portion of their budget from their endowment.

Dartmouth College has announced that it will cut spending after its endowment, which also makes up about a third of its budget, lost $220 million. That school's trustees blamed the loss on poor returns on stocks and bonds because of the Wall Street meltdown.

Last week, Brown University announced a hiring freeze through January and said it would review its capital budget to determine which projects could be delayed. Cornell University also recently announced a 90-day halt of construction projects and a pause on hiring staff members from outside the university through the end of March.

"Virtually every college and university, their budgets are under strain, stress, for a variety of reasons," said Matthew Hamill, a vice president of the National Association of College and University Business Officers.

Harvard's endowment posted an 8.6 percent return and grew to $36.9 billion in the fiscal year that ended June 30. The school, however, lost 12.7 percent on its U.S. stock portfolio and 12.1 percent on its foreign equity portfolio during that time. Faust's spokesman on Monday declined to say much the endowment has lost during the current economic turmoil.

Still, Faust warned in an e-mail to faculty, staff and students that "we must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered."

The school still intends to implement initiatives to make education affordable to students from low- and middle-income families, and will ensure that those with income below $60,000 will pay nothing to send children to Harvard College. Those earning up to $180,000 can expect to pay no more than about 10 percent of their income, she said.

Graduate and professional schools will keep financial aid budgets at current levels.

Source: ndtvprofit

Indirect tax kitty dips, deepens slowdown fears

Reflecting an industrial slowdown in the face of a global financial crisis, the government's indirect tax collection took a hit, resulting in a five per cent fall in excise and customs collection during October.

First it was a dismal industrial growth rate of 1.3 per cent in August, then 15 per cent dip in exports in October, and now the fall in excise and customs collection from Rs 19,646 crore in October 2007 to Rs 18,664 crore last month, according to the data released by the Finance Ministry on Tuesday.

The decline in indirect tax collection comes at a time when the government is finding it hard to mobilise resources, while expenditure on subsidies and other welfare measures is going up.

The realisation from excise decreased by 8.7 per cent to Rs 9,265 crore from Rs 9,353 crore a year ago, while the collection from customs saw a decline of 0.9 per cent to Rs 9,399 crore as compared to Rs 10,293 crore during the same period last year.

Talking about the global financial meltdown, Prime Minister Manmohan Singh had said recently, "A crisis of this magnitude was bound to affect our economy and it has. International credit has shrunk with adverse effects on our corporates and our banks."

Declining revenue from major heads like customs and excise, coupled with an additional expenditure of over Rs one lakh crore, approved by Parliament recently, will derail the targets for the fiscal and revenue deficits envisaged in the Budget.

The government in the Budget proposed to reduce the fiscal deficit to 2.5 per cent of GDP from 3.1 in the previous year, while the revenue deficit was slated to be brought down to one per cent from 1.4 per cent.

Finance Minister P Chidambaram had indicated that India might exceed the Budget target for the fiscal and revenue deficits as the global economic crisis continues to exert pressure.

However, service tax collection grew by 18 per cent at Rs 5,766 crore during September from Rs 4,888 crore a year ago.

As far as revenue collection in the first seven months

(April-October) of the current fiscal is concerned, the realisation from customs and excise stood at Rs 1,31,943 crore against Rs 1,22,781 crore during the same period last year, showing an increase of 7.5 per cent.

For April-October, excise duty collection was Rs 66,621 crore in October compared to Rs 57,833 crore a year ago.

Worried over the falling excise collection, to check duty evasion, the government introduced a system to assess the liability of assesses through a third party from October.

The government targets a growth rate of 9.3 per cent at Rs 1,36,610 crore in excise duty this fiscal.

Revenue collected from customs duty for April-October was Rs 65,322 crore compared to Rs 64,948 crore a year ago.

Meanwhile, total service tax collected in April-October stood at Rs 29,867 crore compared to Rs 23,204 crore during the same period last year.

Source: ndtvprofit

Going back to the basics of primary market

With markets being cloudy and showing little sign of hope of recovery in near future, this is the right time for ‘foolish investors’ to tune up their doubts on two hot picks of the primary markets, New Fund Offer’s (NFO) and Initial Public Offering (IPO).

‘Foolish investors’ here refers to majority of the investors who put their money in stocks, IPOs and mutual fund on plain tips and rumors and not more often on research which is the foremost requirement.

In fact, many do their required primary research after parking their money in the investment avenue.

IPO is a generally used term for when the company has decided to go public at large by offering its ownership interest.

NFO is a security offering in which an investor may purchase units of a closed-end mutual fund. A new fund offer occurs when a mutual fund is launched, allowing the firm to raise capital for purchasing securities.

(Definition source: Investopedia)

IPO’s and NFO’s are often confused to be same as both represent attempts to raise capital for carrying out further operations.

However, there are striking differences between both of them.

Fundamentals:
IPO is an offering made by an enterprise wherein the promoters sell their stake in the company to public at large in order to raise capital.

Meanwhile, NFO is a first time offering by mutual funds which are investment vehicles that collect money from a large group of investors, pool it together and invest it in various securities in line with their objective.

Based on the principle of ‘strength of numbers’ they prove to be a useful alternative to direct investments by small investors by providing ownership at minimum investment.

Reward/Ownership:

When you subscribe to an IPO in a predetermined bid lot size and price band (process explained below) you tend to get ownership interest in that particular company depending on the final allotment.

Each share you own represents your part of ownership in the company.

However, if you invest in an NFO (or as a matter of fact in any mutual fund) you acquire units of the particular fund and thus indirectly holding in many companies.

But the units you acquire are limited to your invested amount and the Net Asset Value (NAV).

NAV indicates the intrinsic worth of a scheme. It is nothing but per worth of each unit that investors hold.

Suppose, if on July 21, 2008 you want to invest in an IT company with a price band 140-150 and minimum bid quantity of 40, you would have to at least shell out Rs 6,000 ( 40 min bid quantity*150 the cap price)

On the other hand if you had invested the same amount in an NFO of X fund which specializes investing in IT companies, you would balance out your exposure in various companies instead of having single exposure in an IPO.

Pricing:

An IPO today most often is priced based on a book building process (100% or 75%) in which the company issuing the shares comes up with a price band decided together by book lead running managers and the companies.

The lowest price is referred to as the floor and the highest, the cap.

For example if the price band is Rs 90-Rs 105 say, Rs 90 is called the floor price while Rs 105 is called as the cap price.

Bids are then invited for the shares. Each investor states how many shares he/she wants and what he/she is willing to pay for those shares (depending on the price band).

The actual price is then discovered based on these bids, the sizes of which are pre decided.

NFO’s are often heavily advertized as being priced `at-par` when they hit the markets. The pricing can be illustrated as follows:

Suppose you have Rs 1,000 to invest in a NFO having a face value of Rs 10 and a Net Asset Value (NAV) of Rs 100.

Considering the above facts, you ought to get 100 units. Let’s say, the fund invests all the said money in a company A which buys 10 shares at Rs 150 each and after a year, the price of each share reaches Rs 200.

The NAV of your units would be: 200 per share *10 shares/100 units = Rs 20

Thus the value of your units would be Rs 20* 100 = Rs 2,000

Thus, IPO and NFO are instruments of primary market that give investors opportunities to acquire the offering first hand.

While company’s sell their stake in an IPO, NFO is an instrument wherein the fund house collects its corpus money from the investor contribution itself.

However, NFO lacks the IPO edge, which gives a chance to earn instant premium on investment bearing in mind the market conditions.


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Source: Reuters

Investment strategies for the present times

By Rajiv Deep Bajaj, Vice Chairman & Managing Director, Bajaj Capital Ltd


The current times will be imprinted in our memories for a long time to come. Equity markets have gone back to the levels that existed a couple of years back.

It is only natural for us investors to feel disappointed. More so, for those, who have invested in the markets at the peak and for those as well, who were not informed enough to rebalance their portfolios periodically.

Fluctuations are the only constant in stock markets and volatility inherent. Although we are aware of this fact, we get apprehensive whenever we encounter such hiccups.

Countless questions arise in our mind. Is this the right time to enter the market? Will the downfall completely wipe away our investments? Should we exit now and save ourselves from more damage or invest more to average out the cost of investment?

Things can get pretty confusing when the going gets tough.

But, all is not lost. Even at such levels, opportunities do exist. We can make the most of even this situation. While share markets do carry an inherent risk element, smart and meaningful investment strategies are the key to optimizing returns with minimal risk.

•Have a long-term horizon: It pays to have a longer horizon especially in the current times. One would be less perturbed if one knew that their investment horizon is long and that the situation would eventually turn-around.

However, there are other points too. Firstly, what you buy should be well researched and in tune with your investment horizon.

Secondly, once you know that your pick is well sought, give it due time to appreciate.

Finally, if due to some dynamic factors, the performance deteriorates and you find that there is lesser probability of a turn around, exit the investment immediately. Emotions do not help in stock markets.

•A good entry is as important as a good exit: One should know when to invest. This doesn’t mean trying to time the markets. Rather one should avoid becoming a victim of unnecessary euphoria.

Legendary investor Warren Buffet once said – I get fearful when others are greedy, but I get greedy when others are fearful.

It has been seen that the best investments are those which have been made during times of extreme pessimism and panic.

The situation today presents one such rare opportunity when valuations are down to historical levels.

The Price Earnings ratio of S&P CNX Nifty is hovering between 11 & 12, having touched a 10 year low of 10.66 recently, presenting an excellent entry point.

We are in a situation when perceived risk is very high due to extreme pessimism, but actual risk is low as downside is limited. It is in such situations that the rarest of rare opportunities materialize.

The need, therefore, is not to sit tight but to act and capitalize on them.

•Go steady; follow the staggered approach to investing: Markets are presently going through a period of high volatility, characterized by sharp movements in both directions.

Hence, investments in a staggered manner are preferred rather than going for one time lump-sum investments.

A Systematic Investment Plan (SIP) or Systematic Transfer Plan (STP) kind of approach can work wonders in this scenario.

•Size Matters, at least in Equities: This is the time to repose faith in the Goliaths of the industry. Companies like Reliance, Bharti, ITC, ONGC, Larsen & Toubro, etc. are the best bets to survive difficult times.

After all, they are rich in experience, are the best in their business, have deep pockets and have already been through difficult times in the past.

They know how to survive, what to do when things are going bad.

Rather than panicking and shifting your investments from equity to cash, or looking for capital guarantee products, one should actually look to invest more in equities at present, but in a systematic manner.

After all, you need a parachute when you jump from an airplane at a height of 21000 ft, not when you jump from the last step of a staircase.

Moreover, booking losses now and shifting to cash will only give negative real returns and ensure that the chance to recoup your losses is lost.

After all, it will take equities only one day to gain by 5%, but it will take cash more than 6 months to go up by that much!

(You can e-mail Rajiv Deep Bajaj at: rbajaj@bajajcapital.com. The views and opinions expressed are the writer’s own and not those of Reuters. The article above is not intended to be a financial advisory. Readers must seek specific advice from experts before making investment decisions.)

Source: Reuters

Govt asks firms to keep funds with govt-run banks

India's finance minister has urged state-run firms to keep 60 percent of their surplus funds with government-owned banks, a senior official said on Tuesday.

R.S. Pandey, a secretary at the oil ministry, also said state-run firms should not ask banks for higher interest rates on their bulk deposits.

Heads of state-run firms met Finance Minister Palaniappan Chidambaram to discuss their problems in the wake of the economic slowdown.

Source: Reuters

India rejigs spectrum fees for 2G and 3G services

Foreign telecoms firms not currently operating in India but looking to enter the world's fastest-growing market as a third-generation (3G) services operator will have to pay more each year for spectrum.

India's telecoms commission, the apex government body for the sector, has also decided to increase the annual fee for 2G radio spectrum by 1 percentage point across all bandwidths from January next year.

Such a move could hit firms like Bharti Airtel and Vodafone-controlled Vodafone Essar.

The government had earlier said operators winning 3G radio spectrum in a global auction due in January would have to pay 1 percent of their revenue as the annual fee.

But telecoms ministry spokesman Akshay Rout said that would be increased to 3 percent for "standalone" 3G operators.

Existing 2G operators which win 3G spectrum will be charged an annual fee according to their combined bandwidth.

Mobile operators in India at the moment provide only 2G services, and pay annual fee varying between 2-4 percent of their revenue, depending on the spectrum held.

The spokesman said a government proposal to levy a one-time "spectrum enhancement fee" on operators holding more than 6.2 Mhz of 2G spectrum also came up for consideration by the telecom commission but no decision was taken.

Source: Reuters

Wall St opens lower on economic anxiety

U.S. stocks tumbled on Tuesday, pulled lower by concerns that the global economic downturn is worsening.

The Dow Jones industrial average fell 148.86 points, or 1.68 percent, to 8,721.68. The Standard & Poor's 500 Index lost 14.15 points, or 1.54 percent, to 905.06. The Nasdaq Composite Index was down 22.29 points, or 1.38 percent, at 1,594.45.

Source: Reuters

Indian firms say credit still tight, see more steps

Indian firms are still finding liquidity conditions tight despite some aggressive moves by policy makers over the past two months, and more steps might be needed to keep credit flowing, senior executives said on Tuesday.

Analysts increasingly expect economic growth could slow to below 7 percent in the 2008/09 year ending March 2009, with forecasts being downgraded as fears of a global recession grow, from rates of 9 percent or higher in the past three years.

"We have not seen any sharp slowdown in business so far, but there are issues of funding and there are issues of interest rates," K. Chandrashekar, senior vice-president of corporate finance at Mahindra and Mahindra, India's top utility vehicle and tractor maker, told reporters at a corporate treasury conference in Mumbai.

The stock market is down by more than half in 2008, with sales by foreign investors a key factor, and industrial production has fallen away as rising costs and falling demand squeeze corporates.

Industrial output in August grew just 1.3 percent from a year earlier, the weakest rate in a decade, and a purchasing managers' index, based on a survey of 500 companies, dropped in October to the lowest level in its 3-½ year history.

Since the start of October, the central bank has slashed its key lending rate by 150 basis points and cut banks' cash reserve requirements by 350 basis points to keep credit flowing and shore up growth, among other steps.

P.K. Ghose, chief financial officer at Tata Chemicals, said the credit situation had improved, but banks remained wary of lending, especially to companies with high overdraft facilities.

"I expect the central bank to take more measures, and liquidity should ease by January or by the first quarter of 2009," Ghose said. Companies were borrowing at around 12 percent currently compared to around 14 percent earlier, he said.

Source: Reuters

Scope for further RBI rate cuts - PM adviser

The Reserve Bank of India has some scope for further rate cuts and it may act if overnight cash rates move up, a top economic adviser to the Prime Minister said on Tuesday.

"I personally think there would be some scope for further rate cuts," Suresh Tendulkar, Chairman of the Prime Minister's Economic Advisory Council, told reporters when asked whether there was a need to cut the repo rate cut.

He also said he expected the wholesale price inflation rate would fall to single digits by early next year.

Source: Reuters

Buy Wipro, target of Rs 338: KRChoksey

KRChoksey has maintained its buy rating on Wipro with a price target of Rs 338 in its October, 22 2008. "Its revenue increased 8.3% q-o-q and 37.4% y-o-y to Rs 6,535 crore, driven mainly by 5.9% depreciation of the rupee over last quarter. The IT Services revenue grew 4.0% q-o-q and 29.4% y-o-y to USD 1,110 million, ahead of its guidance of USD 1,089 million. Despite muted operating performance, Wipro’s net profit jumped 8.1% q-o-q to Rs 1,136 crore, mainly on account of higher non-operating income, lower interest outlay and lower forex losses as compared to the previous quarter. At the CMP of Rs 279, Wipro is trading at 11.2x its TTM earrings and 10.6x FY09E EPS of Rs 26.4. We maintain a buy on the stock with a target price of Rs 338," 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 Orchid Chemicals; target of Rs 210: Angel

Angel Broking is bullish on Orchid Chemicals and has recommended a buy rating on the stock with a target of Rs 210, in its October 31, 2008 report. “Orchid Chemicals has been in investment mode since the last three years to tap the Regulated markets. Going forward, the company would reap the benefits of its investments. In terms of Earnings, we have already pruned our FY2009 and FY2010 estimates on the back of treating FCCB as a loan. At the CMP, the stock is trading at attractive valuations of 4.5x FY2009E and 3.4x FY2010E EPS. We maintain a Buy on the stock, with a revised 18-month target price of Rs 210 (Rs 340)," 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 Sesa Goa, target of Rs 95: PINC

PINC Research has recommended a buy rating on Sesa Goa with a target of Rs 95 in its October 25, 2008 research report. "Sesa Goa Ltd’s (SGL’s) results were in line with our expectations as it reported net sales of Rs 8.8 billion (+130%) and net profit of Rs 3.4 billion (+260%). Sesa Goa is the largest private iron ore miner in the country, with its portfolio well diversified between export and domestic with spot:contract ratio skewing more towards spot, as it fetches higher realisations."

"The key concern remains of iron ore prices dipping further from the current levels, as mid term demand outlook for steel appears bleak. However, despite the softening global commodity pricing scenario, considering the strong earning potential of the company, (EPS of Rs 26 for FY10) and its cash board, (Rs 35/share), we recommend a ‘BUY’ on the stock with a 12 month price target of Rs 9," says PINC'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.

Buy Petronet LNG, target of Rs 48: KRChoksey

KRChoksey Research has maintained its buy rating on Petronet LNG with a target price of Rs 48 in its October 20, 2008 research report. "Net sales declined 0.9% y-o-y to Rs 1654.9 crore in Q2FY09. EBITDA registered a decline of 15.0% y-o-y to Rs 182.3 crore & PAT decline by 10.5% y-o-y to Rs 103.4 crore. At the CMP of Rs 39.1, Petronet LNG is trading at 6.4x its TTM earnings and 6.3x its FY09E EPS of Rs 6.2. We maintain a buy on the stock with target price of Rs 48. At the target price the stock would be valued at 6.8x its FY10E EPS of Rs 7.0, and 1.5x P/BV, 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 Cairn India: LKP Shares

LKP Shares has recommended a buy rating on Cairn India in its November 6, 2008 research report. "The Group has posted a net profit of Rs 2,933.20 million for Q308 (Rs 232.40 million for Q307). Total Income also increased from Rs 3,001.10 million to Rs 5,261.70 million for the quarter ended September 30, 2008. The main factors for the high growth in revenues include higher oil price realization, weakening of rupee, and revenues from other income."

"We believe that the concerns on the oil prices have been overplayed on the stock. At current valuations, we still favour an investment in the stock with a longer-term horizon. The debt equity ratios remain almost nil, with growing return ratios as a result of commencement of production from Rajasthan. There is an enhanced earnings visibility for CIL, subject to scheduled production of oil & gas. Buy," says LKP Shares' 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 Birla Corp, target of Rs 223: Motilal Oswal

Motilal Oswal has recommended a buy rating on Birla Corporation with price target of Rs 223, in its report dated October 31, 2008. "The on-going brownfield capex plans (1.7mt addition) is on track for completion by June 2009. The first phase of the Satna expansion plan completed during the quarter, increasing capacity from 6,300tpd to 7,400tpd. This expansion would be a key to volume growth in FY10 onwards. Also, the company is planning to set-up 3MT Greenfield unit at Madhya Pradesh."

"The stock trades at extremely attractive valuations of 1.9x FY09E EPS, 0.2x FY09E EV/ EBITDA and at EV/ton of USD 3 (on current capacity of 5.8MT), which is at a significant discount to its comparable peers. We believe the discount is not justified and valuations, based on earnings as well as replacement cost, are extremely attractive. Maintain Buy with target price of Rs 223 (3x FY10E EV/EBITDA)," says Motilal Oswal'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 Punj Lloyd: Anagram

Anagram Research has recommended a buy rating on Punj Lloyd in its November 8, 2008 research report. "The current consolidated order of over Rs 21700 crore is approximately 1.9x FY09 consolidated sales. Going forward, we expect PLL to gain a significant share of the ongoing industrial, Oil & gas and infrastructure capex from diversified geographical reach resulting in substantial topline growth and profitability. Going forward PLL’s foreying into defense will add fuel to the growth."

"We believe that the company reported robust Q2 FY09 numbers, which is better than our expectation, answering medium term concern on PLL’s earnings. Hence, we are keeping our estimates unchanged and are quite confident about its FY09E and FY10E earnings. At CMP PLL is trading 10.47x FY09E and 6.5X FY10 earnings with an EPS of Rs 19.1 and Rs 30.5 respectively. Considering the future growth potential of the company, we recommend a “BUY” 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 HTMT Global, target of Rs 255: PINC

PINC Research has maintained its buy rating on HTMT Global Solutions with a target of Rs 255 in its November 10, 2008 research report. "HTMT Global Solutions Ltd. (HTMT), a member of the Hinduja Group is amongst the Top 15 Indian BPO vendors. Besides developing a well established presence in voice based services such as customer care, it has over the years, diversified into non voice - transaction processing services, which currently contribute 24% of sales. In addition, it is extremely well capitalised to fund future inorganic moves, and we therefore believe it is on the path of transforming itself into a leading BPO player. Thus, we initiate coverage with a ‘BUY’ recommendation and a 12 month price target of Rs 255," says PINC'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

Hold Idea Cellular, target of Rs 57: Emkay Global

Emkay Global Financial Services has recommended a hold rating on Idea Cellular with a target of Rs 57 in its November 7, 2008 research report. "Idea Cellular’ Q2FY09 results with 6% sequential drop in ARPU, 15% decline in EBIDTA, 660 bps fall in EBIDTA margins and 46% decline in PAT, came as big disappointment, mainly on account of the reflection of severe cost pressures towards extensive network rollout."

"With Idea Spice merger likely to be completed by end FY09, we continue to prefer valuing Idea Cellular based on combined (Idea + Spice) entity financials. We revise our target price on the stock to Rs 57 (from Rs 133 earlier) and recommendation from BUY to HOLD. Our target price is based on value of core business at Rs 43 per share (at 25% discount to Bharti Airtel’s core business target FY10E EV/EBIDTA of 8.8x) and value of 16% stake in Indus towers at Rs14 per share (taken at 50% of earlier value of Rs 27," 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

Reduce Bharati Shipyard: Emkay Global

Emkay Global Financial Services has recommended a reduce rating on Bharati Shipyard in its report dated November 3, 2008. "Bharati Shipyard (BSL) reported below expected results in Q2FY09 revenue up 44% yoy to Rs 2.1 billion, operating margins decline 170 bps yoy to 19.6% and net profit grew 29% yoy to Rs 332 million. Management has clarified that FCCB worth Rs2.2 bn (USD 33.1 million) are due for conversion by December 2010 versus Media speculation of December 2008. This addresses the key overhang and investor concern on the company. We will fine tune our earnings estimates for FY09E and FY10E to factor the delays in Dabhol and Mangalore Expansion and higher than expected slowdown in incremental order inflows. Post our initiating coverage with ‘REDUCE’ rating, BSL has corrected by 88%. We will review our ‘REDUCE’ rating amidst sharp decline in stock price," says Emkay Global Financial Services' research report.
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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 Reliance Comm, target of Rs 315: India Infoline

India Infoline has recommended a buy rating on Reliance Communications in its report dated November 3, 2008. "Rcom is likely to add over 38 million subscribers over the next two years on its nationwide dual network underpinned by GSM roll out by end CY08 while Globalcom is expected to continue its healthy yoy growth. However, Rcom’s key metrics like ARPUs have fallen at a faster pace in recent quarters as compared to that for Bharti and margins would probably decline as companies expand in to rural areas with low income subscribers. We estimate sales and earnings CAGR of 22.6% and 15.7% respectively over FY08-10E and, in light of significant price correction, upgrade the stock to BUY but with reduced price target of Rs 315," says India Infoline'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 Rain Commodities, target of Rs 300: PINC

PINC Research has maintained its buy rating on Rain Commodities with a target of Rs 300 in its November 10, 2008 research report. "Rain Commodity Ltd’s (Rain) revenues rose 30% QoQ to Rs 13 billion in Q3CY08, on back of buoyancy in the CPC business and incremental despatches from its newly commissioned cement capacity. Buoyant demand for CPC coupled with stable RPC prices afford strong margin protection and provide visibility for profits in the near term."

"Additionally, the robust performance of the cement business also inspires confidence in the outlook for the company and hence we have revised upwards our estimates. Accordingly, we maintain our ‘BUY’ recommendation, with a 12-month price target of Rs 300," says PINC'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

Indian Overseas Bank an outperformer: ICICIdirect.com

ICICIdirect.com has rated Indian Overseas Bank as an outperformer with a target price of Rs 114 in its November 3, 2008 research report. "Q2FY09 for Indian Overseas bank (IOB) was better then our estimates. The total business of the bank increased 23.8% YoY to Rs 160514 crore. A 16% growth in deposits to Rs 90787 crore and advance growth of 35.8% to Rs 69727 crore contributed to the growth. The advance growth was ahead of our expectations, resulting in PAT growth of 12.3% for Q2FY09 on Y-o-Y basis to Rs 359.1 crore. We revise the target price to Rs 114 (1 x FY10E ABV) and 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 Hero Honda: HDFC Securities

HDFC Securities has recommended a buy rating on Hero Honda Motors in its November 11, 2008 research report. "Higher volume performance and expectation of higher profits, will lead to a strong upside from current levels for HHML. The company had a very low net debt to equity ratio of 0.04x at the end of FY 2008 and an interest coverage ratio of 38x. The company had a strong cash position of Rs 1.3 billion. We have assigned a multiple of 14.7x to our FY 2010E EPS of Rs 71.3 and arrived at a base case target price of Rs 1,048 per share (raw material to sales ratio of 71.3%, excise duty of 12.7% and volume growth of 10% yoy in FY 2010), which translates into an upside of 39% from current levels and initiate coverage with a 'BUY' rating," 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

Buy Jindal Steel and Power: Motilal Oswal

Motilal Oswal has maintained its buy rating on Jindal Steel and Power in its report dated October 31, 2008. "Jindal Steel and Power has completed expansion of steel capacity to 2.3MTPA.Strong volume growth due to ramp up in steel production from 1.4m ton in FY08 to 2.5m ton in FY10. Total power capacity is expected to increase from 1083MW presently to 9000-10,000MW over the next five years. The stock is trading at a P/E of 4.4x FY09E and EV/EBITDA of 4.1x FY09E. Reiterate Buy," says Motilal Oswal'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

Hindalco a market performer: Karvy

Karvy Stock Broking has rated Hindalco Industries as a market performer with a target of Rs 65 in its November 11, 2008 research report. "Hindalco's Q2FY2009 results reflect the benefit of 18% higher realization in aluminium segment at Rs 129,000/tonne, which was partially due to 10% YoY depreciation in rupee against dollar. APAT grew by only 12.0% YoY to Rs 7,200 million. Based on consolidated EV/EBIDTA of 4x of FY2010E (after adjusting for equity dilution due to rights issue and raising of fresh debt), our target price for Hindalco stock is Rs 65. We rate the stock as Market Underperformer," 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 Tata Chemicals, target of Rs 220: Mansukh Securities

Mansukh Securities and Finance has recommended a buy rating on Tata Chemicals with a target price of Rs 220 in its November 7, 2008 research report. "We are positive on the company's profitability on the back of strong expected organic and inorganic segments. We recommended to BUY the stock with a price target of Rs 220. At our target price of Rs 220, the stock would offer 35% upside from current levels," says Mansukh Securities and Finance'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

Binani Industries to consider buy back, stk up 20%

Binani Industries has touched an intraday high of Rs 37.20 and an intraday low of Rs 32.40. At 3:09 pm, the share was quoting at Rs 37.20, up Rs 6.20, or 20%.

As pr BSE announcement, A meeting of the Board of Directors of the company will be held on November 18, 2008, inter alia, to consider, buy-back of shares, amendment to Articles of Association and to fix the date and time for convening an Extraordinary General Meeting of the company.

There were pending buy orders of 9,252 shares, with no sellers available. It was trading with volumes of 177,956 shares.

Yesterday the share closed down at Rs 31.

Source: Moneycontrol

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.