Wednesday 19 November 2008

GM shares at 66-year low amid bailout doubt

DETROIT (Reuters) - Shares of General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) tumbled on Wednesday as mounting political opposition cast doubt over a proposed $25 billion government bailout for the U.S. automakers.

Shares of GM dropped more than 15 percent to a 66-year low, while Ford shares tumbled 23 percent to their lowest level in 26 years.

The stocks extended declines after the chairman of the U.S. Senate Banking Committee said it looks unlikely Congress will come to agreement this week on an assistance package for the struggling U.S. auto industry.

"I'm anxious to see something happen," Connecticut Democrat Christopher Dodd told reporters. "But frankly, the idea that there's going to be a bill, I think, is remote."

U.S. auto executives headed to Capitol Hill for a second day to argue their case for the aid package which they say is imperative for the industry to survive.

Barclays Capital analyst Brian Johnson said the prospect of a compromise between lawmakers remains "elusive" before a potential Senate vote this week.

"Assuming defeat, GM would have to 'run on fumes' until the next Congress and administration, unless Congress were to reconvene in December to address emergency compromise legislation," Johnson said in a research note.

Democrats have proposed a $25 billion bailout for the ailing automakers, on top of the $25 billion in federal loans already approved by Congress to help the industry retool plants and meet new fuel economy mandates.

The proposal has faced stiff opposition from critics including Republicans and government officials, who have questioned whether Detroit automakers would be healthy enough to repay any loans and have remained resistant to spending yet more taxpayer money on corporate rescues.

Republicans and the White House favor a plan to tap the already approved $25 billion in auto retooling loans.

JPMorgan analyst Himanshu Patel said that federal aid is more likely than not, but added it is "clearer now" that the timing of any such aid is not imminent.

GM shares were down 48 cents, to $2.61, the lowest since 1942. Ford shares were down 39 cents to $1.29, hitting a 26-year low.

JPMorgan, Citigroup, BofA hit multiyear lows

NEW YORK (Reuters) - Shares of JPMorgan Chase & Co , Citigroup Inc and Bank of America Corp tumbled to multiyear lows on Wednesday on expectations that deteriorating credit conditions and a contracting economy will weigh heavily on the three largest U.S. banks.

JPMorgan shares fell as much as 9.6 percent to their lowest level in 5-1/2 years, predating the arrival of Jamie Dimon as chief executive. Citigroup dropped as much as 14.1 percent to a 13-year low, and was surpassed as the fourth-largest bank U.S. by market value by U.S. Bancorp, which has one-eighth as much in assets. Bank of America shares fell as much as 10.9 percent to an 11-1/2-year low.

The three banks are in the Dow Jones industrial average .DJI>, and even before Wednesday had lost more than $450 billion of market value from recent highs -- Bank of America in November 2006, Citigroup the next month, and JPMorgan in May 2007.

Investor worries swelled after Credit Suisse analysts said two big, new commercial loans were near default. That fanned fears that credit deterioration that has already saturated the residential mortgage market and worsened in credit cards was heading to a major new area, commercial real estate.

Meanwhile, new government data showed that consumer prices dropped in October at the fastest pace ever, while housing starts that month were the fewest on record. The data showed how fast the already troubled U.S. economy is weakening.

"Part of the dread is about just how bad the financials have been doing," said Alan Lancz, president of Alan B. Lancz & Associates Inc, a Toledo, Ohio investment adviser. "Even in those that are supposed to be the leaders -- JPMorgan, Wells Fargo, Bank of America -- there's just tremendous, continued declines."

Citigroup on Wednesday also said it agreed to buy $17.4 billion of assets remaining in a series of funds known as structured investment vehicles. Such vehicles were among the earlier major classes of investments to implode in the global credit crunch that began last year. On Monday, Citigroup announced 52,000 job cuts.

In afternoon trading on the New York Stock Exchange, JPMorgan shares were down $2.63, or 8.2 percent, at $29.51, after earlier falling to $29.06; Citigroup was down $1.05, or 12.6 percent, to $7.31, after earlier falling to $7.18; and Bank of America was off $1.60, or 10.5 percent, to $13.59, after earlier dropping to $13.54.

Wells Fargo, the second-largest U.S. bank by market value after JPMorgan, was down $1.59, or 5.9 percent, to $25.61 in afternoon trading. Wachovia Corp, which Wells Fargo is buying, fell 34 cents, or 6.5 percent, to $4.92. Merrill Lynch & Co, which Bank of America is buying, fell $1.05, or 9.2 percent, to $10.35.

Day Trading Guide 2 - November 20, 2008


ICICI Bank

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

Infosys

We re-affirm our sell recommendation in this counter.

L&T

In the last trading session, the stock fell by 4 per cent accompanied with high volume, in line with our expectation. We reiterate our sell recommendation in this stock.

ONGC

Initiate fresh short-position if the stock declines below Rs 635 with tight stop-loss.

Reliance Capital

On Wednesday, the stock conclusively penetrated the support level Rs 508 (October low) by tumbling 12 per cent with heavy volume. We recommend a sell.

Reliance Communications

The daily relative strength index of the stock has entered in to the bearish zone from the bearish zone, signalling further weakness. We retain our sell recommendation.

Reliance Industries

The stock lost its entire intra-day gains, experiencing selling pressure at higher level on Wednesday. Initiate fresh short-position only if the stock declines below Rs 1,100 with stiff stop-loss.

Satyam Computer

We repeat our sell recommendation.

SBI

The near-tern forecast for the stock is negative. We recommend a sell.

TCS

Sell the stock in rallies while maintaining tight stop loss at Rs 500 level.

Note: In a buy recommendation, the resistances would be the targets and the nearest support would be the stop loss; In a sell recommendation, the supports would be the targets and the nearest resistance would be the stop loss; The recommendation would be valid for today's trading only. 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

National Thermal Power Corporation (Rs 136): Sell


We recommend a sell in National Thermal Power Corporation from a short-term horizon. From the charts of NTPC, we note that it has been on a long-term downtrend since its life-time high of Rs 291 (January peak). However, the stock found support at Rs 113, a 52-week low recorded in late October and began to move up. The stock’s up move did not last long and it encountered significant resistance at Rs 165 and resumed the downtrend recently. The downtrend of the stock began to strengthen as it penetrated the 21-day moving average by declining almost 8 per cent on November 18. We observe that the daily relative strength index has entered in the bearish zone and the weekly RSI also re-entered this zone. We are bearish on the stock from a short-term perspective. We expect the stock’s current decline from the resistance level of Rs 165 to prolong further until it hits our price target of Rs 120 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 144.

Source: TheHinduBusinessLine

Day Trading Guide - November 20, 2008



Source: BseNseTradingCalls

India to raise spending on infrastructure

NEW DELHI (Reuters) - India is considering ways of increasing investment in infrastructure after the global financial crisis choked inflows in mega projects, a senior official said on Wednesday.

Planning Commission deputy chairman Montek Singh Ahluwalia said the government would draw up an estimate for additional spending on infrastructure projects within the next 10 days.

India needs $500 billion investment to upgrade its creaky infrastructure in the five-year period ending March 2012, to sustain a 9 percent average annual growth in the economy.

But the cash-strapped government is now finding it difficult to speed up work on mega projects as inflows from private and foreign sources started drying up after the global credit crisis.

"In the plan, we have said we need $500 billion or so out of which $350 billion we will be getting anyway. Even in normal circumstances, there was a gap of funding," Ahluwalia told reporters.

"This year, because of credit squeeze resulting from global downturn, the gap is much larger."

"Since recessionary trend in the global economy will continue into the next year 2009/10, it is very important that we plan now so that next year we are ready for a major thrust on infrastructure," Ahluwalia said.

On Tuesday, the finance minister said the government was looking into the problems of export and infrastructure sectors, and a 1.06 trillion rupees extra spending plan would provide the stimulus to Asia's third largest economy.

The Reserve Bank of India expects economic growth of 7.5-8 percent in the 2008/09 fiscal year, slower than 9 percent last year.

Ahluwalia said the inflation rate was coming down and companies might lower prices of their products after a fall in demand.

"I do not expect prices to be a problem in the six months or so. Inflation rate has already come down, it will come down further," he said.

India's wholesale price index rose 8.98 percent in the 12 months to Nov. 1, sharply below the previous week's annual rise of 10.72 percent.

Deflation looms as next challenge on horizon

FRANKFURT/WASHINGTON (Reuters) - With recession now a reality in major economies from Japan to Germany, policymakers are starting to fret about the chance of a phenomenon many see as even more deadly: deflation.

Japan's decade-long battle with steadily falling prices and economic stagnation looms large in officials' memories and central banks and governments are determined to avoid past mistakes.

"Deflation is probably the worst case for the financial sector because it is very difficult to overcome. Therefore all central banks are going to do everything to avoid it," European Central Bank policymaker Ewald Nowotny said on Nov. 10.

The prospect of constantly falling prices is particularly unwelcome at present given the blow it deals to efforts by banks, firms and households to cut debt and help weather the economic storm now following the financial market crisis.

Central banks, faced with a sudden collapse in growth as well as inflation, have already slashed interest rates and are expected to keep doing so, although economists warn they may run out of rope before prices hit rock-bottom.

"Monetary policy is less powerful on the way down than on the way up," said Stefan Gerlach, professor at the Goethe University of Frankfurt's House of Finance.

"When inflation is rising central banks can raise rates as high as they like, but in the other direction, there's a bound of zero."

The U.S. Federal Reserve has already cut rates to 1 percent, while the Bank of Japan's key overnight rate stands at just 0.3 percent. The ECB, with official rates at 3.25 percent, and the Bank of England at 3 percent have somewhat more room to move.

After hitting historic highs just a few months ago, inflation is falling in all industrialised economies on the back of faltering growth and a sharp drop in energy and food prices. Oil has lost about two-thirds of its value since a peak above $147 in July, to trade around $53 per barrel .

U.S. consumer prices plummeted at their sharpest rate on record in October, fanning fears of a deflationary spiral of falling prices, spending and wages if demand does not pick up.

Fed policymakers have played down the risk of deflation -- which goes beyond a temporary period of negative inflation -- as have their colleagues at the ECB, although BoE Governor Mervyn King has said he cannot rule out deflation in the UK.


"HOLE IN THE HEAD"

Another effect of falling prices is to increase the burden of any given amount of debt, even as banks and households are sharply paring debt, or deleveraging, in reaction to financial turmoil and a wave of bad economic news.

"The problem with negative inflation is that the real value of your debts is increasing," Societe Generale economist James Nixon said.

"In a deleveraging cycle you need negative inflation like you need a hole in the head."

In the United States, the credit crisis and the abrupt deceleration of the economy since mid-September are a one-two punch that make it harder for authorities to shield the economy from deep recession and heal credit markets.

But even so, deflation would be problematic because, if sustained, it could lead consumers and business to curb spending further, shrinking economic activity and reducing demand even more, and pushing prices lower still.

"Once you get into a period of deflation, it's important to get the economy turned around as soon as possible," said Lyle Gramley, a former Fed governor now an analyst with the Stanford Group in Washington.

Gramley said there was some evidence that the combination of rate cuts and Treasury actions to offer hundreds of billions in loans to restore confidence and revive lending was working, but interest rates alone were not enough.

"In a credit crunch such as we are in now, the Fed can lower the Fed funds rate, but if it doesn't succeed in bringing down important private rates of interest or improving credit availability, or pushing stock markets up, then it is, to use the very trite phrase, almost pushing on a string," Gramley said.

Fed Chairman Ben Bernanke laid out the dangers of deflation in a speech in July 2003 when he was a Fed governor.

If official rates were already near zero and prices were falling, deflation could get worse as the weak economy led to more cuts to wages and prices, and pushed up the inflation-adjusted cost of funds.

"Because the short-term nominal interest rate cannot be reduced further, worsening deflation would raise the real short-term interest rate, effectively tightening monetary policy," Bernanke said at the time.

Societe Generale's Nixon said if deflation did become entrenched, central banks might be called on to print money -- effectively, finance government spending by taking public debt onto their balance sheets.

"It would be a reversal of the last 20 years of monetary policy orthodoxy," he said. "But if we do face a 1930s-style recession, that's the way we see the policy response going."

Microsoft rules out buying Yahoo, likes search

NEW YORK (Reuters) - Microsoft Corp Chief Executive Steve Ballmer on Wednesday ruled out an acquisition of Yahoo Inc but said his company was very interested in resuming talks on a Web search partnership.

Shares of Yahoo fell 13 percent on the remarks, after gaining this week on renewed investor hopes that Microsoft may refresh its bid for the Internet company after Yahoo Chief Executive Jerry Yang announced that he would step down.

"Let me be as clear as I think I've tried to be publicly. We are done with all acquisition discussions with Yahoo," Ballmer told Microsoft's annual shareholders meeting, in response to a question on what was happening with Yahoo.

"I've said that a bunch of times. Somehow some people have gotten confused nonetheless," Ballmer added. "We thought we had something that made sense. (It) didn't make sense to them. We've moved on."

Microsoft withdrew its $47.5 billion buyout offer for Yahoo in May after Yang and his board rejected the bid as too low. The software company then offered to buy Yahoo's search business, but Yahoo decided instead to sign a search advertising deal with Google Inc.

The Google deal has since fallen apart, after opposition from U.S. antitrust regulators who were concerned about an alliance between the Web's two biggest search companies.

Microsoft has said that it was still interested in pursuing a search deal with Yahoo, and Ballmer reiterated that on Wednesday.

"There's no active discussion on that front. But we'd be very open to it. But acquisition discussions are finished," he said.

Shares of Yahoo fell 13 percent to $10.04, while Microsoft shares were down 3.5 percent at $18.93.

Midcaps fare better than large-caps in recent fall


BL Research Bureau Investors are usually warned to stay away from mid- and small-cap stocks in highly volatile markets, as they may be more vulnerable to stock market declines. But they have behaved quite differently in recent trading sessions.

On days when markets fell sharply, the blue-chip names in the Nifty and Sensex have usually lost more value than mid/small-caps.

In many of the trading sessions since the middle of October, the BSE Midcap index has been containing losses better than the Sensex.

Take, for example, the trading session on October 24 when markets registered their biggest single-day fall in recent history. While the Sensex lost 11 per cent on that trading session, the BSE Midcap index registered a lower loss of 8.4 per cent.

On November 11, when the Sensex registered another sharp fall of 6.6 per cent, the BSE Midcap index lost just half that — 3.4 per cent.

This trend, which started of in October, has become more visible in the current month’s trading sessions.

On days when markets weakened sharply — November 12 and November 18 (this Tuesday) — the mid-cap index actually registered a smaller fall than the Sensex.

Institutional sales


What has driven this trend? One explanation is that recent market falls have been triggered mainly by institutional selling and that these institutions are invested mainly in index and large caps.

Many market watchers believe that recent pullouts from stocks have been triggered by accelerated hedge fund redemptions ahead of the December 31 deadline.

“The primary reason for the market fall is the sell-off by FIIs and hedge funds. Since their investments were primarily in large cap stocks with select mid caps, the impact is being felt more in the large cap space,” says Mr V. Ramesh, CEO, Prabhudas Lilladher Financial Services.

Basket selling, where an institution reduces its India positions, due to redemptions, would also impact index stocks more than mid-caps.

The other explanation given is that it is only large-cap stocks that are now liquid enough to allow institutions to sell without suffering high impact costs. That could result in more active selling in large caps than mid-caps in the current market scenario.

Slower to recover?


While mid-cap stocks have surprised investors by holding up in recent trading sessions, market watchers, however, predict that it is the large caps that will lead any recovery.

Mr Himanshu Varia, Head of Institutional Sales at broking firm Asit. C. Mehta, says: “In the event market sentiment turns positive, investor interest would first be in quality large-cap stocks. Midcap and small cap stocks will rise only with a lag.”

That has been borne out by recent trading patterns as well. On days when the markets rose sharply, the Sensex rose more than the Midcap index.

Source: TheHinduBusinessLine

News of shutdowns, output cuts sends stocks crashing


Stock prices of companies that have recently announced partial shut downs or production cuts at their manufacturing plants have taken a beating in the past two weeks.

As on Tuesday, the share prices of eight such companies have fallen between 14 and 45 per cent from November 3, the first trading day of this month.

Tata Metaliks Ltd – which announced a three-week shutdown of one of the units at its Kharagpur plant effective November 18, 2008, for repair – has declined by over 15 per cent during the above-indicated period.

Hardcastle & Waud Manufacturing Company, which halted its synthetic resins operations due to lack of orders, has fallen 45 per cent during the same period.

Automotive Axles is down by 21.83 per cent. The company has announced its manufacturing operations would be shut down for at least a week in November-December 2008.

The other companies that have announced production cut or shut downs include Ispat Industries, Mahindra & Mahindra, LG Balakrishnan & Brothers, Ashok Leyland and Tata Motors.

However, Cable Corporation of India, which announced plans to cut production due to slowdown in the economy on Tuesday during trading hours, ended on flat note at Rs 10.50. According to analysts, this announcement would help the company cut its losses.

GDP forecast lowered


The Indian economy may grow 6.7 per cent in the year ending March 2009, JPMorgan said, down from its earlier forecast of 7 per cent. The economy may grow 6.2 per cent in 2009-10, down from its previous estimate of 6.8 per cent, the bank said.

“The moderation in exports, small business output, and real estate related activity could crimp urban consumer spending as employment and household income growth slackens,” JPMorgan said in the note.

Other global financial groups such as Citigroup, Goldman Sachs, Morgan Stanley and Nomura have also lowered their estimates for India’s GDP growth over the past one month.

Source: TheHinduBusinessLine

Kotak Mahindra Bank (Rs 308): Sell


We recommend a sell in Kotak Mahindra Bank from a short-term trading perspective. It is evident from the charts of Kotak Mahindra Bank that it has been on a long-term downtrend since its all-time high of Rs 1,435 recorded in early January. The stock has been forming lower troughs and lower peaks since. The intermediate and medium-term trend also is down for the stock. However, significant long-term support range is at Rs 240-250 levels. We observe that two weeks ago the stock had encountered resistance at around Rs 450 and resumed its downtrend. On November 17, the stock plummeted 9 per cent, conclusively breaching the 21-day moving average. Furthermore, the stock fell 10 per cent, accompanied with high volume on November 18. Both daily and weekly relative strength indices are featuring in the bearish zone. The daily moving average convergence and divergence is falling in line with the stock in the negative territory. Our short-term outlook for the stock is bearish. We anticipate the stock to decline further until it hits our price target of Rs 276 in the short-term. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 324.

Source: TheHinduBusinessLine

Indian market most attractive destination for FIIs: SEBI

At a time when equity markets are coming under selling pressure, particularly from Foreign Institutional Investors, SEBI said India has
become the most attractive destination for FIIs.

"FIIs the world-over are interested in India. During October 07, the number of FIIs in India was 1,000 which has increased to 1,500 during October 08," Securities and Exchange Board of India Whole-Time Member T C Nair said at a conference here.

"India has come to the rescue of FIIs and also help them to compensate their losses," he said, adding that SEBI was doing everything possible to facilitate FIIs in hassle-free investment in the country.

"FIIs play a key role in the internationalisation of the securities market," he said. There were more opportunities for FIIs to invest in India. They can even invest in unlisted companies, he said. Nair also said SEBI planned to introduce interest rate derivatives by January.

SEBI has already introduced currency futures in dollar-rupee. Besides, he said the present global financial crisis would not affect India much. "There is no crisis in the country. It is all due to apprehensions. There is just a spill-over effect," he said.

Source: EconomicTimes

Buy Ballarpur Inds above Rs 23.25: ICICIdirect.com

ICICIdirect.com has recommended to buy Ballarpur Industries above Rs 23.25 with a stoploss of Rs 23 and targets of Rs 24/26/higher.

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 IVRCL Infra above Rs 118.75: ICICIdirect.com

ICICIdirect.com has recommended to buy IVRCL Infrastructure and Projects above Rs 118.75 with a stoploss of Rs 118 and targets of Rs 120/125/higher.

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

Source: Moneycontrol

Sell Canara Bank Nov Fut below Rs 170.50: ICICIdirect.com

ICICIdirect.com has recommended to sell Canara Bank November Futures below Rs 170.50 with a stoploss of Rs 172.5 and target of Rs 167, Rs 165.

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 Nifty on dips: Nirmal Bang

According to Nirmal Bang's Morning Call, for intraday traders, buying is advisable on dips with a stop loss of (2580) and on the higher side 2745 will act as a strong resistance level.

Nirmal Bang's Morning Call:

Technically, if we study the five day pattern, nifty is forming “lower top lower bottom formation” which is indeed a negative sign. As the markets are continuously breaking their important support levels on the daily basis, it has become difficult to identify the support.

We are in a classical downtrend and our sense is that (2580-2500) region should act as a crucial support for nifty in Nov series. Every rally should be utilized to create new short and exit market.

For intraday traders, buying is advisable on dips with a stop loss of (2580) and on the higher side 2745 will act as a strong resistance level. A trade beyond this range with huge volumes may decide the trend for coming days.

Source: Moneycontrol

Buy Balrampur Chini above Rs 39.50: ICICIdirect.com

ICICIdirect.com has recommended to buy Balrampur Chini Mills above Rs 39.50 with a stoploss of Rs 39 and targets of Rs 40.50/ 42/higher.

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 RIL above Rs 1152: ICICIdirect.com

ICICIdirect.com has recommended to buy Reliance Industries above Rs 1152 with a stoploss of Rs 1150 and target of Rs 1160/Rs 1190/higher.

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

Source: Moneycontrol

Sell Unitech, target of Rs 47: IIFL

IIFL has recommended a sell rating on Unitech with a target of Rs 47 in its November 18, 2008 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

Add DLF, target of Rs 351: IIFL

IIFL has recommended an add rating on DLF with a target price of Rs 351 in its November 18, 2008 research report.

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

Source: Moneycontrol

Sell Puravankara Projects, target of Rs 53: IIFL

IIFL has recommended a sell rating on Puravankara Projects with a target of Rs 53 in its November 18, 2008 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 Anant Raj, target of Rs 94: IIFL

IIFL has recommended a buy rating on Anant Raj Industries with a target of Rs 94 in its November 18, 2008 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 Hindustan Unilever above Rs 236.5: ICICIdirect.com

ICICIdirect.com has recommended to buy Hindustan Unilever (HUL) above Rs 236.5 with a stoploss of Rs 235.5 and target of Rs 238/Rs 242/higher.

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 Indiabulls Real Estate, target of Rs 220: IIFL

IIFL has recommended a buy rating on Indiabulls Real Estate with a target price of Rs 220 in its November 18, 2008 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 State Bank of India: Indiabulls

Indiabulls Securities Research has upgraded its rating on State Bank of India (SBI) to buy in its November 10, 2008 research report. "State Bank of India’s operating profit and net profit for Q2’09 surged 54.5% and 40.2% yoy, respectively, exhibiting a strong performance. While we expect the economic slowdown to adversely impact the Bank’s performance in the near-to-medium term, we believe that most of the negatives have been factored in the current price. Our fair value estimate is Rs 1,541. We, therefore, upgrade our rating to BUY," says Indiabulls Securities' research report.

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

Source: Moneycontrol

Buy IVRCL Infra: Indiabulls Securities

Indiabulls Securities Research has maintained its buy rating on IVRCL Infrastructure and Projects in its November 11, 2008 research report . "IVRCL’s standalone revenue increased by 65.1% yoy to Rs 11,366 million. Net profit soared 62% yoy to Rs 571 million during the quarter. Our SOTP-based fair value estimate stands reduced to Rs 178 due to the challenging macroeconomic environment. However, we believe that the stock has corrected significantly in the recent past and is trading at an attractive valuation. Our fair value estimate reflects a potential upside of 28% over the current market price. Hence, we maintain our Buy rating on the stock," says Indiabulls Securities' research report.

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

Source: Moneycontrol

Citigroup shares tumble below $8 to 13-year low

NEW YORK (Reuters) - Citigroup Inc shares tumbled below $8 for the first time in 13 years on Tuesday amid concerns its plan to shed 52,000 jobs might not be enough to restore the banking giant to health or profitability soon.

"Investors have really turned sour," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. "No matter what steps management takes, whether it's layoffs or restructuring, investors do not like what they hear."

The bank's stock, part of the Dow Jones industrial average, closed down 53 cents, or 6 percent, at $8.36 after earlier falling to $7.89. The shares are down 39 percent this month, compared with a 22 percent drop in the KBW Bank Index, which includes the bank.

Spokeswoman Shannon Bell declined to comment on the stock move.

Tuesday's decline came a day after Chief Executive Vikram Pandit announced it will eliminate 15 percent of Citigroup's work force.

He told employees that Citigroup has spent the last year "getting fit," and raised $75 billion of capital, to prepare for a "difficult" 2009. "No part of this has been easy on anybody," he said.

Yet analysts expressed concern that the cutbacks, on top of 23,000 jobs already eliminated this year, may foreshadow deeper problems at the second-largest U.S. bank by assets.

"Both the near and long-term outlook for Citi remain unclear as it navigates the credit cycle and attempts to downsize its balance sheet and reposition the franchise," wrote Sanford C. Bernstein & Co analyst John McDonald. "We see no profitability for the next several quarters." He cut his share price target to $11 from $20.

Citigroup has lost $20.3 billion in the last year.

The bank offered few specifics on the cuts, saying they will be global and affect a wide array of business lines.

About one-half of the 52,000 jobs will be cut through asset sales, and one-half through layoffs and attrition. The reductions would reduce Citigroup's work force to 2005 levels. Pandit hopes to reduce operating expenses by 20 percent.

Analysts said the cuts come amid deterioration in consumer credit as economies worldwide appear headed for recession. Citigroup operates in more than 100 countries.

"The earnings picture is likely to be tough until there are signs of a stabilization in consumer credit quality, which at this point appears unlikely until at least the back half of 2009," CreditSights Inc analyst David Hendler wrote.

McDonald said Citigroup's quarterly consumer credit losses could rise to $6.6 billion in early 2009 from $4.6 billion in the third quarter. He also said Citigroup's plan to move many risky assets onto its books from its trading portfolio should lower earnings volatility, but could lead to a $3.5 billion fourth-quarter write-down tied to the transfer.

Citigroup shares have fallen nearly 72 percent this year. The company's market value is about $45.6 billion, down from more than $270 billion in late 2006.

BSE Sensex falls for sixth straight session

MUMBAI (Reuters) – The BSE Sensex dropped 1.83 percent on Wednesday, taking its fall to 16.7 percent over a six-day losing streak, as worries over the deteriorating global economy saw the market surrender initial gains.

Losses in financial sector stocks led the main index to its third-lowest close of 2008. ICICI Bank dropped 3.6 percent, HDFC Bank fell 3.3 percent and mortgage lender Housing Development Finance Corp lost 3.7 percent.

A slide in the rupee to three-week lows near 50 per dollar provided little comfort to outsourcers as investors worried that a contracting global banking sector would cut back spending on their services.

Sector leader Tata Consultancy Services fell 0.4 percent, Infosys Technologies lost 0.8 percent, Wipro slid 3.2 percent and Satyam Computer dropped 3.6 percent.

Reliance Industries, India's most valuable company, fell 0.66 percent at 1,133.15 rupees, after rising 7 percent in morning trade.

"Nothing could really help sustain gains. Global cues are too bad for any good news to help our market," said Mehul Dedhia, assistant vice-president for sales at Sharekhan.

The 30-share BSE index rose as much as 3.3 percent in morning trade, but turned down and closed 163.42 points lower at 8,773.78, with 25 components losing ground.

It was the lowest close since Oct. 27, the day the market hit a three-year low of 7,697.39. The index has fallen 57 percent this year.

In the broader market 1,731 losers outweighed 777 gainers on volume of 240 million shares.

The 50-share NSE index fell 1.79 percent to 2,635.00, its lowest close since Oct. 27.

Traders said low volumes indicated investors were avoiding taking large positions on fears the market would slip further.

"There is a risk that we could touch the previous low. But the fall has been gradual this time, so there may be an opportunity to buy at lower levels," said Amit Khurana, head of institutional equities at Collins Stewart.

"There is money waiting to come in."

Foreigners have sold a net $13.1 billion of shares this year, after buying a record of more than $17 billion in 2007.

Among the few gainers, top car maker Maruti Suzuki rose 0.7 percent to 516.50 rupees after its chairman said 2008/09 production and sales was not expected to fall below the previous year's levels.


STOCKS THAT MOVED

* Ess Dee Aluminium rose 8.9 percent to 145.05 rupees after the Economic Times reported its acquisition of India Foils has been approved by the Board of Industrial and Financial reconstruction. The company is scheduled to hold a news conference later in the day.

* Kalindee Rail Nirman (Engineers) Ltd rose 5.3 percent to 141.1 rupees after stock exchange data showed L&T Capital Co Ltd raised its stake in the company to 13.9 percent.

* MindTree Ltd ended 2.0 percent down at 240 rupees after it said it expected revenue growth in 2009/10 to be challenging in view of the global economic slowdown.


MAIN TOP THREE BY VOLUME

* Suzlon Energy on 16.4 million shares

* GVK Power & Infrastructure on 11.1 million shares

* Reliance Natural Resources on 9.1 million shares

Time Inc to cut 250 jobs - NY Post

NEW YORK (Reuters) - Time Warner Inc's Time Inc, the world's largest magazine company, is expected to eliminate more than 250 jobs, as part of a larger job cut plan, the New York Post reported on Wednesday.

In October, the company said it was restructuring the division. As many as 600 jobs, or about 6 percent of the total staff, could be lost as a result.

The Post said that the 250 cuts would happen on Wednesday. The cuts include 47 positions at Cottage Living, a magazine that Time is closing, spokeswoman Dawn Bridges said. She declined to comment on the number used by the New York Post.

Cottage Living is the first magazine to be closed as part of the restructuring. The company previously said that magazines would not be closed.

The move comes in response to the onset of the world financial crisis, which is aggravating a decline in advertising spending at U.S. newspapers and magazines, particularly as more people shun printed publications in favor of free information on the Internet.

Time's restructuring affects some of the most well known U.S. magazines, including the Time weekly news magazine, People, Sports Illustrated and Fortune.

It is unclear how the results will affect the financial performance of Time Warner, which also owns the AOL Internet service as well as CNN, the cable news television network.

World recession is here - Merrill fund manager poll

LONDON (Reuters) - Investors believe the global economy is now firmly in recession and that it is not going to come out of it for some time, a poll by Merrill Lynch showed on Wednesday.

As a result, fund managers are embracing defensive assets such as utility stocks, government bonds and cash, the monthly survey for November found.

But it also showed some slight indications of a levelling off of recent bearish trends.

"Last month we saw a very big capitulation trade," said Gary Baker, Merrill's head of EMEA equity strategy. "The results of this (new) survey are a) we are strongly in recession, we are not moving towards it and b) it is here to stay."

The poll showed that 84 percent of fund managers now believe the world is in recession., up from 69 percent on October and 44 percent in September.

At the same time, 67 percent said that the global economy would weaken over the next 12 months. Only 22 percent saw it improving.

The poll was taken between Nov. 7 and 13, a period when global stocks fell around 13 percent, oil plunged by a third and and the world's main commodities index fell 14 percent.

The Merrill data showed this was clearly reflected in investment positioning.

Investors were embedded in defensive stocks such as pharmaceuticals, consumer staples, telecommunications and utilities.

On a regional basis, equities investors also favoured U.S. stocks because of a better quality of earnings potential.

"I would call this a hunker-down trade," Baker said.


SIGNS OF LIFE?

Despite the overall gloom in the report, there were one or two signs for optimists to grab hold of.

The percentage of fund managers who were underweight equities dropped to 54 percent from 62 percent in October, for example, while those overweight in bonds dropped to 37 percent from 46 percent.

A run on emerging market equities also appeared to have levelled off with 30 percent underweight versus 36 a month earlier.

In currencies, meanwhile, more respondents said the Japanese yen was overvalued than said it was undervalued for the first time in the poll's history. Yen strength has been an indicator of global risk aversion.

Overall, Merrill's risk and liquidity indicator, drawn from the poll's findings, improved slightly.

These kinds of modest moves would mesh with State Street's investor confidence index, which was released on Tuesday.

That index hit a record low in November, but its decline was far less pronounced that the month before, perhaps suggesting a bottoming out.

Real estate body asks members to lower prices

MUMBAI (Reuters) - Indian real estate developers should lower prices given the general slowdown in the economy, the Confederation of Real Estate Developers' Associations of India (CREDAI) has said.

"Some developers across the country have already reduced prices, CREDAI now requests all its members to do the same," the real estate body, which counts over 3,500 developers as members, said in a release on Wednesday.

No fixed percentage in price reductions could be recommended due to the vast diversity of prices of real estate across India, it said.

The continuing economic slowdown has led to a fall in growth rates and potential loss of employment to many of the 10 million skilled and semi-skilled workers in the retal estate sector, it added.

U.S. prices drop at record pace, China wary of unrest

LONDON (Reuters) - China has told police to ensure social stability as its economy slows, U.S. inflation tumbled at a record pace and markets fretted on Wednesday about whether America's stricken car industry would be rescued.

The 1.0 percent monthly fall in U.S. consumer prices reflected a sharply weakening economy and raised the prospect of deflation if consumer demands fails to pick up. Construction starts on new U.S. homes also hit a record low in October.

"It's a reflection of very weak demand," said Carl Lantz, interest rate strategist at Credit Suisse in New York. "The fourth quarter is probably going to be the most intense period of economic weakness."

European Central Bank President Jean-Claude Trichet said the financial crisis -- sparked by a U.S. housing crash and huge bank losses that followed -- marked the first time since World War Two that the finances of the industrial world have been at stake.

He said it could be solved by central banks and governments in concert, with a key role for the private sector, but told Sky Television late on Tuesday: "It will take time."

The Bank of England seemed to share his view.

Minutes of its last meeting, when it cut interest rates by a shock 1.5 percentage points, showed it considered an even bigger reduction to tackle a recession that has now been confirmed.

Rioting involving thousands of people exploded on Monday in China's Gansu province, the latest bout of popular unrest.

The China Daily quoted Public Security Minister Meng Jianzhu as saying police "should be fully aware of the challenge brought by the global financial crisis and try their best to maintain social stability".

Although the Gansu violence was triggered by a plan to resettle residents in an earthquake-torn region, it follows strikes by taxi drivers and labour protests in regions long-reliant on Western demand for Chinese exports.

IMA Asia, a business intelligence provider, said it had raised its political risk rating for China from low to medium.

"We are concerned about the potential for unrest within a massive pool of migrant workers who face lay-offs in the construction and export manufacturing sectors," it said.

CORPORATE STRIFE

Investors believe the global economy is now firmly in recession and is not going to come out of it for some time, a poll by Merrill Lynch showed on Wednesday.

As a result, fund managers are embracing defensive assets such as utility stocks, government bonds and cash.

Corporate damage was widespread.

BASF, the world's largest chemicals maker by revenue, cut its 2008 profit outlook and announced cutbacks in production, citing a "massive" decline in demand.

Japan's third-largest bank, Sumitomo Mitsui Financial Group, followed the lead of its larger peers by planning to raise at least $2.9 billion via preferred securities to beef up a capital base rocked by rising bad loans.

Once thought to be relatively unharmed by the global credit crisis, Japanese banks are now scrambling to raise cash as recession and plunging domestic stocks sap their capital.

OPEC's president said major oil producers were also worried by economic slowdown and an oil price that has more than halved.

"All members ... are very concerned about the economic situation which has worsened in the United States and Europe who have entered into a recession, followed by Japan," Chakib Khelil was quoted as saying in El Khabar newspaper.

Authorities worldwide have recapitalised banks, thrown funds into frozen money markets and acted to revive their economies, at a cost approaching $5 trillion -- a process that continues.

Russia's central bank said it had sold $57.5 billion of its reserves over the last two months to defend the rouble and contributed $14 billion to a bank bailout scheme.

The four Nordic countries agreed a $2.5 billion loan for Iceland, where three top banks failed.

Central banks have also weighed in with a slew of rate cuts.

The Federal Reserve is widely expected to cut rates to 0.5 percent in December, the lowest level since the 1950s. After the Bank of England minutes, analysts forecast more in the UK too.

"Monetary policy boring? Clearly not any more," said Marc Ostwald, bond analyst at Monument Securities in London.

"The fact that they considered 200 basis points at this month's meeting will surely trigger a shift in market expectations for December to a 100 basis points cut."


CARMAKERS PLEAD

Shares slid as a plea from U.S. automakers for a bailout met political opposition. U.S. stock futures pointed to a weak start on Wall Street.

The "Big Three" U.S. carmakers warned the Senate Banking Committee on Tuesday of a "catastrophic collapse" in the U.S. economy if no help was forthcoming.

Auto firms in Japan and Europe are also under pressure.

European carmakers may need financial aid from the bloc and its governments, senior EU officials said on Wednesday, singling out GM unit Opel as a possible recipient.

Toyota said it would stop production at U.S. and Canadian factories for two extra days next month and Nissan warned of more tough times ahead.

"We have to recognise 2009 will be one of the most challenging years for our industry and the whole economy in the last 50 years"" CEO Carlos Ghosn told the Wall Street Journal.

Rupee ends weaker than 50/dlr for first time

MUMBAI (Reuters) - The rupee closed weaker than 50 per dollar on Wednesday for the first time as it was sideswiped by a falling stock market and demand for dollars to arbitrage a gap to offshore non-deliverable forward rates.

The partially convertible rupee ended at 50.02/03 per dollar, 0.7 percent weaker than 49.66/67 at Tuesday's close. It hit a low of 50.03 in late trade, its weakest since Oct. 27 when it hit a record low of 50.29.

"I still feel there is very good room for the dollar-rupee to go up to 52," said V. Kumar, chief dealer with State Bank of Travancore.

One-month offshore non-deliverable forward contracts were quoting at 50.80/95, 1.5 percent weaker than the onshore spot rate, providing a good arbitrage opportunity.

Dealers said some banks were buying dollars in the onshore market to sell offshore and cash in on the price difference.

"We have closed above 50 for the first time, it is a very bullish close for the dollar-rupee," a senior dealer with a private bank said.

Losses in the share market also hurt sentiment. The share market fell 1.8 percent, and has now lost nearly 17 percent over the past six sessions.

Foreign funds have withdrawn more than $13 billion from Indian shares so far in 2008, after buying a record $17.4 billion last year.

Dealers said the central bank was seen selling dollars via state-run banks to try to halt the rupee's fall through the day, but said volumes were not large. They estimated the central bank sold about $200 to $250 million.

Stay away from metal space: Choksey

Deven Choksey of KR Choksey Securities is of the view that one can stay away from metal space.

Choksey told CNBC-TV18, "Some amount of short covering has definitely taken place. But if you look at the metal space and the commodity pricing point of view what we are seeing is some amount of possibility of bounce back on which the short covering is happening into the market particularly in our market. I am not too confident at this point of time whether we will see stability into the metal price immediately because take a case of steel probably you will find Ukraine kind of countries producing at much cheaper cost than what it is been sold at this point of time in the global market. So maybe one is taking benchmark of the lowest sell price in the available market condition."

He further added, "Till January-March quarter probably we will not see big stability coming into the metal commodity per se and for that matter any commodity per se one will see good amount of pipeline inventory getting clear and from thereafter one will see stability into the metal prices and thereafter we should see kind of a confidence getting built into some of metal stocks for taking long position. But till that time we will have to stay away from these companies unfortunately."

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

Source: Moneycontrol

SBI may slip to Rs 900: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that SBI was giving the impression that it is going to outperform and now again it is coming down to support and is giving the impression that it is reaching Rs 900 very soon.

Sukhani told CNBC-TV18, "SBI was giving the impression that it is going to outperform and now again it is coming down to support and giving the impression that it is reaching Rs 900 very soon. The Bank Nifty, which is the broad index tracking all bank stocks has virtually given up after showing signs of light, showing signs of outperformance the impression now on the Bank Nifty is that it is going to break those October lows much before the Nifty."

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

Source: Moneycontrol

Hold DLF, says Tulsian

Investment Advisor SP Tulsian is of the view that one can hold DLF.

Tulsian told CNBC-TV18, "All the reality stocks have taken a beating. DLF is the largest player and in fact the kind of land bank they have been holding with the price having paid for and if you see their report for FY08 they have said that the 98% of land bank is paid. The current market cap is translating into the market cap of below Rs 40,000 crore and even if you take the worst case scenario and in the current situation I don’t think that they should have any problem for the company to post a bottom line of about Rs 5,000 crore though they have been posting about Rs 7,000 to Rs 8,000 on an annual basis. Even if it falls to about Rs 4,000, things overall have come to a very realistic level."

He further added, "All the properties under development, you can always get accelerated if you change your model or if you shrink your margin maybe by 10% or so and there are tough times ahead for the reality sector because of the liquidity crunch. But once the interest falls, which again is all expected and right now its about 13%, but if it falls to a single digit maybe about to 9%, things can start improving here on. As we have been seeing the price of Rs 230 definitely not the realistic price at least with the company going buy back or promoter stake of 88% or close to that, taking all that into consideration one can take a hold call. One can remain invested with a 12 month view on the stock and no advice to exit at the current level."

Disclosure: Analyst holds the above stock.

Source: Moneycontrol

Hold DLF, says Tulsian

Investment Advisor SP Tulsian is of the view that one can hold DLF.

Tulsian told CNBC-TV18, "All the reality stocks have taken a beating. DLF is the largest player and in fact the kind of land bank they have been holding with the price having paid for and if you see their report for FY08 they have said that the 98% of land bank is paid. The current market cap is translating into the market cap of below Rs 40,000 crore and even if you take the worst case scenario and in the current situation I don’t think that they should have any problem for the company to post a bottom line of about Rs 5,000 crore though they have been posting about Rs 7,000 to Rs 8,000 on an annual basis. Even if it falls to about Rs 4,000, things overall have come to a very realistic level."

He further added, "All the properties under development, you can always get accelerated if you change your model or if you shrink your margin maybe by 10% or so and there are tough times ahead for the reality sector because of the liquidity crunch. But once the interest falls, which again is all expected and right now its about 13%, but if it falls to a single digit maybe about to 9%, things can start improving here on. As we have been seeing the price of Rs 230 definitely not the realistic price at least with the company going buy back or promoter stake of 88% or close to that, taking all that into consideration one can take a hold call. One can remain invested with a 12 month view on the stock and no advice to exit at the current level."

Disclosure: Analyst holds the above stock.

Source: Moneycontrol

Remain invested in Maruti Suzuki: Tulsian

Investment Advisor SP Tulsian is of the view that one can remain invested in Maruti Suzuki.

Tulsian told CNBC-TV18, "The best part is that Maruti Suzuki is almost debt free the total debt on the balance sheet is not more than Rs 500 crore. If you take the present market capitalization of about Rs 15,000 crore if you see the dealer network of Maruti the same kind of network if you create can cost you about Rs 15,000 crore. Forget about the manufacturing capability and all that, they have the production capability of 6,000 units per year and they have been introducing various models from time to time. Their Q2 performance has been a bit disappointing with a Q1 EPS of 16 and Q2 EPS of about 10 that means that they have posted an EPS of about 26 in the first half but if you see the sharp fall in the commodity prices particularly metals, each car is requiring about 500-600kg of steel and the kind of fall we have seen alone in that will definitely get passed on to the users for allowing their company to maintain their market share. But I don’t think that if they can maintain their margins, there will be so much concern on their profitability."

He further added, "Even if I take a conservative EPS estimate of about of 50, the share is ruling at a PE multiple of close to about 11 on the historic earnings and all that which is very low for the leader and particularly at the time when you have the credit crunch. The company, which is totally debt free, you cannot really expect that kind of a thing, if you see the alternative as Tata Motors who has heavily loaded with debts into their books maybe with a debt equity ratio of more than 1.5 if I take the combined debt after acquiring JLR etc, so taking all into consideration Maruti is an ideal bet if you can keep a view of about 12 months on the stock."

"On the interim basis if it touches Rs 600 then as a trading call one can get out at those levels and which is possible maybe once you see the recovery in the market once in the next 15 days or so you could see the share bouncing back to about Rs 600 levels. So that could be an exit point but otherwise this makes an ideal buy and for those who are already holding the stock and remain invested."

Disclosure: Analyst holds DLF.

Source: Moneycontrol

Maruti Suzuki can test Rs 670-680: Mathew

Technical Analyst, E Mathew is of the view that Maruti Suzuki can test Rs 670-680.

Mathew told CNBC-TV18, "The valuations of Maruti Suzuki are absolutely mouthwatering and infact maybe in the selloff if I can get the stock between Rs 460 to Rs 470 it would be a dream buy. We have very strong support between Rs 460 and Rs 470 and that doesn’t mean that the stock will drift down on that level. I would stick my neck out and go to the extent of even seeing if once Rs 575 is crossed, which is incidentally a resistance zone. I am quite confident that irrespective of what the market does we could see Maruti going up all the way at something like Rs 670 to Rs 680."

He further added, "I find that this stock not only is much stronger than the rest of the auto pack but it looks stronger than quite a few of its index stocks. So I would wholeheartedly recommend and I would recommend averaging out also, which normally I don’t do in a falling market but here is a stock which one could certainly go ahead and do some averaging too."


Disclosure: Analyst, his family members and his group companies do not have any position in the above stock.

Source: Moneycontrol

SBI has support at Rs 500: Guppy

Daryl Guppy, Founder and Director of Guppytraders.com is of the view that if SBI fails to hold Rs 1000 then it has support at Rs 500.

Guppy told CNBC-TV18, "SBI is developing a double bottom at around Rs 1,000 level. We are looking at reversal pattern developing. But these have been very weak in the current market situation technically. So if that Rs 1,000 double bottom level fails a hold, we are looking at around Rs 500 as a support target based on a technical basis. A rebound from Rs 1,000 will see a resistance around Rs 1,350."

Source: Moneycontrol

Remain invested in ICICI Bank: Tulsian

Investment Advisor SP Tulsian is of the view that one can remain invested in ICICI Bank.

Tulsian told CNBC-TV18, "ICICI Bank is very aggressive in the retail or in the consumer credit finance and more especially on the home and auto finance. But if you see even 15% growth when we are talking of degrowth or banks not even able to maintain or hold their bottom line etc, but if you expect a 15% of growth also is feasible. Coming on the fundamentals, the share is ruling below book value, which we have seen in very rare instances that too in the case of leading frontline private sector banks can understand for the second run private sector banking stocks where they are ruling close to book value. But here the book value of the stock is about Rs 450 and its ruling at about Rs 375 and even scaling down the growth prospects and all that the bank should be taking cues from the first half results and should be able to post an EPS of Rs 30."

He further added, "If you see their consolidated valuation taking into account their insurance and other valuations also it has much more value than what it has been ruling on and this stock seems to be more a victim of the rumors and the fear, which is happening in case of this bank in front of deposit withdrawal and maybe the confidence crisis but we have seen Mr. Kamath and even the Finance Minister has said that there is nothing of a problem in case of this bank and all that. One can remain invested and this is more of a fundamental stock you cant really play in F&O except for a range of Rs 20 to Rs 30 but if you are a long term investor this is the very good stock. Once we come out of this liquidity crunch and probably they will again be able to bounce back and their net worth is over Rs 50,000 crore all this augurs well for the stock at these levels and if you are an investor remain invested and even one can make a buy at these levels."

Disclosure: Analyst holds DLF.

Source: Moneycontrol

ICICI Bank has resistance at Rs 390-410: Mathew

Technical Analyst, E Mathew is of the view that ICICI Bank has resistance at Rs 395-400.

Mathew told CNBC-TV18, "ICICI Bank is a great stock but yet I feel that technically it’s not looking that strong at best. Rs 390 to Rs 410 of a huge resistance and I would advice to sell out at that particular level."

He further added, "The Nifty to a great extent depends to a moment in Reliance. We are heading into a resistance territory on this stock but if this stock is able to cross over the Rs 1290 zone, hopefully we would be heading to Rs 1400."

Disclosure: Analyst, his family members and his group companies do not have any position in the above stock.

Source: Moneycontrol

Buy Gitanjali Gems for long term: S Chabria

Sanjay Chabria, Equity Analyst & Investment Consultant is of the view that one can buy Gitanjali Gems with long term perspective.

Chabria told CNBC-TV18, "Gitanjali Gems is an integrated diamond and jewellery manufacturer with some very good brands like Nakshatra, D'damas, Gili and Asmi. Over the last few years the company has developed world class scale in jewellery manufacturing. The company presently operates in two business segments, cut and polish diamonds and branded jewellery and retail. Going forward the company’s revenue mix is likely to tilt in favour of branded jewellery, which has higher margins and higher value additions."

He further added, "In terms of financials, for the half-year ended September 2008, the company has posted a net profit of Rs 90 crore of net sales of Rs 2,500 crore. So for FY09 the company is likely to report an EPS of around 23 and for FY08 the EPS was around rupees Rs 19. In terms of valuations the stock trades around 3.5 times FY08 earnings at around 2.8 times expected FY09 earnings. The stock appears as a good long-term buy."

Disclosure: Analyst doesn't hold the above stock but have recommended to his clients.

Source: Moneycontrol

Sell private sector banking stks: Gujral

Technical Analyst, Ashwani Gujral is of the view that one can sell private sector banks on rally.

Gujral told CNBC-TV18, "Private sector banks are all sell on rally candidates, weakened quite a bit, broken down from supports. So private banks, capital goods remain sells."

Source: Moneycontrol

Micro Inks has target of Rs 200: Chhabria

Sanjay Chhabria, Equity Analyst & Investment Consultant is of the view that Micro Inks has target of Rs 200 for the next 12-18 months.

Chabria told CNBC-TV18, "Micro Inks is owned 70% by Huber Group of Germany. It is a fully integrated global manufacturer of printing inks. As part of Huber Group Worldwide, the company is among the top five. Micro Ink is India largest manufacturer with a dominant market share of 30%. The company manufactures of liquid inks, adhesive, resins and enamels. The company continues to maintain its leadership in the Indian market due to its superior product quality, innovative marketing strategy and strong and wide portfolio basket."

He further added, "For the nine-months ended September 2008 the company posted a net profit of Rs 74 crore on net sales of Rs 1,025 crore. Based on these nine-month results for the calendar year 2008 the company could easily report an EPS of around Rs 35. So in terms of valuations at market cap of just Rs 250 crore, PE of less than 3, dividend yield of 6.3%, this MNC stock deserves to be in the long-term portfolio of investors. The target for the long-term is around Rs 200 for the next 12-18 months."

Disclosure: Analyst doesn't hold the above stock but have recommended to his clients.

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.