Wednesday, 11 November 2009

Great Eastern Shipping (Rs 247.7): Sell



We recommend a sell in the stock of Great Eastern Shipping Company from a short-term horizon. From March low of Rs 142, the stock had continued to be in an intermediate-term uptrend till October high of Rs 310. After encountering significant long-term resistance around Rs 310, the stock changed direction by resuming its long-term downtrend. The stock has been trending downwards since January 2008 high of Rs 572. In late October, the stock conclusively penetrated its intermediate-term up trendline as well as 50-day moving average. It is trading well below its 21- and 50 day moving averages. The daily relative strength index (RSI) has re-entered the bearish zone and weekly RSI is slipping towards this zone in the neutral region. We are bearish on the stock from a short-term perspective. We expect it to decline until it hits our price target of Rs 222. Traders with short-term horizon can sell the stock while maintaining stop-loss a stop-loss at Rs 261.

Source: thehindubusinessline

Fedders Lloyd Corp (Rs 72.5): Buy



Investors with a short-term trading perspective can buy Fedders Lloyd Corporation at current level. Short-term trend in the stock is bullish. It has been moving up vertically without any correction since October 6. Momentum indicators in the daily chart have moved in to the overbought region but there is no sign of weakness yet. The stock closed above the immediate resistance at Rs 69 on Monday implying that the vertical climb can extend. Investors can buy the stock with a stop at Rs 68. The uptrend is expected to take the stock to the target of Rs 82 in the short-term.

Source: thehindubusinessline

Tuesday, 3 November 2009

Index Outlook: The long-awaited correction



Sensex (15,896.3)

The breezy roller-coaster ride that we had expected turned in to a scary hurtle downward as the Sensex plunged 914 points last week recording the largest weekly decline in the last three months. The cut was much deeper in mid and small stocks especially those reporting adverse earnings as tolerance to negative news nosedived. The truncated week ahead is likely to be influenced by the Federal Open Market Committee meeting scheduled next week and the signals that are flashed from there.

Sudden reversal in stock prices made volumes soar sky-high, especially in derivative segment. Volumes in futures and options segment reached record levels mid-week close to the expiry of October contracts. The vicious side of the market was amply demonstrated in the way it waited for the belief in the current rally’s invincibility to get all-pervasive before reversing lower: waiting for the last bear to turn in to a bull. Sensex’ close below the 50-day moving average is a negative as is the close below the previous peak of 16,002. 10-day rate of change indicator declined in to the negative zone for the first time since August and the 14-day relative strength index has declined to 32. The weekly oscillators are however still in the positive zone implying that though the short-term trend is very weak, the medium term trend is not overtly so yet.

Though we had anticipated a correction last week, the magnitude was far greater than envisaged. We had expected a terminal corrective wave that moved sideways for a few weeks before the move from July lows ended. But the decline last week throws up a zigzag formation from July lows that could mark the completion of the C wave from March lows.

But we will wait for a confirmation of one more week to see if this decline prolongs and leads the index to a firm close below 16,000. Another fight-back by the bulls from these levels can result in a sideways move between 16,000 and 18000 for the rest of this year, indicated in our previous columns.

If the Sensex records a strong close below 16,000 next week, it would mean that an intermediate term correction is in progress that has the minimum targets of 14659 and 13885 – the opportunity that those who have missed the rally so far, are waiting for.

A rebound next week can take the Sensex higher to 16,450, 16,650 or 16,848. Failure to move above the first resistance would imply that weakness will persist to drag the index down to 14917 or 14740.

Source: thehindubusinessline

Reliance Power (Rs 138.5): Sell



We recommend a sell in the stock of Reliance Power from a short-term perspective. It is apparent from the charts that the stock was on an intermediate-term uptrend from March low of Rs 89 to its June high of Rs 210. Triggered by negative divergence and presence of significant long-term resistance around Rs 200, the stock resumed its long-term downtrend which has been in place since February 2008 high of Rs 374. Moreover, since June it has been on an intermediate-term downt rend. In early October, the stock breached its 21-day and 50-day moving averages and is hovering way below them. Both the daily relative strength index (RSI) and moving average convergence and divergence (MACD) indicators are featuring in the bearish territory. The weekly indicators are on the verge of entering in to the bearish territory. Our short-term forecast on the stock is bearish. We expect the stock’s downtrend to prolong until it hits our price target of Rs 124 in the approaching trading sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 146.

Source: thehindubusinessline

Rural Electrification Corp: Buy



Fresh investments can be considered in the stock of Rural Electrification Corporation (REC), a navratna public sector undertaking, which finances all the segments across the power value chain.

Secured advances with a high asset quality (net non-performing assets of almost zero) coupled with sustainable spreads are the key positives for REC when compared to most finance companies. Even after gaining more than 165 per cent this year, the company’s stock is trading at a modest 12 times its estimated FY10 earnings (assuming 15 per cent equity expansion post-offer) and at 1.6 times its estimated book value.

A power sector debt funding requirement of more than Rs 15 lakh crore over the Eleventh and Twelfth Plans is the major growth driver for REC. Its proposed follow-on public offer will augment the capital base, enabling balance sheet expansion.

The Reserve Bank of India’s recent policy change which pegs bank’s risk weights to the borrowers credit rating, will also favour the company given its AAA rating. The profits of REC rose 70 per cent in the first half of this fiscal, helped by loan book and disbursements growth of 32 per cent and 22 per cent respectively. This bettered overall bank credit growth of 20 per cent. Improvement of spreads from 3.34 per cent to 3.47 per cent, helped by better yields and lower costs, also aided the company’s net profit growth.

We expect the loan growth to continue at robust pace on the back of the wide Rs 1,50,000-crore gap between sanctions and disbursements. The margins may get some support as the proportion of private sector borrowers trends up.

At current market prices, the follow-on offer may raise Rs 2,600 crore, given the proposed offer size. This will increase its net worth by 32 per cent and bring down the debt-equity ratio from 6.3 to 4.8, reducing the risk to its credit rating. Increase in costs due to reduced reliance on tax-free bonds, may be compensated by the fall in borrowing costs from banks.

Delays in power projects leading to late disbursement and rescheduling of loan repayments, are the biggest risks for the company. Asset-liability mismatch arising out of lower maturity deposits and high duration loans is also a potential risk. Increase in interest rates later in the year may put pressure on margins as the company predominantly has fixed-rate loans, with three- or 10-year reset.

Source: thehindubusinessline

Monday, 2 November 2009

10 Companies that FIIs love

In First Place:

Name of company: Sybly Industries Limited
FII share in company: 74.18 %
Best known for: Manufacturing Polyester Yarn and Mercerised

In 2nd place:

Name of company: Indiabulls Real Estate
FII share in company: 67.43 %
Best known for: Real Estate

In 3rd place:

Name of company: H D F C
FII share in company: 59.85 %
Best known for: Private sector banking

In 4th place:

Name of company: Geodesic
FII share in company: 53.47 %
Best known for: Developing products in the information, communication and entertainment space.

In 5th place:

Name of company: Amtek Auto
FII share in company: 50.84 %
Best known for: Manufacturing automotive components

In 6th place:

Name of company: IVRCL Infrastructure
FII share in company: 48.04 %
Best known for: Infrastructure sectors like Water & Environment, Transportation, Buildings, and Power

In 7th place:

Name of company: Prajay Engineering
FII share in company: 42.55 %
Best known for: Real estate

In 8th place:

Name of company: Amtek India
FII share in company: 42.55 %

In 9th place:

Name of company: Jain Irrigation
FII share in company: 42.02 %
Best known for: Manufacturing irrigation systems

In 10th place:

Name of company: Logix Microsystems
FII share in company: 41.96 %
Best known for: Software Products Company


Source: Moneycontrol

Bharti at 52-week low: Time to buy?

The telecom industry continues to weather rough storms. In the throes of an intense pricing war in a bid to woo subscribers — especially by the newer entrants — apart from concerns relating to irregularities in the Department of Telecom’s (DoT) allocation of 2G spectrum and a harrowing delay in the 3G auction, the sector’s cup of woes seems to be running over.

Industry leader Bharti Airtel is especially facing a tough time. The bellwether, which a few months ago called off an attempt to strike a merger deal with South Africa’s telecom giant MTN, faces the threat of competition biting away at its subscriber base with lucrative pricing and the prospect of declining average revenues per user (ARPUs) — the industry benchmark used to measure a telco’s financial health.

In a recent interview with CNBC-TV18, industry veteran Rajeev Chandrasekar, former chairman of BPL Mobile and now a Rajya Sabha MP, said the telecom sector was on the verge of a fundamental shift in dynamics. “We are going from a model where there were two or three well capitalised strong players in this market — the Bhartis and the Vodafones — to a market where now we will have most likely six-seven players, all very well capitalised and strongly positioned to take high market shares in the incremental market,” he said, adding that newer players like Tate DoCoMo and Reliance Communication would do to Bharti and Vodafone what these leaders did to BSNL 10 years ago. “The best days for incumbents like Bharti, Vodafone, BSNL and Idea are behind them.”

Stock at 52-week low

Bharti Airtel, announced its second quarter FY10 results on Friday, which were quite disappointing. The company’s net profit declined 7.8% to Rs 2,321 crore as against Rs 2,517 crore on a quarter-on-quarter (QoQ) basis. Soon after, the Bharti Airtel stock hit a 52-week low at Rs 290 on the exchanges. The stock was, two months ago, quoting a price of Rs 450.

Is Bharti now so beaten-down that investors can buy at it current levels or is it wiser to stay away from it at even these levels, given the outlook of the telecom sector?

Stock close to bottom

“For Bharti, we are closer to the end now in terms of price damage,” says Sanjay Chawla of Anand Rathi Securities. “However, it is the time correction that is likely to be extended and that may well last for another three-six months.”

Chawla adds that market is eyeing two-three developments closely: the impact of tariff cuts on its margins and evidence of the pricing war bottoming out.

“Also, with the Unitech-Telenor launch, Docomo making rapid inroads and number probability to launch soon, the effect of that remains to be seen,” he says. “We don’t see that the time correction is going to end until Q1 results are out.”
He, however, added that stock was close to bottoming out and may stay at current levels for some to come.

“The earnings numbers that we saw are disappointing particularly the fact that the average revenue per user (ARPU) has declined 8% — even when the entire tariff cut was implemented much later,” says Hemang Jani, Senior Vice President, Sharekhan, adding that there was a feeling that the stock may under-perform for the next six months given the competition.

“However, the way I look at Bharti, it’s a company that makes a net profit of Rs 8,500 crore, available at about 11-12 PE and I don’t think we are going to see this kind of a scenario playing out for too long. From an investment perspective at 11 times forward PE, Bharti definitely looks attractive.”

Watch out for ARPUs ahead

Shubham Majumder of Macquarie Securities feels that even as the stock looked attractive for long-term investors at current levels, one needs to watch out for a few developments. “Brokerages’ estimate for Bharti’s earnings per share (EPS) could be scaled down further if its embraces per second billing and number portability, which could affect its post-paid user segment where profitability remains high,” he says.

“Also, we could see pressure on the text and data side of the business because as of now, all of this tariff action is limited to the prepaid, which essentially is the Rs 100-200 ARPU bracket,” Maajumder says. “When you see action move to the Rs 400-500-800 ARPU customer — that is when you really need to start to worry for players like Bharti and Vodafone because they cater to a majority of the high ARPU and a high value market.”

Source: Moneycontrol

Thursday, 24 September 2009

Reliance Infratel files draft prospectus for IPO

Anil Ambani group firm Reliance Communications on Thursday said its telecom tower subsidiary Reliance Infratel has filed the draft prospectus for its initial public offer with market regulator SEBI.

"Reliance Infratel has filed its draft red herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI)," RCom said in a filing to the Bombay Stock Exchange.

Reliance Infratel, a passive telecom infrastructure provider, is planning an IPO for divesting 15.60 crore equity shares of Rs 10 each for cash at a premium to be decided through a 100 per cent book building process.

The net issue would constitute 10 per cent of the post-issue paid-up equity capital of the company, the statement said.

Source: EconomicTimes

Avoid stocks that ran up 20-50% in last few weeks: JM Fin

Gautam Shah, Technical Analyst, JM Financial Services said, the markets may see 5-7% correction in the near-term as the technical indicators were showing that the markets were overbought. He said he would avoid stocks that ran up 20-50% in the last few weeks. He advised to book part profits now. However, he quickly added that the markets would see 20-25% upside after the short-term pullback. The Sensex trading base was at 16000 levels, he said. His medium-term target for the Sensex was at 18300 and for the Nifty was at 5550.

He didn’t see too much upside in autos and technology stocks. However, he was positive on oil, power, banking, capital goods and realty stocks.

Source: Moneycontrol

Alembic (Rs 50.2): Buy

We recommend a buy in the stock of Alembic from a short-term perspective. It is apparent from the charts that the stock has been on an intermediate-term uptrend since October 2008 low of Rs 24.7, which is a multi-year low. In early July, the stock found twin support at Rs 35, from the intermediate-term up trendline as well as key support level. Subsequently, the counter resumed its uptrend and has been on a medium-term uptrend too. On August 27, the stock broke through a significant resistance at Rs 45 by surging 8 per cent accompanied with high volume. Besides, it gained 7 per cent with high volume on September 23. The stock is trading well above its 21- and 50-day moving averages. The daily relative strength index (RSI) has entered the bullish zone and weekly RSI is featuring in this zone. The weekly moving average convergence and divergence indicator is steadily rising in the positive territory. We are bullish on the stock from a short-term horizon. We anticipate it to move up until it hits our price target of Rs 56. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 47.5.

Source: thehindubusinessline

Buy JP Associates at Rs 197-200: Gujral

Buy Jaiprakash Associates at Rs 197-200, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "JP Associates is weakened; it had a breakout above Rs 257 but the management used it. Now if one wants to buy it, around Rs 197-200 is a strong support, there people could try and get into it."

Source: Moneycontrol

Buy Alembic, says Ashwani Gujral

Buy Alembic with a stoploss of about Rs 46, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "Midcap pharmaceutical particularly smaller ones like Aarti Drugs, Alembic did well yesterday. So there is some sort of momentum there. Alembic you could buy with a stoploss of about Rs 46 and the target here could be Rs 54 and then Rs 57. The idea here is that if the global markets are getting into some kind of a dip, we could have probably another 100 points towards that 4,800 kind of level but that will not happen in a very sharp kind of move. You will have jagged up and down kind of days and finally we will probably end the pullback around 4,800. So the idea has to be that if you are getting a gap down, don’t go and sell into it, try to buy and play for some sort of a pullback.”

Source: Moneycontrol

Buy Paper Products, says Gujral

Buy Paper Products with a stoploss of about Rs 58, says Technical Analyst, Ashwani Gujral. It has target of Rs 71.

Gujral told CNBC-TV18, "Some of the paper stocks did quite well and this one also moved higher. One could buy with a stoploss of about Rs 58; target here is about Rs 71. Most of my calls are buy calls because as long as the market stays above 4,800 to about 4,825 it’s above every major moving average and it’s holding the trend line which started from 2,200. So the trend remains intact and on dips one should expect to buy.”

Source: Moneycontrol

Buy Tata Coffee, says Gujral

Buy Tata Coffee, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "Tea and Coffee sort of moved together yesterday. Globally these commodities have been stronger; the agricultural commodities. So Tata Coffee, one can buy with a stoploss of about Rs 360. It could get to levels of about Rs 445. Maybe on declines today it’s a good buy and over the medium-term you will get to levels of Rs 445.”

Source: Moneycontrol

Tuesday, 22 September 2009

Investors gain Rs 25 lakh-cr in just over five months

Investor wealth has increased by over Rs 25 lakh crore in just over five months from the beginning of the current financial year, on improving sentiments in the domestic and global markets.

According to an analysis of the valuations for the period (April 1-September 18), the combined market capitalisation of all the firms listed on the Bombay Stock Exchange increased by Rs 25,02,749 crore or nearly 80 per cent.

Analysts believe the rise in investor wealth has been due to the upbeat market sentiments on indications of economic recovery globally.

"The markets have given a healthy return on the back of positive mood among domestic and international investors," SMC Global's Vice President Rajesh Jain said.

The total market valuation increased to Rs 56,35,835.75 crore on September 18 from Rs 31,33,086.7 crore on April 1.

While, the 30-share benchmark index Sensex has given a healthy return of nearly 70 per cent to hover around 16,700 level in September against 9,900 level in April.

The Sensex companies, which account for about 45 per cent of the total market capitalisation of all the companies, saw its combined market valuation rise by over Rs 10,00,000 crore in the reviewed period.

The combined market capitalisation of the 30 blue-chip stocks rose to Rs 25,31,831.55 crore on September 18 from Rs 15,31,252.34 crore on April 1.

However, the total turnover of the Sensex companies declined to Rs 1,597.42 crore on September 18 from 1,705.52 crore on April 1.

Jain further added that the decline in the volumes is due to less participation of retail investors in the markets, which shows the run is mainly on account of institutional money, both domestic and international.

Meanwhile, foreign investment into the Indian stock markets are likely to cross USD 10 billion-mark by the end of this month as a hefty USD 9.8 billion (Rs 47,674 crore) have already been poured into the bourses by overseas entities so far this year.

Source: EconomicTimes

Equities advance to 16-month high; 5100 on Nifty eyed

Equity benchmarks resumed their rally Tuesday after an extended week, building onto gains for the fifth straight session. Expectations of strong quarterly earnings and increased short covering ahead of the F&O expiry for September propelled key indices to 16-month highs.

“The market opened on a strong note defying global market movements. Indices held gains throughout the day even as we saw some amount of profit booking as the Nifty neared 5050 – a crucial resistance. However, we expect the Nifty to scale to 5100 levels in the near term. On a sector specific note, automobile, technology and power stocks will outperform,” said Jyoti Nagrani, chartered market technician, Finquest Securities.

National Stock Exchange’s Nifty settled well above the 5000 mark for the first time in 16 months. The index ended at provisional 5020.20, up 0.89 per cent or 44.15 points from its previous close. The index touched a high of 5036.30 after opening at 4977.10.

Bombay Stock Exchange’s Sensex moved closed to the 17000 mark as well. The 30-share index advanced 0.87 per cent or 145.13 points to 16,886.43. The index rose to a high of 16,943.49 from a low of 16,763.78.

Midcaps and smallcaps picked up pace as well. The BSE Midcap was up 0.74 per cent and BSE Smallcap Index climbed 1.05 per cent.

Sectorwise, the BSE IT Index surged 1.91 per cent, followed by BSE FMCG Index up 1.63 per cent and BSE Bankex rising 1.03 per cent. Meanwhile, BSE Oil&Gas Index ended marginally lower.

Biggest Nifty gainers were Ranbaxy Laboratories (5.56%), HDFC (4.78%), BPCL (3%), ITC (2.89%) and TCS (2.84%).

Losers were Bharti Airtel (-3.44%), Hindalco Industries (-1.16%), Jindal Steel (-1.10%). ONGC (-0.85%) and Sterlite Industries (-0.66%).

Shares of Bharti Airtel fell more then 3 per cent following reports that the company may have to sweeten its offer for South African telecom company MTN. According to reports, Bharti has offered MTN a 27 percent of its stake for the same money instead of the 25 percent proposed earlier.

Market breadth remained positive with 1632 advances against 1045 declines on the BSE. On NSE, there were 698 advancing shares outnumbering 592 declining ones.

Meanwhile, Reliance Communications' infrastructure subsidiary, Reliance Infratel, is planning an initial public offer and the company will shortly file its Draft Red Herring Prospectus with Sebi, chairman Anil Ambani told shareholders at the company's annual general
meeting.

The company is mulling a 10 per cent stake sale of equity of Reliance Infratel through an IPO. 85 per cent of the stake ofthe company will remain with Reliance Communications, Ambani added.

Source: EconomicTimes

Ranbaxy Lab can go upto Rs 420-425: Gujral

Ranbaxy Laboratories can go upto Rs 420-425, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "Ranbaxy seems to have bottomed out and that could be headed towards Rs 420-425. Dr Reddys Laboratories has sort of consolidated and because of some rumours that started a fresh move, so here we could get to level of about Rs 920-925. So, pharma overall is looking strong. The point is that as long as this rotational game continues the market will remain strong but it’s getting overbought and nobody is negative, so people need to get into habit of taking profits now."

Source: Moneycontrol

Above Rs 125, Natco Pharma can touch Rs 160: Gujral

Above Rs 124-125, Natco Pharma could head up to levels of Rs 160, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "Natco just paused for a bit and now if it can maintain Rs 124-125, it could head up to levels of Rs 160, so it’s in a clear strong uptrend."

Source: Moneycontrol

HDFC can touch Rs 2750: Gujral

Housing Development Finance Corporation, HDFC can touch Rs 2750, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "HDFC is the one that looks good because that is a one that had a breakout above Rs 2,500, so levels of Rs 2,750 is possible."

He further added, "The entire housing finance space is unwell even stock like LIC Housing Finance could be headed about Rs 833."

Source: Moneycontrol

Above Rs 560, TCS can head up to Rs 650: Gujral

Gujral told CNBC-TV18, "ITC has been between Rs 222 and Rs 245-250 kind of range and it will make a significant move only above Rs 250."

He further added, "Technology stocks are showing some kind of strength, but they are also reaching their targets. So TCS probably if it can stay above Rs 560, it could get up to Rs 650 but Infosys getting up to Rs 2,400, TCS moving towards Rs 600-650; they are getting to the top end of their ranges, getting very close to targets, so its time to probably take some money off over there as well."

Source: Moneycontrol

Get ready for a fall if mkts go up 10-15% more, says Kotak

Sandeep Bhatia, Executive Director and Head of Sales, Kotak Institutional Equities is cautious on the markets. He feels this renewed strength and strong level of interest is due to the result season in the offing, which is also helping the markets move southwards. “October earnings should raise street earnings estimates for the entire street.”

He advices to get ready for a fall if the markets go up another 10-15%.

Source: Moneycontrol

Positive on India for long term but won't buy now: ABN AMRO

Emil Wolter, Head of Regional Strategy, Asian Equities, ABN AMRO Bank would prefer to book profits in India. “Expectations here have jumped ahead of valuations. We have high expectations on materials, consumer durable and IT space.” Though he said he was positive on India for the long-term but won’t buy at current levels.

Source: Moneycontrol

Inox Leisure (Rs 57.2): Buy

We recommend a buy in the stock of Inox Leisure from a short-term perspective. It is evident from the charts of the stock that following a medium-term correction between early June and mid July from Rs 71 to Rs 37, it found key support around Rs 40. Later, it resumed its intermediate-term uptrend that has been in place from March low of Rs 18.9. Since July, it has been on a medium-term uptrend too. Recently, the stock surpassed its 21-day moving average and is trading well above 21 and 50-day moving averages. On September 18, it breached its near-term resistance at Rs 55 by gaining 5 per cent with good volume. The daily relative strength index (RSI) has entered in to the bullish zone and weekly RSI is on the brink of entering this zone. The daily moving average convergence and divergence indicator has signalled a buy and is hovering in the positive region. We are bullish on the stock from a short-term horizon. We anticipate it to rally until it hits our price target of Rs 63. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 54.

Source: thehindubusinessline

Monday, 21 September 2009

Tata Nano a hit in second hand car market too

Tata Nano is now available in the second hand car market and that too at a large premium. Yet, the few available ones are zooming-off as soon as they are put on sale. The used car segment itself is being sold at a premium of about Rs 25,000–35,000 in comparison to the new cars which are there in the market.

Here is a verbatim transcript of Tanvi Shukla’s comments on CNBC-TV18.

It seems like as hundreds of applicants wait for their Nano to be delivered, Nano itself has made its way to the used car segment. Interestingly, the used car segment itself is being sold at a premium of about Rs 25,000–35,000 in comparison to the new cars which are there in the market.

A Mumbai-based dealer has already sold four of these pre-owned Nano cars and other dealers tell us that more cars are in the pipeline. These are in the mid- and the top-end segment for which there is much higher demand that the base models itself. Dealers say that the main reason for the cars to come into the market is that the original owners could not really get together the money to make the payment for Nano.

Sources say that several of these cars are actually coming from smaller towns where proxy book was done to buy these cars through smaller dealers who are not driving them to Bombay and selling them there at a premium of around Rs 25,000–35,000. More Nanos will be available sooner considering the demand which is there in the market.

Source: Moneycontrol

Buy Reliance Infra, target of Rs 1438: Prabhudas Lilladher

Prabhudas Lilladher has recommended a buy rating on Reliance Infrastructure with a target price of Rs 1438 in its September 17, 2009 research report.

"Near-term triggers, relating to outcome of the ongoing RIL-RNRL gas dispute, timely financial closures and EPC awards, are events to watch out for the re-rating of the stock. However, timely project completion and commercialisation remains the key risk. We value RInfra on a SOTP basis as different businesses have different modes of revenue recognisation and a common measure would not capture the embedded value and hence, we arrive at a target price of Rs 1,438. We, thereby, initiate the coverage on the stock with a 'BUY' rating," says Prabhudas Lilladher's research report.

Source: Moneycontrol

Powerful bear rally underway, discontent likely: Enam Sec

On the road ahead for the markets Chokhani said that this was not the beginning of a really long bull market. In fact, smart money was still not coming into India. Most investors, according to him, were waiting for a correction before entering the market. A powerful bear rally was underway and Chokhani believes that a powerful dip followed by a period of disappointment was likely. This dip, however, will set the stage for a sustained upmove, he said. In the short-term though, he believes surprises on the upside are possible. “Though there will be hiccups but long-term trends indicate that there will be an extended recovery in the developed world along with substantial growth in emerging markets.”

On specific themes and sectors

He believes that there is a good appetite for mid-caps in the market. Commodities are expensive in the short term, he opined. “Power, insurance and consumptions play the key themes,” he says adding that it is not the right price for entrance now. “Power is likely to be a big bet.”

Chokani opines that there is a need to focus on Natural Gas and Rupee levels. “The hike in rates will be consistent due to the economic movement.”

Source: Moneycontrol

Escorts has target of Rs 150: Rajen Shah

Shah told CNBC-TV18, "I have loved this stock for quite a while. In fact at the Coimbatore Investor camp also we’d recommended this stock. It is a no-brainer Rs 150 stock. If you look at it, Escorts today Rs 90 crore is the equity and the price is about Rs 90. So, it is available at about Rs 800 crore of market cap. In Rs 800 crore, we are getting 1 lakh tractor manufacturing plant. When Punjab Tractors was bought over by Mahindras, they paid an EV of Rs 2,000 crore for 60,000 tractors. So, on that basis, this 1 lakh tractor manufacturing plant should be valued at Rs 3,000 crore, if somebody were to buy out this company. But that is not the case, even if we value it at Rs 1,000 crore and if you value the Escorts construction subsidiary, which is going to report almost Rs 600 crore of turnover and which could come out with an IPO in the next six months at about Rs 300 crore, that makes it Rs 1,300 crore.”

He further added, “If you see the land they have at Faridabad, about 110 acres at Faridabad, and there is the Delhi-Faridabad metro coming up in the next three years. So, The prices of this land is set to be something in the region of about Rs 1,500 crore but to be on a conservative side, even if you take it Rs 1,000 crore, that makes it Rs 2,300 crore of tractor Rs 300 crore of construction business and about Rs 1,000 crore of land. So Rs 2,300 crore of assets and you’re getting it for Rs 800 crore. So I am sure this company has got a long way to go. We had a target of Rs 150 forecasted at the Coimbatore Investor Camp.”

Source: Moneycontrol

Above Rs 535, Tata Steel can go upto Rs 625: Gaba

Above Rs 535, Tata Steel can go upto Rs 625 says Technical Analyst, Prakash Gaba.

In a chat with moneycontrol.com on September 18, 2009 Gaba said, "tata steel looks ok and can go up to around 625 if it crosses 535."

Source: Moneycontrol

Hotel Leela can go upto Rs 50: Gaba

Hotel Leela can go up to Rs 50, says Technical Analyst, Prakash Gaba.

In a chat with moneycontrol.com on September 18, 2009 Gaba said, "Hotel Leela looks good and can go up to around Rs 50 in time to come."

Source: Moneycontrol

Punj Lloyd can go up to 300: Gaba

Punj Lloyd can go up to 300 in time to come, says Technical Analyst, Prakash Gaba.

In a chat with moneycontrol.com on September 18, 2009 Gaba said, "Punj Lloyd can go up to 300 in time to come. just maintain stoplosses."

Source: Moneycontrol

Tata Metaliks (Rs 102.4): Buy

We recommend a buy in Tata Metaliks from a short-tem perspective. It is visible from the charts of the stock that in mid-August it took support at Rs 80 and resumed its intermediate-term up trend. This trend has been in place since March low of Rs 44.5.While trending upward, it penetrated its 21- and 50-day moving averages in late August and is trading way above them. On September 17, the stock surpassed a medium-term resistance around Rs 95 by surging 5 per cent with good volume. The daily relative strength index (RSI) is hovering in the bullish zone and the weekly RSI has entered into the zone. Both daily and weekly moving average convergence and divergence indicators are featuring in the positive territory. Our short-term outlook on the stock is bullish. We expect its rally to prolong until it hits our price target of Rs 113 in the approaching sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 96.5.

Source: thehindubusinessline

Friday, 18 September 2009

Stocks in news: ICICI Bank, Raymond, Axis Bank, HCL Tech

Here are stocks that are in news today:

Axis Bank update:
-Axis Bank raises $720 million via QIP (qualified institutional placement) cum GDR (global depositary receipt) Issue
-Axis Bank prices QIP cum GDR Issue at Rs 906.70/share
-Equity dilution of 11%
-CNBC-TV18 was first to report fund raising

Pipavav Shipyard IPO closes today
-Overall subscribed 3.6 times
-QIB 4 times, HNIs 9.4 times, Retail 1.1 times

RIL - Sources: From NW18
-Govt ups D6 gas allocation for Dabhol plant to 5.67 mmscmd
-Alert: Dabhol plant was earlier allocated 2.7 mmscmd gas
-Govt asks RIL to supply 5.67 mmscmd gas to Dabhol from October 1

ICICI Bank - Exclusive
-ICICI Bank finalises sale of Point Of Sale (PoS) terminals
-ICICI Bank to sell PoS assets to First Data for $80 million
-Assets to be hived off into a JV with first Data
-First Data to hold 81% stake; ICICI Bank to hold 19%
-ICICI Bank to pay $15-16 million for 19% stake in PoS JV

Exclusive: HCL Tech
-Signs 2 IT Infra management contracts
-Signs 5 years deal with Energy Future Holdings, Oncor
-Combined deal valued at $110 million over 5 years
-HCL Tech to book it over 6 to 8 months

WNS Says
-Board completes consideration of EoIs
-Board has decided to not to pursue further discussion
((Wipro was among the bidders))

Raymond's Realty Foray: Gautam Singhania Says
-Realty business to primarily have residential focus
-Funding for realty projects from internal accruals
-Expect approvals to come in 3-6 months

Source: Moneycontrol

Invest in Asian Hotels, Hotel Leela: Sukhani

One can invest in Asian Hotels, Indian Hotels, EIH and Hotel Leela, says Technical Analyst, Sudarshan Sukhani.

Sukhani told CNBC-TV18, "All the three-four hotel companies have rallied after big base building and consolidation. I think there is an investment opportunity in the hotel business. I don’t know about short-term trading because sometime after these rallies, the stock can consolidate but an investor need not worry about that part. If it consolidates, let it. So there are investment opportunities in Asian Hotels, Indian Hotels, EIH and Hotel Leela. While all of them equally deserve; I think Hotel Leela is the most attractive among the four.”

Source: Moneycontrol

Buy IT stocks, says Sudarshan Sukhani

One can buy IT stocks, says Technical Analyst, Sudarshan Sukhani.

Sukhani told CNBC-TV18, "Midcap technology stocks have rallied a lot, gone through a small and brief correction and now have started a rally again yesterday. Purely on charts, the entire midcap universe in IT and the largecaps are now buying opportunities because the largecaps actually moved up to new highs again for the season. So for short-term trader there are opportunities here. A lot would depend on how the Nifty behaves but with some stop losses, it is possible to enter on dips in these stocks. In any case, do not short sell.”

Source: Moneycontrol

See more upside in aviation stocks: Sukhani

There is more upside in aviation stocks, says Technical Analyst, Sudarshan Sukhani.

Sukhani told CNBC-TV18, "In aviation stocks these 18-20% gains suddenly coming in one day.- that is not surprising because these stocks were in a trading range for months and one of the first signs that this would happen came when Jet did not fall even when there was a strike going on. There is the potential here. You don’t actually buy it today because after such a big rally, the stocks are likely to correct and consolidate but my sense is that no matter what the aviation business does, this stock chart suggests that there is more upside possible. So these are stocks you want to watch and buy the next time they consolidate.”

Source: Moneycontrol

Invest in Axis Bank, says SP Tulsian

Tulsian told CNBC-TV18, "Capital is a lifeline for everyone but for banks it is more as a lifeline. Axis Bank would be looking for going into the PE and AMC business also, so that means they are trying to spread their wings in the new business because we have all being seeing quite a good comfort in the stock. They have been consistent performers and last couple of months back there were some disappointments on the change of the top managements and there were some discernments amongst the existing ones. But I don think that those things can come in the way, the bank will keep growing like this and if someone takes really good call on the time horizon of about six to twelve months, I think this is an ideal stock and there are three banks which you can go in comfortably in the private sector, HDFC, Axis Bank and ICICI Bank. With a fresh amount of about Rs 3,500 crore getting infused will definitely be growing, though we are talking about a 11% equity dilution but that will be EPS accretive, so with a 6-12 month horizon it is a very good stock to invest and even for the traders, I think this gives a good trading opportunity on an intraday basis of about 15-20 on a daily basis taking a long call those who wants to trade can buy and keep on exiting at a profit of 15-20 on a weekly basis on a trading horizon.”

Source: Moneycontrol

Sudarshan Sukhani's top five picks for today

Technical Analyst Sudarshan Sukhani of Technical Trends recommends investors to go short on Bhushan Steel with a target of Rs 1,240 a share and a stop loss at 1,336 a share. However, he also advises buying Colgate with a target of Rs 630 a share and a stop loss at Rs 610 a share, Deccan Chronicle with a target of Rs 124 a share and a stop loss at Rs 110 a share, United Spirits with a target of Rs 920 a share and a stop loss at Rs 876 and MTNL with a target of Rs 94.50 a share and a stop loss at Rs 90 a share.

Key levels to watch out for:

Bhushan Steel: Short
Target of Rs 1,240 per share
Stop Loss at Rs 1,336 per share

Colgate: Buy
Target of Rs 630 per share
Stop Loss at Rs 610 per share

Deccan Chronicle: Buy
Target of Rs 124 per share
Stop Loss at Rs 110 per share

United Spirits: Buy
Target of Rs 920 per share
Stop loss at Rs 876 per share

MTNL: Buy
Target of Rs 94.50 per share
Stop Loss at Rs 90 per share

Source: Moneycontrol

Tata Metaliks (Rs 102.4): Buy

We recommend a buy in Tata Metaliks from a short-tem perspective. It is visible from the charts of the stock that in mid-August it took support at Rs 80 and resumed its intermediate-term up trend. This trend has been in place since March low of Rs 44.5.While trending upward, it penetrated its 21- and 50-day moving averages in late August and is trading way above them. On September 17, the stock surpassed a medium-term resistance around Rs 95 by surging 5 per cent with good volume. The daily relative strength index (RSI) is hovering in the bullish zone and the weekly RSI has entered into the zone. Both daily and weekly moving average convergence and divergence indicators are featuring in the positive territory. Our short-term outlook on the stock is bullish. We expect its rally to prolong until it hits our price target of Rs 113 in the approaching sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 96.5.

Source: thehindubusinessline

Thursday, 17 September 2009

Divis Laboratories has target of Rs 587: Gujral

Divis Laboratories has target of Rs 587, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "Divis Laboratories hasn’t moved but we would see alternative pharma stocks like Ranbaxy, Orchid have moved. So it’s a good idea to get into this at about Rs 515, targets could be closer to Rs 587.”

Source: Moneycontrol

Jet Airways has target of Rs 350-360: Bose

Jet Airways has a immediate target of Rs 350-360, says Technical Analyst, Rajat K Bose.

Bose told CNBC-TV18, "Jet from the middle of June was hovering around Rs 250 and for the first time it’s seen a move above Rs 280, so Jet Airways has actually come out of an accumulation zone. Now that the breakout has happened on the upside, so we have to call it that it was an accumulation and it has actually moved up. The immediate target would be Rs 350-360."

Source: Moneycontrol

Amtek Auto has target of Rs 225-230: Bose

Amtek Auto has a target of Rs 225-230 or even Rs 237, says Technical Analyst, Rajat K Bose.

Bose told CNBC-TV18, "Amtek Auto was in technical parlance on the bar chart, it was showing a pennant like formation, sort of a triangle. It was a continuation pattern. I haven’t seen it today but since you said it’s performed well, so there is an upside breakout. The technical target that I can give is that it can have a good upside once this Rs 210 is decisively crossed. Above that the target becomes Rs 225-230 or even Rs 237."

Source: Moneycontrol

Market takes a breather after 3-day rally; RIL slips 5%

Equities ended on a flat note Thursday after a three-day rally. The Nifty managed to mount the 5000 mark on an intra-day basis for the first time since May 23, 2008. However, it retraced from the psychological level dragged down by losses in the index heavyweight Reliance Industries and overall profit booking. ( Watch )

National Stock Exchange’s Nifty settled at provisional 4948.60, down 0.2 per cent or 9.8 points after the index surged to a high of 5003.05 in trade so far. The intra-day low was 4944.15.

Bombay Stock Exchange’s Sensex ended at 16,669.10, lower by 0.05 per cent or 7.94 points from the previous close. The index touched a high of 16,820.02 and low of 16,636.55 so far.

The broader market ended lower as well. The BSE Midcap Index was down 0.02 per cent and BSE Smallcap Index fell 0.09 per cent.

Declines were led by index heavyweight Reliance Industries which tumbled 5 per cent. Reliance said Petroleum Trust sold 15 million shares in the company at Rs 2,125 each on Thursday, raising about Rs 31.88 billion.

Other losers in the Nifty space were BPCL (-5.07%), Unitech (-3.48%), Tata Steel (-2.08%) and Reliance Capital (-2.19%).

HCL Technologies (5.74%), ACC (3.6%), Hindalco Industries (3.55%), Grasim Industries (23.56%) and Maruti Suzuki (2.43%) were the gainers.

Market breadth on BSE deteriorated with 1606 declines against 1196 advances.

Source: EconomicTimes

Buy Tourism Finance, target of Rs 30: Sharekhan

Sharekhan has maintained its buy rating on Tourism Finance Corporation of India (TFCI) with a price target of Rs 30 in its report dated September 16, 2009.

"Despite certain near-term challenges for growth, in view of the current industry scenario and the recent developments, we believe the medium to long-term outlook for the industry continues to remain positive. We are fine-tuning our estimates to factor in the details from the annual report. At the current market price of Rs 23.4, Tourism Finance Corporation of India (TFCI) trades at 6.5x its FY2010E adjusted EPS of Rs 3.6 and 0.6x its FY2010E book value of Rs 38.2. We maintain our 'Buy' recommendation on the stock with a price target of Rs 30," says Sharekhan's report.

Source: Moneycontrol

PNB an underperformer: Karvy

Karvy Stock Broking has rated Punjab National Bank (PNB) as an underperformer with a target price of Rs 755 in its September 17, 2009 research report.

"We revise our rating on Punjab National Bank (PNB) from 'Market Performer' to 'Under Performer' due to increase in stock price. We have not changed our earning estimates for FY10 and FY11; we expect the bank's net interest income (NII), operating profit and net profit to grow by 18%, 13.5% and 6.5% CAGR during FY09-11. We value the bank on DDM valuation methodology using cost of equity of 13.5%, we determine the bank's fundamental value at Rs 755 at 2.14 x FY11 adjusted book value," says Karvy's research report.

Source: Moneycontrol

Hold Glenmark Pharma, target of Rs 251: Sharekhan

Sharekhan has maintained its hold rating on Glenmark Pharmaceuticals with a price target of Rs 251 in its report dated September 15, 2009.

"Based on inherent risk on its research and development (R&D) pipeline and no near-term catalyst in sight, we feel, the stock is likely to be under pressure for the next twothree quarters, diminishing the possibility of any near term re-rating. Hence we maintain our Hold recommendation on the stock with the price target of Rs 251 (12x FY2011E core earnings for base business plus Rs 43 per share for R&D pipeline)," says Sharekhan's report.

Source: Moneycontrol

Nifty may top out at 5000, book profits: Analysts

The run of the bulls continues on Dalal Street. Even as the Nifty nears the 5,000 mark after close to 16 months, the debate over liquidity, valuations and market momentum at these levels gets more vocal. Is a Nifty at 5,000 a little too-overvalued given visibility over corporate earnings is still not very clear? Is a correction overdue or will the burst of fund inflow to emerging markets like India give it further momentum?

C Jayaram, ED of Kotak Mahindra Bank, feels valuations are getting stretched and the Nifty may not have more momentum to continue its rally. As the market rallies further, the liquidity argument gets weaker, he told CNBC-TV18 in an interview. “For my money, we have pretty much reached close to the end of the road,” Jayaram said.

Jayaram said that even as companies’ earnings had improved in the previous quarter, it was more a result of the cost-cutting they exercised. He added that markets would be at current levels even by December due to a lack of any major positive news triggers. “Also, I cannot see any big negative surprise as well because in case there is correction there is enough buying interest at levels about 10% lower than this.”

Source: Moneycontrol

Hold Tata Tea, target of Rs 939: Sharekhan

Sharekhan has maintained its hold rating on Tata Tea with a price target of Rs 939 in its report dated September 15, 2009.

"Considering the aggressive growth plans, we believe that Tata Tea is a good investment proposition for the medium to long term. However, with the rising raw material prices we expect a moderate performance in the near term and believe that trading at 12.8x its FY2011E earnings the stock has limited upside in the near term. We maintain our 'Hold' recommendation on the stock with a price target of Rs 939," says Sharekhan's report.

Source: Moneycontrol

Hanung Toys & Textiles (Rs 85.9): Buy

We recommend a buy in Hanung Toys & Textiles from a short-term perspective. It is apparent from the charts of the stock that after recording a 52-week low of Rs 24 in January, it began to trend up and has been on an intermediate-term uptrend. Within this trend, it was on a corrective phase during June and July (from Rs 105 to Rs 55). The stock resumed its uptrend, after taking support around Rs 55. On September 7, it conclusively penetrated a key medium-term resistance level of Rs 80 by gaining almost 10 per cent with good volume. The stock is hovering well above its 21- and 50-day moving averages. The daily relative strength index has entered into the bullish zone and the weekly RSI is likely to enter this zone. Both daily and weekly moving average convergence and divergence indicators are hovering in the positive region. We are bullish on the stock from a short-term horizon. We anticipate the stock to move further until it knocks our price target of Rs 95 in the resembling sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 81.

Source: thehindubusinessline

Stocks in news: RIL, RPL, Infy, Bharati Ship, Great Off

Here are stocks that are in news today:

Reliance Industries - Exclusive: Sources
-Reliance (RIL) to sell part of treasury stock
-RIL to sell 1 crore treasury shares held by Reliance Petroleum trust
-RIL keeps option open to double treasury stake sale
-RIL to raise $437 million, option to double size
-Reliance Petroleum trust holds 6.65% stake in RIL
-RIL says have not sold any shares

Exclusive: Great Offshore Saga
-Bharati Shipyard buys 11.2 lakh shares (3% equity)
-Bharati Shipyard buys stake at Rs 560/share ((CMP Rs 565))
-Bharati will need to up open offer to minimum Rs 560/share
-Videocon among sellers in Great Offshore
-Bharti increases stake in Great Offshore to 22.5%

Pipavav IPO Update
-Overall subscribed 2.67 times
-QIB subscribed 2.82 times, HNI 7.54 times, Retail 0.88 times

Exclusive: Bharti-MTN update:
-Bharti's Akhil Gupta to meet South Africa authorities, stakeholders: sources
-Final deal structure will protect South Africa govt's economic interest: MTN Sources

Hewlett-Packard BPO Units - Exclusive: Sources
-Infosys, Cognizant likely suitors for Hewlett-Packard BPO units
-3 Hewlett-Packard BPO units up for grabs; estimated value $150 million
-Alert: Hewlett-Packard has 4 BPO units in India


Source: Moneycontrol

Pipavav IPO overbid 2.67 times: Should you invest?

Pipavav Shipyard has opened its initial public offering (IPO) of 85,450,225 equity shares of Rs 10 each for subscription. It has been subscribed 2.67 times so far and has received bids for 18.72 crore shares as against the issue size, as per the data available on the NSE website.

Maximum bids were seen at Rs 60/share, a higher end of the price band. Qualified and non-institutional investors' portion subscribed 2.83 times and 7.53 times, respectively.

It will raise nearly Rs 513 crore at higher end of the price band Rs 55-60 per equity share. The issue will close for subscription on September 18, 2009.

Moneycontrol conducted a poll whether to subscribe the issue or not. All experts recommended avoiding the issue while SP Tulsian and Avinash Gorakshakar recommended subscribing the issue.

Source: Moneycontrol

Ashwani Gujral's top five picks for today's trade

HCL Technologies: Buy
Stop loss at Rs 315 per share
Target of Rs 350 per share
HCL Technologies has been in a narrow range for the last eight-ten days and on September 16 broke out above Rs 320-321 –– from here it could easily go up to Rs 350 levels. So, we can keep a stop of about Rs 315 per share and buy it. On September 16, technologies came back so that’s a call given by the American Depository Receipt (ADR) performance that today HCL Tech could do well.


Nilkamal: Buy
Stop loss at Rs 135 per share
Target of Rs 154 per share
Correction for five-six days, stock did well on September 16 for the first day. So that should follow through today; Rs 135 per share is a stop here could buy it with a day’s target of about Rs 154 per share.


Eveready: Buy
Stop loss at Rs 65 per share
Target of Rs 79 per share
Eveready consolidated between Rs 60 and Rs 70 level. On September, the stock tried to move out. Now we have a stop of about Rs 65 per share and we could get to levels of Rs 79-80 per share.


Classic Diamond: Buy
Stop loss at Rs 19 per share
Target of Rs 25/29 per share
All the diamond stocks, the jewellery stocks are doing well maybe exports are picking up. Here Rs 19 per share is a good stop; one could get this stock at Rs 25 per share and even a bit larger target of Rs 29 per share. Generally the smaller stocks start doing well once retail participation comes back and even if the market levels are 5,000, retail participation is really low. So these stocks are yet to get to their full potential.


Torrent Power: Buy
Stop loss at Rs 254 per share
Target of Rs 300 per share
Torrent Power is a stock that’s making fresh highs. Power is sort of in the flavour, on September 16, ABB was seen coming back. So, one could buy this with a stop of about Rs 254 per share, target here could be easily Rs 300 per share. Beyond 5,000, we will get heavy-duty buying, that frenzied buying likely to come in midcap. So a lot of midcaps which broke out on September 16 are good buyers for levels beyond 5,000.


Source: Moneycontrol

Wednesday, 16 September 2009

Karnataka Bank (Rs 135.2): Buy

We recommend a buy in Karnataka Bank from a short-term horizon. It is evident from the charts that the stock, after encountering key resistance at Rs 155 in late May, began to decline. It was on a medium-term downtrend until it found support at around Rs 124 in late August. Subsequently, the stock commenced trending up, resuming its intermediate-term uptrend that started from the March low of Rs 55. The stock surpassed its 21-day moving average recently and it breached its 50-day moving average on September 15. Moreover, we notice that there is an increase in volumes over the past three trading sessions. The daily relative strength index (RSI) has entered the bullish zone and the weekly RSI is on the verge of entering this zone. Our short-term outlook for the stock is bullish. We expect it to rally further until it knocks our price target of Rs 149 in the approaching sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 128.

Source: thehindubusinessline

Buy Canara Bank, says Sudarshan Sukhani

One should buy Canara Bank, says Technical Analyst, Sudarshan Sukhani.

Sukhani told CNBC-TV18, "Canara Bank has been a good performer but it has not gone to the excesses – I will not call them excesses, it has not run up as much as Bank of India or Bank of Baroda, which means there is a lot of potential in Canara Bank to do what the other banks are in the process of doing.”

He further added, “Canara Bank is a stock that has seen back-to-back gains. Normally I would have said buy on dips but banks are not buy-on-dips candidates. This rally can continue not only today but for the next few days. So you should go ahead, buy Canara Bank, keep a stoploss if you are a day trader, you have a target. If you are a positional trader, you can just hang on to Canara Bank and wait patiently for the next few days.”

Source: Moneycontrol

Buy Television Eighteen: Sudarshan Sukhani

Sukhani told CNBC-TV18, "I like TV18 and that is a surprise because I have been very bearish on that stock for many months and the stock prices have more or less justified my skepticism. TV18 after a very sharp correction - first a sharp rally and then a sharp correction – is in a trading range. Yesterday it picked up a little but that is what we need to know that maybe it is coming out of the trading range. So, it is a low price stock in a sense it has corrected a lot. So, there is a lot of potential on the upside. I am not talking about fundamentals but technically there is a buying opportunity here and once these themes get captured by the market, the rallies could be much higher. For a day trader, you have targets; for a positional trader, it could be very interesting.”

Source: Moneycontrol

Pipavav IPO fully subscribed: Should you invest?

Pipavav Shipyard has opened its initial public offering (IPO) of 85,450,225 equity shares of Rs 10 each for subscription today. It has been subscribed 1.42 so far and has received bids for 9.9 crore shares as against the issue size, as per the data available on the NSE website..

It will raise nearly Rs 513 crore at higher end of the price band Rs 55-60 per equity share. The issue will close for subscription on September 18, 2009.

Moneycontrol conducted a poll whether to subscribe the issue or not. All experts recommended avoiding the issue while SP Tulsian and Avinash Gorakshakar recommended subscribing the issue.

Source: Moneycontrol

Tuesday, 15 September 2009

Pipavav Shipyard — IPO: Avoid

Investors with a low risk appetite can give the initial public offer (IPO) of shipbuilder Pipavav Shipyard a miss; the offer does not appear to be a compelling investment option at this point in time given the lack of an operational track record, relatively attractive valuations of listed peers, pricing pressures and risks of vessel order cancellations.

The shipbuilding sector is reeling under stress as a result of the downturn, with no clear signs of revival in orders.

The offer is being made at a price band of Rs 55-60; the price discounts the estimated per share earnings for FY-11 by about 18-20 times. This is at a steep premium to the listed peers ABG Shipyard and Bharati Shipyard that are currently trading at single-digit valuations.

While a premium to peers may be justified given Pipavav’s superior dock facility and multi-product capabilities, the premium demanded may not be warranted at this stage for the following reasons: One, shipyard is a sector with high cyclical risks and has traditionally traded at a discount to the broad market. Two, lack of operational track record and execution risks associated with Pipavav makes the pricing appear even more stiff at this stage. On an enterprise value to order book ratio too (as revenue is yet to flow), Pipavav is at 1.1, stiffer than the 0.3-0.4 times ratio of its peers. Earnings may however ramp up quickly post FY-11 when a good number of the vessels contracted now are completed.

The shipbuilding business of Pipavav Shipyard, no doubt, holds huge long-term potential, given the company’s well-integrated facility comprising docks, fabrication and block assembly as well as facilities for offshore products.

Business opportunity flowing from the co-promoter Punj Lloyd may also prove to be an added benefit. Investors can therefore wait out the IPO and look at buying the stock in the secondary market at a later date, when a lower price or a year or two of sustained financial performance, make the stock a more attractive investment.

Source: thehindubusinessline

Maruti Suzuki: Buy

The stock of Maruti Suzuki is one of the outperformers in the BSE Sensex basket over the past year. But the stock remains a preferred exposure to capitalise on the recovery in automobile sales. Though concerns about a deficient monsoon and a slowdown in exports next year have tended to impact the stock’s performance in recent weeks, the company appears well placed to weather both risks and still deliver strong growth.

Investors with a moderate return target (10-15 per cent) can consider buying the stock currently at Rs 1467. This translates into a PE multiple of 32 times trailing 12-month earnings, but one should keep in mind that earnings for the company remained depressed for most part of last year.

The company’s formidable array of products not only shielded it from the slowdown in demand last year but also helped expand its market leadership in the A2 and A3 car segments. The strong financial performance despite the input cost continuing to remain stiff is yet another comforting factor for investors. However, given the way the stock price has shot up in recent times, it may be ambitious to expect big returns in the near future.

Source: thehindubusinessline

Power Trading Corporation: Buy

Investment with a long-term horizon can be considered in the stock of Power Trading Corporation of India. PTC is India’s largest power trading company promoted by PSU majors NHPC, NTPC, PowerGrid and Power Finance Corporation; it has a 46.5 per cent share of traded electricity volumes.

The Electricity Act defines power trading as “Purchase of electricity for resale thereof”, which means the company facilitates flow of power from surplus generators to electricity deficit customers.

Source: thehindubusinessline

Prism Cement (Rs 52.9): Sell

We recommend a ‘sell’ in Prism Cement from a short-term perspective. It was apparent from the charts of Prism Cement that the scrip, after bottoming in October 2008 to a low of Rs 13.50; was on a strong uptrend. However, the stock encountered resistance in mid-August at Rs 60. After encountering resistance for the second time in early September, the stock changed direction. This trend reversal was triggered by negative divergence displayed in the daily moving average convergence and divergence. The stock has been on a short-term downtrend since then. While trending down, the stock penetrated its medium-term uptrend line and its 21-day moving average recently. The daily RSI is declining in the neutral region and weekly RSI began to fall from the overbought levels. The daily MACD has indicated a sell. We are bearish on the stock from a short-term perspective. We expect the stock’s decline to prolong until it hits our price target of Rs 47.5 in the upcoming sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 56.

Source: thehindubusinessline

Syndicate Bank (Rs 83.6): Buy

We recommend a buy in Syndicate Bank from a short-term perspective. It is evident from the charts of the stock that after recording a multi-year low of Rs 37.6 in March, the stock has been on an intermediate term uptrend. However, it has been consolidating sideways in the range of Rs 76-84 over the past month. On September 11, the stock gained almost 4 per cent, accompanied with good volume. The stock is trading well above its 21- and 50-day moving averages. Both the daily and weekly relative strength index (RSI) have re-entered the bullish zone from the neutral region. The daily moving average convergence and divergence indicator is signalling a buy. Considering that the intermediate-term up trendline is intact, we are positively biased on this stock from a short-term perspective. We expect the stock to move up further until it hits our price target of Rs 92 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.

Source: thehindubusinessline

Buy Balrampur Chini, target of Rs 148: Sharekhan

Sharekhan has maintained its buy rating on Balrampur Chini Mills with a target price of Rs 148 in its September 14, 2009 research report.

"We believe that the two-year (FY2010 and FY2011) scenario for sugar companies in India is strong with the domestic and global sugar industries experiencing a deficit. Thus, sugar prices are likely to remain high leading to hefty profits for these companies. The key risk to sugar prices though is the continuous intervention by the government. We maintain our 'Buy' recommendation on the stock with a price target of Rs 148," says Sharekhan's research report.

Source: Moneycontrol

Buy Bajaj Hindusthan, target of Rs 246: Karvy

Karvy Stock Broking has recommended a buy rating on Bajaj Hindusthan with a target price of Rs 246 in its September 15, 2009 research report.

"We are revising our rating on Bajaj Hindusthan from 'Outperformer' to 'BUY' considering 40% increase in volume growth from recent contract (31 August 2009) for raw sugar import. The company has contracted to import raw sugar of 0.4 mn mt in addition to 0.3 mn contracted earlier on 28 July 2009 for refining during sugar season 2010 (October 2009 to September 2010). Target of Rs 246," says Karvy's research report.

Source: Moneycontrol

Buy Reliance Comm, target of Rs 391: Motilal Oswal

Motilal Oswal has maintained its buy rating on Reliance Communication with a price target of Rs 391 in its report dated September 11, 2009.

"We maintain our price target of Rs 391/sh based on core DCF valuation (ex-incremental tower upside) of Rs 342/sh (12.6% WACC, 4% terminal growth, implied FY11 EV/EBITDA of 6.8x), and Rs 47/sh for the incremental upside from the passive infrastructure business (Rs 2 million/tower). Our DCF valuation for Reliance Infratel (RI) is USD 9 billion or Rs 200/sh of Reliance Communication, of which 40-50% would accrue from external tenancy, Buy," says Motilal Oswal's report.

Source: Moneycontrol

Buy JP Associates, target of Rs 274: Motilal Oswal

Motilal Oswal has maintained its buy rating on Jaiprakash Associates with a target price of Rs 274 in its September 10, 2009 research report.

"We expect JPA to report net profit of Rs 12 billion in FY10 (up 34% YoY) and Rs 10.7 billion in FY11 (down 11% YoY), given lower profitability in cement business. We arrive at revised SOTP-based target price of Rs 274 per share. Our valuations are contingent on successful fund raising in JPVL and power projects attaining milestone based progress, Buy," says Motilal Oswal's research report.

Source: Moneycontrol

Buy HCL Tech, target of Rs 346: Motilal Oswal

Motilal Oswal has recommended a buy rating on HCL Technologies with a target price of Rs 346 in its September 8, 2009 research report.

"On an EV/EBITDA basis the stock is quoting at 8.4x FY10E and 7.6x FY11E. We recommend a Buy with a target price of Rs 346, based on 14x FY11E earnings, implying a discount of 30% to our target multiple for Infosys," says Motilal Oswal's research report.

Source: Moneycontrol

Tuesday, 8 September 2009

Buy Rei Agro with stoploss of Rs 46: Gujral

One can buy Rei Agro with stoploss of Rs 46, says Technical Analyst, Ashwani Gujral.

Gujral told CNBC-TV18, "REI Agro is at a great price to buy because all the drought concerns everything has now discounted. At Rs 99 that was a sell price, I doubt whether that will come. If one can buy now the current purchase will yield profit, the stop loss is quite close around Rs 46. It could get to targets of Rs 62 and Rs 69. All these people who like to call themselves investors, you need to buy at good price to be an investor. You don’t buy stocks which are in frenzied mode and then hold on for three years thinking you are an investor. So people need to be careful when they buy stock."

Source: MoneyControl

Buy Hindustan Unilever, target of Rs 303: Sharekhan

Sharekhan has upgraded its rating on Hindustan Unilever from hold to buy with a target price of Rs 303 in its September 7, 2009 research report.

"The positive results of the corrective actions implemented by the company at the mass end and the expectations of a better rabi crop would lead to a pick-up in the sales volume of HUL in the coming quarters. These two factors would considerably ease the risk of a poor performance owing to any slackening in rural consumption due to a poor kharif crop, which had been overhang on the stock. Consequently, we upgrade our recommendation from 'Hold' to 'Buy'. We maintain our price target of Rs 303," says Sharekhan's research report.

Oil India IPO overbid 1.41 times: Should you subscribe?

Oil India Ltd. (OIL), the second largest oil and gas company in India, opened its initial public offering (IPO) of 26.45 lakh equity shares of face value Rs 10 each for subscription today. Its issue price has been fixed at Rs 950-1050 per equity share and it will raise around Rs 2,512 - Rs 2,777 crore.

It has been subscribed 1.41 times so far and has received bids for 3.72 crore shares as against issue size. Till yesterday, its QIB (qualified institutional investors) portion subscribed 2.3 times.

Moneycontrol.com conducted a poll among market experts to find out if you should subscribe to the issue or not. While most experts say 'subscribe', SP Tulsian and Sajeev Dhawan say 'avoid'. Moreover, those who advice to subscribe believe that this will be a long-term bet.

Source: MoneyControl

Frontliners to rally further, midcaps won't: Morgan Stanley

Narayan Ramachandran of Morgan Stanley says that the industrial production (IIP) data as well as economic indicators are showing positive signs, which is helping the markets move higher. "They have broken the upside range," he says, adding that the markets can rally another 10-15% from here. However, he feels that the mid-caps may not outperform going forward.
Ramachandran says he would not buy commodities for the long-term. "Gold remains hedge in every portfolio."

Source: MoneyControl

Buy United Phosphorous, target of Rs 225: Sharekhan

Sharekhan has maintained its buy rating on United Phosphorous with a target of Rs 225 in its September 7, 2009 research report.

"We have fine-tuned our earnings estimates to factor in the details from the annual report of the company. At the current market price the stock trades at 11.0x and 9.1x its FY2010E and FY2011E earnings respectively. We maintain our 'Buy' recommendation on the stock with the price target of Rs 225," says Sharekhan's research report.

Sunday, 6 September 2009

Oil India — IPO: Invest at cut-off

Oil India (OIL) may not be in the same league as Oil and Natural Gas Corporation (ONGC) in terms of its size of business, extent of reserves or scale of operations.

Where it scores over its big brother though is in its ability to show a growth trend in crude oil production and in adding to its reserves, more than what it produces every year.

OIL’s offer at Rs 950-1050, is at a fair valuation that compares favourably with its peers on most parameters. The offer band is at a price-earning multiple (PEM) of 9-10 times the 2008-09 earnings. ONGC has a valuation of 16. OIL also compares favourably on price-to-book value terms with a ratio of 2-2.2; ONGC’s is at 3.2.

Unlike other recent IPOs, OIL has left something on the table for investors. Investors can subscribe at the cut-off price and hold the stock for the medium-term.

Source: thehindubusinessline

Analysts bullish on full subscription of OIL IPO on Day 1

With investors looking bullish on public sector undertakings, the initial public offering of Oil India -- the second state-run to firm to hit the capital market this year -- starting tomorrow is expected to elicit good response, analysts said.

OIL has fixed a price band of Rs 950-1,050 per share for the IPO, which is expected to raise up to Rs 4,982 crore.

"Despite the aggressive pricing, the public offer of OIL will sail through comfortably and would be fully subscribed within hours of opening as investors still want to invest in PSU IPOs," Taurus Mutual Fund Managing Director R K Gupta said.

The OIL IPO, which would close on September 11, comes a month after the successful offering by hydroelectric power generator NHPC. The shares of OIL would be listed on the bourses on September 29.

The IPO of state-run hydro-power company NHPC received robust response from investors with the issue getting subscribed nearly 24 times. The company raised over Rs 6,000 crore from the IPO, marking it as the second biggest public offer after Reliance Power last year.

"There is demand in the market and the government is trying to capitalise on that... State-run companies have a good track record of investor returns and they want to raise as much money possible," Gupta said.

Both retail investors and institutional players would be betting more on OIL, he noted.

According to analysts, aggressive pricing of the government IPOs would gradually lead to investors taking a cautious stance before investing in them in future.

"There is not much left for the investors. These days even PSUs are not leaving money on table for retail investors and in due course of time the huge demand generated will also come down," SMC Capitals Equity Head Jagannadham Thunuguntla said.

Further, the listless debut of NHPC and Adani Power on the bourses, seem to have dampened the aggressiveness in the IPO financing market.

"Post the disappointing debut by NHPC on the bourses the IPO financiers were forced to pay the interest cost on the borrowing out of their pocket. This has somewhat dented their investment spirit," Thunuguntla added.

Source: EconomicTimes

Did Bernanke save US from another Great Depression?

The causes of last year's financial upheaval remain hotly debated, but many analysts say a swift and massive response by US authorities may have averted another Great Depression.

A year after the collapse of Lehman Brothers and a near-meltdown of the financial system, a fragile recovery appears to be underway that will put a bookmark on the worst crisis of the post-World War II era.

Perhaps the most important player in the crisis was Federal Reserve chairman Ben Bernanke, a scholar of the 1930s determined to avoid a repeat of that economic devastation.

"The Fed's policies averted a second Great Depression," says Joseph Brusuelas, at Moody's Economy.com.

"Under Bernanke's leadership, the Fed's unorthodox response to the crisis is without precedent. It has slashed the policy rate to zero and flooded the financial system with liquidity."

Brusuelas said the Fed's series of liquidity programmes "slowly rebuilt confidence in the banking system" and helped unfreeze credit markets to help revive economic activity.

Jeffrey Sachs, economist at Columbia University, said that at the time of the Lehman collapse, "a depression seemed possible," but that now "the storm has broken" as a result of the exceptional action of the Fed and other central banks.

"Months of emergency action by the world's leading central banks prevented financial markets from crashing," Sachs writes.

Diane Swonk, chief economist at Mesirow Financial, said that the Fed and Bernanke "performed unbelievably well in the height of the crisis."

"He reacted so quickly, he was doing things creatively," she said. "Once Lehman went there was nowhere to go but down, the question was how far we were going to fall."

Yet Bernanke does not escape his share of blame for the crisis, both for his role as a Fed governor under then-chairman Alan Greenspan from 2002-2005 and after taking the helm at the central bank in early 2006 as the crisis was unfolding.

Economist Allan Meltzer at Carnegie Mellon University said the Lehman collapse represented a mistake of historic proportions.

"Allowing Lehman to fail without warning is one of the worst blunders in Federal Reserve history," he wrote in a Wall Street Journal essay.

Ahead of the crisis, Bernanke "consistently downplayed the danger signs that others brought to his attention," said John Browne, senior market strategist at Euro Pacific Capital.

Source: EconomicTimes

Bartronics India: Buy

Investments with a two-three year perspective can be considered in the shares of Bartronics India, considering the company’s strong order book position, increasing Indian footprint on the back of large government deals and prospects of winningmore orders over the next few years.

At Rs 166, the stock trades at 5-6 times its likely 2009-10 per share earnings. As Bartronics is seeing high growth in revenues and profits and, despite being in a hardware-intensive business, has consistently managed an operating profit margin of over 25 per cent and net profit margin of close to 15 per cent, there may be scope for further capital appreciation.

Between 2006-07 and 2008-09, the company has seen its revenues and operating profits grow nine-fold. It has increased its revenues from India to nearly 65 per cent in recent times from about 30 per cent a couple of years ago. This was made possible by growing presence in government deals, where heavy technology spends are happening. The company also delivers smart cards (mostly SIM cards) to telecom operators, again a high-growth area.

A few quarters ago, Bartronics secured a Rs 5,000-crore deal from the “Aapke Dwar” project of the Municipal Corporation of Delhi spread over nine years. Revenues are set to kick in from October with the launch of 300 kiosks in the first phase. The deal also confers on Bartronics the right to advertising revenues from these kiosks. With the Commonwealth Games set to begin in Delhi in 2010, the scope for substantial advertising revenues makes this deal even more lucrative. The company has tied up with banks for the Rs 750 crore capital expenditure needed for this deal. This could step up interest costs and strain margins. But with interest coverage of over six times, the burden of servicing debt may not be too heavy.

Apart from this deal, the company has an order book worth Rs 600 crore as of June 2009, to be executed over the next year. A large part of this has come from its high-margin RFID solutions business. Armed with key technical certifications, Bartronics hopes to win deals from the Delhi Metro and Indian Railways, with both entities set to increase technology spends. The company has several deal wins from State governments and Government projects in Singapore. Another target area is animal tagging, where the company has the necessary certification.

Source: thehindubusinessline

The harder stocks fell, the higher they bounced back

If you were allowed to travel back in time to March 9 this year, when the Sensex was poised at 8100 levels, which stocks would you have bet on? Analysis shows that you would have reaped the best rewards had you been brave-hearted enough to buy those that were the most out-of-favour at that point in time. The realty sector, which was down 91 per cent from its January 2008 peak, has been the best sector performer in the post-March rally.

Small-cap stocks have been the best market cap segment to be in. And if you had built a portfolio of stocks that had seen a value erosion of 90 per cent or more in March, you would actually have got five times your money in six months! In a nutshell, ‘What fell the most must rise the most’ is a maxim that has held well in this rally. Does this experience hold any lessons for investors? Well, for starters, here’s an analysis of the stocks that led to this rally.

Sectors at the forefront
Returns on the BSE sectoral indices suggest that investors would have been able to outperform the broader market by betting on sectors that were battered the most as the market plunged to its March lows. The clear frontrunner in this rally is the realty sector which, between March 2009 and now, has delivered a staggering 230 per cent return, surpassing other sectoral indices (100-150 per cent return).

The realty sector was singled out for brutal treatment in the market fall; with the BSE Realty index losing 91 per cent in value between January 2008 and March 2009. However, few investors may actually have taken advantage of this opportunity as there was barely any sign of a recovery in the realty sector’s prospects in March. . Signs of recovery in the sector’s fundamentals are just beginning to emerge, and mainly for the larger players.

It is, however, important to note that had you invested in realty stocks at their peak, you would still be staring at sizeable erosion in your wealth. If betting on realty was a difficult call to make, putting money on metals or capital goods, the other two most beaten down sectors in March 2009, would have paid off well too, though not as handsomely as realty. While the BSE Metal Index is up 184 per cent from its March low, the BSE Capital Goods index is up 140 per cent.

The two sectors that have done well in this rally without suffering too much in the previous fall are IT and automobiles. The BSE Auto index is up 136 per cent, after taking just a 55 per cent knock in the 2008 correction.

The BSE IT index too has more than doubled from its lows, after losing 56 per cent from its peak.

Small-caps race ahead

It is not just in terms of sector preferences that down-and-out stocks led this rally. Small and mid-cap stocks that fell more than their blue-chip counterparts during the meltdown too outperformed in the rally so far. Consider this.

With a near 80 per cent fall, the BSE Small-Cap Index lagged the BSE Midcap (down 75 per cent) as well as the Sensex (down 62 per cent). In the bounce-back, the situation has simply been turned on its head. While the BSE Sensex delivered a 95 per cent gain from its low on March 9, the BSE Small-cap index returned 144 per cent and the BSE Midcap Index 129 per cent.

The out-performance of small and mid-cap stocks has been a clear outcome of their bargain valuations during the lows. The BSE Midcap index traded at a price earnings multiple of just nine times trailing earnings and the BSE Small-Cap index traded at less six times during the March 2009 lows. A reversal in the interest rate cycle, with rates beginning to trend down, may have supported the re-rating of these stocks, as has the better-than-expected sales growth of the mid-sized companies in the June quarter.

However, investors need to note that while betting on small or mid-cap stocks at market lows may pay off eventually, taking bets on them when markets peak can be extremely injurious to their wealth!

Stocks that led the rally
The above trends prove that investors who picked the most battered sectors and classes of stocks would have reaped the most rewards in the recent rally. But what about individual stocks? Well, the pattern is only repeated.

If an investor had completely ignored all fundamental or sector considerations and blindly picked up the ones which fell more than 90 per cent from their peaks on March 9 2009, his/her portfolio would today have risen by 366 per cent from its March 9 value! The investor would have clearly outperformed the Sensex, which made a 93 per cent return in this period.

The multi-baggers of this rally were the mid- and small-cap players from the realty and construction space — Madhucon Projects, Unity Infra, Ahluwalia Contracts, Peninsula Land, HDIL, Marg Constructions and Orbit Corporation. All these stocks lost over 85 per cent of their value in the market crash between January 2008 and March 2009; but turned around to give a stupendous 300-400 per cent return since.

One surprising trend that emerges is that the multi-baggers in this rally did not attract significant FII buying. Though FII buying was clearly the trigger for this rally, stocks which rose manifold were not the ones where FIIs pegged up their stakes to the maximum.

In fact, stocks such as McNally Bharat (up fivefold), Madhucon Projects (up fourfold), JSW Holdings (up fourfold) and Unity Infraprojects (up fourfold) were among the top gainers, despite FIIs actually trimming their stakes in these companies in the March-June 2009 quarter.

With the rally driven mainly by hopes of a recovery in earnings and the prospect of a recovery already built into current valuations, from here on market moves may become more selective.

Investors may now need to keep watch on the new sector leaders that are emerging in the recent recovery. If one looks at the sectors that have already moved past January 2008 highs, it appears to be IT, automobiles and FMCGs.

IT, which was beaten down on concerns of the US economy’s poor health and was languishing even after many sectors recovered past the March low, has played catch-up, as recovery signs emerged in the US. And as far as the auto segment is concerned, the recovery started much ahead; it bottomed out in the October trough and started recovering before early 2009.

Hero Honda Motor and Maruti Suzuki are at significantly higher levels than in 2008 peak. Select scrips from commodities — sugar, cement; pharmaceuticals, FMCG too — are riding above the 2008 high. Shree Cement, EID Parry, Godrej Consumer and Cadila Healthcare are among such stocks.

Source: TheHinduBusinessLine

Friday, 4 September 2009

Sensex to touch 50,000 in 7 yrs: Morgan Stanley

Morgan Stanley on Thursday said that sensex could touch 50,000 mark in seven years from current levels , if the assumptions made are optimistic.

"One way of looking at market valuations is to find out the number of years it could take the market to reach a certain level. In our base case, using our residual income model, the BSE sensex (used as a market proxy) could take about nine years to breach 50,000 from its current level.

If the assumptions are made optimistic, the period to 50K shrinks to seven years," analysts Ridham Desai and Sheela Rathi said on Thursday .

Source: EconomicTimes

Average returns of Sensex are highest on Fridays

Last October, investors witnessed two of the biggest falls in the history of sensex — both on Fridays. But a Friday isn't all about fall. Did you know the index's best 'average daily gains' actually come on the last day of the trading week?

Data shows that average daily returns for sensex is not only the highest on Fridays but nearly two to four times more than on days such as Tuesday, Thursday or even Monday. This is based on an analysis of daily gains (in percentage terms) since September 1, 2003 when sensex was first calculated on freefloat market capitalisation method. In fact, when it comes to the top 30 daily gains for the 30-share benchmark in the last five years, Friday features the highest number of times (7), that is nearly 1 out of 4 occurrences.

So, what drives this Friday effect? "(This) data is driven by levels of market activity rather than anything else i.e. trading volumes tend to be higher in the second half of the week (Wed-Fri ) and that results in more deals being closed on such days. Brokerages like to close trades before the week ends because if they wait for the following week the trade sometimes gets away," said Saurabh Mukherjea, India head of Noble Group, a British investment bank.

Experienced market participants have had memorable Fridays. Sensex gained over 1,100 points on January 25, 2008, another 750 points on October 31, 2008 and a half a dozen of occurrences when sensex rose 400-puls points in the last four years. Average daily returns for sensex on Friday are the highest at 0.20%, followed by Wednesday (0.12%), Tuesday (0.11%), Monday (0.06%) and Thursday comes last returning a mere (0.05%), data shows.

Thursday's performance has not surprised market experts . In last 4 years, investors have seen sensex lose between 400-800 points on at least 10 occasions on a Thursday. "One of the reasons that can be attributed to lower returns on Thursday can be impact of F&O Expiry which is normally on the last Thursday on the month," said Chetan Majithia, head (Equities) at Crisil.

Source: EconomicTimes

Gold surges to near $1,000; touches new record in India

Gold prices surged to near 1,000 dollar level in global markets on Friday on investment buying while touching an all-time high in India on festive demand.

Gold in the US futures market reached 999.50 dollar last night, the highest price since Feb 23 helped by lower equities as sluggish stock markets diverted funds to the bullion as a safe haven. The MSCI World Index of shares is down 2.4 per cent this week, heading for its first decline in eight weeks.

The metal also gained as investors sought a haven on concern that a global recovery might be slower than expected. The US jobless rate in August jumped to 9.7 per cent, the highest since 1983.

A firming trend in the US markets, which normally set price trend in Asian region including India, drove the gold prices in India to its record high levels amid brisk buying by stockists and jewellery makers for the ensuing marriage and festival season.

The bullion in the national capital today shot up to an all-time high of nearly Rs 16,000 per 10 gram on last minute heavy purchases by traders to build up stocks before the start of the inauspicious 'Sharad' tomorrow.

The surge in the gold rates was led by heavy demand from jewellers and stockists before Shradh, a inauspicious fortnight for making any fresh purchases, marketmen said.

"We have plenty of orders for jewellery in hand and have to purchase it before the fortnight of Sharads begin," said Delhi-based jeweller Rakesh Anand.

Further the uncertainty in the stocks, which remained more volatile in last one-week, left little option for the investors but to invest in bullion as a safe haven.

In the last one week the Bombay Stock Exchange index Sensex fell for four consecutive days, but gained 290.79 points today at 15,689.12, the last trading day of the week.

Silver ready surged by Rs 700 to Rs 25,300 per kg and weekly-based delivery by Rs 560 to Rs 25,700 per kg.

Standard gold and ornaments shot up by Rs 200 each to Rs 15,900 and Rs 15,750 per 10 gram respectively. Sovereign also rose to all-time high by gaining Rs 100 to Rs 12,800 per piece of eight gram.

Source: EconomicTimes

IFCI has a short-term target of Rs 71: Thacker

Thacker told CNBC-TV18, "They have been buzzing around well. Not only the financials, but the public sector undertaking (PSU) banks especially the smaller ones also seem to have joined the rally. I like IFCI a lot in the sense that we have seen since the start of the rally in the month of March the stock has made a high at Rs 57 in the month of June and few days back it recorded a high of around Rs 57."

He further added, "Today, it is trading above the psychological mark since it’s a weekend closing, weekly closing for the stock and its closing at new highs for the upmove. So momentum should be good for the stock, we have seen intraday excellent addition in the open interest; Rs 70 is the short-term target we are looking for the stock."

Source: Moneycontrol

Subscribe to Oil India IPO: Brokerages' unanimous view

Oil India, the second largest oil and gas company in India, will come out with an initial public offering (IPO) of 26,449,982 equity shares of face value Rs 10 each. Its issue price has been fixed at Rs 950-1050 per equity share and it will raise around Rs 2,512.75-2,777.25 crore.

The issue comprises a net issue to the public of 24,045,438 equity shares and a reservation of 2,404,544 equity shares for subscription by eligible employees, at the issue price. The issue shall constitute 11% of the fully diluted post-issue capital of the company.

Research and broking firms have recommended investors to subscribe to the issue.

Source: Moneycontrol

Bajaj Auto Finance (Rs 224.5): Buy

We recommend a buy in Bajaj Auto Finance from a short-term horizon. It is evident from the charts that the stock has been on an intermediate-term uptrend, forming higher peaks and troughs since March low of Rs 43. In mid-July, the stock took support around Rs 140 and resumed its uptrend. It is trading well above 21- and 50-day moving averages. On September 1, the stock jumped 8 per cent accompanied with good volume, penetrating the short-term resistance at Rs 215. This break through has reinforced the stock’s bullish momentum. Both the daily as well as weekly relative strength indices are featuring in the bullish zone. The daily moving average convergence and divergence is signalling a buy. Our short-term outlook is bullish on the stock. We anticipate the uptrend to continue until it hits our price target of Rs 247. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 212.

Source: thehindubusinessline

Thursday, 3 September 2009

Mkts likely to see 10-15% sell-off: Shankar Sharma

Shankar Sharma, Vice Chairman and Joint Managing Director of First Global said that that market was looking tired within a range and it was experiencing a stock-specific movement. He is of the view that the current rally in the markets is being led by a handful of stocks which is disconcerting. According to Sharma, a 10–15% sell-off in the market is very likely. Sharma further said that Sensex could go to 13,000 before it goes back to 17,000.

Source: Moneycontrol

Largecap IT stks to trade sideways for 6-9 mths: JPMorgan

There have been a lot of divergent takes in the information technology space. Many investment banks seem to think the worst is over and there would be a rapid acceleration of business traction from here. Some others are not quite so convinced at these valuation levels.

However, Manoj Singla of JPMorgan supports the first camp. He sees improvement in fundamentals, which would accelerate business moving to the end of this year. He further says technology stocks have discounted a lot of good news. However, he added, “We will probably be in a sideways trading zone for most of the large caps IT stocks in the next 6-9 months.”

Source: Moneycontrol

Balaji Telefilms (Rs 66.3): Buy

We recommend a buy in Balaji Telefilms from a short-term perspective. It is evident from the charts that in mid-July it took support around Rs 40 and resumed its intermediate-term uptrend, which has been in place since March low of Rs 24.8. Moreover, it has been on a medium-term uptrend from July low. The stock breached its 21- and 50-day moving averages in mid-August and is trading well above them. On September 2, the stock penetrated its near-term resistance at Rs 64 by gaining 9 per cent, accompanied with high volume. The daily relative strength index has re-entered the bullish zone and weekly RSI is on the verge of entering this zone. Besides, the weekly moving average convergence and divergence indicator is likely to enter the positive territory. Our short-term outlook is bullish on the stock. We expect its up-move to continue until it knocks our price target of Rs 73. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 63.

Source: thehindubusinessline

Wednesday, 2 September 2009

Jindal Saw (Rs 533.5): Sell

We recommend a sell in Jindal Saw from a short-term perspective. It is apparent from the charts that the stock was on a medium-term uptrend from its July low of Rs 318 to August peak of Rs 591. The stock breached its medium-term uptrend-line last week and has been on a short-term downtrend. The daily price rate of change indicator is displaying negative divergence and has entered the negative territory indicating selling interest. The daily relative strength index has entered the neutral region and weekly RSI is slipping from the overbought territory. The daily moving average convergence and divergence is signalling a sell. We are bearish on the stock from a short-term perspective. We anticipate the stock’s decline to prolong until it hits our price target of Rs 480. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 559.

Source: thehindubusinessline

NTPC and REC follow-on offers to hit the market this fiscal

State-owned utilities NTPC and Rural Electrification Corp will hit the capital market with their follow-on public offers to raise about Rs 9,000 crore by the end of the current financial year.

"NTPC and REC follow-on issues will come up before March 2010," Power Secretary H S Brahma told reporters here.

The government is likely to divest 10 per cent of its holding in the country's largest power generator NTPC, which also plans to offer 10 per cent fresh equity and hopes to raise Rs 6,000 crore through this follow-on offer.

NTPC would utilise the proceedings from this issue to part fund its capital expenditure plans of Rs 1,60,000 crore during the current XIth Five Year Plan Period (2007-12).

The company has set a target of achieving power generation capacity to the tune of 50,000 MW by 2012 from the current 30,000 MW.

REC on the other hand is awaiting cabinet approval for its FPO. The company wants the capital raised to disburse loans to power projects. It would issue about 17 crore shares of Rs 10 face value each. Considering the current market situation, the company is hoping to fetch about Rs 2,900 crore through premium to be decided later.

Source: EconomicTimes

Buy ICSA for short term target of Rs 225-250: Nirmal Bang

Nirmal Bang has advised traders to buy ICSA for short term target of Rs 225-250.

“Buy ICSA with an investment view. Strong support for the stock is seen at Rs 185-170 region. The counter is trading above its Bollinger band of Rs 199 and short term target looks Rs 225-250,” the recommendation said.

Source: EconomicTimes

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