Capital market regulator, the Securities & Exchanges Board of India (Sebi) said on 21 June it will soon issue guidelines on short-selling that will allow institutional investors to sell stocks without owning them.

"Individuals are allowed to shortsell, we are extending it to financial institutions, including mutual funds, soon," Sebi Chairman M Damodaran told reporters on the sidelines of the Financial Planning Congress here.

The guidelines are being finalised and will be issued soon, he said without specifying the date.
The market watchdog at its board meeting held on March 22 had allowed short-selling by institutional investors, both domestic and foreign. However, the relevant guidelines will come out shortly.

The decision on short-selling, followed the announcement by Finance Minister P Chidambaram in the Budget on February 28. The Sebi-appointed secondary Market Advisory Committee, had also recommended short-selling by institutional investors in October 2005.

It is believed that initially short-selling would be permitted only on those stocks in which derivative products are available.

The introduction of short-selling is likely to benefit the market in more ways than one. Apart from improving efficiency and liquidity, it will also help increase participation in a falling market since institutions will try to take advantage of such a market by going short, thus improving the market depth.

 

 Anil Ambani group company, Reliance Communications on 21 June launched mobile radio service on its phones.

The service would be available to both post-paid and pre-paid subscribers of Reliance Mobile, Reliance Hello and post-paid Reliance landline subscribers, a company release said here.

All Reliance mobile customers, regardless of the type of mobile phone, can now avail mobile radio service across the country.Customers can access the service by dialling 51234777.

The service would be available in eight Indian languages including Tamil, Gujarati, Kannada, Hindi and Malayalam, amongst others.

Commenting on the launch, company's President, Applications, Solutions and Content Group, Mahesh Prasad said: "with launch of the mobile radio service, the fundamental barrier between a mobile and a radio has been bridged. Effectively, every phone becomes an 'FM-like' radio phone for those who have missed out on buying and FM-enabled phone."

Prasad further said the company would soon provide access to regional content similar to various radio stations that were popular across the country.

Reliance Mobile Radio has a daily schedule of categories such as devotional and latest hits. Customers subscribing to this service will have the option of accessing complete songs of one's choice and will also have the flexibility of skip or replay.

Customers have the option to subscribe to Mobile radio at Rs30 per month and then listen to radio at Re1 per minute by dialling 51234777 or listen to mobile radio at Rs3 per minute (without subscription) by dialling 51234778.

 

 Ventura Securities report on Great Offshore:

Rising oil consumption leading to increased E & P activities augurs well for the offshore oil field services providers

On the back of increased oil prices and India's policy to achieve National Energy Security, domestic E&P activities are expected to increase at a rapid pace. The rise in E&P is in turn expected to generate huge business for companies offering offshore oilfield services to oil & gas majors. GOL being a major player in the field is expected to reap benefits from the same.

Buoyant demand for OSVs, Rigs and Tugs to firm up day rates

The rise in E & P activities coupled with high demand and long gestation period of new builds has created a shortage of OSVs and led to an increase in their prices. Currently 11 PSVs and 28 AHTSVs are available in India as against the demand for 18 PSVs and 46 AHTSVs.

Timely Fleet expansion to capture the current E & P boom

To capture the boom in the E & P industry, GOL, in November 2006 embarked upon a USD 225 million (approx. Rs.10 billion) expansion plan for acquiring offshore support vessels over the next three years. Post expansion, the fleet size has increased from 33 in FY06 to 40 in FY07 and will touch 42 by April '09.

Rising oil consumption leading to increase in E & P activities augurs well for the offshore oil field services providers

Together with the country's impressive growth, India has also become a significant consumer of energy resources. According to EIA estimates, India was the fifth largest consumer of oil in the world during 2006 with a usage of an estimated 2.63 million bbl/d (barrels per day) as against a production of merely 846,000 bbl/d. The combination of rising oil consumption and only a moderate rise in production levels has left India increasingly dependent on imports to meet consumption needs. To achieve National Energy Security, the government has introduced policies aimed at increasing domestic oil production and oil exploration activities. As part of this effort, the Ministry of Petroleum and Natural Gas crafted the New Exploration License Policy (NELP), which for the first time permits foreign companies to hold 100 percent equity ownership in oil and natural gas projects. Various private players were also awarded exploratory blocks in the six rounds of NELP bidding. NELP VI received an overwhelming response with 165 bids for 55 oil blocks in 2006. Global energy giants like British Petroleum, British Gas, Italy's ENI, Petronas and French Multinational Total were among the bidders for the NELP VI (which covered 3.52 lakh sq. km.). Most discoveries of reserves in the past two years have been offshore, including the recent ones at KG, Cambay and Mahanadi basins.

With aggressive implementation of NELP programme, the domestic E&P activities are expected to increase at a rapid pace. This increased E&P activity in new oil & gas fields is expected to generate huge business for companies offering offshore oilfield services to oil & gas majors. GOL being a major player in the field is expected to reap benefits from the same. The number of offshore rigs operating in India has gone up to 42 rigs from the FY06 figure of 35. This is despite the fact that worldwide rig availability is difficult. Average rig utilization in India has been 95%.


Timely Fleet expansion to capture the current E & P boom

To capture the boom in the E & P industry, GOL, in November 2006 embarked upon a USD 225 million (approx. Rs.10 billion) expansion plan for acquiring offshore support vessels over the next three years. Post expansion, the fleet size has increased from 33 in FY06 to 40 in FY07 and will touch 42 by April '09. GOL has recently ordered one multi role support vessel to be commissioned in Q1FY10, and one jack-up rig to be received by Q3FY09. The total committed capital expenditure towards these purchases will be financed through a mix of debt and equity, in the ratio of 25% internal accruals and 75% debt. GOL is also open to buy second-hand vessels if the opportunity exists.

Valuation

The impressive fleet expansion and growing efficiency coupled with rising day rates and firm industry outlook will result in increased profitability for GOL. However, we expect the company to be on a higher growth trajectory once the Jack Up Rig and OSV will be added to the fleet in FY2009. We expect the company's revenues & profits to grow at a CAGR of 12.7% and 22.1% respectively, over the next 2 years. At the CMP of Rs. 790, the stock is currently trading at 16.1x the FY08e earnings & 11.5x its FY08e EV/EBIDTA. Considering the robust demand for offshore services, we recommend the investors to ACCUMULATE / BUY on dips with a price target of Rs 950 over a period of 15 months.

 

 HDFC Securities report on Praj Industries:

Key Positives

We see PRAJ transforming itself into a "Global provider" of end-to-end Ethanol distillation equipment and technology. In this process, we see the company exploring newer territories (Europe and Brazil, to be specific), which would tend to significantly improve our Conviction levels on PRAJ's business growth. We built our opinion on PRAJ's success in the last few years (Mainly in tapping the US markets).

We expect PRAJ to post >67% earnings growth on a CAGR basis over FY07-09E. We expect exports to increase further, as the company recognizes its US orders as revenues and garners increased business from other export markets, mainly European.

On the long term demand for fuel ethanol (production expected to cross 24 billion gallons by 2010 against 15.5 billion gallons currently), we remain bullish. We expect PRAJ to tap growth opportunities, going forward as it intends to gain a share in key markets including the US, Europe and Brazil, where it plans to enter soon. We believe PRAJ's European and Brazilian forays will be the catalyst to propel the company, going forward. Our argument is based on the premise that these nations (mainly the US, Europe and Brazil), account for >80% of the current global ethanol production.

PRAJ recently inked a JV in Europe with Aker Kvaerner called BioCnergy Europe B.V. PRAJ owns 60% in the JV and Aker Kvaerner the balance 40%. We believe this JV is strategically advantageous for PRAJ, as this would help it tap the European bio-ethanol market as well.

Outlook & Valuation

We retain our conviction levels on PRAJ's business growth, especially its strategy of focusing on inorganic and organic expansion initiatives. We believe this would help the company answer its growing business needs. We also believe, PRAJ's nature of business provides an early mover advantage, in terms of entering newer territories and improving the confidence of the clients in its ability to execute projects. On a PE multiple of 27X & 20X its FY08E & FY09E earnings, we see PRAJ to be an OUTPERFORMER.

 

 

 The scrip had touched a high of Rs 2360 and a low of 2078 so far during the day.

The stock had hit a 52-week high of Rs 2375 on 21 June 2007 and a 52-week low of Rs 328.50 on 24 July 2007.

On BSE, 5.76 lakh shares were traded.The stock had an average daily volumes of 88,343 shares on BSE in the past one quarter.

The Educomp Solutions scrip had soared 38.15% to Rs 2,149.05 on 21 June 2007, from Rs 1,555.55 a month ago . It surged 117.74% over the three months.

During trading hours today, 22 June 2007, the company said it completed the issue of zero coupon convertible bond issue amounting to $80 million.

The bonds would be listed on Singapore Exchange, with an initial conversion price of Rs 2949.83 per share. This is a 27.7% premium over the current ruling market price. The zero coupon bonds would be redeemed on 26 July 2012.

Educomp Solutions' net profit surged 96.85% to Rs 13.13 crore in Q4 March 2007 as against Rs 6.67 crore in Q4 March 2006. Revenue flared up 96.49% to Rs 49.85 crore in Q4 March 2007 (Rs 25.37 crore).

Net profit soared 103.45% to Rs 28.28 crore in the year ended March 2007 as against Rs 13.90 crore in FY 2006. Revenue rose 103.65% to Rs 106.51 crore (Rs 52.30 crore).

Educomp Solutions is a technology-driven, e-learning solutions provider specialising in creation, management and delivery of learning content. The company has 27 offices in India, a wholly owned subsidiary in the US, and employs over 1,000 personnel

Educomp Solutions has annual contracts with Intel and Microsoft to train a specific number of teachers each year. This segment has a healthy margin of 60%.

 

The market remained choppy as investors continued to book profits on every rise. Stocks had rebounded yesterday, helped by good volumes and strong Asian markets. However, the inflation rate, which hit a record low at 4.28%, could not rescue the sliding index and the Sensex touched the day's low of 14442. Except consumer durable and pharma stocks most of the stocks witnessed selling pressure. The lack of buying interest kept the market subdued and the Sensex closed the session by shedding 32 points at 14467. The Nifty closed the session down 15 points at 4252.

The market breadth was neutral. Of the 2,640 stocks that traded on the BSE, 1,282 stocks declined, 1,272 stocks advanced and 86 stocks ended unchanged. Most of the sectoral indices closed with a little change. The BSE Oil & Gas index dropped 0.97% at 7594 followed by the BSE Metal index (down 0.69% at 10745) and the BSE IT index (down 0.59% at 4858).

Among the Sensex stocks, Reliance Energy was the leading gainer and soared 5.32% at Rs590, Hindalco advanced 1.89% at Rs170, NTPC jumped 1.73% at Rs153, HDFC shot up by 1.65% at Rs1,870, Hero Honda moved up 1.28% at Rs670 and HLL gained 1.24% at Rs192, while Dr Reddy's Lab, SBI, Barti Airtel and ICICI Bank closed with marginal gains. Among the laggards BHEL tumbled 2.80% at Rs1,440, Gujarat Ambuja shed 2.64% at Rs116, Reliance Industries declined by 1.68% at Rs1,704 and Tata Steel lost 1.55% at Rs599.

Over 1.09 crore Reliance Natural Resources shares changed hands on the BSE followed by IKF Technologies (99.55 lakh shares), IDBI (80.08 lakh shares), TCS (49.30 lakh shares) and IFCI (47.90 lakh shares).

TCS registered a turnover of Rs562 crore on the BSE followed by Time Technologies (Rs163 crore), Reliance Industries (Rs147 crore), Educomp (Rs144 crore) and SBI (Rs135 crore).

 

It was a week of gains for the Markets after last weeks see saw ride. There was some trend of upside in the mid week helped by banking sector and also Infrastructure stocks which suddenly got fancy. The US markets were ranged though the worries of a weakish economy had the stocks in a bit of a yo yo. There is the talk about the CDO (collateralised Debt Obligations) where the worries still emanate. (Do read Economy: Taking stock ! for more here), There were a host of advance Tax indicated this week which created a ripple really. Advance taxes are paid in four instalments in a year. They are paid in June, September, December and March. The first instalment is is expected to be about 15% of the total advance tax to be paid in a year and hence there is not much to be drawn from this.

Markets started off weak because of the circular on treatment of capital gains by investors. The Tax authorities were given the discretion to decide on whether the tax payer was a speculator or Investor. An investor can divide his portfolio into capital assets and trading assets. Taxpayer can have both cap gains and biz income in share transactions. Post this, the Indian markets saw continued strength helped by banks in the face expected weaker inflation (base effect.. we have been saying for many weeks now). This number came in at around 4.28 % for week ended June 9th and fairly marks the stable level. There was strength in Cement. The big story was of course infrastructure this week. This is one sector which really does not get affected because of interest rates. Its the Government spending which will spur this on. BHEL rallied on PM exhorting it to work an extra shift and then Larsen which continues to announce orders and of course Mid caps as mentioned in our earlier notes. The end of the large Public issue uncertainty had the markets back on to rails to challenge the all time high. However we believe it will be a daunting task. Tech sector and textiles continue to reel under the Rupee onslaught. The autos is where the weakness is apparent and really its unlikely that relief will be quick to come unless the RBI signals lowering of interest rates. Crude hit almost $ 70 and thats really what will keep the RBI from cutting rates at least for now. Of course they will wait for more signals of slower growth.

Markets this week saw the Sensex up 2% (290 points); Nifty up 1.8% (76 points up); Mid caps up 3% ; Small caps up 2.2%; IT Index down 3%; Capital Goods up 4.8% up; Banking index up 4.8%.

Sugar stocks had a bad Friday. The only hopes.. the WTO talks have failed and that means that US and Europe will continue with farm subsidies. The markets of India Brazil will remain closed for access to goods and services for these developed economies. Bad news for sugar because EU was expected to turn net importer against being a net exporter. The long term story gets impacted negatively.. Sugar output in India, the world's second-largest sugar producer and biggest consumer, is expected to touch 280 lakh tonnes this season ending September while domestic consumption is likely to be 190 lakh tonnes. After including last year's carryover stock of 40 lakh tonnes, the country would have a total stock of 130 lakh tonnes this year. The Government intends to stock up another 3 mn tonnes in sugar buffer. The WTO Talks failure has made even the long term story bitter suddenly. Sugar stocks were badly down.

We had a note on Action construction: Action Construction is one company where the Management is gungho about growth. This is a company into Mobile cranes, Tower cranes. It has recently entered the Backhoe loaders which is earth moving equipment. The company has been growing aggressively and has an orderbook of about 400 machines. The macro business environment seems extremely exciting and the company has expanded as well. However its valuations where we have concerns. Also the competitive advantage against competition such as JCB, Escorts, BEML seems to be price. Thats what put us off. Valuations are not compelling.

We had a research note on Everest kanto cylinders. This company intends to triple capacity for high pressure cylinders which are used in Industry and more importantly with focus on pollution for LNG in the Commercial Vehicles. Started by a cylinder trader, its come a long way in 10 years. The claim to fame and its reason for success seems to be its relationship with Tenaris which gives it the value added seamless steel pipes for the manufacture of these cylinders. We remain surprised at the high ROEs the company manages, in a business which could be considered not so value add. What impressed us was the scope of the businesses. LNG is expected to be less expensive than normal fuels and more than that, less polluting. Iran and Pakistan are big markets for such cylinders as they all shift into retrofit LNG kits for their autos. The demand is expected to be robust and specially in China. This is where it is expanding. We are not as negative as before given there is more clarity on Demand. However, we realize that its Tenaris relationship which is the competitive advantage that this company enjoys. Should be good to have a look at Tenaris but we are not fond of Everest Kanto anymore. The large project implementation risk remains. Do read the report for more.

 

 

 Defaults due to rising rates resulted in the move.

For the first time since the housing loan boom, the country's top three home loan providers, State Bank of India (SBI), ICICI Bank and HDFC, are approaching the Asset Reconstruction Company Ltd (Arcil) to sell bad loans from their home loan portfolios.

The move has been prompted by a sharp rise in defaults from retail customers, squeezed by rising interest rates, in the last two quarters.

Arcil is a company that buys bad loans at a discount and sells the assets for a profit. All three institutions are selling home loan portfolios worth Rs 250-300 crore each, sources close to the developments said.

While Arcil will take these loans on its own balance sheet, a subsidiary will be set up to service the loans — in terms of valuing property, collecting cheques and so on.

The retail loans, scattered across the country, will be taken over by Arcil for Rs 100 crore to Rs 150 crore each. "We are in negotiations. These deals are expected to close by the second quarter," the sources added.

Interest rates on home loans have risen from 8-8.5 per cent to 10-12 per cent in a year's time, a result of the Reserve Bank raising the cost and reducing the availability of money to achieve monetary policy objectives. As a result, borrowers have seen their equated monthly instalments rise significantly.

"In many places, builders have failed to give possession of the apartment and the customer was unable to pay EMIs as well as rent for his present accommodation. The double blow for retail customers has increased the incidence of bad loans," sources in ARCIL said.

Several banks have reported a 3.5 to 4 per cent default in home loan repayments, against less than 2 per cent a year ago. State Bank of India Chairman O P Bhatt recently commented that rising interest rates would result in higher defaults for India's largest commercial bank.

ICICI Bank, HDFC and SBI have grown their portfolio at an average annual rate of 28 per cent in the past three years. Though HDFC says it has not seen a deceleration, SBI has seen growth slow to 18-19 per cent in its home loan portfolio.

Once the loans are in Arcil's portfolio, the Mumbai-based firm will either offer a package to existing customers to pay off the loans or sell their property to the highest bidders.

 

Network 18 Fincap : Sharekhan stock idea dated 20th june 2007

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Network 18 Fincap
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs651
Current market price: Rs476

Striking the right(s) note

Key points

News businesses to flourish: Network 18 Fincap (Network 18) controls the front-line business channels CNBC-TV18 and Awaaz, and the fast growing general news channels CNN-IBN and IBN 7. With the digitalisation of cable and advent of DTH platform, the subscription revenues would substantially boost the profitability of the group. Also, Awaaz, CNN-IBN and IBN 7 have shown good viewership gains and should drive the growth as they mature over the coming years.

Web properties to add tremendous value: Network 18 through its associate companies Television Eighteen India (TV18) and Global Broadcast News (GBN; together the two hold 100% in Web18) owns several web properties like moneycontrol.com, poweryourtrade.com and yatra.com among others, covering the news, e-transaction, travel, recruitment, shopping and e-ticketing genres. It has added many new web properties over the last year and started spending heavily on enhancing these sites and popularising them.

Taking big steps in entertainment: Through GBN it has entered into an alliance with Viacom Inc to launch a Hindi general entertainment channel. The alliance also gives it part ownership of MTV India, VH1 and Nickelodeon. The group's movie business would derive synergies from Viacom Inc's world-famous studios.

Group builds war chest for growth: Sensing the opportunities provided by the booming Indian media & entertainment industry and allied sectors, the TV18 group is building a war chest for exponential growth. While TV18 has raised Rs200 crore through a QIP, Network 18 proposes to raise a similar amount through a rights issue of partly convertible preferential shares. GBN aims to raise $200 million through an overseas offering while its board members have approved a plan to raise a debt of Rs1,500 crore. We believe with all these funds the TV18 group aims to become one of the big wigs of the Indian media and entertainment business.

Rights issue adds Rs133.6 per share to value: The company proposes to raise Rs200 crore via a rights issue of 5% partly convertible cumulative preference shares (PCCPS). It will offer one PCCPS for every five equity shares held. Our calculations suggest that the rights add Rs133.6 to the value of each existing equity share and make the Network 18 stock even more attractive.

Valuations suggest a 37% upside: Our valuation of the Network 18 scrip based on its holdings gives us a value of Rs517.8 per share before the rights issue. The rights issue adds Rs133.6 to the price of the existing float, giving us a fair value of Rs651 for the scrip and indicating a good 37% upside from the current market price of Rs475.5. We initiate a Buy recommendation on the stock with price target of Rs651.

 

ICICI Bank Ltd's market capitalization is set to cross the Rs1 trillion mark following its current equity offering, but that number still doesn't make it a big bank by global standards.
The largest private sector lender in India is in the market with a public issue that will take its total number of shares to 1,111.22 million. At Wednesday's closing price of Rs947.85, ICICI Bank's market capitalization on its expanded equity base will be about Rs1.05 trillion.

This is much higher than State Bank of India's (SBI) Rs75,000 crore market cap.
Globally, Citigroup has a market capitalization that is more than 10 times ICICI Bank's at $268.3 billion (Rs11 trillion). Bank of America's market capitalization is $224.33 billion. And Industrial & Commercial Bank of China, Asia's largest bank, has a market capitalization of $218.23 billion.

ICICI Bank's public issue was subscribed 3.15 times on the second day, with investors bidding for 311 million shares against the total issue size of 98.8 million shares.
The qualified institutional buyers—foreign investors, banks and mutual funds —subscribed their portion 6.2 times.

However, retail investors are still staying away from the issue, despite sops given by the bank in terms of a Rs50 discount to the final price and a staggered payment for the shares.
The retail portion was subscribed 0.03 times on the second day.

Shares of ICICI Bank rose by 0.37% on the Bombay Stock Exchange (BSE), while the exchange's benchmark index, Sensex, rose 0.81% to close at 14,411.95.

Bank stocks continued to rally on the exchange and the Bankex, the banking index of BSE, rose 1.42% to close at 7,790.27. Shares of SBI rose by 3.85% to close at Rs1,425.20.

The third Indian bank in terms of market capitalization, HDFC Bank Ltd, is less than half SBI's size by market capitalization.

Following the public issue, ICICI Bank will become the eighth member of the trillion- rupee market cap firms on Indian bourses.

Reliance Industries Ltd now heads the list, followed by Oil and Natural Gas Corp., Bharti Airtel Ltd, NTPC Ltd, Tata Consultancy Services Ltd and Infosys Technologies Ltd.
Reliance Communication Ltd too has a market capitalization of more than Rs1 trillion, just behind ICICI Bank. The list of the top 10 Indian firms in terms of market capitalization also includes DLF Ltd, which will list on the exchanges soon, and Wipro Ltd.

Delhi-based realtor DLF, which recently concluded its public issue, will have a market cap of Rs0.9 trillion assuming that its stock lists at the issue price of Rs525.

 

Sharekhan's investor eye dated june 19 2007

Cadila Healthcare
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs425
Current market price: Rs369

Plans to raise $100 million for financing acquisitions

Key points

• The board of directors of Cadila Healthcare has decided to issue foreign currency convertible bonds (FCCBs)/American depository receipts (ADRs)/global depository receipts (GDRs) or such other foreign currency instrument of up to USD100 million.
• The funds are being raised to finance the company's forthcoming inorganic activities. Cadilla Healthcare is looking to make an acquisition in Brazil to make a foray into the high-margin branded formulation market and to participate in Brazil's growth story. Further, it is also looking to exploit the opportunities in the generic markets of Spain and Italy through the acquisition of some small to mid-sized companies.
• Cadila Healthcare has a vision of becoming a $1-billion company by December 2010 (ie FY2011). Of the billion, $800 million will come through organic growth whereas the balance $200 million will come from inorganic initiatives. Hence, in line with its strategy to hit the $1-billion revenue mark, the company is moving ahead with its acquisition plan.
• At the current market price of Rs369, Cadila Healthcare is trading at 13.8x its estimated FY2009E earnings. We maintain our Buy recommendation on the stock with a price target of Rs425.

---

VIEWPOINT

Greenply Industries

PAT up 60% in FY2007
Greenply Industries is an integrated interior infrastructure company with leadership in the branded plywood and laminate industry in India. The company has a market share of 25% in the plywood segment and a 15% share in the laminate segment. It is a one-stop manufacturer of all products related to interior infrastructure, from plywood and boards, decorative veneers to laminates and particleboard.

The company has a pan-India network with 24 marketing offices and 7,100 authorised dealers/distributors. It is developing the Greenlam brand internationally and has recently formed an exclusive marketing and distribution alliance with Dekodur, a high-end German metal laminate brand, to cater to premium consumers. Its clients include Godrej, Blowplast and Featherlite.

ABG Shipyard

Sitting on strong order book
We attended the conference call of ABG Shipyard to discuss the company's Q4FY2007 and FY2007 results. We present the key takeaways from the call.

Auto Stocks losing favour

The latest signs of weakness in automobile stocks have not gone down well with fund managers, a section of whom is willing to stay away from the auto sector, at least for the time being.

However, some managers are hoping that a further weakening in valuations will give investors a chance to invest in good stocks at more reasonable levels.

Auto stocks have lately been on the backfoot, especially after the last quarterly results, which, according to investment circles, have not quite been in line with expectations for a number of companies. In fact, not all players have managed to return to the market's radar after the last crash in May 2006, they added.

The sector was perceptibly depressed last year, it is pointed out, a trend evident from the performance of the BSE's auto index for that period. The auto index, which was at 4,576.52 on June 19, 2006 has crawled to only 4,633.97 on June 18, 2007. On the other hand, the BSE Sensex posted a sharp return of 43 per cent during this period.

The current situation, sources said, is quite different from what was witnessed in 2005, when auto stocks added considerably to investors' wealth.

Pare exposures

The top-performing funds of the day now have only a low-to-medium exposure to auto.

Most have scaled down exposure in recent times.

These include ICICI Prudential Services (73 per cent returns for the one-year period ended June 18), Standard Chartered Premier Equity (70 per cent) and DBS Cholamandalam Opportunities (67 per cent). Auto accounted for only 4.55 per cent, 1.74 per cent and 6.04 per cent of their net assets respectively as on May 31, 2007.

The way forward, according to some quarters, may well lie in well-chosen mid-cap stocks, as opposed to strictly large-cap names such as Maruti, Bajaj Auto and Tata Motors, which are key components of the Nifty. "A host of mid-cap names are available in the auto/auto component segment," said a fund industry source.

"Clearly, not all are worth investing in. However, fund managers may consider building diversified portfolios with a bias towards mid-caps." He also said investors must see whether they can enter good stocks when prices soften further. According to him, the following should drive further allocations: global outsourcing opportunities for auto ancillary companies, demand witnessed in specific sub-sectors such as tractors and two-wheelers and recent reduction in Customs duties on polymers.

How auto funds stack up

There seems to be a major difference in the performance of the two auto sector funds, one managed by UTI and the other by JM.

While the JM fund has provided 27.76 per cent for the one-year period ended June 18, the UTI product has in comparison given a disappointing 1.16 per cent, according to data released by Value Research.

These render the one-year average at 14.46 per cent. Both, incidentally, were launched in 2004.

The funds in question seem to follow different styles. JM has, in recent times, relied heavily on such mid-cap names as Ramkrishna Forgings, Amtek and Ashok Leyland. UTI, on the other hand, has invested heavily in M&M, Tata Motors, Maruti and Bajaj Auto. Auto sector funds (in terms of one-year returns) are positioned well below other sectoral products such as bank (70 per cent), IT (69 per cent), pharma (35 per cent) and FMCG (15 per cent).

Portals are taking over from real estate agents

A real estate 'consultant' with more than two decades of experience, K. Premsundar is a worried man. His business, a letting agency for low-end properties, has seen a big drop in the last two years. He says his clients have left him, choosing to place advertisements directly on the many real estate Internet portals and in neighbourhood dailies. Such advertising costs a fraction of the fee that agents charge.

Indiaproperties.com, an online real estate portal, allows owners to post their properties for Rs500 per listing, whereas if the deal is done through a broker, it would mean a month's rent as commission, from either the owner or the tenant. Others sites such as magicbricks.com and Sulekha.com also offer similar services. The portals allow for direct interaction between the property's owner or seller and a prospective tenant or buyer.

"Online portals have impacted agents' business especially in the lower range. Their traditional clients have moved away,"said J. Sohail Sarooshi, vice-president of the Chennai Real Estate Agents Association. The association, which has 60 members, was formed as an attempt to bring standardized and fair conduct norms into the industry, which is largely unregulated. For a sale, agents get a 3-4% commission on the value of the sale, and for a rental deal, they get 15 -30 days' rent as commission.

"Real estate agents have so far thrived on information," said Naresh Malkani, chief executive officer of indiaproperties.com. "Now, the Internet provides the information."
However, he said unlike booking travel tickets online, the "Internet is not going to replace agents, as the transaction has to be done physically". Agents now need to focus on services such as valuation, documentation, registration and field visits, he said.

"We definitely have seen the advanced Internet user take advantage of the free online classifieds platform as an additional option. By interacting directly with other individuals, they have able to reduce lead time and costs", said Satya Prabhakar, chief executive officer of Sulekha.com, a portal that also lists properties. "It still may be a good idea to supplement this with the professional advice of local real estate agents".

According to an estimate by indiaproperties.com, in cities covered by online portals, 40% of the total market, in terms of property inventory, is listed on Internet sites. In the last six months alone, Malkani said, there has been a 120% increase in listings. And, property for a monthly rent of between Rs5,000 and Rs20,000, the traditional bread and butter for letting agents, constitutes one-third of total listings on his website.

On Sulekha.com, Prabhakar said 80% of rentals are at Rs20,000 per month or below. Both individuals and real estate agents access the site.
Over the next few years, this percentage will increase, as new and young property buyers of the last five years would be in the market to sell or rent. Traditionally, it takes about 7-8 years for change in ownership or usage.

Though the Internet is posing a challenge to agents, Sarooshi and Malkani agreed that both could co-exist. Agents, who pay an annual fee of Rs10,000 to enrol as members, can list 100 properties every year, and provide one-fourth of all listings on indiaproperties.com.

Local real estate agents, especially smaller ones, Prabhakar said, are using online classifieds as a "platform to reach out to individuals who are looking for rental solutions in the niche areas that they operate in. The lower entry barriers and flexible advertising options have helped those who have been quick to adopt this."

However, Premsundar, in his late fifties, has never used the computer nor browsed the Internet. He says he is too old to start now.

SEBI Ostracises 15 brokers for deals " not done "

India's stock market regulator on Tuesday said it had found synchronised deals by brokers in the derivatives segment on the National Stock Exchange's which were false and misleading.

Following the revelation of some "non-genuine" transactions, the regulator has asked 15 brokers and 10 other entities not to indulge in distortion of the derivatives market.

"The entities/brokers have indulged in non-genuine transactions to create false and misleading appearance of trading," SEBI said in an order.

Indiabulls Securities Ltd., Khandwala Int. Fin. Ser. Pvt. Ltd. and Angel Capital & Debt Market Ltd. were among the fifteen brokers named in the order. SEBI said it had analysed transactions for the period between January to March 2007.

Sensex is very near to 14300

The market, which opened firm today, kept on advancing as time progressed. The rally gathered steam in mid-afternoon trading.

The BSE 30-share Sensex closed with a 215.36 point spurt or 1.53% gain at 14,295.50. It opened slightly higher at 14,088.58 and started declining till it touched a low of 14,058.79 at 10:49 IST. The benchmark index bounced back from that level as buying resumed, to strike a high of 14,315.18 at 15:24 IST.

The S&P CNX Nifty advanced 67.20 points or 1.62% at 4,214.30. The Nifty June 2007 futures were at 4,212.50, a marginal discount of 1.80 points compared to the spot closing.

Strong response to the follow-on public offer (FPO) of ICICI Bank, boosted the sentiment. Short covering extended the rally further towards the fag end of the day. Some market players had gone short on the market expecting a fall in share prices due to shift of funds by investors from secondary market to primary market to subscribe for the large sized Rs 8750 crore FPO of ICICI Bank. These short sellers rushed to cover their positions.

The sentiment was also boosted by reports that advance tax paid by companies and individuals were up 28.6% for the April-June 2007 period, from a year earlier, which in turn raised hopes of robust corporate earnings in the period.

Strong buying momentum was seen in select index pivotals including Reliance Industries (RIL), State Bank of India (SBI) and Oil & natural Gas Corporation (ONGC). However, IT stocks underperformed today, 19 June 2007, as the rupee strengthened against dollar.

The FPO of ICICI Bank was fully subscribed by the first one hour of the opening of the issue today, 19 June 2007. The subcription to the FPO gathered further steam later. It was subscribed 2.70 times by 16:00 IST.

Today's rally in the market was in contrast to the trend witnessed over the past two days when despite opening stronger the Sensex had settled with losses on sell-off, despite strong global markets. Market men said the latest circular issued by the Central Board of Direct Taxes (CBDT) on Friday, 15 June 2007, failed to provide the much-needed clarity with regard to tax on profit/gain arising from sale of shares. CBDT issued the circular after trading hours on Friday, 15 June 2007.

The total turnover on BSE amounted to Rs 4326 crore while the NSE F&O turnover amounted to Rs 37415.18 crore.

The market breadth was positive on BSE with 1,397 shares advancing and 1,180 declining. 82 remained unchanged.

The BSE Mid-Cap Index rose 71 points or 1.2% to 6,244.04 while the BSE Small-Cap Index gained 41 points or 0.6% to 7,357.75.

Among the Sensex pack, 23 advanced while the rest declined

State-run banking major State Bank of India (SBI) surged 3.78% to Rs 1368.30, on 5.56 lakh shares. It was the top gainer from the Sensex pack. SBI is set to raise $225 million from the overseas market this year by issuing perpetual bonds. The overseas issue opened on Monday, 18 June 2007, and the bank is expected to price the bonds this week. The bank plans to raise a total of Rs 15,000 crore this year in the form of equity (tier-I) and debt (tier-II).

ICICI Bank advanced 2.69% to Rs 942.50. Before trading hours on Monday, 18 June 2007, ICICI Bank set the price band for its follow-on public issue. The price band for the issue has been fixed at Rs 885 to Rs 950 per equity share.

Retail bidders would be allotted shares at a discount of Rs 50 per share to the issue price determined by the book-building process. The public issue opens for subscription today, 19 June 2007. The issue size is Rs 8,750 crore. In addition, there is a green-shoe option under which the bank may allocate additional equity shares up to Rs 1,312.5 crore. The issue including the green-shoe option aggregates Rs 10,062.5 crore.

Led by SBI and ICICI Bank, the BSE Bankex surged 2.71% at 7,681.51. Other shares from the banking pack, Bank of India (up 6.65% to Rs 204), Bank of Baroda (up 1.86% to Rs 265.10), Kotak Mahindra Bank (up 4.75% to Rs 589.95), Canara Bank (up 5.57% to Rs 252) and HDFC Bank (up 1% to Rs 1098.70) gained.

Engineering & construction major L&T gained 3.52% to Rs 1995. The company's joint venture won an order worth Rs 610 crore for a residential building project in Dubai. The project is to be completed in 660 days from the date of commencement.

Auto stocks extended early gains. The BSE Auto Index settled 1.4% higher at 4,697.47. Tata Motors (up 2.86% to Rs 663.80), Bajaj Auto (up 2.10% to Rs 2125), Maruti Udyog (up 1.10% to Rs 752) and Hero Honda Motors (up 2.05% to Rs 667.10) advanced after the minister for petroleum and natural gas Murli Deora said yesterday, 18 June 2007, that that the government has no plan to hike the price of petrol or petroleum products. Recently, a senior oil ministry official said the government was likely to review retail prices of petrol and diesel in mid-July 2007 to bring them in line with the recent rise in global oil prices.

Index heavyweight Reliance Industries (RIL) advanced 3.42% to Rs 1728.35, on 7.49 lakh shares. It rallied to a high of Rs 1731.90, in late trade. As per reports, global oil giants including Shell, Exxon and Chevron are eying a stake in Reliance Industries' overseas oil & gas assets. RIL recently hived off these assets into a separate company, Reliance Exploration and Production DMCC.

State run oil exploration major Oil & Natural Gas Corporation (ONGC) advanced 2.53% to Rs 912. It plans to set up a 7.5 million tonne refinery as part of the proposed special economic zone at Kakinada, Andhra Pradesh state. The company unveils its Q4 March 2007 and FY 2007 results on 25 June 2007.

Led by RIL and ONGC, the BSE Oil & Gas Index surged 2.9% to 7,645.59, and was the top performer among the sectoral indices on BSE.

IT pivotals were off-loaded today, 19 June 2007, as the Indian rupee climbed to a one-week high, with sentiment bolstered by a strong outlook for foreign investment flows, but suspected central bank intervention capped the rupee's gains. The BSE IT index slumped 1.61% to 4,861.28, and was the top loser among the sectoral indices on BSE.

Infosys lost 1.55% to Rs 1958.10 on 3.31 lakh shares. It was the top loser from Sensex pack.

Satyam Computers (down 1.50% to Rs 469.90), TCS (down 0.54% to Rs 1158.30) and Wipro (down 0.53% to Rs 520) were the other losers.

In early trade, the rupee was at 40.715/725 per dollar moving up from Monday (18 June 2007)'s close of 40.7725/7825. It hit a nine-year high of 40.28 in late May 2007, but has since been broadly trading in a 41-40.50 band.

Metal stocks caught up with the overall momentum. The BSE Metal Index rose 1.8% to 10,611.59. Tata Steel (up 3.40% to Rs 609), JSW Steel (up 3.72% to Rs 595.50) and Sail (up 2.93% to Rs 136.90), were the notable gainers.

Hindalco Industries lost 0.12% to Rs 161.90, after slipping to a low of Rs 159.15. It reduced aluminium prices for a fifth time this year to match global rates. Prices were cut by Rs 3,000 ($73), or 2.4%, to Rs 1,20,500 a metric tonne.

Decolight Ceramics settled at Rs 44.50 on BSE, a discount of 17.5% over IPO price of Rs 54. The scrip debuted at Rs 57, and had touched a high of Rs 65.90 in early trades and thereafter touched a low of Rs 43.50. The counter saw high volumes of 1.58 crore shares on BSE today.

HTMT Global Solutions (HGSL) settled at Rs 583, compared with a base price of Rs 800 on its debut today, 19 June 2007. The scrip resumed trading on BSE at Rs 790 (also its day's high). It touched low of Rs 495 during the day. On BSE, 29.18 lakh shares were traded on the counter. As the stock is also included in the futures & options (F&0)segment on NSE, there is no daily price band for the scrip. The lot size of the stock in NSE's F&O market is 250. HGSL's debut on the bourses today follows a restructuring scheme of Hinduja TMT (HTMT).

Petron Engineering Construction surged 20% to Rs 227.15 after the company's promoters agreed to sell their controlling stake in the company to Kazakhstan-based KazStroy Oil and Gas Construction Company. A newspaper report today estimated a sale price of Rs 150 crore for the entire promoter holding of 63.45% in Petron. KazStroy builds cross-country pipelines, offshore terminals, power plants, chemical plants and other process plants.

Sterlite Industries India rose 2.87% to Rs 560 on getting approval for listing of its initial public offering of 130.44 million equity shares in the form of American Depositary Shares (ADS) at $13.44 each. These equity shares (in the form of ADS) represent an approximately 18.9% interest in the company post offering. The company's ADS have been approved for listing on the New York Stock Exchange under the symbol SLT. After this offering, the company will have approximately 689 million equity shares outstanding. Each ADS represents the right to receive one underlying equity share in the company.

Jet Airways (India) rose 1.05% to Rs 793 after the company said its board will consider rights issue of equity shares to raise up to $400 million. The company's current equity is Rs 86.33 crore, with 8.63 crore outstanding shares of face value of Rs 10 each.

TRF rose 1.98% to Rs 710, after touching a high of Rs 727.70. It bagged $16.5-million order from Shadeed Iron & Steel Oman for supplying material-handling system for a new steel plant in Oman.

Dynamatic Technologies galloped 6% to Rs 1300 on acquiring the hydraulic business division of UK-based Sauer Danfoss for total consideration of $10 million. The buyout has been effected through the company's wholly owned subsidiary, Dynamatic UK. The acquired unit generates business worth $25 million annually, and is profitable.

ABG Shipyard fell 3.6% to Rs 400 after its net profit rose by a marginal 6.69% to Rs 32.99 crore in Q4 March 2007 (Rs 30.92 crore). Sales rose 0.15% to Rs 193.07 crore in Q4 March 2007 (Rs 192.78 crore). Meanwhile, as per media reports, the shipping firm plans to enter oil-rig construction with an investment of Rs 600 crore to tap replacement opportunities in the offshore energy sector.

Japanese shares were trading slightly lower today on overnight cues from Wall Street, with banking shares such as Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group slipping, but exporters such as Canon Inc. and Sony Corp. gained as the yen continued to weaken against the US dollar. Japan's Nikkei was up 0.08% to 18,163.61.

Other Asian markets were steady. South Korea's Seoul Composite was up 0.05% to 1,807.85 whereas Singapore's Straits Times index was up 0.04% to 3,625.28.

Hang Seng (up 2.69% to 21,582.89) and Shanghai Composite (up 0.38% to 4,269.52) also edged higher.

European markets which had opened higher, pared gains.

Wall Street edged lower on Monday, 18 June 2007, after three consecutive days of solid gains as investors watched Treasury bond yields fluctuate amid lingering questions about inflation. The Dow Jones fell 26.50 points, or 0.19%, to 13,612.98. Broader stock indicators were also slightly lower. The Standard & Poor's 500 index fell 1.86 points, or 0.12%, to 1,531.05, and the Nasdaq Composite index slipped marginally by 0.11 point, or less than 0.01%, to 2,626.60.

Crude oil was little changed in New York after rising to a nine-month high on 18 June 2007, as attacks on pumping stations in Nigeria raised concern output from Africa's biggest oil producer may extend declines. Crude oil for July delivery was at $68.95 a barrel, down 14 cents, in after-hours electronic trading on the New York Mercantile Exchange in Singapore today, 18 June 2007.

Now the links are fixed

Many complaints recieved from our visitors that the links are not working. So the links are fixed now. Enjoy.

 

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Mukesh Ambani vs Anil Ambani ( Two years )

Mukesh Ambani vs Anil Ambani ( Two years  seperation)

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