Saturday, September 29, 2007
Stock Picks
Sobha Developers
CMP: Rs 914.50
Target Price: Rs 870
CMP: Rs 914.50
Target Price: Rs 870
Kotak Securities has downgraded its rating on Sobha Developers from 'outperform' to 'in-line', citing a cautious view on the real estate sector as a whole. "We believe current expectations of high volume growth and high price of real estate are unlikely to pan out. We expect residential property prices to see a 10% correction over the next few months," said Kotak Securities in a note to clients. "We rework our net asset value estimate for Sobha for a 10% reduction in selling price in the next 12 months. Our new fair price for the company, based on March 2009 NAV, is Rs 870 per share," the note added.
HLL
CMP: Rs 219.35
Target Price: NA
CMP: Rs 219.35
Target Price: NA
CLSA Securities has downgraded its rating on Hindustan Unilever to 'outperformer' from 'buy', citing ITC's impending entry into the personal care segment as one of the triggers. "HUL's market share trend is improving in certain categories, detergents in particular. While the input prices remain high, price hikes have helped HUL's margins," the CLSA note to clients said. "However, the going may get tough with the entry of ITC into personal care segment. While competition is nothing new for HUL, and ITC is not known to compete on price, ITC's financial muscle and ability to withstand losses for a longer period of time could potentially hurt HUL's bottomline," the note added.
Maruti Suzuki
CMP: Rs 999.55
Target Price: Rs 820
CMP: Rs 999.55
Target Price: Rs 820
Deutsche Equities has retained its 'sell' recommendation on Maruti Suzuki with a price target of Rs 820. The brokerage has cited four factors for its negative view -- stretched valuations, rising capex, intense competition, and less scope for further cost cutting. "Rapid strides in indigenisation in the past five years have helped the company improve margins in the past, but this trend is unlikely to continue further. Further, we expect Maruti Suzuki to trade market share for margins with rising competitive intensity," the Deutsche Equities note to clients said. "Overall, we estimate operating margins to fall by 100 basis points to 13.3% by FY10 (estimated)," the note added. The brokerage has lowered its forecast earning per share for the company for 2008-09 to Rs 58.55 from Rs 60.78 earlier.
Vaibhav Gems
CMP: Rs 204.45
Target Price: NA
CMP: Rs 204.45
Target Price: NA
SSKI Securities has assigned an 'outperformer' rating to Vaibhav Gems, citing upside from new ventures as one of the key triggers. "From being a key jewellery supplier to global retailers, Vaibhav now reaches the end customer directly via TV and direct retailing. The TV channel business has witnessed a quick ramp-up to three geographies within a span of two years," the SSKI note to clients said. "While a cloud of uncertainty still hangs over the wholesale business, we see immense value being created in the 'direct sales' business. Though profitability would remain muted in the near term with large one-off expenses related to start-up cost in new ventures, operating leverage would drive up profits (Rs 70.7 crore in FY09E) as businesses scale up," the note added.
Petronet LNG
CMP: Rs 80.50
Target Price: NA
CMP: Rs 80.50
Target Price: NA
MF Global Sify Securities has downgraded its rating on Petronet LNG to 'underperformer' from 'buy', citing stretched valuations. "We believe that the stock price is running ahead of its fair value," the MF Global note to clients said. The brokerage has forecast the company's EPS for 2007-08 and 2008-09 at Rs 5.9 and Rs 6.3, respectively. "Sourcing of LNG at competitive rates would be critical for the viability of Petronet LNG's expansion plan. The company is likely to face few hurdles as global LNG prices are moving upwards in tandem with the strength in crude oil prices. We expect the financial performance beyond H1FY08 to be tepid as the de-bottlenecked capacity would be utilised to the hilt, limiting any upside until new capacities go on stream," the note added.
Market may undergo correction
In the near term, profit taking cannot be ruled out given that the market has witnessed sharp and swift surge over the past few days.
Q2 September 2007 results is the next major trigger for the market. Figures of advance tax suggest that earnings will be decent to strong. Stock specific activity may take place in the near term on the bourses ahead of the earnings-reporting season, based on result expectations. IT bellwether Infosys Technologies kickstarts reporting season on 11 October 2007.
FII inflow remains robust and inflow may continue in the backdrop of ample global liquidity. A sharp correction, if any, will attract bargain hunters given that domestic liquidity, too, remains strong. Domestic private insurance firms have been channelising money raised through unit linked insurance plans (with a high weightage for equities).
The market will be keenly watching developments on the political front as the government wants the Indo-US nuclear deal to go through. While the operationaslisation of the Indo-US deal has been put on hold by the government pending the findings of a committee, it cannot be stalled forever. A flashpoint may come sooner or later. The four Communist parties have 60 members of parliament (MPs) in the 545-member lower house of parliament. Prime Minister Manmohan Singh's government could fall or be reduced to a minority if the Left withdraws support.
Yet, analysts reckon that political turmoil arising from nuke deal will not impact India's basic economic fundamentals though some infrastructure projects may get delayed. India's economy is expected to post strong growth for a long period of time mainly due to favourable demographics.
Alston Power, Dabur India, Saamya Biotech, Wipro, Kotak Mahindra, Reliance Communications, Circuit Systems, Maytas Infra, Ambuja Cements, Pantaloon
Brokers Recomendations
Buy Subex Azure, target Rs 583: Way2Wealth
Strong growth in Revenues and earnings: Subex Azure has been growingat a CAGR of 71% & 62% over FY2005-07 in terms of Revenue and PAT.We expect company to grow at a CAGR of 53% & 68% over FY2007-09 interms of Revenue & PAT. Valuation: Considering the company's niche product business model,strong order pipeline, marquee customer base and an expected toplineand bottomline CAGR growth of 53% and 68% over FY2007-09E wediscount the FY2009E EPS at a P/Ex of 15 which yields a target price of Rs 583, an upside of about 38% from the current price, in 12 months. Weinitiate coverage on stock with Buy recommendation.
Strong growth in Revenues and earnings: Subex Azure has been growingat a CAGR of 71% & 62% over FY2005-07 in terms of Revenue and PAT.We expect company to grow at a CAGR of 53% & 68% over FY2007-09 interms of Revenue & PAT. Valuation: Considering the company's niche product business model,strong order pipeline, marquee customer base and an expected toplineand bottomline CAGR growth of 53% and 68% over FY2007-09E wediscount the FY2009E EPS at a P/Ex of 15 which yields a target price of Rs 583, an upside of about 38% from the current price, in 12 months. Weinitiate coverage on stock with Buy recommendation.
Buy Pantaloon, target Rs 615: UBS Investment
UBS Investment is bullish on Pantaloon and has maintained buy rating on the stock with target price of Rs 615.
UBS Investment is bullish on Pantaloon and has maintained buy rating on the stock with target price of Rs 615.
Buy Action Constrction Equipment, tgt Rs 443: ULJK Group
ULJK Group is bullish on Action Construction Equipment and has maintained buy rating on the stock with target price of Rs 443.
ACE commands ~ 85% market share in their core offerings of mobile cranes, mobile tower cranes and fixed tower cranes. The new foray in Forklift trucks and loaders are also promising segments and offer good margins. As the company derives 50-60% of their business through repeat orders and robust investments in infrastructure sector the revenue of the company will show a sustained growth rate of ~ 44% annually for the next couple of years. The company has expanded its turnover at 87% CAGR and has outperformed its sector growth rate of 30% (2002-07). The emphasis of the Indian Government for rapid infrastructure development to achieve a GDP growth of 8.5% in real terms has underlined good prospects for the infrastructure & construction equipment sector. We believe that the company has potential to absorb the opportunities provided by the industry and will grow at 44% annually for the next couple of years. We estimate the earnings of the company to grow at 53.3% CAGR till FY 2009E registering EPS of 17.5 and 26.1 in FY 2008E and FY 2009E respectively.
ULJK Group is bullish on Action Construction Equipment and has maintained buy rating on the stock with target price of Rs 443.
ACE commands ~ 85% market share in their core offerings of mobile cranes, mobile tower cranes and fixed tower cranes. The new foray in Forklift trucks and loaders are also promising segments and offer good margins. As the company derives 50-60% of their business through repeat orders and robust investments in infrastructure sector the revenue of the company will show a sustained growth rate of ~ 44% annually for the next couple of years. The company has expanded its turnover at 87% CAGR and has outperformed its sector growth rate of 30% (2002-07). The emphasis of the Indian Government for rapid infrastructure development to achieve a GDP growth of 8.5% in real terms has underlined good prospects for the infrastructure & construction equipment sector. We believe that the company has potential to absorb the opportunities provided by the industry and will grow at 44% annually for the next couple of years. We estimate the earnings of the company to grow at 53.3% CAGR till FY 2009E registering EPS of 17.5 and 26.1 in FY 2008E and FY 2009E respectively.
Credit Suisse neutral on Tata Power
We value the company on a sum-of-the-parts valuation to arrive at a fair value of Rs 777. This is close to the current market price of the company and hence we initiate with a NEUTRAL rating.
We value the company on a sum-of-the-parts valuation to arrive at a fair value of Rs 777. This is close to the current market price of the company and hence we initiate with a NEUTRAL rating.
Buy Reliance Capital, target Rs 1850: Merrill Lynch
Valuing consumer on "free book" while comparing with other NBFCs. The valuations we have assigned to R-Cap for its consumer foray are based on a multiple of 1.5x FY10E "free" net worth (or 2.0x FY09E). In contrast, other players (NBFCs) are trading at 2-2.5x 'forecast' book – even if they are required to raise capital. Our target valuations for R-Cap represent a target multiple of 1.6x FY09E 'forecast' BV and 1.0x FY10E 'forecast' book. Hence, there is still some buffer in these valuations if the company continues to deliver on the growth momentum. The upper end of the valuation for R-Cap could extend to Rs2157 if we were to: a) capture the additional Rs73/share arising from the book value of its investments as detailed above; and b) assign a value of 1.8x "free" book or 1.2x forecast FY10E book which is more comparable to valuations commanded by many other NBFCs (though still at a 15-20% discount to them).
Valuing consumer on "free book" while comparing with other NBFCs. The valuations we have assigned to R-Cap for its consumer foray are based on a multiple of 1.5x FY10E "free" net worth (or 2.0x FY09E). In contrast, other players (NBFCs) are trading at 2-2.5x 'forecast' book – even if they are required to raise capital. Our target valuations for R-Cap represent a target multiple of 1.6x FY09E 'forecast' BV and 1.0x FY10E 'forecast' book. Hence, there is still some buffer in these valuations if the company continues to deliver on the growth momentum. The upper end of the valuation for R-Cap could extend to Rs2157 if we were to: a) capture the additional Rs73/share arising from the book value of its investments as detailed above; and b) assign a value of 1.8x "free" book or 1.2x forecast FY10E book which is more comparable to valuations commanded by many other NBFCs (though still at a 15-20% discount to them).
Hold Dena Bank: KJMC
Dena bank has posted decent financials during F.Y 06-07 with decent credit and deposit growth along with significant improvement in asset quality. FII limit in the stock is still 15% (below permissible limit of 20%). At CMP of Rs.65, stock is trading at P/E of 9.5x on FY07 EPS and P/Adj B.V of 2.2x on FY07 Adj BVPS. Dena Bank's stock has outperformed Bankex since past 3 months and registered a stock return of 94% (12m). Considering the growth momentum, improved financial performance and banking sector outlook, we believe that bank will continue generating decent returns for the shareholders riding on higher growth trajectory. We recommend "Hold" on the stock for long term investors and "accumulate" on any fall.
Dena bank has posted decent financials during F.Y 06-07 with decent credit and deposit growth along with significant improvement in asset quality. FII limit in the stock is still 15% (below permissible limit of 20%). At CMP of Rs.65, stock is trading at P/E of 9.5x on FY07 EPS and P/Adj B.V of 2.2x on FY07 Adj BVPS. Dena Bank's stock has outperformed Bankex since past 3 months and registered a stock return of 94% (12m). Considering the growth momentum, improved financial performance and banking sector outlook, we believe that bank will continue generating decent returns for the shareholders riding on higher growth trajectory. We recommend "Hold" on the stock for long term investors and "accumulate" on any fall.
HDFC Sec maintains buy on KEC International
Despite a strong movement in the stock price of 69%+ since our coverage on Dec'06, we continue to remain positive on KEC due to better visibility of order inflows, impressive earnings momentum, and aggressive business policy. Strong capex pipeline of PGCIL and buoyant T&D capex in key markets including Kazakhstan, Afghanistan and some African nations, has provided immense business opportunities for KEC, which we expect to continue.
KEC currently trades at a PE multiple of 17X & 13X its FY08E & FY09 earnings, respectively. We continue to maintain our BUY rating for KEC with a Price Objective of Rs 705 (+21%), at which the stock trades at 20X & 15X its FY08E & FY09E earnings. KEC is currently trading at 10-15% discount when compared to its close peers, Jyoti & Kalpataru.
Despite a strong movement in the stock price of 69%+ since our coverage on Dec'06, we continue to remain positive on KEC due to better visibility of order inflows, impressive earnings momentum, and aggressive business policy. Strong capex pipeline of PGCIL and buoyant T&D capex in key markets including Kazakhstan, Afghanistan and some African nations, has provided immense business opportunities for KEC, which we expect to continue.
KEC currently trades at a PE multiple of 17X & 13X its FY08E & FY09 earnings, respectively. We continue to maintain our BUY rating for KEC with a Price Objective of Rs 705 (+21%), at which the stock trades at 20X & 15X its FY08E & FY09E earnings. KEC is currently trading at 10-15% discount when compared to its close peers, Jyoti & Kalpataru.
Buy Kirloskar Electric, target Rs 361: India Infoline
Demand arising out of investments planned by government and corporates over the next five years, should reap benefits for the company. Improving realizations leading to margin expansion should help bottom line witness 53.3% CAGR over FY07-09E. At the current price the stock trades at 14.6x and 10.9x FY08E and FY09E EPS of Rs18 and Rs24.1 respectively. We recommend BUY with a one-year price target of Rs361, an upside of 38%.
Demand arising out of investments planned by government and corporates over the next five years, should reap benefits for the company. Improving realizations leading to margin expansion should help bottom line witness 53.3% CAGR over FY07-09E. At the current price the stock trades at 14.6x and 10.9x FY08E and FY09E EPS of Rs18 and Rs24.1 respectively. We recommend BUY with a one-year price target of Rs361, an upside of 38%.
Buy Indo Tech; target of Rs 730: P-Sec
Indo Tech transformer is currently trading at a discount to its peers (11.4x FY09P earnings). With the company expected to witness robust growth, the discount will narrow down going forward. Transmission companies are trading at a premium to transformer companies, we expect transformer companies to command higher P/E multiple going ahead.
With more than 115,000 MVA capacity to be added annually in transformer, we believe Indo Tech is well placed to take advantage of the opportunity. At Rs 524 the stock is trading at 15.5x FY08P and 11.4x FY09P. We recommend Buy with a one-year price target of Rs 730 (x 16 FY09P). An upside of 39% from current levels.
Indo Tech transformer is currently trading at a discount to its peers (11.4x FY09P earnings). With the company expected to witness robust growth, the discount will narrow down going forward. Transmission companies are trading at a premium to transformer companies, we expect transformer companies to command higher P/E multiple going ahead.
With more than 115,000 MVA capacity to be added annually in transformer, we believe Indo Tech is well placed to take advantage of the opportunity. At Rs 524 the stock is trading at 15.5x FY08P and 11.4x FY09P. We recommend Buy with a one-year price target of Rs 730 (x 16 FY09P). An upside of 39% from current levels.
Buy Hindustan Unilever, target Rs 280: Sharekhan
This is not the first time in the year that HUL has increased its prices. The price increase vindicates our view that the company is regaining its pricing power which coupled with the strong volume growth should help it report a good growth in its earnings. At the current market price of Rs218, the stock is quoting at 25.6x its CY2007E EPS of Rs 8.5 and 22.8x its CY2008E EPS of Rs9.6. We maintain our Buy recommendation on the stock with a price target of Rs 280.
This is not the first time in the year that HUL has increased its prices. The price increase vindicates our view that the company is regaining its pricing power which coupled with the strong volume growth should help it report a good growth in its earnings. At the current market price of Rs218, the stock is quoting at 25.6x its CY2007E EPS of Rs 8.5 and 22.8x its CY2008E EPS of Rs9.6. We maintain our Buy recommendation on the stock with a price target of Rs 280.
Buy Bank of India, target Rs 325: Sharekhan
At the current market price of Rs260, the stock is quoting at 7.8x its FY2009E earnings per share, 3.8x pre-provisioning profit and 1.5x FY2009E book value. Considering the strong interest of investors in the domestic financial sector, PSBs remain very attractive mainly due to their low valuations and high RoE. We continue to like BOI for the above-mentioned reasons, and the fact that it is the only top performing mid sized PSB bank where foreign institutional investment (FII) headroom is still available (BoI's current FII holding is around 17%, whereas the RBI ceiling for FII holding is 20%). We maintain our Buy recommendation on the stock with a revised price target of Rs325.
At the current market price of Rs260, the stock is quoting at 7.8x its FY2009E earnings per share, 3.8x pre-provisioning profit and 1.5x FY2009E book value. Considering the strong interest of investors in the domestic financial sector, PSBs remain very attractive mainly due to their low valuations and high RoE. We continue to like BOI for the above-mentioned reasons, and the fact that it is the only top performing mid sized PSB bank where foreign institutional investment (FII) headroom is still available (BoI's current FII holding is around 17%, whereas the RBI ceiling for FII holding is 20%). We maintain our Buy recommendation on the stock with a revised price target of Rs325.
Buy BL Kashyap, target Rs 2850: Sharekhan
BLK's stand-alone earnings are estimated to grow at a CAGR of over 48% over the three-year period FY2007-10. Given its business model (no exposure to capital intensive infrastructure projects, hence strong cash inflows), there is limited risk of equity dilution and the growth in its earnings would get fully reflected in its earnings per share. At the current market price the stock trades at attractive valuations of 12.8x FY2009 and 9.3x FY2010 estimated earnings (after adjusting for the value of its subsidiary Rs554 per share). We recommend a Buy call on BLK with a price target of Rs2,850 (15x FY2010 estimated earnings discounted backwards by one year plus the value of its real estate subsidiary).
BLK's stand-alone earnings are estimated to grow at a CAGR of over 48% over the three-year period FY2007-10. Given its business model (no exposure to capital intensive infrastructure projects, hence strong cash inflows), there is limited risk of equity dilution and the growth in its earnings would get fully reflected in its earnings per share. At the current market price the stock trades at attractive valuations of 12.8x FY2009 and 9.3x FY2010 estimated earnings (after adjusting for the value of its subsidiary Rs554 per share). We recommend a Buy call on BLK with a price target of Rs2,850 (15x FY2010 estimated earnings discounted backwards by one year plus the value of its real estate subsidiary).
Buy Lloyd Electric & Engg, target Rs 238: Angel Broking
At the CMP of Rs184, the stock trades at 10.9x and 7.7x FY2008E and FY2009E EPS of Rs16.9 and Rs23.8. The stock is available at 1.1x FY2009E P/BV. We expect RoEs of the company to be at 18% in FY2008 and 16.3% in FY2009, the latter appearing depressed on account of the cash infusion by the promoters in lieu of the conversion of warrants into equity. We initiate coverage on the stock with a Buy recommendation and 12-month Target Price of Rs238, at which the stock would trade at 10x FY2009E earnings. Based on our DCF valuation, wherein we have discounted the future cash flows by 13.2% (WACC), assumed Cost of Equity at 14.8% and assigned a terminal multiple of 4x FY2012 FCF, we have arrived at a value of Rs243 per share.
At the CMP of Rs184, the stock trades at 10.9x and 7.7x FY2008E and FY2009E EPS of Rs16.9 and Rs23.8. The stock is available at 1.1x FY2009E P/BV. We expect RoEs of the company to be at 18% in FY2008 and 16.3% in FY2009, the latter appearing depressed on account of the cash infusion by the promoters in lieu of the conversion of warrants into equity. We initiate coverage on the stock with a Buy recommendation and 12-month Target Price of Rs238, at which the stock would trade at 10x FY2009E earnings. Based on our DCF valuation, wherein we have discounted the future cash flows by 13.2% (WACC), assumed Cost of Equity at 14.8% and assigned a terminal multiple of 4x FY2012 FCF, we have arrived at a value of Rs243 per share.
Buy Tata Elxsi, target Rs 387: Networth
At the current market price of Rs 293, the stock is trading at a PE of 17.3x its FY07 EPS of Rs 16.82 and 14.1x its FY08 EPS of Rs 20.68 and 9.9x its FY09 EPS of Rs.29.4. The company has fuelled its growth organically out of its own internal accruals. The company has no plans to dilute its equity. We have observed that the company is trading at a discount to its peers by a reasonable margin and we expect a re-rating of the valuations for its niche space offerings. We maintain a buy with one year price target of Rs 387, an upside of 33% from the current levels.
At the current market price of Rs 293, the stock is trading at a PE of 17.3x its FY07 EPS of Rs 16.82 and 14.1x its FY08 EPS of Rs 20.68 and 9.9x its FY09 EPS of Rs.29.4. The company has fuelled its growth organically out of its own internal accruals. The company has no plans to dilute its equity. We have observed that the company is trading at a discount to its peers by a reasonable margin and we expect a re-rating of the valuations for its niche space offerings. We maintain a buy with one year price target of Rs 387, an upside of 33% from the current levels.
Glaxo Smithkline a market performer: Prabhudas Lilladher
We expect the operating margin to improve further to 33.9% in CY09, as the company will have only pharma business. We expect GSK's net profit (before EO) items to grow by 14% CAGR over next 3 years due to the improvement in the operating margins. We have revised our estimates downwards by 3% and 6% for CY07 and CY08 respectively in view of the divestment of fine chemicals business. Our revised EPS estimates for CY07 and CY08 are Rs 50.4 and Rs 55.9 respectively (against our earlier estimates of Rs 52.0 and Rs 59.7). GSK occupies the leading position in the domestic pharma market.
However, it is likely to have lower sales growth in CY07 and CY08 due to the divestment of its AHC and Fine chemicals businesses. The sales growth is likely to pick up from CY09 onwards due to the in-licensing opportunities and the introduction of new products. The company's net profit is likely to grow by 14% CAGR over next three years. At the CMP of Rs 1,123, the stock trades at 22.3x CY07 and 20.1x CY08 earnings respectively. We have revised our rating from outperformer to market performer for the scrip due to lower growth.
We expect the operating margin to improve further to 33.9% in CY09, as the company will have only pharma business. We expect GSK's net profit (before EO) items to grow by 14% CAGR over next 3 years due to the improvement in the operating margins. We have revised our estimates downwards by 3% and 6% for CY07 and CY08 respectively in view of the divestment of fine chemicals business. Our revised EPS estimates for CY07 and CY08 are Rs 50.4 and Rs 55.9 respectively (against our earlier estimates of Rs 52.0 and Rs 59.7). GSK occupies the leading position in the domestic pharma market.
However, it is likely to have lower sales growth in CY07 and CY08 due to the divestment of its AHC and Fine chemicals businesses. The sales growth is likely to pick up from CY09 onwards due to the in-licensing opportunities and the introduction of new products. The company's net profit is likely to grow by 14% CAGR over next three years. At the CMP of Rs 1,123, the stock trades at 22.3x CY07 and 20.1x CY08 earnings respectively. We have revised our rating from outperformer to market performer for the scrip due to lower growth.
Union Bank an outperformer, target Rs 185: Karvy
Downward pressure on margin due to the particular event would be negligible. We expect that in FY2008-09, the bank would report RoAA and RoAE of 1.0% and 22% respectively. We have valued the bank on Gordon growth model (GGM) assuming 7.0% of growth and cost of equity of 14.6%, we determine that the bank's intrinsic worth is Rs 185 per share (1.6x FY2009 adjusted book value). We reiterate our Out Performer rating on the stock with a target price of Rs 185.
Downward pressure on margin due to the particular event would be negligible. We expect that in FY2008-09, the bank would report RoAA and RoAE of 1.0% and 22% respectively. We have valued the bank on Gordon growth model (GGM) assuming 7.0% of growth and cost of equity of 14.6%, we determine that the bank's intrinsic worth is Rs 185 per share (1.6x FY2009 adjusted book value). We reiterate our Out Performer rating on the stock with a target price of Rs 185.
UBS Investment neutral on Wipro, target Rs 550
While we see this as a reflection of strong demand scenario for offshore services sector, its margin profile (lower than IT Services average), makes us cautious on Wipro. Our price target of Rs550 is based on medium-term growth of 22%, terminal growth of 3% and WACC of 13%.
While we see this as a reflection of strong demand scenario for offshore services sector, its margin profile (lower than IT Services average), makes us cautious on Wipro. Our price target of Rs550 is based on medium-term growth of 22%, terminal growth of 3% and WACC of 13%.
Maintains equal weight rating on Pantaloon Retail:M Stanley
While we believe the longterm structural growth story in PRIL is intact, increased capital requirements driven by organizational build up costs and subsequent higher financial costs in an increasing interest rate scenario are likely to adversely impact the company in the near term.
While we believe the longterm structural growth story in PRIL is intact, increased capital requirements driven by organizational build up costs and subsequent higher financial costs in an increasing interest rate scenario are likely to adversely impact the company in the near term.
Buy HUL, target Rs 235: CLSA
CLSA is bullish on HUL and has maintained outperformer rating on the stock with target price of Rs 235.
CLSA is bullish on HUL and has maintained outperformer rating on the stock with target price of Rs 235.
Fin Min: No evidence of manipulation in stock mkts and movement orderly; SEBI has not informed the govt on any mkt manipulation
ADAG eyeing cement business, company to use ash generated from power projects as inputs, can set up 45 Mn tn capacity
Chidambaram - Outlook positive
"There are of course some risks. Many of them arebeyond our control and, hence, we are compelled to take precautionary measures",says P. Chidambaram
Following is the text of the address of Finance Minister, Shri P. Chidambaram on India: Economic Growth and Outlook delivered at the Peterson Institute for International Economics in Washington, United States:-
1. "I am grateful for the invitation to deliver a talk at the Peterson Institute for International Economics. I understand that one of the objects of the Institute is to promote informed dialogue on international issues. The world is still divided in many ways – developed versus developing, North versus South, and rich versus poor. It is necessary to bridge this divide, and dialogue can do so. Dialogue can promote better appreciation of the issues; dialogue can also anticipate emerging trends.
2. Let me share with you our recent experience in managing the Indian economy and the outlook for the medium term. The India story is now rather well known, but some aspects bear repetition. In the most recent four year period – 2003-04 to 2006-07 – India's GDP has grown at an average rate of 8.6% a year. In particular, 2006-07 was a splendid year turning out a growth rate of 9.4%. All the indicators are positive. Gross Domestic Capital Formation (GDFC) – that is investment – in relation to GDP is estimated at a little over 35%. Inflation measured by the wholesale price index (WPI) is 3.3%. Foreign exchange reserves stand at over US$230bn. All sectors of the economy are contributing to the growth rate, although we are not entirely satisfied with the performance of the agriculture sector.
3. It is now three years and four months since the present Government assumed office. The Government has brought greater stability and clarity to the policy environment. In many cases, the policy is backed by law or regulation. In key sectors, Government has ceded authority to independent regulatory bodies.
4. Government has also remained steadfast on the path of fiscal prudence and discipline. Within weeks of assuming office and before presenting the first budget, we notified the Fiscal Responsibility and Budget Management Act (the FRBM Act). Despite pressure on resources, we have complied with the obligations under the Act. The fiscal deficit for the current year has been budgeted at 3.3 per cent and the revenue deficit at 1.5 per cent, and we believe we are on course to achieve the targets set by the FRBM Act.
5. What are the factors that are driving economic growth in India?
6. Firstly, it is domestic consumption. The annual growth in real consumption expenditure over the past four years has been, on average, 6.3%. With easy liquidity conditions spurring demand for personal loans, and adequate capacity in the manufacturing sector, there has been a consumption boom.
7. Secondly, rise of investment. The consumption boom that started at the beginning of this decade has triggered an investment boom. Real investment has grown at a robust rate since 2002-03, averaging 17% a year in the past four years. During this period, the contribution of investment to growth has exceeded the contribution of final consumption expenditure. The current investment rate, as a proportion of GDP, is 35.1%, and it is expected to increase in the medium term.
8. Thirdly, increase in employment. The rate of growth in the labour force that was 1.60% in the previous period of six years accelerated to 2.54 per cent during the period 1999-00 to 2004-05. Thankfully, the rate of growth of employment too accelerated from 1.57% in the first period to 2.48% in the second period. We have, therefore, more persons employed and contributing to the national output. Paradoxically, we also have, in absolute number, more persons unemployed.
9. Fourthly, increase in productivity of both capital and labour. Rodrick and Subramanian, in an IMF working paper of 2004, pointed out that India seems to have large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins and Arvind Virmani (2006) has confirmed this. They have concluded that output per worker grew at 1.3% annually during 1960-80 and total factor productivity (TFP) was barely above zero. In contrast, growth in output per worker nearly tripled to 3.8% during 1980-2004, while TFP increased tenfold to 2%.
10. The outlook for the medium term is extremely positive. We believe it is possible to sustain the factors that are driving economic growth and consolidate the gains.
11. There are, of course, some risks. Many of them are beyond our control and, hence, we are compelled to take precautionary measures that will minimise the adverse effects of these risks. The two annual monsoons are always uncertain factors. By and large, the monsoons determine the area under cultivation and the output of food grains and other food articles. As a precautionary measure, we had to import some quantities of wheat last year and again this year. The price of crude oil is an enormous external risk. Since these outrageous prices cannot be fully passed through to the consumers in India, the burden falls largely on the domestic budget and constrains our capacity for investment. The depreciation of the value of the dollar vis-a-vis the rupee has thrown up an unexpected downside risk: it has challenged our exports and our tax revenues, and we may find ourselves in a situation where we need to provide for the consequences of an appreciating currency.
12. Ladies and Gentlemen! Let me not give you the impression that our work is done. Far from the work being completed, the road ahead is long and difficult. Governing India is, at the best of times, a complex task. During a period of high growth, the task does not become easier, as one may be wont to think. While sustaining high growth is one kind of challenge, the more difficult challenge is spreading the benefits of growth and making it more inclusive.
13. Despite a marked reduction in poverty, about 26% of the population of India lives in extreme poverty. A larger proportion of the population is affected because of the inadequacy or absence of many public goods and services such as clean drinking water, sanitation, schools, basic healthcare, electricity and roads. Democracy – especially a vibrant and noisy one – offers many seemingly attractive alternative models for the elimination of poverty. We know that many of those have not worked in the past and we shall not repeat those mistakes. We believe that growth is the best antidote to poverty, provided that the growth is broad based and inclusive.
14. Our government believes that in a developing country growth is an imperative and nothing should be done to affect the process of growth. At the same time, our government believes that it is the duty of the government to provide a measure of economic and social security to the very poor who are, at present, beyond the pale of the market economy. We have, therefore, adopted an ambitious social and economic agenda that extends to matters such as guaranteed wage employment, affirmative action in education, death and disability insurance, health insurance, old age pension, scholarships and education loans, empowerment of women and right to information.
15. I am aware of the oft-repeated criticism that the growth process has benefited only a small section of the people and, therefore, we must change course. I reject that criticism. It is based on a superficial and ill-informed view of the transformation that is taking place in India. More people are discovering that there are opportunities at the bottom of the pyramid and more people at the bottom of the pyramid are demanding their share of the economic opportunities thrown up by the growth process. For instance, in the last three years, banks have more than doubled the amount advanced as farm loans: the volume has increased from Rs844bn in 2003-04 to Rs2050bn in 2006-07. Who gets these loans? It is farmers who have an average land holding of one hectare, and every year over 5mn new borrowers have been added to the portfolio of banks and given farm loans. In 2006-07, 8.35mn new farmers were brought under the bank credit system.
16. Take another example. India runs the largest programme of micro credit – a fact that is not widely known. At the end of March 2007, 2.6mn self help groups – nearly all of them 'women only' groups – were credit-linked to the banks. Beginning with consumption credit, an overwhelming majority among them has graduated to production credit. These groups borrow amounts up to Rs200,000 for purposes such as land development, rearing cattle or sheep, poultry, garment making, food processing, manufacture of toys and retail shops. The amount of credit advanced to SHGs at the end of March 2007 was Rs180bn.
17. More than anything else, it is growth that has allowed the Government to increase public expenditure in sectors such as health and education. In 2003-04, the Central government's budget had allocated Rs70bn for the health sector and Rs70bn for the education sector. In 2007-08, those allocations had grown manifold to Rs143bn for health and Rs286bn for education.
18. However, outlays do not mean outcomes, and this is our prime concern. There is not yet in place a mechanism that will ensure that the deliverables are indeed delivered or that the public goods and services are of acceptable quality and have reached the intended beneficiaries. Some of the problems are due to poor design of the programme. Besides, there is still too much dependence on the government machinery and an unwillingness to experiment with alternative models like food stamps or school vouchers. There is also, regrettably, a considerable degree of waste and pilferage.
19. Our best chance lies in encouraging more openness and more competition. An open society and an open polity will eventually embrace an open economy. A revolutionary change has been wrought in the sectors where monopolies were dismantled and the sector was thrown open to competition. Two examples would suffice: one, telecommunications and the other, aviation. Not too long ago, a customer had to register for a landline telephone and wait for many years to be given one. She would have to "book" a long distance call and hope that she could get through within a few hours. And she would have to pay exorbitant rates depending on the "distance" between the caller and the called person. Mobility was a dream; the telephone itself was a nightmare. Mobile telephony is growing at over 5mn new connections every month, and in August this year 7 million new connections were added .
20. The air transport sector has witnessed a similar revolution. The entry of private airlines has democratised flying. Many second and third tier towns are now connected by air. Domestic passenger traffic has grown, on average, by 30.5% a year over the last two years. Two green field airports are being built. Two metro airports are being modernised and upgraded, and before that task is over, plans are being drawn up for a second airport in these two metros. Two more metro airports and 35 non-metro airports have been taken up for modernisation and expansion.
21. Competition is driving growth in many other sectors: steel, textiles, pharmaceuticals, automobiles, home appliances, packaged food, computer hardware and software, banking and insurance. It is axiomatic that more openness and more competition will benefit the sectors that remain closed or restricted as a matter of policy, and that is the direction in which we would like to move.
22. The competition is not among domestic players alone. India's manufacturing and services sectors face increasing competition from overseas manufacturers and service providers. Many foreign companies have entered the Indian market through imports or local production. Far from being overawed or vanquished, Indian business has boldly ventured into other countries and has opened offices abroad, acquired factories and established new facilities. Foreign direct investment has become a two way street. In 2006-07, while foreign direct investment flows into India were US$19.5bn, the outflow of capital amounted to US$11.9bn.
23. On August 15, 2007, India turned 60. It is, compared to the United States or many other countries, a young nation. It is also a young nation in another sense. One-third of the population is below the age of 15 years. India is the only large country in the world where the size of the working age population will grow – and will exceed the number of dependent children and old persons -- until 2025, the year up to which projections of population have been made, and perhaps even beyond till 2045. The size of the work force will grow, incomes will grow, savings will grow and investments will also grow. The challenge is to seize the opportunity and turn India into an economic powerhouse.
24. We are happy that the world is taking note of India and other emerging economies. If the developed countries of the world are serious in their intention to achieve the Millennium Development Goals, they must realize that the goals will not be achieved until they are achieved in India and China. We recognize that as we take our place in the world we have to assume our share of responsibility, consistent with our need and capacity, to make the world a better and safer place.
25. In the past – and now too – India has accepted responsibilities. For example, though we are an energy deficient country, we have accepted the principle of common and differentiated responsibilities in the area of climate change. At Heiligendamm, the Prime Minister of India made an important statement when he offered that India's per capita CHG emissions would never be allowed to exceed the per capita CHG emissions of developed countries. That statement has been strongly endorsed by Chancellor Angela Merkel. That statement opens the way to find a just and fair agreement on the complex issues concerning climate change.
26. In the area of non-proliferation, though we are not a signatory to the NPT, we have put substance over form and maintained an impeccable record of non-proliferation. The India-United States agreement on civil nuclear cooperation is premised on that record.
27. On the economic front, we acknowledge that we share responsibility for ensuring the stability of the global economy. We have maintained fiscal prudence and discipline. We have taken precautionary measures to avoid high-risk financial transactions. We have contained inflation and will always be on alert. We have in place necessary regulations to ensure that capital flows – inward and outward – are orderly.
28. Much of what has been accomplished – or adopted – in India is not unique to India. Many other countries have done the same and, in this behalf, I can cite the cases of Argentina, Brazil, China, Egypt, Mexico and South Africa. As I said at the beginning of my speech, the world is still divided in many ways. A new division (or is it rivalry?) appears to be on the horizon – between the G 7 countries and the fast growing, emerging economies. Just as we are willing to share responsibility with the developed countries, the G 7 countries must also share responsibility with the emerging economies. That, indeed, would be the most wise and prudent course to make the world a better and safer place."
Weekly Newsletter
Record week for Sensex, Nifty
It's something unpredictable, but in the end it's right.
I hope you had the time of your life.
I hope you had the time of your life.
Good time s just keep rolling for the bulls. All the talk of a possible correction has gone for a six, as relentless inflows from FIIs coupled with firm global markets propelled the key indices into new orbits. The Sensex traveled from 16k to 17k in a matter of just six days, recording the fastest 1000-point run ever. The Nifty too crossed the landmark of 5,000 during the week. Buoyed by huge buying by overseas investors and the aggressive Fed rate cuts has boosted the sentiment. FII inflows have crossed US$2bn in the past seven days, topping the US $11bn mark for the year.
Bulls were in total control during the week led by gains in Reliance stocks, Tata Steel, SBI and HDFC. Some action was also seen in mid-cap and small cap counters. A smooth rollover of positions into the October F&O series also helped the bulls. The cues from the F&O market continue to be encouraging, indicating that shorts have been squared off and fresh longs have been created.
Among the sectors, Auto, Banking, Real Estate, Fertilizers, Capital Goods, Cement and Telecom were the top gainers. The Sensex closed the week at an all time high of 17,291, adding 726 points or 4.4% over the previous week's close. The NSE Nifty recorded impressive gains of 184 points or 3.8% over the week to close at 5021.3.
Reliance Energy was by far the pick of the week. The scrip was the top gainer in the Sensex, adding over 19% to Rs1205, a 52-week high. Reports stated that the company won a Rs16-18bn order and plans to sell shares in its power generating unit. The scrip hit the week's high Rs1220 and low of Rs1010.
Sugar stocks declined this week amid a grim outlook for the sector. Balrampur Chini dropped 4.5% to Rs75, Sakhti Sugar slipped 3.5% to Rs85 and Bajaj Hindustan lost 2.3% to Rs171. However, Shree Renuka Sugar bucked the trend and added 3% to Rs706.
Metal stocks continued their impressive rally on the back of strong metal prices on the LME and bullish outlook for the sector. JSW Steel rallied over 17% to Rs853, Tata Steel surged by over 15% to Rs850. SAIL rose over 7% to Rs207 and Jindal Stainless added 5.6% to Rs169
For a change, IT stocks had a good week on speculation that recent measures taken by the RBI to increase dollar outflows could help curb the rise in the local currency. Index heavyweights led from the front. Satyam advanced nearly 6% to Rs443, Wipro gained over 4.5% to Rs459. TCS was up by 4.1% at Rs1056 and Infosys added 4% to Rs1896.
Gains were also seen across the banking stocks, as speculation increased about a possible easing of the RBI's monetary policy stance. ICICI Bank rose 10% to Rs1063, HDFC Bank advanced 8.7% to Rs1439 and SBI added 7.8% to Rs1950.
The bulls had an enjoyable time scaling Mount 17K. They seemed to be more or less in control throughout the week. With lower inflation rates and speculation about a cut in interest rates by RBI, the bulls had most things coming their way. However, after such a rally, we expect markets to consolidate at these levels before making a fresh upmove. The advance tax numbers announced so far point towards another robust earnings season. The big worry, however is the valuations, which don't look cheap by any means. Also, the rally may have already factored in the expectations of strong numbers. If the results fail to spring any surprise, we may see market taking a short-term u-turn from here. Hence, it pays to remain alert. A shortened weekend keeps many bulls on the sidelines. Usually loud bullish voices are getting softer. A directionless week is what we could expect.
The primary driver for the M&As has been the outbound cross border deals. In the first 8 months of 2007, there were 237 cross border deals valued at about US$45.95bn
Notwithstanding the slowdown in deals over the past couple of months due to the global market turmoil, the Merger & Acquisition (M&A) and private equity deals in India in the current year to date has been considerable, says the latest data from Grant Thornton. The M&A deals have touched nearly US$50bn and Private Equity (PE) deals have exceeded US$10bn. The primary driver for the M&A deals has been the outbound cross border deals. In the first eight months of 2007, there were 237 cross border M&A deals valued at about US$45.95bn.
The number of acquisitions made by Indian companies abroad (164 outbound deals) has been more than double the number of acquisitions made by international companies in India (73 inbound deals), according to Grant Thornton. The value of outbound acquisitions has been double the inbound acquisition value. "Indian companies are constantly making overseas acquisitions exhibiting their higher risk appetite, ability to acquire and in the process enhancing the foothold in international markets," says Grant Thornton.
Outbound deals have grown from US$9.9bn in 2006 to US$30.8bn plus this year so far. Inbound deals have grown from US$5.4bn in 2006 to US$15.15bn in 2007 year to date. Domestic deals have grown in volume from 214 in 2006 to 223 so far this year. But the deal values have significantly declined, from US$4.5bn (2006) and to US$2.45bn in the first eight months of 2007.
The major acquisitions by Indian companies abroad in the year (January-August 2007) are: Tata Steel's acquisition of Corus for US $ 12.2bn; Hindalco's acquisition of Novelis Inc for US $ 6bn; Suzlon Energy's purchase of 33.85% stake in RE Power for US$1.7bn; Essar Steel's acquisition of Algoma Steel Inc for US$1.58bn; United Spirit's acquisition of Whyte & Mackay for US$1.11bn; Tata Power acquisition of 30% stake in PT Kaltim Prima Coal for US$1.1bn.
The major acquisitions by foreign companies in India in the year (January-August 2007) are listed below: Vodafone's acquisition of 67% in Hutchison Essar for US$10.83bn; Vedanta Resources purchase of 51% stake in Sesa Goa for US$0.98bn; Mittal Investment's acquisition of 49% in Guru Gobind Singh Refineries for US$0.71bn. Vodafone-Hutchison deal accounted for 71% of the total inbound deal value during first eight months of 2007.
There were 121 M&A deals with a total value of about US$4.3bn in July and August 2007. Of these, the number of domestic deals has been 56 with a value of US$0.84bn. The number of inbound cross border deals has been 22 with a value of US$0.64bn and the number of outbound cross border deals was 43 with a value of US$2.82bn.
There have been some significant outbound acquisitions by Indian companies in the last two months, the largest being JSW Steel's acquisition of three USA companies (Jindal United Steel Corp, Saw Pipes and Jindal Enterprises LLC) and Wipro Technology's acquisition of Infocrossing and its subsidiaries. FirstSource Solution's acquisition of Medassist Holding and Reliance Communication's acquisition of Yipes Holding Inc were the other significant outbound deals.
The most significant inbound deal during the last two months have been Holcim's acquisition of 3.9% stake from Ambuja Cements, Imerys' acquisition of majority stake in Ace Refractories and Novozymes acquisition of Enzymes business of Biocon.
There have been 67 private equity deals during the last two months with an announced value of US$4bn.
Top Stories for week
RBI moves to counter surge in foreign inflows
In order to prevent the strong foreign capital inflows from lifting the rupee further up, the Reserve Bank of India (RBI) announced further relaxation in foreign exchange regulations. However, experts feel that the decision may be too little and too late and may not have the desired effect. Given the positive outlook on the Indian economy and corporate profit growth, foreign capital inflows will continue to pour in. So, the RBI will have to resort to a three-pronged approach suggested by former RBI Governor C. Rangarajan i.e. absorb some inflows, allow the rupee to rise a little and discourage some inflows.
As per the new RBI rules, companies can now spend up to 400% of their net worth to invest abroad, as opposed to 300% till now. They can also pre-pay up to US $500mn of their foreign loans every year, up from US $400mn, and make portfolio investments up to 50% of their net worth, up from 35%. Individuals can now invest up to US$200,000 abroad, double the amount allowed so far, and the aggregate investment limit for Mutual Funds (MF) has been raised from US $4bn to US $5bn.
In addition, the existing facility of investing up to US$1bn in overseas Exchange Traded Funds (ETFs), as may be permitted by SEBI by a limited number of qualified Indian MFs, would continue. Overall, the scope of foreign companies in which Indians can invest has been widened by the removal of the 10% reciprocal shareholding requirement. So far, Indians could only invest in foreign companies that had commitments in India.
Accordingly, capital market regulator SEBI eased investment norms for MFs. It raised the limit for overseas investment for each MF from US$200mn to US$300mn. In addition, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a MF house has been dispensed with. The requirement of 10 years of experience of investing in foreign securities for being eligible to invest in overseas ETFs has also been dispensed with. Now, there is only an overall limit of US$5bn for the overseas investments.
Investors can expect more product offerings from the MFs as the investment options have been increased. The new categories of overseas instruments that has been added include ADRs/GDRs issued by foreign companies, IPO and FPOs for listing at recognised stock exchanges overseas, derivatives for purpose of hedging and portfolio balancing. Investors may even get to indirectly invest in real estate abroad by investing in units that have mandates to invest in Real Estate Investment Trusts (REITs) listed in recognised stock exchanges.
Telecom licenses...the queue gets longer
The list of new companies seeking a slice of India's fast-growing telecom sector just keeps growing. After Parsvnath Developers and Unitech, another real estate player, Indiabulls Real Estate plans to enter this space. The company, part of the Indiabulls Group, applied for licences in 22 circles. Reports also suggested that realty giant DLF is also interested in jumping on to the telecom bandwagon. Meanwhile, white goods giant Videocon Industries applied for telecom licenses for all the 22 circles, except the north-eastern region. A financial daily reported that Videocon was likely to rope in US-based telecom major Verizon Communications as a partner in the proposed telecom venture. The two companies already have a joint venture for national and international long-distance telecom services. The move came just days after the Department of Telecommunications (DoT) said it won't accept new applications for licenses after October 1.
Over the last few weeks, the DoT has received about 160-180 new applications for new universal access service licences and many more could be in the pipeline. However, in view of the paucity of spectrum it may not be possible for the DoT to entertain all the new applicants. Some say the rush for getting new telecom licences is due to telecom regulator TRAI's latest recommendation that the number of players in a circle should not be capped. In addition, TRAI has suggested that the current norm of allocating 2G spectrum based on the number of subscribers should be increased several times before existing players are allocated fresh spectrum. If these recommendations are accepted by the DoT, then several new applicants will be eligible to get spectrum to launch telecom services.
However, another school of though is of the view that the scramble for telecom licences is aimed at making a quick buck by first getting the licences and then selling the same to overseas players at a hefty premium. To get to the bottom of the matter, the DoT is believed to have set up an agency to establish the actual identities of the promoters and shareholders behind the new applications for telecom services. Telecom Minister, A Raja, on Sept. 24, announced that the ministry will prepare a fresh set of guidelines for grant of licences to new applicants. "I have asked DoT secretary, DS Mathur to form a committee to frame guidelines for grant of licence to new applicants," Raja said.
India is expected to be the second-largest telecom market in the world with 800 million users by 2015, according to independent estimates. Currently, Indian telecom companies adds around 8mn new wireless subscribers every month. At the end of August, India had 201.3mn wireless subscribers after adding a record 8.31mn users in the month. The growth exceeded the number of subscriber additions in China.
Where have the bears gone?
The rollover in the F&O segment indicates fresh optimism is in. Shorts have been squared off and fresh longs created. The sentiment is definitely upbeat.
One issue that was on everyone's mind was the whether the credit crisis in the developed economies would affect liquidity inflows into the emerging markets. Once the US-Federal Reserve came to the rescue, that issue was settled. Money has kept pouring in. Overseas investors have already invested around $11 billion this year. The earlier annual record was $10.7 billion in 2005.
One issue that was on everyone's mind was the whether the credit crisis in the developed economies would affect liquidity inflows into the emerging markets. Once the US-Federal Reserve came to the rescue, that issue was settled. Money has kept pouring in. Overseas investors have already invested around $11 billion this year. The earlier annual record was $10.7 billion in 2005.
There is an increased perception among foreign investors that India is safer than other fast growing economies, as the growth here is more sustainable.
In fact, this was the fastest 1,000 point rally. And even though concerns remain that the market is expensive at current levels, the liquidity factor will sustain these levels, at least in the short term.
In retrospect, one remembers the slowest 1,000 point rally. It took place during 1992 and 1999 when the index crawled from 4,000 to 5,000.
Value goes up
Cashing in on the popularity of Team 20, Dhoni's brand value, which was pegged at Rs 1 crore is now probably Rs 3 crore.
Cashing in on the popularity of Team 20, Dhoni's brand value, which was pegged at Rs 1 crore is now probably Rs 3 crore.
But the euphoria was not restricted to the field. RIL Chairman, Mukesh Ambani, became the richest Indian with a net worth of Rs 2 trillion as the booming stock market pushed the value of his shareholding in various group firms. Ambani's net worth has soared past $50 billion, making him the first Indian and only the fourth person in the world to have a wealth higher than this amount.
RBI blues
Meanwhile, the influx of money has sent the rupee to a 9-year high of Rs 39.62 against the dollar. Exporters are feeling the pinch and certainly not joining the celebrations.
Meanwhile, the influx of money has sent the rupee to a 9-year high of Rs 39.62 against the dollar. Exporters are feeling the pinch and certainly not joining the celebrations.
The RBI meanwhile is trying its best to keep the rupee from appreciating further and came out with various measures easing overseas investment and loan repayment.
On the other fronts….
India, the world's fastest growing cell phone market, ended August with 201.3 million wireless users after 8.31 million accounts were added in August. The earlier additions were 7.34 million (June) and 8.06 million (July).
India, the world's fastest growing cell phone market, ended August with 201.3 million wireless users after 8.31 million accounts were added in August. The earlier additions were 7.34 million (June) and 8.06 million (July).
India's fuel consumption grew 3.5% in August and crude imports soared 9.7% as refiners imported more crude to export processed products. Import of petroleum products dipped 5.6% while exports saw a 7.8% growth.
Still needs work on this front
A World Bank report on the ease of doing business in various countries has ranked India higher than earlier. In a ranking of 178 countries, India moved up to 120 (up 12 notches). Among the 10 areas tracked are regulations involved in starting businesses, obtaining licenses, registering property, getting credit, paying taxes and closing businesses. Despite getting a higher ranking than last year, India needs to do better on this front.
A World Bank report on the ease of doing business in various countries has ranked India higher than earlier. In a ranking of 178 countries, India moved up to 120 (up 12 notches). Among the 10 areas tracked are regulations involved in starting businesses, obtaining licenses, registering property, getting credit, paying taxes and closing businesses. Despite getting a higher ranking than last year, India needs to do better on this front.
On the corruption front, India did not do too well. The Corruption Perception Index (CPI) released globally ranks countries on a scale of 0 (highest level of corruption) to 10 (no corruption). Last year, India scored 3.3 and this year, 3.5.
Guess some things don't change easily, despite India shining on certain fronts
Post Market Commentary
The Sensex opened almost flat at 17,152 - up one point. Unabated buying in the market saw the index rally to a fresh all-time intra-day high of 17,361 - up 210 points from the previous close.
The index finally ended with a gain of 140 points at 17,291.
The market breadth was almost flat - out of 2,838 stocks traded, 1,377 advanced, 1,397 declined and 64 were unchanged today.
INDEX MOVERS...
Reliance Energy zoomed nearly 8% to Rs 1,206. Tata Steel soared 7% to Rs 850.
Hindalco surged nearly 5% to Rs 172. Tata Motors, Cipla and SBI rallied around 3.5% each to Rs 778, Rs 182 and Rs 1,951, respectively.
Ranbaxy and ICICI Bank gained 3.3% each at Rs 434 and Rs 1,063, respectively.
ITC, Grasim and Maruti moved up around 2.5% each to Rs 190, Rs 3,513 and Rs 1,000, respectively.
HDFC is up over 1% at Rs 2,527.
...AND THE SHAKERS
Bharti Airtel dropped 2% to Rs 941, and ONGC shed 1.4% to Rs 958.
Reliance and Ambuja Cements were down 1% each at Rs 2,296 and Rs 144, respectively.
VALUE & VOLUME TOPPERS
Sintex Industries topped the value chart with a turnover of Rs 501.50 crore followed by Reliance Energy (Rs 416.70 crore), Reliance Natural Resources (Rs 370 crore), Tata Steel (Rs 273 crore) and Reliance (Rs 215.25 crore).
Reliance Natural Resources led the volume chart with trades of around 4.33 crore followed by IKF Technologies (3.02 crore), Himachal Futuristic (2.92 crore), Nagarjuna Fertilisers (2.80 crore) and Ispat Industries (2.34 crore).
The index finally ended with a gain of 140 points at 17,291.
The market breadth was almost flat - out of 2,838 stocks traded, 1,377 advanced, 1,397 declined and 64 were unchanged today.
INDEX MOVERS...
Reliance Energy zoomed nearly 8% to Rs 1,206. Tata Steel soared 7% to Rs 850.
Hindalco surged nearly 5% to Rs 172. Tata Motors, Cipla and SBI rallied around 3.5% each to Rs 778, Rs 182 and Rs 1,951, respectively.
Ranbaxy and ICICI Bank gained 3.3% each at Rs 434 and Rs 1,063, respectively.
ITC, Grasim and Maruti moved up around 2.5% each to Rs 190, Rs 3,513 and Rs 1,000, respectively.
HDFC is up over 1% at Rs 2,527.
...AND THE SHAKERS
Bharti Airtel dropped 2% to Rs 941, and ONGC shed 1.4% to Rs 958.
Reliance and Ambuja Cements were down 1% each at Rs 2,296 and Rs 144, respectively.
VALUE & VOLUME TOPPERS
Sintex Industries topped the value chart with a turnover of Rs 501.50 crore followed by Reliance Energy (Rs 416.70 crore), Reliance Natural Resources (Rs 370 crore), Tata Steel (Rs 273 crore) and Reliance (Rs 215.25 crore).
Reliance Natural Resources led the volume chart with trades of around 4.33 crore followed by IKF Technologies (3.02 crore), Himachal Futuristic (2.92 crore), Nagarjuna Fertilisers (2.80 crore) and Ispat Industries (2.34 crore).
Rakesh Jhunjhunwala - Markets spring surprises
Stock market experts advice high caution for investors as the bull on the Dalal Street continues its upward move. "Market developments in the near future may take investors by surprise," said big-bull Rakesh Jhunjhunwala, who was speaking at the 38th annual general meeting of the Ando-American Chambers of Commerce (ICC).
Junjunwala said the markets may see some consolidation in the near future. "As there is extreme exicitement in the markets, things will move at an increadible speed. Both the gains as well as the fall would be fast," he said. Recently, the BSE 30-share index, Sensex, registered its fastest 1,000-point gain, which came in a mere six trading sessions.
On the other hand, Vallabh Bhansali, chairman, Enam Securities advised retail investors to be extremely selective in their stock pickings and only invest in stocks which they felt were sound fundamentally.
Sensex soars 727 points on strong FII inflow
The market rallied further last week with the barometer index BSE crossing 17,000 mark and Nifty 5,000 level as investors bet on another cut in interest rate by the US Federal Reserve next month after data showed sluggish housing sales and consumer confidence in the US. Strong foreign institutional investor (FII) buying boosted bourses. Sensex moved up in all the five trading sessions in the week.
BSE Sensex rose 726.87 points or 4.39% to 17,291.10 in the week ended Friday, 28 September 2007. Sensex hit an all time high of 17,361.47 on Friday.
The S&P CNX Nifty rose 183.8 points or 3.79% at 5,021.35 in the week. It hit an all time high of 5,055.80 on Friday.
BSE Mid Cap rose 222.51 or 3.09% to 7,422.43 in the week. The BSE Small Cap index rose 204.63 points or 2.3% to 9,099.93 in the week. Both these indices underperformed the Sensex.
Sensex hit 17,000 on Wednesday, 26 September 2007. It took just 5 trading sessions for the Sensex to reach 17,000 from 16,000 after the barometer index first struck 16,000 on 19 September 2007. The Sensex's 1,000-point surge was the fastest ever. The previous record for the shortest 1,000-point journey was 19 days when the Sensex soared from 11,000 to 12,000 in March 2006.
Sectoral indices, BSE Realty index (down 0.05% to 9,178.53), BSE Auto Index (up 2.67% at 5,332.26), BSE Capital Goods Index (up 1.1% at 14,679.84), BSE Oil and Gas Index (up 2.38% at 9,561.95), BSE TecK index (up 3.51% to 3,766), BSE Consumer Durables index (up 1.18% to 4,804.24), BSE FMCG Index (up 0.39% at 2,161.35) and BSE Health Care Index (up 3.56% at 3,784.21), underperformed the Sensex.
However BSE Bankex (up 8.35% at 9,469.26) and BSE IT Index (up 4.5% at 4,627.83), BSE PSU index (up 5.41% to 8,202.07), BSE Metal Index (up 8.84% at 13,945.39) outperformed the market in the week.
The BSE Sensex was up 281.60 points or 1.70% to 16,845.83 on Monday, 24 September 2007. The market kept on advancing as the day progressed on steady buying demand for index pivotals throughout the day, except for an hiccup in early trade. Turnover was healthy and it crossed Rs 7,500 crore on BSE. European markets which opened after Indian market, were mixed. Asian markets which opened before Indian market settled higher on that day.
Sensex gained 53.71 points or 0.32% at 16899.54 on Tuesday, 25 September 2007. Though the market ended in the green, the breadth was weak. The market recovered from lower level in late afternoon trade. Earlier, the market had slipped into the red in afternoon trade in contrast to a firm trend in mid-morning trade. European markets, which opened after Indian markets, were weak. Reliance Industries (RIL) hit all-time high in late trade.
The BSE Sensex was up 21.85 points or 0.13% at 16,921.39 on Wednesday, 26 September 2007. The market settled with small gains on selective buying in index pivotals. It opened higher as investors bet on another cut in interest rate by the US Federal Reserve next month after US data showed sluggish housing sales and consumer confidence. Asian and European markets were trading firm while US markets settled mixed overnight. IT, banking and refinery stocks surged whereas realty and oil & gas stocks witnessed selling pressure. Reliance group shares which had surged recently, eased on profit booking.
The Sensex up 229.17 points or 1.35% at 17,150.56 on Thursday, 27 September 2007.Market surged at the fag end of the trading session to touch new all time high, on short-covering ahead of expiry of September 2007 derivatives contracts. Domestic bourses rose as a part of rally across global markets as weak US economic data reinforced expectations for another interest rate cut from the Federal Reserve, following a steep half-point reduction to 4.75% last week.
The Sensex was up 140.54 points or 0.82% at 17,291.10 on Friday, 28 Seeptember 2007. Strong rollover from September 2007 futures to October 2007 futures boosted bourses today.
India's top private sector utility company in terms of revenue Reliance Energy (REL) surged 19.40% to Rs 1205.50. The stock hit all-time high of Rs 1220 on 28 September 2007. As per reports, the government cleared the two transmission line projects of REL worth Rs 3,500-crore, projects which include the western region system strengthening (WRSS) II and the Parbati-Koldam hydro projects in Himachal Pradesh. These projects were delayed due to issues raised by the public-private partnership appraisal committee (PPAC).
National Thermal Power Corporation, the country's largest power generation company by net sales jumped 3.17% to Rs 193.45 on 46.18 lakh shares. It replaced Dabur India in the S&P CNX Nifty index from Monday, 24 September 2007
India's top small-car market by market share, Maruti Suzuki India galloped 7.53% to Rs 999.55. It hit an all time high of 1009 on 26 September 2007. Recently, Foreign Investment Promotion Board (FIPB) cleared Maruti's proposal to form a joint venture for setting up an exhaust parts manufacturing facility in Haryana with Japan's Futaba Industrial Company. Futaba will hold 51% in the venture.
Bharti Airtel, India's largest listed cellular services provider by market share rose 2.49% to Rs 941.20. As per reports, it has got licence to start Direct-To-Home (DTH) services in the country and announced an investment of Rs 150 crores in the first phase to launch nation-wide operations, a move that would bring in much required competition in the DTH segment. Also another set of reports state that Bharti Airtel may get extra spectrum for Delhi and Mumbai under the existing subscriber-base norms.
India's largest power equipment maker in terms of revenue Bhel gained 3.38% to Rs 2032.75. It hit lifetime high of Rs 2066. As per recent reports, Bhel it is looking at mergers and acquisition to fuel inorganic growth and it targeting a turnover of Rs 45,000 crore by 2012. Bhel, last week, won a Rs 765 crore turnkey order from Steel Authority of India (SAIL) to set up a 62.2 mega watt captive power plant in Burnpur, West Bengal.
India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.96% to Rs 2296.20. RIL said on Saturday, 22 September 2007 that it has struck oil in the deepwater block KG-D4 located in the Krishna Basin. The commercial viability of the discovery is being evaluated. RIL holds 100% participating interest in this block, which spans over an area of 8100 sq. kms.
IT pivotals advanced after the Reserve Bank of India relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans to tame appreciating rupee. India's fourth largest software services exporter Satyam Computers soared 5.89% to Rs 443. Other IT pivotals Infosys (up 4.11% to Rs 1896.75), and TCS (up 4.12% to Rs 1056.75), also gained
Wipro, the nation's third largest software services exporter jumped 4.54% to Rs 459.85 on reports that it has bagged a five-year, $130 million contract from British utility Thames Water. As per the agreement, Wipro will provide integrated IT services encompassing applications support, maintenance and infrastructure management services. It acquired Oki Techno Centre (Singapore) in an all cash deal. Oki Techno Centre (OTCS) is based in Singapore and is focused on wireless design in the areas of RF (radio frequency) and baseband design.
Tata Steel jumped 14.79% to Rs 850.35. It hit a 52 week high of Rs 868.10 on 28 September 2007.
State Bank Of India rose 7.88% to Rs 1950.70. It hit an all time high of 1969.80 on Friday.
ICICI Bank (up 10.15% to Rs 1063.15),Hindalco Industries (up 7.57% to Rs 172) were the other gainers from the Sensex pack.
The total number of telephone subscribers reached 241.02 million at end August 2007 compared with 232.87 million in July 2007. Tele-density, the number of people owning a telephone out of every 100 people, improved 21.2% in August 2007 from 20.52% in July 2007. The wireless segment base expanded by 8.31 million subscribers in August 2007 as against 8.06 million in July 2007. The total wireless subscribers - GSM, CDMA & WLL(F) - base touched 201.29 million end August 2007.
Net direct tax collections surged 40% to Rs 106095 crore from April 2007 to 21 September 2007 compared with Rs 75510 crore in the corresponding period a year ago. Corporation tax collections moved up 42.37% to Rs 67207 crore from April 2007 to 21 September 2007 as against Rs 47207 crore in the corresponding period in FY 2007.
The government is likely to issue oil bonds worth Rs 12000 crore to oil marketing companies by 15 October 2007 according Petroleum Secretary M S Srinivasan. Oil bonds are issued to oil marketing companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - to partly compensate them for selling petrol, diesel, LPG and kerosene at subsidised prices.
The Reserve Bank of India (RBI) on Tuesday (25 September 2007) raised ceilings on overseas investment by Indian companies and mutual funds in order to check the appreciating rupee and move towards fuller convertibility of the rupee in the capital account. As per the measures announced by the RBI, individuals can now remit up to $200000 against $100000 without RBI's permission. Companies are permitted to invest up to 400% of their net worth overseas as against 300% till now.
The Congress party appointed Rahul Gandhi as the general secretary of the All India Congress Committee (AICC) on Monday (24 September 2007) in a reshuffle of the party secretariat. Rahul Gandhi is now responsible of AICC's two youth wings — the National Students' Union of India (NSUI) and the Youth Congress.
India's consumption of fuel gained 3.5% in August 2007. Demand for petroleum products touched 9.43 million tonne (mt) in August 2007 compared with 9.11 mt in August 2006. Consumption of liquid petroleum gas (LPG), petrol and aviation turbine fuel (ATF) consistently witnessed a double-digit growth. Demand for diesel edged up 5.7% in August 2007.
The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) on Wednesday, 26 September 2007, issued notices to the Telecom Regulatory Authority of India (Trai) and mobile operators Bharti Airtel, Vodafone Essar and Idea over recent tariff increases. TDSAT asked Trai and the three operators to file their replies within a week.
Annual inflation based on the wholesale price index (WPI) has further fallen to 3.23% in the week ended 15 Setember 2007 from 3.32% in the week ended 3.32% in the week ended 8 September 2007. The market estimate stood at 3.47% in the week ended 15 September 2007. Inflation was at 5.27% in the corresponding week last. The fall in inflation is driven by decline in prices of fruits and vegetables, eggs, fish-marine and pulses.
A report realeased by the Confederation of Indian Industry (CII) and Yes Bank on Thursday (27 September 2007) has estimated India's rural retail market to grow 29% to Rs 1.8 trillion by 2010 driven by rising rural incomes and changing consumption patterns. Rural retail includes fast moving consumer goods, durables, agricultural inputs and autos like tractors.
Market rallies for ninth straight trading session
The market continued a winning streak and extended a string of record highs that it had hit over the past few days. Strong rollover from September 2007 futures to October 2007 futures boosted bourses today. Turnover on BSE was high, just under Rs 8,000 crore mark.
Despite the market holding positive zone, market breadth, which indicates overall health of the market, was negative on BSE. With today's rally, the market has posted gains for ninth consecutive day, boosted by step-up of FII inflows. Metal, banking, FMCG and pharma stocks were in forefornt of today's rally. However profit booking was witnessed in select oil & gas and IT pivotals.
European markets were weak and Asian markets were mixed today. US markets were steady overnight.
The wholesale price index rose 3.23% in the 12 months to 15 September 2007, lower than previous week's 3.32%, due to a fall in some food prices, government data released at about 12:00 IST today showed.
The 30-shares BSE Sensex was up 140.54 points or 0.82% at 17,291.10. It opened higher at 17,152.31 and advanced further to hit an all-time high of 17,361.47.
At the day's high of 17,361.47, the Sensex had gained 210.91 points for the day.
From a recent low of 13,989.11 on 21 August 2007, Sensex surged 3,301.99 points or 23.60% in 28 trading sessions to 17,291.10 on 28 September 2007. FII buying boosted the bourses in this period.
The S&P CNX Nifty rose 20.80 points or 0.42% at 5,021.35. It struck an all time high of 5055.80. The Nifty October 2007 futures settled at 5,038, a premium of 16.65 points as compare to spot closing of 5,021.35.
The market had opened on a firm note and extended early gains to hit record high in early afternoon trade as following a healthy rollover of derivatives positions from September 2007 contracts to October 2007 contracts. It had come sharply off higher level in early afternoon trade, before bouncing back again later.
The breadth was slightly negative on BSE. 1392 shares declined as compared to 1362 that advanced on BSE. 58 remained unchanged. It was strong in morning trade. Interestingly in the past six trading days when the market has surged, the market breadth in contrast to the firm trend was negative in five sessions.
The BSE Mid-Cap index was up 1.23% to 7,422.43. The BSE Small-Cap index rose 0.59% to 9,099.93. It hit an all time high of 9,136.32 in intra-day trade.
The total turnover on BSE amounted to Rs 7915 crore as compared to Rs 7,750.07 crore yesterday, 27 September 2007
The NSE F&O turnover was Rs 56,998.5 crore today as compared to a record Rs 86,226.41 crore on Thursday, 27 September 2007
Sectoral indices on BSE displayed mixed trend. BSE Metal Index (up 3.28% at 13,944.83), BSE Health Care Index (up 1.72% at 3,784.21), BSE Auto Index (up 1.17% at 5,332.26), BSE Realty index (up 1.63% to 9,178.53) and BSE FMCG Index (up 1.94% at 2,161.35) outperformed the Sensex.
However BSE Capital Goods Index (down 0.08% at 14,679.84), BSE TecK index (down 0.49% to 3,766.00), BSE IT Index (down 0.34% at 4,627.83), BSE Oil and Gas Index (down 0.81% at 9,561.95), BSE Consumer Durables index (up 0.07% to 4,804.24), BSE PSU index (up 0.77% to 8,202.07), were underperformers.
Among the 30-member Sensex pack, 20 advanced while the rest declined.
India's second largest power utility company in terms of revenue Reliance Energy (REL) extended early surge. It jumped 8.82% to Rs 1215.80 on 35.31 lakh shares. It hit an all time high of Rs 1220 on BSE in late trade. As per reports REL is believed to be restructuring its businesses under three verticals — utility, infrastructure and real estate. It was the top gainer from Sensex pack.
World's sixth largest steel manufacturer Tata Steel surged 7% to Rs 850. It hit a 52-week high of Rs 868.10 on BSE today. The stock was boosted after Mr Ratan Tata, Tata Group Chairman at the UK - India conference Said that the group expects to earn nearly 60% of its revenue this year (38% last year) from its overseas operations following the acquisition of Corus Steel in UK.
Tata Motors, the nation's top truck and bus maker in terms of sales rose 1% to Rs 758. Deutsche Bank is bullish on the stock and has maintained buy rating with target price of Rs 920.
Hindalco (up 4.81% to Rs 172), and Cipla (up 3.95% to Rs 183.15), were the other gainers from Sensex pack
India's largest private sector bank by assets ICICI Bank gained 2.99% to Rs 1060 after it raised $2 billion through a bond issue abroad through a 5-year fixed rate note. The stock struck an all time high of Rs 1070.80 today.
The notes have been priced at 237 basis points (bps) over US Libor or at Libor plus 172 bps. The six-month Libor is currently at 5.14%.
State Bank of India, the country's largest bank in terms of net profit jumped 4.19% to Rs 1965. The stock hit a record high of Rs 1969.80 today.
Other banking shares - Bank of India (up 7.78% to Rs 280.40), Canara Bank (up 3.38% to Rs 278), Union Bank of India (up 4.45% to Rs 164.25), Kotak Mahindra Bank (up 3.30% to Rs 924.50) and Federal Bank (up 2.77% to Rs 375), edged higher.
India's largest private sector mortgage financer in terms of market share Housign Development Corporation (HDFC) gained 0.82% to Rs 2517. It hit an all time high of Rs 2544.
Bharat Heavy Electricals (Bhel), the country's largest power equipment maker by sales was down 0.67% to Rs 2,027, off its all time high of Rs 2089.20. As per recent reports Bhel has won a Rs 765 crore turnkey order from Steel Authority of India (SAIL) to set up a 62.2 mega watt captive power plant in Burnpur, West Bengal.
IT pivotals snapped two-day rally. India's third largest software services exporter Wipro rose 0.09% to Rs 460.75 off its day's high of Rs 469. It acquired Oki Techno Centre (Singapore) in an all cash deal over a period of one year. Oki Techno Centre (OTCS) is based in Singapore and is focused on wireless design in the areas of RF (radio frequency) and baseband design.
Other IT pivotals, Infosys (down 1.03% to Rs 1892, off its day's high of Rs 1950), TCS (down 1.08 % to Rs 1050.25, off its day's high of Rs 1077), slipped. Satyam Computers (up 0.03% to Rs 442.50), off its day's high of Rs 452.90 held positive zone.
IT pivotals had started the day firm, but pared gains on selling pressure later.
India's largest cellular services provider by market capitalistation Bharti Airtel lost 2.33% to Rs 938 on 1.83 lakh shares. It was the top loser from Sensex pack.
Ambuja Cements (down 1.41% to Rs 143.10), and Larsen & Toubro (down 0.67% to Rs 2818), were the other losers from Sensex pack
India's largest company in terms of market capitalisation and operator of world's third largest refinery at Jamnagar, Gujarat, Reliance Industries (RIL) saw volatile movement. It was now down 0.78% at Rs 2302.25 on 7.55 lakh shares. The stock moved between a high of Rs 2349 and low of Rs 2268. RIL is reportedly laying off 1,000 staff in the country's most populous state of Uttar Pradesh after failed attempts to reopen Western-style supermarkets, which closed after protests from small traders.
Among side counters, Whirlpool India (up 20% to Rs 47.10), Mirza Internatonal (up 20% to Rs 28.50), Dynemic Products (up 20% to Rs 23.10), Braddy & Morris (up 20% to Rs 191.20) and Ashiana Housing (up 20 to Rs 320.60 were the top gainers.
Among stocks with high volumes, Reliance Natural Resources surged 3.30% to Rs 89.55 on 4.32 crore shares. Himachal Futuristic Communications plunged 8.23% to Rs 26.75 on 2.90 crore shares. Ispat Industries rose 1.86% to Rs 27.45 on 2.33 crore shares and Tata Teleservices (Maharashtra) (TTML) slipped 0.11% to Rs 43.45 on 1.94 crore shares.
Fertiliser shares rallied on renewed buying. Chambal Fertilisers & Chemicals (up 7.10% to Rs 58.80), Coromandel Fertilisers (up 13.29% to Rs 122.35), Gujarat State Fertilisers & Chemicals (up 4.97% to Rs 242), National Fertilizers (up 4% to Rs 48), Rashtriya Chemicals & Fertilisers (up 2.17% to Rs 61.30) and Nagarjuna Fertilizers (up 11.19% to Rs 60.60) surged.
India's largest private sector iron ore exporter in terms of revenue Sesa Goa jumped 8.15% to Rs 2548. It had surged 7.14% to Rs 2388.20 yesterday, 27 September 2007 on reports that Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton, the world's three largest iron-ore exporters, may increase prices by 30% next year as demand driven by steelmakers in China outpaces growth in supply
Watch and jewellery maker Titan Industries rose 1.10% to Rs 1470. The company expects FY 2008 profit to rise by at least 50%. Revenue is expected at Rs 3150 crore as compared with March 2007 revenue of Rs 2140 crore. Titan expects to sell 10 million watches this fiscal year with nine million of them in India
NIIT Technologies gained 5.77% to Rs 353 on reports that the company is in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Promoters currently hold 40% stake in NIIT Technologies.
IFCI soared 7.70% to Rs 99.90 on reports that it has shortlisted eight bidders for the sale of its 26% stake including consortia led by Wilbur L Ross and Shinsei Bank. As many as 10 bidders had applied earlier this month. The identity of the bidders that have been left out of the race is not known.
DLF gained 2.89% to Rs 763. As per reports it will apply for telecom licence by today, 28 September 2007, to become the fourth real estate company to have applied for the same purpose. IndiaBulls Real Estate, Unitech and Parsvnath Developers are the others.
Emkay Share & Stock Brokers jumped 10% to Rs 145.60 after its 100% subsidiary - Emkay Insurance Brokers received licence from the Insurance Regulatory and Development Authority (IRDA) in terms of sub section (1) of Section 42 D of the Insurance Act, 1938 to act as a direct insurance broker. The company made this announcement after market hours on 27 September 2007.
Brady & Morris Engineering Company surged 20% to Rs 191.20 after its board of directors of at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.
WH Brady & Company jumped 10% to Rs 159.70 after is board of directors at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.
United Breweries was up 0.58% to Rs 382. Its board approved raising upto Rs 425 crore by issuing equity shares to the existing equity shareholders of the company on rights basis. The other terms regarding rights issues will be decided by a committee of directors.
Arvind Mills galloped 5.67% to Rs 61.50 after its board approved issue of 5.06 crore convertible warrants to the founders of the company at Rs 52 per share. Post issue, the shareholding of the promoters in the company will increase to 46.77% from 33.90% at present.
Cairn India rose 3% to Rs 181.40 on reports that it made new oil find in one of its exploration wells in the Ravva field off India's east coast.
Deccan Aviation declined 1.78% to Rs 146 after it announced today, 28 September 2007, that it has reported a net loss for the quarter to June 2007.
State Trading Corporation of India plunged 5% to Rs 341.90. It had lost 5% to Rs 359.85 yesterday, 27 September 2007 after its board of directors at its meeting held on 26 September 2007 deferred recommendation of bonus shares to the next board meeting. The company made this announcement after market hours on 26 September 2007.
Stone India jumped 6.59% to Rs 148 after it executed a technical collaboration agreement for producing 180 kilovolt-amps auxiliary power converter for Indian Railways.
Atlanta galloped 10% at Rs 346.70 after Sebi allowed the firm to restructure its capital to raise funds for expansion. Securities and Exchange Board of India (Sebi) has allowed the company conversion of warrants and listing of shares issued on conversion. Earlier in February 2007, Sebi had asked the promoter group, which comprises 16 entities, of Atlanta, not to deal in Atlanta scrip.
Centurion Bank of Punjab moved up 3.12% to Rs 44.65 after Reserve Bank of India allowed foreign investors to buy further shares in the bank as their holding went below the caution limit.
Virat Crane Industries jumped 10% at Rs 21.85 after its subsidiary Durga Dairy tied-up with Walmart to supply branded ghee to retail stores. So far, Durga Dairy has entered into similar alliances with major retail players like Reliance Retail, Trinetra, Gaint, Spencers, Foodworld, Subhiksha and Metro.
Rallis India surged 5.12% to Rs 415 after it sold 31 acres of land to R R Mega Property Developers.
Hinduja TMT rose 1.60% to Rs 437 after company said it is actively considering to apply for unified telecom license. It is in process of changing its name to Hinduja Ventures
Core Projects & Technologies rose 0.84% to Rs 190.40. Its board approved acquisition of virtual learning of Azzuri Communications, UK. The board has also approved acquisition of 100% equity stake in Hamlet Computer Group, UK. Also the company has decided to sign share purchase agreement for acquisition of 100% equity stake in KC Management Group, US.
Financial Technologies India galloped 6.06% to Rs 2760 after Merrill Lynch and Citigroup acquired a 5% stake each in its unit, Multi Commodity Exchange of India.
As per market data, marketwide rollover from September 2007 derivatives contracts to October 2007 contracts was 84% as compared to rollover of 82.30% from August 2007 contracts to September 2007 contracts. Nifty rollover from stood at 71% as compared to rollover of 70% from August 2007 contracts to September 2007 contracts.
European markets, which opened after Indian market were trading lower today, 28 September 2007. France's CAC (down 0.39% to 5,711.11), Germany's DAX (down 0.11% to 7,844.94) and UK's FTSE 100 (down 0.84% to 6,431.90) edged lower.
Asian markets, which opened before Indian market were trading mixed today, 28 September 2007. South Korea's Seoul Composite (up 0.06% at 1,946.80), Shanghai Composite (up 2.64% to 5,552.30), and Hong Kong's Hang Seng (up 0.29% to 27,142.47) rose.
Singapore's Straits Times (down 0.22% at 3,706.77), Japan's Nikkei (down 0.28% at 16,785.69) and Taiwan's Taiwan Weighted (down 0.02% at 9,411.95) slipped.
US stocks extended their gains yesterday, 27 September 2007 with a moderate advance as investors weighed fresh economic data, including a sharp drop in new home sales, for clues to whether more interest rate cuts are in the offing. The Dow Jones industrial average rose 34.79 points, or 0.25%, to 13,912.94. It is now 87 points below its record close of 14,000.41 set on 19 July 2007. Broader indexes also advanced. The Standard & Poor's 500 index rose 5.96 points, or 0.39%, to 1,531.38, and the technology-heavy Nasdaq Composite index rose 10.56 points, or 0.39%, to 2,709.59.
Crude oil extended gains for a third day on Friday, 28 September 2007 to above $83 a barrel, nearing its record high as a weak dollar and pre-winter supply worries fuelled fund buying. US crude for November delivery rose 30 cents to $83.18 a barrel Oil is recovering from a profit-taking dip earlier this week that pulled prices off their $83.90 peak. London Brent crude rose 30 cents to $80.33 a barrel.
Despite the market holding positive zone, market breadth, which indicates overall health of the market, was negative on BSE. With today's rally, the market has posted gains for ninth consecutive day, boosted by step-up of FII inflows. Metal, banking, FMCG and pharma stocks were in forefornt of today's rally. However profit booking was witnessed in select oil & gas and IT pivotals.
European markets were weak and Asian markets were mixed today. US markets were steady overnight.
The wholesale price index rose 3.23% in the 12 months to 15 September 2007, lower than previous week's 3.32%, due to a fall in some food prices, government data released at about 12:00 IST today showed.
The 30-shares BSE Sensex was up 140.54 points or 0.82% at 17,291.10. It opened higher at 17,152.31 and advanced further to hit an all-time high of 17,361.47.
At the day's high of 17,361.47, the Sensex had gained 210.91 points for the day.
From a recent low of 13,989.11 on 21 August 2007, Sensex surged 3,301.99 points or 23.60% in 28 trading sessions to 17,291.10 on 28 September 2007. FII buying boosted the bourses in this period.
The S&P CNX Nifty rose 20.80 points or 0.42% at 5,021.35. It struck an all time high of 5055.80. The Nifty October 2007 futures settled at 5,038, a premium of 16.65 points as compare to spot closing of 5,021.35.
The market had opened on a firm note and extended early gains to hit record high in early afternoon trade as following a healthy rollover of derivatives positions from September 2007 contracts to October 2007 contracts. It had come sharply off higher level in early afternoon trade, before bouncing back again later.
The breadth was slightly negative on BSE. 1392 shares declined as compared to 1362 that advanced on BSE. 58 remained unchanged. It was strong in morning trade. Interestingly in the past six trading days when the market has surged, the market breadth in contrast to the firm trend was negative in five sessions.
The BSE Mid-Cap index was up 1.23% to 7,422.43. The BSE Small-Cap index rose 0.59% to 9,099.93. It hit an all time high of 9,136.32 in intra-day trade.
The total turnover on BSE amounted to Rs 7915 crore as compared to Rs 7,750.07 crore yesterday, 27 September 2007
The NSE F&O turnover was Rs 56,998.5 crore today as compared to a record Rs 86,226.41 crore on Thursday, 27 September 2007
Sectoral indices on BSE displayed mixed trend. BSE Metal Index (up 3.28% at 13,944.83), BSE Health Care Index (up 1.72% at 3,784.21), BSE Auto Index (up 1.17% at 5,332.26), BSE Realty index (up 1.63% to 9,178.53) and BSE FMCG Index (up 1.94% at 2,161.35) outperformed the Sensex.
However BSE Capital Goods Index (down 0.08% at 14,679.84), BSE TecK index (down 0.49% to 3,766.00), BSE IT Index (down 0.34% at 4,627.83), BSE Oil and Gas Index (down 0.81% at 9,561.95), BSE Consumer Durables index (up 0.07% to 4,804.24), BSE PSU index (up 0.77% to 8,202.07), were underperformers.
Among the 30-member Sensex pack, 20 advanced while the rest declined.
India's second largest power utility company in terms of revenue Reliance Energy (REL) extended early surge. It jumped 8.82% to Rs 1215.80 on 35.31 lakh shares. It hit an all time high of Rs 1220 on BSE in late trade. As per reports REL is believed to be restructuring its businesses under three verticals — utility, infrastructure and real estate. It was the top gainer from Sensex pack.
World's sixth largest steel manufacturer Tata Steel surged 7% to Rs 850. It hit a 52-week high of Rs 868.10 on BSE today. The stock was boosted after Mr Ratan Tata, Tata Group Chairman at the UK - India conference Said that the group expects to earn nearly 60% of its revenue this year (38% last year) from its overseas operations following the acquisition of Corus Steel in UK.
Tata Motors, the nation's top truck and bus maker in terms of sales rose 1% to Rs 758. Deutsche Bank is bullish on the stock and has maintained buy rating with target price of Rs 920.
Hindalco (up 4.81% to Rs 172), and Cipla (up 3.95% to Rs 183.15), were the other gainers from Sensex pack
India's largest private sector bank by assets ICICI Bank gained 2.99% to Rs 1060 after it raised $2 billion through a bond issue abroad through a 5-year fixed rate note. The stock struck an all time high of Rs 1070.80 today.
The notes have been priced at 237 basis points (bps) over US Libor or at Libor plus 172 bps. The six-month Libor is currently at 5.14%.
State Bank of India, the country's largest bank in terms of net profit jumped 4.19% to Rs 1965. The stock hit a record high of Rs 1969.80 today.
Other banking shares - Bank of India (up 7.78% to Rs 280.40), Canara Bank (up 3.38% to Rs 278), Union Bank of India (up 4.45% to Rs 164.25), Kotak Mahindra Bank (up 3.30% to Rs 924.50) and Federal Bank (up 2.77% to Rs 375), edged higher.
India's largest private sector mortgage financer in terms of market share Housign Development Corporation (HDFC) gained 0.82% to Rs 2517. It hit an all time high of Rs 2544.
Bharat Heavy Electricals (Bhel), the country's largest power equipment maker by sales was down 0.67% to Rs 2,027, off its all time high of Rs 2089.20. As per recent reports Bhel has won a Rs 765 crore turnkey order from Steel Authority of India (SAIL) to set up a 62.2 mega watt captive power plant in Burnpur, West Bengal.
IT pivotals snapped two-day rally. India's third largest software services exporter Wipro rose 0.09% to Rs 460.75 off its day's high of Rs 469. It acquired Oki Techno Centre (Singapore) in an all cash deal over a period of one year. Oki Techno Centre (OTCS) is based in Singapore and is focused on wireless design in the areas of RF (radio frequency) and baseband design.
Other IT pivotals, Infosys (down 1.03% to Rs 1892, off its day's high of Rs 1950), TCS (down 1.08 % to Rs 1050.25, off its day's high of Rs 1077), slipped. Satyam Computers (up 0.03% to Rs 442.50), off its day's high of Rs 452.90 held positive zone.
IT pivotals had started the day firm, but pared gains on selling pressure later.
India's largest cellular services provider by market capitalistation Bharti Airtel lost 2.33% to Rs 938 on 1.83 lakh shares. It was the top loser from Sensex pack.
Ambuja Cements (down 1.41% to Rs 143.10), and Larsen & Toubro (down 0.67% to Rs 2818), were the other losers from Sensex pack
India's largest company in terms of market capitalisation and operator of world's third largest refinery at Jamnagar, Gujarat, Reliance Industries (RIL) saw volatile movement. It was now down 0.78% at Rs 2302.25 on 7.55 lakh shares. The stock moved between a high of Rs 2349 and low of Rs 2268. RIL is reportedly laying off 1,000 staff in the country's most populous state of Uttar Pradesh after failed attempts to reopen Western-style supermarkets, which closed after protests from small traders.
Among side counters, Whirlpool India (up 20% to Rs 47.10), Mirza Internatonal (up 20% to Rs 28.50), Dynemic Products (up 20% to Rs 23.10), Braddy & Morris (up 20% to Rs 191.20) and Ashiana Housing (up 20 to Rs 320.60 were the top gainers.
Among stocks with high volumes, Reliance Natural Resources surged 3.30% to Rs 89.55 on 4.32 crore shares. Himachal Futuristic Communications plunged 8.23% to Rs 26.75 on 2.90 crore shares. Ispat Industries rose 1.86% to Rs 27.45 on 2.33 crore shares and Tata Teleservices (Maharashtra) (TTML) slipped 0.11% to Rs 43.45 on 1.94 crore shares.
Fertiliser shares rallied on renewed buying. Chambal Fertilisers & Chemicals (up 7.10% to Rs 58.80), Coromandel Fertilisers (up 13.29% to Rs 122.35), Gujarat State Fertilisers & Chemicals (up 4.97% to Rs 242), National Fertilizers (up 4% to Rs 48), Rashtriya Chemicals & Fertilisers (up 2.17% to Rs 61.30) and Nagarjuna Fertilizers (up 11.19% to Rs 60.60) surged.
India's largest private sector iron ore exporter in terms of revenue Sesa Goa jumped 8.15% to Rs 2548. It had surged 7.14% to Rs 2388.20 yesterday, 27 September 2007 on reports that Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton, the world's three largest iron-ore exporters, may increase prices by 30% next year as demand driven by steelmakers in China outpaces growth in supply
Watch and jewellery maker Titan Industries rose 1.10% to Rs 1470. The company expects FY 2008 profit to rise by at least 50%. Revenue is expected at Rs 3150 crore as compared with March 2007 revenue of Rs 2140 crore. Titan expects to sell 10 million watches this fiscal year with nine million of them in India
NIIT Technologies gained 5.77% to Rs 353 on reports that the company is in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Promoters currently hold 40% stake in NIIT Technologies.
IFCI soared 7.70% to Rs 99.90 on reports that it has shortlisted eight bidders for the sale of its 26% stake including consortia led by Wilbur L Ross and Shinsei Bank. As many as 10 bidders had applied earlier this month. The identity of the bidders that have been left out of the race is not known.
DLF gained 2.89% to Rs 763. As per reports it will apply for telecom licence by today, 28 September 2007, to become the fourth real estate company to have applied for the same purpose. IndiaBulls Real Estate, Unitech and Parsvnath Developers are the others.
Emkay Share & Stock Brokers jumped 10% to Rs 145.60 after its 100% subsidiary - Emkay Insurance Brokers received licence from the Insurance Regulatory and Development Authority (IRDA) in terms of sub section (1) of Section 42 D of the Insurance Act, 1938 to act as a direct insurance broker. The company made this announcement after market hours on 27 September 2007.
Brady & Morris Engineering Company surged 20% to Rs 191.20 after its board of directors of at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.
WH Brady & Company jumped 10% to Rs 159.70 after is board of directors at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.
United Breweries was up 0.58% to Rs 382. Its board approved raising upto Rs 425 crore by issuing equity shares to the existing equity shareholders of the company on rights basis. The other terms regarding rights issues will be decided by a committee of directors.
Arvind Mills galloped 5.67% to Rs 61.50 after its board approved issue of 5.06 crore convertible warrants to the founders of the company at Rs 52 per share. Post issue, the shareholding of the promoters in the company will increase to 46.77% from 33.90% at present.
Cairn India rose 3% to Rs 181.40 on reports that it made new oil find in one of its exploration wells in the Ravva field off India's east coast.
Deccan Aviation declined 1.78% to Rs 146 after it announced today, 28 September 2007, that it has reported a net loss for the quarter to June 2007.
State Trading Corporation of India plunged 5% to Rs 341.90. It had lost 5% to Rs 359.85 yesterday, 27 September 2007 after its board of directors at its meeting held on 26 September 2007 deferred recommendation of bonus shares to the next board meeting. The company made this announcement after market hours on 26 September 2007.
Stone India jumped 6.59% to Rs 148 after it executed a technical collaboration agreement for producing 180 kilovolt-amps auxiliary power converter for Indian Railways.
Atlanta galloped 10% at Rs 346.70 after Sebi allowed the firm to restructure its capital to raise funds for expansion. Securities and Exchange Board of India (Sebi) has allowed the company conversion of warrants and listing of shares issued on conversion. Earlier in February 2007, Sebi had asked the promoter group, which comprises 16 entities, of Atlanta, not to deal in Atlanta scrip.
Centurion Bank of Punjab moved up 3.12% to Rs 44.65 after Reserve Bank of India allowed foreign investors to buy further shares in the bank as their holding went below the caution limit.
Virat Crane Industries jumped 10% at Rs 21.85 after its subsidiary Durga Dairy tied-up with Walmart to supply branded ghee to retail stores. So far, Durga Dairy has entered into similar alliances with major retail players like Reliance Retail, Trinetra, Gaint, Spencers, Foodworld, Subhiksha and Metro.
Rallis India surged 5.12% to Rs 415 after it sold 31 acres of land to R R Mega Property Developers.
Hinduja TMT rose 1.60% to Rs 437 after company said it is actively considering to apply for unified telecom license. It is in process of changing its name to Hinduja Ventures
Core Projects & Technologies rose 0.84% to Rs 190.40. Its board approved acquisition of virtual learning of Azzuri Communications, UK. The board has also approved acquisition of 100% equity stake in Hamlet Computer Group, UK. Also the company has decided to sign share purchase agreement for acquisition of 100% equity stake in KC Management Group, US.
Financial Technologies India galloped 6.06% to Rs 2760 after Merrill Lynch and Citigroup acquired a 5% stake each in its unit, Multi Commodity Exchange of India.
As per market data, marketwide rollover from September 2007 derivatives contracts to October 2007 contracts was 84% as compared to rollover of 82.30% from August 2007 contracts to September 2007 contracts. Nifty rollover from stood at 71% as compared to rollover of 70% from August 2007 contracts to September 2007 contracts.
European markets, which opened after Indian market were trading lower today, 28 September 2007. France's CAC (down 0.39% to 5,711.11), Germany's DAX (down 0.11% to 7,844.94) and UK's FTSE 100 (down 0.84% to 6,431.90) edged lower.
Asian markets, which opened before Indian market were trading mixed today, 28 September 2007. South Korea's Seoul Composite (up 0.06% at 1,946.80), Shanghai Composite (up 2.64% to 5,552.30), and Hong Kong's Hang Seng (up 0.29% to 27,142.47) rose.
Singapore's Straits Times (down 0.22% at 3,706.77), Japan's Nikkei (down 0.28% at 16,785.69) and Taiwan's Taiwan Weighted (down 0.02% at 9,411.95) slipped.
US stocks extended their gains yesterday, 27 September 2007 with a moderate advance as investors weighed fresh economic data, including a sharp drop in new home sales, for clues to whether more interest rate cuts are in the offing. The Dow Jones industrial average rose 34.79 points, or 0.25%, to 13,912.94. It is now 87 points below its record close of 14,000.41 set on 19 July 2007. Broader indexes also advanced. The Standard & Poor's 500 index rose 5.96 points, or 0.39%, to 1,531.38, and the technology-heavy Nasdaq Composite index rose 10.56 points, or 0.39%, to 2,709.59.
Crude oil extended gains for a third day on Friday, 28 September 2007 to above $83 a barrel, nearing its record high as a weak dollar and pre-winter supply worries fuelled fund buying. US crude for November delivery rose 30 cents to $83.18 a barrel Oil is recovering from a profit-taking dip earlier this week that pulled prices off their $83.90 peak. London Brent crude rose 30 cents to $80.33 a barrel.
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