Saturday, March 08, 2008
ndian markets opened the day on a low note tracking weak cues from the global markets. Major Asian markets tumbled down due to dented confidence in the US as worries creep up that economy is near recession. Choppy sessions were seen very time market would make attempt to recover the lost gains. All sectoral indices slipped in red with Banking, power and realty stocks worst hit. Reliance Energy was biggest loser from the Sensex pack after board approved for Buy back of shares. Indices slipped further as Inflation rose 5.02% in 12 months to 23 February 2008, higher than the previous week's rise of 4.89%. The annual inflation rate was 6.20% during corresponding week of previous year. Concerns on political front also weighed on the market after CPM renewed its threat on the UPA government saying that the ruling coalition?s future depended on how it took the call on pursuing Indo-US nuclear deal. Meeting is to be held on 15th of this March and outcome of this would see some direction for the market. Even mid and small caps hit badly compared to front line indices. European markets started in red.
Sensex is trading down by 781 points at 15761. Restricting the gains are Rel Energy (1300,-11percent), Bajaj Auto (1913,-10 percent), ICICI BANK (874,-9 percent) and Hindalco (191,-8 percent).
NIIT Technologies has entered into a strategic partnership with Ramco Systems, a global provider of innovative software products and services. NIIT Technologies' recently launched its new paradigm offering, 'Software as a Service' (SaaS), which will deliver process based application solutions through an innovative, business transaction-based, SLA driven and highly secure delivery model. The company has gone live with its procurement solution, procure easy which is fast gaining traction. As the SaaS is relatively very new it would take some time to deliver things and also the approachable market for this type of platforms is very high. NIIT Tech has been facing some problems from the Room solutions revenues and also from the Adecco JV.
Technically Speaking:- Indices started the day on a weak note and slipped further down as the sessions progressed. Sensex made an intraday high of 16212 and low of the day at 15690 levels. Declines are edging their way ahead then the Advances. Declines are 2415 against Advances of 149. Volumes have been extremely low as it churned around Rs 2771 cr so far. Close below 15800 can take the sensex upto 14000 levels.
Steepest weekly decline since May 2006.
Spooked by falling global markets and higher-than-estimated inflation figures, Indian markets on Friday plunged to their steepest weekly decline since May 2006, shaving off Rs 2,08,361 crore in market capitalisation.
The outlook for next week also looks bleak with stocks in Europe (which opens in the latter half of trading hours on the Indian markets) and US stock futures falling on concern that credit-market losses will deepen for financial companies and an employment report may show that the US has slipped closer to recession.
With the dollar falling to its weakest in three years against the Japanese yen, foreign funds, which have used the cheap Japanese currency to buy stocks in emerging markets like India, are under pressure, said dealers.
The Bombay Stock Exchange’s (BSE’s) 30-share Sensex fell 566.56 points, or 3.42 per cent, to close at 15,975.52 points, its lowest level since September 18, 2007. The 50-share Nifty index of the National Stock Exchange closed for the week at 4,771.6 points, lower 149.8 points, or 3.04 per cent.
Real estate, power and bank stocks were the worst hit in Friday’s mayhem.
With Friday’s fall, the Sensex has lost 4,897.81 points or 23 per cent from its peak on January 8 of 20,873. This week alone has seen the index falling by 1,603.2 points, or 9 per cent.
This is the biggest weekly loss since May 15 to 19, 2006, when the Sensex lost 10.96 per cent (1,346.50 points). This is also the biggest post-budget weekly fall for the benchmarks.
Foreign institutional investors (FIIs) continued to be net sellers throughout the week. In March so far, they have net-sold equities up to Rs 35,000 crore. Domestic institutional investors bought Rs 20,000-odd crore this month, but could not counter FII selling pressure.
Market breadth remained extremely weak with only 295 stocks advancing against 2,384 stocks declining.
160 stocks hit the lower circuit in Friday’s trading session with only six stocks in the upper circuit, reflecting the absence of buyers in the market.
Small- and mid-cap stocks suffered the most. This week, the small-cap index has fallen 8.5 per cent or 818.34 points and the mid-cap index shed 566.21 points or 7.37 per cent.
The Hang Seng (down 841.4 points or 3.6 per cent), Nikkei 225 (down 432.62 points or 3.27 per cent) and Taiwan Weighted (down 127.26 points or 1.47 per cent) were deep in the red.
Key American indices, the Dow Jones Industrial Average (down 214.6 points or 1.75 per cent) and S&P 500 index (down 29.36 points or 2.2 per cent) had a dismal trading session on Thursday after news that Thornburg Mortgage Inc, a mortgage lender, was in default after failing to meet creditor demands for more upfront cash.
"The market is reacting to any bad news on the global front. Purely on the basis of fundamentals, Indian markets are in a buying zone. A lot of large caps are now moving towards value. Markets have factored in a slowdown in corporate earnings and hence that is not likely to affect the market sentiment in a significant way," said Amar Ambani, Vice President (Research), India Infoline.
Via Business Standard
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India Income Tax Ready Reckoner
Rural Electrification IPO Allotment Status
Budget Impact Analysis
Monthly Investment Picks
India Retail Sector
India Budget Analysis
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
7/3/2008 531223 ANJANI SYNTH ARVIND MULRAJ UDESHI S 95000 57.97
7/3/2008 505185 BOSCH CHA SY HITEN A SHETH HUF B 336000 643.00
7/3/2008 505185 BOSCH CHA SY GAGANDEEP CREDIT CAPITAL PVT. LTD. S 336000 643.00
7/3/2008 508918 GREYCELLS EN PRIME BROKING CO INDIA LTD ACPWM B 30000 221.24
7/3/2008 532951 GSS AMERICA MBL AND COMPANY LIMITED B 78632 468.66
7/3/2008 532951 GSS AMERICA H.J.SECURITIES PVT.LTD. B 205382 467.95
7/3/2008 532951 GSS AMERICA TRIPLET TRADERS PVT LTD B 148203 466.38
7/3/2008 532951 GSS AMERICA B.K. SHAH CO. B 335488 469.62
7/3/2008 532951 GSS AMERICA CROSS BORDER INVESTMENTS PVT LTD B 650000 425.00
7/3/2008 532951 GSS AMERICA MBL AND COMPANY LIMITED S 78632 470.60
7/3/2008 532951 GSS AMERICA MANGALA SHRIMAL S 67000 427.65
7/3/2008 532951 GSS AMERICA NAGARJUN VALLURIPALLI S 125000 440.27
7/3/2008 532951 GSS AMERICA H.J.SECURITIES PVT.LTD. S 205382 468.12
7/3/2008 532951 GSS AMERICA TRIPLET TRADERS PVT LTD S 148203 491.03
7/3/2008 532951 GSS AMERICA B.K. SHAH CO. S 335029 470.19
7/3/2008 532951 GSS AMERICA INDIA DIVERSIFIED MAU LTD S 650000 425.00
7/3/2008 530049 JJ EXPORTER PACIFIC CORPORATE SERVICES LTD S 310384 34.99
7/3/2008 532950 MANJUSHREE N D NISSAR B 104574 27.12
7/3/2008 532950 MANJUSHREE N D NISSAR S 104574 27.15
7/3/2008 526169 MULTIBASE 1 SAK TECHNOLOGIES LIMITED S 116000 30.50
7/3/2008 532722 NITCO TILES PRASAM TRADING AND FINANCE PRIVATE LIMITED B 314374 255.00
7/3/2008 526415 OK PLAY INDI B K KHULLAR AND CO B 43000 58.80
7/3/2008 532675 PRITHVI INFO BSMA LTD. B 115000 217.12
7/3/2008 513436 SHAH ALLOY L PACIFIC CORPORATE SERVICES LTD S 122033 39.75
7/3/2008 523606 SIKA INTERP BHAGWATPRASAD MANUPRASAD THAKAR B 9627 63.68
7/3/2008 523606 SIKA INTERP RAJASHREE N. MEHTA B 9081 65.07
7/3/2008 523606 SIKA INTERP RAJIV ARORA S 9816 73.17
7/3/2008 523606 SIKA INTERP BHAGWATPRASAD MANUPRASAD THAKAR S 11427 65.60
7/3/2008 523606 SIKA INTERP RAJASHREE N. MEHTA S 9081 70.64
7/3/2008 521180 SUPER SPININ PACIFIC CORPORATE SERVICES LTD S 345740 14.31
7/3/2008 532948 TULSI EXTRU N D NISSAR B 125271 81.61
7/3/2008 532948 TULSI EXTRU N D NISSAR S 125271 81.73
7/3/2008 532156 VAIBHAV GEM PACIFIC CORPORATE SERVICES LTD S 150000 83.00
7/3/2008 519602 VMF SOFT TEC V RAMESH RAJU S 50000 3.33
CMP: Rs 773
Target Price: Rs 1,038
HDFC Securities has given a ‘buy’ on Tata Steel on expectations of economies of scale and growing steel demand. According to the brokerage, the valuations are compelling with increased integration milestone achievements and a bullish outlook on steel prices. It expects the demand for steel in Asia and Europe to grow at 4.8% and 1.4% compound annual growth rate (CAGR) respectively.
“Steel prices are expected to remain firm due to high raw material prices and rising supply constraints. Supply constraints in terms of poor port facilities at Australia and Brazil and high freight rates, will also keep the prices firm,” says the brokerage in a note to its clients.
Additionally, the synergies from the Corus acquisition is expected to start reflecting from financial year 2009, coupled with a reduction in concerns on financial leverage. Key risk factors include increased environmental awareness and exchange rates movements.
CMP: Rs 697
Target Price: Rs 1,200
Broking house JP Morgan has initiated coverage with an ‘overweight’ on Allied Digital (ALDS). “ALDS is a play on the strong domestic demand for IT services with more than 90% of its revenues coming from India. We expect the stock to deliver more sedate gains over the next 9-12 months, backed by high growth potential and management’s decent execution track record,” the brokerage said.
Indian domestic IT services is a $5 billion industry. It is expected to grow at a CAGR of 23% over the next five years to over $10 billion. JP Morgan believes the domestic IT exposure shields ALDS from concerns about a US slowdown, rupee appreciation and expiry of STPI tax benefits in FY10. The key drivers would be strong financial performance and possible acquisitions, using a part of the IPO proceeds, along with increased capacity utilisation of its remote IT management centres.
CMP: Rs 2,026
Target Price: Rs 2,529
Citigroup has reiterated its ‘buy’ on BHEL, but with a downward revision in price target as it feels that its operating leverage which is largely over and the cost reduction efforts are working against it. “BHEL expanded EBIT margins from 0% in FY01 to 18% in FY07 and right-sized its workforce from 75,000 to 42,000 in four successive voluntary retirement schemes (VRS) from 1999 to 2003, cutting down operational costs and benefited from operating leverage,” said the brokerage in a note to clients.
Capital goods companies significantly expand margins when there is spare capacity and sales grow at a rapid pace benefiting from operating leverage.
“We believe that there is great likelihood of BHEL’s earning before interest tax (EBIT) margins peaking in FY08E. Once this happens, earnings growth has to largely track sales growth and will not benefit from operating leverage benefits,” it adds. The brokerage, however, terms BHEL its top pick in the Indian electric equipment rated universe.
CMP: Rs 1698
Target Price: NA
Merrill Lynch has retained its ‘sell’ recommendation on Container Corporation of India on not so attractive valuations, given muted growth prospects. However, the company does have some huge capex plans.
“We are raising earnings per share (EPS) driven by upward revision to volumes and lower margin erosion. Still, we expect muted 12% EPS compound annual growth rate (CAGR) over FY08-10, compared with 9% growth this year,” said the brokerage. The company is yet to finalise its scaled up capex plans of Rs 40 billion (from Rs 20 billion), to be spent over the next three years.
The brokerage believes that this will be largely directed towards initiatives across the value chain and through joint ventures, which will protect existing volumes and reduce project risk. However, the uncertainty and lag effect of benefits could impact stock performance. It believes that the stock is not attractively valued on traditional parameters, even though the stock trades at 13 times its one-year forward PE multiple.