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Tuesday, August 19, 2008

Stocks: Cheap but best avoided


They seem to be available at a bargain, and hence, are difficult to resist. However, we at ETIG found that it’s best to avoid them. Read on to find out more about these hot potatoes.


When it comes to investment philosophy, the world is split down the middle. For, while one school of thought believes in “buying low and selling high” , there’s a big fan-following for the alternative “buy high and sell higher” . The former school generally compares the current valuations of a stock with its historical valuations and those of its peers to find out whether a stock is under-, fairly- or overly-valued . Once a stock is found to be undervalued, such investors then go and buy it, assuming that in the long run, the stock will rise to its fair valuation.

Although not as popular as the first one, the other school of thought believes in just the opposite. Being believers in the market’s efficiency, this group assumes that if the market values a stock higher than its peers or vice versa, there have to be valid reasons for it. So, the reason for a stock trading at higher valuations is that the market expects it to do better than its peers in the future and hence, is prepared to pay a premium for it.

And if a stock is available cheap, it is probably headed for dismal times. Therefore, we will be better off not questioning the judgment of the market. But why isn’t this investing philosophy very popular? The answer is simple. Human psychology is such that in the market, as even in our daily lives, we keep hunting for bargains, forgetting that “only rhetoric comes cheap, evidence is more dear.”

Notwithstanding the recent recovery attempts, the broader market in India has been totally battered and bruised out of shape. As a result, valuations of a large number of fairly good companies look very attractive — both as compared to their historical valuations and some of their peers.

But if we go by the second school, there’s every reason to believe that if these companies have found themselves to be out of favour with the market, their near-term future will probably not be that bright.
In order to help readers stay away from these, ETIG dug deep into the past five years’ data and ferreted out stocks, which although cheap, are best avoided.

In this analysis, we restricted ourselves to the BSE 500. Within that, we looked at stocks that are trading at least at a 50% discount to their five-year average P/E (priceto-earnings ) and P/BV (price-to-book value) multiple

This gave us around 45 stocks, out of which, we chose eight stocks across sectors. All of these look attractive at the first look, but a thorough analysis makes it absolutely clear as to why they are where they are. In fact, a few of these are available at historically high dividend yields as well, which in normal times should have made them that much more attractive.

NIIT Technologies: With the fanfare surrounding its spin-off from NIIT long gone, NIIT Technologies continues to find it difficult to create a niche for itself in the highly competitive IT services business. That it gets over 45% of its revenues from the BFSI (banking, financial services and insurance) space doesn’t help either, as a global financial turmoil means that shortterm growth is very challenging. Operating margin for the quarter ended June ’08 has taken a hit and is lower on both quarteron-quarter (q-o-q ) and year-on-year (y-o-y ) basis — validating these fears.

Mangalore refinery: The outlook for the entire petroleum refining industry, which enjoyed rising refining margins in the past few years, is slowly but surely turning negative. Moreover, the only product that would have allowed it to command a premium in the near future — Euro Grade V fuels — is still a long way off from flowing out of its refineries. It will take at least two years to complete Mangalore Refinery and Petrochemicals’ (MRPL) refinery upgrade and petrochemical projects. And since it’s now operating at nearly 130% of its rated capacity, even volume-led growth will be difficult to come by.

PFIZER: Over the past five years, Pfizer’s sales have witnessed a dismal compound annual growth rate (CAGR) of just 1.14%. It’s evident the company has concentrated more on protecting its margins, rather than improving its sales volumes. At the same time, a large chunk of its earnings has come from ‘other income’ by selling assets and real estate. This, and not necessarily higher efficiency, has been a big reason for the big jump in profit that the company has posted in recent times. In fact, Pfizer, as most other pharma MNCs, adopts a very conservative policy in India, as it has a limited product pipeline.

Hotel Leelaventure: A humongous over-dependence on its Bangalore property, which contributes almost 50% of its EBITDA, makes Hotel Leelaventure a very tricky bet. With a large number of new premium hotels coming up in the region, there’s now almost a glut.

This will almost certainly drive down its average room rate (ARRs). Add to it the fact that its biggest customer — the IT sector — is now going through a very challenging phase and you have all the reasons to question the wisdom of buying this stock. Moreover, with a large amount of debt on its books, Hotel Leelaventure may find it difficult to sail through the upcoming economic slowdown. In fact, a much bigger Achilles heel is the large amounts of land that it has recently acquired at exorbitantly high prices.

Danger Zone

HCL Infosystems : HCL Infosystems operates in an overly competitive, as well as highly price-sensitive segment of computer hardware and office automation products. While in high-end products, it faces tough competition from multinationals like HP, IBM and Lenovo, when it comes to low-end products like desktop computers, local assemblers, with their cheap products, pose a big threat.

As a result, HCL’s operating margins have been declining consistently for the past four years and now, even sales are stagnating, as is reflected in its March ’08 quarterly results. The business model of its other sources of revenue, networkrelated hardware, is not very competitive and may not be sustainable in the long run.

Shree Cement: Traditionally known for being a financially conservative company, Shree Cement has raised a lot of debt in the past three years in order to fund its aggressive expansion plans. Its debt-to-equity ratio has touched 2 for the first time in the company’s history. In an era of rising interest rates, this means bad news, if seen in conjunction with stagnant cement prices.

The company reported an over 900 basis points decline in operating margin during June ’08 quarter, while its interest coverage ratio declined to 7 from nearly 30 a year ago. The company reported a marginal decline in net profit during the first quarter, even though its topline grew by 40% on account of higher volumes. This trend is expected to worsen further in the forthcoming quarters, putting further pressure on the stock.

Laxmi machine works : Being India’s leading textile machinery manufacturer, Laxmi Machine Works was the biggest beneficiary of an investment boom in the domestic textile industry, following the global phase-out of multi-fibre agreement in January ’05. With the boom over, projects are now difficult to come by, which has put a huge pressure on the company .

Its net sales and net profits declined for the first time in June ’08, possibly indicating the beginning of a very challenging phase. In the first quarter of FY09, the company’s net sales fell by 5%, while net profit was down by 3% over the corresponding period last year. Future outlook seems even gloomier if you consider the fact that if it were not for a generous 45% rise in other income, the company’s net profit would have declined by 20% during the quarter.

Maruti suzuki: With interest rates heading northwards and economic growth decelerating faster than expected, Maruti is probably headed for one of its most challenging phases. The company reported a marginal 0.1% growth in domestic sales during July ’08, against 22% volume growth in April ’08 and 12% growth during the first quarter. At the same time, input costs are rising steadily as prices of steel and power are continuously trending up. This is squeezing the company’s profitability from both sides.

In the first quarter, the company’s operating margin was down by nearly 500 basis points and profit declined by 7%. This was despite a 21% growth in net sales and 47% growth in other income during the period. Going forward, Maruti’s stranglehold over the small- and medium-car segment, which accounts for a bulk of its revenues and profits, is expected to loosen considerably as a result of new products from competitors like Tata’s Nano. All this puts India’s largest car maker on a sticky wicket.


via ECONOMIC TIMES

Bilpower


Bilpower

BSE Bulk Deals to Watch - Aug 19 2008


Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
19/8/2008 531223 ANJANI SYNTH NARENDRA VALLABHJI BAHUVA B 99578 50.26
19/8/2008 531223 ANJANI SYNTH TEJASH JAYANTILAL SHAH B 77000 51.18
19/8/2008 531223 ANJANI SYNTH NARENDRA VALLABHJI BAHUVA S 105278 49.71
19/8/2008 531223 ANJANI SYNTH BHAVANA N. MAHIDA S 77000 51.20
19/8/2008 517973 DMC INTER J A FINANCIAL AND MANAGEMENT CONSULTANT PVT LTD B 20900 8.15
19/8/2008 500170 GTN INDUS K S BHUTORIA HUF B 100000 15.32
19/8/2008 500170 GTN INDUS SAROJ BHUTORIA S 100000 15.32
19/8/2008 516078 JUMBO BAG LT M P PURUSHOTHAMAN B 57629 39.69
19/8/2008 502933 KATARE SPG. KARAN HADVANI B 14850 27.17
19/8/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 130854 23.71
19/8/2008 531602 KOFF BR PICT HITESH MALUKCHAND SHAH B 25000 23.00
19/8/2008 531602 KOFF BR PICT PRAVIN DHARAMSHI GALA S 57000 22.86
19/8/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 128241 23.16
19/8/2008 531602 KOFF BR PICT DEEPAL CORPORATION S 103039 22.54
19/8/2008 526407 RIT PRO IND GIRISHBHAI CHANDULAL SANGHVI B 71733 117.82
19/8/2008 526407 RIT PRO IND GIRISHBHAI CHANDULAL SANGHVI S 69956 118.77
19/8/2008 532886 SEL MANUF MARWADI SHARES AND FINANCE LIMITED B 149465 299.78
19/8/2008 532886 SEL MANUF OPG SECURITIES PVT LTD B 480507 299.29
19/8/2008 532886 SEL MANUF B K SHAH CO B 208122 298.02
19/8/2008 532886 SEL MANUF MARWADI SHARES AND FINANCE LIMITED S 149465 299.33
19/8/2008 532886 SEL MANUF OPG SECURITIES PVT LTD S 480507 299.93
19/8/2008 532886 SEL MANUF B K SHAH CO S 208118 298.97
19/8/2008 500295 SESA GOA LTD LA COMP FIN EDMOND DE ROTHSCHILD BANQUE AC SAINT HONORE INDE 1 S 300000 165.42
19/8/2008 530549 SHILPA MEDIC PIVOTAL SECURITES PVT. LTD. B 113065 67.92
19/8/2008 532348 SUBEX LTD MBL AND COMPANY LIMITED B 180538 113.21
19/8/2008 532348 SUBEX LTD MBL AND COMPANY LIMITED S 180538 113.15
19/8/2008 533011 VISHAL INFO MATRIX EQUITRADE PVT LTD B 569718 295.04
19/8/2008 533011 VISHAL INFO MARWADI SHARES AND FINANCE LIMITED B 67113 295.85
19/8/2008 533011 VISHAL INFO EUREKA STOCK AND SHARE BROKING SERVICES LTD. B 74123 292.17
19/8/2008 533011 VISHAL INFO OPG SECURITIES PVT LTD B 1222163 292.82
19/8/2008 533011 VISHAL INFO H.J.SECURITIES PVT LTD. B 322743 288.81
19/8/2008 533011 VISHAL INFO MATRIX EQUITRADE PVT LTD S 569718 295.26
19/8/2008 533011 VISHAL INFO MARWADI SHARES AND FINANCE LIMITED S 67113 296.52
19/8/2008 533011 VISHAL INFO EUREKA STOCK AND SHARE BROKING SERVICES LTD. S 74123 292.40
19/8/2008 533011 VISHAL INFO OPG SECURITIES PVT LTD S 1222163 292.88
19/8/2008 533011 VISHAL INFO H.J.SECURITIES PVT LTD. S 322743 289.04

Vishal Information Technologies Fun


Quantity Traded
10248867

Deliverable Quantity (gross across client level)
197735

% of Deliverable Quantity to Traded Quantity
1.93

NSE Bulk Deals to Watch - Aug 19 2008


Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
19-AUG-2008,SELMCL,SEL Manufacturing Company,AMBIT SECURITIES BROKING PVT. LTD.,BUY,109805,297.88,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,B K SHAH CO KETAN BHAILAL SHAH,BUY,234200,298.76,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,DINESH MUNJAL,BUY,90803,302.50,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,HARBUX SINGH SIDHU,BUY,80623,295.18,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MANIPUT INVESTMENTS PVT LTD,BUY,118284,298.16,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MARWADI SHARES AND FINANCE LIMITED,BUY,184167,298.09,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MBL & COMPANY LTD.,BUY,119032,301.10,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,TRANSGLOBAL SECURITIES LTD.,BUY,173753,302.69,-
19-AUG-2008,SUBEX,Subex Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,255837,112.47,-
19-AUG-2008,SUBEX,Subex Limited,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,BUY,234071,114.98,-
19-AUG-2008,SUBEX,Subex Limited,MBL & COMPANY LTD.,BUY,268839,113.14,-
19-AUG-2008,SUBEX,Subex Limited,NAMAN SECURITIES & FINANCE PVT LTD,BUY,318416,111.18,-
19-AUG-2008,SUBEX,Subex Limited,PACE FINANCIAL SERVICES,BUY,175001,116.03,-
19-AUG-2008,SUBEX,Subex Limited,TRANSGLOBAL SECURITIES LTD.,BUY,182794,114.45,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,ANKITA VISHAL SHAH,BUY,4002,38.72,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,B K SHAH CO KETAN BHAILAL SHAH,BUY,6607,34.49,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,NIKUNJ K SHAH,BUY,8009,33.53,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,PRAGATI PAPER MILLS LTD,BUY,4035,37.95,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,BUY,10042,40.50,-
19-AUG-2008,VITLINFO,Vishal Information Techno,AMBIT SECURITIES BROKING PVT. LTD.,BUY,92328,291.70,-
19-AUG-2008,VITLINFO,Vishal Information Techno,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,301701,291.67,-
19-AUG-2008,VITLINFO,Vishal Information Techno,CHOKHANI SECURITIES LTD,BUY,185167,290.39,-
19-AUG-2008,VITLINFO,Vishal Information Techno,CPR CAPITAL SERVICES LTD.,BUY,98673,296.53,-
19-AUG-2008,VITLINFO,Vishal Information Techno,DINESH MUNJAL,BUY,272175,296.52,-
19-AUG-2008,VITLINFO,Vishal Information Techno,DIPAN MEHTA SHARE & STOCK BROKERS PVT. LTD.,BUY,58081,286.42,-
19-AUG-2008,VITLINFO,Vishal Information Techno,FIN BRAINS SECURITIES (INDIA) LTD.,BUY,95093,294.81,-
19-AUG-2008,VITLINFO,Vishal Information Techno,G RAMAKRISHNA,BUY,141000,298.21,-
19-AUG-2008,VITLINFO,Vishal Information Techno,G.S.V. COMMODITIES PRAVITE LIMITED,BUY,55591,298.91,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HARBUX SINGH SIDHU,BUY,326323,299.61,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HARSHA RAJESHBHAI JHAVERI,BUY,56036,267.17,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HOTEL LIBRARY CLUB P LTD,BUY,64992,296.48,-
19-AUG-2008,VITLINFO,Vishal Information Techno,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,BUY,259095,297.40,-
19-AUG-2008,VITLINFO,Vishal Information Techno,MANIPUT INVESTMENTS PVT LTD,BUY,156756,296.11,-
19-AUG-2008,VITLINFO,Vishal Information Techno,MARWADI SHARES AND FINANCE LIMITED,BUY,77834,294.96,-
19-AUG-2008,VITLINFO,Vishal Information Techno,NAMAN SECURITIES & FINANCE PVT LTD,BUY,56896,294.66,-
19-AUG-2008,VITLINFO,Vishal Information Techno,OPG SECURITIES PVT. LTD.,BUY,65382,290.77,-
19-AUG-2008,VITLINFO,Vishal Information Techno,PRASHANT JAYANTILAL PATEL,BUY,89512,288.39,-
19-AUG-2008,VITLINFO,Vishal Information Techno,R APPALA RAJU,BUY,60000,297.72,-
19-AUG-2008,VITLINFO,Vishal Information Techno,R.M. SHARE TRADING PVT LTD,BUY,313352,289.12,-
19-AUG-2008,VITLINFO,Vishal Information Techno,RAMPRASAD PURSHOTTAM KABRA HUF,BUY,60188,296.27,-
19-AUG-2008,VITLINFO,Vishal Information Techno,TRANSGLOBAL SECURITIES LTD.,BUY,101476,294.67,-
19-AUG-2008,VITLINFO,Vishal Information Techno,YUVAK SHARE TRADING PVT LTD,BUY,233608,293.32,-
19-AUG-2008,OCTAV,Octav Investments Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,19145,80.86,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,AMBIT SECURITIES BROKING PVT. LTD.,SELL,109305,298.65,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,B K SHAH CO KETAN BHAILAL SHAH,SELL,234426,299.15,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,DINESH MUNJAL,SELL,90803,303.70,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,HARBUX SINGH SIDHU,SELL,80623,295.96,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MANIPUT INVESTMENTS PVT LTD,SELL,118284,298.64,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MARWADI SHARES AND FINANCE LIMITED,SELL,184167,298.61,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,MBL & COMPANY LTD.,SELL,119038,300.72,-
19-AUG-2008,SELMCL,SEL Manufacturing Company,TRANSGLOBAL SECURITIES LTD.,SELL,173753,302.97,-
19-AUG-2008,SUBEX,Subex Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,255837,112.67,-
19-AUG-2008,SUBEX,Subex Limited,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,SELL,230571,115.19,-
19-AUG-2008,SUBEX,Subex Limited,MBL & COMPANY LTD.,SELL,268839,113.28,-
19-AUG-2008,SUBEX,Subex Limited,NAMAN SECURITIES & FINANCE PVT LTD,SELL,292328,110.81,-
19-AUG-2008,SUBEX,Subex Limited,PACE FINANCIAL SERVICES,SELL,89480,117.47,-
19-AUG-2008,SUBEX,Subex Limited,TRANSGLOBAL SECURITIES LTD.,SELL,182794,114.61,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,ANKITA VISHAL SHAH,SELL,1001,43.77,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,B K SHAH CO KETAN BHAILAL SHAH,SELL,4212,32.97,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,NIKUNJ K SHAH,SELL,6882,37.97,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,PRAGATI PAPER MILLS LTD,SELL,4036,36.22,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,THANGAMUTHU. S. C,SELL,4000,44.23,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,VAISHNAV RAJESH CHANDRAKANT,SELL,20000,35.37,-
19-AUG-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,SELL,1074,34.49,-
19-AUG-2008,VITLINFO,Vishal Information Techno,AMBIT SECURITIES BROKING PVT. LTD.,SELL,92328,292.02,-
19-AUG-2008,VITLINFO,Vishal Information Techno,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,301701,292.31,-
19-AUG-2008,VITLINFO,Vishal Information Techno,CHOKHANI SECURITIES LTD,SELL,185167,292.31,-
19-AUG-2008,VITLINFO,Vishal Information Techno,CPR CAPITAL SERVICES LTD.,SELL,98673,296.68,-
19-AUG-2008,VITLINFO,Vishal Information Techno,DINESH MUNJAL,SELL,272675,296.56,-
19-AUG-2008,VITLINFO,Vishal Information Techno,DIPAN MEHTA SHARE & STOCK BROKERS PVT. LTD.,SELL,58081,286.53,-
19-AUG-2008,VITLINFO,Vishal Information Techno,FIN BRAINS SECURITIES (INDIA) LTD.,SELL,95093,295.18,-
19-AUG-2008,VITLINFO,Vishal Information Techno,G RAMAKRISHNA,SELL,141000,292.78,-
19-AUG-2008,VITLINFO,Vishal Information Techno,G.S.V. COMMODITIES PRAVITE LIMITED,SELL,55591,298.01,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HARBUX SINGH SIDHU,SELL,327023,299.57,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HARSHA RAJESHBHAI JHAVERI,SELL,55537,309.27,-
19-AUG-2008,VITLINFO,Vishal Information Techno,HOTEL LIBRARY CLUB P LTD,SELL,64992,296.62,-
19-AUG-2008,VITLINFO,Vishal Information Techno,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,SELL,259095,297.31,-
19-AUG-2008,VITLINFO,Vishal Information Techno,MANIPUT INVESTMENTS PVT LTD,SELL,156756,296.34,-
19-AUG-2008,VITLINFO,Vishal Information Techno,MARWADI SHARES AND FINANCE LIMITED,SELL,77834,295.35,-
19-AUG-2008,VITLINFO,Vishal Information Techno,NAMAN SECURITIES & FINANCE PVT LTD,SELL,56366,295.04,-
19-AUG-2008,VITLINFO,Vishal Information Techno,OPG SECURITIES PVT. LTD.,SELL,65382,291.09,-
19-AUG-2008,VITLINFO,Vishal Information Techno,PRASHANT JAYANTILAL PATEL,SELL,89512,288.68,-
19-AUG-2008,VITLINFO,Vishal Information Techno,R APPALA RAJU,SELL,60000,296.82,-
19-AUG-2008,VITLINFO,Vishal Information Techno,R.M. SHARE TRADING PVT LTD,SELL,313353,289.45,-
19-AUG-2008,VITLINFO,Vishal Information Techno,RAMPRASAD PURSHOTTAM KABRA HUF,SELL,60188,296.59,-
19-AUG-2008,VITLINFO,Vishal Information Techno,TRANSGLOBAL SECURITIES LTD.,SELL,101476,295.49,-
19-AUG-2008,VITLINFO,Vishal Information Techno,YUVAK SHARE TRADING PVT LTD,SELL,234250,293.64,-

Post Session Commentary - Aug 19 2008


The domestic market had shown smart recovery during final trading hours to came off from the day’s low but closed with marginal losses. Market opened on downbeat note tracking weak cues from the global markets and continued to trade lower due to heavy selling over the ground. Weak European markets also added to the negative sentiments. Along with this, fears of more losses from the US mortgage crisis globally mulled over the sentiment. Due to some buying during last half an hour of trade, market managed to pared some of its losses to close with minimal gap. NSE Nifty ended below 4,400 mark and BSE Sensex below 14,600 level. From the sectoral front, most of the indices closed in red and among that, Metal, Consumer Durable, IT and Auto stocks witnessed heavy selling from these baskets. However, Power and Bank stocks were in limelight as were able to gain market favor. The market breadth was negative as 1107 stocks closed in green while 1514 stocks closed in red and 90 stocks remained unchanged.

The BSE Sensex closed lower by 101.93 points at 14,543.73 and NSE Nifty ended down by 24.80 points at 4,368.25. The BSE Mid Caps and Small Cap closed with losses of 15.48 points and 23.87 points at 5,766.32 and 7,012.74 respectively. The BSE Sensex touched intraday high of 14,604.11 and intraday low of 14,368.72.

Lossers from the BSE are ACC Ltd (5.78%), Maruti Suzuki (3.90%), HDFC (3.24%), M&M Ltd (2.56%), Satyam Comp (3.21%), Reliance Com Ltd (2.06%), Bharti Airtel (2.05%), ITC Ltd (2.05%) and Sterlite Indus (1.61%).

The BSE Metal index closed down by 91.37 points at 12,272.80. Lossers are Jai Corp Ltd (4.99%), Sesa Goa Ltd (4.15%), NMDC Ltd (4.09%), Sterlite Indus (1.61%), Ispat Industries (1.56%), and Hindustan Zinc (1.54%).

The BSE Consumer Durables index dropped by 44.92 points at 3,783.26. Major lossers are Videocon Ind (1.89%), Gitanjali Ge (1.35%), Titan Ind (1.05%), Rajesh Export (1.01%) and Blue Star L (0.14%).

The BSE IT index ended lower by 34.12 points at 3,892.26. As Aptech Ltd (3.71%), Satyam Comp (3.21%), HCL Tech (1.97%), I-Flex (1.35%), NIIT Ltd (0.77%) and Moser Bayer (0.37%) closed in negative territory.

The BSE Auto index lost 33.33 points to close at 3,849.33. Major losers are Maruti Suzuki (3.90%), MRF Ltd (1.63%), Ashok Leyland (1.23%), M&M Ltd (1.21%), Exide Ind (0.84%) and Bosch Ltd (0.64%).

The BSE Bank index ended up by 6.81 points at 6,892.18. As ICICI Bank Ltd (2.01%), Bank of Baroda (1.24%), Oriental Bank of Commerce (1.03%), Canara Bank (0.72%), HDFC Bank Ltd (0.59%) and Allahabad Bank (0.24%) closed in positive territory.

The BSE Power index closed higher by 6.76 points at 2,615.11. Gainers are Lanco Infra (2.34%), Reliance Infra (2.26%), GVK Power (2.06%), Suzlon Energy (1.88%), GMR Infra (1.78%), and Siemens Ltd (1.44%).

Market extends losses


Fears of more losses from the US mortgage crisis globally hit domestic bourses today. The market, however, recovered in late trade to end marginally lower. From a recent high, Sensex has lost 960 points, falling for fifth trading session in a row today.

Consumer durable, IT, Auto stocks fell. ACC fell more than 5%. Maruti Suzuki India fell close to 4%. Reliance Industries rose. Reliance Infrastructure spurted.

In Europe, France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down by between 1.35% to 1.8%.

The BSE 30-share Sensex lost 101.93 points or 0.7% to 14,543.73. At day’s high of 14,604.11, the index lost 41.55 points in late trade. At the day’s low of 14,368.72, the Sensex lost 276.94 in mid-afternoon trade.

The S&P CNX Nifty was down 24.8 points or 0.56% to 4,368.25.

Sensex has lost 960.19 points or 6.6% from a recent high of 15503.92 hit on 11 August 2008. The barometer index is down 5,743.26 points or 28.31% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6,663.04 points or 31.41% away from its all-time high of 21,206.77 struck on 10 January 2008.

The BSE clocked a turnover of Rs 3955 crore today as compared to a turnover of Rs 3,847.50 on Monday, 18 August 2008.

Nifty August 2008 futures were at 4401.10, a sharp 32.85-point premium over the spot closing of 4,368.25. NSE's futures & options (F&O) segment turnover rose to Rs 43426.67 crore from Rs 39680.22 crore on Monday, 18 August 2008.

As per provisional figures on BSE, foreign institutional investors sold shares worth Rs 716.35 crore while domestic funds bought shares worth Rs 14.56 crore today, 19 August 2008.

The BSE Mid-Cap index was down 0.27% to 5,766.32 and the BSE Small-Cap index was down 0.34% at 7,012.74.

BSE Teck index (down 1.38% to 3,010.24), BSE Consumer Durables index (down 1.17% to 3,783.26), BSE IT index (down 0.87% to 3,892.26), BSE Auto index (down 0.86% to 3,849.33), BSE Metal index (down 0.74% to 12,272.80), BSE PSU index (down 0.71% to 6,892.73) underperformed Sensex.

BSE Power index (up 0.26% to 2,615.11), BSE Bankex (up 0.1% to 6,892.18), BSE HealthCare index (down 0.01% to 4,266.79), BSE Oil & Gas index (down 0.09% to 9,987.91), BSE Capital Goods index (down 0.22% to 12,062.41), BSE Realty index (down 0.27% to 5,117.50), BSE FMCG index (down 0.7% to 2,162.85), outperformed Sensex.

The market breadth was weak on BSE with 1,107 shares advancing as compared to 1,514 that declined. 90 shares remained unchanged.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 0.16% at Rs 2,221.35. It recovered from the session's low of Rs 2,199.

Consumer durables stocks declined. Asian Star Company (down 6.04% to Rs 1,230.50), Videocon Industries (down 1.89% to Rs 272.75), Lloyd Electric (down 1.7% to Rs 83.65), Titan Industries (down 1.05% to Rs 1,205) and Rajesh Exports (down 1.01% to Rs 49.20) edged lower.

IT stocks declined. Satyam Computer Services (down 3.21% to Rs 405.65), Infosys (down 0.529% to Rs 1,693.55) and Tata Consultancy Services (down 0.2% to Rs 840.10), Wipro (down 0.15% to Rs 431.25) edged lower.

Auto stocks fell. Maruti Suzuki India (down 3.9% to Rs 616.20), Mahindra & Mahindra (down 1.21% to Rs 561.20), Tata Motors (down 0.46% to Rs 423.35) edged lower.

ACC (down 5.78% to Rs 560.05), HDFC (down 3.24% to Rs 2,283.25), Satyam Computer Services (down 3.21% to Rs 405.65), Reliance Communications (down 3.06% to Rs 399.80), Bharti Airtel (down 2.05% to Rs 791.60), edged lower from the Sensex pack.

Reliance Infrastructure (up 2.26% to Rs 994,.30), Hindalco Industries (up 2.08% to Rs 132.35), Hindustan Unilever (up 0.7% to Rs 243.45), HDFC Bank (up 0.59% to Rs 1207.45), NTPC (up 0.5% to Rs 181.40) edged higher from Sensex pack.

India’s second largest cement maker by sales Ambuja Cements fell 0.44% to Rs 79.80. As per reports, Ambuja Cements plans to expand in the south Indian market by transporting the building material by sea route. It is one of the few domestic cement makers having expertise in using sea routes for transporting cement.

India’s largest cigarette maker by sales ITC fell 2.05% to Rs 183.75. The company said on Tuesday, 19 August 2008, its information technology arm has acquired US-based technology firm Pyxis Solutions for an undisclosed sum.

India’s largest commercial bank State Bank of India fell 0.96% to Rs 1,443.80. The bank’s chairman O.P. Bhatt today, 19 August 2008, said a planned strike by bank unions against mergers between state banks was unlikely to hinder its plans to acquire State Bank of Saurashtra. Bhatt also said credit growth this year was much better than last year.

India’s largest private sector bank by net profit ICICI Bank rose 2.01% to Rs 678.35. The company has reportedly sold about $275 million from its credit derivative portfolio in its foreign branches. The transaction, closed a few weeks ago, will enable ICICI Bank to cut its mark-to-market losses, reports suggest.

Reliance Natural Resources clocked the highest volume of 1.59 crore shares on BSE. Vishal Information Technologies (95.14 lakh shares), Ispat Industries (77.15 lakh shares), IFCI (70.56 lakh shares) and Reliance Petroleum (68.38 lakh shares) were the other volume toppers in that order.

Vishal Information Technologies clocked the highest turnover of Rs 278.62 crore on BSE. Reliance Capital (Rs 223.90 crore), Reliance Industries (Rs 152.99 crore) and Reliance Natural Resources (Rs 150.8 crore) and SEL Manufacturing Company (Rs 147.01 crore) were the other turnover toppers in that order.

Most of the Asian markets were trading weak today, 19 August 2008., Japan's Nikkei, Hong Kong's Hang Seng, Taiwan's Taiwan Weighted, Singapore's Straits Times and South Korea's Seoul Composite were down between 0.32% to 2.28%. China's Shanghai Composite rose 1.06%.

US markets slumped yesterday, 18 August 2008, on the prospect of more losses from the mortgage crisis, sending financial stocks on a downward spiral. Shares of Fannie Mae and Freddie Mac lost more than 20% each after Barron's reported that the US Treasury may need to bail out the home finance giants, which could wipe out shareholders.

The Dow Jones industrial average plunged 180.51 points, or 1.55%, to 11,479.39. The S&P 500 index lost 19.60 points, or 1.51%, to 1,278.60, and the Nasdaq declined 35.54 points, or 1.45%, to 2,416.98.

Eveninger -Aug 19 2008


Eveninger -Aug 19 2008

Grey Market Premiums


NU TEK India Ltd. 192 3 to 5

Austral Coke & Projects 196 11 to 13

Resurgere Mines & Minerals 263 to 272 8 to 10

Daily Call - Aug 19 2008


Our markets will open in line with prevailing international market sentiment, which means that the 4362 support in the Nifty will be violated in early trade. That will pave the way for an eventual visit to the 4293 level, which is an imaginary support of the 50 DMA. We saw Call writing happening at the 4400 strike price for August series, which gave an early indication during the day itself of what an influential section of the market thought on the direction of the indices.

Banking stocks, which showed some traction after Thursday's sharp fall could swoon again. I expect real estate, power, metals and telecom companies to yield further ground. IT stocks may relatively outperform. On Monday we had seen the lowest volume in the cash segment in CY 2008. Today's fall may be on larger volumes.

Morning Call - Aug 19 2008


Market Grape Wine :

In House:

Nifty at a support of 4303 and 4350 with a resistance at 4420 and 4450 levels.

Cash: Buy GMR INFRA above 103.50 targets 110 with S/L 98.50.

Cash: Buy SESAGOA above 176.50 targets 184 S/L 173.50.

Future: Sell SUZLON below 135 target 118 with S/L 144

Future: Sell RENUKA below 126 target 116 with S/L 131







Out House:

Markets at a support of 14441 & 14241and resistance at 14786 & 14876 levels .

Buy : Wipro & Satyam at dips

Buy : Infy

Buy : Coreproject

Buy : IBullReal at dips

Buy : IOC & HP

Buy : GHCL at dips

Buy : Aftek at dips

Buy : SBIN

Buy : HLL & ITC at dips

Dark Horse : Sbin , RIL , GHCL , IBullReal , HP , IOC , Essaroil & HLL




Market Outlook - Aug 19 2008


Market Outlook - Aug 19 2008

Today's Pick - SCI


We recommend a sell in Shipping Corporation of India (SCI) from a short-term perspective. It is evident from the charts of the Shipping Corporation of India that it has been on a medium-term downtrend from its May high of Rs 300. The stock declined below the 200-day moving average in late June and has not crossed this line since then.

On August 18, the stock fell 4 per cent penetrating the 21 and 50-day moving averages. With this decline, the stock has resumed its medium-term downtrend. The daily relative strength index is declining in the neutral region. The daily moving average convergence and divergence is reinforcing bearishness.

We are bearish on the stock in the short-term. We anticipate the stock to decline further until it hits our price target of Rs 200 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 235.

via BL

Daily Technicals- Aug 19 2008


Daily Technicals- Aug 19 2008

Losses continue to cumulate at US Market


Negative news regarding government sponsored enterprises provoke traders to take money off the table

Stocks at Wall Street ended lower on Monday, 18 August, 2008 after traders once again turned their attention to government-sponsored enterprises Fannie Mae and Freddie Mac. Stocks ended significantly lower despite crude prices slipping further. Eight of the ten sectors ended in the red led by the financial sector. Utilities were one of the gainers.

The major indices pushed lower after opening in positive ground. Only the Dow had avoided falling into the red while opening today. But then, crude prices rose in-between driving all the three indices into the red. From there, market failed to recover. The Dow Jones industrial Average ended the day with a loss of 180.51 points at 11,479.39. The Nasdaq Composite Index, finished lower by 35.54 points at 2,416.98. S&P 500 finished lower by 19.6 points at 1,278.6.

It was reported in an article in newsweekly Barron’s earlier during the weekend that suggested that the Treasury might need to recapitalize the duo sooner rather than later. This led to further worries in the already troubled financial sector and gave traders a good excuse to take money off the table.

All the thirty Dow stocks ended in the red today led by Banc of America, Citigroup, American Express and GM. The financial stocks witnessed drop to the extent of 3% to 7%.

In the earnings section, Lowe's posted better-than-expected earnings for its second fiscal quarter. The company, however, issued a mixed outlook for its third quarter and the fiscal year. Also, BHP Billiton posted its sixth record full-year profit and offered an upbeat outlook.

In economic news on Monday, U.S. home builders report checked in very gloomy in August. The National Association of House Builders issued its August index around 1 pm E.T today. The NAHB/Wells Fargo housing market index remained at a record-low 16 in August. Two of the three components of the index turned higher, while the third was unchanged. At 16, the sentiment index shows that barely one-in-six builders have a good feeling about the market. The index is closely correlated with the housing starts data released by the Commerce Department, which is due tomorrow.

Barring Sify.com, all the Indian ADRs ended in the red. Rediff.com was the largest loser shedding more than 9%. Other than that, ICICI Bank and HDFC Bank shed 4.3% and 2.5% respectively.

At the crude market on Monday, crude oil fell amid signs Tropical Storm Fay will miss rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of U.S. production. Crude oil for September delivery fell 90 cents (0.8%) to settle at $112.87 a barrel.

At the currency markets on Monday, the dollar started the day on a weak note but then went up strongly against the euro and other major rivals. But then, in course of the day, it lost some ground. The dollar index, which measures the greenback against a basket of currencies, fell 0.1% to 77.07. Earlier in the day, it was at 77.111, up from previous session’s close at 77.080.

Trading volumes showed 986 million shares exchanging hands on the New York Stock Exchange and 661 million trading on the Nasdaq stock market. Advancing issues topped decliners by 22 to 9 on the NYSE and by 19 to 8 on Nasdaq.

For tomorrow, Home Depot and Target are expected to report their latest earnings results. Housing starts for July are due ahead of Tuesday's opening bell followed by the Producer Price Index for July.

Weak global cues may trigger lower opening


Local benchmark indices are likely to open lower today, 19 August 2008 tracking weak global cues. Fears of more losses from the mortgage crisis globally may continue to weigh on the sentiment.

Asian markets were trading weak today, 19 August 2008. China's Shanghai Composite was down 0.34% or 7.96 points at 2,311.91, Japan's Nikkei plunged 2.65% or 349.02 points at 12,816.43, Hong Kong's Hang Seng tumbled 0.92% or 193.50 points at 20,737.17, Taiwan's Taiwan Weighted slipped 0.56% or 39.48 points at 6,961.26, Singapore's Straits Times fell 1.25% or 34.79 points at 2,742.19 and South Korea's Seoul Composite lost 2.12% or 33.31 points at 1,534.4

US markets slumped yesterday, 18 August 2008, on the prospect of more losses from the mortgage crisis, sending financial stocks on a downward spiral. Shares of Fannie Mae and Freddie Mac lost more than 20% each after Barron's reported that the US Treasury may need to bail out the home finance giants, which could wipe out shareholders.

The Dow Jones industrial average plunged 180.51 points, or 1.55%, to 11,479.39. The S&P 500 index lost 19.60 points, or 1.51%, to 1,278.60, and the Nasdaq declined 35.54 points, or 1.45%, to 2,416.98.

Back home, the BSE 30-share Sensex fell 78.52 points or 0.53% to 14,645.66 and the S&P CNX Nifty lost 37.65 points or 0.85% to 4,393.05, yesterday, 18 August 2008, after latest economic data showed India’s wholesale price index rose to a 16-year high.

The barometer index is down 5641.33 points or 27.8% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6,561.11 points or 30.93% away from its all-time high of 21,206.77 struck on 10 January 2008.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 475.50 crore while mutual funds purchased shares worth Rs 128.91 crore on Monday, 18 August 2008, according to provisional data on NSE.

FIIs were net buyers of Rs 430.18 crore in the futures & options segment on Monday, 18 August 2008. They were net buyers of index futures to the tune of Rs 32.73 crore and purchased index options worth Rs 424.85 crore. They were net sellers of stock futures to the tune of Rs 24.41 crore and sold stock options worth Rs 3 crore.

Trading Calls - Aug 19 2008


Nifty (4393) Sup 4310 Res 4450

Sell RIL (2225) SL 2244,
Target 2175, 2165

Buy TCS (842) SL 836
Target 852, 856

Sell ICICI Bank (665) SL 672
Target 650, 646

Sell Gitanjali Gems (256) SL 261 Target 246, 243

Sell Bombay Dyeing (532) SL 538 Target 516, 513

Remain on the defensive


…Be slow to form convictions, but once formed they must be defended against the heaviest odds.

The bears have succeeded in delivering some punches and bringing down the morale of the bulls. Investors can learn a lesson or two from the defensively accurate Moldovan, Gojan Veaceslav who beat India’s aggressive Akhil at the Beijing Olympics boxing competition.

We expect the market to open a little soft again due to weak global cues. US market was down sharply overnight. But, Europe was more or less flat. Asian markets are down between 0.5-2%, with Tokyo shares pacing the decline. Markets in Hong Kong haven't fallen much while stocks in Shanghai have rebounded. Crude oil remains under pressure due to concerns over slowing demand and rising dollar. There may be a bounce back later in the day after four days of losses. Stick to the defensives like IT and FMCG for the time being.

The bulls are feeling a bit tired after a sharp bounce back from the lows hit in mid July. After sliding close to 12,500 on July 16, the Sensex crossed 15,500 on August 11. The Nifty, on the other hand has turned around from below 3800 to around 4650. The rebound has been quite swift, taking most market players by surprise given the kind of headwinds the market was facing. One factor has been instrumental in improving the sentiment. And, no prices for guessing that. It's crude oil, which has slumped from an all-time high of around $147 per barrel to $112 a barrel at present.

But, the outlook on the macro-economic front and the global side has not changed much in the interim. Inflation has actually climbed to a 16-year peak. Interest rates have inched up further. The Government's finances are in a disarray due to off-budget items, farm loan waiver and pay commission largesse. Concerns have increased over the credit market crisis in the western world and its impact on the large economies of the US and Europe. Even Japan is feared to be heading towards a recession. These factors seem to resurface every now and again, stopping the bulls in their tracks. This is what appears to have happened over the past four trading sessions.

The momentum has dissipated a bit, putting the strength of the recent rally in doubt. Global markets too have not been all that supportive. Today is no different, with the US market leading a worldwide fall amid fresh concerns over the health of the government-backed mortgage lenders - Fannie Mae and Freddie Mac. There is growing speculation that the Bush administration could bail them out. There are also reports that Lehman Brothers could suffer more losses.

Meanwhile, shares bought on Monday should not be sold today due to a bank holiday today. Trades done on both these days will be settled together on Wednesday.

TCS will be in focus amid reports that it is the front-runner for acquiring Citi's Indian BPO arm. Ambuja Cement and other cement shares could gain on speculation of a price hike. Sobha Developers is another stock that might gain as a newspaper report suggests that it is selling stake in three SPVs.

Punj Lloyd is reportedly in the race for bagging an order in Singapore. HEG's Board will meet today to consider buy back of shares. ITC might attract some attention as ITC Infotech (USA) Inc. has acquired Pyxis Solutions LLC, a New York limited liability company. Opto Circuit could be another stock in positive action later in the day.

FIIs were net sellers to the tune of Rs4.75bn (provisional) in the cash segment on Monday. Local institutions were net buyers of Rs1.29bn. In the F&O segment, the foreign funds were net buyers of Rs4.3bn. On Thursday, the foreign funds were net sellers of Rs3.96bn while Mutual Funds offloaded shares worth Rs4.19bn.

Asian stocks fell, driving the region's benchmark to a two-year low, on renewed concerns that credit-market turmoil will hurt bank profits and curtail global economic growth.

The MSCI Asia Pacific Index lost 1.7% to 122.95 as of 10:57 a.m. in Tokyo, set for the lowest close since July 26, 2006. Financial companies were the biggest drag, accounting for more than a quarter of the benchmark index's retreat.

The Nikkei ended the morning session down 363.96 points at 12,801.49. Hong Kong's Hang Seng dropped 0.6% in early minutes.

US stocks slumped anew on Monday amid fresh concerns over the state of the financial sector, as speculation grew about a bailout for Fannie Mae and Freddie Mac, whose shares tumbled to their lowest levels in more than 17 years.

Fannie Mae and Freddie Mac shares tumbled after financial weekly Barron's suggested that the mortgage finance firms won't be able to raise the capital they need and that a government takeover is inevitable.

Lennar Corp. and Ryland Group led a 5.5% drop by builders. Hershey retreated the most since 2002 after the chocolate maker said price increases will curb growth.

The S &P 500 Index lost 19.60 points, or 1.5%, to 1,278.60 as 23 of 24 industry groups declined. The Dow Jones Industrial Average fell 180.51 points, or 1.6%, to 11,479.39 as all 30 companies fell. The Nasdaq Composite Index slumped 35.54 points, or 1.5%, to 2,416.98.

Market breadth was negative. Seven stocks dropped for every two that advanced on the New York Stock Exchange.

Stocks had been under pressure throughout the session, as the dollar slid and oil prices fluctuated amid worries about a tropical storm approaching the Gulf Coast. But the selloff accelerated in the afternoon, led by the financial sector.

In another troubling sign for the US housing market, an industry report showed that homebuilders' confidence held at a record low in August for the second month in a row.

Additionally, the Wall Street Journal reported that Lehman Brothers could end up reporting a big third-quarter loss, rather than the currently expected profit. Lehman shares lost 7%.

Crude oil for September delivery fell 90 cents to settle at $112.87 a barrel on the New York Mercantile Exchange, a 3-1/2 month low. Prices were volatile during the session as Tropical Storm Fay approached Florida.

US stocks were mostly upbeat last week, boosted by falling oil prices and a rallying dollar. That trend of weaker commodities, stronger currency is likely to continue through the rest of the summer, according to some analysts.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.81% from 3.84% late on Friday. In currency trading, the dollar fell against the euro and the yen. COMEX gold for October delivery rose $13.40 to $801.80 an ounce.

Miners and oil producers moved higher in Europe, helping offset weakness in exporters and airlines. The pan-European Dow Jones Stoxx 600 index slipped 0.1% to 286.95. The French CAC-40 was down 0.1% at 4,448.84, while the UK's FTSE 100 fell 0.1% to 5,450.20. Germany's DAX 30 dropped 0.2% to 6,432.88.

In the emerging markets, Brazil's Bovespa slid 1.7% to 53,326 while Mexico's IPC shed 2% to 26,777. The RTS index in Russia fell 0.4% to 1778 and the ISE National-30 index in Turkey was down 0.7% at 51,928.

Technical bounce back likely

Markets started off the week with negative bias. Indian markets extended its losing streak to fourth straight trading session on the back of fresh spike in inflation and concerns over economic slowdown.

An absolute dull session ended in the red led by selling witnessed in the Oil & Gas, Metal and Power stocks. Only the IT stocks were in demand, the BSE IT index was up 0.75%.

Finally, the benchmark Sensex slipped 78 points to close at 14,645 and Nifty ended 37 points lower to close at 4,393.

Among the 30-components of Sensex, 21 stocks were in red and only 9 stocks were in green. Reliance Industries, ITC, ICICI Bank and RCom were among the major laggards. On the other hand, HDFC, HDFC Bank and L&T were among the major gainers.

In the overall market, 930 stocks advanced and 1,668 stocks declined. Whereas, 78 stocks were unchanged.

Shares of Hindalco dropped by over 6% to Rs129 after the company announced that it would sell shares to existing shareholders at below market prices to repay debt used to fund its US$6bn takeover of Novelis Inc. last year.

Hindalco will sell shares at Rs96 each, a 29% discount to the closing price on Aug. 14, 2008. Shareholders would be offered 3 shares for every 7 held. The scrip touched an intra-day high of Rs136 and a low of Rs128 and recorded volumes of over 19,00,000 shares on BSE.

Shares of SAAG RR Infra was locked at 5% upper circuit to Rs66.35 after 1.64% shares of the company changes hands in 2 trades on BSE. The scrip touched an intra-day high of Rs66.35 and a low of Rs63 and recorded volumes of over 2,00,000 shares on BSE.

Apollo Tyres slipped by 1.5% to Rs35.4 after the company announced that they dropped plan to build a 200mn euro factory in Hungary because of local opposition at the planned site in Gyongyos. The scrip touched an intra-day high of Rs35.9 and a low of Rs34 and recorded volumes of over 2,00,000 shares on BSE.

Aries Agro gained by 2.5% at Rs114 after the company announced that it would be inaugurating its sixth manufacturing unit at Ahmedabad, Gujarat on August 19, 2008. With this unit, the total manufacturing capacity for micronutrients will be enhanced to 73800 MT per annum.

In addition this unit will also mark the entry of the company into an entirely new range of Bio-fertilizers. The scrip touched an intra-day high of Rs120 and a low of Rs106 and recorded volumes of over 7,000 shares on BSE.

Rain Commodities edged higher by 0.6% to Rs223 after the company announced that the board of directors would meet on September 01, 2008 to consider buy-back of equity shares. The scrip touched an intra-day high of Rs238 and a low of Rs220 and recorded volumes of over 7,00,000 shares on BSE.

Subex slipped by over 2.5% to Rs109. The company clarified to the exchanges that the Subex is unaware of the contents referred in the news item and does not have any information on the same. The scrip touched an intra-day high of Rs113 and a low of Rs106 and recorded volumes of over 28,00,000 shares on BSE.

Shares of Bartronics surged by over 1.7% to Rs173. The company announced that that it secured a contract worth over Rs4bn, for providing Smart Cards by the Employees State Insurance Corporation.

The contract is for district-wise operation of Smart Cards under the RSBY Scheme covering 609 districts across the country. The scrip touched an intra-day high of Rs187 and a low of Rs173 and recorded volumes of over 10,00,000 shares on BSE.

M&M slipped 2.5% to Rs568. According to media reports, the company is likely to acquire 51% stake in Chinese Tractor Company, Kianbsu Yueda Yancheng. The scrip touched an intra-day high of Rs587 and a low of Rs557 and recorded volumes of over 1,00,000 shares on BSE.

ICICI bank has sold ~US$275mn from its credit derivatives portfolio in its foreign branches. (ET)

TCS is close to acquiring Citigroup’s captive BPO arm, Citigroup Global Services (formerly e-Serve) for ~US$500-550mn. (ET)

M&M is working on an electric car that will be bigger than the Reva brand, expected to hit the market by 2010. (FE)

IOC, BPCL and HPCL have seen revenue losses on sale of petrol, diesel, LPG and kerosene coming down to Rs4.5bn per day from Rs6bn per day. (ET)

ONGC exercised its right to pick up an additional 30% in CB-ON-7 in the South Pramoda Development Area in the Cambay basin. (BL)

Satyam Computer has delayed the payout of annual performance-based salary raises and expects the increases to be smaller than last year. (Mint)

International Finance Corp (IFC) has sold its 7.75% stake in Dabur Pharma Ltd. to German pharma major Fresenius Kabi. (BL)

Ambuja Cements has decided to raise cement prices by Rs20 per 50kg bag in two tranches. (ET)

Government asks NTPC to cut land need for building townships. (BS)

BSNL places orders for 3G equipment. (BS)

Subhash Projects and Emco will jointly pick up 83% stake for Rs3bn in PT Bism mine. (Mint)

Apollo Tyres to withdraw its planned facility at Gyongyos, Hungary. (ET)

Idea Celluar will not seek promoter funds to bid for the Rs400bn worth 3G spectrum. (ET)

Leela Venture to invest US$500mn for expansion. (BS)

The Government may reimburse NMDC the duty paid on exports to Japan and Korea. (ET)

Berger Paints has acquired BolixSA of Poland, a leading provider of external insulation systems from Advent International, a global private equity group.(FE)

Crompton Greaves may quit Nagpur power project, for which it had entered into a MoU with the Maharashtra State Electricity Distribution Company. (FE)

Bajajs has increased their stake in Mukand by 2% to 43%. (ET)

The Aditya Birla group plans to increase production at its copper concentrate mines at Nifty and Mount Gordon in Australia. (ET)

Punj Lloyd is in the race to build Singapore’s maiden liquefied natural gas (LNG) import terminal. (ET)

Punjab Chemicals to raise Rs2.5bn via GDR. (BS)

GAIL India may take over natural gas marketing from ONGC. (BS)

Haldia Petro to invest Rs700mn in power venture.

NTPC’s 980 MW power plant at Dadri is expected be commissioned according to schedule. (BL)

Trent to launch 16,000 sq ft value apparel format store this fiscal. (BL)

Toyota Kirloskar Motors plans to set up an engine manufacturing facility in India. (FE)

Titan Industries has set a US$1bn revenue target for FY09. (FE)

Economy Front page

Spot rupee fell to a 17-month low of 43.70 against the dollar. (BS)

TRAI tells Government to ease norms for internet calls. (BS)

Allahabad High Court has ordered sugar mills to pay farmers SMP fixed by the Centre. (BS)

CMIE in its monthly report says the Indian economy would continue to clock a robust over 9% growth in FY09. (BS)

SEBI eases disclosure norms for debt issues. (BS)

FIIs may get to invest in Indian Depository Receipts (IDRs). (ET)

Sugar prices may shoot up during the coming festive season, unless at least 5mn tons of sugar is released by the Government in the open market. (ET)

The Government plans to launch special pharma outlets, which will sell generic medicines at affordable prices to poorer sections of the society. (ET)

Banks trim sales force by 15-25% as credit growth slows down. (BS)

Domestic passengers at Hyderabad airport to pay user fees. (BS)

Revenue Dept tells FIPB to reject telecom FDI from tax havens. (BS)

The country’s fertilizer subsidy bill is likely to treble to Rs1,197.72bn in FY09 from Rs403.38bn in FY08. (FE)

Bullion metals rise after a long time


Traders are back to buying cheaper precious metals

Gold and silver prices rose on Monday, 18 August, 2008 after the bullion metals gave up all of their gains last week that they had registered earlier this year. Traders were back in buying spree after prices fell to new lows last week. Prices also rose as the dollar fluctuated against other currencies. Barring today and one day in between, gold and silver prices had registered losses in all the trading sessions in the current month of August, 2008. Silver prices also fell for the day.

Today, Comex Gold for December delivery rose $13.6 (1.7%) to close at $805.7 ounce on the New York Mercantile Exchange. It fell to an intra day high price of $807.5. Last week, the yellow metal gave up 8.4%. With today’s gain, it has lost 12.7% in August, 2008 till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (22%) since then.

This year, gold prices have lost 3.9% till date as the dollar rallied against the euro. It has lost almost $116 in August till now. Gold ended July, 2008 lower by $11 (1.1%).

Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. It ended June, 2008 with a gain of 4.1%. In May, it ended with a gain of higher by $22.5 (2.5%). Before May, in April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

On Monday, Comex silver futures for September delivery rose 28.5 cents (2.2%) to $13.1 an ounce. With today’s rose silver has lost almost 11% in 2008 till date. Last week, it gave up 16.4%. It ended July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.

Gold and silver prices have dropped 23% and 38% from their all time highs that they reached earlier this year.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa.

At the currency markets on Monday, the dollar started the day on a weak note but then went up strongly against the euro and other major rivals. But then, in course of the day, it lost some ground. The dollar index, which measures the greenback against a basket of currencies, fell 0.1% to 77.07. Earlier in the day, it was at 77.111, up from previous session’s close at 77.080.

In economic news on Monday, U.S. home builders report checked in very gloomy in August. The National Association of House Builders issued its August index around 1 pm E.T today. The NAHB/Wells Fargo housing market index remained at a record-low 16 in August. Two of the three components of the index turned higher, while the third was unchanged. At 16, the sentiment index shows that barely one-in-six builders have a good feeling about the market.

At the crude market on Monday, crude oil fell amid signs Tropical Storm Fay will miss rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of U.S. production. Crude oil for September delivery fell 90 cents (0.8%) to settle at $112.87 a barrel.

Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for October delivery closed higher by Rs 248 (2.2%) at Rs 11,506 per 10 grams. Prices rose to a high of Rs 11,532 per 10 grams and fell to a low of Rs 11,290 per 10 grams during the day’s trading.

At the MCX, silver prices for September delivery closed Rs 510 (2.6%) higher at Rs 19,845/Kg. Prices opened at Rs 19,500/kg and rose to a high of Rs 19,967/Kg during the day’s trading.

Crude prices continue to soften


Prices give up earlier gains and end marginally lower

Crude oil prices fell on Monday, 18 August, 2008 at Nymex erasing earlier gains after dollar continued to remain strong and amid signs that tropical storm Fay will miss rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of U.S. production. But crude price got some support as the dollar gave up its earlier gains during the day.

Crude-oil futures for light sweet crude for September delivery closed at $112.87/barrel (lower by 0.90 or 0.8%) on the New York Mercantile Exchange. Earlier during the day, it was trading higher by more than $1 at $115. Last week, crude prices ended lower by 1.2%. Before that crude lost $15.92 (11%) in July, 2008, the biggest ever in dollars. Prices are 57% higher than a year ago. Prices reached a high of $147 on 11 July but have dropped 23% since then.

It was reported today that Royal Dutch Shell and Transocean evacuated some workers as Fay, with maximum winds of about 60 miles an hour, might grow into a hurricane before striking Florida's west coast tomorrow.

At the currency markets on Monday, the dollar started the day on a weak note but then went up strongly against the euro and other major rivals. But then, in course of the day, it lost some ground. The dollar index, which measures the greenback against a basket of currencies, fell 0.1% to 77.07. Earlier in the day, it was at 77.111, up from previous session’s close at 77.080.

In a monthly oil report issued last week, the Organization of the Petroleum Exporting Countries (OPEC) said that oil demand has been "badly hurt" this summer by the slowing economy and high oil prices. Transport and industrial fuels declined the most, sending USA’s total oil demand down by 3.8%, or 0.8 million barrels per day in the first seven months of the year.

OPEC reported that it expects total world oil demand to reach an average of 86.90 million barrels per day for 2008, above 2007's 85.90 million. For 2009, it forecasts a rise of 900,000 barrels per day to average 87.8 million. OPEC members have also been increasing production to help calm the markets. OPEC output in July reached 32.64 million barrels per day, a gain of 780,000 barrels per day since April.

Crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. For the year, crude is up by 15% till date.

Brent crude oil for October settlement declined 61 cents (0.5%) o close at $111.94 a barrel.

Against this background, September reformulated gasoline fell 4.5 cents to close at $2.8152 a gallon while September heating oil closed at $3.0848 a gallon, down 3.4 cents.

Natural gas in New York fell amid speculation production in the Gulf of Mexico will be little changed by Tropical Storm Fay and as demand waned on a slowing U.S. economy. Natural gas for September delivery fell 20.4 cents (2.5%) to settle at $7.888 per million British thermal units.

At the MCX, crude oil for August delivery closed at Rs 4,952/barrel, higher by Rs 29 (0.6%) against previous day’s close. Natural gas for August delivery closed at Rs 348.3/mmbtu, lower by Rs 2.2/mmbtu (0.62%)

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India Telecom, India Banking, India Sugar

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