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Sunday, July 31, 2011

Short Reliance Industries

Reliance Industries: The outlook for Reliance Industries seemed to be negative as it ended below the crucial support level last week.

The stock now finds immediate resistance at Rs 1,047 and only a conclusive close above Rs 1,141 would change the outlook to positive for stock.

The next support level appears at Rs 694, and it seems the stock is heading towards the support level.

A close below Rs 694 could weaken the stock to Rs 549.

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Should you continue with SIPs or STPs ?

The stock market has been on a roller coaster all year. While in the short run markets mostly overreact both ways, over a sufficiently long period of time, if the economy is growing, the broad index rises above the inflation rate.

Investors who enter the market for the short run are usually speculators. Long-term investors never time the market, but there are times when even for them, the stage looks set for either a lump sum investment or padding up their existing systematic investment plans (SIPs). Market trends we analysed and experts we spoke to confirm that such a time may indeed be now.

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ICICI Bank - back to growth, can it sustain ?

Bank maintains NIMs at 2.6 per cent in Q1, advances up 20 per cent.

ICICI Bank is known to do things differently. So, it’s not surprising that when other banks are trimming their loan books sequentially to hold on to profitability, ICICI Bank, India’s largest private sector bank, is growing its books. At the end of the first quarter of FY12, advances increased 20 per cent year-on-year to Rs 2,20,693 crore from Rs 1,84,378 crore in the corresponding period of the previous year. Savings deposits increased 18 per cent to Rs 66,858 crore. While the industry faces a widespread decline in demand deposits, the bank’s Casa ratio at stood at 41.9 per cent in Q1FY12.

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India - Online Term Insurance Comparison Rates


Is all well with online term insurance plans?

‘Online term plan’ is a new concept that has grabbed attention due to premiums that are amazingly low compared to other plans. But, before you fall for the charms of low-priced term plans, think about the many issues that are not so apparent.

If one cell-phone model costs Rs5,000, and another, with the same features, costs Rs12,000, it is not hard to see which one you would go for. But if one insurer charges Rs5,000 as premium for a term plan and another insurer charges Rs12,000 for a plan with similar features, what would you do? Your instinct would prompt you to go for the cheaper one. But wait till you read the whole story.

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ICICI Bank GTL Stake

ICICI Bank has assumed a 29.3 percent stake in debt-laden Indian telecom infrastructure companyGTL after taking over 28.5 million shares pledged by its promoter, a source with direct knowledge of the matter told Reuters.

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Watch out for Tata and Anil Ambani stocks

Overseas investors have dumped Reliance Industries shares worth an estimated Rs 1,000 crore in this fiscal, but have made net purchase worth an equivalent amount in thestocks from the Tata and Anil Ambani groups.

The holding of foreign institutional investors (FIIs) in Mukesh Ambani-led RIL fell from 17.7 per cent to 17.37 per cent during the current fiscal's first quarter ended June 30.

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Exit Consumer Stocks ?

Even as it has taken a cynical view of most other investment ideas, the stock market has pursued the consumption theme with single-minded devotion over the last two years. Sectors such as fast moving consumer goods (FMCGs), retail, white goods, foods, fitness — all things, in fact, that cater directly to the ravenous appetite of the young Indian consumer — have seen their stock prices zoom. Price-earnings multiples have expanded, with institutional investors making a beeline to accumulate them.

More on Hindu Business Line

Cognizant to acquire CoreLogic India Operations

Cognizant, a leading provider of information technology, consulting, and business process outsourcing services, and CoreLogic, a leading provider of information, analytics, and business services, announced a definitive agreement under which Cognizant will acquire CoreLogic Global Services Private Limited (CoreLogic India), the India-based captive operations of CoreLogic. The purchase price will consist of a cash payment of approximately $50 million, plus adjustments for working capital and other charges or credits which will be determined at closing. As part of the transaction, CoreLogic and Cognizant will enter into a services agreement with a minimum revenue commitment of $324 million, plus applicable inflation adjustments, over five years with various renewal and extension rights, under which Cognizant will provide a range of services to CoreLogic globally.

Monsoon rains 23% below normal in week to July 27

Southwest monsoon was 23% below normal in the week ending July 27, a steep decline from the 7% above average rains received in the previous week, the Indian Meteorological Department (IMD) said on Thursday. The rains were poor during last week over rice and cotton areas of south and western India. The weather office's overall forecast, made around a month ago, expected the rains to be slightly below normal for the entire June to September season. Last year, rainfall was 38% above normal in the week ended July 28, after a weak start in June, and ended the four-month season as normal. Widespread rain/thundershowers would occur over west coast and Andaman & Nicobar Islands up to 31st July, the IMD said . Fairly widespread rain/thundershowers would occur over northwest India, Bihar, subHimalayan West Bengal & Sikkim, northeastern states and Lakshadweep. Scattered rain/thundershowers would occur over remaining parts of the country, except extreme peninsular India. Heavy to very heavy rainfall would occur at a few places over Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Uttar Pradesh, Bihar and subHimalayan West Bengal & Sikkim during the next 48 hours, the weather bureau said. Isolated heavy rainfall would occur over Assam & Meghalaya, Arunachal Pradesh, Konkan & Goa, coastal Karnataka, Kerala, Lakshadweep and Andaman & Nicobar Islands, it added. Fairly widespread rainfall would occur up to 2nd August over many parts of the country, except parts of northwest, east and peninsular India where it would be scattered.

SEBI approves new takeover code...Unveils several other measures

Capital markets regulator SEBI formally gave a green light to the new takeover regulations proposed by the Takeover Regulation Advisory Committee (TRAC). As per the proposed new norms, a company can acquire up to 25% in a company without requiring to make an open offer. The new takeover code also raises the open offer size from a minimum of 20% at present, to 26%. Under current regulations, if an investor buys more than 15% in another company, it has to make a mandatory open offer for a further 20% stake. In addition, removal of the non-compete fee will ensure that all shareholders of the target firm are treated fairly. While most of the recommendations by the C. Achuthan panel have been accepted, SEBI turned down the committee’s suggestion on the 100% open offer. The TRAC had recommended open offer for 100% of the target company's shares.

RBI hikes rates by 50 bps to check inflation

The Reserve Bank of India (RBI) on July 26 raised the key policy rates - the repo rate and the reverse repo rate - by a larger-than-anticipated half a percentage point, as it persists with its efforts to tame the inflation monster notwithstanding some moderation in economic growth. So, the repo rate now stands at 8% and the reverse repo rate is at 7%. There has been no change in the Cash Reserve Ratio (CRR), which stands at 6%. The bank rate has been retained at 6%. The Marginal Standing Facility (MSF) rate, determined with a spread of 100 bps above the repo rate, stands recalibrated at 9% with immediate effect.

Weekly Stock Picks - July 31 2011

Buy Satyam Comp

Buy Ranbaxy

Buy Sintex Industries

Buy United Phosphorous

Buy PowerGrid

Weekly Newsletter - July 31 2011

An eventful week ended on a steady note. RBI’s 50 bps rate hike stunned one and all. The central bank policymakers also maintained a hawkish tone. So, more tightening is likely in the coming months, especially if inflation remains stubborn.