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Gainers in Samvat '65

Last year around this time, when brokers and investors gathered at the Bombay Stock Exchange to flag off Samvat 2065 — a year in the Hindu calendar — the mood was morose. Global markets were going through one of their most turbulent periods and a recovery seemed a distant prospect, then.

A year later, as market participants assemble to welcome Samvat 2066 on Muharat trading day on Saturday, they would be a relieved lot. With key indices having risen 110% over the last seven months, Indian shares are now just 20% away from their record highs touched in early 2008. READ FULL STORY

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Market's ready to give a rousing welcome to Samvat 2066 16 Oct 2009, 0342 hrs IST, ET Bureau

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MUMBAI: Last year around this time, when brokers and investors gathered at the Bombay Stock Exchange to flag off Samvat 2065 — a year in the Hindu calendar — the mood was morose. Global markets were going through one of their most turbulent periods and a recovery seemed a distant prospect, then. A year later, as market participants assemble to welcome Samvat 2066 on Muharat trading day on Saturday, they would be a relieved lot. With key indices having risen 110% over the last seven months, Indian shares are now just 20% away from their record highs touched in early 2008. Despite all the optimism around, driven by initial signs of recovery in the Indian economy and stability in global financial markets, concerns over the endurance of this rally remain. Market participants fear the market may choke on an overdose of liquidity, which has been fuelling stock prices in the past few months. “Though liquidity has rescued global markets and companies, it has driven stock prices to higher-than-expected levels and, now, will result in higher volatility in earnings and PE (price to earnings) too,” said Anand Shah, head — equities, Canara Robeco Asset Management. “We should not assume that the kind of liquidity that we are seeing now would remain and the reversal of liquidity could lead to a fall that is much-more than needed,” he added. Central Banks world-wide, including India, have started signalling the possibility of tightening of monetary policy early next year on fears that excess money supply may spark rapid price jumps of commodities and goods. Brokers said the hike in rates could result in some foreign investors liquidating their equity portfolios in emerging markets, including India, that have been created by borrowing at near-zero interest rates in the US. A hike in interest rates in the US would result in dollar rising against the rupee, resulting in the value of their Indian holdings eroding. Foreign institutions have pumped in close to $13 billion since early March, when the markets resumed their ascent after the tumultuous 14 months from January 2008. This, coupled, with domestic institutional inflows have driven Sensex’s valuation to close to 18 times 2009-10 and 15 times 2010-11 estimated earnings, considered steep in comparison with other markets. “Large liquidity flows into the Indian market from global and domestic funds has resulted in steep increase in stock prices, without commensurate increase in earnings,” said Sanjeev Prasad and Sunita Baldawa of Kotak Securities in a report. “We recommend investors to prepare for a likely correction in the Indian market over the next few months,” they added. Market participants are estimating a correction of 8-10% in benchmark indices and a bigger fall in the mid- and small-cap shares. A possible fall should be used to buy shares that will benefit from the likely revival in India’s and global economic growth, they said. “Indian equities continue to be vulnerable to a sell-off in global equities, or a sudden spike-up in crude oil prices. However, we believe that investors should use such volatility to buy Indian shares since the growth outlook for the next 12-18 months remains firm and is still not priced into equities,” said Amitava Neogi, ED of Morgan Stanley Private Wealth Management. Enam Securities, in a recent report, said: “Any corrections should be used to build core holdings in long-term scalar sectors linked to consumption (retail), infra (power), savings (insurance), & global suppliers (resources and IT).”

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Mid-cap stocks

5 mid-cap stocks: Here’s your middle path to prosperity 16 Oct 2009, 0425 hrs IST

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ET Bureau It’s that time of the year again when many investors rejig their portfolio and take position on their favourite stocks. With most of the blue chips having turned expensive, the only option for most investors is the mid-cap sector. We at ET Intelligence Group bring you a list of 5 mid-cap stocks that could make your next Diwali brighter. But, as always, make sure you’ve done the due diligence before placing your bets on these.

Tata Teleservices (Maharashtra) Ltd 16 Oct 2009, 0425 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History TTML, which has recently joined hands with Japan’s NTT Docomo, is the Rs 2,000-crore Tata Group company that provides telecom services in the circles of Mumbai and Maharashtra, including Goa. TTML has reported net loss in each of the past six years. However, the picture is likely to change soon. The company is aggressively adding new subscribers and has topped the 10-million mark, following its innovative pricing methods. Higher users would improve network efficiency, thereby reducing cost per user. The company has undertaken necessary capex in the last few years. TTML has reduced the level of net loss in the last three quarters. It is likely to post quarterly profit by the March 2010 quarter.

Indian Hotels Company Ltd 16 Oct 2009, 0425 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Indian Hotels (IHCL), which has underperformed the markets, is currently trading below its book value. This appears pretty cheap as it has always traded between 1.4 and 5 times the book value in the last five years. The last few bad quarters indicate that the scrip is trading 28 times its past 12 months earnings. The hospitality industry is now going through a tough phase. However, being the industry leader, IHCL could well be the first one to move up once the tide turns. The Commonwealth Games being held in Delhi next year can be one major trigger for the industry, apart from the global economic revival.

Supreme Industries Ltd 16 Oct 2009, 0425 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Supreme Industries, India’s leading plastic goods manufacturers, has always enjoyed a healthy history of profit growth, cashflows and dividends. Its decision to exit unprofitable businesses, coupled with rising domestic demand for plastics and a likely glut situation in polymers, are likely to keep its profit growth strong in the coming quarters. At the same time, the company has constructed a commercial complex at Andheri with 2.5-lakh square feet of saleable area at a cost of Rs 115 crore. The sale proceeds from this property will boost the company’s bottomline for the next few quarters. The scrip at Rs 363 values the company just 8.6 times its earnings for trailing 12 months, much cheaper compared to its peers.

For more about this: <Mid-cap stocks>

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