Green World
25 Sep 2010 | 00:09
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Showing posts with label Morning Views. Show all posts
Showing posts with label Morning Views. Show all posts
27 September 2010
24 July 2010
Stock and Market Views
LONDON/MADRID: Seven European banks would not be strong enough to withstand another recession and would face a capital shortfall of 3.5 billion euros ($4.5 billion), tests run in an attempt to revive investor confidence showed on Friday.
Five of Spain's smaller regional lenders, known as cajas, failed the test and their recapitalisation is likely to speed a restructuring of the troubled sector.
Banks in Germany and Greece were also seen as weak spots and in need of restructuring, but state-owned Hypo Real Estate was the only German lender to flunk and state-controlled ATEbank was the only Greek bank to fail.
Analysts had expected five to 10 banks to fail the test. As expected, no big banks failed the health check. German government bond futures hit one-month lows and the euro briefly pared its losses against the dollar after the results were released.
Europe tested how 91 banks would cope with another recession and losses on government debt after the Greek crisis hit markets and raised fears the euro zone could unravel. It aimed to repeat a health check on US banks last year that helped restore investor confidence and underpinned a recovery by bank shares.
Five of Spain's smaller regional lenders, known as cajas, failed the test and their recapitalisation is likely to speed a restructuring of the troubled sector.
Banks in Germany and Greece were also seen as weak spots and in need of restructuring, but state-owned Hypo Real Estate was the only German lender to flunk and state-controlled ATEbank was the only Greek bank to fail.
Analysts had expected five to 10 banks to fail the test. As expected, no big banks failed the health check. German government bond futures hit one-month lows and the euro briefly pared its losses against the dollar after the results were released.
Europe tested how 91 banks would cope with another recession and losses on government debt after the Greek crisis hit markets and raised fears the euro zone could unravel. It aimed to repeat a health check on US banks last year that helped restore investor confidence and underpinned a recovery by bank shares.
23 July 2010
News Round-Up
Daily News Roundup - July 23 2010
Earning reports fuel strong rally at Wall Street
PNB
United Spirits
Src: ET and DP blog and Smartinvestor.in
22 July 2010
21 July 2010
Stock Views from Various Sources
19 July 2010
Morning calls
17 Jul 2010, 1727 hrs IST
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Verge of Break out
YES Bank cmp 299 : Possible Upside after facing lot of resistance at current levels. Good upside expected if breaks 300-310.
Orchid Chem (188): Possible Upside after facing lot of resistance at current levels. Good upside expected if breaks 194-200 levels.
Src: ET, Myiris and etc
16 July 2010
Morning views
Insurance Big Daddy turns seller in index stocks THE Big Daddy of insurance has been a seller in the index stocks in the past one week, keeping up to its reputation of being a seller in a rising market and a buyer in a falling market. Brokers said they have received selling orders from the Big Daddy in large numbers of late, mainly in oil & gas, banks and auto shares. In the past week or so, the institution has been a seller in SBI. But the buzz is, it has been a buyer in select mid-cap bank stocks. FIs make a beeline for LIC Housing, stock up 7% SHARES of LIC Housing Finance rose 7% to a 52-week high of Rs 1,073.40 supported by heavy volumes in a subdued trading session on Thursday. According to dealers, domestic mutual funds and select FIIs were heavy buyers after the company posted better-than-expected quarterly numbers. They said fund managers have been buying housing finance companies of late, mostly for trading gains. Some analysts are cautious about the outlook of housing finance companies, as firming interest rates are expected to raise their borrowing costs, thereby affecting margins. Oil cos tank as govt fails to free up diesel prices SHARES of state-owned oil marketers HPCL and BPCL crashed 6% on Thursday after the government said it will not deregulate diesel prices. The sudden about-turn in fuel policy has caught most Dalal Street stalwarts on the wrong foot. All these players had bought huge chunks of these stocks over the past couple of weeks, convinced that the sector was due for re-rating. The top guns who are long on HPCL, BPCL and IOC include the Rar(e)ing Bull, Old Fox, the high-profile second-in-command at a listed broking firm and a suave broker who shares his surname with the Old Fox. The problem now is that most of the top names are bullish on these stocks. So if they turn bearish, who are they going to sell their holdings to? Godrej Properties bucks downtrend in realty stocks AT A time when most property stocks are being cold-shouldered by fund managers as well as market operators, Godrej Properties hit a record high of Rs 691.40 on Thursday. Dealers tracking the counter say there is good interest in the stock, but at the same time, they point out that low liquidity is having a multiplier effect on the share price. A suave BSE broker, who shares his surname with the Old Fox, is said to be one of the big buyers of the stock. (Contributed by Harish Rao & Santosh Nair) |
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For those of us still fumbling to find the € symbol on our keyboards, today was a bad news day. Computer and mobile keyboards in India (and possibly around the globe) will soon be adding another new button – the rupee key.Piramal Healthcare
Maruti Suzuki
Voltamp Transformers, HDFC, Infotech Enterprises, Bajaj Auto
TCS - Strong Results
Colgate - Rich Valuations
Axis Bank
Daily Market Outlook - July 16 2010
Market View - July 16 2010
Src: ET, Smartinvestor, DP blog and etc
09 July 2010
A litmus test for the markets
A litmus test for the markets
Src: HDFCSEC< ET and DP BLOG and etc
A late surge in US stocks, allowed the Dow to post a back-to-back triple digit rally.
The Dow Jones Industrial Average added 121 points at 10,139. The S&P 500 gained 10 points at 1070, while the NASDAQ finished up by 16 points at 2175.
That sets the tone for our markets to open higher in the morning but it is going to be a litmus test for the markets. 5350-70 regions will be full of booby traps.
US markets were bolstered by a larger-than-expected drop in initial weekly jobless claims and a buoyant June retail sales data (Same–store sales). Obviously the sales look better because two holidays, the Memorial Day holiday and The Independence Day holiday sales have been added in June, which were not a part of the June sales last year. This apart, the Same-store sales numbers have to be taken with a pinch of salt. In one of the weekend articles, we will explain why.
The Bank of England kept its base interest rate at a record low of 0.5% for the 17th consecutive month and continued to leave its asset-purchasing program on hold. The European Central Bank also held rates steady.
Earlier in the day, International Monetary Fund raised its 2010 global growth forecast to 4.6% from 4.1%. The IMF said that while economic recovery will likely be faster than expected, Europe's debt crisis could stall the rebound.
The IMF also raised India’s economic growth forecast for 2010 to 9.4%. IMF’s forecast has been received well because GDP growth during the March quarter was only 8.6%. It implies that growth in the rest of the quarters will be much higher.
Today being a Friday, the bulls will like the week to close on a strong note. But a crossing of the important levels like 5366 looks rather premature. The markets will like to read the hand out by Infosys first, before it makes up its mind. For that we will have to wait till next week.
The bottom line is, unless the Nifty crosses the 5400 humps, don’t be in any hurry.
Godrej Industries and Gail look better placed for the day.
Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients
08 Jul 2010 | 12:07
Src: HDFCSEC
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Heard on the Street: Top insurer sells shares in D-Street favourite SBI
State Bank of India (SBI) remained a favourite among investors on Thursday, despite concerns over hardening interest rates.
According to the market buzz, there was some churn in the stock among foreign institutional investors, driving up the stock by 2.3% to Rs 2,356.75 on higher-than-average volumes in a firm market on Thursday.
But domestic institutions took a contrarian view on the stock, as it is felt that upsides are likely to be limited from these levels. Brokers said an insurance major was a seller in the stock on Thursday.
It is also speculated that the stock has been accumulated by a group of operators as a trading bet in the near-term. The stock is expected to outperform other bank stocks, brokers said.
Vadilal Inds gains 13% as takeover talk triggers rally
Shares of Vadilal Industries, a dairy product and food-processing company, have risen over 40% in less than two weeks, on market talk that the company could be a possible acquisition target for any large FMCG player looking to consolidate its position in the sector.
On Thursday, the stock rose 13% to close at Rs 144.95, after hitting a 52-week high of Rs 149 intra-day. Vadilal Industries’ revenues have improved steadily over the past few years, helping it gain a decent market share in milk and dairy products segments.
Dealers tracking the counter rule out the possibility of a hostile takeover, since the promoters own 61% in the company.
The company reported an earnings per share of Rs 8 for FY10. While the share price has more than trebled over the past one year, institutional investors have not shown any interest so far.
(Contributed by Nishanth Vasudevan & Vijay Gurav)
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May go to 4200 if Nifty breaks 4900: Daryl Guppy
Commercial Vehicles
Reliance Industries, Asian Paints, Tata Chemicals
Daily Market Outlook - July 9 2010
Daily Technical Report - July 9 2010
Src: HDFCSEC< ET and DP BLOG and etc
07 July 2010
Stock and Market Views
Technical calls: Godrej Ind, Piramal Life, Eicher Motors
Recommendations for the
forthcoming week using technical analysis
HDFC Sec, www.valuenotes.com
6 July 2010
Recommendations for the
forthcoming week using technical analysis
HDFC Sec, www.valuenotes.com
6 July 2010
Heard on the Street: Delisting buzz drives up KSB Pumps, MphasiS
Delisting buzz drives up KSB Pumps, MphasiS
In the absence of any other exciting “story”, delisting remains one of the favourite themes in the stock market. Shares of KSB Pumps, which makes power-driven pumps and industrial valves, extended their winning streak on Tuesday, climbing 3.5% to close at Rs 561.40.
The stock has gained around 14% in the past couple of weeks on talk that the foreign parent may buy out the minority shareholders shortly. An e-mail sent to the company remained unanswered till the time of going to print. Promoters own 66.8% of the company’s equity, with Canada-based Kay Pump holding a 40.54% stake.
An analyst said the company’s margins for the current calendar year could be under pressure, as it had quoted low price for some key projects it had bid for. The margins are expected to improve next year, once new orders at higher prices start flowing in. Shares of IT services firm MphasiS, too, have been inching up of late on rumours of a possible delisting.
The stock closed flat at Rs 605.15 on Tuesday, but have risen nearly 10% over the last week. The stock had touched a record high of Rs 796 in November last year on similar talk. Analysts say it would be risky to take event-based bets on stocks where there is little fundamental support. In the case of MphasiS, analysts say that the stock is fairly valued at current levels. Also, the outlook on the IT services sector in general has turned cautious, following renewed doubts on the health of the global economy.
eClerx Services snaps 3-day winning streak
Shares of Mumbai-based KPO Eclerx Services snapped a three-day winning streak on Tuesday, shedding 2.3% to close at Rs 664.85. The stock has risen around 10% in the past couple of weeks, on thin volumes. Dealers tracking the counter say domestic mutual funds and a leading bank-promoted PMS player have been buying the stock over the past few sessions.
The buzz is that some fund managers had met up with the management to get an idea about the company’s plans. Sensing an opportunity, some local operators, too, seem to have thrown their hats into the ring. On Monday, when the overall trading volume in the market was down around 40%, the eClerx counter logged a volume of 4.39 lakh shares on the NSE alone, compared to the two-week average daily volume of 16,000 shares. Barely a tenth of those massive volumes resulted in delivery, testifying to the speculative interest in the stock.
PK Malhotra likely to join SAT
One of the long-pending vacancies at the Securities Appellate Tribunal (SAT) is likely to be filled this month. The buzz is that PK Malhotra, additional secretary, ministry of law & justice, has been selected and will join Samar Ray, member and Justice NK Sodhi, presiding officer at SAT. Sebi had proposed to the government that the retirement age for members of the tribunal should be increased to 65 years from 62 to avoid frequent reconstitution.
Last year, there was a backlog of cases at SAT because of the absence of quorum. The situation eased after the appointment of former deputy Comptroller and Auditor General (CAG) of India, Samar Ray.
(Contributed by Deeptha Rajkumar, Apurv Gupta & Reena Zachariah)
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Eveready Industries
India Pharma - July 6 2010
India Autos - July 6 2010
Power Sector 2010
Daily Technical Report - July 7 2010
Daily Market Outlook - July 7 2010
Src: HDFCSEC, ET and DP blog and Valuenotes and etc
10 May 2010
Morning views
Growth data, RIL to set market course
MUMBAI: Stock market investors are anxiously eyeing economic readings worldwide in the week ahead for respite from the recent market turbulence caused by the debt crisis in select European economies.
That and the trend in index heavyweight Reliance Industries (RIL) will set the tone for the market this week. RIL shares gained 3% on Friday to close at Rs 1,040 after the positive court ruling. Brokers say that the stock is unlikely to rise sharply this week, but could stay firm as nervous investors switch money from mid-cap shares to large-caps like RIL. But for the strength in RIL, benchmark indices would have fallen more than 1.5% on Friday.
Analysts recommend buying shares of Anil Ambani group company Reliance Infrastructure, which fell 7% to Rs 979.70 on Friday after the Supreme Court verdict. “The stock is a buy at around Rs 970-980 as the impact of the gas case outcome on the company is expected to be limited,” said Siddharth Bhamre, head-derivatives, Angel Broking.
Edelweiss Capital, too, is positive on the stock. “Reliance Infrastructure’s sum-of-the-part (SOTP) based on this decision (Supreme Court) would be lower by Rs 210/share, at Rs 1,241. Considering the stock has already corrected by 8% to Rs 970/share, we recommend investors to use this as a buying opportunity,” the broking firm said in a note to clients.
MOre @ Growth data, RIL to set market course
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Src: ET and DP blog etc
MUMBAI: Stock market investors are anxiously eyeing economic readings worldwide in the week ahead for respite from the recent market turbulence caused by the debt crisis in select European economies.
That and the trend in index heavyweight Reliance Industries (RIL) will set the tone for the market this week. RIL shares gained 3% on Friday to close at Rs 1,040 after the positive court ruling. Brokers say that the stock is unlikely to rise sharply this week, but could stay firm as nervous investors switch money from mid-cap shares to large-caps like RIL. But for the strength in RIL, benchmark indices would have fallen more than 1.5% on Friday.
Analysts recommend buying shares of Anil Ambani group company Reliance Infrastructure, which fell 7% to Rs 979.70 on Friday after the Supreme Court verdict. “The stock is a buy at around Rs 970-980 as the impact of the gas case outcome on the company is expected to be limited,” said Siddharth Bhamre, head-derivatives, Angel Broking.
Edelweiss Capital, too, is positive on the stock. “Reliance Infrastructure’s sum-of-the-part (SOTP) based on this decision (Supreme Court) would be lower by Rs 210/share, at Rs 1,241. Considering the stock has already corrected by 8% to Rs 970/share, we recommend investors to use this as a buying opportunity,” the broking firm said in a note to clients.
MOre @ Growth data, RIL to set market course
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10 May 2010, 0719 hrs IST
10 May 2010, 0609 hrs IST, Amriteshwar Mathur
10 May 2010, 0607 hrs IST, Rajesh Naidu
10 May 2010, 0602 hrs IST, Bakul Chugan Tongia
10 May 2010, 0559 hrs IST, Ranjit Shinde
10 May 2010, 0558 hrs IST, Devangi Joshi
10 May 2010, 0545 hrs IST, Deepak Mohoni
10 May 2010, 0540 hrs IST
10 May 2010, 0531 hrs IST, Karan Sehgal
10 May 2010, 0524 hrs IST
Nifty seen slipping below 5,000
Wkly Tech Analysis: Long-term support in sight
NIIT Technologies
SGX Nifty jumps
Alembic
Weekly Review - May 10 2010
Allcargo Global
Ultratech Cement
Reliance Power Ltd
Value Guide - May 2010
Biocon Ltd
RCF
Aditya Birla Nuvo
Cipla
Weekly Watch - May 10 2010
LIC Housing Finance
Src: ET and DP blog etc
29 April 2010
Ripple effect on D-St as EU crisis spreads
Ripple effect on D-St as EU crisis spreads
contagion seems to be spreading fast across Europe. Ratings major Standard & Poor’s (S&P) on Wednesday cut its ratings on Spain by one notch to AA from AA-plus.
Earlier in the day, Indian shares joined the worldwide slide in equities and commodities, after S&P had lowered Greece’s debt rating to junk and that of Portugal by two notches on Tuesday.
Brokers and fund managers said the outlook on India’s economy and corporate earnings remained upbeat, notwithstanding the latest upheavals in Europe. But the flow of foreign money into the stock markets could be affected as global investors booked profits in emerging markets like India, to offset losses in other parts of the world, they said.
“The developments in Europe are unlikely to hurt the earnings potential of Indian companies, but investors may question the price-to-earning multiple of (Indian) equities,” said Kenneth Andrade, head-investments, IDFC SSKI Asset Management.
Indian shares are trading 16-17 times estimated earnings for the current financial year, and most investment managers say they are neither cheap nor too expensive.
BSE’s 30-share Sensex shed 310.54 points, or 1.8%, to close at 17,380.08. The 50-share Nifty crashed 92.90 points to close at 5,215.45. Key markets in Asia ended 1-2% down, and European markets too declined 1-2%.
“While valuations in India are not too stretched, in the immediate term, we remain anxious about the global risk trade unwinding,” said Keshav Sanghi, MD and head of equities, Citigroup Global Markets, India. Bond prices moved up a little and traders expect that the 10-year government paper to be auctioned on Friday will have a yield of below 8%.
Provisional data on the stock exchanges showed foreign funds were not heavy sellers even as many second-line shares fell sharply. Overseas investors net sold Rs 131 crore of shares while domestic institutions bought Rs 324 crore of shares on a net basis. So far in 2010, foreign funds have net bought $6 billion of Indian shares.
Market players expect more volatility on Thursday because of the expiry of derivatives contracts. If the downtrend persists, many traders holding long positions may choose not to carry them forward.
“Emerging markets in Asia have not yet seen a knock-on contagion impact on account of Greece and Portugal and retraced less than Brazil or Mexico today,” Mr Sanghi said. “I believe that there are quite a few macro international variables that still need resolution and the market is in a wait-and-watch mode near term,” Mr Sanghi added.
In the global markets, yields on Greek two-year debt soared to a record 26% and the euro hovered around near a one-year low against the dollar as investors worried that the sovereign debt crisis in parts of Europe may soon spread to markets as well.
Shares of metal, oil and gas, and realty companies were the worst affected, with the respective sectoral indices on BSE falling 2-3%. Shares of FMCG and healthcare companies closed flat to slightly lower, as investors moved a part of their money to defensive stocks.
“The problems of Greece do not have any direct implications for India,” said Vikram Kotak, chief investment officer, Birla Sun Life Insurance.
“But the big worry is a series of bad news—interest rate hike, inflation, high valuations, spate of share offerings—hitting all at once. We see the Sensex moving in a range of 14,000-18,000 over the next few months. But at the moment, a correction appears more likely,” said Mr Kotak.
Top gainers & losers I Q4 Earnings I Top 5 stock picks
Pre Market: Stocks seen subdued; F&O expiry watched
Downward pressure likely to stay in the near term
Great Offshore, Bharti, Indian Hotel, PVR potential investment targets
HDFC board to consider stock-split
Markets may head to 15K level: Shankar Sharma
Src: ET and DP blog
contagion seems to be spreading fast across Europe. Ratings major Standard & Poor’s (S&P) on Wednesday cut its ratings on Spain by one notch to AA from AA-plus.
Earlier in the day, Indian shares joined the worldwide slide in equities and commodities, after S&P had lowered Greece’s debt rating to junk and that of Portugal by two notches on Tuesday.
Brokers and fund managers said the outlook on India’s economy and corporate earnings remained upbeat, notwithstanding the latest upheavals in Europe. But the flow of foreign money into the stock markets could be affected as global investors booked profits in emerging markets like India, to offset losses in other parts of the world, they said.
“The developments in Europe are unlikely to hurt the earnings potential of Indian companies, but investors may question the price-to-earning multiple of (Indian) equities,” said Kenneth Andrade, head-investments, IDFC SSKI Asset Management.
Indian shares are trading 16-17 times estimated earnings for the current financial year, and most investment managers say they are neither cheap nor too expensive.
BSE’s 30-share Sensex shed 310.54 points, or 1.8%, to close at 17,380.08. The 50-share Nifty crashed 92.90 points to close at 5,215.45. Key markets in Asia ended 1-2% down, and European markets too declined 1-2%.
“While valuations in India are not too stretched, in the immediate term, we remain anxious about the global risk trade unwinding,” said Keshav Sanghi, MD and head of equities, Citigroup Global Markets, India. Bond prices moved up a little and traders expect that the 10-year government paper to be auctioned on Friday will have a yield of below 8%.
Provisional data on the stock exchanges showed foreign funds were not heavy sellers even as many second-line shares fell sharply. Overseas investors net sold Rs 131 crore of shares while domestic institutions bought Rs 324 crore of shares on a net basis. So far in 2010, foreign funds have net bought $6 billion of Indian shares.
Market players expect more volatility on Thursday because of the expiry of derivatives contracts. If the downtrend persists, many traders holding long positions may choose not to carry them forward.
“Emerging markets in Asia have not yet seen a knock-on contagion impact on account of Greece and Portugal and retraced less than Brazil or Mexico today,” Mr Sanghi said. “I believe that there are quite a few macro international variables that still need resolution and the market is in a wait-and-watch mode near term,” Mr Sanghi added.
In the global markets, yields on Greek two-year debt soared to a record 26% and the euro hovered around near a one-year low against the dollar as investors worried that the sovereign debt crisis in parts of Europe may soon spread to markets as well.
Shares of metal, oil and gas, and realty companies were the worst affected, with the respective sectoral indices on BSE falling 2-3%. Shares of FMCG and healthcare companies closed flat to slightly lower, as investors moved a part of their money to defensive stocks.
“The problems of Greece do not have any direct implications for India,” said Vikram Kotak, chief investment officer, Birla Sun Life Insurance.
“But the big worry is a series of bad news—interest rate hike, inflation, high valuations, spate of share offerings—hitting all at once. We see the Sensex moving in a range of 14,000-18,000 over the next few months. But at the moment, a correction appears more likely,” said Mr Kotak.
Top gainers & losers I Q4 Earnings I Top 5 stock picks
Pre Market: Stocks seen subdued; F&O expiry watched
Downward pressure likely to stay in the near term
Great Offshore, Bharti, Indian Hotel, PVR potential investment targets
HDFC board to consider stock-split
Markets may head to 15K level: Shankar Sharma
SJVNL IPO
DLF Limited
Patni Computers
Container Corporation
Manappuram General Finance
Tara Health Foods
SJVNL IPO Analysis
Src: ET and DP blog
28 April 2010
Global mkts in a tizzy as S&P junks Greece
Global mkts in a tizzy as S&P junks Greece
MUMBAI: Stocks, bonds, crude oil and commodities tumbled as investors feared a wave of sovereign debt crisis, similar to the 1997 Asian crisis, after Standard & Poor’s cut Greece’s rating to junk and lowered Portugal two notches. Safe haven gold rose.
Investors fear the downgrade of these two nations may be the beginning of a series of such moves as most governments are burdened with debt after they spent their way out of recession following the credit crisis. Even the US is under threat of losing its top rating.
“The biggest risk now is that the market speculates against every single indebted peripheral country, and that could lead to a sovereign debt crisis,” Axel Botte, a strategist at AXA Investment Managers in Paris, told Bloomberg News. “The contagion risk is real. It’s much easier to bail out a bank than to bail out a country.”
The Stoxx Europe 600 Index slid 3.1% in New York, Standard & Poor’s 500 Index lost 1.6%, crude oil sank 2.4%, while copper plunged 4.3%. ADRs of ICICI Bank and HDFC Bank crashed. Gold rose 0.7%, or $8, to $1161.57 an ounce.
Standard & Poor’s cut Greece three levels to BB+, or junk, and lowered Portugal two steps to A- as they stare at a default. Greek notes slid earlier as concern deepened that the nation will ask investors to accept delayed or reduced debt payments.
The European Union, which had pledged to support Greece, has been dragging its feet on the conditionalities to extend a bailout. Emerging markets could be the worst-hit in a sovereign crisis as global investors pull out funds in a flight to safety.
Global investors could sell developing market stocks and bonds, and buy US treasuries or German bonds which are considered the safest. The cost of borrowing for both companies and countries are set to rise.
“We could see another wave of forced deleveraging, which could obviously affect any high-yielding assets, including emerging-markets debt,” Luis Costa, an emerging markets strategist at Citigroup, was quoted as saying by Bloomberg.
The average spread for emerging-market bonds over the US treasury climbed 18 basis points to 261 basis points, the largest increase since February.
A basis point is 0.01 percentage point. The MSCI Emerging Markets Index dropped 1.7% and Brazil’s Bovespa index tumbled 2.4%. The Shanghai Composite Index sank 2.1% earlier to a six-month low, the most since February 5.
“We’re entering a phase of blind panic,” said Orlando Green, an interest-rate strategist at Credit Agricole CIB in London. “Given the inaction of the euro nations to back Greece and to get things done quickly, we’ve found now this inaction has been a big obstacle. That’s not satisfying for the markets, and not for S&P either; hence, the downgrade.”
Related News:
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Pre Market: Weak start likely as Greece contagion pressures global equities
Funds rethink India, China strategy: Morgan Stanley
Top gainers & losers I Top 5 stock picks I Mid-term picks
Coromandel a good stock to buy: Gaurang Shah
SC verdict on RIL-RNRL gas case in next few days: Sources
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Src: ET and Moneycontrol and DP blog etc
MUMBAI: Stocks, bonds, crude oil and commodities tumbled as investors feared a wave of sovereign debt crisis, similar to the 1997 Asian crisis, after Standard & Poor’s cut Greece’s rating to junk and lowered Portugal two notches. Safe haven gold rose.
Investors fear the downgrade of these two nations may be the beginning of a series of such moves as most governments are burdened with debt after they spent their way out of recession following the credit crisis. Even the US is under threat of losing its top rating.
“The biggest risk now is that the market speculates against every single indebted peripheral country, and that could lead to a sovereign debt crisis,” Axel Botte, a strategist at AXA Investment Managers in Paris, told Bloomberg News. “The contagion risk is real. It’s much easier to bail out a bank than to bail out a country.”
The Stoxx Europe 600 Index slid 3.1% in New York, Standard & Poor’s 500 Index lost 1.6%, crude oil sank 2.4%, while copper plunged 4.3%. ADRs of ICICI Bank and HDFC Bank crashed. Gold rose 0.7%, or $8, to $1161.57 an ounce.
Standard & Poor’s cut Greece three levels to BB+, or junk, and lowered Portugal two steps to A- as they stare at a default. Greek notes slid earlier as concern deepened that the nation will ask investors to accept delayed or reduced debt payments.
The European Union, which had pledged to support Greece, has been dragging its feet on the conditionalities to extend a bailout. Emerging markets could be the worst-hit in a sovereign crisis as global investors pull out funds in a flight to safety.
Global investors could sell developing market stocks and bonds, and buy US treasuries or German bonds which are considered the safest. The cost of borrowing for both companies and countries are set to rise.
“We could see another wave of forced deleveraging, which could obviously affect any high-yielding assets, including emerging-markets debt,” Luis Costa, an emerging markets strategist at Citigroup, was quoted as saying by Bloomberg.
The average spread for emerging-market bonds over the US treasury climbed 18 basis points to 261 basis points, the largest increase since February.
A basis point is 0.01 percentage point. The MSCI Emerging Markets Index dropped 1.7% and Brazil’s Bovespa index tumbled 2.4%. The Shanghai Composite Index sank 2.1% earlier to a six-month low, the most since February 5.
“We’re entering a phase of blind panic,” said Orlando Green, an interest-rate strategist at Credit Agricole CIB in London. “Given the inaction of the euro nations to back Greece and to get things done quickly, we’ve found now this inaction has been a big obstacle. That’s not satisfying for the markets, and not for S&P either; hence, the downgrade.”
Related News:
Wall St slips on Greece, Portugal rating downgrade
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Pre Market: Weak start likely as Greece contagion pressures global equities
Funds rethink India, China strategy: Morgan Stanley
Top gainers & losers I Top 5 stock picks I Mid-term picks
Coromandel a good stock to buy: Gaurang Shah
SC verdict on RIL-RNRL gas case in next few days: Sources
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Jayant Agro-Organics
Sterlite Industries
IRB Infrastructure Developers
Indian Bank
Maruti Suzuki
Mandhana Industries IPO Note
Tara Health Foods IPO Analysis
Tarapur - Mandhana - Nitesh - Grey Market Premiums
Src: ET and Moneycontrol and DP blog etc
19 March 2010
Morning calls
S&P upgrades India to 'stable'
MUMBAI: GLOBAL credit rating agency Standard & Poor’s on Thursday revised the outlook on India to `stable’ from `negative’ due to
improved government finances—a move that could marginally lower the borrowing cost of India Inc and support equities.
The decision not only dispelled fears of an immediate downgrade, but also revived hopes that India’s fiscal position could now begin to recover. The agency, which identified inflation as the only downside, also affirmed the ‘BBB-’ long-term and ‘A-3’ short-term sovereign credit ratings on India. Ratings below `BBB-’ are non-investment grade.
Bond prices rose soon after the announcement, but slipped after RBI deputy governor KC Chakrabarty indicated that the central bank may hike interest rates before the April policy “if it is inevitable and the price situation warrants”.
The outlook revision follows the government’s decision to prune subsidies. “The decision to change the fertiliser policy to implement a nutrient-based pricing policy and to raise urea prices by 10% from April 2010 is a step forward for the reduction of subsidies. The budget also announced an average increase in the prices of domestic petroleum and diesel of 6% and 7.8%, respectively,” S&P said.
“The move is largely in line with expectations... We expect to see further positive rating action over the near term,” says V Srikanth, managing director & head of markets, Citi South Asia.
The immediate beneficiaries would be local lenders like Axis Bank, ICICI, Bank of India and Bank of Baroda, which are planning to raise $2 billion overseas and large corporate groups such as Essar planning to raise foreign currency debt. “The borrowing cost should improve by around 5 bps. Many Indian corporates are expected to hit the market in two to three months. There is also a pipeline of Indian issuers in the international market from the financial world and this rating improvement should help the pipeline get executed in the near term, “ said Munish R Varma, MD and head-global markets, Deutsche Bank India.
Last February, S&P had revised India’s rating outlook to negative after the government over-stretched its finances to introduce a fiscal stimulus prop up the economy.
On Friday, S&P credit analyst Takahira Ogawa said, "We expect India's GDP growth to be 8% in the fiscal year ending March 31, 2011, which is higher than that of many other countries and exceeds our previous expectations.” In addition, Standard & Poor's views India's external position as resilient. "We expect the country's ratio of gross external financing need to current account receipts plus international reserves to remain stable at 77% in fiscal 2010."
The Union budget targets a general government (including central and state governments) deficit of 8.3% in the fiscal year ending March 31, 2011, from 9.8% in the previous fiscal year. Besides, the government has indicated that it intends to follow the medium-term fiscal consolidation plan outlined by the 13th Finance Commission. The commission recommended that the general government deficit be reduced to 5.4% of GDP, and the ratio of general government debt to GDP be lowered to 68% of GDP by the fiscal year ending 2015.
However, the ratings continue to be constrained by the high government debt burden and deficit, and India's weak fiscal profile. The consolidated debt of India's central and state (general) governments is estimated at 80% of GDP (by our definition) in the current fiscal year while interest payments are likely to consume about 27% of general government revenues.
"In our opinion, the recent high inflation rate could also derail the stable macroeconomic and interest rate environments," said Mr Ogawa. S&P has said an upgrade would depend on the government's ability to reduce the public sector's deficits materially. Conversely, if the government continues its loose fiscal policy or there are policy setbacks on monetary, financial and economic fronts that lower India's medium-term growth prospects, it could result in a downward pressure on the ratings.
*************************************
Dollar carry trade may trigger market rally
Pre-Market: Stocks seen ranged; be cautious while taking fresh positions
Top 5 picks
Heard on the Street: FIs, HNIs lap up JSW Steel on steel price hike comfort
FIs, HNIs lap up JSW Steel on steel price hike
comfort
Institutions and high net worth individuals (HNIs) have been accumulating JSW Steel shares over the past few days on expectations that the company could benefit from a hike in steel prices shortly. On Thursday, the stock closed at Rs 1,248.10, up 2% over the previous close after touching a 52-week high of Rs 1,251.80 intra-day.
According to analysts, since Chinese exporters have increased offer prices of re-rolling grade by $20 per tonne to $630, Indian steelmakers are expected to follow suit. However, it’s not clear whether these prices are sustainable due to additional capacities coming on stream. The steel industry in India is considered to be the world’s second-fastest growing market after China.
Investors flock to Bharat Elect on bonus issue hopes
Shares of Bharat Electronics have been in the thick of activity, of late. Traders are speculating that the company will use its cash reserves to announce a bonus share issue. A bonus share issue will increase liquidity in the stock, which tends to be choppy because of its low free-float.
According to institutional dealers, some domestic mutual funds have been paring their holdings in the stock in the past few weeks, while foreign institutions have absorbed this supply. Stock backers expect the company to be a key beneficiary of higher investments towards defence equipment. The stock closed at Rs 2,100, down marginally over the previous close.
UK bank’s MF arm seen looking to exit India AMC biz
The mutual fund industry is abuzz with yet another round of asset sale. This time, it is the mutual fund arm of a UK-headquartered bank. According to sources, ‘King Kong Bank Asset Management’ is scouting for a buyer. The foreign fund house has been looking to exit asset management business in India over the past few years.
It had approached several prospective buyers during the bull-run in 2007. Apart from ‘King Kong Bank Asset Management’, there are rumours of Orange Lion Mutual Fund also wanting to sell its Indian fund assets. Low investor turnout and increasing distribution expenses are said to be the main reasons for these asset management companies exiting mutual fund business.
HNIs turn to Apollo Hospital as they see a rerating
Shares of Apollo Hospital Enterprises are being accumulated by high net worth investors (HNIs) betting on a re-rating of the healthcare services industry. The stock has been inching up over the past couple of months, and closed at Rs 716.50 on Thursday, up 1.2% over the previous couple. Dealers tracking the stock say it is cheaper when compared to Fortis Healthcare, which has seen a sharp upswing in the past one month. However, institutional investors are not yet taking the bait. Apollo Healthcare has been a laggard for some years now and fund managers gripe that the management has done little to improve investor perception.
(Contributed by Apurv Gupta, Shailesh Menon & Santosh Nair)
*****************************************
Src: ET and DP blog etc
MUMBAI: GLOBAL credit rating agency Standard & Poor’s on Thursday revised the outlook on India to `stable’ from `negative’ due to
The decision not only dispelled fears of an immediate downgrade, but also revived hopes that India’s fiscal position could now begin to recover. The agency, which identified inflation as the only downside, also affirmed the ‘BBB-’ long-term and ‘A-3’ short-term sovereign credit ratings on India. Ratings below `BBB-’ are non-investment grade.
Bond prices rose soon after the announcement, but slipped after RBI deputy governor KC Chakrabarty indicated that the central bank may hike interest rates before the April policy “if it is inevitable and the price situation warrants”.
The outlook revision follows the government’s decision to prune subsidies. “The decision to change the fertiliser policy to implement a nutrient-based pricing policy and to raise urea prices by 10% from April 2010 is a step forward for the reduction of subsidies. The budget also announced an average increase in the prices of domestic petroleum and diesel of 6% and 7.8%, respectively,” S&P said.
“The move is largely in line with expectations... We expect to see further positive rating action over the near term,” says V Srikanth, managing director & head of markets, Citi South Asia.
The immediate beneficiaries would be local lenders like Axis Bank, ICICI, Bank of India and Bank of Baroda, which are planning to raise $2 billion overseas and large corporate groups such as Essar planning to raise foreign currency debt. “The borrowing cost should improve by around 5 bps. Many Indian corporates are expected to hit the market in two to three months. There is also a pipeline of Indian issuers in the international market from the financial world and this rating improvement should help the pipeline get executed in the near term, “ said Munish R Varma, MD and head-global markets, Deutsche Bank India.
Last February, S&P had revised India’s rating outlook to negative after the government over-stretched its finances to introduce a fiscal stimulus prop up the economy.
On Friday, S&P credit analyst Takahira Ogawa said, "We expect India's GDP growth to be 8% in the fiscal year ending March 31, 2011, which is higher than that of many other countries and exceeds our previous expectations.” In addition, Standard & Poor's views India's external position as resilient. "We expect the country's ratio of gross external financing need to current account receipts plus international reserves to remain stable at 77% in fiscal 2010."
The Union budget targets a general government (including central and state governments) deficit of 8.3% in the fiscal year ending March 31, 2011, from 9.8% in the previous fiscal year. Besides, the government has indicated that it intends to follow the medium-term fiscal consolidation plan outlined by the 13th Finance Commission. The commission recommended that the general government deficit be reduced to 5.4% of GDP, and the ratio of general government debt to GDP be lowered to 68% of GDP by the fiscal year ending 2015.
However, the ratings continue to be constrained by the high government debt burden and deficit, and India's weak fiscal profile. The consolidated debt of India's central and state (general) governments is estimated at 80% of GDP (by our definition) in the current fiscal year while interest payments are likely to consume about 27% of general government revenues.
"In our opinion, the recent high inflation rate could also derail the stable macroeconomic and interest rate environments," said Mr Ogawa. S&P has said an upgrade would depend on the government's ability to reduce the public sector's deficits materially. Conversely, if the government continues its loose fiscal policy or there are policy setbacks on monetary, financial and economic fronts that lower India's medium-term growth prospects, it could result in a downward pressure on the ratings.
*************************************
Dollar carry trade may trigger market rally
Pre-Market: Stocks seen ranged; be cautious while taking fresh positions
Top 5 picks
Heard on the Street: FIs, HNIs lap up JSW Steel on steel price hike comfort
FIs, HNIs lap up JSW Steel on steel price hike
Institutions and high net worth individuals (HNIs) have been accumulating JSW Steel shares over the past few days on expectations that the company could benefit from a hike in steel prices shortly. On Thursday, the stock closed at Rs 1,248.10, up 2% over the previous close after touching a 52-week high of Rs 1,251.80 intra-day.
According to analysts, since Chinese exporters have increased offer prices of re-rolling grade by $20 per tonne to $630, Indian steelmakers are expected to follow suit. However, it’s not clear whether these prices are sustainable due to additional capacities coming on stream. The steel industry in India is considered to be the world’s second-fastest growing market after China.
Investors flock to Bharat Elect on bonus issue hopes
Shares of Bharat Electronics have been in the thick of activity, of late. Traders are speculating that the company will use its cash reserves to announce a bonus share issue. A bonus share issue will increase liquidity in the stock, which tends to be choppy because of its low free-float.
According to institutional dealers, some domestic mutual funds have been paring their holdings in the stock in the past few weeks, while foreign institutions have absorbed this supply. Stock backers expect the company to be a key beneficiary of higher investments towards defence equipment. The stock closed at Rs 2,100, down marginally over the previous close.
UK bank’s MF arm seen looking to exit India AMC biz
The mutual fund industry is abuzz with yet another round of asset sale. This time, it is the mutual fund arm of a UK-headquartered bank. According to sources, ‘King Kong Bank Asset Management’ is scouting for a buyer. The foreign fund house has been looking to exit asset management business in India over the past few years.
It had approached several prospective buyers during the bull-run in 2007. Apart from ‘King Kong Bank Asset Management’, there are rumours of Orange Lion Mutual Fund also wanting to sell its Indian fund assets. Low investor turnout and increasing distribution expenses are said to be the main reasons for these asset management companies exiting mutual fund business.
HNIs turn to Apollo Hospital as they see a rerating
Shares of Apollo Hospital Enterprises are being accumulated by high net worth investors (HNIs) betting on a re-rating of the healthcare services industry. The stock has been inching up over the past couple of months, and closed at Rs 716.50 on Thursday, up 1.2% over the previous couple. Dealers tracking the stock say it is cheaper when compared to Fortis Healthcare, which has seen a sharp upswing in the past one month. However, institutional investors are not yet taking the bait. Apollo Healthcare has been a laggard for some years now and fund managers gripe that the management has done little to improve investor perception.
(Contributed by Apurv Gupta, Shailesh Menon & Santosh Nair)
*****************************************
Daily News Roundup - March 19 2010
Joy of being stable!
Shree Ganesh Jewellery House IPO Analysis
Src: ET and DP blog etc
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