Heard on the Street

Heard on the Street


Tata Steel back on bears’ radar

Bears are learnt to be having another go at the Tata Steel stock, despite having been caught on the wrong foot by better-than-expected quarterly numbers. Many of the traders, who had covered up their short positions last Wednesday, are said to have built up fresh ones on Friday, betting on a near-term downtrend in the stock. While the latest set of quarterly numbers came as a pleasant surprise, leading brokerage firms are divided on the outlook for the stock.

Those bullish on the company are expecting a decent recovery in demand for steel in the European market, while those bearish on the stock feel an improvement in the European operations will be much slower, because of sluggish demand. Tata Steel shares ended the day at Rs 572, up 1.7% over the previous close.

Party may be over for auto cos

Apprehension over an imminent hike in excise duty has resulted in most fund houses reducing their investments in stocks of automobile companies recently. According to analysts tracking the sector, the party for auto companies is drawing to a close over growing apprehensions of a roll-back in stimulus package, a spike in raw material costs and rise in consumer loan rates.

There is talk that with demand being robust, the government will increase excise duty on passenger vehicles between 2% and 4%, which will shave-off profit margins by a good measure. The government had reduced excise duty from 12% to 8% in December 2008. Rising costs of input materials like aluminium, steel and rubber will upset the pricing flexibility of auto manufacturers, say analysts.

Punters take a shot at Renuka Sugars

Traders, with long positions in shares of Shree Renuka Sugars had some anxious moments on Monday. Many brokers had recommended a trading buy on the stock soon after the company’s announcement to buy a majority stake in a Brazilian sugar firm for Rs 1,530 crore. But, the stock opened lower and stayed there for some time, forcing the traders to unwind their long positions.

According to brokers, a few operators managed to spark some panic among these traders by selling aggressively to create a perception that the deal would impact the company’s finances. They relied on the recent trend in large overseas acquisitions, where the event followed a sell-off in the stock of the buyer company. Within an hour into the trading session, these operators started covering their short positions, thereby leading to a sharp rebound in the stock.

Contributed by Nishanth Vasudevan, Santosh Nair & Shailesh Menon


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HDIL, SBI, Piramal Healthcare, Educomp Solutions

ITC

PFC

Cement Sector

United Bank of India IPO Review

IRB Infrastructure Developers

Src: ET, Dp Blog

Two Sites

http://pivottrading.50webs.com/pivot/pivot/elliot.html



http://www.niftystockpivot.blogspot.com/



Use these Blogs/Webs for Your Technicals

Key support at 4675, resistance at 4930

Key support at 4,675, resistance at 4,930


The market topped out at Nifty 4,929 points before sliding into another downtrend. The week closed with marginal net changes. The Nifty was last seen at 4,844.9, for a week-on-week gain of 0.4 per cent. The Sensex was up 0.2 per cent at 16,191. The Defty rose 0.5 per cent due to some rupee strengthening.

Breadth and background indicators were poor. The BSE 500 was down 0.1 per cent and the Midcaps were down 0.4 per cent while the Nifty Junior was down 0.5 per cent. Advances were outnumbered more than 4:1 by declines. Volumes were low and many smaller stocks weren't traded at all. The FIIs were moderate buyers while domestic institutions were net sellers.

Outlook: The market is in another short-term downtrend and it is likely to test support between 4,650 and 4,750 again. In all probability the next 5-10 sessions will see range-trading between 4,650 and 4,950 with a fair amount of intra-day volatility. We will get a clearer picture of the direction of intermediate and long-term trends over the next week.

Rationale: The short-term signals are negative and the market is not yet oversold enough to trigger a technical bounce on Monday. The last bottom was 4,675 on February 8. That was just above the 200 Day Moving Average, which suggests the long-term bull market is still intact. If the next bottom is at, or above 4,675, the pattern of higher lows would suggest that the intermediate downtrend, (which is now in week 6), is changing. A close below the 200 DMA (between 4,670 and 4,720 depending on calculation mode) would, on the other hand, suggest the long-term trend has gone bearish.

Counter-view: There is bound to be some short-covering and speculative buying immediately pre-Budget in settlement week. If the market does climb past 4,929 on the upside, we will have a pattern of higher highs, which would again signal an improving intermediate trend. The market is unlikely to “make up its mind” before the Budget so, range-trading between roughly 4,650 and 4,950 seems the most likely pattern until settlement.

Bulls and Bears: Most sectors fell last week and stocks outside the F&O ambit suffered from lack of liquidity as well. Trader should stay out of all but the largest scrips in this situation. Metals and realty were especially badly affected by selling. Sugar also saw a lot of selling. Telecom was hard-hit by a combination of poor quarterly results and Bharti's Zain deal, which was considered cause for selling by many operators.

Banks and IT were outperformers, with the Bank Nifty and CNXIT indices both up by over 1 per cent. But both sectors looked weak by Friday. There was some defensive buying in pharma and some speculative buying in energy stocks.

As things stand, a lot of pivotal scrips are sitting close to critical supports. Given the poor breadth signals, the chances are, some will crash. In other cases, profit-booking and renewed buying could trigger a bounce but that is more likely to occur close to settlement.

MICRO TECHNICALS

Bharti Airtel
Current price: Rs 278.80
Target Price: Rs 255

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The stock has broken key support at Rs 300 on heavy selling and could be heading for a multi-year low at around Rs 255. There is some support at Rs 275-280 and again at Rs 265. Keep a stop at Rs 285 and short. Cover 50 per cent of the position at Rs 265 and reset the stop loss to Rs 270. Clear the position at Rs 255.

SBI
Current price: Rs 1,905
Target Price: Rs 1,850

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The stock has been sold down to a critical support. If SBI closes below Rs 1,900, it will fall to Rs 1,850 and maybe lower, to Rs 1,800. Keep a stop at Rs 1,920 and short. Increase the position below Rs 1,900. Book 75 per cent profit at Rs 1,850 and reset the stop to Rs 1,860 with a new target of Rs 1,800.

Bharat Forge
Current price: Rs 243.65
Target Price: Rs 265

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The stock has been sold down to a strong support. It has the potential to bounce back till around the Rs 265 level. Keep a stop at Rs 240 and go long. Book partial profits at Rs 255 and reset the stop loss till Rs 250. Clear the position at Rs 265.

HDIL
Current price: Rs 302
Target Price: Rs 320

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The stock has found firm support at the current price and it could easily make a technical recovery till the Rs 320 mark. Keep a stop at Rs 295 and go long. Book partial profits at Rs 314 and reset the stop to Rs 310. Clear the position above Rs 320.

(The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.)

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Smart Portfolios see marginal losses 22-FEB-10 The Smart Portfolios saw marginal losses a week ahead of the Union Budget.

Markets at a glance 22-FEB-10 Markets managed to post modest gains after witnessing bouts of volatility throughout the week driven by global factors.

Analysts' corner 22-FEB-10 Hindalco’s subsidiary, Novelis, reported strong set of numbers for December 2009 quarter.

Bias is negative 22-FEB-10 Traders should keep a target range of 4,600-5,000 for the settlement.

Key support at 4,675, resistance at 4,930 22-FEB-10 Short term downtrend in force.

The sugar decay 22-FEB-10 Shorting sugar really or metaphorically is possible and healthy.

On a strong wicket 22-FEB-10 Given the track record, strong order book, growth opportunities and reasonable valuations, Man Infra’s IPO could deliver healthy returns.

Electrifying prospects 22-FEB-10 A robust track record, healthy outlook and reasonable pricing make REC’s offer attractive.

Regional player 22-FEB-10 While UBI’s small size and insipid financials do not excite, its IPO pricing is attractive.

Calling Africa again 22-FEB-10 Bharti Airtel’s move to acquire Zain’s Africa-based telecom operations could put pressure on the former’s resources in the short term.

Tightrope walk 22-FEB-10 Maintaining a balance between growth and fiscal discipline will be the Finance Minister’s key challenge.

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Analysts' pick: Sunteck Realty, Colgate Palmolive, BoI, Indraprasta Gas

Infrastructure

BPCL

Budget Preview - Feb 22 2010

Mahindra and Mahindra

Tata Steel

Reliance Industries

Weekly Newsletter - Feb 22 2010

Src: Business-Standard, ET, DP Blog etc

Wkly Tech Analysis: Free fall seen below 15900

Wkly Tech Analysis: Free fall seen below 15,900

The markets after showing signs of recovery pared gains towards the end of the week. It still settled with a marginal gain, as global factors came into play. The Indian market firmed up mid-week after a subdued start, while other major global markets were closed. However, after the resumption of trading abroad, weakness was seen especially on Friday, which saw our markets pare almost the entire gain.

The Sensex after touching a low of 16,011, rallied to a high of 16,481. It slipped later and settled with a marginal gain of 39 points at 16,192. Other major global markets such as the US, Hong Kong, Japan and China were shut during the week for a day or two. In fact, China and Taiwan were shut throughout the week.

Among the index stocks — Hindalco surged over 8 per cent to Rs 150, and HDFC Bank rallied 6.5 per cent to Rs 1,700. Tata Steel, HDFC and Hindustan Unilever were the other major gainers. On the other hand, Bharti Airtel slumped 11.5 per cent to Rs 278. Reliance Infrastructure, DLF, Reliance Communications, Reliance and Sterlite were the other prominent losers this week.

Given the fact that we are headed to a week which will be dominated by the expiry of the February derivatives series and the Union Budget, predicting the direction of the market will be all the more difficult. One needs to be prepared for high volatility and keep an eye on key levels. The best strategy is to stay put till uncertainties vanish.

The Sensex is currently below its short-term moving average both on daily (20-day) and weekly (20-week) charts. The short-term moving average on the daily chart is at 16,240, while the short-term weekly moving average is at 16,784. The bias will remain down as long as the index trades below its short-term weekly moving average.

Although the Sensex has near support at 16,000, one needs to carefully watch 15,900 as a key level, for a break below 15,900 could trigger a free fall up to 15,300 at least.

The NSE Nifty moved in a range of 146 points, from a low of 4,784, the index moved up to a high of 4,930, and finally closed with a gain of 18 points at 4,845.

Next week, the Nifty is likely to face resistance around 4,900-4,918-4,935, while it may seek support around 4,813-4,772-4,755.

The daily short-term moving average of the index is at 4,854, and the short-term weekly moving average is at 5,001. The long-term (200-day) moving average on the daily chart is at 4,719, and the weekly long-term moving average at 4,200.

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TECHNICAL ANALYSIS: Index Outlook: Awaiting Budget day gyrations
The week ahead promises edge-of-the-seat excitement as the Union Budget jamboree unfolds. The Railway Budget will get things chugging on Wednesday followed by the much-prognosticated Union Budget on Friday. Thursday will be livened up by ...

STOCKS: Unitech: Buy
STOCKS: OnMobile Global Services: Hold
Investors with a two-year horizon can retain the shares of Onmobile Global Services, a mobile value-added services provider, given the strong revenue growth in lucrative overseas markets that are likely to kick in over the next 12-18 months. ...

STOCKS: Madras Cements: Book Profits
Investors can consider booking profit in the stock of Madras Cements and entering it at lower levels later. The stock's fundamentals do not warrant significant upside from here over the next ...

IPOS: United Bank of India — IPO: Avoid
Investors can refrain from subscribing to the United Bank of India's public offer. Though the offer is modestly priced, the bank doesn't appear to be a preferred exposure in the banking space, where there are a large number of other ...

TECHNICAL ANALYSIS: Sizzling Stocks
Bharti Airtel gave investors the jitters last week as it turned tail following the announcement of its offer to buy the African operations of Kuwait telecommunications company, Zain. The stock lost 14 per cent in the first two sessions of ...

PUBLIC OFFER: REC — FPO: Invest
Investors can subscribe to the follow-on offer from Rural Electrification Corporation (REC), as the valuation at which the offer is made is reasonable in the light of the strong earnings visibility and growth expectations. REC, which ...

STOCKS: Gujarat State Petronet: Buy
Gujarat State Petronet Ltd (GSPL), engaged in natural gas transmission, presents a good buying proposition for investors with a medium-term perspective. At the current price of Rs 87, the stock discounts the trailing 12-month earnings by ...

MUTUAL FUNDS: HDFC Equity Fund: Invest
Investors with a long-term perspective can consider buying the units of HDFC Equity Fund. Over a decade old, the fund boasts of not just an impressive scorecard, but also of consistent out-performance over its benchmark CNX-500, one not easy ...

MUTUAL FUNDS: Tata Life Sciences and Technology: Hold
Investors can retain Tata Life Sciences and Technology fund considering its long-term track record. The fund invests in the technology space as well as in the pharma sector — the latter considered as a defensive exposure. The fund, over ...

INSIGHT: Macro signals flash green, investors take cue
After jumping up joyfully at every scrap of economic data put out by the government throughout last year, the stock market has greeted macro-economic news with surprising apathy in recent months. Yet, there are several positive signals ...


TECHNICAL ANALYSIS: Query corner: Bhushan Steel moving sideways
Please give me your opinion on Petronet LNG purchased at Rs 76. Should I purchase more at current level or exit? Anuj Jain, ...

TECHNICAL ANALYSIS: Stock Strategy: Consider shorting SAIL, India Bulls Real Estate
India Bulls Real Estate (Rs 154.85): The stock has been in downtrend for quite sometime now. The recent fall has further pushed it closer to its crucial support level. Though the stock has a critical resistance at Rs 182, only a close above ...

MUTUAL FUNDS: Hang Seng BeES — Chance to buy into China
Credited with being the first foreign ETF in the country, Hang Seng BeES is the latest offering from Benchmark Asset Management Company. An open-ended index scheme, the Hang Seng BeES aims to provide its investors with returns (before ...

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DLF

Weekly Outlook - Feb 20 2010

Weekly Market Outlook - Feb 20 2010

Weekly Newsletter - Feb 20 2010

Weekly Watch - Feb 20 2010

Hindalco

Tata Motors

Bajaj Electricals

Bajaj Electricals

Weekly Wrap - Feb 20 2010

Dividend Yield Stocks

Budget Preview - Feb 20 2010

India Budget 2010-11 Preview

India Budget 2010-11 Preview

India Budget Preview - Feb 19 2010

Budget Preview - Feb 18 2010

Deepak Fertilizers

Man Infraconstruction IPO subscribed 6.87 times

Src: BusinessLine, Business Standard, DP Blog etc

Pre Market: Stocks to open lower on weak global cues

Pre Market: Stocks to open lower on weak global cues


MUMBAI: Equities are likely to extend losses on Friday tracking overseas declines. However, stock-specific action is expected on the back of Budget expectations. Fertilizer stocks may gain strength following the government’s decision to go ahead with the nutrient based subsidy plan.

“Nifty witnessed profit booking after seeing a 2.7% rally in the last two days. Reliance Industries which gave a positive signal in Wednesday’s session was down 3% on Thursday due to which we saw huge pressure on the Sensex. The intermediate rally which started from the lows of 4,675 is still intact unless Nifty breaks below 4,825 on the closing basis.

The daily RSI and MACD are still in a positive territory indicating that this positive uptrend will continue. Strong support is seen at 4,860-4,825 and stiff resistance at 4,920 - 4,950 levels. Nifty is currently in the tight trading band of 4950-4800 and unless we see a break of this range, markets will remain volatile with a positive bias,” said Nirmal Bang Securities.

US stocks rose for a third straight day on Thursday as investors viewed company results and manufacturing data as evidence the economic rebound will continue. Meanwhile, index futures tumbled after the Federal Reserve announced it was raising the discount rate that it charges banks for emergency loans.

The Dow Jones Industrial Average rose 83.66 points, or 0.81 percent, to 10,392.90. The Standard & Poor's 500 Index added 7.24 points, or 0.66 percent, to 1,106.75. The Nasdaq Composite Index gained 15.42 points, or 0.69 percent, to 2,241.71.

As a result, Asian stocks declined sending the Nikkei down 0.12 per cent and Topix down 0.07 per cent. Kospi dropped 0.08 per cent and Straits Times fell 0.2 per cent.

Back home, markets ended a choppy session on a weak note Thursday, taking cues from subdued global peers. Profit booking in index heavy-weight Reliance Industries put pressure on indices. Traders also took some profit home near resistance levels after a two-day rally.

Bombay Stock Exchange’s Sensex ended at 16327.84, down 101.07 points or 0.62 per cent. The index touched an intra-day low of 16287.17 and high of 16452.51.

National Stock Exchange’s Nifty closed at 4887.75, down 26.25 points or 0.53 per cent. The broader index hit a low of 4873.70 and high of 4922.05


Top 5 picks | Mid term picks | Gainers, Losers & analysts' recommendations

4800 level seen crucial for Nifty

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Heard on Street: Albula laps up Adani Power



Why are institutions so bullish on realty IPOs?

When an initial public offer (IPO) that is considered expensive gets oversubscribed, conspiracy theories usually follow the talk about the ‘real reasons’ behind the success. Such theories have been doing the rounds in the market, following the IPO success of one such developer recently. Grapevine has it that some of the leading investors in this issue were offered apartments at discounted rates to the market for subscribing to the IPO.

A robust subscription to an issue in the qualified institutional investors category is key to issuers and bankers for attracting the interest of retail investors, who usually look up to this category for cues to invest in an IPO. Such theories are not without reasons. When investors have been dumping shares of most leading developers, which has resulted in the realty index underperforming the benchmark since October, critics ask why these institutional investors are so bullish on realty public issues.

Albula laps up Adani Power as it reshuffles portfolio

The sluggish movement in Adani Power shares after the listing may have caused concern among its retail shareholders, but some investors still sense investment opportunity in the company, going by the trading pattern in the stock in the current market. On Wednesday, a

Sebi-registered FII sub-account Albula Investment Fund bought 43 lakh shares at Rs 108, around 8% higher than the price at which the company had come out with its public issue last year. According to brokers, purchases could be part of a portfolio reshuffling whereby a fund sells high-priced stock to buy a relatively cheaper one, a strategy mostly seen in volatile market conditions. Adani Power closed 1.1% down at Rs 107 on Thursday.

ICICIdirect gets go-ahead for digital KYC

Even as mutual fund distributors are grappling with the execution of the recent Sebi fiat on know your client (KYC) norms, one of the largest online distributors of mutual fund products, ICICIdirect, has been given the go-ahead for an electronically-scanned KYC. It may be recalled that mutual fund distributors had some time ago mooted a central bureau of registry for all KYC documentation.

The distributors have also been lobbying for an electronic
or digital KYC till such time a comprehensive system is in place. The rationale being that this would bring down the volume of paper in the system that would otherwise be generated if the distributors were to send a copy of all supporting documents to the AMCs with retrospective effect ie from 1999 as is the Sebi directive.

(Contributed by Nishanth Vasudevan, Vijay Gurav & Deeptha Rajkumar)


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Daily News Roundup - Feb 19 2010

Surprise on the Street!

Rural Electrification Corporation FPO

Polaris Software Ltd

ICICI Bank

Tata Steel

HDIL

Hexaware Technologies

Reliance Industries Ltd

Src: ET, DP Blog etc

Pre-Market: Stocks to open flat on mixed global cues

Pre-Market: Stocks to open flat on mixed global cues



MUMBAI: Stocks are likely to open flat-to-positive on Thursday amid mixed cues from global shores.

“Nifty continued to hold its positive momentum as strong leadership was seen in metals, oil & gas and banking stocks. Market volumes also picked up and it seems that bulls have taken control of the market. If in the near term, Nifty manages to hold 4,825 then it’s quite possible that this rally could extend further 5,050 levels.

The daily RSI and MACD are also giving positive signs indicating that this intermediate uptrend will continue. Strong support seen at 4,860-4,825 and stiff resistance at 4,950, this positive trend could get reverse only if Nifty closes below 4,800,” said Nirmal Bang Securities.

US stocks rose on Wednesday as stronger-than-expected earnings from companies, and upbeat economic data fueled bets that the recovery will bolster corporate profits. The Dow Jones Industrial Average rose 40.36 points, or 0.39 per cent, to end at 10,309.17. The Standard & Poor's 500 Index climbed 4.64 points, or 0.42 per cent, to end at 1,099.51. The Nasdaq Composite Index rose 12.10 points, or 0.55 percent, to 2,226.29.

Stocks across Asia were trading with marginal losses. The Nikkei slipped 0.12 per cent, Topix lost 0.14 per cent, Kospi shed 0.21 per cent and Straits Times fell 0.61 per cent.

Back home, equities ended above psychological resistance levels on Wednesday, taking cues from positive global markets. All the sectoral indices ended in the green led by metals, banks and capital goods.

Bombay Stock Exchange’s Sensex closed at 16428.91, up 202.23 points or 1.25 per cent. The index touched a high of 16480.49 and low of 16228.91.

National Stock Exchange’s Nifty ended at 4914, up 58.25 points or 1.2 per cent. The broader index hit a high of 4929.70 and low of 4857.60



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Stocks of MNCs sizzle on delisting hopes

18 Feb 2010, 0812 hrs IST, VIJAY GURAV,ET Bureau

MNCs gained between 2% and 26% compared to a 6% fall in Sensex since Jan 1. Top 5 picks | MNCs that outperformed Sensex |

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Heard on the street: Punters jack up spot prices of new F&O members



Punters jack up spot prices of new F&O members

It was a busy day for punters, as they bid up prices of stocks that will be added to NSE’s futures & options list from Friday. Godrej Industries, Videocon Industries and Mundra Port were among the prominent gainers of the day, rising in the 7-9% range accompanied by heavy volumes. Inclusion on the F&O list means that punters get more time to play around with these stocks. Interestingly, Godrej Industries, Mundra Port and BGR Energy witnessed a higher-than-usual-delivery ratio on Thursday.

Short-covering fires up Tata Steel stock

A frenetic bout of short-covering fired up Tata Steel shares over 6% to Rs 584.90 on Wednesday. Many traders and a quite a few hedge funds are said to have gone ‘short’ on the stock, anticipating weak quarterly numbers. But with its performance turning out to be better than expected, these players had to cover up their positions. Among those caught on the wrong foot included a market operator who shares his first name with the Union agriculture minister.

‘Friendly circles’ buy Ruchi Soya shares

Huge blocks of shares changed hands at the Ruchi Soya counter on Wednesday. However, FIs were not involved on either sides of the transaction. Given that “friendly circles” are regularly active in
the stock, the market is not taking much notice of the bulk deals.

Insurers mop up shares of Manappuram General Fin

A couple of insurers are said to be accumulating shares of Manappuram General Finance. The buzz is that the Kochi-based NBFC’s proposed QIP will be priced at Rs 700 per share. Manappuram aims to a raise about Rs 300 crore through the equity issue, to be completed over the next 10 days.

Ranbaxy trades flat as market awaits earnings

Ranbaxy shares closed flat in a buoyant market on Wednesday, after having shot up over 7% the previous session. The company is set to announce its fourth quarter numbers next week. The talk doing the rounds is that a prominent domestic broking firm, known for its strong base of high net worth investors, has bought a sizeable chunk of the stock on behalf of its ‘bulge bracket’ clients. Are they betting on the quarterly numbers?

(Contributed by Santosh Nair & Shailesh Menon)

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Tax Saving - Planning Options for Employees

Daily News Roundup - Feb 18 2010

Avoid the risk

India Infrastructure

United Bank of India sets IPO price band at Rs 60-66 a piece

PVR

Top Stocks for 2010

NHPC

Stock Picks

Bharti Airtel Limited

Sugar Sector

Src: ET, DP Blog and etc

Sensex may drop to 12K: Shankar Sharma

Sensex may drop to 12K: Shankar Sharma


ET Now caught up with Shankar Sharma, Vice Chairman & Joint MD, First Global to seek his views on where the markets were headed in 2010 and

Not a good time to start buying Mid term picks Top 5 picks of the day Correction offers opportunities

which stocks could be an attractive bet. Excerpts:

Where do you see the markets heading where in a surprising pullback, we have broken that resistance level that we were tracking. We are past 4900 on the Nifty. Do you actually see the markets witnessing a further correction in 2010 and what kind of returns do you expect from equities, especially in emerging markets?

The pullback was very much in order because we had sold off from 17,500 to 15,500. It can easily pull back another 200-500 points on the Sensex. This year is the down year for equities and within the context, emerging markets will do worse than the US markets. The markets that did really well in 2009, that is the BRIC pack, will actually underperform the markets. The markets that did not do that well, like Taiwan or South Korea, have relatively more stable markets than the volatile BRIC pack markets. Overall, this year is the down year for equities by and large.

When you say a down year, what kind of correction do you see both in the short-term and in the long-term?

In the short-term, we definitely do see the markets in the first half coming down 20-30% from the highs of the year, which was 17,500. The markets could easily go down to 12,000-12,500 in the first half and from there, I suspect there will be some measure of recovery. Markets could still ultimately end the year down 10-15% from the close of 2009 which may be around 16,000, but that is a long call or a long short to make just yet. For now, markets are headed lower. However, once they have reached a certain level, then we will see if things have changed enough for them to rally all the way back to close enough to the levels of 2009 December.

Do you think that's going to be a valuation call or is it going to be liquidity driven because we have also just had news that LIC would be pumping in another Rs 15,000 crores by the end of March and other insurance companies are waiting to put more money in. Also, FIIs are bringing in the money. Do you still see corrections coming in?

When the markets sold out 2000 points, the money was still there. These are facile arguments that liquidity ensures the markets will never fall. Throughout the history of the world, there has always been liquidity chasing markets and not markets chasing liquidity and that's the way it is. If the markets have to fall, they will fall. It does not matter whether LIC puts in $2 billion or everybody in the whole world puts in money. I do not waste my time looking at liquidity at all, it makes no difference to broad market trends at all. It might make a difference to thinly traded Z Group stock but other than that, I do not see that being a factor. The overall situation globally is probably headed to be a lot worse than what we saw in 2008. At that time, particularly the second half, we saw the collapse of one investment bank which was not a huge investment bank by any standards, compared to the top 3-4. It was a smallish bank but that itself was large enough to bring down markets substantially and shake the entire world financial system.


1|2|3|4|5|6|Next >

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• 2010 is a down year for equities: Shankar Sharma
• ACC resistance seen at Rs 1000: Reliance Money
• On decline around 840-845, Jain Irrigation an attractive buy: Sandeep Wagle
• OnMobile interesting bet with longer term perspective: Paras Adenwala
• Buy Adani Enterprises for target of Rs 570:India Capital Markets
• Buy Fortis Healthcare for target of Rs 170:India Capital Markets

Valuation game hots up: Dozen cos trade at P/E of 100;
analysts chant caution


Tata Steel profit dips to Rs 473 cr




Src: ET

Heard on the street: Punters ramp up NMDC ahead of FPO

Heard on the street: Punters ramp up NMDC ahead of FPO


Punters ramp up NMDC ahead of FPO

The run-up in the share price of the NMDC counter over the past week has once again raised the bogey about valuations among investment bankers managing the company’s impending follow-on public offering. The stock hit a high of Rs 511.95 on February 10, with barely 50% of the trades resulting in delivery. This indicates that punters are ramping up the stock ahead of the FPO, and trying to get institutional investors to bid higher during the auction process.

Institutional investors are said to be showing interest in the stock only around Rs 200-220 levels. This has put the bankers to the issue in a spot, as the prevailing market price is closer to Rs 500. It seems unlikely if the government will be willing to divest stake at such a steep discount to market price.

The issue is said to have come up for discussion at a meeting between the company’s bankers and divestment ministry officials last Saturday. Government officials also debated the rationale for taking the French auction route for the NMDC issue, with some present at that meeting of the view that the methodology needs to be reviewed. NMDC shares closed flat at Rs 485 on Monday.

Traders lap up Titagarh on hopes of Budget boost

Day traders have apparently taken control of the Titagarh Wagons counter ahead of the Railway Budget on February 24. The trigger for the frenzied action in the stock, according to brokers, could be expectations of some measures that would have a positive impact on the company’s prospects.

Titagarh Wagons, one of the leading railway wagon manufacturers in the country, stands to benefit if the government announces introduction of new trains or any such proposal that would push up demand for the company’s products. The stock climbed 17% in just two trading sessions, before ending at Rs 466.6 on Monday.

The spurt in the share price took place amid a significant improvement in volumes as on a daily average basis, 25 lakh shares changed hands on Monday and last Thursday, compared to nearly one lakh shares in the previous two sessions. The interest in the counter, however, was mostly speculative as reflected in low delivery-based volumes. The delivery ratio — the percentage of shares actually delivered in the market — stood 10.7% on Monday and 6.3% on Thursday.

(Contributed by Deeptha Rajkumar & Vijay Gurav)


Src: ET

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Daily Newsletter - Feb 16 2010

Morning Note - Feb 16 2010

Bharti Airtel - Zain Deal

All India GSM Figures

India Budget Previews

Geodesic

Src: Deadpresident Blog

Bharti shares plunge 10% on Zain deal

Bharti to buy Zain's SA assets for $10.7 bn, street cautious

Bharti shares plunge 10% on Zain deal


MUMBAI - Shares of Bharti Airtel plunged nearly 10 per cent Monday as brokerages gave a thumbs down to the company’s deal with Kuwaiti telecom

Full Coverage: Bharti-Zain deal Stock quote: Bharti Airtel

Zain for its African cellular assets. Brokerages were concerned that the company’s $10.7 billion offer could strain its finances.

Bank of America-Merrill Lynch cut Bharti Airtel to ‘underperform’ from ‘buy’ after the mobile operator began its exclusive talks with Zain. The investment bank said the valuation seems rich, the growth outlook for Zain's African portfolio appears unexciting and a potential deal could materially stress Bharti's balance sheet.

Bharti announced Monday an offer to buy the African assets of Kuwait's Zain telecom for $10.7 billion. Bharti Airtel and Zain Africa "have agreed to enter into exclusive
discussions until 25 March, 2010 for the acquisition of Zain's African unit based on an enterprise value of $10.7 billion," Bharti said in a statement.

A consortium of Asian investors has for months been trying to buy Zain's stakes estimated to be worth $13.7 billion from Kuwaiti family conglomerate Kharafi Group, which is one of the main shareholders in Zain.

Meanwhile, Telecom Minister A Raja commented that the Bharti-Zain deal is good for the industry.

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Ambareesh Baliga, vice president at Karvy Stock Broking feels that the deal seems too expensive for Bharti and although the stock may stand to benefit in the long term, the short term is negative. “This looks a bit expensive for Bharti considering these are not extremely profitable operations. Those are future growth areas. But the growth will come only in 5-8 years time and in the short-term there is a risk of straining Bharti's balance sheet," said Baliga.

Giving a fundamental take on the deal, Romal Shetty, head- telecom, KPMG said, “Bharti’s bid is a step in the right direction to make its footprint in Africa. This is where the next round of growth is going to happen. India is becoming more and more saturated in the coming years. Africa is under-pentrated and has lesser competition thus making the Zean deal an attractive buy for Bharti.”

At 3 pm, shares of Bharti Airtel tumbled 9.11 per cent to Rs 285.85 in reaction to the deal.


Full Coverage: Bharti-Zain deal | Stock quote: Bharti Airtel

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Src: ET, Moneycontrol