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23 March 2010

Cairn discovers more oil in Rajasthan block

Cairn discovers more oil in Rajasthan block

NEW DELHI: Highly placed sources in the Petroleum Ministry have said that Cairn India has discovered new oil reserves in Rajasthan oilfields.

Reliance Industries' KG-D6 facility
World's top oil exporting countries
World's top 10 oil producers
World's largest refining companies

The company is likely to make an announcement shortly. New oil reserve will increase India's domestic oil production by about 23% in financial year 2011. This essentially means that these reserves are very big.

Rahul Dhir, the Chief Executive of Cairn India has met the Petroleum Minister Murli Deora who in turn has congratulated him and the company for the discovery. Cairn India extracts oil from the Barmer region of Rajasthan. Cairn started output from Mangala - the nation's largest onland oil find in more than two decades in late August 2009.

Cairn India said oil reserves in its Thar desert field in Rajasthan have increased to 4 billion barrels of oil equivalent.

Previously, discovered in place resources were pegged at 3.7 billion barrels of oil and oil equivalent gas, the company said in a press statement here.

"Resource base provides potential to produce 240,000 barrel of oil per day (as against previous estimate of 175,000 bpd)," it said.

Cairn said it is on track to ramp up output from Rajasthan fields to 125,000 barrels per day in the second half of 2010. Current output is around 20,000 bpd.

The company has tied up sale of 143,000 bpd (over 7 million tonnes a year) of oil.

Cairn said production potential from Mangala, the largest field in the block, has increased to 150,000 bpd from previous 125,000 bpd.

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India to grow 8.5% next fiscal: PM Manmohan Singh

Src: Economictimes.Indiatimes

Stock Views

Technical Picks – Stocks

Fortis Healthcare Ltd

Daily News Roundup - March 23 2010

Blink on the Street!

GVK Power and Infrastructure

Idea Cellular Ltd

Reliance Infrastructure

Zee Entertainment Enterprises

Deccan Chronicle

Src: DP blog and HDFC sec

22 March 2010

Market Watch: Stocks seen lower on global cues, RBI action

Market Watch: Stocks seen lower on global cues, RBI action

MUMBAI: Stocks are likely to open with a negative bias tracking losses across Asia. There will also be a knee-jerk reaction to Reserve Bank of

Top gainers & losers

India’s move late Friday where it hiked interest rates with immediate effect. Volatility is also likely to be high with the F&O expiry for the March series due later this week.

“The market continues to trade sideways with high volatility but ended in green. This short term trend can be reversed only if Nifty slips below 5,220 level. We can see markets going sideways and consolidating before we head towards the 5300 level. The RSI indicates that the markets are in the overbought territory, so one has to be cautious while taking fresh position at higher levels. The long term trend however of the market is positive until Nifty holds its 50-day moving average of 5,017, till then every dip in the market should be taken as a buying opportunity. Support for Nifty seen at 5,210- 5,180 and resistance is seen at 5,280- 5,330,” said Nirmal Bang Securities.

Asian stocks traded lower Monday after an International Monetary Fund official said advanced economies were under pressure to tackle the debt situation and on growing worries that central banks in Asia may step up efforts to curb inflation.

In a late evening action on Friday by the RBI, it has increased both repo and reverse repo rates by 25 basis points to 5% and 3.5% with immediate effect. This may have a sentimental impact on stocks Monday.

Meanwhile, on Friday, increased buying activity in the last half hour of trade helped the equity indices to close above psychological resistance levels. National Stock Exchange’s Nifty ended at 5262.80, up 16.9 points or 0.32 per cent. The broader index hit a high of 5269.95 and low of 5237.10. Bombay Stock Exchange’s Sensex closed at 17,578.23, up 58.97 points or 0.34 per cent. The 30-share index touched a high of 17600.87 and low of 17502.14.

Stocks that can turn out to be good bets for long run

Top 5 stock picks | Best mid-term picks

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New 52-week high by settlement?

The market alternated between sessions of tight range-trading and net gains. The Nifty closed at 5,262.8 points for a week-on-week gain of 2.45 per cent. The Junior closed at 10,607 points for a gain of 0.93 per cent while the Defty rose 2.4 per cent with the rupee slightly softer.

Breadth was reasonable with advances outnumbering declines but smaller scrips definitely underperformed the pivotals. The BSE 500 was ahead by 1.8 per cent. Volumes were low in both cash and derivatives segments. The domestic institutions remained moderate net sellers while FIIs continued to be strong net buyers.

Outlook: The market trend remains up. But momentum is weak and there are several divergent bearish signals. There’s support at 5,150, and resistance beyond 5,250. The intermediate trend has been positive for six weeks. Given settlement, there is a good chance that the intra-day volatility will rise. The market could establish a new 52-week high beyond 5,310, but it may also end next week in correction mode with net losses. In fact, these two possibilities are not incompatible and could occur in tandem.

Rationale: The low volumes and narrowing breadth (where small stocks are under-performing) are bearish divergences in a market that’s making gains. The positive long-term trend and the positive intermediate trend should together be sufficiently in-phase to test the previous 52-week high (5,310 on Jan 6, 2009). But the divergences also suggest a possible correction quite soon. There’s clearly defined support at 5,150 and obvious resistance beyond 5,250 and near the 52-week high.

Three things could happen. The market rises beyond the 5,310 mark but fails to hold on to its gains, closing out next week with net losses. The market zooms beyond 5,310, heading into a new 52-week zone. The market continues to range-trade between 5,150-5,250. The negative divergences make the first (new high and net loss) scenario look more likely. In that case, the Nifty may swing between 5,150-5,350 with a wider daily high-low range. A correction below 5,150 would push it down till 5,050.

Counter-view: The upside breakout came in the past three sessions although it wasn’t backed by serious volume expansion. The uptrend could be strengthened by short-covering in the settlement week. In that case, 5,310 may be easily broken and exceeded. However that would be dependent on volume expansions. Maybe the settlement will be the trigger for that.

Bull & bears: Among major sectors, IT continues to outperform the Nifty while the Bank Nifty’s performance has been more unstable. Big IT stocks have done well in the last week though there was some selling on Friday. Financials and bank stocks could be under pressure on Monday. Auto and auto ancillaries are seeing profit-booking after a sharp run up.

Bulls displayed a sudden burst of enthusiasm for telecom stocks in the last couple of sessions. Cement has made steady gains. Real estate continues to be among the weaker sectors. FMCG companies especially HUL and ITC are stabilising after heavy selling. Energy stocks have seen a lot of volatility but the charts appear to be net-positive.

MICRO TECHNICALS

MAHINDRA & MAHINDRA
Current Price: Rs 1,073.5
Target Price: Rs 1,125

The stock has corrected to hit firm support. It has the potential to bounce back till around the Rs 1,125 level. Keep a stop at Rs 1,068 and go long. Increase the position beyond Rs 1,090 and reset the stop loss to Rs 1,085. Start booking profits above Rs 1,120.

AXIS BANK
Current Price: Rs 1,156
Target Price: Rs 1,125

The stock has seen heavy selling above the current level and it is likely to make a pullback till around the Rs 1,125-1,130 mark. Keep a stop at Rs 1,165 and go short. Start booking profits below Rs 1,135 and reset the stop loss to Rs 1,140.

INDIABULLS REAL ESTATE
Current Price: Rs 160.4
Target Price: Rs 145

The stock has seen a fair amount of selling. It’s bound to test support at Rs 155, and if that is broken, it will fall to around Rs 140-145. Keep a stop at Rs 164 and go short. Increase the position below Rs 155. Book profits below Rs 145.

SAIL
Current Price: Rs 247.3
Target Price: Rs 255

The stock has bounced off a solid support and its looking bullish with decent volumes in the past three sessions. It has a minimum target of Rs 255 and it could rise further. Keep a stop at Rs 242 and go long. At Rs 255, book 50 per cent profit and reset the stop to Rs 252.

RCOM
Current Price: Rs 167.95
Target Price: Rs 180

Volumes have risen with prices. There’s a potential target of Rs 180. Keep a stop at Rs 164 and go long. Increase the position above Rs 169. Start booking profits above Rs 177. If you wish to hold a position beyond Rs 180, reset the stop to Rs 178.

Analysts' corner	22-MAR-10
Tech Mahindra’s recent deal restructuring with BT has been excessively discounted by the markets, even as positive news flow such as new deal wins, etc.

Smart Portfolios outperforms	22-MAR-10
True to its name, Smart Portfolios outclassed the benchmark indices once again.

Markets at a glance	22-MAR-10
Encouraging advance tax figures and S&P’s upgrade of India’s ratings outlook triggered renewed buying interest in Indian stocks.

Attractive strangles close to money	22-MAR-10
Derivatives trading was marked by low volumes and average carryover.

New 52-week high by settlement?	22-MAR-10
Low volumes and negative divergences.

The perfect hedge	22-MAR-10
Hedging a portfolio is an illusion, because a near perfect hedge delivers more than a risk-free return consistently.

Greetings, not so warm	22-MAR-10
While the past track record is not exciting, the year ahead is expected to be significantly better.

Not enough glitter	22-MAR-10
Although Shree Ganesh Jewellery House’ track record and growth plans appear good, the IPO pricing already captures the medium-term upsides.

Spreading its wings	22-MAR-10
While the Parkway acquisition is a long term positive for Fortis Healthcare, the upsides are priced in.

Retail thrust	22-MAR-10
A good track record and expertise in larger-sized diamonds are positives, but the IPO pricing leaves little room for upsides in the near-term.

Africa calling	22-MAR-10
Tura’s acquisition would extend Godrej Consumer’s foothold in the fast growing African markets.

Turnaround bets	22-MAR-10
A few stocks, which have been lagging behind due to various concerns, could see a revival in fortunes going ahead.

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Src: Economictimes, Business-standard

21 March 2010

Know About Bharti-Zain

Bharti ties up $8.3 bn funding for Zain deal

Know about Bharti- Zain

Zain Group, is a mobile telecommunications company founded in 1983 in Kuwait as MTC or Mobile Telecommunications Company, and was later rebranded to Zain in 2007. Zain has commercial presence in 25 countries across Africa and the Middle East, with an estimated work force of 13,000.^[7] As of February 2010, about 60% of Zain's customers were in Africa although Africa contributed only 15% to the group's net profit. Zain has a total of 65 million customers. ^[8]

more @ ZAIN

Bharti Airtel

Bharti Airtel (BSE: 532454) formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India, with more than 124 million subscribers as of February 2010^[update].^[2] With this, Bharti is now the world's third-largest, single-country mobile operator and sixth-largest integrated telecom operator. It also offers fixed line services and broadband services. It offers its TELECOM services under the Airtel brand and is headed by Sunil Bharti Mittal. The company also provides telephone services and broadband Internet access (DSL) in top 95 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.'

More @ Bharti Airtel

Srx:Wikipedia.org

Market Views and News

Heard on the Street: Funds playing ‘long’ lap up Bharti Airtel

Funds playing ‘long’ lap up Bharti

Airtel

Select long-term and contrarian funds are believed to be accumulating shares of telecom firm Bharti Airtel. Every fund manager has a sizeable exposure to the stock, given its dominant position in the telecom space. Less than three months ago, the consensus view was that the stock was likely to go through an extended period of downtrend because of the tariff war among cellular service providers.

But now, fund managers seem to have veered to the view that a downturn in the industry will spell more trouble for Airtel’s competitors and help Airtel emerge stronger once the trend reverses. On Friday, the stock closed at Rs 312, up about 4% from its previous close. While fundamental analysts are positive on the stock, as the company submitted an application for third-generation mobile services in all 22 services areas across India, technical analysts said that the stock is yet to cross its major resistance level between Rs 320-325. A clear trend would emerge only after the stock crosses that zone, technical analysts say.

Stock futures of ITC, HUL see build-up in open interest

Stock futures of ITC and Hindustan Unilever have seen a build-up in open interest, of late. According to brokers, some high net worth investors and proprietary desks have created a pair strategy involving the two stocks. As part of the strategy, they have gone short on ITC and long on Hindustan Unilever, which means ITC is expected to underperform Hindustan Unilever because they feel ITC’s rise in limited from here.

Buyers of ITC contracts are optimistic about the stock’s prospects, as they feel the company will be least impacted by the product price wars among consumer goods companies. A trader said, if ITC manages to cross Rs 262-264 on good volumes, then there is a possibility of more upsides. On Friday, the stock closed at Rs 260.75, down 0.2%.

Amtek Auto on slow track as an FII part-sells stake

Shares of Amtek Auto fell on Friday, as a foreign investor sold part of its holdings acquired through conversion of FCCBs, in the open market. The stock fell 2.5% to Rs 173, as one of the shareholders, NDMR BV, offloaded 85 lakh shares for Rs 146 crore in a bulk deal transacted on BSE.

The Netherlands-based investor had picked up a 14.7% stake in the auto ancillary company through conversion of FCCBs in February. Amtek Auto shares have been on a decline on selling from large investors, including a few FCCB holders who opted for partial exit after conversion. Apart from NDMR, Olympia Builders sold nearly 21 lakh shares on Friday. Parts of the shares were bought by Birla Sun Life Mutual Fund and Birla Sun Life Insurance.

(Contributed by Apurv Gupta, Nishanth Vasudevan & Vijay Gurav)

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Cipla to replace Sun Pharma in Sensex from May 3

NEW DELHI: Drug major Cipla will replace its peer Sun Pharmaceuticals on the Bombay Stock Exchange's benchmark Sensex from May

3.

The Index Committee of the BSE, at a meeting held on March 19, decided to revise the composition of indices, the BSE said in a statement. Apart from the Sensex, the BSE has also announced changes in other indices like BSE-100, BSE-200 and BSE-500.

"Revisions in BSE-100, BSE-200 and BSE-500 index would be effective from March 29," the exchange said, adding the revision in the Sensex "shall be effective from May 3."

In the BSE-100 Index, pharma firm Lupin will replace its peer Glaxosmithkline Pharmaceuticals. Further, the state-run power major NHPC, Shriram Transport Finance Company and UltraTech Cement are also being inducted into the BSE 100 Index, while public sector telecom operator MTNL will be excluded.

In the BSE-200 Index, 16 companies including Aurobindo Pharma, Cadila Healthcare and Oil India are replacing the NDTV, Television Eighteen India and NIIT.

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Airtel ties up $8.3-bn debt for Zain deal

NEW DELHI: Bharti Airtel on Sunday announced tying up of $8.3 billion debt for the proposed acquisition of the Kuwait-based Zain Telecom's

African unit.

"The financing was over-subscribed with major international banks committing to underwrite the total amount," the company said in a statement here.

For $7.5 billion for financing, the lead - arrangers are Standard Chartered Bank, Barclays, SBI Group, ANZ, BNP, Bank of America-Merril Lynch, Credit Agricole CIB, DBF, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.

In addition to the dollar financing, the SBI Group has committed up to $1 billion in rupee loan to Bharti, the company said.

Bharti is in exclusive talks with Zain till March 25 to acquire the African operations of the Kuwait-based company.

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Other Stories

Wkly Tech Analysis: March expiry to cushion fall

Bharti board oks $9 bn offer for Zain Africa: Report

India Conference

Jindal SAW

India Research

Weekly Valuation

Tata Investment Corp

Orbit Corporation

Greece fiscal woes persist...euro falls vs dollar

QTIL-WTTIL to buy tower business from TTML

Shree Ganesh Jewellery House IPO Review

Goenka Diamond and Jewels IPO Analysis

IntraSoft Technologies IPO Analysis

Hero Honda

Ranbaxy Labs

Reliance Industries

Src: ET, Business-Standard, DP blog and etc

19 March 2010

RBI ups repo, reverse repo rates by 0.25%

RBI ups repo, reverse repo rate by 25 bps

MUMBAI: The Reserve Bank today raised its key short-term lending and borrowing rates by 25 basis points each as part of its tight money policy

to combat inflation, which the government feels is a cause of concern. ( Watch )

The repo and reverse rate (short-term rates at which RBI lends and borrows from banks) were hiked to 5 per cent and 3.5 per cent respectively and could make banks commercial lending dearer.

"These measures should anchor inflationary expectations and contain inflation going forward," the Reserve Bank said a month ahead of the announcement of its annual monetary policy on April 20 for 2010-11.

Finance Minister Pranab Mukherjee has expressed concern saying inflation is heading to double digits from to 9.89 per cent at present while at the same time not giving up on growth.

"As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected", RBI said.

India likely to witness 8.3% GDP growth in FY 11: Report

MUMBAI: India is likely to witness an 8.3 per cent GDP growth in FY 11 on the back of a strong investment and consumption demand, a report

said.

"We expect GDP growth to be around 8.3 per cent during FY 11, backed by strong investment as well as consumption demand," Dun & Bradstreet India (D&B), Economy Outlook 2010-11, said.

The industrial sector is expected to play a crucial role in driving growth in GDP during FY 11, the report said.

The Index of Industrial Production (IIP) growth is expected to remain robust at 10.3 per cent during FY 11.

Focus on infrastructure spending by the Government and an increase in investment demand by corporates along with improved consumption would provide an impetus to industrial production, it said.

But the report anticipated fears about growing inflation at double-digit levels, which may pose a threat to growth prospects.

"Elevated commodity prices do remain a major concern and if unaddressed could pose a threat to the economic growth prospects," D&B India, Economic Analysis Head, Yashika Singh, said.

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RBI ups repo, reverse repo rates by 0.25%

Src: ET and Moneycontrol.com and Etc

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.

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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)

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