Market Outlook 16th Sep 2009

INTRADAY calls for 16th Sep 2009
+ve sector , scripts : Bank, Siemens, ArevaT&D, Maxwell,Nitco
BUY HDFCBank-1514 for 1565-1599-1608+ with sl 1500
BUY ABB-764 for 834+ with sl 755
BUY KOTAKBank-749 for 776-793+ with sl 733

Breakout Calls
BUY Welguj-256 for 268-276+ with sl 250
BUY Hoteleela-35 for 40-43+ with sl 34

Positional Calls
BUY IDBI-113 for 123-140+ with sl 109
BUY KOTAKBank-749 for 776-793+ with sl 733

 

NIFTY FUTURES LEVELS
RESISTANCE
4903
4919
4947
4973
SUPPORT
4890
4881
4853
4827
4783
4757
Buy LAKSHMI VILAS BK;Buy ALLAHABAD BANK

 

stocks that are in news today:
-RIL (Reliance Industries) sets September 29 as record date for RPL's (Reliance Petroleum) merger with company
-Elder Pharma in talks with US based PE player TA Associates to dilute minority stake – FE
-Jet fuel price reduced by an average Rs 1,285/kl: PTI
-Air India cuts fares by 46% for next 3 days to counter Jet's offer, other airlines follow suit
-From NW18: Marico Bangladesh arm IPO to list today: Official
-Ex-split: IL&FS Investment Managers from Rs 10 to Rs 2

Strong & Weak  futures
This is list of 10 strong futures:

Jindal Saw, IOB, Allahabad Bank, Orient Bank, Bhushan steel, Indian Bank, Bank Of India, Chennai Petro, Dena Bank & Sesa Goa Ltd.

And this is list of 10 Weak futures:

Container Co, IDEA, India Cements, FinanTech,  Triveni, ACC, PTC, BEL, Hind Uni Lvr & Ultratech Cemco.
Nifty is in Up trend

 

NIFTY FUTURES (F & O): 
 Above 4901-4903 zone, rally may continue up to 4919 level by non-stop.

Support at 4881 & 4890 levels. Below these levels, expect profit booking up to 4853-4855 zone and thereafter slide may continue up to 4827-4829 zone by non-stop.

Buy if touches 4783-4785 zone. Stop Loss at 4757-4759 zone.

On Positive Side, cross above 4945-4947 zone, can take it up to 4971-4973 zone. If crosses & sustains this zone then uptrend may continue.
 
Short-Term Investors:
Bullish Trend. 3 closes above 4780.25 level, it can zoom up to 4999.55 level by non-stop. 

BSE SENSEX:
Higher opening expected. Uptrend should continue. 
Short-Term Investors:
 
Short-Term trend is Bullish and target at around 16824.77 level on upper side.
Maintain a Stop Loss at 16044.77 level for your long positions too.

 

POSITIONAL BUY:
Buy LAKSHMI VILAS BK (NSE Cash) 
Expect uptrend in this scrip.

Profit booking up to 118 level will be healthy. Keep a Stop Loss at 111 level for your long positions too.

Expect a target of 127 level on upper side. If crosses & sustains above 133 level then uptrend may continue.
 
Buy ALLAHABAD BANK (NSE Cash) 
Expect uptrend in this scrip.

Profit booking up to 111 level will be healthy. Keep a Stop Loss at 107 level for your long positions too.

Expect a target of 117 level on upper side. If crosses & sustains above 122 level then uptrend may continue.
 

  FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	15-Sep-2009	2856.46	2080.36	776.1

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	15-Sep-2009	1541.45	1408.01	133.44

 

SPOT LEVELS TODAY

	4892.10	( 1.74 %)	83.50
		1	2	3
Resistance		4924.92	4957.73	5016.02
Support		4833.82	4775.53	4742.72

	16454.45		( 1.48 %)	240.26
			1	2	3
Resistance			16535.98	16617.51	16757.79
Support			16314.17	16173.89	16092.36

Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,683.41. Up by 56.61 points.
The Broader S&P 500 closed at 1,052.63. Up by 3.29 points.

The Nasdaq Composite Index closed at 2,102.64. Up by 10.86 points.

The partially convertible rupee INR=IN closed at 48.65/66 per dollar on yesterday, stronger than Monday's close of 48.74/75.
 
 Interesting findings on web:
Better news on retail sales and manufacturing helped send stocks higher Tuesday, as did comments from Federal Reserve Chairman Ben Bernanke that the recession was probably over.

Stocks got a boost from Federal Reserve Chairman Ben Bernanke, who said the U.S. economic recession was probably over but the recovery would be slow and take time to create new jobs.

"From a technical perspective, the recession is very likely over," Bernanke said at a Brookings Institution conference, but he cautioned it may not feel like it's over.

Market pros said the market's rally will likely continue as money from the sidelines is now flowing into the market.

Jim Swanson, chief investment strategist at MFS Investment Management, said the real catalyst will be profits.

"This profit story in Q2 is very impressive ... low job costs are actually boosting corporate profits and we're gonna see 2 or 3 more quarters of very good profits," Swanson said on CNBC this afternoon. "This is gonna be a business led recovery, not a consumer recovery."

Retail sales jumped in August by the biggest amount in three years, but inflation at the wholesale level rose at double the rate analysts expected.

Investors are looking for signs that a six-month stock market rally of more than 50 percent is justified.

Stocks on Wall Street have risen for a seventh time in eight days after growth in retail sales and New York manufacturing topped economists' estimates.

Billionaire investor Warren Buffett said his company is buying equities.

Industrials including Alcoa [AA  13.99    1.05  (+8.11%)   ], DuPont [DD  33.15    0.87  (+2.7%)   ] and Caterpillar [CAT  51.70    2.93  (+6.01%)   ] led today's rally.

General Electric [GE  16.00    0.65  (+4.23%)   ] was again among the biggest advancers on the Dow, climbing 4.2 percent to close at $16. Bernstein Research raised its price target on the stock to $17, saying they expect improved margins from the company's NBC Universal unit, the parent of CNBC, late next year and beyond.

Hopes for a rebound grew after the government reported that retail sales jumped in August by the biggest amount in three years. The Fed's index of manufacturing in the New York region rose to its best level since late 2007.

That upbeat economic news helped allay concerns about a separate government report finding that inflation at the wholesale level rose last month at double the rate analysts expected.

Meanwhile, Bernanke cheered investors by saying that the worst recession since the 1930s has "very likely" ended, though he cautioned that problems like high unemployment will remain.

Investors have been betting on a recovery. The Standard & Poor's 500 index, the benchmark for many mutual funds, has surged 55.6 percent since skidding to a 12-year low in March.

Stocks zigzagged in morning trading before gaining steam in the afternoon, similar to the way trading played out Monday. Analysts say the slow-building advances are a sign that investors are pouncing on dips to get into the rally.

The short bouts of selling have meant the market has risen without the sizable break, which many analysts still say is overdue. Even when the news isn't good, market sentiment seems immune to developments that would have punctured the rally only months ago.

Investors shrugged off news that wholesale prices rose 1.7 percent last month, and disappointing earnings from two major retailers, Best Buy Co. and Kroger Co., also failed to push the stock market off course.

Electronics retailer Best Buy [BBY  38.32    -2.09  (-5.17%)   ] missed its target for the current quarter as store sales lagged but raised its outlook for the full year, citing stabilizing customer traffic. Its shares fell.

Shares of Kroger [KR  20.46    -1.65  (-7.46%)   ] also skidded after the grocery chain reported its profit fell and slashed its full-year earnings forecast as price cuts, a response to Wal-Mart's [WMT  49.93    -0.45  (-0.89%)   ] push into the grocery business, cut into margins.

"It's a little bit of conflicting things going on. Best Buy misses the quarter but raises guidance, suggesting things are getting better the second half of the year. Then Kroger comes out and lays an egg," Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets, told Reuters. "It's still a minefield out there," he said.

Businesses continued to pare inventories, which  fell 1 percent in July to their lowest level since March 2006. Sales ticked up 0.1 percent. And producer prices climbed 1.7 percent last month, double the expected rate, as gasoline prices rose at their fastest clip in a decade. Plus, the New York Fed branch reported its "Empire State" manufacturing index hit its highest level in two years.

"You want to say that the market is a little bit tired after the run we've had yet we continue to grind higher," said Ryan Larson, senior equity trader at Voyageur Asset Management.

The Dow rose 56.61, or 0.6 percent, to 9,683.41, its highest close since Oct. 6, when it finished at 9,956.

The S&P 500 index rose 3.29, or 0.3 percent, to 1,052.63, while the Nasdaq composite index rose 10.86, or 0.5 percent, to 2,102.64. All three indicators are at their highest levels for 2009.

The Russell 2000 index of smaller companies rose 4.81, or 0.8 percent, to 604.84.

Even after stripping out the sizable gains from the government's popular Cash for Clunkers program, sales rose 1.1 percent, well beyond the rise of 0.4 percent expected by analysts.

Commodity and industrial stocks rose as a weaker dollar pushed up materials prices. Alcoa Inc. added $1.05, or 8.1 percent, to $13.99. Caterpillar Inc. rose $2.93, or 6 percent, to $51.70.

Gregg S. Fisher, chief investment officer at financial advisory firm Gerstein Fisher in New York, said that despite the recent gains investors could still run into trouble.

"Investors are always following the herd. I think investors should sort of catch themselves now and not get overconfident," he said.

The market's latest gains came one year after the Dow tumbled 500 points following the collapse of Lehman Brothers Holdings Inc., which deepened the recession.

Yahoo! and EBay rallied as analysts recommended buying the shares. Freeport- McMoRan Copper & Gold, the world's largest publicly traded copper producer, added 1.1% as copper rebounded.

And Yahoo shares [YHOO  16.41    0.84  (+5.39%)   ] jumped 5.4 percent after the Internet portal sold its stake in China's top e-commerce company Alibaba.com.

Adobe Systems [ADBE  35.61    0.42  (+1.19%)   ] rose 1.2 percent ahead of earnings from the software maker, due out after the bell today.

Citigroup [C  4.12    -0.40  (-8.85%)   ] proposed a plan for the government to unload some of its 34-percent stake in the company. But shares tumbled nearly 9 percent amid published reports that Citi is also considering a $5 billion secondary offering.

Well-known banking analyst Meredith Whitney said on CNBC this morning that the economy remains weak and will face a big test next month when the government starts to wind down its support programs.

Bank of America [BAC  16.79    -0.20  (-1.18%)   ] shares slipped 1.2 percent following news that a federal judge has rejected a $33 million settlement between the bank and the SEC over Merrill Lynch bonuses and that executives may face charges — and a trial — over their handling of the merger.

An interesting approach overseas: The UK plans to make banks draw up "living wills" that would allow them to be dismantled easily, the Financial Times Reported.

Shares of Capital One [COF  37.42    -0.90  (-2.35%)   ] skidded 2.4 percent, even after the credit-card provider reported that defaults on card payments fell in August.

MasterCard and Visa gained after both companies reported processed volume declined less in July and August than in the second quarter, supporting the fact that the industry is stabilizing.

In tech land, Intel [INTC  19.55    0.19  (+0.98%)   ] rose 1 percent as the chip maker said it is shaking up its management team, setting up a three-way race for CEO, according to the Wall Street Journal.

There are concerns that the markets have already forgotten some of the lessons of the crisis. Rochdale Securities Bank Analyst Dick Bove told "Squawk Box Asia" that investors only need to look to yields on junk bonds to see that "greed" has returned to the markets.

This is a quadruple witching week, meaning four key expirations — stock index futures and options, and stock futures and options — which is likely to put some volatility into the market. For today, the CBOE volatility index managed to hold below 24.

Oil,Gold & Currencies:

Crude oil rose $2.07 to settle at $70.93 a barrel on the New York Mercantile Exchange.

Gold also rose after the report on inflation. The metal is often used as a hedge against rising prices.

The dollar struck a one-year low against a basket of currencies on Wednesday, staying vulnerable as investors moved to riskier assets such as stocks and commodities on growing signs of an economic recovery.

The dollar traded near the weakest level this year against the euro before a report forecast to show U.S. manufacturers boosted output, reducing demand for the relative safety of the greenback.

The Australian and New Zealand currencies were near this year's highs against the dollar as Asian stocks extended a global equity rally after the biggest gain in U.S. retail sales for three years encouraged investors to buy riskier assets. Federal Reserve Chairman Ben S. Bernanke said the worst U.S. recession since the 1930s has probably ended and billionaire investor Warren Buffett said his company is buying equities.

"Higher-yielding currencies and riskier assets are in demand as risk appetite returns," said Masashi Hashimoto, senior foreign exchange analyst at Bank of Tokyo Mitsubishi UFJ Ltd., a unit of Japan's biggest banking group. "Funding currencies like the yen and dollar will weaken."

The dollar dropped to $1.4669 per euro as of 10:34 a.m. in Tokyo from $1.4658 yesterday in New York, when it reached $1.4686, the highest since Dec. 18. Japan's currency traded at 133.46 per euro from 133.47 yesterday in New York. It was at 90.97 per dollar from 91.05 yen.

Australia's currency bought 86.49 U.S. cents, close to its strongest since August 2008, from 86.34 cents yesterday in New York. New Zealand's dollar fetched 70.53 U.S. cents from 70.50 cents, near its highest since August 2008.

Retail Sales

Benchmark interest rates of 3 percent in Australia and 2.5 percent in New Zealand attract investors who invest in the countries' assets using loans from nations with lower costs such as the 0.1 percent benchmark in Japan and the U.S. rate which is as low as zero. The risk in such carry trades is that exchange- rate changes can erase profits.

The Dollar Index traded near the lowest in one year after a Commerce Department report showed U.S. retail sales increased 2.7 percent last month after a revised 0.2 percent drop in July, adding to signs the recession is ending.

The Federal Reserve Board's measure of U.S. production, due for release today, probably rose 0.6 percent, the most since October, according to a Bloomberg News survey of economists. The report may also show the proportion of plant capacity in use climbed to 69 percent, the highest in five months.

The Nikkei 225 Stock Averaged gained 1.2 percent and the MSCI Asia Pacific Index of regional shares advanced 1.3 percent.

Buffett Buying Stocks

Berkshire Hathaway Inc. is "buying stocks right as we speak," Buffett told a conference in California, adding that he's getting a "lot for my money" in equities.

The Dollar Index, which tracks the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, fell to 76.481 from 76.520 yesterday. It earlier hit 76.406, the lowest level since September 2008.

The yen rose for the first time in three days against the dollar on speculation foreign investors may shift their focus to Japanese assets from the rest of Asia.

"The Japanese stock market, which has lagged behind the recent bull-run of the regional market, is gradually catching up thanks to buying by foreign investors," said Takao Yahata, senior manager of foreign exchange and financial-products trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's largest banking group. "This capital inflow into Japan buoys the yen."

Japanese Politics

Foreign investors bought 180.8 billion yen ($2 billion) in Japanese bonds and 132.4 billion yen in stocks, and sold 26.3 billion yen in short-term securities during the week ended Sept. 5, according to figures based on reports from designated major investors released by the Ministry of Finance in Tokyo.

Prime Minister Taro Aso and his Cabinet resigned this morning, paving the way for Yukio Hatoyama to lead the first change of Japan's government in 15 years.

Hatoyama is set to be elected prime minister by parliament this afternoon. His Democratic Party of Japan won a landslide victory last month, securing 308 of the 480 seats in the Lower House and ousting Aso's Liberal Democratic Party, which had governed for 54 of the past 55 years.

The euro was close to a four-month high versus the pound on speculation a European Central Bank official will reiterate that policy makers plan to reduce lending to banks amid signs the recession in the 16-nation region is abating.

ECB Executive Board member Jose Manuel Gonzalez-Paramo speaks today on "Awakening from the financial and economic crisis" in Brussels.

European Rates

Executive Board member Juergen Stark said yesterday the ECB will probably begin scaling back its lending to banks next year, and Governing Council member Guy Quaden said he is "reasonably optimistic" on the economic outlook. The ECB has used "non- standard measures" including lending banks as much cash as they want and buying 60 billion euros ($88 billion) of covered bonds to get credit flowing again.

"Risk-taking sentiment is growing," said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France's third-largest bank. "This benefits the euro, which is likely to strengthen" to the Dec. 18, 2008, high of $1.4719 this week, he said.

Europe posted a trade surplus for a fourth straight month in July, widening to 1.2 billion euros from 1 billion euros in June, according to a Bloomberg News survey of economists. The European Union's statistics office will release the report in Luxembourg tomorrow.

The pound fell to 88.925 pence per euro after touching 88.975, the weakest since May 15.

Bonds:

Bond prices fell. The yield on the benchmark 10-year Treasury note rose to 3.46 percent from 3.43 percent late Monday.

What to expect:

WEDNESDAY: Weekly mortgage applications; CPI; current account; industrial production; weekly crude inventories; earnings from Oracle

THURSDAY: Housing starts; weekly jobless claims; Philly Fed; Earnings from FedEx

FRIDAY: Quadruple witching

Asia:

Asian stocks rose, led by electronics and mining companies, after U.S. retail sales and New York manufacturing reports beat economist estimates and commodity prices advanced.

Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 5.1 percent in Tokyo as Nomura Holdings Inc. recommended buying the shares. BHP Billiton Ltd., the world's biggest mining company, gained 1.8 percent after metal prices rose for the first time in five days. National Australia Bank Ltd., the nation's largest by assets, rose 2.8 percent, as an index of the country's leading economic indicators climbed.

"Asia and other emerging markets have strong domestic economies that will benefit further from a global recovery," said Paul Joseph Garcia, who helps manage about $1.45 billion as chief investment officer at the Philippine unit of ING Investment Management Ltd. "Trade will pick up and that's good for Asia's export-oriented industries."

The MSCI Asia Pacific Index gained 1.3 percent to 117.31 as of 11:41 a.m. in Tokyo. The gauge has climbed 66 percent from a more than five-year low on March 9 as stimulus measures around the world pulled economies out of recession. Stocks on the gauge are priced at an average 24 times estimated earnings, up from 15 times at the March low.

Australia's S&P/ASX 200 Index climbed 2 percent, leading gains in the region, with Telstra Corp. surging 3.2 percent on optimism it will get access to a new national Internet network.

Nikkei, Hang Seng

Japan's Nikkei 225 Stock Average rose 1.2 percent. Nippon Steel Corp. gained 2.7 percent after JPMorgan Chase & Co. rated the stock "overweight." South Korea's Kospi Index advanced 1.6 percent and Hong Kong's Hang Seng Index rose 0.7 percent.

Futures on the U.S. Standard & Poor's 500 Index were little changed. The gauge increased 0.3 percent yesterday after a government report showed retail sales excluding automobiles gained 1.1 percent last month, while the Federal Reserve Bank of New York said its general economic index rose to 18.9 in September. Both reports surpassed economist estimates.

Billionaire investor Warren Buffett said yesterday his company is buying equities, while Federal Reserve Chairman Ben S. Bernanke said the U.S. recession is "very likely" over.

Canon, which makes digital cameras and office equipment, climbed 5.1 percent to 3,730 yen as Nomura raised its rating on the stock to "buy." Sony Corp., which gets 24 percent of its revenue in the U.S., gained 2.7 percent to 2,485 yen.

"Signs of a recovery in the global economy are boosting investor confidence that stocks will stay solid or go up," said Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc.

Leading Indicators

A gauge of Australian leading indicators, which focuses on future economic growth, gained 1.1 percent to 248.5 points in July from June as shares and dwelling approvals climbed, Westpac Banking Corp. and the Melbourne Institute said in Sydney today. The index shrank at an annualized rate of 1.8 percent in July after contracting 4.6 percent the previous month.

National Australia Bank added 2.8 percent to A$28.95. Rival Commonwealth Bank of Australia advanced 2.8 percent to A$47.81.

Telstra, the nation's biggest telephone company, gained 3.2 percent to A$3.20. Stephen Conroy, the country's communications minister, told national radio the government may give Telstra a stake in its Internet network.

The company's shares fell 3.2 percent yesterday after Conroy said Telstra must separate its fixed-line assets from its consumer business or face curbs on mobile-services expansion.

Oil, Metals Prices

BHP added 1.8 percent to A$38.93. Rio Tinto Group, the world's third-largest mining company, gained 1.8 percent to A$60.02. Inpex Corp., Japan's largest oil explorer, climbed 2.3 percent to 796,000 yen.

A measure of six metals in London advanced 1.1 percent, rising for the first time in five sessions. Crude oil climbed 3 percent to $70.93 a barrel in New York yesterday, the biggest increase since Sept. 8.

Nippon Steel gained 2.7 percent to 344 yen, while JFE Holdings Inc. rose 1.9 percent to 3,260 yen after JPMorgan rated both companies "overweight" in new coverage. Smaller rival Kobe Steel Ltd., which was rated "neutral," added 1.2 percent to 163 yen.

Halex Holdings Bhd., a Malaysian agricultural chemicals manufacturer, jumped 15 percent to 90 sen on its debut on the Kuala Lumpur stock exchange today. The company sold shares at 78 sen in its initial share sale. 

Nikkei 225 10,339.43     +121.81 ( +1.19%).(08.07 AM IST).

Japan's Nikkei average rose 1.2 percent on Wednesday, buoyed by exporters such as Canon Inc (7751.T) after retail sales data helped boost investor confidence and lifted U.S. stocks to highs for the year.

But analysts said gains were likely to be limited as investors carefully monitor policies of Japan's incoming government.

HSI 20972.03 +105.66 +0.51%. (08.08 AM IST).

Hong Kong shares rebounded Wednesday after two days of losses, with energy producers like Cnooc Ltd. and export plays such as Li & Fung Ltd. rising after U.S. stocks ended at 2009 highs and Federal Reserve Chairman Ben Bernanke said the recession was likely over. The Hang Seng Index rose 0.8% to 21,039.44 in early action, with Li & Fung /quotes/comstock/22h!e:494 (HK:494 28.15, +0.70, +2.55%) advancing 2.7% and Cnooc /quotes/comstock/22h!e:883 (HK:883 10.74, +0.08, +0.75%) /quotes/comstock/13*!ceo/quotes/nls/ceo (CEO 139.34, -1.82, -1.29%) climbing 0.9%. The Hang Seng China Enterprises Index gained 0.9%, although mainland Chinese stocks declined after rising in 10 of the last 11 sessions. The Shanghai Composite Index recently slid 0.6%. 

SSE Composite  2968.44   -2.15.(08.11 AM IST).

China's key stock index opened down 0.2 percent on Wednesday, with China Vanke firmer after shareholders approved its $1.6 billion share offer.

The Shanghai Composite Index .SSEC opened at 3,027.506 points, after edging up 0.23 percent on Tuesday.

China Vanke (000002.SZ: Quote, Profile, Research), the country's second-biggest property developer, rose 0.42 percent to 12 yuan after the shares were suspended on Tuesday. It said its shareholders approved a new public share offer to raise up to 11.2 billion yuan ($1.6 billion).

Investors often worry that such fund raising plans drain money from the stock market and hurt sentiment but analysts said the situation with Vanke was different.

Shareholders' approval of Vanke's fund-raising plans suggests underlying confidence towards the property sector through next year, so its impact on the overall market may be limited. ($1 = 6.83 yuan)   

Chinese stocks open 0.21% lower on Wed

Chinese stocks opened lower on Wednesday morning.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 3,027.51 points, down 0.21% or 6.22 points from the previous closing.

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.34% or 41.75 points lower at 12,396.5 points.

Taiwan's Mega ICBC approved to set up office in Suzhou.

Wynn Resorts approved to list Macau unit in HK.

BMW's China sales up 63.2% in Aug.

China Mobile still in talks with Apple on iPhone.

NSSF cuts shareholding in Dalian Port to 4.99%.

China's import, export value falls 20.6% to US$191.7 bln in Aug.

China Mobile kicks off domestic listing.

Tencent mulls overseas M&A.

Henderson Land's Beverly Hills earns HK$8.38 mln.

Haier to set up distribution affiliate in Shanghai.

Ping An earns RMB 118.88 bln in premiums in Jan-Aug.     

U.S. economic recession "very likely over": Bernanke

U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the country's economic recession is very likely over at this point.

More and more data showed that the world largest economy is pulling out of the worst recession since the 1930s. Bernanke admitted that in responding to questions at the Washington based think-tank Brookings Institution.

    The central bank chief also expressed his confidence that the Congress will enact a revamp of the nation's financial rule book to prevent future crisis from happening.

    "I feel quite confident that a comprehensive reform will be forthcoming," Bernanke said.

    In a speech delivered Monday in New York to rethink the one year anniversary of the collapse of Lehman Brothers, President Barack Obama urged the Congress to enact legislation this year.

U.S. Treasury Secretary Tim Geither also said recently that it is essential that the financial overhaul should be implemented to avoid future crisis. 

Warren Buffett to CNBC: No Regrets From Crisis Weekend One Year Ago

Warren Buffett tells CNBC he has no regrets about any of the decisions he made over the weekend one year ago in September, 2008, when the financial crisis was at its worst.

In a taped interview with Squawk Box's Becky Quick airing tonight, Buffett says he "looked hard" at a telephoned offer that Friday night to buy AIG's property casualty operation in the range of $20 billion to $25 billion, but decided against it. 

He recalls telling AIG CEO Bob Willumstad that night, "Unfortunately, I can't do this deal.  And don't waste your time with me, so go someplace else."

He also recalls that he got a phone call Saturday night from Barclay Capital's Bob Diamond, asking about a complicated reinsurance deal that might have convinced the British government to allow Barclay's to come to Lehman's rescue.

About to go to a social event in Edmonton, he asked for a fax with details of the proposal. But when he got back to his hotel at midnight, there was no fax and he assumed the idea hadn't worked out.

Today, in a on-stage appearance with Fortune's Carol Loomis (the editor of his annual letter to shareholders) at the magazine's Most Powerful Women Summit in California, Buffett reveals that 10 months later, with the help of his tech-savvy daughter Susan, he discovered a number of voice-mail messages on his cell phone from that weekend, including one from Diamond.

Did his inability to work his cell phone send Lehman to its doom?  Probably not.  There was a lot going on that night, and it seems unlikely that one connection could have made everything go right when everything was going wrong.

Here's the video clip and transcript of part one of Becky's conversation with Buffett.  (Part two airs tomorrow morning at 6a ET on CNBC's Squawk Box.)

She started by asking Buffett if he agrees with those who say Lehman had to fail to save the rest of the financial system:

WARREN BUFFETT:  Well, I think -- I think Lehman was destined to fail unless the government came in big time.  And -- you know, for one reason or another the -- they generally said they didn't have the authority.  My experience usually as it -- whenever the government wants it they find the authority, but if -- if -- listen, if Merrill Lynch hadn't gotten sold on -- on -- on -- on Sunday -- what would have happened Monday would have been off the charts.

BECKY QUICK: So the --

BUFFETT:  We'll --

BECKY:  -- more important --

BUFFETT:  -- we're --

BECKY:  -- one to save?

BUFFETT:  Lehman -- Lehman probably should have been -- not saved isn't the right world -- word, but transferred in some kind of an orderly manner.  I mean it was -- it was the chaos that came after the fact that it just -- it just happened and there was total disorder.  And I think the trustee for Lehman has said between $50 and $75 billion at Lehman itself was lost unnecessarily because of the disorderly way that the liquidation took place.

BECKY: Obviously there were a lot of calls that were going on behind the scenes at that point.  Were you a part of any of those calls?

BUFFETT: Oh, I -- I got a call.  I was in Edmonton -- at a social event that -- I was at the hotel about 6:00 or so Edmonton time.  And I did get a call from -- from -- the head of -- the head of Barclay's -- Bob Diamond and -- and Michael Klein, who was an investment banker.  And they had just learned apparently that the British authorities would not allow them to take over all of Lehman.  This was not just the part that they took over later.  But they were -- they were talking about -- about coming in and taking over Lehman.  And the British authorities had said if -- if it involved more than three billion pounds, as I remember, it needed the vote of shareholders and that couldn't take place 'til sometime later so they were asking if we would write an insurance contract that would protect everybody on the other side of trades until they got that shareholder approval.  So they were looking for a solution I can tell you at about 8:00 on —

BECKY: On Saturday?

BUFFETT:  -- on Saturday.  And -- 8:00 in the evening.  And -- they didn't find one.

BECKY:  Were you surprised?  I mean it -- what happened?  Did you turn down this offer?  What happened?

BUFFETT:  Well, what happened is they described the transaction to me that I really couldn't grasp -- quickly.  And so I asked them to send me a fax at the hotel.  I was gonna go to the social affair that would break up around midnight.  Send me a fax, but explain the fax action in detail so I could understand it.  Tell me how much of a limit they needed and -- how much of a premium they would pay.  And then I would get back to them promptly.  I'd call 'em that night.  And -- 'cause it was a complicated transaction they were describing.  I didn' t -- I didn't fully understand it and people were waiting for me downstairs.  (CHUCKLES)  Anyway -- well, I got back to the hotel that night around midnight, but there was no fax.  Apparently it blew up at some point in that period.

BECKY:  What -- what did you hear afterwards?  That -- did they explain to you why or what?

BUFFETT:  Well, I -- no, I -- I don't know why they felt the transaction was unfeasible or I don't know if for some other reason that Barclay's decided they couldn't go ahead with Lehman at that point.  And as you know, a few days later they actually made a transaction with the broker-dealer arrangement.  But -- the way I understood it on Saturday at 8:00 New York time or so was that -- that -- one of the authorities in -- in England had ruled essentially that if it involved more than, I think, three billion pounds that they couldn't do it without shareholder approval.

BECKY:  Did you get other phone calls that weekend?

BUFFETT:  I (LAUGHS) got a lot of phone calls.  I had a phone call on Friday night -- the Friday -- late Friday afternoon -- on AIG.  And they -- they were gonna need many, many billions of dollars by the following Wednesday, so I went down to the office on Friday night and looked hard at whether we might possibly buy a very large property casualty operation from them.  And -- spent a few hours then.  And then I called (AIG CEO) Bob Willumstad and I said, "Unfortunately -- I can't do this deal.  And don't waste your time with me, so go someplace else."  Then on Sunday after I got back from Edmonton, AIG was in the picture again and they were looking for an insurance policy in connection with an offer that was being made for AIG.  I think it was by Chris Flowers and perhaps KKR, a few people.

BECKY:  Right.

BUFFETT:  A few people.  And they said they were gonna get goin' to a board meeting and decide whether they were going to accept this.  But if they did accept it would we be good on a certain type of reinsurance transaction.  I said I thought we would.  But then that blew up on Sunday night, so it was -- a lot of action.

BECKY:  Is this different than any time you'd ever experienced before?

BUFFETT:  It was --

BECKY:  That were --

BUFFETT:  -- it was -- except for the Solomon experience I had in 1991, when I was more directly involved.  This was a very extraordinary weekend.  I mean the--

BECKY: What did you see in the AIG deal, in the offer there that you -- that you thought, "Forget about it.  This is not gonna work?"

BUFFETT:  I just -- we were talking about buying a property casualty operation that might have sold in the two -- $25 billion range.  And then I saw -- and, again, if it was me I wouldn't have wanted to pay that in the first place.  And beyond that it would have required New York State Insurance Department approval and who knows was else.  And I just -- there was no way to hand over all that money by Wednesday the next -- the next week.

BECKY:  And in hindsight do you have any regrets about any of the decisions you made that weekend?

BUFFETT:  No.  I -- I mean the -- the -- I should have been probably doing other things too.  No, I -- I'm -- I am -- I am glad we didn't buy that particular insurance operation.  I would have done the reinsurance transaction that was involved on Sunday night.  The Lehman thing I still don't understand, even (CHUCKLES) to this day, exactly what the transaction was.  No, it was -- it was -- it was a movie to see but not to -- participate in.  (LAUGHS)

Current Berkshire stock prices:

Class A: [BRK.A  100000.00    1250.00  (+1.27%)   ]

Class B: [BRK.B  3299.50    42.50  (+1.3%)   ]

Adobe to Buy Omniture for $1.8 Billion, Beats Profit Forecasts

Adobe Systems announced a definitive agreement to acquire software firm Omniture as the company reported stronger-than-expected earnings Tuesday, but Adobe's shares fell in late trading.

Adobe said it will acquire Omniture in a transaction valued at about $1.8 billion. Adobe will commence a tender offer to acquire all of the outstanding common stock of Omniture for $21.50 per share in cash.

Under terms of the deal, Omniture will become a unit of Adobe, headed by its current chief executive Josh James. Adobe said the deal should close in the fourth quarter of fiscal 2009, and would add to Adobe's per-share earnings in fiscal 2010.

Omniture shares [OMTR  17.32    0.32  (+1.88%)   ] closed at $17.32 and jumped around 25 percent after the bell.

Omniture's software, which the company hosts and delivers as a subscription service, is designed to let business customers analyze information generated by their Web sites.

Excluding one-time items, Adobe earned 35 cents a share in its third quarter on sales of $698 million, compared with 50 cents a share on sales of $887 million in the same period last year.

Analysts who follow Adobe expected the company to turn in a gain of 34 cents a share on sales of $686 million, according to a consensus from Thomson Reuters.

Adobe shares [ADBE  35.61    0.42  (+1.19%)   ], which closed Tuesday at $35.61, fell more than 4 percent in extended trading. 

The recession has slowed demand for San Jose, Calif.-based Adobe's Creative Suite 4, the most recent version of the software package that brings in the bulk of the company's revenue.

Adobe's software products include Photoshop Illustrator, Flash, Acrobat and the Web design software Dreamweaver.

Still, analysts say they are seeing stabilization in technology spending among businesses and corporations. And fewer companies buying CS4 will likely mean more pent-up demand for the next software package, Creative Suite 5.

Obama Gets 56% Job Approval Amid Deficit Concerns, Poll Shows

President Barack Obama earns high marks for his performance even as Americans express anxiety about his domestic policies. One possible reason: Republicans aren't offering an alternative.

A Bloomberg News poll gives Obama a job-approval rating of 56 percent and 61 percent say they feel favorably about him. Still, respondents are divided over the president's handling of health care and the economy, while giving him a negative grade on the growth of the budget deficit.

"Americans are despairing of the federal deficit in the wake of several huge government spending programs," says J. Ann Selzer, the president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the poll. "Health care is one more big- ticket item and taxpayers appear to believe at some point they, or their children, will hold the bag."

Republicans aren't benefiting from the negative sentiment toward the economic policies, the poll shows. The survey finds that by about a 2-to-1 margin, Americans say Obama is doing a better job on the economy than his predecessor, George W. Bush.

"He's got good ideas," says poll respondent Donna Lawrence, a 55-year-old corrections administrator from Richmond, Virginia, said of Obama.

'Hornets' Nest'

She says some of the public is too impatient and Obama has kept the economy from getting worse. "He walked into a hornets' nest when he came into office," and the stimulus and the bailouts of the auto and financial industries have helped, she says.

Respondents also say by 40 percent to 32 percent that they would vote for a Democratic candidate for Congress in 2010. A slight plurality, 48 percent to 44 percent, has a favorable opinion of the Democratic Party. The Republican Party, by 52 percent to 38 percent, gets an unfavorable rating.

The survey finds that even as Obama has tried in recent months to stress the urgency of overhauling health care, for almost half of Americans, the economy is the most important issue facing the country. Health care comes second, with 23 percent.

Slightly more Americans are pessimistic than optimistic about the U.S. government's economic plan. Americans are divided over the president's handling of the issue as well as over whether his stimulus program will create jobs. They are also about evenly divided over his handling of health care.

The Bloomberg Poll is based on interviews with 1,004 U.S. adults ages 18 or older from Sept. 10-14. The margin of error is plus or minus 3.1 percentage points.

Deficit Concerns

Pessimism over Obama's handling of the budget deficit is a major factor behind the negative attitudes.

Americans consider the deficit such a problem that a majority, 62 percent, say they would be willing to risk a longer-lasting recession to avoid more government spending. Just 28 percent say they thought more spending would do the most good to help the economy.

Poll respondent Bruce Varholy, a 60-year-old builder from York, Pennsylvania who is an independent voter, is among the 52 percent of Americans who say the country is on the wrong track.

"The amount of money that is being squandered right now by the government is going to really hurt us down the road," he says. "I just view the government as so totally corrupt I don't even know how it functions."

Tab for Grandchildren

Even some who support Obama say they are concerned about spending. "I don't want to see my grandchildren and great grandchildren have to have this on their backs when they become adults," says Lawrence, the poll respondent from Virginia.

While they express anxiety about spending, home values, retirement savings and household income, just 33 percent of respondents say they have no confidence Obama's team will be able to fix the problems that caused the nation's financial crisis.

More than half, 54 percent, say they are also mostly optimistic about the ability of the government to ultimately help the economy recover.

"A year ago we were really standing at the edge of the cliff," says poll respondent Mike Dole, a 64-year-old Veterans Affairs employee in Bethesda, Maryland. "Something needed to be done very, very severely, and he did it."

Some differences in impressions of the U.S. economic policy appear when answers are broken down by demographic groups. Fifty-eight percent of women say they are mostly optimistic about the ability of the government to help the economy recover and grow, compared with 49 percent of men.

Optimism Among Blacks

In a sign that Obama's support from black voters during the election is carrying over to his presidency, blacks are also far more optimistic than whites, with 83 percent expressing optimism compared with 48 percent of whites.

While Americans are about equally divided over Obama's record on health care, when it comes to foreign policy he enjoys solid approval.

Sixty percent of poll respondents approve of the job Obama is doing in managing relations with other countries, and 51 percent approve of his policies on the wars in Iraq and Afghanistan.

Obama's 61 percent favorable rating is matched by Secretary of State Hillary Clinton, his former competitor for the 2008 Democratic presidential nomination, who scores 62 percent.

Both fare better than some other major political figures, including Democratic Speaker of the House Nancy Pelosi, who gets an unfavorable rating of 48 percent, and former Alaska Governor Sarah Palin, the former Republican vice presidential candidate, who has the highest unfavorable numbers of all, at 55 percent. Former Republican House Speaker Newt Gingrich gets 39 percent.

The poll also probes attitudes on climate change, finding that 40 percent of Americans view it as a major threat, compared with 31 percent who say it's a minor threat and just 27 percent who say it's no real threat at all.
 
MARKET BUZZ:
 
(May not be useful for day-traders.)

Gujarat Gas: Likely To Quote Rs 225-250 Ex-Bonus
 
 
 
Gujarat Gas Company Ltd, a subsidiary of the BG Group, is the largest consumer gas distributor operator in India. It has strong presence in the highly industrialized parts in Gujarat namely, Surat, Bharuch and Ankleshwar and has strong pipeline network of 2700 km. Company which supplies about 3 mmscmd natural gas is planning to expand in other areas such as Vapi. It sources gas mainly from GAIL, Niko, GSPL, Cairn and PMT consortium. Moreover, it is set to get natural gas from Reliance's KGD6 fields which will further boost the top line visibility of the company. 

The company announced better numbers in Q2CY09. Higher volume & marketing margin coupled with lower other expenditures boost profitability for the Gujarat Gas reported Q2CY09 at Rs 47.6crore up 30.2% q-o-q. Sales and volume were inline with our expectations. Volume improved 7.3% q-o-q to 249mmscm on account of 0.7mmscmd of spot purchase from Petronet in June. However the volume declined 5.7% y-o-y due to lower level of supply from PMT & Cairn gas field. Volume is growth is back on the track after last few quarters growth was hampered due to lower availability of domestic gas. 

Key Developments 

Gujarat Gas fixes September 19, 2009 as Record Date for Bonus Issue The company has announced Bonus Equity Shares in the ratio of one equity share of the Company of Rs. 2/- each for every one equity share of the Company held and fixed September 19, 2009 as the Record Date for determining the eligibility of the Shareholders entitled to the bonus shares. 

GAIL supplies to Gujarat Gas restored Thanks to reduction in the volume of PMT gas supplied by GAIL to the company it could supply only 68% of the daily contracted volume in July to its over 800 industrial gas customers. Further, company was also forced to buy gas from the spot market at higher rates and charge more for the quantity supplied beyond the RSL (Restricted Supply Level). The volume of gas supplied by GAIL to the Company from the PMT fields, however, have been restored approximately to the levels of gas supplies prior to the notification of the Force Majeure event at the oil evacuation system of the Panna and Mukta fields.

 

Operating margins expand: 

Company has started sourcing LNG due to lower global LNG prices and expects higher spot gas purchase to meet the requirement. Current volume is ~3.2mmscmd and expects to remain at the same level for the next quarter also. It has not yet allocated gas from KG D6 basin whereas CGD players in Maharashtra and Delhi are getting 0.3mmscmd of KG D6 gas. It could be due to the MoPNG's view to allocate initial gas to PNG and CNG customers compared to Industrial retail customers which constitute 85% of sales volumes for Gujarat Gas. However, the issue is being under discussion with PNGRB, which believes customers using up to 50,000scmd are eligible for KG D6 gas.

 

We estimate Gujarat Gas to report strong earnings (CAGR of 15%) over CY2009-10 primarily driven by the higher gas volume, lower global LNG prices and hike in tariff revision. Demand in the Surat-Bharuch belt is increasing and management has already indicated that they can distribute 4.5mmscmd without incurring significant additional capex. Company is awaiting authorization letter from PNGRB on its EoI filled for Bhavanagar and Kutchh region. 

We maintain our positive view on Gujarat Gas as it will be beneficiary in the gas chain of additional volumes and less concern on gas supply in near term. It is one of our preferred pick in CGD space given its robust business model (focused on Industrial Customers compared to CNG and PNG customers), technical leverage from parent British Gas and expansion opportunities within Gujarat.  

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
 

--
Arvind Parekh
+ 91 98432 32381