INTRADAY calls for 01st Dec 2009
+ve script, Sector : CanBank, Rcom, Bhartiartl and Hcltech, Watch Yesterdays Unitech, Positional CUB & DCW
Buy Tatamotors-663 for 676-679+ with sl 658
[Positional also for 712 with sl 644]
Buy Tatasteel-579 for 612-616+ with sl 570
Positional
Buy DivisLab-605 for 670-679+ with sl 580
Buy GToffshore-544 for 579-585+ with sl 525
Expected Breakout - Positional
Buy Eveready-69 above 71 for 90+ with sl 65
NIFTY FUTURE LEVELS
RESISTANCE
5041
5074
5105
SUPPORT
5020
5001
4968
4937
4885
4854
________________________________________________________________ __
Strong Futures
This is list of 10 Strong Futures: Hind Zinc, Jindal Saw, Orchid Chem, McDowell-N, BPCL, BEL, Ranbaxy, Recltd, GSPL & Tata Motors
Weak Futures
This is the list of 10 Weak Futures: Punj Lloyd, EKC, DLF, Unitech, Purva, RNRL, Rel Infra, ICSA, RCom & Aban Off shore
_________________________________________________________________
Nifty is in Up trend
NIFTY FUTURES (F & O):
Rally may continue up to 5041 level for time being.
Support at 5001 & 5020 levels. Below these levels, expect profit booking up to 4968-4970 zone and thereafter slide may continue up to 4937-4939 zone by non-stop.
Buy if touches 4885-4887 zone. Stop Loss at 4854-4856 zone.
On Positive Side, cross above 5072-5074 zone can take it up to 5103-5105 zone by non-stop. If crosses & sustains this zone then uptrend may continue.
Short-Term Investors:
Bearish Trend. Stop Loss at 5082.00.
Down Side Target at 4842.20.
Today's Expectation:
SGX NIFTY is trading at 5042.00. (08.09 AM IST).
This trend is on expected lines.
If this uptrend continues, then it may continue for 1 (or) 2 Days, 1 Week, 1 Month (or) 1 Year.
If Profit Booking starts, then it may continue for 1 Day.
BSE SENSEX:
Yesterday's rally was surprising. Buying may continue, as per technicals.
Short-Term Investors:
Bullish Trend. But missed the target & SL level 16666.70 triggered.
Follow the same stop loss of 16666.70 with a target of 17499.70.
POSITIONAL BUY:
Buy NOVOPAN INDS (BSE Cash & BSE Code: 500310)
Buy with a Stop Loss of 39.25. Above 44.40, it will zoom.
Today: Yesterday's rally was surprising & Expect Profit Booking.
1 Week: Bearish, surprisingly going up.
1 Month: Bullish, as per current market conditions.
3 Months: Bullish, as per current market conditions.
1 Year: Bullish, as per current market conditions.
Buy SHR PACETRONI (BSE Cash & BSE Code: 527005)
Buy with a Stop Loss of 30.25. Above 37.25, it will zoom.
Today: Yesterday's rally was surprising & May Hold on gains.
1 Week: Bearish, surprisingly going up.
1 Month: Bearish, surprisingly going up.
3 Months: Bearish, as per current market conditions.
1 Year: Bearish, surprisingly going up.
Buy TATA STEEL (NSE Cash)
Yesterday's rally was surprising & May hold on gains. Buy with a SL of 517.00. Above 582.00, it will zoom.
1 Week: Bearish, surprisingly in uptrend.
1 Month: Bearish, surprisingly in uptrend.
3 Months: Bullish, as per current market conditions.
1 Year: Bullish, as per current market conditions.
Buy SUZLON ENERGY (NSE Cash)
Yesterday's rally was surprising & May hold on gains. Buy with a SL of 66.25. Above 92.55, it will zoom.
1 Week: Bullish, as per current market conditions.
1 Month: Bullish, as per current market conditions.
3 Months: Bullish, surprisingly in downtrend.
1 Year: Bullish, as per current market conditions.
Buy GOA CARBON (NSE Cash)
Risk is that, it should not trade & sustain below 108.80 level.
Buy THOMAS COOK (I) (NSE Cash)
Risk is that, it should not trade & sustain below 64.65 level.
INDEX SPOT LEVELS
 | 5032.70 | ( 1.84 %) | 90.95 |  |
| | 1 | 2 | 3 |
| Resistance | 5085.28 | 5137.87 | 5209.38 |
| Support | 4961.18 | 4889.67 | 4837.08 |
 | 16926.22 | ( 1.77 %) | 294.21 | |
| | 1 | 2 | 3 |
| Resistance | 17083.50 | 17240.79 | 17454.66 |
| Support | 16712.34 | 16498.47 | 16341.18 |
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 | 30-Nov-2009 | 2801.78 | 2345.67 | 456.11 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) |
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 30-Nov-2009 | 1394.65 | 924.94 | 469.71 |
Interesting findings on web:
Source: Bloomberg.
India's benchmark stock index rose, snapping a two-day 3.3 percent decline, as Asia's third-largest economy grew at the fastest pace in 1 1/2 years last quarter, beating economists' estimates.
Infosys Technologies Ltd., India's second-biggest software exporter, rose 2.2 percent. Bharti Airtel Ltd., the nation's largest mobile phone service provider, climbed 5.6 percent. Stocks also rebounded as concerns of losses from Dubai World's possible default eased.
"GDP numbers could continue to surprise positively," said Kenneth Andrade, head of investments at IDFC Asset Management Co., who manages assets worth $5.5 billion in Mumbai. "Investors over-reacted to the problems in Dubai, which are quite localized."
The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 294.21, or 1.8 percent, to 16,926.22, the most since Nov. 11. The S&P CNX Nifty Index on the National Stock Exchange rose 1.8 percent to 5,032.70. The BSE 200 Index added 1.8 percent to 2,105.51.
The United Arab Emirates pledged support for its banks, easing concerns that losses from Dubai World will spread. Central Bank of the U.A.E. said lenders will be able to borrow money for half a percentage point above the three-month local benchmark interest rate.
India's economy expanded by 7.9 percent last quarter from a year earlier, exceeding all estimates in a Bloomberg News survey of 22 economists, where the median forecast was for a 6.3 percent gain.
'Positive Surprise'
"It's definitely a positive surprise," said Navneet Munot, who oversees about $8.2 billion of assets as chief investment officer at SBI Asset Management Co. in Mumbai. "India's growth rate is more significant in comparison with the rest of the world and investors are able to see this differentiation."
Infosys added 2.2 percent to 2,379.35 rupees. Bharti advanced 5.6 percent to 299.55 rupees. Larsen & Toubro Ltd. gained 1.6 percent to 1,614.60 rupees. Larsen has formed a venture with Nuclear Power Corp. of India Ltd. to build a forging plant at Hazira, the companies said in a joint statement today.
Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, gained 5.4 percent to 663.15 rupees, its biggest gain in almost two months, after it turned to a profit in the second-quarter and Citigroup Inc. raised the stock's rating to "buy" from "hold," citing the earnings outlook.
Wockhardt Gains
Indiabulls Real Estate Ltd. rose 2.5 percent to 206.60 rupees after it was upgraded to "buy" from "sell" at Citigroup Inc., which said concerns on leasing delays and the company's "low execution visibility" are factored into the stock's valuation.
Wockhardt Ltd. [], an Indian drugmaker, rose 2.5 percent to 175.75 rupees. Wockhardt and DBS Bank Ltd. reached an out-of- court settlement over repayment of a 440 million rupee ($9.5 million) loan, Mint newspaper reported, citing a person familiar with the development. N. S. Rajan, a Wockhardt spokesman, declined to comment on the report when contacted by telephone today.
Shriram EPC Ltd., an Indian engineering company, rose 3.4 percent to 229 rupees after signing an agreement to develop power projects with the North West Electric Power Design Institute of China.
Source: Reuters.
* Market cheers better-than-expected Sept qtr GDP
* Worries of debt default in Dubai ease
* Sensex gains 6.5 pct in Nov vs 7.2 pct fall in Oct
Indian shares rebounded 1.8 percent on Monday as investors gave a thumbs up to better-than-expected September quarter GDP data and on a rise in Asia markets as concerns over Dubai's credit woes eased. The gain helped the 30-share main index .BSESN end November up 6.5 percent, erasing most of a 7.2 percent fall in October, which was its weakest monthly performance in 2009.
Banks climbed as most were not likely to see a material impact from Dubai's debt woes, and as higher than expected GDP data affirmed a better economic outlook, dealers said. Top private lender ICICI Bank (
ICBK.BO: Quote, Profile, Research) climbed 1.5 percent while smaller rival HDFC Bank firmed 0.5 percent. "The GDP data positively surprised the market. Also, the realisation that we will not be really hurt by Dubai crisis helped," said Rajen Shah, chief investment officer at Angel Broking. Asia's third-largest economy grew by 7.9 percent in the quarter through September INGDPQ=ECI from a year earlier,data showed, shattering forecasts as stimulus measures boosted demand and manufacturing activity surged.
The 30-share Sensex closed 1.8 percent or 294.21 points higher at 16,926.22, with 26 of its components advancing. It rose as much as 2.4 percent in the day. World equities generally steadied on Monday as the United Arab Emirates shored up its banks after last week's shock. "Though market is more than fairly priced, liquidity flow will continue to help the market," said Shah. The main index has rallied more than 75 percent in 2009, fuelled by foreign fund inflow which exceeded $15 billion.
IT bellwether Infosys Technologies (
INFY.BO: Quote, Profile, Research) rose 2.4 percent, after falling 4.3 percent over the past two sessions, and larger rival Tata Consultancy (
TCS.BO: Quote, Profile, Research) climbed 2.3 percent, after declining 4.5 percent over Thursday and Friday. "IT stocks had fallen a lot last last week. Since the sector outlook is positive, it led to some bottom-fishing in counters like Infosys and TCS," said K. K. Mital, head of portfolio management services at Globe Capital Dealers said there was also fund buying in the telecoms sector, where shares have fallen sharply in recent months as a pricing war has erupted. Top mobile operator Bharti Airtel (
BRTI.BO: Quote, Profile, Research) rose 5.7 percent, second-ranked Reliance Communications (
RLCM.BO: Quote, Profile, Research) rose 3 percent and Idea Cellular rose 4.1 percent respectively.
Top vehicles maker Tata Motors (
TAMO.BO: Quote, Profile, Research) raced 5 percent as higher GDP data pointed consumer spending would pick up, and after the company reported a return to operating profit for its British Jaguar Land Rover unit. "In view of the sequential increase in JLR's volumes and improvement in the company's core domestic business, we reiterate our rating of moderate outperform on Tata Motors," First Global said in a note.
Metals stocks were shining on a good outlook for prices and expectations of strong demand from China, said Ajay Parmar, head of institutional equities at Emkay Global. Steel maker Tata Steel (
TISC.BO: Quote, Profile, Research) rose 5.6 percent, copper producer Sterlite Industries (
STRL.BO: Quote, Profile, Research) rose 3.4 percent and aluminium producer Hindalco (
HALC.BO: Quote, Profile, Research) was up 4.1 percent. In the broader market, gainers led losers in a ratio of 2.8:1 in a relatively lower volume of 334 million shares. The 50-share NSE index .NSEI closed 1.8 percent higher at 5,032.70.
STOCKS THAT MOVED * Larsen & Toubro (
LART.BO: Quote, Profile, Research) climbed 1.7 percent to 1,614.15 rupees on better GDP data and after it and state-owned Nuclear Power Corp announced a 17.25 billion rupee joint venture to make forgings. * Vehicles maker Eicher Motors (
EICH.BO: Quote, Profile, Research) rose 4.4 percent to 568.85 rupees. A senior official said it hopes to sell up to 50,000 Royal Enfield motorcycles during the year to December, up from 43,000 last year.
MAIN TOP 3 BY VOLUME * Suzlon Energy (
SUZL.BO: Quote, Profile, Research) on 22.7 million shares * IFCI (
IFCI.BO: Quote, Profile, Research) on 16.2 million shares * Unitech (
UNTE.BO: Quote, Profile, Research) on 11.5 million shares.
Source: India Infoline.
Past two trading sessions saw equity markets in India being badly beaten down as debt problems in Dubai took its toll on financial markets world over. The Nifty index fell over 160 points or 3.2% while the Sensex lost over 550 points or 3.2% in the past two trading session.
However, Monday saw the bulls back on Dalal Street recouping from previous weeks on hopes that situation in Dubai is not that bad after all for the time being.
The come back also could be attributed to firm cues from the Asian markets. Better than expected GDP numbers for the July-September quarter further provided a fillip to sentiment on Dalal Street.
The country's Gross Domestic Products (GDP) grew at the fast pace in over 12 months. GDP grew 7.9% in the July-September quarter in the same period last year. The economy grew at 6.1% as compared to an estimated growth of 6.2% in the first quarter.
The index of mining, manufacturing and electricity, registered growth rates of 9.5%, 9.2% and 7.5%, respectively in Q2 of 2009-10, as compared to the growth rates of 3.8%, 4.9% and 3.2% in these industries in Q2 of 2008-09.
Buying was witnessed in the large caps which were randomly beaten down last week especially, the telecom heavyweights like Bharti and RCom were in demand. Even the Metals, IT and the Consumer Durable stocks were among the major gainers. The Mid-Cap and the Small-Cap stocks attracted buying interest.
The BSE Sensex surged 294 points to end at 16,926 after touching a high of 17,026 and a low of 16,739. The index opened at 16,655 against the previous close of 16,632. The NSE Nifty was up 91 points to shut shop at 5,033.
Coming back to India, among the BSE sectoral indices, the Metal index was the top gainer, adding 3.7%, followed by the Teck index that was up 2.5% and the BSE IT index was up 2.1%.
The BSE Mid-Cap index gained 1.6% and the BSE Small-Cap index was up 2%.
Among the 30-components of Sensex, 26 stocks ended in the green and only Hero Honda, SBI, Maruti and Sun Pharma ended in the negative terrain. Among the major gainers were Bharti Airtel, Tata Steel, JP Associates, Tata Motors and Hindalco.
Outside the frontline indices, the big gainers in the broader market were GMDC, Hindustan Zinc, CESC, Tulip Tele and JP Hydro. On the other hand, losers included Dabur India, Apollo Hosp, Allahabad Bank and Videocon Industries.
Shares of Suzlon surged by 6% to end at Rs78.45 after the company's subsidiary REpower Systems received an order from Saint-Laurent Énergies, Canada, for supply of 954 MW of wind turbines. The deal size is estimated at about Rs48bn.
REpower signed a framework agreement with EDF Energies Nouvelles and RES Canada, the joint owners of Saint-Laurent Énergies for the turbines to be installed across five projects in Quebec.
Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy, said it is one of the largest orders in the North American market.
Shares of ONGC gained by 2.5% to Rs1199 after reports stated that the company found traces of a new oil reserve in Gujarat.
The new hydrocarbon structure located at North Kadi in the Mehsana area is likely to produce at least 1 mmtpa of oil (about 20,000 barrels of oil per day). This is a little less than half the oil production from Mehsana, the company's largest onshore field with a production of 2.2 mmtpa.
However, later the company denied reports on new oil discovery at Mehsana block in the western state of Gujarat and further said it plans to drill one new well in Mehsana area.
Suven Life Sciences surged over 4% to end at Rs25.85 after the company announced that the European Patent Office (EPO) Issued 3 new Patents: EP1537113, EP1704154 and EP1856132 corresponding to three New Chemical Entities (NCEs) for the treatment of disorders associated with Neurodegenerative diseases and these Patents are valid until 2022,23 and 24 respectively.
Shares of Wockhardt surged by over 2.5% to Rs175 after reports stated that the Pharma major and DBS Bank agreed to an out-of-court settlement of a dispute over loans Wockhardt had taken from the Singapore-based lender.
Both the concerned entities have approached the Bombay High Court with a consent decree, reports added.
In the previous month, DBS had filed a winding-up petition against Wockhardt in the Bombay HC, seeking liquidation of the company in order to pay off dues to its creditors.
Indiabulls Power and Morgan Stanley have extended the stabilisation period for six trading days (that is upto December 07, 2009) days or expiration of the Green Shoe Option quota of 50,900,000 Equity Shares, whichever is earlier.
Shares of Indiabulls Power gained by 1% to end at Rs33. The scrip opened at Rs32.50 it touched an intra-day high of Rs33.85 and a low of Rs31.90 and has recorded volumes of over 4.8mn shares on BSE.
Source: Kotak Securities.
Among the Sensex pack 26 stocks ended in green territory and 4 in red. The market breadth indicating the overall health of the market remained positive as 2054 stocks closed in green while 710 stocks closed in red and 68 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 294.21 points or (1.77%) at 16,926.22 and NSE Nifty ended up by 90.55 points or (1.84%) at 5,032.70. BSE Mid Caps and Small Caps closed with gains of 102.71 and 153.61 points at 6,415.47 and 7,522.98 respectively. The BSE Sensex touched intraday high of 17,026.91 and intraday low of 16,655.75.
Gainers from the BSE Sensex pack are Bharti Airtel (5.66%), Tata Steel (5.60%), JP Associates (5.20%), Tata Motors (4.99%), Hindalco (4.07%), Sterlite Industries (3.39%), RCom (3.03%), ONGC Ltd (2.64%), Infosysb Tech (2.39%), TCS Ltd (2.32%), HDFC (2.07%), Tata Power (1.97%), L&T Ltd (1.74%), ICICI Bank (1.53%), Reliance Industries (1.33%), M&M Ltd (0.98%) and Reliance Infra (0.89%).
Losers from the BSE Sensex pack are Herohonda (1.42%), SBI (0.19%) and Maruti Suzuki (0.15%).
India''s economy reported strong growth of 7.9% during the second quarter ended September 2009, from a year earlier. However, the economy grew at 6.1% during the first quarter of this fiscal and 7.7% during the corresponding period of previous year. Meanwhile, the manufacturing output expanded by 9.2% during July-September, as compared to the 5.1% of the corresponding period of previous year. Besides, farm output grew by an annual 0.9% as against 2.7% a year earlier.
On the global markets front, the Asian markets that opened before the Indian market, ended mostly higher. Shanghai Composite, Hang Seng, Nikkei 225 and Seoul Composite ended up by 99.04, 687, 264.03 and 31.1 points at 3,195.30, 21,821.5, 9,345.55 and 1,555.60 respectively. However, Singapore's Straits Times lost 30.10 points at 2,732.12.
European markets, which opened after the Indian market, are trading mostly down. In Paris the CAC 40 is trading with loss of 40.83 points at 3,680.60. Going ahead, in Frankfurt DAX index is trading down by 57.46 points at 528.15, whereas in London FTSE 100 is up by 11.97 points at 5,206.10.
The BSE METAL index was at 16,292.03 up by 575.02 points or by (3.66%) The main gainers were Hindustan Zinc up by (7.84%) at Rs.1202.35, Jindal Saw up by (6.31%) at Rs.928.85, Tata Steel up by (5.6%) at Rs.575.4, Jsw Steel up by (5%) at Rs.992, Hindalco Inds up by (4.07%) at Rs.138.05.
The BSE TECk index was at 3,026.93 up by 75.14 points or by (2.55%) The main gainers were Bharti Airtel up by (5.66%) at Rs.299.7, Niit up by (5.47%) at Rs.68.45, Idea Cellular up by (4.09%) at Rs.50.95, Ibn18 Broad up by (3.72%) at Rs.92.1, Deccan Chron up by (3.67%) at Rs.155.2.
The BSE IT index was at 4,757.27 up by 97.74 points or by (2.1%) The main gainers were Niit up by (5.47%) at Rs.68.45, Rolta India up by (3.16%) at Rs.169.65, Hcl Tech up by (2.55%) at Rs.338.1, Financial Tech up by (2.39%) at Rs.1298, Infosys up by (2.39%) at Rs.2383.95.
The BSE CD index was at 3,489.43 up by 58.87 points or by (1.72%) The main gainers were Titan Inds up by (4.49%) at Rs.1340.2, Blue Star up by (1.15%) at Rs.343.65, Gitanjali Gems up by (1.09%) at Rs.116.4, Rajesh Exports up by (1.05%) at Rs.77.
The BSE OIL&GAS index was at 10,282.75 up by 161.52 points or by (1.6%) The main gainers were Cairn India up by (3.37%) at Rs.277.35, Essar Oil up by (2.74%) at Rs.131.4, Ongc up by (2.64%) at Rs.1199.05, Aban Offshore up by (2.03%) at Rs.1262.45, Gail India up by (1.74%) at Rs.419.25.
The BSE PSU index was at 9,139.38 up by 135.57 points or by (1.51%) The main gainers were Engineers India up by (5.05%) at Rs.1422.4, Rec up by (4.08%) at Rs.244.8, Nmdc up by (3.75%) at Rs.409.5, Hindustan Copp up by (3.54%) at Rs.265.05, Sail up by (3.33%) at Rs.197.25.
Bharti Airtel zoomed 5.66%. The country''s top telecom company has bagged the "Best Global Wholesale Carrier for 2009" award at the Telecoms World Awards Middle East held in Dubai.
Tata Motors increased 4.99%. The company is supposedly planning to produce hybrid versions of its low cost car Nano in order to join in the environment-friendly trend.
Suven Life Sciences Ltd (Suven) advanced 4.87%, after European Patent Office (EPO) has Issued 3 new Patents: EP1537113, EP1704154 and EP1856132 to the company.
L&T gained 1.74%. It has formed a $370 mn joint venture with the state-run Nuclear Power Corporation of India (NPCIL) for making nuke forgings, a vital component in the construction of nuclear reactors. L&T will hold a 74% in the joint venture while NPCIL will be the minority partner with 26% holding.
Wockhardt Ltd jumped 2.42% after reports stated that the Pharma major and DBS Bank agreed to an out-of-court settlement of a dispute over loans Wockhardt had taken from the Singapore-based lender.
ONGC rose 2.64% on reports it has found hints of a new oil reserve in Gujarat that could raise its onshore oil production by 20%. The new hydrocarbon structure is expected to produce minimum 1 million tonnes per annum (mmtpa) of oil.
Rupee:
The partially convertible rupee INR=IN ended at 46.50/52 per dollar, off a high of 46.3450 but still 0.30 percent stronger than its close of 46.64/65 on Friday. (Source: Reuters).
ASIA:
Source: The Wall Street Journal.
Asian shares were mixed Tuesday as a strong yen continued to hurt export stocks in Japan, while Mitsubishi UFJ Financial Group was lower after announcing fund raising plans.
Japan's Nikkei 225 was down 0.7%, Australia's S&P/ASX 200 was up 0.2%, New Zealand's NZX-50 gained 0.6% and South Korea's Kospi Composite was up 0.5%. Dow Jones Industrial Average futures were up three points in screen trade.
On Monday, Asian stocks had already rebounded from Friday's sharp losses triggered by the Dubai World debt news, so Wall street's tepid rise overnight failed to spark much fresh buying.
"The market had been without any significant news for some time and it was ready to pounce on anything. The Dubai debt issue provided the perfect means to express the market's restlessness," said David Taylor at CMC Markets.
Analysts said the markets were now looking for fresh catalysts after recovering from the Dubai shock, and expect some caution as holiday spending figures in the U.S. looked limp.
"Black Friday weekend sales won't likely provide any fresh momentum...as average spending fell from a year ago, indicating U.S. consumers are still reluctant to open their wallets," said Jung Seung-jae at Mirae Asset Securities.
Mitsubishi UFJ Financial Group was down 1.0% in heavy volume after Monday saying it will raise up to Y1.056 trillion ($12.24 billion) by issuing new shares, including an over-allotment option, in what would be the biggest-ever share sale by a Japanese financial institution.
Japan's largest bank by assets and market capitalization had already announced a plan to raise up to Y1 trillion by issuing common shares earlier last month.
Other financials in Tokyo were lower with Mizuho Financial down 2.5% and Sumitomo Mitsui Financial down 1.8%. Shipping stocks were sharply lower after the Baltic Dry Index fell 2.2% Monday. Mitsui O.S.K. Lines was down 2.5% and Nippon Yusen was off 5.2% at a fresh 2009 intraday low. The Topix marine transport subindex was 3.5% lower, the worst performer on the board.
Exporters were also hurt by the strong yen, with Sony down 1.5%, Canon down 1.5% and Toyota Motor off 1.5%. As Monday's rally on short-covering has run its course, stronger yen concerns are once again weighing on sentiment, said Meiwa Securities senior market analyst Masayoshi Yano. "The market doubts that the government will provide sufficient, effective measures to tackle yen strengthening and deflation," he said.
In Sydney, banks and resource stocks were lower as investors took profits after solid gains on Monday. National Australia Bank was down 0.3% and Westpac was down 0.6%, while Rio Tinto was down 0.5% and BHP Billiton lost 0.3%. However gains in Telstra, up 1.8%, and Newcrest Mining, up 2.3%, were supporting the overall market.
South Korea's banks continued their recovery from Friday's sharp falls. KB Financial was up 0.9%, Shinhan Financial was 1.1% higher. Exporters were also higher as the strengthening Japanese yen against the Korean won was offsetting disappointing Black Friday weekend sales. Samsung Electronics was up 0.8% and Hyundai Motor was 2.0% higher.
In New Zealand, Restaurant Brands shares had jumped 11.6% after the fast-food chain company late Monday lifted its guidance for fiscal year 2010 due to better-than-expected trading results. The company now expects net profit, excluding non-trading items, to reach NZ$17.5 million in the year to February 28, up 50% on the previous year.
In foreign exchange markets the euro was steady against the U.S. dollar at $1.5017 from $1.5015 late Monday in New York, and was at Y129.70 against the yen from Y129.80. The U.S. dollar was at Y86.36, from Y86.45.
"While we cannot rule out a resumption of 'risk off' trading this week, it does seem that knee-jerk selling of Emerging Markets and other risk assets has subsided," said Brown Brothers Harriman.
Lead December Japanese government bond futures were slightly higher, reflecting gains in U.S. Treasurys Monday and domestic share market weakness. Futures were up 0.02 at 139.76 points.
The bond market in Tokyo was awaiting the results of Ministry of Finance's 10-year bond auction, with the result due at 0345 GMT. Ten-year cash bonds were yet to change hands.
Spot gold was slightly higher at $1,180.00 per troy ounce, up $1.10 from the New York close.
Nikkei 225 9,256.67 -88.88 ( - 0.95%). (07.56 AM IST)
HSI 21874.49 +52.99 +0.24%. (07.57 AM IST).
SSE Composite 3195.30 3205.01 3210.00 3175.81 + 0.30. (07.58 AM IST)
INVESTMENT VIEW
IFCI-Value Buy
We have reviewed annual report of IFCI. With acceleration in recovery rate, the institution has returned to dividend list after ten years. We retain 'BUY' on IFCI and upgrade our one year target price to Rs 78/- per share.
Recovery process to accelerate
With a rebound in economic activity, we expect NPA recoveries to accelerate. We have revised our estimate on chances of recovery to 40%, from earlier 30% of provided NPA. Gross NPAs have scaled down 5% to Rs 5,152 cr from year ago. Net NPAs as of March 09 were Rs 463 cr. However, excluding one power project which is likely to be upgraded, net NPAs stand just at Rs 77 cr.
Adequately Capitalized
IFCI has a very comfortable capital adequacy ratio of 19.7%. It can easily grow at an accelerated rate without raising fresh capital. It continues its plan to rope in a strategic partner which will not only bring in capital to strengthen the balance sheet, but also bring in the required expertise to expand its reach in the financial services gamut.
Fresh sanctions in full swing
Total approvals increased to Rs 40 bn as against Rs 25 bn in previous year, similarly total disbursement has improved to Rs 33 bn as against Rs 23 bn last year.
Dividend declared after 10 years
After a gap of ten years, IFCI has declared dividend of 8% for FY09. It has declared dividend after fulfilling the necessary precondition of making profit for last three years.
(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.)
INVESTMENT VIEW
GAIL-Building A Leviathan!
Target Rs 501
Management expects increase of current ~150 mmscmd transmission capacity to ~300 mmscmd by FY13 through capex of INR 300 bn.
Gas supplies from KGD6 (post the fresh allocation of 20+30 mmscmd) as well as ramp up of LNG terminals (Dabhol, Dahej, and Kochi) are expected to buoy FY14 volumes to ~200 mmscmd (CAGR of 20%), implying capacity utilisation of ~66-75%. GAIL expects a 5-10% upward revision in HVJ tariffs against our assumption of 15% decline.
Incorporating petrochemical expansion into earnings
The Pata petrochemical plant is in the midst of expansion from 410 KT to 500KT and the INR 1.25 bn project is expected to be completed by September 2010.
Further, expansion of 800 KT at a cost of INR 50 bn is anticipated to be complete by 2013. Incorporating this increase in production volumes in earnings assumptions
leads to a 50-60% increase in petrochemical EBITDA by FY13.
Revising up FY11-12E earnings 4-8%; the SOTP works out to INR 501/share
Consequent to increased volume assumptions for gas transmission and petrochemicals, the stabilised FY14-15 EPS estimate of INR 38/share implies a CAGR of ~13% in earnings over the next four years. The forecast is conservative as little value has been ascribed to GAIL investments-no earnings from the CGD or E&P businesses; hence, future upsides are likely. Non-core businesses/investments contribute only INR 147/share to the SOTP.
Outlook and valuations: Strong gas transmission growth
GAIL's plan of raising INR 280 bn over next four years (debt and possibly equity as well) gives us confidence in growth expectations spanning transmission, petrochemicals, and CGD businesses. At CMP of INR 419.25/share, GAIL is trading at 14.0x our FY11E earnings, 2.2x our FY11E book, and 10.0x FY11E EV/EBITDA.
BUY
(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.)
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Arvind Parekh
+ 91 98432 32381
