NEW DELHI: After having established itself as a major player in the petroleum sector in the domestic market, Reliance Petroleum Limited (RPL) has chalked out major plans for “major acquisitions” abroad during 2008. In addition to this, it is exploring the possibility of making a foray into the retail petroleum sales in Europe and the U.S.
“We are looking for major acquisitions abroad. We will do something world scale and these acquisitions could be in the range of $10-15 billion,” according to Reliance Petroleum’s international business head, Atul Chandra.
An indication to this effect has come with the recent spate of acquisition of oil and gas assets by Reliance Industries Limited (RIL), the parent company, in various countries.
RIL was awarded oil and gas contract in the Kurdistan region of Iraq and it signed a production sharing agreement for a deep water offshore block in Oman. It entered into a memorandum of understanding with Gas Authority of India Limited (GAIL) to set up petrochemical plants globally and also, last week, signed two exploration and production contracts with Agencia Nacional de Hydrocarburos (ANH) of Colombia for two offshore blocks.
“We hope one lakh barrels a day should be available from India. Therefore, I should look at another three lakh bpd overseas. Reliance could begin looking for more refining deals once the $6 billion refinery project is finished in mid-2008,” Mr. Chandra said.
On the other hand, it is exploring ways and means to directly sell petroleum products in the U.S. and Europe.
Saturday, 15 December 2007
Buying in Reliance Industries is the best bet
Friday’s trading activity witnessed volatile movement. The sentiment reading of the tradable counters changed to bearish. Bull move on Monday is likely to change the sentiment reading in their favour.
On the contrary, the current sentiment reading is likely to be strengthened with additional counters.
Nifty Futures
The December contract opened with a bull gap of around 43 points from its previous close. The December contract moved within a range of around 92 points and closed with a gain of around 8 points from its previous close.
The long position in the December Nifty contract is exited and initiated a fresh downtrend. The short exit and long entry levels are placed quite far away from its last traded price. These levels are unlikely to be triggered during Monday’s trading activity.
Stock Futures
The composition and the ranking of the top-10 list had minor changes.
ONGC made its way to top-10 list pushing out MTNL. Reliance Industries and Reliance Capital interchanged their positions. The long exit level for Hindalco is placed at 209.20.
Except IDBI and Tata Steel all other counters in the top-10 list are in downtrend. All the uptrend counters are likely to be under threat for Monday’s trading.
On the other hand, bull move on Monday is likely to terminate all the downtrend counters except ICICI Bank. Buying opportunities are likely to exist in Reliance Energy, Reliance Industries, Reliance Capital, NTPC, SBI, GAIL and ONGC. Selling opportunities are likely to exist in IDBI and Tata Steel.
The best among the above is likely to be buying in Reliance Industries. This counter is in downtrend. Bull move on Monday is likely to reverse the trend in this counter.
Cash Segment
The composition of the top-10 list had no changes. However, the ranking of the top-10 list had minor changes. ICICI Bank and Reliance Capital interchanged their positions. The short exit level for Suzlon is placed at 1985.95.
Except IDBI all other counters in the top-10 list are in downtrend. The uptrend counter IDBI is likely to be under threat for Monday’s trading. On the other hand, bull move on Monday is likely to terminate all the downtrend counters except ICICI Bank.
Buying opportunities are likely to exist in all the downtrend counters except ICICI Bank. A lone selling opportunity is likely to exist in IDBI.
The best among the above is likely to be buying in Reliance Industries. This counter is in downtrend. Bull move on Monday is likely to reverse the trend in this counter.RBI tightens norms on banks' market play
MUMBAI: With the Sensex crossing the 20,000 milestone, the Reserve Bank of India (RBI) is not taking any chances with banks’ exposure to stock markets. The central bank has widened the definition of stock market exposure and has given banks six months to bring down exposure to equities.
In a circular, RBI has told banks that exposure to stock markets will now include lending by banks to mutual funds and also payment commitments made to stock exchanges on behalf of mutual funds and foreign institutional investors (FIIs).
Until now, RBI had announced the exposure limit for loans and advances to individuals against units of mutual funds. However, there are no explicit guidelines for grant of loans and advances to fund houses for their short-term liquidity requirement.
“The annual inspection of certain banks and an analysis of the consolidated prudential return (CPR) of some banks show that they have extended large loans to various mutual funds and have also issued irrevocable payment commitments (IPCs) to stock exchanges (BSE & NSE) on behalf of mutual funds/FIIs. These exposures have, however, not been included by the banks for computation of their capital market exposure,” the circular said.
It goes on to add that after examining these loans, the central bank had decided that they constitute capital market exposure.
According to Sebi regulations, mutual funds can borrow to meet temporary liquidity needs for repurchase, redemption of units or payment of interest or dividend to unit holders. However, this borrowing is limited to 20% of the net asset of the scheme and for a duration not exceeding six months.
“The Sebi guidelines imply that mutual funds should normally meet their repurchase/redemption commitments from their own resources and resort to borrowing only to meet temporary liquidity needs. In view of the above, banks are advised to be judicious in extending finance to mutual funds and grant loans and advances to mutual funds only to meet their temporary liquidity needs,” RBI said. Irrevocable payment commitments are issued by banks to enable mutual funds transact in stock exchanges.
According to RBI, these commitments are to be reckoned as guarantees issued for the purpose of capital market operations and should, therefore, form part of capital market exposure.
Stock market exposure along with real estate and commodities comprise exposure to sensitive sector. Last year, the central bank had cracked down on banks’ exposure to real estate after it doubled in 2006-07. The regulator also widened the scope of real estate during the year.
It has also asked banks to treat loans extended for setting up special economic zones (SEZ) as real estate loans. Capital market exposure, in addition to exposures to shares and mutual funds, also include investments in convertible bonds, debentures, and all exposure to venture capital funds. The overall exposure (fund and non-fund) cannot exceed 40% of the bank’s previous year’s net worth.
In a circular, RBI has told banks that exposure to stock markets will now include lending by banks to mutual funds and also payment commitments made to stock exchanges on behalf of mutual funds and foreign institutional investors (FIIs).
Until now, RBI had announced the exposure limit for loans and advances to individuals against units of mutual funds. However, there are no explicit guidelines for grant of loans and advances to fund houses for their short-term liquidity requirement.
“The annual inspection of certain banks and an analysis of the consolidated prudential return (CPR) of some banks show that they have extended large loans to various mutual funds and have also issued irrevocable payment commitments (IPCs) to stock exchanges (BSE & NSE) on behalf of mutual funds/FIIs. These exposures have, however, not been included by the banks for computation of their capital market exposure,” the circular said.
It goes on to add that after examining these loans, the central bank had decided that they constitute capital market exposure.
According to Sebi regulations, mutual funds can borrow to meet temporary liquidity needs for repurchase, redemption of units or payment of interest or dividend to unit holders. However, this borrowing is limited to 20% of the net asset of the scheme and for a duration not exceeding six months.
“The Sebi guidelines imply that mutual funds should normally meet their repurchase/redemption commitments from their own resources and resort to borrowing only to meet temporary liquidity needs. In view of the above, banks are advised to be judicious in extending finance to mutual funds and grant loans and advances to mutual funds only to meet their temporary liquidity needs,” RBI said. Irrevocable payment commitments are issued by banks to enable mutual funds transact in stock exchanges.
According to RBI, these commitments are to be reckoned as guarantees issued for the purpose of capital market operations and should, therefore, form part of capital market exposure.
Stock market exposure along with real estate and commodities comprise exposure to sensitive sector. Last year, the central bank had cracked down on banks’ exposure to real estate after it doubled in 2006-07. The regulator also widened the scope of real estate during the year.
It has also asked banks to treat loans extended for setting up special economic zones (SEZ) as real estate loans. Capital market exposure, in addition to exposures to shares and mutual funds, also include investments in convertible bonds, debentures, and all exposure to venture capital funds. The overall exposure (fund and non-fund) cannot exceed 40% of the bank’s previous year’s net worth.
857 stocks hit upper circuit filter on BSE
K.S. Badri Narayanan
Chennai, Dec. 14 Traders went berserk on small-cap stocks on Friday sending every third stock on the Bombay Stock Exchange to upper circuits.
Upward march
The intensity of buying was so strong that 857 stocks hit the upper circuit at the bourse, out of 2,940 stocks traded. However, just 52 stocks hit the lower circuit. In the upper circuit, there were only buyers and no sellers, with the pattern being just the opposite in the lower circuit. Under circuit-filter conditions, stock prices can move in a certain price band as decided by the stock exchanges.
The situation on the National Stock Exchange (NSE) was no different, as 177 stocks hit upper circuit while 20 counters hit downward freeze out of the 1,191 stocks traded.
Brokers said the day’s trading at both the exchanges indicated a lot of interest in small-cap stocks. According to market participants, though the benchmarks — the BSE Sensex and the NSE’s S&P CNX Nifty — have been witnessing some pressure at higher levels, the story was different for small- and mid-cap indices, as they continued their upward march relentlessly for the last few days.
Even on Friday, the BSE Small-cap index jumped 1.57 per cent and the mid-cap index by 1.02 per cent while the BSE Sensex slipped 0.37 per cent and the NSE Nifty declined 0.17 per cent. Both the BSE small-cap and the mid-cap indices have registered another new peak during intra-day.
B2-group actionMost of the stocks that hit the upper circuit were outside BSE 500 index. There were just eight stocks from BSE 500 that hit the upper circuit while three stocks belonged to ‘A’ group. Among the various groups on the BSE, 419 stocks were from B2-group, 190 from T-group and 70 from B1-group.
The advance-decline ratio was also in favour of bulls as 70 per cent of total traded stocks gained in value against 28 per cent that de clined on the BSE.
According to market participants, the circuit filter tally could be higher if one considers stocks that are also trading in futures & option segment. Circuit filter does not apply to stocks that are trading in F&O segment, according to exchange rules. Mr Arun Kejriwal of KRIS Securities, said: “Mid- and small-cap stocks did not participate in the rally when the Sensex moved from 15,000 to 20,000.
With foreign institutional investors going on holiday, action has been shifted to this sector. Retail investors are also happy with this rally as they are active in this segment.”
However, traders advised investors to stay off from junk stocks. The rally is likely to continue in mid and small-cap space for some more time, Mr Kejriwal added.
Among the stocks that hit upper circuit filter include Rashtriya Chemicals, Gillette India, National Fertilisers, Sun Pharma Advanced Research and PNB Gilts.
Friday, 14 December 2007
A Leader In Securities Settlement, Bank Tracks Indian Stock Market
Stock markets have soared in India for the last few years. HDFC Bank (NYSE:HDB) has held on for the ride. The Indian bank (OOTC:INDIF) is the market leader in the brokerage transaction and settlement business, and booming markets bring money to the bank.
That cash, which it doesn't have to pay interest on, gives it cheap funds to lend out to the growing middle and business class in India.
It's a recipe for growth at Mumbai-based HDFC
"The stock market volumes have gone through the roof," said Anindya Chatterjee, an analyst at Jefferies (NYSE:JEF) & Co.
India's benchmark Sensex index has more than doubled since the beginning of last year. So has the market capitalization of India's listed stocks, to above $1 trillion.
Brokerage Industry
Chatterjee says there's $5 billion in cash transactions daily on the Bombay (OOTC:BBAO) and national stock exchanges. Six out of 10 brokerages have their accounts at HDFC Bank.
That access to cheap capital gives HDFC among the highest net interest margins of any bank in India. Net interest margin is the spread between a bank's cost of money and the rate it gets on loans. HDFC had a 4.3% margin in fiscal 2007, up from 4% in 2006.
The bank is also expanding its retail presence. In the U.S., it's hard to find a street corner without some sort of bank branch.
Not so in India.
There are still large swaths of suburban and rural areas of the country with few banking options. At the same time, rapid economic growth -- second only to China's -- is creating a growing middle class, with increasing demand for banking services.
Businesses with an eye toward expansion are also reaching out for loans.
To serve them, the bank now has more than 750 branches throughout the country, up about 60% from two years ago. The company is reaching out to the so-called "unbanked" in the rural areas. More than 60% of its branches are outside of the county's nine largest metro regions.
ATMs
HDFC also has about 1,800 ATMs in 327 cities. Those machines account for about half of its transactions.
"There is an Indian growth story, but they're also expanding their market share," said Ann Heffron, an analyst at Zacks Investment Research.
Analysts say HDFC is among the best-managed banks in India and has avoided pitfalls such as making bad loans.
It has also invested in technology platforms and infrastructures that give it a leg up in the lucrative securities transactions clearing and settlement business.
HDFC Bank was formed in 1994 by an Indian mortgage company, Housing Development Finance Corp. In the past five years, the bank has grown its customer base from 2.1 million to more than 10 million.
Earnings Growth
The bank's American depositary receipts started trading in the U.S. in 2001.
HDFC posted earnings of 79 cents per ADR in its second quarter, which ended in September. That was up 46% from a year ago. Sales of $717 million were up 66% from the year before.
In fiscal 2007, the company reported earnings of $2.41 per ADR. Analysts surveyed by Thomson Financial look for $3.61 per ADR this year.
HDFC has been careful so far.
"They've also been able to maintain a much better book of loans, qualitywise, than their competitors," Heffron said.
But Chatterjee says caution puts HDFC a step behind in some categories.
It ranks second or third in most retail loan segments, behind ICICI Bank (NYSE:IBN)
Chatterjee says HDFC is less aggressive than ICICI at chasing lucrative corporate business, particularly among Indian businesses expanding overseas. That's a potential growth area, though Chatterjee says ICICI has a head start on landing that business, plus the fee income that comes with it.
Indian banks seem to have little direct exposure to the subprime mortgage mess in the U.S.
"Often the emerging markets have taken it on the chin, but they seem not to have direct exposure to U.S. subprime investments," Heffron said.
HDFC still could be hurt if the U.S. subprime troubles cause economic ripples that slow the influx of investments in India.
Bumpy Market
The Sensex has been bumpy since first cracking the 20,000 mark in October. It fell, then rebounded, and is now just below that mark. HDFC Bank would feel the pinch if Indian stocks lost their luster.
Regulations could still hurt the bank, and other Indian ADRs too.
The Securities and Exchange Board of India took steps in October to tamp down on the use of offshore derivative instruments, a tool used by some hedge funds and other nonregistered investors in India. The idea was to increase transparency in the market, though some said it restricted liquidity.
HDFC is susceptible to the potential troubles of any fast-growing company. It could run low on capital, forcing it to issue new shares periodically.
That would raise the risk of earnings dilution, analysts say.
The changing face of Infosys
Plunging share prices. Shrinking growth. Sexual harassment charges. Kris Gopalakrishnan, N R Narayana Murthy and Nandan Nilekani have faced numerous challenges - and always come out on top.
"The more things change, the more they remain the same" says N R Narayana Murthy, chairman and chief mentor, Infosys borrowing a quote from French critic, journalist and novelist, Jean-Baptiste Alphonse Karr. Murthy is summing up Infosys's journey over the last 26 years - from a start-up in a tiny apartment in Pune to the $4 bn global company that it has become today.
Murthy is right in at least one respect. Every new CEO of Infosys has to go through a baptism by fire. As the first, Murthy braved tremendous odds to start an IT service company in India without any venture capital and with just Rs 10,000 in equity. In 2002, barely a few months after Nandan Nilekani, co-chairman became the next CEO, Infosys faced its biggest crisis - its Head of Ssales, Phaneesh Murthy resigned , following charges of sexual harassment. The same year, on the back of a global slowdown in the IT spending, Infosys saw its growth shrinking for the first time.
Things looked great when Nilekani handed over charge to co-founder S 'Kris' Gopalakrishnan in June. Business was growing by 30% and it looked like Gopalakrishnan would have an easy time running the company. But six months later, the new CEO faces one of the biggest crises of the outsourcing industry. Although Infosys' revenue growth remains strong, the Indian rupee has appreciated 12% in the last one year, putting margins under serious pressure. Once the darling of the Indian stock markets, the Infosys stock has steadily slipped in the last twelve months, at a time when the Sensex is zooming.
All eyes are now on Gopalakrishnan to see how he handles this latest crisis. The Infosys board, its 70,000 employees and investors are keenly watching the new CEO to see if he can protect margins by replacing low-end services work with high-end solutions. Analysts are watching to see if he will deploy the huge cash reserves that the company is sitting on to make an acquisition. Gopalakrishnan will also have to shore up the leadership pipeline to find new leaders who can take over from the current leaders once they begin to hit the company's retirement age of 57.
Comparisons will also be made with his two predecessors, who had extremely successful tenures and a captivating public image. No wonder Gopalakrishnan admits to pressure in running this hugely successful company. In an interview to ET in June, he had said that "Very rarely do people get an opportunity to lead a brand which is so well known and has done extremely well too. There is a lot of expectation, and that puts a lot of pressure on me."
As the first CEO Murthy created a solid foundation - laying down processes and best practices, building a strong culture and establishing Infosys as the most respected and bestknown Indian outsourcing company. When he handed over the reins to Nilekani, Infosys was a solid company with 10,738 employees, $545 mn in revenues and net profit margins of 30%. Despite the rough start Nilekani steadied the ship and oversaw the biggest reorganisation at Infosys.
During his tenure, Infosys diversified into new business lines such as consulting and BPO, opened a subsidiary in China and reorganised itself into independent business units to become more market responsive. Nilekani also played an important role in increasing Infosys' visibility around the world, attending forums like the WEF at Davos and lending his thoughts to Thomas Friedman who turned his phrase, "The World is Flat" into a global best-seller by the same name. By the time he stepped down from the CEO's role, Infosys was a $3 bn company, with 72,241 employees and a CAGR of 41% in his tenure.
RBI targets inflation below 3%
KOLKATA: Reserve Bank of India has fixed a target to keep inflation below 3% in the medium term to make the economy ready for full capital account convertibility, its deputy governor Rakesh Mohan said on Thursday.
RBI governor YV Reddy said it may not be guided fully by Fed rate cut and checking inflation would be a greater priority. "Fed rate cut is a relevant factor, but will not necessarily determine RBI's monetary policy," he said.
Currently, inflation measured by the wholesale price index stands below 5%. However, inflation as per consumer price index ranges from 5.5% to 6.7%.
Mohan said maintaining stability in the system is important. "We never experienced bank failures during the Asian meltdown in late 1990s or now, during the subprime crisis in US, because of prudent monetary policy. This is of prime importance for us," Mohan added.
RBI governor YV Reddy said it may not be guided fully by Fed rate cut and checking inflation would be a greater priority. "Fed rate cut is a relevant factor, but will not necessarily determine RBI's monetary policy," he said.
Currently, inflation measured by the wholesale price index stands below 5%. However, inflation as per consumer price index ranges from 5.5% to 6.7%.
Mohan said maintaining stability in the system is important. "We never experienced bank failures during the Asian meltdown in late 1990s or now, during the subprime crisis in US, because of prudent monetary policy. This is of prime importance for us," Mohan added.
HOT STOCKS for 14-12-07
STATISTICS :
Yesterday due to global pressure Nifty had a hge profit booking and since market was in highs one could notice profit booking in stocks which had a runup in recent days. Nifty is strong above 6105 levels only if Nifty trades above these levels one can see new highs in the market and wait for another rally. Nifty has a support @ 6004 levels, as long as nifty stays above this level one can expect a strong uptrend in market. Market will be stock specific so trade cautiously with below mentioned stocks with a strict stop loss.
Today market will have some range bound session. watchout sectors like capital goods.
INTRADAY :
IFCI : buy for a tgt of 120+, sl @ 108.5
EDELWEISS : buy for a tgt of 1500+, sl @ 1425
DELIVERY :
IDEA : buy for a tgt of 180+ :: Time frame is for 1 - 2 months
EDELWEISS : buy for a tgt of 1700+ : time frame is 10 days
FUTURES :
SATYAM : buy for a tgt of 430+, sl @ 419
IDFC : buy for a tgt of 230+ , sl @ 220
BHARTHI : sell @ above 900 for a tgt of 875 , sl @ 908
INFOSYS : buy for a tgt of 1680, sl @ 1648
NIFTY : buy below 6045 for a tgt of 6100+, sl @ 6030
BHEL : buy for a tgt of 2650+, sl @ 2560
OPTIONS :
INFOSYS : buy 1620 call below 60 for a tgt of 80+, sl @ 54
SATYAM : buy call 430 for a tgt of 16+, sl @ 8
EDELWEISS : buy call 1500 for a tgt of 70+
Yesterday due to global pressure Nifty had a hge profit booking and since market was in highs one could notice profit booking in stocks which had a runup in recent days. Nifty is strong above 6105 levels only if Nifty trades above these levels one can see new highs in the market and wait for another rally. Nifty has a support @ 6004 levels, as long as nifty stays above this level one can expect a strong uptrend in market. Market will be stock specific so trade cautiously with below mentioned stocks with a strict stop loss.
Today market will have some range bound session. watchout sectors like capital goods.
INTRADAY :
IFCI : buy for a tgt of 120+, sl @ 108.5
EDELWEISS : buy for a tgt of 1500+, sl @ 1425
DELIVERY :
IDEA : buy for a tgt of 180+ :: Time frame is for 1 - 2 months
EDELWEISS : buy for a tgt of 1700+ : time frame is 10 days
FUTURES :
SATYAM : buy for a tgt of 430+, sl @ 419
IDFC : buy for a tgt of 230+ , sl @ 220
BHARTHI : sell @ above 900 for a tgt of 875 , sl @ 908
INFOSYS : buy for a tgt of 1680, sl @ 1648
NIFTY : buy below 6045 for a tgt of 6100+, sl @ 6030
BHEL : buy for a tgt of 2650+, sl @ 2560
OPTIONS :
INFOSYS : buy 1620 call below 60 for a tgt of 80+, sl @ 54
SATYAM : buy call 430 for a tgt of 16+, sl @ 8
EDELWEISS : buy call 1500 for a tgt of 70+
Securities in ban period for trade date December 14, 2007- F&O segment
| The derivative contracts in the below mentioned securities have crossed 95% of the market-wide position limit and are currently in the ban period. It is hereby informed that all clients/ members shall trade in the derivative contracts of said securities only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004. | |||||||||||||||||||||||||||||||||||||
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Thursday, 13 December 2007
OIL may file IPO papers with Sebi this month
Oil India (OIL) may submit this month the draft red-herring prospectus (DRHP) to SEBI for its proposed Rs 1,400 crore IPO. The company is expecting the issue to open in February if approved by the capital market regulator. OIL had earlier planned to submit the DRHP by mid-November.
According to industry sources, the public sector integrated oil company is now in the final stages of preparing the DRHP.
Independent directors
The process of appointing seven independent directors to conform with Clause 49 of the listing agreement is also on and is expected to be over before the issue hits the market. The search committee under the Public Enterprises Selection Board (PESB) began the process of selecting the suitable candidates in October.
As approved by the Cabinet Committee of Economic Affairs, OIL would propose fresh issue of 10 per cent of the company’s paid-up capital through the IPO.
This apart, the company would also issue an additional one per cent capital to the employees. HSBC, Morgan Stanley and Citibank have been appointed as lead managers to the proposed IPO.
Divestment proposals
The DRHP will also mention proposed disinvestment of 10 per cent of OIL’s paid-up capital by the Government in favour of three downstream PSU oil companies, namely, Indian Oil, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL).
The disinvestment will take place at the share price to be discovered through the IPO.
Post-disinvestment, IOC will pick up five per cent stake in OIL. BPCL and HPCL will get 2.5 per cent stake each.
The issue proceeds are slated to be used in the OIL’s upstream ventures in India and abroad,
Indian shares close lower as investors lock in recent gains
MUMBAI, Dec. 13, 2007 (Thomson Financial delivered by Newstex) -- Indian shares closed sharply lower Thursday, in line with Asian markets, as investors took profits after two days of record finishes.
The markets opened higher on optimism of the US Federal Reserve's 25-basis-point rate cut raising the foreign fund buying of Indian shares, but sentiment turned negative mid session.
'Whenever the markets hit a new high, profit taking sets in. Also, we tend to replicate the Asian markets. So with them trading lower, the nervousness spilled on to India as well,' said Gaurang Shah of Geojit Financial Services.
'December is usually a month when foreign funds lock in their profits. As we move on to the new year, they will return to the market. Besides, don't forget the Fed has left open the possibility of another rate cut in January; if it goes for it, liquidity will be further boosted,' Shah added.
The Bombay (OOTC:BBAO) Stock Exchange's benchmark Sensex closed 271.48 points or 1.33 pct lower at 20104.39, while the National Stock Exchange's S&P CNX Nifty lost 1.64 pct to close at 6058.10 points.
However, stocks of companies with lower market capitalisation continued to advance. The BSE's midcap index closed 36.45 points or 0.39 pct higher at 9375.94, while the smallcap index surged 122.34 points or 1.03 pct to close at 12007.33.
Diversified conglomerate ITC Ltd led the Sensex gainers. The stock, called an 'underperformer for long' by a dealer, closed 4.12 pct up at 196.90 rupees on value buying.
Tata Steel (OOTC:TAELF) extended its gains to close almost 3 pct higher at 889.40 rupees, a day after reports said it will invest up to 2 bln usd to build an iron ore mine in Ivory Coast.
GSM player Bharti Airtel was the biggest blue-chip loser, down 6.24 pct at 987.80 rupees as investors took profits from the scrip's recent good runs.
ICICI Bank (NYSE:IBN) also declined on profit taking, closing 3.7 pct lower at 1242.50 rupees. Media reports quoted its chief KV Kamath saying it is too early to comment whether ICICI Bank will review its rates after the recent Fed rate cut.
The markets opened higher on optimism of the US Federal Reserve's 25-basis-point rate cut raising the foreign fund buying of Indian shares, but sentiment turned negative mid session.
'Whenever the markets hit a new high, profit taking sets in. Also, we tend to replicate the Asian markets. So with them trading lower, the nervousness spilled on to India as well,' said Gaurang Shah of Geojit Financial Services.
'December is usually a month when foreign funds lock in their profits. As we move on to the new year, they will return to the market. Besides, don't forget the Fed has left open the possibility of another rate cut in January; if it goes for it, liquidity will be further boosted,' Shah added.
The Bombay (OOTC:BBAO) Stock Exchange's benchmark Sensex closed 271.48 points or 1.33 pct lower at 20104.39, while the National Stock Exchange's S&P CNX Nifty lost 1.64 pct to close at 6058.10 points.
However, stocks of companies with lower market capitalisation continued to advance. The BSE's midcap index closed 36.45 points or 0.39 pct higher at 9375.94, while the smallcap index surged 122.34 points or 1.03 pct to close at 12007.33.
Diversified conglomerate ITC Ltd led the Sensex gainers. The stock, called an 'underperformer for long' by a dealer, closed 4.12 pct up at 196.90 rupees on value buying.
Tata Steel (OOTC:TAELF) extended its gains to close almost 3 pct higher at 889.40 rupees, a day after reports said it will invest up to 2 bln usd to build an iron ore mine in Ivory Coast.
GSM player Bharti Airtel was the biggest blue-chip loser, down 6.24 pct at 987.80 rupees as investors took profits from the scrip's recent good runs.
ICICI Bank (NYSE:IBN) also declined on profit taking, closing 3.7 pct lower at 1242.50 rupees. Media reports quoted its chief KV Kamath saying it is too early to comment whether ICICI Bank will review its rates after the recent Fed rate cut.
Reliance plans $24 bn investment in petrochemicals
DUBAI: Reliance Industries, India's largest company by market value, plans to spend $24 billion over the next ten years in setting up petrochemicals projects in the Middle East, company Chairman and Managing Director Mukesh Ambani is reported to have said.
"We plan to set up a number of petrochemical plants in the next decade, with each costing $4-6 billion," the Dubai-based Gulf News quoted Ambani as saying.
Ambani had yesterday told a conference here that building five billion dollar petrochemicals plants in the Middle East will be the best way for Reliance, India's biggest producer of chemicals, to meet India's quadrupling demand of chemicals in the next 10 years.
Reliance wants to tap the growing demand for chemicals in Asia, especially in China and India.
"Dubai will be the gateway to our future investment in this part of the world and beyond," Gulf News quoted Ambani as saying. "We will increase our headcount in Dubai, which will be the nerve centre of our international operations."
Ambani, who had yesterday at the petrochemical conference said that Reliance would aggressively pursue acquisitions as part of a new strategy to grow, told Gulf News his company was not yet ready for big-ticket acquisitions.
"We will need to grow and invest in our own expansion for at least 10 more years, before entering into big-time acquisitions," he was quoted as saying.
"We plan to set up a number of petrochemical plants in the next decade, with each costing $4-6 billion," the Dubai-based Gulf News quoted Ambani as saying.
Ambani had yesterday told a conference here that building five billion dollar petrochemicals plants in the Middle East will be the best way for Reliance, India's biggest producer of chemicals, to meet India's quadrupling demand of chemicals in the next 10 years.
Reliance wants to tap the growing demand for chemicals in Asia, especially in China and India.
"Dubai will be the gateway to our future investment in this part of the world and beyond," Gulf News quoted Ambani as saying. "We will increase our headcount in Dubai, which will be the nerve centre of our international operations."
Ambani, who had yesterday at the petrochemical conference said that Reliance would aggressively pursue acquisitions as part of a new strategy to grow, told Gulf News his company was not yet ready for big-ticket acquisitions.
"We will need to grow and invest in our own expansion for at least 10 more years, before entering into big-time acquisitions," he was quoted as saying.
Buy Now Sell Tommorow Calls - BNST for friday 14-12-07
INTRADAY :
for today
EVERONN : buy for a tgt of 755+ , sl @ 715
BNST :
IFCI : buy now @ 108.75 for a tgt of 114+
UTV : buy for a tgt of 1040+
for today
EVERONN : buy for a tgt of 755+ , sl @ 715
BNST :
IFCI : buy now @ 108.75 for a tgt of 114+
UTV : buy for a tgt of 1040+
Indian firms get invite to list on HK bourse
| Hong Kong on Wednesday initiated a process to attract Indian companies to list on its stock exchange, saying ample liquidity in that market will help local companies raise resources. |
| A delegation led by Hong Kong financial secretary John C Tsang discussed with a dozen Indian companies, most of them big corporate houses, the possibility of listings on the Hong Kong Stock Exchange (HKSE). |
| Tsang and his officers also visited the Bombay Stock Exchange (BSE) to “understand and discuss” the matter with its CEO Rajinkant Patel and other senior executives. |
| The delegation is also looking to encourage the derivatives trading on Indian benchmark stock indices – Sensex and Nifty – on HKSE. |
| Speaking to the media, Tsang said at present, nearly 40 per cent of the stocks listed on HKSE were from the mainland China and that the number of foreign companies was very small. |
| An Exchange Traded Fund (ETF) on BSE’s Sensex is listed on HKSE but no Indian company has explored a Hong Kong listing as yet. There are over 40,000 Indians in Hong Kong. There are also 1,500 Indians’ promoted companies in the region. |
| “Hong Kong can be a good platform for Indian companies to tap the mainland,” he said. A dual-listing (India-listed companies going for listing on an overseas bourse) was also welcome, Tsang said. |
Securities in ban period for trade date December 13, 2007- F&O segment
Securities in ban period for trade date December 13, 2007- F&O segment
The derivative contracts in the underlying ESSAROIL, MRPL, GITANJALI, BINDALAGRO, NAGARFERT, PARSVNATH, IFCI, HOTELEELA, BONGAIREFN, ADLABSFILM, GMRINFRA, JPHYDRO & ARVINDMILL have crossed 95% of the market-wide position limit and are currently in the ban period.
It is hereby informed that all clients/ members shall trade in derivative contracts of ESSAROIL, MRPL, GITANJALI, BINDALAGRO, NAGARFERT, PARSVNATH, IFCI, HOTELEELA, BONGAIREFN, ADLABSFILM, GMRINFRA, JPHYDRO & ARVINDMILL only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004.
The derivative contracts in the underlying ESSAROIL, MRPL, GITANJALI, BINDALAGRO, NAGARFERT, PARSVNATH, IFCI, HOTELEELA, BONGAIREFN, ADLABSFILM, GMRINFRA, JPHYDRO & ARVINDMILL have crossed 95% of the market-wide position limit and are currently in the ban period.
It is hereby informed that all clients/ members shall trade in derivative contracts of ESSAROIL, MRPL, GITANJALI, BINDALAGRO, NAGARFERT, PARSVNATH, IFCI, HOTELEELA, BONGAIREFN, ADLABSFILM, GMRINFRA, JPHYDRO & ARVINDMILL only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004.
HOT STOCKS for 13-12-07
STATISTICS :
Nifty is now trading in highs. so nifty will be rangebound and volatile and stock specific action can be seen. Nifty has a support level @ 6095 and a resistance @ 6198, once nifty trades above these levels with high volumes can see new highs and nifty touching to 6240 levels. Below 6095 levels nifty will be very volatile can tend to 6020 levels.
DELIVERY :
Can hold these stocks for medium term
EDUCOMP : buy for a tgt of 4800+ :: tgt can be achieved by february
Nagarjuna Fertilizer : buy for a tgt of 140+ levels :: tgt is for 6 months time frame
MCLEODRUSSEL : buy for a tgt of 125+ levels now@ 78 :: 3 months time frame.
INTRADAY :
Tips for intraday will be updated during market hours
FUTURES :
SATYAM : buy below 428 levels for a tgt of 440+
WIPRO : sell above 508 for a tgt of 500 , sl @ 515
RPL : buy for a tgt of 235+, sl @ 226
HINDALCO : buy for a tgt of 213+, sl @ 204.5
BEL : buy for a tgt of 1880+, sl @ 1818
OPTIONS :
HINDALCO : buy call 205 for a tgt of 13+ , sl @ 6
Nifty is now trading in highs. so nifty will be rangebound and volatile and stock specific action can be seen. Nifty has a support level @ 6095 and a resistance @ 6198, once nifty trades above these levels with high volumes can see new highs and nifty touching to 6240 levels. Below 6095 levels nifty will be very volatile can tend to 6020 levels.
DELIVERY :
Can hold these stocks for medium term
EDUCOMP : buy for a tgt of 4800+ :: tgt can be achieved by february
Nagarjuna Fertilizer : buy for a tgt of 140+ levels :: tgt is for 6 months time frame
MCLEODRUSSEL : buy for a tgt of 125+ levels now@ 78 :: 3 months time frame.
INTRADAY :
Tips for intraday will be updated during market hours
FUTURES :
SATYAM : buy below 428 levels for a tgt of 440+
WIPRO : sell above 508 for a tgt of 500 , sl @ 515
RPL : buy for a tgt of 235+, sl @ 226
HINDALCO : buy for a tgt of 213+, sl @ 204.5
BEL : buy for a tgt of 1880+, sl @ 1818
OPTIONS :
HINDALCO : buy call 205 for a tgt of 13+ , sl @ 6
Wednesday, 12 December 2007
Heard on the street
Taking the law at the face value
It’s the classic case of a law being honoured in letter, but not in spirit. Manaksia, a metal products company, is coming out with a public issue, constituting 22.29% of the post-issue capital of the company with a price band of Rs 140-160 per share. No issues with that, but dig a little deeper and one finds the face value of the share is Rs 2. Indian Securities Law states that any IPO where the face value of a share is less than Rs 10, then shares should be priced at above Rs 500. Now the merchant banker to the issue, ICICI Securities says since the company is already listed on the Calcutta Stock Exchange, this is not exactly an “initial public offer,” and hence the rules of face value do not apply. But the issue has been marketed just like an IPO and the investors who are buying shares (that will be listed on BSE and NSE) are treating the issue like one. Manaksia plans to raise Rs 250 crore at the upper-end of the price band. Issue is on from December 17 to 19.
Investors in Apollo Tyres see road to growth
Shares of Apollo Tyres have risen 25% in a week amid speculation the company may raise tyre prices soon. However, an analyst tracking the company said the price hike is unlikely to be significant, as the industry has already raised prices by 15-20% so far this year. The analyst believes the recent run-up in its share price to Rs 52.3 factors in expectations of a much higher price hike, than what is likely. Apollo Tyres enjoys the market leader’s position in the truck and bus tyre segment. Analysts estimate the company’s earnings per share in 2007-08 at Rs 3.1, as against Rs 2.5 in 2006-07. In 2008-09, it is estimated at Rs 4.1.
Sugar stocks spring a sweet surprise
Until some weeks ago, sugar stocks were not so sweet an investment. The counters were under pressure on fears that the sector is likely to witness a situation of plenty for the next two seasons. However, the perception has seen a turnaround over the past one week on expectations that the central government is to announce subsidies/exemptions to the ailing sector. According to market sources, domestic funds houses and a handful of operators have been shoring up on sugar stocks in large numbers. This is evident in the surge in stock prices of key sugar companies like Bannari Amman Sugar (up 6% over the past one week to close at Rs 890), Dwarikesh Sugar (up 28% over the past one week to close at Rs 75), Simbhaoli Sugar (up 21% over the past one week to close at Rs 49) and Shree Renuka Sugars (up 21% over the past one week to close at Rs 841).
(Contributed by Gaurav Pai, Nishanth Vasudevan & Shailesh Menon)
It’s the classic case of a law being honoured in letter, but not in spirit. Manaksia, a metal products company, is coming out with a public issue, constituting 22.29% of the post-issue capital of the company with a price band of Rs 140-160 per share. No issues with that, but dig a little deeper and one finds the face value of the share is Rs 2. Indian Securities Law states that any IPO where the face value of a share is less than Rs 10, then shares should be priced at above Rs 500. Now the merchant banker to the issue, ICICI Securities says since the company is already listed on the Calcutta Stock Exchange, this is not exactly an “initial public offer,” and hence the rules of face value do not apply. But the issue has been marketed just like an IPO and the investors who are buying shares (that will be listed on BSE and NSE) are treating the issue like one. Manaksia plans to raise Rs 250 crore at the upper-end of the price band. Issue is on from December 17 to 19.
Investors in Apollo Tyres see road to growth
Shares of Apollo Tyres have risen 25% in a week amid speculation the company may raise tyre prices soon. However, an analyst tracking the company said the price hike is unlikely to be significant, as the industry has already raised prices by 15-20% so far this year. The analyst believes the recent run-up in its share price to Rs 52.3 factors in expectations of a much higher price hike, than what is likely. Apollo Tyres enjoys the market leader’s position in the truck and bus tyre segment. Analysts estimate the company’s earnings per share in 2007-08 at Rs 3.1, as against Rs 2.5 in 2006-07. In 2008-09, it is estimated at Rs 4.1.
Sugar stocks spring a sweet surprise
Until some weeks ago, sugar stocks were not so sweet an investment. The counters were under pressure on fears that the sector is likely to witness a situation of plenty for the next two seasons. However, the perception has seen a turnaround over the past one week on expectations that the central government is to announce subsidies/exemptions to the ailing sector. According to market sources, domestic funds houses and a handful of operators have been shoring up on sugar stocks in large numbers. This is evident in the surge in stock prices of key sugar companies like Bannari Amman Sugar (up 6% over the past one week to close at Rs 890), Dwarikesh Sugar (up 28% over the past one week to close at Rs 75), Simbhaoli Sugar (up 21% over the past one week to close at Rs 49) and Shree Renuka Sugars (up 21% over the past one week to close at Rs 841).
(Contributed by Gaurav Pai, Nishanth Vasudevan & Shailesh Menon)
SBI cuts deposit rates again
| Peak rates slashed by 25 basis points to 8.5 per cent. |
| State Bank of India (SBI) has cut the peak term deposit rate by 25 basis points (bps) to 8.5 per cent for the second time in just over a month. |
| It has also slashed rates on short-term deposits of less than a year by an identical margin to improve asset-liability management and reduce the cost of funds. The new rates are effective from December 12. |
| SBI would now offer 8.5 per cent on 550-day deposits against 8.75 per cent earlier. The peak deposit rate is down from 9.50 per cent about nine months ago. |
| The interest rate for 15-45 days’ deposits is 4.75 per cent against 5 per cent earlier, for 46-270 days 5.25 per cent against 5.5 per cent earlier and for 271 days to less than a year 6.5 per cent, down from 6.75 per cent. |
| However, the country’s largest bank commercial bank raised the rate for deposits in the 1 year to 549 days category to 8.25 per cent from 8 per cent. |
| It has kept the rate for 2 years to less than 3 years at 8.25 per cent. The rate for long-term deposits (3-10 years) has been maintained at 8.5 per cent. |
| A senior SBI official said, “The bank wants to calibrate (increase) the average tenure of deposits and this is reflected in the rate revision. The asset side duration, say for home and auto loans, is long, but the liabilities ( resources) show a relatively short maturity.” |
| The cost of deposits has increased to 5.48 per cent from 4.51 per cent due to higher term deposits mobilisation and higher interest rates. The share of low-cost depoists (current account and savings accounts) fell to 39.45 per cent by the end of September 2007 due to focus on raising resources through term deposits by offering attractive rates. |
| The bank’s deposits grew by 23.31 per cent to Rs 4,84,114 crore at the end of September 2007 from Rs 3,92,615 crore a year ago. |
| The present conditions in the financial market signal that rates have peaked out. Thus reducing the rate for deposits should help cut the cost of funds. The effects will only be seen after 3-6 months. |
| The benefit is to improve and protect the net interest margin, which stood at 2.84 per cent after deducting amortisation premium by end-September 2007. |
| “Eventually, we would like to revise (reduce) lending rates also,” he added. |
VSNL's WiMAX broadband services by Jan
NEW DELHI: Videsh Sanchar Nigam Ltd (VSNL), a Tata Group company, plans to launch wireless broadband service on the WiMAX platform by January. The company is also mulling a new brand identity, similar to that of Tata Indicom for its WiMAX services. VSNL presently provides broadband services on the Tata Indicom platform only.
“VSNL’s corporate identity would change to Tata Communications from next year, but for retail business we want to have a different brand name,” VSNL senior vice-president Srinivasa Addepalli told ET. He, however, said that there is a possibility that the company may initially ride on the back of Tata Indicom to launch its WiMAX broadband services.
“In the next 2-3 weeks, we will take a decision on the matter,” Mr Addepalli said.
WiMAX is a telecom technology that enables high data output. The technology would be very helpful in extending the broadband penetration across the country, especially in the rural areas. The government is already in the process of allocating 700 MHz spectrum for WiMAX users.
VSNL estimates an investment of about $500-600 million for rolling out WiMAX services in 35 cities across the country over the next three years. It would launch the service in Bangalore and then cover other major cities like Delhi, Mumbai and Hyderabad in the first phase. In the second phase, the company plans to reach to customers in about 35 cities across the country — mainly consisting of all the state capitals.
While the company is planning to have a full-fledged presence in 35 cities only, it has also started working towards spreading its wings to about 125 towns. In rest of the centres the services would be available only for corporate clients. VSNL plans to establish 1700 sale centres for its broadband operations. VSNL would be the first company to launch broadband services on the WiMAX platform for retail consumers in India.
Earlier the company was offering the service to only corporate consumers but the potential in the retail market has attracted the company towards launching it on a mass scale. The Tata Group company has tied up with Telsima of US to procure equipment for the WiMAX service. For spreading its services in the tier-II centres, the company will use Tata Teleservices towers.
It is also looking for short-term lease of BSNL towers in areas where Tata Tele towers may not be available. The company has put a target of 7-9 million subscribers or 25-30% of the total broadband market by 2012.
“VSNL’s corporate identity would change to Tata Communications from next year, but for retail business we want to have a different brand name,” VSNL senior vice-president Srinivasa Addepalli told ET. He, however, said that there is a possibility that the company may initially ride on the back of Tata Indicom to launch its WiMAX broadband services.
“In the next 2-3 weeks, we will take a decision on the matter,” Mr Addepalli said.
WiMAX is a telecom technology that enables high data output. The technology would be very helpful in extending the broadband penetration across the country, especially in the rural areas. The government is already in the process of allocating 700 MHz spectrum for WiMAX users.
VSNL estimates an investment of about $500-600 million for rolling out WiMAX services in 35 cities across the country over the next three years. It would launch the service in Bangalore and then cover other major cities like Delhi, Mumbai and Hyderabad in the first phase. In the second phase, the company plans to reach to customers in about 35 cities across the country — mainly consisting of all the state capitals.
While the company is planning to have a full-fledged presence in 35 cities only, it has also started working towards spreading its wings to about 125 towns. In rest of the centres the services would be available only for corporate clients. VSNL plans to establish 1700 sale centres for its broadband operations. VSNL would be the first company to launch broadband services on the WiMAX platform for retail consumers in India.
Earlier the company was offering the service to only corporate consumers but the potential in the retail market has attracted the company towards launching it on a mass scale. The Tata Group company has tied up with Telsima of US to procure equipment for the WiMAX service. For spreading its services in the tier-II centres, the company will use Tata Teleservices towers.
It is also looking for short-term lease of BSNL towers in areas where Tata Tele towers may not be available. The company has put a target of 7-9 million subscribers or 25-30% of the total broadband market by 2012.
HOT STOCKS for 12-12-07
STATISTICS :
Nifty may open lower due to yesterdays selloff from US, can see Nifty opening @ 6040 and can recover a bit in the second session, Market will be volatile with nifty having support @ 6005, and resistance level@ 6095.
INTRADAY :
CAIRN : buy for a tgt of 222+, sl @ 206
IDEA : buy for a tgt of 138+, sl @ 128
FUTURES :
IDEA : buy for a tgt of 139+, sl @ 129*
CAIRN : buy for a tgt of 223+ , sl @ 207
WIPRO : sell for a tgt of 496, sl @ 510
SATYAM : sell for a tgt of 336, sl @ 447
RPL : buy below 224 for a tgt of 232+ , sl @ 220
OPTIONS :
Nifty : buy put 6000 for a tgt of 150+, sl @ 105
INFOSYS : buy call 1650 below 90 for a tgt of 125+ , sl @ 75
POWERGRID : buy call 150 below 7 for a tgt of 10+ , sl @ 5
Nifty may open lower due to yesterdays selloff from US, can see Nifty opening @ 6040 and can recover a bit in the second session, Market will be volatile with nifty having support @ 6005, and resistance level@ 6095.
INTRADAY :
CAIRN : buy for a tgt of 222+, sl @ 206
IDEA : buy for a tgt of 138+, sl @ 128
FUTURES :
IDEA : buy for a tgt of 139+, sl @ 129*
CAIRN : buy for a tgt of 223+ , sl @ 207
WIPRO : sell for a tgt of 496, sl @ 510
SATYAM : sell for a tgt of 336, sl @ 447
RPL : buy below 224 for a tgt of 232+ , sl @ 220
OPTIONS :
Nifty : buy put 6000 for a tgt of 150+, sl @ 105
INFOSYS : buy call 1650 below 90 for a tgt of 125+ , sl @ 75
POWERGRID : buy call 150 below 7 for a tgt of 10+ , sl @ 5
Wall Street falls on Fed rate cut
FACED with growing warnings of recession, the US Federal Reserve cut interest rates last night by a quarter percentage point to 4.25 per cent.
The cut in the federal funds rate is the third in the past three months by the world's most powerful central bank. And Fed officials signalled that further cuts were possible if the downturn in housing and the crisis in mortgage lending were to get worse.
In addition to cutting the funds rate, chairman Ben Bernanke announced the Fed was reducing its discount rate, the interest it charges to make direct loans to banks, also by a quarter-point, to 4.75 per cent. This reduction was aimed at encouraging banks to borrow more freely from the Fed at a time when there are worries that a rising number of bad loans will prompt banks to tighten credit conditions too severely, adding another strain on the already fragile economy.
Commercial banks were expected to match the latest reduction by trimming their prime lending rate - which would reduce the rate for millions of consumer and business loans to 7.25 per cent.
Shares on Wall Street fell on the news as many had been urging a half-point cut, citing growing pressure in wholesale money markets and a loss of earnings momentum. But recent figures showed more jobs were created in November than had been expected.
Rates have come down from 5.25 per cent in September, and further cuts are expected.
The Fed's decision came as the chief of government-sponsored mortgage provider Freddie Mac said it will lose an additional $5.5 billion (2.7 billion) to $7.5 billion (£3.7 billion) over the next few years as the housing crisis worsens and home-loan defaults rise.
Cairn India to join Nifty from tomorrow
MUMBAI: Oil exploration firm Cairn India is set to join the National Stock Exchange's benchmark index Nifty from tomorrow.
The company, which got listed on the bourses early this year, has witnessed about 35 per cent rise in its share price in the past 11 months, while its market capitalisation has surged to Rs 37,542.02 crore (about 9.5 billion dollars).
It also ranks as the fourth largest oil and gas company in India. The scrip today closed at Rs 211.10, down 0.68 per cent, at the BSE.
Interestingly, its parent firm Cairn Energy Plc, which is listed on the London Stock Exchange, is expected to be included in the benchmark index FTSE-100 based on today's closing at the exchange.
However, Cairn Energy Plc, which has been listed on the UK bourse for the past nine years, has a market cap less than its Indian subsidiary's, with around seven billion dollars (3,896 million pounds). The shares were trading at 25.43 pounds, up 1.48 per cent, at the LSE.
Cairn India joining the NSE depicts the growth of the Indian stock markets and the company's market cap soaring past that of its parent firm is a good enough example, a market analyst said.
Cairn India is replacing HPCL from the 50-share wide- based Nifty index from tomorrow, while Idea Cellular would be included in the index in place of MTNL.
The company, which got listed on the bourses early this year, has witnessed about 35 per cent rise in its share price in the past 11 months, while its market capitalisation has surged to Rs 37,542.02 crore (about 9.5 billion dollars).
It also ranks as the fourth largest oil and gas company in India. The scrip today closed at Rs 211.10, down 0.68 per cent, at the BSE.
Interestingly, its parent firm Cairn Energy Plc, which is listed on the London Stock Exchange, is expected to be included in the benchmark index FTSE-100 based on today's closing at the exchange.
However, Cairn Energy Plc, which has been listed on the UK bourse for the past nine years, has a market cap less than its Indian subsidiary's, with around seven billion dollars (3,896 million pounds). The shares were trading at 25.43 pounds, up 1.48 per cent, at the LSE.
Cairn India joining the NSE depicts the growth of the Indian stock markets and the company's market cap soaring past that of its parent firm is a good enough example, a market analyst said.
Cairn India is replacing HPCL from the 50-share wide- based Nifty index from tomorrow, while Idea Cellular would be included in the index in place of MTNL.
Tuesday, 11 December 2007
Reliance to explore oil, gas in Colombias
Mukesh Ambani-led Reliance Industries Ltd (RIL) has been awarded exploration contracts for two offshore hydrocarbon blocks in Colombia, the company said in a statement on Tuesday.
"RIL signed hydrocarbon production and exploitation contracts with Agencia Nacional de Hydrocarburos (ANH) of Colombia for two offshore blocks, Borojo North and Borojo South, on December 10 at Bogota, the capital of Colombia," the statement said.
These exploration blocks are located on the Pacific Ocean, west of Colombia in water depths reaching up to 1,500 metres, according to RIL's statement.
The signing of contracts follows inking of a technical evaluation agreement by the two sides in 2005.
The contract provides a six-year exploration period consisting of four phases of 18 months each, with a right to exit at the end of each phase, the statement noted.
"Over the six years, the company is expected to drill up to two wells in each block, besides conducting seismic, multi-beam and heat-flow surveys. That will require an investment of $50 million," RIL said.
"RIL signed hydrocarbon production and exploitation contracts with Agencia Nacional de Hydrocarburos (ANH) of Colombia for two offshore blocks, Borojo North and Borojo South, on December 10 at Bogota, the capital of Colombia," the statement said.
These exploration blocks are located on the Pacific Ocean, west of Colombia in water depths reaching up to 1,500 metres, according to RIL's statement.
The signing of contracts follows inking of a technical evaluation agreement by the two sides in 2005.
The contract provides a six-year exploration period consisting of four phases of 18 months each, with a right to exit at the end of each phase, the statement noted.
"Over the six years, the company is expected to drill up to two wells in each block, besides conducting seismic, multi-beam and heat-flow surveys. That will require an investment of $50 million," RIL said.
Monday, 10 December 2007
Reliance Power's Rs 8,000-cr IPO may be postponed
Reliance Power may be forced to push its initial public offering (IPO) to early next year, as the Securities and Exchange Board of India (SEBI) is still grappling with the fine print of the red herring prospectus.
Billed to become one of the biggest IPOs in recent times, the Reliance Power issue has evinced interest among investors in the power sector, even as it triggered apprehensions in some quarters on the pricing.
Sources in the group were emphatic that the Rs 8,000 crore issue will hit the primary markets, but it's the timing they are not sure of, as SEBI is going through the details with a fine-tooth comb.
"Even if we obtain all the approvals now, we'll avoid doing road shows in the fag end of December. It's a wrong time to approach foreign institutional investors, as their fund managers normally go on Christmas holidays during that time," a source said.
For the Reliance Power IPO to be a success, the response from foreign investors will be critical.
Reliance Power is owned a little over 50 per cent by Reliance Energy, with the balance by R-ADA group's investment firms.
A clue to the postponement of the issue came when Reliance Energy promoters decided to infuse about Rs 8,000 crore in the company, through a preferential issue to the promoters and major institutional shareholders.
The infusion, to be done through warrants within a span of two years, will see the balance sheet of Reliance Energy "increase substantially," a recent report by broking firm Tower Capital & Securities said.
As REL's net worth reaches Rs 20,000 crore, post the 2009 dilution, Tower Capital said the company can give Reliance Energy "appropriate cushion" to manage an order book of Rs 1,00,000 crore.
However, analysts say that the Rs 8,000 crore infusion will only facilitate its infrastructure businesses that include metro rail, road projects, townships etc.
All the power-generating businesses have been shuffled into Reliance Power.HOT STOCKS for 11-12-07
STATISTICS :
Nifty has a strong support @ 5925 levels, can see nifty strong with 6040 + levels, once it crosses this level with strong volumes can see nifty trading to 6150+ levels.
DELIVERY :
NIITTECH : buy @ 250 for a tgt of 300+ in a month
RPL : buy @ 226 for a tgt of 248+ in a month
INFOSYS : buy for a tgt of 2095+ in a month
FUTURES :
BHEL : buy for a tgt of 2705+ , sl @ 2650
TTML : buy for a tgt of 63+, sl @57.5
EDUCOMP : buy for a tgt of 4100+, sl @ 3960
RELIANCE : buy for a tgt of 2860+
OPTIONS :
SATYAM : buy call 440 below 20 for a tgt of 26+, sl @ 16
RCOM : buy call 740 for a tgt of 44+, sl @ 24
HINDALCO : buy call 200 for a tgt of 12+,sl @ 5
Nifty has a strong support @ 5925 levels, can see nifty strong with 6040 + levels, once it crosses this level with strong volumes can see nifty trading to 6150+ levels.
DELIVERY :
NIITTECH : buy @ 250 for a tgt of 300+ in a month
RPL : buy @ 226 for a tgt of 248+ in a month
INFOSYS : buy for a tgt of 2095+ in a month
FUTURES :
BHEL : buy for a tgt of 2705+ , sl @ 2650
TTML : buy for a tgt of 63+, sl @57.5
EDUCOMP : buy for a tgt of 4100+, sl @ 3960
RELIANCE : buy for a tgt of 2860+
OPTIONS :
SATYAM : buy call 440 below 20 for a tgt of 26+, sl @ 16
RCOM : buy call 740 for a tgt of 44+, sl @ 24
HINDALCO : buy call 200 for a tgt of 12+,sl @ 5
Buy Now Sell Tommorow Calls - BNST for Tuesday 11-12-07
DELIVERY :
INDIABULLS FINANCIALS : buy now @ 840 for a tgt of 862+ , sl @ 832
RELIANCE : buy now @ 2823 for a tgt of 2850+ sl @ 2815
RPL : buy now @ 226 for a tgt of 232, can go to 240+ levels in a week
FUTURES :
RELIANCE : buy for a tgt of 2860+ levels, sl @ 2818
BHEL : buy @ below 2690 for a tgt of 2760+ , sl @ 2655
ZEEL : buy for a tgt of 304+ , sl @ 290
Nifty : buy now @ 5960 for a tgt of 6025+ , sl @ 5934
OPTIONS :
INFOSYS : buy call 1680 below 88 for a tgt of 115+ , sl @ 75
INDIABULLS FINANCIALS : buy now @ 840 for a tgt of 862+ , sl @ 832
RELIANCE : buy now @ 2823 for a tgt of 2850+ sl @ 2815
RPL : buy now @ 226 for a tgt of 232, can go to 240+ levels in a week
FUTURES :
RELIANCE : buy for a tgt of 2860+ levels, sl @ 2818
BHEL : buy @ below 2690 for a tgt of 2760+ , sl @ 2655
ZEEL : buy for a tgt of 304+ , sl @ 290
Nifty : buy now @ 5960 for a tgt of 6025+ , sl @ 5934
OPTIONS :
INFOSYS : buy call 1680 below 88 for a tgt of 115+ , sl @ 75
Sunday, 9 December 2007
Pre-IPO premiums zoom as punters play hard
MUMBAI: The Chinese stock market boom has driven cab drivers and gardeners in China to quit their regular jobs to turn into full-time punters. If the boom in the Indian IPO market sustains its current momentum, chances are more and more people would park their savings and divert cash from business to make quick money on listing.
Already, many small- and mid-sized companies are delaying payments to their suppliers to play the market. And, well before the IPO subscription forms are available, the game starts in the grey market, which has its own rules, pricing justification and trading structure.
IPO premiums in the grey market have been soaring as the market seems to believe that any banking or loan market crisis in the US can only lead to more money flowing into India, as rate cuts to bail out institutions will improve liquidity. What is also pushing up the premium is the record subscription numbers of recent offerings.
“IPO market is mainly buzzing because of the bullish sentiment in the secondary market,” says a Mumbai-based broker who tracks the IPO grey market on a daily basis. However, he also cautions that in cases where the issue has opened for subscription, a clutch of operators often put high bids to influence the grey market price.
Cities like Kolkata, Ahmedabad and Rajkot have the most active grey markets. This is an unofficial market where trading of shares in forthcoming IPOs is conducted. A premium or discount is the market’s estimate of how much the stock of a company is likely to soar (or dip) when they are traded on the day of listing.
For instance, Edelweiss Capital is currently trading at a premium of Rs 800 in the grey market, signalling that market participants expect the issue to list at a price upwards of Rs 1,600 (The price band for the issue is Rs 725-825).
Since Sebi does not allow shares to be transferred before the day of listing, trades done in the grey market are only settled on the day of listing. In fact, the grey market has become so vibrant that a few brokers in the above cities have taken to exclusively dealing in the grey market. These brokers, often work hand-in-hand with promoters and in the process also control the prices at which issues list.
A small dip in the interest rate has also helped. Earlier most banks had reached their limits of lending for investing in IPOs. With interest rates coming down, there are more takers for IPO financing. NBFC arms of several broking houses have also taken up lending in a big way, prompting investors to flock towards IPOs.
Already, many small- and mid-sized companies are delaying payments to their suppliers to play the market. And, well before the IPO subscription forms are available, the game starts in the grey market, which has its own rules, pricing justification and trading structure.
IPO premiums in the grey market have been soaring as the market seems to believe that any banking or loan market crisis in the US can only lead to more money flowing into India, as rate cuts to bail out institutions will improve liquidity. What is also pushing up the premium is the record subscription numbers of recent offerings.
“IPO market is mainly buzzing because of the bullish sentiment in the secondary market,” says a Mumbai-based broker who tracks the IPO grey market on a daily basis. However, he also cautions that in cases where the issue has opened for subscription, a clutch of operators often put high bids to influence the grey market price.
Cities like Kolkata, Ahmedabad and Rajkot have the most active grey markets. This is an unofficial market where trading of shares in forthcoming IPOs is conducted. A premium or discount is the market’s estimate of how much the stock of a company is likely to soar (or dip) when they are traded on the day of listing.
For instance, Edelweiss Capital is currently trading at a premium of Rs 800 in the grey market, signalling that market participants expect the issue to list at a price upwards of Rs 1,600 (The price band for the issue is Rs 725-825).
Since Sebi does not allow shares to be transferred before the day of listing, trades done in the grey market are only settled on the day of listing. In fact, the grey market has become so vibrant that a few brokers in the above cities have taken to exclusively dealing in the grey market. These brokers, often work hand-in-hand with promoters and in the process also control the prices at which issues list.
A small dip in the interest rate has also helped. Earlier most banks had reached their limits of lending for investing in IPOs. With interest rates coming down, there are more takers for IPO financing. NBFC arms of several broking houses have also taken up lending in a big way, prompting investors to flock towards IPOs.
HOT STOCKS for 10-12-07
STATISTICS:
Nifty has a strong support @ 5950, can touch new highs this week due to fed meeting coming this week can have a positive impact in mkt, Nifty can move to levels 6150+, if once nifty trades firm above 6025 levels.
FUTURES :
IDEA : buy for a tgt of 141+ , sl @ 131
POWERGRID: buy for a tgt of 156. sl @ 148
RELIANCE : buy for a tgt of 2875+, sl @ 2832
ZEEL : buy for a tgt of 305+ , sl @ 294.5
INFOSYS : buy for a tgt of 1750+ , sl @ 1695
OPTIONS :
NIFTY : buy call 6000 for a tgt of 210+, sl @ 100
HINDALCO : buy call 200 for a tgt of 11+ , sl @ 5
RELIANCE : buy call 2900 for a tgt of 104+ , sl @ 75
INFOSYS : buy call 1680 for a tgt of 100+ , sl @ 55
Nifty has a strong support @ 5950, can touch new highs this week due to fed meeting coming this week can have a positive impact in mkt, Nifty can move to levels 6150+, if once nifty trades firm above 6025 levels.
FUTURES :
IDEA : buy for a tgt of 141+ , sl @ 131
POWERGRID: buy for a tgt of 156. sl @ 148
RELIANCE : buy for a tgt of 2875+, sl @ 2832
ZEEL : buy for a tgt of 305+ , sl @ 294.5
INFOSYS : buy for a tgt of 1750+ , sl @ 1695
OPTIONS :
NIFTY : buy call 6000 for a tgt of 210+, sl @ 100
HINDALCO : buy call 200 for a tgt of 11+ , sl @ 5
RELIANCE : buy call 2900 for a tgt of 104+ , sl @ 75
INFOSYS : buy call 1680 for a tgt of 100+ , sl @ 55
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