| CMP : Rs 810 March 31,2008 | |
| Tata Consultancy Services, a leading IT services, business solutions and outsourcing organization, today announced that it has signed a five-year, multi-million dollar contract to be the global engineering partner of ArvinMeritor, a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. As part of the agreement, TCS will support the localization and globalization efforts of ArvinMeritor's engineering capabilities including product development and support for specific product lines in the Asia Pacific region. TCS will set up a global engineering center in Pune, India that will provide a broad range of product engineering services to cater to the global needs of ArvinMeritor with a specific focus on the Asian market. ArvinMeritor, Inc. is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. Headquartered in Troy, Mich., ArvinMeritor employs approximately 18,000 people in 24 countries. |
Monday, March 31, 2008
TCS signs 5-yr multi-million dollar partnership deal with ArvinMeritor
Sunday, March 30, 2008
Best Long Term Buy Brokerage Recommendation for the month of April
Karvy Stock Broking has maintained a buy rating on Everest Kanto Cylinder with a target of Rs 440 in its March 27, 2008 research report."The total deal size of proposed acquisition of US based CP Industries stands at USD 64 million and the deal is expected to be closed by April 2008 subject to court and other regulatory approvals. CP Industries is the market leader with approx. 43% market share globally.CP Industries have one manufacturing facility which is based in US and a total workforce of 118 employees".
"At the CMP of Rs 282, the stock trades at 18.1x and 11.4x their FY09E and FY10E earnings respectively. We maintain our BUY rating on the stock with the price target of Rs 440" says Karvy's research report.
JP Asscociate an outperformer, tgt Rs 325 : P Lilladher
CMP : Rs240
Prabhudas Lilladher has maintained outperformer rating on Jaiprakash Associate with target price of Rs 325 implying upside potentail of 40% in its March 26, 2008 research report. "We believe that value unlocking potential with regards to JP Power Ventures awarding land to Jaypee Infratech and potential value from the Ganga-Ballia Expressway would act as triggers to Jaiprakash Associates. Hence we rate the stock an Outperformer with a SOTP target price of Rs325/share. Based on discounted equity cash flows, we have valued Jaypee Infratech at Rs232bn; however, given the long gestation nature of the project and being a little conservative we have assigned 30% discount to the NAV value," says Prabhudas Lilladher report.
Saturday, March 29, 2008
Market Investor - New Orkut Discussion forum
This is rajandran and Iam the owner of the group currently working in
Nokia Siemens Networks as a Telecom Engineer(Vodafone Team).
And I'm Striving to be a Technical Chart Analyst and my intrest are in stock market and computers and trying to integrate the both
Then came the Idea about starting www.marketcalls.org my personal blog site.
Later after seeing smsgupshup.com i started marketbits www.smsgupshup.com/groups/marketbits to share my knowledge with you people. And Now I starting Market Investor to share and gather market information with various Experts,Students,Investors and people those who simply mad on Share Markets
Suven Life Sciences : Medium Term Call Recommendation from Market Calls
| Buy : Suven Life Science CMP : 33 Target : 42 Upside : 30% Time Frame : 3 months  Chart View ( Click the picture to view enlarged ) Recent Positive News from Suven Life Sciences Suven Life Sciences secures Two Product Patents in all Russian countries (Eurasia Region) |
Suven Life Sciences Ltd on March 24, 2008 has announced that two product patents were granted in Eurasia (009193 and 009367) for two of their New Chemical Entities (NCEs) for the treatment of disorders associated with Neurodegenerative diseases and these Patents are valid until 2023. The patents are valid in all contracting countries like Armenia, Azerbaijan, Belarus, Kyrgyzstan, Kazakhstan, Moldova, Russia, Tajikistan and Turkmenistan.
These granted patents are exclusive intellectual property of Suven and are achieved through the exclusive internal discovery research efforts. Products out of these inventories which are in pre-clinical development may be out-licensed at the stage of clinical Phase-I or Phase-II stage.
We are very pleased by the issuance of these patents to Suven for our drug candidates that are being developed for CNS disorders which targets an $ 18 billion potential market opportunity globally says Venkat Jasti, CEO of Suven.
The granted claims of the patents include the class of selective 5-HT compounds discovered by Suven and are being developed as therapeutic agents and are useful in the treatment of cognitive impairment associated with neuro-degenarative disorders like Attention deficient hyperactivity, Alzheimer's, Parkinson, Schizophrenia and Huntington's.
Suven Life Science is a biopharmaceutical Company focused on discovering, developing and commercializing novel pharmaceutical products, which are first in class or best in class therapies through the use of GPCR targets. The Company has six internally-discovered therapeutic drug candidated currently in pre-clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntington's disease. Parkinson's disease and obesity in addition to developmental candidates in Alzheimer's disease and Schizophrenia.
| Suven Life Establishes Second CNS Drug Discovery Collaboration with Lilly |
| March 12, 2008 |
Suven Life Sciences Ltd, on March 12, 2008 has announced that the Company has signed a second agreement with Eli Lilly and company, a US based global pharmaceutical company to collaborate on the pre-clinical research of molecules in the therapeutic area of central nervous system disorders (CNS).
As per the collaboration agreement, Suven will be responsible for discovery activities related to the identification and selection of clinical candidates in the area of CNS, in close association with Lilly.
Under the terms of the collaboration agreement, Suven will receive research funding and as well as potential discovery and development milestone payments in the range of $ 19 million to $ 23 million per candidate and potential royalties on net sales of any products that may be successfully commercialized from the collaboration.
We are very pleased and excited that Lilly has continued collaborate with us in the CNS arena, thus showing the confidence in Suven's drug discovery capabilities. says Dr. Ramakrishna Nirogi, Vice President, Drug Discovery of Suven life Sciences.
We believe our collaborations with Lilly validate Suven's leadership position in CNS drug discovery says Venkat Jasti, CEO of Suven Life Sciences. This Collaboration leverages Suven's small molecule drug discovery expertise with Lilly'S expertise and leadership position in CNS, with the goal of creating innovative products for unmet medical needs.
FEDDERS LLOYD CORPORATION:-A great bet to own
Scripscan:FEDDERS LLOYD CORPORATION LTD
Cmp:51.50
Target:67
Duration:3-4 months
There are lot of rumuors that some big Hnis were forced to sell Fedders Lloyd for some margin call problem.The counter got badly hit as has fallen by over 75% from its highs.Now Fedders Lloyd Corporation is a pioneer in the Airconditioning and Refrigeration industry in India, with operations spanning over four decades. Unlike competitors, the company caters to niche market like railways, defence, telecom operators and various transport companies.The company has also forayed into housing construction projects in non metro cities.It is in the process of acquiring land in Gwalior and Jabalpur cities. It plans to develop 360 acres of land in these 2 cities, which will generate revenue of Rs 8.5 billion during the next three years.Fedders owns a prime plot of land in the Kalkaji area of New Delhi, where it intends to construct a commercial complex.Going by the valuations that a comparable property in the area received recently, the land could be valued in excess of Rs 2.6 billion post development.The value of the property alone, after development, is Rs 69per share.
Conclusion:-Its for sure lot of buying would take place in the counter and that could make it move very fast.At 46rs rs its not covering the land value only.We are getting the full business for free.Its summer season so airconditioners and refrigerators demand are bound to pick up.The company is trading at less than 4 PE its expected 09 earnings.Its one of the leaders in its segment, a pretty decent company backed by a good management.At these level,I feel it to be one of the safest buy.Go for it.
Regards,
ARUN
I can be reached at: arunanalyst@rediffmail.com
Deccan Gold Mine : Multibagger Recommendation from Marketcalls
Monday, March 24, 2008
Expert Advice on your mobile from MarketBits
Just enter your query and comments and get your advice on mobile from
marketbits.
To join MarketBits Expert calls just visit www.smsgupshup.com/groups/marketbits
Sunday, March 23, 2008
Buy Nifty 5000 29-May-2008 Call Option to Double your Money
Buy : Nifty 5000 29-May-2008 Call Option
CMP : Rs111 (Rs5550/Lot)
1 Lot : 50 units
Target Rs 240 (Rs 12,000/Lot)
Gain : Rs6450/Lot
Time Frame : 45 Days
Risk : Loss may be around 25-50% But gain may be around 75-100%
Positive Factor : Weak RSI Levels(Market is almost over sold so less downside seen)April month Q4 and Annual results may turn the market sentiment
Recommended : Only to Risky traders. Others Stay Back
To get my Free Short Term(7-15% returns), Medium Term(20-30%), Long term(40-100%) calls on your mobile Sign up at www.smsgupshup.com/groups/marketbits
If you have any queries or if you are new to options then write to rajandran@gmail.com to get your issue solved.
Regards,
Rajandran R
Saturday, March 22, 2008
Volatility in market in truncated week
The BSE Sensex lost 765.69 points or 4.85 percent to 14,994.83 in the week ended Wednesday. The S&P CNX Nifty slipped 171.85 points or 3.62 percent to 4573.95 in the week.
The BSE Mid-Cap index lost 619.35 points or 9.40 percent to 5,964.10 for the week. The BSE Small-Cap index slumped 857.30 points or 10.61 percent to 7,222.20 in the week.
Trading for the week began on a bearish note as global markets suffered setback with the benchmark index BSE Sensex posting its biggest ever single-day point fall Monday.
Sensex lost 951.03 points or 6.03 percent at 14,809.49 and the broader based S&P CNX Nifty tumbled 242.70 points or 5.11 percent at 4,503.10 on that day.
On Tuesday, the market registered small gains in highly choppy trade. The 30-share BSE Sensex rose 23.97 points or 0.16 percent at 14,833.46 and the broader based S&P CNX Nifty ended up 29.9 points or 0.66 percent at 4,533.
The market pared most of its early gains Wednesday, as selling pressure emerged at higher levels. The market registered modest gains on that day.
State Bank of India : Buy rating from IndiaBulls
Research: Indiabulls
Rating: Buy
Indiabulls upgrades its Rating on SBI from 'hold' to 'Buy' because the bank's aggregate business registered an increase of 25.9% y-o-y , led by increase in advances and deposits. SBI's net interest margin is high at 3.01%.
Further, its CASA ratio is 41.05% and is set to rise further as SBI plans to enhance its geographical spread over the next few years. The bank has been displaying a positive trend in non-interest income. From a negative growth rate last year, there has been a 35.2% y-o-y increase in SBI's other income for the first nine months of FY08.
Huge shareholder value may be unlocked following listing of SBI's non-banking businesses and merger with associate banks. The merger with State Bank of Saurashtra has already been approved by both entities. This is may pave the way for merger with other associate banks. Subsidiaries are valued at P/B multiples, the new business achieved profit (NBAP) multiple and percentage of AUM, depending on the business.
Jaiprakash Associates : Buy Recommmendation
Jaiprakash Associates
CMP: Rs 204
Target Price: Rs 325
Prabhudas Lilladher has maintained an 'outperformer' rating on Jaiprakash Associates while lowering the target price by 32% from Rs 430 to Rs 325. The lower target price is primarily due to the fall in the valuation of Jaypee Infratech. "On the side of conservatism, we now value Jaypee Infratech at 30% discount to its NAV due to the recent negative sentiment in the market. This at current levels of Rs 250 presents an upside of 30%," says the report. The brokerage also acknowledges the fact that the stock of Jaiprakash Associates' corrected 50% from its recent peak due to a weak market coupled with the confusion on its holding in Jaypee Infratech. The brokerage believes that value unlocking potential with regards to JP Power Ventures, awarding land to Jaypee Infratech and potential value from the Ganga-Balia Expressway would act as triggers to Jaiprakash Associates.
Marg Construction - Hold - View from Market Calls
Hi BADRI PRASAD,Marg Constuction is having support at 250. Defenitely Marg Construction is a hold. Below 250 one have to sell below 250. Below 250, 150 is possible no intermediate support is seen b/w 250 and 150.Now the stock is almost oversold.So better keep a stop loss at 240.
Regards,
Rajandran R
Thursday, March 20, 2008
ENGLISH INDIA CLAY : Strong Sell
I HAVE 10 ENGLISH INDIA CLAY @3200.AND CMP IS 1739.WHAT SHOULD I DO? HOLD OR SELL.MY COST WILL COME IN NEAR FUTURE? Hi Nitesh Guptha,Sorry to reply u late.
Your Stock English Inida Clay.. Technicals are weak. Charts show a strong selling signal. RSI level is at 72.19 just above the overbought level. Huge selling volumes on March 18th seen in the chart. In the short run your stock has support at 1130 and 937.....
As per My view the stock you holding is a speculation stock. It shows a uptrend only from oct,2007 what all the speculative stocks do from OCT 2007 onwards. It is hard to say that This stock may reach Rs400-500 range What the supports where in OCT 2007
My Advice is better you switch your stocks from English India Clay to Arvind Mills CMP is 38.
Regards,
Rajandran R
Tuesday, March 11, 2008
Zee News : Target from Sharekhan
| Zee News Cluster: Emerging Star Recommendation: Buy Price target: Rs73 Recco price: Rs54 Recco Date:Jan 29, 2008 Sharekhan Code:ZEENEWS Breaking news -- Buy Now | ||||||||||||||||||||||||
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Buy Unity Infraprojects : Target from Sharekhan
| Unity Infraprojects Cluster: Ugly Duckling Recommendation: Buy Price target: Rs970 Current market price:Rs613 Time Frame : 6-8months Riding on realty and infrastructure boom -- Buy Now | |||||||||||||||||||
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Thomas Cook : Good times ahead for shareholders
Scripscan:Thomas Cook (India) Ltd
Cmp:88
Target:105
Return expected:20%
Duration:2-3 months
Story:Thomas Cook Group plc has announced that it is acquiring up to 74.9% of the issued share capital in Thomas Cook India and 100% of Thomas Cook branded businesses in Egypt, as well as licences for the Thomas Cook brand in a total of 15 Middle East countries. Thomas Cook is purchasing the businesses from Dubai Financial Group LLC for total cash consideration of between €208 million and €249 million.Under the terms of the TCIL transaction, Thomas Cook has agreed through its UK subsidiary to acquire at least 61.8% and up to 74.9% of TCIL's share capital. In a private transaction with DFG Thomas Cook will acquire 54.9% of this for the equivalent of Rs 107 per TCIL share. Under local stock market rules Thomas Cook is tendering to acquire up to a further 20% of TCIL shares in an open offer at rs 107. As a result of this transaction Thomas Cook will acquire between 61.8% and 74.9% of TCIL's share capital, the price of with will range from €173 million to €214 million giving Thomas Cook control of the company.
Conclusion:In these sort of market environment where returns are very hard to get one can bank upon in thomas cook for some cool capital appreciation.Market is in a panic driven mood and there are strong chances that market even may overlook this news.Fundamentally too the scrip has got robust long term prospects.So enter at present levels for minimum downsides but possible 20%+ returns in the short term.
Regards,
ARUN
I can be reached at: arunanalyst@rediffmail.com
Everest Kanto Cylinder : Citi India Conference 2008
Citi India Conference 2008: Day 1 Takeaways
Conference takeaways — Everest Kanto spoke with investors at the Citi India
Investor Conference 2008. Here are some of the highlights of that presentation.
Robust industry outlook reiterated — Management stated that the growth outlook for CNG cylinders remains extremely robust, especially in the Middle
East and South East Asia. CNG vehicle population is expected to grow by
~800K vehicles/yr in Iran, ~250K/yr in Pakistan, and ~200K/yr (combined) in
other countries such as Thailand, Malaysia, Philippines, Indonesia, etc. The
Indian market also looks set for rapid growth with increased gas supplies from
recent discoveries resulting in ~46 cities under the CNG net over the next few
years (~10 currently). The Indian CNG vehicle population is estimated to
increase to ~1m by 2011 (~0.4m currently). In China, the number of CNG
stations is expected to increase to 1846 by 2010 from 260 currently,
contributing to rapid growth there.
Expansion plans on track — The China plant, with an initial capacity of 215K cyl/yr + a line for jumbo cylinders, is expected to go into commercial
production this month (trial production already commenced). The billet
piercing plant at Gandhidham (200K industrial cyl/yr) and the jumbo cylinder
plant at Gandhidham (5K cyl/yr) are expected to be commissioned by 3QFY09.
Construction work for the greenfield plant at Kandla SEZ (300K CNG cyl/yr) is
in progress and the plant is likely to be operational by 4QFY09.
manufacturing facilities of CP Industries (CPI), USA for a total of US$64m.
The deal is expected to be completed by Apr-08 subject to court and other
regulatory approvals. CPI manufactures large seamless vessels for the
transportation and storage of pressurized gases. The products are compliant
with various agencies and bodies such as ASME (American Society of
Mechanical Engineers), US Dept of Transportation, US govt., NASA,
Transport Canada, China govt., and ISO (recognized by all members of the
EU). Based on 2007 sales, CPI had a global market share of 43% in the
large vessel segment (total industry sales of c.US$93m).
…along with strong customer base, robust operating performance – CPI's key
customers include US and international companies such as Weldship,
Praxair, Chesterfield, BOC Air Products, Air Liquide, and JB Kelley, amongst
others. CPI has 118 employees, one manufacturing facility in US, and one
representative office in Beijing. In CY07, it had sales of US$41m (80% in
US) and EBITDA of US$9.3m (23% margin) at a (sub-optimal) capacity
utilization of 65-70%. Operating margins have increased from 15% to 23%
over the last few years driven by a better sales mix and product price hikes;
management stated that CPI has a dominant position in the industry,
enabling it to pass on input cost increases to their customers.
Everest Kanto Cylinder (EKC) is the largest domestic manufacturer of high
pressure gas cylinders used for the storage of industrial gases and CNG. While
the first manufacturing facility (at Aurangabad) was set up in collaboration with
Kanto Koatsu Yoki of Japan in 1978, subsequent facilities have been built
using in-house technology. The company currently has four manufacturing
plants -- in Aurangabad, Tarapur, Gandhidham, and Dubai -- that have a total
production capacity of 806,000 cylinders per year. An aggressive expansion
plan, including a greenfield plant in China, expansion of the Gandhidham
facility, and a new plant in an SEZ, would increase EKC's capacity to 2.3m
cylinders over the next 4-5 years.
Investment strategy
We rate the stock as Buy / Medium Risk (1M) with a target price of Rs437. We
believe EKC is uniquely positioned to capture the significant growth potential of
the market for high pressure gas cylinders, driven largely by increasing CNG
penetration both domestically and abroad. Increased production from new and
existing plants amidst the current tightness in the cylinder market would see
the company deliver EPS CAGR of 47% for FY07-10, on our estimates. While
the CNG segment in India is still at a relatively nascent stage, cost economics,
improving refueling infrastructure and visibility of gas supplies should mean an
accelerating trajectory for city gas distribution and consequently CNG
penetration, thereby boosting demand for CNG cylinders. Coupled with the
robust global outlook for natural gas-powered vehicles and a sanguine IPlinked
growth outlook for industrial cylinders, we expect EKC's production to
increase ~3x over FY07-10E.
Our 12-month target price for EKC of Rs 437 is based on 22x Sep09E earnings,
representing a discount to fair-value multiples of 23-30x for its manufacturing /
engineering peers in India. We base our target multiple on mid-FY09E earnings
because we believe it better captures the contribution from China, full
utilization of Dubai, and part contribution from the newly announced
expansions. We prefer comparing EKC with capital goods companies that
manufacture industrial goods that have a similar growth profile. However, given
the difference in the nature of the business and the higher order book visibility
of these companies, we believe EKC should trade at a discount to its peers.
EKC is also a leveraged play on the alternative energy/CNG theme and one of
the most leveraged plays to the expanding city gas distribution market in India.
Our target P/E is well supported by an EPS CAGR of 47% for FY07-10E.
Risks
We assign a Medium Risk rating to EKC shares, rather than the High Risk
rating as per our quantitative risk-rating system, given the strong visibility of
growth on increasing CNG penetration. Key downside risks to our target price
include: 1) Exposure to a single supplier – EKC's reliance on Tenaris for most
of its raw materiasl makes it vulnerable to the latter's pricing power. 2) China –
a hitherto unexplored market, with the risk that EKC's entry there could incur
teething troubles. 3) Competition – low physical barriers to entry have led to
some players entering the market in the recent past, which might adversely
impact EKC's pricing power. 4) Project risk – EKC is implementing significant
expansion plans that are subject to time and cost over-runs. 5) Crude prices –
significantly lower crude prices could adversely impact CNG's strong
economics and consequently slow CNG penetration.
Long Term Call : Grasim Industries : UBS Investment Research 070308
We identify 8 investible urbanisation themes
Our Q-Series®: Asian Structural Themes report published today highlights 8
themes: 1) Cities need to be built and skyscrapers need steel. 2) People need
homes. 3) The urban population needs power. 4) Where is the water? 5) An urban
society produces sewerage. 6) The new urban dweller maintains links with families
and friends. 7) Migrants will want microwaves. 8) Financial services are needed
when households have extra funds. We believe Grasim Industries is a key
beneficiary of themes 1 and 2.
More than 70% exposure to Indian construction materials
Grasim, together with its 54% subsidiary Ultratech Cement, is the second largest
cement manufacturing company in India. We expect current capacity of 32.5mt to
increase to 47mt by September 2008. As one of the largest cement manufacturers
in India, we think Grasim will be one of the key beneficiaries of strong cement
demand arising from urbanisation in India. Additionally, the company is also an
'early capacity adder'. As a consequence, we have selected Grasim as one of the 20
UBS Urbanisation Key Picks.
Medium-term & long-term growth drivers
As an 'early capacity adder', we expect Grasim to take advantage of high cement
prices on larger sales volume. Grasim and Ultratech are also adding almost
400MW captive power capacity over next two years, which would reduce the
company's dependence on costly grid power and increase operating efficiency.
Valuation
We value Grasim on a sum-of-the-parts valuation, assuming an FY09E
EV/EBITDA multiple of 6.5x for VSF; 8.7x for cement; 6.5x for sponge iron.
manufacturer of viscose staple fibre (VSF) and cement (31.5mt consolidated)
following the takeover of L&T's cement division. It also has interests in sponge
iron and textiles.
Statement of Risk
The principal risk to Grasim's earnings arises from fluctuations in the selling
prices of its various commodity businesses—particularly cement—which
contributes more than 50% to Grasim's consolidated EBITDA.
Monday, March 10, 2008
Buy Bharat Forge : Brokerage Report
Research:Edelweiss
Rating:Accumulate
Edelweiss has maintained its 'accumulate' rating on Bharat Forge (BFL) from a long-term perspective. The company is currently in a phase of de-risking its current line of business and expanding forging capabilities to new non-automotive sectors such as oil and gas, railways, aerospace and defence. BFL is optimistic about the domestic commercial vehicle (CV) market and expects the CV demand to grow almost 10% in FY09E.
It expects a revival in sales to the US CV market from Q3 FY09E onwards. BFL hopes to improve operating margins of its overseas subsidiaries by 100 bps to ~9% over the next year, with efforts like product and process rationalisation constantly underway at every plant. The company is targeting utilisation levels of ~50-60% by the first full year of production. BFL's margins are likely to start improving, given the commencement of its higher margin non-auto business, expected bounce-back in exports to the US and better sequential performance of its subsidiaries.
The company has also signed a memorandum of understanding (MoU) with National Thermal Power Corporation (NTPC) for investing in a new joint venture (JV) facility to manufacture components for power plants. It's a 51:49 JV where the timelines for investments and execution are yet to be decided. Production at this facility is likely to begin in ~18 months from the start of construction.
Buy Maharashtra seamless : Brokerage Report
Research:HSBC
Rating:Overweight
HSBC has upgraded its rating on Maharashtra Seamless to 'overweight' from 'neutral' and has maintained the target price of Rs 655. The management announced, during the conference call for its Q3 FY08 results on February 5, that it will spend Rs 1,500 crore in the next three years on building a plant for billets, the raw material for seamless pipes. This backward integration was delayed earlier.
But now, with the likely addition of promoter money of Rs 2,000 crore through fresh equity of 33 lakh shares at the rate of Rs 550-575 per share, the backward integration plant has started taking shape. However, HSBC has not factored the possible equity dilution into its numbers.
The key reason for the fall in the stock recently has been pressure on margins. The earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of electric resistance-welded (ERW) pipes declined to 1.3% in Q3 FY08, while that of seamless pipes was at 23.7%, taking the combined EBITDA margin to 18.2%. With seamless pipes contributing 90% of the current order backlog of Rs 5,000 crore, the margins should recover.
Some of the triggers for the stock are as follows: 1. Favourable anti-dumping duty investigation on Chinese seamless pipes in the US by mid-March '08, which will increase the possibility of similar duty in India; 2. Recovery of EBITDA margin in Q4 FY08; 3. More information on the billet plant, with respect to land, plant and machinery. The stock is currently trading at the lower end of its historical price to earnings (P/E) band.
Buy HDFC Bank : Brokerage Report
Research:Indiabulls financials
Rating: Buy
Indiabulls has upgraded its rating on HDFC Bank from 'hold' to 'buy' with a target price of Rs 1,715 for FY09. HDFC Bank has been a consistent performer, with its key parameters being one of the best in the industry. Its net interest margin at 4.3% and the current account and savings account (CASA) ratio at 50.9% are among the highest in the industry. Non-interest income, after witnessing a slowdown for some quarters, started to pick up and increased 81.9% YoY, against its earlier increases in the range of 25-35%. With the bank taking new initiatives such as investment banking, other income will continue to have a large share in the total income.
There has been a consistent rise in the size of the balance sheet at an average pace of around 40% in the past few quarters, with significant contributions being made by both advances and deposits, indicating broad-based growth. Further, the growth has been accompanied by an excellent asset quality, with the net non-performing assets (NPA) ratio being maintained at 0.4% since the past few quarters.
In the year so far, the bank has added 64 branches, and is planning to open more than 250 branches in the next few months. Indiabulls has valued HDFC Bank using the two-stage Gordon-growth model as it's likely to continue its high-growth journey for the next few years. Indiabulls has arrived at a target price-to-book value (P/BV) multiple of 4.8x by assuming a sustainable return on equity (RoE) of 19% on account of its high interest margins and increasing proportion of non-interest income.
Saturday, March 8, 2008
Short Term Nifty Support
To get free Daily nifty supports and Resistance on your mobile Visit www.smsgupshup.com/groups/marketbits
Constructing a Delta-neutral strategy
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| Constructing a Delta-neutral strategy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trading in derivative products is largely viewed as speculative, and why not? When most position are built around just the 'view' of the trader. However, if the trader's market outlook were faulty, the position would result in huge losses. A Delta-neutral strategy is a strategy by which you one make money without having to forecast the direction of the market. The delta of an option is the rate of change in an option's price relative to a one-unit change in the price of the underlying asset. So, for example, if a call option has a delta of 0.35 and the price increases by one Re, the option's price should increase by 35 paise. In the example above, the option has a delta of 0.35. Traders and brokers refer to that as "35 deltas." Simply multiply the delta by 100 to make it a percentage. However, make sure you understand that "35 deltas" really means 0.35. For the purpose of our discussion, whenever we mention the delta of an option, we are referring to the actual decimal value because that is what's actually used in all mathematical models. What exactly is Delta Neutral? The term "Delta Neutral" refers to any strategy where the sum of your deltas is equal to zero. So, for instance, if you buy 10 call options, each having a delta of 0.60 and you also buy 20 put options, each having a delta of -0.30 you have the following: ...(10 x 0.60) + (20 x -0.30) = 6.00 + -6.00 = 0 Your position delta (total delta) is zero, which means you are delta neutral. The technique you are about to learn, is just one application of delta neutral. It is a general trading approach that is used by some of the largest and most successful trading firms. It allows you to make money without having to forecast the direction of the market. You can use it on any market (stocks, futures, whatever), just as long as options are available and ... the market is moving. It doesn't matter whether or not the market is trending, but it won't work if the market is really flat. The principle behind delta neutral is based upon the way an option's delta changes as the option moves further into or out of the money. Consider the following example:
You will notice the following characteristics of an option's delta:
All of the deltas mentioned above assume that you are buying the options or the underlying asset, that is, you have a long position. If instead, you sold the options or the asset, establishing a short position, all of the deltas would be reversed. So, in the example above, if you sold a call option with a strike price of 100, and the price of the underlying asset was 110, the delta would be 0.9226 x -1 = -0.9226. If you short the underlying, the delta would be -1.0 instead of +1.0. Keeping all of this in mind, we can construct the following delta neutral trade:
How it works:If the futures increase from 110 up to 112: Profit = 2 x 2.00 = 4.00 The put options will decrease from 0.91 down to 0.28 (each) Loss on put options = 5 x (0.91 - 0.28) = 5 x 0.63 = 3.15 Net profit = 4.00 - 3.15 = 0.85 If the futures price decreases from 110 down to 108: Loss = 2 x 2.00 = 4.00 The put options will increase from 0.91 up to 2.14 (each) Profit on put options = 5 x (2.14 - 0.91) = 5 x 1.23 = 6.15 Net profit = 6.15 - 4.00 = 2.15We can summarize this delta neutral approach as follows:If you buy the underlying and buy put options so your position is delta neutral:
When you do this kind of delta neutral trading, you need to follow a few rules:
Keep an eye on the implied volatility of the options you're using. If it moves toward the high end of its 2-year range, stay away from this position for a while. Otherwise, you might have excessive time decay in your options when the implied volatility starts to drop. The options you buy should have at least 30-60 days remaining before expiration. Remember that time decay accelerates as the option's expiration date approaches, so if you allow more time, you minimize the time decay. As you have seen, these trade positions benefit by price movement in the underlying asset. It puts you in the enviable position of being able to take full advantage of big price moves, in any direction. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monday, March 3, 2008
Sun Outage and its Effect on Indian Stock Exchanges
A sun outage is an interruption in or distortion of geostationary satellite signals caused by interference from solar radiation. The effect is due to the sun's radiation overwhelming the satellite signal. Generally, sun outages occur in February, March, September and October, that is, around the time of the equinoxes. At these times, the apparent path of the sun across the sky takes it directly behind the line of sight between an earth station and a satellite. As the sun radiates strongly at the microwave frequencies used to communicate with satellites (C-band and Ku-band) the sun swamps the signal from the satellite. The effects of a sun outage can include partial degradation, that is, an increase in the error rate, or total destruction of the signal.
Effect on Indian Stock Exchanges
In India, the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) use VSATs (Very Small Aperture Terminal) for members to connect to their trading systems. VSATs depend upon satellites for connectivity between the terminals/systems. Hence these exchanges are affected due to the sun outage. These exchanges normally remain closed from 11:45 to 12:30 during 'sun outages', but times vary depending on the scientific factors. The interference in satellite signals disturbs smooth transmission of data of online transactions, hence these share markets remain closed for the duration of sun outages. Due to these outages, the trading sessions are normally extended in the same day to compensate for the lost time. In September 2006, however, only the NSE intended to shut down during the sun outage; the BSE did not. The reason for which is unknown.
There will be a change in the NSE and BSE market timings from March 04, 2008 to March 18, 2008 due to the sun outage.
Sunday, March 2, 2008
Arun"s say:-MR greedy and his reliance power,Rnrl,adlabs,reliance capital etc
Share price of Reliance Power has again gained ground to touch its IPO price. It has happened MAINLY and ONLY due to the liberal bonus issue which can never never be justified.Its a shell company has got nothing,no profits,no sales:god knows how they can simply declare a bonus....Previously i guess it never happened in the history of indian stock markets...If cat sits on chair of Tiger, it dont transform into a real Tiger....
If promoters and merchant bankers (globally renowned who perhaps started condering themselves to be Maa-Baap of Indian investors and also Demi-Gods) had any iota of decency and morality left in them (post infliction of never-before-seen levels of losses on investing public), they should have accepted their collective mistakes that they had done wrong-pricing. Instead,promoter roared back with demand to SEBI for enquiry into fall in R Power share price that "it has been engineered by rivals". Firstly, any shareholder of a company (whether he is an ordinary investor or a deemed rival) has a business right to buy anytime and sell anytime any quantity of shares of any listed entity. There is a saying that 'If you are scared of heat, dont enter the kitchen". If Mr Ambani is afraid of selling by rivals, then pl stop plans of further IPOs and should concentrate his energies in getting his companies delisted from stock exchanges(rather than suggesting long term value to investors). Secondly, he is crying wolf when share price of R Power has come down. What about brazen rise in share price of all his group companies and He never complained that rivals were trying to Buy shares of his companies to dethrone him/hostile take-over? Just have a look:
COMPANY S H A R E P R I C E I N 2007
Low High
Reliance Capital 560/ 2925/
Reliance Energy 448/ 2623/
Reliance Capital 560/ 2925/
Adlab 380/ 1940/
RNRL (Rs 5F.V.) 21/ 250/
Had proverbial Third Eye of Lord Shivji had opened which led to such unheard of rise in share prices? Definitely not. There has been hardly any improvement in financial performance of above companies. Rather, above scrips should have been underperformer. Clearly, it was a well organised gameplan to ramp share prices of each listed entity as Group had been planning to raise over 30,000 crs from public in 2008 alone.If share price of R Power had been ruling at 650, IPO of R Infratel would have hit the streets by now. However, 2nd time, God came to the rescue of pitiable state of investors. If Ant was trying to climb the mountain, it has fall sooner or later. SEBI, even if it is willing, may not be able to investigate in brazen manipulation of above companies' share prices as talks do rounds in the market that such manipulations are not possible without collusion of politicians and bureaucrats...
Regards,
Arun
I can be reached at:arunanalyst@rediffmail.com
Yen Alert - Will Market Crash Once Again : Discussion
sunshine
Will market crash?
Now yen appriciated from 108 to 103 it is not good to market sentiment if yen dips more.
Jan
