Monday, December 31, 2007

Broker calls

BUY ABB JAN FUTURES CMP 1530 Target 1575 and 1610 StopLoss 1495.1 11:53 AM

Buy Finantech @ 2600 SL : 2650 Tgt : 2700-2800 Time : 3-4 Days 12:12 PM

Brigade Enterprises lists at 10% premium at NSE

Equity shares of Brigade Enterprises (BEL) were listed for trading at the bourses today, Dec. 31, 2007.

The shares opened at a premium of Rs 40.00, or 10.26%, at Rs 430 at the NSE.

The scrip has hit a high of Rs 489.90, low of Rs 355.15 and is currently trading at Rs 376.90. Total volume of shares traded was 524,146 (Monday 9.58 a.m).

The company received a good response to its public issue which subscribed 13.07 times. The issue price had been fixed at Rs 390 a share, as against the set price band of Rs 351-390 a share of Rs 10 each.

JP Morgan India and ENAM Securities helped to raise Rs 6,483.64 million via this public issue.

Originally set up in 1990, BEL is one of the major diversified real estate developers in Bangalore. Besides Bangalore, it has taken up few projects in Mysore. Recently it has initiated some development activities in other parts of South India including Mangalore, Hyderabad and Chennai.

So far BEL has completed and delivered around 67 projects aggregating to around 6.7 million square feet of space comprising residential (71%), Commercial (26%) and hospitality ventures (3%).

Fedders Lloyd declares 10% dividend

The members at the 51st annual general meeting (AGM) of Fedders Lloyd Corporation held on Dec. 29, 2007, approved declaration of 10% dividend on the paid-up equity share capital of the company, for the year 2006-2007.

The board also approved the adoption of the balance sheet as at Jun. 30, 2007 and the profit and loss account for the year ended on Jun. 30, 2007 together with the reports of the auditors and directors thereon.

Shares of the company declined Rs 0.65, or 0.48%, to settle at Rs 134.85. The total volume of shares traded was 51,969 at the BSE. (Friday)

Market likely to advance

On Friday BSE Sensex closed with a marginal loss of 9.77 points, or 0.05%, at 20,206.95, while the broad-based NSE Nifty closed at 6,079.70, down 1.8 points, or 0.03%.

Brokers` Outlook
Bharat Thakur, Assistant Manager, Karvy Stock Broking expects market to open flat on Monday. More action would be seen in mid-caps and small cap counters.

Stocks to be watched out are Sanco Transmission, Ankur Drugs, Apollo Tyres, Nelcast and Godawari Power.

U.S. stocks fell after government reports ondurable goods reinforced speculation
the housing-market collapse will push the economy into recession. The Dow Jones Industrial Average decreased 0.05%, to 13,365. The Nasdaq Composite Index retreated 0.09%, to 2,674.46.

Asian markets opened positive on Monday (December 31), starting the last trading day of 2007 on an optimistic note. However, most Asian indices were closed.

Hong Kong`s benchmark stock index, Hang Seng added 251.72 points, or 0.92%, at 27,622.32.

Taiwan`s benchmark stock index, the Taiex index rose 28.79 points, or 0.34%, to trade at 8,425.74 led by Taiwan Semiconductor Manufacturing and Hon Hai Precision Industry.

Singapore`s Straits Times added 22.37 points, or 0.65%, to trade at 3,468.19.

Oil futures advanced on Thursday (December 27) after the government reported more than expected declines in crude and heating oil inventories.

Oil prices fell on Friday (December 28), reversing earlier gains after weak figures on new home sales raised concerns about the economy. Retail gas prices rose to USD 3 a gallon on Friday, following rising futures prices on concerns about tight inventories and potential supply disruptions.

Light, sweet crude for February delivery fell 62 cents, to settle at USD 96 a barrel, on the New York Mercantile Exchange (NYMEX).

Key Economic Indicators

Key Economic Indicators
Weekly 01-Dec-07 24-Nov-07
WPI Inflation (%) 3.75 3.01

07-Dec-07 30-Nov-07
Foreign Exchange Reserves ($bn) 273.6 273.5
Fortnightly 23-Nov-07 09-Nov-07
M3 % Growth 22.9 23.8
Bank Deposit % Growth 25.4 26.5
Bank Credit % Growth 23.2 23.5
Monthly Oct-07 Sep-07
Exports (% Growth) 35.7 19.3
Imports (% Growth) 24.3 2.3
Monthly Oct-07 Sep-07
IIP % Growth 11.8 6.4
Mining 3.7 6.0
Manufacturing 13.3 6.6
Electricity 4.2 4.5
Quarterly growth rates (1999 - 00 prices) 2007-08 Q2 2007-08 Q1
GDP 8.9 9.3
Agriculture, forestory and fishing 3.6 3.8
Industry 11.1 10.6
Services 7.8 10.6

FM expects better bids for IFCI

Finance minister P Chidambaram has backed state-run lender IFCI’s decision to reject a bid from a consortium of Sterlite Industries and Morgan Stanley, saying he expected more offers to come in when the re-bidding process starts. “We got a single bid, a conditional bid and therefore IFCI rejected the single, conditional bid. In my view, that’s the correct decision. The government will find the capital if necessary,” he said on the sidelines of a bank function here on Saturday. The IFCI, which had plans to raise money to manage its growing non-performing assets, had rejected the Sterlite Industries-Morgan Stanley consortium’s bid to pick up 26% stake in it, saying it was conditional. On December 20, it again invited bids and asked interested parties to submit applications by January 10. The finance minister also asked opponents of reforms who want high growth to come to terms with “changes” which alone can deliver over 9% growth. “I am sometimes surprised that people who desire 9% plus (GDP) growth have no desire to make any changes in the structure of banking, pension and insurance sectors,” he said at a function organised by Canara Bank .The UPA government, which has just about 15 months in power, is keen to push ahead with financial sector reforms, including hike in FDI limit from 26% to 49% in insurance sector, statutory powers for the interim pension regulator and more voting rights of foreign players in private banks.
Chidambaram also called on the banks to go for consolidation to keep pace with the changes and move forward. “I know there is opposition in the banking sector against consolidation… (but) The only way to grow is inorganically, by consolidating and picking up other banks. This has to happen in the banking circles and there is no other choice,” he said.

REITs to debut in the Indian market in a matter of months

The Securities and Exchange Board of India’s (Sebi) draft rules on real estate investment trusts, popularly known as REITs, are out and investors can now expect REITs to debut in the Indian market in a matter of months. Association of Mutual Funds of India (AMFI) chairman A P Kurien said, “I expect the final guidelines to come by January-end. Fund houses will be able to launch their schemes within four to six weeks thereafter.” This step opens the window for small-ticket investors to participate in the Indian real estate sector’s growth story.
REITs: The concept
REITs are trusts that are allowed to invest directly in real estate properties, mostly commercial. They earn a regular revenue in the form of lease rentals from the buildings they own and pass this income on to their investors.
Internationally, REITs are companies listed on exchanges and investors buy their shares. The Reit owns and manages properties and earns rentals from them, while investors get a share of the rentals in the form of dividends. According to Vineet K Vohra, managing director and chief investment officer of ING Investment Management, which recently launched its global real estate fund, “Globally REITs pay out almost 85-90 per cent of the revenue they generate in the form of dividends. So they are like high dividend-yielding equity stocks.”
Structurally, what is being proposed in India is different from the international model of REITs. Kurien added, “Internationally, shares of REIT companies are held by investors. But we will issue units of mutual funds. MFs will collect funds by issuing units and the funds collected will be invested in the manner prescribed in the offer document.”
Sebi’s proposal
According to Sebi’s guidelines, only registered real estate investment management companies (REIMC) will be allowed to manage the schemes of a real estate investment trust. The trust can be a scheduled commercial bank or its subsidiary trust, a public financial institution, an insurance company or a corporate body.
All schemes launched should have a rating, and there will be an evaluation by an appraising agency. Most of a REIT’s investments will have to be in income-generating real estate, though up to 20 per cent of the NAV of the scheme can be used to acquire incomplete units in a building, which is unoccupied and non-income producing.
To ensure a diversified portfolio, Sebi has proposed that no REIT under any of its schemes will have more than 15 per cent of its corpus invested a single real estate project, or more than 25 per cent invested in the projects of a single real estate group. Also the units of every scheme must be listed within six weeks of the date of closure. Every scheme will have an independent property valuer who will value the real estate. The schemes will have to declare at least 90 per cent of net annual income as dividends. Also, any capital gains on disposal of real estate will form part of the net income for distribution to unit holders.
Issues in Indian REITs
The country’s property sector is still developing and has several weak areas. However, “the Indian real estate market is not totally disorganised and opaque”, pointed out Kurien. “There are fragments that are transparent and follow standards. Fund houses will have to deal with only those properties and developers that are transparent and follow standards.”
So, in future, if developers want to attract funds from REITs, they will have to improve their transparency levels and accounting procedures. Thus, REITs are expected to provide the impetus for greater transparency in the sector.
Another issue before REITs will be that there aren’t too many ready, investment-grade projects around. According to CB Richard Ellis managing director Anshuman Magazine, “There are limited income-generating developments in the residential space. In the commercial space, too, there are very limited options where the complete development is owned by one person.” But in a year or two, he added, there should be sufficient properties available to be bought as FII money is coming in. REITs will allow developers the much-needed exit option for the buildings they develop, he noted.
Benefits and risks
The biggest advantage of REITs is that one now doesn’t need several lakh or crore rupees to invest in real estate. A sum as small as Rs 5,000 or Rs 10,000 will enable an investor to buy a stake in a commercial property, which will then generate a constant stream of revenue for him. Usually, since commercial buildings are rented for a minimum of three years and inflation is factored in at the time of lease renewal, an investment in a REIT provides the investor a steady, inflation-protected return.
However, REITs have some risks as well, the biggest being the risk of a slowdown in the real estate market, and of the property not being fully leased out.
Returns expectation
Since the investor’s income stream will depend on the rental income that the REIT earns, the yield generated in the real estate market will form the basis of his return. Magazine stated, “Currently the commercial yield is between 9 and11 per cent on an average and in case of the residential segment, it is between 4 and 6 per cent.” So the mix of residential and commercial developments that REIT holds will also determine the investor’s yield.
Finally, for investors who have watched the current real estate boom from the sidelines because they lacked the capital to participate in it, this new year brings a chance for them to join the party.
REITs snapshot
Sebi issues first guideline;final guidelines expected by January-end.
First REIT fund likely to debut by Feb-March
Structure different from that of international REITs
Limited developments available that can be bought up by REITs
REITs provide small-ticket investors a chance to hold a stake in high-value commercial property
Yield on commercial real estate currently 9-11%

Sunday, December 30, 2007

Market to remain firm in coming week: Networth

Market Roundup

The markets remained strong in the shortened week ended December 28, with both BSE and NSE rebounded nearly 5.5% each. With expiry of F&O contract and end of the calendar year BSE Sensex climbed up by 1,044 points to close at 20,206.95. The NSE Nifty rose 313 points, or 5.43%, w-o-w to close at 6,079.7. Mid cap and small cap stocks attracted investors and outperformed the major indices with gain of 6.08% and 9.21% respectively.

Amongst the sectoral indices metals and real estate indices were the best performers while auto ended on flat note. All the sectoral indices ended in green. The decline in production of crude, petroleum refinery products, cement, and steel has pulled down the growth of the six infrastructure industries to 4.5% in October 2007, compared with a growth of 9.9% in the same month last year. According to data released by the Government on Thursday, the production of crude petroleum registered a negative growth of 0.1% in October this year as against 9.3% in October last year.

US Markets ended lower largely on account of higher jobless data and poor durable goods sales. During a very short trading week, Dow Jones ended negative by 0.68% and Nasdaq down by 0.56%. Most of the Asian markets witnessed mixed trade with Shanghai Comp ending positive. A knee jerk reaction was expected on account of Pakistan politics. However market didn`t react much to the news. FTSE ended positive by 0.85%, Nikkei up by 0.33%, Hang Seng down by 0.93% and Shanghai up by 3.13% during the week.

Inflation for the week ended Dec. 15 fell to 3.45%, against 3.65% in the previous week, due to fall in prices of fruits, vegetables and textile products. It was lower than expectation of 3.69% according to Reuters` poll, which reinforce that interest rates are likely to remain steady at a central bank review next month.

The rupee appreciated by 0.3% to 39.44 against the dollar during the week due to fresh capital inflows. Foreign funds bought around USD 640 million of Indian shares in the first two sessions of this week compared with selling USD 1.3 billion of stocks in four sessions last week.


Networth Stock Broking expects market to remain firm in coming week on expectations of the fresh foreign inflows post holiday season.

OIL to infuse Rs 45 bn in next two years for expansion

Public sector oil & gas company, Oil India (OIL), embarked plan outlay of about Rs 45 billion over the next two years in development and expansion activities.

Majority of this investment is expected to be in the domestic operations. The company will capture the capital market in February 2008 to fund the expansion.

The company has interest in oil, natural gas and LPG production in Assam, Rajasthan and Arunachal Pradesh. While in overseas, OIL has joint venture interest for oil and gas blocks in Libya, Nigeria, Yemen, Iran, Goban and Sudan.

OIL has highest number of blocks in Libya after four new blocks were offered to this consortium in December. The company will sign product sharing agreement with Algerian company, SonaTrack soon. SonaTrack will be the operator in the four blocks with 50% interest. While Indian Oil Corporation (IOC) and OIL will hold 25% each.

On its entry into capital market, OIL said that it will offer up to 26.45 million shares constituting 11% of the total capital at a price to be decided through a 100% book building process. Of these, 24.05 million shares will be available to the public. The company aims to increase the crude production to 3.50 million tons in 2007-08 against 3.10 million tons in 2006-07.

Bulk deals

On Friday, Deutsche Bank sold 7.50 million shares at Rs 318 a share and HSBC Global Investment Funds Mauritius bought 5 million shares at Rs 318 a share of HCL Technologies on the National Stock Exchange (NSE).

CLSA Mauritius bought 1,304,362 shares at Rs 101.92 a share of Alok Industries.

Hardy Oil and Gas sold 1,097,750 shares at Rs 163.82 a share and Morgan Stanley Dean Witter Mauritius bought 456,000 shares at Rs 165.5 a share of Hindustan Oil Exploration.

DSP Merrill Lynch Capital sold 1 million shares at Rs 71.59 a share of Noida Toll Bridge.

Kotak Securities Client PMS sold 202,711 shares at Rs 305.26 a share and Offshore India bought 199,176 shares at Rs 305 a share of Saregama India.

Bishwanath Prasad Agrawal sold 720,000 shares at Rs 28.35 a share of Morepen Laboratories.

Morgan Stanley Dean Witter Mauritius sold 141,523 shares at Rs 109.95 a share of R P G Life Science.

BSMA sold 138,126 shares at Rs 164.42 a share of KRBL.

Alosha Vanijya bought 100,000 shares at Rs 101.62 a share and Samta Jain sold 107,949 shares at Rs 88.52 a share of Kohinoor Foods.

Om Arora bought 133,249 shares at Rs 46.69 a share of Pochiraju Industries.

ITC`s Fortune Park on expansion mode

Fortune Park Hotels, a subsidiary of ITC,launched its new hotel, Fortune Select Trinity, at Whitefield, the IT hub of the Bangalore city.

The group has planned to augment its current number of 40 hotels to 60 hotels as part of its expansion. The group is also planning to augment the number of rooms from 3,139 to 6,000 rooms over a period of time as part of this growth strategy.

Fortune, whose current expertise was in the business of managing hotels, has been also planning to set up its own properties. It is planning to start at three locations, Kolkata, Coimbatore and Bangalore.

The company is planning to launch a brand extension program by launching `adventure`, resorts and highway hotels to cater to the new customer segments.

ITC had land available that had been released since the factories closed down or shifted. These lands are being used to develop properties.

Shares of the company closed up Rs 2.15, or 1.06%, at Rs 205.5. The total volume of shares traded at the BSE was 1,406,614. (Friday)

FIIs remain net buyers in equities worth Rs 9,440 mn on Dec. 27

Foreign institutional investors (FIIs) remained net buyers in equities worth Rs 9,440 million (USD 234 million) on December 27. They bought equities worth Rs 67,743 million and sold equities worth Rs 58,303 million. Till December 27, they have been net sellers in equities worth Rs 29,578 million.

According to provision data available on NSE, FIIs were net buyers in the equity segment worth Rs 6,537.6 million on both BSE and NSE on December 28. They bought equities worth Rs 29,205.6 million and sold equities worth Rs 22,668 million. Total turnover in cash segment of NSE stood at Rs 175,483.9 million on December 28.

FIIs remained net buyers in debt segment on December 27 to the tune of Rs 2,884 million (USD 71.50 million). They bought debts worth Rs 3,004 million and sold debts worth Rs 120 million. Till December 27, they have been net buyers in debt worth Rs 30,310 million.

FIIs turned net sellers in derivatives worth Rs 35.6 million on December 27. They bought derivatives worth Rs 132,374.9 million and sold derivatives worth Rs 132,410.5 million.

MFs remain net buyers in equities worth Rs 7,160 mn on Dec. 27

Mutual funds (MFs) remained net buyers in equities worth Rs 7,160 million on December 27. They bought equities worth Rs 18,355 million and sold equities worth Rs 11,195 million. Till December 27, they have been net buyers in equities worth Rs 31,678 million.

MFs remained net buyers in debt segment worth Rs 4,263 million on December 27. They bought debts worth Rs 13,896 million and sold debts worth Rs 9,633 million. Till December 27, they have been net buyers in debts worth Rs 11,663 million.

Friday, December 28, 2007

Rupee remains steady at 39.44/USD

he Indian Rupee remained steady against the US Dollar on Dec. 28, 2007.

The Reserve Bank of India`s (RBI) reference rate for the US Dollar stood at Rs 39.44 on Dec. 28, as against the previous close of Rs 39.43.

On the other hand, the domestic currency depreciated 0.82% versus the Euro on the same day. The reference rate for Euro stood at Rs 57.69 on December 28 as against Rs 57.22 on December 27.

However, as revealed in the table below, the local currency depreciated 0.42% against the Great Britain Pound (GBP) and 1.18% against the Japanese Yen (taking into account 100 Yen).




100 YEN

December 27, 2007



December 28, 2007



Source: RBI

Note: The reference rate is based on 12 noon rates of a few select banks in Mumbai. The SDR-Rupee rate will be based on this rate. The exchange rates of GBP and Japanese Yen against the Rupee are based on the reference rate for US Dollar and middle rates of the cross currency quotes at 12 noon today.

Rashtriya Chemicals & Fertilizers , GAIL signs MoU to set up coal gasification project

Rashtriya Chemicals & Fertilizers (RCF) and GAIL India signed an MoU today to set up coal gasification project at Talcher in Orissa.

The existing gas resources of the country are continuously depleting. Considering the constraint, RCF and GAIL independently explored possibility of utilizing coal, which is abundantly available in India. Both the companies carried out simultaneous studies on viability of coal gasification plants and chemical & fertilizer complex based on this. Both the studies indicated viability of such a project.

The 2 companies decided to jointly implement coal gasification project at Talcher. Synthesis gas produced in the coal gasification plant will be used in production of ammonia, urea and other chemicals. The project will add to production capacity of 1.15 million MT of urea per year. Estimated cost of ammonia-urea project is about Rs 32 billion.

Shares of the company gained Rs 5.35, or 5%, to settle at Rs 112.35. The total volume of shares traded was 352,458 at the BSE.(Friday)

International investors pick stake worth USD 1 bn in Bharti`s arm

Bharti Infratel, a wholly owned subsidiary of the India`s biggest telecom operator, Bharti Airtel, announced today that leading international investors have agreed to invest USD 1 billion in Bharti Infratel. The international investors are Temasek Holdings, The Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF Capital, Citigroup & India Equity Partners (IEP), with Temasek Holdings being the largest investor.

The enterprise valuation has been agreed to be in the range of USD 10 to 12.5 billion, and the final valuation, within this range, will be determined on the basis of Bharti Infratel`s actual operating performance in FY 2008-09. This placement highlights the confidence of leading global investors in the Indian telecom sector, which is now the fastest growing telecom market in the world and the Bharti Group. It is also an endorsement of the government`s visionary policy on sharing of passive infrastructure.

Bharti Infratel owns close to 20,000 sites and holds approximately 42% stake in Indus Towers, the recently announced joint venture between Bharti, Vodafone and Idea, which has over 70,000 sites. Bharti Infratel and Indus Towers will provide passive infrastructure services to all wireless telecom operators in India on a non-discriminatory basis. Sharing of passive infrastructure results in capex and opex savings and higher capital efficiency for all wireless operators, enabling quicker roll out of services especially in rural areas, thus benefiting millions of people across India.

Shares of the company declined Rs 25.6, or 2.65%, to settle at Rs 940.7. The total volume of shares traded was 327,368 at the BSE.(Friday)

Market ends the week on flat note

Indian Stocks markets opened on a flat note on Friday (December 28) following the negative global cues. The impact of assassination of former Pakistan Prime Minister Benazir Bhutto was seen on all the global market. Dow Jones lost around 200 points on Thursday and finally closed on flat note. Following this, Asian market also opened on a flat note, effecting the overall mood of the market.

BSE Benchmark Index, Sensex, opened at 20,158.12, down 58.6 points from its previous day close. It continued to oscillate around its previous day close for the next two-three session and finally lost 193 points to touch the days low of 20,022.88. However it recovered smartly in the last lap of the trading day on account of short covering across the board.

Midcap and Smallcap stocks continued to maintain their heads high. Midcap Index gained 145.71 points and Small cap gained 272.55 points. Smallcap index gained 286.25 points on Thursday.

Global Market
Asian stocks closed negative (Dec. 28, 2007) as investors feared political instability in the South Asian region following assassination of Pakistan`s former Prime Minister Benazir Bhutto. Investors further lost confidence after reports emerged that the markets in U.S and Japan are witnessing major slump.

Market Statistics
BSE Sensex closed with a marginal loss of 9.77 points, or 0.05%, to close at 20,206.95, while the broad-based NSE Nifty closed at 6,079.70, down 1.8 points, or 0.03%.

The BSE Midcap gained 1.55% and BSE Small cap advanced 2.16%.

Out of the total 2,953 stocks traded at the BSE, 2,270 advanced, 651 declined, while 32 remained unchanged.

Amongst the sectoral indices, Metal rose 2.47%, FMGC gained 1.20%, Capital goods gained 0.02%, Power gained 0.76%, Bankex gained 0.14%, IT declined 0.37% and Realty gained 3.90%.

Movers and Shakers
Gainers at the Sensex were DLF, which rose 5.31% to Rs 1,063.70, followed by Tata Steel, which rose 2.76% to close at Rs 931.40 and Ambuja Cement gained 2.75% to close at Rs 149.20. Other gainers were Grasim Industries, ITC, Hindalco and Ranbaxy.

Laggards at the BSE Sensex were Wipro, which declined 3.52% to close at Rs 529.95, Bharti Airtel declined 2.65% to Rs 940.70 and Bajaj Auto declined 2.30% to Rs 2,610.95. TCS and ICICI Bank also slipped.

Top Volumes
Ispat Industries topped the volume chart with 11,372,046 shares followed by Arvind Mills with 7,694,998 shares and Reliance Petroleum with 6,317,497 shares.

Top Turnover
REL topped the turnover chart with Rs 2,183 million followed by RIL with Rs 1,617.2 million.

Forex reserves decline by USD 232 mn

Forex reserves witnessed a decline of USD 232 million to touch USD 272,722 million as on Dec. 21, 2007, primarily as a result of drop in foreign currency and assets collections, on a weekly basis.

As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Dec. 28, 2007, foreign currency and assets dropped USD 230 million to USD 263,934 million.

During the same period, the reserve position in the international monetary fund (IMF) decreased by USD 2 million to USD 428 million.

However, SDRs (special drawing rights) and gold reserves remained flat at USD 3 million and USD 8,357 million respectively.

Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.

UBS cancels StanChart`s India MF biz buyout

Global financial major UBS said that it will not proceed with the planned acquisition of Standard Chartered Bank`s mutual fund business in India.

UBS had agreed to buy StanChart`s MF management business for USD 118 million in January this year. But with the Sale and Purchase Agreement expiring, the two sides decided to end negotiations in this regard.

UBS has however underlined that the strategic alliance between the two companies for fund distribution in Asia, which was announced at the same time as the planned acquisition, would remain unaffected. The failure of the proposed deal would have negligible costs and would not impact UBS` earnings.

UBS said that it will remain committed to India and Asia Pacific. It will continue to provide its clients in India with market-leading equity brokerage and advisory services via UBS India Securities Private.

Unity Infraprojects gets LoI from Offbeat Developers

Unity Infraprojects received the Letter of Intent (LoI) from Offbeat Developers, Mumbai, for civil construction work for construction of mall named Market City at Kurla, Mumbai.

The contract value of the project is Rs 574.1 million excluding the cost of concrete and it is to be completed within 15 months.

Shares of the company were last trading up Rs 103.85 , or 11.45% at Rs 1011. The total volume of shares traded at the BSE was 134,519. (1.10 p.m., Friday)

European stocks fall led by tech and auto shares

European stocks fell on Friday, following the declines in US and Asian markets, paced by technology and auto shares, on concern that the slower US economic growth will cut corporate earnings.

UK`s benchmark index FTSE 100 lost 16.50 points, or 0.25% to trade at 6,481.30. The drop in the FTSE 100 was led by HSBC Holdings, Hbos, and Royal Dutch Shell.

French benchmark index CAC 40, fell 31.44 points, or 0.56%, to trade at 5,596.04. Fall in the CAC 40 was led by Sanofi-aventis, Suez and BNP Paribas.

Introduction of mini derivative (Futures & Options) contract




Circular No.: NSE/F&O/118/2007

Download No. NSE/FAOP/9972

Date: December 27, 2007

Dear Members,

Sub: Introduction of mini derivative (Futures & Options) contract

on S&P CNX Nifty index

The Exchange is in receipt of a SEBI circular no. SEBI/DNPD/Cir- 33/2007 dated December 27, 2007, regarding Introduction of mini derivative (Futures & Options) contract S&P CNX Nifty index. The copy of SEBI circular is enclosed as Annexure I.

Members are requested to take note of the above.

Further details in this regards shall be intimated by the Exchange through subsequent circulars.

For National Stock Exchange of India Ltd.

Suprabhat Lala

Asst. Vice President

Annexure I

General Manager

Derivatives and New Products Department

SEBI/DNPD/Cir- 33/2007

December 27, 2007


The Managing Director / Executive Director

of Derivative Segment of NSE & BSE

and their Clearing House / Corporation.

Dear Sir,

Sub: Introduction of mini derivative (Futures & Options) contract

on Index (Sensex & Nifty)

Pursuant to the recommendation of the Derivatives Market Review Committee (DMRC) headed by Professor M. Rammohan Rao, it has been decided to introduce mini derivative contract on Index (Sensex and Nifty).


To begin with, the mini derivative contract on Index (Sensex and Nifty) shall have a minimum contract size of Rs. 1 lakh at the time of its introduction in the market.


The existing risk containment and other measures applicable for existing exchange traded equity Index derivative contracts shall also be extended to the mini derivative contract on Index. The risk containment and other measures shall be the same as specified for the Index Futures and Index Option contracts in SEBI Circular Nos. IES/DC CIR-4/99 dated July 28, 1999, IES/DC/CIR-5/ 00 dated December 11, 2000, SMDRP/DC/CIR- 7/01 dated June 20, 2001, SMD/DC/CIR-11/ 02 dated February 12, 2002, SEBI/DNPD/Cir- 17/2003/10/ 29 dated October 29, 2003, SEBI/DNPD/Cir- 26/32004/ 07/16 dated July 16, 2004 SEBI/DNPD/Cir- 27/2004/07/ 16 dated July 16,2004, DNPD/Cir-29/ 2005 dated September 14, 2005 and SEBI/DNPD/Cir- 31/2006 dated September 22, 2006.

This circular is being issued in exercise of powers conferred by sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992, to promote the development of the securities market.

This circular is available on SEBI website at in, under the category "Derivatives – Circulars". The Circular shall come into force from the date of the circular.

Technical View: Positive momentum to continue

On Thursday, the 30-share benchmark, Sensex opened on a strong note at 20,301.05, up 108.98 points from previous day`s close, boosting the positive momentum made in the last few days. The market continued to trade in choppy manner for the rest of the session on account of the F&O expiry. Small cap stocks registered phenomenal jump today. It gained 286.25 points to close at 12,628.74.

Vishwas Agarwal, Technical Analyst said, ``Today we had a good F&O closing and from tomorrow fresh F&O series will start where the overall sentiments is still positive with little bit volatility.``

He added, ``If BSE trades above 20,150 and maintains this level than the market is in trading zone. If it breaches this level than we can see only stock specific movement,`` adding ``January is a result session and also FII allocation for India will be announced. These two events will help in deciding the next move of the market. ``

Stocks Recommendation:

Vishwas Agarwal recommended Cairn India, Bank of Baroda, Man Industries and Indian Hotel. He said all these stocks looks good if the market moves up.

Suresh Iyer, Technical Analyst, Asit C Mehta, said, ``On Thursday we witnessed a good rollover in F&O segment and expiry closed on a quite note. Further, the F&O cost of carry was very high which shows the optimistic view about the market among the investors.``

He added, ``Looking at the good F&O expiry on Thursday, high cost of carry and FII which turned into buyer on Monday, we can say that from here onwards, probably the market will continue to trade in positive terrain.``

For the last day of the week, Suresh says, ``The market is expected to open positive and will continue to trade higher. Nifty is having a resistance at 6,160- 6,172 and once it breaks this level than it can cross 6,239 - 6,271 level.``

Stock Recommendation:
Suresh Iyer has recommended Punj Lloyd, Parsvnath Developers, and Everest Kanto, in addition to TISCO, RIL and SBI for Friday. He has also recommended BHEL with a stoploss of Rs 2,580.

Asian markets decline

Asian markets declined on Friday (Dec. 28, 2007) after the US government report fueled concerns that the growth is undergoing a slowdown.

Toyota Motor Corp led to the declines among exporters after US durable goods orders were below estimates.

Mitsubishi UFJ Financial Group led to the declines among lenders.

Hong Kong`s index Hang Seng lost 440.80 points, or 1.58% at 27,402.13.

China`s Shanghai Composite declined 3.21 points, or 0.06%, to trade at 5,305.68.

South Korea`s KOSPI declined 11.30 points, or 0.59%, to trade at 1,897.32.

Singapore`s Straits Times fell 21.20 points, or 0.61%, to trade at 3,456.00. (8.25 a.m IST)

Crude Oil Trades Near $97 After Rising on Lower U.S. Stockpiles

Crude oil was little changed near $97 a barrel after rising yesterday as an Energy Department report showed that U.S. inventories fell more than expected.

Oil is set for a third week of gains after stockpiles declined to the lowest since January 2005. Supplies of distillate fuel, including heating oil, dropped the most since February. The killing of Benazir Bhutto, Pakistan's former prime minister, has heightened concern of further violence in the nuclear-armed nation.

``There is some bias to the upside given the much-larger- than-anticipated drawdown, not just in crude but also in distillates,'' said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. The assassination ``is another source of instability that may well affect the region.''

Crude oil for February delivery was at $96.91 a barrel, up 29 cents, on the New York Mercantile Exchange in electronic trading at 10:54 a.m. Singapore time. Futures touched a record $99.29 on Nov. 21. Prices are up 60 percent from a year ago.

Brent crude for February settlement was at $95.11 a barrel, up 33 cents, on London's ICE Futures Europe exchange at 10:39 a.m. Singapore time. The contract yesterday rose 84 cents, or 0.9 percent, to $94.78, the highest close since Nov. 26.

The department released its weekly report on inventories at 10:30 a.m. yesterday in Washington, a day later than usual because of Christmas.

Lower Volumes

Trading volumes have been below average because of end-of- year holidays. Nymex oil traders exchanged an estimated 241,452 contracts yesterday, down 31 percent from a week earlier, according to data compiled by Bloomberg.

Supplies of distillate fuel, a category that includes heating oil and diesel, fell 2.77 million barrels to 126.6 million barrels, the Energy Department report showed. A 900,000 barrel decline was expected, according to the median of responses.

Heating oil for January delivery rose 3.91 cents, or 1.5 percent, to close at $2.6803 a gallon in New York yesterday. It was the highest settlement price since Nov. 26.

Gasoline supplies rose 636,000 barrels to 205.9 million last week, the report showed. A 1.4 million barrel gain was expected.

The January contract for reformulated gasoline to be blended with ethanol before delivery, known as RBOB, rose 4.36 cents, or 1.8 percent, to $2.4962 a gallon in New York, a record close.

Total implied fuel demand in the U.S. averaged 21.1 million barrels a day in the four weeks ended Dec. 21, up 1.6 percent from a year earlier, according to the department. Consumption of distillate fuel, a category that includes heating oil and diesel, averaged 4.5 million barrels a day over the period, up 5.7 percent from a year earlier.

MFs remain net buyers in equities worth Rs 7,425 mn on Dec. 26

Mutual funds (MFs) remained net buyers in equities worth Rs 7,425 million on December 26. They bought equities worth Rs 15,274 million and sold equities worth Rs 7,849 million. Till December 26, they have been net buyers in equities worth Rs 24,516 million.

MFs remained net buyers in debt segment worth Rs 2,155 million on December 26. They bought debts worth Rs 8,488 million and sold debts worth Rs 6,333 million. Till December 26, they have been net buyers in debts worth Rs 7,349 million.

FIIs remain net buyers in equities worth Rs 24,205 mn on Dec. 26

Foreign institutional investors (FIIs) remained net buyers in equities worth Rs 24,205 million (USD 600 million) on December 26. They bought equities worth Rs 47,273 million and sold equities worth Rs 23,068 million. Till December 26, they have been net sellers in equities worth Rs 28,272 million.

According to provision data available on NSE, FIIs remained net buyers in the equity segment worth Rs 7,026.4 million on both BSE and NSE on December 27. They bought equities worth Rs 55,788 million and sold equities worth Rs 62,814.4 million. Total turnover in cash segment of NSE stood at Rs 249,767.8 million on December 27.

However, FIIs were absent in debt segment on December 26.

FIIs remained net buyers in derivatives worth Rs 8,448.9 million on December 26. They bought derivatives worth Rs 187,773.2 million and sold derivatives worth Rs 179,324.3 million.

Bulk deals

On Thursday, Morgan Stanley & Co. International sold 4,545,334 shares at Rs 152.38 a share of Indian Hotels on the National Stock Exchange.

Goldman Sachs bought 1,388,842 shares at Rs 98.55 a share while Merrill Lynch Capital Markets sold 1,190,000 shares at Rs 99.04 a share, Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 1,553,060 shares at Rs 97.38 a share and MS DW Mauritius sold 2,329,590 shares at Rs 98.33 a share of Alok Industries.

Birla Sun Life Trustee sold 1,050,000 shares at Rs 85.63 a share of Arvind Mills.
MS DW Mauritius sold 6,884,595 shares at Rs 49.38 a share of Ashok Leyland.

Morgan Stanley & Co. International sold 1,326,000 shares at Rs 173.74 a share of Ballarpur Industries.

Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 2,881,440 shares at Rs 86.22 a share and MS DW Mauritius sold 2,726,211 shares at Rs 83.62 a share of Chambal Fertilizers & Chemicals.

Morgan Stanley & Co. International sold 1,089,000 Shares at Rs 408.08 a share of Chennai Petroleum Corporation.

Kingfisher Radio sold 1,224,000 shares at Rs 277 a share, Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 948,600 shares at Rs 282.12 a share and MS DW Mauritius sold 948,600 shares at Rs 78.95 a share while Societe Generale bought 795,600 shares at Rs 280.58 a share of Deccan Aviation.

Lehman Brothers Asia Holdings Cayman bought 2,429,637 shares at Rs 81.96 a share and Morgan Stanley & Co. International sold 4,087,751 shares at Rs 81.77 a share of Dena Bank.

Morgan Stanley & Co. International sold 2,420,000 shares at Rs 141.86 a share of Gateway Distriparks.

Godrej Investments sold 3,100,000 shares at Rs 87.8 a share and MSC Software Benelux sold 3,100,000 shares at Rs 87.8 a share of Geometric Software Solutions.

Morgan Stanley & Co. International sold 1,770,000 shares at Rs 251.11 a share of GTL.

Morgan Stanley & Co. International sold 1,465,800 shares at Rs 246.52 a share of Gujarat Alkalies & Chemicals.

Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 3,027,375 shares at Rs 67.32 a share and MS DW Mauritius sold 3,026,909 shares at Rs 66.58 a share of Hotel Leela Venture.

Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 2,965,625 shares at Rs 125.89 a share and MS DW Mauritius sold 2,965,625 shares at Rs 126.4 a share of Jaiprakash Hydro-Power.

Morgan Stanley & Co. International sold 1,411,000 shares at Rs 361.8 a share of L I C Housing Finance.

Triple M Investments sold 1,834,500 shares at Rs 566.62 a share of Punj Lloyd.

Morgan Stanley & Co International sold 3,565,100 shares at Rs 110.78 a share of Syndicate Bank.

Morgan Stanley & Co Intl on account of Morgan Stanley Dean Witter sold 1,497,650 shares at Rs 179.65 a share and MS Dw Mauritius sold 1,497,650 shares at Rs 178.06 a share of Triveni Engineering & Industries.

MS DW Mauritius sold 1,695,021 shares at Rs 69.93 a share of T V S Motor.

Goldman Sachs bought 1,676,507 shares at Rs 240.65 a share of Voltas.

Thursday, December 27, 2007

ICICI Direct rates Visa Steel as OUTPERFORMER

ICICI Direct rated Visa Steel (CMP: Rs 49) as OUTPERFORMER with a price target of Rs 71.

Visa Steel plans to set up its steel manufacturing facility with Steel Melting Shop and Bar & Wire Rod Mill with capacity of 500,000 tons per annum (tpa) by FY10. It is setting up a 300,000-tpa sponge iron plant & 50 MW Waste Heat Recovery Power Plant by FY08. Post capex, the analysts at ICICI Direct expect EBIDTA margins to expand to 23.40% by FY10. The company is also integrating backwards with captive ownership of critical raw materials such as iron ore, chrome ore, steam coal, coke & power, which would enable it to withstand raw material-related pricing pressures and keep its cost under control.

The analysts expect the company to emerge much stronger post completion of capex in FY10. They say that as the benefits of backward integration would start accruing along with higher capacity utilization, the company would align its cost structure to optimal levels. Further, the financial stability would improve from last quarter of FY10
when it value added products units gets commissioned. The company would be able to absorb additional depreciation and interest burden in lieu of the ongoing capex with much ease, as its cash flow situation would improve substantially from current levels. They expect operating margins to expand to a respectable 23.39% in FY10 and net profit margins to be 9.72% in FY10. Operating margins are expected to expand to respectable 23.39%.

The analysts have adopted replacement cost method for valuing the company as PE, EV/EBIDTA or other valuation multiples would not reflect the evolving business model of the company. They believe Visa Steel deserves to trade a premium to its replacement cost despite concerns regarding delays in project execution.

Market trades flat

The 30-share benchmark, having lost its firmness in the earlier trading session, is currently trading on a flat note.

BSE Sensex was last trading at 20,215.83, up 23.31 points while NSE Nifty was trading at 6,067.20, down 3.55 points (12.07 p.m.).

The BSE Midcap added 0.56% and BSE Smallcap added 1.93%.

Out of the total 2,868 stocks traded at the BSE, 2,074 advanced, 752 declined, while 42 remained unchanged.

Amongst the sectoral indices, Bankex rose 0.66%, FMCG rose 1.04%, BSE Power rose 0.34%, BSE Realty moved up 0.32%, BSE IT rose 0.16%.

Gainers at the BSE Sensex were Hindalco, which rose 2.46% to Rs 214.55, HDFC Bank rose 2.23% to Rs 1740.95 and ITC rose 1.78% to Rs 203.20. REL, ICICI Bank, Ambuja Cement, Wipro and ONGC also moved up.

Losers at the BSE Sensex include Bharti Airtel, which declined 2.62% to Rs 956.85, Reliance Comm declined 1.37% to Rs 733.00 and Bajaj Auto dipped 1.27% to Rs 2647.80. Grasim, Tata Motors, Cipla, DLF, RIL and NTPC also slipped.

Power Grid gaining momentum

Keep a watch on PowerGrid.. It might gain momentum towards the end of the day..
Buy if it crosses 146 sl 143 .. ist target 149 .. second target 152 intraday

Market expected to be volatile

On Wednesday BSE Sensex gained 338.40 points, or 1.70%, to close at 20,192.52, while the broad-based NSE Nifty closed at 6,070.75, up 85.65 points, or 1.43%.

Brokers` Outlook
Bharat Thakur, assistant manager, Karvy Stock Broking expects a volatile session on Thursday on the back of F&O expiry. He also said that after expiry some consolidation would be seen in the market before this year-end.

He is bullish on engineering and construction sectors and stocks to be watched out are Hindustan Zinc, Axis Bank, Aban Offshore, Reliance Industries and Reliance Petroleum.

U.S. stocks ended flat on Wednesday due to news of weaker-than-expected retail sales. A jump in oil prices also concerned investors. A report that U.S. home prices fell for the 10th consecutive month in October also appeared to weigh on investors.

The Nasdaq Composite Index advanced 0.40%, to 2,724, while Dow average up by 0.02% to 13,551.

Asian markets on Thursday (Dec. 27, 2007) opened mixed with the Nikkei and Shanghai Composite trading marginally down, while Taiex, KOSPI and Strait Times advanced. Metal and energy companies added gains as crude oil and metals prices soared.

Japanese benchmark index Nikkei fell 83.25 points, or 0.53%, to trade at 15,570.29. Hong Kong`s index Hang Seng was trading flat at 28,129.35. China`s Shanghai Composite fell 16.37 points, or 0.31%, to trade at 5,216.98. South Korea`s KOSPI added 2.28 points, or 0.12%, to trade at 1,909.00.

Crude oil prices rose on Wednesday (December 26), followed by the new round of Turkish air strikes in northern Iraq and a growing belief that domestic oil inventories fell last week. Light sweet crude for February delivery rose USD 1.84, to settle at USD 95.97 a barrel Wednesday on the New York Mercantile Exchange (NYMEX). It rose as high as USD 96.54, its one-month high.

Technical View: Optimism to continue in mkt

The 30-share benchmark after witnessing a huge gain of around 700 points on Monday (December 24), today opened firm at 19,940.96 led by global cues. It continued to trade strong throughout the day. Heavy buying interest was seen in frontline stocks. Metal, capital goods and realty sector traded well. Finally the index touched an intraday high of 20,211.47 to end the day on a cheerful note.

BSE Sensex gained 338.40 points, or 1.70%, to close at 20,192.52, while the broad-based NSE Nifty closed at 6,070.75, up 85.65 points, or 1.43%.

Commenting on this upbeat mood Suresh Iyer, technical analyst, Asit c Mehta said, ``I am bullish on the market in the coming days and on Thursday we can see the same optimism in the market, the F&O expiry should also close positively.``

He added, ``On Wednesday, Nifty closed at 6,070. Now from this level it can go up to 6,109 on Thursday and if it crosses this mark then the next immediate target will be 6,160 - 6,172.`` He added, ``On Thursday Sensex can touch 20,320 and if it crosses 20,320 mark than the next target will be 20,528.``

Stock Recommendation:

Suresh has recommended Titan, Kotak Mahindra Bank, SBI in addition to TISCO, RIL and ONGC for Thursdays trading. He has also recommended Bhart Forge with a stop loss of Rs 341 and JP Associates, in which investors can go long.

Technical analyst Vishwas Agarwal said, ``BSE is already up by 1,200 points from the recent low that may now attract some volatility. However overall mode of the market is strong until market is above 19,888,`` adding, ``midcap stocks will continue to outperform.``

He said, ``If Sensex maintains above 19,950 than it can touch 20,222 and if it crosses this than we can see more upside. Reliance Industries can also touch Rs 3,000 mark in the coming few sessions which will give new boost to the market, however Index short covering will also come by that point.``

For the first month of the new year Vishwas said, ``January is a result session and also FII allocation for India will be announced. These two events will help in deciding the next move of the market.``

Stock Reccomendation:
Vishwas has recommended Sasken, Tata Chemicals, Ranbaxy, Tata Motors, Bharat forge, Canara Bank, PFC, Moser Baer, Parsavnath and core projects for the next 10-12 trading sessions with some stoploss.

Wednesday, December 26, 2007

Escorts FY07 consolidated loss narrows to Rs 55.10 mn

Escorts, one of the leading tractor manufacturers, reported on Wednesday, the losses during FY07, narrowing to Rs 55.10 million on consolidated basis as compared to net loss of Rs 474.10 million in FY06. On the other hand, the revenue side showedgrowth of 15.72% on consolidated basis to Rs 28,248.20 million in FY07, compared with Rs 24,409.60 million in FY06.

However, on standalone basis, Escorts swung to a loss in FY to Rs 64.40 million in FY07 as compared to net profit of Rs 190 million in FY06. While the standalone revenues climbed 12.05% in FY07 to Rs 21,021.50 million compared with Rs 18,760.20 million in FY06.

Formed in 1944, Escorts is a manufacture farm equipment, automotive components, railway ancillaries, construction machinery, shock absorbers and telecom equipment.

Shares of the company gained Rs 3.8, or 2.59%, to settle at Rs 150.55. The total volume of shares traded was 168,476 at the BSE. (Wednesday)

L&T bags order for Muscat Golf Course

Larsen & Toubro (Oman) LLC bagged a project of Muscat Golf Course valued at Rs 4.33 billion.

The promoter of the project is Muscat Golf Course Project LLC, one of the major developers in Sultanate of Oman. The project site is located near A1 Seeb International Airport. The project completion period is 21 months & the consultant for the project is Cowi & Partners LLC and Cost consultants will be Majan Engg. Consultants.

Larsen & Toubro (Oman) LLC is a joint venture of Larsen & Toubro - India and The Zubair Corporation, which is one of the leading business group in the Sultanate of Oman.

Shares of the company were last trading up Rs 123.3, or 3.02%, at Rs 4,212. The total volume of shares traded at the BSE was 116,281. (1.40 p.m., Wednesday)

Sensex closes above 20K

MUMBAI: Investor sentiment remained buoyant as equities closed higher on Wednesday led by oil & gas stocks.

Bombay Stock Exchange’s Sensex closed above 20,000 after five trading sessions. The index ended at provisional 20,199.52, up 1.74 per cent or 345.40 points. It touched a high of 20,211.47 and low of 19,896.61.

National Stock Exchange’s Nifty ended at provisional 6070.50, up 85.4 points or 1.43 per cent. It scaled high of 6085.25 and low of 5988.45.

Tier II and III category stocks outperformed the benchmarks. BSE Midcap Index closed 2 per cent up while BSE Smallcap Index closed 3.02 per cent higher.

DLF (up 5.18%), Hindalco Industries (4.48%), Reliance Industries (3.67%), Tata Steel (3.54%), Tata Motors (3.28%), Grasim Industries (2.97%) and State Bank of India (2.94%) were the biggest Sensex gainers.

Bajaj Auto (down 1.84%), ONGC (0.83%), Hindustan Unilever (0.6%), Wipro (0.34%) were the laggards. HDFC (down 0.08%) and Tata Consultancy Services (0.05%) ended flat.

Surge in share prices of state-owned oil marketing companies pulled the BSE Oil&Gas Index 3.45 per cent up. Index heavyweight Reliance Industries closed 4 per cent higher. BSE Metal Index ended 2.5 per cent higher.

Across BSE, 2,255 shares advanced, 663 declined and 27 remained unchanged.


Market maintains strength

The 30-share benchmark, having maintained its strength in the earlier trading session, continues to trade in the positive terrain. Heavy buying spree was seen in frontline stocks.

All sectors are trading in the positive.

BSE Sensex was last trading at 20,072.85, up 218.73 points while NSE Nifty, was trading at 6,046.35, up 61.25 points (12.17 p.m.).

The BSE Midcap added 1.66% and BSE Smallcap added 2.32%.

Out of the total 2,859 stocks traded at the BSE, 2,280 advanced, 561 declined, while 18 remained unchanged

Amongst the sectoral indices, Bankex rose 1.32%, FMCG rose 0.73%, BSE Power inched up 1.81% and BSE Realty moved up 1.60%, while BSE IT declined 0.82%.

Gainers at the BSE Sensex were SBI, which advanced 3.01% to Rs 2400.10, Hindalco rose 2.99% to Rs 207.00 and Tata Steel rose 2.72% to Rs 886.00. DLF, RIL, L&T, Reliance Comm, Tata Motors and BHEL also moved up.

Losers at the BSE Sensex include, TCS, which declined 1.96% to Rs 1087.00, Wipro declined 1.51% to Rs 527.20 and Infosys dipped 1.05% to Rs 1791.95. ONGC, Satyam, Bajaj Auto and HUL also slipped.

Spice Comm surges 7% on news of tower sale

Shares of Telecom services provider Spice Communications are currently trading over 7% higher at the Bombay Stock Exchange (BSE) after the company announced its plans to sell 875 telecom towers to a tower operating company.

The company also plans to avail borrowing facility of up to USD 410 million from China Development Bank (CDB) for growth and network expansion in the existing telecom circles.

Shares of the company were last trading up Rs 4.30, or 7.20%, at Rs 64. The total volume of shares traded at the BSE was 4,373,692. (11.46 a.m., Wednesday)

The scrip has added 5% over the past one week and 36.17% over the past one month.

CS Software secures order from SAFRAN group

CS Software Enterprise secured orders for rendering high-end engineering services to a world leading supplier of jet engine test cells, data acquisition and control systems, and jet engine test equipment belonging to SAFRAN group.

The above services enable the company to foray into Jet Engine Maintenance Repair Overhaul (MRO) design and engineering services.

CS Software Enterprise (CSSOFT) is a public limited company headquartered in Hyderabad, India. The company provides customized IT solutions to its customers. The functional domain expertise areas are aerospace, education, training, public utilities, construction, manufacturing, telecommunication, healthcare, insurance and many more.

Shares of the company gained Rs 3.7, or 4.94%, to trade at Rs 78.55. The total volume of shares traded was 18,259 at the BSE. (11.24 a.m., Wednesday)

Market in positive terrain: Vishwas Agarwal

After witnessing huge sell offs in the last week, today the Indian Stock market opened on a strong note. The market saw huge jump due to the positive news from the Global market and Gujarat assembly result.

For the third consecutive time, BJP has won the election in Gujarat. The election result had a positive impact on the market as well as on the Gujarat based companies, which opened on a strong note.

Sensex continued to trade strong for the rest of the session after opening at 19,308.20, up 145 points and witnessed strong buying pressure across the board especially in IT Stocks, which is facing the pain of Rupee appreciation. It gained 6.04%, or 260.98 points as compared to 3.34% on Thursday (December 20). Wipro and Infosys led the IT stocks higher.

Commenting on this, Vishwas Agarwal, Technical Analyst said that BSE above 19,750 would be a strong trading zone with a target of 20,150 and 22,222. He added that, since the expiry of F&O is coming closer, the frontline stocks will trade volatile. He further said that the overall market sentiment is positive and market has successfully managed to rebound after last week`s volatility.

When quipped about the outlook for January 2008, Vishwas said that the market will be very active as third quarter results are expected. He expects mid-cap stocks to continue the northward movement.

Market to open positive on Wednesday

BSE Sensex ended the day with a hefty gain of 691.55 points, or 3.61%, at 19,854.12, while the broad-based NSE Nifty closed at 5,985.10, up 218.6 points, or 3.79%.

Bharat Thakur, Assistant Manager, Karvy Stock Broking, said that the market was up 700 points ahead of expiry. There was short covering witnessed in the frontline stocks viz. RIL, REL, ONGC and PSU Banks. IT stocks traded strong during the day.

He said crucial support for Nifty is at 5,650 and if it crosses this level, market market may see a new high.

Global cues was the another reason which sharply led the market.

Market may see volatility till Thursday ahead of the expiry. Further he added that the market is expected to move up on Wednesday.

Thakur recommended stocks like Hindustan Zinc, L&T, Axis Bank, Varun Industries and Info Edge.

Anand Dama, Research Analyst, KJMC Securities, said that the market saw huge jump due to the positive news from global market and Gujarat assembly result. It was also due to SEBI`s decision on allowing short selling to institutional investors.

For the third consecutive time, BJP has won the election in Gujarat. The election result had a positive effect on the market as well as on the Gujarat based companies, which opened on a strong note.

Market may open on a positive note on Wednesday, according to him.

Stocks to be watched out for are Shree Cement, JK Cement, Bank of Baroda and HDFC Bank

The market will remain closed on Tuesday(December 25) on the eve of Christmas.

Share of SSIs in manufacturing to decline

Industry body Assocham said that the share of small scale units in the country`s manufacturing sector may decline as newer technologies; trade barriers and strict quality norms erode their competitiveness.

According to a study by Assocham, the contribution to manufacturing and job creation by small scale industries (SSI) is likely to slip by 5% and 3% respectively as it has already plunged into deceleration because of its inability to absorb latest technologies.

The report said that large and medium industries are sourcing their inputs through cheaper imports that have endangered SSIs` existence and the trend is unlikely to be arrested in the coming year.

SSIs will encounter a gloom period, beginning 2008 as its contribution to manufacturing will come down to 35% as compared to 40% of now and over 45% preceding year until 2006-07.

The number of SSI units in 2006-07 were estimated at 4.4 million with employment capacities for nearly 23.8 million workers with Rs 14,000 billion of output to manufacturing.

As a result of deceleration, the number of units in SSIs have come down to around 4 million by now and employment generation has shrunk to 22.5 billion workers. Their output to manufacturing has come down to Rs 12,000 billion.

The report pointed out that due to lack of visible policy decisions, the export by SSIs would also decline by 7% - 8% as the inputs being produced by the entire sector are costing to their supplier higher by over 6% - 7%.

Stock market Gyan

What is a participatory note?

PNs are instruments used by FIIs, not registered in the country, for trading in the domestic market. They are a derivative instrument issued against an underlying security which permits the holder to share the capital appreciation or income from that security. PNs are, therefore, like contract notes and are issued by FIIs to their overseas clients, who may not be eligible to invest in the Indian stock markets. PNs are used as an alternative to subaccounts by ultimate investors, who prefer to avoid making disclosures required by various regulators. The government has asked FIIs to wind down their exposure to such PNs and eliminate them from their books within five years. It is likely to be whittled down to three years.

What is short-selling?
The Securities and Exchange Board of India (Sebi) on Thursday December 22, 2007 allowed short-selling by all classes of investors in the Indian stock market.

The date of implementation will be announced after the stock exchanges and depositories put the required systems in place. Business Standard dissects the concept of short-selling and its implications for the benefit of the lay investors.

What is short-selling?

Short-selling is the sale of shares that the seller does not own at the time of trading. Despite being a long-standing market practice worldwide, short-sales have been the subject of considerable debate and divergent views in most securities markets.

The votaries of short-selling view the practice as a desirable and essential feature of a securities market.

They argue that in a weak market, short-covering of positions taken at the beginning of a downturn, would arrest the declining trend. Critics of short-selling, on the other hand, are convinced that short-selling poses potential risks and can easily destabilise the market directly or indirectly.

Is short-selling being introduced in the Indian market for the first time?

No. Short-selling was prevalent till 2001. Sebi banned short-selling after the stock prices crashed in 2001 under the weight of heavy short-selling by big operators, who exploited the downturn in equity prices during the Ketan Parekh scam. This accentuated the fall.

So how is it different this time?

Sebi has tried to plug the loopholes in the earlier system this time. The regulator has barred naked short-selling.

The traders would be required to mandatorily honour the obligation of delivering the securities at the time of settlement. No institutional investor would be allowed to indulge in day trading, that is, squaring off their transactions intra-day.

What is naked short selling?

The illegal practice of short selling shares that have not been affirmatively determined to exist.

“Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. However, some professional investors and hedge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock,” says This causes the trade not to be completed.

So, what is the problem with it?

The problem with naked short selling is that it can be abused to make profits at the expense of share prices. To do this, the trader simply enters a naked short with no intention of returning the shares, thus leaves the transaction incomplete. However, a large enough short sale could cause the price to fall, just as a large deal where the stock is being really sold.

Does this means that short-selling will not exacerbate market falls?

Genuine short-selling could exacerbate the price decline, but that by itself may not be construed as a manipulative activity unless there are evidences of market misconduct.

However, abusive short-selling practices to manipulate the price of a stock will continue to be treated as market misconduct and attract appropriate regulatory action.

Why do investors undertake short-selling?

Investors execute short-selling for two reasons. 1) When they feel the price of a stock is overvalued, they go short on that stock, expecting the prices to come down. Short-sellers hope to buy back the stock at a lower level. 2) Traders also prefer to go short on the cash market when the spot price of a stock is higher than the futures (derivatives) prices.

Currently, investors in the Indian market cannot do this even while they are able to do arbitrage if the spot prices are lower than the futures. It means that they can buy in cash and sell in the derivatives segment. Sebi hopes to remove this distortion with the introduction of short-selling.

What are the other key features?

Sebi intends to introduce a vibrant stock lending and borrowing (SLB) programme along with short-selling. This means traders are required to borrow shares they sell short from the SLB scheme to honour their trades.

All classes of investors (including retail), who own shares, can participate in the SLB scheme and earn a fee for lending their shares to short-sellers.

Institutional investors are also required to disclose upfront at the time of placement of order whether the transaction is a short-sale and demonstrate their ability to borrow to the satisfaction of the broker.

Retail investors, however, would be permitted to make a similar disclosure before the end of trading hours on the transaction day.

Tuesday, December 25, 2007

Oil settles at USD 94.13

Crude oil prices rose on Monday (December 24), after predictions of a drop in crude inventories raised new supply concerns.

Light, sweet crude for February delivery rose 82 cents to settle at USD 94.13 a barrel on the New York Mercantile Exchange (NYMEX) after falling as low as USD 92.50 earlier.

January gasoline futures rose 0.45 cent to settle at USD 2.384 a gallon.

The retail gas prices fell 0.2 cents, overnight to USD 2.974 a gallon.

In London, February Brent crude rose 24 cents to settle at USD 92.70 a barrel on the ICE Futures exchange.

January heating oil futures fell 1.44 cents to settle at USD 2.5947 a gallon on the NYMEX.

January natural gas futures dropped 16.5 cents to settle at USD 7.025 per 1,000 cubic feet on the NYMEX.

Jayant Agro`s board approves raising USD 20 mn via FCCBs

Jayant Agro Organics has announced that the board of the company approved to issue 600,000 shares to Japan`s Itoh Oil Chemicals Co at Rs 105 each, reports Economic Times.

Also, the board of the company has approved to raise up to USD 20 million through foreign currency convertible bonds (FCCBs). The company will also issue 1.3 million warrants to promoters and 400,000 warrants to public at Rs 105 each.

Shares of the company gained Rs 2.4, or 2.23% to settle at Rs 110.1. The total volume of shares traded was 23,172 at the BSE. (1.56 pm, Monday)

Punj Lloyd - Buy with a 1 Yr Horizon

Moving up the value chain: One of the significant achievements for Punj Llyod Ltd (PLL) over the years has been its increasing average order size. PLL started with an average order size of $30 million that has grown to $130-140 million, and the company intends to increase it to $250 million. We believe higher order size would improve the margins of the company and also make it a pre-qualified player for larger and more complex orders.
SEC turnaround—a key positive: PLL acquired Sembawang Engineers & Constructors (SEC) in June 2006. SEC's acquisition has added to the expertise of PLL in the field of oil & gas, airports, jetties, MRT/LRT, and tunneling. SEC has traditionally operated at lower margins, however the new orders are booked at healthy margins. Further, the company expects to execute all the legacy orders of SEC over the next 18-24 months. We expect, this will improve SEC's operating profit margin (OPM) from 3.5% in FY2008E to 7% in FY2010E.
Order book—more the merrier: PLL has had a spectacular flow of orders, with orders growing from Rs3,240 crore at FY2005 end to Rs15,944 crore (including Rs4,900 crore for SEC) by FY2007 end. In H1FY2008 the company bagged orders worth Rs2,070 crore. The company has a healthy order backlog of Rs14,852 crore, which is 2.9x its FY2007 revenues and this we believe imparts strong visibility to the earnings of the company.
Acquisitions—help plugging and bridging gaps: PLL is the second largest engineering, procurement and construction (EPC) company in the country. Acquisition of SEC and Simon Carves has helped PLL plug gaps in its offerings and increase its addressable markets. Post acquisition, PLL has considerably bridged the gap making it more competitive against Larsen and Toubro (L&T), the largest EPC player in the country.

FII selling spree continues

Outflow of Rs 515.80 on 20 December 2007

Foreign institutional investors (FIIs) sold shares worth net Rs 515.80 crore on Thursday, 20 December 2007, compared to their selling of Rs 1092.50 crore on Wednesday, 19 December 2007.

FIIs outflow of Rs 515.80 crore on 20 December 2007 was a result of gross purchases of Rs 2561.20 crore and gross sales Rs 3077 crore. The 30-share BSE Sensex rose 70.61 points or 0.37% to 19,162.57 on that day.

FII inflow in December 2007 totaled Rs 906.30 crore (till 20 December 2007). FII inflow in calendar 2007 totaled Rs 66,813.60 crore (till 20 December 2007).

There are a total of 1,213 FIIs registered with the Securities & Exchange Board of India (Sebi).

REL, RPL and RNRL December futures at premium

Turnover in F&O segment rises

Nifty December 2007 futures were at 6009.50, at a premium of 24.40 points as compared to the spot closing of 5985.10.

The NSE's futures & options (F&O) segment turnover was Rs 80,577.10 crore, which was higher than Rs 73,067.55 crore on Thursday 20 December 2007.

Reliance Energy (REL) December 2007 futures were at premium, at 2071, compared to the spot closing of 2063.

Reliance Petroleum (RPL) December 2007 futures were at premium, at 217.85, compared to the spot closing of 216.55.

Reliance Natural Resources (RNRL) December 2007 futures were at premium, at 168.90, compared to the spot closing of 168.10.

In the cash market, the S&P CNX Nifty gained 218.60 points or 3.79% at 5985.10.

Monday, December 24, 2007

Govt. asks investors to be cautious

The government of India has asked the investors who intend to invest their money in IPOs to check with the Ministry of Corporate Affairs on issues like the promoters` track record and regulatory compliances.

Similar alerts were earlier issued by the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), who had warned the investors not to be swayed by fraudulent tips and stock recommendations promising high returns.

The ministry said information like master data of companies, details on director and documents like annual returns and balance sheets as well as a list of vanishing companies are available on its website.

It said that in order to get an overview of the company, investors should compare the financial results and performance of the company over the last 3-5 years.