Uranium
1 September 2010 | We have stated many times in the Clarion that we are a long-term bull on uranium and uranium stocks. There was a recent flurry of price activity in uranium stocks in anticipation that the recovery in the price of uranium was finally at hand. This flurry ended abruptly last week as the price of U3O8 actually fell by US$0.50/lb. Uranium stocks have been out of favour for so long that it will not take much to send them upwards. If the next price posting (expected shortly) is an uptick, uranium stocks could continue their advance. If the uptick is sizable, uranium stocks could soar.
Bernanke Pledge on Economy Gives Some Relief to Oil Prices
30 August 2010 | Oil prices recovered some lost ground Friday after Federal Reserve chairman Ben Bernanke said the Fed stands ready to do whatever it takes to support economic recovery.The benchmark West Texas Intermediate October futures contract gained 2.5% on Friday, settling at $75.17 a barrel and wiping out losses from the beginning of the week. The expiring September contract closed at $73.46 a week ago.In a widely anticipated speech Friday morning, Bernanke stopped short of announcing new measures to inject money into the economy but made it clear that the central bank was monitoring the situation closely and would act if necessary to prevent a deflationary spiral.
Energy and Security Issues in the Red Sea Transforming as “the Age of Gas” Begins in Earnest
27 August 2010 | Major new energy issues are about to transform still further the strategic balance of the Horn of Africa and the Red Sea, with foreseeable consequences for the global energy market over the coming decade. Soon-to-be-evident new wealth in the Red Sea/Horn of Africa region will transform the intensity of conflict there, which in turn will affect not only the region, but the world’s most important trading route: the Red Sea/Suez sea line of communication (SLOC).
International Sanctions Inflicting Pain At Gas Pump, Stalling Energy Projects
26 August 2010 | Although the Iranian government insists that countries like China and Russia can make up lost Western investment in the petroleum sector, rising gas prices and stalled energy projects are signs that the regime is beginning to buckle under international sanctions.The United States, Canada and Australia, as well as the United Nations and the European Union, have stiffened financial penalties over the last several weeks against Iran for its nuclear program, which Tehran argues is meant for civilian uses like power generation and medical purposes.In recent weeks, Tehran has begun to feel “a lot of pressure” on the gasoline front, said Houchang Hassan-Yari, a professor of international relations at the Royal Military College of Canada in Kingston, Ontario. The government is now curbing from 100 liters to 60 liters (roughly 26.4 gallons to 15.9 gallons) the amount of subsidized gas consumers can buy each month, Hassan-Yari told OilPrice.com.
Oil Versus Natural Gas
24 August 2010 | It has been almost four months, just after the BP blow-out, since we last looked at our graph that tracks the price of crude oil versus that of natural gas. We started our weekly tracking in May 2007 and, since then, the average ratio over this time has been, oil:gas, 14.48:1. Since the March 2009 market lows, the average ratio has been 17.94:1. The ratio currently (August 20, 2010) is 17.53:1. The average price of oil since May 2007 is US$80.73/bbl and, since March 2009, it is US$71.50/bbl. The figures for natural gas are US$6.06/mmcf and US$4.12/mmcf. Current prices are US$73.46/bbl and US$4.19/mmcf.
Oil Prices Spiral Downwards as Economic Gloom Intensifies
23 August 2010 | Crude oil prices continued their downward spiral during the week as new data confirmed that U.S. economic growth is slowing.The benchmark West Texas Intermediate contract settled 2.6% lower for the week on Friday, at $73.46 a barrel compared to the $75.39 close a week ago, itself a decline of 7% from the previous week.News Thursday of an increase in jobless claims and a slowdown in manufacturing activity in the key mid-Atlantic region knocked both stock prices and commodity prices.
Baltic Dry Index
17 August 2010 | In our July 5th Clarion, we highlighted the Baltic Dry Index which, at the time was plummetting. It continued to do so for another 10 days, which marked 35 straight days, a record, that this Index declined.The Baltic Dry Index (“BDI”) measures the amount of dry cargo circumnavigating the globe and, thus, is a good indicator of the amount of global trade being conducted. It tracks the cost of shipping raw materials around the world in ships of various sizes and, as such, it has become an important indicator of global production and trade. Key commodities being shipped include iron ore, coal, and grain, i.e., dry goods.
“Promised Land?!”
17 August 2010 | The Edgar Winter Group was playing on The Street of Dreams last week, and the song was Free Ride, as the equity markets have certainly been “confused on which way to go.” Indeed, the McClellan Oscillator became extremely overbought a few weeks ago, which is why I have followed a neutral short-term trading approach to the equity markets. That said, I believe the downside is “measured” given that the earnings yield on the S&P 500 (SPX/1079.25) is 8.1% (based on current forecasts), versus an 8.3% yield for the high yield bond universe, for the narrowest spread e-v-e-r! Such metrics should afford select blue chip, dividend-paying stocks an attractive risk/reward ratio for investment accounts. Interestingly, that is the current strategy of legendary investor Jeremy Grantham.
They Died Before the Oil Ran Out
17 August 2010 | There is an open secret in the oil industry that dare not speak its name: peak oil. Well, two did speak its name and gained no acclaim for it. One, M. King Hubbert, died years ago. The other and the most controversial, Matthew Simmons, died at his Maine summer home Aug. 8.
Crude Oil Prices Fall Below $80 Again as Officials Anticipate Slower Growth
16 August 2010 | Crude oil prices slumped below $80 a barrel again this week as the Federal Reserve and other official forecasters took a dimmer view of the economic recovery. Friday’s closing price for the benchmark West Texas Intermediate futures contract of $75.39 a barrel marked a retreat from the contract’s short-lived foray outside the $70 to $80 a barrel range it has been trapped in for months. Prices fell nearly 7% from last Friday’s close of $80.70 a barrel.
Sector Performance
13 August 2010 | We are updating, below, the table that we provided in our Clarion of May 25, 2010. It shows the 2010 highs that occurred in April in the various Canadian sector indexes as well as the major market indexes. Since then, after the 15% overall market pull-back, the major indexes and most of the sub-indexes are struggling to regain the highs. As expected, defensive sectors have performed the best: Consumer Discretionary has led the pack, with Utilities, Telecommunications, and Consumer Staples out-performing.
Wheat
13 August 2010 | In our June 28th Clarion, when discussing the outlook for various commodities, I stuck my neck out and said, “For the future, my bet is on wheat, currently depressed because of poor weather affecting the growing season.” That reference was primarily aimed at the extremely wet conditions that prevailed in the westeren Canadian prairie provinces. This was in contrast to generally good crop conditions existing in the USA. However, there was small, but growing, evidence of concerns about global wheat production. The drought in Russia and the eventual wheat export ban from that country beginning mid-August and scheduled to last until the end of the year, has sent wheat futures soaring. Ukraine and Kazakhstan also are experiencing drought conditions. The situation in perennial drought-ridden Western Australia, which typically provides around 40% of Australia’s wheat exports, looks bleak too as insufficient rain is expected to lead to a significant drop in production this year.
Reliance Industries Ltd is set to drive its future business growth
13 August 2010 | Since its 36th Annual General Meeting (AGM) held on 18th June this year, Mukesh Ambani, the Chairman and Managing Director of Reliance Industries Ltd or RIL, has unveiled a number of business plans that could well be touted as larger than any of the world’s biggest non-government expenditure plans. In his annual speech, Mukesh Ambani shared his ambitious business plans with his shareholders. He said, “It took three decades for Reliance to create an enterprise value of over $80 billion. I feel hopeful and confident that Reliance can accomplish value creation of a similar magnitude in less than a decade.”
The Insurance regulator’s new guidelines have re-established ULIPs as a long-term investment vehicle
13 August 2010 | The spat between the capital market regulator, Securities and Exchange Board of India (SEBI) and the insurance regulator, Insurance Regulatory and Development Authority (IRDA) that lasted for a good two months, ended in the fag end of June. The government of India’s ruling was in favour of the insurance regulator. The authorities have squashed SEBI’s plea and announced that IRDA will henceforth be the sole regulator of all insurance products. The tussle of the titans in the financial world, however, had a silver lining. After its victory over SEBI, IRDA decided that unit linked plans (ULIPs) that account for more than 50% of the insurance business sales and had caused the stir in the first place, should indeed be given a facelift. The insurance regulator has stipulated that ULIPs launching after 1st Sept ’10 will have lower charges, guarantee returns and be sold with larger insurance cover. The new norms are aimed at re-establishing ULIPs as a long-term investment vehicle, which has been the purpose all along.
Investors must read the financials well before taking an investment decision
13 August 2010 | The government’s plan to divest its stake in different Public Sector Undertakings (PSUs) is slowly taking shape. Recent media reports state that the government has cleared the decks to reduce its share in Hindustan Copper Ltd (HCL) and go in for a new initial public offering (IPO) in case of Coal India Ltd (CIL). Both HCL and CIL are uniquely placed in their respective industries as they are among the largest in their sectors with strong financials. However, investors must be cautious about these companies when it comes to their public issues – both secondary and primary.
India is poised to be in the forefront of outsourcing by pharma companies
13 August 2010 | Indian companies have made great strides in the global arena across different business segments. They have also demonstrated their ability to play the leader’s role in each of the segments. Globally, it has been observed that India is emerging as a preferred destination for pharmaceutical companies’ outsourcing venture of drug discovery, clinical research and contract manufacturing functions. According to a study by PriceWaterhouseCoopers (PwC) on the changing dynamics of pharma outsourcing to Asia, India is being recognized as the best outsourcing pharma destination, followed by Korea and Taiwan.
An Uncertain Homecoming: BP’s Return To Libya Decades After Gaddafi’s Revolution
12 August 2010 | After nearly 40 years, BP is returning to Libya amid widespread controversy about an alleged link to the Lockerbie bomber’s release and fears about a potential oil disaster in the Mediterranean Sea. Yet despite the oil giant’s enthusiasm, its future in Libya – a country boasting the largest crude oil reserves on the continent -- may end up as murky as competitors that have ventured there. Three years ago, BP signed a $900-million exploration and production deal with Libya, decades after Muammar Gaddafi’s government nationalized 100 percent of the oil company’s holdings. BP, which has not been involved in the country since 1971, announced in late July that it would begin drilling in the western part of Libya and in the deep waters off the coast in a matter of weeks.
Sector Performance
12 August 2010 | We are updating, below, the table that we provided in our Clarion of May 25, 2010. It shows the 2010 highs that occurred in April in the various Canadian sector indexes as well as the major market indexes. Since then, after the 15% overall market pull-back, the major indexes and most of the sub-indexes are struggling to regain the highs. As expected, defensive sectors have performed the best: Consumer Discretionary has led the pack, with Utilities, Telecommunications, and Consumer Staples out-performing.
“Deflation?!”
10 August 2010 | I read Peter Boockvar’s prose after reading a debate between two top economists. One is in the deflation camp and the other is not. To be sure, I was quite impressed with Peter’s cogent comments against deflation. Indeed, deflation has always been a “bad bet,” except for the 1930s. Currently, however, deflationary concerns are swirling on the “street of dreams;” and, I don’t believe them. I think the present-day policies will actually prove inflationary. While it’s true transfer payments to middle/lower-income recipients are not going to be all that simulative (or inflationary) given falling housing prices, that still does not spell deflation. In such an environment recipients will probably not spend the transfer payments, but rather save them to offset the negative wealth effect of lower housing prices. A better strategy would be making “transfer payments” to a program like the WPA of the 1930s. Recall, the Work Progress Administration was crafted in 1935 to employ the unemployed with the objective of putting people back to work by building infrastructure projects. Such operations have a far greater “multiplier effect” (for every $1 spent you get a $2+ impact) in the economy.
The Enduring Middle East Strategic Framework Begins to Emerge as Iran Surges, and the US Resiles
9 August 2010 | The lingering impact of August 3, 2010, clash on the Israeli-Lebanese border lies in the greater context of, and wider strategic dynamics in, the Middle East. These aspects were highlighted by HizbAllah Secretary-General Hassan Nasrallah in his speech later that day.
Clash on Israel-Lebanon Border Holds Potential for Strategic Escalation
5 August 2010 | The August 3, 2010, armed clash along the Israeli-Lebanese border was a significant strategic incident. On Thursday, July 29, 2010, Israel notified UNIFIL that a few Israeli soldiers would be crossing the security fence in order to cut a tree and remove a few shrubs in Israeli territory but near the Blue Line (the actual border between Israel and Lebanon). This foliage blocks the view of Israeli security cameras positioned deep inside Israel. Israel also notified UNIFIL that these soldiers would be escorted by a small patrol which would stay south of the security fence.
Spies, Lies and Goodbyes – Part 1
4 August 2010 | The killing of former Lebanese Prime Minister Rafik Hariri was until recently widely believed to have been perpetrated by the Syrians, or at least on their behalf. It was the assassination of Mr. Hariri that led to the forced departure of Syrian troops from Lebanon as a result of international pressure and wide-ranging opposition from the Lebanese street.
“Don’t Worry, Be Happy”
4 August 2010 | Clearly the equity markets were “happy” last month, for after losing 8.2% in May, and 5.4% in June, the S&P 500 (SPX/1101.60) gained nearly 7.0% in the month of July. Despite the often mentioned parade of negative indictors “tripped” during the June and May mauling, I was bullish at the beginning of July, for as stated, “The equity markets are the most oversold they have been since the capitulation alert of October 2008.” Indeed, during the first week of July less than 5% of the stocks in the SPX were above their respective 50-day moving averages (DMAs), which is a VERY oversold reading. Moreover, my sense was that second quarter earnings reports were going to surprise on the upside. And sure enough, half way through earnings season ~78% of the S&P 500’s companies have bettered their earnings estimates, while two out of three companies are beating revenue estimates. My hunch is the balance of the earnings reports will do the same.
International Community Presses Juba, Khartoum On Sudan Referendum
2 August 2010 | The international community is pressuring the Juba and Khartoum governments to speed up preparation for a vote on South Sudan’s future – a decision that will be dominated by the fate of coveted oil resources -- but an expert on the African country criticizes the lack of understanding about Sudan. The referendum, scheduled for January 2011, is widely expected to result in the south parting ways with the north after years of bitterness and war.
Cloudy Economic Outlook Keeps Crude Oil Trading in Narrow Range for Week
2 August 2010 | Crude oil futures continued to trade in a very narrow range, unable to cross the $79 a barrel threshold even though they ended 4.4% higher on the month. The benchmark West Texas Intermediate rallied with the stock market late Friday to finish the week at $78.95 a barrel, virtually unchanged from $78.98 a week ago, after dipping just below $77 a barrel earlier in the week. End-of-month trading might have accounted for some the late gains, analysts said.
Oil Prices Show Little Momentum for Breaking Through $80 Barrier
28 July 2010 | Prices of crude oil futures slumped below $79 a barrel on Friday despite a stock market rally and the rise of Tropical Storm Bonnie in the Gulf of Mexico. The downward turn on Friday followed a sharp gain Thursday amid positive corporate earnings reports that some saw as a signal of economic recovery and the brewing tropical storm.
Middle East Oil Producers Might Consider BP Investment – to Diversify
28 July 2010 | With BP poised to move on from the Gulf oil spill with a new chief executive, the beleaguered London-based company might look attractive to Middle East sovereign wealth funds after all. It would be a parting legacy from outgoing CEO Tony Hayward if his efforts earlier this month to court the funds in Abu Dhabi and other oil-producing countries were to bear fruit.
One for the Road
28 July 2010 | I have often opined that asset allocation is the key to bringing alpha (read: outperformance) to portfolios. I have also stated I am not dogmatic about asset allocation. For example, I have not owned bank stocks for eight years. I “missed” them going down and have “missed” them going up. Obviously, I agree with the Boeckh’s more “dynamic approach to asset allocation.” To be sure, for years I have advised participants to think of investing for the future as an automobile, conveying investors to their financial goals. The investment portfolio is its motor, the asset allocation model is the fuel mixture, and the invested assets are the fuel. As John Valentine, of Valentine Capital, notes:
Head & Shoulders Bottom?
27 July 2010 | Technical analysts sifting through their tea-leaves are having fun trying to figure out which way the market is going to go. Fundamentalists (I’m not referring to a religious cult) are wondering whether earnings or economics are going to be the catalyst to move the indexes out of their current range-bound lethargy.
Earnings Season
23 July 2010 | Q2 earnings announcements are now in full swing. The market seems to be relying, almost exclusively, on these earnings pronouncements being good, and thus being the catalyst to propel the market forward. The major North American indexes are stuck just under their critical 200-day Moving Averages. A slate of good earnings should cause the indexes to get back on an upswing. A chorus of poor earnings could provide downside risk.
The Strategic Ramifications of a US-Led Withdrawal from Afghanistan
23 July 2010 | The United States and the NATO allies are preparing to disengage and soon withdraw from Afghanistan and even the most vocal advocates of the "long-term commitment" do not anticipate more than five years of active US and NATO involvement. All the local key players — in Kabul, Islamabad, and countless tribal and localized foci of power — are cognizant and are already maneuvering and posturing to deal with the new reality.
Securing Uganda’s Oil Industry Urged But Repeat Terrorist Attacks Seen As Slim
22 July 2010 | Although the Ugandan government can boost the security of its fledgling oil industry from future terrorist attacks that may scare away certain investors, Africa analysts doubt violence replicating the twin bombs that struck during the World Cup final is likely. Somali militant group al-Shabab claimed responsibility for explosions that tore through the capital Kampala July 11 and killed more than 70 people. Infuriated over Uganda’s participation in the African Union Mission in Somalia – which may grow if Ugandan President Yoweri Museveni gets his way – al-Qaeda-linked al-Shabab has pledged more terror.
Don’t Bet the Farm!
21 July 2010 | I am familiar with cards, dice, and betting in general. While in college I supplemented the monthly stipend from my parents with the winnings from playing cards. The bluffing, the betting, the showdown was all great drama to me. Back then I learned the “one chip” rule. To wit, each time I won two chips I would put one of them into my pocket, not to be used again that night. When I entered this business in 1971 I found that same kind of strategy useful in managing risk. In the stock market’s case, while the human natures of fear, hope, and greed still play a large roll, I tended to substitute card players with the personalities of stocks, the market makers, the Fed, Washington, and the politicians. Using such strategies I found that if you do your homework, and manage the risk, the odds of success in the markets are much better than a card game. When you lose in the markets at least you get back most of your money (if you manage the risk) and the government shares in a portion of your losses via the capital gains/capital losses tax system. In a card game it tends to be basically all or nothing with each hand.
Batteries Are the Shocking Truth about Electric Cars
20 July 2010 | President Barack Obama flew to Holland, Mich., on Thursday to attend groundbreaking ceremonies for a new lithium-ion battery plant, which the White House advertised as an example of federal stimulus grants at work and a gateway to a clean-energy future.
Why Not Another World War?
20 July 2010 | There is overwhelming agreement among economists that the Second World War was responsible for decisively ending the Great Depression. When asked why the wars in Iran and Afghanistan are failing to make the same impact today, they often claim that the current conflicts are simply too small to be economically significant.
Stock Prices, Economic Data Buffet Crude Oil Futures in Lackluster Trading
19 July 2010 | An unexpectedly sharp drop in a key consumer confidence index sent stocks plummeting on Friday and drove down prices for crude oil futures so that the benchmark contract finished the week virtually unchanged from last Friday. The near-month contract for West Texas Intermediate settled at $76.01 a barrel on Friday, compared with $76.09 a week ago.
Government Policies Pushing Towards Depression
16 July 2010 | Despite several quarters of rising GDP, and the upbeat exertions of Administration spokespeople, the National Bureau of Economic Research (NBER) has yet to announce the recession is over. Their reluctance is well-founded. It is beginning to dawn on even the more optimistic analysts that the tepid growth we have seen over the past three quarters is only an interlude in an otherwise grave and prolonged recession. Moreover, the respite will cost dearly as the United States has racked up a generation worth of debt for dubious benefit.
A Man Lived by the Side of the Road ...
15 July 2010 | Depressions, and recessions, are even more difficult to predict than the stock market. Yet, most economists agree the recession ended around this time last year. Currently, the question du jour is whether the economy is going to slip back into recession; aka ...the dreaded double-dip. While there is always the chance of a double-dip, they are pretty rare. For example, using industrial production as a “measuring stick,” there have only been three, out of the 38 recessions since 1880, which qualify as double-dips. Interestingly, all three of those double-dips were characterized by a mild first recession followed by a more severe secondary recession. Plainly, what we experienced in the 2007 – 2009 recession was anything but mild. Accordingly, I continue to think the odds of another recession are low. There is the risk, however, like the man “who lived by the side of the road,” we “talk” ourselves into a recession.
Isolation Musings
14 July 2010 | I am writing this lying in a hammock in Killarney Park, one of Ontario‟s most beautiful provincial parks, and made famous by Canada‟s Group of Seven. The sun is shining, there is a gentle breeze blowing, and I am looking out at the white-quartz La Cloche Mountains. The world of High Finance seems a long way away. I wonder, because I do not know, what happened in the markets these last few trading days. (Nor do I know who won the World Cup.) Right now, in this idyllic nature‟s bliss, I couldn‟t care less. Funny, isn‟t it, that watching the market, minute-by-minute, hour-by-hour, day-by-day, can be excruciatingly intense. But here, in the absense of radio, television, newspapers, and, most of all, cell-phones, it is all about relaxing. Really, nothing matters. (However, by the time you read this, I will have been transported back to reality.)
Crude Oil Tracks Stocks Upwards to Close Week Above $76 a Barrel
12 July 2010 | Crude oil futures finished the week on a positive note, tracking stocks upward after hitting the low for a month earlier in the week.
The benchmark West Texas intermediate contract settled Friday at $76.09 a barrel, up 65 cents on the day. On Tuesday, the contract declined for the sixth session in a row, closing at $71.98, its first dip below $72 in a month.
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World stock markets daily report (September 02, 2010)
A hump day rally sparked by strong Chinese PMI and Aussie GDP data was followed up by much better than expected US ISM and the sentiment was for sure “RISK-ON” this was also helped by WSJ article about further stimulus from Obama administration and rumours of massive $6bn asset reallocation trade out of German bunds (the bond bubble) into S&P 500 futures as it was the start of a new quarter.
Indian stock market daily closing report (September 02, 2010)
The markets traded within a tight range after the positive momentum witnessed for two days and ended with modest gains. All the major sectoral indices ended on a very flat note. Sugar counters witnessed a significant spike on decontrol reports. The Sensex closed at 18,238 up 34 points and the Nifty was at 5,486 up 14 points after making an intra-day high of 5,513. The Mid cap and Small cap indices were up by 0.78% and 1.11% respectively. The breadth of the market was positive and the total turnover recorded at Rs.1,02,680 Cr. The Sept future ended with 3 points discount
World stock markets news summary (US, UK, Europe, Asia) (September 02, 2010)
Nationwide House Prices SA (Aug) M/M -0.9% vs. Exp. -0.3% (Prev. -0.5%); NSA (Aug) Y/Y 3.9% vs. Exp. 4.9% (Prev. 6.6%) (RTRS) UK house prices fell the most in six months in August as increased supply of property gave buyers more bargaining power, according to Nationwide Building Society.Britain’s deficit is constraining public finances, says IMF report. (Independent) Britain’s public finances remain “constrained” and among the most precarious of the major advanced economies, the International Monetary Fund (IMF) warned yesterday. Ranking nations by their “fiscal space” – the insulation that they have against further unforeseen shocks to their economic systems – the IMF said the UK was only one notch above those countries most commonly thought of as being bust.
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Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang, 8 December 2009
JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
Surgutneftegas: Currency rates are putting away the dividends..., 26 November 2009
We have revised our model of Surgutneftegas. The reason for that was the output of the 3Q 2009 report, correction of our suppositions of the company’s future development, and also the postponing of the target time and evaluation one year forward. Particularly, in our model of Surgutneftegas we have corrected the former forecast of income for the current year towards reduction: on EBIT – by 2.2%, on the net profit – by 21.5%. Mainly that happened due to the corrections on the operating estimates, and also due to the continuing strengthening of Russian ruble, which, considering significant dollar liquidity of the company, turns into negative currency exchange. Due to the negative currency exchange precisely For the second quarter in a row Surgutneftegas shows low level of the net profit. The fourth quarter, as we see it, will not make an exception and we expect negative currency exchange similar to the ones in the third quarter.
Gazprom: Having passed the bottom, 23 November 2009
We have revised our estimation of Gazprom’s shares. The reason for up-dating the company’s model was the report by IAS for 1H 2009, the budget draft for the next year and corrections of WACC method calculation. The provided financial report of the gas monopoly totally brought no surprises. As it has been expected, the second quarter was worse than the first one and likely was the weakest within the whole year. In 1H 2009 the financial estimates were affected by the decline of the gas sale at all markets by 22.3% average, and by the reduction of the retail price of gas by 9.6% in the state of the far abroad and by 24% in Russia. As a result within the six months of the year 2009 sales slipped by 24.1 bn USD or by 32.8% and formed 49.285 bn USD, operating profit and EBITDA showed reduction by 56.7% and 52.6% respectively and formed 12.98 bn USD and 16.18 bn USD.
Cox and Kings IPO review, analysis and recommendation, 18 November 2009
Cox and Kings proposes to make its IPO in the price band of Rs316-330/share, at a face value of Rs10 each, and to issue 1.85cr shares, of which 30.5lakh shares are offered for sale by Lehman Brothers Opportunity, Deutsche Securities Mauritius and Merrill Lynch Capital Markets Espana. Therefore, the fresh issue by the company will be to the extent of 1.55cr shares. The company plans to use the proceeds for debt repayment (Rs129.6cr), acquisitions and other strategic initiatives (Rs150cr), investment in overseas subsidiaries (Rs62.5cr), and investment in corporate offices and upgrading its existing operations (Rs60cr).
| | News |
Tandy Leather Factory, Inc. Reports August 2010 Sales Up 7% Over August 2009, 3 September 2010
UTi Worldwide Reports Fiscal 2011 Second Quarter Results, 3 September 2010
SectorWatch.biz: An Energetic Chorus of Optimism, 3 September 2010
Duckwall-ALCO Stores Reports August Sales Results, 3 September 2010
On Track Innovations, Ltd (OTI) to Present at Rodman & Renshaw Annual Global Investment Conference, 3 September 2010
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