Indian stock market morning report by Keynote Capitals (October 7, 2008, Tuesday, 6.00 a.m. GMT)
Economic and Corporate Developments
- The rupee weakened further, dipping below the 48 per USD for the first time since January 2003. It was at 48.01/48.02 per USD. Oil prices too dipped to below $90, an 8-month low.
- The RBI has cut CRR by 50 basis points to 8.5% to ease liquidity. The move will be effective from October 11 and will inject Rs20000Cr into the system.
- In a move that can bring some relief to the harried markets, Sebi has removed restrictions on issuing participatory notes (P-notes) where the underlying asset is a derivative. Sebi also scrapped a rule as per which P-notes could only account for up to 40% of the assets held by a foreign fund.
- The economic slowdown is getting reflected in tax collections. Net direct tax collections grew 32.5% in the first six months of FY09, slower than the 40% growth in the same period last year, due to moderation in advance taxes paid by corporations and individuals.
- The 13% fall in SAP’s shares in the US can be a cause of concern for Indian IT companies like Infosys, Wipro and Satyam. SAP AG, the German software giant warned that its sales will likely suffer due to the current economic malaise.
- Crisil has lowered the outlook for three public sector banks, viz., Canara Bank, Corporation Bank and IDBI Bank, from stable to negative, since their resource profile has weakened further. This has been attributed to a substantial rise in borrowing costs and a decline in current and savings account (CASA) deposits.
- Infomedia India will consider merging I-Ven Interactive Ltd. with itself and spin off the printing division.
- Thermax has won a Rs450Cr order for setting up a 60MW captive power plant for a green field integrated steel complex in Andhra Pradesh, on a turnkey basis.
- Era Infra Engineering has been awarded a number of contracts worth Rs785Cr during the Q2FY09.
US markets overnight
The Dow Jones Industrial Average ended down 3.6%, closing below the 10000 mark for the first time in 4 years on fears that the credit crisis is spreading its tentacles across global markets. The Fed tried to ease the pain by making 28-day and 84-day cash loans available to banks. That makes total of $900bn in credit potentially outstanding over year end. But still US markets didn't find much respite from this. The fears of financial crisis spread to France which proposed an emergency G8 meeting which increased speculation that global central banks may make a coordinated inter-meeting rate cut. There were concerns that more bailouts of European financial institutions are needed after German government stepped in to prevent collapse of property lender Hypo Real Estate. Global growth concerns lead to a decline in crude oil price by 5% to $89.15/ barrel.
Views on markets today
Asian markets fell sharply this morning, after deep losses in the US markets. The Strengthened yen (JPY) pushed the Nikkei dropped below the 10,000 level for the first time since December 2003. The RBI and Sebi have announced few steps to reduce the liquidity crunch in India. While RBI reduced CRR by 50bps, Sebi eased norms on Participatory Notes (PNs). While we may expect a relief rally on account of these measures, we believe profit taking may happen at higher levels, leading to the indices ending lower than yesterday’s levels.
Technical view
Yesterday was yet another bear dominated day. After opening lower with a gap, the Sensex could not recover for the entire day and closed with a loss of 5.8%. Technical indicators, particularly medium-term indicators such as MACD indicates weakness may continue for the medium term. However, oversold short-term indicators viz., Stochastics and Williams %R indicate short recovery for next 2-3 days. We advise investors to avoid long positions and partially sell shares on every upside. Resistance at 12560 is very crucial while support near 11000-11300 is important.
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Indian stock market daily morning report (February 09, 2010, Tuesday)
The Sensex bounced back from the early slide yesterday, closing with marginal gains. The Government’s forecast that the economy would grow by 7.2% this fiscal year, reinforcing expectations of strong industrial growth, along with positive European markets helped markets recover. Most of the buying was seen in capital goods, banking and real estate stocks, whereas metal and auto stocks witnessed selling pressure. Market breadth was marginally weak at around 0.92x. FIIs sold equities worth Rs9.35bn, while domestic institutions bought equities of Rs3.8bn.
Indian stock market and companies daily report (February 09, 2010, Tuesday)
The benchmark indices logged marginal gains after swinging sharply in highly volatile trade. IT stocks played the lead role in the recovery; however, metal pivotals remained subdued, as metal prices fell on the LMEX. Telecom stocks advanced on bargain hunting. Rate-sensitive banking shares recovered from the day's low, while auto stocks were mixed. The BSE Sensex and the NSE Nifty rose by a marginal 0.1% each. The BSE Mid-cap and Small-cap indices were down by 0.1% each. Among the front-liners, Bharti Airtel, RCOM, ONGC, HLL and M&M were up by 2-3%, while Tata Steel, Hindalco, Wipro, Jaiprakash Associates and NTPC were down by 1-4%. In the mid-cap segment Chambal Fertilisers, Nagarjuna Fertilisers, Core Projects, Kansai Nerolac, Procter & Gamble were up by 5-7%, while Indraprashtha Gas, Gujarat NRE Coke, Torrent Pharma, Spice Communications and REI Agro, were down by 4-9%
Indian stock market daily morning report (February 08, 2010, Monday)
The Sensex continued its downward trend last Friday, closing below the 16,000 mark on concern over Europe's sovereign debt, indications of weak US jobs data and a fall in commodity and energy prices. Persistent selling pressure was seen across the board and all sectoral indices closed negative with real estate, metals and capital goods stocks were the worst affected. Auto stock also declined after a government-appointed panel recommended additional duty on diesel-powered vehicles. Indian markets were open for a couple of hours last Saturday, for the purpose of software testing. Market breadth was extreme weak at around 0.21x as investors sold large cap stocks. FIIs sold equities worth Rs17.2bn, while domestic institutions bought equities of Rs11.68bn.
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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.
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Indian auto sector monthly update (January 2010), 5 February 2010
Indian Banking Report January-February 2010, 4 February 2010
Indian telecom monthly update (December 2009), 3 February 2010
Third quarter review of Indian monetary policy 2009-10, 1 February 2010
Indian Banking fortnightly report (January 2010), 18 January 2010
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