Speculators: 01/04/09

Reliance Infrastructure has formed a triple top between 670-680. Finding it difficult to cross this level. If it manages to break 680 on the upside it can head upto 740 in short term.

F&O Outlook: Nifty may touch 200DMA this week

The Nifty witnessed profit-booking above 3,400 levels, but closed with 40 points gains at 3,382 on buying in key index heavyweights such as Reliance Industries (RIL), ICICI Bank, State Bank of India (SBI) and Tata Steel. The Nifty is now expected to target 200DMA (daily moving average) of 3,445 and this may happen this week. The Nifty has been making higher highs and higher lows in the last three trading days, which indicates that the current rally is likely to sustain. The start of an uptrend is signalled when the index makes a higher low, followed by a rally above the previous high. The Nifty made a high of 3,357 and a low of 3,149 on April 8, and on April 9 the index made a high of 3,401 and low of 3,307. Today, the Nifty made an intraday high of 3,418 and low of 3,334. A bull trend is identified by a series of rallies where each rally exceeds the highest point of the previous rally. The intraday short-covering in the Nifty April futures in the last three trading sessions suggests further up move for the index in the near future. The Nifty April futures closed with a premium of 8 points and shed an open interest (OI) of over 2 million shares intraday, indicating short-covering by bear operators.

F&O Outlook: Nifty may touch 200DMA this week

11 April 2009

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DLF customers take to Gandhigiri to get money back!!

Chennai: Customers who have booked flats in New Town Heights project, being developed by country’s largest real estate developer DLF Ltd, at Gurgaon, near Delhi, is planning to take Gandhigiri route to show their “disappointment” in executing the project. Around 200-300 DLF’s customers are expected to gather at DLF’s office tomorrow and planning to give out roses along with the exit letters to the company. Meanwhile the company which is facing similar problem from its Chennai customers on the Garden City project has agreed to pay back the booking amount to its customers between April 30 and September 30, 2009 for those who have given exit letters so far. The Gurgaon group, which consists of around 700 customers who have booked flats in New Town Heights project at Gurgaon, are planning to go with bouquets of flowers with exit letters to DLF’s office on Saturday, said a core member of the group who don’t want to be identified. He noted, a recent poll among the members showed that over 70 per cent of them are wanted their money to be refunded since the company has not started any construction work at the project site. The member noted most of the customers paid around 42.5 per cent of the total money. New Town Heights, a residential project of DLF at Gurgaon, was launched in March last year as a mid-range housing project with apartments selling in the Rs45-75 lakh range. The project has around 3,300 apartments, of which around 90 per cent have been sold. DLF on March 25 announced a price cut of 20 per cent for apartments in the New Town Heights project, for both existing as well as new customers. “But the discount is comes with conditions and it is not allowing us to exit at a future date”, said another member. The company also said compensation has been doubled, from Rs 5 psft per month to Rs 10 psft per month. Handing over has been revised with retrospective effect, for 3 years from the date of booking instead of 3 Years from the date of Agreement, a 35 per cent of the Sale Price, has been treated as payment dues as against 42.5 per cent or more whatever was due as per different Sectors. Also 20 per cent discount was offered including Basic Sale Price (BSP) 5 per cent Decrease in cost by way of increase in area by 5 per cent, without any charges for that 5 per cent area increase. 10 per cent timely payment rebate on the Sale Value (excluding government charges) The member added, the core member committee met the company officials including its Executive Director Valsala and General Manager Customer Support Deepak Kapoor on February 21, “but company’s response was poor”. Meanwhile when Business Standard contacted company officials were not reachable. However a mail which has been sent out to the customers by Valsala , copy of which is available with Business Standard, stated that “we have done our best by doing all the above, to keep you happy and satisfied in the project and are also doing our best to start the construction within a month’s time positively. Despite all the above, if you are still not happy to continue, you may exercise the EXIT OPTION”. Meanwhile the company has decided to return booking amounts in full to all customers who want to exit the under-development project. According to a member of the committee, in Chennai project, the company has sent a letter saying it would repay the money between April and September 2009 for the customers who have given exit letters between February 18 and April 9 based on the order of exit letters received by DLF. He noted 560 customers have exit letters. DLF Garden City, launched in January 2008, has around 3,493 apartments and was priced between Rs 31 lakh and Rs 39 lakh, but the company has slashed prices by 10-18 per cent

Gold eases further on lower global cues

MUMBAI: Gold prices eased further on the bullion market for the second successive day on persistent offering by stockists on the back of negative trend in the overseas markets. Silver also moved down further on lack of buying interest from industrial users. Gold prices declined in New York yesterday ahead of the three-day weekend holidays following reducing of its appeal as safe asset on the back of boosting of interest in stocks. Gold for April delivery fell by USD 2.60 or 0.30 per cent to end at USD 882.20 an ounce on the New York Mercantile Exchange. Silver for May delivery was quoted at USD 12.33 an ounce. Turning to the local market, standard gold (99.5 purity) softened by Rs 5 per ten grams to Rs 14,300 from Rs 14,305 yesterday. Pure gold (99.9 purity) also moved down by Rs 10 per ten grams to Rs 14,360 from Rs 14,370. Silver ready (.999 fineness) slipped by Rs 20 per kilo to Rs 21,105 from Rs 21,125.

Indian ADRs: ICICI Bank up 10%, Tata Motors gains 15%

Indian ADRs ended higher. In the banking space, ICICI Bank gained at 10.27% at USD 16.75/share and HDFC Bank was up 6.73%, to USD 69.5. In the telecom pack, MTNL closed 3.89% higher at USD 2.94 and Tata Communication went up 2.87%, to USD 24.02. Among the technology stocks, Infosys Technologies closed 2.8% higher at USD 29.72 and Satyam was up 8.16%, to settle at USD 2.65. Patni Computer shut shop at USD 6.6, up 3.12%. However, Wipro ended 0.45% lower at USD 8.85. Among other stocks, Dr Reddys Labs was up 3.09%, to USD 10.68 and Sterlite Industries went up 7.36%, to USD 8.17. Tata Motors went up 15.06%, to USD 7.64.

Indian IT industry to help in US economic recovery

Washington: India’s information technology industry should start hiring in the US to help in its economic recovery as the US is always going to be its biggest market, the industry association’s head has suggested. The restrictions on H1B visas in the US “absolutely is a concern,” Pramod Bhasin, president and chief executive of outsourcing firm Genpact and the new chairman of the National Association of Software and Services Companies (Nasscom), said in an interview with Forbes Asia. “We’ve met the concerned people in Washington and expressed our views. Any abuse of the visa system must be stopped, and Nasscom will help to do that,” he said. “That said, I believe that we should be hiring in the US and thereby participate in its economic recovery,” Bhasin was quoted as saying. “Several of our companies are already looking to create employment in the US It’s the ideal time to get the best talent.” Asked about Nasscom’s strategy to address the protectionist wave in the US, Bhasin said there’s a lot of protectionist noise today, but the Indian industry “should respond to the reality, not the rhetoric.” “American companies are not going to turn away from global intellectual capital. The US is always going to be our biggest market,” he said. Calling backlash against outsourcing due to layoffs around the world as “a big issue that we’re facing,” Bhasin said Indian “industry isn’t responsible for these layoffs, which have been caused by other factors.” “We’re working with governments around the world to make ourselves heard. We bring real value to global companies, and it would only hurt them if they dispensed with our services,” he said. Asked about the industry outlook for this year, Bhasin said last October they had estimated an annual growth of 13 percent over the next two years after ending the last fiscal year with an overall increase of 16 percent. But that’s “no longer achievable.” “Although we expect to grow at a lower pace this year, our sector will still outgrow other sectors,” despite the recession as “the fundamental premise of our business remains unchanged,” he said. “We see ourselves as part of the solution to the global recession,” Bhasin said noting “that ours is still a small industry; our biggest firm has revenues of only $6 billion. We still have a lot of runway ahead.”

Investors trickle back to Dalal Street

MUMBAI: If financial advisors are to be believed, investors are getting ready to return to the markets. Falling yields in the money market and budding optimism in the stock market are generating a lot of queries from investors. Though most queries haven’t translated into commitments, advisors say there is no doubt about a revival of interest among investors. However, advisors are asking their clients to be a little cautious and not to commit huge amounts at this juncture. “There is definitely some revival of investor interest. Falling yields have given hopes that rates would go down further. This has resulted in renewed interest in debt schemes,’’ says Hemant Rustagi, CEO, Wiseinvest, an investment advisory firm. “For equity too, the sentiment has improved. There are queries about whether to get in, get out and re-enter at lower level these days,’’ he adds. “Except for a few queries about FDs, nobody was showing any interest either in equity or debt till few weeks ago. Now, people are becoming a bit more confident,’’ says an MF agent.According to experts, investors are also influenced by the strong performance staged by equity MFs during current run up in the market. “Some aggressive funds have staged excellent performance . Some schemes which were down 50-60 %, managed to recover 20-25%. When investors witness such a thing, they know they have another chance to make money ,’’ says Rustagi. However, advisors are asking investors to tread with caution. “It is difficult to predict which way the interest rateswould go because of the government’s huge borrowing plan,’’ says an investment consultant. Says Rustagi, “The next quarter is crucial. We have to keep an eye on corporate results and also the elections to be sure about the market.’’

Obama seeks USD 83.4 bn for fight against Qaeda, Taliban

Washington: President Barack Obama has pitched for USD 83.4 billion for military operations to “disrupt, dismantle and defeat” al-Qaeda and Taliban threatening the US from their safe havens along the Pak-Afghan border, asking lawmakers to urgently approve his “last” supplemental funds to fight terrorism. “We face a security situation in Afghanistan and Pakistan that demands urgent attention. The Taliban is resurgent and Al-Qaeda threatens America from its safe haven along the Afghan-Pakistan border,” Obama wrote in a letter to Nancy Pelosi, Speaker of the House of Representatives, seeking early approval for his war supplemental request of USD 83.4 billion. “Nearly 95 per cent of these funds will be used to support our men and women in uniform as they help the people of Iraq to take responsibility for their own future — and work to disrupt, dismantle and defeat al-Qaeda in Pakistan and Afghanistan,” Obama said in his letter yesterday. He assured the Congress that his funding request will ensure that the full force of the US — military, intelligence, diplomatic, and economic power — is engaged in an overall effort to defeat al-Qaeda and uproot the safe haven from which it plans and trains for attacks on the US and its allies.

Weekly Review for the Week April 13th - 17th April 2009

We said ‘Technically the trend is still intact up and our target of 10708 stands valid and if the momentum continues then I would not be surprised if the market proceeds up towards the next technical target of 11295 in the days to come’ The market unfolded as expected moving up and achieving our target of 10708 and proceeding towards our extended technical target of 11295 Technically the trend is still intact up and our target of 11295 still stands valid with some hiccups on the way up as the upside momentum seems to have reduced and indictors are in stretched mode nevertheless the up trend is still intact up. The supports are at 10470 and resistance to the up move is at 11113-11295 The supports on the way down are at 3240 and resistances on the way up are at 3391-3451-3527 From a trading point of view I would stay long with close trailing stops to protect profits.

Market Review for 13th April 2009

BSE Sensex: (10804) the market has closed positive as expected but the up move seems to be getting sluggish as the indicators are a bit stretched and getting more stretched as the markets gets higher and I would not be surprised if a reaction sets in as the market climbs higher in the days to come. The support for the Sensex is 10650 and the resistance to the up move is at 11113-11295 Nifty: (3342) the support for the Nifty is at 3260 and the resistance to the up move is at 3451

Satyam collects over Rs 2000 cr in January-March

In January, when Ram Mynampati took over as interim CEO of Satyam, days after the company’s founder said its cash balance was just a mirage, the future looked bleak for the fraud-hit firm. Soon, a government-appointed board took over. But how exactly the company managed its finances for the past three months has remained something of a mystery. The widely-believed explanation is through loans raised from banks. However, documents available with ET show a bigger supplier of the much-needed liquidity was collections. The company met its working capital needs by garnering over Rs 2,000 crore by way of collections while only Rs 300 crore came through loans, according to documents provided by a highly-placed person in the company. The total collection in the past three months was nearly Rs 2,066 crore. After accounting for liabilities towards loans and payments, the company has a closing cash balance of Rs 211 crore for the period ended March 31, 2009. The company also repaid loans of Rs 156 crore and met forex losses of Rs 146 crore in this period. The new loans sanctioned during the period were Rs 685 crore, of which Rs 300 crore was availed of till March 26, 2009. The banks that provided support to Satyam during the period include Citibank, IDBI Bank and Bank of Baroda. Renegotiations with existing lenders have been concluded, except BNP, which will also be finalised soon. “All statutory liabilities of Satyam such as PF (provident fund) and TDS (tax deducted at source) have beenpaid. Salary payments have been met on time. The board is also drawing up cost-optimisation measures and this will be taken up by the acquirer,” the person said. The government dissolved the software firm’s board in January this year, after the company’s founder and former chairman B Ramalinga Raju confessed to fudging the company’s accounts for years to show inflated cash and revenues. Since then, a new board has been appointed to set Satyam’s house in order. “Almost 80-85% of the expected receivables have been collected. So, the extent of over-statement of accounts could be in the range of 15-20%,” the person added. On the bidder front, he said: “Finally, Tech Mahindra, L&T, Cognizant and Wilbur Ross. There were close to 141 registrations in the first stage, including law firms. Then, 10 submitted EoIs, and Cognizant also submitted one independently. They wanted absolute confidentiality about the bid. We are not sure if they will jointly bid with Wilbur Ross, or bid independently. IBM was never in the race.” When contacted Cognizant vice-chairman Lakshmi Narayanan said: “We cannot comment on it, there has been a lot of speculation about this.” On the conflict of interest among the board members, as Deepak Parekh was on the board of Tech Mahindra and SB Mainak has interests in L & T, the person said: “There is no conflict of interest. Whenever there is a talk of Tech Mahindra, Deepak Parekh excuses himself and the same goes for Mainak , when there is talk of L&T.” On staff count, the source said, the total count, including subsidiaries, is currently 48,000.

Satyam bidding in final lap; Parekh to stay away if M&M bids

New Delhi: Board will take “appropriate” decision if Tech Mahindra bids. With only two days left for the final bidding process to start (9 am on April 13), the government-appointed board of Satyam Computer Services is giving final touches to the modalities. And providing the extra information the potential bidders wanted. If Tech Mahindra decides to bid, it could raise concerns of transparency and corporate governance, as Deepak Parekh, member of the Satyam board, has also been on Mahindra and Mahindra’s since 1990. Parekh may stay away from the process if Tech Mahindra bids, said a source close to the development. When spoken to, Satyam board chairman Kiran Karnik told Business Standard: “Mr Parekh is a person of repute. If Tech Mahindra does bid, we will take all concerns into account and take an appropriate decision in this regard.” Meanwhile, Larsen & Toubro (L&T) — which already has over 12 per cent stake in Satyam — is emerging as a front-runner, says a source. Tech Mahindra is another strong contender and is understood to have called for a board meeting on Sunday, a day before the closing date for the financial bids. Senior officials from BT, Tech Mahindra’s largest stakeholder, are in Mumbai to attend the meet. Nasdaq-listed Cognizant Technology Solutions is also understood to be in the race. An investment banker in the know said the IT bellwether has an “arrangement” with private equity firm Wilbur L Ross & Co and “if the price exceeds the limit it has in mind, it will join hands with the PE firm.” The surprise package could be the Spice group, hinted a source. The B K Modi-owned group, which had completed the second round of bidding, withdrew from the race on grounds of “lack of transparency.” It had written to the Satyam board, expressing its concerns and asking for an open auction and increased transparency, besides disclosing names of the other bidders. A Spice Corp spokesperson had then said: “We are withdrawing from the race, and will only reconsider our decision if our concerns are addressed.” When asked if Spice group is reconsidering, Karnik said: “All I can say is that we have responded to their concerns.” Spice group officials could not be reached, despite repeated attempts.

9 April 2009

Intraday calls for 09-04-09

Markets likely to see a gap up opening. Buy Orbit Corporation for a target of 76. Stoploss: 70Buy Rohit Ferro Tech for a target of 20.60 (5% circuit). Stoploss: 19.30 If markets show weakness later during the day, short sell: Reliance Industries.

Markets likely to see a gap up opening.

4 April 2009

MF industry sees erosion of Rs 8,000 cr in March

The mutual fund industry witnessed a drop of nearly Rs 8,000 crore in its assets in March, plunging below the Rs 5,00,000-crore mark, even as 12 fund houses, including HDFC MF, saw an addition to their kitty. The combined average assets under management (AUM) of the 34 fund houses in the country saw an erosion of Rs 7,709.10 crore, or 1.54 per cent, and dropped to Rs 4,93,264.28 crore at the end of March, according to the data released by the Association of Mutual Funds in India. At the end of February, the average AUM had been Rs 5,00,973.38 crore. Among the top five fund houses, only HDFC MF registered a rise of Rs 1,092.05 crore in its AUM at Rs 57,956.45 crore in March, while the other four — Reliance MF, ICICI Prudential, UTI MF and LIC MF — lost a combined over Rs 4,308.53 crore from their assets. Of the 34 fund houses, 12 recorded an increase in their AUMs, adding Rs 4,370.46 crore during last month. “Bank which invest mostly in liquid funds have withdrawn significantly as March was a financial year closing. This has led to a plunge in the assets of the fund houses,” Taurus Mutual Fund Managing Director R K Gupta said. Reliance MF maintained its position as the top fund house in the country even as its AUM dropped

Bullish breakout to take Nifty to 3450-3650

Nifty has been in an upmove for the past two weeks and Thursday it crossed the strong resistance of 3200. the 50-share NSE index is likely to break out and touch 3450-3650 in next two months. “The Nifty rally from its March ’09 low of 2539 was able to break the erstwhile tough resistance at 2800-2880 levels quite effortlessly towards the end of that month. This is a very positive surprise. Trading volumes are much better during this rally. The number of stocks that have participated in the rally is significantly higher. We have now witnessed a strong rally in terms of momentum, volume and breadth (across sectors). Surely this is an excellent development,” "Nifty is poised to make a strong bullish breakout from the sideways trading range of the past five months. Today Nifty is expected to complete a bullish breakout by closing above 3150 end of day. On the lower side, Nifty has very strong support at 2800 now. I expect the rally to continue and take Nifty to the next resistance zone near 3450-3650 within a two month period,” The sectors he is bullish from a medium term perspective are auto, oil&gas, metals and IT. “Most bank stocks are still caught up in a sideways trading range. However, with each passing day the number of stocks participating in the rally is increasing consistently. In my opinion any minor dips during next few weeks should be viewed as buying opportunities for short term and medium term,”

2 April 2009

RCom introduces special tariff offer for customers

Reliance Communication on Thursday launched a tariff voucher ‘Jaadu STV 45´, which offers a host of benefits to its customers at a recharge of Rs 45. “The new tariff voucher offers Reliance GSM to GSM and CDMA calls within Uttar Pradesh and Uttrakhand at just 30 paise per minute. Calls to other networks will be charged at 60 paise per minute and STD calls to any network will be charged at Re 1 per minute,” RCom Regional Head (UP and Uttrakhand) Saleem Haq said. He said the customers will also get a talktime of Rs 20 for use on all networks. “Night calling will be free to both Reliance GSM and CDMA mobiles in UP and Uttrakhand and the offer will be available for a period of 90 days from the date of e-recharge,” he said. He said that the new pack also offered benefit of lifetime incoming validity to customers, who presently do not have lifetime validity. “It is available for all prepaid Reliance GSM customers,” Haq said

Satyam staff down (13,000 employees ) by a quarter

As many as 13,000 employees may have quit India’s graft-tainted outsourcing giant Satyam with some poached by clients and others leaving to work for rivals or other firms, a report said on Thursday. The workforce of Satyam, which is struggling for survival since its founder admitted to falsifying profits, stood at 40,000 by the end of March, down from 53,000 at the start of the year, India’s Mint business daily said. The report comes as Satyam’s government-appointed board looks for a buyer to take a 51-percent stake in the company to inject much-needed funds. At least one firm, US-based iGate has already withdrawn from the bidding, citing client and staff losses at Satyam Computer Services. There have been at least 78 recent instances in which Satyam employees have left along with clients who ended their relationship with the company, Mint quoted an unnamed Satyam project manager as saying. On Wednesday, Business Standard newspaper reported 250 to 300 Satyam workers were joining Bank of America to work on a Satyam project for Merrill Lynch which was acquired by the US bank. A Satyam spokeswoman said she could not confirm the reports and there was no immediate comment available from Bank of America. “Nobody really has accurate numbers (of staff), the restatement of numbers is going on through an internal and external process,” the Satyam spokeswoman said. Indian engineering giant Larsen & Toubro and telecom software firm Tech Mahindra Ltd are two confirmed bidders in the race for Satyam. But media reports have said there are up to eight. India’s Spice Group announced Friday it was temporarily withdrawing from the race for Satyam, complaining that the bidding process was not transparent. The company, once India’s fourth-biggest software services exporter by sales, has been struggling to pay wages and meet other expenses after founder B. Ramalinga Raju declared in January he inflated the company’s balance sheet by over a billion dollars and exaggerated profits.

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