Posts

Showing posts from October 5, 2008

recommadations

The stock market has fallen significantly and it is time to review
them.

First, let me start on macro level. The economy is not doing too good.
As I had been commenting in my previous posts, macro-economic factors
(domestic as well as global) have come into play. There is a
significant slowdown in the economy and according to me it will stay
so for next couple of years. The global economy is in a turmoil. US
financial institutions are falling like nine-pins. I think next in
line are European banks. Good news is that India is relatively better
off. The global turmoil is going to affect a few industries like IT,
Real Estate, Textiles, etc. Domestic growth stories are far less
impacted.

Moot question is what does one do in these times as far as investing
goes. Today, the best option is cash. Cash is King. Have some
liquidity at bay. The best opportunities to invest are in these times
of turmoil. Though index is at around 11.5 k level, lot of stocks are
available at valuations of 6000 to 8000 sensex l…

Aban Offshore slumps 46% in five days on concerns of slowdown in orders

Aban Offshore sank 16.12% to Rs 1100 at 14:41 IST on BSE, extending losses for the fifth session a row. Meanwhile, the BSE Sensex was down 443.22 points, or 3.86%, to 11244. Stocks fell across the world on concerns the global credit crisis will topple more global banks. On BSE, 3.35 lakh shares were traded in the counter. The scrip had an average daily volume of 93,451 shares in the past one quarter. The stocks has slumped 46.33% in five trading sessions from Rs 2049.85 on 30 September 2008. The stock hit an intraday low of Rs 1021, also its 52-week low. It hit an intraday high of Rs 1250. The stock had a 52-week high of Rs 5555 on 20 November 2007. The scrip had underperformed the market over the past one month till 7 October 2008, falling 42.63% compared to the Sensex's 19.25% fall. It had also underperformed the market in the past one quarter, falling 50.37% compared to Sensex's 13.54% decline. The mid-cap offshore drilling contractor has an equity capital o…

Dhanprayog Investments Company Ltd bonus issue

Dhanprayog Investments Company Ltd has informed BSE that the Board of Directors of the Company at its meeting held on October 06, 2008, inter alia, has decided to pay a dividend of Rupee One on each Fully Paid Equity Share of Re 10 to the members.

Further the Company has informed that, during conduct of other business, the Board decided to convene an Extra Ordinary General meeting of the members on October 31, 2008 to consider approval of resolution for issue of bonus shares in the ratio of 75 equity shares of Rs 10 each for every one equity share by capitalizing part of Reserves and Surplus.

Will the stock market go below 10,000? How low is low?

Image
Indian stock market is down by 800 odd points in the last 2 days and is already at the 2006 levels.Nobody is sure if we have reached the bottom or if there is still some pain. RBI has reduced the CRR (credit reserve ratio) to 8.5% to increase liquidity and hence boost the markets. CRR is the rate at which banks need to keep funds with the Reserve Bank.SEBI has re-introduced the P-notes (participatory notes), which were banned in late 2007. These are instruments through which foreign investors can invest in Indian equity without registering themselves with SEBI. This move is supposed to bring in more foreign investments. Though these 2 announcements were made yesterday they did not help the market today. It was down by 100 odd points today.FII's are net sellers overall and are expected to sell even more till the end of 2008. This has to be done to meet their credit obligation in the midst of once in a century financial crisis in the US. RBI has also injected 20000 crore …

BSE Capital Goods index hits 52-week low

Image
About 24% lost in one month, 14 stocks on losing list.
Our Bureau Mumbai, Oct. 7 Capital goods stocks, which had not been faring as badly as stocks in other sectors in this year's market decline, have been falling for over a month now. The BSE Capital Goods index in the past week fell close to 14 per cent, and in the past one month it fell almost 24 per cent. On Tuesday, the index fell four per cent, to its 52-week low, making it the worst performing among the sectoral indices. It may be mentioned that the other indices, including the Sensex, reached their 52-week lows on Tuesday.
"After being pampered with high valuations for such a long time, the prices of the capital goods stocks are finally seeing a fall. In such market conditions there is no reason why this index should enjoy such high premiums to the Sensex. With high interest rates and increasing costs, these companies are likely to face margin pressures and the premiums are starting to slowly vanish,"…

225 stocks hit all-time lows

Image
Most realty counters find place on the list.
Our Bureau Chennai, Oct. 6 The Monday bear haemorrhage pushed as many as 225 stocks to hit their new lows on the BSE. Prominent stocks among them include some of the A-group stocks such as MTNL, Indian Hotels, Deccan Chronicle, Suzlon Energy, Shree Renuka Sugars, GVK Power, Parsvanath Developers, Indiabull Realestate, DLF and HDIL. The other stocks that touched their new lows were Kotak Sensex, an exchange traded fund from Kotak Mutual Fund, ICRA – rating agency — and Edelweiss Capital. The new lows' list was dominated by realty counters. FIIs have been selling quite heavily from the market, particularly in the last two days, as the credit woes spread to European markets. After pulling out Rs 1,662 crore-worth equities on Friday, the FIIs (net) sold Rs 1,169 crore in Monday's trade, according to the provisional data available with the stock exchanges.Circuit summary also captured the bear grip with 449 stocks hitting lower…

Maytas Infra: Buy

Image
Maytas Infra's well-diversified business operations, strong financials, ability to forge the right partnerships for complex projects and sound management band width may elevate it to the status of a key infrastructure player despite its current mid-sized position. Investors with a perspective of at least three years can consider investing in this stock. At the current market price, the stock is likely to trade at 15 times its expected earnings for FY10. The valuation is at a marginal premium to similar sized peers. However, the company's well-established presence across high-margin verticals may justify such a premium. Given the present volatility in the market, investors can accumulate the stock on declines linked to the broad market. Maytas Infra has emerged as a highly diversified mid-cap player in the infrastructure space. The company holds an enviable portfolio mix spanning segments such as roads, ports, airports, water and irrigation, power and civil struct…

Amara Raja Batteries: Buy

Image
Network expansions by telecom service providers and the move to share infrastructure could result in increased demand for batteries, which support telecom tower and exchange infrastructure.

Bulk of the growth in the industrial batteries division is expected from telecom and UPS battery segments. Parvatha Vardhini C The stock of Amara Raja Batteries (ARB) has shown resilience during market turbulences in the past. The stock managed to rally despite the steep correction in January this year to reach its 52-week high of Rs 275 in February. However, a 16 per cent decline in net profits(despite a strong growth in sales) due to foreign exchange losses in the first quarter coupled with broader market volatility has seen the stock dip to new lows recently. The current market price of Rs 101 is an attractive entry point for investors with a long-term perspective. At this price, the stock trades at a P/E of about 10 times its annualised per share earnings of FY-09 (annualised June qu…