How to be in green in broad red market ???

Mid-caps have so far had a great run in the rally from the March 2009  lows. While the CNX Nifty only doubled in value, the CNX Midcap delivered a much stronger 170 per cent return in the same period.

ARE the mid-cap stocks are overheated? Well, not really.

Though the initial leg of the 2009 rally saw mid-cap stocks take the lead over their large-cap peers, these stocks haven't enjoyed as much of an expansion in PE multiples as their large-cap counterparts.

While CNX Nifty saw its PE multiple expand from 12 times to 21 times between March 2009 and end-May, that of CNX Midcap rose just from 8 to16 times. The valuation gap makes a reasonable case for investing in mid-cap stocks.

Though it has narrowed since, what with the PE multiple of the Midcap index edging up to over 18 times now, the gap still is nowhere near the earlier instances of ‘overbought' levels. For one, unlike market rallies in the past when the valuation gap between mid-cap and large-cap stocks had narrowed down considerably, the gap this time around does seem to leave reasonable room for appreciation.
For instance, between October 2007 and January 2008 (before markets crashed), while the PE multiple of CNX Nifty had moved up from over 26 to 28 times, that of CNX Midcap had expanded more from 20 times to over 26, narrowing down the valuation gap between the two indices considerably and in no time. Little surprise that it was soon followed by a crash in equities. Even in May 2006, just before the market suffered a significant fall, the valuation gap between the indices had thinned down noticeably. The mid-cap index valuations had even briefly surpassed that of Nifty-50 then.

Even if we look at the five-year historical average, mid-caps do not seem to be overheated. The five-year average gap between Nifty and CNX Midcap has been at about 8-10 per cent and the current valuation gap is perched in the 14-18 per cent ‘safe-zone'.

What about earnings?

Mid-cap stocks have reported improved financial performance, though it largely was only in keeping with the improved business environment and liquidity conditions. In the just-ended September 2010 quarter, the list
of companies comprising the CNX Midcap index reported a 5.3 per cent growth in sales over the corresponding quarter last year.

Profits however dipped by over 10 per cent, driven down by a drop in operating margins and interest cover
Does that mean mid-caps still have a long road to recovery? While to some extent it does mean that, much of the current mid-cap valuations are primed for potential future growth. This may also explain why the CNX Midcap Index is offering higher earnings growth for FY11 and FY12
(based on consensus forecasts) compared to the narrow indices.

That the companies have grown their sales on a sequential basis too suggests that the revival in demand is perhaps beginning to trickle down to mid-cap companies too. On a sequential basis, these companies reported a 3.3 per cent growth in sales. However for the growth to reflect below the line, access to liquidity would be crucial, as mid- cap companies still haven't seen any marked improvement in interest cover

Improving cash-flows as demand perks up and an easing capital-raising environment for mid-cap companies, therefore, may hold the key to earnings growth. While an increasing interest rate scenario could spell more challenges for mid-cap companies, pegging up their cost of capital, it still may not be as difficult to raise funds as it was during the credit crunch of 2008. Besides, with demand drivers slowly falling into place, the cost of credit may not bear that high an influence on business fundamentals, at least as long as the overall economy continues to grow.

But which sectors have enjoyed a higher re-rating and which lower in the rally so far? Companies from engineering, infrastructure, capital goods and shipping have enjoyed a significant re-rating over the year.

Hotel stocks and select pharmaceutical companies too have seen their PEs gallop over the year.

The re-rating seems to have also been earnings driven, to certain extent, what with the divergent earnings performance. While companies in sectors such as chemicals, consumer goods and sugar did not quite impress with their performance, those in pharmaceuticals, engineering, infrastructure, and real estate scored high.

How to go about it?

While mid-caps as a category do hold significant investment potential, how much of it can be extracted depends a lot on sector and stock choices as well as the tenure of investment. Additionally, look out
for companies with healthy operational cash flows and moderate leverage as they are better placed to ride a rising interest rate regime.

While lack of credible investment information on some stocks in the mid-cap space can be a big hindrance, you can take cues from the investment moves made by institutional investors.

However, remember, such stocks also are more prone to falls during periods of market correction. Interestingly, the FIIs have already increased focus on mid-caps; their stake as a percentage of the total
equity base of CNX Midcap index stocks now stands higher at 15.9 per cent (Septmber 2010 quarter) from 13.9 per cent seen in the year ago quarter.

It was at about 14.7 per cent in December 2009. Domestic institutional investors, comprising mutual funds and insurance companies, on the other hand, have slightly decreased their mid-cap exposure to 10.1 per cent from the 10.5 per cent level of a year ago.

Book profits regularly
Investing in mid-caps can become a bit too bumpy a ride for many investors, as their stock prices tend to be more volatile than their large-cap peers.

As the impact cost of transacting in mid-caps is higher (than that of large-caps) these stocks are more prone to downside risks during market corrections. Investors may, therefore, do well to take profits regularly.
A good indicator can be the valuation gap between the Midcap index and the Nifty. Thinning of the gap below the average should perhaps be reason enough to sweep some profits off the table.

Sensex at 19.3K, do you think Rs 1000cr made it happen

Realty and banking stocks took a beating on the bourses today as LICHF, PNB Central Bank,  Bank of India housing finance loan scam was exposed. CBI sources say that five companies involved in the scam took loan of Rs 1000 crore,


It is learnt that companies took loan to invest in stocks and manipulate share price . Sources also add that a company took loan of Rs 560 crore, another borrowed Rs 300 crore while rest of them took loan of Rs 50-60 crore.

Now CBI will write market regulator SEBI asking it to investigate the role played by these companies. If need be these companies can even be blacklisted for taking money in the name of housing loan and then diverting it to manipulate share prices.

Sources also add that there are six other officials from various public sector banks who are on CBI’s radar whose role is being investigated vis-à-vis this housing loan scam and in the next few days we can see more arrests in this case.

Most of the banks have given these  loans after proper verification. They already held a good amount of collateral with them for the loans that they had disbursed. From that point of view, we don’t see too much of a problem of them giving a loan and it turning bad.


What has happened is that somebody has taken advantage of the system, in probably expediting the process by way of extracting money out from the banking system faster, to complete the land acquisition buy and that is where these things have backfired.

Otherwise, this bribery has been going on in this particular sector for many years. It’s not the first time that we are seeing this. Probably it has come on the surface this time around and that is why we are all shocked. More importantly, the banking sector has not been found doing something which they should not have been doing.

At the same time, real estate companies have been taking this kind of money from banks by paying extra money to get the process done faster. In my view point, the corporate workings are not going to get affected beyond a point. Maybe some process may get delayed including sanctions. That is where one might see some amount of hiccups. But beyond a point, I don’t see corporate workings getting affected either on the realty or on the banking side.

Life Insurance Corporation and LIC Housing Finance have been in focus since the news of a large scale multi-crore scam broke out. In a bid to clear Life Insurance Corporation's name from the murky dealings, the company's Chairman TS Vijayan relegated the matter to individual misconduct and denied having any kind of system failure.


LIC do not have any sensitive information about corporate houses. As far as LIC Investment Department is concerned, if anyone comes for a loan or equity investment, it’s based on published information. There cannot be anything like confidential information that any company shares with us that is to be shared with other outside people. I don’t think so.

LIC has representatives in some of the companies of course but those things are taken in at a different level if at all report come. If any exceptional things come in the board, they do report but it is in a different level, it’s not at secracy level

Investment decisions to equities are taken on the basis of both the research report and operations at very extremely senior level and the information, once the decision is taken for implementation, it might go down but decisions are not influenced by any of these things.



 

Theory of Reflexivity - Are we ready

George Soros is an extremely successful stock speculator and investor. From 1970 to 1980, Soros’s Quantum Fund returned an average of 42.5% per year. Forbes ranked Soros as the 35th wealthiest person in the world in 2004, with an estimated net worth of $14.2billion.
Soros is famously known for breaking the Bank of England in 1992 when his bearish trades precipitated the fall of the European monetary system. And as the man who was responsible for a large number of stock market and currency market crashes (including the asian currency crisis) had operated by focusing heavily on the theory of reflexivity. The successful trade earned Soros an estimated $1.1 billion. Soros successfully repeated this trade again during the 1996 and 1998 Asian currency crises.
The theory of reflexivity is very interesting and helps investors and speculators in identifying phases of market disequilibrium and helps him/her profit from such phases of market disequilibrium.
The theory of reflexivity acts in sharp contrast to the Efficient Market Theory which states that the market is perfect and the stock prices will discount/factor-in all known and unknown (insider) information.
The theory of reflexivity states that any significant events / developments can disrupt the market equilibrium and the market becomes a victim of irrational exuburence.
When there is a bad news people start selling and hence prices tumble. Looking at the stock prices tumbling, people start selling more because of fear, stock prices fall further and the viscious circle continues.
Similarly, when there is a good news stock prices increase. People become excited, buy more stock and the stock prices rise even further and thus the chain continues.
This is where a rational economic man / value investor would identify the opportunity. Though stock prices might temporarily behave irrationally, research has proved that over the long term, stock prices reflect a company’s performance. Hence it is important that an investor enters the market and takes positions when the market is in disequilibrium and waits patiently for the markets to return to their equilibrium state and then reverse the positions taken. Possible causes of inequilibrium are favourable or unfavourable political development, corporate announcements (bonus, stock split, rights issue, new orders and so on). In such cases stock prices may move irrationally because of reflexivity.



The general idea of the theory of reflexivity is that irrational exuberance, or biases can influence market transactions and create disequilibrium. This can influence not only the market price but also underlying fundamentals. The theory of disequilibrium contradicts the traditional efficient market hypothesis which asserts that markets are rational, informationally efficient, and unbiased.
The theory of reflexivity suggests that in certain cases the activity of the financial markets driven by particpant bias can influence the fundamentals that the market prices are supposed to represent. This results in disequilibrium causing the markets to behave differently than assumed by an efficient market hypothesis
A key difference between financial markets and other studied and researched natural science is that markets are driven by thinking participants. This thinking and decision making effects decisions made by investors. While investors may utilize facts in the decision making process, the choices are ultimately influenced by biases, emotions, or other factors.
According to Soros, “Reflexivity is, in effect, a two-way feedback mechanism in which reality helps shape the participants’ thinking and the participants’ thinking helps shape reality in an unending process in which thinking and reality may come to approach each other but can never become identical. Knowledge implies a correspondence between statements and facts, thoughts and reality, which is not possible in this situation.The key element is the lack of correspondence, the inherent divergence, between the participants’ views and the actual state of affairs.”

The theory of reflexivity is most evident during boom or bust cycles. Soros provides many examples of his theory of reflexivity. An interesting example focuses on equity leveraging. Companies can utilize the irrationally high expectations of investors as a source of demand for a new stock issue. After gaining capital from this stock issue, the companies can apply the capital to business operations to influence growth and earnings per share. This demonstrates an example of how investor bias could influence underlying fundamentals.

Supercycle 3 is here for us says, Standard Chartered

Standard Chartered has come out with a report that the world is in the throes of a third supercycle of growth. Supercycle is a period of historically high global growth lasting a generation or more driven by increasing trade, high rates of investment, urbanization and technological innovation.


It says the first supercycle from 1870 to 1913 -saw the rise of the US.
The second supercycle was from 1946 to the mid-70s - saw the rise of Japan and East Asia and
The latest supercycle from around 2005 to 2030 which will see China and India as the winners of the game.

Supercycle theory
The world economy is still doing quite well despite all the problems.  The world economy now is twice the size it was a decade ago. The world economy now (USD 64 trillion) is bigger than it was before the euro crisis began. However one should not ignore the fact that there are problems in the near-term in the US, in Europe.

One also should acknowledge that the business cycle still exists in India, in China and indeed  there are near-term setbacks, that there are variations along the way but the clear underlying message is that the upper trend is very evident. In this calendar year for instance, the emerging world which counts for one-third of the global economy is accounting for two-thirds of global growth. It is evident that a shift in the balance of economic and financial power shall move from west to east (from dollar/ euro/ yen to yuan/ rupee/ rouble).

India in the next 20 years will probably do in some respect what Japan did from 1945 upto the early 70s. Then Japan went from about 2-3% of global growth to about 10%.

The economy of India is the eleventh largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP).Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment. India is an emerging economic power with a very large pool of human and natural resources, and a growing large pool of skilled professionals.  Economists predict that by 2020, India will be among the leading economies of the world. According to the BRIC report, published by Goldman Sachs, India will be the second largest economy after China by 2043.

India's large service industry accounts for 55% of the country's Gross Domestic Product (GDP) while the industrial and agricultural sector contribute 28% and 17% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%. The labour force totals half a billion workers.  Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology enabled services and pharmaceuticals.

From 2004 until 2010, India's average quarterly GDP Growth was 8.37 percent reaching an historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004.

India's per capita income (nominal) is $1,030, ranked 139th in the world, while its per capita (PPP) of US$2,940 is ranked 128th. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in 2006, up from 6% in 1985
http://en.wikipedia.org/wiki/Economy_of_India

The numbers does matter

India shall go on for with a growth rate of  at just about 9-9.5% on average over the next 20-year period.
and factored in a pretty cautious growth rate for China of 6.9%, Its economy is expected to expand by 8.5% this year. It has a long way to go before it is as rich as China—the Chinese economy is four times bigger—but its growth rate could overtake China’s by 2013, if not before . Some economists think India will grow faster than any other large country over the next 25 years. Rapid growth in a country of 1.2 billion people is exciting.

The world economy next year probably will be USD 64.7 trillion economy. In cash terms, nominal terms allowing for inflation as well as growth, the world economy could have grown to over USD 300 trillion by 2030. In real terms take in accounts of inflation and take in accounts of some appreciation of some of the major currencies, the world economy probably would have grown to somewhere between USD 125 trillion and USD 143 trillion by 2030. So in real terms the world economy would probably more than double over the next 20 years.
India share in that growth, will be an important contributor to that growth. so what will be its ???? percentage to world economy

why and how will India start to outpace China.

One is demography. China’s workforce will shortly start ageing; in a few years’ time, it will start shrinking that’s because of its one-child policy.
India is now blessed with a young and growing workforce. Its dependency ratio—the proportion of children and old people to working-age adults—is one of the best in the world and will remain so for a generation. India’s economy will benefit from this “demographic dividend”, which has powered many of Asia’s economic miracles. The proportion of Indians aged under 15 or over 64 has declined from 69% in 1995 to 56% this year, says the UN. India’s working-age population will increase by 136m by 2020; China’s will grow by a mere 23m, says Morgan Stanley


The second reason for optimism is India’s much-derided democracy. The notion that democracy retards development in poor countries has gained currency in recent years. Certainly, it has its disadvantages. Elected governments bow to the demands of selfish factions and interest groups. Even the most urgent decisions are endlessly debated and delayed.

China does not have this problem. When its technocrats decide to dam a river, build a road or move a village, the dam goes up, the road goes down and the village disappears. The displaced villagers may be compensated, but they are not allowed to stand in the way of progress. China’s leaders make rational decisions that balance the needs of all citizens over the long term. This has led to rapid, sustained growth that has lifted hundreds of millions of people out of poverty. Small wonder that authoritarians everywhere cite China as their best excuse not to allow democracy just yet.

Since the early 1990s, when India dismantled the “licence raj” and opened up to foreign trade, Indian business has boomed. The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.

India’s individualistic brand of capitalism may also be more robust than China’s state-directed sort. Chinese firms prosper under wise government, but bad rulers can cause far more damage in China than in India, because their powers are so much greater. If, God forbid, another Mao were to seize the reins, there would be no mechanism for getting rid of him.
That is a problem for the future. For now, India’s problems are painfully visible. The roads are atrocious. Public transport is a disgrace. Many of the country’s dynamic entrepreneurs waste hours each day stuck in traffic. Their firms are hobbled by the costs of building their own infrastructure: backup generators, water-treatment plants and fleets of buses to ferry staff to work. And India’s demographic dividend will not count for much if those new workers are unemployable. India’s literacy rate is rising, thanks in part to a surge in cheap private schools for the poor, but it is still far behind China’s.
Advantage India
The Indian government recognises the need to tackle the infrastructure crisis, and is getting better at persuading private firms to stump up the capital. But the process is slow and infected with corruption. It is hard to measure these things, but many observers think China has done a better job than India of curbing corruption, with its usual brutal methods.

Given the choice between doing business in China or India, most foreign investors would probably pick China. The market is bigger, the government easier to deal with, and if your supply chain for manufactured goods does not pass through China your shareholders will demand to know why. But as the global economy becomes more knowledge-intensive, India’s advantage will grow.

 need to read more:
http://www.moneycontrol.com/news/economyindia39s-gdp-to-grow-at-93avg-till-2030-stanchart_500370.html

Margin Trading Facility

Margin Trading is trading with borrowed funds/securities. It is essentially a leveraging mechanism which enables investors to take exposure in the market over and above what is possible with their own resources. SEBI has been prescribing eligibility conditions and procedural details for allowing the Margin Trading Facility from time to time.

Corporate brokers with net worth of at least Rs.3 crore are eligible for providing Margin trading facility to their clients subject to their entering into an agreement to that effect. Before providing margin trading facility to a client, the member and the client have been mandated to sign an agreement for this purpose in the format specified by SEBI. It has also been specified that the client shall not avail the facility from more than one broker at any time.

The facility of margin trading is available for Group 1 securities and those securities which are offered in the initial public offers and meet the conditions for inclusion in the derivatives segment of the stock exchanges.

For providing the margin trading facility, a broker may use his own funds or borrow from scheduled commercial banks or NBFCs regulated by the RBI. A broker is not allowed to borrow funds from any other source.

The "total exposure" of the broker towards the margin trading facility should not exceed the borrowed funds and 50 per cent of his "net worth". While providing the margin trading facility, the broker has to ensure that the exposure to a single client does not exceed 10 per cent of the "total exposure" of the broker.

Initial margin has been prescribed as 50% and the maintenance margin has been prescribed as 40%.

In addition, a broker has to disclose to the stock exchange details on gross exposure including name of the client, unique identification number under the SEBI (Central Database of Market Participants) Regulations, 2003, and name of the scrip.

If the broker has borrowed funds for the purpose of providing margin trading facility, the name of the lender and amount borrowed should be disclosed latest by the next day.

The stock exchange, in turn, has to disclose the scrip-wise gross outstanding in margin accounts with all brokers to the market. Such disclosure regarding margin-trading done on any day shall be made available after the trading hours on the following day.

The arbitration mechanism of the exchange would not be available for settlement of disputes, if any, between the client and broker, arising out of the margin trading facility. However, all transactions done on the exchange, whether normal or through margin trading facility, shall be covered under the arbitration mechanism of the exchange

Kaun karega 1.8 Lakh karorki bharpai - Politician should be held accountable for losses

Just as the Winter Session of Parliament was about to begin, the Congress acted swiftly by sacking Maharashtra Chief Minister Ashok Chavan and Congress parliamentary party secretary Suresh Kalmadi.

Both Chavan and Kalmadi are scam-tainted - former in Adarsh Housing Society scam while the latter in the Commonwealth Games scam. The Congress' wanted to move the sting out of an angry Parliament debate.

But there's a next big target - telecom minister A Raja - who is accused of a telecom scam hitting tens of thousands of crores. The Opposition says Raja must go too.

"UPA has had too much corruption, but there has been too much corruption in the past two Sessions of Parliament. I want to raise the issue of corruption - the CWG scam, 2G spectrum scam and the Adarsh scam," said Sushma Swaraj, Leader of the Opposition in the Lok Sabha.

The allegation is that the telecom ministry sold licenses for second generation spectrum for a mere Rs 1651 crore for a pan-India licence. Some buyers sold stakes in their firms for three times the amount

Is Nifty and Sensex headed for another round of correction

Investors in the Indian stock market saw their wealth eroded by Rs 1.6 lakh crore today as the benchmark Sensex plummetted by about 432 points over negative global cues and poor industrial growth data .

Selling activity intensified across the board as sell-off in China and disappointing September IIP data back home spooked sentiments. All the sectoral indices were in the negative territory with realty, metals and banks worst hit.

Chinese markets were under pressure on expectations that the government tighten credit to contain inflation which hit a 25-month high in October. Shanghai Composite tanked 5.30 per cent. Indian Index of industrial production for the month of September fell to 4.4 per cent lower than the previous month's revised annual growth of 6.92 percent. The street was expecting growth of 6.4 per cent. The September IIP data is the lowest in 15 months.


 Total investor wealth , measured in terms of cumulative market capitalisation of all listed companies in the country, dropped to Rs 74.69 lakh crore at the end of today's session. It stood at about Rs 73 lakh crore on Thursday, the previous trading day.

The 30-share index Sensex declined by 432.20 points, or 2.1 per cent, to 20,156.89 today. This is the steepest decline registered by the Sensex since a 467-point fall on May 19, 2010.

Market breadth turned negative on the NSE with 1968 declines against 1180 advances.
Marketmen attributed friday's debacle to weak cues from Europe and China, as well as poor domestic industrial production numbers for the month of September.

"This is a knee-jerk reaction to the negative news flow from the global markets. Dalal Steet was already in a bearish mood, which became worse after the IIP numbers almost halved to 4.4 per cent for the month of September as against the year-ago period," SMC Capitals Equity Head Jagannadham Thunuguntla said.
The descent of the index was led by blue-chips Reliance Industries , ICICI Bank , SBI and DLF .


At the close of today's trade, market capitalisation of the country's most valued firm, Reliance Industries, stood at Rs 3.47 lakh crore, while state-run ONGC and software major TCS's valuations were Rs 2.79 lakh crore and Rs 2.06 lakh crore, respectively.
http://economictimes.indiatimes.com/markets/stocks/market-news/Debacle-on-Dalal-Street-erodes-investor-wealth-by-Rs-160K-crore/articleshow/6914334.cms
 
IS HISTORY REPEATING ITSELF i take you all to a report dated 27 jan 2010
 
http://economictimes.indiatimes.com/markets/stocks/market-news/BSE-Sensex-drops-6th-day-at-12-week-closing-low/articleshow/5505583.cms
 
the content of which is reproduced
 

The BSE Sensex fell for a sixth session on Wednesday, sliding 2.9 percent to its lowest close in nearly 12 weeks, as investors joined a regional sell-off on concerns China's efforts to cool credit demand could hurt global recovery.

Financial stocks led the drop on caution ahead of the Reserve Bank of India's (RBI) monetary policy on Friday that is widely expected to tighten banks' reserve requirements.

The 30-share BSE index dropped 2.92 percent, its biggest one-day fall in nearly three months, and ended down 490.64 points at 16,289.82. Only one of its components closed in the green.

It posted the longest run of losses in nearly three months and matched a six-day slide to early November last year.

A.V. Srikanth, executive director of private wealth management at Anand Rathi Financial Services, said the market was catching up with falls in Europe and Asia since Tuesday, when the domestic bourse was closed for a holiday.

"We are bearing the brunt of yesterday's and today's decline in world stocks," he said. "People are also jittery before the RBI policy."

Global stock markets fell again on Wednesday as investors were worried about a monetary squeeze from central banks around the world and also the impact of tightening U.S. banking regulation.



Foreign funds have pulled out $676 million from Indian equities in the last four sessions. They had moved in $17.5 billion in 2009 and powered a 81 percent rally in the main index.

Top lender State Bank of India fell as much as 5.7 percent as investors worried about its outlook and asset quality after it reported December quarter results on Monday evening.

State Bank said it expected steady loan growth for the full year but warned that surplus deposits and higher bad debt could impact profits in the March quarter.

"Though margin improvement was better than expected but increase in NPAs (non-performing assets), lower coverage and increase in duration risk remain overhangs on SBI's earnings, in our view," JPMorgan said in a note obtained by Reuters.

State Bank ended down 5.1 percent at 1,987.15 rupees, while rival ICICI Bank dropped nearly 5 percent to 790.20 rupees.

Metals makers fell as an appreciating dollar and on worry further policy tightening in China and proposed U.S. bank regulations could stifle demand for metals.

Tata Steel , the world's eighth-largest steel maker by output, dropped 8.5 percent to 558.70 rupees while non-ferrous metals producer Sterlite Industries shed 4 percent to 770.05 rupees.

Aluminium maker Hindalco fell 5.7 percent to 150.10 rupees. Its December quarter net profit had dropped 22 percent and missed the street view.

Export-focused outsourcers declined on fears U.S. President Barack Obama's plan to limit risk-taking by banks might hit their order flow.

Infosys Technologies and Tata Consultancy Services lost 1.6 percent each, while Wipro shed 5.8 percent.

Energy giant Reliance Industries , which has the highest weightage on the main index, closed 1.5 percent lower at 1,025.85 rupees.


CONCLUSION

Corrections are always good for Bull market i think market will correct 8-10 percent across all asset classes
all across the board 'including this' there were news floating that sensex and nifty shall scale new highs
so some fear is lurking some where
and we need good pricing for indian stock so that FII may buy more at those prices
existing FII investors will try to seek frenzy in this market to cause retailers to sell low so that they can buy more at lower price
indian nifty vix at 11 percent tells us volatility is at helm
so be cautious in one to two months book profits and maintain some cash (35-40 percent)would be useful to buy when market corrects
PLEASE ALLOW SENSEX TO CORRECT TO 19350 AND NIFTY TO 5835
for a risk free sustainable upmove

IDBI Bank may go for follow-on public offer in 12 to 15 months

The public sector IDBI Bank may go for follow-on public offer (FPO), rights issue or qualified institutional placement in the next 12 to 15 months, a top bank official said here Saturday.

The government owns 65 percent stake, after it infused Rs.3,000 crore, in the bank with the share capital of Rs 980 crore with a market capitalisation of Rs18000 crore . It allows us to raise money by way of either right issue, qualified institutional placement, preferential placements or FPO ," the bank's chairman and managing director R.M. Malla told reporters on the sidelines of a press meet.

Noting this would help the bank get more capital, he maintained that the bank would take such a decision at appropriate time.

 for 3 in one (demat trading banking) account chech out


http://www.idbipaisabuilder.in/Customer_Center/Form.aspx

 

At present, the capital adequacy ratio of the bank is 13.6 percent.

the bank this fiscal (2010-11) has raised Rs.300 crore as tier I capital. "We would raise Rs.1,500 crore as tier II capital in this fiscal," he said.

The bank is targeting 22-25 percent credit and deposit growth in the current fiscal. The total business size of the bank for the half year ended 30 september was Rs.328,000 crore

To woo customers and increase the proportion of the current and savings accounts (CASA), the bank has waived off all charges relating to CASA accounts recently. The CASA of the bank is at 15 percent of the total deposits which it aim to raise to 25 percent in three years time.

The bank recently borrowed $350 million from foreign markets. It would mobilise $1 billion in the next 12 months from foreign markets, Malla said.

At present, the bank only has one international branch at Dubai. "We plan to open representative branches in Singapore and China," he said.

It also plans to add 280 more branches across the country this fiscal to the existing 730 branches and another 400-500 ATMs, he said.

Rupee to gain against dollar target 41

India okay with $70bn cap inflows, eyeing QE2
India can manage capital inflows of up to USD 70 billion and there is no need yet to impose curbs, but it must be alert to the latest round of US quantitative easing, a top economic adviser said on Thursday.


Several Asian policymakers are worried the US Federal Reserve's move to buy USD 600 billion in government securities will lead to a surge in hot money inflows into emerging markets, creating asset bubbles and complicating monetary policy setting.

"The need to act on capital flows has not come yet, but we will need to watch capital flows," said C Rangarajan, chairman of the Prime Minister's Economic Advisory Council.
India's response to the move has been muted in comparison with other nations like China, South Korea and Brazil, offering some comfort for the United States as it tries to soothe tensions and hammer out an accord at the G20 summit underway in Seoul.
Asia's third-largest economy needs foreign inflows to bridge its widening current account deficit, expected to be around 3% of GDP in the 2010/11 fiscal year to end-March 2011. Policymakers are confident India can easily finance the gap.
Since January, foreign investors have poured in USD 28.5 billion into the equity markets, pushing the benchmark stock index up nearly a fifth and the rupee up 5.3%.
Rangarajan's comments are in line with that of Montek Singh Ahluwalia, another key aide to Prime Minister Manmohan Singh. The central bank has also said it will intervene in the forex markets only if inflows turn lumpy or volatile.

The current tight liquidity situation in India is temporary and is expected to ease in a month's time on government spending, C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said on Thursday.


http://www.moneycontrol.com/news/economy/india-okay3670bn-cap-inflows-eyeing-qe2-c-rangarajan_498306.html

Adviser sees cash tightness easing in a month


Cash conditions have remained tight since last month on tepid government spending, and increased bank withdrawals ahead of the festive season.
Banks borrowed Rs 75,565 crore (USD 17.5 billion) at the morning repo auction compared with nearly Rs 1.2 trillion at the central bank's twin repo auctions on Wednesday.

Rangarajan also hinted at the possibility the central bank will intervene in the foreign exchange market amid robust capital inflows, which may in turn create some rupee liquidity.

"Also, if part of capital flows are absorbed by reserves then that will expand liquidity also," Rangarajan said.

India's central bank on Tuesday reintroduced measures to provide liquidity comfort to banks, arising out of the frictional liquidity pressure, but unlike the previous time, did not announce any open market bond purchases.

However, markets did not cheer the Reserve Bank of India's (RBI) recent measures, as there was no effective liquidity injection per se.

Thumbs down interbank cash rate had shot up to 12%

The interbank cash rate had shot up to 12% on October 29 with cash tightness aggravated by Coal India IPO refunds, but subsequently cooled off after the RBI's first round of cash support measures.

However, the overnight rate has been hovering around 7.00-7.25% this week, much above the RBI's repo rate of 6.25% and the benchmark 10-year bond yield revisited over one-week highs of 8.09% on Thursday.

The one-year overnight indexed swap also reflected the cash strain with the rate rising to 6.78%, its highest since October 28.

"All the measures will only lead to higher borrowing either from the market or from RBI, but effectively there is no reduction in the tightness," said a dealer at a foreign bank.

RBI sources say government's surplus cash balance is around Rs 80,000 crore (USD 18 billion), indicating the lack of adequate spending.

The market is hoping the central bank will buy bonds through a second round of open market operations (OMO) to ease cash tightness, or for the government to postpone part of its borrowing plan.

In the first round of its recent OMO auction on November 4, the RBI bought Rs 8,352 crore of bonds against its target of Rs 12,000 crore. (USD 1=Rs 44.2)

ANSAL API Results updates H1 30SEP2010

Ansal Properties and Infrastructure Ltd on standalone basis posted healthy H1 30SEP2010 results
with growth in 57.4 percent in turnover and 17.7 percent in net profit

particulars  standalone  consolidated
--------Amount Rs in Crore -------
Turnover   496.59      584.20
OPBIDT   124.78      142.87
Oth income   6.36        20.29
Interest        48.36       50.75
Depreciation  4.30         4.54
Income tax  26.69       46.32
Net profit    51.79       61.55

SPS------ 37.71---- 44.37
OPS------ 9.48 ---- 10.85
EPS------ 3.93 ---- 4.67

the income tax provision for the H1 30SEP2010 was Rs 26.69 crore
as against Rs 14.65 crore previous period an increase of 82 percent
income tax as a percentage of PBT is 31.45 percent as against 28.45 percent previous period.

Assuming same rate of income tax we can expect a net profit of Rs 128 crore for the year 2010-11

Parsvnath Developers sell 24.5 pc stake in an upcoming project for Rs 120 crore

Delhi-based realty firm Parsvnath Developers (PDL) is selling a 24.5% stake for Rs 120 crore in its upcoming office complex project in the city centre to Red Fort Capital, reports CNBC-TV18 quoting VC Circle.

The PE firm is taking the stake in 'Red Fort Parsvnath Towers', a state of the art office complex coming up in New Delhi's Connaught Place.

Parsvnath has already executed a concession agreement with Delhi Metro Rail Corporation (DMRC) to deliver the project on built, operate and transfer (BOT) basis for Rs 99.5 crore. This concession has been assigned to Farhat Developers Pvt Ltd where Red Fort is picking up the stake. Larsen & Toubro (L&T) is likely to construct the project on a turnkey basis and has already been given a letter of intent.

'Red Fort Parsvnath Towers' is expected to be a grade A commercial complex located on a five-acre land, next to the Metropolitan Hotel. It will have 3000,000 sq. ft. of leaseable area with 800 basement parking space.

Red Fort last year invested in a residential project of Parsvnath in New Delhi. The developer raised a total of Rs 115 crore from Red Fort for 22% stake in ‘Parsvnath La Tropicana’, a group housing project of the company in north Delhi.


BSE: 532780 NSE: PARSVNATH
Parsvnath Developers with market capital of Rs 2861 crore
has a networth of Rs 2271 crore and borrowing of Rs 1584 crore
having a book value per share of Rs 55.84 and CMP of Rs 65.75
trading at P/BV of  1.18 PE of 21.35

for 2009-10
Turnover Rs 818 crore
OPBIDT Rs 233 crore
Interest Rs 79 crore
Depreciation Rs 21 crore
Income Tax Rs 35 crore
Net profit Rs 134 crore

PSU BANKS Transformations

State Bank of India whose income and net profit after tax is growing at 8.5 percent and 12.5 percent per annum respectively is trading at Rs.3425 ie., at PE of 19.08x and P/BV of 2.89 x
SBI's forward EPS Rs.179.5 and forward book value of Rs.1188 after considering dividend 300 percent for 2010-11

IDBI Bank whose income and net profit after tax is growing at 18 percent and 60 percent per annum respectively for 2010-11 is trading at Rs. 195 ie at PE of 11.4 x and P/BV of 1.56 x
IDBI Bank is having at forward EPS of Rs. 17.1 and forward Book value of Rs. 125 after considering dividend 35 percent for 2010-11

the higher growth rate in income and profit is because IDBI bank is transforming itself from development bank to personal bank and getting lower interest borrowing from CASA  and  foreign borrowings at 4-5 per cent per annum

Syndicate Bank whose income and net profit after tax is growing at 7.5 percent and 48 percent per annum respectively for 2010-11  is trading at Rs.145.8 PE of 7.47x and P/BV of 1.25 x
Syndicate  is having at forward eps of Rs. 19.5 and forward book value of Rs. 116

the higher growth rate in profit is because the bank which  in previous year was allocating a large portion of PBT towards provision for doubtful debts which has since reached the requisite limits as per norms hence the reflecting towards net profit for the year

Canara Bank whose income and net profit after tax is growing at 11 percent and 30 percent per annum respectively for 2010-11 is trading at Rs.811 PE of 8.45x and P/BV of 2.05 x after considering dividend 100 percent for 2010-11

Canara Bank is having at forward eps of Rs. 97 and forward book value of Rs. 395
canara bank used to provide for more provision for doubtful debt in septemeber quarter every year this year around due to since the provision had reached the requisite limits as per norms the same was reflected towards net profit for the quarter ended 30 september 2010
more banks  profit story are under analyis and shall be updated

users may kindly intimate the their comments for specify psu bank for analysis and their expected targets prices by march 2011

FORTIS MALAR HOSPITALS a contra pick

Fortis Malar Hospital http://www.fortishealthcare.com/Malar/ is established as one of the largest corporate hospitals in Chennai providing quality super specialty and multi specialty healthcare services. Fortis Malar Hospital, with 180 beds, focuses on providing comprehensive medical care in the areas Cardiology, Cardiac surgery, Neurology, Neuro surgery, Orthopedics, Nephrology, Gynecology, Gastroenterology, Pediatrics, Diabetics and others...

Today it is one of the preferred hospital in Chennai for patients in several parts of Tamil Nadu and other parts of the World. We provide medical expertise with the finest talents amongst doctors, nurses, technicians and management professionals in an environment that enables them to deliver the highest quality of healthcare through state-of-the art facilities that aims to leave no stone unturned in perfecting ever enhancing patient centric care. Enhanced by the warmth & care of the professionally trained nurses and housekeeping staff, Fortis Malar Hospital at Chennai recreates the comfortable ambience of home within its four walls.

3 years back
-------------
The Delhi-based company had acquired a 46 per cent stake in Chennai-based publicly listed company Malar Hospital for Rs 25.76 crore ($6.3 million) back in October 2007. The acquisition was done through Fortis' wholly-owned subsidiary International Hospital Ltd (IHL) in association with Ranbaxy group company Oscar Investments. Fortis aslo made an open offer buying another 20 per cent equity from Malar’s public shareholders. The 180-bed multi-speciality Malar Hospital then had  an enterprise value of Rs 52 crore and an equity value of Rs 42 crore plus debt of Rs 14 crore. Malar is a leading centre for cardiac care, renal transplants, neurosurgery, limb reconstruction surgery and maxillo-facial orthodontology. Fortis, though, has a task at hand at Malar, which has an accumulated loss of around Rs 20 crore and also mounting debt
.Now what is hot at fortis malar
------------------------------
After 3 years of acquisition of 46 percent stake by FORTIS, the group has increased its stake in fortis malar to 63.20 percent as on 30.09.2010 held by International Hospital Ltd holds 93.01 lakh shares or  50.02 percent and Oscar Investments Ltd holds 24.51 lakh shares or  13.18 percent shares

Further the earlier promotor group holds 18.56 lakh shares or  9.98 percent in fortis malar hospitals

At CMP of Rs. 35.15 the Market capitalisation is Rs 65.36 crore and trading at forward PE of 16.5 x and forward P/BV of  2.9 x as against 44 x and 4.2 x respectively of the peer in the industry

Three years after Fortis Healthcare acquired Malar hospital,  Fortis completed its rebranding exercise from Malar Hospital to Fortis Malar on 26 October 2010.
http://timesofindia.indiatimes.com/city/chennai/Malar-hospital-completes-rebranding-to-Fortis-Malar/articleshow/6817751.cms

Tamil Nadu is the hub of medical tourism and has seen a rise in the number of patients seeking medical care. It is encouraging to see leading hospitals take interest and develop the health care scene in Chennai," said M R K Paneerselvam, the state minister for health and family affair who inaugurated the revamped hospital.

The new hospital will focus on providing comprehensive medical care in areas of cardiology, cardio-thoracis surgery, neurology, neuro surgery, orthopedics, nephrology, gynecology, gastroenterology, paediatrics, diabetics and others, said Bhavdeep Singh the CEO of Fortis Healthcare and chairman of Fortis Malar Hospitals.

http://www.fortishealthcare.com/Malar/news/210_19_19_20/Fortis-Malar-Hospital-conducts-rare-brain-by-pass-Neuro-surgery.html

LATEST FINANCIALS
Fortis Malar Hospitals Ltd. recorded a total income of Rs.40 crore during the half year ended 30th september 2010, a growth of 35.3% compared Rs.29.6 crore during the corresponding half year of the previous year.

Operating Profit (EBIDTA) for the half year ended 30th september 2010 stood at Rs.5.35 crore compared to Rs.4.38 crore achieved in the corresponding period of the previous year an growth of 22.1 percent

The Profit after Tax (PAT) for the half year ended 30th september 2010 stood at Rs.1.89 Crores as against the Rs. 1.78 crore achieve during previous year an increase of 6.2 per cent

Increase in depreciation and tax by 40 percent was the reason for reduction in NPM margin

The half year was marked by significant activity and this was in great part driven by a strong focus on clinical outcomes and patient care. To this end, the organization continues to invest in its clinical expertise with the addition of several new doctors covering multiple medical specialties. In addition, the work related to the facility renovation has continued and many new dimensions have been added to the infrastructure of the hospital. This includes a new Radiology department with a 64 slice CT Scan as well as the introduction of a new blood bank. With all of this in place, the feedback from patients and attendants is positive and the occupancy numbers continue to be strong.It should also be noted that the company has tied up with various agencies for increasing International business which has started showing encouraging results.

OBAMA announcing US's Rs. 44000 crore trade deal with India

US President Barack Obama is announcing trade deals worth $10 billion with India that are expected to create 54,000 US jobs. SO OBAMA SAYS Rs 81 LAKH IS REQUIRED TO CREATE A JOB IN USA
He`s also unveiling new export rules designed to make it easier for US companies to do business with the nation of 1.2 billion people.
Obama was to make the announcements in a speech to US and Indian business executives Saturday on the first day of his 10-day, four-country Asia trip.
The commercial deals include the purchase of 33 Boeing 737s by India`s SpiceJet Airlines and the Indian military`s plans to buy aircraft engines from General Electric.
For the most part, the deals were already pending. But the White House claims Obama`s visit to India helped seal them.

Some 20 deals are in the pipeline, including previously announced transactions involving General Electric and Boeing, although details on a $4.5 billion sale by Boeing of C-17 military transport planes were still being ironed out.

Outlining a series of measures to ease export controls, Froman said the president will support Indian membership of four key global nuclear nonproliferation regimes.
`This really includes India as a major player in a non-proliferation world...and it recognizes the nature of the strategic relationship we now have with India,` he said.

The four regimes are the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australian Group, which aims to reduce the spread of chemical and biological weapons, and the Wassenaar Arrangement, a multinational effort to control the transfer of conventional arms and dual-use technology.
Obama will also remove almost all of the remaining Indian defense and space organizations from a list of entities maintained by the US government to curb proliferation, and relax so-called dual-use rules for Indian firms that regulate technology with both civil and defense applications.
 
So can you just think and say who is benefited

We common indian and americans need food to eat, afforable house to live and secured jobs

We Indian

much needed cooperation in food cultivation which shows demand surging supply constrainted
much needed technical knowhow for infrastruture development for good road and removing traffic congestion and better data transfer
American also
would have benefited from investing in their surplus (which earn equal to nothing in America) in Indian infrastructure projects
created job white collar as well as black collar to American

instead Mr Obama is talking
about selling Military aircraft and Passenger aircraft (what is its use)

who will travel to USA if there is no jobs for Indians

who will travel to India if there is no job for USA commoner in USA

and about Energy deals (okay i welcome) India is Peak load energy starved

why should we (India as well as America) produce Missile if they are not going to be used what is the use of spending crore or billion on proactive defense when talk is on for development

Better spend money on eradicating poverty alleviating standard of living and providing secure employment to all

CEMENT SECTOR may call for merger / acquisition

J K Cement started its operations on May 1975 by setting up its first plant at Nimbahera in Rajasthan. An affiliate of J K Organization, which was founded by Lala Kamlapat Singhania, J K Cement is one of the leading manufacturers in the sector of cement manufacturing in North India. Starting with a production capacity of 0.3 million tons, the company has gradually increased its capacity; now the company has the capacity to produce 2.8 million tons. J K Cement is the second largest white cement manufacturer in India in regards to production capacity.

The company has access to huge limestone reserves which is used for manufacturing both grey and white cement. J K cement holds the highest market share in the state of Haryana, commanding over 18% of the total market share. The company's primary market for grey cement is in North India. However white cement has considerable demands in countries like Singapore, Kenya, Bahrain, South Africa, Nepal, Tanzania, Nigeria, Bangladesh, Sri Lanka and UAE.


Company Strengths

J K Cement enjoys certain vital advantages that have helped them in becoming one of the leading names in the field of cement manufacturing in India and abroad. First the company has proximity to huge reserves of premium quality limestone, as essential ingredient for cement manufacturing. Based on certain studies undertaken, it is estimated that the limestone reserves of the company are sufficient to support the planned production capacity for approximately 40 years.

Second the company has an extensive marketing network for grey and white cement both within and outside India. The company's distribution network for grey cement consist of more than 40 feeder depots, serviced by seven regional sales office located at Delhi, Haryana, Uttar Pradesh, Punjab, Gujarat, Madhya Pradesh and Rajasthan. J K cement's white cement distribution network comprises of 20 feeder depots and 13 regional offices. Besides, the company also has a total of more than 4000 retail stores, 22 sales promoters and four handling agents.


J K Cement Production Plants

The company has three major production plants located in the states of Rajasthan and Gujarat. The first plant of J K Cement was set up in Nimbahera, Rajasthan in the year 1975 with an initial capacity of 0.3 million ton per annum. With the incorporation of newer technology and modern equipment, the production capacity was enhanced to 2.8 million ton per annum. Located just 10 kms away from the Nimbahera unit, the Mangrol plant gets major benefits like technical and commercial assistance from the that plant.


The Gotan unit located at Gujarat which manufacturers white cement started production commercially in 1984 with a production capacity of 0.05 million ton per annum. Currently the unit has a capacity utilization of around 75% and an operating profit of 30% consistently. The unit has ISO-9001:2000 QMS, ISO-14001:1998 EMS and OHSAS-18001:2005 recognition.

J K Cement Products

The major products of J K Cement are grey and white cement. The grey cement produced by the company Ordinary Portland cement or OPC and Portland Pozzolana Cement or PCC. The OPC range of products has three grades which are differentiated by their compressive strength, they consist of 43-grade, 53-grade and 33-grade OPC. The cement products are marketed and sold under the brand names of J.K. Cement and Sarvashaktiman for OPC products, J.K. Super for PPC products and J.K. White and Camel for white cement products. Some other products manufactured by the company consist of: J K Wall Putty

Grey Cement J K White Cement  J K Water Proof  J K Cement Technical Experience

J K Cement Company has more than 25 years of experience in the Indian Cement Industry. Owing to this huge experience, the company has the best skills at its disposal for quick expansion of production capacity, maximize production efficiently and reduce the costs. Over the years the company has developed a considerable client base and has earned the distinction of having a strong reputation of quality production. Besides, the company has a reputation of constantly upgrading and efficiently modernizing the production capacities

J K Cement's manufacturing unit at Nimbahera was chosen by the World Bank and the Danish International Development Agency as one of the four training centers in India to serve as the Regional Training Center in North India. The operation of the training center gives the company access to state of art training aids, live working models, and technical expertise developed by well known national and international cement producers.

+++++++++++++++++

J K Lakshmi Cement was established in 1982 and is under the JK Group of companies. J K Lakshmi Cement Ltd is famous for its superior quality products and impressive performance. The company is one of the leading cement producing companies in India.
J K Lakshmi Cement has a manufacturing unit at Jaykaypuram, Rajasthan. The production capacity of this plant is over 3.5 million tons. All the production plants of the company are technologically advanced and make use of state-of-the-art machinery. Most of the company's plants have adopted the latest technology from Fuller International and Blue Circle Industries of USA. The raw material that is used by the J K Lakshmi Cement Company for the manufacture of cement is of the best quality. As a result, the quality of cement that is produced by the company is among the best that is available in the market.

In northern India, J K Lakshmi Cement was the first cement producer to be given the ISO 9002 certification. The company has also been accredited by the NABL (Indian government's department of science and technology) for its management system for lab quality. J K Lakshmi Cement is an important part of projects such as Sardar Sarovar Dam, IGNP, and also of corporations like Reliance, Airports Authority of India, L&T, and Essar.


J K Lakshmi Cement also offers products such as concrete ready mix which is sold under the brand name JK Lakshmi Ready Mix Concrete. It also sells plaster of Paris under the brand name JK Lakshmiplast. The J K Lakshmi Cement Ltd. has a large network of around 1,500 dealers who are mainly distributed across various states such as Gujarat, Rajasthan, Haryana, Delhi, UP, Punjab, HP, and J&K.

J K Lakshmi Cement has become the topmost company in India in the cement sector on the basis of its quality of products. With its emphasis on quality and efficiency and with an ever-growing network of dealers, J K Lakshmi Cement seems poised for tremendous growth in the near future.

INDIA Macro Economic Indicators

India Population 1,112 million
Gross Domestic Product for Q1 (April-June) during 2010-11 US$ 245.29 billion (Rs. 11,32,778 crore)

Overall Industrial growth (July 2010) 13.8 %

Forex Reserves (for the week ended 24 September, 2010) US$ 291.6 billion

Amount of FDI inflows during 2010-11(April 2009-June 2010) US$ 5.81 billion (Rs 26,418 crore)

Cumulative amount of FDI Inflows (August 1991 to June 2010) US$ 138.23 billion
(Rs 6,03,526 crore)
Exchange rate INR/1 USD 44.68 (as on October 01,2010)
Exports
August 2010 US$ 16.64 billion (Rs. 7,75,09 crore)
April-August 2010 US$ 85.27 billion (Rs. 3,92,811 crore)

Imports
August 2010 US$ 29.68 billion  (Rs. 1,38,211 crore)
April-August 2010 US$ 141.89 billion (Rs. 6,53,828 crore)
Average literacy rate (census 2001) 64.84%
Life expectancy for males 63.87 years
Life expectancy for women 66.91 years

Potential for Investment in India

India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. India is also one of the few markets in the world, which offers high prospects for growth and earning potential in practically all areas of business.

India’s biotechnology sector is set to become a $10 billion industry by 2015, CMD of Biocon Ltd, Kiran Mazumdar-Shaw said . She expects the industry to grow to $5 billion by next year. In 2008-09 it was $2.51 billion. “India’s biotechnology industry is at an inflexion point, and has attained a critical mass, Mazumdar-Shaw said. It now has a platform from where it can leapfrog and deliver exponential growth, she said. India is also becoming the vaccine capital.Clinical trials, agri-biotech and bio-fuels are becoming opportunities. There are a lot of growth drivers and trigger points which, she said, will deliver in the next five years.

In India's telecom sector will growth but revenue shall fall due to need for pentration to lower income class Tumbling voice tariffs contributing to the declining average revenue per user (ARPU) rates, will result in SMS volumes to reach 191.6 billion in India by 2013, predicts Gartner.By 2013, the country would have more than 750 million mobile connections; therefore the SMS usage per user would essentially drop.However, overall large base of mobile connections would support this SMS volume. Strong organic growth continues in Asia’s developing markets, with marginal subscribers turning to low-cost messaging as an entry-level service.In the mature markets of the Asia-Pacific region, SMS has seen sustained healthy growth as a result of steady price declines and increasingly generous SMS and data bundles," said Madhusudan Gupta, senior research analyst at Gartner. SMS contributes around 8% to value added services (VAS), which in turn contributes 10-12% of an operator’s revenue.


The Indian auto sector is likely to witness an overall growth of 10%-12% in sales during 2010 and a faster recovery in expected in passenger vehicle (PV) volumes—of 12%-14%—compared with 5%-6% for the commercial vehicle (CV) segment. The positive outlook for demand could result in a sharp increase in capex plans, which could offset the positive impact on credit profiles of higher volumes and lower inventories, said Fitch Ratings. The PV rebound has been supported by an improving liquidity scenario and restoration of consumer confidence; modest growth in industrial production, together with the government stimulus, has brought about stability in CV sales, though at lower levels than for PVs.Domestic CV sales grew by 22.3% during April-December 2009 compared with same period in 2008, building on the recovery in demand beginning Q4 09. However, growth trends have distinctly varied within the CV segment - depending on the tonnage capacity and end-use, as light commercial vehicles (LCVs) have been able to maintain their ground while medium and heavy commercial vehicles (M&HCVs) continued to face pressure due to the decline in industrial output.The M&HCV segment is now stabilising with the higher industrial production, while the LCV segment is showing a more rapid recovery. Fitch expects the full-year 2010 numbers to reveal moderate growth in the range of 5%-6% for domestic sales, with the first few months being driven by regulatory guidelines.


The Union food processing ministry has set a target of attracting investments to the tune of Rs 1 lakh crore in the sector by 2015.Subodh Kant Sahai, Union food processing minister, said: “We are expecting investments of Rs 1 lakh crore in the next five years. We are planning to increase food processing to 20% of the total fruits and vegetable produced in the country.”According to him, food processing has grown by 10% in India while value-added products have grown by 10-15% in the last five years.We are looking at a growth of 35% in value-added production by 2015,” Sahai said.

The 234 million tonne per annum (mtpa) Indian cement industry, which witnessed a double digit despatch growth in December 2009 and an overall growth thanks to infrastructure and real estate projects, is set to add 43.2 mtpa capacity during the next 15 months (January 2010 to March 2011).South India, which has already started feeling the heat of oversupply, will add the maximum capacity of 17.6 million tonne during that period. The next in line is the northern region, which will add 9.6 mt. The western, central and eastern regions will add 9 mt, 3 mt and 4 mt, respectively. “The southern market with 18 players having capacity of 1mtpa or more is the most fragmented one in India. Capacities of three new players (Raghuram Cement, Jayajyothi and JSW Cement with more than 2 mtpa each) will stabilise in the next 6-9 months. With sharp price cuts, new producers may find it difficult to break even, and this would likely to prompt some consolidation. All the three new producers are unlikely to participate in consolidation,” J Radhakrishnan, analyst with IIFL, said in his report.

The healthcare industry in the country, which comprises hospital and allied sectors, is projected to grow 23% per annum to touch $77-billion mark by 2012 from the current estimated size of $35 billion, according to a Yes Bank and Assocham report. The sector has registered a growth of 9.3% between 2000-2009, comparable to the sectoral growth rate of other emerging economies such as China, Brazil and Mexico. The growth in the sector would be driven by healthcare facilities, both private and public sector, medical diagnostic and pathlabs and the medical insurance sector.Of the sum, diagnostic and pathology services would account for $2.5 billion in 2012, more than double its estimated current size of $1billion. The growth in the segment is expected to be driven by consolidation in the industry and increasing insurance penetration among the country’s population. Healthcare facilities, inclusive of public and private hospitals, the core sector, around which the healthcare sector is centered, would continue to contribute over 70% of the total sector and touch a figure of $54.7 billion by 2012.The medical insurance sector would account for another $ 3 billion in the next three years, up from the estimated current size of $1 billion.


Steve King, CEO of Zenith Optimedia Worldwide feels that new and emerging advertising markets like India and China will power the global industry’s recovery, on the back of positive signals from developed markets like US, Europe. “India, with an approximate 10% growth, will certainly be in the top ten advertising markets in absolute dollar terms by 2015,” he told.Zenith Optimedia, the world’s third largest media-buying agency and an enterprise under the Paris-based Publicis Group is upbeat about India.It has brought fresh business worth $100 million in the country this year.India figures amongst Zenith Optimedia’s 20 largest markets globally, but over the past five years, it has been among the top three fastest growing ones. “Most of our markets are between 15 to 20 years old, so despite being here for only five years, this market has responded very well. Our focus here will be on winning local clients, apart from the international ones. By the next five years, we will have considerably closed the gap on the top two market leaders here,” King said.

http://www.indiainbusiness.nic.in/

Cement prices are expected to remain weak in 2010-11

Cement prices are expected to remain weak in 2010-11, economic think-tank says CMIE
We expect prices to remain weak in the March 2010 quarter and decline further in 2010-11," the Centre for Monitoring Indian Economy (CMIE)  http://www.cmie.com/

As new capacities stabilise, these will effectively contribute to cement production in 2010-11. Another 38.4 million tonnes of fresh capacity will come on stream during the year. Healthy demand and aggressive capacity addition will boost production by 13 per cent in 2010-11.
However, a more-than-proportionate rise in capacity compared to despatches will flood supplies in the market and put downward pressure on prices. Capacity addition of 21 million tonnes during April-September 2009 has already triggered a fall in cement prices in the second-half of 2009.
Prices in the north and west zones fell by three to eight per cent, while the decline in the southern regions was sharper by 15-20 per cent, it said.
However, with the onset of the peak construction season, cement dispatches are expected to grow briskly at 12.8 per cent, CMIE said.

Projects worth Rs 5.5 lakh crore to be commissioned during 2010-11

CMIE expects fresh investment projects worth Rs.22 lakh crore to be commissioned during 2010-13. Of these, projects worth Rs.5.5 lakh crore will be commissioned in 2010-11, Rs.8.5 lakh crore in 2011-12 and Rs.8 lakh crore in 2012-13.


The electricity sector alone is expected to commission projects worth Rs.4.4 lakh crore by March 2013. These will add power generation capacity of 81,000 mw. The private sector will take the lead in capacity addition. Companies like Adani Power and Reliance ADAG group are expected to add power generation capacity of 4,620 mw, and 4,640 mw, respectively. Tata Power and Jindal Power will contribute 2,400 mw each. Among the public sector undertakings, NTPC will add 5,040 mw, Damodar Valley Corporation 4,200 mw, and NHPC 1,861 mw by March 2013.
The steel industry is slated to add 729 lakh tonnes of fresh production capacity at a cost of Rs.2.4 lakh crore by March 2013. The largest contributor to this will be Jindal Steel / Power. The company has plans to commission 128 lakh tonnes steel manufacturing capacity by March 2013. JSW Steel will increase its capacity by 85.6 lakh tonnes, SAIL by 72.6 lakh tonnes, Tata Steel by 33 lakh tonnes and Bhushan Steel and Essar Steel by 27.2 lakh tonnes each.
Other industries scheduled to see huge capacity additions by March 2013 are road transport / allied services (additions worth Rs.1.6 lakh crore), telecommunication services (Rs.1.5 lakh crore) and petroleum products (Rs.1.4 lakh crore).
The current capex boom is expected help sustain the industrial growth momentum. The massive capacity additions worth Rs.9 lakh crore over the last three years and those still in the pipeline have not deterred companies from announcing fresh investments. Fresh investment announcements worth Rs.8 lakh crore were made during April-August 2010.

The continuous flow of fresh investment announcements reflects the confidence of Indian corporates and the foreign companies in the sustainability of the growth in demand.

Real GDP to grow by 9.2 per cent in 2010-11

The Indian economy is fast returning to pre-crisis levels.

Real GDP is projected to grow by an impressive 9.2 per cent in 2010-11, as compared to an estimated 6.9 per cent in 2009-10. Industry, agriculture and services are all expected to do well. Before the emergence of the Global Liquidity Crisis in September 2008, the economy had recorded more than nine per cent growth per annum between 2005-06 and 2007-08.
Consumer spending has bounced back strongly in the September 2009 quarter, and Private Final Consumption Expenditure is projected to expand by 6.5 per cent in 2010-11. Inflation in food-related items will decline significantly to 8 per cent in 2010-11, from an estimated 14.5 per cent in 2009-10.
Kharif crop production is projected to be good, assuming that rainfall is normal. Output of major agricultural crops is expected to grow by 10.8 per cent in 2010-11, after two years of decline. This will be propelled by higher yield and expansion in acreage in response to higher prices for agricultural commodities.
Corporate India will return to its growth trajectory from the December 2009 quarter. The growth in industrial production is expected to accelerate to 9.4 per cent in 2010-
11, from 8.4 per cent estimated for 2009-10. There will be an increase in demand too, as corporate wages and rural incomes rise. Record capacity additions will help the industry to meet this incremental demand comfortably.
Investment activities stayed intact throughout the crisis period. They will continue to remain robust in 2010-11. Lending rates remained stable in December 2009. They will continue to do so during 2010-11 as well, due to comfortable liquidity conditions.
Higher overseas inflows will ensure that the exchange rate of the Indian rupee averages at Rs 43 against the dollar in 2010-11. During the current year, it has averaged Rs 47.8 per dollar till 15 January 2010.

Clearly, the Indian economy's abundant reserves of resilience and fortitude are back on display
http://www.cmie.com/index.php

IDBI Bank updated ....

on 01.10.2010 the combined volume on IDBI bank crossed 97.15 lakh  on exchanges
BSE 24.17 lakh weighted avg price Rs157.62 closing at Rs 158.50 up Rs 6.1 or 4 pc
NSE 72.98 lakh weighted avg price Rs157.36 closing at Rs 158.45 up Rs 6.05 or 3.97 pc
many brokers and operators went short when first bump 2.5 up in price occured on mass buy at 11 am and were buying from market at flat price at 2.25 -2.5 pc up
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116


then came the next bump of 2 pc at 3 PM when more brokers / operators went short on share in F&O the market closed at 160 .45 today which is an uptick
http://www.nseindia.com/marketinfo/fo/foquote.jsp?key=FUTSTKIDBI28OCT2010--01OCT2010&symbol=IDBI&flag=1#

IDBI bank is the only PSU bank which is trading at nominal premia to declared book value and discount to actual book value considering the unrealised proft of Rs 79 per share in value of investments

In short if those who hold share in IDBI Bank understand the intrinsic value of the share and hold tight on it without fear of minor blip in the market price of share then the price shall move up and reach the intrinsic value
for latest updates on quarter / half year ended 30 september 2010
http://www.moneycontrol.com/video/news/idbi-bank-q2-net-profitat-rs-429-cr_495129.html

on 29.10.2010 the combined volume on IDBI bank crossed 97.15 lakh on exchanges
BSE 37.78 lakh W avg price Rs182.1 closing at Rs 180.65 up Rs 0.22 or 0.11 pc with high of 188.40
NSE 123.9 lakh W avg price Rs182.1 closing at Rs 179.90 down Rs 0.25 or 0.14 pc with high of 189.90
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116

2010VP23 Madras Cements

Madras Cements, a Ramco Group company is from South India started in 1987,
As on 31 march 2010 it is the sixth largest cement producing company in India having the capacity to manufacture 10.49 million tons per annum.

R R Nagar, Tamil Nadu (1.5 MTPA), Jayanthipuram, Andra Pradesh (3.65 MTPA), Alathiyur, Tamil Nadu (3.05 MTPA), Ariyalur, Tamil Nadu (2.0 MTPA), Mathod, Karnataka (0.29 MTPA)http://www.madrascements.com/mcl/Fact1.htm

It also generates revenue from Wind Mills the capacity of the Wind Farms owned by madras cements situated at Muppandal, Poolavadi, Pushpathur, Oothumalai and Mathodu has risen to 185.59 MW, comprising of 262 Wind Energy Generators http://www.madrascements.com/mcl/History.htm


The company uses the most advanced technology to manufacture cement. Madras Cements is mainly involved in the manufacture of Portland cement. Other than this, the company also produces dry mortar products and ready mix concrete. Madras Cements uses the modern dry process technology for all its expansion projects while the dust extraction and suppression system is used to control the fugitive emissions.

 
Future expansion plans in implementation
 
The company is setting up a 2 MTPA cement unit at Ariyalur, Tamilnadu at an

estimated cost of Rs 630 crore (for plant alone) which is slated to be commissioned by June 2011
The company has decided to invest in captive thermal power plants in cement plants to meet the plants’ electrical energy requirements. it has been decided to put up a 60 MW thermal power plant costing Rs.200 crores at Ariyalur and a 25 MW thermal power plant costing Rs.110 crores. at R R Nagar.

Financials as on 31 03 2010
The total paid up capital is Rs 23.80crore consisting shares of Re 1 each
the book value of share is Rs 65.5 per share (P/BV of 1.77)
as against the net worth of Rs 1558 crore the company has long term borrowing of Rs 2566 crore

The performance during the year 2009-10 was as follows
Turnover Rs.2825 crore
EBIDTA Rs.878 crore ( OPM 31.1 pc)
Interest Rs. 151 crore
Depreciation  Rs.196 crore
Income Tax Rs.177 crore
N PAT Rs 354 crore (NPM 12.5 pc)
EPS 14.87 (PE 7.56 at CMP 112.5)

Valuation

The valuation of madras cements is as follows

the current replacement value  for 10.5 MTPA installed capacity of cement is Rs 5512 crore
 (Rs 525 cr a MTPA )
the current replacement value for 186 MW wind farm is around Rs 930 crore
( Rs 5 cr a MW value realised by madras cement in recent sale )
the market price of investment in group companies is Rs120 crore
making a gross valuation of Rs 6562 crore as reduced by debt Rs 2566 crore
give a net valuation of Rs 3996 crore and further the company is adding investment worth Rs 950 crore
as against which the market capital is Rs 2678 crore

at the current market price of Rs. 112.5
the stock is trading at a discount of 33 percent to current intrinsic value of Rs 3996crore
and at discount of ** percent on the value ** on the capacity of cement and power under expansion
and at PE of  7.56 (2009-10)
leaving room for futher appreciation

Check out the interest of smart investors in stock


Promotors hold 42 percent of which 5 percent is encumbered / pledged
of the promotors Rajapalyam Mills Limited hold 13.83 percent ( valued Rs 370 crore)
and Ramco Industries Limited hold 20.72 percent ( valued Rs 554 crore)

Mutual funds & financial institutions hold 7.42 per cent of paid up capital
Government of Tamilnadu holds 3.36 per cent of paid up capital
Insurance companies holds 9.71 per cent of paid up capital
Foreign financial institutions holds 8.15 per cent of paid up capital
Bodies corporates holds 7.78 per cent of paid up capital
HNI holds 6.36 per cent of paid up capital

leaving 15.19 per cent with General public
who constitutes 97 percent of number of total no of shareholders 30160

tail lamp :
promotors is likely to make a preferential allotment of Rs 300 crore to meet the capital requirments of Rs 950 crore

Sector ideal for contra value pick

Sectors ideal for contra value picking at this juncture
 
Sector       Cement    Engineering    Media    Utilities
Apr '10     5,116.50   22,103.60   5,166.60  10,243.60

May '10    4,894.70   20,607.80   4,825.50   9,907.50

Jun '10     4,969.60   21,827.50    5,368.00   9,984.10

Jul '10      4,880.70   21,657.20   5,348.10   9,851.10

Aug '10    4,860.50   21,083.90   5,484.10   9,225.10

Sep '10    4,969.80   21,851.80   4,991.20   9,289.10

Reduction in
mutual fund
holdings            2.87     1.14     3.39      9.32

The above sectors may have lost lustre due to some reason which  when scenario changes shall come back to limelight

it may be price pressure in cement sector , slow growth and long gestation period in execution / capacity addition in engineering and utilities sector, overvaluation in media sector