World Markets:
Dow +189.
Nasdaq +41.
S&P +24.
Crude @ 66.
Nikkie -244.
Hangseng -458
SGX Nifty 2930 .
Tata Consultancy Services Ltd (Q2 FY09):
“Strong operational performance”CMP Rs547, BUYTarget price Rs650, Upside 18.8%
Dollar revenue growth in-line despite material offshore shift; volumes surprise on upside
Growth continues to be driven by the non-Top 10 clients; Europe records strong growth
Broad-based growth across verticals; amongst services, ADM and Engineering drive growth
OPM expansion of 230 bps qoq was far above expectations; operating profit grew 18.8% qoq
Huge forex loss and higher depreciation impact net profit growth
Employee additions were strong; company confident of achieving FY09 hiring guidance
Rate TCS as BUY with target price Rs650; short-term outperformance likely.
Ashok Leyland Ltd (Q2 FY09)
Volumes down 6.8% yoy and 4.6% qoq following decline in demand
Price hike of 5% have improved realizations for CV segment
Significant jump in revenues from engines and spare parts segment
OPM down 140bps yoy but to 8.2% primarily on account of higher overheads
Other income jumped by 156% yoy on back of Rs155mn profit on sale of investments in Indusind Bank Profitability further hit on account of 94.7% yoy jump in inter est cost
Volume growth to remain subdued in the remaining part of the year as the industrial production has significantly slowed down .
Steel Authority of India Ltd (Q2 FY09)
Topline surged 33.6% yoy and 11% qoq, boosted by higher realisations
Steel realisations rise 11.8% qoq, on account of higher sales of value added products
Provisioning for last year’s employee wages keeps OPM subdued at 24.6%
Impact of increase in coking coal prices to creep from Q3 FY09
We expect profitability to peak out in Q2 FY09.
Reliance Infrastructure Ltd (Q2 FY09)
Reliance Infrastructure (Rel Infra) reported revenue growth of 58 .2% yoy driven by higher realization in generation segment and robust growth in EPC segment
Higher cost of electrical energy purchased pulls down operating margin by 370 bps yoy to 11.2%
Net profit growth at 15.6% yoy impacted by marginal decline in other income despite lower interest expense
Tech Mahindra Ltd (Q2 FY09):
“Best play in IT”CMP Rs413 , BUYTarget price Rs625, Upside 51.3%
Revenue growth of ~3.5-4% qoq in constant currency tad below expectations; BTGS deal continues to ramp up
Company continues to carry the best revenue visibility in the sector
Material OPM improvement comes as a big positive surprise
Significant forex loss leads to sequential decline in pre-exceptional PAT
Better positioned than peers; reiterate Tech Mahindra as the best play in IT sector
Wipro (Q2 FY09):
“Relative risks remain”CMP Rs279, Market PerformerTarget price Rs288, Upside 3.2%
Revenue growth was ahead of expectations led by material pricing improvements
Retail, BFSI continues to grow strongly; broad-based growth across services
OPM decline was more than expected at 80bps qoq; higher other income pushes net profit growth Muted guidance for Q3 FY09; employee additions remain discouraging
Rate Wipro as Market Performer; expect relative underperformance in near-term.
Hindustan Zinc Ltd (Q2 FY09)
Higher concentrate sales lead to a 8.9% qoq rise in topline
Maintenance shutdown of smelters leads to a 7.6% qoq fall in metal production
Lower realisations and higher mining and manufacturing costs push OPM down 1,710bps yoy and 460bps qoq to 54.8% Fall in effective tax rate reduces the decline in PAT to 17.9% yoy against a 32.5% yoy fall in operating profit.
Marico Ltd (Q2 FY09):
Consolidated revenues recorded a strong 30% yoy growth at Rs6bn led by 11% organic and 3% inorganic growth.
International FMCG business registered 59% growth in revenues. Kaya clocked 67% yoy growth in revenues at Rs400mn.
Higher raw material and overhead cost pulled down operating margins by170bps. Net profit rose by 12% yoy to Rs471mn; excluding foreign exchange mark to market loss of Rs70mn the growth could have been higher at 24% yoy.
We expect Marico to wi tness a 19.1% CAGR in revenues and 20.5% CAGR in net profit over FY08-10E.
Chennai Petroleum Corp Ltd (Q2 FY09) :
Throughput declines 15%yoy on account of a planned shutdown for a period of one month
Inventory loss of Rs2.5bn and plunge in diesel spreads cause GRMs to fall to US$1.7/bbl
Reports an operational loss of Rs533mn, probably first time ever
Net loss of Rs1bn as compared to net profit of Rs2.3bn in Q2 FY08
GRMs likely to remain under pressure as demand slows across the globe and capacities come up in Asia and Middle East
Zee Entertainment Ltd (Q2 FY09) :
Higher contribution from sports channel business boosts topline by 43.4% yoy to Rs5.7bn
Revenue from DTH and international subscription doubled on a yoy basis to Rs271mn
OPM drops 710bps on account of higher programming cost and placement fees
Tax write-back of Rs792mn pushes PAT up by 83.3% yoy
Hero Honda Motors Ltd (Q2 FY09) :
Volumes up 28.5% yoy and 8.7% qoq leading to increased market share
Realizations up 6% yoy and 3.6% qoq as price hikes were taken
OPM increases by 119bps yoy and 159bps qoq to 13.6%
Other income jumped by 37% yoy on back of high treasury income
PAT rose by nearly 50% on back of superior operating performance
Volume growth to slowdown post the festive season but margins could remain strong as commodity prices have co oled off significantly.
“Strong operational performance”CMP Rs547, BUYTarget price Rs650, Upside 18.8%
Dollar revenue growth in-line despite material offshore shift; volumes surprise on upside
Growth continues to be driven by the non-Top 10 clients; Europe records strong growth
Broad-based growth across verticals; amongst services, ADM and Engineering drive growth
OPM expansion of 230 bps qoq was far above expectations; operating profit grew 18.8% qoq
Huge forex loss and higher depreciation impact net profit growth
Employee additions were strong; company confident of achieving FY09 hiring guidance
Rate TCS as BUY with target price Rs650; short-term outperformance likely.
Ashok Leyland Ltd (Q2 FY09)
Volumes down 6.8% yoy and 4.6% qoq following decline in demand
Price hike of 5% have improved realizations for CV segment
Significant jump in revenues from engines and spare parts segment
OPM down 140bps yoy but to 8.2% primarily on account of higher overheads
Other income jumped by 156% yoy on back of Rs155mn profit on sale of investments in Indusind Bank Profitability further hit on account of 94.7% yoy jump in inter est cost
Volume growth to remain subdued in the remaining part of the year as the industrial production has significantly slowed down .
Steel Authority of India Ltd (Q2 FY09)
Topline surged 33.6% yoy and 11% qoq, boosted by higher realisations
Steel realisations rise 11.8% qoq, on account of higher sales of value added products
Provisioning for last year’s employee wages keeps OPM subdued at 24.6%
Impact of increase in coking coal prices to creep from Q3 FY09
We expect profitability to peak out in Q2 FY09.
Reliance Infrastructure Ltd (Q2 FY09)
Reliance Infrastructure (Rel Infra) reported revenue growth of 58 .2% yoy driven by higher realization in generation segment and robust growth in EPC segment
Higher cost of electrical energy purchased pulls down operating margin by 370 bps yoy to 11.2%
Net profit growth at 15.6% yoy impacted by marginal decline in other income despite lower interest expense
Tech Mahindra Ltd (Q2 FY09):
“Best play in IT”CMP Rs413 , BUYTarget price Rs625, Upside 51.3%
Revenue growth of ~3.5-4% qoq in constant currency tad below expectations; BTGS deal continues to ramp up
Company continues to carry the best revenue visibility in the sector
Material OPM improvement comes as a big positive surprise
Significant forex loss leads to sequential decline in pre-exceptional PAT
Better positioned than peers; reiterate Tech Mahindra as the best play in IT sector
Wipro (Q2 FY09):
“Relative risks remain”CMP Rs279, Market PerformerTarget price Rs288, Upside 3.2%
Revenue growth was ahead of expectations led by material pricing improvements
Retail, BFSI continues to grow strongly; broad-based growth across services
OPM decline was more than expected at 80bps qoq; higher other income pushes net profit growth Muted guidance for Q3 FY09; employee additions remain discouraging
Rate Wipro as Market Performer; expect relative underperformance in near-term.
Hindustan Zinc Ltd (Q2 FY09)
Higher concentrate sales lead to a 8.9% qoq rise in topline
Maintenance shutdown of smelters leads to a 7.6% qoq fall in metal production
Lower realisations and higher mining and manufacturing costs push OPM down 1,710bps yoy and 460bps qoq to 54.8% Fall in effective tax rate reduces the decline in PAT to 17.9% yoy against a 32.5% yoy fall in operating profit.
Marico Ltd (Q2 FY09):
Consolidated revenues recorded a strong 30% yoy growth at Rs6bn led by 11% organic and 3% inorganic growth.
International FMCG business registered 59% growth in revenues. Kaya clocked 67% yoy growth in revenues at Rs400mn.
Higher raw material and overhead cost pulled down operating margins by170bps. Net profit rose by 12% yoy to Rs471mn; excluding foreign exchange mark to market loss of Rs70mn the growth could have been higher at 24% yoy.
We expect Marico to wi tness a 19.1% CAGR in revenues and 20.5% CAGR in net profit over FY08-10E.
Chennai Petroleum Corp Ltd (Q2 FY09) :
Throughput declines 15%yoy on account of a planned shutdown for a period of one month
Inventory loss of Rs2.5bn and plunge in diesel spreads cause GRMs to fall to US$1.7/bbl
Reports an operational loss of Rs533mn, probably first time ever
Net loss of Rs1bn as compared to net profit of Rs2.3bn in Q2 FY08
GRMs likely to remain under pressure as demand slows across the globe and capacities come up in Asia and Middle East
Zee Entertainment Ltd (Q2 FY09) :
Higher contribution from sports channel business boosts topline by 43.4% yoy to Rs5.7bn
Revenue from DTH and international subscription doubled on a yoy basis to Rs271mn
OPM drops 710bps on account of higher programming cost and placement fees
Tax write-back of Rs792mn pushes PAT up by 83.3% yoy
Hero Honda Motors Ltd (Q2 FY09) :
Volumes up 28.5% yoy and 8.7% qoq leading to increased market share
Realizations up 6% yoy and 3.6% qoq as price hikes were taken
OPM increases by 119bps yoy and 159bps qoq to 13.6%
Other income jumped by 37% yoy on back of high treasury income
PAT rose by nearly 50% on back of superior operating performance
Volume growth to slowdown post the festive season but margins could remain strong as commodity prices have co oled off significantly.
Godawari Power and Ispat Ltd (Q2 FY09)
Strong realisations continue to bolster topline by 86.1% yoy
Rising raw material costs lead to a 520bps yoy drop in OPM
GPIL plans to sell higher amount of sponge iron than billets in the next two quarters
Iron ore mining expected to start in Q3 FY09, earlier than expected
The company announces a buyback at a price not exceeding Rs135 per share
Tata Power Ltd (Q2 FY09)
Revenue growth of 45% yoy backed by sharp rise in realizations
OPM down 580 bps yoy due to steep rise in fuel costs
Net profit growth of 1.7% yoy not comparable due to change in accounting policy
Growth plans intact with funding and fuel tie-ups in place for most projects under implementation
Strong realisations continue to bolster topline by 86.1% yoy
Rising raw material costs lead to a 520bps yoy drop in OPM
GPIL plans to sell higher amount of sponge iron than billets in the next two quarters
Iron ore mining expected to start in Q3 FY09, earlier than expected
The company announces a buyback at a price not exceeding Rs135 per share
Tata Power Ltd (Q2 FY09)
Revenue growth of 45% yoy backed by sharp rise in realizations
OPM down 580 bps yoy due to steep rise in fuel costs
Net profit growth of 1.7% yoy not comparable due to change in accounting policy
Growth plans intact with funding and fuel tie-ups in place for most projects under implementation
Recomm.
Sell Relcap Below 658 Target 642/625.
Sell ONGC Below 760 Target 746/724.
Sell Polaris Below 50 Target 44/42.
All Asian Markets are Trading in red.
US Markets:
Dow -514.
Nasdaq -80.
S&P -58.
Sell ONGC Below 760 Target 746/724.
Sell Polaris Below 50 Target 44/42.
All Asian Markets are Trading in red.
US Markets:
Dow -514.
Nasdaq -80.
S&P -58.
October 17 2008 . Stock Market Updates...
15:34 IST
SENSEX ends down 669 points (provisionally) led by losses in Reliance industries, sbi and bharti airtel
15:31 IST
BSE Realty index closes down 12.14 pct, power index slips 8.4 pct, metal index down 7 pct
15:30 IST
BSE SENSEX provisionally ends down 6.3 pct at 9912
15:29 IST
Top SENSEX losers - Reliance infra, down nearly 14 pct, dlf down 12 pct
15:28 IST
Shares in Reliance industries down over 7 pct at 1296 rupees
15:25 IST
Banking Index down 6 pct; sbi, kotak mahindra bank, hdfc down 7-9 pct
15:24 IST
Realty stocks worst hit, BSE realty index down 11 pct
15:22 IST
10-yr bond yields fall 12 basis points to 7.64 pct
15:21 IST
Markets plunge, BSE SENSEX down 5.7 pct at 9971
15:19 IST
Finance Ministry source: expects cut in repo rate in rbi policy review on oct 24
15:17 IST
BSE SENSEX extends fall to 6 pct, down 642 ponts
15:16 IST
SENSEX trading at 9959, down 621 points as realty and power stocks suffer major losses
15:14 IST
Finance Ministry source: liquidity panel favours further relaxation in external borrowing rules
15:11 IST
SENSEX down 5.12 pct led by losses in Reliance industries, bharti airtel and infosys
15:10 IST
Finance Ministry source: liquidity panel yet to finalise interim report
15:10 IST
Reliance infra, jaiprakash associates top SENSEX losers, down over 10 pct
15:08 IST
BSE SENSEX falls below 10,000 for first time since july 24, 2006
15:07 IST
BSE SENSEX falls below 2008 low of 10,017.80, at lowest since july 06
15:06 IST
JAIPRAKASH Associates slips by 10 pct to 67 rupees, top SENSEX loser
15:04 IST
SENSEX heavyweight Reliance industries slips nearly 6 pct to 1315 rupees
14:57 IST
Elecon engg plans to review capital expenditure plans amid credit crunch - cfo
14:57 IST
50-share nifty index down 171 points (5.36 pct) as worries about a global economic slowdown weigh
14:55 IST
BSE SENSEX extends fall to 5 pct on day led by losses in Reliance industries and bharti airtel
14:52 IST
Reliance infra, ntpc, Reliance communications top SENSEX losers, down over 9 pct
14:46 IST
Realty stocks trade under pressure; unitech, dlf, indiabulls real estate down 8-10 pct
14:41 IST
NSEI block deal: bharat electronics 100028 shares at 685.00 INR
14:39 IST
BSE SENSEX down over 400 points; nifty slips by 136 points on worries of a global economic slowdown
14:37 IST
BSE realty index down 7.6 pct; shares of realty major dlf slip 8.6 pct to 296 rupees
14:31 IST
BSE SENSEX extends fall to 4 pct on day led by losses in Reliance industries and ICICI
14:28 IST
TOP SENSEX loser sterlite industries down over 9 pct to 271 rupees
15:34 IST
SENSEX ends down 669 points (provisionally) led by losses in Reliance industries, sbi and bharti airtel
15:31 IST
BSE Realty index closes down 12.14 pct, power index slips 8.4 pct, metal index down 7 pct
15:30 IST
BSE SENSEX provisionally ends down 6.3 pct at 9912
15:29 IST
Top SENSEX losers - Reliance infra, down nearly 14 pct, dlf down 12 pct
15:28 IST
Shares in Reliance industries down over 7 pct at 1296 rupees
15:25 IST
Banking Index down 6 pct; sbi, kotak mahindra bank, hdfc down 7-9 pct
15:24 IST
Realty stocks worst hit, BSE realty index down 11 pct
15:22 IST
10-yr bond yields fall 12 basis points to 7.64 pct
15:21 IST
Markets plunge, BSE SENSEX down 5.7 pct at 9971
15:19 IST
Finance Ministry source: expects cut in repo rate in rbi policy review on oct 24
15:17 IST
BSE SENSEX extends fall to 6 pct, down 642 ponts
15:16 IST
SENSEX trading at 9959, down 621 points as realty and power stocks suffer major losses
15:14 IST
Finance Ministry source: liquidity panel favours further relaxation in external borrowing rules
15:11 IST
SENSEX down 5.12 pct led by losses in Reliance industries, bharti airtel and infosys
15:10 IST
Finance Ministry source: liquidity panel yet to finalise interim report
15:10 IST
Reliance infra, jaiprakash associates top SENSEX losers, down over 10 pct
15:08 IST
BSE SENSEX falls below 10,000 for first time since july 24, 2006
15:07 IST
BSE SENSEX falls below 2008 low of 10,017.80, at lowest since july 06
15:06 IST
JAIPRAKASH Associates slips by 10 pct to 67 rupees, top SENSEX loser
15:04 IST
SENSEX heavyweight Reliance industries slips nearly 6 pct to 1315 rupees
14:57 IST
Elecon engg plans to review capital expenditure plans amid credit crunch - cfo
14:57 IST
50-share nifty index down 171 points (5.36 pct) as worries about a global economic slowdown weigh
14:55 IST
BSE SENSEX extends fall to 5 pct on day led by losses in Reliance industries and bharti airtel
14:52 IST
Reliance infra, ntpc, Reliance communications top SENSEX losers, down over 9 pct
14:46 IST
Realty stocks trade under pressure; unitech, dlf, indiabulls real estate down 8-10 pct
14:41 IST
NSEI block deal: bharat electronics 100028 shares at 685.00 INR
14:39 IST
BSE SENSEX down over 400 points; nifty slips by 136 points on worries of a global economic slowdown
14:37 IST
BSE realty index down 7.6 pct; shares of realty major dlf slip 8.6 pct to 296 rupees
14:31 IST
BSE SENSEX extends fall to 4 pct on day led by losses in Reliance industries and ICICI
14:28 IST
TOP SENSEX loser sterlite industries down over 9 pct to 271 rupees
News
Market outlook remains week despite surprise CRR cut by RBI.
Nifty support: 3080/2980
Nifty Resistance: 3150/3250
Nifty support: 3080/2980
Nifty Resistance: 3150/3250
The market is oversold and some rebound may be visible from lower levels. But there will lot of volatility and uncertainty. Selling pressure will be unavoidable at higher levels. Be cautious and trade in less quantity.
Sensex Resistance 10746-10975-11405. Support 10209-9951-9895. Nifty Resistance 3394-3502-3627. Support 3209-3198-3119-3041
Sensex Resistance 10746-10975-11405. Support 10209-9951-9895. Nifty Resistance 3394-3502-3627. Support 3209-3198-3119-3041
Recommendations for 13-10-2008
Nifty View:
Recommendations for 13-10-2008
Buy ICICIBANK 420CA @ 20- 22 Target 50 or Above. Stop loss 15/-.
We believe that weakness would continue till Nifty finds some support around 3,000 level. However, a V-shaped recovery is highly unlikely as the buying by insurance companies and mutual funds will not be able to offset the heavy selling by FIIs.
Nifty Support and Resistant Levels:
Nifty 3240/3000 and 3420/3660.
Nifty Support and Resistant Levels:
Nifty 3240/3000 and 3420/3660.
Recommendations for 13-10-2008
Buy ICICIBANK 420CA @ 20- 22 Target 50 or Above. Stop loss 15/-.
Recommendations in Futures and Options
Recommendations in Future and Option
Short Century Textiles Oct Fut @ Rs266 for the target price of Rs254 and stop loss placed at Rs272.
Short Pantaloon Oct @ Rs228 for the target price of Rs209 and stop loss placed at Rs242.
Short Century Textiles Oct Fut @ Rs266 for the target price of Rs254 and stop loss placed at Rs272.
Short Pantaloon Oct @ Rs228 for the target price of Rs209 and stop loss placed at Rs242.
Private airline carriers ask for Rs4,700cr bailout package from Government (BS)
Banks to stop lending to oil marketing companies owing to liquidity crunch and high debt (BS)
Finance ministry may ease norms for Indian non-infrastructure companies, especially those in manufacturing. (BS)
TCS acquires Citigroup Global Services for US$505mn and also gets US$2.5bn contract from Citi. (BS)
Tata Power may increase stake in Bumi Resources (ET)
M&M to launch green SUVs in US by early 2009 (ET)
Satyam Computers is considering Eastern Europe and Latin America as potential markets (ET)
Wockhardt signs a 10-year exclusive in-licensing agreement with UK-based pharma company to market a range of dermatology and dental products (ET)
Cairn is yet to receive ‘right of use’ for Rajasthan pipeline (BL)
Siemens sets up a new arm for rail transportation sector (BL)
US Department of Justice has withdrawn its motion against Ranbaxy. (ET)
Reliance Infra files an appeal against MERC order allowing Tata Power to sell 100MW to Tata Group’s power trading arm (BS)
Banks to stop lending to oil marketing companies owing to liquidity crunch and high debt (BS)
Finance ministry may ease norms for Indian non-infrastructure companies, especially those in manufacturing. (BS)
TCS acquires Citigroup Global Services for US$505mn and also gets US$2.5bn contract from Citi. (BS)
Tata Power may increase stake in Bumi Resources (ET)
M&M to launch green SUVs in US by early 2009 (ET)
Satyam Computers is considering Eastern Europe and Latin America as potential markets (ET)
Wockhardt signs a 10-year exclusive in-licensing agreement with UK-based pharma company to market a range of dermatology and dental products (ET)
Cairn is yet to receive ‘right of use’ for Rajasthan pipeline (BL)
Siemens sets up a new arm for rail transportation sector (BL)
US Department of Justice has withdrawn its motion against Ranbaxy. (ET)
Reliance Infra files an appeal against MERC order allowing Tata Power to sell 100MW to Tata Group’s power trading arm (BS)
Recommendations For the Day 7-Oct-2008
BUY TATA comm Oct Fut @ Rs456 for the target price of Rs476 and stop loss placed at Rs445.
BUY NTPC Oct Fut @ Rs167 for the target price of Rs182 and stop loss placed at Rs159.
BUY NTPC Oct Fut @ Rs167 for the target price of Rs182 and stop loss placed at Rs159.
SEBI has removed the 40% limit on P-Notes and has allowed certaininstitutions to hold 15% stake in exchanges. Capital market regulator, Securities & Exchange Board of India (SEBI) hasannounced some major reviews in its policies and new initiatives today. Ithas announced the removal of restrictions on the FII holding inParticipatory Notes. It has also announced policy measure to encourage SME Exchange and has allowed specific institutions to increase their stake instock exchanges.Relaxation In P-Notes Norms In a move aimed at easing foreign fund flow into the Indian stock markets,capital market regulator SEBI has removed the cap on overseas fund flowthrough offshore derivative instruments. Earlier, in the wake of excessiveliquidity in the stock markets, foreign institutional investors (FIIs) werebarred from owning more than 40% of their assets in P-notes(which areoffshore derivative instruments-- ODIs) and were asked to unwind theirholdings in India to comply with the cap within 18 months (which would haveexpired in March 2009). P-notes are financial instruments issued by FIIs to unregistered overseasinvestors who cannot directly invest in equity market. SEBI had imposed thecap one year back and had met with stiff resistance from investors. The proposal which was disclosed on October 16, 2007 led to a free fall withSensex losing 1,700 points in early trade on October 17 last year. Themarkets later recovered on positive statements from the finance minister andwent on to hit its all-time high in January 2008. "A lot has changed since the restrictions on PNs were imposed," said SEBIChief CB Bhave today. The SEBI chief also added that he will keep a watch onglobal markets before reviewing norms. He also added that SEBI is notlooking at emulating the short sales ban which has been imposed in othermarkets. The latest move by SEBI could give a much needed fillip to the Indian stockmarkets. The benchmark market index Sensex, was down by 724 points andclosed at 11,801 today, its lowest level since September 2006. SEBI has also said that it needs to review the structure of FII norms andunnecessary curbs need to be removed. However, there is a big question markwhether these changes would lead to fresh fund flow from institutions intoIndia. This is because global institutional funds have been pulling out ofIndia and also other emerging markets owing to the global credit crisiswhich has led to big fund houses declaring bankruptcy or sell-offs. As per a VCCircle analysis US fund houses have been on a selling spree whilethe European funds were buying in India. But over the last one week evenEuropean banks have started revealing their soft underbelly which couldshrink fund flow from Europe as well going forward. In that case the easingof norms related to P-notes may not lead to any major inflows.
Raising Holding Limit In Stock Exchanges
SEBI has allowed certain categories of institutions to increase theirholding in stock exchages from the present 5% limit. The SEBI Board hasdecided to enhance this limit from 5% to 15% in respect of six categories ofshareholders, namely, public financial institutions, stock exchanges,depositories, clearing corporations, banks and insurance companies.The move is likely to increse the competition among the bourses in India andcould see foriegn stock exchanges (New York Stock Exchange, Deutsche Borseand Singapore Exchange) who hold stakes in Indian exchanges increase theirstakes. It can also lead promotion of new exchanges as the new entitieswould have much more control in these exchanges and would be much moreinterested in development of these exchanges.
SME ExchangeSEBI has also moved forward with its intention of forming SME exchange/s.The statement issued by the regulator said that - "In recognition of theneed for making finance available to needy small and medium enterprises, theBoard decided to encourage promotion of dedicated exchanges and/or dedicatedplatforms of the exchanges for listing and trading of securities issued bySMEs. Multiple exchanges or platforms would provide the necessarycompetition in this space."This is a change in stance from SEBI from when Damodaran was heading SEBI.Then SEBI had announced that only a single SME Exchange would be set up incontarast to the recommendation of multiple exchanges now. SEBI plans to come up with a framework for recognition and supervision ofsuch exchanges/platforms. The statement also added that the enterprises witha post issue paid up capital of upto Rs. 25 crore would be listed on suchexchanges / platforms and trading lot would be Rs 1 lakh. The minimum ticketsize for transactions on the SME exchange would ensure that only highnetworth individuals were eligible, so that uninformed investors losemoney.
Bombay Stock Exchange had earlier launched a separate trading platform'IndoNext' for SMEs that did not work so well.
Raising Holding Limit In Stock Exchanges
SEBI has allowed certain categories of institutions to increase theirholding in stock exchages from the present 5% limit. The SEBI Board hasdecided to enhance this limit from 5% to 15% in respect of six categories ofshareholders, namely, public financial institutions, stock exchanges,depositories, clearing corporations, banks and insurance companies.The move is likely to increse the competition among the bourses in India andcould see foriegn stock exchanges (New York Stock Exchange, Deutsche Borseand Singapore Exchange) who hold stakes in Indian exchanges increase theirstakes. It can also lead promotion of new exchanges as the new entitieswould have much more control in these exchanges and would be much moreinterested in development of these exchanges.
SME ExchangeSEBI has also moved forward with its intention of forming SME exchange/s.The statement issued by the regulator said that - "In recognition of theneed for making finance available to needy small and medium enterprises, theBoard decided to encourage promotion of dedicated exchanges and/or dedicatedplatforms of the exchanges for listing and trading of securities issued bySMEs. Multiple exchanges or platforms would provide the necessarycompetition in this space."This is a change in stance from SEBI from when Damodaran was heading SEBI.Then SEBI had announced that only a single SME Exchange would be set up incontarast to the recommendation of multiple exchanges now. SEBI plans to come up with a framework for recognition and supervision ofsuch exchanges/platforms. The statement also added that the enterprises witha post issue paid up capital of upto Rs. 25 crore would be listed on suchexchanges / platforms and trading lot would be Rs 1 lakh. The minimum ticketsize for transactions on the SME exchange would ensure that only highnetworth individuals were eligible, so that uninformed investors losemoney.
Bombay Stock Exchange had earlier launched a separate trading platform'IndoNext' for SMEs that did not work so well.
The Reserve Bank of India on Monday cut the Cash Reserve Ratio (CRR) rate by 0.5 per cent to 8.5 per cent.
The central bank's move will infuse Rs 20,000 crore (Rs 200 billion) into the markets.
The RBI said in a statement: 'On a review of the current liquidity situation in the context of global and domestic developments, it has been decided to reduce the Cash Reserve Ratio (CRR) by 50 basis points to 8.5 per cent of net demand and time liabilities (NDTL) from its current level of 9.0 per cent of NDTL.'
'The change will come into effect from the fortnight beginning October 11, 2008. As a result of this reduction in the CRR, an amount of about Rs 20,000 crore would be released into the system. This measure is ad hoc, temporary in nature and will be reviewed on a continuous basis in the light of the evolving liquidity conditions,' the statement added.
'It may be recalled that on September 16, 2008, the Reserve Bank announced several measures to alleviate the pressures on domestic financial markets brought on by external developments in response to the bankruptcy/sell-out/restructuring of some of the world's largest financial institutions,' the statement said.
'Since then, there has been a sharp deterioration in the global financial environment with the number of troubled financial institutions rising, stock markets weakening and money markets strained. Central banks across the world have stepped up their liquidity operations, including coordinated actions, and some have banned/limited short selling of financial stocks,' the RBI said.
'These new developments have impacted domestic money and forex markets with a marked increase in volatility and a sharp squeeze on market liquidity as reflected in the movements in overnight interest rates and the high recourse to the LAF,' the RBI statement said.
The Reserve Bank also said that the 'overall stance of monetary policy in 2008-09 accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum, as set out in the Annual Policy Statement and reiterated in the First Quarter Review of July 2008. The overriding priority for monetary policy is to eschew any further intensification of inflationary pressures and to firmly anchor inflation expectations.'
The central bank's move will infuse Rs 20,000 crore (Rs 200 billion) into the markets.
The RBI said in a statement: 'On a review of the current liquidity situation in the context of global and domestic developments, it has been decided to reduce the Cash Reserve Ratio (CRR) by 50 basis points to 8.5 per cent of net demand and time liabilities (NDTL) from its current level of 9.0 per cent of NDTL.'
'The change will come into effect from the fortnight beginning October 11, 2008. As a result of this reduction in the CRR, an amount of about Rs 20,000 crore would be released into the system. This measure is ad hoc, temporary in nature and will be reviewed on a continuous basis in the light of the evolving liquidity conditions,' the statement added.
'It may be recalled that on September 16, 2008, the Reserve Bank announced several measures to alleviate the pressures on domestic financial markets brought on by external developments in response to the bankruptcy/sell-out/restructuring of some of the world's largest financial institutions,' the statement said.
'Since then, there has been a sharp deterioration in the global financial environment with the number of troubled financial institutions rising, stock markets weakening and money markets strained. Central banks across the world have stepped up their liquidity operations, including coordinated actions, and some have banned/limited short selling of financial stocks,' the RBI said.
'These new developments have impacted domestic money and forex markets with a marked increase in volatility and a sharp squeeze on market liquidity as reflected in the movements in overnight interest rates and the high recourse to the LAF,' the RBI statement said.
The Reserve Bank also said that the 'overall stance of monetary policy in 2008-09 accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum, as set out in the Annual Policy Statement and reiterated in the First Quarter Review of July 2008. The overriding priority for monetary policy is to eschew any further intensification of inflationary pressures and to firmly anchor inflation expectations.'
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Buy Nifty 3650 Put Option @ 40-45 range for safety.
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Buy Nifty 3650 Put Option @ 40-45 range for safety.
Futures and options are forms of exchange- regulated forward trading in which you enter into a transaction today, the settlement of which is scheduled to take place at a future date.The settlement date is called the expiry of the contract.
Futures
A Futures Contract is an agreement between the buyer and the seller for the purchase and sale of a particular asset at a specific future date. The price at which the asset would change hands in the future is agreed upon at the time of entering into the contract.
The actual purchase or sale of the underlying involving payment of cash and delivery of the instrument does not take place until the contracted date of delivery.A future contract involves an obligation on both the parties to fulfill the terms of the contract.
Options
An option is a contract that goes a step further and provides the buyer of the option the right without the obligation, to buy or sell put as specified asset at an agreed price on or up to a specific date.
For accruing this right the buyer has to pay a premium to the seller.The seller on the other hand has the obligation to buy or sell that specific asset at the agreed price. The premium is determined taking into account a number of factors, such as the underlying's current market price, the number of days to the expiration the strike price of the option, the volatility of the underlying assets, and the risk less rate of return.
Specifications of the options contract like the strike price, the expiration date and regular lot are specified by the Exchange.
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