The September series in the Rupee has had the leeway to trade closer to 56 and as markets in equity do not show a distinct hankering for the northbound journey, it is unlikely to lose the premium in further trading thsis week. However intraday trading in the rupee may remain downward bound thru the week from open rates and within a tight 10-20p range

The Commodities uptrend looks unlikely beyond the first  targets of 428 and 158 for Copper and Natural Gas and bears keep looking like they have a windows in commodities again leaving a healthy PPI and a not so distatsteful jump in base metals even if demand does pick up. Of course in OECD FDI India is quite neck to neck in FDI GDP ratios but China contineus to receive the largest share of FDI from its neighbours , even 5 times higher than OECD investment in China which has tapered off after the European Crisis. India's outward investment into China is unlikely to show up in a hurry in our listed companies' Capital plans

Posted via email from The India Investment Post

Bharti and returning Interest in banks remain a safe vantage point as the market tries to descend into chaos rollling over positions in  Dabur, Sesa Goa and hindalco and exiting Bajaj Auto and HCL Tech at the same time. Orchid's sale of aPI businesses to Hospira thouhgh low key is unlikely to bring interest back to the stock for some time. Markets have opened dull to remain range bound at lower levels throughout the day a fact o be repeated again this eek and next. However September series may still make up a good 300 point range on the Nifty in due course. 

The IT boon is finally done despite the defensive interest in August as short interests trawk markets for old highs and find TCS HCL and even Mindtree good targets to hit. Redefinitions of IT shares in MF and ETF portfolio will rerate these stocks adversely too to lessen the impact of exiting Infosys and may later pop interest in TCS hich definitely has alarger share of mouth as the only signature holding whenre the sector is indeed put on the backburner

The rebooted FinMin agenda is unlikely to survive on the disinvestment flyers and the INR1.44Tln in promoter IPOs also to sell dowwn stakes to a minimum of 25% public holding unwelcome liquidity  in these climes. Speculation interest will likely return on the upside by next Monday. The Vedanta Hind Zinc/BALCO sale may ( speculating) hit the public fora in early 2013 and really pop any emerging uptrend at that time

From eDabba to Miraaya ET also offers business models looking to penetrate Tier II tons as mint reports on the rising internet penetration in villages up 80% but still less than 5% of the rural population. Consumer companies like Marico have otherwise reduced ad spend as % of sales while HUL and one guess ITC ill manage with the highest budgets on A&M (15% for Lever) 

Personal SAvings have fallen below 10% of GDP in this Fiscal and the downtrend is unlikely to stop as "Urban" india dips into savings in tune with the much tighter global crisis. Settlements at Citi  ($600 m) still have bigger suits from Aviva waorth $3 B in damages to follow and Barclays' new CEO Jenkins is likely to drive out of Asia faster as he is not an investment bankeer, crude but effectiev starting points for gauging their capital participation in the India story. Asia is likely to stay out of fashion in September though unlikely to se and outflows as Euro awaits its tryst with liquidity and JAckson hole rerites global central bank expectations down a notch to go back to goevrnance led investment led consumptionand growth

Posted via email from The India Investment Post

Currencies have finally ended the series with the USDINR trading very much where it began a month ago, trading at 55.67 from 55.63 when the week began. Banknifty has virtually broken 10000 on the downside and looks like a good short but when the pop comes in the running correction is entirely at one's own risk. September is unlikely to trade above 56 either and October and November may then even see a rally in the Rupee if economic data plods back to a normal sequence of positives. 

China is indeed in the throes of not having recovered from the dontick in Exports to Europe and the same is likely resulting from its inept statistical signals on domestic consumption where retail remains the weak link yet keeps showing exceptional double digit performance in government statistics. Europe's coming liquidity event has likely become a run on commodities which have been dull after the bottom in April 2011 and the correction in Indian / Asian equities will see its first challengesin the rise in Commodities from there. Us equities saw bigger outflows in July already and the correction now is more a wait and watch as it completes Elections and has reached 1400 on the S&P500 

RR as the new CEA in the PM's Office will likely have a quick turnaround on procedural items but may restrain himself in public forums unless the FM has already synced the agenda or another few PC fronts are likey to strain the Jaitley quorum filter before the year is out.

Posted via email from The India Investment Post

Fervent buying has taken root in commodities as liquidity reaches commodities after having fueled equities for a few months and the uptick is so secular it has to be credibly so. 

Copper Nickel and NAtGas are all IntraDay BUY at 423, 900 and 152

Posted via email from The India Investment Post

Markets held well yesterday and it could let a few scrips more headroom to start the short position. Dr Reddys and Airtel continue to attract substitution from profit taking bouts that are now almost done and markets are sensitive to any further price deterioration in banks and unfortunately REC and PFC could bottom out sooner than later. infracos like MSME Lanco who have been disqualified on Portfbids could hurt much more and reality the free fall sector if indices deteriorate as a result.

Buy and hold includes banks and IDFC ( accumulate the feller) HDFC Bank is a better defense if markets remain weak and ICICIBANK and SBI a better bull front esp as SBI seems to have stopped its fall. Bank Policy has no other good times factored in and one looks forward to a good Q3 from India Inc. 

Posted via email from The India Investment Post

The shorts have moved to Automobiles, Maruti short in the Top 6 with Indusind joining UnionBank, Bank of India and CanaraBank in the fight for relevance in the day. Indusind apparently has been fighting expectations after  it ramped up its loan book and efforts in retail with a DB cards acquisition. 

However as banks continue to be questioned and SBI having withdrawn( conciliated with RBI) its sounds for a lower CRR after a snap aattack on the field by Deputy Governor KC Chakrabarty. I wonder if between Subir Gokarn and Chakrabarty we have the next Governor of the Central Bank. 

The US and European connections are about to be snipped off as the 'global' part of the rally is unlikely to continue into election months for the USA and Asia is fed by uneven cash flows after stronger injections having been given the lie after the last few months. There is nothing happening at Jackson Hole, WY either and most market sense would steep in the blankness of the summit and wait for more longer term appendages to policy from the event

Banking indices may still recover but likely only after noon tomorrow. 

Posted via email from The India Investment Post

Tuesday last I had illingly added new positions long ont he Banks and made great profits. That of cours e is thr problem of a rangebound market which hates correct trades as much as it hates to admit anyone is right and that becomes the point the markets turn. 

I am still ong of course, now ICICI offers another profitable trade from 930 to 1020, HDFC Bank from 590 to 600+, SBI from 1840 apparently (pre open quote) and that is still wobbly, as PSUS like CANBK and UnionBank seem to me more than index eit candidates but are favored by markets for their depth of fall. Unfortunate and not worth following though a couple of the good experts on TV18 and ET continue to like them on  technicals. Technicals work great for trading and Transformation and reform can follow as well but I would prefer stopping at Axis, BOB  and PNB and avoiding the rest forever. The NBFCs are up on the Home plate for short trades, led by RECLTD and PFC ill soon follo. The shorts are unlikely to see any action till late afternoon today and at best tomorrow. 

Again, the only thing missing are buyers in this market and no one would advise you to buy right now, leading to a gradual rerating of levels in most stocks unless another Titan or Jubilant comes along. Resource stocks continue through a global slumpa nd today markets will not react to lower Oil prices in the consumer markets either. Heathcare and Bharti remain ok bets to keep you invested. I am long in IDFC, ICICIBANK, YESBANK, RELINFRA, and ORCHIDCHEM

Posted via email from The India Investment Post

As yesterday went it was expected all day yet there was hardly any exit offered to banknifty long positions before the flash took them and this morning will likely be a bit more sane. The sentiment is not short as confirmed on the networks, esp on the nifty and tentatively on the banknifty, rather we are very bullish on bank. Exits though messy should be immediate and cannot be fine tuned or wait for the markets to save you. Though, exits for a long(short) in derivatives markets is usually a guided one before the trend firms up. 

Further corrections will rub off larger on the Nifty but longer term investors are safe as Nifty is not going below 5250 except for a week or so of intra day moves, possibly.  The Banknifty apart, other indices and individual picks are unlikely to follow in the wake but the indices remain rangebound. 

Posted via email from The India Investment Post

The scene was not very visually appealing and has virtually been canned with the Parliament reduced to a dog and pony show at the local river pilgrimage fair. However, the Bank Nifty surprisingly acts as a barometer of the mood of the day and is falling into not mroe than a 1030-35 range for Axis Bank and while business pretends to go on, India inc has to learn to live with the extraordinary impact of such acts in expiry week as it creates a fertile ground for amateur shorts to take over a uniquely bullish proposition which will turn around on the aftermath of expiry and then lose the rest of the momentum for India Inc. 

There are hardly minutes before Nifty crosses out below 5360 and Nifty futures below 5375 and this becomes the most often talked about flash crash jsut next to theNASDAQ flash of June and August. 

Posted via email from The India Investment Post

It seems like most of the more adroit stockpicking has left the market but at least a universe fo 20 scrips has survived the rally and India attention to be still available at value again. Except for Cairn and GAIL none are index scrips though, probably not even the CNX 500 and that is keep ing markets busy trying to find avenues as the markets are still not headed down. 

The Rupee is back at the razor's edge at 55.5, likely to bite equally big on the upside and downside and likely concurrent with the equities move. The best that could happen in the markets is it stays rangebound till Thursday but while the snetiment likely won't deteriorate sit could suddenly improve esp once the PM Addresses the issues raised ouside Parliament where he has been blocked. 

The Apple Samsung weekend decision of course has no local trade linked to it, none of the companies or even global futures riding on it. Automobiles remain agood pick for usand Healthcare primed for a big correction making it interesting times indeed. Some houses are Aalready encouraging a sell in banks to liquidate in profit and position in the not so known ones like Exide, BGR, and I am waiting for a good level in Banknifty to exit before the expiry

Posted via email from The India Investment Post

Forex Reserves Data of $288B and Bank Credit growth at less than 17% did not help matters as international investors get exposed to the increasing weightage to non governance in the mix in India. the large scale investments made by FIIs in the last three months preclude a quick death but any one significant withdrawal should set off the bells after the Banks had a dull weekend and the banknifty copped out of expiry targets yet again

However there is still achance that the markets go on from strength to strength as nothing ou tof the ordinary has happened last week in Indian polity and it is often argued that this opposition is sketchy at best and likely ineffectual and just trying populist stunt at the cost of more influence banks for their future. 

The NDTV suit against WPP will also be critical in improving some influence architecture in this large democracy where billions are lost in one such switch of tastes and ideas including our long term infrastructure map which has largely been ineffective because each advisor tries to force down a different approacha nd execution suffers no heed given to the years of work leading up to that time and nothing off the ground per se. 

Asian data for August is likely to follow a similar pattern from June and July with buoyancy inr etail following US success in the consumption economy again including low but increased credit card spending in Korea for the first half . China's Flash PMI for the month laid flat the claims of a bogus recovery as it dropped from 49.2 to 47.5 

Markets seemingly may not deign the fall on Friday as important esp if even some salutory chicken fix is made on the situation in parliament. Though the range for the index has moved up significantly and India' shas come out of a simple bottom in economic data unlike China's complex battles from increased impact of previous plan growth, India does not have the luxury of a direction in its Economic growth and the Expiry could be an easy target for bears before the long term trends show their hand again. 

Posted via email from The India Investment Post

Power breakdowns post rains in Bangalore prevented the report from coming out and that means all backup arrangements were suly xhausted before the sun came out as the Banks took down the otherwise resurgent index sticking around 5400 levels and things could look up in the afternoon session still to go.

The Bank nifty is trading near the day's low at 10350 and will likely close around 10410 at the end of the day. the incessant calls for material proof that things are looking up from people who missed this rally have come into play, usually ignored unless real investors have been missed and thus this break might yet be temporary for the expiry at hand and you could just be getting better pricing for ypour sold puts on Thursday 30th August. But again, maybe not. the indices could very well require investors and late bettors to bite the bullet and exit longs indeed if the banks do not recover after the news of the PSU bank strike is eagerly followed despite chids being proved good int he 2G judgments of the day which had hitherto got more attention

Indian polity's desire to Twitter block the next few inciting hatred did nto go down well with the free press or watchers on ( which we see many  of) IFCI is down on conversion taking government public stake to 59% and Coalgate decisions are yet to come even as RPOWER continues to suffer after Krishnapatnam despite the better run from REl Capital easing pressure on the group and Rel Infra sidestepping the disqualification in the Delhi Airport Line ( akin to the Piccaddilly Line and usually refered by us as such ) 

Posted via email from The India Investment Post

Day 4 because Day 1 August 20 was indeed a holiday. Market could finally find the negligent trades of the bulls bountiful enough for a hit on Thursday 2:20 pm as they hit the indices to below 5400 for seconds and now a 5400 holidng is stilla warning for those looking for a substantial uptick to close on Thursday , the 30th, Expiry day.

BankNifty broke faster for the upswing in ICICIBANK and the others was a spike in itself in the morning and no buyers were around, prompting the big fall. Ofcourse the market could indeed stabilise over 5400 for the remaining four sessions and exiting any solfd puts would be intemperate unless the market can hold below 5390-5395 after a swipe below 5400. if they indeed continue above 5400 now that chance could come early on Monday or this could even happen before the week ends tomorrow. 

AS of now, stay invested. The Rupee has not responded to the move either and neither is the market looking like it has seen any liquidation of 5400+ positions for the expiry

Posted via email from The India Investment Post

The Rupee is basking in the glory of the Euro which near 1.2640 levels another 100 points ahead becomes ripe for a correction soit may limit this series' upside in equities and not be worth shorting Crude  yet. Copper is not going to rise and the action remains largely in agri commodities with Gold and Silver doing the slow waltz to last this marathon. 

equities have likely done their bit till 2:30 to 3 pm timeframes and will rest lower in the meantime. iscussions of political instability are unlikely to rise to a crescendo before the weekend or tomorrow afternoon at best. We are long on the Nifty and the banks, even real estate, this week 

Posted via email from The India Investment Post

Bharti is the big move of the week as the markets otherwise re rate RIL and other index stocks back to the new levels and Bharti pays for its subdued profitability that is finally seen by the market as continuing for a couple of years. Also on hand is its losses in market share and pricing of old spectrum with new tariff, keeping a new bottom of the utmost importance and costing more than a dozen mutual funds dearly in their bid to changeover the heavist weighted investments. Many of them are named blue chip funds! 

The Vedanta offer was amazingly bidextrous too, the group managing to underwrite debt of INR 1 T if it does get this offer accepted by the government and paying INR 21000 Crores or 10X times the suspected settlement price for BALCO and Hindustan Zinc earlier. That means that any new optimism on Sesa goa and Sterlite is more than a little misplaced though. Back to the longs, for the market is indeed in a bull orbit, I still bet banks and SBI and Bnk of Baroda stand out despite the ongoing strike . BOB moves from 645 to 665 likely and many on the networks including Miutesh Thakkar and SS back that one. 

Markets are actually trying to keep the bubbly from frothing over and the markets would thus move up but as cautiously as the last 5-6 weeks. A new move on Indusind however is best missed till the August series is settled. F&O arrangements continue on selling the 5400 puts many did not in expected correction yesterdaya s the market carries on from yesterday's first hour correction to newer levels, its only sign of impatience and a sure trap for the bears waiting for a bigger correction esp in the series that expires next Thursday

Posted via email from The India Investment Post

The Fiscal Deficit disregarded by everyone except the polity entrusted with taking care of it, the markts have moved into a stronger bull orbit eased into place by not existing but foreseen liquidity from the Eurozone as other markets ecept for India may not have the fundamental strength and "systemic" growth push carrying them when the Euro indeed does not act on its proposed bailouts for another three months. It is also unlikely, given the propensity of Fixed income investors to return to US treasuries that Indian markets will really get any upgrades because of the move but then 6000 on the Nifty is much like an old sweetheart you met again than a new date for the nationof few but blatantly positively biased investors. 

The last six months were equally harrowing for the markets and no economic data series helped the cause of the markets upmoves during that time, now beyond it just by another stable government and a ferw trusted aides in position

The Money Olympics of course, much like the real ones already have many others with a track record and yet, better infrastructure facilities and a researched background. We are left with a few Silvers speaking to our inherent underrating by the "forever in trouble" rating agencies and a less than half a dozen india bulls taken seriously internationally, Mongolia and Indonesia inching up to catch up to India's weightage in the Asia and Growth indices. But all that is later.

We do not need these medals to vouchsafe for our 30% growth in profits that most top quality corporates have again re affirmed in June despite the general hit to profitablility and the weakness in the Rupee in the first half of the year. The Rupee too, could move back to 54 levels if the markets remain buoyant but I wouldn't blame you if you did not sell your Dollars in anticipation. Gold is up again and this year looks bad for the Oil bill with the Euro keeping its survival news and billling down the Dollar, increasing the Cost of newly flagged Iranian and non Iranian oil from the Middle East much higher despite increased domestic production in most non OPEC continents.   

Posted via email from The India Investment Post

The markets have corrected, though one could say 'not enough' but unlikely to leave the safet of 5400 on the Nifty and probably not close the series above 18000 either. If you can please sell a couple of 5400 Nifty / 10600 anknifty puts even now as the markets are stable.

Orchid Chem is back at 112 and Bank nifty finally responded ot its own steam oonly an hour after the wires spoke of Chids approving 49% FDI in insurance and Pensions and that is up for 24% earlier, helping investors like Mitsubishi, Standard Life and Prudential who are part of successful insurance ops and would like to contribute Cappital to their India operations to partake of the renewed vigour in those investment markets. 

European Markets are correct ith the Euro still atabove 1.2468 achieved yesterday but that is just a matter of time. Today's post equity currency session till 5 may thus see a resurgence of the Dollar in which case Crude could cap out at $96/$116 levels Natural Gas realisations and scrips like GAIL and Petronet LNG are down consequently

Tata Motors' new portfolio of cars seems like something to start a new slate with and Infosys similarily is trying to capitalise strategically on the market recovery extending its shelf life with substitution fronm others where profits are likely to be booked. It may not have worked except that the fewer corrections and a healthy move in the markets looks like the lasting move to 6000 than anything else and you could probably choose any secotr or market as long as the India growth story does recover later

Posted via email from The India Investment Post

Oil has been enjoying the weakness of the dollar and still going strong at above 5400. Agri commodities have started responding to global shortage cues with wheat,  soyabean and rice firing up the kilns as infrastructure building activity comes close to the only economic activity likely in the Indian markets. Seriously though. Copper ain't a buy and the rest is a house of cards as Euro'e new found week of stability is likely to flake off back to 1.22-1.23 levels tomorrow if not today after the resurgence to 1.25 on the shortened trading week in Asia

Euro stability is hidebound by liquidity responsive flows and Spain's bailout process is unlikely to move for the next 6-8 weeks let alone keeping the flows of August in September, when more report based political action is awaited as eagerly as the rate cut, belied in Australia, UK and even the Euro zone many times in the last six months

Posted via email from The India Investment Post

The jump has happened and now you must wait for the retraction to complete, which the markets have seen a clear aversion to doing the last 2-3 months. Of course it also meant the market stayed above key support levels throughout and that means people resist cheaper scrips as selling and buying back is a waste of transactions for many portfolio managers and investors. 

However, the market will not start another move till it is sure the downward forces haved moved it to a lower equilibrium and that just means waiting till that happens at 5380-5390. If it indeed falls below 5365, run for the hills and stay in cash. Expiry is near and anything except sold puts ( nearer 5375 than 5425) of 5400 and 5300 strikes anything else is contraindicated and easy meat for the onlookers waiting for a bigger correction than the equilibrium.

Banks should be worth investing at such lower levels including SBI and HDFC BANK. Axis and ICICI Bank are not necessarily going to lose too much of the regained premium eitherbut YES and KOTAK can probably take a break and Union , United, Karnataka and Canara Bank resume downward with BANKOFBARODA holding recent recovery gains.   

Posted via email from The India Investment Post

Though Indian markets came and they conquered nearly to 5450, now is not the time to gloat and run ahead of the pack as market premiums remains sensitively aligned to everyone except the consumer staples and FMCG and the consequent overweighting of healthcare and the select stocks that have moved means the Bank nifty wil take another break to let others fall back and probably before the week is over we will again see the move beyond 5450 and today below 5400 enabling fresh buying within the yet expiring and not expired August series in Puts to be sold and calls to be bought, the market giving another chance for derivatives volumes in this series to balance up if it does fall below 5400 before which no buying is likely and any upmove like chancing Dravid's arm as leg spinner an hour befor eIndia's batting opens. 

Of course a heavy cricket season starts at home, for the first time devoid of Dravid completely and with the U19 team doing well, another double awaiting India in both the Juniors and Seniors' world championship. 

Coal is a non starter as an issue and unlikely to affect business. infy is unlikely to rise but the news is a happy one. We mistakenly assumed Maruti was near 1230 ( I misheard a commentator) when i said short it as the big long is justified by investor interest in future prospects and not by consumption levels recovering on the ground and the happy news of a plant reopening and a legal solution available could mean bigger moves up, biocon has not truly explored potential and Sun Pharma has fulfilled the promise it made a few years agoi with Taro, in country SPARC product sales and pipeline and more. Tata Motors and Tata Steel are availabel for those considering a switch at the top abut as i said the index will likely hit loww notes before 11 am itself or before 1 pm at best and then reaffirm if it indeed wants to go up. If it does not, it will hang on weak shoulders tomorrow and even on Friday till it does. 

Posted via email from The India Investment Post

The bears have come, esp after having targeted the bank nifty trying to make a public play before the 2:30 hour begins in equities but banks have steadied ships after commentary by bank CEOs on the PMEAC report and ratings among others. 

As of now, the market looks set to close above 5400 on Thursday bu tthat could just be keeping the run down / exit for the expiry afternoon and 5350 is the safer level. Tata Steel and Tata motors/Reliance bait has not grabbed much interest and TCS and Infy have struck out at new levels too. Thursday' Expiry target is key for most active tradersand the underlying trend being bullish makes it almost impossible to add further buying in the September series which as the near month has attracted very high fluff premiums in the preceding week/fortnight Banknifty for example still enjoying a 100 point premium

Orchid and OPto have recovered from revenue shocks where most already kknew the dip in Sales from Ascend Pharma Sales /others in Opto being lost and the new series could see renewed long trerm buying by a 2-3 FIIs apart from more derivatives based interest.

Posted via email from The India Investment Post

Data for CPI was exceptionally subdued as commentators on TV18 (Latha V and Sajid) attributed it to a higher base effect not backed by food price inflation. 

Urban series in CPI is slower yet above 10% at 10.1% from 10.4% and rural is yet inching up as a larger sign of undercurrents of unsatisfied inflation with rural CPI up to 9.65% as in the previous series

The net CPI is 9.86% in today's announcement another optimistic end after a 9.96% in june series data

Posted via email from The India Investment Post

At 2400 Infy has reached its limit bound range where it started from 2200 just last week and the rally has been good reassessment for the industry as welll, the results season really scaring longstanding sector watchers who now realise their folly of having equated IT with the Indian Economic future per se as the industry gets seriously underscored on lack of redefinition of offerings more suited to a passive nineties in the sector. CTS aggressive competition like HCLT has done well bu tthe pretense will wear off quikly.

Copper has reached the zone of no action with global movements trying to push it to $3.42 and then falling back to $3.35 per ounce where it was in the Indian marketsat around INR 422-423 levels. Crude is finally falling but not being in a hurry to fall internationally, Indian markets will capitalise on their own impatience and push the oil bill higher till Crude ( not brent which has fallen steadily) indeed does a mini crash from $96 levels

No, India companies are not making any more global deals with all buyers ending up in the list of top 10 debt holding conglomerates including Adani and Reliance ( between 70-80,000 Crores or ~ INR 1 T) and infracos Lanco, GMR and others also hit by debt "( mint opener in print livemint.com) but Reliance debt pile is manageable to say the least and RIL is a good trade. 

Posted via email from The India Investment Post

A rain shortened test match if you will, we have four days left in the week and three days to expiry and dutyfully, 5400 puts have been sold to the best including yours truly. The rest of the week may indeed become suspensefull as it is unlikely to close above 5400 per se, the select club inside trying to see this as reason to brealk the market and for you to trade intra day right now will be contra indicated despite any comfortab;le SEBIU and P Chidambaram pronouncements. Sell at nearer 5330 than at 5375 if you want to be safe (Auugust Puts of 5400 strike) 

Posted via email from The India Investment Post

Of course at 5400, Credit Suisse has been among the first to suggest switching out 'staples' of this market rally from Lupin and Sun Pharma to Reliance and Tata Motors, but there are others who had switched off banks for a whole week or ten days that will come back to keep this rally juiced and Nifty moving firmly above 5400 midweek before Bernanke's machinations cause a little bit of seasickness on the voyageful sailors

The Rupee as always starts the week scared of such firm commitments to the Equity Capital markets which have hit $10 B early last week. The market is also trying to capture for its select club, the traders who are trying to lock in the 5300 and 5400 puts on the bullish side for the index and the pre-open session is week. The Rupee again instigated to reach 55.9 intra day and come back 

Coal india is still sagging though switches could have helped the stock. Fixed /income yields at 8.23% would have no room on the upside and if they do move up instead should be taken as a strong beaish signal. SBI CDS quotes were a gigh 320 basis points last week according to Reuters reports and that is shocking given its actual survival map being a successful bore except for 5% NPAs vis a vis Derivatives exposures worth $100s of billions at RBS, Barclays and the Big 4 in the US which have CDS spreads subsiding below 200 basis points

Maruti might be good for a short but hardly others and ITC should not be exiting the rally on profit taking yet. 

Posted via email from The India Investment Post

The Global Economic situation does hit Export groth but India will manage ith a 3.6% CAD or just $67.1 B from the current PMEAC Economic Report being read out by CEA C Rangarajan and it is a telling statement on what India would be at this bottom of the secular Global Economic cycle. The GDP is near $2 T, the Fiscal Deficit forecast still a little conservative one thinks at 5.06% and includes probably disinvestment and auction revenues for E&P in energy which seem to have dried up but the report sems a realistic assessment of India's Economic performance and not just potential. Growth in the report looks at 6.7% for FY2013 and that would indeed be a super achievement for us. 

The trade deficit will be close to but below 10% with the overhang of budgetary restriction on Gold and Oil imports down almost 20% each and the current surpluses otherwise at 6.1% for the 3.6% deficit. GDP growth of 6.7% points out that poor performance from Farm sector at just 0.5% is a factor. The PMEAC also recommendsa diesel hike in three phases and the Retail and Aviation FDI as a factor promoting the degrowing investment and savings, down below 30%

The PMEAC State of the Economy report expects Industrial growth to pick up in the second half of the Fiscal.

Posted via email from The India Investment Post

Not that many are, being based on fundamentals alone and not able to find a fair hook on timing. Howevrt he FMCG Health calls are fine as a sectoral calls and I disagree ith both exits from ITC and ramping on new Henkel owner Jyothy Labs. Both recommendations define  a very different time horizon than the market horizons currently and this particular rally is obviously not a choice for the house. 

Jubilant Foods and Titan shorts are not going to work for long either. the infra NBFCs in Power from PFC and REC to PTC may take a break here as well, IDFC could restart on the run from 137 or 139 itself and has stabilised by itself sicne the morning. 

Quantum, strangely is better placed with today's picks ( on the ticker) is it just RELIANCE?  

Posted via email from The India Investment Post

Cotton is not coming up any soon, the uptick in Soya is atleast a month away and any rise right now will be a 15 minute trading whoop! and copper may not rise much from here but Copper is a good short once it hits 423, and Gold is a great long. Going short on Silver  or Oil is not goint o yield much till the end of August series from the looks of it. 

The Pound is also a good long and if the market so deigns it may wel lshift from using the Euro as a balancing cog to the Pound in this regard letting exporters sell at that just below 56 levels into the bank

Posted via email from The India Investment Post

SPTulsian looks good for HDIl, I always liked that scrip and Phoenix and Orbit may only come in later as the air clears on the sector unfortunately DLF and Unitech are not fine yet and despite available avenues Kingfisher is just running up bills and JETAIRWAYS and SPICEJET continue to sem to be penalised fo rthat so they may continue to be good picks but not for trading a 6 week horizon at these levels. 

IDFC call on ITC may not hurt the stock immediately but exits will continue and it is good for the long term portfolios you should have as a base for your trading corpus

ICICIBANK should start spinning back to top from below 950 or even directly on open if you have been holding it and HDFCBANK reaches stronger orbit if not today then tomorrow or Monday on Eid

The Rupee Dollar and DEPB exporters realise the Dollar's been had and should be selling volumes of Dollars in to this continuing strength int he Capital Markets, RBI reference rate unlikely to move much

Posted via email from The India Investment Post

MF expenses, Promoter holding IPOs what more do we need!

SEBI' spre eminent third sense has been working with eIPOs and SROs for direct investments in the Indian Capital Markets as well as the rewards for going beyongd the mega cities in MF expenses and exit loads written back. Minimum Applications of 10-15k would be a logistical revival but still no one has really gone into a statistical basis for that minimum app and assuring all investors allocation yet this step is more advanced than the best capital market legislation globally. hat waould it take for this new frontier of GS and JPM to beat Schenzen and Singapore in Derivatives market volumes esp in rates, currencies or both. We definitely have a communication advantage. It can be said right now becaause with liquidity the inflows have gravitated to our markets yet much more needs to be done to set up clear infrastructure for trading and settlement not just for retail education and enterprise but also for enabling a professional Treasury in every PD licensee and not just a single trading room in the Mumbai HO

Banks will get the volumes in Fied Income markets, not retail investors, even if it is from QFIs abroad and in new Structured and CDS products. 

Markets are going to stay green after yesterday's climb down but it is unlikely to be a ratificationof SEBI's reforms which still count to too little and in the evry least just clear decks for a new standoff with promoters holding 90% interest in their company instead of the mandated 75% or even around the 10% mark for banks and financial services players

The flat markets have hit futures volumes but Options interest said to be coming back is even more fickle. 

Posted via email from The India Investment Post

Up 3% on the result announcement minutes, IDFC is likely starting this bull orbit again, fresh at 5380 levels. IDFC does a NII of INR 6.98B on a Sales of INR 17.7B for June 2012. Loan Book has cross INR 500Bln, growing more than 30% . Total Assets are north of INR 650B

PAT of INR 3.8B means annualised EPS crosses into double digits at over 10.1 

Cnsolidated Total Income includingMutual Fund and PE operations is closer to INR19 B and EPS and Net profits hardly move for the Consolidated entity

Posted via email from The India Investment Post

Commodities are in for a churn again after the brief run up in Oil as we promised, with China reporting dismal FDI and the world going bull on GOLD following the predilection for the metal in India. GOLD is a Strong buy but not in trading terms , but in positional terms, Silbver might yaw even at $27 or INR53.5k likely down than up, but gold carrying and Oil is tired internationally at $94/$115 and will be down from INR5300 to even 5150

The Rupee is quite done too on the downswing, unlikely that the Dollar will hit the high notes beyond 56.5 in August but that spot will cross 56 sooner than later first and 56.3 probably before turning back as August starts unwinding next week into spot rush in terms of price targets

Posted via email from The India Investment Post

Commodities are in for a churn again after the brief run up in Oil as we promised, with China reporting dismal FDI and the world going bull on GOLD following the predilection for the metal in India. GOLD is a Strong buy but not in trading terms , but in positional terms, Silbver might yaw even at $27 or INR53.5k likely down than up, but gold carrying and Oil is tired internationally at $94/$115 and will be down from INR5300 to even 5150

Posted via email from The India Investment Post

The start of something big!

LICHSGFIN is lying dormant today with NBFCs as an industry yet placed well and seemingly no snares on the horizon for NBFC regulation with a well performing industry doing more for the social causes of the Central Bank including affordable housing than many are willing to admit. 

Results

June quarter income which had grown 37% in the previous year to September 11 (INR 15.4 B) has grown fiurther to INR17.7 B in June 2012, up sequentially by slightly less than 5%. on a June to June comparison, growth has been 23% Y/Y from INR 14.2 B . NII is still less than INR3.8B and after taxes, Net profit is INR 2.27 B for an annualised EPS of over 18.

Valuation

On ttm basis EPS is likely near 20 than 18 and with NIMs safe at these levels the company could well be looking at targets of 400 in institutional advisories. 

Competitive Universe

Scrips like GIC Housing have also generated interest with the perfect business model of LIC housing on display and above par returns on its investment portfolio as well as the potential growth of scalability by leaps and bounds

Housing Loans Portfolio

Loans to developers have fallen to less than 4 B in previous years' quarterly increments itself that rerated the stock and the sector and retail disbursals are still more than INR 45 B in a quarter, sanctions 49B. Total Loan portfolio is INR 656 B, up 24% on year and NPAs are less than 0.4%

Posted via email from The India Investment Post

The start of something big!

LICHSGFIN is lying dormant today with NBFCs as an industry yet placed well and seemingly no snares on the horizon for NBFC regulation with a well performing industry doing more for the social causes of the Central Bank including affordable housing than many are willing to admit. 

Results

June quarter income which had grown 37% in the previous year to September 11 (INR 15.4 B) has grown fiurther to INR17.7 B in June 2012, up sequentially by slightly less than 5%. on a June to June comparison, growth has been 23% Y/Y from INR 14.2 B . NII is still less than INR3.8B and after taxes, Net profit is INR 2.27 B for an annualised EPS of over 18.

Valuation

On ttm basis EPS is likely near 20 than 18 and with NIMs safe at these levels the company could well be looking at targets of 400 in institutional advisories. 

Competitive Universe

Scrips like GIC Housing have also generated interest with the perfect business model of LIC housing on display and above par returns on its investment portfolio as well as the potential growth of scalability by leaps and bounds

Posted via email from The India Investment Post

Disclaimer: I do not operate the entire universe of India stocks and my select list is based on current fundamentals of sectors and promoters/industry groups as well as policy. 

Banknifty is good because of result rot weevil and Bank of BAroda and not PNB will be rising in the lead with SBI profits also likely carrying weight and then finishing off with a surge in HDFCBANK, ICICI and Axis at different stages.

The resulting increase in loss making PSE banks is to be avoided however, not because of anything else but that the Disinvestment programme announcements are going to be at best uneven with the FDI in retail going out of fashion as well this morning making an impact then  midweek. Ikea and M&S professed interest in entering the foods and grocery space in Asia's premium middle income market and start another spate of refusals to be managed by the disappointed UPA alliance and Chidambaram

Posted via email from The India Investment Post

It is almost akin to a pilgrimage to Kailasa or Mata Devi the way markets are treating Mt 5400 and then Mt 5600 but it is only fair that the markets have virtually wiped all possible reasons for selling into this rally from the technical structure of the markets. The robustness will stand analysts in good stead as they branch into the usual suspects from Adani Ent and JSW holdings to Ranbaxy at this stage, Of course at every stage there is value in some selected blue chips and they may be referred by sundries as suspect but to those regularly following, it will be clear that these scripscurrently picked in Trader 6 are not here for the long run.

Sun Pharma, Glenmark, even Jet Airways and Spicejet, with IDFC and ICICI Bank leading from the front is a likely tale for those forced out oftrading cues earlier at 5200 to 5400 by the lack of moves esp as Futuresinterest continues on the wane. 

Posted via email from The India Investment Post

Markets try to avoid excess volatility, leaving scrips like JETAIRWAYS and YESBANK with new generation interest only to a accessory pile as Axis builds up the big move, ICICIBANK trading 13 bucks over yesterdays close and HDFCBANK also looking strong. 

A warning to those who read my reports regularly, apart from ORCHID which has been dumped to favor cashflow led market increases in indices there is some big sell on nes in OPTO which has not hit the wires and OPTO is trading 10% down as results are due today and some big miss is afoot. 

Also even though Bajaj Finserv(Insurance) , Bajaj Finance ( NBFC- Consumer lending) M&M Fin and Reliance Capital continue to be strong winners, Reliance Capital is seemingly catching up with higher costs in  Auto insurance according to an update from Macquarie. This rally is of course still good for Reliance Capital as it moves up to barely 360 levels

Copper shorts can be closed out and a fresh long looked up within this week. But Crude is likely to break soon even if just saying somay not threaten buyers ansd inelastic demand faces fresh supply lesions despite Iran havng been cut out of the equation long back, dubai piping up on the issues surrounding Iranian oil. 

Natural Gas is a good short at 153 as it probably retraces to sustainable price levels while producer Reliance is a good buy as GRMs in the refining business are also growing apart from the prospects of being reimbursed government share of costs of E&P in KGD6 for 2 years. 

Banks did not do enough today and that is a green candle for tomorrow. India's Fisc is about to turn the corner (or so it would seem as the market cannot ask for a rate cut before that, whichis perfectly rational way of saying markets define irrational expectations) 

Posted via email from The India Investment Post

The WPI data begins the catch up with economic data from India for July 2012 after global trends could not break India's earlier rhythm, though still contused by global shock, with a 52% PMI and a 53 in Services PMI. The inflation came in well below 7% from a 7.25% revised number for June to 6.8% number for July likely helped by the lack of demand in durable goods witnessed in the IIP and the continuing low basic and intermediate goods that continue to fuel production indices and markets hold out hopes for aggressive rate cuts turning into a rate sensitive led rally post the inflation data release.

Primary Articles Inflation has settled down to a 10.38% same as 10.46% in June as Fuel price increases have been shelved and Meat Fish and Eggs continue to lead food inflation increases. We believe RBI may hold off on rate cuts till those fiscal changes have been implemented or the alternative disinvestment plabn counted as success though the RBI will likely stay away from confusing the markets on the simultaneity of fiscal and monetary impact in terms of its equation with governments. 

Posted via email from The India Investment Post

The Dollar sucks in the morning air to shoot up to 55.61 in NSE trading leaving ample room for stocks to rise and currency to fall against the rupee in the rest of the trading day. A simple uncomplicated market keeping its respect as volumes in Indian currency are still building up and nowhere near the London Tokyo and even Singapore markets

Posted via email from The India Investment Post

European markets are likely to halt in their rally but not lose a single point to shorts in the entire week so the afternoon rally is afoot. Ideally trading should focus on the winners of the big move and you should avoid new counters at this point or give in to temptations of ITC is about to breakdown kind of news. I am still long ITC , YESBANK, IDFC and ICICIBANK and there is no trade in volatility in the Indian markets so buying volatility at this juncture will not help. AS a trading strategy therefore, automobieles and healthcare standout as quick picks while Banking and infra remains your primary  portfolio

Posted via email from The India Investment Post

Please wait for fresh capital to drive the bull turn on this market as 5300 will hold on the bottom side. The inflation and Q2 GDP data are unlikely to be the bull indicators for the market but the amrket has been innured by the series than immunised as it wrongly sided on rate cuts which could well lead to a diagnosis of a banana republic for India down the line.

CPI series will follow later at 10% and above with food inflation in 'proteins'' unlikely to come in check without realtime policy action. Even otherwise market is ready to move up at the slightest hint of real implementation now that Chidu has been given a week to spread the good word and it is clear that words alone will not last this market in good stead nor India.

FII interest has finally focussed on India ahead of the liquidity rush, when likely other Asian markets will get a flourish without any of the  current investments being yanked.

The amazing moves in United Spirits on strength of its survival despite the KFA fiasco and investor interest / stakeholder interest int he same should fly to others in UB Holdings ( promoter company of USL) , and United Breweries its downstream holding but I for one am not sure why it should extend to the danger zone indicaator Kingfisher Airlines which cooked up a INR 10B pre tax  loss this quarter and this is not the biggest one it is likely to produce even with just 100 aircraft. 

Posted via email from The India Investment Post

HDFC and Sun Pharma have moved up yielding more than 10% in a montha nd are on target,. The market is pointing up and if you are bought you would enjoy one surprise pop overnight probably in this or next eeks ranged trading as there was hardly any downward pressure, though after the $3-$4B in the previous 5weeks till August 6/8 2012 there has hardly been fresh buyin gi n the India markets and Euro liquidity is unlikely till DEcember which market seem to be comfortable with. Euope and US might enjoy a break from the upmove but India deservingly remains an isle of prosperity after the downgrades on 6% Fisc, 4% CAD and just 5% growth as rate cuts remain unlikely with CPI near 10% CLSA views in the morning half seemed well thought out, StaChart still expects no rnage to last belying the expectations of this market which seems to have decided to stand on Mt 5300 despite such worries on its state. 

However the range does preclude most FAO trading in the August series unless you plan for smaller gains and quicker 2pm moves around the same. .Maruti and BAjaja Auto , M&M are also the next movers in the upo move but then there are Anil Ambani stocks, Glenmark and RIL, and even bigger moves in ITC and HUL in the bluechips. Midcaps to pop included Subex and Gammon infra seems a good accumulation candidate, great traction in projects, posting direct additions to the Topline and a good enough INR1 B EITDA to stand on. 

Posted via email from The India Investment Post

Gold is still a buy but more for intra day and short term moves as friends on the networks confirm longs. Copper is surprisingly not nosediving to below 410 but s still a short and I'll let you know if it climbs back from 415-418 earlier than reaching 408 levels. Crude should be a sell this week but I would actually avoid that commodity as producers look to even out the belo $90 price it as holding a few months

Corn futures are going to shoot in the US oening this eek and had a strong close Friday and the continuing monsoons mean prices are stronger for Wheat and other agri but not cash like Sugarcane and Cotton, which refuses to look up despite continuing demand and cut down in supplies as losses for Indian producers of yarn reach a couple of $B

Posted via email from The India Investment Post

Rupee should trade stronger in the mornings this week but strengthen through the trading day as markets refuse to duge. Any break South has normally been capped by the Rupee's crossing 56 also , topping out at 56.40 and likely to remain so for time to come. 

Banks and Healthcare remain long only picks. SBI and PSU Banks make great short opportunities and the three private banks apart from Kotak and YES will be handling the Banknifty's stabilisation effort with ICICI Bank holding 1000, HDFC Bank 600, and Axis 1030. The two Union Bank and United Bank couls be among those who go deep south as SBI moves to settle down at 1600 levels despite its $750 mln profits which it repeated this quarter as a 5% Gross NPA scoree on a INR 10 Tln loan book with mostly MSME customers further skewing your confidence in the bellwether and despite high NIMs, the bank will suffer for the sector's uneven practices in lending esp relating to underwriting 'corporate' accounts hich regularly fall behind in payments as much as INR 110 B slipping this quarter. Rate cuts from RBI will not follow in a hurry

Posted via email from The India Investment Post

Good morning, markets are unlikely to oblige ith another 50 point movement in the Indian indices and have decided to stay put in the 5300-5350 range without a boat to paddle out for you. Independence Day celebrations are on and the mid week holiday gives not just Capital Markets but offices in general a desolate feeling with no new business being added and India;s muted celebrations of the 65th anniversary hitting home in shame pieces throughout the week. Of course the anna Movement is not even getting that much from friends in the Fourth estate, the team expecting some kind of a Samurai Warriors group from the electroate to vote them into power on an anti-graft agenda. 

Healthcare and Banks remain leading picks, speculative counters losing interest include Bharti Airtel, which may be good for the stock and do not include M&M and BAJAJ AUTO which are "should be frontrunners" but only "fairweather friends" and unlikely to become a good defensive with their being earmarked as Tier 2 in more places. Bharti in the meantime should be so lucky if it stays above water this week at around 240-245 levels as the company has shown a stable earning capability which includes losses from operational businesses on a regular basis not unlike our airline business peers. Jet Airways will surge likely as they are on board with enough calendarised Sale and Lease Back and selling tickets at high prices thru these big ticket weekends and holiday travel. Spicejet too seems to have followed peer Indigo chairman Rahul Bhatia into the Sale and Lease back method of balancing financials and have a good enough balance sheet. ATF is again now on a declining trend as the $112 peak for brent is a good point for Oil to go south and the dullness could like Gold  take Dollar also slightly north but the currency is likely to face even more pressure on it from Exporters and PC friends. Policywise, Chidu is trying something mew called Old wine in a new bottle, but his packaging is already working and a Disinvestment Calendar with the usual nays from the PSE CEOS folloing next week onwards. Calendarised are RINL, SAIL and NALCO and BALCO which would all seem brave projects and potential VAL purchases!

Posted via email from The India Investment Post

Gross NPAs for Q1 FY 2013 increased to 4.99% instead of estimated 4.7% and Net NPAs rose almost 20% to 2.2% from June 2011 in the just announced results the bank increasing provisions. Gross NPAs amount to INR74.9B and Provision Coverage for the Giant despite increasing are still much lower than the competitionand smaller public banks at below 65%

NII is just 111B, 5-8 B less than the street estimate and total provisions this quarter are lower at INR 24.6 B taking the bank to below 1900 in trades after the ires ran the shock up the market spine. Broader markets may survive this loss of confidence in the public sector as the market demands of removal of subsidies as part of deep seated reform also subside without the indices rerating below a 5200 bottom

More details as the bank management releases further details of their private massacre when the street expected that the income and loan related pown rovisioning had been completed by the bank in a surgical action last March and June and profits are expected to increase 128% but will still manage to outgrow a INR 25 B mark satisfying the requirement of a viable net margin with interest spreads under pressure

Deposits have grown to INR 11 T while the bank claims a revised CAR of 13+% as of June 30 while Total Net Income is 14.6B or less than $3 B th no growth in fees advisory and other income

Q4 NPAs were best in class at 1.02% doublling sequentially ( Net NPAs)

Posted via email from The India Investment Post

Commodities have again swung into alays trading friendly zone with Copper offering a great short at 422-423 to the 410 levels it so likes when there is no real buying. I do not know about the buy trade on CRU/de though, however right now that OIL is bullish and is going up but I am unable to see a much hiugher top and it would be foolhardy to get into short trades hile it is strong as the commodity can rush upto $25-30 on one side in unique trades.

Posted via email from The India Investment Post

The Rupee is trading at 55.60 levels in the morning trade looking to break out but as 56 levels are highly over priced for the Dollar Rupee, it is unlikely to be in a rush, ,making the markets even more rangebound though trades int he currency use the lull to move up, 56.40 being the absolute over the top rate for the Rupee biting traders no end. 

Shorts on GMR INFRA and GVK echoed thru yesterday across SS and the ETNOW specialist ( not Ash Gujral) GVK POWER will be an enticing short, Financially GMRINFRA is ell placed bu tthis could be a purely technical trade. SBIN is at the bottom at 1960 , so the impact of negative results from here would be even more disastrous. YES BANK is probably going below 350 if the markets take a breather, Long only positional traders ould like BIOCON and MARUTI no apart from their soapy MIdcaps. ING is back in the strong list, Indusind still int he seak list. ICICIBANK is being ell left alone by seasoned cricketers and MAXINDIA looks favorably disposed for some good stake builds and as a breather for the markets. the Polaris / Maha Satyam / IIFL kind of trade is still alive and I am going to be readin g the rest of the day wondering why I  did not make the NOBEL short list again! 

Posted via email from The India Investment Post

5300 is proving ot be a fiesty point for Nifty as it tries to define the new bottom every second instead of trying to breakout after having been beaten at 5370. Of course now that IIP has under performed , down 0.1% for the June Quarter(-1.8% for the month), there may be others out there who waited for this result to downgrade ( markets not sovereign) India, esp as EM expert Goldman Sachs will be waiting in the wings calling india theater absurdly expensive though the strongest for some more time.

Tech Mahindra results were good for a single client focussed company as it makes the final transition to india's no. 5 services company in Technology Tata Motors probably expected mroe and a hit in profitability for a company in the durables sector is hardly something excusable. Banks however are still strong and any technical redefinition could still lead to better indices overall as the PSU banks alone may take the fall in the Banknifty and reliance has also recovered some confidence and continuing speculatve interest int he scrip

CIPLA is retreating too and that is a good sign for all those scrips you do not ant to take down to earlier bottoms and the indices may never really dip below 5250 except for intraday rushes to complete trading targets.  Though we do no have High frequency and programmatic buying in India still, there are defined purchase orders around for the FIIs who choose this route for their India investment portfolio ( Secondary Capital markets)

And here where we are remains anear 5% minimum growth esp with growth in disposable income and a consistent lifestyle upgrade constant for India's poor and rich alike.

Posted via email from The India Investment Post

Banknifty bull calls are not going to come in today, the market overawed by having to come back to the same levels every 3 sessions and not having any fillip in moving the same as it is actively wont to doing. Market moves will be slow and steady as credit growth comes in tomorrow for the third/fourth week of July 2012 FX reserves are not likely tobe sunny and bright either while today's IIP and manufacturing data reports will be touching glazed territory at near 1-2% levels each and ill have to be jumped by the market as expected to be inconsequential

Posted via email from The India Investment Post

M&M profits jumped and volumes jumped even better  while JLR seemed to underwrite Tata Motors' bright future even as Domestic sales recovered. 

EBITDA margins of 15% do not engender much confidence (incl other income) in M&M and rival tata Motors is up 16% in the last two weeks as those following at ET and business Standard have tapped on since Monday M&M has grown EBITDA by over 1% this year and futre improvements have likely not plateaued out. 

M&M Sales rose 40% and it was unfortunately missed in the morning report rush today as it was a key highlight of India's ever so strong and ever so least expectant results season

Net profits were a big win with a score of INR 7.26 B. In volumes, Sales of new look "SUVs" from the M&M stable has risen 32% for th eyear with MUVs and SUVs both vying for customer attention as Ford and GM models get stale and refuse to ramp up volumes for the US/China based majors. 58,615 units were sold in the three months ending June 2012

Tractor sales are lower at just 56.820. Tractor exports were another 3000 and the Domestic Sales were a 41% market share with a 2% volume expansion over June 2011 

Direct costs (RM) are up to 52% of sales of INR 9248 Crores or INR 92.5B M&M SUV export markets are in Latin America and Safari country rising to 7,850 units Seemingly realisations grew more than 20% per vehicle in over June 2011

Tata Motors reported a deep cliff in Domestic car sales last year and continues to bleed share in this market despite improvement in production since. Results are presented at 5 pm today with a topline of INR 470 B with nearly 30000 units of Jaguar and Rovers sold in the European and even China markets. Domestic production for July including its Trucks and other Commercial Vehicles as 61,000 and Sales barely keeping pace at 68,000 with 21000 Cars and 5000 utility vehicles sold in july in India and production much lesser than that

Posted via email from The India Investment Post

Yes, the much not warranted piece is back in the reckoning as the 10AM open throws interesting profits in OIL at 5100. the shorts finally have it after small daily bull rallies in India's MCSX hich has a mean share of Crude trading volumes as UAE does not seem to have much except daily quoted for the monthly series. 

Indian crude ofcourse wwas nearlythe midpoint of Sweet Crudde and Brent always and now 5100 can go back to 4950 and then even 4700 but that one's highly unlikely

Cipper shorts make up for your worldly ambition but at 418 the trade is a atch and go esp as the "rallyists" in the day traders have it in the ring, probably don from 423 but th eintra day peak is pretty obvious when it comes. Please short then for an appropriate 8-10 rs  move and profit. 

Gold again proves the adage Indians taught the world as it secularly defies equity bulls, currency hoarders and oil speculators to stay on the right up trade a s always even 29,500 hardly achieved in the Indian market for the metal before it started the initerant up move. Whatever else happens gold i UP, UP and nyet never away.

Posted via email from The India Investment Post

Cairn is likely to get a small dip as events overtake the company's Indian ownership, even as to years into Mangala's opening the company's $2 B revenues are an eye opener and are ramping up well. 

Consumer goods companies should be celebrating a good quarter but are stuck in their vortex near previous highs as the market has been put on notice that marketmakers ill not waste their breath on individual stories unless the secular move, undserstandably, fructified and most are not going to sell down more than 5-10% from here. 

The Veritas strategy is being used more as detractors offence by the offending managements and the company's own actions do look like attempting just cheap publicityso gyrations in those stocks would be unhealthy on both sides. No they are not cheap enough to buy. 

Even at this low volatility, range bound options strategies on the indices get shot out very fast yet the indices are unlikely to move below 5200 and abpove 5400 immediately , so unless you are day trading it is not going to make much sense. 

The new version of the Land Acquisition Bill will likely increase interest in Jaicorp and Reliance as Reliance climbs out of a 3 year hiatus in the trenches and DIIs are unlikely to sell further after the 7B spree yesterday. 

Stanchart is due for a comeback as NY's action was not defensible according to the Fed and the Treasury and the incidence of penalties is fairly okay at $700 mln in line with settlements already made. 

The movers continue to reside largely in Healthcare ( Glenmark, Stride Arcolabs, Orchid) and Banking (HDFC Bank, ICICI Bank) while Infracos like IDFC still make gretat portfolio picks for the coming spending surge even as the Fisc blues have been shouted too often and little or nothing will be done, Veritas making sure the deficiencies we look for reside in an entirely parallel universe of good old "these vermin companies do not deserve..." 

Posted via email from The India Investment Post

The Bharti selloff taking over the whole market space in its wake from the ephemeral 5370 levels talk of an uncomfortable market segment trading the currency and the equities in equal weight and building on India's unfounded enexcused staying away from crisis after crisis in the last 5 years even as Global markets roiled, looking for their pound of flesh in the global misery to "bear fruit" in india as well where returns on that depression would be higher of course. 

However, the sell off is likely to get localised in Bharti again as markets are unwilling to move below 5200 at best and right now planning to stay near 5270 or above 5300 and start the climb on the indices. Bharti's results and the reaction it engendered was not so shocking after all but moves  pulling it down for ARPU moving down from 189 to 185 and revenue per minute of 42.7 vs 43.8 paisa per minute are signs of an overly sensitised market, not educated in the intricacies of that industry.

Bharti may have much more explaining to do if Capex is falling off as despite my years and hours of work I am unable to put myself hostage to figuring out why Tax expenses will suddenly increase and while some regulatory changes are in the offing and would lead to further occassions for a 40% cut in Net Profit, right now the relationship and incidence of that and the sudden increase in tax to take profits down are really not understandable. Debt at 680B is scary int he very least but the company added 6 mln subscribers in the quarter and maintains market share. The volatility in Africa earnings is not going to help its cause and it is likely to settle further down from here. 

PC's magic is likely to continue enthralling the markets as markets know it by autobot with the land Reform act and the coordination committee meetings suddenly sounding positive and the fourth estate a noisy pparition disturbing the peace.  Also importantly Nielsen was caught with its pants down in a cover ET piece today, showing underreporting of consumer non-discretionary growth in soap, juice and toothpaste for example, however it is likely to get defended easily as secondary sales differ from sales recorded by the FMCG companies. However, whether Nielsen is statistically significant is becoming increasingly unclear instead of the scientific method winning more fans in the Indian and Chinese markets and they and TAM?NRS and otehrs have to really pull up their stockings. Market research and financial ratings companie shave both got rather used to Filled up stockings on Christmas and need to dress down for the summers in Asia, india not used to bleeding its corporate kitty on consultants and their ilk. 

Posted via email from The India Investment Post

Rupee trade is tentative as increasing levels of Nifty reach the Dollar Rupee barrier at 54.9 in spot, with August trading at 55.25 and trying to continue its internecine war with india bulls that gets pretty ugly and is quick and swift in currency

The bull market is entrenched and taking nifty vcalls at this time though tempting, would be contraindicated. Taking short positions would be detrimental to the health of the portfolio. Stay long in Banks and infracos like IDFC even if the markets fall as they may not forgive if their is a sharper upmove in the afternoon, bottom levels of 1000+ for ICICI Bank and 160 for IDFC can be equally sticky as 4700 levels gave on 780 and 120 respectively. REC, PFC and Powergrid are back on the starting block. If you are not out of DLF you should be in this session. NBFCs come next with LICHSGFIN, ING and INDUSIND supporting the rally later. 

Drop the real estate companies for now. Healthcare may be due out of the window esp if it means CIPLA and DRREDDY for you. Wockhardt, STAR and Lupin stay in the limelight. ORCHID and OPTO CIRCUIT will follow

Posted via email from The India Investment Post

An atmosphere as electric as that of india trying to break the 6% curse of the nineties to get into a double digit groawth orbit has probably been recreated with the author of "100 mini steps ..." Raghuram Rajan making it as the Chief Economic Advisor of the current government, batting for financial sector liberalisation with a defined roadmap and allied activities by the government including tentative approvals for Reliance budgets for KGD6 for 3 years.

A little hiccup or two in the extension of the Spectrum allocation to January 2013 from Kapil Sibal likely would not have spoilt the broth but there is definitely enough as the markets asked for in the July run for them to break the 5350 mark resistance and crossover to the side where a liquidity infused run is aaiting theese markets. the Land Acquisition Act again touted to hit the parliamen twith changes will be taken by the market as an article of good faith.

FIIs continue to invest , with INR 7B in Nifty futures according to Udayan and INR 9 B in Nifty purchases on tuesday. The best thing is that the bottom has correspondingly moved up though some would have been shut out of this rally with its hiccups in the same place for 2-3 months taking their toll on the investors, market makers and traders. 

Posted via email from The India Investment Post

After a fiesty fight at 55.8 levels with investors like me, their disappearance gave rupee speculators the chance to capitulate in the process after Equities finally seemed to be able to burst out from the 5350 tops and a definiteive direction in the Rupee lasting the full day todasy even after the Equities close as Dollar keeps falling like nine ppins,. If only you had your Capital in place and not decimated by to bit touts that would have otherwise thronged the move and bitten off more than they could chew. 

The rupee moves on the Electric news from Chidu who is set to disappoint the markets if they indeed complete the move to 5500 which is happening in line with a secular global move and not waiting for pidgin English or Hobson Jobson trading to help them along though the Rupee/Dollar did try to recover every time there was a lull at the top in the equity trades. 

Posted via email from The India Investment Post

Taro's phenomenal results count to good traction in the Healthcare major though Indian domestic drugs market remains aminiscule part despite the population and lenient pricing is no longer recognised as the only viable strategy for global majors willing ot invest in the India story

As a global investor however Sun Pharma has it much easier, Taro providing $47.6 mln  additionally from June 11 in its first quarter aligned to India's Fiscal to $159mln(42%), a Direct Margin of over 70%. Despite R&D expenses of $11.6 mln being a higher ticket by the same 50% rate (47.6%), Gross Profit is a great 64.4%. SGA expense reduced to 14.8% of Sales, Net profits growing over 75% to an EPS of $1.41 or $62.9 mln from $35 mln in June 2011

Taro has a pipeline of 15 ANDAs and 2 NDAs in various stages with the FDA

Posted via email from The India Investment Post

Telenor not only succeeded in creating a successful India franchise in Uninor which was adding more than 2.5 mln users a  month at its pick with only 13 circles udner its belt, it did it ina minimalist way relying on auto run USDN plan packages and prepaid activations to grow its business as the fifth operator in most circles. Even now it adds more than a million users a month, a gretats trategy case for foreign banks thinking of not entering india for the fear of priority sector lending, no frills accounts, rural branches and the other 'social' expanse of india's rightist and liberal policies. 

Uninor makes it look easy for MTS, Sistema and others though many may not come back after the current round and Maxis seemed to knowww on its own hich ay to go though it never really challenged Idea, let alone the no. 2 operator in its circles. 

Telenor also figured out a long forgotten clause in the MFN treaty and the government has since even extended a blanket welcome to those with SWF stakes ( in Telenor's case, from Norway) to buy the spectrum again in the 2nd round of auction  at the minimum prices for the Auction

In the third instance, Telenor just trumped its erstwhile partner Unitech, which seemingly was not good enough to go on with as JV partner, with the HC overturning the stay by CLB on the sale of uninor assets to the new Telenor subsidiary allowing continuing seeamless operations for Uninor customers as the new auction of spectrum gets repeatedly postponed. 

All three elegant solutions show that Global corporations do not have to get stuck with F1 sponsor/ ultra premium slots and can target mass markets in India wihtout running extreme overheads and likely able to pay through other means.  Many fail in corporate governance while setting up lean india governance structures and many others allow corporate overheads, staffing and marketing expenses to overshadoww investments in infrastructure. A few have been perenially in losses despite their tremendous goodwill and larger partner networks like HP and many others failed in entering india without an outsourcing end or piggybacking on Integration /Technology /outsourcing consultants like Accenture as in the recent case of Apple reflecting their addiction to democracies and banana republics which can operate corporations directly from their parliaments and presidential palaces as suitable investment destinations. China of course is a different kettle of fish and also provides a larger proven market and thus India has to put its best foot forward while soliciting from new global investors, but it is unlikely that such investors are looking for jugaad or kya chahiye anymore and cannot manage with suitable business credentials and staffing of their own in the 'potentially large' Indian market

Posted via email from The India Investment Post

Rupee lift mirrors equities intraday, with the lateral inversion if I can insert the topicality..Equities look good with Reliance holding to yesterday levells and ready to try a 800 and SBI and ONGC can now catch up later. 

CAIRN and BIOCON have not moved much either because the market already has a select shortlist for the best poised stocks and incl "Aviation and healthcare this set is doing well. Surprisingly Jaguar owner Tata Motors is back on great sales  probably because is European brands buck the average degrowth of 20% in Car sales in Europe. Volkswagen unfortunately, the bi wineer in Europe, is neither palanning an aSian Capital market presence nor is doing well in India, Ford, GM and VW among those cut in volumes by the return of Hyundai in the recent months

Posted via email from The India Investment Post

And as usual I think both are wrong about current long recommendations on Commodities. GS has been wrong for a good three years now, if you go by what they publish. 

Oil is not going too far from here but the downtrend in commodities may not affect it either as US is looking at coming out of a Oil demand slump as Aviation and Auto lead into H2's few positives. 

Soya, Copper, even Nickel and for obvious reasons of idle capacity and overspend, Rio and Xstrata stocks themselves are going to be down globally much the rest of the month. 

Posted via email from The India Investment Post

Not yet but as SBI, ONGC , BHEL and a few others recede, it looks likely that there are people considering an exit to this rally before the week is over. Yet, the maarkets haven;'t really moved overnight and I would think there is one more such move left int his market probably on another post market close news prefaced from the North Block or on intra day European jumps which are unlikely this week the Euro already trading precariously near a ne giddy high of 1.24..

Posted via email from The India Investment Post

"It's quietly positive across asian markets" notheard for a long time now but true for today and the Aussie (AUD ) has already run to 1.06 against the Dollar's strongest run in the last three months to its strongest levels guessin gthat the RBA will not be cutting rates in a hurry as demand for Australian resources from its Asian customers is still not able. Howverthe SGX is as clear on the Nifty as ever and overseas investor interest in India keeps adding to aSia's share than take away from other candidates in the area, while China battles a slowdown in consumer spending apparently with its own shadow surpluses that will be pressed into servicing the Economy's groth in the second half of the year. Indian consumers have not disappointed yet and this coming at the bottom of the growth cycle shows the resilience and strength ofthe indian model and current valuations bely the recurring theme of "probably overpriced" wrt indian Capital markets.

HDFC Bank and Kotak will likely continue up with Axis and ICICIBank in the lead after the late rush on the HDFC and Kotak scrips yesterday afternoon. index based strategies will not pay as SGX has learnt from last month and the Rupee will bnot trende stronger more easily given its current 55.5 levels till real strength in performance comes in. That shows up Technology and Construction stocks and more ill gravitate towards shorting DLF and WIPRO not INFY. Also don't get red on other sectors including Healthcare or Educompa t this stage and even DLF might run to 222 before receding,. LICHSGFIN probably gives much more options and a rally in manappuram could follow if the northbound move continues. Hat Tips from SS and the brilliant analysis by Nikunj of the DLF result sheet made my morning again as I work through so many different subjects to start the Indian morning 

BIOCON buy looks great from here, DLF's disappointing results had already been faactored in but underperform guidance by almost 40% on residential as well as leased space and sales are down 15% Y/Y . Reliance alone could allow the other index scrips leaving for the netherworld including BPCL again. BAJAJ, JPASSOCIAT, CAIRN and SUNPHARMA are surefire big picks too with 5% upside targets thru the day. 

Markets may open at near high levels and fresh intraday positions would be out of scope for now as the Rupee has shown too.  

Posted via email from The India Investment Post

More for the Economy

P Chidambaram;'s recipe for the Indian Economy shows restraint and realism and at first instance nothing else seems to be materially distinct, the minister being another face ogf the Manmohan Singh led UPA government. however, a closer look reveals the difference in the details including the media blitz covering the event of PC speaking about the Economy. Secondly, the difference is in the nuances of his speech even as he commits to a relook at GAAR and other restrictive tax legislation, points to the preeminence of increased investments by Foreign investors and even the foggy "calibrated risk" to stimulate invest,ment which the Times has infact taken to be a hint at coming simpler decisions in Interest rates. All PC has said however is that he is more amenable to working with the RBI than independently and Fiscal consolidation would now work in step with monetary policy with clear measures to minimise the spectre of drought ith the same select imports and other supply measures to contain inflationapart from converging some government welfare schemes and PSU investment  bot h policy measures having met the wall of public disenchantment expressed by the concernd implementing bureaucrats and Politicians at state levels earlier. 

Try a low involvement strategy but not 30000 ft

However , the Rupee is already responding to a welcome weakness in the dollar and the price of Oil may also start falling back to help  the new FM achieve the more coherent and tightly knit policy statement. Parts of the country ahave avoided the Drought tag with rains still not bringing the welcome respite in the North and Western parts. The Fiscal consolidation panel may not be suspected to achieve much but yet he would be given a chance. 

Meanwhile sector specific trading strategies remain the backdrop but only select scrips and certainly not index strategies will rule in this week's market. Wipro for example may lose more than Infy on the news of Cognizant overtaking Infy in quarterly revenues. Even with the out performance cognizant is only betting ona 20% revenue groth and the ector including Indian Mid Cap It will suffer esp with active discouragement of its non SI non consulting suspect skill base against the coming juggernaut where the cost advantage could have been much more if indian providers had been able to establish themselves, and are currently not equipped for the race. 

Healthcare wins similarilly may focus on a underpriced Biocon and Energy wins on Cairn as markets are very careful about overpricing sectos esp as banks remain dominant producers and thus the centerpieces of any up move. 

The Foreign Bank conundrum

The StanChart results and others like HSBC have shown a distinct derailing of retail prospects in india , however even when StanC did not grow its Wholesale book and retail was weak, it produced return on assets that is twice the Global Ops. As RBI made it known yesterday, the superior ROA for Foreing banks  hin India ( 1.90% for SCB, 1.5% for HSBC and 1.3% for Citi) means that the Central Bank is unlikely to roll back the new requests for Priority sector credit. Asia remains the banks' only chance esp fror European Banks which have known the continent for centuries and are equipped for Trade Finance/Transaction Banking. 

Posted via email from The India Investment Post

Monday pre closing looks dyed steeply in the after effects of a turnaround in Dollar fortunes from tokyo close to London open and the equities are just about holding their opening tricks. The Rupee will likely fall through to 56 all over again, but the Pound Sterling may have better luck in keeping Britain competitive as its data is weaker and the strength in the Euro has been cut short so look for the Pound to let the Dollar a good lead and indian stocks to continue rerating on results. Wockhardt and Divis Labs were eyeopeners , likely moving the move from CIPLA and DR Reddy and SAIL and Britannia not so good. Reliancce is hoping for better GRMs in Q2 

PE transactions have increased volume of resales as these secondary transactions could create additional liquidity of upto $100 B in the Indian deal market allowing PE firms to update valuations based on market price and look for a better profit than ina long drawn out listing Airports and Aviation scrips are getting rerated again, at least I think both should even as BAML tries to jump Jet Airways and Spicejet on the Sales and Lease Back profits. Jet profits of INR250 mln include INR500 mln in sale and lease back and apparently some defered tax credits. Jet Airways revenues are up only 5% in Dollar terms to $847 M (INR471.2B) but have a clear line to add to International Star Alliance for code share push to profits and has a seat factor of 82.7% in Q1  FX losses of $31mln could not erase Net profits either.  ATF prices actually rose 13% over Q1 FY12

Annual revenue of the quarter is up 31% still under $1 B ( lower by $52 mln) but EBITDA MArgin has doubled to 16% on Konnect rollout and ATF decreases will roll further in Q2 . Jet lite yields are up 43% on the year ago Q1. Passenger growth of 10% domestic Y/Y ith 4.86 mln revenue passengers flying an average of 1700 Revenue kilometers

Ofcourse some bank results did spoil the day in Andhra and dhanalakshmi but nothing out of the ordinary and ING, indusind and Kotak look well slotted for the froth of this run, if there is any while YESBANK and ICICIBANK lead wwith HDFCBANK consolidating another big move

Resturctured Assets bought into equity by majority foreign owned banks like ICICI BANK and HDFC BANK will not count to FDI and will be allowed while new subsidiary stakes (strategic investments ) willnot be allowed beyond the FDI cap in the secotr as Indirect FDI

100% FDI is allowed in Commodity Broking however. In new regulations, Insurance Cos have been allowed to purchase and sell CDS contracts as part of hedging portfolios

Posted via email from The India Investment Post