Monday, March 22, 2010

BOR: Market Outlook: Indian stocks seen lower on RBI action & weak global cues.

Market Outlook: Indian stocks seen lower on RBI action & weak global cues. Market may have a knee-jerk reaction to Reserve Bank of India’s move late Friday wherein it has hiked interest rates both repo & reverse repo rates by 25 basis points to 5% and 3.5% with immediate effect. Volatility is also likely to be high with the F&O expiry for the March series due later this week.

Global Events to watch for today

  • 4-Week Bill Announcement
  • 3-Month Bill Auction
  • 6-Month Bill Auction

Global indices Update @ 8:

Dow Jones : 10741 (- 37.19)

NASDAQ : 2374 (- 16.87)

Nikkei 225 : 10824 (+80.69)

Hang seng : 21120 (-250.39)

SGX CNX Nifty : 5180 (- 89.50)

INR / 1 USD : 45.49

Stocks in action for the day : Cipla, Lupin, UltraTech Cement, Television18 India , Biocon, TVS

Cipla to replace Sun Pharma in Sensex from May 3: Drug major Cipla will replace its peer Sun Pharmaceuticals on the Bombay Stock Exchange's benchmark Sensex from May 3. In the BSE-100 Index, pharma firm Lupin will replace its peer Glaxosmithkline Pharmaceuticals. Further, the state-run power major NHPC, Shriram Transport Finance Company and UltraTech Cement are also being inducted into the BSE 100 Index, while public sector telecom operator MTNL will be excluded. In the BSE-200 Index, 16 companies including Aurobindo Pharma, Cadila Healthcare and Oil India are replacing the NDTV, Television Eighteen India and NIIT.

Biocon a good bet for mid-cap space: AFTER a poor show in earnings for the fiscal year 2009, India’s leading biotech company Biocon has registered a good recovery in the current fiscal. With traction in its biopharma business and an improvement in the performance of its German subsidiary, Axicorp, the company holds attractive growth opportunities going forward. It is a good bet for investors interested in the mid-cap space. It is currently trading at a consolidated price-to-earnings value of 23. It is valued at two-and-a-half times its net sales. These valuations come on the back of promising growth prospects of the company across its various business segments. Investors with a long-term horizon are likely to benefit from the company’s promising growth story.

RIL goes back to ONGC for Venezuelan oil block After the USD 14.5-billion LyondellBasell takeover deal turned sour, Reliance Industries (RIL) has renewed talks with the ONGC-led consortium to pick up a stake in the Carabobo-1 oil block in Venezuela, a consortium member told ET. RIL had approached ONGC to pick up about 20% stake in the field last year but later lost interest due to its preoccupation with proposed LyondellBasell acquisition.

Tatas line up compensation package for Nano vendors Tata Motors has readied a compensation package for Nano vendors who were forced to relocate their units to Sanand in Gujarat from Singur due to political agitation. At the same time, the automobile major has taken a decision to retain 997 acres at Singur and renew the lease, which expires on Mar. 31, 2010. The commercial production of Nano at Sanand will commence from April this year. It is learnt that the company has come to an agreement with vendors, whereby it will not compensate them in one go for their losses in Singur, but will do so in a phased manner.

NHAI modifies bidding norms for highway projects National Highway Authority of India (NHAI) has modified some of the norms in model documents for Build-Operate-Transfer-(BOT) projects i.e. Request for Qualification and Request for Proposal (RFQ/RFP) to resolve the procedural impediments which have been blocking projects.

Bharti ties up USD 8.5 billion to finance Zain buy Bharti Airtel, India`s largest telecom firm by revenue and number of customers has finalised USD 8.5 billion of funding for its acquisition of the African assets of Kuwait`s Zain as well as a likely foray into third-generation, or 3G, telecom services in India.

NTPC eyes 1000 Mw renewable power project National Thermal Power Corporation (NTPC) plans to undertake renewable energy power projects having capacity of more than 1000 Mw. Taking a first step forward in this direction, the public sector giant has entered into a memorandum of understanding (MoU) with the state government-run Gujarat Power Corporation (GPCL) for putting up solar and wind power plants to the tune of 500 Mw in Gujarat.

TVS launches new bike TVS Motor Company has announced the launch of its new model TVS Jive, India`s first auto-clutch motorcycle, in Chandigarh. With this launch, the company expects that it sales in Punjab will grow significantly from 2,000 motorcycles to 3,600 motorcycles per month. Jive is propelled by a 110 cc engine, which features innovative T-Matic technology (patent applied for) with rotary gear technology, coupled with an automatic clutch. program aimed at boosting education among young children.

Shree Ganesh IPO good bet for investors with higher risk appetite: Shree Ganesh Jewellery House is the second company from the gems and jewellery space to enter the primary market with an initial public offering in the past two months. Shree Ganesh, a manufacturer and exporter of the handcrafted plain and studded gold jewellery, was incorporated in 2002. In March 2008, PE firm Credit Suisse invested Rs 80 cr in the company for a 10.99% stake at a price of Rs 300/-. Post issue, the company will be valued at 9.6 times its annualised H1FY10 earnings at the higher end of the prize band and 10 times at the lower end. Hence, the valuation is a tad higher compared to the P/E ratio of established players, such as Su-Raj Diamond and Gitanjali Gems in the range of 8-9 .5.


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