Indian stock market and companies daily report (April 09, 2012, Monday)

The Indian markets are expected to open in red tracking cues from Asian markets which are trading in negative zone reacting to reports which showed that inflation in China grew more than expected raising fears of slowdown in global growth.
The U.S markets showed a lack of direction throughout the trading day on Thursday as investors remained on the sidelines ahead of the long weekend and release of the March jobs report on Friday. As per the U.S. Labor Department data, employment saw continued growth in the month of March, although the pace of job growth came in well below economist estimates. The non-farm payroll employment increased by 120,000 jobs in March against economist’s expectation of 201,000 jobs. However, despite the weaker than expected job growth, the unemployment rate edged down to 8.2% in March from 8.3% in February.
While reaction to the US monthly jobs report is likely to drive trading in the global markets today (U.S. stock markets closed for Good Friday), reports on the U.S. trade deficit, consumer sentiment, and producer and consumer price inflation are likely to be in focus later in the week.

Markets Today
The trend deciding level for the day is 17,492/5,322 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,547 – 17,609/5,339 – 5,355 levels. However, if NIFTY trades below 17,492/5,322 levels for the first half-an-hour of trade then it may correct up to 17,431 – 17,375/5,306 – 5,289 levels.

Marico to sell 4.8% stake to raise Rs.500cr
Marico plans to sell 4.8% stake to Singapore's sovereign wealth fund GIC and Baring Private Equity India to raise a sum of Rs.500cr. Indivest Pte. Ltd., an investment arm of GIC, will invest Rs.375cr to subscribe over 2.2cr shares, while Baring India Private Equity Fund will invest Rs.125cr to subscribe over 0.73cr shares on a preferential basis, valuing each share of the company at Rs.170. The preferential issue is primarily for funding the acquisition of Paras Pharmaceuticals as well as other capital expenditure and is subject to shareholders’ approval in the EGM scheduled on May 2, 2012. Around two months earlier, the company had bought personal care brands such as Setwet, Livon and Zatak from Reckitt Benckiser, which in turn had acquired these brands from Paras Pharmaceuticals last year. At the CMP, the stock trades at price to earnings multiple of 20.8x FY2014E. We maintain our Neutral view on the stock.

HUL sells Mumbai property to Ajay Piramal Group for Rs.452cr
HUL has sold its one acre sea-facing property at Worli in Mumbai to Ajay Piramal group for Rs.452cr. The property was put up for sale after the company had shifted its training centre from there to its new premises at Andheri. HUL has been trying to sell this property, so as to unlock value from idle assets including real-estate. At CMP, the stock trades at price to earnings multiple of 24.8x FY2014E. We maintain our Neutral view on the stock.

Economic and Political News
- Power Ministry eyes 920,000mn units of electricity in FY2013
- Cotton Association demands removal of ban on cotton exports
- PMO to hasten languishing port projects
- Strengthen recovery mechanism for NBFCs: Finance Ministry
- Government initiates exercise to revise WPI series

Corporate News
- Coal India may import coal to ensure adequate fuel to power firms
- Coal Ministry's nod pending for ONGC's pilot UCG project
- Hindustan Copper plans to raise Rs.1,250cr via ECB

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The need of commodities in trading

Commodity markets are markets where raw or unfinished products are exchanged. These raw commodities are dealt on regulated commodities exchanges in which they are purchased and sold as per the standardized contracts.

This article emphasizes on the past and current arguments regarding global commodity markets. It covers physical products such as food, metals, electricity but not particularly about those services, including the stock markets, bond markets and currency markets that need to be addressed separately as issues in more depth.

The focus of this article is more on the relationship between money involved with simple commodities and the more complex instruments that are offered in the commodity markets.

The modern commodity markets have their traditional roots in the trading of agricultural products. Wheat, corn, cattle and pigs were widely used as standard trading instruments in the 19^th century in the USA. Other basic food materials such as soybeans were added only recently in most markets.

For a commodity market to be established there must be a broad consensus on the variety in the product that make it acceptable for different purposes.

The economic impact in the development of the commodity markets is hard to overestimate. Throughout the 19^th century, the exchanges became effective spokesmen for and innovators of improvements in the transport system, warehousing and financing which paved the way to expand the international trade.

Since the ancient Sumerian use of sheep or goats, people used pigs, rare seashells or other various items as commodity money, people have found different ways to standardize and then trade contracts in deliveries of such items to render trade to make it smooth and predictable.

Commodity money and the commodity markets in a crude early from are  believed  to have been originated in Sumer where small baked clay  tokens in shapes of sheep, goats, were used in different forms of trade.

Sealed in various clay vessels a number was written outside that represented a promise to deliver that particular number. This made them a form of commodity money.  – More than a I.O.U but less than a guarantee of the total number that was outside but  more than an I.O.U. but less than a guarantee by a nation-state or bank. However, they were also known to contain promises of time and date of delivery - this made them like a modern futures contract. Regardless of the details, it was only possible to verify the number of tokens inside by shaking the vessel or by breaking it, at which point the number or terms written on the outside became subject to doubt.

Become a Sub Broker

A sub-broker is any individual who is not a member of a stock exchange but acts on behalf of a member –broker as an agent or otherwise for assisting the investors in purchasing, selling or dealing in securities through member-brokers.

All sub-brokers have to submit to obtain a certificate of registration from SEBI failing to which they are not allowed to deal in securities. SEBI has issued a notice stating that no broker will be allowed to deal with an individual who is acting as a sub-broker unless he is registered with SEBI and it shall be the responsibility of that member-broker to ensure that his clients are not acting in any capacity as a sub-broker unless they are registered with SEBI as a sub-broker.

It is compulsory for member-brokers to enter into an agreement with all the sub-brokers. The agreement lays down the rights and responsibilities of member-brokers as well as sub-brokers.

According to SEBI, there are certain norms and regulations which he has to follow. Some of them are listed below:

1) A sub-broker will have to maintain separate account books in respect to his dealings with his affiliated members, if he is doing business with more than one member. Under no circumstances he will be allowed to mix funds received from payable member with that of another.

2) A sub-broker agrees to the fact that he will not except with the consent of the sub-broker, commit on his behalf transactions in commodity futures in excess of the amount mutually agreed upon in writing from time to time being the aggregate value of such transactions agreed upon to be transacted in any contact and the maximum outstanding position due of a client will also be limited to such limits as specified by the sub-broker.

3) The sub-broker and member will have to agree that both will ensure protection to their clients regarding their rights and neither of them shall together or individually do anything which will in most likely harm the interest of clients for whom they have committed transactions and commodity futures.

4) It will be the responsibility of the member to inform the sub-broker and keep him informed about any form of trading/settlement cycles, delivery payment schedules, charges if any included from time to time. It shall also be his responsibility in return of the sub-broker to agree with such procedures of the mentioned exchange of which the member is a member.

Angel Broking believes in growing with its business partners and franchisees. Our dedicated efforts and continuous improvement in our services has made us one of the most respected broking houses with the largest network of business partners and franchisees across India.

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Indian stock market and companies daily report (March 30, 2012, Friday)

The Indian markets are expected to open in the red tracing negative opening in most of the Asian indices. Asian stocks fell for a second day as growth in U.S. durable-goods orders trailed estimates.

The US markets drifted lower over the course of the day on account of profit booking as some traders cashed in on the recent strength in the markets amid calls by a number of analysts for a correction. Traders also reacted negatively to the latest batch of U.S. economic data, including a report from the Labor Department showing that weekly jobless claims came in above economist estimates. However the indices recovered significantly in the later sessions and eventually ended up near the opening.

Indian shares extended losses for a second consecutive session on Thursday, as concerns about growth prospects in the world's two largest economies prompted investors to square off long positions on the expiry of March series derivative contracts.

Markets Today

The trend deciding level for the day is 17,136/5,200 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,232 – 17,342/5,231 – 5,267 levels. However, if NIFTY trades below 17,136/5,200 levels for the first half-an-hour of trade then it may correct up to 17,026 – 16,930/5,164 – 5,133 levels.

TCS to provide banking solution - BaNCS to AmBank, Malaysia

TCS' financial services platform, TCS BaNCS, will replace Malaysian AmBank's core banking engine. This integrated banking suite, spanning conventional and Islamic banking, will support both retail banking and lending functionalities. TCS BaNCS will help expand AmBank's business into new areas. It will also enable development and the scalability required to meet both current and future market and regulatory needs. Due to this deployment, TCS may soon have a regional support centre for TCS BaNCS in Kuala Lumpur. We maintain Accumulate rating on the stock with a target price of Rs.1,262.

NTPC Tamil Nadu Energy Co. commissions Unit I of Vallur Power Project

NTPC Tamil Nadu Energy Co. Ltd. a JV of NTPC Ltd. and TNEB has commissioned Unit I (500 MW) of Vallur Thermal Power Project on March 28, 2012. With this, the total capacity of NTPC group has become 36,514 MW. In all NTPC group has commissioned 2,320MW of capacity in FY2012 till date, which is below the initial target of 4,320MW. At the CMP, the stock is trading at 1.6x FY2013E P/BV. We maintain a Buy on the stock with a Target Price of Rs.199.

Economic and Political News
- February infra output up 6.8% yoy
- Indian GDP to grow at 7.5% in FY2013: Fitch
- Government will clarify stance on P-Notes taxation: Finance Minister

Corporate News
- Tata Motors hikes commercial vehicle prices by up to Rs.60,000
- Tata Motors to invest Rs.600cr on defense vehicles
- NTPC to halt expansion of gas-based projects
- Bharat Forge earmarks Rs.100cr to develop artillery gun

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Indian stock market and companies daily report (March 28, 2012, Tuesday)

The Indian markets are expected to open flat to negative today tracing negative opening in most of the Asian bourses. Domestic markets gained ground in volatile trading session yesterday, as firm global cues amid signs that easy monetary policy would remain in place in the U.S. for some time underpinned sentiment. The upward move gained momentum in the afternoon session after media reports said that the government is not keen on chasing participatory notes, or derivative products that allow foreign investors to invest into Indian equities via tax havens like Mauritius under the new General Anti-Avoidance Rules targeting tax avoidance. Most of the Asian stocks also ended higher yesterday.Globally, most of the U.S. and European markets ended lower yesterday showing a lack of direction throughout much of the session. Disappointing economic data from the U.S. also weighed on the markets as the Conference Board’s confidence index fell to 70.2 in March from a revised 71.6 reading for February. A separate report
from S&P showed a continued drop in U.S. home prices in the month of January, with prices index falling by an annual rate of 3.8% compared to 4.1% drop in December. The markets will now closely watch out for U.S. GDP data for 4QCY2011 which is due to be released tomorrow.

Markets Today

The trend deciding level for the day is 17, 228/5,235 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,396 – 17,534/5,286 – 5,329 levels. However, if NIFTY trades below 17, 228/5,235 levels for the first half-an-hour of trade then it may correct up to 17,090 – 16,923/5,193 – 5,142 levels.

News Analysis

- L&T bags order worth Rs.1,700cr
- ITNL bags road BOT project worth Rs.651cr
- Sadbhav Engineering bags Rs.1,220cr project from NHAI
- Jagran group closes in on Nai Dunia buy

L&T bags order worth Rs.1,700cr

Larsen & Toubro (L&T) Metallurgical and Material Handling, part of L&T Construction, has won a contract worth Rs.1,700cr from Tata Steel for its new 6mn tonne per annum steel plant being set up at Kalinganagar in Odisha. As part of the greenfield steel plant, L&T is executing a slew of projects, like blast furnace, sinter plant, coke oven, balance of plant for steel melt shop, hot strip mill, utilities and construction works for other areas.

At the CMP of Rs.1,303, the stock is trading at PE of 18.4x FY2013E earnings,which is below the historical trading multiple for L&T. We have used the SOTP methodology to value the company to capture all its business initiatives and investments/stakes in different businesses. Ascribing separate values to its parent business on P/E basis and investments in subsidiaries on P/E, P/BV and mcap basis, our target price works out to Rs.1,607, which provides 23.3% upside from current levels. Hence, we maintain our Buy recommendation on the stock.

ITNL bags road BOT project worth Rs.651cr

IL&FS Transportation Networks Ltd. (ITNL) has bagged a road project worth Rs.650.8cr from Public Works Department, Rajasthan. The project involves development and operation of Sikar-Bikaner section in Rajasthan. The project, under PPP model, would be executed on DBFOT basis and involves grant of Rs.247.3cr. The project is on toll basis with a concession period of 25 years including construction period of two years. ITNL was the sole bidder for the project. We recommend Buy on the stock with an SOTP target price of Rs.235.

Sadbhav Engineering bags Rs.1,220cr project from NHAI

Sadbhav Engineering (SEL) has bagged a Rs.1,220cr order from NHAI for four-laning of the Solapur-Bijapur section of NH-13. The project would be executed on BOT (Toll) basis, under NHDP Phase-III. The concession period of the project is 20 years from the appointed date. We maintain our positive view on the stock; however, our target price is currently under review.

Jagran group closes in on Nai Dunia buy

According to news reports, the Jagran group that publishes the country’s most widely read Hindi newspaper, Dainik Jagran, is close to buying out Nai Dunia, the Indore-based Hindi daily promoted by Vinay Chhajlani. The deal size is expected to be around Rs.300cr. According to the Indian Readership Survey (IRS) Q4 report, Dainik Jagran has average issue readership of 16.41mn, making it the most read publication across the country, while Nai Dunia has average readership of 1.64mn. Currently the group publishes two editions in Madhya Pradesh and if the deal goes through Jagran would get an avenue to expand in Central India and particularly in Madhya Pradesh, where Nai Dunia is second largest read daily. At CMP, the stock trades at price to earnings multiple of 13.4x FY2013E. We maintain a Buy on the stock with a Target Price of Rs.137.

Economic and Political News

- 65% of government’s borrowing to be in 1HFY2013
- No subsidy for digitalization but implementation on track: Government
- Rs.2.73lakh cr of I-T dues locked up in disputes: Government

Corporate News

- REpower signs contract for supplying 54 turbines in Germany
- Patni gets Rio Tinto outsourcing order
- Gammon Infra bags Rs.935cr road project from NHA

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