Gujarat NRE Coke - Macquarie

Future is bright

 

Event

􀂃 Coking coal price upgrades: We have upgraded our coking coal and coke price forecasts to reflect the severe tightness in the market. We have also accounted for the strength of the A$ vs US$. We have adjusted our stock price to Rs251 from Rs244.

 

Impact

􀂃 Coking coal forecasts up, driven by supply constraints: Our global commodities team now believes that the coking coal market is likely to continue to be extremely tight. We have upgraded our coking coal forecasts for FY09 and FY10 to $300/t, an increase of 67% and 87%, respectively. We have upgraded our Coke prices for FY09 and FY10 by 11% and 26% to $550/t and $538/t, respectively.

􀂃 Earnings – upgrades from FY3/10: GNC is self sufficient for only 70% of its coke requirement in FY3/09, and also has pre-sold 20% of its coke production at around $500/t. We reduce our EPS estimate to Rs13/sh from Rs16/sh.

However, GNC will become self sufficient in coking coal in FY3/10, and we have increased our EPS estimate to Rs23.1 from Rs17.6.

􀂃 Target price – marginal change: We upgrade our target price marginally to Rs251 in spite of earnings revisions for two reasons: first, we have reduced holdings in Australian mines from 85% to 82% to account for stock options; and second, reduced coke margins are leading to lower values for Indian business.

􀂃 Upsides remain from better mine production: With coking coal becoming highly valuable, the earnings from the mines will account for 74% in FY3/09 and 77% in FY3/10 from a negative contribution this year. Increased production is a possibility (please see our note 'Reporting from the ground' dated 26 March 2008 for details).

Earnings revision

􀂃 We have adjusted our EPS estimates for FY3/08–FY3/10 by -25%, -21% and 31% to Rs5, Rs13 and Rs23.1, respectively.

 

Price catalyst

􀂃 12-month price target: Rs251.00 based on a Sum of Parts methodology.

􀂃 Catalyst: Increased mine production and rising coke prices.

 

Action and recommendation

􀂃 Maintain outperform: We believe GNC provides a good opportunity to ride the strong coking coal cycle. With increased visibility from the development of the mine, it has the potential to get substantially re-rated over the medium term. With the potential for earnings growth of 160% in FY3/09 and 78% in FY3/10, we believe the stock is attractively valued at just around 10x PER on our DCF- based target price

Hindalco Industries - Macquarie

 

Aluminium underperforms

 

Event

􀂃 4Q FY3/08 standalone results below expectations: Hindalco's 4Q FY3/08 standalone results were 20% below our estimates at the operating level due to lower realisations and higher costs in the aluminium segment. However, our full-year FY3/08 estimates were met.

 

Impact

􀂃 Results hit by aluminium costs: Net sales of Rs50.1bn were up by 5.5% due to higher copper prices. EBITDA of Rs7.97bn was down 24% YoY, driven by a 31% drop in aluminium profits. Net profit of Rs10.8bn grew by 49%, driven by extraordinary income due to writebacks.

􀂃 Aluminium – surprise loser: The aluminium division was surprised by a sharp rise in costs, which was mostly accounted for by a 17% increase in power costs. The lower availability of linkage coal from Coal India has forced the company to make open market purchases for its captive power. Also, realisations were 6% lower than our estimates.

􀂃 Copper – surprise winner: In spite of 42% lower TC/RCs, the copper division has been able to improve profitability by 25% YoY. Rising product prices and better working capital management made copper the surprise winner.

􀂃 Expansions remain on track: The Muri alumina refinery expansion, by 390kt, has been completed. The Hirakud aluminium smelter expansion, by 43ktpa, is expected to be completed by 2Q FY3/09. Hindalco management has released a timeline guidance for all major Greenfield expansions, with Utkal expected first by 3Q CY10.

􀂃 Copper mine – can be more valuable: Hindalco's 51%-owned copper mine (ABML AU) has turned in a 73% increase in volume growth and a 3.5-fold increase in profitability. With an improving mine life and a higher probability to add further reserves, ABML can turn out to be more valuable, in our view.

 

Earnings revision

􀂃 No change.

 

Price catalyst

􀂃 12-month price target: Rs251.00 based on a Sum of Parts methodology.

􀂃 Catalyst: Higher aluminium prices and better profitability in copper division.

 

Action and recommendation

􀂃 Maintain Outperform: We maintain our Outperform recommendation on Hindalco because we expect a turnaround in Novelis to drive profitability sharply higher in FY3/09. Valuations remain attractive at around a 10x PER based on FY3/09E, given a strong growth profile, large accretion of coal and bauxite reserves and earnings growth potential.

HDFC Ltd - Macquarie

Strong operating performance

 

Event

􀂃 HDFC's strong operating numbers continue in 4Q FY3/08. There were some distortions caused by large asset sales and tax rates, but underlying performance remained robust.

 

Impact

􀂃 Loan growth strong, margins up. HDFC's mortgage business continues its strong growth, with loan growth at 29% and the share of individual mortgages stable at 66%. For quite a few quarters, HDFC has been bucking the trend of slower growth being experienced in the rest of the mortgage industry – its market share has been rising at the expense of banks. This is partly because banks' competitiveness is being eroded by rising CRR and they are increasingly concentrating on the wholesale lending markets, where fee opportunities are strong.

􀂃 Margins remain robust. Margins have been trending up through the year and finished the year with a 26bp improvement in spreads to 3.23%. The 75bp CRR hike announced by the Reserve Bank should help drive up HDFC's lending spreads further, as competing banks' intermediation costs go up.

􀂃 Tax rate a negative surprise. The tax rate provided a negative surprise in the year, pushing the full-year tax rate to 28% versus our estimates of 24%. This is due to the higher tax rate of 22% applied on the gains from sale of unlisted assets which provided the bulk of capital gains in this year versus the lower tax applied to sale of listed assets which constituted the majority of capital gains in previous years.

􀂃 Building on existing strength. HDFC's key strengths in cost efficiency and asset quality improved further this quarter with cost/income falling to single digits at 9% for FY3/08, down from 12% in FY3/07, while gross NPAs fell to an all-time low of 0.84%, down from 1.12% in 3Q FY3/08.

 

Earnings revision

􀂃 No change.

 

Price catalyst

􀂃 12-month price target: Rs3,573.00 based on a Sum of Parts methodology.

􀂃 Catalyst: NIM improvement in 2Q FY3/09E, as CRR impact flows through.

 

Action and recommendation

􀂃 HDFC's lending business is in better shape than ever before. The increasing importance of its insurance business does make its profile riskier than it has been historically, as does its semi-holdco structure. Its standalone valuation of 6.5x PBV masks the fact that significant value comes from its subsidiaries. We reckon that the parent bank is available at 4.0x PBV (one-year forward), which is very attractive, given its high and improving ROEs. We retain our Outperform rating with a target price of Rs3,573, 24% above current levels.

Reliance Communications - Macquarie

 

Less of wireless; Investing in future

 

Event

􀂃 Reliance Communications reported in line operating results for 4QFY08

although PAT came in ahead of expectations. We shift our Top Pick recommendation to Bharti Airtel even as we reiterate our Outperform on RCOM.

 

Impact

􀂃 4Q results driven by outperformance in the non-wireless businesses of Global and Broadband/Fixed Line, while wireless EBITDA came in line with our estimates. Wireless metrics were weak with ARPU and Minutes of Use surprising negatively while ARPM and EBITDA per minute were largely in line.

􀂃 MOUs decline sequentially at RCOM, in-contrast to trends at Bharti and

Idea. RCOM registered 4Q ARPU of Rs317, 3.6% below our estimate of 329, marking declines of 6.5% QoQ and 15.9% YoY. Similarly, monthly MOUs in 4Q at 430 were 2.8% below our estimate of 442. This is contrary to a sequential uptick in MOU seen in Bharti's (+7% QoQ) and Idea's (+9% QoQ) 4Q results.

􀂃 We believe RCOM is increasingly becoming an integrated telecom story

with the non-wireless businesses likely to drive operating performance for the next 3-4 quarters. Management is consciously focusing on EBITDA market share in the wireless business and RCOM now boasts of the highest EBITDA margins in the overall business and in the wireless segment across Indian telcos. Investors, however, are likely looking at subscriber and revenue market shares, while taking the view that profitability will follow. This apparent disconnect between management focus and market focus may cap stock valuations. We believe both revenues and margins will be equally important.

 

Earnings revision

􀂃 We are reviewing numbers for the sector and all three stocks post 4Q results.

 

Price catalyst

􀂃 12-month price target: Rs865.00 based on a Sum of Parts methodology.

􀂃 Catalyst: 1) Ramp-up in tenancy ratio in the towers business, 2) IPO of the TowerCo leading to value unlocking, 3) Successful GSM launch by end CY08.

 

Action and recommendation

􀂃 We continue to like RCOM as a company with strong future growth

drivers; it is investing aggressively in future growth (capex of US$11bn guided for FY09–10E). While this will likely deliver strong growth in topline and earnings post 2010–11E, the flip sides are a sharp increase in capital intensity, delayed free cash, lower return on capital in near-term and execution worries.

􀂃 RCOM's valuation re-rating may get pushed back by couple of quarters:

We believe that in the next 2–3 quarters, RCOM is unlikely to deliver positive surprises in operating performance. This will only improve with the launch of pan-India GSM service in the next 9–12 months. We think investors in the interim will be focused on execution and network rollout schedules as promised.

􀂃 Bharti our new Top Pick in Indian telecoms: We see Bharti as a well-oiled execution machine in the near term, delivering consistent positive surprises on key operating metrics. The widening chasm between Bharti & RCOM in QoQ wireless revenue growth will likely mean that catch-up in valuations between the two will likely be delayed. We shift our Top Pick reco in Indian Telecoms to Bharti Airtel (BHARTI IN, OP, Tgt Price: Rs1,400, Upside: 56%).

 

Reliance Industries - Macquarie

 

Largely unaffected by crude change

 

Event

􀂃 Macquarie oil and gas sector head, David Johnson, has upgraded the crudeoil forecast by 5-16% for 2008-11E and the long-term forecast from US$78/bbl to US$83/bbl. We have raised RIL's target price by 1% from Rs3,125 to Rs3,155. We reaffirm our Outperform recommendation.

 

Impact

􀂃 Fundamentals vs speculation. David has upgraded the oil-price forecast by a significant amount for 2008 to take account of the changing supply/demand situation and the influence of speculators/financial investors on the crudeprice equation.

=> Our demand forecast is based on our economists view that the US and European economies will show slower GDP growth in 2008 and that this will be reflected in a slowdown in the growth of oil consumption - 0.8% growth in oil consumption in 2008 (2007 =1.7%).

=> On the supply side, we look for a marginal rise in non-OPEC production of 0.3m bpd (0.6%) - FSU production accounts for almost all of the growth. We assume OPEC holds production at 32.15m bpd of oil and 5.1m bpd of NGLs.

=> Our oil-price forecast for 2008 is upgraded by US$14.50/bbl to US$102/bbl (WTI) to reflect the larger speculative elements we believe are included in current prices. We assume that these elements wane over time and that oil moves back into a US$80-85/bbl range.

􀂃 Investments led target-price upgrade. We think the effect of a crude-oil price increase on RIL will be small, given that oil (in comparison with gas, refining and petrochemicals) contributes towards a small portion of its business. We are upgrading our target price by 1% to factor in the revised value of RIL's equity holdings in line with current market prices.

􀂃 Volume-driven tripling in earnings. We expect RIL's earnings to triple in the next five years given strong volume growth across businesses (refinery: 88%, petrochemicals: 94% and 22x upstream) despite the margin squeeze. We believe there is a huge upside potential from E&P given RIL's large portfolio of prospective blocks and its outstanding success rate.

 

Earnings revision

􀂃 We upgrade RIL's FY09E and FY10E earnings by 2.2% and 0.7% as a result of US$15/bbl and US$3/bbl upgrades in the crude price, respectively.

 

Price catalyst

􀂃 12-month price target: Rs3,155.00 based on a Sum of Parts methodology.

􀂃 Catalyst: New oil and gas finds and improved clarity on organised retail.

 

Action and recommendation

􀂃 Reliance Industries is our top sector pick. Reliance Industries has planned a large capex of more than US$20bn over the next five years, which we think is likely to triple earnings in five years. In addition, the investments in highgrowth businesses like E&P and retail may lead to a consistent rise in ROE

 

More steps on cards to ease inflation: Govt

A day after banning futures trade in four farm commodities and
persuading steel producers to slash prices, the govt said more
measures were in the offing to curb inflation, which should ease in 8
weeks.


"Government is not helpless and has means to ensure prices are brought
down. More measures both administrative and fiscal are in the offing
to control inflation," Minister of State for Industry Ashwani Kumar
told reporters in New Delhi on Thursday.


He said iron ore, steel and cement would continue to remain under the
government scanner.


He said a series of calibrated measures would ensure that inflation is
brought down by at least one percentage point in the next two months.


Prices of wheat, rice and edible oils have already come down between
1st March and 6th May, Kumar said.



Wheat prices have declined by 1.6 percent, wheat by 9.1 percent and
edible oil by over 18 percent, he said.


The government on Wednesday suspended futures trading in gram, refined
soya, potato and rubber for four months a move aimed at arresting
speculation-driven price rise to cool inflation that is over 7.5
percent now.


Besides, steel producers announced cut in prices by up to Rs 4,000 a
ton after a meeting with Prime Minister Manmohan Singh on Wednesday.



Kumar said if the voluntary measures fail to yield results, "the
government has administrative options which will definitely bring down
prices".


"All energies of the government are being focused on very
comprehensive and calibrated steps to attack each factor that
contributes to inflation from all angels," he said.



A favourable monsoon and harvest would further ease the pressure on
prices of food grains, he added.


He said food prices in India are below the global level and the
government has not passed the burden of high prices of imported food
items to consumers, but "absorbed" it.


On the basis of extrapolation of prices, it has been observed that
rates of pulses, edible oils and cement have declined between 1st
March and 6th May, 2008.


While price of pulses have seen a 7.69 percent decline, that of edible
oils have dropped by 18.93 percent and cement by 2.91 percent.



Edible oil prices are likely to decline further by five percent in
view of large imports expected by mid-May, he said.


Price of iron and steel has, however, seen a 6.6 percent increase to
Rs 29,898 on 6th May from Rs 24,295 on 1st March.



"The Indian Bureau of Mines do not expect prices to come down but stay
at the new level for couple of months," he said.

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PowerYourTrade Trading Calls

Trading Calls for 09 May 2008

Ashwani Gujral Buy Reliance Power with a stop loss of Rs 400 for target of Rs 460 Buy Reliance Power with a stop loss of Rs 400 for target of Rs 460. Disclosure:Neither me, nor my family nor our clients have any position in the above stock. However we run a substantial newsletter, chatroom and money mgmt business and this can change at any time in future. Buy Shiv Vani Oil & Gas Exploration Services with a stop loss of Rs 597 for target of Rs 744 Buy Shiv Vani Oil & Gas Exploration Services with a stop loss of Rs 597 for target of Rs 744. Disclosure:Neither me, nor my family nor our clients have any position in the above stock. However we run a substantial newsletter, chatroom and money mgmt business and this can change at any time in future.

Rajat K Bose Buy Balrampur Chini with a stop loss below Rs 98.90 for targets of Rs 104 and Rs 107; This is a day trading recommendation Buy Balrampur Chini with a stop loss below Rs 98.90 for targets of Rs 104 and Rs 107. This is a day trading recommendation. Note: Either on the long side or on the short side if at any moment a counter is not moving beyond an initial or interim target to the final target book profits. Once initial target is crossed, you can use that as your trailing stop-loss level. Caveat: I hold the stock in my personal portfolio. Notes: · All prices relate to the NSE, unless otherwise mentioned. · Calls are based on the previous trading day's price activity. · The call is valid for the next trading session only unless otherwise mentioned. · Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. · Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these recommendations. Disclosure: His newsletter clients have been recommended the same along with other picks. Traders are requested to adhere to the stop losses very strictly; they are given to be implemented, not ignored. Do not chase a security and take a position where you would be uncomfortable with the stop-loss level. Take a position only when you feel that the risk-reward ratio looks comfortable and favourable for the trade.

		Mathew Easow Buy Webel SL Energy Systems only on declines with a stop loss of Rs 310 for a short-term target of Rs 374 Buy Webel SL Energy Systems only on declines with a stop loss of Rs 310 for a short-term target of Rs 374. Disclaimer: - At the time of writing this article, I, my family members and my group companies do not have any position in WEBEL-SL ENERGY SYSTEMS LTD. This stock has been recommended to our clients and they may be holding long or short positions in this stock. Mathew Easow and matheweasow.com gives an unbiased and competent picture of trading & investment opportunities and it does that to the best of its abilities. The information contained herein is not a complete analysis of every material fact representing the company, industry or security. The views expressed may change. However, prices can move up as well as down due to a number of factors, all of which are impossible for anyone to foresee. THEREFORE, Mathew Easow and matheweasow.com cannot accept any responsibility (or liability) for the accuracy of the above contents and also any investment decision or trading decision taken by readers and clients on the basis of information contained herein. Short Term Target Means - Approximately 3 -4 weeks. If the target is not met within 3-4 weeks then please exit the positions. Please follow stop losses very strictly and do not take positions where one is uncomfortable with the stop loss level. Above all Buy or Sell the stock only when the risk - reward ratio vis-a-vis the stop loss is favourable for taking a position. Individual traders /investors should book profit depending on their risk bearing capacity and need not wait for the targets.

 

Sharekhan Investor's Eye dated May 08, 2008

Investor's Eye [May 08, 2008] Please see the attachment for details Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE Shiv-Vani Oil & Gas Exploration Services  Cluster: Ugly Duckling Recommendation: Buy Price target: Rs725 Current market price: Rs630 Price target revised to Rs725 Result highlights Shiv-Vani Oil & Gas Exploration (Shiv-Vani) has reported an excellent top line growth of 63.3% in its consolidated revenues to Rs178.5 crore for Q5FY2008. The growth was achieved on the back of strong realisation and higher revenue contribution of the coal bed methane project.  The operating profit margin (OPM) improved by 330 basis points year on year (yoy) to 39.1% primarily due to the improvement in the realisation and more efficient fleet utilisation. Consequently, the operating profit grew by an astounding 147% to Rs69.9 crore. However, on a sequential basis, the margin dipped by 230 basis points to 39.1% because of higher other expenses, which included some one-time items of foreign exchange (forex) losses. Both interest and depreciation charges have risen on the back of increased capital expenditure (capex) incurred by the company. However, the lower taxes led to a brilliant 165% growth in the net profits to Rs31.8 crore.  The company plans to spend close to Rs650 crore in FY2009 as it looks to add six more rigs by July 2008, taking the total number of rigs to 32. Further, the number would be increased to 40 rigs by the end of the year.  The company's order book remains healthy at Rs3,500 crore. We have fine-tuned our numbers a little in line with the company' s capex plan. We marginally upgrade our FY2009 profit estimate by 1.3% to Rs161 crore and upgrade our FY2010 profit estimate by 15% to Rs241.2 crore, as majority of the new rigs would start to contribute to the top line. At the current market price the stock trades at 19.5x FY2009 and 13x FY2010 estimated earnings. We maintain our Buy call on the stock with a revised price target of Rs725. Jaiprakash Associates Cluster: Ugly Duckling Recommendation: Buy Price target: Rs390 Current market price: Rs269 Results above expectations Result highlights Jaiprakash Associates Ltd (JAL) Q4FY2008 results were above our estimates. On a standalone basis the company reported a top line growth of 44.5% year on year (yoy) to Rs1,280 crore. This was on account of a 45.7% year-on-year (y-o-y) growth in the revenues from the construction division to Rs475 crore. The higher revenue was also aided by the revenue from the real estate division, which stood at Rs256 crore against nil during the corresponding period last year.  The operating profit margin (OPM) on a standalone basis for the quarter improved by 140 basis points yoy to 31.1%. This was mainly on account of higher earning before interest and tax (EBIT) margin of the construction division, which reported an increase of 950 basis points to 25.5%. The real estate division reported an EBIT margin of 31.6%, while the cement division reported a negligible improvement of 30 basis points in EBIT margin to 35.3%. However the hotel and hospitality division reported a decline of 1,190 basis points in the EBIT margin to 16.7%. Consequently the operating profit jumped by 51.3% to Rs398 crore. On a standalone basis, the company reported a net profit after tax (PAT) of Rs211 crore, up by 61.1% yoy. The growth in the net profit was mainly because of an increase in the other income by 120% to Rs66 crore. For the year ended March 2008, on a standalone basis the net sales increased 14.6% yoy to Rs3,985 crore and the PAT stood at Rs610 crore, up 47% yoy. On a consolidated basis, the net sales increased by 6.8% to Rs4,201 crore and the adjusted PAT stood at Rs627 core, an increase of 21.2% yoy. We have upgraded our FY2009 earnings per share (EPS) estimate by 10.9% to Rs6 and have also introduced FY2010 estimates. The estimated PAT for FY2010 stands at Rs947.9 crore, implying a growth of 26.4% over FY2009E. At the current market price of Rs269, the stock is trading at 45x its FY2009E EPS and 35x its FY2010E EPS. We maintain a Buy on the stock with a price target of Rs390 based on our sum-of-the-parts valuation. SECTOR UPDATE Information Technology Cognizant caps front tech stock valuation in near term Front tech Indian IT stocks witnessed resurgence in the last couple of months on the back of the extension of STPI benefits, the stabilisation of rupee against the dollar and the guidance announcements in line with street expectations. The front tech IT stocks have grown in the range of 13%-25% from April 1, 2008.

Regards, The Sharekhan Research Team myaccount@sharekhan.com

 

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Sharekhan Pre-Market Report dated May 09 2008

. Market may be volatile in early trades   An overnight fall in European indices and the ongoing mix trend in the Asian indices may result in volatility in our market in the early trades.   The market is likely to witness a downtrend as major Asian indices like the Nikkei, the Hang Seng Index and the Kospi Index are down marginally, while the Jakarta Index has gained over 0.13% in the current trades and the US market also ended in the positive. The market is likely to extend its losing streak as the sentiment remains bearish and a sharp bout of volatility can be expected during the intra-day trades. The Nifty could test 5100-5130 levels on the upside, while it has a likely support at 5060 on the downside. The Sensex has a likely support at 16970 and could face strong resistance at 17200.   US indices on Thursday gained marginally, with the Dow Jones closing up 52 points at 12867 and the Nasdaq moving up by 13 points to close at 2451.   Indian ADR losers outnumbered the gainers on the US bourses. ICICI Bank, Patni Computer, Tata Motors and MTNL dropped 1-2% each while Infosys, Dr Reddy's, VSNL and HDFC Bank were down by one half percentage each. Among the gainers Satyam, Wipro and Rediff closed with a marginal gain.   The Nymex light crude oil for June delivery gained further by 16 cents to close at $123.69 a barrel. In the commodity space, the Comex gold for June series jumped $11.10 to settle at $882.30 an ounce.   Daily trend of FII investment in equities On May 06, 2008, FIIs were net buyers of stocks to the tune of Rs325.10 crore (purchases worth Rs3,435.70 crore and sales of Rs3,110.60 crore). Domestic mutual funds were net sellers of stocks to the tune of Rs23.10 crore (purchases worth Rs612.40 crore and sales of Rs635.50 crore).  INDICES SNAPSHOT ASIAN INDICES at 09:20 IST on 09/05/2008 Index Level Change(pts) Change(%) Nikkei 13815.68 -127.58 -0.91 Hang Seng 25370.91 -78.88 -0.31 Kospi Index 1825.50 22.50 -1.22 Straits Times 3167.82 -4.06 -0.13 Jakarta Composite 2380.116 3.18 0.13 EUROPEAN INDICES at close on 08/05/2008 FTSE 100 6270.80 9.80 0.16 CAC 40 Index 5055.58 -19.73 -0.39 Dax Index 7071.90 -4.35 -0.06 US INDICES at close on 08/05/2008 Dow Jones 12866.78 52.43 0.41 Nasdaq 2451.24 12.75 0.52	PRE-MARKET COMMENTARY 09/05/2008| Market round-up, 9:45 IST
	STOCK TO WATCH TODAY APOLLOTYR ASIANPNT KMFL NOVARTIS MASL   INDIAN ADRs Company Last Close %Change Infosys 42.83 -0.95 Satyam 25.59 0.20 Wipro 12.90 0.23 Dr.Reddy's 15.33 -0.58 Tata Motors 16.16 -1.28 ICICI Bank 43.06 -2.71 HDFC Bank 109.42 -0.08 MTNL 5.07 -0.98 VSNL (TCL)* 23.63 -0.88 Rediff 8.65 0.23 Patni Comp 12.65 -2.24
Sharekhan Ltd.: BSE Cash-INB011073351; F&O-INF011073351; NSE – INB/INF231073330; MAPIN – 100008375; DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; PMS INP00000066; Mutual Fund: ARN 20669. Sharekhan Commodities Pvt. Ltd.: MCX-10080; NCDEX-00132; MAPIN – 100013912, For any complaints email at igc@sharekhan.com Regd/Admin Add:- A-206, Phoenix House, Phoenix Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Please carefully read the risk disclosure document as prescribed by SEBI & FMC and Do's & Don'ts by NCDEX

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PowerYourTrade Midday Trading Calls

Midday Trading Calls for 08th May 2008
Hitendra Vasudeo, stockmechanics.com Sell ICICI Bank below Rs 900. Stop Loss of Rs 920, target of Rs 870-Rs 860. (Intra-day/Positional Call) Buy Reliance Power above Rs 415. Stop Loss of Rs 407, target of Rs 424-Rs 427. (Intra-day/Positional Call) Sell Reliance Capital below Rs 1389. Stop Loss of Rs 1420, target of Rs 1299-Rs 1273. (Intra-day/Positional Call) Disclaimer :Intra-day call are of high risk as they are based on instant market movement. If the money and risk is not managed correctly, then traders and short term investors can land up in losses. We are not responsible for any losses that can occur due to volatility and stop loss violation. I do not have any personal positions any time on the recommendation made for the intra-day calls. However, it is possible that our Live Market Calls subscriber's could have positions and trading positions without our knowlege and consent. We also dont have any control on our client reverse positions if they have created against our recommendtion. Individual traders, implementers of the trading call are doing it at their own risk. We also dont have any control on our subscriber's positions. Traders are advised to check their cost in long and short trades and kee p taking profits irrespective of our targets. What matter is trading profits therefore check cost and keep taking profits. Rahul Mohindar, viratechindia.com Buy Reliance Industries at Rs 2670 for target of Rs 2704, support at Rs 2664 and Rs 2650. Buy SBI above Rs 1753 only, support is of Rs 1736, target of Rs 1775. Disclaimer & Disclosure : The above are short term calls and we hold no positions in the above recommendations. Only risk capital should be used to trade futures, stocks, or options on futures or stocks, or mutual funds, or any other financial instruments, in conjunction with proven tools and research. All investments and trades carry risks, and all trading decisions are ultimately made by you and you are solely and individually responsible for the decisions and the results of those decisions. Myself and the Viratech group do not hold any responsibility or guarantee on any recommendation.

 

RBI pulls out forex from foreign banks

MUMBAI: The central bank appears to have carried out changes to its
forex reserve management strategy by pulling out substantial funds
parked with many high-street banks. The shift may have been prompted
by the recent developments in the global financial markets.

New data available with the Reserve Bank of India pertaining to the
period between March 2007 and March 2008 shows that although forex
reserves rose by more than 50% during this period, the deposits parked
by the central bank with foreign banks around the world dipped from
$46.7 billion in March 2007 to $6 billion in March 2008.

These funds are now being placed with other central banks and
mutlilateral agencies where the returns are reckoned to be relatively
low. India's foreign exchange reserves aggregated $309 billion at the
end of March 2008. It has swelled to $313 billion in April-end, making
India the sixth-largest custodian of forex reserves in the world.

This dip has been particularly steep since July 2007, which coincides
with the turmoil in credit markets in the West. This was the period
during which the US subprime crisis snowballed, impacting the global
financial markets.

Top-rated global banking majors have taken a major hit during the past
few quarters on account of their investment in mortgage securities.
This may also have influenced the RBI's decision to change gears in
the near term and berth in safer shores. The move may have an impact
on the RBI's income from overseas investments.

Over the past few years, income from foreign sources have accounted
for more than 75% of the central bank's total income. But, RBI has
always maintained that its primary aim when it comes to foreign
exchange reserves management was to ensure safety and liquidity, with
higher returns figuring lower in the hierarchy of preferences on this
issue.

RBI's parking of reserves is consistent with the best practices laid
down for central banks by the International Monetary Fund (IMF). This
includes parking part of the reserves as cash deposits with foreign
central banks and multilateral agencies such as IMF and the Bank for
International Settlements (BIS).

It also invests in the deposits of foreign commercial banks and bonds,
generally the highest-rated sovereign bonds of leading economies and
occasionally in top rated corporate bonds. India's foreign exchange
reserves are spread across a variety of currencies including the
dollar, euro and yen.

But, the precise currency composition of reserves is generally not
released by most countries including India, going by global practice.
According to RBI, this is because short-term variations in reserves
held in different currencies by central banks are regarded as being
market sensitive.

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