Transitioning to a New World – An Analytical Perspective

Recently, I had the opportunity to speak at the Silicon India Business Intelligence Conference. The topic I chose for the discussion was focused on providing the BI & Analytics perspective for companies transitioning to a new world.  The gist of my presentation is given below: 1)      First, established the fact that the world indeed is changing by showing some statistics: Data Deluge: Amount of digital data created in the world right now stands at 7 Zettabytes per annum (1 Zettabyte = 1 Trillion Terabytes) Social Media: Facebook has touched 1 Billion users which makes it the 3rd largest country in the world Cloud: Tremendous amount of cloud infrastructure is being created Mobility: There are 4.7 billion mobile subscribers which covers 65% of world population 2)      Enterprises face a very different marketplace due to the profound changes taking place in the way people buy, sell, interact with one another, spend their leisure time etc. 3)      To ensure that BI can help business navigate the new normal, there are 3 key focus areas. Remove Bottlenecks – Give business what they want Enhance Intelligence End to End Visibility by strengthening the fundamentals For each of the 3 areas mentioned above, I gave some specific examples of the trends in the BI space. 1)      For Removing Bottlenecks, the impact of in-memory and columnar databases were elaborated. 2)      For enhancing intelligence, working with unstructured data and using big data techniques were discussed. 3)      For the 3rd point, the focus was on strengthening the fundamentals in the BI landscape. Please do check out my complete presentation at http://bit.ly/VLDDfF and let me know your views. Thanks for reading.

Posted on: 17 October 2012 | 1:02 am

Cognizant Technology Q2: IT stocks gain up to 3 per cent

Information technology (IT) stocks on Tuesday gained up to 3 per cent a day after Cognizant Technology posted 21 per cent jump in net profit for the quarter ended June 30, and gave a bullish annual revenue outlook. Cognizant has pipped Infosys Technologies to become the second-largest software company in India with a revenue of $1.79 billion (about Rs 9,938 crore) for the April-June quarter this year. Shares of Tata Consultancy Services moved up by 2.86 per cent to settle at Rs 1,264.60 on the Bombay Stock Exchange, while Infosys gained 1.9 per cent to close at Rs 2,255.70. Among others, Wipro was up by 0.83 per cent, HCL Tech gained 1.46 per cent, Oracle Financial Services rose 0.75 per cent, Tech Mahindra moved up by 0.67 per cent and the stock of Hexaware Technologies closed 0.44 per cent up. Following the gains in these stocks, the BSE IT index settled 1.95 per cent up at 5,449.97. "Shares of IT companies performed well today on the back of strong set of numbers posted by Cognizant for the June quarter," Milan Bavishi Head Research Inventure Growth & Securities said. For the September quarter, Cognizant anticipates its revenues to be at least $1.875 billion, while for the 2012, it maintained outlook for revenue to be at least $7.34 billion (at least 20 per cent growth compared to 2011). With a bullish annual revenue outlook, Cognizant may remain at the number two spot as Infosys has given a muted guidance of 5 per cent growth for the year, given the uncertainty in the global environment. Infosys expects revenues to be $7.343 billion in FY13. Though Cognizant is not listed in India, 75 per cent of its over 1.45 lakh employees are based in India and is often referred to as an Indian entity.

Posted on: 7 August 2012 | 11:31 pm

Hexaware Technologies - Good show continues - Edelweiss

Hexaware Technologies - Good show continues - Edelweiss The Q2CY12 results of Hexaware Technologies (Hexaware) were in line with estimates as revenues stood at USD91.2mn, up 3.6% QoQ (4.2% volume growth) vs our and Street estimate of USD92mn. EBITDA margin expanded 50bps to 22.9%, ahead of our estimate of 22.5%. The company seems to be reaping benefits of investments made over the past two years as the decent guidance for Q3CY12 (1.4%-3.0%) in an uncertain environment bears testimony to the same. We believe its continuous investments in strengthening front-end sales team and focus on improvement in operational parameters would drive growth from hereon. Maintain 'BUY' with target price of INR140. Inline quarter on revenue, margin front Hexaware's Q2CY12 revenues at USD91.2mn were marginally lower than our and Street estimate of USD92mn. The sequential growth of 3.6% (4.4% in CC) was driven by a volume growth of 4.2%. The beat on PAT (INR890mn versus estimate of INR834mn) was due to lower forex losses. It has won a large deal of USD100mn spread over four years; revenues from this deal are expected to accrue from early CY13. Further, it is actively chasing four more large deals. Growth to be driven by investments, operational focus The company has reiterated that it will continue to make investments, particularly in new technology areas in order to drive growth. Further, Hexaware plans to continue to invest in S&M for gaining higher wallet share within clients, particularly beyond its top 20 clients (thus strengthened sales team by 11 in H1CY12). We believe this, coupled with its continued focus on improving operational parameters, will enable it to drive growth and maintain operating margin. Outlook and valuations: Momentum continues; maintain 'BUY' While the Q2CY12 results were in line with estimates but lacked any positive surprise, we believe the momentum remains intact for the company, led by a strong order book build up, besides its continuous investments in the front-end. We forecast 20% USD revenue growth with EBITDA margin of 21%. Higher tax rate of 22% (20% earlier) leads to 4% cut in our CY13 EPS to INR12.7. We maintain 'BUY /SO' with TP of INR140 (11x CY13E earnings).

Posted on: 7 August 2012 | 3:31 am

Mid-tier IT cos like Hexaware, Zensar outperform biggies Infosys, TCS, Wipro in last 5 quarters

MUMBAI: India's mid-tier information technology firms have reported better sales and operating profit growth compared to the biggies in the business at the aggregate level in each of the past five quarters, riding on their intrinsic strengths of operating in niche segments and strong demand in select verticals and bucking the trend of smaller companies taking a beating during a downturn. At a time when industry leaders such as Infosys and Wipro have provided a sluggish future growth guidance, a clutch of mid-tier IT companies sound far more confident about growth in the next few quarters of FY13. Both analysts and industry officials reckon that this trend is likely to be maintained for at least the next couple of years, which could lead to an improved valuation of these companies. An ETIG analysis of 17 tier-2 IT firms, which announced their financials for the quarter to June 2012, shows a growth of 38.4 per cent in revenue and an impressive rise of 78 per cent in net profit at the aggregate level from a year ago. For the top four IT companies - TCS, Infosys, Wipro and HCL Technologies - sales rose 33.5 per cent, while profit grew 43.4 per cent. Besides, half of the companies among the 14 tier-2 players that reported double-digit topline growth surpassed revenue growth reported by each of the top four firms, the analysis shows. Mid-tier companies such as Geometric, KPIT Cummins, Hexaware Technologies, Mastek, NIIT Technologiesand Zensar Technologies reported a strong performance for the June 2012 quarter. In contrast, top tier players such as Infosys and Wipro reported deceleration in sales and profit growth. Though their relatively smaller scale of operations has indeed helped, the changing trend in vendor allocation by global clients, a favourable currency movement, and strong demand in select verticals, which are niche areas for medium and small IT vendors helped them record a stellar performance. Industry officials also say that long-term management stability in these firms has been critical to their success. "The large players that are not doing well have seen management churn. If you look at mid-size companies that are doing well, they have all had consistent management," says Pradeep Udhas, who is partner and head of IT-BPO consulting firm KPMG. According to him, a stable leadership has helped the smaller companies to specialise and compete with large companies. What counts in the final analysis, he says, are leadership and the ability to be agile. Select tier-two or mid-rung companies were also able to expand their operating margins against the backdrop of tight IT budget spending. "Compared with top-tier companies, small and medium firms have more levers to improve performance - be it tweaking of employee matrix to include more freshers or reduction in selling and administrative costs," says Angel Broking's IT analyst Ankita Somani. She draws attention to the fact that historically, smaller IT companies had just over 10 per cent freshers in the employee pyramid compared to over 30 per cent for the top IT companies. A higher proportion of employees with less than three years of experience helps in bringing down operating costs. The robust show of these companies has not gone unnoticed by the big daddies in the industry. Rajeev Gupta, president of Fujitsu Consulting India (FCI), the Indian arm of global IT solutions firm Fujitsu says that the smaller firms are more agile when it comes to projects worth less than $10 million. "The robust show of tier-2 firms is not only because of a depreciating home currency, it is also about the way clients have started allocating a chunk of their projects to smaller companies." Global clients are now more than willing to open their doors to second-rung Indian IT companies that are more than willing to take up smaller assignments. "The large IT firms don't go after $5-10 million deals, which we are quite happy to accept," says Zensar Technologies' Ganesh Natarajan. Deals worth $50-100 million are fewer as companies are cutting back on spending or postponing investments, he says. Their upbeat performance has also helped such companies control employee attrition rates. Most mid-tier firms, which announced results for the quarter to June, showed lower attrition rates. Hexaware, headquartered in Mumbai, reported 9.6 per cent rate of attrition, the lowest compared with 12-16 per cent reported by the top four IT firms. "We declared a salary increase of 10.5 per cent this year, but it is not only about money. Employees are excited about the kind of projects we are handling," says Hexaware's chairman Atul Nishar.

Posted on: 7 August 2012 | 3:28 am

Hexaware bets on UK, new verticals to lead mid-tier IT growth

. After nine quarters of positive growth, the mid-tier leader is confident of a 20% year-on-year (yoy) growth in dollar revenues for fiscal 2013.

Posted on: 7 August 2012 | 2:51 am

Hexaware Q2 net rises 48% on higher revenues

Software service provider hexaware technologies has reported a 48 per cent increase in net profit at Rs 89.03 crore for the second-quarter ended june 2012 against the same period last year. Click here to read more…

Posted on: 7 August 2012 | 2:45 am

Alert For Clients Service For Mansukh Securities

Introduction Mansukh Securities has brought Alert for Clients Service for its customers to remain informed and connected with the stock market while on move. Jaamoon Alc Features: 1. Conditional Alerts - This feature allows users to set alerts based on price trends. 2. Periodic Alerts - This feature allows users to set time-based alerts. 3. Market Open and Market Close Alerts - This feature allows users to set alerts based on Market Open and Market Close conditions. Steps To Register And Use Alc Platform a.    Click http://www.moneysukh.com. b.    Click c.    Click on New user click here and register yourself by entering your mobile number, first name and last name. d.    SMS having your username and system generated password will be sent to your registered mobile number. e.    Using the login details you can now enter username and password and click Signin. f.    Once you login into the application for the first time, you will be asked to change your password. It is recommended to change the password although you may ignore the warning by clicking Ignore. g.    You can then click “Create alert” link to create your own alerts h.    You can also view the alerts you have created using “View alerts” link

Posted on: 21 July 2011 | 4:32 am

The Indian Gold Market Still Glitters

The Indian Gold market has reaffirmed its dominance in 2010 and will continue in 2011. Expect China to overtake the sub-continent in demand for gold. The love of gold in India goes far beyond a simple source of future profits. It is an expression of wealth, financial security and family stability. It also carries religious overtones. Gold remains the wealth of the wife -men only inheriting assets. It represents her and her family's financial security. It is difficult to make a distinction between investment and jewelry demand because in India, these two ideas are inseparable. Gold jewelry is usually 24-carat. Indian Gold Demand18,000 tonnes of gold in India are held by households. Indian gold demand has grown 25% despite a 400% Rupee price rise in the last decade. Gold demand is strong and is expected to increase 30% by 2020. By 2020, cumulative annual demand for gold in India will increase to in excess of 1,200 tonnes or approximately Rs. 2.5 trillion, at current price levels. India's rapid growth, which will have significant impact on income and savings, will lead to more gold being purchased by almost 3% per annum over the next decade. Indian growth is expected to be around 10% GDP in the next decade, which will feed through into gold demand/savings. India is now experiencing the rapid growth of the Middle class and urbanization. This movement has quickened its pace in the last ten years to the extent that the U.N. believes that 41% of India's total population will be living in towns and cities by 2030--up from the current level of 30%. More importantly, a good proportion of these will join the middle classes. Gold Price PerformanceConsider the belief that 'gold brings good fortune'. The performance of gold over the last decade appears to have highlighted that belief in a remarkable way. In 2000, the gold price was just under $300. It now stands at $1,525. Imagine you are the mother of the bride and look at your gold holdings and at today's value. Wouldn't you feel this had served your family well and must surely serve your daughters family as well? This belief will continue for generations to come and Indian demand will continue growing. Tracking equity markets and the path of other investments alongside gold over the same period confirmed the wisdom of gold investing.Indian gold investors are far more advanced than their developed world counterparts who have not yet appreciated gold's value to the same extent. Conclusion:Because gold is more than just money, its price is irrelevant in light of its demand. This demand is limited by an individual's access to money to purchase it. Indian demand for gold will be driven (like in the last decade) by savings and real income levels, not by price. In local currency terms, Indian jewelry demand more than doubled in 2010 to Rs.1,342 billion compared to Rs. 669 billion in 2009. Likewise, gold will continue to be purchased in the future Indian wedding seasons. It is all part of the social fabric of India. A wedding is the social highlight of the nation and can last for days. 50% of the population is under 25, and there will be 15 million weddings per annum over the next decade. At present gold prices and exchange rates, this will drive around 500 tonnes per annum with a further 500 tonnes of existing gold being gifted by one family to the next, which is not recorded in recycling. “Always live within your income, even if you have to borrow money to do so”

Posted on: 20 July 2011 | 4:13 am

Options Strategies To Know

It is too common for traders who jump into the options game with little or no understanding of how many options strategies are available which can minimize their risk and maximize return. With a little bit of extra effort, however, traders can learn how to take advantage of the flexibility and full power of options as a trading vehicle. While keeping this in the mind, we have tried to gather most useful & popular option strategies which we hope will shorten the learning curve and point you in the right direction.  There are some option strategies which might be useful for traders to hedge their positions and minimize the risk. In this addition of our market tutorial we will discuss only the type and brief description of some option strategies however in further additions we will discuss in detail. Covered Call Apart from purchasing a naked call option, you can also engage in a basic covered call or buy-write strategy. In this strategy, you would purchase the assets outright, and simultaneously sell a call option on those  same  assets.  Your  volume  of assets  owned  should  be equivalent to the number of assets underlying the call option.Investors will often use this position when they have a short-term position and a neutral opinion on the assets, and are looking to generate additional profits, or protect against a potential decline in the underlying asset's value. Married Put In a married put strategy, an investor who purchases a particular shares, simultaneously purchases a put option for an equivalent number of shares. Investors will use this strategy when they are bullish on the asset's price and wish to protect themselves against potential short-term losses. This strategy essentially functions like an insurance policy, and establishes a floor should the asset's price plunge dramatically. Bull Call Spread In a bull call spread strategy, an investor will simultaneously buy call options at a specific strike price and sell the same number of calls at a higher strike price. Both call options will have the same expiration month and underlying asset. This type of vertical spread strategy is often used when an investor is bullish and expects a moderate rise in the price of the underlying asset. Bear Put Spread The bear put spread strategy is another form of vertical spread. In this strategy, the investor will simultaneously purchase put options as a specific strike price and sell the same number of puts at a lower strike price. Both options would be for the same underlying asset and have the same expiration date. This method is used when the trader is bearish and expects the underlying asset's price to decline. It offers both limited gains and limited losses. Long Straddle A long straddle options strategy is when an investor purchases both a call and put option with the same strike price, underlying asset and expiration date simultaneously. An investor will often use this strategy when he or she believes the price of the underlying asset will move significantly, but is unsure of which direction the move will take. This strategy allows the investor to maintain unlimited gains, while the loss is limited to the cost of both options contracts. Long Strangle In a long strangle options strategy, the investor purchases a call and put option with the same maturity and underlying asset, but with different strike prices. The put strike price will typically be below the strike price of the call option, and both options will be out of the money. An investor who uses this strategy believes the underlying asset's price will experience a large movement, but is unsure of which direction the move will take. Losses are limited to the costs of both options Butterfly Spread All the strategies up to this point have required a combination of two different  positions  or contracts.  In a butterfly  spread options strategy, an investor will combine both a bull spread strategy and a bear spread strategy, and use three different strike prices. Iron Butterfly The final options strategy we will demonstrate here is the iron butterfly. In this strategy, an investor will combine either a long or short straddle with the simultaneous purchase or sale of a strangle. Although similar to a butterfly spread, this strategy differs because it uses both calls and puts, as opposed to one or the other. Profit and loss are both limited within a specific range, depending on the strike prices of the options used. Investors will often use out-of-the-money options in an effort to cut costs while limiting risk. “There are three ways to obtain wealth: inheritance, luck, and hard work. None is guaranteed, but you have no influence over the first two”

Posted on: 18 July 2011 | 3:44 am

Fundamental Pick

Andhra Bank                                                                                                  Target Price: 164 Andhra Bank, registered in Nov 20, 1923 is one of the oldest public sector banks of India. As of 31 March 2011 with the total business of Rs1636 billion and total number of 1657 branches Andhra Bank offers almost all basic banking services with some extra and attractive benefits to the customers. Bank also has partnered with various designated private financial institutions for assisting them in sales of their Mutual Fund products. Andhra Bank is the first bank in India to have launched mobile biometric ATMs which enables even the illiterate or uneducated customers of the bank to enjoy the ATM facility being offered by the bank. FINANCIALS:  The interest income of Andhra Bank has been grown at CAGR of 29.5% during FY05-FY11, the growth has also been maintained in Net Interest Income (NII) and Profit after Tax, both grew by 26% and 19.5% respectively during the same period. In FY11 the Interest Income grew 30% to Rs 8291 crore, NII 47% to Rs 3221 crore and PAT 21% to Rs 1267 crore. The NIM for the same period marginally up by 59bps to 3.21% while PAT margin declined by 113bps. In Q4FY11 the interest income and PAT both surged by 38% and 30% respectively from Q4FY10 while owing to interest margin pressure NII slightly down by 4.4% for the same period. INVESTMENT GROUNDS  Industry Outline The key growth driver of banking industry, credit growth has shown a decent growth in the past years. The credit portfolio is further expected to grow at CAGR of 16% from Rs 34.9 lakh crore in 2010 to Rs 164.1 lakh crore by 2020. The Govt is also trying to expand the banking sector to the rural sector of India, currently there are around 6 lakhs un-banked villages and only 38% of all bank branches are in rural areas. Although efforts have been made to expand the branch network from 8,700 at the time of nationalisation in 1969 to 87,000 now, only 32,000 branches are present in rural India. Banks are also experimenting with various incentives for furthering financial inclusion but have not been able to make a significant impact, given the magnitude of the problem and difficulties in reaching the excluded population but still there is lot of scope for banks to do so many things to expand their business especially in rural market. Currently banking sector in India also well capitalized with both core capital adequacy and leverage ratios at comfortable level. However right now in the near term on account of tight monetary policy the banks are facing margin pressure due to numerous rate hikes and the trend may continue for another one more quarter, Actually RBI is trying to control the inflation which is hovering above the comfort level, in the last 15 months RBI has increase the key policy rates 10 times and further may continue to ease from the inflation. Capital Infused by Govt of India to improve CAR As a part of recapitalization plan by Govt of India, Andhra bank has also got the capital infusion of Rs 1173 crore in Q4FY11. This effusion has improved the Capital Adequacy Ratio Basel II at 14.38% from 13.93% in Q4FY10. This infusion has been done by the Govt at Rs 157 per share and increased the govt's stake at 58% in Q4FY11. Addition of Branches will generate new business Andhra Bank is ready to expand its branches especially in one of most populated state of India Uttar Pradesh (UP). In UP by this year bank plans to double its branches from existing 24 to 48, bank will also increase the business to Rs 2,500 crore from existing Rs 1,225 crore. Strong Business Growth in the last five years The business of the Andhra Bank has been grown at CAGR of 20% is last five years (FY08-FY11). As on 31st March 2011 the total deposits of the bank grew by 22% to Rs 921.56 bn while the Advance for the same period grew at 26% to Rs 714.35 bn. The Credit over every deposit ratio of the bank also stood at 77.5% for the FY11. Strengthening its Agriculture financing in North region also After expanding its presence in southern states Andhra Bank is now looking to expand its business in northern states also. Bank is expert is financing agricultural infrastructure projects and therefore ready to in UP also it is ready to carve a niche in lending to rice mills, sugar mills, cold storage and ware-housing projects. “To get profit without risk, experience without danger, and reward without work is as impossible as it is to live without being born”

Posted on: 15 July 2011 | 2:21 am

Quantitative Analysis

Rajesh Exports Ltd has announced the following results for the quarter & year ended March 31, 2011: The Unaudited results for the Quarter ended March 31, 2011 The Company has posted a net profit of Rs 506.95 million for the quarter ended March 31, 2011 as compared to Rs 985.57 million for the quarter ended March 31, 2010. Total Income has increased from Rs 63017.83 million for the quarter ended March 31, 2010 to Rs 63649.26 million for the quarter ended March 31, 2011. The Audited results for the Year ended March 31, 2011 The Company has posted a net profit of Rs2479.58 million for the year ended March 31, 2011 as compared to Rs 1934.11 million for the year ended March 31,2010. Total Income has increased from Rs 185294.48 million for the year ended March 31, 2010 to Rs 208643.81 million for the year ended March 31, 2011. Leading gold jewellery- maker and exporter -- Rajesh Exports-- has earmarked its ambitious plan of retail expansion across India. The company has set aside Rs 6,500 crore to set up a 550-store network pan-India over the next three years. On technical perspective, after taking significant correction from the highs of Rs 140, scrip has shown crucial resistance below Rs 80 level and we might see some buying opportunities in the near term. Nevertheless its technical indicators i.e. RSI and MACD also revealed some technical pull back in near term. Shree Renuka Sugars is looking to commence its 1 million metric tonne (mmt) plant at Gujrat in middle of this year, company officials quoted. With the commencement of this plant, the company's total capacity will increase to 9,000 tonne a day. The plant will supply sugar to sugar- deficit countries around India and meet local demand during years of shortage.  Shree Renuka Sugars has reported results for the second quarter March 31, 2011. The company's net profit for the second quarter has decline by 85.09% at Rs 29.20 crore as compared to Rs 195.90 crore for the quarter ended March 31, 2010. Its total income has decreased by 22.91% at Rs1234.70 crore for the quarter under review from Rs 1601.70 crore in the corresponding previous quarter. On consolidated basis, the group's net profit after minority interest for second quarter has plummeted 73.51% at Rs 59.40 crore as compared to Rs 224.20 crore for the quarter ended March 31, 2010. Total income for the quarter has increased by 6.84% at Rs 1930.50 crore as compared to Rs 1806.90 crore for the corresponding previous quarter. . On technical viewpoint, stock has shown upward bias after having double bottom formation around Rs 55. In close proximity we believe stock is well poised to move in upward direction. Moreover it's RSI and other technical indicators stands in the positive territory where possibility of turnaround couldn't be rule out. Hence investors are advised to BUY this stock for a price target of Rs 75-80 in near term. “As a bull market continues, almost anything you buy goes up. It makes you feel that investing in stocks is a very easy and safe and that you're a financial genius”

Posted on: 14 July 2011 | 1:49 am

Food Inflation Drops To 7.78% For Week Ended June 18 2011

Food inflation was in double digits for the most of last year,before showing signs of moderation since March this year. However, it has again started going up since the second half of May. While January-March  economic growth stood at 7.8%, the lowest in five quarters, industrial output also slowed down to 6.3% in April. According to the data released by the Ministry of Commerce and Industry on June 30, food price index declined to 7.78% on annual basis during week ended June 18, from an annual rise of 9.13% recorded in the last week. However, the index for 'Food Articles' group, which has a weight of 14.34%, declined by 0.8 % to 189.8 (Provisional)  from 191.3 (Provisional)  for the last week due to lower prices of poultry chicken (4%), masur (3%), tea, condiments & spices and jowar (2% each) and arhar, mutton and fish-inland (1% each).  But, the prices of egg, gram, urad, ragi and fish-marine  (2% each) and wheat and barley (1% each) moved up.  The annual rate of inflation, calculated on point to point basis, stood at 11.84 percent (Provisional) for the week ended June 18 as compared to 12.62 percent (Provisional) for the previous week. The index for primary articles group which has the highest weightage of 20.12% in WPI cooled to 11.84 percent for the week from 12.62 for the previous week.The index for 'Non-Food Articles' group eased to 17.91 percent from 18.43 percent for the previous week due to lower prices of flowers  and  raw  cotton  (3%  each),  cotton  seed  (2%)  and  raw  jute,soyabean  and raw silk (1% each). The index for Fuel & Power group which carries a weightage of 14.91%, rose to 12.98 percent for the week against  12.84  recorded  in the previous  week  due  to higher  prices  of aviation turbine fuel (3%), naphtha (2%) and furnace oil (1%).   On the other side Bank credit grew by around 20.9% to Rs 41 lakh crore and deposits increased by 17.7% to Rs 54.94 lakh crore, in the 12 month period ended June 17, 2011, the increased bank credit indicates the increase in the industrial activities. Bankers, however, say that there is an absence of demand for new projects and adequate liquidity is preventing them from raising interest rates despite the Reserve Bank of India's measures. As per the data released by the Reserve Bank of India, credit off-take during the period stood at Rs 41.23 lakh crore against Rs 34.10 lakh crore in the same period  of  the  previous  year.  Simultaneously,   outstanding   deposits reached to a record Rs 54.94 lakh crore, an increase of 17.7% from Rs 46.64 lakh crore in the corresponding period last year. Meanwhile expressing concern over the fragile global economic environment,  Prime Minister Manmohan Singh said, it was possible to raise economic growth rate to 9-10% annually on the back of improved physical  and social  infrastructure.  While  interacting  with  a group  of editors, he said, "We are committed to a growth rate of 9 to 10 percent per annum. Our savings rate is about 34 to 35 percent of our GDP...with an investment rate of 36 to 37 percent (and) capital output ratio of 4:1, we can manage to have a growth rate of 9 percent". The Prime Minister (PM), however, said raising economic growth rate to double digits would require strong commitment to improving infrastructure  and upgrading  education  and healthcare  facilities.  His assertion comes in the wake of the RBI lowering the economic growth projection to 8% for the current fiscal as against 8.5% achieved in 2010-11. Also The Free Trade Agreement (FTA) between India and Malaysia will come into effect from July 01 2011. This FTA will provide access to Indian professional  like accountants,  engineers  and doctors to the key South- East Asian nation. As per the official statement released by Ministry of commerce and industry on June 30, 'the Comprehensive Economic Cooperation   Agreement   (CECA)  envisage  liberalization   of  trade  in goods, trade in services, investments and other areas of economic cooperation.' This is the fourth FTA with key Asian country, before this India  has  also  entered   into  similar   agreement   with  South  Korea, Singapore and Japan, while FTA with Japan will come into effect from August. “Academic qualifications are important and so is financial education. They're both important and schools are forgetting one of them”

Posted on: 12 July 2011 | 1:11 am

S&P To Deeply Cut Us Ratings If Debt Payment Missed

Fears of a technical default have been rising after budget negotiations between Democrats and Republicans fell apart in Washington earlier this week. Even a brief default by the United States would immediately increase the country's borrowing costs, weighing on the fragile economic recovery and eroding the dollar's status as a reserve currency. On Aug. 4, the Treasury Department is due to pay off $30 billion in maturing short-term debt. With the debt talks stalled, new ideas are surfacing such as prioritizing debt payments. But Treasury Secretary Timothy Geithner warned lawmakers on Wednesday that such a move would still cause investors to shun U.S. Treasury securities. United States now borrows roughly 40 cents of every dollar it spends; prioritizing payments with no debt limit increase would require cutting 40 percent of all government expenditures. S&P is not the first agency to say it will downgrade the United States if a payment is missed. Rival credit rater Moody's on June 2 was the first to say it would downgrade the United States shortly after a possible ceiling-related default, but not as deeply -- to the Aa range. US MARKETS:  The US markets closed higher for the fourth straight day on Thursday (30.06.2011), all the major indices were up by over a percent after Greece cleared the final hurdle needed to receive its next installment of emergency loans. Greek lawmakers passed a cost-cutting bill that had to be approved before international lenders would release $17 billion in rescue funds to Greece. The investors' morale was also boosted by a report of pickup in manufacturing around Chicago. A Chicago-area manufacturing gauge unexpectedly accelerated in June, according to data released Thursday, the Chicago business barometer, which also is called the Chicago PMI, rose to a 61.1% reading from a 56.6% level in May to break a three-month losing run. The Dow Jones Industrial Average surged by 152.92 points, or 1.25 percent, to 12,414.34. The S&P 500 added 13.23 points, or 1.01 percent, to 1,320.64 and the Nasdaq composite gained 33.03 points, or 1.21 percent, to 2,773.52. Crude prices moved higher on Thursday, extending their rally for a second day on expectations Greece's debt crisis would be resolved. Though, the prices were down by 7 percent for the month and 10 percent for the quarter. A weak dollar, Greece's passage of an austerity plan and supportive Chicago manufacturing data collectively lent support to crude prices. Benchmark crude for August delivery ended up 65 cents, or 0.69 percent, at $95.42 a barrel, after trading in a range from $93.88 to $95.82 on the New York Mercantile Exchange. In London, August Brent crude rose 8 cents, or 0.1%, to $112.48 a barrel on the ICE. Bank of America Corp. reached an $8.5 billion settlement with investors over claims it sold them bad loans. The investors said Bank of America violated agreements with them by selling them low-quality mortgage-backed securities that lost value when the housing market collapsed.Meanwhile Asian equities carried forward the gaining momentum this Thursday as investors continued to show buying interests on being encouraged by the headway seen in Greece which inched closer towards adopting the crucial but harsh package of austerity measures to avoid a default. The overnight Wall Street too exhibited optimistic trends thereby supporting the regional sentiments. The benchmarks in China and Hong Kong gained a lot of traction in the morning trades amassing around one and half a percent points as funds contnued to chase out performers to make portfolios look healthier. The Japanese stocks advanced led by utilities companies which rose on expectations of more nuclear reactor restarts. “A tragic irony of life is that we so often achieve success or financial independence after the chief reason for which we sought it has passed away”

Posted on: 6 July 2011 | 6:27 am

Monthly Magazine Report - From the desk of Research - By Mansukh

The  June  series  Futures  and  Options  contract  settlement turned out to be an encouraging event for the Indian markets as bulls showed strong buying interests in majority of the blue chip stocks. Hefty short covering in the dying hours ahead of the series expiry further stoked the benchmarks to settle around the high point of the day. The resilient markets seldom shown any signs of capitulation in last six sessions, as they vivaciously rallied over 1,250 (Sensex) and 350 (Nifty) points during the period. Sentiments mained upbeat across the lobe as investors ontinued to capitalize on he positive momentum om the previous session fter the Greek government uccessfully voted in favor fstringent austerity easures. A second vote for he implementation of the measures is   expected in Greece later in the day. Majority of the Asian equity indices settled in the green zone with smart gains while the European counterparts too  exhibited  mixed  trends  ahead  of  a  second  vote  for  the implementation of the measures scheduled later in the day. In the meantime domestic sentiments also got buoyed by encouraging food inflation numbers which drifted sharply to one and a half month low levels, a week after convalescing over 9% levels. The moderation in inflation numbers came a day after Prime Minister Manmohan Singh said that inflation will come down to 6.5% by March-end if international oil prices soften and commodity prices do not rise further. The numbers indicate that RBI, which has hiked its key interest rate by 2.75% points since March 2010, may not resort to rate resort to further hikes and soften its hawkish stance against inflation. However, Indian fuel price inflation accelerated to an eight-week high in mid-June and the government's recent move to hike dieseland other fuel prices is expected to put upward pressure on prices in coming weeks and push headline inflation towards double digits. Local sentiments also remained optimistic as FIIs have turned net buyers since Thursday, indicating that interest of foreign funds are not fading any time soon. Back on Dalal Street, the benchmark began the expiry session on an optimistic note and oscillated above the neutral line in a narrow range through most part of the session, lacking any kind of volatility which is typically evident on F&O settlement days. After registering losses in the two previous F&O series, the June series F&O showed a swashbuckling performance adding  over  four  percent  from  the  last  series.  The  NSE's  50-share  broadly  followed index Nifty, settled close to a percent gains just below the crucial  5,650 support level while Bombay Stock Exchange's Sensitive Index, Sensex amassed over one hundred and fifty points to close below the failed to mirror the performance showcased by their larger peers and important psychological 18,850 level. However, the broader markets negotiated only moderate gains. The midcap index added 0.32% points while the smallcap index rose 0.57% point. On the sectoral front, it was the defensive - FMCG pocket which once again outperformed not only its sectoral peers but also the benchmarks and surged by close to 2%.For the upcoming series 5760-5770 could be the crucial resistance zone where we believe spot index may find some consolidation. Any closing above this level may boost the traders sentiment however 5900-5930 may be the next resistance zone. On the flip side 5500-5530 may provide some important cushions on downside. HAPPY TRADING…….

Posted on: 4 July 2011 | 4:56 am

Equity Technical Analysis By Mansukh June, 2011

United  Spirits LTD Equity Analysis United Spirits (USL) is the largest spirits company in India and a flagship entity of $2 billion UB group. It manufactures wide range of whisky, vodka, rum and other spirits. United Spirits is among the top three spirits companies in the world. It has a presence in over 59 countries. USL's technical centre is located in Bangalore, which develops new products, conducts research and development, flavor testing and quality management. It has 62 manufacturing units. The company has received recognition for its quality products from independent jury such as International Wine & Spirits Competition (UK), International Spirits Challenge (UK), World Beverage Competition (US), Monde Quality Institute (Belgium) and Mundusvini (Germany). India's changing demography presents a significant opportunity for United Spirits to tap especially in the prestige segment. The company currently operates at 53 percent share-points in the segment. McDowell's No. 1 Platinum was launched in March 2010, is available in packs of 750 ml, 375 ml and 180 ml and is a part of Rs 8,300 crore McDowell's franchise. On technical perspective, stock currently shows significant correction from the highs of Rs 1688 however we believe it's a temporary one and we might see some buying opportunities in the near term. Nevertheless its technical indicators i.e. RSI and MACD also revealed some technical pull back in near term. LUPIN LTD Lupin is a transnational company engaged in development of APIs, generic and branded formulations. It is the largest manufacturer of Tuberculosis drugs in the world. It has onshore and offshore presence of its products in 70 countries. Its manufacturing unit is located in Goa, Tarapur, Ankleshwar, Jammu, Mandideep, Indore, Aurangabad and Kyowa in Japan. The manufacturing facilities of the company are approved by various international regulatory agencies like US FDA, UK MHRA, TGA Australia, WHO, and MCC South Africa. We expect Lupin to start API supply to Salix after a couple of years (~ in FY2013). The scale up in the deal clearly outlines the high probability of success for the drug to commercialise. Further, an approval for new indications would lead to higher API supplies and royalties in future. At the current market price of Rs440, the stock trades at 18.3x FY2012E fully diluted earnings and at 15.8x FY2013E fully diluted earnings. We maintain our Buy recommendation on the stock with a price target of Rs480. On technical viewpoint, stock has shown upward bias after having consolidation around Rs 420. In close proximity we believe stock is well poised to move in upward direction. Moreover it's RSI and other technical indicators stands in the positive territory where possibility of turnaround couldn't be rule out. Hence investors are advised to BUY this stock for a price target of Rs 470-480 in near term.

Posted on: 10 June 2011 | 6:01 am

IMF Supporting Additional Fiscal Tapering To Stay Away From Over Heating

Emerging Asia is all set to continue leading global economic growth over the next couple of years but risks are increasing, particularly from a very high inflation and surging commodity prices amidst political unrest in some of the Middle East countries, said the International Monetary Fund (IMF) on Thursday.   Asian growth will continue to be driven by economic powerhouses China and India. The IMF expects the Chinese economy to grow 9.5% while India will expand about 8% over the next two years. However,  the multilateral  body also cautioned against pockets of overheating across the region as inflation increases rapidly and capacities face increasing pressure. Higher global oil and food prices were further adding fuel to the problem. 'Real policy rates are still negative in several regional economies, including China and India,' observed the IMF in its report titled 'Asia and Pacific: Managing the next phase of growth'. The agency added that even if signs of overheating are mixed, keeping real interest rates too low for too long could contribute to financial instability. As such, key Asian central banks, including the Reserve Bank of India (RBI) should look at more aggressive monetary tightening to ensure economy remained stable.  Inflation in India continues to remain higher despite the RBI hiking its key policy rates eight times in the last financial year. Headline inflation accelerated in last couple of months to 9% as the core inflation (price rise in non-food manufacturing space) too accelerated. This has put the central bank into a tight corner. Clearly, somehow the policy makers have missed the underlying momentum of inflation. The central bank has to think again now if it wanted to continue with a calibrated policy of hiking rates by 25 bps at a time or if it was time for more aggressive policy tightening. Most economists now expect inflation to remain at elevated levels in the current financial year as well as rising costs have not been fully passed on to consumers. For instance, even as the crude prices are ruling at around $120 a barrel, India's retail fuel prices continue to be aligned to crude prices of around $75 a barrel. However, the risk that RBI would face in the more aggressive tightening scenario is that growth is already showing some signs of moderation and rapid rate hikes from here on will risk a far greater slowdown than what might be needed to avoid overheating.  This is particularly  so because  in case of India the lag in monetary transmission is quite longer, running into a few quarters, and therefore the central bank would also have to work out how far the already implemented tightening has transmitted into the system. Bond yields were trading range bound with positive bias since most of the traders preferred to stay on the sidelines ahead of the central bank's annual policy review on Tuesday. The market has priced in at least a 25 basis points increase at the central bank's policy review early next week, but there is a possibility the rise could be 50 bps. Further, dealers were also eying the results of Rs 6000 crore of cash management bills later on Friday. The  yields  on  newly  issued  10-year  benchmark,  the  7.80%-2021  was higher at 8.13% from its previous close of 8.11%, ahead of policy decisions on Tuesday. The benchmark five-year interest rate swaps was up 1 basis point at 8.27% from its previous close of 8.26%.  The Reserve Bank of India has today announced the auction of 77-day Government of India Cash Management Bills for a notified amount of Rs. 6,000 crore. The auction will  be  conducted  on  April  29,  2011  using  'Multiple  Price  Auction' method.   While on the other hand The partially convertible rupee was currently  trading  at 44.39/40,  stronger  compared  with its Thursday's close of 44.43/44. The rupee opened at 44.42/43 and has touched a high and a low of 44.46/47 and 44.39/40 respectively. The index of the dollar against six major currencies was down 0.04 percent at 73.089 points. The May currency future was trading at 44.63/64 with a spread of 0.0025 and a volume of 600,124. The contract opened weaker at 44.78/79 against its previos closing of 44.66/67. The open interest (OI) stood at 892,337 up by 4.41% compared to its previous close of 854,615.

Posted on: 8 June 2011 | 5:50 am

Global Economy- China Will Outshine The U.S. In Next 10-12 Years

For the first time, the international organization has set a date for the evolution when the “Age of America” will finish and the U.S. economy will be leaving behind by that of China. According to the latest IMF official forecasts, China's economy will outshine that of America in real terms up to 2016-2017 — just five to six years from now. And it's a lot closer than you may think. It endow with a painful context for the budget wrangling taking place in Washington right now. It hoists massive questions about what the international security system is going to give the impression of being like in just a handful of years. And it casts a deepening blur over both the U.S. dollar and the gigantic Treasury market, which have been buttress up for decades by their privileged status as the liabilities of the world's hegemonic power. In addition to comparing the two countries based on exchange rates, the IMF analysis also looked to the true, real-terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies.  Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America's share of the world output down to 17.7%, the lowest in modern times. China's would reach 18%, and rising. Just 10 years ago, the U.S. economy was three times the size of China's. Naturally, all forecasts are fallible. Time and chance happen to them all. The actual date when China surpasses the U.S. might come even earlier than the IMF predicts, or somewhat later. If the great Chinese juggernaut blows a tire, as a growing number fear it might, it could even delay things by several years. But the outcome is scarcely in doubt. FED CUTS ECONOMY OUTLOOK: The Federal Reserve Chairman Ben S. Bernanke stated on Wednesday that the US economy still requires monetary support and the Fed will end its $600 billion bond-buying program through June, indicating that the central bank is in no rush to scale back its support for the US economy and will keep its benchmark interest rate near zero for an 'extended period'. At the first post-policy meeting press conference in the Fed's 97-year history, Bernanke tried to demonstrate the central bank as a dependable custodian of the US recovery as the bank begins to retreat from emergency measures. But  amid  relatively  higher  unemployment  rate,  a  declining housing market and tepid growth, Wednesday's move was far from a full-blown move back from pre-crisis policies. The Fed shielded  its  ultra-accommodative  policy  by  highlighting  that although the labor market is healing, the housing sector remains depressed and the recent surge in energy prices will likely prove transitory. As far as unemployment rate is concerned, it expected to be in a range of 8.4%-8.7% for the calendar year which is upgraded from the 8.8%-9.0% range forecast in January. The Fed also went ahead to not only lowering its economy outlook for 2011 due to sluggish first quarter growth on the back of adverse inflationary implications of soaring energy costs but the central bank also raised its forecast for inflation.  The central bank has cut GDP expansion forecasts to 3.1%-3.3% from the previous outlook of 3.4%-3.9% for the year 2011 and the annual inflation is expected to swell by 2.1%-2.8% compared to January's expected range of 1.3%-1.7%. “Every morning I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work” Read more: Global Economy

Posted on: 6 June 2011 | 5:24 am

FROM THE DESK OF RESEARCH- BY Mansukh June, 2011

Indian equity indices went through a turbulent week as they failed to negotiate a close above the neutral line for even a single session and eventually snapped the week with a cut of over two percent. The  week  largely  remained  characterized  by  choppiness  because investors were reluctant to pile up positions and indulged largely in stock specific activities as corporate India continued to divulge their fourth quarterly report card. Volatility gradually accelerated session after session as the April series Futures and Options settlement neared while  quarterly  earnings'announcements by RIL, Wipro, Bank of Baroda, Ambuja Cement, Crompton Greaves, TVS Motors were punished badly as they remained below Street's expectations. On one hand spiraling international crude oil prices become the headache of policymakers while on the other, worries over global economic recovery loomed large, given the fact that world's biggest economy continues to grow at a tepid pace.   The April series F&O settlement day turned out to be another pathetic trading session for the Indian  stock  markets  as  the  selling  pressure  gathered  greater momentum after government released the disappointing food inflation numbers which stayed absolutely flat at 8.76% on annual basis during week-ended April 16 compared with 8.74% recorded in the previous week. Rate sensitive counters like Real Estate and Bankex witnessed relentless selling pressure througsession for theh the week ahead of the RBI's annual monetary policy review meet on May 3rd where it is expected to bite the bullet and hike rates by 50 bps to cool the spiraling inflation which has vehemently hovered at uncomfortable levels on the back of crude oil    prices which have skyrocketed by over 50% in last six months. The  Foreign Institutional Investors on the other hand ploughed back their money from the local markets to the extent of Rs 2,703 crore in the week on expectations that deteriorating domestic macro headwinds will have adverse impacts on the companies' earnings thereby reducing the returns on investment. The Bombay Stock Exchange (BSE) Sensex lost 466.27 points or 2.38% to 19,135.96 during the week ended April 29, 2011. The BSE Mid-cap index declined by 141.07 points or 1.95% to 7,094.23 and the Small-cap index shed 163.26 points or 1.84% to 8,715.31. On the sectoral front, Reality lost 201.17 points or 8.45% to 2180.10, Capital Goods (CG) shed 607.16 points or 4.45% to 13,036.91, Bankex declined by 468.163 points or 3.46% to 13545.13, Oil & Gas tumbled by 301 points or 2.92% to 10,008.27   and   Metal   index   down   by   467.98   points   or   2.81%   to 16,190.59,were the top losers on the BSE, while Health Care(HC) adding 74.77 points or 1.21% to 6232.55 and FMCG advanced 24.78 points or 0.66% to 3755.16 were the only gainers on the sectoral space. The S&P CNX Nifty trimmed 135.20 points or 2.30% to 5750. On the National Stock Exchange (NSE), Bank Nifty lost 3.46% to 11,483.75, CNX mid-cap shed 1.36% to 8,200.95, CNX Nifty Junior declined by 1.35% to 11,376.70 and     CNX IT tumbled by 0.92% to 6718.35. Conclusively we expect slightly range  bound  scenario  between  5555-5960  though  sentiments  remain subdued for the upcoming sessions. Any closing above this 5960 with substantial volumes for at least 2 consecutive days may generate another 2-3% return and we might see 6070-6080 in the short term. HAPPY TRADING......

Posted on: 4 June 2011 | 4:58 am

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Posted on: 30 May 2011 | 11:58 pm

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Posted on: 23 May 2011 | 2:50 am

GOLD & SILVER: BUY AT EVERY REASONABLE CORRECTION

Always remember that parabolic rises can encounter severe downturns particularly in silver which tends to be volatile. Let's wait for long term support and a shakeout to reinitiate our short term positions. Investors don't know what to do with commodities. Traders are asking, “is it too late?” and “have we gone too high?” The question, of course, isn't easy to answer, but the simple reality is that there won't be too high of prices until the dollar becomes too low. Is this a secular long term top in gold and silver? We do not believe so. We are witnessing a powerful up move in gold and especially silver, where a healthy correction would be normal. There is a flight to quality away from fiat currency namely U.S. dollars. If the dollar continues to lose value, our holdings of precious metals and mining stocks will prove to be a prudent decision In light of recent events around the world, the Fed has remained incredibly lax in its policy to push interest rates and the dollar to zero. Most every central bank has tightened, is expected to tighten, or must tighten (think China) to keep their currencies from plunging to zero. The virtues of gold (GLD) and silver (SLV) are being addressed far and wide. The driving forces behind silver's price come from investors, industrial demands and a global shortage. The world simply is using more silver than the mines produce and new silver discoveries are becoming difficult to find. These factors are becoming truisms for public consumption. A parabolic rise has formed in silver as gold advances on to our measured target of $1600. Please note that at these times of extreme optimism volatile pullbacks become more prevalent. Parabolic rises must be approached with caution. Silver has rallied moving exponentially while gold is still moving linear. There will be unavoidable pullbacks in silver's secular uptrend and it would not be wise initiating long positions at these extremely overbought levels. Silver has a very high probability of shaking out investors as pullbacks follow overbought conditions. Silver is reaching extremely risky levels, yet miners are still poised to breakout. One of the reasons for such volatile action in the white metal is the large short position in silver taken by major financial institutions such as JP Morgan and HSBC, which are the subject of a new lawsuit that charges them with price manipulation of the silver market. Conclusion: From my experience it is prudent to wait for technical corrections before getting aggressive with any commodity. We firmly believe that any corrections on the way up will represent more reasonable entry points on this uptrend. Always remember that parabolic rises can encounter severe downturns particularly in silver which tends to be volatile. Let's wait for long term support and a shakeout to reinitiate our short term positions. We feel a pullback may be in order as the recycling of scrap increases. I don't expect it to last very long. Above all do not even think of shorting silver. I reiterate buy on dips as the price of silver is capable of doubling in the next twenty four months. I do not expect the silver to gold ratio to drop below 30:1 in the short term. Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Fundamental Pick for last 15 years. For all the latest happening of the market please visit http://moneysukh.com  “The real measure of your wealth is how much you'd be worth if you lost all your money“

Posted on: 18 May 2011 | 1:02 am

THINGS TO REMEMBER WHILE SHORT SELLING

“It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach “ Betting on rising stocks always deemed to be a profitable business from the point of view of trading or investing but have you ever being thought that you can also earn or gain profits in short term while stock goes down. Yes it is true that you can also earn and you could see your portfolio increase in value during a bear market too? Many investors make money on a decline in an individual stock or during a bear market only with the help of using an investing technique called short selling. Short selling is not complex but the concepts of short selling are not so easy to understand, especially for investors. Generally investors buy stocks and hold it until it appreciates and make profit when it rises, while short selling is opposite of that, in shorting stocks investors make money only when a shorted security falls in value. However, short selling involves many unique risks and pitfalls because mechanisms of short selling are relatively complicated compared to normal transaction, so it is very important to understand how the whole process works before you get involved. What is Short Selling? Actually when an investor goes long on an investment, it means that he or she has bought a stock believing its price will rise in the future. Conversely, when an investor goes short he or she is anticipating a decrease in share price therefore “Short selling is the selling of a stock that the seller does not own. More specifically, a short selling means the sale of a security or any individual stock that is not owned by the seller at that point of time, but he promises to deliver it at time of delivery is called short selling”. Reasons to Short Usually there are two reasons behind the short selling, one used either for speculation or other for hedging. Let us discuss that where short selling used to speculate and where to hedge and also what are the restrictions to be followed while shorting stocks. Speculation: Despite the negative perception on short selling speculation is done while watching the fluctuations in the market in order to quickly make a big profit of high-risk investments. However, speculation involves a calculated assessment of the markets and taking risks where the odds appear to be in your favor. Actually speculators can assume a high loss if they use the wrong strategies at the wrong time, but they can also see high rewards if they speculated correctly. Hedging: Short selling is also used by most of investor for Hedging. Hedging involves taking an offsetting position in a derivative in order to balance any gains and losses to the underlying asset. Hedging can be a benefit because you're insuring your stock against risk, but it can also be expensive and a basis risk can occur. The majority of investors use shorts to hedge. This means they are protecting other long positions with offsetting short positions. Restrictions: However, short selling is done whether for speculation or for hedging but there are certain restrictions have to be followed by the investors. The main restriction of short selling is that you can place order within specified size, price and type of stocks in which you can short. For example, penny stocks cannot be sold short, and most short sales need to be done in round lots. There are certain restrictions placed to prevent the manipulation of stock prices. Risk Involved in Short Selling Short selling is good to make profits in short term but short selling is also very risky bet because there are some unique risks entails like it is a pure gambling the losses can be infinite. Short selling can also make you bankrupt because money used might be from borrowings and short selling required to submit margin money with the broker. Lastly, short selling also works when it has been done with right timing because even selection of asset for short selling correct but if the timing is not suitable you will not be successful. Conclusion: In a brief, short selling sale means an investor borrows shares, sells them and must eventually return the same shares (cover). Profit (or loss) is made on the difference between the prices at which the shares are borrowed compared to when they are returned. An investor makes money only when a shorted security falls in value. In fact short selling can be also used for adding some more profits to your portfolio in downside or bearish market. This is suitable if it fits with your risk tolerance and investing style. Short selling provides a sizable opportunity with a hefty dose of risk. We hope this tutorial has enabled you to understand whether it's something you would like to pursue from the short selling. Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Fundamental Pick for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

Posted on: 17 May 2011 | 12:44 am

Financial Investment Grounds And Fundamental Pick For Essar Oil

“The safe way to double your money is to fold it over once and put it in your pocket “ Essar Oil, part of Ruia family's Essar group is engaged in exploration and production (E&P), refining and marketing of oil and oil related products. With the production capacity of 14 MMTPA oil refining it has also 1,635 retail outlets of fuel station across the country. In E&P business it is producing about 35,000 scmd from 33 production wells and also has 2C contingent resources of 148 mmboe. Globally it also has refining capacity 300,000 bpsd and also having a controlling stake of 50% stake in Kenya Petroleum Refineries Ltd's 80,000-bpsd refinery. FINANCIALS: Since FY06 to FY11 the Net Sales of the Essar oil has grown at CAGR of 136% while on account of high cost raw materials it beard losses up to FY09 but now in FY11 the Net Sales jumped by 28.7%% to Rs 46988 crore over FY10 and Operating Profit rose by 114% to Rs 2557 crore, the PAT for the same period also surged 2155% to Rs 654 crore. The OPM & PATM of Essar oil for the same period stood at 5.44% & 1.25% respectively. In Q4FY11 the Net Sales surged by 27.4%, Operating Profit & PAT also grew by 132% & 78% respectively. INVESTMENT GROUNDSIndustry OutlineAfter facing an economic slowdown in FY09 the worldwide demand for oil is now on its peak level and even in 2011 the demand for oil has suppressed the highest ever demand of 2010, the global demand for oil in 2010 was 87.81 mmbpd while in 2011 it touched 89.35 mmbpd. The mass consumption is coming from Asian region (0.78), Middle East (0.25) and Latin America (0.20) mmbpd. Despite increase in consumption of Oil & Gas world wide the per capita oil consumption in India is one of the lowest among major countries. In 2010 the annual per capita oil consumption in India was 0.9 barrels/person while in other developing countries like Russia, Brazil and China it stood at 7.5, 4.4 and 2.3 barrels/person in the same period. However, USA and European countries still have the highest per capita oil consumption, In USA it is around 19.4 and in EU it 9.7 barrels/person. The situation is almost the same for the consumption of gas. However, the demand for petroleum products in India is growing at fast rate the demand for oil grew at 6.5% in FY11 from 1.4% in FY06 and demand for Gasoline also increased from 4.8% to 10.9% for the same period. Capacity Expansion will help to improve the GRM…Essar oil is enhancing the production capacity of existing refining up to 18 MMTPA from current capacity of 14 MMTPA. The increased production is expected to start from mid Q4 CY11. Essar Oil is also ready to optimize the cost of its six refinery units which is scheduled to be completed by September 2012. This optimization will further enhance its production capacity up to 20 MMTPA and also increase the complexity (GRM) of the company up to US$11.8 from current US$6.1. Further under phase-II Plan company has also targeted to achieve the capacity up to 38 MMTPA. After achieving this much of capacity Essar oil will enjoy the complexity of US$12.8. Expanding Presence in Retailing by adding more Outlets…Essar oil is currently running 1,635 retail outlets across the country and to increase the presence in oil marketing segment it aimed to extend 5000 outlets across the country, currently 254 outlets in various stages of construction. Recently company has commissioned two CNG stations in association with Sabarmati & GSPC and also focusing on ALPG & CNG pumps through tie Aegis, Sabarmati Gas and GAIL Gas respectively. Besides this, company is also focusing on revenue from non fuel business and formed alliances with various Govt agencies to for that. Exploration and Production Business also rapidly growing…In Exploration and Production segment Essar oil has also presence through diverse portfolio of offshore and onshore oil & gas blocks. Currently it is producing about 35,000 scmd from 33 production wells and also got the approval from MoPNG for drilling another 500 production wells in Raniganj. In Raniganj to start commercial production the construction of 48-km gas evacuation pipeline from Raniganj to Durgapur has also been completed. Company has also signed contracts for 4 Indian Coal Bed Methane blocks with estimated resources of over 7.6 tcf. Read more about  Mansukh monthly magazine report on Indian Stock Market Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Fundamental Pick for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

Posted on: 16 May 2011 | 2:16 am

TECHNICAL ANALYSIS On UNITED SPIRITS LTD (MCDOWELL & C) And Lupin LTD

United Spirits (USL) is the largest spirits company in India and a flagship entity of $2 billion UB group. It manufactures wide range of whisky, vodka, rum and other spirits. United Spirits is among the top three spirits companies in the world. It has a presence in over 59 countries. USL's technical centre is located in Bangalore, which develops new products, conducts research and development, flavor testing and quality management. It has 62 manufacturing units. The company has received recognition for its quality products from independent jury such as International Wine & Spirits Competition (UK), International Spirits Challenge (UK), World Beverage Competition (US), Monde Quality Institute (Belgium) and Mundusvini (Germany). India's changing demography presents a significant opportunity for United Spirits to tap especially in the prestige segment. The company currently operates at 53 percent share-points in the segment. McDowell's No. 1 Platinum was launched in March 2010, is available in packs of 750 ml, 375 ml and 180 ml and is a part of Rs 8,300 crore McDowell's franchise. On technical perspective, stock currently shows significant correction from the highs of Rs 1688 however we believe it's a temporary one and we might see some buying opportunities in the near term. Nevertheless its technical indicators i.e. RSI and MACD also revealed some technical pull back in near term. Lupin is a transnational company engaged in development of APIs, generic and branded formulations. It is the largest manufacturer of Tuberculosis drugs in the world. It has onshore and offshore presence of its products in 70 countries. Its manufacturing unit is located in Goa, Tarapur, Ankleshwar, Jammu, Mandideep, Indore, Aurangabad and Kyowa in Japan. The manufacturing facilities of the company are approved by various international regulatory agencies like US FDA, UK MHRA, TGA Australia, WHO, and MCC South Africa. We expect Lupin to start API supply to Salix after a couple of years (~ in FY2013). The scale up in the deal clearly outlines the high probability of success for the drug to commercialise. Further, an approval for new indications would lead to higher API supplies and royalties in future. At the current market price of Rs440, the stock trades at 18.3x FY2012E fully diluted earnings and at 15.8x FY2013E fully diluted earnings. We maintain our Buy recommendation on the stock with a price target of Rs480. On technical viewpoint, stock has shown upward bias after having consolidation around Rs 420. In close proximity we believe stock is well poised to move in upward direction. Moreover it's RSI and other technical indicators stands in the positive territory where possibility of turnaround couldn't be rule out. Hence investors are advised to BUY this stock for a price target of Rs 470-480 in near term. Read more about  Mansukh monthly magazine report on Indian Stock Market Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Technical Analysis for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

Posted on: 13 May 2011 | 12:31 am

IMF SUPPORTING ADDITIONAL FISCAL TAPERING TO STAY AWAY FROM OVER HEATING

"We didn't actually overspend our budget. The allocation simply fell short of our expenditure" Emerging Asia is all set to continue leading global economic growth over the next couple of years but risks are increasing, particularly from a very high inflation and surging commodity prices amidst political unrest in some of the Middle East countries, said the International Monetary Fund (IMF) on Thursday. Asian growth will continue to be driven by economic powerhouses China and India. The IMF expects the Chinese economy to grow 9.5% while India will expand about 8% over the next two years. However, the multilateral body also cautioned against pockets of overheating across the region as inflation increases rapidly and capacities face increasing pressure. Higher global oil and food prices were further adding fuel to the problem. The wholesale price index (WPI) , India's main inflation gauge, is expected to rise by an average 8.8 percent for the fiscal year ending March 2011 before easing to 6.4 percent in the following year. This is considerably higher than 8.3 and 5.7 percent forecast in the October survey. Driven by costlier food items, wholesale price inflation soared to an annual 8.43 percent in December,Real policy rates are still negative in several regional economies, including China and India,' observed the IMF in its report titled 'Asia and Pacific: Managing the next phase of growth'. The agency added that even if signs of overheating are mixed, keeping real interest rates too low for too long could contribute to financial instability. As such, key Asian central banks, including the Reserve Bank of India (RBI) should look at more aggressive monetary tightening to ensure economy remained stable. Inflation in India continues to remain higher despite the RBI hiking its key policy rates eight times in the last financial year. Headline inflation accelerated in last couple of months to 9% as the core inflation (price rise in non-food manufacturing space) too accelerated.This has put the central bank into a tight corner. Clearly, somehow the policy makers have missed the underlying momentum of inflation. The central bank has to think again now if it wanted to continue with a calibrated policy of hiking rates by 25 bps at a time or if it was time for more aggressive policy tightening. Most economists now expect inflation to remain at elevated levels in the current financial year as well as rising costs have not been fully passed on to consumers. For instance, even as the crude prices are ruling at around $120 a barrel, India's retail fuel prices continue to be aligned to crude prices of around $75 a barrel. However, the risk that RBI would face in the more aggressive tightening scenario is that growth is already showing some signs of moderation and rapid rate hikes from here on will risk a far greater slowdown than what might be needed to avoid overheating. This is particularly so because in case of India the lag in monetary transmission is quite longer, running into a few quarters, and therefore the central bank would also have to work out how far the already implemented tightening has transmitted into the system. Bond yields were trading range bound with positive bias since most of the traders preferred to stay on the sidelines ahead of the central bank's annual policy review on Tuesday. The Indian market has priced in at least a 25 basis points increase at the central bank's policy review early next week, but there is a possibility the rise could be 50 bps. Further, dealers were also eying the results of Rs 6000 crore of cash management bills later on Friday. The yields on newly issued 10-year benchmark, the 7.80%-2021 was higher at 8.13% from its previous close of 8.11%, ahead of policy decisions on Tuesday. The benchmark five-year interest rate swaps was up 1 basis point at 8.27% from its previous close of 8.26%. The Reserve Bank of India has today announced the auction of 77-day Government of India Cash Management Bills for a notified amount of Rs. 6,000 crore. The auction will be conducted on April 29, 2011 using 'Multiple Price Auction' method. While on the other hand The partially convertible rupee was currently trading at 44.39/40, stronger compared with its Thursday's close of 44.43/44. The rupee opened at 44.42/43 and has touched a high and a low of 44.46/47 and 44.39/40 respectively. The index of the dollar against six major currencies was down 0.04 percent at 73.089 points. The May currency future was trading at 44.63/64 with a spread of 0.0025 and a volume of 600,124. The contract opened weaker at 44.78/79 against its previous closing of 44.66/67. The open interest (OI) stood at 892,337 up by 4.41% compared to its prevoius close of 854.615. Read more about Mansukh Monthly Magazine Report May 2011

Posted on: 11 May 2011 | 4:27 am