Profit booking is suggested

We hate to do "We told you na...". On 6th Dec, we wrote Nifty will break 5000 and it did. Then on 13th Dec, Buy on every decline and 20th Dec, Invest now and reap in New Year. The market bounced back big time and broke all its resistances. Technically, the markets have closed above the Nifty 5150 resistance level during this current relief rally on back of good volumes, which is a positive sign. Other positives for the market are the ADX indicator that is improving and the DI+ sign is gaining strength. Even the RSI is moving above its average on daily charts, which is a positive sign.

Higher advance tax figures by India Inc which suggests better Q3 December 2009 results, would support the market. Volume would be low due to year vacation and a truncated week of just three trading days.

High food price inflation is a major worry for the policymakers as they contemplate a right approach to tame hike in inflation which seems to be more of a supply side issue. The next quarterly review of monetary policy is scheduled on 29 January 2010.

Indian Stock Markets would witness stock specific action amid occasional bouts of a volatile and choppy trend due to the derivative segment expiry. The markets would continue to take cues from the global markets and crude oil prices. Profit booking is suggested and avoid fresh longs. Happy New Year!

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Merry Xmas at the DalalStreet

A 'Santa Claus' rally took the market to more than 19 months' closing high in a truncated trading week. Trading for the week began on a weak note, pushing the BSE Sensex near six week closing low. Later, higher advance tax figures by India Inc which suggests better Q3 December 2009 results, triggered a rebound. The market gained in three out of four trading sessions in the week.

BSE Sensex rose 640.78 points or 3.83% to 17360.61 in the week ended 24 December 2009, its highest closing since 16 May 2008. S&P CNX Nifty rose 190.70 points or 3.87% to 5,178.40, its highest closing since 5 May 2008.

BSE Mid-Cap index rose 2.63% and BSE Small-cap index rose 2.97%. Both these indices underperformed the Sensex.

Finance Minister Pranab Mukherjee conveyed that the government will wait until the February 2010 budget to consider withdrawing some of the fiscal stimulus measures. Inflation and cutting fiscal deficit are the major challenges for the government in the short-to-medium term. However, growth outlook for the second half of FY 2010 looks better.

Invest now and reap in New Year

All throughout the week the market was volatile with negative close on each day. For the full week ended 18th December 2009 the nifty fell 129.60 points to close at 4987.70 on Friday. There is a high speculation that the Reserve Bank may tighten monetary policy and the expectation of CRR hike even in the next week. Also there is a holiday mood around that could further dampen the sentiments.

Moody's Investors Service changed the outlook on the Indian government's Ba2 local currency rating to positive from stable. At the same time, the ceiling on banks' foreign currency deposits has been raised to Ba1 from Ba2 to better reflect the robust external position of India. Also note that the advance tax numbers are showing strength in the economy.

After several months of declines, the country's merchandise exports turned positive in November 2009, logging a growth rate of 18% in dollar terms as compared to the year-ago period.

In the nifty option front there were negative signals as fresh call writing was observed in the 4900 to 5200 strikes. Besides 4800 and 4900 strike puts witnessed fresh addition of OI indicating negative trend.

BSE NSE to increase the trading hours and start at 9am from 4th Jan.

Expect Indian Stock Market to be highly volatile amid quite low volume. Global developments would mostly guide the trend. We believe this is the right time to invest and reap in the New Year i.e. January and budget both Railway & Finance.

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Next two weeks markets will be volatile with low volume. It is also the right time to invest keeping in mind the Railway & Finance Budget.

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BSE, NSE - Quite Immature move

9:55am to 9:45am and then 9:00am. What an irresponsible move by BSE & NSE exchanges? Thankfully some common sense sinked into them after there was some dis-content from traders/investors. So now it would be 9am from 4th Jan (New Series and New Year's first trading day).

BSE 30-share Sensex fell 399.20 points or 2.33% to 16,719.83 in the week ended 18 December 2009. S&P CNX Nifty fell 129.60 points or 2.50% to 4987.70.

BSE Mid-Cap index outperformed the Sensex, falling 1.58% to 6,470.58. The BSE Small-cap index, too, outperformed the Sensex, falling 1.04% to 7,885.72.

Realty stocks fell on profit taking. FMCG stocks did follow the suit and slipped. Banking shares fell on a likely monetary tightening by the Reserve Bank of India. Just an exception, Auto sector was cheering on good sales numbers.

Fidelity India & DSP BR World Mining Fund

Fidelity India Value Fund closes on 15th Dec, 2009

DSP BlackRock World Mining Fund closes on 18th Dec, 2009

For our analysis, visit our Mutual Fund Center

Buy on every decline

The market movement remained flat during the week ended 11th December 2009 with really mixed kind of signals from the futures & options (F&O) activity all through-out the week. The industrial production growth though robust at 10.3% fell below market expectations of a growth of 13% to 14% for the month.

In the nifty option front there were negative signals as fresh call were being written from 5000 to 5400 strike as puts written at 4900 and 5000 strikes earlier were covered on Friday. There were fresh put buying of 5100 and 5200 strikes.

Thus the F&O activity emits a mixed signal although the option indications are negative.

Traders and speculators were seen buying at lower levels while booking profits at higher levels and creating short positions. Incidentally, FIIs remained net buyers in the cash segment but were net sellers in the derivatives segment. Mutual funds, too, remained net sellers and were seen booking profits at regular intervals.

Sensex faces resistance at the 17300 and 17434 levels but seeks support at the 16750and 16158levels. The Nifty faces resistance at the 5150, 5230 and 5303 levels while 4957 and 4732 are its important support levels.

We believe dip on Friday was a big over-reaction by market. We are positive about the coming week. Investors are adivsed for buying on every decline. Expect Positive trend in the coming week.

Up, Down naah - it was Neutral week

Thanks to stimulus measures and robust domestic demand, India's industrial output jumped 10.3% in October 2009 from a year earlier.Manufacturing production rose 11.1% in October 2009 from a decline of 0.6% a year earlier. September's annual industrial growth rate was revised upward to 9.6% from 9.1% previously.

BSE 30-share Sensex rose 17.49 points or 0.10% to 17,119.03 in the week ended 11 December 2009. S&P CNX Nifty rose 8.40 points or 0.20% to 5117.30.

BSE Mid-Cap index underperformed the Sensex, falling 0.40% to 6,574.49, while the BSE Small-cap index outperformed the Sensex, rising 1.48% to 7,968.65.

Banking shares fell on a likely monetary tightening of the monetary policy by the RBI. Realty stocks slipped on profit taking. FMCG shares were mostly higher on defensive buying. Software shares advanced on encouraging US job data.

Cox & Kings IPO - What a miss?

Cox & King IPO ended its first trading session at a huge premium of 30.30% to its issue price of Rs 330. The share close at Rs 430 on the NSE.

It touched an intraday high of Rs 433.90 and intraday low of Rs 343.20. The total traded quantity was 2,98,96,728 shares and turnover was at Rs 1,21,948.75 lakh.

On the BSE, the share closed at Rs 426.05, at a premium of 29.10% to its issue price. It touched an intraday high of Rs 433.45 and intraday low of Rs 304.10.

We had recommended this IPO and post IPO warned that it was a big miss by Retail investors

D B Corp IPO Analysis

D B Corp Ltd. (DBC) was originally incorporated as Multi-Tech Energy Ltd in 1995. It is one of the leading print media companies in India, publishing 7 newspapers, 48 newspaper editions and 128 sub-editions in three languages (Hindi, Gujarati and English) in 11 states in India.

Flagship of the company’s newspapers, Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar, have a combined average daily readership of 15.5 million readers, making them one of the most widely read newspaper groups in the country. Dainik Bhaskar alone with a total average daily readership of 11.7 million readers is a widely read newspaper in Madhya Pradesh, Chattisgarh, Rajasthan, Haryana, Punjab and Chandigarh.

In addition to newspapers, DBC publishes 5 periodicals namely Aha Zindagi (a monthly magazine published in Hindi and Gujarati), Bal Bhaskar (a Hindi magazine for children), Young Bhaskar (a children’s magazine in English) and Lakshya (a career magazine in Hindi).

Also, Company has a significant presence in the radio business under the brand name MY FM. They operate 17 FM radio stations in different cities.

Issue Objectives

• Setting up new publishing units
• Upgrading existing plant and machinery
• Enhancing brand image through sales and marketing
• Reducing existing working capital loans
• Prepaying existing term loans and
• Achieving the benefits of listing

IPO Grading / Rating
ICRA has assigned an IPO Grade 4 to DBC’s IPO indicating above-average fundamentals.

Issue Open: Dec 11, 2009 - Dec 15, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: 18,175,000 Equity Shares of Rs. 10
Issue Size: Rs. 336.24 - 385.31 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 185 - Rs. 212 Per Equity Share
Market Lot: 30 Shares
Minimum Order Quantity: 30 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

Free Tip Profit Rs 16800 (140%) per lot

Our Free Tip Stock Option given on 27th Nov moved from 5 to 12 (140% Profit)

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Our November Performance

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Godrej Properties IPO Analysis

Godrej Properties Ltd. (GPL) incorporated in February 1985 is coming up with the intial public offering 94.3 Lacs equity shares of Rs. 10 in the price band of Rs 490 to Rs 530 on 9th December. The issue will close on 11th December.

GPL’s business focuses on residential, commercial and township developments. Currently, the company has real estate development projects in 10 cities in India which are at various stages of development. It has total land reserves of 391.04 acres, aggregating to approximately 82.74 million sq. ft. of developable area and 50.21 million sq. ft. of saleable area, which includes ongoing projects and forthcoming projects. GPL has completed a total of 23 projects comprising 16 residential and 7 commercial projects, aggregating approximately 5.13 million sq. ft. of developed area.

Issue Objectives
The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges & to raise capital to:

• Acquisition of land development rights for Forthcoming Projects
• Construction of their Forthcoming Project
• Repayment of loans
• General Corporate Purposes

IPO Grading / Rating ICRA has assigned an IPO Grade 4 to GPL’s IPO indicating above-average fundamentals.

Issue Open: Dec 09, 2009 - Dec 11, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: 9,429,750 Equity Shares of Rs. 10
Issue Size: Rs. 462.06 - 499.78 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 490 - Rs. 530 Per Equity Share
Market Lot: 13 Shares
Minimum Order Quantity: 13 Shares
Listing At: BSE, NSE

For our analysis, visit our IPO Center

JSW Energy IPO Analysis

JSW Energy Ltd (JSWEL), a group company of Jindal South West group, was incorporated in March 1994. The company is presently operating 995 MW of power capacity and 2,655 MW of generating capacity is in the construction phase. The company is also engaged in power trading activities.

JSWEL commenced its commercial operation in the year of 2000 with 2x130 MW of power capacity and has achieved Plant Load Factor (PLF) of more than 95% consistently. In September 2009, the company commenced operation from 2x300 MW Power Plant in Vijayanagar, Karnataka. In August 2009, JSWEL commissioned Unit - I of 8x135 MW RWPL - I plant.

Objective of the Issue

The main objective of the IPO is to fund its capex

1. Rs 21,425.26 million to finance construction of 2,655 MW capacity, 400 KV transmission project and mining venture.
2. Rs 4,700 million to repay corporate debt for working capital

IPO Rating
CARE has assigned a 'CARE IPO Grade 4' [Grade Four] to the proposed IPO issue of JSW Energy Ltd (JSWEL). 'CARE IPO Grade 4' indicates above average fundamentals.

Issue Open: Dec 07, 2009 - Dec 09, 2009
Issue Type: 100% Book Built Issue IPO
Issue Size: Equity Shares of Rs. 10
Issue Size: Rs. 2,700.00 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 100 - Rs. 115 Per Equity Share
Market Lot: 60 Shares
Minimum Order Quantity: 60 Shares
Listing At: BSE, NSE

Rs 5 discount will be given to retail investors

For our analysis, visit our IPO Center

Nifty will break 5000

Dubai crisis was a big overreaction which was wisely ignored by the Global markets. Indian stocks surged due to a combination of an ongoing recovery in the economy (good GDP numbers) and ample global liquidity.

Indian Government will publish numbers of industrial production for October 2009 on Friday, 11 December. Besides this there aren't any more cues from the domestic front. Global markets will mostly guide our market in the next few days.

Fresh call build up in the 5200 and 5300 strikes signifies bullish scenario. However there was aggressive put writing till the 5000 strikes, the 5100, 5200 and 5300 strike puts witnessed put buying thus indicating that there is some cautious move.

We believe that in the coming week, Nifty will break 5000 and might go upto 4980/4960/4940 and thereafter should bounce back in the later part of the week.


Meanwhile, the initial public offer (IPO) of JSW Energy opens for bidding on Monday, 7 December 2009. Two days later, the IPO of Godrej Properties opens for bidding.

VJonDalalStreet November Performance

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Solid Q2 GDP numbers ignored Dubai's debacle

The markets remained range bound after last weeks debacle on the back of negative news flow form Dubai. The volumes recorded were lower than the previous week amidst positive breadth, which indicates lack of confidence at higher levels. Selling pressure and profit booking continued to emerge at higher levels as the Nifty struggled to sustain above the 5150 level. Broad based follow-up buying was largely absent. Traders and speculators were seen buying at lower levels while creating shorts and booking profits at higher levels. Incidentally, FIIs remained net buyers in the cash and the derivatives segment. Mutual funds, however, remained net sellers and were regularly seen booking profits.

Gross Domestic Product (GDP) grew from 7.1% to 7.9% in Q2 Sep from its previous year. Q1 was only 6.1%. Recovery in the economy was led by 9.5% mining, 9.2% manufacturing and 6.5% construction. However agriculture was still a lagard with a mere 0.9% growth.

BSE 30-share Sensex rose 469.53 points or 2.82% to 17,101.54 and S&P CNX Nifty rose 167.15 points or 3.38% to 5108.9 in the last week.

BSE Mid-Cap index rose 4.57% to 6,600.97 and BSE Small-cap index soared 6.55% to 7,852.43. Both these indices outperformed the Sensex.

Reliance Industries (RIL) rose 3.83% to Rs 1,091. Auto stocks surged on the back of strong monthly sales figures for November 2009. Banking shares rose on upbeat economic data.