Financial focus Weekly Newsletter InFINeeti ISSUE 6
VOLU ME 1
20 13
TOP STORIES….…........1 MARKET ACTIVTY ECONOMICS
….....2
....... …... 3
TERM OF THE WEEK TRADING CALLS
….4
..…….5
MONTHLY RETURNS…..6
Financial focus
A one stop guide to know about all the recent happenings in the finance world
TOP STORIES : INDIA
GOVT EASES FDI NORMS IN RETAIL SECTOR Union cabinet eased investment rules for the retail sector on Thursday in a renewed attempt to attract foreign supermarket operators such as Wal-Mart Stores Inc. and Tesco. According to the proposed norms, Govt. is likely to expand the definition of micro, small and medium enterprises (MSME) by allowing retailer to procure from them even if they have exceeded total investment of $2 Mn. in plant and machinery. Under the new policy 50% investment in backend infrastructure will be "restricted" only to the first tranche of $100 Mn. while subsequent investments into backend will be decided by the retailer. HSBC PMI, JULY AUTO SALES DATA WEIGH DOWN MAR-
KETS Sensex fell 153 pts. to end at 19164.1, Nifty at 5677 as M&M fell 4% on weak July sales, & PMI shrank the most in 4 yrs. to 50.1. Meanwhile, automobile sales in India have been slow for more than a year now. However, utility vehicles saw strong growth for much of FY13, helped by increased price differentiation between petrol and diesel and new launches like M&M's XUV500 and Quanto, Renault's Duster and Maruti Suzuki's Ertiga. However, even SUVs have now hit speed bumps since last few months following a hike in excise duty by the government, and partial de-regulation of diesel prices. RBI KEEPS KEY RATES UNCHANGED; GDP FORECAST
CUT TO 5.5% RBI Governor, D. Subbarao, kept policy rates unchanged at the quarterly monetary policy review on July 30, but took a dovish stance. Consequently, the key repo rate remains at 7.25%, reverse repo at 6.25% while cash reserve ratio remains at 4%. Lowering the GDP growth projection for the current fiscal to 5.5% from 5.7%, the central bank said the external sector is the "biggest threat" to economic stability. It also said that the recent liquidity tightening measures, taken to support the rupee, will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling it to revert to the policy of supporting growth with continuing vigil on inflation.
Financial focus Weekly Newsletter InFINeeti
TOP STORIES : WORLD U.S. ECONOMY GROWS STRONGLY IN 2ND QUARTER The U.S. economy grew at a stronger-than-expected 1.7% annual pace in the second quarter, a result that is expected to provide further impetus for the Federal Reserve to curb its bond-buying program. Separately, strength was also evident in the ADP National Employment Report, with private employers adding 200,000 jobs in July, matching June's gain. Gross domestic product grew at a 1.7 percent annual rate, the Commerce Department said on Wednesday, stepping up from the first quarter's downwardly revised 1.1 percent expansion pace. CHINA MANUFACTURING STAYS IN GROWTH MODE China's manufacturing activity maintained positive growth in July, with the official purchasing managers' index rising to 50.3 from 50.1 in June. The latest reading topped expectations, which saw a slide into negative territory at 49.8. The crucial employment index also suggested companies are continuing to shed workers, but at a slower pace, with the index at 49.1 in July from 48.7 in June. That was the 14th month below 50, according to the NBS. The sub-index measuring the business outlook jumped to 56.4 in July from 54.1 in June, indicating improved sentiment in the coming three months among business owners
EUROZONE MANUFACTURING RETURNS TO GROWTH AF-
TER 2 YEARS OF SHRINKAGE Eurozone manufacturing returned to growth for the first time in two years last month, as the region's purchasing managers' index edged onto positive ground at 50.3, up from 48.8 in June. "This hopefully places the sector nicely to provide a positive spur to the thirdquarter GDP numbers and help the euro area exit recession," said Rob Dobson, senior economist at PMI compiler Market
MARKET ACTIVITY ASIAN-PACIFIC MARKETS CONTINUE THEIR RALLY Asian-Pacific markets kept rising for a second day Friday as investors' appetite for risk improved amid positive economic data and assurances by the world's central banks that their loose monetary policies will continue. Japan Nikkei 225 jumped 3.3%. Hong Kong's Hang Seng Index rose 0.5%. Australia's S&P/ASX 200 gained 1.1%. China's Shanghai Composite was flat. South Korea's Kospi edged up 0.1%. Bucking the trend, India's Sensex was down 0.7%. SENSEX FALLS 153 PTS; NIFTY BELOW 5700 ON RUPEE WOES Sensex fell 153 pts. to end at 19164.02, Nifty at 5677.90 as JSPL fell 8%, Power Grid fell 11.5%,Banks like ICICI, BoB & Union Bk fell on NPA worry. The Nifty shed 400 points in eight sessions and also posted a biggest weekly loss since week ended March 22. For the week, the index tanked 3.5 percent or 208 points while the Sensex plunged nearly 3 percent.
Financial focus Weekly Newsletter InFINeeti
NSEL BACKLASH: FINANCIAL TECH, MCX SHARES NOSEDIVES
Shares in Financial Technologies (India) Ltd (FTIL) extended Thursday’s losses and fell a further 40% after its unlisted unit National Spot Exchange Ltd (NSEL) suspended trading of all one-day forward contracts, except its so-called e-series contracts. Shares of FTIL and MCX fell 64.6% and 20%, respectively, on Thursday.
ECONOMICS ECB
HOLDS
INTEREST
RATES
STEADY
The European Central Bank has kept interest rates at 0.5%. President Mario Draghi says there might be "gradual recovery in economic activity in the remaining part of the year and in 2014." However, Draghi has pledged to keep rates low for an extended time. European Central Bank (ECB) president Mario Draghi has said there are some tentative signs of an economic recovery in the Eurozone.
S&P SEES STRONGER GROWTH FOR PHILIPPINES, FUELED BY DOMESTIC DEMAND
Standard & Poor's is now projecting 6.9% growth for the Philippines this year, driven by strong domestic demand. The latest forecast is up from an earlier outlook of 6.5% growth. S&P singled out the Philippines and Indonesia among Southeast Asian nations as economies likely to outperform in the region, where more export-dependent economies are expected to struggle.
SUBBARAO TO STEP DOWN, PUTTING INDIA IN MARKET FOR NEW CENTRAL BANK CHIEF
Indian central bank chief D. Subbarao has declined to stand for another term, and the government is searching for a successor, said Finance Minister P. Chidambaram. Subbarao's current term expires in September. He has been in office since 2008.
DID YOU KNOW? Recently, an incident in West Bengal challenged the accounting conventions and surprised the regulators. Vikash Metal and Power Ltd., based out of Kolkata, have shown an ‘extraordinary loss’ of INR 90 crores in the annual report furnished to its shareholders. Interesting point lies in details claimed by the company. This loss was caused due to robbery of plant and machinery, stock and believe it or not even factory building! What makes it scary is that annual report with these facts got audited and endorsed by auditors too. So next time, you might see a thief running on the road with a building on his shoulders!
Financial focus Weekly Newsletter InFINeeti
Source : FLIP
Financial focus Weekly Newsletter InFINeeti
Avneet’s Call
Redington India Period
CMP
1 week
59.60
Call Buy
Target 63
Stop Loss 57.5
Hexaware Tech Period
CMP
1 week
115.70
Call Buy
Target 124
Stop Loss 111
Prestige Estate Period
CMP
1 week
123.60
Call Buy
Target
Stop Loss
130
119.4
The stock closed above its 10 day moving average last Friday. The stock seems to be bottomed out for the moment with RSI close to 40 and a reversal in (12, 26) MACD is showing signs of bullish pattern in the stock. Also the stock broke the first resistance level of 58.85.
The stock has rallied from lows at around 80 to 115 within a month. The bullish rally in the IT stocks is due to the depreciation of INR which increased their margins for Q1. After the steps taken by RBI, the INR was looking to stabilize but reached to new life time lows last Friday. We expect INR to further depreciate which could have an impact on the margins of company over short term. The stock is already trading above its 10 day moving average and since the market sentiment looks very weak, we expect some bounce back in IT stocks. The stock has found a support after good Q1 results at around 120122. Macquarie’s also gave the stock outperform rating. The RSI are at 30 and MACD showing signs of reversal i.e. bullish pattern on last Friday. The stock is trading close to its 10 day moving average and is eyeing the Aug launch for 1566 apartment Bangalore project which could have a positive effect on the share after most real estate stocks have beaten down.
Financial focus Weekly Newsletter InFINeeti
Bhushan’s Call
Financial Technologies Period
CMP
1 week
152
Call
Target
Sell
120
Stop Loss 165
Coal India Period
CMP
1 week
254
Call
Target
Sell
245
Stop Loss 260
Sun TV Network Period
CMP
1 week
427
Call
Target
Buy
445
Stop Loss 420
Stock Name
Call
Target Price
Dish TV
Sell
48.5
HUL
Sell
620
Sell
1075
Buy
115
Jubilant Foodworks SKS Microfinance
The carnage that happened with FTIL won’t subside unless some clarity is obtained regarding the clarity of payment of entire obligation. The deliverables % for the stock is very low at 8.8%, and Reliance Capital also offloaded its holdings of 11.91 lakh shares at an average price of 212. The stock took a support of 105-115 levels on Friday, and bounced back to close off the day’s lows. This is purely a trading call , as the daily and weekly charts for the same are also strongly bearish and we feel some more downside is left in the stock.
Coal India came out with a disappointing set of numbers on Saturday, with Q1 net profit dipping 16.5% to Rs 3,731 cr & net sales declined marginally to Rs 16,472 crores in April-June quarter from Rs 16,500.6 crores in a year ago period, which too came in lower than forecast.. It has broken its major support of 290, with conviction and it is giving a strong bearish signal. It also marginally missed its output target for July by two percent producing 32.77 million tones (MT) of dry fuel during the month. Got going for 5% of divestment in this month itself , may drag the counter lower, due to low setting of OFS price. Sun TV showcased good set of numbers with Q1 net unchanged at Rs 164 cr, sales up 41%. Rather than growth in bottom line , the top line growth looks very impressive. It has also formed a pattern of ‘Engulfing Bullish’ on daily candlestick charts. Also its upward movement on Friday was very strong amid huge volumes , and high built up of long position in F&O counter.
TARGET HIT
Last Week’s Stock Calls that hit their target levels
Avneet Bhulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata campus) Disclaimer : InFINeeti and IIFT do not take any responsibility regarding the authenticity of above calls. Please consult your financial advisor before taking any investment decisions
Financial focus Weekly Newsletter InFINeeti
* The returns are calculated on an investment of INR 1 lakhs/ person in one week, equally divided among the 3 calls given for that particular week (i.e. 33333.33 per stock in a week)
Avneet’s Returns Date
6-Jul
15-Jul
22-Jul
29-Jul
Stocks
Buy Price
Target
Sold At
Profit/Loss
P/L %
Invested
IGL Jubilant Foodworks PFC Maruti Suzuki DCB Strides Arcolab Maruti Suzuki Jain Irrigation Vijaya Bank Jubilant Foodworks SKS Microfinance DRL
278.8
300
289.31
10.51
3.77%
1257
1130.95
1260
1131
0.05
0.00%
1
137.95
140
140
2.05
1.49%
495
1447.95
1390
1448
-0.05
0.00%
-1
52.25
55.45
50
-2.25
-4.31%
-1435
771.85
815
814
42.15
5.46%
1820
1451
1390
1390
61
4.20%
1401
55.3
58
53.5
-1.8
-3.25%
-1085
43.7
41
41
2.7
6.18%
2059
1150
1076
1077
73
6.35%
2116
104
115
115
11
10.58%
3526
2290
2400
2263
-27
-1.18%
-393
Column1 P/L Weekly
1753
1.75%
384
0.38%
2376
2.38%
5249
5.25%
Total
9762
9.76%
Column1
P/L Weekly
2811
2.81%
2230
2.23%
1967
1.97%
2973
2.97%
9981
9.98%
Bhushan’s Returns Date
6-Jul
15-Jul
22-Jul
29-Jul
Stocks
Buy Price
Target
Sold At
Profit/Loss
P/L %
Invested
Sun Pharma
1036
1080
1080
44
4.25%
1416
Wipro
351
365
365
14
3.99%
1330
DLF M&M IGL IDFC Bajaj Auto BHEL GAIL
177.35 905 289 135 1972 174 333
165 870 310 145 2050 168 342
177 870 310 129 2050 168 328
0.35 35 21 -6 78 6 -5
0.20% 3.87% 7.27% -4.44% 3.96% 3.45% -1.50%
66 1289 2422 -1481 1318 1149 -501
Dish TV
52.5
48.5
48.5
4
7.62%
2540
HUL
660
620
620
40
6.06%
2020
Yes Bank
367.5
380
350
-17.5
-4.76%
-1587
Total InFINeeti Team
Aakanksha Hajela | Bhushan Kanathe| Kunal Maheshwari| Vaibhav Garg| Md. Umair Ansari