Financial focus Weekly Newsletter InFINeeti ISSUE 7
VOLU ME 2
20 13
TOP STORIES….…........1 MARKET ACTIVTY ECONOMICS
….....2
....... …... 3
TERM OF THE WEEK TRADING CALLS
….4
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Financial focus
A one stop guide to know about all the recent happenings in the finance world
TOP STORIES : INDIA
RAJYA
SABHA
CLEARS
COMPANIES
BILL
The much-awaited Companies Bill aimed at protecting the interest of employees and small investors, was passed in the Rajya Sabha on Thursday amid much din. The Lok Sabha had passed the Companies Bill in 2012. Corporate affairs minister Sachin Pilot said the legislation was progressive, forward-looking, encourages more disclosures and better governance. "After 100 years, this is the second time that a new companies law has been legislated," he said. Around 193 recommendations have been included in the Companies Bill. The new Companies Bill also paves the way for early winding up of entities and a quick merger process.
ECONOMIST IS TAPPED TO RUN INDIA'S CENTRAL BANK Raghuram Rajan, a former chief economist at the International Monetary Fund who gave advance warning of the 2008 financial crisis, will run the Reserve Bank of India for the next three years. The University of Chicago professor warns that he has no "magic wand" to make India's economic problems go away quickly. As an adviser to the Finance Ministry, Rajan has suggested the issuance of bonds denominated in foreign currencies to strengthen India's ability to support the rupee.
SERVICES PMI FALLS TO LOWEST SINCE APRIL 2009 Services PMI contracted to 47.9 pts in July from 51.7 pts in June on drop in new biz on weak economic sentiment, hurting chances of recovery. Companies in India's vast services sector suffered a fall-off in activity for the first time in nearly two years in July, according to a survey released on Monday, hurting chances for a recovery in growth in Asia's largest economy. The latest PMI is the first time since October 2011 the headline index has fallen below the 50 mark that divides growth from contraction, and the lowest since April 2009, dashing hopes of a quick turnaround for Asia's third-largest economy.
Financial focus Weekly Newsletter InFINeeti
TOP STORIES : WORLD
JAPAN AIMS TO SLASH BUDGET DEFICIT BY FISCAL 2015 A government forecast suggests Japan might be able to deliver on an international commitment to halve by fiscal 2015 its primary budget deficit of 6.6% of gross domestic product from fiscal 2010. The total deficit for the central and regional governments will decline to 17.1 trillion yen in fiscal 2015, the government says. The forecast depends on revenue from a planned sales tax increase Prime Minister Shinzo Abe will decide whether to go ahead with the tax increase plan after looking at the April-June GDP data
MEXICO READIES ENERGY REFORM TO ATTRACT PRIVATE CAPITAL Mexican President Enrique Pena Nieto said he will present to Congress wideranging reform aimed at bringing private investment into oil, gas and electricity markets and boosting economic growth. His proposal would amend the constitution, which prohibits private involvement in the energy sector, lawmakers said The government's energy reform bill, expected on Wednesday, is expected to open electricity generation to more private participation, while keeping both transmission and distribution under state control.
AMAZON'S BEZOS TO PAY $250M FOR THE WASHINGTON POST The $250 million sale of The Washington Post to Jeff Bezos, founder and CEO of online retailer Amazon, puts the influential newspaper into the hands of an entrepreneur described by many as a technological visionary. Bezos immediately assured the publication's employees and readers that while he will bring innovation to the 135-year-old newspaper, he will safeguard its journalistic traditions. The deal ends the Graham family's 80-year ownership of the newspaper.
MARKET ACTIVITY
ASIAN-PACIFIC MARKETS MOUNT MODEST RECOVERY Most stock markets rose Friday in Asia-Pacific amid cautious trading, reacting to positive economic reports from China. Japan's Nikkei 225 edged up 0.1%. Hong Kong's Hang Seng Index gained 0.7%. Australia's S&P/ASX 200 slid 0.2%. China's Shanghai Composite rose 0.4%. South Korea's Kospi dropped 0.2%. India's Sensex was up 0.7%.
SENSEX UP 125 PTS,SNAPS 2 DAYS OF LOSSES;RANBAXY UP 28% Sensex ends at 18789.34, Nifty at 5565.65 helped by surge in Ranbaxy on upbeat sales in U.S. Metals stocks like Tata Steel & Hindalco gained 5% each. Shardul Kulkarni, senior technical analyst of Angel Broking expects the market should move from the current levels to around 5,700-5,750, which is a relief rally. He feels the bounce can last for seven-eight trading sessions, he adds.
Financial focus Weekly Newsletter InFINeeti
RUPEE AT 60.88/$, UP 42P; POSTS BEST GAIN IN TWO WEEKS The currency posted its best single-day gain in 2 wks, as hopes of a package from govt & RBI soon would help bring much needed dollar inflows. “ RBI's earlier measures have not been sufficient to stop rupee's fall. The news that finance minister is going to speak soon, especially after the rupee hit the latest record low, is raising hopes for more steps," said Pramod Patil, assistant vice president, forex and money markets at United Overseas Bank.
ECONOMICS
GREEK UNEMPLOYMENT RATE REACHES A RECORD 27.6% Greece, after six years in recession, is seeing 27.6% of its workforce unemployed, another record high. Among those ages 15 to 25, almost twothirds are jobless. The central bank expects unemployment to peak at 28%, then begin to decline in 2015 .Ordinary Greeks are suffering the austerity imposed by international lenders to slash government debt levels, but only austerity means a downward economic spiral.
ANALYSIS: CARNEY MUST ACT TO ENCOURAGE BUSINESS LENDING The most urgent task awaiting Bank of England Governor Mark Carney is making business lending more attractive to financial institutions, according to The Economist. "With the mortgage market in good health, the Funding for Lending scheme that gives banks access to cheap money should be restricted to those that provide fresh loans to firms," the magazine says. "The scheme could also cover more of the outstanding business loans on banks' books. A really radical Mr Carney would buy up pools of business debt.
YES BANK: EGO WAR COSTS PROMOTERS RS.2,000 CR Even as Yes Bank maintains that Shagun Gogia’s nomination is being rejected on professional grounds, the ongoing spat is eroding the bank’s stock value. he Yes Bank Ltd stock has lost at least 40% in the past few weeks, more than double the loss of BSE’s banking index Bankex. Close toRs.8,000 crore worth of investors’ wealth has evaporated, and the two promoters of the bank, Rana Kapoor and the successors of the lateAshok Kapur, have lost around Rs.2,000 crore.
DID YOU KNOW? The Big Mac Index 2012 :The Big Mac index is burger -based measure of whether currencies are over or undervalued. It comes from the theory of purchasing-power parity, which says that exchange rates should eventually adjust to make the price of a basket of goods same in each country. Here, the basket contains just one item: the Big Mac hamburger, which is pretty much the same around the world. The index works by calculating the exchange rate that would leave a Big Mac costing the same in each country.
Financial focus Weekly Newsletter InFINeeti
Source : FLIP
Financial focus Weekly Newsletter InFINeeti
Avneet’s Call
Cipla Period
CMP
1 week
412.7
Call Buy
Target 425
Stop Loss 405
Apollo Tyres Period
CMP
1 week
61.6
Call Buy
Target 65
Stop Loss 60.4
Maruti Suzuki Period
CMP
1 week
1385
Call Buy
Target 1415/20
Stop Loss 1360
Cipla Q1 net profit rose by 10%, revenue jumped by 19% higher than analysts estimation. Its results were very good from both topline and bottom line perspective. There was a huge build up in Open Interest on the long side with huge increase in volume, signifying a strong up move. It has also crossed its 20 DMA, 50 DMA & 100 DMA with strong volumes strengthening the possibility of breakout on the upside. Apollo Tyres Q1 net up rose higher-than-expected 20% to Rs 166cr . Revenues from domestic and South Africa were largely flat while Europe's revenues increased to Rs 726.3 crore from Rs 654.54 crore Y-oY. Lower cost of rubber also added to strong bottom line growth. Though there is lack of clarity on the impact on its B/L sheet due to acquisition of Cooper Tyres, good results may give some respite to already much beaten down stock (discount of 35-40% than its fair value). The high % of Deliverables (56%) than 30 day average of 38%, with formation of Bullish Harami candle on daily chart may signify a reversal in the trend. Maruti had posted strong Q1 results with net profit jumping 49% to Rs 632cr, but due to the strong bearish market it was trading very sluggishly but was holding on to its strong support of 1300-1320. Now with the market closing letting off its downward steam on Thursday, it showed a strong up move breaking upward from its trading range of some days of 1290-1320. There is accumulation happening in the counter, and the stock has hust closed below its 20 DMA of 1393, above which it may rally to its next resistance level of 1450 in short term
Financial focus Weekly Newsletter InFINeeti
Bhushan’s Call
Gujarat Gas Co Ltd Period
CMP
1 week
195.40
Call
Target
Buy
203
Stop Loss 188
STCI Period
CMP
1 week
119.15
Call
Target
Buy
126
Stop Loss 114
Wipro Period
CMP
Call
Target
1 week
447.90
Sell
425
Stop Loss 460
Stock Name
Call
Target Price
Financial Tech
Sell
120
Hexaware Tech
Buy
124
Gujarat Gas Q2 Net jumped 91% to Rs 101 crore which beat analyst expectations. The stock has formed a big green candle with a huge upmove and broke its strong resistance of 165 with ease. It has broken its 20 DMA of 189.5 with high volumes, and only buyers were available in NSE as it had hit upper circuit on Thursday due to its excellent results. RSI is still around 48 signifying that buying may not still be over.
STCI has crossed 20 DMA of 88.85 & 100 DMA of 104 amid high volumes. The three white soldiers candle formation on daily charts confirms the uptrend, and the stock had hit the upper circuit on Thursday session with only buyers on NSE. Government has al-
lowed 20 lac tons of wheat export and will be executed by state owned entities viz; STC/MMTC etc. Companies which are exporting will remain insulated from rupee depreciation against US dollars. It is expected to post strong Q1 results on Aug 13. The further steps taken by RBI for strengthening of rupee by tightening liquidity will bring about correction in IT stocks which have rallied to much higher levels in past couple weeks. A formation of Doji in Wipro signifies weakening of the uptrend. If the stock closes in red on Monday, it would signify a reverse in the trend with the correction coming to the tune of 30-40 Rs i.e Rs 400-410, as it will get immediate support at 400 levels.
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
InFINeeti Team Aakanksha Hajela | Bhushan Kanathe| Kunal Maheshwari| Vaibhav Garg| Md. Umair Ansari