Commodity research report 11 july 2016 ways2capital

Page 1


✍ MCX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

29 JUL 2016

115.60

114.15

112.70

112

111.30

110.55

109.80

108.40

106.90

COPPER

31 AUG 2016

331.30

327.10

323

320.40

318.80

316.20

314.70

310.50

306.40

CRUDE OIL

19 JUL 2016

3303

3221

3139

3099

3057

3017

2975

2893

2811

GOLD

05AUG 2016

33340

32776

32212

31965

31648

31401

31084

30520

29956

LEAD

29 JUL 2016

129.65

127.15

124.65

123.15

122.15

120.65

119.65

117.15

114.65

NATURALGAS

26 JUL 2016

201.90

197.30

192.70

190.50

188.10

185.90

183.50

178.90

174.30

NICKEL

29 JUL 2016

714.50

696.60

678.70

671.10

660.80

653.20

642.90

625

607.10

SILVER

05 JUL 2016

52249

50491

48733

48110

46975

46352

45217

43459

41701

ZINC

29 JUL 2016

155.65

151.80

147.95

146.15

144.10

142.30

140.25

136.40

132.55

✍ MCX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

29 JUL 2016

118.20

115.90

113.60

112.40

111.30

110.10

109

106.70

104.40

COPPER

31 AUG 2016

383.60

363.75

343.90

330.85

324.05

311

304.20

284.35

264.50

CRUDE OIL

19 JUL 2016

4053

3746

3439

3249

3132

2942

2825

2518

2211

GOLD

05AUG 2016

35207

34083

32959

32339

31835

31215

30711

29587

28463

LEAD

29 JUL 2016

140.50

134.75

129

125.30

123.20

119.60

117.50

111.75

106

NATURALGAS

26 JUL 2016

236.20

220.80

205.40

196.80

190

181.40

174.60

159.20

143.80

NICKEL

29 JUL 2016

824.80

773.80

722.80

693.20

671.80

642.20

620.80

569.80

518.80

SILVER

05 JUL 2016

56695

53603

50511

48999

47419

45907

44327

41235

38143

ZINC

29 JUL 2016

152.80

149.60

146.35

145.10

143.10

141.90

139.85

136.60

133.35

Monday, 11 July 2016


WEEKLY MCX CALL SELL NATURAL GAS JUL BELOW 185 TGT 178 SL 192 SELL GOLD AUG BELOW 31600 TGT 31300 SL 31900

PREVIOUS WEEK CALL SELL NATURAL GAS JUL BELOW 189 TGT 183 SL 195 - TGT ACHEIVED.

✍ FOREX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

USDINR

27 JUL 2016

68.15

67.95

67.75

67.65

67.55

67.45

67.35

67.15

66.95

EURINR

27 JUL 2016

75.90

75.50

75.15

74.95

74.80

74.55

74.40

74.05

73.70

GBPINR

27 JUL 2016

88.90 88.50

88.10

87.90

87.65

87.45

87.20

86.80

86.40

JPYINR

27 JUL 2016

68.30

67.55

67.35

67.15

67

66.80

66.45

66.05

67.90

✍ FOREX WEEKLY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

USDINR

27 JUL 2016

69.1 5

68.60

68.10

67.80

67.60

67.30

67.10

66.60

66.10

EURINR

27 JUL 2016

78

77

76

75.35

75

74.35

74

73

72

GBPINR

27 JUL 2016

96.1 0

93.55

90.95

89.30

88.35

86.75

85.80

83.20

80.60

JPYINR

27 JUL 2016

72.0 5

70.25

68.50

67.80

66.70

66.05

64.90

63.15

61.35

WEEKLY FOREX CALL BUY GBPINR JUL ABOVE 88 TGT 89 SL 87 BUY EURINR JUL ABOVE 74.70 TGT 75.20 SL 74.20 PREVIOUS WEEK CALL BUY JPYINR JUL ABOVE 66.32 TGT 67.12 SL 66.02 - TGT ACHEIVED.


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 OCT 2016

643

639

635

633

631

629

627

623

619

SYBEANIDR

20 OCT 2016

3925

3868

3811

3777

3754

3720

3697

3640

3583

RMSEED

19 AUG 2016

4995

4935

4875

4850

4815

4790

4755

4695

4635

JEERAUNJHA

19 AUG 2016

20290

19775

19260

19070

18745

18555

18230

17715

17200

TMC

19 AUG 2016

8180

8156

8122

8080

8042

8010

7980

7948

7924

GUARSEED

20 OCT 2016

3682

3657

3620

3590

3562

3547

3522

3498

3477

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 JUL 2016

713

688

663

647

638

622

613

588

563

SYBEANIDR

20 OCT 2016

4392

4195

3998

3871

3801

3674

3604

3407

3210

RMSEED

19 AUG 2016

5355

5187

5019

4922

4851

4754

4683

4515

4347

JEERAUNJHA

19 AUG 2016

22330

21050

19770

19325

18490

18045

17210

15930

14650

TMC

19 AUG 2016

8230

8198

8158

8102

8038

7978

7934

7896

7864

GUARSEED

20 OCT 2016

3733

3688

3649

3612

3565

3521

3478

3444

3402

WEEKLY NCDEX CALL BUY MAIZERABI AUG ABOVE 1611 TGT 1700 SL 1524 BUY COCUDAKL AUG ABOVE 2625 TGT 2728 SL 2519 PREIOUS WEEEK CALL SELL RM SEED JUL BELOW 4729 TGT 4648 SL 4811 - NOT EXECUTED.


MCX - WEEKLY NEWS LETTERS ✍ GLOBAL UPDATE

 U.S. drillers this week added oil rigs for a fifth week in six, according to a closely followed report Friday, prompting analysts to predict the rig count has bottomed and production will start to edge up early next year.

 U.S. job growth surged in June as manufacturers and other employers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wages suggested the Federal Reserve will probably not raise interest rates soon. Nonfarm payrolls increased by 287,000 jobs last month, the largest gain since last October, the Labor Department said on Friday. May payrolls were revised sharply down to show them rising 11,000 rather than the previously reported 38,000.

 The U.S. created 287,000 jobs in June, massively topping analyst expectations. The national unemployment rate, meanwhile, rose slightly more than expected in June, to 4.9 percent, according to data released Friday by the Bureau of Labor Statistics. Jobs watchers had been expecting Friday's jobs report to show a substantial rebound from May's unexpectedly weak growth, but the June number easily topped expectations. Economists surveyed by Reuters said they were, on average, expecting nonfarm payrolls to show growth of 175,000 for June, and the unemployment rate to rise to 4.8 percent.

 Bank of Japan Governor Haruhiko Kuroda said the central bank is ready to expand monetary stimulus further if needed to achieve its 2 percent inflation target, but made no mention of the Brexit vote that has spread turmoil in financial markets. Kuroda maintained the central bank's optimistic view on the economy, signalling his confidence over Japan's recovery prospects. "Japan's economy is expected to expand moderately as a trend," Kuroda said in a speech delivered at a quarterly meeting of the central bank's regional branch managers on Thursday.

✍ BULLION Gold prices rose by 0.8 percent to close at Rs.31719 per 10 gms last week..Gold slipped sharply on Friday after stronger than expected U.S. payrolls data for June but rebounded quickly, underpinned by concerns over the outlook for financial markets following Britain's Brexit vote. Gold hit a low of $1,335.66 an ounce in the wake of data showing that U.S. non-farm payrolls increased by 287,000 jobs last month, the largest gain since October. That sent the dollar to a two-week high against the euro and reignited talk that the U.S. Federal Reserve could lift interest rates this year. Traders had awaited the payrolls data for clues on U.S. monetary policy. Fed futures contracts, which suggested before the jobs report that traders saw only a 19 percent chance of a U.S. rate hike by December, now suggest a higher chance. Lower rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion while weighing on the dollar, in which it is priced. SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell by a little more than four


tonnes on Thursday to 978.29 tonnes, having posted its biggest daily inflow in six years on Tuesday. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, posted the biggest one-day surge in its holdings in more than six years on Tuesday. They jumped 28.8 tonnes to 982.72 tonnes, their highest since June 2013. The minutes of the US Federal Reserve released stated that the uncertainty over the so called Brexit will limit any further move by the central bank about rate hike.

� ENERGY Oil prices declined by 6.5 percent to close at Rs.3059 per barrel.Oil broke support levels after the Energy Information Administration (EIA) said crude stockpiles fell 2.2 million barrels for the week to July 1, just below a 2.3-million barrel decline forecast by analysts in a Reuters poll. While the EIA reported a seventh weekly decline in crude stocks, the figure it gave was far less than a 6.7 million-barrel draw cited by trade group the American Petroleum Institute in preliminary data issued late Wednesday.The oil market initially rose about 1 percent or more after the U.S. economy posted the largest job gains in eight months in June and on worries about fresh militant attacks on Nigerian oil infrastructure. Oversupply concerns, however, resurfaced with data showing the U.S. oil rig count rose by 10 this week as drillers added rigs for a fifth week in six as analysts to predict the near two-year slump in drilling has bottomed and production will start to edge up early next year. Both benchmarks were down nearly 8 percent for the week - the largest weekly slide for Brent since January and the biggest weekly drop for WTI since February. Crude futures remain some 75 percent above 12-year lows of $27 for Brent and $26 for WTI hit in the first quarter. But the market has gyrated since hitting above $50 as a glut of refined products replaced worries about crude oversupply that caused a near two-year long tumble earlier. Futures hit two-month lows on Thursday, with WTI breaking below key support of $45.83 after weekly drawdowns in U.S crude looked inadequate to assuage investor concerns. Natural gas futures fell for the first week in seven despite a small gain on Friday on forecasts for hotter-than-normal weather to persist through at least late July. After soaring 45 percent over the prior six weeks on the summer heat which began in early June, gas futures lost 6 percent in the July Fourth holiday-shortened week as traders took profits on Tuesday. With the hottest weather of the year expected in midJuly, some traders said futures could climb over $3 in coming weeks. Others, however, noted the heat was already priced in and predicted the frontmonth could fall to $2.50 on the first signs of cooler temperatures. In early estimates, analysts forecast utilities added 64 billion cubic feet of gas into storage during the week ended July 8. That compared with builds of 39 bcf in the prior week, 95 bcf a year earlier and a five-year average of 77 bcf.

� BASE METAL Copper prices traded lower by 4.6 percent last week to close at Rs.317.8 per kg.Copper prices plunged the most by 4.1 percent last week to close at $4710.5/tonne as Non-farm payrolls increased by 287,000 jobs last month, that's its biggest gain since last October, and above forecasts of 175,000. Earlier, private processing firm ADP showed U.S. Payroll said nonfarm private employment rose 172,000 last month. Also, investors were a cautious after an influx of inventories into warehouses. Data showed an inflow of 23,625 tonnes of metal into London Metal Exchange-approved warehouses on Tuesday, the latest arrival into depots that have seen a 45 percent surge since June 1. However, sharp losses were restricted as investors were keenly awaiting host of stimulus measures from China and other major economies after weak manufacturing data from the biggest consumer. The market still needed more clarity, however, about global economic growth and metals demand, some which would come when economic figures from top metals consumer China are released next week, he added. A weaker dollar makes dollar-priced commodities cheaper for buyers using other currencies. LME nickel climbed


1.4 percent to end at $9,890 a tonne, recovering from a session low of $9,525 after the Philippines ordered the suspension of operations at two nickel mines in an environmental crackdown. The Philippines is the biggest supplier of nickel ore to China. Peter Peng, an analyst at CRU consultancy in Beijing, said the two mines are relatively small and unlikely to have any immediate impact on shipments to China.

NCDEX - WEEKLY NEWS LETTERS  Monsoon rainfall last week was 35% above what is touted to be normal, helping kharif sowing to exceed last year’s level in case of rice, pulses and sugarcane, although the overall sowing level was still 6% lower than a year ago, reports Sandip Das in New Delhi. Rains during the current season, which remained below normal until over a week ago, turned slightly above normal: As on July 7, the rains were 1% above the benchmark long-period average. This has also improved water levels in 91 large reservoirs, although the storage continue to be significantly lower than this time last year. Analysts say that the sowing of kharif crops like paddy, pulses and oilseeds have picked up pace because of widespread rainfall. According to ministry of agriculture data released on Friday, the sowing was lagging by 23% last week. 

The increase in intensity and coverage of rainfall over the past weekend has resulted into a sharp decline in the deficit so far this monsoon season. Rain forecast to cover the remaining uncovered parts of Rajasthan and Gujarat in 48 hours.Data compiled by the India Meteorological Department (IMD) showed the rain deficit had narrowed to six per cent of the LongPeriod Average (LPA) for the period between June 1 and July 3, from 11 per cent till last week. LPA is the average rainfall for the past 50 years. Both the northwest and southern Peninsula have received excess rain, while east and northeast continue to face a sharp decline. About 70 per cent of cultivable land in India is sown for the kharif crop with the onset of seasonal rain. Most cultivable land remains rainfed. Paddy, maize, most varieties of oilseeds and some varieties of pulses are grown with the help of monsoon rain. It also sets the trend for rabi sowing, for which planting starts in SeptemberOctober, depending on soil moisture after kharif harvest. The early deficit of monsoon rain affected sowing. Data compiled by the agriculture ministry showed a 23 per cent decline in the area under various agricultural crops so far this season. As of July 1, the actual acreage coverage area under kharif sowing stood at 21.59 million hectare this year, compared to 27.93 million ha the same day last year.

 Agri-commodities are not behind in keeping Indian exports low. Rather they have fallen to a five-year low in 2015-16 according to data provided by Agricultural and Processed Food Products Export Development Authority (APEDA).From a pick of $42.84 billion in FY14, agri exports are falling but the fall was sharper with 17% decline in FY16 to $32.09 billion and except sugar and couple of other small items in top ten of the agri export basket, all commodities exports declined. In FY13 Guar gum was top revenue generating export item in agri basket with $3.9 billion is now not even in top 10 list. Marine products, buffalo meat, rice including basmati have been top contributors in exports basket and all have seen a significant fall in exports.Key reason for fall in buffalo meat exports was sharp fall in Brazil currency leading to their produce much more competitive than India. For basmati rice, Iran was virtually absent for almost a year and rice prices were also not attractive.The agriculture exports from India have been falling mainly in value terms. As the global prices of commodities have been lowering, even the increase in volume of exports of agri commodities has not fetched us higher incomes. So the exports in value terms have dwindled. At the same time, the domestic prices of three major agri commodities in India; wheat, soya meal and maize have remained higher than international market in the last 18 months. This has also restricted the prospects of Indian commodity exports in


the international market and we are out of market."

 Pulse production could increase by 18 per cent to 20 million tonnes this crop year on better monsoon which would help bring down retail prices. It has been conveyed to the finance minister that this year dal production would be 20 million tonnes (mt). This will help bring down the market prices," Paswan told reporters here when asked about the likely output in 2016-17 crop year (July-June). Pulses output declined to 17.15 mt in the 2014-15 crop year, from 19 mt in the previous year, due to drought. In 2015-16, pulses output further dipped to 17.06 mt on poor monsoon. Annual domestic demand is pegged at 23.5 million tonnes.Pulses output declined to 17.15 mt in the 2014-15 crop year, from 19 mt in the previous year, due to drought. In 2015-16, pulses output further dipped to 17.06 mt on poor monsoon. Annual domestic demand is pegged at 23.5 million tonnes. Highlighting other steps, tur (arhar) dal will be imported on a government-to-government basis from Mozambique on a long-term basis. Imports will happen at minimum support price plus transportation cost. The government is in talks with Myanmar for urad imports, but they have not yet agreed to governmentto-government imports. In retail markets, rates of chana, tur, urad, moong and masoor are ruling as high as Rs 110, Rs 162, Rs 198, Rs 130 and Rs 107 per kg, respectively, according to government data.

✍ TURMERIC The drought condition in 2015, while raising concerns on lower production of turmeric, caused its prices to trade higher in the growing season of 2015 (kharif crop). Excessive rains prior to harvesting in Andhra Pradesh and Tamil Nadu added fuel to the fears of lower production. Turmeric futures for May’16 delivery touched a fiveyear high at 11,152 per quintal in late November’15 and the bullish trend continued till the first half of January 2016. But prices started to decline from the second half of January, plunging to 8,104/Q towards January end. Then, between February and May, they fluctuated between a low of 8,000/Q in May amidst arrival pressure and a high of 9,480/Q supported by steady demand. Demand for good quality turmeric from industrial buyers and stockists/traders limited the drop in prices from arrival pressure. India accounts for four-fifths of the world’s turmeric production and exports. Andhra Pradesh and Telangana, Maharashtra and Tamil Nadu are the key turmeric producing States, contributing over 80 per cent of India’s total production. India's total turmeric exports in 2015-16 (Apr-Mar) up 3% to 88,500 tonnes, against 86,000 tonnes a year ago. Value of turmeric exports, rose 24% to 92,165 lakh rupees, from 74,435 lakh rupees a year ago, according to data from Spices Board of India. However, exports are higher than the board's target of 80,000 tonnes. •As per the recent report from Telangana Agriculture Department, turmeric sowing in the state as of 06th July 2016 was around 21028 hectares as compared to last year same period 25516 hectares, Normal in season 48083 hectares and normal as on date 21416 tonnes. Total stocks of turmeric in NCDEX accredited warehouses as on 06th July 2016 declined from previous day to 5622 tonnes.

✍ SOYABEAN & REFSOYAOIL The U.S. Agriculture Department said on Friday morning that weekly old-crop export sales of soybeans totaled a bigger-than-expected 637,300 tonnes. New-crop export sales of 585,700 tonnes were in line with market forecasts. As per USDA report, soybean crop is 70 percent in good to excellent condition, down from 72 percent a week ago but well up from 63 percent a year ago Soybean Oct’16 contract closed 1.58% down to settle at Rs. 3,742 per quintal. There are reports of lesser sowing


area but may not affect the yield in Madhya Pradesh. As on 1st July, soybean sowing was recorded at 18.9 lakh hectares, down 48.9% from a year ago as per the government data. Sowing progress in leading soybean producers like Madhya Pradesh, Maharashtra, and Rajasthan, was down by 42%, 76%, and 59%, respectively compared to last year. Data compiled by the Soybean Processors’ Association of India (Sopa) showed output at 7mt this time, against 10.4 mt the previous year, a decline of 27%. Ref Soy oil Aug’16 expiry closed 0.75% down to settle at Rs. 632.85/ 10 kg. Refine soyoil continue its range bound to lower movement since last week due to steady demand in the physical market, Prices have been under pressure due to sufficient supplies in the physical market and weak physical demand, which is indicated by decline in edible oil imports last month. Moreover, sufficient stock in the physical market on report of higher imports may weigh on prices at higher levels.

✍ JEERA Jeera aug contract closed 1.21% higher to close at Rs 18,315 per quintal.Arrivals were pegged at 2,000-2,500 bags (1 bag = 55 kg), down from 3,000 bags on Wednesday. •Total stocks of jeera in NCDEX accredited warehouses as on 06th July 2016 increased from previous day to 3542 tonnes and 660 tonnes are in process. •As per the recent report from Spices Board of India, India’s total exports of jeera fell the most, declining 37% on year to 98,700 tonnes, and also lower than the board's target of 100,000 tonnes. •According to trade sources, India exported about 45,000 tonnes jeera in Apr-Jun 2016. And during 20th June to 26th June, jeera export reports 2266 tonnes as compared to last week 1999 tonnes. According to Dept of Commerce data, the exports of Jeera in the first month of 2016-17 increased by more than 50.7% at 13, 525 tonnes compared to last year same month. Moreover, export of jeera during 2015-16 is 93,078 tonnes compared to 1.56 lt exported last year same period. Devaluation of currencies in the buying countries and appreciation of Indian currency combined with high prices have led to a steep decline in jeera exports in 201516. As per third advance estimate of Gujarat State for 2015-16, production is pegged at 2.13 lt higher by about 7% forecasted in revised fourth advance estimate of 1.97 lt. In 2013-14, production was 3.46 lt. Industrial buyers have already sourced sufficient quantity for the domestic requirements but the export demand may pick up as prices have been going down since last one month. In the next few months, the prices will depend on export demand.

✍ RM SEED The European Commission on Friday cut its rapeseed harvest estimate by 5.5% to 20.8 million tonnes from 22 million, putting the crop at a four-year low. Yields were affected among others by the cold spell in April in France, the pressure of disease following the excessive rainfalls of May-June in continental Western Europe and dry conditions in northern-eastern Germany. Lower sown area is reported in Canada, Ukraine, the EU, and China. Canada's canola may be on tight supplies as bad weather may cause concern over production in coming season. Mustard seed futures closed lower on profit booking and good progress in monsoon pressurized oilseed market. The July contract ended 0.54% down to settle at Rs. 4,829 per quintal. Market participants are expecting good physical demand in coming weeks. The mustard prices are moving in range on anticipation of limited supplies during the monsoon and good demand for oil from industrial buyers.


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