DEMAT Account - How to close it?

Loan Closure :Points to Remember

Knowing how to close your loan cleanly is as important as smart borrowing.

In fact, more so, for, till you do this, you will not get unfettered ownership of the house or the car that you bought with the loan. If you had borrowed to meet an expense, fully repaying a loan will take the debt weight off your shoulders. Here are the points to remember to ensure that there are no residual hassles after you have closed your loan

Loans Closure:

Loan PrepaymentIn case you want to foreclose your loan, you need to inform the bank about the date of prepayment through a letter. It is better to give a month’s notice to the bank, says Kamlesh Rao, head (mortgage), Kotak Mahindra Bank.

This gives the bank the time to calculate the exact outstanding interest, principal and the penalty that has to be paid. Banks usually let you know in a day or so about these liabilities. Remember to take a letter from the bank regarding the exact amount that needs to be paid and the break-up of the amount.

Also, ask for the acknowledgement of the cheque through which you prepay the loan.You will get your documents back only after the cheque gets cleared. This usually takes 15 days. Checking the documents is crucial as any discrepancy that comes up later would be difficult to trace. So, compare the originals with the duplicate copies you had kept. Ensure that every sheet is intact.

Home loan closure:

Request for an acknowledgement of the cheque through which you pay the last EMI of your home loan. The bank will return your documents once the cheque gets cleared.If your home loan is from a cooperative bank and you are paying your last EMI in cash, you will get your documents right away.

Car loan closure:

In case of car loans, the closure procedure is similar to that of home loans. However, the bank has to send out certain documents to the RTO and the insurance company.Obtaining a no-dues certificate addressed to the RTO is crucial.“You are also required to fill a form for removal of the financer’s endorsement and submit it to the RTO,” says apnaloan.com CEO Harshvardhan Roongta. The endorsement basically bars the customer from selling the car.The bank would also need to prepare a similar letter addressing the insurance company.After obtaining these three letters, you need to submit them to the respective authorities. Remember, that you need to take your RC and insurance papers while submitting the removal of endorsement form with the RTO.

Personal loan closure:

The procedures for closing a personal loan are similar to that followed while closing a home loan.Credit Card ClosureUndisputed casePay all dues, including all transactions not yet charged to the account, well in time.You can simply call up the call center or send a letter saying you want to cancel the card.Destroy the card by cutting it and sending it to the bank along with the letter.

The bank usually reconfirms the cancellation once it gets the intimation from the customer, says Sachin Khandelwal, head (credit cards), ICICI Bank. Some people insist that sending a letter is better as it’s written proof that the cancellation is sought.Getting an acknowledgement is crucial.

Never put an undestroyed card in any drop box of the bank. You can hand it over to bank officials if they give you an immediate acknowledgement.Always keep a copy of all correspondences with the bank and with any other official of the bank. Disputed caseIn cases where the billing has not been cleared or there are other disputes, it’s best to first settle the issue with the bank.

If you have a savings account with the same bank and haven't settled the issue, the banks have a right to adjust the credit card billing through your savings account balance. The bank will give you a notice before doing so.

Always inform the bank before destroying the card.In case of unwanted delivery of card, inform the bank immediately in writing and destroy the card according to instructions received from the bank.Documents to be collected from the bankA letter specifying that the loan has been closed.

This usually includes a no-dues certificate. This document is very important whenever you are go to sell your home or your car.An account statement for the entire loan course. This will help you keep a record of all the payments you have made and income tax benefits availed, if any.

Obtain a letter specifying your payment track record. This would help in case you take any other loan in future.

Get your title documents of your car or home, or any other security that you may have deposited with the bank while taking the loan, apart from other agreement documents.

Cashing on Real Boom - ICICI Pru and ING Vysya Realty Funds

Real estate investment trusts (REIT)—funds that can invest retail investors’ funds directly in real estate-may be just around the horizon as hinted recently by Securities and Exchange Board of India (Sebi) chairman M. Damodaran. However, mutual funds (MF) have already found other ways to tap the booming sector. Two new schemes that invest in real estate securities were launched recently.

Go global:

ING Global Real Estate Fund (IGREF) is a fund-of-funds (FoF) scheme that will invest at least 65 per cent of its corpus in ING Global Real Estate Securities Fund (IGRESF)—ING’s international MF scheme that invests in real estate securities and REITs across the globe. It can invest the rest in other overseas MF schemes.

IGRESF invests at least 80 per cent of its assets in equity shares of companies that derive at least 50 per cent of their income from the real estate market, either through ownership or management. It can also invest up to 20 per cent of its corpus in global REITs. Being an FoF, it will charge you a maximum of 0.75 per cent as expenses.

The underlying fund’s expenses--these will also be passed on to you and thus impact your NAV—would be approximately 1.8 per cent. If IGREF invests in more schemes, your expense ratio would go up to that extent.

But, what about the troubled real estate sector in the US, especially the sub-prime housing segment? “Presently, IGRESF does not have any exposure to such risky assets,” says Paras Adenwalla, chief investment officer, ING India MF. IGRESF has done well and has outperformed its benchmark index across time periods.

Or stay local:

ICICI Prudential Real Estate Securities Fund (IRESF) is a three-year closed-end, debt-oriented hybrid fund. It aims at investing at least 51 per cent of its assets in debt securities issued by companies that would benefit from the real estate sector, such as residential and commercial developers as well as retail and hospitality sectors.

IRESF will aim to buy and hold such debt securities till maturity as they are typically illiquid and high yielding. “At present, such securities would yield around 12-14 per cent,” says Nilesh Shah, chief investment officer, ICICI Prudential MF. The rest would be deployed in equity shares of companies that would benefit from the real estate boom.

But why has the MF launched a debt-oriented scheme instead of an equity one? Shah claims that the current yields of real estate debt scrips offer a better yield than what equity shares of these companies would yield in three years. And although the credit risk of such scrips is higher, the MF says it will invest in those that come with a good track record.

Premature withdrawals are allowed once in a quarter and attract a 3 per cent exit load over and above your share of the proportionate unamortised initial issue expenses as per Sebi rules. This is because IRESF is a closed-end fund.

Take your pick.

IT, telecom stocks lead 170-points Sensex surge

Data showing slide in inflation helped the market end the choppy session on a firm note but fall in index heavyweight Reliance Industries capped the rise. Infosys Technologies and ICICI Bank spurted. IT, banking and realty stocks were in demand. Market breadth moved between positive and negative. 15 out of 30 stocks from the Sensex pack were in the red. European markets, which opened after Indian market, were firm in early trade.

The government today warned that increased capital inflows could endanger the growth process, although the economy is buoyant in tune with the trend witnessed since the last four years. "Increased capital inflows can impact macro-economic aggregates through the exchange rate, trade and monetary variables," said a half-year economic review tabled by Finance Minister P Chidambaram in Parliament today.

The review said increased inflows have been witnessed especially in the first half of current financial year 2007/08, while the economy's capacity to absorb it has not risen at the same pace, as indicated by the level of current account deficit. "There are short term challenges of managing inflows without endangering the growth and price stability," the review said.

The wholesale price index rose 3.01% in 12 months to 24 November 2007, below the previous week's rise of 3.21%, government data released today, 7 December 2007, afternoon showed.

The annual inflation rate was 5.55% during the corresponding week of the previous year.

Some Asian markets edged lower after initial rise that was triggered by easing of US recession worries after US President George W. Bush, on Thursday, 6 December 2007, unveiled plans aimed at stemming US home loan foreclosures.

The 30-share BSE Sensex rose 170.13 points or 0.86% to 19,966. Sensex hit a low of 19,706.43 in afternoon trade. At day’s low it shed 89.44 or 0.45%. Sensex had hit a high of 20,094.56 in early trade. At day's high, Sensex had gained 298.69 points.

Sensex had hit all-time high of 20,238.16 on 30 October 2007 but was not able to sustain at higher levels and it is yet to close above the physcological 20,000 level. The Sensex’s all time closing high is 19,977.67 on 29 October 2007.

The broader S&P CNX Nifty rose 19.60 points or 0.33% at 5974.30. It touched a high of 6042.10 in early trade today, which is a new record high. Nifty had hit an all-time high of 6027.05 on Thursday, 6 December 2007.

The BSE Mid-Cap index fell 0.13% to 9,021.96. The BSE Small-Cap index was down 0.16% to 11,342.27. Both these indices underperformed the Sensex.

Market breadth was positive. On BSE, 1460 stocks advanced, 1406 stocks declined and 43 stocks remained unchanged.

BSE clocked a turnover of Rs 8598 crore compared to yesterday (6 December 2007)’s turnover of Rs 9,762.59.

Nifty December 2007 futures were at 5993, a premium of 18.70 points as compared to spot closing of 5974.30.

NSE’s futures & options (F&O) segment turnover was Rs 61359.41 crore, which was lower than Rs 66472.74 crore on Thursday, 6 December 2007

India’s largest private sector firm by market capitalization & oil refiner Reliance Industries slipped 1.14% to Rs 2841.65, off day’s low of Rs 2915.

The BSE IT index rose 3.69% to 4,424.57. It outperformed the Sensex. India’s second largest software exporter by sales Infosys Technologies soared 5.09% to Rs 1718.15.

Tech Mahindra soared 9.93% to Rs 1224.50, I-Flex Solutions gained 5.78% to Rs 1614, TCS rose 2.62% to Rs 1061.25, Wipro gained 1.85% to Rs 502.55 and Satyam Computers rose 1.59% to Rs 443.75.

Telecom stocks edged higher. India’s largest listed cellular service provider by market share Bharti Airtel jumped 2.10% to Rs 959.65.

India’s second largest listed telecom service provider by sales Reliance Communications rose 2.17% to Rs 734.30 on reports that Department of Telecommunications (DoT) on Thursday, 6 December 2007 awarded a pan-India GSM licence to the company.

The BSE Bankex rose 2.43% to 11,377.96. It outperformed the Sensex. India’s largest private sector bank by assets ICICI Bank jumped 4.02% to Rs 1247.50.

Centurion Bank of Punjab soared 14.14% to Rs 55.70, Oriental Bank of Commerce rose 2.31% to Rs 276.80, HDFC Bank rose 2.09% to Rs 1721.25 and State Bank of India rose 1.67% to Rs 2436.

The BSE Realty index rose 2.02% to 11,576.63. It outperformed the Sensex. DLF rose 4.13% to Rs 1011.35, Mahindra Lifespace Developers soared 8.075 to Rs 797.80, Peninsula land jumped 6% to Rs 150.15, Parsvnath Developers gained 3.95% to Rs 396.95, Indiabulls Real Estate rose 3.20% to Rs 687.55, and Omaxe rose 2.44% to Rs 493.80. However, Unitech fell 0.51% to Rs 428.95, and Sobha Developers declined 1.48% to Rs 895.65.

The BSE Metal index fell 0.97% to 18,738.08. It underperformed the Sensex. Hindalco Industries fell 2.51% to Rs 188.15, Jindal Stainless declined 2.35% to Rs 226.65, Hindustan Zinc gave away 1.99% to Rs 806.05, Steel Authority of India fell 1.84% to Rs 274.20, and Tata Steel shed 1.63% to Rs 833.40.

The BSE Auto index fell 0.85% to 5,651.30. It underperformed the Sensex. MICO slumped 4.06% to Rs 4954.20, Amtek Auto declined 3.70% to Rs 443, MRF fell 3.49% to Rs 7202.55, Hindustan Motors shed 2.86% to Rs 47.60, and Tata Motors fell 0.56% to Rs 771.10. However, Maruti Suzuki was steady at Rs 1042.25.

Auto components maker Bharat Bharat Forge jumped 2.43% to Rs 351.60 on reports that the company is joining hands with NTPC to set up a new greenfield manufacturing facility in the country. The joint venture will look at manufacturing power plant equipment, including turbines, components and accessories, through technological tie-ups with other manufacturers. NTPC was up 0.27% to Rs 245.65.

Automobile tyre maker CEAT rose 2.83% to Rs 218.05 on reports that company plans to invest more than Rs 1000 crore to expand capacity and is hopefull of selling surplus land in Mumbai by March 2008.

United Breweries (Holdings), the flagship firm of UB Group, fell 3.36% to Rs 1085.90 after Kingfisher Airlines posted a net loss of Rs 577 crore in the financial year ended March 2007. The loss was on revenue of Rs 1,553 crore earned during the year.

Commercial vehicles maker Eicher Motors soared 8.22% to Rs 545.45 on reports that Swedish auto major Volvo is close to a joint venture with the company. Eicher Motors is expected to spin off its commercial vehicle unit into the venture. The valuation of the venture would be around $1 billion after the merger.

India’s second largest iron castings manufacturer by sales Electrosteel Castings fell 2.18% to Rs 80.95 on reports that the company is planning an expansion, for which it may raise $25 million through private placement route.

Textile firm Modern India was locked at upper limit of 5% at Rs 952.95 after the company said on Friday, 7 December 2007 its board would meet on 17 December 2007 to consider stock split.
Solvent extraction firm Sanwaria Agro Oils rose 1.23% to Rs 111.45 after its board approved 2-for-1 stock split plan.

Infrastructure development firm GMR Infrastructure fell 6.05% to Rs 242.20 after National Stock Exchange curbed fresh positions in the derivatives contracts of the firm.
Speciality chemicals maker Jayant Agro Organics jumped 2.30% to Rs 104.50 after Japan's Mitsui & Company and Mitsui & Co (Asia Pacific) formed a joint venture to take a 24% stake in its speciality chemicals unit.

Ispat Industries clocked the highest turnover of Rs 259.06 crore on BSE. Reliance Petroleum (Rs 236.80 crore), Reliance Natural Resources (Rs 221.49 crore), IFCI (Rs 182.74 crore) and Reliance Industries (Rs 182.29 crore), were the other turnover toppers on BSE in that order.
Ispat Industries registered the highest volumes of 3.69 crore shares on BSE. Centurion Bank pf Punjab (2.51 crore shares), IFCI (1.79 crore shares), Tata Teleservices (Rs 1.59 crore shares) and Reliance Natural Resources (1.25 crore shares), were the other volume toppers on BSE in that order.

In Europe, key indices in UK, France, and Germany were up between 0.62% to 1.17%.
Asian markets were mixed today, 7 December 2007. Key indices in China, Japan, Singapore and Taiwan were up 0.15% to 1.13%. However, Key indices in Hong Kong and South Korea were down between 0.97% to 2.42%.

US markets surged on Thursday, 6 December 2007 on optimism that a plan announced by President George W Bush to stem US home foreclosures would keep the economy from sliding into a recession. The Dow Jones industrial average surged 174.93 points, or 1.30%, to end at 13,619.89. The Standard & Poor's 500 Index .SPX climbed 22.33 points, or 1.50%, to 1,507.34.

The Nasdaq Composite Index soared 42.67 points, or 1.60%, to 2,709.03.

The Bank of England lowered its key interest rate on Thursday, 6 December 2007 citing signs of slowing growth. The Monetary Policy Committee, or MPC, voted to reduce the official bank rate paid on commercial bank reserves by 0.25 basis points to 5.5%. However the European Central Bank Monetary Policy Committee decided to keep interest rates on hold at 4% after their monthly policy meeting yesterday, 6 December 2007.

Crude oil was little changed in New York after rising the most in almost three weeks as U.S. inventories dropped as refiners prepared to meet heating demand. Crude oil for January delivery rose 3 cents to $90.26 a barrel on the New York Mercantile Exchange in Singapore. Brent crude oil for January settlement yesterday rose $1.69, or 1.9%, to settle at $90.18 a barrel on the London-based ICE Futures Europe exchange.

Sensex adds 58 points in volatile trade

Though the market ended in the green, it came off higher level as index heavyweight Reliance Industries slipped. Volatility on the bourses was high today. ICICI Bank edged higher. Cipla surged. Consumer durables stocks dwindled. Realty stocks were the star performers in today’s trade. Market breadth was strong. 18 out of 30 stocks from the Sensex pack were in green. European markets, which opened after Indian markets, were trading firm. Key Asian indices, except China, were in green.

The 30-share BSE Sensex rose 57.80 points or 0.29% to 19,795.87. Sensex hit a low of 19,716.57 in late trade. At day's low, Sensex had shed 21.50 points for the day. Sensex had hit a high of 20,064.31 in early trade. At day's high, Sensex had gained 326.24 points.

Sensex had hit all-time high of 20,238.16 on 30 October 2007 but was not able to sustain at higher levels and it is yet to close above the physcological 20,000 level. The Sensex’s all time closing high is 19,977.67 on 29 October 2007.

The broader S&P CNX Nifty rose 14.70 points or 0.25% to 5954.70.

The BSE Mid-Cap index fell 0.21% to 9,033.76. It underperformed the Sensex. The BSE Small-Cap index was up 0.79% to 11,360.73. It outperformed the Sensex.

Market breadth was strong. On BSE, 1805 stocks advanced, 1043 stocks declined and 39 stocks remained unchanged.

BSE clocked a turnover of Rs 9712 crore compared to yesterday (5 December 2007)’s turnover of Rs 9,410.33.

Nifty December 2007 futures were at 5984, a premium of 29.30 points as compared to spot closing of 5954.70.

NSE’s futures & options (F&O) segment turnover was Rs 66472.74 crore, which was higher than Rs 57522.12 crore on Wednesday, 5 December 2007

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries fell 0.97% to Rs 2874.55, off day’s high of Rs 2955. The company and Kuwait Petroleum (KPC), the national oil major of Kuwait, have reportedly begun the first round of discussions for scripting a mega joint collaboration across the oil and gas vertical. KPC is keen to rope in RIL as a partner in its upcoming projects in Kuwait in both refining and petrochemicals.

The BSE Realty index was up 3.59% to 11,347.36. It outperformed the Sensex. Sobha Developers gained 2.12% to Rs 909.15, DLF rose 1.71% to Rs 971.25 and Indiabulls Real Estate jumped 0.93% to Rs 666.25

Real estate developer Omaxe soared 12.20% to Rs 482.05. Omaxe today said a consortium comprising the company, GVK Power & Infrastructure and Nagarjuna Construction Company has put in a bid for development of 8-lane access controlled expressway project in Uttar Pradesh (UP).

The Rs 30,000 crore project named Ganga Expressway Project would be constructed on the banks of river Ganga to connect eastern and western UP.

India’s second largest realty firm by market capitalization Unitech soared 9.82% to Rs 431.15 on reports it may hive off its retail business i.e. the mall development business as a separate company.

The BSE Bankex rose 0.80% to 11,108.28. It outperformed the Sensex. India’s largest private sector bank by assets ICICI Bank rose 3.24% to Rs 1199.30.

Centurion Bank of Punjab jumped 7.73% to Rs 48.80, Canara Bank soared 3.25% to Rs 300, Oriental Bank of Commerce gained 0.99% to Rs 270.55 and State Bank of India rose 0.55% to Rs 2396.60.

Consumer durables stocks fell sharply. The BSE Consumer Durables index fell 2.95% to 6,042.74. It underperformed the Sensex. Videocon Industries slumped 6.73% to Rs 572, Gitanjali Gems fell 2.15% to Rs 446.10, Titan Industries declined 1.55% to Rs 1565.40, and Blue Star shed 1.16% to Rs 469.05.

The BSE IT index rose 0.83% to 4,267.15. It outperformed the Sensex. India’s second largest software exporter Infosys Technologies gained 1.97% to Rs 1634.90.
Patni Computers gained 1% to Rs 328.95, and TCS rose 0.25% to Rs 1034.20. However, Wipro fell 1.12% to Rs 493.40 and Satyam Computers declined 0.44% to Rs 436.80.

The BSE Power index was up 0.41% to 4,560.10. It outperformed the Sensex. Reliance Energy jumped 3.13% to Rs 1946.60, Gujarat Industries Power gained 1.67% to Rs 112.30, and NTPC rose 0.35% to Rs 245. Tata Power was steady at Rs 1311.05.

Power generation and supply firm GVK Power & Infrastructure surged 6.17% to Rs 840.90 after its board approved a 10-for-1 stock split.

Direct-to-home broadcast service provider Dish TV declined 0.32% to Rs 93.95, off day’s high of Rs 102.10 after the company said after market hours on Wednesday (5 December 2007) that Kishore Biyani’s Indivision Capital, the private equity arm of Future Capital, would buy 4.9% in in the company for Rs 250 crore.

Maharashtra Seamless (MSL), the flagship company of DP Jindal Group, rose 0.31% to Rs 581.70 after the company said it is acquiring a seamless pipes plant in Romania having a capacity of 2 lakh tonnes per annum.

Drug maker Glenmark Pharmaceuticals jumped 3.98% to Rs 503.80. The company reportedly plans to acquire a distribution and marketing company in Indonesia, in a bid to increase its foothold in Asia’s emerging markets.

Steel maker JSW Steel rose 3.31% to Rs 1166.85 after the company said on Wednesday, 5 December 2007, its crude steel production rose 16% in November 2007 over November 2006.
Apparel firm House of Pearl soared 5.60% to Rs 276.30 after it acquired UK fashion retailer FX Imports.

Essar Steel, part of the Essar Group, was locked at upper limit of 20% at Rs 71.10 following an order passed by Securities Appellate Tribunal prohibiting the firm from delisting.

Pharmaceutical packaging material maker Essar Steel fell 2.76% to Rs 1282, off day’s high of Rs 1398 after the company signed a deal to set up a Rs 88.40 crore clinical supplies unit in Wales.

Reliance Petroleum clocked highest turnover of Rs 529.63 crore on BSE. Ispat Industries (Rs 438.36 crore), Reliance Energy (Rs 322.51 crore), Reliance Natural Resources (Rs 273.25 crore) and Unitech (Rs 207.29 crore), were the others turnover toppers on BSE in that order.

Ispat Industries registered the highest volumes of 5.98 crore shares on BSE. Reliance Petroleum (2.29 crore shares), Tata Teleservices (2.25 crore shares), Chambal Fertilisers and Petrochemicals (1.84 crore shares) and IKF Technologies (1.82 crore shares), were the others volume toppers on BSE in that order.

In Europe, key indices in UK, France and Germany were up between 0.37% to 1.01%.

Asian markets climbed today, 6 December 2007. Key indices in Hong Kong, Singapore Ssouth Korea, Taiwan and Japan were up by between 0.20% to 1.70%. However, China’s Shanghai Composite fell 0.15%.

US markets surged on Wednesday, 5 December 2007, led by rally in large-cap tech and financial stocks. Data that showed that US companies added staff in November 2007 at the fastest pace in a year, and worker productivity rose at the strongest rate in four years in the third quarter, helped ease recession fears, which boosted the bourses. The Dow Jones industrial average jumped 196.23 points, or 1.48%, to 13,444.96. The S&P 500 index gained 22.22 points, or 1.52%, to 1,485.01, while the Nasdaq Composite index advanced 46.53 points, or 1.78%, to 2,666.36.

Oil prices fell for a third straight day in New York, hitting a six-week low, boosted by an unexpected surge in US stockpiles. Crude oil for January 2008 delivery dropped as much as 96 cents, or 1.1%, to $86.53 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

European Central Bank and Bank of England meet today, 6 December 2007, seperately to consider interest rate. The US Federal Reserve will meet on 11 December 2007 to consider interest rates. Fed is likely to reduce Fed funds rate by 25 basis points to 4.25% as the country's economy is slowing down and money markets are strained. It has already cut the Fed funds rate two times in the last three months.

Nifty strikes record closing high on firm global equities

After remaining range bound in afternoon trade, the market firmed up in late trade as European markets, which opened after Indian markets, started on a firm note. ICICI bank surged in late trade. Reliance Industries firmed up. Banking, oil & gas and realty stocks were in demand. IT stocks edged lower.
Buying continued in small-cap and mid-cap shares, which have been rising since the past few days. Market breadth was strong. 23 out of 30 stocks from the Sensex pack were in green. Asian markets, which opened before Indian markets, were in green.
The 30-share BSE Sensex rose 208.57 points or 1.07% to 19,738.07. Sensex hit a high of 19,790.92 in late trade. At day's high, Sensex had gained 261.42 points. Sensex hit a low of 19,560.68 in mid-morning trade. At day's low, Sensex had gained 31.18 points for the day.
The broader based S&P CNX Nifty gained 81.65 points or 1.39% to 5940, a record closing high. The previous record closing high of Nifty was 5,937.90 on 14 November 2007. Nifty had struck all-time high of 6011.95 on 1 November 2007. Sensex had hit all-time high of 20238.16 on 30 October 2007.
As per provisional data, FIIs bought shares worth a net Rs 480.18 crore today. Domestic funds sold shares worth a net Rs 159.71 crore today.
The BSE Mid-Cap index was up 1.67% to 9,052.83. The BSE Small-Cap index was up 2.88% to 11,271.96. Both the indices outperformed the Sensex.
Market breadth was strong. On BSE, 2164 stocks advanced, 687 stocks declined and 40 stocks remained unchanged.
BSE clocked a turnover of Rs 9340 crore compared to Tuesday (4 December 2007)'s Rs 9163 crore.
Nifty December 2007 futures were at 5980, a premium of 40 points as compared to spot closing of 5940.
NSE’s futures & options (F&O) segment turnover was Rs 57522.12 crore, which was higher than Rs 56330.05 crore on Tuesday, 4 December 2007
India’s largest private sector firm and oil refiner Reliance Industries rose 1.36% to Rs 2902.80, off day’s low of Rs 2863.
The BSE Bankex rose 2.07% to 11,020.60. It outperformed the Sensex. India’s largest private sector bank by assets ICICI Bank rose 1.86% to Rs 1161.65, off day’s low of Rs 1131.
Union Bank of India soared 5.32% to Rs 192.95, Canara Bank jumped 5.21% to Rs 290.55, Karnataka Bank gained 4.87% to Rs 222, State Bank of India rose 2.85% to Rs 2325 and HDFC Bank rose 1.61% to Rs 1730.
The BSE Capital Goods Index rose 1.13% to 20,403.26. It outperformed the Sensex. Alstom Projects gained 4.69% to Rs 1082.10, BEML gained 2.39% to Rs 1792.05, Larsen & Toubro rose 1.90% to Rs 4309.65 and Bharat Heavy Electricals rose 0.25% to Rs 2822.25.
The BSE Metal Index rose 0.93% to 19,044.22. It underperformed the Sensex. Jindal Saw jumped 5.61% to Rs 956.70, Hindalco Industries gained 2.81% to Rs 199.20, National Aluminium Company (Nalco) rose 2.39% to Rs 377.45, Steel Authority of India (Sail) rose 0.93% to Rs 287.55. Sterlite Industries fell 0.20% to Rs 1064.50 and Tata Steel declined 0.87% to Rs 865.35.
The BSE Consumer Durables index rose 2.36% to 6,226.46. It outperformed the Sensex. Blue Star spurted 4.85% to Rs 477.45, Videocon Industries gained 3.94% to Rs 613.25, Lloyd Electric & Engineering gained 3.44% to Rs 183.65 and Titan Industries rose 1.35% to Rs 1590.10.
The BSE Oil & Gas index rose 2.28% to 12,939.99. It outperformed the Sensex. HPCL gained 6.54% to Rs 310.45, Indian Oil Corporation gained 2.82% to Rs 616.20, and BPCL rose 2.64% to Rs 430.10.
The state-run gas transmission and distribution firm GAIL (India) moved up 9.56% to Rs 481.85. The company and Reliance Industries on Tuesday (4 December 2007) signed a memorandum of understanding (MoU) for joint co-operation in petrochemicals. As per the MoU, both companies will explore opportunities for setting up petrochemical complexes outside of India in feedstock rich countries.
India’s top state run oil explorer in terms of market capitalisation ONGC rose 4.29% to Rs 1206.30 on reports that the overseas arm of the company and the Hinduja group were in talks to form a partnership with Switzerland-registered NICO, a unit of National Iranian Oil Company.
The BSE Healthcare index rose 2.40% to 3,950.73. It outperformed the Sensex. Ranbaxy Laboratories gained 1.34% to Rs 393, Divi’s Lab gained 8.74% to Rs 1790.20, Pfizer soared 4.65% to Rs 708.45, Glenmark Pharmaceuticals jumped 4.69% to Rs 484.50, and Cipla rose 2.46% to Rs 189.35.
The BSE IT index fell 0.40% to 4,232.03. It underperformed the Sensex. India's second largest software exporter by sales Infosys Technologies fell 0.70% to Rs 1603.25.
Satyam Computers gave away 0.49% to Rs 438.75. However, TCS gained 0.20% to Rs 1031.60. Wipro gained 0.45% to Rs 499.
The BSE Auto index rose 0.94% to 5,691.81. It underperformed the Sensex. Hindustan Motors surged 17.27% to Rs 50.25, Apollo Tyres soared 7.25% to Rs 44.90, Escorts gained 7.47% to Rs 167.55, Tata Motors spurted 3.95% to Rs 771.75, Maruti Suzuki gained 0.39% to Rs 1032.15 and Mahindra & Mahindra rose 0.24% to Rs 773.70.
North India based cement firm Shree Digvijay Cement Company fell 3.39% to Rs 38.50, off day’s high of Rs 42.70 after Grasim Industries' board of directors approved sale of its 53.63% stake in the company to Portuguese cement maker Cimpor for Rs 322 crore.
Auto ancillaries firm Autoline Industries jumped 6.39% to Rs 172.20 after the company said it has acquired the manufacturing operations of US-based Dura Automotive Systems for $900,000.
Aluminium foil containers and rolls maker Parekh Aluminex rose 3.27% to Rs 284. A clutch of institutional investors from the Middle East — Oman Pension Fund, Emirates Industrial Development, Gulfar, Tawoos and four other institutions — are reportedly picking up an 18% stake in the company.
Nitin Fire Protection Industries (NFPIL), a fire protection and security solutions company, spurted 8.75% to Rs 551.90. The company is reportedly close to acquiring around 40% stake in a UAE-based fire protection company — New Age Company. The deal may be worth over Rs 150 crore, the reports added.
Textiles and apparels firm Alok Industries jumped 1.80% to Rs 82.20. The company is reportedly close to diluting 20% stake in its realty venture — Alok Infrastructure — to private-equity players. Reports sugget that Ernst & Young is advising Alok and the company would seal the private-equity deal by the end of current fiscal.
Infrastructure development firm GMR Infrastructure gained 1.62% to Rs 263.05. The GMR Group is reportedly planning to bid for more airports in Eastern Europe. It is actively considering a bid for the Prague airport project, the report added.
Pharmaceuticals firm Matrix Laboratories gained 0.66% to Rs 220.55 after the company said it has received a tentative approval from US Food and Drug Administration for its abbreviated new drug application or for tenofovir disoproxil fumarate tablets.
Engineering firm Lanxess ABS gained 1.95% to Rs 199 on reports it plans to invest Rs 800 crore to set up a greenfield chemical facility in Gujarat.
Ispat Industries clocked highest turnover of Rs 569 crore on BSE. Essar Oil (Rs 259.12 crore), Videocon Industries (Rs 244.60 crore), Reliance Natural Resources (Rs 214.70 crore), and Mundra Port & Special Economic Zone (Rs 210.89 crore), were the other turnover toppers on BSE in that order.
Ispat Industries registered highest volumes of 8.9 crore shares on BSE. Tata Teleservices (3.72 crore shares), Wire & Wireless India (1.64 crore shares), Hindustan Motors (1.47 crore shares) and Reliance Natural Resources (1.20 crore shares), were the other volume toppers on BSE in that order.
In Europe, key indices in UK, France and Germany were up by between 0.79% to 1.10%.
Asian markets were in positive zone today, 5 December 2007. Key indices in China, Japan, South Korea, Hong Kong, Singapore and Taiwan were up by between 0.30% to 2.58%.
US markets ended lower for second straight day yesterday, 4 December 2007. The Dow Jones industrial average slipped 65.8 points to 13248.73 and Nasdaq Composite index slipped 17.3 points at 2619.83.
Oil was steady on Wednesday, 5 December 2007, as the market kept its eyes on Organization of the Petroleum Exporting Countries (OPEC's) meeting in Abu Dhabi later in the day and the organisation's big Gulf producers left the door open for a possible output increase. US crude inched up 8 cents to $88.40 a barrel. London Brent crude rose 17 cents to $89.70 a barrel.

Small & Mid Caps Shine;Sensex Loses 73 pts

The market edged lower led by fall in index heavyweights Reliance Industries and ICICI Bank. Select IT stocks weakened. Tata Steel soared. Metal, consumer goods and auto stocks were in demand.

The market breadth was strong. 19 out of 30 stocks from the Sensex pack were in red. Key Asian markets, except Singapore, were in green. European markets drifted lower as nervousness over the US economy and the credit crisis kept investors on the sidelines.

Investors were also cautious ahead of the discussion on the Indo-US nuclear deal, which will take place in the Rajya Sabha today (4 December 2007) where the Left is expected to sharpen its attack on the issue.

The 30-share BSE Sensex lost 73.91 points or 0.38% to 19,529.50. The Sensex hit a high of 19,707.86 in early trade. At day's high, the Sensex gained 104.45 points.

The broader based S&P CNX Nifty shed 6.65 points or 0.11% to 5858.35.

The BSE Mid-Cap index rose 1.60% to 8,904.54. The BSE Small-Cap index rose 1.58% to 10,956.51. Both these indices outperformed the Sensex.

Market breadth was strong. On BSE, 1934 stocks advanced, 878 stocks declined and 52 stocks remained unchanged.

BSE clocked a turnover of Rs 9111 crore compared to yesterday (3 December 2007)’s turnover of Rs 9,319.88 crore.

Nifty December 2007 futures were at 5889, a premium of 30.65 points as compared to spot closing of 5858.35.

NSE’s futures & options (F&O) segment turnover was Rs 56330.05 crore, which was higher than Rs 54816.50 crore on Monday, 3 December 2007

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 2.33% to Rs 2863.85. The stock came off session's high of Rs 2960.

The BSE Bankex fell 0.63% to 10,797.09. It underperformed the Sensex. India’s largest private sector bank by assets ICICI Bank fell 2.13% to Rs 1140.40.
Federal Bank declined 1.46% to Rs 330.20, Bank of India fell 1.30% to Rs 350.25, Karnataka Bank fell 0.63% to Rs 211.70, and State Bank of India declined 0.32% to Rs 2317.40.
Among gainers from the backing sector, Yes Bank spurted 7.37% to Rs 249.90, Punjab National Bank jumped 2.57% to Rs 643.55, Andhra Bank gained 1.90% to Rs 104.45 and Indian Overseas Bank rose 1.66% to Rs 175.

The BSE Metal index gained 3.22% to 18,869.28. It outperformed the Sensex. The world's sixth-largest steel maker Tata Steel soared 4.08% to Rs 872.95 after the chief of its Corus unit said the firm was planning to lift prices next year.
Vedanta group firm Sterlite Industries fell 1.45% to Rs 1066.65 on reports that Sterlite Energy (SEL), a subsidiary of the company, is in talks with private equity firms and financial investors to sell around 15% in the largest pre-IPO placement in the country. Citigroup Global Markets and DSP Merrill Lynch are advising Sterlite Energy on the transaction, which is expected to raise more than $1 billion from a clutch of investors.

Maharastra Seamless surged 12.37% to Rs 574.10, Steel Authority of India (Sail) gained 8.53% to Rs 284.90, Jindal Stainless gained 5.44% to Rs 238.30, and Hindalco Industries gained 1.15% to Rs 193.75.

The BSE Consumer Durables index jumped 6.12% to 6,083.04. It outperformed the Sensex. Videocon Industries surged 20% to Rs 590, Asian Star Company jumped 4.71% to Rs 1380, Rajesh Exports moved up 1.75% to Rs 921.05 and Titan Industries gained 1.16% to Rs 1568.90.

The BSE Auto index rose 1.67% to 5,639.08. It outperformed the Sensex. MICO surged 16.92% to Rs 5438.55, Ashok Leyland spurted 7.86% to Rs 50.75, and Hindustan Motors gained 4.26% to Rs 42.85.

India's top tractor maker by sales Mahindra & Mahindra rose 2.79% to Rs 771.85. The stock rose for the second day in a row after it reported on Monday, 3 December 2007, a 37% rise in vehicle sales in November 2007 over November 2006.
However, Maruti Suzuki fell 0.39% to Rs 1028.15 and Bajaj Auto declined 0.26% to Rs 2768.70.

Cement shares pared gains after the government today warned that it will crack down on the cement industry if it detects any cartelisation in the sector. ACC, India's largest cement maker in terms of capacity, fell 0.35% to Rs 1087.85, off day’s high of Rs 1117. The company said on Monday, 3 December 2007, its November 2007 cement shipments rose 3% to 1.58 million tonnes from 1.53 million tonnes a year earlier.
North India's largest cement maker Ambuja Cements rose 1.22% to Rs 153.90, off day’s high of Rs 160.90. The company said on Monday its November 2007 cement shipments rose 3.8% to 1.36 million tonnes from 1.31 million a year earlier.
JK Cements fell 1.19% to Rs 245.70, and Grasim Industries fell 0.68% to Rs 3813.50. Ultratech Cements declined 0.48% to Rs 994.

The BSE IT index fell 0.15% to 4,240.13. It outperformed the Sensex. TCS fell 2.22% to Rs 1054, Satyam Computers fell 1.58% to Rs 440.90, and I-Flex Solutions fell 1.78% to Rs 1508.85. India’s third largest software exporter by sales Wipro gained 0.68% to Rs 496.75. India’s second largest software exporter Infosys Technologies rose 0.86% to Rs 1614.50.

State run term lending institution Power Finance Corporation fell 0.40% to Rs 249.75 after its board approved to fix current exposure limit for lending purposes for government sector companies at 100% of its networth.

Media and entertainment firm Zee Entertainment rose 0.05% to Rs 306.95, off day's high of Rs 312.45. Zee group reportedly sold the international broadcast rights for its Indian Cricket League (ICL) matches to three global distributors for an estimated $10 million. The three distributors are Astro PPV -– a leading direct-to-home distributor for the South-East Asia region, the Sri Lanka-based Derana and Gateway, which reaches countries in Europe and the US, among others, the report added.

Media firm UTV Software Communications fell 2.77% to Rs 796.55 after the company decided to call off its association with Malaysian media company Astro Multimedia International. UTV Software and Astro had entered into a co-operation arrangement earlier this year via a company - GenX Entertainment - to to set up kids channels in Malaysia and Indonesia.

Textiles firm Pearl Global was locked at upper limits of 20% to Rs 100.55 after the firm struck a deal to jointly develop its Gurgaon property with a unit of DLF. The firm cancelled a similar earlier pact with Ansal Properties & Infrastructure.

Construction firm Hindustan Construction Company rose 3.36% to Rs 209.30 after its chairman and managing director said the firm is in talk with foreign players for airport development and float an infrastructure firm to invest in public private partnership.

Software firm Logix Microsystems fell 0.69% to Rs 310.25, off day's high of Rs 340 after it acquired a majority stake in Add-on-Auto LLC of the US for an undisclosed amount.

Media firm Dish TV India rose 0.81% to Rs 92.80, off day's high of Rs 97.25 after the direct-to-home satellite operator said its board will meet on Wednesday (5 December 2007) to consider equity capital infusion.

Engineering firm Dynamatic Technologies rose 0.56% to Rs 1710, off day's high of Rs 1,850 after the company said it had signed a deal with Spirit Aerosystems (Europe) to set up metallic precision assembly for Airbus aircraft, in Bangalore.

Jindal Steel & Power clocked the highest turnover of Rs 471.08 crore on BSE. Essar Oil (Rs 453.79 crore), Mundra Port & Special Economic Zone (Rs 331.86 crore), ONGC (Rs 242.72 crore) and IFCI (Rs 200.10 crore), were the other turnover toppers on BSE in that order.
Ispat Industries registered highest volumes of 2.48 crore shares on BSE. Ashok Leyland (1.99 crore shares), IFCI (1.88 crore shares), Chanbal Fertiliser & Petrochemicals (1.70 crore shares) and Tata Teleservices (1.69 crore shares), were the other volume toppers on BSE in that order.

European markets were weak in early trade. Key indices in France, Germany and UK were down by between 0.23% to 1.15%.

Most of the Asian markets were in green. Key indices in China, Hong Kong, Singapore, South Korea and Taiwan were up by between 0.18% to 0.97%. However, Japan's Nikkei 225 was down 0.95%.

US markets ended lower on profit booking on Monday, 3 December 2007. The Dow Jones industrial average slipped 57.15 points to 13,314.57. Broader stock indicators also settled lower. The S&P 500 index declined 8.72 points or 0.59% to 1,472.42, and the Nasdaq Composite index dropped 23.83 points or 0.90% to 2,637.13.

Oil rose on Tuesday, 4 December 2007 following signs that Organization of the Petroleum Exporting Countries (OPEC) will probably resist consumer nations' calls to pump more oil. US crude rose 34 cents a barrel to $89.65. London Brent crude was up 24 cents at $90.04.

IFCI strikes all-time high

IFCI surged 12.58% to Rs 106.50 on reports International Finance Corporation will pick up stake in the term lending institution.

On BSE, 4.17 crore shares of the scrip were traded. The stock had an average daily volume of 1.17 crore shares on BSE in past one quarter.

The scrip had touched a high of Rs 109.85, an all time high for the counter on BSE. Its low for the day so far is at Rs 96.50. The stock had hit a 52-week low of Rs 10.29 on 12 December 2006.

The scrip outperformed the market over the past one month till 30 November 2007, rising 5.17% compared to the Sensex’s decline of 1.83%. It also outperformed the market in the past one quarter, surging 52.83% compared to Sensex’s rise of 26.40%.

The term-lending institution has an equity capital of Rs 639.99 crore. Face value per share is Rs 10.

Life Insurance Corporation of India is the single largest shareholder in the company with 8.40% stake (as at end September 2007).

International Finance Corporation (IFC), the investment arm of World Bank, is likely to hold less than 20% stake in IFCI. IFCI needs funds to meet its capital adequacy requirements.

Reports further indicated that IFC has already conducted due diligence on IFCI.

Meanwhile, IFCI has set 14 December 2007 as the last date for submission for financial bids for acquiring a strategic 26% stake in the company. The IFCI board is expected to announce the strategic investor by 20 December 2007. As per reports only four of the eight shortlisted bidders have actually conducted due diligence till date. These include the Sterlite Industries and Morgan Stanley & Company consortium, the WL Ross, GS Capital Partners (VI) Fund, Standard Chartered Bank and HDFC combine, the Shinsei Bank, PNB and JC Flowers group and the Cargill Financial Services Corporation and Texas Pacific consortium

The remaining bidders — GE Corporation, IDFC, Natixis and Blackstone Group — are yet to conduct due diligence, raising doubts over their interest in the sale.

At the current price of Rs 106.50, the scrip trades at a PE multiple of 3.42, based on Q2 September 2007 annualised EPS of Rs 31.14.

IFCI's principal activities are project financing, providing financial services and comprehensive corporate advisory services. The company also provides equipment finance, equipment credit, equipment leasing, corporate loans, short-term loans and working capital loans to meet the specific needs of corporates.

IFCI reported 329.30% spurt in net profit to Rs 497.29 crore on 188.30% jump in operating income to Rs 944.01 crore in Q2 September 2007 over Q2 September 2006.

Sintex Industries -Buy

One simple stockpicking approach is to buy the domestic growth stories such as infrastructure, telecom and housing due to their high earnings visibility over the next few years. But after the euphoric rise in the Sensex and the prevailing volatility, finding cheap stocks with relative safety even in the above mentioned sectors isn’t easy. Sintex Industries seems to be one exception. Considering its unique position, first-mover advantage in many products and high entry barriers in its new businesses make it interesting.

Originally a textile company, Sintex pioneered the plastic water tanks business in the seventies and even today, the company’s brand ‘Sintex’ is synonymous with water tanks. But over the years, competition emerged in this business and the company reduced its exposure to this segment. Today, it derives only 10 per cent of its sales from tanks.

If this business was getting competitive, Sintex ventured into other high growth businesses such as pre-fabs, monolithics and custom moulding businesses. Pre-fabs are structures made from plastics, concrete and related materials used for public health care centres, schools, public administration buildings, portable toilet boxes and telecom shelters.

Monolithic construction is an extension of pre-fab structures used for making multi-storeyed buildings required for mass housing projects. Both these businesses have high entry barriers as Sintex has front-end capabilities to execute projects in short time. It has also forayed in the custom moulding business, which finds application in the auto component and electrical business.

Sintex gets only 22 per cent of its revenues from textiles today. Over the years, it has entered into a niche segment of structured fabrics in textiles, which command a margin of 30 per cent. The global capacity of this product is small and there is little competition from China. The company supplies to high-end brands like Armani, Versace and Tommy Hilfiger through its partners.

Sintex is expanding its current capacity of 21 million metres to 24 million metres and 29 million metres by FY08 and FY09 respectively. It is also setting up a 10,000 pieces a shift garments capacity exclusively for these customers, which will be ready in a year.

Plastics: Growth vehicle

Sintex is likely to report a strong 35-40 per cent growth a year for the next few years, thanks to the robust growth potential of its pre-fabs and monolithic business, which is expected to grow at 50 per cent. The share of plastic business to total revenues is expected to move up even higher from 78 per cent to 88 per cent by FY11. The wide usage and increasing requirement of schools, toilets, police stations, toll nakas and telephone booths provides strong revenue visibility for the company's pre-fabs business.

On the other hand, the government's thrust on providing better housing facilities will drive the growth of monolithic construction. The company has received orders from Gujarat government for constructing quarters for economically weaker sections in Ahmedabad, Baroda, Rajkot and Surat. There is such opportunity in many other regions including cities. Further, the company's inorganic growth initiatives in the past are expected to drive growth in the custom moulding business.

Aggressive buyer

Sintex has gobbled up three companies in the custom moulding business since May 2007 when it acquired US-based $23-million Wasaukee Composites, which caters to the auto, electrical and medical imaging industries for $20.5 million. In September 2007, it acquired the automotive product business of Bright Brothers, which has domestic leadership in passenger automotive plastic component segment for Rs 149 crore.

Just a month back, the company announced the buy-out of Europe-based $170-million Neif Plastics having presence in electrical, automotive, aerospace and defence sectors for about Rs 180 crore. All the acquired companies are making profits, though they have lower margins as compared to Sintex.

These acquisitions will enable the company to expand its products and geographical presence. The company has indicated that it is open to more acquisitions in the future, especially in the custom moulding business. The company has passed an enabling resolution to raise funds for future acquisitions.

Strong financial track record

Its standalone sales and net profits have grown at 25 per cent and 47 per cent a year respectively between FY02 and FY07 leading to an expansion of 600 basis points in net profit margin largely attributable to the plastics business. This trend has continued even this year.

In the September 2007 quarter, net sales increased 26 per cent year-on-year to Rs 320 crore and operating profit of Rs 73 crore jumped at a faster rate of 38 per cent due to better control over raw material costs. This was followed by 35 per cent rise in net profit to Rs 42 crore.

While this growth momentum is expected to continue even in the next three years, margin expansion will get constrained to some extent in FY09 as the impact of all its acquisitions will be fully reflected.

Moreover, the impact of high margins in the pre-fabs and textiles business will be softened by relatively lower margins of monolithic and other businesses. However, with benefits of integration and synergies, Sintex should not find it difficult to improve margins.

RIL, REL lead 240-points Sensex surge

Strong buying interest in some index pivotals including Reliance Industries boosted the bourses today. IT pivotals, Wipro, TCS and Satyam Computer edged higher. Reliance Energy spurted. The market breadth was strong. 24 out of 30 stocks from the Sensex pack were in green. Last week's sharp fall in global crude oil prices supported the rally on the bourses.
European markets, which opened after Indian markets, turned negative after a positive start. Asian markets, which opened before Indian market, were mixed.

The 30-share BSE Sensex rose 240.22 points or 1.24% to 19,603.41. The Sensex hit a high of 19,619.32 in mid-afternoon trade trade. At day's high, the Sensex gained 256.13 points.
The broader based S&P CNX Nifty advanced 102.25 points or 1.77% to 5865.

The BSE Mid-Cap index was up 2.46% to 8,764.26. The BSE Small-Cap index was up 2.47% to 10,786.20. Both these indices outperformed the Sensex.

Market breadth was strong on BSE on the back of strong demand for small-cap and mid-cap shares. 2087 stocks advanced, 709 stocks declined and 58 stocks remained unchanged on BSE.
BSE clocked a turnover of Rs 9264 crore compared to Friday (30 November 2007)'s Rs 8,457.32 crore.

Nifty December 2007 futures were at 5876, a premium of 11 points as compared to spot closing of 5865.

NSE’s futures & options (F&O) segment turnover was Rs 54816.5 crore, which was lower than Rs 60313.99 crore on Friday, 30 November 2007

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries rose 2.86% to Rs 2932.20, off day’s low of Rs 2850.

India’s largest private sector bank by assets ICICI Bank fell 1.64% to Rs 1165.25.

India’s largest private sector bank by net profit HDFC Bank declined 1.04% to Rs 1701.20.

The BSE Consumer Durables index soared 6.83% to 5,732.15. It outperformed the Sensex. Gitanjali Gems sprout 7.02% to Rs 464.70, Rajesh Exports jumped 4.80% to Rs 905.20, and Lloyd Electric & Engineering gained 2.51% to Rs 179.70.

Diversified firm Videocon Industries spurted 20% to Rs 491.70 on reports the company has negotiated directly with land owners in Asansol for 2,000 acres for its proposed steel and power plant. The new company--Videocon Steel and Power--will build the 3 million-tonne steel and 1,200 megawatt thermal power plant on 4,000 acres. The project will start with 2,000 acres.

The BSE Power index rose 3.22% to 4,484.10. It outperformed the Sensex. GVK Power & Infrastructure gained 5.51% to Rs 803, Neyveli Lignite Corporation rose 2.72% to Rs 241.95, and NTPC gained 1.35% to Rs 239.85.
Power producer and distributor Tata Power soared 7.72% to Rs 1262.85. The company is reportedly eyeing a bid for Singapore electricity companies Tuas Power, PowerSeraya and Senoko. The report suggests that Singapore's state investor Temasek Holdings is selling its interests in the three firms and Tata Power was evaluating the opportunity.

Anil Dhirubhai Ambani Group (ADAG) led Reliance Energy (REL) jumped 9.32% to 1900.15. As per reports, ADAG will invest Rs 8,000 crore in REL that would help the company to double its net worth and increase its borrowing limit. The infusion is proposed through a preferential offer of shares to Reliance-Anil Dhirubhai Ambani Group. The preferential offer will be made at Rs 1,812 per share. After the equity infusion, the promoter’s stake will increase to 43-45% from the current 35.89%.

The BSE Oil & Gas index rose 3.45% to 12,786.19. It outperformed the Sensex. Essar Oil spurted 20% to Rs 391.35, BPCL gained 4.34% to Rs 402.95, Reliance Petroleum gained 2.32% to Rs 222.80 and Reliance Natural Resources rose 2.97% to Rs 173.20.

State-run oil refiner Indian Oil Corporation moved up 2.05% to Rs 552.50. The company has received approval of its board for acquiring a 5% stake in Oil India by acquiring 1.07 crore equity shares at a price equivalent to its initial public offer price (IPO). The IPO of OIL is slated for the first quarter of 2008.

India’s biggest car-maker by sales Maruti Suzuki India rose 1.96% to Rs 1032.20. The company's domestic sales rose 24% to 65,216 units in November 2007 over November 2006. This is its highest ever monthly domestic sales.

India's top tractor maker by sales Mahindra & Mahindra rose 2.61% to Rs 750.90. The company's vehicle sales rose 37% to 18,585 units in November from 13,597 units a year earlier. Exports rose to 739 units in November 2007 from 443 units a year earlier.

The BSE IT index rose 1.34% to 4,254.05. It outperformed the Sensex. Wipro jumped 7.19% to Rs 493.40, TCS rose 3.85% to Rs 1052.95, and Satyam Computers gained 1.83% to Rs 448.
India’s second largest software exporter by sales Infosys Technologies fell 0.21% to Rs 1600.70.

India's largest steel producer in terms of sales Steel Authority of India (Sail) rose 1.57% to Rs 262.50. The firm reportedly plans to invest Rs 53,000 crore to increase hot metal capacity to 26 million tonnes. The investment is expected to be funded through a mix of debt and equity in the ratio 1:1.
Infrastructure development firm GMR Infrastructure rose 1.87% to Rs 259.25. The GMR Group reportedly plans to invest over Rs 60,000 crore in next five-six years to enhance its power generation capacity in the country and acquire coal assets abroad. GMR Energy, a subsidiary of GMR Infrastructure, has three operational power plants of 388.5 megawatt (MW), 220 MW, 200 MW capacity in Andhra Pradesh, Karnataka and Tamil Nadu respectively.

Term lending institution IFCI jumped 12.90% to Rs 106.80. The firm has reportedly decided to rope in International Finance Corporation, the investment arm of World Bank, as an investor to hold less than 20% stake.

Heavy equipment maker BEML gained 1.40% to Rs 1695.80. The company has reportedly floated a subsidiary in Brazil for sourcing and assembling of mining and construction equipment to cater to the growing Latin American markets. The quantum of investment for the project is still being worked out, the reports added.

Ceramic tiles maker Euro Ceramics rose 7.02% to Rs 220.95. The company is likely to invest Rs 575 crore to increase vitrified tiles production capacity by 1,00,000 tonnes per annum.

Cooling products maker Fedders Lloyd Corporation spurted 13.44% to Rs 143.50 after the company said it has tied up with Victor Company of Japan to bring the latter's consumer electronics products to India.

IDFC clocked the highest turnover of Rs 1215.73 crore on BSE. Essar Oil (Rs 660.55 crore), IFCI (Rs 459.56 crore), Reliance Petroleum (Rs 371.93 crore) and Reliance Energy (Rs 315.78 crore), were the other turnover toppers on BSE in that order.
IDFC registered highest volume of 5.88 crore shares on BSE. IFCI (4.39 crore shares), Tata Teleservices (2.42 crore shares), Ispat Industries (2.42 crore shares) and Essar Oil (2.33 crore shares), were the other volumes topper on BSE in that order.

European markets declined after a positive start. In Europe, key indices in UK, France and Germany were down between 0.01% to 0.24%.

Asian markets were trading mixed today, 3 December 2007. Key indices in Singapore and Hong Kong were up between 0.01% to 0.05%. Key indices in China, Japan, South Korea and Taiwan were down between 0.03% to 0.33%.

Oil prices fell below $89 on Friday on expectations that OPEC will decide to increase output at its meeting in this week. Crude oil hovered above $89 a barrel on Monday, 3 December 2007, after close to $10 fall last week. US crude for January delivery rose nearly $1 to above $89.50 a barrel, but was still well off a record high near $100 set on 21 November 2007.

US markets ended mixed on Friday, 30 November 2007 on the expectation that Fed will cut interest rates by 25 basis points in its meeting scheduled on 11 December 2007. The Dow Jones Industrial Average rose 59.99 points 0.45% to 13,371.72 and The S&P advanced rose nearly 1% to 1,481.

However the Nasdaq Composite slipped 0.3% to 2,661.

FIIs sold equities worth Rs 5,849.90 during the month of November 2007. On cumulative basis, FIIs were net buyers of equities to the tune of Rs 65,907.30 crore in calendar 2007 so far.

Aegis Logistics - Invest (2-3yr Horizon)

Investment with a two-three year perspective can be considered in the stock of Aegis Logistics, a leading player in oil and gas logistics. Established in the business of handling, storage and distribution of oil, chemicals and petroleum products, Aegis appears well-placed to benefit from the expanding business opportunities in the oil and gas space. Its presence in autogas retail also holds promise, given the rising oil price scenario.
An expansion in the liquid logistics capacity, a strong presence in Mumbai and the company’s foray into service contracts with oil marketing companies suggest potential for ramping up revenues. At the current market price of Rs 228, the stock trades at a PE of about 12 times its trailing 12-month earnings. Investors, however, can buy the stock in lots given the broad market volatility.

Liquid logistics
Aegisprovides supply chain services to importers and exporters of petroleum products and chemicals. With a strong presence in Mumbai and plans to expand base across other ports, Aegis could gain considerably from the increasing demand for liquid logistics. Its three-pronged strategy of expanding across both existing and new capacity appears promising.
One, Aegis’ plan to strengthen presence in Mumbai (with the acquisition of new facilities) holds potential given the port’s location. Two, expansion to other locations is likely to help Aegis establish a pan-India presence. Notably, Aegis has acquired land in Haldia and Mangalore for setting up facilities in future and plans to extend its presence to Chennai and Kandla also. Besides, the company’s Kochi facility (slated to commence operations by March 2008) also holds potential. Three, its foray into service contracts with oil marketing companies such as Mangalore Refinery and Petrochemicals and Bharat Petroleum Corporation, although insignificant in terms of revenue contribution now, could turn significant in five-six years.

Autogas foray to drive growth
The gas-trading segment of Aegis, which involves import and distribution of liquefied petroleum gas (LPG) from Saudi Arabia appears to offer good potential given the firming oil-price scenario. Further, the favourable cost economics of autogas over petrol and the increasing availability of LPG variants of cars in the market offer opportunities, given Aegis’ presence in autogas retailing. Notably, it intends to scale up the number of autogas dispensing stations from the current 22 to over a 100 in the next two years.
This expansion with a focus on Tier- II cities will be predominantly franchise-based, thus helping the company expand presence without significant incremental investment. Further, gas storage capacity could also expand with the acquisition of Hindustan Aegis LPG unit, pending court approval (expected by March 2008).
For the quarter ended September 2007, Aegis reported a 62 per cent growth in earnings on the back of a 43 per cent growth in revenues. Operating profit margins dipped marginally to about 13 per cent. On a segmental basis, the gas terminal division contributed to about 85 per cent of revenues while the liquid terminal division made up for the rest. However, the latter, owing to higher operating margins, contributed about 54 per cent of the bottomline.

Concerns
Aegis’ earnings stand exposed to any volatility in gas prices. Any fade out in the market appeal for LPG could pose a risk to the company’s revenue stream. Further, given the high gestation period of its expansion plans, the full benefits of expanded capacity (Mangalore and Haldia) are likely by FY-11 only. Besides, any delay in expansion plans could affect the company.

Power Stocks - Caution Ahead

Power stocks have been generating a lot of heat in the last few weeks. They seem to be caught in a tidal wave that has boosted their valuations to stratospheric levels. So much so, these companies are now burdened with turning in exceptional earnings, quarter after quarter, for at least the next two years to justify these valuations. The rising tide has also lifted stocks of companies that are connected to the power sector, such as Power Finance Corporation, power equipmen t manufacturers such as BHEL and even PTC India, the lone listed power trading company.

Consider this. Reliance Energy (REL), the stock leading the action, is valued at 41 times its annualised sustainable earnings for the first half of this fiscal. PTC India is valued at 47 times by the same yardstick, while newcomer to the market Power Grid Corporation is valued at 37 times. Tata Power, which is comparable to REL in profile, is valued at a relatively sedate 31 times, which by itself is not cheap.

So, what’s driving all the action in these stocks? Are these valuations justified? Or is there a risk of short-circuit round the corner?

BS and AS
The story of price movement in power stocks in recent times has to be analysed in two parts — Before Sasan (BS) and After Sasan (AS). Sasan, in Madhya Pradesh, is where the second of the ultra mega power projects (UMPP) is to be located, and this project was awarded to REL after the original winner, Lanco Infratech, was disqualified. REL was formally awarded the project in early August.
Call it coincidence or otherwise, but power stocks surged after this. By early October, when its subsidiary, Reliance Power, filed an IPO document with SEBI, the REL stock had almost doubled from levels of Rs 750-760 in early August.

Tata Power, which bagged the first UMPP early this calendar year and followed it up by acquiring equity interest in two Indonesian coal mining companies in March, was trading in the Rs 500-600 band until July. By early October the stock shot past the Rs 1,350 mark.
The story is much the same for other power stocks, such as Neyveli Lignite Corporation (NLC), Gujarat Industries Power Company (GIPC), Lanco Infratech and GVK Power, to name just a few.
The Sasan award to REL and the IPO plans of Reliance Power appear to have suddenly opened the eyes of investors to the potential in the power sector. Interestingly, in the last three months when these stocks have been flying high, there has been no change in the fundamentals of the power sector whatsoever. And importantly, none of these companies whose stocks have been re-rated, have achieved anything spectacular in this period.

What they have done, though, is announce ambitious plans to expand generation and transmission capacity over the next 3-5 years. REL announced at its annual general meeting in July that it will be investing Rs 60,000 crore in the power sector in various projects that will take its generation capacity to 15,000 mega watts in five years’ time. Tata Power is on its own capacity expansion programme that will see it add 10,000 MW over the same period, including the UMPP at Mundra. Others, such as NLC, GIPC and Lanco, are either into expansion activity already or have announced plans for the same.

These plans appear to have fuelled the rally across the sector. The IPO of Power Grid Corporation and the big response it got only added further impetus. The second quarter performance of some of these companies was impressive, fuelling the rally further, and the market “discovered” the bright prospects for the sector.
Sustainable valuations?

That’s the big question. The last few days have seen most of these stocks retreat from their respective peaks but their valuations are still high. (see Graphic). There is no doubt about the potential the sector holds. An industry with a demand-supply gap of more than 12 per cent certainly offers its players good prospects. The regulations that govern the sector also afford excellent earnings visibility with a promised return on equity of 14 per cent. Of course, this will come up for review in 2009, when the current tariff policy expires.

The Eleventh Plan document envisages a capacity addition target of 68,869 MW, half the entire capacity of the country now. Party-poopers

Yet, it is not as if everything is hunky-dory at the moment. There are several potential party-poopers lurking round the corner. Let us start with the basic issue of fuel. The UMPPs are well-conceived pit-head projects that also give the successful bidder the right to mine coal itself. While this assures fuel security, the fact remains that pure generation companies, such as Reliance Energy or Tata Power, have no expertise whatsoever in the complex business of mining. Tata Power may be relatively better off in this respect, as its UMPP is based on imported coal and half its requirement has already been covered by the Indonesian deal.

For the others dependent on domestic coal supplies from Coal India and its subsidiaries, the key issue is whether the latter can sustain uninterrupted supplies in the long term. Recent experience of coal shortages experienced by major power plants that depend on domestic supply certainly does not lend confidence.

For projects that depend on gas, there is the challenge of tying up supply at a price that will make the power generated affordable. Though Krishna-Godavari Basin gas will begin to flow by mid-2008, there are some knotty issues that could well set back those dependent on it for their upcoming projects. The Ambani brothers will have to sort out their differences over gas supply as mandated by the Bombay High Court.

Pending a settlement of the issue, other prospective buyers will have to wait as the final settlement will determine how much of gas will be available for the market. The settlement is also important for REL, which has planned a 5,600 MW project at Dadri to be fuelled by KG Basin gas. Work on this project, though announced three years ago, has yet to begin following uncertainty over gas supply. Things could get worse for REL if the settlement plan does not work out in Mr Anil Ambani’s favour.
Meanwhile, project planners are grappling with long lead times for equipment supply. BHEL, despite increasing its capacity, has a long waiting period for delivery which some in the power sector say is responsible for delays in their projects. L&T, sensing the opportunity, has now jumped into the fray in a joint venture with Mitsubishi that will manufacture super-critical boilers and turbines but supplies are not expected before 2009.

Some power companies have settled for Chinese or Korean equipment. Such equipment is relatively new in India and untested. This enhances the execution risks of these projects significantly. Issues with equipment supply could potentially hold back the capacity addition plans for the industry. Tata Power, for instance, has chosen South Korea’s Doosan Heavy Industries to supply boilers for the Mundra UMPP, while turbine generators will be supplied by Toshiba.

Finally, there is a significant regulatory risk in the sector. Tariff-based competitive bidding — as in the UMPPs — is likely to soon become the norm, and this will bring in a fresh set of challenges for generation companies. Financial closure will be the biggest challenge here as the security of a PPA will be absent in these projects. Companies will have to fall back on the strength of their balance-sheets to secure funding, and not too many companies — save the established ones — can do that comfortably. The market will have to factor this in its valuations because the advent of competitive bidding will create some level of fog in earnings visibility. It is not easy to control costs and cash-flows over a 20-25 year period when the tariff remains fixed. The UMPPs will be the first test of these regulations.

Valuations stretched

Whichever way you look at it, current valuations do appear stretched and these companies have to deliver exceptional growth rates of 30-40 per cent over the next 2-3 years to justify the valuations. The question is whether this is possible, especially as most of these companies will be in the investment phase over the next 3-5 years. This is a period when finance costs and depreciation will increase and cash-flows will be stretched.
Stocks such as REL, Tata Power, NLC, PTC India, Power Grid Corporation and Jaiprakash Hydro appear richly valued now and some correction appears inevitable once the euphoria surrounding the sector fades. REL’s foray into infrastructure projects such as building toll roads and the Mumbai MRTS diversifies its earnings stream but also enhances the risk profile in the medium term till the projects are executed and earnings kick in.

GVK Power and Lanco Infratech’s valuations also appear to be influenced by the infrastructure projects they are involved in, such as the Mumbai airport in the case of the former, and the Hyderabad real estate project of the latter.

Stocks such as NTPC, CESC, GIPC and Power Finance appear fully valued but shareholders can continue to hold on to them. Suryachakra Power, which shot up on news of a proposed joint venture with a Chinese company for a coal-fired project in Orissa, appears overvalued at the current price.