infineeti newsletter august week 1
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InFINeeti Newsletter August Week 1 (Issue 6 | Volume 2 | 2013)TRANSCRIPT
Financial focus Weekly Newsletter
InFINeeti
ISSUE 6 2013 VOLUME 1
TOP STORIES….…........1 MARKET ACTIVTY ….....2
ECONOMICS ....... …... 3
TERM OF THE WEEK ….4 TRADING CALLS ..…….5
MONTHLY RETURNS…..6
A o n e s t o p g u i d e t o k n o w a b o u t a l l t h e r e c e n t h a p p e n i n g s i n t h e f i n a n c e w o r l d
TOP STORIES : INDIA
GOVT EASES FDI NORMS IN RETAIL SECTOR
Union cabinet eased investment rules for the retail sector on Thursday in a renewed attempt to attract foreign supermarket operators such as Wal-Mart Stores Inc. and Tesco. According to the proposed norms, Govt. is likely to expand the definition of mi-cro, small and medium enterprises (MSME) by allowing retailer to procure from them even if they have exceeded total investment of $2 Mn. in plant and machinery. Under the new policy 50% investment in backend infrastructure will be "restricted" only to the first tranche of $100 Mn. while subsequent investments into backend will be decided by the retailer.
Financial focus
RBI KEEPS KEY RATES UNCHANGED; GDP FORECAST
CUT TO 5.5%
RBI Governor, D. Subbarao, kept policy rates unchanged at the quarterly monetary poli-cy review on July 30, but took a dovish stance. Consequently, the key repo rate remains at 7.25%, reverse repo at 6.25% while cash reserve ratio remains at 4%. Lowering the GDP growth projection for the current fiscal to 5.5% from 5.7%, the central bank said the external sector is the "biggest threat" to economic stability. It also said that the recent liquidity tightening measures, taken to support the rupee, will be rolled back in a calibrat-ed manner as stability is restored to the foreign exchange market, enabling it to revert to
the policy of supporting growth with continuing vigil on inflation.
HSBC PMI, JULY AUTO SALES DATA WEIGH DOWN MAR-
KETS
Sensex fell 153 pts. to end at 19164.1, Nifty at 5677 as M&M fell 4% on weak July sales, & PMI shrank the most in 4 yrs. to 50.1. Meanwhile, automobile sales in India have been slow for more than a year now. However, utility vehicles saw strong growth for much of FY13, helped by increased price differentiation between petrol and diesel and new launches like M&M's XUV500 and Quanto, Renault's Duster and Maruti Suzuki's Ertiga. However, even SUVs have now hit speed bumps since last few months following a hike in excise duty by the government, and partial de-regulation of diesel prices.
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ASIAN-PACIFIC MARKETS CONTINUE THEIR RALLY
Asian-Pacific markets kept rising for a second day Friday as investors' appetite for risk improved amid positive economic data and assurances by the world's central banks that their loose monetary policies will continue. Japan Nikkei 225 jumped 3.3%. Hong Kong's Hang Seng Index rose 0.5%. Australia's S&P/ASX 200 gained 1.1%. China's Shanghai Composite was flat. South Korea's Kospi edged up 0.1%. Bucking the trend, India's Sensex was down 0.7%.
SENSEX FALLS 153 PTS; NIFTY BELOW 5700 ON RUPEE WOES
Sensex fell 153 pts. to end at 19164.02, Nifty at 5677.90 as JSPL fell 8%, Power Grid fell 11.5%,Banks like ICICI, BoB & Union Bk fell on NPA worry. The Nifty shed 400 points in eight sessions and also posted a biggest weekly loss since week ended March 22. For the
week, the index tanked 3.5 percent or 208 points while the Sensex plunged nearly 3 percent.
TOP STORIES : WORLD
U.S. ECONOMY GROWS STRONGLY IN 2ND QUARTER
The U.S. economy grew at a stronger-than-expected 1.7% annual pace in the second quar-ter, a result that is expected to provide further impetus for the Federal Reserve to curb its bond-buying program. Separately, strength was also evident in the ADP National Employ-ment Report, with private employers adding 200,000 jobs in July, matching June's gain. Gross domestic product grew at a 1.7 percent annual rate, the Commerce Department said on Wednesday, stepping up from the first quarter's downwardly revised 1.1 percent expansion pace.
CHINA MANUFACTURING STAYS IN GROWTH MODE
China's manufacturing activity maintained positive growth in July, with the official pur-chasing managers' index rising to 50.3 from 50.1 in June. The latest reading topped expec-tations, which saw a slide into negative territory at 49.8. The crucial employment index also suggested companies are continuing to shed workers, but at a slower pace, with the index at 49.1 in July from 48.7 in June. That was the 14th month below 50, according to the NBS. The sub-index measuring the business outlook jumped to 56.4 in July from 54.1 in June, indicating improved sentiment in the coming three months among business owners
EUROZONE MANUFACTURING RETURNS TO GROWTH AF-
TER 2 YEARS OF SHRINKAGE
Eurozone manufacturing returned to growth for the first time in two years last month, as the region's purchasing managers' index edged onto positive ground at 50.3, up from 48.8 in June. "This hopefully places the sector nicely to provide a positive spur to the third-quarter GDP numbers and help the euro area exit recession," said Rob Dobson, senior economist at PMI compiler Market
MARKET ACTIVITY
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ECONOMICS ECB HOLDS INTEREST RATES STEADY
The European Central Bank has kept interest rates at 0.5%. President Mario Draghi says there might be "gradual recovery in economic activity in the remain-ing part of the year and in 2014." However, Draghi has pledged to keep rates low for an extended time. European Central Bank (ECB) president Mario Draghi has said there are some tentative signs of an economic recovery in the Eurozone.
S&P SEES STRONGER GROWTH FOR PHILIPPINES,
FUELED BY DOMESTIC DEMAND
Standard & Poor's is now projecting 6.9% growth for the Philippines this year, driven by strong domestic demand. The latest forecast is up from an earlier outlook of 6.5% growth. S&P singled out the Philippines and Indonesia among Southeast Asian nations as economies likely to outperform in the region, where more export-dependent economies are expected to struggle.
SUBBARAO TO STEP DOWN, PUTTING INDIA IN
MARKET FOR NEW CENTRAL BANK CHIEF
Indian central bank chief D. Subbarao has declined to stand for another term, and the government is searching for a successor, said Finance Minister P. Chid-ambaram. Subbarao's current term expires in September. He has been in office since 2008.
DID YOU KNOW?
Recently, an incident in West Bengal challenged the accounting conventions and surprised the regulators. Vikash Metal and Power Ltd., based out of Kolkata, have shown an ‘extraordinary loss’ of INR 90 crores in the annual report furnished to its shareholders. Interesting point lies in details claimed by the company. This loss was caused due to robbery of plant and machinery, stock and believe it or not even facto-ry building! What makes it scary is that annual report with these facts got au-dited and endorsed by auditors too. So next time, you might see a thief running on the road with a building on his shoulders!
NSEL BACKLASH: FINANCIAL TECH, MCX SHARES
NOSEDIVES
Shares in Financial Technologies (India) Ltd (FTIL) extended Thursday’s losses and fell a further 40% after its unlisted unit National Spot Exchange Ltd (NSEL) suspended trading of all one-day forward contracts, except its so-called e-series con-tracts. Shares of FTIL and MCX fell 64.6% and 20%, respectively, on Thursday.
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Redington India Period CMP Call Target Stop Loss
1 week 59.60 Buy 63 57.5
Avneet’s Call
The stock closed above its 10 day moving average last Friday. The
stock seems to be bottomed out for the moment with RSI close to 40
and a reversal in (12, 26) MACD is showing signs of bullish pattern
in the stock. Also the stock broke the first resistance level of 58.85.
Hexaware Tech Period CMP Call Target Stop Loss
1 week 115.70 Buy 124 111
The stock has rallied from lows at around 80 to 115 within a month.
The bullish rally in the IT stocks is due to the depreciation of INR
which increased their margins for Q1. After the steps taken by RBI, the
INR was looking to stabilize but reached to new life time lows last
Friday. We expect INR to further depreciate which could have an im-
pact on the margins of company over short term. The stock is already
trading above its 10 day moving average and since the market sen-
timent looks very weak, we expect some bounce back in IT stocks.
Prestige Estate Period CMP Call Target Stop Loss
1 week 123.60 Buy 130 119.4
The stock has found a support after good Q1 results at around 120-
122. Macquarie’s also gave the stock outperform rating. The RSI are at
30 and MACD showing signs of reversal i.e. bullish pattern on last
Friday. The stock is trading close to its 10 day moving average and is
eyeing the Aug launch for 1566 apartment Bangalore project which
could have a positive effect on the share after most real estate stocks
have beaten down.
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Bhushan’s Call
Financial Technologies
Period CMP Call Target Stop Loss
1 week 152 Sell 120 165
The carnage that happened with FTIL won’t subside unless some
clarity is obtained regarding the clarity of payment of entire
obligation. The deliverables % for the stock is very low at
8.8%, and Reliance Capital also offloaded its holdings of 11.91
lakh shares at an average price of 212. The stock took a support
of 105-115 levels on Friday, and bounced back to close off the
day’s lows. This is purely a trading call , as the daily and weekly
charts for the same are also strongly bearish and we feel some more
downside is left in the stock.
Coal India
Period CMP Call Target Stop
Loss
1 week 254 Sell 245 260
Coal India came out with a disappointing set of numbers on
Saturday, with Q1 net profit dipping 16.5% to Rs 3,731 cr & net
sales declined marginally to Rs 16,472 crores in April-June quarter
from Rs 16,500.6 crores in a year ago period, which too came in
lower than forecast.. It has broken its major support of 290, with
conviction and it is giving a strong bearish signal. It also marginally
missed its output target for July by two percent producing 32.77
million tones (MT) of dry fuel during the month. Got going for 5%
of divestment in this month itself , may drag the counter lower, due
to low setting of OFS price.
Sun TV Network Period CMP Call Target Stop Loss
1 week 427 Buy 445 420
Sun TV showcased good set of numbers with Q1 net un-
changed at Rs 164 cr, sales up 41%. Rather than growth in bot-
tom line , the top line growth looks very impressive. It has also
formed a pattern of ‘Engulfing Bullish’ on daily candlestick charts.
Also its upward movement on Friday was very strong amid huge
volumes , and high built up of long position in F&O counter.
Avneet Bhulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata campus)
Disclaimer : InFINeeti and IIFT do not take any responsibility regarding the authenticity of above calls. Please consult your financial
advisor before taking any investment decisions
Stock Name Call Target Price
Dish TV Sell 48.5
TARGET HIT
HUL Sell 620
Jubilant Food-
works Sell 1075
SKS Micro-
finance
Buy 115 Last Week’s Stock Calls that hit
their target levels
Financial focus Weekly Newsletter
InFINeeti
InFINeeti Team
Aakanksha Hajela | Bhushan Kanathe| Kunal Maheshwari| Vaibhav Garg| Md. Umair Ansari
Date Stocks Buy Price Target Sold At Profit/Loss P/L % Invested Column1 P/L Weekly
Avneet’s Returns
6-Jul
IGL 278.8 300 289.31 10.51 3.77% 1257
1753 1.75% Jubilant Food-
works 1130.95 1260 1131 0.05 0.00% 1
PFC 137.95 140 140 2.05 1.49% 495
15-Jul
Maruti Suzuki 1447.95 1390 1448 -0.05 0.00% -1
384 0.38% DCB 52.25 55.45 50 -2.25 -4.31% -1435
Strides Arcolab 771.85 815 814 42.15 5.46% 1820
22-Jul
Maruti Suzuki 1451 1390 1390 61 4.20% 1401
2376 2.38% Jain Irrigation 55.3 58 53.5 -1.8 -3.25% -1085
Vijaya Bank 43.7 41 41 2.7 6.18% 2059
29-Jul
Jubilant Food-works
1150 1076 1077 73 6.35% 2116
5249 5.25% SKS Microfinance 104 115 115 11 10.58% 3526
DRL 2290 2400 2263 -27 -1.18% -393
Total 9762 9.76%
Bhushan’s Returns
6-Jul
Sun Pharma 1036 1080 1080 44 4.25% 1416
2811 2.81% Wipro 351 365 365 14 3.99% 1330
DLF 177.35 165 177 0.35 0.20% 66
15-Jul
M&M 905 870 870 35 3.87% 1289
2230 2.23% IGL 289 310 310 21 7.27% 2422
IDFC 135 145 129 -6 -4.44% -1481
22-Jul
Bajaj Auto 1972 2050 2050 78 3.96% 1318
1967 1.97% BHEL 174 168 168 6 3.45% 1149
GAIL 333 342 328 -5 -1.50% -501
29-Jul
Dish TV 52.5 48.5 48.5 4 7.62% 2540
2973 2.97% HUL 660 620 620 40 6.06% 2020
Yes Bank 367.5 380 350 -17.5 -4.76% -1587
Total 9981 9.98%
Date Stocks Buy Price Target Sold At Profit/Loss P/L % Invested Column1 P/L Weekly
* The returns are calculated on an investment of INR 1 lakhs/ person in one week, equally divided among the 3 calls given for that particular week (i.e. 33333.33 per stock in a week)