Wednesday, June 29, 2016

Winning Strokes: Think Different
Unitech Ltd (Rs.5.86), continued its upward journey even yesterday, as the stock made an intra-day high of Rs.5.91 in the BSE before closing at Rs.5.86; with a whooping volume of 170.01 lakhs. According to my close sources, the company is taking various measures to bring it back to track. The stock is expected to double in the next 30-45 days. The Wikipedia says: "Unitech Limited is India's second largest real estate investment company, and has recently claimed to be the largest real estate builder in the country". Moreover, there are hopes that the capital market regulator, the SEBI will consider proposals for relaxed norms for the REITs and an easier set of compliance rules for foreign fund managers keen to relocate to India.

The scrip of Jaiprakash Associates Ltd (J P Associates Ltd) today moved to Rs.7.65, before cooling down at Rs.7.51, in the BSE. The stock would have closed near Rs.7.57-7.59 ranges, however, late selling pulled the price down.  The total loans of Jaiprakash Associates, the real estate and infrastructure company, stand at Rs.58,250 crore against a market capitalisation of less than Rs.2,000 crore. The RBI recently came up with Sustainable Structuring of Stressed Assets, a system that allows banks to partly own borrower companies. Most of the analysts have pointed out that many lenders may be forced to opt for a “haircut” or forego part of their principal and interest rates to prevent these loans from turning bad - - this is indeed music to the shareholders of J P Associates Ltd. The promoters holding in the company stood at 39.38 % while Institutions and Non-Institutions held 27.02 % and 33.59 % respectively. All time high of Rs.308.86 on 4 January 2008. Today the percentage of Deliverable Quantity to Traded Quantity was whooping 41.40%, indicating huge accumulation, by the prudent investors. Moreover, the formation of Doji, with a long upper shadow, indicates that bullishness in its share price is likely to continue, for more time. Therefore, the investors are suggested to buy the scrip in every decline; as it is likely to test Rs.10.5 - 14 soon.

Jaiprakash Associates Ltd has withdrawn itself from some of its cement markets in north India as part of streamlining its operations even as lenders continue to prod the firm to shed assets and pare debt.

My another recommended counter, Lanco Infratech Ltd today made an intra-day high of Rs.4.79, before closing at Rs.4.73. The Economic Times, today wrote: "The government is mulling an additional Rs 25,000 crore allocation to roads, railways and power sectors over and above the allocation made to them in the Union Budget, potentially providing a mid-year boost to public spending". This stock will make new highs in this fiscal and hence add it on all declines. 

Meanwhile, the union Finance Minister Arun Jaitley participated in the First Annual General Meeting of Asian Infrastructure Investment Bank (AIIB) held at Beijing in China on last Saturday. Outlining Indias development paradigm, Jaitley said that India has undertaken reforms in FDI and initiated large investments in rural infrastructure, national highway, inland waterways, shipping, power sector and smart cities etc.

Speaking on the role of AIIB, the Finance Minister said: AIIB presents a much needed additional financing window dedicated to infrastructure projects and meeting the financing gap that may be beyond the capacity of the individual countries and the existing MDBs. India has a huge unmet demand for investment in infrastructure and is preparing basket of projects worth US$ 2-3 billion for AIIB funding in the areas of Urban Development (including Smart Cities), Energy, Urban Transport, Railways, Inland Waterways and Water Supply.

India’s infrastructure output grew an annual 8.5% in April, at its fastest pace in 17 months, mainly helped by a favourable base effect, government data showed.

The output expanded 2.7% for the fiscal year 2015/16 that ended on March 31, compared with a 4.5% growth in the previous fiscal year, the data showed on Tuesday.

Electricity production grew 14.7% and fertiliser output jumped 7.8% in March from a year earlier, the data showed.

In another significant development, highlighting that LIC's core focus would be infrastructure investment, the life insurer has decided to be a partner in India's first sovereign wealth fund earmarked for infrastructure sector, reported Press Trust of India. The Rs.40,000-crore National Investment and Infrastructure Fund (NIIF) will be owned by the government and other partners in a 49:51 ratio. 

The NIIF was set up to attract foreign and domestic investments into the infrastructure sector, and is effectively a government-owned investment manager.While an initial budgetary allocation of Rs 4,000 crore has already been made to NIIF, more funds will be allocated going forward, the government said in a release on Monday. The NIIF could soon operationalise initiatives along with the Qatar Investment Fund, the Abu Dhabi Investment Authority and JSC Rusnano of Russia.

The Economic Times, wrote June 29, 2016: The performance of the corporate sector has improved in the past year as the number of leveraged companies has fallen and the amount of debt in companies' books has also declined, Reserve Bank of India (RBI) said in its bi-annual Financial Stability Report (FSR). 

There is no stopping of Punjab National Bank and Allahabad Bank Ltd. Punjab National Bank made an intra-day high of Rs.105.50, before closing at Rs.104.20. The stock of Punjab National Bank Ltd, which recommended at Rs.79 and later asked to accumulate on all declines, is looking slightly overbought on the chart. 
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