This Blog helps in disseminating FREE information related to Stock/Share Markets (domestic and overseas), Finance/Investments & Current Affairs. The content of this blog is for information purpose only - not recommendations, to Buy or Sell Securities.
The data used here, is derived from the sources, deemed to be reliable, but their accuracy and completeness is not guaranteed. The author is not responsible for any loss in investments made, based on the inputs provided here - 28th May, 2006.
Suzlon Ltd which bought Senvion SE for EUR 1.5 billion way back in 2007, has been forced to give up the German firm at a loss with a sale to private equity firm, Centrebridge Partners LP fetching him just EUR 1 billion. While Tulsi Tanti, who founded Suzlon Energy to make wind turbines, may justify the valuation and claim there’s a gain on the currency, it’s a fact that global energy majors were valued more highly in mid-2014.
Suzlon’s bankers, however, will be a relieved lot because it was evident that the firm, which had piled up a debt of R17, 323 crore, was becoming increasingly vulnerable to a bankruptcy. Already the Pune-headquartered firm had defaulted on a $209 million repayment in 2012 and bankers had restructured R9,500 crore worth of borrowings.
Now even after Rs.6,000 crore of the Rs.7,200 crore that the Senvion sales fetched is returned to the banks, the firm will remain hugely over leveraged.
The investors who have still not booked profit in the counter (as it touched all my short term targets: Rs.15 and Rs.17) are suggested to exit the stock of Suzlon Energy Ltd (Rs.14.86), lock, stock and barrel and enter more fundamentally strong companies like Jindal Saw Ltd (Rs.84.60).
LOANS AT LOW INTEREST RATES
If you are looking for loans at BARGAIN INTEREST RATES, from Private Financiers, then you can immediately contact me (till the fund remains) for more details at: sumanm2007s@gmail.com or suman2005s@rediffmail.com.
You will have to pay a one time "Service Charge" of around 2-3% (conditions apply) on the loan amount; but since the interest rate would be LOW and you would get it processed at a lightening pace (Usual Time: 2-3 weeks), I feel it should not bother you. Also, the paper works are much less here....
Listed and unlisted companies (especially those who want to replace their high cost debts with cheap ones), can also approach me for project loans above Rs.2000 crore (Rs.20 billion plus) at interest rates, which will be less than PLR of most of the PSU banks and the NBFCs.
Hence, rush your applications today. Minimum Loan Amount is Rs.3 lakhs for personal loan and Rs.5 lakhs for other types of loans.
Will the Crude Oil Prices Move-up in the Short Term: Fundamental and Chartical (Technical) Views
The American consumer got a surprise gift this holiday season: the dramatic collapse in the price of oil. The Crude Oil prices have nosedived in the past few months. The spot price of Brent crude reached $115 a barrel in June, 2014 and was above $100 a barrel as recently as September. Since then, it plunged from north of $100 a barrel to less than half that level now (< $50 a barrel).
Oil prices have been, the victim of a growing surplus brought on by booming U.S. production and weaker-than-expected demand. As prices have careened toward six-year lows, the market has become more volatile. That has given investors opportunities to score big profits by betting on further declines--some traders say the market has fallen too far, too fast—creating the potential for an equally sharp rebound.
The trend has sent US gas prices down to a national average of under $2.20 per gallon, with rates under $2 per gallon in some states.
The benefits of cheap gas are widespread, though the price declines are more of a mixed bag for economies in U.S. states with large energy sectors.
The collapse of crude oil over the last year is one of the biggest asset crashes since the Great Recession and therefore, where there’s crisis, there’s often opportunity.
Many money managers are staying on the sidelines, searching for clues that could mark a turning point for the market. These can range from economic growth forecasts for major oil consumers such as China, to retail gasoline prices and auto sales in the U.S., which could drive future demand. Lately, the market has become particularly focused on a survey of drilling rigs operating in the U.S. that is released each Friday by oil-field-services company Baker Hughes Inc., which can be an early indicator of how quickly production will grow in the future. The number of oil rigs operating in the U.S. has fallen for six weeks in a row.
From a historical perspective, this collapse ranks a bit smaller than the crash in 2008. During that period, crude dropped from $140 per barrel to $40. While the current drop from $108 per barrel during the June 2014 peak to $46 is significantly smaller, that they’re comparable at all is staggering.
Now, there is a sharp divide among energy experts regarding the future direction of crude oil prices. The Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite sometime and $100 a barrel will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel.
However, don't get to pessimistic, there are still plenty of optimists like billionaire T. Boone Pickens, who has argued that oil will bounce back to $100 a barrel within 12 months-18 months. Pickens thinks that Saudi Arabia will eventually give in and cut production.
Though, this may be wishful thinking, supply and demand equations point to more lean times ahead for oil producers.
Now to understand this phenomenon, from a different standpoint, let us look at the few charts below.
Crude oil indicated that a possible major top was in place back in August 2014 when prices broke below a two-year trend line, signaling a change in long-term trend. This is shown in the above chart when the price of WTIC Light Crude Oil fell below $95 / bbl.
In recent weeks, the decline in crude oil has entered the target zone of the four-year symmetrical triangle top completed in October which is around $44/bbl. Any bounce back might face stiff resistance after several support levels were broken.
From 2011 to mid-2014 and including a brief period in 2008, oil prices were at historically high levels, higher than where it was during the period 1979 to 1983 when the Iranian revolution and the Iran-Iraq war disrupted oil supplies. And that’s after adjusting for inflation.
We have seen from the above, that Chartically speaking, the crude oil prices looks negative in the short term. Now let us look at some of the pros and cons of this episode.
International Energy Agency (IEA) currently projects that supply will outstrip demand by more than 1 million barrels per day, or bpd, this quarter, and by nearly 1.5 million bpd in Q2 before falling in line with demand in the second half of the year, when oil demand is seasonally stronger.
That said, these projections are built on the assumption that OPEC production will total 30 million bpd: its official quota. However, OPEC production was 480,000 bpd above the quota in December. At that rate, the supply-and-demand gap could reach nearly 2 million bpd in Q2.
Theoretically, this gap between supply and demand could be closed either through reduced supply or increased demand. However, at the moment economic growth is slowing across much of the world. For oil demand to grow significantly, global GDP growth will have to speed up. On the flip side, after QE in Europe, there are talks of boosting of the economies of the EU. Also, India is coming up strongly, with the current stable government in place. Hence, we cannot take the argument of "Supply Outstripping Demand in Future" on the face value. Moreover, any supply cut either from the US or from the OPEC, could push oil prices to rebound in the next two-three quarters.
Now, there are two ways that global oil production can be reduced. One possibility is that OPEC will cut production to prop up oil prices. The other possibility is that supply will fall into line with demand through market forces, with lower oil prices driving reduced drilling activity in high-cost areas, leading to lower production.
OPEC is a wild card. A few individuals effectively control OPEC's production activity, particularly because Saudi Arabia has historically borne the brunt of OPEC production cuts. Right now, the OPEC bosses have opined to let market forces work. The moot point is: will Saudi Arabia cut production? In the 1980s, when a surge in oil prices drove a similar uptick in non-OPEC drilling and a decline in oil consumption, Saudi Arabia tried to prop up oil prices. The results were disastrous. Saudi Arabia cut its production from more than 10 million bpd in 1980 to less than 2.5 million bpd by 1985 and still couldn't keep prices up. But having said, this time the there are chances that other countries in OPEC could try to chip in with their own production cuts to take the burden off Saudi Arabia. However, the other members of OPEC have historically been unreliable when it comes to following production quotas. It's unlikely that they would be more successful today. The problem is that these countries face a "prisoner's dilemma" situation. Collectively, it might be in their interest to cut production. But each individual country is better off cheating on the agreement in order to sell more oil at the prevailing price, no matter what the other countries do. With no good enforcement mechanisms, these agreements regularly break down. But then any past track record cannot be future almanac. Isn't it? Therefore, we cannot totally rule out production cuts by the OPEC, if the Crude Oil continues to trend low.
Another interesting point which needs to looked at is that during the week ending Jan. 9, U.S. oil production hit a new multi-decade high of 9.19 million bpd. Surprisingly, in the last June -- when the price of crude was more than twice as high -- U.S. oil production was less than 8.5 million bpd. Any clues, about this outlandish US stance?
Conclusion: We have seen from the chart above, that at the present moment the crude oil looks bearish, but this could change, with change of stance, either from the US or from the OPEC. Meanwhile, the demand could pick up from China, India, Japan and other major oil consuming nations.
In the long run -- barring an unexpected intervention by OPEC -- oil prices will stabilize around the marginal long-run cost of production (including the cost of capital spending). This level is almost certainly higher than the current price, but well below the $100 a barrel levelthat's been common since 2011. India, China and US would be happy if the crude oil price stays lower than $80 per barrel.
West Texas Intermediate oil prices fell sharply on Friday, as concerns over slowing demand and ample supplies combined with a rally in the dollar weighed.
To add salt to the wound, (i) the U.S. Energy Information Administration said Thursday that U.S. crude oil inventories rose by 10.1 million barrels last week, the biggest weekly gain since March 2001 (ii) the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to more than 11-year highs of 95.77 on Friday, before trimming gains to end at 95.32, up 0.69% for the day and 2.33% higher for the week. A stronger U.S. dollar usually weighs on oil, as it makes dollar-priced commodities more expensive for holders of other currencies. (iii) the euro fell to fresh 11-year lows against the greenback after the European Central Bank unveiled a €1.2 trillion asset purchase program on Thursday. The central bank will purchase €60 billion in assets per month, starting in March and continuing until late 2016, to combat slowing growth and inflation in the euro area. Now, we need to asses future Chinese demands, the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand. Indian economy is also improving, which will fuel energy demand.
Now let us summarize, why the Crude Oil price fell nearly 60% since June:
(i) Apprehensions that the World Growth will slow down--which had a sentimental effect in the Crude Future Market.
(ii) The Organization of Petroleum Exporting Countries resisted calls to cut output,
(iii) The U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
(iv) The U.S. dollar index, rose to more than 11-year highs of 95.77 on Friday, before trimming gains to end at 95.32, up 0.69% for the day and 2.33% higher for the week.
If there are positive changes change in any of the above four points especially from the U.S. whose inventories of oil and refined products have been rising by about 10 million barrels a week recently, we could see a rebound of the Crude Oil prices. The global supply demand balance can also improve from Q3, though it could worsen again in the first half of 2016 due to the typical seasonal drop in demand.
Last month, the IEA found that U.S. petroleum storage capacity was only 60% full, but commercial crude oil inventory was at 75% of storage capacity. This percentage could rise quickly when refiners begin to cut output in Q2 for the seasonal switch to summer gasoline blends. Traders have even begun booking supertankers as floating oil storage facilities, aiming to buy crude on the cheap today and sell it at a higher price this summer or next year. If oil storage capacity becomes scarce later this year, oil prices will have to fall even further so that some existing oil fields become cash flow negative. This makes the case for slowing the supply vector.
At today's prices, oil investment will not be sufficient to keep output up in 2016. Thus, T. Boone Pickens is probably right that oil prices will recover in the next 12 months-18 months, even if his prediction of $100 oil is too aggressive. With an increase in storage capacity, the price of crude oil could improve.
And the big news over the weekend was the landslide victory for radical left wing party Syriza in Greece's parliamentary elections. Syriza ran on a platform of rejecting the austerity measures imposed on Greece by the Troika following the eurozone crisis in 2010. This could change the dynamics in Europe. Also, an improvement in sentiment due to stimulus by the European Central Bank over the coming days could fuel positive bets, on the Crude Oil futures; though the bearish overhang on crude remains with supply exceeding demand. And yes, crude at $60 per barrel by the year-end does not look too steep a target.
However, the problem will rise if OPEC, US and other major oil exporting countries continues to maintain that Oil Output Must Rise to Compensate for Price Drop.
It is to be understood that these countries, lost about 50 percent of their revenues because of the slump in oil. Oil slid more than 50 percent since June as the U.S. pumped at the fastest pace in more than three decades and the Organization of Petroleum Exporting Countries maintained its daily production target of 30 million barrels, resisting calls to makes cuts to reduce a supply glut.
But this cannot continue for long, as many Oilfield services companies, which handle the rigs for exploration and production are scaling back their work forces. Schlumberger, the largest oilfield service company, said last week it would lay off 9,000 employees.
“The time has come for a meeting, possibly a summit meeting, for all producers, OPEC and non-OPEC,” to discuss ways to lift oil prices, Ayad Allawi, a Vice President of Iraq, said in an interview. “Next year we will start seeing prices rising, it will level off between $60 and $70. This year it will remain between $40 and $50.
One of the biggest lessons from the financial-market crash half a decade ago was ignoring panic and instead scooping up good assets at fire-sale prices. Would that lesson apply to oil today?
The first thing to consider is whether there’s any reason prices will recover at all. What are the fundamentals? Unlike corporations, oil as a commodity can’t really go bankrupt. Oil is a necessity, demand is relatively inelastic, and it dominates in practically everything that requires energy. It’ll always be needed over the immediate time frame. While the price may not hit $100 again in the short term, there is a fundamental limit to how low it can go.
At a bare minimum, oil should always cost what it takes to pump it out. According to 2008 estimates from the International Energy Agency, that value varies considerably depending on location and efficiency. Middle Eastern oil has been estimated to cost approximately $6-$10 per barrel due to the large economy of scale and the relatively mild near-surface conditions. Though these locations have very low costs, they don’t have sufficient capacity by themselves to satiate demand. For other onshore pumping, costs can be around $6-$39, and for deep-water offshore wells, costs can reach $32-$65 or more.
More difficult sources such as oil sands were estimated at around $30-$70 and shale oil wells were estimated at $50-$100. Since the cause of oil’s current crash is rooted in Saudi Arabia’s goal to push shale oil out of business while leaving conventional drilling profitable, there’s a potential bottom of $30-50 per barrel — close to today’s prices. While nobody except Saudi Arabia knows for sure, there’s a high chance prices will be allowed to rise once the goal of squeezing shale is complete.
Second consideration: How long would it take to profit from such an investment? History doesn't have a clear answer on this as the 1980s oil crash took decades to recover. However the 2009 oil crash only took 2 years, much faster than the stock market recovery. If Saudi Arabia’s goal is to push shale out, taking into account how long hedges last for, how long companies can operate in the red, and how fast they can slim down, one to three years may be reasonable.
Lastly, the most important question: How to profit from this? For the average retail investor, this is trickier than at first glance. The most obvious ways are betting on the crude-oil commodity price itself, betting on energy-sector companies and betting on oil-producing countries.
Besides, a report by the International Energy Agency (IEA), said there were signs lower prices had begun to curb production in some areas, including North America. So, at the moment it is anybody's game in the Crude Market; but I feel the Crude Oil prices have more or less bottomed out at the current moment. A slow rise is in the offing in this week.
Yes, it is true. I recently discovered to my dismay that a blog having the URL: http://www.rajatheetradergroup.blogspot.in, is copying word by word, some of my blog posts, without even having minimum courtesy of informing me......Is this an act of "Cyber Plagiarism"?
Anyway, have a look at the blog-post on Rohit Ferro Alloys Ltd, which is clubbed together with my take on the market shenanigans and then ......Oh yes!!.....The Photo of a "Beautiful Damsel". Really Outlandish!! What has this lady to do withRohit Ferro Tech Ltdis beyond my comprehension....Huh!! On the left hand side is the screen shot of a part of that blog-page. To get a full view of that Blog, please CLICK HERE.
If you remember, in 2005-2012 period too few blogs used to do the same. The point is that I have no problem, if they copy my contents and put themon their blogs and websites, but at least they should inform me, about the development. Isn't it? This is really horrible and unfortunate!!
The scrip made a 52-week high on 22 January, 2015. Or in other words the scrip more than doubled in a year (approximately) and gave decent returns to the Patient Investors.
The company came out with satisfactory set of numbers for the Q3FY15:
(i) Revenue for the quarter stood at Rs.434.3 Cr, an increase of 9% over corresponding quarter in FY14.
(ii) EBIDTA came at Rs.359.6 Cr in Q3FY15, an increase of 11% over corresponding quarter in FY14.
(ii) Commensurately, net profit for the quarter increased to Rs.98.3 Cr which is 5% higher than in the corresponding quarter of FY14.
(iv) Earning per share for Q3FY15 stands at Rs.2.30.
The long term investors can keep holding the stock of Essar Ports Ltd (Rs.109.10) with a SL of Rs.102. Alternatively they can accumulate the scrip on all declines, till Rs.104.
Pratit Patel Recommends a Pig Iron and a Steel Counter
Sathavahana Ispat Ltd
BSE Code: 526093
NSE Symbol: “SATHAISPAT”
CMP: Rs.43.6
SIL is primarily engaged in the manufacture and sale of (i) Pig Iron with a rated capacity of 210,000 tpa; (ii) Metallurgical Coke with a rated capacity of 450,000 tpa and (iii) co-generation cum thermal power of 50 MW. As a backward integration, SIL has set up a 2,98,800 tonns per annum sister plant and 30Mw captive thermal power plant and as a forward integration has setup a 210000 tonns per annum. Ductile Iron making plant and 25000 tonns per annum DI pipe fittings plant. Pig iron is used as a raw material in engineering, construction, and foundry industries; and metallurgical coke is used as a raw material in iron making.
The company is also involved in the co-generation of power. Sathavahana Ispat Limited also exports its products. The company was incorporated in 1989 and is headquartered in Hyderabad, India.
It has an equity base of Rs.50.9 crore that is supported by reserves of Rs.127.75 crore. It has a share book value of Rs.35.1. SIL has report decent growth for H1FY2015. It has recorded net sales of Rs.501.02 crore & net profit zoomed to Rs.16.18 crore in first half of FY15. H1FY15 EPS is Rs.3.18. SIL can report EPS of Rs.7.26 for FY15 and scrip is trading at PE ratio of just 5.7.
At the current level, the stock is looking extremely hot for investors. One can buy this stock keeping stop loss of Rs.33. On the upper side stock will zoom up to 55 levels shortly while it will zoomed to Rs.72--75levels in 12--15 months. Its all-time high rate is Rs.110.
Rishab Digha Steel and Allied Products Ltd
BSE Code: 531539
CMP: Rs.21.5
Something is cooking in this stock. One can buy this stock at Rs.19. On the upper side stock will zoom up to Rs.27 levels in short span of time & if stock cross its 52 weeks high Rs.27, it can go up to Rs.32--35 levels… Note: (i) Pig Iron is semi-finished metal, produced from iron ore in blast furnace, containing 92%, high amounts of carbon (typically up to 3.5 %), and balance largely manganese and silicone plus small amounts of phosphorus, sulfur, and other impurities. Pig iron is further refined in a furnace for conversion into STEEL It gets its name from the shape of trough (resembling a pig) in which it used to be cast in the 19th century [http://www.businessdictionary.com] (ii) Rishab Digha Steel and Allied Products Ltd is mainly engaged in the job work of Decoiling, Straightening, Cutting, Shearing of Hr. CR and MS Coils / Sheets. It has no precise licensed capacities and installed capacities as such. In other words, the sales mainly consist of job work income. The income from Job work mainly includes recoveries for Decoiling, straightening, Cutting, shearing and warehousing and other small recoveries on account of loading and unloading, transportation charges. The Company writes in its FY14 annual report: "Your Company has a vital role to play in the developing Economy, as the job orders of de-coiling, straightening, shearing and cutting of varies sizes of Iron and Steel Coils are decreasing".
Sunday, January 25, 2015
LOANS AT LOW INTEREST RATES
If you are looking for loans at BARGAIN INTEREST RATES, from Private Financiers, then you can immediately contact me (till the fund remains) for more details at: sumanm2007s@gmail.com or suman2005s@rediffmail.com.
You will have to pay a one time "Service Charge" of around 2-3% (conditions apply) on the loan amount; but since the interest rate would be LOW and you would get it processed at a lightening pace (Usual Time: 2-3 weeks), I feel it should not bother you.
Listed and unlisted companies (especially those who want to replace their high cost debts with cheap ones), can also approach me for project loans above Rs.2000 crore (Rs.20 billion plus) at interest rates, which will be less than PLR of most of the PSU banks and the NBFCs.
Moreover, I feel many of you are looking for personal loans (a short-term loan) to assist you with your finances, especially for investing in equities (share market), when the Indian markets are on a high...... However, please note that a "Personal Loan" is neither a "Business Loan" nor a long-term "Mortgage Loan". Eligibility criteria for personal Loan is different for salaried class and self employed individual. Some of the key points which are looked into for granting personal loans are: Your age, Annual income, Total Work Experience, Educational Qualification, etc. Hence, rush your applications today. Minimum Loan Amount is Rs.3 lakhs for personal loan and Rs.5 lakhs for other types of loans.
Cement prices shoot up by Rs.100, builders left in the lurch
[Editor: The text says, "Apart from cement, the PRICE of STEEL has also witnessed an upward movement". This was expected as the cost of a single building material cannot increase, in isolation. After the monsoon, the construction activity have picked up in full-steam, all over India, and it is only time that the steel prices would rise-up with full-gush; to balance the domestic demands. Meanwhile, the coal prices have been on the downswing in recent times, adding cheer to the bottomline of the steel companies. The import of coal is projected to rise to as much as 240 million tonnes in 2015-16. Earlier there were media reports that: The Chinese government has unveiled an ambitious plan to Rapidly Reduce Steel Production in the next few years in a bid to help solve the worsening pollution crisis, which is now the No 1 concern for many Chinese citizens. In his first public appearance as the new Premier last year, Li Keqiang said fixing the air quality would be the top priority. This is music for the Indian Steel sector which is struggling hard to cope with cheap Chinese Imports. The investors are therefore, suggested to buy the steel stocks in BULK and keep holding, for some mind-boggling returns in the short term]
Sunday, 25 January 2015: Escalating cement prices are affecting the real estate sector, as the input cost has increased substantially. The Builders Association has demanded that the state curb prices of cement and other construction materials, to avoid various construction work coming to a halt.
What is the present scenario?
Coupled with the short supply, the price of cement has increased by around 30% over the past month. Apart from cement, the price of steel has also witnessed an upward movement.
The price has risen to Rs.360 per 50 kg, as against Rs.260 per 50 kg last year. Dewang Trivedi, president, Builders Association of Navi Mumbai (BANM), alleged that the mismatch between demand and supply has been created by putting the manufacturing of cement on hold for a brief period. "The poor supply has pushed the prices up," he said.
In what way will construction work be hit?
According to developers from city, if the situation continues, construction work is likely to come to a halt. "The input cost has increased beyond limit, with the rise in cement price as well as other construction materials," said Trivedi.
Most of the projects' costs are estimated at the current market price, with a little cost escalation. However, the current price rise will put off the ongoing construction. "At this price, construction will come to halt as developers will wait for the price of cement to drop. This situation is not good for the industry, and people who are looking for affordable homes," said a developer.
What have the builders called for?
The association has demanded the state government to control the prices. "The state machinery needs to take measures to prevent the cartel of cement producers and marketing being formed, as it will directly impact the ongoing construction work," added Trivedi.
The BANM president asked: "When there has not been any major changes, then how can the price rise by over 25%?"
Shi'ia-Sunni balance in the middle-east. The US's interest in Saudi Arabia, are guided by its Crude Oil and its unflinching love for Israel. It is to be understood that Shi'ias are Minorities among the Muslims, but the "Shi'ia-Iran" is a great power in the Muslim world; which often cuts-short the nefarious designs of Saudi Establishment/s--the cockpit of International Islamic Terrorism. If this "Axis" is tampered, then it could have a devastating effect on India, for the reasons best known to all. India is already witnessing a volley of "Sunni-Muslim" sponsored terrorism since the last few decades. A too "Strong" Saudi Arabia and a "Weak" Iran is therefore a sure-shot prescription of disaster for India. Meanwhile, Sunday’s airstrike on a Hezbollah convoy in the Golan Heights has pushed Israel and the Shi’ite organization closer to a new conflagration in the north. The recent US's push to clip the wings of Iran, could be guided by the media reports, that Iran and Hezbollah are planning 'imminent' joint invasion of Israel's northern Galilee region according to 'high level intelligence'. Israel carried out airstrike on convoy in Syria on Sunday killing 11 people--among them were commanders from Iran and Lebanon's Hezbollah. Hezbollah TV reported that Hamas commander-in-hiding sent condolence letter to Shi'ite group following Sunday's attack on Golan Heights. Hamas' Deif reportedly told Hezbollah's Nasrallah: "Let's unite against Zionist enemy'. On the other hand, anticipating a possible counter-attack from Hezbollah, Israel Defense Forces Chief of Staff Lt. Gen. Benjamin Gan said: Israel is prepared for “any scenario” and will operate with “Determination and Required Intensity” along the northern border with Syria and Lebanon. However, the defense officials said Israel views as unlikely the prospect of Hezbollah responding to Sunday’s attack by launching rockets or missiles into the Jewish state. They assess that the Iranian-backed Hezbollah is not interested in risking a larger confrontation with Israel. Hezbollah has been bogged down attempting to quell the insurgency targeting the regime of Syrian President Bashar al-Assad]
Thursday, January 22, 2015: New Delhi: India has asked its refiners to slash oil buys from Iran in the next two months to keep the imports in line with the previous fiscal year`s levels, sources with knowledge of the matter said, days ahead of President Barack Obama`s visit to New Delhi.
India, the second-largest buyer of Iranian oil, has raised its crude shipments from there by more than 40 percent over the first nine months of the current fiscal year, when as part of the temporary deal that eased some sanctions on Tehran it was meant to hold them steady.
Now, the sources said, India`s oil ministry has told Essar Oil, Mangalore Refinery and Petrochemicals Ltd and Indian Oil Corp -- the Indian refiners that buy from Iran -- to cut those imports to keep the annual figure in line with the nuclear deal.
"This is very much about U.S. pressure. India does not want Obama`s visit to be overshadowed by some dispute over sanctions," said Robin Mills, head of consulting at Dubai-based Manaar Energy.
"India is encouraging its companies to cut back on imports because the U.S. demand has been that countries taking Iranian oil should not increase purchases from 2013 levels," he said.
Still, India`s imports from Iran rose to 250,200 barrels per day (bpd) in April-December last year, up 41 percent compared with the same period in 2013, according to tanker arrival data made available to Reuters.
China, Tehran`s biggest oil client, has also increased its oil imports from Iran over the last year by about 30 percent. But with reduced purchases from Japan and South Korea, the other main buyers of the oil, Iran`s exports to Asia are holding around 1 million to 1.1 million bpd.
That`s about half of Tehran`s total exports before toughened sanctions aimed at its nuclear activities were put in place in 2012, and a level U.S. officials have said is allowed under the temporary deals that have eased some of the measures and given Iran access to some of its frozen oil revenues.
Iran and six major world powers are due to meet next month to narrow differences over Tehran`s nuclear programme after making limited progress earlier in January to clinch a more permanent agreement by a June 30 deadline.
CUTTING OIL IMPORTS FEBRUARY-MARCH
During Obama`s visit, the United States will update India on the progress of the Iran nuclear negotiations, Ben Rhodes, deputy national security advisor in the White House told reporters in a teleconference call.
India`s higher imports from Iran would also be on the agenda, said the two sources in India, who did not want to be named because of the sensitivity of the issue.
"The refiners will have to virtually halt Iranian oil imports in February-March to retain purchases at last year`s levels," said one of the sources.
Essar, the biggest Indian buyer of Iranian oil, has already said it will not be taking any of the oil over the next two months, said this source, while IOC has said its buys from Iran will be slightly less in the year to March 31, 2015, than in the previous fiscal year.
"MRPL may have to arrange oil from elsewhere as it was planning to lift 100,000 bpd from Iran this year," the source said.
State-run MRPL has issued a rare spot tender seeking supplies of 1 million barrels of high sulphur oil for lifting during March 1-10, a tender document seen by Reuters shows.
"We are also in talks with other suppliers in the Gulf like Kuwain, ADNOC and Saudi to get additional supplies under our term contract," an MRPL, source who did not wish to be named said.
MRPL and Essar declined to comment on any government requests to cut purchases from Iran. IOC`s finance head did not respond to phone calls.
"India has cooperated with us in the enforcement of our sanctions regime, which continues to put a significant amount of pressure on the Iranian government and the economy," Rhodes said in the teleconference call.
Last week, sources in India`s oil ministry said India will also press the United States during Obama`s visit to remove three Indian oil companies from a list naming firms doing business in Iran, and use the opportunity to seek priority access to U.S. LNG exports.
The U.S. president will arrive in New Delhi on Jan. 25 and hold discussions with Prime Minister Narendra Modi, who visited Washington in September.
The Brent Crude has started to move up, following my write-up yesterday.
Meanwhile, OPEC’s Secretary-General said: "Oil prices will rebound rather than extend their decline to as low as $20 a barrel because a collapse since June isn't merited by global supply and demand".
DO YOU KNOW?
While the energy sector itself is certainly suffering from falling oil prices, analysts point out that energy makes up only 8 percent of the overall S&P 500.
Investors worried about falling oil prices dragging down the stock market and bringing the bull market to a screeching halt should remember this Fidelity note: The S&P 500 has historically had zero correlation with oil prices.
There are many benefits to the American economy from low oil prices.
Fidelity analysts, in particular, believe recent fears over the fall in crude are likely to do more to the velocity of the drop, rather than the magnitude of it.
Moreover, Cheap oil means lower production costs for many American (and indian) industries. For most American (and indian) companies, energy is an expense that eats into earnings. Historically, low oil prices coupled with strong labor markets have produced an environment of strong economic growth in the U.S.
Low oil (gasoline) prices, they say, are akin to a sizable tax cut for American (and Indian) consumers. More disposable income means more spending in other sectors of the economy.
Double whammy for steel firms: Rising imports, dipping exports
[Editor: The Steel manufactures have been shouting since the last few months to give protection to the domestic steel sector, but all these have fallen into the deaf ears of our Prime Minister Narendra Modi, who is now busy, to give a treat to Barrack Hussein Obama (with "Poor Tax Payers' Money"). This report was published on 11 January, 2015, but still the government is take action. It is pertinent to note that, the single-most important factor which affected steel companies in 2014 was iron ore shortage, which forced India’s top two private steel companies—Tata Steel Ltd and JSW Steel Ltd—to import the raw material. Tata Steel’s captive ore supplies were hit by the mining ban in Jharkhand and Odisha, while JSW Steel was affected by the inability of miners in Karnataka to raise output to 30 million tonnes per annum (mtpa) permitted by the Supreme Court. It is important to note that Tata Steel imported iron ore for the first time. The steel index component in the index of industrial production (IIP) is signalling a weak trend since September; but it seems the ruling NDA Government is not bothered. It is ironical that, as a country, we have to import iron ore despite having some of the best iron ore reserves in the world. India is still to have policy clarity and stability, especially on mine-lease renewals and forest clearances, which are key to the growth of domestic steel industry. The point which I want to stress is that: The UPA and the NDA have already destroyed the "Gems and Jewelry Sector" and now Steel could be another one on the anvil; if immediate steps are not taken]
New Delhi January 11, 2015: Facing a double whammy of rising imports and declining exports, domestic steel manufacturers are fearing further squeeze in their margins in a stubbornly subdued domestic market.
Describing the 58% growth in imports and 6.6% dip in exports during the April-December period as "very harsh," one private sector steel maker attributed the situation to higher input costs.
"Despite a literal crash in iron ore prices globally, we are deprived of the benefit domestically. At the same time, we are to pay 2.5% import duty on coking coal which India does not produce. Due to this, Indian steel makers are loosing out to their global peers.
With tepid growth in domestic consumption and large scale of imports, we are not in a position to raise price even if it was an absolute necessity. This is eating out our margins," said the spokesperson.
India, fourth largest steel maker in the world, imported 6.51 million tonnes steel during the April-December period of the current fiscal. Exports, on the other hand, declined to 4.06 MT during the period.
Steel imports are galloping because there is hardly any difference between the landed and the domestic costs of the alloy, forcing steel makers to roll over their price for two months in a row, said another source.
"Considering India's 100 million tonnes installed steel production capacity and a little over four million tonnes of exports, imports should not have been much a headache; but the problem is our consumption has not been growing in the desired proportion," he said.
According to Joint Plant Committee (JPC), a unit of the Steel Ministry, India's steel consumption grew by just 1.4% during April-December period of current fiscal at 55.24 million tonnes compared to 54.507 MT during the corresponding period of the last fiscal.
"The slow year-on-year cumulative growth numbers appear to reflect the lingering effect of economic slowdown and is further depressed by declining growth rate in production for sale in December 2014 as compared to same period of last year," JPC recently said.
A senior executive of another private sector firm said the government must try to contain the free-flowing imports of steel and take steps to boost domestic consumption.
Steel in India is coming in big volumes from China, Japan and Korea. While exports is a compulsion for China because of its huge domestic supply-demand mismatch; Japan and Korea are taking advantage of the free trade agreements with India.
Saudi Arabia, the brutal authoritarian theocracy that the democracy-promoting Washington claims as one of its closest allies, has a bit of a history of pressuring the U.S. into Middle East wars. The 1991 First Gulf War to oust Saddam Hussein from Kuwait was fought largely in defense of Saudi Arabia. The Kingdom also encouraged the Bush administration to invade Iraq in 2003. And the Saudi king has repeatedly urged Washington to attack Iran to secure Saudi interests in the Sunni-Shia regional divide.
Saudi Arabia also has a rather incriminating and duplicitous history of harboring Islamic extremists of the al-Qaeda, jihadist type. They helped the U.S. fund the mujahideen in Afghanistan. Most of the 9/11 hijackers were Saudis (and they were directed by a Saudi, named Osama bin Laden). There is even a classified record that members of Congress have claimed indicates the Saudi government’s role in the 9/11 attacks.
Since the start of Syria’s civil war, foreign jihadists have been flooding the country – many of them coming from Saudi Arabia.
Al Monitor reports:
Estimates of the number of Saudis fighting in Syria range as high as 2,500. Some are hardened veterans of earlier jihads in Afghanistan, Bosnia and Iraq. A few are compatriots of Osama bin Laden. Others traveled to Syria from the kingdom, despite individual travel bans imposed for dissident activities at home. Some traveled directly through major Saudi airports, leading many observers to conclude they were encouraged by the authorities to leave the kingdom and go fight Assad. For over two years, the Saudi government seemed to turn a blind eye to travel by its citizens — even political dissidents — to Syria.
Kuwait, which has close ties to the Saudi government, “is a major source of private funding for Jabhat al-Nusra, al-Qaeda’s official arm in Syria,” Al Monitor reports.
Interesting enough, but that is not the big piece of news from this Al Monitor report. The big news is this: “King Abdullah will make a major push for a more vigorous American effort to oust Assad when he hosts Obama [late next month]. The Saudis have been openly disappointed that Obama has not used force to get rid of Assad or provided more assistance to training and arming the Syrian opposition.” Now, the report says, the Saudis are trying to persuade Obama to impose regime change in Syria by promising to cut back on its support for jihadists.
To sum up, Saudi Arabia’s policy on Syria amounts to funding groups considered by Washington to be terrorists and to lobbying the President of the United States to destroy the Damascus government. The two initiatives are deeply intertwined given that a collapse of the regime in Syria would mean chaos and huge ungoverned spaces, which foreign funded jihadists could thrive in.
I’ve been hammering away on the issue of entangling alliance for months now, but where is the outrage on Saudi Arabia? The U.S. government continues to help prop up and arm the Saudi government and yet it supports terrorism and is trying to suck the U.S. into another dangerous and endless military quagmire in the Middle East. Where are the belligerent members of Congress, the Peter Kings and Charles Schumers, condemning Saudi Arabia? They condemn other countries for much less.
Import duty hike likely in metals, mining space: PLilladher
[Editor: Rohit Ferro Tech Ltd is not only implementing CDR Scheme (where it gets large concessions in terms of interest rate and payment schedules) but also has a couple of coal mines in Indonesia. The stock which closed yesterday at Rs.7.90 is near its 52-week low price and therefore, should be accumulated on all declines, for a target of Rs.12-14, in the short term]
Jan 23, 2015: Prabhudas Lilladher has come out with its report on metals & mining sector. "Hike in import duty likely; weak prices to undo the benefit", says the report.
Prabhudas Lilladher's report on metals & mining sector "Given the fall in demand in China and higher exports from Russia following depreciation in Rouble, the imports of steel into India has increased considerably resulting in renewed pressure on the domestic prices.
This, we believe may result in the likely increase in import tariffs in India in the near term to protect the domestic industry. Govt’s qualitative measures including mandatory quality certification have partially helped in curtailing rebar imports from China since Nov-14. However, Longs prices remained subdued despite reduced imports due to weak demand.
In case of flat products, we expect global prices to remain weak in the near term due to upcoming holiday season in China and elevated inventory levels. Hence, we believe that any benefit of higher import duty to the extent of 250bps would be off-set by lower steel prices. So far, all odds are in favour of hike in import duty but Ministry of Finance seems to be averse to hike in duty."
Valuation and Outlook:
"Sentiment wise, a hike in duty would be positive for Indian steel sector. However, should the global steel prices continue to remain weak, the benefit would be only for a short period. Steel stocks underperformed the broader indices by a wide margin, in line with our expectation.
We believe that stocks would remain pressure due to strong Rupee, waning benefit of cheaper iron ore and weak global demand. However, we like TATA steel on the back of attractive valuations, restoration of iron ore mining in India and better play on recovery in Europe with leaner operations", says Prabhudas Lilladher research report.
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