The markets are expected to reman range bound as oil trades below $60 / barrel:
The markets are expected to remain range bound today with stock selected activities. There are at present no negatives on the markets except too much volatility and advance/decline ratio tending towards negative at the end of the day. The Asian Markets are trading mixed with both Nikkei and STI registering gains in the early trade. Yesterday Wall street closed with minor gains.
After several weeks of record highs in the Dow Jones industrials & Nasdaq, largely due to cheaper oil, big acquisitions and strong company earnings; they have slowed their upward climb this week in light pre-Thanksgiving trading volume. U.S. stock markets are closed Thursday for Thanksgiving, and open Friday for an abbreviated session. The Dow rose 5.36, or 0.04 percent, to 12,326.95, after slipping from a new trading high of 12,361.00 earlier. Broader stock indicators were also higher. The Standard & Poor's 500 index closed up 3.28, or 0.23 percent, at 1,406.09, and the technology-heavy Nasdaq composite index rose 11.14, or 0.45 percent, at 2,465.98.
Here in India, Nifty is tending towards 4000 mark and Sensex 14, 000. Both the macro and micro factors of Indian economy is looking very good. We are on a long term Bull Market and at this time of the year, there is hardly any chance for a “Hard Correction” to land on our heads. The valuation story of Indian market which everyone likes to talk specially the media channels is now a bygone story. The market is now on a High momentum, adrenaline is being injected by the FIIs, Mutual Funds and HNIs and there is hardly any chance of its going down too much. The retail participation is expected to gain strength in the days ahead. Indian markets are still immature with people mainly stacking their holding in Banks and NBFCs. If only 5% of that money hits the Indian bourses, then we could see phenomenal rise in the Indices. Due to awareness among the Indian masses equity is becoming a popular form of investments for the long term.
Yesterday Hazoor Media & Power Ltd got locked in the upper circuit. I had advised all to accumulate the stock at around Rs.19-Rs.20 range last week. I have not bought a single stock yesterday as I am not comfortable with the current price. I have in fact sold 40% of my holdings yesterday to give my current acquisition price of Rs.14 per share on the remaining ones. The company is still today getting revenues mainly from Media sector and its real estate projects are yet to take off in a big way and give results. From Fy—2008-09, we could see the real estate business adding to the bottomline in a big way. The companpy will change its name to Hazoor Media, Power and Infrastructure to represent the true nature of business.
Yesterday, Roto Pumps Ltd slipped in the late trade due to some profit booking in the counter. I still maintain a buy in the counter as the company is on a super growth path. It is expected to clock 40%, Y-o-Y-growth due to new initiatives taken by the management. At the current P/E ratio also the stock looks attractive. Its expected EPS for FY-06-07 is Rs.8-9, which gives its price of around Rs.130—Rs.170 in 8 to 18 months time. The pumps companies are set to do well in future due to UPS Government’s increased stress on Infrastructure and Agriculture sectors. The book value of the shares of the company is a whopping Rs.32.69 and is hugely undervalued at the current price as mentioned.
Today I will play on the capital goods sector. Siemens Ltd and ABB are both looking attractive. Yesterday both registered gains, with Siemens Ltd bagging a huge order. These two are not for delivery purpose.
Today also BSEL Infrstructure Realty Ltd and Garnet Construction Ltd is expected to get locked in the buyer freeze, due to expected government move on the infrastrucuture sector. BSEL Infrastrucuture Ltd has started a new project in Dubai, in collaboration with a local builder. The project is expected to be complete by the end of June, 2007.
Keep away from the sugar counters as even if the government lifts the ban on the exports it will not help them improving their bottomlines.This is because of oil is trading cheap and also export price of sugar is expected to come down.
RTS Power Corporation Ltd should do well in the days ahead.....
More in the following postings….
Best wishes,
Suman Mukherjee
India.
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