Some Thoughts

It has been long since I have posted in this blog for the free members. It is mostly due to lack of time following my preoccupation with a number of activities including too much involvement in the Elections.

The electoral results bringing Feku Modi to power is a big blow for Indian economy. The Mafia Raj, which Feku Modi and Motu Shah resorted to, to win elections has been an unprecedented event in the annals of India. Never, have I seen a Political outfit spraying so much lies and bluffs towards the Gullible audience.

Feku Modi's BJP assisted by the current questionable leadership of the RSS has taken the help of worst of worst unscrupulous things, to eke out a win for the Machiavelli Mafia couple, in the last Lok Sabha Elections.

Indian economy has been on a disastrous path with NPA debt ballooning to more than Rs.13 lakh crore, from around Rs.4 lakh crore around 5 years back.

Not only that the MSME sector which got severely affected due to Feku Modi's Demonetization project is still in ICU. Meanwhile, the RBI headed by a history graduate is talking of doubling of collateral free loans, signalling another man made subprime like crisis.

Meanwhile, the exports and FDI have shrunk and the unemployment figures are near 45 year high.

Falling of interest rate has dealt a bloody blow to the pensioners and retired Persons​. It could also, trigger a flight of money from the Bond market to more greener pastures. Everywhere, we can hear the trombone bellowing out the same poignant note of India's Economic bottlenecks.

Amidst such catastrophic situation, we still hear the sound of Feku Modi's digital army's war cry of "Only Modi". 

Anyway, I have been very active in Facebook and Twitter, during the last few months, mainly with Economic and Political posts.

Also, during this time, inspite of all these burdens chopping off my time, I was able to serve Premium Information Service Members, by giving them normal Nifty, Bank Nifty and other F&O calls apart from normal small and micro cap recommendations. 

During the last few months stocks from Banking, NBFC, Gems and Jewelry, Pharma, Aviation and Construction sector has been recommended. Yesterday, two more micro caps scrips were given a buy yesterday to the Premium members.

If anyone has an investment kitty of Rs.5/10 lakhs and want to make a killing even in these tiring situation when the Government has increased the railway fares by 20% and have introduced LTCGT..

This will be purely on Investment basis as no margin trading or F&O will be done in the demat accounts. The profit will be shared on 70:30 basis.

Some Thoughts and Stock Recommendations

Since, the last few months I was more active in Facebook and Twitter, trying to give a fitting reply to Feku Modi and his deputy Amit Shah's bluffs and Jumlas. It is unfortunate that in a country of 125 crore the RSS could not find or support a better Prime Minister. It is a disgrace to see with my own eyes, RSS supporting a bluffmater and jumla spewing PM.

Apart from that my other works like Content Writing, SEO and Bollywood assignments also kept me busy. 

However, today, I thought to pen a few lines here. 

It is a well known fact that the NDA government led by a former "Chaiwala" with some mysterious degrees and bank balance (would anyone believe that a 3 times CM and one time PM cannot buy  house or a car and his mother has to travel in an auto rickshaw? Google to find the salary of the CM of Gujarat and PM of this country) has systematically destroyed Indian economy, as the debt increased by around 49% in the last 5 years, as demonetization sounded death knell to the MSME sector. 

While the farmers were dying in India Feku Modi was busy, travelling Saudi Arabia and other Islamic Nations often, for the reasons best known to all, even hugging Saudi Crown Prince at airport breaking all protocols. 

The BJP spent more than Rs.4300 crore on advertisements and BJP accounted for 53% of overall political ad blitz. From where so much money is coming to the Feku Modi's BJP is a thing which has baffled many a political analysts. 

Anyway, at present the Indian economy is in precarious state. Inflation is slowly inching up while the growth has come down sub 7% levels. The employment data continues to be scary and pathetic. 

Meanwhile, the real estate sector have been heavily burdened with taxes, leading to increase in slump. Among the other sectors, the worst affected seems to the mobile telephony space, where due to high spectrum price, the Indian consumers were not able to get the benefits of lucrative 700 Mz spectrum -- such is the intelligence and acumen of our Feku Modi & Co. 

While Feku Modi has left no stone unturned to cash on the Balakot Air Strikes in terms of votes, today a clarification came from Sushma Swaraj that neither terrorists nor civilians were killed in the strikes. This leaves, us to the moot point as who is responsible for spreading false news among people before elections in order to get votes? 

Why Amit Shah and Zee TV has not given a written apology the public for such a heinous act? It is unfortunate that the lust for power has become so strong that some TV Channels and Newspapers (especially those affiliated to Feku & Co -- Zee News, ET Now, Republic TV, Financial Express, etc) and politicians even play with Indian Security missions. 

Now switching topic I would like to say that off late I have been recommending scrips to the Premium Information Members on Whatsapp. Two of my recent recommendations have done well: 

#8K Miles Software Ltd, which was recommended at around Rs.95, a couple of weeks back. The scrip made a high of Rs.142 today, reaching its target. It closed at Rs.128.85 in the NSE today. 

#PC Jewllers Ltd was repeatedly recommended both to the Premium Members and also in this blog. The scrip made a high of Rs.163.5 before closing at Rs.145.15. The stock became more than 3 times in one year. 

I have recommended two other small cap scrips to the Premium Members which are expected to give good returns over a period. You need to join the Premium Services to know their names.

Also, if you have a cash of around Rs.10-20 lakhs or more and want to invest in a couple of growth oriented scrips for 1-2 years (NO margin trading and NO F&O) to get mind boggling returns, then you can mail me. The profit will  be shared in the ratio of 75:25 between you and me. I have mentioned a umpteen number of times in this blog that if Rs.10,000 doubled every year, then after 11 years it becomes around Rs.1 crore. Hence, try doubling your money every year through equity market deals. 

#If you have some free cash then you can buy the shares of Idea Cellular Ltd at around Rs.17-17.5 for short/medium term targets of Rs.27/56. Vodafone Idea Ltd, which is in the midst of a ₹25,000 crore fundraising activity. Last year, Idea Cellular and Vodafone Plc announced completion of the $23.2 billion merger of their India operations to create the country's largest telecom operator—Vodafone Idea—to take on competition from Reliance Jio. This scrip is exclusively for the blog readers and has not been recommended to the Premium Group. 

#Also, you can short nifty futures corresponding the spot rate of 11752.8 for a target of 11230/9071.

At the end I would like to thank all of you, for your support and faith on my recommended scrips. Also, see that you choose a correct party for the next five years. Choice of Feku Modis BJP in 2014 was a disastrous journey -- with economy plummeting and ethnic conflicts rising. Hence, do make a careful choice while voting your favourite candidate this time. 

Keep reading my blog posts....and send in your questions on stocks/shares (if any) at suman2005s@rediffmail.com -- I will answer two queries per week on first come first basis..!! 

All the best.....!!

Yes Bank Ltd: Sell

CMP:  Rs.218.70

Targets: Rs.193/172

Photo: The Economic Times

I have given a sell call on the shares of Yes Bank Ltd which is trading at Rs.218.70. Though recently the Reserve Bank of India hadn’t found any deviation in its reporting of bad loans (FY18 NPA divergence issue) and the growth in net interest income (the difference between interest income and expenses) was a healthy 41.2% aided by advances growth of over 42% and stability in interest margin at 3.3%; I find that there are still some issues which needs to be addressed before taking fresh exposures at the current market price

Rationale: 

#Gross NPA for the Q3FY19 rose to 2.10% from 1.60% in September quarter and 1.72% in December quarter of last year. There was a significant deterioration in asset quality in the quarter under review, thanks to a large slippage on account of IL&FS. Of the total slippage of Rs.2,297 crore – around Rs.1,913 crore is believed to be on account of IL&FS.  Some brokerage houses expect a short but sharp slowdown in  its growth with corresponding weakness in income levels, as the bank tries to conserve capital. 

#Yes Bank's net profit also fell 7% to Rs.1,002 Cr in December 2018 quarter. Its Q3FY19 performance was marred by its significant exposure to the IL&FS group, as mentioned earlier. In the days to come, the direction of IL&FS resolution (that will determine the final hair cut for each lender) will be one of the key issues. The bank’s Senior Group President Rajat Monga recently said YES Bank is expecting a resolution of these accounts within THREE to SIX months since there is “sufficient and viable interest” for them. So, there is no immediate quick-fix for this nagging issue. 

#Net provisions for the December quarter rose to Rs.550.20 crore on account of Rs.570.80 crore of accelerated provisioning on exposure to a stressed Infrastructure conglomerate. Provisions and contingencies rose 30.6% to Rs 550.2 crore in the quarter, from Rs 421.3 crore a year ago. 

#Yes Bank needs capital, further lack of which could constrain its loan growth. Currently, its capital position is tight with CET 1 at 9.1%. The management plans to raise capital from the market which is not doing too well at the present moment; besides pursuing options to sell some of its non-core assets. These things naturally takes time. 

#During the quarter ended December 2018, the bank recorded a flat net interest margin on a q-o-q basis, and slower corporate growth. Meanwhile, the bond hedge losses were steep limiting its ability to conserve more capital. This situation may continue until capital is raised, which will be difficult, especially when the sentiment of the investors towards the banking stocks is currently negative. 

#Return on assets fell to 1.1% with continued growth in assets, while return on equity stood at 14.4%. “Placed in a situation where management will have to balance its loan growth aspirations with capital constraints, overall net loan growth would be muted for FY19,” noted brokerage Jefferies India in a report. In fact, it cut the bank’s FY19-21 estimates to 12-14% considering flat growth in NIM, lower fee income, and higher expense ratio but benign credit costs. 

#The incoming CEO & MD has to come with a robust strategy to tide over the bearish sentiment, control NPA divergences, and improve profitability. Unfortunately, this is expected to take at least 5-6 months. 

#Core fee income too was down 10.1%, though retail banking fee growth at 22% somewhat brightened up the bleak scenario. On account of subdued income, headline expense ratio stood at 44%, though as a percentage of average assets it improved to 1.68% versus 1.73% sequentially. Casa ratio too was down to 33.3% against 33.8% the previous quarter. 

Moreover, according to a report published on The Economic Times on January 21, the IL&FS has a total debt of Rs.91,000 crore. Of this, about Rs.50,000 crore is owed to the banks. According to UBS estimates, YES Bank, Bank of Baroda, Punjab National Bank and IndusInd have relatively high exposure to the group. 

Against this backdrop and lot of other issues concerning the banking sector, I find this is not an appropriate time to pick up this stock, specially when bank is passing through a transition stage, as Ravneet Singh Gill, the new MD and CEO and once next door neighbour of Dr.Raghuram Rajan, the former RBI governor, takes over the reins from Rana Kapoor on 1 March; whose term ended on January 31.

Besides, while loan recoveries are picking up, caution should be exercised on fresh slippages, which was largely driven by IL&FS exposure during the third quarter. On the positive side what is less stressful to investors though, is that the bank’s exposure to NBFCs isn’t a reason for worry with over 96% rated AAA and above. 

Sell the scrip of Yes Bank Ltd in the F&On segment, corresponding the spot price of Rs.218.70, for short term targets of Rs.193/172. Please keep a SL at Rs.223. 

Market Is Running Ahead of Fundamentals: 
Nifty Should Correct Below 9000

Photo: 123RF

It is surprising that Indian markets are moving up, when we have a dismal financial situation, with unofficial employments report showing to be 45 years low and rural unemployment touching 18%. Besides due to lack of funds in the schemes like MNREGA, the rural economy has already taken a hit. 

Moreover, according to a report published in Deccan Herald, 15 December, '18, India’s foreign direct investments (FDI) growth has slowed to a minuscule 1.23% in 2018 from a high of 20.16% in 2014 when the BJP-led government took over at the Centre. This proves the fruitlessness of Narendra Modi's numerous foreign trips, with public funds.

Besides, with abnormally low inflation of 2.18%, the growth of 7.2% looks like a manipulated figure. It is because it is always seen that growth is accompanied by inflation, as spending takes a major push. When there is already demand destruction, post demonetization and implementation of the GST, how such high growth is possible? 

Now the 2nd question is:  if the inflation is sub 4% or below the RBI's tolerance levels, why there is no cut in the interest rates by the central bank or why NITI Aayog’s Rajiv Kumar said that the RBI should cut interest by only 25 basis points, to gives legs to consumption. Why 25 bps and not more when the inflation is near historic low levels? This gives us enough clue to feel skeptic about the NDA government's growth and inflation figures.

Moreover, several economists are skeptical of the government staying within the budget’s targeted fiscal deficit of 3.4% of GDP for 2019-20, with Fitch Ratings quoting it to be around 3.6%. According to a report on News18:  India's Tax revenues are expected to fall short by Rs.1.5 lakh crore than budgeted estimates, and disinvestment revenues still far lower than the targeted Rs.80,000 crore.

Also, the latest Vote on Account (finance bill to be cleared by the next government), has been seen to be inflationary nature, with talks of tax sops to be middle class. This gives us some indication of the NDA government's spending if voted to power and it would be difficult to slash expenditure, especially capex, in an effort to contain the deficit.

Meanwhile, the Economic Affairs Secretary Subhash Chandra Garg has said GDP growth in 2019-20 will be 7.5%. Which means there would not be much improvement from the current figure of 7.2%.

However, if the next government is to implement the expansionary budget for 2019-20, then it is obvious that it will have to borrow more, especially to fund populist measures, such as a $10.6 billion-aid for farmers — seen as key lollypop to winning votes for Narendra Modi’s Bharatiya Janata Party in a national election due by May.

Besides, no one knows whether the next government will stick to the proposals mentioned in the Vote on Account or will bring in some changes in it. So, there is no reason to get unduly excited about it. We know how this government functioned during the last 4.7 years through Bluffs and "Jumlas".

Another, point which needs to be highlighted that though the media has given the BJP around 150-170 seats in the next general elections, I don't  think they will get more than 120-130, considering the DISMAL way the NDA and its constituents run the government, with Narendra Modi, acting as a DESPOT, with a central command in Hand. 

Due to strict implementation of IBC, lot of Blue Chip companies have gone belly up: Lanco Infra, IVRCL Ltd, Shiv Vani Oil, etc. In the death row are: J P Associates, Suzlon Energy, Amtek Auto, Unitech Ltd, and so. 

If NDA's policies are working MIRACLES then why are more and more companies entering the ICU? The real estate sector has crashed after the tax took a jump from around 4.5% to 12%, plus stamp duty and other fees.

MSME sector is seeing the highest loss of jobs. The diamond market in Gujarat is in terrible shape so is the gems and jewelry sector. 

A National Herald Report says that: A company owned by Union Railway Minister Piyush Goyal’s wife Seema Goyal, with a paid up capital of just ₹1 lakh, has raked in ₹30 crore over 10 years, with no questions asked.

There is probably another scam brewing in the RBI quarters: According to RBI’s annual reports, it printed only ₹14.11 lakh crore demonetized notes, but got ₹15.28 lakh crore. It indicates an excess of ₹1.16 lakh crore (₹11,66,50,00,00,000) coming back to banks.

Also, the website Cobrapost last month claimed that its team of investigative journalists had unearthed “the biggest banking scam” in the country’s history. At a press conference, it accused the primary promoters of Dewan Housing Finance Limited (DHFL) of siphoning off more than ₹31,000 crore of public money through secured and unsecured loans and advances to shell companies, round tripping, tax avoidance and insider trading.“Money has also been routed through these dubious companies and parked outside India, to acquire assets,” the website said in a press release.

I sincerely tell you without any bias, that always take the positive data presented by this Mechivillain NDA government with a grain of salt. They do very good homework to give you shrewd excuses, hoodwinking the real issues. Like if you talk of you fall in employment rate, they will talk of a rise in the self-employment rate. But then truth cannot be suppressed for too long.

You saw the ends of the dictators like Saddam Hussein or Nicolae Ceaușescu or Muammar Mohammed Abu Minyar Gaddafi (commonly known as Colonel Gaddafi). Narendra Modi, with Bluffs and Lies, is not likely to be chosen for the next term and will meet his natural fate in the days to come.

In such circumstances, I don't feel the Indian markets (Nifty) would have the luxury to move above 12000, very soon. Now BSE Sensex is trading at 36,822.52 up 205.71 points while the Nifty Spot is at 10,995.50 up 62 points.

Short Nifty corresponding to the spot rate for targets below 9000, with immediate short term target at 10700. Don't take any buy position. 

Market Mantra

Buy the Shares of Indo Count Industries Ltd at the CMP of Rs.55.45 for short and medium-term targets of Rs.91/96/127/141. SL: Rs.56. It is likely to give decent returns over a period, as INR depreciation Vs USD is going to have a good effect on its balance sheet. The company makes, bed sheets, pillow covers, etc which are sold in the United States through retailers such as Wal-Mart and Bed Bath & Beyond. While the majority (65%) of Indo Count Industries Ltd’s business comes from retailers in the US, it also exports to 54 countries and has taken baby steps in selling products under its own brand -- a bold step for a company that was set up only in 1991 as a yarn maker and entered the home textile business in 2006. A strong US dollar has already the input costs for the US manufacturers -- this is likely to boost US imports in sectors such as textiles, steel, aluminium etc. However, Trump administration recently imposed strong Tariffs on steel and aluminum imports as well as a range of Chinese goods. This gives the big shot Indian textile players an edge.

Omkar Speciality Chemicals Ltd (Rs.22.80) as expected bounced from its support and has now hit the 3rd consecutive buyer freeze. Keep accumulating on dips for targets of Rs.26/31

Lasa Supergenerics Ltd (Rs.33.15) also hit the buyer freeze in the morning trade at Rs.36.55. But the scrip is it critical level as mentioned earlier to the Premium Members. Hence, those who have taken position around Rs.22-24 levels, where it was recommended should book profits and wait to see if it is able to hold the immediate support zone. However long-term investors can hold with a SL at Rs.31. 

Nifty is now trading at 10,661.80 down 10.45 points. Hence, all the short term targets (10742/10675) in Nifty Futures given to the Premium Members have been achieved.

To know what should be the strategy now, you should join the Premium Information Service. The discounts on the Yearly and Life Time Premium Membership has ended on 31st December 2018. Hence, those who will be subscribing now will have to do that on the normal subscription rates.

Winning Strokes: Think Different

Key equity benchmarks extended gains for sixth session in a row led by gains in ICICI Bank, Larsen & Toubro and Reliance Industries. Trading was volatile as indices bounced back in last hour of trade after hovering in negative terrain for most part of the session. The Nifty managed to close above 10,900 mark. Slide in crude oil prices and firmness in rupee boosted investors sentiment.

Global stocks were negative in the face of slowing economic growth and rising political uncertainty while investors looked to the US Federal Reserve monetary policy decision due on Wednesday.

The Sensex rose 77.01 points or 0.21% to settle at 36,347.08, its highest closing level since 1 October 2018. The index rose 105.31 points, or 0.29% at the day's high of 36,375.38. The index fell 223.55 points, or 0.62% at the day's low of 36,046.52.

The Nifty 50 index rose 20.35 points or 0.19% to settle at 10,908.70, its highest closing level since 1 October 2018. The index rose 27.05 points, or 0.25% at the day's high of 10,915.40. The index fell 69.25 points, or 0.64% at the day's low of 10,819.10.

The S&P BSE Mid-Cap index rose 0.21%. The S&P BSE Small-Cap index rose 0.45%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1441 shares rose and 1119 shares fell. A total of 163 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Power index (up 1.09%), the S&P BSE Capital Goods index (up 1.08%) and the S&P BSE Telecom index (up 0.97%), outperformed the Sensex. The S&P BSE Teck index (down 1.13%), the S&P BSE IT index (down 1.08%) and the S&P BSE FMCG index (down 0.29%), underperformed the Sensex.

IT shares declined amid firm rupee. Infosys (down 2.48%) and Wipro (down 1.29%), edged lower. Appreciation in rupee dents top line of IT firms as these companies derive most of their revenues in dollar terms.

Shares of the IL&FS group companies spurted after IL&FS initiated steps for monetisation of its domestic roads vertical. IL&FS Transportation Network hit an upper circuit limit of 5% at Rs 11.55. IL&FS Engineering and Construction Company hit an upper circuit limit of 5% at Rs 14.13. IL&FS Investment Managers hit an upper circuit limit of 10% at Rs 7.02.

On the political front, Kamal Nath, chief minister of Madhya Pradesh, on Monday reportedly waived the outstanding short term crop loans of farmers up to Rs 2 lakh as on 31 March 2018, taken from nationalised and the cooperative banks. The decision will benefit as many as 3.4 million farmers and will cost the exchequer between Rs 35,000 to Rs 38,000 crore, according to media reports.

Further, Chhattisgarh chief minister Bhupesh Bhagel, who too took charge on Monday, reportedly announced that his government will waive farm loans worth Rs 6,100 crore of around 1.66 million farmers. He also announced that the government will increase the minimum support price for paddy from Rs 1,700 per quintal to Rs 2,500 a quintal, reports added.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.83, compared with its close of 71.56 during the previous trading session.

In the global commodities markets, Brent for February 2018 settlement was down $1.67 at $57.94 a barrel. The contract had fallen 67 cents, or 1.11% to settle at $59.61 a barrel during the previous trading session.

Overseas, European shares traded lower on Tuesday with investors growing increasingly concerned over the political impasse over Brexit in the United Kingdom, where parliament continues to debate procedural issues surrounding Prime Minister Theresa May's EU exit deal and isn't likely to formally vote on it until early next year.

Asian stocks declined on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve. US equity indexes slid to their lowest close in 14 months on Monday as investors weighed the impact of the Fed on growth in a market already anxious over trade, geopolitical tensions and a possible government shutdown.

The Federal Reserve holds its final policy meeting of 2018 on Tuesday and Wednesday. The Federal Open Market Committee is expected to raise its short-term interest rate by a modest quarter-point to a range of 2.25% to 2.5%. Investors are closely watching the Federal Reserve monetary policy guidance for 2019. The central bank forecasts three more rate hikes in 2019, but softer global growth could cause a shift in its hawkish stance. The Bank of Japan's monetary policy decision is due Thursday, followed by a briefing from Governor Haruhiko Kuroda. A Bank of England decision is also due on Thursday.

#My recommended Omkar Speciality Chemicals Ltd and Lasa Supergenerics Ltd hit their respective buyer freezes at Rs.23.55 and Rs.24.80 respectively. The stocks which were repeatedly recommended on this blog are a part of Dolly Khanna bouquet of scrips. For targets and other details, you need to join the Premium Information Service. 

#The scrip of Balasore Alloys Ltd today made a high of Rs.27.40 before closing at Rs.26.75. This company belongs to the brother of steel baron L N Mittal. Meanwhile, NMDC has announced a revision in the price of Iron ore.

#Those who are holding the shares of Bhusan Steel Ltd from around Rs.23-27, should book some profits at around the CMP of Rs.40.70 and hold the remaining with a strict stop loss at Rs.39. The stock has given a good return to the blog readers. 

Market Mantra

Short Nifty corresponding to the Spot Rate of 10,791.55 for targets of 10697/10672. After all those drama in the election is over, the markets may look for some breathing space for the next level of upmove. However, stock specific activities will continue. Buying may now shift slowly to the small and mid cap counters.The rates of Nifty mentioned are all Spot levels. You need to do the necessary shorting and find targets in F&O space, corresponding to the spot levels.  China reported economic data that missed expectations. China on Friday reported industrial output and retail sales growth for the month of November. Industrial output in November grew 5.4% from a year ago. That figure was 5.9% in October. Retail sales rose 8.1%, down from 8.6% in October. Fixed asset investment rose 5.9% from January to November. It rose 5.7% from January to October. This is already having a negative impact on the Asian markets.

Buy TV Vision Ltd at around Rs.4.30 for short term targets of Rs.7 and Rs.9. Though TV Vision reported Flat Financial performance in Sep-18, however, it is better than Sept-17. The Net sales came at Rs.27.85 crore as against Rs.26.04 crore in Q2FY18. The interest cost also came down to Rs.86 lakhs in Q2FY19, as against 4.02 crore in Q2FY18.

The board of Sri Adhikari Brothers Television Network (SABTN) and TV Vision has approved the elevation of Markand Adhikari as the chairman and managing director (MD) of the two companies.

The elevation comes into effect from 7 September 2018 without any change in the terms and conditions of his appointment.Markand Adhikari, aged 61 years, began his career with an advertising firm in the 1980s. He is a promoter director of the company and began this venture in association with his brother Gautam Adhikari.
There are rumors that the company could sell one of its channels to pare some debt. Its channel Mastii has again taken number one spot on the charts. With a book value of Book Value of Rs.25.37 & FV: Rs.10, the share of TV Vision Ltd is trading at an abnormal price, and soon we might see a change in the aberration generated. I reiterate, from my experience of more than 2 decades in equity market I can say confidently that this cannot be the discovery price of the share off such a reputed company; only because of some loan issue!

#Omkar Speciality Chemicals Ltd hit another buyer freeze at Rs.21.55. The stock almost doubled from from the recommended price of around Rs.11-12. The next targets could be Rs.32/35/39, if a resistance is broken on the upside. To know where is the resistance place, subscribe to the Premium Services. 

#Buy the scrip of Kwality Ltd at around Rs.8.90 for short-term targets of Rs.12/14. Kwality Ltd will announce their financial results for the quarter ended September 2018 later in the day. 

#As a corollary to the rally in the Omkar Speciality Chemicals Ltd we can see a rally in the scrip of Lasa Supergenerics Ltd (Rs.21.85). We can look forward for short term targets of Rs.27-29. This is a sister company of the former.

#Buy the shares of Yes Bank Ltd near the supports of Rs.174/175, for short term targets of Rs.197/221. It is likely to nominate Mr.Brahm Dutt as a part-time Non-executive Chairman of the private sector lender. 

~~with inputs from Capital Market Live News....

A firm opening on the cards

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 40 points at the opening bell.

On the political front, the outcomes of the five state elections will likely set the tone for the general elections next year. Voting in Rajasthan and Telangana will take place today, 7 December 2018 and the counting of votes in all the states will be done on 11 December 2018. Assembly elections in Madhya Pradesh and Mizoram were held on 28 November 2018. The election in Chhattisgarh Assembly was held in two phases on 12 and 20 November 2018.

Overseas, Asian stocks were trading mixed as investors grappled with shifting indications on US-China trade talks and prospects for a pause in Federal Reserve tightening.

US stocks closed mostly lower Thursday after a dramatic session that saw the Dow Jones Industrial Average plunge more than 700 points at one point on fears that the arrest of a Huawei executive would reignite trade worries. However, the market clawed back most of its losses on a report that the Federal Reserve may turn more accommodative.

Market participants are also monitoring a two-day meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, which is slated to wrap up Friday. Crude-oil prices renewed their descent after the Saudi energy minister proposed a smaller-than-expected cut to production, but added that the oil cartel hadn't yet agreed to any production declines.

Back home, key domestic indices slumped Thursday, mirroring weakness in global stocks. Indices settled lower for third day in a row as investors turned cautious in the run-up to the announcement of five state elections' results next week. The Sensex fell 572.28 points or 1.59% to settle at 35,312.13, its lowest closing level since 22 November 2018.

The trading activity on that day showed that the foreign portfolio investors (FPIs) bought shares worth a net Rs 72.47 crore yesterday, 6 December 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 389.78 crore yesterday, 6 December 2018, as per provisional data.

Among corporate news, HCL Technologies (HCL) said it will acquire select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019, subject to completion of applicable regulatory reviews. The software products in scope represent a total addressable market of more than $50 billion and include Appscan for secure application development, BigFix for secure device management, Unica (on-premise) for marketing automation, Commerce (on-premise) for omni-channel eCommerce, Portal (on-premise) for digital experience, Notes & Domino for email and low-code rapid application development, and Connections for workstream collaboration. HCL and IBM have an ongoing IP Partnership for five of these products. The announcement was made after market hours yesterday, 6 December 2018.

Wipro's digital business arm, Wipro Digital, and Alfresco, a leading enterprise open source provider of process automation, content management and information governance software, announced an expanded global partnership to create, build and run open source based digital transformation programs for its clients, across the globe. The partnership will bring together Wipro's expertise in digital transformation and Alfresco's Digital Business Platform. As a part of this alliance, the two companies will launch a series of go-to market (GTM) initiatives, that includes a joint Predictive Service Automation solution using Artificial Intelligence, Machine learning and a microservices based framework, that will transform the future of asset maintenance. The announcement was made after market hours yesterday, 6 December 2018.

Coal India announced after market hours yesterday, 6 December 2018, that the President of India, acting through the Ministry of Coal, Government of India, has sold 13.73 crore equity shares, or 2.21% equity, of Coal India to Reliance Nippon Life Asset Management. This is with reference to the setting up of the central public sector enterprise exchange traded fund (CPSE ETF) comprising equity shares of central public sector enterprises (CPSE), which was launched as the CPSE ETF mutual fund scheme (Scheme) in March 2014. Post-acquisition holding of a promoter is 72.92% of equity share capital of the company.

#A buy call was initiated in the scrip of Bartronics Ltd yesterday at around Rs.7.25 for short-term targets of Rs.11/14. This is a high-risk high gain counter and hence don't play without putting a SL at Rs.6. The company's sundry debtors include export receivable aggregating to Rs.733.80 crores as of June 2018. The management in a BSE filing said that though on account of the economic slowdown and consequent recessionary conditions in the global market there have been delays in recovery of such amount however it firmly believes that the said amount is recoverable as the company has a long-standing relationship with that customer. At the year ended 30 June, 2018, 300 (three hundred) kiosks have been constructed and for the balance 1700 Kiosks, allotment of clear sites by MCD is awaited. 

Meanwhile, the company has started negotiations with the holders of company's bonds (FCCBs) and in this regard, it has appointed a consultant to assesses all the options available with the company and finalize the best-suited approach. The management in a BSE filing further said it is in the advanced stages of negotiations for arriving at a consensus with the bonder holders and is confident of resolving this shortly. 

#Omkar Speciality Chemicals Ltd hit another buyer freeze at Rs.16.09 in the BSE The scrip has given more than 30% returns from the recommended price. 

#The Premium Members were yesterday asked to re-enter the scrip of Tata Steel Ltd (Rs.510.20) at around Rs.517.20, when it fell, intraday, on the premise that the company has started to show marketd improvement in its topline after its acquisition of Bhusan Steel. If you remember, I have been recommending Tata Steel from the levels of Rs.217. The stock has given more than 3 times returns during the last 2-3 years. 

~~with inputs from Capital Market Live News.....

Market Mantra: Stocks May Open a Tad Lower

Photo: Kalinga TV

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 6 points at the opening bell.

Overseas, most Asian stocks were trading lower, signaling fading investor applause for the US-China trade truce. US stocks rallied yesterday, 3 December 2018 after the US and China declared a truce in their trade war.

Back home, key equity benchmarks extended gains for sixth straight trading session yesterday, 3 December 2018. However, the trading was volatile as gains triggered by strong global cues were almost offset by lower-than-expected domestic GDP data. The Sensex rose 46.70 points or 0.13% to settle at 36,241, its highest closing level since 1 October 2018.

The trading activity on that day showed that the foreign portfolio investors (FPIs) bought shares worth a net Rs 293.12 crore yesterday, 3 December 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 806.45 crore yesterday, 3 December 2018, as per provisional data.

Among corporate news, Axis Bank will be in focus. With reference to a news item titled "I-T dept probing Axis Bank staff for allegedly facilitating benami deals," the bank clarified after market hours yesterday, 3 December 2018, that the matter reported in certain sections of the media pertains to a complaint received by the bank in March 2018, referring to incidents of an earlier period. 

An internal inquiry in this regard has already been conducted by the bank. In case there are any queries from the income tax authorities in the said matter, the bank, as always, shall fully co-operate with the concerned authorities. The bank has always adhered to the highest standards of regulatory compliance and will continue to work towards maintaining a strict code of conduct in all spheres of business that it undertakes, it said.

The 2nd quarter real GDP growth fell to 7.1% YoY, lower than the primarily due to the weaker-than-expected services sector. Although fiscal spending and investments posted a double-digit growth, weak private consumption and very high net imports dragged GDP growth in Q2FY19.  Implied domestic savings rate also fell to a new low of 25.6% in Q2FY19, while investment rate improved to 30.9% on account of a wider current account deficit (CAD). Growth in investments was driven by the private sector (households & corporate), while government capex declined in the said quarter. 

Recent data showed that strong growth witnessd in H1CY18, was basically due to a favorable base (H1FY18: 6%), which is set to fade off in the 2nd half of the year (H2FY18: 7.4%). Although exports grew by a healthy 13.4% on Yo--Y basis, imports shot up by 25.6% in Q2FY19. As a result, net imports widened, shaving off 2.7pp from GDP growth as compared to the previous quarter. Both, investments and government consumption posted double-digit growths (12.5-13%) in the quarter under scrutiny. 

Although construction growth slowed to 7.8% in the 2nd quater of FY19, from 8.7% in the previous quarter, growth remained in line with the average of 7.5% seen during the last four quarters. Mining GVA declined by 2.4% in Q2FY19 after rising 2.8% on an average during the last four quarters.

The recent encouraging signals coming from the US President Donald Trump and Chinese President Xi Jinping's meeting in Argentina have to some extent succeeded in defusing the impending global trade war. The escalating tensions between the two major trading nation already had a sentimental impact on the financial markets across the world. The news filtering in from that summit that no additional tariffs will be imposed by the US and both the two sides will engage in negotiations, is a big relief for other trading nations, including India. 

Over the past couple of years, the RBI has over-projected headline inflation for six quarters and the actual headline inflation in Q2FY19 was as much as 75 bps lower than its projection. Similarly, as against the market expectation of 4.34 % during the past six months, the actual inflation has averaged 4.11 % 

Interestingly, while headline CPI-inflation has fallen consistently during the past two years, bond yield has risen during the past one year probably due to higher-than-expected actual inflation giving a kick to the expectation of a rise in policy rates. Thereafter, as the market participants dwelled on the details, we after another nine months that the 364-day T-bill (or 1-year G-sec) and not the is the basis for the calculation of the real interest rate. 

Key equity benchmarks extended gains for sixth straight trading session, yesterday. However, the trading was volatile as gains triggered by strong global cues were almost offset by lower-than-expected domestic GDP data. Global shares were upbeat as truce talks between US and Chinese leaders at the G20 summit improved investors' risk appetite.

The Sensex rose 46.70 points or 0.13% to settle at 36,241, its highest closing level since 1 October 2018. The index rose 251.86 points, or 0.70% at the day's high of 36,446.16. The index fell 94.62 points, or 0.26% at the day's low of 36,099.68.

The Nifty 50 index rose 7 points or 0.06% to settle at 10,883.75, its highest closing level since 1 October 2018. The index rose 64.45 points, or 0.59% at the day's high of 10,941.20. The index fell 31.40 points, or 0.29% at the day's low of 10,845.35.

The S&P BSE Mid-Cap index and the S&P BSE Small-Cap index rose by 0.46% each. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,321 shares rose and 1,263 shares fell. A total of 195 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (up 2.6%), the S&P BSE Power index (up 2.47%) and the S&P BSE Metal index (up 2.14%), outperformed the Sensex. The S&P BSE Healthcare index (down 1.21%), the S&P BSE Energy index (down 0.52%) and the S&P BSE Auto index (down 0.19%), underperformed the Sensex.

#A BUY call was initiated in the shares of Balasore Alloys Ltd near the supports of Rs.27-27.50 for short term targets of Rs.41/62. This is a Pramod Mittal group company. He is the brother of the Kolkata (Calcutta) based Steel baron L N Mittal. When, so much talks are underway, for buying Essar Steel by L N Mittal's Arcelor Mittal, I thought it fit to recommend the scrip of his brother's company. The company has a Captive Chrome Ore Mine in Sukinda Valley in Jaipur District of Orissa which is about 170 kms from  the plant. The mine takes care of the Chrome Ore requirement of the Company. 

The company was allotted Manganese ore mines at Balaghat district of Madhya Pradesh. The produce from mines of Balaghat Sector is coveted for its low Phos and Low Fe content. Commercial operation in the said mines has commenced. 

This is a safe scrip to buy and hold considering its high book value and low risk due to it having mines. It is pertinent to mention here that Ferrochromium is having its maximum share of consumption in the steel industry and due to the ever - increasing demands from the construction and steel sectors, the global ferrochromium market is forecasted to flourish in the near future. The Asia Pacific is having the maximum market share in global ferrochromium market with China and India taking the lead.  Europe is an emerging market in the field of ferrochrome and is anticipated to have a considerable market share in future due to its flourishing automobile sector. In North America and Latin America, the demand for Ferrochrome is slowly picking up. The global ferrochromium market is anticipated to be in deficit to cater the increasing global steel demands, in near future. Ferrochromium is mostly produced in India, China, South Africa and Kazakhstan because of their large chromite resources. 

Balasore Alloys got a bargain in this market when it recently announced acquisition of 70% stake in Zimbabwe Alloys. Zimbabwe has the second largest reserves of ferrochrome in the world. For the ferrochrome industry, Africa is strategic location for two reasons. Firstly, the continent has a huge logistic advantage in terms of being near to western market. Secondly, it is very cheap to produce ferrochrome in Africa, which even China cannot match. 

#Yesterday, the shares of my well researched company Omkar Speciality Ltd and its group company Lasa Supergenerics Ltd hit their respective buyer freezes at Rs.14.10 and Rs.22.45 in the NSE. Both these stocks will give superb returns going forward and hence accumulate in declines (if any). To make money on a consistent basis, there is no need to invest in 100s of scrips. Just choose 3-4 of them at a given time and keep on investing or reducing your stakes in them, as the company either fares well or its fundamentals starts to go down. I might be recommending a momentum counter today or tomorrow, first to the Premium Member and then in Twitter (Handle: suman2009s). If you want to get the 1st mover advantage, then you need to join the Premium Information Service and get the required discounts; which is valid till 31st December 2018.

#Those who had earlier invested in the shares of Aro Granite Industries Ltd can average near the CMP of Rs.51 and exit near Rs.55-56 levels, ekeing out slight profits. The scrip is not performing according to expectations and hence it is better to put the money elsewhere. 

#The scrip of Kwality Ltd (Rs.10.50) which was hitting upper circuits eased after touching a high of around Rs.11.90 Profit booking was suggested to the Premium Members who bought around Rs.7, when it came down. The scrip might come down to Rs.8.5 before taking a fresh upmove. Though the company is facing temporary cash cruch, but these are blue chips in their respective sectors and the investors should do well to accumulate them on market declines, albeit with appropriate stop losses. I had said the same for Vedanta Ltd and Hindalco Ltd when they fell near their all-time lows, around a couple of years back. 

#Another encouraging development is that the Bank Nifty (26857.55) almost touched my target of 27000, I gave last month. You can book profits and wait for dips to enter The Entry and Exit levels will be mentioned to the Premium Members only.  

~~with inputs from Capital Market Live News and other sources including net searches and brokerage reports.

Winning Strokes: Think Different

Domestic shares inched up, extending gains for fifth day in a row, supported by recent weakness in crude oil prices and strength in local currency. Increase in fund flows from foreign portfolio investors also boosted sentiment. The benchmark indices, which opened on a strong note, settled with small gains after briefly slipping into negative terrain in afternoon trade.

Investors took some profits off the table ahead of a highly anticipated meeting between President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 summit in Argentina, which many hope will help ease escalating trade tensions between the two countries.

The Sensex rose 23.89 points or 0.07% to settle at 36,194.30, its highest closing level since 1 October 2018. The index rose 218.81 points, or 0.60% at the day's high of 36,389.22. The index fell 87.44 points, or 0.24% at the day's low of 36,082.97.

The Nifty 50 index rose 18.05 points or 0.17% to settle at 10,876.75, its highest closing level since 1 October 2018. The index rose 63.75 points, or 0.59% at the day's high of 10,922.45. The index fell 23.60 points, or 0.22% at the day's low of 10,835.10.

Among secondary barometers, the BSE Mid-Cap index rose 0.56%. The BSE Small-Cap index rose 0.52%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was almost even. On BSE, 1300 shares rose and 1303 shares fell. A total of 157 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.96%), the S&P BSE Healthcare index (up 1.78%), the S&P BSE IT index (up 1.03%) outperformed the Sensex. The S&P BSE Oil & Gas index (down 0.96%), the S&P BSE Metal index (down 0.51%), the S&P BSE Bankex (down 0.48%) underperformed the Sensex.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 69.77, compared with its close of 69.85 during the previous trading session.

In the global commodities markets, Brent for January 2019 settlement was off 51 cents at $59 a barrel. The contract had risen 75 cents, or 1.28% to settle at $59.51 a barrel during the previous trading session.

India imports majority of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.

Meanwhile, Prime Minister Narendra Modi reached Buenos Aires, the capital of Argentina for the 2018 G20 summit, which is scheduled to begin today, 30 November 2018. The theme of the G20 summit is Building Consensus for a Fair and Sustainable Development.

According to reports, PM Modi met with Saudi Arabia Crown Prince Mohammed bin Salman on the sidelines of the G20 summit and they discussed ways to further boost economic, cultural and energy ties. The two sides also held discussions on enhancing investment in technology, renewable energy and food security.

On the sidelines of the two-day 13th G-20 summit, Modi, Trump and Japanese Premier Shinzo Abe will reportedly hold a trilateral meeting amidst China flexing its muscles in the strategic Indo-Pacific region. The trilateral, which would be an expansion of the bilateral meeting between Trump and Abe, is part of the series of meetings the US president would have on the sidelines of the G-20 summit on November 30 and December 1.

The Reserve Bank of India (RBI) on Thursday, 29 November 2018, relaxed rules for non-banking financial companies (NBFCs) to sell or securitise their loan books. In order to encourage non-banking financial companies (NBFCs) to securitise/assign their eligible assets, RBI has been decided to relax the minimum holding period (MHP) requirement for originating NBFCs, in respect of loans of original maturity above 5 years, to receipt of repayment of six monthly instalments or two quarterly instalments (as applicable). However, minimum retention requirement (MRR) for such securitisation/assignment transactions shall be 20% of the book value of the loans being securitised/20% of the cash flows from the assets assigned. The above dispensation shall be applicable to securitisation/assignment transactions carried out during a period of six months from the date of issuance of this circular. Other terms and conditions of the above referred directions remain the same, RBI said.

Overseas, European stocks were trading lower, while Asian markets settled mixed as key leaders congregated for a major event in Argentina. Leaders from around the globe are set to discuss key issues during this two-day G-20 summit, with many investors paying close attention to two leaders in particular: President Donald Trump and China's President Xi Jinping.ss

In Asia, growth in China's services industry slowed for the second straight month in November, an official survey showed. The official non-manufacturing Purchasing Managers' Index (PMI) released on Friday fell to 53.4 from 53.9 in October, but remained well above the 50-point mark that separates growth from contraction.

Growth in China's manufacturing sector stalled for the first time in over two years in November. The official Purchasing Managers' Index (PMI) fell to 50.0 in November from 50.2 in October, data showed on Friday. The 50-point mark is considered neutral territory, indicating no growth in activity or contraction on a monthly basis.

US stocks reversed direction to close lower Thursday as investors' attention shifted to a weekend meeting between President Donald Trump and Chinese President Xi Jinping.

Speaking to the media, Trump said he was "close to doing something with China" but that he wasn't sure he wanted to, citing revenue from tariffs on Chinese imports. Trump on Thursday tweeted that "billions of dollars" are pouring into the US Treasury from tariffs and that there is "a long way to go."

On the US data front, the number of Americans who applied for unemployment benefits last week rose to 234,000, their highest level in six months, according to the Labor Department.

The Commerce Department reported that consumer spending in October rose by 0.6%, while income rose by 0.5%. The same release showed personal-consumption expenditures, the Fed's preferred measure of inflation, right at the central bank's target of 2% year-over-year.

The National Association of Realtors reported that US pending home sales slid 2.6% in October from September, to their lowest level since June 2014.

Reliance Communications Ltd (Rs.14.25) jumped 11.92%. The Supreme Court today ordered the Department of Telecommunications (Union of India) to grant a No-Objection to Reliance Communications for spectrum trading within 7 days. RCom's 100% subsidiary, Reliance Realty, will submit a Corporate Guarantee of Rs 1,400 crore within 2 days. The Supreme Court upheld the earlier order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and no Bank Guarantee is now required. The Spectrum trading transaction will now be completed and RCOM will pay-off Ericsson and minority investors of Reliance Infratel (RITL). RCom's asset monetization program thus proceeds as per plans. The scrip was recommended some weeks back in this block and was told foretold what was going to be the outcome of the Supreme Court Judgement.

Omkar Speciality Chemicals Ltd (Rs.13.45) hit the 3rd consecutive buyer freeze yesterday. The scrip was recommended a number of times in this blog and I am sure this scrip, which is thoroughly researched by me, would give stupendous returns going forward. A similar scrip, Global Offshore Services Ltd recommended at around Rs.11-12, made a high of Rs.20.40, almost doubling the holding in just few months.

Those who are holding the shares of Ishan Dyes and Chemicals Ltd  (Rs.55.55) has broken below the stop loss levels and hence those who have made profit in the counter should exit and invest in the next momentum scrip which I will mention in this blog on Monday.. To take the 1st mover advantage, you need to join the Premium Information Service, and take benefits of the discount offer which is valid till 31st December, 2018.

The shares of Uttam Galva Steels Ltd which was recommended at several prices yesterday hit another buyer freeze at Rs.12.10 in the NSE. I am anticipating a similar move in the shares of Uttam Value Steels Ltd (Re.0.10) in the next few months. Hence remain invested or buy the scrip in every decline

The scrip of Tata Steel Ltd (Rs.529.30) was recommended as a buy to the Premium Members at around Rs.522, for short term targets of Rs.541/587. After the acquisition of Bhusan Steel Ltd (which I recommended at around Rs.26.40 some days back on Twitter, CMP: Rs27.15), Tata Steel Ltd has started to show marked improvement in performance.

~~with inputs from Capital Market Live News.....