SumanSpeaks: The Information Super Highway

Indian real estate: 2014 year in review and forecast for 2015! Photo : Slideshare.net [ Editor : In an article on Oct 30, 2014 in First Post, the author, Sunainaa Chadha argued that India's relaxed rules for foreign direct investment (FDI) in construction will fuel higher property prices, through simple demand-supply logic. Under the new rules, the minimum built area for projects in which foreign investment is allowed will be reduced to 20,000 square metres from 50,000. For "serviced plots", there is no minimum land requirement now, compared to 10 hectares earlier, while the minimum capital investment by foreign companies has been cut to $5 million from $10 million. She further reasoned that the reduction of minimum requirements for built areas and capital will now allow investment to flow into South Mumbai or central Delhi. Till now investment was going to the outskirts because it was tough to find large areas to develop or construct 50,000 square metres. So t...

The rise and rise of SME stocks [ Editor :  My first question is why only SME stocks? There are scrips in the large (and mid-cap) space too, which are being jacked up by TV-analysts or other market-men, without giving much reason as to why a scrip  having book value of Rs.300 should be trading around Rs.14, 000 plus or why P/E of auto sector should be so high??!! A common thing which I hear is: Market tends to give high P/E to Auto and Breweries sector. Oh yes, but then where is the limit? Also, why should stocks like MIC Electronics Ltd be hitting upper circuits? Why the shares of SKM Egg Product Ltd with a single product (like Eicher Motors Ltd)  to boast of, is trading above Rs.100? Why is the scrip of Western India Shipyard Ltd, not going anywhere inspite of improving fundamentals quarter after quarter? Why do companies like SEL Manufacturing Company Ltd, do not bother to respond to the calls of Shareholders? How does a company continue to expand without show...

Real Estate sector up for a positive transition in 2015 During the past few years, the Indian real estate sector had to confront tough times; difficult economic and business environment and high inflation affected all stakeholders such as occupiers, investors, developers and home buyers. Candle Stick Chart of HDIL Mumbai | December 24, 2014: The year 2014 brought in positive sentiment around Indian real estate and among Indian as well as international investors in recent times, mostly due to the formation of new government as it enthused the investor and business confidence in the Indian economy. There were numerous positive policy announcements which helped in generating a favourable mood for the real estate market. During the past few years, the Indian real estate sector had to confront tough times; difficult economic and business environment and high inflation affected all stakeholders such as occupiers, investors, developers and home buyers. As a result, significant unsol...

Market Mantra Photo :  Learn Forex Trading Strategies The Nifty is now trading at 8175.85 below its immediate resistance of 8210 which points towards the general weakness in sentiments. Moreover, the Nifty settling 320 points lower in December expiry is also a sign of weakness. The new trading range for Nifty seems to be 8100 and 8350. However, in absence of any major negative news, the traders are suggested to buy beaten down stocks in the Real Estate/ Construction and Banking sectors.  A repo rate cut is imminent, as the government wants to boost the GDP growth. The Repo rate is what RBI charges for overnight, i.e. one-day maturity, lending to banks. Normally, short-term interest rates are below long-term rates, which results in an upward sloping “yield curve”; reflecting higher yields for longer-term investments. What we are now seeing is the reverse, with the cost of 10-year money being lower than that of one-day money. An “inverted” yield curve, in other...

 Housing Development and Infrastructure Ltd: Buy CMP: Rs.66.40 The shares of  Housing Development and Infrastructure (HDIL), the Mumbai-based property developer  have a book value of Rs.248.81, while it has a market cap of only Rs.2,805.23 Cr. The company’s current debt on a consolidated basis stands at Rs.3,400 crore, whihc is getting regularly serviced.  Moreover, the HDIL  has recently re-launched its Kurla project called Premier Exotica at Kurla West.  Aimed at providing spacious homes and superior amenities, Premier Exotica boasts of a clubhouse, gymnasium, kids play area and landscaped gardens, to name a few.  The company claims it has all necessary approvals in place from various authorities and is in advanced stage of construction. The company plans to give possession of the apartments by June 2015. It has also re-launched its fixed rate home loan product  under which customers can avail home loans at a fixed interest rate ...

Tata Power buy indicates ‘consolidation happening in sector’ [ Editor : According to Money Control, November 18, 2014, the original MoU between JSW Energy Ltd (Rs.102.15) and JP Power Ventures Ltd (Rs.11.74), also included the Bina Thermal Unit.  Bina is still on the radar of JSW Energy, according to a company spokesman. It is just that JSW Energy and Jaypee Groups were able to conclude the due diligence for these two projects  (300 MW Baspa-II and 1091 MW Karcham Wangtoo hydro electric plant)  much quicker than Bina. So, they decided to go ahead with these two projects in the first tranche. Moreover, the situation in the Coal space has become much fluid now, with Government of India taking a number of steps, to boost the supply of coal in India. Zee Business on 18 December 2014, wrote:  "Government of India is scheduled to allot, auction 101 coal mines in 1st lot". Therefore, the next in the takeover-list of JSW Energy is Bina Thermal...

WINNING STROKES: THINK DIFFERENT Allied Digital India Office Directory A2Z Maintenance Engineering Services Ltd hit another buyer freeze yesterday. The scrip closed at Rs.17.20.  During the period ended September 30, 2014, the Company has secured EPC contracts worth approx. Rs.240,000 lacs. Allied Digital Services Ltd which came out with good set of numbers for the September, 2014, closed at Rs.22.40, yesterday. The company came out with a net profit of Rs.6.14 Cr and EPS of Rs.1.33 in the September, 2014 quarter.. For FY15, the EPS is likely to be Rs.3-3.5. The scrip will cross Rs.30, within a short time.  Seeing the share price of Resurgere Mines and Minerals Ltd (Rs.1.41) not going anywhere, during this raging bull run, might have left many of you disappointed.....But off late there are lot of happenings in the Indian Mining Sector. On  December 3, 2014, the Hindu Business Line reported: In October, Sandvik announced a plan to set up its sixth manufa...

MARKET MANTRA Nifty has witnessed a correction of 666 points or 7.7 percent from the high of 8627 in just 9 trading sessions, which indicates the severity of the bear-onslaught. However, the level of 8000 would continue to provide the necessary bulwark for the bulls. The Nifty is now trading at 8098.55 up 68.55 points.  Resistance : 8140 / 8170 Support : 8000 / 7950 The US market ended higher on Wednesday after the Federal Reserve replaced its pledge on keeping rates near zero from "for a considerable time' to 'can be patient' at the end of its two day Open Market Committee meet. The key Asian indices rose today, tracking gains in US equities. Fundamentally speaking, the domestic indices are expected to recover following dovish remarks by the US Federal Reserve on rate hike and continue to trade in the Green.  Today's call : Buy A2Z Maintenance and Engineering Services Ltd at Rs.16.40 (in the BSE), for a target of Rs.18.5--26, in the short to...

Market Mantra Nifty fell down to 8216 on Friday, as the whirlwind correction took its toll, after an initial rise to 8322. At the end Nifty closed at 8224 with a net loss of around 69 points. However, as is seen since the morning trade 8150-8170 is likley to provide support for Nifty. At present the Nifty_spot is trading at 8,218.35 down 5.75 points. However, for the moment the correction seems to be over. The traders are suggested to for Nifty longs at 8,263.90 with a target of 8400. The investors are suggested to go full hog on the rate sensitives as Repo rate cut is now imminent.; RESISTANCE : 8270 / 8300 SUPPORT : 8170 / 8150

Wall St drops as oil price continues to descend [ Editor : When the Crude Oil is falling showcasing an impending slowdown of Global Economy (though many say it is due to some other extraneous factors like shale gas boom and cold war between Saudi Arabia and US), and both the CPI and IIP falling  from grace, what is the RBI Governor doing? Trying to justify, whether Narendra Modi is right on wrong, in chalking out plans to make India a Manufacturing Hub? Silly!! If the highly qualified governor of the RBI starts analyzing Narendra Modi's pedestrian  rhetorics, which are basically aimed towards "Mass (Public) consumption", then what to say!! However, I feel if the Repo rates are not cut immediately and the government fails to come up with quick measures to boost the Indian Economy, we might slip into a prolonged recession. The FII data and the direction of Nifty is what is likely to rattle both the RBI and the GOI in the next week] NEW YORK - U.S. sto...

WINNING STROKES: THINK DIFFERENT Today also Pipavav Defence and Offshore Ltd touched Rs.48, before closing at Rs.45.80. As of  now there are lot of positive developments in the sector in which it is into. The investors can add the scrip, in all declines. However, short term traders can keep a SL of Rs.44.  Glodyne Technoserve Ltd hit another buyer freeze today at Rs.3.82. However, avoid taking fresh positions in the counter, till more clarity comes on its functioning. Allied Digital Services Ltd today closed in the green at Rs.22.20, up 4.72%. I have already mentioned that this is a turnaround story and hence don't sell the scrip in a hurry. After Q3FY15 results, the stock will cross Rs.32 and then Rs.37-42. Nifty today broke its support at 8260 and is  now precariously placed near 8200, the next support level. The Nifty closed in the red today at  8,224.10 with a net loss of 68.80 points.  The FII/FPI were net sellers of Rs.864.96 Cr of Indian secu...