FROM THE DESK OF RESEARCH- BY Mansukh June, 2011

Indian equity indices went through a turbulent week as they failed to negotiate a close above the neutral line for even a single session and eventually snapped the week with a cut of over two percent.

The  week  largely  remained  characterized  by  choppiness  because investors were reluctant to pile up positions and indulged largely in stock specific activities as corporate India continued to divulge their fourth quarterly report card. Volatility gradually accelerated session after session as the April series Futures and Options settlement neared while  quarterly  earnings'announcements by RIL, Wipro, Bank of Baroda, Ambuja Cement, Crompton Greaves, TVS Motors were punished badly as they remained below Street's expectations. On one hand spiraling international crude oil prices become the headache of policymakers while on the other, worries over global economic recovery loomed large, given the fact that world's biggest economy continues to grow at a tepid pace.   The April series F&O settlement day turned out to be another pathetic trading session for the Indian  stock  markets  as  the  selling  pressure  gathered  greater momentum after government released the disappointing food inflation numbers which stayed absolutely flat at 8.76% on annual basis during week-ended April 16 compared with 8.74% recorded in the previous week. Rate sensitive counters like Real Estate and Bankex witnessed relentless selling pressure througsession for theh the week ahead of the RBI's annual monetary policy review meet on May 3rd where it is expected to bite the bullet and hike rates by 50 bps to cool the spiraling inflation which has vehemently hovered at uncomfortable levels on the back of crude oil    prices which have skyrocketed by over 50% in last six months. The  Foreign Institutional Investors on the other hand ploughed back their money from the local markets to the extent of Rs 2,703 crore in the week on expectations that deteriorating domestic macro headwinds will have adverse impacts on the companies' earnings thereby reducing the returns on investment.

The Bombay Stock Exchange (BSE) Sensex lost 466.27 points or 2.38% to 19,135.96 during the week ended April 29, 2011. The BSE Mid-cap index declined by 141.07 points or 1.95% to 7,094.23 and the Small-cap index shed 163.26 points or 1.84% to 8,715.31. On the sectoral front, Reality lost 201.17 points or 8.45% to 2180.10, Capital Goods (CG) shed 607.16 points or 4.45% to 13,036.91, Bankex declined by 468.163 points or 3.46% to 13545.13, Oil & Gas tumbled by 301 points or 2.92% to 10,008.27   and   Metal   index   down   by   467.98   points   or   2.81%   to 16,190.59,were the top losers on the BSE, while Health Care(HC) adding 74.77 points or 1.21% to 6232.55 and FMCG advanced 24.78 points or 0.66% to 3755.16 were the only gainers on the sectoral space. The S&P CNX Nifty trimmed 135.20 points or 2.30% to 5750. On the National Stock Exchange (NSE), Bank Nifty lost 3.46% to 11,483.75, CNX mid-cap shed 1.36% to 8,200.95, CNX Nifty Junior declined by 1.35% to 11,376.70 and     CNX IT tumbled by 0.92% to 6718.35. Conclusively we expect slightly range  bound  scenario  between  5555-5960  though  sentiments  remain subdued for the upcoming sessions. Any closing above this 5960 with substantial volumes for at least 2 consecutive days may generate another 2-3% return and we might see 6070-6080 in the short term. HAPPY TRADING......

THINGS TO REMEMBER WHILE SHORT SELLING

“It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach “

Betting on rising stocks always deemed to be a profitable business from the point of view of trading or investing but have you ever being thought that you can also earn or gain profits in short term while stock goes down. Yes it is true that you can also earn and you could see your portfolio increase in value during a bear market too? Many investors make money on a decline in an individual stock or during a bear market only with the help of using an investing technique called short selling. Short selling is not complex but the concepts of short selling are not so easy to understand, especially for investors. Generally investors buy stocks and hold it until it appreciates and make profit when it rises, while short selling is opposite of that, in shorting stocks investors make money only when a shorted security falls in value. However, short selling involves many unique risks and pitfalls because mechanisms of short selling are relatively complicated compared to normal transaction, so it is very important to understand how the whole process works before you get involved.

What is Short Selling?

Actually when an investor goes long on an investment, it means that he or she has bought a stock believing its price will rise in the future. Conversely, when an investor goes short he or she is anticipating a decrease in share price therefore “Short selling is the selling of a stock that the seller does not own. More specifically, a short selling means the sale of a security or any individual stock that is not owned by the seller at that point of time, but he promises to deliver it at time of delivery is called short selling”.

Reasons to Short

Usually there are two reasons behind the short selling, one used either for speculation or other for hedging. Let us discuss that where short selling used to speculate and where to hedge and also what are the restrictions to be followed while shorting stocks.

Speculation: Despite the negative perception on short selling speculation is done while watching the fluctuations in the market in order to quickly make a big profit of high-risk investments. However, speculation involves a calculated assessment of the markets and taking risks where the odds appear to be in your favor. Actually speculators can assume a high loss if they use the wrong strategies at the wrong time, but they can also see high rewards if they speculated correctly.

Hedging: Short selling is also used by most of investor for Hedging. Hedging involves taking an offsetting position in a derivative in order to balance any gains and losses to the underlying asset. Hedging can be a benefit because you're insuring your stock against risk, but it can also be expensive and a basis risk can occur. The majority of investors use shorts to hedge. This means they are protecting other long positions with offsetting short positions.

Restrictions: However, short selling is done whether for speculation or for hedging but there are certain restrictions have to be followed by the investors. The main restriction of short selling is that you can place order within specified size, price and type of stocks in which you can short. For example, penny stocks cannot be sold short, and most short sales need to be done in round lots. There are certain restrictions placed to prevent the manipulation of stock prices.

Risk Involved in Short Selling

Short selling is good to make profits in short term but short selling is also very risky bet because there are some unique risks entails like it is a pure gambling the losses can be infinite. Short selling can also make you bankrupt because money used might be from borrowings and short selling required to submit margin money with the broker. Lastly, short selling also works when it has been done with right timing because even selection of asset for short selling correct but if the timing is not suitable you will not be successful.

Conclusion: In a brief, short selling sale means an investor borrows shares, sells them and must eventually return the same shares (cover). Profit (or loss) is made on the difference between the prices at which the shares are borrowed compared to when they are returned. An investor makes money only when a shorted security falls in value. In fact short selling can be also used for adding some more profits to your portfolio in downside or bearish market. This is suitable if it fits with your risk tolerance and investing style. Short selling provides a sizable opportunity with a hefty dose of risk. We hope this tutorial has enabled you to understand whether it's something you would like to pursue from the short selling.

Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Fundamental Pick for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

Financial Investment Grounds And Fundamental Pick For Essar Oil

“The safe way to double your money is to fold it over once and put it in your pocket “

Essar Oil, part of Ruia family's Essar group is engaged in exploration and production (E&P), refining and marketing of oil and oil related products. With the production capacity of 14 MMTPA oil refining it has also 1,635 retail outlets of fuel station across the country. In E&P business it is producing about 35,000 scmd from 33 production wells and also has 2C contingent resources of 148 mmboe. Globally it also has refining capacity 300,000 bpsd and also having a controlling stake of 50% stake in Kenya Petroleum Refineries Ltd's 80,000-bpsd refinery.

FINANCIALS: Since FY06 to FY11 the Net Sales of the Essar oil has grown at CAGR of 136% while on account of high cost raw materials it beard losses up to FY09 but now in FY11 the Net Sales jumped by 28.7%% to Rs 46988 crore over FY10 and Operating Profit rose by 114% to Rs 2557 crore, the PAT for the same period also surged 2155% to Rs 654 crore. The OPM & PATM of Essar oil for the same period stood at 5.44% & 1.25% respectively. In Q4FY11 the Net Sales surged by 27.4%, Operating Profit & PAT also grew by 132% & 78% respectively.

INVESTMENT GROUNDS

Industry Outline

After facing an economic slowdown in FY09 the worldwide demand for oil is now on its peak level and even in 2011 the demand for oil has suppressed the highest ever demand of 2010, the global demand for oil in 2010 was 87.81 mmbpd while in 2011 it touched 89.35 mmbpd. The mass consumption is coming from Asian region (0.78), Middle East (0.25) and Latin America (0.20) mmbpd. Despite increase in consumption of Oil & Gas world wide the per capita oil consumption in India is one of the lowest among major countries. In 2010 the annual per capita oil consumption in India was 0.9 barrels/person while in other developing countries like Russia, Brazil and China it stood at 7.5, 4.4 and 2.3 barrels/person in the same period. However, USA and European countries still have the highest per capita oil consumption, In USA it is around 19.4 and in EU it 9.7 barrels/person. The situation is almost the same for the consumption of gas. However, the demand for petroleum products in India is growing at fast rate the demand for oil grew at 6.5% in FY11 from 1.4% in FY06 and demand for Gasoline also increased from 4.8% to 10.9% for the same period.

Capacity Expansion will help to improve the GRM…

Essar oil is enhancing the production capacity of existing refining up to 18 MMTPA from current capacity of 14 MMTPA. The increased production is expected to start from mid Q4 CY11. Essar Oil is also ready to optimize the cost of its six refinery units which is scheduled to be completed by September 2012. This optimization will further enhance its production capacity up to 20 MMTPA and also increase the complexity (GRM) of the company up to US$11.8 from current US$6.1. Further under phase-II Plan company has also targeted to achieve the capacity up to 38 MMTPA. After achieving this much of capacity Essar oil will enjoy the complexity of US$12.8.

Expanding Presence in Retailing by adding more Outlets…

Essar oil is currently running 1,635 retail outlets across the country and to increase the presence in oil marketing segment it aimed to extend 5000 outlets across the country, currently 254 outlets in various stages of construction. Recently company has commissioned two CNG stations in association with Sabarmati & GSPC and also focusing on ALPG & CNG pumps through tie Aegis, Sabarmati Gas and GAIL Gas respectively. Besides this, company is also focusing on revenue from non fuel business and formed alliances with various Govt agencies to for that.

Exploration and Production Business also rapidly growing…

In Exploration and Production segment Essar oil has also presence through diverse portfolio of offshore and onshore oil & gas blocks. Currently it is producing about 35,000 scmd from 33 production wells and also got the approval from MoPNG for drilling another 500 production wells in Raniganj. In Raniganj to start commercial production the construction of 48-km gas evacuation pipeline from Raniganj to Durgapur has also been completed. Company has also signed contracts for 4 Indian Coal Bed Methane blocks with estimated resources of over 7.6 tcf.

Read more about  Mansukh monthly magazine report on Indian Stock Market

Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Fundamental Pick for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

TECHNICAL ANALYSIS On UNITED SPIRITS LTD (MCDOWELL & C) And Lupin LTD

United Spirits (USL) is the largest spirits company in India and a flagship entity of $2 billion UB group. It manufactures wide range of whisky, vodka, rum and other spirits. United Spirits is among the top three spirits companies in the world. It has a presence in over 59 countries. USL's technical centre is located in Bangalore, which develops new products, conducts research and development, flavor testing and quality management. It has 62 manufacturing units. The company has received recognition for its quality products from independent jury such as International Wine & Spirits Competition (UK), International Spirits Challenge (UK), World Beverage Competition (US), Monde Quality Institute (Belgium) and Mundusvini (Germany). India's changing demography presents a significant opportunity for United Spirits to tap especially in the prestige segment. The company currently operates at 53 percent share-points in the segment. McDowell's No. 1 Platinum was launched in March 2010, is available in packs of 750 ml, 375 ml and 180 ml and is a part of Rs 8,300 crore McDowell's franchise.

On technical perspective, stock currently shows significant correction from the highs of Rs 1688 however we believe it's a temporary one and we might see some buying opportunities in the near term. Nevertheless its technical indicators i.e. RSI and MACD also revealed some technical pull back in near term.

Lupin is a transnational company engaged in development of APIs, generic and branded formulations. It is the largest manufacturer of Tuberculosis drugs in the world. It has onshore and offshore presence of its products in 70 countries. Its manufacturing unit is located in Goa, Tarapur, Ankleshwar, Jammu, Mandideep, Indore, Aurangabad and Kyowa in Japan. The manufacturing facilities of the company are approved by various international regulatory agencies like US FDA, UK MHRA, TGA Australia, WHO, and MCC South Africa. We expect Lupin to start API supply to Salix after a couple of years (~ in FY2013). The scale up in the deal clearly outlines the high probability of success for the drug to commercialise. Further, an approval for new indications would lead to higher API supplies and royalties in future. At the current market price of Rs440, the stock trades at 18.3x FY2012E fully diluted earnings and at 15.8x FY2013E fully diluted earnings. We maintain our Buy recommendation on the stock with a price target of Rs480.

On technical viewpoint, stock has shown upward bias after having consolidation around Rs 420. In close proximity we believe stock is well poised to move in upward direction. Moreover it's RSI and other technical indicators stands in the positive territory where possibility of turnaround couldn't be rule out. Hence investors are advised to BUY this stock for a price target of Rs 470-480 in near term.

Read more about  Mansukh monthly magazine report on Indian Stock Market

Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also help you do your own Analysis conveniently and smartly. Mansukh is providing derivative trading and Technical Analysis for last 15 years. For all the latest happening of the market please visit http://moneysukh.com

IMF SUPPORTING ADDITIONAL FISCAL TAPERING TO STAY AWAY FROM OVER HEATING

"We didn't actually overspend our budget. The allocation simply fell short of our expenditure"

Emerging Asia is all set to continue leading global economic growth over the next couple of years but risks are increasing, particularly from a very high inflation and surging commodity prices amidst political unrest in some of the Middle East countries, said the International Monetary Fund (IMF) on Thursday. Asian growth will continue to be driven by economic powerhouses China and India. The IMF expects the Chinese economy to grow 9.5% while India will expand about 8% over the next two years. However, the multilateral body also cautioned against pockets of overheating across the region as inflation increases rapidly and capacities face increasing pressure. Higher global oil and food prices were further adding fuel to the problem.

The wholesale price index (WPI) , India's main inflation gauge, is expected to rise by an average 8.8 percent for the fiscal year ending March 2011 before easing to 6.4 percent in the following year. This is considerably higher than 8.3 and 5.7 percent forecast in the October survey. Driven by costlier food items, wholesale price inflation soared to an annual 8.43 percent in December,Real policy rates are still negative in several regional economies, including China and India,' observed the IMF in its report titled 'Asia and Pacific: Managing the next phase of growth'. The agency added that even if signs of overheating are mixed, keeping real interest rates too low for too long could contribute to financial instability. As such, key Asian central banks, including the Reserve Bank of India (RBI) should look at more aggressive monetary tightening to ensure economy remained stable. Inflation in India continues to remain higher despite the RBI hiking its key policy rates eight times in the last financial year. Headline inflation accelerated in last couple of months to 9% as the core inflation (price rise in non-food manufacturing space) too accelerated.This has put the central bank into a tight corner. Clearly, somehow the policy makers have missed the underlying momentum of inflation.

The central bank has to think again now if it wanted to continue with a calibrated policy of hiking rates by 25 bps at a time or if it was time for more aggressive policy tightening. Most economists now expect inflation to remain at elevated levels in the current financial year as well as rising costs have not been fully passed on to consumers. For instance, even as the crude prices are ruling at around $120 a barrel, India's retail fuel prices continue to be aligned to crude prices of around $75 a barrel. However, the risk that RBI would face in the more aggressive tightening scenario is that growth is already showing some signs of moderation and rapid rate hikes from here on will risk a far greater slowdown than what might be needed to avoid overheating. This is particularly so because in case of India the lag in monetary transmission is quite longer, running into a few quarters, and therefore the central bank would also have to work out how far the already implemented tightening has transmitted into the system.

Bond yields were trading range bound with positive bias since most of the traders preferred to stay on the sidelines ahead of the central bank's annual policy review on Tuesday. The Indian market has priced in at least a 25 basis points increase at the central bank's policy review early next week, but there is a possibility the rise could be 50 bps. Further, dealers were also eying the results of Rs 6000 crore of cash management bills later on Friday.

The yields on newly issued 10-year benchmark, the 7.80%-2021 was higher at 8.13% from its previous close of 8.11%, ahead of policy decisions on Tuesday. The benchmark five-year interest rate swaps was up 1 basis point at 8.27% from its previous close of 8.26%. The Reserve Bank of India has today announced the auction of 77-day Government of India Cash Management Bills for a notified amount of Rs. 6,000 crore. The auction will be conducted on April 29, 2011 using 'Multiple Price Auction' method. While on the other hand The partially convertible rupee was currently trading at 44.39/40, stronger compared with its Thursday's close of 44.43/44. The rupee opened at 44.42/43 and has touched a high and a low of 44.46/47 and 44.39/40 respectively. The index of the dollar against six major currencies was down 0.04 percent at 73.089 points. The May currency future was trading at 44.63/64 with a spread of 0.0025 and a volume of 600,124. The contract opened weaker at 44.78/79 against its previous closing of 44.66/67. The open interest (OI) stood at 892,337 up by 4.41% compared to its prevoius close of 854.615.

Read more about Mansukh Monthly Magazine Report May 2011

GLOBAL ECONOMY - CHINA WILL OUTSHINE THE US IN NEXT 10-12 YEARS

“Every morning I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work”

 

For the first time, the international organization has set a date for the evolution when the “Age of America” will finish and the U.S. economy will be leaving behind by that of China. According to the latest IMF official forecasts, China's economy will outshine that of America in real terms up to 2016-2017 — just five to six years from now. And it's a lot closer than you may think. It endow with a painful context for the budget wrangling taking place in Washington right now. It hoists massive questions about what the international security system is going to give the impression of being like in just a handful of years. And it casts a deepening blur over both the U.S. dollar and the gigantic Treasury market, which have been buttress up for decades by their privileged status as the liabilities of the world's hegemonic power. 

In addition to comparing the two countries based on exchange rates, the IMF analysis also looked to the true, real-terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies. Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America's share of the world output down to 17.7%, the lowest in modern times. China's would reach 18%, and rising. Just 10 years ago, the U.S. economy was three times the size of China's. Naturally, all forecasts are fallible. Time and chance happen to them all. The actual date when China surpasses the U.S. might come even earlier than the IMF predicts, or somewhat later. If the great Chinese juggernaut blows a tire, as a growing number fear it might, it could even delay things by several years. But the outcome is scarcely in doubt.

FED CUTS ECONOMY OUTLOOK: The Federal Reserve Chairman Ben S. Bernanke stated on Wednesday that the US economy still requires monetary support and the Fed will end its $600 billion bond-buying program through June, indicating that the central bank is in no rush to scale back its support for the US economy and will keep its benchmark interest rate near zero for an extended period'. At the first post-policy meeting press conference in the Fed's 97-year history, Bernanke tried to demonstrate the central bank as a dependable custodian of the US recovery as the bank begins to retreat from emergency measures.

But amid relatively higher unemployment rate, a declining housing market and tepid growth, Wednesday's move was far from a full-blown move back from pre-crisis policies. The Fed shielded its ultra-accommodative policy by highlighting that although the labor market is healing, the housing sector remains depressed and the recent surge in energy prices will likely prove transitory. As far as unemployment rate is concerned, it expected to be in a range of 8.4%-8.7% for the calendar year which is upgraded from the 8.8%-9.0% range forecast in January.

The Fed also went ahead to not only lowering its economy outlook for 2011 due to sluggish first quarter growth on the back of adverse inflationary implications of soaring energy costs but the central bank also raised its forecast for inflation. The central bank has cut GDP expansion forecasts to 3.1%-3.3% from the previous outlook of 3.4%-3.9% for the year 2011 and the annual inflation is expected to swell by 2.1%-2.8% compared to January's expected range of 1.3%-1.7%.

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Indian Equity Indices - From The Desk Of Research

Indian equity indices went through a turbulent week as they failed to negotiate a close above the neutral line for even a single session and eventually snapped the week with a cut of over two percent. The week largely remained characterized by choppiness because investors were reluctant to pile up positions and indulged largely in stock specific activities as corporate India continued to divulge their fourth quarterly report card. Volatility gradually accelerated session after session as the April series Futures and Options settlement neared while quarterly earnings' announcements by RIL,Wipro,Bank of Baroda, Ambuja Cement,

Crompton Greaves, TVS Motors were punished badly as they remained below Street's expectations.On one hand spiraling international crude oil prices become the headache of policymakers while on the other, worries over global economic recovery loomed large, given the fact that world's biggest economy continues to grow at a tepid pace. The April series F&O settlement day turned out to be another pathetic trading session for the Indian stock markets as the selling pressure gathered greater momentum after government released the disappointing food inflation numbers which stayed absolutely flat at 8.76% on annual basis during week-ended April 16 compared with 8.74% recorded in the previous week. Rate sensitive counters like Real Estate and Bankex witnessed relentless selling pressure through the week ahead of the RBI's annual monetary policy review meet on May 3rd where it is expected to bite the bullet and hike rates by 50 bps to cool the spiraling inflation which has vehemently hovered at uncomfortable levels on the back of crude oil prices which have skyrocketed by over 50% in last six months. The Foreign Institutional Investors on the other hand ploughed back their money from the local markets to the extent of Rs 2,703 crore in the week on expectations that deteriorating domestic macro headwinds will have adverse impacts on the companies' earnings thereby reducing the returns on investment. The Bombay Stock Exchange (BSE) Sensex lost 466.27 points or 2.38% to 19,135.96 during the week ended April 29, 2011. The BSE Mid-cap index declined by 141.07 points or 1.95% to 7,094.23 and the Small-cap index shed 163.26 points or 1.84% to 8,715.31. On the sectoral front, Reality lost 201.17 points or 8.45% to 2180.10,

Capital Goods (CG) shed 607.16 points or 4.45% to 13,036.91, Bankex declined by 468.163 points or 3.46% to 13545.13, Oil & Gas tumbled by 301 points or 2.92% to 10,008.27 and Metal index down by 467.98 points or 2.81% to 16,190.59,were the top losers on the BSE, while Health Care(HC) adding 74.77 points or 1.21% to 6232.55 and FMCG advanced 24.78 points or 0.66% to 3755.16 were the only gainers on the sectoral space. The S&P CNX Nifty trimmed 135.20 points or 2.30% to 5750. On the National Stock Exchange (NSE), Bank Nifty lost 3.46% to 11,483.75, CNX mid-cap shed 1.36% to 8,200.95, CNX Nifty Junior declined by 1.35% to 11,376.70 and CNX IT tumbled by 0.92% to 6718.35. Conclusively we expect slightly range bound scenario between 5555-5960 though sentiments remain subdued for the upcoming sessions. Any closing above this 5960 with substantial volumes for at least 2 consecutive days may generate another 2-3% return and we might see 6070-6080 in the short term.HAPPY TRADING......

Read more about  Stock Market Monthly Report By Mansukh

Equity Research Weekly Market Outlook Report By Mansukh 30th-April-2011

SNAPSHOT

Local Bourses prolonged their losses for the fifth straight session lacking support at higher levels, thereby snapping the week with loss of over 2%. Persistent selling pressure in view of sustained capital outflows by foreign institutional investors coupled with selling across the global equities led to the damage at Dalal Street. The 50 scrip index'Nifty --on National Stock Exchange plunged in trade thereby marking sluggish start for the new F&O expiry series on Friday as investors braced for a hawkish statement from the Reserve Bank when it releases its policy on Tuesday. Financials led the decline with the market expecting the Reserve Bank of India (RBI) to raise key short-term rates by at least 25 basis points to rein in high inflation. It would be the ninth increase since mid-March last year. India VIX, a gauge for market's short term expectation of volatility lost 6.40% at 19.58 from its previous close of 20.92 on Thursday. The S&P CNX Nifty lost 34.50 points or 0.60% to settle at 5,750.95. The index touched high and low of 5,804.30 and 5,706.05, respectively. 24 stocks advanced against 26 declining ones on the index.

WEEK GONE BY

Indian equity indices went through a turbulent week as they failed to negotiate a close above the neutral line for even a single session and eventually snapped the week with a cut of over two percent. The week largely remained characterized by choppiness because investors were reluctant to pile up positions and indulged largely in stock specific activities as

corporate India continued to divulge their fourth quarterly report card. Volatility gradually accelerated session after session as the April series Futures and Options settlement neared while quarterly earnings' announcements by RIL, Wipro, Bank of Baroda, Ambuja Cement, Crompton Greaves, TVS Motors were punished badly as they remained below Street's expectations. On one hand spiraling international crude oil prices become the headache of policymakers while on the other, worries over global economic recovery loomed large, given the fact that world's biggest economy continues to grow at a tepid pace. Updates from the 2G case trial kept hitting headlines through the week thereby weighing down sentiments and prompting investors to book profits in scam linked shares like RCom, Unitech and DB Realty. The April series F&O settlement day turned out to be another pathetic trading session for the Indian stock markets as the selling pressure gathered greater momentum after government released the disappointing food inflation numbers which stayed absolutely flat at 8.76% on annual basis during week-ended April 16 compared with 8.74% recorded in the previous week.

Read more about Weekly market outlook

Related post about Equity Research Weekly Market Outlook Report By Mansukh

Financial Investment And Fundamental Pick For Lupin Ltd

In last quarter Lupin has also got the final approval of Nabumetone used for acute and chronic treatment from the department USFDA. The annual sale of the Nabumetone in US market was $66.80 million for the twelve months ended September 2010.

Lupin, with the presence of over 70 countries is engaged in development of APIs, generic, branded formulations and also the largest manufacturer of TB drugs in the world. Company provides wide range of products like treatment of Cephalosporins, CVS, central nervous system CNS, Anti-Asthma, Anti-TB, Diabetology, Dermatology, GI, and many more. Being a fastest growing top 10 Generics players in the two largest pharmaceutical markets of the world U.S and Japan Lupin has presence in Europe and other emerging countries.

Financials: Top Line and Bottom Line of Lupin grown at CAGR of 30% and 50% respectively in FY05-FY10. In FY10 the Consolidated Net Sales of Lupin rose by 30%% to Rs 4740.52 crore over FY09, Operating

Profit also surged by 33% to Rs 983.89 crore, PAT for the same period also jumped by 37% to Rs 699.67 crore over FY09. In Q3FY11 Consolidated Net Sales of the bank surged by 16.87%, Operating Profit & PAT also grew by 13.64% & 38.23% respectively while the OPM & PATM of Lupin for the same period were 20.26% & 15% respectively.

INVESTMENT GROUNDS
Industry Outline

Indian pharmaceutical industry in one of the fastest growing markets in the world and with the value of worth US$ 11bn India is also top exporting country in generic medicines. The generic drugs market valued US$ 20bn in India is expected to grow at a CAGR of around 16% during FY11-FY13. US generic market which has crossed US$ 80bn mark in 2010 is projected to grow at CAGR of around 10% during 20102013 while on the other hand with the value of US$ 75bn Japan is the second largest pharma market in the world and Japanese generic drugs market has also been witnessing positive developments for the past few years and reached US$ 8bn in 2010 and further expected to grow at CAGR of 9-10% during FY09 to Fy13.

Subsidiary likely to get the benefit from recent crises in Japan…

Lupin is likely to get the benefit from the recent calamity occurred in Japan. Actually Lupin's 100% subsidiary Kyowa Pharma operates in world's second-largest pharmaceutical market (Japan) with the portfolio of over 200 brands. Kyowa is one of the largest generic players in the Neurology segment with 95 products and covers 94% of psychiatry hospitals in Japan. Kyowa contributes 11% to the total revenue of the Lupin and recently a massive earthquake followed by devastating tsunami have created several health problems like gastrointestinal, post-traumatic care and infections, Kyowa which has variety of products for these kind of diseases and also a leader in the CNS segment might see the phenomenal demand for such drugs in near term.

Insured Revenue from New Drug Approvals, Agreements and Settlements…

In last quarter Lupin has also got the final approval of Nabumetone used for acute and chronic treatment from the department USFDA. The annual sale of the Nabumetone in US market was $66.80 million

for the twelve months ended September 2010. In US branded portfolio already forms 29% of US Turnover and so far in US Lupin has filled for the approval of 137 drugs and out of which 47 products approved

while in Europe out of 86 drugs 38 got the final approval. In US Lupin has also settled its ongoing litigations with Sunovion over Generic of Lunesta.

Phenomenal Growth in Overseas Markets in Q3FY11…

In quarter ended Dec 2010 Lupin has registered exceptional growth in developed countries like US and Europe. US, which forms branded portfolio 29% of US turnover and accounts 41% of overall revenue of Lupin's 41% is the 5th largest Generic player in terms of prescriptions. Its Generics business grew by 49% in US and 72% in Europe during the same quarter. In Europe it has launched some vital products and also got the approval for the same. Lupin's one of the products like Ceftiofur Ranked #1 and Cefpodoxime Proxetil has market share of 72% in France. In South African market with the growth of 37% in ZAR terms Lupin is sixth largest generic company.

Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also give you online trading solution conveniently and smartly. For all the latest happening of Share market trading, visit http://moneysukh.com. 

Technical Analysis Orbit Corporation Ltd And Voltas Ltd Report By Mansukh

Moreover it's RSI and other technical indicators stands in the oversold territory where possibility of turnaround couldn't be rule out. Hence investors are advised to BUY this stock for a price target of Rs 200-210 in one month. 

We are optimistic about OCL South-Mumbai focused real estate business model. Despite reporting de-growth in the net profit we still believe company will outperform its peers in the near future. Company stands benefit from the new CRZ norms passed in Jan'11. Under this norm the no-development zone has been reduced to 100 meters from 200 meters. Further with three new projects to be launched in next 2-3 quarters including its two prime projects in the heart of the Island City at Napean Sea Road (0.3msf) and Lalbaug (0.075msf) and one in the Mumbai-suburb micro-market at Santacruz (0.3msf), together these projects provides enough revenue visibility in the near future. At CMP `54, the stock is trading at 6.3x and 4.1x FY12E and FY13E earnings while on P/BV basis the stock is available at 0.5x and 0.4x its FY12E and FY13E book value respectively. We maintain our “Buy” rating however we have revised our target price downward to Rs 70.

On technical perspective, stock market currently shows significant correction from the highs of Rs 91 however we believe it's a temporary one and we might see some buying opportunities in the near term. Nevertheless its technical indicators i.e. RSI and MACD also revealed some technical pull back in near term.

Voltas has transformed itself from a traditional HVAC (Heating, Ventilation & Air Conditioners) player to a complete MEP (Mechanical, Electrical & Plumbing) player. Being a complete MEP contractor expands the scope of work in total project cost from 15% for HVAC to 35% for MEP by offering services like power systems, fire detection and protection, process refrigeration, public health engineering, indoor air quality and integrated building management in addition to the core HVAC solutions. The EMPS segment has grown at a CAGR of 29.5% over FY05-10 to Rs. 3113.4 Crs and contributes

~60% to the company's total revenues. The segment's current order book stands at Rs. 4697 Crs (31st December 2010). The company expects Rohini Industrial Electrical to turn around by next fiscal which would positively add to the company's margins. With the visible growth prospects in the UCP and EPS division, led by rising infrastructure stock investments coupled with strong order book and good track record, we believe Voltas has strong revenue visibility. At the CMP of Rs.178, the stock is trading at 15.6x and 13.7x its FY11E and FY12E EPS respectively. We recommend BUY on the stock with a target price of Rs. 210, providing an upside of more than 15% from the current levels. On technical viewpoint, stock has shown some consolidation around Rs 155. In close proximity we believe stock is well poised to move in upward direction. Moreover it's RSI and other technical indicators stands in the oversold territory where possibility of turnaround couldn't be rule out. Hence stock investors are advised to BUY this stock for a price target of Rs 200-210 in one month.

Mansukh brings to you the most updated monthly magazine which will not only help you in understanding online share market but will also give you online trading solution conveniently and smartly. For all the latest happening of Share market trading, visit http://moneysukh.com.

Related post Post Budget Analysis Of 2011

Equity Research Weekly Market Outlook Report By Mansukh 26-March-2011

SNAPSHOT

Despite starting the week with a lackadaisical performance and ending below the crucial support levels of 5,400 and 18,000, the benchmarks convalesced on Tuesday and carried forward the strong rally for rest of the of the week as they vivaciously conquered a lot of psychological levels on their way up. The consolidation in crude prices around $105 levels despite escalating turbulences in the Middle East nations was also seen as an opportunity by the local investors who resorted to broad based buying as tabling of the banking sector amendment bill and the Constitution Amendment Bill in parliament buttressed the chances of a rebound for the domestic indices. Moreover, bourses rallied over two percentage points on the last trading day of the week to finish the action-packed week on an exciting note. The spurt on the last trading day in benchmarks was not only due to sanguine leads from the global market but also on encouraging local cues like the overall growth  in the farm sector being pegged at 5.4% along with finance minister's avowal of 9% growth in the next fiscal in the upper house of Parliament stoking investor sentiments. 

Boisterous Indian stock markets witnessed an awe-inspiring week of trade as it seemed like the bullishness of the recent past has come to the fore. The frontline indices accumulated over a gargantuan five percentage points for the week taking the benchmarks to around two month high levels as optimistic global cues coupled with encouraging local developments fortified investors' mood. The Bombay Stock Exchange (BSE) Sensex surged 936.83 points or 5.24% to 18,815.64 during the week ended March 25, 2011.The BSE Mid-cap index gained 3.25% to 6,721.56 and the Small-cap index advanced 2.61% to 8,001.63. All the sectoral indices on the BSE were in the positive terrain; Realty was up 184.64 points or 8.99% to 2,237.87, Bankex up by 741.78 points or 6.09% to 12926.07, IT up 344.65 points or 5.74% to 6,344.62, TECk up by 198.55 points or 5.62% to 3729.29 and Capital Goods (CG) up by 646.72 points or 5.23% to 12,373.27 were the major gainer. The S&P CNX Nifty zoomed 280.55 points or 5.22% to 5,654.25. On the National Stock Exchange (NSE), Bank Nifty surged 6.27% to 11,387.30, CNX IT soared 5.77% to 6,930.65, CNX Nifty Junior advanced 3.08% to 10,943.10 and CNX mid- cap gained 3.05% to 7,824.15. 

WEEK AHEAD
Amidst rising crude oil prices would continue to be threat for the equity markets in the coming week which is characterized by the volatility of  the expiry of F&O series for the month of March, Investor's in the coming week will be eagerly eyeing the core sector growth data, as measured
by the index of six key infrastructure industries, having a combined weight of 26.7% in the Index of Industrial Production (IIP) and also the HSBC India Manufacturing PMI data for the month of March. Further, investor's will keep a close watch on telecom stocks as recommendations on the proposed new policies for telecom infrastructure and manufacturing will be coming in the next week. On the global front, investor's will be eyeing lots of major economic data from the US, starting with Existing Home Sales data on March 21,2011, New Home Sales data, Durable Goods Orders and Jobless Claims data and finally the Corporate Profits data.  Therefore any closing above 5670-5690 for at least two consecutive days may reap indices towards 5800-5850 where we might see some sort of consolidation. On the flip side 5355 still a major support for the March series. HAPPY TRADING…..

Trade In Crude Being Extra Alert Mansukh Monthly Report

Crude oil price still appears to go up but how long this bullishness will sustain is very difficult to predict. So do trade in crude but being very active & cautious.

A MONTH ago Brent crude oil stood at around $96 a barrel and Hosni Mubarak was ensconced as Egypt's ruler. Now he is gone, overthrown by a display of people power that is shaking autocratic leaders across North Africa and the Middle East. And oil has surged above $111. Little wonder. The region provides 35% of the world's oil. Libya, the scene of growing violence this week, produces 1.7m of the world's 88m barrels a day. So far prices have not been pushed up by actual disruptions to supply. Oil hit a peak even before news emerged that some foreign oil companies operating in Libya would stop some production and that the country's ports had temporarily closed. As we think, oil prices are driven both by current conditions and by future expectations.

Oil markets don't like surprises. The sudden ousting of Mr Mubarak and the unrest in Libya, Bahrain, Yemen, Iran and Algeria (which between them supply a tenth of the world's oil) have added 16% to oil
prices. But the big worry is that spreading unrest will culminate in another shock akin to the oil embargo of 1973, the Iranian revolution or Iraq's invasion of Kuwait. Oil is now more global than it was during those previous crises. In the 1970s production was concentrated around the Persian Gulf. Since then a gusher of non-OPEC oil has hit markets from fields in Latin America, West Africa and beyond. Russia overtook Saudi Arabia as the world's biggest crude supplier in 2009; OPEC's share of production has gone from around 54% in the mid- 1970s to just over 40% now.

If Libya's oil stopped flowing importers would look to Saudi Arabia to make up the shortfall. The oil could probably flow to fill the gap in Europe, Libya's main market, in a matter of weeks. That is ample to plug a Libyan gap but would hasten the day when growing world demand sucks up all spare production capacity and sends oil prices rocketing. Despite rising prices, Saudi Arabia has so far been reluctant to turn its stopcocks. OPEC claims that the world is amply supplied with oil and seems content with a price around $100 a barrel. Traders hope that Saudi Arabia will boost production stealthily or that OPEC will call a special meeting to raise quotas and calm markets.

The worst-case scenario for oil prices would be some kind of disruption to Saudi supply itself. That concern has become livelier given the unrest in neighboring Bahrain. The tiny island kingdom produces little oil but is of vital strategic importance in the Persian Gulf, a seaway that carries 18% of the world's oil. America's 5th Fleet, which polices the Gulf against troublemakers (i.e. Iran), uses the country as a base.

The Saudis may also fear that protests by Bahrain's Shia population could spill over their own borders. Saudi Arabia's eastern provinces are home to both its oil industry and most of its Shias, who may also have cause for grievance with their Sunni rulers. One crumb of comfort is that oil facilities across the region are generally located far from the population centers, where protests tend to be concentrated, and are well defended against anything but a concerted military assault.

The impact of a crisis would therefore depend on how much oil production was lost and for how long. Even seismic shocks in oil- producing countries might not cut off supplies for very long. Yet the example of Iran shows what can go wrong. The world could probably weather a short-lived crisis. But the damage if oil prices spiked and stayed high for a long time could be great for the recovering economies of the rich world. As for the prospects of reducing the importance of the Middle East to global oil supplies, forget it. Strong Asian demand is likely to mean that OPEC's share of oil production rises again as it pumps extra output eastward. A troubled region's capacity to cause trouble will not diminish.

India’s domestic Oil production is insufficient (at 0.8 million barrels per day), to meet with growing demand of oil in the country. India is hugely depends on the OPEC countries for his requirements. Instability in political scenario and some rise in crude oil prices will also affect National Stock Exchange and Bombay Stock Exchange. Equity market and commodity and exchange market, seems to get most affected from this.

Tips To Make Better Options Trades

Buying options by the traders is always being considered while keeping the focus on the premium paid rather than the potential returns. Whereas this is important information in terms of making a calculated trade, many options traders tend to lose sight of the probability of the market reaching and exceeding its position's strike. The average monthly range of the market number provides perspective on two important elements of an options trade: whether volatility is expanding or contracting and whether the market has a chance of reaching and exceeding the breakeven point of the position.

What Is The Probability?
It is commonly said that the majority of options expire worthless. If that is a true statement and you are trading a position that is long premium (i.e. buying a call or a put), you need the market to have a chance of reaching a price that will make your option position profitable. When considering an option position, it is important to consider if it is probable that the market will reach that point. Just because the premium paid is cheap or under priced does not make the trade a good one, especially if the market has little or no probability of reaching that goal.

Calculate the Average Monthly Range
To calculate the average monthly range, all you need is access to reliable historical prices. For any stock, you can get historical open, high, low and closing prices for a given date range. This will give you all the key numbers that will be used in the calculation - the high and the low for each trading day. To calculate this average for a given period of time, subtract the low from the high for each month to get that month's range. For the time frame, add up each month's range and divide by the number of months.

Select a Time Period
Generally, it pays to look at a time frame of twice the length of the option position you are considering, and then break this up into two separate blocks of time. For example, if the option you are considering has three months of time to expiration, look at the average monthly range of the last three months, the three months prior to that and the last six months.

Apply the Strategy
Generally, an Option Strategy involves the simultaneous purchase and/or sale of different option contracts, also known as an Option Combination. There are such a wide variety of option strategies that
use multiple legs as their structure, however, even a one legged (Long Call Option) can be viewed as an option strategy. That is, if a trader thought that Coca Cola's share price was going to increase over the next month a simple way to profit from this move while limiting his/her risk is to buy a call option. Of course, s/he could also sell a put option. If the market price of an option contract implies that it is 50% more expensive than the historical prices for the same characteristics, then you may decide against buying into this option and hence make a move to sell it instead.

Words of Caution
In certain markets and at certain times, by using the average monthly range to choose options strikes, we may find that the implied volatility has pushed the option premiums to unreasonable levels. This causes smaller traders to buy strikes that are too far out of the money, simply because they want to be in a given market and have limited capital. In these cases, the use of the average monthly range should be telling you to either avoid that market, or to use a strategy that can get you closer to the current market price, such as a debit spread (bull call spread or bear put spread).

The Debit Spread
In certain market conditions, the debit spread gives the investor a limited risk position and gets closer to the current market than buying an option outright. In exchange, the investor sacrifices unlimited gains for a limited, but defined, maximum gain. This is often a favorable tradeoff, and will keep the investor grounded in the reality of what the market is more likely to do. The advantage of
unlimited gains is normally only effective if the market were to make a rare historic move.

Option Trading Tactics:
Option trading is still one of the safest methods of trading although it considered risky by many. Although, there are credit ratings of different firms based on the liquidity of options. Being an underlying asset, buyer of the option gains the right, but not the obligation. In India, the biggest player in options trading is National Stock Exchange and Bombay Stock Exchange. Since options listed in NSE & BSE separately, it results in tough competition from each other. Exchange having more volume will have more liquidity. So keep these things in mind while trading in Options.

Turning Point Of Gold: Remain Bullish

January has been a tough month for gold. From its year-end 2010 price of $1,420 an ounce to its recent low just over $1,320, gold has lost some $100 - about seven percent.

On Wednesday, the World Gold Council published its annual Gold Investment Digest for the fourth quarter and full-year 2010 with some interesting insights.

According to the World Gold Council last year’s price performance was driven by developments in key gold markets:

• China saw increased investment activity, driven in part by innovative new gold investment vehicles offering improved access to the gold market.
• Jewelry consumption rebounded in India, the world’s largest gold market.
• Globally, investors remained concerned about uncertainty in the macro-economic environment and turned to gold to hedge against weakness in the US dollar and rising inflation in many economies.

We find the last point particularly interesting, as the USD Index finished the year slightly higher than was the case in 2009. However as we have observed, after 2006 things are much more complicated than simply USD up = gold down and vice-versa.

For the past two weeks we have experienced the risks that we might all face in 2011 and mentioned the problems caused by rising food prices and the social unrest they might unleash. We didn’t expect it to happen so soon.

After Tunisia’s revolution and the ouster of its president after 23 years of rule, Egypt seems to be next on the North African crisis list. One of the main grievances of the protesters in Egypt, just as it has been in Tunisia, has been the soaring price of food in the shops. The crisis and food shortages may spread to other Arab countries and no one knows where that can lead. We only know one thing—in times of crisis and uncertainty, people turn to gold for a safe haven.

The sentiment for the USD Index is short-term bullish which also has bullish implications for gold and silver. Recall that during the past few months, the USD has been leading the precious metals and here could very well ignite a turnaround for the metals.

In this daily short-term chart, we see that once again a cyclical turning point has come into play Summing up, gold appears bullish in the short-term; however the sentiment for the medium-term is mixed. Much depends on how the resistance levels hold the next short-term rally. If they hold and stop the uptrend, then it may very well be prudent to exit a portion of one's long-term positions.

Sluggish Revitalization Ups Risk For Obama By Mansukh

The economy is bouncing back two years into Obama's presidency. But the president is confronting unemployment of more than 9%, record home foreclosures and in all likelihood, the third straight federal budget shortfall of over $1 trillion. About 1.1 million nonfarm jobs were created last year, and economists are forecasting growth of 3.5% in the final three months of 2010. That said, many Americans remain out of work, even as markets have improved. There are 2.8 million fewer jobs now than in January 2009. With planning for his second White House run already underway and with Republicans gunning for his signature health-care plan and seeking aggressive federal spending cuts, Obama must convince voters he can deliver the scaled-back version of Washington they're demanding as well as targeted investments.

The latest Wall Street Journal/NBC News poll, taken Jan. 13-17, showed 53% approved of the job Obama is doing as president, up eight percentage points from December. The poll was conducted after Obama signed a package of tax-cut and jobless-benefits extensions he agreed on with congressional Republicans during the December lame-duck session of Congress. Obama has been road-testing the themes for his sophomore State of the Union in recent days, including in remarks last week at a General Electric Co. plant in New York that will soon be making advanced batteries. He used the occasion to name GE CEO Jeffrey Immelt to head a new White House council on jobs and competitiveness, and underscored how investment will help the U.S. stay competitive.
Obama's address comes as the government is operating on a short-term budget that expires March 4, and a fight over raising the U.S. debt ceiling looms. Treasury Secretary Timothy Geithner has warned Congress that the country could hit its $14.3 trillion debt limit by the end of March if Congress doesn't act, but Republicans are demanding spending cuts in return for their votes. Industries are also eager to hear from the president, who has pivoted in recent weeks to a decidedly more business-friendly posture.

The recently passed tax-cut deal between President Barack Obama and Congressional Republicans has removed some of the pressure on the Fed from being alone on the front line battling the economic crisis. The eighteen members of the Open Market Committee are widely expected at their two-day meeting that kicks off Tuesday to keep interest rates steady at record low levels and make no changes to the controversial $600 billion bond-buying program. The Fed has kept since December 2008, and is expected to keep, its key interest rate in a range of 0% to 0.25% as it seeks to bolster the economy.

The market responce to state of uniom speeches