market this week-thorough report by mukut k saha
India’s benchmark stock index erased gains, with the Bombay Stock Exchange Sensitive Index, or Sensex, trading little changed at 18,618.20 in Mumbai.
Tata Consultancy Services Ltd, India’s largest software services exporter, fell 2.3 per cent ahead of its quarterly report yesterday. Reliance Communications Ltd, the second-largest mobile-phone operator, fell 1.7 per cent.
Meanwhile, India’s ten-year bonds gained on speculation mounting threats to global economic growth will depress commodity prices, helping cool inflation.
A government report yesterday showed the wholesale price index rose 9.68 per cent in June from a year earlier, compared with 9.06 per cent in May, according to the median estimate in a Bloomberg survey. Oil prices fell 0.4 per cent to 97.67 per barrel, after Moody’s Investors Service put the US under review for a possible debt-rating downgrade yesterday. India imports almost 80 per cent of its crude.
“Concerns over growth globally may depress commodity prices,” said Rajeev Radhakrishnan, a Mumbai-based money manager at SBI Funds Management Pvt. “However, the central bank may keep its anti-inflationary bias in the near term so bonds may not gain much.”
The yield on the 7.8 per cent government bonds due April 2021 fell two basis points, or 0.02 percentage point, to 8.29 per cent.
Three bomb blasts killed at least 17 people in Mumbai on Wednesday, the biggest attack on India’s financial capital since a November 2008 terrorist rampage.
“The incident won’t influence bonds much,” Radhakrishnan said.
India’s rupee strengthened for a second day after Federal Reserve Chairman Ben S. Bernanke said the US central bank is prepared to buy more government bonds, fanning concern the supply of dollars will increase.
The Dollar Index, which tracks the greenback against those of six trading partners, declined 1.2 per cent on Wednesday after Moody’s Investors Service put the US debt rating on review for a possible downgrade for the first time since 1995.Sensex yo-yos, but defies attackIt was business as usual — almost — in Mumbai on Thursday, a day after a new terror attack in the financial centre. But the benchmark Sensex of the Bombay Stock Exchange (BSE) swung wildly, more due to economic factors than security fears that only mildly subdued sentiment in early
A look at major bomb blasts across the country over nearly 20 years show that barring three occasions the Sensex closed in the green on the trading day following the blast (see chart).
Asian markets, European trends and inflation data weighed in the minds of traders on a volatile day on which the 30-share indeed closed 22 points higher at 18,618 but the flat close hid the ups and downs of the day.
“Markets run on the fundamentals and not on an event in one town,” said a senior stock exchange official who asked not to be identified.
“The indomitable spirit of Mumbai, the financial capital of India, as always in the past, would once again respond with courage and renewed vigour to such challenges,” finance minister Pranab Mukherjee said.
The Sensex opened weak in line with Asian markets that fretted over Europe’s debt problems and lost up to 147 points or 0.8%. But the index surged 207 points after inflation data was on expected lines.
However, the benchmark sunk again as European markets opened weak and an uneasy mood on IT stocks ahead of Tata Consultancy Services’ quarterly results. The IT index at the BSE fell by 1.5% during the day.
“The attitude and the ability of people in Mumbai to catch up with their normal life almost immediately has a lot to do with this (stability),” said CJ George, CEO, Geojit BNP Paribas Financial Services.
Sensex ends flat after 207pts rally;
Market took a disappointing U-turn after gaining 207 points in mid-trade to close flat. The Nifty nicely held the 5600-mark in the second half of trade after a bearish trend in early part of the day. But the sell-off in TCS ahead of results & MET department comments on monsoon played a spoilsport and washed out all gains in the last half an hour of trade.
The 30-share BSE Sensex gained as much as 207 points to hit an intra-day high of 18,803.05, before closing with just 22.18 points gain at 18,618.2.
Experts too perplexed after a sudden fall in the late trade. Dilip Bhat, Joint MD of Prabhudas Lilladher feels that this correction is something like a volatile movement, which really happens in the market on a day to day basis.
European markets too added some pressure – France’s CAC, Germany’s DAX and Britain’s FTSE were down about a percent. “Europe continues to be in a state of flux,” Bhat said.
The 50-share NSE Nifty rose 14.35 points, to close at 5,599.80, as 30 stocks out of 50 closed in the green.
Met Department said monsoon level was 19% below normal in week to July 13. However, department did not change July forecast.
TCS was the leading dragger on Nifty ahead of its results today evening, with falling over 2%. Country’s largest software services exporter is expected to report 5.7% fall in the profit after tax of Rs 2,264 crore in the quarter ended June 2011. Infosys too fell over 1% and Wipro ended with 0.5% loss.
Bajaj Auto too slipped over a percent after a tad disappointment on the results front. India’s second largest two-wheeler maker reported first quarter FY12 profit after tax of Rs 711 crore, a growth of 20.5% while CNBC-TV18 expected at Rs 726 crore. Another two-wheeler maker Hero Honda fell 1.5%.
ONGC, NTPC and ITC were down 0.5-1%. Reliance Communications was down over 1.5%. BHEL too fell marginally.
However, rate sensitives looked quite supportive after inflation data, which was on the expected lines.
Overall inflation for June surged to 9.44% from 9.06% in May. Market had expected inflation in double digit when hike in diesel and cooking gas prices announced by government last month. Standard Chartered Bank sees inflation at above 9% till October.
Largest banks stocks SBI and ICICI Bank were up nearly 1.5%. Tata Motors, HDFC and L&T gained 1-2%. From the realty space, DLF surged 3%.
Cement stocks too were on buyers radar after dealers said institutional cement price in Gujarat has been hiked by Rs 20/50 kg, reports CNBC-TV18 quoting NW18. Ambuja Cements and ACC were up 2-3%.
Midcaps like SpiceJet, PTC India, Supreme Industries, Cholamandalam and IRB Infra gained 5-8% while SKS Microfinance tumbled 10% for second consecutive day. Gujarat State Petronet, Godfrey Phillip, Himadri Chemical and KGN Industries lost 3-5%.
Williamson Financial Services and Williamson Magor shot up 20% each.
Total traded turnover on exchanges was nearly Rs 1.67 lakh crore, including Rs 1.52 lakh crore from F&O segment.
Sensex pares losses; DLF, Maruti, Hindalco, ICICI up
“The trend deciding level for the day is 18,563/5,574 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,660-18,724/5,607-5,629 levels. However, if Nifty trades below 18,563/5,574 levels for the first half-an-hour of trade then it may correct up to 18,499-18,402/5,553-5,520 levels,” said Angel Broking note.
BSE Midcap Index was up 0.49 per cent and BSE Smallcap Index moved 0.29 per cent higher.
Amongst sectoral indices BSE Realty Index was up 1.39 per cent higher, BSE Bankex moved up 0.76 per cent and BSE Metal Index gained 0.46 per cent. BSE IT Index was down 0.95 per cent, BSE FMCG Index slipped 0.63 per cent and BSE Oil&gas Index declined 0.47 per cent.
DLF (1.96%), Maruti (1.56%), Hindalco (1.38%), Tata Motors (1.09%) and ICICI Bank (1.07%) were the major Sensex gainers.
Bajaj Auto (-2.42%), Infosys Technologies (-1.48%), Tata Power (-1.10%), ONGC (-1.06%) and ITC (-0.93%) were amongst the top Nifty losers.
Bajaj Auto reported standalone net profit of Rs 711.06 crore for the quarter ended June 2011 against Rs 590.15 crore in the same quarter a year ago. Net sales were at Rs 4586.91 crore for June 2011 quarter against Rs 3737.29 crore in the corresponding quarter a year ago.
Market breadth was positive on the BSE with 1420 gainers against 992 losers.
Reliance Industries, Balrampur Chini see short covering
Published on Thu, Jul 14, 2011 at 08:08 | Source : CNBC-TV18
Updated at Thu, Jul 14, 2011 at 10:11
Reliance Industries gained 2% and its open interest was down by 3%. Balrampur Chini ended up 4% and its open interest was down by 2%. Short covering was seen in the counter. Globally, sugar futures touched a record high yesterday.
Sintex was a big mover, with rising more than 6% while its open interest was down by 6%. The stock fell post its earnings but regained lost ground later.
From the real estate space, Unitech was down a percent with open interest up 6%. Fresh shorts were seen in the counter.
DCB shot up 6% and its open interest was up by 18%. Apollo Tyres rose 3.5% and its open interest was up by 8%. Fresh longs were seen after news that it has set up a West Asian operations hub in Dubai.
Idea closed up 3% and its open interest was up by 6%. Indiabulls Real Estate was up nearly 6% and its open interest was up by 3%.
Buy Hindalco; target of Rs 195: Greshma Research
Greshma Research is bullish on Hindalco and has recommended buy rating on the stock with a target of Rs 195 in its July 12, 2011 research report.
“Hindalco, we expect Novelis to post encouraging numbers going ahead on account of expansion, restructuring and debottlenecking activities undertaken by the company. The EBITDA/tonne of the company has stabilized at above $300 levels. We expect aluminium prices to be stable on the back of strong demand in sectors like aerospace. We are expecting aluminium prices to grow by 10% CAGR in next two years. Hindalco is among the lowest-cost aluminium smelters in the world with the over all capacity 500ktpa and company has successfully managed its cost with captive power, bauxite and coal blocks that company owned. Its 1.5m tpa Utkal alumina project in Orissa is likely to be commissioned by 2012.”
“We assume the delay in Mahan coal block allocation is likely to increase input cost for the Mahan Smelter which is likely to be finished by FY12. The 359,000 ton Mahan smelter is likely to be commissioned in end-CY11. We are expecting overall capacity to rise by 1.2 mton by 2014 with the new capacity coming in Orissa. We are expecting overall capacity to rise by 1.2 mton by 2014 with the new capacity coming in Orrisa. We value the company at 5.7 times one year forward EV/EBITDA and recommend BUY on the stock with a price target of Rs 195 for a 1-year investment horizon,” says Greshma Research report.
FIIs holding more than 30% in Indian cos
Buy TCS, Infosys on decline: Kimeng Sec India
Buy TCS and Infosys on decline, says Jigar Shah, Sr. VP & HOR, Kimeng Sec India.
Shah told CNBC-TV18, “Infosys, numbers were not so much different from what company had conveyed and from a demand point of view it continues to be quite robust and that’s what we learn when we speak to lot of the other software companies. However today I think the investor is more circumspect on the global economy and probably that is mainly the reason because if you are getting most of your business from US and Europe which are not too sure in terms of where their economy is heading, probably I think that is causing a lot of concern and that’s leading to these stocks giving away the gains.”
He further added, “TCS, which is relatively better placed for growth in the near term there is a doubt even before the numbers have come out. So clearly people are not very enthusiastic about TCS reporting great numbers or giving a very great kind of commentary about going forward what will be the growth. So this is all resulting into some temporary sentiment drop which I believe is a good opportunity because as we see technology growth is quite good and companies like TCS, Infosys and HCL Technologies are well placed and I think any weakness in these stocks is a good opportunity to buy.”
Accumulate Bajaj FinServ; tgt of Rs 582: Greshma Research
Greshma Research is bullish on Bajaj FinServ and has recommended accumulate rating on the stock with a target of Rs 582 in its July 14, 2011 research report.
“Bajaj Finserv posted strong numbers for Q1 FY12 in line with the strong annual results in FY2011, with all its subsidiaries showing strong growth. Bajaj Finance posted a PAT of Rs91 crs for Q1 FY12 as compared to Rs47 crs for Q1 FY11, which is a growth of 94%. The Life Insurance business showed a growth of 169% as it posted profits of Rs278 crs in Q1FY12 as compared to Rs169 crs in Q1FY11. The General Insurance segment also picked up from sluggish performance in the past and posted a profit of Rs39 crs in Q1 FY12 as compared to Rs31 crs in Q1FY11, which is a growth of 26%. The AUM (Assets Under Management) stood at Rs9025 crs for Q1FY12 as compared to Rs7571 crs in Q1FY11, which is growth of 19%. Bajaj Allianz General Insurance Company Limited (BAGIC) posted Gross written premium of Rs798 crs in Q1FY12 as compared to Rs718 crs in Q1FY11, which is a growth of 11%.”
“Bajaj Finserv numbers were slightly higher than our estimates on account of better than expected results of Bajaj Finance. The life Insurance business has taken a hit due to regulatory changes last year and new Business premium was down at Rs378 crs, which was below our estimate of Rs412 crs. However Bajaj General Insurance Business has delivered strong performance with Net earned premium improved by Rs527 crs vs Rs454 crs last year. We are valuating the company on SOTP evaluation of its Life insurance, General Insurance, Bajaj Finance (55.1% stake), Investments (50% discount) and arrive at a price target Rs 582. We are expecting better performance from the life Insurance business going forward. We maintain our Buy recommendation on the company and advice investors to accumulate the stock at current levels,” says Greshma Research report.
Market stands firm like Mumbai
14 Jul 19:36 pm
This is not the first time markets have ignored terrorist attacks. Since 1993, of the 14 major terrorist strikes, only twice markets have fallen by over 2 percent on the day just after the attack.14 JUL, 2011, 04.34PM IST,ET NOW
Buy Ranbaxy on every dip: Sudarshan Sukhani, Technical Trends
- Bharti Airtel may reach 440 in this bull run: Sudarshan Sukhani
- Buy Biocon & Ranbaxy on dips: Sudarshan Sukhani
- Avoid sugar stocks at this point of time: Sudarshan Sukhani
- Buy Suzlon on dips, Avoid PFC : Sudarshan Sukhani
- Buy Sun Pharma on dips among pharma stocks: Sudarshan Sukhani
Sharekhan handpicks 15 stocks for investment
Published on Fri, Jul 08, 2011 at 17:10 | Source : Moneycontrol.co
Sharekhan has come out with its report on Stock Ideas.
ADITYA BIRLA NUVO : the company is best valued using the sum-of-the-parts (SOTP) method. In the wake of the better than expected margin and efficiency of the insurance business, we have raised our new business achieved premium (NBAP) margin multiple for the insurance segment from erstwhile 16% to 18% for FY2012 with an assumption of a 15% growth in the new business premium (on the back of a 29% decline reported by the company in FY2011). Further, with the company for the first time reporting net worth for the consumer finance business, we incorporate the same at 1x its book value. Thus, the revised SOTP-based price target works out to Rs960 and we continue with our Hold recommendation on the stock.
BAJAJ FINSERV : The company’s profit was lower in FY2011 due to the sharp increase in the motor pool losses. The company is among the top performers in the general insurance space with a combined ratio of about 98% excluding motor pool and has shown profits despite an adverse environment. In a steady state the company expects to generate return on equity (RoE) of 15% from the general insurance business. Of late Bajaj Finance Ltd (BFL), the financing subsidiary of Bajaj FinServ, has started focusing on infrastructure lending and construction equipment lending. The company is looking for deals worth Rs50-100 crore in power, port and road projects. It plans to build a book of around Rs3,000-4,000 crore in three to four years. We maintain our Buy recommendation on the stock with a price target of Rs634.
BAJAJ HOLDINGS & INVESTMENT : For Q4FY2011, Bajaj Auto and Bajaj FinServ reported a strong performance. However, for Bajaj Auto we have reduced our price target due to the macro headwinds likely to hit going forward. We value BHIL based on our price target for Bajaj Auto and on the base case scenario for Bajaj FinServ and the other group companies on cost; we give a holding company discount of 50% for the same. Furthermore, the company has cash and liquid investments worth Rs5,442 crore on its balance sheet. However, we value these investments giving it a 40% discount on account of its volatile nature. Consequently, we arrive at a fair value of Rs1,009 for the stock (based on the company’s fully diluted equity), which is significantly above its current market price of Rs764. Moreover, the company has given a healthy dividend of Rs35 per share which translates into a dividend yield of 4.6%, making the stock attractive at this price. We, therefore, maintain our Buy recommendation on the stock with a revised price target of Rs1,009.
BHARAT HEAVY ELECTRICALS : We are also cutting down BHEL’s target multiple to 10% premium to Crompton Greaves target (16x) multiple from earlier 20% premium in view of hangover of likely FPO, margin pressure and slowdown in its growth momentum. Accordingly, our revised fair value works out to Rs2,596 (17.6x FY2013E earnings). At the current market price, the stock trades at 13.1x FY2012E earnings, which is quite attractive and at a significant discount to its average historic multiple of 20-21x. Hence, we maintain our Buy recommendation on the stock.
CADILA HEALTHCARE : Cadila through its US subsidiary has entered into a material definitive agreement to acquire the assets and the product pipeline of US based Nesher Pharma, a subsidiary of KV Pharma. Cadila will pay $60mn in cash for the divested assets, however the timeline for product launches is yet unknown. The transaction At the CMP of Rs904, Cadila is trading at 21.1x its FY2012E and 17.3x its FY2013E earnings. We maintain Buy with a price target of Rs1045.
GAYATRI PROJECTS : Currently, the stock is trading at 6.5x and 4.4x its FY2012E and FY2013E diluted earnings respectively, making the valuations attractive. Hence we maintain our Buy recommendation with a price target of Rs405.
GENUS POWER INFRASTRUCTURES : At the current market price, the valuation remains attractive at 3.4x FY2013E earning per share (EPS) while it discounts its FY2011 book value by 0.6x. Hence we maintain our Buy recommendation on the stock with a revised price target of Rs23 (5.5x FY2013E EPS).
GRASIM INDUSTRIES : On the valuation front, we continue to value the stock using the SOTP valuation methodology and maintain our price target of Rs2,750 with the Buy recommendation. At the CMP the stock trades at a PE of 7.8x discounting its FY2013 estimated EPS.
INFOSYS TECHNOLOGIES : The recent organisational restructuring and management realignment at Infosys is likely to get reflected in the weak Q1FY2012 financial performance. Nevertheless, we believe the 13% correction in the stock price since the company’s Q4FY2011 results announcement and the current discount of 10.4% to TCS large factor in the near-term headwinds. At the current market price of Rs2,861, the stock trades at 20.3x and 16.7x FY2012E and FY2013E earnings respectively. We remain structurally positive on Infosys’ long-term sustainable and robust business model and recommend investors to Buy the stock with a 12- month price target of Rs3,485.
ITC : We have incorporated the balance sheet numbers for FY2011 and there are no major changes in our earnings estimates for FY2012 and FY2013. At the current market price the stock trades at 24.4x its FY2012E EPS of Rs7.9 and 20.6x its FY2013E EPS of Rs9.3. We maintain our Buy recommendation on the stock with a price target of Rs223.
LARSEN & TOUBRO : The current valuation at 17.4x FY2013 estimate largely factors in all the concerns as the same is still much lower than its five-years average one-year forward multiple of 23x. Hence, we maintain our Buy rating on the stock with a price target of Rs2,011.
MARUTI SUZUKI INDIA : We have downgraded our earning per share (EPS) estimates for Maruti for FY2012 and FY2013 on account of lower than expected volume growth. Our volume growth assumption now stands at 8% and 13% for FY2012 and FY2013. Consequently our EPS for FY2012 and FY2013 has been revised downwards to Rs85 and Rs98.3 respectively. We maintain our Hold recommendation with a revised target price of Rs1,277.
MAX INDIA : The company expects a flattish growth in its life insurance business in FY2012 despite a sluggish growth in the insurance premiums. During FY2011, its life insurance business registered a growth of 9% year on year (YoY) against a 20% year-on-year (Y-o-Y) decline for the other private players. The expense ratio for the life insurance business dropped to 34% in FY2011 (29% in Q4FY2011) from 40% in FY2010 due to increased distribution through the bankassurance mode and rationalisation of branches and agency force. We maintain our Buy recommendation on the stock with our SOTP-based price target of Rs234.
PATELS AIRTEMP INDIA : In line with the revised estimates, we have revised our price target for the company to Rs103 (5x FY2013 earnings per share [EPS]). At the current market price the stock is available at 4x FY2012E earnings. Given its healthy dividend yield of 2.7% and robust return on net worth of 23.7% (for FY2011), the stock’s valuations appear to be quite attractive. We maintain our Buy recommendation on the stock.
SELAN EXPLORATION TECHNOLOGY : We have cut FY2012 estimates marginally to account for the lower than expected production volumes in Q4FY2011. However, with aggressive drilling programme, we expect Selan’s net revenues and earnings to grow at CAGR of 40% and 42% respectively over FY2011-13, largely driven by volume growth. Currently, the stock is available at 14.4x FY2012 and 8.7x FY2013 earnings estimates. We maintain our Buy rating and price target of Rs500.
TATA CONSULTANCY SERVICES : We remain positive on TCS on a longer-term perspective. However, in the medium term, looking at the uncertainties in the key geographical regions and the increasing probability of further negative news flow, we maintain our Hold recommendation on the stock with a 12-month price target of Rs1,315. At current market price of Rs1070, the stock trades at 20.4x and 17.1x its FY2012E and FY2013E earnings respectively.
TORRENT PHARMACEUTICALS : At the CMP of Rs609, Torrent is trading at 16.4x its FY2012E earnings and 13.7x its FY2013E earnings. We roll over our multiple to FY2013 and value the company at 14x PE. This gives us a price target of Rs640, an upside of 5%. Citing the limited upside from the current levels, we downgrade our rating to Hold.
UNITY INFRAPROJECTS : We expect the earnings to grow conservatively at a CAGR of 18% over the next two years, which is much lower than the management’s guidance. Currently the stock trades at a P/E of 4.9x FY2012e earnings, which is very attractive. Hence, we maintain our Buy recommendation with a price target of Rs112.
Institutional holding more than 40% in Indian cos
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US debt concern spurs gold rise The outlook for second-quarter US corporate profits improved ReutersPublished: 00:00 July 15, 2011 Share New York: Gold prices hit another record high and the US dollar slipped yesterday in the wake of Moody's warning that the US government may lose its top credit rating. But the outlook for second-quarter US corporate profits improved after JPMorgan Chase's results lifted US stocks, while comments from Federal Reserve chairman Bernanke on Wednesday suggesting further monetary policy stimulus was possible remained supportive. Benchmarks The Dow Jones industrial average was up 49.34 points, or 0.39 per cent, at 12,540.95. The Standard and Poor's 500 Index was up 5.14 points, or 0.39 per cent, at 1,322.86. The Nasdaq Composite Index was up 6.57 points, or 0.23 per cent, at 2,803.49. World stocks were up 0.1 per cent while Japan's Nikkei ended down 0.3 per cent. Still, the US debt-ceiling debate looms large. The US dollar fell against a basket of currencies. The dollar index was last down 0.5 per cent. Both the euro and dollar hit record lows against the Swiss currency as investor demand for the traditional safe haven remained elevated.Gold futures hits record of Rs 23,465 on global cues Gold futures prices hit a new record high of Rs23,465 per 10 grams on Thursday, buoyed by a firming trend in global markets. Also, firm spot markets demand supported the uptrend in gold futures prices in New Delhi. At the Multi Commodity Exchange, gold for delivery in October climbed Rs 269, or nearly 1.1%, to Rs 23,465 per 10 grams, with a business turnover of 10 lots. Similarly, the metal for delivery in August gained Rs 15, or 0.075%, to Rs 22,935 per 10 grams, with an open interest of two lots. Analysts attributed the rise in gold futures prices to a firming trend overseas, where the metal climbed to a record high as concerns about Europe's debt crisis spurred demand for the metal as an alternative investment. "Global factors have driven rally in gold prices which may continue for some more sessions in futures trade here", Rakesh Anand, a market analyst, said. In the national capital, gold prices had shot up by Rs 240 to Rs 23,050 per 10 grams in Wednesday's trade. Meanwhile, gold rose by 0.50% to an all-time high of $1,589.80 an ounce in Asian region.Growing disquiet sparks rise in 2012 gold forecasts Waning confidence in the strength of global economic recovery and persistent concerns over euro zone debt levels since January have prompted some leading analysts to lift their 2012 gold price forecasts, a Reuters poll showed on Thursday. A poll of 15 analysts conducted by Reuters in the past two weeks has returned a median forecast that gold prices will average USD 1,550 an ounce in 2012. This is about 7% higher than the consensus forecast in January at USD 1,454. While hopes were high in January that the US economy would stabilise and the euro zone debt crisis comes under control, those expectations have faded. Spot gold hit a record high on Thursday of USD 1,594.16 an ounce after Federal Reserve chief Ben Bernanke said the Fed was ready to ease monetary policy further if economic growth slows and Moody's warned the United States might lose its top-notch credit rating. "The US has a whole lot of issues in the economy. Managing debt is one of them, and what that will entail is a whole lot of measures that are really supportive for gold," said Bank of America Merrill Lynch analyst Michael Widmer. "What the government would want to see is probably a higher inflation rate than before, and it would also help them if they had a weaker dollar and lower nominal interest rates. So you have got three factors that are supportive for the gold market." Concern over euro zone debt levels has also flared up, with yields on peripheral debt rising sharply since January. The weak outlook for the euro is fuelling diversification into gold in Europe. The poll showed that prices are expected to average USD $1,498 an ounce this year, against this year's current average price USD 1,454 an ounce, pointing to more upside for prices from here. In the third quarter the metal is expected to average USD 1,538 an ounce, rising to USD 1,593 in the final three months of the year. There are also some potential risks that could push prices lower. With quantitative easing expectations now at least partially priced in, any sign the United States is avoiding this route could prove negative for gold. A quick resolution to the political stand-off over raising the debt ceiling could also weigh. But there are enough longer-term supportive factors for gold to keep analysts optimistic.
"Gold is taking support from fear, the weaker dollar, rumours, the geopolitical situation. So many things are speaking for gold," said Commerzbank analyst Eugen Weinberg, whose bank sees gold prices at USD 1,600 an ounce next year. "We are not saying gold will go up and away. But at the moment, there are not many alternatives."Monsoon rains 19% below normal in past week India's key monsoon rains were 19% below normal in the week to July 13, improving from a quarter below average rains in the previous week, the weather office said on Thursday. The rains had been expected to slow in the first two weeks of July, the key month for planting, but are still forecast to be only slightly below normal for the entire June to September season. Last year, rainfall was 24% below normal in the week to July 14 after a weak start in June, but rains picked up in the remaining period of the four-month monsoon and ended as normal. India's June to September monsoon rains are crucial to crop production in 60% of the country that does not have adequate irrigation.Pranab expresses concern as inflation rises to 9.44% India's annual inflation rose to 9.44% in June from 9.06% in the previous month, prompting finance minister Pranab Mukherjee to say that it "continues to be a matter of concern" and that the government and the Reserve Bank would take appropriate measures to bring it down to a comfortable level. "Government is working together with the RBI (Reserve Bank of India) to take appropriate steps to reduce inflation to more comfortable level," Mukherjee said while reacting to the monthly inflation data released on Thursday. According to figures released by the ministry of commerce and industry, the headline inflation based on wholesale price index rose to 9.44% in June from 9.06% in the previous month. "Inflation figures reported for the month of June continue to be matter of concern. We are monitoring the price situation closely," the finance minister said in a statement. Mukherjee said inflation rose in June mainly because of increase in administered fuel prices, seasonal effects, an upward movement in mineral and manufactured prices and in part reflecting imported inflation. Rise in inflation may prompt the RBI to hike policy rates further. In its latest mid-quarter review of the monetary policy in June, the RBI had hiked the key policy rates by 25 basis points. This was the 10th increase in rates in 15 months. Meanwhile, after two weeks of moderation, food inflation rose to 8.31% for the week ended July 2 as against 7.61% in the previous week due to a sharp jump in the prices of onions, fruits and milk.Fuel impact: inflation inches up to 9.44% in June HT Correspondent, Hindustan Times New Delhi, July 14, 2011 Email to Author First Published: 12:45 IST(14/7/2011) Last Updated: 22:34 IST(14/7/2011) share more... 0 Comments email print
India’s inflation rate in June accelerated to 9.44%, driven by high fuel and manufactured products’ prices as experts warned that prices will again surge in the coming weeks, when the knock-on effects of the recent hike in diesel prices cascade through the economy. Inflation was 9.06% in May. More worryingly, the April inflation rate was revised significantly higher to 9.7% from 8.7% reported previously. Finance minister Pranab Mukherjee expressed concern. at the development. “Inflation figures for June continue to be a matter of concern,” he said. “The government is working together with RBI to take appropriate steps to reduce inflation to more comfortable levels.” The central bank, which will present quarterly monetary policy review on July 26, has raised the repo rate, the rate at which banks borrow from RBI, 10 times in the past 16 months in an attempt to cool prices. A higher repo raises banks’ borrowing costs, which in turn would raise interest rate on final home, auto and corporate loans “The latest inflation data offers no cheer... the central bank will have little choice but to hike the repo rate on July 26,” said Rajeev Malik, senior economist at broking and research firm CLSA. The government had late last month raised diesel, kerosene prices and cooking gas prices.Revenues likely to grow by nearly 50% in FY12: CinemaxSunil Punjabi, chief executive officer of Cinemax India in an interview with CNBC-TV18 said that he expects Q3FY12 to be the best quarter on the back of some big movies slated for release at that time. He further said that movie releases in the last two months have boosted their utilisations. The company is hopeful of boosting its revenues by nearly 50% in FY12 on the back of better content. Also Read: Cinemax aims 30-35% sales jump in FY12 Below is the verbatim transcript of his interview with Latha Venkatesh and Gautam Broker of CNBC-TV18. Also watch the accompanying video. Q: Last week you all launched four screen multiplex in Pune, can you give us an idea of how the footfalls have been in that new place as well as in your other cinema halls. There have been a spat of even if small budget but perhaps some strong positive releases? A: In the last couple of months we have seen fairly large bunch of releases happening more in terms of the English franchise 3D films that helped us gain fairly large segment of momentum on the cinema viewing.Cinema viewing is more like a habit so you land up see film the audience per se is snowball into seeing a lot of more cinemas. What we have seen in the last couple of months is more and more success coming rather than misses. In fact this quarter also when we started off Delhi Belly has done phenomenally much better than what we were expecting to do. Coming ahead is a long slew of films, the Q2 also looks fairly aggressive in terms of kind of releases and also couple of large budget films also coming up. Q3 probably will be the best in terms of the releases which has two Shah Rukh Khan release coming in a spread of five-eight weeks so the flow of content looks well. We are now at 118 screens with the four screen multiplex that we added over the weekend at Pune in Inorbit Mall. The multiplex per se has done fairly well. The weekend saw very large number of footfalls, we almost had 80% utilisation over the weekend and also the weekdays have picked up well. So fairly good addition to the way we have seen and the location is doing phenomenally well because of the mall. Q: The average utilisation we believe is about 30-32%. Do you think we are going to see an improvement given the optimistic tone you are talking? A: Currently the Q1 is looking more towards in that range and Q2 also and the kind of flow of content that we have we should have a fairly healthy number and so for Q3. It will be optimistic to look at some better utilisations for the next two quarters. Q: How time does it normally take for you all to break even in a screen or in a multiplex. What do you expect to end this year with in terms of number of screens? A: In terms of multiplexes we have three multiplexes which is almost ready and waiting for permission to go through. It is the six screener that we are ready in Hyderabad, there is a three screener in Malad and three screener in Surat. These are multiplexes which are ready just waiting government approvals and local level approval that we need to go through. So that is an immediate pipeline. There are another three locations that we are looking also to open one in Bangalore- second location in Pune and one in Chennai. So that is the pipeline which we can see immediately and hopefully operational this year itself. So we will probably hopefully end the year at the 145 odd screens range that is the broad range that we are targeting to end the year with in terms of the number of screens. From a break-even perspective we usually look at three- five years of cash break-even scenario for multiplexes. So it changes depending on which location within a city itself break-even fairly changed depending upon ticket prices, that is the average. Q: What do you expect to do this year – I know it is difficult you have none of your Diwali releases or any idea of how things will pan out but what are you penciling in by way of revenue rise and margins? A: Revenue rises we were this year vis-à-vis last year we were hopefully looking at this year to be almost 50% jump, 40-50% that is the broad range that we looked at in terms of top-line. We are trying to maintain the 18-20% EBITDA margmin so those are the factors that we are looking at controlling this 50% rise largely is a sum of two parts. One is the base effect of the fact that the existing location, the content to be better. The content being better we are assuming the throughput to be better and the fact that we also added almost 30 screens odd that we will add during the year that is where we see the base effect to be much larger. We are expecting anywhere 40 to 50% growth in terms of top-line. Q: Given your expansion plans what kind of a leverage position would you end the year with? A: We will be at around 0.7 right now on debt equity ratio. We think that we are fairly well leveraged. We still have enough space to raise further debt so we are fairly okay in that terms.