Wednesday, August 30, 2006

Pick up in FII puchases

Huge inflow of Rs 368.90 crore on 29 August.Foreign institutional investors (FIIs) were buyers for the fourth day in a row on Tuesday (29 August 2006). They bought shares worth a net Rs 368.90 crore compared to Monday’s (28 August) purchases of Rs 43.40 crore.

FIIs made gross purchases worth Rs 1,485.60 crore and gross sales worth Rs 1,116.70 crore on 29 August 2006. The 30-share BSE Sensex surged 87.33 points (0.75%), to settle at 11,706.85 on 29 August 2006.

FII inflows for August 2006, till 29 August, stood at Rs 4,306.20 crore compared to Rs 4,793.10 during the same period last year.

For the calendar year 2006, the total FII inflows aggregate Rs 17,052.50 crore, a decline of 47.68% compared to Rs 32,596.20 crore during the same period last year.

Stock Alert

Gujarat Gas may fall as it warns of Rs 6 crore hit in Q3 profits
Gas transporter Gujarat Gas Company said its pretax earnings for July-September 2006 quarter would be hit by Rs 6 crore after floods in Gujarat affected gas supplies and prices. "Lower offtake of gas by some of the customers and alternative sourcing of gas supplies at higher rates is expected to impact the company," Gujarat Gas said in a statement on Wednesday. The company, which is an arm of Britain's BG Group, said the impact was limited only to the present quarter. Gujarat Gas runs a city gas distribution network in the city of Surat and its operations were hit after flood waters entered its facilities in the region.

Packaging firm Essel Propack said on Wednesday it signed an agreement to buy out Packaging India, a unit of personal care and cosmetic products maker CavinKare Pvt. Ltd.

Sun Pharmaceutical Industries has received final approval from the US Food and Drug Administration to market gabapentin capsules and tablets. Gabapentin is a generic version of Pfizer Inc.'s epilepsy drug Neurontin.

Tractor and motorcycle maker Escorts said on Wednesday its board had approved the divestment of its entire shareholding in Carraro India to its joint venture partner Carraro S.p.A. of Italy for 20 million euros. Escorts decided to sell off the stake because the company wants to focus on three core areas - tractors, construction equipment and auto components.

NCL Industries said on Wednesday its board had approved the issue of one s0hare for every six held in NCL Energy for the merger of the two companies. NCL Energy is engaged in generation of hydel power, having two projects of 7.5 MW and 8.25 MW in Andhra Pradesh and Karnataka respectively, generating power for the last few years.

State-run Andhra Bank said on Wednesday its board approved forming a joint venture with Japan's Dai Ichi Mutual Life Insurance and Bank of India to enter the life insurance business.

How will the market be today??

Volatility may prevail ahead of derivatives expiry
Steady to firm Asian markets and figures showing a surge in FII inflow in the past two trading sessions may trigger firm opening on the domestic bourses today. Oil price rose slightly but it remains sharply lower that a record high of $78.40 a barrel hit last month.

Volatility may be high today due to alternate bouts of short covering and bull unwinding in the derivatives segment ahead of expiry of August 2006 derivatives contracts. August derivatives contrasts expire today. The rollover from August to September contracts has been about 55% so far.

Asian stocks edged higher on Thursday (31 August) after the US government on Wednesday reported that gross domestic product grew at a pace that was slightly faster than first reported, in the second quarter. Key benchmark indices in Hong Kong, Japan, South Korea and Singapore were up by between 0.42% to 1.6%.

The Nasdaq rose and the blue-chip Dow edged up on Wednesday after a government report showed economic growth, while slowing, remains fairly strong. But comments late in the session from Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, took some of the shine off the market's advance. The Dow Jones industrial average advanced 12.97 points, or 0.11% to end at 11,382.91. The Standard & Poor's 500 Index was down a mere 0.01 of a point, or unchanged on a percentage basis, to finish at 1,304.27. The Nasdaq Composite Index rose 13.43 points, or 0.62% to close at 2,185.73.

NYMEX crude for October delivery rose 34 cents to $70.37 a barrel in Asian trading on Thursday despite an unexpected build in US crude and gasoline inventories, as Iran appeared set to defy a UN deadline to halt nuclear fuel work -- exposing the world's fourth largest oil exporter to possible sanctions.

As per provisional data, FIIs bought shares worth a net Rs 287 crore on Wednesday (30 August), the day when Sensex rose 17 points. The net FII inflow on Tuesday (29 August) was Rs 369 crore. Sensex had risen 87 points on that day.

Mutual funds bought shares worth a net Rs 73 crore on 29 August. Mutual funds are sitting on good amount of cash and they may step up purchases at declines.

Nifty 50 Quotes at End Of Day

Company Prev Close LTP %Change
NSE Sensex 3425.7 3430.35 0.14
ABB 2826.95 2803.95 -0.81
ACC 912.35 922.25 1.09
BAJAJAUTO 2720.4 2689.6 -1.13
BHARTIARTL 415.25 413.8 -0.35
BHEL 2283.3 2283.6 0.01
BPCL 352.65 373.75 5.98
CIPLA 248.3 248.35 0.02
DABUR 138.2 138.3 0.07
DRREDDY 713.4 719.3 0.83
GAIL 271.55 270.6 -0.35
GLAXO 1202.05 1203.85 0.15
GRASIM 2225.8 2264.75 1.75
GUJAMBCEM 114.75 114.75 0
HCLTECH 580.6 578.85 -0.3
HDFC 1290.7 1300.7 0.77
HDFCBANK 845.45 840 -0.64
HEROHONDA 719.3 720.4 0.15
HINDALC0 175.4 173.4 -1.14
HINDLEVER 234.9 236.5 0.68
HINDPETRO 270.75 282.9 4.49
ICICIBANK 595.3 593.9 -0.24
INFOSYSTCH 1805.8 1801.2 -0.25
IPCL 294.2 293.7 -0.17
ITC 184.65 187.35 1.46
JETAIRWAYS 560.25 556.6 -0.65
LT 2433.95 2430.5 -0.14
M&M 656.85 657.35 0.08
MARUTI 855.2 862.3 0.83
MTNL 158.5 161.3 1.77
NATIONALUM 208.75 204.75 -1.92
ONGC 1221.6 1221.45 -0.01
ORIENTBANK 195.5 198.05 1.3
PNB 463.2 471.75 1.85
RANBAXY 395.5 405.3 2.48
REL 448.7 439.5 -2.05
RELIANCE 1118.85 1128.8 0.89
SAIL 77.2 74.7 -3.24
SATYAMCOMP 818.7 819.45 0.09
SBIN 922.05 930.75 0.94
SIEMENS 1052.8 1049.85 -0.28
SUNPHARMA 906.7 905.8 -0.1
SUZLON 1236.05 1235.6 -0.04
TATAMOTORS 845.4 854.25 1.05
TATAPOWER 538.8 526.3 -2.32
TATASTEEL 517.25 506.85 -2.01
TATATEA 829.2 821.45 -0.93
TCS 990.1 983.8 -0.64
VSNL 415.95 421.6 1.36
WIPRO 525.6 526.35 0.14
ZEETELE 287.75 289.6 0.64

Markets Today

Sensex ends nearly flat
The benchmark index ended positive after witnessing high volatility throughout the day. Index heavyweights RIL, SBI, ITC and Ranbaxy propelled the barometer index above the 11,750 mark in late afternoon trade.With today’s 17-point surge, the Sensex has advanced 317 points (2.78%) in the last five sessions, from 11,406.65 on 23 August 2006. RIL has led the rally from the forefront.

The BSE 30-shares Sensex ended 17.07 points (0.15%) higher, on 11,723.92. After opening firm at 11,735.05, the Sensex showed signs of nervousness and started declining. The slide continued till the Sensex hit a low of 11,643.38.The barometer index had surged to a fresh high of 11,756.08, in late afternoon trade as buying intensified.It oscillated 113 points, with a high degree of volatility, which is expected to remain high till Thursday, ahead of the expiry of Futures & Options contracts for August.The S&P CNX Nifty rose 4.65 points (0.14%), to 3,430.35.

The market-breadth, strong in early trade, turned negative as selling pressure ate into small-cap and mid-cap stocks. However, it has also recovered along with the broader market. For 1,064 shares that advanced on BSE, 1,461 declined. As many as 72 shares were unchanged.The BSE Mid-Cap index was down 0.09% while the BSE Small-Cap index lost 0.35%.The total turnover on BSE amounted to Rs 2,607 crore. It was lower than that of Tuesday’s Rs 2,715 crore.Among the 30-Sensex pack, 17 declined while 13 advanced.

Ranbaxy Laboratories jumped 2.40% to Rs 405 on a volume of 4.30 lakh shares after the company got a favourable ruling from a Norwegian court involving two patents on Atorvastatin. Atorvastatin is a cholesterol-lowering drug marketed by Pfizer as Lipitor. A Norwegian court ruled in its favour, and against Pfizer Inc., in a case involving two patents of a cholesterol-lowering drug. An Oslo city court found that Ranbaxy's Atorvastatin did not infringe upon Pfizer's Norwegian patents, the Indian pharma major said in a statement.

Index heavyweight Reliance Industries (RIL) rose 1.11%, to Rs 1,129.15 on a volume of 12.06 lakh shares. It surged to a high of Rs 1134.95, while the low for the day was Rs 1,107.

ITC (up 1.85% to Rs 188), Grasim (up 1.62% to Rs 2,260) and SBI (up 1.20% to Rs 932.15) were the other gainers.

REL (down 2.40% to Rs 437.45), Bajaj Auto (down 1.20% to Rs 2685) and NTPC (down 1.92% to Rs 125) were prime losers.

Reliance Communications lost 1%, to Rs 306 on a volume of 9.26 lakh shares. The company has deployed a next generation IP based ILD network, which will have a capacity to carry 12 billion minutes of voice traffic annually.

RIL was the top-traded counter on BSE with a total turnover of Rs 135.74 crore followed by Tata Steel (Rs 76.67 crore) and Tech Mahindra (Rs 64.61 crore).

Two block deals, of 8.17 lakh shares and 2.46 lakh shares, were executed in the Eveready Industries counter at Rs 99.50 and Rs 100 per share respectively by 12:30 hours. The stock ended 4.90% lower, at Rs 98.10, on a cumulative volume of 15.06 lakh shares.

Metal stocks came under pressure today following reports that steel prices may be cut by Rs 750 to Rs 1,000 per tonne, from 1 September 2006, in line with global metal prices. Also, PSU steel maker SAIL will decide the quantum of price cut Thursday. This soured the sentiment in metal stocks.

The BSE Metal index lost the most from among sectoral indices, plummetting 184.92 points (2.20%), to 8,221.80. Tata Steel (down 2.20% to Rs 515.65), SAIL (down 2.80% to Rs 75.10), Essar Steel (down 3.43% to Rs 36.60), Tata Sponge (down 1.93% to Rs 111.50), Hindustan Zinc (down 4.23% to Rs 577.20), Sterlite Industries (down 3.60% to Rs 421) and Hindalco (down 1.37% to Rs 173.10) were the major losers.

Refinery shares edged higher on renewed buying as crude oil price fell below $70 a barrel, its lowest in more than two-months. A fall in crude oil price, the government’s decision to issue oil bonds and value-buying has aided refinery shares in the past few days.

HPCL (up 4.30%, to Rs 283), BPCL (up 5.86% to Rs 373.25), Indian Oil Corporation (IOC) (up 1.66% to Rs 493.50), IBP (up 1.10% to Rs 486.50), Chennai Petroleum (up 1.4% to Rs 201) and Kochi Refineries (up 6.05% to Rs 163) advanced.

Among side-counters, Jay Bharat Maruti jumped 10.83%, to Rs 110.50 on expectations that it will shortly announce a record date for bonus issue. The company had already declared a liberal 1:1 bonus issue on 01 August 2006.

Infotech Enterprises rose 1%, to Rs 212 after its wholly-owned subsidiary, Infotech Enterprises America, signed an agreement with IBM to jointly provide services to assist clients across the globe in accelerating the deployment of product lifecycle management (PLM) and engineering solutions for the manufacturing industry.

United Phosphorus surged 3.67%, to Rs 240 on purchase of crop protection products from Bayer CropScience AG, Germany, to the tune of Euro 43.5 million, which also includes inventories. Among the products purchased are systemic carbamate herbicidal active ingredient Asulam (brand names Asulox Asilan ) and two insecticidal products. Bayer CropScience has retained certain rights related to non-agricultural uses in strategic markets.

Praj Industries surged 2.12%, to Rs 178.10 after its board earmarked Rs 100 crore for expansion and acquisitions of an engineering company in the US. The company has also planned investments in a new R&D center, two manufacturing workshops nearer to the port and in expanding the engineering center at Pune. This expenditure will be carried out over a period of 12-15 months.

Emco rose 0.70% to Rs 533 after it bagged a Rs 270 crore power transformer order from Karnataka Power Transmission Corporation.

Hercules Hoists spurted 6.30%, to Rs 2,380 on fixing 15 September 2006 as a record date for allocating 1:1 bonus shares.

Indo Asian Fusegear rose 1.66%, to Rs 137.50 on a high volume of 25.43 lakh shares after it was reported that Indo Asian Fusegear plans to invest Rs 30 crore in a joint venture with a unit of Spain's Simon Holding. The joint venture will make wiring accessories and home automation systems in India.

Cadila Healthcare turned ex-bonus today, issuing 1:1 bonus shares to shareholders. The scrip closed at Rs 338 on a volume of 16,929 shares.

The Hang Seng index rose 201.43 points (1.18%), to 17,284.71 while the Nikkei 225 index lost 18.54 points (0.12%), to 15,872.02.

US markets rebounded from their early lows and ended with steady gains on Tuesday after minutes from the last Fed meeting mellowed concerns about rate hikes. The Dow Jones advanced 18 points to 11,370, while the Nasdaq Composite rose 12 points, to finish on 2,172.

Crude oil prices rose after a sharp decline on Tuesday; the Nymex light crude oil for October delivery rose 51 cents, to $ 70.22 a barrel.

On 28 August 2006, FIIs were net buyers of stocks to the tune of Rs 43.40 crore (gross purchases worth Rs 806.50 crore and gross sales of Rs 763.10 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 10.84 crore (gross purchases worth Rs 331.73 crore and gross sales of Rs 342.57 crore).

Hot News

MIRC Electronics hits a purple patch
MIRC Electronics surged 20%, to Rs 22.10, with the scrip rising on a high volume of 23 lakh shares on BSE.Today the volume was much higher than the average daily volume in the past one year (1.3 lakh shares) on BSE .The stock has surged since early this month on the back of a recovery in small-cap and mid-cap shares. From a low of Rs 15.60 on 7 August 2006, it has gained 41.6% to the current Rs 22.10.

The current price of Rs 22.10 discounts its FY 2006 (year ended 31 March 2006) EPS of Rs 2.30, by a PE multiple of 9.60.

To reduce dependence on a single product for growth, MIRC ventured into the audio, air-conditioner and the home appliances market in recent months to leverage the strength of the Onida brand.

The company enjoys 13% share in the Indian colour television (CTV) market. During the recently concluded soccer world cup, the company initiated an aggressive advertising campaign to promote its premium electronics products along with its low cost products. This will augur well for the company during the coming festive season.

MIRC Electronics competes with leading MNC brands like LG Electronics, Samsung, Sony, Phillips in its core CTV business.

The company’s recent initiative to foray into telecom service is quite interesting. Although the business structure has not been decided on that front, the company may become a MVNO (Mobile Virtual Network Operator). In such an arrangement, the company provides the branded last mile mobile service to customers on a major telecom operators network.

For Q1 June 2006, MIRC Electronics reported 15% growth in net profit to Rs 7.29 crore, on 40% growth in sales to Rs 333.50 crore.

Hot News

Solar business consolidation plan makes Moser Baer volatile
Moser Baer rose 1.84% to Rs 193.50 in early trade after the company announced plans to invest $ 17 million in its solar technology arm, but soon pared gains.The scrip was trading flat at Rs 190.A thin volume 5,238 shares was traded on the BSE.The counter has seen much volatility in the last few weeks. From a low of Rs 169.85 on 24 July, it advanced amid much volatility to close at Rs 190 on 29 August 2006.

Moser Baer India's board has approved an investment of $ 17 million in Moser Baer Photo Voltaic (MBPV), its wholly-owned subsidiary, in the high growth global photo voltaic industry. This investment will be in a phased manner and provide further impetus to MBPV's technology and R&D initiatives.

MBPV is setting up a PV cell & module manufacturing project with an 80 Mw capacity in India's first renewable energy SEZ at Greater Noida, UP, India.

The global photovoltaic market is on a high growth curve - sales expected to grow over $ 40 billion by 2010. This demand is also highly price elastic. A lowering of PV electricity costs to conventional levels could exponentially expand this market as photo voltaic (PV) starts to penetrate into base load demand of electricity.

Last month, Moser Baer India proposed a 100% subsidiary in Cyprus with an initial capital of Euros 25,000 for acquiring / setting up optical media and other businesses, including acquiring future technology in Europe, US and the rest of the world. The proposed subsidiary would help identify opportunities in global R&D in optical media and other technologies and simultaneously, look for setting up greenfield projects in Europe and other global markets.

In late July, the company had begun exporting HD DVD-R (recordable), a next generation format, to its global original equipment manufacturer (OEM) customers. The HD DVD-R has a capacity of 15 GB and offers more than three times the data storage capacity of standard DVD media.

On 20 February, Moser Baer India announced that it will establish and invest in a new public limited subsidiary, to function as 'developer' of SEZs. The company has decided to set-up this firm as a special economic zone unit.

Moser Baer India registered a net profit of Rs 6.47 crore for Q1 June 2006 compared to a loss of Rs 11.15 crore in Q1 June 2005. Net sales rose 30% to Rs 454.52 crore from Rs 349.88 crore.

Ranbaxy upbeat on favourable court verdict
Ranbaxy Laboratories surged 1.52%, to Rs 401.50 on getting a favourable ruling from a Norwegian court involving two patents on Atorvastatin.As many as 1.99 lakh shares were traded on the BSE.The scrip witnessed a bout of volatility in the first quarter of FY 2007. It moved up from Rs 393.15 on 23 March to Rs 504.15 on 21 April on three overseas acquisitions. Here, the scrip dropped to Rs 470.55 on 27 April, only to rise to Rs 522 by 2 May. Thereafter, it tumbled in a weak market to Rs 342.15 by 8 June 2006. After finding support at this level, the stock rose to Rs 391.20 on 25 June as the market recovered from a bearish hold. Thereafter, the stock slipped to Rs 320.40 on 17 July 2006 only to rally to Rs 395.50 on 29 August on strong Q1 results and on US FDA approvals for generic entities.

At the current market price of Rs 401.50, Ranbaxy Laboratories trades at 52.14 times its Q2 June 2006 annualized consolidated EPS of Rs 7.70.

Ranbaxy Laboratories has announced that a Norwegian court has ruled in favour of the company in its case against Pfizer, involving two patents on Atorvastatin. Atorvastatin is a cholesterol-lowering drug marketed by Pfizer as Lipitor.

Recently, Ranbaxy Laboratories launched its Soliten (Solifenacin) in India for managing chronic urological disorder. The product is being introduced for the first time in India. Soliten will be sold in dosage form of 5 mg and 10 mg tablets.

Ranbaxy Laboratories has plans to sell a manufacturing facility in Ireland and consolidate its Romanian operations. In June, Ranbaxy acquired Romania's Terapia S.A. for $ 324 million, to boost its presence in the fast-growing CIS markets.

Earlier this month, Ranbaxy Laboratories received tentative approval from the US Food and Drug Administration for risperidone oral solution, to treat schizophrenia, whose total annual sales touch $ 66 million. Further, the company had signed a deal in July with the Canada-based Janssen-Ortho to supply generic risperidone tablets in the North American nation.

In early July, Ranbaxy Laboratories received approval from the US Food and Drug Administration to manufacture and market Cefprozil oral suspension USP, 125 mg/5ml and 250 mg/5ml. The total annual market sales for Cefprozil are estimated at $93 million.

Faced with tough pricing pressure in the US, Ranbaxy has turned to Europe. It purchased Romania's Terapia for $324 million earlier this year, followed by Belgium's Ethimed NV, GlaxoSmithKline's Italian and Spanish generic business, and the rights and assets of Senetek Plc's autoinjector device. Europe is the largest generics market in the world after the US.

In mid-July Nihon Pharmaceutical Industry (NPI), a joint venture of Ranbaxy Laboratories and Nippon Chemiphar, launched the generic versions of Clarithromycin as well as Terbinafine tablets in Japan. Clarithromycin is an anti-biotic and Terbinafine an anti-fungal with market sizes of around $400 million and $300 million respectively in Japan.

In early June, Ranbaxy Laboratories struck a strategic partnership with US-based Invagen Pharmaceuticals to market Zonisamide capsules in the US.

Ranbaxy Laboratories registered a consolidated net profit growth of 20% to Rs 121.10 crore (Rs 101.30crore) for Q2 June 2006. Net sales during the period rose 9% to Rs 1,433.90 crore (Rs 1,317.70 crore).
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