Morning Bells (23 April 13)

Good Morning Friends.

Don’t go the way life takes you… take life the way you go… because you are born to LIVE and not living just because you born. - MG

As most of times I told, my only weakness is I don’t get news on time, same has happened today, view was correct and Nifty went down 30 points and all of sudden some coal block and realty sector news started floating around the market and market not even recovered but gained smartly, infact there were many more news which impacted market, have a look to “Domestic Front” section. Still if some of you can post quick news here or on FB will be a great help.

Well, today is the day of HDFC Bank, it will announce its Q4 today, net profit is likely to grow 32.6 percent year-on-year to Rs 1,926 crore. Net interest income, or the difference between interest earned and paid out, is expected to rise 17 percent YoY to Rs 3,969 crore, according to a poll estimate by CNBC Awaaz.

HDFC Bank shares have outperformed the Bank Nifty - the broader index for banking stocks by a wide margin. Since last one year, those spiked more than 30 percent as against a rise of nearly 17 percent in the benchmark index.

Come to home ground -

The Indian equity market extended its thumping run to fifth straight trading session on Monday. The NSE Nifty index added another 50 points to its kitty with the index shutting shop above the 5800 mark. The index has rallied nearly 350 points in the past five trading sessions led by the Banking, Realty and the Auto stocks in anticipation that the Reserve Bank of India will go ahead and cut key interest rates in the upcoming policy rates meeting scheduled on May 3, 2013.

Meanwhile, the budget session of Parliament which resumed today was adjourned till Tuesday. The Opposition parties raised their voices against a couple of issues including the rape of a minor.

Gainers –

RIL, Tata Power, Tata Steel, HDFC Bank, Jindal Steel, L&T, Gail India, Bharti Airtel, Maruti Suzuki, ICICI Bank, BHEL, Hindalco Inds, Hero MotoCorp, NTPC, Tata Motors and Coal India were among the major gainers in Sensex and Nifty. 

Losers –

Wipro, TCS, Infosys, ONGC, Dr Reddy’s Lab, M&M and Sterlite Inds were among the major losers in Sensex and Nifty.

Sectoral –

Top gainers were BSE Consumer Durables, BSE Capital Goods and BSE Metals up 4%, 3.5% and 2.2% respectively.

The Mid-Cap stocks outperformed the benchmark indices adding 1.5%. While the BSE Small-Cap index added 0.94%.

The BSE IT index was the major dragger, the index lost nearly 2.3% on the back of disappointing quarterly numbers from Wipro.

Domestic Front –

CCI’s clearance to 25 oil blocks, may benefit RIL & ONGC –

After clearing five "No-Go" areas for oil and gas exploration, the Cabinet Committee on Investment (CCI) today eased stringent conditions imposed by Defence Ministry on another 25 blocks, freeing USD 4.61 billion investments.

"The CCI at its meeting held today cleared 25 exploration and production blocks for continued exploration of oil and gas, out of 31 blocks where work had been stopped on account of security restrictions imposed by Ministry of Defence," an official statement said here.

While the statement did not give break-up of the blocks cleared, the 31 blocks where restrictive conditions were imposed included 13 of Reliance Industries -BP combine, 15 of state-owned Oil and Natural Gas Corp ( ONGC ) or its lead consortium, two blocks of Santos of Australia and one block of Cairn India -led consortium.

CCEA rejects coal pool pricing –

The government today buried a proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants, owing to sharp opposition to the scheme.

"Price pooling is out of the window," a source attending the Cabinet Committee on Economic Affairs on the issue said here.

While no formal reason was given for burying the proposal, the source said power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates.

New projects commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers, he said.

Private power producers wanted the sub-market domestic coal prices to be averaged out with international price of imported coal so as to have a uniform fuel price and remove the disadvantage new projects faced as compared to older ones. The pooling was being opposed for various reasons by older power plants and domestic coal producers.

CCI clears 13 power projects & 25 Oil blocks –

Pushing the government's reform agenda further, the cabinet committee on investment (CCI) today cleared 13 power projects and 25 oil blocks, which will provide much needed to boost to the struggling power and oil and gas sectors. 

Out of 20 projects, CCI cleared 13 power projects worth Rs 33,000 crore, which were stuck due to various reasons including environmental concerns. About 31 oil and gas blocks worth USD 2.7 billion were stuck, of which CCI gave clearance to 25 oil blocks worth 461 crore. Of course, 16 were cleared with normal condition, 9 with special conditions and six blocks did not get clearance. 

 

Land Acquisition Bill -

The long-pending Land Acquisition Bill may finally see the light of the day as all political parties reached a consensus on most issues on April 18. It was expected to be tabled in Parliament but the second Budget session was adjourned mid-way.

So, what is Land Acquisition Bill?

The Bill proposes the payment of compensation that is upto four times the market value in rural areas and two times the market value in urban areas.

It seeks to compensate 50 percent to the original farmers whose land has been purchased after the introduction of the Bill in Lok Sabha in September 5, 2011.

Instead of acquisition, land could be leased to developers so that its ownership will remain with the farmers and would provide them with regular annual income.

The Bill seeks to address problems of industry regarding acquisition of land for setting up projects. It provides for land acquisition, rehabilitation and resettlement of the displaced people and proposes to replace the Land Acquisition Act, 1894.

The government agreed to amend the Bill to provide for an enabling provision for states to enact laws in this regard as leasing of land is a state subject.

It stipulates that consent of 80 percent of the people are required for acquiring land for private industry.

The Centre is likely to insert a provision that if government acquires land that changed hands after September 5, the compensation would be divided equally between the current landowner and the one prior to cutoff date.

Impact on real estate prices and volumes

• Developers say cost of land will go up by 60-80 percent because of the compensation clause. This will lead to increase in property prices, thus impacting demand.
• This wiill make it very difficult for the industry to be viable.
• If Bill gets passed, developers will also hesitate to go in for big projects.
• High consent rates will make acquisitions very difficult.
• According to the provisions, 80 percent of the displaced people would have to give their consent in case of private acquisitions, while in case of government and public-private partnership projects, this number stands at 70 percent.
• Confederation of Real Estate Developers' Associations of India (Credai) says developers should be kept out of the ambit of the bill and should be applicable only to govt bodies.

(MoneyControl.com)

2G Scam, Raja attacks JPC –

Hours after he reiterated his allegation that Prime Minister Manmohan Singh was aware of all the decisions taken in connection with the allocation of 2G spectrum, former telecom minister A Raja on Monday attacked the Joint Parliamentary Committee (JPC) for not allowing him to depose before it, reports CNN-IBN's Bhupendra Chaubey. The JPC is examining the 2G spectrum allocation.

"This is not the way the JPC is expected to function," said Raja. "Even without waiting for my statement JPC prepared a draft report and also leaked it to the media," he alleged. Raja said he was not provided with a copy of the deposition of Solicitor General of India. "I always had concerns about the credibility of JPC," he added.

JPC chairman PC Chacko, however, claimed that Raja was given a chance to be heard. "He (A Raja) gave a 16-page reply to JPC...Raja did not complain then," he said.

(MoneyControl.com)

Global Front –

FDI dips 19% -

India received foreign direct investment (FDI) worth USD 1.79 billion in February, 2013-  a decline of about 19 percent due to global economic slowdown.

In February 2012, the country had received FDI worth USD 2.21 billion. In January this year, the country had attracted USD 2.15 billion FDI.

=====================  MARKET OUTLOOK  =====================

Another reason for Nifty to maintain the levels till expiry is very clear - some of the private sector banks will be declaring their results by the expiry, so  that may take the Bank Nifty a little up. I see 5850 around level as resistance, may be in 2 days it can touch that level and on final day it may decline.

Warning – Avoid option at this moment, options can be traded only as intraday.

But what next - Traditionally, May series has always been lackluster and weak, but this time May series has five weeks, which will be very crucial.

The INDIA VIX on NSE was surged 6% and ended at 16.22 against previous close of 15.36.

FNO PCR was 1.19 against previous close 1.13.

Indian Rupee – Rupee weakened by 18 paisa and was trading at 54.18 against its previous close of 53.96.

S&P 500 (US) was trading at 1563.30 up 8.05 then its previous close at the time of writing M Bells.

RESULT CALNEDER –

23 Apr – HDFC Bank

25 Apr - Idea Cellular

26 Apr - Hero Motocorp, ICICI Bank, Maruti Suzuki

=======================  NIFTY OUTLOOK  ========================

Nifty and Bank Nifty futures are seeing long rollovers of around 28% and 20%, so now 5760 could act as strong support as huge put writing seen in 5800 April option.

Intraday Resistance – 5911 – 5878 – 5856 and Support – 5801 – 5767 – 5746 (Pivot 5823)

Opening – Seems a bit positive, as close was good and now global market are trending green.

========================  STOCK OUTLOOK  ======================

(Stock outlook needs to watch stock movement carefully and then one can bet after having a look, I tried to put related info which will help you in taking positions.)

TM –

(Here onward I will try to keep TM in our daily scan)

Jaguar Land Rover Ltd aims to grow its sales by 20-30 percent this year in China, its biggest market, the company's China chief said on Saturday.

JLR, on track to start making Jaguar and Land Rover vehicles in China in partnership with Chery Automobile Co in late 2014, aims to achieve "profitable and sustainable growth" in the country, Bob Grace told reporters at the Shanghai autoshow

The company, controlled by India's Tata Motors Ltd , sold about 77,000 vehicles in China in 2012.

View – TM may continue its onward journey, once again keep in mind my favourite price bands for TM which is above 271 its 289-291, above that 305 around level, for mid term SL is 251.

Wipro –

Wipro fell by 7% to close at 341 after the company failed to enthuse with its Q4 FY 13 results. Wipro posted a net profit after taxes, minority interest and share of profit of associates of Rs. 172.8 billion for the quarter ended March 31, 2013 as compared to Rs. 148.09 billion for the quarter ended March 31, 2012. Total Income has increased from Rs. 875.09 billion for the quarter ended March 31, 2012 to Rs. 992.08 billion for the quarter ended March 31, 2013.

Rcom –

Reliance Communications shot up 13% and touched a 52 week high after the company confirmed that Samena Capital, in a proposed Consortium with certain other global PE funds, is at an advanced stage of the process of due diligence and completion of definitive documents in relation to the acquisition of Reliance Globalcom Ltd. The deal is set to be completed by completion is end of May 2013. RCOM and Samena Capital are no longer in discussions with Batelco for the purposes of the above transaction.

Coal India -

Coal India surged by 4.5% after reports came out that the state run coal miner plans to take up projects to extract 2 billion tonnes of premium quality coal locked up in pillars in underground mines.

RIL –

According to reports, Reliance Industries Chairman Mukesh Ambani is planning to infuse fund of Rs 85.75bn into gas and port arms.

Ambani has infused Rs 30bn of equity into the port and terminal company, Reliance Ports & Terminals Ltd (RPTL), and another Rs 15.75bn of equity in Reliance Gas & Transportation Infrastructure Ltd (RGTIL), report said.

There are reports that fund infusion into both the companies had been necessitated after they demerged their investment divisions into separate companies in a complex process undertaken last year.

Ultratech Cement –

UltraTech Cement  posted a net profit of Rs 726.2 crore for the quarter ended March 31, 2013, down by 16 percent as compared to Rs 867.32 crore for the quarter ended March 31, 2012. Total income increased from Rs 5529.14 crore for the quarter ended March 31, 2012 to Rs 5572.52 crore for the quarter ended March 31, 2013.

FY13: It posted a net profit of Rs 2655.43 crore for the year ended March 31, 2013 as compared to Rs 2446.19 crore for the year ended March 31, 2012. Total income has increased from Rs 18681.72 crore for the year ended March 31, 2012 to Rs 20479.94 crore for the year ended March 31, 2013.

==================== OPEN CALLS ====================

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

# Be with strict SL and don’t hesitate to book even small profit if Nifty doesn’t shows strength.

=============== INVESTMENT BASKET ===============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12)

(Start exiting from stock if Nifty goes below 5500 mark)

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog Since Jan 13 (Total 50,300) + Apr 13 = +5750

Billionaire Club Since Jan 13 (Total 1,09,350) + Apr = +7900

Today’s MG Mantra –

Expiry week, one can go long and exit around 5830, if trend reversal then keep SL 5735.

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Have a Profitable day – MG