India Morning Report: Markets do not have to correct at all, there is no such requirement

Sudershan Sukhani gets another look in on our bullletin if only for the 100% trader’s attempts at catching a correction again at 5700, with sell calls on Biocon and Reliance Capital. Anil Ambani is easy pickings though the rest of them may not move and then you will lose that one too. I am not on any 100/30 strategies this sector of the market and think 5700 is absolutely valid for the market to start any move. Though if you want to , markets might oblige a 30 points in the new series as they assess whether another move like the first week of october can be absorbed in the markets.

Another fuel hike well and truly puts paid to any political ambitions of the MOF /Chidu and a rate cut is impossible to clear on Tuesday. Energy stocks get another sleeping level move, unlikely in any other sector in India and the positive rerating, for a change, is long overdue in the sector from ONGC and GAIL tot he OMCs and even Oil India which has been neglected for a good 5 years now but may soon become more active as ONGC Videsh runs out of the big plays it had been sitting on. The piped gas plays similarily are interestingly undervalued but waiting to staay with Market Beta than move independently again after having moved once on fundamentals in the last three years.

Bajaj Auto and Dr Reddy might be the convincer markets need to move up and printed good results. Banknifty has definitely made a fresh bottom support at 11600 now and ICICI Bank results can only move it north. IDFC is back too and so bets might change by 10 am from Sells to Buys on the trading stocks too.

India Closing Report – Week Of September 24-28, 2012

 

The CDS currency series on the USD is finally trading below 53 as expected starting back from 53.5 2 days ago an dis this time likely to go below 52 intra day in the Ne October series as gold and Silver importscome to a standstill before Diwali on Nov 13. International prices of Gold move in tandem with Indian jewelry demand and the bottom is a certainty the market has seen over the last 20 years internationally and locally

Retail FDI aspirants are active and biudding up their real final control equation wary of the $100 m in 3 years and the back office requirement as they run for good M&A possibilities int he space. Aviation rerating from FDI is abviously because of more international demand for listed stock from Spicejet and Jet to Kingfisher and perhaps unlisted Indigo and Air India as well

The jump in Nifty is a little bit of a surprise , one expecting the bull commentators to again not again get any returns in the fresh series gambles and while new picks have not succeeded the enduring stories from ITC to ICICI BANK and IDFC have not disappointed. JP ASSOCIAT deserved the run and TELCO’s (TATAMOTOR) mysterious run continues flummosing all and sundry a nightmare compared to REliance Capital and Rel INfra’s expected rise and fall on good and bad days in a spree

BHARTI is still at reasonable levels but given that it is  a less than 50% holder in front office big retail with almart expect some investor groups to leave it for its portfolio fo international /US investments The bump isn profitability if that is the hope is still a mirage a nd a lot tof hard work from the management returned in kind by new consumers and governments important for that to happen. Th eDCHl case is a mite mysterious as ell, ICICIBANK obviously relying on the IPL franchise name to the latest tranche of loansin 2011 and now the immediate restructuring while YES holds out for franchise assurances. USL rise is likely limited from here as promotores have already haked therir stake for collateral , almost the entire 27.7% and their hoep from a Diageo/KFA investor treasury purchase is on debt improving the bottomline from a upto 50% drop in interest costs

 

RELIANCE AMC gets follow on investment from Nippon Life

Even as Rel Com suffers from a $ 6.5 bln debt overhang , even witht he rupee holding, the condition of the group is precarious esp on Reliance Capital as a NBFC funding the group also. Rel Capital got a reprieve yet with Nippon Life agreeing to another high valuation, this time the mutual fund at 6.4%AUM and investing INR13.5 bln for a share of the business

At a valuation of slightly over $1 bln, the investment pays premium for Reliance’s dominant 12.5% share of Indian AUMs at the said 6.4%

Predilections: Is it the individual than the Company?

Potrait of Dhirubhai Ambani
Image via Wikipedia

ADA group s a whole with its umbrella of companies move together as one company, while Reliance, having burnt its hands in oil flares tries to become a diversified conglomerate to represent India of the future . Both Groups ADA Reliance and Reliance continue to be expected to roll the markets and no individual earnings performances and valuations may matter to strategy and Capital raising teams at both companies.

They continue to look for the personal licence to muddy over their Sports, Financial Services investment for the Hydrocarbon major and the incessant hunger for Capital for Infra projects under Power and Telecom retail for the other group. Reliance Capital itself remains pressured as a subsidiary to such ambitions before new bank licences try to enforce an independence on the same .

A little more Capitalist as anyone would want a promoter to be but still, serious analysis would probably show up the deficiency of this mass correlation for internal investors and outside in hangers on to theIndia story who look to the return of Relaince as the proxy investment for India

Sunil Godhwani, Chairman and Managing Director...
Image by zeeble via Flickr
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  • Indian stocks slump 1.7%, led by Reliance shares (marketwatch.com)

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