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India Equity Research Reports, IPO and Stock News
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ONGC: Rajasthan royalty cost recovery positive for valuation [Harshad Katkar]
Cairn India (CAIL – Buy, INR365 TP) in the postal ballot result announced today has agreed to make royalty payments from the CAIL-operated Rajasthan block RJ-ON-90/1 (CAIL 70%, ONGC 30% stakes) cost recoverable. As per the terms of the production sharing contract (PSC) for the Rajasthan block, royalty payments have to be made in full by the licensee of the block i.e. ONGC.
Steel Authority of India: Robust balance sheet, stressed return ratios [Abhay Laijawala]
SAIL’s ongoing modernization and expansion programme is likely to keep its ROCEs subdued until the new facilities are commissioned and benefits of its modernization programme start flowing in. While balance sheet should stay robust (strongest among listed peers), we see SAIL's return ratios staying stressed on account of low asset turnover (high CWIP). Attractive valuations (stock is trading at 1.1 FY12 P/BV) underpin our buy rating.
Asia Economics Special: India: Aug WPI inflation close to 10%; RBI to hike by 25bps [Taimur Baig]
WPI inflation for August was 9.8% (up from 9.2% in July), marginally higher than our expectations. The June inflation number was revised up slightly to 9.5% (from 9.4% before). On a seasonally adjusted basis, WPI inflation was up +0.4%mom compared to an average +0.2%mom rise in the previous two months. Weekly inflation data for primary articles (12.6%yoy vs. 11.3%yoy), food items (9.6%yoy vs. 8.2%yoy) and fuel products (12.8%yoy vs. 12.0%yoy) had already indicated a higher inflation outturn in these categories for the month of August, compared to July. With manufactured goods inflation also accelerating (+0.4%mom), WPI inflation remained sticky close to the 10% mark, providing no respite whatsoever.
Asia Local Markets Weekly: RBI stands alone [Sameer Goel]
Bank Negara Malaysia surprised us this week by not raising rates despite their continued "concern" about inflation. Three other central banks kept rates unchanged as expected. This leaves the RBI as the only central bank in Asia which we think will still raise rates, albeit only once more next week.
US Daily Economic Notes: Residual inflation complicates matters, unlikely to deter Fed [Joseph LaVorgna]
Slack economic activity will eventually beget tamer consumer inflation, but in the short run residual inflation pressures are likely to drive the CPI higher. This will be evident in today’s data on August consumer prices. Presently, the consumer inflation outlook is very much the opposite of what transpired last summer, as growth was accelerating but price pressures continued to dissipate in lagged response to the final quarters of the recession—thereby fueling concerns of deflation among some forecasters.
Rethinking Asset Allocation: The Role of Risk Factor Diversification [Brad Jones]
We argue that the conventional approach to asset allocation (simply spreading capital across asset classes) offers woefully inadequate diversification benefits when asset payoffs are exposed to the same set of underlying risk factors. For instance a 60/40 equity/bond portfolio is 100% exposed to unexpected inflation or sovereign risk (as the experience in Southern Europe today, and the US for most of the post-WWII period testifies).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ONGC: Rajasthan royalty cost recovery positive for valuation [Harshad Katkar]
Cairn India (CAIL – Buy, INR365 TP) in the postal ballot result announced today has agreed to make royalty payments from the CAIL-operated Rajasthan block RJ-ON-90/1 (CAIL 70%, ONGC 30% stakes) cost recoverable. As per the terms of the production sharing contract (PSC) for the Rajasthan block, royalty payments have to be made in full by the licensee of the block i.e. ONGC.
Steel Authority of India: Robust balance sheet, stressed return ratios [Abhay Laijawala]
SAIL’s ongoing modernization and expansion programme is likely to keep its ROCEs subdued until the new facilities are commissioned and benefits of its modernization programme start flowing in. While balance sheet should stay robust (strongest among listed peers), we see SAIL's return ratios staying stressed on account of low asset turnover (high CWIP). Attractive valuations (stock is trading at 1.1 FY12 P/BV) underpin our buy rating.
Asia Economics Special: India: Aug WPI inflation close to 10%; RBI to hike by 25bps [Taimur Baig]
WPI inflation for August was 9.8% (up from 9.2% in July), marginally higher than our expectations. The June inflation number was revised up slightly to 9.5% (from 9.4% before). On a seasonally adjusted basis, WPI inflation was up +0.4%mom compared to an average +0.2%mom rise in the previous two months. Weekly inflation data for primary articles (12.6%yoy vs. 11.3%yoy), food items (9.6%yoy vs. 8.2%yoy) and fuel products (12.8%yoy vs. 12.0%yoy) had already indicated a higher inflation outturn in these categories for the month of August, compared to July. With manufactured goods inflation also accelerating (+0.4%mom), WPI inflation remained sticky close to the 10% mark, providing no respite whatsoever.
Asia Local Markets Weekly: RBI stands alone [Sameer Goel]
Bank Negara Malaysia surprised us this week by not raising rates despite their continued "concern" about inflation. Three other central banks kept rates unchanged as expected. This leaves the RBI as the only central bank in Asia which we think will still raise rates, albeit only once more next week.
US Daily Economic Notes: Residual inflation complicates matters, unlikely to deter Fed [Joseph LaVorgna]
Slack economic activity will eventually beget tamer consumer inflation, but in the short run residual inflation pressures are likely to drive the CPI higher. This will be evident in today’s data on August consumer prices. Presently, the consumer inflation outlook is very much the opposite of what transpired last summer, as growth was accelerating but price pressures continued to dissipate in lagged response to the final quarters of the recession—thereby fueling concerns of deflation among some forecasters.
Rethinking Asset Allocation: The Role of Risk Factor Diversification [Brad Jones]
We argue that the conventional approach to asset allocation (simply spreading capital across asset classes) offers woefully inadequate diversification benefits when asset payoffs are exposed to the same set of underlying risk factors. For instance a 60/40 equity/bond portfolio is 100% exposed to unexpected inflation or sovereign risk (as the experience in Southern Europe today, and the US for most of the post-WWII period testifies).
Hello,
ReplyDeleteCould you please tell me if you are aware if the PSC between ONGC and Cairns is available in the public domain. Thank you.