India Equity Research: 02/14/11

14 February 2011

Macquarie Research, Global Property Insight- Focus on the US

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Global Property Insight
Focus on the US

Global real estate growth slowed down in January
Compared to Dec 2010, January saw a slowing-down in all global real estate
securities markets. Globally, the sector (+1.3% in US$) was broadly in line with
the global equity market (+1.6% in US$). In US$, North America was the best
performing region in January, up +3.1%, compared to South Africa, which fell
furthest at -12.1%.
Current global valuations suggest 7.8% upside to target price

In aggregate, the current upside to our target price is now 7.8% (4.7% last
month), with our universe of leading market stocks trading at a weighted-average
discount to NAV of 8.2% (-10.0%) and an FY1 dividend yield of 3.4% (3.4%).
Capital market issuance
Another busy month for capital markets, with a total of £7.6bn (£4.2bn in Dec
2010) raised globally and still dominated by the US (£4.0bn). Of this £0.4bn was
for IPOs (£1.0bn last month), £2.7bn in secondary issues (£2.3bn), and £4.5bn
(£0.9bn) in bond issues (p 17).
Key Overweight markets – Hong Kong, Singapore, Thailand, Philippines,
Indonesia and the US
Key Underweight markets – China, Japan, Australia and New Zealand

Macquarie MarQuee Ideas Monthly update

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Macquarie MarQuee Ideas
Monthly update
Performance review and a summary of changes
We have made a number of changes to our MarQuee list since launching in mid-
December and are summarising the changes inside this report. We also include
a performance review of all the stocks on the list from mid-December to date.
Changes indicate two clear themes
There are two themes that override our changes since December: an increase in
commodity price forecasts and a structural change among a number of
underperforming technology stocks.
A major review of our commodity price assumptions by our commodities team in
mid-January, which saw an increase in most of our commodity price forecasts for
2011, drove a number of changes among resources. These included the addition
of the Buy ideas of Sumitomo Metal Mining in Japan and Harum Energy in
Indonesia after major upgrades to our copper and coal price forecasts. And an
increase in aluminium forecasts for 1Q 2011 led us to believe there were upside
risks to Chalco’s share price, so we have removed this from the Sell list.
The other additions to the list were all on the technology side. Elpida Memory is
a play on a recovery in DRAM prices that our technology analysts believe will
begin this quarter as supply is curtailed – a theme that should benefit another of
our existing MarQuee Buy ideas, Samsung Electronics.
We also added Hon Hai precision, which our analyst Daniel Chang now believes
has fallen too far. With the company‟s cost structure set to improve from 2Q,
Daniel believes the shares are due for a re-rating and added this to the Buy list.
Further details on our changes can be found inside.
Performance review
Among some of the strong movers this month, the Sell call on Taiwan semi
company Mediatek by Jimmy Hsu stands out. Against a rising market, the stock
fell 21% after 4Q results and outperformed the MSCI Taiwan index by 22%.
Two Japanese Buy names also made a mark: Marubeni, up almost 15% and
manufacturing group Murata both easily outperformed, while in Taiwan, HTC
returned over 14%. Among the smaller names, KNM Group, OSIM and China
Minzhong Foods all outperformed their respective country indices. Further
details are on page two and a summary table in Figure 1.
On the downside, Reliance Industries fell heavily but in line with the broader
Indian market and Glenmark Pharma underperformed after losing a patent
decision in the US. China Yurun Food also fell heavily after hog prices began
falling although our analyst Lisa Deng believes this is actually positive for the
group. All of these names remain on the Buy List.
And a few changes: Removing OCBC and Aeon Mall
We are also removing two names that no longer have the upside potential to fulfil
our MarQuee criteria (see pg 15). OCBC Bank in Singapore has underperformed
the Singapore market since mid-December but has just 17% potential upside left
to its TP, while Aeon Mall in Japan has just 18% left after a 4% rise.

Unconventional Wisdom -America has won this battle : Macquarie Research

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Unconventional Wisdom
America has won this battle
Event
 Several Asian currencies are rising strongly against the US$.
Impact
 The battle over whether the US will have to adjust or whether Asia will have to
adjust is over. America has won and Asian currency appreciation is the
clearest sign of this victory.
 Perhaps the most important implication will be the impact on China’s trade
surplus. Rising currencies in Asia ex-China could amplify the impact of the
stronger RMB.
 If so, then global rebalancing could accelerate and this would be a plus for the
sustainability of the recovery.

Jagran Prakashan: Stronghold in Hindi heartland:: Macquarie Research

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MacVisit
Jagran Prakashan: Stronghold in Hindi heartland
􀂃 We spoke with the management of Jagran Prakashan (JAGP IN) to
understand the outlook for the Indian Print media players, business drivers of
the company, and its positioning vs. offerings of other Indian media vendors.
􀂃 Jagran Prakashan was founded in 1942 and its flagship brand is ‘Dainik
Jagran’. It publishes 37 editions and over 200 sub editions, across 11 states.
The company has dominant position in two of the largest Hindi-speaking
markets and has taken the inorganic route to establish a presence in Mumbai.

FII DERIVATIVES STATISTICS FOR 14-Feb-2011
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	136032	3672.91	103729	2807.15	570459	15557.45	865.76
INDEX OPTIONS	338707	9120.08	314572	8436.39	2008833	54799.69	683.68
STOCK FUTURES	111742	2909.44	70559	1852.40	1206812	29735.89	1057.04
STOCK OPTIONS	21033	575.65	22049	602.34	23607	620.68	-26.69
						TOTAL	2579.79

Scrip Code	Company	Client Name	Deal Type *	Quantity	Price **
500410	ACC	AMBUJA CEMENT INDIA PRIVATE LIMITED	B	1169000	999.93
531179	Arman Fin Serv	RAJGOPAL GILDA	B	34850	16.10
531179	Arman Fin Serv	PRABHAVATHI DEVI	S	34850	16.10
531733	Bafna Spinning	SHELJA CHANDULAL RAVAL	S	195330	1.72
531937	Beckons Inds	AMIT BHASKARRAO SANAP	B	528266	2.61
511664	BGIL Films	SITA RAM	B	60000	4.24
511664	BGIL Films	ENAAM SECURITIES	S	91057	4.24
518017	Bheema Cem	JMP SECURITIES PVT LTD	B	137490	19.47

Symbol	Security Name	Client Name	Buy / Sell	Quantity Traded	Wght. Avg. Price
BEDMUTHA	Bedmutha Indust Ltd	MEENA AGARWAL	BUY	1,57,002	93.15
BEDMUTHA	Bedmutha Indust Ltd	MEENA AGARWAL	SELL	1,61,022	89.82
CANFINHOME	Can Fin Homes Ltd	RAJEN CHANDRAKANT SHARE A/C	BUY	1,04,252	110.42
CANFINHOME	Can Fin Homes Ltd	RAJEN CHANDRAKANT SHARE A/C	SELL	99,471	109.92
COSMOFILMS	Cosmo Films Ltd	CONSOLIDATED-FINVEST-&-HOLDING-LTD.-	SELL	1,09,745	91.26
GITANJALI	Gitanjali Gems Limited	CROSSEAS CAPITAL SERVICES PVT. LTD.	BUY	5,63,336	239.58