10 November 2011

Buy Entertainment Network Limited (ENIL) Target :Rs 291 ::ICICI Securities

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B e t t e r   u t i l i s a t i o n ;   c h a l l e n g i n g   t i m e s   a h e a d . . .
Entertainment Network Ltd (ENIL) reported its Q2FY12 numbers, which
were in line with our expectations on the topline front. The consolidated
topline for the company stood at | 70.1 crore against our expectation of |
74.6 crore. YoY comparisons are not prudent for consolidated numbers
as the company has hived off its  outdoor business. The standalone
topline stood at | 69.2 crore, growing 10.1% YoY on the back of 11.9% ad
revenue growth, which can be attributed to higher utilisation. The
blended capacity utilisation stood at 65.3% against 58.0% in Q2FY11.
ENIL reported standalone EBITDA of | 18.4 crore with an EBITDA margin
of 26.5%. The consolidated EBITDA margin stood at 24.8%. The company
reported standalone PAT of | 9.0 crore growing 80.2% YoY. The
consolidated profit stood at | 8.3 crore.
Highlights of the quarter
Ad revenue growth in this quarter was better than the previous quarter in
spite of it being a seasonally weak quarter. The radio business exhibited a
growth of 11.9% YoY in Q2FY12 in a challenging environment. The
blended utilisation level showed an increase from 58.0% in Q2FY11 to ~
65.3% in this quarter. The EBITDA margin in the radio business improved
152 bps to 26.5% from 25.0% in Q2FY11, in spite of higher marketing
expenses in this quarter, due to higher capacity utilisation.
V a l u a t i o n
We have valued the stock on an  SOTP basis, evaluating the radio
business on DCF and event business on EV/sales. Assuming revenue
CAGR of 12.7% over FY11E-FY20E and  terminal growth of 4%, thereon,
we have arrived at a target price of | 288/share for the radio business. We
have valued the event business at 1.0x FY13 EV/sales to arrive at a
valuation of | 2.2/share. The stock is currently trading at | 254. Our target
price implies an upside potential of 15%. We maintain our BUY rating.

Buy Oriental Bank of Commerce; Target : Rs 358 ::ICICI Securities

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S l i p p a g e s   w r e a k   h a v o c ;   t o u g h   t i m e s   a h e a d …
Oriental Bank of Commerce’s (OBC)  Q2FY12 profit at | 168 crore was
abysmally below Street and our expectations (| 349 crore) with GNPA
shooting up from | 2035 crore in Q1FY11 to | 3111 crore. Even though
sequential business growth was healthy at 5.1%, NII declined 8.1% YoY
(2.8%QoQ) to | 989 crore due to interest income reversal of | 137 crore
on account of high slippages. Consequently, NIM declined 30 bps to
2.64%. Out of total slippages of | 1503 crore this quarter | 700 crore was
due to migration of sub 10 lakh loans to system based NPA recognition.
This pushed up provision for NPA by 153% QoQ to | 342 crore, thus
wiping profits. These windfall slippages would impact interest income,
going ahead, as well. Moreover, slippages expected in H2FY12 would
push up credit costs further. Hence, we have cut our earnings estimates
for FY12E and FY13E by 25% and 24%, respectively. We expect higher
GNPA at 2.5% and NNPA at 1.2% to stay till FY13E.
ƒ Business crosses | 2500 bn milestone, margins contract to 2.64%...
Total business grew 19.6% YoY  (5.1% QoQ) to | 255163 crore.
Deposits grew 18.9% YoY (3.5% QoQ) to | 149552 crore while
advances increased 20.1% YoY (7.5% QoQ) to | 105611 crore. We
expect credit growth of 18.5% as against 20% targeted by the bank
for FY12E. Even though CASA was flat QoQ at 22.9%, NIM
contracted by 30 bps QoQ to 2.64% with YoA rising only 27 bps
QoQ as against a 44 bps rise in CoD.
ƒ Asset quality concerns to stay…
Total slippages amounted to | 1503 crore out of which | 700 crore
was due to migration of sub | 10 lakh loans to system based NPA
recognition with the agri segment accounting for | 375 crore and
retail segment for | 327 crore. GNPA surged 52.9% QoQ to | 3111
crore (GNPA ratio: 2.95%) while  NNPA rose 86.8% QoQ to | 1978
crore  (NNPA  ratio:  1.9%).  We  expect  slippages  to  stay  high  in
H2FY12E and expect GNPA at 2.5% and NNPA at 1.2% by FY13E.
V a l u a t i o n
The stock is trading at a low 0.8x  FY13E ABV at the CMP of | 290. We
expect slippages to continue and have lowered our earning estimates,
thus depressing FY13E ABV by 9% to | 377. With lower RoA and RoE of
0.9% and 13.7%, respectively, for FY13E, we have valued the stock at
0.9x FY13E ABV at | 358.

IL&FS Investment Managers (IIML) Analyst ConCall Invite, Nov 10, 5.30pm

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IL&FS Investment Managers (IIML) Analyst Call Invite, Nov 10, 5.30pm

Dr Archana Hingorani, Chief Executive Officer
&
Manoj Borkar, Chief Financial Officer

IL&FS Investment Managers Limited

invite you to an

Analyst Conference Call
to discuss Q2 FY 12 performance, along with a detailed review of the
current business environment.

Conference Call Details
Date : Thursday, November 10, 2011
Time : 1730 Hours (IST)
Dial in Numbers
USA : 1 866 746 2133
UK : 0 808 101 1573
Singapore : 800 101 2045
Hong Kong : 800 964 448
Mumbai : 66290556 / 30652485
Ahmedabad : 60001221 / 39403977
Bangalore : 60001221 / 39403977
Chandigarh : 60001221 / 39403977
Chennai : 60001221 / 39403977
Cochin : 60001221 / 39403977
Hyderabad : 60001221 / 39403977
Jaipur : 60001221 / 39403977
Kolkata : 60001221 / 39403977
Lucknow : 60001221 / 39403977
New Delhi / NCR : 60001221 / 39403977
Pune : 60001221 / 39403977

Buy Dabur; Target : Rs 120 ::ICICI Securities

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I n t e r n a t i o n a l   b u s i n e s s   d r i v e s   t o p l i n e   g r o w t h …
Dabur India’s Q2FY12 results were  in line with our estimates on the
revenue front with the company reporting a topline growth of 29.8% YoY
to | 1262.3 crore (I-direct estimate: | 1247.7 crore). The robust growth in
revenues has been led by the contribution to sales from the company’s
overseas acquisitions (Hobi and Namasté), excluding which the sales
growth stood at 12.9%. EBITDA margins continued to remain under
pressure YoY, declining by ~220 bps to 18.7%. However, margins
improved significantly QoQ by 390 bps driven by the impact of price
hikes across the company’s portfolio. In spite of a dip in margins, higher
sales and lower tax helped the company to maintain its YoY PAT growth
at a moderate level of 8.4% to | 173.9 crore against | 160.4 crore.
ƒ Highlight of the quarter
During the quarter, Dabur India Ltd (DIL) re-aligned its distribution
structure by integrating the consumer care division and the consumer
health division into a single unit, consumer care business (CCB). The
company did this restructuring to capture greater synergy, leverage scale
and enhance capabilities. Hence, DIL  now operates under two business
divisions, domestic and international. The domestic business is
completely merged under one unit, consumer care, while the
international business is organised under Dabur International, Hobi Group
and Namasté Labs LLC.
V a l u a t i o n
Currently, the stock is trading at 25.5x and 20.7x its FY12E and FY13E EPS
of | 3.9 and | 4.7, respectively. With growth in the international business
remaining healthy and DIL’s leadership position in its key product
offerings, honey, chyawanprash and fruit juices, remaining intact we
expect the momentum in sales growth to continue. Moreover, with
judicious price hikes and better operational management we expect
growth in margins and earnings to be back on track, going ahead. Hence,
we have valued the stock at 25x its FY13E EPS of | 4.8, arriving at a target
price of | 120

ACC- Price hikes to improve margins-Upgrade to Accumulate :Emkay,

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ACC
Price hikes to improve margins-Upgrade to Accumulate

ACCUMULATE

CMP: Rs1,184                                        Target Price: Rs1,290

n     EBITDA of Rs2.2bn (+30% yoy) below est dragged by higher P&F costs (Rs972/t +30% yoy) & higher other expenses (Rs5.2bn vs est of Rs4.78bn). Total cost/t up 12% at Rs3394
n     Revenues in line- up 31.3% yoy fuelled by 18% volume growth and 11.5% jump in realizations (led by minimal seasonal drop in prices in south , 20% of ACC’s sales)
n     Downgrade CY11EPS by 2.4% led by higher costs. However momentum in cement price hikes (Oct-11 prices already up Rs18-20/bag from Q3CY11 avg) lead to higher exit realizations driving 2.8% upgrade in CY12 earnings
n     Introduce CY13 EPS at Rs87. Improving margins with minimal capex to drive significant FCF & healthy volume growth to improve return ratios. Upgrade to Accumulate -revised target to Rs1290 by rolling over valuations to CY13 

Pfizer Ltd Growth trajectory intact - Maintain Accumulate :Emkay,

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Pfizer Ltd
Growth trajectory intact - Maintain Accumulate


ACCUMULATE

CMP: Rs1,325                                        Target Price: Rs1,574

n     Decent performance by Pfizer with a) Revenue up by 11% QoQ to Rs2.9bn, b) EBIDTA up by 23% QoQ to Rs516mn and c) PAT increased by 14% QoQ to Rs470mn
n     Pharma revenue growth on a like-to-like basis was at 13% led by volume increase (9-10% growth) and price increase (3% growth)
n     The company has launched insulins for diabetic patients from Biocon’s portfolio in the Indian market. We expect stronger traction from this opportunity going ahead
n     On back of good growth in formulations business & launch of Biocon’s Insulin, we maintain our target price of Rs1574 (20x FY13 EPS of Rs78.7) on the stock

Divi’s Lab : Robust performance - Maintain Buy :Emkay,

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Divi’s Lab
Robust performance - Maintain Buy

BUY

CMP: Rs759                                        Target Price: Rs927

n     Divi’s Q2FY12 performance was in-line with expectations with (a) Revenue at Rs3.66bn (up 43% YoY); (b) EBIDTA at Rs1.38bn (up 56% YoY)  & (c) APAT at Rs1.1bn (up 45% YoY)
n     Robust performance was on the back of commissioning of new SEZ plant at Vizag during June 2011
n     Going forward, improvement of capacity utilization at Vizag plant and ramp up in its carotenoids business will boost top-line and bottom-line
n     Strong quarter – Re-iterate Buy with a target price of Rs927 on the stock (20x FY13 EPS of Rs46.3)

Orient Paper & Industries Ltd Poor performance of Electricals division drags profits :Emkay,

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Orient Paper & Industries Ltd
Poor performance of Electricals division drags profits

BUY

CMP: Rs62                                        Target Price: Rs82

n     EBITDA at Rs556 mn (+196.2% yoy), lower than estimates (Rs652mn) led by poor performance of electricals division. Electrical revenues grew 7% with EBIT margins at mere 1.9%
n     Cement revenues grew 57% yoy (Rs2.9) bn entirely driven by a sharp 55% yoy jump in realization (Rs3555/t). However with higher energy & freight cost, cement EBIT/t at Rs683 came in lower than est(Rs730/t)
n     De-merger of cement business into a new wholly owned sub- Orient Cement Ltd - triggers the much awaited value unlocking process
n     Maintain Earnings. Stock trades at undemanding valuation of 5.5x FY13 PER & EV/EBIDTA of 3X. We maintain our BUY rating on the stock with target price of Rs82

ONGC - "Confluence of positives boosts performance":: LKP

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ONGC posted strong Q2 FY12 results with net sales & production volume in line with our estimates whereas lower dry well expenses, lower tax rate & higher other income resulted in better than expected net profit.
Q2 FY12 subsidy halves q-o-q to $33.2/bbl ($32.4/bbl expected)
Q2 FY12 subsidy burden of Rs 57,134.4 mn ($33.2/bbl) was just 1.3% ahead of our estimate of Rs 56,419.1 mn ($32.4/bbl). While it was double the subsidy burden of $16.5/bbl in Q2 FY11, it was less than half of the Q1 FY12 figure of $72.5/bbl. Thus, net realization rebounded from $48.8/bbl in Q1 FY12 to $83.7/bbl in Q2 FY12, 4.7% above our estimate of $80/bbl due to higher gross realization.
Confluence of positives boosts performance
While statutory levies at Rs 46.5 bn were higher by 25% sequentially, staff expenses and other expenses were up 6% & 20% sequentially. Helped by higher than expected net realization, operating profit of Rs 144.7 bn was 4.6% above our estimate of Rs 138.3 bn and OPM improved by 540 bps sequentially. Other income stood at Rs 11.3 bn, 9% higher than our estimate, due to higher than expected yields. Q2 FY12 dry well expense at Rs 11.8 bn was significantly lower than Rs 18.8 bn in Q1 FY12 & Rs 24.4 bn in Q2 FY11. This resulted in DD&A expense being 26% lower than our estimate. Tax rate for Q2 FY12 came in at 29.8% (33% expected) due to reversal of Rs 1.3 bn on R&D expenses being made tax deductible.
Consequently, net profit above expectations
Net profit at Rs 86.4 bn was much above expectations and was also up 111% sequentially. EPS for the quarter was Rs 10.1, against Rs 4.8 in Q1 FY12 & Rs 6.3 in Q2 FY11.
Upstream subsidy sharing expected at 57% for H2 FY12
The upstream sector’s share of the gross under recoveries, which was fixed at ~33% during FY08-10, had been increased suddenly to ~39% in FY11. Since our FY12 & FY13 estimates of gross under-recovery at Rs 904 bn & Rs 700 bn are not significantly lower than the gross under recovery of Rs 782 bn in FY11, we assume 39% of the gross subsidy burden to be borne by the upstream sector in perpetuity. Taking into account the fact that the upstream sector has shared 33% of the subsidy burden in H1 FY12, we expect the upstream sector to share 57% of the total under recoveries for H2 FY12 which will be a big negative for crude realizations and the stock price.
Outlook and Valuation
We believe the stock would react to news flow regarding the subsidy sharing pattern that would emerge over the course of this year and the price band that would be fixed for the FPO (expected in Dec 2011). We expect consolidated revenue & PAT to post FY11-13 CAGR of 8.9% & 9.7% respectively. We estimate EPS of Rs 30.9 and Rs 31.6 in FY12 & FY13 respectively. Our SOTP valuation for ONGC yields a target price of Rs 320. Our price target translates into EV/boe of $5.6/boe and FY12E & FY13E P/E of 10.4x and 10.1x respectively.

IPOs Expected : MCX & Kabirdas Motor - in November last week

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IPOs Expected : MCX & Kabirdas Motor  - in November last week

If markets remain stable....


United Bank of India Downgrade to HOLD :Emkay,

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United Bank of India
Downgrade to HOLD


HOLD
n     UNTDB’s NII (Rs6.2bn) marginally ahead of expectations. Net profit at Rs1.25bn was dragged by higher NPA provisions and tax outflow. Slippages at Rs6.2bn was a key -ve
n     Deposits were up 1.5% qoq; CASA ratio remains strong at ~40% levels. NIM expansion was aided by improvement in LDR and broad based loan growth
n     … however, with net NPL/networth at high 27%, tier-I CAR, adjusted for same, will fall to sub-7%. Resultant, growth rate is set to moderate. Factoring 16% loan CAGR over FY11-13E
n     Lowered our FY12/FY13 earnings estimates by 18%/21% by factoring in relatively higher credit cost, growth moderation and margin compression. Downgrade to HOLD with tp of Rs73

Hold Maharashtra Seamless; Target :Rs 353 ::ICICI Securities,

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P e r f o r m s   w e l l …
Maharashtra Seamless’ (MSL) Q2FY12 results were broadly above our
expectation primarily on the back of healthy sales volumes. The topline
came at | 577.7 crore (our estimate: | 503.2 crore), which was 41.6%
higher YoY and 20.7% higher QoQ. However, on the back of higher input
costs, the EBITDA margin declined 580 bps YoY and 170 bps QoQ to
19.6% (our estimate: 23.4%). The subsequent EBITDA stood at | 113.1
crore (our estimate: | 118.0 crore), which was 9.2% higher YoY and
10.9% QoQ. The ensuing reported PAT stood at | 81.2 crore (our estimate
| 74.7 crore), which was 1.4% higher YoY and 13.3% QoQ.
ƒ Higher operating costs lead to decline in EBITDA/tonne
Higher raw material cost has led to a decline in EBITDA/tonne of
both seamless pipes as well as ERW pipes (on a QoQ basis). The
EBITDA/tonne of seamless pipes  stood at | 14322/tonne (lower by
9% QoQ and 24% YoY) while that of ERW pipes stood at |
2860/tonne (lower by 5% QoQ but higher by 15% YoY).
ƒ Order book declines on a sequential basis
The order book of the company has declined sequentially by 21% to
| 556crore at the end of Q2FY12 (| 708 crore at the end of Q1FY12).
The export to domestic mix stood at 60:40 (in Q1FY12 it was 66:34).
V a l u a t i o n
At the CMP of | 330, MSL is discounting FY12E and FY13E EV/EBITDA by
4.1x and 3.7x, respectively. Due to  the sequential decline in the order
book position, we have reduced our EV/EBITDA multiple from 4.5x earlier
to 4.0x, thus arriving at our target price of | 353. We have assigned a
HOLD rating to the stock.

Private players chase premium :: Business Line

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With cost-consciousness and divergent distribution channels, more insurers are likely to make profits and the industry may head for brighter days ahead.
Life insurance sector has witnessed rapid growth in the past decade with private players entering the fray. Assets managed by the insurers have grown manifold in this period, even outpacing the mutual fund industry and the insurers have become a force to reckon with even in stock market. When the life insurance sector was opened up in 2000, the premium collected to the gross domestic product (GDP) was 1.77 per cent; this has risen to 4.6 per cent by 2009-10.
LIC, the only player in the life insurance sector in 1999-2000, collected Rs 34,897 crore that year. According to the Insurance Regulatory and Development Authority (IRDA), total premium underwritten by the life insurance sector was Rs 2,65,450 crore in 2009-10.
Although the topline of the insurers grew at double-digit till 2009-10, the bottomline of several private insurers are in the red, despite a decade of operation. The total accumulated losses of private life insurers was over Rs 20,143 crore by March 2010.
However, the silver lining is that according to the I–Save.com report, as many as 12 out of the total 23 insurers turned the corner and made profits for the year ended in 2010-11.

DISTRIBUTION

For any business, distribution is the key to success. Prior to 2000, LIC operated only through the tied agency (individual agents) model and individual agents continue to account for more than 90 per cent of the business currently. Private insurers too banked on individual agents to market their product, but over time they diversified their distribution channel to bancassurance (insurance sold through banks), brokers and corporate agents. Currently, tied agency accounts for just 50 per cent of the overall business of private players.
This is likely to go down further mainly on account of the regulatory changes which rationalised the commission structure for the agents. Recent IRDA guidelines that came into effect from July 2011 stipulate that agents which fail to achieve a persistency rate of 50 per cent will lose their licences. Two years from now, agents will have to ensure that at least three fourth of their policies sold in the previous year are renewed to qualify for a licence renewal.
This regulation will pave way for only serious agents to stay in the business. Going forward, the bancassurance channel is likely to contribute a chunk of new business premium. This, in turn, will reduce the operating expenses and may aid profitability for these companies.

REGULATORY CHANGES

Unit-linked insurance products or ULIPs are perhaps the most widely discussed and written about financial product. After their launch, the insurance industry witnessed phenomenal growth. However, IRDA has brought about many regulatory changes in this product.
Till the 2008-09 equity market crash, ULIPs accounted for more than 90 per cent of the products sold by some insurers, but due to stiffer regulation, volatile equity markets, cut in the agent commission and cap on charges for the ULIPs, the industry has been forced to reduce its dependence on ULIPs and it currently accounts for 55-60 per cent of the overall sales. Now, the product mix is slowly drifting in favour of traditional insurance products, which are yet to face the scrutiny of the regulator.

PROFITABILITY

After chasing the new business premium for several years, insurers have recently turned their focus on profitability rather than topline growth. The major reason for poor profitability was the higher operating expenses of life insurers. Agent commissions, generally perceived to be the lion's share of expenses, accounted for 6.85 per cent of the premiums collected while the other operating expenses accounted 10.85 per cent.
Life insurance companies' operating efficiency is measured by the ratio of operating expenses to gross premium income. According to the IRDA, in 2009-10, operating expenses of private life insurers was down to 20.86 per cent of the premium collected against 25.99 per cent incurred in 2008-09. Although the operating expenses moderated, the ratio remains in the band of 15-30 per cent for individual insurers.
Private insurers which have focussed on building distribution channels, branch offices and other infrastructure have had to bear higher expenses. Among the private players, SBI Life's operating expenses is among the lowest at 6.3 per cent.
In contrast to private sector insurers, LIC's operating cost was 6.58 per cent of premium in 2009-10 which is far lower than the international standard of 10-15 per cent. However with an average cost ratio of 21 per cent, other Indian private insurers are a long way off from meeting international norms.
By reducing operating costs, already eight of the 23 private players such as SBI, ICICI Prudential, Bajaj Allianz, Max New York Life and Aviva India have turned profitable in 2009-10. However, the sustainability of profits depends on persistency. Persistency is the per cent of policies that are continued for a specified period that varies between 13 months and 25 months. Persistency is denoted in conservation ratio.
The conservation ratio (renewal premium collected current year to total new business premium plus the renewal premium of last year) of top five private life insurers is, however, not encouraging and according to I–Save.com 2011 report, SBI Life's conservation ratio is at 47.9 per cent, Birla Sun Life's 56.3 per cent and ICICI Pru's, HDFC Life's and Bajaj Allianz's were all below 70 per cent.

WAY FORWARD

For life insurance companies, having multiple offices in metros is unnecessary since customer footfalls occur mainly for paying renewal premiums. After spending huge money on office infrastructure, several insurers are now moving towards rationalisation of the offices.
In the last two years, offices of the private insurers have decreased to 8,768 from 8,785. Since opening up of the sector in 2000, this is the first time that negative growth was observed in the number of branch offices.
Consolidation is visible in the insurance industry in the form of private players ceding stakes to foreign partners. The Bharti group has already reached agreement to sell its business to Reliance Industries.
On the other hand, Reliance Capital sold a 26 per cent stake in its insurance arm to Nippon Life for over Rs 3000 crore. Max New York Life sold 4 per cent stake to Axis Bank and had a marketing tie up.
After witnessing double-digit growth for most part of last decade, the industry witnessed negative growth in the early part of 2011. But the changes that will have the greatest impact on cost are the use of technology to offer products online and expanding the products mix by launching health insurance products.
Non-life insurance, which currently accounts for 0.6 per cent of GDP, offers great potential for life insurance companies.
With cost consciousness and divergent distribution channels, more insurers are likely achieve profits and the industry may head for brighter days ahead.

Insurance from Berkshire ::Business Line

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Making its India debut as the corporate agent of Bajaj Allianz Life Insurance, Warren Buffett's Berkshire Insurance is planning to launch its first product in India- an online term policy.
The popularity of online term plans is rising in India, as they are generally cheaper than policies sold by agents. Many private life insurance companies have already launched their online term insurance plans.
Skeleton services
Think ahead and note whether you'd need to go to the bank next week. SBI has warned its customers that a planned strike by its officers' federation could impact banking services on November 8 and 9.
With November 7 and 11 also being holidays in some States, the bank has asked customers to complete any important banking transactions ahead of these dates and said that it may operate ‘skeleton' services if the strike isn't called off before then.
Savings accounts earn more
Following the central bank's move to deregulate savings bank interest rates, a few banks have been prompt to hike their own rates on such accounts to attract new customers.
If you have accounts with any of these banks, it is an easy matter to transfer funds into them. Yes Bank, one of the first to act, hiked its savings account interest rate to 6 per cent.
Kotak Mahindra Bank now offers 5.5 per cent for savings deposits less than Rs1 lakh and 6 per cent for deposits above that sum. IndusInd Bank too has followed suit announcing interest rates of 6 per cent on deposits of over Rs1 lakh and 5.5 per cent on lower sums. SBI, sitting pretty on the largest savings deposit base, has said that it has no immediate plans to hike the interest rates it offers on its savings accounts.
Stamp duty relief
Here's a bit of good news. Property owners in Tamil Nadu who have their ownership documents locked up with the district authorities due to disputes about stamp duty have earned a reprieve.
The government has announced a special “Samadhan” scheme which allows property owners to settle such disputes and retrieve their documents. Disputes on stamp duty arise if the property is found to be ‘undervalued' relative to its market price.
The Samadhan scheme allows property owners to pay up two thirds of the difference between the duty paid and that demanded by the government, to settle the dispute.
Nominations please
The insurance watchdog, Insurance Regulatory and Development Authority (IRDA), has asked general insurance companies to honour claims on the compulsory personal accident cover given with their motor insurance policies.
Apparently, some claims were being refused on the grounds that nominee details were not filled up by the policyholder. Now, IRDA has directed the insurance companies to make sure that nominee details are incorporated in the proposal form.
Extending home loan tenure
Here's a sliver of light amidst all the gloom for home loan borrowers. State Bank of India has decided to extend tenure of home loans up to 30 years or till the borrower reaches the age of 70, depending on customer profile. Other public sector banks may follow suit.
Jewellery ‘vendor'
Its not just coffee or tea that you can get from a vending machine any more. Gitanjali Gems has launched a vending machine which dispenses gold coins and medallions. The machine can stock up to 36 different sizes. You can also choose between price points ranging from Rs 1,000 to Rs 30,000 and a variety of designs. Payments can be made through cash or even debt and credit cards.

Birla Sun Life Dynamic Bond Fund: Invest ::Business Line

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Rising interest rates and consequent decline in bonds prices dented the one-year performance of funds that invest in long-term debt instruments.
However, with the RBI indicating a likely pause to its interest rate hikes, the tide may soon turn. Investors with a three-year time frame can now consider adding debt funds with a longer portfolio maturity to their fixed income portfolio. Birla Sun Life Dynamic Bond Fund may be a good addition at this juncture.
Income and gilt funds can deliver negative or low returns when interest rates rise. However, with the yields on the benchmark 10-year government security now poised at 8.9 per cent, a three- year high, investments made now in long term gilts/bonds may face limited downside risk.
The Birla Sun Life Dynamic Bond Fund appears a good play in the above scenario, due to three factors.

FLEXIBLE AND ACTIVE

One, its flexibility to actively lengthen or shorten the maturity of its portfolio to deal with interest-rate risk. The fund has increased the average maturity of its portfolio from 1.6 years in March to 4.3 years in its latest October portfolio. The longer maturity may pay off as interest rates peak out over the next few months.
Two, the fund has actively invested in a mix of corporate bonds and gilts to take advantage of the widening or narrowing of spreads between the two.
In June 2011, corporate debentures took up 51 per cent of assets while certificates of deposit made up 18 per cent. In recent months, the fund has halved its exposure to certificates of deposit and added both cash and gilts.
A 23.5 per cent exposure to cash equivalents gives the fund the ability to add gilts or even lengthen the maturity profile further, if interest rates do plateau.

CREDIT QUALITY

Three, despite being actively managed,
The fund has stayed clear of instruments with doubtful credit quality. In the latest October portfolio, 59 per cent was invested in triple-A while only 11.9 per cent was in papers with AA+ rating. The focus on credit quality could become important in the months ahead as companies grapple with the lag impact of recent increases in interest rates.
A five-year track record of delivering a 9 per cent annualised return and the benefit of having a seasoned debt manager in Mr Maneesh Dangi are other factors in favour of the fund.

Indian Markets CLOSED today :Thursday 10th November, 2011 Gurunanak Jayanti

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Indian Markets CLOSED today :Thursday 10th November, 2011 Gurunanak Jayanti


Allahabad Bank Positive surprises on all fronts :Emkay,

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Allahabad Bank
Positive surprises on all fronts

ACCUMULATE

CMP: Rs161                                        Target Price: Rs200

n     ALBK results well ahead of estimates with NII at Rs13.2bn. Net profit at Rs4.9bn further aided by lower tax rate of 9%
n     The NII grew by 36%yoy to Rs13.2n driven by 28bps expansion in NIM’s, albeit advance growth remain moderate at just 16.6%yoy
n     Key highlight for the quarter was- significantly lower slippages at just Rs5.2bn. Mgmt guided for slippage to fall back to normal levels
n     Positively surprised by the substantial improvement in NIMs and lower slippage numbers. Maintain ACCUMUALTE rating with TP of Rs200

Watch Nifty Ø 10 Nov 2011:: IFCI research,

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Watch Nifty
 
Ø  Nifty made a sharp move down and is back near the lower range of 5200. Though Nifty does have a strong support around 5200, one should watch the levels of 5140-50 more closely. So far as the above level is held, there is no threat to the near term upmove to 5400. If however the level is violated, investors have to brace for a steep correction to 4900 and then perhaps 4700.

Ø  Nifty's support for 11/11 is likely around 5200, 5170, 5130-50 and resistance around 5300 and 5350.
 

10 Nov 2011:: Equity Buy/Sell (Technical View):: IFCI research,

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Equity Buy/Sell (Technical View)

Ø  The following scrips are good for accumulation :

  • ACC > 1245 ;                                     Can Bk. > 500 ( or near support of 470) ;
  • Ashok Leyland > 29 ;                        Bombay Dyeing ~ 400 and then 375-77 ;
  • HDFC > 690 ;                                     ITC > 216 ;
  • Kotak Bk. -near 480 ;                       Reliance Ind. ~855 ;
  • TCS > 1151.

CURRENCY:

Ø  Rupee has weakened and touched 50.33 against the $. Our first target is met and the next target is 51, 51/50 -52.

COMMODITIES:

Ø  Gold is exhibiting strength and has touched it’s all time high of 29029 and in the process met our target. We would like to wait for a close above 29000 for it to go on to 29500 and then 30000. One is advised to wait for a reaction to enter Silver, though it has moved up

Have strict stop losses