Hindustan Zinc - Volume concerns; visit note; Buy :Edelweiss PDF link

Hindustan Zinc (HZ IN, INR 125, Buy)

We recently met the Hindustan Zinc (HZL) management. Key takeaways are: (a) underground mining likely to commence by Q2-Q3FY13 at Rampura Agucha with no major cost increase; (b) FY13 capex guidance of INR15bn-18bn remains intact; and (c) effective tax rate to decline. We believe HZL will not be able to make up for lower volumes in H1FY13 (in contrast to its guidance) and cut our FY13E zinc volume 6.5%, leading to 5.6% cut in our FY13E EBITDA. While our FY14E EBITDA and TP are broadly unchanged, we downgrade our rating from ‘Sector Outperformer’ to ’Sector Performer’ due to lower volumes in FY13. Maintain ‘BUY’.

Unlock the value of your property; give it on rent and add to income:: ET

Real estate is one of the favourite investment avenues for investors with deep pockets. However, many of them only think about the future value of the property while making the investment, rue investment experts. That is because they don't even want to consider the possibility of renting out the place. If you want a proof, check the number of permanently locked houses in any new building in big cities. According to investment advisors, this is a bad strategy, as a real estate investment is expected to fetch capital appreciation as well as rental income to make up for the huge investment and its comparative illiquidity as an investment. Sure, rental yields are not much; but even at 4-6%, they are good enough to take care of the maintenance costs. The surplus, if any, is the icing. "With the increase in the cost of property and home loan interest rates, house rents are also going up," says Pankaj Mathpal, CFP, managing director, Optima Money Managers. He is hinting that many prospective buyers are postponing their decision to buy home and instead are settling for living on rent, pushing up rental in many pockets in the suburbs. "It is a good idea to rent a house than have it locked up. It gives some earnings from the property," he adds. But no amount of financial reasoning is going to convince some of these investors to give their property on rent.

FII DERIVATIVES STATISTICS FOR 05-Jul-2012

FII DERIVATIVES STATISTICS FOR 05-Jul-2012
	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	37869	938.08	30945	814.08	536896	13929.06	123.99
INDEX OPTIONS	288444	7612.78	281550	7443.68	1417156	37747.75	169.10
STOCK FUTURES	34226	963.31	46262	1318.31	913500	24940.33	-355.00
STOCK OPTIONS	20929	597.33	22655	644.61	31829	932.69	-47.28
						Total	-109.20

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Stocks in News : 5 July: Edelweiss

 Stocks in News

Multi brand FDI may get rolling after prez election (ET)
Bharat Forge, Triveni Engg among 4 cos in race to buy Shanthi Gears (ET)
S Mobility plans to hive off handset unit (ET)
M&M may bid for Hawker Beechcraft (ET)
Huawei sends legal notice to Videocon unpaid dues (ET)
Videocon plant to start production in 3-4 months (ET)
Fin Min wants 15% cap on bank bulk deposits (ET)
Deccan Chronicle`s debt downgraded as co defaults on repayment (ET)
K’taka for lifting ban on eight iron ore mines (DNA)
Dish TV raises pack, subscription prices (DNA)
State Street eyes stake in ICICI Bank custody arm (BS)
Grasim shuts staple fibre Nagda unit (BS)

FII & DII trading activity across NSE and BSE 05-07-2012

Category	Buy	Sell	Net
	Value	Value	Value
FII	2659.08	2229.86	429.22
DII	995.17	1198.2	-203.03

 

 

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The Absolute Return Letter - July 2012

"This month's Absolute Return Letter picks up on the question we left hanging in the air back in May - is Asia a potential re-run of Europe? Although policy rates appear to be dangerously low, and thus encouraging further borrowing, Asia has come a long way since 1997 and there is no immediate risk of a financial meltdown. Australian property prices and commodity prices - in particular crude oil prices - are more likely 'credit event' candidates in our opinion.

Enjoy the read and the summer. Back in September."

Link to the newsletter

http://www.arpllp.com/core_files/The_Absolute_Return_Letter_0712.pdf

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Category-Wise Turnover 5-Jul-12

Trade Date	Category	Buy Value in Rs.Crores	Sell Value in Rs.Crores
5-Jul-12	Mutual Funds	119.42	15.47	103.95
5-Jul-12	Proprietory Trades	31425.21	31775.50	-350.29
5-Jul-12	Others	30642.40	30286.86	355.54
Notes :
1.  Buy / Sell value at the end of day:
Options Value (Buy/Sell) = Strike price * Qty
Futures Value (Buy/Sell) = Traded Price * Qty
2. Others exclude FIIs, Mutual Funds, Proprietory Trades

Havells India -Management Meet: ICICI Sec PDF link

Havells India -Management Meet

Motogaze Preview July 2012: ICICI Sec PDF link

Motogaze Preview July 2012

Gilts unfazed by lack of OMO; LAF well within comfort zone •Edelweiss

Gilts unfazed by lack of OMO; LAF well within comfort zone
• The bond market seemed surprisingly unconcerned by a second successive week without
OMO purchases. The market was abuzz with rumors of withholding tax removal while
sizable FII limit auction also contributed to the positive sentiment.
• The 10-Y benchmark opened flat but touched a low of 8.15% during the day and ended
the day at 8.16% vs 8.18%. The next two sessions are expected to be cautious as
participants await the outcome of the auctions following last week’s disappointing
cutoffs.
• The demand at the FII debt limit auctions was significantly lower than the amount
available on offer in both categories – government long term & corporate long term
infrastructure.
• OIS rates ended slightly down as risk appetite waned and traders looked forward to the
ECB’s interest rate decision and US non-farm payrolls data. The 1-Y OIS ended the day at
7.76-7.82% vs 7.80-7.87%, while the 5-Y OIS ended at 7.18-7.24% vs 7.21-7.27%.
Non-SLR Market
NABARD placed 1M CP worth INR 15bn @ 8.70%. HDFC Limited placed 3M CP worth INR
7bn @ 9.23%. TMFL placed September Maturity CP worth INR 1.5bn @ 9.15%. HDFC Bank
placed 1Y CD worth INR 10bn @ 9.40%.
Money Market
Borrowing at the LAF window fell sharply with liquidity injection falling well below the RBI’s
comfort level of INR 650bn. The LAF borrowing was at INR 484bn and further dims hopes of
an OMO if these levels sustain. This improvement in liquidity was evident in the moneymarket
rates where the call WAR was at 8.16% vs 8.21%.

Kotak Mahindra Bank: ICICI Sec PDF link

Kotak Mahindra Bank -Update

National Pharma Pricing Policy Market based pricing :: Centrum

National Pharma Pricing Policy

Market based pricing

Drug pricing is a very complex and sensitive issue as it affects the masses. The Government aims to improve the availability of essential drugs at affordable prices and has plans to increase the number of drugs from 76 in DPCO to 348 under NPPP. This would increase the span of price control from ~25% to over 60% of drugs. The policy has suggested market based pricing mechanism from the currently used cost based pricing mechanism to arrive at a ceiling price. This would simplify the process and make it more transparent. However, there is stiff opposition from the NGOs and traders to the new pricing mechanism. The policy is under discussion among the Group of Ministers (GoM) and will be presented in the Parliament for discussion and approval.

m  NPPP has recommended exemption of products with price of

m  Traders are likely to lose more than manufacturers due to increase in products under price control from 76 to 348 and margins will also get lowered. Moreover, the price of leader brands is likely to reduce leading to lower margin for the trade.

m  Among the listed companies Ranbaxy Labs, Novartis, Zydus Cadila and Dr. Reddy’s Labs are likely to be adversely affected. Among unlisted companies, Alkem, Mankind, Abbott Healthcare and Emcure are likely to get affected due to the provisions of NPPP.

m  Among listed companies Merck, Sanofi Aventis and J.B. Chemicals are likely to benefit. Among the unlisted companies, Cadila Pharma, Apex, Blue Cross and Anglo French are likely to benefit.

m  The effect of proposed NPPP would be around 2.8% at PBT level to the pharma industry. The effect on top 20 selected pharma companies would be 3.2% at PBT level. We will come out with a detailed update once the policy is approved by the Parliament.

Global events trigger risk-on: Edelweiss Research PDF link

Sentiments in global equities recovered in June after a sell-off in May, with Indian equities placed among the outperformers. Favourable outcome of Greece elections and some effective measures taken in the EU Summit buoyed the global equities. Domestically, hopes of policy action firmed up as PM took additional charge of Finance Ministry. Going ahead, market is likely to take cues from government action, progress of monsoons and forthcoming earnings season. We anticipate overall sales growth in Q1FY13 to moderate further to ~16.5% from ~19% previously but importantly, we expect improvement in EBITDA margins as in the slowing demand scenario, businesses adjust by shifting focus from growth to profitability through cost rationalization. 

ITC Limited: ICICI Sec PDF link

ITC Limited -Event update

Edelweiss Technical Reflection (ETR): 5 July

Edelweiss Technical Reflection (ETR)

Nifty is undergoing a period of consolidation following the sharp rally on Friday as it traded in a tight range for the third consecutive session. Yesterday’s trading was confined to the previous day’s range; however the index managed to close above the psychological 5300 barrier. The activity continued to be more pronounced in the broader markets that are playing catch-up to the frontline index which is taking a pause before resuming its journey northwards. Market breadth continues to be in favor of advances (A/D ratio of 2:1), and the volatility has dropped down near to the yearly lows at 18.27 on the India VIX indicating a benign risk environment. Momentum oscillators are bullish in the short-term, but are overbought in the immediate near-term indicating a phase of sideways correction to continue before moving higher. As per the overall structure we expect Nifty to test the 5440 levels before witnessing any meaningful correction and suggest maintaining a stop-loss of the 10-DEMA of 5213.
Trend among the sectoral indices was mixed as the high beta space was favored, whereas the defensives took a back seat. Metals (+2.12%), Realty (+1.91%) and Cap Goods (+0.63%) were the top gaining indices; and Oil & Gas (-0.56%), FMCG (-0.47%) and IT (-0.38%) indices underperformed.  For the third day in a row, the broader indices managed to outperform the frontline peer with gains of 0.87% and 0.88% for the Mid-cap and Small-cap index respectively.


Bullish Setups: TATA, GSPL, ICICIBC, PWGR, DLFU, ADE
Bearish Setups: TTMT/A

HDFC Prudence Fund: Invest : Business Line

Dish TV - Sur-price hike to lit up ARPU :Edelweiss PDF link

Effective July 1, 2012, Dish TV has hiked prices of its ‘Rest of India’ subscription packs by INR20 each. As a result, the price of its popular base pack will increase from INR180 to INR200 (an increase of 11%). We are surprised by the quantum of the price hike especially since the company’s ARPU growth guidance for FY13 was only ~2%-3%. We expect the hike to lead to an increase in ARPU by INR5-INR6 in couple of quarters. Sustained rupee appreciation as seen during the past few days and digitisation will be beneficial for Dish TV. Maintain ‘BUY’.

Sales Traders Commentary : 5 July: Edelweiss

Sales Traders Commentary

On Wednesday, the Indian equity market ended a volatile session marginally higher. While metals, realty, consumer durables gained ground, oil & gas, FMCG, healthcare and IT declined.
While the Sensex closed at 17462, up 37 points, the Nifty jumped 15 points to end the day at 5302.
Major gainers were Sterlite Industries (India) (5.27%), Jindal Steel & Power (3.37%), Maruti Suzuki India (2.56%), Bharti Airtel (2.19%), State Bank of India (1.85%) and Tata Steel (1.45%).
Major losers were Oil & Natural Gas Corporation (1.68%), Dr. Reddy`s Laboratories (1.57%), Wipro (1.47%), Hindustan Unilever (0.98%), Coal India (0.79%) and Infosys Technologies (0.66%).
The Metal index jumped 2.12%. Major gainers were JSW Steel (4.42%), Jindal Steel & Power (3.37%), Hindustan Zinc (3.11%), Bhushan Steel (2.15%) and Hindalco Industries (1.33%).
The Realty index gained 1.91%. Major gainers were Anant Raj Industries (4.65%), Indiabulls Real Estate (2.38%), D L F (1.73%), D B Realty (0.67%) and Godrej Properties (0.32%).
The Consumer Durables index was up 0.68%. Major gainers were Blue Star (12.56%), Whirlpool of India (10.18%), T T K Prestige (2.14%), Rajesh Exports (1.43%) and Gitanjali Gems (1.07%).
The Oil & Gas index slipped 0.56%. Major losers were Hindustan Petroleum Corporation (1.68%), Oil & Natural Gas Corporation (1.68%), Indian Oil Corporation (0.96%), Bharat Petroleum Corporation (0.88%) and Oil India (0.54%).
Major gainers in the mid–cap space were Amtek Auto (7.13%), Alstom Projects India (2.92%), Aban Offshore (2.81%), Alok Industries (0.84%) and Amara Raja Batteries (0.05%).
Major gainers among small caps were Action Construction Equipment (3.33%), A2Z Maintenance & Engineering Services (1.64%), Trident (1.2%), Aarti Industries (0.71%) and A B G Infralogistics (0.55%).
Globally, Asian indices ended on a mixed note, while European indices were trading in the red

Oil and Gas - Crude nosedives on demand-supply imbalance; sector update :Edelweiss PDF link

Brent corrected a sharp 13% in June, averaging USD97/bbl, on worsening of the EU funding situation and weak demand. The INR also depreciated 3.0% against USD. Indian complex GRMs and Singapore GRMs declined USD2.4/bbl and USD1.5/bbl, respectively, due to fall in gasoline and naphtha cracks. Higher fuel oil cracks led to reduction in complex-simple spreads. LPG under-recoveries eased 23.0% MoM to INR277/cylinder due to lower LPG prices in May. Petrol, diesel and kerosene under-recoveries averaged INR(1.4)/ltr, INR10.0/ltr and INR29.8/ltr, respectively. Top Picks: Large Cap—BPCL, ONGC and RIL; Mid Cap—IGL and PLNG.

OnMobile Global Ltd.: ICICI Sec PDF link

OnMobile Global Ltd. Update

Index funds vs direct stock investing: Business Line

Many of you who invest in equity buy stocks directly. In this article, we discuss why you should consider buying index mutual funds instead. Our argument applies to you whether you are a mass-affluent investor or a high net worth individual (HNWI).

July 5: Morning News (click on link to read article) IFCI Financial Services Limited

Morning News (click on link to read article)

Economic Times		Business Standard
Ø  Mauritius gets ready to rejig tax treaty with India Ø  Multi brand FDI may get rolling after prez election Ø  Triveni, Bharat Forge shortlisted to buy stake in Shanthi Gears Ø  Govt to accept bids for spectrum auctioneer till July 20 Ø  Eurogroup may decide on Spain rescue on July 20 Ø  Mobile phone subscriber base inches to 929.37 mn		Ø  State Street eyes stake in ICICI Bank custody arm Ø  Rupee snaps four-day rally, FII debt limit sale eyed Ø  FIIs net buy Rs 239cr, DIIs net sell Rs 162cr Ø  RBI may relax norms to revive microfinance industry Ø  Prime Focus eyes $150 mn in US share sale Ø  KEC International bags orders worth Rs 795 cr
Business Line		Mint
Ø  Current account deficit a major cause for rupee fall: Gokarn Ø  FMC hikes margin on turmeric futures Ø  Faced with tough times, infra firms re-think projects, finances Ø  Delayed rains hit NHPC’s generating capacity Ø  MRPL keen on getting phase-III started by Dec Ø  Dish TV hikes rates for subscription packs		Ø  Govt may earn over Rs 1 trillion from telcos Ø  Diamond pays first-mover penalty in Libor investigation Ø  L&T Construction secures Rs 1,523 cr orders in June Ø  JSW Steel to return to normal capacity in 2 months Ø  Karnataka recommends approval of 8 iron ore mines Ø  HDFC warrants rally 86% on strong HNI, institutional demand
Financial Express		Financial Chronicle
Ø  Coal India may not be able to seal FSA at board meeting on July 10 Ø  RBI on monsoon watch for policy review Ø  Power exchanges: Electricity rates zoom Ø  MakeMyTrip eyes 30% revenue growth Ø  France slaps ¤550-m tax on oil sector		Ø  Govt extends 1 % housing loan interest scheme by 1 year Ø  DLF returns to its roots in property downturn Ø  Major global banks confident of tiding over financial crisis Ø  TCS regains most-valued status, pushes ONGC to second slot Ø  Truck sales fall 19% on weak economic growth

                                                                                                                                       

(Click on link to view article)

Thanks and Regards

IFIN: IFCI Financial Services Limited