Tuesday, February 3, 2009


Equity markets – India fares better than Global counterparts!

The year 2009 had an action-packed start with the

government announcing a second stimulus package of

Rs. 200 bn along with additional easing of the

monetary policy. The Rs. 7000 Cr Satyam fraud dealt

a negative blow to the Indian IT industry and thereby

to the equity markets raising questions on the

corporate governance in India.

The third quarter results season has been a mixed

bag so far, with the topline growth meeting the

estimates (without inclusion of the Banking and Oil &

Gas sectors). Metal, Cement and Media sectors

largely contributed to dragging down the YoY

performance from 2008. Contracting EBIDTA

margins and hence the bottom line (net profit) threw

negative surprises at the market. Religare in-house

equity view states that the positive effect of lower

interest rates will begin to show in another couple of

quarters by when the margins are expected to improve.

plummeted by 1/3rd of its value while metal, banking

and capital goods were amongst the worst

performers during the month.

To see full report: Finvestor Focus Feb 2009

Emerging Leaders -Macquarie Asia Research

We kick off 2009 with the view that there will be substantial gains in a number of Asian small caps, but that the asset class as a whole will be in a trading market for most of the year. Aside from our usual small cap toolbox and top picks inside, we devote this issue to four themes that we believe will be key ones in 2009

Theme 1 – searching for the innovation paradigm in Asia
Theme 2 – keeping close eye on governance
Theme 3 – what once was large…
Theme 4 – who’s doing buybacks – CB and shares

Read the full report here

Reliance Industries Winners Curse-EdelCap

One of the key determinants of Reliance Industries’ (RIL) earnings visibility and stock performance will be the start of its gas production. However,production is subject to resolution of the legal dispute between RIL andReliance Natural Resources (RNRL). Ironically, amongst all the possible outcomes, RIL winning the case (currently in the high court) will be the worst for RIL investors since that could delay the start of gas production, assumingRNRL appeals in the Supreme Court (SC). Thus, an out-of-court settlement seems to be the likely outcome.

Despite medium-term risks from its gas business, our long-term view on the stock remains positive (especially given the potential exploration upsides). At INR 1,212, RIL trades at 10.0x FY10E EPS. We maintain our ‘BUY’ recommendation on the stock.

Read the full report here

Real the full report

City---Annual Outlook 2009

Amid unprecedented stress in the core of the global financial system, the world is now in the midst of a global recession. Major industrial economies are expected to contract well into 2009 as adjustments occur to raise the level of savings in these economies. The depth, scope and pace of this adjustment and the recovery of the financial sector are likely to remain important sources of uncertainty for the next few years.So even as the pace of economic contraction is expected to ease moving into the second half of 2009,growth is likely to remain below trend even after an expected recovery in 2010.

Read the Full Report here

>Daily Market Preview (MARWADI FINANCIAL)

# The Global concerns and Gloom at Davos summit was good enough to push
Indian markets down by 3% on first day of the week . The spiral effect of US
slowdown is taking toll everywhere as it was reflected in the Exports data(down 1.1%) released yesterday. However Domestic Auto Sales Volume was
encouraging and showing some sign of consumer demand pick up.

# We therefore recommend playing pure Domestic demand stories where
margin of safety is higher. We suggest buying on dips with strict stop loss of
2750 on Nifty and portfolio must be hedged with puts at these times.

To see full report: Market Preview 3-02-2009

>Daily Technical Report (MARWADI FINANCIAL)

Wall street perform mix, Asian market gain as a Australia, Japan steps up stimulus plan. On domestic

market is concern the New FM meet the bankers for 100-200Bps rate cut so that is the good for the financial

and banking counters. From that effects more liquidity in the system, secondary the interest also cut further

so the market immerge as a attractive investment avenue. So this all are the positive sign for the Indian

markets. For shorter period of time global effects and domestic key policy rate changes take the direction od

the markets.

On technical note market looks marginal positive opening and after positive opening it will take volatile

mode with positive bias. So in morning session we recommend to wait for lower levels buying opportunity

and after conformation of the trend make a fresh position with long view. In good fundamental counters

looks good buying interest so keep watch on that counters.

To see full report: Technical Report 3-02-2009

>India Computer Services (MERRILL LYNCH)

2H08 like 1H01, only maybe worse

# Deteriorating environment in 2H08; Indian vendors gain share.

Global IT and BPO outsourcing consultant TPI had its 4Q call on Tuesday.

2HCY08 was significantly weak on the back of few mega deals. Clients focused

on near-term profitability with propensity for short-term / small ticket deals. Market

share gains achieved by Indian vendors during 2008. Our proprietary CIO Survey

(carried out in Dec. by our US software team) also, not surprisingly, shows the

lowest IT budget growth expectation in the last two years, with IT budget expected

to decline 1.7%. Typically the IT budget growth expectations start optimistic and

deteriorate as the year progresses.

# 2008 showed growth, but dismal 2H08

Total Contract Value (TCV) for 2008 increased 5.6% to $89.4 bil. Impact of macro

turmoil in H2CY08 was clearly visible with TCV declining 22.1% to $39.1 bil in H2

vs $50.3 bil in H1. Both Q3 & Q4 were soft in terms of new contracts.

To see full report: ICS

>Why investors are rushing to commodities (RELIGARE)

2008 was a memorable year for commodities globally and commodity futures in particular in India. A quick review of the year gone by shows that the demand slowdown is firmly in place and the prices of key commodities are significantly down compared to a year ago.

Several commodities including crude oil, gold, aluminum, copper, soyabean, pepper and a host of others touched their all-time highs only to slide swiftly to then unimaginably low levels. The reason was clearly that prices rose so high so fast that demand was affected.

In many ways, this was a text-book case for pricing. High prices gave short-term profits to producers and traders but it was too much too soon. Consumers simply decided to stop buying and prices crashed. As we have seen umpteen times in recorded financial history, a downward spiral began with low prices chasing low demand.

Crude oil wiped out gains of five years within just five months and the concurrent fall in prices of other commodities has underlined the primacy of crude oil in setting prices across segments. Therefore the fundamental learning from the year has been that the commodity price edifice is built on crude oil prices and therefore it is very important that this key energy source is diligently tracked.

To see full report:Commodities