>DOLLAR INDEX

The Dollar index based on the available data show the fall has been a corrective pattern of A-B-C which can be converted into W-X-Y pattern with Wave W complete.

The current rise can be for Wave X.

Wave X will be a corrective structure with 3 wave pattern which can get carried up towards the 102 from current level of 80.50.

The above indicated Wave structure is valid till the low of 71 is not violated.

Alternative count structure can be more bullish that what was indicated above. Corrective wave structure gets complete at 71 with A-B-C structure and new up move and impulse has already began. Minor degree Wave 1 is complete and Wave 2 is in progress.

Dollar index moved down from 121.29 (2001) to 71(2008). In the same period of the world equity indices have shown a rise had made new highs during the same period broadly.

In the same period Crude Oil also showed a rally which had directly correlation to the equity markets.

In the same way HG COPPER on Comex showed a rally in the same period from 60$ to 426$. Only difference is that made a top six month later. Similar tendency has been seen in other metals.

Conclusion

On the whole, we can see direct correlation between the financial and commodity market against the dollar index.

Source: COMMODITIESCONTROL

>ROLLOVER ANALYSIS JUNE'09 (ANAGRAM)

LOWEST ROLL OVER SINCE MAY 2005

Wild swing was witnessed in the June series where at one point of time nifty was up by 8% during the first half of the series, only to retreat almost 12% from the high in the later half of the series and finally settled with a marginal loss of 2.2%. This muted dose came on the back of highest ever gain of 25% witnessed in the May series.

We have seen overall rollover of 74% as against 77% last month and last three months' average rollover of 76%. This Roll-over of 74% is at four year low - the lowest since May'05 when rollover of 72% was seen. We are starting the July series with a slightly lower OI of 109Cr shares as against 111Cr shares with which we had started June series. Even if we consider only stock futures, OI at the beginning of July series is slightly lower at 97.5 Cr as against 98.5 Cr indicating subdued confidence among the market players' in terms of rolling over of positions ahead of the budget which is going to be announced early next month.

LOWEST EVER ROLLOVER IN NIFTY

• LOWER OPEN INTEREST IN NIFTY OPTION SEGMENT: PUT WRITING IS SEEN AT 4200 LEVEL.

OUTLOOK FOR THE JULY SERIES- BE BEARISH ONLY BELOW 4200 LEVEL ON CLOSING BASIS : In a nutshell, considering aggressive put writing at 4200 level and subdued rollover in stock futures which in-turn indicates that there is a higher possibility of positions being built in the first few days of the series before we see any major correction. Therefore our advise would be to remain bullish till 4200 level gets broken on the downside, the level at which we have seen aggressive put writing. One more notable thing is the lowest rollover in Nifty futures coupled with higher Nifty future premium, which shows lack of confidence among bears to build short positions ahead of the budget. This lower short rollover can be a negative factor during the time of correction, as market will not get enough support from short covering unlike past few months.Any close below 4200 level would result into unwinding of long positions, which might drag nifty to even 3950-4050 level. On the higher side we advise booking profit in long positions around 4500-4550 levels, the level which consists of second highest OI among the Nifty July calls.

To see full report: ROLLOVER ANALYSIS

>REGIONAL VALUATIONS (CLSA)

DOUBLE BAGGERS

We asked our country teams which of mid- to larger-cap stocks under coverage could double in the next 3 years if business conditions normalise’. Our list of 15 is weighted towards companies benefiting from domestic or Asian-led recovery i.e. banks, regional airlines, steel, property and some manufacturers. Although with average market cap of US$11.6bn, these are not all Tier I names. Greater upside however comes precisely through emerging from clouds they may currently be under.

China/HK
■ Recovery to lead to EBITDA almost doubling for Air China coming 3 years.
■ Baidu’s DCF value on 13% discount rate estimated to rise to US$590 by 2012.
■ Current over-supply will ease over next two years leading to earnings recovery for Nine Dragons.
■ StanChart to get to 1.8x PB implied by 10% market cap to assets.
■ Hang Lung Prop disciplined whilst ambitious, only half way completing its HK$40bn China investment plan.

North Asia
■ Upside for Japanese auto manufacturers will doubling estimated for Nissan.
■ Fujifilm has strong upside from restructuring and potential improvement in ROE which should the stock above book over the medium-term.
■ Doosan Heavy on 8x EBITDA should double - leading nuclear plant contractor

India
■ 2.75x PB for FY3/13 would take ICICI Bank to Rs1,550 through consolidating loan book, improving liability-mix and life insurance breaking even.
■ SAIL’s production capacity increasing 70% and will see improved product mix.
■ Strong volume growth aided by Indian recovery could lead to doubling in price for JSW Steel on undemanding 5x EV/EBITDA.

ASEAN
■ SIA moving to 1.7x PB in upcycle would double as book value increases.
■ KasikornBank has above average ROE with upside as provisions decline and enjoying operational gearing from heavy investment in new platform.
■ 15x PER for 2012 will lead to doubling in stock price for United Tractors.
■ Olam been growing at 27% Cagr; recent capital points to more acquisitions.

To see full report: REGIONAL VALUATIONS

>DIVIDEND YIELD STOCKS (HDFC SECURITIES)

We present hereunder a table of companies that have announced dividends till May 2009 for FY09, for which dividend yield is 4%+ based on dividends for FY09 and those who have maintained or increased their dividend percentage over FY08.

To see report: DIVIDEND YIELD STOCKS