Indian Housing Price Index
Thursday, March 20, 2008
The first Housing Price Index data as a part of the Indian Economic Survey and provided by the National Housing Bank is as published here. Year 2001 was chosen as the base year for the statistics and is calculated only until 2005. Bangalore / Bengaluru has seen the highest rise in Realty Prices between 2001 and 2005. Yes, it is only upto 2005, further data is being collected and analyzed. Only Delhi, Mumbai, Kolkatta, Bangalore and Bhopal were analyzed. You see how the Index has risen over 5 year period in all the above mentioned cities.Delhi City - 100, 106, 129, 150, 201
Mumbai Metro - 110, 116, 132, 149, 178
Greater Mumbai City - 100, 119, 136, 159, 198
Mumbai Others - 100, 114, 130, 141, 163
Kolkata Metro - 100, 115, 129, 148, 172
Kolkata Muncipal - 100, 120, 136, 159, 192
Bangalore City - 100, 133, 170, 224, 275
Bhopal City - 100, 120, 136, 154, 179
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Published by DalalStreet Business @ 6:47 PM IST.
Essar Oil - Winner from Ruias
Tuesday, March 18, 2008
Finally we have something from the House of Ruias for Indian investor that is worth mentioning. IDFC-SSKI / Sharekhan has initiated coverage on Essar Oil Ltd with a BUY rating.
Essar Oil (EOL) is on its way to becoming a vertically integrated oil company with significant presence in E&P, large presence in refining and a commensurate marketing infrastructure. A timely investment in expanding its refining capacity by ~3x to 34m tonnes and upgrading its complexity to take advantage of the global tightness in refining would be the biggest value creator for the company.
Given the tight supply, EOL's capacity expansion (3x by 2010E) and complexity upgradation from 6.1 to 12.8 (among the top 5% globally) come at an opportune time. The superior refinery configuration would enable EOL to leverage the emerging complex refining environment. Also, EOL has surmounted funding issues, which had earlier led to a long delay in commissioning of the existing 10.5m tpa refinery.
EOL holds two development and 10 exploration blocks, five of them overseas. Reserves stand at a modest 80.5m boe of oil in Ratna R series.
Essar Oil is expected to report an EPS of Rs 3.6 for FY2009 and Rs 5.7 for FY2010. SSKI has set a 2 year price target of Rs 414 / share on Essar Oil Ltd.
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Published by DalalStreet Business @ 2:44 PM IST.
Forced Bear Market in India - Part -1
Monday, March 17, 2008
The Sun has finally set in the world's second fastest emerging economy, India, blame it on the American sub-prime mess. With today's fall the Long Bull Phase in India has come to an end. Insights from the three big bear markets of the past 15 years should be useful tools for investors if they have to tackle another bear market in the coming months.The market's decline phase is usually shorter than the bull market's rise but post the fall, bear markets witness a protracted period of sideways movement that can be quite painful. There are no predictable patterns in sector performance (i.e., the sectoral winners differ in each bear market just the way each bull market is built around distinct sectoral themes). Bear market rallies tend to be quite powerful, but are meant to be sold and not bought.
This bear market could be different from the previous bear markets in at least one way: We are unlikely to get the extended sideways movement in share prices after the bear market bottom is established. This is because fundamentally India is very different now than what it has been over the past 15 years. This also means that the time scale for any prospective bear market may be compressed compared to the past. However, this does not mean that the decline will be smaller.
Morgan Stanley in a report said, Investors should be prepared for close to a 50% haircut from the top. Based on residual income model, a bear market could take the BSE Sensex to 11022, slightly less than a 50% decline from the top.
In the next part we will analyze the past bear markets and strategies and recommendations for the future.
Labels: End-of-Bull-Market
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Published by DalalStreet Business @ 1:33 PM IST.
American IT on Diet
Tuesday, March 11, 2008
Lehman Brothers head of Global Outsourcing believes that American IT companies are on a diet but they still believe outsourcing will save significant cost. Key take aways are as follows,- IT investment has become strategic and necessary for the competitiveness of the firm's business. Hence, it will continue to be built out, even in this environment.
- Significant benefits (including costs) remain for offshoring because costs in India and China are still less than one-third of the costs in
western countries. - Likely to offshore even large, complex projects and use the savings to invest more in new technology.
- China fast emerging as an important alternate offshore destination after India due to lower costs, geographical proximity (to Japan and Hong Kong) and diversification of risks.
- Do not see any change in our strategic outlook unless things become really bad and the firm wants to stop investments in IT.
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Published by DalalStreet Business @ 12:33 PM IST.
Morgan downgrades ICICI Bank
Monday, March 10, 2008
India's worst bank - ICICI Bank just a while ago was downgraded by Morgan Stanley from Overweight to Equalweight. Our Analyst on the 5th of March wrote asking if ICICI Bank was hiding the facts of sub-prime and it appears to be so after reading the Morgan Stanley report.Nearly 55% of ICBK's loan growth comes from its international loan book, which is wholesale funded. Credit spreads for ICBK have spiked, which will impact loan & fees income growth in F2009.In addition, losses on investment book have risen. ICBK will have to invest further capital in subsidiaries - if credit markets remain weak. Banks cannot put more than 20% of equity in their subs and ICICI is close to that limit.
Valuations attractive compared to private banks but unlikely to outperform given uncertainties. Despite the stock having corrected from Rs 1,450 levels [see price chart above] the stock is unlikely to outperform until capital and credit markets improve – it has the maximum leverage among larger Indian banks to these markets.
This rating on ICICI Bank Holds good until credit and capital markets improve or if RBI starts following a softer monetary policy.
Morgan Stanley has cut the target price of ICICI Bank from Rs 1,575 to Rs 950 on a FY2009 EPS estimates of Rs 44.
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Published by DalalStreet Business @ 12:26 PM IST.
BSE Sensex Constitutents + Weightage
Saturday, March 08, 2008
We are providing the BSE SENSEX Constitutents and Weightage.- ACC - 0.62 %
- Ambuja Cements -0.81 %
- Bajaj Auto - 0.85 %
- Bharti Airtel - 6.38 %
- BHEL - 4.43 %
- Cipla - 0.70 %
- DLF - 5.01 %
- Grasim - 1.14 %
- HDFC - 1.14 %
- HDFC Bank - 3.33 %
- Hindalco - 1.08 %
- Hind Unilever - 2.23 %
- ICICI Bank - 4.44 %
- Infosys - 3.66 %
- ITC - 3.21 %
- Larsen & Toubro - 3.90 %
- Mahindra & Mahindra - 0.73 %
- Maruti - 1.21 %
- NTPC - 6.81 %
- ONGC - 9.14 %
- Ranbaxy - 0.73%
- Reliance Industries - 14.62 %
- Reliance Communications - 5.02 %
- Reliance Energy - 1.34 %
- Satyam - 1.27 %
- SBI - 5.20 %
- Tata Motors - 1.16 %
- Tata Steel - 2.52 %
- TCS - 3.71 %
- Wipro - 2.71%
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Published by DalalStreet Business @ 3:44 PM IST.
SEBI to Investigate Ambani Companies ?
Friday, March 07, 2008
The new SEBI chief, Chandu Bhave is silent about his actions but according to reports, he has taken up the investigation of Ambani companies [Anil & Mukesh] about the exponential rise in group company stock prices.
Companies controlled by Mukesh Ambani likely to fall under investigation are,
Reliance Industrial Infrastructure Ltd - Stock price rose from Rs 380 to Rs 3,500 and has collapsed to Rs 1,150.
Anil Ambani has lot of small companies whose share prices sky rocketed.
All the above Anil Ambani controlled companies are hammered on the bourses today. SEBI is likely to investigate the stock price movement in the following companies controlled by Anil Ambani,Reliance Natural Resources - The stock jumped from Rs 25 to Rs 250. This company doesn't even have any operations. Stock has now crashed Rs 100 levels.
Reliance Capital: Shot up from Rs 900 levels to Rs 3000.
Adlabs Films: Shot up from Rs 400 levels to Rs 2000 and crashed to Rs 600 levels.
One more company SEBI should consider investigating is Jai Corp Ltd, controlled by Anand Jain whose price shot from Rs 80 to Rs 1500 and is now in 5% downward circuit at Rs 717.
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Published by DalalStreet Business @ 2:59 PM IST.
Bumper Offer for Alembic Glass
Wednesday, March 05, 2008
One of our readers and long term investor on our forum is seeking to BUY shares of Alembic Glass Ltd. Alembic Glass Ltd is de-listed from the Bombay Stock Exchange. Its last traded price was Rs 2,888. [Verify it on BSEIndia] However, the investor is willing to pay up to Rs 10,000 a share of Alembic Glass LtdYes this is a great bail-out opportunity for investors holding shares of Alembic Glass Ltd. To consider your request, please send a scanned copy of the share certificate if held in physical form. If you are holding in DEMAT, then kindly send FULL NAME + DP ID + DEMAT A/C No. Payment will be made in Cash or DD.
Leave a comment here or contact nascentnet @ yahoo . com
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Published by DalalStreet Business @ 12:01 AM IST.
2-Wheeler - The Road Ahead
Tuesday, March 04, 2008
Two-wheeler majors' Feb sales declined c10%Y/Y - motorcycle sales declined 10%, due to subdued demand and a fairly challenging base effect. Hero Honda and Bajaj's motorcycle declined ~5-8% Y/Y, whilst TVS' motorcycle sales de-grew ~34%.
The latest launches over 3Q were Hero Honda's 'Hunk' (a 150cc bike that is positioned against Bajaj's Pulsar and TVS' Apache). Within the 125cc category, TVS' Flame and Bajaj's XCD125 were the key new models.
The recent reduction in excise duties to 12% from 16% on both 2- and 3-wheelers has been passed on to customers - Hero Honda has reduced prices by Rs 1,300-2,400 to pass on the excise benefits to customers. Bajaj Auto has just a while ago informed us that it has reduced Motorbike prices by upto Rs 3,000.
Volume growth should improve over FY09-10E, given a) reduction in product price points due to tax benefits, and b) higher disposable incomes due to lower tax rates. Financing to the sector remains a concern at this juncture, with financiers continuing to shy away.
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Published by DalalStreet Business @ 2:56 PM IST.
ITC - Excise Hike Steeper Than Expected
Saturday, March 01, 2008
In 2008-09 budget, excise duty on non-filter cigarettes has been increased - for non filter plains, excise has gone up from Rs0.562/stick to Rs1.323/stick, whereas that for micros has gone up from Rs0.168/stick to Rs0.819/stick. Excise on filter cigarettes has not been increased; however, the overall weighted excise duty increase for ITC works out to 16%.Micros and plains constitute 20% of ITC's revenues. In the new excise structure, duties on plains will be higher than the RSFT cigarettes. We believe ITC is better off exiting the plains segment and introducing an RSFT brand at a lower price. Currently, plains are priced at Rs1.5-1.75/stick, whereas micros are priced at Rs2-2.5/stick.
Smaller players, like VST and GPI, which mainly manufacture plains and micros and have a 15% overall market share may find it tough to pass on the excise hikes. We believe that larger players like ITC can cross subsidize the non-filter lower end cigarettes and will gain market share from the smaller non-filter players.
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Published by DalalStreet Business @ 12:56 AM IST.