1. Financial focus
Weekly Newsletter
InFINeeti
ISSUE 5 2013VOLUME 1
TOP STORIES….…........1
MARKET ACTIVTY ….....2
ECONOMICS ....... …... 3
TERM OF THE WEEK ….4
TRADING CALLS ..…….5
A o n e s t o p g u i d e t o k n o w a b o u t a l l t h e
r e c e n t h a p p e n i n g s i n t h e f i n a n c e w o r l d
TOP STORIES : INDIA
MEGA DEAL:HOLCIM TO RAISE STAKE IN AMBUJA TO
61%
Swiss cement giant, Holcim has decided to simplify structure of its Indian subsidiar-
ies by increasing stake in Ambuja Cements from 50% to 61.39% and Ambuja, in turn
will buy Holcim's stake in ACC. Post the deal Ambuja Cements will own 50.01% stake
in ACC. In a statement, Holcim said it intends to streamline the ownership structure
of its operations in order to strengthen the existing platform and create value for all
stakeholders. The management stated both ACC & Ambuja Cements will remain
separate entities post the deal.
Financialfocus
RBI IMPOSES MORE CURBS ON GOLD IMPORTS
On Monday, RBI released revised scheme for import of gold. More curbs on gold
imports are likely to be announced in the coming days. RBI said at least 20% of the
imported gold should be used for export only and should be kept in custom bonded
warehouses. 80% of it must be used for entities in the jewellery business. The Apex
Bank also said that the new gold import norms will not be applicable for SEZ units,
trading houses. All auctions to be held under uniform price method. The new
scheme rationalizes import of gold in any form or purity.
WHY WARREN BUFFETT, POSCO ARE GIVING UP ON
INDIA?
Warren Buffett, Wal-Mart Stores, ArcelorMittal and Posco are pulling back on invest-
ments in India that they had announced with great fanfare. What's scaring foreigners
away? A rampant political dysfunction that has stopped India's progress cold. The
problem is an Indian government that won’t get out of its own way. The long debate
over foreign-investment limits says it all. In September 2012, Prime Minister Manmo-
han Singh’s government passed a law allowing big retailers to open stores directly in
India, yet no one has
2. Financial focus
Weekly Newsletter
InFINeeti
ASIAN-PACIFIC MARKETS CLOSE MIXED, WITH JAPAN
SLIDING
Asian-Pacific markets ended the week mixed as a rising yen sent Japan's Nikkei 225
tumbling 3% on Friday. Hong Kong's Hang Seng Index rose 0.3%. Australia's S&P/ASX
200 edged up 0.1%. China's Shanghai Composite lost 0.5%. South Korea's Kospi rose
0.1%. India's Sensex was down 0.4%.
SENSEX SNAPS 4-WEEK WINNING STREAK; PSU BANKS
DRAG
Sensex fell 56.57 pts. to end at 19748.19, Nifty at 5886.20, as PNB, SBI & BoI fell ahead
of RBI policy. Disappointing earnings continued to hurt the market sentiment with the
asset quality concerns impacting public sector lenders and reduction in discretionary
spending pinching FMCG companies. (Friday— 26th July)
TOP STORIES : WORLD
JAPAN STARTING TO WIN FIGHT AGAINST DEFLATION,
DATA SHOW
According to statistics, the Bank of Japan is starting to make progress in its effort to
end 20 years of deflation. Consumer prices rose in June at the fastest yearly pace
since November 2008. A year-on-year gain in the consumer price index, which doesn't
count highly volatile prices for food, was 0.4%. It was the first time consumer prices
rose in 14 months. The Tokyo core CPI, seen as a good indicator of what will happen
to prices across the country, rose 0.3 percent in July after a 0.2 percent increase in
June, in line with market expectations
ARGENTINA CHANGES APPROACH ON FOREIGN OIL IN-
VESTMENT
Rejecting its previously protectionist stance, Argentina is opening the Vaca Muerta
shale oil and gas field to foreign companies to halt a decline of energy production.
Argentina has relaxed regulations to clear the way for a production contract worth
$1.24 billion with U.S.-based Chevron. After years of nationalist rhetoric and protec-
tionist policies, Argentina is seeking to lure foreign investment to its Vaca Muerta
shale oil and gas field in an bid to jumpstart the country's energy sector and reverse a
decline in output.
CHINA MANUFACTURING ESTIMATE REVEALS SHARP
DECLINE
A gauge of China's manufacturing activity fell for the third consecutive month in July,
reaching an 11-month low. HSBC said its flash China Manufacturing Purchasing Man-
agers' Index "deteriorated at the fastest rate for almost a year in July, signaling one
of the steepest downturns seen since the 2008-2009 financial crisis," including the
sharpest drop in the employment sector in more than four years.
MARKET ACTIVITY
3. Financial focus
Weekly Newsletter
InFINeeti
ECONOMICS
U.S. AGENCY: WORLD SET TO USE 56% MORE ENER-
GY BY 2040
Driven largely by demand from China, India and other Asian countries, the
world's consumption of energy will jump 56% by 2040, the U.S. Energy Infor-
mation Administration said. "Rising prosperity in China and India is a major
factor in the outlook for global energy demand," said EIA Administrator Adam
Sieminski. "This will have a profound effect on the development of world
energy markets."
GM REPLACES TOYOTA AS WORLD'S TOP AU-
TOMAKER
For the first time in six quarters, General Motors has outsold Toyota Motor.
GM sold 2.49 million vehicles in the second quarter, compared with Toyota's
2.48 million. GM also has reported Q2 earnings that top analysts' estimates.
Toyota’s decline in Japan car sales shows a rare weak spot for a company
that’s forecasting its biggest profit in six years and whose stock has gained 54
percent this year
ECB LIKELY IS FINISHED LOWERING RATES, ECON-
OMISTS SAY
A poll of 70 economists indicates that the European Central Bank likely won't
reduce interest rates further, but it could take other steps to bolster the
economy. "Further ECB measures should concentrate on improving credit
conditions in the peripheral *Eurozone+ countries," said Kristian Toedtmann,
an economist at DekaBank. "These measures could be targeted at the *asset-
backed securities+ market. But it is difficult to say what exactly the ECB could
or will do." However, the survey was conducted before another one was
released suggesting growth in the Eurozone private sector
DID YOU KNOW?
Reliance Industries Ltd., one of India’s biggest conglomerates
earned close to INR 8000 Crores only through its treasury opera-
tions in the last fiscal (How many companies will ever reach that
turnover?).
It has cash reserves amounting to a whopping INR 83,000
Crores. The company’s treasury income accounted for 38% of its
annual net profit in Financial Year - 2013
FOREX RESERVES TOUCH LOWEST LEVEL IN 3
YEARS TO REACH BELOW $280 BILLON
Country’s forex reserves fell by almost $1 billion to reach the lowest level in
last 3 years. Total forex reserves $279.2 billion for the week ended July 19,
Reserve Bank of India (RBI) data showed on July 26th 2013. Last time forex re-
serves were at $278.2 billion in the week ended July 2, 2010. Rupee meanwhile
ended at a bit stronger on friday to end at Rs 59.04 against the dollar compared
to Thursday’s close of 59.11.
5. Financial focus
Weekly Newsletter
InFINeeti
Jubilant Foodworks
Period CMP Call Target
Stop
Loss
1 week 1150 Sell 1076 1200
Avneet’s Call
Last week FMCG stocks dragged the NIFTY lower by posting in line
expected results. The stock last week touched 1200 despite the bearish
mood in the market and lost the momentum by Friday. The stock is
already on downtrend with RSI close to 55 and reversal in (12, 26)
MACD is showing signs of weakness in the stock. Also the stock broke
the first Fibonacci support of 1160. With Q1 results coming on Friday,
we expect a short on the stock.
SKS Microfinance
Period CMP Call Target Stop Loss
1 week 104 Buy 112 53.50
The stock closed above the 10 day moving average last Friday. By
closing above the 10 day moving average the stock has broke the re-
sistance level and 12 day MACD is showing signs of reversal by al-
most crossing 9 day MACD. With huge volumes last week and strong
Q1 numbers, the stock is expected to touch 112-115 this week.
DrReddy’s Lab
Period CMP Call Target Stop Loss
1 week 2290 Buy 2400 -
The stock is making new life time highs for the past month. They have
launched the Alzheimer‟s Drug in US market on Saturday which would
boost its revenue and results expected on Tuesday to be better than the
last quarter. The US market is also expecting a good earnings season
this week. We expect the stock to hit new highs. “The call is high risk
& follows no technical indicator”.
6. Financial focus
Weekly Newsletter
InFINeeti
Bhushan’s Call
Dish TV
Period CMP Call Target Stop Loss
1 week 52.50 Sell 48.50 54
Dish TV has posted a net Q1 loss 30.4 cr, though the losses
have been trimmed Y-o-Y, the stock can still see some pres-
sure, owing to stressful margins. An engulfing Bearish pattern
has been formed on the daily candlestick chart, and the downward
momentum can take it to its strong support level of 47-48, and if
it breaks this support, it may slide down further. Going forward it
is a very good buy for long term when it starts realising the reve-
nues earned from digitization, and it starts recovering its invest-
HUL
Period CMP Call Target
Stop
Loss
1 week 660 Sell 620 680
HUL has posted a sluggish growth in sales , with volume growth
slowing at 4% from 6% Q-o-Q, and 9% Y-o-Y. The inclusion of
stock in FTSE triggered it to go towards 725 levels, but with con-
sumer demand slowing, the correction in FMCG space can be fore-
seen. The stock has formed a „Three Black Soldiers; Bearish pattern
and it can recede back to its support level at 580. Also in F&O
space there has been strong building in OI on short side, and the
volumes are also higher on the decline. The downward trend will
strengthen after it closes below its 20 DMA at 637.
Yes Bank
Period CMP Call Target Stop Loss
1 week 367.50 Buy 380 350
(Technical Call) The downward rally in Yes Bank seem to be
exhausted as all the negative news regarding the recent RBI poli-
cies has been discounted. The results have been quite excellent
with 38% in Net Profit, owing to higher interest income, robust
loan growth and improved margins. It has formed a Hanging
Man pattern on daily candlestick chart, and also RSI and Wil-
liams %R confirming the oversold levels. With market already
forming an opinion of RBI not decreasing of rates on its policy
announcement on 31 July, the downside is limited on this stock
Avneet Bhulania and Bhushan Kanathe are 2nd year students of IIFT (Kolkata campus)
Disclaimer : InFINeeti and IIFT do not take any responsibility regarding the authenticity of above calls. Please consult your financial
advisor before taking any investment decisions
Stock Name Call Target Price
Bajaj Auto Buy 2050
TARGET
HIT
BHEL Sell 168
Maruti Suzuki Sell 1390
Vijaya Bank Sell 41
InFINeeti Team
Aakanksha Hajela
Bhushan Kanathe
Kunal Maheshwari
Vaibhav Garg
Md. Umair Ansari
Last Week’s Stock Calls that hit
their target levels
