Sunday, February 12, 2012

BSE / NSE Weekly Review Feb 11, 2012

Key benchmark indices rose in the week ended 11th February 2012, as inflows from foreign
institutional investors (FIIs) remained robust. This was the 6th consecutive weekly gain. Trading
remained upbeat throughout the week. However, some profit booking emerged on Friday (10
February 2012) after disappointing industrial production data for the month of December 2011
dampened investor sentiment.

Industrial production rose a slower-than-expected 1.8% in December 2011, government data
showed on Friday, 10 February 2011. The growth in December 2011 was sharply lower than
5.9% growth in November 2011. Manufacturing output, which constitutes about 76% of industrial
production, rose 1.8% from a year earlier, the federal statistics office said.

India's January exports rose 10.1% to $25.4 billion while imports rose 20.3% to $40.1 billion,
leaving a trade deficit of $14.7 billion, Trade Secretary Rahul Khullar said on Thursday. India's
exports reached $242.8 billion between April and January, Khullar said, citing provisional data.
The BSE Sensex rose 0.8% to 17,749 in the week ended Friday, 10th February 2012 while the
S&P CNX Nifty rose 1.1% to 5,382. The rise in the broader indices was amplified. The BSE MidCap index rose 3.3% to 6,247 while the BSE Small-Cap index rose 3.1% to 6,891. The sectoral
indices sentiments were extremely positive with the Healthcare index being the only loser. BSE
Realty, BSE CD and BSE Metal were the largest gainers.

The BSE Realty index rose 5.8% to close at 1,887 levels. Among the heavyweights, DLF rose
marginally (0.2%) while Unitech and HDIL jumped significantly (12.9% and 18.0% respectively)
in the week. Shares in real estate companies were up on expectations of a pick-up in deal flows
and a fall in interest rates, which would benefit both builders and real estate buyers. Unitech
rose on account of pressure from the Norwegian government to survive Uninor, a venture by
Telenor and Unitech Ltd. Telenor, in which the Norwegian government has a ~54% stake, owns
nearly two-thirds of Uninor with infrastructure provider Unitech holding  the rest. Norway’s IT
minister, Rigmor Aasrud, met her Indian counterpart, Kapil Sibal, to discuss the Supreme Court’s
cancellation of licenses of telecom operator Uninor.

Consumer Durables (CD): 
The BSE CD index rose 5.8% to close at 6,169 levels. Among the heavyweights, Titan, Rajesh Exports and Gitanjali rose 5.3%, 2.4% and 5.5% respectively while Videocon fell 1.1%. TTK Prestige rose a whamming 38.9% in the week, establishing its spot among the large companies by market cap within the CD space. The company  clarified that it did not intend to exit the modular kitchen business but plans to expand it slowly after gaining experience. The company also has a plant coming up in Gujarat, which will add to the topline significantly.

The BSE Metals index rose 4.1% to close at 12,364 levels. All the industry majors were gainers. Tata Steel and Coal India rose 1.7% each while Jindal Steel, Hindalco and Sterlite rose 8.5%, 0.2% and 5.1% respectively. Tata Steel issued an encouraging future outlook after reporting 3rd quarter consolidated net loss of Rs 603 cr as  against net profit of Rs 1003 cr in Q3FY11. Turnover rose 13.79% to Rs 33103 cr in Q3FY12 over Q3FY11. With regard to future outlook, Tata Steel said softening raw material prices is expected to ease product-costing pressures from Q4FY12 onwards. Tata Steel expects steel demand in India to improve with RBI indicating progrowth monetary policy. Steel prices remain firm and with traditionally strong volumes in the fourth quarter and the company's profitability is  expected to improve.

The outlook for steel demand in Europe remains stable. Strengthening  steel prices in Europe and restocking will result in better margins of Tata Steel’s European operations in the coming quarters. Tata Steel’s South East Asian operations are expected to perform better with activities in Thailand coming back to normal. Reconstruction activities  will boost long products demand. Jindal Steel and Power plans to spend $300 million in developing new and existing mines in Africa. The move is part of the company's strategy to source coal assets abroad to meet raw material demand of its steel and power plants at home.

The BSE Bankex index rose 3.0% in the week to close at 11,987 levels. All the large players, namely ICICI Bank, HDFC Bank, SBI and Axis Bank, were gainers, rising 1.5%, 1.9%, 3.3% and 1.6% respectively. SBI recently said that the Government of India has agreed to inject approximately Rs 7900 crore into bank by way of preferential allotment of equity shares to help SBI achieve minimum 8% Tier I CAR by 31  March 2012. The government currently owns 59.40% of SBI. HDFC Bank hit a record high on Friday. A unit of Singapore state investment company Temasek Holdings Pte sold 1.59 crore shares of ICICI Bank through bulk deals on NSE for Rs 1472 crore during the week. Allamanda Investments Pte sold the shares in India's
largest private-sector lender by assets at an average Rs 924.05 per share in the week. Goldman Sachs Investments Mauritius mopped up 64.65 lakh shares in the bulk deal at a price of Rs 924 per share.

The BSE PSU index rose 2.5% in the week to 7,673 levels. ONGC, Coal India, NTPC and SBI rose 0.3%, 1.7%, 2.0% and 3.3%. As mentioned previously, the Government of India has agreed to inject money into SBI. NTPC paid an interim dividend of Rs 2,885.92 cr for the current fiscal. Net profit of the company rose 10% to Rs 2,130.39 crore for the quarter ended December 31,
2011 due to increase in coal prices.

Healthcare (HC): 
The BSE Healthcare (HC) index was the only loser in the week, falling 1.0% to close at 6,347. Among the giants, Sun Pharma, Dr. Reddy’s and Lupin were losers, falling 2.7%, 3.0% and 4.1% respectively while Cipla rose 1.2%. Lupin Limited is planning to invest $20 million in setting up a new manufacturing facility in Pune. Lupin will also launch a cancer drug, which is yet to go through the third clinical trial. It is expected to hit the market during the next financial year.

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