Tata steel: Rs.645:
Exercise caution. Now hold or sell.
Reliance industries.(Rs.1001) Target Rs.1050/-
The rights issue in East india hotels will help reliance to reduce its purchase value in EIH to almost market price of EIH. Entering in hotel business and expanding it globally is the vision of reliance thus expanding its growth laterally in many sectors to offset any weakness in any one sector. This is a good management practice and investors will be benefited by it.
Expected good refining margins. Expected good half yearly earnings.
Crude price may increase at any time. It is better than ONGC as Govt may allow ONGC to make loss in order to gain votes. Due to Shale gas companies purchase will help reliance to achieve very good growth path. In India, it will be leader in shale gas contracts as it is the one which joined bandwagon of shale gas companies recently compared to others who are just thinking to join. So invest and wait for just 6 months to get results.
Don't miss to purchase it now thus not repenting later.Really reliance is cheap at this price and Mukesh Ambani is just like his father to preserve investors networth. It is a suppressed stock. All finance consultants agree on this.If gas price increase, it will shoot up. Gas price is likely to stabilise between $80 to $100 as economy is slowly limbing back to normalcy.
The government is also planning to raise the price of state-administered, or APM, gas sold to sectors other than power and fertiliser by over 10 per cent to $5.25 per million British thermal unit (mBtu).The proposal to hike the price for non-power and fertiliser consumers to $5.75 from $4.75 per mBtu is awaiting approval at the highest level and the nod may come any day now.
ONGC: Buy:
Same as above. Also good interim dividend declared Rs.18/- per share for which record date will be 22.12.10
Cairn india: Open offer will be increased soon to rs.405/- to induce all miniority share holders. So buy.According to Indian market norms, a rival offer by ONGC against the offer of Vedanta has to be made within 21 days of the open offer being issued. But the state-run explorer ONGC still can make a counter-offer or exercise its claimed pre-emption right in certain properties of Cairn India before the extraordinary general meeting called by Cairn Energy Plc on October 7, to ratify the sale to Vedanta. If the company chooses to do so, ONGC will have to approach the Cairn Energy management before October 7 and, upon acceptance of its offer by the board, go to market regulator Sebi to stop Vedanta`s open offer for Cairn India shares to be launched on October 11.But it appears that open offer will sail through and revised offer will be made before Oct 7 by Cairn energy through Vedanta for Rs.405
Bank, reality and software stocks- sell.
Rupee appreciation, expected reduction in growth targets will pull down software stock price. So better to exit now and re-enter at lower levels. Nifty may hover between 5900 to 6000 as domestic institutions and retail investors will step in and replace FII soon. Bringing back ELSS to all people in savings plan will help market to enthusiaze public to finance share market and replace FII thus removing the fear of RBI. Finance ministry should look into it.
Mahindra Satyam: Sell
It appears that the results will not be good one and also delisting from overseas bourses due to non-submission of accounts will be bad for this share.
For reality also, removal of benefit of income tax concession for repayment of principal from 80 C negatived the reality stocks. This is not a good step in Direct tax code to be implemented soon. DTC meticulously planned to remove this benefit from tax payers hand and plan to increase the reveneue of Govt. But it dented the real income in the hands of salaried people and also dent on reality stocks as demand for houses will fall as there is no tax benefit from DTC implement date. Govt should re-consider and reinstate the benefit so that reality sector will shine. Till such time, there will not be much demand for bank loans and new flats etc. So profitability of banks and reality sectors will suffer. People should object to this removal of benefit for repayment of principal amount of housing loans in income tax.
Steel and cement stocks - Buy
There is talk of another price rise by Jindal steel.All others will follow the same. Buy steel stocks including visa steel. Bulk investors can study visa steel and plan to grab sizable % in this steel gem which is growing just like tata steel.
"Visa steel"
Mr.Vishambar Saran, ex- tata steel officer, now Chairman of Visa steel has already applied for mining lease in Orissa and Madhya pradesh. When new mining policy is announced, this company will get the ines soon. Present price is Rs.40. Target Rs.50 within 6 months.The promtors hold 71% and floating stock is only 29%. If any company corners this 25%, it can have the capacity to negotiate for directorship and also participate in networth of the company. The stock price is not in consonance with real networth of the company and is very low. Interested controlling parties are managing the share price low so that investors can stay away from the stock.They are making the price often very down in order to drive away investors from this golden stock. But once when any big investor grabs large chunk, automatically the price will rise fantastically as promoters will not sell their stake for fear of losing control. Visa steel promotors should think of making this company just like tata steel thus to reduce debts , they should get good finance partner who can be given some important post.The real worth of the stock is not less than Rs.60/-.
IFCI: Buy Rs.62.20 Target short term Rs.70/-
Govt has appointed advisor for IFCI who will submit report before dec2010.It is a stock in hibernation but any time it will come out of shell and climb upto Rs.70/-
Unitech: sell
This company is involved in CAG's indictment of 2G spectrum case.The economic times of today date states:
": Adding a new twist to the 2G spectrum scam, the Comptroller and Auditor General (CAG) has in its latest communication told the department of telecom (DoT) that a vast majority of the 126 licences controversially issued by the government in 2008 are illegal.
The sensational audit finding will further complicate the situation for the UPA government as Supreme Court begins to monitor investigations into the allocation of 2G spectrum under the stewardship of telecom minister A Raja in January 2008.
According to sources, CAG wrote to DoT in the second week of September that more than 75 licences issued in the 2G spectrum allocations have violated several of the guidelines for granting Unified Access Services Licence in a Service Area. These guidelines were issued on December 14, 2005 by DoT.
The CAG's communication to DoT says these licences were awarded to companies that did not meet several of the basic criteria laid down under the licence conditions. The finding comes over and above CAG's draft report that has indicted Raja for personally approving many of the important decisions that finally resulted in nine companies -- five of them with no experience in the telecom sector -- pocketing precious spectrum at throwaway prices.
CAG has listed a host of violations of DoT guidelines by the five new entrants and their several newly-floated companies. Among those indicted by CAG in its latest communication are Unitech, Loop, Swan, Datacom and Allianz Infra. Through various companies floated by them, together they hold over 75 of the total 126 licences given by the government without an auction. Some estimates have calculated the loss to the exchequer because of this sale in the region of Rs 60,000 crore.
CAG has also found some cases of forgery. In many of the licences, the Memorandum of Association of the applicant companies did not specify that they were being set up for telecom business, many of them were for construction business. So to overcome the need to have new MoAs approved by the registrar of corporate affairs, some of them put up unsigned MoAs in their applications. Many companies did not have adequate paid-up capital, and in some cases, they had violated cross-holding rules in telecom sector.
In the case of eight companies of Unitech, all of them held the annual general meetings just a day or two before the application was to be submitted. Officially, the AGMs were all held over two days within hours of notices being given, showing the farcical nature of the entire exercise.
The CAG findings now go beyond the issue of auction, and highlight the fact that DoT did not ensure that the companies adhered to its own guidelines. Raja had recently managed a law ministry opinion that CAG cannot question government's policy decisions, but the latest findings show that his department did not even carry out basic due diligence.
The findings add further complications to the 2G spectrum scam. Earlier, in its draft report, CAG had pointed out that Raja personally approved the issue of the now infamous press release of January 10, 2008, insisting on first-come-first-serve basis for allocation of licences, and giving operators just an hour's window to deposit demand drafts. The press release also advanced the cutoff date for submission of applications to September 25, 2007.
Raja had approved and signed the approval notings for the allocation of 2G spectrum to all the nine companies. Raja personally decided on the various cut-off dates in 2007, and later in January 2008, which favoured select companies, CAG found. First-come-first-serve was never DoT policy for granting licences, contrary to Raja's claims. It had been the policy only for release of spectrum after licences were granted, the CAG draft report said. "
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