Financial focus Weekly Newsletter

InFINeeti

ISSUE 6 2013 VOLUME 1

TOP STORIES….…........1 MARKET ACTIVTY ….....2

ECONOMICS ....... …... 3

TERM OF THE WEEK ….4 TRADING CALLS ..…….5

MONTHLY RETURNS…..6

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

GOVT EASES FDI NORMS IN RETAIL SECTOR

Union cabinet eased investment rules for the retail sector on Thursday in a renewed attempt to attract foreign supermarket operators such as Wal-Mart Stores Inc. and Tesco. According to the proposed norms, Govt. is likely to expand the definition of mi-cro, small and medium enterprises (MSME) by allowing retailer to procure from them even if they have exceeded total investment of $2 Mn. in plant and machinery. Under the new policy 50% investment in backend infrastructure will be "restricted" only to the first tranche of $100 Mn. while subsequent investments into backend will be decided by the retailer.

Financial focus

RBI KEEPS KEY RATES UNCHANGED; GDP FORECAST

CUT TO 5.5%

RBI Governor, D. Subbarao, kept policy rates unchanged at the quarterly monetary poli-cy review on July 30, but took a dovish stance. Consequently, the key repo rate remains at 7.25%, reverse repo at 6.25% while cash reserve ratio remains at 4%. Lowering the GDP growth projection for the current fiscal to 5.5% from 5.7%, the central bank said the external sector is the "biggest threat" to economic stability. It also said that the recent liquidity tightening measures, taken to support the rupee, will be rolled back in a calibrat-ed manner as stability is restored to the foreign exchange market, enabling it to revert to

the policy of supporting growth with continuing vigil on inflation.

HSBC PMI, JULY AUTO SALES DATA WEIGH DOWN MAR-

KETS

Sensex fell 153 pts. to end at 19164.1, Nifty at 5677 as M&M fell 4% on weak July sales, & PMI shrank the most in 4 yrs. to 50.1. Meanwhile, automobile sales in India have been slow for more than a year now. However, utility vehicles saw strong growth for much of FY13, helped by increased price differentiation between petrol and diesel and new launches like M&M's XUV500 and Quanto, Renault's Duster and Maruti Suzuki's Ertiga. However, even SUVs have now hit speed bumps since last few months following a hike in excise duty by the government, and partial de-regulation of diesel prices.

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ASIAN-PACIFIC MARKETS CONTINUE THEIR RALLY

Asian-Pacific markets kept rising for a second day Friday as investors' appetite for risk improved amid positive economic data and assurances by the world's central banks that their loose monetary policies will continue. Japan Nikkei 225 jumped 3.3%. Hong Kong's Hang Seng Index rose 0.5%. Australia's S&P/ASX 200 gained 1.1%. China's Shanghai Composite was flat. South Korea's Kospi edged up 0.1%. Bucking the trend, India's Sensex was down 0.7%.

SENSEX FALLS 153 PTS; NIFTY BELOW 5700 ON RUPEE WOES

Sensex fell 153 pts. to end at 19164.02, Nifty at 5677.90 as JSPL fell 8%, Power Grid fell 11.5%,Banks like ICICI, BoB & Union Bk fell on NPA worry. The Nifty shed 400 points in eight sessions and also posted a biggest weekly loss since week ended March 22. For the

week, the index tanked 3.5 percent or 208 points while the Sensex plunged nearly 3 percent.

TOP STORIES : WORLD

U.S. ECONOMY GROWS STRONGLY IN 2ND QUARTER

The U.S. economy grew at a stronger-than-expected 1.7% annual pace in the second quar-ter, a result that is expected to provide further impetus for the Federal Reserve to curb its bond-buying program. Separately, strength was also evident in the ADP National Employ-ment Report, with private employers adding 200,000 jobs in July, matching June's gain. Gross domestic product grew at a 1.7 percent annual rate, the Commerce Department said on Wednesday, stepping up from the first quarter's downwardly revised 1.1 percent expansion pace.

CHINA MANUFACTURING STAYS IN GROWTH MODE

China's manufacturing activity maintained positive growth in July, with the official pur-chasing managers' index rising to 50.3 from 50.1 in June. The latest reading topped expec-tations, which saw a slide into negative territory at 49.8. The crucial employment index also suggested companies are continuing to shed workers, but at a slower pace, with the index at 49.1 in July from 48.7 in June. That was the 14th month below 50, according to the NBS. The sub-index measuring the business outlook jumped to 56.4 in July from 54.1 in June, indicating improved sentiment in the coming three months among business owners

EUROZONE MANUFACTURING RETURNS TO GROWTH AF-

TER 2 YEARS OF SHRINKAGE

Eurozone manufacturing returned to growth for the first time in two years last month, as the region's purchasing managers' index edged onto positive ground at 50.3, up from 48.8 in June. "This hopefully places the sector nicely to provide a positive spur to the third-quarter GDP numbers and help the euro area exit recession," said Rob Dobson, senior economist at PMI compiler Market

MARKET ACTIVITY

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ECONOMICS ECB HOLDS INTEREST RATES STEADY

The European Central Bank has kept interest rates at 0.5%. President Mario Draghi says there might be "gradual recovery in economic activity in the remain-ing part of the year and in 2014." However, Draghi has pledged to keep rates low for an extended time. European Central Bank (ECB) president Mario Draghi has said there are some tentative signs of an economic recovery in the Eurozone.

S&P SEES STRONGER GROWTH FOR PHILIPPINES,

FUELED BY DOMESTIC DEMAND

Standard & Poor's is now projecting 6.9% growth for the Philippines this year, driven by strong domestic demand. The latest forecast is up from an earlier outlook of 6.5% growth. S&P singled out the Philippines and Indonesia among Southeast Asian nations as economies likely to outperform in the region, where more export-dependent economies are expected to struggle.

SUBBARAO TO STEP DOWN, PUTTING INDIA IN

MARKET FOR NEW CENTRAL BANK CHIEF

Indian central bank chief D. Subbarao has declined to stand for another term, and the government is searching for a successor, said Finance Minister P. Chid-ambaram. Subbarao's current term expires in September. He has been in office since 2008.

DID YOU KNOW?

Recently, an incident in West Bengal challenged the accounting conventions and surprised the regulators. Vikash Metal and Power Ltd., based out of Kolkata, have shown an ‘extraordinary loss’ of INR 90 crores in the annual report furnished to its shareholders. Interesting point lies in details claimed by the company. This loss was caused due to robbery of plant and machinery, stock and believe it or not even facto-ry building! What makes it scary is that annual report with these facts got au-dited and endorsed by auditors too. So next time, you might see a thief running on the road with a building on his shoulders!

NSEL BACKLASH: FINANCIAL TECH, MCX SHARES

NOSEDIVES

Shares in Financial Technologies (India) Ltd (FTIL) extended Thursday’s losses and fell a further 40% after its unlisted unit National Spot Exchange Ltd (NSEL) suspended trading of all one-day forward contracts, except its so-called e-series con-tracts. Shares of FTIL and MCX fell 64.6% and 20%, respectively, on Thursday.

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Source : FLIP

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Redington India Period CMP Call Target Stop Loss

1 week 59.60 Buy 63 57.5

Avneet’s Call

The stock closed above its 10 day moving average last Friday. The

stock seems to be bottomed out for the moment with RSI close to 40

and a reversal in (12, 26) MACD is showing signs of bullish pattern

in the stock. Also the stock broke the first resistance level of 58.85.

Hexaware Tech Period CMP Call Target Stop Loss

1 week 115.70 Buy 124 111

The stock has rallied from lows at around 80 to 115 within a month.

The bullish rally in the IT stocks is due to the depreciation of INR

which increased their margins for Q1. After the steps taken by RBI, the

INR was looking to stabilize but reached to new life time lows last

Friday. We expect INR to further depreciate which could have an im-

pact on the margins of company over short term. The stock is already

trading above its 10 day moving average and since the market sen-

timent looks very weak, we expect some bounce back in IT stocks.

Prestige Estate Period CMP Call Target Stop Loss

1 week 123.60 Buy 130 119.4

The stock has found a support after good Q1 results at around 120-

122. Macquarie’s also gave the stock outperform rating. The RSI are at

30 and MACD showing signs of reversal i.e. bullish pattern on last

Friday. The stock is trading close to its 10 day moving average and is

eyeing the Aug launch for 1566 apartment Bangalore project which

could have a positive effect on the share after most real estate stocks

have beaten down.

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Bhushan’s Call

Financial Technologies

Period CMP Call Target Stop Loss

1 week 152 Sell 120 165

The carnage that happened with FTIL won’t subside unless some

clarity is obtained regarding the clarity of payment of entire

obligation. The deliverables % for the stock is very low at

8.8%, and Reliance Capital also offloaded its holdings of 11.91

lakh shares at an average price of 212. The stock took a support

of 105-115 levels on Friday, and bounced back to close off the

day’s lows. This is purely a trading call , as the daily and weekly

charts for the same are also strongly bearish and we feel some more

downside is left in the stock.

Coal India

Period CMP Call Target Stop

Loss

1 week 254 Sell 245 260

Coal India came out with a disappointing set of numbers on

Saturday, with Q1 net profit dipping 16.5% to Rs 3,731 cr & net

sales declined marginally to Rs 16,472 crores in April-June quarter

from Rs 16,500.6 crores in a year ago period, which too came in

lower than forecast.. It has broken its major support of 290, with

conviction and it is giving a strong bearish signal. It also marginally

missed its output target for July by two percent producing 32.77

million tones (MT) of dry fuel during the month. Got going for 5%

of divestment in this month itself , may drag the counter lower, due

to low setting of OFS price.

Sun TV Network Period CMP Call Target Stop Loss

1 week 427 Buy 445 420

Sun TV showcased good set of numbers with Q1 net un-

changed at Rs 164 cr, sales up 41%. Rather than growth in bot-

tom line , the top line growth looks very impressive. It has also

formed a pattern of ‘Engulfing Bullish’ on daily candlestick charts.

Also its upward movement on Friday was very strong amid huge

volumes , and high built up of long position in F&O counter.

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

Dish TV Sell 48.5

TARGET HIT

HUL Sell 620

Jubilant Food-

works Sell 1075

SKS Micro-

finance

Buy 115 Last Week’s Stock Calls that hit

their target levels

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InFINeeti Team

Aakanksha Hajela | Bhushan Kanathe| Kunal Maheshwari| Vaibhav Garg| Md. Umair Ansari

Date Stocks Buy Price Target Sold At Profit/Loss P/L % Invested Column1 P/L Weekly

Avneet’s Returns

6-Jul

IGL 278.8 300 289.31 10.51 3.77% 1257

1753 1.75% Jubilant Food-

works 1130.95 1260 1131 0.05 0.00% 1

PFC 137.95 140 140 2.05 1.49% 495

15-Jul

Maruti Suzuki 1447.95 1390 1448 -0.05 0.00% -1

384 0.38% DCB 52.25 55.45 50 -2.25 -4.31% -1435

Strides Arcolab 771.85 815 814 42.15 5.46% 1820

22-Jul

Maruti Suzuki 1451 1390 1390 61 4.20% 1401

2376 2.38% Jain Irrigation 55.3 58 53.5 -1.8 -3.25% -1085

Vijaya Bank 43.7 41 41 2.7 6.18% 2059

29-Jul

Jubilant Food-works

1150 1076 1077 73 6.35% 2116

5249 5.25% SKS Microfinance 104 115 115 11 10.58% 3526

DRL 2290 2400 2263 -27 -1.18% -393

Total 9762 9.76%

Bhushan’s Returns

6-Jul

Sun Pharma 1036 1080 1080 44 4.25% 1416

2811 2.81% Wipro 351 365 365 14 3.99% 1330

DLF 177.35 165 177 0.35 0.20% 66

15-Jul

M&M 905 870 870 35 3.87% 1289

2230 2.23% IGL 289 310 310 21 7.27% 2422

IDFC 135 145 129 -6 -4.44% -1481

22-Jul

Bajaj Auto 1972 2050 2050 78 3.96% 1318

1967 1.97% BHEL 174 168 168 6 3.45% 1149

GAIL 333 342 328 -5 -1.50% -501

29-Jul

Dish TV 52.5 48.5 48.5 4 7.62% 2540

2973 2.97% HUL 660 620 620 40 6.06% 2020

Yes Bank 367.5 380 350 -17.5 -4.76% -1587

Total 9981 9.98%

Date Stocks Buy Price Target Sold At Profit/Loss P/L % Invested Column1 P/L Weekly

* The returns are calculated on an investment of INR 1 lakhs/ person in one week, equally divided among the 3 calls given for that particular week (i.e. 33333.33 per stock in a week)