Money Tree

The stock fell near 2400 mark as the sell off trigerred in the last half hour of trade. Earliar the stock had made an intra day high of 2749 and then after the release of the news of demerger the stock saw some sell off which took it down to near 2400 levels, however it closed at Rs. 2503.90 down about 6.6 percent.

As per the latest reports two new companies will be incorporated and after demerger there will be three companies in all. The two new companies will be Bajaj Holdings Ltd and Bajaj Finserve Ltd. The shareholders of Bajaj Auto Ltd. will get shares of Bajaj Holdings and Bajaj Finserve in the ratio of 1:1. The face value of the shares of Bajaj Finserve will be Rs. 5 and the face value of the shares of Bajaj Holdings will be Rs. 10.

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After good numbers posted by tech majors Infosys, Satyam and Wipro, today Reliance Industries has posted yet another set of Q4 numbers beating street expectations. The turnover was seen at Rs. 25895 crores versus Rs. 24542 in the corresponding previous quarter. The Q4 GRM (Gross refining margins) stood at $13/bbl versus $11.30/bbl in the last quarter of the same fiscal.
The net profit was up to 2853 crores versus 2502 crores up 20.3 percent year on year basis.

The Reserve Bank of India in its credit policy announced today has left the rates unchanged. This is a very positive news for Banking, Auto, Real Estate and construction industries.
The markets should start moving up on this news. Some stocks to initiate long positions are :

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The international coffee major Lavazaa buys out 100 percent stake in Sterling group’s Barista Coffee chain in India for an undisclosed amount. Lavazaa is reported to be the fifth largest coffee chain in the world and is stepping in India throug this buy out. The future plans would include to expand the current coffee chain of Barista.

Finally the cement companies succumb to the pressure of Government and promise to keep the prices of cement intact for next one year and shall bear the burden of additional taxes, levies, etc. imposed by the Government during this period.

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Tobacco is no longer a declared good and tobacco products will now attract VAT leading to an increase in the MRP of Cigarrettes and other tobacco products. This will adversly affect the stock prices of the companies engaged in Tobacco products like ITC and GTC Industries.

The Reserve Bank of India has put a cap on the Inter bank borrowings taken by the banks. This step may impact the smaller banks who need to borrow from other large banks on day to day basis. Now the banks will have to keep their own funds as they would not be able to borrow beyond a limit, they will focus on gathering more deposits and the move may raise the deposit rates further.

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The Master plan of Delhi is expected to be approved and notified by the Central Government and the approval of the 1432 unauthorised colonies is also likely.
If approved, this will bring a price reshuffle in the real estate market of Delhi. After approval of these colonies a lot of land will become available for construction and development as most of the plots in these colonies are left vacant by their owners for want of basic facilities and secondly much buying and selling was also not happening due to their unauthorised status.
Now after approval a number of small builders and developers will start buying land in these colonies and would start selling small ready to move in flats at competitive prices. With this supply of flats, the prices in authorised colonies will start coming down till an equillibrium is set up.
So, if you are planning to buy property in Delhi, wait for a few days and let the situation be more clear, you will have a wider choice and may be a better price as well.

Another set of good numbers was posted by Lanco. Its turnover reached RS. 4293 millions for the quarter ended on 31st December 2006 as compared to Rs. 150 millions in the corresponding quarter of the previous year. Net profits also jumped from 36 millions to 517 millions for the same period.
The company is on a fast growth path with its unique model of doing business through subsidiaries and its presence in sectors like power, infrastructure and construction.
The stock of the company is hovering around Rs. 240 at its issue price and at current levels it is definitely a buy. Buy it around this level and it would not take much time to shoot up. It has a crucial resistance at around 275 levels and if crossed, the stock may zoom upto 350 levels. It is a good short to medium term investment.