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Asia gains in opening trade

admin — Fri, 23 Oct 2009 03:59:10 +0000

US markets gained over 1% on earnings optimism from Travelers + PNC Fin + McDonalds. Dow Jones ended up 132 points at 10081.3, Nasdaq ended up 14.5 points at 2165.3 and S&P 500 ended up 11.5 points at 1092.9. Financial sector gained 2.9% led by regional banks as they surged 6.1%. Market shrugged weaker than expected jobless claims data, which was up 11,000 to 531,000. US advancing sectors were Financials (+2.9%), Consumer Discretionary (+1.7%), Materials (+1.40%).

Asian markets gained in the opening trade. Hang Seng, Shanghai Composite were up 1.5%, Straits Times was up 1%, Kospi was up 0.7%, Nikkei 225 was up 0.6%, Taiwan Weighted was up 0.23%. In Europe, CAC was down 1.35%, DAX was down 1.21% and FTSE was down 1%. CBOE VIX was down 6.9% at 20.69.

US results impact:

In US regional banks, PNC was up 12.6%, SunTrust was up 5.25%, Fifth Third was up 6.8%. In US financial stocks, Morgan Stanley was up 4.6% and Wells Fargo was up 4.3%. Travelers was up 7.7%; its profit more than quadrupled, company raised its full-year forecast. McDonald’s was up 2%; company topped earnings forecasts and expects same-store sales to remain positive in October.

US economic news:

Weekly jobless claims were up 11,000 at 531,000, against expected 515,000. Continuing claims were at 5.92 million, against expected 5.97 milion. Leading indicators for September increased 1%, against expected increase of 0.8%. Home prices for August fell 0.3% (MoM), against expected gain of 0.3% (MoM).

In global sugar companies, Bunge was down 3.5%, 3Q EPS was at $ 1.62/sh vs $ 1.7/sh; cuts full-year outlook to $ 3.10-$ 3.50/sh.

Commodities:

Crude Oil was down 0.2% at $ 81.2/bbl. Gold prices were down 0.6% at $ 1058.6/ounce. Silver was down 1.6% at $ 17.55/ounce.

Currencies:

USD depreciates 24 bps Vs Euro at 1.5031. Yen depreciates 65 bps Vs USD at 91.56. Korean Won depreciates 54 bps Vs USD.

Infosys a market performer: Khandwala Securities

admin — Thu, 16 Apr 2009 11:30:21 +0000

Khandwala Securities has rated Infosys Technologies as a market performer with target price of Rs 1,490 in its April 16, 2009 research report.

“Infosys reported 4.3% decline to USD 1,121 million of revenues for 4QFY09 (USD 1,134 million in constant currency); little lower than our expectations of USD 1,130 million. Revenues in rupee terms remained in-line with our estimates due to better average rupee realization (Rs 50.24/USD as against our estimates of Rs 49.8/USD). Net profit in rupee terms is higher than our expectations primarily due to rupee rate assumption and tax reversal of Rs 150 million.”

“We have revised FY10E USD revenue estimates down by 5% factoring lower billing rates and volumes. We cut our recommendation to Market Performer on the stock with a revised target price of Rs 1,490 at 14x FY11E earnings (from Rs 1,525 earlier), considering stock out-performance in recent past, weaker FY10 guidance and missing positive catalysts in near future,” says Khandwala Securities’ report.

Sell Infosys, target of Rs 1050: PINC Research

admin — Thu, 16 Apr 2009 11:23:02 +0000

PINC Research has maintained its sell rating on Infosys Technologies with a price target of Rs 1050 in its April 15, 2009 research report.

“Infosys Technologies missed Q4FY10 USD guidance and guided for 4.1% decline in USD revenue for FY10. The company guided for operating margin erosion of 300bps and net income margin erosion of 100bps for FY10. The customers remain wary about their IT spends. Infosys revenue de-grew by 4.3% to USD 1121 million (guidance of USD 1149 million) in USD terms. Revenue for NA and Europe de-grew by 2.5% and 7.2% QoQ in rupee term respectively. In terms of segments, the largest vertical BFSI de-grew by 7.9% QoQ, whereas telecom de-grew by 2.6% QoQ. This is in line with our expectation and hypothesis.”

“We believe guidance of backend loaded year should be treated with caution. In our view, consensus estimates seems to be aggressive and likely to be revised downward. We reiterate our Sell recommendation with a price target of Rs 1050,” says PINC’s research report.

Accumulate RIL, target of Rs 1558: Prabhudas Lilladher

admin — Wed, 01 Apr 2009 13:06:42 +0000

Prabhudas Lilladher has recommended an accumulate rating on Reliance Industries with a price target of Rs 1558 in its March 2009 research report.

“RIL’s two biggest projects (RPL refinery and KG D6 gas production) are going on-stream from April 2009. The earnings from these investments (over USD 13 billion) will start accruing from FY10 onwards. However, the full impact of the earnings will be witnessed only in FY11 (cash flows of over USD 7 billion). The cash flows generated out of the upcoming projects will be utilised primarily for strengthening the E&P activity. RIL has explored only a couple of blocks out of the total kitty of over 41 O&G blocks, which has good potential. However, near-term worries over subdued refining and petchem environment are likely to persist. ‘Accumulate’ with a price target of Rs 1558,” says Prabhudas Lilladher’s research report.

Reduce JSW Steel, target of Rs 197: IIFL

admin — Fri, 27 Mar 2009 15:16:39 +0000

IIFL has recommended a reduce rating on JSW Steel with a target price of Rs 197 in its March 27, 2009 research report.

“In our recent meeting with JSW Steel, management articulated its initiatives to tide over the current turbulence. Its strategy consists of: 1) reducing operating cost from USD 500/tonne in FY09 to USD 280/tonne in FY10; and 2) cutting its capex plan for FY10 to Rs 30 billion from Rs 55 billion earlier. At a price of USD 400/tonne for HR steel, the company estimates it will be able to meet its debt obligation as well as to meet its capex commitment.”

“JSW Steel’s estimate builds in 90% YoY growth in despatches, which in our view is an uphill task. Additionally, its assumption that HR steel prices will stay at the current USD 400/tonne leaves little margin of safety. A drop in steel prices below USD 400/tonne cannot be ruled out, as the expected fall in coking coal and iron ore price leads to a reduction in the industry’s production cost, while demand remains weak. A debt-to-equity ratio of 2.1x and EV/EBIDTA of 5.3x leaves little room for error. “REDUCE”, target price of Rs 197,” says IIFL’s research report.