Polyus Gold may have significantly larger reserves of gold than is credited to the stock by the market currently. Polyus Gold (ADR: OPYGY) is the gold mining spin off from Nolisk Nickel. Polyus has the world's second largest gold mine by reserves, Natalka, at 40.8M ou of gold in place -- this compares to all of Barrick's Gold's reserves of 138M ou.(Barrick is the world's largest gold miner).
Gold miners report proved (90%) and probable (50%) reserves all together, unlike oil which typically report only proven (90%). Barrick reports it has 138M ous of reserves of gold, when you look at the 40-F, it has 30.3M ou of proven gold, 109.4M ou of probable
Note that measured means that the reserves exist with high certainty (90%) but are not yet proven, in so far that they have not been proven to be economically mined through a feasibility study and http://www.polyusgold.com/eng/news/reports/audit/
According to Polyrus' investor's relations, Natalka's mine life to 2073 (very large mine), average cash costs per ounce of $51.3 (should be very profitable)(this is the mine info). The mine will double Polyus' current output of 1.38M ou per year of gold towards 2020, in 2014 it will increase by 48%.
In comparison Barrick (market cap: $50.9Bn) produces 7.4M ou. Newmont (market cap $28.8M) produced 5.3M ou in 2009, reserves of 92 M ou.
Polyrus I'm not sure the market cap, one source is saying $10Bn, another around $5Bn -- it is really attractive at $5Bn. I will double check this.
You can find a comparison of the world's richest gold mines here: http://www.minefund.com/mineral-deposits/richest-deposits.php There are only 6 mines with reserves of 30M ou or above,and only 8 with total reserves of 20 M ou or above. Barrick does not own any of these top 8 mines, but has interests in many smaller mines -- it appears Barrick has consolidated many individual mines, to form the world's largest gold miner.
Natalka will come on-stream in 2013 - actually late 2013. The shares haven't moved up too much -- except for after the financial crisis.
Overall I can tentatively say that Polyus is comparable in size to Barrick, in so far that it is a major miner of gold (the Russian reserve show that Barrick has 80% more gold than Polyus) -- but the market cap of Barrick is far higher, $50Bn verses $10Bn. Of course this reflects geopolitical risk (mining in Russia) -- next steps would be to compare average costs per ounce -- it seems most gold miners would have higher than Polyus' cash costs since the mines will be located in many different locations (a single, large deposit will lower cash costs per ounce since the set up costs of the electricity, water, housing, roads, equipment etc can be depreciated over a longer mine life). Further next steps are to analyze political risk
Showing posts with label Stock Market. Show all posts
Showing posts with label Stock Market. Show all posts
Wednesday, 19 October 2011
Economics of Deep Sub-Salt Operations Hinges on Cash Costs per Barrel
Petrobras´ market value is nearing $250Bn which is fairly high but if (the key) is ´the cash costs of the deep sea oil per barrel. PBR is spending at least $174Bn to develop this (one of the largest capital projects in history, ever).
I did a quick calcuation of the payback period of the deep sea oil costs. The estimate is that initially the deep sea will produce an additional 2 million barrels of oil -- quick calculation, assuming a profit per barrel of $40 after direct operating costs = $29.2Bn of profit per year, or a 5.96 year payoff period -- this is at the high end of aceptable levels of payoff, in which oil and gas firms want payoffs to be below 5 years.
If the profit after operating costs is $60, the payback period drops to 3.94 years. Need to find better data on direct operating costs. If it is only costing PBR $20 to hire workers, equipment, power, water, foodservice etc then this isn´t bad at all (since the deposit is likely very large and will last for decades)(the price of oil should be in the $70-90 range for a while).
One more note: I did find data that at least at Tupi the gas/oil ratio is 15-20% -- majority oil (perhaps the pressure maintains the longer hydrocarbon chains). In geological theory, the deeper the deposit, the hotter and the more the longer hydrocarbon chains will have been broken to form natural gas, but PBR seems quite confident the deposit is mainly oil (of course natural gas is cheaper currently and less profitable and also is much more difficult to transport from offshore locations).
I did a quick calcuation of the payback period of the deep sea oil costs. The estimate is that initially the deep sea will produce an additional 2 million barrels of oil -- quick calculation, assuming a profit per barrel of $40 after direct operating costs = $29.2Bn of profit per year, or a 5.96 year payoff period -- this is at the high end of aceptable levels of payoff, in which oil and gas firms want payoffs to be below 5 years.
If the profit after operating costs is $60, the payback period drops to 3.94 years. Need to find better data on direct operating costs. If it is only costing PBR $20 to hire workers, equipment, power, water, foodservice etc then this isn´t bad at all (since the deposit is likely very large and will last for decades)(the price of oil should be in the $70-90 range for a while).
One more note: I did find data that at least at Tupi the gas/oil ratio is 15-20% -- majority oil (perhaps the pressure maintains the longer hydrocarbon chains). In geological theory, the deeper the deposit, the hotter and the more the longer hydrocarbon chains will have been broken to form natural gas, but PBR seems quite confident the deposit is mainly oil (of course natural gas is cheaper currently and less profitable and also is much more difficult to transport from offshore locations).
Thompson Creek
I was going through the world's largest gold deposits, then seeing which firms own them, -- interestingly you can search the mines here: http://www.minefund.com/mineral-deposits/richest-deposits.php I'd like a large deposit, so that the co can set up operations and then have a long mine life, plus the resource firm's main source of value is its mining assets.
Anyway, what is interesting is that Thompson Creek, mainly a Molybdenum producer, owns the 47th largest gold deposit in the world, Mt Milligan in Canada, with 6 million ounces of gold proven, also contains about 1 M tons copper (comparison, Codelco, Chile's gov't owned copper miner world's largest has 77M tons copper)(which is to say, it won't set records in copper, but the copper is a source of value). 22 year mine life, will come online in 2013, so current forecasts don't include earnings from this forecast to 2012 (current forecast is selling at 13x 2012 earnings). Production will be 194,000 ou gold, which is around a small to mid tier producer -- you'd see this at around $1Bn in market cap by itself at least.
I really like the "hidden" asset of the Mt Milligan gold and copper mine. However note, the grades are on the low side for the mine, -- grades of around 0.4 g/ton for gold -- you want to see at least 1 g/ton, and copper grades of 0.14% copper -- you want to see grades of 1% copper. However, the reserves are very big, I noted one of the most successful gold miners, Newcrest in Australia, has one main mine, Cadia, which has a grade of 0.5 g/ton but 27 M ounces total., Now Newcrest is worth almost $30Bn, due to the fact that they have all the operations set up, even as the mine as a relatively low grade (can just process and process ore).
TC should be able to do the same, perhaps on a bit of a lower scale, but a 6 M ou mine is not small at all (again gold mines of over 1M ounces are very rare).
Anyway, once the market either anticipates the gold mining operation Mt Milligan coming online, or higher moly prices, TC should do better than a relatively low $2Bn market cap.
It's not showing up as a gold producer yet since it is classified as Moly, so that's why I think it hasn't moved too much. (most gold producers are up a ton over the past year and a half). It's sort of like KHGM, which is the world's 6th largest copper producer, but also has the 5th largest reserves of silver (always classified as copper, doesn't get a benefit yet too much from silver) (KGHM has already up a ton so probably isn't too much of a buy here).
Of course you'd increase that value is the value of copper is $4 and gold $1400.
So I think the stock will do really well once revenues come in from Mt Milligan. (and as long as commodity prices stay strong).
Checked the message board for TC, and the explanation for the low stock price is possible bankruptcy, from a potential meteor strike (this is a joke). The messages are very frustrated with the stock, blaming it on management, for some reason (need to figure out why). So perhaps it will be a while before it moves. But it appears the value is there.
Anyway, what is interesting is that Thompson Creek, mainly a Molybdenum producer, owns the 47th largest gold deposit in the world, Mt Milligan in Canada, with 6 million ounces of gold proven, also contains about 1 M tons copper (comparison, Codelco, Chile's gov't owned copper miner world's largest has 77M tons copper)(which is to say, it won't set records in copper, but the copper is a source of value). 22 year mine life, will come online in 2013, so current forecasts don't include earnings from this forecast to 2012 (current forecast is selling at 13x 2012 earnings). Production will be 194,000 ou gold, which is around a small to mid tier producer -- you'd see this at around $1Bn in market cap by itself at least.
I really like the "hidden" asset of the Mt Milligan gold and copper mine. However note, the grades are on the low side for the mine, -- grades of around 0.4 g/ton for gold -- you want to see at least 1 g/ton, and copper grades of 0.14% copper -- you want to see grades of 1% copper. However, the reserves are very big, I noted one of the most successful gold miners, Newcrest in Australia, has one main mine, Cadia, which has a grade of 0.5 g/ton but 27 M ounces total., Now Newcrest is worth almost $30Bn, due to the fact that they have all the operations set up, even as the mine as a relatively low grade (can just process and process ore).
TC should be able to do the same, perhaps on a bit of a lower scale, but a 6 M ou mine is not small at all (again gold mines of over 1M ounces are very rare).
Anyway, once the market either anticipates the gold mining operation Mt Milligan coming online, or higher moly prices, TC should do better than a relatively low $2Bn market cap.
It's not showing up as a gold producer yet since it is classified as Moly, so that's why I think it hasn't moved too much. (most gold producers are up a ton over the past year and a half). It's sort of like KHGM, which is the world's 6th largest copper producer, but also has the 5th largest reserves of silver (always classified as copper, doesn't get a benefit yet too much from silver) (KGHM has already up a ton so probably isn't too much of a buy here).
Of course you'd increase that value is the value of copper is $4 and gold $1400.
So I think the stock will do really well once revenues come in from Mt Milligan. (and as long as commodity prices stay strong).
Checked the message board for TC, and the explanation for the low stock price is possible bankruptcy, from a potential meteor strike (this is a joke). The messages are very frustrated with the stock, blaming it on management, for some reason (need to figure out why). So perhaps it will be a while before it moves. But it appears the value is there.
Further Notes, Thompson Creek
A couple more notes on Thompson Creek:
1. They have to build the infrastructure at Mt Milligan and another site, which will cost $350M in 2011, likely will run cash to a bit less than $0 in 2011-2012, (currently net positive cash balance after the acquisition of Mt Milligan is about $300M). As long as copper and gold prices stay where they are, this is ok -- I would say copper prices are more vulnerable than gold prices out to 2013.
The expected of revenue from Mt Milligan from copper is $243M per annum at $3,50 lb copper (81M lbs) and from gold is $230M at $1200 gold (relatively even split copper gold). So the expected revenue from Mt Milligan will be about the same as current total sales (2010 sales of $594.8M).
2. Along with note 1, TC just bought Mt Milligan in Oct 2010 for $700M. They financed this with a stock issuance and also a gold forward sales agreement with a company called Rand Gold (I looked at this, and it looks ok). But now as mentioned in point 1, they have to build the mine infrastructure.
3. Molybdenum production will decline at their main Moly mine, Thompson Creek in Idaho in 2012, overall Moly production is expected to be down to 26-28 M lbs in 2012 from 31-33M lbs in 2011. They have to also spend $181M to expand their other Moly mine, Endako, in 2011. Further, cash costs are going up to the $9 range per lb for the thompson creek mine from $7 range in 2011. Endako is not as high quality an asset (grade of 0.,04% Moly verses 0.08% at Thompson Creek). It appears Moly production at Thompson will stablize after 2012, but I am not sure -- mine life currently is 11-14 years at Thompson Creek. Mine life at Endako is also 15 years.
4. Moly prices may come under pressure in 2014, when the largest Moly project in the Western Hemisphere, owned by Moly Corp (ticker: GMO) comes online This project will approximately double US production of Moly, producing 50M lbs per annum of Moly current US production is 56M lbs according to the USGS: http://minerals.usgs.gov/minerals/pubs/commodity/molybdenum/mcs-2011-molyb.pdf World production of Moly is 234M lbs so General Moly will add about 12.8% to world supply. General Moly has Chinese financing for its project so it is most likely going through.
5. Lastly, TC has 22M warrants outstanding with an exercise price of $9, which is actually a lot. These expire on Oct 11, 2011, so the stock could be under pressure from these -- my understanding is that TC will have to pay out cash for the exercise of these warrants. At a stock price of $12.50, this is $3.50*22M or $77M, which is actually going to drain the cash balance of TC further.
So in summary, TC is interesting however will likely be under pressure through 2011 until visibility on the Mt Milligan project is more clear, which will be sometime in 2013. Further, currently copper and some other industrial metals are weakening in anticipation of perhaps less stimulus from the major economies and therefore lower economic growth. So TC (I think) won't see a breakout until 2012 (but can watch the co, see if it gets close to $10 where the warrant exercise won't be such an issue).
1. They have to build the infrastructure at Mt Milligan and another site, which will cost $350M in 2011, likely will run cash to a bit less than $0 in 2011-2012, (currently net positive cash balance after the acquisition of Mt Milligan is about $300M). As long as copper and gold prices stay where they are, this is ok -- I would say copper prices are more vulnerable than gold prices out to 2013.
The expected of revenue from Mt Milligan from copper is $243M per annum at $3,50 lb copper (81M lbs) and from gold is $230M at $1200 gold (relatively even split copper gold). So the expected revenue from Mt Milligan will be about the same as current total sales (2010 sales of $594.8M).
2. Along with note 1, TC just bought Mt Milligan in Oct 2010 for $700M. They financed this with a stock issuance and also a gold forward sales agreement with a company called Rand Gold (I looked at this, and it looks ok). But now as mentioned in point 1, they have to build the mine infrastructure.
3. Molybdenum production will decline at their main Moly mine, Thompson Creek in Idaho in 2012, overall Moly production is expected to be down to 26-28 M lbs in 2012 from 31-33M lbs in 2011. They have to also spend $181M to expand their other Moly mine, Endako, in 2011. Further, cash costs are going up to the $9 range per lb for the thompson creek mine from $7 range in 2011. Endako is not as high quality an asset (grade of 0.,04% Moly verses 0.08% at Thompson Creek). It appears Moly production at Thompson will stablize after 2012, but I am not sure -- mine life currently is 11-14 years at Thompson Creek. Mine life at Endako is also 15 years.
4. Moly prices may come under pressure in 2014, when the largest Moly project in the Western Hemisphere, owned by Moly Corp (ticker: GMO) comes online This project will approximately double US production of Moly, producing 50M lbs per annum of Moly current US production is 56M lbs according to the USGS: http://minerals.usgs.gov/minerals/pubs/commodity/molybdenum/mcs-2011-molyb.pdf World production of Moly is 234M lbs so General Moly will add about 12.8% to world supply. General Moly has Chinese financing for its project so it is most likely going through.
5. Lastly, TC has 22M warrants outstanding with an exercise price of $9, which is actually a lot. These expire on Oct 11, 2011, so the stock could be under pressure from these -- my understanding is that TC will have to pay out cash for the exercise of these warrants. At a stock price of $12.50, this is $3.50*22M or $77M, which is actually going to drain the cash balance of TC further.
So in summary, TC is interesting however will likely be under pressure through 2011 until visibility on the Mt Milligan project is more clear, which will be sometime in 2013. Further, currently copper and some other industrial metals are weakening in anticipation of perhaps less stimulus from the major economies and therefore lower economic growth. So TC (I think) won't see a breakout until 2012 (but can watch the co, see if it gets close to $10 where the warrant exercise won't be such an issue).
Follow Up on Frontier Resources
As posted in a previous note, the main question for Frontier Resources (ASX: FNT.AX) is whether the deposit on New Britain has a reasonable chance of proving to be a large scale, economically producing, high grade mine. This is significant because the initial exploratory data was reported to be very positive (could this be a major deposit of Gold in a new territory, relatively unexplored New Britain of Papua New Guinea? -- similar to Lihir of Newcrest Gold (the 7th largest gold deposit in the world, discovered in the past 5 years?)
We won't answer this out with 100% certainty, but it seems we can be able at least shed some light on this main question, by asking few sub-questions first: 1. Does the management team have the connections and experience to at least get the ball rolling on development, if reserves are economic?
Second, are there high grade deposits nearby (in Papua New Guinea?). Mineral deposits are formed by geological processes, and these processes can be similar in nearby locations.
Third, what are the (known) geological processes for forming gold? This might sound too esoteric, but really this helps a lot, at least in the case of oil, in looking for new reserves (really many analysts won't even speculate on this, but for example, I know a bit about oil formation theory, and so for example, took a look at Petrobras of Brazil, looked at their producing wells, and saw huge territories unexplored plus offshore areas next to rivers -- good signs of future oil discoveries and Petrobras subsequently has announced very large
discoveries).
First question -- actually this is probably the best question -- management experience. The Chairman and CEO Peter McNeil is also CEO of another PNG based gold mining firm in addition to Frontier -- New Guinea Gold Corporation. Frontier Resources has only 2 full time employees in management, it appears, the CEO and a co secretary. (this data is really hard to find, is not in the Annual Report -- have to infer since they don't state how many employees).
New Guinea Gold is also mainly on New Britain, same management structure, just McNeil and a secretary and non-exec directors (so essentially it is a twin of Frontier except drills different prospects) has drilled 12 projects, got good exploration results (grades of over 2 g/ton, but hasn't been able to develop these projects, one problem was that crushing the ore turned out to be a problem, so gold production has been disappointing. The stock has been down a lot -- stock price on the Venture Exchange of Canada of New Guinea Gold has gone from .6 in 2007 to 0.1 currently -- the market has lost confidence that management will bring any projects into production and/or sell deposits.
Frontier Resources is also a vehicle to explore New Britain, is up a lot with the recent report of grades but -- really reading the reports from New Guinea Gold Corporation they sound sort of similar in terms of grade (some reports of very high grade 30-60 g/ton then most of above 2 g/ton) -- but New Guinea Gold hasn't been able to bring these online.
I've seen a small management team be CEO's of more than one mining co before --example New Gold and Silver Bear Resources -- both headed by the same management team -- note New Gold is doing great while Silver Bear isn't. So this isn't a bad sign necessarily -- what you do want to see is proven experience getting mines to production and building value. New Guinea Gold isn't this, Frontier so far isn't proven (wondering actually why two co's in the same region for the same type of deposit -- Silver Bear is at least for silver while New Gold is for gold, makes sense -- wondering if Frontier is another vehicle to make investors forget about lack of success at New Guinea Gold).
Anyway -- on the first question overall summary is "iffy."
Second question, yes there are good, relatively recent discoveries is Papua New Guinea. The most publicized is the LIhir Gold discovery on tiny Lihir Island in PNG: http://www.mining-technology.com/projects/lihir/ Amazingly, this deposit has 28.8M ou of gold reserves at an average grading of 3.5 g/ton (which is extremely high, most grades are 1 g/ton or lower) and ranks #7 on the world's largest gold deposits. http://www.minefund.com/mineral-deposits/richest-deposits.php In other words, huge! Lihir was bought out by Australia's Newcrest Gold in 2009, and Newcrest states that it wants to produce about half of its production from Lihir going forward (Newcrest is an amazing stock, Australia's largest Gold producer, has rocketed up to a $A30Bn market cap (3rd largest gold mining co in the world). Note that Newcrest's other major producing mine, Cadia East in Western Australia, produces over 1M ou per year of gold but from an average
grade of about 0.5 g/ton (so Lihir is about 7x more concentrated). Cadia East
has reserves of gold of about 18.7M ou, so Lihir has about 50% more gold. (in
other words, Lihir is a world class deposit)
Two other PNG projects appear in the top 200 largest gold deposits. Allied Gold owns Simbiri which is located also on a tiny PNG island (called Simbiri) about 30 km north of Lihir -- average grade is between 1.0-1.5 g/ton with total reserves of 2M ou (so much lower and smaller than Lihir, but LIhir is unusually large and high grade). Harmony Gold and Newcrest co-own Hidden Valley on the main lsland of PNG, with an average grade of 1.7 g/ton and total proven resource of 1.2M ou.
For gold mines in Indonesia, there are three in the top 200 (Indonesia could have similar geology to PNG, both are island countries and actually the main island of PNG is split evenly between Indonesia and PNG). Interestingly, Indonesia's gold deposits are all relatively low grade, below 0.5 g/ton, including the massive Grassberg mine, owned by Freeport (FCX), which has approx 35M ou of gold at an average grade of 0.4 -- note this mine is ranked #3 in terms of reserves of gold, and has already been in production since 1975 so could be depleted in terms of its higher grade ore.
In summary to question 1, there are high grade deposits in PNG and it doesn't appear that PNG has been a major destination of mineral exploration budgets (only a few firms, Newcrest, Harmony, Allied and some minors including Frontier searching so it is possible. Actually the next question is, what did the exploratory mineral info look for Lihir and the other major deposits? Were these close to info coming about concerning Andewa? Will try to find this.
Third question, (this is getting lengthy) gold appears to be formed by three main geological processes. First process, the Witwatersrand deposit in South Africa (largest in the world, produced approx 40% of the world's gold, but now is largely depleted except for underground mining, was in production since the 1910's) was formed approx 3 bn years ago -- the earth is 4.5 bn years old so South Africa is one of the few areas with surface areas formed during this time. Almost all other areas (with the exception of parts of Australia) have been reformed by more recent geological processes. The best theory is that during this period of the earth's history (3 bn years ago) heavier metals were flowing from the magma to the surface (gold, platinum) and the earth was in a different phase of history -- the gold is left over from this period, but not covered in vast amounts of overbuden unlike almost all other areas. This process is probably unique to S. Africa, won't explain Papua New Guinea gold.
Second process Carlin type deposits, found in Nevada -- gold is completely dissolved in minerals -- unique (I thnk) to mainly North America -- won't go into detail.
The journal Science explains a process of gold formation unique to Pacific Islands
-- water flow accumilates gold over relatively short periods (couple 100,000 years). Will reference for this (getting tired) -- anyway, need a lot of flowing water and a trap, can be a good source for PNG, for New Britain -- was how Lihir gold was formed.
Anyway so the summary would be management -- medium to negative, close-by deposits -- moderately positive, gold formation -- positive. Overall however probably question 1 is the most indicative and so overall I would say "iffy."
We won't answer this out with 100% certainty, but it seems we can be able at least shed some light on this main question, by asking few sub-questions first: 1. Does the management team have the connections and experience to at least get the ball rolling on development, if reserves are economic?
Second, are there high grade deposits nearby (in Papua New Guinea?). Mineral deposits are formed by geological processes, and these processes can be similar in nearby locations.
Third, what are the (known) geological processes for forming gold? This might sound too esoteric, but really this helps a lot, at least in the case of oil, in looking for new reserves (really many analysts won't even speculate on this, but for example, I know a bit about oil formation theory, and so for example, took a look at Petrobras of Brazil, looked at their producing wells, and saw huge territories unexplored plus offshore areas next to rivers -- good signs of future oil discoveries and Petrobras subsequently has announced very large
discoveries).
First question -- actually this is probably the best question -- management experience. The Chairman and CEO Peter McNeil is also CEO of another PNG based gold mining firm in addition to Frontier -- New Guinea Gold Corporation. Frontier Resources has only 2 full time employees in management, it appears, the CEO and a co secretary. (this data is really hard to find, is not in the Annual Report -- have to infer since they don't state how many employees).
New Guinea Gold is also mainly on New Britain, same management structure, just McNeil and a secretary and non-exec directors (so essentially it is a twin of Frontier except drills different prospects) has drilled 12 projects, got good exploration results (grades of over 2 g/ton, but hasn't been able to develop these projects, one problem was that crushing the ore turned out to be a problem, so gold production has been disappointing. The stock has been down a lot -- stock price on the Venture Exchange of Canada of New Guinea Gold has gone from .6 in 2007 to 0.1 currently -- the market has lost confidence that management will bring any projects into production and/or sell deposits.
Frontier Resources is also a vehicle to explore New Britain, is up a lot with the recent report of grades but -- really reading the reports from New Guinea Gold Corporation they sound sort of similar in terms of grade (some reports of very high grade 30-60 g/ton then most of above 2 g/ton) -- but New Guinea Gold hasn't been able to bring these online.
I've seen a small management team be CEO's of more than one mining co before --example New Gold and Silver Bear Resources -- both headed by the same management team -- note New Gold is doing great while Silver Bear isn't. So this isn't a bad sign necessarily -- what you do want to see is proven experience getting mines to production and building value. New Guinea Gold isn't this, Frontier so far isn't proven (wondering actually why two co's in the same region for the same type of deposit -- Silver Bear is at least for silver while New Gold is for gold, makes sense -- wondering if Frontier is another vehicle to make investors forget about lack of success at New Guinea Gold).
Anyway -- on the first question overall summary is "iffy."
Second question, yes there are good, relatively recent discoveries is Papua New Guinea. The most publicized is the LIhir Gold discovery on tiny Lihir Island in PNG: http://www.mining-technology.com/projects/lihir/ Amazingly, this deposit has 28.8M ou of gold reserves at an average grading of 3.5 g/ton (which is extremely high, most grades are 1 g/ton or lower) and ranks #7 on the world's largest gold deposits. http://www.minefund.com/mineral-deposits/richest-deposits.php In other words, huge! Lihir was bought out by Australia's Newcrest Gold in 2009, and Newcrest states that it wants to produce about half of its production from Lihir going forward (Newcrest is an amazing stock, Australia's largest Gold producer, has rocketed up to a $A30Bn market cap (3rd largest gold mining co in the world). Note that Newcrest's other major producing mine, Cadia East in Western Australia, produces over 1M ou per year of gold but from an average
grade of about 0.5 g/ton (so Lihir is about 7x more concentrated). Cadia East
has reserves of gold of about 18.7M ou, so Lihir has about 50% more gold. (in
other words, Lihir is a world class deposit)
Two other PNG projects appear in the top 200 largest gold deposits. Allied Gold owns Simbiri which is located also on a tiny PNG island (called Simbiri) about 30 km north of Lihir -- average grade is between 1.0-1.5 g/ton with total reserves of 2M ou (so much lower and smaller than Lihir, but LIhir is unusually large and high grade). Harmony Gold and Newcrest co-own Hidden Valley on the main lsland of PNG, with an average grade of 1.7 g/ton and total proven resource of 1.2M ou.
For gold mines in Indonesia, there are three in the top 200 (Indonesia could have similar geology to PNG, both are island countries and actually the main island of PNG is split evenly between Indonesia and PNG). Interestingly, Indonesia's gold deposits are all relatively low grade, below 0.5 g/ton, including the massive Grassberg mine, owned by Freeport (FCX), which has approx 35M ou of gold at an average grade of 0.4 -- note this mine is ranked #3 in terms of reserves of gold, and has already been in production since 1975 so could be depleted in terms of its higher grade ore.
In summary to question 1, there are high grade deposits in PNG and it doesn't appear that PNG has been a major destination of mineral exploration budgets (only a few firms, Newcrest, Harmony, Allied and some minors including Frontier searching so it is possible. Actually the next question is, what did the exploratory mineral info look for Lihir and the other major deposits? Were these close to info coming about concerning Andewa? Will try to find this.
Third question, (this is getting lengthy) gold appears to be formed by three main geological processes. First process, the Witwatersrand deposit in South Africa (largest in the world, produced approx 40% of the world's gold, but now is largely depleted except for underground mining, was in production since the 1910's) was formed approx 3 bn years ago -- the earth is 4.5 bn years old so South Africa is one of the few areas with surface areas formed during this time. Almost all other areas (with the exception of parts of Australia) have been reformed by more recent geological processes. The best theory is that during this period of the earth's history (3 bn years ago) heavier metals were flowing from the magma to the surface (gold, platinum) and the earth was in a different phase of history -- the gold is left over from this period, but not covered in vast amounts of overbuden unlike almost all other areas. This process is probably unique to S. Africa, won't explain Papua New Guinea gold.
Second process Carlin type deposits, found in Nevada -- gold is completely dissolved in minerals -- unique (I thnk) to mainly North America -- won't go into detail.
The journal Science explains a process of gold formation unique to Pacific Islands
-- water flow accumilates gold over relatively short periods (couple 100,000 years). Will reference for this (getting tired) -- anyway, need a lot of flowing water and a trap, can be a good source for PNG, for New Britain -- was how Lihir gold was formed.
Anyway so the summary would be management -- medium to negative, close-by deposits -- moderately positive, gold formation -- positive. Overall however probably question 1 is the most indicative and so overall I would say "iffy."
Is Chaoda Modern Dropping Because of an Unfounded Rumor that it Changed Auditors
Chaoda Modern, the 3rd largest agicultural firm in China has dropped from a price of near HK$10 in the past year to somewhere near $HK4 currently. I suspect the current drop is due to an inaccurate rumor that Choada changed auditors -- but the last auditor Grant Thornton was acquired by the current auditor, BDO Seidman, which is the 5th largest auditor in the worldwide.
Shares increased as they issued equity instead of dipping into cash to fund expansion (don't really know why they won't utilize their very large cash and investment position). Chaoda has RMB3.8Bn of cash and no debt -- all assets are in RMB and look solid, buildings (RMB8Bn), vegetables in inventory (RMB2Bn) and they have very low liabilities RMB218M total. They also have RMB1.3Bn of equity assets - mainly I believe their share of HK listed Asian Critus. One asset is "prepaid premium for land leases" at RMB5.8Bn -- I believe this is tangible (prepaid leases, so expenses won't appear in future periods, as long as the firm is a going concern). With prepaid land leases, net tangible book value is RMB 24.9Bn while market cap is HK15Bn (RMB12.5Bn) so market cap is around 50% of book. PE is below 4 (interim 6 mo net profit is RMB1.54Bn).
Operating cash flow looks strong, equal to EBITDA of RMB1.8Bn for the interim period, but the co raised RMB2.3BN of financing (mainly equity) to fund expansion. Almost RMB1Bn from new shares issued over the past half year (this seems to me, not a huge dilution).
Note, the major reason for the increase in SG&A was an increase in options exercised, from only RMB6M in 2010 to 160M in 2011 - also note salaries were up about RMB100M (this is likely due to wage inflation in China, surprisingly workers are somewhat in short supply for farming). So this hopefully won't be repeated. -- they are approx 192M share options outstanding but the majority have excercise prices between $HK6.75 and HK$8.10 per share. The exception is the ceo who has 66M options with an excercise price of HK1.50 (but at least he'll be motivated to get the stock price up).
They are paying a dividend this year of RMB84M -- didn't pay a dividend last year. So at least will get some income, also shows they care about the stock price a bit.
Overall to me the company looks strong I don't know why it's dropping for sure -- the first drop, issuance of equity at HK$7.50 when the stock was trading at HK$9 -this made sense to drop, but the second drop, if it has anything to do with the rumor that they've changed auditors, is just plain wrong (the news of the previous auditor, Grant Thornton, being acquired by BDO maybe is not well known, and it may be thought that Chaoda really did want to change auditors, but BDO is a well respected accounting firm). So this one really has me scratching my head. It looks very strong, with the exception of the issuance of equity to fund expansion, that has made net profit growth relatively flat.
Shares increased as they issued equity instead of dipping into cash to fund expansion (don't really know why they won't utilize their very large cash and investment position). Chaoda has RMB3.8Bn of cash and no debt -- all assets are in RMB and look solid, buildings (RMB8Bn), vegetables in inventory (RMB2Bn) and they have very low liabilities RMB218M total. They also have RMB1.3Bn of equity assets - mainly I believe their share of HK listed Asian Critus. One asset is "prepaid premium for land leases" at RMB5.8Bn -- I believe this is tangible (prepaid leases, so expenses won't appear in future periods, as long as the firm is a going concern). With prepaid land leases, net tangible book value is RMB 24.9Bn while market cap is HK15Bn (RMB12.5Bn) so market cap is around 50% of book. PE is below 4 (interim 6 mo net profit is RMB1.54Bn).
Operating cash flow looks strong, equal to EBITDA of RMB1.8Bn for the interim period, but the co raised RMB2.3BN of financing (mainly equity) to fund expansion. Almost RMB1Bn from new shares issued over the past half year (this seems to me, not a huge dilution).
Note, the major reason for the increase in SG&A was an increase in options exercised, from only RMB6M in 2010 to 160M in 2011 - also note salaries were up about RMB100M (this is likely due to wage inflation in China, surprisingly workers are somewhat in short supply for farming). So this hopefully won't be repeated. -- they are approx 192M share options outstanding but the majority have excercise prices between $HK6.75 and HK$8.10 per share. The exception is the ceo who has 66M options with an excercise price of HK1.50 (but at least he'll be motivated to get the stock price up).
They are paying a dividend this year of RMB84M -- didn't pay a dividend last year. So at least will get some income, also shows they care about the stock price a bit.
Overall to me the company looks strong I don't know why it's dropping for sure -- the first drop, issuance of equity at HK$7.50 when the stock was trading at HK$9 -this made sense to drop, but the second drop, if it has anything to do with the rumor that they've changed auditors, is just plain wrong (the news of the previous auditor, Grant Thornton, being acquired by BDO maybe is not well known, and it may be thought that Chaoda really did want to change auditors, but BDO is a well respected accounting firm). So this one really has me scratching my head. It looks very strong, with the exception of the issuance of equity to fund expansion, that has made net profit growth relatively flat.
Market Capitalization and Asset Growth Rates
As economies grow, their banking assets by institution also grow in lock step. The following charts show banking assets at the largest of the banks in the BRIC countries (Brazil, Russia, India and China) compared to assets and growth rates in the largest banks in the US and the EU (plus Switzerland).
institutions have seen very low asset growth over the past three years -- due to a large degree to the Global Financial Crisis in Oct 2008 which forced these countries to cut bank on problem assets and shore up financial ratios.
It is interesting to note that asset growth all the selected BRIC banking institutions was relatively unaffected by the GFC -- BRIC banks on average saw annual average total asset growth in the mid to high teens.
From a total asset level, the largest US and EU based banks still hold the lead in overall assets. Interestingly, Industrial and Commerical Bank of China is the largest bank in China by total assets and market capitalization, and has been growing at an average annual rate of 13.9% per annum over the past three years. This means it will be as large as the largest EU and US bank by assets -- Deutsche Bank -- within the next three years (if growth rates continue).
perspective of market capitalization to net tangible assets, it appears the market has more than priced in growth at the BRIC banks, with market capitalization/tangible book value averaging 2.5x for the BRIC banks on average, compared to 1.3x for the EU & US banks, on average
institutions have seen very low asset growth over the past three years -- due to a large degree to the Global Financial Crisis in Oct 2008 which forced these countries to cut bank on problem assets and shore up financial ratios.
It is interesting to note that asset growth all the selected BRIC banking institutions was relatively unaffected by the GFC -- BRIC banks on average saw annual average total asset growth in the mid to high teens.
From a total asset level, the largest US and EU based banks still hold the lead in overall assets. Interestingly, Industrial and Commerical Bank of China is the largest bank in China by total assets and market capitalization, and has been growing at an average annual rate of 13.9% per annum over the past three years. This means it will be as large as the largest EU and US bank by assets -- Deutsche Bank -- within the next three years (if growth rates continue).
perspective of market capitalization to net tangible assets, it appears the market has more than priced in growth at the BRIC banks, with market capitalization/tangible book value averaging 2.5x for the BRIC banks on average, compared to 1.3x for the EU & US banks, on average
Which Country is the World's Largest Food Producer
In 1890, the United States' 'non-farm' GDP surpassed 'farm' GDP for the first time. Currently in most industrialized countries GDP from agriculture accounts for less than 5% of GDP (according to the CIA World Factbook the US derives less than 2% of its GDP from agriculture). Despite its low 'ranking' in GDP methodology, agriculture forms the base of an economy on which other economic activities stand, in so far that workers cannot work if they don't have food.
It is interesting to ask which country is the world's largest food producer. There are overall two main methods to show which country is the world's largest producer of food. First, by food production by total calorie content (one could say this is a way to judge if the country has sufficient resources to feed its population) and second, by monetary value of the food categories produced. Interestingly, the monetary value appears to get more attention from statisticians and economists -- actually the author is unaware of calculations showing total calorie production by country by food category.
Below in Figure 1 this information is presented -- utilizing USDA production numbers across grain, protein, dairy and selected fruit categories and then taking the average calorie content per ton per food item.
calculations, USDA for production, NutritionData for calorie Content, total calories in 1000's Note a limitation of the above chart is that it does not account for all food categories, such as marine food, nuts, oats and other grains and vegetables.
According to calculations presented in Figure 1, China is clearly the world's largest producer of food by calories. The largest percentage of calories produced in China came from rice at 34% of the total (China accounts for approximately 26% of world production of rice), and wheat at 32% of the total. India, in second place, narrowly beating the total calorie production of the US, derives 37% of its total from rice. The United States is slightly behind India, but ahead of the EU-27 -- the US is unusual due to its relatively large production of corn -- 39% of total calories are produced from corn across the major grain, meat, dairy and fruit categories in the US.
One would expect countries which comparative advantages in land, sun and water to be the food's largest agricultural producers, according to economic theory from Ricardo and Heckscher-Ohlin's theories. However, necessity appears to play an equally important (if not more important role). China and India with the world's two largest populations of citizens, requires high food production for domestic food self-sufficiency. Further, labor also may play a high role in certain crops, such as rice and fruit, which are highly labor intensive.
Taking into account the value in monetary terms, China also appears to be the world's largest agricultural producer, although more narrowly beating out the US. India falls to the bottom of the 5 countries surveyed by monetary value of food produced. The US is a relatively larger producer of protein -- beef, pork and poultry account for 9% of all calories produced in the US (although note that China is a much larger producer of pork than the US, with more than 4x the production of pork in 2010). Meat tends to sell for a significantly higher price than grains. India produces a relatively low level of meat, with poultry, beef and pork only accounting for approximately 2% of the total calories consumed in India in 2010.
It is interesting to ask which country is the world's largest food producer. There are overall two main methods to show which country is the world's largest producer of food. First, by food production by total calorie content (one could say this is a way to judge if the country has sufficient resources to feed its population) and second, by monetary value of the food categories produced. Interestingly, the monetary value appears to get more attention from statisticians and economists -- actually the author is unaware of calculations showing total calorie production by country by food category.
Below in Figure 1 this information is presented -- utilizing USDA production numbers across grain, protein, dairy and selected fruit categories and then taking the average calorie content per ton per food item.
calculations, USDA for production, NutritionData for calorie Content, total calories in 1000's Note a limitation of the above chart is that it does not account for all food categories, such as marine food, nuts, oats and other grains and vegetables.
According to calculations presented in Figure 1, China is clearly the world's largest producer of food by calories. The largest percentage of calories produced in China came from rice at 34% of the total (China accounts for approximately 26% of world production of rice), and wheat at 32% of the total. India, in second place, narrowly beating the total calorie production of the US, derives 37% of its total from rice. The United States is slightly behind India, but ahead of the EU-27 -- the US is unusual due to its relatively large production of corn -- 39% of total calories are produced from corn across the major grain, meat, dairy and fruit categories in the US.
One would expect countries which comparative advantages in land, sun and water to be the food's largest agricultural producers, according to economic theory from Ricardo and Heckscher-Ohlin's theories. However, necessity appears to play an equally important (if not more important role). China and India with the world's two largest populations of citizens, requires high food production for domestic food self-sufficiency. Further, labor also may play a high role in certain crops, such as rice and fruit, which are highly labor intensive.
Taking into account the value in monetary terms, China also appears to be the world's largest agricultural producer, although more narrowly beating out the US. India falls to the bottom of the 5 countries surveyed by monetary value of food produced. The US is a relatively larger producer of protein -- beef, pork and poultry account for 9% of all calories produced in the US (although note that China is a much larger producer of pork than the US, with more than 4x the production of pork in 2010). Meat tends to sell for a significantly higher price than grains. India produces a relatively low level of meat, with poultry, beef and pork only accounting for approximately 2% of the total calories consumed in India in 2010.
Net Present Values to Market Values Oil
Several Canadian Royalty trusts have converted to corporate status over the past two to three years, including Equal Energy (EQU), Penn West (PWE) and Pengrowth (PGH). Many newly converted Canadian Royalty Trust have significant unexplored and undeveloped land holdings, which they did not develop due to capital restraints -- in so far that the royalty trust legal structure required that most net income earned to be paid as dividends.
How can these firms be analyzed for potential value? Canadian firms are required to publish after tax, forecasted discounted net revenue from proven and probable oil and natural gas reserves with SEDAR (the Canadian equivalent of the SEC).
The oil and gas companies selling below future net discounted oil revenues will be undervalued, all other factors equal. The forecasted value is listed as the "PV-10" value below (Present Value of oil and gas reserves, discounted at 10% per year, minus income taxes, development and transport cots, not taking out corporate costs and interest expense).
Table 1: Disclosed Future Value of Proven and Probable Oil and Natural Gas Reserves, year end 2010 Reserves Data, Selected Canadian Oil Firms (and Exco, US based Oil Shale Development Company):
Note in Table 1, the ratio of the PV-10 values for both proven and probable reserves are placed in bold font, and the lower, the more potentially undervalued, all other factors equal.
From table 1, it appears that most of the Albertan oil and gas corporations are trading a bit above their PV-10 values. PV-10 to market capitalization plus debt is between 1 to 2x for most of the firms listed. Pace Oil and Gas is the sole exception, while Equal Energy and Canadian Natural Resources are trading very close to their PV-10 values, on a combined proven and probable basis.
Most US based Oil and Gas Firms trade well above their PV-10 values, as the market assumes (probably correctly) that these firms will discover significant new reserves going forward -- and also possibly on the assumption that energy prices will rise going forward. An example of this is Exco Resources, which is US-based (included in Table 1), which is typical of US firms in so far that it sells at 4.86x its PV-10 value.
Summing up, overall the Albertan energy industry appears to be selling at a discount compared to its US based counterpart for PV-10 values, and may have good expansion potential. This means that the newly converted Albertan Royalty trusts may be undervalued. Future questions include the relative land holdings of the firms compared to the current market valuation, and the ability of these firms to execute on expansion plans, now that they are organized as corporate entities.
How can these firms be analyzed for potential value? Canadian firms are required to publish after tax, forecasted discounted net revenue from proven and probable oil and natural gas reserves with SEDAR (the Canadian equivalent of the SEC).
The oil and gas companies selling below future net discounted oil revenues will be undervalued, all other factors equal. The forecasted value is listed as the "PV-10" value below (Present Value of oil and gas reserves, discounted at 10% per year, minus income taxes, development and transport cots, not taking out corporate costs and interest expense).
Table 1: Disclosed Future Value of Proven and Probable Oil and Natural Gas Reserves, year end 2010 Reserves Data, Selected Canadian Oil Firms (and Exco, US based Oil Shale Development Company):
Note in Table 1, the ratio of the PV-10 values for both proven and probable reserves are placed in bold font, and the lower, the more potentially undervalued, all other factors equal.
From table 1, it appears that most of the Albertan oil and gas corporations are trading a bit above their PV-10 values. PV-10 to market capitalization plus debt is between 1 to 2x for most of the firms listed. Pace Oil and Gas is the sole exception, while Equal Energy and Canadian Natural Resources are trading very close to their PV-10 values, on a combined proven and probable basis.
Most US based Oil and Gas Firms trade well above their PV-10 values, as the market assumes (probably correctly) that these firms will discover significant new reserves going forward -- and also possibly on the assumption that energy prices will rise going forward. An example of this is Exco Resources, which is US-based (included in Table 1), which is typical of US firms in so far that it sells at 4.86x its PV-10 value.
Summing up, overall the Albertan energy industry appears to be selling at a discount compared to its US based counterpart for PV-10 values, and may have good expansion potential. This means that the newly converted Albertan Royalty trusts may be undervalued. Future questions include the relative land holdings of the firms compared to the current market valuation, and the ability of these firms to execute on expansion plans, now that they are organized as corporate entities.
Some Thoughts on the Current Market Volatility
I spent the weekend reviewing the economic situation and the most concerning situation to my mind is Greece and Ireland, in the EU. Northern Europe -- mainly Germany - is effectively transferring capital to Ireland (through Central Bank transfers) and Greece, direct monetary transfers to the government. Losses in the banking system in Ireland, and a lack of tax revenue in Greece to cover governmental debt interest costs are driving the need for capital transfers.
Greece is interesting because it is mainly a governmental problem, not a banking problem -- Greece has serious societal problems. Most other countries with problems in this last downturn saw banks sort of drive the economic problems, (one can think of the US, Ireland, Iceland, Britain) but Greece mainly has problems because of governmental corruption, lack of work ethic and lack of transparency with regards to taxes.
It seems these problems are fixable (if the problems are only isolated to Greece and Ireland), in so far that Ireland isn't that large -- Germany can cover Ireland's banking debts (Germany is the fourth largest economy in the world, Ireland has only 4.4M people, although Ireland's banking debts are quite large, as shown in Figure 1 below) while Greece,seems to be coming back every year for funds. Greece, it seems, eventually they have to start paying taxes and working a bit longer -- in any case Greece's sovereign debt is not that large as a total sum.
Contagion can happen if there are additional large writedowns of sovereign debt in other EU countries -- one can think of Portugal -- but especially Spain and Italy. So far Spain looks ok -- the debt to GDP is in the 60-65% of GDP range (the US is now getting up to over 90% of GDP). Greece is up at 142% of gdp --this is why there are problems. I don't think there will be problems with Spanish governmental debt too soon, due to the relatively moderate debt/GDP level.
However, Italy does not look strong with debt/GDP of 114% -- but they do not seem to be a major concern for the markets now. Italian debt is yielding around 4.5% -- not in danger territory. Actually also Belgium looks not so great, with debt/GDP at 100%. The other EU countries look ok (with the exception of Portugal but they are getting IMF assistance).
So the main problem is that problems in Greece and Ireland can trigger problems in Italy and Belgium. Here is a nice chart showing the interrelations
So far it appears problems in Greece (and note, Greece is much smaller than Ireland, in terms of debt owed) are more impacting Germany and the UK. If there are problems in Italy, in particular, there will really be problems in Europe - in so far that Italy owes significant total amounts of debt to countries outside of its borders.
The other issues, slower growth in China-- so far my impression is that China is following growth at all costs so is still going to register 9% growth this year (even with the slowdown) according the the IMF. The US is shaky -- I am not sure what to make of the stimulus and the Quantitative easing coming to an end.
So overall things look shaky out there but so far not nearly as bad as the subprime problems going into late 2008, when major institutions were failing every month (but it would be this bad if Italy was having serious economic and debt problems).
In terms of holdings, I think oil should be ok -- interest rates will have to be kept low in the EU, leaving commodity inflation -- but copper may be a bit more unpredictable -- copper is being driven by China,(and mainly construction in China) -- I'll look to pare down a bit of exposure here).
Greece is interesting because it is mainly a governmental problem, not a banking problem -- Greece has serious societal problems. Most other countries with problems in this last downturn saw banks sort of drive the economic problems, (one can think of the US, Ireland, Iceland, Britain) but Greece mainly has problems because of governmental corruption, lack of work ethic and lack of transparency with regards to taxes.
It seems these problems are fixable (if the problems are only isolated to Greece and Ireland), in so far that Ireland isn't that large -- Germany can cover Ireland's banking debts (Germany is the fourth largest economy in the world, Ireland has only 4.4M people, although Ireland's banking debts are quite large, as shown in Figure 1 below) while Greece,seems to be coming back every year for funds. Greece, it seems, eventually they have to start paying taxes and working a bit longer -- in any case Greece's sovereign debt is not that large as a total sum.
Contagion can happen if there are additional large writedowns of sovereign debt in other EU countries -- one can think of Portugal -- but especially Spain and Italy. So far Spain looks ok -- the debt to GDP is in the 60-65% of GDP range (the US is now getting up to over 90% of GDP). Greece is up at 142% of gdp --this is why there are problems. I don't think there will be problems with Spanish governmental debt too soon, due to the relatively moderate debt/GDP level.
However, Italy does not look strong with debt/GDP of 114% -- but they do not seem to be a major concern for the markets now. Italian debt is yielding around 4.5% -- not in danger territory. Actually also Belgium looks not so great, with debt/GDP at 100%. The other EU countries look ok (with the exception of Portugal but they are getting IMF assistance).
So the main problem is that problems in Greece and Ireland can trigger problems in Italy and Belgium. Here is a nice chart showing the interrelations
So far it appears problems in Greece (and note, Greece is much smaller than Ireland, in terms of debt owed) are more impacting Germany and the UK. If there are problems in Italy, in particular, there will really be problems in Europe - in so far that Italy owes significant total amounts of debt to countries outside of its borders.
The other issues, slower growth in China-- so far my impression is that China is following growth at all costs so is still going to register 9% growth this year (even with the slowdown) according the the IMF. The US is shaky -- I am not sure what to make of the stimulus and the Quantitative easing coming to an end.
So overall things look shaky out there but so far not nearly as bad as the subprime problems going into late 2008, when major institutions were failing every month (but it would be this bad if Italy was having serious economic and debt problems).
In terms of holdings, I think oil should be ok -- interest rates will have to be kept low in the EU, leaving commodity inflation -- but copper may be a bit more unpredictable -- copper is being driven by China,(and mainly construction in China) -- I'll look to pare down a bit of exposure here).
Monday, 10 October 2011
A Millionaire Code Is Finally Revealed
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how can Buy a Stocks
he query of the century for many could be businessmen and women may be why on earth would anyone buy stocks? Quite frankly the query should be why on earth would not they? Proudly owning stock in an organization means that you have stock in that company. You will have an investment, however meager, within the success and failure of that company and for that reason you may have a little bit bit of possession in the company as well.
Many individuals purchase stocks for a lot of different reasons. There are about as many causes for the purchases as there are people. Some people hope to accumulate a considerable amount of stock inside a company in order that they might wield some degree of energy inside that company. This is not always the case although in most firms those that personal massive quantities of stock do have a bit of a voice relating to the selections being made concerning the way forward for the corporate (companies are accountable to those that maintain shares of stock in spite of everything)
Others wish to personal a bit piece of an organization that produces a product they consider in. I like chocolate. For me, it makes perfect sense to take a position money in Hershey stocks. It’s a product that I imagine has a strong future (I also happen to know a variety of different chocolate lovers), a superb product, and real potential for brand new products, and a watch on rising markets. These are things that those buy stocks ought to have a look at earlier than buying stock. On the similar time, I understand that Hershey stocks are very established and any earnings on my few stocks are going to be minimal. On the similar time, this is a very stable stock that’s possible to bring in some money 12 months after year. Not a sprint stock to make certain but an endurance stock that I get a kick out of together with in my portfolio. In other phrases, some folks purchase stock just because they like the product.
Day traders purchase and sell stocks like a few of breathe in anticipation of earning money and nothing more (nicely for the most half, some do it for the rush and the fun of the hunt for those elusive stock market moments of triumph). Of course most individuals purchase stocks in hopes of ample returns on their investments, some just count on extra instant returns than others. Day trading is a drive by means of kind of investing in comparison with the long strains that people stand in inside ready for the long term payoffs that retirements are funded upon.
You will find as many causes for investing, as you can find causes to purchase stock. The questions you need to be discovering out for yourself is why people by sure stocks and that’s question that’s going to be individual to every particular person for each stock they purchase. There are no magic formulation for achievement although there are lots of things you can do to minimize the risks of failure when investing in stocks in bonds.
If you’re thinking about investing in stocks your first stop ought to be the library. There are a lot of books on the historical past of stocks, monetary planning, and that offer wonderful advice on building a portfolio. Once you have a number of questions in mind it is best to take your financial savings and your inquiries to a good stock broker and create a method that’s tailor-made to satisfy your investing needs.
Many individuals purchase stocks for a lot of different reasons. There are about as many causes for the purchases as there are people. Some people hope to accumulate a considerable amount of stock inside a company in order that they might wield some degree of energy inside that company. This is not always the case although in most firms those that personal massive quantities of stock do have a bit of a voice relating to the selections being made concerning the way forward for the corporate (companies are accountable to those that maintain shares of stock in spite of everything)
Others wish to personal a bit piece of an organization that produces a product they consider in. I like chocolate. For me, it makes perfect sense to take a position money in Hershey stocks. It’s a product that I imagine has a strong future (I also happen to know a variety of different chocolate lovers), a superb product, and real potential for brand new products, and a watch on rising markets. These are things that those buy stocks ought to have a look at earlier than buying stock. On the similar time, I understand that Hershey stocks are very established and any earnings on my few stocks are going to be minimal. On the similar time, this is a very stable stock that’s possible to bring in some money 12 months after year. Not a sprint stock to make certain but an endurance stock that I get a kick out of together with in my portfolio. In other phrases, some folks purchase stock just because they like the product.
Day traders purchase and sell stocks like a few of breathe in anticipation of earning money and nothing more (nicely for the most half, some do it for the rush and the fun of the hunt for those elusive stock market moments of triumph). Of course most individuals purchase stocks in hopes of ample returns on their investments, some just count on extra instant returns than others. Day trading is a drive by means of kind of investing in comparison with the long strains that people stand in inside ready for the long term payoffs that retirements are funded upon.
You will find as many causes for investing, as you can find causes to purchase stock. The questions you need to be discovering out for yourself is why people by sure stocks and that’s question that’s going to be individual to every particular person for each stock they purchase. There are no magic formulation for achievement although there are lots of things you can do to minimize the risks of failure when investing in stocks in bonds.
If you’re thinking about investing in stocks your first stop ought to be the library. There are a lot of books on the historical past of stocks, monetary planning, and that offer wonderful advice on building a portfolio. Once you have a number of questions in mind it is best to take your financial savings and your inquiries to a good stock broker and create a method that’s tailor-made to satisfy your investing needs.
Stock Market Quotes, Free Stock Market Quotes Online
Free stock market quotes are valuable for taking a look at your investments and determining whether or not or not you wish to trade within the stock market. There are several free stock quotes online and some of the popular is Yahoo Finance. This web site will assist you to search your stocks to see the growth or decline and decide if you wish to purchase or sell. Free stock quotes are perfect for the novice investor. They’ll practice their abilities with out investing any money until they are comfortable enough to actually invest.
Once you resolve to invest, though, you will want to get with a broker and there are further fees related to trading. Nonetheless, there are lots of do it yourself places that solely require a small payment and will typically have beneficial articles and free stock quotes so you possibly can watch your portfolio regularly to ensure you have made sound investments.
Before investing within the stock market, you need to be aware of the fundamentals of stock trading. This can be learned by doing some analysis on-line or by getting a book at your native library. As soon as you understand the fundamentals, you can start looking for particular person investments. It is suggested that the novice investor start off with solely the amount of cash they can afford to lose. There are no ensures you will earn money and sometimes you’ll lose it. So, it is very important fastidiously watch the stock market by taking a look at free stock quotes every day. It’s possible you’ll want to purchase or sell your stocks relying on how nicely the individual stock is doing and what forecasts are for the stock.
Free stock market quotes are also great for lessons in finance or the stock market. This is best for investor clubs, high school courses or faculty projects. You possibly can both use mock money to track an funding from begin to finish with out actually placing in money or you need to use pooled cash to determine which investment you’ll watch and what you’ll do with it. This is a nice method to have a bit of enjoyable with a group while learning about investments and presumably making a bit of money.
Once you resolve to invest, though, you will want to get with a broker and there are further fees related to trading. Nonetheless, there are lots of do it yourself places that solely require a small payment and will typically have beneficial articles and free stock quotes so you possibly can watch your portfolio regularly to ensure you have made sound investments.
Before investing within the stock market, you need to be aware of the fundamentals of stock trading. This can be learned by doing some analysis on-line or by getting a book at your native library. As soon as you understand the fundamentals, you can start looking for particular person investments. It is suggested that the novice investor start off with solely the amount of cash they can afford to lose. There are no ensures you will earn money and sometimes you’ll lose it. So, it is very important fastidiously watch the stock market by taking a look at free stock quotes every day. It’s possible you’ll want to purchase or sell your stocks relying on how nicely the individual stock is doing and what forecasts are for the stock.
Free stock market quotes are also great for lessons in finance or the stock market. This is best for investor clubs, high school courses or faculty projects. You possibly can both use mock money to track an funding from begin to finish with out actually placing in money or you need to use pooled cash to determine which investment you’ll watch and what you’ll do with it. This is a nice method to have a bit of enjoyable with a group while learning about investments and presumably making a bit of money.
Market may open flat to slightly higher
Trading of S&P CNX Nifty on the Singapore stock exchange indicates a gain of 18 points at the opening bell. Asian stocks were mixed.
Key benchmark indices surged on Friday, 7 October 2011, snapping a four-day losing streak, as Indian shares played a catch up with a rally in world stocks on Thursday, 6 October 2011, when Indian market was closed on account of Dassera. World stocks had surged on Thursday, 6 October 2011, driven by continued hopes Europe will recapitalize its banks to tame euro-zone debt crisis.
Foreign institutional investors (FIIs) bought shares worth Rs 491.55 crore on Friday, 7 October 2011 as per provisional figures. The inflow on Friday came after heavy outflow during the preceding three trading sessions. FIIs had dumped shares worth a net Rs 2806.19 crore in the first three trading sessions from 3 October to 5 October 2011.
Telecom stocks will be in focus today, 10 October 2011, as telecom minister Kapil Sibal unveils a draft of the government's new national telecommunications policy today, 10 October 2011. The new telecom policy is being prepared at a time when there is confusion in the industry over issues on licensing, spectrum allocation, tariffs and pricing. The policy is expected to address rules on sharing and trading of bandwidth, mergers and acquisitions, and mobile virtual network operators. To ensure transparency, the draft telecommunications policy will be posted on the telecommunications department's website for public comments.
IT stocks will be in focus after Telecom and Information Technology Minister Kapil Sibal on Friday, 7 October 2011, said that the government is considering offering tax incentives to software exporters once the Direct Taxes Code is implemented in April 2012. The Direct Taxes Code will replace several existing laws relating to direct taxes such as income tax and corporate tax. Sibal also said he expects the country's software industry to generate nearly $300 billion in revenue by 2020, compared with the current $89 billion. The minister said he expects the new telecom and information and communications technology policies to be in place by the end of this year.
Workers at two Suzuki Motor Corp. factories have been on strike since Friday afternoon, forcing Maruti Suzuki India to halt production at its Manesar plant in north India's Haryana state. As well as the Manesar plant, workers at Suzuki Powertrain India -- which makes diesel engines for Maruti Suzuki -- are also on strike. Suzuki owns 70% of Suzuki Powertrain, while Maruti holds the remaining stake. The latest labor unrest at Maruti follows a month-long spat between the company's management and the workers at its Manesar factory, which caused a production loss of Rs 600 crore ($122 million) and affected output of three car models. Maruti halted operations at Manesar on 29 August 2011 after it asked 950 workers to sign a good conduct bond before they could enter the factory. The move came after the company said it discovered serious and deliberate quality problems in cars made at the plant.
The near-term major trigger for the market is Q2 September 2011 results. The results are expected to be muted-to-weak due slower volume growth due to slowdown in domestic demand, higher input costs, rising wages, higher interest rates and slowdown in investment growth. Advance tax data from top 100 companies corroborates this view. The advance tax payment by top 100 companies rose a modest 9.9% in Q2 September 2011 from a year ago against 19% growth in Q1 June 2011, suggesting corporate profit growth is likely to be muted in the second quarter.
Among the big companies that have paid lower advance tax, indicating a drop in profits, include State Bank of India (SBI), Maruti Suzuki India and state-run Neyveli Lignite Corporation. SBI's advance tax payment declined 14.2% to Rs 1650 crore in Q2 September 2011. Maruti's tax payment fell 55.8% to Rs 120 crore. Neyveli Lignite tax payment plunged 50.1% to Rs 66 crore. But, Reliance Industries' (RIL) advance tax payment jumped 37.6% to Rs 1800 crore, hinting at good Q2 results from the diversified firm.
Investors will closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook. IT bellwether Infosys kickstarts the Q2 September 2011 earnings season on 12 October 2011. Reliance Industries unveils Q2 results on 15 October 2011. IT major TCS, housing finance major HDFC and media major Zee Entertainment Enterprises unveil Q2 results on 17 October 2011. Jet Airways (India), Hero MotoCorp and HCL Technologies unveil quarterly results on 18 October 2011. HDFC Bank unveils Q2 results on 19 October 2011.
Bajaj Auto, Cairn India and Thermax unveil quarterly results on 20 October 2011. Engineering & construction major L&T, paints major Asian Paints and Godrej Consumer Products reveal Q2 results on 21 October 2011. Axis Bank unveils Q2 results on 22 October 2011. Titan Industries unveils Q2 results on 24 October 2011. Dr. Reddy's Lab unveils Q2 results on 25 October 2011. Maruti Suzuki reports Q2 results on 29 October 2011. Dabur India, Colgate Palmolive (India) and BPCL unveil Q2 results on 31 October 2011. Cement major ACC and Aditya Birla Nuvo unveil quarterly results on 1 November 2011.
Lower global commodity prices may ease pressure on corporate profit margins arising from higher raw material prices and at the macro level it could help ease inflation pressure. However, a weak rupee will offset the benefit of the recent steep fall in global commodity prices triggered by global growth worries. Most commodities imported by India, particularly oil, are denominated in dollars making these expensive for India. The rupee slumped 8.8% percent in July to September 2011 to 48.97/98, its largest quarterly fall since the same period in 2008. The Standard & Poor's GSCI Index of 24 commodities, hit a 10-month low last week.
The market regulator Securities and Exchange Board of India recently set a minimum net worth of Rs 100 crore for companies that wish to issue structured products or market-linked debentures to raise funds. Sebi also set the minimum size for such issues at Rs 10 lakh. Market-linked debentures are hybrid products which have the features of usual debt securities, but offer market-linked returns like an exchange-traded derivative. The issuer company will have to appoint a third party, a credit-rating company registered with the regulator, which will provide the value of the security at least once a week, Sebi said in a circular.
The government last month raised the limit of overseas borrowing for companies to $750 million from $500 million. Indian companies can also now raise loans up to $1 billion in Chinese yuan.
Given the lackluster initial FII response to the government's sharply raising the ceiling of FII investment in long-term corporate bonds issued by the companies in the infrastructure sector in March 2011, the government on 12 September 2011, further relaxed the norms on FII investment in such bonds. Sebi had in early August 2011 allowed Qualified Foreign Investors (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of $3 billion within the total ceiling of $25 billion.
The government, recently raised its borrowing target for the current fiscal year by Rs 52800 crore, surprising the market and fueling worries that it may even overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. The government will borrow Rs 2.2 lakh crore during October 2011-March 2012 period, or the second half of the fiscal year, compared with the target of Rs 1.67 lakh crore announced in budget in February 2011. C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, on 29 September 2011 said it is going to be difficult to achieve fiscal deficit target of 4.6% of GDP for the year ending March 2012.
The government's new borrowing programme may crowd out private borrowers who come into the market in the second half of the year. Credit growth normally picks up after October every year when the busy season starts.
Atsi Sheth, a New York-based vice president and senior analyst at Moody's Investors Service said in a media interview recently that Moody's is unlikely to change its rating outlook on India for now, though the extent of the increase in the government's borrowing target is a surprise. The possibility of fiscal slippage is, however, already factored into the sovereign rating, Sheth said.
Standard & Poor's Ratings Services on 3 October 2011 said it is maintaining its view that India will struggle to meet its fiscal deficit target. Takahira Ogawa, director of Sovereign and International Public Finance Ratings at S&P said India must prove its intent to continue with the process of fiscal consolidation in the medium term.
Monsoon rains at the end of the June-September season were 1% above the 50-year average, raising hopes of improved crop supplies at a time when the country is battling high food prices. The rains normally start subsiding in the first week of September, but they continued two weeks longer this year. This has boosted the prospects of not only summer-sown crops such as rice, but also winter-sown staples like wheat, because of good soil moisture.
Sowing of winter crops usually starts in October and picks up between the end of November and the first half of December. Apart from wheat, rapeseed and pulses are among other important crops grown during the winter season. India is aiming for a record foodgrain output of 245 million tons in the crop year that started on 1 July.
Rangarajan on 29 September 2011 said there has to be definite signs of inflation falling before the Reserve Bank of India can reverse its current policy. Reserve Bank of India (RBI) deputy governor Subir Gokarn on 28 September 2011 said poor supply responses to rising demand for protein-rich food aren't helping to lower the inflation rate. His comment underscores the central bank's growing dismay over the government's loose fiscal stance that is diluting monetary policy moves and weakening its battle against inflation. Energy prices have remained very steady. I think (it) is a huge problem to deal with because it certainly reduces the space that monetary policy has, Mr. Gokarn said at a conference.
Food inflation accelerated in the week ended 24 September 2011, reflecting prolonged inflationary pressures and mounting pressure on the central bank to continue its rate increase cycle. Wholesale price index-based inflation quickened to 9.41% from a year earlier, compared with 9.13% the previous week, according to data issued on Friday, 7 October 2011, by the Ministry of Commerce and Industry. On a week-on-week basis, the food articles index rose a marginal 0.2% to 197.7, recording the eighth successive week of rising prices.
Data on industrial production for August 2011 due on Wednesday, 12 October 2011 and that on wholesale price index for September 2011 due on Friday, 14 October 2011, could provide cues on the Reserve Bank of India's likely monetary policy stance at the half-yearly review of the monetary policy on 25 October 2011.
RBI said at a monetary policy review on 16 September 2011 that it is imperative to persist with the current anti-inflationary stance because a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. The RBI raised repo rate by 25 basis points on 16 September 2011.
Going forward, the stance of the monetary will be influenced by signs of downward movement in the inflation trajectory, to which the moderation in demand is expected to contribute, and the implications of global developments, RBI said in its 16 September 2011 policy statement. The overall tone of the RBI's latest policy was softer than the previous policy announcement which was extremely hawkish.
Inflation in India remains high and will probably remain in a range of 9% to 10% until November 2011, Gokarn said last month. RBI said on 16 September 2011 that corporate margins moderated across several sectors in Q1 June 2011 compared to levels in Q4 March 2011. However, barring a few sectors, significant pass-through of rising input costs is still visible, RBI said.
RBI governor D Subbarao, recently said inflation rate remains above the level the central bank deems acceptable. Inflation has been fairly stubborn, Subbarao said in New York. Above a threshold, you can't accept high inflation to have higher growth, he said, adding that the price-rise limit is as much as 6% for the nation. A rate of 4% to 6% is the short-term comfort range for inflation, Subbarao said. He said the central expects inflation to slow by March 2012, but more slowly than initially expected. Intervention in forex markets brings unexpected consequences, Subbarao said. RBI is scheduled to announce the half-yearly review of the monetary policy on 25 October 2011.
India's services sector contracted for the first time in more than two years as new business dried up and expectations weakened amid concern over a flagging world economy, a survey showed on 5 October 2011. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, plunged in September to 49.8 -- its lowest reading since April 2009 -- and below the 50 mark which separates growth from contraction.
The slowdown in growth has continued to broaden with the service sector seeing a further slowdown in economic momentum, HSBC economist Leif Eskesen said. The new business sub-index sank to a 28-month low of 51.6 in September, down from 54.9 in August. The weak expansion in new business -- the main cause of the stagnation in activity -- meant employment levels fell for a third consecutive month. Despite harsh conditions firms were able to pass on rising input costs to customers, albeit at a slightly lower pace than in August.
The growth in manufacturing sector nearly stalled in September 2011, hitting its weakest spot since March 2009 on slowing output and orders growth following a series of interest rate hikes, data showed on 3 October 2011. The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 in September 2011 from 52.6 in August 2011, very close to the 50 mark which divides growth and contraction. The output index plunged by its biggest amount in one month since November 2008, to 51.1 from 56.
Exports jumped 44.25% to $24.3 billion in August 2011 from a year earlier, while imports for the month rose 41.82% to $38.4 billion, leaving a trade deficit of $14 billion, the latest government data showed.
Asian shares were mixed on Monday, 10 October 2011, as Europe's debt woes came back into focus at the end of last week, with credit-rating downgrades for Italy and Spain offsetting better-than-expected jobs data from the US. The key benchmark indices in China, Hong Kong and Indonesia fell by between 0.27% to 0.91%.
European leaders are working to reassure markets that they are making progress toward a solution to the region's debt crisis, and German Chancellor Angela Merkel and French President Nicolas Sarkozy reportedly said over the weekend that they have reached an agreement to strengthen the European banking system. However, details of the plan aren't likely to be available until the end of the month.
After nearly falling into bear-market territory, US stocks on Friday finished the week higher, building gains on encouraging jobs data and hopes that Europe is dealing with its debt crisis. Helping the US jobs picture Friday, the US Labor Department said on Friday employers last month added more jobs than analysts had expected. Nonfarm payrolls data for July and August also were revised upward. While the US unemployment rate held steady at 9.1%, the government's payrolls report supported other data that have lessened fears the US economy was heading into another recession.
Key benchmark indices surged on Friday, 7 October 2011, snapping a four-day losing streak, as Indian shares played a catch up with a rally in world stocks on Thursday, 6 October 2011, when Indian market was closed on account of Dassera. World stocks had surged on Thursday, 6 October 2011, driven by continued hopes Europe will recapitalize its banks to tame euro-zone debt crisis.
Foreign institutional investors (FIIs) bought shares worth Rs 491.55 crore on Friday, 7 October 2011 as per provisional figures. The inflow on Friday came after heavy outflow during the preceding three trading sessions. FIIs had dumped shares worth a net Rs 2806.19 crore in the first three trading sessions from 3 October to 5 October 2011.
Telecom stocks will be in focus today, 10 October 2011, as telecom minister Kapil Sibal unveils a draft of the government's new national telecommunications policy today, 10 October 2011. The new telecom policy is being prepared at a time when there is confusion in the industry over issues on licensing, spectrum allocation, tariffs and pricing. The policy is expected to address rules on sharing and trading of bandwidth, mergers and acquisitions, and mobile virtual network operators. To ensure transparency, the draft telecommunications policy will be posted on the telecommunications department's website for public comments.
IT stocks will be in focus after Telecom and Information Technology Minister Kapil Sibal on Friday, 7 October 2011, said that the government is considering offering tax incentives to software exporters once the Direct Taxes Code is implemented in April 2012. The Direct Taxes Code will replace several existing laws relating to direct taxes such as income tax and corporate tax. Sibal also said he expects the country's software industry to generate nearly $300 billion in revenue by 2020, compared with the current $89 billion. The minister said he expects the new telecom and information and communications technology policies to be in place by the end of this year.
Workers at two Suzuki Motor Corp. factories have been on strike since Friday afternoon, forcing Maruti Suzuki India to halt production at its Manesar plant in north India's Haryana state. As well as the Manesar plant, workers at Suzuki Powertrain India -- which makes diesel engines for Maruti Suzuki -- are also on strike. Suzuki owns 70% of Suzuki Powertrain, while Maruti holds the remaining stake. The latest labor unrest at Maruti follows a month-long spat between the company's management and the workers at its Manesar factory, which caused a production loss of Rs 600 crore ($122 million) and affected output of three car models. Maruti halted operations at Manesar on 29 August 2011 after it asked 950 workers to sign a good conduct bond before they could enter the factory. The move came after the company said it discovered serious and deliberate quality problems in cars made at the plant.
The near-term major trigger for the market is Q2 September 2011 results. The results are expected to be muted-to-weak due slower volume growth due to slowdown in domestic demand, higher input costs, rising wages, higher interest rates and slowdown in investment growth. Advance tax data from top 100 companies corroborates this view. The advance tax payment by top 100 companies rose a modest 9.9% in Q2 September 2011 from a year ago against 19% growth in Q1 June 2011, suggesting corporate profit growth is likely to be muted in the second quarter.
Among the big companies that have paid lower advance tax, indicating a drop in profits, include State Bank of India (SBI), Maruti Suzuki India and state-run Neyveli Lignite Corporation. SBI's advance tax payment declined 14.2% to Rs 1650 crore in Q2 September 2011. Maruti's tax payment fell 55.8% to Rs 120 crore. Neyveli Lignite tax payment plunged 50.1% to Rs 66 crore. But, Reliance Industries' (RIL) advance tax payment jumped 37.6% to Rs 1800 crore, hinting at good Q2 results from the diversified firm.
Investors will closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook. IT bellwether Infosys kickstarts the Q2 September 2011 earnings season on 12 October 2011. Reliance Industries unveils Q2 results on 15 October 2011. IT major TCS, housing finance major HDFC and media major Zee Entertainment Enterprises unveil Q2 results on 17 October 2011. Jet Airways (India), Hero MotoCorp and HCL Technologies unveil quarterly results on 18 October 2011. HDFC Bank unveils Q2 results on 19 October 2011.
Bajaj Auto, Cairn India and Thermax unveil quarterly results on 20 October 2011. Engineering & construction major L&T, paints major Asian Paints and Godrej Consumer Products reveal Q2 results on 21 October 2011. Axis Bank unveils Q2 results on 22 October 2011. Titan Industries unveils Q2 results on 24 October 2011. Dr. Reddy's Lab unveils Q2 results on 25 October 2011. Maruti Suzuki reports Q2 results on 29 October 2011. Dabur India, Colgate Palmolive (India) and BPCL unveil Q2 results on 31 October 2011. Cement major ACC and Aditya Birla Nuvo unveil quarterly results on 1 November 2011.
Lower global commodity prices may ease pressure on corporate profit margins arising from higher raw material prices and at the macro level it could help ease inflation pressure. However, a weak rupee will offset the benefit of the recent steep fall in global commodity prices triggered by global growth worries. Most commodities imported by India, particularly oil, are denominated in dollars making these expensive for India. The rupee slumped 8.8% percent in July to September 2011 to 48.97/98, its largest quarterly fall since the same period in 2008. The Standard & Poor's GSCI Index of 24 commodities, hit a 10-month low last week.
The market regulator Securities and Exchange Board of India recently set a minimum net worth of Rs 100 crore for companies that wish to issue structured products or market-linked debentures to raise funds. Sebi also set the minimum size for such issues at Rs 10 lakh. Market-linked debentures are hybrid products which have the features of usual debt securities, but offer market-linked returns like an exchange-traded derivative. The issuer company will have to appoint a third party, a credit-rating company registered with the regulator, which will provide the value of the security at least once a week, Sebi said in a circular.
The government last month raised the limit of overseas borrowing for companies to $750 million from $500 million. Indian companies can also now raise loans up to $1 billion in Chinese yuan.
Given the lackluster initial FII response to the government's sharply raising the ceiling of FII investment in long-term corporate bonds issued by the companies in the infrastructure sector in March 2011, the government on 12 September 2011, further relaxed the norms on FII investment in such bonds. Sebi had in early August 2011 allowed Qualified Foreign Investors (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of $3 billion within the total ceiling of $25 billion.
The government, recently raised its borrowing target for the current fiscal year by Rs 52800 crore, surprising the market and fueling worries that it may even overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. The government will borrow Rs 2.2 lakh crore during October 2011-March 2012 period, or the second half of the fiscal year, compared with the target of Rs 1.67 lakh crore announced in budget in February 2011. C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, on 29 September 2011 said it is going to be difficult to achieve fiscal deficit target of 4.6% of GDP for the year ending March 2012.
The government's new borrowing programme may crowd out private borrowers who come into the market in the second half of the year. Credit growth normally picks up after October every year when the busy season starts.
Atsi Sheth, a New York-based vice president and senior analyst at Moody's Investors Service said in a media interview recently that Moody's is unlikely to change its rating outlook on India for now, though the extent of the increase in the government's borrowing target is a surprise. The possibility of fiscal slippage is, however, already factored into the sovereign rating, Sheth said.
Standard & Poor's Ratings Services on 3 October 2011 said it is maintaining its view that India will struggle to meet its fiscal deficit target. Takahira Ogawa, director of Sovereign and International Public Finance Ratings at S&P said India must prove its intent to continue with the process of fiscal consolidation in the medium term.
Monsoon rains at the end of the June-September season were 1% above the 50-year average, raising hopes of improved crop supplies at a time when the country is battling high food prices. The rains normally start subsiding in the first week of September, but they continued two weeks longer this year. This has boosted the prospects of not only summer-sown crops such as rice, but also winter-sown staples like wheat, because of good soil moisture.
Sowing of winter crops usually starts in October and picks up between the end of November and the first half of December. Apart from wheat, rapeseed and pulses are among other important crops grown during the winter season. India is aiming for a record foodgrain output of 245 million tons in the crop year that started on 1 July.
Rangarajan on 29 September 2011 said there has to be definite signs of inflation falling before the Reserve Bank of India can reverse its current policy. Reserve Bank of India (RBI) deputy governor Subir Gokarn on 28 September 2011 said poor supply responses to rising demand for protein-rich food aren't helping to lower the inflation rate. His comment underscores the central bank's growing dismay over the government's loose fiscal stance that is diluting monetary policy moves and weakening its battle against inflation. Energy prices have remained very steady. I think (it) is a huge problem to deal with because it certainly reduces the space that monetary policy has, Mr. Gokarn said at a conference.
Food inflation accelerated in the week ended 24 September 2011, reflecting prolonged inflationary pressures and mounting pressure on the central bank to continue its rate increase cycle. Wholesale price index-based inflation quickened to 9.41% from a year earlier, compared with 9.13% the previous week, according to data issued on Friday, 7 October 2011, by the Ministry of Commerce and Industry. On a week-on-week basis, the food articles index rose a marginal 0.2% to 197.7, recording the eighth successive week of rising prices.
Data on industrial production for August 2011 due on Wednesday, 12 October 2011 and that on wholesale price index for September 2011 due on Friday, 14 October 2011, could provide cues on the Reserve Bank of India's likely monetary policy stance at the half-yearly review of the monetary policy on 25 October 2011.
RBI said at a monetary policy review on 16 September 2011 that it is imperative to persist with the current anti-inflationary stance because a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. The RBI raised repo rate by 25 basis points on 16 September 2011.
Going forward, the stance of the monetary will be influenced by signs of downward movement in the inflation trajectory, to which the moderation in demand is expected to contribute, and the implications of global developments, RBI said in its 16 September 2011 policy statement. The overall tone of the RBI's latest policy was softer than the previous policy announcement which was extremely hawkish.
Inflation in India remains high and will probably remain in a range of 9% to 10% until November 2011, Gokarn said last month. RBI said on 16 September 2011 that corporate margins moderated across several sectors in Q1 June 2011 compared to levels in Q4 March 2011. However, barring a few sectors, significant pass-through of rising input costs is still visible, RBI said.
RBI governor D Subbarao, recently said inflation rate remains above the level the central bank deems acceptable. Inflation has been fairly stubborn, Subbarao said in New York. Above a threshold, you can't accept high inflation to have higher growth, he said, adding that the price-rise limit is as much as 6% for the nation. A rate of 4% to 6% is the short-term comfort range for inflation, Subbarao said. He said the central expects inflation to slow by March 2012, but more slowly than initially expected. Intervention in forex markets brings unexpected consequences, Subbarao said. RBI is scheduled to announce the half-yearly review of the monetary policy on 25 October 2011.
India's services sector contracted for the first time in more than two years as new business dried up and expectations weakened amid concern over a flagging world economy, a survey showed on 5 October 2011. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, plunged in September to 49.8 -- its lowest reading since April 2009 -- and below the 50 mark which separates growth from contraction.
The slowdown in growth has continued to broaden with the service sector seeing a further slowdown in economic momentum, HSBC economist Leif Eskesen said. The new business sub-index sank to a 28-month low of 51.6 in September, down from 54.9 in August. The weak expansion in new business -- the main cause of the stagnation in activity -- meant employment levels fell for a third consecutive month. Despite harsh conditions firms were able to pass on rising input costs to customers, albeit at a slightly lower pace than in August.
The growth in manufacturing sector nearly stalled in September 2011, hitting its weakest spot since March 2009 on slowing output and orders growth following a series of interest rate hikes, data showed on 3 October 2011. The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 in September 2011 from 52.6 in August 2011, very close to the 50 mark which divides growth and contraction. The output index plunged by its biggest amount in one month since November 2008, to 51.1 from 56.
Exports jumped 44.25% to $24.3 billion in August 2011 from a year earlier, while imports for the month rose 41.82% to $38.4 billion, leaving a trade deficit of $14 billion, the latest government data showed.
Asian shares were mixed on Monday, 10 October 2011, as Europe's debt woes came back into focus at the end of last week, with credit-rating downgrades for Italy and Spain offsetting better-than-expected jobs data from the US. The key benchmark indices in China, Hong Kong and Indonesia fell by between 0.27% to 0.91%.
European leaders are working to reassure markets that they are making progress toward a solution to the region's debt crisis, and German Chancellor Angela Merkel and French President Nicolas Sarkozy reportedly said over the weekend that they have reached an agreement to strengthen the European banking system. However, details of the plan aren't likely to be available until the end of the month.
After nearly falling into bear-market territory, US stocks on Friday finished the week higher, building gains on encouraging jobs data and hopes that Europe is dealing with its debt crisis. Helping the US jobs picture Friday, the US Labor Department said on Friday employers last month added more jobs than analysts had expected. Nonfarm payrolls data for July and August also were revised upward. While the US unemployment rate held steady at 9.1%, the government's payrolls report supported other data that have lessened fears the US economy was heading into another recession.
Ingersoll Rand India Ltd has informed BSE
Ingersoll Rand India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on April 28, 2008, for taking on record the Audited Financial Results for the year ended March 31, 2008 and also to recommend a final dividend for the year ending March 31, 2008.
Suggestion:
Corporate holds close to Rs 600 crore in cash or roughly Rs 200 per share in cash. There could be a large dividend pay-out or announcement of new business plans..stock is worth taking a chance with a Rs 300 stop loss.
Suggestion:
Corporate holds close to Rs 600 crore in cash or roughly Rs 200 per share in cash. There could be a large dividend pay-out or announcement of new business plans..stock is worth taking a chance with a Rs 300 stop loss.
US Bond Market Ready To Crack
When the nation's most prominent bond investor, the man who is managing the world's largest bond fund, stops believing in U.S. government debt, it's time to stand up and take notice.
Bill Gross, the blackjack player-turned-bond king, whose words alone can spark rallies and selloffs in the $43-trillion bond market, has actually started betting against U.S. Treasury Bonds!
Gross' Pimco Total Return Fund recently reported a position in government debt of NEGATIVE 18%. In other words, the fund is using derivative positions to "short" Treasuries. And this is the most bearish Pimco has been since at least 2000, according to Bloomberg.
Gross is betting on the same thing I've been warning you about for some time — that bond prices will fall and interest rates will rise. The market's recent action suggests that's just what we're going to see ...
Long bond futures prices were hovering in the low 120s earlier this year. They have since fallen to around 116 — and a few days ago, they breached a critical uptrend that dates all the way back to mid-2007.
Meanwhile, the benchmark 10-year Treasury yield has risen from a low of about 3.31% to 3.75% recently.
Here's why I think this is happening ...
Bondholders Are Finally Waking Up to
The New Reality of Massive Inflation!
Previously, bond prices were rising and rates were falling because investors were looking for a "safe" hiding place during the credit crunch. They were so panic-stricken that they were willing to buy long-term bonds no matter what the yield!
But they can no longer afford to ignore what's happening with inflation ...
Import prices are surging at a 14.8% year-over-year rate.
Wholesale prices are rising at a rate of almost 7%.
"Official" consumer prices are climbing by 4%.
The price of a barrel of oil is around $115 ... the price of a gallon of gas is $3.50 ... wheat has almost doubled ... corn has increased by more than 65% ... and gold costs $900 an ounce.
Iron ore and energy prices are climbing so fast, the biggest steelmaker in the world, ArcelorMittal, just jacked up its prices by $250 a ton.
Nippon Steel is going to raise wholesales prices for steel plate by 10%.
Cruise line operator Royal Caribbean just raised its fuel surcharge to $8 per day, per passenger, from $5.
The list of companies raising prices spans continents and industries, and goes on and on.
As a result, we're finally starting to see the chain reaction I've been forecasting. Namely, that investors are unloading their bonds and driving long-term interest rates higher.
This being the case ...
Here Are Three Steps You Can
Take to Protect Yourself ...
First, I've been telling you to avoid long-term bonds for a long time. So if you've been following my writings, you shouldn't be holding any. But if you are still holding long-term paper, I'd dump it — fast.
Second, higher Treasury yields could also cause even more problems in the housing market. Reason: They will drive up rates on home mortgages, making it more expensive to finance home purchases.
The Mortgage Bankers Association's purchase loan application index dropped more than 6% in the most recent week to 357.30 — within a smidge of its 2008 low.
I'm keeping a close eye on it to see if it cracks further. I think you should, too — especially if you have any remaining exposure to Real Estate stocks.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Bill Gross, the blackjack player-turned-bond king, whose words alone can spark rallies and selloffs in the $43-trillion bond market, has actually started betting against U.S. Treasury Bonds!
Gross' Pimco Total Return Fund recently reported a position in government debt of NEGATIVE 18%. In other words, the fund is using derivative positions to "short" Treasuries. And this is the most bearish Pimco has been since at least 2000, according to Bloomberg.
Gross is betting on the same thing I've been warning you about for some time — that bond prices will fall and interest rates will rise. The market's recent action suggests that's just what we're going to see ...
Long bond futures prices were hovering in the low 120s earlier this year. They have since fallen to around 116 — and a few days ago, they breached a critical uptrend that dates all the way back to mid-2007.
Meanwhile, the benchmark 10-year Treasury yield has risen from a low of about 3.31% to 3.75% recently.
Here's why I think this is happening ...
Bondholders Are Finally Waking Up to
The New Reality of Massive Inflation!
Previously, bond prices were rising and rates were falling because investors were looking for a "safe" hiding place during the credit crunch. They were so panic-stricken that they were willing to buy long-term bonds no matter what the yield!
But they can no longer afford to ignore what's happening with inflation ...
Import prices are surging at a 14.8% year-over-year rate.
Wholesale prices are rising at a rate of almost 7%.
"Official" consumer prices are climbing by 4%.
The price of a barrel of oil is around $115 ... the price of a gallon of gas is $3.50 ... wheat has almost doubled ... corn has increased by more than 65% ... and gold costs $900 an ounce.
Iron ore and energy prices are climbing so fast, the biggest steelmaker in the world, ArcelorMittal, just jacked up its prices by $250 a ton.
Nippon Steel is going to raise wholesales prices for steel plate by 10%.
Cruise line operator Royal Caribbean just raised its fuel surcharge to $8 per day, per passenger, from $5.
The list of companies raising prices spans continents and industries, and goes on and on.
As a result, we're finally starting to see the chain reaction I've been forecasting. Namely, that investors are unloading their bonds and driving long-term interest rates higher.
This being the case ...
Here Are Three Steps You Can
Take to Protect Yourself ...
First, I've been telling you to avoid long-term bonds for a long time. So if you've been following my writings, you shouldn't be holding any. But if you are still holding long-term paper, I'd dump it — fast.
Second, higher Treasury yields could also cause even more problems in the housing market. Reason: They will drive up rates on home mortgages, making it more expensive to finance home purchases.
The Mortgage Bankers Association's purchase loan application index dropped more than 6% in the most recent week to 357.30 — within a smidge of its 2008 low.
I'm keeping a close eye on it to see if it cracks further. I think you should, too — especially if you have any remaining exposure to Real Estate stocks.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Ingersoll Rand Bermuda reaffirms CY08 Outlook, Expects Revenues
Bermuda-based diversified manufacturer Ingersoll-Rand Co. on Wednesday reaffirmed its full-year earnings outlook, but issued second-quarter guidance just below Wall Street's estimates.
The company still expects earnings from continuing operations of between $3.80 and $3.90 per share for Ingersoll-Rand (nyse: IR - news - people ) and air conditioner maker Trane Inc. combined. A cost of 15 cents per share from discontinued operations is expected.
Analysts, on average, estimate full-year profit of $3.72 per share, according to a poll by Thomson Financial. Analyst estimates typically exclude one-time, unusual items.
The company expects one-time charges associated with the Trane acquisition to range between 30 cents and 45 cents per share. The charges are not reflected in the full-year forecast.
Ingersoll-Rand announced its $9.5 billion purchase of Trane, formerly American Standard Cos., in December. The deal is expected to close by the end of May.
Ingersoll-Rand expects the combined company to generate revenue of about $17 billion in 2008, up from a previous estimate of $14.2 billion.
For the second quarter, Ingersoll-Rand forecasts earnings per share from continuing operations of between 85 cents and 90 cents. A cost of 1 penny per share from discontinued operations is expected. One-time charges related to the Trane acquisition are not included in the estimates, the company said.
Analysts, on average, anticipate second-quarter earnings of 91 cents per share.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
The company still expects earnings from continuing operations of between $3.80 and $3.90 per share for Ingersoll-Rand (nyse: IR - news - people ) and air conditioner maker Trane Inc. combined. A cost of 15 cents per share from discontinued operations is expected.
Analysts, on average, estimate full-year profit of $3.72 per share, according to a poll by Thomson Financial. Analyst estimates typically exclude one-time, unusual items.
The company expects one-time charges associated with the Trane acquisition to range between 30 cents and 45 cents per share. The charges are not reflected in the full-year forecast.
Ingersoll-Rand announced its $9.5 billion purchase of Trane, formerly American Standard Cos., in December. The deal is expected to close by the end of May.
Ingersoll-Rand expects the combined company to generate revenue of about $17 billion in 2008, up from a previous estimate of $14.2 billion.
For the second quarter, Ingersoll-Rand forecasts earnings per share from continuing operations of between 85 cents and 90 cents. A cost of 1 penny per share from discontinued operations is expected. One-time charges related to the Trane acquisition are not included in the estimates, the company said.
Analysts, on average, anticipate second-quarter earnings of 91 cents per share.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
Ingersoll Rand-Asia, Eastern Europe Key To CY08 Growth Forecast
Hamilton,
Bermuda,
April 30, 2008
Ingersoll-Rand Company Limited (NYSE:IR), a leading diversified industrial firm, today announced that total revenues increased by 9.5% and operating income increased by 18% for the first quarter of 2008 compared with the 2007 first quarter.
"Our first-quarter 2008 performance continued to demonstrate the benefits of our transformed business portfolio, which is characterized by significantly improved product, market and geographic diversity, compared with our previous reliance on capital-intense, heavy machinery businesses," said Herbert L. Henkel, chairman, president and chief executive officer.
"We are managing our businesses to offset downturns in the domestic market with strong revenue growth from international operations and recurring revenues. As we expected when we began our transformation in 2000, we are better positioned to withstand isolated market downturns, and our continuing focus on innovation, accelerated productivity gains and cost and expense reductions will sustain our ability to grow and deliver consistent financial results."
First-quarter Business Review
The company classifies its businesses into three reportable segments based on industry and market focus: Climate Control Technologies, Industrial Technologies, and Security Technologies.
Climate Control Technologies provides solutions to transport, preserve, store and display temperature-sensitive products, and includes the market-leading brands of Hussmann(R) and Thermo King(R).
Revenues for the sector of $798 million increased by approximately 10% compared with the first quarter of 2007. First-quarter 2008 operating margin was 10.0%, compared with 9.5% in the 2007 first quarter. The margin increase was due to operational improvements and higher price realization, which were partially offset by increased material costs.
Worldwide trailer and truck revenues expanded by approximately 6%, with strong results
in Europe offsetting sharply lower sales in North America. Sea-going container, bus and
aftermarket revenues also increased worldwide. Sales of the TriPac(R) auxiliary power unit also increased sharply in the first quarter due to the increasing cost of diesel fuel.
Worldwide revenues for display cases and contracting increased slightly compared with the
first quarter of 2007.
Industrial Technologies is focused on providing solutions to enhance customers' industrial and energy efficiency and provides equipment and services for compressed air systems, tools, fluid power production and energy generation systems. Total revenues in the first quarter increased by approximately 11% to $743 million. Strength in industrial and process markets outside of North America and revenues from the aftermarket business continued to benefit the Air and Productivity Solutions business.
Security Technologies includes mechanical and electronic security products; biometric and
access-control technologies; security and scheduling software; integration and services. First-quarter revenues increased by approximately 7% to $622 million, reflecting moderate growth in the North American domestic commercial construction market and strong growth outside of North America.
Residential revenues in the Americas decreased modestly, reflecting a decline in same store sales at "Big Box" customers and ongoing weakness in the new-homebuilder channel in North America.
"The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with pro-forma 2008 revenues of approximately $17 billion. The new Ingersoll Rand portfolio will include an $11 billion Climate Control business, which will offer high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary, and transport applications worldwide.
2008 Outlook-Ingersoll Rand Stand Alone
"Many of Ingersoll Rand's major end markets continued to experience solid overall demand in the first quarter as weaker activity in North America was offset by strong performance overseas. Orders increased by approximately 6% compared with last year. Our backlog increased in all business segments and grew by 10% overall compared with the
first quarter of 2007," said Henkel. "Based on our recent order pattern and a review of customer and channel activity, we continue to expect mid-single digit growth for the balance of 2008.
Going forward we expect flat performance in North America, moderating growth in Western Europe and continued brisk growth in the developing economies of Eastern Europe, Asia and Latin America.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice
Bermuda,
April 30, 2008
Ingersoll-Rand Company Limited (NYSE:IR), a leading diversified industrial firm, today announced that total revenues increased by 9.5% and operating income increased by 18% for the first quarter of 2008 compared with the 2007 first quarter.
"Our first-quarter 2008 performance continued to demonstrate the benefits of our transformed business portfolio, which is characterized by significantly improved product, market and geographic diversity, compared with our previous reliance on capital-intense, heavy machinery businesses," said Herbert L. Henkel, chairman, president and chief executive officer.
"We are managing our businesses to offset downturns in the domestic market with strong revenue growth from international operations and recurring revenues. As we expected when we began our transformation in 2000, we are better positioned to withstand isolated market downturns, and our continuing focus on innovation, accelerated productivity gains and cost and expense reductions will sustain our ability to grow and deliver consistent financial results."
First-quarter Business Review
The company classifies its businesses into three reportable segments based on industry and market focus: Climate Control Technologies, Industrial Technologies, and Security Technologies.
Climate Control Technologies provides solutions to transport, preserve, store and display temperature-sensitive products, and includes the market-leading brands of Hussmann(R) and Thermo King(R).
Revenues for the sector of $798 million increased by approximately 10% compared with the first quarter of 2007. First-quarter 2008 operating margin was 10.0%, compared with 9.5% in the 2007 first quarter. The margin increase was due to operational improvements and higher price realization, which were partially offset by increased material costs.
Worldwide trailer and truck revenues expanded by approximately 6%, with strong results
in Europe offsetting sharply lower sales in North America. Sea-going container, bus and
aftermarket revenues also increased worldwide. Sales of the TriPac(R) auxiliary power unit also increased sharply in the first quarter due to the increasing cost of diesel fuel.
Worldwide revenues for display cases and contracting increased slightly compared with the
first quarter of 2007.
Industrial Technologies is focused on providing solutions to enhance customers' industrial and energy efficiency and provides equipment and services for compressed air systems, tools, fluid power production and energy generation systems. Total revenues in the first quarter increased by approximately 11% to $743 million. Strength in industrial and process markets outside of North America and revenues from the aftermarket business continued to benefit the Air and Productivity Solutions business.
Security Technologies includes mechanical and electronic security products; biometric and
access-control technologies; security and scheduling software; integration and services. First-quarter revenues increased by approximately 7% to $622 million, reflecting moderate growth in the North American domestic commercial construction market and strong growth outside of North America.
Residential revenues in the Americas decreased modestly, reflecting a decline in same store sales at "Big Box" customers and ongoing weakness in the new-homebuilder channel in North America.
"The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with pro-forma 2008 revenues of approximately $17 billion. The new Ingersoll Rand portfolio will include an $11 billion Climate Control business, which will offer high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary, and transport applications worldwide.
2008 Outlook-Ingersoll Rand Stand Alone
"Many of Ingersoll Rand's major end markets continued to experience solid overall demand in the first quarter as weaker activity in North America was offset by strong performance overseas. Orders increased by approximately 6% compared with last year. Our backlog increased in all business segments and grew by 10% overall compared with the
first quarter of 2007," said Henkel. "Based on our recent order pattern and a review of customer and channel activity, we continue to expect mid-single digit growth for the balance of 2008.
Going forward we expect flat performance in North America, moderating growth in Western Europe and continued brisk growth in the developing economies of Eastern Europe, Asia and Latin America.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice
Another Quarter Of Uncertainty-Enam
n Jan 08, the Indian market was banking on global & domestic liquidity, despite its over-leverage, combined with pockets of over-valuation & over-ownership.
Since then, India has been one of the worst performing markets, even as most global markets have bounced back banking on Fed rescue, while commodity inflation has aided Brazil/ Russia.
India investing confidence dented largely due to:
Uncertainty in:
- Corporate earnings: Execution vs expectations, Fx derivative losses
- Direction of interest rates & Currency
- Govt's use of Price control to curb inflation
- Economy on both reflationary (fiscal expansion) AND monetary tightening modes: like a car on Brake + Accelerator !
However, greater clarity on the above is likely to emerge in Apr-July 08:
- Q1FY09 results: Execution & Fx losses to be clearer by then
- Monetary stance in Credit policy of Apr 29: eg expectation of CRR hike?
- End-game of Govt's resolve to control commodity prices, & then, some clarity on election timing
Despite maximum uncertainty being over the next few months, a ST leg up can't be ruled out, due to the huge undeployed cash with funds. However, a sustained market momentum is unlikely till clarity emerges over glocal concerns of currency alignments, & stagflation:
- While global currency realignments appear inevitable, it may be protracted.
-Domestic factors such as bloated capital a/c etc may nudge interest rates lower, once the inflation genie is tamed.
In the meantime, with favourable LT risk-reward ratio, Liquidity will trickle in selectively as markets look inexpensive at ~15x FY09E EPS (with potential 25% Sensex upside in 12 months), continuing global liquidity glut and LT India fundamentals.
Recommendation:
Defensive bets: IT, & selectively in Telecom,
FMCG, Pharma. Underweight
Cap goods & Realty Aggressive LT bets (hi risk/ reward, though with ST uncertainty): Banking & Commodities (Cement, Metals, Oil & gas)
Regards,
Nandan Chakraborty
(Head-Research)
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
Since then, India has been one of the worst performing markets, even as most global markets have bounced back banking on Fed rescue, while commodity inflation has aided Brazil/ Russia.
India investing confidence dented largely due to:
Uncertainty in:
- Corporate earnings: Execution vs expectations, Fx derivative losses
- Direction of interest rates & Currency
- Govt's use of Price control to curb inflation
- Economy on both reflationary (fiscal expansion) AND monetary tightening modes: like a car on Brake + Accelerator !
However, greater clarity on the above is likely to emerge in Apr-July 08:
- Q1FY09 results: Execution & Fx losses to be clearer by then
- Monetary stance in Credit policy of Apr 29: eg expectation of CRR hike?
- End-game of Govt's resolve to control commodity prices, & then, some clarity on election timing
Despite maximum uncertainty being over the next few months, a ST leg up can't be ruled out, due to the huge undeployed cash with funds. However, a sustained market momentum is unlikely till clarity emerges over glocal concerns of currency alignments, & stagflation:
- While global currency realignments appear inevitable, it may be protracted.
-Domestic factors such as bloated capital a/c etc may nudge interest rates lower, once the inflation genie is tamed.
In the meantime, with favourable LT risk-reward ratio, Liquidity will trickle in selectively as markets look inexpensive at ~15x FY09E EPS (with potential 25% Sensex upside in 12 months), continuing global liquidity glut and LT India fundamentals.
Recommendation:
Defensive bets: IT, & selectively in Telecom,
FMCG, Pharma. Underweight
Cap goods & Realty Aggressive LT bets (hi risk/ reward, though with ST uncertainty): Banking & Commodities (Cement, Metals, Oil & gas)
Regards,
Nandan Chakraborty
(Head-Research)
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
ROCKET STOCK SUJANA UNIVERSAL INDUSTRIES Ltd
Dear ALL,
Now Buy good Fundamental Stocks like SUJANA UNIVERSAL INDUSTRIES Ltd., AT 13/- Quoting BSE, NSE (10/- Face Value).
Global Markets is stabilizing. In Indian Equities avialble at good prices. Worst is over. FII`s also coming back to Indian Markets to Invest. All Bulls are coming back to Market. Annual Results also coming out in April & May. Start Buying at low levels Now. Don't panic Sell. Buy good fundamental equities partially daily, You will get 50% appreciation within 1 to 2 months time. Risk is very very less.
SUJANA UNIVERSAL INDUSTRIES Ltd , Trading in BSE & NSE at 13/- in B Group. This is 10/- FaceValue share trading at 13/-. Before Market Crashed Its traded between 25/- to 29/-. Now its trading at 13/-. Daily grabbing with Mumbai BIG BIG Bulls because of Now stock is available at very very cheep price at 13/- EPS 6/- expecting for this Annual finalcial, with PE 2 only. Narmally in worst condition also PE will at 5. But Now PE is only 2.
Last Quarter (December) Results was very very good Net Profit was 26 Crores. Net Profit & Sales Increased 300% Quarter to quarter. 4th Quarter also expecting good results. 3rd Quarter EPS was 2.19, if you calculate Annaual EPS was 8.5 based on this PE was only 1.5. if take PE minimum 5 It will come 45/-.
If you have already buy some more make average. This is company is doing very very good. Slowly grab this stock. Fundamental is very very good. Global cues and Market worst is over. Don't Sell if you have Sujana Universal Industries equities. Stay Invest and wait up to 22/- minimum.
SUJANA UNIVERSAL INDUSTRIES Ltd; at 13/- (Annual EPS is 6/- above Expecting) PE only 2. If we take PE 8 It will come 45/-. Now markets are week. So If we take PE 5 It will touch 28/- minimum before Annual Financial Results declaring (One months time). Book Value also good. Good fundamental. Very Very less risk at present rate. SO hurry Buy at current level at 13/-.
SUJANA UNIVERSAL INDUSTRIES Ltd Equity was 118 Crores. Company Annonced good results last Three quarters (51 Lakhs, 8.35 Crores & 26 Crores (Net Profit Up 300% Quarter to Quater), Forth Quarter results also coming good with 35 Crores Net Profit. So Annual EPSis coming around 6/-. Company Expanding results effects next qurters.
SUJANA UNIVERSAL INDUSTRIES Ltd., already Allotted 30 Lakhs Global Depository Receipts (GDRs) - underlying equity shares of 3 crores of Rs 10/- each at a premium of Rs 10.50/- per share (10/- +10.5/- = Rs. 20.50/-).
And Converted 49 Lakhs warrants into 49 lakhs equity shares of Rs 10/- premium of each at a Rs 10.50/- per share (10/- + 10.50/- = Rs. 20.50/-).
Promoters Share Holding 23%, Private Corporates 13% , GDR's 45%, Public only 19%.
All of above good news current price (13/-) is very very cheep.
See SUJANA UNIVERSAL INDUSTRIES EQUITY VALUE (Per share value) : 45/- original value as per financial results (6 EPS annulised) + Fixed assets like land etc., 15/-.
So Total Value of this company Share value was Rs.60/-. Just Imagine company share price where to going in this year……
Just Buy at 13/- Hold 1 to 6 months time. You will get minimum 50% to 200% returns.
Enter current price at 13/-
Target 18/- 25/- 45/- .
Just invest and get 50% to 200% profit.
Happy Investing... I will mail Next week with one more Recommedation.
Bye
BIGBULLS
Now Buy good Fundamental Stocks like SUJANA UNIVERSAL INDUSTRIES Ltd., AT 13/- Quoting BSE, NSE (10/- Face Value).
Global Markets is stabilizing. In Indian Equities avialble at good prices. Worst is over. FII`s also coming back to Indian Markets to Invest. All Bulls are coming back to Market. Annual Results also coming out in April & May. Start Buying at low levels Now. Don't panic Sell. Buy good fundamental equities partially daily, You will get 50% appreciation within 1 to 2 months time. Risk is very very less.
SUJANA UNIVERSAL INDUSTRIES Ltd , Trading in BSE & NSE at 13/- in B Group. This is 10/- FaceValue share trading at 13/-. Before Market Crashed Its traded between 25/- to 29/-. Now its trading at 13/-. Daily grabbing with Mumbai BIG BIG Bulls because of Now stock is available at very very cheep price at 13/- EPS 6/- expecting for this Annual finalcial, with PE 2 only. Narmally in worst condition also PE will at 5. But Now PE is only 2.
Last Quarter (December) Results was very very good Net Profit was 26 Crores. Net Profit & Sales Increased 300% Quarter to quarter. 4th Quarter also expecting good results. 3rd Quarter EPS was 2.19, if you calculate Annaual EPS was 8.5 based on this PE was only 1.5. if take PE minimum 5 It will come 45/-.
If you have already buy some more make average. This is company is doing very very good. Slowly grab this stock. Fundamental is very very good. Global cues and Market worst is over. Don't Sell if you have Sujana Universal Industries equities. Stay Invest and wait up to 22/- minimum.
SUJANA UNIVERSAL INDUSTRIES Ltd; at 13/- (Annual EPS is 6/- above Expecting) PE only 2. If we take PE 8 It will come 45/-. Now markets are week. So If we take PE 5 It will touch 28/- minimum before Annual Financial Results declaring (One months time). Book Value also good. Good fundamental. Very Very less risk at present rate. SO hurry Buy at current level at 13/-.
SUJANA UNIVERSAL INDUSTRIES Ltd Equity was 118 Crores. Company Annonced good results last Three quarters (51 Lakhs, 8.35 Crores & 26 Crores (Net Profit Up 300% Quarter to Quater), Forth Quarter results also coming good with 35 Crores Net Profit. So Annual EPSis coming around 6/-. Company Expanding results effects next qurters.
SUJANA UNIVERSAL INDUSTRIES Ltd., already Allotted 30 Lakhs Global Depository Receipts (GDRs) - underlying equity shares of 3 crores of Rs 10/- each at a premium of Rs 10.50/- per share (10/- +10.5/- = Rs. 20.50/-).
And Converted 49 Lakhs warrants into 49 lakhs equity shares of Rs 10/- premium of each at a Rs 10.50/- per share (10/- + 10.50/- = Rs. 20.50/-).
Promoters Share Holding 23%, Private Corporates 13% , GDR's 45%, Public only 19%.
All of above good news current price (13/-) is very very cheep.
See SUJANA UNIVERSAL INDUSTRIES EQUITY VALUE (Per share value) : 45/- original value as per financial results (6 EPS annulised) + Fixed assets like land etc., 15/-.
So Total Value of this company Share value was Rs.60/-. Just Imagine company share price where to going in this year……
Just Buy at 13/- Hold 1 to 6 months time. You will get minimum 50% to 200% returns.
Enter current price at 13/-
Target 18/- 25/- 45/- .
Just invest and get 50% to 200% profit.
Happy Investing... I will mail Next week with one more Recommedation.
Bye
BIGBULLS
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