Barclays Downgrades India

While the 1QFY16 earnings performance of India Inc. was by and large weak, on account of a weaker-than-expected demand recovery, there nevertheless were some bright spots: 1) operating performance (EBITDA) was better than top-line performance, suggesting a decent pass-through of low input cost pressures; and 2) the demand environment showed signs of improvement in a few sub-sectors in the consumption and industrial sectors. Barclays analysts expect an earnings bounce back in H2 FY 16 in several sectors – consumer, financials, healthcare and capital goods. However, postponement in earnings recovery leads us to reduce our 12  month forward NIFTY index target to 9,642 from 10,219. 

 

1QFY16: Overall earnings trend remained underwhelming: Indian earnings have now remained stuck in single-digit growth territory for the past three years. This year is following a similar pattern with downgrades to FY16 estimates persisting (consensus earnings now projecting 16% EPS growth for FY16 compared to 19-20% at the beginning of the year). Weak revenues are ostensibly to blame, though a closer look indicates top-down issues led by high real interest rates and a negative WPI culminating in lacklustre IP growth are the real culprits. 

Barclays analysts expect bounce-back in H2FY16: Our analyst team thinks growth could rebound in the second half of this year helped by consumer (staples and discretionary), financials, healthcare and capital goods sectors. On a top-down basis, we note that our forecasts are underpinned by an expectation of better fiscal policy in terms of higher capital expenditure by the government and also an improvement in consumption as lower oil prices trickle down to consumers. Our expectations from monetary policy are more muted: our economists look for a 25bps rate cut before March 2016 and FY16 average CPI of 5%.

Remind yourself daily to be patient and let the trade set up come to you! Don’t be anxious & chase a trade!

Trading Strategy For 01st September ’2015.Nifty Future-7895-7866 Crucial Support levels.

Now SGX NIFTY @ 7910 – 89 POINTS

All Eyes on 7895—————-7866 level.

Yes ,Decisive Break with volumes and Sustains for 15-20 minutes below 7866 will create MORE PANIC !

Target :7780-7751 level.

bliss gvs

NTRA-DAY CALLS(Only For Day Trader's)


BLISS GVS: Buy @ 160 - 161 , Today's Target: 167 - 173 SL : 153

dishman pharma

Traded @ BSE/NSE (532526)Target : 250+

Volatile Market , No Problem.......
It'll Stands Alone.

GO For this...!!
Safe & Steady Bet.

It'll ROCKS........
Buy @ 222 - 223
Today's Target : 237 - 243
Ultimate Target : 300
SL : 205 

10 Biggest FII Monthly Outflows -Yes August 2015 Was Historic

CNX NIFTY -Last Hope 7869.Next Target :7119-6869

3 Consecutive close below 7869 + Weekly close is must 

Watch All round BLOODBATH up to  7119——6869 level !!

Below 7667 level (Low of August ) ,Gates for  7554————-7441 will get opened

& There after PANIC + Bloodbath up to 7103 not ruled out.

Hurdle for Sept @ 8161——8223.

Yes ,Crossover and close above 8223 will create More FIREWORK.

market idea for 1-9-15

Market Review for 1st September 2015

Nifty (7971) we said ‘technically we are not out of the woods as yet…I would prefer a close above 8070, however we could see some support emerging in the lower regions’ the market unfolded as expected with supports in the lower region and yet market not trading above 8070…technically the view remains the same and I would prefer a close above 8050 for me to be bullish…

The support for Nifty is it 7770-7576 and the resistance to the up move is at 8050-8200-8400

Be Opportunist

alert

ALERT-From 2 Till 3 PM….Big Move on card.Today’s Low of NF & 7955 are Crucial Support Points.

technicality of nifty

· Resistances on NIFTY are 8052 / 8092 / 8151.
· Support Levels for NIFTY are 7962 / 7901 / 7862.
· We are most probably in the 4th phase of second corrective.
· This phase is technically the most volatile & time consuming in nature.
· Due to the 3^rd extension severe decline in the last week, our consolidation range is big with respect to the prices.
· After the 4^th phase of consolidation, we are expecting the final 5^th phase of the 2^ndcorrective to be disastrous in nature.
· In short, no more upward breakout on the cards for the coming 2-3 months.
· Happy Trading...

BANK NIFTY -All Eyes on 17090 ,17018 level.In Panic-Buy BOB-Kotak-DLF.Sell HDIL..Big CRASH ???Target 53-40 very soon

“The production of too many useful things results in too many useless people.”
Karl Marx

Last Close : 17273

Yes ,As Expected it crashed Vertically and at  10:20 ,Recommended and Boldly told :We are Sell NF ,BNF……

Today ,All Eyes on 17150——–17090 level.

Decisive Break with volumes below 17090 and stays for 15-20 minutes will CREATE PANIC PANIC .

Target :16899—16836

Watching Nifty Future Movement

Trading Strategy For 31st August ’2015.Intraday Traders Watch 7981-7951.In PANIC-Will Buy

Difference between great traders & the rest isn’t magic entry points, instead they’re better risk managers & better at position management.

Last Close : 8022.70

Again A Great Friday ,Yes on Friday we had Boldly written if Opens around  8080-8130…….Go short with stop of 8137-8164

It kissed High of  8125 & Crashed…………………..(Vertically ).Now if u Don’t read and shout on Social Sites ..Then its your fault.

Then Boldly Told ..During Trading hrs.Below  8096,Our Targets were :8010-7981 level. (It kissed low of 7983 )

Decisive Break with volumes Below 7981 & stays for 15 minutes then ?

Slide Up to 7895————-7866 is possible in hrs (This too already mentioned on Friday )

Minor Support levels @ 7962————-7951.

Thirsty Traders ,If 7951 is Broken watch PANIC up to 7896 in minutes only.

Hurdle at 8053———8062 level.

market update

Hon'ble PM Sahib, Market Demands , GST & LAND Bill to Clear Soon. Third of BSE 500 Stocks, Back to Manmohan Era Price. Quick Action : Rate Cut : Quick Reforms , is a Need of Hour.

However.....BOTTOM, Already Made , Already Told You. But, Indian Market, Pain is not OVER YET.... Another, Worry for MARKET is FED RATE Hike........... If, this HAPPEN, then, INDIAN MARKET, will FALL , and this time, We May EVEN,  Break, 7500 Level..... Now, All Eye , is Towards JANET YELLEN Let's See, Whether she will BRINGS, Happiness or Sorrow.....???? Some, Positive News It Seems, CHINA is Stablizing Now, Shanghai Composite, Bottom Already Made. But, Shanghai Composite, Must , not Break the BARRIER of 2700 , If It's Break, than, It may Fall  Further, thus, WORLD MARKET, will STARTS, BLEEDING AGAIN. But, Its SEEMS VERY UNLIKELY NOW.

bank nifty future

BANK NIFTY LTP : 17273.05Bank Nifty Future, Levels Back Again...
BANK NIFTY FUTURE ( Bulls Corner)
Well.......Today's ABOVE : 17370.00 Once Again, BANK NIFTY FUTURE, Looks Superb, above that Level, BANK NIFTY FUTURE, May try to hit, 17495.00 and than, 17630.00 too in Today's TRADING SESSION....!

There'll be More fun in BANK NIFTY FUTURE, If It's Manage to hit, 17750.00 Mark, Above that Level, BANK NIFTY FUTURE, may try to hit 17930.00 and than, 18030.00  too in Days to come. 
BANK NIFTY FUTURE ( Bears Corner )

Well.....Today's Below : 17130.00, Mark, things not looks good for BANK NIFTY FUTURE, Below that level, Bank Nifty future, may try to hit, 16910.00 and than, 16700.00 too in DAYS TO COME....

There'll be More pain in BANK NIFTY FUTURE, if it's manage to hit, 16670.00, below that Level, NEXT target would be, 16510.00 and than, 16390.00 too in DAYS TO COME. 

nifty future

Today's Nifty Levels (Bulls) 
Well, Today's Above, 8053.00 Mark, Things Looks Superb for NIFTY FUTURE, Above that Level, NIFTY FUTURE, May Try to hit, 8083.00 and than, 8099.00 too in Today's Trading Session.........

There'll be More & More Upside, if Nifty Future, Manage to Hit, 8110.00 Mark, Above that Level, NIFTY FUTURE, May Try to hit, 8143.00 and than, 8173.00 too in Days to come.

90% Accuracy NIFTY FUTURE LEVELS, EVERYDAY..............
Hey Guys, What's More You Want in LIFE...........!


Level for Bears......
Well......Today's Below, 7950.00 Once Again, NIFTY FUTURE, May Starts Bleeding, Below that Level, NEXT TARGET is : 7923.00 and than, 7901.00  too in Today's Trading Session....!

There'll be More Selling, If Nifty Future, Manage to Hit, 7873.00 Mark, Below that Level, NEXT TARGET would be, 7830.00 and than, 7801.00 too in Days to come.......
OH YES...!!

shilpi cable

Traded @ BSE/NSE (533389)Target : 80+

Volatile Market , No Problem.......
It'll Stands Alone.

GO For this...!!
Safe & Steady Bet.

It'll ROCKS........
Buy @ 60 - 60.50
Today's Target : 65.50 - 67+
Ultimate Target : 80+
SL : 53 

jubilant industries

Traded @ BSE/NSE (533320)Target : 400+
This, Rocket is Ready to Fire, from, these Levels....
Go for It....
Our, Client's are Long in this from, 287 Level.

SGX NIFTY Showing 50 Points, Downward Move.
However, We Believe, this STOCK May Stands Alone.


It'll ROCKS.....
Go for this.........!
Buy @ 300 - 301Today's Target : 317 - 323+ 
Ultimate Target : 400+  
SL : 275

Jesse Livermore On You Don’t Have To Be Active Every Day

India: An Unsettling ReWind

Real Estate: The unwind and its side effects 

We are seeing a broad-based real estate pullback, with prices correcting in most tier-1 and tier-2 cities alongside sharp drops in transaction and new launch volumes. The drivers for this slowdown are a mix of supply-side factors (banks have pulled back lending to developers) and demand-side factors (the Black Money Bill has created fear amongst speculators). The result is not just a drop in demand for building materials and challenges for lenders with big mortgage, LAP and housing finance books, but also a generalised slowdown in GDP growth, as the sector which drives 50% of India’s capex and 30% of its jobs conks off. Our four large-cap SELLs on this real estate correction are Ultratech, Asian Paints, ICICI and HUL. 

A broad-based real estate slowdown Whilst the RBI’s Housing Price Index suggests that prices have moderated on a pan-India basis, data from property websites suggests a deeper slowdown in India’s large cities, with prices falling by 7-18% YoY. Alongside this, we are also seeing a significant drop in transaction volumes: our visits to five property registration offices in Mumbai suggest a sharp drop in the registration of new residential properties and data from property valuers in Maharashtra and Tamilnadu suggest that transaction volumes have fallen by 10-15% per annum for three consecutive years now.

Also, new launch volumes are down 40-80% on a pan-India level (see Exhibit A).  Combination of supply-side and demand-side factors trigger the slide Supply side: (a) RBI data suggests that the banking system seems to have turned the tap off for property developers over the past year. This has in turn made developers either stop construction or cut prices. (b) The NDA has cut subsidies sharply (down 9% in FY16) and is shifting subsidies to Direct Benefit Transfer. As a result, the ability of the politician-and-builder to pilfer subsidies to fund real estate construction has been checked. (c) 

The knowledge that there is many years’ worth of unsold real estate inventory in most of India’s tier-1 and tier-2 cities is causing investors to hold back further purchases.  Demand side: (a) The draconian Black Money Bill went live on 1st July and has made HNW families reluctant to invest in Real Estate. (b) The 8% point gap between the gross rental yield and bank base rate highlights the unattractiveness of real estate for investors. (c) Key state governments (Maharashtra, West Bengal, Delhi) have hiked “ready reckoner” rates sharply this year and thus prevented prices from dropping to a market clearing level. 

Investment implications Real estate accounts for half of India’s capital formation and 30% of its job creation. With the sector on the slide, GDP growth is under pressure, directly, because of the drop in investment, and, indirectly, through pressure on wages. We reiterate our  FY16 GDP growth forecast of 7% (vs consensus’ 7.8%). Beyond real estate itself, the sectors most impacted are: (a) Cement – we expect YoY volumes to remain flat in 1Q; (b) Paints – we expect weak volume growth of 34% again in 1Q; and (c) Lenders – 15% of the banking systems’ assets are directly exposed to real estate and the experience of other Asian economies suggests that once property prices start falling, NPAs have a tendency to more than double from their pre-stress levels. Our key large cap SELLs on this theme are: Ultratech, Asian Paints, HUL and ICICI Bank.

India: Rural Economy Skids

Rural India: At the crossroads After seven years of frenetic growth, the rural and semi-urban India story now faces a serious challenge, as the old construct of pilfered subsidy cash being used to buy land, gold, SUVs, cars, 2Ws, electricals and other aspirational items by the rural elite comes to an end. The NDA will gradually unveil new rules which will govern rural growth henceforth. However, even if one takes an optimistic view of the NDA’s as yet unproven execution skills, it will take at least 2-3 quarters for the NDA construct – centered on capex and DBT – to bite. In the meantime, the unwinding of the previous UPA construct will condemn a range of reasonably well-managed companies to a spate of poor results. 

Growth in rural India was fuelled by a blast of subsidies The average top-line growth of 15.2% YoY recorded in the FMCG space over FY09-15 was driven mainly by the dramatic levels of subsidies pumped into the rural economy by the previous Government. For instance, India’s subsidy bill under the UPA regime grew at a staggering CAGR of 19% p.a. during FY05-14 (see Exhibit A on the right). Most research studies suggest that ~40% of the subsidies disbursed by the Central Government are lost in the form of leakages. This in turn implies that ~US$17bn or 0.8% of GDP alone was pilfered in FY15 itself, thereby buoying the incomes of the top tiers of the rural economy.

 The NDA Government seems to have hit the brakes on these subsidies  Despite creating allocations for subsidies and plan spends in the FY16 Union Budget, the new Government seems to have hit the brakes on subsidy spends and MSP hikes. As per the latest data available, total expenditure growth over Apr-Dec 2014 was at 6% YoY vs budget estimates of 13% YoY and the ten-year average growth rate of 13% YoY. Similarly, Minimum Support Prices (MSPs) for rice and wheat grew at 4% YoY in FY15 vs an average growth of 9% YoY in the previous decade (see Exhibit C on the right). This combined with poor monsoons and global moderation in food prices has weakened rural demand.   

Whilst the lower tier of rural India may recover, this will take time  Whilst the effects of weak monsoon and weak commodity prices might be temporary, the Government is set to use the DBT platform to plug leakages and to better target subsidy spends. Whilst the plugging of leakages will adversely affect the top tier of the rural economy, the lower tiers will benefit owing to the superior targeting. Furthermore, in a bid to create jobs, the Modi Government is likely to administer a ‘big push’ to the infrastructure sector (see our note dated 16 February for details) which will buoy the rural economy, albeit with a lag.   

Investment implications Even if we assume that the NDA moves swiftly on DBT and big-ticket capex focused on road building and low-cost housing, we are likely to see a lull for 26 quarters, during which the old game of pilfering subsidies comes to an end with the new construct yet to fire. The companies which appear to be the most exposed are those that have relied heavily on rural India to drive their growth through the downturn including M&M (MM IN, unrated) as SUVs and tractors account for ~70% of its total volumes, Maruti (MSIL IN, SELL) as ~30% of its revenues comes from rural sales, HUL (HUVR IN, SELL) as 40% of its revenues come from rural segments, Colgate (CLGT IN, SELL) as 35% of its revenues come from rural segments, MMFS (MMFS IN, SELL) as >95% of its loan book is driven by rural India, Havells (HAVL IN, SELL) as ~30% of its revenues come from rural India, Ambuja (ACEM IN, SELL) as ~35% of revenues come from rural segments and Ramco Cements (TRCL IN, SELL) as ~35% of its revenues come from rural segments.

Thought For A Day

At last, will we have an economic agenda?-Pchidambaram

I have always welcomed the threat of a crisis. That seems to be the only real trigger for debate and discussion in India. For the first time in 15 months, the BJP/NDA government has been forced on the backfoot by external developments. Not everything, however, has changed: for example, ministers continue to mouth the convenient untruth that the economy was in the doldrums in May 2014. The Hindu (dated 25-8-2015) reported that Mr Amit Shah, president of the BJP, had said that the Modi government had, in 15 months, raised the average growth of GDP from 4.5 per cent in the 10 years under UPA to 8.2 per cent! I would ask students of economics to examine that statement and tell their class how many words in that sentence are true.

In the wake of the Monday massacre, the finance minister rushed to reassure the markets and the investors that all the key indicators have looked up smartly in the last 15 months. Very true. What he did not say was that we reached a fiscal deficit level of 4.1% at the end of March 2015 after crossing two crucial markers of 4.8% in March 2013 and 4.4% in March 2014.

So it is with every other indicator like the current account deficit, inflation, foreign exchange reserves etc. One performs a journey of a thousand miles by crossing the 800th milestone, the 900th milestone and so on.

Unanticipated events

Not all external developments will be benign. That is the lesson the government has learned in the last week. The crash in oil prices, the decline in commodity prices, and the lifting of sanctions on Iran, created a sense of “God is in heaven and all is well with the world”. The unanticipated event was the China crisis and the unusual (for the Chinese government) step of multiple devaluations of the yuan.

Such completely unanticipated events have happened before. In September 2008, Lehman Brothers, a leading financial institution, collapsed, triggering a crisis that reverberated throughout the world. At least four European countries touched the brink of insolvency.

India’s majestic march with an average growth rate of 8.8 per cent (old series) between 2004-05 and 2007-08 was interrupted; nevertheless, the five-year period of UPA I ended with an average of 8.4%.

Similarly, in May 2013, when the Indian economy was stabilising, Mr Ben Bernanke made a thoughtless and unnecessary remark about ‘taper’ — gradual withdrawal from the purchase of US Treasury bonds. He was rightly castigated for his ‘taper tantrum’.

When the Indian economy paid a price for these external developments—for instance, the rupee depreciated—the BJP was merciless in its criticism. That was understandable. What was not was the extravagant promises made—the rupee will rise to Rs 40 to the US dollar (!) and India’s GDP will grow at 10% under a BJP government.

On Monday, August 24, the Sensex shed 1625 points. In August, the rupee has depreciated by about 3.3% against the US dollar. Such volatility and decline in asset prices are stressful. The government will scramble to do something, and even if it succeeds, success will come at a cost. Contrary to popular belief or desire, in a global economy, the Government is no longer the lead player, it is more an umpire. We must therefore adjust our understanding and expectation of what the government can and should do.

The impossible trinity

Take the example of the exchange rate. It is closely linked to two other key issues: (1) an autonomous monetary policy and (2) free capital flows. No government can manage — or fix — all three. That is why it is called the “impossible trinity”. If theRBI keeps the policy interest rate high (to keep inflation down), foreign money will flow in, but the rupee will appreciate making imports cheaper and exports costlier.

If the government and the RBI agree to keep a fixed exchange rate, it would mean choosing between imposing capital controls and giving up autonomy on monetary policy, neither of which would be desirable.

Basically, there are three options:

1. Free capital flows and autonomous monetary policy, but a market-determined exchange rate;

2. A fixed exchange rate and autonomous monetary policy, but strict controls on capital flows;

3. A fixed exchange rate and free capital flows, but no autonomous monetary policy.

Which is the correct option? No one is certain. Even the so-called correct option may not work in all circumstances. For many years, China followed the second option, and fared well, but the rapid growth of China’s economy and its scale, size and spread of trade made option 2 obsolete.

The safer option appears to be option 1. The fear is flight of capital. It stems from the fact that governments are prone to adopt foolish policies that will frighten investors: run high deficits, make retrospective tax laws, create an un-level playing field, erect hurdles to doing business, not uphold sanctity of contracts or protect intellectual property, litigate endlessly or suspect and investigate every transaction. To shed the fear of flight of capital, we must abandon foolish policies and vow to never repeat mistakes.

I believe the government has learnt its lessons and is beginning to consult a wider spectrum of economists and investors. Let us hope we will now have a coherent economic agenda from the not-so-new government