www.infystocks.co.uk: 27/01/2008

31 January 2008

Without the wind at our back, making money and holding onto profits will be difficult at best as the wounds are fresh and will take some time to heal. The overhead supply of stock to be sold is large and getting larger. You can feel like you aren’t bullish enough when the market rocks and too bullish when the market rolls.

Investors are desperately searching for an investment theme that lasts for more than a few days. A change in leadership will probably lead us out but lately has the feel of one step forward and two steps back.

Most great investors will tell you not to panic. It's good advice but it doesn’t just apply to panic selling. Yesterday was a buying panic. The market overdosed on "Fed cut euphoria" as investors went into a buying frenzy, fearful of missing the boat. By the end of the day we all had a hangover.

Let’s slow the process down and eliminate the day-to-day overreaction to every bit of news that hits the tape.

New york times"----

WASHINGTON — The Federal Reserve cut short-term interest rates on Wednesday for the second time in eight days, meeting Wall Street hopes for cheaper money. At the same time, the Senate continued work on a $161 billion plan to prop up Main Street with tax rebates and temporary tax cuts.
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The New York Times

In lowering its benchmark federal funds rate by half a percentage point, to 3 percent, the central bank signaled that it was ready to err on the side of boldness in fending off a possible recession. It also left open the possibility of additional rate cuts in the months ahead.

The Fed’s move was part of a one-two punch by Washington aimed at jolting the economy with easier credit and extra money. Senate Democrats advanced a fiscal stimulus bill that could inject $161 billion into the economy this year through tax rebates for individuals and tax breaks for businesses.

If anyone needed more evidence that the economy is stumbling, it came just hours before the Fed announced its decision. The Commerce Department reported that the economy went into a stall in the last quarter of 2007, estimating that growth slowed to an annual rate of 0.6 percent, from 4.9 percent in the third quarter.

Despite some disagreement, all of the major power centers in Washington — the White House, Congress and the Federal Reserve — are in broad agreement about the need to bolster the economy with both fiscal and monetary policy.

The Senate Finance Committee passed a stimulus package on Wednesday that was more expensive than one the House passed on Tuesday, but only three Republicans on the panel voted for it, in a signal that bipartisan cooperation may be faltering.

President Bush, in a speech at the Robinson Helicopter Company in Los Angeles, repeated his call for the Senate to move fast. “I understand people having their points of view, and of course, we welcome points of view in Washington,” Mr. Bush said. “There appears to be a lot of them up there.”

The big rate cut initially prompted a rally in stock prices, with the Dow Jones industrial average jumping more than 100 points immediately after the Fed announcement. But the relief was quickly overshadowed by anxiety about another wave of potential losses tied to subprime mortgage defaults.

The major stock indexes ended the day slightly below where they had started after reports that credit-rating agencies were poised to lower their ratings on several companies that insure bonds containing packages of mortgages. The ratings moves would very likely reduce the value of billions of dollars’ worth of these so-called mortgage-backed securities.

Many economists are far from convinced that even a combination of tax rebates and cheaper money would prevent a recession. And in a sign that bond investors are fretting that the moves could lead to higher inflation, yields on 10-year and 30-year Treasury bonds edged up slightly on Wednesday.

But both Congress and the Fed were under heavy pressure to provide reassurance to their respective constituencies.

“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” Fed officials said in a statement accompanying their rate decision. Noting that “downside risks remain,” the Fed said it would “act in a timely manner as needed to address those risks.”

The Fed’s action was its second big rate reduction in eight days and its fifth rate cut since September. All told, the central bank has reduced overnight lending rates by 1.25 percentage points since Tuesday of last week and by 2.25 percentage points since August.

By comparison, under its former chairman, Alan Greenspan, the Fed reduced the overnight rate by only a half-percentage point after the terrorist attacks on Sept. 11, 2001, though it eventually pushed its benchmark rate as low as 1 percent in 2003 to encourage an economic recovery.

The Fed’s move on Wednesday came after it electrified investors on Jan. 22 with an even bigger surprise rate cut of three-quarters of a percentage point at a rare unscheduled meeting.

Among investors, the big uncertainty was whether Ben S. Bernanke, the Fed chairman, would persuade his colleagues to cut rates by one-half percentage point or just one-quarter.

Investors were betting heavily that the Fed would choose the bolder of the two choices, and many analysts predicted that investors would pummel stock prices if the Fed disappointed them.

But Fed officials were already under fire from two directions at once — from investors and analysts on Wall Street who complained that the Fed had responded too timidly to signs of a downturn, and from a small but significant number of economists who complained that policy makers were being pushed by the stock market into rash decisions.

The decision by the Fed’s policy-making committee provoked one dissenting vote by Richard W. Fisher, president of the Federal Reserve Bank of Dallas, who favored no change in interest rates, but other well-known skeptics about rate reductions voted in favor.

“The message came through loud and clear that they are embracing the need for an accommodative monetary policy,” said Robert V. DiClemente, an economist at Citigroup. “This is Volckeresque in terms of the leadership it signified,” Mr. DiClemente added, alluding to Paul A. Volcker, the former Fed chairman who pushed up interest rates to double-digit levels in the late 1970s and early 1980s to stifle inflation.

But while many analysts praised Mr. Bernanke and the Fed for their decisiveness, some said the Fed had become unpredictable and might end up acting capriciously.

While it is clear that economic growth has slowed sharply, the evidence of a looming recession is still ambiguous. Housing construction and home sales have both plunged by more than half over the past 12 months, and home prices are declining in most parts of the country. Over all, the housing market shows no sign yet of having hit bottom.

Retail sales were sluggish during the crucial holiday season, but the government estimated on Wednesday that consumer spending climbed at a modest but respectable pace of about 2 percent during the fourth quarter of 2007.

Job creation slowed to a crawl in December, according to the Labor Department’s preliminary estimate. But many analysts now predict that the Labor Department, which reports on Friday about January employment, will estimate that the nation added about 100,000 jobs this month, up sharply from an estimated 18,000 new jobs in December.

Inflation, meanwhile, is running higher than Fed officials would like. In its report on Wednesday about economic growth in the fourth quarter, the Commerce Department estimated that consumer prices, excluding energy and food, climbed at an annual pace of 2.7 percent. The Fed’s unofficial comfort zone for inflation is between 1 and 2 percent.

Ethan Harris, an economist with Lehman Brothers, said Mr. Bernanke had moved into uncharted territory by putting so much emphasis on reducing the risk of a downturn before one actually materialized.

“I don’t have a huge objection to the Fed aggressively pushing down interest rates, but it does seem a little erratic for the Fed to be flip-flopping from worrying about inflation to cutting rates like this,” Mr. Harris said.

In Washington, Congressional leaders were focused on how they could add to what the Fed was already doing.

The stimulus bill approved by the Senate Finance Committee Wednesday would cost $157 billion in 2008 and $193 billion over two years, roughly $32 billion more than the bill the House passed on Tuesday.

But at the very least, the effort by Senate Democrats to advance their own plan would create some delay in getting a bill to the White House for the president’s signature, because it would require Senate and House leaders to reconcile different plans.

Both the House and Senate proposals offer tax rebates and business incentives to encourage spending. The Senate package would provide tax rebates of up to $500 for individuals and $1,000 for couples, to be phased out for incomes over $150,000 and $300,000, respectively.

29 January 2008

No1

Divi’s Labs PAT for Q3 grows by 216% to Rs.99 crores
Divi’s Laboratories has earned a PAT of Rs.99 crores on a consolidated basis for the
3rd quarter ending 31st December, 2007. Total income for the quarter grew by 90% to
Rs.289 crores. For the corresponding quarter of last year, the company earned a PAT
of Rs.31 crores on a total income of Rs. 152 crores.
For the 9-month period of the current year, Divi’s earned a PAT of Rs.255 crores on
income of Rs.764 crores as against a PAT of Rs.87 crores and income of Rs.482
crores during the corresponding period last year.

source---http://www.divislabs.com

WE will long divis lab future till 2500 we believe divis lab will hit 2500 in a year if you have 10 lakhs behind you than fallow it otherwise see Your pocket and buy in delivery we took it for fundamental basis.

28 January 2008

creming lion

Bhagwan Swaminarayan, Aksharbrahma Gunatitanand Swami and Shri Gopalanand Swami, London

The most accurate definition is proffered by the National Bureau of Economic Research (NBER) that frames it this way:

London stock exchange study
“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale – retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. By studying the charts, one observes that until recently recessions have been a normal conclusion to the business cycle. As seen, however, recently this has not been the case. In past missives I have railed at the central banks, as well as the politicians, for their continuing efforts to prevent the normal business cycle from playing. They did it again last week when the Federal Reserve panicked and cut interest rates by 75 basis points with a concurrent $150 billion economic stimulus package from the politicos. And if this is a typical recession, such maneuvers will likely ameliorate the downturn. But, what if this isn’t “your father’s typical recession?”

Consider this: typically a recession follows a tightening cycle by the central banks causing the entire interest rate spectrums’ yields to rise sharply. Clearly, this has not been the case. Moreover, recessions tend to occur in a high “real” interest rate environment where interest rates are higher than the inflation rate. Currently, when you compare the nominal, or headline, inflation rate to any of the government complex of interest rate yields (Fed Funds, 2-year T’bill, 10-year T’note, etc.), you find “negative” real interest rates. Ladies and gentlemen, negative real rates have always sewn the seeds of economic recoveries. Further, recessions are accompanied by soaring unemployment reports, and hereto this is just not happening. The final ingredient of the typical recession is a huge buildup of inventories, but given the current record low inventory-to-sales ratio, this too doesn’t “foot.” Therefore, if we are entering a recession, it is probably a financially-induced recession and not your father’s typical recession, begging the question, “Will the typical remedies work?”

How we got into this mess can be directly traced to the “powers that be” attempting to stave off the normal business cycle via the engineering of a too-low Fed Funds interest rate (1%), too much liquidity (pumping up the money supply), and a financial complex that spun the situation into a spider web of leverage resulting in an enormous abuse of credit. See if you can follow this, too many fancy loans were made to people who could not afford them (No Doc Loans, 125% Mortgages, Option Arms, etc.). These loans were then packaged into residential and commercial mortgage-backed securities (RMBS/CMBS). The RMBS/CMBS were repackaged into collateralized loan obligations (CLOs), which after receiving some sort of insurance, were then hedged using credit default swaps (CDSs). And, these complex securities were sold into even more complex vehicles like Structured Investment Vehicles (SIVs). At each step, more and more leverage (read: debt) was employed, leaving the entire mess looking like an inverted pyramid with the lonely mortgagee at the bottom, causing economist Hy Minsky to note, “All panics, manias and crises of a financial nature have their roots in an abuse of credit.”

Panic, indeed, for when the poor mortgagees stopped paying their loans, the inverted pyramid toppled right when the financial community was closing their year-end “books,” which is why we have seen so many writeoffs in the new year, as well as why the equity markets have been in a selling stampede. And, it looked like the equity markets were on their way to completing the stampede with a pornographic panic plunge last Tuesday morning -- until the Fed panicked and cut interest rates by 75 bps before the opening bell.

At the time my firm was speaking to The Wall Street Journal and remarked, “While Mr. Bernanke is clearly a very smart man, he seems to lack the market savvy of Paul Volcker in an era gone by.” To wit, if Mr. Volcker were still at the helm of the Fed, we think he would have let the markets plunge 500, 800, or even 1000 points so that they would reach a downside “cleaning price” on their own accord. When they hit that low, stabilized and started to “lift,” then and only then would Tall Paul have cut interest rates to “seal in” that low and put the wind at the back of the markets for a sustainable rally. What Mr. Bernanke did was best summarized by one old Wall Street wag who exclaimed, “He’s used the last aspirin in the bottle, yet we still have the headache!”

That headache spilled over into Wednesday’s session, which found the DJIA off over 300 points early in the session, but then righted itself to close up nearly 300 points. That volatility gave us the second largest daily point swing in history and suggested a short-term trend change for the markets. Was it perfect? Not really, because we never got the “I think I am going to be sick type of downside panic hour” so often associated with selling climax lows. It did, however, come on day 18 of the envisioned 17-25 session selling stampede, so the timing was right, and we recommended committing a modicum of capital to stocks. Thursday’s session rewarded that strategy (DJIA +108), but Friday’s Fade (-171) did not.

So where does this leave us? Well, the equity markets need to string together three or more “up” sessions to indicate that the selling stampede is over. And, as long as last week’s lows hold (11971 closing and/or 11634 intraday), we still have a chance of doing that. If, however, those lows fail to hold, today would be day 21 in said stampede. Worrisome is the fact that there is a ubiquitous feeling that any downside retest of last week’s lows will be successful and consequently should be bought. While we are hopeful that will be the case, if those lows don’t hold, we will be at the point of capitulation where participants throw in the towel and walk away. We are also at the point where you are going to hear whispers about a friend being in financial trouble due to too much debt. The catalyst for a further stock slide could be this week’s FOMC meeting, where despite the 47% odds of a 50 bp interest rate reduction, the Fed stands pat in front of this Friday’s employment report. Recall it was the January 4th employment report that accelerated the stock slide into a selling stampede, which we said would likely extend into tonight’s State of the Union address.

In the meantime, one theme I am certain of is “yield.” The retiring baby boomers want yield in their retirement years combined with an adequate rate of return. This is consistent with Benjamin Graham’s definition of an investment operation, which reads, “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” With interest rates near historic lows, bonds may satisfy the “safety of principal” requirement, but it is doubtful they will provide an “adequate return.” The burgeoning demand by the “boomers” for yield should provide support for select dividend-paying stocks. One such name for your consideration is 7.5% yielding EV Energy Partners (EVEP).

The call for this week: The question du jour is, “Will the rate cuts, combined with the economic stimulus package, be enough to prevent the normal ending to the business cycle even if this is not your father’s typical recession?”

Evidentially, the D-J Transports think so given their 7% rally last week! Yet even if successful, the nation faces a painful deleveraging process that will take time. As John Stuart Mill wrote in 1867, “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed into hopelessly unproductive works.”
”

Nifty will cross 5389 with a volume soon Jindal stainless steel is good fundamental buy along with Jindal power and steel (Jindal Steel Q3 net up 68% at Rs 319.1 cr

Jindal Steel and Power has announced its third quarter results. It has posted 68% growth in its net profit of Rs 319.1 crore for the quarter ended December 2007 as against Rs 189.9 crore in same period of last year.

Net sales went up by 38% at Rs 1395.6 crore versus Rs 1010.1 crore and OPM stood at 38.15% versus 37.36%.)
Source: NSE - Divi's Laboratories Limited has informed the Exchange regarding the consolidated Results for the quarter ended on 31-DEC-2007 as follows: Net Sales of Rs. 28413 lacs for quarter ending on 31-DEC-2007 against Rs. 14951 lacs for the quarter ending on 31-DEC-2006. Net Profit / (Loss) of Rs. 9906 lacs for the quarter ending on 31-DEC-2007 against Rs. 3139 lacs for the quarter ending on 31-DEC-2006.

Fantastic Results!!!
100 Cr Profit this quarter(155 cr in the first half). 15.41 EPS. Share should go up from now on. Share should reach 2000 in short term. Hold on to it.