21 April 2013

April 21: Technicals- Reliance Industries, SBI, Infosys, Tata Steel::Business Line


Markets prove resilient ::Business Line




Gold - Protect against downside • UBS


Gold
Protect against downside
• Expectations that the Fed will reduce QE, that inflation should not
be an issue and that equity markets seem to be the better place
have burdened the price of gold in recent weeks.
• Investment houses have lowered their forecasts and the technical
chart picture has deteriorated as well – reinforcing downward pressure.
• These uncertainties prompt us to reiterate that gold investors should
protect their positions over the next three months.
Testing USD 1,525/oz
As highlighted in our latest gold report Fragile sentiment published on 4
April, we advise investors to protect their gold positions over the next three
months. The lack of investment demand due to fading inflation concerns
in the Western world, a bias towards more USD strength in the short run
and a bull run in US equities are set to trigger a gold price decline beyond
USD 1,525/oz. Gold also finds no support in the discussion among FOMC
members to taper off – or to halt – the US Fed's quantitative easing program
over the coming quarters. We therefore expect the fragile sentiment of the
yellow metal to continue in 2Q13 with the bias to break below key support
levels.
Recommendation
Although we think that the decline in the gold price is overdone and does
not correspond with our outlook of ongoing negative real interest rates,
even long-term investors should seek out short-term price protection. We
also advise investors to avoid gold as an underlying for yield enhancement
strategies for the time being.
Forecast adjusted
To reflect a lower starting point for our 12-month forecast, we lowered our
long-term gold forecast to USD 1,750/oz from USD 1,875/oz. That said, we
reiterate our message that the developed world still has issues to resolve
that favor debt monetization and money's loss in purchasing power.

Jhunjhunwala’s portfolio sees little change in Q4 :BS Research Bureau

http://www.business-standard.com/content/general_pdf/041813_01.pdf

Shares of some companies in which billionaire investor Rakesh Jhunjhunwala holds a stake rose today, amid speculation that he was selectively increasing his holdings in some of these. Autoline Industries was locked in the maximum permissible upper trading limit of 20 per cent, VIP Industries jumped 16 per cent, while Bilcare, NCC and Delta Corp rose almost five per cent each.

Such talk assumes significance because a theory doing the rounds is that Jhunjhunwala had incurred losses in some of his trading bets between January and March. This resulted in many in the market speculating that he was cutting stakes in many of his holdings to make up for the losses. Jhunjhunwala could not be reached for comments.

The shareholding pattern of companies (which have declared holdings so far), in which Jhunjhunwala and his wife, Rekha, were shareholders as on March 31, does not show he was trimming his portfolio in a big way during the period. According to data compiled by Business Standard, both of them retained their holdings in most of the stocks even as they increased their stake in a handful. They trimmed part of their holdings in stocks such as Titan Industries and Alphageo. (JHUNJHUNWALA’S EMPIRE)

RIL - Q4FY13 Result Update_LKP


RIL - Q4FY13 Result Update
Higher GRM and higher other income drives Q4 profitability
RIL’s Q4FY13 net profit of Rs55.9bn was in line with our estimates. GRM for the quarter at $10.1/bbl was in line with our estimate while RIL’s premium over Singapore GRM decreased from $3.1 to $1.4/bbl. Petchem EBIT for the quarter declined sequentially by 2.2% to Rs19bn on account of lower polyester margins and lower volumes in PX, PE and Butadiene. Gas production from KG-D6 declined further to 19.2mmscmd (yoy/qoq -16.6/-5.4mmscmd). Other income increased to Rs22.4bn (31.5% of PBT). We maintain our NEUTRAL rating on the stock with a revised SOTP price target of Rs853.

Actual v/s Estimates
Y/E, Mar (Rs. m)
Q4FY13
Q3FY13
qoq (%)
Q4FY12
yoy (%)
LKP Estimates
Deviation (%/bps)
Revenue
841,980
938,860
-10.3%
851,820
-1.2%
888,779
-5.3%
EBITDA
78,250
83,730
-6.5%
65,630
19.2%
83,228
-6.0%
EBITDA (%)
9.3%
8.9%
38 bps
7.7%
159 bps
9.4%
-7 bps
PAT
55,890
55,020
1.6%
42,360
31.9%
54,878
1.8%


LKP Research

Should you buy gold now? ::Business Line


When the going gets tough, investors exit gold ::Business Line


Gold is down 30 per cent from its record high of $1920.30/ounce in September 2011. With the milestone for a bear market at 20 per cent, is gold into a bear phase?
Investors certainly seem to think so. SPDR Gold Trust, the world’s largest gold backed exchange traded fund (ETF), has reduced its gold holdings by 196 tonnes since the beginning of this year, as investors redeemed units.
Indian ETFs are in a similar situation, suffering net outflows of Rs 14 crore in the last three months. This is against a net inflow of Rs 1,131 crore in the previous quarter (October-December of 2012).

COMMODITY FACTOR

The rapidly waning investor interest in gold is not just a reflection of fear about central bank sales or other factors that drive gold prices.
They are a result of what’s happening in other asset classes as well. For one, there is improving economic growth in the US, which has sparked a global stock market rally. The MSCI World index is up 8 per cent so far this year. The US bellwether, Dow Jones Industrial Average, has rallied 12 per cent. Also, the yellow metal seems to have lost its gilt-edged status, and is perversely behaving just like other commodities.
In 2011, the correlation of gold (in US dollar terms) with the Reuters CRB Commodity index was negative 0.48, indicating that gold prices actually rose when commodities fell. By 2012, this turned into a positive correlation of 0.5. By now, the correlation is even stronger at 0.8.
With gold beginning to move in step with other commodity investments, its safe haven status seems to be in doubt. It is possible that investors are shifting form the yellow metal to the greenback. The US Dollar index is up three per cent for the year.

FICKLE LOT

Trends from the past also show that investors are the most fickle lot when it comes to buying gold.
Quarterly demand statistics over the last five years show that, on four out of five occasions when gold prices declined by 10 per cent, there was a significant drop in demand for gold-ETFs and gold bars.
Take the year 2008. Between March and May that year, gold price corrected 17 per cent to a low of $852/troy ounce.
Gold ETFs such as the SPDR Gold Trust saw their own gold holdings drop quickly, reflecting investor pullouts, as gold prices tanked.
In the April-June quarter of that year, retail investment in gold bars, coins dropped by nine per cent.
Indian investors proved even more skittish. Investments in coins and bars dropped 40 per cent during this period.

RR Research - Weekly Market Report

Technicals- Tata Global Beverages, Jain Irrigation, TV18, HBL Power, BGR Energy Systems, Aditya Birla Money, ::Business Line

 

Silver may find support at Rs 41,000/kg ::Business Line



   


Light up your portfolio with Bajaj Electricals ::Business Line


23 April Tax talk:::Business Line



I had purchased a house by availing a bank loan. The property is let out as I live in a different city. I am claiming loss on house property after taking rent into consideration.
Now, my wife wants to purchase a house in her name by availing a bank loan for which I am a co-obligant. She wants to take Rs 25 lakh loan. As this property is also in a different city, we are planning to let out the same. What is the limit for interest on this loan after taking rent into consideration according to the financial year 2013-14 budget proposal?
 — Srihari
According to section 24 of the Income-tax Act, 1961, in case of a let out property, actual interest payable is allowed as a deduction while computing income under the head ‘House Property’. In respect of the additional deduction u/s 80EE proposed in the Budget proposal for FY 2013-14 for interest on home loan, one of the conditions is that it is available for the house which is self occupied property. Hence, the deduction under this section shall not be available to your wife as she intends to let out the new house.
For the last three years (FY 2009-10, FY 2010-11 and FY 2011-12), I have been filing I-T returns and paying income tax as applicable. Recently, I came to know that those earning income from let out property can avail standard deduction of 30 per cent, which I have not claimed in my tax returns. Is there any way I can file revised I-T return for last three years and get refund for the extra tax I had paid by not claiming the standard deduction of 30 per cent?
 — Col P M Singh
According to section 139(5) of the Income-tax Act, 1961, an assessee may furnish a revised return, if he discovers any omission or any wrong statement in the original tax return, filed by him within the due date of filing of the original return. The due date of filing such revised return is one year from the end of the relevant assessment year or before the completion of the assessment of the original return, whichever is earlier.  Thus, in your case you may revise your original tax return for the FY 2011-12 to claim the standard deduction of 30 per cent while computing income under the head ‘House Property’. The due date of filing the revised return for FY 2011-12 is March 31, 2014, provided the assessment of the original return is not completed in the meantime. Please note that you cannot revise your tax returns for FY 2009-10 and FY 2010-11 as the due dates of filing the revised returns were March 31, 2012 and March 31, 2013, respectively.