Stock Market View For Today
Posted on March 19th, 2008 in Personal Finance) by Motilal Oswal Securities Ltd |
MARKET VIEW : POSITIVE
Fed cut of 75bps, better than expected earnings from Lehman Bros and Goldman Sachs, narrowing credit spreads of Fannie Mae and Freddie Mac , crash in CBOE volatility index by 20% and lower commodity prices fuelled a sharp rally in US markets. Asian markets, this morning, are trading up 2.5-3%. Indian markets to open gap up in line with other Asian markets and is expected to remain positive for the day.
Advance tax figures give us some confidence that earnings momentum would be maintained for the 4th quarter.Open interest in the F&O segment indicate a very light position . Total open interest position stands at Rs 61.3b and futures open interest at Rs43.6bn
Interest rate sensitives to be bought today . Financials and real estate to remain in focus.After the recent price correction in both these sectors,some of the top picks would be ICICI Bank, Axis Bank , SBI, HDFC, HDFC Bank, DLF,IBulls Real Estate and Unitech
After winning the power project for 1600MW in Chattisgarh,IBREL’s share of the project stands at Rs5.5b (Rs17.4/sh) on a first cut estimate
- Also, media reports indicate that IBREL may form 50:50 joint venture with Reliance Energy for
development of 6,000 acres multi-product SEZ at Raigad, Maharashtra. We have not yet obtained
any management confirmation of this news. Knight Frank had valued the Raigarh SEZ at Rs120b,
where IBREL has 87% (post acquiring Dev Properties). We have not ascribed any value to the
Raigarh SEZ in our NAV calculation of IBREL as the land acquisition is yet to be completed.
IBREL has till date acquired ~1000acres of land.
- We expect the IBREL to record 490% revenue CAGR and 393% earnings CAGR over FY07-10, on
the back of its asset light business model, vertical de-risking and strategically located land bank.
Our target price for IBREL at Rs808/share is in line with our revised FY09 NAV estimate