DO YOU KNOW?

Yes, it is true. I recently discovered to my dismay that a blog having the URL: http://www.rajatheetradergroup.blogspot.in, is copying word by word, some of my blog posts, without even having minimum courtesy of informing me......Is this an act of "Cyber Plagiarism"? 

Anyway, have a look at the blog-post on Rohit Ferro Alloys Ltd, which is clubbed together with my take on the market shenanigans and then ......Oh yes!!.....The Photo of a "Beautiful Damsel". Really Outlandish!! What has this lady to do with Rohit Ferro Tech Ltd is beyond my comprehension....Huh!! On the left hand side is the screen shot of a part of that blog-page. To get a full view of that Blog, please CLICK HERE.

If you remember, in 2005-2012 period too few blogs used to do the same. The point is that I have no problem, if they copy my contents and put themon their blogs and websites, but at least they should inform me, about the development. Isn't it? This is really horrible and unfortunate!!  

DO YOU KNOW?

Essar Ports Ltd was recommended at Rs.59.30, on January 04, 2014. 

The scrip made a 52-week high on 22 January, 2015. Or in other words the scrip more than doubled in a year (approximately) and gave decent returns to the Patient Investors.  

The company came out with satisfactory set of numbers for the Q3FY15: 

(i) Revenue for the quarter stood at Rs.434.3 Cr, an increase of 9% over corresponding quarter in FY14.

(ii) EBIDTA came at Rs.359.6 Cr in Q3FY15, an increase of 11% over corresponding quarter in FY14.

(ii) Commensurately, net profit for the quarter increased to Rs.98.3 Cr which is 5% higher than in the corresponding quarter of FY14.

(iv) Earning per share for Q3FY15 stands at Rs.2.30.

The long term investors can keep holding the stock of Essar Ports Ltd (Rs.109.10) with a SL of Rs.102. Alternatively they can accumulate the scrip on all declines, till Rs.104.

Pratit Patel Recommends a Pig Iron and a Steel Counter

Sathavahana Ispat Ltd

BSE Code: 526093

NSE Symbol: “SATHAISPAT”

CMP: Rs.43.6

SIL is primarily engaged in the manufacture and sale of (i) Pig Iron with a rated capacity of 210,000 tpa; (ii) Metallurgical Coke with a rated capacity of 450,000 tpa and (iii) co-generation cum thermal power of 50 MW. 

As a backward integration, SIL has set up a 2,98,800 tonns per annum sister plant and 30Mw captive thermal power plant and as a forward integration has setup a 210000 tonns per annum. Ductile Iron making plant and 25000 tonns per annum DI pipe fittings plant. 

Pig iron is used as a raw material in engineering, construction, and foundry industries; and metallurgical coke is used as a raw material in iron making. 

The company is also involved in the co-generation of power. Sathavahana Ispat Limited also exports its products. The company was incorporated in 1989 and is headquartered in Hyderabad, India.

It has an equity base of Rs.50.9 crore that is supported by reserves of Rs.127.75 crore. It has a share book value of Rs.35.1. SIL has report decent growth for H1FY2015. It has recorded net sales of Rs.501.02 crore & net profit zoomed to Rs.16.18 crore in first half of FY15. H1FY15 EPS is Rs.3.18. SIL can report EPS of Rs.7.26 for FY15 and scrip is trading at PE ratio of just 5.7. 

At the current level, the stock is looking extremely hot for investors. One can buy this stock keeping stop loss of Rs.33. On the upper side stock will zoom up to 55 levels shortly while it will zoomed to Rs.72--75levels in 12--15 months. Its all-time high rate is Rs.110.

Rishab Digha Steel and Allied Products Ltd

BSE Code: 531539

CMP: Rs.21.5

Something is cooking in this stock. One can buy this stock at Rs.19. On the upper side stock will zoom up to Rs.27 levels in short span of time & if stock cross its 52 weeks high Rs.27, it can go up to Rs.32--35 levels…

Note: 
(i) Pig Iron is semi-finished metal, produced from iron ore in blast furnace, containing 92%, high amounts of carbon (typically up to 3.5 %), and balance largely manganese and silicone plus small amounts of phosphorus, sulfur, and other impurities. Pig iron is further refined in a furnace for conversion into STEEL It gets its name from the shape of trough (resembling a pig) in which it used to be cast in the 19th century [http://www.businessdictionary.com]

(ii) Rishab Digha Steel and Allied Products Ltd is mainly engaged in the job work of Decoiling, Straightening, Cutting, Shearing of Hr. CR and MS Coils / Sheets. It has no precise licensed capacities and installed capacities as such. 

In other words, the sales mainly consist of job work income. The income from Job work mainly includes recoveries for Decoiling, straightening, Cutting, shearing and warehousing and other small recoveries on account of loading and unloading, transportation charges.

The Company writes in its FY14 annual report: "Your Company has a vital role to play in the developing Economy, as the job orders of de-coiling, straightening, shearing and cutting of varies sizes of Iron and Steel Coils are decreasing". 

LOANS AT LOW INTEREST RATES

If  you are looking for loans at BARGAIN INTEREST RATES, from Private Financiers, then you can immediately contact me (till the fund remains) for more details at: sumanm2007s@gmail.com or suman2005s@rediffmail.com. 

You will have to pay a one time "Service Charge" of around 2-3% (conditions apply) on the loan amount; but since the interest rate would be LOW and you would get it processed at a lightening pace (Usual Time: 2-3 weeks), I feel it should not bother you. 

Listed and unlisted companies (especially those who want to replace their high cost debts with cheap ones), can also approach me for project loans above Rs.2000 crore (Rs.20 billion plus) at interest rates, which will be less than PLR of most of the PSU banks and the NBFCs. 

Moreover, I feel many of you are looking for personal loans (a short-term loan) to assist you with your finances, especially for investing in equities (share market), when the Indian markets are on a high......

However, please note that a "Personal Loan" is neither a "Business Loan" nor a long-term "Mortgage Loan".

Eligibility criteria for personal Loan is different for salaried class and self employed individual. Some of the key points which are looked into for granting personal loans are: Your age, Annual income, Total Work Experience, Educational Qualification, etc.

Hence, rush your applications today. Minimum Loan Amount is Rs.3 lakhs for personal loan and Rs.5 lakhs for other types of loans.

Cement prices shoot up by Rs.100, builders left in the lurch

[Editor: The text says, "Apart from cement, the PRICE of STEEL has also witnessed an upward movement". This was expected as the cost of a single building material cannot increase, in isolation. After the monsoon, the construction activity have picked up in full-steam, all over India, and it is only time that the steel prices would rise-up with full-gush; to balance the domestic demands. Meanwhile, the coal prices have been on the downswing in recent times, adding cheer to the bottomline of the steel companies. The import of coal is projected to rise to as much as 240 million tonnes in 2015-16. Earlier there were media reports that: The Chinese government has unveiled an ambitious plan to Rapidly Reduce Steel Production in the next few years in a bid to help solve the worsening pollution crisis, which is now the No 1 concern for many Chinese citizens.  In his first public appearance as the new Premier last year, Li Keqiang said fixing the air quality would be the top priority. This is music for the Indian Steel sector which is struggling hard to cope with cheap Chinese Imports. The investors are therefore, suggested to buy the steel stocks in BULK and keep holding, for  some mind-boggling returns in the short term]

Photo: Scrap Monster

Sunday, 25 January 2015: Escalating cement prices are affecting the real estate sector, as the input cost has increased substantially. The Builders Association has demanded that the state curb prices of cement and other construction materials, to avoid various construction work coming to a halt.

What is the present scenario?

Coupled with the short supply, the price of cement has increased by around 30% over the past month. Apart from cement, the price of steel has also witnessed an upward movement.

How do the demand and supply play out?

Photo: The Hindu

The price has risen to Rs.360 per 50 kg, as against Rs.260 per 50 kg last year. Dewang Trivedi, president, Builders Association of Navi Mumbai (BANM), alleged that the mismatch between demand and supply has been created by putting the manufacturing of cement on hold for a brief period. "The poor supply has pushed the prices up," he said.

In what way will construction work be hit?

According to developers from city, if the situation continues, construction work is likely to come to a halt. "The input cost has increased beyond limit, with the rise in cement price as well as other construction materials," said Trivedi.

Most of the projects' costs are estimated at the current market price, with a little cost escalation. However, the current price rise will put off the ongoing construction. "At this price, construction will come to halt as developers will wait for the price of cement to drop. This situation is not good for the industry, and people who are looking for affordable homes," said a developer.

What have the builders called for?

The association has demanded the state government to control the prices. "The state machinery needs to take measures to prevent the cartel of cement producers and marketing being formed, as it will directly impact the ongoing construction work," added Trivedi.

The BANM president asked: "When there has not been any major changes, then how can the price rise by over 25%?"

Courtesy: DNA India

India asks refiners to cut Iran oil imports ahead of Obama visit: Sources

[Editor: India should not toe the line of the US too much and jeopardize the

Photo: Anne's Opinions

Shi'ia-Sunni balance in the middle-east. The US's interest in Saudi Arabia, are guided by its Crude Oil and  its unflinching love for Israel. It is to be understood that Shi'ias are Minorities among the Muslims, but the "Shi'ia-Iran" is a great power in the Muslim world; which often cuts-short the nefarious designs of Saudi Establishment/s--the cockpit of International Islamic Terrorism. If this "Axis" is tampered, then it could have a devastating effect on India, for the reasons best known to all. India is already witnessing a volley of "Sunni-Muslim" sponsored terrorism since the last few decades. A too "Strong" Saudi Arabia and a "Weak" Iran is therefore a sure-shot prescription of disaster for India. 
Meanwhile, Sunday’s airstrike on a Hezbollah convoy in the Golan Heights has pushed Israel and the Shi’ite organization closer to a new conflagration in the north. The recent US's  push to clip the wings of Iran, could be guided by the media reports, that Iran and Hezbollah are planning 'imminent' joint invasion of Israel's northern Galilee region according to 'high level intelligence'. Israel carried out airstrike on convoy in Syria on Sunday killing 11 people--among them were commanders from Iran and Lebanon's Hezbollah. Hezbollah TV reported that Hamas commander-in-hiding sent condolence letter to Shi'ite group following Sunday's attack on Golan Heights. Hamas' Deif reportedly told Hezbollah's Nasrallah: "Let's unite against Zionist enemy'. On the other hand, anticipating a possible counter-attack from Hezbollah, Israel Defense Forces Chief of Staff Lt. Gen. Benjamin Gan said: Israel is prepared for “any scenario” and will operate with “Determination and Required Intensity” along the northern border with Syria and Lebanon. However, the defense officials said Israel views as unlikely the prospect of Hezbollah responding to Sunday’s attack by launching rockets or missiles into the Jewish state. They assess that the Iranian-backed Hezbollah is not interested in risking a larger confrontation with Israel. Hezbollah has been bogged down attempting to quell the insurgency targeting the regime of Syrian President Bashar al-Assad]

Photo: My Catbird Seat

Thursday, January 22, 2015: New Delhi: India has asked its refiners to slash oil buys from Iran in the next two months to keep the imports in line with the previous fiscal year`s levels, sources with knowledge of the matter said, days ahead of President Barack Obama`s visit to New Delhi.

India, the second-largest buyer of Iranian oil, has raised its crude shipments from there by more than 40 percent over the first nine months of the current fiscal year, when as part of the temporary deal that eased some sanctions on Tehran it was meant to hold them steady.

Now, the sources said, India`s oil ministry has told Essar Oil, Mangalore Refinery and Petrochemicals Ltd and Indian Oil Corp -- the Indian refiners that buy from Iran -- to cut those imports to keep the annual figure in line with the nuclear deal.

"This is very much about U.S. pressure. India does not want Obama`s visit to be overshadowed by some dispute over sanctions," said Robin Mills, head of consulting at Dubai-based Manaar Energy.

"India is encouraging its companies to cut back on imports because the U.S. demand has been that countries taking Iranian oil should not increase purchases from 2013 levels," he said.

Still, India`s imports from Iran rose to 250,200 barrels per day (bpd) in April-December last year, up 41 percent compared with the same period in 2013, according to tanker arrival data made available to Reuters.

China, Tehran`s biggest oil client, has also increased its oil imports from Iran over the last year by about 30 percent. But with reduced purchases from Japan and South Korea, the other main buyers of the oil, Iran`s exports to Asia are holding around 1 million to 1.1 million bpd.

That`s about half of Tehran`s total exports before toughened sanctions aimed at its nuclear activities were put in place in 2012, and a level U.S. officials have said is allowed under the temporary deals that have eased some of the measures and given Iran access to some of its frozen oil revenues.

Iran and six major world powers are due to meet next month to narrow differences over Tehran`s nuclear programme after making limited progress earlier in January to clinch a more permanent agreement by a June 30 deadline.

CUTTING OIL IMPORTS FEBRUARY-MARCH

During Obama`s visit, the United States will update India on the progress of the Iran nuclear negotiations, Ben Rhodes, deputy national security advisor in the White House told reporters in a teleconference call.

India`s higher imports from Iran would also be on the agenda, said the two sources in India, who did not want to be named because of the sensitivity of the issue.

"The refiners will have to virtually halt Iranian oil imports in February-March to retain purchases at last year`s levels," said one of the sources.

Essar, the biggest Indian buyer of Iranian oil, has already said it will not be taking any of the oil over the next two months, said this source, while IOC has said its buys from Iran will be slightly less in the year to March 31, 2015, than in the previous fiscal year.

"MRPL may have to arrange oil from elsewhere as it was planning to lift 100,000 bpd from Iran this year," the source said.

State-run MRPL has issued a rare spot tender seeking supplies of 1 million barrels of high sulphur oil for lifting during March 1-10, a tender document seen by Reuters shows.

"We are also in talks with other suppliers in the Gulf like Kuwain, ADNOC and Saudi to get additional supplies under our term contract," an MRPL, source who did not wish to be named said.

MRPL and Essar declined to comment on any government requests to cut purchases from Iran. IOC`s finance head did not respond to phone calls.

"India has cooperated with us in the enforcement of our sanctions regime, which continues to put a significant amount of pressure on the Iranian government and the economy," Rhodes said in the teleconference call.

Last week, sources in India`s oil ministry said India will also press the United States during Obama`s visit to remove three Indian oil companies from a list naming firms doing business in Iran, and use the opportunity to seek priority access to U.S. LNG exports.

The U.S. president will arrive in New Delhi on Jan. 25 and hold discussions with Prime Minister Narendra Modi, who visited Washington in September.

Courtesy: Zee News

Crude Oil Prices

Photo: Oil-Price.net

The Brent Crude has started to move up, following my write-up yesterday. 

Meanwhile, OPEC’s Secretary-General said: "Oil prices will rebound rather than extend their decline to as low as $20 a barrel because a collapse since June isn't merited by global supply and demand". 

DO YOU KNOW?

While the energy sector itself is certainly suffering from falling oil prices, analysts point out that energy makes up only 8 percent of the overall S&P 500.

Investors worried about falling oil prices dragging down the stock market and bringing the bull market to a screeching halt should remember this Fidelity note: The S&P 500 has historically had zero correlation with oil prices.

There are many benefits to the American economy from low oil prices.

Fidelity analysts, in particular, believe recent fears over the fall in crude are likely to do more to the velocity of the drop, rather than the magnitude of it.

Moreover, Cheap oil means lower production costs for many American (and indian) industries. For most American (and indian) companies, energy is an expense that eats into earnings. Historically, low oil prices coupled with strong labor markets have produced an environment of strong economic growth in the U.S.

Low oil (gasoline) prices, they say, are akin to a sizable tax cut for American (and Indian) consumers. More disposable income means more spending in other sectors of the economy.

Source: Adopted from Benzinga

Double whammy for steel firms: Rising imports, dipping exports

[Editor: The Steel manufactures  have been shouting since the last few months to give protection to the domestic steel sector, but all these have fallen into the deaf ears of our Prime Minister Narendra Modi, who is now busy, to give a treat to Barrack Hussein Obama (with "Poor Tax Payers' Money"). This report was published on 11 January, 2015, but still the government is take action. 

It is pertinent to note that, the single-most important factor which affected steel companies in 2014 was iron ore shortage, which forced India’s top two private steel companies—Tata Steel Ltd and JSW Steel Ltd—to import the raw material. 

Tata Steel’s captive ore supplies were hit by the mining ban in Jharkhand and Odisha, while JSW Steel was affected by the inability of miners in Karnataka to raise output to 30 million tonnes per annum (mtpa) permitted by the Supreme Court. It is important to note that Tata Steel imported iron ore for the first time. The steel index component in the index of industrial production (IIP) is signalling a weak trend since September; but it seems the ruling NDA Government is not bothered. 

It is ironical that, as a country, we have to import iron ore despite having some of the best iron ore reserves in the world. India is still to have policy clarity and stability, especially on mine-lease renewals and forest clearances, which are key to the growth of domestic steel industry. The point which I want to stress is that: The UPA and the NDA have already destroyed the "Gems and Jewelry Sector" and now Steel could be another one on the anvil; if immediate steps are not taken]

Photo: Top News

New Delhi  January 11, 2015: Facing a double whammy of rising imports and declining exports, domestic steel manufacturers are fearing further squeeze in their margins in a stubbornly subdued domestic market.

Describing the 58% growth in imports and 6.6% dip in exports during the April-December period as "very harsh," one private sector steel maker attributed the situation to higher input costs.

"Despite a literal crash in iron ore prices globally, we are deprived of the benefit domestically. At the same time, we are to pay 2.5% import duty on coking coal which India does not produce. Due to this, Indian steel makers are loosing out to their global peers.

With tepid growth in domestic consumption and large scale of imports, we are not in a position to raise price even if it was an absolute necessity. This is eating out our margins," said the spokesperson.

India, fourth largest steel maker in the world, imported 6.51 million tonnes steel during the April-December period of the current fiscal. Exports, on the other hand, declined to 4.06 MT during the period.

Steel imports are galloping because there is hardly any difference between the landed and the domestic costs of the alloy, forcing steel makers to roll over their price for two months in a row, said another source.

"Considering India's 100 million tonnes installed steel production capacity and a little over four million tonnes of exports, imports should not have been much a headache; but the problem is our consumption has not been growing in the desired proportion," he said.

According to Joint Plant Committee (JPC), a unit of the Steel Ministry, India's steel consumption grew by just 1.4% during April-December period of current fiscal at 55.24 million tonnes compared to 54.507 MT during the corresponding period of the last fiscal.

"The slow year-on-year cumulative growth numbers appear to reflect the lingering effect of economic slowdown and is further depressed by declining growth rate in production for sale in December 2014 as compared to same period of last year," JPC recently said.

A senior executive of another private sector firm said the government must try to contain the free-flowing imports of steel and take steps to boost domestic consumption.

Steel in India is coming in big volumes from China, Japan and Korea. While exports is a compulsion for China because of its huge domestic supply-demand mismatch; Japan and Korea are taking advantage of the free trade agreements with India.

Courtesy: Business Standard

Narendra Modi: Know Your Leader

In the above picture, which is culled from the Economic Times of 23 January, 2015, it is seen that our Prime Minister, Narendra Modi has made an important observation on King Abdullah of Saudi Arabia, who passed away on 23 January, 2015. 

Now though the death of a person is always painful let us see what the Anti-War Blog wrote about this Kingdom (which was managd by the late king for decades), on February 18, 2014: 

Saudi Arabia, the brutal authoritarian theocracy that the democracy-promoting Washington claims as one of its closest allies, has a bit of a history of pressuring the U.S. into Middle East wars. The 1991 First Gulf War to oust Saddam Hussein from Kuwait was fought largely in defense of Saudi Arabia. The Kingdom also encouraged the Bush administration to invade Iraq in 2003. And the Saudi king has repeatedly urged Washington to attack Iran to secure Saudi interests in the Sunni-Shia regional divide.

Saudi Arabia also has a rather incriminating and duplicitous history of harboring Islamic extremists of the al-Qaeda, jihadist type. They helped the U.S. fund the mujahideen in Afghanistan. Most of the 9/11 hijackers were Saudis (and they were directed by a Saudi, named Osama bin Laden). There is even a classified record that members of Congress have claimed indicates the Saudi government’s role in the 9/11 attacks.

Since the start of Syria’s civil war, foreign jihadists have been flooding the country – many of them coming from Saudi Arabia.

Al Monitor reports:

Estimates of the number of Saudis fighting in Syria range as high as 2,500. Some are hardened veterans of earlier jihads in Afghanistan, Bosnia and Iraq. A few are compatriots of Osama bin Laden. Others traveled to Syria from the kingdom, despite individual travel bans imposed for dissident activities at home. Some traveled directly through major Saudi airports, leading many observers to conclude they were encouraged by the authorities to leave the kingdom and go fight Assad. For over two years, the Saudi government seemed to turn a blind eye to travel by its citizens — even political dissidents — to Syria.

Kuwait, which has close ties to the Saudi government, “is a major source of private funding for Jabhat al-Nusra, al-Qaeda’s official arm in Syria,” Al Monitor reports.

Interesting enough, but that is not the big piece of news from this Al Monitor report. The big news is this: “King Abdullah will make a major push for a more vigorous American effort to oust Assad when he hosts Obama [late next month]. The Saudis have been openly disappointed that Obama has not used force to get rid of Assad or provided more assistance to training and arming the Syrian opposition.” Now, the report says, the Saudis are trying to persuade Obama to impose regime change in Syria by promising to cut back on its support for jihadists.

To sum up, Saudi Arabia’s policy on Syria amounts to funding groups considered by Washington to be terrorists and to lobbying the President of the United States to destroy the Damascus government. The two initiatives are deeply intertwined given that a collapse of the regime in Syria would mean chaos and huge ungoverned spaces, which foreign funded jihadists could thrive in.

I’ve been hammering away on the issue of entangling alliance for months now, but where is the outrage on Saudi Arabia? The U.S. government continues to help prop up and arm the Saudi government and yet it supports terrorism and is trying to suck the U.S. into another dangerous and endless military quagmire in the Middle East. Where are the belligerent members of Congress, the Peter Kings and Charles Schumers, condemning Saudi Arabia? They condemn other countries for much less.

Import duty hike likely in metals, mining space: PLilladher 

[Editor: Rohit Ferro Tech Ltd is not only implementing CDR Scheme (where it gets large concessions in terms of interest rate and payment schedules) but also has a couple of coal mines in Indonesia. The stock which closed yesterday at Rs.7.90 is near its 52-week low price and therefore, should be accumulated on all declines, for a target of Rs.12-14, in the short term]

Jan 23, 2015: Prabhudas Lilladher has come out with its report on metals & mining sector. "Hike in import duty likely; weak prices to undo the benefit", says the report.

Prabhudas Lilladher's report on metals & mining sector "Given the fall in demand in China and higher exports from Russia following depreciation in Rouble, the imports of steel into India has increased considerably resulting in renewed pressure on the domestic prices. 

This, we believe may result in the likely increase in import tariffs in India in the near term to protect the domestic industry. Govt’s qualitative measures including mandatory quality certification have partially helped in curtailing rebar imports from China since Nov-14. However, Longs prices remained subdued despite reduced imports due to weak demand. 

In case of flat products, we expect global prices to remain weak in the near term due to upcoming holiday season in China and elevated inventory levels. Hence, we believe that any benefit of higher import duty to the extent of 250bps would be off-set by lower steel prices. So far, all odds are in favour of hike in import duty but Ministry of Finance seems to be averse to hike in duty." 

Valuation and Outlook: 

"Sentiment wise, a hike in duty would be positive for Indian steel sector. However, should the global steel prices continue to remain weak, the benefit would be only for a short period. Steel stocks underperformed the broader indices by a wide margin, in line with our expectation. 

We believe that stocks would remain pressure due to strong Rupee, waning benefit of cheaper iron ore and weak global demand. However, we like TATA steel on the back of attractive valuations, restoration of iron ore mining in India and better play on recovery in Europe with leaner operations", says Prabhudas Lilladher research report.

Courtesy: Money Control

Oil pares gains as Saudi oil policy set to continue

[Editor:  Oil prices have more than halved since the summer, when crude was more than $100 a barrel, amid an oil glut and weak global demand. A shale boom in the US has turned the US from the world’s biggest oil importer into a major producer, pumping more than 9m barrels a day.

Saudi Arabia, the world’s biggest oil exporter, led a decision by the Organisation of the Petroleum Exporting Countries in November to keep the cartel’s production unchanged at 30m barrels a day.

Meanwhile, Goldman Sachs believes that nearly $1 trillion worth of future drilling projects would no longer be profitable with Brent crude at $70 per barrel. However, it’s now trading at $45.83 per barrel, much below the benchmark level. If those projects were shut down, it would mean a production loss of 7.5 million barrels per day in 2025, equal to 8% of current global demand. This might fuel unemployment, Banking and Housing crisis in Texas, the US state, which accounts for nearly 40% of total US production; up from 25% in 2011 (The situation is actually comparable to 1986, when crude fell 50% over a matter of months). 

One the other hand, the Saudi officials have been very keen to regain the market share in the oil market by increasing supply and shaking out the weak-handed producers. But at what cost? Since September, the Saudi stock market has been one of the worst performers in the world – down 25%. At one point the index was down 35%, but rallied after the country’s finance minister implied the government would not cut spending on development projects or social benefits in 2015, despite falling oil revenues. The country which derives 90 percent of its budget from oil, is already feeling the pain due to the commodity's collapse.

Now, if oil prices continue to fall, there could be a serious economic crisis in the country. Even the current oil minister of Saudi Arabia, Ali al-Naimi (a position he held since 1995) knows that. Thus, according to my understanding, the fall in Oil cannot continue further, as the equation of demand and supply is likely to take-over from here, soon. 

Moreover, too much fall in oil will not be good for both China and India, who are Major Exporters to the US and the EU. Besides, this the Saudi’s have pegged their currency, the Riyal (SAR), to USD since 1986, meaning any rapid appreciation of USD will tighten domestic monetary conditions. 12-month USD/SAR forwards are trading at their highest levels since the financial crisis. If USD continues to rise and oil continues to fall, the country’s monetary policy would need a severe shift. So, I believe something will be done immediately to stem the tide]

Photo: Anti War Blog

23 January, 2015: Oil prices rose on Friday after the death of Saudi Arabia's king added to the uncertainty in global oil markets, although the new ruler indicated immediately there would be no policy change.

Brent crude rose to a high of $49.80, up $1.28 a barrel, before easing to $49.30 by 10:10 a.m. ET. U.S. light crude oil was at $46.28, down 3 cents.

King Abdullah bin Abdulaziz died early on Friday and his brother Salman became king of the world's top oil exporter.

Salman named his half-brother Muqrin as heir and nephew Mohammed bin Nayef, 55, as Deputy Crown Prince, moving to forestall any succession crisis at a moment when Saudi Arabia faces unprecedented turmoil on its borders.

Saudi state television said King Salman intended to keep oil minister Ali al-Naimi in place, suggesting the country's oil policy would remain unchanged.

Hans van Cleef, senior energy economist with ABN Amro, said the initial rally after King Abdullah's death was due to uncertainty over succession and Saudi oil policy.

"There was only a spike in prices over these tensions and they eased afterwards," he said.

After seeing strong volatility and price falls earlier in January, oil markets have moved little this week, with Brent prices range-bound between $47.78 and $50.45 a barrel.

The new Saudi king is expected to continue an OPEC policy of keeping oil output steady to protect the cartel's market share from rival producers.

Abdullah's death comes amid some of the biggest shifts in oil markets in decades. Oil prices have fallen by almost 60 percent since peaking last June as soaring supplies of shale oil from North America have coincided with cooling demand.

Booming U.S. production has turned the United States from the world's biggest oil importer into one of the top producers, pumping out over 9 million barrels per day.

Data from the Energy Information Administration on Thursday showed the biggest build in U.S. crude inventory in at least 14 years, driving Brent and WTI prices apart.

To combat soaring output and falling prices, many oil exporters, such as Venezuela, wanted the 12-member Organization of the Petroleum Exporting Countries to cut output in order to support prices and revenues.

Yet, led by Saudi Arabia, OPEC announced last November it would keep output steady at 30 million barrels per day.

Courtesy: CNBC

DO YOU KNOW?

On 13 January, 2015, a buy call was initiated on SPARC Ltd (Sun Pharma Advaned Research Company Ltd; BSE Code: 532872), for the Premium Members, at around Rs.200-205 for a target of Rs.245, in the next couple of weeks. The scrip made an all time high today (23/01/2015) at Rs.334.55. 

Congratulations to all those Premium Members (and those who trade through my recommended brokerage house/s), who bought the scrip on my recommendation. 

Options Traders Turn Bullish, See Big Gains for U.S. Steel

NEW YORK, January 23, 2015:  -- Option traders are turning bullish on U.S. Steel (X) less than one week before earnings are released. 

OptionMonster's Heat Seeker system detected the purchase of more than 21,000 February 24 calls Thursday, dwarfing previous open interest of 6,405 contracts and indicating new positions. The calls initially fetched 57 cents and 58 cents but appreciated to as much as 90 cents by the afternoon,  a gain of more than 50%. 

That kind of leverage is possible because calls lock in the price where a stock can be purchased. Their cheap cost ensures that investors won't miss a rally while limiting the amount of cash at risk in the event of a pullback. 

U.S. Steel shares were down slightly when the trades hit but turned almost immediately and ended the session up 2.95% to $22.71. The heavily shorted stock, which trades for less than book value, was holding support at its lowest level since October 2013. Quarterly results are due after the closing bell next Tuesday, Jan. 27. 

Overall option volume in the name was quadruple average amounts in the session, with calls accounting for a bullish 78% of the total.

-- Written by David Russell of OptionMonster 

Courtesy: The Street

Steel and mines ministry seeks pre-budget hike in import duty on finished steel

[Editor: Meanwhile, Rajat Bose of www.rajatkbose.com told CNBC-TV18, on January 23, 2015: "I have seen that any good news on Europe Tata Steel Ltd (Rs.402.65) tends to perform for valid reasons. In Tata Steel I would put a stoploss below Rs.395, on closing price basis I am looking at a price of Rs.418-421. Again this is a positional trade and the next target beyond Rs.421 would be Rs.429. Tata Steel could well be forming a bottom, getting a fillip with this new found momentum.” Yesterday, Ambareesh Baliga - Independent market expert told CNBC-TV18: "Tata Steel  is one stock where I see further movement of Rs.20-25 more from the current level". So, we could soon see a rally in the steel stocks]

Photo: Scrap Monster

KOLKATA, 22 Jan, 2015: The union steel and mines ministry has sought an immediate hike in import duty on finished steel to 10% from the present level of 5 to 7.5% and a withdrawal of duty on raw materials like, iron ore and coking coal in the light of surging steel imports. 

While these have been part of its Budget recommendations, the move gathered significance recently with the ministry shooting off an urgent letter to the finance ministry to implement a pre-Budget change in duty rates. 

The move, if implemented, will bring much needed cheer to domestic steelmakers grappling with rising imports and scare raw materials, the ministry's suggestion against lowering export duty on iron ore will disappoint the mining sector players. 

The Budget proposals were sent to the Finance Ministry as part of its budget recommendations late last month.

Steel imports grew by 58% during April-December 2014, even as exports fell by 6.6 % in the same period. In contrast, domestic steel consumption has shown a lacklustre growth of 1.4% in the first nine months of the current fiscal. 

The domestic steel industry has been urging the government to take measure to restrain steel imports, which have surged in the past months. A hike in import duty on finished steel is likely to check imports from China, which is facing an economic slowdown. 

However, a huge quantity of steel is also being imported from countries like Japan and Korea, due to the free trade agreements between India and these countries that allows preferential tariffs. 

On the raw material side, withdrawal of import duty on iron ore and coking coal will come as a huge benefit for domestic steelmakers who are facing problems in sourcing iron ore due to the mining problems. Rupee depreciation has also emerged as a threat for steel companies which have had to resort to imports of iron ore, in addition to coking coal imports. 

Removal of import duty will thus help Indian steel companies contain production costs and make them more competitive both in the domestic and export markets. 

However, if implemented, the ministry's suggestion will disappoint mining industry players who have been demanding a reduction in the 30% export duty on iron ore. 

Courtesy: The Economic Times

WINNING STROKES: THINK DIFFERENT

Mangalore Refinery and Petrochemicals Ltd reommended yesterday at around Rs.48.95, today touched Rs.51.20, before closing at Rs.50.50. The stock will give handsome returns to the investors. Please have patience, till it starts to get benefits out of the expansion.

Rohit Ferro Tech Ltd today closed at Rs.7.90, due to weak outlook of the steel sector in the international market and also due to the domestic problems. In an interview with CNBC-TV18, on 22 January, 2015, Kalyani Steel MD RK Goyal said: 

"Just for your information, particularly long products import has gone up by 550 percent in Q3 and in terms of volume it has gone up to the level of 450,000 tonnes in last quarter. On annualised basis it becomes 1.8 million tonne against the total demand of the industry around 4 million tonne and if this continues, I think the local industry will be wiped off. Major imports are coming from China besides from various other countries including Europe, including Russia. The reason is that the economic situation or the slowdown in the growth in China -- since local demand in China is going down, they are trying to find out avenues to export that material and India is a good ground for them where there are practically no restrictions and a reasonable size market for them.The government should introduce some sort of steep import duty so as to deter dumping of products from countries such as China".

Meanwhile, China's apparent crude steel consumption fell (3.4 percent from a year ago to 738.3 million tonnes in 2014), for the first time in three decades in 2014, data from an industry association showed, a further indication of how the country's economic slowdown is hurting industrial demand. Some analysts are of the view that a decline in the use of steel in China, which is both the top consumer and producer of the alloy, will dent iron ore prices that have already been roiled by a global oversupply. Spot rates of the steelmaking ingredient are currently mired near a 5-1/2 year low $65.60 per tonne. It is interesting to note that, struggling with weak demand as economic growth slowed to 7.4 percent in 2014, the lowest since 1990, Chinese steel producers turned to exports, which according to CISA rose 64.5 percent to the equivalent of 84.4 million tonnes of crude steel last year. Overseas sales got a further boost last year as exporters took advantage of a loophole that allowed them to gain tax rebates by adding tiny quantities of boron to their products. However, that loophole has since been closed. CISA said in a report published on its website that around 40 percent of exports in 2014 contained boron, and the decision to cancel the rebate this year will have "a certain impact" on the domestic market. Also, amendments to China's Environmental Protection Law, which came into effect on Jan. 1, 2015, will raise production costs in an industry which is already trying to survive on profit margins of less than 1 percent in 2014. Thus, these two points (on China) are definitely going to have positive effects on the Indian domestic steel sector as well. Moreover, some analysts, warned of a potential squeeze higher, with the market now positioned with the biggest net short since 2008 across the LME and CME Group Inc's Comex contract combined. "With the market oversold and heavily short, the likelihood of a short term squeeze is rising. We would view any further bouts of weakness as prime buying opportunities," said ANZ in a report. 

Besides, stocks and bonds surged worldwide and the euro sank to an 11- year-low on Friday, the day after the European Central Bank announced a quantitative easing plan. Oil rose following the death of the king of Saudi Arabia. European shares were on course for their strongest week since late 2011 and emerging markets headed for their best in almost 10 months. Italian, Spanish bond yields dropped to record lows. Purchasing manager surveys showed the euro zone economy began 2015 in better shape than expected, although companies are still cutting prices.  

The ECB announced on Thursday a programme to buy government bonds, which will pump roughly a trillion euros into the stagnant euro zone economy. Although QE was widely anticipated, the size of the programme was not - markets had already largely priced in QE at about 500 billion euros in total so the package of 1.14 trillion euros easily outpaced market expectations. Now, though most of the analysts are of the view that a strong dollar is negative for the metal sector, but what I feel is that, easy money from the European QE, would soon start to enter the metal (Commodities) sector, sparking the fear of inflation--i.e, this move is likely to  inflate the prices of commodities, as we saw last time. Therefore, I feel we are probably sitting, at the end of a downturn in the metal sector. So, according to my view one should start accumulating steel (and other metal) stocks on any bounce. In another development, the latest producer manufacturing index(PMI) came in better-than-expected from China. Newly released numbers saw China's PMI come in at 49.8, up from 49.6 in December. Japan's PMI was up as well, coming in at 52.1, 0.1 percentage point higher than last month's 52. Later today, a slew of PMI numbers are scheduled for release, including the ones from France, Germany, Eurozone and US. In the latter, existing home sales and the CB leading index will be watched as well. 

Jindal Saw Ltd recommended earlier and also today, rose to Rs.86.90, intra-day before closing at Rs.84.60. The company as mentioned earlier came out with decent set of numbers for the Q3FY15. In Q2FY15, too, the results were impressive. The company is in a commanding position in India's tubular market, being the undisputed leader with turnover in excess of Rs.7500 crores. It is one of the country's largest producers of SAW pipes, which is widely used in the energy sector for the transportation of oil and gas. The investors are suggested to accumulate the same on all declines for a short term target of Rs.91-92, within this week. 

Today, as expected Veer Energy and Infrastructure Ltd corrected to Rs.4.15, intra-day before closing at Rs.4.18. I had mentioned a couple of days back in this blog, to be cautious to on the scrip as it nearly touched my target of Rs.5 (rose to Rs.4.98 intra-day). I will tell you when to enter the counter once again. For the time being the scrip could. fall to Rs.3.70. I had today, asked all the Premium Members to book profits in the counter. 
Nifty today closed at 8,835.60 up 74.20 points. Nifty has appreciated around 780 points or ~9% from the low of 8065 within a few trading sessions. Bulls are in full command of the affairs, in Dalal Street. Moreover, the point that Nifty is in a “Resistance Free Zone”, gives further ammunition to the bulls. The traders are suggested to buy stocks from both the large and small / mid-cap spaces. 

Jindal Saw Ltd: Result Update

Jindal Saw  Ltd came out with good set of numbers for the quarter ended December 2014. The profit before tax in Q3FY15 came as Rs.101.3 Cr as against Rs.60 Cr  in Q3FY14. During the quarter, the net profit of the company rose 23.74% to Rs 619.20 million from Rs 500.40 million in the same quarter last year.

Net sales for the quarter  rose marginally 3.97% to Rs.17,774.30 million, compared with Rs.17,096 million for the prior year period.

Earnings per share for the quarter stood at Rs.2.21, registering 22.10% growth over previous year period.

It is pertinent to mention here that, Jindal Saw reported 239% rise in net profit for the July-September quarter, 2014-15, at Rs.74.60 crore on higher sales.

Net turnover of Jindal Saw in Q2, 2014-15 rose to Rs.1,589.50 crore from Rs.1,233.70 crore a year earlier.

As of 30th September, 2014, the company has orders worth around $1 billion and 65% of which is for large diameter pipes. The orders for large diameter pipes are slated to be executed by June 2015 and in case of ductile iron pipes, the same are slated to be executed over next 12-18 months or more.

The company which produces pipes used in different industries had clocked Rs.22 crore net profit in Q2FY14.

A buy call was given to the Premium Group members yesterday at Rs.84-84.40. The investors can still accumulate the scrip at the CMP of Rs.84.70--84.80, for a short term target of Rs.92. 

It is to b e  noted that, Jindal Saw Ltd was earlier (October, 20, 2014) recommended a buy at Rs.75.95, after which it made all time high of Rs.115.80.

DO YOU KNOW?

The new shareholding pattern of Veer Energy and Infrastructure Ltd shows the promoters holding as  33.35 % (in it 8.852 % is pledged or otherwise encumbered) as against 35.59% in September, 2014 quarter. So, the promoters' holding has gone down, isn't it? Am I right?

2ndly, Veer Energy and Infrastructure Ltd is a Re.1, Face Value share and not Rs.10. It means at the CMP of Rs.4.74, it is actually priced at Rs.47.4, considering Rs.10 as Face Value. 

3rdly, the stock has given more than 30% return in the last one week. Now the exchanges might ask for clarification from the company regarding the unusual price rise and volume. The scrip might come down, if the company says there is no  news. So, some caution needs to be maintained in the short term.