Markets Today - 27/07/2010 - Disclaimer Post Applies

Nifty trading at premium, with concentration observed at 5,500 CE and 5,300 PE indicates July series to expire between 5,500 and 5,350 wherein 5,410 acting as an intermediate support. The wide range for August series on account of concentration is 5,500 and 5,400.

Option Analysis  

·         Call Writing: In July series major call concentration is witnessed at 5,500 PE of 121 lakh shares. In August series, maximum writing and concentration was seen at 5,500 PE of 5.72 lakh shares.

·         Put Writing: On the other hand, major concentration in puts is observed at 5,300 of 100 lakh shares for July series. However, fresh major writing in August series was witnessed in 5,400 strike of 8.23 lakh shares.

Implications: In July series, shedding is seen across strike prices in calls as well as puts with major concentration observed at 5,500 CE and 5,300 PE. Thus we expect Nifty to expire between 5,500 and 5,350 with 5410 acting as an intermediate support.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 196 crore with Gross buyers of Rs 2,078 crore and Gross Sellers of Rs 1,881 crore.

·         DIIs were net sellers of Rs 718 crore with Gross buyers of Rs 742 crore and Gross sellers of Rs 1,461 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 27^th July, 2010 close at 19.22 which is 3.76% lower as compared to previous close, after touching an intraday high of 20.16 and low of 18.96.

Implications: Indian VIX plunged in today’s trading session and gave up yesterday’s gains. We expect it to move upwards and are Bullish on the same.

Market Rollover - July Series - 27/07/2010

Market Snapshot for July Series – Gained of ~98 points in July series Nifty July series had been volatile for first half of series but then it turn to trade in narrow range of 5,300 to 5,450 for last 2 weeks. Currently, Nifty has gained 98 point or 1.8% for July series as compared to June series. We expect Nifty July series to settle between 5,350 and 5,450 on back of concentration and activity in options side. This would be consecutive second series it will close on a positive note. Rollover– Positive Rollover cost of ~11bps in June series Nifty rollover was weak as compared to market wide rollover by ~342bps to 28.5% and average positive rollover of ~11bps. The rollover was higher by ~200bps as compared to average of last 6 months but total open interest stood at 361.9 lakh shares. Lower rollover and open interest indicates traders are skeptical of positive momentum to continue for the August series which would invite some correction in August series. Review of Nifty Strategy On June 26, 2010, we had recommended a Short Strangle strategy on Nifty, by selling July 5,400 Call and 4,600 Put options, giving a total premium inflow of Rs 95.1. Currently, the strategy is trading at net premium of ~Rs Rs 45, representing a profit of Rs 2,500 per lot. We recommend traders to hold the positions for next 3 trading sessions. Sector-wise Rollovers  Highest long Roll: Bullish Signal Hotels (41.5%), Banking (38.8%), Finance (37.3%) Highest Short Roll: Bearish Signal Media (37.0%), Transport (30.9%), Oil & Gas (30.2%) Lowest Rollover Power (24.4%), FMCG (20.6%), Fertilizers (14.4%) Stocks Rollovers Highest long Roll: Bullish Signal NTPC (62.7%), BHARTIARTL (55.4%), BHEL (54.8%) Highest Short Roll: Bearish Signal ABB (60.0%), POWERGRID (55.7%), M&M (55.2%) Lowest Rollover ASIANPAINT (10.0%), PATELENG (10.1%), HCLTECH (10.8%)

Markets Today - 26/07/2010 - Disclaimer Post Applies

In July series, concentration of call is observed at 5,500 of ~120 lakh shares and put at 5,300 of ~99 lakh shares. By observing concentration, we expect next series Nifty may trade/settle between 5,500 and 4950.    

Option Analysis  

·         Call Writing: In today’s trading session call shedding was witnessed across strike prices except at 5,400. Major shedding was seen at out-of-the-money strike with maximum at 5,600 of 7.8 lakh contracts. Concentration observed at 5,500 CE.

·         Put Writing: On the other hand, fresh major writing was witnessed only in 5,300 strike of 0.6 lakh contracts whereas shedding was seen across strikes with maximum at 5,500 of 6.26 lakh contracts. Concentration observed at 5,300 PE.

Implications: On account of concentration, we expect July series to expire within a range where the upside is 5,500 and the downside is capped at 5,300.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 196 crore with Gross buyers of Rs 2,078 crore and Gross Sellers of Rs 1,881 crore.

·         DIIs were net sellers of Rs 718 crore with Gross buyers of Rs 742 crore and Gross sellers of Rs 1,461 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 26^th July, 2010 close at 19.97 which is 3.79% higher as compared to previous close, after touching an intraday high of 20.05 and low of 18.62.

Implications: Indian VIX continued its upward journey and closed ~4% higher as compared to Friday’s closing. We expect it to move upwards and are Bullish on the same.

Tax Rates & Deduction

Prakash Steelage Limited IPO Details.

BRLM: Keynote Corporate Services Ltd Syndicate Member: SMC Global Securities Ltd, Keynote Capitals Ltd, Enam Securities Ltd.

Issue Period: August 5 – August 10, 2010.

For QIB: August 5 – August 9, 2010.

Price Band: Rs. 100/- – Rs. 110/-.

Lot Size: 60 Equity Shares and Multiple of 60 thereafter.

Registrar: Bigshare Services Pvt Ltd.

Issue: 62,50,000 Equity Shares of Rs.10/- each, Employee Reservation 1,00,000 after employee reservation 61,50,000 Equity share.

Employees Reservation: 1,00,000 Shares.

QIB Book: 30,75,000 shares (50% of Net issue size)

Retail Book: 21,52,500shares (35% of Net issue size)

HNI Book: 9,22,500 shares (15% of Net issue size).

Thanks,
Minita Aiya. (Client service Associate - DENIP Consultants Pvt. Ltd.)

SKS Micro Finance Limited - IPO Details.

BRLM: Kotak Mahindra Capital Company Limited/Citigroup Global Markets India Limited/ Credit Suisse Securities (India) Private Limited.

Issue Period: July 28– August 02, 2010.

Price Band: Rs.850 - Rs.985.

Lot Size: 7 Equity Shares in to multiples of 7 Equity Shares.

Retail Discount Rs.50/- per Equity Share on allotment.

Registrar: Karvy Computershare Private Limited.

Equity Shares offered through IPO: 1,67,91,579 Equity Shares.

QIB Book: 1,00,74,948 (60% of issue size).

HNI Book: 16,79,157 (10% of issue size).

Retail Book: 50,37,474 (30% of issue size).

Thanks,
DENIP Consultants Pvt. Ltd.

Result's on 26 July. Source: bseindia.com.

Markets Today - 23/07/2010 - Disclaimer Post Applies

We expect Nifty to trade in a range with 5,500 to act as a resistance on the upside on account of call concentration and 5,400 to act as a support for intermediate term on account of more PE concentration than call and 5,300 for worst case scenario. Thus, the range for July series is 5,350 and 5,550.

Option Analysis  

·         Call Writing: During the week, shedding was witnessed in in-the-money strikes. Major writing was seen at 5,500 of ~22 lakh contracts whereas major shedding was seen at 5,400 and 5,300 strikes of ~11 lakh contracts and ~13 lakh contracts respectively. Maximum concentration observed at 5,500 CE of 123 lakh contracts.

·         Put Writing: On the other hand, fresh major writing was witnessed between 5,500 and 5,300 where the total open interest outstanding is ~57 lakh contracts with maximum writing at 5,400. Maximum concentration observed at 5,300 PE of 98 lakh contracts.

Implications: Call shedding across strike prices and strong put writing at 5,400 levels indicates markets maintaining their upward momentum. We expect market to take immediate support at 5,400 and 5,300 for July expiry and resistance at 5,500. We believe market to trade in a narrow range of 5,350-5,500 for July series.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 711 crore with Gross buyers of Rs 3,016 crore and Gross Sellers of Rs 2,305 crore.

·         DIIs were net sellers of Rs 101 crore with Gross buyers of Rs 1,383 crore and Gross sellers of Rs 1,484 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 23^rd July, 2010 close at 19.24 which is 1.8% lower as compared to previous close, after touching an intraday high of 19.72 and low of 17.14.

Implications: After witnessing a fall in past three trading sessions, VIX rebounded on Friday. We expect it to move upwards and are Bullish on the same.

Visited K.J.Somaiya College of Commerce & Arts for Recruitment.

We have visited K.J.Somaiya College of Commerce and Arts today for recruiting graduates for our firm. Had a great time with students. More than 60 students attended the group discussion, out of which we short listed 18 students for Personal Interviews.

In the end we recruited 4 students from the college. Students of K.J.Somaiya College have good potential and I wish them all the best for their future.

Thanks John Sir, Mule Sir, Gaur Sir & Giakwad Sir for your cooperation.


Thanks,
DENIP Consultants Pvt. Ltd.

EU Stress Test - Results Expected

Results of so-called EU stress tests, which will assess how banks would fare if economic conditions worsened and sovereign debt holdings declined in value, are due on 91 banks on July 23 2010 at 6pm[11pm IST].

Many servisors, bankers, ministers, analysts and sources have commented in recent weeks on what they expect the stress tests to show for banks in the sample. Below is a collection of those comments, sorted by country.

FRANCE - PASS EXPECTED

BANKS PARTICIPATING: BNP Paribas ; Societe Generale ; Credit Agricole ; BPCE, parent of Natixis 

OFFICIAL COMMENTS: Bank of France head Christian Noyer said there was "no reason" to believe French banks would fail Europe-wide stress tests as they were regularly tested by the regulator. (Europlace business forum, July 6).

WHAT ANALYSTS SAY: Most expect all banks to pass. Some brokers using a harsher stress test than CEBS have cast doubt on Credit Agricole's capital strength.

GERMANY - 1 FAIL, 13 PASSES EXPECTED

BANKS PARTICIPATING: Deutsche Bank; Commerzbank; Hypo Real Estate HRXGe.DE; Landesbank Baden-Wuerttemberg; Bayerische Landesbank BAYLB.UL; DZ Bank; Norddeutsche Landesbank; Deutsche Postbank ; WestLB WDLG.UL; HSH Nordbank HSH.UL; Landesbank Hessen-Thueringen; Landesbank Berlin ; Dekabank Deutsche Girozentrale; WGZ Bank

COMMENTS: With the exception of nationalised Hypo Real Estate no German bank in the test is expected to fall below the minimum capital threshold required to pass the exercise.

WHAT ANALYSTS SAY: Apart from Hypo Real Estate, some analysts using different stress test assumptions have said Commerzbank would need more capital in their scenario.

GREECE - PASS EXPECTED

BANKS PARTICIPATING: National Bank of Greece ; EFG Eurobank ERGr.AT; Alpha Bank; Piraeus Bank ; Agricultural Bank of Greece ; TT Hellenic Postbank 

OFFICIAL COMMENTS: Greece's central bank chief, George Provopoulos, said he expected the country's lenders participating in the stress test to "smoothly pass" the exercise. (Newspaper interview, July 17)

WHAT ANALYSTS SAY: Citi analysts say NBG would need capital in their own stress test scenario.

IRELAND - 1 PASS, 1 CONDITIONAL PASS EXPECTED

BANKS PARTICIPATING: Bank of Ireland ; Allied Irish Banks 

OFFICIAL COMMENTS: Finance Minister Brian Lenihan and central bank Governor Patrick Honohan both said that the two Irish banks had already passed domestic stress tests that were tougher than the EU test.

ITALY - PASS EXPECTED

BANKS PARTICIPATING: Intesa Sanpaolo , UniCredit , Banca Monte dei Paschi di Siena, UBI Banca, Banco Popolare 

OFFICIAL COMMENTS: Bank of Italy Governor Mario Draghi said last week he was confident stress tests would show individual banks' capital is strong enough and that financial bases are sound.

PORTUGAL - 1-2 FAILS POSSIBLE

BANKS PARTICIPATING: Caixa Geral de Depositos, Millennium bcp , Banco Espirito Santo, Banco BPI .

OFFICIAL COMMENTS: Treasury Secretary Carlos Pina said stress tests showed a solid, well-managed banking system without capital problems and tests results would reinforce investor confidence in Portugal.

WHAT ANALYSTS SAY: Millennium bcp and Banco BPI have failed stress tests by brokers including JPMorgan, Macquarie and Keefe, Bruyette & Woods using different assumptions than CEBS.

SPAIN - SOME CAJAS EXPECTED TO FAIL

BANKS PARTICIPATING: Banco Santander ; BBVA ; Banco Popular Espanol ; Banco de Sabadell ; Bankinter ; Banco Pastor ; Banca March; Banco Guipuzcoano; all unlisted savings banks or "cajas".

OFFICIAL COMMENTS: Spanish Economy Minister Elena Salgado has said the tests will show that every Spanish bank is solvent. The Spanish Confederation of Savings Banks (CECA) said he did not expect nasty surprises, but did not rule out some may have to seek more capital from the Bank of Spain's restructuring fund.

WHAT ANALYSTS SAY: Analysts expect no problems at the big listed banks. They expect capital shortfalls at some cajas to be covered by the Bank of Spain's restructuring fund in a process that started before the stress tests were announced.

AUSTRIA - PASS EXPECTED

BANKS PARTICIPATING: Erste Group Bank; Raiffeisen Zentralbank.

OFFICIAL COMMENTS: Austrian central bank Governor Ewald Nowotny said the Austrian banks' results would be "in a normal range" and that he did not expect the test to show any capital requirements. (Radio interview, July 13)

BELGIUM - PASS EXPECTED

BANKS PARTICIPATING: Dexia , KBC 

COMMENTS: Both have passed the tests, according to business dailies De Tijd and L'Echo (July 17)

WHAT ANALYSTS SAY: Citi analysts say Dexia screens poorly in its own stress test scenario, while KBC would need to raise capital by 2012.

CYPRUS - NO INDICATION

BANKS PARTICIPATING: Bank of Cyprus BOC.CY, Marfin Popular Bank CPBC.CY.

DENMARK - NO INDICATION

BANKS PARTICIPATING: Danske Bank; Jyske Bank; Sydbank .

FINLAND - NO INDICATION

BANK PARTICIPATING: Pohjola Group

HUNGARY - NO INDICATION

BANKS PARTICIPATING: OTP OTPB.BU; FHB Mortgage Bank FHBK.BU

LUXEMBOURG - NO INDICATION

BANKS PARTICIPATING: Banque et Caisse d'Epargne de l'Etat (BCEE), Banque Raiffeisen

MALTA - NO INDICATION

BANK PARTICIPATING: Bank of Valetta

NETHERLANDS - PASS EXPECTED

BANKS PARTICIPATING: ING , SNS Bank , Rabobank RABO.UL, ABN AMRO/Fortis ABNNV.UL FORTH.UL.

OFFICIAL COMMENTS: Dutch Finance Minister de Jager said he was confident about the outcome the stress tests and a test last year showed no banks needed money, except for ABN/Fortis, which later received capital.

POLAND - PASS EXPECTED

BANKS PARTICIPATING: PKO BP PKOB.WA. Other major Polish banks are all owned by other European banks.

OFFICIAL COMMENTS: Polish central bank governor Marek Belka said, "I haven't got the slightest concerns about the result of PKO BP's (test)."

SLOVENIA - PASS EXPECTED

BANKS PARTICIPANTS: Nova Ljubljanska Banka (NLB)

OFFICIAL COMMENTS: While Finance Minister France Krizanic said NLB -- of which the state is the biggest shareholder -- will pass, NLB on Wednesday surprisingly announced plans to raise 400 million euros in equity this year, the first bank to announce a share issue in the run-up to the publication of the stress tests.

SWEDEN - PASS EXPECTED

BANKS PARTICIPATING: Nordea, Handelsbanken , SEB and Swedbank.

OFFICIAL COMMENTS: The chief economist at Sweden's financial watchdog has said that the country's top four banks will come out looking good in the EU stress tests.

UNITED KINGDOM - PASS EXPECTED

BANKS: HSBC Holdings,Barclays,Royal Bank of Scotland and Lloyds Banking Group