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KARVY BAZAAR BAATEIN A Weekly Investment Newsletter From KARVY A Research Product of Karvy The Finapolis Volume 8 Issue 41 HYDERABAD MARKETS BSE Sensex 27868.63 0.01% 28000 27950 27900 27915.88 27865.83 27850 27868.63 27860.38 27800 31-Oct 52 Wk H/L Mcap 3-Nov : : 5-Nov 7-Nov 28,010.39/19,963.12 Rs 97,23,411.73 cr. 8337.00 0.18% NSE Nifty 8400 8337.00 8350 8300 8338.30 8324.15 8322.20 8250 8200 31-Oct 52 Wk H/L Mcap 3-Nov 5-Nov 7-Nov : 8365.55/5,933.30 : Rs 95,18,564.76 cr. CURRENCY Rupee Movement (INR/US$) Exchange Rate : Rs 61.636 61.800 Rs.5/- A Run Of Hope A nother stellar week for Indian markets as they touched new highs. The BSE Sensex crossed 28,000-mark for the first time while the Nifty also hit a record high above 8,350. The latest bout of bull run in equity markets has come after a brief correction in October, when the Sensex ended below 26,000. The rally is driven by renewed hopes of a sooner-thanexpected rate cut announcement by RBI. With the recent fall in inflation, the clarion call for RBI Governor Raghuram Rajan to cut interest rate to revive the economy is getting louder day by day. But Will Guv Rajan oblige? Let’s wait for Dec 2. Next week is crucial because of IIP data. > Nifty remained subdued in a short trading week, but ended at a new weekly closing high of 8337.00 after clocking a fresh life time high. On Thursday last week, Nifty clocked its new all time high of 8365.55, but retreated from higher levels thereafter. Nifty drifted lower from the all time high of 8365.55 to a weekly low of 8290.65, and shut shop marginally up by 0.18% as it managed to close above the psychological 8300 mark for second week in succession. During the last week, CNX Realty was the top performer among all sectors, thereby gaining as much as 6.18%, followed by CNX Pharma (+3.82%), Bank Nifty (+1.77%), CNX Finance (+1.26%), CNX IT (+1.19%), CNX MNC (+0.65%), CNX FMCG (+0.61%). On the other hand, CNX Consumption (-0.49%), CNX Energy (-1.49%), CNX Auto (-1.56%) ended lower, while CNX Metal lost the most losing as much as 4.14%. In line with what we had said last week, we still feel that Nifty has been forming a strong base around the 8000-8100 mark while it has a cluster of projected resistances around the 85008550 zone. We remain bullish on Private Banks, Pharma and certain IT stocks in the short term. Therefore, for the next week, we expect the index to trade in the range of 8200-8500 and also continue to maintain a positive view on the markets till such time the Nifty clings onto the level of 8100 on a closing basis. KBB weekly recommendations for the week beginning 10th November, 2014 61.450 61.365 61.100 31-Oct 61.405 3-Nov 61.415 5-Nov 7-Nov GOLD MCX Gold (INR/10Gms) Scrip AXIS BANK COLPAL DRREDDY BPCL ZEEL Action Buy Buy Buy Buy Buy 26100 25944 25871 25300 31-Oct 25406 3-Nov Entry 466-469 1770-1780 3390-3397 755-759 370-371 Stop Loss 460 1760 3375 748 360 Target 485-490 1820-1830 3450-3470 775-780 385-390 Time Frame 4-5 Days 4-5 Days 4-5 Days 4-5 Days 4-5 Days KBB weekly performance monitor 25900 25500 CMP 469.05 1780.45 3397.15 759.15 371.90 Disclaimer: The above recommendations are purely based on technical analysis. Hence, the stop loss should be strictly adhered to. Price : Rs 25,457 25700 Pages-7 61.636 61.625 61.275 10 Nov 2014 to 16 Nov 2014 5-Nov 25457 7-Nov Printed & Published by Mubashir Ansari on behalf of Karvy Consultants Limited. Karvy House, 46, Avenue 4, Street 1, Banjar Hills, Hyderabad - 500034. RNI Regn. No.APENG/2007/20423 Scrip SKSMICRO MARUTI ANDHRA BANK ICICI BANK IDFC Total Balance on inception (01- Jan- 14) 5,00,000 Action Buy Buy Buy Buy Buy Entry 325 3335 83 1626 155 Balance last week (31-Oct-14) 5,71,612 SL 310 3300 78 1605 149 Target 345-355 3400-3425 90-92 1670-1680 165-168 Shares(#) 440 43 1722 88 922 Balance current week (7-Nov-14) 5,90,540 P/L Return Remark 13,191.04 9.23% TA -1,499.73 -1.05% SL 5,165.17 3.61% CMP 4,745.85 3.32% TA -2,673.67 -1.87% CMP 18,928.66 Abs. returns Abs. returns since WoW (%) Jan 01, 2014(%) 3.31 18.11 TA - Target achieved; SLT - Stop loss triggered; CMP - Closing price as on last trading day; NI - Not initiated; # No. of Shares; SL - Stop Loss; P/L - Profit/Loss India's leading weekly investment newsletter 1 Finapolis The SECTOR/ COMPANY UPDATE KARVY BAZAAR BAATEIN Weekly Dossier IFGL Refractories Ltd IFGL Refractories Ltd. (IFGL) is a manufacturer of specialised refractories and operating systems for the steel industry. IFGL Specialises in products for continuous casting of steel and offers integrated solutions in the flow control systems. Sales grew from Rs6bn to Rs.7.8bn representing a CAGR growth of 18% during FY11-14. El Ceramics & CUSU were acquired during FY11 causing spike in growth rates. We believe the sales to grow at a CAGR of 14.5% to reach to Rs.10.2bn by FY16E primarily driven by volumes from IFGL Exports. EBIDTA grew from Rs.491mn to Rs.1,219mn, representing a CAGR growth of 35% during FY11-14, while the margins averaged around 12.5% due to volume growth through acquisition of high margin continuous casting products business in the US on one hand and broad based slow down across steel industry. We believe the EBIDTA to reach Rs.1485mn, representing a CAGR growth of 10.4% and margins to sustain over 14% during FY14-16E. At CMP of Rs.199, IFGL trades at 7.7x FY16E earnings per share, which appears to be attractive given the expectations over higher profitability and strong return ratios in the next two years. The capacity expansion program at Kandla and Ohio for continuous casting products could yield higher profits and large cash flows. We recommend a ‘BUY’ for a target price of Rs.260, implying 10.2x FY16E EPS which is 21.5% discount to FY16E Industry average P/E of 13x. On EV/EBIDTA basis IFGL has traded around a mean of 6.4x over five year period and the stock is currently trading at 4.3xFY15 EV/EBIDTA. Mahindra & Mahindra M&M’s Q2FY15 performance was below expected on account of higher sales expenses amid increasing cost of customer acquisition. Company’s performance was impacted by subdued volumes in auto as well as FES segment. Company’s volume declined 0.3%YoY/5.5%QoQ due to fall in auto volumes, while revenues (M&M+MVML) grew 5.6%YoY/ down 7.4% Q/Q. Its EBIDTA declined 6.6%YoY/22.5%QoQ in Q2FY15. EBIDTA margins contracted by 156 bps Y/Y and 233 bps Q/Q to 12%, as against our est of 13.6%. Key factor behind margin contraction is higher discounts in auto as well as tractor segment and continued losses at MTBL Its ASP improved by 6% Y/Y. Its EBIT margin fell 150 bps Y/Y to 7.9% and 160 bps Y/Y to 15.4% in auto segment and FES segment respectively in Q2FY15. Company’s adj. PAT rose 2%YoY/9% Q/Q to Rs. 9.7 bn, primarily due to higher non operating income (up 36% Y/Y). On standalone basis, M&M’s revenue rose 7%YoY to Rs. 95.4bn, while its adj. PAT declined 4.3%YoY to Rs. 9.5bn. New Your Personal Finance Advisor Models, New Platforms to Aid UV Sales in FY16E: M&M is in the process of developing three new platforms over next one year. Moreover, with improving economic prospects, we see strong rural economy, and expect recovery in UVs space from FY16E onwards. We also expect reduction in losses from MTBL business going forward. We broadly maintain our volume estimates, while lower our revenue estimates by 2-5% for FY15/FY16/FY17 to factor in higher discounts and product mix. Accordingly, we cut our EPS estimate by 2%/3% for FY15/FY16, while raising FY17E EPS by 3 .8% amid higher non operating income. We maintain our SOTP based target price on M&M at Rs1,450 per share, valuing its M&M+MVML at 7x FY17E EBIDTA to Rs 1,052 and we value subsidiary at Rs. 398, post-30% discount to M-cap. We reiterate our “BUY” recommendation on M&M. We expect near term pressure on stock price due to challenging environment and intensifying competition in both the segments. Bank of India Bank of India reported PAT of Rs7.9bn (+17.5% Y/Y) primarily due to strong growth in NII along with moderation in provision & contingencies expenses. Domestic NIM’s during the quarter inched up by 28bps to 2.73% led by higher upgrades and recovery in 1HFY15. Loan book grew by 18.4% Y/Y and 4.6% Q/Q to Rs3,931bn. Hence NII for the quarter also stood higher by 20% Y/Y tracking the gain in margins and growth in advances. Fresh slippages declined to Rs29.7bn (slippages ratio of 3.16%) v/s Rs37.8bn (slippages ratio of 4.08%) in 1QFY15 and Rs36.1bn (slippages ratio of 4.10%) in 4QFY14. Fresh restructuring also declined to Rs 13.6bn v/s Rs16.3bn in 1QFY15 and Rs23.9bn in 4QFY14. Asset quality concern will linger: Key concern for the bank continued to be its asset quality given its higher exposure to stressed sectors. Mid-corporate and the SME segment constituted the major portion of the fresh NPL’s accrued during the quarter. Management stated that fresh NPL accretion and restructured loan will decline gradually in 2H FY15. Business growth remained healthy: Advances and deposits stood at Rs3,931bn (+18.4% Y/Y, +4.6% Q/Q) and Rs5,184bn (+19.9% Y/Y, +3.5% Q/Q). Advances growth was led by the agriculture (+23.7% Y/Y and +9.2% Q/Q ), MSME (+22.4% Y/Y and +6.9% Q/Q) and overseas (+25.7% Y/Y and +9.2% Q/Q). At the CMP, the stock is trading at 0.78x FY15E and 0.68x FY16E P/Adj. BV. In spite of the recent rally in the stock price, we expect the improving fundamentals to reflect in the stock price. Return ratio of the bank are broadly similar to most of its public sector peers, however it trades much cheaper. Given the improvement expected in asset quality we recommend “BUY” with a TP of Rs358 (0.85x to FY16E Adj. BV). Please read the Disclaimer carefully on Page 7 India's leading weekly investment newsletter 2 Finapolis The FUNDAMENTALS KARVY BAZAAR BAATEIN Fundamental picks Mangalam Cement: Q2FY15 Result Review Mangalam Cement continued to deliver strong results as volume growth accelerated led by ramp-up of its recent expansion by 60%. Its 2QFY15 Net Sales/ EBITDA/ PAT surged 62%/ 223%/ 80% Y/Y (albeit at slower pace vs our est of 57%, 294%/ 180% Y/Y growth). Its 1HFY15 Sales/ EBITDA/ PAT rose 48%/ 85%/ -2% Y/Y. EBITDA per MT expanded by Rs217 and Rs155 Y/Y during 2QFY15 and 1HFY15 respectively to Rs391 and Rs536 per MT. 2QFY15/1HFY15 profitability boosted by strong volume and price growth: Mangalam’s sales volume accelerated to 44% (ahead of our est of 37%) and 31% Y/Y during 2QFY15 and 1HFY15. This was driven by ramp-up at recent capacity expansion by 1.25mn MT in 2HFY14. While cement NSR cooled 5% Q/Q (our est -6% Q/Q) led by moderation in demand during the monsoon quarter, NSR rose 13% Y/Y on low base. These boosted EBITDA/ PAT growth of 232%/ 46% Y/Y during 2QFY15. Operational cost efficiency from the modernization and new plant got slightly delayed due to coal supply disruptions leading to 4% Q/Q rise in input costs. We expect cost efficiency to be visible during 2HFY15 as production stabilizes from the new expansion. Strong profit outlook – EBITDA/PAT CAGRs of 79%/ 91%: We expect Mangalam Cement to deliver 20% sales volume CAGR during FY14-17E period driven by its 63% capacity expansion and plant up-gradation. Further, cost efficiency should emanate from (1) increase in blended cement proportion, (2) reduction in high grade limestone consumption, (3) increased focus on serving low lead distance markets and (4) softening crude and coal costs. With cement demand firming up, we estimate the company’s cement NSR to increase by 17% Y/Y in FY15E and at 6.5% CAGR thereafter. These should lead to 79% EBITDA and 91% PAT CAGR. With no major capex in near term, Mangalam’s strong cash flow generation should help reduce its net debt: equity to 0.2x in FY17E vs 0.6x in FY14. We have increased our EBITDA estimates by 2-5% each as we factor in 5-10% higher volume growth. We have also increased cost per MT estimate by 0.5% each. Re-iterate “BUY”: We expect the stock’s re-rating to maintain driven by continuation of stellar results in subsequent quarters. We re-iterate our “BUY” recommendation on the stock with a TP of Rs465 (earlier Rs365) valuing it at 3.5x its FY17E EBITDA (earlier 3x) implying EV USD 60 per MT. Cadila Healthcare: Q2FY15 Result Review Cadila’s revenues grew by 21.5% Y/Y to Rs 20.6bn during the quarter on the back of strong performance in US region. Operating margins improved to 20% compared to 15% in Q2FY14, higher than our estimates of 18.5%. Net Profit at Rs 2,782mn grew by 51.7% Y/Y in Q2FY14 due to lower personnel cost and savings in overheads. Revenue Details: Domestic formulations grew at 8.7% Y/Y to Rs 6.81bn in line with our estimates of Rs 6.86bn. US biz grew at 69.6% Y/Y to Rs 8.02bn higher than our estimates of Rs 6.80bn and Brazil de-grew 1.1% Y/Y to Rs 647mn due to lack of approvals. Europe business showed de-growth of 17.5% Y/Y at Rs 777mn. Consumer Healthcare increased by 6% Y/Y to Rs 1,101mn lower than our estimates of Rs1,200mn. Your Personal Finance Advisor EBITDA Margins: The Company's EBITDA margin stood at 20% (higher than our estimates of 18.5%) in Q2FY15 due to lower personnel cost and savings in overheads. Outlook & Valuation: We downgrade our revenues by 1.5%/2.5%/ 3.2% for FY15E/16E/17E due to downgrade in some of the markets. We upgrade our EBDITAM by 150bps for FY15E/16E/17E due to lower personnel cost and savings in overheads. Despite higher depreciation and tax we upgrade our EPS by 7.8%/1.4% for FY15E/ FY16E while we maintain our FY17E estimates. Due to better operational performance we upgrade our price target by 2.9% to Rs 1519 based on 19.5x average EPS of FY16/17E. We continue to maintain our ‘HOLD’ rating on the stock. IRB Infrastructure: Q2FY15 Financial Performance IRB Infrastructure Developers Ltd.’s (IRB) 2QFY15 consolidated revenue declined 6% Y/Y to Rs8.8 bn (15% below the expectations), due to 32.3% Y/Y dip in construction revenue to Rs4.5 bn. However, 58.2% Y/Y growth in net toll revenue to Rs4.3 bn restricted the overall fall. Despite fall in revenue, EBITDA margin improved sharply by 1,430bps to 59.2% driven by higher EBITDA margin clocked by the BoT segment (88.9% v/s 85.9%) coupled with higher contribution (73.5% v/s 55.6%) in total EBITDA. This resulted into improvement in PAT margin to 13.4% (11.0% in 2QFY14), which was restricted by higher depreciation (up 45.0% Y/Y to Rs1.8 bn) and interest cost (up 28.7% Y/Y to Rs2.3 bn). The BoT segment accounted for 67.5% of net profit v/s 17.4% in 2QFY14. We currently do not have a rating on IRB. Order book update: Order book stands at Rs115.9 bn (EPC 83.3% of order book, O&M 16.7%). The current EPC book-to-bill ratio is ~3.8x FY14 EPC revenues. Equity requirement of Rs34 bn over next 4 years: IRB needs Rs34 bn as equity to fund its road BoT projects including the newly awarded four projects (Solapur-Yadeshi, Yadeshi-Aurangabad, Kaithal-Rajasthan Border and extension of MumbaiPune) over next 4 years. The management is confident to fund the same from internal accruals as the company has Rs12.9 bn cash as on 2QFY15 combined with strong operating cash flow (Rs16.6 bn in FY14 and Rs14.5 bn in FY13). Business updates: IRB has achieved financial closure for its Solapur-Yadeshi project (total cost Rs14.9 bn) with Rs9 bn debt at 11.75% interest rate. The company expects to achieve financial closure for its Yadeshi-Aurangabad (total cost Rs32 bn) and Kaithal-Rajasthan Border (total cost Rs23 bn) by end of December 2014. We like IRB’s business model, 16 operating road BoT projects: IRB has sound business model with strong road BoT portfolio including 16 operational projects. The company is expected to witness growth in EPC revenue from FY16 as execution on three newly won projects to start from 1QFY16. Moreover, toll revenue also are expected to grow supported by overall improvement in macro economy which would drive traffic growth combined with in built toll hike for projects. Furthermore, the company has healthy margins, operating cash flows, comfortable debt equity ratio. Thus, we are structurally positive on IRB owing to these factors. We currently do not have a rating on the stock. Please read the Disclaimer carefully on Page 7 India's leading weekly investment newsletter 3 Finapolis The KARVY BAZAAR BAATEIN DERIVATIVES Nifty Futures Snapshot Nifty traded in a small range (8290.258365.55) because of a truncated trading week. After two consecutive strong weeks, some consolidation was observed in the benchmark Index which closed with mi- From the options data point of view, Option writers have covered their short positions in 8100-8200 strikes. In current scenario, 8300 then 8200 levels may act During the week, almost all the sectors have seen closure of positions barring the capital goods counters. The highest OI closures were seen in Software sector followed by Realty and Metal sectors which saw closures of 9-10% on the weekly basis. Snapshot nor gains of around 0.24 from the last week. Nifty open interest in near future increased by 23 lakh shares which means bulls are still intact in the market. We expect Nifty to continue its momentum towards the higher levels of 8400-8450 in the coming week. as a support on the downside which has Nifty Options Snapshot Sector Your Personal Finance Advisor maximum call writing while 8400 put option has maximum put writing which may act as an immediate resistance on the upside. Pharma, Utilities and FMCG sectors witnessed closures of around 4-6%. Other sectors which witnessed closure of open interest were Energy, BFSI, Cement, Consumer Durables (CD), Auto & Infrastructure sectors. On the other hand, Capital Goods sector witnessed an increase in open interest of around 0.57%. Nifty Nov Future has open interest of 2.31 crore shares, which increased 23.1 lakh shares in OI during the last week while Nov 8200 PE has open interest of 47 lakh shares. Heavy call writing was observed in 8200 CE which may act as a resistance for Nifty. We suggest building a Protective Put in Nifty. Protective put in Nifty Buy one lot of Nifty Fut @ 8378-8380 and Buy one lot of 8200PE@ 28-29. Max Profit 3350 and Max Loss 1625. TF 5-6 days Jargon Buster- Where We decode complex technicalspeak Fundamental Technical Derivatives LOANS TRIANGLES PAY-OFF OF FUTURES When a business firm gives any loan to its employees or to its sister concerns or to its directors then this loan is shown in asset side of the balance sheet because it is recoverable in future as per the terms of conditions of loans given. Normally, a company other than finance company should avoid of giving the loans. Triangles are commonly found in the price charts of financially traded assets (stocks, bonds, futures, etc.). The pattern derives its name from the fact that it is characterized by a contraction in price range and converging trend lines, thus giving it a triangular shape. Triangle Patterns can be broken down into three categories: the ascending triangle, the descending triangle, and the symmetrical triangle. While the shape of the triangle is significant, of more importance is the direction that the market moves when it breaks out of the triangle. The Pay-off of a futures contract on maturity depends on the spot price of the underlying asset at the time of maturity and the price at which the contract was initially traded. There are two positions that could be taken in a futures contract: a. Long position: one who buys the asset at the futures price (F) takes the long position, and b. Short position: one who sells the asset at the futures price (F) takes the short position In general, the pay-off for a long position in a futures contract on one unit of an asset is: Long Pay-off = ST Ð F Where F is the traded futures price and ST is the spot price of the asset at expiry of the contract (that is, closing price on the expiry date). This is because the holder of the contract is obligated to buy the asset worth ST for F. Similarly, the pay-off from a short position in a futures contract on one unit of asset is: Short Pay-off = F Ð ST Lastly, while triangles can sometimes be reversal patternsÐmeaning a reversal of the prior trendÐthey are normally seen as continuation patterns (meaning a continuation of the prior trend). Please read the Disclaimer carefully on Page 7 India's leading weekly investment newsletter 4 Finapolis The KARVY BAZAAR BAATEIN MUTUAL FUNDS Your Personal Finance Advisor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` 1$9:HHN/RZ^1RY`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ource: ACEMF Please read the Disclaimer carefully on Page 7 India's leading weekly investment newsletter 5 Finapolis The KARVY BAZAAR BAATEIN STOCK TECHNICALS BHARTIARTL Stocks BHARTIARTL remained laggard during current bull market rally. The stock has gained around 8% only while Nifty has gained over 33% in last one year. In Aug’14 stock price witnessed monthly breakout from its long term falling trend line, indicating going ahead we’ll see stock participation in ongoing rally. The stock is trading in the range of 378 to 420 over last two months, and in the last session only it tested the lower level and bounced back from there. Going forward we expect the stock to test its upper end of the range near 420 levels in coming weeks and eventually move beyond it. Therefore, we recommend going long in the counter for immediate targets of 415420 levels in the coming weeks. BHARTIARTL ACC Nifty Top-5 (Weekly) 376 415 1508.75 Buy 1508-1510 1481 1565 Company 07-Nov going long in the counter for initial target of 1565 levels in the coming weeks. Points of observation The stock has been trading in a rectangle channel pattern over last five months and is moving towards its previous high of 1565 levels, breaking and sustaining beyond the range stock can move towards newer highs. Currently stock is holding well above its major 200-DEMA which is well respected during recent correction, and also holds above its medium to short term moving averages. On a daily chart Parabolic SAR is trading below the price, suggesting buying will remain intact in the stock and among the daily oscillators, the 14day RSI is trading comfortably above the 9-day EMA signal line and also, MACD is trading in the positive territory above the 9-day EMA signal line, reaffirming our bullish view on the counter. J.K. Jain FII vs MF: Weekly net purchases FII (Rs Cr) 31-Oct % Change Unitech 22.55 20.50 10.00 GAIL India 485.05 528.80 -8.27 Suzlon Energy 14.65 13.45 8.92 ABB India 1085.55 1168.75 -7.12 DLF 134.50 124.75 7.82 Coal India 344.55 370.55 -7.02 Axis Bank 469.05 439.40 6.75 Hero MotoCorp 2887.60 3064.25 -5.76 33.05 31.15 6.10 M&M 1239.10 1306.20 -5.14 Jp Associates Targets 389-390 Nifty Bottom-5 (Weekly) 31-Oct % Change Stop Loss Buy ACC has gained over 10% in last one month while Nifty gained only around 6% over the same period, indicating its outperformance over Nifty. The stock is in a rising trend from last one year, from the lows of 970 stock rise towards 1564 levels made in the beginning of Sept’14, post which it witnessed round of profit booking/correction towards 1355 levels, wherein from stock rebounded in last month, and we expect the stock to continue its momentum over next few weeks also. Therefore, we recommend The stock is moving within a rising channel on a weekly chart, recently found support from its lower channel. Also, stock has respected its 100 Days EMA in current correction. Entry 390.85 ACC The stock witnessed breakout from its long term falling trend line on a monthly chart, and now retraced back, which has validated the breakout significance, reaffirming underlying strength in prices. 07-Nov Action On a weekly chart Parabolic SAR is trading below the price, suggesting buying will remain intact with the counter in the near term. The stock is bouncing from its lower Bollinger band, indicating support area and on sustaining above the level price can rise towards upper band. MACD (12/26/9) has given bullish crossover in negative territory and now managed to move above trigger line, indicating intact uptrend. Points of observation Company CMP Your Personal Finance Advisor 1569.1 MF (Rs Cr) 3365.5 2328.5 1956.7 255.1 797.0 -629.4 1396.1 FII (Rs Cr) -2968.6 10-Oct 17-Oct 24-Oct 31-Oct MF (Rs Cr) 7-Nov Source: SEBI.gov.in Subscribe to Karvy Publications Yes, I wish to subscribe to Karvy Publications. 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India's leading weekly investment newsletter 6 Finapolis The KARVY BAZAAR BAATEIN KEY DATA Domestic indices: Weekly performance Global indices: Weekly performance Close (Nov 07) Close (Oct 31) Weekly (%) 6M (%) 12M (%) Sensex 27868.63 27865.83 0.01 23.81 33.38 19.31 GLOBAL INDICES 0.18 24.15 34.14 18.72 MSCI World Index 8337.00 8322.20 P/E Ratio Indices Indices Nifty BSE 500 10650.66 10594.89 0.53 27.21 39.47 20.00 MSCI Asia Pacific Ex Japan BSE Auto 18338.67 18579.07 -1.29 37.27 50.22 16.94 ASIA BSE Bankex 19854.42 19505.16 1.79 33.88 54.01 17.14 Hang Seng BSE Capital Goods 15945.21 15924.51 0.13 31.46 74.20 36.20 BSE Consumer Durables 9746.42 9875.10 -1.30 43.46 60.16 35.54 BSE FMCG 7530.68 7497.07 0.45 10.39 14.52 46.35 BSE Healthcare 14884.58 14354.01 3.70 37.92 54.41 27.95 BSE IT 10820.55 10701.99 1.11 24.13 27.87 20.29 BSE Oil & Gas 11053.57 11160.18 -0.96 12.74 25.33 BSE Metal 11334.93 11849.95 -4.35 13.74 BSE Realty 1642.36 1553.42 5.73 18.25 BSE PSU 8281.33 8343.37 -0.74 26.37 40.50 2134.13 2166.41 -1.49 27.97 6000.54 5937.65 1.06 23.92 BSE Power BSE Teck Your Personal Finance Advisor Singapore Straits Times (STI) S. Korea Nikkei 225 Close (Nov 07) Close (Oct 31) Weekly (%) 1707.53 1708.09 -0.03 1.39 7.50 17.52 477.01 485.68 -1.79 0.89 0.49 12.70 23550.24 23998.06 3286.39 6M (%) 12M (%) P/E Ratio -1.87 8.30 2.92 10.19 3274.25 0.37 1.54 2.63 13.38 0.00 1939.87 1964.43 -1.25 -3.20 111.22 16880.38 16413.76 2.84 20.29 18.64 20.64 15.76 AMERICA Dow Jones 17554.47 17390.52 0.94 6.27 S&P 500 2031.21 2018.05 0.65 8.15 16.26 17.99 12.02 NASDAQ 4638.47 4630.74 0.17 14.03 20.25 61.33 22.85 13.82 Brazil Bovespa 20.53 17.87 EUROPE 11.51 FTSE-100 30.44 19.24 DAX 30 9351.38 9326.87 0.26 24.94 18.38 CAC 40 4205.26 4233.09 -0.66 52637.06 54628.60 6586.33 6546.47 -3.65 12.57 -2.62 -0.20 0.61 -3.09 17.02 -1.66 16.77 -1.78 2.98 16.84 -5.42 -1.77 25.73 Note: The closing for the US and Europe is as of 6th November Dow Jones movement 10-Year Bond Yield (%) 17475 9.130 17050 8.935 16625 8.740 16200 8.545 15775 8.350 15350 Nov/13 Feb/14 May/14 Aug/14 Nov/14 Brent Crude (US$/bbl) 8.155 Nov/13 22.00 107.5 20.60 101.0 19.20 94.5 17.80 88.0 16.40 Feb/14 May/14 Aug/14 Nov/14 Feb/14 May/14 Aug/14 Nov/14 Silver (US$/OZ) 114.0 81.5 Nov/13 Feb/14 May/14 Aug/14 Nov/14 15.00 Nov/13 Disclaimer : The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Stock Broking Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Stock Broking nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities. India's leading weekly investment newsletter 7