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Index
Market View 1
MARKET VIEW
Company Update 2 VALUATION CONCERNS ARE EMERGING AT THIS LEVEL
Around the
Economy 3
On back of continued reforms and liquidity, the Indian market has performed ex-
Knowledge Corner 3 ceptionally well during last six months. The result season has also started with positive
note, but the market has already run up before that. Under the circumstances the over-
Mutual Fund 4
all valuations looks stretched. In fact the market cap to GDP ratio is above the histori-
Commodity Corner 5 cal average of Indian market. Historical average is at 78 while the current market cap
Forex Corner 6 to GDP ratio is around 80. It shows the confidence and good performance of the econ-
omy. But at higher level the institutions are seen booking the profits and waiting for
Report Card 7
right opportunity to enter the market. Some international events warrant cautiousness.
Short Term Call Status 8 The outcome of French election is eagerly awaited.
Kamal Jhaveri
For suggestions, feedback MD- Jhaveri Securities
and queries
jstreet@jhaveritrade.com
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Outlook and valuation : We recommend BUY on the stock on account of petrochemical business showing
improvement due to lower raw material cost. Increased margins by renewal of RasGas contract will be an
added benefit. We target stock to trade at EV/EBITDA of 7.9x in FY17E. ( Target Price: Rs. 452)
Company Overview :
GAIL (India) Ltd is Indias flagship Natural Gas Company, integrating all aspects of the Natural Gas value chain
(including Exploration & Production, Processing, Transmission, Distribution and Marketing) and its related ser-
vices. The company is an integrated energy company along the Natural Gas value chain with global footprints.
They have interest in the business of natural gas, LPG, Liquid Hydrocarbons and Petrochemicals. They have
also diversified into Exploration & Production, City Gas Distribution and are steadily developing their overseas
presence.
Strong presence in city gas distribution business through Subsidiary MGL & IGL.
Govt. Planning of providing gas to all the rural areas in the coming 1-2 years.
Lower prices of domestic natural gas for LPG, LHC business augur well for segments profitability.
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On the global front, the US Federal Reserve on 3 May 2017, left monetary policy unchanged, as expected, and indicated it remains on
track to deliver two more rate increases by year-end. The Caixin China manufacturing purchasing managers' index dropped to 50.3 in
April from 51.2 in March, indicating a slower expansion of activity, Caixin Media Co. and research firm Markit said on 2 May.
The government will announce industrial production data for the month of March 2017 after market hours on Friday, 12 May 2017. The
data on inflation based on consumer price index (CPI) or retail inflation for April 2017 will also be announced after market hours on that
day. Housing & Urban Development Corporation (HUDCO) is coming up with an initial public offer (IPO) of 20.4 crore shares.
Boston Federal Reserve Bank President Eric Rosengren will be the keynote speaker at the Risk Management for Commercial Real Estate
Conference being held at the NYU Stern School of Business in New York, New York on Tuesday, 9 May 2017. Dallas Federal Reserve
Bank President Robert Kaplan to speak at the Dallas Regional Chamber Lower Middle Market Investment Summit in Dallas on the same
day.
Knowledge Corner :
DEBENTURES
Why Debenture ?
Debentures are backed only by the general creditworthiness and reputation of the issuer. A debenture is an un-
secured form of investment. They are a useful to raise money for short period of time.
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Medium
Small
Fund
Nifty Mid cap100
(Rebased to 10,000) Source : - www.valueresearchonline.com
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Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices last week seen under pressure where Gold prices steadied and Silver prices dropped by 3.01% tracking
weakness in base metals and crude oil prices as investors awaited the first-round of voting in the presidential French election at the
weekend and possible announcements about tax changes in US. There was potential for safe-haven buying of gold after France said
security forces were fully mobilized for the weekend vote after an Islamist militant killed a policeman Thursday night. Safe-haven demand
re-emerged after a French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack
claimed by the Islamic State militant group. Investors were also watching events in Washington. President Donald Trump's administra-
tion will unveil a tax reform plan soon and expects it will be approved by Congress this year, Treasury Secretary Steven Mnuchin
said.After reporting a bigger than expected drop in U.S. existing home sales in the previous month, the National Association of Realtors
released a report showing that existing home sales rebounded to their highest level in ten years in March.
RECOMMENDATION : SELL GOLD @ 29500 SL 29850 TGT 29180-28900 SELL SILVER @41500 SL 42200 TGT 40800-40200
BASE METALS
FUNDAMENTAL: Last week, base metals prices remained under pressure except aluminium prices ended with 1.22% gains after news
that Xinjiang Jiarun Resources shut down 200,000 mt of disqualified aluminium capacity. Aluminium Prices seen supported in the week
as supporting prices was the inventory draws from London Metal Exchange warehouses, but a rise in Shanghai stocks on Friday limited
this bullish sentiment. Still, overall LME holdings are sitting at just 1.7 million tons. Inventories in Shanghai, meanwhile, are at their high-
est in about a year. Meanwhile, Chinas total March aluminium production rose to 2.707 million tons from 2.534 million in February. Alu-
minium production typically picks up in pace as spring approaches, tracking the seasonal pick-up in construction demand. While others
dropped where lead and nickel dropped over 3% and others too dropped as worries over political instability and global demand
prompted investors to cut bets on higher prices. Investors have overestimated global growth and the impact of supply disruptions at ma-
jor copper mines.
RECOMMENDATION : BUY ALUMINIUM @ 123 SL 121 TGT 126.5-129 SELL COPPER @ 370 SL 378 TGT 364-356 SELL ZINC @ 170 SL
175 TGT 164.50-168 SELL NICKEL @ 620 SL 635 TGT 605-590
ENERGY
FUNDAMENTAL : Last week, energy prices ended with losses where crude oil prices dropped by 6.20% on renewed concerns that in-
creasing U.S. production and high inventories will thwart OPEC's attempts to reduce the global crude glut. Prices fell as doubts emerged
over the effect of the OPEC/non- OPEC production cut by almost 1.8 million barrels per day (bpd) during the first half of the year. Saudi
Arabia and Kuwait, key members of the Organization of the Petroleum Exporting Countries, favour extending their production-limiting
deal with non-member producers into the second half of the year. Russia's Energy Minister Alexander Novak, however, declined to say
whether the top oil producer would adhere to an extension before a joint meeting on May 25, saying global stocks were declining. "The
situation has gradually been improving since the beginning of March," Novak said. Demand for crude oil is however set to rise in the
coming weeks as refineries around the world return from seasonal maintenance ahead of peak summer demand.
RECOMMENDATION : SELL CRUDE @ 3240 SL 3240 TGT 3180-3100 SELL NAT.GAS @ 208 SL 215 TGT 201-196
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Commodity Corner
Forex Corner
Market Recap :
The USDINR On daily chart pair below all short term, medium term, and long term moving average which is 20,
100 and 200.Whereas on weekly chart pair has continually taking support at 50WMA and daily stochastic nega-
tive diversions Which suggest short term trend is bearish. So for trading perspective, one could sell to the level
64.70-64.50 with SL of 65.00 for target of 64.46-64.35.
USD/INR
Level S2 S1 CP R1 R2 High Low Close
USD/INR 64.16 64.35 64.46 64.65 64.76 64.57 64.27 64.54
EUR/INR
Level S2 S1 CP R1 R2 High Low Close
EUR/INR 69.82 70.32 70.63 71.13 71.44 70.94 70.13 70.82
GBP/INR
Level S2 S1 CP R1 R2 High Low Close
GBP/INR 82.38 82.95 93.27 83.84 84.16 83.60 82.71 83.51
JPY/INR
Level S2 S1 CP R1 R2 High Low Close
JPY/INR 56.73 57.73 57.42 57.79 58.11 57.73 57.04 57.48
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The stock market is filled with individuals who know the price of everything, but the value of nothing. Phillip
Fisher
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TA+PB 15 71.43
SL+EXIT 06 28.57
TOTAL 21 100.00
One call on daily basis is given keeping view of short term trading on closing basis.
Time frame and expected % of return is also mentioned with the suggested call.
This call are purely given on technical trading system generated by the Technical Research Desk.
Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days.
Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the
Expected return of 5-6%
Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)
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