MARKET PREDICTION

GLOBAL MARKET IS MIXED ...
NIFTY WILL OPEN IN NEGATIVE NOTE CLEARING IS APPROCHING FAST FOR THAT REASON WE CAN ASSUME SHORT COVERING IN BANKING AND CONSTRUCTION OIL&GAS ACTUALLY ACROSS THE BOARD WE CAN ASSUME SHORT COVERING.

NIFTY LEVEL IS 4250-4300-4350-4450 IF MARKET HOLDs 4300 GO LONG OR FROM 4230 LEVEL GO LONG WITH SL OF 4200 AND IF MARKET COULD NOT HOLD 4350 AND ABOVE GO SHORT WITH SL OF 4400.

TOTAL MARKET OI IS 79 K CR AND 56 K CR IN JUNE SERIES AND 22 K CR IN JULY.
PUT CALL RATIO IS 1.19% DUE TO CLOSER OF PUT AND ACCUMULATION IN CALL OPTION.
ROLLOVER IS 25-30 % FOUND YET.
MARKET WILL BE VOLATILE DUE TO FED MEETING TONIGHT.

HAVE A NICE TRADING DAY...........

-MR SAM

ONGC to exit Kakinada refinery, GMR to take over

Infrastructure company GMR will replace Oil and Natural Gas Corporation (ONGC), the country's largest oil and gas producer, in the proposed Rs 31,000 crore refinery and petrochemical plant at Kakinada in Andhra Pradesh, after the oil company found the project to be non-profitable venture.

ONGC had also asked the Andhra Pradesh government for tax incentives of Rs 16,000 crore over eight years to make the project viable. The state government, however, declined.
ONGC, which signed an agreement with the Andhra Pradesh government in September 2006 to set up the refinery, says that the project would have been a non-profitable one. "It is a non-profitable business and that is why we have kept out of it," said a top ONGC official who did not want to be named.
A GMR spokesperson in Bangalore said the company had not yet received any official communication from ONGC. Neither he, nor ONGC, disclosed how much GMR would pay to ONGC.
The originally planned 7.5 million tonne per annum (mtpa) refinery was replanned with a capacity of 15 mtpa after the smaller refinery was found to be financially unviable. "Even the larger refinery was unviable. Refineries are not our business. We will continue to concentrate on exploration and production," said the ONGC official.
ONGC, which had 46 per cent stake present in the refinery and petrochemical project through its subsidiary Mangalore Refinery and Petrochemicals (MRPL), had asked the Andhra Pradesh state government for fiscal benefits worth Rs 16,000 crore over eight years. "The state government was not willing to give us that incentive, and we were not willing to go ahead without the incentive. So they wanted us out and we obliged," the ONGC official said.
The Andhra Pradesh government was keen that the refinery be set up. Chief Minister YS Rajasekhar Reddy had urged Prime Minister Manmohan Singh and Petroleum Minister Murli Deora to convince ONGC to execute the project after ONGC found the refinery unviable after many studies were conducted.
The refinery and petrochemical is being implemented by Kakinada Refinery and Petrochemicals (KRPL), in which MRPL had 46 per cent stake, IL&FS 51 per cent stake and the Andhra Pradesh government 3 per cent stake through Kakinada Seaports.
KRPL's shareholding will now be restructured with GMR controlling 51 per cent stakle, IL&FS and the Kainada Seaports holding 46 per cent and the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) the remaining 3 per cent stake.
Even though ONGC had found the refinery unviable, various companies such as the Hinduja group, Reliance Industries and Essar Oil had shown interest in the refinery and petrochemical project. The project was initially conceptualised by then ONGC chairman and managing director Subir Raha, who is currently employed by the Hindujas. "The refinery is very feasible as its products can be exported to the east Asian countries. Kakinada also has a port which will facilitate import of crude oil and export of petroleum products," said a Delhi-based analyst who advises oil companies.
The refinery is being planned in a special economic zone land for which has already been acquired. The refinery will also be part of a Petroleum, Chemical and Petrochemical Investment Region (PCPIR) which runs from Vishakapatnam to Kakinada, a distance of around over 150 kms.

Oil Prices Rise After Saudi Meeting

A hastily convened global energy summit meeting led by Saudi Arabia ended largely in disagreement on Sunday, with only a modest pledge of increased production by the Saudis and no resolution on what other practical steps should be taken to ease the crisis over soaring oil prices.
On Monday, the global oil market shrugged off the news, pushing up prices. Oil was up $1.57, to $136.93 a barrel, in New York at noon.
The Saudis, who considered the meeting a success because of the high attendance, announced a production increase of 200,000 barrels a day and an expansion of their output capacity if needed in coming years.
But news of the immediate production increase had already been absorbed by the world market for oil. Some experts had anticipated that the Saudis might announce a bigger increase.
Saudi Arabia, the biggest oil exporter, is the only country with the ability to significantly increase production quickly.
Rather than finding areas of agreement, participants in the one-day meeting in this coastal city on the Red Sea illustrated the sharply diverging views on what has caused oil prices to double in the last year to the $130- to $140-a-barrel range.
Consumer nations, led by the Britain, Japan and United States, see more supply as the answer to higher prices. But most producing nations are either reluctant to or unable to pump more oil, and they say a big reason for the price inflation is speculation. Everyone agreed that surging demand in the developing world was a major factor.
That point was punctuated last Thursday when China, the world’s fastest-growing consumer of oil, announced it was sharply raising the subsidized prices that its own citizens pay. The price of oil temporarily dropped more than 3 percent on that news alone because of expectations that demand from China would slow.
But the overall demand for oil by China, India and other rapidly developing nations, including many in the Middle East, is still expected to grow relentlessly, putting enormous pressure on producers to keep pace.
If anything, the Saudi summit meeting made plain the limited options available to push prices down.
For King Abdullah of Saudi Arabia, who called for the meeting just two weeks ago, it was an opportunity to show that his oil-rich kingdom was aware of growing anger and frustration caused by surging prices in oil-importing countries. It also reflected some alarm by the Saudis that the price inflation was causing consumer nations to look far more seriously at energy alternatives, which eventually could hurt the price of oil.
The crisis is also becoming a central issue in the American presidential race, where arguments over who is to blame for high oil prices echoed some of what was heard at the Saudi summit meeting.
President Bush has supported calls by Senator John McCain, the presumptive Republican presidential nominee, to allow for more drilling off the coast of the United States. Senator Barack Obama, the presumptive Democratic nominee, opposes more offshore drilling and has called for a crackdown on market speculators, whom he blamed for pushing up prices.
The question of whether speculators are influencing prices is expected to get closer scrutiny this week in Washington, where a Senate committee led by Senator Joseph I. Lieberman, the Connecticut independent and former Democrat who supports Mr. McCain, will hold hearings on the price swings in the crude oil market.
The oil summit meeting here was attended by energy ministers from 35 nations, who convened in a vast ballroom and listened as King Abdullah said he understood the pain that $140 oil was causing.
But King Abdullah and Prime Minister Gordon Brown of Britain, who walked into the high-ceilinged hall together as a military band played, soon offered totally different perspectives on the problem.
The king spoke of the “selfish interests“ of speculators as a primary reason and urged the gathered ministers to “rule out biased rumors“ and to “reach the real causes for the increase in price.“
But Mr. Brown pointed to fundamental economics and “oil demand rising faster than supply.“ The American energy secretary, Samuel W. Bodman, put it more bluntly in a meeting with reporters, saying, “There is no evidence we can find that speculators are driving futures prices.“
Both sides spoke about the need for compromise, with Mr. Brown calling for a “global new deal“ that would allow a “greater commonality of interest“ between consumers and producers, including greater freedom to invest in one another’s markets.
But asked how all this would help remedy the worst oil crisis in decades, some ministers seemed baffled and uneasy.

“Let me ask you,“ said India’s petroleum minister, Murli Deora, when a group of reporters asked him for his views, “what else can we do to bring harmony between buyers and sellers?“
Despite the urgency that brought hundreds of participants here, Jeroen van der Veer, the chief executive of Royal Dutch Shell, summarized the difficulties faced by oil producers in dealing with record prices: “There are no overnight solutions.“
King Abdullah also called for OPEC, the oil cartel, to pledge $1 billion to help developing nations deal with the effects of soaring energy costs, to which the Saudis would contribute an undetermined share. He also offered an additional $500 million in loans from Saudi Arabia.
Beyond that, participants called for both more transparency and more regulation in energy markets, more investments in both production and refining capacity, and more cooperation between producers and consumers.
While it is reaping record profits, Saudi Arabia is growing increasingly concerned that current oil prices might eventually dampen economic growth around the world and lead to lower oil demand, as is already happening in the United States and other developed countries. The current prices could make alternative fuels much more viable and threaten the long-term prospects of the oil-based economy.
Japan’s minister for economy, trade and industry, Akira Amari, made some sharply worded comments on that subject, warning that steep increases in the price of oil were already leading to greater energy efficiency and to the introduction of alternative fuels. He called these “natural self-defense measures“ that would “inevitably reduce the revenues of oil producing countries in the medium- to long-term.“
To ease fears over the supply of oil, a crucial factor behind the rally in prices, Saudi officials said the kingdom would be able to increase production capacity in the coming years. The Saudi oil minister, Ali al-Naimi, said that Saudi Arabia would be capable of adding an additional 2.5 million barrels a day to its output beyond the current expansion plans the kingdom is completing.
Saudi Arabia is increasing its production capacity to 12.5 million barrels a day in a $90 billion expansion plan that is scheduled for completion next year. Beyond that, Mr. Naimi said, oil experts in the kingdom had identified additional opportunities to expand production, if needed, to 15 million barrels a day in future years.
Mr. Naimi said this additional capacity would be used only “if and when crude oil demand levels warrant their development.“ He used the same language in saying the kingdom could add even more than the new 200,000-barrels-a-day increase in the short term.
The Saudis have already said they believe current demand is being met, despite the high prices — suggesting that high prices alone might not be enough to warrant the increase in supply.
Saudi Arabia has already increased its daily production by 300,000 barrels, or about 3 percent, to 9.45 million barrels. But that has had little impact.
“There is a very clear difference of opinion on key issues underpinning the high price of oil,“ said Raad Alkadiri, an energy analyst at PFC Energy, a consulting firm, who was present in Jidda. “It’s not clear that anything you heard today is going to reverse sentiment. One thing is clear: You are not going to wake up tomorrow and find that oil prices have dropped 20 or 30 dollars.“
Strike Against Chevron in Nigeria
LAGOS (Reuters) — Nigeria’s senior oil workers’ union began strike action at the energy giant Chevron on Monday but said it had not yet shut down any production, pending further talks with the government.
“A limited form of protest has started but we have not yet gone deep,” Lumumba Okugbawa, deputy secretary general of the union, told Reuters. “We have not shut down the oilfields, but administrative functions are affected.”
He said union representatives will travel to the Nigerian capital Abuja for talks with the federal government about the dispute, after negotiations with Chevron management reached deadlock.
Chevron confirmed that union members had declared a work stoppage but said it was “continuing to engage all the stakeholders” through dialogue.
“It is still too early to comment on any potential impact of the declared work stoppage on our operations,” Chevron spokeswoman Margaret Cooper said.
Chevron’s output from Nigeria is around 350,000 barrels a day, of which its equity share is around 129,000 barrels a day. A strike could further cut Nigeria’s production, already driven down by militant attacks on oil operations.
The oil minister,Odein Ajumogobia, said on Sunday that Nigeria was producing around 1.8 million barrels a day before the most recent attacks, less than two-thirds of its output capacity.

Malvinder to pump money into Religare, Fortis

Flush with funds, almost to the tune of Rs 10,000 crore after selling family stake in Ranbaxy Laboratories to Japan's Daiichi Sankyo, Malvinder Singh plans to pump in money to Religare and Fortis to make them top firms in respective sectors, besides planning to list diagnostics subsidiary 'SRL Ranbaxy'.

"Healthcare and financial services are two areas where we have existing businesses, where we will make investments," Ranbaxy CEO and Managing Director Malvinder Singh said when asked how he planned to utilise proceeds of stake sale.

Earlier this month, Ranbaxy promoters had entered into an agreement with Daiichi Sankyo to sell off their 34.82 per cent stake in the pharmaceutical major, valued at around Rs 10,000 crore.

"I think for the next many years, our focus is clear to remain in healthcare and to make it number one healthcare firm in India," Singh said.

Elaborating on future plans for Fortis, Singh said, "In the next step, we would be looking at taking it to international level and have strong presence in Asia and then take it to other markets. That will happen in a phase manner."

Dispelling speculations of stake sale in Fortis Healthcare and link-up with Anil Ambani group, he said: "I am not talking to them and I welcome competition but there is absolutely no discussion at any place and I am not talking to anyone about this."

As for Religare, he said, "In terms of the financial services, we certainly want Religare to be in the financial services what Ranbaxy is in pharmaceutical sector."

Singh, however declined to divulge details of investments in the two firms.

"Till now, we haven't discussed it to decide what will go where," he said.

Asked if the funds from the Ranbaxy stake sale could be utilised by Fortis and Religare for mergers and acquisitions, he said, "It is an integral part of the growth of these companies."

Two-three months ago Religare picked up the oldest broking house in UK, which was the first acquisition by any financial company outside India, he said.

"We have done things and will keep doings which will continue to strengthen our business globally. We are always evaluating opportunity and it is difficult at this point of time to give definite answer," Singh said when asked if there could be any acquisition in the near future.

The Singh family had recently undertook a rebranding exercise to rechristening its diagnostics subsidiary SRL Ranbaxy under the Religare name and is planning to expand it further.

Asked if there was any plan to go public with the diagnostic arm, Singh replied in the affirmative.

"The company is doing well... we are the largest pathology company in the country and at some point, we would like to list it as a separate company in the Indian market," he said.

Under the new initiative, Singh said SRL Ranbaxy would be rebranded in terms of the growth and the business.

India’s Growth Outstrips Crops

With the right technology and policies, India could help feed the world. Instead, it can barely feed itself.
India’s supply of arable land is second only to that of the United States, its economy is one of the fastest growing in the world, and its industrial innovation is legendary. But when it comes to agriculture, its output lags far behind potential. For some staples, India must turn to already stretched international markets, exacerbating a global food crisis.
It was not supposed to be this way.
Forty years ago, a giant development effort known as the Green Revolution drove hunger from an India synonymous with famine and want. Now, after a decade of neglect, this country is growing faster than its ability to produce more rice and wheat.
The problem has grown so dire that Prime Minister Manmohan Singh has called for a Second Green Revolution “so that the specter of food shortages is banished from the horizon once again.”
And while Mr. Singh worries about feeding the poor, India’s growing affluent population demands not only more food but also a greater variety.
Today Indian agriculture is a double tragedy. “Both in rice and wheat, India has a large untapped reservoir. It can make a major contribution to the world food crisis,” said M. S. Swaminathan, a plant geneticist who helped bring the Green Revolution to India.
India’s own people are paying as well. Farmers, most subsisting on small, rain-fed plots, are disproportionately poor, and inflation has soared past 11 percent, the highest in 13 years.
Experts blame the agriculture slowdown on a variety of factors.
The Green Revolution introduced high-yielding varieties of rice and wheat, expanded the use of irrigation, pesticides and fertilizers, and transformed the northwestern plains into India’s breadbasket. Between 1968 and 1998, the production of cereals in India more than doubled.
But since the 1980s, the government has not expanded irrigation and access to loans for farmers, or to advance agricultural research. Groundwater has been depleted at alarming rates.
The Peterson Institute for International Economics in Washington says changes in temperature and rain patterns could diminish India’s agricultural output by 30 percent by the 2080s.
Family farms have shrunk in size and quantity, and a few years ago mounting debt began to drive some farmers to suicide. Now many find it more profitable to sell their land to developers of industrial buildings.
Among farmers who stay on their land, many are experimenting with growing high-value fruits and vegetables that prosperous Indians are craving, but there are few refrigerated trucks to transport their produce to modern supermarkets.
A long and inefficient supply chain means that the average farmer receives less than a fifth of the price the consumer pays, a World Bank study found, far less than farmers in, say, Thailand or the United States.
Surinder Singh Chawla knows the system is broken. Mr. Chawla, 62, bore witness to the Green Revolution — and its demise.
Once, his family grew wheat and potatoes on 20 acres. They looked to the sky for rains. They used cow manure for fertilizer. Then came the Mexican semi-dwarf wheat seedlings that the revolution helped introduce to India. Mr. Chawla’s wheat yields soared. A few years later, the same happened with new high-yield rice seeds.
Increasingly prosperous, Mr. Chawla finally bought his first tractor in 1980.
But he has since witnessed with horror the ills the revolution wrought: in a common occurrence here, the water table under his land has sunk by 100 feet over three decades as he and other farmers irrigated their fields.
By the 1980s, government investment in canals fed by rivers had tapered off, and wells became the principal source of irrigation, helped by a shortsighted government policy of free electricity to pump water.
Here in Punjab, more than three-fourths of the districts extract more groundwater than is replenished by nature.
Between 1980 and 2002, the government continued to heavily subsidize fertilizers and food grains for the poor, but reduced its total investment in agriculture. Public spending on farming shrank by roughly a third, according to an analysis of government data by the Center for Policy Alternatives in New Delhi.
Today only 40 percent of Indian farms are irrigated. “When there is no water, there is nothing,” Mr. Chawla said.
And he sees more trouble on the way. The summers are hotter than he remembers. The rains are more fickle. Last summer, he wanted to ease out of growing rice, a water-intensive crop.

The gains of the Green Revolution have begun to ebb in other countries, too, like Indonesia and the Philippines, agriculture experts say. But the implications in India are greater because of its sheer size.
India raised a red flag two years ago about how heavily the appetites of its 1.1 billion people would weigh on world food prices. For the first time in many years, India had to import wheat for its grain stockpile. In two years it bought about 7 million tons.
Today, two staples of the Indian diet are imported in ever-increasing quantities because farmers cannot keep up with growing demand — pulses, like lentils and peas, and vegetable oils, the main sources of protein and calories, respectively, for most Indians.
“India could be a big actor in supplying food to the rest of the world if the existing agricultural productivity gap could be closed,” said Adolfo Brizzi, manager of the South Asia agriculture program at the World Bank in Washington. “When it goes to the market to import, it typically puts pressure on international market prices, and every time India goes for export, it increases the supply and therefore mitigates the price levels.”
In April, in a village called Udhopur, not far from here, Harmail Singh, 60, wondered aloud how farmers could possibly be expected to grow more grain.
“The cultivable land is shrinking and government policies are not farmer friendly,” he said as he supervised his wheat harvest. “Our next generation is not willing to work in agriculture. They say it is a losing proposition.”
The luckiest farmers make more money selling out to land-hungry mall developers.
Gurmeet Singh Bassi, 33, blessed with a farm on the edges of a booming Punjabi city called Ludhiana, sold off most of his ancestral land. Its value had grown more than fivefold in two years. He made enough to buy land in a more remote part of the state and hire laborers to till it.
Meanwhile, Mr. Chawla’s neighbors migrated to North America. They were happy to lease their land to him, if he was foolish enough to stay and work it, he said. Today, he cultivates more than 100 acres.
Last year, on a small patch of that land, he planted what no one in his village could imagine putting on their plate: baby corn, which he learned was being lapped up by upscale urban Indian restaurants and even sold abroad.
At the time, baby corn brought a better profit than the government’s price for his wheat crop.
This had been the Green Revolution’s other pillar — a fixed government price for grain. A farmer could sell his crop to a private trader, but for many small tillers, it was far easier to approach the nearest government granary, and accept their rate.
For years, those prices remained miserably low, farmers and their advocates complained, and there was little incentive for farmers to invest in their crop. “For farmers,” said Mr. Swaminathan, the plant geneticist, “a remunerative price is the best fertilizer.”
Mr. Swaminathan’s adage proved true this year. After two years of having to import wheat, the government offered farmers a substantially higher price for their grain: farmers not only planted slightly more wheat but also sold much more of their harvest to the state. As a result, by May, the country’s buffer stocks were at record levels.
Nanda Kumar, India’s most senior bureaucrat for food, said the country would not need to buy wheat on the world market this year. That is good news, for India and the world, but how long it will remain the case is unclear.
Will greater demand for food and higher market prices enrich farmers, eventually, encouraging them to stay on their land? There is potential, but other conditions, like India’s inefficient transportation and supply chains, would have to improve too.
How to address these challenges is a matter of debate.
From one quarter comes pressure to introduce genetically modified crops with greater yields; from another come lawsuits to stop it. And from yet another come pleas to mount a greener Green Revolution.
Alexander Evans, author of a recent paper on food prices published by Chatham House, a British research institution, said: “This time around, it needs to be more efficient in its use of water, in its use of energy, in its use of fertilizer and land.”
Mr. Swaminathan wants to dedicate villages to sowing lentils and oilseeds, to meet demand. The World Bank, meanwhile, favors high-value crops, like Mr. Chawla’s baby corn, because they allow farmers to maximize their income from small holdings.
The market may yet help India. Mr. Chawla, for instance, has replaced baby corn with sunflowers, prompted by the high price of sunflower oil. For the same reason, he is also considering planting more wheat.

GLOBAL MARKET IS MIXED AFTER YESTERDAY TRUMA.INDIAN MARKET WOULD OPEN IN FLAT TO POSITIVE NOTE.LEVEL OF NIFTY 4480-4500-435-4550 THIS IS THE RANGE OF THE MARKET BUY FROM 4535 AND ABOVE AND GO SHORT IF MARKETDOES NOT SUSTAIN 4500 WITH SL OF 4535.TOTAL MARKET O I IS 84 K CR.JUNE SERISE IS 69 K CR AND JULY SERISE IS 14 K CR.PUT CALL RATIO IS 1.51% BE CAUTIOUS AT MARKET INFLATION EXPECTION IS 9.5 TO 10.25.ONE GOOD TRIGGER FOR MARKET IS OIL SETTLED AT$132 WILL BE VOLATILE MAINTAIN STRICT S L .HAVE A NICE TRADING DAY

Ranbaxy, Pfizer sign truce over Lipitor

Exactly a week after the promoters of Ranbaxy Laboratories sold their shareholding to Japanese drug maker Daiichi Sankyo, the Indian drug maker and US giant Pfizer announced that they have reached an out-of-court settlement on their litigation over the world’s largest selling drug, Lipitor (Atorvastatin). According to the settlement, Ranbaxy will launch its generic version of Lipitor, the $12.7-billion cholesterol-lowering medicine, and combination drug Caduet in November 30, 2011 in the US with exclusive marketing rights for 180 days, along with the innovator company. Industry estimates peg Ranbaxy’s revenue upside from the settlement for Lipitor at $1.5 billion over a four-year period up to May 2012. Ranbaxy (subject to litigation) was on course to launch its generic version of Lipitor in the US in March, 2010, 15 months ahead of its patent expiry in June, 2011. The settlement pushes back the launch date by 20 months, even though it eliminates all uncertainty regarding the launch date. In addition, Ranbaxy will also not receive any upfront payment from the out-of-court settlement. Says Prabhudas Lilladher’s pharma analyst Ranjit Kapadia: “The settlement brings certainty to Ranbaxy’s launch and will cut down litigation cost for Ranbaxy from tomorrow itself. However, the drug’s launch has been pushed back by 20 months, which means that Pfizer will get additional sales of around $20 billion during the extended period.”
Ranbaxy has described the deal as a win-win situation. “This is the largest and the most comprehensive out-of-court settlement ever in the pharma industry covering a total revenue of over $13 billion. The revenues will start kicking in from this year as we will be launching generic version of Lipitor in Canada this calendar year,” Ranbaxy Laboratories CEO and MD Malvinder Singh told ET. A senior Pfizer executive said the agreement clearly reaffirms the value and importance of intellectual property. The settlement was announced after Indian stock exchanges closed on Wednesday. Ranbaxy shares moved up 2.9% to Rs 598 during the day. According to industry estimates, Ranbaxy will get a revenue upside of around $1.5 billion from the Lipitor generic over a four-year period up to May 2012. Bulk of this revenue will be backloaded and is expected to accrue when Ranbaxy launches the drug in the US market in November, 2011. Lipitor generates annual sales of $8 billion in the US alone. In Canada, the drug rakes in about a $1 billion in sales every year. Caduet, a combination drug of Lipitor and hypertension drug Norvasc, has annual global sales of $400 million. In addition to the US and Canada, the Indian drug maker will also have the licence to sell Atorvastatin in six more countries - Belgium, Netherlands, Germany, Sweden, Italy and Australia - on different dates. Ranbaxy can launch its Atorvastatin 2-4 months ahead of patent expiry in these countries. Ranbaxy and Pfizer have also resolved their disputes regarding Atorvastatin in Malaysia, Brunei, Peru and Vietnam.

Vietnam move hits hopes of cheaper rice

The world’s second-largest exporter of rice on Wednesday dashed hopes of a significant reduction in prices of the grain in the short term when Vietnam imposed a minimum export price of $800 a tonne for new contracts.
The minimum export price came as Hanoi on Wednesday lifted a ban on the signing of new export contracts that was imposed earlier this year. However, it said that it would only allow limited sales and reiterated a limit of 3.5m tonnes of exports for the first nine months of the year.

U.S. to Set New Limits on Oil Trade Overseas

Federal regulators said on Tuesday that they would place stricter limits on foreign exchanges that trade American oil as concerns continue to grow about the role of speculation in rising fuel prices. Some lawmakers said the move was long overdue.
At a Senate hearing to assess its performance, the Commodity Futures Trading Commission said it would require the London-based ICE Futures Europe exchange to adopt position limits used in the United States for the trading of the West Texas Intermediate crude oil contract, which is linked to a similar contract on the New York Mercantile Exchange.
Under the new agreement, foreign officials also will share daily trading data with American authorities and report any violations. Previously they shared data on a weekly basis.
IntercontinentalExchange Inc. in Atlanta, the parent company of ICE Futures Europe, plans to comply with the new rules and said the commission’s action would have almost no impact on its customers or business.
The commission’s acting chairman, Walter L. Lukken, had previously told Congress that oil prices appeared to reflect market fundamentals. He pointed to the declining value of the dollar and rising demand in developing nations as major factors behind the multiyear ascent in oil prices.
But in the last month the agency has taken a flurry of actions to gather more data on unregulated trading, including over-the-counter swaps.
Considering the commission’s limited view of the futures market, Senator Byron L. Dorgan, a North Dakota Democrat, questioned whether regulators knew enough about the markets to gauge the effects of speculation.
“If you don’t have the foggiest idea what percentage of total contracts you are regulating, you wouldn’t have a clue whether there is excessive speculation in the markets,” Mr. Dorgan said.

Growth down to 3.6% for six core industries in April 08

Pulled down by the sluggish performance of petroleum and electricity sector, growth of India’s six core industries slowed down to 3.6% in the first month of the current fiscal as against 5.9% a year ago.
The six core infrastructure industries - crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel - had registered a 9.6% growth in the preceding month of March.

Of the six industries, that have a combined weight of 26.7% in the overall Index of Industrial Production (IIP), refinery products growth slowed down considerably to 4.3% in April from 15.% in the same month last year.
Similarly, electricity generation growth was down to 1.4% from a robust 8.7% in April 2007.
Crude oil growth came down to 0.9% from 1.4%.

The remaining three sectors--coal, cement and finished carbon steel--registered good growth rates. Coal output grew by 10.3% from a mere 0.6%, while cement production rose by 6.9% from 5.8% and finished carbon steel to 4% from 2.7%.

Industrial growth, contributed to the extent of more than one-fourth by these six industries, had recovered to 7.1% in April from a mere 3.9% in the preceding month. However, the growth was quite down from 11.3% in April 2007.
For the April-March period of 2007-08, growth of six infrastructure industries was down to 5.6% as compared to 9.2% in the corresponding period a year ago.

MARKET PREDICTION

GLOBAL MARKETS ARE MIXED.
NIFTY COULD OPEN FLAT TOTAL OI IS 85K CR AND JUNE SERISE OI IS 75K CR AND JULY SERISE O I IS 10 K CR,PUT CAL RATIO EASING A BIT TO 1.54 DUE TO FEW ADDITION IN CALL OPTION.
LEVEL OF NIFTY IS 4580-4630-4670-4700.
HEAVY SHORT COVERING FOUND IN BANKING AND FINANCIAL SERVICE AND CONSTRUCTION SECTOR ..
TODAY WE CAN ASSUME SAME SHORT COVERING IN THE SECTOR.
HAVE A NICE TRADING DAY

-MR SAM

Investors pour funds into Asian real estate

The flow of capital into Asian property from outside the region is accelerating as a result of the credit crisis in the US, according to a report on the sector published on Wednesday.
Property investment in Asia grew 27 per cent to $121bn in 2007 and continues to build, says the report, which is being published by KPMG, the Asia Pacific Real Estate Association and index provider FTSE.
Investment was evenly allocated over the first and second halves of the year, unlike in Europe and North America, where investment slowed dramatically in the second half.
Most Asian markets recorded direct real estate returns above the global average of 10 per cent last year. This is forecast to continue, albeit at a lower rate.
The report comes during a period of aggressive fundraising activity for new global property funds, many of which are raising allocations to Asia to gain exposure to economies that are relatively insulated from the credit crisis. Property markets in the region, while not immune, have stood up relatively well compared with the US and Europe.
MGPA, the private equity fund manager part owned by Australia’s Macquarie Bank, this week launched a global fund that will invest mostly in Asia. It has secured $3.9bn in equity for Asian investment, giving it a potential buying power in the region, with leverage, of $15.6bn.
The fund has already committed $2.2bn to investments in Singapore, Japan, China and Thailand, and is looking at South Korea, Malaysia, Taiwan and Australia. North American investors make up 40 per cent of the fund.
Asian real estate investment trusts also outperformed American and European counterparts. Credit problems and softening real estate prices in the US and Europe mean that investors are focusing more on Asia both for long-term returns and opportunistic investments, according to the report.
At the same time, banks have become more reluctant to lend for new Asian projects, which increases the bargaining power of foreign funds. But the report says this has slowed, rather than halted, the financing process.
“There’s no shortage of capital in Asia,” said Andrew Weir, one of the report’s authors. “There are investment funds that have raised money and haven’t spent it yet.”

MARKET PREDICTION

WORLD MARKETS ARE BIT NEGATIVE AS OIL TOUCHED ALL TIME HIGH AND THEN REBOUND BACK $133(APROX) AFTER SAUDIARABIA COMMIT TO BOOST THE SUPPLY,$vsINR HOVERING AROUND 42.95,GOOD FOR IT AND PHARMA STOCK.
NIFTY LEVEL TO BE WATCH OUT TODAY IS 4530-4580-4630 IF SUSTAIN ABOVE 4530 GO LONG WITH SL OF 4500 AND IF MARKET DOES NOT HOLD 4580 GO SHORT WITH SL OF 4600.

IT SECTOR
WIPRO,SASKEN,NIITTECH, GSSAMERICA
PHARMA
DRREDDY, CADILA, SUNPHARMA
MINING

PLAY WITH STRICT SL.
TOTAL O I IS 81 K CR JUNE SERISE IS 72 K CR AND JULY IS 21 K CR.
PUT CALL RATIO IS 1.60 MAINTAINING ALMOST SAME LEVEL.

HAVE A NICE TRADING DAY

-MR SAM

Kotak Launches Sensex ETF

Kotak Mutual is launching Kotak Sensex ETF on May 7, 2008. This exchange traded fund will track BSE Sensitive Index (Sensex) to provide returns before expenses that closely correspond to the total returns of the BSE Sensex. The fund is open for subscription from May 07, 2008 till May 16, 2008. The units would be listed on BSE to provide liquidity through secondary market.

This will be the second ETF on Sensex. The first ETF on Sensex was launched in January 2003 -- ICICI Pru Spice which has closely tracked Sensex and delivered returns as much as the Sensex in the past 5-years but currently has less than Rs 1 crore assets under management.ETF is an Index fund but they trade on the market like stocks. Kotak Sensex ETF will facilitate exposure to Sensex with a single order. It will also enable trading flexibility by Intra day buying and selling just like any other listed share. The pricing will also be almost live as the intraday indicative price is likely to be closely linked to Sensex.Index funds have lower cost as they charge lower management fee compared to actively managed funds. Investors will have to pay brokerage in buying and selling these instead of any entry/exit load.Other Details:
Each unit of the Kotak Sensex ETF will be approximately equal to 1/100th of the value of BSE

SENSEX
Entry Load during NFO: For investments < investments =" "> Rs 1 Crore Nil
No entry load shall be charged on “all direct” applications received by AMC i.e., on application forms that are not routed through any distributor / agent / broker and submitted to AMC office or collection centre / investment service centre.
Entry Load during continuous offer : Nil
Exit Load Nil

Ranbaxy dismisses reports of Pfizer's bid for stake

Ranbaxy Labs, which last week announced sale of its promoters' 34.8 per cent stake to Japan's Daiichi Sankyo for nearly Rs 10,000 crore, dismissed rumours that Pfizer might bid for 65 per cent stake which is not owned by the promoting family as "very speculative". Leading business newspaper Financial Times quoted Ranbaxy promoter and CEO and Malvinder Mohan Singh as saying that he had not been in talks with the world's largest drugmaker. The daily also said that Singh dismissed rumours that Pfizer might bid for the 65 per cent stake in Ranbaxy not owned by the family as "very speculative". In one of the the largest sell-outs in India's private sector, promoters of Ranbaxy, the country's largest drugmaker, announced selling their entire 34.8 per cent stake in the firm to Japan's Daiichi Sankyo for Rs 10,000 crore. The decision to sell was "emotional," Singh has said. "But you cannot hold a company from future advancement because your shareholding will come down." "If someone else can create more value and do things better, you should be open to exploring those options," Singh is quoted as saying in the daily. Explaining why he sold his family's crown jewel, Singh has said, "It takes Ranbaxy to a whole different level and there is huge merit in bringing big pharma and generics together. Joining forces with Daiichi strengthens Ranbaxy's fledging and expensive efforts to develop original drugs rather than just copying existing ones."

Fears of CRR hike may haunt market

The spectre of inflation, which many bet would rise to double digits soon, is expected to keep shares of interest-rate-sensitive sectors such as banks and real estate under pressure. Investors fear the Reserve Bank of India (RBI), as part of its efforts to contain rising inflation, would resort to more measures to make banks’ lending rates dearer. Analysts expect the central bank to hike the cash reserve ratio (CRR) next - the minimum cash that banks need to keep with RBI, after the recent hike in repo-the rate at which banks borrow from RBI for short-term. As a CRR hike would result in banks having lesser money at their disposal for lending, the move is expected to keep interest rates higher and further slowdown borrowing by corporates and individuals. By keeping interest rates high, RBI intends to curb spending, and in turn keep prices lower. “The wide and persistent gap between RBI’s WPI inflation target (of 5.5%) and the likely trajectory suggests more policy tightening ahead to keep inflation expectations anchored. We expect another 25 basis point (bps) hike in the repo rate in Q3 (Oct-Dec) 2008 and 100-bps hike in CRR during this financial year,” Lehman Brothers economist Sonal Varma said in a client note. Inflation, measured by wholesale price index (WPI), jumped to a 7-year high of 8.75% in the week to May 31, after rising 8.24% in the previous week. Investors fear that the negative impact of higher lending rates may not be restricted to banks and real estate, but would rub off on the entire economy. Such concerns over slowdown in economic growth are expected to keep the market choppy this week too. “If the course of monetary policy is to be corrected by controlling money supply, interest rates will go up; exchange rates will appreciate leading to further slowdown in growth,” Merrill Lynch equity strategist Vijay Gaba said in a client note. A weaker rupee against the US dollar makes import of oil and other critical raw materials costlier, thereby widening trade deficits while boosting exports. These parameters of India’s economic conditions are of significance, as they are closely watched by foreign investors, including institutions, which have been key to India’s recent bull run. So far in 2008, foreign institutions have net-sold Indian shares worth Rs 21,832.60 on account of India’s deteriorating economic conditions. The performance of dollar in the coming weeks will largely depend on the outcome of the Fed meet on June 24-25. If the Fed does not cut benchmark rates further in the meet, analysts expect the dollar to weaken, at least, temporarily.

MARKET PREDICTION

GLOBAL MARKETS ARE IN GREEN AND WE ARE HOPING POSITIVE OPENING .
LEVELS OF NIFTY TO BE WATCH OUT IS 4480-4550-4620 ..
TOTAL OI IS 81 K CR AND JULY SERIES IS 8 K CR.
PUT CALL RATIO IS HOVERING AROUND 1.61%.
FROM HIGH THIS RALLY CAN BE ASSUME UPTO 4680-4700 WE CAN TAKE FRESH VIEW ON NIFTY FROM 4700 AND ABOVE.
HAVE A NICE TRADING ..

-MR SAM

SAIL to set up three steel processing units

The Steel Authority of India Ltd (SAIL) is setting up three steel processing units (SPU) in Madhya Pradesh for manufacturing various types of steel items used by the construction industry.
The foundation stone for the first two units in Ujjain and Hosangabad have been laid during the week by the Minister for Steel, Ram Vilas Paswan. The company plans to invest Rs 100 crore in the Ujjain unit and Rs 154 for the Hosangabad unit, a company release said.

The Ujjain unit will produce TMT bars from billets supplied from the Bhilai Steel Plant (BSP) and will have an annual capacity of one lakh tonne.
The Hosangabad unit will manufacture angles, channels, beams, joists and also TMT bars. SAIL is in the process of setting up 10 SPUs in six States where it does not have any production facility to meet the market demand for tailor-made steel products and to help increase per capita steel consumption in rural areas, the release said.

OIL PRICE HIKE IS SPECULATION OR DEMAND PULL????????

By now it is becoming too obvious that the United States is playing the oil game all over again. And this is the desperate gamble of a country whose economy is neck deep in trouble. Given this scenario, managing prices of oil is central to the US economic architecture. Expectedly, this gamble has been played in a great alliance between the US government, US financial sector and the media. Naturally, since the past few years, the US financial sector has begun to turn its attention from currency and stock markets to commodity markets. According to The Economist, about $260 billion has been invested into the commodity market -- up nearly 20 times from what it was in 2003. Coinciding with a weak dollar and this speculative interest of the US financial sector, prices of commodities have soared globally. And most of these investments are bets placed by hedge and pension funds, always on the lookout for risky but high-yielding investments. What is indeed interesting to note here is that unlike margin requirements for stocks which are as high as 50 per cent in many markets, the margin requirements for commodities is a mere 5-7 per cent. This implies that with an outlay of a mere $260 billion these speculators would be able to take positions of approximately $5 trillion -- yes, $5 trillion! -- in the futures markets. It is estimated that half of these are bets placed on oil.
It may be noted that oil is internationally traded in New York and London and denominated in US dollar only. Naturally, it has been opined by experts that since the advent of oil futures, oil prices are no longer controlled by OPEC (Organization of Petroleum Exporting Countries). Rather, it is now done by Wall Street. This tectonic shift in the determination of international oil prices from the hands of producers to the hands of speculators is crucial to understanding the oil price rise. Today's oil prices are believed to be determined by the four Anglo-American financial companies-turned-oil traders, viz., Goldman Sachs, Citigroup, J P Morgan Chase, and Morgan Stanley. It is only they who have any idea about who is entering into oil futures or derivative contracts. It is also they who are placing bets on oil prices and in the process ensuring that the prices of oil futures go up by the day. But how does the increase in the price of this oil in the futures market determine the prices of oil in the spot markets? Crucially, does speculation in oil influence and determine the prices of oil in the spot markets? Answering these questions as to whether speculation has supercharged the demand for oil The Economist, in its recent issue, states: 'But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of 'paper barrels,' but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.' On both counts -- that speculation in oil is not pushing up oil prices, as well as on the issue of the build-up of inventories -- the venerable Economist is wrong. The finding of US Senate Committee in 2006 In June 2006, when the oil price in the futures markets was about $60 a barrel, a Senate Committee in the US probed the role of market speculation in oil and gas prices. The report points out that large purchase of crude oil futures contracts by speculators has, in effect, created additional demand for oil and in the process driven up the future prices of oil. The report further stated that it was 'difficult to quantify the effect of speculation on prices,' but concluded that 'there is substantial evidence that the large amount of speculation in the current market has significantly increased prices.' The report further estimated that speculative purchases of oil futures had added as much as $20-25 per barrel to the then prevailing price of $60 per barrel. In today's prices of approximately $130 per barrel, this means that approximately $100 per barrel could be attributed to speculation! But the report found a serious loophole in the US regulation of oil derivatives trading, which according to experts could allow even a 'herd of elephants to walk to through it.' The report pointed out that US energy futures were traded on regulated exchanges within the US and subjected to extensive oversight by the Commodities Future Trading Commission (CFTC) -- the US regulator for commodity futures market. In recent years, the report however pointed out to the tremendous growth in the trading of contracts which were traded on unregulated OTC (over-the-counter) electronic markets. Interestingly, the report pointed out that the trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron into the Commodity Futures Modernization Act in 2000. The report concludes that consequential impact on account of lack of market oversight has been 'substantial.' NYMEX (New York Mercantile Exchange) traders are required to keep records of all trades and report large trades to the CFTC enabling it to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. In contrast, however, traders on unregulated OTC electronic exchanges are not required to keep records or file any information with the CFTC as these trades are exempt from its oversight. Consequently, as there is no monitoring of such trading by the oversight body, the committee believes that it allows speculators to indulge in price manipulation. Finally, the report concludes that to a certain extent, whether or not any level of speculation is 'excessive' lies entirely in the eye of the beholder. In the absence of data, however, it is impossible to begin the analysis or engage in an informed debate over whether our energy markets are functioning properly or are in the midst of a speculative bubble. That was two years back. And much water has flown in the Mississippi since then. The link to the spot markets Now to answer the second leg of the question: how speculators are able to translate the future prices into spot prices. The answer to this question is fairly simple. After all, oil price is highly inelastic -- i.e. even a substantial increase in price does not alter the consumption pattern. No wonder, a mere 3-4 per cent annual global growth has translated into more than a 40 per cent annual increase in prices for the past three or four years. But there is more to it. One may note that the world supply and demand is evenly matched at about 85 million barrels every day. Only if supplies exceed demand by a substantial margin can any downward pressure on oil prices be created. In contrast, if someone with deep pockets picks up even a small quantity of oil, it dramatically alters the delicate global demand-supply gap, creating enormous upward pressure on prices. What is interesting to note is that the US strategic oil reserves were at approximately 350 million barrels for a decade till 2006. However, for the past year and a half these reserves have doubled to more than 700 million barrels. Naturally, this build-up of strategic oil reserves by the US (of 350 million barrels) is adding enormous pressure on the oil demand and consequently its prices. Do the oil speculators know of this reserves build-up by the US and are indulging in rampant speculation? Are they acting in tandem with the US government? Worse still, are they bordering on recklessness knowing fully well that if the oil prices fall the US government will be forced to a 'Bears Stearns' on them and bail them out? One is not sure. But who foots bill at such high prices? At an average price of even $100 per barrel, the entire cost for the purchase of this additional 350 million barrels by the US works out to a mere $35 billion. Needless to emphasise, this can be funded by the US by allowing it currency printing presses to work overtime. After all, it has a currency that is acceptable globally and people worldwide are willing to exchange it for precious oil. No wonder Goldman Sachs predicts that oil will touch $200 to a barrel shortly, knowing fully well that the US government will back its prediction. And, in the past three years alone the world has paid an estimated additional $3 trillion for its oil purchases. Oil speculators (and not oil producers) are the biggest beneficiaries of this price increase. In the process, the US has been able to keep the value of the US dollar afloat -- perhaps at an extra cost of a mere $35 billion to its exchequer! The global crude oil price rise is complex, sinister and beyond innocent economic theories of demand and supply. It is speculation, geopolitics and much more. Obviously, there is a symbiotic link between the US, the US dollar and the oil prices. And unless this truth is understood and the link broken, oil prices cannot be controlled.

Industrial growth rebounds to 7 per cent

Slowdown in the manufacturing sector pulled down the overall industrial growth rate to 7 per cent in April, the first month of the current financial year.
The industrial production during April 2008 declined from 11.3 per cent recorded in the corresponding month of the previous financial year, says the Index of Industrial Production (IIP) figures released on Thursday.

The decline has been mainly on account of poor showing by manufacturing and electricity sectors. While the manufacturing sector growth rate slipped from 12.4 per cent to 7.5 per cent during the month, power generation recorded a sharper decline from 8.7 per cent to 1.4 per cent.
The mining sector, however, registered a robust growth in April, moving up to 8.6 per cent from 2.6 per cent in the corresponding period last year.
According to the official figures, the industrial growth rate for 2007-08 worked out to be 8.3 per cent, down from 11.6 per cent in the previous year.