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Thursday, 20 June 2013

NERVOUSNESS HAS A POINT...

The markets are right now in severe bear grip as the world sell off is coupled with domestic problems.
The markets saw a serious sell off due to the tapering of the QE support from FED. 
The fact is that the US markets and the economy is doing good so will be the markets in future. 
This is a KNEE JERK reaction to a statement which was inbuilt in the system for quite some time. 
The markets tend to react for these kind of a situations but the deep pockets make a bottom fishing 
to garner large chunks of quantities of QUALITY STOCKS. 
I have mentioned earlier when the BUDGET presentation is over, 
we can seriously expect LOW cuts in major stocks. 
The HIGH cuts registered in many quality stocks but the other just participated for a better OFF-LOAD.The Indian markets like other Asian Markets strongly depend on the developed markets. 
We will do well in future but the other local problems like CAD and Rupee 
Depreciation needs to be sorted out. 
The regular/senior market participants might have remembered that the small and
 medium companies 4- years back gone for an extent to file cases against the BANKS for mis-selling the PRODUCTS when first RUPEE depreciated steeply to 57 level.
 Now Rupee may stabilize around 57 +- two rupees for next 2 years.

The short time situation is quite favourable to BEARS especially those who shorted in BANK stocks. 
The RBI may cut rate cut in JULY-13. The bottom level buying in these stocks arround these level can offer decent returns over next one year. The INVESTMENT cycle in INDIA has damped due to RBI cautious approach. 
The approach is due to fear and the INFLATION concerns. 
This is approach is going to change in coming weeks.

We can expect news about AMBUJA cement,or news related to 
CEMENT industry is building. 

As we speak the numbers, the Nifty has very good support at 5500 level provided 
Reliance stays above 763 level. The banking stocks surged with rate cut anticipation 
and they doomed but the other stocks like Bharati, RCOM, IDEA, RIL, Dr Reddy, 
SUN, LUPIN, CIPLA, Maruti, AmbujaCement and Cairn shall not fall below 3% of their current levels

AMBUJA CEMENTS NEWS--PREDICTED

Ambuja's minority holders losers: analysts

Say restructuring is detrimental to minority shareholders as Ambuja will part with its huge cash balance Top brokerages said the complex deal between Ambuja Cements and ACC is unfavourable to Ambuja’s minority shareholders.

In a multi-layered transaction, Swiss cement maker Holcim, which holds majority stakes in both the Indian firms, will increase its stake in Ambuja to 61.3% from the current 50.01% once Ambuja buys Holcim’s 50.1% stake in ACC. Currently, Holcim owns 50% stakes in Ambuja and ACC.
“Prima facie the restructuring is detrimental to minority shareholder of Ambuja Cement as Ambuja Cement will be parting away with its huge cash balance of Rs 35 bn (Rs 3,500 crore), which is more than 90% of its CY12 cash on books, without any EPS (earnings per share) accretion,” said Emkay Global in a report.
At 12:45 pm on Thursday, Ambuja shares were down 11.2% at Rs 169.65. ACC shares had fallen 3.9% at Rs 1,183.
“Holcim has restricted minority shareholders' choice by using Ambuja ’s cash for ACC’s stake. The cash could have been used alternatively for a buy-back,” said Credit Suisse, in a client note.The investment bank said Ambuja’s proposal to buy an additional 10% stake in ACC over the next 24 months will make it a ‘net-debt company’. Deutsche Bank said Ambuja faces the risk of its valuations getting the discount of a holding company.Analysts said minority shareholders of ACC have got a better deal than those of Ambuja’s.
“ACC minority shareholders benefit from merger synergies, the creeping acquisition by Ambuja for a 10% stake in ACC over the next two years, which should support ACC prices; and Holcim’s direct stake of 50% in ACC reduced to an indirect stake of 30%,” said Credit Suisse, which said ACC’s minority shareholders benefit at the margin in the transaction.
Brokerage Jefferies said, “We expect a de-rating of ACEM (Ambuja) on 'holding company discount' concerns and prefer ACC as it would benefit from the proposed cost saving initiatives and ACEM’s proposal for a 10% creeping acquisition in ACC.”

http://www.business-standard.com/article/companies/ambuja-s-minority-holders-losers-analysts-113072500350_1.html