Archive for the ‘International’ Category

COMMODITY WEEKLY COMMENTARY 6th-10th September 2010

International gold prices rose back above $1250 an ounce for the second time in a week, as government bonds ticked lower together with energy prices. Silver prices also touched a new 16-week high at $19.57 an ounce on international bourses while it made a life time high on MCX.

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Apart from bad economic news globally, a weak Rupee is also pushing up prices in India. Base metal pack also ended higher last week on positive manufacturing and improved jobless data from both China and US which pushed prices higher. However, lower dollar index also supported prices. After being top performer for many days, Nickel has marginally underperformed other base metals as inventories on LME increased. In energy counter, crude oil futures got jiggled in hands of both bulls and bears. Prices remained volatile for the week amid mixed fundamentals.

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On one hand, prices got support from improved economic data but upside was offset by building inventories. The positive sentiment was offset by the effect of the abysmal inventory status report.

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U.S commercial crude oil inventories increased by 3.4 million barrels from the previous week; at 361.7 million barrels. U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.2 million barrels last week, and are above the upper limit of the average range.

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It was an action pack week for agro commodities in which they agro commodities saw big movements. Most of the spices closed on negative note bearing in mind the overseas weakness coupled with arrivals in some spices. Dip in Brazilian and Vietnamese pepper parity put pressure on Indian pepper as well and hence we saw two week continuous weakness. Similar to pepper, jeera futures also dragged down on dull spot trading. There was no respite for turmeric futures and they fell like nine pins for straight seven week on low stock buying amid the news of increase in acreage in Andhra Pradesh.

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Cardamom was sideways, while chilli was marginally up on short covering tracking the firm spot markets. Due to strong arrivals in major mandies coupled with beginning of fresh sowing of kharif pulses, chana futures surrendered their previous gain to some extent. Timely arrival of monsoon in southern and western regions has improved the sowing activity. Selling intensified in oil seeds and edible oil on the back of better crop estimate together with weakness in overseas market. Damaged crops in Russia, Europe and Canada, boosting demand for U.S. supplies to make animal feed, food and fuel revived maize futures. Guar counter was up on lower level buying.

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Weekly Update 24th – 28th May

Global markets nosedived after German financial regulator introduced a temporary ban on naked short selling and naked credit-default swaps of Euro-area government bonds to provide stability to the financial system from the excessive price movements. The move shattered the confidence among investors that the various efforts like 750 bn euro package to tackle the situation are not enough to stem the crisis.

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EU countries efforts to cut down on their deficits by reducing spending & increase in taxes may lead to contraction in the region. The situation poses a serious threat to US & World economy as it could lead to slide in world trade & economic growth.

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According to Emerging Portfolio Fund Research(EPFR), investors withdrew $12 billion from European & US equity funds in the week to May 19. In order to tighten the US finance industry regulation, the senate approved a bill to impose restriction on banks proprietary trading & to create a consumer protection agency having powers to write & enforce rule to ban abusive lending. In another development Fed raised the US growth estimates to a range of3.2% to 3.7% this year & lowered forecast for unemployment & inflation. The European crisis has not only hit hard the equity markets but also commodities as well. With the commodity prices coming down especially oil, it has somewhat reduced the inflationary pressures building up in the economies.

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RBI deputy governor Subir Gokaran said “cautious pace is the best way to go and that is the stance,” after the Global economy outlook changes in the last six weeks. One the domestic positive development for the Indian Government that happened was 3G auction. The government managed to garner close to Rs. 70,000 crore, double the amount it anticipated in the budget estimates. This extra money is likely to lift the pressure on the market borrowing and will give some extra room to the government  for the developmental purposes. For the time being the markets are expected to remain in pressure & will eye on the monsoon to gauge how Indian economy will behave in the rest of year as agriculture is the mainstay for the overall development.

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Overall trend of world stock markets is down though in the short term they are oversold and a bounce can be expected in the coming week which would be more of a relief rally. Till the European markets do not stabilize, the recovery might be short lived. One should be cautious in such markets. Nifty faces resistance between 5040-5120 levels and Sensex between 16800-17100 levels.

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Volatility in the global financial markets is expected to calm down in near term which will lead to some recovery in base metals and crude oil. European Union finance ministers pledged to stiffen sanctions on high-deficit countries and ruled out setting up a mechanism to manage state defaults. Bullions may continue to trade on weaker path as decline in safe haven status can keep the prices pressurized.

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Weakness in local currency has curtailed the volatility in bullions in domestic bourses to greater extent. Key economic releases like US GDP will set the course this week for base metals. Bulls may again take center stage in spices while oilseeds counter may try to find direction taking cues from CBOT and BMD. Wheat and Chana can trade in range with marginal buying.

CHILLI

Description

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Chilli is the dried ripe fruit. It is widely distributed in all tropical and sub-tropical countries including India.

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Production in india

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In India, Chilli is a kharif season crop and an important cash crop. It is grown in all parts of India covering about 7,33,800 hectares. The harvesting season starts in January and arrivals peaking in February-April. Sowing is held mainly during August-October. Several varieties of chillies are cultivated in India. Sanam, Bydagi, Wonder, Hot, Jwala and LC334 are the most popular amongst them.

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India is the largest producer and consumer of chilli in the world contributing nearly 50 percent of the global output. So any decline in output would have an immediate impact on prices. Climatic conditions are also the major variables which make chillies hotter.

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In peak season, nearly one billion bags of chillies (a bag contains 35-50 kg) worth Rupees 500 crore arrives in the Guntur market. Other major markets are Khammam and Warangal in Andhra Pradesh and Bellary and Raichur in Karnataka.

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According to the Spices Board, Consumption of chilli is increasing substantially as the branded powder sales growing at a compound annual growth rate of 11%.

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Over 30 percent of chillies produced in India are converted into powder.

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International Scenario

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In chillies, the major producing countries are India, China, Peru, Bangladesh, Hungary and a few others. Production of major countries is growing at a CAGR of 5.2 percent. World trade in chillies is put at 4 lakh tonnes. The Indian share in global production range from 50-60 percent, China and Peru are growing fast and Hungary shows a de-growth. However, India is the only one source for hot chillies.

Export Scenario

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India is a major exporter of chillies with major destinations of West Asia, Far East, USA, Sri Lanka and Bangladesh. India also exports chillies oleoresins in good quantities.

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In the first half of 2009-10, exports to Pakistan were nil as against 22,000 tonnes during the year-ago period. Indian chilli exports fell in the first half of the current financial year as China importing it from the Pakistan market. Chilli exports picked up from October and during January 2010, India exported around 17,500 tonnes valued Rs 120 crore as against 11,500 tonnes valued at Rs 69 crore. In long term, exports are likely to increase as the Chinese production is on the lower side.

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Current scenario

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The total stock position of chilli in Guntur mandi of Andhra Pradesh at 48 lakh bags against 25 lakh bags reported last year in the same period. The total production of chilli in the current year is also likely to be around 1.68 lakh bags against 1.25 lakh bags reported last year due to steady prices of chilli during the sowing period.

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Currently chilli prices are trading in pressure as arrivals increase. But good demand and cold chain facilities developed by affluent farmers are likely to help stabilise the chilli prices. Heavy arrivals also promote more exports on lower prices. The forward month contract is trading in contango (i.e prices of next month contract is higher than the most active traded current month contract.

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The active June contract chilli futures made a low of Rs.4520 per quintal from a high of Rs.5500 per quintal and declining by 21.68 %. Chilli future (June_NCDEX) has seen a drastic fall in regards to volume, from 2000 lots to 400 lots in these days, while the open interest has seen a continuous rise.

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Weekly Update 19th – 23rd April 2010

After nine consecutive weeks of gains, domestic markets ended in the negative terrain in the week gone by on the concerns over interest rate tightening by the RBI in its monetary policy scheduled on 20th April coupled with weak cues from the Asian markets.

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Moreover increase in unemployment numbers in US and China’s measures to cool its real estate market raised the uncertainty over the global economic growth. Now, Investors are much wary over the signs of overheating in China as its economy grew almost 12%, the biggest expansion since 2007, Industrial production grew 18.1% in March & retail sales increased 18%. Closer home IIP numbers for the month of February grew by 15.1% as against an annual gain of 16.7% in January, and 17.6% in December. While India’s inflation, as measured by the wholesale price index (WPI), surprisingly stayed almost unchanged in March at 9.90% as compared to 9.89% in February. However, it is expected that after the strong Industrial numbers, improving trade, healthy credit off take in the last fortnight of last financial year & high Inflation, RBI may take steps to suck liquidity by increasing Cash Reserve Ratio & give signals of higher interest rates to the banking system & industry as well by increasing both policy rates. The other concern emerging for the manufacturing growth is appreciating rupee.

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As a major proportion of manufactured goods are meant for exports, the rise in domestic currency will arrest exporters’ margin & may result in lower export.

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FII’s also were a bit cautious to actively participate in the market ahead of RBI’s policy review. In the current CY, FIIs have so far pumped in more than $5.42 billion, while in the month of April; they have been net buyers at $ 1.05 billion in the Indian markets. Expectation of the good corporate results is likely to play a catalyst role for the next direction of the market. World stocks & commodity markets fell across the board after the revelation of SEC announcing civil fraud charges against Goldman Sach’s. This incident is likely to have its effect on the markets in the coming week.

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After 9 weeks of continuous rally in Indian stock markets, the rally ended last week after Nifty closed down 1.85% for the week. With world stock markets including the commodities taking a sharp correction on Friday, it seems that temporarily a top has been made in the market and one should be careful.

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Nifty has support between 5200-5100 levels and Sensex between 17400-17200 levels.

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On the commodity front, a range trading is expected in metals and energy.

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Since last few weeks, bullions and base metals have been trading in upper zone but are unable to break the resistance. Once they break their resistance then only, traders’ can see a new trading range. Back at home, sharp appreciation in rupee is also locking the movements. Data from European Union is important for the week apart from PPI and housing data of US. If improvement continues then only commodities will trade in upper trading range or vice a versa. Agro commodities could be more volatile ahead of expiry of April contract on NCDEX. In agro commodities, guar could see further rise on improved fundamentals as well as technical.

How To Get Started in Online Investing? Final Part

Hello Friends here we come up with an extension of our previous blog “How To Get Started in Online Investing?” Part 1.

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How To Get Started in Online Investing?

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In previous blog, we have touched upon the questions, any beginner investors do have in their mind while going for investing.

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At the same time we had also tried to look in previous blog that what is Online Trading, resources needed first of all to invest online, few steps to start investing online and how SMC ONLINE helps investors in reaping the benefits of online trading.

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In this Blog, we would try to discuss about what are the further steps an investors need to take once the initial registrations are done with.

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🙂

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Once the registration formalities are done with, you would be required to load your online investing trading account with funds.

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Once Funds would be deposited you would need to look out for the stocks on which you would like to invest prima facie.

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One thing you should bear in mind that before investing, you should do the in-depth research about the company’s profile, performances and services.

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In this respect investing firms like SMC ONLINE comes to your rescue usually by helping you with their excellent research support, stocks recommendations and quality statistics.

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These things are really very important while you invest in buying the shares of any company.

As a wise investor you should keep your eyes open, and don’t blindly trust anyone.

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Another very important thing is RISK FACTOR.

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You’ll have to take the risk in terms of investing your money in the stock market.

Stock market is a bit similar to gambling.

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But there is a big difference between the risk and calculated risk.

For a beginner, you should only go for calculated risk.

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Don’t put your entire money in terms of buying the shares of a new company, even if the future potential of that company seems very high.

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Start slowly, understand the market, earn some decent amount of money first of all and then go for big trading.

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Once you have gotten started, you should start by learning a little bit about chart reading.

If you can read the charts you will have a good idea what is going on.

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And as I said earlier, I would conclude this topic by saying that any beginner investor should look for a broker firm that gives good value for money with their commission fees.

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🙂

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Stay Tuned for more and more on this 🙂

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However For More latest Industry,Stock Market and Economy News Updates, Click Here

Global Coffee Output May Dip 3.6 Per cent in the 2009-10

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Global Coffee Output May Dip 3.6 Per cent in the 2009-10

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Global coffee output may dip 3.6% : ICO

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Global coffee output may dip 3.6 per cent to 7.41 million tonnes (mt) in the 2009-10 crop year on fall in production in Brazil and Africa, the International Coffee Organisation (ICO) said.

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Adverse climatic conditions in few growing regions may also affect crop quality, it added.

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Last year, world coffee output had stood at 7.69 mt, it said, adding that the estimate for this year is preliminary as data from Colombia and Vietnam is pending.

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“With factors such as a prolonged dry season and high levels of coffee berry borer infestation, there appears to be little possibility of an increase in global production,” ICO said in its latest market report.

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🙂

In Other major Commodities Update, there are news of rabi productions falling short of expectations and Uttarakhand government seems not to be increasing the sugar price.

🙂

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Rabi output may fail to meet estimates:

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All eyes are now on the estimates for the rabi crop this year.

A good winter crop (rabi) will help augment the foodgrain supply and ease food prices.

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Hopes of a good crop have been fuelled by favourable weather conditions and the greater thrust on increasing the rabi crop.

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The Union agriculture ministry has already indicated that the rabi season, this year, may see an additional 10 million tonne (mt) of output over the past year’s production, implying a growth of 8%.

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This optimism on the rabi crop has prompted the Central Statistical Organisation or CSO — the government’s statistics arm — to estimate a meagre fall of 0.2% in agri output this year despite a 16% fall in the kharif (or summer crop) output due to the deficient monsoon.

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🙂

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Uttarakhand not to increase sugarcane price:

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The Uttarakhand government seems to be in no mood to increase the price of Rs 215-220 per quintal for sugarcane despite a hefty increase by private sugar mills.

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In the first week of December, the government announced the state advised price (SAP) of Rs 192-197 at a time when farmers were agitating for a price of Rs 250.

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But soon, the private mills began paying heavy bonuses to farmers in the face of acute shortfall in a desperate bid to keep the factories running.

The government too decided to give bonus with a final price of Rs 215-220.

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🙂

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Weekly Update of The Market (08th-12th February)

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and  latest global business and industry updates.

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Weekly Update of The Market (08th-12th February)

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After starting the year on a good note & Indices making fresh highs within few weeks many Asian markets have corrected between 7 to 10%.

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The global sell off over sovereign debt problems in Europe and an unexpected rise in jobless claims in US put investors on the defensive mode.

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The anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the Euro & has led strength to US dollar.

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Foreign investors sell off is an outcome of dollar-carry-trade unwinding as when they borrowed the dollar was cheap & now it is recovering.

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Investors viewed the markets in year 2010 with confidence in view of recovery gaining momentum is now shaken over the debt problems, nascent economic recovery & confidence of the governments that stand behind the euro.

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Efforts of China to curb lending preventing overheating in economy also pose a risk to derail the global recovery.

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Back at home, the effect of turmoil in the international market also made government to think its strategy on ambitious disinvestment programme.

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🙂

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Lukewarm response to the NTPC, the much awaited issue managed to get subscription of just 1.2 times on its closing day.

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The maximum bid of 20.87 crore shares was put by Indian institution under the first time adopted French Auction route.

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This has challenged the finance Ministry hopes on the proceeds from disinvestments to make up the sliding revenue & rising expenditure.

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While it looks that PSU disinvestment may not yield desired results on market weakness, the 3G auction i.e. expected to garner Rs. 35,000 crore could be postponed to next fiscal year.

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🙂

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The fate of some of the IPO’s like NMDC, Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation that are on the disinvestment agenda before March 31, looks tough to sail through, if the stock markets do not rise and big investors do not come back.

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On the contrary, Banks like Bank of Baroda & Indian Bank that were expected to raise money overseas have put now their plans on hold.

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🙂

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The good news from the external sector continued as the data showed a 9.3% annual increase in exports in December to $14.6 billion, a second consecutive month rise.

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While imports increased by 27.2% from a year earlier to $24.75 billion.

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Food inflation remained at high levels & rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week on the back of rising pulses & potato prices.

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Markets are likely to take a closer view of the advance estimates on economic growth for the current fiscal ending March 2010 scheduled to be released on Monday.

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🙂

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In the days to come an activity in the sectors like railways, fertiliser, textiles, pharma, education, power and infrastructure may be seen on expected positive policy announcements and budgetary sops.

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It was clearly mentioned last week that world markets are going in downtrend and one should be careful in such a scenario and that one should be moving in cash.

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Now the markets have taken a very sharp fall last week due to rise in Dollar Index and fall in all asset classes.

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🙂

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The coming week might see some counter rally from lower levels.

Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

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🙂

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If we talk about commodity markets then one can see that strengthening dollar and lack of firm global cues had pressurized commodities prices to move southward.

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Investors are selling riskier assets and putting their money in dollar as a safe haven buying.

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Debt concerns facing Greece, Portugal and Spain coupled with dollar index which is trading above the mark of 80 is most likely to compel commodities to trade lower.

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French and euro zone GDP, USD advance retail sales, USD U. of Michigan Confidence will give further direction to commodities.

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Investors should keep an eye on gold – silver ratio.

It was 58:1 few months back, now reached to 67:1 on MCX, heading towards the level of 70:1.

It is demonstrating more selling in silver.

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🙂

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Stay Tuned for More on weekly updates.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Moneywise…Be Wise ;)

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If you find yourself asking the question –

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Why should I Save ?

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Why should I Invest ?

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Where do I Invest ?

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Who would Guide me to take informed decision on my Investments ?

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…then look no further !

Why SMC?

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SMC Group, a leading Financial services provider in India, a vertically integrated investment solutions company, with a pan-india presence is there to guide you and provide complete investment solutions to you.

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SMC Group, having rich experience of more then two decades in financial markets, is one of the largest & most reputed investment solutions company that provides a wide range of services to its client base of more than 5, 50,000 clients with presence in more then 1500 cities.

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SMC Online, an unit of SMC Group, is one stop financial investment portal for investor’s all financial needs.

Investors can trade online in Equities, FNO, Currency Futures, Commodities, apply online for IPOs, and invest online in Mutual Funds.

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SMC is :

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a) 4th Largest broking house of India in terms of trading terminals (Source: Dun and Bradsheet, 2008)

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b) 5th largest distributor of Initial Public Offering (IPOs) in retail (Source: Prime Data Ranking)

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c) Awarded ‘Fastest Growing Retail Distribution Network in Financial Services’ (Source: Business Sphere, 2008)

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d) Recipient of ‘Major Volume Driver Award’ from BSE for last three years consecutively.

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e) Nominated among the top three in the CNBC Optimix Financial Services Award 2008 under National Level Retail Category.

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f) One of the largest Proprietary Arbitrage Desk doing risk free arbitrage in equities & commodities.

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g) Commanding turnover of more then 3% in equity market, 4% in commodity market and 10% in DGCX.

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h) Transparent and professional management.

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j) Relentless focus on investor care.

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k) World class in-house research facilities providing research support to investors.

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l) All financial products and services under one roof.

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🙂

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Next Blog we would try to read more about the other SMC’s investment products and services.

Stay Tuned for more on this 🙂

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To know more about the SMC Products and Services, click here.

Farmers in Upbeat Mood over Prospects of Commercial Crops

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Farmers in Upbeat Mood over Prospects of Commercial Crops

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Farmers in upbeat mood over prospects of commercial crops

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Vagaries of nature may have dampened the mood of farmers in the district of Guntur in Andhra Pradesh with fears lingering over decrease in the yield, but the first signs in the yield of commercial crops are already indicating towards a record production.

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The prolonged drought which delayed the sowing operations in kharif last year meant that the acreage has decreased by about 20,000 acres.

The year 2008-2009, the paddy yield has shot up to 12.96 MT in 2009-2010.

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The drought, however, seems to have hit the prospects of cotton farmers as the yield had been reduced by 1.25 lakh MT.

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As against the total yield of 6.61 lakh MT in the year 2008-2009, the yield has fallen to 5.36 lakh MT in the year 2009-2010.

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In comparison, chilli farmers are smiling as both the acreage and production have shot up considerably.

The yield has shot up by 40,000 MT and the acreage too has increased by about 40,000 hectares.

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In the year 2008-2009, statistics available with the Agriculture Department showed that, chilli was sown in 63, 628 hectares and the cultivable area went up by 67, 867 hectares.

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🙂

In Other major Commodities Update, there is a news of soyabeans and corn rice rising the most last week and on the other news, sugar prices surging up by Rs 14/kg in Kerala after the subsidy rollback by state govt.

🙂

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Soybeans, Corn Rise Ahead of U.S. Forecasts for Crop Reserves:

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Soybeans rose the most in almost a week on speculation that U.S. crop reserves may be lower than earlier estimates.

Corn and wheat also advanced.

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Soybeans for March delivery rose as much as 13.25 cents, or 1.5 percent, on the Chicago Board of Trade, the biggest intraday gain since Feb. 2.

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The U.S. Department of Agriculture is expected to cut its projection for soybeans reserves before the 2010 harvests to 221 million bushels in a report on Feb. 9, from the 245 million estimated last month, a Bloomberg News survey showed.

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🙂

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Subsidy rollback pushes sugar prices by Rs 14/kg in Kerala:

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Kerala government’s recent decision to stop Rs 28-crore subsidy to its grocery retailing arm Supplyco has pushed sugar prices by around Rs 14 per kg in Supplyco’s outfits.

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Though, sugar prices in state-run shops is still lower than the open market price of around Rs 45 per kg or even Nafed-fixed price of Rs 41 per kg, but low stocks have minimized the benefit of low prices.

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🙂

Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Indian Economy Set to Become World 3rd Largest in PPP Category

Indian Economy Set to Become World 3rd Largest in PPP Category

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According to a latest report by consultancy firm PricewaterhouseCoopers (PwC), India could move into third place in the individual country GDP ranking in the purchasing power parity (PPP) category ahead of  Japan in 2012.

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This report projections stand against the Goldman Sach’s projection of 2032 in its BRIC’s (Brazil, Russia, India, China) report.

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China, which was projected by BRIC’s report to overtake the US as largest economy by 2041, looks set to achieve this by sometime around 2020, the PwC report said.

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“It seems highly likely that by 2030, China will clearly be the largest economy in the world on this measure (PPP), ending over a century of US economic hegemony,” top official of PwC, said in the report.

It said the credit crisis has accelerated the pace at which the emerging economies will overtake the developed ones.

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The report also projected that India is likely to grow faster than China after 2020.

“This is because of India having a significantly younger and faster growing population than China, and also due to it having more catch-up potential as it started from a lower level of economic development than China,” it said.

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However, the report cautioned that India will only realize this if it continues to pursue growth-friendly economic policies of the last two decades.

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As per the report by 2020, it is projected that seven largest emerging economies, E7 (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) would be overtaking the G7 (US, Japan, Germany, UK, France, Italy and Canada) economies.

This will lead to a tectonic shift in the global economic power.

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🙂

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