Posts Tagged ‘bull run’

Bull Run in Commodities May Continue

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

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Bull run in commodities may continue


Bull run in commodities may continue:

Spurt in prices to be driven by dollar weakness, rise in demand and low supplies.

The global bull run in commodities is likely to continue through next year due to dollar weakness, supply restraint and, eventually, a pickup in demand.

Crude oil prices are also up 74 per cent, but the energy complex as a whole is down, as natural gas prices are weighed down by massive oversupply.

Precious metals have also risen 37 per cent.

The base metals complex has performed well this year, driven by the rebound in growth in China, although some of the increased demand has gone into inventory.

Sugar and soybeans have been the exception in 2009, rising sharply while the rest of the agricultural complex underperformed.

This was largely on supply issues; improved crops in 2009-10 are expected to flood the market, dampening prices.

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In Other major Commodities Updates we can read about Govt estimation about the Edible oil output which says that Edible oil output may dip 7.4% in 2009-10.

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Edible oil output may dip 7.4% in 2009-10:

The government today said edible oil output is likely to decline 7.4 per cent to 7.96 million tonnes in the 2009-10.

Edible oil production, last year, stood at 8.6 million tonnes.

Oil season runs from November to October.

Production/net availability of edible oil from all domestic sources is estimated to be 7.96 million tonnes in the 2009-10,โ€ Minister of State for Agriculture K V Thomas said.

The demand of edible oil in the country is estimated to have increased to 17.79 million tones this year, he said.

The domestic edible oil production is likely to decline following a dip in oilseeds production, which is estimated to be 15.23 million tonnes in the kharif season against 17.88 million tonnes in the last season, the official data showed.

Thomas said, โ€œThere is a wide gap in the production and demand of edible oil in the country and imports are resorted to bridge the gap.โ€

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CORN- The Un-discovered Legend Part 2 :)

Hello Friends here we come up with an extension of our previous blog, CORNโ€ฆโ€ฆโ€ฆ. โ€œThe Un-discovered Legendโ€ Part 1

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CORN- The Un-discovered Legend Part 2

In previous Blog we had touched upon few points related to importance of Maize crop in Indian commodity market and its relevance in the context of Indian Scenario ๐Ÿ™‚

In this blog, we would get to know of Potential sources of demand for Maize crops and industrial demand of maize crop. ย ย Also read about the PVO (Price-volume-open Interest) Analysis of the Crop.

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Potential sources of demand:

The apparent increase in consumption demand has been sourced from the preference for corn based food products for human consumption as well as increased use in feed industries.

Human consumption – corn flakes, corn oil, corn flour, etc.,

Feed industry – poultry & animal feed

Ethanol – maize has already proved to be a potential source of ethanol.

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Corn consumption has seen a rapid growth during last few years.

Indeed, consumption patterns have changed at an accelerating pace especially during the winter season; from the time when it has
been introduced in numerous shopping malls around the world in the form of popcorns, baby corns etc.

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Industrial demand:

This commodity has placed itself in an advantageous position & made its presence felt in the industry.

Maize is a key ingredient in animal feed mix, & being the animal feed sector growing at a healthy pace with increasing demand for
meat and milk and milk products, coupled with stagnation in cattle population, there is a rising need to feed the existing population
of cattle with quality feeding.

Therefore, this has opened a window of opportunity for strengthening of global corn prices, which in turn is triggering enormous
demand for Indian maize in the Asian regions.

With the growing demand & expansion of starch sector, the overall demand for maize is likely to grow at a brisk pace.

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Change in % from 2008-09 to 2009-10 (India) Source: USDA

Area Harvested: 11.44%

Beginning Stocks: 51.72%

Production: 0.10%

Total Supply: 1.60%

Total Consumption: -1.1%

Ending stocks: 12.55%

Total Distribution: 1.60%

These positive figures indicate that India has sufficient & comfortable stocks of maize.

In 2009-10 the area harvested (India) is expected to increase by 11.44%, while the consumption is expected to remain almost flat or marginally down in next year.

The ending stocks are also quite high which can pressurize the prices in long term.

In a monthly update on 10th November 2009, USDA cut the corn forecast by 1 percent to 12.921 billion bushels (328 million tonnes).

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PVO (Price-volume-open Interest) Analysis:

Maize futures have proved the old saying โ€œSlow & steady wins the raceโ€.

The prices, volume & open interest in maize futures both in NCDEX & CBOT which had taken a backseat during the beginning of the
year 2009, have been rising again without much volatility in their behaviour.

The prices have been rising from the levels of Rs.795 to Rs.965 during January to November’09, which resulted into bull-run and resultantly futures made a high of 1015 levels on 3rd November ’09, giving a return of 21% till now.

Since the month of March ’09 prices have been seen rising witnessing some corrections during their journey; however factors like
higher international prices & continuous demand from starch & poultry industries have supported the prices.

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Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

 

Mutual fund schemes generally boast about high dividends but mutual fund experts say picking a mutual fund scheme on the basis of its dividend payout may not be the best way to invest in the sector.

As per MF experts, comparing the quantum of dividends paid in short term is not the correct way to measure a fundโ€™s performance.

The proportion of dividend depends on a number of factors, including the frequency of payouts over a certain period of time.

There are funds that have higher net asset value (NAVs) but lower dividends, while others have lower NAVs, higher dividends.

Moreover, many analysts believes that the consistency of dividend payout is important than the quantum of dividend.

Experts always insist investors to not to base their investment decision on the percentage of dividend paid in a short period.

Rather Investors should look for the track record of the fund in this regard over a longer period of time.

After the recent equity market bull-run, many equity funds have declared dividends up to 70 per cent.

So far in October, over a dozen of equity schemes have declared dividends.

Experts are of view that the quantum of dividend paid does not directly indicate the performance of the fund, especially in the short term.

Unlike equities, if a mutual fund scheme pays certain percentage of dividend, NAV of the scheme drops by the same proportion.
If investors go for dividend plans, they most probably miss the compounding opportunities over the long-term for short-term gains.

An Equity head of a mutual fund said โ€œunlike debt funds, where the intention of an investor is to earn dividends on a regular basis, investors in equity funds,ย  do not always look for dividendโ€.

At times, the focus is more on capital appreciation.

Even Fund Managers of reputed firms have maintained quite often that they pay dividends every year irrespective of the market conditions and consistency have always been theirs primary concern not the quantum of dividend.

High Dividends !! Not the Best Way to Judge MF Schemes :)

High Dividends !! Not the Best Way to Judge MF Schemes

High Dividends !! Not the Best Way to Judge MF Schemes


Mutual fund schemes
generally boast about high dividends but mutual fund experts say picking a mutual fund scheme on the basis of its dividend payout may not be the best way to invest in the sector.

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As per MF experts, comparing the quantum of dividends paid in short term is not the correct way to measure a fundโ€™s performance.

The proportion of dividend depends on a number of factors, including the frequency of payouts over a certain period of time.

There are funds that have higher net asset value (NAVs) but lower dividends, while others have lower NAVs, higher dividends.

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Moreover, many analysts believes that the consistency of dividend payout is important than the quantum of dividend.

Experts always insist investors to not to base their investment decision on the percentage of dividend paid in a short period.

Rather Investors should look for the track record of the fund in this regard over a longer period of time.

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After the recent equity market bull-run, many equity funds have declared dividends up to 70 per cent.

So far in October, over a dozen of equity schemes have declared dividends.

Experts are of view that the quantum of dividend paid does not directly indicate the performance of the fund, especially in the short term.

Unlike equities, if a mutual fund scheme pays certain percentage of dividend, NAV of the scheme drops by the same proportion.
If investors go for dividend plans, they most probably miss the compounding opportunities over the long-term for short-term gains.
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An Equity head of a mutual fund said “unlike debt funds, where the intention of an investor is to earn dividends on a regular basis, investors in equity funds,ย  do not always look for dividend”.

At times, the focus is more on capital appreciation.

Even Fund Managers of reputed firms have maintained quite often that they pay dividends every year irrespective of the market conditions and consistency have always been theirs primary concern not the quantum of dividend.

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Coming ‘Diwali’ – Gold Prices Set to Reach Over, Rs 16,000 level :)

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

After taking a brief consolidation, gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before ‘Diwali’.

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According to experts, gold prices have declined for a short period last week as the precious metal dipped following a counter rally taken by the dollar.

However, the US dollar index has again started showing weakness and today dipped by 0.6 per cent at 76.54 level, which will be positive for the gold price, SMC Global’s Rajesh Jain said.

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He said gold is likely to reach 1,020 dollar an ounce (28.34 grams) level in the international markets before ‘Diwali’.

However, in the domestic market the rising trend is likely to be capped with strengthening of Rupee against the US dollar, he added.

In the domestic market the prices are likely to be slightly over Rs 16,000 per 10 grams level, Jain said.

He said, the Rupee will keep on strengthening as the equity markets are performing well, which will encourage the Foreign Institutional Investors (FIIs) to bring in more money.

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Today, the gold was trading at Rs 15,585 per 10 grams, while in the global markets it was at $1,001 an ounce.

Meanwhile, independent analysts have remarked that the bull run in gold will continue as the various monetary and fiscal stimulus programs have failed to boost the world economy, feeding through to a dis-inflationary conditions.

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The US dollar, which is considered a safe haven, softens due to the weakening economic condition.

As dollar declines, many investors and central banks continue to hold gold as their safe haven to protect themselves from unforeseen global economic shocks, boosting the demand for the yellow metal.

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Exit Bharti Airtel: SMC Global

an Interview with Rajesh Jain

Excerpts from an Interview with Rajesh Jain, Research Head of SMC Global.

Rajesh Jain of SMC Global giving a technical perspective about the market moves, portfolio and related factors.

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Q. I hold a few Bharti Airtel shares @ Rs 428. What should I do?

Jain: The stock is good. It had a fantastic run since 2004, but after the bull run, it underperformed. If you are a long-term investor, you should diversify and invest in infrastructure. ๐Ÿ™‚

Q. I hold 100 Tata Motors shares @ Rs 305. Should I hold?

Jain: I think you should book profits, because it will take some time for the company to pick up volumes and come out of its interest burden.
For that, there should be a revival in the overall market.
Till that time, I donโ€™t think the company will be able to compete with players like Maruti and Mahindra & Mahindra.

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Q. I hold a few Adani Enterprises shares @ Rs 820. My investment horizon is 5 years. Should I hold?

Jain: You need to have a lot of patience. I would say keep some stop-losses and diversify your investment. ๐Ÿ™‚

Q. I have 500 Indiabulls Real Estate shares @ Rs 245. What should I do?

Jain: For this stock, Rs 250-260 is a good resistance zone. On the lower side, Rs 220-230 is a good support zone.
It is consolidating between these levels.
The day it closes above Rs 260, you can set a target of Rs 290.
On the lower side, if it breaches Rs 220, it will be bad.
So, keep a stop-loss of Rs 220 and wait for a target of Rs 290.

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Q. I hold 2000 Ispat shares. What should I do?

Jain: I am not so buoyant about Ispat. Though we have seen a bull cycle for four years and a correction for two years afterwards, this is one stock which has not moved up too much.
Big companies like SAIL have not shown too much of a strength either.
If the giants have not shown good performance, I donโ€™t think companies like Ispat can show better results.
Performance-wise also, it has accumulated losses.
It needs a lot of time to come out of the accumulated losses.

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Q. What should I prefer? RIL or Tata Steel?

Jain: I will go for Tata Steel, because the commodity bull cycle is going on, and, as commodity guru Jim Rogers says, the next cycle is commodities.
In the short term, RIL may be able to do well and Tata Steel may not do that well.
Overall, I am bullish on commodities. I think Tata Steel would be a better bet. ๐Ÿ™‚

Q. I hold 500 Indian Hotels shares @ Rs 79. My investment horizon is 1-2 months. What should I do?

Jain: This stock is a defensive play.
When the market is in an aggressive mode, defensive stocks generally lag around.
I would say you will have to wait till the Rs 79 levels. It has a huge resistance at the Rs 80 levels. You need to have a lot of patience with this stock. ๐Ÿ™‚

Q. I have short listed Nestle, Hero Honda, L&T. Where should I put my money?

Jain: These are excellent companies.
I would suggest you to go for all the three as they will beat inflation and you will get good returns in the long term. ๐Ÿ™‚

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Q. Can you guide me through some auto ancillary stocks?

Jain: The segment has started showing revival. I think one can go for Sona Koya.

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Source : http://www.utvi.com/stock-market/stock-market-news/28377/exit-bharti-airtel–smc-global.html