i Develop Stocks Advisory

We @ iDevelop Research sets Sensex target 30 K in 2008

Endorsing our economists view that interest rate cut is really harmful for US currency, a Chinese finance official wrote in a commentary Thursday in an official newspaper that Further cuts in U.S. interest rates would have a "harmful effect" on the dollar and the international finance system.

The dollar's fall against many currencies has prompted investors to sell dollar-denominated assets, Hu Xiaolian, director of the State Administration of Foreign Exchange, wrote in the Financial News, a newspaper published by the central bank.

"If the (U.S.) federal funds rate continues to fall, this will certainly have a harmful effect on the U.S. dollar exchange rate and the international currency system," Hu wrote.

Financial markets closely watch official Chinese comments on the dollar because Beijing keeps a large portion of its $1.4 trillion in reserves in U.S. Treasury securities and any change in China's investment strategy could affect exchange rates.

Despite his warning, Hu wrote, "the U.S. dollar's dominant position in international currency markets is unlikely to change in the near term."

The U.S. Federal Reserve has lowered its federal funds rate, the interest that banks charge each other for overnight loans, to 4.25 percent, a full percentage point lower than it was in September, to ease a credit crunch in the U.S. financial system.

Chinese officials have said that cutting the rate could encourage investors to move money to Asia or elsewhere in search of better returns, which could depress the dollar.

We therefore continue to believe that Rupee is heading to 35 in next 12 months hence avoid going long in tech stocks. This view has now been echoed by a foreign broking house siting rupee peg rate at 33 in 12to 18 months. It is well known in the industry circles that Infosys, TSC and Wipro have fully geared up to tackle with rupee 33 levels which tosses the probability of in favour of at least 35.

This is more significant to assess the destination of Indian capital market. If rupee is slated to rise to 35 levels and foreign funds started to believe this then the flow of funds in the coming months will exceed 2007’s flow by at least 3 times.

The precise reasons for expecting huge inflow are ……

Thailand not doing well and the unrest in Pakistan gives rise to the oil tensions and as result there will be flight of capital from GULF regions which is cash flush.

US economy though for sure has bottomed out and heading for 16000 DOW in just next 3 to 6 months, will not give as much returns as India is giving and hence FII would pull in more money in India.

The FUND psychology is that invest in stock which has outperformed rather than performing one similarly invest in a country which has outperformed rather in performing one. India fits in that category. Though Sensex has performed smartly the individual stocks have really out numbered the performance of Sensex.

There will be first time departure of huge allocation to India which will be 50% higher than earlier years from the funds which were hugely affected by sub prime in US. The ROI in India is so great that the hopes of mitigating entire losses only from India is not ruled out.

Apart from the same, on domestic front 2 losses in Gujarat and Himachal Pradesh and a probable loss in Rajasthan makes Indian politics a good case of stability. Ruling party as well as LEFT would stay cool for the remainder period which offers a good platform for 2008.

The reflection of good monsoon will start visible from JAN and very soon the GDP projections of 10% will feel visible like the way the revenue targets set by the Indian Finance Minister. Farm growth is likely to exceed 5% by March 08 and Budget will find more provisions to target the same at 6% next year. The day is not far when we can see 7 to 8% farm growth. This will lead to more GDP re rating.

The huge inflow have opened the flood gates of infrastructure in India which will lead a massive rise in per capital income at macro level which in turn give boost to savings as well as domestic consumption cycle.

We have reasons to believe that funds expected to creep in this fiscal could be as high as 35 bn USD which is sufficient to take the Sensex to 30 K even on expanded base of 20 K.

The statistics suggest that only 1% of Indian population invest in equity so far which we think will rise to at least 3% by 2010 which means the savings will travel into capital market from every nook and corner. We had predicted 2 years back that daily turnover will ride over Rs 1 lac crs which has now become realty and we pledge on the volumes rising to 2 lac crs in another 2 years which is just not possible if the 3% criteria is not met. In fact, this is the reason the broking is getting huge valuations which is really unprecedented but fact remains. Investors should really look at investment opportunities portals such as travel, finance, marketing, retail, c to c and b to b which will give stunning returns in next 3 years.

The level of domestic consumption is becoming aristocrat tipping point which is making all MNC especially US and Japanese to go ahead and sign with Indian partner however small he is because they have learn only one thing that there is no way to capture Indian market on its own in the shortest possible time and hence enter through vehicles.

This is boosting the confidence level of Indian industrialists which is visible from huge capex lined up in various sectors. The impact of the capex is yet to be felt.

The bottom line is if 20 K was the answer of 2007 30 K could be of 2008 and the sectors will be capital goods, power, power equipments, civil aviation, auto, auto ancillary, metal, mining, media, print media, research firms, insurance , internet content firms , realty, glass, education, gas distribution, road and port logistics, seeds, fertiliser, sugar etc

Sectors to avoid are cement, tech, textile, only export dependent cos.

We were first to set target of 16 K in June 2006. We were also first in setting target of 20 K in 2007 and now when 3 firms have set targets of 22600, 24000 and 25000 we are again first to set the target of 30000. RPL will be out pick of the stock…….

We wish you our entire members a very warm and happy new year 2008 in advance and our paper on vision 30K will help lot of investors and members to take their individual calls on market. We will be adding major value in our research products either in I DEVELOP or its subsidiaries to server you better in 2008. Our management is also thankful to the entire team of I Develop, its associates, bankers, channel partner, content outsourcers, Institutional clienteles for supporting us and our team and wishes them HAPPY NEW YEAR.

Sparkling 2008 ahead.....

Market is set to enter in new Bull orbit. Our team has made another first by setting 30 K target on Sensex and now street can’t take us lightly. We are here to prove the mettle. IFCI which was the much discounted story in the last vallan and our S C team was holding their nerve cool even though the stock was plummeted by almost 30% in no time. Stock recovered by whopping 20% and on its course to fill the full vacancy.

We have issued the report with precise reasoning. Our best stocks for 2008 are RIL, REL, RPL, RNRL, IDBI, IFCI, NTPC, Petronet LNG, Arvind Mills, Bombay Dyeing and SBI are our favoured stock which will help reaching our destination of 30 K.

In cash, MINDA, Accurate, Vishnu, Kesar, RDB, Network, Stelco, Bihar, Neha, Vipul, Dhampur, Avantal, SS Duncan, Triveni Glass, Landmarc, Asian Oil, Rainbow Paper, Rama Paper, Videocon, HEG, Kernex Micro, APW, EVINIX, Triton Corp are some of the best stocks in value pick, Safe Heavens segment.

Mid cap rally will be on in 2008. large cap will move on its own whereas small cap which is the real buzz on the street can’t move without I DEVELOP call on the same. We shall be covering virgin stocks in small caps HRHR through talk so that unwanted nuisance from critics can be avoided. Already the bisection of MB section into 4 categories is designed to deal with such people so that one can pick the stock of their choice.

Lot of investors has also rushed their mails for BONUS credits. All the bonus shares have been credited to their accounts and the delay was on account of approvals from the statutory authorities.

We maintain our bias whether street maintain or not. We have more than 35 items pending in our research wing which will be real block busters in 2008. Our M B team will unleash one after the other research stories in this section. We have issued buy call on Neha International today. The research reports of Neha, Asian Oil and Bihar Tubes are released in Institutional desk. We may make available the same on request and for costs.

We at I DEVELOP wish all of you a very happy and prosperous new year 2008 and would like to share only one rock solid research tip for 2008 i.e HEG heading for Rs 2500 in just 6 months on its power story. I think this will make your yearly subscription free however small is the qty.

"The most important tribute any human being can pay to a poem or a piece of prose he or she really loves ... is to learn it by heart. Not by brain, by heart; the expression is vital.

Finance Minister expects more bids for IFCI

Finance Minister P Chidambaram on Saturday backed state-run lender IFCI's decision to reject a bid from a consortium of Sterlite Industries and Morgan Stanley and said he expected more offers to come in when the bidding process starts again.

"We got a single bid, a conditional bid. Therefore, IFCI rejected the single, conditional bid. And in my view that's a correct decision," Palaniappan Chidambaram told reporters on the sidelines of an event in Bangalore.

IFCI Ltd's shares had plunged more than 23 per cent on Dec 20 after its board turned down an offer from the consortium led by Sterlite Industries to buy a 26 per cent stake. The shares have dropped more than 18 per cent since IFCI announced the rejection of the bid, but are still up 575 per cent this year.

"I am sure when a rebid process starts, there will be more bidders," Chidambaram said. He declined to comment on when the rebid process would start and said IFCI's board would take a decision on this.

Market will explode…..

Market opened with 200 points and went up 100 points and the whole day see saw was seen. For me the movement was not extra ordinary. There were rumors that Rajasthan bound plane was high jacked and circles close to RIL gr are selling RIL shares etc. These are always part of market rumours and come when market is falling. It is better to ignore these rumors.

Even our I T wing suggest that very small amount of selling had happened in RIL gr shares but it will not deter the RIL gr shares from rising because next 45 days market will remain hot and boiling due to money raising exercise. First day if market falls I would be happiest the person because this gives confirmation of further rally as the market makers get what they want when markets are falling.

First target is now 6400 and only after crossing 6400 I will set new targets. RIL 3200, REL 2700 Rel Cap Rs 3000 RNRL 350 RPL 400 will have to see the light of the day before the rally in 2008 could see a reversal. At present more than 16 bn SUD and another 15 bn USD through fresh allocation is seen which will keep market rocking. Monday is the last of NAV for FII and therefore there could be big action in NAV counters. In fact, if you see from block deals on NSE it was visible that portfolio churning from one scheme to another has happened in a big way today. Well, there is a question of bonus. Don't even think to go short in this Bull run though there will be corrections now and then and use every dip to add more.

One again I would want to say that the stocks which we select in S C section and set the targets are delivery targets and hence do not take it lightly even if we remove the call. Traders must follow S C team strictly whereas investors (safe heaven) may pick value calls from S C calls. Only thing you will have to pay SC charges instead of M B charges. We had selected VSNL at 515 and now see the price. Same thing is with Bajaj Hindustan, DLF, OBC, IOC, SBI, REL etc. The latest example is DLF. We had set target of 1140 and it as touched 1063 and we are sure it will cross Rs 1140. Same thing is applicable in cash stock. See the stock ANIL SPL steel which was our find it is flying. There are n no of stock you see the originator and only one word will find is I DEVELOP….….

Suddenly huge action has started Triveni Glass reportedly for its land bank which is wide spread form old Allahabad Varanasi highway to new proposed Ganga Express Highway. Also reports of international airport touching this plot are sanctioned. This augurs well for Triveni Glass. However investors who are afraid to hold shares for longer period of time must excuse at least his stock because it is not your cup of tea. We have vested interest in the stock since last 3 years hence request investors to take their own call.

Bihar Tubes, Asian Oil and Stelco all performing well though major action in Stelco is yet to happen.

The most beautiful thing in the world is, of course, the world itself