Indian stocks: What to enter and what to exit

The markets opened with modest gap up today on account of some buying seen in the Sensex heavyweights like SBI, Reliance, ONGC and Infosys. Market breadth was seen positive.Sensex was up 80 points at 14009 and Nifty was up 20 points at 4140. Experts who spoke to CNBC-TV18, had Banking, Steel and Sugar sectors foremost on their minds. Here's how they view the sectors:

Sugar Sector

Sugar sector has been news for quite some time owing to the political upheaval in Uttar Pradesh. On sugar, Anand Tandon of Gryffon Investment Advisors says that there are no fundamental reasons to buy sugar yet. “There could be political reasons and some expected sops but that aside, the companies cannot make money on selling sugar at least in the near-term”

Sudarshan Sukhani of Technical Trends is long on Bajaj Hindustan and Balrampur Chini. He believes that the ideal time to buy is when the sector is in the dumps and when all fundamental analysts will say that sugar will never go up. However he adds that “This is not a trading call, this is something that I am looking at for the next one or two years”

Steel Sector

On this sector Anand Tandon feels that the outlook is somewhat mixed with the international prices being reasonably firm and the general outlook of the companies also continuing to remain firm. “From that point of view maybe there is a reason to hold on to some of these stocks but you have to remember that all said and done, it is a cyclical industry,” warns Tandon.

However, Atul Suri of Marathon Trends puts his bet on this sector. "I think steel has been one of the really quiet performers, no one talks about it but lot of wealth has been created" he states.

Banking Sector

Banking is another sector which have been doing well for the past few trading sessions. Q4 numbers from the banking industry were in line with street expectations. Net interest income and net profit for the banking sector as a whole increased by 25% and 15.3% respectively in Q4 FY07. A lot of people have been arguing that more value is found in PSU banks right now and for the first time people have started believing that it is better place to be in than private sector banks.

Anand Tandon seconds this thought saying that the PSU banks have had the biggest knock and therefore suffered the most with the fears of interest rates going up. “From that point of view therefore offer significant value” The private sector banks on the other hand will be in play over the next few quarters as it becomes clearer that some of the international players maybe allowed to invest in India.

Sudarshan Sukhani feel that the charts of the private sector banks suggest that the final up moves are still to come. Though he adds that "I am a big fan of PSU banks so to me all the charts looks good,”

Media sector

Lately there has been a lot of activity in the media and entertainment sector. With Brokerage firms like UBS are betting on the Indian media sector, they feel that the Indian media stocks will continue to trade at premium valuations, given their high growth potential over the long term and strong growth in the near to medium term.
Anand Tandon feels that valuations are not cheap but looking at growth, the valuations have to be factored in and the numbers, which are fairly large, will take some years from now. That is what the media companies are reflecting at this stage.

Tehran Stock Exchange ( TSE)

The idea of having a well-organized stock market and to speed up the process of industrialization of the country dates back to 1930's when Bank Melli Iran started a study about the subject. A report completed in 1936 worked out the details for the formation of a stock market and laid down the preliminary foundation to proceed with the plan.
The outbreak of the World War II and subsequent economic and political events delayed the establishment of the stock exchange upto the year 1967 when the Stock Exchange Act was ratified.

The Tehran Stock Exchange opened in April 1968. Initially only Government bonds and certain State-backed certificates were traded in the market. During 1970's the demand for capital boosted the demand for stocks. At the same time institutional changes like the transfer of shares of public companies and large private firms owned by families, to the employees and the private sector led to the expansion of the stock market activity. The restructuring of the economy following the Islamic Revolution expanded public sector control over the economy and reduced the need for private capital. At the same time the abolishment of interest-bearing bonds terminated their presence in the stock market. As a result of these events, Tehran Stock Exchange started a period of standstill.

This stop came to an end in 1989 with the revitalization of the private sector through privatization of state-owned enterprises and promotion of private sector economic activity based on the First Five-year Development Plan of the country. Since then the Stock Exchange has expanded continuously.
The TSE Council is the highest authority in the stock exchange. State officials as well as the private sector representatives and specialists are members of the Council. The Governor of the Central Bank presides over the Council. Other constituent organs of TSE are Acceptance Committee, Arbitration Board and Brokers Organization. The Board of Directors of the latter is the highest policy-making authority in TSE and appoints the secretary general as the chief executive officer, CEO, for a period of two years. Re-appointment is permitted without any restriction. There are two Senior Deputies acting under the Secretary General who are responsible for economic and technical affairs and administration and finance respectively.

Trading in TSE is based on orders sent by the brokers.
Trading hours are 09:00-12:30 Saturday to Wednesday, with the exception of public holidays. A CDS is operating in TSE and clearing process is automated.
TSE Services Company, TSESC, who is in charge of computerized site, supplies computer Services. Presently,TSE trades mainly in securities offered by listed companies. The introduction of project-based participation certificates that bear a fixed annual return during the period of the project and promise the final settlement of the profit at the date of its completion, has diversified the market.
TSE is a full member of FIBV, a founding member of Federation of Euro-Asian Stock Exchanges (FEAS). TSESC is a member of ANNA

Top 10 Proven Oil Countries

10.Nigeria - 35billion of barrels
Nigeria is the largest oil producer in Africa, and is a major oil supplier to both the United States and Western Europe. Proven oil reserves are expected to be expanded to 40 billion barrels by the year 2010.

9. Libya - 39billion of barrels
Though sanctions against Libya had been removed by United States President Bush and also by The United Nations, some Libyan authorities caution foreign optimism about prospects in the country's socialist driven economy. Nonetheless, the removal of sanctions allows Libya to drive forward.

8. Russia - 60billion of barrels
Russia has the world's largest natural gas reserves, the second largest coal reserves, and the eighth largest oil reserves. The country is the world's largest exporter of natural gas and the second largest oil exporter. Reorganization of the Russian Energy Sector has shown improvements in the industry over the last few years.

7. Venezuela - 79billion of barrels
According to the Oil and Gas Journal (OGJ), Venezuela has 77.2 billion barrels of proven conventional oil reserves, the largest of any country in the Western Hemisphere. In addition it has non-conventional oil deposits similar in size to Canada's - at 1,200 billion barrels approximately equal to the world's reserves of conventional oil. About 267 billion barrels of this may be producible at current prices using current technology.

6. United Arab Emirates - 97bilion of barrels
At one time an underdeveloped region, by 1985 the UAE had the highest per capita income in the world. The largest areas of petroleum production occur in two of the seven constituent parts of the UAE; these being Dubai and Abu Dhabi. Abu Dhabi qualifies as a oil state in the same sense as Kuwait.

5. Kuwait - 102bilion of barrels
Kuwait hopes to step up oil production to reach capacity of 4 million bbl/d by 2020, but since Burgan was found in 1938 and is getting very mature, this will be a challenge. Furthermore, according to data leaked from the Kuwait Oil Company (KOC), Kuwait's remaining proven and non-proven oil reserves are only about half the official figure - 48 gigabarrels.

4. Iraq - 115bilion of barrels
Iraq has the fourth largest reserves of conventional oil in the world at 112 gigabarrels. Despite its vast oil reserves and low costs, production has not recovered since the US-led 2003 invasion of Iraq. Constant looting, insurgent attacks, and sabotage in the oil fields has limited production to around 0.5 gigabarrels per year at best. Political risk is thus the main constraint on Iraqi oil production and likely to remain so in the near future.

3. Iran - 126bilion of barrels
Iran has the world's second largest reserves of conventional crude oil at 133 gigabarrels, according to the CIA World Factbook, although it should be noted that both Canada and Venezuela have larger reserves if Non-conventional oil is included. Iran is the second largest oil holder globally with approximately 10% of the world's oil.

2. Canada - 179bilion of barrels
Canada's Athabasca Oil Sands Project is what puts Canada on the map in this list. Current surface mining techniques and in-situ methods to extract bitumen from the oil sands make for an overwhelmingly positive future for Canada's oil industry.

1. Saudi Arabia - 264bilion of barrels
With one-fourth of the world's proven oil reserves and some of its lowest production costs, Saudi Arabia produces over 4 gigabarrels of oil per year and is likely to remain the world's largest oil exporter for the foreseeable future. However, there are serious political risks involved in Saudi Arabian domination of the world oil market. In spite of recent increases in oil income, Saudi Arabia faces serious long-term challenges, including rates of unemployment of at least 13 percent, one of the world's fastest population growth rates (its population has tripled since 1980), and the need for political and economic reforms. According to the Oil and Gas Journal, Saudi Arabia contains 262 gigabarrels of proven oil reserves, around one-fourth of proven, conventional world oil reserves. Although Saudi Arabia has around 80 oil and gas fields, more than half of its oil reserves are contained in only eight fields, and more than half its production comes from one field, the Ghawar field.

Oil prices end down after stock market fails to rebound

Oil prices end down after stock market fails to rebound

Oil prices settled lower Friday as traders watched the stock market decline even further, renewing concerns that economic growth may stall.

The tenuous stock market saga overshadowed tightening gasoline supplies that helped push oil's Thursday settlement price to a more than two month high.

Light, sweet crude for April delivery fell 36 cents to settle at $61.64 a barrel on the New York Mercantile Exchange. Earlier, the contract fell to an intraday low of $61.35 after the Dow Jones industrials dropped by more than a 100 points. The Dow was trading at 12,158.08, down 76.26 points, in afternoon trading.

Brent crude for April lost 3 cents to settle at $62.08 a barrel on the ICE Futures exchange in London.

“Oil is a horse that wants to break out of the gate, but can't until the stock market figures itself out,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Tim Evans, an energy analyst with Citigroup Futures Research, pointed out that trading was light on Friday and most investors typically don't take on new positions ahead of the weekend.

“I think the stock market is one issue among many,” Evans said. “Certainly, as a comparison, the oil market is showing good underlying strength in the face of a weak stock market and commodity markets.”

On Thursday, crude oil rose 21 cents to settle at $62 a barrel – its highest settlement price since Dec. 22 – following a rally in gasoline futures, which rose on reports of a glitch at a Valero Energy Corp. refinery. Valero said operations at its Port Arthur, Texas, refinery were normal, despite the reported outage of a unit.

Gasoline failed to hold onto gains it made on Thursday and slipped less than a penny to settle at $1.9018 a gallon.

Market participants were also focusing on the outlook for gasoline supply entering the peak spring and summer driving season. Problems at U.S. refineries have reduced output and cut into petroleum product supplies.

On Wednesday, the U.S. Department of Energy reported that stockpiles of gasoline and distillates, which include heating oil and diesel fuel, dropped last week by a larger amount than analysts had forecast. Meanwhile, demand for products over the last four-week period rose by 7.5 percent from the same period last year.

U.S. crude inventories climbed 1.4 million barrels to 329.0 million barrels last week. But gasoline inventories fell by 1.9 million barrels to 220.2 million barrels, and distillate inventories fell by 3.8 million barrels to 124.5 million barrels.

Worries over Iran's persistent refusal to suspend its nuclear program remain on oil traders' minds too, analysts said.

“There's a lot of focus on what's happening with Iran. Tensions over any possible sanctions are obviously positive for oil prices,” said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney.

Washington is pushing for tougher U.N. sanctions on Tehran over its failure to comply with demands to halt its uranium enrichment program that the West fears could be used to build a nuclear weapon. Although the United States has said it has no plans to strike Iran militarily, it has also refused to rule out any option.

In other Nymex trading, heating oil futures fell nearly a penny to settle at $1.7682 a gallon, while natural gas prices fell 4.5 cents to $7.243 per 1,000 cubic feet.

By J.W. Elphinstone ASSOCIATED PRESS