shareBazar: September 2016

Friday 30 September 2016

{LONGTERMINVESTORS} TVSMOTOR & DISHMAN

TVSMOTOR AND DISHMAN HIT NEW HIGHS

{LONGTERMINVESTORS} Indian Share Market – 3 Stocks Worth Watching on 3 Oct 16

Link to the Article - Indian Share Market – 3 Stocks Worth Watching on 3 Oct 16

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{LONGTERMINVESTORS} Re: Why Rattan India Infrastructure could potentially double from CMP of Rs 3.25 just on basis on Outcome of SAT regarding the open offer

Well made article sir. In-depth analysis. Kindly share other of your articles, particularly in small-cap space, if possible.

Thanks...

H.Venkat

On Friday, September 30, 2016 at 9:19:36 AM UTC+5:30, aditya wrote:

Why Rattan India Infrastructure could potentially double from CMP of Rs 3.2 just on basis on Outcome of SAT regarding the open offer -Risk limited to Rs 3.2 (original open offer price)
Let me put a strong Disclaimer that this is neither a Recommendation and please study before making any investment decision. This note is written primarily to share developments which are shared neither by SEBI nor the Company.
One must appreciate SEBI for pulling up one of India's influential promoters to abide by the law. SEBI has issued observations and going by SEBI's Takeover Rules it looks in all likelihood that they would have to issue a premium of close to 100% to existing open offer.
The SAT meeting which was scheduled for 1st July 2016 had been pushed to to 29^th July and further deffered to 25th August. Meeting to be held today 30th September 2016.
In October 2015 promoter crossed the 5% threshold and announced open offer to acquire 26% stake at Rs 3.2 and SEBI pulled them up for prior transfers all pointing towards not being eligible under regulation 10(1)(a)(ii). I am not privy to the observations issued on 5^th May as it's not yet available as a public document but am extrapolating the data. The same was appealed at SAT and a hearings have been deffered twice
Before the Final observations were issued – the Comment section read - Being examined with respect to prior inter se transfers amongst promoters(one can check that on SEBI'S website for pending Issues February)
FINAL OBSERVATIONS ISSUED FOR DRAFT OFFER DOCUMENTS DURING THE FINANCIAL YEAR 2016-17 AS ON May 13, 2016
http://www.sebi.gov.in/cms/sebi_data/commondocs/Finalobservationsmay132016_p.pdf

Recent SAT Update: September 2016
As per the manager to the offer (Motilal Oswal) SEBI had asked for an extension to the hearing date which was scheduled on 1^st July 2016 has since been rescheduled to 29^th July and further deffered to 25th August. SEBI had close to 2 months (5th May observation) to respond yet it asked for an extension was a big surprise as SEBI has been clear in several cases relating to Regulation 10(1)(a)(ii).
Meeting to be held today 30th September

Before you read further a bit about the company- Rattan India Infrastructure is a holding company of Rattan India Power holding a stake of 40.13%. There have been issues with the MSEDCL with regard to the Nasik plant from a couple of years. Fresh development indicates trouble for the Amravati plant as well which was generating power at high PLF's from the last 3 quarters. The entire capacity is down for the entire month of July, due to low off take even though Maharashtra government continues to add Renewable energy at 50% premium to existing long term PPA's

But this pertains to the Holding company .Let me come down straight to the Details of this Open offer.

In July 2014 India bulls Promoters Split and the power vertical were acquired by Rajiv Rattan There were inter-promoter trades at Rs 6.3 and at Rs 5.95 on NSE, BSE as well off market trades.
As per SEBI Takeover Code (refer page 22 on SEBI Takeover)

General exemptions- 10 (1)
The following acquisitions shall be exempt from the obligation to make an open offer under regulation 3 and regulation 4 subject to fulfillment of the conditions stipulated therefor,—

(a)    acquisition pursuant to inter se transfer of shares amongst qualifying persons, being,—

(i)                   immediate relatives;
(ii)                  persons named as promoters in the shareholding pattern filed by the target company in terms of the listing agreement or these regulations for not less than three years prior to the proposed acquisition;
(iii)                 a company, its subsidiaries, its holding company, other subsidiaries of such holding company, persons holding not less than fifty per cent of the equity shares of such company, other companies in which such persons hold not less than fifty per cent of the equity shares, and their subsidiaries subject to control over such qualifying persons being exclusively held by the same persons;
(iv)                persons acting in concert for not less than three years prior to the proposed acquisition, and disclosed as such pursuant to filings under the listing agreement;
(v)                  shareholders of a target company who have been persons acting in concert for a period of not less than three years prior to the proposed acquisition and are disclosed as such pursuant to filings under the listing agreement, and any company in which the entire equity share capital is owned by such shareholders in the same proportion as their holdings in the target company without any differential entitlement to exercise voting rights in such company:
OR
Exemptions by the Board. 11.
(1) The Board may for reasons recorded in writing, grant exemption from the obligation to make an open offer for acquiring shares under these regulations subject to such conditions as the Board deems fit to impose in the interests of investors in securities and the securities market.
(2) The Board may for reasons recorded in writing, grant a relaxation from strict compliance with any procedural requirement under Chapter III and Chapter IV subject to such conditions as the Board deems fit to impose in the interests of investors in securities and the securities market on being satisfied that,—
(a) the target company is a company in respect of which the Central Government or State Government or any other regulatory authority has superseded the board of directors of the target company and has appointed new directors under any law for the time being in force, if,— (i) such board of directors has formulated a plan which provides for transparent, open, and competitive process for acquisition of shares or voting rights in, or control over the target company to secure the smooth and continued operation of the target company in the interests of all stakeholders of the target company and such plan does not further the interests of any particular acquirer; (ii) the conditions and requirements of the competitive process are reasonable and fair; Page 31 of 65 (iii) the process adopted by the board of directors of the target company provides for details including the time when the open offer for acquiring shares would be made, completed and the manner in which the change in control would be effected; and
(b) the provisions of Chapter III and Chapter IV are likely to act as impediment to implementation of the plan of the target company and exemption from strict compliance with one or more of such provisions is in public interest, the interests of investors in securities and the securities market.
(3) For seeking exemption under sub-regulation (1), the acquirer shall, and for seeking relaxation under sub-regulation (2) the target company shall file an application with the Board, supported by a duly sworn affidavit, giving details of the proposed acquisition and the grounds on which the exemption has been sought.
(4) The acquirer or the target company, as the case may be, shall along with the application referred to under sub-regulation (3) pay a non-refundable fee of rupees fifty thousand, by way of a banker's cheque or demand draft payable in Mumbai in favour of the Board.
(5) The Board may after affording reasonable opportunity of being heard to the applicant and after considering all the relevant facts and circumstances, pass a reasoned order either granting or rejecting the exemption or relaxation sought as expeditiously as possible: Provided that the Board may constitute a panel of experts to which an application for an exemption under sub-regulation (1) may, if considered necessary, be referred to make recommendations on the application to the Board.
(6) The order passed under sub-regulation (5) shall be hosted by the Board on its official website.

Now where does all this fit in with RattanIndia?
Rattan India Infrastructure listed via a demerger from India bulls Real-estate – Record Date being 8^th December 2011. – So even considering Record date - does not comply with the 3 year SEBI Rule for exemption.

http://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20111129-5

Therefore Promoters were not eligible for exemptions under Regulation 10 (1)(a)(ii) of the Takeover Code and were bound to make an open offer at Rs 6.3.
Considering the delay Open offer should logically include the interest for 2 years.

Now SEBI Has passed several views by Interpretative letters in Cases of Inter -promoter transfer quoting – Regulation 10(1)(a)( ii)
1)      Elder Pharma - http://www.sebi.gov.in/cms/sebi_data/commondocs/elder_sebi_15042015_p.pdf

2)      CEBBCO – Was newly listed IPO – Promoters held shares for more than 3 years but could not comply with the 3 year rule as per 10(1)(a)(ii) as the company was listed only two years prior http://www.sebi.gov.in/cms/sebi_data/commondocs/commercialsebiletter_p.pdf

3)      Nitesh Desai Associates take on CEBBCO - http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-single-view/article/inter-se-transfer-between-promoters-no-exemption-in-the-first-three-years-after-listing-says-seb.html

So if Rules as per Regulation 10(1)(a)(ii) are strictly implemented Open Offer should be at either Rs 6.9 or Rs 7.5 (Rs 6.3 trigger price +considering interest for one year or two years as July 2014 to date is 2 years)

I may be biased as I have been holding shares well before the open offer was announced and have kept buying recently as well.
I may be wrong. The above data links to SEBI reports can be analysed before making any investment decision. There always exists a loop hole. I have tried finding it, but not been able to.
The promoter currently owns 62% and considering the size of open offer 26% is bought at his intended price of Rs3.2 – Downside seems Restricted to Rs3.2 – Refer shareholding pattern below. Laurel,Yantra Arbutus belong to Rajiv Rattan group. In a worse case situation it could even go to zero if production does not resume at Amravti so please keep that important issue in mind and SAT Allows deferment on Meetings as the original meet has been postponed over 5 times in last 4 months.
CLETA Builders is an Interesting name which figures in June Shareholding Pattern linked to ex promoter Mr Mittal.

{LONGTERMINVESTORS} Nifty forms double bottom, Will it hold after RBI Policy

FII's sold 21.8 K contract of Index Future worth 1379 cores ,21.6 K Long contract were liquidated by FII's and 0.2 K short contracts were added by FII's. Net Open Interest decreased by 21.3 K contract, so rise in market was used by FII's to exit long and enter shorts in Index futures. Where learning ends, beginning of practice happens and that is transformation !!

As discussed last Analysis As we have Weekly Monthly and Quarterly closing bears will like to see Nifty close below 8518 and bears bulls will like a close above 8656. Close below 8518 can see fast move towards 8476/8434. Bullish on close above 8656 only. Nifty made a low of 8555 forming double bottom and also protecting 8518 on

Continue Reading

Rgds,

Bramesh

{LONGTERMINVESTORS} Bank Nifty October Series Outlook

As discussed in Last analysis As seen in below charts, break of 19096 can see fast fall towards 18846 and 18500 in short term. Bullish only on close above 19450 only. Low made was 19085 and we saw quick recovery, but Bulls are not out of woods, Bulls need a close above 19451 for target of 19732/19811. Only on close above 19811 Bank nifty can move towards 20000/20212/20571. Any close below

Continue Reading

Rgds,

Bramesh

{LONGTERMINVESTORS} Fwd: Patel Engg

Patel Engg CMP 92.1 FV 1

Filled the 1 st gap of 93.75 - 98.55.

Expect pull back.

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 23 September 2016 at 21:45
Subject: Fwd: Patel Engg
To: longterminvestorsresearch@googlegroups.com

Patel Engg CMP 101.05 FV 1

As expected daily MACD has given sell signal.

Keep one think in mind it has created many gaps during the run.

93.75 - 98.55, 61.50 - 77.5, 77.5 - 85.25

These gaps will act as resistance during the fall.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 16 September 2016 at 22:50
Subject: Patel Engg
To: longterminvestorsresearch@googlegroups.com

Patel Engg CMP 111.05 FV 1

Fallen from 2008 high of 1067 to the low of 26.3 Aug 13.

From there it went to high of 152.95 in Jun 14.

It retraced to 43.3 on 17 Aug 2016 ( higher low 26.3 ---> 43.3)

For last several days it was at upper circuit & today made high of 122.7.

With this it has breached Dec 14 quarter high of 122.5, with almost 4.5 times volume ( 15 days yet to go of this quarter

) that of last full quarter.

As it has moved very very fast from 43 to 122 in just 9 trading days, expect retracement up to 55 - 60, where all daily EMAs are.

The market does speak ...... we only have to listen.

{LONGTERMINVESTORS} Jindal Cotex

Jindal Cotex CMP 16.85

Fallen from Jan 2013 high of 90 to the low of 5.3 Sep 15.

It has given BUY signal on quarterly chart by breaching quarterly resistance of 23.65 by going to 24.45, with more than 22 times volume that of last quarter.

In this month it has given trend reversal on monthly chart.

Expect retarcement below 14, chance to enter as next resistance on quarterly chart is quarterly medium term EMA, which is now at 38.85.

The market does speak ...... we only have to listen.

{LONGTERMINVESTORS} GTL Ltd

GTL Ltd CMP 20.7

Fallen from Jul 10 high of 477 to low of 10.05 Sep 15.

From there it went to high of 18.60 on Jan 16.

It then retraced to higher low of 10.65 on 3 Jun.

As it gave higher low now it went to higher high 20.7

Since 2011 it is breaching monthly long term EMA 1 st time.

Though it was 20 % up today, volume is drying.

Expect retarcement up to 13, chance to enter

The market does speak ...... we only have to listen.

Fwd: {LONGTERMINVESTORS} CAMSONBIO

CamsonBio CMP 30.55

Though it has given BUY signal on monthly chart with almost 3.5 times volume that of last month,

daily as well as weekly RSI are showing - ve divergance.

Expect retracement to start.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 18 August 2016 at 20:52
Subject: Fwd: {LONGTERMINVESTORS} CAMSONBIO
To: longterminvestorsresearch@googlegroups.com

CamsonBio CMP 21.6

In last week it gave sell signal on weekly chart with high volume.

Now expect it to go further down near it's recent low (19.4 ) at the month end

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 10 August 2016 at 23:04
Subject: Fwd: {LONGTERMINVESTORS} CAMSONBIO
To: longterminvestorsresearch@googlegroups.com

CamsonBio CMP 22

As informed in the previous mail, it touched the low of 20 on 3 Aug.

It bounced back & breached the previous high of 28.5 by going to 28.75.

Now daily MACD has given BUY signal.

Expect it to go for next immediate resistance 30.05, weekly medium term EMA.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 12 July 2016 at 23:02
Subject: Fwd: {LONGTERMINVESTORS} CAMSONBIO
To: longterminvestorsresearch@googlegroups.com

CamsonBio CMP 27.05

Weekly MACD & RSI showing + ve divergence.

In last two days it jumped 40 %

Expect retracement up to 21.50, chance to enter as next resistance is at 40.1

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 12 July 2016 at 22:59
Subject: {LONGTERMINVESTORS} CAMSONBIO
To: longterminvestorsresearch@googlegroups.com

CamsonBio CMP 27.05

Weekly MACD & RSI showing + ve divergence.

In last two days it jumped 40 %

Expect retracement up to 21.50 as next resistance is at 40.1

The market does speak ...... we only have to listen.

{LONGTERMINVESTORS} Commodity Options – Sebi Gave its Nod

Link to the Article - Commodity Options – Sebi Gave its Nod

{LONGTERMINVESTORS} AGC Network

AGC Network CMP 77.6

From Jan 2013 top of 236.5 it went to low of 44 MAY 14

From there it went to high of 157.5 May 15, only to retrace to 54.5 Feb 16 ( higher low 44 ---> 54.5 )

On 9 Aug it again started uptrend & went to high of 100.4 on 12 Sep.

In just 5 weeks it almost doubled.

Hence now it has started giving retracement.

Today it gave trend reversal on monthly chart & sell signal on weekly chart.

Expect it to go below 74.

Keep one thing in mind it has given higher low hence it is expected to give higher high.

Higher than last top ( 157.5 -----> 236.5 )

The market does speak ...... we only have to listen.

Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug

Aarey Drug CMP 39.5

It has given sell signal on quarterly chart.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 3 June 2016 at 19:46
Subject: Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 50.8

By going to 54.90 yesterday it filled all the gap it had made during coming down.

Today it gave trend reversal on weekly chart with high volume.

Book profit completely.

1 st support at 43

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 19 May 2016 at 22:54
Subject: Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 42.65

Made top of 43.35, filling the gap, with low volume.

Start profit booking.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 16 May 2016 at 22:52
Subject: Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 39.1

In last week it went to high of 42.4 & tried to fill the gap of

41.30 - 43.45 formed on 1 & 4 Feb 2013.

Ready to fill the gap completely by going above 43.45, in this week.

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 6 May 2016 at 21:16
Subject: Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 36.4

Inching towards 43.45

The market does speak ...... we only have to listen.

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 25 April 2016 at 19:44
Subject: Fwd: {LONGTERMINVESTORS} Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 33.15

Breached the last top of 33.40 by going today to 34.10.

Target on monthly chart 43.45.

Will also feel the resistance of the gap of 43.45 - 45.70.

The market does speak ...... we only have to listen.

On Mon, Jan 4, 2016 at 12:10 PM, Hemant Barve <barvehn@gmail.com> wrote:
Aarey Drug CMP 31.75

Though market fell by 537 points, this scrip went up to 52 week high, with high volume.

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 1 January 2016 at 23:05
Subject: Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 27.55

Breached last quarter's high of 28.70 by going today to 28.85.

Monthly Target 33.2

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 4 November 2015 at 20:25
Subject: Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 27.70

Going towards Monthly resistance 33.2

Volume started decreasing.

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 30 October 2015 at 20:08
Subject: Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 24.75

Crossed quarterly resistance of 22.70 with registering much higher volume than the last whole quarter, in just one month.

On weekly chart medium term EMA is crossing long term EMA, from below, first time since Jun 2012.

Next resistance at 24.85, quarterly medium term EMA.

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 20 October 2015 at 22:12
Subject: Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 22.10

Very near to cross quarterly resistance 22.70

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

---------- Forwarded message ----------
From: Hemant Barve <barvehn@gmail.com>
Date: 5 October 2015 at 20:23
Subject: Fwd: Aarey drug
To: longterminvestorsresearch@googlegroups.com

Aarey Drug CMP 15.10

In last quarter it has given trend reversal on quarterly chart with high volume.

It also crossed quarterly resistance of 15.74 by going to 17.90.

Hence expect it breach next resistance on quarterly chart 18.25, 22.70.

On daily chart it will feel the resistance at 16.15

Since July 2014, it is trying to overcome the resistance of monthly long term EMA.
Though it breached it several ( 5 ) times, it could not stood above it at the end of the month.

The market does speak ...... we only have to listen.

Disclaimer: Investors/traders should carry out their own study and research, and exercise caution before acting on these recommendations.
We will not be responsible for losses purportedly arising from the use of our recommendations

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{LONGTERMINVESTORS} Force Motors Target 3940 from Religare

Re: {LONGTERMINVESTORS} Midcap idea by Roongta

Hi
I am also ready to share subcription amount
Atul

On 28 Sep 2016 12:26, "Morphous D" <morphousd@gmail.com> wrote:

Hi!
Does anyone subscribe to Midcap ideas by Roogta from moneytimes?
I want to subscribe and wanted to know feedback about the same

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Re: {LONGTERMINVESTORS} Midcap idea by Roongta

ME ALSO.

On Thu, Sep 29, 2016 at 10:23 PM, Morphous D <morphousd@gmail.com> wrote:

Sure im open for it....how do we proceed

On Wed, Sep 28, 2016 at 7:06 PM, kamaal khan <kamaalkhanbpl@gmail.com> wrote:
Hi
I subscribed Rungtas investment advisory service in which he gave 5 stock for 3 month time frame. It was very good. But he stopped that plan. He is very experienced in picking hidden gems.
My IAS stock were prism cement,vimta lab, GSFC, GE shipping and sarda energy and mineral. The recommendation was 4 month back.
If u want to subscribed we can share the subscription if u wish
Thanks

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{LONGTERMINVESTORS} Deutsche Bank crisis threatens to roil global markets.

http://www.marketwatch.com/story/a-crisis-in-european-banks-threatens-to-roil-global-markets-2016-09-28

{LONGTERMINVESTORS} Bloomberg: Fines, Withdrawals, Job Cuts. It Was an Ugly Day for Global Banks

By Caleb Melby & Angela Cullen

September 30, 2016 — 3:20 AM IST

Funds pull cash from Deutsche Bank, Commerzbank to slash jobs

· Wells Fargo's Stumpf grilled by House committee over accountsShare on Facebook Share on Twitter

Even before the opening bell in New York, Thursday looked like a grim day for some of the giants of global banking.

But few expected the barrage of bad news that soon hit on both sides of the Atlantic -- a rat-a-tat-tat of job cuts, scandal and financial worry that sent bank shares tumbling and left many investors wondering just where or when the pain would end.

It began in Germany, where long-struggling Commerzbank AG unveiled yet another plan to regain its footing, this time by cutting one in five of its employees. In Washington, came still more blistering attacks on John Stumpf, whose grip atop embattled Wells Fargo & Co., the largest U.S. mortgage lender, remains tenuous amid the uproar over a scandal involving unauthorized accounts.

And then, back in Germany, came the bombshell: revelations that some hedge funds were moving to reduce their financial exposure to Deutsche Bank, now the biggest worry in global finance. Before Stumpf left the U.S. House chambers after more than four hours of grilling, news broke his bank would be hit with more penalties after improperly repossessing cars owned by U.S. soldiers.

As Deutsche Bank Anxiety Grows, Some Clients Cut Their Exposure

"While each has unique challenges, the overwhelming thing that has happened to the banks is they're forgetting their purpose, while complexity is increasing opportunity for errors," said Jon Lukomnik, executive director of the Investor Responsibility Research Center Institute in New York.

Eight years after the financial crisis, the global banking industry is groping for a way forward. Global regulators have sought to make banks look more like boring utilities, but that road has proven steep. Emboldened by an international populist groundswell, they continue to dole out fines and penalties, and firms are scrambling for ways to make money as trading volumes decline and capital requirements become more stringent.

The 38-company Bloomberg Europe Banks and Financial Services Index has tumbled 24 percent this year, while the KBW Bank Index of 24 U.S. lenders has slid 4.6 percent, led by Wells Fargo's 18 percent decline.

In the past 10 days, Stumpf has agreed to forgo $41 million in compensation, and an adviser to Turkish President Recep Tayyip Erdogan glibly suggested on Twitter that Turkey buy Deutsche Bank as its market value fell by more than half this year. The German lender is now barely worth more than the $14 billion settlement the U.S. Department of Justice would like to extract in a long-running investigation of the bank's mortgage securities business.

Stumpf Berated Again as Lawmakers Renew Calls That He Quit

Commerzbank Chief Executive Officer Martin Zielke announced plans Thursday toeliminate 9,600 jobs, leaving it no bigger than it was before its 2008 acquisition of Dresdner Bank. The Frankfurt-based bank has lost about 39 percent of its market value this year.

"Germany is still overbanked, and it's tough to have Germany as your home base when you want to compete with French, Spanish or American peers that operate in less fragmented home markets," said Klaus Fleischer, a professor of finance at the University of Applied Sciences in Munich.

Wells Fargo Troubles Mount With Penalty for Soldiers' Loans

Wells Fargo agreed to pay more than $24 million to the Justice Department and the Office of the Comptroller of the Currency to settle allegations that it improperly repossessed cars owned by members of the military.

"I don't personally see how you survive," Representative Denny Heck, a Washington Democrat, told Stumpf Thursday as the 63-year-old CEO testified before the House Financial Services Committee.

Lawmakers called for Stumpf to be fired, for Wells Fargo's board to be replaced and for the bank to be broken up.

Commerzbank Plans to Cut Jobs, Suspend Dividend in CEO Overhaul

"Your problem is coming," Representative Mike Capuano, a Massachusetts Democrat, told Stumpf at the hearings. "You think today is tough? It's coming. When the prosecutors get ahold of you, you're going to have a lot of fun."

As the hearing was under way, news broke that some of Deutsche Bank's clients were said to be reducing their collateral on trades, sending its New York-listed shares down as much as 9.1 percent. Earlier this week, CEO John Cryan was forced to shoot down speculation the bank needs more capital and may require a bailout, as its shares touch record lows and a U.S. litigation settlement looms.

"Our trading clients are amongst the world's most sophisticated investors," Michael Golden, a spokesman for Deutsche Bank, said in an e-mailed statement. "We are confident that the vast majority of them have a full understanding of our stable financial position, the current macroeconomic environment, the litigation process in the U.S. and the progress we are making with our strategy."

{LONGTERMINVESTORS} The Market Xpress – Talbros Automotive Components, Rollover Analysis – October 2016

Dear All,

The Empire Strikes Back!

Invincibility lies in the defence; the possibility of victory in the attack. Sun Tzu

Patriotism hit a high while market slumped to a low as the Indian Army went on the offensive to carry out surgical strikes in Pak-occupied Kashmir. The market was perhaps waiting for an excuse to correct and the skirmishes in the border led to a sell-off inflicting damage especially on the mid-cap counters. With India now striking at terrorist launch pads and choosing to retaliate and take pre-emptive measures, a lot of global attention will be focus on how the two countries handle the situation. The Indian currency shed some weight inching closer to the 67 mark against the dollar. The outlook is a weak start. On agenda today are GST Council meet, CPI for Industrial workers and Core Sector growth for August. The rollovers have been below average. Foreign investors have pumped in over Rs.7,000 crore. If tensions escalate, deleveraging may set in. US indices saw the sharpest decline in a fortnight while Asian indices are bleeding for now.

Management Meet

Talbros Automotive Components: Multiple triggers for growth – Not Rated

CMP (Rs) 135

We interacted with Mr Anuj Talwar, Joint Managing Director and Mr Naveen Juneja, Group CFO of Talbro Automotive Components Ltd (TACL). TACL has a near monopoly status in two-wheeler gaskets, while it has a 40% market share in CV gaskets. It has a meaningful presence in forged components, hoses, anti-vibration products and chasis/suspension components. It has strong tie-ups through JVs and technical assistance with industry leaders such as Magneti Marelli, Nippon Leakless, Marugo Rubber, Sanwa Packaging and Interface Solutions.

TACL had seen flattish revenues in the past five years as two-wheelers where it has 92% market share in gaskets saw tough times, its forging segment utilization was under pressure owing to power availability issues and new JVs took time to scale up operations. However, going ahead the company believes that it would see a sustainable 12-13% CAGR in revenues led by 1) strong 2W/CV demand for gaskets on back of rising auto sales, 2) entry into passenger car segment for gaskets, 3) scale up of the heatshields (a new product) business, 4) revival of orders in forging business as power costs recede, 5) Magneti Marelli (MMT) JV revenues to see revival as new products and new OEs get enrolled and 6) scale up of hoses business in the Marugo Rubber (MRT) JV.

Margins should see steady increase as utilization improves across segments and contribution of high margin MMT JV rises. Resultant robust earnings growth along with limited capital expenditure requirements would allow the company to prune its debt (net D/E of 0.8x). Return ratios will also improve on the back of higher asset turnover and improvement in margins. P/E of 17.2x on FY16 EPS of Rs7.9 looks reasonable but is not reflective of the ensuing strong earnings growth.

Derivatives Strategy

Rollover Analysis – October 2016

Surgical strike by India spooked domestic market as geo-political uncertainty translated into nervousness, which was visible with VIX shooting up 40% during the day. Traders were caught on a wrong foot, particularly the PUT writers, who were forced to unwind their position as market kept falling fiercely after the news broke out.

For the September Month, Nifty stood flat as market was influenced by global and domestic uncertainty. Rollovers of Nifty/BankNifty stood at 65/65% (2.4cr/19lacs shares) as against 84/73% (2.7cr/20lacs shares) previous expiry and 75/73% 3month average. Market wide rolls stood at 82% vs 81.2% previous month and 81.4% 3M average.

FII's long/short index futures rolls stood at 61/38% as against last four month average of 88/37% indicating fading bullish stance. On the other hand, FIIs stock futures long/short rolls stood at 89/78% as against 76/84% average of the last four months indicating some unwinding of arbitrage position. On option front, Nifty October series starts with OI build-up at 8600 puts (3.0mn shares) and 9000 call (3.7mn shares).

Technical Track

Emergence of geopolitical issues following surgical strikes by Indian army in Pakistan spooked the key indices. Nifty fell sharply from the peak of 8801 and made a low of 8558. For last three weeks, Nifty was contracting in a range and in yesterday's trade it confirmed a breakdown. However, development of external events took many by surprise on Dalal Street and Nifty settled at 8591. With today being a weekly, monthly and quarterly close, much will depend on whether Nifty is able to defend multiple gann support points around 8560-8600 and as well the low of the month of August (8518). If selling pressure fails to settle down around this levels in next two sessions, index could see sharp cuts going ahead.

Derivatives Diary

² Erasing early gains Nifty suffered steep losses on geopolitical concerns. Fresh shorts seen in Nifty/Bank Nifty futures

² Market breadth turned to be negative, as all the sectoral indices ended in red in Thursday's session

² Open interest additions seen across the board with maximum base at 9000 call and 8600 put on October series

² India VIX was jumped by 33% in single session. Rollover for Nifty/Bank Nifty futures on expiry day was recorded at 65.6/65.3% respectively

² Immediate support for Nifty spot is seen at 8540-8510 spot levels. Another gap down opening possible as SGX Nifty is trading at 8592 down by 47 points

Fixed Income Synopsis

The 10Y benchmark 7.59% GS 2026, ended ~9 bps higher at 7.01% vs previous close of 6.92%, and the 6.97% GS 2026 ended ~8 bps higher at 6.86% vs previous close of 6.78%. Gsecs recorded total trading volume of ~Rs. 711 bn. Bond yields spiked after the announcement of surgical strikes conducted by Indian army in Pakistan across the LoC.

The demand at the fixed Repo window was Rs. 76.72 bn, while the supply at the fixed Reverse Repo window was registered at Rs. 39.92 bn. The Call WAR closed higher at 6.44% vs previous close of 6.42%.

The benchmark five-year OIS and one-year OIS closed higher, with the 5-Y OIS closing at 6.40% vs. previous day's close of 6.32%, while the 1-Y OIS closed at 6.49% vs. previous day's close of 6.44%.

The Reserve Bank of India's Reference Rate for the US Dollar is Rs.66.55 on September 29, 2016, while the corresponding rate for the previous day (September 28, 2016) was Rs.66.45.

Commodity & Currency Cues

Precious metals held ground, underpinned by weakness in global equities. German indices have been adversely impacted by uncertainty over the fate of Deutsche Bank. There is ambiguity on whether the beleaguered bank will receive any state aid. On macroeconomic side, although the third estimate of second quarter GDP was upwardly revised to 1.4% from 1.1%, IMF reported that it will lower its 2016 US growth forecast again (no new projections yet).

LME base metals, barring Nickel moved higher. Nickel prices witnessed profit taking after Filipino government reported that mining companies whose operations have been ordered to be suspended, can appeal within seven days before the government decision is implemented.

Oil futures are trading on a firm note, however markets are contemplating over the fact that production cut announcement by OPEC is devoid of any details.

INR lost ground, adversely impacted by reports of surgical strikes by Indian military on terrorist camps in Pakistan occupied Kashmir.

Corporate Snippets

² Zee Entertainment Enterprises Ltd has acquired the UAE's leading radio station, Hum 106.2 FM, for an undisclosed amount. (BL)

² Larsen and Toubro has bagged orders worth Rs20.46bn across various business segments. (BL)

² Wockhardt said that the UK health regulator has completed inspection of its Chikalthana plant at Aurangabad in Maharashtra without making any critical observations. (BL)

² Cipla has decided to trim its ballooning employee cost by freezing increments of 300-400 of its top managers as part of the company's operational revamp. (ET)

² Balaji Telefilms Ltd (BTL) announced a streamlining exercise for its group structure to combine similar business interests, improve allocation of capital, enhance operational efficiencies and optimise cash flow. (BS)

² National Aluminium Co Ltd (Nalco) to re-think its overseas expansion plans including a proposal to set up a USD2bn smelter unit in Iran. (BS)

² Apollo Hospitals and Italy's KOS group have jointly launched a medical rehabilitation hospital here. (BL)

² The NTPC 4000mw Pudimadaka (Lalamkoduru) super thermal power project, proposed to come up close to Visakhapatnam, is awaiting fuel (coal) linkage to commence works on the project. (BL)

² NTPC Ltd is on course to implementing 1GW (1000MW) solar photo-voltaic power generation park at Kadiri in Anantapur district of Andhra Pradesh. (BL)

² Tata Steel plans to add 3mt steel output to its existing 13mt steel capacity across two facilities at Jamshedpur and Kalinganagar through brownfield expansion over the next few years. (BS)

² Lupin, received the US health regulator's approval to market its memantine hydrochloride extended-release capsules, used for treating Alzheimer's disease. (BS)

² The State Pollution Control Board (SPCB) has slapped a showcause notice on Vedanta Ltd's Lanigarh unit for unauthorised sale of hazardous waste. (BS)

Economy Updates

² The government's Income Declaration Scheme (IDS) has seen a revenue of Rs67.50bn for the Income Tax department, as unaccounted money to the tune of Rs150bn has been disclosed. (BS)

² Unemployment rate in India has shot up to a five-year high of 5% in 2015-16, with the figure significantly higher at 8.7% for women as compared to 4.3% for men. (BS)

² Labour ministry has decided to increase the equity investment of the employees provident fund organisation (EPFO) to 10% in 2016-17 as compared to 5% invested in the last financial year. (ET)

Happy Investing!

Amar Ambani

Head of Research

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