Commodity and Cyclical Plays


([email protected]) #539

Thanks @jitenp for your valuable input, much appreciated.


(Bhambri3) #540

Hi Jiten, any views on hotel industry ? Thanks


(Jiten Parmar) #541

Hotel industry seems to be doing good. But, understand that it is a tough industry. So, one must pick the stocks carefully.


(Nabendu) #542

@jitenp Any views on the Aluminium and Alumina pure play post the Rusal ban imposition. Prices seem to be skyrocketing. Even today new is that the prices have increased by 5 % in LME Market . A 17.4% increase in aluminum prices in the past one week and maybe even more of alumina prices taking into account the already deficit should go well with Indian Metal players. https://www.ft.com/content/151f278e-419a-11e8-803a-295c97e6fd0b

Disclosure : My personal view may be biased as I invested in NALCO once the news broke out.


(Akshay Kumar) #543

Aluminium in demand!


(phreak) #544

Serious price/action with volumes in Nalco and Hind Copper. I see that same is the case with Hindalco.

Aluminium has had a fundamental shift since Rusal sanctions and prices have shot up since for both Aluminium and Alumina so its understandable. Not sure what’s up with Hind Copper though. Might just be the routine pump-and-dump like last time from 65 to 100 and back but Aluminium might have more near-term tailwinds if geopolitics doesn’t play spoilsport.

Disc: Invested in Nalco & Hind Copper.


(manojkol) #545

hind copper is the only producer of nickel and nickel prices are on tear


(Mridul) #546

Could be because of the touble with one of the largest copper producing mines in the world (in Indonesia).


(phreak) #547

Hindustan Copper’s Nickel capacity is too small to make any impact. Their current capacity for Nickel seems to be just 50 tons. At 15k USD per ton, thats a topline of about 5 Cr. I don’t think it had anything to do with today’s moves. However capacity for Nickel could go up to 400 tons but that’s in the future when the Ghatsila mine starts contributing and that’s some time away.

Usually the price gets reflected in LME/Comex in case of such macro scenarios and I don’t see anything happening to Copper prices that are indicative of that. So am not sure.

Although the price/action was similar in both Nalco and Hind Copper, the delivery volumes tell a completely different story. 14% in Hind Copper vs 31% in Nalco. I am still skeptical of Hind Copper.


(manojkol) #548

it is small i agree but market catches momentum like this only . retail buys and then its offloaded


(Raj A A) #549


(Raj A A) #550

Rise in Oil Prices could Further Damage Sentiments, says CLSA
Cuts price targets on OMCs, says consumer staples and paint cos may feel the heat, too
Our Bureau

Mumbai: The rise in oil prices is increasingly becoming a matter of concern for investors. Hong Kongheadquartered brokerage CLSA on Thursday said that a further rise in oil prices could damage investor sentiments and raise the twin deficit fears.

Brent crude oil futures crossed $74 per barrel on Thursday, the highest level since late-2014. India imports 80% of its total oil requirements.

“Oil is now firmly above $70 and there’s talk of it moving to $80. This could further damage investor sentiments, as the economy doesn’t have a lot of cushion, especially in a pre-election year,” said CLSA in a note.

As the current year is a pre-election year, a rise in oil prices to $80 per barrel could prompt the government to maintain petrol and diesel prices at current level and there could be a cut of ₹4 per litre in fuel excise duties, implying an impact of ₹50,000 crore on tax revenue, said CLSA. The firm added that the government’s petroleum subsidy for the current financial year could be higher by ₹30,000 crore than budgeted if oil were to average $80 per barrel.

Finance Minister Arun Jaitley had allocated ₹24,933 crore for petroleum subsidy in the Union Budget for 2018-19. The subsidy allocation is a 2% increase over the revised estimate of ₹24,460 crore for last financial year.

CLSA on Oil Price Surge

“Overall, we estimate that crude at $80/bbl can have an impact of as much as ₹750-850 billion (₹75,000 crore-₹85,000 crore) (40-50bp of GDP) if the government takes the entire hit from hereon. The revenue shortfall risk from weaker GST collections is 30-40bp (basis points) and therefore the cumulative fiscal impact would be 70-80bp,” said CLSA.

CLSA said the twin deficit issues could re-emerge with current account deficit moving up to 3% of the gross domestic product and fiscal risks to the tune of 40-50 basis points of GDP. The weak US dollar and strong RBI reserves would limit the currency impact, but the era of rock-like stable rupee may be behind us, the firm said.

In terms of sector impact, oil marketing companies could be at risk if the government passes on some subsidy burden to them. In a separate report on Thursday, CLSA cut target price on the three oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — by 17-20% citing macro concerns. These oil retailers hit 52-week lows in Thursday’s trade.

CLSA said rising oil is also a negative for users of oil-based chemicals industry including consumer staples and paints. The brokerage added that a potential weakening of the rupee will be positive for exporters.


(nil_71) #551

Market need to brace for another bomb whether Trump will stop or renew sanction waiever on Iran…coming in May…more volatility


(rahulshares) #552

Can anyone here explain how are RIL’s earnings affected by rise in oil prices? Its share price is stable though not certain if the same can be said for earnings and refining margins. What I believe is, crude is their key input so its negative for them. But market seems to know better. Though I understand for RIL’s its much more complex than just that. Thanks!


(Gaurav Agarwal) #553

(jajushobhit) #554

On the refining front it does not impact them much, the refining margins remain largely intact as both the input cost and output price are hedged simultaneous. However, if the domestic fuel prices remain low despite increase in crude prices, then its margins by retailing are impacted. In such a situation, the company may export higher to protect margins, but loses out on marketing margins. Experts in the sector, may feel free to correct me.

Disc: Invested in Reliance Industries

Regards
SJ


(yourraj) #555

Hi @jitenp i am bullish on hotel industry cycle i had upload my small write up below

on seperate thread could you please advice
regards


(Jiten Parmar) #556

Good post. Keep it up. Hotel sector, I am positive.


(krrish seth) #557

Your views on alluminium after the recent developments


(Amit) #558