One of the best long term investment opportunities available today is the stock of DLF — India’s largest real estate developer, and a constituent of Nifty 50 Index. We believe property prices in India have increased nothing compared to the rise we will see in next 5 years. Thanks for QE2, global liquidity will continue to flow into India during the next 5 years, and all commodity prices including property will increase in the emerging markets like India; property prices may increase significantly more than metals. The recent plot sale of Rs 5 billion by DLF is a good example of how they can start monetizing land bank assets, which DLF has in plenty. If you want to trade DLF for Rs 20-30 gains, that’s your decision. However, we believe one can confidently buy at any price between 250 and 300 (which we got last week as well) and hold this stock for over 250% gain in 4-5 years, by when the stock may cross Rs 1000.
Tag Archives: Nifty
FII-DII trading on NSE and BSE-19Nov2010
This week, FIIs have sold their long positions significantly in Futures and Options. And they have written (sold) call options for Nifty 6100 and 6200, which means the Nifty Index will find it difficult to cross these levels in the short-term. The real support for this market is between 5450-5550, which was the level from where the rally started. An intermediate support is at 5800-5820, from where a short-covering pullback can happen for 100-200 points up to reach 5950. But if the selling pressure remains strong, then 5500 levels are possible.
Reliance Communications: Reduce Weightage -21Nov2010
Reliance Communications (RCom) is in a problem with its alleged involvement in the 2G spectrum scam. RCom is already undervalued but this latest problem can put pressure on the stock. This past week saw 10% drop in RCom’s stock, and based on new facts that came to light in last 2-3 days, we have reduced our holding in RCom. Its possible that RCom can fall another 10% from current levels to around Rs 130-135.
Thankfully, many other good stocks have also fallen 10% in the week, giving us an ideal shifting opportunity. Our top picks to make the shift are: BHEL and Tata Motors at current prices. Both these stocks are likely to continue delivering good profits and have no regulatory overhangs like in RCom. Once the air around RCom clears, then we will reconsider entering this stock.