Readings: Coal prices, Brokerage outlook, Gold manipulation
- Hindu Business Line: Fall in coal prices may ease cement cos’ burden
Coal cost for the cement companies is likely to range between $190 and $200 a tonne (cost, insurance and freight) in the second quarter of the financial year 2008, against $170-240 a tonne in the first quarter.
On the domestic front, the electronic auction undertaken by Coal India has pushed up coal prices by 30-40 per cent to Rs 1,600 a tonne as the demand has gone up many folds, said another cement company official. Indian coal is of low calorific value compared with imported coal.
Despite a strong correction of 50-60% YTD, we believe it is still not too late to Sell as these brokerage stocks are currently trading at a premium to market multiples despite having higher betas.
In India the turnover has been steadily growing in the past few years as more FIIs have entered the market and more F&O contracts have been introduced in various securities. However, during the recession of 02 volumes declined 50% yoy.
The Indian broking industry is fairly large and fragmented with 9,000 odd brokers in the cash
segment and around 24,000 sub-brokers. The top five brokers in India command around 15-16% market share.We expect volumes to decline 16% in FY09E followed by 20% growth in FY10E and FY11E.
Not too encouraging if you are a broker or shareholder.
- MarketWatch: Big jump in gold sale spurs manipulation talk
Recent heat from Congress and regulators, along with public speculation, over whether commodity prices are being manipulated has also reached gold pits, where the debate was stirred by a surge in bets last month that gold prices would fall.
Three unidentified U.S. banks held 86,398 short positions, or bets that gold prices will fall, in the COMEX gold market as of Aug. 5 — 10 times more short positions than a month earlier.
“What you have here is the footprints of hedge funds exiting the commodities markets en masse,” said Kitco’s Nadler.
Manipulation or exodus - does it matter? Price tells all.
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