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Tuesday, 26 June 2012

currency trade ....26 june 2012

USD INR (JUN– Expiry)

US dollar is looking weak on charts hence selling is recommended in USD.
Buy above 57.1475 with a SL 57.0475 possible targets of 57.2875/57.3875/57.5075.
OR

Sell below 57.0475 with a SL 57.1475 possible targets of 56.9475/56.8475/56.7475.
EUR INR (JUN – Expiry)

Euro might recover further as technically looking strong.
Buy above 71.3375 with a SL of 71.2300 for possible targets of 71.4775/71.5800/71.6875.
OR

Sell below 71.2300 with a SL 71.3375 possible targets of 71.125075/71.0575/70.9400.

Currency Headlines
Euro tumbled before European economies debt sale. .
Euro is trading near two week low against dollar before the Spanish and Italian debt sale. Even the EU summit this week will be unable to support the tumbling economies of Europe which is another bearish factor for crude oil prices. The euro traded at $1.2506 from $1.2504 at the close in New York yesterday, when it touched $1.2471, the weakest since June 12. It fetched 80.30 U.K. pence from 80.29 pence, following a 0.4 percent decline yesterday. The yen added 0.2 percent to 99.46 per euro and to 79.53 against the dollar.

orchid Chem 26th june 2012

Possible Bottom picking: Buy orchid Chem @ 112.9 and at dips to 110. SL below 109. TGT: 120+

EDUCOMP 26 june 2012 intraday

Equity
http://gold.trustline.in/mailer/img/hand.jpg
Call of The Day
Buy EDUCOMP At 167.00 TGT 173.00 SL 158.00

Currency call for intraday 26 june 2012

Currency
http://gold.trustline.in/mailer/img/hand.jpg
Call of The Day
Buy USDINR Above 57.13 TGT 57.28 SL 57.03

Commodity call for intraday 26 june 2012

Commodity
http://gold.trustline.in/mailer/img/hand.jpg
Call of The Day
Sell GOLD Around 30170.00 TGT 29980.00 SL 30360.00

“Sesa Goa – Sterlite” Merger

 Vedanta Resources Plc, Sesa Goa and Sterlite Industries
shareholders give approval in their EGMs to the organization
restructuring plan

 Sterlite to merge with Sesa Goa (5:3 ratio); Vedanta
Aluminium (VAL) and Malco to come into fold fully; Cairn India
also to be its subsidiary

Sesa’s outstanding shares to increase from 869mn to 2964mn.
Value “Sesa-Sterlite” on SOTP basis giving a fair value Rs 207
per share and Mkt Cap of Rs 614bn
 At CMP of Sterlite (Rs 99) and Sesa Goa (Rs 187), the swap
ratio valuation continues to be in favour of Sterlite
shareholders by about 12%.
Major Milestone achieved

Vedanta during Feb 2012 initiated restructuring across its subsidiaries involving merger of
Sterlite Industries into Sesa Goa in a 5:3 swap ratio. It also involved transfer of Vedanta’s
70.5% stake in VAL, 38.8% stake in Cairn India, 94.8% stake in Malco to new entity
“Sesa-Sterlite” along with the associated debt of US5.9bn. The company received
approvals from BSE, NSE and Competition Commission of India during April 2012. As
mandated by law it was to get the Shareholders approval (at least 75%) through
respective EGMs. The proposal received approval from 99% of Vedanta shareholders,
89% of Sterlite Shareholders and 79% of Sesa Goa Shareholders. This paves the way for
it getting the Foreign Investment Promotion Board (FIPB) approval and seeking court
approvals.
“Sesa-Sterlite” global major in the offing
With all of Vedanta’s subsidiaries (except KCM - copper company based in Zambia)
coming under the Sesa-Sterlite fold it would become a diversified major having interest in
ferrous metals, non ferrous metals (copper, aluminium, zinc, lead, silver), power and oil
space. Further all expansions undertaken by the group would now be through this entity.
The net debt for the consolidated ‘Sesa Sterlite’ stands at Rs 369 bn. The organization
restructuring would give comfort to the parent “Vedanta Resources Plc” by having the
holding structure simplified and the debt being passed on to the Indian subsidiary. The
company has been sharing that this exercise would also be giving them “synergy benefit”
of Rs 10bn every year.
Valuation:
We have valued the new entity (Sesa Sterlite) on SOTP taking in to account FY14
numbers to arrive at a fair value of Rs 207 (which translates into a market cap of Rs 614
bn). This implies a fair value of Rs 124 for Sterlite. Our FY14 EPS estimate for ‘Sesa
Sterlite’ stands at Rs 38. Based on the Sesa Sterlite swap ratio (3:5) at CMP of Rs 99 for
Sterlite and Rs 187 for Sesa Goa, the valuation is in favour of Sterlite by 12%. We believe
this difference should get bridged as further milestones are met and restructuring
completed by end of CY 2012.
Global peers including BHP Billiton, Rio Tinto, Teck Resources are trading at ~8x 1 year
forward earning and ~4.2x 1 year forward EV/ EBITDA. Considering the holding company
structure and operational constraints, we believe proposed ‘Sesa Sterlite’ to fetch a lower
valuation compared to its global peers.