Bids for Ganga Expressway with DS Construction, Apollo Group.
Bajaj Hindusthan (BHL), the country’s largest sugar producer, is likely to foray into the infrastructure sector in a bid to diversify and secure the company from the cyclical nature of the sugar business.
The company is also toying with the idea of developing real estate projects.
The Shishir Bajaj-owned company has recently bid for two phases of the Uttar Pradesh government’s 1,047-km Ganga Expressway Project in association with DS Construction and the Apollo Group. The consortium has been shortlisted for the two phases and the financial bid is scheduled to open on January 13.
The two phases are Greater Noida to Fatehgarh, including the Farrukhabad Link (253 km), involving an investment of Rs 7,631 crore, and Fatehgarh to Dalmau (Rae Bareli), including the Lucknow link (305 km), at an investment of Rs 8,012 crore.
On December 27, BHL informed the Bombay Stock Exchange that its board had approved the company’s participation in the project.
The company has also diversified into the production of particle-board and medium-density fibre-board from bagasse, a byproduct of sugar. It has also ventured into value-added products such as ethanol and power.
Sugar, the company’s main business, is highly cyclical in nature and the company has posted huge losses in the last few quarters due to a downturn in the sugar sector.
The country saw a record sugar production of 28.4 million tonnes last year, which is expected to be higher this year. Consequently, sugar prices have crashed by 30-35 per cent in the last one year and are expected to remain under pressure in the near future.
“We are the technical partner, while BHL and Apollo are the financial partners. The consortium’s activity is currently limited to this project,” said an official at DS Construction.
The expressway, the biggest road project by a state government in recent times, has attracted big companies such as GMR, Jaiprakash Associates, Punj Lloyd and L&T, because it includes land development and revenue-raising rights through tolls over a 35-year concession period.
The state government, which will oversee the administration of the project, plans to start construction of the expressway from April 2008.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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