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Sarita Pereira

 
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  • Apple's iPhone 6: The Australian Opportunity
    Today, 10:57 AM AAPL 5 Comments

    Summary

    • Cashless transactions are increasing in Australia due to wider adoption of technology.
    • Westpac and Commonwealth Bank of Australia provide contactless mobile payment services in the country through tie-up with Visa and MasterCard.
    • The iPhone 6, iPhone 6 Plus should witness better sales due to the security feature.
  • Twitter: Heading Toward E-Commerce
    Fri, Sep. 12 TWTR 8 Comments

    Summary

    • Recently, Twitter introduced a "Buy" button on tweets. The company is testing this feature through tie-ups with selected brands.
    • Apart from the bigger brands, Twitter can make use of its 4.5 million small and medium sized business accounts for e-commerce.
    • The key challenges include user growth, user engagement and competition.
  • BHP Billiton: Don't Miss This Dip
    Tue, Sep. 9 BHP 2 Comments

    Summary

    • BHP Billiton has lower exposure to iron ore compared to its peers. The recent fall in iron ore prices is not a worry.
    • Mexico has opened its oil & gas resources for foreign companies. BHP Billiton is interested in developing the country's deep water resources, which will enhance its petroleum portfolio.
    • Copper output from Escondida mine may increase 220,462 tons (200,000 tonnes) per annum from fiscal year 2018.
    • The recent fall is a buying opportunity for long term buyers.
  • Tesla Motors: The Road To China Isn't Easy
    Tue, Sep. 2 TSLA 99 Comments

    Summary

    • The recent steps taken by the Chinese government promote the use of electric vehicles in the country.
    • Tesla plans to expand its network in China by building 400 charging points across 120 cities, and super charging outlets across 20 cities.
    • The key challenges for Tesla include insufficient charging points, competition, absence of a local partner.
  • The Indian Rupee: New Risks Evolve As Oil Cools And Gold Imports Decline
    Sat, Aug. 30 ICN, INR 3 Comments

    Summary

    • Lower crude oil prices and reduced gold imports will reduce India's current account deficit, thus strengthening the Indian rupee.
    • Starting September 1, 2014, the Supreme Court will decide the fate of 218 coal blocks on a case by case basis. These blocks were allocated from 1993 to 2010.
    • Cancellation of these coal blocks would increase India's coal imports in the future. This will affect the current account deficit as well as investor sentiment.
    • The U.S dollar has been rising over the past few months as the U.S economy has been improving. A stronger dollar will weaken the Indian Rupee.
  • Where Are Gold Prices Heading?
    Thu, Aug. 28 GLD, IAU, SGOL 6 Comments

    Summary

    • The gold demand from India and China is expected to be lower in 2014 compared to last year.
    • Central banks across the globe may add 500 tons of gold to their reserves in 2014, which is higher than last year's addition of 409 tons.
    • Gold is trading within a range of $1,200 to $1,400 per troy ounce since the beginning of 2014.
    • The ongoing Russia-Ukraine conflict, Middle-East crisis, and gold buying by central banks will support gold prices for the remaining part of the year.
  • Why Tata Motors Should Re-Think About The Nano
    Sun, Aug. 24 TTM 7 Comments

    Summary

    • In 2008, Tata Motors showcased the Nano as the world's most affordable car costing $2,500. Nano's journey since then has not been easy.
    • The Nano manufacturing plant had to be shifted from Singur in West Bengal to Sanand in Gujarat. Few fire incidents led to negative publicity for the Nano.
    • In 2013-14 (April 2013 to March 2014), Nano sales were 21,129 units. The current production capacity of the Sanand plant is far below its full capacity of 20,833 cars per month.
    • In order to improve sales, Tata motors launched the Nano Twist with power steering, and Nano CNG emax with bi-fuel options in the last one year.
    • If sales figures don't improve, then Tata Motors has to re-think whether it should continue with the brand in the future.
  • DigitalGlobe: A New Era Of Satellite Imagery Begins
    Fri, Aug. 22 DGI 6 Comments

    Summary

    • The global satellite imagery market is expected to increase from $2.05 billion in 2012 to $5.01 billion in 2019.
    • In June 2014, the U.S. government eased its restriction on commercial satellite imagery. The resolution limit has been changed from 50 centimeters per pixel to 25 centimeters per pixel.
    • Recently, DigitalGlobe launched WorldView-3 satellite having a resolution of 31 centimeters per pixel. The company plans to launch WorldView-4 in mid-2016 having a resolution of 30 centimeter per pixel.
    • DigitalGlobe will benefit as it can deliver high quality images to government agencies as well as technology companies like Google.
  • Facebook: India Update 2
    Wed, Aug. 20 FB 10 Comments

    Summary

    • The Telecom Regulatory Authority of India has rejected the proposal of the Indian telecom operators to charge Over-the-top players for using their network.
    • This will benefit OTT players operating in India. Facebook can monetize its messenger app and WhatsApp in India through mobile payments and remittances without paying the telecom operators.
    • Viber allows its users to call any number, including a non-Viber user, by charging a nominal fee. WhatsApp can introduce a similar feature once voice calling facility is available.
  • Facebook: India Update
    Fri, Aug. 15 FB 9 Comments

    Summary

    • Facebook has 100 million users in India, while WhatsApp has 48 million users in the country.
    • The Telecom Regulatory Authority of India plans to regulate the Over the top apps, and impose connectivity charges along with revenue sharing with the government.
    • This move can affect Facebook's user base in the country, as well as the monetization of WhatsApp and its unbundled messenger app.
  • Will India Increase Iron Ore Imports?
    Editors' Pick • Wed, Aug. 13 AGODY, BHP, FSUGY 4 Comments

    Summary

    • The Indian government announced a couple of infrastructure projects that will increase steel demand in the country.
    • India's steel consumption is expected to increase 5% from 79 million tonnes in 2013 to 83 million tonnes in 2014.
    • The iron ore mining ban in several Indian states could create a shortfall for meeting the steel industry demand. Hence, importing iron ore appears to be an ideal solution.
  • Will Twitter Grab This Opportunity?
    Tue, Aug. 12 TWTR 1 Comment

    Summary

    • The small and medium sized businesses in the U.S. are expected to increase their spending on digital advertising from $5.4 billion in 2010 to $16.6 billion in 2015.
    • Recently, Twitter changed its Ad fee structure to target the small and medium sized businesses. Twitter can target Facebook's disappointed customers who are competing for limited space.
    • However, user growth and user engagement remain a key challenge for Twitter.
  • Uralkali: The Possible Outcome Of The Russia-Ukraine Conflict
    Sat, Aug. 9 URALL 14 Comments

    Summary

    • The U.S. and the European Union have imposed financial sanctions on Russia due to the ongoing Russia-Ukraine conflict.
    • Russia is protecting its economy by increasing bilateral trade with India and China. Russia and India are developing systems to trade in national currencies.
    • If the political climate worsens, then Uralkali could increase its exports to India and China by slashing potash prices, which could affect Canpotex potash sales.
  • Facebook: The Legal Update
    Wed, Aug. 6 FB 2 Comments

    Summary

    • Max Schrems plans to sue Facebook Ireland for violation of data protection and privacy laws. The class action lawsuit claims $671.45 per participating user in damages.
    • WhatsApp has over 500 million users globally. The Facebook/WhatsApp deal is yet to receive regulatory approval from the European Commission.
    • The Austrian lawsuit can act as a hurdle in the company's plan to enter the e-money transfer, and e-commerce business. The WhatsApp deal should receive approval for its monetization.
  • The Outlook For The Indian Rupee
    Mon, Aug. 4 EPI, INDY, PIN 5 Comments

    Summary

    • The Indian rupee appreciated over 6% in the beginning of 2014 due to huge foreign investment in the country's debt and equity market.
    • This rally was led on the hopes of a strong and stable government to revive the Indian economy. However the trend for the INR has reversed in last 2 months.
    • The risk factors for the Indian rupee include high inflation, Middle East crisis, low percentage of forex reserves/ external debt, and Fed tapering.
    • The foreign investors have high expectations from the ruling government. If these expectations are not met, then the Indian rupee is likely to depreciate further.
  • BHP Billiton: Outlook For Fiscal Year 2015
    Wed, Jul. 30 BHP 1 Comment

    Summary

    • The iron ore segment is facing challenges like iron ore price decline, workers strike, and strengthening Australian dollar.
    • The direction of copper prices is also important for copper segment.
    • The coal segment is facing challenges like lower coal prices, rising cost, and strengthening Australian dollar.
    • The outlook for petroleum segment looks good as liquids contribution to the total shale production is expected to rise.
  • Gold Rally: Geopolitical Events Could Provide Steam
    Fri, Jul. 18 GLD, IAU, SGOL 6 Comments

    Summary

    • The Indian gold demand is unlikely to rise this year due to an import duty levied by the government.
    • The Chinese gold demand may weaken due to falsified gold transactions in the country.
    • Federal Reserve policies also indicate a bearish signal for gold.
    • The ongoing Russia-Ukraine crisis, and Iraq crisis could bring a rally in gold prices this year.
  • Is Guinea An Attractive Investment Destination?
    Sat, May. 3 BHP, MT, RIO 2 Comments

    Summary

    • The Guinean government has stripped Vale and Beny Steinmetz Group Resources of the mining rights to Simandou and Zogota.
    • Rio Tinto has sued Vale and BSGR, alleging that the duo devised a fraudulent scheme to steal its mining rights over the northern part of Simandou.
    • Vale is also seeking compensation of $1.1 billion from BSGR due to the losses suffered by the company.
    • Miners in mount Nimba won't be able to export iron ore through Liberia unless they invest in expanding the existing railway line in Liberia.
  • BHP Billiton: Increasing Shareholder Return
    Wed, Apr. 30 BHP 5 Comments

    Summary

    • BHP Billiton is considering the de-merger of its non-core assets, including nickel, thermal coal, and aluminium. Some of these assets have low profit margins.
    • Mick Davis, former Xstrata chief, is considering acquiring the company's non-core assets for $15 billion through X2 Resources.
    • The offloading of non-core assets will enable the company to focus on core assets, including iron ore, copper, coal (metallurgical), potash, and petroleum. This will improve the company's shareholder return.
  • Why Facebook Should Widen Its Partnership With Indian Telecom Operators
    Tue, Apr. 22 FB 4 Comments

    Summary

    • The Telephone Regulatory Authority of India is about to come up with a discussion paper on Over-The-Top players, like WhatsApp.
    • The Indian telecom operators want Over-The-Top players to pay a connectivity charge, as these apps utilize their network resources and are causing revenue loss.
    • WhatsApp has about 40 million users in India. Facebook should widen its partnership with Indian telecom operators to prevent any opposition from this industry in the future.
  • Facebook: Opportunities And Challenges In E-Money Space
    Wed, Apr. 16 FB 50 Comments

    Summary

    • Facebook is about to receive regulatory approval from Ireland’s central bank that can make it an e-money institution.
    • This will give Facebook an opportunity to enter mobile wallet, and remittances business. The challenges include entering money transfer business, addressing privacy and security risks.
    • If Facebook succeeds in targeting these challenges, then this segment can enable the company to enhance its revenue.
  • The Downside Risks For The Indian Rupee
    Mon, Apr. 14 EPI, INDY, PIN 1 Comment

    Summary

    • In March 2014, Foreign Institutional Investors (or FIIs) have bought Indian equity stocks worth $3.3 billion. The Sensex has risen 6.45% on a month on month basis.
    • FIIs are expecting that the 2014 Indian election will deliver a BJP led stable government that will accelerate the Indian economy.
    • However, the downside risks for the INR still remain due to India’s external debt, poor economic conditions and large foreign capital inflows.
  • Economic Challenges For The Next Indian Government
    Thu, Apr. 10 ACN, BHP, CTSH 8 Comments

    Summary

    • India's central elections have begun in April 2014. A new federal government is expected to take charge by June 1, 2014.
    • The new government will have significant economic challenges including fiscal deficit, volatile currency, ailing banking sector, low industrial production growth etc.
    • It is going to be a challenging task for the new government to put the country's economy back on track.
  • Will Facebook Offer More For Titan Aerospace?
    Wed, Apr. 9 FB 26 Comments

    Summary

    • In March 2014, Facebook was in talks to buy solar-powered drone maker Titan Aerospace for $60 million. These drones can be used for providing internet access in remote areas.
    • Google aims to provide internet access in remote areas using solar-powered air balloons.
    • Recently, Google has also shown interest in Titan Aerospace. If Google places an offer to acquire Titan Aerospace, then Facebook may end up paying more to acquire the company.
  • Facebook's WhatsApp Acquisition: New Risks Emerge
    Sun, Apr. 6 FB 24 Comments

    Summary

    • WhatsApp has about 465 million users, and retaining them is important for Facebook.
    • Post-acquisition, WhatsApp has been facing issues like privacy concerns, security risks, and outage.
    • The world of message apps is highly competitive. These risks could lead to decline in the number of WhatsApp users.
  • Potash Corp.: India Lowers Potash Import Price
    Thu, Apr. 3 POT 12 Comments

    Summary

    • India's fiscal deficit for 2013/14 (April 2013 to March 2014) has risen significantly. The Indian government has cut its subsidy on potash to $157 (INR 9,400) per tonne.
    • India has lowered its import price by 25% for 2014/15 (April 2014 to March 2015) compared to 2013/14.
    • This move will affect revenue for Potash Corp, Agrium Inc and The Mosaic Company.
  • The Gold Rally May Not Last Long; Challenge For Barrick Gold?
    Mon, Mar. 31 ABX 15 Comments

    Summary

    • Gold rallied in the beginning of 2014 raising hopes for gold miners. In March 2014, gold prices fell below $1,300 per ounce.
    • Gold prices fell 28% in 2013. Barrick Gold reduced its estimated gold reserves from 140.2 million ounces to 104.1 million ounces this year.
    • If gold prices are not supportive then 2014 could be a challenging year for Barrick Gold.
  • Facebook's Oculus Acquisition: Fundamentals, Rewards And Risks
    Thu, Mar. 27 FB 4 Comments

    Summary

    • Facebook has acquired virtual reality device maker Oculus VR for $2 billion in a cash stock deal.
    • The virtual reality is an emerging market with growth potential as well as competition.
    • If Facebook succeeds in developing a dominant position in the virtual reality market then it can diversify it business, and enhance its revenue.
  • Why Simandou Is Important For Vale
    Sun, Mar. 23 VALE 16 Comments

    Summary

    • A technical committee has recommended the Guinean government to strip Beny Steinmetz Group Resources and its partner Vale of the rights to exploit iron ore deposit in Simandou.
    • Vale has invested over $1 billion in Guinea.
    • If the Guinean government accepts the recommendation of the technical committee, then Vale could lose many benefits of investing in this project.
  • Potash Corp.: The Impact Of Indian Demand, Natural Gas Prices And The Canadian Dollar
    Mon, Mar. 17 POT 20 Comments

    Summary

    • India's potash imports are likely to weaken in 2014/15 due to reduction in subsidy on potash. Further, India may import potash at lower prices.
    • The U.S. natural gas price had risen sharply in 2014 due to cold winter in the U.S.
    • The Canadian dollar has depreciated against the U.S. dollar in this year.
    • Potash Corp's EPS is sensitive to natural gas price, and the strength of the Canadian dollar against the U.S. dollar. They can affect the company's EPS for fiscal year 2014.
  • BHP Billiton: The Impact Of Copper Prices
    Thu, Mar. 13 BHP 2 Comments

    Summary

    • Copper price has fallen sharply this month due to financing problems in China's warehouses.
    • BHP Billiton's profit after tax is sensitive to the copper prices.
    • The fall in copper prices coupled with falling iron ore prices can affect the company's profit after tax in the current fiscal year.
  • Risk Factors For Brazilian And Australian Iron Ore Miners
    Tue, Mar. 11 BHP, FSUGY, RIO 9 Comments

    Summary

    • The major iron ore miners in Brazil, and Australia face risks due to production capacity expansion, iron ore price decline, steel overcapacity in China, and change in China's policy.
    • The risk exposure for major iron ore miners in Brazil, and Australia depends upon their earnings from iron ore, leverage, and China's contribution to their revenue.
    • The risk factors can affect their margin, credit rating, share buyback, and debt reduction program.