Markets Today

1. ULJK GroupSince 1903 Markets Today Jamnadas Khushaldas Shares & Stock Broker Pvt Ltd(NSE) ULJK Securities Pvt. Ltd.(BSE) ULJK Commodities Pvt. Ltd.(MCX)

2. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Where are the markets heading? Trust & Commitment

3. ULJK GroupSince 1903 Let us look into the various issues which are affecting the market Investment Banking, Equities, Derivatives & Commodities Broking House • Crude Oil Outlook • Rising Inflation • Domestic Liquidity • What is going on in the market? • Political Scenario • Unprecedented US financial Crisis • India’s Nuclear foray • Corporate Earnings Snapshot • To conclude Trust & Commitment

4. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Nifty Trust & Commitment

5. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Crude Oil Outlook In our last presentation (Strategy report dated 25th July 2008 – Crude Worries) we predicted crude oil prices to fall below $100 bbl by November 2008. As expected the crude oil prices peaked at $147 bbl in August 2008 and fell subsequently as the rise was not purely based on fundamentals. US$ appreciation majorly driven by deleveraging and regulatory actions to control speculation . Thus, oil prices corrected, eventually, making a low of $91 bbl in September 2008. The current supply of oil exceeds demand by 3.52 mbpd - the situation better off nil surplus in 2007. There is no major mis-match between demand and supply. (Source: IEA) • The surplus could eventually rise meaning the prices of oil should fall after the slowing demand from US. • We expect the oil prices to settle between US$ 85 – 95 by December 2008 and bring relief to the global economy Trust & Commitment

6. ULJK GroupSince 1903 Crude Investment Banking, Equities, Derivatives & Commodities Broking House Trust & Commitment

7. ULJK GroupSince 1903 Rising Inflation Investment Banking, Equities, Derivatives & Commodities Broking House Inflation over a decade (Source: RBI) • Inflation is seen rising due to rising commodity prices like steel, primary articles and petro-products. • Inflation ended for the week Sep 13 was 12.14%, same as previous week . • In our opinion inflation has peaked out at 12.63% (Aug 2008). We expect inflation to fall gradually over the next two months. • Our target on inflation is ~ 10% by January 2009. Trust & Commitment

8. ULJK GroupSince 1903 Domestic Liquidity Investment Banking, Equities, Derivatives & Commodities Broking House • Steady FII inflows into the capital market till December 2007 had created excess liquidity; whereby Reserve Bank of India has stepped in to remove the excess liquidity by various methods • RBI is absorbing excess liquidity by increasing the CRR and Market Stabilization Scheme with an objective to balance the growth (GDP) and rising inflation. • RBI has also hiked the repo rate to control the credit growth • Inflation (WPI) has touched peak of 12.63% for week ended August, 2008. Steep increase in inflation has complicated the matter for the RBI to balance the economic growth and control the inflation. • Steps taken by the RBI started giving the desired results and inflation is under control and has peaked out and looking downwards. • CRR has been hiked on 7 occasions during the last 12 months • In fact there is tightness in the liquidity situation on account of advance tax outflow of Rs 25,000 crores and FII outflow • We feel the RBI will now relax some of the liquidity tightening measures that they initiated earlier Trust & Commitment

9. ULJK GroupSince 1903 What is going on in the market? Investment Banking, Equities, Derivatives & Commodities Broking House • Net FII outflow of ~US$ 8.55 billion from January 2008 to 25th Sept 2008 due to global meltdown facilitated by US sub-prime crises • Liquidity requirement of Foreign Institutional Investors resulting in massive selling • Concerns on possible economic slowdown. • Domestic institutions were net buyers worth $ 2.74 billion from January to 25th Sept.2008. • Domestic institutions are not very active in the market due to the sharp market correction • Concerns on corporate earnings, interest rate hike and rising inflation has scared investors • Lack of interest in the market by retail investors and HNI’s • Lack of interest from the domestic institutions and global sell off has affected the Indian market. • The silver lining is that there is sharp increase in FII registration with SEBI. Net addition of 289 FII’s from January to September 2008. (Total registered FII’s – 1,508, total sub-accounts – 4,583 as on 25th September 2008) Trust & Commitment

10. ULJK GroupSince 1903 Political Scenario Investment Banking, Equities, Derivatives & Commodities Broking House • Confusion with regard to political uncertainty has at last cleared now with the UPA government at the centre having secured the confidence vote at the parliament on the nuclear issue. • Now the UPA government is more confident after the nuclear deal clearance from the G7 countries and NSG meeting at Vienna • Next regular election is due only in March 2009. First priority of the government is to control the inflation. • Now the Govt. can move forward with pending reform bills • Banking Insurance and Pension bills to be presented to the parliament on priority basis. • Any fresh initiatives from the government to push the reform process forward may provide a positive trigger to the market. Trust & Commitment

11. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Unprecedented US Financial market crisis Federal Reserve has announced $700 billion bailout proposal for the US financial sector Additionally the Federal Reserve has also announced bailout for Fannie Mae, Freddie Mac and AIG Insurance worth $200 billion (Fannie Mae+ Freddie Mac) and $85 billion respectively. This will increase the US fiscal deficit to ~9.3% from the current ~2.6%. Such massive fiscal account deficit may demand increase in interest rates Rising interest rates will result in falling bond prices and increasing bond yield To support bond prices the Federal Reserve may resort to buying US treasury securities. This will result in depreciation of the US dollar In midst of falling dollar value, it provide a good opportunity to invest in Indian equities to take advantage of the likely scenario of US financial markets further deteriorating, and US currency depreciating against other currencies including Indian Rupee. Investors can bet on investment appreciation on account of currency and also appreciation in equity market. Trust & Commitment

12. ULJK GroupSince 1903 India's Nuclear Foray and joining the elite nuclear club Investment Banking, Equities, Derivatives & Commodities Broking House • With the clearance of nuclear deal at NSG and US congress, we feel that capital goods and the power sector will get boost • The Department of Atomic Energy (DAE) has forecasted the power generation capacity requirement of India to be at ~1.3 million MW by 2050 (~1.35 million MW by 2052). (Our report dated 11th August 2008 - “How Vital is Nuclear Energy to India”). • By 2022 India will generate ~29,000 MW of nuclear energy • The incremental nuclear power capacity to be added by 2022 will be ~25,000 MW resulting in investment of ~Rs 1,912.50 bn for Pressurized Heavy Water Reactor (PHWR) plants till 2022. • This creates a good medium to long term opportunity for the engineering (turnkey projects) players in India. • Capital goods/engineering players will start getting orders for the PHWR and BOP equipments by 2009-10. • Capital goods and power sectors are looking good from medium to long term point of view (Source: IAEA) Trust & Commitment

13. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Corporate earnings snapshot The estimated total sales of NIFTY 50 companies for the quarter ended September 2008 is INR 2733.7 bn vs. INR 2091.0 bn for the quarter ended September 2007 which shows a growth of 30.7% YOY, while the estimated total net profit of NIFTY 50 companies for the quarter ended September 2008 is INR 406.1 bn vs. INR 351.5 bn for the quarter ended September 2007 which shows a growth of15.7% YOY. We can see that the top line growth is good but the bottom line growth is not very impressive. The estimated net profit margin for quarter ended September 2008 is 14.8% vs. 16.8% for the quarter ended September 2007.There is pressure on the margins due to higher raw material prices and interest rates. (Source: ULJK Research, Bloomberg) Trust & Commitment

14. Indian economy is relatively insulated from global slowdown, but not the equity market Crude oil now trading at $105 bbl after rising to $148 per barrel in August 2008 Sharp rally in crude prices could be mainly due to speculation amidst depreciating US currency Rising commodity prices resulting in cost push inflation In midst of rising interest rates, the lending to the SME’s will reduce (Large caps will be affected relatively lesser) Resulting in slow down of capital expenditure cycle and thus slowing manufacturing sector growth as reflected in the IIP numbers (8.28% growth in July 2007 and 7.1% growth in July 2008) Corporate earnings will be impacted. The impact could be seen in FY 2009. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Trust & Commitment

15. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House • To Consolidate: • Market has retraced by 38% from its peak and valuations are looking attractive. • We expect the market to be sideways till FY 2009, awaiting a strong trigger. • We recommend to buy on dips for capital appreciation in medium to long term perspective. • Buy selected large caps around 3,850 Nifty index for investment purpose • Keep watch on key developments • Reform/Fresh initiatives as the regrouped allies of the UPA have agreed to cooperate. • Cooling of Crude oil prices will reduce the subsidy burden • Cooling commodity prices resulting in falling inflation and improvement in corporate earnings • Reserve Bank of India to relax some of the liquidity tightening measures and to spurt economic growth. Trust & Commitment

16. ULJK GroupSince 1903 Investment Banking, Equities, Derivatives & Commodities Broking House Thank You DISCLAIMER This report has been prepared by the research department of ULJK Securities Pvt Ltd. and is for information purposes only. This report is not construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of ULJK Securities Pvt Ltd. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon. ULJK Securities or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. ULJK Securities or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations. ULJK securities and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Trust & Commitment