Nucleus Software Exports Ltd. is a Delhi based company with over 20 years experience of Software development for the Banking & Financial Services industry. The company is focused on Banking, Financial Services and Insurance sectors (BFSI). when you think of a software company catering to the Banking & Financial Institution sector, the first thing which comes to an investors mind is US and the crumbling Banks, Financial Institutions and Insurance companies there – a closer scrutiny of the company shows that contribution from US is just about 1% of the total revenues of the company. And so buying stocks of this undervalued IT sector company is advisable.

The company has a 5 acres State of the Art Development Centre in Noida and employs over 2000 people. Besides Noida, the company has development centres in Singapore, Pune and Chennai.

In the mid to late nineties and early two thousands, when most players in the software industry were focusing on low risk service model focusing mainly on the US markets, Nucleus Software chose to take the High Risk model of Product Development and focused on markets in Asia and Far East, the rewards of which have been accruing to the company over the past few years. Infact, the company’s products like FinnOne and Cash@Will command leadership positions in their respective product categories, with FinnOne becoming the world’s largest selling product in its product category.

Nucleus has offices and subsidiaries across the globe – in Japan, Australia, Singapore, Netherlands, UAE, Hong Kong,Philippines and Korea. The company has four development centres globally. The company has a client list comprising of who’s who of the Banking & Financial sector.

The company has been getting various accolades and awards from time to time, recent ones being :-

a) The company’s product FinnOne has recently been ranked as World’s No.1 Selling Lending Software product by International Banking Systems (IBS), UK for the fourth consecutive year.

b) The Annual Report and Accounts of the company for year ended March 31, 2008, have been adjudged as the BEST under the category 'Information Technology, Communication and Entertainment enterprises' of the 'ICAI Awards for Excellence in Financial Reporting', by the Institute of Chartered Accountants of India (ICAI). A Gold shield will be awarded to the Company by ICAI.

c) For the third consecutive year in 2008, the Company has been selected as one of the “Top 25 Companies Adopting Good Corporate Governance Practices”, by the Institute of Company Secretaries of India (ICSI).

d) For the second year running, the Company has been listed among “Top 15 Exciting Emerging Companies to Work For” by NASSCOM. Your Company has also been recognized under “Best Practices” for Performance Management System by NASSCOM for the year 2008.

Investment Rationale:
Strong Order Flow inspite of Economic Slowdown – Inspite of the slowdown being witnessed across the globe, order flows for the company in the recent times have been strong and the company has added new customers. Nucleus bagged 8 new product orders and acquired 6 new customers for implementing 20 product modules of the FinnOne Suite & Cash@Will in the third quarter of year 2008-09. Product orders were bagged from leading financial institutions in Middle East, South East Asia, India & US. Consolidated for nine months ending December 31, 2008, Nucleus has won 20 new customers and 25 new product orders for implementing 84 modules of FinnOne and Cash Management Suite. The order flow continues in the Jan-Mar 09 quarter too as is evident from various announcements made by the company to the Stock Exchanges in recent months. Despite global recession, the company has not lost any clients.

Insulated from US Markets - The company derives just about 1% of its total revenues from the US markets and is largely insulated from the happenings in the US Financial markets. The company thus may not get significantly impacted by the collapsing Banks & Financial Institutions in the US.

Cash is King – The company has Cash and Bank Balance of over Rs 100 cr. The total market cap of the company currently is about Rs 170 cr. The core business is thus going at very attractive valuations. Moreover, the company carries no secured or unsecured loans on its balance sheet and is totally debt free.

The stock of Nucleus Software has fallen from a high of Rs 600 witnessed in 2007 to a current price of around Rs 50. Even though, the slowdown in the world economy and the margin pressure being witnessed by the company may be some of the factors which have taken a toll on the stock price, we feel that the stock of Nucleus Software has been battered primarily on account of the perception factor – when you think of a software company catering to the Banking & Financial Institution sector, the first thing which comes to an investors mind is US and the crumbling Banks, Financial Institutions and Insurance companies there – a closer scrutiny of the company shows that contribution from US is just about 1% of the total revenues of the company.

Besides the pressure on margins being witnessed by the company, one of the reasons for lower profits was Forex losses of Rs 9 cr in the 9 months of the current FY, which may not be of recurring nature. The company has actively taken cost cutting measures and rationalization of resources, the impact of which we believe will show in the coming quarters.

We believe that this debt free company, having Cash and Bank Balance of over Rs 100 cr available at a market cap of Rs 170 cr is attractively valued at the CMP.

Total shareholding of Promoter and Promoter Group: 59.55%
Foreign/Institutional Investors: 14.54%
Total Public shareholding: 25.91%

Investors can choose to buy stocks at the current price and add on declines.

Source: Multi Bagger Recommendation By Ashish Chugh(Investment Advisor) on Poweryourtrade.

Overview: Today, Nifty may face resistance near 2640, 2665, 2680, 2700, 2730 and may take support near 2610, 2585, 2570, 2545, 2520. If Nifty fails to cross 2640-2665 resistance zone, it may surrender all its gains. Accordingly there will be weakness in the Markets if Nifty falls below 2610 level on lower side.

Stock Tips:

1. INFOSYS : Sell this stock at higher levels if it fails to cross 1205, 1210, 1215 for down side targets of 1190, 1175, 1160. Keep Stop loss at 1220.

2. RELIANCE : Sell this stock at higher levels if it fails to cross 1205, 1210, 1215 for down side targets of 1180, 1170, 1160. Keep stop loss at 1220.

Note:- It is always safe to trade in the direction of the Market. Take long positions while the markets are recovering or moving above and take short positions when the markets are falling without signs of recovery. Always follow stop loss levels strictly.

DISCLAIMER:

2. The Stock Tips and recommendations given in this email news letter is for information purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss.Trading involves considerable risk. The Tips in our news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of technical analysis and they do not reflect the fundamental validity of the stocks/securities. we shall not be responsible for any loss incurred for acting on the tips given above.

Overview: Today, Nifty may open at lower levels with down side gap in line with other Global Markets. Today, Nifty may take support near 2665, 2650, 2630, 2600. How ever a counter rally or a bounce back from lower levels is not ruled out. A counter rally from lower levels may face resistance near 2690, 2710, 2725.

Stock Tips:

1. RELIANCE : Sell this stock at higher levels if it fails to cross 1235, 1240, 1245 for down side targets of 1225, 1200. Keep Stop loss at 1250. If this stock stock breaks 1200 on lower side, it may even fall upto 1190-1180.

2. S.B.I., : Sell this stock at higher levels if it fails to cross 1000, 1005 for down side targets of 995, 975. Keep stop loss at 1010. If this stock breaks 975 on lower side, it may even fall upto 965-955.

Note:- It is always safe to trade in the direction of the Market. Take long positions while the markets are recovering or moving above and take short positions when the markets are falling without signs of recovery. Always follow stop loss levels strictly.

DISCLAIMER:

2. The Stock Tips and recommendations given in this email news letter is for information purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss.Trading involves considerable risk. The Tips in our news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of technical analysis and they do not reflect the fundamental validity of the stocks/securities. we shall not be responsible for any loss incurred for acting on the tips given above.

Overview: Today, Nifty may take support near 2760, 2750, 2735, 2720, 2700, 2685 and may face resistance near 2785, 2800, 2820, 2835.
Today, Nifty may take support at lower levels and try to move upwards from lower levels by taking support inbetween 2760-2735 support area. As long as Nifty stays above 2720, there will be chance for bounce back and upward movement. In case if Nifty falls below 2720 and start sustaining there, it is not safe to hold long positions or take long positions.

Stock Tips:

1. INFOSYS : Buy this stock at lower levels or on declines near 1228, 1224, 1220 on evidence of support and bounce back for targets of 1235, 1245, 1255. Keep stop loss at 1215.

2. RELIANCE : Buy this stock at lower levels or on declines near 1280, 1275, 1270 on evidence of support and bounce back for targets of 1290, 1305, 1320. Keep stop loss at 1265.

Note:- It is always safe to trade in the direction of the Market. Take long positions while the markets are recovering or moving above and take short positions when the markets are falling without signs of recovery. Always follow stop loss levels strictly.

DISCLAIMER:
1. The group owners do not have any interest or positions in the above mentioned Stocks.
2. The Stock Tips and recommendations given in this email news letter is for information purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss.Trading involves considerable risk. The Tips in our news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of technical analysis and they do not reflect the fundamental validity of the stocks/securities. we shall not be responsible for any loss incurred for acting on the tips given above.

BSE Sensex: (8843) we had our supports at 8631 and the market bounced from 8619 and has closed flat thus giving away its sideways structure as expected. We now into F&O expiry in just 2 days and so more sideways action and some short covering is not ruled out…downside seems limited and so the only option is perhaps UP…

The support for the Sensex is 8630 and the resistance to the up move is at 9030-9157


Nifty: (2736) the support for the Nifty is at 2685 and the resistance to the up move is at 2789-2824


BHARTIAIRTEL above 637 SL 634 Target 645-651

L&T above 630 SL 622 Target 645-657

Free Day Trading Tips for Tuesday, 24.2.2009.

Overview: Today, Nifty may take support near 2695, 2665, 2640, 2625 and may face resistance near 2730, 2745, 2760, 2775. Today, Nifty may open at lower levels with down side gap inline with global markets. If Nifty fails to take support from 2695-2665 support area, there will be further weakness and Nifty may fall to further lower levels. If Nifty bounces from this support area, there will be minor recovery in the Markets.

Stock Tips:

1. INFOSYS : Sell this stock below 1163 for down side targets of 1150, 1135. Keep stop loss at 1175.

2. RELIANCE : Sell this stock below 1240 for down side targets of 1230, 1220. Keep stop loss at 1245.

Note:- It is always safe to trade in the direction of the Market. Take long positions while the markets are recovering or moving above and take short positions when the markets are falling without signs of recovery. Always follow stop loss levels strictly.

DISCLAIMER:

2. The Stock Tips and recommendations given in this email news letter is for information purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss.Trading involves considerable risk. The Tips in our news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of technical analysis and they do not reflect the fundamental validity of the stocks/securities. we shall not be responsible for any loss incurred for acting on the tips given above.

Gold Carry Trade Special Report:

The Real Story Behind the True Gold Bull Market

On July 24, 1998, Alan Greenspan stood before the House Committee on Banking and Financial Services and said, “Central banks stand ready to lease gold in increasing quantities should the price rise.”

That is exactly what the gold carry trade consists of. It is the process in which central banks lease out gold bullion to be sold on the open market to suppress prices.

Here’s the thing: The large majority of these transactions take place on the London Bullion Market (LBM). This is an over-the-counter (OTC) market in which there is little-to-no transparency. A number of organizations have conducted studies on the amount of gold lending that takes place. Some of the organizations include Gold Fields Mineral Services (GFMS), the World Gold Council (WGC), and Virtual Metals (VM). As a result of the lack of transparency, the numbers reported in regard to gold leasing vary slightly from one another. For the sake of argument, I will be using the most conservative figures reported.

This may be the most significant piece of the gold bull puzzle that will push gold to $2,000 and beyond. I will dig in and share my in-depth research with you, starting with how the process is carried out, then going into the market impacts of the gold carry trade, and concluding with the future of the market for gold leasing.

How Does the Gold Carry Trade Work?

Gold leasing takes three different forms: direct leasing, central bank swaps, and forward hedging.

Direct Leasing

I am going to run through this in a simple step-by-step process. Central banks don’t directly take their bullion to the market and lease it out. They use a vehicle called a bullion bank (BB).

Although bullion banks are numerous, some of the more well known are Barclays, Goldman Sachs, JP Morgan, Bank of America, UBS, and Citibank.

The central banks loan gold to the BBs at a rate of approximately 1%. The BBs take it to the LBM and sell it on the open market. The BBs take the cash from selling the bullion and in turn buy Treasuries.

So if the story were to end here, the bullion banks would just walk away with a net 4% return. But it doesn’t end, because they only have the leased gold for a certain length of time. They eventually have to give the gold back to the central banks, but now they are at risk of price swings in a very volatile market.

The answer to their problem is to go long the futures market. Essentially, they buy futures contracts to hedge their risk. In other words, they secure gold for delivery at a specific price, on a specific date in the future. Once they buy their futures contracts, it doesn’t matter what the price action of gold is.

In a perfect scenario, after the gold lease rate and price risk hedging, the bullion bank will walk with a modest 1–2% gain. The central banks will receive a return on their gold, keep the price of gold suppressed in order to keep real inflation suppressed, and get a boost in the demand for Treasuries. It’s a win-win situation for both the bullion and central banks.

Gold Swaps

Gold swaps are very similar to direct leasing. The difference is that gold swaps usually take place between two central banks. These types of transactions occur in two different forms.

The first is very simple. Essentially, two central banks swap gold reserves and then carry out the action of direct leasing of each other’s gold. The reason for this is that it just adds more confusion for the accounting of the leased gold.

The second is slightly different. This transaction occurs when one central bank exchanges gold for currency with another central bank. Like gold leased to the BBs, a future date and price are set for the redelivery of the gold back to the initial central bank.

The IMF says of this type of gold swap, “Typically, both parties will treat the transaction as a collateralized loan.” Or the CB leasing the gold doesn’t remove the gold from its balance sheets, and the CB receiving the gold doesn’t add it to its balance sheet. As far as accounting goes, no transaction has even taken place. The gold market is flush with new supply and would beg to differ that a transaction hasn’t taken place.

In other words, the CB receiving the gold loans it out on the market while it is still on the balance sheet of the initial central bank. One might refer to this practice as double-counting the reserves.Forward Hedging

Forward hedging is a form of gold leasing practiced by gold producers. The most famous of these is Barrick Gold, but there are many other producers who partake in forward hedging.

Forward hedging is when a producer presells gold on the spot market that has yet to be extracted from the earth. Most of the buyers want delivery of physical gold. So the producer leases gold from a CB, with the idea that it will pay the CB back with future production.

The problem is that these producers often sell their gold at suppressed prices on the spot market and they often sell more gold then they can produce.

On the note of Barrick, did I mention that it has recently been sued for price fixing and price manipulation of the gold market? Barrick and its bank JP Morgan have admitted to price manipulation and that they have worked with the central bank in this process.

Implications of the Gold Carry Trade

The gold carry trade has one main goal, and that is to add huge amounts of supply to the market in order to suppress the price of gold. Although there are other added bonuses along the way for the participants, the main reason for suppressing the price of gold is so the world doesn’t know the true value of worthless fiat currencies.

I would like to use some statistics to inform you as to the implications of gold leasing on the market for gold. Remember that I will use the most conservative numbers I could find.

In 2005, according to GFMS, gold leasing was estimated to have added 2,970 tonnes of supply to the market. In that same year, jewelry demand was 2,700 tonnes, world investment was 736 tonnes, and official central bank sales were 656 tonnes. Over the last 10 years, average mine production has run at an estimated 2,500 tonnes per annum. So the amount of leased tonnage exceeded all of the above-mentioned statistics.

Remember that central banks are not required to report at all on their transactions of loaned gold. So those 2,970 tonnes of extra supply were also counted in central bank reserves, or they were double-counted.

Central banks are the largest holders of gold tonnage, estimated to have around 30,000 tonnes. So they have loaned out approximately 10% of their total reserves.

How Long Can This Go On?

If you are looking at this in a practical way, you probably came up with the exact questions I did when I first started to read about the gold carry trade. When the gold enters the market via a BB, it all has to be bought back at the end of the lease contract. Doesn’t that put us back at square one with the amount of supply in the market negating any long-term implications?

The answer would be yes if there were just a couple of transactions. But there are several gold leasing contracts signed every day. All the supply is constantly being recycled in and out of the market and there is always fresh gold being leased into the market.

The length of a gold leasing contract can extend anywhere from one month to several years. This allows for the central banks to analyze these markets and best time their transactions and how long they will be, in order to suppress the price of gold.

So can this go on forever? Definitely not, and the implications of the gold carry trade coming to end will bring with it the most spectacular price actions ever seen in the gold market.

Let me tell you why the gold carry trade will not be sustainable forever. It’s very simple. All we have to do is look at the step where bullion banks have to buy back the gold sold on the spot market in order to pay back the central banks.

In order for this to be profitable for the BBs, the price of gold has to experience very limited gains during the time the gold is leased out. Or the price of the futures contract purchased by the BB has to be near enough to the price of gold when the bullion bank initially unloaded the leased bullion on the spot market. If the price of gold heads too high, it will not be profitable for BBs to partake in being the intermediary for such transactions.

All we have to do is look at the fundamentals for gold and we realize very quickly that the price of gold is definitely going to go higher one way or another, which will disallow future leasing in the gold market. You are probably well aware of the fundamentals: Every one of the major economies of the world printing money at a rate of over 10% per annum; the Mount Everest of debt from both budget and trade deficits; an inevitable recession here in the U.S.; the inability of the U.S. to raise interest rates, due to the complete mess of the housing market; rising energy costs putting downward pressure on the U.S. dollar and increasing inflation in every other aspect of the economy; mine supply at historic lows; a possible U.S. policy that would include trade protectionism against China; and, last, but definitely not least, a U.S. Federal Reserve whose main goal is to create credit by keeping interest rates below the rate of inflation (negative real interest rates).

Fundamentals are fundamentals, but there has been some action in the International Monetary Fund (IMF) recently on this very topic. Before I go any further, I just want to let you know that I don’t trust the IMF any further than I can throw it. And I don’t really expect any timely results from its actions. What is important is that the notion of the gold carry trade is coming forefront. Here’s what’s going on in the IMF.

Hidetoshi Takeda of the IMF’s statistics department recommended in early 2006 that all loaned gold be excluded from the central bank’s reserve figures. The IMF’s committee on reserve assets considered Mr. Takeda’s paper and came to the conclusion that a new definition of gold reserves excluding loaned gold needs to be officially documented. It also stated that unallocated gold loans should be disallowed. Nothing recommended in Mr. Takeda’s proposal was rejected. Full details of his report can be read here: http://www.imf.org/external/np/sta/bop/pdf/resteg11.pdf

The IMF continued its research regarding the issue and made another report with a similar conclusion. What does this all mean? Well, the IMF is currently working on another official proposal to be worked through the system making it necessary to make all loaned gold public information and to exclude loaned gold from reserve accountings. The IMF currently “encourages” central banks to record gold loans/swaps, but does not “require” the recording.

If everything goes perfectly, and I don’t believe that it will, we could see these actions implemented by the IMF at the end of 2008. As I said, it seems like a far reach, but the more people become aware of the gold carry trade, the sooner it will come to an end. And I don’t like to put my bets on the IMF to make progress with in the accounting of leased/swapped gold, but it DOES have the power to change how central banks report the reserve holdings of gold.

The eventual unwinding of the gold carry trade, whether it be from the IMF or just market fundamentals, will bring amazing action to the gold market. Remember that gold leasing didn’t begin until after the precious metals run from 1979–1980. For the bull market in gold to continue, it will need to overcome the barriers set by central banks’ leasing of gold. But when this does occur, the floodgates will open and we can expect to see the price of our favorite yellow metal skyrocket.

Special Report: 5 entirely new ways to play the gold trend. Including one hidden way to snap up gold for less than one penny per ounce… Read the entire report here.