NSE/BSE STOCK MARKET TIPS

CLSA Asia Pacific Markets puts buy on Cairn India
1 Nov, 2008.

CLSA Asia Pacific Markets has rated Cairn a “buy” citing attractive valuations and expectations of a rebound in crude oil prices. “Cairn is discounting $35/barrel nominal Brent to perpetuity on our DCF (discounted cash flow) valuation models.

On a nearer term, the stock reacts more to spot crude but is now at $40/barrel on this regression,” the French brokerage said in a client note. “We do not see $30-40/barrel as sustainable despite a worsening global oil demand scenario given tight supply and rising costs of production; we model in $70-80/bbl Brent over 2009-10 ,” it added.