RIL announced its seventh discovery in the 635 square-kilometre block, CB-ONN-2003/1 (CB 10 A&B), in the Cambay Basin, about 130 kilometres from Ahmedabad. (BS)
SBI to announce its base rate today; hints at fixing it at 8%. (ET)
Tata Motors plans to raise Rs47bn through a combination of instruments to meet capital requirements and cut debt. (BS)
ITC is setting up another unit at its existing paper mill in Bhadrachalam at a cost of Rs10bn to add a paper plant of 0.2mtpa capacity. (BS)
PowerGrid Corp would invest Rs580bn for setting up network to facilitate evacuation of electricity from power surplus states to others. (FE)
ITC plans to extend its Vivel personal care range to deodarants and talcs. (BS)
NTPC plans to raise a syndicated loan of US$300mn to finance its ongoing capacity addition initiatives. (BS)
Plethico Pharmaceuticals has joined hands with US retailing giant Wal-Mart for supplying its nutritional products to US consumers. (ET)
IDFC has received the shareholders’ approval to raise Rs35bn and also to double its borrowings to Rs800bn. (BS)
Reliance Infrastructure to borrow around Rs26bn for the Bandra-Worli-Haji Ali Sea Link project in Mumbai. (ET)
Essar Steel has acquired the UK based steel processor Servosteel for an undisclosed amount. (ET)
IndusInd Bank to raise upto Rs10bn through share sale. (ET)
NTPC has rejected a proposal for pooling of gas prices for the power sector. (BS)
Pantaloon Retail to receive Rs4bn in lieu of convertible warrants issued to promoters. (ET)
Crompton Greaves through its subsidiary CG Power Systems USA Inc opens its transformer unit in US. (BL)
M&M may set up aircraft financing arm in Australia. (BS)
Tube Investments shifts China plant to Chennai. (BL)
CCCL has bagged contracts totaling Rs1.8bn for constructing 10 elevated stations for Chennai Metro Rail project. (BL)
Strides Arcolab plans to raise up to US$100mn through various financial instruments, also plans to hike the borrowing limit to Rs25bn. (ET)
PowerGrid to invest Rs 58-k cr on transmission network it plans to invest Rs 550 bn for adding 37,000 MW (FE)
IRDA has ordered life insurers to offer customers a guaranteed return of 4.5% per annum on pension and annuity plans as part of its new, tighter norms. (ET)
Finance Minister has hinted that the RBI may not increase key policy rates before its next monetary policy review due on July 27. (BS)
Growth in six key infrastructure sectors decelerated for a consecutive month to 5% in May, as output in coal, cement and finished steel slowed. (BS)
Mobile phone firms in India added 16.3mn new users in May taking the total wireless user base to 617.5mn. (ET)
The government is believed to be in the final stages of formulating a gas allocation policy, which is likely to give preference to new power plants over expansion projects. (ET)
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Wednesday, June 30, 2010
DAILY NEWS ROUNDUP- JUNE 30,2010
State Bank of India fixed its base rate at 7.5%. (ET)
JSW Steel is planning to invest Rs750bn in both brownfield and greenfield projects to increase its capacity over fourfold to 32mtpa from the present 7.8mtpa by the turn of 2020. (ET)
JSW Steel may take another six months before Japan’s second-largest steel company, JFE Holdings, buys a stake in it. (BS)
Bharti Airtel said it will invest US$100mn over the next three years to expand in Gabon. (ET)
ONGC and its partners will sign contracts for half of 34 oil and gas blocks awarded in the latest round of auction under the NELP. (ET)
ONGC board is expected to consider a fresh cost estimate for development of the G1-GS15 marginal gas field in KG basin by April 2011, exactly five years behind the original schedule. (BL)
ICRA has upgraded the long-term rating on outstanding Rs45.9bn long-term bonds programme of Indian Oil Corporation from LAA+ and ‘positive outlook’ to LAAA. (FE)
Reliance Communications is likely to acquire privately-held cable television company Digicable in a cashless deal. (ET)
Ashok Leyland has increased prices of its medium and heavy duty vehicles by about 3% with immediate effect. (FE)
Pantaloon Retail has allotted 10mn warrants to its promoters' group company, Future Ideas Realtors India Ltd. (FE)
Cadila Healthcare (Zydus Cadila) has launched generic version of Anastrazole tablets (1 mg) in the US market upon receiving an approval from the US FDA. (BL)
Maytas Infrastructure has reported a net loss of Rs2.5bn FY10, compared with a net loss of Rs4.7bn last year. Its net revenues declined 33.2% to Rs11bn from Rs16.4bn in the previous year. (BS)
Tata Teleservices, which has won 3G spectrum licences in nine circles, has written to the government asking it to delay the allocations until the issue on usage of Chinese equipment is cleared. (BS)
Union Bank of India said it has raised Rs5bn as capital by way of debt. (ET)
Apollo Tyres would increase prices of its products next week. (FE)
Subros has picked up a minority stake in a new 74:26 joint venture with Japan’s Denso. (ET)
Alembic has decided to hive off its core pharma division into a new entity - Alembic Pharma. (ET)
RCF has proposed to invest US$1.5bn to set up a gas-based fertiliser plant with a capacity of 1mn tons in natural gas-rich Ghana. (BS)
AstraZeneca Pharma and Sulzer have sought to delist their Indian subsidiaries. (ET)
City Union Bank has received board approval to raise up to Rs3bn via QIP. (ET)
REI Agro’s Rs12.5bn rights issue will open for subscription for shareholders from Wednesday. (FE)
Aqua Logistics board has approved a proposal to raise funds to the extent of US$70mn. (FE)
Spice Mobiles said it would merge with the parent company Spice Televentures as part of a plan to consolidate the group's telecom businesses. (FE)
Uflex will invest over US$250mn in the next two years to enhance output at its manufacturing plants and set up new units. (FE)
Nasscom will make a pitch to the government, seeking continuity of tax benefits on special economic zones (SEZs) in the Direct Taxes Code (DTC). (ET)
The government has extended the special duty on import of soda ash from China. (ET)
The Petroleum and Natural Gas Regulatory Board (PNGRB) issued licence rules for companies laying gas pipelines. (FE)
The Union finance ministry has agreed to states’ demand that tobacco be kept within the ambit of Goods and Services Tax (GST) and alcohol outside it. (BS)
SEBI on Tuesday said that FIIs will now have to disclose information on Indian securities lent by them to overseas entities (for the purpose of short selling) on a weekly rather than a daily basis. (BL)
JSW Steel is planning to invest Rs750bn in both brownfield and greenfield projects to increase its capacity over fourfold to 32mtpa from the present 7.8mtpa by the turn of 2020. (ET)
JSW Steel may take another six months before Japan’s second-largest steel company, JFE Holdings, buys a stake in it. (BS)
Bharti Airtel said it will invest US$100mn over the next three years to expand in Gabon. (ET)
ONGC and its partners will sign contracts for half of 34 oil and gas blocks awarded in the latest round of auction under the NELP. (ET)
ONGC board is expected to consider a fresh cost estimate for development of the G1-GS15 marginal gas field in KG basin by April 2011, exactly five years behind the original schedule. (BL)
ICRA has upgraded the long-term rating on outstanding Rs45.9bn long-term bonds programme of Indian Oil Corporation from LAA+ and ‘positive outlook’ to LAAA. (FE)
Reliance Communications is likely to acquire privately-held cable television company Digicable in a cashless deal. (ET)
Ashok Leyland has increased prices of its medium and heavy duty vehicles by about 3% with immediate effect. (FE)
Pantaloon Retail has allotted 10mn warrants to its promoters' group company, Future Ideas Realtors India Ltd. (FE)
Cadila Healthcare (Zydus Cadila) has launched generic version of Anastrazole tablets (1 mg) in the US market upon receiving an approval from the US FDA. (BL)
Maytas Infrastructure has reported a net loss of Rs2.5bn FY10, compared with a net loss of Rs4.7bn last year. Its net revenues declined 33.2% to Rs11bn from Rs16.4bn in the previous year. (BS)
Tata Teleservices, which has won 3G spectrum licences in nine circles, has written to the government asking it to delay the allocations until the issue on usage of Chinese equipment is cleared. (BS)
Union Bank of India said it has raised Rs5bn as capital by way of debt. (ET)
Apollo Tyres would increase prices of its products next week. (FE)
Subros has picked up a minority stake in a new 74:26 joint venture with Japan’s Denso. (ET)
Alembic has decided to hive off its core pharma division into a new entity - Alembic Pharma. (ET)
RCF has proposed to invest US$1.5bn to set up a gas-based fertiliser plant with a capacity of 1mn tons in natural gas-rich Ghana. (BS)
AstraZeneca Pharma and Sulzer have sought to delist their Indian subsidiaries. (ET)
City Union Bank has received board approval to raise up to Rs3bn via QIP. (ET)
REI Agro’s Rs12.5bn rights issue will open for subscription for shareholders from Wednesday. (FE)
Aqua Logistics board has approved a proposal to raise funds to the extent of US$70mn. (FE)
Spice Mobiles said it would merge with the parent company Spice Televentures as part of a plan to consolidate the group's telecom businesses. (FE)
Uflex will invest over US$250mn in the next two years to enhance output at its manufacturing plants and set up new units. (FE)
Nasscom will make a pitch to the government, seeking continuity of tax benefits on special economic zones (SEZs) in the Direct Taxes Code (DTC). (ET)
The government has extended the special duty on import of soda ash from China. (ET)
The Petroleum and Natural Gas Regulatory Board (PNGRB) issued licence rules for companies laying gas pipelines. (FE)
The Union finance ministry has agreed to states’ demand that tobacco be kept within the ambit of Goods and Services Tax (GST) and alcohol outside it. (BS)
SEBI on Tuesday said that FIIs will now have to disclose information on Indian securities lent by them to overseas entities (for the purpose of short selling) on a weekly rather than a daily basis. (BL)
Monday, June 28, 2010
R COM,GTL INFRA DEAL!!
The Boards of Reliance Communications Ltd. (RCOM), and its subsidiary, Reliance Infratel Ltd. and GTL Infrastructure Ltd. (GTL INFRA) Sunday in-principle approved a Rs. 50,000 crore (USD 11 billion) deal to create the world’s largest independent telecom infrastructure company, neither owned nor controlled by any telecom operator.
On June 23, CNBC-TV18, quoting VCC Circle had reported that GTL Infrastructure and Reliance Infratel are in talks to merge their tower operations.
The transformational deal will be implemented through a demerger of RINFRATEL’s tower assets into GTL INFRA. Reliance Infratel will demerge its tower assets into GTL Infra fibre optic network. The related assets will however remain with RCOM.
On June 23, CNBC-TV18, quoting VCC Circle had reported that GTL Infrastructure and Reliance Infratel are in talks to merge their tower operations.
The transformational deal will be implemented through a demerger of RINFRATEL’s tower assets into GTL INFRA. Reliance Infratel will demerge its tower assets into GTL Infra fibre optic network. The related assets will however remain with RCOM.
Sunday, June 27, 2010
5260 IS THE PIVOT POINT FOR NIFTY
After a positive start to the week, the markets exhibited lacklustre movement on most days and pared gains at close. Eventually, the benchmark indices ended flat. The Sensex, which rallied to a high of 17,920, closed at 17,574, up just four points.
Among index stocks, Wipro slumped nearly five per cent to Rs 391. Jindal Steel, Tata Motors, SBI, TCS, HDFC Bank, NTPC and Larsen & Toubro fell two-four per cent. On the other hand, ONGC soared nearly six per cent to Rs 1,264. Reliance Communications, Hindustan Unilever, Maruti Suzuki, Tata Steel, Cipla, Tata Power, ITC and Hindalco were up two-four per cent.
The Nifty moved in a range of 107 points — it touched a high of 5,367 and a low of 5,260 this week. It settled with a gain of six points at 5,269.
Last week, I had mentioned that the markets will display strength only if the Nifty closes above 5,300. The Nifty closed above 5,300 and thereafter consolidated. Significant stock-specific gains were seen during the week.
Incidentally, the Nifty broke the 5,300 level on Friday, and closed at 5,269. The index has a very near support at 5,260, which is the lower end of the bollinger band. In case the Nifty trades below this for a longer period on Monday and closes below it, we could see a breakdown and the index may possibly test 5,200.
On the positive front, if the Nifty is able to hold on the 5,260 support, it is likely to bounce to 5,320 and attempt a move to 5,370 during the week.
One can look at 5,260 as the pivot point, with support below it around 5,230-5,200. On the higher side, the index will face resistance around 5,310-5,335.
The overall trend remains bullish, although select momentum indicators — MACD and stochastic slow — are showing signs of tiredness. Interestingly, weekly momentum indicators like MACD and directional index have turned positive. Hence, any major downside can be ruled out for the moment.
Among index stocks, Wipro slumped nearly five per cent to Rs 391. Jindal Steel, Tata Motors, SBI, TCS, HDFC Bank, NTPC and Larsen & Toubro fell two-four per cent. On the other hand, ONGC soared nearly six per cent to Rs 1,264. Reliance Communications, Hindustan Unilever, Maruti Suzuki, Tata Steel, Cipla, Tata Power, ITC and Hindalco were up two-four per cent.
The Nifty moved in a range of 107 points — it touched a high of 5,367 and a low of 5,260 this week. It settled with a gain of six points at 5,269.
Last week, I had mentioned that the markets will display strength only if the Nifty closes above 5,300. The Nifty closed above 5,300 and thereafter consolidated. Significant stock-specific gains were seen during the week.
Incidentally, the Nifty broke the 5,300 level on Friday, and closed at 5,269. The index has a very near support at 5,260, which is the lower end of the bollinger band. In case the Nifty trades below this for a longer period on Monday and closes below it, we could see a breakdown and the index may possibly test 5,200.
On the positive front, if the Nifty is able to hold on the 5,260 support, it is likely to bounce to 5,320 and attempt a move to 5,370 during the week.
One can look at 5,260 as the pivot point, with support below it around 5,230-5,200. On the higher side, the index will face resistance around 5,310-5,335.
The overall trend remains bullish, although select momentum indicators — MACD and stochastic slow — are showing signs of tiredness. Interestingly, weekly momentum indicators like MACD and directional index have turned positive. Hence, any major downside can be ruled out for the moment.
SUZLON ENERGY---NOT A RIGHT ISSUE!!
Shareholders can refrain from applying to the rights offer made by Suzlon Energy, as the additional capital from the rights is unlikely to be earnings-accretive in the medium-term. The offer's primary objective is to discharge certain loans availed of by the company from the promoter group. The rights offer, together with any FCCB conversion in the medium-term, could pose the risk of earnings dilution. While the long-term prospects for the wind energy sector and, therefore, for Suzlon, along with its foreign subsidiaries remain promising, the group has the immediate challenge of meeting its repayment obligations. While FCCB conversions could put to rest the company's debt obligations, the near-term impact of any such equity expansion on the earnings could be dilutive.
The rights offer is available at Rs 63 a share (current market price is Rs 58). Shareholders will receive two shares for every 15 held by them. At the offer pricethe shares discounts its expected consolidated per share earnings for FY-12 by 15 times, assuming that all the FCCBs due in 2012 are converted.
The offer and objective
Suzlon Energy seeks to raise about Rs 1,300 crore through this rights issue which would expand the equity base by 13 per cent. A good portion of the funds would be utilised towards discharge of loans outstanding to promoter group companies. The lender promoter has agreed to subscribe to any rights renounced by other promoters/promoter group as well as apply for any unsubscribed portion of this issue to ensure that the mandated 90 per cent is subscribed for.
Besides discharge of loan, the offer proceeds would be used for general corporate purposes, which include working-capital requirements.
Multiple challenges
Suzlon Energy has been confronted by challenges on multiple fronts, all at the same time. For one, the company's acquisition of the Germany-based wind equipment player, Repower, in 2007 was a highly leveraged acquisition, using the FCCB route. Two, the economic crisis in the US meant a sharp drop in investments in wind energy in the region in 2008, resulting in decline in equipment orders.
Three, the company's own share price bore the brunt of the stock market correction in 2008 and slid to levels far below the originally agreed conversion price. This meant renegotiating the FCCB terms — increasing coupon rate and decreasing conversion price. The result of this would be higher interest provision (on coupon rate of 7.5 per cent) or a higher equity expansion if the bonds are converted. For instance, the FCCBs due in 2012 would result in a close to 15 per cent expansion of the existing equity base. A more recent development is the European economic crisis.
Suzlon on a consolidated basis receives close to half its revenues from European countries. However, the risk here may not be too high, as barring countries such as Spain (which are currently in financial trouble), most other European countries are unlikely to cut-back on investments in wind energy, given their renewable energy mandate and incentives on the same.
Strategy
Suzlon Energy has not, however, been a mute witness to these looming challenges. The company has been proactive in reducing/refinancing/restructuring its debt. To reduce the risk of currency volatility, it consolidated its debt in rupee terms. This also ensured that the entire group can draw down from a common pool.
The company has also received moratorium on its rupee term loan facility, the repayment of which commences in December 2011. It has also managed to reduce the conversion price of its FCCBs, much of it being due in June 2012 and October 2012, to prices closer to the current market price. This would reduce the risk of repayment of bonds arising from any non-conversion in to shares. It also sold part of its stake in foreign subsidiary, Hansen Transmissions, to generate cash.
Suzlon has been on its feet on the business front too. As order flows from US markets dwindled, it ramped up projects in markets such as China and Australia. The company's local unit in China has aided in gaining orders in the region, despite Chinese competition. Going forward, the order flow in the US can be expected to pick up as investment tax credit ends in 2010. In India, the increase in base pre-tax return on equity for renewable projects can also aid orders as projects become more lucrative. The company expects 50 per cent of its sales volume from the domestic market.
In the next one year or so, Suzlon is, therefore, likely to ensure that its working-capital cycle is sufficiently healthy to meet obligations. This may also mean that the company would remain selective in its order intake, ensuring that its funding requirements are not too stretched.
Suzlon, along with subsidiaries (other than REpower), had orders worth Rs 18,400 crore. REpower alone has projects with potential to generate sales of Rs 12,000 crore (Euro 2.1 billion). The orders put together are about 1.5 times FY-10 sales. However, any reschedule in equipment deliveries, especially for REpower in Europe, cannot be ruled out.
Suzlon Energy ended FY-10 with sales of Rs 20,619 crore and losses of Rs 982 crore as a result of lower volumes and slower execution. The consolidated sales and profits are not comparable with the previous year as revenues from Hansen Transmissions did not flow for the full year in FY-10, as a part-stake sale has ensured that the latter is no longer a subsidiary. The company' s debt equity ratio is expected to come down to 1.5 times, post rights, from a ratio of close to two times now.
The rights offer is available at Rs 63 a share (current market price is Rs 58). Shareholders will receive two shares for every 15 held by them. At the offer pricethe shares discounts its expected consolidated per share earnings for FY-12 by 15 times, assuming that all the FCCBs due in 2012 are converted.
The offer and objective
Suzlon Energy seeks to raise about Rs 1,300 crore through this rights issue which would expand the equity base by 13 per cent. A good portion of the funds would be utilised towards discharge of loans outstanding to promoter group companies. The lender promoter has agreed to subscribe to any rights renounced by other promoters/promoter group as well as apply for any unsubscribed portion of this issue to ensure that the mandated 90 per cent is subscribed for.
Besides discharge of loan, the offer proceeds would be used for general corporate purposes, which include working-capital requirements.
Multiple challenges
Suzlon Energy has been confronted by challenges on multiple fronts, all at the same time. For one, the company's acquisition of the Germany-based wind equipment player, Repower, in 2007 was a highly leveraged acquisition, using the FCCB route. Two, the economic crisis in the US meant a sharp drop in investments in wind energy in the region in 2008, resulting in decline in equipment orders.
Three, the company's own share price bore the brunt of the stock market correction in 2008 and slid to levels far below the originally agreed conversion price. This meant renegotiating the FCCB terms — increasing coupon rate and decreasing conversion price. The result of this would be higher interest provision (on coupon rate of 7.5 per cent) or a higher equity expansion if the bonds are converted. For instance, the FCCBs due in 2012 would result in a close to 15 per cent expansion of the existing equity base. A more recent development is the European economic crisis.
Suzlon on a consolidated basis receives close to half its revenues from European countries. However, the risk here may not be too high, as barring countries such as Spain (which are currently in financial trouble), most other European countries are unlikely to cut-back on investments in wind energy, given their renewable energy mandate and incentives on the same.
Strategy
Suzlon Energy has not, however, been a mute witness to these looming challenges. The company has been proactive in reducing/refinancing/restructuring its debt. To reduce the risk of currency volatility, it consolidated its debt in rupee terms. This also ensured that the entire group can draw down from a common pool.
The company has also received moratorium on its rupee term loan facility, the repayment of which commences in December 2011. It has also managed to reduce the conversion price of its FCCBs, much of it being due in June 2012 and October 2012, to prices closer to the current market price. This would reduce the risk of repayment of bonds arising from any non-conversion in to shares. It also sold part of its stake in foreign subsidiary, Hansen Transmissions, to generate cash.
Suzlon has been on its feet on the business front too. As order flows from US markets dwindled, it ramped up projects in markets such as China and Australia. The company's local unit in China has aided in gaining orders in the region, despite Chinese competition. Going forward, the order flow in the US can be expected to pick up as investment tax credit ends in 2010. In India, the increase in base pre-tax return on equity for renewable projects can also aid orders as projects become more lucrative. The company expects 50 per cent of its sales volume from the domestic market.
In the next one year or so, Suzlon is, therefore, likely to ensure that its working-capital cycle is sufficiently healthy to meet obligations. This may also mean that the company would remain selective in its order intake, ensuring that its funding requirements are not too stretched.
Suzlon, along with subsidiaries (other than REpower), had orders worth Rs 18,400 crore. REpower alone has projects with potential to generate sales of Rs 12,000 crore (Euro 2.1 billion). The orders put together are about 1.5 times FY-10 sales. However, any reschedule in equipment deliveries, especially for REpower in Europe, cannot be ruled out.
Suzlon Energy ended FY-10 with sales of Rs 20,619 crore and losses of Rs 982 crore as a result of lower volumes and slower execution. The consolidated sales and profits are not comparable with the previous year as revenues from Hansen Transmissions did not flow for the full year in FY-10, as a part-stake sale has ensured that the latter is no longer a subsidiary. The company' s debt equity ratio is expected to come down to 1.5 times, post rights, from a ratio of close to two times now.
Friday, June 25, 2010
MARKET SET TO BEGIN LOWER; OIL COS IN FOCUS
Headlines for the day:
Alstom close to deal with BHEL, nuclear power.
GMR wins deal to build, run new Maldives airport.
SBI eyes big surge in home loans
Events for the day:
Major corporate action
EGoM meet on fuel price today
Ex-date for dividend of Albert David
Results: Bharat Electronics
For more events, log on to Sharekhan.com
Pre-market report
Global signals
European shares hit a two-week closing low in choppy trade on Thursday (June 24, 2010), with banks among the top decliners on heightened concerns over a the US financial reform bill and worries over the global economic recovery.
The S&P 500 fell for the fourth straight day on Thursday as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.
The Asian markets were trading lower on Friday (June 25, 2010), weighed by Wall Street's losses. SGX Nifty was trading 24.50 points lower.
Indian Indices
The persistent worries over the outlook for the global economic recovery are weighing on the world markets. The sentiments across the globe dampened after the Federal Reserve kept interest rate at record low on tougher economic climate. The global markets fell over the concerns about the euro zone's debt problems, which is yet to be solved.
The Indian markets have been following the path led by its global peers. The fall in the world markets may push the domestic markets to weaken at start.
The inflation for the week ended June 12, 2010 rose to 16.90% may also weigh on the domestic markets, as investors will be worried about the Reserve Bank of India cutting interest rates. This may bring the banking stocks in limelight.
The empowered group of ministers (EGoM) will meet again today to decide on the pricing of petrol, diesel, kerosene and cooking gas. These meetings have happened in the past too, but the group has not succeeded in taking any decision on deregulating fuel prices.
The petroleum ministry has proposed to increase the price of petrol by Rs3 a litre and diesel by Rs2 a litre. It has also suggested to raise retail prices of kerosene by Rs6 a litre and cooking gas by Rs100 per cylinder.
There is still no consensus among the members of EGoM on oil price hike. It is believed that the Congress brass is ready for a petro-price hike considering the under recovery of the oil marketing companies, key allies of the party like Mamata Banerjee’s Trinamool Congress and Sharad Pawar’s Nationalist Congress Party are strongly opposed to a fuel price rise.
So it is a great event to watch out for today, whether we will see any price hike or again it will get postponed due to political issues.
Foreign institutional investors (FIIs) who had flown to safety last month in the wake of uncertainties surrounding Greece and its impact on the global economy have already put in June, raising chances of market stability at higher levels. The local investors have not been supporting the markets.
The recovery in monsoons have also been supporting the markets.
Commodity cues
In the commodity space, oil prices pared early losses and posted modest gains, with the Nymex light crude oil for the August series rose by $0.16 per barrel. In the metals space, the Comex Gold for the June series rose by $11.40 to a troy ounce and the Comex Silver for the June series was rose by $0.28 to a troy ounce.
Daily trend of FII/MF investment in equities
On June 24, 2010, the FIIs were the net buyers of the Indian stocks to the tune of Rs369.70 crore, whereas the domestic mutual, on June 23, 2010, were the net sellers of the stocks to the tune of Rs667.30 crore.
Alstom close to deal with BHEL, nuclear power.
GMR wins deal to build, run new Maldives airport.
SBI eyes big surge in home loans
Events for the day:
Major corporate action
EGoM meet on fuel price today
Ex-date for dividend of Albert David
Results: Bharat Electronics
For more events, log on to Sharekhan.com
Pre-market report
Global signals
European shares hit a two-week closing low in choppy trade on Thursday (June 24, 2010), with banks among the top decliners on heightened concerns over a the US financial reform bill and worries over the global economic recovery.
The S&P 500 fell for the fourth straight day on Thursday as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.
The Asian markets were trading lower on Friday (June 25, 2010), weighed by Wall Street's losses. SGX Nifty was trading 24.50 points lower.
Indian Indices
The persistent worries over the outlook for the global economic recovery are weighing on the world markets. The sentiments across the globe dampened after the Federal Reserve kept interest rate at record low on tougher economic climate. The global markets fell over the concerns about the euro zone's debt problems, which is yet to be solved.
The Indian markets have been following the path led by its global peers. The fall in the world markets may push the domestic markets to weaken at start.
The inflation for the week ended June 12, 2010 rose to 16.90% may also weigh on the domestic markets, as investors will be worried about the Reserve Bank of India cutting interest rates. This may bring the banking stocks in limelight.
The empowered group of ministers (EGoM) will meet again today to decide on the pricing of petrol, diesel, kerosene and cooking gas. These meetings have happened in the past too, but the group has not succeeded in taking any decision on deregulating fuel prices.
The petroleum ministry has proposed to increase the price of petrol by Rs3 a litre and diesel by Rs2 a litre. It has also suggested to raise retail prices of kerosene by Rs6 a litre and cooking gas by Rs100 per cylinder.
There is still no consensus among the members of EGoM on oil price hike. It is believed that the Congress brass is ready for a petro-price hike considering the under recovery of the oil marketing companies, key allies of the party like Mamata Banerjee’s Trinamool Congress and Sharad Pawar’s Nationalist Congress Party are strongly opposed to a fuel price rise.
So it is a great event to watch out for today, whether we will see any price hike or again it will get postponed due to political issues.
Foreign institutional investors (FIIs) who had flown to safety last month in the wake of uncertainties surrounding Greece and its impact on the global economy have already put in June, raising chances of market stability at higher levels. The local investors have not been supporting the markets.
The recovery in monsoons have also been supporting the markets.
Commodity cues
In the commodity space, oil prices pared early losses and posted modest gains, with the Nymex light crude oil for the August series rose by $0.16 per barrel. In the metals space, the Comex Gold for the June series rose by $11.40 to a troy ounce and the Comex Silver for the June series was rose by $0.28 to a troy ounce.
Daily trend of FII/MF investment in equities
On June 24, 2010, the FIIs were the net buyers of the Indian stocks to the tune of Rs369.70 crore, whereas the domestic mutual, on June 23, 2010, were the net sellers of the stocks to the tune of Rs667.30 crore.
DAILY NEWS ROUNDUP- JUNE 25 2010
RIL to make a US$1.3bn acquisition of 45% interest in the Eagle Ford shale acreage of Pioneer Natural Resources. (BS)
L&T plans to restructure JV with Mitsubishi. (BS)
HCL Corp sells 2.5% stake in HCL Tech for Rs5.8bn. (BS)
Alstom enters into JV with BHEL and NPCIL to tap Indian nuclear power market. (BS)
ING sells 3.1% stake in Kotak Bank for Rs8bn. (BS)
Jet and Godrej to ink Mumbai land deal soon. (BS)
Tata Tele plans Rs10bn capex this year. (BS)
Powergrid’s new bidding norms to hit Chinese vendors. (BS)
The GMR-Malaysia Airports combine has won the contract for airport at Male in Maldives worth US$360mn. (BS)
Mahindra Satyam BPO eyes acquisition. (BL)
Patni Computers is shifting focus to tap the nascent outsourcing market in Japan. (BL)
Hindustan Zinc has raised prices of lead by Rs3,000/ton while has kept zinc prices unchanged. (BL)
Petronet mulls rights issue to fund the proposed power project. (BL)
Vodafone Essar to enter enterprise services market as voice business takes a hit. (ET)
BEML-led consortium set to bid for Hyderabad metro. (FE)
MTNL invites bids from telcos for 3G roaming in its network. (ET)
Future Capital Holdings to focus on retail and wholesale credit business. (ET)
Essar Oil bags 4 CBM blocks under the fourth round of CBM. (BL)
Food inflation rises 16.9% in the week ended June 12. (BS)
Domestic and international air fares would rise by Rs100 and Rs500 respectively from July 1 with the government issuing a notification to bring air travel in
L&T plans to restructure JV with Mitsubishi. (BS)
HCL Corp sells 2.5% stake in HCL Tech for Rs5.8bn. (BS)
Alstom enters into JV with BHEL and NPCIL to tap Indian nuclear power market. (BS)
ING sells 3.1% stake in Kotak Bank for Rs8bn. (BS)
Jet and Godrej to ink Mumbai land deal soon. (BS)
Tata Tele plans Rs10bn capex this year. (BS)
Powergrid’s new bidding norms to hit Chinese vendors. (BS)
The GMR-Malaysia Airports combine has won the contract for airport at Male in Maldives worth US$360mn. (BS)
Mahindra Satyam BPO eyes acquisition. (BL)
Patni Computers is shifting focus to tap the nascent outsourcing market in Japan. (BL)
Hindustan Zinc has raised prices of lead by Rs3,000/ton while has kept zinc prices unchanged. (BL)
Petronet mulls rights issue to fund the proposed power project. (BL)
Vodafone Essar to enter enterprise services market as voice business takes a hit. (ET)
BEML-led consortium set to bid for Hyderabad metro. (FE)
MTNL invites bids from telcos for 3G roaming in its network. (ET)
Future Capital Holdings to focus on retail and wholesale credit business. (ET)
Essar Oil bags 4 CBM blocks under the fourth round of CBM. (BL)
Food inflation rises 16.9% in the week ended June 12. (BS)
Domestic and international air fares would rise by Rs100 and Rs500 respectively from July 1 with the government issuing a notification to bring air travel in
Thursday, June 24, 2010
F & O EXPIRY...THIS IS IT
In a world filled with despair, we must still dare to dream. - Michael Jackson
There's not much despair on the street as the bulls managed to eke out slim gains after a fairly insipid session on Wednesday. With the global cues not supportive, it is not really easy to Just Beat It, especially with F&O expiry. While India’s macro fundamentals are sound, the smooth criminal remains the external scenario.
The start will be shaky with no decisive cues coming from Wall Street and European markets finishing in red. As expected, the Fed has kept its key rates steady. The FOMC continues to see a gradual recovery though it remains worried about the housing market and the euro-zone debt crisis.
Manufacturing growth in the debt-strapped euro-zone slowed to a four-month low in June. Exports in Japan rose 32% yoy in May but were below forecast. Markets in Asia are mixed, with the Hang Seng slipping while other benchmarks are holding in green.
A lot of action was seen outside the main indices. That trend may continue but we would like to remind you that dealing in some of these counters remains Dangerous.
June F&O series has been pretty good for the bulls after the mayhem last month. Going ahead, there is a chance of some disappointment after the string of gains in recent sessions. Much will hinge on how the latest quarterly earnings season unfolds.
ABG Shipyard, Core Projects and Orbit Corp. will be added in the NSE F&O segment.
Progress of monsoon in July will be crucial as well. The RBI will take up its quarterly review as well. All indications are that it will jack up rates as inflation continues to stick out like a sour thumb. One will also have to keep a close eye on fund flows.
The FIIs were net buyers of Rs2.65bn in the cash segment on Wednesday (provisionally), according to the NSE web site. Local funds remain cautious and were net sellers of Rs8.66bn. In the F&O segment, they were net buyers at Rs9.56bn. On Tuesday, the FIIs were net buyers of Rs10.37bn in the cash segment. Mutual Funds were net sellers of Rs2.32bn on the same day.
Australian shares advanced today, with resource stocks pacing the rally after Julia Gillard was named prime minister. However, it remains to be seen whether she will change a controversial mining-tax plan.
US stocks ended nearly unchanged on Wednesday as investors struggled for direction after the Federal Reserve left key rates steady but warned of an adverse fallout from the European debt crisis. A weak housing market report, weakness in commodity prices and the stronger euro added to the list of worries.
The Dow Jones Industrial Average, which rose more than to 70 points after the Fed announcement, ended with a slight gain of 4.92 points, or 0.1%, at 10,298.44. The S&P 500 lost 3 points, or 0.3%, to 1,092 and the Nasdaq Composite index dropped 7 points, or 0.3%, to 2,254.
The euro reversed course in the afternoon, sending already weak oil and gold prices and stocks even lower. The Europe's debt dilemma will be in focus ahead of this weekend's G-20 meeting.
The euro rose 0.3% versus the dollar, erasing early losses and remaining well above its four-year low of $1.188 hit last week. The dollar fell 0.7% versus the yen. The direction of the euro and the state of global debt are expected to be the focus of this weekend's G-20 meeting.
The US Dollar Index, which tracks the U.S. currency against a basket of six others, slipped 0.3%.
US light crude oil for August delivery fell $1.79 to settle at $76.35 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery dropped $2.40 to $1,234.80 an ounce after closing at a record $1,258.30 on Friday.
Treasury prices rallied, lowering the yield on the 10-year note to 3.11% from 3.17% late on Tuesday.
The central bank opted to hold the fed funds rate, a key overnight banking rate, steady at historic lows near zero. In its closely-watched statement, the bankers said that the economic recovery is proceeding and the labour market is improving gradually.
But the central bankers also cautioned about the weakness in the housing market and the less supportive financial conditions as a result of the development abroad, meaning the European debt crisis.
The Federal Reserve is likely to keep interest rate policy accommodative until at least the end of the year.
Stocks slipped in the morning after the May new home sales report showed a steep drop in activity to the worst level on record. But stocks managed to cut losses in the hour leading up to the Fed announcement.
New home sales fell 32.7% in May to a seasonally-adjusted annual unit rate of 300,000, the lowest on record, from a revised 446,000 in April. The report from the Census Bureau was expected to show that sales fell to a 430,000 annual unit rate, according to a consensus of economists surveyed by Briefing.com. The May plunge reflected the expiration of the homebuyer tax credit at the end of April, but also the reality of a still-struggling economy.
Adobe Systems (ADBE) tumbled as investors took a "sell the news" approach after it reported higher quarterly sales and earnings late on Tuesday that trounced estimates. The software maker also issued a current-quarter forecast that is higher than analysts' most recent estimates.
European shares ended lower, declining for the second straight day, with financials leading the decline. The Stoxx Europe 600 index lost 0.84% to end at 254.77
The index slipped 0.5% on Tuesday, snapping a nine-session winning streak.
A report showed that the rate of growth in the manufacturing sector in the 16-nation euro zone slowed to a four-month low in June.
The U.K. FTSE 100 index lost 1.3% to 5,178.52, the German DAX index declined 1% to 6204.52 and the French CAC-40 index fell 1.7% to 3,641.79.
There's not much despair on the street as the bulls managed to eke out slim gains after a fairly insipid session on Wednesday. With the global cues not supportive, it is not really easy to Just Beat It, especially with F&O expiry. While India’s macro fundamentals are sound, the smooth criminal remains the external scenario.
The start will be shaky with no decisive cues coming from Wall Street and European markets finishing in red. As expected, the Fed has kept its key rates steady. The FOMC continues to see a gradual recovery though it remains worried about the housing market and the euro-zone debt crisis.
Manufacturing growth in the debt-strapped euro-zone slowed to a four-month low in June. Exports in Japan rose 32% yoy in May but were below forecast. Markets in Asia are mixed, with the Hang Seng slipping while other benchmarks are holding in green.
A lot of action was seen outside the main indices. That trend may continue but we would like to remind you that dealing in some of these counters remains Dangerous.
June F&O series has been pretty good for the bulls after the mayhem last month. Going ahead, there is a chance of some disappointment after the string of gains in recent sessions. Much will hinge on how the latest quarterly earnings season unfolds.
ABG Shipyard, Core Projects and Orbit Corp. will be added in the NSE F&O segment.
Progress of monsoon in July will be crucial as well. The RBI will take up its quarterly review as well. All indications are that it will jack up rates as inflation continues to stick out like a sour thumb. One will also have to keep a close eye on fund flows.
The FIIs were net buyers of Rs2.65bn in the cash segment on Wednesday (provisionally), according to the NSE web site. Local funds remain cautious and were net sellers of Rs8.66bn. In the F&O segment, they were net buyers at Rs9.56bn. On Tuesday, the FIIs were net buyers of Rs10.37bn in the cash segment. Mutual Funds were net sellers of Rs2.32bn on the same day.
Australian shares advanced today, with resource stocks pacing the rally after Julia Gillard was named prime minister. However, it remains to be seen whether she will change a controversial mining-tax plan.
US stocks ended nearly unchanged on Wednesday as investors struggled for direction after the Federal Reserve left key rates steady but warned of an adverse fallout from the European debt crisis. A weak housing market report, weakness in commodity prices and the stronger euro added to the list of worries.
The Dow Jones Industrial Average, which rose more than to 70 points after the Fed announcement, ended with a slight gain of 4.92 points, or 0.1%, at 10,298.44. The S&P 500 lost 3 points, or 0.3%, to 1,092 and the Nasdaq Composite index dropped 7 points, or 0.3%, to 2,254.
The euro reversed course in the afternoon, sending already weak oil and gold prices and stocks even lower. The Europe's debt dilemma will be in focus ahead of this weekend's G-20 meeting.
The euro rose 0.3% versus the dollar, erasing early losses and remaining well above its four-year low of $1.188 hit last week. The dollar fell 0.7% versus the yen. The direction of the euro and the state of global debt are expected to be the focus of this weekend's G-20 meeting.
The US Dollar Index, which tracks the U.S. currency against a basket of six others, slipped 0.3%.
US light crude oil for August delivery fell $1.79 to settle at $76.35 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery dropped $2.40 to $1,234.80 an ounce after closing at a record $1,258.30 on Friday.
Treasury prices rallied, lowering the yield on the 10-year note to 3.11% from 3.17% late on Tuesday.
The central bank opted to hold the fed funds rate, a key overnight banking rate, steady at historic lows near zero. In its closely-watched statement, the bankers said that the economic recovery is proceeding and the labour market is improving gradually.
But the central bankers also cautioned about the weakness in the housing market and the less supportive financial conditions as a result of the development abroad, meaning the European debt crisis.
The Federal Reserve is likely to keep interest rate policy accommodative until at least the end of the year.
Stocks slipped in the morning after the May new home sales report showed a steep drop in activity to the worst level on record. But stocks managed to cut losses in the hour leading up to the Fed announcement.
New home sales fell 32.7% in May to a seasonally-adjusted annual unit rate of 300,000, the lowest on record, from a revised 446,000 in April. The report from the Census Bureau was expected to show that sales fell to a 430,000 annual unit rate, according to a consensus of economists surveyed by Briefing.com. The May plunge reflected the expiration of the homebuyer tax credit at the end of April, but also the reality of a still-struggling economy.
Adobe Systems (ADBE) tumbled as investors took a "sell the news" approach after it reported higher quarterly sales and earnings late on Tuesday that trounced estimates. The software maker also issued a current-quarter forecast that is higher than analysts' most recent estimates.
European shares ended lower, declining for the second straight day, with financials leading the decline. The Stoxx Europe 600 index lost 0.84% to end at 254.77
The index slipped 0.5% on Tuesday, snapping a nine-session winning streak.
A report showed that the rate of growth in the manufacturing sector in the 16-nation euro zone slowed to a four-month low in June.
The U.K. FTSE 100 index lost 1.3% to 5,178.52, the German DAX index declined 1% to 6204.52 and the French CAC-40 index fell 1.7% to 3,641.79.
DAILY NEWS ROUNDUP- JUNE 24 ,2010
Tata Motors is considering raising Rs25bn via equity or FCCB to trim debt pile. (ET)
RCom may sign a 5-year deal with Africa’s Attijariwafa Bank for managing the bank’s Ethernet services. (BS)
NTPC seeks 30mmscmd more of gas for expansion of gas based power projects. (DNA)
SAIL in talks with Japan’s Kobe Steel for a technological deal. (DNA)
IOC to start processing crude oil produced from Cairn India’s Rajasthan block at its Panipat Refinery. (DNA)
Vivendi SA, Europe’s largest entertainment group denies interest to buy a 26% stake in RCom.(mint)
Shree Renuka Sugars has signed a revised agreement to acquire a majority stake in Brazilian firm, Equipav for Rs11.5bn, 25% lower than price agreed before. (ET)
Patni Computers has denied any plans to sell their stake in the company. (ET)
PNB to pick up 58% partners’ stake in life insurance business. (ET)
ING to sell its entire 3.1% stake in Kotak Mahindra Bank to raise US$173mn. (ET)
Financial Technologies hints at shedding stake in National Spot Exchange (NSEL) to 26%. (ET)
Bank of Rajasthan board to meet today to take forward the process of its merger with ICICI Bank. (BS)
Raymond to exit home retail business. (DNA)
Titan Industries is planning to open 50 Titan Eye Plus stores in the current fiscal. (DNA)
Gitanjali Lifestyle, a retail arm of Gitanjali Gems plans to open up a 100 watch stores in next three years. (BS)
Emami has bought a manufacturing unit in Egypt for Rs120mn to manufacture all its personal care products and distribute them in West Asia and Africa. (BS)
Essar Shipping is planning to raise US$250mn via FCCB issue. (DNA)
Birla Corp to invest Rs24bn to boost its total cement capacity to 13mtpa. (DNA)
The empowered group of ministers is expected to clear the proposal of a revision in petro goods prices at its meeting scheduled on 25th June. (ET)
Interest rate may go up any time says Pronab Sen, Chief Statistician of India. (ET)
RCom may sign a 5-year deal with Africa’s Attijariwafa Bank for managing the bank’s Ethernet services. (BS)
NTPC seeks 30mmscmd more of gas for expansion of gas based power projects. (DNA)
SAIL in talks with Japan’s Kobe Steel for a technological deal. (DNA)
IOC to start processing crude oil produced from Cairn India’s Rajasthan block at its Panipat Refinery. (DNA)
Vivendi SA, Europe’s largest entertainment group denies interest to buy a 26% stake in RCom.(mint)
Shree Renuka Sugars has signed a revised agreement to acquire a majority stake in Brazilian firm, Equipav for Rs11.5bn, 25% lower than price agreed before. (ET)
Patni Computers has denied any plans to sell their stake in the company. (ET)
PNB to pick up 58% partners’ stake in life insurance business. (ET)
ING to sell its entire 3.1% stake in Kotak Mahindra Bank to raise US$173mn. (ET)
Financial Technologies hints at shedding stake in National Spot Exchange (NSEL) to 26%. (ET)
Bank of Rajasthan board to meet today to take forward the process of its merger with ICICI Bank. (BS)
Raymond to exit home retail business. (DNA)
Titan Industries is planning to open 50 Titan Eye Plus stores in the current fiscal. (DNA)
Gitanjali Lifestyle, a retail arm of Gitanjali Gems plans to open up a 100 watch stores in next three years. (BS)
Emami has bought a manufacturing unit in Egypt for Rs120mn to manufacture all its personal care products and distribute them in West Asia and Africa. (BS)
Essar Shipping is planning to raise US$250mn via FCCB issue. (DNA)
Birla Corp to invest Rs24bn to boost its total cement capacity to 13mtpa. (DNA)
The empowered group of ministers is expected to clear the proposal of a revision in petro goods prices at its meeting scheduled on 25th June. (ET)
Interest rate may go up any time says Pronab Sen, Chief Statistician of India. (ET)
Tuesday, June 22, 2010
NOT ALL IS WELL ON WALL STREET
Dow's triple digit gains are completely wiped out as yuan dominates everybody's mind
US stocks erased triple digit gains at Wall Street on Monday, 21 June 2010 and ultimately ended little lower. Traders continued to mull over the fact of unleashed yuan's effect on world trade though the same has been considered good till now. Stocks started the day higher riding on the back of strong Asian stocks across the world but the rally fizzled out due to the lack of any support on any major front. Corporate news and data flow was not there today to dictate market momentum.
For the day, that ended on Friday, 21 June 2010, Dow ended lower by 8.23 points at 10,442.41. Nasdaq ended lower by 20.71 points at 2289.09. S&P 500 ended lower by 4.31 points at 1113.02. Dow was trading higher by 141 points earlier during the day.
Eight of ten economic sectors ended lower led by consumer discretionary, technology and utilities sectors. Seventeen of thirty Dow components ended lower.
Though Beijing has yet to make any formal announcements related to actually un-pegging its yuan, the government there has restricted any substantial immediate movement in the currency by allowing only a 0.5% move in either direction per day. But this step has been viewed in the light that a stronger yuan will benefit the Chinese economy as it shifts to a service-based economy. Moreover, a stronger yuan will boost consumption by increasing purchasing power, while also fighting inflation. A move to a stronger yuan also benefits U.S. companies that export to China since they will receive more dollars when profits are repatriated. Conversely, Chinese exporters are hurt by a stronger yuan as the relative cost of their goods becomes more expensive for U.S. consumers and the dollar buys fewer goods that are denominated in yuan.
Another important implication of stronger yuan is a reduced ability for China to purchase foreign reserves, including U.S. Treasuries. China has long been a ready buyer of U.S. debt, which has helped finance the government's deficits in recent years.
China's decision to unleash its currency against the dollar was viewed as a positive for commodities sector across the world. Thus natural resource plays saw some of the strongest gains earlier in the day today. However, early buying lost momentum and the sector finished with a marginal gain.
The sector's downturn followed that of the broader market, which was unable to produce any kind of follow through after its initial gap higher in the opening minutes of trade. In turn, it descended steadily for the rest of the session.
Retailers were hit with some of the hardest selling pressure. Tech stocks weren't far behind, though. The sector, which is the largest by market weight, booked a substantial loss. Its weakness imbued the Nasdaq, which underperformed the other headline indices for almost the entire session. Amazon.com was one of the weaker performers in the index after reports indicated the company has cut prices on Kindle, the company's electronic reader.
Bullion metal prices ended substantially lower on Monday, 21 June 2010 at Comex. This came just a day after bullion metals touched record highs. Gold started the day swerving in and out positive territory, when China's currency move to free its currency against the US dollar was viewed alternatively as neutral or negative for gold.
On Monday, gold for August delivery ended at $1,240.7 an ounce, lower by $17.6 (1.4%) an ounce on the New York Mercantile Exchange. July Comex silver futures ended lower by 38 cents (1.9%) at $18.8 an ounce.
In the currency market on Monday, the dollar index shook off initial weakness and the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.
Volatile crude oil prices managed to end higher on Monday, 21 June 2010 at Nymex. Prices rose as demand for oil from China seemed to be rising in current months. On Monday, crude-oil futures for light sweet crude for August delivery closed at $78.61/barrel (higher by $0.35 or 0.4%). During intra day trading, prices rose to a high of $79.97.
China's plan of freeing its currency against the dollar has been viewed well for commodities and the global economy. A report showed today that China's apparent oil demand continued to climb at a steady clip. Demand rose 9.8% in May compared to the same month last year. The processing of crude oil in China rose 14.4% on year in May thereby boosting prices.
On Monday, natural gas for July delivery reversed course, losing 12 cents, or 2.5%, to $4.87 per million British thermal units, moderating earlier gains.
For every two issues rising, three declined on the New York Stock Exchange, where nearly 1.1 billion shares traded.
Indian ADRs ended mixed on Monday but with more gainers than losers. Banking stocks were the main gainers with HDFC Bank and ICICI Bank gaining 2.7% and 2.3% respectively. WNS shed 14.7% respectively.
For tomorrow, the economic reports expected are existing home sales data and housing price index data. Few earning reports are also expected.
US stocks erased triple digit gains at Wall Street on Monday, 21 June 2010 and ultimately ended little lower. Traders continued to mull over the fact of unleashed yuan's effect on world trade though the same has been considered good till now. Stocks started the day higher riding on the back of strong Asian stocks across the world but the rally fizzled out due to the lack of any support on any major front. Corporate news and data flow was not there today to dictate market momentum.
For the day, that ended on Friday, 21 June 2010, Dow ended lower by 8.23 points at 10,442.41. Nasdaq ended lower by 20.71 points at 2289.09. S&P 500 ended lower by 4.31 points at 1113.02. Dow was trading higher by 141 points earlier during the day.
Eight of ten economic sectors ended lower led by consumer discretionary, technology and utilities sectors. Seventeen of thirty Dow components ended lower.
Though Beijing has yet to make any formal announcements related to actually un-pegging its yuan, the government there has restricted any substantial immediate movement in the currency by allowing only a 0.5% move in either direction per day. But this step has been viewed in the light that a stronger yuan will benefit the Chinese economy as it shifts to a service-based economy. Moreover, a stronger yuan will boost consumption by increasing purchasing power, while also fighting inflation. A move to a stronger yuan also benefits U.S. companies that export to China since they will receive more dollars when profits are repatriated. Conversely, Chinese exporters are hurt by a stronger yuan as the relative cost of their goods becomes more expensive for U.S. consumers and the dollar buys fewer goods that are denominated in yuan.
Another important implication of stronger yuan is a reduced ability for China to purchase foreign reserves, including U.S. Treasuries. China has long been a ready buyer of U.S. debt, which has helped finance the government's deficits in recent years.
China's decision to unleash its currency against the dollar was viewed as a positive for commodities sector across the world. Thus natural resource plays saw some of the strongest gains earlier in the day today. However, early buying lost momentum and the sector finished with a marginal gain.
The sector's downturn followed that of the broader market, which was unable to produce any kind of follow through after its initial gap higher in the opening minutes of trade. In turn, it descended steadily for the rest of the session.
Retailers were hit with some of the hardest selling pressure. Tech stocks weren't far behind, though. The sector, which is the largest by market weight, booked a substantial loss. Its weakness imbued the Nasdaq, which underperformed the other headline indices for almost the entire session. Amazon.com was one of the weaker performers in the index after reports indicated the company has cut prices on Kindle, the company's electronic reader.
Bullion metal prices ended substantially lower on Monday, 21 June 2010 at Comex. This came just a day after bullion metals touched record highs. Gold started the day swerving in and out positive territory, when China's currency move to free its currency against the US dollar was viewed alternatively as neutral or negative for gold.
On Monday, gold for August delivery ended at $1,240.7 an ounce, lower by $17.6 (1.4%) an ounce on the New York Mercantile Exchange. July Comex silver futures ended lower by 38 cents (1.9%) at $18.8 an ounce.
In the currency market on Monday, the dollar index shook off initial weakness and the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.
Volatile crude oil prices managed to end higher on Monday, 21 June 2010 at Nymex. Prices rose as demand for oil from China seemed to be rising in current months. On Monday, crude-oil futures for light sweet crude for August delivery closed at $78.61/barrel (higher by $0.35 or 0.4%). During intra day trading, prices rose to a high of $79.97.
China's plan of freeing its currency against the dollar has been viewed well for commodities and the global economy. A report showed today that China's apparent oil demand continued to climb at a steady clip. Demand rose 9.8% in May compared to the same month last year. The processing of crude oil in China rose 14.4% on year in May thereby boosting prices.
On Monday, natural gas for July delivery reversed course, losing 12 cents, or 2.5%, to $4.87 per million British thermal units, moderating earlier gains.
For every two issues rising, three declined on the New York Stock Exchange, where nearly 1.1 billion shares traded.
Indian ADRs ended mixed on Monday but with more gainers than losers. Banking stocks were the main gainers with HDFC Bank and ICICI Bank gaining 2.7% and 2.3% respectively. WNS shed 14.7% respectively.
For tomorrow, the economic reports expected are existing home sales data and housing price index data. Few earning reports are also expected.
ANNUAL REPORT-GARWARE OFFSHORE SERVICES-2009-2010
GARWARE OFFSHORE SERVICES LIMITED
ANNUAL REPORT 2009-2010
DIRECTOR'S REPORT
TO,
THE MEMBERS,
Your Directors are pleased to present their report as under:
FINANCIAL RESULTS
(Rs. in Crores)
Year ended Year ended
March 31, 2010 March 31, 2009
Income from Operations 181.48 162.24
Other Income 7.19 3.30
Gross Income 188.67 165.54
Expenses for the year 80.40 76.34
Operating Profit 108.27 89.20
Interest & Finance charges 30.89 25.49
Profit Before Depreciation 77.38 63.71
Depreciation 34.09 22.90
Profit Before Tax 43.29 40.81
Provision for Taxation
- Current Tax 2.38 0.30
- Fringe Benefit Tax - 0.20
- Tax for earlier years written back (0.08) (0.06)
Net Profit After Tax 40.99 40.37
Cash Profit 75.08 63.27
FINANCIAL HIGHLIGHTS:
Income from Operations for the year ended on 31.03.2010 stood at Rs. 181.48
crores, as against Rs. 162.24 crores for the previous year, an increase of
11.86%.
The Net Profit for the year ended 31.03.2010 stood at Rs. 40.99 crores as
against Rs. 40.37 crores for the previous year.
The Company continues to follow Accounting Standard 30 ('AS-30' Financial
Instrument: Recognition & Measurement).
OPERATIONS:
During the year under review, the Company sold its second hand Platform
Supply Vessel M.V. Everest' in January, 2010. Presently Eight Vessels are
on long term contract in India and the North Sea. Two Vessels are on a
short term contract in the Far East.
The Curative Petition filed by the Company before the Hon'ble Supreme Court
against Oil & Natural Gas Corporation Limited was dismissed, in spite of
using the best legal talent in the Country.
DIVIDEND:
During the year under review, the Company has declared and paid two Interim
Dividends C@ 8% each aggregating to 16%.
Your Directors subject to the Shareholders approval, are pleased to
recommend a Final Dividend of 7%, for the year under review. Thus, the
total Dividend for the year under review is 23%, as against 21% for the
previous year. The Final Dividend will be paid to the Shareholders, whose
names appear on the Register of Members as on 28.06.2010.
The total cash outflow on account of Dividend and Tax thereon (including
Interim Dividends) amounts to Rs.6.40 crores (previous year Rs 5.85
crores).
EXPANSION / DIVERSIFICATION:
The delivery of the Company's latest acquisition- a 'State of the Art',
Large Platform Supply Vessel having a dead weight of 4315 tons is expected
to be delivered in the month of December 2010/January, 2011.
FUTURE OUTLOOK:
Even though the price of Oil appeared to have stabilized during the last
quarter of the year under review, the very recent global adverse conditions
resulted in downfall of the Oil prices owing to which the Offshore Supply
Vessel market continues to experience some wild fluctuations in charter
rates. The vessels in the spot markets of North Sea and Singapore have been
faced with idle time and on certain occasions, low charter rates. However,
since the majority of the Company's vessels are on long term contracts,
these fluctuations do not greatly affect your Company. The Company is
hopeful that the situation for the vessels in the Spot Market (two AHTSVs
in the Far East) will improve as the world sees more and more exploration
efforts by Exploration & Production (E&P) companies in view of rise in the
price of Oil. The Company will continue to look at the possibility of
acquiring additional vessels / assets within the Offshore Sector.
WHOLLY OWNED SUBSIDIARY (WOS) AT SINGAPORE:
The Wholly Owned Subsidiary of the Company viz., Garware Offshore
International Services Pte. Ltd., (GOISPL) has made a Profit of USD 0.106
million during the year under review.
GOISPL has taken the delivery of 'M.V. Shergar' (an Anchor Handling Tug cum
Supply Vessel) and 'M.V. Beau Geste'(an Accommodation Work Barge) on a long
term 'Bare boat, Charter basis'. These assets were delivered to the Company
in August 2009, and are presently working in the Middle East and India
respectively. (as on 31.03.2010)
The Directors' Report, Auditors' Report and Audited Accounts of GOISPL for
the year ended 31.03.2010 are enclosed pursuant to provisions of Section
212 of the Companies Act, 1956.
LISTING FEES TO STOCK EXCHANGES:
The Company has paid the Listing Fees for the year 2010-11 to Bombay Stock
Exchange Ltd. and The National Stock Exchange of India Ltd.
RESPONSIBILITY STATEMENT:
The Directors confirm:
a) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures
(save and except as stated in the Directors' Report) have been made from
the same.
b) That they have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the State of Affairs of the
Company at the end of the year and the Profit of the Company for that year
ended as on 31.03.2010.
c) That they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provision of the Companies
Act, 1956, for safe-guarding the assets of the Company and for preventing
and detecting fraud and other irregularities.
d) That they have prepared the Annual Accounts on a going concern basis.
INSURANCE:
All the Vessels owned and operated by the Company have been insured for
Hull & Machinery, War Risks and Protection & Indemnity (P & I) claims. The
vessels that transit through the Gulf of Suez and Malacca Straits are also
insured for piracy, kidnapping and ransom. The crew on all the vessels are
also covered under (P & I) insurance.
FIXED DEPOSITS:
During the year under review the Company has not accepted any deposits from
the Public and Shareholders.
DIRECTORATE:
Mr. D.J. Thakkar and Dr. B.S. Cooper, Directors of the Company retire by
rotation Dr. B.S. Cooper offers himself for re-election. Members are
requested to re-elect him. Mr. D.J. Thakkar, retires by rotation and is not
standing for re-election.
AUDITORS:
You are requested to re-appoint Statutory Auditors, Messrs. Raman S. Shah &
Associates, Chartered Accountants for the current year and to fix their
remuneration.
The Company has obtained a Certificate from Auditors certifying that their
re-appointment, if made at the ensuing Annual General Meeting shall be
within the limits prescribed under Section 224 (1-B) of the Companies Act,
1956.
PERSONNEL:
The relations with all Employees of the Company, both Shore and Floating
Staff have been extremely cordial. Your Directors wish to express their
appreciation of the services rendered by the devoted Employees.
PARTICULARS OF EMPLOYEES:
Statement of Particulars of Employees as required by the Provisions of
Section 217(2A) of The Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 as amended and forming part of the Directors'
Report is annexed here to as Annexure I'.
DEMATERIALISATION OF SHARES:
The Company's shares continue to be traded in Electronic Form.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with the Auditors'
Certificate on its compliance is given in a separate Annexure.
ACKNOWLEDGEMENT:
The Board wish to thank the Office of Directorate General of Shipping,
Mercantile Marine Department, Shipping Master, Indian Register of Shipping,
DNV, ABS, State Bank of India, DVB Group Merchant Bank (Asia) Ltd.,
Singapore, State Bank of Travancore, United Bank of India and State Bank of
Hyderabad for their continued support and co-operation during the year.
On Behalf of the Board
Place: Mumbai ASHOK GARWARE
Dated: 21st May, 2010 CHAIRMAN
ANNEXURE TO DIRECTORS' REPORT
STATEMENT REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO AS REQUIRED UNDER CLAUSE (e) OF SUB-
SECTION (1) OF SECTION 217 OF THE COMPANIES ACT, 1956.
Particulars
A. CONSERVATION OF ENERGY
(a) Measures Taken Being Offshore Company, taking of Energy
Conservation measures does not arise.
(b) Additional investments and
proposals, if any, being
implemented for reduction of
energy consumption. Nil
(c) Impact of the Measures (a)
and (b) above and consequent
Impact on Cost of Production. Not Applicable
(d) Total energy consumption and
consumption per Unit of
production in Form A'. Not Applicable
B. TECHNOLOGY ABSORPTION
(e) Efforts made in Technology As per Form 'B' enclosed
absorption.
C. FOREIGN EXCHANGE EARNINGS AND
OUTGO
(f) Activities relating to
exports, initiative taken to
increase exports, development of
New Export market for product
and services and export plans. Nil
(g) (a) Foreign exchange earned
and saved (on account of freight,
charter hire, earnings etc.)
including deemed earnings. Rs. 16604.16 lacs
(b) Foreign exchange used
including Operating expenses,
Standby expenses, Capital
repayment, down payments for
acquisition of Ships and
interest payment. Rs. 7022.96 lacs
FORM 'B'
(SEE RULE - 2)
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION,
RESEARCH AND DEVELOPMENT (R & D)
1. Specific areas in which R & D carried out
by the Company. : None
2. Benefits derived as a result of the above
R & D. : Not Applicable
3. Future Plan of Action. : None
4. Expenditure on R & D
a) Capital : Nil
b) Recurring : Nil
c) Total : : Nil
d) Total R & D Expenditure as a Percentage of
Total Turnover Technology absorption, adaptation
and innovation. : Nil
1. Efforts in brief, made towards technology
absorption, adaption and innovation. : None
2. Benefits derived as a result of the above
efforts e.g. Product improvement, cost
reduction, product development, import
substitution etc. : Not Applicable
3. In case of imported technology
(imported during the last 5 years reckoned
from the beginning of the financial year)
following information may be furnished. : Not Applicable
a) Technology Imported -
b) Year of Import -
c) Has technology been fully absorbed ? -
d) If not fully absorbed, Areas where this
has not taken place, reasons therefore and
future plans and actions. -
On Behalf of the Board
Place : Mumbai ASHOK GARWARE
Dated : 21st May, 2010 CHAIRMAN
ANNUAL REPORT 2009-2010
DIRECTOR'S REPORT
TO,
THE MEMBERS,
Your Directors are pleased to present their report as under:
FINANCIAL RESULTS
(Rs. in Crores)
Year ended Year ended
March 31, 2010 March 31, 2009
Income from Operations 181.48 162.24
Other Income 7.19 3.30
Gross Income 188.67 165.54
Expenses for the year 80.40 76.34
Operating Profit 108.27 89.20
Interest & Finance charges 30.89 25.49
Profit Before Depreciation 77.38 63.71
Depreciation 34.09 22.90
Profit Before Tax 43.29 40.81
Provision for Taxation
- Current Tax 2.38 0.30
- Fringe Benefit Tax - 0.20
- Tax for earlier years written back (0.08) (0.06)
Net Profit After Tax 40.99 40.37
Cash Profit 75.08 63.27
FINANCIAL HIGHLIGHTS:
Income from Operations for the year ended on 31.03.2010 stood at Rs. 181.48
crores, as against Rs. 162.24 crores for the previous year, an increase of
11.86%.
The Net Profit for the year ended 31.03.2010 stood at Rs. 40.99 crores as
against Rs. 40.37 crores for the previous year.
The Company continues to follow Accounting Standard 30 ('AS-30' Financial
Instrument: Recognition & Measurement).
OPERATIONS:
During the year under review, the Company sold its second hand Platform
Supply Vessel M.V. Everest' in January, 2010. Presently Eight Vessels are
on long term contract in India and the North Sea. Two Vessels are on a
short term contract in the Far East.
The Curative Petition filed by the Company before the Hon'ble Supreme Court
against Oil & Natural Gas Corporation Limited was dismissed, in spite of
using the best legal talent in the Country.
DIVIDEND:
During the year under review, the Company has declared and paid two Interim
Dividends C@ 8% each aggregating to 16%.
Your Directors subject to the Shareholders approval, are pleased to
recommend a Final Dividend of 7%, for the year under review. Thus, the
total Dividend for the year under review is 23%, as against 21% for the
previous year. The Final Dividend will be paid to the Shareholders, whose
names appear on the Register of Members as on 28.06.2010.
The total cash outflow on account of Dividend and Tax thereon (including
Interim Dividends) amounts to Rs.6.40 crores (previous year Rs 5.85
crores).
EXPANSION / DIVERSIFICATION:
The delivery of the Company's latest acquisition- a 'State of the Art',
Large Platform Supply Vessel having a dead weight of 4315 tons is expected
to be delivered in the month of December 2010/January, 2011.
FUTURE OUTLOOK:
Even though the price of Oil appeared to have stabilized during the last
quarter of the year under review, the very recent global adverse conditions
resulted in downfall of the Oil prices owing to which the Offshore Supply
Vessel market continues to experience some wild fluctuations in charter
rates. The vessels in the spot markets of North Sea and Singapore have been
faced with idle time and on certain occasions, low charter rates. However,
since the majority of the Company's vessels are on long term contracts,
these fluctuations do not greatly affect your Company. The Company is
hopeful that the situation for the vessels in the Spot Market (two AHTSVs
in the Far East) will improve as the world sees more and more exploration
efforts by Exploration & Production (E&P) companies in view of rise in the
price of Oil. The Company will continue to look at the possibility of
acquiring additional vessels / assets within the Offshore Sector.
WHOLLY OWNED SUBSIDIARY (WOS) AT SINGAPORE:
The Wholly Owned Subsidiary of the Company viz., Garware Offshore
International Services Pte. Ltd., (GOISPL) has made a Profit of USD 0.106
million during the year under review.
GOISPL has taken the delivery of 'M.V. Shergar' (an Anchor Handling Tug cum
Supply Vessel) and 'M.V. Beau Geste'(an Accommodation Work Barge) on a long
term 'Bare boat, Charter basis'. These assets were delivered to the Company
in August 2009, and are presently working in the Middle East and India
respectively. (as on 31.03.2010)
The Directors' Report, Auditors' Report and Audited Accounts of GOISPL for
the year ended 31.03.2010 are enclosed pursuant to provisions of Section
212 of the Companies Act, 1956.
LISTING FEES TO STOCK EXCHANGES:
The Company has paid the Listing Fees for the year 2010-11 to Bombay Stock
Exchange Ltd. and The National Stock Exchange of India Ltd.
RESPONSIBILITY STATEMENT:
The Directors confirm:
a) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures
(save and except as stated in the Directors' Report) have been made from
the same.
b) That they have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the State of Affairs of the
Company at the end of the year and the Profit of the Company for that year
ended as on 31.03.2010.
c) That they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provision of the Companies
Act, 1956, for safe-guarding the assets of the Company and for preventing
and detecting fraud and other irregularities.
d) That they have prepared the Annual Accounts on a going concern basis.
INSURANCE:
All the Vessels owned and operated by the Company have been insured for
Hull & Machinery, War Risks and Protection & Indemnity (P & I) claims. The
vessels that transit through the Gulf of Suez and Malacca Straits are also
insured for piracy, kidnapping and ransom. The crew on all the vessels are
also covered under (P & I) insurance.
FIXED DEPOSITS:
During the year under review the Company has not accepted any deposits from
the Public and Shareholders.
DIRECTORATE:
Mr. D.J. Thakkar and Dr. B.S. Cooper, Directors of the Company retire by
rotation Dr. B.S. Cooper offers himself for re-election. Members are
requested to re-elect him. Mr. D.J. Thakkar, retires by rotation and is not
standing for re-election.
AUDITORS:
You are requested to re-appoint Statutory Auditors, Messrs. Raman S. Shah &
Associates, Chartered Accountants for the current year and to fix their
remuneration.
The Company has obtained a Certificate from Auditors certifying that their
re-appointment, if made at the ensuing Annual General Meeting shall be
within the limits prescribed under Section 224 (1-B) of the Companies Act,
1956.
PERSONNEL:
The relations with all Employees of the Company, both Shore and Floating
Staff have been extremely cordial. Your Directors wish to express their
appreciation of the services rendered by the devoted Employees.
PARTICULARS OF EMPLOYEES:
Statement of Particulars of Employees as required by the Provisions of
Section 217(2A) of The Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 as amended and forming part of the Directors'
Report is annexed here to as Annexure I'.
DEMATERIALISATION OF SHARES:
The Company's shares continue to be traded in Electronic Form.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with the Auditors'
Certificate on its compliance is given in a separate Annexure.
ACKNOWLEDGEMENT:
The Board wish to thank the Office of Directorate General of Shipping,
Mercantile Marine Department, Shipping Master, Indian Register of Shipping,
DNV, ABS, State Bank of India, DVB Group Merchant Bank (Asia) Ltd.,
Singapore, State Bank of Travancore, United Bank of India and State Bank of
Hyderabad for their continued support and co-operation during the year.
On Behalf of the Board
Place: Mumbai ASHOK GARWARE
Dated: 21st May, 2010 CHAIRMAN
ANNEXURE TO DIRECTORS' REPORT
STATEMENT REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO AS REQUIRED UNDER CLAUSE (e) OF SUB-
SECTION (1) OF SECTION 217 OF THE COMPANIES ACT, 1956.
Particulars
A. CONSERVATION OF ENERGY
(a) Measures Taken Being Offshore Company, taking of Energy
Conservation measures does not arise.
(b) Additional investments and
proposals, if any, being
implemented for reduction of
energy consumption. Nil
(c) Impact of the Measures (a)
and (b) above and consequent
Impact on Cost of Production. Not Applicable
(d) Total energy consumption and
consumption per Unit of
production in Form A'. Not Applicable
B. TECHNOLOGY ABSORPTION
(e) Efforts made in Technology As per Form 'B' enclosed
absorption.
C. FOREIGN EXCHANGE EARNINGS AND
OUTGO
(f) Activities relating to
exports, initiative taken to
increase exports, development of
New Export market for product
and services and export plans. Nil
(g) (a) Foreign exchange earned
and saved (on account of freight,
charter hire, earnings etc.)
including deemed earnings. Rs. 16604.16 lacs
(b) Foreign exchange used
including Operating expenses,
Standby expenses, Capital
repayment, down payments for
acquisition of Ships and
interest payment. Rs. 7022.96 lacs
FORM 'B'
(SEE RULE - 2)
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION,
RESEARCH AND DEVELOPMENT (R & D)
1. Specific areas in which R & D carried out
by the Company. : None
2. Benefits derived as a result of the above
R & D. : Not Applicable
3. Future Plan of Action. : None
4. Expenditure on R & D
a) Capital : Nil
b) Recurring : Nil
c) Total : : Nil
d) Total R & D Expenditure as a Percentage of
Total Turnover Technology absorption, adaptation
and innovation. : Nil
1. Efforts in brief, made towards technology
absorption, adaption and innovation. : None
2. Benefits derived as a result of the above
efforts e.g. Product improvement, cost
reduction, product development, import
substitution etc. : Not Applicable
3. In case of imported technology
(imported during the last 5 years reckoned
from the beginning of the financial year)
following information may be furnished. : Not Applicable
a) Technology Imported -
b) Year of Import -
c) Has technology been fully absorbed ? -
d) If not fully absorbed, Areas where this
has not taken place, reasons therefore and
future plans and actions. -
On Behalf of the Board
Place : Mumbai ASHOK GARWARE
Dated : 21st May, 2010 CHAIRMAN
DAILY NEWS ROUNDUP- JUNE 22, 2010
Reliance Industries has become the second refinery to receive crude oil supply through Cairn India and its joint venture partner ONGC's pipeline network. (BL)
Oil India has secured an extension for petroleum exploration licences for 10 of its 16 independently held blocks in Assam and Arunachal Pradesh. (BS)
BEML plans to invest Rs6.8bn in the next two to three years for expansion and diversification.(BS)
Tata Teleservices has suggested that the price of each MHz of excess spectrum beyond 6.2MHz in the 1800 Mhz band should be 1.67 times the 3G price set through the recent auction. (BS)
The Bajaj-Renault-Nissan alliance’s small car project continues to get sidelined as plans of production and branding is yet to take shape. (BS)
Bharti Airtel has appointed Ogilvy Africa BV as its marketing services partner for its African operations. (ET)
HCL Technologies denied any plans to merge with the group’s computer hardware subsidiary HCL Infosystems. (ET)
Dewan Housing Finance Corporation stated that IFC has agreed to invest up to Rs200mn by subscribing up to 2mn shares in Aadhar Housing Finance Pvt Ltd. (FE)
Tata Steel won the environmental ministry approval to expand capacity at its Jamshedpur unit. (ET)
Reliance Industries several attempts to take over LyondellBasell may not be the final one. The Netherlands-based major expects the bid to come again in the coming years. (BS)
Cox & Kings (India) plans to raise Rs20bn of equity and debt to fund expansion plans. (ET)
Nagarjuna Construction is planning to dilute ~49% stake by roping in a foreign partner in the special purpose vehicle executing the 1320-MW coal-fired plant in Srikakulam, Andhra Pradesh. (BL)
JSW Steel has demanded a stake in the controversial Obulapuram Mining Company or a definite deal to supply iron ore as talks with Karnataka’s Reddy brothers for taking over their steel company reach a crucial stage. (ET)
GMR Group is willing to buy stakes held by minority partners in all the three airports it operates if there is any such offer. (ET)
The department of public enterprises has proposed that the finance ministry classify loans to sick state-owned companies as priority sector lending, entitling them to lower interest rates and hastening their recovery. (ET)
The government is set to simplify Shops and Establishments Act, some of the provisions in the law may be amended or dispensed with. (BS)
The Union government proposes to switch over to specific rates for value added tax on petrol and diesel instead of the current ad-valorem (percentage) structure. (BS)
Insurance regulator, IRDA is set to frame new guidelines for ULIP products, to make them more attractive for policy holders. (FE)
Oil India has secured an extension for petroleum exploration licences for 10 of its 16 independently held blocks in Assam and Arunachal Pradesh. (BS)
BEML plans to invest Rs6.8bn in the next two to three years for expansion and diversification.(BS)
Tata Teleservices has suggested that the price of each MHz of excess spectrum beyond 6.2MHz in the 1800 Mhz band should be 1.67 times the 3G price set through the recent auction. (BS)
The Bajaj-Renault-Nissan alliance’s small car project continues to get sidelined as plans of production and branding is yet to take shape. (BS)
Bharti Airtel has appointed Ogilvy Africa BV as its marketing services partner for its African operations. (ET)
HCL Technologies denied any plans to merge with the group’s computer hardware subsidiary HCL Infosystems. (ET)
Dewan Housing Finance Corporation stated that IFC has agreed to invest up to Rs200mn by subscribing up to 2mn shares in Aadhar Housing Finance Pvt Ltd. (FE)
Tata Steel won the environmental ministry approval to expand capacity at its Jamshedpur unit. (ET)
Reliance Industries several attempts to take over LyondellBasell may not be the final one. The Netherlands-based major expects the bid to come again in the coming years. (BS)
Cox & Kings (India) plans to raise Rs20bn of equity and debt to fund expansion plans. (ET)
Nagarjuna Construction is planning to dilute ~49% stake by roping in a foreign partner in the special purpose vehicle executing the 1320-MW coal-fired plant in Srikakulam, Andhra Pradesh. (BL)
JSW Steel has demanded a stake in the controversial Obulapuram Mining Company or a definite deal to supply iron ore as talks with Karnataka’s Reddy brothers for taking over their steel company reach a crucial stage. (ET)
GMR Group is willing to buy stakes held by minority partners in all the three airports it operates if there is any such offer. (ET)
The department of public enterprises has proposed that the finance ministry classify loans to sick state-owned companies as priority sector lending, entitling them to lower interest rates and hastening their recovery. (ET)
The government is set to simplify Shops and Establishments Act, some of the provisions in the law may be amended or dispensed with. (BS)
The Union government proposes to switch over to specific rates for value added tax on petrol and diesel instead of the current ad-valorem (percentage) structure. (BS)
Insurance regulator, IRDA is set to frame new guidelines for ULIP products, to make them more attractive for policy holders. (FE)
Monday, June 21, 2010
LANCO INFRATECH - TECHNICALS
Investors with medium-term perspective can consider buying the stock of Lanco Infratech (Rs 68.4).
The company owns and operates independent power projects and is also active in EPC (engineering, procurement and construction) and property development.
After forming a strong base at Rs 10 in early 2009, the stock started to trend upwards. Since then, it has been on steady long-term uptrend, shaping higher peaks and troughs.
Moreover, medium-term trend is also up from its February low of Rs 40.8. Both the long and medium-term uptrend-lines are intact.
The stock gained more than 8 per cent last week, conclusively breaching the long-term resistance band between Rs 60 and Rs 65.
Currently, it is trading way above its 21- and 50-day moving averages.
The daily relative strength index is featuring in the bullish zone and weekly RSI has just entered this zone from the neutral region. Likewise, both daily and weekly moving average convergence divergence indicators are hovering in the positive territory reinforcing the bullish momentum.
Our medium-term forecast on the stock is bullish.
We believe that Lanco Infratech has the potential to trend upward to our price target of 83 in the approaching weeks. Investors with medium-term perspective can consider buying the stock with stop-loss at Rs 76. Short-term traders can buy the stock with a target of Rs 75.5. Short-term stop-loss at is Rs 65.
The company owns and operates independent power projects and is also active in EPC (engineering, procurement and construction) and property development.
After forming a strong base at Rs 10 in early 2009, the stock started to trend upwards. Since then, it has been on steady long-term uptrend, shaping higher peaks and troughs.
Moreover, medium-term trend is also up from its February low of Rs 40.8. Both the long and medium-term uptrend-lines are intact.
The stock gained more than 8 per cent last week, conclusively breaching the long-term resistance band between Rs 60 and Rs 65.
Currently, it is trading way above its 21- and 50-day moving averages.
The daily relative strength index is featuring in the bullish zone and weekly RSI has just entered this zone from the neutral region. Likewise, both daily and weekly moving average convergence divergence indicators are hovering in the positive territory reinforcing the bullish momentum.
Our medium-term forecast on the stock is bullish.
We believe that Lanco Infratech has the potential to trend upward to our price target of 83 in the approaching weeks. Investors with medium-term perspective can consider buying the stock with stop-loss at Rs 76. Short-term traders can buy the stock with a target of Rs 75.5. Short-term stop-loss at is Rs 65.
DAILY NEWS ROUNDUP- JUNE21 2010
Reliance Industries to foray into power; plans mega investment. (BL)
Besides getting 468 branches, ICICI Bank will also get control of 58 branches of a regional rural bank sponsored by Bank of Rajasthan. (BL)
Saudi Binladin Group is all set to buy a 20% stake in Maytas Infra. (BS)
Reliance Power has started generating power from the second unit of Rosa thermal power project. (ET)
Dr Reddy’s Laboratories is exploring the option of demerging its domestic formulations business and unlocking value. (BS)
Maruti Suzuki plans to introduce a CNG variant of its recently upgraded WagonR hatchback within the next three months. The upgraded version could cost about Rs 70,000 more. (BS)
IDFC is likely to divest a 26% stake in its AMC to global fund managers. (ET)
Promoters of Max India have increased their stake in the company to about 35% last week and are expected to raise their holding further in the near future. (BS)
Brigade Enterprises has announced that it will raise up to Rs7.5bn by the issue of equity-based securities to various investors by means of public or private offering or QIP or through preferential share allotment. (BS)
Dabur India has completed the merger with Fem Care Pharma. (ET)
Gammon Infrastructure to enter thermal power generation business for which it has signed an agreement to acquire a company that is setting up a 250MW power plant. (BL)
Subhash Projects aims to raise Rs3bn to finance its Bhiwandi water project by selling equity of the special purpose vehicle. (ET)
Ceat Tyres is planning to set up a greenfield facility at Haridwar in Uttarakhand to make radial and tubeless tyres. (ET)
Essar Group wants to partner with Uganda’s government to explore for oil in the East African country. (ET)
Ahluwalia Contracts bagged 11 new orders worth Rs5.05bn from various entities. (ET)
Atul Auto plans to set up a new three-wheeler manufacturing plant in a southern state in the next two-years. (ET)
Future Group plans to invest Rs6bn over the next 18 months for the expansion of its hyper market retail chain Big Bazaar. (ET)
Reliance Broadcast Network will form an equal joint venture with US media conglomerate CBS Corp to own and operate TV channels. (BS)
Novelis could bid for the rolled products division of Rio Tinto Alcan. (ET)
FDI in the services sector dropped by 33.5% to US$4.39bn during 2009-10. (BS)
India’s exports grew for the seventh straight month, rising by 34.1% to US$16.1bn in May. (BS)
The finance ministry said it might tag the securities transaction tax (STT) with the capital gains tax, or continue to levy it in its existing form. (BS)
Insurance industry regulator Irda has emerged the victor in a tussle over the regulation of socalled unit-linked insurance plans, or Ulips, with the government. (ET)
India’s foreign exchange reserves rose by US$1.69bn last week. (ET)
Port traffic at the 12 major ports, for the month of May, grew by 4.5% yoy to 48mn tonnes. (DNA)
Besides getting 468 branches, ICICI Bank will also get control of 58 branches of a regional rural bank sponsored by Bank of Rajasthan. (BL)
Saudi Binladin Group is all set to buy a 20% stake in Maytas Infra. (BS)
Reliance Power has started generating power from the second unit of Rosa thermal power project. (ET)
Dr Reddy’s Laboratories is exploring the option of demerging its domestic formulations business and unlocking value. (BS)
Maruti Suzuki plans to introduce a CNG variant of its recently upgraded WagonR hatchback within the next three months. The upgraded version could cost about Rs 70,000 more. (BS)
IDFC is likely to divest a 26% stake in its AMC to global fund managers. (ET)
Promoters of Max India have increased their stake in the company to about 35% last week and are expected to raise their holding further in the near future. (BS)
Brigade Enterprises has announced that it will raise up to Rs7.5bn by the issue of equity-based securities to various investors by means of public or private offering or QIP or through preferential share allotment. (BS)
Dabur India has completed the merger with Fem Care Pharma. (ET)
Gammon Infrastructure to enter thermal power generation business for which it has signed an agreement to acquire a company that is setting up a 250MW power plant. (BL)
Subhash Projects aims to raise Rs3bn to finance its Bhiwandi water project by selling equity of the special purpose vehicle. (ET)
Ceat Tyres is planning to set up a greenfield facility at Haridwar in Uttarakhand to make radial and tubeless tyres. (ET)
Essar Group wants to partner with Uganda’s government to explore for oil in the East African country. (ET)
Ahluwalia Contracts bagged 11 new orders worth Rs5.05bn from various entities. (ET)
Atul Auto plans to set up a new three-wheeler manufacturing plant in a southern state in the next two-years. (ET)
Future Group plans to invest Rs6bn over the next 18 months for the expansion of its hyper market retail chain Big Bazaar. (ET)
Reliance Broadcast Network will form an equal joint venture with US media conglomerate CBS Corp to own and operate TV channels. (BS)
Novelis could bid for the rolled products division of Rio Tinto Alcan. (ET)
FDI in the services sector dropped by 33.5% to US$4.39bn during 2009-10. (BS)
India’s exports grew for the seventh straight month, rising by 34.1% to US$16.1bn in May. (BS)
The finance ministry said it might tag the securities transaction tax (STT) with the capital gains tax, or continue to levy it in its existing form. (BS)
Insurance industry regulator Irda has emerged the victor in a tussle over the regulation of socalled unit-linked insurance plans, or Ulips, with the government. (ET)
India’s foreign exchange reserves rose by US$1.69bn last week. (ET)
Port traffic at the 12 major ports, for the month of May, grew by 4.5% yoy to 48mn tonnes. (DNA)
Friday, June 18, 2010
SRF- SHORT TERM TRADING.
Investors with short-term perspective can consider buying the stock of SRF. It is seen from the charts of the stock that it has been on a steady intermediate-term uptrend. The stock has been forming higher peaks and higher trough from its February 2009 low of Rs 62. Within this uptrend the stock was on a medium-term sideways consolidation in the range between Rs 180 and Rs 220 from last October till early May this year. Subsequently, the stock breached the key resistance level of Rs 220 and is hovering well above it. Moreover, the stock is currently positioned way above its 21- and 50-day moving averages. Reinforcing the bullish momentum, the stock climbed 3 per cent with good volume on Thursday. The daily relative strength index has entered the bullish zone while the weekly RSI is already featuring in this zone. The daily moving average convergence divergence indicator has signalled a buy and is hovering in the positive territory. We like the stock from a short-term perspective and its short-term outlook is also bullish. We anticipate the stock to rally until it hits our price targets of Rs 242 or Rs 250 in the approaching sessions. Short-term traders can buy the stock with stop-loss at Rs 226.
RIL TO HOG THE HEADLINES!
The Ambani brothers have taken their father’s advice and have hopefully left behind their adversities. How well they turn them into opportunities, will be visible somewhat today as RIL holds its much-anticipated AGM in Mumbai. We expect a rather subdued start to the day but Reliance group companies could hog more limelight as we wrap up another good week. Emotions may run high in the wake of the rapprochements between the two estranged Ambani siblings. Reports point to a few big-bang announcements by Mukesh Ambani. A word of caution here. Reliance and ADAG group shares have rallied in recent past. It won’t be a bad idea to adopt the ‘sell on news’ strategy and lock in some gains in these counters.
DAILY NEWS ROUNDUP- JUNE 18 2010
Bharti Airtel, Idea Cellular and Vodafone Essar have all refused to participate in the telecom regulator’s latest consultation process to set a price for second-generation (2G) spectrum, citing lack of transparency by Trai. (ET)
RIL in talks for acquiring 26% stake in Papavav Shipyard. (ET)
GlaxoSmithKline Consumer Healthcare plans to enter the premium cookies market. (ET)
JSPL has got three years extension to begin constructing its US$2.1 billion steel plant in Bolivia as against the original deadline of 2010. (ET)
Ranbaxy may close down one of its biggest global bulk drug production units at Mohali and is sourcing few products made at the facility. (ET)
Infosys Technologies has approached the Tamil Nadu government for 200 acres of land near Chennai for setting up a development centre. (BS)
Mahindra Satyam is likely to announce a pay hike for all its employees on July 1. (BS)
Reliance Power has started generation from the second unit of the Rosa Power Project in Uttar Pradesh. (BL)
Reliance Communications plans to hive off its direct-to-home (DTH) and internet protocol TV (IPTV) businesses into a separate company Reliance Digital Works. (BS)
Tata Motors has piped Maruti Suzuki India as sole supplier of close to 2,000 cars, jeeps and trucks for the Commonwealth Games in Delhi in October for movement of VIPs, international delegates and athletes’ families. (BS)
Tata Motors is charting a strategy for a 25% carbon dioxide reduction in its Jaguar and Land Rover models. (BL)
Tata Motors today launched a new offering in the Winger range, the Tata Winger Platinum, in Chandigarh. (BS)
Mahindra & Mahindra, Arabia Holdings and Ras Al-Khaimah Transport Investments have joined hands for a joint venture in Emirates of Ras Al Khaimah in the UAE for vehicle armouring. (BL)
Punjab National Bank would pick up 64% stake in JSC Dana Bank in Kazakhstan. (BS)
Punjab National Bank to raise US$100mn fund for overseas expansion. (FE)
Bajaj Hindusthan’s board approved the company’s merger with its unit Bajaj Hindusthan Sugar. (ET)
Foreign companies line up for a share of India’s US$3.5bn solar business pie. (ET)
Religare to buy boutique AMC’s in US. (FE)
Jet Airways has entered into a code-share agreement with United Airlines, giving its customers access to wider network connectivity between the United States and India. (BL)
Brigade Enterprises has announced that it will raise up to Rs7.5bn by the issue of equity-based securities to various investors by means of public or private offering or qualified institutional placement or through preferential share allotment. (BS)
Hitachi Data Systems Corporation, a wholly owned subsidiary of Hitachi, has entered into a technology collaboration with Wipro, to offer co-branded products and services on Hitachi technology. (BL)
MindTree, which has bagged the application development and maintenance services contract of the Unique Identification project ‘Aadhaar', is eyeing a greater share of the UID pie, with more processes coming up for bidding. (BL)
Duncans Industries has roped in Delhi-based Jaypee Group for the revival and rehabilitation of its fertiliser division. (BL)
Food price inflation for week ended June 5 was at 16.12% compared to 16.74% in the previous week. (ET)
According to deputy governor K C Chakrabarty, RBI favours giving banks the freedom to decide interest rates on their savings deposits. (BS)
RBIhas asked all banks to go back to their boards and re-work their plans on financial inclusion. (BS)
The government is likely to postpone the launch of the mobile number portability (MNP) scheme to early next year. (BS)
India plans to embark on a programme to tap the shale oil reserves in the country after the directorate general of hydrocarbons (DGH) found substantial reserves of the gas in Assam and Arunachal Pradesh. (BS)
CERC has notified its regulations on ‘Sharing of Inter State Transmission Charges and Losses’. These regulations would implement the point of connection method of sharing the cost of inter-state transmission services in India. (BS)
RIL in talks for acquiring 26% stake in Papavav Shipyard. (ET)
GlaxoSmithKline Consumer Healthcare plans to enter the premium cookies market. (ET)
JSPL has got three years extension to begin constructing its US$2.1 billion steel plant in Bolivia as against the original deadline of 2010. (ET)
Ranbaxy may close down one of its biggest global bulk drug production units at Mohali and is sourcing few products made at the facility. (ET)
Infosys Technologies has approached the Tamil Nadu government for 200 acres of land near Chennai for setting up a development centre. (BS)
Mahindra Satyam is likely to announce a pay hike for all its employees on July 1. (BS)
Reliance Power has started generation from the second unit of the Rosa Power Project in Uttar Pradesh. (BL)
Reliance Communications plans to hive off its direct-to-home (DTH) and internet protocol TV (IPTV) businesses into a separate company Reliance Digital Works. (BS)
Tata Motors has piped Maruti Suzuki India as sole supplier of close to 2,000 cars, jeeps and trucks for the Commonwealth Games in Delhi in October for movement of VIPs, international delegates and athletes’ families. (BS)
Tata Motors is charting a strategy for a 25% carbon dioxide reduction in its Jaguar and Land Rover models. (BL)
Tata Motors today launched a new offering in the Winger range, the Tata Winger Platinum, in Chandigarh. (BS)
Mahindra & Mahindra, Arabia Holdings and Ras Al-Khaimah Transport Investments have joined hands for a joint venture in Emirates of Ras Al Khaimah in the UAE for vehicle armouring. (BL)
Punjab National Bank would pick up 64% stake in JSC Dana Bank in Kazakhstan. (BS)
Punjab National Bank to raise US$100mn fund for overseas expansion. (FE)
Bajaj Hindusthan’s board approved the company’s merger with its unit Bajaj Hindusthan Sugar. (ET)
Foreign companies line up for a share of India’s US$3.5bn solar business pie. (ET)
Religare to buy boutique AMC’s in US. (FE)
Jet Airways has entered into a code-share agreement with United Airlines, giving its customers access to wider network connectivity between the United States and India. (BL)
Brigade Enterprises has announced that it will raise up to Rs7.5bn by the issue of equity-based securities to various investors by means of public or private offering or qualified institutional placement or through preferential share allotment. (BS)
Hitachi Data Systems Corporation, a wholly owned subsidiary of Hitachi, has entered into a technology collaboration with Wipro, to offer co-branded products and services on Hitachi technology. (BL)
MindTree, which has bagged the application development and maintenance services contract of the Unique Identification project ‘Aadhaar', is eyeing a greater share of the UID pie, with more processes coming up for bidding. (BL)
Duncans Industries has roped in Delhi-based Jaypee Group for the revival and rehabilitation of its fertiliser division. (BL)
Food price inflation for week ended June 5 was at 16.12% compared to 16.74% in the previous week. (ET)
According to deputy governor K C Chakrabarty, RBI favours giving banks the freedom to decide interest rates on their savings deposits. (BS)
RBIhas asked all banks to go back to their boards and re-work their plans on financial inclusion. (BS)
The government is likely to postpone the launch of the mobile number portability (MNP) scheme to early next year. (BS)
India plans to embark on a programme to tap the shale oil reserves in the country after the directorate general of hydrocarbons (DGH) found substantial reserves of the gas in Assam and Arunachal Pradesh. (BS)
CERC has notified its regulations on ‘Sharing of Inter State Transmission Charges and Losses’. These regulations would implement the point of connection method of sharing the cost of inter-state transmission services in India. (BS)
Thursday, June 17, 2010
KALINDI RAIL NIRMAN- SHORT TERM TRADING
We recommend a buy in the stock of Kalindi Rail Nirman from a short-term trading perspective. It is apparent from the charts of the stock that in December 2009, it encountered a key long-term resistance band between Rs 230 and Rs 240 and resumed its long-term downtrend that has been in place from January 2008 peak of Rs 600. Also since December 2009, the stock has been on a medium-term downtrend. However, the stock's medium-term downtrend got halted with support around Rs 115 in May this year. Triggered by the positive divergence displayed in the daily moving average convergence divergence indicators, the stock reversed direction from Rs 115. The short-term trend is up for the stock. On June 16, it penetrated the immediate resistance as well as 50-day moving average of around Rs 130 by gaining 5.5 per cent, with above-average volumes. The daily relative strength index has entered into the bullish zone from the neutral region and the weekly RSI has entered into the neutral region from the bearish zone. The daily MACD is on the brink of entering in the positive territory. We are bullish on the stock from a short-term perspective. We expect it to move up until it hits our price targets of Rs 139 or Rs 142 in the forthcoming sessions. Short-term traders can buy the stock with stop-loss at Rs 127.
Wednesday, June 16, 2010
ADVANCE TAX FIGURES-Q1FY11
S.No. | Company | Advance Tax (Q1FY11) | Advance Tax (Q1FY10) |
1 | ACC | Rs 50 cr | Rs 60 cr |
2 | Ambuja Cement | Rs 65 cr | Rs 70 cr |
3 | Bajaj Auto | Rs 110 cr | Rs 50 cr |
4 | Bank of Baroda | Rs 225 cr | Rs 210 cr |
5 | Bharti Airtel | Rs 179 cr | Rs 100 cr |
6 | BHEL | Rs 400 cr | Rs 320 cr |
7 | CBI | Rs 100 cr | Rs 85 cr |
8 | HDFC | Rs 215 cr | Rs 175 cr |
9 | HDFC Bank | Rs 315 cr | Rs 250 cr |
10 | Hero Honda | Rs 75.7 cr | Rs 64.6 cr |
11 | HUL | Rs 75 cr | - |
12 | Infosys | Rs 275 cr | Rs 230 cr |
13 | HPCL | Rs 61 cr | Rs 15 cr |
14 | IDBI | Rs 80 cr | - |
15 | Johnson and Johnson | Rs 16 cr | Rs 14 cr |
16 | LITL | Rs 20 cr | Rs 12 cr |
17 | Lupin | Rs 15.6 cr | Rs 11.4 cr |
18 | Nestle India | Rs 44 cr | Rs 37.5 cr |
19 | NTPC | Rs 280 cr | Rs 276 cr |
20 | Oriental Bank | Rs 140 cr | Rs 70 cr |
21 | PFC | Rs 127 cr | Rs 110 cr |
22 | PNB | Rs 317 cr | Rs 263 cr |
23 | Ranbaxy | Rs 17.5 cr | Rs 15 cr |
24 | REC | Rs 128 cr | Rs 88 cr |
25 | RIL | Rs 653 cr | Rs 314 cr |
26 | Supreme Industries | Rs 15 cr | Rs 6 cr |
27 | Suzlon | Nil | Rs 35 cr |
28 | TCS | Rs 128 cr | Rs 53 cr |
29 | Union Bank | Rs 168 cr | Rs 104 cr |
30 | Yes Bank | Rs 50 cr |
ASIAN STOCKS WITNESS FOLLOW UP BUYING.
Strong overnight cues and lack of fresh negative news support sentiments
The Asian stocks went up smartly today, witnessing follow up buying after gains in last session with Japan and Australia leading the broad markets on exuberant overnight US cues and strength in commodity prices. The lack of further negative news on the Eurozone debt trouble continued to fuel the risk appetite in the markets and recent gains in Euro also augured well for risk appetite. The Spanish government denied media reports stating that the country is asking a credit line from the European Commission and IMF, ensuring that there is no further addition to the Eurozone debt worries. However, the mid day trades seemed to reflect a dash of moderation as the DOW futures slipped 36 points and dollar neared 1.2300 against the Euro.
The Australian equities closed on a positive note with following strong closing on Wall Street in the previous session on bargain hunting amid optimism about economic recovery. Strong commodity prices augured well for the miners and the oil refiners. The benchmark S&P/ASX200 Index added 54.00 points, or 1.20% and closed at 4,559, while the All-Ordinaries Index ended at 4,572, representing a gain of 54.50 points, or 1.21%.
On the economic front, a report jointly released by the Westpac Bank and Melbourne Institute revealed that a leading indicator of the Australian economy continued to surge ahead in April despite moderation in the pace of growth. As per the report, the leading index rose 7.6% on an annualized basis in April, well above the long-term trend of 3%. In March, the annualized rate stood at 8.8%, a twelve and a half year high.
In Japan, the Nikkei Stock Average rose 1.8% to 10,067.15, finishing above the 10,000-mark for the first time since May 20. Japanese exporters with high exposure to the Euro zone jumped after the euro touched its highest level against the yen since June 4. A drop in the yen augurs well for the exporters by booting the earnings.
In Mumbai, stocks had a volatile outing but mostly stayed in green. The recent jump in the domestic inflation figures cut the risk appetite to some extent and the markets did not advance as rapidly as the Asian indices did. The BSESENSEX ended at 17462.87 points provisionally, adding 50 points or 0.29% with the automobiles and information technology shares outperforming.
In other markets, South Korea's Kospi closed 0.9%, Singapore's Straits Times Index gained 1.0%, New Zealand's NZX 50 gained 0.7% and Philippine stocks ended 0.8% higher. Markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival holiday.
In commodities, crude edged up above $77 in early moves but drifted lower as traders locked in profits ahead of the US weekly inventories data. The commodity was last seen quoting at $76.69, down 25 cents from the previous close. Gold bounced off the lows and managed to gain a couple of dollars to linger just under $1240 an ounce.
The Asian stocks went up smartly today, witnessing follow up buying after gains in last session with Japan and Australia leading the broad markets on exuberant overnight US cues and strength in commodity prices. The lack of further negative news on the Eurozone debt trouble continued to fuel the risk appetite in the markets and recent gains in Euro also augured well for risk appetite. The Spanish government denied media reports stating that the country is asking a credit line from the European Commission and IMF, ensuring that there is no further addition to the Eurozone debt worries. However, the mid day trades seemed to reflect a dash of moderation as the DOW futures slipped 36 points and dollar neared 1.2300 against the Euro.
The Australian equities closed on a positive note with following strong closing on Wall Street in the previous session on bargain hunting amid optimism about economic recovery. Strong commodity prices augured well for the miners and the oil refiners. The benchmark S&P/ASX200 Index added 54.00 points, or 1.20% and closed at 4,559, while the All-Ordinaries Index ended at 4,572, representing a gain of 54.50 points, or 1.21%.
On the economic front, a report jointly released by the Westpac Bank and Melbourne Institute revealed that a leading indicator of the Australian economy continued to surge ahead in April despite moderation in the pace of growth. As per the report, the leading index rose 7.6% on an annualized basis in April, well above the long-term trend of 3%. In March, the annualized rate stood at 8.8%, a twelve and a half year high.
In Japan, the Nikkei Stock Average rose 1.8% to 10,067.15, finishing above the 10,000-mark for the first time since May 20. Japanese exporters with high exposure to the Euro zone jumped after the euro touched its highest level against the yen since June 4. A drop in the yen augurs well for the exporters by booting the earnings.
In Mumbai, stocks had a volatile outing but mostly stayed in green. The recent jump in the domestic inflation figures cut the risk appetite to some extent and the markets did not advance as rapidly as the Asian indices did. The BSESENSEX ended at 17462.87 points provisionally, adding 50 points or 0.29% with the automobiles and information technology shares outperforming.
In other markets, South Korea's Kospi closed 0.9%, Singapore's Straits Times Index gained 1.0%, New Zealand's NZX 50 gained 0.7% and Philippine stocks ended 0.8% higher. Markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival holiday.
In commodities, crude edged up above $77 in early moves but drifted lower as traders locked in profits ahead of the US weekly inventories data. The commodity was last seen quoting at $76.69, down 25 cents from the previous close. Gold bounced off the lows and managed to gain a couple of dollars to linger just under $1240 an ounce.
Tuesday, June 15, 2010
ECONOMY REBOUNDS,RELIANCE ENTRY INTO TELECOM
Economics (April 2010 IIP: Growth rebounds): April 2010 IIP growth, at 17.6% YoY, was significantly above our estimate and consensus. More importantly, after three months of staying almost flat (or negative) MoM, IIP grew 2.4% (seasonally adjusted). This translates to an annualised growth rate of 10.8% for the three months to April 2010. The year-ago period’s low base will result in continued double-digit growth for the next few months. However, the low-base effect comes off rapidly from May 2009 onwards, as IIP grew at average 1.7% MoM (seasonally adjusted) between May 2009 and September 2009. While the pick-up in growth raises the probability of an inter-meeting rate hike by the RBI, we think it will be the inflation data rather than IIP that will be the bigger determinant of a rate hike. We continue to expect RBI to tighten policy rates by a further 100bps through the rest of FY11.
Telecom (Reliance Industries returns through BWA): Reliance Industries (RIL) returned to telecom at the conclusion of the BWA auctions by buying 95% of Infotel Broadband, which won the 2300MHz BWA spectrum in all 22 circles for US$2.7bn. RIL stated that it will invest US$1bn. Qualcomm, which stated that its aim is to provide capacity enhancement solutions to 3G operators, won in four circles including Delhi and Mumbai. Bharti won four circles for US$705m. We expect RIL, which has emphasised on TD-LTE technology and the enterprise business, to eventually enter the consumer business as well. With RIL’s entry, regulatory uncertainty may increase, especially relating to VoIP and may impact sector valuations (LTE is ~2 years away).
Corporate Front Page
- Reliance Industries discovered more oil at an on-land site in Gujarat’s Cambay Basin, raising the potential of the exploratory fields it has been drilling. (ET)
- The management of Reliance Industries has told its board that it has identified power, telecommunications, financial services and pharmaceuticals for investments in the near future. (ET)
- US court granted a motion seeking a preliminary injunction to block the launch of Dr Reddy’s Labs generic version of Sanofi-Aventis' anti-allergic drug, Allegra D24. (BS)
- Reliance Industries will acquire Infotel Broadband Services for Rs48bn, marking the re-entry into the telecom market. (BS)
- Tata Technologies, the engineering and design subsidiary of Tata Motors has been selected by US-based Genovation Cars to design and build a prototype of an electric car for it. (BS)
- Orchid Chemicals plans more buyouts in the US and Europe. (BS)
- Jubilant Organosys plans setting up two 10,000 tons per annum units each to make Niacinamide and 3-Cyanopyridine at its upcoming special economic zone (SEZ) at Bharuch in Gujarat. (BS)
- The government approved infusion of Rs62.11bn in five public sector banks, Bank of Maharashtra, Central Bank, UCO Bank, IDBI Bank and Union Bank. (BS)
- Welspun India plans to invest Rs3bn to streamline its two production facilities to enhance output of products. (BS)
- Apollo Tyres announces a lockout at one of its factories, in Kerala’s Thrissur district, resulting in an estimated daily loss of Rs30mn. (BS)
- PowerGrid Corporation firms up an investment plan of Rs810bn over the next 8 years to set up transmission networks, including the evacuation of power from upcoming projects in some neighbouring countries. (BS)
- Nalco is set to finalise the terms of its joint venture agreement with two foreign partners for an Rs180bn smelter and power plant project in Indonesia within next couple of months. (BS)
- India's national authority on clean development mechanism has approved Adani Power’s two power projects to draw carbon credits worth Rs2.9bn annually. (ET)
- The Bombay High Court refused to grant any interim relief to Tata Power, which challenged the Maharashtra government’s memorandum and the state committee’s recommendation to maintain status quo, by supplying 360 Mw power to Reliance Infrastructure, through a writ petition. (BS)
- Infosys Technologies is looking at small acquisitions in France and Germany to expand footprint in the region. (BS)
- Dhanalaxmi Bank plans to raise Rs3.5bn through a QIP by the third week of July. (BS)
- Sun TV promoter bought a 37.7% stake in SpiceJet. (ET)
- Renuka Sugars is all set to acquire Brazilian firm Equipav SA Açúcar e Álcool in its second attempt. It will pay around Rs11.5bn, 25% lower than what it had quoted in February. (ET)
- Eicher-Volvo JV to invest Rs2.88bn in a new engine facility to be located at Pithampur in Madhya Pradesh. (ET)
- Jindal Steel and Power has submitted its bid to acquire 60% stake in African steel maker Zimbabwe Iron and Steel Company. (ET)
- ABG Shipyard is in talks to acquire bauxite mines in the West African country of Sierra Leone. (BL)
- ABG Shipyard proposes to set up a joint venture with Sierra Leone Exploration Mining Company. (BL)
- The Visakhapatnam Port Trust signed three major agreements with Sterlite Industries, SAIL and Essar. (BL)
- HCC has evinced interest in developing the Kalpasar project and has prepared a draft proposal and submitted it to the state government. (BS)
Economy Front Page
- Industrial production surpassed all predictions to grow 17.6% in April. (ET)
- The Reserve Bank of India asks companies in the real estate sector to restructure the deals they have cut with foreign investors. (ET)
Telecom (Reliance Industries returns through BWA): Reliance Industries (RIL) returned to telecom at the conclusion of the BWA auctions by buying 95% of Infotel Broadband, which won the 2300MHz BWA spectrum in all 22 circles for US$2.7bn. RIL stated that it will invest US$1bn. Qualcomm, which stated that its aim is to provide capacity enhancement solutions to 3G operators, won in four circles including Delhi and Mumbai. Bharti won four circles for US$705m. We expect RIL, which has emphasised on TD-LTE technology and the enterprise business, to eventually enter the consumer business as well. With RIL’s entry, regulatory uncertainty may increase, especially relating to VoIP and may impact sector valuations (LTE is ~2 years away).
Corporate Front Page
- Reliance Industries discovered more oil at an on-land site in Gujarat’s Cambay Basin, raising the potential of the exploratory fields it has been drilling. (ET)
- The management of Reliance Industries has told its board that it has identified power, telecommunications, financial services and pharmaceuticals for investments in the near future. (ET)
- US court granted a motion seeking a preliminary injunction to block the launch of Dr Reddy’s Labs generic version of Sanofi-Aventis' anti-allergic drug, Allegra D24. (BS)
- Reliance Industries will acquire Infotel Broadband Services for Rs48bn, marking the re-entry into the telecom market. (BS)
- Tata Technologies, the engineering and design subsidiary of Tata Motors has been selected by US-based Genovation Cars to design and build a prototype of an electric car for it. (BS)
- Orchid Chemicals plans more buyouts in the US and Europe. (BS)
- Jubilant Organosys plans setting up two 10,000 tons per annum units each to make Niacinamide and 3-Cyanopyridine at its upcoming special economic zone (SEZ) at Bharuch in Gujarat. (BS)
- The government approved infusion of Rs62.11bn in five public sector banks, Bank of Maharashtra, Central Bank, UCO Bank, IDBI Bank and Union Bank. (BS)
- Welspun India plans to invest Rs3bn to streamline its two production facilities to enhance output of products. (BS)
- Apollo Tyres announces a lockout at one of its factories, in Kerala’s Thrissur district, resulting in an estimated daily loss of Rs30mn. (BS)
- PowerGrid Corporation firms up an investment plan of Rs810bn over the next 8 years to set up transmission networks, including the evacuation of power from upcoming projects in some neighbouring countries. (BS)
- Nalco is set to finalise the terms of its joint venture agreement with two foreign partners for an Rs180bn smelter and power plant project in Indonesia within next couple of months. (BS)
- India's national authority on clean development mechanism has approved Adani Power’s two power projects to draw carbon credits worth Rs2.9bn annually. (ET)
- The Bombay High Court refused to grant any interim relief to Tata Power, which challenged the Maharashtra government’s memorandum and the state committee’s recommendation to maintain status quo, by supplying 360 Mw power to Reliance Infrastructure, through a writ petition. (BS)
- Infosys Technologies is looking at small acquisitions in France and Germany to expand footprint in the region. (BS)
- Dhanalaxmi Bank plans to raise Rs3.5bn through a QIP by the third week of July. (BS)
- Sun TV promoter bought a 37.7% stake in SpiceJet. (ET)
- Renuka Sugars is all set to acquire Brazilian firm Equipav SA Açúcar e Álcool in its second attempt. It will pay around Rs11.5bn, 25% lower than what it had quoted in February. (ET)
- Eicher-Volvo JV to invest Rs2.88bn in a new engine facility to be located at Pithampur in Madhya Pradesh. (ET)
- Jindal Steel and Power has submitted its bid to acquire 60% stake in African steel maker Zimbabwe Iron and Steel Company. (ET)
- ABG Shipyard is in talks to acquire bauxite mines in the West African country of Sierra Leone. (BL)
- ABG Shipyard proposes to set up a joint venture with Sierra Leone Exploration Mining Company. (BL)
- The Visakhapatnam Port Trust signed three major agreements with Sterlite Industries, SAIL and Essar. (BL)
- HCC has evinced interest in developing the Kalpasar project and has prepared a draft proposal and submitted it to the state government. (BS)
Economy Front Page
- Industrial production surpassed all predictions to grow 17.6% in April. (ET)
- The Reserve Bank of India asks companies in the real estate sector to restructure the deals they have cut with foreign investors. (ET)
MOODY'S BLUES AGAIN!
Don't waste your time away thinkin' 'bout yesterday's blues. - Jon Bon Jovi.
Well, well, well, the bulls are Livin’ on a prayer. Just when equity markets were getting back into the groove comes another bolt from the blue. Moody’s has cut Greece's government bond ratings to junk. The Dow abandoned triple-digit gains to close lower. The euro, which regained some lost ground against the dollar, retreated from its daily highs.
European markets rallied on though as the Greek downgrade by Moody’s was announced after markets closed there. Asian markets are down, though not by a great deal.
So, at worst we could see a flat to sluggish start and a choppy session. There is some chance of a turnaround by the end of the day. While we expect the market to remain resilient, we advocate some caution given the uncertainties hovering around.
So, at worst we could see a flat to sluggish start and a choppy session. There is some chance of a turnaround by the end of the day. While we expect the market to remain resilient, we advocate some caution given the uncertainties hovering around.
The good news is monsoon seems to be progressing gradually. With inflation jumping into double digits, every spell of shower from here on will bring relief. The sudden spurt in inflation has stoked some fears of a rate hike soon. However, given the fragile global environment, short-term liquidity crunch and a tepid credit growth, a rate hike may not happen before the scheduled July policy meeting. At least we are not in favour of such a move.
Among the other more positive news, St. Louis Fed President James Bullard, speaking in Tokyo, said he expects an Asian-led world economic recovery to continue, and that he didn't see evidence of a Chinese bubble. Nor did he think the European debt crisis was poised to derail the economic recovery.
FIIs were net buyers of Rs3.47bn in the cash segment on Monday on a provisional basis, according to the NSE data. The local institutions were net sellers at Rs414.3mn on the same day. In the F&O segment, the foreign funds were net buyers of Rs18.14bn. On Friday, FIIs were net buyers of Rs8.96bn in the cash segment, as per SEBI data.
US blue chip stocks reversed solid gains to close in the red on Monday after Moody's downgraded Greece's debt rating, underscoring persistent worries over the risks emanating from the sovereign debt problems in the euro-zone.
The Dow Jones Industrial Average lost 20 points, or 0.2%, to 10,190.89 while the S&P 500 index lost 2 points, or 0.2%, to 1,089.63 and the Nasdaq Composite index ended little changed at 2,243.96.
The euro rose versus the dollar, continuing to recover after touching a four-year low of $1.188 last week. The dollar fell 0.1% against the yen.
US light crude oil for July delivery rose $1.18 to $74.96 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $7.60 to $1,222.60 an ounce.
Treasury prices fell, raising the yield on the 10-year note to 3.28% from 3.22% late on Friday.
Stocks gained in the morning after a report showed a big jump in industrial output in Europe, boosting the euro. But the advance lost steam in the early afternoon on news that Moody's cut its debt rating on Greece to "junk status."
Reaction to Moody's downgrade was mild as opposed to about six weeks ago when its rival Standard & Poor's had cut its rating on Greece's debt to junk. But, the fact is that Greece continues to struggle despite European leaders having made billions in loans available to the nation.
US stocks managed to recover at the end of last week and through early Monday afternoon on the back of improving corporate earnings and signs that the world's largest economy is recovering.
Volatility has not subsided a great deal due to light trading volume and lingering jitters about potential fallout from Europe's credit crisis. Also, the market has tended to switch direction of late in the last hour or 30 minutes of each session.
Composite trading in New York Stock Exchange-listed companies recently hit 4.6 billion shares. Advancers still outnumbered decliners by nearly two to one.
Trading volume has tapered off due to some traders taking summer vacations, while some long-term investors have backed away, awaiting day-to-day volatility to ease.
What we have seen over the last couple of months is a short-term correction, not the start of a bear market. The market may remain volatile for a while but s long as the euro doesn't collapse the stock market could gradually keep advancing.
US President Barack Obama reportedly wants BP to set up a fund to pay for damages from the leaking oil well, two months after the initial explosion. Lawmakers want BP to make as much as $20 billion available. But the British company may not be able to comply, as it only had $7 billion in cash on hand at the end of the first quarter and is currently expected to pay out dividends on June 21.
BP is expected to have discussed the issue of dividends at its board meeting on Monday. Meanwhile, its stock price continues to plummet, losing 9.7% to $30.67 per share.
No major economic news was released in the US, but reports are due later in the week on housing, wholesale and consumer inflation and jobless claims.Data from the euro zone showed larger-than-expected improvements, with industrial production up 0.8% in April, gaining 9.5% from a year earlier, the sharpest year-on-year increase since records began in January 1990.
The data helped fuel the euro's gains against the dollar. The shared European currency remained on the mend, climbing 1.1% to stand at $1.2245.
The dollar index, which tracks the US currency against a basket of six others, fell nearly 1%.
European shares gained as sentiment towards the global economy improved.
Starting a fourth straight week of gains, the Stoxx Europe 600 index rose 1.2% to 252.54. The French CAC-40 index advanced 2% to 3,626.04, the German DAX index added 1.3% to 6,125.00. The UK's FTSE 100 index lagged among the three, up 0.7% to 5,202.13.
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