The Patni Computers promoters are likely to invite fresh bids for the stake sale. Kritika Saxena reports that the promoters are open to price of Rs 560 per share and have demanded non-compete fee from its bidders.
In the race for the Patni stake right now, are iGate, Carlyle and Fujitsu; with iGate emerging as the highest bidder so far.
Talks to sell a stake in the software services exporter have been going on for about two years, but Patni has failed to seal a deal due to valuation gaps with potential buyers.
The founding Patni brothers are looking to sell their 46% stake, while private equity firm General Atlantic plans to sell its roughly 17% holding.
Two sources with direct knowledge of the matter said on Friday that a deal hinges on whether all three founding brothers agree to terms of a deal to sell their stakes.
Patni, a mid-sized Indian IT services firm also listed in New York, provides technology outsourcing services to industries such as insurance, telecom, utilities and retail.
Monday, December 27, 2010
Nifty erases gains, tests 6K; telecom, metals, ADAG slip
the benchmark Nifty erased gains and touched the 6000 level in afternoon trade, led by sell-off in metal, telecom, Anil Dhirubhai Ambani Group, select power and financial companies' shares. Reliance Industries, L&T and ITC were also under pressure.
Downtrend in European markets and US index futures also weighed on markets; CAC and DAX fell over 1%. Dow Jones futures slipped 0.5%. Even China's Shanghai lost 1.9% in late trade.
However, buying in technology, healthcare and cement companies' shares along with ONGC, ICICI Bank, BHEL, Hero Honda and Bajaj Auto was supporting the markets and was trying to hold the Nifty around 6,000 level.
The 30-share BSE Sensex was trading at 20,046, down 27 points and the 50-share NSE Nifty fell 10.65 points at 6,001. The broader indices too wiped out their gains and turned flat.
Among largecaps, Reliance Communications was trading at Rs 136.70, down 3.66%; Sterlite Industries was at Rs 180.35, down 2.41%; Reliance Infrastructure was at Rs 797, down 2.18%; Bharti Airtel was at Rs 341.20, down 2.09%; Tata Steel was at Rs 663, down 1.54%; SAIL was at Rs 177.75, down 3.81% and Reliance Power was at Rs 152.30, down 2.06%.
However, Dr Reddy's Labs, Sun Pharma, Ambuja Cements, Tata Power, Cipla, Wipro, BHEL and Hero Honda were down 0.5-1%.
New Listing - Ravi Kumar Distilleries was trading at Rs 85.10, up 32.97% over issue price of Rs 64 a share.
In midcap space, BF Utilities surged 11%. ARSS Infra, Gammon Infra, Praj Industries and Essar Shipping gained 5-6.6% while Money Matters, India Infoline, Patel Engg, Shriram City and Berger Paints fell 3-5%.
In smallcap space, Venkys, Shriram EPC, Transport Corp, Gokul Refoils and Kanani Industries went up 10-14% while Midfield Industries, EIH Associated Hotel, SVC Resources, Sujana Towers and lost 5% each.
Friday, December 24, 2010
No smooth ride for tyre cos despite rubber duty cut
Indian tyre makers see little respite for margins despite the government's move to cut import duty on natural rubber - already in short supply - as raw material prices continue to be robust, industry watchers said.
Natural rubber prices makes up about half the cost of a tyre and the industry has been grappling with falling profit margins as rubber prices soar due to a global supply crunch.
India on Thursday cut import duty on natural rubber to 7.5% from 20% for shipments up to 40,000 tonnes until March 31.
The duty will be reinstated at whichever is the lower of 20% or Rs 20 per kg after that date. That would mean an import duty of 9%-10% from April, at prevailing rates.
"Profit margins will continue to be under pressure as rubber prices have gone up beyond Rs 200 rupees/per kg. Demand is higher than supply so chances of rubber prices really coming down are low," said Vaishali Jajoo, analyst at Angel Broking.
"The gap between international and domestic rubber prices has reduced so I don't know how much it would benefit the tyre companies. I don't think there will be much of a reduction in costs," Jajoo added.
Nevertheless, tyre firms' shares rose on the news. Number one player MRF rose as much as 4.5%, rival Apollo Tyres was up 5% and JK Tyre & Industries also jumped nearly 5% on Friday.
However, shares of all three firms have underperformed the benchmark index over the past three months, Thomsonreuters data showed.
"The government has addressed the long-standing request of the industry. This should have happened long back when prices in domestic market were higher than international market," said Rajiv Budhraja, director-general of New-Delhi based Automotive Tyre Manufacturers' Association.
For several years now, the industry had sought a cut in the 20 percent customs duty on natural rubber, which is double that for tyre imports, which has hurt local players.
"Domestic prices will remain stable despite duty cut as they are lower than international market," George Valy, president of The Indian Rubber Dealers Federation, told Reuters.
"Indian tyre makers will start imports once international prices fall below domestic level. Then they will benefit from lower duty," Valy said.
On Friday, the spot price of the most traded RSS-4 rubber (ribbed smoked sheet) was Rs 20,750 (USD 460) per 100 kgs in India as against Rs 22,282 (USD 494) in Bangkok.
"We had initially approached the government for relief on this when domestic prices were significantly higher. At this point of time I'm not sure whether the gap is still there and therefore if imports would make sense," said Sunam Sarkar, Chief Financial Officer, Apollo Tyres, India's second largest tyre maker.
"The move will definitely boost sentiment," said AS Mehta, director-marketing at JK Tyre.
However, "the larger issue is, availability in the country today is a constraint. This would certainly help in bringing in more rubber," Sarkar said.
India is likely to produce around 850,000 tonnes of natural rubber in 2010/11, down 4.8% from an earlier estimate, after heavy unseasonal rains affected tapping.
The country consumes nearly 1 million tonnes of rubber annually, split roughly halfway between the tyre and non-tyre industries.
"But 40,000 tonnes of imports uptil March is too little and would be consumed by the industry within a month," Mehta said.
Natural rubber prices makes up about half the cost of a tyre and the industry has been grappling with falling profit margins as rubber prices soar due to a global supply crunch.
India on Thursday cut import duty on natural rubber to 7.5% from 20% for shipments up to 40,000 tonnes until March 31.
The duty will be reinstated at whichever is the lower of 20% or Rs 20 per kg after that date. That would mean an import duty of 9%-10% from April, at prevailing rates.
"Profit margins will continue to be under pressure as rubber prices have gone up beyond Rs 200 rupees/per kg. Demand is higher than supply so chances of rubber prices really coming down are low," said Vaishali Jajoo, analyst at Angel Broking.
"The gap between international and domestic rubber prices has reduced so I don't know how much it would benefit the tyre companies. I don't think there will be much of a reduction in costs," Jajoo added.
Nevertheless, tyre firms' shares rose on the news. Number one player MRF rose as much as 4.5%, rival Apollo Tyres was up 5% and JK Tyre & Industries also jumped nearly 5% on Friday.
However, shares of all three firms have underperformed the benchmark index over the past three months, Thomsonreuters data showed.
"The government has addressed the long-standing request of the industry. This should have happened long back when prices in domestic market were higher than international market," said Rajiv Budhraja, director-general of New-Delhi based Automotive Tyre Manufacturers' Association.
For several years now, the industry had sought a cut in the 20 percent customs duty on natural rubber, which is double that for tyre imports, which has hurt local players.
"Domestic prices will remain stable despite duty cut as they are lower than international market," George Valy, president of The Indian Rubber Dealers Federation, told Reuters.
"Indian tyre makers will start imports once international prices fall below domestic level. Then they will benefit from lower duty," Valy said.
On Friday, the spot price of the most traded RSS-4 rubber (ribbed smoked sheet) was Rs 20,750 (USD 460) per 100 kgs in India as against Rs 22,282 (USD 494) in Bangkok.
"We had initially approached the government for relief on this when domestic prices were significantly higher. At this point of time I'm not sure whether the gap is still there and therefore if imports would make sense," said Sunam Sarkar, Chief Financial Officer, Apollo Tyres, India's second largest tyre maker.
"The move will definitely boost sentiment," said AS Mehta, director-marketing at JK Tyre.
However, "the larger issue is, availability in the country today is a constraint. This would certainly help in bringing in more rubber," Sarkar said.
India is likely to produce around 850,000 tonnes of natural rubber in 2010/11, down 4.8% from an earlier estimate, after heavy unseasonal rains affected tapping.
The country consumes nearly 1 million tonnes of rubber annually, split roughly halfway between the tyre and non-tyre industries.
"But 40,000 tonnes of imports uptil March is too little and would be consumed by the industry within a month," Mehta said.
No output signal from OPEC as oil heads to $100
OPEC gave no signals on Friday it would supply the world with more crude, despite oil prices trading near a two-year high and with most analysts predicting a rally above USD 100 per barrel.
OPEC's most influential oil minister, Saudi Arabia's Ali al-Naimi, said he was still happy with an oil price of USD 70-80 per barrel.
US crude closed at over USD 91 per barrel on Thursday and Brent traded at around USD 94 per barrel.
He was speaking on his arrival in Cairo for a meeting of Arab oil exporting countries.
Arab OPEC ministers are meeting in the Egyptian capital this weekend where they may discuss oil production and price, but no formal decision on output will take place. OPEC's next scheduled meeting is for June.
Libya's top oil official, Shokri Ghanem, said his country was producing 1.5 million bpd at the moment while having capacity of 2 million.
"Our capacity is close to 2 million (barrels a day) but you know we are producing around 1.5 million," Ghanem said.
"Production is according with our international commitment, in particular our OPEC commitment, and in the meanwhile we don't want to rock the boat of the market."
OPEC's most influential oil minister, Saudi Arabia's Ali al-Naimi, said he was still happy with an oil price of USD 70-80 per barrel.
US crude closed at over USD 91 per barrel on Thursday and Brent traded at around USD 94 per barrel.
He was speaking on his arrival in Cairo for a meeting of Arab oil exporting countries.
Arab OPEC ministers are meeting in the Egyptian capital this weekend where they may discuss oil production and price, but no formal decision on output will take place. OPEC's next scheduled meeting is for June.
Libya's top oil official, Shokri Ghanem, said his country was producing 1.5 million bpd at the moment while having capacity of 2 million.
"Our capacity is close to 2 million (barrels a day) but you know we are producing around 1.5 million," Ghanem said.
"Production is according with our international commitment, in particular our OPEC commitment, and in the meanwhile we don't want to rock the boat of the market."
Festive cheer: Is mkt poised for a breakout?
Dalal Street finally saw a hint of a Santa Claus rally in the last hour of trade today. After a sombre start the markets picked up steam and finally closed well in the green. The Nifty clawed its way back above the 6,000 mark and closed with a 31-point gain at 6,011. The Sensex raced 90 points ahead to close at 20,073.
Globally, stocks have risen to near two-year peaks as strong economic figures from the US has encouraged year-end buying. The rally in major European and US indices has given investors the best December gains in more than a decade.
Experts are seeing signs of considerable improvement in markets. Jim O Neill, chairman of Goldman Sachs Asset Management said that he is seeing signs of improvement in the US. “People cannot see the big picture for the fear of days all way about Lehman collapse somebody see repeatedly anytime there is little bit of bad news whether it can be Ireland or anywhere, people think we go again and people get scared really quickly and that sentiment persists if you look at real evidences especially if you realise to the US there is a whole host of things showing signs of improvement most importantly the weekly jobless claims which moved down so i think lot of encouraging things going on,” he said. He however added that the EU’s monetary leadership situation is a cause of concern for the markets.
Vikas Khemani of Edelweiss Securities however said the economic macros are probably going to have some amount of overhang on the markets going forward. “My sense is that the continuing high inflation will put pressure on the RBI to continue to increase interest rates and that will probably put pressure for the equities,” he believed.
He does not expect markets to move up significantly from here till the Union Budget. “I do not see a situation where there is a big fund inflow, which can come from the international investors,” he stated.
Globally, stocks have risen to near two-year peaks as strong economic figures from the US has encouraged year-end buying. The rally in major European and US indices has given investors the best December gains in more than a decade.
Experts are seeing signs of considerable improvement in markets. Jim O Neill, chairman of Goldman Sachs Asset Management said that he is seeing signs of improvement in the US. “People cannot see the big picture for the fear of days all way about Lehman collapse somebody see repeatedly anytime there is little bit of bad news whether it can be Ireland or anywhere, people think we go again and people get scared really quickly and that sentiment persists if you look at real evidences especially if you realise to the US there is a whole host of things showing signs of improvement most importantly the weekly jobless claims which moved down so i think lot of encouraging things going on,” he said. He however added that the EU’s monetary leadership situation is a cause of concern for the markets.
Vikas Khemani of Edelweiss Securities however said the economic macros are probably going to have some amount of overhang on the markets going forward. “My sense is that the continuing high inflation will put pressure on the RBI to continue to increase interest rates and that will probably put pressure for the equities,” he believed.
He does not expect markets to move up significantly from here till the Union Budget. “I do not see a situation where there is a big fund inflow, which can come from the international investors,” he stated.
Wednesday, December 22, 2010
Upside risk to inflation remains, says RBI
India's headline inflation is not easing as fast as the central bank would like it to and upside risk remains, said its deputy governor Subir Gokarn. However, he said the downside risk to growth is abating. “We are watching for signs of instability in overnight rates,” he informed adding, “There is no instability in the yield curve so far and call rates are clearly above rate corridor at the moment.”
Commenting on RBI’s recent SLR cut, Gokarn said the move will help reduce capitive demand for bonds. “Would like government to draw down on cash balances,” he stated. However, he also acknowledged that it will be difficult for the government to do ad hoc spending. Gokarn said government spending will be key to liquidity easing.
According to him the recent spike in onion prices due to demand-supply mismatch should be short-lived. “The onion price surge may not be factored in inflation calculation,” he divulged.
On the banking side, he said, banks have started raising deposit rates significantly. “There is mismatch between deposit and credit growth. This gap is widening.” He expects advance outgo to come into the system.
Gokarn also informed that the central bank will issue final norms on credit default swap (CDS) in the near future. “Currently, banks are not structured to meet long-term infra finance.”
Nifty in narrow range; Bharti, Sterlite, RCom, SBI gain
The 50-share NSE Nifty was trading in a narrow range of 6001-6023 since beginning of trade today and also trying to stay in a positive terrain amid that volatility. Telecom, metal, power, select healthcare and auto companies' shares were quite supportive; ONGC, SBI, Infosys, HDFC Bank, DLF and HDFC were other gainers.
Falguni Nayar, Kotak Securities said she was bullish on the entire commodity space given that they were hitting all time highs and that she continues to be positive about the market for the medium-term.
On other side of trade, the sell-off continued in TCS, Wipro, Reliance Industries, Hero Honda, Cipla, ICICI Bank, Maruti, Reliance Infrastructure and BHEL, which limited gains.
The Sensex added 47 points to 20,107 today and the Nifty was trading at 6,012, with a gain of 11.55 points. The BSE Midcap Index was up 0.5% and Smallcap up 0.7%.
Among largecaps, Bharti Airtel was trading at Rs 340.35, up 2.25%; Sterlite Industries was at Rs 180.65, up 2.21%; BPCL was at Rs 697, up 1.99%; Ranbaxy Labs was at Rs 568.90, up 1.75%; Sesa Goa was at Rs 306.40, up 1.74%; Reliance Communications was at Rs 128.95, up 1.38%; Jindal Steel was at Rs 694, up 1.30% and SBI was at Rs 2,771.90, up 1.03%.
However, Hero Honda was trading at Rs 1,943.55, down 1.47%; Wipro was at Rs 478.95, down 1.35%; Cipla was at Rs 363.10, down 0.95%; HCL Tech was at Rs 448.75, down 0.92%; Maruti Suzuki was at Rs 1,411.10, down 0.86%; Reliance Infrastructure was at Rs 801.90, down 0.82% and TCS was at Rs 1,151, down 0.72%.
In midcap space, Ispat Industries was trading at Rs 22.50, up 6.13% while its open offer price decided by JSW Steel at Rs 20.54 a share. Nava Bharat Ventures, Birla Corp, MVL and Essar Shipping jumped 5-6%.
However, Money Matters was locked at 5% lower circuit; it crashed more than 75% in one month - especially after bribe-for-loan scam. Sintex India, Sterling International, Gujarat Industries Power and Jyothy Labs fell 2.5-3.8%.
In smallcap space, Suashish Diamond, Accentia Tech, Tanla Solutions, Jindal PolyFilm and Simplex Project gained 7-9%. However, Aditya Birla, Midfield Industries, SVC Resources, Urja Global and Spectacle Info lost 5-6.5%.
Breadth was remained in favour of advances; about 1712 shares advanced while 1023 shares declined on Bombay Stock Exchange. Nearly 732 shares were unchanged.
Tuesday, December 21, 2010
RIL to form JV with Russia's SIBUR to set up rubber plant
The trade relations between India and Russia were given a boost during the official visit of Russian President Dmitry Medvedev to India, as the country’s largest private sector company Reliance Industries Limited (RIL) and the leading Russian petrochemical company SIBUR today announced a joint venture for the production of butyl rubber in India.
As per a company press release, the joint venture facility will have an initial capacity of 100,000 tonne of butyl rubber at RIL’s integrated refining-cum-petrochemical site in Jamnagar, India and is expected to be commissioned by 2013. Estimated investment in the project will be USD 450 million. The plant will initially produce regular butyl rubber and is expected to manufacture other types of butyl rubber specialities in the future.
SIBUR will provide its proprietary technology for butyl rubber polymerization and finishing, while RIL will supply monomers and provide the JV with world-class infrastructure and utilities. RIL will have a majority stake in the joint venture.
Commenting on this development, N. R. Meswani, Executive Director, RIL, said “This is a significant step towards Reliance’s commitment to service India’s growing automotive sector by bringing in complex technologies, available with only a very few companies globally. The setting up of domestic manufacturing of butyl rubber will fulfil a long standing demand of the Indian tyre and rubber industry and this investment is part of Reliance’s vision of emerging as a significant global payer in the synthetic rubber business.”
"We are satisfied with the dynamics of the creation of the joint venture and hope to begin construction soon," said SIBUR's President Dmitry Konov commenting on the joint venture. "SIBUR has unique technologies for the production of synthetic rubber, which in partnership with Reliance will cater the growing needs of the Indian tyre industry with high-quality raw material."
Ispat Ind open offer at Rs 20.54/sh from Feb 12 to Mar 3
The Ispat Industries open offer will start on February 12 and closes on March 3. The price of the open offer is pegged at Rs 20.54 per share.
JSW Steel, India’s third largest the steel producer plans to takeover Ispat Industries and buy 108 crore shares via preferential allotment at Rs 19.85 per share.
While Ispat Industries' founder will still hold 26% stake in the company. The new entity would be renamed as JSW Ispat Steel post the stake sale.
JSW Steel, India’s third largest the steel producer plans to takeover Ispat Industries and buy 108 crore shares via preferential allotment at Rs 19.85 per share.
While Ispat Industries' founder will still hold 26% stake in the company. The new entity would be renamed as JSW Ispat Steel post the stake sale.
Sensex consolidates; TCS, Wipro, Hero Honda, ICICI Bank dip
Sensex was lacklustre in trade today, especially after seeing close above 20000 level in yesterday's trade. It was moving in a narrow range around 20,100 level. Metal, power and telecom companies' shares along with ONGC, SBI, Tata Motors, L&T, Infosys, Ranbaxy Labs, M&M, DLF and HUL were supporting the markets.
On the other side, selling in TCS, Wipro, Reliance Industries, ICICI Bank, Hero Honda, Cipla, Maruti and BHEL capped the gains.
Ambareesh Baliga of Karvy Stock Broking said he expects markets to be rangebound for a while. “I think crossing 6050 will be difficult for the market,” he felt.
He advised investors to start booking profits at the current levels. “It is prudent to book out at this point of time,” he said adding, “We could see levels of closer to 5,800-5,825 over the next two weeks.”
The 30-share BSE Sensex was trading at 20,101, with gain of 41 points and the 50-share NSE Nifty rose 9.5 poitns to 6,010. The broader indices were outperforming benchmarks; the BSE Midcap Index was up 0.5% and Smallcap up 0.7%.
Among frontliners, Sterlite Industries, Reliance Communications, Jindal Steel, Bharti Airtel, Hindalco, BPCL, Ranbaxy Labs and Sesa Goa went up 1-2.7%.
However, Hero Honda, Wipro, Maruti Suzuki, TCS, Cipla and HCL Tech declined 0.9-2%.
M&M Financial, MOIL, SBI, Tata Steel, City Union Bank, IDFC and Dr Reddy’s Labs were the most active shares on exchanges.
In midcap space, MVL, KGN Industries, Infotech Enterprise, Ballarpur Industries and Nava Bharat Ventures were up 4-5% while Money Matters, Sintex India, Hathway Cable, Sterling International and M&M Financial lost 2-5%.
In smallcap space, Suashish Diamond, Tanla Solutions, Rollatainers, Accentia Techno and Simplex Project jumped 7-8.7% while Midfield Industries, SVC Resources, Urja Global, Spectacle Info and Bheema Cements fell 5%.
Breadth was positive; about 1694 shares advanced while 856 shares declined on the Bombay Stock Exchange. Nearly 917 shares were unchanged.
Nifty ends above 6K on good global cues; banks, metals lead
The benchmark Nifty closed above the 6,000 - a psychologically important level - for the first time in last 12 sessions, led by financial, metal, realty and select infrastructure companies' shares. The Sensex has seen 20,000 mark today at close for first time in last 24 sessions.
Heavyweight Reliance Industries was the leader today along with those sectors; rose 1.55% as the company started drilling second well in KG-D9, Hardy Oil said. Results of KG-D9 well drilling will be seen in January-March.
Positive global cues played a key role in today's uptrend. Asian markets were strong in trade; Shanghai, Hang Seng, Nikkei and Jakarta rallied 1.5-2%. Kospi was up 0.8%, Taiwan up 0.67% and Straits Times went up 0.22%. European markets were also trading 0.7% higher, at the time of closing of Indian equities.
Gautam Shah, CMT and VP of Financial Services at JM Financial feels the markets are on track to test new highs and expects the markets to rally by 10-15% in early January 2011. "The November to January period has been traditionally good for the markets so expect a clean run in January," he said. Shah also sees a 10-15% upside in IT stocks from the current levels.
However, upside was capped to some extent due to selling in Sun Pharma, Infosys, TCS, NTPC, Bharti Airtel, ONGC, HUL, Dr Reddy's Labs, Hero Honda, BPCL along with cement companies' shares.
The 30-share BSE Sensex closed at 20060, up 171 points and the 50-share NSE Nifty rose 53.6 points to 6,000.65.
Onion prices double, government bans exports
Onion prices in India have more than doubled in the past week due to a shortage caused by unusually heavy rain in growing areas, adding to the risk of voter anger about the high cost of food.
Discontent about food price inflation is another headache for a coalition government struggling with a slew of corruption allegations and an emboldened opposition.
The agriculture ministry on Monday banned exports of the staple food until Jan. 15, and will import onions from neighbouring Pakistan as prices jumped to 80 Rs (USD 1.77) per kg from 35 Rs per kg last week, local media reported.
"The situation will be normal in two to three weeks. Onion prices rose because of rains in Nasik and other onion growing areas," Agriculture Minister Sharad Pawar told reporters on Tuesday. "The ban on onion exports should help reduce the prices."
Onions are base ingredients for almost all Indian dishes. Soaring onion prices have helped dislodge Indian state governments in the past, and rising food costs often spark street protests.
Food price inflation has retreated over the past three months, but at a high 9.5% is a worry for the ruling Congress party ahead of state elections next year.
On Monday, Prime Minister Manmohan Singh told his party that inflation "remains a cause for serious concern in our country".
Officials were considering opening special outlets to sell onions at wholesale rates as the government looks for ways to lower prices, the Press Trust of India reported on Monday.
Nifty northbound; Sun Pharma, NTPC, Hero Honda slip
At 14:21 hours IST - buying in financial, metal, Anil Dhirubhai Ambani Group (ADAG) group companies' shares along with Reliance Industries, Wipro, DLF and BHEL was helping the benchmark Nifty to trade in positive terrain. The index was facing resistance at 6000 level while the Sensex managed to hold 20,000 level.
However, indices were getting some selling pressure at higher levels due to fall in cement and FMCG companies' shares along with NTPC, Bharti, TCS, Infosys, Sun Pharma, Dr Reddy's Labs, ONGC and L&T.
The 30-share BSE Sensex was trading at 20034, up 145 points and the 50-share NSE Nifty was at 5992, up 45 points. The BSE Midcap Index was up 0.6% and Smallcap up 0.85%.
Among frontliners, Sterlite Industries, Sesa Go and Hindalco jumped 4% each. ICICI Bank, SBI and Axis Bank were up 2-3.8%. However, Sun Pharma cracked 4%. Dr Reddy's Labs, BPCL, Hero Honda, ACC, NTPC, Bharti Airtel, Infosys and TCS were down 0.6-1.4%.
In midcap space, ARSS Infra, Akzo Nobel, India Infoline, Wockhardt and MVL gained 5-7.5% while Ispat Industries lost 14% (JSW Steel will be promoter of company and will announce open offer for company tomorrow). AIA Engineering, Money Matters, Sintex India and Unichem Labs slipped 4.5-5%.
In smallcap space, Shrenuj & Company, Parenteral Drug, Bombay Burmah, Jayshree Tea and Arshiya Intl rallied 7.4-10% while Centrum Finance, Midfield Industries, SVC Resources, Urja Global and Oscar Invest lost 5% each.
Mahindra Satyam shot up 8% on back of huge volumes as it said would seek listing again on NYSE (New York Stock Exchange), reports CNBC-TV18 quoting DJ.
Gap in advance:decline reduced marginally; about 874 shares advanced while 405 shares declined on National Stock Exchange.
Monday, December 20, 2010
Nifty touches 6K; financials, metals, realty up
At 11:09 hours IST - the benchmark Nifty has touched the 6000 - psychologically important level - for the first time in nine sessions since December 8. The support was led by financial, metal, realty, auto (barring Hero Honda), capital goods, select power and healthcare companies' shares. Leading frontliners like Reliance Industries and Wipro were also on buyers' radar.
Gautam Shah, CMT and VP of Financial Services at JM Financial feels the markets are on track to test new highs and expects the markets to rally by 10-15% in early January 2011. "The November to January period has been traditionally good for the markets so expect a clean run in January," he said. Shah also sees a 10-15% upside in IT stocks from the current levels.
Asian markets were quite supportive today, which extended gains. Shanghai, Hang Seng and Nikkei jumped over 1%. Straits Times, Kospi and Taiwan gained 0.35-0.9%.
On the flip side, Sun Pharma and Hero Honda lost 2-2.5%. TCS, BPCL, NTPC, Infosys, ACC, Ambuja Cements and Suzlon were other losers.
The 30-share BSE Sensex rallied 195 points to 20,084 and the 50-share NSE Nifty rose 57 points to 6,004.
Lanco Infra went up 2% as the company received Rs 4,100 crore EPC contract from Moser-Baer arm.
CBI examining SC order directing FIR against telcos
The Central Bureau of Investigation (CBI) is learnt to be examining the Supreme Court order directing it to file an FIR against telecom companies from 2001 to 2006. CNBC-TV18’s Siddharth Zarabi reports.
This is going to be a major development if it fructifies. We learn from our sources that last week the Supreme Court has directed the CBI to file FIRs against all telecom providers from the period 2001 onwards till 2006. Remember, all the licenses issues after 2008 are already subject to multiple probes including by the CBI and the Enforcement Directorate (ED) among other.
This order of the Supreme Court is being examined by the CBI. We have confirmed with CBI officials that they are currently studying this order—examining it legally in-house and if need be, they will also consult with the law ministry.
Clearly, this is going to be a huge step if it is taken. It will have massive ramifications for the telecom sector for the investor sentiment overall for also possible foreign investment future plans of all the domestic operators because clearly it extends the entire noise about telecom licenses—the allegations of corruption, the alleged award of licenses in 2008 without due process being followed to 2001. Remember, 2001 was the time when India’s telecom growth started.
In 2001, we are still in the low millions, possibly a number of 13 million to 14 million subscribers put together after six to seven years of licenses having being awarded in the mid-90s. From 2001 we saw massive rounds of expansion in the telecom industry. We saw companies like Bharti becoming national operators, we saw there advent of wireless in local loop limited mobility, which was ultimately through a government decision of the National Democratic Alliance (NDA), converted into a full-fledged UASL license. We saw decisions to reduce the license fee and we also saw parallel—a fast up take in growth. We also saw something called the calling party place principle coming fully into effect due to previous decisions.
Clearly, the 2001 to 2006 period was the sunny phase of India’s telecom growth story and from 2006 onwards the bigger players became bigger. We had newer players come in but they clearly haven’t bitten into the market in that manner. But 2001 to 2006 was the big time for Indian telecom to say and therefore if FIRs are going to be registered, clearly, the sense that it will send out is possibly going to be negative.
Remember the FIRs for the 2008 scam are specific. They name certain companies. They talk about individual wrong doing. They also name DoT officials. There is a possibility of a charge sheet being filed against the then telecom minister A Raja along with his crucial and key aids. But to get a FIR against all telecom operators—and remember there are 14 of them in this country—would send out massive signals. We don’t know when CBI will finally take a call on doing this.
Reliance Industries plans to shut 200,000 bpd FCC
Reliance Industries plans to shut its fluid catalytic cracker (FCC) of about 200,000 barrels per day (bpd) at its older refinery at Jamnagar at the end of January for about a month, trade sources said on Monday.
Two sources said the shutdown of the FCC for maintenance was expected to begin in the last week of January while the third source said it would start "from end-Jan or early Feb".
All the sources said the maintenance shutdown of the FCC would last for about a month.
The first two sources also said the refiner would also shut a 100,000 bpd vacuum gas oil unit for about three to four weeks a few days into the shutdown of the FCC.
No immediate comment was available from Reliance.
Reliance's 660,000 bpd plant is situated next to its 580,000 bpd export focused refinery.
The FCC converts vacuum gas oil into light value-added products like liquefied petroleum gas, gasoline-blending components and diesel. A VGO hydrotreater removes sulphur from heavy feedstock to produce naphtha, jet fuel and liquefied petroleum gas.
The firm last month brought back online its 330,000 bpd crude unit at the old plant after a maintenance shutdown that lasted for about three weeks.
Bankers give informal nod to JSW's bid for Ispat
JSW Steel has made offer to Ispat corporate debt restructuring (CDR) lenders, sources say. IDBI Bank, ICICI Bank, IFCI were part of the meeting. Bankers have given informal approval to JSW Steel's bid for Ispat, sources inform. Sources further say, Ispat will have to issue fresh shares.
Meanwhile, Ispat Industries’ lenders have rejected waiver of outstanding preference shares dividend, sources inform. Outstanding dividend on preference shares amounts to Rs 700 crore. Ispat will use Rs 200-250 crore of proceeds to clear debt, sources add.
Earlier, sources indicated that JSW Steel has emerged as the top bidder to buy lenders' stake in debt-ridden Ispat Industries.
Nifty inches up towards 6K; ICICI Bank, RIL, SBI support
At 10:32 hours IST - the 50-share NSE Nifty was inching up towards 6000-mark again on the back of support from financial, metal, realty, capital goods, select power, pharma and auto companies' shares along with heavyweight Reliance Industries and Wipro. The Sensex started trading above 20,000 level.
However, upside was limited due to selling in Sun Pharma, TCS, Hero Honda, ONGC, Bharti Airtel, BPCL, Infosys, Reliance Communications, Bajaj Auto and ACC.
Breadth was in favour of advances today; about 952 shares advanced while 258 shares declined on National Stock Exchange. Broader indices were outperforming benchmarks; the BSE Midcap Index was up 0.8% and Smallcap up 0.95%.
The Sensex was trading at 20,058, up 169 points and the Nifty rose 48 points to 5,995.
Among frontliners, ICICI Bank was trading at Rs 1,132.05, up 2.97%; Hindalco was at Rs 229.25, up 2.53%; Maruti Suzuki was at Rs 1,450.25, up 2.53% (company will launch its 1st luxury car 'Kizashi' in India on January 28, reports CNBC-TV18 quoting sources); Sterlite Industries was at Rs 172.05, up 2.05%; Wipro was at Rs 486.50, up 1.78% and Axis Bank was at Rs 1,297.40, up 2.09%.
However, Hero Honda was trading at Rs 1,940.50, down 2.05%; Reliance Communications was at Rs 125.80, down 0.75%; TCS was at Rs 1,158.10, down 0.7%; Bharti Airtel was at Rs 333.40, down 0.51%; Bajaj Auto was at Rs 1,450.05, down 0.34%; Sun Pharma was at Rs 427, down 3.67%; BPCL was at Rs 681.85, down 1.38% and Suzlon Energy was at Rs 50.90, down 0.78%.
In midcap space, India Infoline jumped 7.46% ahead of board meet to consider buyback of shares. ARSS Infra, Wockhardt, MVL and KGN Industries were up 5-7% while Ispat Industries tumbled 15% as JSW Steel will become promoter of company soon, reports CNBC-TV18. Money Matters, Blue Dart, Opto Circuits and Shree Global fell 3-5%.
In smallcap space, Cambridge Solutions, Arshiya Intl, Oil Country, Pratibha Ind and Action Construction gained 5.6-10.5% while Midfield Ind, SVC Resources, Urja Global, Spectacle Info and Prabhav Indust slipped 5%.
Budget 2011-12 may expand service tax net: Sources
The government may have missed the deadline for implementation of Goods and Services Tax (GST), but the Finance Ministry may pave the way for its rollout in this budget. CNBC-TV18 learns the government is considering a proposal to integrate excise and service tax and is also looking at expanding the service tax net, reports Aakanksha Sethi.
The service tax net is likely to be expanded in the forthcoming budget, and sectors such as health and education may be considered for a service tax levy.
Currently, around 117 services are taxed at 10%, including the eight new services taxed in budget 2010-11. The service tax and excise duty integration will begin next fiscal year.
An integration of central excise and service tax that will lead to a single point of adminstration for the two taxes. The Central Board of Excise and Customs (CBEC) is also considering a lowering of the threshold for central excise from the current Rs 1.5 crore to Rs 10 lakhs.
The service tax net is likely to be expanded in the forthcoming budget, and sectors such as health and education may be considered for a service tax levy.
Currently, around 117 services are taxed at 10%, including the eight new services taxed in budget 2010-11. The service tax and excise duty integration will begin next fiscal year.
An integration of central excise and service tax that will lead to a single point of adminstration for the two taxes. The Central Board of Excise and Customs (CBEC) is also considering a lowering of the threshold for central excise from the current Rs 1.5 crore to Rs 10 lakhs.
Tata Chemicals to finance British Salt deal via debt
Tata Chemicals has acquired a UK-based company called British Salt for 93 million pounds.
Commenting on the deal, PK Ghose, Executive Director and CFO, Tata Chemicals says, “The entire deal of 93 million pounds is being debt financed, it is without any recourse to Tata Chemicals and it is at a very advantageous rate. It is actually financed on the assets of Brunner Mond UK and British Salt. What we have done is we have taken this opportunity of not only refinancing their existing debt at the lower rate and also done the acquisition financing together with one bank. So, the 150 million pound is the total debt we have taken, which includes 93 million pounds of acquisition finance and the balance as refinancing of existing debt.”
He further says, “British Salt has a turnover of 35 million pound this year estimated. On an average, I would say they would do an earnings before interest, taxes, depreciation and amortization (EBIDTA) margin consistently of 15%. So ,it would be a margin of about 15-17 million pounds roughly. On overall basis, after this with Brunner Mond UK as well as British Salt taken together, the net bottom-line would vary, in the beginning years the interest rates will be there, so it will vary between 21 and 28 million pounds.”
Commenting on the deal, PK Ghose, Executive Director and CFO, Tata Chemicals says, “The entire deal of 93 million pounds is being debt financed, it is without any recourse to Tata Chemicals and it is at a very advantageous rate. It is actually financed on the assets of Brunner Mond UK and British Salt. What we have done is we have taken this opportunity of not only refinancing their existing debt at the lower rate and also done the acquisition financing together with one bank. So, the 150 million pound is the total debt we have taken, which includes 93 million pounds of acquisition finance and the balance as refinancing of existing debt.”
He further says, “British Salt has a turnover of 35 million pound this year estimated. On an average, I would say they would do an earnings before interest, taxes, depreciation and amortization (EBIDTA) margin consistently of 15%. So ,it would be a margin of about 15-17 million pounds roughly. On overall basis, after this with Brunner Mond UK as well as British Salt taken together, the net bottom-line would vary, in the beginning years the interest rates will be there, so it will vary between 21 and 28 million pounds.”
Nifty recovers to end flat; Hero Honda surges 18%
The equity benchmarks recovered smartly in the second half of trade to end flat; the Sensex did touch 20,000 level, but could not hold the same. The indices started the trade on a weak note today following weak Asian cues and on the back of profit booking.
Auto, technology, cement and select metal companies' shares along with Cipla, HDFC, HUL and BHEL supported the markets to end in the green. Even Reliance Industries was quite supportive, but it wiped out its gains in late trade.
However, the sell-off was seen in financial, power and telecom companies' shares along with ONGC, Dr Reddy's Labs, Sterlite, ITC, DLF, L&T and Ranbaxy Labs, which limited gains to just 24 points on the Sensex.
Jonathan Garner, chief Asian and emerging market equity strategist at Morgan Stanley is more cautious on India. "Certainly for India, indeed for Asia, generally, we are more cautious than some of our competitors. Policy rates still have to rise in Asia and that includes India. The mid to late phase of the economic cycle and inflationary pressures, particularly, input side inflationary pressures from rising metals prices, rising agricultural and commodity prices, are starting to impact corporate margins," he said.
"We are somewhat concerned about the impact that may have on earnings growth and we are expecting lower earnings growth in the consensus," he added.
The 30-share BSE Sensex closed at 19,888.88, up just 24.03 points over previous closing value and the 50-share NSE Nifty fell 1.7 points to 5,947.05. Even the broader indices ended flat.
It was a steep rally for Hero Honda. The board has approved a new licensing pact with Honda. Hero group is going to acquire 26% stake from Honda. Ravi Sud of Hero Honda said that as a company – both companies got an excellent deal. He added that the definitive agreement would be signed in the next two-three weeks. Only a joint venture dissolution pact will be signed with Honda Motor, he said. The stock jumped 17.77% to 1,980.50 on National Stock Exchange.
Auto, technology, cement and select metal companies' shares along with Cipla, HDFC, HUL and BHEL supported the markets to end in the green. Even Reliance Industries was quite supportive, but it wiped out its gains in late trade.
However, the sell-off was seen in financial, power and telecom companies' shares along with ONGC, Dr Reddy's Labs, Sterlite, ITC, DLF, L&T and Ranbaxy Labs, which limited gains to just 24 points on the Sensex.
Jonathan Garner, chief Asian and emerging market equity strategist at Morgan Stanley is more cautious on India. "Certainly for India, indeed for Asia, generally, we are more cautious than some of our competitors. Policy rates still have to rise in Asia and that includes India. The mid to late phase of the economic cycle and inflationary pressures, particularly, input side inflationary pressures from rising metals prices, rising agricultural and commodity prices, are starting to impact corporate margins," he said.
"We are somewhat concerned about the impact that may have on earnings growth and we are expecting lower earnings growth in the consensus," he added.
The 30-share BSE Sensex closed at 19,888.88, up just 24.03 points over previous closing value and the 50-share NSE Nifty fell 1.7 points to 5,947.05. Even the broader indices ended flat.
It was a steep rally for Hero Honda. The board has approved a new licensing pact with Honda. Hero group is going to acquire 26% stake from Honda. Ravi Sud of Hero Honda said that as a company – both companies got an excellent deal. He added that the definitive agreement would be signed in the next two-three weeks. Only a joint venture dissolution pact will be signed with Honda Motor, he said. The stock jumped 17.77% to 1,980.50 on National Stock Exchange.
Friday, December 17, 2010
HDFC sees 22% loan growth in FY11
Housing Development Finance Corp, India's top mortgage lender, sees loan growth at 22% for the fiscal year ending March 2011, Managing Director Renu Sud Karnad told reporters on Thursday.
HDFC does not see lending rates going up in the immediate future, she said.
On Thursday, the Reserve Bank of India left interest rates on hold but warned inflation was still well above its comfort level,adding to the possibility that it will resume monetary tightening in January.
HDFC does not see lending rates going up in the immediate future, she said.
On Thursday, the Reserve Bank of India left interest rates on hold but warned inflation was still well above its comfort level,adding to the possibility that it will resume monetary tightening in January.
US jobless claims fall, housing data mixed
US jobless claims dipped for a second week, suggesting growth in the labor market, but data on home construction showed that sector remains stressed even as the economy shows signs of a pick up.
Initial claims fell 3,000 to a seasonally adjusted 420,000, the Labor Department said on Thursday, in line with forecasts. The four-week moving average of claims, considered a better measure of labor market trends, touched a fresh two-year low.
A separate report from the Commerce Department showed housing starts rose 3.9 percent to a seasonally adjusted annual rate of 555,000 units. However, permits for future home construction dropped to a 1-1/2 year low.
Economist welcomed the second week of decline in initial claims and said it bode well for employment growth, but still remained insufficient to bring down a 9.8 percent unemployment rate.
"This confirms the downtrend we have enjoyed in the past month, which is consistent with a six-figure monthly increase in payrolls going forward," said Richard DeKaser, an economist at The Panthenon Group in Boston.
US stock index futures held onto slight gains after the data. Sentiment was also supported by FedEx Corp, the second-largest package delivery company, which reported a quarterly profit and revenue that missed Wall Street estimates, but raised its full-year outlook on stronger-than-expected holiday volume and an improved economic forecast.
US Treasury prices maintained their slight gains, while the dollar fell against the euro and the yen.
October's housing starts were revised up to a 534,000-unit pace from the previously reported 1-1/2 year low rate of 519,000 units. Analysts polled by Reuters had expected November housing starts to rise to a 550,000-unit rate.
Despite last month's pick-up in residential construction, housing remains weak as high unemployment weighs on demand and homeowners' ability to hang on to their properties, lagging an acceleration in broader economic activity.
A survey on Wednesday showed sentiment among home builders was mired at record low levels this month, suggesting residential construction will again be a drag on gross domestic product growth in the fourth quarter.
New building permits fell 4.0 percent to a 530,000-unit pace last month, the lowest since April 2009, after a 0.9 percent increase in October. Permits were dragged down by a 23 percent plunge in the volatile multi-family segment. Permits for single-family homes rose 3 percent last month.
Analysts had expected overall building permits to rise to a 560,000-unit pace in November.
Groundbreaking last month was lifted by a 6.9 percent rise in single-family home construction. Starts for the multi-family segment, however, fell 9.1 percent. New home completions tumbled 14.1 percent to a record low 513,000 units in November.
Initial claims fell 3,000 to a seasonally adjusted 420,000, the Labor Department said on Thursday, in line with forecasts. The four-week moving average of claims, considered a better measure of labor market trends, touched a fresh two-year low.
A separate report from the Commerce Department showed housing starts rose 3.9 percent to a seasonally adjusted annual rate of 555,000 units. However, permits for future home construction dropped to a 1-1/2 year low.
Economist welcomed the second week of decline in initial claims and said it bode well for employment growth, but still remained insufficient to bring down a 9.8 percent unemployment rate.
"This confirms the downtrend we have enjoyed in the past month, which is consistent with a six-figure monthly increase in payrolls going forward," said Richard DeKaser, an economist at The Panthenon Group in Boston.
US stock index futures held onto slight gains after the data. Sentiment was also supported by FedEx Corp, the second-largest package delivery company, which reported a quarterly profit and revenue that missed Wall Street estimates, but raised its full-year outlook on stronger-than-expected holiday volume and an improved economic forecast.
US Treasury prices maintained their slight gains, while the dollar fell against the euro and the yen.
October's housing starts were revised up to a 534,000-unit pace from the previously reported 1-1/2 year low rate of 519,000 units. Analysts polled by Reuters had expected November housing starts to rise to a 550,000-unit rate.
Despite last month's pick-up in residential construction, housing remains weak as high unemployment weighs on demand and homeowners' ability to hang on to their properties, lagging an acceleration in broader economic activity.
A survey on Wednesday showed sentiment among home builders was mired at record low levels this month, suggesting residential construction will again be a drag on gross domestic product growth in the fourth quarter.
New building permits fell 4.0 percent to a 530,000-unit pace last month, the lowest since April 2009, after a 0.9 percent increase in October. Permits were dragged down by a 23 percent plunge in the volatile multi-family segment. Permits for single-family homes rose 3 percent last month.
Analysts had expected overall building permits to rise to a 560,000-unit pace in November.
Groundbreaking last month was lifted by a 6.9 percent rise in single-family home construction. Starts for the multi-family segment, however, fell 9.1 percent. New home completions tumbled 14.1 percent to a record low 513,000 units in November.
MOIL ends with 24% premium at Rs 464.20
MOIL (earlier known as Manganese Ore India) ended with 24% premium to its issue price on NSE. It closed at Rs 464.20 up 23.79% from its issue price of Rs 375 a share, after witnessing an intraday high of Rs 590 and low of Rs 456 on the National Stock Exchange. The share opened at Rs 565 on both exchanges.
On Bombay Stock Exchange, it has hit a high of Rs 591.05 and low of Rs 458.50, before ending at Rs 466.50. Traded volume on exchanges was 3.15 crore shares.
MOIL ends with 24% premium at Rs 464.20
MOIL is India’s largest manganese ore producer and has 50% share in domestic manganese production. It is one of the lowest cost producers of manganese ore in the world.
The company's initial public offering (IPO) received tremendous response from all investors' categories and was subscribed 56.43 times. The price band for the issue was fixed at Rs 340-375.
Reserved portion of QIBs was subscribed 49.16 times. Non-institutional and retail investors' portion subscribed 143.30 times and 32.86 times, respectively. Employees' portion was undersubscribed.
On Bombay Stock Exchange, it has hit a high of Rs 591.05 and low of Rs 458.50, before ending at Rs 466.50. Traded volume on exchanges was 3.15 crore shares.
MOIL ends with 24% premium at Rs 464.20
MOIL is India’s largest manganese ore producer and has 50% share in domestic manganese production. It is one of the lowest cost producers of manganese ore in the world.
The company's initial public offering (IPO) received tremendous response from all investors' categories and was subscribed 56.43 times. The price band for the issue was fixed at Rs 340-375.
Reserved portion of QIBs was subscribed 49.16 times. Non-institutional and retail investors' portion subscribed 143.30 times and 32.86 times, respectively. Employees' portion was undersubscribed.
Punjab & Sind Bank IPO subscribed 47.2 times
A state-owned Punjab & Sind Bank has closed today. The issue has subscribed 47.20 times so far, as per National Stock Exchange.
Reserved portion of QIBs subscribed 49.80 times. Non-institutional and retail investors' portion subscribed 22.91 times and 8.38 times, respectively. The Employee portion subscribed 1.22 times.
Reserved portion of QIBs subscribed 49.80 times. Non-institutional and retail investors' portion subscribed 22.91 times and 8.38 times, respectively. The Employee portion subscribed 1.22 times.
Subscription detail | |
| QIB | 49.80 |
| NII | 22.91 |
| RETAIL | 8.38 |
| EMPLOYEE | 1.22 |
| TOTAL | 29.77 |
The bank aims to raise around Rs 452-480 crore through IPO at a price band of Rs 113-120 per share.
SBI Capital Markets, Enam Securities and ICICI Securities are the managers to the issue.
Markets end strong: Is there room for more upside?
The Indian markets ended a choppy day and a truncated week on a positive note. The Nifty fell as low as 5,856 in intraday, but recovered with strength to end at 5,948 while the Sensex closed 217 points higher.
The broader markets had an equally choppy session with the midcap index ending eventually with gains of 0.4%
Anil Manghnani, Modern Shares & Stock Brokers says, there is still upside left in the market. “I remember the first time it was around 5,700, I expect the market would bounce, but you should sell the bounce as you would get one more test of 5,800-5,700. So, I think since we have done that, this time around we might be on a better footing because what might have happened this time is the fear has got a lot worse. The fear will keep a lot of people out which will continue to pull the market up. I know that sounds odd. But I think what might have happened last time we bounced to 6,000, a lot of people might have bought and then correspondently when you fail, they would have sold again. So, it is a case of once beaten twice shy, you wouldn’t want to come back at 5,900-6,000 levels thinking if I buy again and again it falls to 5,700, I will lose out. So, I think that fear psychosis might help this market,” he explains.
Manghnani further says, “I think maybe not that many shorts in the system. But, yes, shorts have been built up because even yesterday I think for a brief second or few minutes, the Nifty did go into a discount. The premium has been quite shallow over the last couple of days. So, some sort of shorting also will help this market, which has been because of overly long positions over the last month. So, I think this time around moving towards 6,000 might be slightly different from the last time we did so, about two weeks back. So, I would hold my longs, I still feel there is some upside left.”
Sajiv Dhawan, JV Capital Services says, the Nifty will be rangebound over the next couple of weeks. According to him, trading activity will pick up again in the first few weeks of January.
Dhawan says, “The sentiment, I feel, is that things for India still look very positive. If you are a medium-term investor, which means one to two years plus, you are going to look at India very seriously. You are going to buy into that growth story. The December month is generally a holiday period for a lot of investors and a lot of institutions. You might see the Nifty relatively rangebound over the next couple of weeks. There are no more domestic triggers. You have the RBI policy. Investors will look forward to corporate results and based on the advance tax figures, they should be fine.”
Dhawan further says, “I will say that in the first few weeks of January that is probably when the trading activity will pick up again. If you get a sudden gush of inflows from foreign institutional investors (FIIs), even if it if few hundred dollars a day or for few days, confidence will come back and investors will see the 6,200-6,300 sort of levels taken out. But the key for that will be the liquidity flows, valuations are not cheap. The benefit of what you have seen in the Sebi action over the last few weeks will be back. The Nifty stocks, the Sensex stocks which will lead this rally much higher. Midcaps will take a back seat over the next few weeks and it would be the stocks like Tata Motors, TCS, Mahindra across the board anywhere where you will see the serious money still continue to flow despite the higher prices and the higher valuations.”
However, Amit Dalal, Executive Director, Tata Investment Corporation is little cautious. He says, “Two-three big negatives, the market had to contend with the last three weeks, one is of course the political news has been completely overshadowing every event that has come our way. The second is huge shortage of funds which we are seeing in the banking system and the increase in the cost of money. I think that is something that the market I don’t think has yet factored in.”
Dalal further says, “The other perhaps bad news has been is that real estate sector, which had given some hope in the second quarter, has gone back to the shadows which it was reeling under for the last one and one and a half years. So, these three factors I think in terms of political news that has now taken into pricing. But where the cost of money is concerned and the big question over here is why the deposit growth is so low, I think that question needs reconciliation in a far greater manner that what has been yet discussed.”
The broader markets had an equally choppy session with the midcap index ending eventually with gains of 0.4%
Anil Manghnani, Modern Shares & Stock Brokers says, there is still upside left in the market. “I remember the first time it was around 5,700, I expect the market would bounce, but you should sell the bounce as you would get one more test of 5,800-5,700. So, I think since we have done that, this time around we might be on a better footing because what might have happened this time is the fear has got a lot worse. The fear will keep a lot of people out which will continue to pull the market up. I know that sounds odd. But I think what might have happened last time we bounced to 6,000, a lot of people might have bought and then correspondently when you fail, they would have sold again. So, it is a case of once beaten twice shy, you wouldn’t want to come back at 5,900-6,000 levels thinking if I buy again and again it falls to 5,700, I will lose out. So, I think that fear psychosis might help this market,” he explains.
Manghnani further says, “I think maybe not that many shorts in the system. But, yes, shorts have been built up because even yesterday I think for a brief second or few minutes, the Nifty did go into a discount. The premium has been quite shallow over the last couple of days. So, some sort of shorting also will help this market, which has been because of overly long positions over the last month. So, I think this time around moving towards 6,000 might be slightly different from the last time we did so, about two weeks back. So, I would hold my longs, I still feel there is some upside left.”
Sajiv Dhawan, JV Capital Services says, the Nifty will be rangebound over the next couple of weeks. According to him, trading activity will pick up again in the first few weeks of January.
Dhawan says, “The sentiment, I feel, is that things for India still look very positive. If you are a medium-term investor, which means one to two years plus, you are going to look at India very seriously. You are going to buy into that growth story. The December month is generally a holiday period for a lot of investors and a lot of institutions. You might see the Nifty relatively rangebound over the next couple of weeks. There are no more domestic triggers. You have the RBI policy. Investors will look forward to corporate results and based on the advance tax figures, they should be fine.”
Dhawan further says, “I will say that in the first few weeks of January that is probably when the trading activity will pick up again. If you get a sudden gush of inflows from foreign institutional investors (FIIs), even if it if few hundred dollars a day or for few days, confidence will come back and investors will see the 6,200-6,300 sort of levels taken out. But the key for that will be the liquidity flows, valuations are not cheap. The benefit of what you have seen in the Sebi action over the last few weeks will be back. The Nifty stocks, the Sensex stocks which will lead this rally much higher. Midcaps will take a back seat over the next few weeks and it would be the stocks like Tata Motors, TCS, Mahindra across the board anywhere where you will see the serious money still continue to flow despite the higher prices and the higher valuations.”
However, Amit Dalal, Executive Director, Tata Investment Corporation is little cautious. He says, “Two-three big negatives, the market had to contend with the last three weeks, one is of course the political news has been completely overshadowing every event that has come our way. The second is huge shortage of funds which we are seeing in the banking system and the increase in the cost of money. I think that is something that the market I don’t think has yet factored in.”
Dalal further says, “The other perhaps bad news has been is that real estate sector, which had given some hope in the second quarter, has gone back to the shadows which it was reeling under for the last one and one and a half years. So, these three factors I think in terms of political news that has now taken into pricing. But where the cost of money is concerned and the big question over here is why the deposit growth is so low, I think that question needs reconciliation in a far greater manner that what has been yet discussed.”
Thursday, December 16, 2010
Bharti Airtel adds 3.1 mn users in November
Bharti Airtel, India's top mobile operator, added 3.1 million subscribers in November, taking its total in the country to 149.4 million users, data from an industry body showed on Thursday.
No 3 mobile carrier Vodafone Essar, controlled by Vodafone, also added 3.1 million mobile subscribers in November to bring its total of 121.2 million, data from the Cellular Operators Association of India showed.
In November, sixth-ranked Idea Cellular added 2.8 million users to reach 78.8 million, the industry body said.
Telenor's India unit added 2.4 million users to bring its total to 16.2 million subscribers.
No 3 mobile carrier Vodafone Essar, controlled by Vodafone, also added 3.1 million mobile subscribers in November to bring its total of 121.2 million, data from the Cellular Operators Association of India showed.
In November, sixth-ranked Idea Cellular added 2.8 million users to reach 78.8 million, the industry body said.
Telenor's India unit added 2.4 million users to bring its total to 16.2 million subscribers.
Sensex ends with 200 pts gain; IT, telecom, realty shine
The Sensex ended trade on a strong note ahead of a long weekend. After a disastrous fall last week, the Nifty recovered nearly 200 points to end above 5950 this week. The rally was fueled by RBI's monetary policy, which come out today.
The Central Bank kept key policy rates unchanged, which helped boost sentiment of traders and investors in the markets.
The Sensex shut shop at 19845.28, up 197.51 points or 1.01% and the Nifty closed at 5948.75 up 56.45 points or 0.96%. About 1548 shares advanced, 1380 shares declined, and 534 shares remain unchanged.
BSE IT index was the top gainer in trade today with close to 3% gain. Telecom stocks too surged in trade today. Rate sensitive’s like realty, banks and metal stocks too surged in trade post credit policy. All BSE sectoral indices ended in green barring capital goods.
The broader markets however underperformed largecaps. BSE Midcap and Smallcap indices were up 0.33% and 0.54% respectively compared to Sensex gain of 1%.
Top gainers in the largecap: SAIL, Suzlon Energy, Hero Honda, TCS, Infosys, Wipro, Tata Steel and Kotak Mahindra Bank were up 3-6%.
Top losers on the Sensex: Mahindra and Mahindra, Tata Power, HUL, Maruti Suzuki, Bajaj Auto and Sesa Goa were down 1-3%.
The Central Bank kept key policy rates unchanged, which helped boost sentiment of traders and investors in the markets.
The Sensex shut shop at 19845.28, up 197.51 points or 1.01% and the Nifty closed at 5948.75 up 56.45 points or 0.96%. About 1548 shares advanced, 1380 shares declined, and 534 shares remain unchanged.
BSE IT index was the top gainer in trade today with close to 3% gain. Telecom stocks too surged in trade today. Rate sensitive’s like realty, banks and metal stocks too surged in trade post credit policy. All BSE sectoral indices ended in green barring capital goods.
The broader markets however underperformed largecaps. BSE Midcap and Smallcap indices were up 0.33% and 0.54% respectively compared to Sensex gain of 1%.
Top gainers in the largecap: SAIL, Suzlon Energy, Hero Honda, TCS, Infosys, Wipro, Tata Steel and Kotak Mahindra Bank were up 3-6%.
Top losers on the Sensex: Mahindra and Mahindra, Tata Power, HUL, Maruti Suzuki, Bajaj Auto and Sesa Goa were down 1-3%.
Food price index jumps 9.46% on Dec 4
Food price index rose 9.46%, while the fuel price index climbed 10.67% in the year to Dec. 4, government data on Thursday showed.
In the prior week, annual food and fuel inflation stood at 8.69% and 9.99%, respectively.
The primary articles price index was up 13.25% in the latest week compared with an annual rise of 12.66% a week earlier.
The wholesale price index , the most widely watched gauge of prices in India, rose 7.48% in November from a year earlier compared with 8.58% in October.
RBI keeps policy on hold: Will banks hike rates soon?
The Reserve Bank of India (RBI) in its credit policy review today has kept key rates unchanged only cutting statutory liquidity ratio (SLR) from 25% to 24% with effect from December 18, 2010 to January 28, 2011.
The central bank has paused in raising rates after six increases since March but warned that the risk in its inflation outlook is to the upside and unveiled steps to address persistently tight liquidity.
RBI would also conduct open market operation (OMO) auctions for purchase of government securities for an aggregate amount of Rs 48,000 crore in the next one month.
In an interview to CNBC-TV18’s Latha Venkatesh, Mohan Shenoi (Treasurer, Kotak Mahindra Bank), Shailendra Bhandari (MD and CEO, ING Vysya Bank), B A Prabhakar (ED, Bank of India) and Hemant Mishr (Head Global Markets South Asia, Standard Chartered Bank) gave their perspective on RBI’s policy.
According to Prabhakar, a rate hike in the January policy is unlikely but liquidity may remain tight till March. However, he said that if liquidity is going to be tight, then banks will have to increase the deposit rate and the deposit mobilization has been very slow. “Naturally the banks will have to meet their deposit targets,” he added.
According to him, we will see pressure on deposit rates which with a lag effect may have to be passed on. It may not be immediate but it maybe passed on with a lag effect, he reiterated.
Shailendra Bhandari, MD and CEO, ING Vysya Bank agrees that as long there is possible hinted objective of the Reserve Bank to reduce some of the interest margins we are going to see banks being aggressive on deposits passing on the cost through the lending rates especially the base rate but with a lag.
Bhandari explains, “To start with the base rate it is essentially formula driven and banks have been given time up to December 31 in which they can change the formula. But from January 1 onwards they are suppose to face the formula. Now the formula basically builds up on the deposit cost as on risk cost as on reserves and on a profit margin and then you translate that into a base rate. If you look at the deposit rates and when people ask to revise the base rate – do you have some banks who are around 9% but you have a lot of the large banks to still have base rates around 7.5%. When we did those rates deposit rates systematically any thing from 50 to150 basis points lower than what they are now you could actually argue that even higher because if you take the CD rates which are currently 9.5% for one year that is a lot higher than the official deposit rates which are around 7.5 to 8%. If you look merely the base rate there is an argument that there should be a substantial one time revision probably in January itself unless people decide to change the formula.”
Mohan Shenoi, Treasurer, Kotak Mahindra Bank is concerned that another 25 to 50 basis point hike is possible. According to him, the anti inflationary stance of monetary policy will continue throughout remaining part of this fiscal. “As we go along since the liquidity will still be in the deficit zone and not in the surplus zone. There are policy rate hikes expected up to March this year. I would feel there will be increases in base rates as we go along in the rest of this fiscal,” he added.
According to Hemant Mishr, Head Global Markets South Asia, Standard Chartered Bank, investors should it positively for the reason that somewhere at the back of the RBI’s mind when they got that number down from 25% to 24% they would have considered the gross bowering number for the next year and they still think that at 24% that can go through.
Honda formally decides to sell stake in Hero Honda JV
Japan's Honda Motor has formally decided to sell its stake in Indian partner, Hero Group. The board, including Analjit Singh and M Damodaran, is currently finalising the termination of the joint venture. However, sources inform that the decision on finalising private equity players has been deferred.
It is learnt that Hero will acquire 26% stake from Honda for an estimated USD 1-1.2 billion. Sources also add that Hero Honda is likely to pay a royalty of Rs 2,300-2,400 crore over three to four years to Honda.
CNBC-TV18 reports suggested that investors have not been in favour of Honda Motor selling its share to Munjals-led group on a discounted price, as they fear this well lead to Hero having to pay more in royalty to the Japanese automobile major.
RBI keeps rates unchanged, cuts SLR to 24%
As expected the Reserve Bank of India (RBI) has left all rates unaltered after six increases since March. Thus rates including repo, reverse repo, CRR stand unchanged at 6.25%, 5.25% and 6%, respectively.
Even though easing inflation has given the RBI enough room to leave interest rates on hold at its policy review, it has warned that the risk in its inflation outlook is to the upside and unveiled steps to address persistently tight liquidity.
The bank has cut the statutory liquidity ratio (SLR) from 25% to 24% with effect from December 18, 2010 to January 28, 2011. It would also conduct open market operation (OMO) auctions for purchase of government securities for an aggregate amount of Rs 48,000 crore in the next one month. These two measures are expected to inject liquidity on an enduring basis of the order of Rs 48,000 crore.
Commenting on its rational behind the move, the RBI stated that these measures will alleviate liquidity pressure in line with the policy and reduce liquidity deficit close to RBI’s comfort zone. While these measures have helped stabilise overnight interest rates, the extent of deficit could constrain banks’ ability to expand their balance sheets commensurate with the productive needs of the economy.
Wednesday, December 15, 2010
Sensex lacklustre; Wipro, Infy, Tata Steel, SAIL up
At 10.58 hrs IST, the Nifty was trading flat ahead of credit policy today. The poll suggests there will be no change in credit policy rates. Heavy buying was seen in IT and telecom stocks. Auto, power and capital goods stocks witnessed some selling pressure.
The Sensex was up 38.65 points or 0.20% at 19686.42, and the Nifty up 1.60 points or 0.03% at 5893.90. About 1497 shares advanced, 1059 shares declined, and 906 shares remain unchanged.
In the largecap space, Wipro was the top gainer with close to 3% gain. TCS, Infosys, Tata Steel and SAIL were up 1.5-2.5%. On the losing side, Mahindra and Mahindra, Tata Power, BHEL, Bajaj Auto and Tata Motors were down 1.6-2.7%.
Index heavyweight Reliance was trading at Rs 1,056.05 up 0.39% from its previous close of Rs 1,051.90. Refinery major HPCL was trading at Rs 415.20 down 0.47% from its previous close of Rs 417.15. Tech major Infosys was trading at Rs 3,272.00 up 2.13% from its previous close of Rs 3,203.65.
Hindustan Lever was trading at Rs 298.30 down 0% from its previous close of Rs 298.30. Cigarette major ITC was trading at Rs 165.95 down 0.42% from its previous close of Rs 166.65.
Top gainers on the BSE Midcap: Ispat Industries, Bajaj Hindusthan, Shree Renuka, United Breweries and Balrampur Chini were up 3-5%.
Top losers on the BSE Midcap: Network 18, Money Matters, Nagarjuna Construction, Jet Airways and Hind Nat Glass were down 3-6%.
Top gainers on the BSE Smallcap: Religare Technova, Sakthi Sugars, MarathonNextgen, Aditya Birla and Camlin were up 9-12%.
Top losers on the BSE Smallcap: Asian Hotel (E), Midfield Industries, SVC Resources, Parekh Aluminex and Shristi Infra were down 5-6%.
The Sensex was up 38.65 points or 0.20% at 19686.42, and the Nifty up 1.60 points or 0.03% at 5893.90. About 1497 shares advanced, 1059 shares declined, and 906 shares remain unchanged.
In the largecap space, Wipro was the top gainer with close to 3% gain. TCS, Infosys, Tata Steel and SAIL were up 1.5-2.5%. On the losing side, Mahindra and Mahindra, Tata Power, BHEL, Bajaj Auto and Tata Motors were down 1.6-2.7%.
Index heavyweight Reliance was trading at Rs 1,056.05 up 0.39% from its previous close of Rs 1,051.90. Refinery major HPCL was trading at Rs 415.20 down 0.47% from its previous close of Rs 417.15. Tech major Infosys was trading at Rs 3,272.00 up 2.13% from its previous close of Rs 3,203.65.
Hindustan Lever was trading at Rs 298.30 down 0% from its previous close of Rs 298.30. Cigarette major ITC was trading at Rs 165.95 down 0.42% from its previous close of Rs 166.65.
Top gainers on the BSE Midcap: Ispat Industries, Bajaj Hindusthan, Shree Renuka, United Breweries and Balrampur Chini were up 3-5%.
Top losers on the BSE Midcap: Network 18, Money Matters, Nagarjuna Construction, Jet Airways and Hind Nat Glass were down 3-6%.
Top gainers on the BSE Smallcap: Religare Technova, Sakthi Sugars, MarathonNextgen, Aditya Birla and Camlin were up 9-12%.
Top losers on the BSE Smallcap: Asian Hotel (E), Midfield Industries, SVC Resources, Parekh Aluminex and Shristi Infra were down 5-6%.
MOIL ends with 24% premium at Rs 464.20
MOIL (earlier known as Manganese Ore India) ended with 24% premium to its issue price on NSE. It closed at Rs 464.20 up 23.79% from its issue price of Rs 375 a share, after witnessing an intraday high of Rs 590 and low of Rs 456 on the National Stock Exchange. The share opened at Rs 565 on both exchanges.
On Bombay Stock Exchange, it has hit a high of Rs 591.05 and low of Rs 458.50, before ending at Rs 466.50. Traded volume on exchanges was 3.15 crore shares.
MOIL is India’s largest manganese ore producer and has 50% share in domestic manganese production. It is one of the lowest cost producers of manganese ore in the world.
The company's initial public offering (IPO) received tremendous response from all investors' categories and was subscribed 56.43 times. The price band for the issue was fixed at Rs 340-375.
Reserved portion of QIBs was subscribed 49.16 times. Non-institutional and retail investors' portion subscribed 143.30 times and 32.86 times, respectively. Employees' portion was undersubscribed.
On Bombay Stock Exchange, it has hit a high of Rs 591.05 and low of Rs 458.50, before ending at Rs 466.50. Traded volume on exchanges was 3.15 crore shares.
MOIL is India’s largest manganese ore producer and has 50% share in domestic manganese production. It is one of the lowest cost producers of manganese ore in the world.
The company's initial public offering (IPO) received tremendous response from all investors' categories and was subscribed 56.43 times. The price band for the issue was fixed at Rs 340-375.
Reserved portion of QIBs was subscribed 49.16 times. Non-institutional and retail investors' portion subscribed 143.30 times and 32.86 times, respectively. Employees' portion was undersubscribed.
Will this be a 'no action' Credit Policy?
RBI's mid quarter policy tomorrow will be watched more for its talk than its walk. Bankers and economists expect the Central Bank to keep policy rates unchanged but drop some hints on what it thinks about inflation and liquidity. CNBC-TV18’s Vidhi Godiawala and Gopika Gopakumar polled bankers and economists on their expectations and here's the result.
RBI is unlikely to signal any changes in the policy on Thursday. CNBC-TV18 poll of bankers and economists shows that RBI will keep repo and reverse repo rates unchanged in the mid-quarter review. This is in line with the guidance given by governor Subbarao after hiking key policy rates by 25 bps each in the November policy.
D Subbarao, Governor, RBI, said, “Based purely on current growth and inflation trends, the Reserve Bank believes that the likelihood of further rate actions in the immediate future is relatively low.”
Market will therefore keep a close watch on the RBI speaks—the consensus is that RBI will sound hawkish in the review with inflation hovering above RBI's comfort zone of 6%.
Robert Prior-Wandesforde, Credit Suisse, said, “We have three more 25 bps hikes, one 25 bps hike before current fiscal year, two more by July -August of 201. I think rates should be above normal.”
What RBI says about liquidity will be much watched say bankers.
Banks currently borrow over Rs 1 lakh crore from the RBI's repo window on a daily basis. This is expected to touch Rs 1.75 lakh crore by early next week when advance taxes are paid. So while there are stray hopes of a CRR cut, very few believe the RBI will go for it.
Nifty opens flat; Bharti, TCS, ONGC, Infy surge
At 09.17 hrs IST, the Nifty opened on a flat note in the opening bell. Selling was seen in auto, realty and metal stocks. Buying was seen in IT and telecom stocks. The broader markets too were trading flat.
The Sensex was up 55.51 points or 0.28% at 19703.28, and the Nifty was up 11.30 points or 0.19% at 5903.60. About 441 shares advanced, 263 shares declined, and 2758 shares remain unchanged.
In the largecap space, TCS, Infosys, Bharti Airtel, Wipro and Kotak Mahindra Bank were up 1-1.5%. On the losing side, ACC, Mahindra and Mahindra, Hero Honda, Tata Power and Bajaj Auto were down 1-1.5%.
Index heavyweight Reliance was trading at Rs 1,054.90 up 0.29% from its previous close of Rs 1,051.90. Refinery major HPCL was trading at Rs 419.50 up 0.56% from its previous close of Rs 417.15. Tech major Infosys was trading at Rs 3,251.00 up 1.48% from its previous close of Rs 3,203.65.
Hindustan Lever was trading at Rs 297.60 down 0.23% from its previous close of Rs 298.30. Cigarette major ITC was trading at Rs 166.50 down 0.09% from its previous close of Rs 166.65.
The most active shares on NSE were MOIL, Jaiprakash Associates, SBI, Hero Honda and Infosys.
MOIL was trading around Rs 465 mark. The stock listed on the bourses yesterday with close to 50% premium.
Top gainers on the BSE Midcap: Shree Renuka, Ispat Industries, Bajaj Hindusthan, Balrampur Chini and EID Parry were up 3.5-5%.
Top losers on the BSE Midcap: Money Matters, Network 18, Phoenix Mills, Indian Metals and Sadbhav Engineering were down 3-5%.
Top gainers on the BSE Smallcap: Religare Technova, Aditya Birla, MarathonNextgen, Sakthi Sugars and Dalmia Bharat were up 7-12%.
Top losers on the BSE Smallcap: Sundaram-Clayton, Midfield Industries, SVC Resources, Sujana Towers and Shristi Infra were down 5% each.
The US markets ended modestly lower as investors took a pause after stocks reached two-year highs and the dollar rose as concerns over European sovereign debt worries resurfaced.
Subscribe to:
Posts (Atom)