Banking stocks may slide

State Bank of India (SBI), ICICI Bank, Bank of Baroda (BoB) and Bank of India (BoI) are reportedly set to book mark-to-market losses on the exposures of their foreign offices to credit derivatives, with the spreads on these widening since international lenders turned risk-averse following the crisis in the US subprime (or high-risk home loan) market. Credit derivatives are instruments for which the underlying asset is a loan or a bond. Marking to market means valuing a portfolio based on the prevailing market price.

Public sector oil marketing companies (OMCs) — Indian Oil Corporation, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have reportedly informed the Department of Public Enterprises that they have no immediate plans to issue bonus shares.

Hindustan Zinc said on Saturday, 5 January 2008 it had raised zinc prices by 3.6%, or Rs 3,800 a tonne, to Rs 1,10,600 a tonne, effective immediately. However, it has cut the price of lead by 0.6%, or Rs 700 a tonne to Rs 1,15,600 a tonne.

National Stock Exhange on Friday, 4 January 2008 curbed fresh positions in the derivatives contracts of three firms as the open interest had crossed 95% of the market-wide position limit. The firms are Hotel Leela Venture, Nagarjuna Fertilizers and Tata Teleservices Maharashtra (TTML). Trading can be done by offsetting existing positions till the open interest came down to 80% of the market-wide position limit, NSE said.

Mahindra & Mahindra may reportedly pull out of a joint venture with Renault SA and Nissan Motor Company to build a Rs 4000 crore manufacturing plant in India. According to reports, Mahindra was unhappy with both Renault and Nissan entering ventures with other partners in India. Renault has tied up with Indian two-wheeler maker Bajaj Auto to build a low-cost car, while Nissan has signed three other joint ventures with Ashok Leyland.

Cranes Software International said on Friday, 4 January 2008 its board has approved buying out US-based Engineering Technology Associates Inc. for Rs 72 crore. The acquisition will be carried out through Cranes' wholly-owned US unit.

Spanco Telesystems & Solutions said on Friday, 4 January 2008 it has got a contract worth Rs 13.75 crore to connect jails and courts in Haryana through a wide area network. The entire project will be implemented in the next three months.

Bartronics India is reportedly close to an acquisition in the United States. The deal size is expected to be in $25-30 million range. The target company provides radio frequency identification (RFID) services and has customers in the healthcare, transport and entertainment segments, the report suggested.

Reliance Power, the power generation arm of Anil Ambani’s Reliance Energy, is reportedly planning to tap the inorganic route and explore possibilities of taking over existing government power projects, including Ratnagiri Gas and Power plant at Dabhol, to scale up its generation capacity.

Foreign investors such as Franklin Templeton, HSBC, ABN Amro have reportedly picked up around 10% stake in the Ashok Piramal group’s real estate arm, Peninsula Land (PLL) for Rs 525 crore. The new equity holders purchased PLL stake through a qualified institutional placement (QIP) route.

The board of Adani Enterprises at the meeting held on 4 January 2008, decided to issue and allot equity shares or instruments convertible into equity shares up to Rs 3000 crore to qualified institutional buyers (QIBs).

Reliance Industries Ltd (RIL) and Oil and Natural Gas Corporation (ONGC) are reportedly working towards co-optition (where competitors work with each other) by sharing infrastructure and facilitating smooth operations in each other’s exploration and production (E&P) activities. Indications are that RIL may offer rigs to ONGC in two or three locations in 2008-09. These rigs are mainly for undertaking exploration activities. The shortage of rigs for E&P activities has forced the two major players in India to come to the table for sharing rigs.

Steel Authority of India (Sail) is reprotedly looking for more joint ventures in India and abroad for coking coal mines.