“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
The winds of political change have been blowing for some time. Large corporate bodies are quick to make necessary adjustments. It was no surprise that Reliance Chairman Mukesh Ambani chose to visit New Delhi and meet important government functionaries to express his point of view on the issue of windfall tax. In a choppy market, Reliance managed to recover sharply.
Market participants too have to adjust to the changing winds. It is better to take a longer term view because by the time you try to make quick adjustments, the direction of the wind may change. Some buying may be seen in mid cap counters. HUL could be among the safer stocks for the time being.
We understand a handful of people may be active on select counters. Some buying is also happening on the hopes that if the government sails through with a confidence vote, the markets will give a thumbs’ up and see some short term spurt. These are high risk events. With no major results expected today, indices may swing in and out of negative territory.
Ranbaxy may see some recovery after the company clarified that its deal with Daiichi is on track. Earlier reports stated production at three facilities of Ranbaxy Laboratories could be banned if charges of fraud, forging of documents and manufacturing from unapproved locations leveled by USFDA are proved.
Last weekend it was news about Fannie Mae and Freddie Mac and IndyMac which haunted the bulls on Wall Street. Now fears that Merrill Lynch and Citigroup will report another quarterly loss is keeping up the pressure. As if all this was not enough, National City and Washington Mutual(WaMu) witnessed sharp erosion as WaMu crashed nearly 35%. A Lehman Brothers note said it may need to substantially boost its reserves over the rest of the year to cover home loan losses.
The Dow Jones fell 0.4% and closed at its lowest point since July 21, 2006. The Standard & Poor's 500 index fell 0.9% and closed at June 2006 lows. The Nasdaq dropped 1.2% but managed to stay above its March lows. Asian stocks fell yet again led by financial companies, on mounting concern credit-market losses will widen. Japan's Nikkei 225 Stock Average fell 1.4% to 12,830.20.
Oil prices, which swung between $142.49 and $146.37 a barrel ended flat. Light, sweet crude for August delivery rose 10 cents to settle at $145.18 a barrel on the New York Mercantile Exchange trading. On Friday it had hit a record trading high of $147.27.
Sun Pharmaceutical announced its subsidiary, Alkaloida Chemical has extended the expiration date of the tender offer for purchase of all outstanding Ordinary Shares of Taro Pharmaceutical Industries Ltd. (Taro). The Offer has been extended to September 2, 2008. Earlier, a report stated Templeton Asset Management – a prominent shareholder of Taro has dumped Sun Pharma’s unsolicited tender offer.
Steel companies could see some action on reports that they are considering 15% hike in prices to offset rising raw material costs. Meanwhile, the railways has reportedly decided to give a 25% discount on domestic iron ore freight booked to ports in a bid to help steel companies.
Among the major bulk deals, Merrill Lynch sold 200,000 shares of Selan Exploration at an average price of Rs217.
Insider trades:
Sakthi Sugars: M.Manickam, Vice Chairman & Managing Director of the company from the market has purchased 10,499 equity shares on 10th July 2008.
Gateway Distriparks: Kirpa Ram Vij, Director of the company has purchased 15,000 shares from the open market on 9th July 2008.
Indian bourses ended on a mixed note on Monday with Nifty closing almost flat. However, benchmark Sensex further lost over 130 points after losing over 450 points on Friday.
Bulls were able to hold on to their gains for major part of the day, but lost ground towards the fag end of the session.
The down fall could be attributed to selling witnessed in IT heavyweights like Infosys, Satyam and TCS. Even the broader Sectoral indices i.e. the Mid-Cap and the Small-Cap indices were under pressure.
Finally the Sensex lost 139 points to close at 13,330 and the Nifty slipped 9 points to close flat at 4,039.
Axis Bank slipped by 5% to Rs635. The company announced its Q1 results with net profit at Rs3.30bn (up 88.5%) and interest income at Rs22.70bn (up 47%). The scrip touched an intra-day high of Rs692 and a low of Rs627 and recorded volumes of over 17,00,000 shares on BSE.
Shares of Ranbaxy fell over 10% to Rs475 after the U.S. federal government said that it was investigating whether Ranbaxy Laboratories Ltd. destroyed reports it was required to keep, inaccurate data and failed to meet quality control specifications in manufacturing the generic drugs it sells. The scrip touched an intra-day high of Rs522 and a low of Rs470 and recorded volumes of over 28,00,000 shares on BSE.
HCL Technologies plunged by 6% to Rs225 after the company said that its foreign-exchange losses may total as much as US$77mn in the year ended June 30. The scrip touched an intra-day high of Rs229 and a low of Rs206 and recorded volumes of over 3,00,000 shares on BSE.
Era Infra gained by 1.2% to Rs570 after the company announced that it secured civil, structural & architectural work worth Rs955mn from BHEL for main power block along with its Auxiliaries and BOP for 1 x 500 MW Thermal Power Station, Extension Unit # 6, Gujarat State Electricity Corporation Ltd at Ukai, Dist. Tapi, Gujarat. The scrip touched an intra-day high of Rs573 and a low of Rs545 and recorded volumes of over 10,000 shares on BSE.
NDTV surged by over 2% to Rs405 after 6.1% of the company’s equity changed hands in a single trade. As many as 3.8mn shares were traded at Rs447.8 per share on BSE. The scrip touched an intra-day high of Rs447.80 and a low of Rs397 and recorded volumes of over 43,00,000 shares on BSE.
Sterlite Technologies advanced by 1.5% to Rs200 after the company announced that it secured a contract worth US$15.5mn in Africa and SAARC. The scrip touched an intra-day high of Rs205 and a low of Rs191 and recorded volumes of over 44,000 shares on BSE.
Madhucon Projects rallied by over 6% to Rs307 after the company announced that it secured EPC contract worth Rs9.89bn for setting up of Thermal Power Plant in Krishnapatnam South, Nellore District of Andhra Pradesh. The scrip touched an intra-day high of Rs332 and a low of Rs290 and recorded volumes of over 22,000 shares on BSE.
Reliance Industries has hired 17 banks to arrange for a US$1bn debt facility to fund its expansion projects. (BS) Production at three facilities of
Ranbaxy Laboratories could be banned if charges of fraud, forging of documents and manufacturing from unapproved locations leveled by USFDA are proved. (BS)
The ministry of broadcast and information has sent a show cause notice to Bharti Group’s DTH subsidiary to question its compliance with FDI norms. (BS)
- HDFC is raising Rs5bn via private placement of bonds with LIC. (BL)
- SBI has recovered bad loans worth ~Rs20bn during April-June 2008. (ET)
- NTPC may bid to acquire thermal plants in Oman. (FE)
- NTPC would get a term loan of Rs100bn from PFC to finance its debt portion of big ticket projects for XI plan. (FE)
- PFC and Reliance Infra JV has received approval for transmission licence from CERC. (FE)
- Templeton Asset Management – a prominent shareholder of Taro has dumped Sun Pharma’s unsolicited tender offer. (ET)
- Indian Hotels is believed to be exploring the Philippines market to set up hotels and resorts there. (DNA)
- REC is keen on picking up stakes in upcoming power plants in coal-rich states. (DNA)
- Indian Oil Corp expects the Government to issue letters promising oil bonds for Q1 FY09. (DNA)
- IFCI will bid to buy non-performing assets of the now-shut IIBI Ltd. (DNA)
- Jet Airways is likely to increase fuel surcharge by up to Rs200 per sector for domestic flights. (ET)
- The government has permitted Jet Airways to commence a daily flight from Mumbai and Delhi to Saudi Arabia. (BL)
- BSNL plans to invest Rs50bn in its Wimax project. (BS)
- Lafarge plans to invest US$1bn over the next five years in India to raise its cement manufacturing capacity to 20mn tons. (BS)
- As per South African media, MTN could go back to discussions with Bharti Airtel. (BS)
- Ispat Industries is set to get an iron ore mine in Jharkhand. (BS)
- The Navratna status of HPCL and BPCL will be retained. (FE)
- Netherlands Development Finance has extended an ECB worth US$25mn to Alok Industries. (BS)
- Blue Star has got an order worth Rs1.04bn from Delhi Metro Rail Corp Ltd for air-conditioned of seven metro stations. (DNA)
- US-based telecom equipment vendor UTStarcom has entered into a new deal with Aksh Optifibre for expansion of the latter’s Internet protocol TV services. (DNA)
- NIIT has joined hands with global electronic testing firm Pearson VUE to offer IT and non-IT tests for students and professionals across the country. (DNA)
- Union Bank of India and Belgian firm KBC Asset Management Company have entered into a JV to set up a mutual fund in India. (ET)
- Union Bank of India has projected a 25% growth in business for the current fiscal. (FE)
- HCL Comnet, a subsidiary of HCL Technologies announced a five-year, RS600mn network outsourcing deal with Union Bank of India. (ET)
- Sterlite Technologies has bagged three contracts worth US$15.5mn in Asia and Africa. (BS)
- SRF is going to acquire South Africa based Industex Technical Textiles for a sum of Rs200mn. (BS)
- Siemens has bagged a Rs2bn contract from Ceylon Electricity Board, Sri Lanka. (BS)
- BEML has secured orders for Rs345mn from African countries Tunisia and Malawi. (BS)
- Madhucon Projects has bagged Rs9.89bn order for setting up a thermal power plant in Andhra Pradesh. (BL)
- Vakrangee Softwares has bagged a electoral project in Maharashtra for the delimitation exercise. (ET)
- RPG Group’s retail venture - Books and Beyond plans to roll out another 10-12 stores over the next 6-8 months and targets Rs1.5-2bn revenues over the next 18-24 months. (ET)
- Jubilant Biosys, a subsidiary of Jubiliant Organosys has announced a drug discovery partnership deal with US-based biotech company Amgen Inc. (BL)
- Emaar Properties has decided to invest US$150mn into specific projects of Emaar MGF Land Ltd, the Indian joint venture between MGF Development Ltd and itself. (BL)
Economic Front Page
- Steel companies are considering 15% hike in prices to offset rising raw material costs. (BS)
- Production from Panna-Mukta gas field is expected to be normalized in the next two-three days. (BL)
- Indirect tax collections grew 9.2% in June 2008. (BS)