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Saturday, March 29, 2008
Weekly Newsletter - March 29 2008
After posting one of the best weekly gains in recent months, the bulls will hope to retain their hold. Markets could see some spikes before the result season gets underway. Despite inflation rising, the markets staged a strong comeback on Friday. Some suspect the gains witnessed in the week, especially on Friday, was more to do with NAV propping by some mutual funds.
Like in recent weeks, pressure at higher levels will continue to keep the markets choppy. Besides the global cues, there are worries on the margin front for institutional investors too. No harm in booking profits if some recently bought stocks have had a good run. But then keep collecting some stocks for the long term too. w
Pay commission recommends liberal hike and Cabinet approves farmers relief
Sixth pay panel recommends liberal pay hikes
The Sixth Pay Commission submitted its report to Finance Minister P. Chidambaram and asked for a substantial hike in salaries for central government employees across the board. The new pay scale will come into effect from January 1, 2006. The report will now be presented to the Union Cabinet for its consideration. The pay panel is set up once a decade to assess civil servant salaries. The pay hike will cost the Government a net Rs79.75bn (US$2bn) in the financial year ending March 31, 2009. Apart from this, the Government will have to make an additional, one-time payment of Rs180.6bn for salary arrears. The commission recommended a salary increase of 77% for the lowest rung of central government workers. It suggested minimum wage of Rs6,660 a month and maximum salary of Rs80,000 a month for government employees. The previous pay commission was set up in April 1994 and submitted its report in January 1997. The subsequent pay increase cost the Government Rs170bn (US$4.2bn) annually. States were forced to match the pay hike, swelling the combined central and state deficit to nearly 10% of GDP. Some economists fear a similar slippage in the fiscal deficit this time around.
Cabinet okays farmers debt relief fund
The Cabinet gave its approval for creation of a Farmers’ Debt Relief Fund with an initial corpus of Rs100bn to be transferred from the Consolidated Fund of India to Public Accounts during the financial year 2007-08. The Cabinet gave its approval for augmentation of the fund required for reimbursing the lending institutions the amount of debt waiver /relief granted by them. Accordingly, the fund will subsequently be enhanced by Rs150bn in FY09, Rs150bn in FY10, Rs120bn in FY11 and Rs83.14bn in FY12. A scheme of debt waiver for farmers was announced in the Budget 2008-09. The scheme is aimed at mitigating the hardships being faced by the farmers in general and small and marginal farmers in particular. Upon being granted, debt waiver or signing an agreement for debt relief under the One Time Settlement (OTS), farmers would be entitled to fresh agricultural loans from banks in accordance with normal rules. The implementation of the debt waiver and debt relief scheme will be completed by June 30.
No fun subscribing to IPOs this season..
Investors have lost around quarter of the amount raised by 18 IPOs this calendar year as 13 of them are trading below their issue prices, a top Finance Ministry official said on Saturday.
"Out of the 18 IPOs launched in 2008, 13 were trading at a discount last week implying losses to investors of about a quarter of the total IPO amount. I think, it must be larger today," Finance Secretary D Subbarao said at a seminar on Securities Contracts (Regulation) Rules here.
If the situation continues, it would be increasingly difficult for corporates to raise money from the capital market, he said.
The Finance Secretary attributed weak sentiment in the market to increasing risk-aversion among investors. "The stock market provided 15 billion dollars in 2007 to support investments of firms. But, as global risk aversion has risen in the past few months, this has dented investors sentiments in India too," he added.
Of the total IPOs listed on stock exchanges this year, 11 companies had an issue price above Rs 100. The aggressive pricing of the IPOs have led the companies to lose substantially being unable to sustain the prices in long-term.
In fact, reliance power launched with much fanfare, closed at Rs 372.50 on the opening day, much below its offer price of Rs 450 a share, forcing the company to issue three bonus shares for every five held by non-promoters.
However, state-run rural electrification corporation was trading higher at Rs 109.05 against its issue price of Rs 105 and GSS America at Rs 640.85 against an issue price of Rs 400.
The bearish sentiments in the market has led to 13 firms witnessing red in the market. The Sensex, which opened above 20,300 points in January, has dipped 4,000 points to about 16,400 points since then till yesterday.
Inflation scares the Govt, may take steps on Monday
Concerned at "disturbing" inflation, that spiralled to over 13-month high of 6.68 percent, the government has decided to hold a meeting of high-level Cabinet Committee on Monday to take stock of rising prices, Finance Secretary D Subbarao said on Saturday.
A high-level Cabinet Committee will meet on Monday to take stock of high inflation that has surged to over 13-month high of 6.68 percent, a top finance ministry official said on Saturday.
"The Cabinet Committee on prices will meet on Monday," Finance Secretary D Subbarao told reporters on the sidelines of a seminar on proposed amendments to `securities contracts (regulations) rules`.
Earlier addressing the seminar, Subbarao said yesterday`s inflation numbers, which were quite disturbing, were partly due to high global commodity prices.
Commodity prices are rising globally despite fears of recession in the US, he said at the seminar organised by the Institute of Company Secretaries of India.
"Generally, we expect commodity prices will go down when there is recession in the developed countries. If you look at past recession in the US, there is depression in commodity prices. But, this time there is elevation in commodity prices together with recession in the US," he said.
Together with surging inflation, the rupee had also risen yesterday to the highest level in a month to go below crucial 40-level to stand at 39.89/90 against the dollar, up 20.50 paise over the previous closing.
Subbarao said exports have come under double pressure because of appreciation in the rupee and low demand due to recession in the US.
Metal and food prices spurted inflation to the highest number in over a year, much above the RBI`s tolerance level of 5 percent.
Finance Minister P Chidambaram had said yesterday that the government would take every measure to keep prices under check, even at the cost of slowing down the economic growth.
"The government is determined to take all steps -- fiscal, monetary and supply side -- to moderate inflation and if that means we have to live with slightly lesser growth, so be it," he had said in Mumbai.
Describing inflation as a regressive tax, he had said, "we have to balance between inflation and growth."
Attributing high rate of inflation to global crude, food and commodity prices, the Finance Minister had said interest rates are the most effective instrument to contain price rise.
Analysts also said they did not rule out further tightening of monetary stance by the reserve bank at its annual monetary policy review, slated for April 29, even if it costs some growth.
Commerce Minister Kamal Nath had said in Delhi, "any rise in inflation is a matter of concern ...Government is looking at a proposal to ban non-basmati rice exports. We are also going to recommend scrapping of import duty on steel."
Market ends up 9% higher for the week
The long bear phase seems to have ended as the stock markets witnessed an impressive relief rally lifting the benchmark Sensex by 9% during the week ended March 28.
The Sensex moved between a high of 16,452.08 and a low of 15,056.09 before ending the week at 16,371.29 - a sharp rise of 1,376.46 points (9.18%) over the previous weekend.
The buying spree was so strong that the Sensex logged its second-biggest gain of 928.09 points on March 25.
Take Solutions, Four Soft may merge
Hyderabad-based Four Soft Ltd and Chennai-headquartered Take Solutions Ltd, providers of IT products and solutions in the supply chain management (SCM) space, announced their intent to merge. The combination will create a global, comprehensive company with one of the largest product offerings in SCM. Both companies have received in-principle approval from their board of directors to consider the merger.
Both boards will appoint independent firms of chartered accountants and financial advisers to reach a fair valuation for the shareholders of both the companies. The boards of Four Soft and Take Solutions expect to meet within six to eight weeks to consider the reports of the advisers. The merger, if approved by the boards, will be subject to shareholders’ approval of both companies and other regulatory approvals.
“Four Soft has full service products and offerings. Take Solutions' product offerings complement this very well on the enterprise side. The combined range of intellectual property (IP) is unmatched globally and will enable both good customer traction and good shareholder value,” Palem Srikanth Reddy, chairman and chief executive officer of Four Soft, stated in a press release today.
Commenting on the proposed merger, Srinivasan HR, vice-chairman and vision holder, Take Solutions, said, “The coming together of two leading first-generation IT companies with similar philosophies and vision will create a significant IP company based out of India with worldwide operations. Four Soft is a perfect foil to Take Solutions. Our strong presence in the US and Asia Pacific complements Four Soft’s dominance in Europe and Japan. The proposed merger of the two companies will leverage Indian innovation and a strong partnering philosophy to become a truly global company in size and capability in the coming years.”
Four Soft, which has over 300 customers across 120 countries and 50,000 users in the supply chain domain, clocked revenues of Rs 150 cr during the last financial year. The company has been registering revenues of Rs 45 cr per quarter and expects to keep the current performance level to touch Rs 180-190 cr by this fiscal end. While 60% of Four Soft’s revenues flow in from Europe, the US and Asia markets account for 25 per cent and 15 per cent respectively.
Via BS
BSE Bulk Deal Watch - March 28 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
28/3/2008 530135 AKANKSH FINV SUMER CHAND GARG S 150000 4.06
28/3/2008 530135 AKANKSH FINV SIDHARTH GARG S 150000 4.06
28/3/2008 520077 AMTEK AUTO L WARHOL LIMITED B 1793381 260.00
28/3/2008 512332 BIRLA CAP DIPAK RAMNIKLAL SHAH S 127881 5.98
28/3/2008 531682 CAT TECHNOL SARFARAZKHAN SARVARKHAN PATHAN B 593254 5.49
28/3/2008 531682 CAT TECHNOL SARFARAZKHAN SARVARKHAN PATHAN S 646789 5.51
28/3/2008 519475 CHORD FOOD P SHYAMLAL BANSILAL RAJORE B 15000 55.43
28/3/2008 519475 CHORD FOOD P SHYAMLAL BANSILAL RAJORE S 15000 55.43
28/3/2008 500830 COLGATE PALM DWS INVEST SA AC DWS INVEST BRIC PLUS B 961149 394.00
28/3/2008 500830 COLGATE PALM MORGAN STANLEY MAURITIUS COMPANY LTD S 961149 394.00
28/3/2008 532271 CYBERMAT INF SARFARAZKHAN SARVARKHAN PATHAN B 411353 5.33
28/3/2008 532271 CYBERMAT INF SARFARAZKHAN SARVARKHAN PATHAN S 411353 5.26
28/3/2008 532903 DHANUSTECH MELCHIOR INDIAN OPPORTUNITIES FUND B 150000 156.00
28/3/2008 517973 DMC INTER J A FINANACIAL AND MANAGEMENT CONSULTANTS PVT LTD B 20000 11.60
28/3/2008 517973 DMC INTER HITECH COMPUTECH PRIVATE LTD S 56003 11.77
28/3/2008 531750 ENCORE SOFT K ULLAS KAMATH S 55799 13.10
28/3/2008 532958 ETC NETWORK B K SHAH AND CO B 114132 340.35
28/3/2008 532958 ETC NETWORK ICICI PRUDENTIAL MUTUAL FUND AC FUSION FUND SERIES II S 70000 336.02
28/3/2008 532958 ETC NETWORK B K SHAH AND CO S 114132 341.53
28/3/2008 513579 FOUNDRY FUEL MADHU AGARWALLA S 36601 4.65
28/3/2008 509563 GARWA MARI I SWEETY INVESTMENT S 29394 16.04
28/3/2008 526717 GOPALA POLYP PRASAD DESHPANDE S 150000 3.56
28/3/2008 532909 GRABAL ALOK INDEX EQUITIES PVT.LTD B 1399000 100.00
28/3/2008 532909 GRABAL ALOK DIVYA SHAKTI TRADING SERVICES LIMITED S 1400000 100.00
28/3/2008 511682 IFL PRMOTER HITECH COMPUTECH PRIVATE LTD S 30000 21.70
28/3/2008 531025 INCA FINLEAS NIRMALA PRAVIN GALA B 20000 55.00
28/3/2008 522165 INDSIL ELECT SHARON GUPTA B 60000 47.75
28/3/2008 522165 INDSIL ELECT HEMANT KUMAR GUPTA S 60000 47.75
28/3/2008 509709 INTERN CONVE MULTI MANAGER INDIA FUND LIMITED B 50000 262.10
28/3/2008 509709 INTERN CONVE KEDCO PROCESSORS PRIVATE LIMITED S 54486 262.37
28/3/2008 531115 JYOTI COSM E SAROJINI FIN AND INV P LTD B 456703 1.49
28/3/2008 531115 JYOTI COSM E S S H REHMAN S 458501 1.49
28/3/2008 523810 KALE FILMS PARIMAL J MEHTA S 350000 1.69
28/3/2008 526409 KALPANA INDU JACQUA INDUSTRIES AND SALES CO LTD B 93155 70.00
28/3/2008 512413 KHAITAN WVG BHAROSEMAND COMMODITIES PVT.LTD B 90496 93.30
28/3/2008 531269 KLG SYSTEL RELIANCE INFRASTRUCTURE AND CONSULTANTS LIMITED B 400462 550.50
28/3/2008 531269 KLG SYSTEL SONATA INVESTMENTS LIMITED S 400462 550.50
28/3/2008 515093 MADHAV MAR G SHRIPAL SHARES AND SECURITIES LIMITED B 55000 44.69
28/3/2008 524000 MAG SHR FIN RELIANCE INFRASTRUCTURE AND CONSULTANTS LIMITED B 557000 350.00
28/3/2008 524000 MAG SHR FIN SONATA INVESTMENTS LIMITED S 557000 350.00
28/3/2008 531219 POONAM PHARM SWARN GANGA TRADING PVT. LTD. B 50300 3.41
28/3/2008 532748 PRIME FOCUS RELIANCE CAPITAL LIMITED B 482000 650.00
28/3/2008 532748 PRIME FOCUS ADLABS FILMS LIMITED S 482000 650.00
28/3/2008 506618 PUNJAB CHEM MOHIT SALECHA B 25000 136.99
28/3/2008 531273 RADHE DEVELO HIRALKUMAR JAYANDRABHAI THAKK S 90000 46.32
28/3/2008 530047 RAI SH REK M HRM INFOBIZ PVT LTD B 40140 110.16
28/3/2008 530047 RAI SH REK M KEVENTOR LEATHER PVT LTD S 39000 110.23
28/3/2008 526407 RIT PRO IND MUVIN INFOTECH LTD B 100000 59.65
28/3/2008 502090 SAGAR CEMENT AVH RESOURCES INDIA PVT L B 199060 442.49
28/3/2008 502090 SAGAR CEMENT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 158040 442.50
28/3/2008 502090 SAGAR CEMENT BLACKSTONE ASIA ADVISORS LLC AC INDIA FUND INC S 191960 442.50
28/3/2008 524727 SPAN DIAGNOS DARSHANJIT SINGH B 18928 70.20
28/3/2008 512048 SPLASH MEDIA RAJESH KUMAR MAHESHWARI HUF S 7500 125.00
28/3/2008 513530 STELCO STRIP SHEETAL RAJESH JAIN B 100000 28.25
28/3/2008 513530 STELCO STRIP CNI INFOXCHANGE PVT LTD B 100000 28.25
28/3/2008 531866 SUBHKAM CAP MICRO MANAGEMENT LTD S 100000 419.39
28/3/2008 532948 TULSI EXTRU SREYASHKUMAR MAHESHBHAI PATEL B 70000 80.69
28/3/2008 532948 TULSI EXTRU SREYASHKUMAR MAHESHBHAI PATEL S 70000 78.09
28/3/2008 516030 YASH PAPER L SHARON GUPTA B 300000 6.95
28/3/2008 516030 YASH PAPER L HEMANT KUMAR GUPTA S 310000 6.98
NSE Bulk Deal Watch - March 29 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
28-MAR-2008,ANTGRAPHIC,Antarctica Graphics Ltd,VISHAL CHANDRESH KOTHARI,BUY,730000,0.70,-
28-MAR-2008,ETC,ETC Networks Limited,B K SHAH AND CO,BUY,130895,340.80,-
28-MAR-2008,ETC,ETC Networks Limited,DINESH MUNJAL,BUY,66242,343.93,-
28-MAR-2008,ETC,ETC Networks Limited,PRASHANT JAYANTILAL PATEL,BUY,62608,343.64,-
28-MAR-2008,ETC,ETC Networks Limited,SHAH HEMANG DINESH,BUY,70420,340.69,-
28-MAR-2008,ETC,ETC Networks Limited,TRANSGLOBAL SECURITIES LTD.,BUY,59110,356.65,-
28-MAR-2008,GATI,GATI LIMITED,MEERA MADHUSUDAN SINGH,BUY,1500000,101.96,-
28-MAR-2008,KOHINOOR,Kohinoor Foods Limited,NAKAMICHI SECURITIES LTD,BUY,150000,107.66,-
28-MAR-2008,MAGMA,Magma Shrachi Finance Ltd,RELIANCE INFRASTRUCTURE AND CONSULTANTS LIMITED,BUY,1600000,350.00,-
28-MAR-2008,ANTGRAPHIC,Antarctica Graphics Ltd,VISHAL CHANDRESH KOTHARI,SELL,680000,0.65,-
28-MAR-2008,ETC,ETC Networks Limited,B K SHAH AND CO,SELL,129759,342.09,-
28-MAR-2008,ETC,ETC Networks Limited,DINESH MUNJAL,SELL,66242,346.87,-
28-MAR-2008,ETC,ETC Networks Limited,ICICI PRUDENTIAL MUTUAL FUND ,SELL,180000,340.75,-
28-MAR-2008,ETC,ETC Networks Limited,PRASHANT JAYANTILAL PATEL,SELL,62608,345.16,-
28-MAR-2008,ETC,ETC Networks Limited,SHAH HEMANG DINESH,SELL,70420,341.83,-
28-MAR-2008,ETC,ETC Networks Limited,TRANSGLOBAL SECURITIES LTD.,SELL,59110,355.44,-
28-MAR-2008,GATI,GATI LIMITED,MAHENDRA AGARWAL,SELL,1456531,102.00,-
28-MAR-2008,GTCIND,GTC Industries Ltd,CLSA (MAURITIUS) LIMITED,SELL,127000,237.54,-
28-MAR-2008,KOHINOOR,Kohinoor Foods Limited,ALOSHA VANIJYA PVT LTD,SELL,144590,107.66,-
28-MAR-2008,MADHAV,Madhav Marbles and Granit,MARIGOLD INVESTRADE P. LTD.,SELL,50000,42.72,-
28-MAR-2008,MAGMA,Magma Shrachi Finance Ltd,SONATA INVESTMENTS LIMITED,SELL,1600000,350.00,-
28-MAR-2008,MIRCELECTR,Mirc Electronics Ltd.,BSMA LIMITED,SELL,730000,17.06,-
SBI, HDIL, ICICI Bank April 2008 futures at premium
Turnover in F&O segment declines
Nifty April 2008 futures were at 4986.70, at a premium of 44.70 points as compared to spot closing of 4942.
The NSE's futures & options (F&O) segment turnover was Rs 49,087.03 crore, which was lower than Rs 64,308.86 crore on Thursday, 27 March 2008.
State Bank of India (SBI) April 2008 futures were at premium at 1688.10 compared to the spot closing of 1677.80.
Housing Development & Infrastructure (HDIL) April 2008 futures were at premium at 726.30 compared to the spot closing of 720.65.
ICICI Bank April 2008 futures were at premium at 839.80 compared to the spot closing of 835.50.
In the cash market, the S&P CNX Nifty gained 111.75 points or 2.31% at 4942.
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