Monday, September 22, 2008
Chinese Banks exposure to Lehman
Two more Chinese banks have reported holding Lehman Brothers bonds, raising total Lehman debt disclosed by Chinese lenders to USD 634.8 million.
China Construction Bank Corp, the country's second-largest commercial lender by assets, said in a statement issued through the Hong Kong Stock Exchange that it holds USD 191.4 million in Lehman bonds. That was the biggest exposure reported so far for a Chinese bank to the failed Wall Street house.
A midsize lender, China CITIC Bank Corp said in a separate statement it has USD 76 million in Lehman bonds.
Analysts say the impact of Lehman's failure on Chinese banks should be limited.
Other state-owned banks have reported holding Lehman debt but say it accounts for only a tiny fraction of their assets.
China's biggest lender, Industrial & Commercial Bank of China Ltd., says it owns Lehman bonds worth USD 151.8 million.
Construction Bank's Lehman holdings are 0.29 percent of net assets and should have no effect on its financial position, the bank said. It said the bank would make allowances for possible losses.
Bank of China Ltd., the country's No. 3 lender by assets, says it owns Lehman bonds worth USD 75.6 million. Bank of Communications Ltd, the country's fifth-largest commercial lender, says it has USD 70 million in Lehman bonds.
Another midsize lender, China Merchants Bank Ltd., says its Lehman bonds are valued at USD 70 million.
Last week, China's Hua An Fund Management Co, warned of possible heavy losses due to Lehman's failure. Hua An said its International Balanced Fund is invested in notes provided by Lehman that are linked to stocks, bonds and other assets.
Turnover drops
Nifty September 2008 futures at premium
Nifty September 2008 futures were at 4230.40, at a premium of 7.35 points as compared to spot closing of 4223.05. NSE's futures & options (F&O) segment turnover was Rs 58,188.03 crore, which was lower than Rs 73,792.36 crore on Friday, 19 September 2008.
Tata Steel September 2008 futures were at premium at 495.65 compared to the spot closing of 494.
DLF September 2008 futures were at premium at 421.85 compared to the spot closing of 421.25.
Reliance Petroleum September 2008 futures were near spot price at 151.80 compared to the spot closing of 152.05.
In the cash market, the S&P CNX Nifty lost 22.20 points or 0.52% at 4223.05.
Major indices register handsome gains in Asia
Overall session ends mixed though as SENSEX and Strait Times end in red
The Asian equity markets ended on a strong note today with the major benchmark indices in the region closing with handsome gains though the region failed to witness an across the board rally. The overall sentiment remained positive, tracking gains in Wall Street on Friday after the US government moved toward instituting a $700 billion program to buy up banks’ illiquid mortgage-related assets, shoring up confidence in the global financial system. US Federal Reserve also announced today that Goldman Sachs and Morgan Stanley would become bank holding companies, a new status that will allow them to stay in business and protect customer accounts
China’s securities regulator announced that listed firms would no longer need to obtain its prior approval for share buybacks. This helped the Shanghai stock index further as the index extended Friday’s gains to finish the session with a sharp 7.8% gain. Broad based bottom fishing in banks and financials and properties on the new stimulus measures the securities regulator ushered in over the weekend to stabilize the stock markets proved key. Premier Wen Jiabao’s pledge on Saturday to maintain the stability of the stock markets and the financial regime at large also ensured that the early gained were extended well into the session. The Shanghai Composite Index ended up 161.31 points, or 7.8% to 2,236.41.
In Japan, the Nikkei 225 Stock Average was higher 169.73 points, or 1.4%, to 12,090.59 while the broader Topix was 19.57 points, or 1.7%, higher to 1,169. The Ministry of Economy, Trade and Industry said that an index measuring industrial activity in Japan increased 0.8% in July 2008 compared to the previous month.
However, the other indices in the region showed a mixed pattern. Hang Seng ended at 19,632.20, up 304.47 points or 1.58% but the rest of the markets lagged behind. The Jakarta Composite Index ended at 1897.34, up 5.61 points or 0.30% while the KLSE composite added 2.92 points or 0.28% to close at 1028.62 points, giving away the intraday gains. Indian markets also gave away the initial gains and ended down 47.36 points or 0.34% at 13994.96 levels. Strait times also ended in red, paring about half a percent.
Soaring commodity prices seem to have come back in the contention as yet another worrying factor for the emerging economies in the region with light, sweet crude oil prices hitting a high of $107.80 - recording a gain of more than three dollars in the session. Copper prices also scaled up and with US dollar sliding sharply to two week low against the Euro, traders began to factor in a real possibility of commodity prices staying higher in near term.
BSE Bulk Deals to Watch - Sep 22 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
22/9/2008 531223 ANJANI SYNTH NARENDRE BAHUVA B 92598 43.35
22/9/2008 531223 ANJANI SYNTH NARENDRA BAHUVA S 92598 46.60
22/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD B 469842 232.47
22/9/2008 533016 AUSTRAL COKE AAKARSHAN TRACON PRIVATE LIMIT B 259804 230.62
22/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD S 469842 232.41
22/9/2008 533016 AUSTRAL COKE AAP INVESTMENTS S 259804 230.62
22/9/2008 531682 CAT TECHNOL ANGEL INFIN PRIVATE LIMITED B 185002 5.61
22/9/2008 531682 CAT TECHNOL JMP SECURITIES PVT. LTD. B 468445 5.61
22/9/2008 531682 CAT TECHNOL S V ENTERPRISES B 3475954 5.59
22/9/2008 531682 CAT TECHNOL YUVAK SHARE TRADING PVT.LTD. B 700031 5.61
22/9/2008 531682 CAT TECHNOL ANGEL INFIN PRIVATE LIMITED S 770007 5.60
22/9/2008 531682 CAT TECHNOL PRABHUDAS LILLADHER PVT. LTD. S 195019 5.59
22/9/2008 531682 CAT TECHNOL NARESH CHAND JAIN S 180000 5.55
22/9/2008 531682 CAT TECHNOL JMP SECURITIES PVT. LTD. S 635003 5.59
22/9/2008 531682 CAT TECHNOL S V ENTERPRISES S 1850000 5.61
22/9/2008 531682 CAT TECHNOL YUVAK SHARE TRADING PVT.LTD. S 1250031 5.59
22/9/2008 505426 DAGGER FORST GODAVARI CORPORATIONS PVT LTD B 375842 17.75
22/9/2008 505426 DAGGER FORST BIRLA BOMBAY PVT LTD S 375842 17.75
22/9/2008 513059 G.S. AUTO HARDIK M MITHANI B 61216 89.98
22/9/2008 513059 G.S. AUTO YUVAK SHARE TRADING PVT.LTD. B 52216 89.98
22/9/2008 513059 G.S. AUTO RAJESH GUPTA S 18923 92.01
22/9/2008 513059 G.S. AUTO YUVAK SHARE TRADING PVT.LTD. S 52116 90.00
22/9/2008 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH B 130000 123.13
22/9/2008 531602 KOFF BR PICT PRAVIN D GALA S 59723 40.13
22/9/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 56999 41.01
22/9/2008 531366 KOHINOOR BRO S V ENTERPRISES B 1490802 6.91
22/9/2008 531366 KOHINOOR BRO S V ENTERPRISES S 1790802 6.77
22/9/2008 531996 ODYSSEY CORP MARIAM EBRAHIM GHEEWALA B 26000 37.60
22/9/2008 532606 PAREKH ALUM PIONEER NIRMAN INDIA PRIVATE L B 99825 119.82
22/9/2008 532606 PAREKH ALUM RAJASTHAN GLOBAL SECURITIES LTD S 86546 119.90
22/9/2008 522257 RAJOO ENGIN. HARDIK M MITHANI B 19396 70.43
22/9/2008 502587 RAMA PUL PAP MUKESH KUMAR SINGHAL S 70000 12.70
22/9/2008 522207 RASAND ENG I VINCENT COMMERCIAL CO. LTD. B 50000 54.75
22/9/2008 522207 RASAND ENG I MACKERTICH CONSULTANCY SERVICESPVTLTD S 50000 54.75
22/9/2008 526365 SHYAM STAR MANUBHAI JIVANI S 35000 137.67
22/9/2008 532691 TULIP TELE DEUTSCHE SECURITIES MAURITIUS LIMITED S 153748 950.00
22/9/2008 532360 VINTAGE CARD SETU SECURITIES PVT LTD B 7998 59.60
22/9/2008 532360 VINTAGE CARD TEJRAJJAIN B 6800 59.60
22/9/2008 532360 VINTAGE CARD YUVAK SHARE TRADING PVT.LTD. B 16128 59.60
22/9/2008 532360 VINTAGE CARD TEJRAJJAIN S 6800 59.60
22/9/2008 532360 VINTAGE CARD YUVAK SHARE TRADING PVT.LTD. S 7402 59.63
22/9/2008 533011 VISHAL INFO OPG SECURITIES P LTD B 98324 333.66
22/9/2008 533011 VISHAL INFO OPG SECURITIES P LTD S 98324 333.89
NSE Bulk Deals to Watch - Sep 22 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
22-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,189510,233.84,-
22-SEP-2008,DHAMPURSUG,DHAMPUR SUGAR MILLS LTD,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,BUY,2138960,55.40,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,ADITI FINLEASE PVT. LTD.,BUY,7221,58.85,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,DYNAMIC STCOK BROKING (I) PVT LTD,BUY,18696,58.91,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,PURTI ATUL,BUY,5733,59.08,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,BUY,20210,58.82,-
22-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,189510,233.92,-
22-SEP-2008,DHAMPURSUG,DHAMPUR SUGAR MILLS LTD,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,1781741,55.40,-
22-SEP-2008,DHAMPURSUG,DHAMPUR SUGAR MILLS LTD,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,356259,55.40,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,ADITI FINLEASE PVT. LTD.,SELL,6847,58.98,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,DYNAMIC STCOK BROKING (I) PVT LTD,SELL,18696,58.83,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,PURTI ATUL,SELL,5733,58.80,-
22-SEP-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,SELL,20210,59.16,-
Post Session Commentary - Sep 22 2008
The Indian markets closed the choppy session on a negative note after a firm starts to the session. The profit booking took a lead during the session that led the investors to take calculative approach to book their positions. The domestic market opened with a bang tracking the US government’s $700bn proposed plan to deal with the World’s financial crisis, which would rescue banks from billions of dollars debts. As per this proposal, the federal government would buy up as much as $700bn of mortgage assets. The US Federal Reserve on Sunday announced that US investment banks Goldman Sachs and Morgan Stanley will become bank holding companies and will receive new US government credit. From the sectoral front, Capital Goods index faced heavy selling pressures across the counters to close with losses of more than 2%. On the other hand most buying was witnessed from the Metal and FMCG baskets. The market breadth was negative as 1354 stocks closed in red while 1234 stocks closed in green and 78 stocks remained unchanged.
The BSE Sensex closed lower by 47.36 points at 13,994.96 and NSE Nifty fell by 10.9 points to close at 4,234.35. The BSE Mid Caps and Small Caps closed lower by 7.82 points and 21.88 points at 5,220.96 and 6,194.44. The BSE Sensex touched intraday high of 14,221.04 and intraday low of 13,917.48.
Losers from the BSE are Suzlon Energy 6.78%, Punj Lloyd 5.62%, Bombay Dying 5.55%, BOB 5.20%, Lano Infra 4.94%, India Infoline 4.76%, Satyam Computers 4.69%, Oracle Fin 4.24%.
Gainers from the BSE are GMDC 14.08%, Sesa Goa 13.11%, Sintex Inds 10.62%, Gujarat NRE Coke 7.23%, Phoenix Mill 6.53%, Gujarat Petronet 5.47%, NMDC 5% and Colgate Palmolive 4.67%.
The BSE Oil & Gas index ended lower by 69.77 points at 9,398.65 as Indian Oil (3.65%), BPCL (2.59%), ABN Offshore (2.34%), HPCL (1.83%), ONGC (1.35%) and Gail India (0.18%) ended in negative territory.
The BSE Capital Goods index closed down by 262.98 points at 11,477.09 Losers are Punj Lloyd (5.62%), Gammon India (3.72%), AIA Engineering (3.52%), Siemens (3.37%), L&T (2.60%) and Elecon Engineering (2.08%).
The BSE Metal index advanced 99.35 points to close at 10,132.94. Major gainers are Sesa Goa (13.11%), Gujarat NRE (7.23%), NMDC (5%), Tata Steel (2.95%), Jindal Steel (1.84%),and JSEW Steel (0.19%).
The BSE Bank index closed lower by 7.59 points at 7,102.29. Losers are Bank of Baroda (5.20%), Indus Ind Bank (3.91%), Yes Bank (3.06%), Indian Overseas Bank (2.81%), Canara Bank (2.69%) and Kotak Bank (1.73%).
The BSE Reality index slipped by 7.14 points to close at 4,095.50. As Sobha Developres (6.17%), Ansal Infra (5.73%), Mahindralife 4.94%, Omaxe 3.21%, Orbitco 1.72%, Parsvnath 1.30%.
Profit booking, rising oil price pull market down
Profit booking after a solid surge in the previous session pulled the market lower today, 22 September 2008. A rise in oil prices also weighed on market sentiments. The 30-share BSE Sensex ended 47.36 points lower. All the sectoral indices on BSE, barring FMCG and metal indices, were negative. Capital goods stocks were battered.
At 16:30 IST, the crude oil was trading at $107.40 on the New York Mercantile Exchange (NYMEX). Oil extended last week's massive gains on hopes the US government's rescue plan for the financial sector would restore stability in the financial system and support global energy
European markets, which opened after Indian market, slipped after a minor recovery earlier in the day. Key indices in UK, France, and Germany were down 0.12% to 0.39%.
Asian stocks rose after the US government proposed a $700 billion plan to solve the world financial crisis by rescuing banks from billions of dollars in risky mortgage debt. Key benchmark indices in Hong Kong, Japan, China, South Korea, and Taiwan were up by between 0.31% to 7.77%. However, Singapore’s Straits Times was down 0.58%.
However, uncertainty about the workings of the government's $700 billion bank bailout drove US stock index futures lower, suggesting the US market may open lower today, 22 September 2008. The S&P 500 futures were down 10.70 points, Nasdaq 100 futures were down 7 points and the Dow futures were down 99 points. The drop in stock index futures came on the heels of Friday's (19 September 2008) massive rally in stocks worldwide -- the largest ever one-day advance as measured by market value.
According to the US administration's proposal, the federal government would buy up as much as $700 billion of illiquid mortgage assets at a deep discount from banks. The Treasury Department would run the program directly, unlike the savings and loan crisis of the 1990s when Congress created the Resolution Trust Company to spearhead a financial bailout. The $700 billion plan, the most sweeping intervention in the financial markets since the Great Depression, is aimed at stemming the credit crisis roiling Wall Street and threatening the global markets.
The BSE 30-share Sensex fell 47.36 points or 0.34% to 13,994.96. The Sensex rose 178.72 points at day’s high of 14,221.04, hit in early trade. The index shed 124.84 points at the day's low of 13,917.48, hit in mid-afternoon trade.
The S&P CNX Nifty fell 22.20 points or 0.52% to 4223.05. Nifty September 2008 futures were at 4230.40, at a premium of 7.35 points as compared to spot closing.
The BSE Mid-Cap index outperformed the Sensex, falling 0.15% at 5,220.96. The BSE Small-Cap index underperformed the Sensex, falling 0.35% at 6,194.11.
The market breadth was negative on BSE with 1234 shares advancing as compared to 1354 that declined. 78 shares remained unchanged.
As per provisional data released by the stock exchanges after trading hours, foreign funds today, 22 September 2008, bought shares worth a net Rs 138.21 crore. Domestic funds sold shares worth a net Rs 206.12 crore.
BSE clocked a turnover of Rs 4871 crore compared with Rs 6,226.77 on Friday, 19 September 2008. NSE's futures & options (F&O) segment turnover was Rs 58188.03 crore, which was lower than Rs 73972.36 crore on Friday, 19 September 2008.
India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) declined 0.72% at Rs 2037.15. The stock accounts for 15.09% of Sensex's weightage.
The company began production of crude oil from its KG-D6 block of the Krishna Godavari basin on 17 September 2008 and the firm plans to commercially release gas from the well by January 2009. The company aims to supply at least 40% of the nation's requirement of oil and gas and become one of the world's largest deep-water developers. According to reports, the company can technically sell its Krishna-Godavari (KG) basin gas at a price higher than the government-discovered price of $4.20 per million British thermal units (mBtu).
India's largest aluminium producer Hindalco Industries fell 2.66% at 109.85. The company's Rs 5050 crore rights share offering opened for subscription today, 22 September 2008. The sale in a ratio of three shares for every seven held at Rs 96 a share will close on 10 October 2008. The company aims to use the funds to repay a bridge loan it had taken to buy Canada's Novelis in 2007.
Software firms fell on lingering concerns about the economic prospects for the United States, their biggest export market. Satyam Computer (down 4.69% to Rs 352.75), and Wipro (down 0.60% to Rs 414.35), slipped. However, India’s second largest software exporter by sales Infosys Technologies rose 0.25% at Rs 1627.85.
Some of the banking pivotals rose. India’s largest private sector bank by market capitalisation ICICI Bank rose 1.01% to Rs 634.45. India’s largest commercial bank State Bank of India rose 0.13% to Rs 1,566.70. However, HDFC Bank fell 0.12% to Rs 1,297.60. The BSE Bankex outperformed the Sensex, falling 0.11% to 7,102.29.
FMCG shares rose on defensive buying. Colgate Palmolive (up 4.67% at Rs 396.95), Godrej Consumer Products (up 2.28% at Rs 118.75), ITC (up 2.12% at Rs 195.10), and Hindustan Unilever (up 1.69% at Rs 249.30), moved higher. The BSE FMCG index outperformed the Sensex, rising 1.43% to 2,206.42.
Metal shares rose. Sesa Goa (up 13.11% at Rs 123.40), Gujarat NRE Coke (up 7.23% at Rs 70.45), and NMDC (up 5% at Rs 228.90), rose. The BSE Metal index outperformed the Sensex, rising 0.99% at 10,132.94.
World's sixth largest steel maker Tata Steel rose 2.95% at 493.75. As per reports, Tata Steel, through its indirect subsidiary TS Global Minerals Holdings, has purchased a 7.3% stake in Riversdale, which has a coking coal project in Mozambique.
Sponge iron producer Jindal Steel and Power rose 1.84% to Rs 1,503.55 on report the company plans to float a wholly-owned subsidiary which would look after the domestic and overseas oil and natural gas operations of the company.
Capital good shares tumbled. Suzlon Energy (down 6.78% to Rs 198.70), Punj Lloyd (down 5.62% at Rs 293.90), Gammon India (down 3.72% at Rs 165.65), and Bharat Heavy Electricals (down 1.57% at Rs 1,683.90), declined. The BSE Capital Goods index underperformed the Sensex, falling 2.24% to 11,477.09.
India's largest engineering and construction firm by revenue Larsen & Toubro fell 2.60% at Rs 2,576.60 on reports company is planning to sell as many as four business units that have not registered significant growth.
State-run oil firms declined on rise in oil price. Indian Oil Corporation (down 3.65% at Rs 382.40), BPCL (down 2.59% at Rs 337.10), and HPCL (down 1.83% at Rs 230.60), declined. The BSE Oil & Gas index outperformed the Sensex, falling 0.74% to 9,398.65.
India's largest state-run oil explorer Oil & Natural Gas Corporation (ONGC) dropped 1.35% to Rs 1,057.65. As per reports, ONGC Videsh (OVL), the overseas investment arm of ONGC, may take a $1 billion short-term loan to partly fund the $2.8 billion acquisition of London Stock Exchange-listed Imperial Energy.
Telecom solutions provider Tulip Telecom surged 13.36% to Rs 1,053.75 after the company bagged a project worth Rs 95 crore for supply and installation of network equipment across Madhya Pradesh.
Offshore services provider Dolphin Offshore Enterprises India surged 3.81% to Rs 252.05 after the company won two separate contracts worth $16 million for charter hire of its diving support vessels.
Automobile components maker Amtek India surged 3.88% to Rs 73.65 on reports private equity firm Chrys Capital has acquired additional 4% stake in the company.
Reliance Industries clocked a highest turnover of Rs 447.20 crore on BSE. Reliance Capital (Rs 353.15 crore), ICICI Bank (Rs 253.32 crore), Bharti Airtel (Rs 221.81 crore), and Sesa Goa (Rs 165.49 crore), were the other turnover toppers on BSE in that order.
Reliance Natural Resources reported a highest volume of 1.49 crore shares on BSE. Sesa Goa (1.38 crore shares), IFCI (86.76 lakh shares), Jaiprakash Associates (73.01 lakh shares), and Idea Cellular (71.33 lakh shares), were the other volume toppers on BSE in that order.
Back home, the September 2008 contracts expire on Thursday, 25 September 2008. Roll over in Nifty futures till Friday, 19 September 2008, was about 18% whereas Mini Nifty has seen rollover of about 31% of positions.
Stocks across the global had risen sharply late last week after regulators and central banks across the globe came to the rescue of the battered markets. The BSE 30-share Sensex had risen 726.72 points or 5.46% to 14,042.32 on Friday, 19 September 2008
The barometer index is down 6292.03 points or 31.01% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7211.81 points or 34% below its all-time high of 21,206.77 struck on 10 January 2008.
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Market may extend gains
The market may edge higher extending Friday’s (19 September 2008) solid surge on hopes for the $700 billion bank bailout proposed by the United States over the weekend to tackle the US financial crisis. Stocks rose in Asia today, 22 September 2008, boosted by the US package. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan were up by between 0.24% to 6.4%.
According to the US administration's proposal, the federal government would buy up as much as $700 billion of illiquid mortgage assets at a deep discount from banks. The Treasury Department would run the program directly, unlike the savings and loan crisis of the 1990s when Congress created the Resolution Trust Company to spearhead a financial bailout. The $700 billion plan, the most sweeping intervention in the financial markets since the Great Depression, is aimed at stemming the credit crisis roiling Wall Street and threatening the global markets.
Stocks across the global had risen sharply late last week after regulators and central banks across the globe came to the rescue of the battered markets. On Thursday, 28 September 2008, major central banks around the world announced a series of measures to improve dollar liquidity in money markets. UK on Friday, 19 September 2008, announced a four-month ban on short-selling of financial stocks. In US, the Securities and Exchange Commission announced a temporary ban on short selling of 799 financial stocks effective Friday, 19 September 2008.
A deep financial crisis engulfed the global markets last week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse.
As per provisional data released by the stock exchanges, foreign funds bought shares worth a net Rs 1016.18 crore on Friday, 19 September 2008. Domestic funds bought shares worth a net Rs 43.91 crore. The BSE 30-share Sensex jumped 726.72 points or 5.46% to 14,042.32 on Friday, 19 September 2008.
Foreign funds pressed sales worth a net Rs 7594.40 crore this month (till 18 September 2008). Their cumulative outflow in calendar 2008 reached Rs 36108.20 crore.
In the near term, the domestic bourses will also eye developments on the Indo-US nuclear deal front. US Undersecretary of State William Burns on Thursday, 18 September 2008, urged members of the US Congress to approve a US-India nuclear cooperation agreement before the House and Senate adjourn ahead of November 2008 elections. However, some US lawmakers have strong concerns about the pact, chiefly that the extra fuel the accord provides could boost India's nuclear arsenal by freeing up its domestic uranium for weapons.
Stocks On Wall Street Ends Historic Week With Solid Gains
Fed Measures To Inject Liquidity In The Markets Helped To Restore Gaines
It was week of roller coaster ride for the investors on the Wall Street which took him on both high and low. Stocks on Wall Street rocketed higher on Friday, with the major stock indexes wiping out a week of shattering losses, as investors on Wall Street cheered the government's moves to kick-start credit markets as well as plans to move against short sellers.
The major averages moved to the upside in the final hour of trading, but they ended the day well off of their session highs. The Dow sealed the week by posting triple digit gain on Friday marking a perfect end to a volatile week. The Dow closed up 368.75 points or 3.4% at 11,388.44, the Nasdaq closed up 74.80 points or 3.4% at 2,273.90 and the S&P 500 closed up 48.56 points or 4% at 1,255.07.
Following the collapse of Lehman Brothers and the government's intervention into the AIG debacle earlier in the week, federal agencies stepped up to restore investor confidence.
Just one day ago central banks injected liquidity into global financial markets to help restore their functionality. Now, the Fed is looking to create an entity that will help financial firms shed their illiquid and distressed assets, many of which remain linked to risky subprime mortgages.
To move in that direction, Treasury Secretary Henry Paulson outlined his department's plan to establish a trust fund to absorb banks' bad debts, stating that, despite the cost taxpayers will have to bear for the fund, the alternative would have been far worse. Paulson said the most recent proposal would address the "root cause" of the financial crisis: mortgage-backed securities stemming from the housing crisis.
Meanwhile, the Treasury Department also established a temporary guaranty program for the money market fund industry, while the Federal Reserve Board announced two new enhancements to existing programs to promote liquidity.
The first initiative extends the realm of non-recourse loans at the primary credit rate to U.S. depository institutions and bank holding companies. The second initiative will allow the Federal Reserve to buy federal agency discount notes from primary dealers. These notes are short-term debt obligations issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Markets were also encouraged by a ruling from the Securities Exchange Commission that put a temporary ban on short-selling certain financial stocks. Though the plan aims to protect certain securities and restore confidence, it has come under sharp criticism from market makers. Late in the session the Securities Exchange Commission staff announced it wants to implement certain exemptions to the rule.
The announcements helped financial stocks most. The sector closed the session 11.1% higher, extending the prior session's 12% advance. The financial sector concluded the week with a 7.4% gain.
Investment banks and brokers registered the largest gain in the sector gaining by 20.8%. The group rebounded as Morgan Stanley posted a 21% advance. Shares of Morgan Stanley hit a multiyear low yesterday amid ongoing fear of financial fallout and uncertainty surrounding the firm's future.
The firm continues to seek a strategic alliance to help it move forward. Reports continue to indicate its talks are most intimate with Wachovia Bank and the state-run China Investment Corporation.
Taking the weekly review where the stocks saw considerable weakness early in the week, the major averages rebounded in the last two days to close modestly higher. The Dow ended the week up 0.3%, while the Nasdaq and the S&P 500 posted weekly gains of 0.6% and 0.3%, respectively.
In other region markets, the stock markets across the Asian region rallied on Friday, mirroring Wall Street's strong gains overnight. Chinese stocks in Shanghai and Hong Kong surged more than 9%
The major European markets turned in standout performances as well, with the U.K’s FTSE 100 Index advancing 8.8%.
In the commodity trading, the crude oil surged again in afternoon trading on Friday and closed above $104 a barrel. Light sweet crude for October delivery ended at $104.55, up $6.67 on the session. Earlier, crude hit as high as $105.25.
The rebound more than erased the sharp drop towards $90 a barrel that crude saw earlier in the week. Crude climbed Friday amid government moves that pushed U.S. stocks sharply higher and halted fears of lower energy demand.
Crude oil closed also soared above $102 a barrel on Thursday but then dropped back below $100. The retreat came after the Energy Information Administration reported natural gas inventories were up 67 billion cubic feet in the week ended Sept. 12, which was more than expected.
Oil surged on Wednesday as EIA data that showed a fourth straight drop in weekly inventories. Crude oil inventories decreased by 6.3 million barrels in the week ended Sept. 12. Meanwhile, motor gasoline inventories decreased by 3.3 million barrels last week.
Crude oil dropped sharply on Monday and Tuesday and fell as low as $90.55. On Tuesday, Goldman Sachs cut its three-month crude oil to $115 a barrel, down from $149 and dropped its six-month outlook from $142 to $125. The firm also lowered its 2009 average price forecast to $123, down from $148. Crude oil plunged more than 5 percent on Monday to move below the key $100 level.
Looking ahead for the week, the Department of Commerce will releases its report on durable good orders report as well at its final reading on second quarter Gross Domestic Product. A weekly report on initial jobless claims, a report on consumer sentiment and a report on existing home sales will also give us an idea over the health of the economy.
Several Federal Reserve members will also be making appearances next week, including Fed Chairman Ben Bernanke, who will be testifying on the economy before Congress on Wednesday. Dallas Fed Bank President Richard Fisher, Richmond Fed Bank President Jeffrey Lacker, Chicago Fed Bank President Charles Evans, and St. Louis Fed Bank President James Bullard will be speaking throughout the week as well.
Daily Call - Sept 22 2008
In these days of Nifty being quoted on the Singapore exchange, there is hardly any art left in terms of forecasting how our markets would open. Reliance did not tell anything new on Sunday. It confirmed markets fears that commercial gas production would only happen post December.
The Congress is likely to okay the $ 700 billion package for the capital markets, but may want something for homeowners in distress and another dose of economic stimulant to the tax payers. We have the Nifty resistance at 4550. But that seems to be a far cry. Upwards of 4350, it makes sense to book your profits. The alternative is to keep a trailing stop loss.
Morning Call - Sep 22 2008
Market Grape Wine :
In House:
Nifty at a support of 4155 and 4039 with resistance at 4320 and 4385 levels.
Cash: Buy DLF above 435 target 460with S/L 427.
Cash: Buy SATYAM COMP above 373 targets 395 with S/L 366.
Future: Buy REL CAPITAL above 1273 target 1310 with S/L 1255.
Future: Buy BHEL above 1709 target 1760 with S/L 1685.
Out House:
Markets at a support of 13786 & 13542 and resistance at 14235 & 14352 levels .
Buy : RIL & LNT
Buy : Educomp
Buy : SBIN & IciciBank
Buy : Kohinoor & Coreproject
Buy : Sail at dips
Buy : RIL & RelCap
Buy : Suzlon
Buy : GtOffshore & Aban
Dark Horse : LNT , Bhel , RIL , RelCap , Aban , Core & RPL
Pre Session Commentary - Sep 22 2008
The Indian Market is expected to have positive opening due to favoring cues from the global markets. On Friday, the Indian markets took a big leap and rallied throughout the trading session on the back of US treasury department step to come out with a plan to create a Resolution Trust-like operation to calm the economic turmoil and the financial crisis. This gave a boost to the sentiments of the investors across the globe that led to sustained buying across then sectoral indices. BSE Sensex returned back to the 14,000 level and NSE Nifty crossed 4,200 mark. The bulls become more powerful during final hours of trading as markets closed with gains of more than 5%. From the sectoral front, all indices ended with gains and among those reality stocks outperformed the benchmark index as closed with gain of more than 7%. Along with that, Oil & Gas, Capital Goods, Bank, Metal and IT stocks witnessed healthy buying from these baskets. We expect that the market may extend its gains during the trading session.
The BSE Sensex closed higher by 726.72 points at 14,042.32 and NSE Nifty ended up by 207.10 points at 4,245.25. The BSE Mid Caps and Small Caps closed with gains of 149.65 points at 5,228.78 and by 140.56 points at 6,215.99. The BSE Sensex touched intraday high of 14,097.44 and intraday low of 13,674.96.
On Friday, the US market surged to close with handsome gains on the back of on news of the rescue plan, capping one of the most tumultuous weeks in history for global financial markets and also the move by US Treasury to ask Congress for authority to spend 700 bn dollars to buy mortgage related assets from financial institutions. The US Federal Reserve on Sunday announced that US investment banks Goldman Sachs and Morgan Stanley will become bank holding companies and will receive new US government credit.
The Dow Jones Industrial Average (DJIA) closed up by 368.75 points at 11,388.44 followed by the NASDAQ index closed higher by 74.80 points at 2,273.90 and the S&P 500 (SPX) grew by 48.57 points to close at 1,255.08.
Indian ADRs ended with handsome gains. In technology sector, Satyam closed up by (13.04%) followed by Wipro by (11.18%), Infosys by (10.25%) and Patni Computers by 4.82%. In banking sector ICICI Bank and HDFC Bank grew by (7.61%) and (5.96%). In telecommunication sector, Tata Communication advanced by (0.24%). Sterlite industries advanced by (4.77%).
Today the major stock markets in Asia are trading higher. Hang Seng index is trading up by 15 points at 19,343 along with Japan’s Nikkei trading up by 236 points at 12,157, Taiwan Weighted trading at 6,070 up by 100 points. Singapore''''s Straits up by 4 points at 2,555.
The FIIs on Friday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs7,146.70 Crore and gross debt purchased stood at Rs66.40 Crore while the gross equity sold stood at Rs7,745.40 Crore and gross debt sold stood at Rs10 Crore. Therefore, the net investment of equity reported was (Rs598.70) Crore and net debt was Rs56.40 Crore.
On Friday, the Indian rupee appreciated by 58 paise and reached the 46 level on positive sentiments as the domestic stock market surged. The rupee opened stronger at 46.25 as the domestic equities market and those in South East Asia opened higher. The rupee then gained following the soar in the equities to touch the day''s high of 45.75. It closed at 45.83, against the previous close of 46.41/42. In the forward premia market, the six-month closed at 1.38 per cent and the 12-month ended at 1.15 per cent.
Today, Nifty has support at 4,131 and resistance at 4,362 and BSE Sensex has support at 13,623 and resistance at 14,493.
Market may advance further on firm global cues
After crossing the psychological mark of 14,000 on Friday the market is likely to move forward taking cues from firm Asian markets in current trades and overnight gains in US markets. The gradual increase in fund inflows in domestic equities and presence of strong bullish sentiment also help the market to remain firm. However, being the last week of September derivative expiry series may keep the market volatile in the later part of the day. Among the local indices, the Nifty could test 4,300 on the upside and may slip to 4,200 on the downside. The Sensex has a likely support at 13,900 and may face resistance at 14,200.
Major US indices registered significant gains on Friday, with the Dow Jones flared up by 369 points at 11,388, the Nasdaq moved up by 75 points to close at 2274.
Except MTNL all the Indian ADRs traded firm on the US bourses. Satyam Computer led the pack with gains of nearly 13.04% followed by Infosys & Wipro gained above 10%, ICICI Bank, Rediff, HDFC Bank and Patni Computer jumped over 5-7% each. Among other gainers Dr Reddy's Lab,Tata motors and VSNL added around 0.50% each.
Crude oil prices advanced further sharply, with the Nymex light crude oil for October delivery gaining by $6.67 to close at $104.55 a barrel. In the commodity space, the Comex gold for December delivery lost $32.30 to settle at $864.70 an ounce.
Market likely to open up
Indian equity market is likely to advance on back of positive global cues and renewed FII interest in Indian equities.
The market closed on cheerful note on Friday. The overall market breadth was positive, around 69.9% of shares advanced on BSE and 79.7% of shares advanced on NSE. Out of the total 2,700 stocks traded at BSE, 1,888 advanced, 740 declined while 72 remained unchanged. Sensex crossed the mark of 14,000 on renewed buying interest seen in blue chip stocks. Realty, IT, power and banking stocks led the rally. Midcap and smallcap stocks also rose throughout the day.
The Sensex ended the day with a gain of 726.72 points, or 5.46% at 14,042.32 after touching a high of 14,097.44 and a low of 13,674.96. The broad-based NSE Nifty climbed 207.10 points, or 5.13% at 4,245.25 after hitting a high of 4,262.65 and a low of 4,040.80.
Technical analyst, Vishwas Agarwal while commenting on the market said `` On the BSE, above 13,786 the market is safe for 14,150 and 14,555 levels, and maximum for 14,786 level. I had said after Nifty futures touches 4,009, we would see panic short covering, and our target for Friday, 4,286 was achieved``.
Agarwal added, ``Next week, the nuclear deal is an important event and on this Sunday Mukesh Ambani, Chairman of Reliance Industries will announce the production of oil and gas which will be another big event. The above mentioned two events will help market remain strong.``
US Stocks rallied on Friday, with the Dow rising 369 points, due to the government``s plan to help rescue banks from mortgage debt. The Dow Jones industrial average added nearly 369 points, or 3.3%.
Asian stocks gained for the second day on Monday, September 22, buoyed by financial shares, after the U.S. government planned measures to buy banks` bad debts, easing concern of mortgage losses.
Japanese benchmark index Nikkei rose 267.54 points, or 2.24%, to trade at 12,188.40. Hong Kong`s Hang Seng index rose 541.29 points, or 2.80%, to trade at 19,869.02. China`s Shanghai Composite gained 158.28 points, or 7.63%, to trade at 2,233.37.
Oil prices escalated more than USD 6 a barrel on Friday, September 19, as hope grew on Wall Street that a government bailout could help ease the credit crisis encouraging investors to re-enter the markets. Light, sweet crude for October delivery rose USD 6.67 to settle at USD 104.55 a barrel on the New York Mercantile Exchange (NYMEX).
Gasoline futures rose 11.73 cents to USD 2.5997 a gallon. Heating oil futures rose 11.54 cents to settle at USD 2.8978 a gallon at the NYMEX. In London, October Brent crude futures rose USD 4.42 to settle at USD 99.61 a barrel on the ICE Futures exchange. Natural gas for October delivery fell 7.8 cents to USD 7.848 per 1,000 cubic feet.
Via IRIS
Trading Calls - Sep 22 2008
Nifty (4245) Sup 4175 Res 4320
Buy NTPC (183) SL 180
Target 190, 192
Buy L&T (2644) SL 2620
Target 2685, 2695
Buy RIL (2055) SL 2030
Target 2105, 2115
Buy ITC (191) SL 188
Target 197, 199
Sell Wipro (417) SL 422
Target 407, 405
Wild swings...be responsive
It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
Welcome to another week of wild swings. Given the strong rebound by indices on Friday, the hope is that the momentum continues at least at the open. A possible softening at higher levels is the most likely scenario. With the sun outage and F&O expiry this week, be responsive to the changing market conditions. If you can’t understand what’s happening around you, make sure you protect your capital at least.
Indicators from the derivative side of the market are showing positive bias in the short-term. On Friday, the open interest in September futures increased while the premium on these contracts too rose simultaneously. Also, call options saw a lot of unwinding, a sign of bullish things, ahead of Thursday's F&O expiry. If we take this with the fact that short selling has been banned temporarily in the US and the UK, the bears may come pressure if the global rally manages to hold up. In that case, they will have to cover their shorts here as well, which could lead the main indices to the top end of the projected range of 3800-4650. Overall, the sentiment will be driven by the global trend, especially in the US. Trading in such highly volatile condition is fraught with a lot of risks. Hence, one should be very careful and could stay on the sidelines and allow the dust to settle.
Last week, the bulls survived what could be one of the worst weeks in recent history, as the much-vaunted US capitalism teetered on the brink of a collapse. After slumping close to the year's low, the Indian indices staged a remarkable rebound, in line with other global markets, as news broke that the Bush regime was preparing a massive bailout plan to save its fragile economy form the financial terror. Washington has already submitted the plan (worth a whopping $700bn) to the Congress. After some debate and political rhetoric in an election year, Capitol Hill is likely to clear the program in the next few days. However, one needs to question the move as many previous attempts at checking the financial contagion had failed miserably. As a result, some analysts are skeptical of the effectiveness of the Bush government's plan. There is also the 'moral hazard' (we heard this term when the farm loan waiver was announced by Chidambaram) issue as the move sets a bad precedent by rescuing the bad guys.
Already, there are signs that the global rally, powered by an extra-ordinary rescue effort mounted by the beleaguered US government and others of its ilk, may not sustain for long. Asian markets this morning (barring Shanghai which is up for different reasons), have given a muted response to Washington's humungous bailout package. In fact, the Hang Seng even dipped into the red briefly, and was last trading flat. Among the other regional stock benchmarks, the Kospi was only marginally up, while the Straits Times was down slightly. The Nikkei and the Shanghai Composite are the only two markets up sharply. The latter is continuing last week's rebound after the Chinese government announced a slew of steps to shore up sentiment in the local stock market.
Reliance Industries could see some wild swings. Mukesh Ambani says that the company has started pumping oil from KG Basin. The stock already rallied on Friday and don’t be surprised if some cooling takes place.FIIs were net buyers of Rs10.16bn (provisional) in the cash segment on Friday. Local institutions pumped in just Rs439.1mn. In the F&O segment, the foreign funds were net buyers of Rs39.8bn. On Thursday, the foreign funds were net sellers of Rs5.99bn in the cash segment. Mutual Funds poured in Rs9.39bn on the same day.
US stocks soared further on Friday, extending the rally from the previous day, as the Bush regime mounted an unprecedented counter attack to unclog the stressed markets and revive investor confidence at the end of a tumultuous week.
Washington's proposed plan to help banks get rid of the toxic securities, coupled with the lifeline given to bleeding money market funds and the crack down on speculators restored some trust in the world's premier financial market.
Major stock indexes wiped out big losses suffered earlier in the week in the wake of the unraveling of the latest round of financial excesses by some of Wall Street's leading institutions. However, some analysts warned that the crisis is not completely over.
The Dow Jones Industrial Average jumped 368.75 points, or 3.3%, to end at 11,388.44, capping its biggest two-day jump in six years. The S&P 500 index rallied 48.57 points, or 4% to 1,255.08. Nasdaq Composite index surged 74.80, or 3.4%, to 2,273.9.
Small cap stocks jumped too, with the Russell 2000 index up 4.1%.
Eleven stocks advanced for every two that fell on the New York Stock Exchange.
Including Thursday's big rally, the Dow's two-session advance was 779 points, the biggest since March 2000, according to Dow Jones. On a percentage basis, the two-session advance of 7.3% was the biggest since October 2002.
The Dow's daily gyrations between lows and highs added up to a more than 2800-point run. However, for the week, the Dow closed down less than 34 points.
Trading volume were heavy, with nearly 3bn shares exchanged on the New York Stock Exchange. Advancers beating decliners roughly 7 to 1. On the Nasdaq, more than 2bn shares traded, and for every stock on the decline, four advanced.
The S&P 500 erased its decline for the week, ending 0.3% higher. All of the S&P's 10 industry groups advanced, with the financial and energy sectors leading the charge, the former up 15% and the latter gaining 8.1%.
Treasury prices plunged and gold prices tumbled as investors moved out of safe-haven assets and poured money into equities, reversing the flight-to-safety trend of earlier in the week. Oil rallied more than US$6 a barrel. The dollar jumped nearly 2% versus the yen, but fell versus the euro.
The cost of default protection on corporate bonds dropped by the most since the bailout of Bear Stearns in March.
Across the Atlantic, the FTSE 100 index in London surged more than 400 points on Friday in the biggest one-day outpouring in 20 years. The FTSE 100 index rebounded 431.30 points, or 8.8%, to 5,311.80.
Other European markets surged to their best one-day percentage rise ever and US stocks rallied from the outset as the Bush government said that it was looking to buy billions of dollars of bad assets from its financial institutions.
The pan-European Dow Jones Stoxx 600 climbed 8.3% to 278.16, eclipsing the Stoxx 600 rise of 5.9% on Oct. 15, 2002. The French CAC-40 index jumped 9.3% to 4,324.87 and Germany's DAX 30 index climbed 5.6% to 6,189.53.
Bonds fell sharply and gold prices dropped, as investors headed back toward riskier investments such as equities in the belief that the worst may be over.
In the emerging markets, Russian stocks rallied nearly 30%, causing the markets' regulator to halt trading once again on the two main stock exchanges, after the government took a series of steps aimed at stemming the country's financial turmoil.
The ruble-denominated Micex index soared 29% to finish at 1,098 points and the dollar-denominated RTS stock index rallied 22% to end at 1,295.91 points.
Among the other emerging markets, the Bovespa in Brazil surged 9.6% to 53,055 while the IPC index in Mexico jumped 4.6% to 25,701. The ISE National-30 index in Turkey soared by 13.6% to 45,402.
Markets extended gains to second straight trading session on Friday brushing aside concerns over US credit crisis. The significant rally was led by the banking stocks after the finance minister clarified, stating that the Indian banks have little exposure to US financial crises. The realty, IT and the oil & gas stocks were also among the major gainers. The Sensex ended 764 points higher to close at 14,079 and the NSE Nifty index ended at 4,245 gaining 207 points.
All the 30 components of the Sensex ended in positive terrain. Index heavyweights like Reliance Industries, ICICI Bank and Infosys were among the major gainers.
Among the BSE Sectoral indices, BSE Realty index was the top gainer (up 7.6%), BSE IT index (up 6.7%), BSE Oil & Gas index (up 5.5%) and BSE Bankex index (up 5.2%).
Shares of Patel Engineering surged by over 3.5% to Rs364 after the company announced that it secured order worth Rs6.96bn from krishna Delta System. The scrip touched an intra-day high of Rs385 and a low of Rs360 and recorded volumes of over 65,000 shares on BSE.
Shares of Reliance Industries surged by over 6% to Rs2051 after the company discovered gas in eight new locations in the Krishna-Godavari basin off the country's east coast stated reports. The scrip touched an intra-day high of Rs2065 and a low of Rs1960 and recorded volumes of over 16,00,000 shares on BSE.
Shares of Opto Circuits gained by 2% to Rs295 after the company announced that it signed a non binding letter of Intent (LOI) for the proposed purchase of 100% of the capital stock of a privately held medical devices Company in Europe manufacturing Medical Equipments. The acquisition is estimated over USD 100.00 million. The scrip touched an intra-day high of Rs299 and a low of Rs291 and recorded volumes of over 56,000 shares on BSE.
Shares of Garware Offshore advanced by 5% to Rs180 after the company announced that it secured a firm contract for upto 3 years in South Africa for its new Anchor Handling Tug-cum-Supply Vessel (AHTSV) viz. "M V Meghna" scheduled for delivery in the last quarter of the year.
The annual revenue from this Contract is expected to be in the region of Rs220mn. The scrip touched an intra-day high of Rs182 and a low of Rs174 and recorded volumes of over 18,000 shares on BSE.
Shares of HCL Technologies surged by over 8% to Rs229 after the company announced it would spend as much as US$2bn for acquiring a company by 2011, stated reports. The scrip touched an intra-day high of Rs233 and a low of Rs220 and recorded volumes of over 5,00,000 shares on BSE.
Shares of Phoenix mills ended higher by 2.2% at Rs146 after ~1.4% of equity changed hands in two trades. One of ~1.28mn shares and the other of 0.7mn shares deals, took place at an aeage price of Rs151.5 per share. The scrip touched an intra-day high of Rs169 and a low of Rs143 and recorded volumes of over 20,00,000 shares on BSE.
Indian market might continue its recovery mirroring gains in the global markets. However, after a 700 point upmove, key indices could witness some profit booking.
Reliance Industries finds another gas reserve in KG Basin which may be bigger than the country’s biggest gas field.(ET)
ONGC plans to incur Rs19.3bn capital expenditure in the current financial year.(BS)
Maytas Metro, the company formed to build, operate and transfer the Rs121bn metro rail project, signs concession agreement with Andhra Pradesh government.(BL)
Patel Engineering receives Rs6.9bn order from the Andhra Pradesh state government.(FE)
Reliance Power receives possession of 1,800 acres of land for its Krishnapatnam UMPP, further 700 acres to be acquired soon.(BS)
SBI, BNP Paribas, Standard Chartered Bank and Barclays bank to bail out Lehman’s India business.(BS)
Kingfisher to cut 300 jobs.(BS)
JSW Steel secures licenses to mine iron ore and manganese in Jharkhand. (TOI)
Spencer’s Retail of the RPG Group decides to focus on food and bakery services.(ET)
ONGC Videsh may take US$2.8bn loan to buy Imperial Energy.(BS)
Larsen & Toubro set to prune its business portfolio; may exit from three or four businesses that have failed to post significant growth.(FE)
Opto Circuits to buy Europe based medical devices maker for over US$100mn.(TOI)
Ranbaxy Laboratories likely to shift production of Valacyclovir to FDA approved facility.(ET)
BHEL plans Rs15bn forgings joint venture.(BS)
Tata Motors to launch higher end version of ‘Ace Magic’ vehicle.(Mint)
DLF is retrenching around 300 employees.(ET)
Reliance Industries starts test production of crude oil from KG basin; commercial gas flow begins from January 2009.(DNA)
Videocon JV buys Brazilian company for US$283mn.(BL)
PFC Consulting, a subsidiary of Power Finance Corp., may provide services to UMPPs.(ET)
US FDA is probing the quality of AIDS medicines supplied by Ranbaxy Laboratories to developing countries under US government funded programmes.(BS)
Future Logistics plans to raise US$40mn from PEs.(ET)
Referendum on land acquisition for Reliance Industries’ proposed SEZ in Raigad, Maharashtra.(BL)
Indian Oil Corp. to invest Rs70bn in this fiscal as part of its capital expenditure.(BL)
Apollo Hospital’s HealthHiway eyes US$2mn PE fund.(ET)
Simbhaoli Sugars is mulling acquisition of two sick sugar units in Uttar Pradesh at an investment of Rs600mn.(BS)
Power Finance Corporation to join hands with PE firms to finance power plants.(ET)
Hindustan Motors to soon launch a SUV.(FE)
Reliance ADAG will invest US$550mn to form a new venture with Steven Spielberg, allowing him to break away from his studio, DreamWorks.(DNA)
Mphasis cuts hiring guidance by 50%.(BS)
Indian Oil Corp. expects government to issue oil bonds for the last quarter of FY08 to it by October end.(DNA)
Garware Offshore says it has secured a US$15mn contract for supplying a vessel in South Africa.(FE)
Nalco lines up Rs400bn growth plans involving projects abroad within the country.(BL)
State Bank of India mulling overseas acquisition.(BS)
Oil India to begin its maiden overseas drilling in Libya next year.(BL)
RCF kicks off its plan to invest US$1.3bn in Mozambique.(FE)
United Breweries is lining up two premium variants of Kingfisher beer.(ET)
Essar Steel Holdings says it would invest US$4bn in North America, including US$1.6bn in a mine-based steel plant in the state of Minnesota.(FE)
Export-Import Bank of US has given Air India US$549mn in loan guarantees to support the purchase of Boeing aircraft.(Mint)
Hindalco plans new units, to invest Rs19.8bn; to raise Rs50bn through a rights issue slated to open on Monday.(FE)
MCX gets SEBI approval for trading in currency futures.(ET)
Company Law Board stays the September 27 AGM of Kohinoor Foods, which is facing a hostile takeover from Temptation Foods.(FE)
Merger of Bongaigaon Refinery with Indian Oil Corp unlikely in current fiscal due to investors’ resistance.(BL)
A four-way JV between Oil India., the Assam oil division of Indian Oil Corp., Coal India and Engineers India is under way to produce synthetic crude from high-sulphur coal.(DNA)
Oil India may raise debt if its IPO falters.(BS)
Tulip Telecom plans Rs6bn capital expenditure over the next two years to expand its data connectivity network.(BL)
Claris Life Sciences is planning capital expansion to the tune of Rs2-3bn.(BS)
NTPC has warned Russia’s Technopromexport of legal action if it does not resume work at its Barh power project in Bihar.(BS)
India may take up the Ranbaxy Laboratories drugs case with the US government.(ET)
Economy Front page
Reliance Industries finds another gas reserve in KG Basin which may be bigger than the country’s biggest gas field.(ET)
ONGC plans to incur Rs19.3bn capital expenditure in the current financial year.(BS)
Maytas Metro, the company formed to build, operate and transfer the Rs121bn metro rail project, signs concession agreement with Andhra Pradesh government.(BL)
Patel Engineering receives Rs6.9bn order from the Andhra Pradesh state government.(FE)
Reliance Power receives possession of 1,800 acres of land for its Krishnapatnam UMPP, further 700 acres to be acquired soon.(BS)
SBI, BNP Paribas, Standard Chartered Bank and Barclays bank to bail out Lehman’s India business.(BS)
Kingfisher to cut 300 jobs.(BS)
JSW Steel secures licenses to mine iron ore and manganese in Jharkhand. (TOI)
Spencer’s Retail of the RPG Group decides to focus on food and bakery services.(ET)
ONGC Videsh may take US$2.8bn loan to buy Imperial Energy.(BS)
Larsen & Toubro set to prune its business portfolio; may exit from three or four businesses that have failed to post significant growth.(FE)
Opto Circuits to buy Europe based medical devices maker for over US$100mn.(TOI)
Ranbaxy Laboratories likely to shift production of Valacyclovir to FDA approved facility.(ET)
BHEL plans Rs15bn forgings joint venture.(BS)
Tata Motors to launch higher end version of ‘Ace Magic’ vehicle.(Mint)
DLF is retrenching around 300 employees.(ET)
Reliance Industries starts test production of crude oil from KG basin; commercial gas flow begins from January 2009.(DNA)
Videocon JV buys Brazilian company for US$283mn.(BL)
PFC Consulting, a subsidiary of Power Finance Corp., may provide services to UMPPs.(ET)
US FDA is probing the quality of AIDS medicines supplied by Ranbaxy Laboratories to developing countries under US government funded programmes.(BS)
Future Logistics plans to raise US$40mn from PEs.(ET)
Referendum on land acquisition for Reliance Industries’ proposed SEZ in Raigad, Maharashtra.(BL)
Indian Oil Corp. to invest Rs70bn in this fiscal as part of its capital expenditure.(BL)
Apollo Hospital’s HealthHiway eyes US$2mn PE fund.(ET)
Simbhaoli Sugars is mulling acquisition of two sick sugar units in Uttar Pradesh at an investment of Rs600mn.(BS)
Power Finance Corporation to join hands with PE firms to finance power plants.(ET)
Hindustan Motors to soon launch a SUV.(FE)
Reliance ADAG will invest US$550mn to form a new venture with Steven Spielberg, allowing him to break away from his studio, DreamWorks.(DNA)
Mphasis cuts hiring guidance by 50%.(BS)
Indian Oil Corp. expects government to issue oil bonds for the last quarter of FY08 to it by October end.(DNA)
Garware Offshore says it has secured a US$15mn contract for supplying a vessel in South Africa.(FE)
Nalco lines up Rs400bn growth plans involving projects abroad within the country.(BL)
State Bank of India mulling overseas acquisition.(BS)
Oil India to begin its maiden overseas drilling in Libya next year.(BL)
RCF kicks off its plan to invest US$1.3bn in Mozambique.(FE)
United Breweries is lining up two premium variants of Kingfisher beer.(ET)
Essar Steel Holdings says it would invest US$4bn in North America, including US$1.6bn in a mine-based steel plant in the state of Minnesota.(FE)
Export-Import Bank of US has given Air India US$549mn in loan guarantees to support the purchase of Boeing aircraft.(Mint)
Hindalco plans new units, to invest Rs19.8bn; to raise Rs50bn through a rights issue slated to open on Monday.(FE)
MCX gets SEBI approval for trading in currency futures.(ET)
Company Law Board stays the September 27 AGM of Kohinoor Foods, which is facing a hostile takeover from Temptation Foods.(FE)
Merger of Bongaigaon Refinery with Indian Oil Corp unlikely in current fiscal due to investors’ resistance.(BL)
A four-way JV between Oil India., the Assam oil division of Indian Oil Corp., Coal India and Engineers India is under way to produce synthetic crude from high-sulphur coal.(DNA)
Oil India may raise debt if its IPO falters.(BS)
Tulip Telecom plans Rs6bn capital expenditure over the next two years to expand its data connectivity network.(BL)
Claris Life Sciences is planning capital expansion to the tune of Rs2-3bn.(BS)
NTPC has warned Russia’s Technopromexport of legal action if it does not resume work at its Barh power project in Bihar.(BS)
India may take up the Ranbaxy Laboratories drugs case with the US government.(ET)
Reliance Communications out of elite club
Anil Ambani Group company Reliance Communications has lost its position in the elite club of country's top 10 most valued firms amid meltdown in the stock market following the global financial turmoil.
Engineering and construction major Larsen & Toubro moved ahead of RCom to enter the list of top 10 firms with a market capitalisation of Rs 77,375.03 crore, while the ADA Group firm has a valuation of Rs 77,204 crore as on the week ended September 19.
RCom suffered a fall of Rs 3,529.47 crore in its market capitalisation in the past five trading sessions and is at the 11th place in terms of market value.
Reliance Industries has maintained its position as the country's most valued firm, with an increase of Rs 17,510.41 crore in its marketcap, which stood at Rs 2.98 lakh crore last week.
Public sector ONGC, country's second most valued firm, recorded the second biggest gain of Rs 10,544.63 crore, while PSU power utility NTPC saw a jump of Rs 7,627.05 crore in its market cap.
Leading telecom firm Bharti Airtel gained Rs 3,872.12 crore in the same period, while country's largest lender SBI gained Rs 3,320.42 crore. BHEL increased Rs 682.88 crore in its valuation.
State-run NMDC bore the brunt of the meltdown on the bourses facing maximum loss of Rs 24,224.32 crore in its market capitalisation thereby sliding to the eighth position on Friday from sixth place in the previous week.
The valuation of another PSU MMTC also declined by as much as Rs 5,328.50 crore, while IT major Infosys saw its marketcap sinking by Rs 1,158.99 crore.
Meanwhile, the country's top 10 firms, in terms of market capitalisation, gained Rs 9,486.59 crore from its total in the previous week.
At the end of Friday's trade, the total market value of the 10 most valued firms, comprising six public sector firms and four private sector entities, stood at about Rs 13.78 lakh crore, up from Rs 13.69 lakh crore a week ago.
RIL (2.98 lakh crore) tops the list, followed by ONGC (Rs 2.29 lakh crore), Bharti Airtel (Rs 1.51 lakh crore), NTPC (Rs 1.50 lakh crore), MMTC (Rs 1.08 lakh crore), SBI (Rs 99,333 crore), Infosys (Rs 92,939 crore), NMDC (Rs 86,430 crore), BHEL (Rs 83,742 crore) and L&T (Rs 77,375 crore).
India property prices to come down
Indian property prices, which had taken off like jet planes, appear to be losing altitude after bad debts owing their origin to real estate brought down the US financial market to its knees.
Marketmen see prices cooling and projects being held up for want of cheap funds, but don't expect the market to crash.
Raising funds from American and Western European investors, who accounted for a bulk of overseas money coming to India, will be difficult. "Developers will have to look at new avenues like middle-east and Korea," said Global realty consultant Jones Lang LaSalle Meghraj country head Anuj Puri.
The first to be hit would be commercial property prices, although a correction in residential segment too is expected. Rates had almost doubled in the three years leading to 2007, when interest rates started hardening.
"Negative sentiments from events like these (collapse of Lehman Brothers, Merrill Lynch and others) will have a bearing on the banking and financial services' real estate requirement in India," Puri said.
"It is not a big exposure considering 50 million sq ft of office spaces transacted every year in India," Puri said, adding that there would not be much of a direct impact because of the two firms going down under.
Prices of properties in a good location would not be affected much, said Amit Sarin, Executive Director of Anant Raj Industries, in which Lehman held 1.8 percent stake.
However, those in less prime areas could feel the pinch, said Sarin, whose company is predominantly into building IT space.
Lehman bust - job impact
Collapse of the Lehman Brothers in the world's biggest ever bankruptcy story may have sent thousands of its employees flocking the job market, but the 158-year-old American investment bank giant still seems to be in hiring mood.
Once known as one of the favourite places to work in the financial services space, especially due to its fat pay packages, Lehman Brothers had a workforce of close to 26,000 employees at the last count. But its filing for bankruptcy protection on September 15 saw nearly all its employees on a lookout for new employers.
However, Lehman Brothers seems to be continuing with its hiring activities, as it has posted at least four new job vacancies for the US after its bankruptcy filing. These vacancies are for positions like Investor Accounting Specialist, Foreclosure Specialist and Default Supervisor, and they seem to have been posted on the bank's website a day after the bankruptcy filing or later.
In addition, Lehman Brothers has over a dozen recruitment events lined up across the world through September, October and November.
The interested candidates, if any, can register for these recruiting events and presentations in the career section of Lehman's website.
"These events are intended for those who are applying for early years programmes, internships or first year Full Time Analyst/Associate programme hires," it says on its website.
One such event, "Equities and Fixed Income PhD Recruiting Presentation", is scheduled for as early as September 23 in Massachusetts and is for Harvard and MIT students in their penultimate or final year of their PhD programme.
Ten such recruitment events are lined up for the UK, while there are three others for Italy through October and November.
While two vacancies -- Investor Accounting Specialist and Supervisor Default positions -- were posted on September 16, it posted one vacancy each on September 17 and 18 for Foreclosure Specialist and Investor Accounting Specialist posts, respectively.
However, there have been no new job postings after its bankruptcy filing for Asia-Pacific and Europe and Middle East regions. Lehman has posted at least four job vacancies in September for India, where it employs over 2,500 people, but all of them were posted before the bankruptcy filing.
However, a number of job portals continue to have close to 20 recruitment ads for Lehman's India operations for positions like Test Engineer (QA), Java Senior Developer, Prime Services Analyst, Project Manager, Capital Resource Analyst and Vice President - Global Sales & Banking Technology.
One of Indian job portals, naukri.com, vacancies are also there for the posts of Recruitment Manager and Recruitment Executives at Lehman Brothers. However, these job website postings are believed to have been put before the bank's collapse.
Lehman set up BPO operations in India in 2005 and according to the fact-sheet of the firm, the centre saw the number of employees going up by eight times by the middle of this year and had declared its plans to grow the operations. In fact, it was recruiting till as recently as couple of months back.
The company has in all about 2,500 people working for it in India, including those in the BPO unit. Recent news reports have said the company had asked a section of its BPO staff to quit.
In its new job postings for the US, Lehman says that the job profile of a "Foreclosure Specialist" would involve monitoring "the actions of the Foreclosure Attorneys... to ensure that all paperwork needed by the Attorneys is completed timely and accurately. To update internal systems for checks and balances and to apply money as appropriately directed."
Besides, the Investor Accounting Specialist would be responsible for the monthly reconciliation of investor custodial accounts and clearing accounts, while Supervisor (Default) would be responsible for the overall operation of the Collection Department.
Lehman has filed for Chapter 11 bankruptcy protection, which allows a company to restructure while creditor claims are held at bay.
A number of the company's employees are already said to have joined other companies, including its Mergers Advisor Group Chairman and co-head Mark Shafir, who has joined Citigroup.
Sharif continued at Lehman through its bankruptcy filing and is said to have helped negotiate the USD 1.75-billion sale of its US investment banking business to British banking major Barclays.
Hundreds of Lehman investors protest in Hong Kong
Hundreds of angry Lehman Brothers investors rallied in Hong Kong today to demand the government help secure their money after the US investment bank collapsed this past week.
The investors, many of them nearing or at retirement age, waved investment papers and chanted slogans outside the territory's government headquarters as they accused regulators of not doing enough to safeguard their interests.
Federal Bank
We recommend a buy in Federal Bank from a short-term horizon. It is apparent from the charts that the stock has been on a medium-term uptrend from its July trough of Rs 163. However, after encountering minor resistance at around Rs 230 recently, the stock declined and found support at Rs 200 level. The stock’s 5 percent gain with above average volume on September 19 reinforced the bullish momentum.
Federal Bank is currently trading well above its 21 and 50-day moving averages. The relative strength index is rising in the neutral region towards the bullish zone. The moving average convergence and divergence is featuring in the positive territory. Our short-term outlook for the stock is positive. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 208. We expect the stock to surpass the minor resistance and move up until it hits our price target of Rs 242 in the forthcoming trading sessions.
Weekly Gold Review: Economic Turmoil Levitates Gold
Gold prices were spooked by the economic turmoil last week. The prices saw a major spark coming in a single day by Rs 994 to Rs 12746 per 10 grams on 17th Sep 2008. During the start of the week prices were hovering at 11640 levels, which moved towards 12709 at the end.
The Comex division of the New York Mercantile Exchange raised margin payments on gold and silver futures by as much as 47 % after price swings accelerated. The margin rate for Comex members advances to $ 5500 per contract. The new rate for non-members is $ 7425, from $ 5063. Members will pay a margin rate of $6000, compared with $ 5000 previously. Non-members will pay $ 8100, from $ 6750.
Last trading day of the week saw dollar edging higher, rising above the 106-figure versus the yen and pushing the euro lower toward the 1.42-region. The advance in the greenback and stocks was prompted by discussions for the creation of a government-sponsored entity that would remove the illiquid assets on bank balance sheets that are the underlying source of the current stresses in financial institutions and financial markets.
Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate "continued elevated pressures in the US dollar short-term funding markets. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $55 billion to up to $110 million and the Swiss National Bank by $15 billion to up to $27 billion.
In major economic reports last week, US new residential construction fell by much more than expected in the month of August, according to a report released by the Department of Commerce on Wednesday, with housing starts falling to their lowest level in over seventeen years. The report showed that housing starts fell 6.2 percent to an annual rate of 895,000 from the revised July estimate of 954000. Economists had expected housing starts to fall to an annual rate of 950000 from the 965000 originally reported for the previous month.
Crude Oil Jumps Beyond $ 100
Pressure Persists
Light, sweet crude for October delivery rose last week by $ 6.67 to settle at $ 104.55 a barrel on the New York Mercantile Exchange, after earlier rising as high as $ 105.25. It was oil's first close above $100 in a week. MCX Crude Oil for October expiry closed the week at Rs 4647 per barrel up Rs 204.
Crude climbed over $13 in the last three days as the government carries out a historic intervention into the financial system. But analysts say prices could resume their downward trend, noting that demand for energy will likely remain weak as a slumping economy leads Americans to drive less and businesses to scale back operations.
In economic front, Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate continued elevated pressures in the US dollar short-term funding markets. The BoC, BoE, ECB, SNB, BoJ and Federal Reserve increased their swap lines to provide improved liquidity in both term and overnight operations. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $ 55 billion to up to $ 110 million and the Swiss National Bank by $ 15 billion to up to $ 27 billion.
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