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Sunday, May 31, 2009
Redington India
Investors with a two-year horizon may buy the shares of Redington India, an IT hardware and software distributor.
The company has potential for scaling up its sales in high growth markets of India, West Asia and Europe, even in a slowing global economy. Given the sharp rise in markets, investors may consider buying the stocks in a phased manner to capitalise on declines linked to broader markets. At Rs 230, the stock trades at 10 times its likely 2009-10 per share earnings.
In the recent March quarter, Redington’s revenues grew by 7.7 per cent over the same period in 2008, while net profits grew by 18.3 per cent over the same period.
Improving trends in IT hardware shipments, diversification from sales of electronic goods, and expanding after-sales services offer scope for revenue growth, while helping margin expansion. After two successive quarters of decline in hardware shipments around the world, sales growth is just starting to revive in the March quarter, especially in India, West Asian and African regions.
According to a recent IDC report, personal computer shipments in India have increased by 7 per cent sequentially in the recent March quarter. Further, hardware and software sales are likely to be to the tune of Rs 63,703 crore (7.1 per cent growth over 2008) and Rs 11,300 crore (17.4 per cent growth) in 2009.
This is expected to be led by Government spending on IT enablement, especially in schools and colleges, e-governance projects, and banking sectors. With the new Government in place, a continuity of policies is expected in these areas.
IDC pegs the Middle-East and African IT markets to be worth $80 billion by 2012, up from $51 billion in 2008. Other research agencies such as TPI also point out the increasing average contract values in the West Asian region.
Redington with a near 50-50 revenue split between India and the EMEA region, given its partnership with all global majors in the IT hardware and packaged software space, appears well placed to capture a substantial share of the pie.
The company has also diversified into selling non-IT products such as cameras, consumer-durables, and mobile-phones. Redington has tied up with Nokia to distribute the latter’s mobile phones in Africa. Given the relatively under-penetrated African market and the interest shown by several operators such as Bharti Airtel, Vodafone and several Chinese operators in having a larger footprint there, this partnership could be quite fruitful to the company.
Redington also has also started a chain of after-sales service and repair centres to capture revenues from services as well.
Competition from well-entrenched distributors such as Ingram Micro and the resulting pricing pressure is a key risk to this recommendation. Given the capital intensive nature of business, interest costs have increased by 35.8 per cent for the company in 2008-09, but due to margin expansion, the interest cover has been stable.
Shriram Transport Finance Company
Fresh investments can be considered in the stock of Shriram Transport Finance Company (STFC), which is among the leading asset financing (commercial vehicle financing) NBFCs in India.
The company delivered robust earnings growth (57 per cent for FY-09) despite the slowdown in new truck demand thanks to its significant presence in pre-owned truck financing.
At the current market price of Rs 288, STFC trades at 10 times its historic earnings and 2.5 times its FY-09 book value. At these valuations, it trades at a premium to smaller asset financing companies such as SREI Infra, Mahindra Finance and Sundaram Finance.
Better-than-industry spreads (7.17 per cent) and profitability ratios (ROE 30 per cent, ROA 2.7 per cent), presence in under-penetrated pre-owned truck segment and few listed competitors, country-wide presence are key positives for the company.
STFC claims a 20-25 per cent market share in the pre-owned truck finance market. In addition, STFC has a market share of 7 per cent in the new truck market.
Loan book mix
Almost three-fourth of the total assets under management (loan book and securitized assets put together) is contributed by pre-owned trucks and the rest 25 per cent by new trucks. The book for STFC has grown at 53 per cent CAGR in the period 2005-2008.
However, STFC did not mange to grow at same rate in FY-09 owing to the slowdown in various sectors; the loan book growth rate was still robust at 20 per cent in FY-09. Almost 23 per cent of assets have been securitised.
The securitised portfolio is bought by banks and institutions to meet their priority sector lending targets. Offloading a part of portfolio will allow them to lend more to the sector.
To fund its lending, the borrowing profile of STFI has shifted from retail deposits to bank/institution borrowings over the past four years.
The share of retail borrowing has come down from 73 per cent in FY05 to 15.7 per cent in FY-09 which helped in reducing the cost of funds.
Margins
The net interest margin of STFC fell from 7.77 per cent to 7.16 per cent in a year. However, the margins are high relative to most other FIs and appear sustainable due to high yields on pre-owned vehicles. Falling interest rates may help improve the margins for STFC, as it may source funds at lower rate (benefiting from a reasonable credit rating), while yields may not fall significantly due to high risk attached to the truck segment.
Financials
Net profit of STFC grew at 57 per cent for 2008-09 on the back of high growth in net interest income growth (35 per cent) and income from securitisation (104 per cent). Fall in net interest income can be attributed to contraction in margins. Employee expenses and other operating expenses have grown at more than 50 per cent pulling down the operating profit growth. Gross NPA/advances rose 1.6 per cent in FY-08 to 2.1 per cent in FY-09. STFC’s provisions for bad debts grew by 24 per cent, helping the company bring down its NNPA proportion to 0.8 per cent from 0.9 per cent in FY-08, despite increase in gross NPA.
The company’s loan-to-value of 65 per cent, offers comfort. It also gets internal valuation done for the truck, which will help it ascertain the true value of the truck. A strong countrywide network aids recovery.
Outlook
Apart from truck financing, the company has forayed into tractor financing, small CV and passenger CV financing, providing possible diversification. The RBI’s recent circular making it easier for lenders to repossess assets in case of default will benefit the company significantly.
In the current slowdown, STFC is going slow on loan disbursals. The disbursement remained flat during the year. The company has Rs 5,300 crore in the form of cash and bank balances, which it is yet to lend; this may be a reflection of cautious lending. It also plans to raise another Rs 1,000 crore in the form of NCDs, taking care of liquidity for the time being.
Risks
The higher spreads that STFC enjoys reflects the higher risk profile attached to its borrowers. That suggests that higher slippages are possible if the slowdown persists. Issues such as over capacity, fall in export/import freight and industrial product carriers have not affected STFC for now as most of its clients (the older trucks) carry es0sential commodities, but given the classification of assets as NPAs only after 180 days past due, the true picture would be known only in the coming quarters.
Tata Motors
Tata Motors is in a phase that cricket commentators would call consolidation — that is, the period where the side chasing runs rebuilds its innings after the fall of a couple of quick wickets. The company is slowly but surely picking up the threads once again and assuming that the overall domestic economy gets back on rails and there are no more shocks hereon, the company should be back in the chase by the end of the third quarter of this fiscal.
The biggest worry remains Jaguar Land Rover, its falling sales and rising debts.
Shareholders can continue to hold the stock, trading at Rs 337, given the incipient signs of recovery. However, fresh buying can be put off till the signs of revival become stronger and commercial vehicle (CV) demand begins to show firm growth signs. The stock has more than doubled since March and a rise in valuation from hereon will depend on the sustenance of the market recovery.
Emerging from the wilderness
Sales of commercial vehicles, the bread-and-butter business of TML, literally fell off a cliff in the October-December ’08 quarter (drop of 46 per cent compared to the same period in the earlier year). However, the period since then has seen an improvement with monthly volumes returning to levels that prevailed in the first half of 2008-09.
The credit goes largely to the stimulus measures announced by the Government; excise duty rates on commercial vehicles were reduced while depreciation rates were increased to 50 per cent. This coupled with the gradually easing credit markets and lower interest rates helped put commercial vehicle demand on the recovery path once again. Every month since December 2008 has been better than the previous one with March seeing the highest commercial vehicle sales in 2008-09.
Financially scarred
The industry’s troubles, however, have left deep scars on TML’s performance in 2008-09. The earnings picture would have been bleaker were it not for some generous help from the government directive on accounting for foreign exchange transactions which buttressed profit by Rs 418 crore, net of tax. Also buoying the bottomline was a profit of Rs 520 crore on sale of long-term investments during the year. Yet, despite its troubles, the declaration of a Rs 6 per share dividend (face value of Rs 10 per share) is a sign of the company’s confidence and the comfortable liquidity position that it is now in.
Careful optimism
The CV market is beginning to show the first signs of a recovery. Demand is growing again in the light commercial vehicle (LCV) segment but heavy commercial vehicles are yet to see return of interest. Indeed, TML’s Uttarakhand plant, which produces the Ace light commercial vehicle, is running close to capacity. This is good news as the Ace enjoys the highest margins among all of TML’s products.
Liquidity in the market is improving even as interest rates at the borrower level are gradually beginning to soften. The critical aspect for return of truck buyers will be a sustained revival in the manufacturing sector, which has been sending out mixed signals in recent months.
The prediction of a normal monsoon is encouraging for CV demand which is driven by sentiment. With export-related cargo down to a trickle, fleet operators will be looking to a bountiful harvest for business.
There is reason to be optimistic on the costs front as commodity prices are way off their highs. TML says that it expects raw material costs to soon return to levels that prevailed in early 2008.
The company is gradually rebuilding its finances which were in disarray following the Jaguar Land Rover (JLR) deal. While a part of the bridge loan taken to fund the JLR deal has been paid off by the Rs 4,200 crore bond issue made on favourable terms, the balance of $1 billion has been rolled over for another 18 months.
The bonds may push the debt:equity ratio close to 1.3:1 from 1:1 at the end of 2008-09 but it will still be at a comfortable level. With capital expenditure scaled down, the company will be looking to fund its requirements from internal accruals as much as it can.
TML is maintaining a tight inventory position of just over two weeks which means that working capital will not be strained. It has also embarked on a programme to shave Rs 1,000 crore off costs in the next three years.
Cost control is in the DNA of the company and was a vital factor in its turnaround after posting a loss early this decade.
As the market gradually recovers, orders for buses from state transport corporations under the Jawaharlal Nehru National Urban Renewal Mission will provide the much-needed cushion in the next three months.
TML’s passenger car business was hit more than that of competition as the bulk of Indica’s demand comes from the taxi segment which has been hit by the slowdown in sectors such as IT and BPO. There is relatively lesser worry on the cars front and an economic recovery will see the return of buyers.
JLR worries
Amidst the encouraging signs, one big spot of worry is JLR. North America and UK account for about half of JLR’s sales and the recession in these markets has hit business hard.
Tata Motors, which will put out a detailed report on the JLR business in a month’s time, says that things are beginning to improve. Among its other markets, China is said to be doing significantly better now while Russia is just about recovering. The West Asia market continues to be challenging.
JLR was bought debt-free, but its loans have already crossed $1 billion in the last one year. Given the change in mileage and emission regulations in the US and Europe, JLR has to invest in product development and technology if it is to remain competitive.
Given the downtrend in JLR’s revenues, TML may find itself either pumping more money into JLR or guaranteeing its loans. This could be tricky, especially if conditions in the domestic market do not improve.
That brings us to the final risk that TML faces — delay in CV demand recovery. Though overall signs are promising, if CV demand fails to take off by the end of this calendar year, TML could find itself in a spot. That would be somewhat like the fall of a couple of more wickets just when the run-chase has been put back on track.
JK Lakshmi Cement
The stock of JK Lakshmi Cements looks an attractive buy in the mid-cap cement space at the current price of Rs 98. The stock trades at just three times its trailing four quarter earnings when some of its peers are at over six times (Prism Cements’ PE six times, Binani Cement’s PE eleven times and Dalmia Cement’s PE seven times).
There is a promise of upside from the current level given the company’s capacity expansion plans (a 2.7-million-tonne green-field plant) and its established client and dealer network. JK Lakshmi Cement is the flagship company of the JK group.
Sector outlook
Having commissioned its first unit in Sirohi, Rajasthan, in 1983, the company holds a 10 per cent market share in Rajasthan and Gujarat. The company’s product mix includes blended cement, ready-mix-concrete (RMC) and plaster of paris.
Western and Northern India, the two regions served by the company, are expected to see good consumption growth on the back of the work for the Commonwealth games in Delhi and order inflows from government-funded projects in Maharashtra.
Further, the return of the UPA government at the Centre has given rise to hopes that the golden quadrilateral project under the National Highways Development programme, which suffered setbacks in the period between 2004 and 2008, will be expedited. Recent initiatives by the Cabinet Committee of Economic Affairs to allow highway developers to seek higher viability gap funding from the government may fasten the pace of completion of these projects and bolster cement demand. The RMC business may be a key beneficiary.
JK Lakshmi Cements is one of the few mid-sized players to have 11 RMC plants with a combined capacity of five lakh cubic metres; it has participated in the Indira Gandhi Nahar (IGN) and Golden Quadrilateral project.Demand should not be a concern for the company as it has an established client base, with leading infrastructure builders such as L&T, Delhi Airport Authority, Essar Refinery, Reliance, Hindustan Construction Company and Raj West Power (a subsidiary of JSW Energy) among its clients. The brand is distributed by over 1,500 dealers across North and West India.
The company has recorded a strong 18 per cent growth in sales in the March quarter of 2009 supported by an equivalent volume growth and stable prices.
Investments that will pay-off
The past March quarter saw JK Lakshmi Cement’s cement capacity expand 30 per cent through addition of a 0.55 million tonne grinding unit at Sirohi in Rajasthan and another 0.55 million tonne grinding unit at Kalol near Ahmedabad.
The company has begun acquiring land for its 2.7 million tonne (mt) green-field plant at Chattisgarh. The estimated outlay for this project is Rs 1,100 crore and is to be financed by a mix of debt and internal accruals. The debt outstanding in the company’s balance-sheet as on March 31, 2009 was Rs 700 crore and the debt-to-equity stands at a moderate 0.9.
To make cost savings, the company is setting up a 12 MW waste heat recovery plant at an outlay of Rs 125 crore. Till the December quarter end of 2008, 80 per cent of the company’s power requirements were met by its captive thermal power plants (36 MW).
But with power needs going up following the 1.1 mt addition to capacity in the March quarter, the company has tied up with a private power company to meet the additional requirements. This power, the company claims, is sourced at a cost lower than sourcing from the grid.
The company has been switching between coal and high calorie pet coke for fuel over the past year based on relative price parity. In the current fiscal, after negotiating lower pet coke prices with the suppliers, the company hopes to make fuel cost savings
Margins head-up after declining
The company’s operating profits for the recent March quarter was 31 per cent higher than the corresponding previous period. Increased volume, higher selling price and the savings in cost due to the fall in pet coke prices have aided margin expansion.
Operating profit margins for the quarter stood at 31.9 per cent, a 163 basis point expansion over the same quarter of the previous year.
However, for the full year FY-09, the company’s operating margin has still contracted by 453 basis points to 25.8 per cent due to higher fuel prices (up 25 per cent) and employee expenses (up 24 per cent). Operating profit margins stood well above 30 per cent in the preceding two years.
Welspun India
Investors with long-term perspective can consider buying Welspun India.
The structural down-trend from December 2004 peak in this stock halted at Rs 13 this February and a strong uptrend is in motion since then.
The monthly oscillators are beginning to signal a buy indicating a reversal in the long-term trend.
Long-term investors can accumulate the stock in declines with stop-loss at Rs 19. Though the stock can correct over the medium-term, this correction is expected to halt above Rs 20.
We expect the stock to rally up to Rs 70 over the next 12 months.
Medium-term investors can buy with the target of Rs 50 and with the stop at Rs 26.
via BL
Saturday, May 30, 2009
Suzlon shareholding in REpower increased to 83.4%
Suzlon Energy announced on Friday that the Company and the Martifer Group have agreed on the third and final payment of Euro 175mn, as per the following payment plans, for the sale of Martifer's final 16.79% stake held in REpower Systems AG to Suzlon:
* Approximately Euro 87.6mn on May 28, 2009, which has since been paid; and
* Approximately Euro 87.6mn to be paid on June 05, 2009.
Post payment of May 28, 2009, Suzlon's shareholding stands increased to 83.43% in REpower. And upon conclusion of the balance payment on June 05, 2009, Suzlon will control 90.72% of shares in REpower.
Time to be fearful, not greedy
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| So, does this dramatic rise mean you should stuff your portfolio with metals and real estate stocks? Not really. Experts give technical and fundamental reasons for investors to avoid these sectors. |
It's an old joke by now: How do you make a small fortune on the stock market in 10 days? Just start out with a big fortune. It's black humour at its best, since everyone's losing money these days. Or are they? Those who bought shares of JSW Steel at the beginning of March 2009 would have doubled their money in a little over a month. From Rs 163 on 9 March 2009, the stock had risen 102% to Rs 330 by 16 April. You'd have made a pretty profit from Tata Steel as well; the stock rose 76% from Rs 152 to Rs 269 per share. Unitech and DLF rose by 74% and 69%, respectively, over the same period. The bigger picture shows the BSE Metals Index gained 55% in less than six weeks, the Realty Index rose by 61%, while the BSE Sensex rose by 34%.
That's good news, right? Especially when you consider that these stocks were possibly the worst performers of 2008. So, does this dramatic rise mean you should stuff your portfolio with metals and real estate stocks? Not really. Experts give technical and fundamental reasons for investors to avoid these sectors. We take a look at the reasons for the recent rally in these sectors and why it might not be a good idea to buy now.
Still Rusty
As we have seen, the metals sector seems to have rebounded from abysmal lows. But here's the reality: the big 70-100% gains are calculated on a low base. The fall in metal and realty in 2008 was so steep that these stocks entered the oversold territory and were due for a relief rally. Before the beginning of the current rally (9 March), the BSE Metals and Realty indices were deep in the red, with losses of 77% and 90%, respectively, from their January 2008 highs. So the present gains made by these indices are on the lower base, which makes percentages look bigger than the actual gains in stock prices.
Consider this. The 74% rise registered by Unitech helped it gain only Rs 18.55 per share to Rs 43.35. This is because the stock rose from its low of Rs 24.80 on 9 March 2009. The lower base effect is clearly visible if we compare the current numbers with the indices during the January 2008 highs. Even after adding the recent gains, both the BSE Metals and Realty indices were 65% and 83% lower than their respective January 2008 highs. In real terms, what the current rally has done is to help the indices hint at a recovery.
Individual stocks also performed well because of low valuations. "Markets adjusted to the overt negative reaction (in 2008) to these sectors. Some of the metals were beaten down to 10-year historical lows. Globally, commodities are at record lows. The view is that there is a greater possibility of an improvement in prices than a downside from now on. Therefore, metal stocks too performed well. It has more to do with cheap valuations," says Sonam Udasi, vice-president, consumer research head, BRICS Securities. The shares of metals companies rebounded amid hopes that commodity prices had bottomed out.
With the price of base metals rising for the first time in 2009, investors hoped that the industry might have seen the worst of the price correction. "Base metal prices have rallied because of the continued buying by the Chinese government, production cuts and short covering. This has helped in improving the earnings outlook for non-ferrous companies like Sterlite, Hindalco and Nalco. Steel stocks too moved up due to an improved demand in the domestic market and the end of the price correction in international markets," says Sanjay Jain, senior vice-president, research, Motilal Oswal Financial Services.
Property Woes
The March rally seemed like light at the end of the tunnel for the real estate industry. It had faced a very bad year, beset as it was with problems, including price correction, lower consumer interest, tight liquidity and rising interest rates. However, it appears that things have indeed started looking up. With banks cutting housing loan rates and RBI pumping more liquidity into the banking system, most of these real-estate companies have been able to pull through the worst of tight liquidity conditions. This has helped the real estate companies to restructure their loans and raise fresh funds. "Realty companies were beaten down the most in the downfall. As the interest rates are likely to fall, these companies will outperform the Sensex," says Ajay Parmar, head of research, Emkay Global Financial Services.
These days, when we think of the real estate sector, we generally consider only the property development companies. But the recent rally saw cement companies in the limelight. The positive momentum in cement stocks is largely attributed to an unexpectedly strong growth in dispatches. According to Angel Research, cement dispatches have grown by 8-10% in the past five consecutive months as against the 4.5% growth in October 2008. "Our channel check with dealers and several industry experts suggests that the strong demand for cement in the past couple of months has been on account of the heavy infrastructure activities due to pre-poll spending by the government and the strong demand by rural housing," said Pawan Burde, analyst at Angel Broking, in a recent report on the cement industry.
Many cement manufacturers were either going slow or were delaying setting up additional capacities due to the weak demand. This helped cement producers raise their prices. During January-March 2009, cement manufacturers raised cement prices by Rs 8-10 per bag. The price hike was witnessed more in the western and central regions of the country.
Investor Behaviour
Experts have suggested that the recent rally was also helped by the rise in investors' risk appetite. "The increased risk appetite has compelled the investors to look at aggressive sectors rather than only at defensive ones. That's why we saw underperformance in FMCG stocks," says Parmar. With most of the defensives (FMCG and pharma) peaking at 15-20 times price-to-earning (PE) multiples, investors were forced to look beyond the conventional defensives.
Realty and metal stocks are available at cheap valuations metal stocks are quoting at 0.6 times their book values and real estate stocks are trading at a steep discount to their net asset values. This, combined with improving liquidity conditions, saw more and more investors entering these sectors looking for good bargains.
The large-scale exit from defensives led to the relative underperformance of the BSE FMCG and Healthcare indices, which are historically known as reliable bets in bear market conditions. Between 9 March (the beginning of the recent rally) and 16 April, the BSE FMCG Index gained only 16% and the Healthcare Index rose by 20%, while the Sensex gained 34%.
"These sectors had been outperforming when the broad markets were down on account of higher risk perception. Now, with a positive change in risk perception among investors, the markets have rallied and the outperformance of these sectors is being reversed. Also, on a relative basis, these sectors had been quoting at premium valuation to the market and, hence, turned expensive," says Krishna Sanghvi, vice-presidentequity, Kotak Mutual Fund.
Should You Buy?
Though positive signs are emerging, experts are not too comfortable recommending a full-blown exposure to these stocks. "Yes, investors can look at these sectors with a two-three year perspective. But they also have to be ready to take the rough with the smooth. It can be volatile in the interim. It is time to look beyond defensive stocks simply because the risk-reward is favourable for investors with over a two-three-year time frame," says Udasi.
The major worry regarding these sectors is that none of them are completely out of the downturn or are showing any definitive signs of recovery. The recent rally is based on a couple of factors, which indicate tentative signs of recovery, like bottoming out of metal prices, rising dispatches of cement and falling home loan rates. The main factor to look for is the consistent rise in private/consumer demand for these sectors. The recent pick-up in metals and cement prices is largely attributed to the stimulus spending by governments across the world, not due to the consistent rise in demand from the consumer sector.
Analysts expect cement prices to peak soon and decline from the second quarter of 2009-10 because of supply catching up and demand slackening ahead of the monsoon season. "Though we do not expect metal prices to fall below the recent lows, there is an overhang of excess capacity. We expect a consistent pick-up in private demand only by 2011," says Burde.
However, there is one factor that's going in favour of these sectors low valuation. From this perspective, analysts are comfortable buying steel and cement stocks with an investment horizon of two-three years. "I believe metals and cement would do well in the next two-three years. However, the market has moved up quite sharply. Wait for some correction as your timing and entry point will always provide you a margin of safety," says Parmar.
As we have said often enough, timing the market is best left to the professionals. If you must have some exposure to either metals or real estate, you might be better off with the former. Despite cement and related sectors pulling up the industry, recovery in the property market seems remote. The demand for metals, like other commodities, is cyclical, and so you might make profits when the industry revives.via IndiaInfoline
Challenge is to maintain growth: Rakesh Mohan
The biggest challenge for India’s new government is managing the impact of the global financial crisis and maintaining growth, Reserve Bank of India Deputy Governor Rakesh Mohan said.
“The most challenging task for the new government is keeping up the growth momentum while the rest of the world is actually suffering recession, or negative growth,” Mohan told reporters today in Mumbai. “We have to continue being pragmatic and do whatever is necessary.”
Maintaining growth with low inflation and keeping prices and the financial markets stable are the key objectives of the nation’s central bank, Mohan said.
“Price stability is not an issue at the moment because we have low inflation,” Mohan said. “We are unlike the rest of the world as our markets have been functioning well though there has been a greater degree of volatility than usual.”
India’s money, foreign exchange and capital markets have been functioning well, Mohan said. “Uncertainty in the world is still very high and we cannot ignore the fact that we are more integrated than we used to be,” he said.
Monster F&O series...Dis-May for bears
For the May F&O series, the NSE Nifty and the BSE Sensex index both rallied over 25% each.
Bears were in dismay in the month of May as the NSE Nifty posted its biggest percentage gains in the F&O series ever. While the verdict of the election was the best that Indian parliamentary democracy has got in a long, long time, the reaction of the stock market was unimaginable.
On May 18, 2009, the BSE Sensex soared by 2,110 points or 17.24 % to 14,284 while the NSE Nifty zoomed 651 points or 17.35% to 4,323 both freezing at upper circuit.
For the May F&O series, the NSE Nifty and the BSE Sensex index both rallied over 25% each.
Among the BSE Sectoral indices, the BSE Realty index was the top gainer, the index shot up by over 67% followed by BSE Metal index up 53%. Among the other major gainers were BSE Small-Cap index up 48%, BSE Capital Goods index up 44%, BSE Mid-Cap index up 35%.
Among the banks, Kotak Bank rallied over 80%, ICICI Bank rose over 53% and SBI surged by 43%.
The top gainers in the metals sector were, Tata Steel up 62%, JSW Steel up 60%, Hindalco up 52% and SAIL 50%.
Among the Realty stocks, Indiabulls Real Estate up 75%, Unitech up 73% and DLF up 67%.
However, not all the stocks had a good time in May. Heavyweights like, Tata Communications dropped 10%, ITC lost 3%, Cipla declined 2% and HUL fell 1%.
Bharti Airtel re-dials MTN
Bharti Airtel announced that it has renewed its effort for a significant partnership with MTN Group Ltd and is exploring a potential transaction whereby, pursuant to a scheme of arrangement, Bhatri would acquire a 49% shareholding in MTN and, in turn, MTN and its shareholders would acquire an around 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until July 31, 2009.
The potential transaction between Bharti and MTN would create a leading telecommunications service provider group aligning Bharti's market leading Indian business with MTN's market leading African and Middle Eastern operations. The broader strategic objective would be to achieve a full merger of MTN and Bharti as soon as it is practicable to create a leading emerging market telecom operator which today would have combined revenues of over US$20bn and a combined consumer base over of over 200mn.
Sunil Bharti Mittal, Chairman and Managing Director of Bharti said,” We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. Both companies would stand to gain significant benefits from sharing each other's best practices in addition to savings emanating from enhanced scale. We see real power in the combination and we will work hard to unleash it for all our shareholders. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as shining example of South-South cooperation."
Weekly Newsletter - May 30 2009
May the good times continue!. That’s exactly what the bulls would say after a spectacular May series. Gains were expected after the UPA-led government returned to power with a thumping victory. We may not be out of the woods but the bulls seem to have a nice picnic out there. Given that many deep pockets may have felt left-out in the recent run, there is always a chance of the downside being cushioned by the late entrants.
Wild swings in small and mid-cap counters could lead many to a trap. Getting into a stock is a no-brainer these days. Making the exit seems to be more important, especially in lesser known counters. Revisiting the highs is an expectation which seems to be slowly trickling in. The coming week will bring in numbers on Export-Import as well as auto and cement figures. Global cues will cause swings and so will the tone of the Prime Minister’s team. For now, the ministers literally seem to be talking up stocks giving hope that a lot may be done on the deregulation and disinvestment. These pet topics may remain discussions for long but then when the sentiment is positive who cares!
GDP grew 5.8% in Jan-March quarter
India’s economy expanded 5.8% in the three months to March 31. This matched the revised gain of the previous quarter. This growth is however, still at almost half the pace at which India expanded in the past five years . The Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation, has released the revised estimates of national income for the financial year 2008-09 and the quarterly estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2008-09, both at constant (1999-2000) and current prices.
GDP at factor cost at constant (1999-2000) prices in Q4 of 2008-09 is estimated at Rs9,029.24bn , as against Rs8,537.85bn in Q4 of 2007-08, showing a growth rate of 5.8%. The sectors which registered significant growth rates in Q4 of FY09 over Q4 of FY08 are ‘construction’ at 6.8%, 'trade, hotels, transport and communication' at 6.3%, 'financing, insurance, real estate and business services' at 9.5%, and 'community, social and personal services' at 12.5%.
Friday, May 29, 2009
Post Session Commentary - May 29 2009
The domestic market closed the session on a strong note backed by heavy buying across the sectoral indices. The rally was supported by better than expected fourth quarter GDP growth that boosted the expectations that the economy will grow at a faster pace this fiscal. India’s GDP grew a faster than expected 5.8 percent in the March quarter from a year earlier. Adding to this, the comments from oil minister, Murli Deora that he would seek the approval of the cabinet for the oil price deregulation in the next 6 to 8 weeks, which spurred the oil and energy stocks to witnesses hue buying. Moreover, the positive global cues also supported the investors sentiments.
The market opened the session with decent gains tracking the positive global markets and favoring cues from the domestic markets and kept on marching forward for the most part of the session. The market gained further momentum on GDP numbers and continued its northward journey. However, the market comes off marginally from the day’s in the final hours on selective profit booking. Moreover, in the global arena, the US market closed in green on the back of a surprise auction of the 7-year Treasury Note auction. The auction’s bid-to-cover ratio came in just below 2.3 which was parallel with the prior three similar auctions. The yield on the 10-year note increased by 28 ticks to 3.64% 2009 high. Also added to the sentiments was the new-home sales up 0.3% to a seasonally adjusted rate of 352,000 in April 2009, less than expected. Along with this, the continuing jobless claims stands at 6.8 million and the initial data of weekly claims recorded at 6,23,000. However, benchmark indices gained strength during the session with BSE Sensex closed above 14,727.28 level and NSE Nifty above 4,440 mark. From sectoral front, investors on-loaded position across the sectors led by Realty, Capital Goods, Consumer Durables, Auto and Oil & Gas index.
The GDP for the fourth quarter of the current fiscal stood at 5.8% from a year earlier. However, the GDP for the current fiscal 2008-09 as a whole was down 6.7% as against the previous projection of 7.1%. The previous fiscal GDP was 8.8%. During the January-March quarter, the manufacturing sector contracted 1.4 percent from a year earlier, while the farm output grew an annual 2.7 percent, government data showed on Friday.
Among the Sensex pack 26 stocks ended in green territory and 4 in red. The market breadth indicating the overall health of the market remained firm as 2,147 stocks closed in positive while 649 stocks closed in negative and 56 stocks remained unchanged in BSE.
The BSE Sensex closed up by 329.24 points or 2.30% at 14,625.25 and NSE Nifty closed higher by 111.85 points or 2.58% at 4,448.95. BSE Mid Caps and Small Caps closed with gains of 121.18 and 175.13 points at 5,056.74 and 5,986.82. The BSE Sensex touched intraday high of 14,727.28 and intraday low of 14,319.87.
Gainers from the BSE Sensex pack are ACC Ltd (8.56%) followed by Dlf (8.41%), JP Associates (8.21%), TCS (6.05%), Tata Steel (5.92%) and M&M (5.67%).
Losers from the BSE Sensex pack are Sun Pharma (8.24%) along with Grasim industries (3.59%), Tata Power (2.47%) and ITC (0.05%).
On the global markets front the Asian markets which opened before the Indian market, closed in green. Hang Seng, Strait Times, Nikkei and Seoul Composite closed up by 1.60%, 1.57%, 0.75%, 0.27% at 18,171, 2,329.08, 9,552.50 and 1,395.89 respectively.
European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 1.38% at 5,001.17 and in London FTSE 100 is trading higher by 1.36% at 4,447.35.
The BSE Realty index surged (6.76%) or 241.95 points to close at 3,819.89. Main gainers are Ansal Infra (9.58%), India Bull Real (9.13%), Phoenisx Mill (9.09%), DLF (8.41%), Orbit Co (7.74%) and Omaxe Ltd. (5.67%).
The BSE Capital Goods index surged (4.13%) or 472.67 points at 11,921.39. Scrips that mostly gained are Reliance Industrial Infra (13.56%), Jyothi Structure (9.98%), AIA Engineeering (8.04%), Punj Lloyd (7.55%), L&T (4.75%) and Praj Industries (4.45%).
The BSE CD index also ended higher by (3.55%) or 94.59 points at 2,758.07. Blue Star (6.23%), Videocon Industries (5.22%), Titan Industries (4.19%), Gitanjali Gems (1.35%) and Rajesh Export (0.56%) ended in positive territory.
The BSE Auto index grew (3.41%) or 151.95 points to close at 4,610.61. Gainers are Ashok Leyland (8.71%), Bajaj Auto (8.27%), Mahindra & Mahindra (5.67%) and Maruti Suzuki (2.32%).
The BSE Oil and Gas advanced (3.31%) or 333.60 points at 10,419.47. Gainers are HPCL (8.33%), Indian Oil (6.90%), Cairn India (6.12%), Gail India (5.01%), RPL (3.75%) and Aban Offshore (3.51%).
The BSE Metal stocks gained (3.11%) or 328.47 points to close at 10,878.42. Gainers are NMDC (6.35%), Tata Steel (5.92%), SAIL (5.17%), Jai Corp (5%) and Hindalco Industries (3.93%).
The BSE IT increased (2.37%) or 69.40 points at 2,997.55. Gainers are Financial Technologies (8.56%), TCS (6.05%), Wipro (3.57%) and Tech Mahindra (2.22%).
Bank of India surged 4.21% to close at Rs337.85. The bank has announced the Audited Consolidated results for the Year ended March 31, 2008. The Group has posted a net profit of Rs 30875.40 million for the year ended March 31, 2009 as compared to Rs 19598.40 million for the year ended March 31, 2008. Total Income has increased from Rs 145284.10 million for the year ended March 31, 2008 to Rs 194930.50 million for the year ended March 31, 2009.
Indian Oil Corporation Ltd galloped 6.90% to Rs609.30. The company has posted a net profit of Rs 66229.60 million for the quarter ended March 31, 2009 where as the same was net loss at Rs (4142.70) million for the quarter ended March 31, 2008. Total Income is Rs 605998.00 million for the quarter ended March 31, 2009 where as the same was at Rs 717928.20 million for the quarter ended March 31, 2008.
Tata Motors Ltd shot up 1.22% to close at Rs336.70. The company has posted a net profit of 10012.60 million for the year ended March 31, 2009 as compared to Rs 20289.20 million for the year ended March 31, 2008. Total Income has decreased from Rs 292225.90 million for the year ended March 31, 2008 to Rs 265867.60 million for the year ended March 31, 2009.
IVRCL Infrastructures & Projects Ltd closed up by 9.17% at Rs329.15. The company has posted a net profit of Rs 798.823 million for the quarter ended March 31, 2009 as compared to Rs 733.028 million for the quarter ended March 31, 2008. Total Income has increased from Rs 13227.416 million for the quarter ended March 31, 2008 to Rs 16359.305 million for the quarter ended March 31, 2009.
BSE Bulk Deals to Watch - May 29 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
29/5/2009 522150 ADITYA FORGE DHANVANTIHEMCHANDGALA S 27300 3.23
29/5/2009 532981 ANU LABS KABIR GOBIND GUMNANI S 800000 33.47
29/5/2009 512535 ASAHI INFR P JATINRATHI S 200000 1.47
29/5/2009 522005 AUSTIN ENGG.* BAJAJ HOLDINGS & INVESTMENTS LTD. S 18799 61.15
29/5/2009 512149 AVANCE TECHN JASMIN SUSILKUMAR BAJORIYA B 25000 20.37
29/5/2009 512149 AVANCE TECHN CHANDRAKANTBSHAH B 30000 20.37
29/5/2009 512149 AVANCE TECHN JASMINSBAJORIYA B 40000 20.37
29/5/2009 512149 AVANCE TECHN VIHANGIDSHAH S 50000 20.37
29/5/2009 512149 AVANCE TECHN JITENDRARAMANIKLALMODY S 29690 20.37
29/5/2009 532406 AVANTEL LTD* AVANTEL LIMITED B 55401 49.00
29/5/2009 532995 AVON CORP DHEERAJ KUMAR . . . . ... B 97448 8.59
29/5/2009 531733 BAFNA SPINNI PUKHRAJHIRACHANDBAFNA S 250000 2.24
29/5/2009 531719 BHAGIR CHE I VVSS ESTATES PRIVATE LIMITED B 39500 53.88
29/5/2009 531719 BHAGIR CHE I VVSS AGRO FARMS PRIVATE LIMITED B 60500 54.37
29/5/2009 531719 BHAGIR CHE I SSVV ESTATES PRIVATE LIMITED S 40000 53.88
29/5/2009 531719 BHAGIR CHE I SSVV AGRO FARMS PRIVATE LIMITED S 60500 54.37
29/5/2009 512253 BIO GREEN I RAMESHJAMNADASBHAYANI S 50000 13.19
29/5/2009 512253 BIO GREEN I PANKAJJAMNADASBHAYANI S 50000 13.19
29/5/2009 530207 BRAWN PHARMA R K TULI S 15200 34.68
29/5/2009 590076 CAMSON BIO GRAND SLAM INVESTMENT PVT LTD S 50000 42.85
29/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD B 831060 5.95
29/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD B 177200 6.00
29/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 580255 5.99
29/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD S 392200 5.95
29/5/2009 505923 CEEKAY DIAKI VISHWAS SECURITIES LTD. B 26510 32.70
29/5/2009 531270 DAZZEL CONFI JAYESHRAMESHBHAIRAIYANI B 30000 6.08
29/5/2009 531270 DAZZEL CONFI SRIDEVI.MEDABALMI S 34985 6.08
29/5/2009 521216 DHANALA RO S VAISHAK SHARES LIMITED B 30500 9.79
29/5/2009 521216 DHANALA RO S NANDISHGKUMAR S 30500 9.79
29/5/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH B 36124 101.96
29/5/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH S 35584 102.01
29/5/2009 532622 GATEWAY DIST PEGASUS STOCK & SHARES PVT LTD B 747630 98.09
29/5/2009 532715 GITANJALI GE* BNP PARIBAS ARBITRAGE B 453269 123.85
29/5/2009 532715 GITANJALI GE* SWISS FINANCE CORPORATION (MAURITIUS) LIMITED S 453269 123.85
29/5/2009 500179 HCL INFOSYS BNP PARIBAS ARBITRAGE B 928767 117.50
29/5/2009 500179 HCL INFOSYS ABN AMRO BANK NV S 928767 117.50
29/5/2009 504176 HIGH ENERGY BP FINTRADE PRIVATE LIMITED B 7015 124.27
29/5/2009 516078 JUMBO BAG LT J V STOCK BROKING PRIVATE LIMITED B 35951 28.87
29/5/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 40500 29.14
29/5/2009 516078 JUMBO BAG LT HEMENDRA AGARWAL B 51000 28.60
29/5/2009 532081 K SERA SERA S V ENTERPRISES B 426356 14.42
29/5/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD S 600000 14.49
29/5/2009 532081 K SERA SERA S V ENTERPRISES S 426356 14.48
29/5/2009 511131 KAMAN HSG MOHANKARNANI S 88686 33.14
29/5/2009 532283 KASHYAP TEC JMP SECURITIES PVT LTD B 3407935 1.21
29/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 60686 7.98
29/5/2009 530255 KAY POW PAP B.S.KHANDELWAL B 127647 8.20
29/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 70961 8.20
29/5/2009 530255 KAY POW PAP PRAKASHCHANDGUPTA S 59908 8.17
29/5/2009 530255 KAY POW PAP GIRRAJPRASADGUPTA S 65000 7.98
29/5/2009 590011 MOVING PICTU-PMS GAURAVCHHABRA B 60000 5.65
29/5/2009 590011 MOVING PICTU-PMS BHARATH KUMAR BANAVARA ESWARAIAH S 76355 5.65
29/5/2009 532045 NEXXOFT INFO HARSHAHARESHCHHATBAR S 52216 13.79
29/5/2009 532045 NEXXOFT INFO SNEHAPANKAJDESAI S 50000 13.79
29/5/2009 532045 NEXXOFT INFO MUKESHHIRALALDOCTARIA S 50000 13.75
29/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 62239 33.06
29/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD S 72701 33.15
29/5/2009 532986 NIRAJ CEMENT RAJ CORPORATION S 150000 33.08
29/5/2009 590057 NORTHGATE TE Naman Securities & Finance Pvt. Ltd. B 240329 44.80
29/5/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD B 250925 44.75
29/5/2009 590057 NORTHGATE TE BP FINTRADE PRIVATE LIMITED B 200066 44.81
29/5/2009 590057 NORTHGATE TE Naman Securities & Finance Pvt. Ltd. S 237027 44.75
29/5/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD S 217925 44.81
29/5/2009 533008 OCL IRON&ST GARIMA BUILDPROP PRIVATE LIMITED B 13414316 21.00
29/5/2009 533008 OCL IRON&ST RAGHU HARI DALMIA S 13414316 21.00
29/5/2009 532827 PAGE INDUSTR ICICI PRUDENTIAL MUTUAL FUND A/C DISCOVERY FUND B 80000 450.00
29/5/2009 570002 PANTALBNDVR BLESSINGS MERCANTILE PRIVATE LIMITED B 113757 236.25
29/5/2009 570002 PANTALBNDVR ASHITABPAREKH S 82157 236.25
29/5/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD B 157596 1076.77
29/5/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD S 157596 1077.76
29/5/2009 526753 ROSELABS LTD AYUSHSHIVKUMARAGRAWAL S 143000 10.03
29/5/2009 512105 SHREENATH ASHWIN C JAIN (HUF) B 1500 62.50
29/5/2009 512105 SHREENATH S K INVESTMENTS S 1500 62.50
29/5/2009 500285 SPICEJET LTD JMP SECURITIES PVT LTD B 1996777 23.60
29/5/2009 519228 TEMPT.FOODS HSBC BANK (MAURITIUS) LIMITED S 311914 39.51
29/5/2009 531917 TWINSTA SO E MITESHVERSHIVORA B 139750 2.54
29/5/2009 531917 TWINSTA SO E VIJAY CHIMANLAL THAKKAR S 139750 2.54
29/5/2009 532765 USHER AGRO OODNAP AGROTECH LIMITED S 620000 37.24
29/5/2009 532765 USHER AGRO TAIB BANK A/C TSML S 127575 36.98
29/5/2009 532765 USHER AGRO DRB SECURITIES PVT LTD S 235074 37.06
29/5/2009 531874 VENUS VENT HARISHTARSEMMITTAL B 35000 39.43
29/5/2009 531874 VENUS VENT VIPUL HIRALAL SHAH S 36520 39.50
29/5/2009 512217 WOOLITE MERC UMESHPURUSHOTTAMCHAMDIA B 55912 15.76
29/5/2009 512217 WOOLITE MERC PAAWANRAMESHSEKSARIA S 10000 15.75
29/5/2009 512217 WOOLITE MERC PARAG VIPIN SHAH HUF S 13500 15.75
29/5/2009 512217 WOOLITE MERC SUNITARAMESHSEKSARIA S 22425 15.75
29/5/2009 512217 WOOLITE MERC PIONEER NIRMAN INDIA PRIVATE LIMITED S 10737 15.87
NSE Bulk Deals to Watch - May 29 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
29-MAY-2009,ADLABSFILM,Adlabs Films Limited,PARWATI CAPITAL MARKET PRIVATE LIMITED,BUY,260831,352.15,-
29-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,2711991,24.16,-
29-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,7748595,25.16,-
29-MAY-2009,NORTHGATE,Northgate Technologies Li,BP FINTRADE PRIVATE LIMITED,BUY,187692,44.48,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,UNITED STEEL ALLIED INDUSTRIES PRIVATE LIMITED,BUY,305000,68.86,-
29-MAY-2009,PAGEIND,Page Industries Limited,ICICI PRUDENTIAL MUTUAL FUND A/C DISCOVERY FUND,BUY,80000,450.00,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,BUY,106780,1082.98,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,BUY,124311,1082.67,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,KANUDIA CAPITAL & MANAGEMENT SERVICES PVT. LTD.,BUY,155728,86.05,-
29-MAY-2009,TUBEINVEST,Tube Investments Ltd,MARUICHI STEEL TUBE LIMITED,BUY,2000000,44.05,-
29-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1397140,23.01,-
29-MAY-2009,ADLABSFILM,Adlabs Films Limited,PARWATI CAPITAL MARKET PRIVATE LIMITED,SELL,260831,352.31,-
29-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,2513559,24.14,-
29-MAY-2009,EDSERV,Edserv Softsystems Limite,JAIRAM RAMCHAND JHAMTANI,SELL,75023,26.28,-
29-MAY-2009,IBREALEST,Indiabulls Real Estate Li,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,SELL,2252523,241.45,-
29-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,7809511,25.17,-
29-MAY-2009,JSWSTEEL,JSW Steel Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,1296961,557.13,-
29-MAY-2009,MAHLIFE,Mahindra Lifespace DevLtd,CLSA (MAURITIUS) LIMITED,SELL,500000,284.15,-
29-MAY-2009,NORTHGATE,Northgate Technologies Li,BP FINTRADE PRIVATE LIMITED,SELL,273313,44.62,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,ANNIRUDDH MUNDRA,SELL,222030,68.82,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,BADRINATH ADVISORY PVT LTD,SELL,270000,66.89,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,SELL,106780,1083.74,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,SELL,83511,1095.02,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,KANUDIA CAPITAL & MANAGEMENT SERVICES PVT. LTD.,SELL,155728,85.52,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,MAVI INVESTMENT FUND LTD DEUTSCHE BANK,SELL,100000,86.10,-
29-MAY-2009,TUBEINVEST,Tube Investments Ltd,UTI MUTUAL FUND-UT042,SELL,2000000,44.05,-
29-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1370036,23.04,-
Turnover declines
Nifty June 2009 futures at discount
Nifty June 2009 futures were at 4,442.60, at a discount of 6.35 points as compared to the spot closing of 4,448.95. Turnover in NSE's futures & options (F&O) segment was Rs 63,060.58 crore much lower than Rs 90,315.67 crore on Thursday, 28 May 2009.
Suzlon Energy June 2009 futures were at premium at 99.05 compared to the spot closing of 97.90.
Tata Steel June 2009 futures were at discount at 399.65 compared to the spot closing of 405.35.
Jaiprakash Associates June 2009 futures were near spot price at 208 compared to the spot closing of 208.10.
In the cash market, the S&P CNX Nifty surged 111.85 points or 2.58% at 4,448.95.
Market gains for the 12th straight week
Key benchmark indices surged to 8-month high, extending gains for the twelfth straight week, boosted by strong inflow from foreign funds and positive global cues. Further signs of recovery in domestic and global economy and anticipation of a strong push for economic reforms by the newly elected United Progressive Alliance (UPA) government bolstered the bulls. The market gained in 4 out of 5 trading sessions in the week ended Friday, 29 May 2009. The BSE Small-Cap and BSE Mid-Cap indices outperformed the Sensex
On the back of higher government expenditure, India's economy expanded 5.8% in the fourth quarter ended March 2009 compared with a year earlier. That matched a revised gain of the previous quarter, government data announced at 11:00 IST on Friday, 29 May 2009 showed. Economists were expecting a 5% increase. The GDP grew 6.7% in the year ended March 2009, slowing from 9% in the previous year.
A leading indicator of German business activity rebounded in May 2009, hinting that the economic slump is easing, though the gain was less than expected. The Ifo business climate index, released on Monday, 25 May 2009 rose for the second straight month, to 84.2 in May 2009 from 83.7 in April 2009. The outcome fell below forecasts for a reading of 85.
In Asia, Bank of Japan Governor Masaaki Shirakawa said the economy is likely to experience a mild recovery as exports and production improve. He, however, said the outlook on the economy remains fraught with considerable uncertainties.
The 30-share BSE Sensex gained 738.10 points or 5.31% to 14,625.25, in week ended Friday, 29 May 2009. The broader 50-issue Nifty jumped 210.45 points, or 4.96%, to end the week at 4448.95
The BSE Sensex has surged 4977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6464.85 points or 79.22%.
The BSE Mid-Cap index gained 301.06 points or 6.33% to 5,056.74 and the BSE Small-Cap index advanced 473.66 points or 8.59% to 5,986.82 in the week ended 29 May 2009. Both these indices outperformed the Sensex
Key benchmark indices saw divergent trend on first day of the trading week on Monday, 25 May 2009. However, frenzied buying continued in small-cap and mid-cap shares in what was a highly volatile trading session. The BSE 30-share Sensex rose 26.07 points or 0.19% to 13,913.22. However the S&P CNX Nifty fell 0.95 points or 0.02% to 4,237.55.
The market lost ground on Tuesday, 26 May 2009, on concerns a glut of share sales will soak liquidity from the secondary market. The BSE 30-share Sensex fell 323.99 points or 2.33% to 13,589.23 and the S&P CNX Nifty slipped 120.85 points or 2.85% to 4,116.70.
Bulls were in back in charge of the proceedings on Wednesday, 27 May 2009 as key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. The BSE 30-share Sensex jumped 520.41 points or 3.83% to 14,109.64 and the S&P CNX Nifty gained 159.35 points or 3.87% to 4,276.05.
Finance Minister Pranab Mukherjee's comments that the government would take advantage of its political stability and push long-pending reforms boosted the bourses on Thursday, 28 May 2009. However volatility was high as traders rolled over positions from May 2009 series to June 2009 series in the futures & options (F&O) segment on last day of expiry. The BSE 30-share Sensex surged 186.37 points or 1.32% to 14,296.01 and the S&P CNX Nifty advanced 61.05 points or 1.43% to 4,337.10
Key benchmark indices extended gains for third straight session on Friday, 29 May 2009 as data showing a better-than-expected fourth quarter GDP growth strengthened expectations the economy will grow faster in the fiscal second-half of the year that began on 1 April 2009. The BSE 30-share Sensex rose 329.24 points or 2.3% to 14,625.25 its highest closing since 10 September 2008. The S&P CNX Nifty rose 111.85 points or 2.58% to 4,448.95 its highest closing since 9 September 2008.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 4.32% to Rs 2277.50 in the week on reports it has struck gas in two blocks (D3 and D9), with estimates putting the natural gas reserves at 20 trillion cubic feet (tcf). Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.
Shares of state-run oil firms surged boosted by Oil Minister Murli Deora's comments on deregulation of oil prices. BPCL (up 3.90%), HPCL (up 13.28%), and IOC (up 17.06%), gained.
Soon after taking charge, Oil Minister Deora on Friday, 29 May 2009 said a proposal to allow firms set retail fuel prices based on market prices would be sent to cabinet for discussion within six weeks. Currently the government sets prices for retail fuel such as petrol and diesel below actual prices, and partially subsidises state-run marketing firms for the difference.
India's largest oil exploration firm by revenue Oil & Natural Gas Corporation rose 12.49% to Rs 1175.95 on a recent newspaper report that the government may double the price of natural gas. The government may double the administered price of natural gas to $4.2 per million British thermal units. The increase will benefit ONGC and Oil India which sell the fuel at prices fixed by the government, according to the report.
India's largest construction & engineering firm by sales Larsen & Toubro gained 8.01% to Rs 1405.60 after net profit rose 3.28% to Rs 998.52 crore on 24.01% rise in total income to Rs 10835.79 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours on Thursday, 28 May 2009.
Notwithstanding a slowdown in the Indian capital goods and infrastructure sectors, L&T's order intake rose 23% to Rs 51621 crore in the year ended March 2009 (FY 2009). The order book stood at Rs 70319 crore as on 31 March 2009, which is two times its revenue of Rs 34045 crore in FY 2009, giving a strong revenue visibility.
India's largest electric equipment maker by sales Bharat Heavy Electricals advanced 9.74% to Rs 2174.90 as net profit rose 21.29% to Rs 1347.47 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after trading hours on Wednesday, 27 May 2009
India's second largest private sector power generation firm by sales Reliance Infrastructure shot up 13.93% to Rs 1276.85. The board of Reliance Infrastructure on Sunday, 24 May 2009, approved a new preferential offer of 43 million warrants to the company's promoters, convertible at Rs 1,000 a share, cancelling the current offer of equal size which expires on 19 July 2009 and which carried a conversion price of Rs 1,822 a share. If fully exercised the promoters the Anil Dhirubhai Ambani group would raise their stake in the company to 48%, from 38% currently, at a price of Rs 4,300 crore (against over Rs 7,800 crore through the earlier one).
Metal stocks gained on firm prices on the London Metal Exchange. Sterlite Industries (up 22.59%), Hindalco Industries (up 10.14%), Steel Authority of India (up 9.05%), and Tata Steel (up 11.85%), edged higher
India's largest drugmaker by sales Ranbaxy Laboratories jumped 26.21% to Rs 278.80. In a swift and unexpected move, Japanese drug maker Daiichi Sankyo on Sunday, 24 May 2009, took complete control of Ranbaxy Laboratories in which it had acquired 63.9% stake in June 2008 after all representatives of the former Indian promoter family resigned from the board. Following a board meeting on Sunday morning, former promoter Malvinder Mohan Singh, whose term was originally supposed to run till 2013, resigned as Chairman and Managing Director.
Besides Singh, two other Singh-family Board nominees, Sunil Godhwani and Balvinder Dhillon, also resigned. Tsutomu Une from Daiichi has been appointed chairman. Atul Sobti, who was originally nominated on the board by the former Indian promoters, has been appointed as CEO and MD for three years.
bank stocks rose on expectations of financial sector reforms by the Congress-led UPA government. India's second largest private sector lender by market capitalisation ICICI Bank rose 5.59% to Rs 740.70. India's largest private sector bank by market capitalisation HDFC Bank rose 5.35% to Rs 1442.35.
India's largest commercial bank by branch network State Bank of India jumped 7.93% to Rs 1869.10 on reports its credit growth could rise 25% in 2009-10, higher than an expected overall loan growth of 19-20% for the banking sector.
Auto stocks gained on hopes the new government will treat auto sector as a priority sector and attend to some pressing concerns of the sector, mainly differential excise duty, lack of retail finance and lack of focus on infrastructure. Maruti Suzuki (up 6.41%), Hero Honda Motors (up 3.62%), and Bajaj Auto (up 8.95%), rose
India's largest tractor maker by sales Mahindra & Mahindra spurted 7.17% to Rs 675.50 after its net profit jumped 89% to Rs 418.07 crore in Q4 March 2009 over Q4 March 2008. The results were announced during market hours on 28 May 2009.
However India's largest truck maker by sales Tata Motors fell 2.60% to Rs 336.70. The company reported a 50.7% fall in net profit to Rs 1001.26 crore in the year ended March 2009 over the year ended March 2008. The results were announced during market hours on Friday, 29 May 2009.
Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF (up 20.77%), Indiabulls Real Estate (up 17.55%), and Unitech (up 11.93%), rose.
In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).
India's top mobile operator by sales, Bharti Airtel lost 4.45% to Rs 819.65 on concerns of earnings dilution after the company on 25 May 2009 said it is in talks to buy 49% of Johannesburg-based MTN, the first step in a potential $23 billion merger. The deal may also see MTN, Africa's largest mobile-phone company, buy 36% of Bharti Airtel
Outsourcing focussed IT rose on a strong recent reading of US consumer confidence index. US is the biggest market for Indian IT firms.
India's largest software services exporter by sales TCS rose 10.38% to Rs 699.75. India's third largest software services exporter by sales Wipro gained 3.49% to Rs 381.55. India's second largest software services exporter by sales Infosys rose 5.44% to Rs 1602.
Shares of state-run companies rose on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election. NMDC (up 49.53%), HMT (up 27.28%), Shipping Corporation of India (up 5.20%), rose.
It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.
Swiss bank UBS AG's lead economic indicator rose for the fourth consecutive month in April 2009, pointing to a rebound in industrial activity by June 2009, it said in a note on Friday, 29 May 2009.
UBS said the key variables which have boosted its lead indicator index were the government bond yield spread, revival in foreign capital inflows and a rally in the stock markets.
Finance Minister Pranab Mukherjee on Thursday, 27 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years. The minister said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.
Addressing a press conference, Mukherjee said the industry and business have been hurt by high cost of finance but added that coordinated steps taken by central bank and government have stabilised the economy. He said the liquidity situation eased considerably adding that international capital flows have resumed.
The FM said he hoped banks would take advantage of the monetary policy and make cheap credit available.
The Federation of Indian Export Organisations (FIEO) said on Wednesday, 27 May 2009 that India's exports may have fallen by a third in April 2009 as a world-wide slump continued to hurt overseas demand for local goods. Earlier this month, government data showed India's exports declined by a third in March 2009, its sixth straight fall, dragging down the full year's growth to a paltry 3.4% at $168.7 billion in 2008/09.
Market likely to extend recent solid surge
The market may extend their twelve-week solid surge in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. Besides global cues, foreign funds activity and the progress of monsoon will also influence market trend. Profit booking cannot be ruled out after a recent solid surge. The BSE Sensex has surged 4977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6464.85 points or 79.22%.
The sentiment on the stock market is likely to remain firm following upgrade in earnings of India Inc as thumping victory of the Congress-led United Progressive Alliance (UPA) in the 15th Lok Sabha elections means political stability for the next five years.
Market may see a pre-budget rally on hopes of accelerated economic reforms and pro-reforms announcements. The UPA government's comfortable victory, without the support of the Left parties, has raised expectations that the government may revive disinvestment programme. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on backburner due to stiff opposition from the Left front.
Also the passage of the Bill to amend the Insurance Act, 1938 is likely to be touched upon in the full Budget likely to be announced in the first week of July 2009. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years. The minister said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.
Meanwhile, the newly elected UPA government will convene the first session of the 15th Lok Sabha from 1 to 9 June 2009. As regards the business of the first Lok Sabha session, the first two days will be reserved for oath of affirmation to the newly elected members. On 3 June 2009, election for the Lok Sabha Speaker would be held, followed by the President's address to both the houses of parliament on 4 June - the date of commencement of Rajya Sabha session. In all, the Parliament session will have seven sittings
Investors will keenly watch President's address to the Lok Sabha on 4 June 2009 which will unveil the new agenda of the government.
Foreign institutional investors (FII) inflow in May 2009 (till 27 May 2009) totaled Rs 17,643.50 crore, with their inflow in calendar year 2009 at Rs 18,356.10 crore. Meanwhile, mutual funds, which are sitting on a large cash pile, are also likely to buy on dips.
Annual monsoon rains, which hit the country's southern coast more than a week ahead of schedule, remained weak and have not advanced northwards, the India Meteorological Department reportedly said on Thursday, 28 May 2009. The annual rain cycle hit the Kerala coast on Saturday, 23 May 2009 and progressed for some time, but has lost pace since Monday, 25 May 2009, reports indicated.
The India Meteorological Department (IMD) on 17 April 2009 forecast a near normal monsoon this year. The IMD said rainfall in the June-September 2009 monsoon season was expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.
Cement and auto stocks are likely to be in action next week as firms announce their May 2009 sales figures.
Hindustan Petroleum Corporation, National Aluminium Company and GMR Infrastructure will declare their March 2009 quarterly results in the week ending 5 June 2009. Aggregate results of 1991 firms showed net profit rose 14.8% on 3.4% rise in sales in Q4 March 2009 over Q4 March 2008.
Sensex, Nifty attain highest closing since early September 2008
The key benchmark indices rose for the straight third day as data showing a better-than-expected fourth quarter GDP growth strengthened expectations the economy will grow faster in the fiscal second-half of the year that began on 1 April 2009. Both the Sensex & S&P CNX Nifty today attained their highest closing levels in the last eight and half months. Also boosting the sentiment Oil Minister Murli Deora said his ministry will seek Cabinet approval for oil price deregulation. His comments reinforced expectations for economic reforms. Positive global cues also the rally.
The market, however, came off the higher level in late trade as banking stocks and index heavyweight Reliance Industries came off the day's highs. The BSE 30-share Sensex rose 329.24 points or 2.3%, off close to 100 points from the day's high. The Sensex today, 29 May 2009, crossed the 14,500 mark. The barometer index has risen 1,036.02 points or 7.62% in last three days.
It was the 12th straight weekly advance for the barometer index BSE Sensex.
Soon after taking charge, Oil Minister Deora today said a proposal to allow firms set retail fuel prices based on market prices would be sent to cabinet for discussion within six weeks. Currently the government sets prices for retail fuel such as petrol and diesel below actual prices, and partially subsidises state-run marketing firms for the difference.
Deora's comments come close on the heels of Finance Minister Pranab Mukherjee's comments on Wednesday, 27 May 2009, that the government would take advantage of its political stability and push long-pending reforms. Expectations of a strong push for economic reforms by the government have send stock prices surging ever since the outcome of the election on 16 May 2009.
Foreign funds have aggressively bought Indian stocks in past 2-1/2 months. FII inflow in May 2009 totaled Rs 17,643.50 crore (till 27 May 2009). FII inflow in calendar year 2009 totaled Rs 18,356.10 crore (till 27 May 2009).
On the back of higher government expenditure, India's economy expanded 5.8% in the fourth quarter ended March 2009 compared with a year earlier. That matched a revised gain of the previous quarter, government data announced at 11:00 IST today showed. Economists were expecting a 5% increase. The GDP grew 6.7% in the year ended March 2009, slowing from 9% in the previous year.
Meanwhile, Swiss bank UBS AG's lead India economic indicator was up for the fourth consecutive month in April 2009, pointing to a rebound in industrial activity by June 2009, it said in a note today, 29 May 2009.
European shares rose on Friday, tracking stock market gains in Japan and the United State, with banks in the lead ahead of a raft of US economic data due for release later in the session. Key benchmark indices in France, Germany and UK were up by between 1.32% to 1.67%.
In Asia, commodity stocks were helped by stronger prices for metals and crude oil. Key benchmark indices in Hong Kong, South Korea and Singapore were up by between 0.27% to 1.6%.
Japan's Nikkei rose 0.75% as Japan's industrial output rose 5.2% on month in April 2009, higher than economists' expectations of a 3.3% gain. On the flip side, the April data also showed a rising jobless rate and tepid household spending. Stock markets in China and Taiwan were closed.
Trading in US index futures showed the Dow could rise 66 points at the opening bell on today, 29 May 2009.
US stocks surged on Thursday 28 May 2009 helped by energy stocks amid rising crude prices and as concerns eased about a series of government debt sales. The Dow gained 103.78 points, or 1.3%, to 8,403.80. The S&P 500 index added 13.77 points, or 1.5%, to 906.83, and the Nasdaq composite index advanced 20.71 points, or 1.2%, to 1,751.79.
In the day's economic news, new-home sales ticked up 0.3% to a seasonally adjusted rate of 352,000 in April 2009, less than expected. March sales were revised sharply lower. Meanwhile, initial jobless claims dropped by 13,000 to 623,000 from a slightly revised 636,000.
Crude shot up to near a six-month high of $65 a barrel after the Organisation of Petroleum Exporting Countries (Opec) left production quotas unchanged and a report showed that US crude inventories were pared down by 5.413 million barrels last week.
Closer home, Finance Minister Pranab Mukherjee on Wednesday, 27 May 2009, said inflation is reasonably down and reviving growth will be the government's top priority. The wholesale price index rose 0.61% in the 12 months to 16 May 2009, matching the previous week's annual rise, government data on 28 May 2009 showed. The government, meanwhile, revised upwards the rate of inflation for the year through 21 March 2009 to 0.84% from 0.31%.
Mukherjee said on Wednesday that reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind. Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years.
Mukherjee said the government will continue to step up spending this year to support growth, risking a wider budget deficit. Growth and employment are not possible without increased spending and borrowing, the Finance Minister said. The prophets of doom have been unduly focusing on increased public spending and a consequent increase in the fiscal deficit, Mukherjee said. "An early return to our recent growth performance will help us get back to our preferred path of fiscal prudence," he said.
The fiscal deficit jumped to an estimated 10.6% of the nation's gross domestic product in the year ended 31 March 2009. India's credit rating may come under pressure if the government is not able to rein in a widening budget deficit, Moody's Investors Service said on, 28 May 2009, said. "The stable outlook on the ratings has recently faced growing pressure, mainly due to substantial deterioration in the fiscal position," Aninda Mitra, a senior analyst at Moody's in Singapore, said in a report today. "Inability of the newly re- elected government to meaningfully adjust fiscal policies and push ahead with reforms could pressurize the foreign currency credit rating".
Moody's Baa2 rating on India's long-term foreign debt is the second-lowest investment grade. The ranking is the highest in South Asia after Kazakhstan's, four levels below China's, two levels under Malaysia's and six levels above Pakistan's.
"If the newly re-elected government proves able to quickly outline and sustain a credible program for reducing consolidated deficits, then the sustainability prospects for general government debt would improve," Moody's said in its report. These trends could boost the outlook for the country's local currency credit ratings. Kamal Nath, trade minister in the previous government, would become minister for road transport and highways.
The comments from Moody's came after Fitch Ratings, which ranks India's debt BBB-, on 14 May 2009 said it expected the new government to step up spending to arrest slowing growth. That would widen India's national budget deficit, including state government finances, to more than 10% of GDP for a second year in a row, Fitch said.
According to analysts the new government should give priority to reforming the subsidy mechanism aimed at improving delivery mechanism while at the same time reducing costs. Analysts also say labour reforms are needed as a number of youngsters enter the job market.
The FM on Wednesday said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.
Mukherjee said the industry and business have been hurt by high cost of finance but added that coordinated steps taken by central bank and government have stabilised the economy. He said the liquidity situation eased considerably adding that international capital flows have resumed.
The FM said he hoped banks would take advantage of the monetary policy and make cheap credit available. "One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action," he said. His comments came in the backdrop of a newspaper report that state-run banks plan to cut lending rates by 100-150 basis points within the next fortnight after a finance ministry directive to lower interest rates in line with falling cost of funds.
On the political front, ending nearly a fortnight of suspense, the United Progressive Alliance (UPA) cabinet under the leadership of Prime Minister Manmohan Singh finally took shape on Thursday. Key cabinet ministers who retained their portfolios are Jaipal Reddy (urban development), Sushil Kumar Shinde (power), Vayalar Ravi (overseas Indian affairs), A. Raja (communications and information technology), Murli Deora (petroleum and natural gas), Kumari Selja (housing and urban poverty alleviation), Subodh Kant Sahay (food processing industries) and M.S. Gill (youth affairs and sports).
Anand Sharma was made commerce and industry minister. Kamal Nath, trade minister in the previous government, would become minister for road transport and highways. Kapil Sibal has become the HRD minister and Veerappa Moily is the new law minister.
Vilasrao Deshmukh, who was removed as chief minister of Maharashtra after the 26/11 terror attacks in Mumbai, has got heavy industries and public enterprise and former Himachal Pradesh chief minister Virbhadra Singh the ministry of steel. Former Jammu and Kashmir chief minister Ghulam Nabi Azad was given health and family welfare.
Former Jammu and Kashmir chief minister Farooq Abdullah was allocated the ministry of new and renewable energy. Debutant C.P. Joshi from Rajasthan was given the portfolio of rural development and panchayati raj.
Another first-timer, Shashi Tharoor, was appointed minister of state (MoS) in the external affairs ministry, while Sachin Pilot will take charge as an MoS in the communications and information technology ministry and Agatha Sangma as his counterpart in the rural development ministry.
Jyotiraditya Scindia will now move to the commerce ministry as MoS. Dayanidhi Maran from Dravida Munnetra Kazhagam got textiles and B.K. Handique from Assam was made minister of mines as well as the development of north-eastern region. Among those with independent charge, Praful Patel retains civil aviation. Congress leader Prithviraj Chavan, too retained his post as MoS in the Prime Minister's Office and got additional charge as an MoS for science and technology, ministry of earth as well parliamentary affairs, among others. Salman Khurshid was made MoS with independent charge of corporate affairs, along with minority affairs.
The portfolio announcements came late in the evening, well after the conclusion of the second round of cabinet expansion. On Thursday, 14 cabinet ministers, seven ministers with independent charge and 38 ministers of state were sworn in, while 19 cabinet ministers were sworn in on 22 May. Of the 59 ministers inducted on Thursday, 42 are from the Congress, taking the total number of ministers from the party to 60, including the Prime Minister.
Dr Manmohan Singh was on 22 May 2009 sworn-in as Prime Minister for a second consecutive term. A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.
The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.
A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.
The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.
The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements.
The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest. It remains to be seen whether the government undertakes privatisation of state-run firms.
Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties.
The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322.
The Congress-led UPA defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake in the recently concluded Lok Sabha election. Congress' alliance took 261 seats, sweeping aside its nearest rival the Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents.
The BSE 30-share Sensex rose 329.24 points or 2.3% to 14,625.25, its highest closing since 10 September 2008. The Sensex gained 431.27 points at the day's high of 14,727.28 in late trade. At the day's low of 14,319.87, the Sensex rose 23.86 points in early trade.
The S&P CNX Nifty rose 111.85 points or 2.58% to 4,448.95, its highest closing since 9 September 2008. Nifty June 2009 futures were at 4,442.60, at a discount of 6.35 points as compared to the spot closing of 4,448.95. Turnover in NSE's futures & options (F&O) segment was Rs 63,060.58 crore much lower than Rs 90,315.67 crore on Thursday, 28 May 2009.
The Sensex is up 4,977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,464.85 points or 79.22%.
BSE clocked a turnover of Rs 8,384 crore today, higher than Rs 7,032.24 crore on Thursday, 28 May 2009.
The BSE Mid-Cap index was up 2.46% and the BSE Small-Cap index was up 3.01%. Both the indices outperformed the Sensex.
The BSE Realty index (up 6.76%), %), the BSE Capital Goods index (up 4.13%), the BSE Consumer Durables index (up 3.55%), the BSE Auto index (up 3.41%), the BSE Oil & Gas index (up 3.31%), the BSE PSU index (up 3.3%), the BSE Metal index (up 3.11%), the BSE IT index (up 2.37%), the BSE TECk index (up 2.33%), outperformed the Sensex.
The BSE Healthcare index (down 1.36%), the BSE FMCG index (down 0.25%), the BSE Bankex (up 1.17%) and the BSE Power index (up 2.02%), underperfomed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 2,141 shares rose as compared with 647 that fell. A total of 55 shares remained unchanged.
From the 30 share Sensex pack, 26 stocks rose and rest fell.
Shares of state-run oil firms surged boosted by Deora's comments on deregulation of oil prices. PSU OMCs, BPCL and HPCL rose by between 3.75% to 8.33%.
Indian Oil Corporation rose 6.9% after it posted a net profit of Rs 6620 crore in Q4 March 2009 compared to a net loss of Rs 414 crore in Q4 March 2008. The company announced the result during the market hours today.
India's largest oil exploration firm by revenue Oil & Natural Gas Corp rose 3.99% on a recent newspaper report that the government may double the price of natural gas. The government may double the administered price of natural gas to $4.2 per million British thermal units. The increase will benefit ONGC and Oil India which sell the fuel at prices fixed by the government, according to the report.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.59% to Rs 2277.50 on reports it has struck gas in two blocks (D3 and D9), with estimates putting the natural gas reserves at 20 trillion cubic feet (tcf). But the stock came off the day's high of Rs 2,304. Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.
Analysts expect strong growth in RIL's bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
Bank stocks pared gains as surging bond yields will result in diminution in the value of banks' bond portfolio. The yields on the benchmark 10-year paper climbed for a fifth week to trade at 6.7% at 13:30 IST after a finance ministry official said India may borrow more than planned in the first half of the fiscal year that started on 1 April 2009. Bond prices and bond yields are inversely related.
India's largest private sector bank by net profit ICICI Bank was up 1.54% to Rs 740.70, off the day's high of Rs 754. Its American depository receipt (ADR) rose 5.06% on Thursday, 28 May 2009. India's second largest private sector bank by net profit HDFC Bank was up 0.43% to Rs 1,442.35, off the day's high of Rs 1,459.50. Its ADR rose 2.6% overnight.
India's biggest bank in terms of branch network State Bank of India (SBI) was up 2.2% to Rs 1,869.10, off the day's high of Rs 1,891. As per reports, the Congress-led UPA government may go ahead on a plan to merge six associate banks with State Bank of India to create a Indian banking behemoth. The government may also re-introduce the State Bank of India (Amendment) Bill that will enable Centre to reduce its stake in SBI to 51% from current 59.41%. Meanwhile, bank is reportedly expected to lower prime lending rate in next few weeks.
India's biggest dedicated housing finance firm by operating income HDFC rose 0.18%. As per recent reports, HDFC is likely to cut deposit rates and follow it with a cut in lending rates.
With a decisive mandate, there are expectations that the UPA government may pursue financial sector reforms. There is likely to be some movement on passage of the Bill to amend the Insurance Act, 1938. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.
There are two other Bills - for providing statutory backing to the pensions regulator and to amend the Banking Regulation Act which have been pending in Parliament for over five years, mainly due to the opposition from the Left parties. But now the Left is no longer an ally of the re-elected UPA, the Bills may finally be enacted.
The Pension Fund Regulatory & Development Authority Bill will allow the regulator to issue regulations, instead of the present system where it has to enter into agreements with service providers such as the fund managers. In addition, it will also help PFRDA regulate the pension products offered by life insurance companies. The new government may also announce tax benefits on investment in the New Pension Scheme, which will help make it attractive for investors, reports suggest
The amendments to the Banking Regulation Act will allow foreign investors to exercise voting rights in line with their shareholding. While the Reserve Bank of India has concerns on greater play for foreign banks, it will have no reservations in getting more powers for regulation of banks and supercession of borads, which are provided for in the Bill.
The government may also re-introduce the Micro-finance Development and Regulation Bill.
Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. Housing Development & Infrastrucutre, Indiabulls Real Estate, Unitech rose by between 3.07% to 9.13%.
India's largest realty player by market capitalization DLF rose 8.41% on reports the founders of realtor DLF are planning to sell another 5.5% stake to raise Rs 1000 - 1500 crore. DLF has reportedly denied stake sale plan by promoters.
In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).
Auto stocks rose ahead of monthly sales figures for May 2009 which auto firms will unveil next week. Hero Honda Motors, Maruti Suzuki India, Bajaj Auto rose by between 1.13% to 2.32%.
India's largest tractor maker by sales Mahindra & Mahindra spurted 5.67% extending recent gains after net profit jumped 89% to Rs 418.07 crore in Q4 March 2009 over Q4 March 2008. The results were announced during market hours yesterday, 28 May 2009, when the stock ended 2.16% higher at Rs 638.80.
Capital goods and construction stocks rose on expectations of increased infrastructure spending by the Congress-led UPA government to boost growth. Other capital goods stocks, Thermax, ABB, Praj Industries Siemens and Punj Lloyd rose by between 1.04% to 7.55%.
India's largest construction & engineering firm by sales Larsen & Toubro rose 4.75% after company's net profit rose 3.28% to Rs 998.52 crore on 24.01% rise in total income to Rs 10835.79 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours yesterday when the stock had risen 2.32%.
Notwithstanding a slowdown in the Indian capital goods and infrastructure sectors, L&T's order intake rose 23% to Rs 51621 crore in the year ended March 2009 (FY 2009). The order book stood at Rs 70319 crore as on 31 March 2009, which is two times its revenue of Rs 34045 crore in FY 2009, giving a strong revenue visibility.
India's largest electric equipment maker by sales Bharat Heavy Electricals rose 2.71% as net profit rose 21.29% to Rs 1347.47 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after trading hours on Wednesday, 27 May 2009
Reliance Infrastructure rose 0.46%. The board of Reliance Infrastructure on Sunday, 24 May 2009, approved a new preferential offer of 43 million warrants to the company's promoters, convertible at Rs 1,000 a share, cancelling the current offer of equal size which expires on 19 July 2009 and which carried a conversion price of Rs 1,822 a share. If fully exercised the promoters the Anil Dhirubhai Ambani group would raise their stake in the company to 48%, from 38% currently, at a price of Rs 4,300 crore (against over Rs 7,800 crore through the earlier one).
Construction stocks rose on expectations that the Congress-led UPA government will increase infrastructure spending, including new power plants, to boost growth. Hindustan Construction Company, Nagarjuna Construction Company, IVRCL Infrastructure & Projects and Gammon Infrastructure, rose by between 7.38% to 10.11%.
Cement stocks rose as a likely thrust on the infrastructure spending by the new government would boost demand. ACC, Ambuja Cements, India Cements and Ultratech Cements rose, by between 2.63% to 8.56%. Cement firms will announce their monthly sales figures for May 2009 next week.
Steel makers rose after the steel minister said he will consider additional tax on steel imports. Steel Authority of India, JSL, Tata Steel, JSW Steel, Jindal Steel & Power and Bhushan Steel rose by between 0.2% to 5.17%.
Virbhadra Singh, the new steel minister said today, 29 May 2009, that India will consider slapping additional import tax on steel to protect the domestic industries from cheap imports. He added that the issue has to be addressed immediately.
Shares of state-run companies rose on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election. Dredging Corporation of India, HMT, Shipping Corporation of India, Central Bank of India rose by between 2.15% to 5%.
It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.
Airlines stocks rose on hopes the newly elected government may allow foreign direct investment in the sector.Jet Airways, Kingfisher Airlines and SpiceJet rose by between 3.37% to 9.96%.
The Indian aviation industry has been plagued by large losses, rising debt levels and a serious liquidity crunch. According to reports, measures like increasing the present cap on Foreign Direct Investment (FDI) in the aviation sector as well as withdrawing the restrictions on investment by foreign airlines in the domestic carriers are important to save the industry from the current crisis that it finds itself in.
Currently, foreign airlines are not allowed to pick up equity in aviation companies while foreign investors and financial institutions can hold up to a 49% stake.
Cals Refineries clocked the highest volume of 4.59 crore shares on BSE. Unitech (3.2 crore shares), Suzlon Energy (2.5 crore shares), Reliance Natural Resources (2.11 crore shares) and Ispat Industries (1.97 crore shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 362.47 crore on BSE. DLF (Rs 298.44 crore), Unitech (Rs 256.57 crore), Indiabulls Real Estate (Rs 246.69 crore) and Suzlon Energy (Rs 244.64 crore) were the other turnover toppers in that order.
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