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Tuesday, February 10, 2009
Nagarjuna Fertilizers promoters pledge 24.56% stake
Nagarjuna Fertilizers & Chemicals today said its promoters have pledged a 24.56 per cent stake of the company for an undisclosed amount.
In a filing to the Bombay Stock Exchange, the company said that its promoters have pledged over 10.51 crore shares, representing a 24.56 per cent stake of the company.
KS Raju and Associates Holdings has pledged over 1.28 crore shares, representing a three per cent stake, and KRR Holdings has pledged over 75 lakh shares, a 1.76 per cent stake in the company, the filing added.
Further, Corporate Securities and Holdings has pledged over six lakh shares, representing a 0.16 per cent stake, and Paschim Holdings has pledged a 0.13 per cent stake, over five lakh shares of the company, the filing said.
Nagarjuna Management Services has pledged over 4.77 crore shares, an 11.15 per cent stake in the company, and Chinnar Securities has pledged over 40 lakh shares, a 0.94 per cent stake, it added.
Nagarjuna Holdings has pledged 3.17 crore shares, representing a 7.42 per cent stake of the company, it said.
Dabur India promoters pledge 9.25% stake
FMCG firm Dabur India today said five of its promoters have pledged 9.25 per cent stake of the firm, having over 86.50 crore total outstanding shares.
The promoters -- VIC Enterprises, Puran Associates, Chowdry Associates, Ratna Commercial Enterprises and Gyan Enterprises -- pledged over eight crore equity shares, Dabur India said in a filing with the Bombay Stock Exchange.
The company, having interests in healthcare, personal care and food products, owns various brands including Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. It operates in consumer care, international business, consumer healthcare and retail segments
BSE Bulk Deals to Watch - Feb 10 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
10/2/2009 512493 GARNET INTL HIGHPOINT TRADING CO. PVT. LTD B 42500 20.25
10/2/2009 531366 KOHINOOR BRO BASMATI SECURITIES PVT LTD B 1859739 3.63
10/2/2009 531366 KOHINOOR BRO PRABHUDAS LILLADHER PVT. LTD. B 561992 3.24
10/2/2009 531366 KOHINOOR BRO BASMATI SECURITIES PVT LTD S 2239739 3.21
10/2/2009 531366 KOHINOOR BRO PRABHUDAS LILLADHER PVT. LTD. S 566992 3.42
10/2/2009 526263 MOLDTEK TECH RELIANCE CAPITAL ASSET MGT LT. S 29143 25.00
10/2/2009 531215 RTS POWER CO JITENDRA MANNALAL JAIN B 51996 300.94
10/2/2009 531215 RTS POWER CO JITENDRA MANNALAL JAIN S 51996 300.70
10/2/2009 508954 SANJAY LEAS SEEMA M.VARDHAN B 5000 30.63
10/2/2009 502742 SINTEX INDUS T ROWE PRICE INTERNATIONAL A C NEW ASIA FUND B 685066 112.39
10/2/2009 531249 WELL PACK PA SANTOSH SHAHRA S 67010 64.30
10/2/2009 531249 WELL PACK PA VISHESHSHAHRA S 46500 64.80
NSE Bulk Deals to Watch - Feb 10 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
10-FEB-2009,ABGSHIP,ABG Shipyard Limited,BONANZA PORTFOLIO LIMITED,BUY,307301,88.70,-
10-FEB-2009,ABGSHIP,ABG Shipyard Limited,MULTIPLIER S AND S ADV PVT LTD,BUY,320068,89.32,-
10-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,140785,1791.34,-
10-FEB-2009,EDUCOMP,Educomp Solutions Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,131241,1765.31,-
10-FEB-2009,EDUCOMP,Educomp Solutions Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,113300,1755.84,-
10-FEB-2009,EVINIX,Evinix Accessories Limite,PANKHURI INVESTEMENTS & SECURI,BUY,770000,2.50,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,BP FINTRADE PRIVATE LIMITED,BUY,59227,167.89,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,MANSUKH SECURITIES & FINANCE LTD,BUY,102301,163.53,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,NIKUNJ K SHAH,BUY,62053,166.12,-
10-FEB-2009,SINTEX,Sintex Industries Ltd.,T.ROWE PRICE INTERNATIONAL A/C NEW ASIA FUND,BUY,721425,117.43,-
10-FEB-2009,UNITECH,Unitech Ltd,AMBIT SECURITIES BROKING PVT. LTD.,BUY,10593717,30.89,-
10-FEB-2009,ABGSHIP,ABG Shipyard Limited,BONANZA PORTFOLIO LIMITED,SELL,260001,88.79,-
10-FEB-2009,ABGSHIP,ABG Shipyard Limited,MULTIPLIER S AND S ADV PVT LTD,SELL,208079,89.60,-
10-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,140785,1792.64,-
10-FEB-2009,EDUCOMP,Educomp Solutions Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,17496,1791.60,-
10-FEB-2009,EVINIX,Evinix Accessories Limite,PADAM PRECISION DIES & COMPONENTS PRIVATE LIMITED,SELL,770000,2.50,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,BP FINTRADE PRIVATE LIMITED,SELL,59228,167.95,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,MANSUKH SECURITIES & FINANCE LTD,SELL,102401,164.12,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,NIKUNJ K SHAH,SELL,62053,166.53,-
10-FEB-2009,KALINDEE,Kalindee Rail Nirman (Eng,YAMNOTRI VINIMAY PVT.LTD.,SELL,129700,162.20,-
10-FEB-2009,UNITECH,Unitech Ltd,AMBIT SECURITIES BROKING PVT. LTD.,SELL,10593845,30.92,-
Realty, banking shares power Sensex to one-month high
Key benchmark indices extended last two days' strong gains on hopes an interim budget will contain fiscal incentives to revive sagging growth. High volatility was witnessed in the second half of the trading session. The BSE 30-share Sensex gained 63.58 points or 0.66%, shedding 77.40 points from the day's high but up 136.84 points from the day's low. Turnover on BSE surged to Rs 3,716 crore from Rs 2,836.19 crore on Monday, 9 February 2009.
Volatility in index heavyweights Reliance Industries, L&T and ICICI Bank caused volatility in the second half of the trading session. After rallying 1.47% in early afternoon trade, weak European markets pulled the Sensex in the red in mid-afternoon trade. The market moved between positive and negative zone for a while later. It surged in late trade.
Buying by foreign funds also bolstered sentiment. As per the provisional data released by the stock exchanges, foreign funds today, 10 February 2009, bought shares worth a net Rs 368.96 crore. According to data released by stock market regulator Securities & Exchange Board of India (Sebi) Sebi after market hours today, 10 February 2009, foreign institutional investors (FIIs) bought shares worth a net Rs 289.10 crore on Monday, 9 February 2009. There has been substantial selling by foreign funds from the beginning of the calendar year 2009, with net outflow totaling Rs 4,047.30 crore, till 9 February 2009.
The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake. The market is agog with talks that the forthcoming interim budget may offer tax sops and sector-specific stimulus package.
The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. The Central Statistical Organisation (CSO) on Monday, 9 February 2009, pegged India's projected GDP growth for the year ending March 2009 at 7.1%, the slowest in six years and below the previous year's 9%.
European markets slipped today, 10 February 2009, weighed by commodity stocks that fell on persistent worries about metals and crude demand. Key benchmark indices in UK, Germany and France were down by between 1.03% and 1.65%.
Investors turned cautious after US President Barack Obama's administration delayed an announcement of a key financial recovery plan. US index futures showed the Dow could fall 88 points at the opening bell on reports the US Treasury had dropped plans to establish a "bad bank" to buy toxic assets from commercial banks as part of a broader rescue package. Reports added funding for the rescue plan is unlikely to exceed the $350 billion currently available under the Troubled Asset Relief Program (TARP).
Asian markets were mixed on concerns Washington's plans to heal the US economy might prove insufficient. Key benchmark indices in Singapore, Hong Kong, China, and Taiwan were up by between 0.70% and 1.82%. However indices in South Korea and Japan fell 0.32% and 0.29% respectively.
Wall Street finished flat on Monday as investors turned cautious after the Obama administration delayed an announcement of a key financial recovery plan. The Dow Jones industrial average fell 9.72 points, or 0.12%, at 8,270.87. The Standard & Poor's 500 Index rose 1.29 points, or 0.15%, at 869.89. The Nasdaq Composite Index fell 0.15 points, or 0.01%, at 1,591.56
An $838 billion economic stimulus bill backed by the White House narrowly advanced in the Senate on Monday, 9 February 2009 over strong Republican opposition, and Democratic leaders vowed to deliver the emergency legislation for President Barack Obama's signature within a few days. The vote was 61-36, one more than the 60 needed to move the measure toward Senate passage on Tuesday.
The US Treasury had announced last weekend that a banking stabilization plan scheduled to be unveiled on Monday had been postponed to Tuesday, amid indication that it could see some tweaking.
The BSE 30-share Sensex rose 63.58 points or 0.66% to 9,647.47. The Sensex opened 6.06 points higher. At the day's high of 9,724.87 hit in early afternoon trade, the Sensex rose 140.98 points. The barometer index today struck its highest level since 7 January 2009. The Sensex lost 73.26 points at the day's low of 9,510.63 hit in mid-afternoon trade.
The S&P CNX Nifty gained up 14.60 points or 0.5% to 2934.50. Nifty February 2009 futures were at 2923, a discount of 11.50 points as compared to the spot closing.
The BSE Sensex has jumped 556.69 points or 6.12% in the last three trading sessions from its close of 9090.88 on 5 February 2009 on expectations the forthcoming interim budget will contain fiscal incentives to revive sagging growth.
The barometer index is off 8666.63 points or 47.32% from its 52-week high 18,314.10 on 19 February 2008 but above 1950.08 points or 25.33% from its 52-week low of 7,697.39 on 27 October 2008. The Sensex had lost 10,639.68 points or 52.44% in the calendar year 2008.
The market breadth, indicating the overall health of the market, was positive on BSE with 1376 shares advancing as compared with 1101 that declined. A total of 109 shares remained unchanged. In early trade, the breadth was much stronger.
The BSE Mid-Cap rose 0.76% to 2,954.25, outperforming the Sensex. However, the BSE Small-Cap index gained 0.29% to 3,342.52, underperforming the Sensex.
The total turnover on BSE amounted to Rs 3,716 crore higher than Rs 2,836.19 crore on Monday, 9 February 2009. Turnover in NSE's futures & options (F&O) segment rose to Rs 39,017.91 crore from Rs 36,041.93 crore on Monday, 7 February 2009.
Sectoral indices on BSE displayed mixed trend. The BSE Capital Goods index (up 3.14%), the BSE Auto index (up 1%), BSE HealthCare index (up 1.14%), the BSE Bankex (up 1.16%), BSE Realty index (up 6.58%), outperformed the Sensex.
The BSE Teck index (up 0.39%), BSE IT index (up 0.02%), BSE Consumer Durables index (down 0.26%), the BSE FMCG index (down 0.78%), BSE Metal index (down 1.43%), BSE Oil & Gas index (up 0.57%), the BSE PSU index (down 0.02%), the BSE Power index (up 0.43%), underperformed the Sensex.
Among the 30-member Sensex pack, 17 declined while the rest gained. Reliance Infrastructure (down 2.79%), ITC (down 1.94%), and NTPC (down 1.61%), edged lower from the Sensex pack.
Realty shares advanced on hopes the forthcoming interim budget may include sops to the housing sector. India's largest real estate firm by market capitalisation DLF jumped 8.40% to Rs 151.60 on reports the company has secured long-term loans of about Rs 2000 crore. The counter clocked high volumes of 94.03 lakh shares and was the top gainer from the Sensex pack.
Indiabulls Real Estate (up 5.47%), Unitech (up 9.45%), and HDIL (up 4.07%), advanced.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.81% to Rs 1400.30 on hopes for a revenue boost from gas sales next month, and exports from its new refinery, which start in April 2009. The stock swung between a high of Rs 1414.20 and low of Rs 1373.35.
As per reports the company now plans to start selling petrol, diesel and jet fuel from its new export refinery in Jamnagar, Gujarat from April 2009. Exports from the company's unit Reliance Petroleum (RPL) which was about to start in January 2009 were delayed due to regulatory issues.
However India's biggest exploration company by sales, ONGC fell 1.75% to Rs 708.95 on profit booking after the stock rose 8.49% in two trading days to Rs 721.60 on 9 February 2009 from Rs 665.10 on 5 February 2009, on reports a government panel has allowed ONGC to file an appeal against a tax demand notice issued by the Income Tax (I-T) Department over treating each oil well as an individual company, which allowed India's largest oil producer to claim tax exemption for a longer time span.
Capital goods shares rose as investors bet higher government spending on infrastructure-related projects to pump prime the economy would boost orders for these firms. India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 4.11% to Rs 1450, extending a 2% rise on Monday, 9 February 2009 triggered by the company's announcement during trading hours of it winning four major contracts aggregating at around Rs 7,000 crore from various customers for the supply and installation of main plant equipment for thermal power projects.
India's largest engineering and construction firm by sales Larsen & Toubro gained 3.07% to Rs 695.10 on bargain hunting after sliding 6.35% in one month to 9 February 2009.
Praj Industries jumped 8.93% to Rs 61 after the company it has developed an innovative technology to manufacture ethanol. The company made this announcement during trading hours today, 10 February 2009.
India's top tractor maker by sales Mahindra and Mahindra jumped 3.96% to Rs 285.15 on reports its auto components and design engineering arm Mahindra Systech is in advanced talks with two Australian aerospace companies - one to acquire an aircraft components maker and the other to forge a joint venture for building eight- and 14-seater planes. However the names of the target firms were not disclosed.
Bank stocks rose on expectations that bond prices will recover if the central bank cuts rates further. India's largest bank in terms of assets and branch network State Bank of India rose 1.52% to Rs 1165. India's second largest private sector bank by net profit HDFC Bank rose 2.82% to Rs 945 as its American depository receipt (ADR) rose 1.35% on Monday, 9 February 2009. India's largest private sector bank by net profit ICICI Bank gained 0.15% to Rs 428.65 tracking 2.77% rise as its ADR on Monday, 9 February 2009.
Higher bond prices could boost treasury income of banks. Prime Minister's Economic Advisory Council chairman Suresh Tendulkar said late yesterday, 9 February 2009, the central bank may cut interest rates after the interim budget to spur the economy. However, bond prices fell today, 10 February 2009, on a higher-than-expected extra government borrowing plan.
The government will sell Rs 46000 crore ($9.44 billion) of additional debt in four parts between 20 February 2009 and 20 March 2009, Economic Affairs Secretary Ashok Chawla said in New Delhi today. Government bond prices have plunged in 2009 as the government borrowed more than budgeted for the fiscal year ending 31 March 2009 to pump prime the economy. The extra borrowings are largely aimed at supporting the economy, which has been hurt by a slump in consumer spending in the wake of the global financial crisis.
Most IT pivotals slipped after the Obama administration delayed an announcement of a key financial rescue plan. TCS, India's largest software services exporter by sales rose 1.93%. India's second largest software services exporter Infosys Technologies fell 0.37%. India's fifth largest IT exporter by sales HCL Technologies fell 2.37%. India's third largest software services exporter, Wipro slipped 0.53%.
Indian IT firms count US finance firms among their key clients. IT stocks fell despite a weak rupee. The partially convertible rupee was at 48.71 as compared with its previous close of 48.57. A weak rupee boosts operating margins of IT firms.
E-learning solutions provider Educomp Solutions soared 18.43% to Rs 1,891.45. The stock rose for the third day in a row after the company said during market hours on 6 February 2009 that its promoters have not pledged any of their shares to any financial institution/bank/or individual.
Metal shares slipped on persistent worries about global demand with key global economies in recession. Tata Steel (down 2.20%), Hindlaco (down 2.07%), and Sterlite Industries (down 1.48%), slipped.
Steel Authority of India fell 3.95% to Rs 86.40 after foreign brokerage Macquarie Group cut rating on the stock to neutral from outperform.
Reliance Industries topped the turnover chart on BSE with a turnover of Rs 337.60 crore followed by Educomp Solutions (Rs 253.40 crore), Reliance Infrastructure (Rs 207.45 crore), United Spirits (Rs 175.90 crore) and Reliance Capital (Rs 162.15 crore).
Unitech led the volume chart on BSE clocking volume of 3.41 crore shares followed by Cals Refineries (2.20 crore shares), Kohinoor Broadcasting (1.13 crore shares), GVK Power Infrastructure (1.08 crore shares) and Satyam Computer Services (1 crore shares).
Select shares extended Monday's, 9 February 2009 rally on speculation of favourable announcements from the Railways Minister Lalu Prasad in his interim rail budget on 13 February 2009. Wagon makers Texmaco (up 5.57%), Titagarh Wagons (up 12.78%), and Bharat Earth Movers (up 5.09%) surged on hopes the interim budget for 2009- 10 is likely to have proposals for introduction of more Garib Raths thereby boosting demand for wagons.
Shipping shares rallied after the Baltic Dry Index, a measure of freight rates for dry bulk vessels, gained 10% yesterday, 9 February 2009. The index surged over 50% last week on reports mining companies scrambled to hire ships to deliver iron ore to China.
Essar Shipping (up 5.71%), Mercator Lines (up 3.09%), Shipping Corporation of India (up 1.49%), Varun Shipping (up 1.31%), advanced.
United Spirits rose 0.65% to Rs 706 on reports the company plans to divest around 49% stake in its UK-based wholly-owned subsidiary Whyte & Mackay (W&M), which it acquired for 595 million pounds in May 2007.
Pre Session Commentary - Feb 10 2009
Today domestic markets are likely to open positive. The US markets have closed mixed on anticipations of another stimulus plan from Barack Obama. The stimulus package to be announced today by the US government may once again act as one of the triggers for domestic market sentiments as well. The CSO estimates for FY09 GDP growth at 7.10% looks little high but have also boosted the sentiments of investors which would support the markets at a firm level. On the other hand, major Asian markets have opened positive and therefore we anticipate another rally in today’s market at broader level.
On Monday, the markets opened with a phenomenal gain and sustained its northward movement till the end. The markets eagerly waited for the GDP growth estimates and as anticipated the CSO estimates for FYO9 GDP stood at 7.1% vs 9%(YoY), manufacturing seen at 4.8% vs 8.1%, financial services growth seen at 8.6% vs 11%, construction at 6.5% vs 10.1%, mining at 4.1% vs 8.2%, farm growth at 2.6% vs 4.9%. Despite weak global cues, the benchmark indices showed strong southward movement that helped all the sectors to close in green. Sectors like Metal, CD, CG, Oil & Gas and Bankex witnessed phenomenal gains of 4.41%, 3.69%, 3.59%, 3.37% and 3.19% respectively. Mid caps and Small caps also gained 1.70% and 1.63% respectively. During the session we expect the markets to be trading positive with an essence of volatility.
The BSE Sensex closed up by 283.03 points at 9,583.89 and NSE Nifty ended with gains of 76.80 points at 2,919.90. The BSE Mid Caps and Small Caps ended with gains of 49.15 points and 53.47 points at 2,931.95 and 3,332.71 respectively. The BSE Sensex touched intraday high of 9,601.56 and intraday low of 9,329.23.
The US markets on Monday closed mixed and rather flat. The investors were waiting for another stimulus plan to be announced but however the government delayed it for Tuesday as they are working out for a broader economic recovery plan. Senators are expected to vote on an $827 billion spending and tax cut plan early this week. The plan still has to be reconciled with that which was already approved by the House of Representatives. The earnings of corporate had little impact on the sentiments of the markets. However the day’s trade is not bad despite the markets closing mixed on marginal losses. US light crude oil for March delivery fell by $0.67 to settle at $39.56 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed low by 9.72 points at 8,270.87. NASDAQ index lost 0.15 points at 1,591.56 and the S&P 500 (SPX) gained 1.29 points at 869.89.
Indian ADRs ended mixed. In technology sector, Infosys ended higher by 1.21% along with Wipro by 1.51%. Further, Patni Computers ended with increase of 0.87% while Satyam closed down by 5.88%. In banking sector ICICI Bank and HDFC Bank gained 2.77% and 1.35% respectively. In telecommunication sector, Tata Communication advanced by 1.68% while MTNL lost 0.35%. Sterlite Industries increased by 3.49%.
Today major stock markets in Asia have opened mixed. Shanghai composite is up by 1.49 points to 2,226.20, Japan''s Nikkei is also up by 24.13 points at 7,993.16. Hang Seng surged 32.05 points at 13,801.11. South Korea''s Seoul Composite is low by 5.45 points at 1,197.24 and Singapore''s Strait Times is high by 10.58 points to 1,692.92.
The FIIs on Monday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 1,232.30 Crore and gross debt purchased stood at Rs 476.60 Crore, while the gross equity sold stood at Rs 1,172.00 Crore and gross debt sold stood at Rs 547.60 Crore. Therefore, the net investment of equity and debt reported were Rs 60.30 Crore and Rs (71) Crore respectively.
On Monday, the Indian rupee closed at 48.57/58 0.2% stronger than its previous close of 48.67/68. The rupee gained strengthened on the back of strong rally in the domestic stock markets, prompted the banks to sell their holdings.
On BSE, total number of shares traded were 28.92 Crore and total turnover stood at Rs 2,836.19 Crore. On NSE, total number of shares traded were 59.91 Crore and total turnover was Rs 78.71 Crore.
Top traded volumes on NSE Nifty – Unitech with 36318580 shares, SAIL with 17109122 shares, Suzlon Energy with 16852567 shares, DLF with total volume traded 10535254 shares followed by Reliance Petro with 8704339 shares.
On NSE Future and Options, total number of contracts traded in index futures was 800368 with a total turnover of Rs 10,708.86 Crore. Along with this total number of contracts traded in stock futures were 838860 with a total turnover of Rs 7,959.11 Crore. Total numbers of contracts for index options were 1147960 with a total turnover of Rs. 16,668.35 Crore and total numbers of contracts for stock options were 69030 and notional turnover was Rs 705.60 Crore.
Today, Nifty would have a support at 2,927 and resistance at 2,979 and BSE Sensex has support at 9,599 and resistance at 9,739.
Market seen lower
Key benchmark indices are likely to open lower today, 10 February 2009, snapping tow day gains, on negative global cues after the US Treasury postponed a bank-rescue plan to Tuesday, indicating that it could see some tweaking. The SHX Nifty futures in Singapore was down 7 points.
Asian indices were mixed today, 10 February 2009 on speculation fuel costs will decline, countering declines in the region by shares of commodity producers. China's Shanghai Composite was down 0.17% or 3.71 points at 2,221, South Korea's Seoul Composite declined 0.64% or 7.68 points at 1,195.01. However, Hong Kong's Hang Seng rose 0.92% or 127.30 points at 13,896.36, Japan's Nikkei was up 0.19% or 15.51 points at 7,984.54, Singapore's Straits Times added 0.69% or 11.66 points at 1,694 and Taiwan's Taiwan Weighted gained 0.45% or 20.18 points at 4,514.77.
US stocks were little changed on Monday, 9 February 2009 as investors turned cautious after President Barack Obama's administration delayed an announcement of a key financial recovery plan. The Dow Jones industrial average fell 9.72 points, or 0.12%, at 8,270.87. The Standard & Poor's 500 Index rose 1.29 points, or 0.15%, at 869.89. The Nasdaq Composite Index fell 0.15 points, or 0.01%, at 1,591.56
An $838 billion economic stimulus bill backed by the White House narrowly advanced in the Senate on Monday, 9 February 2009 over strong Republican opposition, and Democratic leaders vowed to deliver the emergency legislation for President Barack Obama's signature within a few days. The vote was 61-36, one more than the 60 needed to move the measure toward Senate passage on Tuesday.
Meanwhile the US Treasury announced at the weekend that a banking stabilization plan scheduled to be unveiled on Monday had been postponed to Tuesday, amid indication that it could see some tweaking.
Expectations an interim budget will contain fiscal incentives to revive sagging growth helped market surge in the past tow trading sessions. Media reports that the forthcoming interim budget may offer tax sops and sector-specific stimulus package boosted the domestic bourses.
The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.
The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. But poor corporate earnings and concerns of economic slowdown continues to weigh on the market sentiment.
The government is scheduled to release its official gross domestic product (GDP) estimate for 2008-2009 today, 9 February 2009, followed by December 2008 industrial production data on Thursday, 12 February 2009. The Reserve Bank of India expects the economy to expand seven per cent in 2008-09, the slowest pace in six years.
According to provisional data on NSE, FIIs were net buyers worth Rs 285.39 crore while mutual funds sold shares worth Rs 45.98 crore on Monday, 9 February 2009.
Daily Trading Calls - Feb 10 2009
Nifty (2920) Sup 2885 Res 2950
Buy PNB (405) SL 400
Target 414, 416
Buy Tata Power (778) SL 770
Target 798, 802
Buy Reliance Capital (388) SL 383 Target 399, 401
Sell HCL Tech (120) SL 123
Target 114, 113
Sell L&T (674) SL 682
Target 658, 656
Daily News Roundup - Feb 10 2009
Tata group pledges shares of 3 companies; Tata Steel, Tata Power and Tata Teleservices Maharashtra; to raise funds upto Rs65bn. (FE)
M&M are in talks with Australian aerospace firms. (Mint)
Bajaj Auto may hike its stake in KTM Power Sports, Europe, to 30% from 25% currently. (ET)
ONGC achieved an all time high production of oil and gas of 0.2028mn tons of oil till December. (ET)
ONGC issues bids to hire four rigs. (FE)
BHEL bags four orders worth Rs70bn. (FE)
Jet Airways plans to phase out most of its expatriate pilots and not fill the vacant positions in the coming months. (FE)
IDBI and Bank of Baroda lend Rs6bn to Satyam. (FE)
Aditya Biral Retail Ltd plans to renegotiate lease rentals and close unviable stores. (Mint)
ICAI has found two members of Lovelock and Lewis guilty of professional misconduct in the Global Trust Bank case. (ET)
Chola DBS, one of the largest NBFCs of the country, plans to utilize a part of its securities premium reserves to offset losses. (ET)
Opto Circuits launches catheter to treat coronary artery disease. (ET)
Mumbai International Airport Ltd, a GVK Group company, has appealed for a 10 year tax exemption to the Maharashtra government. (FE)
Government has allowed GMR to levy Rs200 fee per flier flying out of Delhi as fee to enable it meet its shortfall of Rs18bn. (FE)
BEML eyes a slice of the global high speed train parts market. (FE)
RCF lines up Rs40bn to restart Trombay plant. (ET)
Petroleum ministry may ask Essar Oil to pay more royalty for Ratna oil. (ET)
Kingfisher Airlines pilots plan to protest against pay cuts. (ET)
Subhiksha may sell stake to raise funds. (ET)
United Spirits chief, Vijay Mallya, plans to sell up to 49% stake in Whyte & Mackay. (BL)
SAIL January output down 2%. (BL)
Sterlite Projects to consider allotment of preference shares on February 11. (BL)
Nagarjuna Construction bags Rs7bn orders.(BL)
GSPC to relocate LNG terminal within Mundra port. (BL)
Infotech eyes buys in aerospace sector. (BS)
Rs121bn Hyderabad Metro Rail Project awarded to Maytas Infrastructure may be taken back if it is unable to achieve financial closure. (BS)
Coal India shortlists 9 companies for developing underground mines. (BL)
Central Statistical Organization pegs India’s GDP growth at 7.1% for 2008-09. (FE)
Combined fiscal deficit may be 10% of GDP. (Mint)
Per capita income doubles to Rs38,084 in 7 years. (BL)
SEBI is planning to make it compulsory to disclose the end use of funds raised through pledging of shares. (ET)
TRAI said that the CDMA companies will have to match top GSM bids in 3G auction. (ET)
Government may hike fund allocation to flagship programs by approximately 16% during the interim budget. (ET)
Steel ministry recommends import duty upto 15%. (ET)
Government may cut loan rates to NBFC’s by tpo 200bps. (ET)
Bond yields rise as government borrowing increases. (FE)
Vehicle sales decline by 7.4% in January. (FE)
Agricultural sector to witness a growth of 2.6% in FY09. (FE)
India’s tea exports rise by 10%. (Mint)
The world is flat!
In a flat country a hillock thinks itself a mountain.
We've had a hillock of gains in recent days and things could flatten a bit. US stocks closed absolutely flat, while Europe was a mixed bag. Among the key Asian markets, the Hang Seng is up 1% while the Nikkei is marginally higher. The rest of the regional benchmarks have posted modest gains.
The market could extend the two-day rally, at least at the start today. Thereafter, we expect the key indices to remain a bit subdued. What may also keep the overall mood cheerful are expectations of fresh stimulus measures in the interim budget.
Meanwhile, all eyes are on Washington. Global markets are awaiting the passage of Obama administration’s stimulus package. Also being eagerly awaited is the unveiling of a revamped bank rescue plan. Both the key events will take place later today in the US. So, the Asian markets will be able to react to the same only on Wednesday.
As a report states, the money being spent on the economic bailouts now totals more than the combined value of the entire Iraq war, the lifetime budget of NASA, the 1980s Savings & Loan crisis, and all the dollars spent on the Korean War.
The moot point is whether global markets can sustain the bounce once the expected events are out of the way. The jury’s still out on this. The best thing would be to play for a short-term spurt and make a quick exit. It’s easier said than done, but nothing wrong in giving it a shot.
US financial shares extended Friday's rally into Monday, but the broader American market struggled as the announcement of the revamped bank bailout plan was delayed and Congress continued to squabble about the stimulus package.
The Dow Jones Industrial Average lost 9 points or 0.1%, to end at 8,270.87. The Standard & Poor's 500 index was virtually unchanged at 869.89. The Nasdaq Composite index was barely changed as well, at 1,591.56.
Once the new version of the bank bailout plan is announced and once the Congress agrees on a stimulus plan, US stocks should get a boost. These two programs are good indications that the new administration is willing to go an extra mile to address the mess, which should be reassuring to investors.
The Senate has reached a tentative agreement on a new version of the economic stimulus bill. After more than a week of heated debate, lawmakers have reportedly managed to cut the proposed $900 billion plan down to $827 billion. A vote is expected on Tuesday.
However, Senate approval of the plan is just another step in the process. The House of Representatives already approved an $819 billion version of the plan in a party-line vote nearly two weeks ago. If the Senate bill passes, leaders will need to negotiate a final bill with the House.
Treasury Secretary Tim Geithner was expected to speak on Monday about how the government plans to use the remaining $350 billion of the Treasury's Troubled Asset Relief Program (TARP). However, the speech was postponed until Tuesday so as to keep the focus on the stimulus plan.
Geithner might announce the creation of a so-called "bad bank" that would let the government remove bad assets from banks' balance sheets. This is likely to get banks to start lending again.
Another possibility is that the Treasury could suspend or change the "mark-to-market" accounting rule, meaning that the government could buy the assets at a price that is below market rate, but not at fire sale prices.
Such a change would address criticisms that the Bush administration overpaid for the bad assets it bought with the first half of the TARP.
On the corporate front, UK-based Barclays bank posted a better-than-expected 2008 profit as a one-time gain from its purchase of the North American operations of Lehman Brothers helped temper massive writedowns. Its shares jumped 11%.
Shares of NYSE Euronext fell after the operator of the New York Stock Exchange and the Euronext stock exchanges posted a big quarterly loss.
Japanese auto major Nissan warned that it will post a loss for its current fiscal year and that it will cut 20,000 jobs.
General Motors (GM) is reportedly in discussions to take back part of Delphi, the auto-parts supplier it spun off a decade ago. The move is part of the company's plans to line up additional bailout funds from the government, which has already given the company more than $13 billion.
Other reports said GM could be planning to cut up to 5,000 salaried workers.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.99% from 2.98% on Friday. Treasury prices and yields move in opposite directions.
Lending rates were mostly unchanged. The 3-month Libor rate slipped slightly to 1.23% from 1.24% on Friday. The overnight Libor rate held steady at 0.31%. Libor is a bank lending rate.
US light crude oil for March delivery fell 61 cents to settle at $39.56 a barrel on the New York Mercantile Exchange. Gasoline prices rose three-tenths of a cent to a national average of $1.924 a gallon.
The dollar fell against the euro and yen. COMEX gold for April delivery fell $21.50 to settle at $892.80 an ounce.
European shares rose in a choppy session amid relief in the banking sector after Barclays reported a 1% profit fall and as investors continued to wait for details on a package of measures to shore up the U.S. economy and banking sector.
The pan-European Dow Jones Stoxx 600 index managed to rise for the fifth straight session as the banking and insurance sectors advanced. It gained 0.4% to 199.35.
Markets extended gains to second straight trading session on Monday. Hopes of further fresh measures to stimulate the economy ahead of vote-on-account lifted the markets higher. All round buying in scrips across the bourses finally lifted the NSE Nifty to close above the 2,900 mark.
The Sensex surged 298 points to close at 9,583 and the Nifty advanced 76 points to close at 2,919.
Among the 30-components of Sensex, 29 ended in the positive terrain and only 1 stock i.e. Hindustan Unilever ended in the red. The major gainers in the Sensex were JP Associates, Tata Steel, Reliance Infrastructure, ONGC, L&T and Sterlite Industries.
Shares of Tata Steel have surged by over 7% to Rs200 after the company announced that its hot metal, crude steel and saleable steel production in January 2009 was higher YoY.
The scrip has touched an intra-day high of Rs200.8 and a low of Rs187 and has recorded volumes of over 61,00,000 shares on NSE.
Shares of Ahluwalia Contracts slipped by 4.5% to Rs30.5. The company had announced that it bagged various Projects worth Rs3,201.3mn. The scrip touched an intra-day high of Rs33 and a low of Rs30 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Cipla edged higher by 0.6% to Rs192. Nearly five lakh shares of the company changed hands on the NSE at an average price of Rs190. The scrip touched an intra-day high of Rs193 and a low of Rs188 and recorded volumes of over 90,000 shares on BSE.
Shares of United Spirits surged by over 14% to Rs701 after reports stated that it was planning to add 10 new bottling units in next 12 months. The scrip touched an intra-day high of Rs712 and a low of Rs602 and recorded volumes of over 3,00,000 shares on BSE.
Shares of Nagarjuna Construction surged by over 8% to Rs50.6 after the company announced that it has secured four new orders aggregating Rs7.12bn. The first order valued at Rs3.6bn is secured from the Singareni Collieries Company Ltd., Khammanm, Andhra Pradesh for Blast Hole Drilling, Controlled Blasting and other works to be completed over a period of 72 months.
The scrip touched an intra-day high of Rs51.3 and a low of Rs45 and recorded volumes of over 7,00,000 shares on BSE.
BHEL announced that it won four major contracts worth Rs70bn for the supply and installation of main plant equipment for thermal power projects. The projects, with a cumulative capacity of 3,250 MW, are located in Madhya Pradesh, Uttar Pradesh, Tamil Nadu and Maharashtra.
The stock was up by 2% to Rs1392 after hitting an intra-day high of Rs1400 and a low of Rs1362 and recorded volumes of over 2,00,000 shares on BSE.
All eyes would be on the Washington as the US Senate is set to vote on Obama regimes new stimulus plan. A revamped bank rescue package is also slated for the same day.
Pledged Shares - List
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
Maytas Infra 02/09/09 8,912,700 15.14% n/a
Ansal Housing & Const. 02/09/09 5,218,208 29.70% n/a
Kemrock Inds. & Exports 02/09/09 1,309,729 11.89% n/a
Jain Irrigation Systems 02/09/09 3,715,321 5.13% n/a
Arvind International 02/09/09 786,320 11.22% n/a
Rajratan Global Wire 02/09/09 750,000 20.13% n/a
Walchandnagar Inds. 02/09/09 1,996,000 5.25% n/a
STL Global 02/09/09 6,000,000 21.85% n/a
Kopran 02/09/09 577,500 1.64% n/a
Eimco Elecon India 02/09/09 500,000 8.67% n/a
Birla Ericsson Optical 02/09/09 1,250,000 4.17% State Bank of India
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
Kotak Mahindra Bank 02/09/09 50,000 0.01% n/a
Cranes Software Int. 02/09/09 31,880,000 27.00% n/a
Atlanta 02/09/09 333,335 2.05% n/a
Gujarat NRE Coke 02/09/09 75,309,956 15.96% n/a
Kirloskar Oil Engines 02/09/09 8,830,000 4.55% n/a
JIK Industries 02/09/09 32,385 0.13% n/a
Wintac 02/09/09 250,000 14.29% UCO Bank
Software Technology Grp. 02/09/09 2,529,000 18.59% J&K Bank
PVP Ventures 02/09/09 6,946,000 3.00% L&T Infra. Finance
02/09/09 500,000 0.22% Eureka Credit Fin.
Kamat Hotels India 02/09/09 6,214,750 47.09% n/a
India Infoline 02/09/09 150,000 0.05% n/a
Great Eastern Shipping 02/09/09 7,000 0.005% n/a
Shasun Chemicals 02/09/09 1,560,000 3.23% n/a
Geodesic 02/09/09 760,230 0.82% n/a
Dr Reddys Laboratories 02/09/09 10,419,829 6.19% n/a
Pioneer Embroideries 02/06/09 2,045,570 16.75% n/a
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
Suryachakra Power Corp. 02/06/09 11,420,835 14.91% n/a
Rain Commodities 02/06/09 17,638,612 24.90% n/a
Everonn Systems India 02/06/09 576,210 3.81% n/a
HEG 02/06/09 4,100,000 9.47% n/a
Apollo Tyres 02/06/09 53,477,080 10.62% n/a
Sanghvi Movers 02/06/09 1,275,000 2.95% n/a
Kajaria Ceramics 02/06/09 1,500,000 2.04% Bank of Rajasthan
Prime Focus 02/06/09 1,900,000 14.93% Kotak Mahindra Bank
Spanco 02/06/09 2,000,000 9.69% n/a
Sutlej Textiles & Inds. 02/06/09 1,758,125 16.10% n/a
Kale Consultants 02/06/09 457,000 3.67% Kotak Mahindra Invst
02/06/09 1,390,000 10.15% Birla Global Fin.
Arshiya International 02/06/09 7,375,000 12.55% n/a
Subex 02/06/09 2,508,361 7.20% n/a
Shetron 02/06/09 1,664,858 18.49% Citicorp Finance
100,000 1.11% Union Bank of India
815,200 9.05% Dewan Housing Fin.
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
546,000 6.06% Pam Pharmaceuticals
Oricon Enterprises 02/06/09 3,556,752 36.93% n/a
Jubilant Organosys 02/06/09 20,150,000 13.66% n/a
Bartronics India 02/06/09 2,656,760 9.17% n/a
Resurgere Mines 02/06/09 1,000,000 3.50% Union Bank of India
02/06/09 1,000,000 3.50% ICICI Bank
02/06/09 1,500,000 5.26% Pam Glatt PharmaTech
JK Cement 02/06/09 31,875,225 45.58% Allahabad Bank
Filatex India 02/06/09 500,000 2.91% n/a
SRF 02/06/09 20,920,795 32.83% n/a
Andhra Pradesh Paper M. 02/06/09 971,115 3.77% IDBI Trusteeship
GVK Power & Infra. 02/06/09 61,475,557 4.37% Axis Bank/IDBI Bank
OCL India 02/06/09 50,000 0.09% n/a
CCAP 02/06/09 873,998 24.48% State Bank of India
Amrit Banaspati 02/06/09 1,198,552 16.28% n/a
Silktex 02/06/09 500,000 6.56% State Bank of India
Network 18 Media & I. 02/06/09 1,035,861 1.68% SICOM
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
02/06/09 8,355,089 13.52% State Bank of India
Television Eighteen 02/06/09 70,000 0.06% BNP Paribas
02/06/09 1,750,000 1.46% Birla Global Fin.
Gillette India 02/06/09 158,917 0.49% n/a
Vanasthali Textile I. 02/06/09 4,350,000 21.96% IDBI Bank
02/06/09 2,360,000 11.91% Allahabad Bank
Chambal Fert. & Chem. 02/05/09 32,150,000 7.72% n/a
Rajvir Industries 02/05/09 93,092 3.07% SBH*
02/05/09 200,000 6.59% Bank of Rajasthan
02/05/09 100,000 3.29% Axis Bank
Zicom Electronic S S 02/05/09 1,720,100 13.54% n/a
Alchemist 02/05/09 1,477,400 12.07% Bank of Rajasthan
Godawari Power & Ispat 02/05/09 3,380,000 12.04% n/a
Karuturi Global 02/05/09 84,472,370 18.77% Yes Bank
Sujana Metal Products 02/05/09 4,700,000 6.79% n/a
Sujana Towers 02/05/09 1,291,000 3.12% n/a
Zylog Systems 02/05/09 800,000 4.86% n/a
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
J Kumar Infraprojects 02/05/09 2,025,000 9.76% Bank of India
Ganesh Benzoplast 02/05/09 6,279,538 21.45% n/a
Panchmahal Steel 02/05/09 4,057,000 29.00% n/a
Time Technoplast 02/05/09 58,970,000 28.18% n/a
Hindustan Motors 02/05/09 26,271,854 16.30% ICICI Bank
Sahara One Media & Ent. 02/05/09 1,500,000 6.97% IDBI Bank
Gangotri Iron & Steel 02/05/09 319,830 4.15% State Bank of India
Jindal Drilling & Ind. 02/05/09 6,159,400 26.86% n/a
Astra Microwave Prod 02/05/09 128,526 0.24% Religare Securities
Emco 02/05/09 1,391,105 2.36% n/a
Lanco Infratech 02/05/09 18,962,500 8.53% n/a
Solix Technologies 02/05/09 1,750,000 28.11% TDB-Govt. of India@
Haldyn Glass Gujarat 02/05/09 2,158,750 40.16% n/a
UTV Software 02/05/09 7,781,199 22.76% n/a
LG Balakrishnan & Bros 02/04/09 3,361,900 4.28% n/a
LGB Forge 02/04/09 3,361,900 3.36% n/a
Kavveri Telecom 02/04/09 500,000 5.09% n/a
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
Kitply 02/04/09 12,004,395 35.19% IDBI Trusteeship
Suryajyoti Spng. Mills 02/04/09 500,000 3.24% State Bank of India
02/04/09 500,000 3.24% IDBI Trusteeship
CHD Developers 02/04/09 8,000,000 8.25% n/a
Torrent Power 02/04/09 52,287,000 20.97% n/a
Upper Ganges Sugar1 02/04/09 657,966 5.69% Bank of Rajasthan
Upper Ganges Sugar2 02/04/09 259,923 2.25% Bank of Rajasthan
Upper Ganges Sugar3 02/04/09 234,891 2.03% Bank of Rajasthan
Great Offshore 02/04/09 5,527,592 14.88% n/a
Shyam Telecom 02/04/09 2,200,000 19.52% State Bank of India
Fluidomat 02/04/09 734,078 14.83% n/a
Astra Microwave Prod. 02/04/09 300,000 0.56% Religare Finvest
Shree Ashtavinayaka CV 02/04/09 1,018,000 9.71% n/a
JB Chemicals 02/04/09 38,000 0.04% n/a
Murudeshwar Ceramics 02/04/09 2,278,840 13.02% IDBI
02/04/09 825,000 4.71% Dhanalakshmi Bank
02/04/09 412,000 2.35% Dev. Credit Bank
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
Micro Inks 02/03/09 17,534,718 70.50% n/a
Balaji Telefilms 02/03/09 4,300,030 6.59% n/a
Khandwala Securities 02/03/09 1,733,321 14.52% Bajaj Auto#
Hind Syntex 02/03/09 580,902 5.33% ICICI Bank
Bhuwalka Steel 02/03/09 1,556,170 30.00% n/a
Kriti Industries 02/03/09 12,367,640 19.95% IDBI Bank
Radaan Mediaworks 02/03/09 12,500,000 23.08% IOB**
Aban Offshore 02/03/09 3,076,900 8.14% n/a
Shree Renuka Sugars 02/03/09 22,800,000 8.45% Crossborder Inves.
Pasupati Acrylon 02/03/09 15,125,000 21.26% IFCI Ltd.
Ganesh Housing Corp. 02/03/09 9,796,427 30.00% ICICI Bank
PVR 02/03/09 500,000 2.17% Axis Bank
Bilpower 02/03/09 1,160,000 11.05% n/a
Zuari Industries 02/02/09 780,000 2.65% IL&FS Fin. Serv.
02/02/09 750,000 2.55% Allahabad Bank
02/02/09 500,000 1.70% Birla Global Fin.
Crest Animation Studios 02/02/09 200,000 0.89% State Bank of India
===============================================================================
Companies Date of Shares % Paid-up Lender
Disclosure Pledged Shares~
===============================================================================
C&C Construction 02/02/09 2,300,000 12.60% Bank of Rajasthan
B.L. Kashyap & Sons 02/02/09 1,314,000 6.40% ECL Finance
Nava Bharat Ventures 01/30/09 5,000,000 6.44% IDFC^
HBL Power Systems 01/30/09 190,130 0.78% State Bank of India
Dolphin Offshore Ent. 01/29/09 2,136,512 22.34% State Bank of India
01/29/09 735,000 7.68% Canara Bank
Asian Paints 01/29/09 14,371,909 14.98% n/a
MindTree 01/28/09 26,428 0.07% ICICI Bank
01/28/09 75,000 0.20% HDFC
Godrej Consumer Products 01/23/09 19,500,000 7.78% JP Morgan Sec.
SSPDL 01/22/09 2,585,850 20.00% State Bank of India
Gammon India 01/31/09 6,000,000 6.86% India Infoline Invs.
===============================================================================
Notes: * SBH = State Bank of Hyderabad.
^ IDFC = Infrastructure Development Finance Company.
** IOB = Indian Overseas Bank.
# Company states that loan has been refunded and
there is no balance pending with Bajaj Auto Ltd.
~ Calculated by Bloomberg News, where not provided by the company and
may vary from actual company records.
@ Technology Development Board, Dept. of Science & Technology,
Ministry of Science & Technology, Govt. of India.
via Bloomberg
Bullion metals go down
Stimulus hopes weigh on precious metal prices
After rising in previous three sessions, bullion metal prices went down on Monday, 09 February, 2009. Anticipation that the bailout plan for banks and stimulus package for overall economy will reduce the appeal of the precious metals as alternate investment, hammered the bullion metal prices today. Limiting their loss was the weak dollar.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. But silver prices dropped.
On Monday, Comex Gold for February delivery fell $21.5 (2.4%) to close at $892.4 an ounce on the New York Mercantile Exchange. Last week, gold prices ended down by 1.5%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 1%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (14%) since then.
On Monday, Comex silver futures for March delivery fell 33 cents (2.5%) to end at $12.83 an ounce. Year to date, silver has climbed 13.7% this year. For 2008, silver had lost 24%.
Investors today were waiting for the bank bailout plan which was supposed to be drafted by Treasure Secretary early today, but have got postponed till 11 am E.T, tomorrow. The broader economy stimulus plan has also been garnering attention and there have been reports in the market that the $827 billion stimulus plan could come to vote by the end of this week.
In the currency market today, the dollar index ended lower by 0.5%.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for April delivery closed lower by Rs 243 (1.7%) at Rs 13,938 per 10 grams. Prices rose to a high of Rs 14,161 per 10 grams and fell to a low of Rs 13,915 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 243 (1.2%) lower at Rs 20,264/Kg. Prices opened at Rs 20,476/kg and fell to a low of Rs 20,221/Kg during the day's trading.
Crude drops below $40
Demand concerns take crude prices lower
Oil prices gave up earlier gains and ended lower on Monday, 09 February, 2009 as traders anticipated that the stimulus plan that has been planned by Obama administration will not be enough to fuel p energy demand in the coming months. The weak dollar limited the fall in crude prices today.
On Monday, crude-oil futures for light sweet crude for March delivery closed at $39.6/barrel (lower by $0.61 or 1.5%) on the New York Mercantile Exchange. Earlier during the day, it touched a high of $42.43. It dropped below the $40 level for the first time in three weeks.
Prices reached a high of $147 on 11 July but have dropped almost 70% since then. Year to date, in 2009, crude prices are lower by 11.4%. On a yearly basis, crude prices are lower by 58%.
Investors today were waiting for the bank bailout plan which was supposed to be drafted by Treasure Secretary early today, but have got postponed till 11 am E.T, tomorrow. The broader economy stimulus plan has also been garnering attention and there have been reports in the market that the $827 billion stimulus plan could come to vote by the end of this week.
In the currency market today, the dollar index ended lower by 0.5%.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
OPEC has been trying to cut production consistently in order to step up prices from their current low levels. OPEC agreed to reduce production by a record amount of 2.2 million barrels a day, starting from 1 January, 2009 adding to previous cuts of 2 million barrels. Overall, the reduction is equal to about 5% of the world's oil demand.
Against this background, March reformulated gasoline fell 0.3% to $1.2471 a gallon and March heating oil lost 0.6% to stand at $1.3523 a gallon.
Natural gas for March delivery rose 0.7%, to $4.807 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 1,982/barrel, higher by Rs 34 (1.7%) against previous day's close. Natural gas for February delivery closed at Rs 235/mmbtu, lower by Rs 3.7/mmbtu (1.6%).
Pledge-o-Mania
More than 20 companies on Monday informed the stock exchanges about shares that their promoters have pledged with lenders to raise money, a day before the Tuesday deadline set by market regulator Sebi. Companies like Jaiprakash Hydro-Power, India Cements, Godrej Consumers and Religare Enterprises disclosed details on pledged shares, bringing the total to more than 100.
The promoters of India Cements have pledged shares representing a 22.43% stake in the company, while Jaiprakash group has offered a 60% stake in Jaiprakash Hydro as security. In case of Religare, the number of shares pledged was a relatively trivial 0.58%.
Tata Sons, the main investment firm of the Tata group, has pledged a 13.19% stake in Tata Steel, 14.59% holding in Tata Power and 7.6% in Tata Teleservices (Maharashtra), according to information shared with exchanges on Monday.
Other Tata group firms such as Tata Power and Tata Teleservices have pledged 4.37% and a 37.65% stakes, respectively, in Tata Teleservices (Maharashtra) — the listed entity.
However, other details on pledges such as the timing of the loan, amount raised, end-use of the fund and identity of lenders have not been disclosed by the companies. At present, such disclosures are not mandatory.
Sebi has recently asked promoters of listed companies to disclose pledging of shares as security against loans availed of by them.
The market regulator’s order came in the wake of offloading of shares by lenders in some companies, including fraud-hit Satyam. Although the companies will now have to come out with such disclosures periodically, they are supposed to disclose the previous pledges by Tuesday this week.
Last week, some of big domestic business houses as well as MNCs like Asian Paints, Zuari Industries, Huber of Germany, Aban Offshore, Dr Reddy’s Lab, Godrej Consumer Products, Great Offshore and JB Chemicals and United Spirits have spelt out the details of pledged shares. United Spirits has said that the pledged shares represent a second-level of collateral for funds raised.
Industry experts said the promoters have been pledging their shares to raise funds for several reasons, ranging from financing creeping acquisitions to foreign buyouts.
While pledging of shares has been an age-old method of raising money, the trend deepened since 2001 when a downturn in commodities impacted the financing capacity of many Indian firms. In loan against shares, lenders charge a minimum margin of 200-250%, meaning that a Rs 100 crore would require a pledge of securities worth Rs 200-250 crore.
Interestingly, some of the companies such as ABG Shipyard and Gail have been proactive in informing stock exchanges that their promoters had not pledged any share.
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