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Monday, March 30, 2009
BSE Bulk Deals to Watch - March 30 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
30/3/2009 530499 A K CAPITAL FIRSTRAND PUBLIC LIMITED COMPANY S 53507 141.25
30/3/2009 532910 ANIL PRODUCT MINESHCHANDRAKANTSHAH B 55867 46.97
30/3/2009 532995 AVON CORP PANKAJ PRATAPSINH SARAIYA B 117000 4.94
30/3/2009 532719 BL KASHYAP ARISAIG PARTNERS ASIA PTE LTD S 400000 129.75
30/3/2009 502865 FORBES & CO DEUTESCHE INT TRUST CORP MAURITIUS LTD AC INDIA DISCOVERY FUND B 400000 360.00
30/3/2009 502865 FORBES & CO SPS CAPITAL AND MONEY MNG SERV.P.LTD S 277691 360.01
30/3/2009 531137 GEMSTONE INV BHUPESH RATHOD S 59000 22.75
30/3/2009 522059 INDAGE VIN INDIA MAX INVESTMENT FUND LTD. B 200000 49.45
30/3/2009 522059 INDAGE VIN SICOM LTD S 218620 49.45
30/3/2009 531898 SANGUINE MD BHROSEMAND COMMODITIES PVT. LTD. S 84170 3.02
30/3/2009 508961 SHRICON INDU SWASTIKA FIN LEASE LTD B 49150 55.55
30/3/2009 508961 SHRICON INDU NANDKISHORE AGRAWAL S 49150 55.55
30/3/2009 508976 SPANCO AVL INDIA LEASING B 400000 25.87
30/3/2009 508976 SPANCO INTELLINVOFININDIAPVTLTD S 400000 25.87
30/3/2009 531874 VENUS VENT CHANDRA SHEKHAR SUNIL BHATT B 32311 27.78
30/3/2009 531249 WELL PACK PA GANDHI MANISHA NAVNEETLAL B 36645 141.56
30/3/2009 531249 WELL PACK PA TUSHAR RAMESHBHAI PATEL B 29950 141.08
30/3/2009 531249 WELL PACK PA SHREE GOPAL BAJORIA S 25000 143.10
30/3/2009 514162 WELSPUN INDI WELSPUN TRADING LIMITED B 1543262 21.42
30/3/2009 514162 WELSPUN INDI CRESENT TRADING PRIVATE LIMITED S 1543262 21.42
NSE Bulk Deals to Watch - March 30 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
30-MAR-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD,BUY,228917,399.87,-
30-MAR-2009,ABAN,Aban Offshore Ltd.,P R B SECURITIES PRIVATE LTD,BUY,201041,409.47,-
30-MAR-2009,ALOKTEXT,Alok Industries Limited,HI GROWTH CORPORATE SERVICES PRIVATE LIMITED,BUY,1185606,12.64,-
30-MAR-2009,BHARATRAS,Bharat Rasayan Ltd,WELDON FINCAP PVT LTD,BUY,110900,37.75,-
30-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,BUY,341502,155.73,-
30-MAR-2009,BRANDHOUSE,Brandhouse Retails Limite,GURU KRUPA INVESTMENTS,BUY,300000,15.95,-
30-MAR-2009,BRANDHOUSE,Brandhouse Retails Limite,MANGHNANI DURU BHAGWANDAS,BUY,384225,15.96,-
30-MAR-2009,GMRFER,GMR Ferro Alloys & Indust,PRIME INDIA INVESTMENT FUND LTD,BUY,102000,25.23,-
30-MAR-2009,GMRINDS,GMR Industries Limited,PRIME INDIA INVESTMENT FUND LTD,BUY,300000,73.75,-
30-MAR-2009,IOLN,IOL Netcom Limited,VASANT RAMU JADHAV,BUY,287000,38.00,-
30-MAR-2009,JAYAGROGN,Jayant Agro Organics Ltd.,VED VIJAYSINH VIRCHAND,BUY,75000,33.50,-
30-MAR-2009,JINDALSAW,Jindal Saw Limited,VALIANT MAURITIUS PARTNERS OFFSHORE LTD,BUY,330000,175.97,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PVT LTD,BUY,1858752,21.33,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,AMBIT SECURITIES BROKING PVT. LTD.,BUY,1452236,21.91,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,P R B SECURITIES PRIVATE LTD,BUY,1117814,22.76,-
30-MAR-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD,SELL,228917,400.15,-
30-MAR-2009,ABAN,Aban Offshore Ltd.,P R B SECURITIES PRIVATE LTD,SELL,201041,409.28,-
30-MAR-2009,ALOKTEXT,Alok Industries Limited,CALEDONIA INVESTMENTS PLC,SELL,1422000,12.72,-
30-MAR-2009,ALOKTEXT,Alok Industries Limited,HI GROWTH CORPORATE SERVICES PRIVATE LIMITED,SELL,1186106,12.64,-
30-MAR-2009,BHARATRAS,Bharat Rasayan Ltd,SHWETA GUPTA,SELL,110900,37.75,-
30-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,SELL,342991,156.28,-
30-MAR-2009,BRANDHOUSE,Brandhouse Retails Limite,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,575000,16.31,-
30-MAR-2009,GMRFER,GMR Ferro Alloys & Indust,SHRINE FINANCE & INVESTMENTS PVT LTD,SELL,102000,25.20,-
30-MAR-2009,GMRINDS,GMR Industries Limited,SHRINE FINANCE & INVESTMENTS PVT LTD,SELL,183852,73.75,-
30-MAR-2009,IOLN,IOL Netcom Limited,VENKATESHWARA SECURITIES PVT LTD,SELL,287000,38.00,-
30-MAR-2009,JAYAGROGN,Jayant Agro Organics Ltd.,DEEPAK VIJAYSINH VED,SELL,75000,33.50,-
30-MAR-2009,KINETICMOT,Kinetic Motor Company Ltd,CITICORP FINANCE (INDIA) LIMITED,SELL,130000,11.70,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PVT LTD,SELL,1858752,21.59,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,AMBIT SECURITIES BROKING PVT. LTD.,SELL,1409941,21.90,-
30-MAR-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,P R B SECURITIES PRIVATE LTD,SELL,1095014,22.78,-
Sensex below 9600
Sensex that had surged over 1,100 points during the last five sessions witnessed a major sell-off today. Tracking weak Asian markets, Sensex was 146 points down at 9902 at the opening bell, and continued to fall all through the day. After plunging below 9600 mark to touch the day's low of 9521, Sensex moved within a range though with a negative bias. A spell of panic selling towards the close led Sensex close 480 points down at 9568 whereas Nifty shed 131 points to close at 2978.
Except consumer durables and health care that were marginally up, all other sectoral indices posted losses for the day. Banking and metals sectors were the worst hit, down 7-8% each, information technology, teck , capital goods power and public sector units sectors were down over 3-4% each.
Market breadth, the number of advancing shares to declining shares, was negative. Of the 2,473 stocks traded on BSE, 1,471 stocks declined, whereas 904 stocks advanced. Ninety eight stocks ended unchanged. Most of the index heavyweights ended in the red. JP Associates tumbled 12.34% at Rs78.50. ICICI Bank at Rs337.95, Tata Steel at Rs196.15, Reliance Infrastructure at Rs502.45, DLF at Rs165.55, State Bank of India at Rs1,022 and Tata Consultancy Services at Rs522.75 fell by around 9-12% each. Among other major losers, Hindalco Industries dropped 8.81% at Rs50.20, Tata Motors lost 8.74% at Rs172.30, HDFC fell 8.72% at Rs1,450.55 and Reliance Communications declined by 8.70% at Rs167.85. National Thermal Power Corporation, however, bucked the downtrend and gained 0.80% at Rs183.50. Sun Pharmaceutical Industries was up 0.25% at Rs1,079.50.
Banking stocks were among the worst hit. Kotak Bank dropped 11.02% at Rs268.45, Punjab National Bank slumped 9.97% at Rs397.15, Yes Bank shed 9.59% at Rs49.95 and Axis Bank slipped by 7.84% at Rs397.40. Bank of Baroda, Federal Bank, Union Bank, Indian Overseas Bank, Karnataka Bank, Bank of India and Oriental Bank of Commerce also ended weak.
Over 1.63 crore shares of Cals Refineries changed hands on BSE followed by Reliance Natural Resources (1.31 crore shares), Unitech (1.21 crore shares), S Kumars (98.56 lakh shares) and Suzlon Energy (79 lakh shares).
Post Session Commentary - March 30 2009
Indian market today dived deeply into red to close with huge losses along with other Asian counterparts. Profit booking together with political worries ahead of parliamentary elections weighed on sentiments. Besides, weak European markets also fueled to the negative attitude. BSE Sensex tanked around 5% to close below 9,600 level and NSE Nifty lost more than 4% to end lower than 3,000 mark.
The market opened sharply below its last closing figure mirroring unfavorable cues from global markets. The US stock markets ended lower on Friday on account of profit booking at the end of week. US Stocks retreated as the heads of JPMorgan Chase and Bank of America said results worsened in March and lower oil and metal prices pulled down commodity producers. Further, domestic bourses continued to southbound on huge selling pressure over the ground. Profit taking mainly led by weak US index futures contributed to hit the investors’ sentiments. During last trading hours, market lost further ground to widen its losses led by all round selling. Last week market gained solid ground tracking positive cues from the markets all over the world. From the sectoral front, Bank, Metal, Reality, IT, Teck, Capital Goods and Power stocks observed most of the selling from these baskets. Mid Cap and Small Cap stocks also stayed out of favor. However, Consumer Durables and Pharma stocks remained in limelight as contributed most of the buying.
Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth indicating the overall health of the market remained weak as 1471 stocks closed in red while 904 stocks closed in green and 98 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 480.35 points at 9,568.14 and NSE Nifty ended down by 130.50 points at 2,978.15. BSE Mid Caps and Small Caps closed with losses of 43.57 and 38.06 points at 2,890.59 and 3,200.05 respectively. The BSE Sensex touched intraday high of 9,902.35 and intraday low of 9,520.96.
Losers from the BSE Sensex pack are JP Associates (12.34%), ICICI Bank (12.27%), Tata Steel (12.24%), Reliance Infra (11.43%), DLF Ltd (9.34%), SBI (9.18%), TCS Ltd (9.12%), Hindalco (8.81%), Tata Motors (8.74%), HDFC (8.72%), RCom (8.70%), Sterlite Industries (6.18%), HDFC Bank (5.18%) and BHEL (4.98%).
Gainers from the BSE Sensex pack are NTPC Ltd (0.80%) and Sun Pharma (0.25%).
On the global markets front the Asian markets which opened before the Indian market, ended in deep red tracking Wall Street losses overnight. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite lost 16.40, 663.17, 390.89, 72.52 and 40.05 points at 2,358.04, 13,456.33, 8,236.08, 1,673.14 and 1,197.46 respectively.
European markets which opened after the Indian market are trading lower. In Frankfurt the DAX index is trading down by 146.16 points at 4,057.39 and in London FTSE 100 is trading lower by 94.63 points at 3,804.22.
The BSE Bank stocks under performed the benchmark indices as dropped by (8.58%) or 414.56 points to close at 4,414.47 on profit booking after a recent surge. Major losers are ICICI Bank (12.27%), Kotak Bank (11.02%), Punjab National Bank (9.97%), Yes Bank (9.59%) and SBI (9.18%).
The BSE Metal index closed with decrease of (7.41%) or 452.41 points at 5,657.68. Scrips that lost are Tata Steel (12.24%), Welspan Gujarat SR (10.35%), Steel Authority (9.24%), Hindalco (8.81%) and Jindal Saw (8.47%).
The BSE Reality ended down by (7.24%) or 118.32 points at 1,516.42. Losers are Housing Development (9.57%), DLF Ltd (9.34%), Indiabull Real (6.95%), Ansal Infra (6.60%) and Unitech Ltd (6.13%).
The BSE IT index lost (4.43%) or 103.54 points to close at 2,234.26 on fear of slashing down of prospective orders for India. Losers are TCS Ltd (9.12%), Rolta India (5.94%), NIIT Ltd (5.90%), Wipro Ltd (4.74%) and Tech Mahindra (4.67%).
The BSE Teck index ended lower by (3.94%) or 74.04 points to close at 1,804.87. Main losers are TCS Ltd (9.12%), RCom (8.70%), UTV Software (6.04%), Rolta India (5.94%) and NIIT Ltd (5.90%).
The BSE Capital Goods index also ended lower by (3.81%) or 247.87 points at 6,260.80 on worries that a slumping economy might restrict prospective orders. Suzlon Energy (9.12%), Havells India (7.59%), Reliance Industrial Infra (7.09%), Punj Lloyd (5.53%) and Gammon Indi (5.36%) ended in negative territory.
Cairn India fell 6.79% to Rs. 181.90 as crude oil prices dropped. Fall in crude oil prices would result in lower realizations from crude sales for the oil exploration firm.
Larsen & Toubro shed by 4.27% to despite the company won an order worth Rs. 345 crore to manufacture steam generators for Nuclear Power Corporation of India.
Unichem Laboratories lost 2.33% to Rs. 160.80 despite it received approval from US Food & Drug Administration (FDA) for Topiramate tablets in the strengths of 25 mg, 50 mg and 100 mg.
Asian Paints Ltd increased by 2.38%. The company has informed that the Board of Directors of the Company at its meeting held on March 28, 2009, has approved a Scheme of Amalgamation (the Scheme) of Technical Instruments Manufacturers (India) Ltd (a wholly owned subsidiary of the Company) with the Company under the provisions of Company Act, 1956.
Sun Pharmaceutical Industries gained 0.25% as it announced that USFDA has granted an approval for its abbreviated new drug application (ANDA) to market generic Topamax, topiramate tablets.
Financial Technologies ended up by 3.05%. The company is in talks with the London Stock Exchange to sell a minority stake in its forthcoming stock exchange.
Sensex sheds nearly 5% on weak global equities, political uncertainty
Profit taking after a recent solid surge accelerated a decline on the domestic bourses triggered by weak global equities. Banking, metal and realty stocks tumbled. The BSE 30-share Sensex tanked 480.35 points, or 4.78%. The S&P CNX Nifty fell below the psychological 3,000 mark. Political uncertainty ahead of parliamentary elections also weighed on the market.
The market had surged last week tracking a solid rally in global stocks. A steep fall in the India's inflation also raised expectations of a further easing of the monetary policy by the Reserve Bank of India. The 30-share BSE Sensex jumped 1,081.81 points or 12.06% to 10,048.49, in the week ended Friday, 27 March 2009. The BSE Sensex jumped 1888.09 points or 23.13% in twelve trading sessions to 10,048.49 on 27 March 2009 from a three-year closing low of 8,160.40 on 9 March 2009.
European markets which opened after Indian market dropped on Monday, 30 March 2009, with investors focusing on automakers and banks, as Washington rejected restructuring plans for General Motors and Chrysler, while Spain announced its first banking bailout since the beginning of the crisis. Key benchmark indices in France, Germany and UK were down by between 2.06% to 3.1%.
Asian markets which opened before Indian markets declined for the first time in six days, paring the regional benchmark index's best month since 1999, as US Treasury Secretary Timothy Geithner said some banks will need large amounts of government aid. Key benchmark indices in Hong Kong, South Korea, China, Singapore and Taiwan were down by between 0.69% to 4.78%.
Geithner announced this month a plan to shore up the nation's banks with a public-private partnership to finance the purchase of illiquid real-estate assets.
JPMorgan Chase & Co.'s Chief Executive Officer Jamie Dimon said in an interview with CNBC that March 2009 was a little tougher than January 2009 and February 2009 for the bank. Kenneth Lewis, Bank of America Corp.'s CEO, said the lender's trading book wasn't as good as in the first two months. The two said earlier this month that their banks were profitable through February 2009, excluding taxes and provisions, contributing to advances in financial shares.
Japan's Nikkei average slipped 4.53% on Monday, as investors locked in profits after last week's sharp rally, with bank shares such as Mitsubishi UFJ Financial Group falling following a drop in their US counterparts late last week. Japanese industrial production fell 9.4% in February 2009 from the previous month, government data showed today, the longest streak of declines since 2001.
The decline in Asian shares accentuated as the US said General Motors Corp. and Chrysler LLC must overhaul recovery plans to justify further taxpayer aid.
Meanwhile, hopes for a coordinated agreement on a new stimulus plan to help revive the global economy at this week's Group of 20 nations summit appear diminished ahead of the formal start of the meeting, according to reports. UK Chancellor Alistair Darling downplayed chances that leaders will unveil a completely new stimulus package in an interview Sunday with the British Broadcast Corporation.
The Telegraph reported Monday that British Foreign Secretary David Miliband had downplayed a leaked draft of a G20 communique that contained reference to a coordinated $2 trillion spending boost. Miliband was cited in the report as saying that the figures in the draft referred to spending packages already underway.
Trading in US index futures indicated the Dow could fall 171 points at the opening bell on Monday, 30 March 2009. Investors should sell US stocks because earnings are likely to keep weakening, according to a Morgan Stanley report. The 30 members of the Organization for Economic Cooperation and Development are likely to see their economies contract by 4.2% this year, the group's Secretary General Angel Gurria said on Friday, 27 March 2009.
US stocks ended a relatively good week on a negative note on Friday 27 March 2009 as investors locked in profits and banking shares took a hit. The Dow plunged 148.38 points, or 1.9%, to 7,776.18. The S&P 500 index declined 16.92 points, or 2%, to 815.94 and the Nasdaq composite index slipped 41.80 points, or 2.6%, to 1,545.20.
Closer home, the fall in headline inflation to a record low has raised expectations of further easing of the monetary policy by the Reserve Bank of India (RBI) to boost demand in the economy. Inflation based on the wholesale prices rose 0.27% in the 12 months to 14 March 2009, a record low and below the previous week's annual rise of 0.44%, data released by the government during trading hours on Thursday, 26 March 2009 showed.
Retail inflation is, however, ruling firm even as the whole sale price inflation has touched a record low. Retail inflation as measured by the Consumer Price Index for farm labourer (CPI-AL) and rural labourers (CPI-RL) eased to 10.79% in February 2009, a marginal dip from 11.62% and 11.35% respectively in January 2009. CPI-AL and CPI-RL were at 6.38% and 6.11% in corresponding period last year.
Annual inflation for food articles remains high even though it has eased from the 10 year high of 11.64% witnessed in first week of January 2009. Inflation for food articles stood at 7.35% for first week of March 2009 with double-digit price rise for many items including sugar and gur, pulses and cereals. At the time of announcing a reduction in key short-term interest rates, the RBI said early this month that though consumer price inflation has remained at elevated level due to increase in primary articles prices, it is expected to decline with a lag effect due to sharp fall in the wholesale price inflation.
Prime Minister Manmohan Singh on Tuesday, 24 March 2009 said India's economy will revive in a big way in six to seven months as stimulus packages start to take effect. On the same day, Planning Commission Deputy Chairman Montek Singh Ahluwalia scaled down the GDP (gross domestic product) growth projection for the current fiscal to 6.5% from the 7.1% increase estimated by the government earlier during the year, owing to the ongoing global crisis.
Meanwhile, there are signs that the credit flow to businesses is improving. During the fortnight ended 13 March 2009, loans sanctioned by scheduled commercial banks (SCBs), including regional rural banks, went up by Rs 22,423 crore. This was the third fortnight in a row when credit flow went up. Earlier, an extreme risk aversion by banks had chocked credit flow to the industry - the lifeline of business.
Earlier the global financial crisis ends and sooner the risk appetite of global investors and global companies improves, better it will be for India Inc. An increase in risk appetite of global investors/global companies will help Indian firms raise overseas funds required for business expansion. The global financial crisis has chocked the overseas funding route for Indian firms.
Raising funds could become difficult for small and medium enterprises (SMEs) with new lending regulations for banks, popularly known as Basel II norms coming into practice from 1 April 2009. All business units, irrespective of their size, will need to take ratings for their enterprises to secure working capital, loans, and other funds from banks.
Lack of funding has hit a slew of long-gestation infrastructure projects in India. World Bank Chief Economist & Senior Vice-President, Dr Justin Yifu Lin, on 13 March 2009, said if India can improve its infrastructure such as electricity, power, transportation and port facilities, it will be well on its path to achieve a 9-10% growth.
Meanwhile, foreign institutional investors had stepped up buying of Indian stocks. Foreign institutional investors (FIIs) bought shares worth a net Rs 2,494.70 crore in nine trading sessions from 13 March 2009 to 25 March 2009. FII inflow in March 2009 totaled Rs 994.90 crore (till 27 March 2009). However, Foreign institutional investors (FIIs) sold shares worth a net Rs 270.70 crore on Friday, 27 March 2009
But the latest sharp fall in the rupee will result in a depreciation in the value of FIIs' equity portfolio to the extent of the fall in the rupee. A sharp volatility in the rupee may also dissuade fresh buying by foreign funds. The Indian rupee declined sharply on Monday, 30 March 2009, weighed down by the dollar's strength against some currencies and weakness in regional stock markets. The partially convertible rupee was at 51.12 compared to Thursday's closing of 50.59/61. The rupee hit a record low beyond 52 per dollar early this month.
Domestic institutional investors have been absorbing heavy selling by foreign funds witnessed in first two months of calendar year 2009. Mutual funds are likely give support to prices to prop-up year end net asset values (NAVs). The financial year ends on Tuesday, 31 March 2009.
The recent steep volatility in the currency does not augur well for corporate India as it may result in hedging losses for some firms. Meanwhile, the National Advisory Committee on Accounting Standards (Nacas), has reportedly favoured suspending for two years a key rule that requires firms to mark-to-market (MTM) foreign exchange assets and liabilities, a decision which is favourable for corporate India.
Accounting Standard-11 mandates MTM provisioning in the P&L a/cs for forex-related gains and losses. It requires that forex assets & liabilities be recorded at a fair value on the date of preparation of the balance sheet. The demand to suspend this rule, known in accounting circles as AS-11, was made by the Confederation of Indian Industry (CII) on grounds that it could severely distort the earnings of many companies. It was contended that this accounting standard, designed to address normal conditions, should be suspended for the time being, as the present market conditions were not normal.
The upside on the domestic bourses will be capped in the next two months due to political uncertainty ahead of parliamentary election to be held between mid-April 2009 to mid-May 2009. More so at a time when it is highly unlikely that either Congress or BJP will come to power on its own, i.e., without the support of other small/regional parties. Early estimates point a fractured mandate. An alliance led by the Congress party is ahead in pre-poll surveys carried out by several polls.
But in a move which could undermine the chances of a Congress-led alliance getting more seats in the election, RJD supremo Lalu Prasad has announced candidates for 28 of the 40 constituencies in Bihar including from the three seats where Congress has sitting MPs. RJD is one of the key constituents of the current Congress-led UPA government at the Centre.
The Congress, meanwhile, has reportedly sealed a seat-sharing pact with the Nationalist Congress Party (NCP) in the populous Maharashtra state. Relations between the two parties have been prickly as the NCP negotiated with opposition parties to undercut Congress and boost its leader's prime ministerial ambitions. Congress will stand for 26 seats in the state and the NCP for 22. The allies are weighing up their options for a similar deal outside the state.
The Congress party on Tuesday 24 March 2009 said it would extend interest relief to farmers and build on the national job guarantee scheme. The focus on populist measures by Congress may weigh on the stock market sentiment especially at a time when the fiscal deficit has risen sharply. Releasing the party manifesto for the election, the Congress party on Tuesday said it would maintain government control over state-run firms in the manufacturing and finance sectors.
As per reports, BJP's manifesto is likely to be even more populist than that of the Congress party. The BJP looks set to sell rice to families below the poverty line at the hugely subsidised price of Rs 2 a kilo. Congress has already promised to sell 25 kilos of wheat or rice per month at Rs 3 a kilo.
A group of smaller political parties, including the communists, have formally launched a Third Front in a bid to provide an alternative to the two main parties viz. the Congress and the BJP. A latest jolt to the Congress party came from a decision of the regional party in Tamil Nadu viz. the PMK on Thursday, 26 March 2009, to join hands with the All India Anna Dravida Munnetra Kazhagam (AIADMK). PMK is a part of the ruling Congress-led United Progressive Alliance at the centre. The PMK's decision to join AIADMK could give impetus to the Third Front if the PMK and AIADMK join it.
The BSE 30-share Sensex was down 480.35 points, or 4.78%, to 9,568.14. At the day's high of 9,902.35, the Sensex fell 146.14 points in early trade. At the day's low of 9,520.96, the Sensex fell 527.53 points in late trade. The S&P CNX Nifty was down 130.50 points or 4.2% to 2,978.15. It hit a low of 2,962.40.
The BSE clocked a turnover of Rs 3,247 crore, lower than Rs 4,347.91 crore on Friday, 27 March 2009.
Nifty April 2009 futures were at 2980.80, at a premium of 2.65 points as compared to the spot closing of 2978.15. Turnover in NSE's futures & options (F&O) segment was Rs 50,238.21 crore, lower than Rs 51,171.38 crore on Friday, 27 March 2009.
The BSE Mid-Cap index was down 1.48% and BSE Small-Cap index fell 1.18%. Both the indices outperformed the Sensex.
The BSE Consumer Durables index (up 0.53%), the BSE Healthcare index (up 0.02%), the BSE FMCG index (down 2.06%), the BSE Auto index (down 2.58%), the BSE Oil & Gas index (down 2.64%), the BSE PSU index (down 3.21%), the BSE Power index (down 3.61%), the BSE Capital Goods index (down 3.81%), the BSE TECk index (down 3.94%), the BSE IT index (down 4.43%) outperformed the Sensex.
The BSE Bankex (down 8.58%), the BSE Metal index (down 7.4%), the BSE Realty index (down 7.24%) underperfomed the Sensex.
The market breadth, indicating the overall health of the market, was weak on BSE with 934 shares advancing as compared with 1,504 that declined. A total of 66 shares remained unchanged.
From the 30 stock Sensex pack 28 stocks fell while the rest gained. Jaiprakash Associates, Reliance Infrastructure and Reliance Communications fell by between 8.7% to 12.34%.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 2.09% to Rs 1,515.70 extending the fall for the second straight day on profit taking after recent solid surge. However, the stock came off the day's low of Rs 1,494.10. The Reliance Industries stock had jumped 35.67% in eleven trading sessions to Rs 1565.50 on 26 March 2009 from a recent low of Rs 1153.85 on 9 March 2009.
Meanwhile, report suggests firm will begin gas production from the Krishna Godavari (KG) basin in 24 to 48 hours, with gas production from the Dhirubhai 6 (D6) block estimated to add close to $2 billion to the company's profit at peak production levels.
RIL's advance tax payment fell 16.47% to Rs 370 crore in Q4 March 2009 over Q4 March 2008.
India's largest oil exploration firm by sales ONGC fell 3.11% to Rs 782.90 as crude oil fell for a second day in New York on Friday, 27 March 2009, on speculation global stockpiles will increase as the world economy remains in recession. But the stock came off the day's low of Rs 770.15. Cairn India declined 6.79%
Crude oil for May delivery fell as much as $1.26, or 2.4% to $51.12 a barrel on the New York Mercantile Exchange. Fall in crude oil prices would result in lower realizations from crude sales for the oil exploration firm.
Shares of oil marketing companies rose after the government recently issued oil bonds worth Rs 10,000 crore to compensate them for under-recoveries on sale of petroleum products at a controlled price during the current financial year . BPCL and HPCL rose by between 0.95% and 0.94% respectively.
Indian Oil Corporation fell 2.28% after company said on Wednesday, 25 March 2009 the government has approved a proposal to absorb its subsidiary Bongaigaon Refinery & Petrochemicals (BRPL). Indian Oil will issue four shares for every 37 shares in BRPL.
Indian Oil Corporation has been issued oil bonds worth Rs 5,817.27 crore, while Bharat Petroleum Corporation has been issued bonds worth Rs 2,144.32 crore. Hindustan Petroleum Corporation has got bonds worth Rs 2,038.41 crore.
Some FMCG stocks rose on expectations of better Q4 March 2009 results following reports of higher advance tax payment by these firms. United Spirits, Dabur India, REI Agro, Tata Tea, Nestle India and ITC rose by between 0.35% to 3.11%. But India's largest FMCG firm by sales Hindustan Unilever fell 0.25%. The company's advance tax payment rose 30% to Rs 130 crore in Q4 March 2009 over Q4 March 2008.
Some healthcare stocks rose on expectations of better Q4 March 2009 results following reports of higher advance tax payment by these firms. Cadila HealthCare, Glenmark Pharmaceuticals, Biocon, Pfizer, Fortis HealthCare, Matrix Laboratories rose by between 0.64% to 5.87%.
Sun Pharmaceutical Industries rose 0.25% after the company on Monday said it received approval from the U.S. Food and Drug Administration to sell topiramate tablets, used for the treatment of seizures.
Metal stocks fell as metal prices declined on the London Metal Exchange. Steel Authority of India, National Aluminum Company, Sterlite Industries, Hindustan Zinc, Tata Steel, and Hindalco Industries fell by between 4.97% to 12.24%.
Banking stocks declined on concerns of marked-to-market losses on their bond portfolio. India's largest bank in terms of assets and branch network State Bank of India fell 9.18%. Its advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.
India's largest private sector bank by net profit ICICI Bank fell 12.27% after the stock rose over 19% in past five sessions. Its American depository receipts (ADR) fell 1.15% on Friday, 27 March 2009. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 when compared to Q4 March 2008.
India's second largest private sector bank by operating income HDFC Bank fell 5.18% as its ADR fell 4.61% on Friday. Its advance tax payment rose 10% to Rs 275 crore in Q4 March 2009 over Q4 March 2008.
India's biggest dedicated housing finance firm by operating income HDFC fell 8.72%. It announced a 50 basis points reduction in its retail prime lending rate (RPLR) to 14% effective Wednesday 25 March 2009.
Other PSU stocks, Union Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, Indian Overseas Bank, fell by between 5.41% to 9.97%.
A sharp fall in bond prices this year will result in depreciation in banks' bond portfolio. The yield on 10-year bonds fell for a seventh day in a row on Monday, 30 March 2009, the longest losing streak in almost two months, on speculation increasing government debt sales will reduce demand for existing securities. The yield on benchmark notes due 2019 climbed to the highest since November 2008 after the central bank last week said India plans to sell a record Rs 241000 crore ($47 billion) of bonds in the first half of the year starting 1 April 2009.
The government plans to borrow Rs 362000 crore in the whole of the next fiscal year, also the most ever. The yield on the 6.05% note due February 2019 added 15 basis points to 7.17% as of 10:13 IST in Mumbai. That is the highest since 25 November 2008. Bond yields and bond prices are inversely related. It may be recalled that banks made huge treasury gains in the December 2008 quarter following a surge in bond prices.
Banking stocks had risen sharply in the past few days on rate cut hopes and after the Reserve Bank of India (RBI) on Wednesday 25 March 2009 issued fresh norms for the treatment of provisions for restructured accounts, standard assets, and non-performing assets (NPAs), a move that will help improve the financial health of banks.
Outsourcing focussed IT firms declined for the second straight day after US based technology outsourcing and consulting firm Accenture on Thursday 26 March 2009 reported a drop in quarterly sales and lowered its full-year profit outlook due to a stronger dollar and a slower global economy.
India's second largest software services exporter Infosys Technologies fell 3.63% as its ADR fell 7.43% on Friday. Recent reports said it may win a large IT project from the government, which will run on a transaction-based pricing model, similar to the passport processing contract its larger rival Tata Consultancy Services (TCS) won last year. The contract is among the many large IT contracts that are up for bidding from government departments or public sector undertakings, reports suggest.
India's third largest software services exporter, Wipro fell 4.74% as its ADR fell 5.37% on Friday. Recently its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC).
India's largest software services exporter by sales TCS fell 9.12% . The company's advance tax payment fell 54.3% to Rs 53 crore in Q4 March 2009 over Q4 March 2008.
Rate sensitive realty stocks declined on talks falling interest rates have failed to revive housing demand. DLF, Indiabulls Real Estate and Unitech fell by between 6.6% to 9.34%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
Capital goods stocks fell on worries a slowing economy will crimp orders. Bharat Heavy Electricals, Crompton Greaves, Punj Lloyd, Areva T&D, ABB fell by between 0.42% to 5.53%.
India's largest engineering and construction firm by sales Larsen & Toubro was lost 4.27% to Rs 650.95 even as the company said it had won an order worth Rs 345 crore to manufacture steam generators for Nuclear Power Corporation of India.
Auto stocks fell on profit taking after a recent solid surge triggered by expectations of good sales in March 2009. Tata Motors, Hero Honda Motors, Mahindra & Mahindra and Maruti Suzuki India fell by between 1.35% to 8.74%.
Cals Refineries clocked the highest volume of 1.63 crore shares on BSE. Reliance Natural Resources (1.32 crore shares), Unitech (1.21 crore shares), S Kumar Nationwide (98.66 lakh shares) and Suzlon Energy (79.07 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 354.61 crore on BSE. ICICI Bank (Rs 229.17 crore), Aban Offshore (Rs 131.88 crore), Tata Steel (Rs 131.50 crore) and Reliance Infrastructure (Rs 126.66 crore) were the other turnover toppers in that order.
Market may resume weak
The market is monitoring the international markets for further direction and the weakness across the global markets may drag down the local indices. The market may open in negative territory following the slump in Asian markets in morning trades. However, after posting significant gains in last five sessions, buying interest may continue on the back of firm trend. Among the key local indices, the Nifty has good support around 3050-3000 levels and upside till 3150-3200 levels. The Sensex has a likely support at 9900 and may face resistance at 10200.
US indices slipped on Friday with the Dow ended lower at 7776 down 148 points, while the tech-laden Nasdaq declined to close 42 points lower at 1545.
Indian floats had a weak outing on the US bourses. Infosys, Satyam, Wipro, HDFC Bank, Patni Computer, ICICI Bank and Dr Reddy lost around 1.7% each while Tata Motors, MTNL and Rediff gained 3-8% each.
Crude oil prices in the international market edged lower, with the Nymex light crude oil for May delivery lost by $1.96 to close at $52.38 per barrel. In the commodity space, the Comex gold for June series declined $16.90 to settle at $925.30 a troy ounce.
Pre Session Commentary - March 30 2009
Today the domestic markets are likely to open negative as the Asian markets have opened with heavy blood bath. Also, the investors will be keeping close eye on the March quarterly results as well as the general elections scheduled in April 2009. The market is likely to give up its previous week gains as there are bearish sentiments across the major global markets. This could result in heavy profit booking across the sectoral indices. The market is likely to witness some selling pressures tracking the weakness in the global markets.
On Friday, the domestic markets traded volatile however later managed to close in green. Since the opening the domestic markets turned volatile as the other Asian markets were also trading mixed. Despite positive closing of the US markets, the Asian markets traded with low zeal. A very cautious trade was witnessed amidst fears of peak level of bench mark indices. After a consecutive rally a range bound trade was rather expected. However on the other hand broader markets outperformed the benchmark indices as BSE Mid cap and Small cap gained 2.09% and 1.59% respectively. Sectors like Metal, HC, Bankex and Auto ended with remarkable gains of 4.85%, 2.81%, 2.61% and 2.22% respectively. However IT and Oil & Gas closed with losses of 0.99% and 0.12% respectively. During the session we expect the markets to be trading negative with bearish trend.
The BSE Sensex closed with marginal gain of 45.39 points at 10,048.49 and NSE Nifty ended with a gain of 26.40 points at 3,108.65. BSE Mid Caps and BSE Small Caps ended with gains of 59.94 points and 50.77 points at 2,934.16 and 3,238.11 respectively. The BSE Sensex touched intraday high of 10,127.09 and intraday low of 9,913.40.
On Friday, the US Markets tumbled to close with losses on account of profit booking at the end of week. Weakness in large-cap tech caused the Nasdaq Composite to under perform its counterparts. Stocks retreated as the heads of JPMorgan Chase and Bank of America said results worsened in March and lower oil and metal prices pulled down commodity producers. Also, the commerce department reported that the Consumer spending reported a marginal rise for the second straight month in February. May crude oil closed 3.6% or $1.96 lower at $52.38 per barrel on New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 148.38 points at 7,776.18, the NASDAQ Composite (RIXF) index declined by 41.80 points to close at 1,545.20 and the S&P 500 (SPX) dropped by 16.92 points to close at 815.94.
Today major stock markets in Asia are trading in red. Hang Seng is trading down by 257.32 points at 13,862.18 followed by Japan''s Nikkei which is lower by 151.91 points at 8,475.06. Further, Strait Times is down by 25.20 points at 1,720.46, Seoul Composite points is low by 14.08 points at 1,223.43 and Taiwan Weighted dropped by 94.88 points at 5,295.82.
Indian ADRs ended mostly lower. In technology sector, Infosys ended down by 7.43% along with Satyam by 1.79%. Further, Wipro lost 5.37% and Patni Computers closed lower by 2.37%. In banking sector ICICI Bank and HDFC Bank lost 1.15% and 4.61% respectively. In telecommunication sector, MTNL advanced by 4.03% while Tata Communication dropped by 1.58%. Sterlite Industries increased by 0.56%.
On BSE, total number of shares traded were 38.93 Crore and total turnover stood at Rs 4,347.91 Crore. On NSE, total number of shares traded was 87.97 Crore and total turnover was Rs 12,829.61 Crore.
Top traded volumes on NSE Nifty – Unitech with 56448756 shares, SAIL with 2152351 shares, Suzlon Energy with 20265456 shares, Tata Steel with 18856245 shares followed by DLF with 16261955 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1041384 with a total turnover of Rs 15,401.64 Crore. Along with this total number of contracts traded in stock futures were 509429 with a total turnover of Rs 15,730.05 Crore. Total numbers of contracts for index options were 1210770 with a total turnover of Rs 18,800.17 Crore and total numbers of contracts for stock options were 37151 and notional turnover was Rs 1,239.52 Crore.
Today, Nifty would have a support at 3,012 and resistance at 3,123 and BSE Sensex has support at 9,721 and resistance at 10,090.
Market may slip on weak global cues, profit taking
The market may witness profit taking on weak global cues and after strong recent surge in stock prices on the back of sustained buying by foreign funds and hopes of interest rate cut.
The stock markets displayed a distinctly strong trend during the week ended 27 March 2009 as the benchmarks jumped over 10%, on a host of positive global factors. A steep fall in the India's inflation also raised expectations of a further easing of the monetary policy by the Reserve Bank of India. Inflation based on the wholesale prices rose 0.27% in the 12 months to 14 March 2009, a record low. The 30-share BSE Sensex jumped 1,081.81 points or 12.06% to 10,048.49, in the week ended Friday, 27 March 2009. The BSE Sensex jumped 1888.09 points or 23.13% in twelve trading sessions to 10,048.49 on 27 March 2009 from a three-year closing low of 8,160.40 on 9 March 2009.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2,494.70 crore in nine trading sessions from 13 March 2009 to 25 March 2009. As per the provisional figures on NSE, the foreign institutional investors bought shares worth Rs 80.43 crore while domestic funds bought shares worth Rs 42.98 crore on Friday, 27 March 2009 when the BSE 30-share Sensex was up 28.35 points, or 0.28%, to 10,031.45, its highest closing since 6 January 2009.
Asian markets which opened before Indian markets were trading weak today 30 March 2009. Key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan were down by between 1.16% to 1.69. China's Shanghai Composite was up 0.08%.
Japan's Nikkei average slipped 1.76% on Monday, as investors locked in profits after last week's sharp rally, with bank shares such as Mitsubishi UFJ Financial Group falling following a drop in their US counterparts late last week.
US stocks ended a relatively good week on a negative note on Friday 27 March 2009 as investors locked in profits and banking shares took a hit. The Dow plunged 148.38 points, or 1.9%, to 7,776.18. The S&P 500 index declined 16.92 points, or 2%, to 815.94 and the Nasdaq composite index slipped 41.80 points, or 2.6%, to 1,545.20.
In economic front, US personal spending rose for a second straight month climbing 0.2% in February 2009 after January's revised 1-% increase, while income slipped 0.2%. And consumer sentiment improved more than expected in March 2009.
Wall Street registers gains for third consecutive week
Wall Street heads for first monthly gain after a long time
With all ten sectors registering good gains for the week, US market witnessed substantial gains for the week that ended on Friday, 27 March, 2009. Treasury Secretary Geithner unveiling his plan to purchase bad assets from banks, encouraging report in the housing sector coupled with a better thane expected report in the durable goods sector gave stocks a strong start during the week. An earning report from retailer Best Buy beating Wall Street estimates just kept gains growing during the week. But downside guidance from Accenture took a toll on technology stocks hammering the indices during the last day of the week.
Nevertheless, stocks witnessed strong gains for the week. The Dow Jones Industrial Average gained 497 points (6.8%) for the week to end at 7776. Tech - heavy Nasdaq gained 88 (6%) to end at 1,545. S&P 500 gained 47 (6.2%) to end at 816. Strength in financial sector followed by industrials and consumer discretionary sectors helped the indices post good gains for the week.
On Monday, 23 March, 2009, The Treasury Department unveiled their plan about buying back most of the bank's toxic assets thereby cleaning up their balance sheet to the extent possible. Treasure Secretary Tim Geithner detailed that the Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies. This boosted the confidence of the investors and stocks ended substantially higher.
Also, on Monday, the National Association of Realtors reported that sales of U.S. pre-owned homes rose 5.1% to a seasonally adjusted annual rate of 4.72 million in February, boosted by "deep" price discounts. It was the largest percentage gain since July 2003. Sales are down 4.6% in the past year. February's sales increased in all four regions as tracked by the NAR. This gave stocks a huge boost on Monday and Dow ended higher by 98 points.
Again on Wednesday, 25 March, 2009, the Commerce Department reported that demand for machinery and other capital goods rose in February, driving orders for durable goods up 3.4%. The increase came after six consecutive months of drop. Many sectors posted gains in February. The orders for durable goods fell a revised 7.3% in January, much worse than the previous estimate of a 4.5% decline.
In a separate report, the Census Bureau reported that sales of new homes nationwide rebounded by 4.7% in February. Sales of new homes rose to a seasonally adjusted annual rate of 337,000 last month, higher than the 323,000 expected. Meanwhile, the government revised January's sales pace for new homes to 322,000 units, up from the 309,000 reported earlier.
With these reports, Dow ended higher all the first four days of the week.
In the US market on Friday, 27 March, 2009, stocks started and ended the day in the red. After starting the day 117 points down earlier during the day, The Dow Jones Industrial Average ended lower by 148 points at 7,776. The Nasdaq Composite Index, ended lower by 42 points at 1,545. S&P 500 ended lower by 17 points at 815.
Among major economic report for the day, Commerce Department reported today that February personal income in US declined -0.2%, while spending increased 0.2%. Both were in level with estimates. However, real disposable income declined 0.4%.
The technology sector weighed significantly on the Dow on Friday with a number of heavyweights like IBM, Intel coming under pressure today. The tech sector is dragging as fellow component Accenture posted upside results for its latest quarter but the company lowered its outlook for the full year. Also, Intel is trading with weakness after the company announced it will issue a $1 billion common stock offering.
On Friday, crude-oil futures for light sweet crude for May delivery closed at $52.38/barrel (lower by $1.96 or 3.6%) on the New York Mercantile Exchange. For the week, crude ended higher by 0.6%.
In the currency market on Friday, the dollar moved higher against most major rivals as a budget warning from Germany's finance minister pressured the euro.
For the year 2009, Dow, Nasdaq and S&P 500 are down by 11.4%, 2% and 9.7% respectively.
Gitanjali Gems
The substantial price falls suffered by the stock of diamond jeweller, Gitanjali Gems, offers an entry for investors with a long investing horizon. At Rs 41, the stock has fallen 87 per cent from a high of Rs 315, in May 2008. The share trades at just 2.4 times its trailing standalone earnings versus closest competitor Titan’s price-multiple of 16 times.
The stock’s fall may have been precipitated by the floundering gems and jewellery industry — imports and exports deteriorated, both mining and production were put on hold —but appears to have discounted a fair bit of the negative news.
For Gitanjali, a rising proportion of domestic retail sales (as opposed to exports), a shift in product mix towards jewellery (from low-margin polished diamonds) and diversification moves suggest reasonable growth prospects over the long term.
The company’s presence across the value chain allows sourcing from both the Diamond Trading Corporation and other mines (helping better cost control), while forward integration in the jewellery business (from processing of rough diamonds into jewellery, branding and retail) lowers business risk and allows better margins than pure diamond exporters.
Key segments
Gitanjali operates in three main lines of business — diamonds and jewellery, the nascent lifestyle products and SEZs. Within the diamonds segment, the company processes (cutting and polishing) and exports diamonds; besides retailing diamond and gold jewellery in India and overseas. The jewellery segment did well in the past three years, clocking a CAGR of 63 per cent, with contribution to revenue going up from 22 per cent in 2006 to 42 per cent in the latest quarter.
The company expects to move to a 50:50 mix over the next year or so. This segment generates a better return on capital employed, 15 per cent versus the 1.5 per cent offered by diamonds (year-to-date figures).
Through the lifestyle business, the company retails watches, silver wear, cosmetics, perfumes, leather and accessories. Gitanjali’s SEZ initiative has not begun to contribute to revenues as yet.
Besides some in-principle approvals, it has one notified 80-hectare gems and jewellery SEZ at Hyderabad.In another initiative, Gitanjali recently entered into a joint venture agreement with the Kuwait-based Hassan’s Optician Company to secure a foothold in the eyewear segment.
Brand recall
Gitanjali is a top player in the branded jewellery market; the only other player with a significant national footprint being Titan Industries’, Tanishq. Gitanjali, however, leans towards the premium end, with an emphasis on diamond jewellery. Brands include the high-end Nakshatra and D’damas, daily wear Gili and Asmi, bridal collections Vivaha and Maya, pure-gold Collection G, and couples collection Sangini.
Most command good brand equity, and the infancy of India’s branded jewellery market will allow it to make the most of the opportunities thrown up as the market develops. Distribution is through ‘shop-in-shops’ housed in malls, independent jewellers, besides exclusive stores.
The domestic branded jewellery business appears very promising for the company at this juncture; a focus on premium jewellery leaves it less susceptible to cutbacks on spending by the mid-lower income groups.
The segment grew 20 per cent in the nine months ended December 2008. The problems related to global recessions and a cutback in US consumer spends may pose challenges for the diamond export segment.
On solid ground
Helped by its expanding retail footprint, Gitanjali’s sales have grown at a compounded annual rate of 25 per cent in the past three years, far surpassed by a 151 per cent growth in net profits in the same period.
A shift in product mix and cost-cutting measures pushed net profit margins from 1 per cent in FY 2005 to 5.2 per cent in the previous financial year. Gross margins improved from 2.5 per cent to 6.7 per cent in the same period.
Exports have always formed a bulk of revenues, though the share has come down to 52 per cent (December ’08 quarter) from the 71 per cent in 2005. Despite this, and significant imports, the company has not suffered any forex loss as yet.
Leverage is fairly low at 0.7 times (consolidated); coupled with a growing interest cover from 2.5 times in 2005 to its current 6.6 times, the company may not run into near-term funding roadblocks. Loans are primarily to fund working capital — the sector it operates in calls for high working capital. Its fund-raising spree through 1 per cent FCCBs and GDRs has left it with enough funds on hand to tide over for the next few quarters at least.
Challenges
Gitanjali’s SEZs concentrate primarily on gems and jewellery processing which is currently lacklustre. About $73.86 million of the FCCB, outstanding as of March ‘08, is due by 2011. Given the conversion price of Rs 220, the conversion option appears unlikely to be exercised, should the market price remain unattractive until 2011.
The bonds then may have to be redeemed, taking out more than Rs 250 crore of the company’s funds, assuming no conversion has taken place since March ‘08. Working capital forms about 40 per cent of sales; debtors make up almost half the assets with collection periods averaging five months. Hiccups in collection could restrict cash flows and revenues.
Daily News Roundup - March 30 2009
Indian Oil Corp has set a target of commissioning projects worth Rs300bn during the next fiscal.(BL)
Reliance Industries formally signs gas sale and purchase agreements with 12 urea manufacturers in a move that may result in annual fertilizer subsidy savings of Rs30bn for the Centre.(BL)
Tata Motors looking to set up a truck manufacturing plant in Myanmar. (BS)
ONGC set to sign deal with Reliance Industries on rig utilization.(TOI)
Mahindra & Mahindra is working on the cargo version of its recently launched multi-purpose vehicle Mahindra Xylo.(BL)
Low-cost airlines SpiceJet and Jet Airways have reduced fuel surcharge on air tickets. (BS)
BHEL says it has received a Rs3.5bn contract from Nuclear Power Corp.(FE)
Central Bank of India reduces its benchmark prime lending rate by 0.50% to 12%. (BS)
Parsvnath goes slow on hotel expansion, pushes back its plans to buy new land for hotels and projects by 12-18 months. (BS)
Reliance Industries set to begin gas production from the KG basin in the next 24 to 48 hours. (ET)
Spice Group pulls out of Satyam bidding process.(BL)
DoT may undertake a special audit of Bharti Airtel’s accounts for the year 2007-08 to examine allegations of irregular revenue reporting by the company to pay lower fees to the Government.(BL)
SBI hints at rate cuts in next financial year.(FE)
TVS group plans to form new finance company.(BL)
Essar Oil will soon diversify into retailing of liquefied petroleum gas for automotives.(DNA)
Unitech reschedules, repays Rs6-7bn debt due by March.(BL)
Japanese two-wheeler major Honda says it will exit the geared scooter market in India.(FE)
Sun Pharma gets USFDA approval to market generic Topamax, topiramate tablets. (BS)
IL&FS Financial Services has acquired a14.5% stake in Maytas Infra. (ET)
Essar Oil fuel sales turn profitable for the first time. (BS)
SAIL, Tata Steel and JSW Steel, are witnessing a revival of demand following improved consumption from construction and automobile sectors. (ET)
Lupin has picked up 51% stake in Philippines’ Multicare Pharmaceuticals, a branded generic-drugs company with a presence in women’s health and child care.(BL)
Glaxo, Sanofi-Aventis to buy-out majority stake in Shantha Biotec. (ET)
Vishal Retail to raise Rs500mn through debt to invest in inventory and stock. (ET)
Jet Airways looking at leasing out more aircrafts. (ET)
Sophia Power, Adani Power, KSK Power and Monnet Ispat are in the race for participating in NMDC’s thermal coal venture. (BS)
CESC to complete land acquisition for its proposed 1,000 MW coal-based power plant at Neulapoi in Orissa’s Dhenkanal district within three months. (BS)
Gitanjali Gems scraps its plan to set up a SEZ in Nanded, Maharashtra. (BS)
Jet Airways, which had slashed 18-20% of its fleet capacity in the winter schedule (October-February), may look at reducing capacity if the current air traffic slips further.(DNA)
Matrix Labs likely to delist shares.(BL)
Walt Disney Company to hike its stake in UTV Global Broadcasting by purchasing additional 10% stake for Rs329.7mn. (ET)
GSPC to start scouting for LNG supplies by year-end.(BL)
MMTC to launch currency futures market in July.(FE)
Tata Tech eyes PE funds, may dilute 12%.(TOI)
Forex reserves rose by US$5bn to US$254bn in the week ended March 20.(BL)
Prime Minister has ‘advised’ the Reserve Bank of India to further cut interest rates.(BL)
TRAI has proposed that stake sale for new telecom licensees may be eased. (BS)
DoT seeks Finance Ministry’s views on stake sale by new telecom companies.(BL)
Ministry of civil aviation asks domestic carriers to pay Rs4900 per flight as common infrastructure charge to GMR Hyderabad International Airport. (ET)
Government asks automobile makers to roll back all price hikes announced during the last couple of months. (ET)
Central Board of Excise and Customs has proposed to end double taxation on software sales. (ET)
Container traffic fell 26% in Jan’ 09.(Mint)
Government may defer implementation of accounting standard-11.(BL)
India's infrastructure sector output grew 2.2% in February from a year earlier, above an upwardly revised 1.5% in January, according to government data.(FE)
Growth in the Rs450bn organized retail industry has slowed to 5% in the fourth quarter of 2008-09.(FE)
With just days left for fiscal 2008-09 to end, the Railways are unlikely to meet the freight loading target of 850mn tonnes.(FE)
PC sales see first yearly drop of 1% to 8mn units in CY08.(DNA)
Banks parked nearly two-thirds of the incremental deposits that flowed into the banking system in the last six months in investments (mostly Government securities) than lend it to the commercial sector, an analysis of RBI data reveals.(BL)
Banks have been prevented from charging any fee for cash withdrawals using ATMs issued by other banks from April 1 onwards.(FE)
Some softening in store
The nice part about being a pessimist is that you are constantly being either proven right or pleasantly surprised.
The recent rally has caught most market players by surprise, especially after the crash that preceded it. Risk aversion has receded a bit, underscored by the spike in emerging market currencies and commodities. FIIs have turned net buyers in the past few days. All this has happened on the back of a few encouraging news, particularly in the US. Back home too, few positive signs are emerging like the increase in sales of auto, cement and steel sectors.
However, one should not get fooled by the slight improvement in sentiment. A sustained recovery is still far away. What we have witnessed is just a pull-back rally in a bear market. There has to be incremental positive news, both locally and globally, to fuel further advance. April is likely to be critical in this context what with polls and earnings lined up as key events. Today, we expect some cooling as global cues are negative. Technically, 3150 (Nifty) is seen to be a crucial near-term level.
US stocks retreated on Friday at the end of what had been an otherwise strong week, extending the recent rally to three consecutive weeks. Investors chose to step back a bit after the recent spike.
The Dow Jones Industrial Average slid 148 points, or 1.9%, to 7,776.18. The S&P 500 index lost 17 points, or 2%, to 815.94. The Nasdaq Composite index dived 42 points, or 2.6%, to 1,545.20.
Gains earlier in the week were enough to boost the weekly tally. The US stock benchmarks have now posted gains for three consecutive weeks, the best stretch since May last year.
While the market could advance a little more from here, it is likely to soon fizzle out, especially if there is no further good news on the economy or corporate profits. There could be momentum in the short run, but this is a classic bear market rally, nothing more than that.
Financial and technology shares, which led the advance on Thursday, led the fall on Friday. But declines were broad based and 24 of 30 Dow stocks fell.
President Barack Obama met with executives from JPMorgan Chase, Citigroup, Bank of America and other large banks to discuss the financial crisis. The bankers gave their approval of Treasury's plan to strip bad assets off bank balance sheets. They also discussed the recent proposal to overhaul financial regulations.
On the downside, executives at JPMorgan and Bank of America said that March business conditions weakened after a more encouraging start to the year.
Since falling to more than 12-year lows on March 9, the Dow has gained 18.8% and the S&P 500 has rallied 20.6% as of Friday's close. Also on March 9, the Nasdaq touched a more than six-year low. Since then, it has gained 21.8%.
Better-than-forecast economic reports on housing and durable goods orders last week added to optimism about the state of the world's largest economy. Investors have also responded well to the latest plans from the government to stabilise the financial system.
On Thursday, Treasury Secretary Tim Geithner outlined a huge overhaul of the regulatory system. On Monday, he detailed plans to purge bank balance sheets of up to $1 trillion in bad debt that is limiting lending.
In the day's big economic news, personal income fell 0.2% in February after rising 0.2% in January. Economists had forecast a fall of 0.1%. Personal spending rose 0.2% in February after rising 1% in January. Economists had predicted a rise of 0.2%.
The University of Michigan consumer sentiment index rose to 57.3 in March from 56.3 in February, versus economists' forecasts for a reading of 56.8.
In corporate news Google said late on Thursday that it was cutting just under 200 sales and marketing positions worldwide. It is the second round of layoffs in Google history.
General Motors (GM) shares gained on published reports that the government could extend the automaker's restructuring deadline, giving it more time to gain concessions from unions and qualify for more taxpayer help.
The Wall Street Journal said that the government could extend the March 31 deadline by 30 days. On Thursday, GM said that 12% of its US workforce has taken its latest buyout offer. However, the company is still looking to work with the union to alter retiree health care benefits, among other things.
Treasury prices fell, raising the yield on the benchmark 10-year note to 2.76% from 2.73% on Thursday.
Lending rates declined. The 3-month Libor rate fell to 1.22% from 1.23% on Thursday. The overnight Libor rate fell to 0.28% from 0.29%. Libor is a bank-to-bank lending rate.
In currency trading, the dollar gained against the euro and fell against the yen.
US light crude oil for May delivery fell $1.96 to settle at $52.38 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $16.90 to settle at $925.30 an ounce.
Indian markets extended their winning streak to fifth straight trading session as the BSE benchmark Sensex and the NSE Nifty index ended the week above the 10,000 and the 3,100 levels. The rally could be attributed to some short covering as the Nifty April Futures ended with a premium of 18 points.
The BSE Sensex gained 45 points to close at 10,048 and the NSE Nifty was up 26 points at 3,108.
Among the 30-components of Sensex, 23 stocks ended in positive terrain and only 7 stocks ended in red. Among the top gainers were Tata Steel, Tata Motors, RCom, Hindalco and Acc. On the other hand, top losers in the Sensex were, HDFC, Infosys, Reliance Industries and BHEL.
Among the BSE Sectoral indices BSE Metal index was the top gainer, the index surged 5%. Among the other major gainers were BSE Pharma index (up 3.1%), BSE Bankex index (up 2.6%) and BSE Auto index (up 2.2%).
Market breath was positive, 1,522 stocks advanced against 1,027 declines, while, 105 stocks remained unchanged.
After starting off with smart gains, the stock was unable to hold on to its gains and plunged sharply. The stock plummeted by over 86% to end at Rs19.9 from its high of Rs106 and recorded volumes of over 10.1mn shares on NSE.
Brandhouse Retails Ltd. (BHRL), a leading fashion retailer has received the permission for listing of its shares from BSE and NSE and the shares commence trading from 27th March. The Company’s shares listed are 5,19,94,195 equity shares of the face value Rs10 each.
Shares of ONGC slipped by 0.5% to Rs808 after reports stated that the January strike would impact the company’s output in the fourth quarter. The scrip touched an intra-day high of Rs819 and a low of Rs795 and recorded volumes of over 0.42mn shares on BSE.
Shares of SAIL surged by over 7% to Rs102 after reports stated that the company would not go slow on its plans to invest Rs500bn in increasing capacity by 10mn tones. The scrip touched an intra-day high of Rs103 and a low of Rs95.4 and recorded volumes of over 5.3mn shares on BSE.
Shares of HCL Tech advanced by 3% to Rs104 after the company announced that it got three-year contract from third-party logistics solutions player, MJ Logistics, for implementing integrated software solutions. The scrip touched an intra-day high of Rs105.8 and a low of Rs102 and recorded volumes of over 0.2mn shares on BSE.
The coming week is a holiday-shortened week. The start will hinge on how global markets behave. Thereafter, the market will take a closer look at the numbers of auto sales and cement dispatches. A negative inflation and expectations of a positive IIP augur well for sentiment though most people doubt the reliability of these base effect figures.
Corporation Bank
Investors with a two-three year horizon can buy the Corporation Bank stock as it trades at a low valuation, though the bank has clocked a higher rate of earnings growth than most of its PSU peers, over the past five years. At the current market price of Rs 174, the stock trades at a trailing one-year PEM of 3 and at just half its December 2008 book value.
At this valuation (P/BV), the stock trades at a discount to most of its peers. The dividend yield for the stock is 6 per cent. The large valuation discount already factors in the possibility of moderation in profits in future (likely due to rising credit costs and falling advances growth). The bank’s earnings may, however, outperform peers beyond CY09.
The South-based Corporation Bank, with 67 per cent of its branches in South India and Maharasthra, was the first PSU bank to completely implement core banking solutions (CBS) at all its branches. Superior asset quality, high proportion of non-operating income (54 per cent of net revenues), high loan-loss provision coverage (73 per cent), higher operating efficiencies (cost-income ratio of 40 per cent) are key positives on the business.
Corporation Bank’s advances book grew at 26 per cent compounded annually in the last four years. In the same period, the net profit grew by 22 per cent annually. Corporation Bank’s advances continued to grow, recording 30 per cent growth for the period ended December, 2008.
The bank’s loan book is well-diversified and comprises of corporate loans (30.6 per cent), retail loans (20 per cent), SMEs (10.4 per cent) and agricultural loans (9.2 per cent) as of December. High growth in the past year was contributed by corporate advances (46 per cent year-on-year) and agricultural advances (39 per cent year-on-year).
Financials
For the nine months ended December 2008, the bank’s net profit grew by 19.44 per cent primarily boosted by a 33 per cent growth in non-interest income. The net interest income growth of 18 per cent is on the low side due to contraction in net interest margin (NIM) from 2.81 to 2.53 per cent over a year; pressured by higher cost of deposits. Corporation Bank’s CASA ratio has tended to be much lower than other PSU peers at 25.2 per cent and actually fell from 30 per cent last year.
Corporation Bank has leveraged on its first-mover advantage in being CBS-enabled, by generating fee-based income; non-interest income contributed 32 per cent of total income (16 per cent of total income comes from core non-interest income). Core non-interest income grew by 34 per cent year-on-year boosting the total income. Cost-income ratio of the bank stands at 40 per cent though higher provisions were provided for AS-15 and employee wage revision.
Though the bank has one of the lowest net non-performing assets (NNPA) proportions in the banking space, it is exposed to higher slippages due to its exposure to slowdown-sensitive sectors such as commercial real estate, exports, SMEs and textile sector. The retail side of the loan book may also see higher slippages. In terms of asset quality, the bank’s provisions for bad loans remained flat for the first nine months of this year. Provision coverage fell from 80 per cent last year to 73 per cent, but remains healthy enough to shield the bank from any slippages in the coming quarters.
Gross NPAs of the bank stood at 1.24 per cent of the total advances and the net NPA remained flat at 0.33 per cent of the total advances. The bank may not need re-capitalisation from the government in the near future as it has a capital adequacy ratio of a comfortable 12.76 per cent. The Government of India holds 57 per cent in the bank. Though the bank is raising Tier-2 capital to maintain its capital adequacy, with Tier-1 capital of 9.68 per cent, there is no urgency for the bank to raise money from equity markets.
Outlook
The credit-deposit ratio of the bank stands at 72 per cent and is expected to come down due to moderation in the credit offtake. Given the low CASA ratio, margin pressures for the bank may continue for a few quarters. Deposit rates may not fall as sharply as lending rates over the next few quarters. On the asset quality front, the current slippages from rate sectors may show up in the coming quarters, but restructuring measures and interest rate cuts may alleviate these concerns over the medium term.
The bank’s presence in rural areas and branchless banking provide opportunities to access untapped potential customers. The bank’s tie-up with automobile manufacturers for vehicle financing may aid growth in the loan book in the secured mode.
JSW Steel
JSW Steel shareholders can hold on to the stock, as the coming quarters may bring improved financial performance, on the back of volumes from newly-commissioned capacities and lower input prices. At Rs 231, a trailing price-earnings multiple of five times, the stock’s valuation is at a discount to steel sector peers.
However, the company’s relatively high overseas exposure, the vulnerability of its US operations to recessionary trends and the debt on its consolidated balance-sheet leading to losses in the recent quarter, appear to justify a valuation discount to peers such as SAIL.
The company’s moves to increase its domestic exposure, aggressive retail expansion plans and steps to reduce interest costs may help improve performance, with a lag of a few quarters. The debt-to-equity ratio stands at a high 1.75 (as against 0.18 of SAIL).
Business overview
With steel plants in Karnataka and Tamil Nadu, JSW Steel produces around 6.8 million tonnes of steel per annum. The company produces hot and cold rolled steel products with galvanised sheets, plates and pipes. The company’s market is concentrated in India with 85 per cent of revenues coming from West and South India.
Even as JSW Steel shifts focus to the domestic market, steel demand has been showing signs of improvement in recent months. CMIE sees steel production growing by 6.5 per cent in 2009-10 as falling interest rates stoke growth in the construction sector, thus increasing demand for long steel products.
An improvement in the passenger vehicle numbers also augur well for steel demand. JSW Steel is looking to capitalise on these trends by turning to value-added products, aggressively expanding its retail presence. The company plans to open another 50 outlets across the country and have a pan-India presence.
The improvement in sales for JSW Steel in the ongoing March quarter (relative to December) may be quite sharp, given the plant shutdowns in the preceding quarter and the commissioning of expanded capacity at Vijayanagar. The company expects its March quarter 2009 sales to expand to 1.2 million tonnes from 0.7 million tonnes recorded in December quarter of 2008. The re-opening of two blast furnaces that were temporarily shut in November and December and the commencement of production at the Vijayanagar works in February may aid volumes.
The new Vijayanagar facility has expanded the production capacity of the steel maker to 6.8 million tpa from 3.8 mtpa earlier. JSW Steel is further looking to expand the capacity to 10 mtpa by 2011.
Subsidiary drags profits
In 2007, the company acquired three plate and pipe mills in the US for a consideration of $940 million. These companies had a capacity of producing 1.2 million tonne of plates, 0.55 million tonne of pipes and 0.35 million of double jointing and coating lines and are under JSW Steel (US). The strategy behind the acquisition was to ship the excess one million tonne of slab produced in the Indian facilities to the acquired US operations for value-addition and subsequent marketing in that region. It was also hoped that the acquisition would be a stepping stone to catering to the oil and gas sector in North America, a key driver of plate and pipe demand.
But recessionary trends in the US markets and the collapse in oil prices have hit the subsidiary’s operations. In the December quarter alone, the company saw sales volume of plates decline by 53.6 per cent and that of pipes by 20.5 per cent sequentially in the December 2008 quarter; the subsidiary reported a net loss of $2.8 million for the quarter.
As demand may take time to recover in North America, the US subsidiary may continue to weigh on numbers for some more time.
JSW Steel has substantial debt outstanding in its book, with long-term loans at Rs 14,153 crore as at end-December 2008. This takes the debt-to-equity ratio of the company to a high 1.75. With the company eyeing another expansion of capacity to 10 mtpa by March 2011, there remains a risk of further addition to these borrowings.
JSW Steel’s consolidated performance in the December quarter of 2008 was hit by interest costs (Rs 330.19 crore) which more than doubled and from forex losses of over Rs 181 crore on FCCBs with the rupee depreciating sharply against foreign currencies.
Last week the company made an announcement stating that it had repurchased its FCCBs to the extent of US $ 47.80 million. However this is only a small amount when compared to the total outstanding dues in the balance sheet.
Relief on input costs
Though factors such as leverage and challenges for overseas operations remain, the company may see substantial relief in input costs.
The company has recently succeeded in negotiating the prices on long-term coking coal contracts downward to $175 per tonne from $300 per tonne, which may provide substantial margin relief in the coming quarters. (Coking coal prices had shot up to $300 in 2008 from $98 in 2007). The company has also locked into lower prices by taking delivery of 2,00,000 tonnes of coal at the negotiated price.
Overall, while JSW Steel’s efforts to increase its domestic presence may pay off only over time, the March and June quarter numbers may see improvement with the prospect of higher sales and lower input costs.
Praj Industries
We recommend a buy on the Praj Industries stock. Praj Industries is in a structural bear market since the lifetime high of Rs 273 recorded in late-2007. This long-term downtrend has, however, lost momentum since October 2008 and the stock is attempting to consolidate sideways since then. The lower end of this consolidation range is around Rs 50 that corresponds with the trough formed in February 2006. A falling wedge pattern, which is a bullish reversal pattern, is also apparent in the daily charts.
Investors with a three-month horizon can buy this stock with a stop-loss at Rs 49. The medium-term outlook is encouraging and an up move to Rs 70 levels is possible in this period. Long-term investors can also consider investing in this stock, while retaining the stop-loss at Rs 44. Following a likely sideways consolidation in the range between Rs 55 and Rs 70, the stock has potential to reach Rs 110 over a longer time horizon.
HDIL
We recommend buying the Housing Development and Infrastructure stock at current levels. The stock spiralled downward from its life-time high of Rs 1,112 recorded in January 2008 to Rs 69 in December 2008. Though the stock encountered selling pressure close to Rs 200, the decline is tapering in the zone between Rs 60 and Rs 70, leading to the expectation that a long-term trough is possible in this zone. Positive divergence in the monthly relative strength index supports this view. The range for the stock over the next 12 months is likely to be between Rs 70 and Rs 200. Investors can buy the stock as it moves closer to the lower boundary and book profits near the upper boundary.
The short-term view for this stock has turned positive since it has moved above its 50-day moving average as well as the previous trough at Rs 75. Investors with a greater penchant for risk can buy at current levels with a stop loss at Rs 74 and with the target of Rs 108.
Punj LLoyd
We recommend a buy in Punj Lloyd stock from a short-term trading perspective. It is apparent from the charts of Punj Lloyd that it was on an intermediate-term downtrend from a significant resistance level of Rs 310 encountered in late September 2008 to March low of Rs 66.
The March low is also a 52-week low for the stock. However, the stock reversed its trend triggered by the positive divergence displayed in the daily relative strength index (RSI) and the daily moving average convergence and divergence. The stock breached its intermediate-term down trend-line in the recent time and has been on a short-term uptrend since its 52-week low.
While trending up, the stock crossed over the 21 and 50-day moving averages. On March 27, the stock gained 10 per cent, accompanied with heavy volume. The daily RSI has entered in the bullish zone and the weekly RSI is rising in the bearish zone towards the neutral region. From a short-term perspective we are bullish on the stock.
We expect it to rally further until it hits our price target of Rs 100 in the upcoming sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 85
Bullion metals shed some glaze
Strong dollar takes some shine off precious metals
Bullion metal prices ended lower on Friday, 27 March, 2009. The strong dollar was the main reason for precious metals ending lower on that day.
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.
On Friday, Comex Gold for April delivery fell $16.7 (1.8%) to close at $923.2 an ounce on the New York Mercantile Exchange. For the week, gold ended lower by 3.5%. For the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 12%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (7.9%) since then.
On Friday, Comex silver futures for May delivery fell 35.7 cents (2.6%) to end at $13.263 an ounce. In February, 2009, silver had rose 4.3% after climbing 14% in January. Year to date, silver has climbed 21.7% this year. For 2008, silver had lost 24%.
In the currency market on Friday, the dollar moved higher against most major rivals as a budget warning from Germany's finance minister pressured the euro.
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%.
Crude oil drops
Oil prices end marginally higher for the week
Demand concerns and strong dollar took crude prices lower on Friday, 27 March, 2009. With Friday's drop, crude just ended marginally higher for the week.
On Friday, crude-oil futures for light sweet crude for May delivery closed at $52.38/barrel (lower by $1.96 or 3.6%) on the New York Mercantile Exchange. For the week, crude ended higher by 0.6%. For the month of February, crude prices had ended higher by 1.5%.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 62% since then. Year to date, in 2009, crude prices are higher by 17.6%. On a yearly basis, crude prices are lower by 48%.
In the currency market on Friday, the dollar moved higher against most major rivals as a budget warning from Germany's finance minister pressured the euro.
The EIA had reported earlier during the week that crude inventories rose 3.3 million barrels last week (for the week ended 20 March, 2009), more than the 1.4 million barrels expected. At 356.6 million barrels, stocks are at the highest level since July 1993. U.S. refineries operated at 82% of their operable capacity last week, down slightly from a week ago. This also pressured crude prices on Friday.
Also at the Nymex on Friday, April reformulated gasoline fell 2.8% to $1.4879 a gallon and April heating oil rose 1.1% to $1.4813 a gallon.
Natural gas for April delivery gave up 0.2% to $3.947 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
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