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Monday, May 11, 2009

Bennett, Coleman's ki waat lag gayi

“Private treaties” was one of the most innovative revenue schemes thought up by Bennett, Coleman & Co, which publishes the Times of India and other titles. In return for advertising in group publications, Bennett would get equity in the company doing the advertising. The pay-off would come when the equity was offloaded for a profit (with long-term capital gains being free of tax).

This unusual barter idea was born four years ago, and grew rapidly as a business, with a sales team of 140 people doing ads-for-equity deals all over the country. By one account, the revenue booked totalled as much as 20 per cent of the company’s ad sales revenue in the last financial year.

But the stock market slump has now made the scheme come unstuck. Bennett has lost 50 per cent of its equity investments in listed companies (see table on Page 16; no information is available on unlisted companies). From Rs 624 crore, the value of its investments is down to around Rs 308 crore. Times Treaties’ stock in Pantaloon Retail, Videocon, Gitanjali Gems and Sahara One Media have taken a major hit. Overall, the total value of investment in the treaties business is said to have declined from Rs 2,700 crore to Rs 1,350 crore.

That figure is contested by S Sivakumar, Private Treaties CEO and acting CFO of Bennett, Coleman. He said although the value of investments in private treaties has declined, the Rs 2,700 crore figure is an exaggeration. “The total investment value in the business is closer to Rs 2,000 crore, he said. Besides, listed companies are only a small percentage of the 240 treaty clients, he added. Unlisted companies in the Times Treaties portfolio have also lost 40 per cent of their investment value, according to him.

Still, the Treaties division has been trimmed, from 140 to 100 people.

THE company has also tweaked its business model to meet the changing market conditions.

Not all Times Treaties are equity-based. Real estate companies offer property in exchange for advertising space. In other product categories, the contracts are sales-linked, under which between 55 and 70 per cent of the payment for advertisements is in cash. The remaining compensation is linked to sales.

A former Bennett executive closely associated with the Treaties division said trouble began when the company started signing up clients indiscriminately. “Instead of investment experts, the company’s junior executives started signing 40 to 50 equity deals a year. And these were at very high valuations,” he said.

That’s not all. The original concept was to buy equity in companies within striking distance of an IPO. Later, almost 75 per cent of the deals were inked with small, privately-held companies that offered no easy exit route for a minority shareholder. “Though a good concept, the trouble with private treaties was that it was envisaged during a bull run,” observes a former senior Bennett employee. “When you are handling equity, you should be prepared for a downturn, too,” he said.

Sivakumar denied that the private treaties model has collapsed. He said it continues to be the most innovative revenue stream because it monetises perishable inventory (like an empty aircraft seat) — and the fact that it would bring in cash for otherwise unused ad space was one of the virtues of the scheme. “The principle is that cash clients are never cannibalised,” he says.

Though the value of investment is believed to have diminished, the Private Treaties division continues to be profitable, Sivakumar says. He argued that the company should have spent Rs 2,000 crore, but had served ads only worth Rs 600 crore in the past three years.

Asked if the company isn’t committed to serving ads for the balance Rs 1,400 crore as well, he says that is not necessarily the case. Bennett may not serve the ads in cases in which the ad-for-equity barter is linked to the benchmarks being achieved by the companies concerned. “The companies were meant to meet their growth projections before their ads could be released,” said Sivakumar.

Acquisition cost
per share (Rs)
Total cost
(Rs crore)
Current value*
per share (Rs)
Total value
(Rs crore)


Action Construct 20.00 4.00 16.80 3.36 -0.64
Allied Digital 101.27 6.00 259.10 15.35 9.35
Archies 159.60 3.99 56.85 1.42 -2.57
Bajaj Hind Sugar 50.00 25.00 19.50 9.75 -15.25
Bartronics India 50.00 2.79 94.70 5.28 2.49
Bhagyanagar India 40.00 2.00 19.00 0.95 -1.05
Birla Power Sol. 4.30 5.50 2.47 3.16 -2.34
Celebrity Fash 110.04 14.49 12.56 1.65 -12.84
Flawless Diamond 85.03 5.00 25.60 1.51 -3.49
Gitanjali Gems 300.00 48.00 73.70 11.79 -36.21
H D I L 500.00 15.00 172.30 5.17 -9.83
Hanung Toys 150.00 7.50 43.60 2.18 -5.32
India Infoline 170.00 15.75 83.00 7.69 -8.06
IOL Netcom 279.00 13.95 38.25 1.91 -12.04
Karuturi Global 16.50 4.95 10.50 3.15 -1.80
KSL and Indus 253.00 20.00 58.35 4.61 -15.39
L T Foods 70.00 5.00 31.65 2.26 -2.74
Lok Housing 196.80 15.00 24.50 1.87 -13.13
Lotus Eye Care 50.20 1.28 36.79 0.94 -0.34
Marg 245.00 4.90 55.65 1.11 -3.79
Micro Techno. 250.40 6.26 97.40 2.44 -3.83
Pantaloon Retail 263.18 156.16 223.80 132.80 -23.37
Provogue (India) 28.00 4.20 33.25 4.99 0.79
Pyramid Saimira 80.00 4.00 15.45 0.77 -3.23
Rajesh Exports 25.67 15.00 28.95 16.92 1.92
Refex Refrigeran 60.00 2.40 24.65 0.99 -1.41
Sahara One Media 344.00 37.84 120.05 13.21 -24.63
Sobha Developers 617.00 6.00 111.80 1.09 -4.91
Spice Mobiles 15.23 5.00 10.83 3.56 -1.44
SQL Star Intl. 40.00 7.00 9.92 1.74 -5.26
Sujana Univ. Ind 35.20 10.56 8.05 2.42 -8.15
Sumeet Inds. 13.33 2.00 6.99 1.05 -0.95
Todays Writing 82.90 7.00 23.95 2.02 -4.98
Videocon Inds. 430.02 100.00 115.05 26.75 -73.25
Vishal Retail 146.00 30.00 40.85 8.39 -21.61
Zicom Electronic 200.00 10.00 84.55 4.23 -5.77
Brigade Enterpr 391.60 0.99 52.75 0.13 -0.86
TOTAL - 624.51 - 308.60 -315.92
* Value as on May 5, 2009

via Business Standard

Stock Recommendations - May 11 2009

Stock Recommendations - May 11 2009

RIL May 2009 futures at premium

Turnover declines

Nifty May 2009 futures were at 3,550, at a discount of 4.60 points as compared to the spot closing of 3,554.60. Turnover in NSE's futures & options (F&O) segment was Rs 45,810.47 crore, much lower than Rs 56,236.37 crore on Friday, 8 May 2009.

Reliance Industries (RIL) May 2009 futures were at small premium at 1862.70 compared to the spot closing of 1861.60.

State Bank of India May 2009 futures were near spot price at 1257.70 compared to the spot closing of 1258.20.

JSW Steel May 2009 futures were at discount at 420 compared to the spot closing of 424.45.

In the cash market, the S&P CNX Nifty lost 66.10 points or 1.83% at 3,554.60.

SBI, HUL, Andhra Bank, Media, ONGC

SBI, HUL, Andhra Bank, Media, ONGC



India Strategy - May 11 2009

India Strategy - May 11 2009

ABG Shipyard

ABG Shipyard

Allahabad Bank

Allahabad Bank

ValueGuide - May 2009

ValueGuide - May 2009

Sensex closes down 1.63%; Nifty 1.83%

The Sensex closed on a weak note led by realty stocks followed by consumer durables and capital goods. It opened firm with a gain of 120.94 points, at 11,997.37 on Monday, touching a high of 12,026.60. However, it pared all its gains and fell into the negative on profit booking. As the day progressed, the index continued its downward trend on aggressive selling pressure seen across board, touching a low of 11,621.30 to finally end on a weak note.

Secondline stocks also supported the downfall. BSE Midcap and Smallcap index dropped 1.56% and 2.15% respectively.

Amongst the sectoral indices, BSE Realty was badly hit. The counter plunged 5.19%, Consumer durables, Capital goods dropped over 2% each. Power, Metal, Bankex and IT declined over 1% each.

On global front, Asian stocks end mixed, after Goldman Sachs Group recommended buying HSBC Holdings and Hong Kong and China widened a trading agreement. Nikkei gained 19.15 points, or 0.20%, to end at 9,451.98, Hang Seng index fell 301.92 points, or 1.74%, to close at 17,087.95 and Shanghai Composite declined 45.90 points, or 1.75%, to settle at 2,579.75.

Meanwhile, European stocks fell, led by basic resources companies as metal prices retreated in London and Lonmin announced a share sale. FTSE 100 rose 30.22 points, or 0.69%, to trade at 4,428.90, CAC 40 fell 42.72 points, or 1.29%, to trade at 3,269.87 and DAX declined 43.19 points, or 0.88%, to trade at 4,870.71. (4.10 p.m., IST)

The Sensex ended the day with a loss of 193.44 points, or 1.63% at 11,682.99 after touching a high of 12,026.60 and a low of 11,621.30. The broad-based NSE Nifty fell 66.10 points, or 1.83% at 3,554.60 after hitting a high of 3,660.20 and a low of 3,534.55.

Major gainers in the 30-share index were Mahindra & Mahindra (1.57%), ICICI Bank (0.55%), Sun Pharmaceutical Industries (0.46%), Maruti Suzuki India (0.33%), Tata Power Company (0.24%), and HDFC Bank (0.11%).

On the other hand, DLF (5.10%), Reliance Capital (5.05%), State Bank Of India(4.86%), Reliance Communications (4.64%), Jaiprakash Associates (4.61%), and Tata Motors (4.28%) were the major losers in the Sensex.

Overall market breadth was extremely negative. Out of the total 2,582 stocks traded at BSE, 920 advanced, 1,573 declined while 89 remained unchanged.

BSE Bulk Deals to Watch - May 11 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
11/5/2009 533068 ARROW TEX OPG SECURITIES P LTD B 70704 15.07
11/5/2009 533068 ARROW TEX ASHOKA FINSTOCK LTD B 331909 13.36
11/5/2009 533068 ARROW TEX OPG SECURITIES P LTD S 70704 14.10
11/5/2009 533068 ARROW TEX ASHOKA FINSTOCK LTD S 317494 14.40
11/5/2009 533068 ARROW TEX PACIFIC CORPORATE SERVICES LTD S 332799 13.92
11/5/2009 500055 BHUSH STEEL OPG SECURITIES P LTD B 214659 678.10
11/5/2009 500055 BHUSH STEEL OPG SECURITIES P LTD S 214659 679.05
11/5/2009 633059 BRAND HOUSE HSBC BANK (MAURITIUS) LIMITED B 1003344 15.25
11/5/2009 508860 DIAMANT INV MANAKCHAND JAIN HUF S 17450 92.80
11/5/2009 532839 DISH TV KUNDAN LEASING & FINANCE PVT. LTD B 2650000 35.85
11/5/2009 530407 EPIC ENERGY RAJESHMAMANIA B 67580 28.07
11/5/2009 530407 EPIC ENERGY ASHOKPAMANI S 50000 27.55
11/5/2009 523277 G V FILMS LT BNP PARIBAS ARBITRAGE S 1870681 1.09
11/5/2009 516078 JUMBO BAG LT NIKHILSSHAH B 103250 25.55
11/5/2009 526588 PHOTOQUIP IN TARASONI B 120000 15.31
11/5/2009 526588 PHOTOQUIP IN JAYANTSONI B 119000 15.31
11/5/2009 526588 PHOTOQUIP IN ASHOK R KAVDIA S 205345 15.31
11/5/2009 512048 SPLASH MEDIA REKHA BHANDARI S 20500 46.90
11/5/2009 531433 SUNGOLD CAPI SMRITI GHIYA B 100000 20.45
11/5/2009 532691 TULIP TELE OPG SECURITIES P LTD B 168172 626.72
11/5/2009 532691 TULIP TELE OPG SECURITIES P LTD S 168172 627.10
11/5/2009 524212 WANBURY LTD PASHA FINANCE PVT LTD B 75000 44.88
11/5/2009 524212 WANBURY LTD NIRAJ REALTORS & SHARES PVT. LTD. S 75000 44.88

NSE Bulk Deals to Watch - May 11 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
11-May-09,ARROWTEX,Arrow Textiles Limited,ASHOKA FINSTOCK LTD,BUY,196714,13.03,-
11-May-09,ARROWTEX,Arrow Textiles Limited,BP FINTRADE PRIVATE LIMITED,BUY,74822,14.14,-
11-May-09,BAJAJHIND,Bajaj Hindusthan Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,754744,109.44,-
11-May-09,BHUSANSTL,Bhushan Steel Limited,C D INTEGRATED SERVICES LTD.,BUY,311244,675.92,-
11-May-09,BIRLAPOWER,Birla Power Solutions Ltd,HI-GROWTH CORPORATE SERVICES PVT. LTD.,BUY,3311902,3.25,-
11-May-09,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,BUY,10393187,3.21,-
11-May-09,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,88291,2411.45,-
11-May-09,GMRINDS,GMR Industries Limited,GMR HOLDINGS PVT LTD,BUY,109936,85,-
11-May-09,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1807969,169.44,-
11-May-09,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,7016664,15.58,-
11-May-09,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,95064,758.15,-
11-May-09,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,BUY,116670,761.72,-
11-May-09,SALORAINTL,Salora International Ltd.,AYUSH JIWARAJKA,BUY,114267,33.98,-
11-May-09,SALORAINTL,Salora International Ltd.,TARUN JIWARAJKA,BUY,108018,33.9,-
11-May-09,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,2642801,15.99,-
11-May-09,ARROWTEX,Arrow Textiles Limited,ASHOKA FINSTOCK LTD,SELL,195831,13.26,-
11-May-09,ARROWTEX,Arrow Textiles Limited,BP FINTRADE PRIVATE LIMITED,SELL,74822,14.23,-
11-May-09,ARROWTEX,Arrow Textiles Limited,CLOVER HOLDINGS & TRADING PVT. LTD.,SELL,165249,12.56,-
11-May-09,ARROWTEX,Arrow Textiles Limited,PACIFIC CORPORATE SERVICES LTD,SELL,344484,13.34,-
11-May-09,BAJAJHIND,Bajaj Hindusthan Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,754744,109.49,-
11-May-09,BHUSANSTL,Bhushan Steel Limited,C D INTEGRATED SERVICES LTD.,SELL,311244,676.49,-
11-May-09,BIRLAPOWER,Birla Power Solutions Ltd,HI-GROWTH CORPORATE SERVICES PVT. LTD.,SELL,3311902,3.24,-
11-May-09,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,SELL,10729172,3.28,-
11-May-09,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,88291,2412.45,-
11-May-09,GMRINDS,GMR Industries Limited,SATABDI INVESTMENT PVT LTD,SELL,100000,85.1,-
11-May-09,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1807969,169.48,-
11-May-09,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,7071164,15.6,-
11-May-09,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,95064,758.6,-
11-May-09,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,SELL,114270,758.74,-
11-May-09,SALORAINTL,Salora International Ltd.,ARPIT CHAURASIA,SELL,222285,33.94,-
11-May-09,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2597476,16,-
11-May-09,BIRLAPOWER,Birla Power Solutions Ltd,RAMCHAND KEWALRAM POPLEY,SELL,2182831,3.36,-

Post Session Commentary - May 11 2009

Indian market closed on a featureless note mainly due to huge selling pressure in the benchmark indices. Unfavorable cues from the global markets contributed largely to the southward journey. Additionally, political uncertainty also weighed on sentiments with on going polling for India''s 15th Lok Sabha. However, market witnessed gain in early trade with Sensex surged past the psychological 12,000 mark before reporting a steep fall.

The market today opened on firm note backed by positive cues from the markets all over the world. The US stock markets on Friday closed higher with the financials rallied after the government released the results of its stress test and on optimism that the economy is recovering. However, domestic stocks were not able to hold the same momentum and slipped ahead of Election results this weekend. Further, market continued to extend its losses due to some profit booking pressure. Finally, markets slipped sharply below the previous close as negative opening of European markets also weighed on the sentiments. BSE Sensex ended below 11,700 level and NSE Nifty closed below 3,600 level. From the sectoral front, all indices ended in red. Among those, Reality, Consumer Durables, Capital Goods, Metal, Teck, Power and Oil & Gas stocks contributed to most the selling pressure. Mid Cap and Small Cap stocks also remained out of favor during the trading session.

Among the Sensex pack 24 stocks ended in red territory and 6 in green. The market breadth indicating the overall health of the market remained weak as 1573 stocks closed in red while 920 stocks closed in green and 89 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 193.44 points at 11,682.99 and NSE Nifty ended down by 66.10 points at 3,554.60. BSE Mid Caps and Small Caps closed with losses of 59 and 91.94 points at 3,711.42 and 4,185.32 respectively. The BSE Sensex touched intraday high of 12,026.60 and intraday low of 11,621.30.

Losers from the BSE Sensex pack are DLF Ltd (5.10%), SBI (4.86%), RCom (4.64%), JP Associates (4.61%), Tata Motors (4.28%), Tata Steel (3.84%), Ranbaxy Lab (2.98%), HUL (2.94%), L&T Ltd (2.82%), Bharti Airtel (2.57%), Grasim Industries (2.57%), BHEL (2.53%) and TCS Ltd (2.33%).

Gainers from the BSE Sensex pack are M&M Ltd (1.57%), ICICI Bank (0.55%), Sun Pharma (0.46%), Maruti Suzuki (0.33%) and Tata Power (0.24%).

On the global markets front the Asian markets which opened before the Indian market, ended mixed. Shanghai Composite, Hang Seng and Straits Times index ended lower by 45.90, 301.92 and 72.11 points at 2,579.75, 17,087.95 and 2,166.10 respectively. However, Nikkei 225 and Seoul Composite gained 19.15 and 3.03 points at 9,451.98 and 1,415.16 respectively.

European markets which opened after the Indian market are trading mixed. In Frankfurt the DAX index is trading down by 52.03 points at 4,861.87 while in London FTSE 100 is trading up by 20.80 points at 4,419.48.

The BSE Reality index under performed the benchmark indices as ended down by (5.19%) or 122.34 points at 2,233.27 on profit booking. Main losers are Unitech Ltd (8.90%), Orbit Co (8.45%), Ansal Infra (5.64%), Parsvnath (5.22%) and DLF Ltd (5.10%).

The BSE Consumer Durable index ended lower by (2.59%) or 50.48 points to close at 1,898.01. Videocon Ind (6.30%), Rajesh Export (6.21%), Blue Star L (4.61%), and Gitanjali GE (2.25%) ended in negative territory.

The BSE Capital Goods index declined (2.48%) or 211.16 points to close at 8,296.13. Main losers are Everest Kanto (5.12%), Elecon Eng C (4.69%), Praj Industries (4.36%), Gammon Indi (4.31%) and Walchand In (4.30%).

The BSE Power stocks dropped by (1.88%) or 40.86 points to close at 2,135.48. Major losers are Torrent Power (5.70%), Neyveli LIG (4.86%), GMR Infra (4.65%), RPower (3.90%) and Siemens Ltd (2.97%).

The BSE Teck index lost (1.77%) or 39.30 points to close at 2,187.31. Losers are Deccan Chro (6.26%), Aptech Ltd (5.84%), UTV Software (4.98%), ITC Ltd (4.96%) and HCL Tech (4.95%).

The BSE Metal index decreased by (1.72%) or 136.70 points at 7,813.17 as metal prices moved back on the London Metal Exchange. Scrips that lost are Ispat Industries (6.44%), Welspan Gujarat (4.73%), Steel Authority (4.12%), Hindustan Zinc (4.10%) and Tata Steel (3.84%).

Aurobindo Pharma Limited ended up by 5.90%. The company announced that its wholly owned subsidiary Aurobindo Pharma Australia Pty Ltd has received yet another approval from the Therapeutic Goods Administration (TGA), Government of Australia for the registration of Simvastatin Tablets 5, 10, 20, 40 and 80 mg.

Four Soft gained 0.46%. Prime Cargo Netherlands BV, a Netherlands based freight forwarding company has selected Four Soft''s integrated freight forwarding solution - 4S eTrans SME, to rationalize and automate its freight forwarding processes.

JSW Steel Limited advanced by 3.37%. The company reported a growth of 60% in Crude Steel production for April 2009 compared to that of corresponding month in the last fiscal year. The healthy growth in production is mainly attributable to the production from 2.8 MTPA expansion project at Vijayanagar works.

NIIT ended down by 4.96%. The company has entered into a contract with the Department of Education, Government of Gujarat to introduce Computer Aided Learning in 1870 high and higher secondary government schools for classes 9-12 in Gujarat.

Orchid Chemicals & Pharmaceuticals Ltd (Orchid) tumbled 7.19%. The company has received tentative approval from the US Food, and Drug Administration (US FDA) for its drug Sumatriptan Succinate tablets.

Polaris Software lost 3.13%. The company announced that Saigon Hanoi Bank, one of the leading commercial banks in Vietnam has selected Polaris'' Global Universal Banking platform (Intellect 10.0) to be the technology enabler for its growth journey.

Hindustan Unilever Ltd contracted 2.94% after the company reported a lower-than-expected rise of 3.68% in net profit to Rs 394.99 crore in January-March 2009 quarter over the corresponding quarter in the previous year.

State Bank of India Ltd slipped 4.86% despite net profit surged 45.62% in Q4 March 2009 over Q4 March 2008. The bank posted a net profit of Rs 2,742.31 cr for the quarter ended March 31, 2009, as against Rs. 1,883.25 cr in the earlier corresponding period.

Sensex sheds 3.5% in two days on poll worries

The key benchmark indices extended losses for the second straight day as profit taking emerged on weak global stocks and on political uncertainty. Banking, metal, IT and capital goods stocks led the fall. Index heavyweight Reliance Industries also edged lower. The Sensex surged past the psychological 12,000 mark at the onset of the trading session but soon fell below that level. The barometer index fell 193.44 points or 1.63%, off close to 345 points from the day's high.

The market was volatile. After an early surge triggered by firm Asian markets, Indian stocks soon pared gains. The market recovered some ground after falling into the red in mid-morning trade. The market weakened later to hit fresh intrday day low in early afternoon trade. The market extended losses later.

Political uncertainty weighed on the bourses given the possibility of a fractured mandate - the month-long parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009. Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable. The counting of votes will take place on 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.

European shares dropped on Monday, 11 May 2009, led by decline in shares banks, mineral extractors and oil producers, as investors took a breather after pushing shares sharply higher over the past few weeks. Key benchmark indices in France and Germany were down by between 0.61% to 1.49%. But UK's FTSE 100 rose 0.88%.

Asian stocks were mixed. Key benchmark indices in Hong Kong, China and Singapore fell by between 1.74% to 3.22%. Key benchmark indices in South Korea and Taiwan rose by between 0.21% to 0.97%.

Japan's Nikkei average rose 0.2% in a choppy trade after earlier hitting its highest point in six months led by rally in bank shares. But Toyota Motor Corp skidded after it reported a $7.7 billion quarterly loss and forecast another loss for the current fiscal year.

China's consumer prices fell for a third month on food and commodities, aiding government efforts to boost spending in the world's third-biggest economy. Prices dropped 1.5 % in April 2009 from a year earlier, after falling 1.2% in March 2009, the statistics bureau said today.

Trading in US index futures showed the Dow could fall 79 points at the opening bell on Monday, 11 May 2009. The US markets capped another strong week with a triple-digit rally on Friday 8 May 2009 as Wall Street breathed a sigh of relief after the Stress-Test results and banks soared. The Dow Jones Industrial Average was up 164.80 points, or 2%, to 8,574.65. The S&P 500 Index gained 21.84 points, or 2.4%, to 929.23, and the Nasdaq Composite rose 22.76 points, or 1.3%, to 1,739.

Payrolls in the US shrank in April 2009 by the least in six months as the worst recession in half a century started to ease and the federal government stepped up hiring for the country's next census. Payrolls fell by 539,000, fewer than economists forecast, after a 699,000 loss in March 2009, Labor Department figures showed in Washington. Still, the unemployment rate jumped to 8.9%, the highest level since 1983.

The Federal Reserve stress result announced on Thursday 7 May 2009 determined that 10 US banks need to raise a total of $74.6 billion in capital, a finding that Chairman Ben S. Bernanke said should reassure investors about the soundness of the financial system.

The results showed that losses at the banks under more adverse economic conditions than most economists anticipate could total $599.2 billion over two years. Mortgage losses present the biggest part of the risk, at $185.5 billion. Trading accounts were the second-largest vulnerability, with potential losses of $99.3 billion. The conclusion of the unprecedented probe of the health of the largest 19 lenders opens an exit for some of the firms from a tense partnership between Wall Street and the government. Others will have six months to fill their capital shortfalls and may be forced to accept expanded federal ownership that could prompt changes in their management.

Back home, a recovery in the Indian economy triggered a solid rally on the domestic bourses recently. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3,716.03 points or 45.53% to 11,876.43 on Friday, 8 May 2009.

Foreign institutional investors (FIIs) are in an aggressive buying mode. FIIs bought shares worth a net Rs 1240.60 crore on Friday, 8 May 2009 FII inflow in May 2009 totaled Rs 4,510.20 crore (till 8 May 2009). FII inflow in calendar year 2009 totaled Rs 5,223 crore (till 8 May 2009).

Emerging-market equity funds saw inflows of $4 billion in the week ended 6 May 2009, the largest weekly inflow since early December 2008 and the eighth largest on record, Merrill Lynch said Friday, 8 May 2009. Buying of exchange-traded funds was mostly responsible, but investing in funds that take long-only positions also saw strong inflows, Merrill said. Long-only funds represent one-way bets from investors ready to embrace more risk.

Brazil, in particular, saw very large flows, garnering its second-largest weekly inflows on record, while China, Taiwan, India and Russia also saw big gains. Merrill's data show the pace of inflows into emerging-market funds has been strong and accelerating, totaling $14 billion over the past seven weeks.

The BSE 30-share Sensex lost 193.44 points or 1.63% to 11,682.99. The Sensex rose 150.17 points at the day's high of 12,026.60 in early trade. At the day's low of 11,621.30 Sensex fell 255.13 points in mid-afternoon trade.

The S&P CNX Nifty was down 66.10 points or 1.83% to 3,554.60. Nifty May 2009 futures were at 3,550, at a discount of 4.60 points as compared to the spot closing of 3,554.60. Turnover in NSE's futures & options (F&O) segment was Rs 45,810.47 crore, much lower than Rs 56,236.37 crore on Friday, 8 May 2009.

The barometer index BSE Sensex has lost 433.95 points or 3.58% in the past two trading sessions from its close of 12,116.94 on 7 May 2009. From a recent high of 12,134.75 on 4 May 2009, the Sensex has lost 451.76 points or 3.72%. Yet, the Sensex is up 2,035.68 points or 21.1% in calendar year 2009.

Coming back to today's trade, the market breadth, indicating the overall health of the market, turned weak from a strong breadth earlier the day. On BSE, 938 shares rose as compared with 1,596 that fell. A total of 57 shares remained unchanged.

BSE clocked a turnover of Rs 4,348 crore, lower than Rs 6,596.56 crore on Friday, 8 May 2009.

The BSE Mid-Cap index fell 1.56%. It outperformed the Sensex. The BSE Small-Cap index fell 2.15%. It underperformed the Sensex.

The BSE Realty index (down 5.19%), the BSE Consumer Durables index (down 2.59%), the BSE Capital Goods index (down 2.48%), the BSE Power index (down 1.88%), the BSE TECk index (down 1.77%), the BSE Metal index (down 1.72%), the BSE Oil & Gas index (down 1.65%) underperfomed the Sensex.

The BSE Auto index (down 0.55%), the BSE Bankex (down 0.75%), the BSE IT index (down 1.05%), the BSE Healthcare index (down 1.06%), the BSE FMCG index (down 1.09%), the BSE PSU index (down 1.63%) outperformed the Sensex.

From the 30 share Sensex pack, 24 stocks fell and rest gained.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.98% to Rs 1,859.35, off the day's high of Rs 1,923, on profit taking after a recent sharp surge. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

Ratnagiri Gas & Power, which supplies electricity to the western Indian state of Maharashtra, on Friday, 8 May 2009, agreed to buy natural gas from an offshore field operated by Reliance Industries.

Outsourcing focussed IT stocks fell for the fourth straight day on US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. India's second largest software services exporter by sales Infosys fell 0.45% even as its American depository receipt (ADR) gained 0.55% on Friday, 8 May 2009.

India's largest software services exporter by sales TCS fell 2.33%. India's third largest software services exporter by sales Wipro fell 1.58% even as its ADR rose 1.86% on Friday.

Analysts, however, feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. On 4 May 2009, US president Barack Obama announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.

Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.

Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.

Metal stocks fell after metal prices retreated on the London Metal Exchange. Sterlite Industries, Tata Steel, Hindalco Industries, Steel Authority of India, fell by between 1.28% to 4.12%.

Copper prices fell for a third day on in a row on the London Metal Exchange (LME) on Monday, 11 May 2009, on speculation that Chinese import demand may slow.

Capital goods stocks fell on profit taking after a recent sharp surge. Larsen & Toubro, ABB, BEML, Crompton Greaves, Bharat Heavy Electricals, Praj Industries, Punj Lloyd fell by between 1.37% to 4.36%.

Rate sensitive realty stocks fell on profit taking after a recent sharp surge in prices. Unitech, Indiabulls Real Estate, Phoenix Mills, Akruti City fell by between 1.66% to 8.9%.

DLF fell 5.1% on reports the promoters are close to finalising a deal worth around Rs 3000 crore with some foreign and domestic institutional investors to offload a little over 7% stake.

Bank stocks pared gains after a firm start triggered by strong Q4 March 2009 results by State Bank of India (SBI), India's biggest bank in terms of branch network. SBI was down 4.86% to Rs 1,260.70, off the day's high of Rs 1,389. State Bank of India reported a forecast-beating 45.6% rise in net profit to Rs 2742.31 crore on a 34.6% increase in operating income to Rs 22060.61 crore in Q4 March 2009 over Q4 March 2008. Profit was boosted after gains from trading trebled and loan demand soared as borrowers scrambled for funds in a slowing economy. The bank announced he result on Saturday 9 May 2009.

India's largest private sector bank by net profit ICICI Bank was up 0.55% to Rs 523.45. But the stock came off the day's high of Rs 548. Its American depository receipt (ADR) rose 4.96% on Friday 8 May 2009.

India's second largest private sector bank by operating income HDFC Bank rose 0.11% to Rs 1,144.80. But the stock came off the day's high of Rs 1,200. Its ADR rose 3.43% on Friday, 8 May 2009.

India's biggest dedicated housing finance firm by operating income HDFC fell 1.7%.

India's largest FMCG major by sales Hindustan Unilever fell 2.94% as it reported a lower-than-expected rise of 3.68% in net profit to Rs 394.99 crore on a 6% rise in sales to Rs 3988.33 crore in Q4 March 2009 over Q4 March 2008. Profit fell short of expectations mainly due to provision for retirements and restructuring costs. It announced the result before market hours today. It was the major loser from the Sensex pack.

Other FMCG stocks, United Spirits, Nestle India, Britannia Industries, Tata Tea and ITC, fell by between 0.45% to 2.49%.

Telecom stocks fell on reports the telecom regulator has notified mobile number portability (MNP) from September 2009. Bharti Airtel, Reliance Communications and Idea Cellular fell, by between 2.57% to 4.64%, on fears that mobile users will hop service providers at a faster rate when MNP is introduced. Once MNP comes in force, it could force GSM operators to increase capital expenditure to improve service quality in the top-tier telecom zones in a bid to retain existing users.

Auto stocks fell on profit taking after a recent surge in prices. Bajaj Auto, Hero Honda Motors and Tata Motors fell by between 0.26% to 4.28%. But India's largest tractor maker by sales Mahindra & Mahindra rose 1.57%.

Ashok Leyland fell 5.48% after the company reported a 69.33% decline in commercial vehicles sales to 1,750 units in April 2009 over April 2008

But India's largest car maker by sales Maruti Suzuki India rose 0.33%. The company said on Saturday, 9 May 2009, it will be launching its premium compact car Ritz on 15 May 2009 in Delhi.

Cals Refineries clocked the highest volume of 3.79 crore shares on BSE. Unitech (2.04 crore shares), Dish TV (1.9 crore shares), Kaashyap Technologies (1.28 crore shares), Ispat Industries (1,24 crore shares) were the other volume toppers in that order.

ICICI Bank clocked the highest turnover of Rs 193.71 crore on BSE. State Bank of India (Rs 182.29 crore), Reliance Industries (Rs 173.79 crore), Tata Steel (Rs 165.76 crore) and Reliance Capital (Rs 152.76 crore) were the other turnover toppers in that order.

The Secular Class

by Dr. Jagdish Tummala

As I sit in my home in Detroit, Michigan, watching all the drama that is unfolding in the General Elections of 2009, I wonder how far the truth can be stretched. I am quite disillusioned by the definition of secularism being proscribed and prescribed to the Indian public. I was wondering what a lesson in secularism would be like if there was one; so, I thought of this fantasy classroom where secularism is being taught by a Mr. Secular Indian to his Gullible disciples who are pursuing a political career as a secular politician . Now tighten your seat belts and start thinking. Think what your definition of secularism is?

Mr. Secular Indian: I welcome you disciples to your first day in class. I know you people are obsessed with the idea of secularism, but I will help you build on this idea today which will benefit you tremendously in your political careers; so, let us start by taking some questions.
A Gullible disciple: I am confused about the idea of secularism. I feel I am a secular person, but when I see some of our English channels and listen to our politicians, I feel I am not - How do I get over this dilemma ?
Mr. Secular Indian: What makes you feel as though you are not secular ?
A Gullible disciple: I find myself agreeing to some of the views of BJP, especially on terror, international policies and common civil code etc. But the very next moment, when the panelists on these shows call it a farce and communal, I feel I am communal too.
Mr. Secular Indian: First things first. You cannot be called secular, If you agree with the BJP. You have to be a staunch opponent of BJP policies irrespective of whether you feel they are right or wrong. Be careful, you will be tagged as a communal instantaneously if you agree with them. It would not matter what you think about the upliftment of minorities.
A gullible disciple: Some politicians are even called communal if they go to a temple or wear saffron clothes, what do you think of that?
Mr. secular Indian: Well, you cannot wear any identity that could relate you to a majority community. You can go to the temple every now and then but make sure nobody is watching you. This might come to haunt you later in your political career. At the same time make sure you make frequent visits to churches and mosques and also meet some religious leaders, but this time makes sure you do it in front of the full glare of the media.
Meanwhile a Muslim gullible disciple jumps in and asks:
A gullible Muslim disciple: I go to mosques every Friday. Would I have to be careful too ? Also would I have to meet some swami jis in front of the media?
Mr. secular Indian: No, this does not apply to you as you belong to a minority community. In fact, if someone questions you about any aspect of your faith, just call for protection of your rights and your secular friends will take care of the rest. Talking about you meeting swamis, this could severely dent your chances of being a secular politician and your credentials might get questioned, even if you have to do that, do it behind the cameras.
A gullible Muslim disciple: I find myself agreeing with the BJP sometimes, especially about the introduction of a common civil code. I feel a different civil code for the Muslims is only alienating them and I do not agree with some of it’s clauses. How do I express this view?
Mr. Secular Indian: Again, the golden rule is, you cannot agree with the BJP at any cost. Even if the BJP is trying to do some good for the minorities, you will need to portray the evil in it. These are the times when your secular credentials will be tested. Remember, you being a Muslim and finding any of BJP’s comment acceptable, can spell doom to your political career. Common civil code might be necessary for the upliftment of the Muslims, but it is not acceptable to the Muslim masses. You can only take popular decisions in politics irrespective of the consequences.

A gullible disciple: I believe we would need to work hard for the upliftment of the minority masses to be called a secular.

Mr. secular Indian: Not necessarily, as long as you are anti-BJP and are making speeches condoning Hindutva, you need not do anything, just tell the minorities that you will protect them from the Hindutva forces and hope they might vote for you. At the same time, it can be dangerous if you try to bring a lot of development in the minority dominated areas as this would mean land occupations for roads, building, and schools instead of madrases etc.. It might be popular among few, but the masses would not like it. Always stay away from such controversies in the minority dominated areas. Moreover, educating them might harm you in the long run, as you might not be able to use them as vote banks.
A gullible disciple: What are the advantages of being a secular politician?

Mr. secular Indian: Numerous! Firstly, it negates several ills. You can be a gangster, a rapist or a murderer and you can still be called a good politician with an honest ideology if you are secular. You will be acceptable to all the secular parties and will never be treated as an untouchable in politics. Moreover, if you have any criminal cases or CBI cases pending against you, just lend support to a secular party at the centre and be rest assured that all the CBI cases against you will be withdrawn. Another advantage is you can win elections without doing any public service. Look at all the states which are dominated by these secular parties. They do not have to do any public work or develop anything. These states continue to lag behind in all human development indices. They know that as long as they are secular, their chances of remaining in power are high.

A gullible disciple: How do I tackle riots which are so rampant in our society?

Mr. secular Indian: Wait until the riots have subsided, you need not mobilise any forces to tackle these riots. But make sure you put the entire blame on the hindutva forces for the riots. Also portray the BJP as an accomplice and be very vocal about it in the media. This will exonerate you from being complacent during the riots. Look at the Mumbai riots and Babri demolition for example. A secular government was at the centre on both these occasions. They even agreed to these events tacitly, if not directly involved and let nature take its own course. But they make sure even to this day that they blame the BJP for anything and everything that happened. I am sure they could have done something about it, but they opted not to. Instead, they used it to their advantage and portrayed the BJP as the only evil. This is a great example of how you can maintain your secular credentials by just blaming the BJP, even though you were involved yourself.

A gullible disciple: Can you tackle Jihadi terrorism and maintain your secular credentials?
Mr. secular Indian: You have to be very careful when talking about tackling Jihadi terrorism. This is a condition you should be able to mend to your advantage. You should oppose every law that asks for a strong action against Jihadis. This will win you a lot of secular votes. In fact, if anybody tries to condemn Jihadis, reply to them by talking about Hindutva terrorism and always portray Hindutva terrorism to be a greater threat than the Jihadis. Also, try to magnify every violent incident associated with the Hindutva forces and make them look bigger and more threatening than the Jihadis. You will be surprised to know how many hearts you will win.

A gullible disciple: Muslims are equally affected by Jihadi terrorism. What if they do not agree to our idea of being soft on terror?

Mr. secular Indian: You have to create a fear psychosis among the Muslims and tell them that the fight against Jihadis is actually a fight against Islam. Tell them all the stories about how young Muslims are being tortured in the name of this fight against the Jihadis and that this fight would only create more terrorists.

A gullible disciple: What if the majority community gets angry with us for being soft on terrorism?

Mr. secular Indian: You have to make sure that the majority community is not majority anymore by dividing them into multiple factions in the name of caste or regions or languages and so on. Then select some large but disenchanted groups among them and promise them greater opportunity in every field. Now you will be left with a select few smaller groups which will question you. This is where you have to work like a salesman and try to sell your idea of secularism. If they still question you, threaten them with thoughts that they might be tagged communal if they support the same ideas as those being supported by the BJP. This works wonderfully and helps people soften their stance on terrorism.

A gullible disciple: How can we deal with the symbols of worship and religion and still be secular?

Mr secular Indian: You do not have to worry about the symbols of a majority religion like Ram Sethu etc., but make sure you divide the majority community so much that they start believing that the artificial lines created by you are more important than their religious identity. If they still persist on retaining their identity, then tell them that they could be identified with the communal forces. This helps even hardliners change their stance. Then you can even talk about destroying those symbols to appease the secular forces. At the same time make sure you never do anything to dilute the sentiments of a minority community. Remember, this sentiment is your bread and butter. Your entire survival depends on the minorities retaining their religious identity.

A gullible disciple: How can we tackle the media?

Mr. secular Indian: The media will give you a red carpet welcome. Remember, Indian media is the mouth piece of secular forces. They have been either created by the secular forces or been made to buy our idea of secularism. They cannot exist in this country if they differ from our viewpoint. The fear psychosis we have created helps us to make the media dance to our tunes. When in any TV debates, you can score a lot of points by making anti BJP rhetoric’s. If you find yourself in any trouble, just raise the issue of Gujarat riots and portray Narendra Modi as a devil. You are sure to come out of any troubled situation.

A gullible disciple: If you are tagged as a communal, is there anything we can do to get back to the secular brigade?

Mr. secular Indian: This is very simple. It is like conversion from one religion to the other. The easier we make it, the more it boosts our strength. Even if you are in the communal alliance for sometime for your own political advantage, you can dump these communal forces whenever you feel they are redundant and join the secular brigade. Remember Naveen Patnaik. He was tagged communal and his party was called a principal architect of the Kandhmal violence by the Indian media and the secular forces alike. Though as soon as he dumped the BJP on the question of ‘winnability’, he became the poster boy for secularism and everything that happened in Kandhmal was portrayed as a BJP conspiracy. We made everyone believe that Naveen Patnaik was just having a difficult time dealing with them. Also remember Kalyan Singh, the principle architect of Babri demolition is now trying to jump into the secular bandwagon and the secular forces are trying every bit to find him a place in their bandwagon. You can perpetrate the most heinous communal crime, but you can be secular any time you renegade the BJP. Remember, BJP hatred is the core quality required to become secular and other factors do not matter as much.

I will stop here and hope all of you had a very good understanding of secularism. Now work hard on these principles and you will climb to great heights in your political career. We will discuss some other issues in the next class.

via FriendsofBJP