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Friday, December 11, 2009

Daily Grey Market Premiums - Dec 11 2009

Company Name

Offer Price




Cox & Kings India


12 to 15

MBL Infra

165 to 180

2.50 to 3

JSW Energy Ltd.

95 to 110

-7 to -8


Godrej Properties

490 to 530

5 to 7

D. B. Corp.

185 to 212

4 to 5

Daily News Roundup - Dec 11 2009

ONGC is working out a major revamp to create independent subsidiaries to tap the growing market of drilling, construction and logistics services consumed by oil companies. (ET)

Group of global telecom and technology firms comprising, Reliance Globalcom and Bharti Airtel singed an agreement to build and operate a submarine cable system. (ET)

DE Shaw sells 36% in DLF arm to promoters. (ET)

RIL is in talks with IL&FS on Haryana SEZ. (BS)

NTPC to be the official partner for the Commonwealth Games scheduled in the next year. (BS)

Jindal Power Limited, a subsidiary of JSPL, plans to raise Rs100bn in this financial year via IPO. (BS)

Cairn India plans to merge businesses of its group companies with itself. (BL)

RCoM has bagged telecom infrastructure contracts from State Governments of Kerala, Mumbai and Maharashtra circles. (BS)

Pfizer sues Dr Reddy’s Labs over Lipitor patent. (BL)

Ranbaxy expects to launch a generic version of Astellas Pharma’s Flowmax urinary drug in March next year. (BL)

Reliance Infrastructure gets Rs10bn contract from Gujarat government. (BS)

Lupin is looking to acquire a company in the injectibles space in Japan. (ET)

Aventis Pharma has launched a rural market division with 10 products and a sales team of 300 people. (ET)

SREI Infra to raise upto US$200mn through ECBs. (BS)

Bajaj Electricals to raise Rs1.61bn via QIP. (BS)

Nagarjuna Agrichem to invest Rs2.5bn in two years to increase its annual production capacity by 80%. (ET)

Inflation in food articles climbed to 19.05% for the week-ended November 26. (ET)

Petroleum Ministry has sought oil bonds worth ~Rs208bn to partially compensate PSU oil marketing companies for selling cooking fuel below market price in the current fiscal. (BL)

Textile Ministry seeks Rs15bn for the TUF scheme. (ET)

No plan to curb flows of foreign capital, says RBI (ET)

EGoM backs fertilizer subsidy policy. (ET)

Hope for a Firm Friday!

The Grand essentials of happiness are: something to do, something to love, and something to hope for.

A firm start is in the offing but there is not much to do immediately. Global markets are mostly up and will provide the necessary boost in the beginning. All eyes will now be on the IIP data. It is likely to be pretty strong and could further buttress the case for a hike in interest rates.

Inflation and its cascading effect continue to be among the biggest headaches for Indian policymakers in the near year. Food prices have shot through the roof, with inflation in this crucial category nearing staggering 20%. Don’t be surprised if the Government and/or the RBI unveil a few steps to combat this menace in the next few days.

The big test for the Nifty will be 5180-5200. With a few days to go in 2009, we expect market to remain volatile and rangebound. Side counters will remain abuzz, but don’t get carried way.

The potential danger ahead for the global equities will be a recovery in the dollar and the unwinding of the carry trades. This could happen when the Fed begins to hike interest rates in the next 6-9 months. Even before that, we could see several nations (especially in Asia) reversing the emergency stimulus measures. Overall, the data points are likely to be mixed and fresh troubles might erupt in some form or the other.

Meanwhile, inflation is back in China as well. Consumer prices in the dragon land rose for the first time in 10 months in November. What’s more, China’s industrial production grew by a robust 19.2%. South Korea has hiked its economic forecast.

Elsewhere in the world, US stocks followed European bourses higher on Thursday. US stocks bounced back after rising oil prices helped investors shrug off lingering concerns over Dubai and Greece. A decline in continuing unemployment claims also pushed US stocks higher, as some consumer stocks rally on expectations of higher spending.

The weaker dollar and slumping demand for oil narrowed the US trade gap and signaled that the world's largest economy could be growing faster than anticipated, commerce department figures showed.

The Dubai stock market bounced back after Emaar, a leading real estate developer said that it was breaking off talks to merge with three weaker competitors. Greek banks too rebound following three days of heavy losses, with the Eurofirst 300 climbing back above the 1,000 level.

In commodities, aluminium traded at its highest levels of the year, leading the base metals sector higher while oil prices made a partial recovery after falling sharply in the previous session.

Investors will continue to seek some opportunity on every dip to get more bang for their bucks as they stick with their diversification strategies. All Emerging Market Equity Funds combined bounced back from the blows administered by Dubai World’s debt problems in late November, raking in $2.3 billion of net inflows for the week ending December 9. That brings year to date inflows to $75.4 billion, well above the previous record of $54 billion set in 2007.

US stocks rallied on Thursday as investors sorted through a raft of economic reports and opted to scoop up a variety of shares. A volatile dollar was also in focus.

The Dow Jones Industrial Average rose 69 points, or 0.7%, to 10,405.83. The S&P 500 index added 6 points, or 0.6%, to 2,190.86. The Nasdaq Composite gained 7 points, or 0.3%, at 1,102.35.

Gains were broad based, with 24 of 30 Dow stocks rising, led by commodities and consumer names.

Stocks rose more sharply in the first minutes of trade, with the Dow adding as much as 107 points on the weak dollar. But the dollar seesawed throughout the session, cutting into gains. The weak dollar has helped stocks rally over the past nine months, with the S&P 500 now up 62% from 12-year lows hit on March 9. The weaker dollar has given a boost to dollar-traded commodity shares.

But in the last few weeks, the greenback has been volatile. Stocks have also been volatile due to the lighter trading volume this month, with many investors opting to stay on the sidelines rather than go for any major changes in their portfolios at the end of the tumultuous year.

US stocks gained on Wednesday as the falling dollar boosted commodity stocks, and a rise in wholesale inventories and an upgrade of 3M provided some optimism.

The number of Americans filing new claims for unemployment rose last week to 474,000 from 457,000 in the previous week, the Labor Department reported. Economists expected claims to fall to 455,000, on average. However, continuing claims, the number of Americans receiving benefits for a week or more, declined more than expected. Continuing claims fell to 5,157,000 from 5,460,000 in the previous week. Economists expected 5,450,000 claims.

The Commerce Department said that the nation's trade gap narrowed in October to $32.9 billion from a revised $35.7 billion in September, thanks to a jump in exports. Economists, on average, thought it would widen to $36.8 billion.

The Treasury Department reported a $120.3 billion deficit for the month of November, the 14th straight month it has spent more than it earned.

Foreclosure filings fell 8% in November from October, according to RealtyTrac, an online marketer of foreclosed properties. That means November is the fourth month in a row in which foreclosure filings have dropped. But foreclosures are still up 20% from a year ago.

Separately, Treasury said in the afternoon that only 4% of troubled borrowers have gotten long-term mortgage help under the Obama administration's foreclosure prevention program. He testified before the Congressional Oversight Panel about the government's bailout of the financial system.

Geithner said the Troubled Asset Relief Program (TARP) helped the US avoid a complete financial meltdown, but that the economy is still facing significant headwinds. He said these headwinds are why he decided on Wednesday to extend TARP through October 2010, rather than letting it expire at the end of this year.

Goldman Sachs said that top executives will not be paid cash bonuses this year and will instead receive a special form of company stock. The decision comes amid growing criticism of the bank's plan to pay out huge bonuses on par with those given out in 2007, ahead of the credit crisis.

Ciena posted a wider-than-expected fiscal fourth-quarter loss as a result of rising costs. The networking gear maker also forecast better-than-expected revenue in the current quarter. But investors focused on the loss, sending shares more than 11% lower in active Nasdaq trading.

AOL began trading after completing its spin-off from Time Warner, ending what is considered to be one of the worst mergers in corporate history. Shares were little changed.

Warehouse club operator Costco posted fiscal first-quarter earnings of 60 cents per share versus 65 cents a year ago, in line with analysts' estimates.

Gold prices rallied and oil prices dipped, giving up bigger morning gains after the dollar turned positive. Dollar-traded oil and gold prices tend to move in the opposite direction of the dollar.

COMEX gold for February delivery rose $5.30 to settle at $1,126.20 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last week.

US light crude oil for January delivery fell 13 cents to settle at $70.54 a barrel on the New York Mercantile Exchange.

Treasury prices fell, raising the yield on the 10-year note to 3.48% from 3.42% late on Wednesday.

Results from Spanish retailer Inditex and an improvement in sentiment towards financial stocks helped Europe stocks close higher, in the first advance of a turbulent week. The pan-European Dow Jones Stoxx 600 index rose 1% to 243.89, snapping a three-session losing streak.

The German DAX index rose 1.1% to 5,709.02 and the French CAC-40 index climbed 1.1% to 3,798.38. The UK's FTSE 100 index added 0.8% to 5,244.37, after the Bank of England left both its key interest rate and its asset buying program unchanged.

Volatile markets ended with modest gains on Thursday as the benchmark indices continued its struggle in finding a specific direction. Weak global cues dragged the Sensex to start off with a negative bias. However, as the day progressed, firm cues from the European markets coupled with buying witnessed in the index heavyweights like L&T, BHEL and Bharti Airtel lifted the Nifty to end above the 5100 levels.

Sentiments also got a slight fillip after Reserve Bank of India Governor D Subbarao's was quoted as saying that capital flows into India were in line with requirements and there were no fears of asset price bubbles in the near future.

Technically, what we saw is, yet again the Nifty bounced back from its medium term trend line and 13 day moving average indicating that uptrend is intact. The RSI also indicates there is room for upside. Having said that, 5182 (52-week high) continues to remain a hurdle for the Nifty.

The BSE Sensex rose 64 points to end at 17,189 after touching a high of 17,231 and a low of 17,032. The index opened at 17,107 against the previous close of 17,125. The NSE Nifty added 23 points to end at 5,134.

In Asia, the Nikkei in Japan was down 1.5%, while Australia's S&P/ASX ended lower by 0.7%. Shanghai SE Composite was up 0.5% and Hang Seng index in Hong Kong fell 0.2%.

In Europe, stocks were trading marginally higher. The DAX in Germany was up 0.5% and the CAC 40 index in France was up 0.3%. The FTSE in the UK was up 0.3%.

Coming back to India, among the BSE sectoral indices, the Capital Goods index was the top gainer, adding 2%, followed by the Power index that was up 1% and the BSE Banking index was up 0.9%.

Major losers were BSE FMCG index down 0.8% and BSE Consumer Durables index down 0.6%.

The BSE Mid-Cap index ended marginally higher by 0.4% while the BSE Small-Cap index was up 1.2%.

Among the 30-components of Sensex, 15 stocks ended in the green and 15 ended in the negative terrain. Bharti Airtel, BHEL, ICICI Bank, RCom and L&T were among the top gainers.

On the other hand, among the major losers were Hero Honda, HDFC Bank and Grasim.

India’s primary articles index rose 13.9% in the week to November 28, 2009 from a year earlier, the government said. Inflation in Food Articles index shot up to 19.05% in the week ended November 28, 2009 as against 17.47% in the previous week. Non-Food articles rose to 3.31% as against 2.22% in the previous week and mineral index remained unchanged. The index of fuel group rose 0.06% in the week.

Shares of Mahindra Satyam surged over 5% to end at Rs108 after the company’s board approved a settlement agreement under which it will make total payments of US$70mn to Upaid Systems Ltd.

Mahindra Satyam said it would make a first payment of US$45mn within 10 days of getting regulatory approval of the settlement. Second payment of US$25mn would be made within a year of the first payment.

Shares of Lupin gained 2.2% to end at Rs1438. The company announced that it had issued Foreign Currency Convertible Bonds (Bonds) of US$100mn, with maturity in January 2011. The said Bonds were listed on the Singapore Stock Exchange Ltd.

Till date, Bonds aggregating US$98.6mn have been converted. In accordance with the terms and conditions of the issue, the Company has now redeemed outstanding Bonds of US$1.4mn. With the early redemption, there are no Bonds outstanding as on date.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai rejected the appeal filed by M&M in respect of the Excise classification of the Commander vehicles.

The appeal was against the demand made on the company for payment of differential excise duty of Rs2.16bn and penalty of Rs881mn in connection with the classification of Commander range of vehicles as 10 seater during the years 1991-1996.

Shares of M&M ended marginally higher by 0.7% to Rs1040. The scrip opened at Rs1037 it touched an intra-day high of Rs1045 and a low of Rs1021 and recorded volumes of over 0.15mn shares on BSE.

Shares of Take Solutions shot up by over 5.5% to end at Rs33.5 after the company announced that it successfully concluded the sale of its entire 51% stake in the Malaysian subsidiary, TAKE United Sdn Bhd. for Rs48.8mn.

TAKE's investment in this subsidiary was Rs26.5mn. The Malaysian subsidiary contributed 2.3% to TAKE'S FY09 consolidated revenue. TAKE Solutions will continue offering its services to the Malaysian customers through the same entity in a 'distributor' arrangement and also through other channels.

Shares of FCS Software were locked at 20% to Rs14.88 after the board of directors announced that it successfully concluded placement of 10,000,000 GDR at US$2.41 per GDR (Representing 100,000,0000 Underlying Equity Shares of Re. 1/- each). The GDRs will be listed on the Luxembourg Stock Exchange.

The scrip opened at Rs12.35 it touched an intra-day high of Rs14.88 and a low of Rs12.35 and recorded volumes of over 6.2mn shares on BSE.

Shares of Simplex Projects surged 3% to end at Rs232 after the company announced that it bagged three contracts for earth works and constructions of feeder channel and canal works in the region of Mahoba, Uttar Pradesh from the Irrigation Dept., Govt. of Uttar Pradesh under three different packages.

The total value of the contracts including the cost of materials aggregates to Rs4.07bn, which are to be completed within a time span of 36 months.

Hotel Sector Update

Hotel Sector Update

JSW Energy IPO Note

JSW Energy IPO Note

Morning Note - Dec 11 2009

Morning Note - Dec 11 2009

Morning Report - Dec 11 2009

Morning Report - Dec 11 2009