Glenmark Pharma

Glenmark Pharma

Mobile revenue growth outperforms GDP; investment scaled back

A new Wireless Intelligence study reveals that mobile revenue growth continued to outperform GDP growth in the world's major economic countries during the last 12 months, but has not been immune to the effects of the global recession. According to the new report - The Cellular Telecom Crunchonomics: One Year On – mobile revenues across the 30 OECD member countries* are forecast to drop from EUR411 billion in 2008 to EUR408 billion in 2009, a decline of 0.7 percent. However, GDP growth is forecast to decline by 4.1 percent over the same period (see chart).

Operator revenues in the year to 3Q09 were hit by unfavourable currency fluctuations and a slowdown in private consumption, both consequences of the economic instability that hit the world's markets around the third quarter of last year. The report notes that currency fluctuations reached a peak in late 2008 but have become more stable since then. Meanwhile, domestic demand fell by 3.7 percent, the first decline registered across OECD markets in the past decade, while private consumption fell by 1.5 percent.

The European mobile industry was deemed to be hardest hit by the economic downturn. Total operator revenues in Europe are forecast to fall by 4.3 percent this year to reach EUR36.5 billion, with declines of 5 percent expected in key markets such as the UK, Spain, Portugal, Ireland, Greece and Austria. Countries such as Poland and the Czech Republic, which reported double-digit revenue growth in 2008, are forecast to report double-digit declines this year. By contrast, operator revenues in North America (USA/Canada) are proving resilient and are forecast to grow by 4.3 percent this year to reach EUR135 billion. Large mobile operators in the US - including Verizon Wireless, AT&T and T-Mobile USA – are all expected to report double-digit revenue growth in 2009.

Mobile operators across the world have significantly reduced opex and capex levels to counter the effects of the global recession. The study found that opex accounted for 60 percent of operator revenues in 3Q09, compared to 63 percent a year ago, while capex declined to 10 percent of revenues, compared to around 14 percent a year ago. However, the significant reduction in opex helped keep EBITDA stable at 33 percent of total revenues, while capex reductions meant that operating cash flows increased to 22 percent of total revenues, up from 20 percent a year ago.

The economic crisis has had an even greater effect on handset vendors, according to Wireless Intelligence. Device makers saw channel inventories fall from approximately 6 weeks to 4 weeks due to extensive destocking by operators and distributors looking to bring their stock levels into line with lower sales. This trend was particularly evident in 4Q08 and the first quarter of 2009. The volatility of money markets and the decline in private consumption – as was the case for mobile operators – also had a large impact on vendor performance.

Between 2007 and 2008, global shipments from the top five handset vendors (Nokia, Samsung, LG, Sony-Ericsson and Motorola) grew by 2 percent, but Wireless Intelligence predicts that 2009 shipments are likely to decline by 10 percent year-on-year. However, the report notes that many handset vendors have recently forecast bullish growth for next year. For example, Nokia – the world's largest mobile device manufacturer – has said it expects global device volumes to rise by 10 percent in 2010.

Joss Gillet, Senior Analyst, Wireless Intelligence: "The industry is facing a dilemma as it must invest in 3G network expansion and service improvements to meet consumer expectation as well as generate substantial profits to offset falling voice revenues, yet at the same time it is cutting marketing budgets and squeezing capital expenditure. The financial crisis has served to exacerbate already existing difficult market conditions such as user saturation in developed markets, regulatory pressures, on-going voice-centric price wars and the slow take-up of data consumption. As most economies have now started to recover from the recession - and since mobile operators are reporting healthy balance sheets - we hope that 2010 will mark the time when mobile operators invest money in high-speed network coverage to meet the growing expectations behind data services. Meanwhile, the top five handset vendors rationalised their portfolio mix by launching fewer devices and focusing on high-end and low-end segments, which has led to a recovery in their operating margins over the past 9 months. In 2010, we expect handset vendors to report healthier operating margins driven by larger smartphone portfolios in the mid price tier, a refresh of their high-end portfolios, more predictable quarterly demand, stabilised money markets and reduced operating expenditures."

Centre concedes to demand of Telangana state

The Government gave into the demands of a separate statehood for 'Telangana', which will be carved out of Andhra Pradesh. The Centre blinked on the sensitive issue following several days of violent protests and a fast-unto-death demonstration by Telangana Rashtra Samithi (TRS) chief K Chandrasekhara Rao. "The process of forming the state of Telangana will be initiated," Home Minister P. Chidambaram, told reporters on Dec. 10 after hectic parleys in the capital. All cases against those who have been protesting would also be withdrawn, he added.

The decision to set the ball rolling on a separate Telangana state came after a meeting between Prime Minister Dr. Manmohan Singh, Defence Minister A. K. Antony, Finance Minister Pranab Mukherjee and Andhra Pradesh chief minister K. Rosaiah, besides Chidambaram. Rao ended his 11-day-long agitation following the announcement by Chidambaram. He broke down while recalling the sacrifices made by the people of the region. He also thanked Manmohan Singh, Sonia Gandhi and BJP leader L.K. Advani.

It was not yet clear as to when the ruling Congress would move the resolution in the Andhra Pradesh Assembly urging the Centre to create a separate State of Telangana. Barring the MIM, almost all parties in Andhra Pradesh have already announced their support for such a resolution. But, it could still be a long drawn process as various issues need to be sorted out. Regular protests demanding the new "Telangana" state, which would take 10 out of 23 districts of Andhra Pradesh, had paralyzed normal life in Hyderabad over the past few days. The Telangana supporters want Hyderabad included as well.

Demands for a separate Telangana state gathered steam in 1969 with violent protests killing more than 300 people till 1972. The protests died down after that for quite some time, until the regional Telangana Rashtra Samiti party, headed by Rao raised fresh demands in 2001, supported by other non-Congress groups. The massive protest rally to Andhra Pradesh assembly that was scheduled for Dec. 10 has been converted into a victory rally. The agitation across the regThe Government gave into the demands of a separate statehood for 'Telangana', which will be carved out of Andhra Pradesh. The Centre blinked on the sensitive issue following several days of violent protests and a fast-unto-death demonstration by Telangana Rashtra Samithi (TRS) chief K Chandrasekhara Rao. "The process of forming the state of Telangana will be initiated," Home Minister P. Chidambaram, told reporters on Dec. 10 after hectic parleys in the capital. All cases against those who have been protesting would also be withdrawn, he added.

The decision to set the ball rolling on a separate Telangana state came after a meeting between Prime Minister Dr. Manmohan Singh, Defence Minister A. K. Antony, Finance Minister Pranab Mukherjee and Andhra Pradesh chief minister K. Rosaiah, besides Chidambaram. Rao ended his 11-day-long agitation following the announcement by Chidambaram. He broke down while recalling the sacrifices made by the people of the region. He also thanked Manmohan Singh, Sonia Gandhi and BJP leader L.K. Advani.

It was not yet clear as to when the ruling Congress would move the resolution in the Andhra Pradesh Assembly urging the Centre to create a separate State of Telangana. Barring the MIM, almost all parties in Andhra Pradesh have already announced their support for such a resolution. But, it could still be a long drawn process as various issues need to be sorted out. Regular protests demanding the new "Telangana" state, which would take 10 out of 23 districts of Andhra Pradesh, had paralyzed normal life in Hyderabad over the past few days. The Telangana supporters want Hyderabad included as well.

Demands for a separate Telangana state gathered steam in 1969 with violent protests killing more than 300 people till 1972. The protests died down after that for quite some time, until the regional Telangana Rashtra Samiti party, headed by Rao raised fresh demands in 2001, supported by other non-Congress groups. The massive protest rally to Andhra Pradesh assembly that was scheduled for Dec. 10 has been converted into a victory rally. The agitation across the region is now expected to recede slowly.

Telangana region accounts for 119 of the 294 assembly seats in Andhra Pradesh and 17 of the 42 Lok Sabha seats. Telangana is likely to comprise 10 districts of Andhra Pradesh - an area that constituted the old Hyderabad state during the British rule. It includes Hyderabad, the current Andhra Pradesh capital. TRS, which was formed in 2001 on the plank of a separate Telangana by Rao after he quit TDP, was part of the UPA after the 2004 elections. It parted ways with the Congress-led alliance in 2006, citing lack of progress on the Telangana issueion is now expected to recede slowly.

Telangana region accounts for 119 of the 294 assembly seats in Andhra Pradesh and 17 of the 42 Lok Sabha seats. Telangana is likely to comprise 10 districts of Andhra Pradesh - an area that constituted the old Hyderabad state during the British rule. It includes Hyderabad, the current Andhra Pradesh capital. TRS, which was formed in 2001 on the plank of a separate Telangana by Rao after he quit TDP, was part of the UPA after the 2004 elections. It parted ways with the Congress-led alliance in 2006, citing lack of progress on the Telangana issue

Weekly Newsletter - Dec 12 2009

After yet another choppy week and flat close, the Indian market will look forward to a brighter week. Hopefully, the market would have overcome the disappointment over the IIP data. Technically though, the bulls will be tested again with the Nifty failing to decisively cross the 5180 barrier. They would need some help from the global markets and overseas investors. If all goes well, the market might finally break out of the current range. But, we would continue to advocate some caution at higher levels. Sentiment could be affected if the monthly inflation data, to be released on Monday, turns out to be a part pooper. In the US, the big event to keep an eye for will be the Federal Reserve's policy meeting and its outcome. Among the other key US economic reports due out next week include: data on PPI, CPI, industrial production and housing starts.

October industrial output data misses estimates

India's industrial production grew by 10.3% in October as against flat growth in the same period last year, data released by the Government showed. The stock market and the rupee gave up some gains post the release of the IIP data, which turned out to be lower than consensus forecast of 11-13%. In a seasonally adjusted month-on-month terms, the industrial output fell 1% in October 2009 - the first drop in the past 12 months.

Still, the latest IIP report only goes to buttress the case for a hike in interest rates by the Reserve Bank of India (RBI) and reversal of some of the fiscal stimulus measures by the Government in the near year.

Meanwhile, the Government revised the September IIP growth figure, to 9.6% from 9.1%. India's industrial output expanded by 7.1% in the first seven months of the current fiscal year (April-October 2009-10) versus a growth of 4.3% in the corresponding period of the last financial year.

Growth in the Mining sector stood at 8.2% in October compared to 3.2% in the same month last year. Electricity output grew by 4.7% in the month under review as against 4.4% in the year-ago period. Manufacturing sector output rose by 11.1% versus a contraction of 0.6% in October 2008.

Basic Goods output expanded by 5% in October 2009 as against 3.2% in the same month a year earlier. Growth in Capital Goods output stood at 12.2% in the month under consideration versus 4.2% in October 2008. Intermediate Goods output grew by 14.3% compared to a drop of 4.4% a year ago.

Consumer Goods segment witnessed a growth of 11.8% versus a decline of 0.9% in October 2008. Growth in Consumer Durables stood at 21% as against a contraction of 1.6% last year. Output for Consumer Non-durables was up by 8.1% compared to a fall of 0.6% in October last year.

Turnover spurts

Jindal Steel & Power December 2009 futures at premium

Nifty December 2009 futures were at 5,110.60, at a discount of 6.70 points as compared to the spot closing of 5,117.30. Turnover in NSE's futures & options (F&O) surged to Rs 71,331.55 crore from Rs 57,983.48 crore on Thursday, 10 December 2009.

Jindal Steel & Power December 2009 futures were at premium at 745.05 compared to the spot closing of 742.

Reliance Industries December 2009 futures were at a slight premium at 1073 compared to the spot closing of 1072.

DLF December 2009 futures were near spot price at 383.50 compared to the spot closing of 384.

In the cash market, the S&P CNX Nifty fell 17.35 points or 0.34% at 5,117.30.

Cox and Kings zooms on debut

Settles at Rs 426.05 on BSE compared to IPO price of Rs 330

Cox and Kings (India) settled at Rs 426.05 on BSE, a 29.10% premium over the initial public offer price of Rs 330 per share.

The Cox and Kings (India) stock debuted at Rs 304.10 (also its day's low), a 7.84% discount over its initial public offer price of Rs 330 per share. Thereafter the stock recovered to strike an intra-day high of Rs 433.45.

The counter clocked high volume of 1.69 crore shares on BSE.

Cox and Kings (India) had priced its initial public offer (IPO) at the top end of the Rs 316 to Rs 330 price band. The IPO, which remained open between 18 and 20 November 2009, was subscribed 6.31 times.

The qualified institutional buyers portion was subscribed 9.93 times. The portion reserved for non-institutional investors was subscribed by 10.74 times and the retail individual investors' share was fully subscribed.

On 17 November 2009, the company raised Rs 90.55 crore through the issue of 27.44 lakh shares at Rs 330 per share to nine anchor investors.

Cox and Kings (India) is one of the recognised holiday brands that serves as a one stop shop for all travel and travel related products. The objective of the issue is to fund its acquisitions, repayment of loans and also to fuel other business expansion plans.

The company's net profit rose 19.1% to Rs 38.18 crore on 31.9% rise in sales to Rs 155.09 crore in the year ended March 2009 over the year ended March 2008.

DB Corp IPO Analysis

Aggressive pricing

Has one of the largest newspaper production and distribution platforms in India

Promoted by Ramesh Agarwal and Sudhir Agarwal, DB Corp is one of the leading print media companies in India, publishing 7 newspapers, 48 newspaper editions and 128 sub-editions in three languages - Hindi, Gujarati and English in 11 states in India. The company's flagship newspapers, Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar, have a combined average daily readership of 15.5 million readers, making it one of the most widely read newspaper groups in India. With a total average daily readership of 11.7 million readers, Dainik Bhaskar is a widely read newspaper in Madhya Pradesh, Chattisgarh, Rajasthan, Haryana, Punjab, and Chandigarh. Divya Bhaskar is the number one Gujarati daily newspaper by circulation in Gujarat. Its other newspapers are Business Bhaskar, DB Gold and DB Star, and, franchisee DNA in Gujarat and Rajasthan.

In addition to newspapers, DB Corp publishes 5 periodicals: Aha Zindagi, a monthly magazine in Hindi and Gujarati; Bal Bhaskar, a Hindi magazine for children; Young Bhaskar, a children's magazine in English; and Lakshya, a career magazine in Hindi. The company has one of the largest newspaper production and distribution platforms in India. Its print products are produced at 31 facilities spread across 31 cities with an installed capacity of approximately 1.94 million copies per hour.

Through its subsidiary, Synergy Media Entertainment (SMEL), DB Corp has a significant presence in radio under the brand, My FM. Through SMEL, it operate 17 FM radio stations. Through its subsidiary, I Media Corp (IMCL), it also runs internet portals and short messaging service (SMS) portals.

DB Corp sells space in its publications through advertising agencies as well as directly to customers. It has one of the largest pools of advertisers in India. DB Corp had relationships with 1,552 accredited agencies and 2,745 non-accredited agencies and served approximately 308134 advertisers end September 2009.

DB Corp intends to enter the capital market to raise Rs 336.24 crore to Rs 385.31 crore by issuing around 1.81 crore equity shares of face value of Rs 10 each through a 100% book-building process at a price band of Rs 185 – Rs 212, which consists of fresh issue of 1.27 crore of equity share and an offer for sales of around 0.54 crore by Cliffrose Investment (an affiliate of private equity firm Warburg Pincus). The company will use the proceeds setting up two new publishing units, each with a capacity to print 50,000 newspaper copies per hour at an approximate cost of Rs 60 crore; upgrade its existing plant and machinery in Madhya Pradesh, Chhattisgarh, Rajasthan and Gujarat at an approximate cost of Rs 30.5 crore; enhance brand image through sales and marketing; reduce its existing working capital loans at Rs 38.1 crore to Rs 18.1 crore; and prepay Rs 110 crore of the existing term loans of Rs 403.67 crore.

Strengths

Has substantial presence in north, central and western India. The key flagship newspaper, Dainik Bhaskar, is market leader by readership in the daily newspaper segment in Madhya Pradesh, Chattisgarh, Chandigarh and Haryana.

Divya Bhaskar is the largest Gujarati language newspaper by circulation.

The flagship newspapers, Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar, have a combined average daily readership of 15.5 million readers, making it one of the most widely read broadsheet newspaper group in India.

Weaknesses

Due to the memorandum of understanding with legal heirs of late Bishambhar Dayal Agarwal (BDA), the company cannot publish Dainik Bhaskar in the districts of Sidhi, Narsinghpur, Seoni, Satna, Mandla, Chhindwara, Rewa, Shahdol, Jabalpur, Gwalior, Balaghat, Damoh, Chhatarpur, Panna, Tikamgarh, Anuppur, Umaria, Katni, Dindori and Jhansi and in Maharashtra and western Uttar Pradesh., where Dainik Bhaskar is owned by BDA. It is also possible for BDA to start Dainik Bhaskar in states without the presence of the newspaper.

The promoters and promoter group have equity interests or investments in other entities that offer related services such as DMCL, Bhaskar Multimedia Pvt Ltd, Bhaskar Publications, and Allied Industries Pvt Ltd, DB Publications Pvt Ltd, Dimension Media Pvt Ltd, Divya Prabhat Publications Pvt Ltd, Manjul Publishing House Pvt Ltd, New Era Publications Pvt Ltd and Saurashtra Samachar Pvt Ltd. These entities have been incorporated to print and publish newspapers. This can have adverse effects on operation and there is scope for conflict of interest.

Valuation

DB Corp has set a price band of Rs 185 to Rs 212 per equity share of Rs 10 face value. At the lower band of Rs 185 per share, the P/E is 17.6 times the annualised consolidated EPS of Rs 10.5 for the half-year ended September 2010 and 70.4 times the consolidated EPS of Rs 2.6 for the fiscal ended March 2009 (FY 2009). At the upper price band of Rs 212 per share, the P/E will be 20.1 times the annualised EPS for the half-year ended September 2010 and 80.7 time the EPS for FY 2009. Considering the past track record, the first half performance looks to be exceptional. The first half operating profit margin (OPM) of 32.9% is way above the OPM of 12.7% to 20.1% achieved in the last four years. The high OPM is mainly due to the sharp fall in newsprint costs due to exceptional fall in newsprint prices. As newsprint prices have already gone up and this kind of margin is not sustainable. Hence, it is not proper to annualise the first half EPS and arrive at P/E. Comparable player Jagran Prakashan is currently trading at P/E of 39 times FY 2009 EPS as against which DB Corp is offering its shares at P/E of 70.4-80.7 times.

Market slides as industrial production growth falls short of expectations

The key benchmark indices ended a choppy trading session lower as industrial production growth for October 2009 only matched estimates while market participants had hoped for a big surprise. Index heavyweight Reliance Industries (RIL) fell in volatile trade. Banking and realty stocks also fell on rate hike worries. Capital goods stocks rose.

The BSE Sensex fell 70.28 points or 0.41%, up close to 65 points from the day's low and off close to 230 points from the day's high. The S&P CNX Nifty came off the higher level after hitting 19-month high in early afternoon trade. The market breadth was weak. Stocks were firm across the globe.

Intraday volatility on the bourses was immense. The market surged in early trade on higher global stocks. It held firm in mid-morning trade. A sell-off gripped the market in early afternoon trade soon after the industrial production data for October 2009 hit the market at about 12:00 IST. The industrial production growth though robust at 10.3% fell below market expectations of a growth of 13% to 14% for the month. The lower than expected growth triggered a sell-off in equities. The market recovered from lower level in mid-afternoon trade. The market weakened once again later.

The latest data from global fund tracker EPFR Global showed emerging market equity funds received $2.3 billion in inflows in the week ended 9 December 2009, bringing 2009 inflows to $75.4 billion. Emerging-market funds are heading for record annual inflows in 2009. The previous record was $54 billion in 2007.

Asia excluding Japan and global emerging market stock funds each attracted net inflows of more than $800 million for the week. Among the largest developing nations, Russian stocks funds saw inflows rise to a seven-week high of $181 million while Indian equity funds absorbed $128 million, EPFR said.

The Congress-led government approved a plan on Thursday to create a new state called Telangana out of Andhra Pradesh, home to high-tech Hyderabad, after more than a week of violent protests and a hunger strike by a leading politician. But fresh protests and the mass resignation of local state lawmakers may still force the government to backtrack, fearing not only a political backlash, but also economic repercussions.

The economy may feel the pinch of the failed June-September monsoon in the quarter that ends this month, Finance Minister Pranab Mukherjee told parliament on Friday. He also said the country was likely to meet its tax target in the current fiscal year to March 2010, helped by higher direct tax receipts, which would make up for the deficiency in indirect tax collection.

The Lok Sabha on Friday approved extra spending of $5.5 billion for the fiscal year ending March 2010. The additional spending is needed for food and fertiliser subsidies, wages, infrastructure projects and an equity infusion into state-run carrier Air India. Finance Minister Pranab Mukherjee has said the additional spending need not be funded through additional borrowing.

Industrial output jumped 10.3% in October 2009 from a year earlier, helped by stimulus measures and robust domestic demand, data released by the government at 12:00 IST today showed. Manufacturing production rose 11.1% in October 2009 from a decline of 0.6% a year earlier. September's annual industrial growth rate was revised upward to 9.6% from 9.1% previously. Industrial output rose 2.6% in the 2008/09 fiscal year (April-March), slower than 8.5% in 2007/08.

The current trend in industrial output is likely to continue in the coming months, trade minister Anand Sharma said on Friday. The deputy chairman of India's planing commission Montek Singh Ahluwalia said on Friday he hoped the momentum in the country's industrial output would be sustained in coming months.

Investors fear that a recovery in the economy and a likely surge in wholesale price inflation will add pressure on the central bank to raise interest rates. The Reserve Bank of India holds a quarterly policy review in late January 2010.

Food prices rose at their fastest pace this year in late November, adding to the pressure on the Reserve Bank of India (RBI) to tighten monetary policy sooner to contain any likely spill-over to the broader economy. The food price index rose 19.05% in the 12 months to 28 November 2009, as the worst dry spell in nearly four decades and floods in parts of the country hurt summer crops. A week ago, the Organisation for Economic Cooperation and Development had cautioned India against complacency on rising prices.

The rise in food prices in India is mainly due to a supply shortfall, Finance Minister Pranab Mukherjee said on Friday. On Monday 7 December 2009, central bank Governor Duvvuri Subbarao said food price inflation was a supply-side issue and monetary policy was an inefficient tool to rein it in. The RBI holds its next policy meeting in late January, but it can adjust monetary policy at any time.

The government will conduct the auction for 3G wireless spectrum as scheduled, Communications Minister Andimuthu Raja, said on Friday. The auctions are slated to be conducted on 14 January 2010.

Reserve Bank of India (RBI) Governor D Subbarao said on Thursday capital flows into India are in line with requirement and as of now there is no concern of the flows building asset price bubbles. Deputy Governor Shyamala Gopinath said the new overseas borrowing norms are part of India's capital account management and they do not indicate capital control.

Subbarao said capital inflows into India were roughly in line with the current account deficit. "We cannot call it a capital surge like what happened in 2006-08," he said. Subbarao had said early this week that capital inflows in India reflected investor confidence in the economy. An economic adviser to the prime minister C Rangarajan has said India could absorb inflows of up to $100 billion in the current fiscal year, well above projected levels of $57-$60 billion.

RBI said after trading hours on Wednesday it would withdraw from 1 January 2010 some concessions on overseas borrowing for Indian firms introduced during the global credit crisis, although it also eased rules for the infrastructure and telecoms sectors.

Prime Minister Manmohan Singh said on Thursday the country needs to sharply increase public spending on agriculture, particularly on irrigation and technology, to raise farm output. This year, the worst monsoon in 37 years ravaged India's rice and cane crop, making the world's second-most populous country a big importer of sugar. The government is also considering rice imports to ensure the country has adequate grain stocks.

Meanwhile, DB Corp, India's second largest regional newspaper, was subscribed 0.66 times by 16:00 IST on the first day of issue today. The company has set a price band of Rs 185-212 a share.

Mumbai based realty firm Godrej Properties' initial public offering (IPO) was subscribed 3.98 times by 16:00 IST on last day of the issue today, 11 December 2009. The price band is at Rs 490-530 per share. The issue closes today, 11 December 2009.

European shares rose on Friday after snapping a three-day losing run in the previous session, ahead of key US macro data later in the day. The key benchmark indices in France, Germany and UK rose by between 1% to 1.73%.

Asian stocks rose the most in four days on Friday as a larger-than-expected surge in China's industrial production and a drop in US jobless claims to a one-year low boosted confidence in a global economic recovery. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 0.25% to 2.48%. But China's Shanghai Composite fell 0.21%.

China's industrial production grew more than economists estimated in November 2009, signaling a strengthening recovery in the world's third-biggest economy. Factory output climbed 19.2% in November 2009 from a year earlier, the biggest increase since June 2007, the statistics bureau said in Beijing today.

Trading in US index futures indicated Dow could gain 53 points at the opening bell on Friday, 11 December 2009.

US stocks edged higher on Thursday as signs of improving trends in the job market and a decline in the US October 2009 trade deficit reassured investors the economy was on a steady growth path. The Dow Jones industrial average was up 68.78 points, or 0.67%, at 10,405.83. The Standard & Poor's 500 Index ended up 6.40 points, or 0.58%, at 1,102.35. The Nasdaq Composite Index closed up 7.13 points, or 0.33 %, at 2,190.86.

The US initial jobless claims for the week ending 5 December 2009 came in worse than expected at 474,000. However, the continuing claims made a sharp move down to 5.16 million from 5.46 million. The consensus had called for 5.45 million continuing claims.

The trade deficit for October 2009 totaled 32.9 billion dollars which is less than the 36.8 billion dollar deficit that had been widely expected. It is also an improvement from the September numbers.

International Monetary Fund First Deputy Managing Director John Lipsky warned on Thursday that economic recovery around the world remains tentative and the return to growth is still vulnerable to new shocks. In a speech to the Japan Society, Lipsky said financial conditions have improved but are far from normal. Mounting credit losses, especially in commercial real estate, could dampen the recovery in business investment and inventories, he said.

Lipsky said monetary policy could likely remain accommodative for some time in rich economies given the absence of inflationary pressures. He said the fiscal challenges in rich countries were "formidable" and changes to taxes and spending would not be easy to design or implement. Reducing the debt levels would require fiscal adjustments in the order of 8% points of gross domestic product in advanced economies, he added.

Lipsky said the recent surge in capital flows into emerging markets could be a "catch up" from the previous sudden withdrawal from risk, and capital controls may be appropriate if the surge is temporary. But temporary capital controls should not be used to paper over real problems, or to avoid needed policy adjustment, Lipsky added.

The International Energy Agency has revised up by 130,000 barrels a day its forecast for 2010 global oil demand, which is now expected to average 86.3 million barrels a day. In its monthly oil report released Friday, the IEA also left its forecast for this year's oil demand virtually unchanged at 84.9 million barrels a day, a decline of 1.6% year-on-year.

The BSE Sensex fell 70.28 points or 0.41% to 17,119.03. The Sensex rose 162.40 points at the day's high of 17351.71 in early afternoon trade. The Sensex fell 133.19 points at the day's low of 17056.12 in afternoon trade.

The S&P CNX Nifty fell 17.35 points or 0.34% to 5,117.30. It hit a high of 5192.55 in early afternoon trade, its highest since 6 May 2008.

BSE clocked a turnover of Rs 4512 crore, lower than Rs 4587.95 crore on Thursday, 10 December 2009.

The market breadth, indicating the overall health of the market turned negative. On BSE, 1072 shares advanced as compared with 1765 that declined. A total of 73 shares remained unchanged. The breadth was strong in early trade.

Among the 30-member Sensex pack, 23 fell while rest rose.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7471.72 points or 77.44% in calendar year 2009, as on 11 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8958.63 points or 109.78% as on 11 December 2009.

Coming back to today's trade, the BSE Mid-Cap index fell 0.6% and the BSE Small-cap index fell 0.73% Both the indices underperformed the Sensex.

The sectoral indices on BSE showed a mixed trend. The BSE Capital Goods index (up 0.64%), the BSE Power index (up 0.59%), the BSE Auto index (up 0.25%), the BSE Metal index (up 0.24%), the BSE Consumer Durables index (up 0.23%), the BSE IT index (up 0.02%), the BSE PSU index (down 0.34%), outperformed the Sensex.

The BSE Bankex (down 1.22%), the BSE Realty index (down 0.94%), the BSE FMCG index (down 0.73%), the BSE Healthcare index (down 0.63%), the BSE Teck index (down 0.58%), the BSE Oil & Gas index (down 0.53%), underperformed the Sensex.

India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 0.15% to Rs 1068.95. The stock was volatile. It hit a high of Rs 1088 and a low of Rs 1064.15. With an aim to rope in a strategic partner for its Haryana special economic zone (SEZ) project, corporate giant Reliance Industries is reportedly in talks with IL&FS and a couple of other players for part-sale of its stake in Haryana SEZ.

Amid reports that Reliance Industries was mobilising funds for its acquisition, global petrochemical major LyondellBasell has said it has not yet received a final bid. RIL said on Wednesday it has no plans to buy any debt of LyondellBasell.

FMCG shares fell on profit taking. ITC, Hindustan Unilever, Dabur India, United Spirits fell by between 0.16% to 1.82%.

India's largest engineering and construction firm by sales Larsen & Toubro was flat at Rs 1040.15. The company said on Tuesday 8 December 2009 that it got orders worth Rs 844 crore.

Among other capital goods stocks, Bharat Heavy Electricals, BEML and ABB rose by between 1.2% to 3.12%.

India's second largest software services exporter Infosys Technologies rose 0.42%. Among other IT stocks TCS and Wirpo fell by between 0.27% to 0.62%.

Realty stocks reversed early gains on profit taking. India's largest realty player by market capitalization DLF fell 0.92%. New York-based hedge fund DE Shaw on Thursday sold a 36% stake in DLF Asset (DAL) to the promoters of DLF for $500 million, retaining only a four per cent stake which it intends to sell as and when the firm lists in Singapore. DLF Assets was set up as a real estate investment trust to put money into SEZs, infotech parks as well as to buy commercial property assets from group company DLF.

Among other realty stocks, Omaxe, Akruti City and Unitech fell by between 0.18% to 2.15%.

Banking shares fell on a likely monetary tightening by the RBI. India's largest private sector bank by net profit ICICI Bank fell 1.48% even as its ADR rose 1.87% on Thursday, 10 December 2009. ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010.

India's second largest private sector bank by net profit HDFC Bank fell 0.14% even as its ADR rose 0.42% on Thursday.

India's largest bank by net profit and branch network State Bank of India fell 1.31%. The UPA government last week cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill seeks to bring the government's holding in the country's largest public sector bank on a par with other public sector banks at 51 %. Currently, the Union government holds 59% stake in SBI. At present, the stake of the promoter, that is Government of India, cannot fall below 55 %.

India's largest mortgage lender by total income Housing Development Finance Corporation (HDFC) fell 1.04% extending recent losses triggered by investor worry a dual interest rate scheme on home loans introduced by the company would hit margins.

HDFC, last week, announced a dual-rate loan scheme under which a borrower will be charged a fixed rate up to March 2012 and a floating rate thereafter. For a 20-year loan of Rs 30 lakh, a borrower will pay a fixed rate of 8.25% up to March 2012 and then a floating rate that's 500 basis points below the prime lending rate (PLR) - the institution's benchmark rate. Currently, the PLR is 13.75%.

Telecom stocks fell on profit taking. Telecom minister A Raja said there no change in 3G auction schedule. Meanwhile, the central bank on Wednesday allowed telecom firms to access oversees markets to fund their bids for 3G spectrum. India's largest mobile services provider by sales Bharti Airtel fell 3.21%. Bharti Airtel sees revenue pressured in the short term amid an intense price war in the country's wireless sector, director Akhil Gupta said on 7 December 2009.

India's second largest mobile services provider by sales Reliance Communications fell 1.1%. The company has reportedly won s the mgovernance contracts worth over Rs 500 crore. The government may impose a penalty on Reliance Communications after examining a state audit report that found the No. 2 telecoms firm under-reported revenue for two years, the telecoms minister A Raja said on Thursday.

Idea Cellular and Spice Communications fell by between 0.91% to 3.07%.

Mobile operators including Bharti Airtel, Vodafone Essar and Reliance Communications are locked in a tariff war, raising concerns about telecom firms' profitability. The price war is aimed at grabbing new users as new firms enter the market.

Construction stocks fell on profit taking. Hindustan Construction Company, Nagarjuna Construction Company, Valecha Engineering, Era Infra Engineering and Gayatri Projects fell by between 1.44% to 2.46%. Construction shares have jumped in the recent past on government's thrust on the infrastructure sector. The government has set a target of spending $20 billion a year on road construction.

India's largest thermal power generator by sales NTPC rose 0.43% The government is planning a 5% stake sale in the firm by March 2010.

Reliance Infrastructure rose 0.32% on reports it had won a Rs 1000 crore ($215 million) road project from Gujarat in western India.

Metal stocks were mixed. Hindalco Industries fell 0.84%. Hindalco Industries is reportedly raising Rs 4500 crore ($966 million) in debt to fund a new alumina refinery. The 1.5-million-tonne per year refinery, in the eastern state of Orissa, is expected to start production in July 2011 and involves about Rs 6500 crore as capital expenditure.

Steel Authority of India, National Aluminum Company, Sterlite Industries rose by between 0.02% to 2.41%.

Jindal Steel & Power gained 1.93%, after the board of directors of its subsidiary Jindal Power approved raising up to Rs 10000 crore through an initial public offer.

Tata Steel, the world's eighth-largest steelmaker by sales, fell 0.55%. The company said on 7 December 2009 its sales rose 34.5% to 498,000 tonnes, in November 2009 over November 2008.

The company on 4 December 2009 announced a partial closure of Corus' Teesside Cast Product (TCP) plant in north England, after four companies stopped buying metal from it. Operations will be suspended at the end of January 2010 forcing the loss of 1,700 jobs around 600 fewer than envisaged earlier, Tata Steel said in a statement.

After a downward trend, steel prices are reportedly headed for an increase next month, led by a demand push and steep increase in raw material prices. Rising demand and steep rise in raw material prices may lead to 10-30% hike in prices repot said.

Auto stocks fell on profit taking. India's largest small car maker by sales Maruti Suzuki India fell 0.23%. Germany's Volkswagen and Suzuki Motor, Maruti Suzuki 's parent, reportedly plan to develop a new small car for the Indian market. Japan's Suzuki Motor said on Wednesday 9 December 2009 it will sell a 19.9% stake to Volkswagen (VW) for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry. Japan's Suzuki has a 54.2% stake in Maruti Suzuki India

Suzuki's chief told the media on Wednesday that the company will cooperate with VW in India by sharing common components. VW's chief Winterkorn said the firm will pursue synergies in India between Suzuki, Volkswagen, Skoda brands.

Maruti's total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.

India's largest motorcycle maker by sales Hero Honda Motors fell 0.24%. The company's total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.

India's top truck maker by sales Tata Motors fell 0.27% . As per recent reports the company is negotiating to acquire Japanese conglomerate Sumitomo's 53.5% stake in the Punjab-based auto firm Swaraj Mazda in a deal worth up to $54 million. Tata Motors' total sales zoomed 65.49% to 54,108 units in November 2009 over November 2008.

India's top tractor marker by sales Mahindra & Mahindra (M&M) fell 1%. Mahindra & Mahindra will reportedly launch its first truck under a joint venture (JV) with Navistar, North America's largest commercial truckmaker, next month. The company's domestic auto sales soared 105.1% to 21,387 units in November 2009 over November 2008. M&M sold a total of 22,587 vehicles (domestic plus exports) in November 2009 as against 11,515 vehicles sold in November 2008.

But, India's second largest bike maker by sales Bajaj Auto rose 5% after a leading foreign broker raised its rating on the stock to 'buy' from 'neutral', saying that demand for two-wheelers is growing. Bajaj Auto will reportedly stop producing scooters by March 2010 to focus on motorcycles.

Bajaj Auto on Wednesday 9 December 2009 launched a 135 cc Pulsar, pushing the Pulsar brand into the mass segment. Bajaj expects a sell a minimum 30,000 units per month of the new Pulsar model. The automaker had recently refreshed the entire Pulsar lineup and expects total Pulsar sales to cross 80,000 units per month.

The company's total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008. Motorcycles sales jumped 84% to 2.42 lakh units.

Car sales in India rose an annual 61% to 1,33,687 in November 2009 over November 2008, boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said on Tuesday. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data from the Society of Indian Automobile Manufacturers showed.

Cox and Kings (India) settled at Rs 426.05, a 29.11% premium over the initial public offer price of Rs 330. The Cox and Kings (India) stock debuted at Rs 304.10 (also its day's low so far), a 7.84% discount over its initial public offer price of Rs 330 per share.

Cals Refineries clocked highest volume of 1.88 crore shares on BSE. Cox & Kings (1.69 crore shares), FCS Software (1.37 crore shares), Unitech (0.92 crore shares) and Suzlon Energy (0.88 crore shares) were the other volume toppers in that order.

Cox & Kings clocked highest turnover of Rs 722.35 crore on BSE. Tata Steel (Rs 159.57 crore), State Bank of India (Rs 140.91 crore), DLF (Rs 97.58 crore) and Reliance Industries (Rs 87.41 crore) were the other turnover toppers in that order.