Monday, February 22, 2010
Today's major news
Shree Renuka Sugars buys 51% in Brazil’s sugar firm; the stock jumps 3.70%
Ambuja Cements plans capital expenditure; the stock slides 0.76%
Tantia Constructions builds on new order; the stock slips 0.36%
Emami to enter food and beverage sector; the stock closes 2.67% higher
Larsen & Toubro launches asset management operations; the stock rises 0.81%
European stocks fell on early trades, snapping five days of consecutive gains led by drug makers with GlaxoSmithKline hit by fresh criticism on its diabetes drug. At the time of writing this report, FTSE 100 was up 0.22%.
All the major Asian indices except Shanghai Composite closed positive. SGX Nifty closed 9 points higher.
US stock futures opened high on Monday pointing to a stronger start for Wall Street.
Bulls started off well, maintained the hold for two-third of the session but begin to gradually lose the hold after that on continued selling in consumer durable and realty stocks to finish the day marginally higher. The day’s high was 16423 and the low was 16191. At finishing line, the Sensex closed at 16237, 45 points higher. Nifty closed 11.50 points higher at 4856.
Despite ending high the advance/decline, the number of advancing shares to declining shares, was negative. Of the 2,907 stocks traded on the BSE, where only 906 stocks advanced, 1,924 stocks declined. Seventy-seven stocks closed unchanged
Sectoral & stock screening
Consumer durable and realty stocks played crucial role in pulling the market down with the BSE CD and BSE Realty down by 1.04% and 1.77% respectively. Information technology (IT) stocks had a good outing with the BSE IT up by 1.01%. The remaining sectors were either marginally up or down for the day.
On news of Shree Runuka Sugars acquiring 51% stake in Brazil’s sugar firm the former surged 3.70%, the most for any stock, followed by Hindalco Industries that increased 2.60% and Oriental Bank that rose 2.50%. Among losers, Chambal Fertilisers & Chemicals slipped the most by 5.64% that remained the highest loser in A group followed by Hindustan Copper that down by 4.90%.
Unitech, India’s second largest realty company, was the most actively traded share with over 6.63 crore shares changing hands on the BSE followed by wind power major Suzlon Energy (4.06 crore shares), India's biggest sugar refiner Shree Runuka sugars (3.69 crore shares), industrial finance company IFCI (2.58 crore shares) and Bajaj Holdings (2.48 crore shares).
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
22/2/2010 517041 Ador Welding SMART EQUITY BROKERS PRIVATE LIMITED B 70258 190.23
22/2/2010 517041 Ador Welding SANJEEV SINGHAL B 75862 193.47
22/2/2010 517041 Ador Welding OPG SECURITIES P LTD B 98330 193.05
22/2/2010 517041 Ador Welding OPG SECURITIES P LTD S 98330 192.96
22/2/2010 517041 Ador Welding SANJEEV SINGHAL S 75862 193.56
22/2/2010 517041 Ador Welding SMART EQUITY BROKERS PRIVATE LIMITED S 70258 189.92
22/2/2010 532975 Aishwarya Tele PRUDHVI RAJ KUMAR YADIKI S 58598 46.95
22/2/2010 532975 Aishwarya Tele NAGA MALLA REDDY CHOWDURY S 62860 46.95
22/2/2010 531681 Amradeep Inds PARVATI MINERALS PRIVATE LTD B 2702750 16.60
22/2/2010 531681 Amradeep Inds ANUKARAN COMMERCIAL ENTERPRISES LIMITED S 2702750 16.60
22/2/2010 500490 Bajaj Holdings RELIANCE CAPITAL TRUSTEE CO.LTD.A/C RELIANCE GROWTH FUND B 1164999 550.00
22/2/2010 500490 Bajaj Holdings KMUK A/C PREMIER INVESTMENT S 1550000 550.19
22/2/2010 531591 Bampsl Sec ASHOK KUMAR SONI B 415000 1.15
22/2/2010 531591 Bampsl Sec ANJU GUPTA B 515000 1.26
22/2/2010 531591 Bampsl Sec PRAKASH CHAND GUPTA B 495000 1.24
22/2/2010 531591 Bampsl Sec PRAKASH CHANDGUPTA S 377871 1.26
22/2/2010 531591 Bampsl Sec NAVAL KISHORE GUPTA S 1537333 1.15
22/2/2010 533108 BHILWRA TEC SHASHI AGARWAL B 625589 7.80
22/2/2010 533108 BHILWRA TEC SHEKHAR AGARWAL B 627868 7.79
22/2/2010 533108 BHILWRA TEC BHARAT INVESTMENTS GROWTH LTD S 310750 7.80
22/2/2010 531337 Channel Guide SUNIL CAPITAL S 42932 12.85
22/2/2010 532379 Firstobject Tech HITESH SHASHIKANT JHAVERI B 118237 35.90
22/2/2010 532379 Firstobject Tech HITESH SHASHIKANT JHAVERI S 121993 35.89
22/2/2010 514167 Ganesh Poly HIMADRI COMMODITIES PRIVATE LIMITED S 50000 40.19
22/2/2010 531439 Goldstone Tech KISHORE B CHAUHAN B 94250 38.48
22/2/2010 513059 GS Auto PRASHANT MAHADEV KAMBLE B 66872 58.47
22/2/2010 513059 GS Auto JIGESH AMRUTLAL HIRANI B 50000 58.58
22/2/2010 513059 GS Auto RITU MERCANTILES PVT LTD S 66706 58.68
22/2/2010 531979 Hind Aluminium Naman Securities & Finance Pvt. Ltd. B 25656 50.44
22/2/2010 531979 Hind Aluminium Naman Securities & Finance Pvt. Ltd. S 26656 50.20
22/2/2010 532717 Indo Tech Transf SMART EQUITY BROKERS PRIVATE LIMITED B 76367 328.23
22/2/2010 532717 Indo Tech Transf SMART EQUITY BROKERS PRIVATE LIMITED S 76367 328.39
22/2/2010 523467 Jai Mata Glass RAMIK RAINA S 103123 3.42
22/2/2010 524378 JMDE Pack NARESH CHANDJAIN B 30000 9.90
22/2/2010 523810 Kaleidoscope Films NITIN PUNMIYA S 596000 4.31
22/2/2010 530255 KAY Power BAMPSL SECURITIES LTD B 153399 18.24
22/2/2010 530255 KAY Power ANJALI KAUSHIK B 65900 17.77
22/2/2010 530255 KAY Power KAUSHALYA GARG B 162500 18.56
22/2/2010 530255 KAY Power GIRRAJ PRASAD GUPTA B 100750 18.23
22/2/2010 530255 KAY Power KAILASH CHAND GUPTA S 73857 17.65
22/2/2010 530255 KAY Power B.S.KHANDELWAL S 100000 17.42
22/2/2010 530255 KAY Power BAMPSL SECURITIES LTD S 259091 18.27
22/2/2010 531602 Koffee Break JIGNA SANJEEV SHAH B 433322 1.85
22/2/2010 531602 Koffee Break NIRMALABEN SURESHBHAI PARIKH S 413271 1.85
22/2/2010 524000 Magma Fin NILKANTH DEALERS PRIVATE LIMITED B 96670 230.44
22/2/2010 524000 Magma Fin TOP CLASS EDUCATION FACILITIES SERVICES PVT LTD B 100000 228.50
22/2/2010 524000 Magma Fin NILKANTH DEALERS PRIVATE LIMITED S 96670 229.14
22/2/2010 524000 Magma Fin MERRILL LYNCH CAPITAL MARKETS ESPANA SA SV S 132523 230.55
22/2/2010 531515 Mahan Inds ARUNABENRATILAL SHAH B 300000 5.55
22/2/2010 531515 Mahan Inds YOGENDRA KUMAR GUPTA S 500000 5.42
22/2/2010 506919 Makers Lab JASPREET SINGH B 31006 36.61
22/2/2010 506919 Makers Lab BINDU SHARMA B 30300 34.91
22/2/2010 506919 Makers Lab JASPREET SINGH S 31006 34.92
22/2/2010 506919 Makers Lab BINDU SHARMA S 30300 36.62
22/2/2010 531272 Nikki Global SOMPRAKASH GOENKA B 29325 70.28
22/2/2010 532986 Niraj Cement JANAK CHIMANLAL THACKER B 65104 57.79
22/2/2010 532986 Niraj Cement RAVI BRIJKISHORE SAXENA B 70000 58.08
22/2/2010 532986 Niraj Cement HARSHVARDHAN JAIN S 52602 57.48
22/2/2010 531996 Odyssey Corp EFORCE INDIA PRIVATE LIMITED S 66500 70.20
22/2/2010 531496 Omkar Overseas PRANALI COMMODITIES PVT.LTD B 32000 51.17
22/2/2010 531496 Omkar Overseas VISHAL M RAMNANI B 60000 52.36
22/2/2010 531496 Omkar Overseas BHUTIYA HITESH KANABHAI B 58000 52.38
22/2/2010 531496 Omkar Overseas HEMANT RAJENDRABHAI SHAH B 25000 51.15
22/2/2010 531496 Omkar Overseas S N INVESTMENT B 30000 51.25
22/2/2010 531496 Omkar Overseas KARANDIPAKBHAI SHAH B 25000 51.54
22/2/2010 531496 Omkar Overseas DINESHKUMAR RAMCHANDRA PANDEY S 25000 52.40
22/2/2010 531496 Omkar Overseas VICKY RAJESH JHAVERI S 28000 52.50
22/2/2010 531496 Omkar Overseas PATHIK NAYANBHAI SHAH S 41000 51.55
22/2/2010 531496 Omkar Overseas HEMANT RAJENDRABHAI SHAH S 25000 51.20
22/2/2010 531496 Omkar Overseas PRANALI COMMODITIES PVT.LTD S 25000 51.15
22/2/2010 531496 Omkar Overseas JHAVERI TRADING AND S 32000 52.45
22/2/2010 512097 Oregon Comm PATEL SHAILESH JIVANLAL B 51600 168.50
22/2/2010 512097 Oregon Comm HITESH PREMJI PATEL B 7000 166.48
22/2/2010 512097 Oregon Comm KRUPA SANJAY SONI B 11318 168.56
22/2/2010 512097 Oregon Comm J M SONI CONSULTANCY B 4950 161.73
22/2/2010 512097 Oregon Comm KRUNAL GOPALDAS RANA B 4903 166.31
22/2/2010 512097 Oregon Comm KRUPA SANJAY SONI B 38817 167.09
22/2/2010 512097 Oregon Comm BHAVIKA MAHESH VIRWANI B 6000 166.00
22/2/2010 512097 Oregon Comm NARESH CHANDJAIN B 4803 168.49
22/2/2010 512097 Oregon Comm AXIOM CAPITAL ADVISORS PRIVATE LIMITED B 5347 168.32
22/2/2010 512097 Oregon Comm MUKTI MEHULKUMAR SANCHETI B 10500 168.57
22/2/2010 512097 Oregon Comm MEHUL SHANTILAL SANCHETI B 16000 170.00
22/2/2010 512097 Oregon Comm HIRALBEN LALITBHAI THAKKAR B 5000 167.50
22/2/2010 512097 Oregon Comm OMPARKASH GUPTA B 9610 169.17
22/2/2010 512097 Oregon Comm CHITTALIYA GEETABENJI GNESH B 6000 160.50
22/2/2010 512097 Oregon Comm KRUNAL GOPALDAS RANA B 6206 169.91
22/2/2010 512097 Oregon Comm AMUL GAGABHAI DESAI B 5353 169.78
22/2/2010 512097 Oregon Comm PREMILABEN MAHENDRAKUMAR SHAH B 6000 160.50
22/2/2010 512097 Oregon Comm NEHALBHAI PRATAPBHAI RATHOD B 5051 166.63
22/2/2010 512097 Oregon Comm NEHALBHAI PRATAPBHAI RATHOD S 5051 166.80
22/2/2010 512097 Oregon Comm OMPARKASH GUPTA S 7110 168.66
22/2/2010 512097 Oregon Comm AXIOM CAPITAL ADVISORS PRIVATE LIMITED S 5347 163.49
22/2/2010 512097 Oregon Comm MEHUL SHANTILAL SANCHETI S 14500 160.00
22/2/2010 512097 Oregon Comm HIRALBEN LALITBHAI THAKKAR S 5000 168.56
22/2/2010 512097 Oregon Comm NARESH CHANDJAIN S 4803 168.93
22/2/2010 512097 Oregon Comm MUKTI MEHULKUMAR SANCHETI S 10500 160.00
22/2/2010 512097 Oregon Comm CHANDRAKANT PRANJI VANVORA S 10000 169.00
22/2/2010 512097 Oregon Comm KRUPA SANJAY SONI S 34705 164.77
22/2/2010 512097 Oregon Comm KRUPA SANJAY SONI S 16056 167.04
22/2/2010 512097 Oregon Comm J M SONI CONSULTANCY S 4950 166.49
22/2/2010 512097 Oregon Comm SANJAY JETHALAL SONI S 4963 167.47
22/2/2010 512097 Oregon Comm PATEL SHAILESH JIVANLAL S 28100 161.07
22/2/2010 513121 Oricon Enter SUMEET BALDEVS CHOPRA B 75000 355.00
22/2/2010 513121 Oricon Enter SINGHI ASSOCIATES S 52000 354.66
22/2/2010 511652 Ram Kaashyap SUNDARAM SWAMINATHAN S 52000 15.30
22/2/2010 502587 Rama Pulp MAHIPAT IWDARMAL MEHTA B 1264831 32.90
22/2/2010 502587 Rama Pulp HARPREET SINGH B 179651 32.80
22/2/2010 502587 Rama Pulp VARUN KUMAR B 52002 32.81
22/2/2010 502587 Rama Pulp MOHIT KAPOOR B 113756 32.81
22/2/2010 502587 Rama Pulp RAJNEESH KANT SHRIVASTAVA B 223852 32.80
22/2/2010 502587 Rama Pulp OMPARKASH GUPTA B 201169 32.80
22/2/2010 502587 Rama Pulp SUMAN GUPTA B 447000 32.80
22/2/2010 502587 Rama Pulp OMPARKASH GUPTA S 201169 32.92
22/2/2010 502587 Rama Pulp SUMAN GUPTA S 447000 32.90
22/2/2010 502587 Rama Pulp RAJNEESH KANT SHRIVASTAVA S 223852 32.88
22/2/2010 502587 Rama Pulp MOHIT KAPOOR S 113756 32.89
22/2/2010 502587 Rama Pulp VARUN KUMAR S 52002 32.90
22/2/2010 502587 Rama Pulp HARPREET SINGH S 179651 32.90
22/2/2010 502587 Rama Pulp MAHIPAT IWDARMAL MEHTA S 1247206 32.80
22/2/2010 590077 Ranklin Sol DEEPAK KUMAR VYAS S 25860 56.10
22/2/2010 526723 RDB Inds PANCHAM VANIJYA PVT LTD. S 168000 112.13
22/2/2010 526723 RDB Inds PARAMDHAM MERCANTILE PVT. LTD. S 282000 110.42
22/2/2010 530271 Rich Capital SCOPE VYAPAR PRIVATE LIMITED B 88060 70.60
22/2/2010 530271 Rich Capital SELECT PRODUCTS P LTD S 38000 70.61
22/2/2010 530271 Rich Capital MACRO EQUICOM S 50000 70.60
22/2/2010 500368 Ruchi Soya AIWO LIMITED B 2000000 95.00
22/2/2010 500368 Ruchi Soya DHANANJAYA MONEY MANAGEMENT SERVICES PVT LTD S 1292996 95.01
22/2/2010 531569 Sanjivani Par BHUSHAN SARKAR B 88823 40.19
22/2/2010 531569 Sanjivani Par KESHAW PATWARI B 31000 38.31
22/2/2010 526510 Shakti Metdor SUDHIR CHANDA B 24900 173.70
22/2/2010 526510 Shakti Metdor MAMIDIPUDI VENKATA RAMAMOHAN S 15000 173.63
22/2/2010 530651 Softech Inf NILESH EKNATH BHOIR S 23500 93.34
22/2/2010 532447 Solvay Pharma East Sail A/c MEP/Pari Washington S 28121 2840.72
22/2/2010 502465 Speciality Pap SANDIP RASIKLAL SHAH HUF B 50000 22.88
22/2/2010 502465 Speciality Pap AMAR MUKESHKUMAR SHAH S 50000 22.89
22/2/2010 533157 SYNCOM HEAL MAVI INVESTMENT FUND LIMITED S 240990 80.50
22/2/2010 533158 THANGAMAYIL BHARAT SECURITIES PVT LTD B 81124 70.10
22/2/2010 533158 THANGAMAYIL BHARAT SECURITIES PVT LTD S 81124 70.19
22/2/2010 532966 Titagarh Wag GENUINE STOCK BROKERS PVT. LTD. B 98678 412.28
22/2/2010 532966 Titagarh Wag SMART EQUITY BROKERS PRIVATE LIMITED B 221132 415.30
22/2/2010 532966 Titagarh Wag SMART EQUITY BROKERS PRIVATE LIMITED S 221132 415.67
22/2/2010 532966 Titagarh Wag GENUINE STOCK BROKERS PVT. LTD. S 98678 412.66
22/2/2010 531574 VAS Infra AJMERA SHARES TRADING PVT LTD B 125000 59.31
22/2/2010 531574 VAS Infra AJMERA SHARES TRADING PRIVATE LIMITED B 75001 60.24
22/2/2010 531574 VAS Infra RAJESH GOPAL KRISHNA RATHI B 160000 60.73
22/2/2010 531574 VAS Infra VASPARR SHELTER LTD S 189000 60.70
22/2/2010 531574 VAS Infra SANGITA JAYESH VALIA S 161000 59.55
22/2/2010 530477 Vikram Thermo RAMESH CHIMANLAL SHAH S 14939 18.01
22/2/2010 531249 Well Pack Papers MAYANK N GANDHI B 25631 442.33
22/2/2010 531249 Well Pack Papers ADITI M GANDHI B 26499 441.87
22/2/2010 531249 Well Pack Papers SHOBHNABEN R PARMAR B 27732 441.85
22/2/2010 531249 Well Pack Papers LAXMAN DHIRUBHAI PARMAR B 22803 442.35
22/2/2010 531364 Zenu Infotech EMMA AUTO ANCILLARY PRIVATE LTD S 27000 41.27
* B - Buy, S - Sell
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
22-FEB-2010,INOXLEISUR,INOX Leisure Limited,BLUE PEACOCK SECURITIES PVT LT,BUY,397669,76.70,-
22-FEB-2010,RUCHISOYA,Ruchi Soya Inds Ltd.,AIWO LIMITED,BUY,2000000,95.05,-
22-FEB-2010,THANGAMAYL,Thangamayil Jewellery Ltd,BHARAT SECURITIES PVT LTD,BUY,113220,70.11,-
22-FEB-2010,THANGAMAYL,Thangamayil Jewellery Ltd,TEAM INDIA MANAGERS LIMITED,BUY,34789,69.00,-
22-FEB-2010,TWL,Titagarh Wagons Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,123336,414.53,-
22-FEB-2010,TWL,Titagarh Wagons Limited,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,135252,417.54,-
22-FEB-2010,AUSTRAL,Austral Coke & Projects L,SICOM LTD,SELL,4764419,6.47,-
22-FEB-2010,INOXLEISUR,INOX Leisure Limited,BLUE PEACOCK SECURITIES PVT LT,SELL,334111,74.95,-
22-FEB-2010,SYNCOM,Syncom Healthcare Ltd,MAVI INVESTMENT FUND LTD,SELL,250000,80.50,-
22-FEB-2010,THANGAMAYL,Thangamayil Jewellery Ltd,BHARAT SECURITIES PVT LTD,SELL,113220,70.24,-
22-FEB-2010,THANGAMAYL,Thangamayil Jewellery Ltd,TEAM INDIA MANAGERS LIMITED,SELL,192062,70.21,-
22-FEB-2010,THINKSOFT,Thinksoft Global Ser Ltd,MANAN AJAYBHAI SHAH,SELL,71149,258.73,-
22-FEB-2010,TWL,Titagarh Wagons Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,123336,414.97,-
22-FEB-2010,TWL,Titagarh Wagons Limited,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,136552,418.56,-
The Key benchmark indices erased almost all the gains after an early rally as investors turned cautions ahead of the Union Budget 2010-2011 later this week. The market closed with small gains snapping last two days losses. The BSE 30-share Sensex rose 45.42 points or 0.28%, off close to 185 points from the day's high. Index heavyweights Reliance Industries (RIL) reversed early gains. Consumer durables and realty stocks fell. But rising metal prices on the London Metal Exchange on Friday, 19 February 2010 boosted local metal shares. IT shares also rose. The market breadth was weak. European stocks fell.
After a firm start triggered by higher Asian stocks, the market pared gains in morning trade. It regained strength in mid-morning trade. The Sensex moved in a narrow range in early afternoon trade. The market once again pared gains in mid-afternoon trade. The market cut almost all the intraday gains in late trade.
India VIX, a volatility index based on the S&P CNX Nifty index option prices, rose 0.72% to 32.13. The index had risen sharply on Friday, 19 February 2010. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. Volatility typically rises ahead of a major event such as the Union Budget etc. The government unveils Union Budget 2010-2011 on Friday, 26 February 2010.
European shares fell on Monday, snapping five consecutive days of gains, led by drugmakers, with GlaxoSmithKline hit by fresh criticism on its diabetes drug Avandia. The key benchmark indices in France and Germany fell by between 0.18% to 0.24%. UK's FTSE 100 rose 0.1%.
Greece is prepared to take additional fiscal measures to ensure it meets its deficit cutting targets, the head of the country's central bank said on Monday. European Union (EU) leaders have given vague assurances of support to Greece in its struggle to stop a debt crisis but it is unclear exactly what action they will take and the EU has told Athens it may need to take further steps itself.
Asian stocks gained on Monday after a smaller-than-estimated increase in US consumer prices eased concern the Federal Reserve will increase interest rates. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.01% to 2.74%. However China's Shanghai Composite index slipped 0.49%.
Trading in US index futures indicated that the Dow could gain 16 points at the opening bell on Monday, 22 February 2010
US stocks closed higher after a see-saw session on Friday, 19 February 2010 as investors weighed the Federal Reserve decision late Thursday to raise its discount rate for banks by 25 basis point to 0.75%. The Dow Jones industrial average closed up 9.45 points, or 0.09 percent, at 10,402.35. The Standard & Poor's 500 Index was up 2.42 points, or 0.22 percent, at 1,109.17. The Nasdaq Composite Index was up 2.16 points, or 0.10 percent, at 2,243.87.
A government report showed an index of US consumer prices rose 0.2% in January from the previous month, less than the 0.3% projected by economists. New York Federal Reserve President William Dudley indicated on Friday that policy makers are more concerned about maintaining growth than fighting inflation, citing the consumer price data.
Closer home, President Pratibha Patil said on Monday that India's economic growth will accelerate in the coming years after the global downturn. She said the government will push policies to protect millions of poor Indians from the impact of food inflation
The President said economic growth will rise to about 7.5% in the year ending March 2010. Addressing a joint session of the parliament at the onset of the Budget session, Patil said the government is aiming for 8% growth in the year ending March 2011 (FY 2011) and 9% growth in the year ending March 2012 (FY 2012).
She said the government will focus on infrastructure, health, education, and agriculture development. Patil said rising rural incomes and high state-purchase prices have helped stoke food inflation.
Patil said government accords highest importance to helping the common man on food prices. Patil added higher agricultural productivity, reforms in the public distribution system and open market intervention are needed for ensuring food security. The president's speech to the joint session of parliament lays down the government's priorities for the year.
The market is likely to remain highly volatile this week with the focus being on the Railway Budget and the Union Budget 2010-11. Derivatives expiry on Thursday, 25 February 2010 is also likely to add volatility on the bourses.
The highly eventful week begins with the Railway Budget on 24 February 2010. It will be followed by tabling of Economic Survey on 25 February 2010 and the Union Budget on 26 February 2010.
As far as railway budget is concerned, the Railway minister Mamata Banerjee is likely to present a populist budget leaving passenger fares untouched, but rationalise the freight rates of certain commodities like iron ore, coal and cement. Banerjee is unlikely to tinker with the freight rates of essential commodities including food grains.
As far the Union Budget 2010-2011 is concerned, the government may announce increase in excise duties as a first step towards a gradual winding down of fiscal stimulus measures. It may also raise the service tax rate to 12% from 10%. It may be recalled that the government had slashed the Central Value Added Tax (Cenvat) rate for excise duty from 14% to 8% in two rounds starting in December 2008. It had also cut service tax by 2 percentage points. These reductions were effected in order to provide a stimulus to domestic industry. Since the overall prospects for growth are much brighter today, the finance minister may withdraw a part of the stimulus in order to boost tax revenue.
The Finance Minster may project a lower fiscal deficit for 2010-11 based on higher revenue projections due to economic rebound. It remains to be seen if there are structural reforms to reduce the subsidy burden such as decontrol of petrol and diesel prices as recommended by the Kirit Parikh committee recently.
The fate of three important fiscal bills, which had been stalled by the Left parties, will be closely watched. These are the Pension Fund Regulatory and Development Authority (PFRDA) Bill, Insurance Bill and Banking Regulation (Amendment) Bill.
Meanwhile, the recommendations of the 13th Finance Commission will be tabled in the parliament on 25 February 2010, just a day ahead of the budget. Analysts and economists expect the Finance Minister to provide a road map for the introduction of the key direct and indirect tax reforms viz. the direct tax code (DTC) and the Goods & Services Tax (GST) in the Budget.
As far as government expenditure is concerned, the thrust areas could be agriculture, water resources, power, roads & other infrastructure projects and social sector schemes.
Chairman of the Economic Advisory Council to the Prime Minister and former Reserve Bank governor C. Rangarajan, on Friday said it would take up to three months for soaring food prices to ease even with imports. Farm minister Sharad Pawar has repeatedly said the food situation was under control, helped by government measures such as easier imports and restrictions on stocks.
The government should begin to lower its fiscal deficit in the budget set to be announced this week but should not cut capital spending on infrastructure, the prime minister's economic advisory council said in a report released on Friday. The panel also projected economic growth of at least 8.2% in 2010/11, from over 7.2 % forecast for the current fiscal year. The fiscal deficit, running at a 16-year high of 6.8% of GDP this year, threatens to push up long-term market interest rates and constrain the setting of monetary policy, the prime minister's economic advisory council said. The panel also warned about the spread of food price inflation to the broader economy.
Meanwhile, the follow-on public offer of Rural Electrification Corporation (REC) was subscribed 53% by 16:00 IST on the second day of the bidding for the IPO today, 22 February 2010, NSE data showed. The government has set the floor price of the follow-on public offer of Rural Electrification Corporation (REC) at Rs 203 per share. The issue, which is open till 23 February 2010, will see the sale of 12.87 crore equity shares and an offer for sale of 4.29 crore government owned shares.
The BSE 30-share Sensex rose 45.42 points or 0.28% to 16,237.05. The barometer index rose 231.60 points at the day's high of 16,423.23 in early trade. The Sensex fell 0.31 points at the day's low of 16,191.32 in early trade.
The S&P CNX Nifty rose 11.50 points or 0.24% to 4856.40.
The market breadth, indicating the overall health of the market was weak. The breadth was strong earlier in the day. On BSE, 898 shares advanced as compared with 1913 that declined. A total of 73 shares remained unchanged.
From the 30 share Sensex pack, 18 rose while rest of the stocks declined.
The BSE Mid-Cap index fell 0.59% and the BSE Small-Cap index fell 1.05%. Both the indices underperformed the Sensex.
The BSE IT index (up 1.01%), BSE Metal index (up 0.68%), outperformed the Sensex. The BSE Realty index (down 1.77%), BSE BSE Consumer Durables index (down 1.04%), BSE Healthcare index (down 0.68%), BSE PSU index (down 0.46%), BSE Oil & Gas index (down 0.24%), BSE Power index (down 0.2%), BSE FMCG index (down 0.07%), BSE Capital Goods index (up 0.05%), BSE Bankex (up 0.06%), BSE Auto index (up 0.12%), underperformed the Sensex.
BSE clocked a turnover of Rs 3411 crore, lower than Rs 3833 crore on Friday, 19 February 2010.
Index heavyweight Reliance Industries (RIL) fell 0.54% to Rs 978.90, with the stock declining for the third straight day. The stock came off the day's high of Rs 1000. As per reports, RIL will raise its offer for bankrupt petrochemicals maker LyondellBasell to about $14.5 billion. Reliance, had previously offered a deal that valued Lyondell at $13.5 billion. Lyondell recently settled a dispute with creditors that paved the way for its exit from bankruptcy.
Meanwhile, industry watchers opine that the finance minister may give infrastructure status to the oil & gas sector to promote investments with tax sops in the coming budget. There may be tax benefits for city gas distribution and extension in tax holiday for new refineries. He may also announce declared goods status to the natural gas. The finance minister may abolish service tax on exploration and production activities.
Rate sensitive banking shares rose after the central bank said recently it will introduce from 1 April 2010 a new base rate to price credit more transparently, replacing the existing benchmark prime lending rate (BPLR). India's largest private sector bank by net profit ICICI Bank rose 0.14%. India's largest bank by net profit and branch network State Bank of India rose 0.51%.
But, India's largest private sector bank by operating income HDFC Bank fell 0.14% after the bank increased fixed deposit (FD) rates across nine maturities by 25-150 basis points. The stock came off the day's high of Rs 1692. The rate hike comes three weeks after the third-quarter monetary policy review of the Reserve Bank of India (RBI), when the central bank increased the cash Reserve ratio by 75 basis points. In a rising rate scenario, where the credit growth is expected to improve in the coming quarters, the bank has decided to align its deposit rates with the market.
The Reserve Bank of India said the base rate will be the new reference rate for determining lending rates. According to draft guidelines, the RBI has proposed that the actual lending rate charged to borrowers would be the base rate plus borrower-specific charges including product-specific operating cost, credit-risk premium and tenure premium said.
The Reserve Bank on Friday 19 February 2010 slashed the maximum interest rate banks can charge on foreign currency loans extended to exporters to 200 basis points above global benchmark benchmark Libor, a move to boost sagging exports.
For the banking sector, industry watchers expect relaxation in the lock-in period for fixed deposits - from five to three years - to qualify for tax benefits under Sec.80C. There might be an increase in the (Foreign Direct Investment) FDI in insurance sector from 26% to 49%. Expectations are also that the finance minister will allow banks to raise tax-free infrastructure funds.
Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.87% on Friday, 19 February 2010. Hindalco Industries, Sterlite Industries, Steel Authority of India, National Aluminum Company, Hindustan Zinc , Jindal Steel & Power, JSW Steel rose by between 0.15% to 2.6%.
Tata Steel, the world's number 8 steelmaker by capacity rose 1.68%. Tata Steel last week posted its first consolidated quarterly profit in four quarters and said reviving global demand would further boost earnings in the three months to March 2010. Tata Steel said its consolidated net profit for the December 2009 quarter, which includes its UK unit Corus, fell 42%, although higher prices and increased volumes led to a rise in its operating profit margins.
Tata Steel said its consolidated net profit in the October-December period fell to Rs 473 crore from Rs 814 crore last year. Revenue fell 20% to Rs 26,069 crore.
Industry watchers expect that in the coming budget there may be an increase in excise duty cut to 10% from current 8%. There might be no change in customs duty structure. There may also be a removal of the 5% import duty on stainless steel and alloy steel scraps.
Software majors rose on positive economic data in the US. US is the biggest export market for Indian IT firms. India's second largest IT exporter by sales TCS rose 0.73%. India's largest IT exporter by sales Infosys Technologies rose 1.53%. India's third largest IT exporter by sales Wipro rose 0.23%.
Tata Consultancy Services (TCS) and Wipro are reportedly among the 37 global organisations, including IBM and HP, vying for the UK government's cloud computing project. Out of the total project, the cloud component alone is valued at Rs 2,200 crore.
The IT sector is looking for an extension of the tax holiday for the Software Technology Park of India (STPI) scheme. The government provides tax benefits under Section 10 (A) of Income Tax Act for units set up in the Software Technology Parks of India (STPIs), which is due to expire on 31 March 2011 (FY 2011). If the scheme is extended by one more year till 31 March 2012 (FY 2012), it will boost projected FY 2012 earnings of IT firms
Rate sensitive realty shares reversed early gains on worries the central bank may hike interest rates to tame inflation. Indiabulls Real Estate, Sobha Developers, Housing Development & Infrastructure, Omaxe, Orbit Corporation, Unitech, Ansal Properties and Infrastructure and DLF fell by between 0.55% to 2.74%.
Unitech and DLF would be the chief beneficiaries if the government providers thrust to affordable housing projects in the Union Budget 2010-11 next week.
Industry watchers expect that in the coming budget finance minister may increase priority sector housing loans to Rs 30 lakh from existing Rs 20 lakh. There may be a greater thrust on public private partnership (PPP) projects in housing. There may be an increase in allotment to the Rajiv Gandhi Awas Yojana (slum rehabilitation programme). Increase in tax breaks provided to housing finance and infrastructure lending companies is also expected. There may be a re-introduction of tax holiday for housing projects under Sec 80 IB (10). The increase in income tax deduction under Sec 80 C on home loan principal re-payment from Rs 1 lakh to Rs 2- 3 lakh is also expected.
Consumer durable stocks fell on profit taking. Asian Star Company, Titan Industries, Videocon Industries and Blue Star fell by between 0.01% to 2.62%.
Some infrastructure stocks gained on speculation of higher spending likely to be announced in the upcoming Union Budget 2010-2011. Jaiprakash Associates, Punj Lloyd industan Construction Company and Gayatri Projects rose by between 0.39% to 1.36%.
Some FMCG stocks rose on bargain hunting. Britannia Industries, Hindustan Unilever, Tata Tea rose by between 0.09% to 1.68%.
Excise duty on fast moving consumer goods (FMCG) is expected to go up by 200-300 basis points in the 2010-11 Budget. Higher excise duty may result in margin pressure on some companies. Companies may resort to price hikes with a lag of one or two quarters. Firms such as Dabur India, Godrej Consumer Products and Marico will be relatively less impacted as they do have production units in excise-exempt locations.
India's largest power utility firm by sales NTPC rose 0.25%. The company's follow on public offer managed to scrape through early this month with the issue getting subscribed 1.2 times. The issue, through which the government is divesting 5% of its stake, at a floor price of Rs 201 a share, opened on 3 February 2010 and closed on 5 February 2010. At the floor price, the follow-on-public offer (FPO) is valued at Rs 8,286 crore.
Among other power stocks, Torrent Power, Tata Power Company, CESC rose by between 0.14% to 1.14%.
The Budget expectations for the power sector include extension of income tax exemption for mega power generation projects. Among other expectations are an increase in the allocation towards the government-led electrical infrastructure augmentation schemes viz. Rajeev Gandhi Grameen Viyuktikaran Yojana (RGGVY) and Restructured Acclerated Power Development and Reforms Programme (R-APDRP) and reduction of import duty on thermal coal.
India's largest drug maker by sales Ranbaxy Laboratories fell 0.2%. Daiichi Sankyo recently said it will launch new innovative products in Mexico through the marketing division of Ranbaxy's Mexican subsidiary Ranbaxy Mexico.
Among other healthcare stocks. Dr Reddy's Laboratories, Biocon, Divi's Laboratories, Lupin, Pfizer, Cipla fell by between 0.28% to 1.98%.
In the upcoming budget, the industry watchers expect that the 150% weighted deduction enjoyed by in-house R&D expenses should be extended to expenses on outsourced studies such as clinical trials and specific laboratory studies. The weighted deduction should also be raised to 200%. State excise duty on certain formulations should be cut to 8% from present 16%. Central excise duty on drugs should to be restored to 8% from the present 4%. Among other demand of the industry include, a substantial increase in allocation for the National Rural Health Mission programme.
India's largest power equipment maker by sale Bharat Heavy Electricals (Bhel) fell 0.33%. Among other capital goods stocks, Siemens, Praj Industries, BEML, ABB, Thermax fell by between 0.27% to 3%.
But, India's largest engineering and construction firm by sales Larsen & Toubro rose 0.81%. The company said recently it won orders worth Rs 582 crore.
The government may levy customs duty on import of equipment for power projects in Union Budget 2010-11, which may give a fillip to domestic manufacturers of boilers, turbines and generators. The levy of import duty on equipment for power projects will benefit companies such as Bhel and L&T.
Rate sensitive auto shares were mixed. India's biggest tractor maker by sales Mahindra & Mahindra (M&M) fell 0.6%.
But, India's largest commercial vehicle maker by sales Tata Motors rose 1.01%. Tata Motors said recently it will hike commercial vehicle prices by up to 2% on account of new emission norms. The company also announced plans of bidding for a Rs 350-crore defense contract to supply light bullet-proof vehicles.
The company said recently its global vehicle sales for January nearly doubled to 85,714 units from a year earlier. The sales include UK-based luxury brands Jaguar and Land Rover, whose sales nearly trebled in the month to 16,269 units from a year ago, the company said in a statement. It had earlier said domestic sales, including trucks, buses and cars, jumped an annual 77 % in January.
India's largest car maker by sales Maruti Suzuki India rose 0.83% gaining for the second straight day. A senior official of the company said last week the firm will add 3,000 employees in the next three years. Maruti Suzuki's head of human resources, S.Y.Siddiqui was quoted by the media as saying that the company is also investing Rs 200 crore to add showrooms and stockyards.
The government is widely expected to raise excise duties on automobiles in Union Budget 2010-2011 this week. A hike in excise duty will raise the cost of owning new vehicles. Coupled with the recent price hikes across segments, and the price increases likely in April 2010 on account of the change in emission norms, these potential price increases on excise duty increase may dampen demand.
On the flip side, bus makers Ashok Leyland and Tata Motors may benefit in case of further allocation of government expenditure towards the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in the Union Budget 2010-11. Bus demand has been boosted this year by an order for 15,000 buses under JNNURM
Telecom stocks fell even as the government said it will kickstart in a week its long-pending 3G spectrum auction process by issuing notice inviting applications from bidders. India's largest mobile services operator by sales Bharti Airtel fell 0.5% reversing early gains after a Kuwaiti newspaper reported on Sunday that telecoms firm Zain and Bharti Airtel are expected to sign a letter of intent for the $9 billion African assets deal this week.
Bharti is in exclusive talks until 25 March 2010 to buy Zain's African business, excluding Morocco and Sudan. It is the Indian firm's third attempt at gaining a foothold in a continent that offers a last opportunity for major subscriber growth. India's second largest mobile services operator by sales Reliance Communications fell 0.87%.
Cals Refineries clocked the highest volume of 2.01 crore shares on BSE. Unitech (66.35 lakh shares), Greenearth Resources (52.5 lakh shares), Inox Leisure (47.37 lakh shares) and Ruchi Soya Industries (42.46 lakh shares) were the other volume toppers in that order.
Bajaj Holdings clocked the highest turnover of Rs 140.51 crore on BSE. State Bank of India (Rs 106.06 crore), Titagarh Wagons (Rs 89.7 crore), Shree Renuka Sugars (Rs 68.8 crore) and Tata Steel (Rs 67.43 lakh shares) were the other turnover toppers in that order.
Nikkei, Hang Seng, Seoul, Sydney finish higher whereas Shanghai bucks regional trend
Stock markets in Asian region started a week on a positive note on Monday, 22 February 2010, as investors looked past the Federal Reserve’s discount rate hike to signs of strength in the US economy. The key benchmark indices in Japan, Hong Kong, Australia were up by 1 to 2%.
On Wall Street, stocks finished with small gains Friday, as investors digested the Federal Reserve’s surprise discount rate hike amid tepid inflation data. The Dow Jones Industrial Average, which traded as much as 40 points lower earlier, added 9 points, or 0.1%, to 10,402 by the closing bell. The S&P 500 went ahead by 2 points, or 0.2%, at 1109, while the Nasdaq gained 2 points, or 0.1%, at 2244. Each of the major averages tracked higher for the week, led by the S&P 500's 3.1% advance. The Dow gained 3%, while the Nasdaq improved 2.8% since last Friday's close.
On the economic front, the consumer price index’s release before the bell took an edge off concerns of imminent tightening. CPI, the price of goods and services purchased by consumers and a closely watched inflation gauge, edged just higher at 0.2% in January. The Labor Department also said its core rate, which strips out food and energy costs, actually showed a decline of 0.1%, while core CPI was projected to show a 0.1% up tick.
In the commodity market, crude oil rose for a fifth day in New York on speculation energy demand will increase as the global economy recovers from its worst recession since World War II.
Crude oil for March delivery rose as much as 70 cents, or 0.9%, to $80.51 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.11 at 4:13 p.m. in Singapore.
Brent crude for April delivery rose as much as 75 cents, or 1%, to $78.94 a barrel on the London-based ICE Futures Europe exchange, and was at $78.46 at 4:16 p.m. Singapore time. It climbed 0.5% to $78.19 on 19 February 2010, the highest settlement price since 13 January 2010.
Gold climbed for a third day, advancing to a one-month high as the dollar’s rally slowed, increasing the metal’s appeal as an alternative investment. Gold for immediate delivery gained as much as 1.1% to $1,131 an ounce, the highest since 20 January 2010, and traded at $1,124.82 at 1:31 p.m. in Singapore. Gold for April delivery in New York advanced 0.3% to $1,125.50 an ounce.
In the currency market, market sentiment got a lift after a German magazine reported that Germany's finance ministry had sketched out a plan to give troubled Greece between 20-25 billion euros of loans or guarantees, with Euro zone countries sharing the costs. That helped to assuage investor fears about a possible default by Greece and in turn boosted demand for riskier assets.
The Japanese yen was softened against major counterparts on Monday as gains in Asian stocks damped demand for the Japanese currency as a refuge. The Japan’s currency yen was quoted at 91.55 against the greenback.
The Hong Kong dollar was trading at HK$ 7.7642 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trades, the Australian dollar was trading higher against the US dollar, helped by firm commodity and stock prices and a genial mood in the market. At the local close, the dollar was trading at $US0.9006 in late trade, up from $US0.8902 on Friday.
In Wellington trades, the New Zealand dollar rose slightly today as the US dollar retreated from recent highs. The NZ dollar was US70.26c at 5 pm from US70.12c at 8 am and US69.61c at 5 pm on Friday.
The South Korean won ended at 1,147 won to the greenback, up 13.3 won from Friday’s close of 1,160.30.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.0200, 0.0080 up from last trading day’s close of NT$32.1000.
In equities, Asian shares markets rose Monday, with the Japanese market getting a lift from exporters on the back of a fall in the yen.
In Japan, the key indices maintained momentum through the afternoon, finishing the day above the line. The result came despite a relatively flat lead in from international markets, with the materials and resources and energy showed strength and the banks bolstered gains. The market gains were broad based as investors digested the US Federal Reserve’s abrupt interest rate rise, the dollar firmness against yen, and stronger commodity prices. Gains were also boosted on expectation US Fed will not rush in raising interest rate sooner after lesser than expected rise in US consumer prices.
At the settlement Monday, the Nikkei 225 Stock Average index was at 10,400.47, climbed up 276.89 points, or 2.74%. The broader Topix of all First Section issues on the Tokyo Stock Exchange rose 20.67 points, or 2.32%, to 909.75.
In Mainland China, the share market finished the session lower on the first trading day after the Chinese Lunar New Year holiday, with key Shanghai index hover around psychologically-important 3000 level, on lingering concerns over possible further economy-cooling measures near term. Participant’s sentiments were also weak on cautious ahead of the legislative meeting, in which new policy changes may affect their investment decisions. Losses were broad based, with telecommunication sector led declines, and followed by financials and energy sectors.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, eased 14.74 points, or 0.49%, to 3,003.39, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange slid 91.24 points, or 0.74%, to 12,213.54. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 0.55%, to 3,233.34.
In economic section, the China Petroleum & Chemical Industry Association said today that China processed 29% more crude oil to 30.14 million metric tons while oil-product output increased 24% to 18.59 million tons in January than a year earlier as the economic recovery spurred demand.
In Hong Kong, stock markets bounced back from one-week lows along with a steady start in Shanghai markets after a week-long break boosted investor appetite for battered banking stocks. The benchmark Hang Seng Index ended up 2.43% or 483.25 points at 20,377.27, posting its biggest one-day percentage gain in more than two months. The Hang Seng China Enterprises Index, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, closed up 2.27%or 255.73 points at 11,519.56.
In Australia, the shares maintain initial gains throughout the afternoon, finishing the day above the line, with broad based gains across the sectors on tracking positive cues from Asian stocks and US index future indicated higher opening today, and as generally upbeat earnings results and upbeat guidance from blue chips companies. At the settlement Monday, the benchmark S&P/ASX200 index has gained 82.40 points, or 1.78%, to 4,717.50, meanwhile the broader All Ordinaries raised 76.40 points, or 1.64%, to 4,732.70.
In New Zealand, equities commenced the first trading day of the week in the positive terrain with the benchmark index rising by close to 1% by the end of the day. The share market registered a rise for the second consecutive session in a row on Monday. At the closing, the NZX 50 advanced 0.72% or 22.67 points to 3129.75. Meanwhile, the NZX 15 increased 0.60% or 33.78 points to close at 5634.33.
In South Korea, stocks closed higher as investors snapped up steel, bank and tech shares on improved sentiment following Wall Street gains. The benchmark Korea Composite Stock Price Index (KOSPI) gained 33.2 points to 1,627.10, snapping a two-session losing-streak.
In Taiwan, stock markets retained its historical trend of performing positive on their opening day for the Year of the Tiger extending gains for the fourth session. Major technology exporters rose on hopes that a new crop of computers and high-tech gadgets could spur fresh demand in 2010. The benchmark Taiex share index continued its upward momentum after a stretch of holiday’s as it gained for the fourth straight session after ending the day higher by 118.20 points or 1.59% at 7560.04.
In Philippines, the stock market broke the crucial 3000 mark once again, closing higher as investors took cues from the gains on Wall Street last Friday, which in turn led to the buying of key heavy weight stocks. Moreover, investors are in a wait and watch position of the financial performance of the listed companies for last year, which are about to release this week. At the final bell, the benchmark index PSEi escalated 1.24% or 37.06 points to 3,015.59, while the All Shares index went up 0.85% or 16.19 points to 1,906.76.
In India, the Key benchmark indices pared gains towards the end trade as investors turned cautions ahead of the Union Budget 2010-2011 later this week. After a firm start triggered by higher Asian stocks, the market pared gains in morning trade. It regained strength in mid-morning trade. The Sensex moved in a narrow range in early afternoon trade. The market once again pared gains in mid-afternoon trade. The BSE 30-share Sensex was up 45.42 points or 0.28% to 16,237.05. The S&P CNX Nifty added 11.50 points or 0.24% to 4856.40.
Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1266.44 while stock markets in Indonesia’s Jakarta Composite index gained by 9.89 points ending the day higher at 2564.26. In Singapore, the strait times finished the day at 2757.46 i.e. 0.32 points higher.
In other regional market, European shares were in a tight range, struggling to build on a recent run of gains, with a mixed set of earnings eyed. On a regional level, the U.K. FTSE 100 index increased by 0.12% or 6.54 points to 5,365, the German DAX index declined 0.1% or 6.43 points at 5,716 and the French CAC-40 index declined 0.1% or 1.57 points to 3,768.
FIIs put in bids for 1.94 crore shares
The initial public offer (IPO) of Man Infraconstruction received strong investor response as the IPO was bid a staggering 60.44 times by 16:00 IST on the last of the bidding for the IPO today, 22 February 2010. The IPO got bids for 28.12 crore shares compared with 46.53 lakh shares on offer.
Category-wise data shows that foreign funds had put in bids for 1.94 crore shares by Friday, 19 February 2010 compared with 22.68 lakh shares reserved for the qualified institutional buyers (QIB) category as a whole. Mutual funds put bid for 69.18 lakh shares. But there was not a single bid from domestic financial institutional (excluding mutual funds).
Just before the opening of the IPO on 18 February 2010, the company received commitments of Rs 24.50 crore from anchor investors, who subscribed for 9.72 lakh equity shares at Rs 252 per equity share, at higher end of the price band of Rs 243-252. The anchor investors include Nomura Asset Management Singapore, Reliance Mutual Fund, Legg Mason Asian Enterprise Trust, Monsoon India Inflection Fund, Axis Mutual Fund and India Diversified (Mauritius).
Promoted by Parag Shah and Mansi Shah, Man Infrastructure provides construction services for the port sector, residential and commercial real estate and roads. Over the years, real estate sector projects have become the major contributor to the consolidated revenue of the company.
Gujarat State Petronet Ltd (GSPL), engaged in natural gas transmission, presents a good buying proposition for investors with a medium-term perspective. At the current price of Rs 87, the stock discounts the trailing 12-month earnings by around 14 times.
This compares with around 18 times for GAIL and 19 times for Gujarat Gas — companies engaged in both gas transmission and marketing. Despite almost doubling from February 2009 lows, good financial metrics, expected volume growth from favourable industry dynamics and GSPL's expansion plans provide scope for further upside.
GSPL, a group company of Gujarat State Petroleum Corporation (a Gujarat-government controlled hydrocarbon explorer and producer), is a promising play on the high-potential natural gas sector in India.
GSPL enters into gas transmission agreements and connects gas supply sources with consumption centres through pipelines, the construction of which is outsourced to third-party contractors. The company's take-or-pay model with customers helps cushion revenue. Also, being solely engaged in gas transmission insulates GSPL from gas pricing vagaries and makes it primarily a volume-driven play.
GSPL, which transports gas on open access basis (allowing users or producers to access its pipelines for a transportation fee) has an extensive transmission network (1,420 km) in Gujarat, India's most developed gas market. It plans further expansion (around 800 km, of which 450 km is under execution) to cover all districts in the State. The company is also looking at expanding outside the State, and has submitted letters of intent for four intra-country pipelines totalling 5,675 km.
In addition, it has acquired exposure to city gas distribution through investments in Sabarmati Gas and GSPC Gas Company Ltd in Gujarat, and Krishna Godavari Gas Network Ltd in Andhra Pradesh. GSPL is also said to be in talks to acquire a stake in the proposed Mundra LNG terminal promoted by the GSPC-Adani consortium. Besides, it has received shareholder approval to enter the power generation business.
Strong volume growth
GSPL has grown strongly over the years (24.4 per cent annual growth in net sales from 2005 to 2009 to Rs 487.5 crore, and 66.5 per cent annual growth in net profits to Rs 123.4 crore ), primarily driven by increased gas transmission volumes.
Though 2009 sales and profit growth (16.7 per cent and 23.5 per cent, respectively) were lower than average primarily due to user substitution of spot natural gas by cheaper naphtha for some part of the year, growth has recouped strongly in the current fiscal.
The first nine months of this fiscal saw sales more than double, and profits more than treble over the previous year. This was primarily due to a sharp uptick in volumes transported which grew 96 per cent over the previous year to 8,395 million metric standard cubic meters.
Strong volume spurt was primarily driven by Reliance commencing gas supplies from its KG-D6 well in April 2009, and ramping up production during the year. Also, an increase in LNG imports aided volume growth.
During the current fiscal, GSPL enjoyed EBITDA margins of around 96 per cent (up from around 93 per cent last year) and strong net margins of above 40 per cent (up from around 25 per cent ), aided by sharp volume growth, no connectivity charges and significantly lesser gas transportation charges. Sharp divergence in EBITDA and net margins is primarily on account of high depreciation, given that the company continues to be in capital investment mode. This, however, bodes well for future growth.
High demand and increasing supply of natural gas is expected to benefit GSPL. From around 36 million metric standard cubic meters per day (mmscmd) currently transported by GSPL, volumes are expected to further increase, with additional supplies likely to flow from the Reliance KG basin and planned LNG capacity increases.
Volumes would receive further boost once the ONGC and Gujarat State Petroleum Corporation gas fields in the KG basin also go on stream. Also, stake in the proposed Mundra LNG project could provide gas supply security to GSPL.
In the near future, full execution of GSPL's contracts to supply gas to RIL's refinery and Torrent Power is expected to increase volumes. Even if volumes do not grow at the scorching pace seen in 2010 (due to high base effect and RIL's KG-D6 well achieving peak production), growth is still expected to be healthy.
The 30 per cent pre-tax profit contribution towards charity proposed by the Gujarat government for state-controlled entities, if implemented, will impact profitability.
Proposed caps on return on capital, may see average transmission realisation decline.
Also, the company's proposed foray into non-core businesses such as power generation might dilute focus and impact margins.
Investors can refrain from subscribing to the United Bank of India's public offer. Though the offer is modestly priced, the bank doesn't appear to be a preferred exposure in the banking space, where there are a large number of other listed options. At the upper end of the price band of (Rs 66), the stock is trading at 4.37 times its trailing one year earnings.
This includes a huge proportion of income as well as write-backs from the treasury portfolio, as the debt market had a good run for the year ended September 30, 2009.
The price-to-adjusted book value post dilution (excluding the preference shares) works out to 0.9 as of September 30, 2009.
While this valuation is at a discount to peers, it may be justified as the bank may continue to lag its peers in terms of earnings performance. Banks with similar valuations such as Allahabad Bank and Andhra Bank have better operational parameters and may deliver better returns, going forward.
The bank suffers from low credit-deposit ratio (63.7 per cent), high cost-income ratio (57 per cent) and low net interest margins (NIMs of 2.4 per cent ). A low provision coverage (48 per cent) is also a concern and this may need to be bolstered, given RBI norms.
These also depressed the return on net worth of the bank which stood at 14 per cent as of March 2009. The profits of the bank were volatile during the period 2004-09 despite the bank witnessing a 32 per cent compounded annual growth in advances. Choppy earnings may continue until the bank reduces the investment-deposit ratio (36 per cent ).
United Bank of India, a Kolkata-headquartered bank, has 1,505 branches with predominant East and North-East presence.
The total business (deposits and advances) of the bank stood at 1.05 lakh crore as of September 2009. Advances grew by 32.8 per cent compounded annually for the period 2004-09 albeit on a low base.
This helped the bank to improve its credit-deposit ratio to 65.5 per cent; however this is still low compared with peers.
The current offer proceeds are to be used to bolster the capital adequacy which is necessary to fund future loan book growth. The capital adequacy of the bank stood at 12.93 per cent as of September 30 2009. The current fund raising plans (including an additional Rs 550 crore infusion from the government through preference share allotment) would bolster the capital adequacy base to more than 15 per cent.
Post-offer, the government's stake would fall to 84 per cent. Government stake is well above the mandatory 51 per cent stake, which may allow the bank to raise capital from time-to-time, which many other peers cannot do.
Historically volatile treasury income has impacted the bank's earnings and this will continue to be a factor in the quarters ahead.
Over a third of this investment portfolio is exposed to interest rate risk, which is a significant proportion compared with its peers. With a modified duration of 2.9 years, it may have to provide as much as Rs 2.47 crore for every one basis point increase in bond yields.
High concentration in the Eastern region, where the demand for credit is low but the deposit inflows are high, has helped United Bank build a strong low-cost deposit base. Low-cost deposit base stood at 34 per cent as of September 2009, high compared with the nationalised banks' average.
Even though the cost of funds is low, the bank has a relatively low net interest margin (2.4 per cent for the half year ended September 2009) compared with most peers. While the December quarter may see slight improvement in NIMs, the recent hike in CRR would pressure margins. While the bank has done well to bring down the gross NPA ratio from 4.66 per cent in March 2006 to 2.5 per cent in September 2009, the proportion is high.
With a provision coverage of 48 per cent, the net NPA ratio stood at 1.3 per cent. The net NPA ratio of the bank is higher than the nationalised bank average. We expect asset quality slippages in line with the banking industry in the December quarter.
Total restructured assets of the bank is around 5.3 per cent of the total advances. Further asset quality slippages can be expected from the restructured loans.
While its current operational parameters are not impressive, United Bank has immense scope to improve its operational parameters over the medium to long term.
Investors should watch for such improvement before considering investment.
Headlines for the day
Shree Renuka buys 51% in Brazil sugar firm - Business Standard
Export subsidies unlikely to be reduced - Business Standard
Toyota India to double sales in 2011 on the back of Etios - Business Standard
Ansal revives SEZ plan with Haryana agro/food project - DNA Money
Power-play gains for Godawari Power - DNA Money
Events for the day
Major corporate action
Ex-date for Interim dividend of Anuh Pharma Ltd.
Ex-date for Interim dividend of Sterling Tools Ltd.
Ex-date for Final dividend of Castrol India Ltd.
Man Infraconstruction Ltd. IPO closes today
The European shares closed higher on fifth straight session and hit a three-week closing high on Friday, as positive earnings reported by the banks. FTSE 100 closed 0.62% higher at 5358.17.
On Friday, US markets were closed on flat notes as interest rates concern continues. Dow Jones closed higher by 0.09%; while Nasdaq closed 0.10% higher.
In today's trade, All the Asian indices are trading in positive territory. At the time of writing of this report SGX Nifty trades 69.50 points higher.
Owing to the strong global cues, Indian markets are set to open higher and remain volatile throughout the session.
Among the local indices, the Nifty could test the 5100-5200 range on the up side, while on the down side it could find support at 4750 and 4800. While the Sensex is likely to get support at 16100 and may face resistance at 16400.
Among the Indian ADRs trading on the US bourses, Rediff surged the most with gains of 0.7%, while Tata Motors and Wipro slid the most with loss of 1.92% and 1.18% respectively.
In the commodity space, wherein the Crude oil prices recorded marginal loss, with the Nymex light crude oil for March series down by $0.69 to settle at $80.50 a barrel.
In the metals space, Comex Gold for April series rose by $3.30 to settle at $1122 to a troy ounce.
In the metals space, Comex Silver for March series up by $0.35 to settle at $16.41 to a troy ounce.
Daily trend of FII/MF investment in equities
On February 19, 2010, FIIs were the net sellers of the Indian Stocks in the tune of Rs28.90 crore (with the gross purchase of Rs22048.30 crore and gross sales of Rs2077.20 crore).
While the Domestic mutual funds, on February 18, 2010, were the net sellers of the stocks in the tune of Rs132.20 crore (with gross purchase of Rs446.30 crore and gross sales of Rs577.50 crore).
(Rs. 1 Lac Application)
1.50 to 2
D. B. Realty
1.50 to 2
ARSS Infrastructure Projects
125 to 130
Hathway Cable & Data Comm.
85 to 90
9 to 9.50
243 to 252
43 to 45
1600 to 1700
9 to 10
1900 to 2000
United Bank of
60 to 66
5 to 5.50
1800 to 1900
The key benchmark indices may gain snapping last two days of losses on higher Asian stocks. Asian stocks gained on Monday after a smaller-than-estimated increase in U.S. consumer prices eased concern the Federal Reserve will increase interest rates. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.51% to 3.16%. But China's Shanghai Composite fell 0.16%.
US stocks closed higher after a see-saw session on Friday, 19 February 2010 as investors worried the eventual withdrawal of easy money will hurt Wall Street. Stocks on Wall Street closed out their best week of the year after a volatile session as investors weighed the Federal Reserve decision late Thursday to raise its discount rate for banks by one-quarter percentage point to 0.75 percent. The Dow Jones industrial average closed up 9.45 points, or 0.09 percent, at 10,402.35. The Standard & Poor's 500 Index was up 2.42 points, or 0.22 percent, at 1,109.17. The Nasdaq Composite Index was up 2.16 points, or 0.10 percent, at 2,243.87.
The government report showed an index of U.S. consumer prices rose 0.2 % in January from the previous month, less than the 0.3 % projected by economists. New York Federal Reserve President William Dudley indicated on Friday that policy makers are more concerned about maintaining growth than fighting inflation, citing the consumer price data. The Fed raising the so-called discount rate from 0.5 % to 0.75 % on Thursday 18 February 2010 triggered concern stimulus programs are winding down.
Greece's borrowing needs are covered until mid-March and Athens so far is meeting goals set out in an austerity plan, Greek Prime Minister George Papandreou said.
Closer home the country needs to urgently import 3-5 million tonnes of white sugar and may ship in rice to calm food prices, a top aide of the prime minister said, signalling a tighter supply situation than previous estimates. has faced falling output of key crops like sugar and widespread protests against food prices that are up 18 % because the worst monsoon in 37 years damaged crops in 2009. The chairman of the panel, former Reserve Bank governor C. Rangarajan, said it would take up to three months for soaring food prices to ease even with the imports. Farm minister Sharad Pawar has repeatedly said the food situation was under control, helped by government measures such as easier imports and restrictions on stocks.
The government should begin to lower its fiscal deficit in the budget set to be announced this week but should not cut capital spending on infrastructure, a top government panel said on Friday. The panel also projected economic growth of at least 8.2 % in 2010/11, from over 7.2 % forecast for the current fiscal year. Other top officials have said the economy would grow at 8 % in the year that ends March 2011. The fiscal deficit, running at a 16-year high of 6.8 % of GDP this year, threatens to push up long-term market interest rates and constrain the setting of monetary policy, the prime minister's economic advisory council said.The panel also warned about the spread of food price inflation to the broader economy.
The government aims to cut its fiscal deficit to 5.5 % of GDP for the year that begins 1 April 2010, and Finance Minister Pranab Mukherjee is expected to announce a partial roll-back of stimulus measures when he announces the budget for the next fiscal year on 26 February 2010. The council said by keeping spending and subsidies at current levels, it was possible to cut the fiscal deficit by 1-1.5 % for the year that ends in March 2011 without hurting economic growth. Rangarajan said he expects wholesale price inflation to hit 8.5 % by the end of March, although some private forecasters expect it to reach double-digits by then. Still, the Reserve Bank of India has said it is unlikely to move interest rates before its 20 April 2010 policy review, barring an unforseen event.
Rangarajan said the economy will grow at over 7.2 % in the year that runs through March, slightly lower than the central bank's projection of 7.5 %.
The next major trigger for the stock market is the Union Budget 2010-2011 on 26 February 2010. Among the key issues, analysts and economists expect the Finance Minister to provide a road map for the introduction of the key direct and indirect tax reforms viz. the direct tax code (DTC) and the Goods & Services Tax (GST) in the Budget. The GST will enable the Indian corporate sector to get much-needed relief from a multiplicity of state and Central taxes. However, several critical issues need to be resolved before it can be put in place. The Finance Minister must utilize this opportunity to effect a smooth transition to this new system.
The hope of direct tax reform has risen with the release of the draft Direct Tax Code by the government in calendar 2009. The Direct Taxes Code is supposed to replace the Income Tax Act by consolidating and amending income tax provisions for all categories of people and institutions. The DTC proposes doing away with tax exemptions and bringing under the tax purview a number of entities including trusts that pay no tax at the moment. The thrust of the new code is to promote efficiency and equity by eliminating distortions in the tax structure, introducing moderate levels of taxation and expanding the tax base.
Meanwhile, the government may increase excise duties as a first step towards a gradual winding down of fiscal stimulus measures. It may also raise the service tax rate to 12% from 10%. It may be recalled that the government had slashed the Central Value Added Tax (Cenvat) rate for excise duty from 14% to 8% in two rounds starting in December 2008. It had also cut service tax by 2 percentage points. These reductions were effected in order to provide a stimulus to domestic industry. Since the overall prospects for growth are much brighter today, the finance minister may withdraw a part of the stimulus in order to boost tax revenue.
The Finance Minster may project a lower fiscal deficit for 2010-11 based on higher revenue projections due to economic rebound. It remains to be seen if there are structural reforms to reduce the subsidy burden such as decontrol of petrol and diesel prices as recommended by the Kirit Parikh committee recently.
It also remains to be seen if there is any progress on financial sector reforms. The pending financial sector reforms include raising the foreign direct investment (FDI) cap in private sector insurance companies from 26% to 49% - a Bill for which is pending in Parliament.
As far as government expenditure is concerned, the thrust areas could be agriculture, water resources, power, roads & other infrastructure projects and social sector schemes.
Meanwhile, the follow-on public offer of Rural Electrification Corporation (REC) received lackluster response from investors. The FPO was subscribed 0.29 times on the first day of bidding for the issue on Friday, 19 February 2010, NSE data showed. The government has set the floor price of the follow-on public offer of Rural Electrification Corporation (REC) at Rs 203 per share. The issue, which will be open between 19-23 February 2010, will see the sale of 12.87 crore equity shares and an offer for sale of 4.29 crore government owned shares. Like in the case of NTPC, the issue will take the French auction route, but will give flexibility to bidders to scale down their bid quote. REC will reserve 50% the shares on offer for institutional bidders, while retail investors will get 35%.
The key benchmark indices dropped in choppy trade on Friday,19 February 2010 extending losses for the second straight day as the US Federal Reserve's decision to raise its discount rate hurt investor sentiment. The BSE 30-share Sensex fell 136.21 points or 0.83% to 16,191.63 on that day.
As per provisional figures on NSE, foreign funds bought shares worth Rs 17.91 crore and domestic funds sold shares worth Rs 397.13 crore on Friday.
SBI may not raise deposit rates before May-June. (BL)
REC FPO subscribed just 0.29 times receiving bids for 34.90mn shares out of the total issue size of 171.73mn shares on opening day. (BS)
HDFC Bank increases the rates on fixed deposits by up to 150bps across maturities. (BL)
Reliance MediaWorks has made an open offer to purchase a controlling stake in Fame India. (Mint)
Bharti Airtel chairman says his company does not need any regulatory approvals in India to acquire African assets of Zain Telecom; hopes the deal would be concluded by the end of April. (TOI)
Bharti Airtel lines up funds aggregating US$9bn from foreign and local banks for its proposed acquisition of Zain Telecom, as it settles to finance the entire deal through debt in the first phase. (ET)
S&P and Crisil placed Bharti Airtel’s long-term bank facilities and debt programme on ‘rating watch with negative implications. (ET)
Ambuja Cements plans to spend around Rs35bn to expand its capacity to 24mn tons from the current 19mn tons by year-end. (ET)
Shree Renuka Sugars announces the acquisition of 51% stake in Equipav S.A. Acucar e Alcool, one of the largest sugar and ethanol companies in Brazil, for Rs15bn. (BL)
Patel Engineering plans to dilute as much as 40% of equity in its power subsidiary, Patel Energy Resources. (BS)
The Foreign Investment Promotion Board asks United Breweries Holdings to clarify some issues on an application to bring in foreign investment. (BS)
Nestle India reports 6.7% fall in net profit at Rs1.13bn for Q4 as against Rs1.21bn. (BS)
Offshore services provider Great Offshore plans to raise funds up to Rs17.5bn by issuing securities. (BL)
The government is likely to sell its 330mn shares in NMDC next month through a price band of Rs415-430 per share and leave the auction route adopted in the case of NTPC and REC. (BS)
NMDC is set to pick up a 50% stake in Ferrous Resources’ Brazilian operations for US$2.5bn. (ET)
Kingfisher Airlines, British Airways in talks for code-sharing in India. (ET)
Videocon’s Elcoteq bid take a hit as creditors’ eye higher compensation to cede controlling stake. (ET)
Emami enters F&B business; launches edible oil brand. (FE)
Apollo Hospitals plans to come up with three more liver transplant clinics across the country. (BS)
Godrej Industries’ real estate arm has lined up Rs20bn of investments for developing five projects over 30mn square feet in Bangalore. (DNA)
Jaypee Infratech says it was proposing to raise Rs16.5bn through initial public offering and the issue was likely to be launched by next month. (FE)
Star Aviation, the country’s first regional airline to get a licence in 2007 but which is yet to launch service, has initiated sale talks with the GMR group. (TOI)
United Spirits enters the non-alcoholic drinks category with Romanov Red Energy Drink. (BS)
Burnpur Cement plans to set up cement plants in Uttar Pradesh, Bihar and in neighboring countries like Nepal, to increase capacity to 10mn tones in the next few years. (ET)
Coal India plans to file the draft red herring prospectus with SEBI for its initial public offer by June. (BL)
A more than three-fold jump in private remittances is expected in 2009-10 as the economy stages a stronger-than-estimated rebound in the second half, the Economic Advisory Council to the Prime Minister has projected. (BL)
The Reserve Bank of India reduced the ceiling rate on export credit in foreign currency by banks to Libor plus 200bps from Libor plus 350bps. (BS)
New FDI policy to be unveiled on March 31. (BL)
India's PC market sales touched ~2mn units in Oct’-Dec’ 09, a 25.7% growth over corresponding quarter of previous year. (BL)
Foreign exchange reserves rose US$485mn to US$279bn for the week ended February 12. (BL)
Cement dispatches by major manufacturers grew by a healthy 12.6% yoy in January at 18.2mn tonnes. (TOI)
Communication minister says number portability would be launched in the first week of May; in the first leg, it would be launched in Chennai and Bangalore. (TOI)
The finance ministry is considering a proposal to rationalise end-use exemptions granted to businesses through various duty reliefs. (BS)
Iron ore shipment declined 11% in December to 12.37mn tons in December 2009 compared to 13.85mn tones in the corresponding month last year. (BS)