Monday, June 07, 2010
Reliance Communications gains
Reliance Communications rose 4.16% to Rs 175.15 at 15:29 IST after Abu Dhabi-based Etisalat said it was studying options in India, including a deal with Reliance Communications.
Meanwhile, the BSE Sensex was down down 345.03 points, or 2.02%, to 16,772.66.
On BSE, a huge 1.07 crore shares were traded in the counter as against an average daily volume of 13.55 lakh shares in the past one quarter.
Foreign banks keen to bolster foothold in India
According to media reports, the foreign banks have been in India for more than 150 years but more overseas lenders are now queuing up to set up operations, amid signs that tough restrictions on entry may be eased.
Five to eight foreign banks are seeking to come to India, with the country viewed as attractive because of gaps in the market and a buoyant economy that has created wealthier clients.
Karnataka fast-tracks plan 3,000MW gas-based plants
The Karnataka government has offered 3,000 mega watt (Mw) of gas-based power projects at a cost of Rs 12,000 crore to the private sector for investment. Of this, 2,100 Mw has been split into three projects of 700 Mw each. They have been put on the competitive bidding route while 900 Mw has been offe-red on a merchant basis that is to be developed by private parties with the projects ranging from 50 Mw to 300 Mw respectively.
Sensex ends below 17,000 on weak global cues
Indian equities had a disappointed day today. The Sensex tumbled over 300 points at close due to global woes. All sectoral indices traded in deep red. Metal, realty were badly hit followed by PSU, oil& gas, capital goods and auto stocks also led the downfall. It opened on a bleak note and soon fell sharply on the back of weak Asian peers. Aggressive selling was seen across board. The index plunged over 400 points in mid noon trades, touching a day`s low of 16,686.73. Finally, it ended below 17,000 mark, whereas Nifty managed to hold 5,000 mark.
On global front, European stocks dropped as concern lingered that the region`s spreading debt crisis will hold back the global economic recovery. US futures fell. Asian stocks tumbled, dragging down the MSCI Asia Pacific Index by the most in 14 months after a US jobs report missed economist estimates and concern grew that Europe`s sovereign-debt crisis is spreading.
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BSE Bulk Deals to Watch - June 7 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/6/2010 517356 ACI Infocom SAGAR TEX CREATION PRIVATE LIMITED B 50000 23.25
7/6/2010 517356 ACI Infocom ALLWELL INVESTMENTS PVT LTD S 79199 23.25
7/6/2010 500028 ATV Projects ASHISH SUBHASH CHANDWANI B 318371 15.90
7/6/2010 511664 BGIL Films CSM COMMODITY LIMITED B 160000 13.73
NSE Bulk Deals to Watch - June 7 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-JUN-2010,KARURKCP,Karur K.C.P. Packkagings,SAR AUTO PRODUCTS LIMITED,BUY,84361,57.30,-
07-JUN-2010,MANGLMCEM,Mangalam Cement Ltd,BIRLA SUNLIFE INSURANCE CO.LTD,BUY,160000,151.00,-
07-JUN-2010,MANGLMCEM,Mangalam Cement Ltd,BIRLA MUTUAL FUND,SELL,160000,151.00,-
Hungary woes haunt markets
Today’s major news:
Oracle Financial tops the chart, the stock closes 6.63% up
Reliance Communications rallies on stake sale plan; the stock ends 4.61% higher
Mastek shoots up on acquisition buzz; the stock closes 13.60% higher
Post-market summary:
Nifty June 2010 futures below 5,050
Turnover surges
Nifty June 2010 futures were at 5,026.65, at a discount of 7.35 points compared to spot closing of 5,034. Turnover in NSE's futures & options (F&O) segment surged to Rs 80625.72 crore from Rs 64139.82 crore on Friday, 4 June 2010.
JSW Steel June 2010 futures at a discount at 1032.50 compared to the spot closing of 1042.
Tata Steel June 2010 futures were near spot price at 464.55 compared to the spot closing of 464.25.
Tata Motors June 2010 futures were at premium at 742 compared to the spot closing of 739.05.
In the cash market, the S&P CNX Nifty fell 101.50 points or 1.98% at 5,034.
Fatpipe Networks IPO subscribed 32% on day one
Gets bids for 19.31 lakh shares
The initial public offer (IPO) of the Chennai-based IT company Fatpipe Networks India was subscribed 0.32 times on day one. The IPO got bids for 19.31 lakh shares compared with 59.75 lakh shares on offer.
The company is offering shares in the price band of Rs 82-85 per share in the ongoing IPO which remains open between 7 and 9 June 2010.
Fatpipe Networks India manufactures and markets router clustering products, which improves reliability, security and bandwidth management application of wide area networks (WAN).
Asian stocks rumble as recovery hopes dashed
Regional benchmarks slump around 2-3% as investors eye weak US jobs data and European debt worries resurface
Stocks in Asia rumbled today, coming under a heavy selling spree as the markets were quick to react to a 300+ points slide in the DOW in Friday's trades. The investors were in a panic selling mode following a tremendous rise in the US dollar, which hit highs under 1.1900 against the Euro and exerted a tremendous selling pressure on the risky assets. Markets were also shivering on ideas China would tighten its monetary policy soon and help its already moderating economy to soften further in the second half of the year. Though a nominal pick up was seen in the markets from the day's lows, it was a panicky Monday for stocks with a intraday recovery in DOW futures, which cut losses to quote down 20 points when last seen, not being able to influence the direction much
Market snaps three-day winning streak
The key benchmark indices edged lower, snapping a three-day winning streak, as weak global stocks marred investor sentiment. Nonetheless, the market ended off the day's low, mimicking a recovery in many Asian stocks from an intraday steep slide. Reports that monsoon has revived after being stalled by a cyclone last week, also aided intraday recovery on the domestic bourses. Index heavyweight Reliance Industries (RIL) cut losses. Some auto stocks also pared losses. The BSE 30-share Sensex fell 336.62 points or 1.97%, up about 95 points from the day's low.
All the sectoral indices on the BSE were in the red. Both Mid and Small-Cap indices on BSE outperformed the Sensex.
Red metal registers big weekly loss
Demand concerns weigh on metal prices
Red metal prices fell at Comex on Friday, 04 June 2010. Prices dropped as economic concerns once again resurfaced following worse than expected job report and problems pertaining to Hungary. These problems once again questioned metal's demand in coming months.
Sterlite Industries - Annual Report - 2009-2010
STERLITE INDUSTRIES (INDIA) LIMITED
ANNUAL REPORT 2009-2010
DIRECTOR'S REPORT
Dear shareholders,
The Directors of your Company are pleased to present the 35th Annual Report
together with the statement of audited accounts for the financial year
ended 31 March 2010.
Financial highlights
The following table gives the financial highlights of your Company on a
standalone basis according to Indian Generally Accepted Accounting
Principles (GAAP).
(Rs. in Crore)
Year ended 31 March 2010 2009
Gross Turnover 13,676.47 12,277.74
Earnings before interest, tax depreciation
and amortization 1,628.41 1,653.94
Less: Interest 256.44 203.92
Gross profit 1,371.97 1,450.02
Less: depreciation and amortization 150.64 166.18
Exceptional items 273.53 (55.31)
Profit before tax 947.80 1,339.15
Taxation 116.30 102.72
Net Profit for the year 831.50 1,236.43
Add: balance brought forward from previous year 2,683.41 1,944.10
Amount available for appropriation 3,514.91 3,180.53
Appropriation:
General reserve 500.00 204.00
Debenture redemption reserve 2.90 3.00
Additional Dividend on ADS issued in
July 2009 (paid in September 2009) 53.54 -
Proposed dividend on equity shares
(including dividend distribution tax thereon) 367.49 290.12
Balance carried forward to next year 2,590.98 2,683.41
Grey Market Premiums - Jun 7 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Standard Chartered PLC | 104 | Discount |
| Fatpipe Networks India Ltd. | 82 to 85 | 2 to 3 |
Crash...make the best of it!
Things turn out the best for the people who make the best of the way things turn out.- John Wooden
A gap down opening could be a blessing. The Indian market is set to correct at start merely on account of the global crash witnessed over the weekend. A weaker-than-expected U.S. jobs.
report, continued concerns about the European debt crisis (with Hungary part of the action) and the fall of the euro left no trace of bulls on the street. The worry on the street is if Hungary too is reeling, how bad would the actual situation be with other emerging markets in Central and Eastern Europe?
The Dow is down ~11.4% from its April 26 highs which brings academic interest on whether or not its heading into a bear market. Asian markets are understandably weak and the contagion in the market will spread to the Indian indices as well. While strong support could set in around the 4950 levels for Nifty, it may be worth a nibble at stocks which will fall for just no fault of their own.
Back home we have the Empowered Group of Ministers (EGoM) meeting today to decide on petroleum products pricing. Should the government bite the bullet, we should be geared for a Rs3 hike in fuel prices. Perhaps a phased hike could be a safer option the government may choose.
Rcom, which was among the prominent gainers last week could continue to witness action after the board approved in-principle the induction of strategic / private equity investors into the Company for an up to 26% equity stake at an appropriate premium to the prevailing market price. The company will also examine and pursue other appropriate strategic combination / consolidation opportunities.
While the near term worries, mostly global will continue to power the bears, the larger picture too needs to be kept in mind. The government is doing well on the fiscal front thanks mainly to the 3-G auctions. Achieving the disinvestment target could add to the confidence of fiscal consolidation being on the right path.
Though volumes on the stock market may not be anywhere near their highs, the proportion of deliveries has increased. Reports state that in the National Stock Exchange, the proportion of delivery-based trades for April 2010 were 28% of the overall shares traded on NSE while for BSE, the delivery trades stood at 38% in April.
Meanwhile, a FIICI survey suggests that ‘India is likely to see flight of capital from its equity and debt markets in the next six months as global investors hesitate to pour money outside the US because of the European debt crisis.’
"With de-leveraging (belt-tightening) expected to continue in the global markets, there is likely to be flight of capital from equity markets in emerging economies, including India," FICCI study stated.
Daily News Roundup - June 7 2010
Reliance Industries may foray into nuclear energy after being freed from a non-compete agreement with the ADAG that barred it from investing in some businesses. (ET)
Fortis Healthcare may avoid a hurried response to counter Malaysian investment fund Khazanah’s bid to acquire management control over Parkway Holdings. (BS)
Tech Mahindra to focus more on the Middle East and African market, in talks with three-four African telecom companies for large contracts. (BS)
Reliance Communications has granted an in-principle approval to the sale of 26% stake in the company to strategic or PE investors; however, it did not name any buyer or give a timeframe for the proposed sale. (BL)
AT&T is in talks with Reliance Communications to buy a shade under 15% stake. (DNA)
SBI to fix base rate around 8%. (FE)
GAIL set to start work on Dabhol-Bidadi project, To invest Rs 2,000 crore in 2010-11. (BS)
BEML plans to set up another greenfield manufacturing plant at an investment of Rs3.16bn in Bangalore. (BS)
JSW Energy plans to invest about Rs20bn in coal mine development. (BS)
Neyveli Lignite commissioned its lignite-based power plant at Barsingar, in Rajasthan. (BS)
Maytas Infra wins contract worth Rs1.85bn to build part of a metro rail network in the northern Indian city of Gurgaon. (BS)
SsangYong Motor lists six companies as its possible buyers, including M&M and the Ruia Group, of the original list of seven. (BS)
Jaiprakash Associates plans to invest around Rs100bn in the next three years to increase its annual production capacity to 50mn tons from a little over 20mn tons at present. (BS)
Bharat Forge forms joint venture with KPIT Cummins to produce a hybrid engine technology, which will hit the market in six months. (BS)
Adhunik Metaliks plans to invest Rs55.68bn in setting up a 2.2mn tons steel plant in Karnataka. (BS)
Life Insurance Corporation plans to sell its employee housing portfolio worth Rs13bn to its mortgage arm, LIC Housing Finance. (BS)
R-ADAG emerges as the preferred bidder for acquiring a controlling stake in Over-The-Counter Exchange of India from some of the exchange’s existing institutional investors. (ET)
Amtek Group forms 50:50 joint-venture with US-based American Railcar Industries to make railway wagons in Punjab. (ET)
SBI might look at raising money through a bond sale abroad during the next quarter. (ET)
Pipavav Shipyard bags Rs26bn contract to build offshore patrol vessels for the Indian Navy. (ET)
Ashok Leyland says that it has achieved 229% growth in its May sales to 6,502 units as compared to 1,977 in the same month last year. (FE)
Apollo Tyres is gearing up to supply tyres to German car maker Volkswagen in Europe. (ET)
Ashok Leyland and Nissan plan to roll out their first LCV product by mid-2011. (BS)
Welspun Corp. says it has received orders worth Rs7bn for pipes. (FE)
Shree Cement enters into a MoU with the Karnataka government to invest Rs20bn for setting up a cement unit and a power plant. (BS)
CESC acquires 100% ownership in Dhariwal Infrastructure by snapping the remaining 50% for a shade over Rs1bn. (ET)
Mastek is eyeing an acquisition in the insurance vertical in North America as well as the UK, and could spend up to US$50mn for the same. (BS)
Bhushan Steel plans to raise funds worth US$500mn from the market to finance the company’s greenfield projects. (ET)
Essar Oil plans to raise US$300mn by selling FCCBs to its promoter to part finance its expansion. (ET)
Havells India plans to undertake a rebranding exercise in Mexico to introduce products under its own brand. (ET)
Government has amended the Securities Contracts (Regulation) Rules to increase the non-promoter holdings in Indian companies to at least 25%. (BL)
India’s forex reserves dipped US$1.4bn in the week ended May 28, reserves are at almost US$272bn. (ET)
Value of pan India broadband spectrum has reached Rs95bn after 77 rounds of bidding. (BL)
Government to decide on free market pricing of petrol and diesel and increase the price of kerosene and LPG. (FE)
After freak back on winning streak...Nifty, Sensex adds 1.5% each
It was a choppy start for the week with indices falling below their 200-DMA. A freak trade in Reliance and a crash in the overall market on Tuesday had the bulls bruised. Fortunately the remaining days saw some pull back though with the usual intra-day gyrations. Monsoon arrived in Kerala, but uncertainty persists over its progress, which are adding to the market’s woes. India grew faster than expected in fiscal year 2010, March quarter GDP growth came in at 8.6%. Impressive monthly auto sales numbers boosted the auto stocks. FMCG stocks attracted buying interest following positive news flow across the sector. HUL and Colgate were among the notable gainers. Volatility in the markets drove investor’s attention towards defensive pharma space. Finally, the NSE Nifty was up by 1.4% and BSE Sensex was up 1.5%.
The BSE Sensex hit intra-week high of 17,150 and low of 16,318 while the NSE Nifty hit intra-week high of 5,148 and low of 4,961.
The top gainers: The top gainers in the Sensex were Maruti Suzuki (up 8.6%), Hindustan Unilever (up 6.5%), Bharti Airtel (up 6%), ONGC (up 5.1%) and Reliance Infra (up 5.1%).
The Top Losers: The top losers in the Sensex were Grasim (down 4.1%), Tata Power (down 2.5%), Tata Steel (down 2.3%), Hindalco (down 2.2%) and HDFC (down 1.5%).
The BSE IT Index (up 1.8%):The top gainers in the IT sector were Patni Computer (up 8%), Sasken Communication (up 5.9%), HCL Tech (up 2.6%), Mahindra Satyam (up 2.2%) and Infosys (up 2%).
The top losers were Mphasis (down 1.3%), Wipro (down 1.3%) and Oracle Financial (down 0.6%).
The BSE Consumer Index: The top gainers in the Consumer Durables sector were Mirc Electronics (up 6.8%), Su-Raj Diamonds (up 2%), Titan (up 1.3%) and Whirlpool (up 0.5%).
The top losers were Videocon Industries (down 1.9%) and Blue Star (down 0.9%).
The BSE Healthcare Index (up 2.1%):The top gainers in the Pharma space were Wockhardt (up 7.1%), Zandu Pharma (up 4.9%), Sun Pharma (up 4.5%), Cadila Healthcare (up 4.4%) and IPCA Labs (up 4%).
The top losers were Fresenius Kabi (down 5.1%), Glenmark Pharma (down 4.7%), Panacea Biotec (down 3.8%), Marksans Pharma (down 2.8%) and Natco Pharma (down 1.2%).
The BSE Banking Index (up 1.9%):The top gainers in the banking space were Union Bank of India (up 8.8%), Karnataka Bank (up 8.7%), Canara Bank (up 5.4%), Bank of Baroda (up 5%) and SBI (up 4.6%).
The top losers were Kotak Mahindra Bank (down 1%) and HDFC Bank (down 0.6%).
The BSE Auto Index (up 4.4%):The top gainers in the auto space were Maruti Suzuki (up 8.6%), M&M (up 7.2%), Ashok Leyland (up 6.3%), Hero Honda (up 3.6%) and Tata Motors (up 2.9%).
The BSE Oil & Gas Index (up 1.4%):The top gainers in the oil & gas space were GSPL (up 7.6%), Essar Oil (up 5.7%), MRPL (up 5.5%), Hindustan Oil (up 5.3%) and Chennai Petroleum (up 5.1%).
The top losers were Gujarat NRE Coke (down 6.5%), Jindal Drilling (down 1.2%) and Reliance (down 0.5%).
The BSE Capital Goods Index (up 1.1%):The top gainers in the Capital Goods space were Dredging Corp (up 12.9%), Elgi Equipments (up 6.9%), Greaves Cotton (up 4.1%), Crompton Greaves (up 3.4%) and Alstom Projects (up 3.3%).
The top losers were Thermax (down 2%), Siemens (down 1.8%), Usha Martin (down 1.6%), Ingersoll Rand (down 1%) and Esab India (down 0.8%).
The Cement Sector: The top gainers in the cement sector were Prism Cement (up 6.1%), Dalmia Cement (up 5.2%), Shree Cement (up 4.8%), India Cements (up 2.4%) and Birla Corp (up 2.1%).
The top losers were Grasim (down 4.1%), JK Cements (down 1.2%) and Binani Indus (down 0.2%).
The Telecom Sector: The top gainers in the telecom space were RCom (up 14.1%), Idea Cellular (up 11.5%), Bharti Airtel (up 6%), TTML (up 5.3%) and Shyam Telecom (up 2.3%).
The top losers in the telecom were Gemini Comm (down 2.3%) and Tata Communication (down 0.2%).
The Realty Sector (down 0.7%):The top losers in the Realty sector were Anant Raj Indus (down 8.9%), Sobha Developers (down 7.3%), Ansal Props (down 3.4%), Unitech (down 3.1%) and Mahindra Lifespace (down 2.2%).
The top gainers were Parsvnath (up 3.3%), HDIL (up 1.4%), DLF (up 0.6%) and Omaxe (up 0.2%).
The Metals sector (down 2.1%):The top losers in the metals sector were Bhushan Steel (down 4%), Jindal Steel (down 3.7%), Tata Steel (down 2.3%), Jindal Stainless (down 2.3%) and SAIL (down 2.2%).
The top gainers were Adhunik Metaliks (up 1.2%), Tata Metaliks (up 1.1%).
Hungary fears may drag Indian equities at start
Headlines for the day:
RCom board endorses 26% stake sale idea
Oil rig oversupply pulls down rates
GUVNL inks PPAs for 420MW solar projects in Gujarat
Events for the day:
Major corporate action
Government to review fuel pricing today
Fatpipe Networks India IPO opens today
Ex-date for dividend of Surana Corp, Tulsyan NEC
For more events, log on to Sharekhan.com
Pre-market report
Global signals
The European shares snapped their four-day winning streak to end lower on Friday (June 04, 2010) after US jobs data disappointed and banks fell, with Societe Generale down on concerns over its derivatives operations.
The US stocks stumbled to their lowest close since February on Friday after May's jobs figure slammed investors already reeling from worry over another developing debt crisis, this time in Hungary. US stocks fell 3% and the Dow Jones industrial average finishing below 10,000, hit by disappointing jobs data and fresh European fears.
In today's trade, the Asian markets were trading in the negative zone after Wall Street slumped on Friday. SGX Nifty was trading 126 points lower.
Indian Indices
The strong rally in the last week due to constructive triggers back home led the Indian equities end the week with a positive bias. But now the global scenario is quite different and the market sentiment across the globe is dragged down by fresh fears that Europe's debt crisis could spread as Hungary scrambled to calm worries that the nation is close to defaulting on its debts.
The Indian stocks may face pressure and reverse its rally leading to a gap-down opening at the start, following the movements of its global counterparts. It is expected to trade with a negative bias throughout the session. The major events back home today will be the meeting of empowered group of ministers (EGoM), to consider the Kirit Parikh committee recommendations on decontrol of fuel prices. The oil & gas stocks will be in focus throughout the day.
Commodity cues
In the commodity space, the crude oil prices slipped, with the Nymex light crude oil for the July series down by $3.10 per barrel, whereas in the metals space, the Comex Gold for the July series rose by $7.90 to a troy ounce and the Comex Silver for the July series was declined by $0.63 to a troy ounce.
Daily trend of FII/MF investment in equities
On June 04, 2010, the foreign institutional investors FIIs were the net buyers of the Indian stocks to the tune of Rs493.30 crore, whereas the domestic mutual, on June 01, 2010, were the net sellers of the stocks to the tune of Rs13.30 crore.
Crude sinks
Crude would have registered weekly gains if not for Friday's losses
Crude oil prices dropped sharply on Friday, 04 June 2010. Prices dropped as economic concerns once again resurfaced following worse than expected job report and problems pertaining to Hungary. These problems once again questioned crude's demand in coming months. Crude would have registered weekly gains if not for Friday's losses.
On Friday, crude-oil futures for light sweet crude for July delivery closed at $71.51/barrel (lower by $3.1 or 4.1%). For the week, prices shed 3.3%.
For the month of May, crude shed 14%. It was the biggest monthly drop for crude since December 2008. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 1.8%.
In the currency market on Friday, the dollar stayed strong for almost the entire day and the dollar index ended the day with a 1% gain.
Among economic reports for the day, The Labor Department in US reported on Friday, 04 June 2010 that nonfarm payrolls grew by a seasonally adjusted 431,000 in May, but virtually all the new jobs were temporary jobs at the U.S. Census, leaving private-sector hiring very weak. Excluding 411,000 temporary Census workers, payrolls rose by 20,000 in May. The payrolls growth came in weaker than the 540,000 increase expected. The nation's unemployment rate fell to a seasonally adjusted 9.7% in May from 9.9% in April. Market had been expecting the jobless rate to sink to 9.8%.
The Dow ended the day with a loss of 324 points on Friday. Market participants sold stocks learning that officials from Hungary stated that economic conditions in their country are grave and that the country might be the next one in defaulting on its debt. In addition, the country does not plan to put austerity measures in place, leading many wonder whether the European Union will have to provide a bailout.
In the latest weekly inventory report, The Energy Department reported on Thursday that there was a decline of 1.9 million barrels in oil stockpiles in the week ended 28 May. Gasoline inventories decreased by 2.6 million barrels. Stocks of distillates, which include heating oil and diesel, increased by 500,000 barrels.
Among other energy products, reformulated gasoline for July delivery lost 9 cents, or 4.1%, to $1.99 a gallon. That settlement brought weekly losses to 2%.
Natural gas for July delivery added 11 cents, or 2.3%, to $4.79 per million British thermal units, hitting a fresh three-month high on Friday. On the week, natural-gas prices have risen 10%.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Market may tumble on weak global stocks; RCom eyed
The market may slump after disappointing US jobs data and concerns over Hungary's debt problems rattled world stocks. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicated that the Nifty could tumble 121.50 points at the opening bell.
Among the stock specific action, shares of state-run oil market companies will be in focus ahead of the meeting of an empowered group of ministers (EGoM) today, 7 June 2010, to consider the Kirit Parikh committee recommendations on decontrol of fuel prices. The PSU OMC stocks had risen sharply over the past few days on expectations that the government may partially decontrol fuel prices. The Kirit Parikh committee had in February 2010 recommended freeing pump prices of petrol and diesel and raising kerosene prices by Rs 6 a litre and cooking gas prices by Rs 100 a cylinder.
India's second largest mobile services provider by sales Reliance Communications (RCom), burdened by debt and the cost of rolling out 3G services, said its board had agreed to sell up to 26% of the firm. RCom said its board had approved the issue of equity to strategic or private equity investors at a premium to the prevailing market price. The RCom stock had jumped 14% last week, with speculation rife that Abu Dhabi's Etisalat and South Africa's MTN could be potential partners. However, MTN had denied merger talks with the firm.
Asian stock markets tumbled on Monday, after Wall Street on Friday closed at its lowest level since February 2010, spooked by disappointing non-farms payroll data and concerns over Hungary's debt problems. The key benchmark indices in China, South Korea, Singapore, Japan, Indonesia, Hong Kong and Taiwan fell by between 1.43% to 4.01%.
US Stocks fell to their lowest close since February on Friday after May's jobs figure slammed investors already reeling from worry over another developing debt crisis, this time in Hungary. The Dow Jones Industrial Average dropped 323.31 points, or 3.15% to 9,931.97. The Standard & Poor's 500 Index lost 37.95 points, or 3.44% to 1,064.88. The Nasdaq Composite Index tumbled 83.86 points, or 3.64% to 2,219.17.
The latest data showed the US economy added fewer-than-expected jobs last month, with a large portion of those being temporary hirings for the US Census. The Labor Department said the US economy added 431,000 jobs in May 2010, far short of the 513,000 that Wall Street had expected. The unemployment rate dropped to 9.7% in May from 9.9% in April.
Europe's sovereign debt troubles could spread flared again after a Hungarian official said the country was at risk of a Greek-style crisis, driving the euro to a more than four-year low against the dollar. Hungary isn't a euro member.
Back home, the government after trading hours on Friday said all listed companies are required to maintain a minimum public float of 25%. Existing listed companies having less than 25% holding have to reach the stipulated level by an annual addition of not less than 5% to public holding, it said.
The monsoon rains were 11% below normal in the week to 2 June 2010, the weather office said on Thursday, 3 June 2010. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July. The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
Last month, Australia's weather bureau said the El Nino weather pattern was over. El Nino is caused by an abnormal warming of the eastern Pacific Ocean and can play havoc with weather patterns across the Asia-Pacific region.
The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
Data last week showed business activity remained strong for India's vast services sector in May 2010, with a key gauge growing for a 13th consecutive month even as some momentum was lost over the previous month. The HSBC-Markit Business Activity Index stood at 58.2 in May 2010 from a 21-month high of 62.1 in April 2010. A reading above 50 indicates expansion. Services make up about 55% of India's $1.2 trillion economy.
HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
On a flip side, another data showed that the food articles index rose 16.55% in the year to 22 May 2010, accelerating from previous week's rise of 16.23%. The primary articles index, which also includes food articles, rose 16.89%, higher than previous week's 15.90% rise. The fuel price index increased to 14.14 % versus 12.08% rise in the previous week.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
The RBI expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
Meanwhile, a revenue bounty for the government from the sale of telecom spectrum would help bring down fiscal deficit in the current financial year.
Investors will eye the first installment of the corporate advance tax payment which will give some clue about Q1 June 2010 corporate results. The first installment of corporate advance tax falls due on 15 June. The combined net profit of a total of 3,572 companies rose 13.7% to Rs 87,241 crore on 24.70% rise in sales to Rs 9,27,168 crore in the quarter ended March 2010 over the quarter ended March 2009.
The key benchmark indices rose for the third straight day on Friday, 4 June 2010 as Asian stocks recovered. The BSE 30-share Sensex jumped 95.36 points or 0.56% to 17,117.69 on Friday.
Foreign institutional investors (FIIs) on Friday bought stocks worth a net Rs 100.91 crore, as per provisional data from the stock exchanges. Domestic funds sold shares worth a net Rs 126.61 crore.
Euro zone debt worries caused massive outflow of foreign funds from India recently as investors shunned risk. Foreign funds sold shares worth a net Rs 185.86 crore in the first four trading sessions this month, as per data from the stock exchanges. Foreign institutional investors (FIIs) had dumped shares worth a net Rs 12071.14 crore in May 2010.
Domestic funds have bought stocks worth a net Rs 328.17 crore in the first four days this month. Domestic funds bought stocks worth a net Rs 6361.17 crore in May 2010
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