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Sunday, September 30, 2012
FIIs invest over Rs 90bn in Indian equities this month
Foreign Institutional Investors (FIIs) have pumped in more than Rs. 90bn (~US$1.67bn) in the country's equity market so far this month. Between Sept. 1 and Sept. 21, FIIs were gross buyers of Rs. 390.37bn, while they sold equities totaling Rs. 298.92bn, translating into a net investment of Rs. 91.45bn, according to SEBI data. FIIs also invested Rs. 9.09bn in the debt market during the period under review. FIIs investment in the country's equity market has reached to Rs. 722.15bn (US$14bn) so far in 2012 while pouring in Rs. 254.27bn into the debt market. The acceleration in FII Inflows into Indian markets has been mainly on account of the slew of reform measures announced by the Government, including permitting up to 51% FDI in multi-brand retail and allowing foreign carriers to buy up to 49% stake in domestic airlines. FII inflows are likely to continue in next 6-8 months if the Government remains on the path of reforms. The BSE Sensex has gained ~1.5% so far this month and closed at 18,752.83 points on Friday. Separately, a report by UK's Barclays Capital says that India may get US$2bn in additional FII inflows per year in the medium term after the Government last week cut the withholding tax on overseas borrowing by local firms. The tax cut would reduce the cost of overseas borrowing by 75-100 bps for companies, assuming current borrowing costs of Libor+500 bps, Barclays Capital says, adding that FII inflows would have a significant impact given India faces a negative balance of payments (BoP) of ~US$15bn. CWC supports govt on reforms; meets to chalk out strategy ahead
Rupee rises to 5-month high on risk appetite
The rupee on Friday rose to nearly a five-month high after the Government retained its FY13 market borrowing programme for the second half of FY13 and ruled out additional borrowings during the rest of the year. The Government on Thursday said that it would borrow Rs. 2 trillion via bonds in the second half of FY13, which begins on October 1. That is in line with the budget estimate. Economists are still skeptical that the Government will be able to meet its fiscal deficit estimate of 5.1% of GDP. Already, the Government's subsidy burden is running higher than budget estimate. Average borrowings via bonds sales will be Rs. 120-130bn per week between October and February. The Government is due to sell Rs. 150bn of bonds this week, taking its borrowings in the first six months of FY13 to Rs. 3.7 trillion. Meanwhile, Fitch Ratings has cut its 2012 growth forecasts for India to 6% from 6.5%. It has expressed concern over the Government's economic and investment policy weighing down business confidence. It sees budget deficit at 8.5% of GDP. Fitch has also cut its forecast for GDP growth in the major advanced economies by 0.2% in 2012 (to 1%) and 0.3% in 2013 (to 1.4%). The global debt ratings agency has revised down its expectations for the eurozone to a 0.5% contraction in 2012 and just 0.3% growth in 2013. Fitch's US GDP forecast remains unchanged at a growth of 2.2%/2.3%. In overseas currency trades, the euro rose for a second day after Spain said it will meet its budget deficit target for this year and cut estimate for next year. The 17-nation currency headed for a second weekly decline versus US dollar. The Australian dollar advanced on speculation that Chinese authorities will add to stimulus measures. The rupee is headed for its strongest quarterly gain since 2009 after FII inflows accelerated in the wake of the Government's decision to unveil a spate of economic reforms to boost GDP growth. FII inflows into Indian equities totaled US$3.5bn this month through Sept. 26, the biggest increase since February. The rupee is up ~5.% this quarter. This is the biggest three-month gain since June 2009 and the best performance in Asia. It touched 52.5675 earlier, the strongest level since April 30, and has gained 5.4% in September. The rupee has rebounded 8.8% from a record low of 57.3275 per dollar touched June 22. Meanwhile, the BSE Sensex is up 7.9% this month, headed for the biggest gain since January. The Sensex has rallied 4.3% since Sept. 13 after Prime Minister Dr. Manmohan Singh ended a freeze on diesel prices and permitted FDI in multi-brand retail and aviation sectors.
Weekly Newsletter - Sep 30 2012
Indian equity indices managed to extend the current winning streak, belying expectations of some softening, as FII inflows continued unabated. The Government too carried forward its reforms agenda by announcing relief package for the debt-ridden power sector. Also, the Centre said it will stick to its borrowing plan for FY13 and ruled out extra debt sales. India’s benchmark 10-year bonds advanced the most in three weeks. The rupee rose versus the US dollar to touch a five-month high, while the stock indices hit 16-month highs. The broader market too joined the party. However, the prospects for economic growth remain far from bright as inflation is sticky, borrowing costs remain high and capex cycle is yet to revive. The global backdrop also remains fragile despite repeated attempts by policymakers to rein in growth slowdown. From next week, short-term focus will be on latest corporate earnings even as markets await further policy action from the governments. Management guidance will be closely followed. One must exercise some caution at higher levels as there is every chance of a small correction after the recent spike.
Survey shows Indian companies more sanguine in Q3
According to a Thomson Reuters/INSEAD survey, Indian companies were more positive in Q3 than they were in the previous quarter, reports said. The fact that the government stepped up on reforms recently by announcing a diesel price hike and permitting FDI in various sectors may have lifted sentiment. The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 62 in the third quarter from 69 in the second quarter of 2012, having peaked at 80 in the first quarter of 2011. A reading above 50 indicates an overall positive outlook. The index surveyed 200 of the Asia-Pacific's top companies in 11 economies. Sectors focused on exports such as autos, technology and shipping were the least optimistic in the survey whereas those exposed to domestic growth were much more sanguine. Indonesia and the Philippines had the highest score in the survey of 100, followed by Malaysia and Singapore. India was at 80. Meanwhile, China was at its lowest at 50, since the survey began in 2009. The survey showed sentiment in Asia's property sector improved significantly, with five of 10 companies surveyed responding with a positive view on their outlook, while the others were neutral. Developers in Singapore and the Philippines were the most optimistic. Sentiment among Australian companies rose to 50 from 42 with most respondents reporting that new orders were steady or higher. Japanese respondents were the least upbeat since the fourth quarter of last year. Seventeen companies reported a neutral outlook, two were negative and one positive. The prime concern cited by 54 of the 97 respondents in the survey was global economic uncertainty, followed by 15 companies citing "other" risks that included domestic uncertainty and oil prices. Eight companies said rising costs were the key risk.
Gold outshines equity, other asset classes: ASSOCHAM
Gold has witnessed a golden era in terms of return to investors, while the share market has given negative returns on investment in the last three years, an ASSOCHAM study has noted. Those who invested in gold during August-September in 2009 have seen their money grow more than double up to August-September this year, thanks largely to the yellow metal becoming the first choice for investors not only in India but all round the globe.On the other hand, investors in the equity market have seen their wealth erode in the same period. The erosion has been seen more for the retail investors who generally invest in the small mid-cap stocks. Property which is generally out of reach for the small investors, too has seen good returns but not as much as gold, which has outshone all other investment avenues when the global economy has been through tumultuous times. Standard gold was selling at around Rs. 15,000-15,500 per ten grams in India just about three years ago. Today it is well above Rs. 32,000 per ten grams- giving more than double the returns on investment in three years. The worst performer has been the equity market. The high point of the benchmark Sensex in 2009-10 was 17,711. Today, it is trading in the same range. So, the investment in equity has not even given a simple bank interest rate equivalent and are negative in actual yield. In fact, on a five-year horizon, the equity investors have lost significantly. The high point of Sensex in fiscal 2007-08 was 20873 whereas it is range-bound between 17,000-18,000 now. "Net-net, gold has really outdone other asset classes and it is likely to remain an attractive bet as long as uncertainty over the global economy stays" ASSOCHAM Secretary General D S Rawat said. Rawat said whether it is local investor or global investors, they have all gone by the conventional wisdom of gold being the safest bet when there is uncertainty about all other investment avenues. On the five- year horizon, gold has given even more handsome results to the investors. The precious metal was selling around Rs. 9,500 per ten grams five years ago in September, 2007. So, the returns on this time horizon are about 350 per cent. Its prices have seen a sharp rise even in the London Metal Exchange (LME). It was being traded in the range of USD 900-1000 per ounce in 2009 and now it is selling above USD 1700 ounce. The property prices, according to the ASSOCHAM study, have given average yield of 40-50 per cent on all-India basis. It is true that prices in some pockets of big cities like Delhi, Mumbai, Chennai, Gurgaon have doubled in the past three years. But these cases are far and few. There are also cases in cities like Hyderabad where the investors have not got the yield at simple interest rates in property.
Govt sticks to H2 borrowing plan...Rules out extra debt sales
The Government has stuck to its FY13 market borrowing programme for the second half of the ongoing fiscal year and ruled out additional borrowings during the remainder of FY13. The Government on Thursday said that it would borrow Rs. 2 trillion in the second half of FY13, in line with the budget estimate. Economists are still skeptical that the Government will be able to meet its fiscal deficit forecast of 5.1% of GDP for FY13. Already, the Government's subsidy burden is running higher than budget estimates. Average borrowing via bonds sales will be Rs. 120-130bn per week between October and February. The Government is due to sell Rs. 150bn of bonds this week, taking its borrowings in the first six months of FY13 to Rs. 3.7 trillion. The rupee rose to a near five-month high on Friday while the benchmark 10-year bond yield fell as much as 5 basis points to 8.11%. The rupee rose to a high of 52.55, a level not seen since May 1. It was trading at 52.62 in recent trades versus the previous close of 53.01/02.
Govt announces financial restructuring of Discoms
The Cabinet Committee on Economic Affairs on Monday approved the scheme for Financial Restructuring of State Distribution Companies (Discoms). The scheme contains various measures required to be taken by State Discoms and State Governments for achieving the financial turnaround of the Discoms by restructuring their debt with support through a transitional finance mechanism by the Central Government. The scheme is effective as soon as notified and will remain open upto 31st Dec 2012 unless extended by the GOI. Support under the scheme will be available for all participating State owned Discoms on fulfilling certain mandatory conditions as outlined in Part C of the Scheme. The salient features of the scheme are as follows: 50 percent of the outstanding short term liabilities upto March 31, 2012 to be taken over by State Governments. This shall be first converted into bonds to be issued by Discoms to participating lenders, duly backed by State Governments guarantee. Takeover of liability by State Governments from Discoms in the next 2-5 years by way of special securities and repayment and interest payment to be done by State Governments till the date of takeover. Restructuring the balance 50 percent Short Term Loan by rescheduling loans and providing moratorium on principal and the best possible terms for this restructuring to ensure viability of this effort. The restructuring/reschedulement of loan is to be accompanied by concrete and measurable action by the Discoms/States to improve the operational performance of the distribution utilities. For monitoring the progress of the turnaround plan, two committees at State and Central levels respectively are proposed to be formed. Central Government will provide incentive by way of grant equal to the value of the additional energy saved by way of accelerated AT&C loss reduction beyond the loss trajectory specified under RAPDRP and capital reimbursement support of 25 percent of principal repayment by the State Governments on the liability taken over by the State Governments under the scheme. The accumulated losses of the state power distribution companies (Discoms) are estimated to be about Rs. 1.9 Lakh crore as on 31st March, 2011. In order to look into the issues of State Discoms and to suggest a strategy for the turnaround of the distribution sector, Planning Commission constituted an Expert Group under the chairmanship of Sh. B K Chaturvedi, Member (Energy), Planning Commission. The approved scheme is formulated based on the report of the Expert Group and deliberations in the PMO and Ministry of Finance.
2G scam...SC clarifies on Govt's presidential reference
The Supreme Court (SC) on Thursday said that public auction is not the only permissible option for allocation of natural resources and that its Feb. 2 verdict is limited to the allocation of mobile-phone permits. The Government should try to distribute all scarce natural resources with an aim to bring in more revenue, a five-judge panel headed by Chief Justice S.H. Kapadia said. "Profit maximisation cannot be only basis for allocating natural resources. The clarification from the apex court, however, has no bearing on the 2G order," the Bench said in its statement today. The Government had on April 12 moved the Presidential Reference signed by the then President Pratibha Patil in which eight questions were raised, including whether there could be judicial interference in policy matters, vis-a-vis disposal of natural resources and investments made by foreign investors under multi and bilateral agreements. The reference had sought the apex court's opinion on whether the judgement is required to be given retrospective effect so as to unsettle the licences issued for 2G spectrum and allocated after 1994 till 2008. In February this year, the apex court had canceled 122 telecom licences granted in early 2008, saying that money power and the ability to manipulate the system helped bidders win new telecom licenses when A. Raja was the Telecom Minister. The Government made a presidential reference to the Supreme Court, seeking clarity on the universal applicability of the verdict. The Supreme Court clarified that its opinion doesn't have a bearing on its 2G order, which was only restricted to telecom spectrum. The five-judge bench said "which policy is best is the wisdom of the executive, since the judiciary doesn't have the expertise to decide which method is suitable for disposal of a particular natural resource." "Merely because there is scope for potential abuse of the process, the policy of auction can't be declared as the only route for disposal of natural resources," the judges added. The Supreme Court's opinion today is not binding on the Government, or on other courts.
Friday’s gaining trend works for 4th week; Mkts wrap week in green
The Indian markets witnessed an action packed trading session for the fourth consecutive week with the Sensex rising 0.05% and the Nifty up by 0.21% for the week ended September 28, 2012. Major Headlines of the Week: S&P cuts India growth forecast to 5.5% Inflows of $2 bn/yr eyed after cut in overseas borrowing tax FDI up 60% to $1.76 bn in July Domestic pharmaceuticals market up 16.9% during August Core sector growth slows to 2.1% in Aug 2012 3rd downgrade in a row; Fitch cuts India growth forecast to 6%
Sensex vaults 7.64% in September as Govt kickstarts economic reforms
Key benchmark indices edged higher on last trading session of the month and the quarter, with market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Thursday, 27 September 2012. The 50-unit S&P CNX Nifty attained its highest closing level in more than 14-1/2 months. The barometer index, BSE Sensex, attained its highest closing level in more than 14 months. The Sensex jumped 183.24 points or 0.99%, off close to 105 points from the day's high and up about 65 points from the day's low. The market breadth was positive. From a recent high of 18694.41 on 25 September 2012, the Sensex had lost 114.91 points or 0.61% in two trading sessions to settle at 18,579.50 on Thursday, 27 September 2012. The Sensex advanced 1,333.18 points or 7.64% in September 2012 as government initiated economic reforms. The barometer index advanced 1,332.76 points or 7.64% in Q2 September 2012. The Sensex has jumped 3,307.82 points or 21.4% in calendar 2012 so far (till 28 September 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,626.88 points or 23.96%.
Trading may be choppy in a truncated week
The market may remain volatile next week as investors may continue to book profits after recent run up in share prices. The stock market will remain closed on Tuesday, 2 October 2012, on account of Mahatma Gandhi Jayanti. Automobile and cement stocks will be focus as companies from these two sector start unveiling monthly sales volume data for September 2012 from Monday, 1 October 2012.
Volatile week ends with gains
The market managed to end the volatile week on a positive note. The market fell in three out of five trading sessions. Most of the gains were recorded in the last trading session of the week on Friday, 28 September 2012, when the market rose on the back of a global rally that was triggered by Spain announcing a crisis budget for 2013 on Thursday, 27 September 2012, based mostly on spending cuts. The BSE Sensex rose 9.91 points or 0.05% to 18,762.74. The 50-unit S&P CNX Nifty rose 12.15 points or 0.21% to settle at 5,703.30. The BSE Mid-Cap index rose 2.72% and the BSE Small Cap index rose 3.06%. Both these indices outperformed the Sensex.
Thursday, September 27, 2012
Markets end in red on Sep F&O expiry day
The key benchmark indices closed the September series in the red zone with the Sensex slipping 53 points while the Nifty lost 14 points in trade today. Major Headlines of the day: Promoters hike stake in Max India UB Group extends rally on stake sale talks to Diageo Lupin, Ultratech to take place of SAIL, Sterlite on NSE Tata Power surges as CERC set for final hearing on tariff hike Domestic pharmaceuticals market up 16.9% during August
Sensex, Nifty at one-week closing low
Key benchmark indices edged lower in volatile trade as traders rolled over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expired today, 27 September 2012. Both the barometer index, BSE Sensex, and the 50-unit S&P CNX Nifty reached their lowest closing level in one week. The Sensex lost 52.67 points or 0.28%, up about 27 points from the day's low and off about 156 points from the day's high. The market breadth was positive. BSE Small-Cap and Mid-Cap indices both edged higher. Key benchmark indices edged lower for the 2nd day in a row today, 27 September 2012. The Sensex has lost 114.91 points or 0.61% in the preceding two trading sessions from a recent high of 18694.41 on 25 September 2012. The Sensex has gained 1,149.94 points or 6.6% in this month so far (till 27 September 2012). The Sensex has jumped 3,124.58 points or 20.22% in calendar 2012 so far (till 27 September 2012). From a 52-week high of 18,866.87 on 21 September 2012, the Sensex has fallen 287.37 points or 1.52%. From a 52-week low of 15,135.86 on 20 December 201, the Sensex has risen 3,443.64 points or 22.75%.
Sensex, Nifty at one-week closing low
Key benchmark indices edged lower in volatile trade as traders rolled over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expired today, 27 September 2012. Both the barometer index, BSE Sensex, and the 50-unit S&P CNX Nifty reached their lowest closing level in one week. The Sensex lost 52.67 points or 0.28%, up about 27 points from the day's low and off about 156 points from the day's high. The market breadth was positive. BSE Small-Cap and Mid-Cap indices both edged higher. Key benchmark indices edged lower for the 2nd day in a row today, 27 September 2012. The Sensex has lost 114.91 points or 0.61% in the preceding two trading sessions from a recent high of 18694.41 on 25 September 2012. The Sensex has gained 1,149.94 points or 6.6% in this month so far (till 27 September 2012). The Sensex has jumped 3,124.58 points or 20.22% in calendar 2012 so far (till 27 September 2012). From a 52-week high of 18,866.87 on 21 September 2012, the Sensex has fallen 287.37 points or 1.52%. From a 52-week low of 15,135.86 on 20 December 201, the Sensex has risen 3,443.64 points or 22.75%.
Wednesday, September 26, 2012
BSE Bulk Deals to Watch - Sep 26 2012
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price ** 26/9/2012 524412 Aarey Drugs AJITKUMAR JOGENDARPRASAD SINGH B 123261 50.50 26/9/2012 530901 ACIL PRAKASHKUMAR DEVSHILAL SHETH S 1410401 0.13 26/9/2012 507852 Addi Inds-$ SEWASTUTI FINANCE P.LTD B 266716 5.37 26/9/2012 507852 Addi Inds-$ YAMUNOTRI FINANCIAL P.LTD. S 266716 5.37 26/9/2012 533163 Arss Infra Proj KHIMRAJ SONAJEE BAGRECHA B 137329 51.12 26/9/2012 533163 Arss Infra Proj CROSSEAS CAPITAL SERVICES PRIVATE LIMITED B 271361 50.64
Sensex recovers in late trade…Metals down; Defensives up
Frontline Indian stock indices managed to claw their back from the intraday lows in late afternoon trade but closed marginally lower, notwithstanding weakness in global markets and concerns about the eurozone debt crisis. Still, market participants used weakness across global markets to pare some of their bullish bets in Large-Cap stocks after the recent rally to 14-month highs. The BSE Sensex and the NSE Nifty closed about a third of a percent down each on a provisional basis. The BSE Sensex ended at 18,632, down 62 points over the previous close. It had earlier touched a day's high of 18,670 and a day's low of 18,573. It opened at 18,644.
Markets end in red ahead of F&O expiry
The markets remained under pressure for the entire day on account of weak global cues. The Sensex ended 62 points lower while the Nifty fell 10 points in trade today. Major Headlines of the day: Credit Suisse upgrades ACC Cement transportation by railways falls 11.8% SEBI approves govt stake hike; IFCI hits weekly low Govt likely to relax highway bid norms
Market drifts lower as euro-zone debt worries resurface
Key benchmark indices edged lower as global growth jitters, euro-zone debt worries and ongoing territorial dispute between China and Japan hit investor sentiment adversely. Both the BSE Sensex and the 50-unit S&P CNX Nifty reached their lowest closing level in almost one week. The barometer index, BSE Sensex, fell 62.24 points or 0.33%, up about 59 points from the day's low and off about 38 points from the day's high. Metal stocks fell as global growth jitters cast doubt on future demand for commodities. Tata Steel dropped on euro zone debt worries. BSE Small-Cap and Mid-Cap indices both edged higher. The market breadth was even. The Sensex has gained 1,202.61 points or 6.9% in this month so far (till 26 September 2012). The Sensex has jumped 3,177.25 points or 20.56% in calendar 2012 so far (till 26 September 2012). From a 52-week high of 18,866.87 on 21 September 2012, the Sensex has fallen 234.70 points or 1.24%. From a 52-week low of 15,135.86 on 20 December 201, the Sensex has risen 3,496.31 points or 23.10%.
Daily News Roundup - Sep 26 2012
United Spirits and Diageo Plc confirmed that Diageo is in discussion with United Spirits Ltd and United Breweries (Holdings) in respect of a possible transaction for Diageo to acquire an interest in United Spirits. (BL) The partnership between Bajaj Auto Limited and the alliance of global auto giants Renault and Nissan to manufacture and market small cars has been shelved. (BS) Bajaj Electricals Ltd is scouting for acquisition, including brands in electricals and lighting with a corpus of Rs10bn. (BL) According to a wage settlement agreement signed between the Maruti Suzuki and the Gurgaon based Maruti Udyog Kamgar Union, permanent workers at the Gurgaon unit will be given an increment of ~Rs18,000 in their monthly salary spread over a period of three years. The wage agreement is effective retrospectively from April 1. (BS)
Tired after a climb
"When we are tired, we are attacked by ideas we conquered long ago" - Friedrich Nietzsche. Investors are taking a breather after the recent rally, which means large-cap stocks may remain rangebound before making a decisive move. The broader market seems to be showing more signs of life though this category warrants extra caution. What we have in store is a lower opening. Stick to a stock-centric approach as the main indices may consolidate. Things may turn wee bit volatile ahead of Thursday’s F&O expiry. Global cues are again weak. Asian markets are mostly in the red. US markets closed at a two-week low following a Fed official's hawkish comments. Earlier, US stocks had gained in the wake of encouraging data on consumer confidence and home prices.
What is CRR, repo and reverse repo rate?
What is CRR? Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system. Commercial banks are required to maintain with the RBI an average cash balance, the amount of which shall not be less than 3% of the total of the Net Demand and Time Liabilities (NDTL), on a fortnightly basis and the RBI is empowered to increase the rate of CRR to such higher rate not exceeding 20% of the NDTL. What is Reverse Repo rate? Reverse Repo rate is the rate at which the RBI borrows money from commercial banks. Banks are always happy to lend money to the RBI since their money are in safe hands with a good interest. An increase in reverse repo rate can prompt banks to park more funds with the RBI to earn higher returns on idle cash. It is also a tool which can be used by the RBI to drain excess money out of the banking system. What is a Repo Rate? The rate at which the RBI lends money to commercial banks is called repo rate. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI. A reduction in the repo rate helps banks get money at a cheaper rate and vice versa. The repo rate in India is similar to the discount rate in the US.
Markets may start lower on negative Asian cues
Indian markets may open in the red zone led by negative Asian cues. SGX Nifty is also trading 19.50 points lower. Events for the day: Ex date for dividend of Rajesh Exports. Ex date for final dividend of Garnet International.
Market may edge lower in early trade on weak Asian stocks
The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 23 points at the opening bell. The market may remain volatile in the immediate future as traders roll over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expire tomorrow, 27 September 2012. Asian markets fell on Wednesday with sharp losses in Japan's Nikkei Average as many firms started to trade without rights to the latest dividend payouts, while global growth fears hit resource shares across the region. Meanwhile, an unexpected resignation by Maharashtra Deputy Chief Minister on Tuesday, 25 September 2012, over allegations of corruption threw the Congress-Nationalist Congress Party (NCP) government in Maharashtra into a fresh crisis as the resignation of the powerful NCP leader in Maharashtra was followed by other NCP ministers in the Maharashtra state government also sending their resignations. NCP chief Sharad Pawar said that there is no threat to the state government in Maharashtra. Maharashtara Chief Minister Prithviraj Chavan has refused to accept Ajit Pawar's resignation right away. Chavan said that he will take a decision on the issue only after consultations with his ministers from both the Congress as well as the NCP. At the Centre, NCP is a part of the Congress led UPA government. NCP has 9 MPs.
Tuesday, September 25, 2012
Sensex struggles to a flat close…Metals fall, FMCG gain
The main Indian equity benchmarks ended with slender gains on Tuesday at the end of another rangebound session, as market participants continued to be cautious after pushing the BSE Sensex to 14-month high recently. Earlier, the main Indian indices had opened with a slightly positive gap, outperforming other Asian peers as the Government continued to take important policy measures aimed at restoring business confidence in a slowing economy. Shares of select power-related companies gained after the Cabinet on Monday unveiled steps to address the power sector's long-standing problems.
BSE Bulk Deals to Watch - Sep 25 2012
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price ** 25/9/2012 524412 Aarey Drugs DEEPIKA JASMIN SHAH B 161668 48.99 25/9/2012 524412 Aarey Drugs DEEPIKA JASMIN SHAH S 186200 48.36 25/9/2012 524412 Aarey Drugs AJITKUMAR JOGENDARPRASAD SINGH S 90301 49.87 25/9/2012 531568 Ashutosh Paper NIKHIL BANSAL S 60000 42.50 25/9/2012 506285 Bayer Crop BILAG INDUSTRIES PRIVATE LIMITED B 5982948 1002.85 25/9/2012 506285 Bayer Crop BAYER CROPSCIENCE AKTIENGESELLSCHAFT S 4082948 1002.85
Markets end with modest gains
Indian stocks rose marginally higher with no major action on the D street owing to profit booking and selling pressure backed by subdued global cues Sensex rose 21 points and the Nifty gained 4 points in today's trade. Major Headlines of the day: 3 oil cos’ bid $5 billion for ConocoPhillips oil assets IFCI sells shares of Ansal Properties Banks to meet KFA on Sept 27 to discuss plan of action FDI up 60% to $1.76 bn in July United Spirits confirms in talks with Diageo; stk up over 4%
Market ekes out small gains
Key benchmark indices eked out small gains as index heavyweights ITC and Reliance Industries (RIL) edged higher. The barometer index, BSE Sensex, advanced 21.07 points or 0.11%, up about 58 points from the day's low and off close to 96 points from the day's high. Data showing that foreign funds remained net buyers of Indian stocks on Monday, 24 September 2012, underpinned sentiment. The market breadth was positive. BSE Small-Cap and Mid-Cap indices both outperformed the Sensex. The Sensex has gained 1,264.85 points or 7.26% in this month so far (till 25 September 2012). The Sensex has jumped 3,239.49 points or 20.96% in calendar 2012 so far (till 25 September 2012). From a 52-week high of 18,866.87 on 21 September 2012, the Sensex has fallen 172.46 points or 0.91%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,558.55 points or 23.51%.
Monday, September 24, 2012
Daily News Roundup - Sep 24 2012
BPCL which is setting up its first propylene unit in Kochi, said it is ready to offer 51% stake in the Rs60bn project to its Korean joint venture partner LG Chemicals. (ET) After cutting its base rate by 25 basis points, State Bank of India reduced its benchmark prime lending rate (BPLR) by a similar margin. The public sector bank’s BPLR now stands at 14.5%. (BS) Diageo Plc is in advanced talks to buy a stake in United Spirits. (BS) Reliance Industries and its partner BP plan to surrender two more exploration blocks, reducing their tally to 14 from 21 a year ago. (ET)
Changing times
Sometimes, the times we can’t change end up changing us. – Anonymous. UPA, which had promised plenty but had delivered little until recently, finally decided to shun inertia and restore some credibility by unleashing a slew of ‘reforms’. The question now is whether these are the real reforms our economy badly needs? Brace for a few capital market-friendly steps to keep FIIs interested in India. Insurance, IT, Telecom and NBFCs could see some action amid reports that the Centre might ease certain rules to boost these sectors. The opening is not likely to be good though, with global cues not being supportive. Asian stock benchmark has retreated from a four-month high. US stock indices on Friday broke a two-week winning streak. European stock markets moved higher on reports Spain may be preparing the ground for a bailout request.
Market may open lower on weak Asian stocks
The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 25 points at the opening bell. Volatility may remain high this week as traders roll over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expire on Thursday, 27 September 2012. Asian shares edged lower on Monday, with metal-related firms weak, while some Japanese stocks suffered from a rising yen and growing tension between China and Japan. State Bank of India (SBI) Saturday, 22 September 2012, said it has cut its benchmark prime lending rate by 25 basis points to 14.5% per annum with effect from 27 September 2012. The announcement comes close on the heels of the bank cutting its base rate by 25 basis points to 9.75% with effect from 20 September 2012.
Sunday, September 23, 2012
Saturday, September 22, 2012
Bangalore Luxury Homes... A Billion Dollar Market:JLL
Currently, the absorption of residential spaces in the city is skewed towards the Rs. 3000–7500/sq.ft. price band, but there is also significant momentum in the price band of Rs. 7500/sq.ft. (4) and above. Bangalore’s luxury residential market seen a major transformation in the recent past, with the Kingfisher Tower setting a new capital values benchmark (northwards of Rs. 30,000/sq.ft) in the super luxury category. The new dynamics being seen now have been referred to as the ‘coming of age’ of Bangalore’s residential market, and I agree with this definition. We are certainly witnessing a remarkable maturing process here. According to our data, residential property capital values in Bangalore have increased by 25% since the trough in mid–2009, not factoring inflation. Currently, the absorption of residential spaces in the city is skewed towards the Rs. 3000–7500/sq.ft. price band, but there is also significant momentum in the price band of Rs. 7500/sq.ft. (4) and above. The upcoming supply in this category of homes is a clear indication of this trend. The short-term economic inhibitors currently at play across the country have definitely had their effect on buyers’ sentiments, but Bangalore’s residential market is still one of the most resilient from a long haul perspective.
Facebook could capture 50% of global search market in just few years : Search & Social Survey
CEO of Facebook Mark Zuckerberg has made it clear that Facebook has every intention of giving Google a run for its money by marrying social networking with one of the most valuable areas of the technology industry: Search. The Search market represents a “big opportunity” that Facebook is uniquely positioned to address, said Zuckerberg at a tech industry conference in San Francisco earlier this week. A global survey “Search & Social Survey (2011-2012)”, undertaken earlier in the year by leading independent digital marketing agency Greenlight, concluded Facebook could potentially capture close to a quarter of the Search market were it to launch its own search engine tomorrow, making it the second most utilised search engine in every major market except for China, Japan, and Russia, where it would occupy an uncontested third place. What’s more, the results from Greenlight’s survey also showed Facebook could increase its share to 50% within just a few years. However, the survey also indicated Google+ has been more successful than most may have initially speculated and as such, the agency concludes Google and Facebook will both be front and centre in ‘Social Search’. The survey also asked respondents if they clicked on advertisements or sponsored listings in Facebook. The alarming response was that 44% answered ‘never’. Facebook could capture close to 50% of the global Search market Greenlight surveyed 500 people - students, law enforcement professionals, medical staff, accountants, lawyers, the unemployed, and everyone in between, to ascertain how they engage with online advertising, search engines, and social networks, in order to glean insight into how consumers engage with marketers today, and formulate views on what the future might hold. The survey revealed 5% would 'definitely' use a future Facebook search engine if the firm were to launch one to rival Google's. The other extreme, those categorically saying they simply would not use a future Facebook search engine, totalled 26% of all respondents. Those responding in the 'Definitely' and 'Probably' camps totalled 17%. Those responding 'No' and 'Probably not', totalled 48%. “These stats therefore suggest Facebook could capture around 22% of the global Search market by simply launching its own search engine tomorrow morning (the 'Definitely', 'Probably', and half of the 'Don't know' respondents combined), says Andreas Pouros, chief operating officer at Greenlight. It wouldn't need to be a spectacular engine either, just well integrated into the Facebook experience and generally competent. What’s more, Greenlight’s results also suggest Facebook could increase that projected market share to a maximum of 50% within a few years by converting the least overtly loyal Google users over to them. However, that increase would need to come from the 27% of respondents who replied ‘Maybe, but only if it was better than Google and Bing’ ”. (Facebook already integrates Bing into its Search function, but it is a buried option in the navigational side-bar post query, so this really does not constitute its own search engine by any real definition). Google and Facebook will both be front and centre in 'Social Search' On the flip side, Greenlight found that Google's own social endeavours with Google+ might be more successful than most think. For instance, 23% of Google users have been +1'ing listings in Google's search results, giving Google lots of data about what people like. “When compared to the 35% of users that Greenlight’s survey found routinely 'like' a brand or company on Facebook, then it is not that significantly more than Google's social signal collection, particularly as 28% of respondents said they had no idea what '+1' actually meant, which will invariably decrease rapidly over time,” says Pouros. “Essentially, Greenlight’s research shows that Google and Facebook will both be front and centre in 'Social Search'.”
Weekly Newsletter - Sep 22 2012
Indian stocks ended near 52-week highs on the back of a ~2% surge on Friday. Indian stock indices were among the best-performing ones globally. This week’s ascent can be attributed entirely to the Government’s new-found enthusiasm on economic reforms. Last week’s announcements were followed up with formal notification of FDI norms for various sectors. The Government also slashed withholding tax on overseas borrowings to attract critical foreign capital flows, besides approving an equity market scheme for smaller investors. The rupee too benefited from the UPA’s reforms push. The issue of UPA Government’s stability was also settled after the Samajwadi Party said it will support the Congress-led regime from outside. With the troublemaker TMC out of the way, the Government seems all the more emboldened to go ahead with pending reforms. Markets could rise further if the bottlenecks to fresh domestic investments are removed. Global markets also need to be supportive. However, one must be careful as inflation remains sticky and the RBI may take a while before slashing rates. The external situation also remains fragile, especially in Europe and China.
Sensex tops global charts in an action-packed week; Nifty up 2%
The Indian markets closed an eventful week with the Sensex rising 1.56% and the Nifty up by 2.03% for the week ended September 21, 2012. Headlines for the Week: RBI cuts CRR by 25 bps, leaves key rates unchanged August consumer price inflation at 10.03% India’s fuel sales up 7.8% in August India to cut tax on overseas borrowing by local firms Govt OKs 51% FDI in Multi Brand Retail
BSE Small-Cap, Mid-Cap indices outshine Sensex
The market logged gains for third straight week on a slew of economic reforms announced by the government recently. The barometer index, BSE Sensex, reached its highest closing level in nearly 14 months. The S&P CNX Nifty attained its highest closing level in almost 14-1/2 months. The BSE Mid-Cap and the BSE Small-Cap indices outperformed the BSE Sensex. The market logged gains in two of four trading days during the week ended Friday, 21 September 2012. The stock market was closed on Wednesday, 19 September 2012, on account of Ganesh Chaturthi. The BSE Sensex gained 288.56 points or 1.56% to 18,752.83 in the week ended 21 September 2012, its highest closing level since 25 July 2011. The 50-unit S&P CNX Nifty surged 113.50 points or 2.03% to settle at 5,691.15, its highest closing level since 7 July 2011. The BSE Mid-Cap index advanced 3% and the BSE Small-Cap index gained 2.81% in the week. Both these indices outperformed the Sensex.
Expiry of September F&O contracts to trigger volatility
The government's next policy moves after easier foreign investment rules announced this week will dictate near term trend on the bourses. Volatility may remain high as traders roll over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expire on Thursday, 27 September 2012. Shares of sugar firms will be focus on buzz the government will announce reduction in subsidy on sugar made available to below-poverty-line (BPL) consumers under the public distribution system. The measure expected to be announced after a Cabinet Meeting on Tuesday, 25 September 2012, is aimed at reducing the government's good subsidy burden, reports suggest.
Market surges as Govt stands firm on economic reforms
Key benchmark indices surged on the last trading session of the week, with the market sentiment boosted by the government on Thursday notifying the rules for allowing greater foreign investment in retail, aviation and broadcasting sectors. The government's announcement during trading hours today, 21 September 2012, of a reduction on taxes on overseas loans of local companies as well as announcement of a plan offering tax relief to retail equity investors, also boosted sentiment. Easing of political worries also aided rally on the domestic bourses after Samajwadi Party (SP) chief Mulayam Singh Yadav hinted at continuing giving outside support to the UPA, saying he does not want communal forces to come to power. The barometer index, BSE Sensex, reached its highest closing level in nearly 14 months. The S&P CNX Nifty attained its highest closing level in almost 14-1/2months. The Sensex jumped 403.58 points or 2.2%, off close to 115 points from the day's high and up about 340 points from the day's low. The market breadth was strong. Higher global markets also underpinned sentiment on the domestic bourses.
Friday, September 21, 2012
Sensex slides as Govt faces heat on reforms
The Indian equity benchmarks extended losses to a second straight trading session as market participants continued to lock in profit on Dalal Street. The NSE Nifty ended below the 5600 mark but just managed to close above 5500. Market participants were anxious about mounting concerns about the worsening political situation in the country and lingering worries over the precarious global economic outlook. The honeymoon between the Trinamool Congress and the Congress party is over following bitter differences over the recently announced reform measures. The UPA Government is also under pressure from other political parties, including allies like DMK over its decision to allow FDI in multi-brand retail and the steep hike in fuel prices.
In defense of reforms
Attack is the best form of defense – Proverb. UPA II seems to have decided to shed inertia and go on the offensive, notwithstanding a nationwide strike against its reform measures and impending pull-out by Trinamool Congress. The Government is reportedly lining up more reform-oriented moves in the coming days to try and thwart the Opposition’s tirade. The Prime Minister is scheduled to address the nation on Friday to explain the Centre’s rationale behind recent reforms. The Government has already notified FDI in multi-brand Retail and Aviation. The start today will be positive as Asian markets are trading with a positive bias. US markets were largely flat while European indices closed lower.
Markets may open in green
The Indian markets may open on a positive note led by positive Asian cues. SGX Nifty is also trading 18 points higher. Events for the day: Ex date for final dividend of Global Offshore Services, Vivimed Labs. Ex date for dividend of Jindal Saw, Opto Circuits (India).
Market hits one week low on political worries
Key benchmark indices fell for the second straight day to hit lowest closing level in a week as weak global stocks and political crisis at home following Trinamool Congress, a key ally of the ruling UPA government deciding to withdraw its support to the government weighed on sentiment adversely. The barometer index, BSE Sensex, was down 146.76 points or 0.79%, up about 60 points from the day's low and off close to 95 points from the day's high. The market breadth was negative. Index heavyweight and cigarette maker ITC edged higher in volatile trade. Another index heavyweight Reliance Industries (RIL) dropped nearly 3%. IT stocks rose on a weak rupee. India's markets were closed Wednesday due to a religious holiday.
Wednesday, September 19, 2012
9 stocks that can give good returns
Microsec has come out with its 9 stocks from small and mid cap space. According to the research firm, Amara Raja Batteries, Cera Sanitaryware, Dhanuka Agritech, La Opala R G, PI Industries, Somany Ceramics, Tide Water Oil, Wimplast and Zensar Technologies are having the potential to give good returns to investors. Microsec has come out with its 9 stocks from small and mid cap space. According to the research firm, Amara Raja Batteries, Cera Sanitaryware, Dhanuka Agritech, La Opala R G, PI Industries, Somany Ceramics, Tide Water Oil, Wimplast and Zensar Technologies are having the potential to give good returns to investors. Amara Raja Batteries Ltd Amara Raja Batteries reported 32% YoY growth in its top-line at Rs6940 million. On a QoQ basis, top-line improved by ~3%. On account of better product mix and robust topline, EBITDA grew by a massive 76% YoY at Rs1200 million. Led by robust operational performance and higher other income, PAT grew by 95% YoY to Rs 760 million. In the past, auto industry has registered an extraordinary sales growth of ~30% in Original Equipment Manufacturer. As per SIAM, the overall industry is expected to grow around 9%-11% for FY13E. OEM segment contributed around 26 % of the total turnover in 2011- 12 in the replacement market and is expected to register a growth of 11-13 % in 2012-13. Going forward we expect the demand coming from replacement market which will drive the volume and margin for the company.
Tuesday, September 18, 2012
Daily News Roundup - Sep 18 2012
Tech Mahindra announced the acquisition of 51% stake in mobile value-added services provider Comviva Technologies, a Bharti Group company, for ~Rs2.6bn. (ET) Tata Motors Ltd’s global vehicle sales, including that of subsidiary Jaguar Land Rover, rose 13% in August from a year earlier. The company sold 97,225 units during the month. (BS) Reliance Industries Ltd has sought tripling of its KG-D6 gas price from April 1, 2014 after the current below market rate of $4.205 per mmBtu expires. (BL) Reliance Power said its 4,000-MW Sasan ultra mega power project in Madhya Pradesh has been connected to the national grid. (BL) An official panel has recommended that the government should penalise Tata Power and Hindalco Industries for delay in developing a coal block in Jharkhand. (ET)
Swinging Sensex settles 78 points up
The wave of reforms sweeping over the weekend saw the indices take off to a glorious start. The Sensex and Nifty reached 14-month highs and extended its winning streak for over a week now. The gains were pared soon with FMCG and tech stocks being the victims. The RBI announced a reduction in CRR by 25bps. RBI also kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0%. Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0%, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0%. "After an unexpected 100bps SLR reduction during the June quarter review, the RBI once again surprised the market by cutting the CRR rate by 25bps to 4.5%. Although commercial bank’s borrowing from the central bank under the LAF window has been benign in recent months, the RBI may be anticipating some pressure on liquidity in the coming months due to the advance tax outflows and a seasonal uptick in credit growth.
Take a pause
"Now and then it's good to pause in our pursuit of happiness and just be happy." - Guillaume Apollinaire It’s been raining gains and good news all around. The Sensex has gained ~ 20% this year and has perched itself to a 14-month high. Brokerages are rushing to raise Sensex targets anything between 19K and 23K. It’s a holiday truncated week and we could see some profits being booked today. Future sustenance of any rally will depend on broader participation from mid caps and small caps with 5450 emerging as new line of defense.
Flat start on the cards
The opening on the Dalal Street is expected to be on a flat note tracking mixed global cues. SGX Nifty is trading 12.50 points higher. Events for the day: Ex date for final dividend of Bhushan Steel, Hindustan Copper. Headlines for the day: Unitech to reply to Telenor's plea of Rs6,400 cr indemnity. Foreign telcos will get 3 months to form Indian venture. Tata Motors launches six commercial vehicles. Welspun Corp raises Rs252 cr through debentures. Indian Indices: Today, the opening on the Dalal Street will be on a flat note led by mixed global peers. SGX Nifty is also trading 12.50 points higher. Yesterday (September 17, 2012), the Reserve Bank of India (RBI) slashed the cash reserve ratio (CRR) by 25 basis points to 4.50% from 4.75%. The policy repo rate and the reverse repo rate were kept unchanged at 8% and 7% respectively. Thejo Engineering is the first company that will list its equity shares on the National Stock Exchange (NSE) EMERGE SME platform today. The issue price is fixed at lower end of price band of Rs402-430 a share. On Monday (September 17, 2012), the Sensex settled at 18542, up by 78 points while the Nifty closed at 5610, rising by 32 points.
Market may open flat to slightly higher
Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 8.50 points at the opening bell. Soon after the government's announcement of foreign direct investment (FDI) in multi-brand retail Trinamool Congress (TC) chief Mamata Banerjee had set a 72-hour deadline for the government to rollback its decisions on diesel price hike and cutting supply of subsidised LPG cylinders and FDI in multi-brand retail. A meeting of the parliamentary partly of Trinamool Congress is scheduled today, 18 September 2012, to discuss the issue. Bhushan Steel turns ex-dividend today, 18 September 2012, for dividend of 50 paise per share for the year ended 31 March 2012 (FY 2012). Hindustan Copper turns ex-dividend today, 18 September 2012, for dividend of Rs 1 per share for FY 2012. Jaiprakash Associates turns ex-dividend today, 18 September 2012, for final dividend of 50 paise per share for FY 2012. Jaypee Infratech turns ex-dividend today, 18 September 2012, for final dividend of 50 paise per share for FY 2012.
Monday, September 17, 2012
RBI policy day ends well; Sensex up for 9th day
Indian stocks rose after RBI cut the CRR and the government opened its huge market to foreign retailers in a bid to kick-start flagging economic growth. Sensex rose 78 points and the Nifty gained by 32 points in today's trade. Major Headlines of the Day: RBI cuts CRR by 25 bps, leaves key rates unchanged Retail reforms will boost Realtors to kick-start projects Govt can raise LPG cap from 6 to 10 cylinders Govt OKs 51% FDI in Multi Brand Retail Indian indices: It was yet another eventful trading day for the Indian indices. The Indian markets pulled back after a knee-jerk reaction to the Reserve Bank of India's decision to hold policy rates, which left the investors disappointed. The Sensex witnessed a drop of over 200 points from the day's high while the broader Nifty slipped below the 5,600 mark. The rupee, too, pared gains against the dollar. Later, the weak opening of the European markets also weighed on the sentiments. Buying in Realty, CG, Bankex, Power, Oil & Gas, Auto, Metal, CD and PSU were the major supporters. Gains in Index heavyweights like ICICI Bank, RIL, L&T, SBI, HDFC, Tata Motors and Bharti Airtel helped the market to remain higher. Indices extended gains for the 9th day and ended higher in a volatile session. The Sensex hit 14-month high and NSE Nifty closed above the 5600 level for the first time since July 25, 2011, though it was off day's high. The Sensex closed 78 points higher while the Nifty gained 32 points in trade today. Movement of the Indian indices for the day: The Indian markets closed on a positive note in today's trade, with the Sensex and the Nifty rising with modest gains. Today, the Indian indices stayed higher throughout the day owing to gains in index heavyweights which helped the markets to remain in green zone for the entire day. Rate sensitives like banking, realty, capital goods and auto stocks led major support while weakness in technology, FMCG and healthcare stocks erased more than half of the gains in second half of trade. The key benchmark indices closed higher for the ninth session in a row, with rising for more than 1200 points. The rally was aided by consistent inflow of foreign money that lifted the rupee to 54 against the US dollar, a third quantitative easing by the Federal Reserve, favorable German's Constitutional court ruling, diesel price hike and FDIs approval in retail, aviation & broadcast carriage services sectors. The broader markets too traded on a positive note. The BSE Midcap index rose by 1.14%, while the BSE Smallcap index was up by 1.13% in trade today. The overall market breadth stood positive. The Sensex ended at 18542.31, up by 78.04 points, while the Nifty shut shop at 5610, up by 32.35 points. Major Events: The RBI announced a reduction in CRR by 25bps and kept the repo rate unchanged at 8% and reverse repo rate remains unchanged at 7% under the liquidity adjustment facility (LAF). Following are the stocks/ sectors which were in news today: 1. Tata Motors trimmed gains to 2.7% from over 6% in late trade, after posting less-than-expected global sales data in August. 2. Real estate firms rose on hopes of benefit from the government's move to allow foreign direct investment in multi-brand retail chains. 3. Welspun Corp gained after the company said it has successfully concluded the placement of Rs252.8 crore secured redeemable non convertible debentures. The stock rose 0.40% in trade today 4. Deccan Chronicle Holdings locked lower circuit of 5%, ahead of the Bombay High Court (HC) verdict on the Board of Control for Cricket in India (BCCI) decision to terminate the contract with IPL team Deccan Chargers.
Banking, realty stocks rally
Key benchmark indices edged higher in choppy trade and attained their highest closing level in 13-1/2 months as the government after market hours on Friday, 14 September 2012, announced liberalization of foreign investment rules in retail, aviation and broadcasting sectors. While the government has allowed up to 51% foreign direct investment (FDI) in multi-brand retail trading (MBRT), in the aviation sector the government has allowed foreign airlines to acquire up to 49% stake in Indian carriers. Comments by Finance Minister P. Chidambaram that the government will unveil more measures to narrow the fiscal deficit and to boost economic growth, which may encourage the central bank to cut interest rates at its next monetary policy review on 30 October 2012, aided the upmove on the bourses.
FDI in multi-brand
Cabinet approves proposal to permit 51% FDI in multi‐brand retail Individual state govts will have discretion to allow multi-brand Centre says CM of Delhi, Assam, Maharashtra, AP support FDI Rajasthan, Uttarakhand, Haryana, Manipur also support FDI Govt of Bihar,Gujarat, Kerala, MP,UP, West Bengal,Odisha oppose FDI: Rpt Karnataka , Jharkhand, Punjab yet not decided & to study fine print: Rpt
FDI in aviation
Cabinet approves proposal to allow foreign airlines to buy upto 49% in local airline cos Alert: Earlier only foreign investors allowed to invest in local airline cos Would help bringing in strategic investors into aviation sector MAJOR BENEFICIARY: Spicejet is major beneficiary of FDI aviation Spicejet does not need money but a partner Alert: Spicejet's debt stands at Rs 700 cr
FDI Norms for Broadcast
Govt hikes FDI limit in DTH & Digital cable svc providers(MSOs) to 74% Alert:The earlier limit was 49% for DTH segment. FDI limit was 74% for Headend in the Sky (HITS), bringing DTH on par now Alert:HITS- A satellite multiplex svc provides TV channels for cable operations 49% can come through ‘automatic route’
Govt in form with reform; RBI action awaited
FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. Only in growth, reform, and change, paradoxically enough, is true security to be found.- Anne Lindbergh A government synonymous with policy paralysis has suddenly shifted gears. FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. The Fed’s stimulus announcement of course cheered world markets last week which are adding to the positive mood. ECB president Mario Draghi’s plan for unlimited, but conditional, bond purchases of troubled euro area countries brought in cheer.
Indian stocks signal firm opening on D-street ahead of RBI policy
The Indian markets may open on a positive note led by positive Asian cues. SGX Nifty is trading 65 points higher. Events for the day: Release of RBI mid quarter monetary policy. Headlines for the day: SBI may get Rs 4,000 cr capital support from govt Bhel says coal row won't impact its operations Govt to export 1.75 lakh tonnes fertilisers to Nepal this year' RIL plans low-cost telecom towers costing Rs 1 lakh
Market may extend recent surge on government's bold reforms
The market may extend recent strong gains on bold reforms announced by the government after market hours on Friday, 14 September 2012. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a surge of 78 points at the opening bell. Shares of organised retailers will surge after the government after trading hours on Friday, 14 September 2012, announced that the Union Cabinet has approved the proposal of the Department of Industrial Policy & Promotion for permitting foreign direct investment (FDI) up to 51% in multi-brand retail trading (MBRT). The permission for 51% FDI in MBRT is subject to specified conditions. A statement issued by the government said that retail sales outlets can be set up in those states which have agreed or agree in future to allow FDI in MBRT under this policy. The establishment of the retail sales outlets will be in compliance of applicable state laws/ regulations, such as the Shops and Establishments Act etc. The policy provides that it would be the prerogative of the state governments to decide whether and where a multi-brand retailer, with FDI, is permitted to establish its sales outlets within the state. Therefore, implementation of the policy is not a mandatory requirement for all states, the government said in statement.
Sunday, September 16, 2012
Aviation shares take off on FDI buzz
Three aviation shares rose by 3.85% to 8.08% at 12:14 IST on BSE on reports the Union Cabinet will today, 14 September 2012, consider a proposal to allow foreign airlines to buy stakes in local carriers. Kingfisher Airlines (up 8.08%), SpiceJet (up 6.51%) and Jet Airways India (up 3.85%), edged higher. The BSE Sensex was up 377.77 points, or 2.10%, at 18,398.93. On Monday (10 September 2012), civil aviation minister Ajit Singh was quoted by media as saying that he hoped that a political consensus would emerge on allowing foreign airlines to buy into Indian carriers. Allowing foreign carriers to invest in domestic carriers will bring much-needed cash for the ailing domestic aviation sector that has been badly hit by high jet fuel price and a weak rupee. At present, India allows foreign investors, not related in any way to airline business, to buy up to 49% stake in domestic airlines, but foreign carriers are not permitted to invest in them. Accepting a major demand of the cash-strapped aviation industry, the government had in January 2012 launched the process to allow foreign airlines picking up to 49% stake in Indian carriers.
Friday, September 14, 2012
Weekly Newsletter - Sep 14 2012
Indian markets had a splendid week, with the BSE Sensex and the NSE Nifty scaling seven-month peaks besides crossing important milestones. The much-awaited move on fuel price revision did come about, with the Government finally hiking diesel prices. LPG subsidy has been capped while excise duty on petrol has been slashed. The Government was also due to take a call on a whole host of reform measures to avert BRICS’ first debt downgrade to ‘junk’. All eyes are on the RBI, which reviews its policy on Monday. With inflation in August spiking, the RBI may not yet cut policy rates. Stocks could fly even higher if the RBI too springs a pleasant surprise. Globally too, things have improved considerably, with Europe, China and now the US unleashing fresh stimulus to boost growth. One bad news for India is the fresh uptick in commodity prices, especially that of crude oil and gold. We also need to see what follow-up policy action the Centre unveils in order to restore investor confidence.
Weekly Stock Picks - Sep 14 2012
Buy DLF Buy Bata India Buy Titan Buy LIC Housing Finance Buy Bank India
Weekly: Sensex, Nifty surges ~4.4% each
Indian markets had a splendid week, with the BSE Sensex and the NSE Nifty scaling seven-month peaks besides crossing important milestones. The much-awaited move on fuel price revision did come about with the Government finally hiking diesel prices. LPG subsidy has been capped while excise duty on petrol has been slashed. The Government was also due to take a call on a whole host of reform measures to avert BRICS’ first debt downgrade to ‘junk’. All eyes are on the RBI, which reviews its policy on Monday. With inflation in August spiking, the RBI may not yet cut policy rates. Stocks could fly even higher if the RBI too springs a pleasant surprise.
Sensex surges 400 points almost after a year;
The Indian markets witnessed a 2% rally for the eighth straight day. The Sensex closed 443 points higher while the Nifty gained 142 points in trade today. Major Headlines: Govt hikes diesel prices by Rs5 per litre Inflation for Aug at 7.55% vs 6.87% in July 2012 Cabinet to consider FDI in aviation, broadcast sector Govt terminates mining licence of 4-blocks
Govt approves 51% FDI in multi-brand retail
The Cabinet today (September 14, 2012) decided to operationalise 51 per cent FDI in multi-brand retail but left it to the state governments to allow setting up of such stores. The Cabinet has also cleared FDI in aviation and broadcast sectors. In another major decision, the government also cleared FDI in aviation by foreign carriers. FDI in aviation will help troubled companies like Kingfisher, Spicejet and Go Air The move signals the end of policy paralysis in the UPA government. The government has, however, left the option to invite multi-brand retail on the states. The Government approved the disinvestment of 5 Public Sector Units ( PSUs), including Oil India (10%), Nalco (12.5%) and Hindustan Copper (9.59%) The government had last year cleared 51% FDI in multi-brand retailers for cities with populations of more than a million. But it later rolled back the decision after protests by allies of UPA and opposition.
Bharti Airtel gains after tower unit files for IPO
Bharti Airtel rose 0.53% at Rs 255 at 15:19 IST on BSE after the company said its mobile tower unit, Bharti Infratel, filed a draft prospectus with Securities and Exchange Board of India today, 14 September 2012, for an initial public offering. The announcement was made during trading hours today, 14 September 2012. Meanwhile, the BSE Sensex was up 462.68 points, or 2.57%, to 18,483.84. On BSE, 4.71 lakh shares were traded in the counter as against an average daily volume of 6.35 lakh shares in the past one quarter. The stock hit a high of Rs 259.60 and a low of Rs 253.70 so far during the day. The stock had hit a 52-week high of Rs 412.25 on 16 November 2011. The stock had hit a 52-week low of Rs 238.50 on 30 August 2012. The stock had underperformed the market over the past one month till 13 September 2012, falling 2.42% compared with the Sensex's 2.20% rise. The scrip had also underperformed the market in past one quarter, sliding 17.55% as against Sensex's 6.76% rise. India's largest listed telecom operator by sales has an equity capital of Rs 1898.76 crore. Face value per share is Rs 5. Bharti Airtel announced that its subsidiary, Bharti Infratel, has filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi) today, 14 September 2012, in relation to its initial public offer (IPO) of equity shares. The IPO constitutes a fresh issue of equity shares by Bharti Infratel and an offer for sale portion by Compassvale Investments, GS Strategic Investments, Anadale and Nomura Asia Investment (IB), Bharti Airtel said. In a separate statement to the stock exchange, Bharti Airtel, which owns about 86% of Bharti Infratel, said it had decided not to participate in the IPO. Bharti Infratel will reportedly raise Rs 5000 crore through the IPO. Bharti Infratel owns over 33,000 towers, across 18 states, and 11 telecom circles. Bharti Infratel also has a 42% stake in Indus towers, which was created as a joint venture between Bharti Infratel, Vodafone and Idea to hive off the towers business in 16 telecom circles. Bharti Airtel's consolidated net profit, as per international financial reporting standards, fell 37.3% to Rs 762.20 crore on 14% increase in net sales to Rs 19350.10 crore in Q1 June 2012 over Q1 June 2011. Bharti Airtel is a leading integrated telecommunications company with operations in 20 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 5 mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G services, fixed line, high speed broadband through DSL, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G mobile services. Bharti Airtel had close to 261 million customers across its operations at the end of June 2012.
Sensex at near 14 month closing high
The market gained for the second straight week as diesel price hike by the Indian government to help improve country's deteriorating fiscal position, US Federal Reserve's QE3 program and Germany's Federal Constitutional Court rejecting calls to block the euro rescue fund increased investors' appetite for riskier assets. Recent strong buying of Indian stocks by foreign finds also supported domestic bourses. The market gained in all five trading sessions in the week just gone by. The barometer index, BSE Sensex, scaled nearly 14 month closing high above 18,000. The 50-unit S&P CNX Nifty hit nearly 7 month closing high. The BSE Sensex jumped 714.62 points or 4.02% to 18,464.27, its highest closing level since 26 July 2011. The 50-unit S&P CNX Nifty surged 218.95 points or 4.08% to settle at 5,577.65, its highest closing level since 21 February 2012.
RBI's policy review to set the tone
The Reserve Bank of India's (RBI) mid-quarter review of the monetary policy on Monday, 17 September 2012 will set the tone for the markets in a truncated week ahead. Domestic bourses witnessed recent strong rally as countries around the world took monetary and fiscal initiatives to stimulate growth. The market remains shut on Wednesday, 19 September 2012 on account of Ganesh Chaturthi. The RBI is expected to maintain status quo on short term lending rates in its policy review on 17 September 2012, as per the poll carried out by Capital Market. RBI last cut rates by 0.5 percentage point to 8% from 8.5% in April, its first move to reverse a 20-month rate-tightening cycle. It then held rates steady in June and at its last rate-setting meeting on July 31, saying that a cut would exacerbate inflationary pressures. Inflation in August accelerated to 7.55% much above the central bank's comfort level.
Friday blockbuster on the Street as Govt kicks off long-stalled reforms
Key benchmark indices logged smart gains for eight straight session of trade after the government signaled pushing long pending reforms on the fast track after hiking steeply diesel prices by Rs 5 per liter on Thursday. The BSE Sensex settled at its highest closing since 26 July 2011 and the NSE Nifty settled at its highest closing since 21 February 2012. Markets across the globe surged after the US central bank on Thursday initiated another aggressive stimulus program to stimulate growth in the world's largest economy. The Sensex was up 443.11 points or 2.46%, up 179.52 points from the day's low and off 34.27 points from the day's high. The market breadth was positive.
Thursday, September 13, 2012
Daily News Roundup - Sep 13 2012
Jaiprakash Associates has paid US$523.5mn to bondholders to redeem foreign currency convertible bond that was raised in 2007. (ET) The district collector of Angul has ordered an investigation into allegations that Jindal Steel and Power is illegally drawing groundwater for its upcoming power plant in the district. (ET) Jaguar Land Rover, a Tata Motors company, has invested £370mn to upgrade its manufacturing facilities in the United Kingdom. The investment would help the company to increase productivity as it prepares to launch the fourth generation Range Rover across 170 countries. (BL) The flagship index of the MCX Stock Exchange will be known as "SX-40", Vice-Chairman said. The SX-40 will be a free-float-based index of large market-cap and liquid stocks representing most importing sectors. (BL)
Staying within limits
"The only limits are, as always, those of vision." - James Broughton. Call it lack of vision or mission. India needs urgent, decisive and convincing policy action to reverse the slide. Strong FII flows and global risk appetite have pushed Sensex beyond 18,000 and Nifty past 5,400. But, IIP data continues to be bleak. That investments had stagnated was known, but even consumption is starting to ease. The bad news is monetary and fiscal space available to policymakers is limited. Also, both camps seem to be waiting for the other to blink first. The ball is in the Government’s court. It has been unable to take any meaningful measure that could inspire confidence among investors, consumers and India Inc. The wait for reforms has been too long and might even extend further amid the ongoing political feud over ‘coal-gate’.
Flat to negative start likely
The Indian markets may begin today’s trade on a flat to negative note led by mixed global cues. SGX Nifty is trading 2.50 points lower. Events for the day: Ex date for dividend of MMTC, Ruby Mills. Ex date for final dividend of Sun TV Network, NMDC..
Market seen halting recent gains on subdued Asian stocks
The market is likely to take a breather after the recent strong gains. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 5 points at the opening bell. Asian stocks were mostly lower on Thursday ahead of the US Federal Reserve's decision about injecting more stimulus into the world's largest economy. Key benchmark indices gained for the sixth straight trading session on Wednesday as world stocks rose after Germany's highest constitutional court allowed the country to ratify the euro area's permanent bailout fund. Optimism the Indian government will unveil a series of fiscal policy decisions later this week and hopes of further stimulus measures from the world's top central banks underpinned sentiment. The BSE Sensex was up 147.08 points or 0.82% to 18,000.03, its highest closing level since 23 February 2012.
Wednesday, September 12, 2012
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