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Wednesday, July 24, 2013
Daily News Roundup - July 24 2013
Tata Motors will re-enter Australia with LCVs. The company will introduce its 4x2, 4x4, single and crew-cab variants, with Euro V Turbo diesel engines in Australia. (BL)
SpiceJet CEO Neil Mills has quit. The sources said Mills put in his papers after a recent meeting with senior airline management. (BL)
Tata Power announced that it had generated 43.386mn units of solar power from its 25 MW facility at Mithapur in Gujarat in 2012-13. (BL)
Reliance Infrastructure has completed four laning of a 52-km stretch on NH-11, from Jaipur to Reengus in Rajasthan. Collection has begun on the toll road built at a cost of about Rs5.55bn. (BL)
ONGC and its partners — Tata Petrodyne and Hindustan Oil Exploration Co will invest Rs11bn in developing an offshore block in the Gulf of Cambay, off the west coast of India. (BS)
Jindal Steel and Power will consume 25-30mn tons of iron ore a year by 2015, three times current volumes, and source most of the raw material from abroad. (BS)
Larsen and Toubro has sought shareholders nod to raise up to US$600mn through issuing securities. (BS)
JSW Steel may buy the local assets of Stemcor Holdings to gain iron ore mines. (BS)
DLF has sought shareholders’ approval to modify the company's memorandum of association for providing specific retirement benefits to directors who have made outstanding contribution to the growth of the company. (ET)
With the dynamics of the gas market changing, Petronet LNG feels that the price at which it inked a contract to buy gas from Exxon’s Gorgon project in Australia could be re-visited, for it may end up being the most expensive gas the country has ever imported. (BL)
Economy Snippets
RBI said banks would be permitted to borrow under the liquidity adjustment facility only up to 0.5% (lowered from 1%) of their net deposits and time liabilities at the benchmark interest rate of 7.25%. (BS)
RBI has tightened rules on the cash reserve ratio. Now, banks will have to hold cash equivalent of at least 99% of CRR on a daily basis, compared with 70% earlier. (BS)
The National Association of Software and Services Companies (Nasscom) has maintained its growth forecast for the industry, at 12-14% for fiscal 2014. (BL)
Ticket pricing by airlines is set to come under scrutiny, with the civil aviation ministry roping in anti- trust watchdog Competition Commission of India to keep in check indiscriminate airfare increases in domestic aviation. (BS)
Weak open; rupee could strengthen
Do the difficult things while they are easy and do the great things while they are small - Lao Tzu
While the equity market has managed to flirt with Jan ’11 highs, the RBI continues with its measures to keep the rupee under grips. The central bank imposed new restrictions on commercial banks’ access to cash. Expect call rates and bond yields to see a perk up.
The outlook for the equity market is a weak start. Global cues are not really healthy. Attention will remain on result counters like Hero Motocorp Cairn India and Yes Bank. The banking counters which have been gaining strength could see some weakness again. Banks would be permitted to borrow under the liquidity adjustment facility (LAF) only up to 0.5%of their net deposits and time liabilities at the benchmark interest rate of 7.25 per cent. Starting July 27, 2013, banks will be required to maintain a minimum daily CRR balance of 99% of the requirement, compared with 70% earlier.
The government could rejoice at this development. The number of India's poor fell to less than a quarter of its population in 2011-12, according to a Planning Commission estimate.
IT sector too has some news to cheer. The National Association of Software and Services Companies has maintained its growth forecast for the industry, at 12-14% for fiscal 2014.
Maruti could be in action as there is a threat to shut down the Manesar plant.
China's manufacturing sector slowed to an 11-month low in July. The flash HSBC/Markit Purchasing Managers' Index fell to 47.7 this month from June's final reading of 48.2.
The Dow rose 0.14% while Standard & Poor's 500 Index fell 0.19%. Nasdaq fell 0.59%. An index of June manufacturing activity from the Federal Reserve Bank of Richmond plunged 11 points.
Asian stock markets are weak. Japan's Nikkei was 0.5% lower while Hong Kong's Hang Seng index and South Korea's Kospi index is flat. China's Shanghai index is marginally lower.
Results watch: Cairn India, Dabur India, Indiabulls Real Est, Indiabulls Infra, Yes Bank, Hero MotoCorp, Central Bank, Century Enka, Ador Welding, Atul, DIAMONPOWER, Gujarat Lease, Century Enka, Indiabulls Wholesale, ION Exchange, Kalyani Steel, Kewal Kiran, KIRL INDUS, Mahindra Lifespace,Ponni Sugar Erod, Novartis India, Orient Refractories, Rane Brake, Phil Corp, Sagar Cements, SKF India, Shanthi Gears, STORE ONE, Uniphos Enter, United Phos, TCPL Pack.
Trends in FII flows: The FIIs were net buyers of Rs2.11bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net buyers of Rs608.6mn, as per the provisional figures released by the NSE.
The foreign funds were net sellers of Rs4.92bn in the cash segment on Monday, according to the SEBI figures.
Global Data Watch: Consumer Price Index (YoY) (Q2) AUD, Consumer Price Index (QoQ) (Q2) AUD, RBA trimmed mean CPI (QoQ) (Q2) AUD, RBA trimmed mean CPI (YoY) (Q2) AUD, HSBC Manufacturing PMI (Jul)Preliminar CNY, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Markit Manufacturing PMI (Jul)Preliminar EUR, Markit PMI Composite (Jul)Preliminar EUR, Markit Services PMI (Jul)Preliminar EUR, Retail Sales s.a. (MoM) (May) EUR, Retail Sales n.s.a (YoY) (May) EUR, Trade Balance non-EU (Jun) EUR, CBI Industrial Trends Survey - Orders (MoM) (Jul) GBP, MBA Mortgage Applications (Jul 19) USD, M3 Money Supply INR, Markit Manufacturing PMI (Jul)Preliminar USD, New Home Sales (MoM) (Jun) USD, New Home Sales Change (MoM) (Jun) USD, EIA Crude Oil Stocks change (Jul 19) USD, RBNZ Interest Rate Decision (Jul 25) NZD, Corporate Service Price (YoY) (Jun) JPY, Foreign bond investment (Jul 19) JPY, Foreign investment in Japan stocks (Jul 19) JPY
In other news in the media:
Tata Motors will re-enter Australia with LCVs. The company will introduce its 4x2, 4x4, single and crew-cab variants, with Euro V Turbo diesel engines in Australia. (BL)
SpiceJet CEO Neil Mills has quit. The sources said Mills put in his papers after a recent meeting with senior airline management. (BL)
Tata Power announced that it had generated 43.386mn units of solar power from its 25 MW facility at Mithapur in Gujarat in 2012-13. (BL)
Reliance Infrastructure has completed four laning of a 52-km stretch on NH-11, from Jaipur to Reengus in Rajasthan. Collection has begun on the toll road built at a cost of about Rs5.55bn. (BL)
ONGC and its partners — Tata Petrodyne and Hindustan Oil Exploration Co will invest Rs11bn in developing an offshore block in the Gulf of Cambay, off the west coast of India. (BS)
Jindal Steel and Power will consume 25-30mn tons of iron ore a year by 2015, three times current volumes, and source most of the raw material from abroad. (BS)
Larsen and Toubro has sought shareholders nod to raise up to US$600mn through issuing securities. (BS)
JSW Steel may buy the local assets of Stemcor Holdings to gain iron ore mines. (BS)
DLF has sought shareholders’ approval to modify the company's memorandum of association for providing specific retirement benefits to directors who have made outstanding contribution to the growth of the company. (ET)
With the dynamics of the gas market changing, Petronet LNG feels that the price at which it inked a contract to buy gas from Exxon’s Gorgon project in Australia could be re-visited, for it may end up being the most expensive gas the country has ever imported. (BL)
Ticket pricing by airlines is set to come under scrutiny, with the civil aviation ministry roping in anti- trust watchdog Competition Commission of India to keep in check indiscriminate airfare increases in domestic aviation. (BS)
Market may edge lower in early trade on weak Asian stocks
The market may edge lower in early trade on weak Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 30 points at the opening bell. Indian stocks will react to the latest measures announced by the Reserve Bank of India (RBI) on Tuesday, 23 July 2013, to support the rupee which fell to a record low against the dollar this month. The market may remain volatile in the near future as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire tomorrow, 25 July 2013.
Ambuja Cements, Cairn India and Hero MotoCorp unveil quarterly results today, 24 July 2013. Among other major corporate results today, 24 July 2013, include that of Central Bank of India, Dabur India, United Phosphorus and Yes Bank.
Metal stocks may edge lower after a survey showed that China's manufacturing-sector activity is slowing further this month. China is the world's largest consumer of copper and aluminum.
Meanwhile, the Reserve Bank of India took new steps on Tuesday to support the rupee, signalling it will stay the course with its defence of the currency despite the risks to economic growth. The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility (LAF) -- which offers funds in exchange for collateral -- for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99 percent of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27. The RBI also announced the sale of short end cash management bills of Rs 6000 crore to drain out more cash from the banking system.
Key benchmark indices edged higher on Tuesday, 23 July 2013 as upmove in global stocks boosted sentiment. The S&P BSE Sensex rose 143.01 points or 0.71% at 20,302.13 on that day, its highest closing level since 4 January 2011.
Foreign institutional investors (FIIs) bought shares worth a net Rs 211.35 crore on Tuesday, 23 July 2013, as per provisional data from the stock exchanges.
Asian stocks fell on Wednesday as private survey showed manufacturing weakened further in July in China. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore and Taiwan were down by 0.05% to 0.89%. South Korea's Kospi rose 0.17%.
China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction.
Japan's exports rose for a fourth straight month in June as a weak yen made the nation's products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier, the Finance Ministry said in Tokyo today.
US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close. The Federal Reserve Bank of Richmond said manufacturing activity in the central Atlantic region weakened.
Bank stocks in focus as RBI announces fresh liquidity measures
Bank stocks will be in focus as the Reserve Bank of India (RBI) announced fresh liquidity tightening measures after market hours on Tuesday to contain the volatility in the foreign exchange market. The overall limit for access to liquidity adjustment facility (LAF) by each individual bank is set at 0.5% of its own net demand and time liabilities (NDTL) outstanding as on the last Friday of the second preceding fortnight. This measure will come into effect immediately, from today, 24 July 2013 and will remain in force until further notice.
Currently, banks are allowed to maintain their cash reserve ratio (CRR) prescribed by the RBI on an average daily basis during a reporting fortnight, with a minimum of 70% of the required CRR on a daily basis. Effective from the first day of the next reporting fortnight from 27 July 2013, banks will be required to maintain a minimum daily CRR balance of 99% of the requirement.
Ambuja Cements, Cairn India and Hero MotoCorp unveil quarterly results today, 24 July 2013. Among other major corporate results today, 24 July 2013, include that of Central Bank of India, Dabur India, United Phosphorus and Yes Bank.
Coromandel International reported 81.4% fall in consolidated net profit to Rs 21.42 crore on 2.2% rise in net sales to Rs 1882.76 crore in Q1 June 2013 over Q1 June 2012.
WABCO India's net profit fell 15.4% to Rs 35.39 crore on 4.7% rise in net sales to Rs 248.91 crore in Q1 June 2013 over Q1 June 2012.
3M India's net profit fell 3.1% to Rs 21.09 crore on 1.9% rise in net sales to Rs 403.41 crore in Q1 June 2013 over Q1 June 2012.
Andhra Pradesh Paper Mills reported net profit of Rs 8.13 crore in Q1 June 2013 as compared to net loss of Rs 15.81 crore in Q1 June 2012. Net sales rose 37.4% to Rs 256.32 crore in Q1 June 2013 over Q1 June 2012.
Kokuyo Camlin's board of directors at its meeting held on 23 July 2013, has decided to issue equity shares on right basis in the ratio of 14 equity shares for every 29 shares held at Rs 33 per share.
SpiceJet's chief executive officer Neil Mills has reportedly resigned from his post a year-and-a-half before his contract ends.
Diamond Power Infrastructure's board of directors meet today to consider issue of bonus shares. The board would also consider issue of shares to the promoters on preferential basis.
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