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Thursday, February 13, 2014

Flat start; Parliament, results in focus

Desperation is the raw material of drastic change. - William S. Burroughs

There is desperation in Parliament with Prime Minister Manmohan Singh saying that his heart bleeds over what is happening in the House and it is sad for democracy. The BJP has offered support on the crucial Telangana Bill. Many Congress MPs from Andhra Pradesh have threatened to take drastic steps. So expect another uproar in Parliament as Union Home Minister Sushilkumar Shinde introduces the controversial bill to create Telangana in the Lok Sabha.

The outlook is a flat start. Some important results are on the anvil like ONGC, Sun Pharma and Hindalco. The IIP numbers and CPI numbers came late on Wednesday and reaction to the same could be seen. Index of industrial production (IIP) fell by 0.6% in December. CPI inflation fell to 8.8% in January, a drop of 2.4%.

Global indices are mixed. The Dow Jones industrial average slipped 30.83 points, or 0.19 percent, to end at 15,963.94. The Standard & Poor's 500 Index lost just 0.49 of a point, or 0.03 percent, to finish at 1,819.26. The Nasdaq Composite Index gained 10.24 points, or 0.24 percent, to close at 4,201.29.

In the Asian markets, Japan's Nikkei 225 index is down over a percent and Hong Kong's Hang Seng has dropped half a percent. South Korea's Kospi index is marginally lower and so is China's Shanghai index. Meanwhile, a surprisingly robust January trade data from China has come in.

HDFC Bank, may be dropped from MSCI indices -- a set of equity benchmarks tracked by global fund managers -- if India's Foreign Investment Promotion Board declines to clear the bank's proposal to hike foreign portfolio investment limit, says a report. Few other stocks may also be dropped from the indices adding to some volatility in those counters.

Moving away from the usual formula of announcing populist measures, Railway Minister Mallikarjun Kharge refrained from reducing passenger fares or announcing.

Worried over industrial output shrinking by 0.6 per cent in December, India Inc today asked the Reserve Bank cut key rates and demanded that the government take immediate steps to revive manufacturing.

"We are especially concerned about the performance of the manufacturing sector, which continues to be in the red even as the mining output shows muted growth rates during the month," CII Director General Chandrajit Banerjee said.

"We look forward for an accommodative monetary policy to spur demand and revive investment activity especially as inflation has started receding," he added.

The Quick Estimates of Index of Industrial Production (IIP) for the month of December 2013 stands at 178.3, which is 0.6% lower as compared to the level in the month of December 2012. The cumulative growth for the period April-December 2013-14 over the corresponding period of the previous year stands at (-) 0.1%.

The Finance Minister said the Reserve Bank of India (RBI) was examining the legal and security aspects of virtual currencies such as bitcoins and litecoins.

Dr. Raghuram Rajan, Governor, Reserve Bank of India, at the NASSCOM India Leadership Forum said "Financial inclusion is about (a) the broadening of financial services to those people who do not have access to financial services sector ; (b) the deepening of financial services for people who have minimal financial services; and (c) greater financial literacy and consumer protection so that those who are offered the products can make appropriate choices. The imperative for financial inclusion is both a moral one as well as one based on economic efficiency. Should we not give everyone that is capable the tools and resources to better themselves, and in doing so, better the country?

Results watch: ONGC, Sun Pharma, IOC, MCX, Accel Trans, Advik Lab, Ahmednagar Forg, Akar Tools, Alchemist, Ashok Alcochem, Atcom Tech, Autolite India, Bharat Textiles, Bombay Dyeing, Bombay Rayon, C&C Construction, Career Point, Cinevista, Coral Lab, Cranes Soft, Crazy Infotech, Dhanlaxmi Cotex, DCM Shriram Cons, Divine Multimedia, Essar Shipping, Eros Intl Media, Excel Inds, Hathway Cab, Hindalco, Hindustan Dorr, Hisar Spinning, Igarashi Motors, Jain Studios, Khaitan India, Lincoln Pharma, MCX, MIC Electronics, Minda Inds, Mukund, Natco Pharma, VLS Finance and XL Energy.

In other news in the media:

Raj Television Network Ltd is on the lookout for a strategic investor with the promoters open to divesting a majority stake in the company. (BL)

Piramal Enterprises and Canada Pension Plan Investment Board (CPPIB) have jointly set up a US$500-mn fund to finance residential property projects in India. (BL)

The Reserve Bank of India's (RBI) decision to remove the 26 % interest rate cap on loans given by micro-finance companies regulated by it is unlikely to significantly impact SKS Microfinance. (ET)

Havells India is aiming to double revenues from its popular brand -- Standard Electricals -- as part of foray into the domestic fans segment, a top company official said. (ET)

ONGC Videsh Ltd (OVL), has signed separate agreements with consortia of international banks for raising US$2.5 bn offshore borrowings to fund the acquisition of a minority stake in an offshore gas field in Mozambique . (ET)

The West Bengal government has allocated 96 acres for NTPC's proposed 1,320-mw thermal power plant at Katwa, while local residents have agreed to add 150 acre to the land pool, raising hopes that the long-delayed project will get off the block. (ET)

Deepak Fertilisers & Petrochemicals (DFPCL), a leading manufacturer of ammonium nitrate - an industrial explosive as well as a fertiliser used in agriculture - is set to benefit from the government's regulations on production, trade and imports of the chemical . (ET)

GCPL will launch a liquid vapouriser that claims to get rid of mosquitoes in 10 minutes. (BS)

Afcons Limited, having completed the EPC (engineering procurement and construction) work on the Kochi LNG terminal, is now looking for more such projects in this space. (BS)

United Bank of India has put the assets of Zoom Developers on the block for a fourth time, to recover dues of Rs30bn 3,002 crore from the developer. The bank reportedly tried thrice to sell the assets in the past. (BS)

Ashok Leyland is selling off it prime property in Chennai. This is part of a plan involving sale of immovable property to tackle the high debt it is facing following the slowdown in commercial vehicle sales over the last several quarters. (BL)

The RBI is discussing with market participants the possibility of setting up an exchange through which trade receivables of micro, small and medium enterprises (MSMEs) can be sold in the market.(BL)