Search Now


Friday, February 14, 2014

Market may open higher on firm Asian stocks

The market may open higher on firm Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 33.50 points at the opening bell. Asian stocks rose on Friday as telecommunication and materials companies led gains.

State Bank of India, DLF and Mahindra & Mahindra will unveil Q3 results today, 14 February 2014.

ONGC's net profit rose 28.1% to Rs 7126 crore on 1.2% fall in sales revenue to Rs 20,833 crore in Q3 December 2013 over Q2 December 2012. The company announced result after market hours on Thursday, 13 February 2014.

Bharti Airtel announced after market hours on Thursday, 13 February 2014, it has acquired 115.0 MHz spectrum for a total consideration of Rs 18530 crore in the just concluded spectrum auction conducted by the Government of India. Bharti Airtel will make an upfront payment of Rs 5425 crore, with the balance to be paid in ten annual instalments of Rs. 1310 crore each, commencing two years from now.

The company's spectrum acquisition is in line with its strategy of building a robust network of the future and enhancing its leadership position in the fast growing data segment. The company plans to roll-out high speed 4G networks in various circles using FD-LTE technology in the 1800 MHz band besides its existing TD-LTE roll-out in the 2300 MHz band, giving it a pan-India 4G footprint.

Bharti Airtel complimented DoT and TRAI on the successful outcome of the auction. It said that the auction has lent credence to the industry's position that reasonable reserve prices ensure successful auctions, while high reserve prices are counterproductive. It added that in most circles the auction in 1800 MHz showed a balanced approach between the revenue for the exchequer and industry viability due to ample spectrum being put up for auctions. However, the auction in 900 MHz band resulted in artificial and unrealistic prices on account of shortage of spectrum and the unenviable position of the incumbents who were forced to bid for this spectrum to protect the interest of their customers and the huge investments made by them.

Gopal Vittal, Jt. MD & CEO – India, Bharti Airtel said, "The auction has provided much needed long term certainty and clarity around spectrum and other regulatory policies. However, future auctions should ensure that more spectrum in the 900 MHz band is secured from other agencies and the operators who are grossly underutilizing this important spectrum band. The auction also highlights the urgent need for vacating E-GSM spectrum in the 800 MHz band, which is being used for older technologies or is lying unused with certain agencies."

Idea Celluar announced after market hours on Thursday, 13 February 2014 that the provisional results of the auction of 900 MHz and 1800 MHz spectrum were announced on Thursday, subject to approval by the Government. Idea Cellular, India's 3rd largest mobile operator, in winning a total of 65.2 MHz of spectrum, gets the necessary impetus to expand the network in Delhi to 3G on 900 MHz, and launch 4G in 8 of its key revenue markets, at an appropriate juncture.

In 8 of its leadership markets covering 64% of revenues, Idea now has the ability to launch 4G services in Kerala with 10 MHz, and in Maharashtra & Goa, Andhra Pradesh, Karnataka, Madhya Pradesh & Chhattisgarh, Punjab, Haryana, and North East, using 5 MHz of contiguous 1800 MHz spectrum won in each of these service areas, besides the right to deploy the 3G services with 5 MHz on the 900 MHz band in the strategically significant metro market of Delhi.

With Delhi metro 900 MHz, Idea Cellular now has the ability to extend its 3G services to 12 circles covering nearly 79% of its gross revenues (Idea Standalone Gross Revenue is Rs 25558.1 crore in calendar year 2013). The company has also acquired additional top up spectrum in 1800 MHz in Mumbai metro and Madhya Pradesh & Chhattisgarh – 2 MHz each, Maharashtra – 4 MHz, Punjab – 3 MHz, Gujarat – 1.6 MHz, Andhra Pradesh and Haryana – 1 MHz each, and Delhi – 0.6 MHz.

With this additional spectrum auction win, Idea's 6 strategic markets of Kerala, Andhra Pradesh, Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Punjab, and Haryana, representing 53% of its revenues, will seamlessly experience all three Mobility technologies - GSM, 3G, and 4G services in the coming years.

The total accepted bid value is approx. Rs 10400 crore at Rs 160 crore/MHz, primarily for its 9 strategic service areas. This bid price will be covered within less than two years in EBITDA terms, based on the current EBITDA trends of these 9 strategic markets. After the initial payment of approx. Rs 3100 crore, the balance amount will be paid in ten equal instalments after the first two year moratorium including interest at the rate of 10%.

Sun Pharmaceutical Industries announced after market hours on Thursday, 13 February 2014 that the US FDA has granted its subsidiary final approval for its Abbreviated New Drug Application (ANDA) to market a generic version of Temodar, Temozolomide Capsules, 5 mg, 20 mg, 100 mg, 140 mg, 180 mg and 250 mg.

Temozolomide Capsules, 5 mg, 20 mg, 100 mg, 140 mg, 180 mg and 250 mg are therapeutic equivalents of Merck Sharp & Dohme Corporation's Temodar Capsules. These Capsules have annual sales of approximately $ 400 million in the US. Temozolomide Capsules are indicated for the treatment of adult patients with newly diagnosed glioblastoma multiforme concomitantly with radiotherapy and then as maintenance treatment and for adult patients with refractory anaplastic astrocytoma who have experienced disease progression on a drug regimen containing nitrosourea and procarbazine. Temodar is the registered trademark of Merck Sharp & Dohme Corp

Indian Oil Corporation (IOC) reported net loss of Rs 961.45 crore in Q3 December 2013 as compared to net profit of Rs 3331.96 crore in Q3 December 2012. Total income rose 1.44% to Rs 119354.01 crore in Q3 December 2013 over Q3 December 2012. The Q3 was announced after market hours on Thursday, 13 February 2014.

Engineers India announced before market hours In relation to the further public offer of 3.36 crore shares through an offer for sale by the President of India, acting through the Ministry of Petroleum and Natural Gas, Government of India, and in accordance with the Listing Agreement, the company's Empowered Group of Ministers ("EGoM") in its meeting held on 13 February 2014, has decided the offer price for the offer at Rs. 150. The EGoM has also decided to offer a discount of Rs 6 per share to the offer price to employees and retail investors.

The offer size is 3.3 crore shares comprising a net offer of 3.19 shares by the company to the public and a reservation of 5 lakh shares for eligible employees.

Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.

Inflation based on the wholesale price index (WPI) is also expected to ease in January 2014. WPI inflation is seen easing to 5.9% in January 2014 from 6.16% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for January 2014 at 12 noon today, 14 February 2014.

The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

Key benchmark indices dropped as weakness in Asian and European stocks dampened investors' sentiment. The S&P BSE Sensex fell 255.14 points or 1.25% to 20,193.35 on that day, its lowest closing level since 8 October 2013.

Foreign institutional investors (FIIs) bought shares worth a net Rs 399.40 crore on Thursday, 13 February 2014, as per provisional data from the stock exchanges.

Asian stocks rose on Friday as telecommunication and materials companies led gains. Key benchmark indices in China, Hong Kong, South Korea, Indonesia and Taiwan fell by 0.35% to 0.99%. Key benchmark indices in Japan and Singapore fell by 0.09% to 0.69%.

China's inflation stayed subdued in January while factory-gate prices extended the longest drop since the 1990s, in a sign of moderating demand in the world's second-largest economy. The consumer price index rose 2.5% from a year earlier, the National Bureau of Statistics said today in Beijing, the same pace as in December. The producer-price index fell 1.6 percent. China's economic data are distorted in January and February by the shifting timing of the week-long Lunar New Year holiday, which began on Jan. 31 this year.

US stocks rose on Thursday as earnings and a $45.2 billion takeover of Time Warner Cable Inc. overshadowed an unexpected drop in retail sales.

Receipts at US retailers declined 0.4% in January amid bad weather and uneven progress in the labor market, a report yesterday showed, signaling the economy was off to a slow start this year. The decline was the biggest since June 2012. A Labor Department report showed the number of Americans filing applications for unemployment benefits rose by 8,000 to 339,000 in the week ended Feb. 8.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.