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Monday, March 03, 2014

Market may open lower on weak Asian stocks

The market may open lower on weak Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 8.50 points at the opening bell.

Mahindra & Mahindra (M&M) on Saturday, 1 March 2014 reported a 12% decline in its total auto sales at 42,166 units in February 2014 over February 2013. The sales of Passenger Vehicle segment (which includes UVs and Verito) fell 18% to 19,308 units in February 2014 over February 2013. Domestic sales dropped 11% to 39,338 units in February 2014 over February 2013. The four-wheeler commercial vehicle segment sales fell 3% to 14,701 units while three-wheeler sales declined 2% to 4,724 units in February 2014 over February 2013. Exports were down 17% to 2,828 units in February 2014 over February 2013.

Commenting on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said, “The Auto industry has received the much needed boost in terms of an excise duty reduction and this has resulted in higher enquiries over the last one week. The recently concluded Auto Expo has also been a success which will only help in generating demand. At Mahindra we are hopeful that these positive initiative would be the beginning of a gradual upswing for the auto industry, as we move into the next financial year”.

Separately, M&M on Saturday, 1 March 2014 reported a 18% growth in total tractor sales at 17,592 units in February 2014 over February 2013. Domestic tractor sales rose 19% to 16,552 units in February 2014 over February 2013. Exports increased 13% to 1,040 units in February 2014 over February 2013.

Commenting on the monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, M&M said, “We have achieved a cumulative domestic growth of 23% till February 2014. Tractor demand for FY 2014 till date has been robust due to a favorable monsoon and higher minimum support prices. The shortage of labour at farms has given a boost to mechanization resulting in higher demand for tractors”.

Maruti Suzuki India on Saturday, 1 March 2014 said its total sales declined 0.4% to 1.09 lakh units in February 2014 over February 2013. Domestic sales rose 1.8% to 99,758 units in February 2014 over February 2013. Exports dropped 19.5% to 9,346 units in February 2014 over February 2013.

Reliance Industries (RIL) after market hours on Friday, 28 February 2014 said that a section of the press has regurgitated the false and defamatory allegations made against the company on Thursday. This has inflicted unacceptable controversy and disrepute upon RIL across million of stakeholders in the world, RIL said in a statement.

RIL said that the investments made by Biometrix in Indian companies were from loans raised from Singapore Branch of ICICI Bank. Mechanical replay of allegation and insinuation via youtube and/or e-papers has a global imprint, the company said in a statement. Carrying such defamatory content, with or without carrying a few lines of our version, is unacceptable, it added.

The disbursement notices issued by Singapore Branch of ICICI Bank to Biometrix cover disbursement of the entire amount invested by Biometrix in Indian entities, RIL said in a statement.

RIL said that false and baseless allegations made by Mr Bhushan against the company have been made by vested interests in the proceedings filed in November 2012 in the Delhi High Court. These allegations have been appropriately responded to and the disbursement notices of ICICI Bank have been placed on record, RIL said in a statement.

Reporting Mr Bhushan's selective leaks of old information already residing in judicial proceedings is misleading global public at large and defaming and maligning RIL's corporate reputation, the company said in a statement.

RIL said that investments made by Biometrix into Indian entities have been scrutinized and investigated by Regulatory Authorities. RIL said it has participated and fully co-operated in the investigation and the Regulatory Authorities have been apprised of the true and correct facts.

RIL said that sections of the media are requested to recognize the global implication of their output and not fall for Mr Bhushan's machinations which are purely for his collateral and political gains.

Public-Sector oil marketing companies (PSU OMCs) will be in focus as the PSU OMCs on Friday, 28 February 2014 hiked the price of petrol by 60 paise and diesel by 50 paise per litre effective Friday midnight amid rising crude oil prices and depreciation of rupee against the dollar. This price hike is exclusive of local taxes.

Housing Development Finance Corporation (HDFC) after market hours on Friday, 28 February 2014 said it has raised external commercial borrowing (ECB) of $300 million from a consortium of 4 lenders viz. State Bank of India (SBI), Sumitomo Mitsui Banking Corporation (SMBC), The Bank of Tokyo-Mitsubishi UFJ, and DBS Bank.

The ECB which is in the form of a syndicated loan facility, is a first by an Indian Housing Finance Company (HFC) under the low cost affordable housing scheme of Reserve Bank of India (RBI), HDFC said. RBI in December 2012, permitted to HFCs/NHB to raise ECBs for financing prospective owners of low cost affordable housing units, HDFC said in a statement.

HDFC said that the borrowing facility has a tenor of 5 years. HDFC has drawn-down the facility in February 2014 from the above consortium of lenders, it added. The rate of interest on the facility is linked to USD Libor plus a spread of 1.75%, the company said. HDFC has swapped the facility in Indian Rupees for the entire tenor of the loan. Roadshows shall be conducted by the lender banks in Taipei & Singapore in March 2014 to syndicate the facility and invite other international banks to participate in the facility, HDFC said in a statement.

Voltas after market hours on Friday, 28 February 2014 said it has executed a joint venture (JV) agreement with Dow Chemical Pacific (Singapore) Pte (Dow) for establishing a JV company in India, to tap the growing water and waste water treatment market in the country. The proposed new company - Voltas Water Solutions will have equal capital contribution from Voltas and Dow, Voltas said in a statement.

The JV company will market and distribute standard packaged Water Treatment Systems and Waste Water Treatment Systems of capacity up to 20 metre cube/hour, to residential and commercial complexes and light industrial markets in the Indian subcontinent, Voltas said. The entity's operations would include designing, procuring, testing, marketing, selling and servicing of such standard water treatment systems and waste water treatment systems, it added.

Sanjay Johri, Managing Director of Voltas said, "Water has been identified as a key focus area for the Tata group, and we are very happy to work with Dow Group, in this area. With its unrivalled know-how and technological leadership in the water treatment space, the partnership, will help Voltas Water Solutions cater to the growing water treatment requirements of the Indian subcontinent. The partnership will simultaneously leverage the brand and distribution strength of Voltas, along with the technology prowess of the water and process solutions division of the Dow Group. We will work towards establishing the joint venture as a leading provider of water treatment solutions".

Snehal Desai, Global Business Leader for the water and process solutions division of Dow Group commented, “We are proud to form an alliance with Voltas -- a Tata company. Water treatment has significant business potential in India, and Voltas is an ideal partner with a strong brand reputation, and a wide-spread sales and service network. As part of our long-term strategy, we intend to establish the joint venture, to fully exploit the untapped potential of the Indian market. This joint venture is a significant step towards further strengthening our position in mid-market water systems in India."

Voltas said that the Water and Waste Water Treatment market targeted by the new company is largely catered to today, by unorganized players. The new JV will provide a branded and differentiated product line, with a focus on quality and service delivery, the company said in a statement.

Oriental Bank of Commerce (OBC) after market hours on Friday, 28 February 2014 said it intends to raise Tier II capital to the extent of Rs 1000 crore through issue of Basel III compliant Tier II Bonds on private placement basis.

Sterling Biotech reported net loss of Rs 105.99 crore in Q4 December 2013, higher than net loss of Rs 91.06 crore in Q4 December 2012. Net sales declined 25.9% to Rs 150.75 crore in Q4 December 2013 over Q4 December 2012. The Q4 result was announced after market hours on Friday, 28 February 2014.

Sterling Biotech reported net loss of Rs 400.65 crore in the year ended 31 December 2013 (FY 2013), higher than net loss of Rs 349.77 crore in the year ended 31 December 2012 (FY 2012). Net sales declined 14% to Rs 718.07 crore in FY 2013 over FY 2012.

As per the data released by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation the Quarterly GDP at factor cost at constant (2004-05) prices for Q3 of 2013-14 is estimated at Rs 14.8 lakh crore, as against Rs 14.1 lakh crore in Q3 of 2012-13, showing a growth rate of 4.7 per cent over the corresponding quarter of previous year. As per the revision policy, quarterly estimates and growth rates of 2011-12 and 2012-13 have undergone revision on account of revision in annual estimates of 2011-12 and 2012-13.However, the growth rates of Q1 and Q2 estimates of 2013-14 have not been revised and would undergo revision only at the time of the release of fourth quarter estimates and Provisional estimates for the year 2013-14 to be released on 31st May 2014. Therefore, Q1 and Q2 GDP estimates given in this release are based on Provisional estimates of 2012-13 released in May 2013, while the Q3 estimates are based on the First Revised estimates of 2013-14 released in January 2014.

The economic activities which registered significant growth in Q3 of 2013-14 over Q3 of 2012-13 are, ‘financing, insurance, real estate and business services' at 12.5 per cent, ‘community, social & personal services' at 7.0 per cent, ‘electricity, gas & water supply' at 5.0 per cent, ‘trade, hotels, transport and communication' at 4.3 per cent and ‘agriculture, forestry & fishing' at 3.6 per cent. The growth rate in ‘construction', ‘mining and quarrying' and ‘manufacturing' is estimated at 0.6 per cent, (-) 1.6 per cent and (-)1.9 per cent, respectively in this period.

The Eight Core Industries having a combined weight of 37.90% in the Index of Industrial Production (IIP) increased by 1.6% in January 2014 compared with a growth of 8.3% growth in January 2013 and 2.1% growth in December 2013.

Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories for February 2014 today, 3 March 2014. The HSBC PMI posted a reading of 51.4 for January 2014, up from 50.7 for December 2013.

Key benchmark indices edged higher on the last trading session of the week on Friday, 28 February 2014 after BJP's prime ministerial candidate for this year's Lok Sabha elections Mr. Narendra Modi promised policy implementation and said that he favoured introducing a nationwide goods and services tax (GST) in a speech delivered on Thursday, 27 February 2014. Dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014, also aided gains on the domestic bourses. The S&P BSE Sensex garnered 133.13 points or 0.63% to settle at 21,120.12 on that day, its highest closing level since 24 January 2014.

Foreign institutional investors (FIIs) bought shares worth a net Rs 591.82 crore on Friday, 28 February 2014, as per provisional data from the stock exchanges.

Asian stocks fell on Monday amid escalating geopolitical tension over Ukraine and after an official gauge of Chinese manufacturing dropped to an eight-month low. Key benchmark indices in Singapore, Japan, Hong Kong, Indonesia, Taiwan and South Korea were up 0.64% to 1.75%.

China's Shanghai Composite rose 0.73%. China's Purchasing Managers' Index fell to 50.2 in February compared with January's 50.5 reading, the lowest since June, the National Bureau of Statistics and China Federation of Logistics & Purchasing said March 1 in Beijing. A private gauge released today showed manufacturing contracting for a second month in February.

A meeting of China's lawmakers to set economic policy and growth targets begins this week in Beijing. The National People's Congress annual gathering begins on 5 March 2014.

A crisis in Ukraine has deteriorated as Russian President Vladimir Putin won parliamentary backing to send troops into its southern neighbor. Crimea, where Russian speakers comprise the majority, has become the focal point of Ukraine's crisis after an uprising that triggered last month's overthrow of President Viktor Yanukovych. Ukraine has put its forces on combat readiness and US President Barack Obama warned Russia not to intervene.

The US, the UK and Canada are suspending preparations for a meeting of the Group of Eight industrial nations in Russia in June. Russia may lose its membership of the G-8, while the US is considering imposing sanctions, Secretary of State Kerry said yesterday.

US stocks rose on Friday as some positive economic data boosted the S&P 500 to record levels for a second straight day and put major indexes on track for strong gains in both the week and the month.

The Chicago Purchasing Managers Index rose to 59.8 in February, topping expectations, while the final February reading on consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers also rose more than expected.

Other reports released on Friday suggested an economy that struggles to gain traction. GDP was estimated to have grown at an annual rate of 2.4% in the fourth quarter, the Commerce Department said. That was below estimates and down sharply both from its estimate last month of 3.2% and the 4.1% rate in the third quarter. Separately, pending home sales rose 0.1% in January, far below expectations for growth of 2%.

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.