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Friday, February 14, 2014

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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.

Daily News Roundup - Feb 14 2014


United Bank of India either deliberately or unintentionally hid bad loans as its automated system to detect payment defaults was non-functional for over 2 years, says a Deloitte audit. (ET)

Infosys is setting out on a major talent hunt in global B-schools, hoping to recruit 200 MBAs in the US, Europe and Asia-Pacific. The move will help beef up its business consulting practice and also intensify its client engagement. (ET)

Reliance Jio Infocomm has entered the voice segment for the first time and bought more airwaves for fourth-generation services, this time in the 1800 MHz band in 14 service areas for around Rs110bn. It has bought five or more MHz in each of the circles, which is a necessity for 4G. (ET)

Bharti Airtel acquired 115 MHz of airwaves in 15 circles in the 1800 MHz band and three circles in the 900 MHz bands for a total of Rs185.3bn. Vodafone India grabbed airwaves in 11 circles in the 1800 MHz band and improved its 900 MHz spectrum holding with a total payout of Rs196bn.

Essar Group’s Aegis is close to acquiring two companies, its chief executive officer said. While one of the targets will be from Britain, the company did not divulge the geographical location of the other firm, which will be in the non-voice category. (ET)

TCS will beat Nasscom's growth guidance of 13-15% for FY15, CEO N Chandrasekaran said. (BS)

Following the Office of Fair Trading of the UK’s directive, United Spirits Ltd would have to sell at least 70% of its scotch whisky subsidiary Whyte & Mackay. It is understood USL is planning to raise about US$800mn through the sale and is close to appointing bankers for the transaction. (BS)

Tilaknagar Industries, maker of Mansion House and Courrier Napoleon brandies, is in the advanced stage of discussion with Tamil Nadu-based Indian made foreign liquor maker Imperial Spirits. (BS)

Days after receiving the draft report from Deloitte on restructuring of state-owned Coal India, Union Coal minister raised questions over the rationale behind the proposal, indicating he would prefer shelving the plan. (BS)

Sun Pharmaceutical Industries has further revised its growth projection to 29% for the year ending March 2014, up from 25% earlier. (BL)

Essar’s Mahan Coal Ltd has received the stage II forest clearance from the Ministry of Environment and Forests for the coal block in Madhya Pradesh subject to conditions. (BL)

Economy Snippets
A person can’t be an independent director in more than seven companies and cannot accept stock options, according to new rules issued by the SEBI. The SEBI board also made it mandatory for companies to disclose CEO compensation. (ET)

India’s telecom spectrum auction raised Rs611.62bn after 10 days of fierce bidding, falling just short of the amount bid for 3G airwaves in 2010. (BL)

The Union Cabinet has cleared the revised Civil Aviation Authority Bill, incorporating the changes recommended by the standing committee on transport, tourism and culture. (ET)

RBI governor has suggested that the government reduce expenditure on subsidies and raise energy prices, saying such a move will help in the fight against inflation. (ET)

The ministry of rural development will be asking for another Rs10bn to complete the Socio Economic and Caste Census that’s already about three years overdue and is likely to take longer. (ET)

Positive start, caution likely



Don't fall in love with someone who says the right things, fall in love with someone who does the right things.- Robert Tew

There is not much left to say after the Lok Sabha saw a new low as two MPs from Andhra Pradesh used pepper spray on fellow MPs while another brandished a sharp object to create panic in Parliament. Lok Sabha Speaker Meira Kumar suspended 18 MPs from Andhra Pradesh for rest of the session.

In the Rajya Sabha, the government tabled the mid year economic review which stated that high inflation rate is the biggest risk to growth outlook and the headline wholesale price inflation (WPI) needs to be brought below 6%.

The Wholesale price inflation data to be released today is expected to show some moderation. "The recent structural reforms undertaken by the Government are likely to place the economy on a higher potential growth path, from where acceleration to a higher growth trajectory can occur reasonably quickly, once global recovery gains momentum and cyclical upturn strengthens," the mid-year review added.

The opening is set to be positive. Investors will stay a bit cautious ahead of the vote-on-account next week. Some results will cause the usual swings in counters. Telecom companies will remain in focus. The government garnered ~ Rs61,100 crore from the auction of 900-MHz and 1,800-MHz spectrum. The Centre will get Rs 18,296.32 crore (as first instalment) this financial year, about 61 per cent higher than the Budget target of Rs 11,343 crore, said MF Farooqui, secretary, Department of Telecommunications was quoted as saying.

The Dow gained more than 60 points, while the S&P 500 rose 0.6%. The Nasdaq gained almost 1%, logging its sixth straight day of gains The government reported that retail sales unexpectedly fell in January but this did not dampen sentiment for the day.

The Bharatiya Janata Party will emerge as the front-runner in the upcoming general election, according to the Times NOW-C Voter national poll projection unveiled on Thursday. The latest pre-poll survey predicts a big surge for BJP from the last election, taking the seat count for the National Democratic Alliance that it leads to 227, just 55 short of a simple majority. That compares with 159 Lok Sabha seats for NDA in 2009.

SEBI has stated that a person can't be an independent director in more than seven companies and cannot accept stock options from them. Sebi also made it mandatory for companies to disclose CEO compensation.

Oil & Natural Gas Corporation Ltd has posted a net profit of Rs. 71259.70 mn for the quarter ended December 31, 2013 as compared to Rs. 55627.20 mn for the quarter ended December 31, 2012. .

The government has tabled the mid-year economic review in the Rajya Sabha.The government has pegged FY14 GDP growth at 5%, expecting economic recovery to pick up in coming quarters.

Sun Pharmaceutical Industries Ltd has posted a net profit after taxes and minority interest of Rs. 15310.90 mn for the quarter ended December 31, 2013 where as the same was at Rs. 8813.00 mn for the quarter ended December 31, 2012.

Shares of Coal India was down 3% at Rs260 after the company has posted a net profit after taxes, Minority Interest and Share of Profit / (loss) of Associates of Rs. 38940.90 million for the quarter ended December 31, 2013 as compared to Rs. 43951.10 mn for the quarter ended December 31, 2012.

Shares of IOC was down 5% at Rs244 after the company posted a net loss of Rs. (9614.50) mn for the quarter ended December 31, 2013 as compared to net profit of Rs. 33319.60 million for the quarter ended December 31, 2012.

Worldwide sales of smartphones to end users totaled 968 mn units in 2013, an increase of 42.3 percent from 2012, according to Gartner, Inc. Sales of smartphones accounted for 53.6% of overall mobile phone sales in 2013, and exceeded annual sales of feature phones for the first time.

Results watch: Punj Lloyd, SBI, DLF, Suzlon Energy, Unitech, Aadi Inds, Aarey Drugs, ABC Bearings, ABG Infra, ABG Shipyard, Accel Front, Accurate Trans, ACE Edutrend, ADI Rasayan, ADV Power, Advance Micro, Ahluwalia Const, Aimco Pest, Alchemist Corp, Allcargo Logistics, Alpine Housing, Amrapali Inds, Apple Finance, Arcee Inds, Aries Agro, Aruna Hotel, Arunjyoti Enterprises, Aruna Hotels, Arunjyoti Enterprises, Arvind Intl, Arvind Remedies, Asahi Ind, Ashiana Ispat, Asian Hotels (West), Aurionpro Sol, Auro Lab, Autopal Inds, Autoriders Intl, Avon Corp, Axis Capital, Azure Exim Services, B2B Software, BAG Films, Bajaj Hind, CHD Developers, CESL, Cals Ref, Cosmo Films, CRISIL, Deccan Cements, DEN NETWORK, Educomp Sol, Elder Health, Elder Pharma, Financial Tech, Era Infra, Gayatri Proj, Geodesic, Gitanjali Gems, Gujarat Fluo, Gujarat Metallic, HDIL, Hindustan Oil, Hitech Gears, ICVL Chem, Jayshree Chem, Jindal Poly, IVRCL, Jaihind Proj, KSK Energy, Lakshmi Vilas Bank, Magna Inds, Mahindra & Mahindra, Maxwell Inds, Mcnally Bharat, Monnet Ispat Energy, MTNL, Orissa Minerals Development, Rajesh Exports, Rolta India, Steel Strips, Steel Strp Infra, Surya Pharma, Vardhman Inds, Venkys and Zenith.

Trends in FII flows: The FIIs were net buyers of Rs3.99bn in the cash segment on Thursday, while the domestic institutional investors (DIIs) were net sellers of Rs2.92bn, as per the provisional figures released by the NSE.

In other news in the media:

United Bank of India either deliberately or unintentionally hid bad loans as its automated system to detect payment defaults was non-functional for over 2 years, says a Deloitte audit. (ET)

Infosys is setting out on a major talent hunt in global B-schools, hoping to recruit 200 MBAs in the US, Europe and Asia-Pacific. The move will help beef up its business consulting practice and also intensify its client engagement. (ET)

Reliance Jio Infocomm has entered the voice segment for the first time and bought more airwaves for fourth-generation services, this time in the 1800 MHz band in 14 service areas for around Rs110bn. It has bought five or more MHz in each of the circles, which is a necessity for 4G. (ET)

Bharti Airtel acquired 115 MHz of airwaves in 15 circles in the 1800 MHz band and three circles in the 900 MHz bands for a total of Rs185.3bn. Vodafone India grabbed airwaves in 11 circles in the 1800 MHz band and improved its 900 MHz spectrum holding with a total payout of Rs196bn.

Essar Group’s Aegis is close to acquiring two companies, its chief executive officer said. While one of the targets will be from Britain, the company did not divulge the geographical location of the other firm, which will be in the non-voice category. (ET)

TCS will beat Nasscom's growth guidance of 13-15% for FY15, CEO N Chandrasekaran said. (BS)

Following the Office of Fair Trading of the UK’s directive, United Spirits Ltd would have to sell at least 70% of its scotch whisky subsidiary Whyte & Mackay. It is understood USL is planning to raise about US$800mn through the sale and is close to appointing bankers for the transaction. (BS)

Tilaknagar Industries, maker of Mansion House and Courrier Napoleon brandies, is in the advanced stage of discussion with Tamil Nadu-based Indian made foreign liquor maker Imperial Spirits. (BS)

Days after receiving the draft report from Deloitte on restructuring of state-owned Coal India, Union Coal minister raised questions over the rationale behind the proposal, indicating he would prefer shelving the plan. (BS)

Sun Pharmaceutical Industries has further revised its growth projection to 29% for the year ending March 2014, up from 25% earlier. (BL)

Essar’s Mahan Coal Ltd has received the stage II forest clearance from the Ministry of Environment and Forests for the coal block in Madhya Pradesh subject to conditions. (BL)

A person can’t be an independent director in more than seven companies and cannot accept stock options, according to new rules issued by the SEBI. The SEBI board also made it mandatory for companies to disclose CEO compensation. (ET)

India’s telecom spectrum auction raised Rs611.62bn after 10 days of fierce bidding, falling just short of the amount bid for 3G airwaves in 2010. (BL)

The Union Cabinet has cleared the revised Civil Aviation Authority Bill, incorporating the changes recommended by the standing committee on transport, tourism and culture. (ET)

RBI governor has suggested that the government reduce expenditure on subsidies and raise energy prices, saying such a move will help in the fight against inflation. (ET)

The ministry of rural development will be asking for another Rs10bn to complete the Socio Economic and Caste Census that’s already about three years overdue and is likely to take longer. (ET)