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Monday, February 17, 2014
Muthoot looking for a foreign partner
Gold financing firm Muthoot Finance would be looking for tie up with a foreign partner as part of its plans to foray into insurance sector, said a management official from the company. The company currently have an insurance broking license.
Speaking to reporters after launching Asha, a gold loan scheme for women, George M Jacob, senior vice president, legal, corporate affairs and marketing, Muthoot Group, said, “We are planning to submit application for insurance license soon. We should have a foreign partner for entering into the sector.”
The initial investment into the proposed firm is expected to be around Rs 300 crore. It would take at least one year from the time of submitting application, for the company to get necessary approvals, he added.
On the hospitality operations, Raxa Collective, a management company under its Muthoot Leisure and Hospitality Services, is in the process of launching two new resorts with a total of around 20 rooms, in Kochi and Mararikulam, in Kerala. The company, which has around five properties including these, has been engaged in developing boutique properties, he added.
With the regulator issuing license for white label Automatic Telling Machine (ATM) centres, recently, the company would start launching Muthoot ATMs, in next two months. Plans are to set up 9,000 ATMs across the country, and in the first year, it is expecting around 1,000 ATMs to be installed, said Jacob.
The company, which currently has around 4,500 branches across the country, has 925 branches in Tamil Nadu and a Rs 5,914.11 crore assets under management (AUMs). Tamil Nadu contributes to about 27 per cent of the total AUMs of Muthoot Finance with over 18,000 customers.
Tamil Nadu is also a key market for the company's money transfer business and around five lakh money transfer transactions with a total amount of Rs 1,000 crore were carried out through the branches in the State, said the company.
Daily News Roundup - Feb 17 2014
Bharti Airtel, is set to buy Loop Mobile for about Rs7bn. Under the deal, besides subscribers, Bharti will take over the towers and other network assets of Loop. (BL)
JSW Steel has opposed removing an export duty of 5% on iron ore pellets. In fact, it wants this raised to 30%. (BS)
Piramal Enterprises, has decided to stop all services under its non-banking finance company, Piramal Finance. The latter is to merge with Indiareit Fund Advisors, the real estate venture capital fund of the conglomerate. (BS)
Biocon and US generic drug maker Mylan have challenged Delhi High Court’s interim order which barred them from using Swiss drug innovator Roche’s data to sell their jointly developed biosimilar version of breast cancer drug Trastuzumab. (ET)
The Bajaj Auto management claims "some of the union activists are sabotaging machinery/ equipment, causing deliberate production loss" and "creating an atmosphere of terror by agitations in the plant". (BS)
VE Commercial Vehicles Ltd (VECV) is revving up export plans from India and exploring new global markets, aiming up to 15% of total sales to come from overseas within five years. (BL)
Idea Cellular claims it does not need more to grow its voice business. It says it is expecting its data usage and subscribers to swell manifold and is ready with ‘raw material’. (BS)
The Centre might issue show-cause notices to companies, including the SAIL, Tata Steel, Essel Mining, Jindal Steel and Power and Odisha Mining Corp that hold 75 leases where illegal mining of iron and manganese ores was found by the Shah Commission. (BS)
Vodafone India has said the mobile telecom industry has reached a point where annual tariff increases are needed to sustain itself. (ET)
The SEBI has served a notice on Etihad Airways for alleged violation of the takeover code regulations while acquiring 24% stake in Jet Airways. (BS)
Economy Snippets
According to "2014 Global Life Sciences Outlook" by consultancy firm Deloitte pharmaceutical sales in India are expected to rise 14.4% to US$27bn in 2016 from last year, but the life sciences and health care industry is up against challenges such as quality management and meeting global standards. (ET)
The rural development ministry will soon come out with a new base and revised index for determining wages under its flagship rural job guarantee scheme, according to an official. The move will address the concerns of at least a dozen states where NREGA wages are lower than the notified minimum wages for agricultural labourers. (ET)
Country's peak power deficit was 5,378 MW or 4% in January 2014. (BL)
Positive start: Vote on account in focus
"Everything is interim. Everything is a path or a preparation for the next thing, and we never know what the next thing is" - Shauna Niequist.
Finance Minister P Chidambaram may have presented eight Budgets till date. But his first Vote-on-Account could well be a non-event if there are no major upsets. Nothing good is really expected except the likely revelation on the fiscal deficit figures. Some accounting dressing may ensure that the government meets the fiscal deficit target of 4.8 per cent of GDP for FY14. The vote on account may probably be a dialogue delivery with a political touch though not many sops are expected. Some minor incentives may come in for the auto sector. Going by the book, the FM has to just get Parliament’s approval for expenditure for the four months after March 31. Post market, Finance Minister Chidambaram, Ministers of State for Finance and the finance ministry secretaries will hold post-Budget press conference.
The outlook is a positive start. The market will remain in a tight range till the FM speaks around 11 am. The global cues are mostly positive. On Friday, the Dow rose 0.79%, the Standard & Poor's 500 Index gained 0.48% and the Nasdaq rose marginally. Asian markets are trading higher even as the Nikkei is slightly lower after the yen saw appreciation; a weak reading on economic growth in Japan (Japan's economy grew just 0.3% in Q4) also hurt sentiment.Hong Kong's Hang Seng index was up over a percent while South Korea's Kospi gained 0.44%. China's Shanghai index too was marginally up.
Meanwhile, SBI’s Q3 FY14 earnings performance was marred by higher provisioning, elevated opex growth and jump in tax rate. The key disappointment was substantially higher than anticipated slippages at Rs115bn. Investors will be closely watching Finance Minister Chidambaram’s announcements as he will seek Parliament approval for expenditure for the first quarter of FY15 on Monday. His vote-on-account will also project revenues and expenditure for the entire year.
FIIs were net sellers to the tune of ~Rs. 2,000 crore in a fortnight turning net sellers for this calendar year.
Tata Motors saw its market cap rising during last week as it entered the top-10 list in market valuation. The combined market valuation of 7 blue-chip Sensex companies surged Rs. 25,098 crore last week. TCS, RIL, ONGC and Infosys saw addition in their market-cap.
The minutes of the Federal Reserve's recent meeting of its policy-setting committee will be published on Wednesday. The U.S. stock market will be closed on Monday for Presidents Day.
Britannia Industries Ltd reported consolidated revenue growth of 10.2% in Q3 and 12.3% for the nine months at Rs. 1,772 crores & Rs. 5,052 crores respectively.
Shares of DLF Ltd and Spicejet stocks will be in focus today. DLF Ltd has posted a net profit of Rs. 1452.90 mn for the quarter ended December 31, 2013 as compared to Rs. 2848mn for the quarter ended December 31, 2012.
SpiceJet’s passenger traffic grew by 10% and revenues by 14% during the quarter ended December 31, 2013 as compared to quarter ended December 31, 2012.
US export prices rose 0.2% in January, the third straight monthly increase in a potentially positive sign for global economic demand.
In the latest data point affected by harsh winter weather, factory production fell 0.8% in January, the biggest drop in more than 4-1/2 years.
Results watch: Castrol India and Styrolution ABS.
Trends in FII flows: The FIIs were net sellers of Rs158.6mn in the cash segment on Friday, while the domestic institutional investors (DIIs) were net sellers of Rs450mn, as per the provisional figures released by the NSE.
The foreign funds were net buyers of Rs17.05bn in the cash segment on Thursday, according to SEBI data.
In other news in the media:
Bharti Airtel, is set to buy Loop Mobile for about Rs7bn. Under the deal, besides subscribers, Bharti will take over the towers and other network assets of Loop. (BL)
JSW Steel has opposed removing an export duty of 5% on iron ore pellets. In fact, it wants this raised to 30%. (BS)
Piramal Enterprises, has decided to stop all services under its non-banking finance company, Piramal Finance. The latter is to merge with Indiareit Fund Advisors, the real estate venture capital fund of the conglomerate. (BS)
Biocon and US generic drug maker Mylan have challenged Delhi High Court’s interim order which barred them from using Swiss drug innovator Roche’s data to sell their jointly developed biosimilar version of breast cancer drug Trastuzumab. (ET)
The Bajaj Auto management claims "some of the union activists are sabotaging machinery/ equipment, causing deliberate production loss" and "creating an atmosphere of terror by agitations in the plant". (BS)
VE Commercial Vehicles Ltd (VECV) is revving up export plans from India and exploring new global markets, aiming up to 15% of total sales to come from overseas within five years. (BL)
Idea Cellular claims it does not need more to grow its voice business. It says it is expecting its data usage and subscribers to swell manifold and is ready with ‘raw material’. (BS)
The Centre might issue show-cause notices to companies, including the SAIL, Tata Steel, Essel Mining, Jindal Steel and Power and Odisha Mining Corp that hold 75 leases where illegal mining of iron and manganese ores was found by the Shah Commission. (BS)
Vodafone India has said the mobile telecom industry has reached a point where annual tariff increases are needed to sustain itself. (ET)
The SEBI has served a notice on Etihad Airways for alleged violation of the takeover code regulations while acquiring 24% stake in Jet Airways. (BS)
According to "2014 Global Life Sciences Outlook" by consultancy firm Deloitte pharmaceutical sales in India are expected to rise 14.4% to US$27bn in 2016 from last year, but the life sciences and health care industry is up against challenges such as quality management and meeting global standards. (ET)
The rural development ministry will soon come out with a new base and revised index for determining wages under its flagship rural job guarantee scheme, according to an official. The move will address the concerns of at least a dozen states where NREGA wages are lower than the notified minimum wages for agricultural labourers. (ET)
Country's peak power deficit was 5,378 MW or 4% in January 2014. (BL)
Dalal Street expects a positive start
Indian Indices:
Today the global scenario looks favorable, which may result in positive opening of the Indian markets. SGX Nifty is also trading 17.00 points higher.
On Friday (February 14, 2014) Sensex closed at 20366.82, up by 173.47 points, while the Nifty was up 47.25 points to close at 6048.35.
Global Market
Asian shares extended their recent rally on Monday as worries about emerging markets continued to ebb, dragging down the U.S. dollar while giving commodities a lift.
US stocks closed higher on Friday, with major indexes notching a second straight week of gains as investors were once again willing to overlook some soft economic data stemming from bad weather.
Europe market ended higher after better-than-expected growth in industrialised nations of Germany and France helped the Euro zone grow 0.3% in the fourth quarter ended December 2013 compared to the third quarter.
Major Headlines of the day
ONGC to raise gas output to 100 mmscmd by 2017-18.
NTPC to lay foundation stone of 1,600 MW project in MP.
Eicher targets more exports; 15% of total sales within 5 yrs.
Market may edge higher in early trade on firm Asian stocks
The market may edge higher in early trade on firm Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 18.50 points at the opening bell. Asian stocks rose on Monday after China's new credit increased to a record in January, boosting optimism the world's second-largest economy can maintain its growth momentum.
Finance Minister P Chidambaram will present the Vote-on-Account or interim budget for the first four months of 2014/15 today, 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.
Tata Motors announced after market hours on Friday, 14 February 2014 that group global wholesales in January 2014, including Jaguar Land Rover were 80,163 units.Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range -- were 30,121 units. Global wholesales of all passenger vehicles in January 2014 were 50,042 units. Global wholesales of Tata Motors' passenger vehicles in January 2014 were 11,411 units.
Global wholesales for Jaguar Land Rover for the month were 38,631vehicles. Jaguar wholesales for the month were 6,711 vehicles, while Land Rover wholesales for the month were 31,920 vehicles.
DLF's consolidated net profit fell 48.98% to Rs 145.29 crore on 13.04% rise in total income to Rs 2590.20 crore in Q3 December 2013 over Q3 December 2012. The company announced result after market hours on Friday, 14 February 2014.
Steel Authority of India (Sail)'s net profit rose 9.97% to Rs 532.60 crore on 7.14% increase in total income to Rs 11667.52 crore in Q3 December 2013 over Q3 December 2012. The result was announced after market hours on Friday, 14 February 2014.
Sail said that the board of directors of the company at its meeting held on 14 February 2014, inter alia, has approved interim dividend of Rs 2.02 per equity share for the year ending 31 March 2014.
NMDC turns ex-dividend today, 17 February 2014 for the second interim dividend of Rs 5.50 per share for the year ending 31 March 2014.
State Bank of India said on Saturday, 15 February 2014 that it has revised downwards the interest rates on Bulk Term Deposits for Rs 1 crore and above effective from 18 February 2014. It has also decided to revise the interest rates on Retail Term Deposits effective from 18 February 2014.
Punjab National Bank said on Saturday, 15 February 2014 that after regulatory approvals, the bank has decided to sell its entire stake in India Factoring & Financial Solutions (IFFSL) to parent promoter Fll (FIM Bank Malta). The transaction shall be completed during the current quarter ending 31 March 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 surged on the last trading session of the week on Friday, 14 February 2014 as easing of inflation based on the wholesale price index (WPI) to 8-month low of 5.05% in January 2014, strong response to the telecom spectrum auction which will help the government achieve its fiscal deficit target of 4.8% of gross domestic product for the year ending 31 March 2014 and data showing that foreign funds were net buyers of Indian stocks on Thursday, 13 February 2014, helped boost sentiment. The S&P BSE Sensex jumped 173.47 points or 0.86% to settle at 20,366.82 on that day, its highest closing level since 12 February 2014.
Foreign institutional investors (FIIs) sold shares worth a net Rs 15.86 crore on Friday, 14 February 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Monday after China's new credit increased to a record in January, boosting optimism the world's second-largest economy can maintain its growth momentum. Key benchmark indices in China, Hong Kong, South Korea, Indonesia, Taiwan, Japan and Singapore rose by 0.13% to 0.95%.
Japan's economy grew less than forecast in the fourth quarter, according to a report today, underscoring risks to the recovery as a sales-tax increase looms in April. Gross domestic product expanded an annualized 1.0% from the previous quarter, the Cabinet Office said in Tokyo.
US stocks rose on Friday as investors shrugged off a report showing poor industrial output last month as mainly weather-related. The US stock market is closed today for a holiday.
US industrial output unexpectedly fell 0.3 per cent in January but the Federal Reserve said that was partly due to "the severe weather that curtailed production in some regions".
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.
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