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Friday, February 21, 2014
Five red flags that could lead to a drop in CIBIL Credit Scores
CIBIL rating or a CIBIL credit score becomes extremely important for both the lender and the borrower. As we all know prevention is better than cure – this hold true not only in medical issues but also in financial issues. If we knew the red flags that can bring down the Cibilcredit score, we could act quickly and prevent the fall.
Using a high percentage of credit limit on your credit card
Each credit card that you hold has an upper spending limit that is set by the card issuing bank. The sum of these limits adds up to the total credit limit of your credit cards. Ideally you should not be using more than 30% of this credit limit. A higher usage brings down your credit score. Besides showing in the credit report a high credit usage 60% or higher is a reminder that you need to monitor your expenses to avoid slipping into the vortex of debt.
Taking a personal loan to pay off a housing loan EMI
With the prices of reality touching sky high, the EMI on mortgage loans takes up a huge chunk of the monthly disposable income. It is no surprises that many of us end up scrambling to make these payments. However if you are taking a personal loan or a loan against gold another security to pay you home loan EMI you need to take this as bright red flag to alert you that you need to get your finances under control. While you might be able to meet a few EMIs this way ultimately you will fall behind payments affecting your CIBIL credit report and CIBIL credit score.
Tapping into “goal” funds
Each of us have dreams for the future and we start planning for the future by saving for these goals, the goals might include a child’s education, a secure retirement etc. A steady monthly saving is one of the best ways to reach these goals. However if you are tapping into these savings to meet a current expense it should alert you that you are on the wrong road.
Your credit score is low and falling
Your credit score is an indicator of your financial health. If your credit score is below 700 and has been on the decline for the last few months, it should be a wake-up call for you to make corrections in your spending and payments. A strong credit score is essential for being considered a good credit risk for banks to lend to you at a favourable rate.
Bouncing your cheques
If you are routinely overdrawing your bank account or bouncing checks, then you are most likely either very poorly managing your finances or in serious debt. While bouncing checks does not directly show up on your credit report, higher utilization of your accounts will have negative impact on your Cibilcredit score.
Budget week boosts Indian indices; Markets up 2%
In the third week of February 2014 auto, capital goods shares gained on favorable announcements in interim budget. The Sensex shut shop 1.64% higher while the Nifty rose 1.77% for the week ended February 21, 2014
Major Headlines for the week:
Vote on Account 2014: Full coverage
Vote on Account 2014-15: High on intent, as expected
Cement Q3 review: Cost inflation dents earnings
Q3FY2014 Capital Goods & Engineering earnings review
Q3FY2014 Banking earnings review
Indian indices:
Welcome to the ‘Weekly Market Wrap’ for February 21, 2014 where key benchmark indices edged higher in the week as gains were triggered by the Finance Minister P Chidambaram saying that the fiscal deficit will be contained at 4.6% of GDP for the year ending 31 March 2014 (2013-14) and will be pruned further to 4.1% of GDP in 2014-15 and that the current account deficit (CAD) will be contained at $45 billion in 2013-14 at the time of presenting Interim Budget for 2014-15 on Monday, February 17, 2014. The market gained in four out of five trading sessions in the week just gone by.
The S&P BSE Mid-Cap index rose 110.17 points or 1.75% to 6,422.05 and the S&P BSE Small-Cap index gained 113.64 points or 1.81% to 6,393.33. Both these indices outperformed the Sensex.
The S&P BSE Sensex rose 333.93 points to 20,700.75. The 50-unit CNX Nifty gained 107.10 points to 6,155.45.
Major events for the week:
After being disrupted by shouting parliamentarians, the finance minister P. Chidambaram was finally able to make the interim-budget speech in the lower house on Monday.
The key highlights of the interim budget include, Excise cut on capital goods cut from 12% to 10%, Excise duty cut on small cars and two wheelers reduced from 12% to 8%, Excise duty for SUVs cut from 30% to 24%, Excise duty for large and mid-segment cars cut to 20%, Excise duty on consumer durables cut from 12% to 10%.
As per the proposals presented in the interim budget today, net borrowings of the government in 2014-15 are pegged at Rs4.57 lakh crore against Rs4.68 lakh crore for the 2013-14 fiscal.
According to the interim Budget proposals, subsidy bill on food, petroleum and fertilisers is estimated at Rs2,46,397 crore for 2014-15 fiscal against Rs2,45,452 crore in the revised estimates for this fiscal.
The Finance Minister also said that merchandise exports are projected to rise 6.3% to $326 billion in FY14. For FY15, he said that the government will provide capital infusion on Rs11,200 crore to public sector banks and total spending on food, fertiliser and fuel subsidies will be at Rs2.5 lakh crore.
Weekly market trend from February 17, 2014 – February 21, 2014:
Feb 17- Indian shares ended higher on Monday as the government announces a package of indirect tax cuts to breathe life into spending and investment, and trumpets its record of growth and reform over the past decade in its last budget before an election it looks set to lose. The BSE Sensex rose 0.48% and NSE Nifty was up by 0.41%. Benchmarks gained in late trades to end higher after the Finance Minister P Chidambaram forecasted GDP growth rate of atleast 5.2% in the last two quarters of the current fiscal. The Sensex closed at 20464.06, up by 97.24 points, while the Nifty was up 24.95 points to close at 6073.30
Feb 18- Indian shares ended higher on Tuesday after Finance Minister yesterday announced a fiscal deficit target of 4.1% of the GDP, and a gross market borrowing of 5.97 trillion rupees, below market expectations. The BSE Sensex rose 0.83% and NSE Nifty was up by 0.89%. High growth forecast in the last two quarters of the current fiscal, fiscal deficit target at an 8-year low of 4.1% and reduction in net borrowing for FY15 lifted markets to their three-week intra-day highs on Tuesday. The Sensex closed at 20634.21, up by 170.15 points, while the Nifty was up 53.80 points to close at 6127.10
Feb 19- Indian shares rose for a fourth consecutive session on Wednesday to mark their highest close in nearly four weeks, although amid low volumes, after software exporters such as Infosys gained on continued optimism about U.S. business. The BSE Sensex rose 0.43% and NSE Nifty was up by 0.42%. Benchmark share indices surged in late trades to end near their day's high after remaining rangebound for most part of the trading session with IT majors leading the gains. The Sensex closed at 20722.97, up by 88.76 points, while the Nifty was up 25.65 points to close at 6152.75
Feb 20- Indian shares fell on Thursday to snap four consecutive sessions of gains as blue-chips including ICICI Bank were hit by profit-taking after regional markets were hit by a survey painting a grim picture of China's manufacturing sector. The BSE Sensex fell 0.90% and NSE Nifty was down by 1.00%. Falling global markets also weighed on the investor sentiment after Fed minutes released late Wednesday signaled continuation of trimming its bond buying program at the usual pace of $10bn-a-month unless economy surprises significantly. The Sensex closed at 20536.64, down by 186.33 points, while the Nifty fell 61.30 points to close at 6091.45
Feb 21- Indian shares rose for a fifth time in six sessions on Friday as a recovery in global markets allowed blue chips such as ITC to recover from falls in the previous session, while cement makers such as ACC surged on speculation of price hikes. The BSE Sensex rose 0.80% and NSE Nifty was up by 1.05%. Benchmark indices recouped most of yesterday's losses to end higher on Friday helped by a rebound in bank shares while encouraging data from the US boosted sentiment for IT shares. The Sensex closed at 20700.75, up by 164.11 points, while the Nifty rose 64.00 points to close at 6155.45
Global indices:
Looking at Global Markets: Gainers were- Nikkei up 3.86%, FTSE 100 up 2.24% and Hang Seng up 1.21%, Losers were- Dax 100 down 0.45%, Dow Jones down 0.13% and Shanghai Composite down 0.10%
Sectoral and stock screening:
Among the 13 sectoral indices five sectors closed in the red zone while others ended in green in the week gone by. Top Gainers - S&P BSE CG surged 4.66%, followed by S&P BSE Bankex which rose 3.36%, S&P BSE Power up 2.83% and S&P BSE IT gained 2.19%. Top Losers - S&P BSE Metal down 0.92%, S&P BSE PSU fell 0.57% and S&P BSE Oil & Gas slipped 0.42%.
Looking at the 'A' group stocks, the top three gainers of the week were - Financial Technologies up by 19.39%, ABB rose 16.81% and Adani Ports & Special Economic Zone up by 13.99%. The top three losers of the week were - Muthoot Finance fell by 11.39%, Cipla slipped by 10.54% and Tata Communications dipped by 10.41%.
FII activity:
The foreign institutional investors (FIIs) have been the net buyers of the Indian stocks to the tune of Rs1224.30 crore as on February 18, 2014.
Market outlook for the coming week!
In the coming week, expiry of the near month February 2014 futures and options (F&O) contracts may trigger volatility on the bourses in a truncated trading week.
The near month February 2014 F&O contracts expire on Wednesday, February 26, 2014. Futures trading on the National Stock Exchange's (NSE) volatility index -- India VIX -- begin from Wednesday, February 26, 2014.
The stock market remains closed on Thursday, February 27, 2014, on account of Mahashivratri.
On the macro front, the government will unveil data on gross domestic product (GDP) for Q3 December 2013 on Friday, February 28, 2014.
Shares of automobile companies will be in focus as automobile companies start unveiling monthly sales volumes data for February 2014 from Saturday, March 01, 2014.
Nifty hits 4-week closing high
Key benchmark indices edged higher on the last trading session of the week, with the market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 20 February 2014. Gains in Asian and European stocks also aided the upmove on the domestic bourses. The 50-unit CNX Nifty hit 4-week closing high. The barometer index, the S&P BSE Sensex, garnered 164.11 points or 0.8%, off close to 25 points from the day's high and up about 100 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
The Sensex has risen 186.90 points or 0.91% in this month so far (till 21 February 2014). The Sensex has declined 469.93 points or 2.21% so far in calendar 2014 (till 21 February 2014). From a record high of 21,483.74 on 9 December 2013, the Sensex has declined 782.99 points or 3.64%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,252.04 points or 18.63%.
Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Index heavyweight and cigarette maker ITC extended intraday gains in late trade. Bank stocks were mostly higher. HCL Technologies surged to a record high after HCL Corp., the holding company for HCL Technologies, today, 21 February 2014, denied a newspaper report that said its founder Shiv Nadar was seeking potential buyers for his $10 billion stake in the company.
Telecom stocks declined as the new rules announced by the government late on Thursday, 20 February 2014, on mergers and acquisitions (M&A) in the telecom sector require the buyer of an Indian mobile phone company pay a fee to the government, in addition to what it pays for the target company.
The market edged higher in early trade on firm Asian stocks. The Sensex extended initial gains and hit fresh intraday high in morning trade. The Sensex trimmed gains after hitting fresh intraday high in mid-morning trade. Firmness continued on the bourses in afternoon trade. The Sensex trimmed intraday gains in mid-afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 20 February 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 219.20 crore from the secondary equity markets on Thursday, 20 February 2014, as per the data from the Securities & Exchange Board of India (Sebi).
Asian and European stocks edged higher on Friday, 21 February 2014, after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth. US economy is the world's biggest economy.
The S&P BSE Sensex garnered 164.11 points or 0.8% to settle at 20,700.75, its highest closing level since 19 February 2014. The index jumped 188.40 points at the day's high of 20,725.04 in mid-morning trade. The index rose 63.27 points at the day's low of 20,599.91 in early trade.
The CNX Nifty garnered 64 points or 1.05% to settle at 6,155.45, its highest closing level since 24 January 2014. The index hit a high of 6,159.65 and a low of 6,108 in intraday trade.
The BSE Mid-Cap index rose 45.03 points or 0.71% at 6,422.05. The BSE Small-Cap index garnered 31.48 points or 0.49% at 6,393.33. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1707 crore, lower than Rs 1807.71 crore on Thursday, 20 February 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,480 shares rose and 1,182 shares fell. A total of 154 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks rose and rest fell.
Cement stocks surged on reports that cement makers have raised cement prices in North India this month. ACC, Ambuja Cements, Shree Cement and UltraTech Cement rose 3.7% to 6.09%. "Prices are up by Rs 30-45 per bag month-on-month in February (over Jan-14 average) across all these markets (North largely Delhi, Rajasthan and Punjab)," a brokerage wrote in an email to clients today, 21 February 2014, according to reports.
Index heavyweight and cigarette maker ITC rose 1.7% at Rs 317.10. The stock hit high of Rs 317.85 and low of Rs 313.
Index heavyweight Reliance Industries (RIL) rose 0.56% at Rs 809.85. The scrip hit high of Rs 815.95 and low of Rs 806.20.
Bank stocks were mostly higher. Among private sector banks, ICICI Bank (up 1.83%), Yes Bank (up 1.16%), Federal Bank (up 1.38%), and AXIS Bank (up 2.7%), gained. HDFC Bank (down 0.19%) and Kotak Mahindra Bank (down 0.37%) declined
Among PSU bank stocks, State Bank of India, Canara Bank, Bank of India, Bank of Baroda and Punjab National Bank shed 0.24% to 1.05%. Union Bank of India fell 0.29%.
The government's allocation of Rs 11200 crore for capital injection into state-run banks is credit negative as it is much smaller than estimated requirements, global credit rating agency Moody's Investors Service said on Thursday, 20 February 2014. The rating agency said in a report that it estimates lenders would need Rs 25000-36000 crore to meet a minimum Tier 1 ratio of 8% in the fiscal year ending March 2015. "Indian public-sector banks' need for significant external capital is a result of an increase in non-performing loans (NPLs) owing to the country's slowing economy and infrastructure bottlenecks, and profitability that is insufficient for internal capital generation to fund loan growth," it said. Early this week, the government unveiled its interim budget for the fiscal year starting in April, allocating Rs 11200 crore for capital injection into public-sector banks.
Shares of United Bank of India edged higher in choppy trade after Mrs. Archana Bhargava resigned as chairperson and managing director of the state-run bank. The stock rose 1.4% to Rs 24.60. United Bank of India said that Ministry of Finance vide its letter dated 21 February 2014 has communicated its acceptance to the application for voluntary retirement of Archana Bhargava, chairperson and managing director (CMD) of the bank with effect from 20 February 2014. The announcement was made during trading hours today, 21 February 2014.
In absence of the CMD, both the executive directors shall jointly remain in charge of the bank, till such time that a regular incumbent takes over the charge of CMD, United Bank of India said in a statement.
Metal and mining stocks edged higher. Sesa Sterlite (up 0.27%), NMDC (up 1.29%), Hindalco Industries (up 0.31%), Hindustan Copper (up 0.26%), JSW Steel (up 2.31%), National Aluminum Company (up 0.47%), Hindustan Zinc (up 0.33%), Jindal Steel & Power (JSPL) (up 1.21%) and Tata Steel (up 1.8%) gained. Steel Authority of India (Sail) fell 0.51%.
Many pharma stocks gained on renewed buying. Wockhardt (up 0.98%), Cadila Healthcare (up 0.84%), and Glenmark Pharmaceuticals (up 0.34%) gained. Cipla (down 0.51%), Lupin (down 0.29%) Ranbaxy Laboratories (down 1.84%) and Sun Pharmaceutical Industries (down 0.82%) declined.
Dr. Reddy's Laboratories rose 0.58% to Rs 2,729.20 after striking a record high of Rs 2,744 in intraday trade.
Divi's Laboratories gained 1.8% to Rs 1,421.20 after striking a record high of Rs 1,428 in intraday trade.
Ipca Laboratories rose 5.04% to Rs 887.80 after hitting record high of Rs 894 in intraday trade.
Natco Pharma rose 3.78% to Rs 803 after striking a record high of Rs 840.30 in intraday trade.
GlaxoSmithKline Pharma rose 0.26% to Rs 3,025.90. The Cabinet Committee on Economic Affairs on Thursday, 20 February 2014, approved the proposal of GlaxoSmithKline Pte, Singapore for acquisition of 24.33% of shares in the existing Indian subsidiary company of the GSK Group in India by way of a voluntary open offer under SEBI (SAST Regulations) in the pharmaceutical sector. The approval would result in foreign investment of approximately Rs 6390 crore in the country, the government said in a statement.
Construction stocks rose after the Union Cabinet on Thursday, 20 February 2014, gave its approval for declaration of about 7,200 kms of State Roads as new National Highways (NHs). Hindustan Construction Company, L&T, NCC, Jaiprakash Associates, Patel Engineering and IRB Infrastructure & Developers rose 0.39% to 5.09%.
Keeping in view the estimated allocations likely to be made available for development of non-National Highways Development Project NHs based on the previous years' trends, it is anticipated that there would be adequate funds available for taking up improvement works on these new NHs, the government said in a statement. There would also be adequate funds available for taking up improvement of the remaining existing NH Network of 21,271 kms, not covered under any programmes/schemes so far, it said. Expansion of the NH network is a continuous process and declaration of a new NH is taken up from time to time, depending upon requirement of connectivity, inter-se priority and availability of funds.
National highways are the main artery and serve as a backbone of the road network. District Headquarters being an important origination/destination for people as well as goods are expected to have good accessibility, the government said. All District Headquarters now will have better connectivity to the NH network and this will bring overall development to the entire nation, it said.
Realty stocks edged higher. D B Realty (up 1.73%), Sobha Developers (up 0.44%) and Unitech (up 0.16%) gained. But, DLF fell 0.8%.
IT stocks gained on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Tech Mahindra (up 0.82%), Wipro (up 1.1%), and Infosys (up 1.02%) gained.
HCL Technologies surged to a record high after HCL Corp., the holding company for HCL Technologies, today, 21 February 2014, denied a newspaper report that said its founder Shiv Nadar was seeking potential buyers for his $10 billion stake in the company. The stock jumped 4.32% to Rs 1,537 after hitting record high of Rs 1,546 in intraday trade. "HCL Corporation denies any plans to exit HCL Technologies," it said in a statement. Mr. Nadar, who founded HCL in 1991, holds about 62% stake in HCL Technologies.
TCS gained 0.57% after the company said after market hours on Thursday, 20 February 2014, that it has partnered with the Finnish Wheelchair Curling Team, supporting the team in their quest for Olympic glory at the Paralympic Winter Games in Sochi. TCS will serve as a partner to the team for one year and provide support for the team towards their equipment, logistics and digital devices such as smart phones at Sochi.
Shares of power generation companies edged higher. NTPC (up 0.49%), NHPC (up 0.56%), and Reliance Power (up 0.72%) gained. GVK Power & Infrastructure (down 0.22%) and Torrent Power (down 1.68%) fell.
Coal India declined 0.04%.
Power Minister Jyotiraditya Scindia on Thursday, 20 February 2014, said that coal imports by power generation companies in India jumped 31% to 66 million tonnes in April-January compared with the same period a year earlier. In April-January power producers imported 31 million tonnes of coal to blend them with lower quality varieties and about 35 million tonnes for plants that depend exclusively on coal from overseas, Scindia said. India's coal-based power generation rose 8% to 587.64 billion kilowatt hour during the period from a year earlier. Power companies are likely to import 82 million tonnes this fiscal year ending 31 March 2014, Scindia said.
Telecom stocks declined as the new rules announced by the government late on Thursday, 20 February 2014, on mergers and acquisitions (M&A) in the telecom sector require the buyer of an Indian mobile phone company pay a fee to the government, in addition to what it pays for the target company. Idea Cellular (down 1.76%), Tata Teleservices (Maharashtra) (down 1.82%) and Reliance Communications (down 4.9%) declined.
Bharti Airtel dropped 2.91%. The company after market hours on Thursday, 20 February 2014, said it is not satisfied with the judgment of the Court of Appeal, Lagos delivered on 14 February 2014 and will lodge an appeal against that decision at the Supreme Court of Nigeria. Bharti Airtel said that the judgment has no impact on the equity holding of Bharti Airtel or of the other shareholders in Airtel Networks, Nigeria (Airtel Nigeria). Bharti Airtel owns 79.06% stake in Airtel Nigeria.
Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the Judgment of the Court of Appeal in Kaduna in the matter relating to Econet's claim for 5% shares in Airtel Nigeria. These shares in any case are held in an escrow account and do not affect Bharti Airtel's 79.06% stake in Airtel Nigeria, Bharti Airtel said in a statement.
Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits, Bharti Airtel said. Bharti Airtel wishes to assure its customers, employees and business partners that these judgments will in no way affect operations of Airtel Nigeria, the company said. "As regards the quantum of the claim as mentioned in some media reports, we would like to unequivocally state that neither of these orders of the Court of Appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined," Bharti Airtel said in a statement on Thursday.
Shoppers Stop rose 0.86% to Rs 380.85 after a bulk deal of 4.48 lakh shares was executed on the counter at Rs 377.60 per share in opening trade on BSE today, 21 February 2014. The bulk deal constitutes 0.53% of Shoppers Stop's equity.
Sandur Manganese & Iron Ores rose 3.82% after the Supreme Court permitted the company to continue its mining operations. The company made the announcement during trading hours today, 21 February 2014.
Sandur Manganese & Iron Ores during trading hours today, 21 February 2014 said that considering the company's plea, the Hon'ble Supreme Court was pleased to stay the directions contained in the Ministry of Environment & Forests (MoEF)'s communication dated 29 January 2014 resulting in permitting the company to continue mining operations. Thereafter, having coordinated with all the concerned government departments, the company is resuming its mining operations from today, 21 February 2014, Sandur Manganese & Iron Ores said in a statement.
It may be recalled that Sandur Manganese & Iron Ores had informed on 1 February 2014 about suspension of mining operations of the company consequent to Forest Conservation Division of Ministry of Environment & Forests (MoEF), Government of India by clarification dated 29 January 2014 opined that the Forest Clearance granted by it to the company should be considered as co-terminus with the period of Lease under Mines and Minerals (Development & Regulation) Act, 1957 since it does not recognize the provisions under Mineral Concession Rules, 1960.
Gujarat State Petronet rose 4.94% after the company said that Appellate Tribunal for Electricity has granted an interim stay on the Petroleum and Natural Gas Regulatory Board's order. The company made the announcement after market hours on Thursday, 20 February 2014.
Petroleum and Natural Gas Regulatory Board (PNGRB) had vide its order dated 11 September 2012 fixed the provisional initial unit natural gas pipeline tariff for the company's 2239 kilometres high pressure gas grid network having retrospective effect from 20 November 2008 (i.e. the date of notification of tariff regulations). The provisional initial unit natural gas pipeline tariff on levelized basis determined by PNGRB for Gujarat State Petronet's (GSPL) high pressure gas grid network was Rs 23.99 per million metric british thermal units (MMBTU) on gross calorific value (GCV) basis with effect from 20 November 2008.
The said tariff order of PNGRB was challenged vide Appeal No. 222 of 2012 & Appeal No. 251 of 2012 before the Appellate Tribunal for Electricity (APTEL) on the grounds that the date of applicability of the tariff order should be from the date of authorization of GSPL's pipeline (i.e. 27 July 2012) and not from the date of notification of the Tariff Regulations (i.e. 20 November 2008).
Based on the order of appellate tribunal for electricity dated 6 January 2014 staying the restrospective effect mentioned in the tariff order dated 11 September 2012 by PNGRB and ruling that the same shall be effective from the date of its authorization i.e. 27 July 2012, PNGRB vide its order dated 19 February 2014 has fixed the applicability of tariff order from the date of authorization of GSPL's pipeline (i.e. 27 July 2012) and not from the date of notification of tariff regulations (i.e 20 November 2008).
Hence, the re-computed levelized tariff for the economic life of the GSPL's pipeline (i.e 27 July 2012 to 11 March 2026) mentioned by PNGRB in its aforementioned order dated 19 February 2014 is Rs 26.58 per MMBTU (on GCV basis) instead of Rs 23.99 per MMBTU as computed in the original tariff order.
This tariff determination is provisional. GSPL is required to submit the zonal apportionment within next 10 days. PNGRB proposes to file an appeal before the Supreme Court against the aforesaid APTEL order.
Shree Renuka Sugars (SRS) fell 6.22% to Rs 21.10 on equity dilution worries after the company after trading hours on Thursday, 20 February 2014, said it has entered into an agreement with Wilmar International (Wilmar), through its 100% subsidiary Wilmar Sugar Holdings (WSH), to facilitate the investment of approximately $200 million in primary capital into SRS. The company said that this investment into the company would be done in two steps. The first step would involve an investment of upto Rs 517 crore by WSH in SRS through a preferential allotment of upto 25.75 crore shares of fresh equity to WSH at a price of Rs 20.08 per share. After this preferential issue, the existing promoters and WSH would hold 27.5% each of SRS' expanded equity share capital.
As per Sebi guidelines, there will also be an open offer by WSH and the existing promoters for up to 26% of the expanded equity share capital of the SRS at a price of Rs 21.89 per share. The second step would involve Wilmar and the existing promoters of SRS jointly participating in a rights issue to raise upto Rs 725.40 crore of primary equity capital for SRS, the company said in a statement.
Under a joint venture (JV) agreement signed between the existing promoters, WSH and the company, SRS would be jointly controlled by the existing promoters and Wilmar, with both parties holding equal shareholding and board representation in SRS. The existing promoters will continue with the management of the company with Wilmar being actively involved in strategic decisions. The investment is subject to approval of shareholders of SRS, anti-trust clearances in India and Brazil and such other statutory clearances as may be deemed necessary, SRS said in a statement.
SRS said that the proceeds of this investment/fund-raising would be used to pay down existing debt of SRS in India. As a strategic shareholder, WSH's shareholding in SRS and the capital infusion will strengthen the company's financial and business position and also provide a further platform for growth, it added. Wilmar's global reach and strong presence in key sugar producing countries is complementary to Shree Renuka's business, the company said in a statement.
Narendra Murkumbi, Vice-Chairman and Managing Director of SRS said, "This is a path-breaking move in the sugar business which would create a very strong partnership in some of the key global markets for sugar. Wilmar's leadership position in the edible oil business globally and its strong reach in several countries across the world would be synergistic with our large footprint in India and Brazil, the two largest sugar producers in the world. Wilmar's trading expertise, strong financial strength and history of entrepreneurial growth makes it an ideal partner."
Kuok Khoon Hong, Chairman and CEO of Wilmar said, "We are very pleased to be partnering with Mrs. Vidya Murkumbi and Mr. Narendra Murkumbi. India is a very important market for Wilmar. Besides the benefit for our sugar business, this venture will complement the development of our edible oils and other businesses in India."
Jean-Luc Bohbot, Managing Director of Wilmar Sugar and Group Sugar Head at Wilmar said, "Shree Renuka Sugar, with their two well-located refineries, large storage capacity and competitive milling operations in India, good mills and logistics assets in Brazil, fits perfectly with Wilmar Sugar's existing global footprint and provides us with a unique opportunity to participate in the Indian sugar industry. Their unique expertise will be of great value to our partnership."
Wilmar International, founded in 1991 and headquartered in Singapore, is today Asia's leading agri-business group. Wilmar is ranked amongst the largest listed companies by market capitalisation on the Singapore Exchange and has a market capitalization of about $17 billion and revenues of $44.1 billion, with profit of $1.3 billion in FY 2013. Wilmar's business activities include oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilisers manufacturing and grains processing.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.13, compared with its close of 62.26/27 on Thursday, 20 February 2014.
The Reserve Bank of India will need to continue raising its policy interest rate given the sticky nature of inflation, the International Monetary Fund (IMF) said on Thursday, 20 February 2014. "The ingrained nature of inflation and inflation expectations mean that reducing inflation-even over a protracted horizon-will require significant increases in policy rates, which will weigh on growth. Should high inflation expectations persist and inflation remain sticky, a more front-loaded path of interest rate increases may be needed," the IMF said.
The IMF expects India's consumer price index to remain near double digits well into next year driven by food prices. The IMF has suggested giving more emphasis to consumer prices for making policy decisions. "Headline CPI should provide the principal nominal anchor for monetary policy, as food and fuel price shocks propagate rapidly into core inflation, and inflation expectations and wage formation are closely linked to CPI inflation," the IMF said. The IMF expects India's economy to grow at 4.6% in 2013-14, picking up to 5.4% in 2014-15.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, 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.
On the political front, lawmakers passed a bill to create India's 29th state on Thursday despite mayhem in parliament, as opponents made a futile last attempt to stop the upper house carving landlocked Telangana from coastal Andhra Pradesh. Demands that the southern region be made a separate state have existed almost as long as independent India. Thursday's vote fulfils a promise made by the government in 2009, and comes just weeks before a national election in April.
The new state will have a population of around 3.5 crore people. The bill must now be signed by president to become law, a formality expected to take place in a few days.
European stocks edged higher on Friday, 21 February 2014, after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth. US economy is the world's biggest economy. Key benchmark indices in France, Germany and UK were up 0.06% to 0.2%.
UK retail sales fell more than economists forecast in January, led by a drop in demand at food and clothing stores. Sales including fuel plunged 1.5% from December, when they surged 2.5%, the Office for National Statistics said today in London.
Ukraine's presidential administration today, 21 February 2014, said that a preliminary agreement has been reached to bring an end to the political crisis that has rocked the country following overnight talks between the government, opposition leaders and representatives of the European Union and Russia. "The parties agreed on signing an agreement to resolve the crisis," said a statement on the presidential administration's website.
Global rating agency Standard & Poor's today, 21 February 2014, cut its long-term foreign currency rating on Ukraine by one notch to CCC, saying the country's worsening political situation is putting the government's capability to service its debt at increasing risk. An eruption of violent clashes between anti-government protestors and police have left nearly 70 people dead and more than 560 wounded, and has led S&P "to conclude that a conciliatory end to the political stand-off is now out of reach." The ratings agency's outlook on Ukraine is negative. Expected financial support from Russia "is becoming increasingly uncertain and dependent on the outcome of the deteriorating political situation in Ukraine," said S&P. Should that support "fall short of Russia's commitments, we expect the government of Ukraine to default on its foreign-currency obligations", S&P said.
Asian stocks edged higher on Friday, 21 February 2014, after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth. US economy is the world's biggest economy. Key benchmark indices in Indonesia, Taiwan, Singapore, Japan, Hong Kong and South Korea were up 0.43% to 2.88%. China's Shanghai Composite fell 1.17%.
Minutes from the Bank of Japan's Jan. 22 policy meeting showed some board members said the central bank should provide a clearer explanation that an expected decline in second-quarter domestic growth was factored into its outlook.
Trading in US index futures indicated that the Dow could advance 30 points at the opening bell on Friday 21 February 2014. US stocks edged higher on Thursday, 20 February 2014, as investors found encouragement in a gauge of US manufacturing jumping to its highest level in almost four years, as well as in more M&A activity, this time involving Facebook. Late Wednesday, Facebook announced a $19 billion deal to acquire messaging service WhatsApp.
Markit Economics' preliminary index of US manufacturing increased to 56.7 in February, surpassing economists' estimates, while Labor Department figures indicated fewer applications for unemployment benefits last week. The Conference Board's index of US leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates.
Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5%, according to minutes of their January meeting released on Wednesday, 19 February 2014. Federal Reserve Chair Janet Yellen last week said the economy has strengthened enough to withstand continued cuts to monetary stimulus, adding that only a notable change in the outlook for the economy would prompt the central bank to slow the pace of tapering.
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.
Sweeping reforms are urgently needed to boost productivity and lower barriers to trade if the world is to avoid a new era of slow growth and stubbornly high unemployment, the OECD warned on Friday. In its 2014 study on "Going for Growth", The Organisation for Economic Co-operation and Development said momentum on reforms had slowed in the aftermath of the global financial crisis, with much of it now piecemeal and incremental. "The widespread deceleration in productivity since the crisis could presage the beginning of a new low-growth era," warned Pier Carlo Padoan, deputy secretary-general and chief economist at the Paris-based OECD. "These concerns, already prevalent among advanced OECD countries for some time, now encompass emerging-market economies and are fuelled also by high unemployment and falling labour force participation in many countries."
Group of 20 finance ministers meet in Sydney this weekend, with US stimulus cuts and political turmoil from Ukraine to Venezuela stoking concern over emerging-market volatility.
German Finance Minister Wolfgang Schaeuble said in TV interview broadcast today, 21 February 2014, that emerging markets should get their own houses in order before demanding solidarity from other nations. The troubles in emerging markets would be the main topic discussed by finance ministers and central bank chiefs at the G20 summit in Sydney this weekend, Schaeuble said. "In my opinion we must always strive towards an approach of solidarity. Everyone must first of all do their own homework and then countries can demand solidarity from others," Schaeuble said.
Schaeuble said emerging countries must ensure they carried out structural reforms and did not rely only on monetary policy. "We've had the problem recently in Europe and have always used the tool of monetary policy to gain some time, but this should not be misused to avoid solving the problems," he said.
IT stocks in spotlight after positive US data
IT stocks may gain on positive economic data in US. The Markit Economics preliminary index of US manufacturing increased to 56.7 in February, surpassing economists' estimates, while Labor Department figures indicated fewer applications for unemployment benefits last week. The Conference Board's index of US leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates. US is the biggest outsourcing market for the Indian IT firms.
Bharti Airtel after market hours on Thursday, 20 February 2014, said the company is not satisfied with the judgment of the Court of Appeal, Lagos delivered on 14 February 2014 and will lodge an appeal against that decision at the Supreme Court of Nigeria. Bharti Airtel said that the judgment has no impact on the equity holding of Bharti Airtel or of the other shareholders in Airtel Networks Limited, Nigeria (Airtel Nigeria). Bharti Airtel owns 79.06% stake in Airtel Nigeria.
Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the Judgment of the Court of Appeal in Kaduna in the matter relating to Econet's claim for 5% shares in Airtel Nigeria. These shares in any case are held in an escrow account and do not affect Bharti Airtel's 79.06% stake in Airtel Nigeria, Bharti Airtel said in a statement.
Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits, Bharti Airtel said. Bharti Airtel wishes to assure its customers, employees and business partners that these judgments will in no way affect operations of Airtel Nigeria, the company said. "As regards the quantum of the claim as mentioned in some media reports, we would like to unequivocally state that neither of these orders of the Court of Appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined," Bharti Airtel said in a statement.
TCS after market hours on Thursday, 20 February 2014, announced that it has partnered with the Finnish Wheelchair Curling Team, supporting the team in their quest for Olympic glory at the Paralympic Winter Games in Sochi. TCS will serve as a partner to the team for one year and provide support for the team towards their equipment, logistics and digital devices such as smart phones at Sochi.
Adani Ports and Special Economic Zone (APSEZ) after market hours on Thursday, 20 February 2014, said that the company has received Letter of Award from Ennore Port for the development of a container terminal at Ennore Port on DBFOT basis.
HT Media has completed total buyback of 22.72 lakh equity shares till 20 February 2014 for an aggregate amount of Rs 18.80 crore, being approximately 75.23% of the total buyback offer of Rs 25 crore. Further, the share buyback committee of the board of directors of the company has, at its meeting held on 20 February 2014, decided to close the scheme for buyback of equity shares from open market route through stock exchange with effect from 20 February 2014, HT Media said in a statement.
Multi Commodity Exchange of India (MCX), which is promoted by Financial Technologies (India) (FTIL), reportedly intends to sell its holding in entities like Dubai Gold & Commodities Exchange (DGCX), MCX Stock Exchange (MCX-SX) and MCX-SX Clearing Corporation.
Elder Pharmaceuticals after market hours on Thursday, 20 February 2014 in a clarification to the exchanges with reference to a news item titled “Elder Pharma in revamp mode” that "the company has informed the Exchange on 13 December 2013 about the sale of its formulation business in India and Nepal to Torrent Pharmaceuticals. Post this deal, the company's overall strategy is to focus on its remaining brands inclusive Eldervit and Somazina and position itself further in the growing neutraceuticals segment by launching more products of its own. Also the company is also planning to concentrate and build on its domestic business of anti-infectives, strength its in-licence portfolio and grow its business in UK and Europe. Hence the company has decided to have a strategic planning or realigning the group post the deal for which have decided to appoint Deloitte for advising on the reworking of the company post the transaction with torrent".
Shree Renuka Sugars (SRS) after market hours on Thursday, 20 February 2014 said that it has entered into an agreement with Wilmar International (Wilmar), through its 100% subsidiary Wilmar Sugar Holdings (WSH), to facilitate the investment of approximately $200 million in primary capital into SRS.
SRS said that this investment into the company would be done in two steps. The first step would involve an investment of upto Rs 517 crore by WSH in SRS through a preferential allotment of upto 25.75 crore shares of fresh equity to WSH at a price of Rs 20.08 per share. After this preferential issue, the existing promoters and WSH would hold 27.5% of SRS' expanded equity share capital. As per Sebi guidelines, there will also be an open offer by WSH and the existing promoters for up to 26% of the expanded equity share capital of the SRS at a price of Rs 21.89 per share. The second step would involve Wilmar and the existing promoters of SRS jointly participating in a rights issue to raise upto a further Rs 725.40 crore of primary equity capital for SRS, the company said in a statement.
Under a joint venture (JV) agreement signed between the existing promoters, WSH and the company, SRS would be jointly controlled by the existing promoters and Wilmar, with both parties holding equal shareholding and board representation in SRS. The existing promoters will continue with the management of the company with Wilmar being actively involved in strategic decisions. The investment is subject to approval of shareholders of SRS, anti-trust clearances in India and Brazil and such other statutory clearances as may be deemed necessary, SRS said in a statement.
SRS said that the proceeds of this investment/fund-raising would be used to pay down existing debt of SRS in India. As a strategic shareholder, WSH's shareholding in SRS and the capital infusion will strengthen the company's financial and business position and also provide a further platform for growth, it added. Wilmar's global reach and strong presence in key sugar producing countries is complementary to Shree Renuka's business, the company said in a statement.
Narendra Murkumbi, Vice-Chairman and Managing Director of SRS said, "This is a path-breaking move in the sugar business which would create a very strong partnership in some of the key global markets for sugar. Wilmar's leadership position in the edible oil business globally and its strong reach in several countries across the world would be synergistic with our large footprint in India and Brazil, the two largest sugar producers in the world. Wilmar's trading expertise, strong financial strength and history of entrepreneurial growth makes it an ideal partner."
Kuok Khoon Hong, Chairman and CEO of Wilmar said, "We are very pleased to be partnering with Mrs. Vidya Murkumbi and Mr. Narendra Murkumbi. India is a very important market for Wilmar. Besides the benefit for our sugar business, this venture will complement the development of our edible oils and other businesses in India."
Jean-Luc Bohbot, Managing Director of Wilmar Sugar and Group Sugar Head at Wilmar said, "Shree Renuka Sugar, with their two well-located refineries, large storage capacity and competitive milling operations in India, good mills and logistics assets in Brazil, fits perfectly with Wilmar Sugar's existing global footprint and provides us with a unique opportunity to participate in the Indian sugar industry. Their unique expertise will be of great value to our partnership."
Wilmar International, founded in 1991 and headquartered in Singapore, is today Asia's leading agribusiness group. Wilmar is ranked amongst the largest listed companies by market capitalisation on the Singapore Exchange and has a market capitalization of about $17 billion and revenues of $44.1 billion, with profit of $1.3 billion in FY 2013. Wilmar's business activities include oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilisers manufacturing and grains processing.
Shree Renuka Sugars (SRS) is a global sugar producer/refiner with a strategic portfolio of sugar assets across India, including port-based refining assets, sugar mills in productive cane growing regions and diversified revenue streams from ethanol and electricity co-generation. Additionally in Brazil, SRS has well located and best-in-class sugar, ethanol, cogeneration, port and logistics assets. The company operates eleven mills globally with a total crushing capacity of 20.7 million tonnes per annum and two port-based sugar refineries with sugar production capacity of 1.7 million tons per year. Shree Renuka Sugars has high level of integration in its mills with total cogeneration capacity of 584 MW and ethanol production capacity of 4,160 kilolitres per day.
Orient Abrasives after market hours on Thursday, 20 February 2014 said that Mr. P. P. Khanna, Director of the company and his wife Mrs. Prabha Khanna have intimated to the company that on 20 February 2014, they have sold 8.24 lakh equity shares (aggregating 0.69%) held by them in the company at a price of Rs 25 per equity share to Mr. Arvind Shah.
Kesar Terminals turns ex-dividend today, 21 February 2014, for interim dividend of Rs 1.50 per share for the year ending 31 March 2014.
P I Industries turns ex-dividend today, 21 February 2014, for interim dividend of 50 paise per share for the year ending 31 March 2014.
Market may open higher 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 12 points at the opening bell. Asian stocks rose on Friday after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth.
IT stocks may gain on positive economic data in US. US is the biggest outsourcing market for the Indian IT firms.
Bharti Airtel after market hours on Thursday, 20 February 2014 said the company is not satisfied with the judgment of the Court of Appeal, Lagos delivered on 14 February 2014 and will lodge an appeal against that decision at the Supreme Court of Nigeria. Bharti Airtel said that the judgment has no impact on the equity holding of Bharti Airtel or of the other shareholders in Airtel Networks Limited, Nigeria (Airtel Nigeria). Bharti Airtel owns 79.06% stake in Airtel Nigeria.
Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the Judgment of the Court of Appeal in Kaduna in the matter relating to Econet's claim for 5% shares in Airtel Nigeria. These shares in any case are held in an escrow account and do not affect Bharti Airtel's 79.06% stake in Airtel Nigeria, Bharti Airtel said in a statement.
Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits, Bharti Airtel said. Bharti Airtel wishes to assure its customers, employees and business partners that these judgments will in no way affect operations of Airtel Nigeria, the company said. "As regards the quantum of the claim as mentioned in some media reports, we would like to unequivocally state that neither of these orders of the Court of Appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined," Bharti Airtel said in a statement.
TCS after market hours on Thursday, 20 February 2014, announced that it has partnered with the Finnish Wheelchair Curling Team, supporting the team in their quest for Olympic glory at the Paralympic Winter Games in Sochi. TCS will serve as a partner to the team for one year and provide support for the team towards their equipment, logistics and digital devices such as smart phones at Sochi.
Adani Ports and Special Economic Zone (APSEZ) after market hours on Thursday, 20 February 2014 said that the company has received Letter of Award from Ennore Port for the development of a container terminal at Ennore Port on DBFOT basis.
Shree Renuka Sugars (SRS) after market hours on Thursday, 20 February 2014 said that it has entered into an agreement with Wilmar International (Wilmar), through its 100% subsidiary Wilmar Sugar Holdings (WSH), to facilitate the investment of approximately $200 million in primary capital into SRS.
SRS said that this investment into the company would be done in two steps. The first step would involve an investment of upto Rs 517 crore by WSH in SRS through a preferential allotment of upto 25.75 crore shares of fresh equity to WSH at a price of Rs 20.08 per share. After this preferential issue, the existing promoters and WSH would hold 27.5% of SRS' expanded equity share capital. As per Sebi guidelines, there will also be an open offer by WSH and the existing promoters for up to 26% of the expanded equity share capital of the SRS at a price of Rs 21.89 per share. The second step would involve Wilmar and the existing promoters of SRS jointly participating in a rights issue to raise upto a further Rs 725.40 crore of primary equity capital for SRS, the company said in a statement.
Under a joint venture (JV) agreement signed between the existing promoters, WSH and the company, SRS would be jointly controlled by the existing promoters and Wilmar, with both parties holding equal shareholding and board representation in SRS. The existing promoters will continue with the management of the company with Wilmar being actively involved in strategic decisions. The investment is subject to approval of shareholders of SRS, anti-trust clearances in India and Brazil and such other statutory clearances as may be deemed necessary, SRS said in a statement.
SRS said that the proceeds of this investment/fund-raising would be used to pay down existing debt of SRS in India. As a strategic shareholder, WSH's shareholding in SRS and the capital infusion will strengthen the company's financial and business position and also provide a further platform for growth, it added. Wilmar's global reach and strong presence in key sugar producing countries is complementary to Shree Renuka's business, the company said in a statement.
Narendra Murkumbi, Vice-Chairman and Managing Director of SRS said, "This is a path-breaking move in the sugar business which would create a very strong partnership in some of the key global markets for sugar. Wilmar's leadership position in the edible oil business globally and its strong reach in several countries across the world would be synergistic with our large footprint in India and Brazil, the two largest sugar producers in the world. Wilmar's trading expertise, strong financial strength and history of entrepreneurial growth makes it an ideal partner."
Kuok Khoon Hong, Chairman and CEO of Wilmar said, "We are very pleased to be partnering with Mrs. Vidya Murkumbi and Mr. Narendra Murkumbi. India is a very important market for Wilmar. Besides the benefit for our sugar business, this venture will complement the development of our edible oils and other businesses in India."
Jean-Luc Bohbot, Managing Director of Wilmar Sugar and Group Sugar Head at Wilmar said, "Shree Renuka Sugar, with their two well-located refineries, large storage capacity and competitive milling operations in India, good mills and logistics assets in Brazil, fits perfectly with Wilmar Sugar's existing global footprint and provides us with a unique opportunity to participate in the Indian sugar industry. Their unique expertise will be of great value to our partnership."
Wilmar International, founded in 1991 and headquartered in Singapore, is today Asia's leading agribusiness group. Wilmar is ranked amongst the largest listed companies by market capitalisation on the Singapore Exchange and has a market capitalization of about $17 billion and revenues of $44.1 billion, with profit of $1.3 billion in FY 2013. Wilmar's business activities include oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilisers manufacturing and grains processing.
Shree Renuka Sugars (SRS) is a global sugar producer/refiner with a strategic portfolio of sugar assets across India, including port-based refining assets, sugar mills in productive cane growing regions and diversified revenue streams from ethanol and electricity co-generation. Additionally in Brazil, SRS has well located and best-in-class sugar, ethanol, cogeneration, port and logistics assets. The company operates eleven mills globally with a total crushing capacity of 20.7 million tonnes per annum and two port-based sugar refineries with sugar production capacity of 1.7 million tons per year. Shree Renuka Sugars has high level of integration in its mills with total cogeneration capacity of 584 MW and ethanol production capacity of 4,160 kilolitres per day.
Elder Pharmaceuticals after market hours on Thursday, 20 February 2014 in a clarification to the exchanges with reference to a news item titled "Elder Pharma in revamp mode" that "the company has informed the Exchange on 13 December 2013 about the sale of its formulation business in India and Nepal to Torrent Pharmaceuticals. Post this deal, the company's overall strategy is to focus on its remaining brands inclusive Eldervit and Somazina and position itself further in the growing neutraceuticals segment by launching more products of its own. Also the company is also planning to concentrate and build on its domestic business of anti-infectives, strength its in-licence portfolio and grow its business in UK and Europe. Hence the company has decided to have a strategic planning or realigning the group post the deal for which have decided to appoint Deloitte for advising on the reworking of the company post the transaction with torrent".
Orient Abrasives after market hours on Thursday, 20 February 2014 said that Mr. P. P. Khanna, Director of the company and his wife Mrs. Prabha Khanna have intimated to the company that on 20 February 2014, they have sold 8.24 lakh equity shares (aggregating 0.69%) held by them in the company at a price of Rs 25 per equity share to Mr. Arvind Shah.
Kesar Terminals turns ex-dividend today, 21 February 2014, for interim dividend of Rs 1.50 per share for the year ending 31 March 2014.
P I Industries turns ex-dividend today, 21 February 2014, for interim dividend of 50 paise per share for the year ending 31 March 2014.
On political front, lawmakers passed a bill to create India's 29th state on Thursday despite mayhem in parliament, as opponents made a futile last attempt to stop the upper house carving landlocked Telangana from coastal Andhra Pradesh. Demands that the southern region be made a separate state have existed almost as long as independent India. Thursday's vote fulfils a promise made by the government in 2009, and comes just weeks before a national election in April.
The vote passed with the support of the two main parties, who are usually bitterly opposed but are both seeking to build support in the south ahead of the election. The new state will have a population of around 3.5 crore people. The bill must now be signed by president to become law, a formality expected to take place in a few days.
The Reserve Bank of India will need to continue raising its policy interest rate given the sticky nature of inflation, the International Monetary Fund said on Thursday. "The ingrained nature of inflation and inflation expectations mean that reducing inflation-even over a protracted horizon-will require significant increases in policy rates, which will weigh on growth," the IMF said in a report.
"Should high inflation expectations persist and inflation remain sticky, a more front-loaded path of interest rate increases may be needed," the IMF said.
RBI Governor Raghuram Rajan, a former IMF chief economist, has raised the key repo rate by 75 basis points to 8% since becoming head of India's central bank in September. He has made consumer prices its key inflation barometer, a shift away from using wholesale price inflation.
The IMF expects India's consumer price index to remain near double digits well into next year driven by food prices. It endorsed giving more emphasis to consumer prices for making policy decisions. "Headline CPI should provide the principal nominal anchor for monetary policy, as food and fuel price shocks propagate rapidly into core inflation, and inflation expectations and wage formation are closely linked to CPI inflation," the IMF said.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, 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 edged lower on Thursday, 20 February 2014 on concern foreign capital inflow will slow after a Federal Reserve report on Wednesday, 19 February 2014, showed support for a plan to reduce monetary stimulus for the US economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets over the past few years. Data showing weakness in China's manufacturing sector this month also hit sentiment on the domestic bourses adversely as stocks fell across Asia and Europe. The S&P BSE Sensex lost 186.33 points or 0.9% to settle at 20,536.64 on that day, its lowest closing level since 17 February 2014.
Foreign institutional investors (FIIs) bought shares worth a net Rs 206.46 crore on Thursday, 20 February 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Friday after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth. Key benchmark indices in Indonesia, Taiwan, Singapore, Japan, Hong Kong and South Korea were up by 0.55% to 2.02%. China's Shanghai Composite fell 0.56%.
Minutes from the Bank of Japan's Jan. 22 policy meeting showed some board members said the central bank should provide a clearer explanation that an expected decline in second-quarter domestic growth was factored into its outlook.
US stocks rose on Thursday on data showing that US factory activity accelerated in February at its fastest pace in nearly four years.
The Markit Economics preliminary index of US manufacturing increased to 56.7 in February, surpassing economists' estimates, while Labor Department figures indicated fewer applications for unemployment benefits last week. The Conference Board's index of US leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates.
Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5%, according to minutes of their January meeting released on Wednesday, 19 February 2014. Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
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.
Sweeping reforms are urgently needed to boost productivity and lower barriers to trade if the world is to avoid a new era of slow growth and stubbornly high unemployment, the OECD warned on Friday.
In its 2014 study on "Going for Growth", The Organisation for Economic Co-operation and Development said momentum on reforms had slowed in the aftermath of the global financial crisis, with much of it now piecemeal and incremental.
"The widespread deceleration in productivity since the crisis could presage the beginning of a new low-growth era," warned Pier Carlo Padoan, deputy secretary-general and chief economist at the Paris-based OECD. "These concerns, already prevalent among advanced OECD countries for some time, now encompass emerging-market economies and are fuelled also by high unemployment and falling labour force participation in many countries."
Daily News Roundup - Feb 21 2014
Cipla and MSD announced an India specific strategic partnership under which the former will have a non-exclusive license to market, promote and distribute MSD's 'raltegravir' 400 mg tablet, an HIV drug, under a different brand name, in the country. (BS)
MCX has decided to exit from the stock exchange venture and an overseas exchange Dubai Gold and Commodities Exchange. (BS)
Diageo has selected Tata Consultancy Services as its new global IT provider. (BS)
Jindal Steel and Power Ltd announced the launch of its new retail brand Jindal Panther TMT rebars, signifying the company’s foray into the retail product segment. (ET)
ABB has won orders worth around Rs3.10bn from Power Grid Corporation of India Ltd to supply power transformers and shunt reactors. (ET)
The Inter-Ministerial Group, which is meeting next week, will not immediately take a call on de-allocation of 10 mines but will give one last chance to companies such as JSPL, Tata Steel and JSW Steel, which are yet to obtain forest clearances to seek green nod within a given time frame. (BL)
Shree Renuka Sugars will sell 257.5mn fresh equity shares to Singapore-based agri-business firm Wilmar International for Rs5.17bn in order to reduce the company's debt. Renuka Sugars said it has entered into an agreement with Wilmar International through its subsidiary Wilmar Sugar Holdings, to facilitate the "investment of about USD200mn" in the primary capital of the company. (ET)
Power Finance Corp and Rural Electrification Corp have disbursed transitional loans worth Rs337bn to state-owned power distribution companies. (BS)
Bharti Airtel will move the Supreme Court of Nigeria against a judgement, dated 14 February, of the Court of Appeal, Lagos that ruled in favour of Econet Wireless of Nigeria. (BS)
Corporation Bank is heading for aggressive expansion in Gujarat by adding 100 branches during the next financial year. (BL)
Economy Snippets
India's GDP growth rate is likely to slightly improve in 2014-15 and clock 5-5.5% expansion on expectations of a normal monsoon and an improvement in manufacturing sector, rating agency Icra said. (BS)
Directorate General of Civil Aviation has revised airline licencing norms which will restrict foreign carriers from taking control of management of domestic airlines. (BS)
Noting that India's growth has slowed markedly and inflation remains stubbornly high, the International Monetary Fund has suggested broader structural reforms to revive growth and raising the long-term growth potential. (BS)
Flat start, Looking for survival!
Everybody has difficult years, but a lot of times the difficult years end up being the greatest years of your whole entire life, if you survive them. - Brittany Murphy
Telangana is all set to become the 29th state of India. Despite loud protests from within the ruling party and of course members of parties like Trinamool Congress and Shiv Sena, Parliament gave its nod for carving out Telangana from Andhra Pradesh.
The market may have weakened on Thursday after weak China data and some weakness in select counters.
After a difficult day on Thursday, markets are expected to start on a flat to positive note. Global markets are in the green as well. US Stocks rose after a reading on manufacturing activity hit its highest in nearly four years. The Dow Jones industrial average rose 92.67 points or 0.58%, to end at 16,133.23, while S&P 500 gained 11.03 points or 0.6%, to finish at 1,839.78. The Nasdaq Composite added 29.591 points or 0.7%, to close at 4,267.545.
Asian share markets got an early boost on Friday, though underlying concerns about China's economic growth kept investors from rushing to buy riskier assets. Japan's Nikkei share average led the way, soaring 2.1% and Australian shares tacked on 0.6% to edge near a five-year peak hit in October.
The Finance Minister P Chidambaram will lead a high level Indian delegation to attend the two day G-20 Finance Ministers’ and Central Bank Governors’ Meeting scheduled to be held in Sydney, Australia. The delegation includes Dr. Raghuram G. Rajan, Governor of Reserve Bank of India (RBI), Dr. Arvind Mayaram, Secretary, Department of Economic Affairs and other senior officials of Ministry of Finance among others, says a report.
Meanwhile, IIFL’s fifth global investor’s conference, Enterprising India – V enters its third and final day today. Thursday saw a host of companies presenting including Mr. Paresh Sukthankar, Deputy Managing Director, HDFC Bank, VC Sehgal, Group Chairman, Motherson Sumi and Balram Yadav, Managing Director, Godrej Agrovet. Bajaj Finserv, ICRA and Biocon were among the others who presented at the conference on the second day, which saw over 80 companies participating in the event. Ashish Dhawan, Founder & CEO, Central Square Foundation (CSF) spoke on ‘Social Entrepreneurship: The path to drive societal change’.
ICRA said that it expects GDP growth to improve somewhat to 5.0-5.5% in 2014-15, factoring in a normal monsoon, a mild improvement in manufacturing growth and a pickup in investment activity in H2FY15 says ICRA in its latest update on Economic Outlook and Macro trends.
Shree Renuka Sugars Limited announced that it has entered into an agreement with Wilmar International Limited ("Wilmar"), through its 100% subsidiary Wilmar Sugar Holdings ("WSH"), to facilitate the investment of approximately US $200 million in primary capital into SRS.
Report stated that Axis Mutual Fund is planning to acquire the assets of ING Investment Management.Axis had offered to buy ING Investment Management’s schemes for Rs 20-30 crore, says report.
Infosys Executive Chairman N R Narayana Murthy has reportedly said that the non-performance will not be tolerated.
"Performance is absolutely essential for us. We will provide all the help to people to perform better and, if for any reason they are not able to perform, well, then, we will have to bid good-bye to them," Murthy said.
Facebook Inc is planning to buy fast-growing mobile-messaging startup WhatsApp for $19 billion in cash and stock in a landmark deal.Report said that the transaction involves $4 bn in cash, $12 bn in stock and $3 billion in restricted stock that vests over several years.
The U.S. government said the consumer price index, the benchmark for inflation, rose 0.1% in January, which was slightly below what economists had predicted. A measure of manufacturing activity in the Philadelphia area fell sharply. On the bright side, initial claims for unemployment benefits fell last week, says a report. Wal-Mart reported quarterly results that topped expectations, but investors sold off after it warned that economic factors would weigh on sales this year.
Results watch: Anik Inds, SKF India and Vardhman Ind.
Trends in FII flows: The FIIs were net buyers of Rs2.06bn in the cash segment on Thursday, while the domestic institutional investors (DIIs) were net sellers of Rs6bn, as per the provisional figures released by the NSE. The foreign funds were net buyers of Rs16.51bn in the cash segment on Wednesday, according to SEBI data.
In other news in the media
Cipla and MSD announced an India specific strategic partnership under which the former will have a non-exclusive license to market, promote and distribute MSD's 'raltegravir' 400 mg tablet, an HIV drug, under a different brand name, in the country. (BS)
MCX has decided to exit from the stock exchange venture and an overseas exchange Dubai Gold and Commodities Exchange. (BS)
Diageo has selected Tata Consultancy Services as its new global IT provider. (BS)
Jindal Steel and Power Ltd announced the launch of its new retail brand Jindal Panther TMT rebars, signifying the company’s foray into the retail product segment. (ET)
ABB has won orders worth around Rs3.10bn from Power Grid Corporation of India Ltd to supply power transformers and shunt reactors. (ET)
The Inter-Ministerial Group, which is meeting next week, will not immediately take a call on de-allocation of 10 mines but will give one last chance to companies such as JSPL, Tata Steel and JSW Steel, which are yet to obtain forest clearances to seek green nod within a given time frame. (BL)
Shree Renuka Sugars will sell 257.5mn fresh equity shares to Singapore-based agri-business firm Wilmar International for Rs5.17bn in order to reduce the company's debt. Renuka Sugars said it has entered into an agreement with Wilmar International through its subsidiary Wilmar Sugar Holdings, to facilitate the "investment of about USD200mn" in the primary capital of the company. (ET)
Power Finance Corp and Rural Electrification Corp have disbursed transitional loans worth Rs337bn to state-owned power distribution companies. (BS)
Bharti Airtel will move the Supreme Court of Nigeria against a judgement, dated 14 February, of the Court of Appeal, Lagos that ruled in favour of Econet Wireless of Nigeria. (BS)
Corporation Bank is heading for aggressive expansion in Gujarat by adding 100 branches during the next financial year. (BL)
India's GDP growth rate is likely to slightly improve in 2014-15 and clock 5-5.5% expansion on expectations of a normal monsoon and an improvement in manufacturing sector, rating agency Icra said. (BS)
Directorate General of Civil Aviation has revised airline licencing norms which will restrict foreign carriers from taking control of management of domestic airlines. (BS)
Noting that India's growth has slowed markedly and inflation remains stubbornly high, the International Monetary Fund has suggested broader structural reforms to revive growth and raising the long-term growth potential. (BS)
Bharti Airtel loses case against Nigerian
Bharti Airtel has lost a case against Econet wireless international against its Nigerian subsidiary over the ownership issue. (Airtel has 79% stake in erstwhile Zain Nigeira).
The appeal court has declared Econet wireless as a bonafide shareholder of the Nigerian unit, and states that it holds 5% stake in the Nigerian unit and continues with its minority shareholding status, which Bharti had opposed. The legal tussle is long standing before Bharti Airtel acquired Zain.
Sharekhan view: This development is sentimentally negative for Bharti Airtel, as now Econet’s participation as a minority shareholder is required in Nigeria and Nigeria contributes around 30% of the African revenue, further as per the media reports certain fines are also imposed on Bharti Airtel. Bharti Airtel has the option to take the matter in the Supreme Court.
Bharti Airtel closed at Rs296.85, down by 1.98%, with a volume of 2.71 lakh shares on the BSE.
US stocks finish day with solid gains following a choppy start
Economic data from Wall Street and overseas dictate the momentum
U.S. stocks finished with solid gains on Thursday, 20 February 2014 after a choppy start to the session, shaking off losses that came amid downbeat reports from the Philadelphia Federal Reserve, China and Europe. Prior to the open, the market appeared to be headed for a lower start as disappointing data from China, Japan, and the eurozone weighed on index futures. Despite the weak data from overseas, equity futures were able to find support when a better-than-expected Markit Manufacturing PMI for the U.S. was released.
The Dow Jones Industrial Average rose 92.67 points, or 0.6%, to close at 16,133.23, after showing an intraday gain of more than 100 points. The Nasdaq Composite advanced 29.59 points, or 0.7%, to finish at 4,267.55. The S&P 500 index tacked on 11.03 points, or 0.6%, to end at 1,839.78, with the telecom sector performing best among S&P sectors.
Verizon Communications fared best among the Dow components, jumping 3.4% after some analysts said now is a good time to buy Verizon shares.
Traders found encouragement in a gauge of U.S. manufacturing jumping to its highest level in almost four years, as well as in more M&A activity, this time involving Facebook.
There was a heavy slate of U.S. economic data released Thursday, including the weekly jobless claims report, real earnings, the consumer price index, leading economic indicators, the flash manufacturing PMI, the Philadelphia Fed business outlook survey, and the weekly DOE energy stocks report. The data was a mixed bag for the commodity markets—showing both stronger-than-expected readings and weaker-than-expected readings—and all-in-all the markets were little impacted.
There was a downbeat manufacturing purchasing managers' index coming out of China Thursday, which was also a negative for the raw commodity sector. The Markit preliminary manufacturing PMI came in at a seven-month low of 48.3 in February from 49.5 in January. A reading below 50.0 suggests contraction in the sector. This report adds to recent concerns about a slowing Chinese economy—the second-largest in the world and the world's largest raw commodity consumer. Meantime, the European Union manufacturing and services PMI came in at 52.7 in February versus 52.9 in January.
Traders and investors are still buzzing about Wednesday afternoon's FOMC minutes, in which the Federal Reserve's voting members held the line on wanting to keep the Fed's “tapering” process in place—despite some recent weaker-than-expected U.S. economic data. The FOMC minutes were deemed just a bit more hawkish than expected.
Regarding the data at Wall Street, the weekly initial claims level fell to 336,000 from an unrevised 339,000 while the consensus expected the reading to fall to 335,000. The Conference Board's Index of Leading Indicators increased 0.3% in January after a downward revision to unchanged (from +0.1%) in December. The consensus expected the index to increase 0.4%. The increase in the index was largely the result of the initial claims level returning to normal levels following unusual seasonal biases in the data.
Separately, manufacturing activity in the Philadelphia region contracted for the first time since May 2013. The Philadelphia Fed's Business Outlook Survey for February dropped to -6.3 from 9.4 while the consensus expected the Index to decline to 7.4. Manufacturers commented to the Philly Fed that severe winter storms affected the region and reduced business activity.
Also, consumer prices increased 0.1% in January, down from a 0.2% increase in December. The consensus expected the CPI to increase 0.2%. Inflation growth remains tame, and there was nothing in the data that suggests any type of breakout. Food prices rose 0.1% after being unchanged in December. Excluding food and energy, core CPI increased an in-line 0.1% for a second consecutive month.
Among individual stocks, Facebook closed up 2.3%, erasing early losses. Late Wednesday, the company stunned Wall Street with a deal to buy messaging service WhatsApp. There was some speculation that perhaps the social-media giant paid too much.
Wal-Mart shares finished 1.8% lower after the Dow component delivered a weaker-than-expected forecast for its recently started fiscal year and current quarter.
Bullion metals ended lower on Thursday, 20 February 2014. Gold futures close lower for a second session on Thursday, undercut by strength in the U.S. dollar as well as Chinese data showing a slowdown in manufacturing activity. More mild profit taking from the shorter-term traders also weighed on prices.
April gold futures fell $3.50, or 0.3%, to settle at $1,316.90 an ounce on the Comex division of the New York Mercantile Exchange. March silver closed down nearly 17 cents, or 0.8%, to $21.68 an ounce a day after ending an 11 session winning streak.
Crude prices ended lower at Nymex, 20 February 2014. Oil futures saw pressure from data showing a slowdown in Chinese manufacturing, but a smaller-than-expected weekly climb in U.S. crude inventories offered support.
March crude-oil futures fell 39 cents, or 0.4%, at settle at $102.92 a barrel after spending some time below $103. Prices hit a four-month high on Wednesday. The March contract expired at the close of the close of Nymex trading session. April crude, which became the front-month contract, ended at $102.75, down 9 cents, or 0.1%.
In the latest weekly inventory report, the EIA said crude stockpiles rose 1 million barrels for the week ended 14 February 2014. Market was looking for a climb of 1.9 million barrels. Gasoline supplies rose by 300,000 barrels, while distillate stockpiles, which include heating oil, fell by 300,000 barrels. Gasoline stockpiles were expected to fall 1.3 million barrels while distillate supplies were seen down 2 million barrels.
Treasuries ended modestly lower with the benchmark 10-yr yield up one basis point at 2.75%.
Participation was on the light side as 660 million shares changed hands on the floor of the NYSE.
Tomorrow's data will be limited to the Existing Home Sales report for January, which is set to be released at 10:00 ET.
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