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Monday, March 31, 2014
Crude closes above $101/barrel
Positive economic data boosts prices
Crude oil prices rose further above the $100-a-barrel mark on Thursday, 27 March 2014 at Nymex settling at their highest close in about three weeks, with traders attributing the gains to growing global supply concerns as well as a continued drop in crude inventories at a key U.S. storage hub. A fall in U.S. jobless claims and a rise in the nation's economic growth also buoyed prospects for oil demand. Natural gas, meanwhile, saw prices close their highest level in more than two weeks as U.S. supplies fell more than expected.
Crude oil for May delivery added $1.02, or 1%, to settle at $101.28 a barrel on the New York Mercantile Exchange.
The ICE dollar index, which measures the U.S. currency against a basket of six major rivals, edged higher on Thursday, keeping gains of crude under check.
The Russia-Ukraine tensions have not escalated significantly recently, but the situation remains a concern to the world market place. While the U.S. is leading a worldwide effort to isolate Russia after its annexation of Crimea, reports Thursday said Russian economic growth is set to slow to the weakest rate in years. Meantime, the IMF has agreed to loan Ukraine up to $18 billion to help out that nation's struggling economy, after the Russian incursion.
The markets paid little attention to news late Wednesday that some U.S. and world banks, including Citi, failed a government stress test due to inadequate capital plans. Those banks will have to resubmit new capital plans to the Federal Reserve.
U.S. economic data out Thursday included the weekly jobless claims report, the third-quarter GDP estimate, the Kansas City Fed manufacturing survey, and pending home sales.
In details, Fourth quarter GDP was revised up to 2.6% in the third estimate from 2.4% in the second estimate. That matched the consensus estimate, but was down from a 4.1% gain in Q3 2013. Real final sales increased 2.7% in the fourth quarter. That was up from a 2.5% gain in Q3 2013 and above the previously reported 2.3% gain. It was also the strongest increase in real final sales since increasing 3.4% in Q2 2012. Looking at real final sales over the last four quarters (0.2%, 2.1%, 2.5%, and 2.7%), there is a definite upward moving trend. The year-over-year averages, however, put it below the 2.0% and 2.6% gains from 2011 and 2012.
The initial claims level fell to 311,000 for the week ending 22 March from an upwardly revised 321,000 (from 320,000) for the week ending 15 March. The consensus expected the initial claims level to increase to 330,000. Pending home sales for February fell 0.8%, which was worse than the 0.2% decrease forecast by the consensus. Today's reading followed last month's revised decrease of 0.2% (from +0.1%).
Among other energy products, April gasoline added 3 cents, or 1.2%, to $2.94 a gallon and April heating oil ended at $2.95 a gallon, up almost 3 cents, or 1%.
May natural gas tacked on 14 cents, or 3.3%, to $4.538 per million British thermal units, for the highest close since 11 March, based on the most-active contracts. Prices were trading at around $4.42 before the supply data were released. The EIA reported that supplies of natural gas fell 57 billion cubic feet for the week ended 21 March. Market had forecast a fall of between 50 billion cubic feet and 54 billion cubic feet
Market may extend recent strong gains
The market may extend recent strong gains as most Asian stocks edged higher. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 27.50 points at the opening bell.
L&T clarified before market hours with reference to reports in some sections of the media on the ongoing strike by some of the workers at our Hazira Campus, Gujarat that the strike has no material adverse impact on the operations and performance of the company.
Power Grid Corporation of India (PGCIL)'s board of directors at its meeting held on Thursday, 27 March 2014, approved the investment approval for 'Augmentation of transformers in Northern Region - Part B' at an estimated cost of Rs 155.57 crore, with commissioning schedule of 24 months from the date of investment approval.
NTPC said after market hours on Friday, 28 March 2014 that 10 megawatts (MW) Solar PV Power Station at Talcher is declared on commercial operation from 28 March 2014. The total capacity of non-conventional energy projects of NTPC has become 30 MW. With the commissioning and commercial declaration of above unit, the total commissioned and commercial capacity of NTPC group has become 42974 MW and 41314 MW respectively.
Tech Mahindra clarified after market hours on Friday, 28 March 2014 that media report reading "Tech Mahindra may buy stake in social biz startup", is speculative in nature and not issued by the company.
IFCI after market hours on Friday, 28 March 2014 said that the book building for an issue of Rs 215 crore with green shoe option upto Rs 215 crore was fully subscribed on Thursday, 27 March 2014, with aggregate bids for Rs 310 crore including green shoe option of Rs 95 crore.
Hindustan Zinc after market hours on Friday, 28 March 2014, said that the company has commissioned the first sewage treatment plant (STP) in Udaipur. It is the first sustainable development project of its kind in Rajasthan and has been constructed as per a tripartite agreement between Hindustan Zinc, Udaipur Municipal Corporation and Urban Improvement Trust. The STP will treat 20 million litres of sewage per day. The project has been constructed in a record time of 14 months at a cost of over Rs 70 crore, Hindustan Zinc said.
Olam International Limited (Olam) and Tata Chemicals (TCL) in a joint statement issued after market hours on Friday, 28 March 2014 said they have on 28 March 2014 signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project (GFC) in the Republic of Gabon, Africa. On 11 April 2011, the parties had announced TCL's participation in the project in which Olam currently holds 80% stake with the Government of the Republic of Gabon (ROG) holding the remaining 20%.
This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project. Since TCL's intention to invest in the project was announced in 2011, Olam and TCL have worked together closely to complete the project's Front End Engineering Design (‘FEED') phase. Olam acknowledges the significant contribution of TCL and its dedicated management team in developing the project to its current stage. TCL will maintain its relationship with GFC going forward by providing any technical support that may be requested by Olam or GFC's other equity partners.
"As announced previously, Olam is continuing its discussions with other industry participants who have expressed their desire to partner with us in the project. This is in line with our intention to bring down our final equity stake to below 50%. Our belief in the project's strategic and financial value to the Group still remains intact," said Olam's Executive Director of Finance and Business Development, A. Shekhar.
Mr. PK Ghose, Executive Director and CFO of TCL said: "We will continue to pursue the strategy of bringing world class products and services to the Indian farmers, with continuing investments in innovation and partnerships focused on the home market."
Excel Industries on Friday, 28 March 2014 said that pursuant to shareholders' approval at the Extraordinary General Meeting (EGM) of the company held on 15 March 2014 and in-principle approval for listing of securities under the Listing Agreement, the board of directors of the company at its meeting held on Friday, 28 March 2014 has issued and allotted to Utkarsh Global Holdings, a promoter group company, for consideration in cash, on preferential basis, twenty Lakh convertible warrants of face value of Rs 69 each. The warrants are convertible within 18 months in one or more tranches from the date of allotment, at the option of the holder of warrants, into one equity share of face value of Rs 5 each of the company at a premium of Rs 64 per equity share, Excel Industries said.
Readymade Steel India ‘s board of directors at its meeting held on Friday, 28 March 2014, allotted 6 lakh equity shares of Rs 10 each at Rs 200 per share fully paid to the investor who is non promoter namely BEC Infra on a preferential basis, on conversion of outstanding loan and advances received against the goods into equity shares.
Himachal Futuristic Communications after market hours on Friday, 28 March 2014 said that the company has voluntarily sought the delisting of GDRs from London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing have been cancelled from London Stock Exchange and Luxembourg Stock Exchange with effect from 21 March 2014 and 23 December 2013 respectively consequent upon resignation by the Depository, Bank of New York (BNY Mellon). The Company has not appointed any Successor Depository and has terminated the Deposit Agreement due to lack of liquidity with virtually no trading taking place due to investors' decreasing interest in depositary receipts, Himachal Futuristic Communications said.
Polygenta Technologies on Friday, 28 March 2014 said that 2.20 crore compulsory convertible preference shares (CCPS) held by PerPETual Global Technologies, the promoters were converted into equal number of equity shares on Friday, 28 March 2014.
Lyka Labs said after market hours on Friday, 28 March 2014 that the board of directors of the company at its meeting held on 28 March 2014, has decided to re-appoint Shri. N. I. Gandhi as Managing Director for a period of 5 years from 1 April 2014 subject to approval of shareholders in the General Meeting and other Statutory Approvals.
The board has also decided to invest in 35 lakh shares of Rs 10 each of Lyka Exports at a premium of Rs 25 in lieu of its outstanding subject to approval of the shareholders in the General Meeting. It also decided to transfer Domestic Marketing Division of Ethical products under slump sale to Lyka Healthcare a wholly owned subsidiary company from 1 March 2014.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 tomorrow, 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.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
Key benchmark indices edged higher in choppy trade on Friday, 28 March 2014, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) resorted to heavy buying of Indian stocks on Thursday, 27 March 2014. The S&P BSE Sensex garnered 125.60 points or 0.57% to settle at 22,339.97, a record closing high.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1,362.87 crore on Friday, 28 March 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Monday as consumer shares led advances. Key benchmark indices in Singapore, Japan, Indonesia and Taiwan were up 0.05% to 0.47%. Key benchmark indices in Hong Kong, China and South Korea fell 0.04% to 0.42%.
US stocks climbed after a two-day slide on Friday, as consumer shares rebounded amid data showing household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% after a 0.2% gain in January that was smaller than previously estimated, Commerce Department figures showed.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
GMR Infra in focus after units files for IPO
GMR Infrastructure said that the draft red herring prospectus (DRHP) has been filed on 28 March 2014 by GMR Energy, a subsidiary of the company, with the Securities and Exchange Board of India for its initial public offering (IPO).
NTPC said after market hours on Friday, 28 March 2014 that 10 megawatts (MW) Solar PV Power Station at Talcher is declared on commercial operation from 28 March 2014. The total capacity of non-conventional energy projects of NTPC has become 30 MW. With the commissioning and commercial declaration of above unit, the total commissioned and commercial capacity of NTPC group has become 42974 MW and 41314 MW respectively.
Power Grid Corporation of India (PGCIL)'s board of directors at its meeting held on Thursday, 27 March 2014, approved the investment approval for 'Augmentation of transformers in Northern Region - Part B' at an estimated cost of Rs 155.57 crore, with commissioning schedule of 24 months from the date of investment approval.
L&T clarified that the ongoing strike at its Hazira Campus in Gujarat has no material adverse impact on the operations and performance of the company.
Trent said that the High Court of Judicature at Bombay has approved the scheme of amalgamation and arrangement between Landmark, Fiora Link Road Properties and Trexa ADMC with Trent and their respective shareholders and creditors. The company would now proceed to seek the other regulatory approvals and the Scheme will be effective on getting the last of such approval, the company said.
Tech Mahindra clarified after market hours on Friday, 28 March 2014 that media report reading "Tech Mahindra may buy stake in social biz startup", is speculative in nature and not issued by the company.
Tata Chemicals (TCL) and Olam International (Olam), in a joint statement issued after market hours on Friday, 28 March 2014, said they have on 28 March 2014 signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project (GFC) in the Republic of Gabon, Africa. On 11 April 2011, the parties had announced TCL's participation in the project in which Olam currently holds 80% stake with the Government of the Republic of Gabon (“ROG”) holding the remaining 20%.
This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project. Since TCL's intention to invest in the project was announced in 2011, Olam and TCL have worked together closely to complete the project's Front End Engineering Design (FEED) phase. Olam acknowledges the significant contribution of TCL and its dedicated management team in developing the project to its current stage. TCL will maintain its relationship with GFC going forward by providing any technical support that may be requested by Olam or GFC's other equity partners.
"As announced previously, Olam is continuing its discussions with other industry participants who have expressed their desire to partner with us in the project. This is in line with our intention to bring down our final equity stake to below 50%. Our belief in the project's strategic and financial value to the Group still remains intact," said Olam's Executive Director of Finance and Business Development, A. Shekhar.
Mr. PK Ghose, Executive Director and CFO of TCL said: "We will continue to pursue the strategy of bringing world class products and services to the Indian farmers, with continuing investments in innovation and partnerships focused on the home market."
IFCI after market hours on Friday, 28 March 2014 said that the book building for an issue of Rs 215 crore with green shoe option upto Rs 215 crore was fully subscribed on Thursday, 27 March 2014, with aggregate bids for Rs 310 crore including green shoe option of Rs 95 crore.
Excel Industries on Friday, 28 March 2014 said that pursuant to shareholders' approval at the extraordinary general meeting (EGM) of the company held on 15 March 2014 and in-principle approval for listing of securities under the listing agreement, the board of directors of the company at its meeting held on Friday, 28 March 2014 has issued and allotted to Utkarsh Global Holdings, a promoter group company, for consideration in cash, on preferential basis, twenty Lakh convertible warrants of face value of Rs 69 each. The warrants are convertible within 18 months in one or more tranches from the date of allotment, at the option of the holder of warrants, into one equity share of face value of Rs 5 each of the company at a premium of Rs 64 per equity share, Excel Industries said.
Readymade Steel India's board of directors at its meeting held on Friday, 28 March 2014, allotted 6 lakh equity shares of Rs 10 each at Rs 200 per share fully paid to the investor who is non promoter namely BEC Infra on a preferential basis, on conversion of outstanding loan and advances received against the goods into equity shares.
Himachal Futuristic Communications after market hours on Friday, 28 March 2014 said that the company has voluntarily sought the delisting of GDRs from London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing have been cancelled from London Stock Exchange and Luxembourg Stock Exchange with effect from 21 March 2014 and 23 December 2013 respectively consequent upon resignation by the Depository, Bank of New York (BNY Mellon). The company has not appointed any Successor Depository and has terminated the deposit agreement due to lack of liquidity with virtually no trading taking place due to investors' decreasing interest in depositary receipts, Himachal Futuristic Communications said.
Polygenta Technologies on Friday, 28 March 2014 said that 2.20 crore compulsory convertible preference shares (CCPS) held by PerPETual Global Technologies, the promoters were converted into equal number of equity shares on Friday, 28 March 2014.
Lyka Labs said after market hours on Friday, 28 March 2014 that the board of directors of the company at its meeting held on 28 March 2014, has decided to re-appoint Shri. N. I. Gandhi as managing director for a period of 5 years from 1 April 2014 subject to approval of shareholders in the general meeting and other statutory approvals.
The board has also decided to invest in 35 lakh shares of Rs 10 each of Lyka Exports at a premium of Rs 25 in lieu of its outstanding subject to approval of the shareholders in the General Meeting. It also decided to transfer domestic marketing division of ethical products under slump sale to Lyka Healthcare a wholly owned subsidiary company from 1 March 2014.
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