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Thursday, October 04, 2012
Monday, October 01, 2012
Daily News Roundup - Oct 1 2012
Maruti Suzuki India is planning to offer low-cost houses to about 5,000 employees as it tries to walk the extra mile to improve relations with its workers. (ET) A government-controlled panel has approved Reliance Industries’ revised field development plan for MA oilfield in the predominately gas-rich KG-D6 block that will help the firm boost gas production. (ET) The engineers of Kingfisher Airlines went on a flash strike in Mumbai, making 80 passengers wait three hours in an aircraft for take-off clearance and forcing the cash-strapped airline to cancel 11 flights. (ET) Bharti Enterprises has started talks with Walmart and is hoping to form 50:50 joint venture to roll out retail outlets in India. (ET)
Sensex spurts on reform hopes...Nifty holds 5700
After a brief pause in the previous trading session, the frontline Indian stock indices once again showed strength as investors resumed their shopping spree. The NSE Nifty ended above the 5700 mark while the BSE Sensex ended above the 18,700 level. However, after hitting the intra-day high of 5735 in early morning trades, the Nifty was seen gradually losing some ground. Still, the Large-Cap index managed to end above the 5700 mark. Auto, Consumer Durables, FMCG, Metals and Power indices were among the major gainers. However, the Realty index was under pressure. The Small-Cap index and the Mid-Cap index continued to be buoyant.
Sedate start; adjusting to weakness
Life at any time can become difficult: life at any time can become easy. It all depends upon how one adjusts oneself to life. – Anonymous. Welcome to a truncated week. The opening is likely to be a sedate after stocks in the US and Europe closed lower on Friday. Asian markets open for trading are in the red. Markets in China, Hong Kong, South Korea and Australia are shut. Chinese markets will remain closed for the entire week while in Hong Kong there won’t be any trading till Thursday. The Indian markets will remain closed on Tuesday on account of the Gandhi Jayanti. Watch out for data on manufacturing PMI and Exports, besides monthly auto volumes today. Also, the Shome panel is due to submit its report on GAAR later in the day. Meanwhile, the Kelkar Committee has come out with its report on Government finances and what needs to be done to contain the spiraling fiscal deficit. There is some good news in the form of a drop in the current account deficit for Q1 FY13.
October trading to begin on a flat note
Indian markets may open on a flat note led by unsupportive global cues. SGX Nifty is also trading 2.50 points higher Events for the day: Monthly auto sales and cement dispatches. Release of import and export data. Headlines for the day: RIL seeks nod for proposal to triple gas prices from 2014. Bharti hopeful of 50:50 JV with Wal-Mart for retail stores. EGoM on spectrum to meet on Oct 3. BHEL, GAIL seek Maharatna status.
Market may open lower on weak Asian stocks
The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 5.50 points at the opening bell. Markit Economics will release the HSBC India Manufacturing PMI for September 2012 on Monday, 1 October 2012. Grid failures in the beginning of August and shrinking export orders saw manufacturing HSBC India Manufacturing falling to a nine-month low 52.8 points in August 2012 from 52.9 in July 2012. The Kelkar Committee (KC) set up by the government to outline a roadmap for fiscal consolidation released its report Friday, 28 September 2012. The KC recommends four pillars under which the government can lower its deficit to 5.2% of GDP in FY13, and further to 4.6% and 3.9% in FY14 and FY15, respectively.
Sunday, September 30, 2012
FIIs invest over Rs 90bn in Indian equities this month
Foreign Institutional Investors (FIIs) have pumped in more than Rs. 90bn (~US$1.67bn) in the country's equity market so far this month. Between Sept. 1 and Sept. 21, FIIs were gross buyers of Rs. 390.37bn, while they sold equities totaling Rs. 298.92bn, translating into a net investment of Rs. 91.45bn, according to SEBI data. FIIs also invested Rs. 9.09bn in the debt market during the period under review. FIIs investment in the country's equity market has reached to Rs. 722.15bn (US$14bn) so far in 2012 while pouring in Rs. 254.27bn into the debt market. The acceleration in FII Inflows into Indian markets has been mainly on account of the slew of reform measures announced by the Government, including permitting up to 51% FDI in multi-brand retail and allowing foreign carriers to buy up to 49% stake in domestic airlines. FII inflows are likely to continue in next 6-8 months if the Government remains on the path of reforms. The BSE Sensex has gained ~1.5% so far this month and closed at 18,752.83 points on Friday. Separately, a report by UK's Barclays Capital says that India may get US$2bn in additional FII inflows per year in the medium term after the Government last week cut the withholding tax on overseas borrowing by local firms. The tax cut would reduce the cost of overseas borrowing by 75-100 bps for companies, assuming current borrowing costs of Libor+500 bps, Barclays Capital says, adding that FII inflows would have a significant impact given India faces a negative balance of payments (BoP) of ~US$15bn. CWC supports govt on reforms; meets to chalk out strategy ahead
Rupee rises to 5-month high on risk appetite
The rupee on Friday rose to nearly a five-month high after the Government retained its FY13 market borrowing programme for the second half of FY13 and ruled out additional borrowings during the rest of the year. The Government on Thursday said that it would borrow Rs. 2 trillion via bonds in the second half of FY13, which begins on October 1. That is in line with the budget estimate. Economists are still skeptical that the Government will be able to meet its fiscal deficit estimate of 5.1% of GDP. Already, the Government's subsidy burden is running higher than budget estimate. Average borrowings via bonds sales will be Rs. 120-130bn per week between October and February. The Government is due to sell Rs. 150bn of bonds this week, taking its borrowings in the first six months of FY13 to Rs. 3.7 trillion. Meanwhile, Fitch Ratings has cut its 2012 growth forecasts for India to 6% from 6.5%. It has expressed concern over the Government's economic and investment policy weighing down business confidence. It sees budget deficit at 8.5% of GDP. Fitch has also cut its forecast for GDP growth in the major advanced economies by 0.2% in 2012 (to 1%) and 0.3% in 2013 (to 1.4%). The global debt ratings agency has revised down its expectations for the eurozone to a 0.5% contraction in 2012 and just 0.3% growth in 2013. Fitch's US GDP forecast remains unchanged at a growth of 2.2%/2.3%. In overseas currency trades, the euro rose for a second day after Spain said it will meet its budget deficit target for this year and cut estimate for next year. The 17-nation currency headed for a second weekly decline versus US dollar. The Australian dollar advanced on speculation that Chinese authorities will add to stimulus measures. The rupee is headed for its strongest quarterly gain since 2009 after FII inflows accelerated in the wake of the Government's decision to unveil a spate of economic reforms to boost GDP growth. FII inflows into Indian equities totaled US$3.5bn this month through Sept. 26, the biggest increase since February. The rupee is up ~5.% this quarter. This is the biggest three-month gain since June 2009 and the best performance in Asia. It touched 52.5675 earlier, the strongest level since April 30, and has gained 5.4% in September. The rupee has rebounded 8.8% from a record low of 57.3275 per dollar touched June 22. Meanwhile, the BSE Sensex is up 7.9% this month, headed for the biggest gain since January. The Sensex has rallied 4.3% since Sept. 13 after Prime Minister Dr. Manmohan Singh ended a freeze on diesel prices and permitted FDI in multi-brand retail and aviation sectors.
Weekly Newsletter - Sep 30 2012
Indian equity indices managed to extend the current winning streak, belying expectations of some softening, as FII inflows continued unabated. The Government too carried forward its reforms agenda by announcing relief package for the debt-ridden power sector. Also, the Centre said it will stick to its borrowing plan for FY13 and ruled out extra debt sales. India’s benchmark 10-year bonds advanced the most in three weeks. The rupee rose versus the US dollar to touch a five-month high, while the stock indices hit 16-month highs. The broader market too joined the party. However, the prospects for economic growth remain far from bright as inflation is sticky, borrowing costs remain high and capex cycle is yet to revive. The global backdrop also remains fragile despite repeated attempts by policymakers to rein in growth slowdown. From next week, short-term focus will be on latest corporate earnings even as markets await further policy action from the governments. Management guidance will be closely followed. One must exercise some caution at higher levels as there is every chance of a small correction after the recent spike.
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