| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Thinksoft Global | 125 | 4 to 5 |
| Indiabulls Power | 40 to 45 | 1.50 to 2 |
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Tuesday, October 20, 2009
Latest Grey Market Premium - Indiabulls Power
Market may gain on positive Asia; RIL eyed
The market may extend recent strong gains on positive global cues on earnings optimism. The market reopened after a long holiday. A special one hour Muhurat trading was held on Saturday on the bourses to mark the beginning of the new Samvat year as per the Hindu calendar. The market remained closed on Monday, 19 October 2009 on account of Diwali.
Sesa Goa, Tech Mahindra, Apollo Tyres, Gati, Polaris Software, Radico Khaitan, Sterlite Technologies, Subex Azure, JK Paper, Nectar Life, Prakash Industries, TVS Electronics among others will announce their Q2 September 2009 result today.
Index heavyweight Reliance Industries will be in action as the Reliance Industries (RIL) and Reliance Natural Resources (RNRL) gas dispute is scheduled to be taken up by the Supreme Court in an afternoon hearing today. A three-judge bench, headed by Chief Justice K G Balakrishnan and comprising Justices P Sathasivam and RV Raveendran, will hear the case. Raveendran replaces Justice B S Chauhan. This is the first hearing on the case after Anil Ambani offered to make peace with Mukesh Ambani. The younger brother had earlier accused the Ministry of Petroleum and Natural Gas of siding with Mukesh.
RIL had first moved the apex court, challenging the decision of the Bombay High Court delivered on 15 June and which had asked RIL to provide 28 million metric standard cubic metres per day (mmscmd) of gas to RNRL at a price of $2.34 per million British thermal unit (mBtu).The government had also moved a special leave petition in the case, asserting its right on pricing and distribution of natural gas. RNRL argued that the government has no role to play either in the utilisation or the fixation of gas price on its contract with RIL.However, RIL has contended that it was only a contractor for the gas from the KG-D6 block and did not have the power to fix the price.
Meanwhile, the government on Monday approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes. On Monday, Trade Minister Anand Sharma said the federal cabinet approved a 5 % stake sale in NTPC, and 10 % in, an unlisted power producer. On Friday, Prime Minister Manmohan Singh said many state-run firms are eager to list their shares in the stock market as it would help unlock their value.
India's cabinet approved a plan to release the key wholesale inflation number every month rather than on a weekly basis to improve the measurement of price movements. The new wholesale price index with 2004 as the base year will debut on 14 November 2009, Commerce Minister Anand Sharma said. The base year used for the current weekly index is 1993.
Inflation based on the wholesale price index (WPI) rose 0.92% in 12 months to 3 October 2009, slightly above previous week's annual rise of 0.7%, data released by the government on Thursday showed.
Faster industrial output growth and rising inflationary pressures have strengthened case for an end to the RBI's accommodative monetary stance next year. Industrial output grew at its fastest pace in 22 months in August at 10.4 %.
Stock and sector-specific activity may dominate trade in the coming days based on expectations on Q2 September 2009 results. Auto firms are seen reporting strong Q2 results on strong volume growth and on lower input costs. Lower interest rates and pay hike for government employees has boosted auto sales this year after last year's slowdown in demand. Government employees have started receiving the balance 60% of their wage arrears as per the recommendations of the VIth Pay Commission.
Cement firms, too, are seen reporting good Q2 numbers on the back of volume growth, higher realisation and decline in costs like imported coal. Metal firms are seen reporting fall in net profit due to a sharp fall in metal prices on year-on-year basis.
Fall in volumes in the commercial property segment and lower realisations in both commercial and residential property segments, will pull earnings of realty firms lower.
Banks are seen reporting a sedate growth in core lending amid sluggish credit offtake. On the flip side, PSU banks will benefit from treasury gains amid volatility in prices of government securities during the quarter.
Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.
The aggregate net profit of 169 companies announced so far rose 21.1% to Rs 7624 crore on 7.5% rise in sales to Rs 46895 crore in Q2 September 2009 over Q2 September 2008.
Asian stocks rose, today as earnings reports boosted confidence in the global recovery. The key benchmark indices in China, Hong Kong, Japan, South Korea, Siingapore and Taiwan rose by between 0.15% to 1.19%.
US markets rallied to new 2009 highs on earnings optimism on Monday, 19 October 2009. The S&P 500 closed just shy of the 1100 mark. The Dow added 96.28, points or 1%, to 10,092.19. The S&P 500 index rose 10.23 points, or 0.9%, to 1,097.91. The Nasdaq Composite Index rose 19.52 points, or 0.9%, to 2,176.32.
In important earnings from the US, tech major Apple's profit and sales beat analysts' forecasts. The company reported fourth quarter earnings at nearly 2 dollars a share, up from little over a dollar per share in the same period last year. This was above analyst estimates of around 1.4 dollars per share.
Closer home, the key benchmark indices closed the Muhurat trading session held on Saturday to mark the start of new Hindu year on a flat note after an upbeat start. The BSE 30-share Sensex rose 3.19 points or 0.02% to 17,326.01, its highest closing since 16 May 2008 on that day after gaining 0.74% on Friday.
A section of the market is concerned that a glut in share sales may suck liquidity from the secondary market. As per reports, 30 companies have filed their draft red herring prospectuses in September 2009 with market regulator Securities & Exchange Board of India (Sebi) for raising funds through initial public offering.
The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.
As per one report, companies plan to raise over Rs 50,000 crore through initial public offers (IPOs), follow-up public offers, divestment of stake sale in the second half of the current financial year. Reliance Infratel also announced on 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest. Divestment of state-run firms by the government may also increase the supply of paper in the market.
Daily News Roundup - Oct 20 2009
Sterlite Industries raises US$500mn via convertible bonds. (ET)
A cabinet committee has approved the sale of 5% stake in NTPC which is likely to fetch the government around Rs90bn. (ET)
Reliance Industries has been asked to rework certain technical aspects in its investment proposal for bringing to production, gas finds from its Mahanadi Basin. (BL)
HCL Infosystems raised Rs4.7bn through qualified institutional placement (QIP) of equity shares. (BL)
Government approves stake sale in power firms NTPC and Satluj Jal Vidyut Nigam (SJVNL), but postponed a decision on the overall disinvestment policy. (BS)
HCL Infosystems bags a contract worth over Rs5bn from the Rajasthan State Electricity Board. (ET)
RIL plans to own refining assets in the US and Europe. (BS)
The government approved Telenor’s proposal to raise stake in its Indian joint venture Unitech Wireless to 74%. (BS)
Supreme court to hear RIL-RNRL arguments from today (FE)
The Company Law Board allows Satyam Computer Services to adjust past irregularities and finalize its accounts for the year 2008-09. (ET)
Axis bank recasts business into strategic units. First Bank To Go In For SBU Structure; Retail & Corp Banking, SME And Agri Among The New Units. (ET)
Uco Bank is looking to raise upto Rs9.5bn through follow-on-public offer (ET).
The Edelweiss group receives approval from RBI to set up an asset reconstruction company. (ET)
Etisalat has pipped Bharti Airtel and BSNL, Russia’s Vimpelcom and Axiata to buy Luxembourg based Millicom’s Sri Lankan mobile network. (ET)
Rural Electrification Corporation board of directors has approved the proposed follow-on public offer. (ET)
ITC could make a killing from its 14.98% stake in EIH. (BS)
Ranbaxy Lab wins a decisive ruling from the District Court of New Jersey. (FE)
Hero Honda unveiled two new variants of Hunk and Splendor. (BS)
International Finance Corporation concludes a US$250mn loan agreement with Cairn India to support the company in developing oil resources in Rajasthan. (FE)
Wyeth becomes part of Pfizer Inc, following the merger of its parent company Wyeth with the global pharma major. (FE)
Tata Steel shareholders approve an enabling proposal for raising Rs50bn through issue of securities. (FE)
The disinvestment department to seek Cabinet approval for sale of government equity in MMTC Ltd in the next financial year. (BS)
CIL against use of Jamuria coal bed for Videocon plant. (BS)
TVS Motor to launch the country’s first motorcycle with automatic clutch by the end of 2009. (BL)
Gemini Communication has emerged as on of the lowest bidder for BSNL WiMax deal. (BL)
Foreign exchange reserves rose by US$1.5bn during the week ended October 9. (ET)
Cement companies to add 31mn tons capacity in H2 FY10. (BL)
The Reserve Bank of India plans to direct banks to stop levying penalty on pre-payment of retail loans. (ET)
In a bid to attract private developers for six-lining of the ambitious golden quadrilateral highways project through public-private partnership, the government has decided to double the grant given to the developer. (ET)
In its consultation paper on issues related to spectrum management, licensing and M&A, TRAI says it is not possible to entertain any new applicant for 2G telecom license under the current policy. (DNA)
Government approved a proposal to release wholesale prices-based inflation data on a monthly basis, instead of every week now, and changed the base. (DNA)
Centre is looking at the option of having dual tax rates on services as well. (FE)
The government to soon come out with a new series of data on factory output. (ET)
TRAI seeks shareholder’s view on broadcasting and FDI guidelines (FT)
The government orders audits of IT companies across the country on possible violations of the Software Technology Parks of India Act. (BS)
Comfort continues!
Too often we...enjoy the comfort of opinion without the discomfort of thought.
The market is being confronted with insurmountable opportunities. The story so far is that initial quarterly numbers are encouraging; earnings are beating forecasts and revenues are topping expectations. The question is whether this a reversal of corporate fortunes?
The indices may have ended flat on muhurat trading but the comfort in the market is set to continue with bulls set to take charge at start. While the government has postponed a decision on the overall disinvestment policy, the clearance to sell Center’s 5% stake in NTPC will augur well for the stock. Besides global cues are results, the market will pay some attention to the corporate battle between the Ambani brothers as the Supreme Court will begin the final hearing on the case. RNRL is suing RIL for not honouring its commitment of 2005 for supplying 28 mscmd of natural gas from the Krishna-Godavari Basin D6 block at $2.34/mBtu.
Earnings speculation is driving Asian stocks higher this morning. The Dow crossed 10,000 hitting its one-year peak.
Though there is more money to be made in the broader market Fresh buys should be undertaken with extreme caution. If not anything, the market has often subscribed to the theory of ‘Sell on News’ even if positive.
Results Today: Apollo Tyre, Chettinad Cement,Gati Limited, Jk Paper, K Sera Sera, Munoth Cap, Nectar Life, Neuland Lab, Polaris, Polychem, Prakash Ind, Ptl, Radico Khaitan, Rane Madras, Sesa Goa, Sterlite Tech, Subex, Sunteck Realty,Tech Mah and Tvs Electron.
Among other corporate news, Sterlite Industries raised US$500mn via convertible bonds.
HCL Infosystems raised Rs4.7bn through qualified institutional placement (QIP) of equity shares. HCL Infosystems has also bagged a contract worth over Rs5bn from the Rajasthan State Electricity Board.
Tata Steel shareholders have approved an enabling proposal for raising Rs50bn through issue of securities.
Reports say the government has ordered audits of IT companies across the country on possible violations of the Software Technology Parks of India Act
Indian markets resumed the upswing after an election break. It was another noteworthy day as the NSE Nifty re-conquered the 5100 mark for the first time since May 2008. The rally was led by the Metals, Auto and the Capital Goods stocks. However, the telecom stocks continued to be under the bear attack.
The Nifty has advanced nearly 175 points while the BSE Sensex has added ~600 points in the last two trading sessions.
Technically, The Nifty has yet again managed to close above all the near term moving averages indicating the strength in the current up move. However, one has to keep an eye for the 5160-5170 levels which could turn out to be stiff resistance. Once the crucial resistance is taken out the index could further extend gains upto 5300 mark.
The BSE Sensex surged 204 points at 17,231 after touching a high of 17,274 and a low of 17,117. The index opened at 17,117 against the previous close of 17,026. The NSE Nifty advanced 64 points to shut shop at 5,118.
In Asia, the Nikkei in Japan was flat at 10,060, while Australia's S&P/ASX ended higher by 1% at 4,831. Shanghai SE Composite in China gained 1.5% and Hang Seng index in Hong Kong was up 2%.
In Europe, stocks were in the green. The FTSE in the UK gained 1.8%, The DAX in Germany was up 2% and the CAC 40 index in France added 2%.
Coming back to India, among the BSE sectoral indices, the Metal index was the top gainer, adding 5.5%, followed by the Auto index that was up 2.5% and the BSE Capital Goods index was up 2.4%.
Even the BSE Mid-Cap index advanced 2% and the BSE Small-Cap index was up 1.5%.
Among the 30-components of Sensex, 25 stocks ended in the green and only 5 ended in the negative terrain. Among the major gainers were, M&M, Hindalco, JP Associates, SBI, Sterlite and Tata Steel.
On the other hand, RCom, Bharti, Reliance Infra, ACC and ACC were among the major losers
Outside the frontline indices, the big gainers in the broader market were PTC India, GVK Power, Cadila, Essar Oil and Bank of India. On the other hand, losers included Jet Airways, Chennai Petro and TTML.
HDFC Bank announced its Q2 results with net profit at Rs6.88bn up 30.3% as against Rs5.28bn in the same period last year. The bank’s total income was at Rs50bn registering 8% increase YoY as against Rs46.3bn.
Shares of HDFC Bank slightly ended flat at Rs1702. The stock opened at Rs1719 and made an intra-day high of Rs1727 and a low of Rs1685. Total traded volumes stood at 0.19mn shares.
Suzlon Energy announced about the completion and commissioning of a 19.5 MW wind farm project for the Gujarat Mineral Development Corporation (GMDC) at the Maliya - Mivana site in Rajkot District of Gujarat.
The project comprises of 13 units of Suzlon's SS82-1.5 MW wind turbines and has been commissioned in record time, almost two months ahead of the contractual commissioning period.
Shares of Suzlon erased gains and ended lower by 1.4% to Rs85.4. The stock opened at Rs87.50 and made an intra-day high of Rs88 and a low of Rs85. Total traded volumes stood at 8.63mn shares.
Shares of Unitech advanced by 4.5% to Rs105 after the company announced that it sold property worth Rs40bn in the March to September period.
The company sold ~10.11mn square feet of space in the period. Out of 10.11mn sq ft, ~8.16mn sq ft was booked in the residential segment. It said these figures did not cover PLC, parking and club charges.
Larsen & Toubro's Metallurgical, Material Handling & Water Operating Company - a part of its Construction Division has secured Orders aggregating Rs9.66bn from Customers like Sterlite Industries India Ltd, Uttar Pradesh Jal Nigam & Gujarat Water Infrastructure Ltd. This includes Rs2.25bn order from the Metallurgical Sector and Rs7.41bn orders from the Water Sector.
Shares of L&T gained by 2% to Rs1689. The stock opened at Rs1665 and made an intra-day high of Rs1698 and a low of Rs1660. Total traded volumes stood at 0.25mn shares.
Cairn India rose over 6.5% to end at Rs280 after crude prices surged to a year’s high. The stocks also were in demand after it had won two exploration areas in India’s auction earlier this week.
Crude oil for November delivery rose as much as US$1, or 1.4%, to US$75.15 per barrel in electronic trading on the New York Mercantile Exchange today, the highest since October 21, 2008.
On the other hand, ONGC gained by 1% to Rs1258, while, Oil Indian was marginally down by 0.3% to Rs1189.
Suven Life Sciences announced that their clinical candidate SUVN-502 for Alzheimer's Disease secured several product patents granted at all the key market countries; India (218438), Mexico (257091), South Africa (2005/4043), Singapore (113104), New Zealand (540840), Korea (10-2005-7009512), Eurasia (011320), Australia (2003237599) and Europe (1581492).
The granted Product Patent for SUVN-502 in all the countries is valid until June 2023.
Shares of Suven Life Science were locked at 5% upper circuit at Rs29. The stock opened at Rs26.95 and made an intra-day high of Rs29 and a low of Rs27.3. Total traded volumes stood at 92,000 shares.
Shares of Bajaj Auto Finance surged by over 14% to Rs324 after the company announced its Q2 results with net profit of Rs216.9mn as against Rs45.7mn in the same period last year.
The stock opened at Rs288 and made an intra-day high of Rs334 and a low of Rs285. Total traded volumes stood at 0.68mn shares.
Copper at five week high
Red metal registers gains following strike and China report
Strike at a mine at Peru and strong economic report from China pushed copper prices to five week high on Monday, 19 October, 2009 at Comex and LME. Prices also rose as the dollar declined.
At USA, copper futures for December delivery ended higher by 12.1 cents (4.3%) to 2.9665 a pound. Copper ended September, 2009, lower by 0.3%.
On the London Metal Exchange, copper for delivery in three months ended higher by $240 (3.9%) at $6,470 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.
Before September, it was the eight straight monthly gain for copper. On a year to date basis, prices are higher by 97%.
The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.
Workers in Peru started a 48-hour strike today, demanding better pension benefits and a greater share of mining profits.
In the currency market on Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.
In a latest report, it was reported yesterday that China, the world's second biggest oil consumer, saw economic growth at an estimated rate of 9% in the third quarter. That's up sharply from 7.9% growth in the second quarter and 7.1% over the first half of the year.
In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.
Among other metals traded in the LME on Monday, lead gained 1.2% to $2,230 a ton and zinc added 0.5% to end at $2,064 a ton. Nickel gained 1.1% to end at $18,900. Aluminium gained 0.4% to $1,913 a ton.
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