Monday, March 31, 2008
India exports to touch $ 200 bn: CII survey
India’s exports is likely to achieve twenty percent growth for the 2004-09 periods and expected to touch $200 billion by next year, said a CII Survey. However, the CEO survey conducted by the CII on Foreign Trade Policy said it required government support through tax refund schemes to achieve this feat. The survey said, to sustain the growth of exports, government should continue tax refund schemes such as Duty Entitlement Pass Book , Export Promotion Capital Goods ,Duty Free Import Authorization in the next fiscal as well. The survey said exporters are looking for new export promotion schemes from the annual supplement, to be announced on April 7. The new scheme would help exporters in getting raw material at cheaper cost and make the Indian products more competitive in the international markets, it added. The CEOs said the government should further simplify export and import procedures for small and medium enterprises, which contribute a large portion of total exports from the country. The powers of regional and zonal offices of Directorate General of Foreign Trade Policy (DGFT) should be enhanced to ensure quick approvals to exporters. Currently, the cases are sent to the Head Office of DGFT in New Delhi for approval, they said. The CEOs suggested implementing Electronic Data Interchange (EDI) across all ports, besides improving infrastructure, road linkages with ports and setting a target of a maximum of 10 hours turnaround time at ports for all goods by 2010. They said the benefits should be provided to exporters as the Indian products such as capital goods, high-tech and healthcare products, medical equipments, automobile and information technology are facing intense competition from China, Brazil, France, Bangladesh and ASEAN countries. In addition, the participants said the government should set up a mechanism to control increase in sea freight, as there is a 61 per cent increase in the cost in last one year, making exports uncompetitive.
'Kyoto II' climate talks open in Bangkok
The first formal talks in the long process of drawing up a replacement for the Kyoto climate change pact opened in Thailand on Monday with appeals to a common human purpose to defeat global warming.
"The world is waiting for a solution that is long-term and economically viable," U.N. Secretary-General Ban Ki Moon said in a video address to the 1,000 delegates from 190 nations gathered in Bangkok.
The week-long meeting stems from a breakthrough agreement in Bali last year to start negotiations to replace Kyoto, which only binds 37 rich nations to cut emissions of greenhouse gases by an average of five percent from 1990 levels by 2012.
U.N. climate experts want the new pact to impose curbs on all countries, although there is wide disagreement about how to share the burden between rich nations led by the United States and developing countries such as China and India.
No major decisions are likely from the Bangkok talks, which are intended mainly to establish a timetable for more rounds of talks culminating in a United Nations Climate Change conference in Copenhagen at the end of next year.
"We see this as very much a process-oriented meeting," chief U.S. climate negotiator Harland Watson told reporters before the opening ceremony.
However, environmental groups are keeping a close eye on Bangkok for signs of sustained commitment by rich and poor countries alike to minimising global warming by curbing emissions of greenhouse gases such as carbon dioxide.
"It's the first test of whether the goodwill and good intentions that were present in Bali are still there when they they get down to the hard negotiations," said Angela Anderson of the Washington-based Pew Environment Group.
TOUGH TALKS
Although the negotiations are likely to be tough and tortuous, a series of U.N. climate change reports last year highlighted the need to curb global warming.
One report in particular said it was more than 90 percent certain that human actions -- mainly burning fossil fuels -- were to blame for changes to the weather system that will bring more heatwaves, droughts, storms and rising seas.
One major issue to be tackled is the reluctance of big developing nations such as India and China to agree to any measures that might curb their rapid industrialisation.
Negotiators will also have to work out how to deal with the United States -- the only rich nation not to have signed up to Kyoto -- given that President George W. Bush will be leaving the White House after November's election.
Bush pulled the United States out of Kyoto in 2001, saying the pact would hurt the economy and was unfair since it excluded big developing nations from committing to emissions cuts.
The White House has since moderated its stance by saying it would accept emissions targets if all other big emitters do as well based on their individual circumstances.
This has tempered criticism, but green groups and many poorer nations say they don't expect much progress on a replacement climate pact until a new U.S. administration takes office in January 2009.
All three main presidential candidates are greener than Bush and back a cap-and-trade system to encourage business to curb carbon emissions.
The United Nations wants the new treaty to be in place by the end of 2009 to give companies and investors as much advance knowledge as possible of coming changes, and national parliaments time to ratify it before 2012, when Kyoto expires.
"The world is waiting for a solution that is long-term and economically viable," U.N. Secretary-General Ban Ki Moon said in a video address to the 1,000 delegates from 190 nations gathered in Bangkok.
The week-long meeting stems from a breakthrough agreement in Bali last year to start negotiations to replace Kyoto, which only binds 37 rich nations to cut emissions of greenhouse gases by an average of five percent from 1990 levels by 2012.
U.N. climate experts want the new pact to impose curbs on all countries, although there is wide disagreement about how to share the burden between rich nations led by the United States and developing countries such as China and India.
No major decisions are likely from the Bangkok talks, which are intended mainly to establish a timetable for more rounds of talks culminating in a United Nations Climate Change conference in Copenhagen at the end of next year.
"We see this as very much a process-oriented meeting," chief U.S. climate negotiator Harland Watson told reporters before the opening ceremony.
However, environmental groups are keeping a close eye on Bangkok for signs of sustained commitment by rich and poor countries alike to minimising global warming by curbing emissions of greenhouse gases such as carbon dioxide.
"It's the first test of whether the goodwill and good intentions that were present in Bali are still there when they they get down to the hard negotiations," said Angela Anderson of the Washington-based Pew Environment Group.
TOUGH TALKS
Although the negotiations are likely to be tough and tortuous, a series of U.N. climate change reports last year highlighted the need to curb global warming.
One report in particular said it was more than 90 percent certain that human actions -- mainly burning fossil fuels -- were to blame for changes to the weather system that will bring more heatwaves, droughts, storms and rising seas.
One major issue to be tackled is the reluctance of big developing nations such as India and China to agree to any measures that might curb their rapid industrialisation.
Negotiators will also have to work out how to deal with the United States -- the only rich nation not to have signed up to Kyoto -- given that President George W. Bush will be leaving the White House after November's election.
Bush pulled the United States out of Kyoto in 2001, saying the pact would hurt the economy and was unfair since it excluded big developing nations from committing to emissions cuts.
The White House has since moderated its stance by saying it would accept emissions targets if all other big emitters do as well based on their individual circumstances.
This has tempered criticism, but green groups and many poorer nations say they don't expect much progress on a replacement climate pact until a new U.S. administration takes office in January 2009.
All three main presidential candidates are greener than Bush and back a cap-and-trade system to encourage business to curb carbon emissions.
The United Nations wants the new treaty to be in place by the end of 2009 to give companies and investors as much advance knowledge as possible of coming changes, and national parliaments time to ratify it before 2012, when Kyoto expires.
Basel II comes into play on banks
Several frontline banks will be gearing up to face the challenge of conforming to tougher global banking standards from Monday under Basel II.
Basel II, which was conceived in June 2004, seeks to create an international standard that banking regulators can use to determine how much capital banks should set aside to cover their operational and financial risks.
The Basel II standards require banks to allocate capital in different proportions against various risks.
The Reserve Bank of India has decided to implement the new standards in phases. Domestic banks which have branches overseas will have to comply with the new capital adequacy standards by March 31.
The deadline for compliance with Basel II standards in the case of the remaining commercial banks is March 31 next year.
The State Bank of India (SBI), the Bank of Baroda (BoB), the Bank of India, Indian Bank and ICICI Bank will be among the first entities that will have to meet the new standards. All of them have high capital adequacy ratios under Basel I and are not expected to have any trouble in complying with the new standards.
In fact, it might be easier for them to do so as the Reserve Bank has lowered the risk weightages on some categories of loans — residential housing and education — from 125 per cent to 75 per cent under Basel II.
The banks will have to adopt the standard approach for credit risk and the basic indicator approach to operational risk while computing their capital requirements under the new framework.
In the standard approach, credit risk is measured on ratings given by an external credit rating agency. This is different from the earlier approach where there was a single risk weight of 100 per cent for all corporate loans, irrespective of their ratings.
Thus, if it was a AAA rated company or a firm with a much lower rating, banks had to allocate Rs 9 as capital (capital adequacy ratio of 9 per cent and the 100 per cent risk weight) for every Rs 100 lent.
Under the new regime, capital allocated will vary with the risk involved or the rating assigned. In the case of a corporate with a triple A rating, the risk weightage is only 20 per cent and the allocation of capital is lower.
So, if a bank lends Rs 100 to such a company, the capital allocated will be only Rs 1.80 (20 per cent of Rs 9).
This capital will progressively rise to Rs 13.50 in the case of a lowest rated company as the risk weightage in this case is 150 per cent. The risk weightage for unrated loans will be at 100 per cent.
While banks are already asking top companies to get rated, the BoB, the SBI and the three others are already Basel-II compliant.
It is estimated that in the past few months, more than 300 companies, ranging from leading firms such as Reliance Industries to other small and medium enterprises, have got themselves rated.
“We have rated more than 100 companies,” said a senior official from rating agency Crisil. Over the next few months, many more companies will get rated.
In the meantime, banks which have to comply with the new norms from next year have already entered into bilateral arrangements with various credit rating agencies to rate their corporate clients.
The basic indicator approach to operational risk requires banks to hold capital that is equal to the average of the 15 per cent annual gross income over the past three years. Gross income includes net interest income and non-interest income.
To comply with this additional capital requirement, banks had tapped the markets with follow-on offerings and other instruments to raise funds.
Basel II, which was conceived in June 2004, seeks to create an international standard that banking regulators can use to determine how much capital banks should set aside to cover their operational and financial risks.
The Basel II standards require banks to allocate capital in different proportions against various risks.
The Reserve Bank of India has decided to implement the new standards in phases. Domestic banks which have branches overseas will have to comply with the new capital adequacy standards by March 31.
The deadline for compliance with Basel II standards in the case of the remaining commercial banks is March 31 next year.
The State Bank of India (SBI), the Bank of Baroda (BoB), the Bank of India, Indian Bank and ICICI Bank will be among the first entities that will have to meet the new standards. All of them have high capital adequacy ratios under Basel I and are not expected to have any trouble in complying with the new standards.
In fact, it might be easier for them to do so as the Reserve Bank has lowered the risk weightages on some categories of loans — residential housing and education — from 125 per cent to 75 per cent under Basel II.
The banks will have to adopt the standard approach for credit risk and the basic indicator approach to operational risk while computing their capital requirements under the new framework.
In the standard approach, credit risk is measured on ratings given by an external credit rating agency. This is different from the earlier approach where there was a single risk weight of 100 per cent for all corporate loans, irrespective of their ratings.
Thus, if it was a AAA rated company or a firm with a much lower rating, banks had to allocate Rs 9 as capital (capital adequacy ratio of 9 per cent and the 100 per cent risk weight) for every Rs 100 lent.
Under the new regime, capital allocated will vary with the risk involved or the rating assigned. In the case of a corporate with a triple A rating, the risk weightage is only 20 per cent and the allocation of capital is lower.
So, if a bank lends Rs 100 to such a company, the capital allocated will be only Rs 1.80 (20 per cent of Rs 9).
This capital will progressively rise to Rs 13.50 in the case of a lowest rated company as the risk weightage in this case is 150 per cent. The risk weightage for unrated loans will be at 100 per cent.
While banks are already asking top companies to get rated, the BoB, the SBI and the three others are already Basel-II compliant.
It is estimated that in the past few months, more than 300 companies, ranging from leading firms such as Reliance Industries to other small and medium enterprises, have got themselves rated.
“We have rated more than 100 companies,” said a senior official from rating agency Crisil. Over the next few months, many more companies will get rated.
In the meantime, banks which have to comply with the new norms from next year have already entered into bilateral arrangements with various credit rating agencies to rate their corporate clients.
The basic indicator approach to operational risk requires banks to hold capital that is equal to the average of the 15 per cent annual gross income over the past three years. Gross income includes net interest income and non-interest income.
To comply with this additional capital requirement, banks had tapped the markets with follow-on offerings and other instruments to raise funds.
Herbal mkt to grow to Rs 14,500 cr by 2012: Assocham
Indian herbal industry is likely to register a compound annual growth rate of 20 per cent to touch Rs 14,500 crore by 2012, industry body Assocham said on Saturday. The Indian herbal market size is currently worth Rs 7,000 crore and the export of its medicines would grow at 25 per cent to Rs 9,000 crore, Assocham said in its study, Herbal Industry Biz Potential. Setting up of Herbal Farm Clusters by the government, promotion of exports, doubling the cultivation of medicinal plants, continuous focus for research and development on product and effective marketing of herbal products are the reasons cited by Assocham for the growth in herbal industry. "The study reveals that out of 700 plant species commonly used in India, only 20 per cent were earlier being cultivated on commercial scale and 90 per cent of medicinal plant used by the industries are collected from the wild," Assocham President Venugopal Dhoot said. However, the study states that the major hurdle for cultivating medicinal and aromatic plants as a sustainable agricultural profession are the lack of organised and regulated markets in India. "The regulated production on scientific lines, effective enforcement of licensing system and setting up of Export Promotion Zones (EPZ) in select states will push up exports of herbal material and medicines," it added. The study said that the farmers should be trained, particularly in post-harvest handling of the products and stressed for the dissemination of information about the prospects of cultivation, processing and marketing of medicinal plants.
Tax deduction allowed on LTA
Leave travel assistance (LTA) is generally paid as a part of the remuneration of employees. With some proper planning, an employee can save some tax through this mode. The LTA amount is received from the employer towards a journey within India. LTA is eligible for deduction under the Income Tax Act subject to compliance with specified conditions. Section 10 of the Income Tax Act specifies that in the case of an individual, the amount of any travel concession or assistance received by him is exempt. It should be received from his employer for himself and his family. He should be proceeding on leave to travel to any place in India. The exemption is available to an individual for two journeys in a block of four calendar years commencing from the calendar year 1986. The current block is calendar years (January to December) 2006 to 2009. Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, it may be carried forward. Such amount of travel concession or assistance can be availed of by the individual during the first calendar year of the immediately succeeding block of four calendar years, and is eligible for exemption. Any fixed sum paid by the employer to the employee by way of LTA on the basis of a self-declaration by the employee is not exempt from tax. In order to claim the exemption, he must produce original proofs for expenses, i.e., the tickets, bills etc. The tax benefit is for actual fare only. Hotel, food, sight seeing, local conveyance etc are not allowed. For the purposes of this exemption, 'family' means the spouse and children of the individual, and parents, brothers and sisters who are mainly dependent on the individual. In case the journey is by air, an amount not exceeding the economy fare of the national carrier by the shortest route to the place of destination is taken. In case the place of origin of journey and destination are connected by rail, and the journey is by any other mode of transport other than by air, an amount not exceeding the air conditioned first class rail fare by the shortest route to the place of destination is taken. Where the place of origin of journey and destination are not connected by rail, the amount eligible for exemption is - where a recognised public transport system exists, an amount not exceeding the first class or deluxe class fare, on such transport, by the shortest route to the destination, and where no recognised public transport system exists, an amount equivalent to the air conditioned first class rail fare, for the distance of the journey, by the shortest route. The amount exempt will not exceed the amount of expenses actually incurred for the travel. The exemption is available for a maximum of two children of an individual. The journey should be in India only. The exemption is available for the farthest place by shortest route when a circular journey is undertaken. The amount exempted under Section 10 will be the amount actually incurred on the travel.
Future picks up 70% in Godrej Aadhaar
The Future Group has picked up a 70% stake in Godrej Aadhaar, which provides agri-services in rural areas besides retailing. The stake has been bought at an undisclosed amount by Future Ventures, a Future Group company. Arvind Choudhury will be handling the business from Future Group, Future Group CEO Kishore Biyani said. “Aadhaar Retailing will have a board for joint management,” Godrej Agrovet’s CEO Balram Yadav said. Both Mr Biyani and Mr Balram declined to divulge the deal amount. “The tie-up will increase the penetration of our insurance business, micro-finance, credit business and sourcing of agri-products,” Mr Biyani said. With the joint venture, the company has now got entry into 62 new towns, apart from the existing retail network in 55 towns, he said. Godrej Aadhaar will continue with its agri-products business, Me Balram added.
NEWS UPDATES
- Bhushan Steel Limited has informed the Exchange that : "The company propose to set up a value added steel plant in Chennai with a production capacity of 0.5 million TPA with the total investment of approximately Rs. 500 crores."
- The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its recent annual survey report for the region has cautioned that the global food prices would remain high and held bio-fuel programme responsible for the same.
- Suven Life Sciences Ltd has announced that two product patents were granted in Mexico and Korea for two of their new chemical entities (NCEs) for the treatment of disorders associated with neuro-degenerative diseases and these patents are valid until 2023.
- FMCG major Godrej Industries on Monday said it has received shareholders approval for further investing up to Rs 360 crore in Godrej Consumer Products Ltd.
- State-run Bank of Maharashtra said it would merge Aurangabad Jalna Gramin Bank and Thane Gramin Bank, its two sponsored banks, to form Maharashtra Godavari Gramin Bank.
- Bata India Ltd has that the board of directors of the company at its meeting held on March 28 has recommended a dividend of 15 per cent on equity shares and an additional dividend of 5 per cent to celebrate 75 years of the Company in India.
- The EPC (engineering, procurement and construction) division of Reliance Energy (REL) secured two contracts worth Rs 12 billion for transmission projects of Reliance Power Transmission (RPTL).
- Targeting a business growth of 24% in the next fiscal, state-owned Dena Bank will write off Rs 2 billion under the loan waiver package announced in the Union Budget.
- The Future Group has picked up a 70% stake in Godrej Aadhaar, which provides agri-services in rural areas besides retailing.
- The finance ministry is believed to be examining a proposal by Ruias-led Essar Group to bring in foreign investment of up to $2 billion (Rs 8,000 crore) through Mauritius-based Essar Power Holdings in Essar Power.
- India's Larsen wins $145 mln order from HPCL.
- Public sector lender Canara Bank on Saturday launched 10 new products which, the bank said, suit each and every strata of clientele.
- Syndicate bank, lead bank of the district, has released Rs 1010 crore annual credit plan for the year 2008-09.
- IDBI Ltd has put on hold its decision to cut its prime lending rate, which was supposed to come into effect from Tuesday, it said in a statement issued over the weekend.
- India's Hinduja Group is in talks to buy a controlling stake in French auto parts maker Valeo (VLOF.PA: Quote, Profile, Research) in a deal that is expected to be worth about $1.5 billion, the Business Standard said on Monday, citing a source.
- JM Financial Consultants Ltd., a unit of JM Financial Ltd said on Monday it has decided to buy out its joint venture partner in JM Financial ASK Securities Pvt Ltd.
- Spanco Tele shares open up 3.1 pct on orders.
- In April ’08 all eyes will be fixed on the credit policy. If the RBI cuts interest rates (which we do not think is likely after the growth oriented budget) then the market will get supported.
- Bank of India (BoI) plans to open 10 more branches in 2008-09 in West Bengal to step up its business in the state.
- ISPAT Industries is planning to raise Rs 10 billion by rights issue and a foreign currency convertible bonds (FCCBs) float.
- Gujarat NRE Coke is planning to invest USD 425 million in the next three years to develop its mines.
Indian Overseas Bank to take over Pune bank
India cabinet panel to discuss inflation Monday
The Indian government has convened an emergency meeting of the Cabinet Committee on Prices on Monday to discuss possible solutions to curb inflation, which hit a 14-month high earlier this month, the Economic Times said on Sunday.
The inflation data released on Friday was "quite disturbing," Finance Secretary D. Subbarao said, according to the paper.
Data on Friday showed annual inflation at 6.68 percent in the 12 months to March 15, higher than the previous week's 5.92 percent.
It is also well above 5 percent near which the central bank wants inflation contained by the March 31 fiscal year end.
The inflation data released on Friday was "quite disturbing," Finance Secretary D. Subbarao said, according to the paper.
Data on Friday showed annual inflation at 6.68 percent in the 12 months to March 15, higher than the previous week's 5.92 percent.
It is also well above 5 percent near which the central bank wants inflation contained by the March 31 fiscal year end.
Tatas spend $133 mn in advisory fees in last 2 years
Country's leading industrial conglomerate Tata group, which recently announced the acquisition of premium British car brands Jaguar and Land Rover, has spend a whopping $133 million in advisory fees related to various buyouts in the last two years. According to data compiled by leading global financial information provider Dealogic, "the Tata group of companies has paid a total of 133 million dollars in advisory fees to banks advising on acquisitions since 2006". The amount of $133 million assumes significance as the group has acquired as many as 56 businesses with a total volume of $20.6 billion in the last two years, accounting for 82 per cent of their total merger and acquisition volume. Since the year 2002, the Tata group has made as many as 106 acquisitions valued at $24.2 billion.
Tata's M&A activities are mostly outbound as only 13 per cent of Tata Group' acquisitions have been domestic, that is targets based in India. The average acquisition size by the Tata Group is $284 million. The recent acquisition of Jaguar Cars and Land Rover for $2.3 billion is the second largest acquisition by the group, following Tata Steel's acquisition of Anglo-Dutch steel maker Corus for $12.1 billion, essaying the largest overseas takeover by an Indian company. Dealogic further added that the United Kingdom is the most targeted nation with a M&A volume of 16 billion dollars through seven deals, and this accounts for 82 per cent of the total M&A acquisitions.
Tata's M&A activities are mostly outbound as only 13 per cent of Tata Group' acquisitions have been domestic, that is targets based in India. The average acquisition size by the Tata Group is $284 million. The recent acquisition of Jaguar Cars and Land Rover for $2.3 billion is the second largest acquisition by the group, following Tata Steel's acquisition of Anglo-Dutch steel maker Corus for $12.1 billion, essaying the largest overseas takeover by an Indian company. Dealogic further added that the United Kingdom is the most targeted nation with a M&A volume of 16 billion dollars through seven deals, and this accounts for 82 per cent of the total M&A acquisitions.
MARKET PREDICTION
TODAY'S MARKET IS LIKELY TO OPEN IN FLAT TO NEGATIVE NOTE BECAUSE GLOBAL MARKET IS WEAK.
LEVEL OF THE NIFTY 4850-4900-5050-5100.
AFTER POOR ROLLOVER ,FIRST DAY WAS FAIR.
WE CAN ASSUME BUY POSITION FROM LOWER SUPPORT IN METAL SPACE-TISCO AND SAIL LOOKS GOOD.
AFTER CREEPING UP INFLATION BANKING SHOWS SOME DOWNWARD TREND, WHICH WILL CONTINUE IN NEAR FUTURE.
IN A NUTSHELL NIFTY IS IN PREMIUM WE CAN ALSO GO LONG FROM LOWER SUPPORT WITH SL OF 4750.
HAVE A NICE TRADING DAY !!!!!
-MR. SAM
LEVEL OF THE NIFTY 4850-4900-5050-5100.
AFTER POOR ROLLOVER ,FIRST DAY WAS FAIR.
WE CAN ASSUME BUY POSITION FROM LOWER SUPPORT IN METAL SPACE-TISCO AND SAIL LOOKS GOOD.
AFTER CREEPING UP INFLATION BANKING SHOWS SOME DOWNWARD TREND, WHICH WILL CONTINUE IN NEAR FUTURE.
IN A NUTSHELL NIFTY IS IN PREMIUM WE CAN ALSO GO LONG FROM LOWER SUPPORT WITH SL OF 4750.
HAVE A NICE TRADING DAY !!!!!
-MR. SAM
Saturday, March 29, 2008
M F SECTOR UPDATE
IDFC BOUGHT STAN CHAT MUTUAL FUND BUSINESS AT $205 BLN IN INDIA.
MF AUM REACHED AT RS 5.65 TRILLION.
INDIABULLS GOING TO SET UP A.M.C GOT APPROVAL FROM SEBI .
A U M OF EQUITY FUND STOOD AT RS 207659 CR.FUND MANAGER BOUGHT NET RS514 IN FEB 08.
FUND MANAGERS ARE SITTING ON RS 22908 CR ON CASH,OF THIS RS 16642 CR OF EXISTING FUND AND RS 6266 CR MOBILISED THROUGH NFO.
FUND MANAGERS RAISE THE RATIO OF ABSOLUTE CASH LEVEL TO 17.4% APROX FROM %8.5 APROX, TO MANAGE UNCERTAIN CONDITION OF EQUITY MARKET.
FUND MANAGERS ARE SLASHED THEIR EXPOSER TO HOUSING&CONSTRUCTION,POWER,STEEL SECTOR AND INCREASE THEIR EXPOSER TO I T,PHARMA,OIL&GAS.
MF AUM REACHED AT RS 5.65 TRILLION.
INDIABULLS GOING TO SET UP A.M.C GOT APPROVAL FROM SEBI .
A U M OF EQUITY FUND STOOD AT RS 207659 CR.FUND MANAGER BOUGHT NET RS514 IN FEB 08.
FUND MANAGERS ARE SITTING ON RS 22908 CR ON CASH,OF THIS RS 16642 CR OF EXISTING FUND AND RS 6266 CR MOBILISED THROUGH NFO.
FUND MANAGERS RAISE THE RATIO OF ABSOLUTE CASH LEVEL TO 17.4% APROX FROM %8.5 APROX, TO MANAGE UNCERTAIN CONDITION OF EQUITY MARKET.
FUND MANAGERS ARE SLASHED THEIR EXPOSER TO HOUSING&CONSTRUCTION,POWER,STEEL SECTOR AND INCREASE THEIR EXPOSER TO I T,PHARMA,OIL&GAS.
Friday, March 28, 2008
Oil surges after blast destroys Iraq pipeline
Oil rose above $106 a barrel today after saboteurs blew up a major pipeline in Iraq, cutting exports from the south of the country, and also because of strength in heating oil futures.
The attack on the pipeline in southern Iraq came on the third day of an Iraqi military operation against fighters loyal to Shia cleric Moqtada al-Sadr in the oil port of Basra.
“Today’s action was driven up by the explosion and catching fire of a pipeline in Iraq,” said Nauman Barakat, oil trader and and senior vice-president at Macquarie Futures USA. US crude was up $1.05 to $106.95 a barrel by 1630 GMT, having earlier risen as high as $107.70. London Brent crude added 56 cents to $104.55.
Crude was also pulled up by heating oil, which rose almost 2 per cent. Traders said a force majeure declaration by South Korean refiner S-Oil for April loadings of oil products had in part prompted the gain.
In Iraq, officials said efforts were under way to get shipments back to normal. It is the first time since 2004 that the southern supply route has been disrupted.
“This morning saboteurs blew up the pipeline transporting crude from Zubair 1 by placing bombs beneath it. The pipeline was severely damaged,” a Southern Oil Company official said. “Crude exports will be greatly affected because this is one of two main pipelines transporting crude to the southern terminals.”
The attack on the pipeline in southern Iraq came on the third day of an Iraqi military operation against fighters loyal to Shia cleric Moqtada al-Sadr in the oil port of Basra.
“Today’s action was driven up by the explosion and catching fire of a pipeline in Iraq,” said Nauman Barakat, oil trader and and senior vice-president at Macquarie Futures USA. US crude was up $1.05 to $106.95 a barrel by 1630 GMT, having earlier risen as high as $107.70. London Brent crude added 56 cents to $104.55.
Crude was also pulled up by heating oil, which rose almost 2 per cent. Traders said a force majeure declaration by South Korean refiner S-Oil for April loadings of oil products had in part prompted the gain.
In Iraq, officials said efforts were under way to get shipments back to normal. It is the first time since 2004 that the southern supply route has been disrupted.
“This morning saboteurs blew up the pipeline transporting crude from Zubair 1 by placing bombs beneath it. The pipeline was severely damaged,” a Southern Oil Company official said. “Crude exports will be greatly affected because this is one of two main pipelines transporting crude to the southern terminals.”
Buzz on lower mobile bill
Local and domestic long distance mobile call tariffs may drop further, thanks to telecom regulator Trai’s decision to do away with a fee that private telecom operators pay to state-run BSNL.
Mobile companies plan to pass on the benefits of the move to subscribers. However, they are unwilling to specify the quantum of discount they intend to pass on.
Trai said access deficit charge (ADC) levied on domestic calls would be scrapped from April, while that on international calls would be initially halved to 50 paise per minute before phasing it out from October this year.
“The rule is outdated and it’s good it’s being phased out,” said Mahesh Uppal, a telecom analyst.
ADC is a type of tax paid by private telecom operators to the government for failing to keep their commitment to roll out telecom services in rural areas. The money is used by companies such as the state- run BSNL to connect villages.
“We need to nevertheless fund BSNL through the USO fund (set up specifically to create rural telecom network),” Uppal added.
At present, mobile service providers pay 0.75 per cent of their gross revenue for domestic calls as ADC, and Re 1 per minute on all international incoming calls.
Bharti Airtel welcomed the regulator's move and said it would pass on the benefits to its customers. The firm said it would announce the details within a week, after consulting the telecom regulator.
A Vodafone Essar spokesperson said, “We welcome the move. We are committed to passing on the benefit to our customers in an equitable manner and will announce it shortly.”
According to industry analysts, growing revenues, a rising subscriber base, emergence of wireless phone connections and a mobile penetration of nearly three times compared with fixed lines — ADC is levied on fixed-line calls too — has reduced the relevance of the subsidy.
BSNL, however, wanted the levy to stay as any change would affect its expansion plans in remote areas.
Trai has decided to recommend to the government to provide BSNL Rs 2,000 crore annually from the universal service obligation fund for a period of three years to compensate the loss of ADC revenue.
BSNL was getting Rs 5,000 crore annually through ADC till about two years ago from private players.
Following Trai’s announcement, telecom stocks soared today.
The Bharti stock rose 2.68 per cent to close at Rs 824.65, while Reliance Communications gained 2.27 per cent to end at Rs 538.05.
The Idea Cellular scrip also rose 2.13 per cent to finish at Rs 103.25.
Mobile companies plan to pass on the benefits of the move to subscribers. However, they are unwilling to specify the quantum of discount they intend to pass on.
Trai said access deficit charge (ADC) levied on domestic calls would be scrapped from April, while that on international calls would be initially halved to 50 paise per minute before phasing it out from October this year.
“The rule is outdated and it’s good it’s being phased out,” said Mahesh Uppal, a telecom analyst.
ADC is a type of tax paid by private telecom operators to the government for failing to keep their commitment to roll out telecom services in rural areas. The money is used by companies such as the state- run BSNL to connect villages.
“We need to nevertheless fund BSNL through the USO fund (set up specifically to create rural telecom network),” Uppal added.
At present, mobile service providers pay 0.75 per cent of their gross revenue for domestic calls as ADC, and Re 1 per minute on all international incoming calls.
Bharti Airtel welcomed the regulator's move and said it would pass on the benefits to its customers. The firm said it would announce the details within a week, after consulting the telecom regulator.
A Vodafone Essar spokesperson said, “We welcome the move. We are committed to passing on the benefit to our customers in an equitable manner and will announce it shortly.”
According to industry analysts, growing revenues, a rising subscriber base, emergence of wireless phone connections and a mobile penetration of nearly three times compared with fixed lines — ADC is levied on fixed-line calls too — has reduced the relevance of the subsidy.
BSNL, however, wanted the levy to stay as any change would affect its expansion plans in remote areas.
Trai has decided to recommend to the government to provide BSNL Rs 2,000 crore annually from the universal service obligation fund for a period of three years to compensate the loss of ADC revenue.
BSNL was getting Rs 5,000 crore annually through ADC till about two years ago from private players.
Following Trai’s announcement, telecom stocks soared today.
The Bharti stock rose 2.68 per cent to close at Rs 824.65, while Reliance Communications gained 2.27 per cent to end at Rs 538.05.
The Idea Cellular scrip also rose 2.13 per cent to finish at Rs 103.25.
Vietnam, India curb rice exports as prices double
Major rice exporters Vietnam and India on Friday said they will curb overseas sales more in an effort to combat food inflation, threatening to heighten the world's anxiety over staple food supplies.
Hanoi confirmed it will cut rice exports by 22 percent this year from last. India raised the minimum sale price for rice exports by more than 50 percent, effectively ending overseas sales of all but the highest quality grades.
These are the latest measures by governments from Manila to Cairo to ensure sufficient supplies for their expanding populations at a time when global stockpiles have halved and prices have doubled to multi-year highs.
While consumer nations like the Phillippines fret over food security, big producers are aiming to tame inflation by keeping more supplies at home to drive down domestic prices.
In Vietnam, consumer prices rose by nearly 20 percent in March, the highest in more than 12 years, while India's wholesale price inflation has surged to a near-14 month high, posing a major policy challenge at a time when economic growth is slowing.
Vietnam, the world's second-biggest exporter, will limit rice shipments to 3.5 million tonnes, down from 4.5 million last year, in order to stabilise prices, a government statement quoted Prime Minister Nguyen Tan Dung as saying, after Hanoi imposed a limit for the first 10-month shipment last week.
"Vietnam will save 1 million tonnes of rice for northern provinces and will see prices easing following this cut," said a rice trader at a foreign firm in Ho Chi Minh City, Vietnam's largest grain trading market.
SUPPLY CONCERNS MOUNT
India, which could overtake Vietnam this year, has raised the minimum export price for non-basmati rice to $1,000 per tonne from $650 to protect domestic supplies. It also scrapped tax incentives for exporters of non-Basmati rice to try and tame price pressures in Asia's third-largest economy.
"The government's move is aimed at a complete halt of non-basmati rice exports," said Prem Garg, managing director of Lal Mahal Group, a leading rice exporter.
Trade officials believe India will be able to export 5.5 million tonnes of rice in the year to March 31, 2008, up from 3.8 million tonnes in the previous year, but added the new restrictions could cut sales in coming months.
"The government is concerned about domestic supplies," said Vijay Sethia, president of the All India Rice Exporters' Association. "There is no shortage of rice in India, but any scarcity in global markets will lead to higher exports."
Nearly half the planet's 6.6 billion people depend on rice to survive but rising populations and economic growth mean that the world is already eating more of the grain than is harvested.
World rice inventories now stand at about 72 million tonnes, their lowest since the mid-1970s and enough to cover about 17 percent of global annual consumption, data from the U.S. Department of Agriculture show. Just eight years ago stockpiles were equal to 35 percent of demand.
Vietnam exported 859,000 tonnes of rice in the first three months of this year, up 5.3 percent from a year earlier, government figures show.
The price for cargoes of Thai medium-grade 15 percent broken rice, a benchmark for a market that does not have an active global futures contract, more than doubled to $735 a tonne free-on board Bangkok on Thursday, from $360 at the end of 2007.
Vietnam rice prices are up 26 percent so far this year.
Egypt said earlier this week it will ban rice exports from April 1 to October to hold down local prices. The Philippines aims to import up to 2.2 million tonnes this year in what could be the biggest overseas purchase in a decade.
Hanoi confirmed it will cut rice exports by 22 percent this year from last. India raised the minimum sale price for rice exports by more than 50 percent, effectively ending overseas sales of all but the highest quality grades.
These are the latest measures by governments from Manila to Cairo to ensure sufficient supplies for their expanding populations at a time when global stockpiles have halved and prices have doubled to multi-year highs.
While consumer nations like the Phillippines fret over food security, big producers are aiming to tame inflation by keeping more supplies at home to drive down domestic prices.
In Vietnam, consumer prices rose by nearly 20 percent in March, the highest in more than 12 years, while India's wholesale price inflation has surged to a near-14 month high, posing a major policy challenge at a time when economic growth is slowing.
Vietnam, the world's second-biggest exporter, will limit rice shipments to 3.5 million tonnes, down from 4.5 million last year, in order to stabilise prices, a government statement quoted Prime Minister Nguyen Tan Dung as saying, after Hanoi imposed a limit for the first 10-month shipment last week.
"Vietnam will save 1 million tonnes of rice for northern provinces and will see prices easing following this cut," said a rice trader at a foreign firm in Ho Chi Minh City, Vietnam's largest grain trading market.
SUPPLY CONCERNS MOUNT
India, which could overtake Vietnam this year, has raised the minimum export price for non-basmati rice to $1,000 per tonne from $650 to protect domestic supplies. It also scrapped tax incentives for exporters of non-Basmati rice to try and tame price pressures in Asia's third-largest economy.
"The government's move is aimed at a complete halt of non-basmati rice exports," said Prem Garg, managing director of Lal Mahal Group, a leading rice exporter.
Trade officials believe India will be able to export 5.5 million tonnes of rice in the year to March 31, 2008, up from 3.8 million tonnes in the previous year, but added the new restrictions could cut sales in coming months.
"The government is concerned about domestic supplies," said Vijay Sethia, president of the All India Rice Exporters' Association. "There is no shortage of rice in India, but any scarcity in global markets will lead to higher exports."
Nearly half the planet's 6.6 billion people depend on rice to survive but rising populations and economic growth mean that the world is already eating more of the grain than is harvested.
World rice inventories now stand at about 72 million tonnes, their lowest since the mid-1970s and enough to cover about 17 percent of global annual consumption, data from the U.S. Department of Agriculture show. Just eight years ago stockpiles were equal to 35 percent of demand.
Vietnam exported 859,000 tonnes of rice in the first three months of this year, up 5.3 percent from a year earlier, government figures show.
The price for cargoes of Thai medium-grade 15 percent broken rice, a benchmark for a market that does not have an active global futures contract, more than doubled to $735 a tonne free-on board Bangkok on Thursday, from $360 at the end of 2007.
Vietnam rice prices are up 26 percent so far this year.
Egypt said earlier this week it will ban rice exports from April 1 to October to hold down local prices. The Philippines aims to import up to 2.2 million tonnes this year in what could be the biggest overseas purchase in a decade.
Inflation leaps to 6.68 pct
Inflation raced past 6 percent in mid-March to its highest in nearly 14 months, raising market expectations that the central bank may have to respond and sending the rupee to its highest in a month against the dollar.
Indian federal bond yields hit a three-month high of 7.89 percent after Friday's price data, up from Thursday's close of 7.78 percent, and traders said the risk the central bank would have to act was growing.
The widely watched wholesale price index rose 6.68 percent in the 12 months to March 15, sharply higher than the previous week's 5.92 percent and well above a market forecast of 5.96 percent, government data showed.
It was the highest since a reading of 6.69 percent on January 27, 2007, and the fourth consecutive week above 5 percent, below which the Reserve Bank of India (RBI) wants to keep inflation in the fiscal year ending March.
"Inflation number now looks 'ugly'," said Shubhada Rao, chief economist at Yes Bank in Mumbai.
"Clearly, this headline number may prompt monetary measures as well. At first instance, we expect RBI to allow rupee appreciation for now. Some liquidity impounding measures are also likely."
The partially convertible rupee initially showed little response to the data but then began to climb, breaking through 40.00 per dollar for the first time in a month and gaining to 39.8500. It closed at 40.0950/1050 on Thursday.
Wholesale inflation has shown a rising trend since early December 2007, driven largely by higher food prices, posing a major policy headache against the backdrop of slowing growth in the broader economy and general elections due by May 2009.
A modest rise in retail fuel prices in mid-February has also contributed to higher inflation, but the latest data caught many off guard.
"This is surprisingly high and carries ominous implications for the magnitude of the problem that is likely to dominate policy making for much of 2008," said Saumitra Chaudhuri, economic adviser at domestic rating agency ICRA.
"At the moment, I expect rates to be steady, but if this high trend continues one doesn't know what will happen."
SLOWING GROWTH
The central bank has kept its main lending rate unchanged at 7.75 percent for a year, after raising it five times between June 2006 and March 2007 to stem price pressures in a fast-growing economy.
The RBI's next policy review is scheduled for April 29 and it has also used its cash reserve ratio, the proportion of cash banks have to keep with it on deposit, as a monetary tool to soak up inflation-fuelling excess cash in the past.
Prospects for some policy easing surfaced briefly after the statistics office estimated India's economy to expand 8.7 percent in the fiscal year ending March, slower than an 18-year high of 9.6 percent in the previous year.
A Reuters poll on Friday forecast India's economic growth to slow to 8.1 percent in 2008/09 as moderating consumer demand and higher inflation kicks in.
Factory output in January rose by a lacklustre 5.3 percent from a year earlier, slowing sharply from the previous month and well below double-digit levels seen early in 2007 as tight policy and a stronger rupee hurt demand.
Finance Minister Palaniappan Chidambaram has said he was ready to take more fiscal steps to moderate inflation and analysts said easing prospects were dwindling.
"My sense is that inflation will move up further and perhaps reach 7 percent by June-end," said Abheek Barua, chief economist at HDFC Bank, adding that inflation was largely being fuelled by supply-side problems, a solution for which lay outside monetary policy.
Indian federal bond yields hit a three-month high of 7.89 percent after Friday's price data, up from Thursday's close of 7.78 percent, and traders said the risk the central bank would have to act was growing.
The widely watched wholesale price index rose 6.68 percent in the 12 months to March 15, sharply higher than the previous week's 5.92 percent and well above a market forecast of 5.96 percent, government data showed.
It was the highest since a reading of 6.69 percent on January 27, 2007, and the fourth consecutive week above 5 percent, below which the Reserve Bank of India (RBI) wants to keep inflation in the fiscal year ending March.
"Inflation number now looks 'ugly'," said Shubhada Rao, chief economist at Yes Bank in Mumbai.
"Clearly, this headline number may prompt monetary measures as well. At first instance, we expect RBI to allow rupee appreciation for now. Some liquidity impounding measures are also likely."
The partially convertible rupee initially showed little response to the data but then began to climb, breaking through 40.00 per dollar for the first time in a month and gaining to 39.8500. It closed at 40.0950/1050 on Thursday.
Wholesale inflation has shown a rising trend since early December 2007, driven largely by higher food prices, posing a major policy headache against the backdrop of slowing growth in the broader economy and general elections due by May 2009.
A modest rise in retail fuel prices in mid-February has also contributed to higher inflation, but the latest data caught many off guard.
"This is surprisingly high and carries ominous implications for the magnitude of the problem that is likely to dominate policy making for much of 2008," said Saumitra Chaudhuri, economic adviser at domestic rating agency ICRA.
"At the moment, I expect rates to be steady, but if this high trend continues one doesn't know what will happen."
SLOWING GROWTH
The central bank has kept its main lending rate unchanged at 7.75 percent for a year, after raising it five times between June 2006 and March 2007 to stem price pressures in a fast-growing economy.
The RBI's next policy review is scheduled for April 29 and it has also used its cash reserve ratio, the proportion of cash banks have to keep with it on deposit, as a monetary tool to soak up inflation-fuelling excess cash in the past.
Prospects for some policy easing surfaced briefly after the statistics office estimated India's economy to expand 8.7 percent in the fiscal year ending March, slower than an 18-year high of 9.6 percent in the previous year.
A Reuters poll on Friday forecast India's economic growth to slow to 8.1 percent in 2008/09 as moderating consumer demand and higher inflation kicks in.
Factory output in January rose by a lacklustre 5.3 percent from a year earlier, slowing sharply from the previous month and well below double-digit levels seen early in 2007 as tight policy and a stronger rupee hurt demand.
Finance Minister Palaniappan Chidambaram has said he was ready to take more fiscal steps to moderate inflation and analysts said easing prospects were dwindling.
"My sense is that inflation will move up further and perhaps reach 7 percent by June-end," said Abheek Barua, chief economist at HDFC Bank, adding that inflation was largely being fuelled by supply-side problems, a solution for which lay outside monetary policy.
Banking shares hit by CRR hike fears
Banking shares were hit on Friday by the sudden spurt in inflation rate, which gave rise to fears of the Reserve Bank of India raising the cash reserve ratio. Inflation rate, based on wholesale price index, shot up to 6.68 per cent for the week ended Mar 15, from 5.92 per cent in the previous week. HDFC Bank April was down 2 per cent, with open interest up 67,800 shares or 2.9 per cent. ICICI Bank near month contract slipped 1.6 per cent. The contract added 6.7 lakh or 10.5 per cent in open interest. Kotak Bank April shed 2 per cent while it added 2.24 lakh shares or 17 per cent in open interest. IDBI April soared on short covering. The contract shed 5.1 lakh shares or 3.1 per cent in open interest while price was up 3.3 per cent. Union Bank of India April contract price was up 2.5 per cent while it shed 1.42 lakh shares or 2.8 per cent in open interest. Canara Bank April gained 1.8 per cent while open interest shed 48,800 shares or 3.4 per cent. NSE Bank Nifty Index lost 0.42 per cent to 6939.90 and was the worst performing sector.
You may have to pay just 40% margin to borrow shares
In an attempt to boost the securities lending and borrowing mechanism, stock exchanges are considering a proposal where market participants may not have to pay the whole margin upfront. Internationally, players have to deposit cash (or some equivalent) equal to, or slightly higher than the amount of shares borrowed. A stock exchange official said, to begin with, this may be restricted to roughly around 40% of the worth of securities. Recently, capital market regulator Sebi had asked stock exchanges and depositories to put in place a screen-based system for implementation of the stock lending and borrowing mechanism by April 21. However, most players are awaiting further clarity or details on the scheme. One of the most-awaited clause is the amount of cash (or equivalent called as margin) that participants have to pay upfront. If this is fixed at 40%, it would mean that for a crore of stocks borrowed from the exchange window, only Rs 40 lakh will have to be kept with the exchange (or more accurately its clearing house) as the deposit. Once these borrowed stocks are returned within seven days, the deposit would be returned and only the pre-fixed interest will be paid to the lender. This, of course, if the contract for borrowed securities is not ‘rolled over’. The official further explained that the 40% initial margin will have, among others, 10% value at risk (VaR) and 5% extreme loss margin, (ELM), among others.
However, for a person who wants to bet against a rising share by selling it, the futures & options segment is likely to be a cheaper bet than the cash market. While selling futures on a stock, one has to pay only a fifth of the total exposure as initial margin. However, the mark-to-market transactions are likely to be calculated in both scenarios. The market is no stranger to the lending borrowing mechanism. After Sebi reintroduced Badla in 1996, NSE had introduced the Automated Lending and Borrowing Mechanism (ALBM), which was soon followed by the BSE’s Borrowing and Lending of Securities Scheme (BLESS). Both were essentially sophisticated forms of badla. However, once derivatives was introduced in 2000, ALBM and badla were banned as it was felt that the purpose of leverage was well served by individual stocks futures. “Given the considerable similarities in software requirements between the proposed securities lending mechanism and the old ALBM system, I would think that the exchanges should not need more than 2-3 weeks to get this off the ground,” JR Verma of IIM-A had said recently.
However, for a person who wants to bet against a rising share by selling it, the futures & options segment is likely to be a cheaper bet than the cash market. While selling futures on a stock, one has to pay only a fifth of the total exposure as initial margin. However, the mark-to-market transactions are likely to be calculated in both scenarios. The market is no stranger to the lending borrowing mechanism. After Sebi reintroduced Badla in 1996, NSE had introduced the Automated Lending and Borrowing Mechanism (ALBM), which was soon followed by the BSE’s Borrowing and Lending of Securities Scheme (BLESS). Both were essentially sophisticated forms of badla. However, once derivatives was introduced in 2000, ALBM and badla were banned as it was felt that the purpose of leverage was well served by individual stocks futures. “Given the considerable similarities in software requirements between the proposed securities lending mechanism and the old ALBM system, I would think that the exchanges should not need more than 2-3 weeks to get this off the ground,” JR Verma of IIM-A had said recently.
NEWS UPDATES
All companies need to give minimum of 18.55% salary increment to all employees every six months as per latest bill passed. Finance minister P.Chidambaram has approved and it comes to immediate effect which is after the financial period march month. This comes as a relief to petitioners appealing against the growing work hours in the Indian industry without a proper system to check overtime. The bill also mentions that all employees be provided 15 days of casual leave every year.
Sumit Mehta, Director of ETC Networks estimates that his company’s FY09 sales would be 40% higher than FY08. Speaking to CNBC-TV18, Mehta said that their FY09 education business would contribute 50% of revenues. He said that the education business is not capital intensive business – it works through franchise model, he said.
Rain Commodities has recently restructured its business by bringing in Cement and Calcined Petroleum Coke (CPC) business under its fold. The cement capacity of 1.50 Million TPA would rise to 3.16 million TPA by June 08 while CPC capacity is 2.44 Million TPA and is the world's largest producer of CPC.
The present equity of the company is Rs 32.10 crores, of which, 40% is held by the promoters while 8% by Mutual Funds and FIIs and 52% by Public. Of this 52%, Citicorp is holding 14.95% stake.
The markets are getting slower, boring and yet choppy. The Finance Minister is visiting the Bombay Stock Exchange today. No fireworks are expected. Just yesterday he said the economic growth would slow in FY09 to around 8%. The Economist Intelligence Unit says growth will probably average around 7.5% for FY09 and FY10. For the day, we are mildly positive on the back of decent F&O cues and positive FII figures. If inflation softens a little, it will be a bonus for the bulls, but the volatility is here to stay.
Finance Minister admits to a lower GDP growth rate of near 8% in 2008-09.
TRAI proposes abolition of access deficit charge (ADC) wef April 1st 2008.
The Government is planning to ask iron ore producers to check prices.
The Government is planning to liberalise FDI norms in real estate by waiving two conditions; three year lock-in on foreign investment and the requirement of at least US$5mn investment in case of JVs.
Sumit Mehta, Director of ETC Networks estimates that his company’s FY09 sales would be 40% higher than FY08. Speaking to CNBC-TV18, Mehta said that their FY09 education business would contribute 50% of revenues. He said that the education business is not capital intensive business – it works through franchise model, he said.
Rain Commodities has recently restructured its business by bringing in Cement and Calcined Petroleum Coke (CPC) business under its fold. The cement capacity of 1.50 Million TPA would rise to 3.16 million TPA by June 08 while CPC capacity is 2.44 Million TPA and is the world's largest producer of CPC.
The present equity of the company is Rs 32.10 crores, of which, 40% is held by the promoters while 8% by Mutual Funds and FIIs and 52% by Public. Of this 52%, Citicorp is holding 14.95% stake.
The markets are getting slower, boring and yet choppy. The Finance Minister is visiting the Bombay Stock Exchange today. No fireworks are expected. Just yesterday he said the economic growth would slow in FY09 to around 8%. The Economist Intelligence Unit says growth will probably average around 7.5% for FY09 and FY10. For the day, we are mildly positive on the back of decent F&O cues and positive FII figures. If inflation softens a little, it will be a bonus for the bulls, but the volatility is here to stay.
Finance Minister admits to a lower GDP growth rate of near 8% in 2008-09.
TRAI proposes abolition of access deficit charge (ADC) wef April 1st 2008.
The Government is planning to ask iron ore producers to check prices.
The Government is planning to liberalise FDI norms in real estate by waiving two conditions; three year lock-in on foreign investment and the requirement of at least US$5mn investment in case of JVs.
IPO regime is set to change from July with requirement of 100% payment by QIBs and shorter period between IPO closing and listing.
DTH operators have approached TRAI asking it to fix the price that they have to pay to the broadcasters.
The Government projects 30% growth in exports in dollar terms in 2008-09.
The Government temporarily suspends export subsidy under the DEPB scheme on steel.
U.K. Consumer Confidence Drops to Lowest in 15 Years, GfK Says
U.K. consumer confidence fell to a 15-year low in March as Britons grew more concerned that an economic slowdown is deepening, GfK NOP Ltd. said.
A gauge of sentiment declined 2 points from February to minus 19, the lowest since February 1993, the London-based market researcher said today, citing its poll of 2,007 people for the European Commission. All five components of the index declined.
``Consumer confidence again continues its downward trend for the seventh month in a row,'' Rachael Joy, who works on the survey for GfK, said in a statement. ``With news reports of possible recession in America, fears of recession in the U.K. and stock market fluctuations, the consumer's gloom continues to grow.''
Bank of England Governor Mervyn King told lawmakers on March 26 that the U.K. economy faces ``a sharp slowing of growth'' as a global credit freeze drives up borrowing costs for companies and consumers. At the same time, rising food and energy prices are eroding living standards and fueling inflation, limiting the scope for further interest-rate cuts.
An index measuring consumers' outlook on the general economic situation for the next year fell three points to minus 32, the lowest since October 1992, while a measure of their personal financial situation over the next 12 months dropped to the lowest in eight years, the survey found. A gauge of spending on major purchases fell two points to minus 21, the lowest since April 1995. The poll was conducted March 7-16.
U.K. economic growth will almost halve to 1.6 percent in 2008, the weakest since 1992, the year after Britain had its last recession, the average forecast of 22 economists surveyed by the Treasury this month showed. House prices fell for a fourth month in February, Nationwide Building Society said last month.
The Bank of England will probably cut the benchmark rate by a quarter-point at its next meeting on April 10, according to the median forecast of 25 economists in a Bloomberg News survey. The central bank has cut the rate twice since December to 5.25 percent.
A gauge of sentiment declined 2 points from February to minus 19, the lowest since February 1993, the London-based market researcher said today, citing its poll of 2,007 people for the European Commission. All five components of the index declined.
``Consumer confidence again continues its downward trend for the seventh month in a row,'' Rachael Joy, who works on the survey for GfK, said in a statement. ``With news reports of possible recession in America, fears of recession in the U.K. and stock market fluctuations, the consumer's gloom continues to grow.''
Bank of England Governor Mervyn King told lawmakers on March 26 that the U.K. economy faces ``a sharp slowing of growth'' as a global credit freeze drives up borrowing costs for companies and consumers. At the same time, rising food and energy prices are eroding living standards and fueling inflation, limiting the scope for further interest-rate cuts.
An index measuring consumers' outlook on the general economic situation for the next year fell three points to minus 32, the lowest since October 1992, while a measure of their personal financial situation over the next 12 months dropped to the lowest in eight years, the survey found. A gauge of spending on major purchases fell two points to minus 21, the lowest since April 1995. The poll was conducted March 7-16.
U.K. economic growth will almost halve to 1.6 percent in 2008, the weakest since 1992, the year after Britain had its last recession, the average forecast of 22 economists surveyed by the Treasury this month showed. House prices fell for a fourth month in February, Nationwide Building Society said last month.
The Bank of England will probably cut the benchmark rate by a quarter-point at its next meeting on April 10, according to the median forecast of 25 economists in a Bloomberg News survey. The central bank has cut the rate twice since December to 5.25 percent.
Japan Inflation Rate Climbs to Decade High; Unemployment Rises
Japan's consumer prices rose at the fastest pace in a decade and the unemployment rate increased for the first time in five months, putting pressure on households already strapped by falling wages.
Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.
A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.
``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''
Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.
The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.
`Flexible' Policy
Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.
Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.
Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.
Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.
``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''
Production Slump
Reports next week will probably provide more evidence of the economy's deterioration.
Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.
``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''
BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.
Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.
Inflation May Wane
Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.
``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''
Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.
Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.
The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.
Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.
A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.
``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''
Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.
The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.
`Flexible' Policy
Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.
Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.
Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.
Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.
``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''
Production Slump
Reports next week will probably provide more evidence of the economy's deterioration.
Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.
``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''
BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.
Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.
Inflation May Wane
Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.
``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''
Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.
Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.
The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.
Market Outlook
GLOBAL MARKET IS MIXED AFTER NEW CLEARING TO APRIL.
MARKET WILL TEND TO OPEN FLAT TO NEGATIVE .
NIFTY LEVELS 4700-4750-4800-4910.
IT IS ADVISABLE BUY FROM 4750 WITH SL OF 4700;
CEMENT AND FMCG SECTOR TO BE WATCH OUT.
ROLLOVER IN THIS SERIES IS POOR ,PREVIOUS MONTH OI WAS 58K CR ON OPENING OF CLEARING DAY AND IN APRIL SERIES IT IS 48K CR.
PUT CALL RATIO IS 1.03.
HAVE A NICE TRADING DAY............!!!
MARKET WILL TEND TO OPEN FLAT TO NEGATIVE .
NIFTY LEVELS 4700-4750-4800-4910.
IT IS ADVISABLE BUY FROM 4750 WITH SL OF 4700;
CEMENT AND FMCG SECTOR TO BE WATCH OUT.
ROLLOVER IN THIS SERIES IS POOR ,PREVIOUS MONTH OI WAS 58K CR ON OPENING OF CLEARING DAY AND IN APRIL SERIES IT IS 48K CR.
PUT CALL RATIO IS 1.03.
HAVE A NICE TRADING DAY............!!!
-BY MR. SAM
Thursday, March 27, 2008
MARKET OUT LOOK
GLOBAL MARKET IS BEAT WEAK,WE EXPECT FLAT TO DOWN OPENING OF NIFTY ,LEVEL FOR THE DAY 4700-4750-4800-4910.WE CAN EXPECT LONG FROM 4700-4750 LEVEL WITH A SL OF 4680,BANKING AND METAL EXPECTING MORE SHORT COVERING,TISCO AND SAIL INFOSYS,SBIN ,ICICIBANK,HDFC BANK MAY EXPECT MORE SHORT COVERING.TOTAL OPEN INT IS 68000 CR APROX,IN MARCH 38000 CR AND 30000 CR IN APRIL SERIES.PUT CALL RATIO IS .92.CEMENT LOOKS MORE GOOD ROLL OVER.TOTAL 44%(APROX) ROLL OVER HAVE SEEN.
HAVE NICE CLEARING DAY
HAVE NICE CLEARING DAY
Wednesday, March 26, 2008
MARKET OUTLOOK
GLOBAL MARKET IS MIXED.MARKET WOULD OPEN FLAT,NIFTY RANGE FOR THE DAY IS 4800-4950-5050-5100 MARKET CONTINUE TO BE RANGE BOUND.MARKET SHOOT UP FASTLY CAUSE OF SHORT COVERING ALL OVER THE SECTOR.FOR LONG SIDE OIL GAS &BANKING AND FINANCIAL SERVICE IS LOOKS POSITIVE.IF MARKET DOES NOT SUSTAIN AT HIGH LEVEL GO SHORT IN METAL SPACE,BUT IT IS ADVISABLE TO TAKE LONG FROM 4800 LEVEL WITH A SL OF 4780.TOTAL MARKET ROLL OVER IS 31%,TOTAL OPENINTEREST N 65000 CR,PUT CALL RATIO IS .94 .GOOD ROLL OVER SEEN IN CEMENT SPACE ULTRATECH AND GRASIM.
HAVE NICE TRADING DAY
HAVE NICE TRADING DAY
Tuesday, March 25, 2008
SECOND BIGGEST GAIN IN SENSEX
DATE CLOSE OPEN NET CHNG % CHANGE
25-Jan-08 18361.66 17221.74 1139.92 6.6
25-Mar-08 16217.49 15289.40 928.09 6.1
14-Nov-07 19929.06 19035.48 893.58 4.7
23-Oct-07 18492.84 17613.99 878.85 5.0
23-Jan-08 17594.10 16729.94 864.13 5.2
25-Jan-08 18361.66 17221.74 1139.92 6.6
25-Mar-08 16217.49 15289.40 928.09 6.1
14-Nov-07 19929.06 19035.48 893.58 4.7
23-Oct-07 18492.84 17613.99 878.85 5.0
23-Jan-08 17594.10 16729.94 864.13 5.2
Dollar Falls on Speculation U.S. Consumer Confidence Is Waning
The dollar fell the most against the euro in two weeks on speculation industry reports will show U.S. consumer confidence dropped to a five-year low and the housing slump deepened.
The dollar dropped from a one-week high against the yen as Deutsche Bank AG economists joined those forecasting the economy will suffer a recession. The U.S. currency also weakened against the Australian and New Zealand dollars, favorite targets of so- called carry trades, as a rally in European and Asian stocks encouraged investors to buy higher-yielding assets.
``Interest rates will continue to come down and that means that the dollar is going to continue to weaken in the short term,'' said Peter Rosenstreich, the chief market analyst at ACM Advanced Currency Markets SA in Geneva. ``Our base case scenario is very much grounded in the U.S. going into recession and probably deeper and longer than we had expected.''
The dollar fell to $1.5544 per euro at 10:12 a.m. in London, the biggest drop since March 12 based on closing prices, from $1.5423 late yesterday in New York. It declined to 100.51 yen, from 100.74 yesterday. The euro rose to 156.24 yen, from 155.39. The pound gained to $1.9915 from $1.9855. The dollar will fall to $1.58 per euro in coming weeks, Rosenstreich forecast.
Against the Australian dollar, also known as the Aussie, the U.S. currency weakened to 91.36 U.S. cents, from 90.59 cents yesterday. It declined to 80.39 U.S. cents per New Zealand dollar from 79.77 cents and dropped 2.1 percent versus the Korean won, to 976.6.
The dollar dropped from a one-week high against the yen as Deutsche Bank AG economists joined those forecasting the economy will suffer a recession. The U.S. currency also weakened against the Australian and New Zealand dollars, favorite targets of so- called carry trades, as a rally in European and Asian stocks encouraged investors to buy higher-yielding assets.
``Interest rates will continue to come down and that means that the dollar is going to continue to weaken in the short term,'' said Peter Rosenstreich, the chief market analyst at ACM Advanced Currency Markets SA in Geneva. ``Our base case scenario is very much grounded in the U.S. going into recession and probably deeper and longer than we had expected.''
The dollar fell to $1.5544 per euro at 10:12 a.m. in London, the biggest drop since March 12 based on closing prices, from $1.5423 late yesterday in New York. It declined to 100.51 yen, from 100.74 yesterday. The euro rose to 156.24 yen, from 155.39. The pound gained to $1.9915 from $1.9855. The dollar will fall to $1.58 per euro in coming weeks, Rosenstreich forecast.
Against the Australian dollar, also known as the Aussie, the U.S. currency weakened to 91.36 U.S. cents, from 90.59 cents yesterday. It declined to 80.39 U.S. cents per New Zealand dollar from 79.77 cents and dropped 2.1 percent versus the Korean won, to 976.6.
Oil falls 1.5 per cent, nears $100 mark on profit taking
Oil fell by $1.50 to near the $100 a barrel mark on Monday, extending last week's deep losses as funds sought to lock in first-quarter profits and Saudi Arabia reassured consumers of its plans to boost supply. US light crude for May delivery fell $1.51 to $100.33 a barrel in Globex electronic trading by 0100 GMT. Prices dropped by nearly $9, about 8 percent, last week as investors fled the commodities complex on fears that gains had been overdone, giving a boost to the beleaguered dollar in the process.
London Brent crude fell $1.12 cents to $99.26. "I think there's still a lot of profit taking in the market and that is pushing down oil prices. The US dollar is also bouncing back from major currencies so that's adding to the downward pressure," said Tetsu Emori, a Tokyo-based fund manager at Astmax Co Ltd. "The market could also be reacting to comments from Saudi Arabia." Saudi Arabia said on Sunday it was working to expand its oil production and refinery capacity in order to maintain world economic growth, reaffirming its vow to invest tens of billions of dollars in new wells and infrastructure. "The kingdom will work with OPEC countries, other producers and consuming countries towards oil market stability and to avoid the effects of harmful speculation," the Supreme Council of Petroleum and Mineral Affairs said in a statement following a visit by US Vice President Dick Cheney. Washington has said it wants Saudi Arabia to help raise OPEC production to ease prices, but the producers' cartel has resisted pumping more crude due to fears of weakening demand
London Brent crude fell $1.12 cents to $99.26. "I think there's still a lot of profit taking in the market and that is pushing down oil prices. The US dollar is also bouncing back from major currencies so that's adding to the downward pressure," said Tetsu Emori, a Tokyo-based fund manager at Astmax Co Ltd. "The market could also be reacting to comments from Saudi Arabia." Saudi Arabia said on Sunday it was working to expand its oil production and refinery capacity in order to maintain world economic growth, reaffirming its vow to invest tens of billions of dollars in new wells and infrastructure. "The kingdom will work with OPEC countries, other producers and consuming countries towards oil market stability and to avoid the effects of harmful speculation," the Supreme Council of Petroleum and Mineral Affairs said in a statement following a visit by US Vice President Dick Cheney. Washington has said it wants Saudi Arabia to help raise OPEC production to ease prices, but the producers' cartel has resisted pumping more crude due to fears of weakening demand
Tata Motors close to inking deal with Ford
Tata Motors is on the verge of making automotive history. After demonstrating it can build the world's cheapest car, it is now set to acquire the iconic Jaguar and Land Rover - brands that are among the most expensive in the world. Sources close to developments at the company said Tata Motors has signed an agreement with Ford for both brands and that an announcement is expected mid-week, perhaps as early as Tuesday or Wednesday. It is still unclear how much Tata Motors will pay for the acquisition. Speculation is that both companies have agreed to a value in the region of $2-3 billion. To meet fund requirements, a consortium of banks including JP Morgan Chase, Citigroup, BNP Paribas, State Bank of India and Standard Chartered helped the Tatas raise $3 billion. Sources said that while a good part of this money would go towards funding the deal itself, the other part would be used to meet working capital requirements.
Certificate of Registration of 35 stock broker calcelled
The Securities and Exchange Board of India has cancelled the licences of 35 stock brokers of which 8 members belong to NSE and 27 members belong to OTCEI. These stock
brokers were expelled from their activities. It was alleged that these brokers had also failed to pay fees to SEBI. Consequent to the expulsion, they also failed to comply with one of the condition for the grant of certificate of registration as specified in 4(a) of Securities Exchange Board of India (Stock Brokers and Sub Brokers) Rules, 1992 (now repealed on September 07, 2006). Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 is hereinafter referred to as the Rules for the sake of brevity. The provisions of the above said rules had been simultaneously specified in the Securities and Exchange Board of India (Stock Broker and Sub-Broker) Regulation 1992. The brokers have failed to pay fees to SEBI as required under rule 4(d) of the said rules.These brokers are required to hold a membership certificate with NSE in order to get a license from SEBI as mentioned under para 1.1 in terms of
rule 4(a) of the above said rules. Secondly, the brokers have to pay the SEBI fees mentioned
under rule 4(d) of the said rules. Since these brokers no longer fulfill this essential criterions
and therefore their certificates of registration are liable to be cancelled.
brokers were expelled from their activities. It was alleged that these brokers had also failed to pay fees to SEBI. Consequent to the expulsion, they also failed to comply with one of the condition for the grant of certificate of registration as specified in 4(a) of Securities Exchange Board of India (Stock Brokers and Sub Brokers) Rules, 1992 (now repealed on September 07, 2006). Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 is hereinafter referred to as the Rules for the sake of brevity. The provisions of the above said rules had been simultaneously specified in the Securities and Exchange Board of India (Stock Broker and Sub-Broker) Regulation 1992. The brokers have failed to pay fees to SEBI as required under rule 4(d) of the said rules.These brokers are required to hold a membership certificate with NSE in order to get a license from SEBI as mentioned under para 1.1 in terms of
rule 4(a) of the above said rules. Secondly, the brokers have to pay the SEBI fees mentioned
under rule 4(d) of the said rules. Since these brokers no longer fulfill this essential criterions
and therefore their certificates of registration are liable to be cancelled.
MARKET OUTLOOK
GLOBAL MARKET IS HOT AFTER REVISE OFFER OF BEAR STERN TO $10 PER SHARE.INDIA WILL FOLLOW THE TREND NIFTY WILL OPEN GAP UP.RANGE FOE NIFTY IS 4600-4650-4700-4800.FINAL SL FOR ALL LONG IS 4550 IS ADVISABLE,FOR LONG SIDE BANKING AND FINANCIAL SERVICE IS LOOKS GOOD DUE TO SHORT COVERING.IN OIL&GAS SPACE RELIANCE IS LOOKS POSITIVE.OVERALL MARKET O I IS 61000 CR(APROX). PUT CALL RATIO IS .85.
HAVE A NICE TRADING DAY
HAVE A NICE TRADING DAY
Monday, March 24, 2008
Sixth Pay Commission submits
The Sixth Pay Commission headed by justice B N Srikrishna today submitted its recommendations to Finance minister P Chidambaram this morning at the North Block.Commission officials were tight lipped about the recommendations but added that the report had "right to reconcile the needs of employees with the overall fiscal situations".According to sources, the finance ministry will now vet the recommendations before proposing them for a final decision by the government.Source added that Chidambaram is likely to discuss the matter with Prime Minister Manmohan Singh as well.Pay Commission was set in October 2006 and is widely expected to suggest an over 30% increase in salaries of 4.5 million central government employees.
MARKET SCENARIO
THE better-than-estimated quarterly earnings of some top US invest- ment banks last week may have slightly eased fears and given a fillip to the US markets on Friday. Yet investor sentiment remains nervous. Analysts maintain that overseas investors are likely to book profits on every rebound here on, due to rise in 'risk-aversion' to shares of emerging markets, including India. Traders are unlikely to take lightly the news of Monsoon Capital, a $1.2-billion hedge funds, far-
ing badly, as a result of the meltdown in Indian equities in the past couple of months. while Monsoon's exposure to Indian equities may not be as significant as compared to other major funds, there are concerns that the news may trigger more redemptions from other hedge funds with higher exposure to India. One of Monsoon's funds has dropped roughly 45% since January. "With such kind of news amplify- ing India's underperformance, there will be more redemptions from investors in other funds because of the herd mentality. The under- performance in Indian markets compared to others in this fall, is a clear reflection that India's growth story is yet to be understood well," said a senior institutional sales person with a brokerage, which services forty-odd overseas clients.
STOCK-broking firms will have to notify clients about their(clients') daily margin positions from April 1, according to a directive from market regulator Securities and Exchange Board of India(Sebi). The move follows a spate of complaints from investors that brokers have been liquidating their positions citing insufficient margins, though their margin accounts had enough funds. The other common complaint is that investors were not aware of the quantum of margin money that had to be deposited to replenish the account. Such complaints could soon become a thing of the past once the new rule is implemented.
ing badly, as a result of the meltdown in Indian equities in the past couple of months. while Monsoon's exposure to Indian equities may not be as significant as compared to other major funds, there are concerns that the news may trigger more redemptions from other hedge funds with higher exposure to India. One of Monsoon's funds has dropped roughly 45% since January. "With such kind of news amplify- ing India's underperformance, there will be more redemptions from investors in other funds because of the herd mentality. The under- performance in Indian markets compared to others in this fall, is a clear reflection that India's growth story is yet to be understood well," said a senior institutional sales person with a brokerage, which services forty-odd overseas clients.
STOCK-broking firms will have to notify clients about their(clients') daily margin positions from April 1, according to a directive from market regulator Securities and Exchange Board of India(Sebi). The move follows a spate of complaints from investors that brokers have been liquidating their positions citing insufficient margins, though their margin accounts had enough funds. The other common complaint is that investors were not aware of the quantum of margin money that had to be deposited to replenish the account. Such complaints could soon become a thing of the past once the new rule is implemented.
MARKET OUTLOOK
AFTER A LONG HOLIDAY MARKET LIKELY TO OPEN POSITIVE NOTE,IT WOULD MAINTAIN RANGE OF 4600-4700-4750-4800.EXPIRY IS APPROCHING FAST FOR MARCH SERISE THATS WHY SHORT COVERING COULD SEE IN THE MARKET.FOR LONG SIDE BANKING AND FINANCIAL SERVICE DUE TO SHORT COVERING AND FOR SHORT AT HIGHER LEVEL METAL LOOKS WEAK.
IN BANKING SPACE ICICI BANK AND SBI LOOKS GOOD
RELCAPITAL CORRECTED ALOT FROM HIGHER LEVEL SO LONG CAN ASSUME.
FOR SHORT SIDE TATASTEEL,SAIL LOOKS WEAK
HAVE A NICE TRADING DAY.
IN BANKING SPACE ICICI BANK AND SBI LOOKS GOOD
RELCAPITAL CORRECTED ALOT FROM HIGHER LEVEL SO LONG CAN ASSUME.
FOR SHORT SIDE TATASTEEL,SAIL LOOKS WEAK
HAVE A NICE TRADING DAY.
Thursday, March 20, 2008
Yen Rises Against Euro as Carry Trades Cut on Commodities Drop
The yen rose for a second day against the euro on speculation investors will reduce holdings of commodities financed with loans from Japan.
Japan's currency strengthened against the South African rand and the Australian dollar, popular targets for so-called carry trades, after gold plunged the most since 2006 and oil fell more than $4 a barrel. Commodities sank on speculation the Federal Reserve will ease the pace of interest-rate cuts, maintaining the allure of dollar-denominated assets.
Risk aversion has reached a new level with commodities slumping overnight,'' said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp, Australia's fourth- largest lender. ``This will add bearish sentiment toward carry and commodity currencies.''
Japan's currency climbed to 154.28 per euro as of 10:26 a.m. in Tokyo from 154.80 in New York, bringing its gains this year to 5.7 percent. The yen advanced to 98.93 per dollar from 99.03. Currency trading volume in Asia today may be about 50 percent of normal levels because of a public holiday in Japan, said Rennie, who forecast the yen may move between 97 and 102 per dollar for the rest of this month.
Japan's currency strengthened against the South African rand and the Australian dollar, popular targets for so-called carry trades, after gold plunged the most since 2006 and oil fell more than $4 a barrel. Commodities sank on speculation the Federal Reserve will ease the pace of interest-rate cuts, maintaining the allure of dollar-denominated assets.
Risk aversion has reached a new level with commodities slumping overnight,'' said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp, Australia's fourth- largest lender. ``This will add bearish sentiment toward carry and commodity currencies.''
Japan's currency climbed to 154.28 per euro as of 10:26 a.m. in Tokyo from 154.80 in New York, bringing its gains this year to 5.7 percent. The yen advanced to 98.93 per dollar from 99.03. Currency trading volume in Asia today may be about 50 percent of normal levels because of a public holiday in Japan, said Rennie, who forecast the yen may move between 97 and 102 per dollar for the rest of this month.
Wednesday, March 19, 2008
Morgan Stanley Earnings Drop 42%
Morgan Stanley, which reported the first loss in its history three months ago, said earnings fell 42 percent, less than analysts estimated, as investment banking fees dwindled and loan values declined.
First-quarter net income dropped to $1.55 billion, or $1.45 a share, from $2.67 billion, or $2.51, a year earlier, the second-biggest U.S. securities firm said today in a statement. The average estimate for the three-month period ended Feb. 29 was $1.01 a share.
First-quarter net income dropped to $1.55 billion, or $1.45 a share, from $2.67 billion, or $2.51, a year earlier, the second-biggest U.S. securities firm said today in a statement. The average estimate for the three-month period ended Feb. 29 was $1.01 a share.
YEN PAIN
The Japanese Yen has appreciated against the US Dollar (USD) all the way to the 97 level. It has appreciated by about 6% during this month alone and is ~21% up from the last year's low touched in June 2007. Against the rupee also the yen has appreciated by 6.4% in the current month till date.In the past, Japanese authorities had sold yen on all the occasions when the yen-USD rate had approached the 100 mark, with a view to supporting exporters such as Toyota
Motors and Sony Corporation. However, charting a different line this time around, Japanese Finance Minister Fukushiro Nukaga stopped short of signaling concerns when the yen- USD rate inched closer to the 100 level and simply stated that the government needs to watch currency moves
Motors and Sony Corporation. However, charting a different line this time around, Japanese Finance Minister Fukushiro Nukaga stopped short of signaling concerns when the yen- USD rate inched closer to the 100 level and simply stated that the government needs to watch currency moves
MARKET OUTLOOK
GLOBAL MARKET IS SHOOT UP AFTER FED CUT RATE TO 75 BPS TO 2.25%,INDIA WILL ALSO FOLLOW THE PHASE,NIFTY LEVEL 4600-4670-4750-4800.BANKING AND OILGAS CAN ASSUME IN LONG SIDE.IF NIFTY SUSTAIN ABOVE 4800 FRESH LONG CAN ASSUME.
HAVE A NICE TRADING
HAVE A NICE TRADING
Tuesday, March 18, 2008
Lehman Net Income Declines 57%, Less Than Estimated (Update2)
Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, reported earnings that beat analysts' estimates, easing concern that losses from the mortgage market are eroding its capital.
Lehman surged 18 percent in New York trading after falling a record 19 percent yesterday. First-quarter net income declined 57 percent to $489 million, or 81 cents a share, the New York-based company said in a statement today. Analysts had estimated Lehman would earn 72 cents a share.
Lehman surged 18 percent in New York trading after falling a record 19 percent yesterday. First-quarter net income declined 57 percent to $489 million, or 81 cents a share, the New York-based company said in a statement today. Analysts had estimated Lehman would earn 72 cents a share.
Goldman Sachs Beats 1Q Expectations
Goldman Sachs Group Inc., the world's largest investment bank, on Tuesday reported stronger asset management and commodities performance pushed first-quarter results well above Wall Street projections.
However, the investment house was not vulnerable to the global credit crisis. Goldman posted net losses on residential mortgages and securities of $1 billion, credit products produced another $1 billion loss, and investment banking returns were sluggish.
"Market conditions are clearly very difficult," Chairman and Chief Executive Lloyd Blankfein said in a statement.
Goldman reported first-quarter earnings of $1.47 billion after preferred dividends, or $3.23 per share, down from $3.2 billion, or $6.67 per share, last year. Revenue fell to $8.33 billion from $12.73 billion a year earlier.
Analysts polled by Thomson Financial on average expected earnings of $2.58 per share on $7.47 billion in revenue. Reflecting the uncertain nature of the times, the 18 analysts reporting earnings estimates had forecast anything from $1.95 to $3.40 per share in profits.
Shares of the company rose 6 percent to $160.05 in premarket trading from a $151.02 close Monday.
However, the investment house was not vulnerable to the global credit crisis. Goldman posted net losses on residential mortgages and securities of $1 billion, credit products produced another $1 billion loss, and investment banking returns were sluggish.
"Market conditions are clearly very difficult," Chairman and Chief Executive Lloyd Blankfein said in a statement.
Goldman reported first-quarter earnings of $1.47 billion after preferred dividends, or $3.23 per share, down from $3.2 billion, or $6.67 per share, last year. Revenue fell to $8.33 billion from $12.73 billion a year earlier.
Analysts polled by Thomson Financial on average expected earnings of $2.58 per share on $7.47 billion in revenue. Reflecting the uncertain nature of the times, the 18 analysts reporting earnings estimates had forecast anything from $1.95 to $3.40 per share in profits.
Shares of the company rose 6 percent to $160.05 in premarket trading from a $151.02 close Monday.
US Stocks Heading for Higher Open
Stocks were poised to open higher Tuesday as investors anticipated a massive interest rate cut from the Federal Reserve just two days after the central bank backed JPMorgan's buy of Bear Stearns and also loosened up its lending.
In the meantime, investors will be hearing from two rivals of Bear Stearns Cos. -- Lehman Brothers Inc. and Goldman Sachs Group Inc. -- which are scheduled to release their fiscal first-quarter earnings Tuesday morning. Both are expected to post profits, but profits that are significantly lower than they were a year ago. Investors will want to get more details about the souring mortgage-backed bets on their books.
Stockholders have been especially pessimistic about Lehman Brothers, as it is the investment bank most similar in structure and exposure to Bear Stearns. Lehman shares fell 19 percent on Monday after JPMorgan Chase & Co. said Sunday it was buying Bear Stearns for just $2 a share, or $236 million.
The Fed on Sunday, in addition to guaranteeing up to $30 billion of Bear's most troubled assets for JPMorgan, lowered its discount rate -- the rate it charges banks directly -- by a quarter-point. It also is allowing more types of financial firms to borrow from the central bank, and is accepting more various types of collateral.
In the meantime, investors will be hearing from two rivals of Bear Stearns Cos. -- Lehman Brothers Inc. and Goldman Sachs Group Inc. -- which are scheduled to release their fiscal first-quarter earnings Tuesday morning. Both are expected to post profits, but profits that are significantly lower than they were a year ago. Investors will want to get more details about the souring mortgage-backed bets on their books.
Stockholders have been especially pessimistic about Lehman Brothers, as it is the investment bank most similar in structure and exposure to Bear Stearns. Lehman shares fell 19 percent on Monday after JPMorgan Chase & Co. said Sunday it was buying Bear Stearns for just $2 a share, or $236 million.
The Fed on Sunday, in addition to guaranteeing up to $30 billion of Bear's most troubled assets for JPMorgan, lowered its discount rate -- the rate it charges banks directly -- by a quarter-point. It also is allowing more types of financial firms to borrow from the central bank, and is accepting more various types of collateral.
After Bear Stearns Rescue, Who's Next?
With a deal in place to save Bear Stearns from bankruptcy, the company's shares traded above the offer price Monday even as investors began turning a critical eye to other investment banks amid worries about how far the credit contagion could spread.
Despite the weekend agreement for JPMorgan Chase & Co. to buy Bear Stearns for a fraction of its value last week, worries that other banks had sizable exposure to troubled credit markets sent global markets tumbling. The uncertainty was evident on Wall Street, where the Dow Jones industrials sank by more than 100 points.
At Bear Stearns' 47-story headquarters in midtown Manhattan, many employees said they still couldn't believe that the nation's fifth-largest investment bank is -- essentially -- out of business. Employees said there was no meeting to inform employees about what was happening.
"It's my first job out of school. I thought it was a big company -- it would be good experience," said Ki Byung, who works for a division of Bear Stearns. "Now after a couple of months something like this happens."
A complete collapse of Bear Stearns might have crushed the already-dwindling confidence in the global financial system, which has frozen up after last year's troubles in the subprime mortgage market.
Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse. But the fact that a major investment bank could reach the verge of buckling -- and be sold at such a discount -- sent dismay through Wall Street and beyond.
"One reaction is shock that a company that reaffirmed its book value at around $84 on Wednesday can be worth $2 per share four days later on Sunday," said Deutsche Bank analyst Mike Mayo.
With Bear Stearns seemingly gone, investors pondered who might be next. Lehman Brothers Holding Inc. stock fell more than 34 percent Monday, following a 15 percent drop on Friday amid concerns it might be facing similar liquidity issues. Lehman Chief Executive Richard Fuld denied Monday that the firm was having such problems.
Bear Stearns shares fell $26.32, or 87.7 percent, to $3.68 -- above the shockingly low price of $2 per share that JPMorgan Chase is paying -- while JPMorgan rose $3.03, or 8.3 percent, to $39.57. UBS AG, hit hard by the same type of write-downs for mortgages that felled Bear Stearns, dropped nearly 12 percent in Zurich.
JPMorgan announced Sunday night that it would acquire Bear Stearns for $236.2 million in a deal that was fast-tracked by the federal government to avoid a bankruptcy. The price represents roughly 1 percent of what the investment bank was worth just 16 days ago.
The Federal Reserve and the U.S. government swiftly approved the all-stock buyout to complete the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.
JPMorgan said it will guarantee all business -- such as trading and investment banking -- until Bear Stearns' shareholders approve the deal, expected to be completed during the second quarter. The acquisition includes Bear Stearns' headquarters, which as one of the world's tallest buildings could fetch more than $1 billion in a sale.
JPMorgan Chief Financial Officer Michael Cavanagh did not say what would happen to Bear Stearns' 14,000 employees worldwide, or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns' prime brokerage business, which completes trades for big investors such as hedge funds.
Despite the weekend agreement for JPMorgan Chase & Co. to buy Bear Stearns for a fraction of its value last week, worries that other banks had sizable exposure to troubled credit markets sent global markets tumbling. The uncertainty was evident on Wall Street, where the Dow Jones industrials sank by more than 100 points.
At Bear Stearns' 47-story headquarters in midtown Manhattan, many employees said they still couldn't believe that the nation's fifth-largest investment bank is -- essentially -- out of business. Employees said there was no meeting to inform employees about what was happening.
"It's my first job out of school. I thought it was a big company -- it would be good experience," said Ki Byung, who works for a division of Bear Stearns. "Now after a couple of months something like this happens."
A complete collapse of Bear Stearns might have crushed the already-dwindling confidence in the global financial system, which has frozen up after last year's troubles in the subprime mortgage market.
Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse. But the fact that a major investment bank could reach the verge of buckling -- and be sold at such a discount -- sent dismay through Wall Street and beyond.
"One reaction is shock that a company that reaffirmed its book value at around $84 on Wednesday can be worth $2 per share four days later on Sunday," said Deutsche Bank analyst Mike Mayo.
With Bear Stearns seemingly gone, investors pondered who might be next. Lehman Brothers Holding Inc. stock fell more than 34 percent Monday, following a 15 percent drop on Friday amid concerns it might be facing similar liquidity issues. Lehman Chief Executive Richard Fuld denied Monday that the firm was having such problems.
Bear Stearns shares fell $26.32, or 87.7 percent, to $3.68 -- above the shockingly low price of $2 per share that JPMorgan Chase is paying -- while JPMorgan rose $3.03, or 8.3 percent, to $39.57. UBS AG, hit hard by the same type of write-downs for mortgages that felled Bear Stearns, dropped nearly 12 percent in Zurich.
JPMorgan announced Sunday night that it would acquire Bear Stearns for $236.2 million in a deal that was fast-tracked by the federal government to avoid a bankruptcy. The price represents roughly 1 percent of what the investment bank was worth just 16 days ago.
The Federal Reserve and the U.S. government swiftly approved the all-stock buyout to complete the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.
JPMorgan said it will guarantee all business -- such as trading and investment banking -- until Bear Stearns' shareholders approve the deal, expected to be completed during the second quarter. The acquisition includes Bear Stearns' headquarters, which as one of the world's tallest buildings could fetch more than $1 billion in a sale.
JPMorgan Chief Financial Officer Michael Cavanagh did not say what would happen to Bear Stearns' 14,000 employees worldwide, or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns' prime brokerage business, which completes trades for big investors such as hedge funds.
Bernanke May Cut Benchmark Rate by Most Since Volcker
Federal Reserve Chairman Ben S. Bernanke may be readying the deepest interest-rate cut in a generation as the central bank struggles to prevent a meltdown in financial markets and a recession.
Traders predict the Federal Open Market Committee, meeting today in Washington, will lower the overnight lending rate by a full percentage point or more, based on futures prices in Chicago. That would be the biggest reduction since 1984, when Paul Volcker led the central bank, and would bring the benchmark rate down to 2 percent.
The Fed took emergency steps over the weekend to stave off a financial panic, lowering its rate on direct loans to banks and becoming lender of last resort for Wall Street's biggest dealers in government bonds.
Traders predict the Federal Open Market Committee, meeting today in Washington, will lower the overnight lending rate by a full percentage point or more, based on futures prices in Chicago. That would be the biggest reduction since 1984, when Paul Volcker led the central bank, and would bring the benchmark rate down to 2 percent.
The Fed took emergency steps over the weekend to stave off a financial panic, lowering its rate on direct loans to banks and becoming lender of last resort for Wall Street's biggest dealers in government bonds.
MARKET OUTLOOK
GLOBAL MARKET IS MIXED. YESTERDAY ACCROSS THE BOARD WE SAW HEAVY SELLING,FII TURNED NET SELLER THROUGH OUT THE MONTH,SHORT POSITION IS BUILDING UP IN EVERY SECTOR.LEVEL TO BE WATCH OUT FOR NIFTY IS 4450-4500-4550-4600.IF NIFTY TOUCH 4600 AND ABOVE THEN CAN ASSUME LONG POSITION OTHER WISE FROM 4500 LEVEL LONG CAN ASSUME WITH A FINAL S L OF 4450 FOR ALL LONG.SECTOR COULD BE WATCH OUT FOR THE DAY INFRA&OIL GAS FOR LONG AND METAL FOR SHORT.
HAVE A NICE TRADING DAY
HAVE A NICE TRADING DAY
Monday, March 17, 2008
JPMorgan Chase buys Bear Stearns for about $2/sh
JPMorgan Chase has announced it is acquiring Bear Stearns for about USD 2 a share in stock.
JPMorgan has said that they will ensure that the stock trades till the deal is completed.
On Friday Bear Stearns had received emergency funding from JPMorgan Chase to stave off liquidity problems arising from the credit crisis.
JPMorgan Chase, in association with the Federal Reserve Bank of New York, will provide a secured loan facility for an initial period of up to 28 days, allowing Bear Stearns to access liquidity as needed.
Bear Stearns also said it is talking with JPMorgan Chase regarding permanent financing or other alternatives. The Board of the Federal Reserve has approved the proposal for such a bailout.
The Bear Stearns stock plunged almost 50 percent after the news of the financing came in.
JPMorgan has said that they will ensure that the stock trades till the deal is completed.
On Friday Bear Stearns had received emergency funding from JPMorgan Chase to stave off liquidity problems arising from the credit crisis.
JPMorgan Chase, in association with the Federal Reserve Bank of New York, will provide a secured loan facility for an initial period of up to 28 days, allowing Bear Stearns to access liquidity as needed.
Bear Stearns also said it is talking with JPMorgan Chase regarding permanent financing or other alternatives. The Board of the Federal Reserve has approved the proposal for such a bailout.
The Bear Stearns stock plunged almost 50 percent after the news of the financing came in.
Fed cuts discount rate by 25 bps to 3.25%
The U.S. Federal Reserve has cut the discount rate by 25 basis points from 3.5 percent to 3.25 percent effective immediately.
The Central Bank also extended the maximum term of discount-window loans to 90 days from 30 days. The Fed, in a statement said that the moves were designed to bolster market liquidity and promote orderly market functioning.
US stock Index Futures rose after the unexpected rate cut, on the back of the news the US dollar edged higher against the Yen.
The Central Bank also extended the maximum term of discount-window loans to 90 days from 30 days. The Fed, in a statement said that the moves were designed to bolster market liquidity and promote orderly market functioning.
US stock Index Futures rose after the unexpected rate cut, on the back of the news the US dollar edged higher against the Yen.
MARKET OUTLOOK
GLOBAL MARKET IS WEAK TODAY.GLOD IS IN ALL TIME HIGH.FED CUT DISCOUNT RATE BY 25 BPS TO EASE LIQUIDITY.INDIA WILL FOLLOW THW THE PHASE. LEVEL OF NIFTY IS 4450-4500-4600-4700,MAEKET SL WOULD BE FOR ALL LONG IS 4450,BELOW THIS MARKET WOULD BLEED.IF MARKET SUSTAIN ABOVE 4500 OIL& GAS AND PSU BANK CAN ASSUME LONG SIDE AND IF MARKET TOUCH 4700 LEVEL WE CAN ASSUME SHORT IN POWER AND CONSTRUCTION STOCK.
HAVE NICE TRADING DAY
HAVE NICE TRADING DAY
Saturday, March 15, 2008
Farm loan waiver due to tax buoyancy, fiscal space: FM
Finance Minister P Chidambaram said average growth in the last four years of the UPA government stood at 8.8%, reports CNBC-TV18. He was addressing Parliament on funding the debt relief package for farmers.
It will take four Budgets and possibly a future government to fund the UPA government's Rs 60,000 crore debt to farmers. The Finance Minister told the nation how he plans to fund the farm loan waiver. The Finance Minister told Parliament that the government will compensate scheduled commercial banks, regional rural banks and co-operative credit institutions fully over a period of four years starting July 2008.
“Immediately after June 30, 2008, as soon as the first supplementary for 2008-09 is approved by Parliament, Rs 25,000 crore will be released to the institutions. In Budget 2009-10, Rs 15,000 crore will be provided; in Budget 2010-11, Rs 12,000 crore will be provided; in Budget 2011-12, Rs 8,000 crore will be provided. In phasing out the package across institutions in course of time, we have been and will be mindful of the need to ensure that all institutions have ample liquidity to meet fresh credit demand,” said P Chidambaram.
The FM is confident the liberal farm loan waiver package will have a negligible impact on the fiscal deficit. It will be an additional burden of less than 0.25% of GDP every year.
“Since I have been able to find Rs 10,000 crore to establish the fund in year zero, this will reduce the burden in future years. Given the potential for the rapid growth of the economy, the burden in any single year will not be more than 0.25% of the GDP. Actually it will be 0.2% of GDP only in ‘08-‘09 and will decline in every successive year and will only be 0.1% in 2011-12,” he added.
Where will the money come from? P Chidambaram believes robust earnings will bail him out. If they don't, he has three other options.
“I am therefore very confident that we can finance a burden of this order as part of the regular Budget exercise. The source of fund to the government are tax revenues; non tax revenues, as in dividends, interests, royalties and fees; non-debt capital receipts i.e. recovery of loans in advances, premium on the sale of sequestered assets and initial listing of public sector enterprises and additional borrowing if necessary,” he stated.
The Finance Minister said the tax to GDP ratio is seen at 12.5% by FY08-end and 13% for FY09. "FY09 fiscal deficit seen at 2.5% of GDP. This deficit includes bonds issues seen at 3.6%."
The government is meeting its indirect tax mop-up target year after year, Chidambaram said. "The government far exceeded its direct tax mop-up target. A higher growth and tax buoyancy gives headroom to spend. It is able to waive farm loan on tax buoyancy, fiscal space."
Provisional estimate of farm loan waiver seen at Rs 60,304 crore, the FM said. “A relief of Rs 50, 524 crore is to be offered to small and marginal farmers. 35% of farm loan borrowers are from commercial banks. The whole farm loan waiver process is to be completed by June 30. The disbursement process will be spread over three agricultural years and four financial years.”
Relief worth Rs 9,790 crore will be provided to other farmers, he said. “The government plans to give Rs 25,000 crore debt waiver post June, Rs 15,000 crore in FY10, Rs 12,000 crore in FY11, and Rs 8,000 crore in FY12. It plans to reimburse Rs 25,000 crore to banks between July 1, 2008 and June 30, 2009.”
According to Chidambaram, the government is in a position to increase education allocation by 20% every year. “More money is being given to states for spending on health. The government plans to roll out the National Skill Development Plan by March 31. It plans to rapidly scale up the national skill plan from April.”
The Finance Minister said he is concerned over farmers in moneylenders’ clutches. “There are socio-economic inhibitions in identifying money lenders.”
FY08 food grain offtake under PDS seen at 31.3 million tonne, he added.
It will take four Budgets and possibly a future government to fund the UPA government's Rs 60,000 crore debt to farmers. The Finance Minister told the nation how he plans to fund the farm loan waiver. The Finance Minister told Parliament that the government will compensate scheduled commercial banks, regional rural banks and co-operative credit institutions fully over a period of four years starting July 2008.
“Immediately after June 30, 2008, as soon as the first supplementary for 2008-09 is approved by Parliament, Rs 25,000 crore will be released to the institutions. In Budget 2009-10, Rs 15,000 crore will be provided; in Budget 2010-11, Rs 12,000 crore will be provided; in Budget 2011-12, Rs 8,000 crore will be provided. In phasing out the package across institutions in course of time, we have been and will be mindful of the need to ensure that all institutions have ample liquidity to meet fresh credit demand,” said P Chidambaram.
The FM is confident the liberal farm loan waiver package will have a negligible impact on the fiscal deficit. It will be an additional burden of less than 0.25% of GDP every year.
“Since I have been able to find Rs 10,000 crore to establish the fund in year zero, this will reduce the burden in future years. Given the potential for the rapid growth of the economy, the burden in any single year will not be more than 0.25% of the GDP. Actually it will be 0.2% of GDP only in ‘08-‘09 and will decline in every successive year and will only be 0.1% in 2011-12,” he added.
Where will the money come from? P Chidambaram believes robust earnings will bail him out. If they don't, he has three other options.
“I am therefore very confident that we can finance a burden of this order as part of the regular Budget exercise. The source of fund to the government are tax revenues; non tax revenues, as in dividends, interests, royalties and fees; non-debt capital receipts i.e. recovery of loans in advances, premium on the sale of sequestered assets and initial listing of public sector enterprises and additional borrowing if necessary,” he stated.
The Finance Minister said the tax to GDP ratio is seen at 12.5% by FY08-end and 13% for FY09. "FY09 fiscal deficit seen at 2.5% of GDP. This deficit includes bonds issues seen at 3.6%."
The government is meeting its indirect tax mop-up target year after year, Chidambaram said. "The government far exceeded its direct tax mop-up target. A higher growth and tax buoyancy gives headroom to spend. It is able to waive farm loan on tax buoyancy, fiscal space."
Provisional estimate of farm loan waiver seen at Rs 60,304 crore, the FM said. “A relief of Rs 50, 524 crore is to be offered to small and marginal farmers. 35% of farm loan borrowers are from commercial banks. The whole farm loan waiver process is to be completed by June 30. The disbursement process will be spread over three agricultural years and four financial years.”
Relief worth Rs 9,790 crore will be provided to other farmers, he said. “The government plans to give Rs 25,000 crore debt waiver post June, Rs 15,000 crore in FY10, Rs 12,000 crore in FY11, and Rs 8,000 crore in FY12. It plans to reimburse Rs 25,000 crore to banks between July 1, 2008 and June 30, 2009.”
According to Chidambaram, the government is in a position to increase education allocation by 20% every year. “More money is being given to states for spending on health. The government plans to roll out the National Skill Development Plan by March 31. It plans to rapidly scale up the national skill plan from April.”
The Finance Minister said he is concerned over farmers in moneylenders’ clutches. “There are socio-economic inhibitions in identifying money lenders.”
FY08 food grain offtake under PDS seen at 31.3 million tonne, he added.
Friday, March 14, 2008
Jindal Stainless to enter power, logistics sectors
India's largest stainless steel producer, Jindal Stainless Ltd, plans to set up an independent power project in Orissa, a senior official said on Friday.
The company, which is setting up a separate firm for an infrastructure foray, would start by entering the logistics sector with its own trucks, Arvind Parekh, director for strategy and business development told Reuters.
"We will kick off with logistics first and then we will enter the power sector," Parekh said.
The new firm, Jindal Infrastructure & Utility Ltd, will also provide stainless steel designs for projects such as airport upgradation, he said. The parent would invest up to 5 billion rupees in a phased manner for setting up the firm, Parekh said.
The company, which is setting up a separate firm for an infrastructure foray, would start by entering the logistics sector with its own trucks, Arvind Parekh, director for strategy and business development told Reuters.
"We will kick off with logistics first and then we will enter the power sector," Parekh said.
The new firm, Jindal Infrastructure & Utility Ltd, will also provide stainless steel designs for projects such as airport upgradation, he said. The parent would invest up to 5 billion rupees in a phased manner for setting up the firm, Parekh said.
Microsoft and Yahoo met to discuss merger - WSJ
Microsoft Corp and Yahoo Inc met on Monday to discuss Microsoft's takeover offer for the Internet company, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The meeting was said to be the first since Microsoft made its unsolicited offer for Yahoo, worth nearly $42 billion, on Jan. 31. Yahoo rejected the offer as inadequate last month.
The Journal said the meeting wasn't a negotiation and that no bankers were present.
The session was intended to allow Microsoft to present its vision of a combined company, and Yahoo executives mostly listened, the Journal quoted one of the sources as saying.
Microsoft and Yahoo spokesmen declined to comment.
The meeting was said to be the first since Microsoft made its unsolicited offer for Yahoo, worth nearly $42 billion, on Jan. 31. Yahoo rejected the offer as inadequate last month.
The Journal said the meeting wasn't a negotiation and that no bankers were present.
The session was intended to allow Microsoft to present its vision of a combined company, and Yahoo executives mostly listened, the Journal quoted one of the sources as saying.
Microsoft and Yahoo spokesmen declined to comment.
Annual inflation at 5.11 pct on March 1
India's wholesale price index rose 5.11 percent in the 12 months to March 1, higher than the previous week's rise of 5.02 percent, government data showed on Friday.
The rate was higher than a median forecast of 4.97 percent in a Reuters poll of analysts, and the highest since May 26, 2007, when inflation was 5.15 percent.
The annual inflation rate was 6.51 percent during the corresponding week of the previous year.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.
The rate was higher than a median forecast of 4.97 percent in a Reuters poll of analysts, and the highest since May 26, 2007, when inflation was 5.15 percent.
The annual inflation rate was 6.51 percent during the corresponding week of the previous year.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.
MARKET UPDATES
BAJAJ AUTO (BAL)DEMERGED IN TO TWO ENTITY BAJAJAUTO HOLDING LTD(BHIL) BAJAJ FINANCIAL SERVICE(BFS) IN TO 1:1 RATIO.BAL WILL RENAME AS A BAJAJ AUTO HOLDING LTS(BHIL).
POST DEMERGER EQUITY CALCULATION AFTER I: 1 CALCULATION WOULD BE BAL 101.18 CR (FACE VALUE RS 10),BHIL 144.48(101.18+43.5)CR (FACE VALUE RS 10),BFS 72.34(21.75+50.55(101.18/2))CR(FACE VALUE OF RS 5).
BAJAJ AUTO WILL BE IN TWO WHEELER BUSINESS AND BFS WHICH WILL BE LISTED LATER WILL LOOK AFTER WIND POWER CONSUMER FINANCE,AND INSURANCE,AND FINANCIAL SERVICE BUSINESS.
The Centre on Thursday approved the long-delayed mining policy that is expected to increase the investments by foreign and domestic com- panies in the mining sector. Soon after the Union Cabinet meeting chaired by Prime Minister Manmohan Singh, a government spokesperson said: "The implementation of the new National Mineral Policy 2008, is likely to attract FDI to the tune of $250 million per annum in the sector in five years."
Pyramid Saimira Theatre Ltd has informed the BSE that it has entered into a strategic partnership with UK-based Spize TV for content, new channels and services.
SpizeTV is a pan-European direct-to-home (DTH) TV platform offering Asian and niche content to viewers in Europe.
The Nikkei was down 1.5 percent at 12,249.99. Analysts said the reason for this fall was the dollar hitting a new low against the yen.
Light sweet crude for April delivery rose 41 cents to settle at a record USD 110.33 a barrel on the New York Mercantile Exchange (NYMEX).
The Railways are planning to raise Rs 1,500 crore through initial public offering(IPO) of its three profit-making companies; Ircon, IRCTC and RailTel. The government has already decided to dilute its 28% equity stake in one of the Railways' wholly owned subsi- diary RITES through an IPO.
As part of its ambitious plan to become a 50,000-MW company by 2012, state-run NTPC Ltd on Thursday said it will invest Rs 13,000 crore for adding 2,700 MW capacity during the next financial year.
Inflation for week ended March 1 has come out at 5.11% versus 5.02% the previous week...
Economy News
RBI absorbs Rs 303.35 bn via 1- day reverse repo auction
Call rates remain in comfort zone
Six projects get nod under Industrial infrastructure upgradation scheme
Rupee remains steady at 40.44/USD
Forex earnings from tourism decline 25.3%
Forex derivative losses likely to touch USD 3-5 bn
China to maintain steady growth in exports
The Planning Commission has projected a tentative outlay of Rs 123.77 billion for the Ministry for the 11th Plan period. The Ministry has proposed a few schemes for the 11th Plan, which are yet to be approved by the Cabinet.
Over half a trillion dollars have been wiped off from the wealth of investors in Indian stocks since the beginning of 2008 as an unending turbulence on Thursday sent the market to its lowest level in about six-and-a-half months.
The total loss of about Rs 20,50,000 crore (506 billion dollars) include over 300 billion dollars of promoters of the listed Companies, while public shareholders have lost close to 200 billion dollars.
POST DEMERGER EQUITY CALCULATION AFTER I: 1 CALCULATION WOULD BE BAL 101.18 CR (FACE VALUE RS 10),BHIL 144.48(101.18+43.5)CR (FACE VALUE RS 10),BFS 72.34(21.75+50.55(101.18/2))CR(FACE VALUE OF RS 5).
BAJAJ AUTO WILL BE IN TWO WHEELER BUSINESS AND BFS WHICH WILL BE LISTED LATER WILL LOOK AFTER WIND POWER CONSUMER FINANCE,AND INSURANCE,AND FINANCIAL SERVICE BUSINESS.
The Centre on Thursday approved the long-delayed mining policy that is expected to increase the investments by foreign and domestic com- panies in the mining sector. Soon after the Union Cabinet meeting chaired by Prime Minister Manmohan Singh, a government spokesperson said: "The implementation of the new National Mineral Policy 2008, is likely to attract FDI to the tune of $250 million per annum in the sector in five years."
Pyramid Saimira Theatre Ltd has informed the BSE that it has entered into a strategic partnership with UK-based Spize TV for content, new channels and services.
SpizeTV is a pan-European direct-to-home (DTH) TV platform offering Asian and niche content to viewers in Europe.
The Nikkei was down 1.5 percent at 12,249.99. Analysts said the reason for this fall was the dollar hitting a new low against the yen.
Light sweet crude for April delivery rose 41 cents to settle at a record USD 110.33 a barrel on the New York Mercantile Exchange (NYMEX).
The Railways are planning to raise Rs 1,500 crore through initial public offering(IPO) of its three profit-making companies; Ircon, IRCTC and RailTel. The government has already decided to dilute its 28% equity stake in one of the Railways' wholly owned subsi- diary RITES through an IPO.
As part of its ambitious plan to become a 50,000-MW company by 2012, state-run NTPC Ltd on Thursday said it will invest Rs 13,000 crore for adding 2,700 MW capacity during the next financial year.
Inflation for week ended March 1 has come out at 5.11% versus 5.02% the previous week...
Economy News
RBI absorbs Rs 303.35 bn via 1- day reverse repo auction
Call rates remain in comfort zone
Six projects get nod under Industrial infrastructure upgradation scheme
Rupee remains steady at 40.44/USD
Forex earnings from tourism decline 25.3%
Forex derivative losses likely to touch USD 3-5 bn
China to maintain steady growth in exports
The Planning Commission has projected a tentative outlay of Rs 123.77 billion for the Ministry for the 11th Plan period. The Ministry has proposed a few schemes for the 11th Plan, which are yet to be approved by the Cabinet.
Over half a trillion dollars have been wiped off from the wealth of investors in Indian stocks since the beginning of 2008 as an unending turbulence on Thursday sent the market to its lowest level in about six-and-a-half months.
The total loss of about Rs 20,50,000 crore (506 billion dollars) include over 300 billion dollars of promoters of the listed Companies, while public shareholders have lost close to 200 billion dollars.
TODAY'S MARKET
MARKET WILL OPEN IN POSITIVE TERITORY BECAUSE GLOBAL MARKETS ARE IN POSITIVE NOTE.
CRUDE OIL CORRECT A BIT FROM $111.
NIFTY LEVEL FOR THE DAY 4570-4620-4700-4750.
BUY FROM LOWER LEVEL.. METAL WAS BEATEN UP BADLY,METAL COULD RECOVER FASTLY DUE TO SHORT COVERING.. IF MARKET TURNED TO POSITIVE NOTE.
IN AUTO SPACE MARUTI LOOKS POSITIVE.
IN SHORT SIDE BANKING AND FINANCIAL SERVICE AND SATYAM LOOKS NEGATIVE IF MARKET DO NOT TAKE SUPPORT AT DOWN LEVEL.
HAPPY TRADING DAY !!
-BY MR. SAM
CRUDE OIL CORRECT A BIT FROM $111.
NIFTY LEVEL FOR THE DAY 4570-4620-4700-4750.
BUY FROM LOWER LEVEL.. METAL WAS BEATEN UP BADLY,METAL COULD RECOVER FASTLY DUE TO SHORT COVERING.. IF MARKET TURNED TO POSITIVE NOTE.
IN AUTO SPACE MARUTI LOOKS POSITIVE.
IN SHORT SIDE BANKING AND FINANCIAL SERVICE AND SATYAM LOOKS NEGATIVE IF MARKET DO NOT TAKE SUPPORT AT DOWN LEVEL.
HAPPY TRADING DAY !!
-BY MR. SAM
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