Market News as on 22nd Feb

MARKET
According to Investment Guru, Marc Faber, the emerging markets may get oversold in the next six months and then see a rally. New highs are pretty much out of question, he told CNBC-TV18. Some EMs can still drop 30-40% from the current levels, he added.
Precious metals are still relatively attractive, Faber said. The Sensex may test 14,000 before slipping to 12,000 levels he said.
COMPANIES ANNOUNCEMENT
GlaxoSmithKline Pharmaceuticals fixes Book Closure for Dividend
GlaxoSmithKline Pharmaceuticals Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from April 04, 2008 to April 21, 2008 (both days inclusive) for the purpose of payment of dividend.

Medi Caps - Updates
The Company has entered into a Joint venture arrangement with M/s. Mission Pharmaceuticals for setting up a plant at SEZ in Pithampur (Dist DHAR) for manufacturing softgel Capsules with the total proposed investment of Rs 20 crores and out of which the Company has already contributed total Rs 55 lacs in the current financial year.

Mascon Global - Updates
With reference to the news item appearing in a leading financial daily titled "Mascon may buy Sam Pitroda's C-SAM by June", Mascon Global Ltd has informed BSE that the Wholly Owned Subsidiary (WOS) of the Company is trying to have a relationship with C-SAM INC for IP relationship. The Company will furnish necessary details in due course.

Kaashyap Technologies - Outcome of Board Meeting
Kaashyap Technologies Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 22, 2008, inter alia, has discussed the following:

1. Acquisition of Logic Bytes Inc.,The Board considered the report submitted by the management and approved, the same. As per the report submitted by the Management, Logic Bytes Inc., is also in possession of Health Care Software and the take over will enable the Company to make foray into the Health Care Business in the near future. The Board further authorised the Chairman or any one Director to negotiate and finalize the consideration not exceeding USD 4 million. The Chairman or any one Director has been authorised to sign the necessary documents to complete the transactions.

2. New VentureIn order to diversify into the business of Unique Content Transformation providing Newspaper Publishers, Broadcasters, Content Aggregators, Media Monitoring Companies, Telecos, STM Publishers and Government Organizations with Real Time and Project based BPO / CPO / KPO Services the Board has formed a committee to look into the business. The committee has been requested to submit a detailed report on the potential market along with other details like competitors etc.

3. IP TVThe Board also considered the option of its venture into IP TV business at length.The Board decided to take a decision on the Agenda 2 and Agenda 3 at the Board meeting slated for February 29th for issue of Bonus / dividend / bonus warrants / rights to the shareholders.

HDFC Bank - Board Meeting on Feb 23, 2008
HDFC Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank will be held on February 23, 2008, to consider, in-principle, a possible merger between Centurion Bank of Punjab Ltd and HDFC Bank Ltd.

Power Grid Corporation Board to consider interim dividend
Power Grid Corporation of India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on March 05, 2008, inter alia, to consider, declaration of Interim Dividend for the Financial Year 2007-08.Further the Company has informed that, March 11, 2008 has been fixed as the Record Date for the purpose of payment of interim dividend, if declared.

Bank of Baroda - Notice of Strike on Feb 25 & 26, 2008
Bank of Baroda has informed BSE that the Bank is informed by Indian Banks' Association, that United Forum of Bank Unions, which is a joint forum of five industry-level Workmen Unions (viz. AIBEA, NCBE, BEFI, INBEF and NOBW) and four Officers' Association (viz. AIBOC, AIBOA,INBOC and NOBO) has served a notice of strike informing their decision to go on a nation-wide strike on February 25 & 26, 2008.In view of the above, the Bank has taken necessary steps in terms of the existing guidelines for smooth functioning of Bank's branches / offices on the days of strike, in the event the strike materializes on February 25 & 26, 2008.

JSW Steel - Updates on Scheme of Amalgamation
JSW Steel Ltd has informed BSE that the Hon'ble High Court of Judicature at Mumbai has sanctioned the Scheme of Amalgamation of Southern Iron & Steel Co. Ltd with the Company. The Order sanctioning the Scheme was pronounced in the Court on February 22, 2008.The written order sanctioning the Scheme is expected to be received shortly. Once the order of the High Court is filed with Registrar of Companies, Maharashtra, the scheme will become effective.

Mercator Lines - Updates
Mercator Lines Ltd has informed BSE that the Company on February 22, 2008 has sold and delivered one of its 1986 built Aframax Tanker of DWT 100488.


NEWS

• Asian stocks fell, with the region's benchmark set for its seventh weekly drop this year, on renewed concern the U.S. will enter a recession.
• Hexaware has declared its fourth quaret results. It Q4 consolidated net loss stood at Rs 81 crore. Its consolidated net sales at Rs 259.18 crore
• The Centre on Thursday approved a fresh Rs 500 crore assistance to help exporters make up for the loss in orders due to strengthening of the rupee.
• After shunning Bengal a year ago following the trouble over land acquisition, the Bharat Forge group is back in the state with a bundle of projects.
  Group company Kalyani Steels Ltd proposes to set up a one-million-tonne speciality steel plant and a 500-megawatt captive power unit at an investment of Rs 6,500 crore.
• IT firm Hexaware Technologies has taken a Rs 103 crore hit in the fourth quarter ended December 2007 because of unwinding of the exotic forex contracts it had entered into in currencies other than the rupee. This led to a net loss of Rs 81 crore for the period.
• Reliance Communications Ltd. (RCL) on Thursday acquired Uganda based Anupam Global Soft (U) Ltd., a company holding public infrastructure provider licence (PIPL) and public service provider licence (PSPL), issued by the Uganda Communications Commission.
• Realty major, Housing Development (Q, N,C,F)* & Infrastructure (HDIL) sold a commercial land in Andheri (in the western suburb of Mumbai) to Mack Star Marketing, a private company, for around Rs 9 billion, reports Business

READ IT

We would have loved to say, Thank God, its Friday and relax for the weekend. But, speculation on Reliance Power’s bonus ratio, which will be decided on Sunday will hold center-stage. Buzz is that some short covering could take place and the Reliance Power stock may end above its issue price today.

But global markets are not very supportive for the time being. We expect a weak opening, unless Asian markets stage a rebound before the opening bell. IT stocks may remain in the limelight in the near term in case the rupee remains weak. Watch out for Centurion Bank of Punjab amid reports that it will be acquired by HDFC Bank, though both the companies have yet not confirmed any merger talks.

Shipping and auto parts companies may also be in action amid reports of some favourable proposals in store in the upcoming budget for the two sectors. Jai Corp. and Infotech Enterprises may also attract some attention on positive news flow. Bank of Rajasthan could be in action on expectations of a placement at a significant premium.

FIIs were net buyers of Rs2.09bn (provisional) in the cash segment yesterday while local institutions pulled out Rs1.41bn. In the F&O segment, FIIs were net buyers of Rs3.76bn. On Wednesday, they were net buyers of Rs567mn. Mutual Funds were net sellers of Rs1.91bn on the same day.

Crude oil futures dropped for the first time in six days, falling 1.5% to close near the US$98-a-barrel mark, as government data showed that US crude inventories have risen more than expected.

Light, sweet crude for April delivery, the new front-month contract, declined $1.47 to close at $98.23 a barrel in New York. Earlier, it fell to an intraday low of $96.87. Natural gas moved lower despite that its inventories fell.

The Energy Information Administration reported that US crude inventories rose 4.2mn barrels in the week ended Feb. 15, outstripping the increase of 3.2mn barrels that analysts had expected.

Government has convened a meeting of major steel producers next week to sort out issues impeding their mega investment plans in the country.
The Ministry is anticipating investment in the sector to the tune of Rs 2800 billion by 2011-12. Government is expecting the steel production to reach more than 100 million tons by 2011-12.

Foreign Trade Policy : 2004-09

Objective :
The new Foreign Trade Policy (FTP) takes an integrated view of the of the overall development of India’s foreign trade to achieve the following objectives:
1. To double India’s %age share of global merchandise trade to 1.5% by 2009, for which exports from India have to be $ 175 billion by 2009 & annual compounded growth rate required would be 21% (global export growth rate estimate : 4-5%).
2. To act as an effective instrument of economic growth by giving thrust to employment generation, especially in semi-urban and rural areas.
Strategies :
The strategies include:
1. Unshackling of controls -creating an atmosphere of trust and transparency .
2. Simplifying procedures and bringing down transaction costs .
3. Adopting the fundamental principle that duties/levies should not be exported .
4. Identifying and nurturing different special focus areas to facilitate development of India as a global hub for manufacturing, trading and services.

Export promotion schemes
Target Plus : Under the scheme exporters achieving a quantum growth in exports and exceeding the overall normal export target growth target of 16% fixed for 2004-05, would be entitled to duty free credit based on the the incremental exports. For incremental growth of over 20%, 25% and 100%, the duty free credits would be 5%, 10% and 15% of FOB value of incremental exports.
Served from India : For creating ‘Served from India’ brand to be instantly recognized and respected, under this scheme, individual service providers who earn foreign exchange of at least Rs.5 lac and other service providers who earn foreign exchange of at least Rs.10 lac will be eligible for a duty credit entitlement of 10% of total forex earned by them. In case of stand alone restaurants, the entitlement shall be 20% and for hotels, it will be 5%.
EPCG :
a : additional flexibility to fulfil export obligation under EPCG scheme to reduce difficulties of exporters.
b: technological upgradation under EPCG scheme has been facilitated and incentivised.
c : transfer of capital goods to group companies and managed hotels now permitted under EPCG. d: in case of movable capital goods in the service sector, the requirement of installation certificate from Central Excise, has been done away with.
e: export obligation for specified projects shall be calculated based on concessional duty permitted to them, for improvement in viability of the project.
Status Holder Categorization : The new rationalized scheme of categorization of Status Holders as Star Export Houses has been introduced as under: For 1 Star, the required export turnover over 3 years should be : Rs.15 cr, for 2 Star : Rs.100 cr, for 3 Star : Rs.500 cr, for 4 Star : Rs.1500 cr, and 5 Star : Rs.5000 cr The Star Export houses shall be eligible for a no. of privileges such as fast track clearance procedures, exemption from furnishing of bank guarantee, eligibility for consideration under target plus scheme etc. Export Oriented Units: Such units to be exempted from service tax in proportion of exported goods and services. They can retain 100% of export earnings in EEFC accounts. Income tax benefits on plant and machinery shall be extended to DTA units which convert to EOUs. Import of capital goods shall be on self-certification basis for EOU.
Free Trade and Warehousing Zones (FTWZ):
A new scheme to establish FTWHZ has been introduced with a view to create trade related infrastructure to facilitate the import/export of goods/services with freedom to carry out trade transactions in free currencyto make India, a global trading hub. FDI would be allowed up to 100% in such zones. Each Zone would have minimum outlay of Rs.100 cr and 5 lac sq mt. built up area. SEZ benefits would be available to units in such zones. The maximum period for which goods will be allowed to be stored would be 2 years. If importers fail to re-export within this period, they will have to pay customs duties and sell the goods in the domestic market. Customers in India would also be allowed to purchase goods, provided payment is made in convertible foreign currency.
2nd hand Machinery : Import shall be permitted without any age restrictions and minimum depreciated value for plant and machinery to be re-located into India has been reduced from Rs.50 cr to Rs.25 cr.
Service Export Promotion Council : An exclusive council to be set up to map the opportunities for key services in key markets and develop strategic market access programmes in coordination with sectoral players and recognized nodal bodies of the services industry. Procedure simplification and rationalization : All exporters with minimum export turnover of Rs.5 cr and good track record to be exempt from furnishing bank guarantee in any of the schemes. All goods and services exported, including those from DTA units, shall be exempted from service tax. Validity of all licences/entitlements issued under various schemes, has been increased to a uniform 24 months.

Spending on apparel hits global benchmark

Spending on apparel in India has grown over the last five years, touching the global benchmark of 5 per cent of the total income, says consultancy firm Mckinsey.
However, apparel is seen struggling for a larger chunk of the consumer's wallet share, driven by other emerging categories such as electronics and travel.
Corporate honchos, who recently met in Mumbai for the India Fashion Forum, dwelled on the ways to encourage consumer spend on apparel and infuse more fashion quotient through innovation.
Partnering with fashion designers or exploring strategic merchandising options were considered as possible avenues to boost the average ticket price in apparel.
Kishore Biyani, CEO Future Group, said that the mobile industry is taking away part of the consumer spending on fashion, thus changing the popular dictum to 'Roti Kapda Makan Aur Mobile'.
Citing the example of the Rs 40,000 crore mobile handset industry, he said, "Innovation is going to be the biggest consumption driver and India needs successful store and fashion brands to drive this growth."
The average replacement cycle for cellphones has shrunk to 18 months with almost two thirds of all mobiles bought for their style statement.
D Shivkumar, vice president and managing director, Nokia India, said, "Mobile manufacturers have innovated by introducing new features such as torches, cameras and radios. Companies need to change before the consumer and Indianise features for durable conversions, especially at the bottom of the market."
Biyani emphasised that conventional events such as Diwali are losing their relevance and there is a need now to create new buying occasions as consumers are finding new ways of consumption such as travel, healthcare, education and electronics.
For instance, this year Big Bazaar beat its internal target by selling 1,28,000 jeans as against 38,000 cellphones during its Republic Day offer.
According to a Mckinsey study, inspite of the low spending ability on apparel, consumers are open to credit, but are restrained by credit availability.
Ireena Vittal, head retail practices, McKinsey said, "Forty five per cent of consumers are below 25 years and are looking for credit availability, while most credit finance schemes are targeted towards salaried customers."
The window of opportunity for brand owners is to partner with fashion designers or bollywood and television, which are the biggest influences for buying decisions.
Last year, Shopper's Stop entered into a merchandising arrangement with Farah Khan's Om Shanti Om for its four in-house brands Mario Zegnottio, Haute Curry, Vettorio Fratini and Push & Shove.
Asserting that fashion brands need to shun inhibitions about unprofessionalism in Bollywood, B S Nagesh, managing director Shopper's Stop said, "The company generated Rs 6 crore through merchandise sale and another Rs 10 crore through PR. We could drive better margins since the merchandise arrangement was for private labels."

Market News as on 22nd Feb

New mining policy in 2 months
MUMBAI: The govt plans to have a new mining policy in two months, T Subbarami Reddy, the country's junior minister for mines told reporters at an industry conference on Friday. Reddy also said that royalty rates on mining of iron ore and other ores would be changed.

Railway Budget 2008

NEW DELHI: Setting the tone for an ‘Election Budget’, railway minister Lalu Prasad is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods. Since this will be the last full-fledged Railway Budget before the general elections, scheduled for next year, the railway minister is expected to go all out with populist measures, ministry sources said. According to officials at the Rail Bhawan, there will be no deviation from the trend of not hiking freight and passenger rates as the Railways is right on track to meet the twin objectives of reducing operational cost and increasing revenues. Between April 2007 and January 2008, earnings from freight and passenger traffic have grown 11% and 14%, respectively, giving enough cushion for Mr Lalu Prasad to cut rates. The turnaround time of most trains has been reduced by using the same coaches in more than one sector. The strategy has helped the Railways increase profit without hiking passenger fares or freight rates. A possible cut in passenger fares is likely to cover all categories while short-distance travel charges may see some rationalisation, the sources said.

Market News on 21 Feb' 08

WORLD MARKET

Asian markets trading firm; Hang Seng up 333 points

Asian markets were trading firm. Hong Kong's HangSeng rose 1.41% or 333.02 points at 23,923.60.
Japan's Nikkei gained 2.12% or 282.14 points at 13,592.51.
Taiwan's Taiwan Weighted shot up 1.73% or 136.71 points at 8,031.18.
Singapore's Straits Times advanced 1.24% or 37.59 points at 3,064.42.
South Korea's Seoul Composite was up 0.92% or 15.47 points at 1,703.38.

Oil Jumps Past $101 a Barrel on View That the Fed, Seeing Weaker Growth, Will Slash Rates

Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for economic growth this year, convincing energy investors that the central bank will slash interest rates further. At the pump, meanwhile, gas prices rose another 2 cents overnight.
The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 percent and 2 percent this year, down from a previous forecast for GDP growth of between 1.8 percent and 2.5 percent.
Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
Two new economic reports Wednesday suggested the economy is cooling. The Labor Department said its Consumer Price Index, a measure of inflation, rose by 0.4 percent last month, more than economists expected. The Commerce Department, meanwhile, said construction of new homes and apartments rose by 0.8 percent in January, but that applications for building permits, an indicator of future activity, fell by 3 percent.
The reports come a week after the Energy Department, the Organization of Petroleum Exporting Countries and the International Energy Agency all lowered their oil demand growth forecasts for this year.

Japan's Export Growth Unexpectedly Quickens to 7.7%

Japan's export growth unexpectedly quickened in January, as rising demand for cars and steel from China and Russia made up for falling U.S. sales. Exports, the engine that drove almost half of the economy's expansion last quarter, rose 7.7 percent, from December's 6.9 percent gain, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for a 6.6 percent increase. Shipments to Asia and Europe rose to records for the month, as growing consumer classes in China, India and Russia create new customers for exporters including Mitsubishi Motors Corp. and Matsushita Electric Industrial Co. Exports to the U.S. fell for a fifth month amid the worst housing slump in 26 years.

Dubai International to invest $5 bn in India, China, Japan

INDIAN MARKET

• It’s well known that Anil Ambani’s Reliance Power lost 17% to close on Rs 372.50 against the issue price of Rs 450 on its debut on the stock exchanges. But what’s not known is that a handful of Mauritius-based foreign institutional investors (FIIs) and a domestic bank offloaded their entire or almost entire shareholding in the company within minutes of the opening bell.
• Reliance Communications on Wednesday said it is consolidating its international businesses under Reliance Globalcom, the newly incorporated umbrella brand for all its overseas businesses.
• The battle for the Mumbai Trans Harbour Link climaxed on Wednesday with Anil Ambani pipping his sibling Mukesh to bag the project.
  A consortium led by Anil won the contract for the Rs4,000 crore project with a promise to build it in four years and recover the costs in five years, 11 months and one day, a ‘concession period’ of nine years, 11 months, one day.
• India's fifth-largest IT company by revenues, HCL Technologies, on Wednesday announced the acquisition of US-based software product company, Capital Stream, for $40 million, in an all-cash deal.
• Blackstone has acquired 10.4% stake in logistics major Allcargo Global Logistics (AGL) for Rs 242 crore.
• Franklin Resources Inc has acquired 49 per cent stake in Vietcombank Fund Management, an investment management firm currently focused on private equity investment in Vietnam.
• Sun Pharmaceutical Industries, India’s biggest drugmaker by market value, has acquired 9.4 per cent stake in Israel’s Taro Pharmaceutical Industries for $38 million, raising its total holding to 34.4 per cent.
• Commercial production of Tata Motors’ “Nano” automobile is expected to begin in October to be preceded by trial production of the car in June-July, Ravi Kant, Managing Director, Tata Motors, said after a visit to the project site at Singur in West Bengal’s Hooghly district on Wednesday.
• Tata Consultancy Services (TCS) has announced a $120 million contract from automotive major Chrysler for application, maintenance and support services.
  The IT services will be in the area of sales and marketing and shared services for Chrysler.
• Reliance Power today announced that the company will allot the proposed bonus shares only to investors who will make the balance payment before February 26.
  According to a release issued by the company to the BSE today, the bonus shares of investors who do not pay the call money by the due date will be kept in abeyance.

BUDGET

Chidambaram may announce cut in excise duty rates across the board from 16 per cent to 14 per cent or sector-specific duty cuts in the budget .
Sectors like pharmaceutical, textile machinery, food processing, paper and auto including two wheelers, tyres are expected to get relief in excise duty.