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Saturday, October 13, 2007
Gitanjali Gems may acquire another US company
Gitanjali Gems is betting big on the US retail market. After taking over Samuels Jewellers in December 2006, the firm is now close to acquiring another leading jewellery retailer for around $100 million. Sources close to the deal said the due diligence process is almost complete, and the company is going ahead with the transaction.
"It's one of the leading jewellery retailers having over 100 outlets across the country. The deal will be completed in two months," said sources. The company is being advised by Keynote, a Mumbai-based boutique investment bank. Gitanjali shares rose marginally to close at Rs 361 on Thursday.
The Mumbai-based company has also lined up plans to raise capital for its proposed acquisition and domestic expansion. The firm wants to raise $100 million through a global depository receipt (GDR) issue. It has also proposed to issue 10 million convertible equity warrants on preferential basis to the promoters and raise around Rs 320 crore. An extraordinary general meeting (EGM) has been called on November 3 to consider the fund-raising plans.
Last December, the company acquired 97% stake in Samuels Jewellers Inc, operating 97 stores spread across 18 states, for Rs 100 crore. It further infused another Rs 100 crore as working capital. The acquisition was financed through internal accruals and proceeds from the $110-million foreign currency convertible bonds (FCCBs) issue. Sources said Gitanjali is currently in the process of turning around the loss-making US retailer, and is expected to achieve break even by 2007 end.
The company's other plans include a proposed foray into the luxury retail market through its new venture Luxury Connexions (Lx) and luxury malls. The group plans to invest Rs 100 crore over the next three years for establishing luxury malls across India and acquiring international brands which would be sold through Lx outlets. Sources said these would be positioned to facilitate and promote the growing luxury retail market in India vis-a-vis international brands.
The plans include setting up luxury malls in eight cities, beginning with Hyderabad and subsequently moving to Mumbai, Bangalore, Delhi, Kolkata, Ludhiana, Chandigarh and Chennai. The luxury malls would house global brands, restaurants, spas, international jewellery brands, connected wedding stores encompassing designer products finely bundled with personalised services to suit the growing needs of India's upper middle class.
"It's one of the leading jewellery retailers having over 100 outlets across the country. The deal will be completed in two months," said sources. The company is being advised by Keynote, a Mumbai-based boutique investment bank. Gitanjali shares rose marginally to close at Rs 361 on Thursday.
The Mumbai-based company has also lined up plans to raise capital for its proposed acquisition and domestic expansion. The firm wants to raise $100 million through a global depository receipt (GDR) issue. It has also proposed to issue 10 million convertible equity warrants on preferential basis to the promoters and raise around Rs 320 crore. An extraordinary general meeting (EGM) has been called on November 3 to consider the fund-raising plans.
Last December, the company acquired 97% stake in Samuels Jewellers Inc, operating 97 stores spread across 18 states, for Rs 100 crore. It further infused another Rs 100 crore as working capital. The acquisition was financed through internal accruals and proceeds from the $110-million foreign currency convertible bonds (FCCBs) issue. Sources said Gitanjali is currently in the process of turning around the loss-making US retailer, and is expected to achieve break even by 2007 end.
The company's other plans include a proposed foray into the luxury retail market through its new venture Luxury Connexions (Lx) and luxury malls. The group plans to invest Rs 100 crore over the next three years for establishing luxury malls across India and acquiring international brands which would be sold through Lx outlets. Sources said these would be positioned to facilitate and promote the growing luxury retail market in India vis-a-vis international brands.
The plans include setting up luxury malls in eight cities, beginning with Hyderabad and subsequently moving to Mumbai, Bangalore, Delhi, Kolkata, Ludhiana, Chandigarh and Chennai. The luxury malls would house global brands, restaurants, spas, international jewellery brands, connected wedding stores encompassing designer products finely bundled with personalised services to suit the growing needs of India's upper middle class.
Chidambaram - things will cool down soon
Finance Minister P Chidambaram on Friday attributed the recent surge in stock markets to speculators and hoped "things will cool down soon" - a prediction reflected in the plummeting Sensex.
"To some extent speculators are taking advantage of the rise in the Sensex... Things will cool down," he said on the sidelines of a summit here.
The 30-share BSE index today fell by 395.03 points to 18,419.04, against the record high level of 18,814.07 reached in yesterday's trading.
Chidambaram, who had cautioned retail investors from entering the market when it crossed 18,000 points, said: "Sensex is an index of 30 stocks (and) as such it is a number. We don't invest our future in Sensex."
"Steep rise in Sensex sometimes surprises me, sometimes worries me. I do not think fundamentals change so rapidly day-to-day. Our assessment tells us Sensex is driven by copious inflow of funds," he said.
The market had lost heavily in August on concerns about the credit crisis in the US. The Sensex, which was trading at 14,000 level in July and gained up to 15,794 on July 24, fell back to 13,989 points on August 21.
It has since appreciated smartly and in fact galloped from 16,000 points to 17,000 in just six sessions last month and covered the next 1,000 point journey in eight trading days.
"To some extent speculators are taking advantage of the rise in the Sensex... Things will cool down," he said on the sidelines of a summit here.
The 30-share BSE index today fell by 395.03 points to 18,419.04, against the record high level of 18,814.07 reached in yesterday's trading.
Chidambaram, who had cautioned retail investors from entering the market when it crossed 18,000 points, said: "Sensex is an index of 30 stocks (and) as such it is a number. We don't invest our future in Sensex."
"Steep rise in Sensex sometimes surprises me, sometimes worries me. I do not think fundamentals change so rapidly day-to-day. Our assessment tells us Sensex is driven by copious inflow of funds," he said.
The market had lost heavily in August on concerns about the credit crisis in the US. The Sensex, which was trading at 14,000 level in July and gained up to 15,794 on July 24, fell back to 13,989 points on August 21.
It has since appreciated smartly and in fact galloped from 16,000 points to 17,000 in just six sessions last month and covered the next 1,000 point journey in eight trading days.
Weekly Close: 19K missed but some relief on Politics !
It was the Formula one race for the indices this week and indices crossed historical level. Market zoomed ahead in spite of political uncertainties and crossed the 18k levels in beginning of the week. Since then the rally was very much strong but it marginally fell short to touch 19k. Volumes were extremely high led by huge liquidity inflow by foreign funds. The jitters on politics some what eased as Congress gave indication that it would miss the nuclear bus and try to avoid early election. This further gave boost to the market. Reliance group continued to be all time beloved of investors. Capital good too continued to flare on huge order book. Sugar stocks became sweet with some favourable changes in the Govt policy. However, Small and mid caps were left out in the recent run up. Infy was disappointment with it quarterly numbers.
Market Performance for the week: Sensex up by 700 points or 3.8% up for the week. Nifty up 4.5%. Mid cap 0.5% up; Adlabs 23% up; Mercator Lines 20% up. Small cap index flat; Metal Index 5.5% up; SAIL 11% up; Nalco 6% up Capital Goods index 5.5% up; L&T 9.5% up; BHEL 8% up; Index gainers VSNL 17% up; Rel Comm 11.5%; ONGC 12% up..
Infosys declared numbers this week and that was a disappointment as the markets had been building up greater expectations. The company posted just 1.9% growth sequentially in its second quarter numbers at Rs 1100 cr as against Rs 1,079 cr in previous quarter of the same year. It's consolidated net sales surged by 8.8% sequentially to Rs 4,106 cr versus Rs 3,773 cr. The operating profit margin increased to 31.27% from 28.73%. We were not very disappointed though. The company has increased the targets of employee additions for the year which is the positive. Do read Economy : Taking stock to get more thoughts on this.
We had lots of research this week. There was research on VIP industries.. where we believe that the company is cruising for a take off. The company has been fighting with unorgainsed market and key here is Brand. VIP is well placed with brand. But what excites us here is the size of luggage industry globally. Globally Luggage industry is quite big and also highly fragmented.. VIP will have over 70% of the Indian Market .. but the hurdles remain.. Do read our detailed note here.
We had a research note on Asian Paints. We like the busniess.. but the valuation is where we are not very happy. Interesting observation was that 65% of paints go for repainting. A booming economy like India with 112 crs (around 25 mn households assuming 4-5 per house) of population provides a great opportunity. Current size of middle class is estimated to be 30% of the population which is likely to touch around 45%- 50% between 2007 and 2015. This would be the actual earning population which will be ready to spend more for better living. In addition to this around 4.5 million houses are added per year, which includes 2 million housing units under the weaker section housing policy. A Large consuming population and high economic growth gives great potential here. Clearly the demand for paints will be higher. So really this element is really large and will be the driving force in future. Do read our note.
Allcargo Global Logistics (AGL) a multimodal transporters & CFS operator in India. AGL drives major part of revenues from MTO segment while in CFS business it has 12% in the market. The company has approved acquisition of Transindia Freight Services (TFSPL). TFSPL is an unlisted company owned by the promoter-family of AGL and is primarily engaged in the business of contracting transportation of containers and project-related cargo and hiring of cranes, reach stackers and forklift trucks. The share swap ratio will be 518 fully paid-up equity shares of AGL for every 100 fully paid-up shares of TFSPL. TFSPL will issue 2.10 Cr shares and the valuation will be around Rs 206 Cr @ Rs 982 / share. For this purposed the company raised up to Rs 300 crore. Promoters holding is 79.6% stake in AGL. Now after adding TFSPL equity, AGL?s new equity will be 2.23 Cr. With this promoter holding would move up to 81.61% after the proposed swap. This merger will help AGL to get some synergies in terms of overheads and lower taxes. The event has been priced in the stock after the merger news. Do read our note to get more insights.
We had research on Kesoram and also Madras cement. These are South focussed companies. Next 18 months is likely to be very exciting for the mid caps. As such cement counter seems expensive but Kesoram and Madras cement can provide some opportunity. Our detailed note on site would give you more idea about this.
Our research on Solar explosives paid off. We had a research note just a few weeks back on this one. The stock has exploded and the consolidated results were spectacular. The demand for explosives is directly linked to the growth in mining and infrastructure sector. Demand for explosives is more in Coal mining, Infrastructure development and Metal mining. Mining industry is expected to grow in the core segments like coal, iron ore, and limestone. Coal mining remains the largest application for Explosives worldwide accounting for almost 70% of total explosive consumption. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector as the industry has a huge entry barrier for the new player as it's a licensed industry where you have to procure license for producing, transportation and can sell to sell only to those company having a license. Do watch for more gains here in future. We will have our results analysis out early next week on this one.
Another stock moving up was Navneet. The education company has finally made a big entry into the e-education space which was dominated by Educomp. In a matter of 3 months the company has developed the animated software which covers the school syllabus for 1st - 10th for the state of Gujarat. This it has already launched and has more than 50 schools to its credit. The low pricing really has the schools willing to buy and use the same in the audio Video room. Navneet believes that in an environment driven by marks, a product which helps the student score higher markets will be a winner. Near term the results for the September quarter should be good helped by the spillover effect from the previous quarter sales. We are really bullish on this one as it provides tuff competition to Educomp which has become too expensive but still is the market leader. Navneet has along way to go but we see that the company has the potential to deliver.
Todays pullback was one of profit taking. The big trigger of the Reliance AGM was over but the more important one was from the HT Summit where Sonia Gandhi indicated that the Government was attempting to persuade the Left, but surviving the full term seemed more important. The Nuclear deal seems to be a casualty. So really all political cues are now discounted. The results is what will drive the markets ahead. We believe that the Domestic Mutual Funds have a left out feeling and they would be bouncing back at the first opportunity. We believe that the Mid caps where the results are better than expected.. will be the stocks which will jump. It is this segment where we will see mid caps turn into larger mid caps. The valuation stretch is missing here and the risk appetite has gone up. There are talks of correction and that may come.. but really all these pull backs will have the buyers waiting to get in.
Great performance for the week. Wowcalls had wonder gains in Solar Explosive in a day. Delivery Delights by Adonis was another super one with Graphite India delivering 10% gains. Shiv Vani, Idea delivered marvellous gains in Delivery Delights. Quickies call also had great returns for investors. Our Research will follow. We will be back with exciting ideas in coming weeks.
Market Performance for the week: Sensex up by 700 points or 3.8% up for the week. Nifty up 4.5%. Mid cap 0.5% up; Adlabs 23% up; Mercator Lines 20% up. Small cap index flat; Metal Index 5.5% up; SAIL 11% up; Nalco 6% up Capital Goods index 5.5% up; L&T 9.5% up; BHEL 8% up; Index gainers VSNL 17% up; Rel Comm 11.5%; ONGC 12% up..
Infosys declared numbers this week and that was a disappointment as the markets had been building up greater expectations. The company posted just 1.9% growth sequentially in its second quarter numbers at Rs 1100 cr as against Rs 1,079 cr in previous quarter of the same year. It's consolidated net sales surged by 8.8% sequentially to Rs 4,106 cr versus Rs 3,773 cr. The operating profit margin increased to 31.27% from 28.73%. We were not very disappointed though. The company has increased the targets of employee additions for the year which is the positive. Do read Economy : Taking stock to get more thoughts on this.
We had lots of research this week. There was research on VIP industries.. where we believe that the company is cruising for a take off. The company has been fighting with unorgainsed market and key here is Brand. VIP is well placed with brand. But what excites us here is the size of luggage industry globally. Globally Luggage industry is quite big and also highly fragmented.. VIP will have over 70% of the Indian Market .. but the hurdles remain.. Do read our detailed note here.
We had a research note on Asian Paints. We like the busniess.. but the valuation is where we are not very happy. Interesting observation was that 65% of paints go for repainting. A booming economy like India with 112 crs (around 25 mn households assuming 4-5 per house) of population provides a great opportunity. Current size of middle class is estimated to be 30% of the population which is likely to touch around 45%- 50% between 2007 and 2015. This would be the actual earning population which will be ready to spend more for better living. In addition to this around 4.5 million houses are added per year, which includes 2 million housing units under the weaker section housing policy. A Large consuming population and high economic growth gives great potential here. Clearly the demand for paints will be higher. So really this element is really large and will be the driving force in future. Do read our note.
Allcargo Global Logistics (AGL) a multimodal transporters & CFS operator in India. AGL drives major part of revenues from MTO segment while in CFS business it has 12% in the market. The company has approved acquisition of Transindia Freight Services (TFSPL). TFSPL is an unlisted company owned by the promoter-family of AGL and is primarily engaged in the business of contracting transportation of containers and project-related cargo and hiring of cranes, reach stackers and forklift trucks. The share swap ratio will be 518 fully paid-up equity shares of AGL for every 100 fully paid-up shares of TFSPL. TFSPL will issue 2.10 Cr shares and the valuation will be around Rs 206 Cr @ Rs 982 / share. For this purposed the company raised up to Rs 300 crore. Promoters holding is 79.6% stake in AGL. Now after adding TFSPL equity, AGL?s new equity will be 2.23 Cr. With this promoter holding would move up to 81.61% after the proposed swap. This merger will help AGL to get some synergies in terms of overheads and lower taxes. The event has been priced in the stock after the merger news. Do read our note to get more insights.
We had research on Kesoram and also Madras cement. These are South focussed companies. Next 18 months is likely to be very exciting for the mid caps. As such cement counter seems expensive but Kesoram and Madras cement can provide some opportunity. Our detailed note on site would give you more idea about this.
Our research on Solar explosives paid off. We had a research note just a few weeks back on this one. The stock has exploded and the consolidated results were spectacular. The demand for explosives is directly linked to the growth in mining and infrastructure sector. Demand for explosives is more in Coal mining, Infrastructure development and Metal mining. Mining industry is expected to grow in the core segments like coal, iron ore, and limestone. Coal mining remains the largest application for Explosives worldwide accounting for almost 70% of total explosive consumption. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector as the industry has a huge entry barrier for the new player as it's a licensed industry where you have to procure license for producing, transportation and can sell to sell only to those company having a license. Do watch for more gains here in future. We will have our results analysis out early next week on this one.
Another stock moving up was Navneet. The education company has finally made a big entry into the e-education space which was dominated by Educomp. In a matter of 3 months the company has developed the animated software which covers the school syllabus for 1st - 10th for the state of Gujarat. This it has already launched and has more than 50 schools to its credit. The low pricing really has the schools willing to buy and use the same in the audio Video room. Navneet believes that in an environment driven by marks, a product which helps the student score higher markets will be a winner. Near term the results for the September quarter should be good helped by the spillover effect from the previous quarter sales. We are really bullish on this one as it provides tuff competition to Educomp which has become too expensive but still is the market leader. Navneet has along way to go but we see that the company has the potential to deliver.
Todays pullback was one of profit taking. The big trigger of the Reliance AGM was over but the more important one was from the HT Summit where Sonia Gandhi indicated that the Government was attempting to persuade the Left, but surviving the full term seemed more important. The Nuclear deal seems to be a casualty. So really all political cues are now discounted. The results is what will drive the markets ahead. We believe that the Domestic Mutual Funds have a left out feeling and they would be bouncing back at the first opportunity. We believe that the Mid caps where the results are better than expected.. will be the stocks which will jump. It is this segment where we will see mid caps turn into larger mid caps. The valuation stretch is missing here and the risk appetite has gone up. There are talks of correction and that may come.. but really all these pull backs will have the buyers waiting to get in.
Great performance for the week. Wowcalls had wonder gains in Solar Explosive in a day. Delivery Delights by Adonis was another super one with Graphite India delivering 10% gains. Shiv Vani, Idea delivered marvellous gains in Delivery Delights. Quickies call also had great returns for investors. Our Research will follow. We will be back with exciting ideas in coming weeks.
Mukesh Ambani at Reliance AGM
The shareholders of Reliance Industries today gave a standing ovation to Chairman Mukesh Ambani at the company's 33rd annual general meeting. In return, a visibly embarrassed Ambani presented them a five-pronged strategy to become a global leader.
Addressing shareholders, who congratulated him for receiving a doctoral degree from the Maharaja Sayajirao University of Baroda – some even recited poems dedicated to the chairman – Ambani said the strategy pivots on organic growth, joint ventures, entry into the rural and agricultural sector, innovation and foray into other countries.
The shareholders were in a jubilant mood, anticipating a "favourable announcement" including a bonus issue to commemorate the 30th year of listing of the company. But Ambani remained noncommittal. He said the Reliance board would meet on Thursday and the decision to be taken at the meeting would be beneficial for all stakeholders. The agenda of the next week's board meeting includes quarterly results.
Reliance has investments that will fetch $28 billion (Rs 112,000 crore) at current prices, giving the company the finances to pursue growth options of "significant size and scale," he said. The company plans to build chemical businesses in Egypt and Russia, and expects to make new hydrocarbon discoveries.
Ambani said Reliance Petroleum, which is building a 580,000 barrel per day refinery at Jamnagar, Gujarat, would be completed ahead of schedule. The facility, which is coming up near Reliance Industries' 660,000 barrel per day refinery, was scheduled for completion by the end of next year.
He said the company would spend $8-$9 billion (Rs 32,000-36,000 crore) over three to four years at its petrochemical and refining complex in Gujarat.
Industry sources said overseas growth will help Reliance offset the impact of local price controls on oil and gas. The company is facing protests from street vendors and shopkeepers for expanding its retail business. In fact, Reliance is going slow on retail expansion and was forced to down shutters at some of its stores selling products ranging from fruits and vegetables to electronic goods.
Although Ambani was comfortable divulging the billion-dollar expansion plans of his company, he appeared shy on discussing his personal wealth.
Recently, he emerged as the richest Indian, riding on Reliance's performance on the bourses. "I measure my success by the value that I create for my shareholders and the assets that we, as a company, create for the nation as a whole. My wealth and your wealth are inevitably linked to our growth," he said on a philosophical note.
Addressing shareholders, who congratulated him for receiving a doctoral degree from the Maharaja Sayajirao University of Baroda – some even recited poems dedicated to the chairman – Ambani said the strategy pivots on organic growth, joint ventures, entry into the rural and agricultural sector, innovation and foray into other countries.
The shareholders were in a jubilant mood, anticipating a "favourable announcement" including a bonus issue to commemorate the 30th year of listing of the company. But Ambani remained noncommittal. He said the Reliance board would meet on Thursday and the decision to be taken at the meeting would be beneficial for all stakeholders. The agenda of the next week's board meeting includes quarterly results.
Reliance has investments that will fetch $28 billion (Rs 112,000 crore) at current prices, giving the company the finances to pursue growth options of "significant size and scale," he said. The company plans to build chemical businesses in Egypt and Russia, and expects to make new hydrocarbon discoveries.
Ambani said Reliance Petroleum, which is building a 580,000 barrel per day refinery at Jamnagar, Gujarat, would be completed ahead of schedule. The facility, which is coming up near Reliance Industries' 660,000 barrel per day refinery, was scheduled for completion by the end of next year.
He said the company would spend $8-$9 billion (Rs 32,000-36,000 crore) over three to four years at its petrochemical and refining complex in Gujarat.
Industry sources said overseas growth will help Reliance offset the impact of local price controls on oil and gas. The company is facing protests from street vendors and shopkeepers for expanding its retail business. In fact, Reliance is going slow on retail expansion and was forced to down shutters at some of its stores selling products ranging from fruits and vegetables to electronic goods.
Although Ambani was comfortable divulging the billion-dollar expansion plans of his company, he appeared shy on discussing his personal wealth.
Recently, he emerged as the richest Indian, riding on Reliance's performance on the bourses. "I measure my success by the value that I create for my shareholders and the assets that we, as a company, create for the nation as a whole. My wealth and your wealth are inevitably linked to our growth," he said on a philosophical note.
Q2 results to dictate near term trend
Given that the market has witnessed a sharp and swift surge over the past few days, correction is inevitable after the sharp spurt. Q2 September 2007 results remain the key near term trigger for the market. The near term activity on the bourses is likely to be stock-specific based on Q2 result expectations.
Decent to strong Q2 results are expected from cement, steel, and telecom firms. Cement and steel firms are seen reporting strong Q2 numbers on the back of firm prices whereas robust subscription growth is expected to drive earnings of cellular services providers. IT firms are seen reporting good numbers on the back of volume growth and also because September 2007 quarter is seasonally the strongest of the four quarters for IT firms.
On the other hand, auto firms are seen reporting dismal numbers due to fall in volumes arising from higher interest rates.
FII inflow may remain strong due to ample global liquidity further enhanced by US Federal Reserve's last month's steep cut in the key benchmark interest viz. the fed funds rate by 50 basis points to 4.75%. A further cut in interest rate by Fed, if any, will only add to liquidity further which in turn ensure that FII inflow in India and emerging markets remain strong.
Emerging markets including India have witnessed strong FII inflows ever since the last month's Fed cut, given the improved fundamentals of emerging markets.
Domestic liquidity remains strong. Insurance firms have been channelising money raised through unit-linked insurance plans (with a high weightage for equities) into the markets. A sharp correction, if any, may lead to bargain bunting by domestic mutual funds which are said to be sitting on a cash pile of about Rs 14000 crore.
The market's fears that a political impasse over a nuclear energy deal with the United States would lead to early elections, too, has eased with Congress President Sonia Gandhi stating on Friday, 12 October 2007, she doesn't want early election. Gandhi said that the Left parties, which were opposing the deal, were not being unreasonable, and that the government was not looking for a confrontation with them because that was not the "coalition dharma."
Left front which is supporting the government from outside has been against operationalisation of the nuclear deal with the US, which had caused a rift between the government and the Left front. There had been fears that possibility of an early election could see the government announcing populist measures that would widen the fiscal deficit.
The near term trigger for the market is RBI's Mid Term Review Of Annual Policy due on 30 October 2007. It remains to be seen whether the central bank does away with a hawkish stance in the policy. However, a near term rate cut by RBI looks unlikely given that consumer price base inflation and liquidity remain high.
India's economy is expected to post decent to strong growth for a long period of time mainly due to favourable demographics.
Market extends gains
Continued strong buying by foreign institutional investors, firm global markets and expectations of good Q2 September 2007 results from corporate India, took the market up further last week.
The 30-share BSE Sensex gained 645. 68 points or 3.63% to 18,419.04, while the S&P CNX Nifty gained 242.40 points or 4.6% to 5428.25 in the week ended Friday, 12 October 2007.
On Monday (8 October 2007), the market drifted lower on speculation of mid-term polls after Congress President Sonia Gandhi on Sunday, 7 October 2007, indicated her party's readiness to face elections by saying those opposing the nuclear deal were enemies of development and peace. The 30-share BSE Sensex, on that day, lost 281.97 points, or 1.59%, to 17,491.39 points. The S&P CNX Nifty ended down 100.75 points, or 1.94%, to 5,085.10.
On Tuesday (9 October 2007), the Sensex touched a milestone of 18,000 after worries of an early election eased. The Congress-led United Progressive Alliance (UPA) government at the centre and its communist allies agreed to meet again on 22 October 2007 to resolve a row over a nuclear deal with the United States. On that day, the 30-share BSE Sensex ended up 788.85 points, or 4.51%, to 18,280.24 and the broader based S&P CNX Nifty ended up 242.15 points, or 4.76%, to 5,327.25.
On Wednesday (10 October 2007), the record-breaking trend continued on the bourses, with easing of political worries and firm Asian markets. The 30-share BSE Sensex, on that day, rose 378.01 points, or 2.07%, to 18,658.25. The broader based S&P CNX Nifty was up 114.2 points, or 2.14%, to 5,441.45.
On Thursday (11 October 2007), the market recouped its lost ground in afternoon trade and rallied sharply to at all-time high. The market was quiet in early trade as the second quarter performance of Infosys Technologies disappointed investors. On that day, the 30-share BSE Sensex ended up 155.82 points, or 0.84%, to 18,814.07. The broader based S&P CNX Nifty ended up 83.4 points, or 1.53%, to 5,524.85.
On Friday (12 October 2007), the three-day bull-run came to a halt as mixture of profit booking and global negativity acted against the market uptrend. The 30-share BSE Sensex, on that day, fell 395.03 points, or 2.10%, to 18,419.04. The broader based S&P CNX Nifty was down 96.6 points, or 1.75%, to 5,428.25. Finance Minister P Chidambaram's statement that the steep rise in stock price was worrisome also pulled down bourses on that day.
Chidambaram on Friday, 12 October 2007 expressed surprise over the steep rise in stock market and said it was being driven by ample fund flows from abroad. When Chidambaram spoke, the market was down more than 1.5% and it quickly extended its losses to more than 2% on worries the government may act to counter foreign inflows.
The BSE IT index fell 1.10% to 4,687.79 in a week, following a slump in software stocks after Infosys Technologies reported its Q2 results on 11 October 2007, which lagged behind the estimates of investors.
Tata Consultancy Service, India's largest software services firm by sales, slid 0.66% to Rs 1063.10 in the week. Infosys, the second-largest computer services provider, fell 2.98% to Rs 1930.45. Wipro, the third biggest software firm, gained 5.49% to Rs 486.45. Satyam Computer Services, the fourth biggest software firm, declined 1.32% to Rs 438.60 in the week.
Infosys Technologies' net profit rose 19.87% to Rs 1074.00 crore on 18% rise in sales to Rs 3862.00 crore in Q2 September 2007 over Q2 September 2006.
The BSE Capital Good index was the major gainer in the week. This index gained 5.53% to 16,614.69 in a week, led by major gains in Larsen & Toubro (L&T) and Bharat Heavy Electrical (Bhel).
Larsen & Toubro (L&T) gained 8.79% to Rs 3360.75 in the week. It secured a Rs 693 crore contract to set up sulphur plants for Indian Oil Corporation. The company also won $60 million order for setting up a methyl amines & dimethyl formamide plants for Methanol Chemical Company in Saudi Arabia.
The company has agreed to buy out the switchgear business of Tamco in Malaysia for $108 million. The acquisition will be completed by March 2008.
Bharat Heavy Electrical (Bhel) moved up 8.72% to Rs 2341.35 in the week. The company bagged a Rs 394 crore contract from Rashtriya Ispat Nigam for setting up a captive power plant at Vizag Steel Pant in Andhra Pradesh.
Other stock which was in action the week was Reliance Industries, which rose 3.34% to Rs 2566.85 in a week. The stock declined on Friday, 12 October 2007 on disappointment that an expected stock split or bonus issue was not announced at company's shareholders' meeting.
Reliance Energy grew 13.07% to Rs 1636.30 in a week. Some reports suggested that its subsidiary, Reliance Energy Transmission has bagged a transmission project worth Rs 2,000 crore.
ICICI Bank rose 1.56% to Rs 1053 and State Bank of India was virtually steady to end at Rs 1862.30 in a week. Both the banks have reduced interest rates on almost all types of loans to boost demand in festive season.
India's wholesale price index rose 3.26% in the 12 months to 29 September 2007, lower than the previous week's 3.42% rise, government data showed on Friday.
India's industrial output in August rose 10.7% from a year earlier, higher than upwardly revised annual growth of 7.5% in July due to mining, manufacturing and electricity production, data showed on Friday.
Mkts witness profit booking
Markets witnessed profit booking in a volatile day of trade. The Sensex was down nearly 400 points at 18419 and the Nifty was down 97 points at 5428. The CNX Midcap Index was down 1.4% and the BSE Small-cap Index was down 0.24%. The BSE Realty Index was down 3.3% and the BSE Cap Goods, Bank Indices were down 2.7% each/
New listing: Koutons Retail closed at Rs 586 vs listing price of Rs 519 (issue price Rs 415). Inflation For the week ended Sep 29 was at 3.26% vs 3.42% and the market estimated 3.36%. NSE Advance Decline ratio was at 1:2. Markets recorded second highest turnover in history at Rs 122730.99 crore. Aug IIP numbers came in higher than expectations.
Currency Movement
Yen depreciated by 10 bps at 117.4. Rupee depreciated by 33 bps at 39.43
Yen depreciated by 10 bps at 117.4. Rupee depreciated by 33 bps at 39.43
F&O Snapshot
Nifty Futures premium was at 29 points vs 25 points premium yesterday and added 18.6 lakh shares in OI. Fresh shorts were seen in GMR Infra, IDBI, Reliance Communication, RIL. Long unwinding was seen in TTML, IFCI, RPL.
Nifty Futures premium was at 29 points vs 25 points premium yesterday and added 18.6 lakh shares in OI. Fresh shorts were seen in GMR Infra, IDBI, Reliance Communication, RIL. Long unwinding was seen in TTML, IFCI, RPL.
Most Buzizng Stock
Patel Eng up 10%; cut 36 thousand shares in OI
Havell's India up 8.5%; add 2 lakh shares in OI
Rolta up 8.4%; add 85 thousand shares in OI
Lanco Infra up 5.7%; add 1.5 lakh shares in OI
Patel Eng up 10%; cut 36 thousand shares in OI
Havell's India up 8.5%; add 2 lakh shares in OI
Rolta up 8.4%; add 85 thousand shares in OI
Lanco Infra up 5.7%; add 1.5 lakh shares in OI
Fresh Shorts
GMR Infra down 2.3%; add 28.3 lakh shares in OI
IDBI down 5.5%; add 23.5 lakh shares in OI
R Comm down 3.1%; add 16.5 lakh shares in OI
RIL down 2.7%; add 13.5 lakh shares in OI
GMR Infra down 2.3%; add 28.3 lakh shares in OI
IDBI down 5.5%; add 23.5 lakh shares in OI
R Comm down 3.1%; add 16.5 lakh shares in OI
RIL down 2.7%; add 13.5 lakh shares in OI
Long Unwinding
TTML down 3.5%; cut 37.8 lakh shares in OI
IFCI down 3%; cut 30 lakh shares in OI
RPL, Escorts, MRPL, IDFC see unwinding of long positions with drop in the price
TTML down 3.5%; cut 37.8 lakh shares in OI
IFCI down 3%; cut 30 lakh shares in OI
RPL, Escorts, MRPL, IDFC see unwinding of long positions with drop in the price
Short Covering
Arvind Mills up 4.5%; cut 35.4 lakh shares in OI
Arvind Mills up 4.5%; cut 35.4 lakh shares in OI
Market dips after three-day rally; Sensex sheds 395 points
The market snapped three-day rally and Sensex lost nearly 400 points for the day, as correction in Asian and European markets prompted traders here to book profit. The market had made a sharp recovery from lower level in mid-afternoon trade from initial fall but the recovery proved short-lived and the market soon weakened again. Reliance Industries declined sharply from day's high. Most of the sectoral indices slipped into the red. European markets, which opened after Indian markets, were weak. Asian markets, which opened before Indian market, were subdued to weak.
The BSE 30-share Sensex ended down 395.03 points, or 2.1%, to 18,419.04. It hit a intraday low of 18,336 in late trade. At day's low of 18,336, Sensex had declined 478.07 points for the day.
The Sensex had surged 1,323 points in last three trading sessions till Thursday, 11 October 2007.
The broader based S&P CNX Nifty ended down 96.6 points, or 1.75%, to 5,428.25.
BSE clocked a turnover of Rs 9320 crore, lower than Thursday (11 October 2007)'s Rs 10,603.46 crore.
NSE's futures & options (F&O) segment clocked a turnover of Rs 90,419.66 crore today, 12 October 2007 compared to 72,261.05 on Thursday, 11 October 2007.
Nifty October 2007 futures were at 5,461.05, a premium of 32.8 points or 0.6% over the spot price of 5,428.25.
The market had witnessed a recovery from lower level in early afternoon trade from an initial slide as political worries eased after Congress president Sonia Gandhi reiterated that she doesn't want early election. India's index of industrial production (IIP) data showed healthly growth in August 2007. Inflation eased a little bit. Both IIP and inflation data hit the market in early afternoon trade today. Mid-cap and small-cap indices outperformed Sensex.
Finance Minister P Chidambaram today said the economy can sustain a growth rate of 9%, but the growth may dip below 9% in case of some turbulence. Chidambaram said the steep rise in stock markets is cause for concern. The rally is being driven by large inflows of overseas funds, and the markets may cool down after some time, he added.
The BSE Mid Cap index declined 0.8% to 7,529.54 and BSE Small Cap index was down 0.24% to 9,098.65. Both these indices outperformed the market.
BSE Auto index (down 1.59% to 5,514.53), BSE FMCG index (down 1.91% to 2,142.13), BSE Health Care (down 1.59% to 3,806.20), BSE IT index (down 1.66% to 4,687.79), BSE Metal index (up 0.06% to 14,841.44), BSE Oil & Gas (down 1.4% to 10,575.95) outperformed Sensex.
BSE Bankex (down 2.72% to 9,310.79), BSE Capital Goods index (down 2.72% to 9,310.79), BSE Realty index (down 3.29% to 9,878.37) underperformed sensex.
Only metal index edged higher while rest of the sectoral indices on BSE were subdued. Capital goods, banking and real estate stocks declined sharply. Reliance Industries pared gains after hitting all-time high. Market breadth was weak.
Of the 30 shares of the Sensex, 4 moved up, while the remaining were trading down. The market breadth was weak on BSE: 1,022 scrips advanced, 1,692 declined, while 377 remained unchanged.
India's industrial output in August 2007 rose 10.7% from a year earlier, higher than upwardly revised annual growth of 7.5% in July 2007 due to mining, manufacturing and electricity production, data released by the government showed on Friday, 12 October 2007.
Manufacturing production rose 10.4% in August 2007 from a year earlier, compared with provisional annual growth of 7.2% in July 2007. The leader of India's Congress party and the most powerful politician in the country, Sonia Gandhi, said on Friday, 12 October 2007, she did not want an early election and was hoping to resolve differences with communist allies.
Elections are still far away and the government has one-and-a-half years to complete, Prime Minister Manmohan Singh said today, 12 October 2007. The prime minister said if the India-United States civil nuclear deal does not come through, it will be a disappointment. He said the government was trying to reconcile the divergent points of view on the issue within the ruling coalition. Dr. Singh said ys it is his hope that on the nuclear deal, common sense will ultimately prevail.
He said it is his hope and expectation that the government will stay the course and noted there is a lot of unfinished agenda left to be completed. Left front which is supporting the government from outside has been against operationalisation of the nuclear deal with the US, which had caused a rift between the government and the Left front.
India's wholesale price index (WPI) rose 3.26% in the 12 months to 29 September 2007, lower than the previous week's 3.42% rise, government data released today, 12 October 2007, showed.
Capital goods stocks declined sharply in late trade. L&T (down 3.61% to Rs 3,360.75), Bhel (down 3.3% to Rs 2,341.35) and Suzlon Energy (down 4.5% to Rs 1,698.10) edged lower. BSE Capital Good index was the major loser from the sectoral indices on BSE.
Realty stocks witnessed heavy selling. DLF (down 5.76% to Rs 865.65), Indiabulls Real Estate (down 2.7% to Rs 634.85) and Unitech (down 0.77% to Rs 339.85) edged lower. BSE Realty index was the second highest loser from sectoral indices on BSE.
Banking stocks lost ground as strong IIP data for August 2007 dashed hopes of a near term rate cut by RBI. ICICI Bank (down 3.37% to Rs 1,053), State Bank of India (down 4.23% to Rs 1,862.30) and HDFC Bank (down 1.76% to Rs 1,430.85) edged lower.
Auto stocks declined. Tata Motors (down 3.41% to Rs 802.10), Bajaj Auto (down 2.96% to Rs 2,542.30), Maruti Suzuki India (down 1.95% to Rs 1,096.80) edged lower.
Cipla declined 3.3% to Rs 184.75.
Reliance Energy (REL) rose 2.41% to Rs 1,636.30 and was the top gainer from Sensex pack. It hit an all-time high of 1,684.70 today.
India's largest private company in terms of market capitalization and oil refiner Reliance Industries (RIL) was down 2.39% to Rs 2,566.85. The stock came off sharply from higher level as market expectations of bonus/stock split announcement at today's annual general meeting of the company were belied. It hit an all-time high of Rs 2,724 earlier today.
Reliance Industries (RIL) chairman Mukesh Ambani today said the company will pursue organic and inorganic growth opportunities. The new Jamnagar refinery plant will be completed ahead of the scheduled time, and at half the capital cost at which international refineries are built, Ambani said while speaking at RIL's annual general meeting (AGM) in Mumbai.
Ambani also said RIL would raise its paraxylene capacity to 4.5 million tonne a year from 1.9 million tonne a year in two phases. The company is also looking at expanding its petrochemical businesses in other regions like Egypt and Russia, he said. Going ahead, the company would focus on new sectors like retail, infrastructure and agro-rural industry, Ambani said.
ONGC rose 2.36% to Rs 1,091.60. It hits an all-time high of Rs 1,118 today.
Mahindra & Mahindra (up 1.79% to Rs 828.45) edged higher.
IT stocks declined further. Strong rupee and possible US recession had hit the stocks since yesterday after Infosys had announced its Q2 September 2007 results before trading hours. Infosys (down 2.31% to Rs 1,930.45), Wipro (down 0.34% to Rs 486.45), Satyam Computer Services (down 2.09% to Rs 438.60), TCS (down 0.82% to Rs 1,063.10) edged lower.
Metal index was the lone gainer from sectoral indices on BSE. Hindalco Industries (up 1.73% to Rs 178.90), JSW Steel (up 1.15% to Rs 884.75) edged higher.
Koutons Retail India ended at Rs 590.45 on BSE, a premium of 42.28% over the IPO price of Rs 415.
Gujarat Mineral Development Corporation hit 5% upper circuit at Rs 1,851.20, on setting record date for 5-for-1 stock split.
Mastek soared 13.15% to Rs 364.05, after the company set maximum buyback price at Rs 750 per share, much above the ruling market price.
Unity Infraprojects moved up 4.7% to Rs 704.55 on bagging two major orders worth Rs 147.82 crore and Rs 77 crore.
Assam Company was locked at upper limit of 5% at Rs 26.20 on BSE on reports the company struck oil in the North-East region of India
Rolta India soared 7.55% to Rs 625.75 after the firm said its board will consider bonus issue on 22 October 2007.
Allcargo Global Logistics moved up 1.3% to Rs 951.15 ahead of its board meeting to consider raising Rs 400 crore by issue of equity shares and/or equity-linked instruments.
Exide Industries was down 2.53% to Rs 67.40, after the company said its net profit rose 42.30% to Rs 62.24 crore in Q2 September 2007 over Q2 September 2006.
Punj Lloyd declined 0.88% to Rs 353.80, on bagging Rs 389 crore contract from Qatar Petroleum for constructing a multi-product pipeline on engineering, procurement, construction basis, in Qatar.
European markets opened weak today. France's CAC 40 (down 1.24% to 5,789.84), UK's FTSE 100 (down 0.8% to 6,670.90) and Germany's DAX (down 0.57% to 7,987.88) edged lower.
Asian markets, which opened before the Indian markets, were subdued today. Hong Kong's Hang Seng (down 1.01% to 28,838.37), Singapore's Straits Times (down 0.48% to 3,857.25), Japan's Nikkei (down 0.73% at 17,331.17), South Korea's Seoul Composite (down 1.57% to 2,026.44), Taiwan's Taiwan Weighted (down 2.07% to 9,496.47) edged lower.
On Wall Street on Thursday, 11 October 2007, Chinese Internet company Baidu.com Inc. tumbled 10% after JPMorgan cut its third quarter revenue target, spurring concerns that the recent US tech rally may be coming to a close. The tech-heavy Nasdaq Composite Index lost 39.41 or 1.4% at 2,772.20, while the blue-chip Dow which hit an intraday record high earlier, settled 63.57 points or 0.45% lower at 14,015.12.
As per data released by Association of Mutual Funds in India (AMFI) on Thursday, 11 October 2007, equity schemes witnessed a net outflow of Rs 957 crore in September 2007. Equity schemes collected Rs 2282 crore in new fund offers (NFO) (this pertains to NFOs for which allotment was concluded in the month), in the month. Existing opened ended equity schemes witnessed a net outflow of Rs 2951 crore in the month.
Friday, October 12, 2007
August 2007 industrial production data, outcome of RIL AGM to dictate trend
A number of events and data are scheduled today which will impact the bourses today. The market has been on a roll on the back of robust FII inflow. But correction in Asian markets today may trigger correction on the domestic bourses as well.
Reliance Industries (RIL) holds its annual general meeting (AGM) today, 12 October 2007. Expectations have been running high about RIL declaring bonus or stock split in the AGM. If expectations of stock split or bonus from RIL are belied, the market may edge lower given that RIL is a heavyweight in the two key indices Sensex and Nifty.
The government will unveil industrial production data for August 2007 today. The data is expected to hit the market at about 12:00 IST. The industrial production growth was at annual 7.1% in July 2007.
The data on wholesale price based inflation for the year through 29 September 2007 is also due at about 12:00 IST today. Inflation moved up 3.42% in the week ended 22 September 2007 from 3.23% in the week ended 15 September 2007.
The market has been a roll with the Sensex hitting record highs almost every day since the past few days. Heavy FII buying and hopes of a further cut interest rates by the US Federal Reserve has boosted bourses.
As per provisional data, FIIs bought shares worth a net Rs 795 crore on Thursday, 11 October 2007. Domestic institutions sold shares worth a net Rs 420 crore on that day.
Asian stocks edged lower today. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.6% to 2.4%.
On Wall Street on Thursday, 11 October 2007, Bidu tumbled 10% after JPMorgan cut its third quarter revenue target, spurring concerns that the recent US tech rally may be coming to a close. The tech-heavy Nasdaq Composite Index lost 39.41 or 1.4% at 2,772.20, while the blue-chip Dow which hit an intraday record high earlier, settled 63.57 points or 0.45% lower at 14,015.12.
Reliance Industries (RIL) holds its annual general meeting (AGM) today, 12 October 2007. Expectations have been running high about RIL declaring bonus or stock split in the AGM. If expectations of stock split or bonus from RIL are belied, the market may edge lower given that RIL is a heavyweight in the two key indices Sensex and Nifty.
The government will unveil industrial production data for August 2007 today. The data is expected to hit the market at about 12:00 IST. The industrial production growth was at annual 7.1% in July 2007.
The data on wholesale price based inflation for the year through 29 September 2007 is also due at about 12:00 IST today. Inflation moved up 3.42% in the week ended 22 September 2007 from 3.23% in the week ended 15 September 2007.
The market has been a roll with the Sensex hitting record highs almost every day since the past few days. Heavy FII buying and hopes of a further cut interest rates by the US Federal Reserve has boosted bourses.
As per provisional data, FIIs bought shares worth a net Rs 795 crore on Thursday, 11 October 2007. Domestic institutions sold shares worth a net Rs 420 crore on that day.
Asian stocks edged lower today. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.6% to 2.4%.
On Wall Street on Thursday, 11 October 2007, Bidu tumbled 10% after JPMorgan cut its third quarter revenue target, spurring concerns that the recent US tech rally may be coming to a close. The tech-heavy Nasdaq Composite Index lost 39.41 or 1.4% at 2,772.20, while the blue-chip Dow which hit an intraday record high earlier, settled 63.57 points or 0.45% lower at 14,015.12.
Sensex in sight of 19k
The Sensex could breach the psychological 19000 level for the first time provided the market continues with the Thursday's uptrend. The bullish sentiment on the back of strong buying, higher fund inflows into the equities, global crude oil price trading around $83 a barrel and key interest rates being kept unchanged by the US Fed are indications that the Sensex may soon surpass the 19k mark. The market may come under pressure in early trades following extensive selling in morning trades in Nikkei, Hang Seng, Straits Times and Kospi.
US indices faltered on Thursday. The indices ended in the red , While the Dow Jones dropped 64 points at 14015, the Nasdaq ended 39 points lower at 2772.
Barring few, majority of the Indian floats ended at lower levels. Infosys, Wipro and rediff was the biggest loser and tumled nearly 6% each. Satyam and Patni Computers shed over 5% each while HDFC bank, Dr Reddy and ICICI Bank, declined over 1% each. However, VSNL bucked the downtrend and soares 3% while MTNL and Tata Motors was up nearly 2%.
On the crude oil front, the Nymex light crude oil for November series moved up by $1.07 at $83.09 a barrel and Comex gold for December delivery rose $10.70 settle at $756.70 a troy ounce.
US indices faltered on Thursday. The indices ended in the red , While the Dow Jones dropped 64 points at 14015, the Nasdaq ended 39 points lower at 2772.
Barring few, majority of the Indian floats ended at lower levels. Infosys, Wipro and rediff was the biggest loser and tumled nearly 6% each. Satyam and Patni Computers shed over 5% each while HDFC bank, Dr Reddy and ICICI Bank, declined over 1% each. However, VSNL bucked the downtrend and soares 3% while MTNL and Tata Motors was up nearly 2%.
On the crude oil front, the Nymex light crude oil for November series moved up by $1.07 at $83.09 a barrel and Comex gold for December delivery rose $10.70 settle at $756.70 a troy ounce.
Board Meetings For October 12, 2007
Thursday, October 11, 2007
IFCI suitors worried about stake stability
Potential buyers of a 26 per cent stake in the government-owned Industrial Finance Corporation of India's (IFCI), the country's oldest financial institution, have raised concerns over the stability of their shareholding and board representation.
Interested parties are concerned about the possibility of 24 domestic banks and six financial institutions converting to equity Rs 1,480 crore worth of zero-coupon debentures to which they subscribed in 2002-03.
They are also worried at IFCI's inability to accommodate more than three or four representatives from the prospective strategic investor on its 15-member board.
The IFCI board is expected to meet on Monday to discuss these issues.
Representatives of two potential buyers told once the debentures are converted, the strategic investor's equity and, therefore, control will be reduced.
Sources at IFCI, however, said no time frame has been decided for the conversion. "The conversion has to follow certain legal procedures, including approval from the IFCI board. Nothing will be done which could impact strategic investors' interests," they added.
On the issue of board representation, one suitor said: "Four seats on the board will not be in tune with the strategic investor's equity holding of 26 per cent."
In addition, the suitors said, the idea of buying 26 per cent was aimed at an eventual control of the company. Under the law, any acquisition of more than a 15 per cent stake requires a mandatory 20 per cent open offer for retail shareholders.
The successful bidder will eventually emerge as the largest shareholder in IFCI with nearly 46 per cent after an open offer.
"But the present structure of the IFCI board is averse to offering the majority of the board seats to the successful bidder. This will defeat the purpose of acquiring a majority stake," he added.
The IFCI stock today closed at Rs 83.80 on the Bombay Stock Exchange, 3.29 per cent lower than yesterday's close. At this rate, the company's valuation of the company stands at Rs 5,352 crore. So an acquisition of 26 per cent is estimated at Rs 1,392 crore.
Sources close to IFCI said the effort to strike a balance between the interest of the bidder as well as other stakeholders is on. "We are hopeful of finding a solution," they said.
Interested parties are concerned about the possibility of 24 domestic banks and six financial institutions converting to equity Rs 1,480 crore worth of zero-coupon debentures to which they subscribed in 2002-03.
They are also worried at IFCI's inability to accommodate more than three or four representatives from the prospective strategic investor on its 15-member board.
The IFCI board is expected to meet on Monday to discuss these issues.
Representatives of two potential buyers told once the debentures are converted, the strategic investor's equity and, therefore, control will be reduced.
Sources at IFCI, however, said no time frame has been decided for the conversion. "The conversion has to follow certain legal procedures, including approval from the IFCI board. Nothing will be done which could impact strategic investors' interests," they added.
On the issue of board representation, one suitor said: "Four seats on the board will not be in tune with the strategic investor's equity holding of 26 per cent."
In addition, the suitors said, the idea of buying 26 per cent was aimed at an eventual control of the company. Under the law, any acquisition of more than a 15 per cent stake requires a mandatory 20 per cent open offer for retail shareholders.
The successful bidder will eventually emerge as the largest shareholder in IFCI with nearly 46 per cent after an open offer.
"But the present structure of the IFCI board is averse to offering the majority of the board seats to the successful bidder. This will defeat the purpose of acquiring a majority stake," he added.
The IFCI stock today closed at Rs 83.80 on the Bombay Stock Exchange, 3.29 per cent lower than yesterday's close. At this rate, the company's valuation of the company stands at Rs 5,352 crore. So an acquisition of 26 per cent is estimated at Rs 1,392 crore.
Sources close to IFCI said the effort to strike a balance between the interest of the bidder as well as other stakeholders is on. "We are hopeful of finding a solution," they said.
RelComm to promote OLPC
Reliance Anil Dhirubhai Ambani Group on Thursday joined hands with One Laptop Per Child (OLPC) Foundation under which Reliance Communication (Rcom) would provide Internet connectivity, network and logistics to the OLPC's India initiative.
"Every child has the right to education. Reliance Communication is going to facilitate that right. This is not a laptop but an educational programme which will promote e-learning in the country," RADAG Chairman Anil Ambani's wife Tina Ambani told reporters here.
She invited state governments, NGOs, corporates and media to be a party to the programme, a pilot of which has already been started in a school in the tribal-dominated Khairat village, near Karjat in Maharashtra.
Under the programme, every student will be given a water-proof and almost unbreakable laptop, priced at $188 (landed price in India at $ 220) which would reduce the burden of the school bag and promote e-learning in the country reducing the digital divide in the society.
"India's economy is growing at a rapid pace. We need to to impart quality education to children. The education system has to be more student-friendly. It has to be fun-filled for them," Ambani said.
"OLPC programme would be application-oriented and not syllabus-oriented, as is the current practice," Ambani added.
"Every child has the right to education. Reliance Communication is going to facilitate that right. This is not a laptop but an educational programme which will promote e-learning in the country," RADAG Chairman Anil Ambani's wife Tina Ambani told reporters here.
She invited state governments, NGOs, corporates and media to be a party to the programme, a pilot of which has already been started in a school in the tribal-dominated Khairat village, near Karjat in Maharashtra.
Under the programme, every student will be given a water-proof and almost unbreakable laptop, priced at $188 (landed price in India at $ 220) which would reduce the burden of the school bag and promote e-learning in the country reducing the digital divide in the society.
"India's economy is growing at a rapid pace. We need to to impart quality education to children. The education system has to be more student-friendly. It has to be fun-filled for them," Ambani said.
"OLPC programme would be application-oriented and not syllabus-oriented, as is the current practice," Ambani added.
Market Close: Some consolidation but 19k is near !
There seems to be no stopping for the bull run which the market has been witnessing. Liquidity inflow is so strong that investors tend to ignore negative news and participate in bulls run. Indices opened on a fair note with less support from the mixed global cues. In the early sessions itself the investors booked profits heavily at the high levels which bought in the volatility. Indices swung both the sides between positive and negative zone with no clear direction. IT pivotals were major losers after unimpressive results and guidance by Infosys. Market struggled to keep up the gains till the mid sessions but steady buying in other sectors kept the momentum up as the markets ended near all time high. Nifty crossed 5500 mark for the first time.
Today the Bank of Japan (BoJ) reported that it would keep the interest rates unchanged at 0.5% which saw some rally in the Asian markets. Hang Seng for the first time crossed the 29000 mark. Capital goods, Metal, Auto and Realty stocks extended their gains and took Sensex to a new high. Mid cap and small cap indices outperformed the front liners. If the market continues to rally in the same way then 19k is on cards. Sensex can see some correction but if results are good mid caps may see rally.
Sensex ended the day up by 156 points at 18814.07. It was helped up by gains in ONGC (1066.45,+6 percent), Grasim (3800.3999,+4 percent), BHEL (2421.2,+4 percent), ACC (1260.3,+3 percent) and L & T (3486.6499,+3 percent). Restricting the gains were Satyam (447.95,-7 percent), Infosys (1976,-7 percent), TCS (1071.9,-5 percent), Wipro (488.1,-3 percent) and Cipla (191.05,-1 percent).
Navneet, the education company has finally made a big entry into the e-education space which was dominated by Educomp. In a matter of 3 months the company has developed the animated software which covers the school syllabus for 1st ? 10th for the state of Gujarat. This it has already launched and has more than 50 schools to its credit. The pricing policy is penetrative at Rs 25000 for the full licence for the school per annum. This is set to change the paradigm set by Educomp. The low pricing really has the schools willing to buy and use the same in the audio Video room. Navneet believes that in an environment driven by marks, a product which helps the student score higher markets will be a winner. Near term the results for the September quarter should be good helped by the spillover effect from the previous quarter sales. We are really bullish on this one as it provides tuff competition to Educomp which has become too expensive but still is the market leader. Navneet has along way to go but we see that the company has the potential to deliver. We have our call on Navneet running which is now on the verge to deliver. The stock was almost 8% up.
IT People surged almost 10% after the board of the company approved the proposal to issue up to 75 lakh share warrants to either foreign investors or mutual funds or corporate bodies. The board also authorised the company to raise up to Rs 100 crore by issuing equity shares, warrants, FCCBs, or even borrow from banks/financial institutions. The company wanted to raise the money for funding the acquisition, also to set up new offices at various locations and for advertising itself as recruitment solutions provider. The company earlier in August 2007 had withdrawn its follow on public issue (FPO) to raise around Rs 45.25 crore due to lack of response from the retail investors. Recently the company acquired 100% stake in Marketplace Technologies (MT). MT is an established player in e-enabling the businesses in financial services sectors having similar products that to Financial Technologies. Its totally different area of operations for IT people as they provide recruitment solutions to the IT and ITES industry globally through a recruitment portal. But the potential of MT?s business is seen high with good growth and would one could see the upsides from this.
The demand for explosives is directly linked to the growth in mining and infrastructure sector. Demand for explosives is more in Coal mining, Infrastructure development and Metal mining. Mining industry is expected to grow in the core segments like coal, iron ore, and limestone. Coal mining remains the largest application for Explosives worldwide accounting for almost 70% of total explosive consumption. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector as the industry has a huge entry barrier for the new player as it?s a licensed industry where you have to procure license for producing, transportation and can sell to sell only to those company having a license. Specialized knowledge on the kind of explosive and the right combination needed for kind of rocks gives Solar the extra edge. The company had recently announced that it had bagged orders from CIL and some are also in pipeline. The stock has rallied ahead of result; we will update more on results soon. Do read the note on the same for a better view.
Technically Speaking: Market traded the whole day with volatile session but finally ending the day up by more than 150 points as buying intensified in the last sessions. Sensex touched intraday high of 18833 and low of 18537. Overall breadth was marginally in favor of Declines, where the Declines stood at 1363, while Advances at 1349. High volumes have been noticed over past week but today it broke all the records. The market churned an astonishing Rs 10545 crores. It shows that there is a huge liquidity inflow from foreign as well as domestically. Sensex is marching up with some huge volumes. Traders can take longs keeping a stoploss of 18300 on Sensex.
Today the Bank of Japan (BoJ) reported that it would keep the interest rates unchanged at 0.5% which saw some rally in the Asian markets. Hang Seng for the first time crossed the 29000 mark. Capital goods, Metal, Auto and Realty stocks extended their gains and took Sensex to a new high. Mid cap and small cap indices outperformed the front liners. If the market continues to rally in the same way then 19k is on cards. Sensex can see some correction but if results are good mid caps may see rally.
Sensex ended the day up by 156 points at 18814.07. It was helped up by gains in ONGC (1066.45,+6 percent), Grasim (3800.3999,+4 percent), BHEL (2421.2,+4 percent), ACC (1260.3,+3 percent) and L & T (3486.6499,+3 percent). Restricting the gains were Satyam (447.95,-7 percent), Infosys (1976,-7 percent), TCS (1071.9,-5 percent), Wipro (488.1,-3 percent) and Cipla (191.05,-1 percent).
Navneet, the education company has finally made a big entry into the e-education space which was dominated by Educomp. In a matter of 3 months the company has developed the animated software which covers the school syllabus for 1st ? 10th for the state of Gujarat. This it has already launched and has more than 50 schools to its credit. The pricing policy is penetrative at Rs 25000 for the full licence for the school per annum. This is set to change the paradigm set by Educomp. The low pricing really has the schools willing to buy and use the same in the audio Video room. Navneet believes that in an environment driven by marks, a product which helps the student score higher markets will be a winner. Near term the results for the September quarter should be good helped by the spillover effect from the previous quarter sales. We are really bullish on this one as it provides tuff competition to Educomp which has become too expensive but still is the market leader. Navneet has along way to go but we see that the company has the potential to deliver. We have our call on Navneet running which is now on the verge to deliver. The stock was almost 8% up.
IT People surged almost 10% after the board of the company approved the proposal to issue up to 75 lakh share warrants to either foreign investors or mutual funds or corporate bodies. The board also authorised the company to raise up to Rs 100 crore by issuing equity shares, warrants, FCCBs, or even borrow from banks/financial institutions. The company wanted to raise the money for funding the acquisition, also to set up new offices at various locations and for advertising itself as recruitment solutions provider. The company earlier in August 2007 had withdrawn its follow on public issue (FPO) to raise around Rs 45.25 crore due to lack of response from the retail investors. Recently the company acquired 100% stake in Marketplace Technologies (MT). MT is an established player in e-enabling the businesses in financial services sectors having similar products that to Financial Technologies. Its totally different area of operations for IT people as they provide recruitment solutions to the IT and ITES industry globally through a recruitment portal. But the potential of MT?s business is seen high with good growth and would one could see the upsides from this.
The demand for explosives is directly linked to the growth in mining and infrastructure sector. Demand for explosives is more in Coal mining, Infrastructure development and Metal mining. Mining industry is expected to grow in the core segments like coal, iron ore, and limestone. Coal mining remains the largest application for Explosives worldwide accounting for almost 70% of total explosive consumption. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector as the industry has a huge entry barrier for the new player as it?s a licensed industry where you have to procure license for producing, transportation and can sell to sell only to those company having a license. Specialized knowledge on the kind of explosive and the right combination needed for kind of rocks gives Solar the extra edge. The company had recently announced that it had bagged orders from CIL and some are also in pipeline. The stock has rallied ahead of result; we will update more on results soon. Do read the note on the same for a better view.
Technically Speaking: Market traded the whole day with volatile session but finally ending the day up by more than 150 points as buying intensified in the last sessions. Sensex touched intraday high of 18833 and low of 18537. Overall breadth was marginally in favor of Declines, where the Declines stood at 1363, while Advances at 1349. High volumes have been noticed over past week but today it broke all the records. The market churned an astonishing Rs 10545 crores. It shows that there is a huge liquidity inflow from foreign as well as domestically. Sensex is marching up with some huge volumes. Traders can take longs keeping a stoploss of 18300 on Sensex.
Sensex recovers in late rally
The market recouped its lost ground in noon trades and rallied sharply thereafter, after a fall of about 91 points to the day's low of 18,537. The market was quiet in early trades as the second quarter performance of Infosys Technologies disappointed investors. IT stocks, which rallied over the past couple of sessions expecting the technology bellwether to surprise, were beaten down. However, the market trimmed losses as the trading progressed and zigzagged between positive and negative territory in late morning trades before taking a dip on renewed selling. The index shrugged off its bearish trend towards the closing hours and surged to another record high of 18,833 on healthy buying in auto, capital goods, and metal stocks. The Sensex finally ended 156 points higher at 18,814, while the Nifty gained 83 points to close at 5,525.
Among the sectoral indices the PSU index led the upsurge with gains of 3.094% at 8,778 followed by the BSE CG index (up 2.75% at 17,088), the BSE Auto index (up 2.69% at 5,604) and the BSE Metal (up 2.69% at 14,833). The market breadth was neutral. Of the 2,804 stocks traded on the BSE 1,354 stocks advanced, 1,378 stocks declined and 72 stocks ended unchanged.
Out of the 30 Sensex stocks, 23 managed to end in the green while seven stocks ended with losses. M&M registered solid gains and soared 7.62% at Rs814. ONGC jumped 5.66% at Rs1,066, Grasim shot up by 4.14% at Rs3,800, BHEL advanced 3.89% at Rs2,421, ACC moved up by 3.46% at Rs1,260, L&T added 3.40% at Rs3,487 and Hindalco gained 3.26% at Rs176. Among the laggards Satyam Computer dropped 7.50% at Rs448, Infosys shed 6.99% at Rs1,976, TCS declined by 4.72% at Rs1,072, Wipro fell 2.99% at Rs488 and Cipla slipped 1.14% at Rs191, while Dr Reddy's Lab and Bajaj Auto closed with marginal losses.
Over 5.25 crore Power Grid Corporation shares changed hands on the BSE followed by Reliance Natural Resources (2.11 crore shares), IFCI (1.99 crore shares), Reliance Petroleum (1.72 crore shares) and Ispat Industries (1.23 crore shares).
Reliance Industries registered a turnover of Rs604 crore on the BSE followed by Power Grid Corporation (Rs581 crore), Infosys (Rs483 crore), Reliance Capital (Rs386 crore) and Reliance Communication (Rs336 crore)
Among the sectoral indices the PSU index led the upsurge with gains of 3.094% at 8,778 followed by the BSE CG index (up 2.75% at 17,088), the BSE Auto index (up 2.69% at 5,604) and the BSE Metal (up 2.69% at 14,833). The market breadth was neutral. Of the 2,804 stocks traded on the BSE 1,354 stocks advanced, 1,378 stocks declined and 72 stocks ended unchanged.
Out of the 30 Sensex stocks, 23 managed to end in the green while seven stocks ended with losses. M&M registered solid gains and soared 7.62% at Rs814. ONGC jumped 5.66% at Rs1,066, Grasim shot up by 4.14% at Rs3,800, BHEL advanced 3.89% at Rs2,421, ACC moved up by 3.46% at Rs1,260, L&T added 3.40% at Rs3,487 and Hindalco gained 3.26% at Rs176. Among the laggards Satyam Computer dropped 7.50% at Rs448, Infosys shed 6.99% at Rs1,976, TCS declined by 4.72% at Rs1,072, Wipro fell 2.99% at Rs488 and Cipla slipped 1.14% at Rs191, while Dr Reddy's Lab and Bajaj Auto closed with marginal losses.
Over 5.25 crore Power Grid Corporation shares changed hands on the BSE followed by Reliance Natural Resources (2.11 crore shares), IFCI (1.99 crore shares), Reliance Petroleum (1.72 crore shares) and Ispat Industries (1.23 crore shares).
Reliance Industries registered a turnover of Rs604 crore on the BSE followed by Power Grid Corporation (Rs581 crore), Infosys (Rs483 crore), Reliance Capital (Rs386 crore) and Reliance Communication (Rs336 crore)
Bull charge continues; Nifty settles above 5,500
Strong liquidity lifted the bourses for the third consecutive day today. The market hit fresh all-time high towards the latter part of the trading session. The market had witnessed a bout of volatility in early trade. Capital goods, metal, auto and realty stocks extended gains. Mid-cap and small-cap indices outperformed market. Asian markets held firm. European markets were positive. The market breadth was marginally weak.
Infosys witnessed a setback after it announced Q2 September 2007 results before trading hours today, 11 October 2007. Other IT pivotals tumbled following the post Q2 results setback in Infosys counter. Reliance Industries edged higher in volatile trade.
The BSE 30-share Sensex was ended up 155.82 points, or 0.84%, to 18,814.07, a record closing high. It opened on a positive note. It hit fresh all-time high of 18,832.65 in late trade. It hit intra-day low of 18,536.97 in afternoon trade. At day's low of 18,536.97, Sensex had lost 121.28 points for the day.
The broader based S&P CNX Nifty ended up 83.4 points, or 1.53%, to 5,524.85, a record closing high. Nifty hit a fresh all-time high of 5,532.75 in late trade.
Of the 30 shares of the Sensex, 23 had moved up, while the remaining were trading down. The market breadth was almost even on BSE: 1,323 scrips advanced, 1,378 declined, while 394 remained unchanged.
BSE clocked a turnover of Rs 10603 crore, much higher than Wednesday (10 October 2007)'s Rs 8552 crore.
Nifty October 2007 futures were at 5,555.05, a premium of 30.2 points or 0.54% over the spot price of 5,524.85.
NSE's futures & options (F&O) segment clocked a turnover of Rs 72,261.05 crore today, 11 September 2007 compared to a turnover of Rs 79,786.18 crore on Wednesday, 10 October 2007.
The BSE Mid Cap index rose 1.42% to 7,590.60 and BSE Small Cap index rose 1.08% to 9,120.61. Both these indices outperformed Sensex.
Only, BSE IT index (down 5.59% to 4,766.72) and BSE Teck index (down 1.97% to 4,089.19) underperformed Sensex.
Rest all the sectoral indices, BSE Auto index (up 2.69% to 5,603.85), BSE Capital Goods index (up 2.75% to 17,088), BSE Bankex (up 1.57% to 9,570.79), BSE Oil & Gas (up 1.66% to10,725.65), BSE Metal index (up 2.69% to 14,832.64), and BSE Realty (up 2.71% to 10,214.15) outperformed the Sensex.
The Bank of Japan (BoJ) today, 11 October 2007, kept interest rates unchanged at 0.5% as widely expected. Bank of Japan Governor Toshihiko Fukui said in a news conference that price pressures are growing and that there is no change in the central bank's stance on gradually adjusting interest rates in line with economic conditions.
India's largest private company in terms of market capitalization and oil refiner Reliance Industries (RIL) rose 0.47% at Rs 2,629.65. The stock came off session's low of Rs 2,585.25. Earlier, the stock had pared gains from session's high of Rs 2,656. Reliance Industries and Indian Oil Corporation may jointly explore an oil area in East Timor, reports suggest. RIL said after trading hours yesterday, 10 October 2007, it will unveil Q2 September 2007 results on 18 October 2007.
Auto stocks rose in late trade. Tata Motors rose 3.05% to Rs 830.40.
Maruti Suzuki India rose 1.59% to Rs 1,118.60 on signing an agreement with Magneti Marelli and Suzuki Motor Corporation for starting a joint venture in India for manufacturing electronic control units for diesel engines. Bajaj Auto (down 0.04% to Rs 2,619.90) edged lower. Hero Honda Motors (up 0.06% to Rs 754.15) edged higher.
Mahindra & Mahindra rose 7.62% to Rs 813.35 and was the top gainer from the Sensex pack. Mahindra & Mahindra's wholly owned subsidiary Mahindra Intertrade is all set to step into front end retail, reports suggest.
IT pivotals were major losers from Sensex pack after Infosys announced its results just before trading hours today, 11 October 2007. India's No. 2 software services exporter Infosys Technologies declined 6.99% to Rs 1,976. It clocked high volume of 24.27 lakh shares on BSE.
Satyam Computer Services (down 7.5% to Rs 447.95), Tata Consultancy Services (down 4.72% to Rs 1,071.90), Wipro (down 2.99% to Rs 488.10) edged lower.
Infosys revised upwards earnings and revenue guidance for FY 2008 (year ending 31 March 2008). The company has forecast a between 17.5% to 18.1% growth in EPS in FY 2008 as per Indian GAAP to between Rs 78.60 to Rs 78.99. It has forecast a between 19.4% to 19.8% growth in revenue as per Indian GAAP to between Rs 16588 crore to Rs 16648 crore.
As per US GAAP, the company has forecast a between 32.4% to 33.1% growth in consolidated earning per American depository share to between $1.96 to $1.97. The company has forecast a between 34.5% to 35% growth in revenue as per US GAAP to between $4.16 billion to $4.17 billion.
Infosys' consolidated net profit as per Indian GAAP rose 1.94% to Rs 1100 crore in Q2 September 2007 over Q1 June 2007. Consolidated revenue rose 8.8% to Rs 4106 crore from Rs 3773 crore in Q1 June 2007.
Capital goods stocks extended gains. Larsen & Toubro rose 3.4% to Rs 3,486.65. It hit an all-time high of Rs 3,501 today after it acquired switchgear company in Malaysia. Bharat Heavy Electricals (up 3.89% to 2,421.20) and Suzlon Energy (up 0.54% to Rs 1,778.10) edged higher.
Metal stocks extended gains. Tata Steel (up 0.48% to Rs 849.60), Hindalco Industries (up 3.26% to Rs 175.85) edged higher.
DLF rose 2.92% to Rs 918.55. It touched a new high of Rs 929.95 ahead of its board meeting later today to consider overseas acquisitions and fund raising offshore.
ONGC (up 5.66% to Rs 1,066.45), Grasim Industries (up 4.14% to Rs 3,800.40), ACC (up 3.46% to Rs 1,260.30) edged higher.
Cipla declined 1.14% to Rs 191.05.
Power Finance Corporation was up 1.61% to Rs 211.40 after it said its shareholder approved borrowing up to Rs 100000 crore
Bharati Shipyard was down 0.79% to Rs 570.65 after it said that Shipping Corporation of India would acquire four anchor-handling tugs cum supply vessels from the company for $89.28 million.
DIC India moved up 5.08% to Rs 195.50 after it priced rights share issue at Rs 225 each.
State Bank of India rose 1.08% to Rs 1,944.55 on BSE, on cutting interest rates on new loans for homes, automobiles and farm equipment in the festival season.
Indowind Energy jumped 7.95% to Rs 170.35 after it reported a net profit of Rs 2.31 crore in Q1 September 2007.
Adlabs Films soared 10.38% to Rs 714.90 after the Bombay High Court approved the company's proposal to amalgamate its wholly owned subsidiary with itself.
ICICI Bank was up 1.99% to Rs 1,089.70 after global investment firm CLSA maintained buy rating on the stock with target price of Rs 1150.
IT People (India) soared 9.13% to Rs 40.65 after its board approved raising funds through various means.
Side counters, Triton Valves (up 20% to Rs 2,137.30), Ennore Coke (up 20% to Rs 31.80), Ashiana Housing (up 20% to Rs 357.40), Nagreeka Capital (up 19.96% to Rs 102.15) and Jindal Drilling (up 20% to Rs 1,106.60) edged higher.
G L Hotels (down 9.08% to Rs 330), Infotrek Syscom (down 8.78% to Rs 63.40) and Nagpur Power (down 8.41% to Rs 56.10) edged lower.
European markets were firm. France's CAC 40 (up 0.47% to 5,868.35), UK's FTSE 100 (up 0.91% to 6,693.40), Germany's DAX (up 0.77% to 8,048.18) edged higher.
Asian markets, which opened before the Indian markets, were trading higher today. Hong Kong's Hang Seng (up 1.97% to 29,133.02) Singapore's Straits Times (up 1.61% to 3,875.77), Japan's Nikkei (up 1.64% at 17,458.98), South Korea's Seoul Composite (up 0.87% to 2,058.85), Taiwan's Taiwan Weighted (up 0.6% to 9,697.67) edged higher.
The BSE 30-share Sensex rose 378.01 points, or 2.07%, to 18,658.25, a record closing high on Wednesday, 10 October 2007. Sensex had earlier completed its 17,000 to 18,000 journey in just 8 trading sessions, the second fastest 1,000-point rally ever. The market had hit 17,000 mark on 26 September 2007.
Heavy FII buying and hopes of a further cut in interest rates by the US Federal Reserve at its next policy meeting on 30-31 October 2007 have boosted the bourses in the past few days.
ICICI, SBI cut home loan rates
ICICI Bank Ltd, India's second-biggest bank, has cut interest rates on home loans and other retail loans by 25-50 basis points with immediate effect, a spokesman said on Thursday.
The move comes after leader State Bank of India on Wednesday cut interest rates on new loans for homes, automobiles and farm equipment in a festival season offer that runs until the end of 2007.
US Market closes mixed with crude prices slipping
Technology sector remains the sole gainer for the day with support from Apple, Google and RIMM
It was a good day for Technology stocks today, 8 October, 2007 with Google crossing the $600 mark for the first time and closing at a record high. Weakness in crude oil and gold prices with the dollar strengthening partly against euro led US stocks take a hint and slip lower. Market closed mixed with only Nasdaq gaining. Nine out of ten economic sectors posted losses today. Technology remained the sole winner.
The Dow Jones industrial Average closed lower by 22.28 points at 14,043.73. The Nasdaq Composite Index, finished higher by 7.07 points at 2,787.37. S&P 500 finished lower by 5.01 points at 1,552.58.
Twenty-four of thirty Dow stocks ended in red. H-P, Intel and IBM were three of the six Dow performers ending in green. Alcoa headed Dow's decliners followed by Citigroup and Wal-Mart.
Trading was relatively quiet in light volume due to the Columbus Day holiday. Both U.S. government offices and the bond market were closed.
Apple, Research In Motion and Google provided leadership for the Nasdaq today. Energy stocks contributed to the maximum weakness, as the energy sector followed crude prices lower.
Google crosses the $600 mark and closes at an all time high
Market opened in the morning slightly lower. Barring utilities and technology, all the sectors were trading in the red.
Among deal related news, business software maker SAP has agreed to acquire rival Business Objects in a deal valued at $6.8 billion in cash.
Google gained 2.6% to $609.62 today and is up 6.5% this month and 31% this year.
Crude oil futures fell today and closed below $80/barel. Prices fell as dollar strengthened against its rival currencies and traders speculated that upcoming weekly inventory report will show build up in crude supplies for week ended 5 October, 2007.
Crude-oil futures for light sweet crude for November delivery closed at $79.02/barrel (lower by $2.2/barrel or 2.71%) on the New York Mercantile Exchange. The contract touched $78.35 during the session, the lowest intraday price since mid September. The dollar index rose 0.6% today against euro.
Volume on the New York Stock Exchange topped 851 million shares, with declining issues outpacing advancers more than 2 to 1. On the Nasdaq, nearly 1.5 billion shares exchanged hands and decliners topped advancers 4 to 3.
For tomorrow, investors will have minutes from the FOMC's 18 September meeting. Other than that, Alcoa will release its latest quarterly results after the market's close.
Infosys Q2 results tad below estimates
Infosys has reported a consolidated net profit of Rs11bn in the second quarter versus Rs10.79bn in the quarter ended June, translating into a sequential growth of 2%. Consolidated net sales have risen by 8.8% QoQ at Rs41.06bn versus Rs37.73bn in the quarter ended June.
The results are no great shakes, and the market is unlikely to take kindly to the numbers. The stock along with other IT shares are expected to fall on the disappointing results from Infosys.
Infosys Board of Directors at its meeting held today has declared an interim dividend of Rs6 on each equity share (120% on a par value of Rs5 per share).
The results are no great shakes, and the market is unlikely to take kindly to the numbers. The stock along with other IT shares are expected to fall on the disappointing results from Infosys.
Infosys Board of Directors at its meeting held today has declared an interim dividend of Rs6 on each equity share (120% on a par value of Rs5 per share).
Infosys results disappoint
Waiting is a trap. There will always be reasons to wait. The truth is, there are only two things in life, reasons and results, and reasons simply don't count.
We've had enough of reasons for gains and pains over the last couple of months. The day of reckoning has come corporates in general and Infosys and the IT sector in particular. Infosys results are slightly lower than India Infoline's expectations. The political storm has blown over, for the time being at least. We expect a negative opening on the back of poor numbers from Infosys and expectations of similar earnings reports from other software biggies.
We've had enough of reasons for gains and pains over the last couple of months. The day of reckoning has come corporates in general and Infosys and the IT sector in particular. Infosys results are slightly lower than India Infoline's expectations. The political storm has blown over, for the time being at least. We expect a negative opening on the back of poor numbers from Infosys and expectations of similar earnings reports from other software biggies.
Software stocks fell out of favour with investors after the rupee started accelerating versus the dollar. The inevitable happened, and most IT firms, barring TCS to an extent, announced poor Q1 results and weak outlook. So, not much is expected this quarter either, though Q2 may be somewhat better than Q1. Sequential (QoQ) growth is not expected to be too exciting.
What remains to be seen is whether IT companies announce any improvement in the guidance for the whole year. But, with the rupee rise continuing unabated one may be asking too much from software firms. The hope will be when companies like Infosys would be able to increase their rates in January when most deals are renegotiated.
IT stocks have been laggards this year in contrast to the sharp rally witnessed in the old economy pack and the market as a whole. Having said that there has been some rally in these shares over the past few days. Any further bad news could lead to a fall. Even otherwise, these stocks may be ripe for a correction along with the market.
Coming to the broader market, there is no major change in the sentiment. The dollar deluge continues into the booming stock market. The political storm has blown over, for the time being at least. We expect a positive opening on the back of a firm trend across Asia. The movement later in the day will hinge on Infosys results and the management talk though there is no major threat to the overall momentum.
DLF's Board of Directors will meet today to consider fund raising plans, global acquisitions, participation into the proposed IPO of DLF Offices Trust in Singapore and investment in various development projects in India and abroad.
Among the companies announcing their results are Mastek, Idea Cellular, Abhishek Industries, Container Corp. and Solar Explosives.
The Dow Jones Industrial Average slipped on Wednesday, a day after hitting an all-time high. But, the Nasdaq Composite index managed to buck the trend, ending at its highest level in more than six years.
Alcoa declined the most in a week after sales slipped 3.2%. Monsanto fell after its loss widened on lower-than-expected sales. Boeing posted its steepest drop since August after saying it needs six more months to finish building its new 787 Dreamliners.
The Standard & Poor's 500 Index lost 3 points, or 0.2%, to 1,562.47 after climbing to a record yesterday. The Dow fell 86 points, or 0.6%, to 14,078.69. The Nasdaq added 8 points, or 0.3%, to 2,811.61.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.16 billion shares. On the Nasdaq, decliners beat advancers 8 to 7 on volume of 1.96 billion shares.
In economic news, a government report showed that August wholesale inventories rose a smaller-than-expected 0.1% after rising 0.2% in July.
Treasury prices fell, raising the yield on the benchmark 10-year note to 4.65% from 4.64% late on Tuesday. COMEX gold for December delivery rose $2.90 to settle at $746 an ounce.
US light crude oil for November delivery rose $1.04 to settle at $81.30 a barrel on the New York Mercantile Exchange.
European shares closed higher as strength in the mining sector offset some weakness from oil and gas companies. The pan-European Dow Jones Stoxx 600 index gained 0.1% at 388.23. The UK's FTSE 100 closed up 0.2% at 6,633.00 and the German DAX 30 rose 0.1% to 7,986.57. The French CAC-40 dipped 0.4% to 5,838.49.
In the emerging markets, the Bovespa in Brazil was down 0.6% at 63,197 while the IPC index in Mexico gained 1% at 32,129. The RTS index in Russia added 0.1% at 2143 and the ISE National-30 index in Turkey fell 0.9% to 73,206.
Asian markets rose this morning, led by raw-materials producers and shipping companies, on speculation that global demand for commodities will be able to weather a slowdown in the US economy.
The Nikkei in Tokyo advanced 35 points to 17,212 while the Hang Seng in Hong Kong climbed 270 points to 28,839. The Kospi in Seoul added 3 points to 2044 and the Straits Times in Singapore gained 60 points at 3874.
The Morgan Stanley Capital International Asia Pacific Index rose 0.1% to 167.98 as of 10:49 a.m. in Tokyo, after a two-day, 1.3% rally that lifted the index to a record. Indices of shipping lines and miners were the biggest contributors to the measure's advance today.
The Philippines was the only market to decline in the region.
Another mile stone was achieved as yet again Indian bourses recorded a new all time high close. After hitting the 18,700 mark key indices faced stiff resistance as selling pressure in the FMCG and select Consumer Durable stocks dragged the benchmark index below the 18,700 mark.
Among the BSE sectoral indices, BSE Capita Good index (up 4.3%), BSE IT index (up 3.2%) and BSE Metal index (up 2.5%). However, BSE FMCG index lost 0.20%.
Finally, BSE 30-share benchmark Sensex ended 378 points higher to close at 18,658. NSE Nifty jumped 114 points to close at 5,441.
SBI surged by over 2% to Rs1923 after reports stated that the company would likely get approval for right issue. The scrip touched an intra-day high of Rs1957 and a low of Rs1860 and recorded volumes of over 9,00,000 shares on NSE.
Tata Motors gained by 1.3% to Rs806 after reports stated that the company is firming up plans to launch new cars in 2007-08 and is likely to unveil a new multi-utility vehicle during 2007 and the company has also announced hike in commercial vehicle prices. The scrip touched an intra-day high of Rs818 and a low of Rs773 and recorded volumes of over 11,00,000 shares on NSE.
Lupin gained by 0.5% to Rs588 after the company announced that it acquired
Sun Pharma edged lower by 0.5% to Rs920. The company announced that they have secured US FDA approval to market Trileptal tablets. The scrip touched an intra-day high of Rs941 and a low of Rs918 and recorded volumes of over 2,00,000 shares on NSE.
Metal stocks were among the major gainers. Jindal Steel rallied by over 10% to Rs7414, Hindalco advanced by 3. 7% to Rs170, SAIL was up by 3% to Rs212 and Sterlite Industries added 2% to Rs833.
Sugar stocks were in momentum after the government announced that they would subsidies loans to the sugar mills and make blending of 5% ethanol mandatory. Renuka Sugar jumped over 11% to Rs814, Bajaj Hindusthan surged by over 8% to Rs170 and Balrampur Chini advanced over 5% to Rs75.
Capital Good stocks were the star performers. The index was up by over 4%. BHEL, surged over 4% to Rs2326, L&T rose over 6.5% to Rs3372, ABB gained 1.3% to Rs1397 and Punj Lloyd has added 6.5% to Rs337.
Stocks in News:
ICICI and SBI cut interest rates on new home and retail loans by 50-100 basis points.
RIL set to receive formal approval from the government for its KG basin gas pricing formula.
IOC is in talks with RIL for exploration of latter's oil block in East Timor.
M&M group has announced its foray into retail market with a chain of premium lifestyle stores.
Tata Steel plans to build its own jetty at Haldia river front for an investment of Rs1bn.
Bharti Airtel plans to divest a majority stake in its tower arm Bharti Infratel.
Power Grid Corporation plans a capex of Rs165bn for its transmission projects.
Patni Computer Systems acquired IPR from UK-based Carphone.
Tata Power to invest Rs60bn to generate 1,300MW in Jharkhand.
Power Finance to raise Rs100bn from domestic market in second half of the current financial year.
IDFC Private Equity, a wholly owned subsidiary of IDFC is expected to raise $700mn.
Glenmark Pharmaceuticals to raise funds worth $150mn through the issue of shares and other financial instruments in domestic and International markets.
The Hero Group plans to foray into light electric cargo vehicles through its joint venture with UK-based Ultra Motors.
Jai Corp to invest Rs10bn for its Mumbai SEZ and Rewas Port.
The Rupee hit a new nine year high of 39.31 on Wednesday.
The IMF has cut its estimates for global growth to 4.8%, a cut 0.4% of form its previous estimate.
TRAI panel allows GSM, CDMA work within same license.
The Election Commission announces two phase elections by year end in Gujarat and Himachal Pradesh.
The RBI has recommended a ban on incremental or fresh issuance of Participatory Notes (PN) to overseas investors.
GSM cellular subscriber base increased 3.8% to 153mn, with Bharti Airtel adding 2.06mn mobile users and a market share of 31.8%
September Auto sales skid with two-wheelers, heavy commercial vehicles and three wheelers recording a negative growth.
Fund Activity:
FIIs were net buyers of Rs14.62bn (provisional) in the cash segment on Wednesday while the local institutions pulled out Rs6.97bn. In the F&O segment, foreign funds were net buyers at Rs1.2bn.
FIIs were net buyers of Rs19.51bn in the cash segment on Tuesday.
Major Bulk Deals:
Upper Circuit:
RIIL, Zandu Pharma, Tourism Finance, Evinix, GTC Industies, Usher Agro, Victoria Mills, Swan Mills, IID Forgings, Jai Corp.
Lower Circuit:
Malu Paper and Lloyds Metal.
BOARD MEETINGS FOR OCT 11 ,2007.
| ABSHEKINDS | ABHISHEK INDUSTRIES LIMITED | Unaudited Financial Results for the Qtr ended Sept 30, 2007 |
| ANTGRAPHIC | ANTARCTICA LTD | Issue of Equity shares on preferential basis |
| CONCOR | CONTAINER CORPORATION OF INDIA LIMITED | Unaudited Financial Results |
| DLF | DLF LIMITED | Raising of Funds/Others |
| IDEA | IDEA CELLULAR LIMITED | Audited Financial Results |
| INFOSYSTCH | INFOSYS TECHNOLOGIES LTD. | Audited Financial Results/Dividend/Record Date/Others |
| MASTEK | MASTEK LTD | Unaudited Quarterly results/Buyback |
| SOLAREX | SOLAR EXPLOSIVES LIMITED | Unaudited Financial Results/Dividend |
| TCIFINANCE | TCI FINANCE LIMITED | Unaudited Financial Results for the Qtr ended Sept 30, 2007 |
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