Crude gives up yesterday's gains

 Crude prices lose more than a dollar as stockpiles rise less than expected

Crude prices closed more than $1.5/barrel lower today, Wednesday, 14 May, 2008 after the greenback rose significantly and also after Energy Department reported that crude stockpiles rose less than expected last week. Prices for crude oil have been hovering around $125 for quite some time now against a backdrop of disruptions to oil production in Nigeria.

Crude-oil futures for light sweet crude for June delivery today closed at $124.22/barrel (lower by $1.58/barrel or 1.3%) on the New York Mercantile Exchange. Price touched a high of $125.85 earlier during the day.

Last week, crude prices ended higher by 8.8%. For the year, crude is up by 25.9% till date.

The Energy Department reported today that crude inventories rose to 325.8 million barrels, up 200,000 barrels, for the week ended 9 May. Supplies have now increased a total of 12.1 million barrels over the course of four weeks.

Distillate inventories, which include heating oil and jet fuel, climbed 1.4 million barrels on the week to stand at 107.1 million barrels. Distillates at 107.4 million barrels, were down 2.4 million barrels. Gasoline supplies fell more than expected last week, the reports showed. They were down 1.7 million barrels to 210.2 million barrels.

EIA also reported that total implied U.S. fuel demand fell 2.7% from a year earlier to 20.3 million barrels a day last week. Consumption averaged 20.5 million barrels a day in the past four weeks, down 0.3% from a year earlier.

At the currency markets on Wednesday, the dollar posted healthy gains against major rivals after a rally in stocks offset a calmer-than-anticipated reading on U.S. inflation. The euro resumed its slide vs. the dollar.

The Labor Department reported today that the consumer-price index rose 3.9% in the 12 months ended April. Excluding volatile food and energy prices, the core consumer price index increased 0.1%, against an expected 0.2%.

Brent crude oil for June settlement today fell $2.24 (1.8%) to $121.86 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.

U.S. natural gas rose to the highest since December 2005 after Enterprise Products Partners LP delayed resumption of a pipeline. Natural gas for June delivery rose 17.6 cents (1.5%) to settle at $11.598 per million British thermal units. Futures have gained 55% so far this year.

Against this backdrop, June reformulated gasoline fell 2 cents to end at $3.18 a gallon and June heating oil finished down 8 cents at $3.62 a gallon.

EIA reported last week that global oil consumption will likely grow by 1.2 million barrels per day this year, but the consumption of liquid fuels and other petroleum is expected to decline by around 190,000 barrels per day because of the economic slowdown and high petroleum prices. The EIA also expects regular gasoline prices to average $3.52 per gallon this year, up 71 cents from a year ago.

Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude's biggest yearly gain in five years.

Precious metals drop for third straight day

Gold prices give up $19 in last three sessions as dollar goes up

Precious metals ended modestly lower once again on Wednesday, 14 May, 2008. Dollar strengthening up against its rivals was the main reason behind this. The dollar was strong today following report that US consumer cost rose less than expected in April, 2008.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for June delivery fell $3.1 (0.3%) to close at $866.5 ounce on the New York Mercantile Exchange. With today's drop, the yellow metal lost $19 in the last three sessions. Last week, gold prices ended higher by $3.2 ($27.8). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. Prices have dropped by 16% since then.

This year, gold prices have gained 3.4% for the till date against a 8% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery fell 21.5 cents (1.3%) to $16.613 an ounce. Silver has gained 11% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Wednesday, the dollar posted healthy gains against major rivals after a rally in stocks offset a calmer-than-anticipated reading on U.S. inflation. The euro resumed its slide vs. the dollar.

The Labor Department reported today that the consumer-price index rose 3.9% in the 12 months ended April. Excluding volatile food and energy prices, the core consumer price index increased 0.1%, against an expected 0.2%.

In the crude market, crude prices fell today and closed below $125/barrel after the government report showed that U.S. crude-oil supplies rose less than expected.

Asian economies doing well - Merrill

Asia's strong economic growth will persist despite an ailing US economy as the region diversifies its export markets and a new breed of young and wealthy citizens drive consumption, investment bank Merrill Lynch said Wednesday.

Inflation is a bigger risk to the region than a slowdown induced by a recession in the United States, the world's biggest economy, said Timothy Bond, Merrill Lynch's chief Asia economist.

Despite a global credit crunch resulting from a crisis in the US housing market, Asian economies expanded 9.5 per cent and china grew 11.5 per cent in the second half of last year, he said at a Merrill Lynch conference in Singapore.

In the first quarter of this year, the region is expected to grow slower but still robust 9.0 per cent, and China 10.5 percent, he said.

"I think we have a lot of evidence to support the decoupling view," he said, referring to a view that Asian economies are now in a better position to withstand the impact of a US recession, unlike in the past.

Bond also noted that while Asian exports to the United States were flat last year, shipments of made-in-Asia goods to the rest of the world expanded 19 per cent.

"I think the message here is that there is a lot of strength in the global economy despite some very clear headwinds in the US economy, and this is a region that exports to the world, not just the United States," he said.

Asian exports to Europe have been growing 25-28 per cent annually mainly due to the stronger euro currency which makes Asian goods cheaper, he said, adding that intra-Asian trade has also increased.

"Europe has been the number one driver of Asian exports over the past few years, not the United States," Bond said.

Any slowdown in exports should be offset by an acceleration in consumption, powered by the emergence of younger and wealthier Asians who, unlike their parents, would like to spend their money, Merrill Lynch experts said.

Jyoti Jaipuria, Merrill Lynch's head of equity research in India, said 50 per cent of India's more than one billion population are below the age of 30 and many of them are becoming richer and are more likely to spend.

In India "the consumer is learning to blow up money just like in the US," he said.

"In the last five years, you have seen people become wealthier in this region... There's many more millionaires in Asia now than there were five years ago," said Mark Matthews, chief Asia equities strategist at Merrill Lynch.

"So even if their costs are going up and they are complaining about the gasoline (and) their food, the fact is that they are living in nicer places, they are going on longer holidays and they are spending more."

Company Background - Ranbaxy Labs

The company manufacture and markets, generic pharmaceuticals, value added generic pharmaceuticals, branded generics, active Pharmaceuticals (API) and intermediates by using finest R&D and Manufacturing facilities, which was named as Ranbaxy Laboratories Limited (RLL), had its origins in the early 1960s when Ranjit Singh and Gurbux Singh, two employees of a Japanese pharmaceutical company operating in India, formed their own pharmaceutical preparations company in Amritsar, in Punjab state. Two of them merged their names to form the name for their company as Ranbaxy. The company was incorporated in the year 1961 and linked up with a European pharmaceutical company, began production in 1962. Ranbaxy's owners sought additional financing and turned to a local moneylender, Bhai Mohan Singh, by 1966 the lender came to collect, the Ranbaxy partners offered to turn over their company to him instead. After that pathetic situation, Singh agreed to the deal and launched the Ranbaxy family on the path toward building one of India's largest business empires. Under Bhai Mohan Singh, Ranbaxy initially maintained its course of preparing and packing existing branded pharmaceutical products for the Indian market. The entry of Singh's eldest son, Parvinder, into the company in 1967, however, set the company on a new course to become a fully independent pharmaceutical company.

The Company ranked amongst the top ten global generic companies and has a presence in 23 of the top 25-pharma markets of the world. The Company with a global footprint in 49 countries, world-class manufacturing facilities in 11 and a diverse product portfolio, is rapidly moving towards global leadership, riding on its success in the world's emerging and developed markets. Ranbaxy's diverse product basket of over 5,000 SKUs available in over 125 countries worldwide encompasses a wide therapeutic mix covering a majority of the chronic and acute segments.

Ranbaxy is among the few Indian pharmaceutical companies in India to have initiated its research program in the late 1970's. Ranbaxy's good fortune came in 1970, when the Indian government passed legislation that effectively ended patent protection in the pharmaceutical industry. The company expanded quickly, and by 1973, Ranbaxy opened a new factory, in Mohali, for the production of active principal ingredients (APIs) and the company went to public in the same year 1973. To support its global ambition, a first of its kind world class R&D centre was commissioned in the year 1994, which has enabled the company to begin to enter the new chemical entities (NCE) and novel drug delivery systems (NDDS) markets. In 1977 the company begins production in Lagos, Nigeria through a joint venture and in 1983 opens a dosage plant in Dewas. The company builds a state-of-the-art API facility in Toansa in preparation for entry into the U.S. market during the period of 1987. The company's joint marketing agreement was made with Eli Lilly in 1992. A joint venture was launched in China; a new research-driven NCE and NDDS strategy was came to effect on 1993. During 2004-05 the company opens a new research and development facility in Gurgaon, India, the company acquires Ohm Laboratories in the United States and builds a new FDA-approved production facility.

Ranbaxy's own branded drugs were pierced into market in United States and the company got underway-clinical trials on the first in-house developed molecule in the year 1998. Ranbaxy is focused on increasing the momentum in the generics business in its key markets through organic and inorganic growth routes. It continues to evaluate acquisition opportunities in India, emerging and developed markets to accentuate its business and competitiveness. RLL acquired Basics, Bayer's generics business in Germany during the period 2000. The company opened a new manufacturing plant in Vietnam on 2001 and again company acquired RPG (Aventis) in France, becoming the leading generics manufacturer for that market in 2003, it sought new alliances, the company reached a global drug discovery and development partnership with GlaxoSmithKline in the same year. Due to the high demand and expanding nature, the company launched a new production facility in Brazil in 2005 worth of $100 million. In 2006 the company established a wholly owned subsidiary in Sweden under the name of Ranbaxy Pharma AB for manage the operations in the territories of Sweden, Norway, Denmark & Finland and the company has formed a Joint venture in South Africa under the name of Sonke Pharmaceuticals (proprietary) Ltd. RLL acquired Terapia SA (Romania), Ethimed (Belgium), Allen (Italy), Mundogen (Spain) and Sentek PLC's Proprietary Technology and also the company has entered into an agreement for acquisition on 100% Equity stake in Bio-Tabs Pharmaceuticals (Proprietary) Ltd (SA) during the period of 2007.

In January 2008, RLL entered into the Chyawanprash segment, launched its sugar-free product under the Brand name Chyawan Active'. The product marketed by Ranbaxy's Global Consumer Healthcare division, will be initially introduced in North India (Delhi, UP, Punjab and Bihar) and later in other parts of the country. In February of the year the company made De-merger of the Company's New Drug Discovery Research (NDDR) Unit into a subsidiary, Ranbaxy Life Science Research Ltd. (RLSRL). As on April 2008 the Company has received final approval from the U.S. Food and Drug Administration to manufacture and market Cetirizine Hydrochloride Oral Solution (Allergy) and Children's Cetirizine Hydrochloride Oral Solution (Hives-Relief), 1 mg/ml (OTC), Ranbaxy Laboratories Limited (Ranbaxy) and Orchid Chemicals & Pharmaceuticals Limited (Orchid) entered into a business alliance agreement involving multiple geographies and therapies for both finished dosage formulations and active pharmaceutical ingredients. During the same month of the year, the company has pierced into a collaborative research agreement with the Department of Biotechnology (DBT), New Delhi, in the area of New Drug Discovery Research (NDDR). The research will be conducted under the aegis of DBT's major initiative in the area of tuberculosis. The Company has received authorization from Ministry of Health and Labour Welfare (MHLW-Japan) for marketing the generic version of Amlodipine tablets 2.5mg & 5mg and launched BONISTA- Teriparatide injection (recombinant human parathyroid hormone) for the treatment of Osteoporosis, in collaboration with Virchow Biotech Pvt Ltd, Hyderabad, India. Ranbaxy is the first company to launch this bio-generic product in the world.

The Company is serving its customers in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries. RLL working towards achieve excellence and set new global benchmarks. Driven by its vision to become a global leader the Company reinvents itself to achieve sustained growth and leadership in Research-based International Pharmaceutical.

Company Background - Bharat Electronics

Bharat Electronics (BEL), the public sector giant, is one of the largest manufacturers of radars, wireless communications systems and other technical equipment for the defence forces in the country. Until recently, the company's performance was under strain due to the post-Pokhran nuclear blast sanctions by the United States. However, post Kargil, the government has realised the need to increase its focus on acquiring strategic technical equipment for defence forces which has dramatically changed the fortunes ofthe company. It was incorporated in 1954 at Bangalore as wholly owned by the Government of India, till disinvestment took place in 1991-92.

In 1989-90, the company diversified into consumer and entertainment electronics and telecommunications. In 1991-92, it entered into a joint venture with Delft Instruments, Holland, under the name BE-Delft Electronics to manufacture second generation image intensifier tubes at Pune and this joint venture company has become a subsidiary of the company with effect from 30th July 2002. Further the name of BE-Delft Electronics was changed to BEL Optronic Devices Ltd. The company is having two joint ventures, one with General Electric, USA, that is GE BEL (P) Ltd and another joint venture company is BEL Multitone Ltd which was jointly promoted with Multitone PLC., UK for marketing paging equipment. In addition to the Defence department, Department of Telecommunications, Doordarshan and Videsh Sanchar Nigam are the major clients of the company.

Many of the products like decoy radars, upgraded air defence weapon control radars, coastal surveillance systems, low power transmitters, telemedicine systems, PC motherboard-based chipsets, etc. have been inducted into service or are under final stages of evaluation by various customer groups.

In the year 2001-02 the company became the first Defence Public Sector Enterprise to acquire operational Mini Ratna Category-I status. The Company has also been awarded Satellite Network contract by Andhra Pradesh Beverages Corporation Limited. The main application is for consolidating the sales transactions on-line by 31 remote centres with APBCL HQ at Hyderabad. These projects are being executed under B-O-O-T model.

During 2004-05 the company has is implenmenting the Multi-purpose National Identity Card Project for the Registrar General of India, Ministry of Home Affairs. Further the company is also implementing the first phase of EDUSAT project, VSAT communication links from 14 hubs to 800 Satellite Interactive Terminals and 150 Receive only Terminals and Learning Management Software as the application package. Phase II of the poject with similar scope is likey to be taken up during 2005-06.

BEL has successfully developed and started manufacture of Set Top Boxes for Direct to Home reception under the brand name 'BEST Box' for Indian operating conditions. The company is under the progress of upgradation of Air Defence Guns for Indian Army. The company has commissioned a Multi-crystalline Solar Cells Plant at its Bangalore Unit. Ramping up of the production capacity to 10 MW is in progress. The company is also expanding the production capacity of Vacuum Interrupter Tubes from 35000 tubes per annum to 50000 tubes per annum.

The company has introduced new products during 2004-05, they are battlefield Surveillance System is an important component of Network Centric Warfare, improving combat effectiveness manifold, an upgradation programme of 3D Static Radars (THD 1955) to the Indian Air Force for long range air surveillance application during 1974-92 and programme is done jointly with M/s Thales, France, to extend their life by another 15 to 20 years. Further the company has developed Advanced Land Navigation System for the purpose of land navigation in Armoured Fighting Vehicles (Battle Tanks) such as T-72 Tanks, T-90 Tanks, BMP-II and AERV. Also the company has developed S-Band Mobile Satcom Terminal and Ellora, a Electronic Warfare System.

A little long way!

If you add a little to a little and do this often, soon the little will become great.

With little action left in the markets, it makes sense to do just a little these days. The bulls managed to ward off the challenge from the bears on Wednesday, with the key indices ending sharply higher. Buying in IT and metals helped lift the Nifty past the 5,000 mark. Select consumer discretionary and auto shares too advanced while PSU and banking stocks ended lower. However, one should not read too much into Wednesday's pullback, as both traded volume as well as turnover fell sharply from the previous day.

For the day, we expect a better opening as most global markets are up. Intra-day gyrations are a given these days. Remain careful and selective while dabbling in fresh purchases. Pick up small quantities at lower levels to rebuild a long term portfolio.

The market breadth was only marginally positive, indicating that the bulls are still lacking in confidence. The small-cap and mid-cap indices were also subdued, meaning that strength in select large caps propped up the main indices. The market remains in a consolidation phase, and will continue to see alternate bouts of buying and selling. No clear trend is visible at this juncture, as negatives still outweigh the positives (if there are any).

Delivery volumes have taken a sharp dip, which underscores the current uncertainty and anxiety among the bulls on future direction of the market. FII inflows have slowed down considerably this year, which is proving to be a major stumbling block for the bulls. Inflation remains a formidable challenge as does the slowdown in the overall economy. India Inc's facing several headwinds on the cost front. As a result, the market is likely to remain sideways and rangebound in the near term.

Key Results Today: Chambal Fertilizers, Chennai Petroleum, Morepen Labs, Nelco, OCL India, PNB, Tamil Nadu Petroproducts, Torrent Power, Voltas, Zuari Industries and Zylog Systems.

Mercator Lines has reported strong results for Q4 and full year. The company has posted almost a 3-fold jump in net profit for FY08 at Rs3.7bn, supported by growing fleet, buoyant shipping demand and firm freight rates in dry carriers segment.

Cement stocks could be under pressure after companies pledged to cut prices, joining steelmakers in the government's efforts to curb inflation.

BASF SE, the promoter of BASF India has announced a voluntary Open Offer to purchase up to 6,289,591 shares (constituting 22.3% of the issued share capital of BASF India) at Rs274 per share for a total consideration of Rs1.72bn (assuming full acceptances are received in the Offer).

Maxwell Industries' Board will meet today to discuss the inter-se-transfer of shares among the promoters of the company. According to a financial daily, the Reddy family - a co promoter - is likely to sell its entire holding of 32% to other promoter, the Pathare family.

FIIs were net buyers of Rs851.2mn (provisional) in the cash segment yesterday while local institutions poured in Rs3.1bn. In the F&O segment, foreign funds were net sellers of Rs2.55bn. On Tuesday, FIIs were net buyers of Rs1.86bn while Mutual Funds were net sellers of Rs3.05bn.

Asian stocks rose the most in two weeks, led by technology companies, after Sony and NEC Electronics forecast higher-than-expected profit.

The MSCI Asia Pacific Index gained 1% at 151.52 as of 10:51 a.m. in Tokyo, poised for its largest advance since May 2. Almost four stocks rose for each that declined today.

Japan's Nikkei 225 Stock Average was up 1% at 14,258.45. All other Asian benchmark indexes rose, apart from New Zealand and the Philippines.

Sony shares surged the most in more than two years in Tokyo after the consumer electronics giant's Q1 results surpassed market expectations. NEC posted its steepest advance in 10 months.

Coca-Cola Amatil, Australia's biggest soft-drinks maker, jumped after saying net income will rise this year. Nippon Steel climbed the most in two months after a newspaper said Toyota agreed to pay more for the alloy.

US stocks ended higher on Wednesday, buoyed by a milder-than-expected consumer price inflation data and falling oil prices. But a late-session sell-off in technology shares checked further gains.

Financial and consumer discretionary stocks gained following the benign CPI report, while a smaller-than-expected loss posted by mortgage lender Freddie Mac helped ease credit-market jitters.

Off a triple-digit rise, the Dow Jones Industrial Average finished at 12,898.38, up 66.20 points, or 0.5% from the last close. All but five of its 30 components closed the day in positive turf, with HP and Verizon leading the blue-chip advance. Caterpillar and McDonald's lost the most ground, each down more than 1%.

The S&P 500 gained 6.52 points, or 0.4%, to end at 1,408.66. The technology-laden Nasdaq Composite climbed 1.58 points, less than 0.1%, to 2,496.7. Nine of ten industry groups in the S&P 500 rose as the Labor Department's April inflation report gave the Federal Reserve more leeway to stimulate the economy.

Macy's helped spark a rise among retailers, with the department-store operator maintaining its full-year profit forecast, while reporting a first-quarter loss. Freddie Mac, the second-largest US mortgage-finance company, rallied the most in six weeks after reporting a smaller loss than analysts estimated.

Market breadth was positive. Seven stocks advanced for every five that fell on the New York Stock Exchange.

The CPI rose 0.2% in April, versus forecasts for a rise of 0.3%. Stripping out food and auto sales, CPI rose 0.1%, versus expectations for a rise of 0.2%. Food prices played a big role in the rise in prices, posting the biggest jump in 18 years.

US light crude oil for June delivery fell $1.58 to settle at $124.22 in New York, despite a weaker-than-expected weekly inventories report. On Tuesday, crude hit a record trading high of $126.98 a barrel during the session.

The national average price for a gallon of regular unleaded gas rose to a record $3.758 from $3.732 the previous day, according to AAA. It was the seventh record in a row.

COMEX gold for August delivery fell $2.90 to $871 an ounce. The dollar firmed up a bit versus the euro and the yen. Treasury prices rose, lowering the yield to 3.90% from 3.92% late on Tuesday.

Thursday brings the weekly jobless claims report, readings on manufacturing in the New York and Philadelphia areas, and earnings from JC Penney.

M&A speculation, earnings and a better-than-expected reading on core US inflation lifted stocks in Europe. The pan-European Dow Jones Stoxx 600 index turned higher in a volatile session, to finish up 0.5% at 327.20.

The French CAC-40 climbed 1.1% to 5,055.24, while the UK's FTSE 100 closed up 0.1% at 6.216.00 and the German DAX 30 rose 0.3% to 7,083.24.

In the emerging markets, the Bovespa in Brazil was down 0.7% at 70,026 while the IPC index in Mexico climbed 1.45% to 31,336. The RTS index in Russia surged 2.8% to 2406 while the ISE National 30 index in Turkey jumped 1.9% to 52,392.

Bulls may be tested again

Markets started off the day with a negative bias mirroring overnight losses in the US markets. However, as the day progressed key indices gradually gained momentum on back of positive cues from the Asian markets. The momentum was further carried as the IT and Metal stocks attracted buying which saw the Nifty index close above the crucial 5k mark. Finally, the BSE benchmark Sensex ended 225 points higher to close at 16,948 and the Nifty index gained 53 points to close at 5,011.

Overall about 1,417 stocks advanced; 1,245 stocks declined while 88 stocks remained unchanged. Among the 50-Nifty 37 stocks ended in green and 13 stocks ended in red.

Strides Arcolab surged by over 3.5% to Rs182 after the company announced receipt of ANDA approval for Flumazenil Injection USP. 0.1 mg / ml multiple dose vial. The product is licensed to Akorn-Strides, LLC, which is a joint venture that was funned in 2004 by Akorn, Inc and Strides Arcolab Ltd. The scrip touched an intra-day high of Rs195 and a low of Rs175 and recorded volumes of over 95,000 shares on NSE.

Sun Pharma Advanced gained by over 2% to Rs95 after the company announced its Q4 net profit at Rs144.7mn (up 190.5%) and the revenue was at Rs245.1mn. The scrip touched an intra-day high of Rs100 and a low of Rs93 and recorded volumes of over 14,00,000 shares on NSE.

LITL rallied by over 10% to Rs513 after the company announced that it secured Rs80bn International terminal project in Kerala. The scrip touched an intra-day high of Rs526 and a low of Rs446 and recorded volumes of over 17,00,000 shares on NSE.

JSW Steel surged by over 4% to Rs996 after the company announced that it posted 14% growth in crude steel production in April' 2008 including production of Salem works for corresponding period on comparable basis. JSW Steel also registered a 12% growth in Rolled flat product (HR Coils & Plates) & 33% growth in Rolled long products segments. The scrip touched an intra-day high of Rs1044 and a low of Rs950 and recorded volumes of over 5,00,000 shares on NSE.

The IT stocks were in momentum as the Indian rupee further depreciated to Rs42.45 per dollar. IT bellwether Infosys gained by over 4.5% to Rs1826, Satyam gained by a percent to Rs501, Wipro advanced by 2% to Rs503 and i-Flex added over 4.5% to Rs1386.

Apollo Tyres ended flat to Rs42, there were reports stating that Apollo Tyres partly owned by Michelin & Cie. would spend Rs10bn this year to raise capacity. The scrip touched an intra-day high of Rs43 and a low of Rs42 and recorded volumes of over 1,00,000 shares on NSE.

SCI rallied by over 6% to Rs258 after the board of directors of the company said it will consider bonus issue proposal. The board of directors of the company would meet on May 20, 2008 to consider the proposal. The scrip touched an intra-day high of Rs264 and a low of Rs249 and recorded volumes of over 3,00,000 shares on NSE.

Corporate News

The Joint Venture between SREI Infrastructure Finance and BNP Paribas Lease Group - announced last year - has started operations in April under the name of SREI Infrastructure Development Finance Pvt Ltd.

A JV between Kirloskar Brothers, Maytas Infrastructure and MEIL has received a contract worth Rs9.34bn from the Irrigation & CAD Department of the Andhra Pradesh government. Kirloskar Brothers' portion of this order is Rs1.5bn.

Kinetic Motors has clarified that the news about M&M buying a majority stake in it is purely speculative. The company says it is exploring various alternatives to raise funds for its two wheeler business. However, no definitive agreement has been entered with any investor or M&M.

Trans Freight Containers has sold the entire 30,00,000 shares of Morteo Trans Freight Reefer Containers and therefore the latter is no longer a subsidiary of the company.

Tata group plans to up stakes in globally active subsidiaries by 3-4% this year. (BS)
Bharti and MTN in talks for 50:50 cash-share deal. (BS)
Lafarge buys L&T's concrete business for Rs14.8bn. (BS)
Consortium led by Lanco Infratech wins Rs80bn Kerala port project. (Mint)
SBI and GE Money split credit card JV into two separate operations. (Mint)
Kotak Mahindra Bank to raise US$1.2bn. (Mint)
EDS arm, Mphasis may go private following HP deal. (Mint)
Punj Lloyd plans to offer onshore oil rigs to Libya's National Oil Corporation. (Mint)
Supreme Court stays order against Tata-BEST power pact. (Mint)
Satyam loses appeal barring its moves to block the online mobile payment company Upaid's fraud and forgery claims against it in Texas. (Mint)
Belgium based Cockerill Maintenance and Ingenierie makes open offer to acquire 20% in Flat Products. (BS)
Apollo Tyres will spend Rs10bn to add capacity. (BS)
Maharashtra government takes ICICI Lombard to court for not settling farmer related claims. (BS)
Lupin embarks on Rs3bn expansion plan. (BL)
ONGC promoted company enters into MoU with Torrent Energy for supply of bulk power at Dahej. (BL)
Cash crunch affects IOC's investment plans; part retail expansion proposal on hold. (BL)
Shyam Telelink gets CDMA spectrum in Maharashtra. (BL)
BSNL decides to deploy HP's disaster recovery solutions. (BL)
Vodafone Essar seeks FIPB approval for investment in tower company. (BL)
PNB not to cut deposit rates for now. (BL)
Syndicate Bank reprices its bulk deposits. (BL)
SC dismisses BSNL's appeal seeking to recover revised charges from BPL Mobile, and Idea Cellular. (FE)
ONGC to boost production from Bassein. (FE)
Omaxe to invest US$20bn to build 1mn homes. (FE)
ONGC files review petition on disputes on being denied entitlement to tax holiday. (FE)
Wadias sue Rahejas for alleged breach of agreement pertaining 478 acres of land, to claim damages of Rs13.7bn. (FE)
GHCL eyes US furnishing firm Linens 'N Thing. (ET)
Mphasis to scale up operations in India, to raise India headcount by 8,000. (ET)
Mascon Global acquires US-based Ebusinessware Inc, for US$35mn. (ET)
HB Stockholdings revises open offer to acquire 20% of DCM Shriram from Rs120 to Rs130 per share. (ET)
PFC signs MoU with Exim Bank of US for a credit of US$800mn. (ET)
SBI set to launch its Mobile Banking Services by end of June. (ET)

Economic News

Shipping regulator exempts Indian vessels from age bar. (BS)
New players allocated spectrum in Kerala. (BS)
Pharma firms opt for in-licensing to increase sales. (BS)
1.565mn demat accounts stay frozen for lack of PAN details. (BL)
Supply to sugar mills may be hit as cane area shrinks. (BL)
Government to consider fresh pricing of gas from KG Basin. (FE)
The railway ministry enters into an agreement with SNFC International, France. (FE)
Indirect tax collection grew 11% in April 2008. (ET)
Excise Duty collection fell by 3.9% to Rs64.10bn in the first month of the fiscal year. (FE)
Custom duty collection grew 24.9% to Rs90.18bn in April 2008 against Rs72.21bn in same month last year. (ET)
Monsoon to reach Kerala on May 29, three days early. (FE)
The DoT may allow foreign telcos to bid during the upcoming 3G auction. (ET)
Railways to consider removing 30% port congestion surcharge on iron ore for local use. (ET)
India tapping Non-NSG's (Nuclear suppliers group) members to explore possibilities of importing fuel for its nuclear plants. (ET)

Today's Pick - Indusind Bank

We recommend a sell in IndusInd Bank from a short-term perspective. It is evident from the charts that the stock was on a medium-term uptrend between late March 2008 and early May 2008, from its a low of Rs 68 to an high of Rs 105. After finding resistance around Rs 105, the stock reversed direction and began to decline.

On May 12, the stock breached the medium-term up trendline. The stock witnessed moving average compression at around Rs 90 levels and has now penetrated these average lines. The daily and the weekly momentum indicators are declining in the neutral region.

The stock appears to have resumed the long-term downtrend and we are also bearish on it in the short-term. We expect the stock's down move to continue until it hits our price target of Rs 74 in the upcoming trading sessions. Investors with short-term perspective can sell the stock while keeping the stop-loss at Rs 90.

Via BL

Good news for IPO investors !

 Investors no longer have to wait for weeks for refund of their IPO application money.

The application money earmarked for an IPO will now remain in the applicant's bank account till the allotment is finalised, thus eliminating the refund process, SEBI said on Tuesday, addressing a long-standing grouse among investors, particularly in the retail segment.

"The modalities in this regard would be worked out separately," said a news release from SEBI, issued after its Board met on Tuesday.

"The Board approved, in principle, the concept of making lien on bank account as an alternative mode of payment in public/rights issues."

This means that the money marked for the IPO will not be used for any other payment obligation during that period.

At the same time, the applicant will enjoy the interest payable on the amount.

This would also reduce the burden on registrars and merchant bankers. But bankers to the issue can no longer enjoy the floating interest, said officials associated with the IPO process.

Most important of all, investors would not have to wait for their refund money. It also ensures that a liquidity crisis such as that of January 2008 does not occur again.

At that time, many investors were unable to buy scrips which were at attractive lows, as their money was locked up in the Reliance Power and the Future Capital IPOs. Nor could they meet their margin money requirements.

PMs – NO POOLING

The SEBI Board also decided to disallow the pooling of investors' money by portfolio managers.

"Portfolio managers should not float a scheme or pool the resources of the client in a way which is akin to mutual fund activity," said SEBI.

They have been allowed six months' time to convert their operations managed on pooled basis to individual basis.

The Board also decided to enhance the minimum net worth requirement for registration of portfolio managers from the existing Rs 50 lakh to Rs 2 crore in a phased manner.

via BL

Precious metals register significant drop

 Gold and silver prices close lower as the dollar climbs up

Precious metals ended significantly lower on Tuesday, 13 May, 2008. Dollar strengthening up against its rivals was the main reason behind this.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Comex Gold for June delivery fell $15.3 (1.7%) to close at $869.6 ounce on the New York Mercantile Exchange. Last week, gold prices ended higher by $3.2 ($27.8). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce.

This year, gold prices have gained 4.3% for the till date against a 8% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery fell 40 cents (2%) to $16.83 an ounce. Silver has gained 12.8% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

On the currency markets on Tuesday, the U.S. dollar climbed against other major currencies after the Commerce Department reported better-than-expected April retail sales. The euro extended losses against the dollar and traded at $1.5482, down from late Monday.

Commerce Department reported today that U.S. retail sales fell for the third time in the past five months in April, led by a big decline in auto sale, but were slightly stronger than the 0.3% drop expected.

In the crude market, crude futures closed higher as issues over Iranian oil production, uncertainty ahead of weekly data on U.S. inventories and a rally in heating oil prices combined to briefly lift oil to uncharted territory near $127 a barrel.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

At the MCX, gold prices for June delivery closed lower by Rs 133 (1.1%) at Rs 11,828 per 10 grams. Prices rose to a high of Rs 11,951 per 10 grams and fell to a low of Rs 11,731 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 419 (1.8%) lower at Rs 23,048/Kg. Prices opened at Rs 23,420/kg and fell to a low of Rs 22,750/Kg during the day's trading.

Company Background - Mindtree Ltd

The company was incorporated as MindTree Consulting Private Limited on August 5, 1999 by a group of ten individual promoters of which three of them invested through an entity incorporated in Mauritius. The company is an international IT consulting company that delivers affordable business and technology solutions through global software development. Co-headquartered in Somerset, New Jersey and Bangalore, India, the company's seasoned management team and employees skilled in technology, business analysis and project management approach technology initiatives in a business context. The company also delivers product-development services and designs reusable building blocks for high-tech companies. The company is also present in California, Illinois, New Jersey, Virginia and Colorado in the U.S., United Kingdom, Germany, Singapore, Japan, Middle East, Australia, Switzerland and Sweden. The company has structured into two business units that focus on software development - IT Services and R&D Services. The company have clients that range from Fortune 10 companies to enterprise software organizations.

In September 2004, the company has acquired the software divisions of ASAP Solutions Private Limited ('ASAP') and Arachno Solutions Private Limited ('ARSPL'). ARSPL is a wholly owned subsidiary of ASAP, and both companies were engaged in, inter alia, providing information technology services, specifically SAP implementation and maintenance, data management and customized application development in Asia and USA. The company has acquired the software business of ASAP Solutions Inc., the wholly owned subsidiary of ASAP through a concurrently operating agreement.

In June 2005, The company has acquired 100% share capital of Linc Software Services Private Limited engaged in the business of application development and maintenance, ERP product support and webdevelopment. By virtue of the acquisition, Linc Software Services Private Limited, subsequently renamed as MindTree Software Services Private Limited, became subsidiary of MCL. Further, by a scheme of arrangement as approved by the High Court of Karnataka dated July 28, 2006, MindTree Software Services Private Limited was merged with MCL w.e.f April 1, 2005.

February 2007, the company has entered into capital market. The company has issued 55,93,300 Equity shares to the public. Issue price is Rs.425/- per share.

Company Background - TCS

Established in 1968, Tata Consultancy Services has grown to its current position as the largest IT services firm in Asia based on its record of outstanding service, collaborative partnerships, innovation, and corporate responsibility. TCS is headquartered in Mumbai, and operates in more than 50 countries and has more than 170 offices across the world. In the year 1979 it established its first office in New York City. It is the world's first organisation to achieve an enterprise-wide Maturity Level 5 on quality improvement models, CMMI and P-CMM, using the most rigorous assessment methodology, SCAMPISM. TCS Division of Tata Sons Ltd was transferred to TCS as on April 2004 for a consideration of Rs.2300 crores and the company went to public in the same year 2004.

The company's major areas of business are comes under five services, such as Consulting, Information Technology Services, Business Process Outsourcing, Infrastructure Outsourcing, Engineering and Industrial Services which covers the industries namely Banking and Financial Services, Energy and Utilities, Government, Healthcare and Life Sciences, Hi Technology, Insurance, Manufacturing, Retail, Telecom, Travel and Hospitality.

During the year 2004-05 the company has acquired WTI Advanced Technology LTD and TCS Business Transformation Solutions Ltd (Previously, Phoenix Global Solutions (India) LTD), subsequently these two companies have turned as the subsidiaries of the company. In between 2005-06, the year covers the acquisitions of three companies Comicrom S.A., Chile, Financial Network Services (Holdings) Pty Ltd, Australia (FNS) and Swedish Indian IT Resources AB (SITAR). Tata Infotech Limited and three wholly owned subsidiaries of the company, viz Airline Financial Support Services (India) Ltd (AFSL), Aviation Software Development Consultancy India Ltd (ASDC) and TCS Business Transformation Solutions Ltd (TCS BTS) have amalgamated with the company on April 2005. Apart from this the company made strategic alliances during the year with Diligenta Limited for Life Insurance business and entered into a Joint Venture Agreement with the State Bank of India (SBI). The new company was formulated and named C-Edge Technologies Limited (C-Edge) to provide advanced technology solutions and world-class domain consulting for the banking and financial services sector.

In the year of 2006, TCS formed a company as MP Online Limited, partnership with the Government of Madhya Pradesh, offering a wide range of computer enabled services in the State of Madhya Pradesh. The company, through its wholly owned subsidiaries Tata Consultancy Services Asia Pacific Pte Ltd and Tata Consultancy Services Malaysia Sdn Bhd, subscribed to 100% share capital of PT Tata Consultancy Services, Indonesia, a Company formed to provide consulting and IT related services in Indonesia. Through its wholly owned subsidiary Tata Consultancy Services Netherlands B.V., acquired 75% equity interest in Switzerland based TKS - Teknosoft S.A., for a consideration of Rs. 368.06 crores The company, through its wholly owned subsidiary TCS FNS Pty Limited, acquired 100% equity interest in an Australia based company TCS Management Pty Ltd., for a total consideration of Rs. 15.75 crores. TCS's share capital of Tata Consultancy Services (China) Co., Ltd leads the company to frame a partnership with Chinese companies to provide IT outsourcing services and solutions. The Company, through its wholly owned subsidiaries Tata Consultancy Services BPO Chile S.A. and TCS Inversiones Chile Limitada, subscribed to 100 % share capital of Tata solution Center S.A., a Company formed to provide BPO services in Ecuador. Another one of its wholly owned subsidiary TCS FNS Pty Limited, subscribed to 100% share capital of Financial Network Services Beijing Co. Ltd., a company formed to provide consulting and IT related services in China and the company has increased its investment in TCS Iberoamerica to Rs. 165.23 crore as on March 31, 2007

The company received International Credit Rating from Moody's Investors Service and has assigned an investment-grade issuer rating of A3 as well an indicative foreign currency debt rating of Baa1. TCS gathered various awards and recognitions, significant amongst which are Special Award by the UK Prime Minister, Tony Blair 'Outstanding Contribution to UK Knowledge Industry' in 2005, Company of the Year - 2006 from the Economic Times, Dataquest Best IT Employer for 2006, CII-EXIM Bank Award for Business Excellence 2006, Golden Peacock Global Award for Corporate Social Responsibility, Ranked among the Top 10 US application management services vendors India's largest e-governance initiative of the Ministry of Company Affairs, which is implemented by TCS, `Most Distinguished Achievement Award in Information Management (APAC) - 2006' from IBM and Verizon's Supplier Excellence Award for the third consecutive year. Eaton Premier Supplier Award 2007 for the Indirect Supplier for Information Technology Services category honored by Eaton Corporation.

As on 2008 TCS has signed a new multi-year contract with Chrysler LLC to provide a comprehensive portfolio of IT services, in March 2008 opened its North America Delivery Center called TCS Seven Hills Park. Located in Milford, Ohio, a suburb of Cincinnati, the facility sits on 220 wooded acres and is the largest TCS facility in North America. As on May 2008 the company ranked sixth in the largest 2008 Global Outsourcing 100, compiled by the International Association of Outsourcing Professionals (IAOP). TCS is going with certainty, lot of innovations and strategies to attain the vision of Global Top 10 by the year 2010.

Tata Steel May 2008 futures at premium

 Turnover in F&O segment decreases

Nifty May 2008 futures were at 4954, at a discount of 3.80 points as compared to spot closing of 4957.80.

The NSE's futures & options (F&O) segment turnover was Rs 38107.72 crore, which was lower than Rs 41000.80 crore on Monday, 12 May 2008.

Tata Steel May 2008 futures were at premium at 854.35 compared to the spot closing of 851.40.

Housing Development & Infrastructure (HDIL) May 2008 futures were at discount at 726 compared to the spot closing of 729.75.

IFCI May 2008 futures were near spot price at 59.55 compared to the spot closing of 59.90.

In the cash market, the S&P CNX Nifty lost 54.85 points or 1.09% at 4957.80.