28 Dec 2009, 0041 hrs IST, Ramkrishna Kashelkar, ET Bureau
Supreme Petrochemicals is India’s largest producer and exporter of polystyrene (PS) polymer with an installed capacity of 272,000 tonne per annum (TPA). The company acquired Shin Ho Petrochemicals in 2006 with a manufacturing capacity of 6,000 TPA of expandable polystyrene (EPS) at Chennai. The name of the company was later changed to SPL Polymers, before merging it with Supreme Petrochemicals.
In 2006, the company had entered into an MoU with the Maharashtra government to set up a world class styrenics complex and a minor port in the Raigad district at an estimated investment of Rs 1,115 crore. However, the land acquisition for the project is still continuing through MIDC while the company has obtained environmental clearances. The company has implemented a share buyback last year to acquire and extinguish 15.4 lakh shares. The company’s equity capital now stands reduced to Rs 96.8 crore.
GROWTH DRIVERS: The polystyrene industry globally had been suffering from overcapacity and stagnating demand due to competition from polypropylene. However, the scenario has improved with nearly 1.5 million tonne or 10% of the world’s PS capacity closing down in last three years. At the same time, the demand prospects are improving. The lightweight sheets made from extruded PS are increasingly being used for insulation in construction buildings to reduce energy consumption. In fact several developed countries have made this kind of insulation mandatory, and even in India the concept is gaining currency as part of ‘Green Building’ initiatives. In fact the first half of 2009 witnessed the domestic demand for PS spurt 22% against a year ago.
Supreme Petrochemicals is also shifting its focus from commodity polymer to value added varieties such as coloured, compounded, specialty, expandable, extruded and cup grade polystyrene. It has lined up investments of over Rs 200 crore to expand its capacities in all these value added products within next 18 months. The company has also entered in a tie-up with Italy’s Ultrabatch to manufacture and market high-end additive masterbatches, which are concentrated mixture of pigments and additives. Similarly, it has joined hands with the US based Nova Chemicals to set up 20,400 TPA cup-grade EPS plant in India, which has recently commenced operations.
FINANCIALS: The company has been stagnating over last 5 years - both in case of topline as well as bottom line - due to difficult situations in the global polystyrene markets. During these five years, the company improved its debt-equity ratio gradually to 0.7 as on June 30, ’09 as against 1.48 five years ago. For the year ended in June ’09, the company recorded a net profit of Rs 19.2 crore despite a net loss of Rs 46.7 crore in the December ’08 quarter due to inventory losses. A strong rebound in demand in the first half of 2009 enabled the company to wipe out these losses and end the year in profit.
VALUATIONS: At the current market price of Rs 26 the company is valued at eight times its profits for the trailing 12 months. The current price is just 1.3 times the book value of the company’s stock price. Going forward, we expect the company to report net profit after tax of Rs 55 crore during the year ending June 2010, which translates in a forward P/E of 4.6. The dividend yield of 3.8% can add to the margin of safety for an investor. Considering the growth prospects as a result of the industry turnaround Supreme Petrochemicals appears attractively priced.
VIA: E.T
Monday, December 28, 2009
RIL successfully tests its peak output capacity of K-G fields
28 Dec 2009, 2108 hrs IST, PTI
NEW DELHI: Mukesh Ambani-run Reliance Industries today said it has successfully tested the design capacity of its massive eastern offshore Krishna-Godavari basin D6 field production facilities.
"A flow rate of 80 million standard cubic meters (the peak production envisaged from KG-D6 fields) was achieved through the KG-D6 facilities and delivered" to the pipeline, a company statement said here.
RIL, which is currently producing about 60 mmscmd gas from two of the 18 gas discoveries in the KG-D6 block, has put deep-sea production facilities to produce 80 mmscmd. These facilities were successfully tested last week.
"Within a month of emerging as the largest producer of natural gas in the country, RIL announces that it has successfully carried out an assessment of the design capacity of the KG-D6 deepwater gas production facilities on December 23," the statement said.
80 million units of gas was delivered to the Reliance Gas Transportation Infrastructure Ltd -- the firm that owns the East-West pipeline that transports the KG-D6 gas from Kakinada on the Andhra coast to Baruch in Gujarat.
"At present, RIL is producing about 60 mmscmd of gas which is being supplied to several priority sectors identified by the Government under its Gas Utilization Policy," it said.
NEW DELHI: Mukesh Ambani-run Reliance Industries today said it has successfully tested the design capacity of its massive eastern offshore Krishna-Godavari basin D6 field production facilities.
"A flow rate of 80 million standard cubic meters (the peak production envisaged from KG-D6 fields) was achieved through the KG-D6 facilities and delivered" to the pipeline, a company statement said here.
RIL, which is currently producing about 60 mmscmd gas from two of the 18 gas discoveries in the KG-D6 block, has put deep-sea production facilities to produce 80 mmscmd. These facilities were successfully tested last week.
"Within a month of emerging as the largest producer of natural gas in the country, RIL announces that it has successfully carried out an assessment of the design capacity of the KG-D6 deepwater gas production facilities on December 23," the statement said.
80 million units of gas was delivered to the Reliance Gas Transportation Infrastructure Ltd -- the firm that owns the East-West pipeline that transports the KG-D6 gas from Kakinada on the Andhra coast to Baruch in Gujarat.
"At present, RIL is producing about 60 mmscmd of gas which is being supplied to several priority sectors identified by the Government under its Gas Utilization Policy," it said.
Reliance Power's Rosa plant starts generation
28 Dec 2009, 1747 hrs IST, IANS
ROSA: One of the four 300 MW-capacity units of a thermal power plant developed by Reliance Power here was commissioned here Monday morning.
The second 300 MW-unit will be commissioned by the end of January, and will be followed by the other two 300 MW-units by March 2012. The 1,200-MW plant at Roja, is located about 175 km from Uttar Pradesh capital Lucknow.
"In fact, March 2012 would mark the beginning of a new era in the history of Reliance Power as we hope to simultaneously commission two other power projects -- a 600-MW plant in Nagpur and a 1,300-MW plant at Sasan in Madhya Pradesh," said Reliance Power chief executive officer J.P. Chalasani.
Significantly, the Rs.6,000-crore Rosa project has not only been touted as the largest single investment by any private player in this state, but it is also the first Reliance Power plant to start generation.
"It is a matter of pride for us to have moved well ahead of our schedule and instead of April 2010, we have succeeded in taking off today, the 77th birth anniversary of our founder Dhirubhai Ambani," Chalasani said.
"After taking over the project in 2007, we put it on the fast track, expeditiously acquired land, signed the PPA (power purchase agreement), obtained all statutory and regulatory clearances and approvals, and signed coal supply and transportation agreements."
According to him, "once the entire plant is commissioned, it will enable us to make an annual contribution of 9,000 million units to Uttar Pradesh, light up as many as four million homes, besides helping in bringing down load-shedding by at least 25 percent".
The project is expected to provide permanent direct employment to 300 people.
"However, it has tremendous potential to generate a lot of indirect employment for which preference would be given to local people," said Chalasani.
ROSA: One of the four 300 MW-capacity units of a thermal power plant developed by Reliance Power here was commissioned here Monday morning.
The second 300 MW-unit will be commissioned by the end of January, and will be followed by the other two 300 MW-units by March 2012. The 1,200-MW plant at Roja, is located about 175 km from Uttar Pradesh capital Lucknow.
"In fact, March 2012 would mark the beginning of a new era in the history of Reliance Power as we hope to simultaneously commission two other power projects -- a 600-MW plant in Nagpur and a 1,300-MW plant at Sasan in Madhya Pradesh," said Reliance Power chief executive officer J.P. Chalasani.
Significantly, the Rs.6,000-crore Rosa project has not only been touted as the largest single investment by any private player in this state, but it is also the first Reliance Power plant to start generation.
"It is a matter of pride for us to have moved well ahead of our schedule and instead of April 2010, we have succeeded in taking off today, the 77th birth anniversary of our founder Dhirubhai Ambani," Chalasani said.
"After taking over the project in 2007, we put it on the fast track, expeditiously acquired land, signed the PPA (power purchase agreement), obtained all statutory and regulatory clearances and approvals, and signed coal supply and transportation agreements."
According to him, "once the entire plant is commissioned, it will enable us to make an annual contribution of 9,000 million units to Uttar Pradesh, light up as many as four million homes, besides helping in bringing down load-shedding by at least 25 percent".
The project is expected to provide permanent direct employment to 300 people.
"However, it has tremendous potential to generate a lot of indirect employment for which preference would be given to local people," said Chalasani.
Natural gas prices have more than doubled from its six-year low
28 Dec 2009
Amidst the talks of economic recovery and improvement in global demand, the prices of most of the industrial commodities have more than doubled during March-November 2009. The gains also intensified due to a weaker dollar and the liquidity in the financial markets. Natural gas prices, however, seem to be driven more by its demand- supply equation rather than extraneous factor such as liquidity flows that seem to play key role in the prices of other commodities.
Unlike the major commodities, natural gas price experienced a continuous decline since the beginning of 2009, and reached a six-year low in August, only to show a rebound from early September. This behaviour has sustained in last one month from the time when natural gas’s energy counterpart, crude oil remained range bound, while the former has moved closer to its 2009 highs (chart-1).
To understand this price performance one needs to understand the characteristics and uses of natural gas. Natural gas, one of the common energy resources, is an odourless, highly flammable hydrocarbon gas, which has a wide range of industrial and household usage. It is widely used as a fuel for base load and combined cycle power plants. Liquefied Natural Gas (LNG) is a popular piped fuel, which is used for cooking and heating in most households in the developed world. Its industrial use as a fuel varies from that in boilers, baking ovens, air conditioning and in manufacture of fertilizers and petrochemicals. In recent years, compressed natural gas (CNG) is gaining in popularity as a relatively cleaner and cheaper alternative to auto fuels like diesel.
Globally, the natural gas usage accounts for about one-fifth of total energy consumption. US, Russia and Canada followed by Europe are the biggest producers as well as consumers of the commodity. The reason behind a sustained fall in prices in early 2009 was a continuous rise in storage inventories in the US, world’s biggest consumer of natural gas. Natural gas accounts for nearly a quarter of the US energy consumption. For this reason, the New York Mercantile Exchange future price derived from the spot deliveries taking place at the Henry Hub in Louisiana is considered the North American benchmark for the natural gas prices. US natural gas storage surged to a new all time high of 3,837 Billion Cubic Feet (Bcf), which was well after the prices started showing a turn around.
The turnaround was caused by the plunge in prices to a six-year low of $2.80 per Million British Thermal Units (mmbtu) in August ’09 even as the traditional demand season was approaching. However, rising inventory was more than offset by rising demand for heating due to colder than expected winter in northern hemisphere this year. So, in last few weeks, the price rise has been supported by the beginning of a strong heating season in the US and parts of Europe where temperatures dropped significantly in the first half of December. In most part of the US, temperatures were about 20% lower than normal. The early and strong cold weather thus reduced concerns regarding the abundance of natural gas in storage.
As can be seen from the second chart, the 2009 storage reached record high in the end of November and is way above its 5-year range and 5-year average.
Nonetheless, due to the expectations of continued extreme cold in consuming regions the latest reported stock withdrawal (of 207 Bcf) also exceeded the 5-year (2004-2008) average withdrawal by 63% and the last year’s withdrawal by 78%. In the coming weeks while the extent of chill in the consuming regions could help prices, the speculative interest could also lend a support. Traditionally, a rebalancing of commodity indices takes place in the start of a calendar year, wherein the commodities with dismal price performance during the year gain a higher weight in an index depending on its performance. Accordingly, funds adjust their exposures in the futures market which can give a push to prices.
However, once the winter season is over, the prices may experience a corrective pressure given the flattening of the forward curve. The direction of natural gas prices then would be a function of the end of the season stocks and the status of industrial demand.
VIA: E.T
Amidst the talks of economic recovery and improvement in global demand, the prices of most of the industrial commodities have more than doubled during March-November 2009. The gains also intensified due to a weaker dollar and the liquidity in the financial markets. Natural gas prices, however, seem to be driven more by its demand- supply equation rather than extraneous factor such as liquidity flows that seem to play key role in the prices of other commodities.
Unlike the major commodities, natural gas price experienced a continuous decline since the beginning of 2009, and reached a six-year low in August, only to show a rebound from early September. This behaviour has sustained in last one month from the time when natural gas’s energy counterpart, crude oil remained range bound, while the former has moved closer to its 2009 highs (chart-1).
To understand this price performance one needs to understand the characteristics and uses of natural gas. Natural gas, one of the common energy resources, is an odourless, highly flammable hydrocarbon gas, which has a wide range of industrial and household usage. It is widely used as a fuel for base load and combined cycle power plants. Liquefied Natural Gas (LNG) is a popular piped fuel, which is used for cooking and heating in most households in the developed world. Its industrial use as a fuel varies from that in boilers, baking ovens, air conditioning and in manufacture of fertilizers and petrochemicals. In recent years, compressed natural gas (CNG) is gaining in popularity as a relatively cleaner and cheaper alternative to auto fuels like diesel.
Globally, the natural gas usage accounts for about one-fifth of total energy consumption. US, Russia and Canada followed by Europe are the biggest producers as well as consumers of the commodity. The reason behind a sustained fall in prices in early 2009 was a continuous rise in storage inventories in the US, world’s biggest consumer of natural gas. Natural gas accounts for nearly a quarter of the US energy consumption. For this reason, the New York Mercantile Exchange future price derived from the spot deliveries taking place at the Henry Hub in Louisiana is considered the North American benchmark for the natural gas prices. US natural gas storage surged to a new all time high of 3,837 Billion Cubic Feet (Bcf), which was well after the prices started showing a turn around.
The turnaround was caused by the plunge in prices to a six-year low of $2.80 per Million British Thermal Units (mmbtu) in August ’09 even as the traditional demand season was approaching. However, rising inventory was more than offset by rising demand for heating due to colder than expected winter in northern hemisphere this year. So, in last few weeks, the price rise has been supported by the beginning of a strong heating season in the US and parts of Europe where temperatures dropped significantly in the first half of December. In most part of the US, temperatures were about 20% lower than normal. The early and strong cold weather thus reduced concerns regarding the abundance of natural gas in storage.
As can be seen from the second chart, the 2009 storage reached record high in the end of November and is way above its 5-year range and 5-year average.
Nonetheless, due to the expectations of continued extreme cold in consuming regions the latest reported stock withdrawal (of 207 Bcf) also exceeded the 5-year (2004-2008) average withdrawal by 63% and the last year’s withdrawal by 78%. In the coming weeks while the extent of chill in the consuming regions could help prices, the speculative interest could also lend a support. Traditionally, a rebalancing of commodity indices takes place in the start of a calendar year, wherein the commodities with dismal price performance during the year gain a higher weight in an index depending on its performance. Accordingly, funds adjust their exposures in the futures market which can give a push to prices.
However, once the winter season is over, the prices may experience a corrective pressure given the flattening of the forward curve. The direction of natural gas prices then would be a function of the end of the season stocks and the status of industrial demand.
VIA: E.T
Kemrock Industries>> Dilution effect
The Vadodara-based manufacturer of composite plastics and products, Kemrock Industries, recently announced its board approval for Rs 400 crore of preferential issue of equity shares and issued 16 lakh equity warrants to a strategic investor. The warrants were issued at Rs 90 each at 25% of the issue price of the equity shares. The rest 75% will become payable over the next 18 months on conversion of the warrants.
Earlier in May ‘08, the company allotted 4.6 lakh shares and 3.93 lakh warrants to the same strategic investor, RPM International, at Rs 650 each on a preferential basis. RPM International, a US-based manufacturer of paints and sealants, currently holds 15.85 lakh equity shares or 14.4% of the equity of the company. Assuming a full conversion of the recently issued 16 lakh warrants, RPM will become the second largest shareholder in the company after the promoter and managing director Mr. Kalpesh Patel. However, crossing the 15% holding limit will trigger an automatic open offer for the company, which can make it the largest shareholder of the company.
Kemrock’s performance on the bourses has been spectacular in ‘09 so far despite a forgettable ‘08. In ‘08, the company suffered from weak earnings performance that impacted its valuations. The company, which was trading at over 45 times its profits at the start of ‘08, was being valued at just 5 times the profits by the year end.
During ‘09, Kemrock’s valuation improved swiftly despite a continuing stagnancy in its profit growth. Currently, the company’s market capitalisation is twoand-a-half times that at the start of the year. However, this is mainly due to doubling of the P/E multiple of 11, as its per share earnings grew merely 10%.
The company has also diluted its equity periodically, which has impacted the per share earnings. Between December ‘07 and December ‘09 the equity has expanded nearly 46% from Rs 7.55 crore to Rs 11.01 crore. This is just the paid-up equity without considering outstanding warrants that can be converted into equity shares at the option of the holder.
Considering the company’s successive equity dilutions, retail shareholders are unlikely to benefit from any future earnings growth by the company.
via: E.T
Earlier in May ‘08, the company allotted 4.6 lakh shares and 3.93 lakh warrants to the same strategic investor, RPM International, at Rs 650 each on a preferential basis. RPM International, a US-based manufacturer of paints and sealants, currently holds 15.85 lakh equity shares or 14.4% of the equity of the company. Assuming a full conversion of the recently issued 16 lakh warrants, RPM will become the second largest shareholder in the company after the promoter and managing director Mr. Kalpesh Patel. However, crossing the 15% holding limit will trigger an automatic open offer for the company, which can make it the largest shareholder of the company.
Kemrock’s performance on the bourses has been spectacular in ‘09 so far despite a forgettable ‘08. In ‘08, the company suffered from weak earnings performance that impacted its valuations. The company, which was trading at over 45 times its profits at the start of ‘08, was being valued at just 5 times the profits by the year end.
During ‘09, Kemrock’s valuation improved swiftly despite a continuing stagnancy in its profit growth. Currently, the company’s market capitalisation is twoand-a-half times that at the start of the year. However, this is mainly due to doubling of the P/E multiple of 11, as its per share earnings grew merely 10%.
The company has also diluted its equity periodically, which has impacted the per share earnings. Between December ‘07 and December ‘09 the equity has expanded nearly 46% from Rs 7.55 crore to Rs 11.01 crore. This is just the paid-up equity without considering outstanding warrants that can be converted into equity shares at the option of the holder.
Considering the company’s successive equity dilutions, retail shareholders are unlikely to benefit from any future earnings growth by the company.
via: E.T
Thursday, December 17, 2009
Chettinad Cement to expand capacity
Total capacity to reach 13.2 million tonnes
Funding through internal accruals and loans
CHENNAI: Chettinad Cement has drawn up plans to expand the capacity to 13.2 million tonnes from 7.5 million tonnes. The company has plants in Puliyur, Karikkali and Ariyalur (all in Tamil Nadu). Addressing presspersons here on Thursday, after unveiling the company’s new corporate identity, M A M R Muthiah, Managing Director, said the Puliyur and Karikkali plants would together see a capacity enhancement of 2.7 million tonnes by December next year through a combination of process improvements and brownfield expansion involving an additional line in Karikkali.
Greenfield unit
Mr. Muthiah said the company was planning to set up a greenfield plant with a capacity of three million tonnes annually at Gulbarga (Karnataka) where huge limestone reserves were available. “This location is slated for further expansion in similar sized modules in future up to 2015”, he said.
The Gulbarga unit including a 45 MW power plant would involve an outlay of Rs. 700 crore, Mr. Muthiah said. This would also be funded with internal accruals and borrowings, Mr. Muthiah said.
According to C. Sudhakar, President (Operations and Projects), the company has invested significantly in captive power generation.
The current installations and expansion under completion in Tamil Nadu, totalling 105 MW, would meet 80 per cent of power requirements.
Funding through internal accruals and loans
CHENNAI: Chettinad Cement has drawn up plans to expand the capacity to 13.2 million tonnes from 7.5 million tonnes. The company has plants in Puliyur, Karikkali and Ariyalur (all in Tamil Nadu). Addressing presspersons here on Thursday, after unveiling the company’s new corporate identity, M A M R Muthiah, Managing Director, said the Puliyur and Karikkali plants would together see a capacity enhancement of 2.7 million tonnes by December next year through a combination of process improvements and brownfield expansion involving an additional line in Karikkali.
Greenfield unit
Mr. Muthiah said the company was planning to set up a greenfield plant with a capacity of three million tonnes annually at Gulbarga (Karnataka) where huge limestone reserves were available. “This location is slated for further expansion in similar sized modules in future up to 2015”, he said.
The Gulbarga unit including a 45 MW power plant would involve an outlay of Rs. 700 crore, Mr. Muthiah said. This would also be funded with internal accruals and borrowings, Mr. Muthiah said.
According to C. Sudhakar, President (Operations and Projects), the company has invested significantly in captive power generation.
The current installations and expansion under completion in Tamil Nadu, totalling 105 MW, would meet 80 per cent of power requirements.
Change in market timing to be effective from Jan 4
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) jointly decided on Thursday to implement the change in market timings from nine in the morning with effect from January 4, 2010.
Earlier, on Wednesday, both the exchanges separately announced that they would start trading from nine in the morning from December 18.
“Based on the market feedback, it has been jointly decided by the BSE and the NSE that the revision of market open timing to 9 a.m. shall be effective from Monday, January 4, 2010
Earlier, on Wednesday, both the exchanges separately announced that they would start trading from nine in the morning from December 18.
“Based on the market feedback, it has been jointly decided by the BSE and the NSE that the revision of market open timing to 9 a.m. shall be effective from Monday, January 4, 2010
Wednesday, December 16, 2009
NSE, BSE extend trading time
16th Dec'09
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to extend the timing of trading from 9 a.m. with effect from Friday.
On NSE, normal market, retails debt market and limited physical market will open at 9 a.m.
The block trade session shall be available from 9 am to 9.35 am. On the futures & options segment, normal market / exercise market open at 9 a.m. and the normal market close time would remain unchanged at 3.30 p.m.
The Bombay Stock Exchange on Tuesday stated that it would change the trading time with effect from Friday and trading would commence from 9.45 a.m. to 3.30 p.m. instead of 9.55 a.m. to 3.30 p.m. in the equity and equity derivatives segments on all business days.
However, BSE stated that there will not be any change in timings of any other session in both the segments and the block deal window timings in the equity segment of the exchange will remain the same.
But on Wednesday BSE came out with a statement that it has been decided that the block deal window in the equity segment would be available from 9.45 a.m. to 10.20 a.m., with effect from Friday. However late on Wednesday evening — after the announcement of NSE — BSE officials confirmed that it too would start trading from 9 a.m.
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to extend the timing of trading from 9 a.m. with effect from Friday.
On NSE, normal market, retails debt market and limited physical market will open at 9 a.m.
The block trade session shall be available from 9 am to 9.35 am. On the futures & options segment, normal market / exercise market open at 9 a.m. and the normal market close time would remain unchanged at 3.30 p.m.
The Bombay Stock Exchange on Tuesday stated that it would change the trading time with effect from Friday and trading would commence from 9.45 a.m. to 3.30 p.m. instead of 9.55 a.m. to 3.30 p.m. in the equity and equity derivatives segments on all business days.
However, BSE stated that there will not be any change in timings of any other session in both the segments and the block deal window timings in the equity segment of the exchange will remain the same.
But on Wednesday BSE came out with a statement that it has been decided that the block deal window in the equity segment would be available from 9.45 a.m. to 10.20 a.m., with effect from Friday. However late on Wednesday evening — after the announcement of NSE — BSE officials confirmed that it too would start trading from 9 a.m.
Tuesday, December 15, 2009
BSE announces change in trade timings
BSE announces change in trade timings
15 Dec 2009, 1552 hrs IST, ET Bureau
MUMBAI: The Bombay Stock Exchange has announced change in trading timings for its equity and equity derivatives segments. With effect from Friday, December 18, 2009, trading will commence from 9.45 a.m. onwards, instead of the present timing of 9.55 am.
The continuous trading session in both segments will be from 9.45 a.m. to 3.30 pm on all business days. There will be no change in timings of any other session in both the segments.
15 Dec 2009, 1552 hrs IST, ET Bureau
MUMBAI: The Bombay Stock Exchange has announced change in trading timings for its equity and equity derivatives segments. With effect from Friday, December 18, 2009, trading will commence from 9.45 a.m. onwards, instead of the present timing of 9.55 am.
The continuous trading session in both segments will be from 9.45 a.m. to 3.30 pm on all business days. There will be no change in timings of any other session in both the segments.
Monday, December 14, 2009
Abu Dhabi provides $10 b to Dubai World
DUBAI: Oil rich Abu Dhabi has provided Dubai World, the state-owned holding company $10 billion to meet some of its most pressing obligations.
Out of the total package which will be channelled to the Dubai Financial Support Fund, $4.1 billion will be used to cover real estate giant Nakheel’s payments for an Islamic bond that matured on Monday.
Dubai World will utilise the balance amount to cover interest expenses and working capital requirements till April 30, 2010, provided the company manages to successfully negotiate a ‘standstill arrangement’ with its creditors, a Dubai government statement said. “The statement shows that despite its commitment to Dubai, Abu Dhabi will not provide unconditional support. It will fund those companies in Dubai that are prepared to follow sound and sustainable financial principles,” an Abu Dhabi based investment banker, who did not wish to be named, told The Hindu.
The statement added that the funds that have been released will also be used to meet the obligations of Dubai World’s domestic creditors and contractors, based in Dubai. Besides, the central bank has expressed its readiness to step in to support local banks in the United Arab Emirates (UAE), should they face a liquidity crisis. Analysts say that the Abu Dhabi’s intervention has not come as a surprise for two reasons. First, the failure of the Dubai World to meet its financial obligations would have affected the national image of the UAE, having long term negative political and economic implications. Second, the cost of borrowing to fund Abu Dhabis own mega-projects would have surged, because the UAE is part of emerging markets, which would have been hit had Dubai World defaulted on its payments.
The government of Dubai is also set to announce a “comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” the statement added. “This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”
According to the statement, Dubai’s ‘best days are yet to come’ and the city will “continue to be, a strong and vibrant global financial centre.”
Consul calls for Indian businessmen support
The Consul General of India in Dubai, Venu Rajamony, has called upon Indian businessmen to help infuse confidence in the Dubai economy, which was boosted on Monday by an infusion of $10 billion from the government of Abu Dhabi.The Consul General urged the Indian community, especially the Indian businessmen, to do everything possible to support measures being taken by the UAE and Dubai governments to stabilise the economy. He said that for India, the UAE was a valuable economic partner, and ties between the two countries were intensifying in all fields.
Out of the total package which will be channelled to the Dubai Financial Support Fund, $4.1 billion will be used to cover real estate giant Nakheel’s payments for an Islamic bond that matured on Monday.
Dubai World will utilise the balance amount to cover interest expenses and working capital requirements till April 30, 2010, provided the company manages to successfully negotiate a ‘standstill arrangement’ with its creditors, a Dubai government statement said. “The statement shows that despite its commitment to Dubai, Abu Dhabi will not provide unconditional support. It will fund those companies in Dubai that are prepared to follow sound and sustainable financial principles,” an Abu Dhabi based investment banker, who did not wish to be named, told The Hindu.
The statement added that the funds that have been released will also be used to meet the obligations of Dubai World’s domestic creditors and contractors, based in Dubai. Besides, the central bank has expressed its readiness to step in to support local banks in the United Arab Emirates (UAE), should they face a liquidity crisis. Analysts say that the Abu Dhabi’s intervention has not come as a surprise for two reasons. First, the failure of the Dubai World to meet its financial obligations would have affected the national image of the UAE, having long term negative political and economic implications. Second, the cost of borrowing to fund Abu Dhabis own mega-projects would have surged, because the UAE is part of emerging markets, which would have been hit had Dubai World defaulted on its payments.
The government of Dubai is also set to announce a “comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” the statement added. “This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”
According to the statement, Dubai’s ‘best days are yet to come’ and the city will “continue to be, a strong and vibrant global financial centre.”
Consul calls for Indian businessmen support
The Consul General of India in Dubai, Venu Rajamony, has called upon Indian businessmen to help infuse confidence in the Dubai economy, which was boosted on Monday by an infusion of $10 billion from the government of Abu Dhabi.The Consul General urged the Indian community, especially the Indian businessmen, to do everything possible to support measures being taken by the UAE and Dubai governments to stabilise the economy. He said that for India, the UAE was a valuable economic partner, and ties between the two countries were intensifying in all fields.
Anil Ambani-led companies slide on regulatory action
14th Dec'09
Three Anil Ambani-led companies declined 0.71% to 1.17% at 15:11 IST on BSE after the finance ministry and Reserve Bank of India reportedly barred them from borrowing abroad for violating guidelines.
Meanwhile, the BSE Sensex was down 3.37 points, or 0.02%, to 17,115.66
Reliance Communications (RCom) lost 1.17% to Rs 181.45 in volatile trade. The stock swung between a high of Rs 186.50 and low of Rs 180.60 so far during the day. Reports of RCom looking to sell an undersea fiber optic network FLAG and a related US business, hoping to raise around $3 billion in cash, led the rally in the stock earlier in the day. However, the reports were denied by the company's spokesman in a clarification to a news agency, which triggered the fall.
Reliance Power (down 0.71%), and Reliance Natural Resources (down 1.14%), edged lower.
As per reports, three Anil Ambani group companies - RCom, Reliance Power, and Reliance Natural Resources (RNRL) were barred from borrowing abroad under the so-called automatic approvals route after they were found to have violated the external commercial borrowing (ECB) guidelines for loans to the tune of $2 billion.
As a result, any application from Anil Ambani group companies for ECBs or foreign currency convertible bonds (FCCBs) will be considered only under the approval route.
Under the automatic route, a company can raise funds directly from the overseas market, whereas it will require prior Reserve Bank of India (RBI) approval for raising funds under the non-automatic route.
Of the $5.3 billion that the Anil Dhirubhai Ambani Group (ADAG) has raised so far in 16 applications, more than 80%, or $4.25 billion, has come through the automatic route in 12 applications. The remaining 20%, or $1.05 billion, was raised in 4 applications under the approval route. RCom has led the chart with 9, of a total of 12, via the automatic route.
The difference between the rate at which these funds can be raised overseas and at which they can raised locally, can be as high as 400 basis points
Separately, Reliance Communications' share price estimate was cut to Rs 160 from Rs 210 at a foreign broking house which cited the effect of increased competition on earnings. The brokerage kept a sell rating on the stock
Three Anil Ambani-led companies declined 0.71% to 1.17% at 15:11 IST on BSE after the finance ministry and Reserve Bank of India reportedly barred them from borrowing abroad for violating guidelines.
Meanwhile, the BSE Sensex was down 3.37 points, or 0.02%, to 17,115.66
Reliance Communications (RCom) lost 1.17% to Rs 181.45 in volatile trade. The stock swung between a high of Rs 186.50 and low of Rs 180.60 so far during the day. Reports of RCom looking to sell an undersea fiber optic network FLAG and a related US business, hoping to raise around $3 billion in cash, led the rally in the stock earlier in the day. However, the reports were denied by the company's spokesman in a clarification to a news agency, which triggered the fall.
Reliance Power (down 0.71%), and Reliance Natural Resources (down 1.14%), edged lower.
As per reports, three Anil Ambani group companies - RCom, Reliance Power, and Reliance Natural Resources (RNRL) were barred from borrowing abroad under the so-called automatic approvals route after they were found to have violated the external commercial borrowing (ECB) guidelines for loans to the tune of $2 billion.
As a result, any application from Anil Ambani group companies for ECBs or foreign currency convertible bonds (FCCBs) will be considered only under the approval route.
Under the automatic route, a company can raise funds directly from the overseas market, whereas it will require prior Reserve Bank of India (RBI) approval for raising funds under the non-automatic route.
Of the $5.3 billion that the Anil Dhirubhai Ambani Group (ADAG) has raised so far in 16 applications, more than 80%, or $4.25 billion, has come through the automatic route in 12 applications. The remaining 20%, or $1.05 billion, was raised in 4 applications under the approval route. RCom has led the chart with 9, of a total of 12, via the automatic route.
The difference between the rate at which these funds can be raised overseas and at which they can raised locally, can be as high as 400 basis points
Separately, Reliance Communications' share price estimate was cut to Rs 160 from Rs 210 at a foreign broking house which cited the effect of increased competition on earnings. The brokerage kept a sell rating on the stock
Western India Shipyard jumps 17% in four days
Western India Shipyard rose 4.94% to Rs 12.32 at 13:01 IST on BSE, extending gains for the fourth consecutive day, after the company bagged an order worth Rs 5 crore for the repair of a deep water oil rig named JUR Noble Ed Holt.
The company announced the new order win during trading hours on Thursday, 10 December 2009, when the stock had jumped 4.97% to Rs 11.19.
Meanwhile, the BSE Sensex was up 131.57 points, or 0.76%, to 17,250.60.
On BSE, 2.14 lakh shares were traded in the counter as against an average daily volume of 1.69 lakh shares in the past one quarter.
The stock hit a high of Rs 12.32 and a low of Rs 12.10 so far during the day. The stock had hit a 52-week high of Rs 13.99 on 25 August 2009 and a 52-week low of Rs 3.10 on 9 March 2009.
The stock has risen 17% in just four trading sessions from a recent low of Rs 10.53 on 8 December 2009.
The company's equity capital is Rs 23.42 crore. Face value per share is Rs 2.
The rig berthed on 7 December 2009 and the repair works have commenced, the company said in a filing with BSE.
Western India Shipyard reported a net loss of Rs 4.47 crore in Q2 September 2009, lower than net loss of Rs 7.33 crore in Q2 September 2008. Net sales declined 15.4% to Rs 17.24 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in building and repairing ships. It operates as a composite ship repair facility in India. It offers ship services, including routine maintenance and damage repairs.
The company announced the new order win during trading hours on Thursday, 10 December 2009, when the stock had jumped 4.97% to Rs 11.19.
Meanwhile, the BSE Sensex was up 131.57 points, or 0.76%, to 17,250.60.
On BSE, 2.14 lakh shares were traded in the counter as against an average daily volume of 1.69 lakh shares in the past one quarter.
The stock hit a high of Rs 12.32 and a low of Rs 12.10 so far during the day. The stock had hit a 52-week high of Rs 13.99 on 25 August 2009 and a 52-week low of Rs 3.10 on 9 March 2009.
The stock has risen 17% in just four trading sessions from a recent low of Rs 10.53 on 8 December 2009.
The company's equity capital is Rs 23.42 crore. Face value per share is Rs 2.
The rig berthed on 7 December 2009 and the repair works have commenced, the company said in a filing with BSE.
Western India Shipyard reported a net loss of Rs 4.47 crore in Q2 September 2009, lower than net loss of Rs 7.33 crore in Q2 September 2008. Net sales declined 15.4% to Rs 17.24 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in building and repairing ships. It operates as a composite ship repair facility in India. It offers ship services, including routine maintenance and damage repairs.
PSL advances on fund raising buzz
14th Dec'09
PSL surged 3.02% to Rs 163.65 at 10:33 IST on BSE on reports the company has raised $50 million through external commercial borrowings to fund expansion.
The stock hit a high of Rs 164.70 and a low of Rs 160.70 so far during the day. The stock had hit a 52-week high of Rs 188 on 18 September 2009 and a 52-week low of Rs 59.50 on 9 March 2009.
The small-cap steel pipe maker has an equity capital of Rs 53.46 crore. Face value per share is Rs 10.
The current price of Rs 163.65 discounts the company's Q2 September 2009 annualised EPS of Rs 16.48, by a PE multiple of 9.93
As per reports, the funds were raised at nearly 500 basis points over Libor (London Interbank Offered Rate) from the state-owned banks through their overseas branches. External commercial borrowings (ECB) refers to overseas borrowings in foreign currencies by Indian companies. PSL plans to use the funds raised from the ECB to expand its capacity in terms of its capital expenditure and for modernization programme.
PSL is the largest producer of helical submerged arc welded (HSAW) pipes in India. The company's net profit fell 0.10% to Rs 21.58 crore on a 7.80% decline in net sales to Rs 593.64 crore in Q2 September 2009 over Q2 September 2008.
PSL surged 3.02% to Rs 163.65 at 10:33 IST on BSE on reports the company has raised $50 million through external commercial borrowings to fund expansion.
The stock hit a high of Rs 164.70 and a low of Rs 160.70 so far during the day. The stock had hit a 52-week high of Rs 188 on 18 September 2009 and a 52-week low of Rs 59.50 on 9 March 2009.
The small-cap steel pipe maker has an equity capital of Rs 53.46 crore. Face value per share is Rs 10.
The current price of Rs 163.65 discounts the company's Q2 September 2009 annualised EPS of Rs 16.48, by a PE multiple of 9.93
As per reports, the funds were raised at nearly 500 basis points over Libor (London Interbank Offered Rate) from the state-owned banks through their overseas branches. External commercial borrowings (ECB) refers to overseas borrowings in foreign currencies by Indian companies. PSL plans to use the funds raised from the ECB to expand its capacity in terms of its capital expenditure and for modernization programme.
PSL is the largest producer of helical submerged arc welded (HSAW) pipes in India. The company's net profit fell 0.10% to Rs 21.58 crore on a 7.80% decline in net sales to Rs 593.64 crore in Q2 September 2009 over Q2 September 2008.
Jaihind Projects builds on new order win
Jaihind Projects rose 1.01% to Rs 139.60 at 10:39 IST on BSE, after the company bagged an order worth Rs 24.53 crore from Bhagyanagar Gas for laying and construction of U/G steel P/L network & associated works for CNG & city gas projects.
The company announced the new order win during trading hours today, 14 December 2009.
Meanwhile, the BSE Sensex was up 54.91 points, or 0.32%, to 17,173.94.
On BSE, 764 shares were traded in the counter as against an average daily volume of 3,574 shares in the past one quarter.
The stock hit a high of Rs 140 and a low of Rs 137.25 so far during the day. The stock had hit a 52-week high of Rs 170 on 16 October 2009 and a 52-week low of Rs 32 on 12 March 2009.
The company's equity capital is Rs 7.26 crore. Face value per share is Rs 10.
In November 2009, Jaihind Projects had secured an order worth Rs 14.05 crore from Bharat Petroleum Corporation for laying cross-country pipeline and associated works from Kochi Refinery to Cochin aviation fuelling station (AFS) at Ndedumbassery in Cochin district of Kerala.
Jaihind Projects' net profit surged 50.62% to Rs 6.07 crore on 64.91% rise in net sales to Rs 64.71 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in engineering and construction services.
Promoters have pledged more than 31.83 lakh shares representing 43.86% of the equity capital of the company. Total Promoter shareholding in the company is 47.74% (as on 30 September 2009).
The company announced the new order win during trading hours today, 14 December 2009.
Meanwhile, the BSE Sensex was up 54.91 points, or 0.32%, to 17,173.94.
On BSE, 764 shares were traded in the counter as against an average daily volume of 3,574 shares in the past one quarter.
The stock hit a high of Rs 140 and a low of Rs 137.25 so far during the day. The stock had hit a 52-week high of Rs 170 on 16 October 2009 and a 52-week low of Rs 32 on 12 March 2009.
The company's equity capital is Rs 7.26 crore. Face value per share is Rs 10.
In November 2009, Jaihind Projects had secured an order worth Rs 14.05 crore from Bharat Petroleum Corporation for laying cross-country pipeline and associated works from Kochi Refinery to Cochin aviation fuelling station (AFS) at Ndedumbassery in Cochin district of Kerala.
Jaihind Projects' net profit surged 50.62% to Rs 6.07 crore on 64.91% rise in net sales to Rs 64.71 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in engineering and construction services.
Promoters have pledged more than 31.83 lakh shares representing 43.86% of the equity capital of the company. Total Promoter shareholding in the company is 47.74% (as on 30 September 2009).
Talbros Automotive accelerates on Japanese tie-up
14th Dec'09 (Monday)
Talbros Automotive Components gained 2.86% to Rs 45 at 10:19 IST on BSE, after the company signed a pact with Sanwa Packaging Industry Company, Japan for obtaining technical know-how for making heat shields for automotives.
The company made this announcement after trading hours on Friday, 11 December 2009.
Meanwhile, the BSE Sensex was up 90.65 points, or 0.53%, to 17,209.68.
On BSE, 1,102 shares were traded in the counter as against an average daily volume of 3,574 shares in the past one quarter.
The stock hit a high of Rs 46.40 and a low of Rs 45 so far during the day. The stock had hit a 52-week high of Rs 48.25 on 21 October 2009 and a 52-week low of Rs 15 on 12 March 2009.
The company's equity capital is Rs 12.35 crore. Face value per share is Rs 10.
The current price of Rs 45 discounts the company's Q2 September 2009 annualized EPS of Rs 2.49, by a PE multiple of 18.07.
The agreement is for a period of five years and it will help the company to expand its product bandwidth among its customers, Talbros said in a filing with BSE.
Talbros Automotive Components gained 2.86% to Rs 45 at 10:19 IST on BSE, after the company signed a pact with Sanwa Packaging Industry Company, Japan for obtaining technical know-how for making heat shields for automotives.
The company made this announcement after trading hours on Friday, 11 December 2009.
Meanwhile, the BSE Sensex was up 90.65 points, or 0.53%, to 17,209.68.
On BSE, 1,102 shares were traded in the counter as against an average daily volume of 3,574 shares in the past one quarter.
The stock hit a high of Rs 46.40 and a low of Rs 45 so far during the day. The stock had hit a 52-week high of Rs 48.25 on 21 October 2009 and a 52-week low of Rs 15 on 12 March 2009.
The company's equity capital is Rs 12.35 crore. Face value per share is Rs 10.
The current price of Rs 45 discounts the company's Q2 September 2009 annualized EPS of Rs 2.49, by a PE multiple of 18.07.
The agreement is for a period of five years and it will help the company to expand its product bandwidth among its customers, Talbros said in a filing with BSE.
Wednesday, December 9, 2009
One More Sovereign Downgrade, This Time Around Its Spain!
Standard & Poor's Ratings Services lowered its outlook on Spain to negative, saying the country will likely see "significantly lower" gross-domestic-product growth.
The ratings agency said a downgrade could come in the next two years if authorities don't take action to tackle fiscal and external imbalances. "If the government announces concrete fiscal measures that we believe could credibly achieve annual primary surpluses of 2% or higher by the end of the forecast period in 2012, downward pressure on the ratings may abate," said analyst Trevor Cullinan.
(Source:- http://online.wsj.com/article/BT-CO-20091209-707060.html)
Comment-
In just one month we have witnessed 3 major downgrades by global credit rating agencies, first it was Dubai, then Greece and now Spain. These are not so small economies that it won't hurt the sentiment, slowly it is becoming like a house of cards, one falls and the whole house collapses.
Last year it was ICE LAND
The ratings agency said a downgrade could come in the next two years if authorities don't take action to tackle fiscal and external imbalances. "If the government announces concrete fiscal measures that we believe could credibly achieve annual primary surpluses of 2% or higher by the end of the forecast period in 2012, downward pressure on the ratings may abate," said analyst Trevor Cullinan.
(Source:- http://online.wsj.com/article/BT-CO-20091209-707060.html)
Comment-
In just one month we have witnessed 3 major downgrades by global credit rating agencies, first it was Dubai, then Greece and now Spain. These are not so small economies that it won't hurt the sentiment, slowly it is becoming like a house of cards, one falls and the whole house collapses.
Last year it was ICE LAND
Micro Inks to delist shares from BSE, NSE
Wednesday December 9, 06:30 PM
MUMBAI (Reuters) - Micro Inks Ltd said on Wednesday it plans to delist its shares from the Bombay Stock Exhcnage and National Stock Exchange (^NSEI : 5112 -35.95 ) as founder and majority shareholder MHM Holding GmBH would acquire its shares held by the public.
MHM Holding is recommending a price of 550 rupees a share for the public shareholders of Micro Inks an an attractive exit oppourtunity, the Indian firm said in a statement to the BSE (^BSESN : 17125.22 -102.46 ).
Micro Inks shares closed up 7.6 percent at 524.65 rupees in a weak Mumbai market.
MUMBAI (Reuters) - Micro Inks Ltd said on Wednesday it plans to delist its shares from the Bombay Stock Exhcnage and National Stock Exchange (^NSEI : 5112 -35.95 ) as founder and majority shareholder MHM Holding GmBH would acquire its shares held by the public.
MHM Holding is recommending a price of 550 rupees a share for the public shareholders of Micro Inks an an attractive exit oppourtunity, the Indian firm said in a statement to the BSE (^BSESN : 17125.22 -102.46 ).
Micro Inks shares closed up 7.6 percent at 524.65 rupees in a weak Mumbai market.
NRIs are pouring money into real estate
This is one of the biggest ironies we have come across so far. The economic downturn in the US, Europe and the Dubai debacle - all had only one factor to blame. A bubble in real estate prices and mortgage loans! But it seems the trend is that of greed feeds greed. With NRIs from the West and the Gulf wanting to relocate to their home-country, the real estate market in India is seeing a never-before rally. The dollar-earning NRIs are willing to pay higher than market prices. Banks and mortgage lenders are all too willing to help their high ticket purchases with attractive interest rates. These funds are therefore feeding an asset bubble in Indian real estate, which was relatively less impacted by the global meltdown. A business daily reports that an estimated 25 m NRIs living in 130 countries have remitted US$ 52 bn to India so far this year. Most of it has directly come to real estate. Further, the current tight liquidity situation across US has enticed NRIs to mortgage loans in India. We do not see this as a very healthy sign as Indian real estate players and bankers have to be very careful about whether the high prices and risky loans are sustainable.
FM wants to do away with oil bonds
Two wrongs do not make a right. From the Oil Ministry's point of view, price controls on petroleum products is wrong. After all, the finances of state owned oil marketing companies are completely messed up because of the subsidized prices. These companies receive oil bonds from the Finance Ministry. From the Finance Ministry's point of view, oil bonds are wrong. They worsen the fiscal deficit situation. In fact, the Finance Ministry has not given any oil bonds to the Oil Ministry so far for the current fiscal. It might wait up to the next budget. The problem is how does a government increase prices of petroleum products without affecting the economy and its popularity? Especially, if it gets elected on the aam admi plank. In our view, no amount of accounting and procedural jugglery can solve the fundamental problem.
Sunday, December 6, 2009
Signet Overseas hits the roof after setting record date for bonus issue
Friday 4th Dec-09
Signet Overseas was locked at 5% upper limit at Rs 44.25 at 12:06 IST on BSE, after the company fixed 14 December 2009 as the record date for a 2:1 bonus issue.
The company announced the record date after market hours on Thursday, 3 December 2009. This is a maiden bonus from Signet Overseas.
Meanwhile, the BSE Sensex was up 84.63 points, or 0.49%, to 17,262.17.
On BSE, ten shares were traded in the counter as against an average daily volume of one share in the past one quarter.
The stock opened with an upward gap, surging by the maximum 5% daily circuit and remained locked at the 5% level so far in the day. The stock had hit a 52-week high of Rs 50 on 29 January 2009 and an all time low of Rs 2.15 on 29 January 2009.
The company's equity capital is Rs 1.62 crore. Face value per share is Rs 10.
The current price of Rs 44.25 discounts the company's year ended March 2009 annualized EPS of Rs 12.59, by a PE multiple of 3.51.
Signet Overseas' net profit galloped 1076.5% to Rs 6 crore on 25.3% rise in net sales to Rs 80.42 crore in Q2 September 2009 over Q2 September 2008.
The company provides various kinds of sacks such as liner bags, valved bags, gussetted bags, hemmed bags, inside coated, box bags, bale wraps, mail bag, envelop bags, rubble sacks sand bags, zig zag mouthed, resin bags, paper-PE sandwich bags.
Signet Overseas was locked at 5% upper limit at Rs 44.25 at 12:06 IST on BSE, after the company fixed 14 December 2009 as the record date for a 2:1 bonus issue.
The company announced the record date after market hours on Thursday, 3 December 2009. This is a maiden bonus from Signet Overseas.
Meanwhile, the BSE Sensex was up 84.63 points, or 0.49%, to 17,262.17.
On BSE, ten shares were traded in the counter as against an average daily volume of one share in the past one quarter.
The stock opened with an upward gap, surging by the maximum 5% daily circuit and remained locked at the 5% level so far in the day. The stock had hit a 52-week high of Rs 50 on 29 January 2009 and an all time low of Rs 2.15 on 29 January 2009.
The company's equity capital is Rs 1.62 crore. Face value per share is Rs 10.
The current price of Rs 44.25 discounts the company's year ended March 2009 annualized EPS of Rs 12.59, by a PE multiple of 3.51.
Signet Overseas' net profit galloped 1076.5% to Rs 6 crore on 25.3% rise in net sales to Rs 80.42 crore in Q2 September 2009 over Q2 September 2008.
The company provides various kinds of sacks such as liner bags, valved bags, gussetted bags, hemmed bags, inside coated, box bags, bale wraps, mail bag, envelop bags, rubble sacks sand bags, zig zag mouthed, resin bags, paper-PE sandwich bags.
Atul gains as promoter revokes pledged shares
Friday 4th Dec-09
Atul rose 2.13% to Rs 84 at 12:55 IST on BSE, after one of the promoter group companies revoked a portion of shares which it had pledged earlier.
The company made this announcement after market hours on Thursday, 3 December 2009.
The stock hit a high of Rs 85 and a low of Rs 82 so far during the day. The stock had hit a 52-week high of Rs 90.50 on 1 October 2009 and a 52-week low of Rs 34 on 9 March 2009.
The company's equity capital is Rs 29.67 crore. Face value per share is Rs 10.
The current price of Rs 84 discounts the company's Q2 September 2009 annualized EPS of Rs 28, by a PE multiple of 3.
Aeon Investments, a promoter group company, has revoked 2.99 lakh shares representing 1.01% of the equity capital of the company out of 10.68 lakh shares representing 3.60% stake which it had pledged earlier.
Aeon Investments holds 6.62% of the equity capital of the company, whereas total promoter shareholding in the company is 40.26% (as on 30 September 2009).
Atul's net profit rose 16.7% to Rs 21 crore on 20.6% fall in net sales to Rs 274 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in the business of manufacturing dyes and dye intermediates, agro-chemicals, aromatic like para-Anisaldehyde, epoxy resins and pharma intermediates.
Atul rose 2.13% to Rs 84 at 12:55 IST on BSE, after one of the promoter group companies revoked a portion of shares which it had pledged earlier.
The company made this announcement after market hours on Thursday, 3 December 2009.
The stock hit a high of Rs 85 and a low of Rs 82 so far during the day. The stock had hit a 52-week high of Rs 90.50 on 1 October 2009 and a 52-week low of Rs 34 on 9 March 2009.
The company's equity capital is Rs 29.67 crore. Face value per share is Rs 10.
The current price of Rs 84 discounts the company's Q2 September 2009 annualized EPS of Rs 28, by a PE multiple of 3.
Aeon Investments, a promoter group company, has revoked 2.99 lakh shares representing 1.01% of the equity capital of the company out of 10.68 lakh shares representing 3.60% stake which it had pledged earlier.
Aeon Investments holds 6.62% of the equity capital of the company, whereas total promoter shareholding in the company is 40.26% (as on 30 September 2009).
Atul's net profit rose 16.7% to Rs 21 crore on 20.6% fall in net sales to Rs 274 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in the business of manufacturing dyes and dye intermediates, agro-chemicals, aromatic like para-Anisaldehyde, epoxy resins and pharma intermediates.
Unichem Lab strikes 52-week high
Unichem Laboratories surged 4.53% to Rs 278.10 at 13:46 IST on BSE, after the company's wholly owned unit Niche Generics received marketing authorization for Anastrozloe tablets for a number of markets within the European Union.
The company made this announcement during trading hours today, Friday 4 December 2009.
Meanwhile, the BSE Sensex was down 36.93 points, or 0.22%, to 17,148.75.
On BSE, 75,778 shares were traded in the counter as against an average daily volume of 17,571 shares in the past one quarter.
The stock hit a high of Rs 288 so far during the day, which is a 52-week high for the counter. The stock hit a low of Rs 261.40 so far during the day. The stock had hit a 52-week low of Rs 132.15 on 6 March 2009.
The company's equity capital is Rs 18.02 crore. Face value per share is Rs 5.
The current price of Rs 278.10 discounts the company's Q2 September 2009 annualized EPS of Rs 37.68, by a PE multiple of 7.38.
Anastrozole tablet is used for treating breast cancer.
In early November 2009, Unichem Laboratories received approval from the US Food and Drug Administration (US FDA) for its bulk drug facilities at Pithampur, Madhya Pradesh, and Roha, Maharashtra. US Food and Drug Administration has already approved the company's formulation facilities in Goa and Ghaziabad
Unichem Laboratories had in August 2009 received approval from US FDA for Clonidine Hydrochloride tablets in multiple strengths. The drug is used for treating hypertension. The drug is the generic version of Boehringer Ingelheim's Catapres tablets.
Unichem Laboratories' net profit declined 3.1% to Rs 33.97 crore on 0.8% fall in net sales to Rs 173.28 crore in Q2 September 2009 over Q2 September 2008.
Unichem Laboratories is engaged in manufacturing and marketing pharmaceutical formulations, bulk drugs and drug intermediates.
The company made this announcement during trading hours today, Friday 4 December 2009.
Meanwhile, the BSE Sensex was down 36.93 points, or 0.22%, to 17,148.75.
On BSE, 75,778 shares were traded in the counter as against an average daily volume of 17,571 shares in the past one quarter.
The stock hit a high of Rs 288 so far during the day, which is a 52-week high for the counter. The stock hit a low of Rs 261.40 so far during the day. The stock had hit a 52-week low of Rs 132.15 on 6 March 2009.
The company's equity capital is Rs 18.02 crore. Face value per share is Rs 5.
The current price of Rs 278.10 discounts the company's Q2 September 2009 annualized EPS of Rs 37.68, by a PE multiple of 7.38.
Anastrozole tablet is used for treating breast cancer.
In early November 2009, Unichem Laboratories received approval from the US Food and Drug Administration (US FDA) for its bulk drug facilities at Pithampur, Madhya Pradesh, and Roha, Maharashtra. US Food and Drug Administration has already approved the company's formulation facilities in Goa and Ghaziabad
Unichem Laboratories had in August 2009 received approval from US FDA for Clonidine Hydrochloride tablets in multiple strengths. The drug is used for treating hypertension. The drug is the generic version of Boehringer Ingelheim's Catapres tablets.
Unichem Laboratories' net profit declined 3.1% to Rs 33.97 crore on 0.8% fall in net sales to Rs 173.28 crore in Q2 September 2009 over Q2 September 2008.
Unichem Laboratories is engaged in manufacturing and marketing pharmaceutical formulations, bulk drugs and drug intermediates.
Tuesday, December 1, 2009
China wants to buy 10,000 tons of gold!
China Should Boost Gold Reserve Holdings, Youth Daily Reports
Nov. 30 (Bloomberg) -- China should increase the amount of gold it holds in
reserves to reduce potential losses from a depreciating dollar, the China
Youth Dailysaid
today, citing Ji
Xiaonan,
head of the supervisory committee at the state-owned Assets Supervision and
Administration Commission.
“We recommend China increase its gold reserves to 6,000 metric tons within
three-to-five years and possibly to 10,000 tons in eight to 10 years,” the
paper quoted Ji as saying. China increased its gold reserves by 76 percent
to 1,054 tons since 2003, the official Xinhua News Agency reported in April.
China is likely to become the world’s largest producer and consumer of gold
this year, Rozanna
Wozniak,
investment research manager at the World Gold Council, said yesterday. The
dollar has fallen about 20 percent against the euro since Feb. 18. Dubai
World’s possible default may give China an opportunity to invest its foreign
currency reserves in the metal and oil, Ji said in a separate report by the
Economic Information Daily.
“Given the size of their reserves compared with the size of the gold market,
there’s a limit on how much they can add,” David
Barclay,
commodity strategist with Standard Chartered Bank in Hong Kong, said today.
“But it certainly seems that there’s scope for further addition.”
Ji said that the recommendation to buy gold was made by an unidentified
group of experts who had convened since last year to discuss the issue, the
Youth Daily reported.
Record Prices
The nation increased its reserves to 1,054 tons through domestic purchases
and refining scrap metal, Hu
Xiaolian,
head of the State Administration of Foreign Exchange, said in an interview
with the Xinhua News Agency in April.
China may break records for both demand and output this year as jewelry
consumption soars and miners expand production after prices reached all-time
highs, Zhang Yongtao, deputy secretary-general of the China Gold
Association,
said at a conference in Kunming yesterday.
Bullion touched a record $1,195.13 an ounce Nov. 26 as a weaker dollar drove
demand for precious metals as an alternative asset. Gold declined 0.4
percent to $1,172.43 an ounce at 2:23 p.m. in Shanghai.
Some of China’s foreign exchange reserves should be swapped into gold, which
would lessen losses from a depreciating U.S. dollar, the China Youth Daily
said, citing Ji. China is underweight on holdings and will increase buying
as the economy expands, said Jeffrey
Rhodes,
chief executive officer of INTL Commodities DMCC, Oct. 23.
China’s 1,054 tons of gold represent less than two percent of its reserves,
Dubai-based Rhodes said then. That compares with the international average
of 10.2 percent held by central banks worldwide which have under 30,000 tons
of the metal, equivalent to about $960 billion.
The country may not find it “very necessary” to purchase bullion for its
reserves after the price rose above $1,000 an ounce, Zhang Yuyan, an
economist at the Chinese Academy of Social Sciences, said Nov. 5.
from another forum
Nov. 30 (Bloomberg) -- China should increase the amount of gold it holds in
reserves to reduce potential losses from a depreciating dollar, the China
Youth Daily
today, citing Ji
Xiaonan
head of the supervisory committee at the state-owned Assets Supervision and
Administration Commission.
“We recommend China increase its gold reserves to 6,000 metric tons within
three-to-five years and possibly to 10,000 tons in eight to 10 years,” the
paper quoted Ji as saying. China increased its gold reserves by 76 percent
to 1,054 tons since 2003, the official Xinhua News Agency reported in April.
China is likely to become the world’s largest producer and consumer of gold
this year, Rozanna
Wozniak
investment research manager at the World Gold Council, said yesterday. The
dollar has fallen about 20 percent against the euro since Feb. 18. Dubai
World’s possible default may give China an opportunity to invest its foreign
currency reserves in the metal and oil, Ji said in a separate report by the
Economic Information Daily.
“Given the size of their reserves compared with the size of the gold market,
there’s a limit on how much they can add,” David
Barclay
commodity strategist with Standard Chartered Bank in Hong Kong, said today.
“But it certainly seems that there’s scope for further addition.”
Ji said that the recommendation to buy gold was made by an unidentified
group of experts who had convened since last year to discuss the issue, the
Youth Daily reported.
Record Prices
The nation increased its reserves to 1,054 tons through domestic purchases
and refining scrap metal, Hu
Xiaolian
head of the State Administration of Foreign Exchange, said in an interview
with the Xinhua News Agency in April.
China may break records for both demand and output this year as jewelry
consumption soars and miners expand production after prices reached all-time
highs, Zhang Yongtao, deputy secretary-general of the China Gold
Association
said at a conference in Kunming yesterday.
Bullion touched a record $1,195.13 an ounce Nov. 26 as a weaker dollar drove
demand for precious metals as an alternative asset. Gold declined 0.4
percent to $1,172.43 an ounce at 2:23 p.m. in Shanghai.
Some of China’s foreign exchange reserves should be swapped into gold, which
would lessen losses from a depreciating U.S. dollar, the China Youth Daily
said, citing Ji. China is underweight on holdings and will increase buying
as the economy expands, said Jeffrey
Rhodes
chief executive officer of INTL Commodities DMCC, Oct. 23.
China’s 1,054 tons of gold represent less than two percent of its reserves,
Dubai-based Rhodes said then. That compares with the international average
of 10.2 percent held by central banks worldwide which have under 30,000 tons
of the metal, equivalent to about $960 billion.
The country may not find it “very necessary” to purchase bullion for its
reserves after the price rose above $1,000 an ounce, Zhang Yuyan, an
economist at the Chinese Academy of Social Sciences, said Nov. 5.
from another forum
Monday, November 30, 2009
Robust GDP, global recovery to drive Mkts further up: Analysts
30 Nov 2009, 1751 hrs IST, PTI
MUMBAI: The stock markets today shrugged off the Dubai hiccups and ended the days almost two per cent higher, and analysts believe the momentum is likely to continue as the street will take positive cues from the robust economic growth, as well as global rally.
The economy grew by a robust 7.9 per cent in the September quarter, propelled by increased government spending and surge in the manufacturing sector.
"The GDP figures are higher compared to market expectations. If the third quarter figures
continue to hold above seven per cent, then overseas investors may increase their asset allocation in stocks here," Taurus Mutual Fund managing director RK Gupta said.
Analysts feel buoyed by good growth across all vital sectors, domestic markets sustained momentum throughout the day despite weak European cues. The European stocks were down by one per cent in early trade.
"The domestic trigger is strong enough to hold the market steady against weak European cues. Going ahead, investors should watch the movement in the US markets for a direction," Unicon Financial chief executive Gajendra Nagpal said.
The benchmark Sensex today closed up 294.21 points or 1.77 per cent at 16,926.22. During the intra-day trade the index had scaled up to 17,027, a rise of 395 points.
"A positive development in the US markets today could catapult our markets further. However, a negative trend might not bring in much of a fall," Nagpal said.
During the September quarter the manufacturing output grew by 9.2 per cent as consumers increased purchases of cars and other goods.
"The manufacturing sector growth is likely to increase in the December quarter. If the farm output increases in the same tune, then the country can clock a decent growth. Fresh money can come into the stock markets around February," Gupta added.
Further, agriculture output was up by 0.9 per cent during the quarter, while the services sector grew by 12.7 per cent during the reporting quarter.
For the first half, the economy grew by seven per cent against 7.8 per cent a year ago, prompting the finance minister to say that the economy would log in over 7 per cent growth this fiscal.
"The GDP figures reinforces the fact that the stimulus provided by the government both on the monetary front and the fiscal stimulus are bearing results. We can expect an upgradation in the overall GDP growth numbers for FY10," Angel Broking VP for research Sarabjit Kour Nangra said.
Echoing similar views Nagpal noted that close to seven per cent growth in FY10 would be a good figure for the market.
vIA:E.T
MUMBAI: The stock markets today shrugged off the Dubai hiccups and ended the days almost two per cent higher, and analysts believe the momentum is likely to continue as the street will take positive cues from the robust economic growth, as well as global rally.
The economy grew by a robust 7.9 per cent in the September quarter, propelled by increased government spending and surge in the manufacturing sector.
"The GDP figures are higher compared to market expectations. If the third quarter figures
continue to hold above seven per cent, then overseas investors may increase their asset allocation in stocks here," Taurus Mutual Fund managing director RK Gupta said.
Analysts feel buoyed by good growth across all vital sectors, domestic markets sustained momentum throughout the day despite weak European cues. The European stocks were down by one per cent in early trade.
"The domestic trigger is strong enough to hold the market steady against weak European cues. Going ahead, investors should watch the movement in the US markets for a direction," Unicon Financial chief executive Gajendra Nagpal said.
The benchmark Sensex today closed up 294.21 points or 1.77 per cent at 16,926.22. During the intra-day trade the index had scaled up to 17,027, a rise of 395 points.
"A positive development in the US markets today could catapult our markets further. However, a negative trend might not bring in much of a fall," Nagpal said.
During the September quarter the manufacturing output grew by 9.2 per cent as consumers increased purchases of cars and other goods.
"The manufacturing sector growth is likely to increase in the December quarter. If the farm output increases in the same tune, then the country can clock a decent growth. Fresh money can come into the stock markets around February," Gupta added.
Further, agriculture output was up by 0.9 per cent during the quarter, while the services sector grew by 12.7 per cent during the reporting quarter.
For the first half, the economy grew by seven per cent against 7.8 per cent a year ago, prompting the finance minister to say that the economy would log in over 7 per cent growth this fiscal.
"The GDP figures reinforces the fact that the stimulus provided by the government both on the monetary front and the fiscal stimulus are bearing results. We can expect an upgradation in the overall GDP growth numbers for FY10," Angel Broking VP for research Sarabjit Kour Nangra said.
Echoing similar views Nagpal noted that close to seven per cent growth in FY10 would be a good figure for the market.
vIA:E.T
Stimulus pushes Q2 GDP up 7.9% Y-O-Y
30 Nov 2009, 1116 hrs IST, REUTERS
NEW DELHI: India's economy grew an annual 7.9 percent in the September quarter, much faster than expected on government stimulus spending and a surge in manufacturing, adding pressure on the central bank to lift interest rates as inflation rises.
The annual growth for India's fiscal second quarter was far above a median forecast of 6.3 percent in a Reuters poll as agricultural output performed better than expected, sending the yield on the benchmark 10-year bond up by 2 basis points as investors bet on higher interest rates. The growth was the strongest for Asia's third-largest economy in 18 months.
"This data could be a green light for the Reserve Bank of India to hike rates, and there are greater chances of this by end of the calendar year. The exit from the fiscal stimulus by the government may also be earlier post the GDP data," said Robert Prior-Wandesforde, senior Asia economist at HSBC in Singapore.
In the June quarter, India's economy grew 6.1 percent from a year earlier, and Prior-Wandesforde said that by his calculation the September's period's growth was the sharpest on a quarter-by-quarter basis since quarterly data began in 1996.
Manufacturing output expanded 9.2 percent in the September quarter as consumers stepped up purchases of cars and other goods. Farm output was up 0.9 percent, beating expectations for a decline, although economists warned that the impact of the poor monsoon was likely to be seen in the current quarter.
"The December quarter will show agriculture declining, because that's when the harvest shortfall will get captured," said Rajeev Malik, economist at Macquarie in Singapore, who stuck with his view that the central bank would deploy liquidity management steps rather than rate hikes in December and January.
"I don't think they (RBI) are going to be swung by what agriculture has done on a technical basis," he said. Last week, India's finance minister expressed worry about rising food prices -- the result of a bad summer monsoon and floods that have crimped farm output.
On Monday, however, a top government advisor said there were no serious inflation concerns for now and said he expected no change in government stimulus policy for the current fiscal year. "It is difficult to project what will happen in the rest of the year. But this performance does suggest that there may well have to be an upward revision in the GDP growth of 6.5 percent which has been projected so far," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission.
India's roaring September quarter performance still lagged the 8.9 percent growth recorded by China during the same quarter. Consumers' share of spending in the Indian economy totalled 53.5 percent in July-September, roughly in line with 53.4 percent a year earlier, while the government's share rose to 10.6 percent from 8.7 percent on the back of stimulus spending, Monday's data showed.
The economy accelerated from its 5.8 percent rate in the December and March quarters to 6.1 percent in June on pick-ups in the mining, manufacturing, and electricity and services sectors from the previous quarter. In the 2008/09 fiscal year , India's economy grew 6.7 percent, its weakest in six years and well below rates of 9 percent or more in the previous three years.
The Reserve Bank of India has warned the poor monsoon was more likely to drive inflation than to curb growth. The index of food prices jumped 15.6 percent in the year to mid-November, although supply-side inflation is largely beyond the purview of monetary policy.
The central bank cut its key lending rate by 425 basis points between October 2008 and April, while the government slashed duty rates and stepped up spending to pump-prime the economy and prevent massive job losses. The central bank forecast growth during 2009/10 would come in at 6 percent with an upward bias.
The finance minister said last week growth could be 6-7 percent in 2009/10 and rebound to 8 percent next year. The Reserve Bank of India late last month began its exit from its extremely loose monetary policy by removing some of the liquidity support measures implemented to help India weather the global downturn. Economists in a Reuters poll at the time were divided over when the RBI would begin to raise interest rates, but were unanimous that rates would increase by the end of April. The central bank will hold monetary policy review meetings in January and April, but can adjust rates at any time.
NEW DELHI: India's economy grew an annual 7.9 percent in the September quarter, much faster than expected on government stimulus spending and a surge in manufacturing, adding pressure on the central bank to lift interest rates as inflation rises.
The annual growth for India's fiscal second quarter was far above a median forecast of 6.3 percent in a Reuters poll as agricultural output performed better than expected, sending the yield on the benchmark 10-year bond up by 2 basis points as investors bet on higher interest rates. The growth was the strongest for Asia's third-largest economy in 18 months.
"This data could be a green light for the Reserve Bank of India to hike rates, and there are greater chances of this by end of the calendar year. The exit from the fiscal stimulus by the government may also be earlier post the GDP data," said Robert Prior-Wandesforde, senior Asia economist at HSBC in Singapore.
In the June quarter, India's economy grew 6.1 percent from a year earlier, and Prior-Wandesforde said that by his calculation the September's period's growth was the sharpest on a quarter-by-quarter basis since quarterly data began in 1996.
Manufacturing output expanded 9.2 percent in the September quarter as consumers stepped up purchases of cars and other goods. Farm output was up 0.9 percent, beating expectations for a decline, although economists warned that the impact of the poor monsoon was likely to be seen in the current quarter.
"The December quarter will show agriculture declining, because that's when the harvest shortfall will get captured," said Rajeev Malik, economist at Macquarie in Singapore, who stuck with his view that the central bank would deploy liquidity management steps rather than rate hikes in December and January.
"I don't think they (RBI) are going to be swung by what agriculture has done on a technical basis," he said. Last week, India's finance minister expressed worry about rising food prices -- the result of a bad summer monsoon and floods that have crimped farm output.
On Monday, however, a top government advisor said there were no serious inflation concerns for now and said he expected no change in government stimulus policy for the current fiscal year. "It is difficult to project what will happen in the rest of the year. But this performance does suggest that there may well have to be an upward revision in the GDP growth of 6.5 percent which has been projected so far," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission.
India's roaring September quarter performance still lagged the 8.9 percent growth recorded by China during the same quarter. Consumers' share of spending in the Indian economy totalled 53.5 percent in July-September, roughly in line with 53.4 percent a year earlier, while the government's share rose to 10.6 percent from 8.7 percent on the back of stimulus spending, Monday's data showed.
The economy accelerated from its 5.8 percent rate in the December and March quarters to 6.1 percent in June on pick-ups in the mining, manufacturing, and electricity and services sectors from the previous quarter. In the 2008/09 fiscal year , India's economy grew 6.7 percent, its weakest in six years and well below rates of 9 percent or more in the previous three years.
The Reserve Bank of India has warned the poor monsoon was more likely to drive inflation than to curb growth. The index of food prices jumped 15.6 percent in the year to mid-November, although supply-side inflation is largely beyond the purview of monetary policy.
The central bank cut its key lending rate by 425 basis points between October 2008 and April, while the government slashed duty rates and stepped up spending to pump-prime the economy and prevent massive job losses. The central bank forecast growth during 2009/10 would come in at 6 percent with an upward bias.
The finance minister said last week growth could be 6-7 percent in 2009/10 and rebound to 8 percent next year. The Reserve Bank of India late last month began its exit from its extremely loose monetary policy by removing some of the liquidity support measures implemented to help India weather the global downturn. Economists in a Reuters poll at the time were divided over when the RBI would begin to raise interest rates, but were unanimous that rates would increase by the end of April. The central bank will hold monetary policy review meetings in January and April, but can adjust rates at any time.
Sunday, November 29, 2009
FACTBOX - What assets Dubai could be forced to sell
DUBAI (Reuters) - Dubai will attempt to reassure markets and investors on Monday on how it plans to restructure its beleaguered conglomerate Dubai World after it requested a shock standstill from bondholders for a $3.5 billion bond maturing on Dec 14.
The lack of clarity and the prospect of bondholders rejecting the delay in repayments could lead to a fire sale of prize assets and even push the emirate to divest speculative investments made during the six-year boom that are unlikely to generate long-term revenue.
Following are details of key assets and high-profile holdings possibly up for sale.
DUBAI WORLD ASSETS
DP WORLD
One of the world's largest port operators is arguably the crown jewel in its trophy cabinet. Its 2007 IPO, the region's largest to date, raised almost $5 billion, but its share price has fallen by more than two thirds of its original value. The firm went to reassure investors on Nov. 26 it was not part of Dubai World's restructuring. Dubai World was in talks with a private equity firm to sell a stake in the port operator.
STANDARD CHARTERED
Istithmar bought a 2.7 percent stake worth about $1 billion in October, 2006. The bank signalled on Friday its exposure to Dubai World would not be material.
MGM MIRAGE
In 2007, Dubai World invested about $5 billion in casino operator MGM Mirage by buying shares and half of an $8.5 billion Las Vegas project. Dubai World last year sued MGM Mirage as credit dried up and CityCenter flirted with bankruptcy. The project has been plagued by construction problems.
BARNEYS
Istithmar World bought U.S. luxury retail chain Barneys for $942 million in 2007. Barneys hired restructuring advisory firm Perella Weinberg in August to help it mull options that would shore up its financial position.
PERELLA WEINBERG
Istithmar also invested about $100 million into the boutique investment bank in 2006.
CIRQUE DU SOLEIL
Property developer Nakheel and Istithmar bought a 20 percent stake in Montreal-based international circus touring company in June 2008 and had planned to build a theater with the group on its main palm-shaped island.
TURNBERRY GOLF COURSE
Leisurecorp, Dubai World's leisure and sports investment unit, bought the Turnberry Golf course, home to golf's oldest competition, from Starwood Hotels & Resorts in Nov 2008 for about $100 million.
QUEEN ELIZABETH 2 LINER
Originally bought in 2007 for $100 million to be converted into a luxury hotel and moored off Dubai's Palm, the ship's future has been under scrutiny since it docked at Port Rashid in Dubai last year for refurbishment. In July, Nakheel said it was mulling moving the liner to another location, or Africa.
ATLANTIS DUBAI
The resort, which opened in November to a $50 million firework display, is a joint venture with South Africa tycoon Sol Kerzner.
DUBAI PRIZE ASSETS
EMIRATES
The airline, whose chairman also chairs Dubai's supreme fiscal committee, has $55 billion of orders of planes from Boeing and Airbus. It has been at the forefront of turning Dubai into an international hub and had been nearing a potential share sale before the financial crisis hit. Emirates has repeatedly fought back speculation it would merge with Abu Dhabi's carrier Etihad Airways.
DUBAI ALUMINIUM
Established in 1979, the aluminium producer has become one of the world's largest producers and exporters of the metal and in 2006 entered into a joint venture with Mubadala Development Co, a wholly-owned investment vehicle of the Abu Dhabi government to build one of the largest single aluminium plants in the world.
LONDON STOCK EXCHANGE
Borse Dubai, which took a 21 percent stake in the bourse operator in November 2007, said in June it saw its LSE investment as long-term and had no plans to sell its stake. LSE shares were among the biggest fallers on the FTSE 100 after Dubai's debt news.
HSBC
The investment arm of Dubai's ruler Dubai International Capital (DIC) in 2007 bought an undisclosed stake in HSBC making it one of the largest investors in Europe's biggest banks. DIC in 2006 set up a fund aimed at buying into some of world's largest listed equities. The group earlier this year went under restructuring and its chief executive left the company.
DEUTSCHE BANK
DIFC Investments, a unit of the Dubai international Financial Centre, bought a 2.2 percent stake in the German lender in 2007 in a deal worth about $1.83 billion. The DIFC's governor was last week replaced as part of a shake-up Dubai's hierarchy.
SONY CORP
Dubai International Capital through its Global Strategic Equities Fund (GSEF) bought a stake in the Japanese electronics and entertainment firm in 2007 in what it described at the time as a substantial investment. Anyone who buys more than 5 percent of a listed company on Tokyo is required to report the stake to regulators within five business days.
EUROPEAN AERONAUTIC DEFENCE & SPACE COMPANY (EADS)
The GSEF also bought into Airbus' parent company taking a 3.12 percent stake, making it one of the largest institutional investors in the aerospace group.
ALLIANCE MEDICAL
DIC also in 2007 bought Alliance Medical for $1.25 billion with plans to expand one of Europe's largest MRI and CT scan services provider into the Middle East and Asia.
EMAAR PROPERTIES
The Arab world's largest property developer by market value is in the midst of a merger with three other state-linked developers after a failed acquisition in the United States and Dubai's real estate market crashing left it vulnerable. Still, its portfolio includes the world's tallest tower Burj Dubai, set to open in January, and one of the world's biggest malls already open.
(Compiled by John Irish; Editing by Mike Nesbit)
The lack of clarity and the prospect of bondholders rejecting the delay in repayments could lead to a fire sale of prize assets and even push the emirate to divest speculative investments made during the six-year boom that are unlikely to generate long-term revenue.
Following are details of key assets and high-profile holdings possibly up for sale.
DUBAI WORLD ASSETS
DP WORLD
One of the world's largest port operators is arguably the crown jewel in its trophy cabinet. Its 2007 IPO, the region's largest to date, raised almost $5 billion, but its share price has fallen by more than two thirds of its original value. The firm went to reassure investors on Nov. 26 it was not part of Dubai World's restructuring. Dubai World was in talks with a private equity firm to sell a stake in the port operator.
STANDARD CHARTERED
Istithmar bought a 2.7 percent stake worth about $1 billion in October, 2006. The bank signalled on Friday its exposure to Dubai World would not be material.
MGM MIRAGE
In 2007, Dubai World invested about $5 billion in casino operator MGM Mirage by buying shares and half of an $8.5 billion Las Vegas project. Dubai World last year sued MGM Mirage as credit dried up and CityCenter flirted with bankruptcy. The project has been plagued by construction problems.
BARNEYS
Istithmar World bought U.S. luxury retail chain Barneys for $942 million in 2007. Barneys hired restructuring advisory firm Perella Weinberg in August to help it mull options that would shore up its financial position.
PERELLA WEINBERG
Istithmar also invested about $100 million into the boutique investment bank in 2006.
CIRQUE DU SOLEIL
Property developer Nakheel and Istithmar bought a 20 percent stake in Montreal-based international circus touring company in June 2008 and had planned to build a theater with the group on its main palm-shaped island.
TURNBERRY GOLF COURSE
Leisurecorp, Dubai World's leisure and sports investment unit, bought the Turnberry Golf course, home to golf's oldest competition, from Starwood Hotels & Resorts in Nov 2008 for about $100 million.
QUEEN ELIZABETH 2 LINER
Originally bought in 2007 for $100 million to be converted into a luxury hotel and moored off Dubai's Palm, the ship's future has been under scrutiny since it docked at Port Rashid in Dubai last year for refurbishment. In July, Nakheel said it was mulling moving the liner to another location, or Africa.
ATLANTIS DUBAI
The resort, which opened in November to a $50 million firework display, is a joint venture with South Africa tycoon Sol Kerzner.
DUBAI PRIZE ASSETS
EMIRATES
The airline, whose chairman also chairs Dubai's supreme fiscal committee, has $55 billion of orders of planes from Boeing and Airbus. It has been at the forefront of turning Dubai into an international hub and had been nearing a potential share sale before the financial crisis hit. Emirates has repeatedly fought back speculation it would merge with Abu Dhabi's carrier Etihad Airways.
DUBAI ALUMINIUM
Established in 1979, the aluminium producer has become one of the world's largest producers and exporters of the metal and in 2006 entered into a joint venture with Mubadala Development Co, a wholly-owned investment vehicle of the Abu Dhabi government to build one of the largest single aluminium plants in the world.
LONDON STOCK EXCHANGE
Borse Dubai, which took a 21 percent stake in the bourse operator in November 2007, said in June it saw its LSE investment as long-term and had no plans to sell its stake. LSE shares were among the biggest fallers on the FTSE 100 after Dubai's debt news.
HSBC
The investment arm of Dubai's ruler Dubai International Capital (DIC) in 2007 bought an undisclosed stake in HSBC making it one of the largest investors in Europe's biggest banks. DIC in 2006 set up a fund aimed at buying into some of world's largest listed equities. The group earlier this year went under restructuring and its chief executive left the company.
DEUTSCHE BANK
DIFC Investments, a unit of the Dubai international Financial Centre, bought a 2.2 percent stake in the German lender in 2007 in a deal worth about $1.83 billion. The DIFC's governor was last week replaced as part of a shake-up Dubai's hierarchy.
SONY CORP
Dubai International Capital through its Global Strategic Equities Fund (GSEF) bought a stake in the Japanese electronics and entertainment firm in 2007 in what it described at the time as a substantial investment. Anyone who buys more than 5 percent of a listed company on Tokyo is required to report the stake to regulators within five business days.
EUROPEAN AERONAUTIC DEFENCE & SPACE COMPANY (EADS)
The GSEF also bought into Airbus' parent company taking a 3.12 percent stake, making it one of the largest institutional investors in the aerospace group.
ALLIANCE MEDICAL
DIC also in 2007 bought Alliance Medical for $1.25 billion with plans to expand one of Europe's largest MRI and CT scan services provider into the Middle East and Asia.
EMAAR PROPERTIES
The Arab world's largest property developer by market value is in the midst of a merger with three other state-linked developers after a failed acquisition in the United States and Dubai's real estate market crashing left it vulnerable. Still, its portfolio includes the world's tallest tower Burj Dubai, set to open in January, and one of the world's biggest malls already open.
(Compiled by John Irish; Editing by Mike Nesbit)
FACTBOX - Gulf Arab policy steps to address financial crisis
REUTERS - Gulf Arab oil exporters have adopted an array of policy measures to ease tight liquidity and prop up sagging investor confidence during a global recession.
Dubai's government took the latest step on Sunday, and said it would provide additional financing for commercial banks and it stood behind the Gulf Arab country's banking system and branches of foreign banks.
Below are details of government and central bank actions.
KUWAIT
Aug 10 - Kuwait central bank said it would issue $348 million of one-year treasury bonds on Aug. 12.
Aug 4 - Central bank said it would issue $348.8 million of one-year treasury bonds on Aug. 5 at a coupon of 1.5 percent.
July 1 - Central bank cut its three repurchase rates by 25 basis points each, but left its benchmark discount rate on hold.
May 13 - Kuwait central bank decides to cut benchmark discount rate by 50 bps to 3 pct from May 14. This is the fifth cut since October, taking total reduction to 275 basis points.
April 2 - Kuwait's cabinet approved a bylaw to implement a $5.11 billion economic support package, including a guarantee of 50 percent of new loans extended to local firms.
Nov. 19 - The central bank introduced new short-term repurchase agreements to give banks more access to funding.
Dec. 4 - Sovereign wealth fund said it would invest 1.5 billion dinars in local equities, adding later the funds aimed to stabilise the bourse and would invest for the long term.
Oct. 29 - Kuwait passed law guaranteeing all bank deposits after the central bank was forced to save Gulf Bank, which suffered steep derivatives trading losses.
Oct. 9 - The Kuwait Investment Authority pumped cash into the bourse to help stabilise markets.
SAUDI ARABIA
June 16 - Saudi Arabian Monetary Agency (SAMA) halved the interest rate it pays to commercial banks for deposits, but kept its benchmark repurchase rate unchanged.
June 4 - Saudi Arabia's central bank freezes some bank accounts related to industrial group Ahmad Hamad Al Gosaibi Group & Brothers (AHAB), bankers said.
June 1 - Central bank orders domestic lenders to freeze bank accounts of businessman Maan al-Sanea, one of the country's wealthiest businessmen, chairman and founder of the Saad group, and big shareholder in HSBC.
May 17 - Central bank governor said Saudi was drawing on some foreign reserves but not selling foreign assets to finance a growing budget designed to stimulate the economy.
April 14 - Saudi Arabian Monetary Agency (SAMA) cut its reverse repurchase rate by 25 basis points to 0.5 percent. It had reduced the rate in January and December by a total of 125 basis points.
Jan. 19 - SAMA cuts benchmark repurchase rate by 50 basis points to 2 percent, having lowered it by 50 basis points in December. In five moves since October, the repo has been lowered by a total of 350 basis points.
Nov. 23 - SAMA lowered bank reserve requirements to 7 percent from 10 percent. Since October, it has reduced the reserve ratio from 13 percent.
Oct. 21 - SAMA poured $3 billion in long-term bank deposits, its first direct injection of U.S. dollars in a decade.
Oct. 17 - Saudi Arabia's top economic body, the Supreme Economic Council, promised to guarantee bank deposits.
UNITED ARAB EMIRATES
Nov. 29 - The central bank set up a new additional facility for commercial banks. The facility is at the rate of 50 basis points above the 3 months EIBOR. It also said it stood behind UAE banks and branches of foreign banks.
Nov. 25- Duabi government raised a further $5 billion as part of a $20 billion bond programme launched in 2009.
Aug. 31 - Central bank said would cut interest rate on its liquidity support facilities to banks to 1.5 percent from 2.5 percent in a bid to boost economic growth and spur lending. The cut would take effect starting Sept. 1.
Aug. 26 - Central bank official said new UAE EIBOR panel to consist of 11 banks.
Aug. 19 - Central bank will introduce an official interbank offered benchmark rate mechanism in the first half of September.
Aug. 5 - Country's interbank rates dropped after announcement of central bank benchmark plan.
Aug. 4 - Central bank said it planned to set up an Emirates Interbank Offered Rate (EIBOR) that would create an official benchmark for the dirham's offered rate, and ensure a better view of "prevailing market conditions."
July 16 - Central bank met commercial banks to assess potential problems due to lending to troubled Saudi family conglomerates.
Feb. 25 - Dubai said it is working on a stimulus package to support small- and medium-sized companies.
Feb. 22 - Dubai launched a $20 billion bond programme and sold the first $10 billion tranche to the UAE central bank, easing worries state-linked companies could default on debts.
Feb. 4 - Abu Dhabi government said it plans to inject $4.4 billion to recapitalise five of its banks.
Jan. 19 - UAE lowered overnight repurchase rate by 50 basis points to 1 percent.
Nov - The government set up a committee to come up with policy responses to the crisis, including the economy minister, central bank governor and minister of state for finance.
Oct. 21 - The finance ministry poured $6.8 billion into bank deposits, the first tranche of a $19.1-billion rescue facility. It deposited another $6.8 billion into banks in November.
Oct. 13 - The UAE guaranteed bank deposits.
Oct. 8 - UAE cut repo by 50 basis points to 1.5 percent, and lowered borrowing rate on its $13.6 billion facility.
Sep. 25 - The central bank set up a $13.6 billion emergency bank lending facility.
QATAR
March 24 - Qatar central bank says it has not cut interest rates since the autumn because liquidity is fine and it is tackling inflation.
March 20 - Qatar said it bought $1.79 billion worth of listed banks' investment portfolios.
Jan. 19 - The government ordered two local real estate companies to merge as consolidation rises to face global turmoil.
Oct. 13 - Qatar's sovereign wealth fund, the Qatar Investment Authority, said it would buy 10 percent to 20 percent of listed banks' capital to boost confidence.
OMAN
Jan. 27 - Oman said it would start a $390 million market-maker fund on Feb. 1.
Jan. 1 - The central bank reduced bank reserve requirements to 5 percent from 8 percent and raised the lending ratio.
Dec. 4 - The central bank said it amended bank reserve requirement rules to release 270 million riyals ($700 million) into the banking system.
Dec. 31 - Oman raised its repurchase rate by 47 basis points to 2 percent, having lowered the rate by more than 200 basis points between November and mid-December.
Nov. 3 - The central bank allocated about $2 billion to local banks to provide dollar liquidity.
BAHRAIN
Sept 15 - Bahrain's central bank cut its one-week deposit facility by 25 basis points to 0.50 percent from 0.75 percent and kept its overnight deposit facility at 0.25 percent. Repo and lending rates were cut to 2.25 percent from 2.75 percent.
Aug 9 - Bahrain names administrators for Saudi groups' two banks.
July 30 - Bahrain's central bank seized two banks belonging to debt-laden Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi and Brothers.
June 23 - Central bank launched probe at The International Banking Corporation (TIBC) after its owner, Saudi-based Algosaibi group (AHAB), said it had discovered substantial irregularities in its financial services arm.
Mar. 3 - Central bank cuts bank reserve requirements to 5 percent from 7 percent, citing easing inflation.
Dec. 18 - The central bank slashed all key interest rates by 75 basis points in response to a Federal Reserve cut, taking its lending rates to 2.75 percent, its one-week deposit rate to 0.75 percent and its overnight deposit rate to 0.25 percent.
Oct. 30 and Oct. 9, Bahrain cut overnight secured rate and repurchase rate by a combined 175 basis points to 3.5 percent. It cut the one-week deposit rate by 50 basis points to 1.5 percent and the overnight deposit to 1 percent.
Oct. 30 - Central bank expanded acceptable collateral for overnight funds to include ijara sukuk, a type of Islamic bond.
Dubai's government took the latest step on Sunday, and said it would provide additional financing for commercial banks and it stood behind the Gulf Arab country's banking system and branches of foreign banks.
Below are details of government and central bank actions.
KUWAIT
Aug 10 - Kuwait central bank said it would issue $348 million of one-year treasury bonds on Aug. 12.
Aug 4 - Central bank said it would issue $348.8 million of one-year treasury bonds on Aug. 5 at a coupon of 1.5 percent.
July 1 - Central bank cut its three repurchase rates by 25 basis points each, but left its benchmark discount rate on hold.
May 13 - Kuwait central bank decides to cut benchmark discount rate by 50 bps to 3 pct from May 14. This is the fifth cut since October, taking total reduction to 275 basis points.
April 2 - Kuwait's cabinet approved a bylaw to implement a $5.11 billion economic support package, including a guarantee of 50 percent of new loans extended to local firms.
Nov. 19 - The central bank introduced new short-term repurchase agreements to give banks more access to funding.
Dec. 4 - Sovereign wealth fund said it would invest 1.5 billion dinars in local equities, adding later the funds aimed to stabilise the bourse and would invest for the long term.
Oct. 29 - Kuwait passed law guaranteeing all bank deposits after the central bank was forced to save Gulf Bank, which suffered steep derivatives trading losses.
Oct. 9 - The Kuwait Investment Authority pumped cash into the bourse to help stabilise markets.
SAUDI ARABIA
June 16 - Saudi Arabian Monetary Agency (SAMA) halved the interest rate it pays to commercial banks for deposits, but kept its benchmark repurchase rate unchanged.
June 4 - Saudi Arabia's central bank freezes some bank accounts related to industrial group Ahmad Hamad Al Gosaibi Group & Brothers (AHAB), bankers said.
June 1 - Central bank orders domestic lenders to freeze bank accounts of businessman Maan al-Sanea, one of the country's wealthiest businessmen, chairman and founder of the Saad group, and big shareholder in HSBC.
May 17 - Central bank governor said Saudi was drawing on some foreign reserves but not selling foreign assets to finance a growing budget designed to stimulate the economy.
April 14 - Saudi Arabian Monetary Agency (SAMA) cut its reverse repurchase rate by 25 basis points to 0.5 percent. It had reduced the rate in January and December by a total of 125 basis points.
Jan. 19 - SAMA cuts benchmark repurchase rate by 50 basis points to 2 percent, having lowered it by 50 basis points in December. In five moves since October, the repo has been lowered by a total of 350 basis points.
Nov. 23 - SAMA lowered bank reserve requirements to 7 percent from 10 percent. Since October, it has reduced the reserve ratio from 13 percent.
Oct. 21 - SAMA poured $3 billion in long-term bank deposits, its first direct injection of U.S. dollars in a decade.
Oct. 17 - Saudi Arabia's top economic body, the Supreme Economic Council, promised to guarantee bank deposits.
UNITED ARAB EMIRATES
Nov. 29 - The central bank set up a new additional facility for commercial banks. The facility is at the rate of 50 basis points above the 3 months EIBOR. It also said it stood behind UAE banks and branches of foreign banks.
Nov. 25- Duabi government raised a further $5 billion as part of a $20 billion bond programme launched in 2009.
Aug. 31 - Central bank said would cut interest rate on its liquidity support facilities to banks to 1.5 percent from 2.5 percent in a bid to boost economic growth and spur lending. The cut would take effect starting Sept. 1.
Aug. 26 - Central bank official said new UAE EIBOR panel to consist of 11 banks.
Aug. 19 - Central bank will introduce an official interbank offered benchmark rate mechanism in the first half of September.
Aug. 5 - Country's interbank rates dropped after announcement of central bank benchmark plan.
Aug. 4 - Central bank said it planned to set up an Emirates Interbank Offered Rate (EIBOR) that would create an official benchmark for the dirham's offered rate, and ensure a better view of "prevailing market conditions."
July 16 - Central bank met commercial banks to assess potential problems due to lending to troubled Saudi family conglomerates.
Feb. 25 - Dubai said it is working on a stimulus package to support small- and medium-sized companies.
Feb. 22 - Dubai launched a $20 billion bond programme and sold the first $10 billion tranche to the UAE central bank, easing worries state-linked companies could default on debts.
Feb. 4 - Abu Dhabi government said it plans to inject $4.4 billion to recapitalise five of its banks.
Jan. 19 - UAE lowered overnight repurchase rate by 50 basis points to 1 percent.
Nov - The government set up a committee to come up with policy responses to the crisis, including the economy minister, central bank governor and minister of state for finance.
Oct. 21 - The finance ministry poured $6.8 billion into bank deposits, the first tranche of a $19.1-billion rescue facility. It deposited another $6.8 billion into banks in November.
Oct. 13 - The UAE guaranteed bank deposits.
Oct. 8 - UAE cut repo by 50 basis points to 1.5 percent, and lowered borrowing rate on its $13.6 billion facility.
Sep. 25 - The central bank set up a $13.6 billion emergency bank lending facility.
QATAR
March 24 - Qatar central bank says it has not cut interest rates since the autumn because liquidity is fine and it is tackling inflation.
March 20 - Qatar said it bought $1.79 billion worth of listed banks' investment portfolios.
Jan. 19 - The government ordered two local real estate companies to merge as consolidation rises to face global turmoil.
Oct. 13 - Qatar's sovereign wealth fund, the Qatar Investment Authority, said it would buy 10 percent to 20 percent of listed banks' capital to boost confidence.
OMAN
Jan. 27 - Oman said it would start a $390 million market-maker fund on Feb. 1.
Jan. 1 - The central bank reduced bank reserve requirements to 5 percent from 8 percent and raised the lending ratio.
Dec. 4 - The central bank said it amended bank reserve requirement rules to release 270 million riyals ($700 million) into the banking system.
Dec. 31 - Oman raised its repurchase rate by 47 basis points to 2 percent, having lowered the rate by more than 200 basis points between November and mid-December.
Nov. 3 - The central bank allocated about $2 billion to local banks to provide dollar liquidity.
BAHRAIN
Sept 15 - Bahrain's central bank cut its one-week deposit facility by 25 basis points to 0.50 percent from 0.75 percent and kept its overnight deposit facility at 0.25 percent. Repo and lending rates were cut to 2.25 percent from 2.75 percent.
Aug 9 - Bahrain names administrators for Saudi groups' two banks.
July 30 - Bahrain's central bank seized two banks belonging to debt-laden Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi and Brothers.
June 23 - Central bank launched probe at The International Banking Corporation (TIBC) after its owner, Saudi-based Algosaibi group (AHAB), said it had discovered substantial irregularities in its financial services arm.
Mar. 3 - Central bank cuts bank reserve requirements to 5 percent from 7 percent, citing easing inflation.
Dec. 18 - The central bank slashed all key interest rates by 75 basis points in response to a Federal Reserve cut, taking its lending rates to 2.75 percent, its one-week deposit rate to 0.75 percent and its overnight deposit rate to 0.25 percent.
Oct. 30 and Oct. 9, Bahrain cut overnight secured rate and repurchase rate by a combined 175 basis points to 3.5 percent. It cut the one-week deposit rate by 50 basis points to 1.5 percent and the overnight deposit to 1 percent.
Oct. 30 - Central bank expanded acceptable collateral for overnight funds to include ijara sukuk, a type of Islamic bond.
Thursday, November 26, 2009
Dubai debt worries to hit stock markets
World stocks fell as news of Dubai asking for a creditor standstill at Dubai World and Vietnam's currency devaluation, increased investors' aversion to risk.
Dubai's financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts. Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year. Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5bn of its debts next month.
The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies. Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008. The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.
The announcement raised concern about the once-booming Gulf region's financial health and added to general nervousness in financial markets about the real state of the world economy at a time when investors are also seeking to lock in 2009 profits
Meanwhile, Vietnam's stock market tumbled after the nation's central bank devalued the currency by around 5% against the US dollar and raised interest rates by a percentage point to 8% from 1 December 2009..
Dubai's financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts. Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year. Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5bn of its debts next month.
The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies. Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008. The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.
The announcement raised concern about the once-booming Gulf region's financial health and added to general nervousness in financial markets about the real state of the world economy at a time when investors are also seeking to lock in 2009 profits
Meanwhile, Vietnam's stock market tumbled after the nation's central bank devalued the currency by around 5% against the US dollar and raised interest rates by a percentage point to 8% from 1 December 2009..
Friday, November 20, 2009
Gold surges to Rs 17,500 per 10 gm
20 Nov 2009, 1721 hrs IST, PTI
NEW DELHI: Continuing its record setting spree, gold today surged by Rs 100 and touched a new high of Rs 17,500 per 10 gram in the bullion market here on heavy buying by jewellery makers amid firming global trend.
Silver coins also rose to an all-time high of Rs 34,200 for buying and Rs 34,300 for selling of 100 pieces, recording a significant rise of Rs 200.
Analysts said that gold prices might touch Rs 18,000-level here once physical buying starts in the overseas market ahead of the Christmas season.
Gold, which moves in tandem with the international trend, got support from firming global cues rather than physical buying for the current marriage season, said Mahesh Verma of OM Sons jewellers.
The yellow metal in the overseas markets rose to 1,154 dollar an ounce.
Some of the investor funds were seen shifting from volatile equities to bullion, boosting gold prices.
The precious metal commenced its upward journey ever since the Reserve Bank of India bought 200 tons of gold from the International Monetary Fund, raising fears that some more central banks may follow suit.
The major transaction took place at a time when the market was passing through a hectic time of marriage season buying. Besides, a firming global trend due to dollar's weakeness overseas boosted demand for the metal as an alternate investment.
Gold, which had gained Rs 400 in last four sessions, rose further by Rs 100 to Rs 17,500 per 10 gram, a level never seen before.
Standard gold and ornaments shot up further by Rs 100 each to set a new peak of Rs 17,500 and Rs 17,350 per 10 gram respectively, while sovereign rose to a new peak of Rs 13,550 by gaining Rs 50 per piece of eight gram.
Silver ready rose by Rs 80 to Rs 28,680 per kg and weekly-based delivery by Rs 200 to Rs 28,400 per kg.
NEW DELHI: Continuing its record setting spree, gold today surged by Rs 100 and touched a new high of Rs 17,500 per 10 gram in the bullion market here on heavy buying by jewellery makers amid firming global trend.
Silver coins also rose to an all-time high of Rs 34,200 for buying and Rs 34,300 for selling of 100 pieces, recording a significant rise of Rs 200.
Analysts said that gold prices might touch Rs 18,000-level here once physical buying starts in the overseas market ahead of the Christmas season.
Gold, which moves in tandem with the international trend, got support from firming global cues rather than physical buying for the current marriage season, said Mahesh Verma of OM Sons jewellers.
The yellow metal in the overseas markets rose to 1,154 dollar an ounce.
Some of the investor funds were seen shifting from volatile equities to bullion, boosting gold prices.
The precious metal commenced its upward journey ever since the Reserve Bank of India bought 200 tons of gold from the International Monetary Fund, raising fears that some more central banks may follow suit.
The major transaction took place at a time when the market was passing through a hectic time of marriage season buying. Besides, a firming global trend due to dollar's weakeness overseas boosted demand for the metal as an alternate investment.
Gold, which had gained Rs 400 in last four sessions, rose further by Rs 100 to Rs 17,500 per 10 gram, a level never seen before.
Standard gold and ornaments shot up further by Rs 100 each to set a new peak of Rs 17,500 and Rs 17,350 per 10 gram respectively, while sovereign rose to a new peak of Rs 13,550 by gaining Rs 50 per piece of eight gram.
Silver ready rose by Rs 80 to Rs 28,680 per kg and weekly-based delivery by Rs 200 to Rs 28,400 per kg.
Tuesday, November 17, 2009
GAIL to benefit from Gas Highways Authority of India
GAIL Cmp Rs.383 Solid Long term Buy
PSU Stocks has been active in recent days after Government said it wants to raise money to bridge fiscal deficit.
India has just 10500km of pipelines and even a small neighboring country Pakistan has 56400km of pipeline which is nearly 6 times that of India’s (2007 stats). India needs a bigger pipeline Infrastructure and the government has already started action on this need- the government is likely to put in place an apex planning body for laying major gas pipeline projects - Gas Highways Authority of India (GHAI) on the lines of the National Highways Authority of India (NHAI) - by March 2010 and GAIL, being vastly experienced, will be one Company which can benefit from pipeline highway.
GAIL’s pipeline is around 7,000 km long now and would go up to 14,000 km by FY-2013, Transmission capacity would increase to 300 mmscmd from 150 mmscmd. GAIL current capacity utilisation to be 55-60% is expected higher with capacity utilisation at 70-75% by 2012-13. New tariff regime – likely to be announced by December2009, average blended tariff to increase by 5-10% say’s management in analyst meet.
Negative: Subsidy sharing for Oil losses has been drag on the stock, GAIL management reportedly asked the Petroleum Ministry to exempt it from sharing the subsidy burden as it did not benefit from any uptick in crude oil prices.
Many fears of rising Global asset bubble due to low interest rates in my view can come true, so my selection of stocks are mostly on strength of promoters and GAIL being a PSU can with stand a Double recession if it were to happen.
World Bank president: some risks to global growth in 2010, asset bubbles could undermine confidence in East Asia economies, there is some pressure on China to strengthen yuan
by A.K.PRABHAKAR
PSU Stocks has been active in recent days after Government said it wants to raise money to bridge fiscal deficit.
India has just 10500km of pipelines and even a small neighboring country Pakistan has 56400km of pipeline which is nearly 6 times that of India’s (2007 stats). India needs a bigger pipeline Infrastructure and the government has already started action on this need- the government is likely to put in place an apex planning body for laying major gas pipeline projects - Gas Highways Authority of India (GHAI) on the lines of the National Highways Authority of India (NHAI) - by March 2010 and GAIL, being vastly experienced, will be one Company which can benefit from pipeline highway.
GAIL’s pipeline is around 7,000 km long now and would go up to 14,000 km by FY-2013, Transmission capacity would increase to 300 mmscmd from 150 mmscmd. GAIL current capacity utilisation to be 55-60% is expected higher with capacity utilisation at 70-75% by 2012-13. New tariff regime – likely to be announced by December2009, average blended tariff to increase by 5-10% say’s management in analyst meet.
Negative: Subsidy sharing for Oil losses has been drag on the stock, GAIL management reportedly asked the Petroleum Ministry to exempt it from sharing the subsidy burden as it did not benefit from any uptick in crude oil prices.
Many fears of rising Global asset bubble due to low interest rates in my view can come true, so my selection of stocks are mostly on strength of promoters and GAIL being a PSU can with stand a Double recession if it were to happen.
World Bank president: some risks to global growth in 2010, asset bubbles could undermine confidence in East Asia economies, there is some pressure on China to strengthen yuan
by A.K.PRABHAKAR
Pakistan has more nuclear weapons than India: Report
17 Nov 2009, 2216 hrs IST, PTI
WASHINGTON: Pakistan is estimated to have more nuclear warheads than India and the two Asian neighbours along with China are increasing their arsenals and deploying weapons at more sites, two eminent American nuclear experts have said.
While Pakistan is estimated to possess 70-90 nuclear weapons, India is believed to have 60-80, claims Robert S Norris and Hans M Kristensen in their latest article 'Nuclear Notebook: Worldwide deployments of nuclear weapons, 2009'.
The article published in the latest issue of 'Bulletin of the Atomic Science' claimed that Beijing, Islamabad, and New Delhi are quantitatively and qualitatively increasing their arsenals and deploying weapons at more sites, yet the locations are difficult to pinpoint.
For example, no reliable public information exists on where Pakistan or India produces its nuclear weapons, it said.
"Whereas many of the Chinese bases are known, this is not the case in Pakistan and India, where we have found no credible information that identifies permanent nuclear weapons storage locations," they said.
"Pakistan's nuclear weapons are not believed to be fully operational under normal circumstances, India is thought to store its nuclear warheads and bombs in central storage locations rather than on bases with operational forces. But, since all three countries are expanding their arsenals, new bases and storage sites probably are under construction," the two nuclear experts said.
WASHINGTON: Pakistan is estimated to have more nuclear warheads than India and the two Asian neighbours along with China are increasing their arsenals and deploying weapons at more sites, two eminent American nuclear experts have said.
While Pakistan is estimated to possess 70-90 nuclear weapons, India is believed to have 60-80, claims Robert S Norris and Hans M Kristensen in their latest article 'Nuclear Notebook: Worldwide deployments of nuclear weapons, 2009'.
The article published in the latest issue of 'Bulletin of the Atomic Science' claimed that Beijing, Islamabad, and New Delhi are quantitatively and qualitatively increasing their arsenals and deploying weapons at more sites, yet the locations are difficult to pinpoint.
For example, no reliable public information exists on where Pakistan or India produces its nuclear weapons, it said.
"Whereas many of the Chinese bases are known, this is not the case in Pakistan and India, where we have found no credible information that identifies permanent nuclear weapons storage locations," they said.
"Pakistan's nuclear weapons are not believed to be fully operational under normal circumstances, India is thought to store its nuclear warheads and bombs in central storage locations rather than on bases with operational forces. But, since all three countries are expanding their arsenals, new bases and storage sites probably are under construction," the two nuclear experts said.
Thursday, November 5, 2009
Bank profits to be under pressure in next 6 months
6 Nov 2009, 0104 hrs IST, Karan Sehgal & Pallavi Mulay, ET Bureau
The profitability of Indian banks is expected to be under pressure over the next two quarters. The possibility of lower treasury gains and muted growth in net interest income (NII) is expected to curtail the growth of banking sector.
The top 10 Indian banks made more than Rs 6,000 crore collectively from treasury operations in the first half of FY10 (Apr-Mar) against only Rs 220 crore in the corresponding period of the previous fiscal. This was possible because bond yields were declining and bond prices were moving up. However, a further softening of yields is unlikely.
“RBI’s latest quarterly review of monetary policy indicates that we are at the bottom of a soft interest-rate regime. Thus, high treasury income earned in the first-half from government Securities’ (G-sec) portfolio may not recur in coming quarters,” said Ravi Mehta, research analyst, Indsec Securities & Finance. The central bank restored the statutory liquidity ratio (SLR) to 25% from 24%, in a bid to reduce the liquidity in the banking system and send out a signal that a further softening of rates is ruled out.
Interestingly, banks have piled up investments in G-secs. The aggregate G-sec investment of Indian banks increased by 42% as on October 2009 from the year-ago level. If interest rates were to rise, banks would have to incur mark-to-market losses. “Public sector banks have high exposure to low-yield high-duration G-secs. They are more exposed to market risk than their private sector counterparts,” said Vaibhav Agrawal, AV-P, banking, Angel Broking.
While treasury income is expected to decline, banks can derive solace from a likelihood of better growth in non-food credit growth in the second-half of the current fiscal. Non-food credit offtake of the banking sector grew by a mere 11% year-on-year in the first week of October, the lowest growth observed in almost a decade. However, experts feel that the worst is over.
“If the GDP is forecast to grow at 6-6.2% during FY10, a 15-16% growth in non-food credit cannot be ruled out,” says Indranil Pan, chief economist with Kotak Mahindra Bank. According to Mr Pan, since real activity is gaining momentum, metal and infrastructure companies will be major borrowers of bank funds.
Siddhartha Sanyal, chief economist of Edelweiss Securities, echoes similar views. Many factors influencing demand for and supply of credit have turned positive now, he maintains. The demand for funds is likely to go up as working capital investment increases on account of a pick-up in industrial production and rising commodity prices. However, there is a catch here too.
Banks had mobilised high-cost deposits in the second-half of the previous fiscal, leading to a contraction of their net interest margin (NIM), the difference between interest earned and paid. Bankers say going forward NIMs will improve on a retirement of high-cost funds and mobilisation of low-cost deposits. However, that improvement will only be on quarter-on-quarter basis.
On a y-o-y basis, spreads in December 2009 quarter will still be less than the corresponding period of the previous fiscal. Therefore, despite a pick- up in credit offtake, banks will find it difficult to grow NII as high-cost deposits will still have a lag effect. This will lead to muted NII growth, which, coupled with low treasury gains, hints that banks will see a dip in their net profit in the second half of the fiscal.
VIA:E.T
The profitability of Indian banks is expected to be under pressure over the next two quarters. The possibility of lower treasury gains and muted growth in net interest income (NII) is expected to curtail the growth of banking sector.
The top 10 Indian banks made more than Rs 6,000 crore collectively from treasury operations in the first half of FY10 (Apr-Mar) against only Rs 220 crore in the corresponding period of the previous fiscal. This was possible because bond yields were declining and bond prices were moving up. However, a further softening of yields is unlikely.
“RBI’s latest quarterly review of monetary policy indicates that we are at the bottom of a soft interest-rate regime. Thus, high treasury income earned in the first-half from government Securities’ (G-sec) portfolio may not recur in coming quarters,” said Ravi Mehta, research analyst, Indsec Securities & Finance. The central bank restored the statutory liquidity ratio (SLR) to 25% from 24%, in a bid to reduce the liquidity in the banking system and send out a signal that a further softening of rates is ruled out.
Interestingly, banks have piled up investments in G-secs. The aggregate G-sec investment of Indian banks increased by 42% as on October 2009 from the year-ago level. If interest rates were to rise, banks would have to incur mark-to-market losses. “Public sector banks have high exposure to low-yield high-duration G-secs. They are more exposed to market risk than their private sector counterparts,” said Vaibhav Agrawal, AV-P, banking, Angel Broking.
While treasury income is expected to decline, banks can derive solace from a likelihood of better growth in non-food credit growth in the second-half of the current fiscal. Non-food credit offtake of the banking sector grew by a mere 11% year-on-year in the first week of October, the lowest growth observed in almost a decade. However, experts feel that the worst is over.
“If the GDP is forecast to grow at 6-6.2% during FY10, a 15-16% growth in non-food credit cannot be ruled out,” says Indranil Pan, chief economist with Kotak Mahindra Bank. According to Mr Pan, since real activity is gaining momentum, metal and infrastructure companies will be major borrowers of bank funds.
Siddhartha Sanyal, chief economist of Edelweiss Securities, echoes similar views. Many factors influencing demand for and supply of credit have turned positive now, he maintains. The demand for funds is likely to go up as working capital investment increases on account of a pick-up in industrial production and rising commodity prices. However, there is a catch here too.
Banks had mobilised high-cost deposits in the second-half of the previous fiscal, leading to a contraction of their net interest margin (NIM), the difference between interest earned and paid. Bankers say going forward NIMs will improve on a retirement of high-cost funds and mobilisation of low-cost deposits. However, that improvement will only be on quarter-on-quarter basis.
On a y-o-y basis, spreads in December 2009 quarter will still be less than the corresponding period of the previous fiscal. Therefore, despite a pick- up in credit offtake, banks will find it difficult to grow NII as high-cost deposits will still have a lag effect. This will lead to muted NII growth, which, coupled with low treasury gains, hints that banks will see a dip in their net profit in the second half of the fiscal.
VIA:E.T
Sudha Murthy sells 20 L Infy shares for Rs 445 cr
6 Nov 2009, 0318 hrs IST, ET Bureau
BANGALORE: Sudha Murthy, the better half of the first couple of India’s IT industry, has made her second big venture capital investment. When husband N R Narayana Murthy was setting up Infosys in 1981 on a wing and a prayer, she gave him Rs 10,000 from her savings. Look what has happened to that money.
On Thursday, an Infosys announcement made clear that not much had changed between the couple in 28 years. This time, Mr Murthy’s big idea is called Catamaran — a venture capital fund — and his wife is helping him with a small matter of some Rs 430 crore.
The social worker and author sold 20 lakh Infosys shares owned by her, boosting the corpus of Catamaran to Rs 605 crore. Mr Murthy announced two weeks ago that he had sold eight lakh shares in the company he founded to establish a venture capital fund which will assist young entrepreneurs, mainly from India.
The couple don’t have any immediate plans to raise any more capital for Catamaran.
“Sudha Murthy selling shares is a good thing and it is nice to see somebody step away and help others become successful,” observed Sourabh Srivatsava, president of the India Venture Capital Association.
“We are beginning to see individuals and families getting active in this space,” he added, referring to similar ventures by the Future Group, Azim Premji’s PremjiInvest and the Religare Group.
Infosys’ shareholding pattern at the end of September showed Mr Murthy and his family owning a 4.97% stake in the company. His wife owned 1.62%, daughter Akshata 1.41% and son Rohan 1.39%.
Close observers of the venture capital industry believe that Mr Murthy will likely model Catamaran on the lines of Nadathur Holdings, a venture fund set up by former colleague and Infosys co-founder N S Raghavan. A family-administered fund, Nadathur Holdings was set up around nine years ago and backs scientific or business innovation driven startups.
Mr Murthy has said that his fund will help entrepreneurs across sectors such as healthcare, retail, technology with early stage investments. “I have always believed that entrepreneurship is an instrument of creating jobs and is the best way to solve poverty of a country like India.”
Catamaran is likely to be launched during the early part of 2010 and look at funding entrepreneurs as
well as making private equity investments in established businesses. Most of the investment activity is likely to centred around India but it may include some overseas ventures.
“We will not be in a hurry to finish the fund; there’s no limit for spending,” Mr Murthy said two weeks ago.
Infosys also told the stock exchanges on Thursday that its MD & CEO S Gopalakrishnan has acquired four lakh shares in the company through open market purchases, taking his total holding 66.56 lakh shares.
via:E.T
BANGALORE: Sudha Murthy, the better half of the first couple of India’s IT industry, has made her second big venture capital investment. When husband N R Narayana Murthy was setting up Infosys in 1981 on a wing and a prayer, she gave him Rs 10,000 from her savings. Look what has happened to that money.
On Thursday, an Infosys announcement made clear that not much had changed between the couple in 28 years. This time, Mr Murthy’s big idea is called Catamaran — a venture capital fund — and his wife is helping him with a small matter of some Rs 430 crore.
The social worker and author sold 20 lakh Infosys shares owned by her, boosting the corpus of Catamaran to Rs 605 crore. Mr Murthy announced two weeks ago that he had sold eight lakh shares in the company he founded to establish a venture capital fund which will assist young entrepreneurs, mainly from India.
The couple don’t have any immediate plans to raise any more capital for Catamaran.
“Sudha Murthy selling shares is a good thing and it is nice to see somebody step away and help others become successful,” observed Sourabh Srivatsava, president of the India Venture Capital Association.
“We are beginning to see individuals and families getting active in this space,” he added, referring to similar ventures by the Future Group, Azim Premji’s PremjiInvest and the Religare Group.
Infosys’ shareholding pattern at the end of September showed Mr Murthy and his family owning a 4.97% stake in the company. His wife owned 1.62%, daughter Akshata 1.41% and son Rohan 1.39%.
Close observers of the venture capital industry believe that Mr Murthy will likely model Catamaran on the lines of Nadathur Holdings, a venture fund set up by former colleague and Infosys co-founder N S Raghavan. A family-administered fund, Nadathur Holdings was set up around nine years ago and backs scientific or business innovation driven startups.
Mr Murthy has said that his fund will help entrepreneurs across sectors such as healthcare, retail, technology with early stage investments. “I have always believed that entrepreneurship is an instrument of creating jobs and is the best way to solve poverty of a country like India.”
Catamaran is likely to be launched during the early part of 2010 and look at funding entrepreneurs as
well as making private equity investments in established businesses. Most of the investment activity is likely to centred around India but it may include some overseas ventures.
“We will not be in a hurry to finish the fund; there’s no limit for spending,” Mr Murthy said two weeks ago.
Infosys also told the stock exchanges on Thursday that its MD & CEO S Gopalakrishnan has acquired four lakh shares in the company through open market purchases, taking his total holding 66.56 lakh shares.
via:E.T
Tuesday, November 3, 2009
RBI buys 200 mt gold from IMF to pump up reserves' value
4 Nov 2009, 0137 hrs IST, ET Bureau
MUMBAI: The purchase of 200 tonnes of gold from the International Monetary Fund (IMF) by the Reserve Bank of India will not just diversify the country’s foreign exchange reserves but also boost of the value of the reserves.
On Tuesday, RBI announced that it had concluded the purchase of 200 metric tonne of gold from the International Monetary Fund (IMF), under the Fund’s limited gold sales programme. The central bank said that it was an official sector off-market transaction and was executed over a two-week period during October 19-30, 2009 at market-based prices.
Gold prices have been moving up faster than the major global currencies — which is expected to boost the value of the country’s foreign exchange reserves.
This is the first time that the Reserve Bank has bought such a large amount of gold globally. Interestingly, the market import of gold has dipped sharply this year on account of high international prices and low demand. Years ago, confiscated smuggled gold used to be assigned to RBI vaults.
However, with the opening up of the economy, gold smuggling has virtually stopped. For many year’s the central bank gold holdings remained constant at about 11.5 million troy ounce accounting for 4% its reserves worth $285 billion now.
The recent purchase of close to 6.5 million troy ounce would raise the share of gold in India’s foreign exchange reserves to about 6%. The gold is valued at the month end closing price on the London bullion exchange.
With international gold prices touching a new high every day, this part of the reserves has seen a sharp appreciation. In the month of September, reserves rose $485 million only on account of the rise in valuation of gold in reserves.
In its official release, IMF has said that the total sales proceeds are equivalent to US$ 6.7 billion or SDR 4.2 billion. MD Dominique Strauss-Kahn indicated that the proceeds from the gold sale will help the Fund, step up much-needed concessional lending to the poorest countries.
As for the central bank, there is no official communication either being the intent of such a move or its plans for the purchased gold. But experts say the move could help the central bank diversify its reserves and would not have a significant impact on the overall foreign exchange reserves position, said a former top RBI official.
This is because these purchases are reckoned to be carried out from the $4.8 billion worth SDR allocation that the RBI had obtained from the Fund earlier this year. The IMF had allocated $4.8 billion by way of general allocation of special drawing rights (SDR) — the reserve currency with the IMF — in August this year as part of its SDR 161.2 billion package allocated to member countries.
The value of SDR is a weighted average of a basket of currencies which includes the US dollar, the Sterling pound, the yen and the euro. The weightage to each currency
which is revised at regular intervals depends on their prevailing relative importance in the global markets.
via:E.T
MUMBAI: The purchase of 200 tonnes of gold from the International Monetary Fund (IMF) by the Reserve Bank of India will not just diversify the country’s foreign exchange reserves but also boost of the value of the reserves.
On Tuesday, RBI announced that it had concluded the purchase of 200 metric tonne of gold from the International Monetary Fund (IMF), under the Fund’s limited gold sales programme. The central bank said that it was an official sector off-market transaction and was executed over a two-week period during October 19-30, 2009 at market-based prices.
Gold prices have been moving up faster than the major global currencies — which is expected to boost the value of the country’s foreign exchange reserves.
This is the first time that the Reserve Bank has bought such a large amount of gold globally. Interestingly, the market import of gold has dipped sharply this year on account of high international prices and low demand. Years ago, confiscated smuggled gold used to be assigned to RBI vaults.
However, with the opening up of the economy, gold smuggling has virtually stopped. For many year’s the central bank gold holdings remained constant at about 11.5 million troy ounce accounting for 4% its reserves worth $285 billion now.
The recent purchase of close to 6.5 million troy ounce would raise the share of gold in India’s foreign exchange reserves to about 6%. The gold is valued at the month end closing price on the London bullion exchange.
With international gold prices touching a new high every day, this part of the reserves has seen a sharp appreciation. In the month of September, reserves rose $485 million only on account of the rise in valuation of gold in reserves.
In its official release, IMF has said that the total sales proceeds are equivalent to US$ 6.7 billion or SDR 4.2 billion. MD Dominique Strauss-Kahn indicated that the proceeds from the gold sale will help the Fund, step up much-needed concessional lending to the poorest countries.
As for the central bank, there is no official communication either being the intent of such a move or its plans for the purchased gold. But experts say the move could help the central bank diversify its reserves and would not have a significant impact on the overall foreign exchange reserves position, said a former top RBI official.
This is because these purchases are reckoned to be carried out from the $4.8 billion worth SDR allocation that the RBI had obtained from the Fund earlier this year. The IMF had allocated $4.8 billion by way of general allocation of special drawing rights (SDR) — the reserve currency with the IMF — in August this year as part of its SDR 161.2 billion package allocated to member countries.
The value of SDR is a weighted average of a basket of currencies which includes the US dollar, the Sterling pound, the yen and the euro. The weightage to each currency
which is revised at regular intervals depends on their prevailing relative importance in the global markets.
via:E.T
Monday, November 2, 2009
SFIO set to probe into Sesa Goa
The government has ordered the SFIO to probe into mismanagement and financial irregularities in Vedanta Group-owned Sesa Goa and its subsidiary Sesa Industries (SIL), the company said on Thursday.
“The scope of (SFIO) investigation include looking into the state of affairs of the company and its subsidiary Sesa Industries Ltd, in respect of mismanagement, malpractices, financial and other irregularities,” Sesa Goa said in a filing to the Bombay Stock Exchange.
The Serious Fraud Investigation Office (SFIO) enquiry, to be completed in six months, follows a probe by Registrar of Companies which was looking into Sesa Goa’s case since 2003. “The company... has received request from the RoC for information for the period from 2001 to 2009,” the statement said, adding it also received an intimation for the SFIO probe from the ministry of corporate affairs on Wednesday.
Clarifying its position, Sesa Goa said, “the company believes that the investigation originates from the complaints filed by one of the shareholders of SIL against SIL, the company and the directors in 2003, prior to the acquisition of the company by Vedanta in April 2007.”
The company added it will fully cooperate with the investigation and expressed its commitment to follow the highest norms for corporate governance and transparency. Following the announcement, Sesa Goa shares fell as much as 6% in morning trade on the BSE. It was trading down 1.6% in the afternoon session.
Allegations against the company, official sources said, also include diversion of funds. The RoC had submitted its report on Sesa Goa early last week. On Wednesday, corporate affairs minister Salman Khurshid had termed the inspection as a “normal procedure” and said, “These (inspections) are procedures that have to be followed before taking a final decision.”
Another case pertaining to merger of Sesa Goa, the country’s leading iron ore producer, with its subsidiary Sesa Industries is pending before the Supreme Court. The London-based Vedanta Resources in 2007 had acquired a 51% controlling stake in Sesa Goa from Mitsui & Co, for $981 million. AGENCIES
“The scope of (SFIO) investigation include looking into the state of affairs of the company and its subsidiary Sesa Industries Ltd, in respect of mismanagement, malpractices, financial and other irregularities,” Sesa Goa said in a filing to the Bombay Stock Exchange.
The Serious Fraud Investigation Office (SFIO) enquiry, to be completed in six months, follows a probe by Registrar of Companies which was looking into Sesa Goa’s case since 2003. “The company... has received request from the RoC for information for the period from 2001 to 2009,” the statement said, adding it also received an intimation for the SFIO probe from the ministry of corporate affairs on Wednesday.
Clarifying its position, Sesa Goa said, “the company believes that the investigation originates from the complaints filed by one of the shareholders of SIL against SIL, the company and the directors in 2003, prior to the acquisition of the company by Vedanta in April 2007.”
The company added it will fully cooperate with the investigation and expressed its commitment to follow the highest norms for corporate governance and transparency. Following the announcement, Sesa Goa shares fell as much as 6% in morning trade on the BSE. It was trading down 1.6% in the afternoon session.
Allegations against the company, official sources said, also include diversion of funds. The RoC had submitted its report on Sesa Goa early last week. On Wednesday, corporate affairs minister Salman Khurshid had termed the inspection as a “normal procedure” and said, “These (inspections) are procedures that have to be followed before taking a final decision.”
Another case pertaining to merger of Sesa Goa, the country’s leading iron ore producer, with its subsidiary Sesa Industries is pending before the Supreme Court. The London-based Vedanta Resources in 2007 had acquired a 51% controlling stake in Sesa Goa from Mitsui & Co, for $981 million. AGENCIES
Sunday, October 25, 2009
DCM Shriram Consolidated Robust Q2 result
DCM Shriram Consolidated rose 2.24% to Rs 63.90 on BSE,on -Oct-09, after net profit surged 95.6% to Rs 13.93 crore in Q2 September 2009 over Q2 September 2008.
The stock hit a high of Rs 66 and a low of Rs 63.55 so far during the day. The stock had hit a 52-week high of Rs 71 on 13 August 2009 and a 52-week low of Rs 20.80 on 4 March 2009.
The company's equity capital is Rs 33.18 crore. Face value per share is Rs 2.
The current price of Rs 63.95 discounts the company's Q2 September 2009 annualized EPS of Rs 3.34, by a PE multiple of 19.15.
DCM Shriram Consolidated's total income declined 13.5% to Rs 839.07 crore in Q2 September 2009 over Q2 September 2008. The company announced the results after market hours on Thursday, 22 October 2009.
The company's net profit advanced on the back of 81.03% spurt in other income to Rs 8.40 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in manufacturing fertilisers, plastics, chemicals, agri inputs trading, sugar and cement.
The stock hit a high of Rs 66 and a low of Rs 63.55 so far during the day. The stock had hit a 52-week high of Rs 71 on 13 August 2009 and a 52-week low of Rs 20.80 on 4 March 2009.
The company's equity capital is Rs 33.18 crore. Face value per share is Rs 2.
The current price of Rs 63.95 discounts the company's Q2 September 2009 annualized EPS of Rs 3.34, by a PE multiple of 19.15.
DCM Shriram Consolidated's total income declined 13.5% to Rs 839.07 crore in Q2 September 2009 over Q2 September 2008. The company announced the results after market hours on Thursday, 22 October 2009.
The company's net profit advanced on the back of 81.03% spurt in other income to Rs 8.40 crore in Q2 September 2009 over Q2 September 2008.
The company is engaged in manufacturing fertilisers, plastics, chemicals, agri inputs trading, sugar and cement.
Ponni Sugars moves north after robust quarterly earnings
Ponni Sugars (Erode) jumped 7.49% to Rs 107.65 on BSE, after net profit galloped 235.48% to Rs 10.40 crore in Q2 September 2009 over Q2 September 2008.
The stock hit a high of Rs 108 so far during the day, which is 52-week high for the counter. The stock hit a low of Rs 101.15 so far during the day. The stock had hit a 52-week low of Rs 19.75 on 28 November 2008.
The company's equity capital is Rs 8.60 crore. Face value per share is Rs 10.
The current price of Rs 107.65 discounts the company's Q1 June 2009 annualized EPS of Rs 20.74, by a PE multiple of 5.19.
Ponni Sugars (Erode)'s total income surged 44.36% to Rs 48.52 crore in Q2 September 2009 over Q2 September 2008. The company declared its results during trading hours today, 23 October 2009.
The company manufactures cane sugar, cane molasses and bagasse. The company operates in a single segment of sugar and its by products.
The stock hit a high of Rs 108 so far during the day, which is 52-week high for the counter. The stock hit a low of Rs 101.15 so far during the day. The stock had hit a 52-week low of Rs 19.75 on 28 November 2008.
The company's equity capital is Rs 8.60 crore. Face value per share is Rs 10.
The current price of Rs 107.65 discounts the company's Q1 June 2009 annualized EPS of Rs 20.74, by a PE multiple of 5.19.
Ponni Sugars (Erode)'s total income surged 44.36% to Rs 48.52 crore in Q2 September 2009 over Q2 September 2008. The company declared its results during trading hours today, 23 October 2009.
The company manufactures cane sugar, cane molasses and bagasse. The company operates in a single segment of sugar and its by products.
NRB Bearings on a roll after solid Q2 results
NRB Bearings spurted 6% to Rs 61.45 at 15:12 IST after net profit surged 325.8% to Rs 3.79 crore on a 4.5% decline in sales to Rs 78.93 crore in Q2 September 2009 over Q2 September 2008.
The results were announced during trading hours today, 23 October 2009.
The small-cap ball bearing maker has an equity capital of Rs 9.69 crore. Face value per share is Rs 2.
The current price of Rs 61.45 discounts the company's Q1 June 2009 annualised EPS of Rs 3.89, by a PE multiple of 15.79.
NRB Bearings manufactures a wide range of needle rollers, needle bushes, needle cages, needle bearings and tapered roller bearings.
The results were announced during trading hours today, 23 October 2009.
The small-cap ball bearing maker has an equity capital of Rs 9.69 crore. Face value per share is Rs 2.
The current price of Rs 61.45 discounts the company's Q1 June 2009 annualised EPS of Rs 3.89, by a PE multiple of 15.79.
NRB Bearings manufactures a wide range of needle rollers, needle bushes, needle cages, needle bearings and tapered roller bearings.
3M India Ltd. (3MI) (CMP: Rs. 1735.5)
3M India Ltd. (3MI) (CMP: Rs. 1735.5)on 21-oct-09
(Long Term Buy - Accumulate in the Rs. 1600-1850 band)
3M India Ltd. (3MI), a 76% subsidiary of Minnesota Mining and Manufacturing Company (USA), is a diversified technology company. The company started its operations in India as ‘Birla 3M' in 1988. Later, in 2002, it was rechristened '3M India Ltd'.
We think that long-term investors could accumulate the stock in the price band of Rs. 1600-1850. While we have made an attempt to forecast the earnings for the company, a better than expected topline / bottomline achievement and / or greater visibility on earnings or corporate development could result in a rise in its share price. We feel that the stock has the potential to trade at atleast 2829xCY10E EPS, which gives a price target of Rs. 2094-2169 in the next two to three quarters.
HDsec
(Long Term Buy - Accumulate in the Rs. 1600-1850 band)
3M India Ltd. (3MI), a 76% subsidiary of Minnesota Mining and Manufacturing Company (USA), is a diversified technology company. The company started its operations in India as ‘Birla 3M' in 1988. Later, in 2002, it was rechristened '3M India Ltd'.
We think that long-term investors could accumulate the stock in the price band of Rs. 1600-1850. While we have made an attempt to forecast the earnings for the company, a better than expected topline / bottomline achievement and / or greater visibility on earnings or corporate development could result in a rise in its share price. We feel that the stock has the potential to trade at atleast 2829xCY10E EPS, which gives a price target of Rs. 2094-2169 in the next two to three quarters.
HDsec
Monthly inflation report:
Currently, inflation is reported every week based on the Wholesale Price Index (WPI). The base year (reference) of the current WPI numbers is 1993-94 .
The integrity of inflation data and its coverage has been in question since the last few quarters. The government has recently cleared a proposal to shift to a monthly WPI series with a much wider coverage than the current WPI index.
The base year of the new WPI index will be 2004-05 and it will cover over 1,200 commodities . It is expected to deliver inflation numbers closer to ground reality.
The integrity of inflation data and its coverage has been in question since the last few quarters. The government has recently cleared a proposal to shift to a monthly WPI series with a much wider coverage than the current WPI index.
The base year of the new WPI index will be 2004-05 and it will cover over 1,200 commodities . It is expected to deliver inflation numbers closer to ground reality.
Investors trust cos where promoters sell stakes
Investors in Indian equity markets have remained bullish on companies where promoters reduced their stake, a trend totally different from the global scenario.
Companies which witnessed sizable selling of promoters’ stake are Unitech, Sobha Developers, Housing Development & Infrastructure and Bombay Rayon Fashions. In Unitech, promoters’ holding came down to 44% in the quarter ending September 2009 from 67% at the end of December quarter 2008. Similarly, in Sobha Developers
, promoters’ holding fell to 65% from 87%. Housing Development & Infrastructure also saw its promoters’ holding coming down to 48% from 62% during the same period.
On the other hand, major buying by promoters took place in companies such as Pfizer, Indo Tech Transformers, Dish TV India and Sesa Goa. In Pfizer, promoters’ holding went up from 41% to 71% between quarter ending December 2008 and September 2009. Promoters of Indo Tech Transformers increased their holdings from 54% to 74%, whereas in Sesa Goa, it increased from 51% to 57% during the same period.
Companies which witnessed sizable selling of promoters’ stake are Unitech, Sobha Developers, Housing Development & Infrastructure and Bombay Rayon Fashions. In Unitech, promoters’ holding came down to 44% in the quarter ending September 2009 from 67% at the end of December quarter 2008. Similarly, in Sobha Developers
, promoters’ holding fell to 65% from 87%. Housing Development & Infrastructure also saw its promoters’ holding coming down to 48% from 62% during the same period.
On the other hand, major buying by promoters took place in companies such as Pfizer, Indo Tech Transformers, Dish TV India and Sesa Goa. In Pfizer, promoters’ holding went up from 41% to 71% between quarter ending December 2008 and September 2009. Promoters of Indo Tech Transformers increased their holdings from 54% to 74%, whereas in Sesa Goa, it increased from 51% to 57% during the same period.
Thursday, October 15, 2009
5 mid-cap stocks: middle path to prosperity-DEEWALI GIFT
16 Oct 2009, 0425 hrs IST
ET Bureau It’s that time of the year again when many investors rejig their portfolio and take position on their favourite stocks. With most of the blue chips having turned expensive, the only option for most investors is the mid-cap sector.
We at ET Intelligence Group bring you a list of 5 mid-cap stocks that could make your next Diwali brighter. But, as always, make sure you’ve done the due diligence before placing your bets on these.
Tata Teleservices (Maharashtra) Ltd (CMP=32.6)
TTML, which has recently joined hands with Japan’s NTT Docomo, is the Rs 2,000-crore Tata Group company that provides telecom services in the circles of Mumbai and Maharashtra, including Goa. TTML has reported net loss in each of the past six years. However, the picture is likely to change soon.
The company is aggressively adding new subscribers and has topped the 10-million mark, following its innovative pricing methods. Higher users would improve network efficiency, thereby reducing cost per user. The company has undertaken necessary capex in the last few years.
TTML has reduced the level of net loss in the last three quarters. It is likely to post quarterly profit by the March 2010 quarter.
Indian Hotels Company Ltd (CMP=80)
Indian Hotels (IHCL), which has underperformed the markets, is currently trading below its book value. This appears pretty cheap as it has always traded between 1.4 and 5 times the book value in the last five years. The last few bad quarters indicate that the scrip is trading 28 times its past 12 months earnings.
The hospitality industry is now going through a tough phase. However, being the industry leader, IHCL could well be the first one to move up once the tide turns. The Commonwealth Games being held in Delhi next year can be one major trigger for the industry, apart from the global economic revival.
Supreme Industries Ltd (CMP=362)
Supreme Industries, India’s leading plastic goods manufacturers, has always enjoyed a healthy history of profit growth, cashflows and dividends. Its decision to exit unprofitable businesses, coupled with rising domestic demand for plastics and a likely glut situation in polymers, are likely to keep its profit growth strong in the coming quarters.
At the same time, the company has constructed a commercial complex at Andheri with 2.5-lakh square feet of saleable area at a cost of Rs 115 crore. The sale proceeds from this property will boost the company’s bottomline for the next few quarters. The scrip at Rs 363 values the company just 8.6 times its earnings for trailing 12 months, much cheaper compared to its peers.
IndusInd Bank Ltd (CMP=124)
IndusInd Bank has made a huge turnaround in the past one year, reporting a dramatic improvement on key parameters such as non-performing assets (NPAs), net interest margin (NIM) and business per employee. Its gross NPAs or bad loans as a percentage to gross advances have halved in the quarter ended September 2009 against the year-ago period, with NIM rising to 2.86% from 1.68%.
The bank has cleaned up its balance sheet and has more than doubled its profit in the September quarter. The next growth driver will be expansion of its loan book beating the industry growth and continued improvement in its NIM, which can transform it into one of the fastest growing banks.
Dalmia Cement (Bharat) Ltd. (CMP=170)
Dalmia Cement (Bharat) (DCBL) is aggressively expanding its cement capacity and is shortly bringing on stream 38% additional cement capacity, taking its total capacity to 9 million tonnes. It is also well positioned in the booming sugar business with a combined capacity of 22,500 TCD (tonnes of cane per day) at three locations in UP. These two businesses should help the company grow its net sales aggressively in the next two years.
In the past four years, the company has quadrupled its revenues and is expected to maintain its growth trajectory in the next few years. Dalmia Cements recently announced plans to raise nearly Rs 3,000 crore to fund its expansion plans. The company plans to add a further 10 million tonnes capacity across the country in a phased manner over the next three years. At Rs 169.3, Dalmia Cement (Bharat) trades at a P/E of 8.2 and looks cheap.
Via:E.T
ET Bureau It’s that time of the year again when many investors rejig their portfolio and take position on their favourite stocks. With most of the blue chips having turned expensive, the only option for most investors is the mid-cap sector.
We at ET Intelligence Group bring you a list of 5 mid-cap stocks that could make your next Diwali brighter. But, as always, make sure you’ve done the due diligence before placing your bets on these.
Tata Teleservices (Maharashtra) Ltd (CMP=32.6)
TTML, which has recently joined hands with Japan’s NTT Docomo, is the Rs 2,000-crore Tata Group company that provides telecom services in the circles of Mumbai and Maharashtra, including Goa. TTML has reported net loss in each of the past six years. However, the picture is likely to change soon.
The company is aggressively adding new subscribers and has topped the 10-million mark, following its innovative pricing methods. Higher users would improve network efficiency, thereby reducing cost per user. The company has undertaken necessary capex in the last few years.
TTML has reduced the level of net loss in the last three quarters. It is likely to post quarterly profit by the March 2010 quarter.
Indian Hotels Company Ltd (CMP=80)
Indian Hotels (IHCL), which has underperformed the markets, is currently trading below its book value. This appears pretty cheap as it has always traded between 1.4 and 5 times the book value in the last five years. The last few bad quarters indicate that the scrip is trading 28 times its past 12 months earnings.
The hospitality industry is now going through a tough phase. However, being the industry leader, IHCL could well be the first one to move up once the tide turns. The Commonwealth Games being held in Delhi next year can be one major trigger for the industry, apart from the global economic revival.
Supreme Industries Ltd (CMP=362)
Supreme Industries, India’s leading plastic goods manufacturers, has always enjoyed a healthy history of profit growth, cashflows and dividends. Its decision to exit unprofitable businesses, coupled with rising domestic demand for plastics and a likely glut situation in polymers, are likely to keep its profit growth strong in the coming quarters.
At the same time, the company has constructed a commercial complex at Andheri with 2.5-lakh square feet of saleable area at a cost of Rs 115 crore. The sale proceeds from this property will boost the company’s bottomline for the next few quarters. The scrip at Rs 363 values the company just 8.6 times its earnings for trailing 12 months, much cheaper compared to its peers.
IndusInd Bank Ltd (CMP=124)
IndusInd Bank has made a huge turnaround in the past one year, reporting a dramatic improvement on key parameters such as non-performing assets (NPAs), net interest margin (NIM) and business per employee. Its gross NPAs or bad loans as a percentage to gross advances have halved in the quarter ended September 2009 against the year-ago period, with NIM rising to 2.86% from 1.68%.
The bank has cleaned up its balance sheet and has more than doubled its profit in the September quarter. The next growth driver will be expansion of its loan book beating the industry growth and continued improvement in its NIM, which can transform it into one of the fastest growing banks.
Dalmia Cement (Bharat) Ltd. (CMP=170)
Dalmia Cement (Bharat) (DCBL) is aggressively expanding its cement capacity and is shortly bringing on stream 38% additional cement capacity, taking its total capacity to 9 million tonnes. It is also well positioned in the booming sugar business with a combined capacity of 22,500 TCD (tonnes of cane per day) at three locations in UP. These two businesses should help the company grow its net sales aggressively in the next two years.
In the past four years, the company has quadrupled its revenues and is expected to maintain its growth trajectory in the next few years. Dalmia Cements recently announced plans to raise nearly Rs 3,000 crore to fund its expansion plans. The company plans to add a further 10 million tonnes capacity across the country in a phased manner over the next three years. At Rs 169.3, Dalmia Cement (Bharat) trades at a P/E of 8.2 and looks cheap.
Via:E.T
Tuesday, October 13, 2009
EID Parry scrip seen playing catch-up
14 Oct 2009, 0124 hrs IST, Shikha Sharma, ET Bureau
Eid Parry (India), part of the $3.14-bn Murugappa Group, saw its stock price move up close to 4% to end at Rs 318 on Monday after hitting an intra-day high of Rs 329.
Although the diversified company generates a significantly large chunk of consolidated revenues from its fertiliser subsidiary, Coromandel Fertiliser, the latest uptick on the scrip is attributed to the acquisition of 76% equity stake in privately-held Sadashiva Sugar (SSL) for a consideration of Rs 50 crore.
With the acquisition of Bangalore-based SSL, its sugar production capacity is expected to grow 15% to around 21,500 tonnes crushed per day (TCD). Assuming the current capacity utilisation at 75% with increased capacity and the ruling price of sugar at Rs 30/kg, EID Parry is likely to grow standalone revenues in the coming quarters. At the consolidated level, however, the business is dominated by its fertiliser subsidiary, which accounted for 92% of the company’s revenues and its entire profits in FY09.
Its standalone turnover for the year ended March 2009 stood at Rs 755 crore compared with Rs 616 crore last year. For the first quarter ended June 2009, it posted 0.8% growth in standalone revenues to Rs 205 crore and net profit was Rs 26 crore compared with Rs 3 crore during the same quarter last year, due to improved realisation in sugar prices. Sugar is the main business of the company besides co-generation power and distillery.
EID Parry’s operating margin for the June quarter ended 2009 at 29.71% is comparable to its peers in the sugar industry and has improved significantly compared with 11.78% in the corresponding quarter last year. As the industry estimates supply deficit of close to 5 million tonnes of sugar during the sugar season 2009-10, prices may continue to see an upward trend. But availability of sugarcane poses challenge for sugar producers.
Despite the recent run-up in its stock price, the company looks cheaper than its peers. At its current stock price of Rs 318, the stock is trading at a trailing price-earning multiple of close 20x (on a standalone basis) and looks pricey, considering that sugar companies are currently trading at a P/E of around 10x.
However, the market value of EID Parry investment is equivalent to around 70% of its total market capitalisation, which means that either its sugar division is not getting fair valuation, or its investments in fertilisers are being undervalued by the market.
In the current rally, the EID Parry scrip has underperformed its peers. The stock has risen 115% between April 1 and September 30 against 147% rise in the ET Sugar index during the period. So the current move could be seen as the stock playing catch-up.
via:E.T
Eid Parry (India), part of the $3.14-bn Murugappa Group, saw its stock price move up close to 4% to end at Rs 318 on Monday after hitting an intra-day high of Rs 329.
Although the diversified company generates a significantly large chunk of consolidated revenues from its fertiliser subsidiary, Coromandel Fertiliser, the latest uptick on the scrip is attributed to the acquisition of 76% equity stake in privately-held Sadashiva Sugar (SSL) for a consideration of Rs 50 crore.
With the acquisition of Bangalore-based SSL, its sugar production capacity is expected to grow 15% to around 21,500 tonnes crushed per day (TCD). Assuming the current capacity utilisation at 75% with increased capacity and the ruling price of sugar at Rs 30/kg, EID Parry is likely to grow standalone revenues in the coming quarters. At the consolidated level, however, the business is dominated by its fertiliser subsidiary, which accounted for 92% of the company’s revenues and its entire profits in FY09.
Its standalone turnover for the year ended March 2009 stood at Rs 755 crore compared with Rs 616 crore last year. For the first quarter ended June 2009, it posted 0.8% growth in standalone revenues to Rs 205 crore and net profit was Rs 26 crore compared with Rs 3 crore during the same quarter last year, due to improved realisation in sugar prices. Sugar is the main business of the company besides co-generation power and distillery.
EID Parry’s operating margin for the June quarter ended 2009 at 29.71% is comparable to its peers in the sugar industry and has improved significantly compared with 11.78% in the corresponding quarter last year. As the industry estimates supply deficit of close to 5 million tonnes of sugar during the sugar season 2009-10, prices may continue to see an upward trend. But availability of sugarcane poses challenge for sugar producers.
Despite the recent run-up in its stock price, the company looks cheaper than its peers. At its current stock price of Rs 318, the stock is trading at a trailing price-earning multiple of close 20x (on a standalone basis) and looks pricey, considering that sugar companies are currently trading at a P/E of around 10x.
However, the market value of EID Parry investment is equivalent to around 70% of its total market capitalisation, which means that either its sugar division is not getting fair valuation, or its investments in fertilisers are being undervalued by the market.
In the current rally, the EID Parry scrip has underperformed its peers. The stock has risen 115% between April 1 and September 30 against 147% rise in the ET Sugar index during the period. So the current move could be seen as the stock playing catch-up.
via:E.T
Sunday, October 11, 2009
KG basin gas row
KG basin gas row
What is the Krishna-Godavari (KG) basin?
As the name implies, this refers to the area broadly enclosed by the deltaic basins of the two major rivers in Andhra Pradesh Krishna and Godavari. It includes part of the Bay of Bengal into which these rivers drain.
The area has been identified as one of India's biggest oil and gas fields, several times the size of Bombay High.
Onland, the KG basin has an area of about 28,000 sq km, while the offshore area is estimated at 21,000 sq km till a depth of 200m and another 18,000 sq km between 200m and 3000m.
KG basin controversies
How is Reliance Industries involved in the KG basin?
Under the government's New Exploration and Licensing Policy (NELP), various blocks in identified oil and gas fields were offered to private operators on lease for exploration and production. RIL won the bids for 12 such blocks in the KG basin in 2000.
Under the NELP, private operators sign a production sharing contract (PSC) with the government, which sets out the terms and conditions under which they operate their lease, including the share of revenues that would accrue to the government.
The PSC for block D6, which is at the heart of the current controversy, was signed between RIL, the government and Niko, which is partnering RIL, in April 2000.
Ambani group broke up in 2005
How is the Anil Ambani group involved?
When the Reliance group was still a unified entity with both brothers sharing management responsibilities, RIL had announced in 2003 that group company Reliance Energy Ltd (REL) would be setting up a gas-based power plant at Dadri in western Uttar Pradesh for which gas would supplied from RIL's KG basin production.
In 2005, however, the group broke up with each brother acquiring control of different business areas. While the oil and gas business went to elder brother Mukesh, Anil had control of the power business.
As part of the division of the group, RIL was demerged and Reliance Natural Resources LTD (RNRL) was formed to act as a conduit for the gas from the KG basin to REL.
All RIL shareholders were made RNRL shareholders, except that Mukesh's holding in the parent company was substituted by Anil in the new firm. Thus, RNRL was part of the Anil Dhirubhai Ambani group (ADAG).
MoU singed between RNRL-RIL in 2005
What is the MoU often referred to?
In 2005, RNRL and RIL signed a memorandum of understanding (MoU) on the terms under which gas would be supplied for the Dadri project . This MoU specified that the price at which the gas would be supplied would be the same as the price at which RIL would supply gas to an NTPC project. NTPC had invited global bids for supply of gas in 2003 and RIL finally won the bid and was issued a letter of intent by NTPC in June 2004.
The price quoted by RIL in its bid was $2.34 per mmbtu (million metric British thermal units). So what’s the dispute about? RIL argues that the $2.34 per unit price is not applicable to its deal with RNRL for various reasons. First, gas prices had since the 2005 MOU risen sharply.
Second, it has not concluded a deal with NTPC on that price, since it had some issues pertaining to damages it would have to pay in case of failure to supply the agreed quantity of gas. Hence, it says, there is no NTPC price to be followed as per the MOU with RNRL. Third, it says under the PSC signed with the government, the government has the final say on the price at which it can sell gas to third parties and in fact can even dictate to whom the gas should be sold.
RNRL contests each of these claims. It argues that international gas prices have historically been much higher than Indian prices and so that can't be a benchmark . Further, the bid price for the NTPC project must be followed under the MOU irrespective of whether or not RIL and NTPC have finalized their deal. Finally, it maintains that the government only has the right under the PSC to fix the price at which gas will be valued for the purpose of determining the government's share of revenues from the project. RIL, it insists , is free to sell its share of the gas at whatever price it decides.
RNRL-RIL gas row
Where did the price of $4.2 per unit come from?
In May 2007, RIL invited bids from various gas users like power and fertilizer companies and on that basis arrived at a price of $4.2 per, which was then approved by the petroleum ministry as a market-determined price.
RNRL alleges that this was an eyewash and an orchestrated auction between small time users and that the ministry has been partisan towards RIL in the whole issue.
Governments involvement in RIL-RNRL gas row!
How did the government get involved?
When, after sustained pressure from RNRL, RIL sought approval of the government for the price of $2.34 per unit, the government refused. It said the price was not marketdetermined and in any case gas was a national asset and its allocation could not be decided by some private agreement between two brothers.
ADAG points out that the ministry's stance in the matter which suits RIL's current position — has been a feature since Murli Deora became the petroleum minister in 2006.
How are courts involved? Following RIL's refusal to supply gas at the terms specified in the MOU with RNRL, the Anil group company went to the Bombay HC seeking an order to RIL to follow the terms of the MOU.
The Bombay HC finally in June this year passed an order that RIL must renegotiate a deal with RNRL that would make suitable arrangements for supply of gas. It also added that the basis for such an arrangement must be the scheme of demerger agreed between the brothers in 2005.
RNRL has now gone to the Supreme Court seeking a direction from the apex court that the HC order on renegotiation should be set aside and RIL should be asked to supply gas under the terms of the MoU.
via: E.T
What is the Krishna-Godavari (KG) basin?
As the name implies, this refers to the area broadly enclosed by the deltaic basins of the two major rivers in Andhra Pradesh Krishna and Godavari. It includes part of the Bay of Bengal into which these rivers drain.
The area has been identified as one of India's biggest oil and gas fields, several times the size of Bombay High.
Onland, the KG basin has an area of about 28,000 sq km, while the offshore area is estimated at 21,000 sq km till a depth of 200m and another 18,000 sq km between 200m and 3000m.
KG basin controversies
How is Reliance Industries involved in the KG basin?
Under the government's New Exploration and Licensing Policy (NELP), various blocks in identified oil and gas fields were offered to private operators on lease for exploration and production. RIL won the bids for 12 such blocks in the KG basin in 2000.
Under the NELP, private operators sign a production sharing contract (PSC) with the government, which sets out the terms and conditions under which they operate their lease, including the share of revenues that would accrue to the government.
The PSC for block D6, which is at the heart of the current controversy, was signed between RIL, the government and Niko, which is partnering RIL, in April 2000.
Ambani group broke up in 2005
How is the Anil Ambani group involved?
When the Reliance group was still a unified entity with both brothers sharing management responsibilities, RIL had announced in 2003 that group company Reliance Energy Ltd (REL) would be setting up a gas-based power plant at Dadri in western Uttar Pradesh for which gas would supplied from RIL's KG basin production.
In 2005, however, the group broke up with each brother acquiring control of different business areas. While the oil and gas business went to elder brother Mukesh, Anil had control of the power business.
As part of the division of the group, RIL was demerged and Reliance Natural Resources LTD (RNRL) was formed to act as a conduit for the gas from the KG basin to REL.
All RIL shareholders were made RNRL shareholders, except that Mukesh's holding in the parent company was substituted by Anil in the new firm. Thus, RNRL was part of the Anil Dhirubhai Ambani group (ADAG).
MoU singed between RNRL-RIL in 2005
What is the MoU often referred to?
In 2005, RNRL and RIL signed a memorandum of understanding (MoU) on the terms under which gas would be supplied for the Dadri project . This MoU specified that the price at which the gas would be supplied would be the same as the price at which RIL would supply gas to an NTPC project. NTPC had invited global bids for supply of gas in 2003 and RIL finally won the bid and was issued a letter of intent by NTPC in June 2004.
The price quoted by RIL in its bid was $2.34 per mmbtu (million metric British thermal units). So what’s the dispute about? RIL argues that the $2.34 per unit price is not applicable to its deal with RNRL for various reasons. First, gas prices had since the 2005 MOU risen sharply.
Second, it has not concluded a deal with NTPC on that price, since it had some issues pertaining to damages it would have to pay in case of failure to supply the agreed quantity of gas. Hence, it says, there is no NTPC price to be followed as per the MOU with RNRL. Third, it says under the PSC signed with the government, the government has the final say on the price at which it can sell gas to third parties and in fact can even dictate to whom the gas should be sold.
RNRL contests each of these claims. It argues that international gas prices have historically been much higher than Indian prices and so that can't be a benchmark . Further, the bid price for the NTPC project must be followed under the MOU irrespective of whether or not RIL and NTPC have finalized their deal. Finally, it maintains that the government only has the right under the PSC to fix the price at which gas will be valued for the purpose of determining the government's share of revenues from the project. RIL, it insists , is free to sell its share of the gas at whatever price it decides.
RNRL-RIL gas row
Where did the price of $4.2 per unit come from?
In May 2007, RIL invited bids from various gas users like power and fertilizer companies and on that basis arrived at a price of $4.2 per, which was then approved by the petroleum ministry as a market-determined price.
RNRL alleges that this was an eyewash and an orchestrated auction between small time users and that the ministry has been partisan towards RIL in the whole issue.
Governments involvement in RIL-RNRL gas row!
How did the government get involved?
When, after sustained pressure from RNRL, RIL sought approval of the government for the price of $2.34 per unit, the government refused. It said the price was not marketdetermined and in any case gas was a national asset and its allocation could not be decided by some private agreement between two brothers.
ADAG points out that the ministry's stance in the matter which suits RIL's current position — has been a feature since Murli Deora became the petroleum minister in 2006.
How are courts involved? Following RIL's refusal to supply gas at the terms specified in the MOU with RNRL, the Anil group company went to the Bombay HC seeking an order to RIL to follow the terms of the MOU.
The Bombay HC finally in June this year passed an order that RIL must renegotiate a deal with RNRL that would make suitable arrangements for supply of gas. It also added that the basis for such an arrangement must be the scheme of demerger agreed between the brothers in 2005.
RNRL has now gone to the Supreme Court seeking a direction from the apex court that the HC order on renegotiation should be set aside and RIL should be asked to supply gas under the terms of the MoU.
via: E.T
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