18 Dec 2008, 1811 hrs
A lower than expected inflation rate came as a shot in arm for Indian equities which had run out of gas after a recent pull-back rally.
Led by gains in interest rate sensitive sectors like realty and banking stocks, the benchmark indices closed sharply higher Thursday.
After 24 trading sessions, the 30-share Sensex managed to close above the 10,000 mark. The BSE benchmark surged 361.14 points or 3.72 per cent to end at 10,076.43. The index touched an intra-day high of 10,110.34 and a low of 9633.04.
National Stock Exchange’s Nifty closed the day at 3059.50, up 3.56 per cent or 105.15 points. The 50-share index hit an intra-day high of 3072.55 and a low of 2922.65.
Markets opened flat tracking subdued global markets and due to lack of any fresh trigger to push the markets either ways, except for the inflation data for the week ended Dec 6 which was seen around 7.49 per cent against 8 per cent earlier.
Thus, the figure of 6.84 per cent brought much cheer to the market. The sharp fall in inflation was mainly on account of decline in international oil&gas prices, and analysts are of the opinion expect another steep decline in coming weeks due to falling commodities prices and fiscal measures kick in.
“While inflation is lower, the positive effect from it will take some time to show on the economy. The pull-back in the market was sentimental. But the key takeway was volume (both cash and F&O) which was above average and that’s a good sign. Trend looks positive for the moment. We are likely to touch higher levels with intermittent bouts of profit taking,” said Sharmila Joshi, vice president institutional sales, Sytematix Shares & Stocks.
Following the sharp decline in inflation, marketmen are positive the RBI may cut interest rates by next month, by as much as 100 basis points. This led to surge in realty and banking stocks. Among sectoral indices, realty spearheaded the rally with the BSE Realty Index up 7.27 per cent, followed by BSE Bankex up 7.06 per cent and BSE Power Index up 5.81 per cent.
Shares of oil drilling companies were under pressure after OPEC’s decision to cut oil output by 2.2 million barrels per day failed to lift oil prices. US crude hovered near $40 per barrel Thursday after hitting a low of $39.19, its lowest price since July 2004. However, the BSE Oil & Gas Index ended 1.89 per cent higher as oil marketing companies gained from this.
Biggest Sensex gainers were DLF (9.56%), Jaiprakash Associates (9.36%), Reliance Infrastructure (9.32%), ICICI Bank (9.16%), and State Bank of India (7.88%), while Grasim (-0.33%) and Sterlite (-0.11%) were the only laggards.
However, broader market indices were a bit slow on the rise. The BSE Midcap Index closed 2.18 percent higher, while the BSE Smallcap Index rose only 0.91 percent over its previous close. But there was stock specific action.
McNally Bharat Engineering ended up 11.58 per cent to Rs 40.95 on BSE on receiving two orders from Vedanta Group worth Rs 244 crore. Patel Engineering closed 9.70 per cent higher at Rs 179.20 after its consortium bagged an irrigation project worth Rs 3,859 crore form Andhra Pradesh government.
Tata Power shares ended up 3.41 per cent at Rs 726.90 on the company entering into a joint venture with Indian Oil Corporation for a coal-based power plant in Orissa to meet the captive requirement of IOC. The JV will start operating only after IOC board approves the investment in the refinery cum petrochemical project at Paradip. Tata Power will hold 74 per cent stake and the rest will be held by IOC.
Market breadth on BSE showed 1,490 advances against 966 declines.
Meanwhile, European markets were mixed and US markets were seen opening higher going by the stock futures. Dow Jones stock futures were up 0.50 per cent and S&P 500 up by similar 0.49 per cent.
Thursday, December 18, 2008
Wednesday, December 17, 2008
Satyam Computer Services hammered
Satyam Computer Services slumped 30% to Rs 156 after its American depository receipt plunged overnight as investors reacted negatively to its plan to buy two related companies.
In a dramatic turn of events, Satyam called off the deal which it had announced after trading hours in India on Tuesday, 16 December 2008. Satyam announced the decision to call off the deal before trading hours in India today, 17 December 2008.
Meanwhile, the BSE Sensex was down 115.55 points, or 1.16%, to 9861.73.
On BSE, 1 crore shares were traded in the counter. The scrip had an average daily volume of 9.15 lakh shares in the past one quarter.
The stock hit an intraday low Rs 156.85, also its 52-week low. It hit an intraday high of Rs 200 so far during the day. The stock had a 52-week high of Rs 544 on 30 May 2008.
The stock had underperformed the market over the past one month till 16 December 2008, declining 13.43% as compared to the Sensex's 6.30% rise. It had also underperformed the market in the past one quarter, falling 36.44% as compared to the Sensex's fall of 26.20%.
India's fourth largest software exporter by sales has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.
The current price of Rs 169 discounts its Q2 September 2008 annualised EPS of Rs 35.48, by a PE multiple of 4.76.
Satyam Computer Services scrapped a $1.6 billion acquisition of companies connected to its chairman after the plan angered investors and drove down the software firm's American depository receipt a record 55%. The American depository receipt or ADR of Satyam Computer Services, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from Monday's (15 December 2008) close of $12.30.
Satyam had announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and Chairman B. Ramalinga Raju and other insiders hold 36% in Maytas Infra and 35% in Maytas Properties.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.
As per reports, the acquisitions made little sense at a time when technology outsourcing companies are preserving cash to cope with slowing outsourcing business.
Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development.
Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services.
Satyam Computer Services' net profit rose 3.73% to Rs 597.43 crore on 6.87% increase in net sales to Rs 2700.52 crore in Q2 September 2008 over Q1 June 2008.
Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.
In a dramatic turn of events, Satyam called off the deal which it had announced after trading hours in India on Tuesday, 16 December 2008. Satyam announced the decision to call off the deal before trading hours in India today, 17 December 2008.
Meanwhile, the BSE Sensex was down 115.55 points, or 1.16%, to 9861.73.
On BSE, 1 crore shares were traded in the counter. The scrip had an average daily volume of 9.15 lakh shares in the past one quarter.
The stock hit an intraday low Rs 156.85, also its 52-week low. It hit an intraday high of Rs 200 so far during the day. The stock had a 52-week high of Rs 544 on 30 May 2008.
The stock had underperformed the market over the past one month till 16 December 2008, declining 13.43% as compared to the Sensex's 6.30% rise. It had also underperformed the market in the past one quarter, falling 36.44% as compared to the Sensex's fall of 26.20%.
India's fourth largest software exporter by sales has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.
The current price of Rs 169 discounts its Q2 September 2008 annualised EPS of Rs 35.48, by a PE multiple of 4.76.
Satyam Computer Services scrapped a $1.6 billion acquisition of companies connected to its chairman after the plan angered investors and drove down the software firm's American depository receipt a record 55%. The American depository receipt or ADR of Satyam Computer Services, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from Monday's (15 December 2008) close of $12.30.
Satyam had announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and Chairman B. Ramalinga Raju and other insiders hold 36% in Maytas Infra and 35% in Maytas Properties.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.
As per reports, the acquisitions made little sense at a time when technology outsourcing companies are preserving cash to cope with slowing outsourcing business.
Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development.
Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services.
Satyam Computer Services' net profit rose 3.73% to Rs 597.43 crore on 6.87% increase in net sales to Rs 2700.52 crore in Q2 September 2008 over Q1 June 2008.
Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.
Reliance Infrastructure, RNRL extend fall on reports the Enforcement Directorate (ED) Investigation
Reliance Infrastructure and Reliance Natural Resources fell by 5.66% to 7.31% at 11:21 IST on BSE on reports the government is seeking details of an alleged misuse of accounts of these two Anil Dhirubhai Ambani Group firms by UBS employees.
Shares of Reliance Infrastructure, erstwhile Reliance Energy, plunged 7.31% to Rs 591. Reliance Natural Resources (RNRL) dropped 5.66% at Rs 54.25. Reliance Infrastructure had lost 2.53% at Rs 636.55 and RNRL had declined 2.21% at Rs 57.45 on Tuesday, 16 December 2008, when the reports about the fraud hit the market before trading hours.
The Enforcement Directorate (ED), which is investigating possible violations of the Foreign Exchange Management Act (Fema) by some former UBS employees, has written to the UK’s Financial Services Authority, seeking details of the alleged misuse of accounts of the two Anil Dhirubhai Ambani Group (ADAG) firms Reliance Energy and RNRL.
The agency is probing if the executives, who have been sacked by the Swiss bank, had illegally obtained overdrafts against cash collateral security held in the account and transferred them into the accounts of a few diamond merchants based in India and Belgium.
The funds were then allegedly pumped into the stock market through a fund manager – Pluri Emerging Companies PCC Cell E Emerging Markets Growth Fund — using the participatory note route. Funds are also suspected to have been transferred to Brockway Inc.
The Indian agency is also probing if there was any link between the two ADAG companies, Pluri, Brockway and the diamond merchants. Reliance Energy and RNRL, which had raised funds through foreign currency convertible bonds (FCCBs) and external commercial borrowings (ECBs), had kept the funds in accounts maintained with UBS, London, reports suggest
Shares of Reliance Infrastructure, erstwhile Reliance Energy, plunged 7.31% to Rs 591. Reliance Natural Resources (RNRL) dropped 5.66% at Rs 54.25. Reliance Infrastructure had lost 2.53% at Rs 636.55 and RNRL had declined 2.21% at Rs 57.45 on Tuesday, 16 December 2008, when the reports about the fraud hit the market before trading hours.
The Enforcement Directorate (ED), which is investigating possible violations of the Foreign Exchange Management Act (Fema) by some former UBS employees, has written to the UK’s Financial Services Authority, seeking details of the alleged misuse of accounts of the two Anil Dhirubhai Ambani Group (ADAG) firms Reliance Energy and RNRL.
The agency is probing if the executives, who have been sacked by the Swiss bank, had illegally obtained overdrafts against cash collateral security held in the account and transferred them into the accounts of a few diamond merchants based in India and Belgium.
The funds were then allegedly pumped into the stock market through a fund manager – Pluri Emerging Companies PCC Cell E Emerging Markets Growth Fund — using the participatory note route. Funds are also suspected to have been transferred to Brockway Inc.
The Indian agency is also probing if there was any link between the two ADAG companies, Pluri, Brockway and the diamond merchants. Reliance Energy and RNRL, which had raised funds through foreign currency convertible bonds (FCCBs) and external commercial borrowings (ECBs), had kept the funds in accounts maintained with UBS, London, reports suggest
Kesoram Industries skids on production cut
Kesoram Industries declined 1.65% to Rs 155.05 at 12:58 IST on BSE, on shutting its tyre manufacturing unit in Orissa for 14 days to avoid inventory pile up and debtors due to the shutdown of operations by auto majors. .
The stock hit a high of Rs 163 and a low of Rs 153.50 so far during the day. The stock hit a 52-week high of Rs 640 on 17 December 2007 and a 52-week low of Rs 115.50 on 27 October 2008.
The company's current equity is Rs 45.74 crore. Face value per share is Rs 10.
The current price of Rs 155.05 discounts the company's Q2 September 2008 annualized EPS of Rs 54.62, by a PE multiple of 2.84.
Kesoram Industries has decided to shut down its tyre manufacturing unit at Balasore, Orissa, which supplies to original equipment manufacturers (OEM). The unit will be closed from 17 December 2008 to 31 December 2008. The company may announce further cuts in production if market conditions do not improve, it said in a statement.
Kesoram Industries' net profit fell 30.2% to Rs 62.46 crore on 37.3% increase in net sales to Rs 920.22 crore in Q2 September 2008 over Q2 September 2007.
The company manufactures tyres, tubes, flaps, cement, viscose filament, rayon yarn, cellophane paper, sulphuric acid, caustic soda lye and hydrochloric acid. It operates mainly in four segments namely cements, tyres, rayon, transparent paper & chemicals and others.
The stock hit a high of Rs 163 and a low of Rs 153.50 so far during the day. The stock hit a 52-week high of Rs 640 on 17 December 2007 and a 52-week low of Rs 115.50 on 27 October 2008.
The company's current equity is Rs 45.74 crore. Face value per share is Rs 10.
The current price of Rs 155.05 discounts the company's Q2 September 2008 annualized EPS of Rs 54.62, by a PE multiple of 2.84.
Kesoram Industries has decided to shut down its tyre manufacturing unit at Balasore, Orissa, which supplies to original equipment manufacturers (OEM). The unit will be closed from 17 December 2008 to 31 December 2008. The company may announce further cuts in production if market conditions do not improve, it said in a statement.
Kesoram Industries' net profit fell 30.2% to Rs 62.46 crore on 37.3% increase in net sales to Rs 920.22 crore in Q2 September 2008 over Q2 September 2007.
The company manufactures tyres, tubes, flaps, cement, viscose filament, rayon yarn, cellophane paper, sulphuric acid, caustic soda lye and hydrochloric acid. It operates mainly in four segments namely cements, tyres, rayon, transparent paper & chemicals and others.
Nitin Fire Protection vaults 90% in seven trading sessions
Nitin Fire Protection Industries rose 4.67% to Rs 245.55 on BSE, extending gains for the seventh day in a row, on bagging orders worth Rs 90 lakh.
The stock hit a high of Rs 255.95 and a low of Rs 225.15 so far during the day. The stock hit a 52-week high of Rs 666.90 on 4 January 2008 and a 52-week low of Rs 121.10 on 27 October 2008.
The stock is up 90.64% from a recent low of Rs 128.80 on 5 December 2008.
The company's current equity is Rs 12.60 crore. Face value per share is Rs 10.
The current price of Rs 245.55 discounts the company's Q2 September 2008 annualized EPS of Rs 18.48, by a PE multiple of 13.29.
Nitin M Shah, a promoter, had raised his stake in the company to 19.47% after acquiring 20,000 shares on 10 December 2008 through open market purchases.
Nitin Fire Protection Industries' 100% subsidiary Logicon Building Systems has bagged orders worth Rs 90 lakh for supply of fire alarm and fire fighting systems. The company has also secured an order from Mellon Bank, Pune for a complete fire protection system.
Logicon Building Systems had on 12 December 2008 bagged an order worth Rs 2.30 crore for setting fire alarm and fire fighting systems at the Marriot Courtyard hotel in Andheri in Mumbai.
Nitin Fire Protection Industries' net profit surged 98.6% to Rs 5.82 crore on 157.3% increase in net sales to Rs 31.65 crore in Q2 September 2008 over Q2 September 2007.
Mumbai-based Nitin Fire Protection Industries is a leading end-to-end solution provider for fire protection, safety and security with capabilities in manufacturing, designing, engineering, commissioning and maintenance.
The stock hit a high of Rs 255.95 and a low of Rs 225.15 so far during the day. The stock hit a 52-week high of Rs 666.90 on 4 January 2008 and a 52-week low of Rs 121.10 on 27 October 2008.
The stock is up 90.64% from a recent low of Rs 128.80 on 5 December 2008.
The company's current equity is Rs 12.60 crore. Face value per share is Rs 10.
The current price of Rs 245.55 discounts the company's Q2 September 2008 annualized EPS of Rs 18.48, by a PE multiple of 13.29.
Nitin M Shah, a promoter, had raised his stake in the company to 19.47% after acquiring 20,000 shares on 10 December 2008 through open market purchases.
Nitin Fire Protection Industries' 100% subsidiary Logicon Building Systems has bagged orders worth Rs 90 lakh for supply of fire alarm and fire fighting systems. The company has also secured an order from Mellon Bank, Pune for a complete fire protection system.
Logicon Building Systems had on 12 December 2008 bagged an order worth Rs 2.30 crore for setting fire alarm and fire fighting systems at the Marriot Courtyard hotel in Andheri in Mumbai.
Nitin Fire Protection Industries' net profit surged 98.6% to Rs 5.82 crore on 157.3% increase in net sales to Rs 31.65 crore in Q2 September 2008 over Q2 September 2007.
Mumbai-based Nitin Fire Protection Industries is a leading end-to-end solution provider for fire protection, safety and security with capabilities in manufacturing, designing, engineering, commissioning and maintenance.
Tuesday, December 16, 2008
Brokers want govt to suspend STT to boost mkts
Press Trust of India / New Delhi December 16, 2008, 21:06 IST
Faced with increased volatility and dwindling volumes on bourses, stock brokers are suggesting suspension of the Securities Transaction Tax (STT) the collection for which has shrunk by more than 15 per cent during the first eight months of the current financial year.
"The government should at least suspend securities transaction tax for a year. This will encourage market participants to take their position aggressively. The sentiment of the market will improve as the volume will increase," Brokers said.
The STT, levied on share transactions at 0.125 per cent of the total value, declined to Rs 4,156 crore during April-November 2008, down 15.42 per cent during the corresponding period last year, mainly on account of reduced capitalisation in the India securities market.
Indian stock markets have suffered immensely on account of withdrawal of funds by the Foreign Institutional Investors (FIIs) with Bombay Stock Exchange benchmark Sensex declining from a high of over 21,000 to less than 8,000 points.
The turmoil in the market had an adverse impact on the turnover from the national stock exchange. It reduced to Rs 1,73,123 crore in November from Rs 4,47,138 crore in January, when the market was at its peak.
The total equity turnover from the Bombay Stock Exchange also declined to Rs 63,571.11 crore in November from Rs 1,85,622.78 crore in January.
"Removal of securities transaction tax will be a very good option but even if the government goes back to the earlier position (when it was used for tax deduction rather than as expense at the current level), it will be a big boost to the market.
Faced with increased volatility and dwindling volumes on bourses, stock brokers are suggesting suspension of the Securities Transaction Tax (STT) the collection for which has shrunk by more than 15 per cent during the first eight months of the current financial year.
"The government should at least suspend securities transaction tax for a year. This will encourage market participants to take their position aggressively. The sentiment of the market will improve as the volume will increase," Brokers said.
The STT, levied on share transactions at 0.125 per cent of the total value, declined to Rs 4,156 crore during April-November 2008, down 15.42 per cent during the corresponding period last year, mainly on account of reduced capitalisation in the India securities market.
Indian stock markets have suffered immensely on account of withdrawal of funds by the Foreign Institutional Investors (FIIs) with Bombay Stock Exchange benchmark Sensex declining from a high of over 21,000 to less than 8,000 points.
The turmoil in the market had an adverse impact on the turnover from the national stock exchange. It reduced to Rs 1,73,123 crore in November from Rs 4,47,138 crore in January, when the market was at its peak.
The total equity turnover from the Bombay Stock Exchange also declined to Rs 63,571.11 crore in November from Rs 1,85,622.78 crore in January.
"Removal of securities transaction tax will be a very good option but even if the government goes back to the earlier position (when it was used for tax deduction rather than as expense at the current level), it will be a big boost to the market.
Goldman Sachs reports $2.2 bn loss, first since going public
16 Dec 2008, 1914 hrs IST, AGENCIES
NEW YORK: Goldman Sachs Group Inc reported its first quarterly loss since going public nine years ago as the plunging value of stocks, debt and real estate caught up with a Wall Street leader that had largely avoided fallout from the global credit crisis.
Goldman's loss amounted to $4.97 per share, proving the turmoil in the financial markets has tripped up even the best-run financial institutions. Goldman earned $3.17 billion, or $7.01 per share, during the year-ago period.
Analysts, who have been ratcheting down their expectations amid speculation of mounting investment losses, estimated Goldman would lose $3.73 per share.
The investment banking sector was turned on its head in September when Lehman Brothers filed for bankruptcy and Goldman and Morgan Stanley became bank holding companies.
Excluding one-time items, analysts, on average, had expected a loss of $3.73 a share, according to media Estimates.
The company reported negative net revenue of $1.58 billion as writedowns outstripped revenue. A year earlier, net revenue totaled $10.7 billion.
Goldman shares rose 4.1 percent in premarket trading. Analysts warned in recent weeks that falling prices of equities, fixed income and other investments would generate up to $9 billion in writedowns at Goldman. November put an exclamation point on Wall Street's worst year since the Great Depression.
Goldman's shares have fallen nearly 70 percent this year, and nearly two-thirds since September, as investors lost confidence in Wall Street's lightly regulated, highly leveraged broker-dealers.
NEW YORK: Goldman Sachs Group Inc reported its first quarterly loss since going public nine years ago as the plunging value of stocks, debt and real estate caught up with a Wall Street leader that had largely avoided fallout from the global credit crisis.
Goldman's loss amounted to $4.97 per share, proving the turmoil in the financial markets has tripped up even the best-run financial institutions. Goldman earned $3.17 billion, or $7.01 per share, during the year-ago period.
Analysts, who have been ratcheting down their expectations amid speculation of mounting investment losses, estimated Goldman would lose $3.73 per share.
The investment banking sector was turned on its head in September when Lehman Brothers filed for bankruptcy and Goldman and Morgan Stanley became bank holding companies.
Excluding one-time items, analysts, on average, had expected a loss of $3.73 a share, according to media Estimates.
The company reported negative net revenue of $1.58 billion as writedowns outstripped revenue. A year earlier, net revenue totaled $10.7 billion.
Goldman shares rose 4.1 percent in premarket trading. Analysts warned in recent weeks that falling prices of equities, fixed income and other investments would generate up to $9 billion in writedowns at Goldman. November put an exclamation point on Wall Street's worst year since the Great Depression.
Goldman's shares have fallen nearly 70 percent this year, and nearly two-thirds since September, as investors lost confidence in Wall Street's lightly regulated, highly leveraged broker-dealers.
Sensex regains 10,000 level on 16th Dec'08,after five weeks
Sensex hits 10000 as RIL,ONGC surge
Benchmarks spiked in the last one hour of trade following surge in index oil&gas heavyweights like Reliance Industries and ONGC. Banks, IT and healthcare stocks provided much needed support. Bombay Stock Exchange’s Sensex closed at 10,003.98, up 171.59 points or 1.75 per cent. The index touched an intra-day high of 10,006.39 and a low of 9790.31.
National Stock Exchange’s Nifty ended at 3050.60, up 2.33 per cent or 69.40 points. The broader index hit a high of 3052.55 and a low of 2963.30.
BSE Midcap Index closed 2.50 per cent up and BSE Smallcap Index ended 3.25 per cent higher.
Significant gains in ONGC (6.67%), Grasim Industries (5.14%), HDFC Bank (4.73%), Tata Motors (4.52%), ACC (4.38%) and NTPC (3.74%) propped up the Sensex.
Losers comprised Sterlite Industries (-7.18%), HDFC (-4.16%), Reliance Communications (-1.74%), Reliance Infrastructure (-1.39%) and Larsen & Toubro (-1.36%).
Market breadth on BSE showed 1862 advances against 631 declines.
(All figures are provisional)
Benchmarks spiked in the last one hour of trade following surge in index oil&gas heavyweights like Reliance Industries and ONGC. Banks, IT and healthcare stocks provided much needed support. Bombay Stock Exchange’s Sensex closed at 10,003.98, up 171.59 points or 1.75 per cent. The index touched an intra-day high of 10,006.39 and a low of 9790.31.
National Stock Exchange’s Nifty ended at 3050.60, up 2.33 per cent or 69.40 points. The broader index hit a high of 3052.55 and a low of 2963.30.
BSE Midcap Index closed 2.50 per cent up and BSE Smallcap Index ended 3.25 per cent higher.
Significant gains in ONGC (6.67%), Grasim Industries (5.14%), HDFC Bank (4.73%), Tata Motors (4.52%), ACC (4.38%) and NTPC (3.74%) propped up the Sensex.
Losers comprised Sterlite Industries (-7.18%), HDFC (-4.16%), Reliance Communications (-1.74%), Reliance Infrastructure (-1.39%) and Larsen & Toubro (-1.36%).
Market breadth on BSE showed 1862 advances against 631 declines.
(All figures are provisional)
Monday, December 15, 2008
Jyoti Structures up Buying by a mutual fund
Jyoti Structures was locked at 10% upper limit at Rs 65.60 at 15:29 IST on BSE, extending gains for the third day in a row, after the company said Birla Sun Life Mutual Fund has raised its stake to 5% in the company.
The stock hit a high of Rs 65.60 and a low of Rs 61 so far during the day. The stock hit a 52-week high of Rs 328 on 8 January 2008 and a 52-week low of Rs 32.50 on 27 October 2008.
The stock had risen 19.38% from a recent low of Rs 54.95 on 10 December 2008.
The company's current equity is Rs 16.33 crore. Face value per share is Rs 2.
The current price of Rs 65.60 discounts the company's Q2 September 2008 annualized EPS of Rs 9.91, by a PE multiple of 6.62.
Birla Sun Life Mutual Fund, an asset management company, has increased its stake to 5% in Jyoti Structures after acquiring 13,582 shares through open market on 11 December 2008.
Jyoti Structures' net profit rose 18.5% to Rs 20.11 crore on 32.3% increase in net sales to Rs 420.79 crore in Q2 September 2008 over Q2 September 2007.
Jyoti Structures undertakes design, survey, manufacturing and supply of transmission line towers, foundation, erection of towers, supply of bought out items such as conductors, insulators and hardware accessories, stringing of conductors, testing and commissioning of transmission lines.
The stock hit a high of Rs 65.60 and a low of Rs 61 so far during the day. The stock hit a 52-week high of Rs 328 on 8 January 2008 and a 52-week low of Rs 32.50 on 27 October 2008.
The stock had risen 19.38% from a recent low of Rs 54.95 on 10 December 2008.
The company's current equity is Rs 16.33 crore. Face value per share is Rs 2.
The current price of Rs 65.60 discounts the company's Q2 September 2008 annualized EPS of Rs 9.91, by a PE multiple of 6.62.
Birla Sun Life Mutual Fund, an asset management company, has increased its stake to 5% in Jyoti Structures after acquiring 13,582 shares through open market on 11 December 2008.
Jyoti Structures' net profit rose 18.5% to Rs 20.11 crore on 32.3% increase in net sales to Rs 420.79 crore in Q2 September 2008 over Q2 September 2007.
Jyoti Structures undertakes design, survey, manufacturing and supply of transmission line towers, foundation, erection of towers, supply of bought out items such as conductors, insulators and hardware accessories, stringing of conductors, testing and commissioning of transmission lines.
Bharat Forge shares acquired by LIC of India
Bharat Forge gained 2.56% to Rs 82.25 at 14:12 IST on BSE, snapping losses in the preceding three sessions in a row, after the company said Life Insurance of India has acquired 45.33 lakh shares or 2.04% of the equity.
The stock hit a high of Rs 84.85 and a low of Rs 81 so far during the day. The stock hit a 52-week high of Rs 389.75 on 4 January 2008 and a 52-week low of Rs 78.10 on 12 December 2008.
The stock had shed 9.07% in three consecutive trading sessions to Rs 80.20 on 12 December 2008 from a recent high of Rs 88.20 on 8 December 2008.
The company's current equity is Rs 44.53 crore. Face value per share is Rs 2.
The current price of Rs 82.25 discounts the company's Q2 September 2008 annualized EPS of Rs 2.02, by a PE multiple of 40.72.
The life insurance giant Life Insurance of India has increased its stake to 9.21% in the company after acquiring 45.33 lakh shares or 2.04% of equity through open market purchases on 12 December 2008.
Bharat Forge had in November 2008 signed a pact with France based Alstom, a global power systems manufacturer and service provider to set a joint venture company (JVC) in India for manufacturing of power plant equipments.
Bharat Forge's net profit fell 83.4% to Rs 11.25 crore on 19.4% increase in net sales to Rs 654.47 crore in Q2 September 2008 over Q2 September 2007.
Bharat Forge is among the largest and technologically most advanced manufacturers of forged & machined components. The company has manufacturing operations across nine locations and six countries, 2 in India, 3 in Germany and one each in Sweden, Scotland UK, USA and China.
The stock hit a high of Rs 84.85 and a low of Rs 81 so far during the day. The stock hit a 52-week high of Rs 389.75 on 4 January 2008 and a 52-week low of Rs 78.10 on 12 December 2008.
The stock had shed 9.07% in three consecutive trading sessions to Rs 80.20 on 12 December 2008 from a recent high of Rs 88.20 on 8 December 2008.
The company's current equity is Rs 44.53 crore. Face value per share is Rs 2.
The current price of Rs 82.25 discounts the company's Q2 September 2008 annualized EPS of Rs 2.02, by a PE multiple of 40.72.
The life insurance giant Life Insurance of India has increased its stake to 9.21% in the company after acquiring 45.33 lakh shares or 2.04% of equity through open market purchases on 12 December 2008.
Bharat Forge had in November 2008 signed a pact with France based Alstom, a global power systems manufacturer and service provider to set a joint venture company (JVC) in India for manufacturing of power plant equipments.
Bharat Forge's net profit fell 83.4% to Rs 11.25 crore on 19.4% increase in net sales to Rs 654.47 crore in Q2 September 2008 over Q2 September 2007.
Bharat Forge is among the largest and technologically most advanced manufacturers of forged & machined components. The company has manufacturing operations across nine locations and six countries, 2 in India, 3 in Germany and one each in Sweden, Scotland UK, USA and China.
McNally Bharat moves up on new order win
McNally Bharat Engineering Company jumped 15.33% to Rs 39.50 at 12:26 IST on BSE, on bagging an order worth Rs 86.66 crore.
The stock hit a high of Rs 39.75 and a low of Rs 34.85 so far during the day. The stock hit a 52-week high of Rs 31.09 on 17 December 2007 and a 52-week low of Rs 30.40 on 3 December 2008.
The company's current equity is Rs 31.09 crore. Face value per share is Rs 10.
The current price of Rs 39.50 discounts the company's Q2 September 2008 annualized EPS of Rs 8.22, by a PE multiple of 4.81.
The company has bagged an order worth Rs 88.86 crore from Essar Constructions (India).
McNally Bharat Engineering Company (MBECL) had in September 2008 bagged an order worth Rs 115 crore from Bharat Heavy Electricals, Bangalore.
MBECL's net profit rose 45.9% to Rs 6.39 crore on 75.9% increase in net sales to Rs 202.63 crore in Q2 September 2008 over Q2 September 2007.
The company provides turnkey solutions in the areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply.
The stock hit a high of Rs 39.75 and a low of Rs 34.85 so far during the day. The stock hit a 52-week high of Rs 31.09 on 17 December 2007 and a 52-week low of Rs 30.40 on 3 December 2008.
The company's current equity is Rs 31.09 crore. Face value per share is Rs 10.
The current price of Rs 39.50 discounts the company's Q2 September 2008 annualized EPS of Rs 8.22, by a PE multiple of 4.81.
The company has bagged an order worth Rs 88.86 crore from Essar Constructions (India).
McNally Bharat Engineering Company (MBECL) had in September 2008 bagged an order worth Rs 115 crore from Bharat Heavy Electricals, Bangalore.
MBECL's net profit rose 45.9% to Rs 6.39 crore on 75.9% increase in net sales to Rs 202.63 crore in Q2 September 2008 over Q2 September 2007.
The company provides turnkey solutions in the areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply.
RIL up on govt to move court to allow third-party gas sales
Reliance Industries rose 1.22% to Rs 1322 at 11:40 IST on BSE on reports the government will shortly move the Bombay High Court to allow Reliance Industries third-partly gas sales from the Krishna-Godavari basin.
Meanwhile, the BSE Sensex was up 229.15 points, or 2.36%, to 9919.22.
On BSE, 10.63 lakh shares were traded in the counter. The scrip had an average daily volume of 23.82 lakh shares in the past one quarter.
The stock hit a high of Rs 1338 and a low of Rs 1310.10 so far during the day. The stock had a 52-week high of Rs 3252.10 on 15 January 2008 and a 52-week low of Rs 930 on 27 October 2008.
India's largest private sector company by market capitalisation and oil refiner has an equity capital of Rs 1573.79 crore. Face value per share is Rs 10.
The current price of Rs 1322 discounts its Q2 September 2008 annualised EPS of Rs 113.40, by a PE multiple of 11.65.
As per reports, the government will shortly move to the Bombay High Court requesting it to vacate an interim stay order that restrained Reliance Industries (RIL) from selling gas from the Krishna-Godavari (K-G) basin to companies other than Reliance Natural Resources (RNRL) and state-owned NTPC, customers that had signed contracts for the fuel.
Reports added that the government will file an application in the Bombay High Court by the end of December 2008 or early January 2009. The reason why the government will apply the court for allowing gas sales to third parties is that the government is a major stakeholder under the production-sharing contract with Reliance Industries (RIL). The government gets a share of revenue and profit called profit petroleum under production sharing contracts which it enters into with oil and gas producers.
The Bombay High Court's interim order in May 2007 had directed RIL not to create third party interest for the disputed volume of 40 million standard cubic metres per day (mscmd) of gas from the K-G basin.
RIL and RNRL had agreed on a price of $2.34 per million British thermal units (mBtu) in July 2006, but RIL wanted to charge more after gas prices rose and costs climbed. The government in September 2007 set the price of gas from the K-G field for potential buyers at $4.2 per million mBtu. The price was linked to crude oil equal to or more than $60 a barrel.
The move to get the interim order vacated comes just a day after the government withdrew its affidavit that had made it a party to the case being fought by the Ambani brothers in the Bombay High Court, saying it would expedite the two-year old case.
The affidavit, which the government submitted to the court on 14 November 2008, explained why the government wanted consumers to pay RIL $4.2 per unit of gas from the K-G basin. It added that the government had the right to reject the RIL-RNRL contract and that the higher gas price was binding.
Reliance Industries' net profit rose 7.4% to Rs 4122 crore on 39.8% growth in net sales to Rs 44787 crore in Q2 September 2008 over Q2 September 2007.
On 3 October 2008, RIL said it had allotted 12 crore equity shares of face value Rs 10 each to various promoter group firms upon exercise of rights attached to warrants held by them. These equity shares would be subject to a lock-in for a period of three years from the date of allotment of the warrants. The conversion price for the warrants is Rs 1,402 per share.
RIL manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, Gujarat that produces a wide range of products such as gasoline, superior kerosene oil and liquified petroleum gas.
Meanwhile, the BSE Sensex was up 229.15 points, or 2.36%, to 9919.22.
On BSE, 10.63 lakh shares were traded in the counter. The scrip had an average daily volume of 23.82 lakh shares in the past one quarter.
The stock hit a high of Rs 1338 and a low of Rs 1310.10 so far during the day. The stock had a 52-week high of Rs 3252.10 on 15 January 2008 and a 52-week low of Rs 930 on 27 October 2008.
India's largest private sector company by market capitalisation and oil refiner has an equity capital of Rs 1573.79 crore. Face value per share is Rs 10.
The current price of Rs 1322 discounts its Q2 September 2008 annualised EPS of Rs 113.40, by a PE multiple of 11.65.
As per reports, the government will shortly move to the Bombay High Court requesting it to vacate an interim stay order that restrained Reliance Industries (RIL) from selling gas from the Krishna-Godavari (K-G) basin to companies other than Reliance Natural Resources (RNRL) and state-owned NTPC, customers that had signed contracts for the fuel.
Reports added that the government will file an application in the Bombay High Court by the end of December 2008 or early January 2009. The reason why the government will apply the court for allowing gas sales to third parties is that the government is a major stakeholder under the production-sharing contract with Reliance Industries (RIL). The government gets a share of revenue and profit called profit petroleum under production sharing contracts which it enters into with oil and gas producers.
The Bombay High Court's interim order in May 2007 had directed RIL not to create third party interest for the disputed volume of 40 million standard cubic metres per day (mscmd) of gas from the K-G basin.
RIL and RNRL had agreed on a price of $2.34 per million British thermal units (mBtu) in July 2006, but RIL wanted to charge more after gas prices rose and costs climbed. The government in September 2007 set the price of gas from the K-G field for potential buyers at $4.2 per million mBtu. The price was linked to crude oil equal to or more than $60 a barrel.
The move to get the interim order vacated comes just a day after the government withdrew its affidavit that had made it a party to the case being fought by the Ambani brothers in the Bombay High Court, saying it would expedite the two-year old case.
The affidavit, which the government submitted to the court on 14 November 2008, explained why the government wanted consumers to pay RIL $4.2 per unit of gas from the K-G basin. It added that the government had the right to reject the RIL-RNRL contract and that the higher gas price was binding.
Reliance Industries' net profit rose 7.4% to Rs 4122 crore on 39.8% growth in net sales to Rs 44787 crore in Q2 September 2008 over Q2 September 2007.
On 3 October 2008, RIL said it had allotted 12 crore equity shares of face value Rs 10 each to various promoter group firms upon exercise of rights attached to warrants held by them. These equity shares would be subject to a lock-in for a period of three years from the date of allotment of the warrants. The conversion price for the warrants is Rs 1,402 per share.
RIL manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, Gujarat that produces a wide range of products such as gasoline, superior kerosene oil and liquified petroleum gas.
Elecon Engineering surges on new order win
Elecon Engineering Company was locked at 5% upper limit at Rs 37.15 at 10:53 IST on BSE, on bagging an order worth Rs 120 crore.
The company announced the order win after market hours on Friday, 12 December 2008.
The stock hit a high of Rs 37.15 and a low of Rs 36 so far during the day. The stock hit a 52-week high of Rs 343 on 20 December 2007 and a 52-week low of Rs 29.50 on 5 December 2008.
The company's current equity is Rs 18.57 crore. Face value per share is Rs 2.
The current price of Rs 37.15 discounts the company's Q2 September 2008 annualized EPS of Rs 6.90, by a PE multiple of 5.38.
Prayas Engineering, a promoter, had on 10 December 2008 acquired 44,500 shares or 0.05% of the equity capital of the company through open market. Since November 2008, Prayas Engineering so far acquired 8.26 lakh equity shares or 0.89% of equity capital of Elecon Engineering.
Elecon has bagged an order worth Rs 120 crore from Mundra Port and Special Economic Zone for design, supply, erection, testing and commissioning of material handling system.
Elecon Engineering had in October 2008 secured an order worth Rs 17.75 crore from Techpro Systems, Chennai.
Elecon Engineering Company's net profit fell 7% to Rs 16.02 crore on 37.3% increase in net sales to Rs 252.23 crore in Q2 September 2008 over Q2 September 2007.
Elecon Engineering Company manufactures all kinds of mechanical handling equipment such as bucket elevators, belt conveyors, gravity roller conveyors, bag-filling machines, bag stacking machines, overhead chair conveyors.
The company announced the order win after market hours on Friday, 12 December 2008.
The stock hit a high of Rs 37.15 and a low of Rs 36 so far during the day. The stock hit a 52-week high of Rs 343 on 20 December 2007 and a 52-week low of Rs 29.50 on 5 December 2008.
The company's current equity is Rs 18.57 crore. Face value per share is Rs 2.
The current price of Rs 37.15 discounts the company's Q2 September 2008 annualized EPS of Rs 6.90, by a PE multiple of 5.38.
Prayas Engineering, a promoter, had on 10 December 2008 acquired 44,500 shares or 0.05% of the equity capital of the company through open market. Since November 2008, Prayas Engineering so far acquired 8.26 lakh equity shares or 0.89% of equity capital of Elecon Engineering.
Elecon has bagged an order worth Rs 120 crore from Mundra Port and Special Economic Zone for design, supply, erection, testing and commissioning of material handling system.
Elecon Engineering had in October 2008 secured an order worth Rs 17.75 crore from Techpro Systems, Chennai.
Elecon Engineering Company's net profit fell 7% to Rs 16.02 crore on 37.3% increase in net sales to Rs 252.23 crore in Q2 September 2008 over Q2 September 2007.
Elecon Engineering Company manufactures all kinds of mechanical handling equipment such as bucket elevators, belt conveyors, gravity roller conveyors, bag-filling machines, bag stacking machines, overhead chair conveyors.
Gitanjali Gems sparkles on buyback plan
Gitanjali Gems soared 8.36% to Rs 73.90 at 10:13 IST on BSE after the company said its board will meet on 19 December 2008 to consider buyback of own shares.
The company made the announcement before market hours today, 15 December 2008.
The stock hit a high of Rs 74.40 and a low of Rs 70.95 so far during the day. The stock had a 52-week high of Rs 473.10 on 27 December 2007 and a 52-week low of Rs 57.25 on 21 November 2008.
The small-cap diamond and jewellery maker and retailer has an equity capital of Rs 85.06 crore. Face value per share is Rs 10.
The current price of Rs 73.90 discounts its Q2 September 2008 annualised EPS of Rs 16.55, by a PE multiple of 4.46.
Gitanjali Gems' net profit rose 31.1% to Rs 35.20 crore on a 21.7% rise in sales to Rs 728.27 crore in Q2 September 2008 over Q2 September 2007.
The company manufactures, exports and markets diamonds and jewellery. It owns a number of jewellery brands, including D'damas, Nakshatra, Sangini and Asmi.
The company made the announcement before market hours today, 15 December 2008.
The stock hit a high of Rs 74.40 and a low of Rs 70.95 so far during the day. The stock had a 52-week high of Rs 473.10 on 27 December 2007 and a 52-week low of Rs 57.25 on 21 November 2008.
The small-cap diamond and jewellery maker and retailer has an equity capital of Rs 85.06 crore. Face value per share is Rs 10.
The current price of Rs 73.90 discounts its Q2 September 2008 annualised EPS of Rs 16.55, by a PE multiple of 4.46.
Gitanjali Gems' net profit rose 31.1% to Rs 35.20 crore on a 21.7% rise in sales to Rs 728.27 crore in Q2 September 2008 over Q2 September 2007.
The company manufactures, exports and markets diamonds and jewellery. It owns a number of jewellery brands, including D'damas, Nakshatra, Sangini and Asmi.
Post-Market Commentary. Monday, December 15, 2008
Sensex ends higher 1.47%; Nifty up over 2%
Expectations of a second tranche of fiscal sops from the government and hopes of additional interest rate cuts by the central bank to shield the domestic economy from the global economic recession, boosted the market in what was a highly volatile trading session.
The BSE 30-share Sensex advanced 142.32 points, or 1.47%, nearly 120 points down from the day's high and about 80 points off the day's low.
The market was caught between reports of a mixed bag of advance tax payment by top corporates, cutting of gains by European shares, lower US index futures and hopes of more measures by the government and central bank to revive demand in a weakening economy. Volatility in index heavyweight Reliance Industries (RIL) caused volatility in the key benchmark indices.
State Bank of India (SBI) has reportedly paid 56% higher advance tax of Rs 1,700 crore in Q3 December 2008 over Q3 December 2007. HDFC paid about 30% higher advance tax at Rs 279 crore. However, ICICI Bank paid 6% lower advance tax is at Rs 470 crore. RIL has paid almost the same advance tax as last year.
The market witnessed a bout of volatility. After an initial surge, the market pared gains before bouncing back again in morning trade. The market once again pared gains in early afternoon trade. The market lost further ground in afternoon trade. It soon came off the lower level and the recovery continued in mid-afternoon. The market once again pared gains in late trade before regaining strength later. The BSE Sensex swung 199.04 points between the day's high and low.
Factory output in India fell for the first time in more than 13 years in October 2008, the latest evidence of a rapid economic slowdown. The weak industrial output data for October 2008 has raised expectations of a suitable policy response from the government and the central bank to shield the domestic economy from the global economic recession. There is an anticipation of a second tranche of fiscal sops from the government and additional interest rate cuts by the central bank.
The BSE 30-share Sensex was up 142.32 points, or 1.47%, to 9,832.39. At the day's low of 9,749.29, the Sensex gained 59.22 points in afternoon trade. The Sensex jumped 258.26 points at the day's high of 9,948.33 hit in mid-morning trade.
The S&P CNX Nifty was up 59.85 points, or 2.05%, to 2,981.20.
Buying by foreign funds this month has lifted sentiments. From a recent low of 8,739.24 on 2 December 2008, the BSE Sensex has risen 1,093.15 points or 12.5% in the past eight trading sessions. Foreign funds have bought shares worth Rs 2,048.70 crore, till 11 December 2008. They are net sellers of Rs 52,688.50 crore in calendar 2008, so far.
Expectations of a second tranche of fiscal sops from the government and hopes of additional interest rate cuts by the central bank to shield the domestic economy from the global economic recession, boosted the market in what was a highly volatile trading session.
The BSE 30-share Sensex advanced 142.32 points, or 1.47%, nearly 120 points down from the day's high and about 80 points off the day's low.
The market was caught between reports of a mixed bag of advance tax payment by top corporates, cutting of gains by European shares, lower US index futures and hopes of more measures by the government and central bank to revive demand in a weakening economy. Volatility in index heavyweight Reliance Industries (RIL) caused volatility in the key benchmark indices.
State Bank of India (SBI) has reportedly paid 56% higher advance tax of Rs 1,700 crore in Q3 December 2008 over Q3 December 2007. HDFC paid about 30% higher advance tax at Rs 279 crore. However, ICICI Bank paid 6% lower advance tax is at Rs 470 crore. RIL has paid almost the same advance tax as last year.
The market witnessed a bout of volatility. After an initial surge, the market pared gains before bouncing back again in morning trade. The market once again pared gains in early afternoon trade. The market lost further ground in afternoon trade. It soon came off the lower level and the recovery continued in mid-afternoon. The market once again pared gains in late trade before regaining strength later. The BSE Sensex swung 199.04 points between the day's high and low.
Factory output in India fell for the first time in more than 13 years in October 2008, the latest evidence of a rapid economic slowdown. The weak industrial output data for October 2008 has raised expectations of a suitable policy response from the government and the central bank to shield the domestic economy from the global economic recession. There is an anticipation of a second tranche of fiscal sops from the government and additional interest rate cuts by the central bank.
The BSE 30-share Sensex was up 142.32 points, or 1.47%, to 9,832.39. At the day's low of 9,749.29, the Sensex gained 59.22 points in afternoon trade. The Sensex jumped 258.26 points at the day's high of 9,948.33 hit in mid-morning trade.
The S&P CNX Nifty was up 59.85 points, or 2.05%, to 2,981.20.
Buying by foreign funds this month has lifted sentiments. From a recent low of 8,739.24 on 2 December 2008, the BSE Sensex has risen 1,093.15 points or 12.5% in the past eight trading sessions. Foreign funds have bought shares worth Rs 2,048.70 crore, till 11 December 2008. They are net sellers of Rs 52,688.50 crore in calendar 2008, so far.
Wednesday, December 10, 2008
Morgan Stanley cuts India's 2009/10 GDP forecast – Reuters
Wed, Dec 10 03:14 PM
Morgan Stanley on Wednesday cut its forecast for India's economic growth in the fiscal year beginning April 2009 to 5.3 percent from 5.7 percent, citing a higher cost of capital which could crimp domestic demand.
It expects the economy to grow 7 percent in this fiscal year, compared with 9.0 percent last year.
"Dislocation in global capital markets has resulted in a sharp reversal in capital inflows, pushing up cost of capital," Morgan Stanley said in a note.
With the domestic banking system already witnessing tight liquidity conditions, foreign exchange outflows at the same time have resulted in a disruptive spike in the cost of capital, it explained.
Over the last few years, India's gross domestic product accelerated higher than its potential growth, helped by large capital inflows, the note said.
Morgan Stanley said recent central bank measures are unlikely to reduce the cost of capital in a meaningful manner before domestic demand and underlying credit demand decelerate sharply.
Morgan Stanley expects the central bank to cut its key lending rate by 125 basis points to 5.25 percent by the end of 2009, along with additional measures to support liquidity.
It expects much of the cut by March 2009, by which time it expects the repo rate at 5.5 percent.
But it does not see any scope for an aggressive fiscal policy response from the government given its large fiscal deficit and high public debt.
The central bank on Saturday slashed its key interest rates by 1 percentage point in order to boost growth and shore up investor confidence amid signs of an economic slowdown.
Morgan Stanley on Wednesday cut its forecast for India's economic growth in the fiscal year beginning April 2009 to 5.3 percent from 5.7 percent, citing a higher cost of capital which could crimp domestic demand.
It expects the economy to grow 7 percent in this fiscal year, compared with 9.0 percent last year.
"Dislocation in global capital markets has resulted in a sharp reversal in capital inflows, pushing up cost of capital," Morgan Stanley said in a note.
With the domestic banking system already witnessing tight liquidity conditions, foreign exchange outflows at the same time have resulted in a disruptive spike in the cost of capital, it explained.
Over the last few years, India's gross domestic product accelerated higher than its potential growth, helped by large capital inflows, the note said.
Morgan Stanley said recent central bank measures are unlikely to reduce the cost of capital in a meaningful manner before domestic demand and underlying credit demand decelerate sharply.
Morgan Stanley expects the central bank to cut its key lending rate by 125 basis points to 5.25 percent by the end of 2009, along with additional measures to support liquidity.
It expects much of the cut by March 2009, by which time it expects the repo rate at 5.5 percent.
But it does not see any scope for an aggressive fiscal policy response from the government given its large fiscal deficit and high public debt.
The central bank on Saturday slashed its key interest rates by 1 percentage point in order to boost growth and shore up investor confidence amid signs of an economic slowdown.
Post Market-10th Dec'08
Nifty crosses crucial 2850 level; short-term rally on cards
The euphoria of RBI's measures to infuse more liquidity and the government's over Rs 30,000-crore package for the industry over the weekend was revived Wednesday when the market resumed trade after a festive holiday.
Strong cues from Asian counterparts also aided the upmove. After a firm opening, trade on the Indian bourses turned lacklustre for a brief period and again gathered momentum triggered by the news that a tentative deal was reached on a plan to rescue the battered US auto industry.
The auto industry's Big Three appear close to securing a bailout, with reports that the White House and top Democrats have agreed in-principle for a $15 billion rescue plan - less than half the amount sought by GM, Ford and Chrysler.
"After a long period of consolidation, key indices were ripe for a breakout. The government's stimulus package and RBI's move over the weekend proved to be the catalysts for this rally. These measures were not fully absorbed on Monday where we witnessed some amount of profit booking in late trade ahead of the market holiday on Tuesday. Hence , the rally resumed Wednesday . Global cues were also in favour of an upmove," said DD Sharma, vice president-equity at Anand Rathi Securities.
Bombay Stock Exchange's Sensex rose 5.37 per cent or 492.28 points to close at 9,654.90 after touching a high of 9,678.70. The low was 9,280.16. National Stock Exchange's Nifty climbed 5.18 per cent or 144.25 points to 2928.25.
Having crossed important resistance level of 2850, Sharma said the market now looks poised for a short term rally which could see the index go up to 3150-3200. He observed that with index pivotals like Reliance Industries and IDFC crossing their 20DMA, there is a high probability of a stronger rally.
The broader market also participated in late trade. BSE Midcap Index closed 2.19 per cent and BSE Smallcap Index gained 1.56 per cent.
DLF was the star of today 's rally . The stock ended 18.93 per cent higher sending the BSE Realty Index up 12.56 per cent on expectations that the RBI measure including a refinance facility for the National Housing Bank and priority sector status for housing loans up to Rs 20 lakh will revive housing demand.
Biggest Sensex gainers were DLF (18.93%), Mahindra & Mahindra (15.47%), Grasim Industries (13.66%), Tata Steel (10.92%) and Reliance Communications (10.24%).
Index heavyweight Reliance Industries jumped 9.6 per cent to Rs 1,227.20, its biggest gain since Oct. 31 taking it to its highest close in a month, with foreign funds leading the buying. The rate cuts also bolstered bank stocks, with No.2 lender ICICI Bank rising 8.2 pe rcent and top mortgage lender HDFC climbing 7.5 percent.
Ranbaxy Laboratories, down 1.08 per cent, was the only laggard in the 30-share index.
Market breadth on BSE remained positive with 1,138 advances against 774 declines.
via:E.T
The euphoria of RBI's measures to infuse more liquidity and the government's over Rs 30,000-crore package for the industry over the weekend was revived Wednesday when the market resumed trade after a festive holiday.
Strong cues from Asian counterparts also aided the upmove. After a firm opening, trade on the Indian bourses turned lacklustre for a brief period and again gathered momentum triggered by the news that a tentative deal was reached on a plan to rescue the battered US auto industry.
The auto industry's Big Three appear close to securing a bailout, with reports that the White House and top Democrats have agreed in-principle for a $15 billion rescue plan - less than half the amount sought by GM, Ford and Chrysler.
"After a long period of consolidation, key indices were ripe for a breakout. The government's stimulus package and RBI's move over the weekend proved to be the catalysts for this rally. These measures were not fully absorbed on Monday where we witnessed some amount of profit booking in late trade ahead of the market holiday on Tuesday. Hence , the rally resumed Wednesday . Global cues were also in favour of an upmove," said DD Sharma, vice president-equity at Anand Rathi Securities.
Bombay Stock Exchange's Sensex rose 5.37 per cent or 492.28 points to close at 9,654.90 after touching a high of 9,678.70. The low was 9,280.16. National Stock Exchange's Nifty climbed 5.18 per cent or 144.25 points to 2928.25.
Having crossed important resistance level of 2850, Sharma said the market now looks poised for a short term rally which could see the index go up to 3150-3200. He observed that with index pivotals like Reliance Industries and IDFC crossing their 20DMA, there is a high probability of a stronger rally.
The broader market also participated in late trade. BSE Midcap Index closed 2.19 per cent and BSE Smallcap Index gained 1.56 per cent.
DLF was the star of today 's rally . The stock ended 18.93 per cent higher sending the BSE Realty Index up 12.56 per cent on expectations that the RBI measure including a refinance facility for the National Housing Bank and priority sector status for housing loans up to Rs 20 lakh will revive housing demand.
Biggest Sensex gainers were DLF (18.93%), Mahindra & Mahindra (15.47%), Grasim Industries (13.66%), Tata Steel (10.92%) and Reliance Communications (10.24%).
Index heavyweight Reliance Industries jumped 9.6 per cent to Rs 1,227.20, its biggest gain since Oct. 31 taking it to its highest close in a month, with foreign funds leading the buying. The rate cuts also bolstered bank stocks, with No.2 lender ICICI Bank rising 8.2 pe rcent and top mortgage lender HDFC climbing 7.5 percent.
Ranbaxy Laboratories, down 1.08 per cent, was the only laggard in the 30-share index.
Market breadth on BSE remained positive with 1,138 advances against 774 declines.
via:E.T
Tuesday, December 9, 2008
Very deep global recession possible: World Bank
10 Dec 2008, 00:00 hrs IST, AGENCIES
WASHINGTON: Economic growth prospects for both high income
and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said on Tuesday.
The international banking crisis that erupted in September 2008 after more than a year of less acute financial turmoil has substantially reinforced the cylical downturn that was already under way, the bank said a report devoted to assessing economic prospects for 2009.
``Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter , capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated,'' the bank said.
The bank predicted world economic growth will be 2.5 per cent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 per cent in 2007, while growth in high income countries will turn negative.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to be subjected to substantial strains, possibly including bank failures and currency crises, the bank said.
``In these very uncertain circumstances,” the bank said, ``policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'''
The IMF provides rescue packages to countries experiencing financial crises while the bank, its sister institution, lends money or makes grants for development projects.
``People in the developing world have had to deal with two major external shocks, the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world,'' said Justin Lin, the bank's chief economist ``Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest.''
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp, would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
via:E.T
WASHINGTON: Economic growth prospects for both high income
and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said on Tuesday.
The international banking crisis that erupted in September 2008 after more than a year of less acute financial turmoil has substantially reinforced the cylical downturn that was already under way, the bank said a report devoted to assessing economic prospects for 2009.
``Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter , capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated,'' the bank said.
The bank predicted world economic growth will be 2.5 per cent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 per cent in 2007, while growth in high income countries will turn negative.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to be subjected to substantial strains, possibly including bank failures and currency crises, the bank said.
``In these very uncertain circumstances,” the bank said, ``policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'''
The IMF provides rescue packages to countries experiencing financial crises while the bank, its sister institution, lends money or makes grants for development projects.
``People in the developing world have had to deal with two major external shocks, the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world,'' said Justin Lin, the bank's chief economist ``Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest.''
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp, would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
via:E.T
World could face a decade-long slump: Krugman
9 Dec 2008, 1040 hrs IST, REUTERS
STOCKHOLM: The world economy will likely feel the impact of the global financial turmoil for another three years at least, the 2008 winner of the Nobel economics prize Paul Krugman said Monday.
"We could easily be talking about a world economy that is depressed into 2011 and even beyond," the Princeton University professor and New York Times columnist told reporters in Stockholm, where he will receive his Nobel prize this week.
"The scenario I fear is that we'll see for the whole world the equivalent of Japan's lost decade in the 1990s, that we'll see a world of zero interest rates and inflation and no sign of recovery and it will just go on for a very, very extended period," he said.
"On top of that, we'll have a series of extremely severe crises in particular countries in trouble," he predicted, pointing out that "we certainly see the roots of ... Argentina- or Indonesia-style crises ... particularly in the European periphery."
As for the United States, Krugman, who has previously said that a stimulus plan of at least four percent of the US gross domestic product is needed next year, said Monday that amount might not be enough.
"If you're serious about the size of the hole that needs to be filled, that's actually modest," he said, stressing that that amount "is not enough to prevent a further decline in the economy. It's enough to prevent a sharp decline."
The falling US housing market, which triggered the global financial crisis, will probably continue to weaken, he said, pointing out that recent estimates show "we have another 10 to 15 percent to go."
Krugman, who won the Nobel prize for his work on the impact of free trade and globalisation, said Washington should not hesitate to spend on infrastructure that would provide long-term benefit to the country, even if it means running up a high deficit in the short term.
"We're probably in the US going to run a deficit of seven or eight percent of GDP next year. That's clearly not something you can do indefinitely," he said.
"If it's two years of massive stimulus and massive debts, that's okay. If it's two years of that, and no sign that anything is getting better then I start to worry," he added.
Krugman will receive his Nobel gold medal and diploma along with 10 million Swedish kronor (1.2 million dollars, 929,000 euros) at a formal prize ceremony in Stockholm on December 10.
via:E.T
STOCKHOLM: The world economy will likely feel the impact of the global financial turmoil for another three years at least, the 2008 winner of the Nobel economics prize Paul Krugman said Monday.
"We could easily be talking about a world economy that is depressed into 2011 and even beyond," the Princeton University professor and New York Times columnist told reporters in Stockholm, where he will receive his Nobel prize this week.
"The scenario I fear is that we'll see for the whole world the equivalent of Japan's lost decade in the 1990s, that we'll see a world of zero interest rates and inflation and no sign of recovery and it will just go on for a very, very extended period," he said.
"On top of that, we'll have a series of extremely severe crises in particular countries in trouble," he predicted, pointing out that "we certainly see the roots of ... Argentina- or Indonesia-style crises ... particularly in the European periphery."
As for the United States, Krugman, who has previously said that a stimulus plan of at least four percent of the US gross domestic product is needed next year, said Monday that amount might not be enough.
"If you're serious about the size of the hole that needs to be filled, that's actually modest," he said, stressing that that amount "is not enough to prevent a further decline in the economy. It's enough to prevent a sharp decline."
The falling US housing market, which triggered the global financial crisis, will probably continue to weaken, he said, pointing out that recent estimates show "we have another 10 to 15 percent to go."
Krugman, who won the Nobel prize for his work on the impact of free trade and globalisation, said Washington should not hesitate to spend on infrastructure that would provide long-term benefit to the country, even if it means running up a high deficit in the short term.
"We're probably in the US going to run a deficit of seven or eight percent of GDP next year. That's clearly not something you can do indefinitely," he said.
"If it's two years of massive stimulus and massive debts, that's okay. If it's two years of that, and no sign that anything is getting better then I start to worry," he added.
Krugman will receive his Nobel gold medal and diploma along with 10 million Swedish kronor (1.2 million dollars, 929,000 euros) at a formal prize ceremony in Stockholm on December 10.
via:E.T
Monday, December 8, 2008
Post-Market Commentary. Monday, December 08, 2008
Post-stimulus Package
Market loses stimulus steam as Reliance, banks slip
8 Dec 2008, 1805 hrs IST,
It was one of those rare days for the market where every cue indicated a strong day ahead. Equities opened with a gap-up as traders welcomed the government’s fiscal stimulus coupled by Reserve Bank of India’s decision to cut interest rates.
Asian markets, too, were up following a rally in the US. Also, assembly elections sprung a surprise as the Congress party managed to gain voters confidence in Rajasthan, Delhi and Mizoram while the opposition Bhartiya Janata Party held fort in Madhya Pradesh and Chattisgarh.
Realty and infrastructure companies including power and capital goods surge on the government’s fiscal stimulus. Metal stocks also made a comeback on expectations of improvement in the Asian steel market. This saw the BSE Realty Index ended 5.27 per cent higher, BSE Metal Index closed 3.05 per cent up and BSE Power Index advanced 2.78 per cent.
The Indian government also cut fuel prices by slashing petrol prices by Rs 5 per litre and diesel by Rs 2 per litre. Analysts say it will help in easing inflation further and hence options of lower interest rates in coming times could not be ruled out.
“Fiscal stimulus of Rs 3 lakh crore is a welcome long-term plan to boost economy
. Interest rates are likely to fall further and will lead to pick up in demand. The overall outlook is positive,” said Manish Sonthalia, VP-equity strategy, Motilal Oswal.
However, the market couldn’t hold on to the higher levels and pared more than half of its gains as traders booked profits in index-heavy weight like Reliance Industries and other banking majors.
“Institutions seem to have bought in today’s trade while traders may have booked profits. Reliance dragged towards the end putting pressure on the benchmarks,” Sonthalia added.
Bombay Stock Exchange’s Sensex closed at 9,162.62, up 197.42 points or 2.2 per cent. The index slipped from an intra-day high of 9,432.11 to a low of 9095.70.
National Stock Exchange’s Nifty ended at 2784, up 2.56 per cent or 69.6 points. The broader index hit a high of 2861.55 and a low of 2714.70 in the day.
BSE Midcap Index ended 0.36 per cent lower and BSE Smallcap Index closed 0.65 per cent higher.
“This is a gradual base building process. Once markets break out of 9350/2850 (Sensex/Nifty) then we may see levels of 10,300/3200,” he concluded.
Biggest gainers in the Sensex pack were DLF (8.71%), Tata Steel (7.22%), Bharti Airtel (5.34%), HDFC (5.21%) and Reliance Communications (4.97%).
Mahindra & Mahindra (-1.57%), Tata Motors (-0.72%) and Satyam Computer (-0.33%) were the only losers in the 30-share index.
Market breadth on BSE remained positive with 1,384 advances against 1,016 declines.
Over the weekend, the government unveiled Rs 30,700-crore fiscal stimulus package comprising additional spending and excise duty cuts. The package comprises Rs 20,000 crore in additional expenditure, an across-the-board 4 per cent excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.
In order to help real estate companies tide over the current credit crunch and weak demand, RBI on Saturday cut repo and reverse repo rates by 100 bps each and allowed restructuring of commercial real estate loans up to June 30, 2009.
Meanwhile, European markets were up and US stock futures indicating another positive session. Dow Jones stock futures were up 2.37 per cent, S&P 500 futures gained 2.85 per cent and Nasdaq futures was up 2.29 per cent.
However, the effects of the overseas trend will only be reflected Wednesday, as Indian stock markets are closed Tuesday for Eid-ul-Adha.
via:.E.T
Market loses stimulus steam as Reliance, banks slip
8 Dec 2008, 1805 hrs IST,
It was one of those rare days for the market where every cue indicated a strong day ahead. Equities opened with a gap-up as traders welcomed the government’s fiscal stimulus coupled by Reserve Bank of India’s decision to cut interest rates.
Asian markets, too, were up following a rally in the US. Also, assembly elections sprung a surprise as the Congress party managed to gain voters confidence in Rajasthan, Delhi and Mizoram while the opposition Bhartiya Janata Party held fort in Madhya Pradesh and Chattisgarh.
Realty and infrastructure companies including power and capital goods surge on the government’s fiscal stimulus. Metal stocks also made a comeback on expectations of improvement in the Asian steel market. This saw the BSE Realty Index ended 5.27 per cent higher, BSE Metal Index closed 3.05 per cent up and BSE Power Index advanced 2.78 per cent.
The Indian government also cut fuel prices by slashing petrol prices by Rs 5 per litre and diesel by Rs 2 per litre. Analysts say it will help in easing inflation further and hence options of lower interest rates in coming times could not be ruled out.
“Fiscal stimulus of Rs 3 lakh crore is a welcome long-term plan to boost economy
. Interest rates are likely to fall further and will lead to pick up in demand. The overall outlook is positive,” said Manish Sonthalia, VP-equity strategy, Motilal Oswal.
However, the market couldn’t hold on to the higher levels and pared more than half of its gains as traders booked profits in index-heavy weight like Reliance Industries and other banking majors.
“Institutions seem to have bought in today’s trade while traders may have booked profits. Reliance dragged towards the end putting pressure on the benchmarks,” Sonthalia added.
Bombay Stock Exchange’s Sensex closed at 9,162.62, up 197.42 points or 2.2 per cent. The index slipped from an intra-day high of 9,432.11 to a low of 9095.70.
National Stock Exchange’s Nifty ended at 2784, up 2.56 per cent or 69.6 points. The broader index hit a high of 2861.55 and a low of 2714.70 in the day.
BSE Midcap Index ended 0.36 per cent lower and BSE Smallcap Index closed 0.65 per cent higher.
“This is a gradual base building process. Once markets break out of 9350/2850 (Sensex/Nifty) then we may see levels of 10,300/3200,” he concluded.
Biggest gainers in the Sensex pack were DLF (8.71%), Tata Steel (7.22%), Bharti Airtel (5.34%), HDFC (5.21%) and Reliance Communications (4.97%).
Mahindra & Mahindra (-1.57%), Tata Motors (-0.72%) and Satyam Computer (-0.33%) were the only losers in the 30-share index.
Market breadth on BSE remained positive with 1,384 advances against 1,016 declines.
Over the weekend, the government unveiled Rs 30,700-crore fiscal stimulus package comprising additional spending and excise duty cuts. The package comprises Rs 20,000 crore in additional expenditure, an across-the-board 4 per cent excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.
In order to help real estate companies tide over the current credit crunch and weak demand, RBI on Saturday cut repo and reverse repo rates by 100 bps each and allowed restructuring of commercial real estate loans up to June 30, 2009.
Meanwhile, European markets were up and US stock futures indicating another positive session. Dow Jones stock futures were up 2.37 per cent, S&P 500 futures gained 2.85 per cent and Nasdaq futures was up 2.29 per cent.
However, the effects of the overseas trend will only be reflected Wednesday, as Indian stock markets are closed Tuesday for Eid-ul-Adha.
via:.E.T
Sunday, December 7, 2008
Highlights of fiscal stimulus package
7 Dec 2008, 1717 hrs IST, IANS
NEW DELHI: The following are the highlights of the fiscal stimulus package unveiled by the government Sunday (7 Dec 2008) to contain the impact of global financial crisis on the Indian economy:
- Plan, non-plan expenditure of Rs.300,000 crore (Rs.3,000 billion/$60 billion) in four months
- Parliament nod to be sought for Rs.20,000 crore more toward plan expenditure
- Across-the-board cut of four percent in the ad valorem central value-added tax
- Interest subvention of two percent on export credit for labour intensive sectors
- Additional allocations for export incentive schemes
- Full refund of service tax paid by exporters to foreign agents
- Incentives for loans on housing for up to Rs.500,000, and up to Rs.2 million
- Limits under the credit guarantee scheme for small enterprises doubled
- Lock-in period for loans to small firms under credit guarantee scheme reduced
- India Infrastructure Finance Co allowed to raise Rs.100 billion through tax-free bonds
- Norms for government departments to replace vehicles relaxed
- Import duty on naphtha for use by the power sector is being reduced to zero
- Export duty on iron ore fines eliminated
- Export duty on lumps for steel industry reduced to five percent
NEW DELHI: The following are the highlights of the fiscal stimulus package unveiled by the government Sunday (7 Dec 2008) to contain the impact of global financial crisis on the Indian economy:
- Plan, non-plan expenditure of Rs.300,000 crore (Rs.3,000 billion/$60 billion) in four months
- Parliament nod to be sought for Rs.20,000 crore more toward plan expenditure
- Across-the-board cut of four percent in the ad valorem central value-added tax
- Interest subvention of two percent on export credit for labour intensive sectors
- Additional allocations for export incentive schemes
- Full refund of service tax paid by exporters to foreign agents
- Incentives for loans on housing for up to Rs.500,000, and up to Rs.2 million
- Limits under the credit guarantee scheme for small enterprises doubled
- Lock-in period for loans to small firms under credit guarantee scheme reduced
- India Infrastructure Finance Co allowed to raise Rs.100 billion through tax-free bonds
- Norms for government departments to replace vehicles relaxed
- Import duty on naphtha for use by the power sector is being reduced to zero
- Export duty on iron ore fines eliminated
- Export duty on lumps for steel industry reduced to five percent
Govt announces package including tax cuts to boost economy
7 Dec 2008, 1659 hrs IST, Economictimes and Agencies
NEW DELHI: The government today announced major tax cuts across the board to boost demand and allocated additional funds and incentives for exports, housing, textile and infrastructure to stimulate the economy, hit by the global financial crisis.
"The government has been concerned about the impact of global financial crisis on the Indian economy and a number of steps have been taken to deal with this problem," an official statement said.
The package, coming on the back of fresh monetary measures announced by the RBI yesterday, includes a four per cent cut in ad-valoram duty across the board, to boost additional spending, besides enhanced credit for exporters, along with a Rs 10,000 crore mop up for India Infrastructure Finance Company.
Import duty on Naptha for use in power sector as well as export duty on iron ore to be eliminated.
"In order to provide a contra-cyclical stimulus via plan expenditure, the government has decided to seek authorisation for additional plan expenditure of up to Rs 20,000 crore in the current year," the statement said, adding the total spending programme in the four months ending March was expected to be Rs 300,000 crore.
As part of efforts to boost the housing sector, the public sector banks would shortly announce a package for home loan borrowers in two categories -- up to Rs five lakh and between Rs 5-20 lakh, the statement said, adding that additional measures would be taken, as necessary, to promote an accelerated growth trajectory.
As a special gesture for the automobile sector, government departments would be allowed to take up replacement of vehicles within the allowed budget.
Attaching special significance to infrastructure development, the government authorised India Infrastructure Finance Co Ltd (IIFCL) to raise Rs 10,000 crore through tax- free bonds by March 2009 and said it would be permitted to raise further resources.
"In particular, these initiatives would support a PPP (Public-Private Partnership) programme of Rs 100,000 crore in the highways sector," it said.
Paying special attention to exports, the government decided to provide an interest subvention of two per cent up to March 2009 for pre and post-shipment export credit for labour-intensive exports like textiles, leather, marine products and SME sector. The concession is subject to a minimum rate of interest.
Besides, it would provide an additional Rs Rs 1,100 crore for full refund of terminal excise duty/CST and another Rs 350 crore for export incentive schemes and a back-up guarantee of Rs 350 crore to ECGC (Export Credit Guarantee Corporation) for providing guarantee for exports to difficult markets and products.
To boost collateral free lending to Micro and Small enterprises that are facing a credit crunch, the government doubled the current guarantee cover for loans to up to Rs one crore from the existing limit of Rs 50 lakh.
Besides, the lock in period for loans covered under the existing credit guarantee scheme will be reduced from 24 to 18 months, to encourage banks to cover more loans under the guarantee scheme.
These announcements for the MSE sector comes a day after RBI announced a refinance facility of Rs 7,000 crore for Small Industries Development Bank of India to facilitate the flow of credit to such industries.
As part of the stimulus package, textile sector, the largest provider of employment, would get an additional Rs 1,400 crore towards the entire backlog of Technology Upgradation Fund.
The statement also said that all items of handicrafts will be included under Vishesh Krishi and Gram Udyog Yojana.
Among other initiatives, the government has decided to completely lift import duty on Naphtha for use in the power sector while export duty on iron ore fines will be eliminated.
Via:E.T
NEW DELHI: The government today announced major tax cuts across the board to boost demand and allocated additional funds and incentives for exports, housing, textile and infrastructure to stimulate the economy, hit by the global financial crisis.
"The government has been concerned about the impact of global financial crisis on the Indian economy and a number of steps have been taken to deal with this problem," an official statement said.
The package, coming on the back of fresh monetary measures announced by the RBI yesterday, includes a four per cent cut in ad-valoram duty across the board, to boost additional spending, besides enhanced credit for exporters, along with a Rs 10,000 crore mop up for India Infrastructure Finance Company.
Import duty on Naptha for use in power sector as well as export duty on iron ore to be eliminated.
"In order to provide a contra-cyclical stimulus via plan expenditure, the government has decided to seek authorisation for additional plan expenditure of up to Rs 20,000 crore in the current year," the statement said, adding the total spending programme in the four months ending March was expected to be Rs 300,000 crore.
As part of efforts to boost the housing sector, the public sector banks would shortly announce a package for home loan borrowers in two categories -- up to Rs five lakh and between Rs 5-20 lakh, the statement said, adding that additional measures would be taken, as necessary, to promote an accelerated growth trajectory.
As a special gesture for the automobile sector, government departments would be allowed to take up replacement of vehicles within the allowed budget.
Attaching special significance to infrastructure development, the government authorised India Infrastructure Finance Co Ltd (IIFCL) to raise Rs 10,000 crore through tax- free bonds by March 2009 and said it would be permitted to raise further resources.
"In particular, these initiatives would support a PPP (Public-Private Partnership) programme of Rs 100,000 crore in the highways sector," it said.
Paying special attention to exports, the government decided to provide an interest subvention of two per cent up to March 2009 for pre and post-shipment export credit for labour-intensive exports like textiles, leather, marine products and SME sector. The concession is subject to a minimum rate of interest.
Besides, it would provide an additional Rs Rs 1,100 crore for full refund of terminal excise duty/CST and another Rs 350 crore for export incentive schemes and a back-up guarantee of Rs 350 crore to ECGC (Export Credit Guarantee Corporation) for providing guarantee for exports to difficult markets and products.
To boost collateral free lending to Micro and Small enterprises that are facing a credit crunch, the government doubled the current guarantee cover for loans to up to Rs one crore from the existing limit of Rs 50 lakh.
Besides, the lock in period for loans covered under the existing credit guarantee scheme will be reduced from 24 to 18 months, to encourage banks to cover more loans under the guarantee scheme.
These announcements for the MSE sector comes a day after RBI announced a refinance facility of Rs 7,000 crore for Small Industries Development Bank of India to facilitate the flow of credit to such industries.
As part of the stimulus package, textile sector, the largest provider of employment, would get an additional Rs 1,400 crore towards the entire backlog of Technology Upgradation Fund.
The statement also said that all items of handicrafts will be included under Vishesh Krishi and Gram Udyog Yojana.
Among other initiatives, the government has decided to completely lift import duty on Naphtha for use in the power sector while export duty on iron ore fines will be eliminated.
Via:E.T
Unitech to raise up to Rs 2,500 cr to retire debt partly
7 Dec 2008, 1201 hrs IST, PTI
NEW DELHI: Reeling under acute financial crunch, realty major Unitech today said it will mobilise up to Rs 2,500 crore through sale of some assets and equity to retire part
of its Rs 8,000 crore debt by March, 2009. "We are working on many options to raise funds," Unitech Chairman Ramesh Chandra said, adding it could be through sale of
some completed projects or offloading equity at project level to private equity funds.
"Debt is about Rs 8,000 crore. I feel that in another 4-5 months, we should be able to bring it to half. Disposal of assets could be anything between Rs 1,200-1,500 crore. Private equity will be another Rs 1,000 crore. And transfer of loans to telecom business will be about Rs 2,000 crore," Chandra told PTI in an interview.
Unitech, the country's second largest real estate firm, has forayed into telecom business and recently tied up with Norway-based Telenor to launch mobile services. Chandra pointed out that the company would have anyways dispose of its completed assets, but probably it would now be doing six months earlier.
Giving details about sale of properties, Chandra said the company would mainly sell completed or nearing completion hotels and office buildings. He also highlighted that the company had always planned to exit from hotel business after developing it.
"Hotels we anyway sell. In office, there are two choices, either you give it on lease or you sell it. So in current scenario, if you can sell it, that is better," Chandra said. Real estate industry is currently facing slowdown in demand due to credit crunch and high interest rates on housing loans.
via:E.T
NEW DELHI: Reeling under acute financial crunch, realty major Unitech today said it will mobilise up to Rs 2,500 crore through sale of some assets and equity to retire part
of its Rs 8,000 crore debt by March, 2009. "We are working on many options to raise funds," Unitech Chairman Ramesh Chandra said, adding it could be through sale of
some completed projects or offloading equity at project level to private equity funds.
"Debt is about Rs 8,000 crore. I feel that in another 4-5 months, we should be able to bring it to half. Disposal of assets could be anything between Rs 1,200-1,500 crore. Private equity will be another Rs 1,000 crore. And transfer of loans to telecom business will be about Rs 2,000 crore," Chandra told PTI in an interview.
Unitech, the country's second largest real estate firm, has forayed into telecom business and recently tied up with Norway-based Telenor to launch mobile services. Chandra pointed out that the company would have anyways dispose of its completed assets, but probably it would now be doing six months earlier.
Giving details about sale of properties, Chandra said the company would mainly sell completed or nearing completion hotels and office buildings. He also highlighted that the company had always planned to exit from hotel business after developing it.
"Hotels we anyway sell. In office, there are two choices, either you give it on lease or you sell it. So in current scenario, if you can sell it, that is better," Chandra said. Real estate industry is currently facing slowdown in demand due to credit crunch and high interest rates on housing loans.
via:E.T
Saturday, December 6, 2008
Zimbabwe to introduce 200 million dollar note
6 Dec 2008, 1516 hrs IST, AGENCIES
HARARE: Inflation-wracked Zimbabwe plans to introduce a 200 million dollar note just days after a 100 million dollar note came into circulation, the government announced on Saturday.
The 200 million dollar note, announced in a notice in the government gazette, will bring to 28 the number of notes put into circulation by the central bank this year alone, as the country struggles with the world's highest inflation rate of 231 million percent.
On Thursday the central bank introduced 100 million, 50 million and 10 million dollar notes while at the same time increasing withdrawal limits for individuals and companies.
The 100 million dollar note is worth only about 14 US dollars, and its value erodes by the day.
Cash can now only be withdrawn once a week from banks, according to the latest measures by the central bank.
Ordinary people can withdraw 100 million dollars a week while companies are permitted to withdraw 50 million dollars.
Prices of basic goods and services rose sharply on Thursday when the 100 million dollar note was introduced.
Long queues in banks and cash shortages are commonplace in Zimbabwe as people take hours to withdraw money which is still not enough to see them through the day.
The 100,000 banknote is worth only one US dollar on the widely-used parallel black market and is only half the amount needed to buy a loaf of bread.
Zimbabwe's political leaders are currently deadlocked over who should control key ministries in a power-sharing deal brokered by the Southern African Development Community (SADC) after March elections thrust the country into crisis.
Once the region's breadbasket, the country is facing widespread food shortages while cholera has killed 575 people, the UN said on Friday.
10 nations with abnormally high inflation
1) Zimbabwe – Over 1 million per cent
Weary Zimbabweans are facing a new wave of price increases that will put many basic goods even further out of their reach: A loaf of bread now costs what 12 new cars did a decade ago.
According to an AP report, independent finance houses said in an assessment recently that annual inflation rose in May 2008 to 1,063,572 per cent based on prices of a basket of basic foodstuffs. Economic analysts say unless the rate of inflation is slowed, annual inflation will likely reach about 5 million per cent by October.
A small pack of locally-produced coffee beans now cost just short of 1 billion Zimbabwe dollars. A decade ago, that sum would have bought 60 new cars.
2) Burma – 40%
Burma comes in second behind Zimbabwe with its inflation rate hovering around 40 per cent. It has been termed a ‘least developed country’ and continues to struggle as one of the poorest countries in Asia.
According to 2007 estimates, 32.7 per cent of the Burmese people live in poverty. Per capita GDP in Burma is $1,900 compared with $8,000 in neighboring Thailand, $26,400 in South Korea, and $33,800 in Japan.
3) Iran – 25.3%
Iran’s annual inflation rate rose to 25.3 per cent in May compared with the previous month, when it reached 24.2 per cent, the central bank said. The statistics highlight the economic problems facing President Mahmoud Ahmadinejad’s government, under pressure from many lawmakers, media and the public over its failure to rein in the strength of inflation in the world’s fourth-largest oil producer. The central bank said that prices rose by 1.7 per cent in the Iranian month to May 20, pushing up the year-on-year rate to more than 25 per cent, according to a Reuters report.
Monthly prices increased 3.1 per cent the previous month, to April 19, when the year-on-year rate was 24.2 per cent. The year-on-year rate was 22.5 per cent in March, showing a steadily climbing trend. Iran’s inflation rate was about 12 per cent in mid-2005, when the conservative president came to power pledging to share Iran’s oil wealth more fairly.
4) Vietnam – 25.2%
Vietnam’s ruling Communist Party is facing one of its biggest challenges with yearly inflation in double-digits for seven consecutive months, hitting 25.2 per cent in May.
Despite authorities’ efforts to control inflation, including interest rate hikes, consumer prices were 4 percentage points higher than last month, according to the Government Statistics Office, news agency AP reported.
Vietnam’s inflation rate is among the highest in Asia, and higher food prices in particular are hurting the country’s poor. Soaring imports have tripled the trade deficit this year to $14.4 billion, while the Vietnamese stock market has lost 60 per cent, making it the world’s worst-performing market
5) Egypt – 21%
The Egyptian government has reported that inflation rates in the country rose to over 21 per cent in May, as a direct result of rising prices that have worsened the North African nation’s food crisis.
The official news agency, MENA, quoted an Egyptian government official as saying that inflation in rural areas had "increased even higher to 22.9 per cent" for the month, raising concerns over widespread discontent.
“The May figures are in stark contrast to the already high inflation rate reported in March of around 14 percent. This does not bode well for approximately 20 percent of the nations almost 80 million people, who live below the poverty line of US$2 per day,” the official was quoted as saying.
6) Pakistan – 19.27%
Inflation in Pakistan reached all-time high of 19.27 per cent in May, mainly because of growing prices of food items.
Analysts however predict the average inflation will be closing at 12 per cent or slightly above that in the fiscal year, which will end June 30, 2008.
Data released by the Federal Bureau of Statistics showed that food inflation, measured through the Consumer Price Index (CPI), swelled to record 28.48 per cent in May, highest in over three decades.
7) Latvia – 17.9%
Latvian inflation accelerated again in May, with the annual inflation rate rising to 17.9 per cent, the highest in the 27-nation EU.
Despite the fact that activity is slowing – Latvia’s economy expanded a revised 3.3 per cent in the first quarter, compared with 8 per cent in the previous three-month period.
Food prices, the biggest item in the consumer basket, rose an annual 21.6 per cent, but other areas like education (20.5%) and hotels and catering (23.2%) are going up at a rapid clip, and there is no short term sign of all this abating.
8) Iraq – 16%
Higher food and energy costs lifted Iraq’s inflation rate to 16 per cent in April this year, still well below the rate recorded in 2007.
According to media reports, despite the record price of oil which was trading at 133 dollars a barrel recently, the oil-rich nation has not benefited from recent price rises because of corruption and security concerns.
Iraq’s Central Bank governor Sinan al-Shibibi said the bank would absorb the inflation rate by appreciating the Iraqi dinar against the US dollar and maintaining high interest rates which currently stand at 17 per cent.
The figures are still considerably lower than in 2007, when the inflation rate reached almost 32 per cent. In 2006 the rate stood at almost 70 per cent.
9) Bulgaria - 15%
The annual inflation in Bulgaria reached 15 per cent in May 2008, compared to the comparative period last vear, a reading that in the last 10 years trails only the 18.8 per cent clocked in May 1998, the National Statistical Institute reported.
The inflation for the period January-May 2008 compared to the same period in 2007 stood at 13.9 per cent. The overall increase in prices compared to April 2008 is reported to be 0.5 per cent.
10) Qatar – 14.75%
Annual inflation in Gulf oil producer Qatar rose for a third quarter running in March to a near record of 14.75 per cent, the country’s state Planning Council said on June 2, 2008, amid a surge in food and commodity prices, and rents.
The Consumer Price Index reached 166.87 points on March 31, the council said on its website, without giving year-earlier data. The index was at 145.42 points on March 31 last year, according to earlier Planning Council figures.
Inflation at the end of December was 13.74 per cent. The last time it was higher was on March 31 last year when it was 14.81 per cent.
via: E.T
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