US Offers $6 Billion to Support Auto Lender GMAC

The Bush administration on Monday expanded its bailout of the U.S. auto industry, saying it was buying $5 billion in equity in auto and mortgage finance company GMAC and increasing a loan to General Motors by $1 billion.
CNBC.com
The action was the latest in a lengthy series of emergency government moves aimed at easing the worst credit crisis since the 1930s and limiting the severity of a year-long recession.
The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 percent dividend from GMAC as part of an effort to ensure the solvency of a company considered crucial to GM's survival.
It also said it would lend up to $1 billion to fund GM's purchase of equity in support of GMAC's reorganization as a bank holding company. That loan would come on top of assistance extended to the No. 1 U.S. automaker earlier this month. Sales Decline
The government agreed on Dec. 19 to rescue GM and Chrysler LLC with up to $17.4 billion in loans to stave off a collapse that would have cost hundreds of thousands of jobs and dealt a severe blow to an economy already in recession. Of that amount, $13.4 billion was earmarked for GM.
President George W. Bush said at the time that it would be irresponsible to let the automakers die. The White House moved on its own after Republicans in the Democratic-controlled Congress blocked a deal to provide emergency funds.
U.S. auto sales have plunged to 25-year lows in recent months and are not expected to recover substantially until after 2009 under the most optimistic of outlooks. The recent steep drop in sales, which automakers and analysts have linked to the credit crisis that took hold in September, has pushed both GM and its smaller rival Chrysler to the brink of collapse.
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The Treasury said it was dipping into a $700 billion financial bailout fund approved by Congress in early October to buy the equity in GMAC and extend the loan to GM.
GMAC won Federal Reserve approval to become a bank holding company last week, a move intended to give it freer access to emergency government funds and help it avoid bankruptcy. GMAC has had to raise additional capital to achieve bank holding company status.
The company, co-owned by GM
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and private equity firm Cerberus, has lost $7.9 billion over the last five quarters as the credit crunch raised its borrowing costs sharply and the value of many of its assets plunged. Dividend Restrictions
GMAC agreed to restrictions on dividend payments and executive pay as part of the equity injection. The bonus pool available to the top 25 executives was cut by 40 percent from 2007 levels, a Treasury official told reporters on a conference call.
GMAC said in a statement that GM and a Cerberus management affiliate have agreed to buy $1.25 billion in new GMAC shares. Previously announced separate exchange and cash tender offers have been satisfied, it said.
Representatives of GM and Cerberus could not be reached for comment.

Indian economy remains 2nd fastest growing in the world

The Indian economy continues to remain the second-fastest growing economy in the world.

``India`s economic fundamentals are quite robust and its economy remains the second-fastest growing one in the world``, said Suresh Tendulkar, chairman, prime minister`s economic advisory council`s (PMEAC).

India is not experiencing a recession as other advanced economies and its economy would not be affected to the same extent as some other emerging Asian economies, he said.

On micro, small and medium enterprises (MSMEs), Tendulkar said that the present economic slowdown would test the strength of the sector.

``Rising interest rates in the recent past has further accentuated the credit crunch for MSME entrepreneurs`` he added.

According to him, the financial meltdown in advanced economies has been very serious.

He described the foreign exchange reserve position in the country as `comfortable` despite foreign institutional investors (FII) outflows triggering some depletion.

The current account deficit would be well within limits, but it might be wider than in the earlier years, he said.

Thanks to http://www.myiris.com

Markets may remain volatile on F and O expiry

Alex Mathew, head - research centre, Geojit Financial Services, commenting on the market performance said, ``The markets opened weak on the back of weak cues from the global arena and traded weak all through the day amid volatility and closed for the day in red. The markets made many intraday recovery on the back of news that the Central Bank may reduce the interest rate further but could not sustain at higher levels. The US index futures were trading lower lending literally no support to the market. In the afternoon the markets slipped further to close near to the days low. The rollover figures were not so encouraging and it was around 48% showing less interest shown by the investors to rollover their positions to next month.``

He said, ``The major sectorial losers of the day on BSE were Consumer Durable down 5.81%, Realty down 4.84%, Bankex down 3.76%, Capital Goods down 3.61% and Metal down 3.07% leaving no one on the gainers side. The gainers on Nifty were RCOM, Ambuja Cement, HeroHonda, ONGC and BPCL while the losers of the day were Satyam, Unitech, Tata Motors, HCLTech, Sterlite, SAIL and GAIL.``

``Outlook for the market remains volatile as tomorrow is the December F&O contract expiry with Nifty having support at 2,950 and 2,900 while the resistance at 3,036 and 3075``, he added.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Thanks to http://www.myiris.com/newsCentre/storyShownew_opt.php?fileR=20081223173834043&dir=2008/12/23

Infotech Enterprises allots equity shares

The committee of Infotech Enterprises has allotted 27,24,000 equity shares of Rs 5 each at a premium of Rs 355 per share toGA Global Investments, upon exercise of the option to convert 27,24,000 compulsorily convertible preference shares into a equal number of equity shares.

The company made this announcement after nthe tradig hours on 09 December 2008.

Powered by Capital Market - Live News

Thanks to http://www.sharekhan.com

Indian Stock Market Commentary

Topic :- Opening Note

Weekly newsletter updated.For today market to remain volatile.Higher levels should be used as an opportunity to exit. For today Nifty spot above if manages to
trade and sustain above 2740 then market can see some recovery in initial trade. Nifty spot below 2700 can see some profit booking in initial trade.
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Topic :- Time:10.10 A.M

Nifty support is at 2815 (spot) level.If Nifty breaks this level and does not above these levels then we can see some profit booking in the market which can take Nifty to 2790-2760 levels. If Nifty Sustain above 2815 level then we can see some recovery in the market till 2830-2850-2870 levels soon.

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Topic :- Time:11.12 A.M

Nifty spot below 2788 can see some more profit booking.Recovery expected only above 2800 level.
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Topic :- Time:11.55 A.M

Market to remain volatile. For now Nifty spot below 2790 can see some more profit booking and Nifty spot above 2805 can see some recovery.Dont expect any major movement in the market right now.

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Topic :- Time:-12:55 Pm

Update:

Tomorrow the capital market will be Remain closed for trading on Tuesday 09th December, 2008 on Account of BAKRI-ID.

www.ShareTipsInfo.com
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Topic :- Time:1.10 P.M

Nifty spot above 2822 can see some more recovery.Nifty spot below 2810 can see some profit booking.One should wait and watch until market take clear direction.

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Read more.................http://www.sharetipsinfo.com

Asian stock settles positive

Asian stocks climbed for the third day, as investors predicted stimulus packages from the governments will drive growth of the global economy and earnings.

Japanese benchmark index Nikkei gained 66.82 points, or 66.82%, to end at 8,395.87. Hong Kong`s Hang Seng index declined 291.65 points, or 291.65%, to settle at 14,753.22. China`s Shanghai Composite slipped 53.03 points, or 53.03%, to close at 2,037.74.

Taiwan`s Taiex index advanced 54.33 points, or 54.33%, to settle at 4,472.66. South Korea`s Kospi index climbed 0.79 points, or 0.79%, to end at 1,105.84. Singapore`s Straits Times increased 95.41 points, or 95.41%, to close at 1,754.58.

Thanks to http://www.myiris.com

Top-10 firms lose Rs 1.5 trillion; RIL worst hit

MUMBAI: The bloodbath on the bourses has wiped off a whopping Rs 1.50 trillion from market valuations of country's of 10 most valued firms in the past week, with Reliance Industries suffering the worst blow. The meltdown at the bourse washed away a big chunk from the market valuation of corporate behemoth Reliance Industries even as others like IT major Infosys Technologies and diversified conglomerate ITC Ltd managed to swim against the tide. The combined market cap of the elite club saw an erosion of Rs 1,50,730 crore in the past week, dropping to Rs 8,94,000 crore from the previous week's Rs 10,44,000 crore. With the market going for a free-fall last week, the country's most valued firm Reliance Industries lost Rs 45,600 crore in its market value dipping below the crucial Rs 2,00,000-crore mark. RIL, which announced its second quarter results last week, registered its profit up by 7.4 per cent at Rs 4,122 crore, while its revenue rose by 39.4 per cent to Rs 44,938 crore. Shares of RIL plummeted for three days in row last week to settle at Rs 1,015.50 on BSE on Friday, wiping off as much as Rs 29,038 crore or about 16 per cent of its market value in a single day.

Can investing in land assure good returns in future?

The lucrative long-term return on land plots may tempt you to buy, even at a time when the real estate sector is reeling under the impact of a slowdown. In such a market scenario, can investing in land still assure you of good returns in the future? What is the best way to invest in this precious asset and what are the crucial determinants to assess your prospective buy?

There are various ways to invest in land. Global real estate consultancy Jones Lang LaSalle Meghraj (JLLM) shares some key factors that are necessary to consider. “Identifying a piece of land that is in close or reasonable proximity to future market drivers is important.

Next, one should inquire into the legal status of the land and establish if it is for sale. Finally, locate the owners and make a purchase proposal. For maximum future returns, its is important to make one’s investment while entry costs are low,” says Anuj Puri, chairman and country head of JLLM.

One must especially keep in mind certain aspects to avoid any legal hassles later. For instance, land may be under litigation or may be earmarked for a government project. It could be categorised as forest land or could even be in a Coastal Regulation Zone.

It may also lack basic facilities such as water and power supply or fall in a politically or socially challenged sector. Any or a combination of these factors can subtract or nullify the investment potential of land. Hence all negative possibilities should be covered before purchase.

Another aspect which cannot be neglected is the paperwork needed. A number of documents are necessary in land purchase and need to be checked. The title deed (a legal document proving a person’s right to property), the encumbrance certificate (which proves that the land is not under some sort of legal dispute), the release certificate (in case the land was previously pledged to someone else), the surveyor’s report (to establish its exact dimensions) and — if the owner is an NRI — the power of attorney that gives his representative the legal right to act on the NRI’s behalf, are all significant documents that should be given careful consideration.

But is it profitable to invest in land in the current market situation? Some advise caution. “The current economic recession is leading to unprofitable business for everyone, whether it be a company or an investor. The downturn is obviously not the right time to invest in property as it is not going to reap any positive or profitable results. To make a profitable deal, the investor should wait for at least 2-4 years,” advises Vijay Jindal, CMD of SVP Builders India.

More :- economictimes.indiatimes.com

Sensex at 8.7K: Thirty stocks that bore the brunt

Reliance Infrastructure










Jaiprakash Associates

RIL stock skids 66% in the downturn

CHENNAI: From August '07 to January '08 when stocks rallied from strength to strength, Reliance Industries was the catalyst for the the 7,000-point sensex rally. But, ever since the fall started since January 10, it is again Reliance, according to data, may be the chief reason for bringing the benchmark down in the quicker and sharper downturn.
The world may have changed for Indian stocks and Sensex may have come down substantially but the the most influential stock in the 30-share bellwether index -Reliance still remains the match-maker. While the stock price has corrected by Rs 2,000 a share, Sensex came down by 12,500 points.

Extrapolating this, it is fair to say that for every one rupee shed by Reliance stock, Sensex has fallen by close to 6 points, according to analysts. When sensex went up by 49% in just 7 months (August to January) Reliance, which carried a weightage of 15.3% in early January, witnessed its stock price outperform the benchmark index and raised by 73%.

While the DLF stock went up by over 90% in the same period, the real estate company carried a meagre sensex weightage of 2%.

The impact of Reliance's rise is significant on Sensex as blue-chip firms SBI, ITC, ADAG-controlled Reliance Comm and ONGC cumulatively held a weightage of close to Reliance"s 15% in January. "The Reliance stock is pivotal to sensex's fortunes. There has hardly been any day, when Reliance has fallen and has not pulled down sensex alongwith it. Nobody remains unaffected when the big boy falls," said a large broker at Bombay Stock Exchange.

During the downturn, the Reliance stock has fallen by 66%, again outperforming Sensex which has shed 59% in the same period.

Although Sensex constituents such as RCom, Larsen & Toubro and DLF have fallen by 75-80% in the same period, which is sharper than Reliance, the three stocks have a cumulative weightage of just under 10% (which is less than Reliance's 12% influence), data shows.

One half of all Sensex companies taken together i.e around 15 stocks have just the same influence that a single scrip has: Reliance. DLF may have corrected by over 80% but Reliance's freefloat market cap is 14 times more than it. "Sensex is calculated under free-float market capitalisation method.

This means that the influence of closely-held companies such as DLF on the index is preventing even if their stock price fall is much sharper," the research head of a foreign brokerage explained.

Repo boost: Experts hail move, want further policy steps

Experts unanimously hailed the Reserve Bank’s repo rate cut by 100 basis point as positive, but added that the impact on capital markets would not be much. Most experts felt that confidence in the market was low and decisions needed to be taken to counter short-selling and volatility.


The RBI today cut the repo rate cut — the first since 2003 — in a bid to infuse liquidity into the system. (Read: RBI cuts repo rate) After the announcement, the Sensex rose about 500 points but negated the rise later in the day to end 247 points up.


Terming the cut as a prompt move carried out in the best interests in the economy, Deven Choksey of KR Choksey Securities said this is the beginning of a cut and we may see interest rates coming down gradually.


Ajay Bagga, CEO, Lotus India Asset Management Company, feels the rate cut was a big positive that surprised the market. “After nearly three years, this is the first rate cut. It signals the resolve of the regulators to move to a pro-growth stance.”


Shashank Khade, VP, Portfolio Management Services, Kotak Securities, felt the rate cut was expected even as it came a little ahead of time. “I am not sure whether the equity markets will really have too much to cheer immediately. Given the way the volatility in the markets has been, there has to be a much higher reward to actually invest in equity.”


What ails markets now?

Ambareesh Baliga of Karvy Stock Broking said the markets have their own set of problems. “There is a lack of confidence, which will not come just because of a CRR or a repo rate cut.”

Read more........... http://www.moneycontrol.com/

Mkt to bottom at 8,800-9,800: ICICI Securities

Pankaj Pandey, Head - Research, ICICI Securities said he expects the markets to bottom at about 8,800-9,800. Going forward, Pandey does not see earnings driving the markets.

He feels investors should have a portfolio of about 40% in equities, about 20-25% in cash and the balance in fixed deposits. Pandey is bullish on PNB, Axis Bank, Indian Overseas Bank, PNB, NTPC, Power Grid, Infosys and Satyam.

Here is a verbatim transcript of the exclusive interview with Pankaj Pandey on CNBC-TV18. Also watch the accompanying video.


Q: What exactly are you advising investors at this juncture? Do you think that we may be at least close to the last 5-10% of the bottom?

A: We expect market to bottom at 8,800-9,800. After breaking the 10,000 level, from an eight-year cycle perspective we expect, about 55-58% correction. So we feel that we are closer to the bottom range. We advise investors to have a portfolio of about 40% in equities, about 20-25% in cash and the balance in FD.

Q: What have you set your eye on this results season?

A: Results, I think have more or less been a mixed bag across the sectors. second quarter may not have a significant bearing on the market because global cues continue to be bad. Going forward as well, we don’t expect results to drive the markets.

Globally as a thumb rule, I think, contraction of about 10% in US GDP can happen. Whether that happens over a period of three quarters or six quarters remains to be seen. So, we anticipate that nothing major is likely to happen until the second half of 2009. A survey by The Economist says that about three quarters is the most moderate view in terms of the contraction in GDP and probably the most pessimistic view is about 18 months.

Read more............. http://www.moneycontrol.com/

Market crash: Tips to cut losses

THE market's blows are only getting harder.

The bad news is that the worst may not be over yet. Amidst all this turbulence, only one thing can save you: The right advice.

Here’s how you can limit the damage, straight from wealth's experts.

Scenario 1: I invested in the markets for the short term; what should I do now?
Right now, the markets are driven by global sentiment. And, financial planner Arvind Rao reckons that it may take up to the fourth quarter of 2009 for the global market to pull up. On the domestic front too, things may look brighter only in the third or fourth quarter of 2009. "This is mainly because of the huge input costs and high interest rates as of now, " he says.

In such a scenario, you have 2 options:
Option 1: If you are hard pressed for money, you have no choice but to withdraw.

PV Subramanyam, financial domain trainer, says, “If you need money soon, say in a year or two, it is better to sell now even if that means booking losses. There’s no way of predicting how the markets would behave.”

Option 2: Sandeep Shanbhag, investment expert and Director, Wonderland Consultants, says, “If you initially invested for the short term but can weather the storm, then wait, provided you have fundamentally good stocks. However, if you need funds, then exit as early as possible and treat this as a mistake not to be repeated.”

Caution: Do not play the markets on a short term basis simply because of the looming uncertainty.

Read more...... www.Moneycontrol.com

Satyam cuts FY09 rev guidance due to forex fluctuation

Satyam Computer has announced its Q2 FY09 numbers. The company has reported a growth of 6.05% in net profit of Rs 580.85 crore as against Rs 547.70 crore, QoQ. Revenues were up by 7.6% at Rs 2819.29 crore versus Rs 2620.83 crore. Satyam has met its second quarter guidance; revenues went up by 2.3% to USD 652 million while guidance was USD 645 – 651.9 million. EPS stood at $0.39 per share, wherein also the company met its guidance.Rupee guidance changed only for rupee move from 43- 47 per dollar.

Satyam has cut its FY09 revenue dollar guidance to USD 2.55-2.59 billion versus USD 2.65-2.69 billion. Ramalinga Raju said that 3% was due to cross currency movement and 2% on account of reduction in volumes that he expects.

The Satyam Management including Ramalinga Raju, Founder and Chairman, Ram Mynampati, President, CHB and Srinivas Vadlamani, CFO spoke in an exclusive interview with CNBC-TV18.

The management said that the company’s dollar guidance was impacted 3% due to cross currency and 2% due to business conditions. It expects a 100-150 bps expansion in margins, which has helped in enhancing the dollar EPS guidance. It added that there had been some reduction in licences in ERP and said it was premature to quantify medium term prospects. The gross employee additions guidance of the company has been scaled down to 10000 from 14000-15000.

The management informed CNBC-TV18 that the company’s legal dispute with Upaid was status-quo and said that the hearing was slated for next year. It feels that it is too early to quantify the impact of the BFSI consolidation in the US.


Ramalinga Raju feels the near-term environment remains challenging. He added that forex fluctuations have impacted their US GAAP revenues by 3%. He does not see a dramatic slowdown and added that clients were circumspect over the 2009 budgets.

Here is a verbatim transcript of the exclusive interview with the Satyam Management on CNBC-TV18. Also watch the accompanying video.

Q: Could you start by explaining your dollar guidance, the revenue guidance- why has that been lowered? How much of it is because of cross currency issues and how much of it is because of the tough environment that you see around you?

Raju: It is a combination of factors. We have enhanced our guidance at the consolidated numbers at rupee level from 34% to about 35.4%.

At the dollar level we have reduced our revenue guidance from 26% to 21% at the upper end of the guidance. About 3% of that can be explained by the cross currency movement and 2% on account of reduction in volumes that we expect.

So under the current circumstances we believe we have done well for the quarter and we feel this is number that we are able to give confidently.


Read more......... http://www.moneycontrol.com/

ICICI Bank has healthy capital position: Chanda Kochhar

Chanda Kochhar, Joint MD and CFO, ICICI Bank, said India’s largest private sector bank has a very healthy capital position, “In the past few days there have been rumours being circulated about ICICI Bank’s financial health in certain parts of the country. These rumours are baseless. We wanted to clarify that ICICI Bank has a very healthy capital position.”

Kochhar said ICICI Bank is the second largest bank in India with an asset base of more than Rs 4,84,000 crore. “We have been proactively raising capital and have a net worth of Rs 47,000 crore. This gives us capital adequacy of 13.4%. The regulatory requirement is 9%, which means it is at least 150% more than what is required. This is one of the highest capital adequacy positions among large Indian banks. This indicates a very strong capital position and comfortable levels of leverage at which ICICI Bank operates.”



She said the bank has already clarified about its investments in the UK subsidiary. “About 98% of them are in investment grade and above category. We have also clarified that the capital adequacy not only of ICICI Bank but also of the subsidiaries are very comfortable. Today, the Reserve Bank also clarified that ICICI Bank and its subsidiaries abroad are well and sufficiently capitalized. They also clarified that we have enough liquidity to meet the requirements of our depositors.”



The Finance Minister has also clarified that the Indian banking system is well capitalized and well regulated. “In that context, I would only like to reiterate that the rumours are quite baseless. I would like to assure all our stakeholders including depositors, and investors that we continue to have a healthy capital position and financial position. We will be able to meet everybody’s requirement and there is no cause to worry at all.”

source: http://www.moneycontrol.com/

Liquidity adequate, global exposure small: ICICI Bk

Chanda Kochhar, Joint MD and CFO, ICICI Bank, said the bank has adequate rupee and global liquidity of Rs 12,000 crore. "We have no international investments, only loans on our balance sheet. We do not use rupee liquidity to fund global activities."


Kochhar said the bank has not seen a scale-down in deposit growths. "The focus this year is on current and savings accounts."



According to her, the bank has not seen an increase in NPAs, or Non Performing Assets, as the corporate sector is holding up. "About 90% of total loans are India related."

She feels the current investment pipeline is strong enough to ensure a 7.5% GDP growth.

Commenting on the banks' UK operations, Kochhar said exposures in the market there are very small given our size and profitability. "NPAs at 0% in UK subsidiary. Over 90% of investment in UK market are to companies with atleast 'A' rating."

She said there is a cash collateral of USD 45 million from the Bumi Group. "The net loan stands at USD 100 million for which there is adequate cover."

Here is a verbatim transcript of the exclusive interview with Chanda Kochhar on CNBC-TV18. Also watch the accompanying video.

Q: You have made four clarifications in the last fortnight or so. The RBI has clarified your liquidity position, but your stock is down 25% today. Is there any reason that you can think of why the stock market is hammering your stock down?

A: We have always believed that we would concentrate on our performance. The other thing we would do as a responsible bank is talk about facts. The rest of the movement if it happens is on the basis of rumours – we are on the point where we have to concentrate on our performance and on facts.

Q: You have actually spoken quite a bit about your liquidity position etc, obviously the market is worried about something. Are there any issues which might affect your performance or your balance sheets significantly in the foreseeable future – something that you’ve not had reason to report yet?

A: One of the things – the rumour that has been going around is about liquidity and as mentioned even in the morning that we have adequate and more than adequate rupee liquidity. We also have adequate global liquidity worth more than Rs 12,000 crore and also we do not use rupee liquidity to fund the growth of our international operations. So that’s one clear statement of fact and every rumour going around it which is not true has to be kind of discounted.

Secondly, in the recent past people have had questions on our international book on which we have clarified in the past. So I again clarify that in the ICICI Bank balance sheet we have no international investments as such. There are only loans which are primarily to Indian companies for their global operations. While they are foreign currency loans, they are related to the global operations on the Indian companies. As far as our UK subsidiary is concerned, yes, we do have certain amount of investments.


We have more than clarified about what the size of those investments is. Also more than 90% of those investments are still A minus and above ratings and given the context of our size of the group, having a balance sheet of Rs 4,84,000 crore and a net worth of Rs 47,000 crore – these exposures are very, very small. We have to look at them in that context. So if people have fears around that, I am only re-clarifying that these are small exposures given our size and our profitability.


Q: Have you seen a sharp increase in NPAs for ICICI Bank that you might report this quarter or in the next few?


A: No. The NPA levels continue to remain where they have been even in the last quarter. Even as we report earnings for Q2, you will not see anything untoward as far as the NPAs are concerned. In that context, even our UK subsidiary – as far as its entire loans and advances book is concerned there is actually zero NPA there.



Q: The other set of rumours doing the rounds is ICICI has lent to international companies, very clean loans at that time when they were lent with adequate collateral in terms of shares. But those shares have fallen and therefore some of those loans are now backed by inadequate collateral, and one of the names being mentioned is the Bumi Group. Are there generally fears that loans lent to global companies either from your global branches or from the Indian units are now being threatened that the stock market has fallen and not for any other reason?

A: Our total loans and advances even globally, 90% is India related. So, first of all global loans are very small even if a few of the loans exist.



The total amount of loan that Bumi Group loan has borrowed is USD 150 million. We have cash collateral against it to the extent of USD 45 million. So, the net loan amount is close to USD 100 million. Against that, we have more than adequate cover.



So, the non-India related loans are very few transactions – less than 10% of our global loans and advances, maybe a few transactions again which in some way or the other are related to India because again this is a company that exports a lot of coal to India and there is a whole lot of Indian linkage in terms of people buying coal from this company into India.



We have adequate security not just in the form of shares or other security, but in the form of pure cash collateral. Also, this is a company which has EBITDA of more than USD 500 million. So, there are underlying cash flows, there are other forms of securities, and we have a cash collateral sitting against it.


Read more........ http://www.moneycontrol.com/

RBI cuts CRR by 150 bps

In an anticipated move, the Reserve Bank of India, or RBI, has cut the cash reserve ratio, or CRR, by 150 basis points to 7.5% with effect from tomorrow in a bid to infuse liquidity into the markets.

On October 6, the RBI had cut the CRR by 50 bps to 8.5%. Today's 150-bps cut includes October 11's cut. The cut will inject liquidity into the system to the tune of Rs 60,000 crore.

Nilesh Shah of Envision Capital said, “The CRR cut is definitely a positive move, which is going to soothe some liquidity fears. The stock market also needs liquidity and this (the rate cut) will help to some extent. Whether this is going to help us beyond a day or beyond an intra-day basis is something that remains to be seen.”

“Directionally, the CRR cut is a positive move that helps the banking system, helps the overall economy and will probably help the market in short-term or intra-day,” Shah added.

The announcement came close on the heels of a sharp fall of over 1,000 points on the Sensex on Friday morning amid cues from falling global markets. Soon after the announcement, the Sensex recovered a bit, before falling again later.

Udayan Mukherjee, Managing Editor, CNBC-TV18, said, “The announcement will get gobbled up, or maybe prompt or induce a bit of short covering with the market going up.”

Mukherjee said that it was a welcome move but added he didn’t see it affecting the stock market substantially. “Of course, it aids the money market and injects a bit of liquidity to the system — 150 bps is a fairly meaningful chunk of money coming in,” he said, adding that from a stock-market perspective, the cut would produce some kind of positive sentiment for a short while, "but the problems of the stock market are different."

Finance Minister P Chidambaram also issued a statement on the CRR cut and welcomed the RBI's decision.

source: http://www.moneycontrol.com

US markets end lower, Dow down 157 pts

Wall Street capped its worst week in seven years
with a late sell off as traders briefly celebrated the house's approval of the Wall
Street bailout bill and then sold their positions ahead of the weekend. Anxiety
in fact hitting the markets with the VIX topping 45.

Stocks fell even after US President Bush signed the bailout package. Unemployment
report showed 1,59,000 people lost their jobs in Sep. Construction,
manufacturing & retail shed maximum jobs while healthcare & govt added workers.

In commodity markets crude was little changed amid skepticism that the bailout package will keep the US from falling into a recession, curbing demand.

Dow Jones dropped 157 points at 10325.38, S&P
down 15.05 points at 1099.15 and Nasdaq slid 29.33 points to 1947.39.

A look at how the Indian ADRs performed:

Name Infosys Sify Rediff.com India Satyam Wipro ICICI Bank HDFC Bank MTNL Tata Comm Dr Reddy's Lab Tata Motors Patni Computer Sterlite Ind

Symbol INFY SIFY REDF SAY WIT IBN HDB MTE TCL RDY TTM PTI SLT

Price 29.58 1.89 3.85 15.04 9.09 22.79 86.00 3.92 19.48 10.80 7.13 7.45 7.64

Change -1.00 0.07 -0.15 -0.56 0.16 -1.71 -0.50 -0.02 -1.66 -0.21 -0.13 -0.30 -0.57

Change% -3.27% 3.85% -3.75% -3.59% 1.79% -6.98% -0.58% -0.76% -7.85% -1.91% -1.79% -3.87% -6.94%

Volume 3,733,951 54,811 44,186 1,648,255 620,307 3,599,310 315,579 54,338 207,896 182,935 803,551 30,873 1,511,552

High 31.59 1.92 4.04 16.94 9.98 23.50 91.48 4.18 20.83 11.55 7.48 7.73 8.40

Low 29.56 1.76 3.82 15.01 8.70 22.05 83.11 3.90 18.62 10.80 7.01 7.37 7.53

Sharekhan puts 'buy' on Balaji Telefilms; target Rs 268

MUMBAI: Sharekhan has maintained ‘buy’ on Balaji Telefilms for a target price of Rs 268. The company has denied any plans to launch a Hindi general entertainment channel, dismissing the media reports on the company's GEC plans as pure speculation.

Sharekhan opines that the launch of a Hindi general entertainment channel in the current cluttered and highly competitive scenario will have severe financial implications for the company and also affect its core business of television content. Hence, the brokerage is inclined to believe that the reports of the launch of a general entertainment channel by the company are mere speculation.

The company has launched a new show, ‘Kootukari’, on Surya TV. Earlier ‘Kalyani’, another of its show on Surya TV, had gone off air in mid July 2008. Balaji Television will be offered additional slots on various channels of Sun Network, which will help it, increase the number of programmes under the sponsored segment.

Sharekhan’s interaction with the company's management suggests that the maximum number of programmes that could be launched in the sponsored category can go up to eight against the current four shows. However, despite an increase in the sponsored programming hours, the contribution of the sponsored content business to the company's top line and bottom line shall remain relatively small.

The brokerage has understood that no further development has taken place on the proposed stake sale by STAR. The promoters of Balaji Televisions had been given 240 days (ending April 2009) to buy out STAR's 25.99 per cent stake in the company at Rs 190 per share. Considering the quantum of the amount involved (Rs322 crore), Sharekhan expects the promoters to rope in financial/strategic partners which might lead to an open offer. The open offer would be a trigger for the stock.

Sharekhan’s outlook on the television content business of Balaji Television remains positive, as the company is a scaleable player in a non-scaleable business. However, the near-term profitability of Balaji television would be affected by a drop in the realisations due to the end of the company's exclusivity arrangement with STAR and the going off air of one of its popular shows, ‘Kahani Ghar Ghar Kii’.

At the market price of Rs 148.7, the stock trades at 7.5x FY2010E earnings per share (EPS) of Rs 19.9.
thanks to: economictimes.indiatimes.com

Should Apple lose sleep over Google phone?

In the 15 months since it introduced the first iPhone, Apple has radically changed our expectations for mobile phones. But the rest of the industry isn't standing still. We're likely to see a fresh round of innovation as T-Mobile rolls out the first handset based on Google's Android operating system. And Research In Motion is fiercely defending its mobile e-mail turf with very good new products. Of the two, outsider Google faces the tougher challenge. But based on a preliminary look at the T-Mobile G1, announced on Sept. 23, launching in the U.S. and Europe in late October, I'd say it has a shot.

Apple set this whole competition in motion by building a single, excellent phone within an ecosystem that it controls totally, including the right to approve all third-party software. In contrast, Google is pushing an open platform, meaning any handset manufacturer can design hardware that runs Android. The closest relative to Android is Windows Mobile, which remains awkward to use after a decade of tweaking by Microsoft.

I spent only about an hour with the G1 ($180 with two-year contract; unlimited data plans start at $25), which is co-branded by Google and handset maker HTC. Disappointingly, the phone is a bit thick and heavy. The screen slides up to reveal a keyboard, but the way the keys are recessed between raised areas on either side makes for slightly uncomfortable typing. And while the big touchscreen is nice, you can't resize objects simply by pinching or stretching them with your fingers. Once you get used to this trick on the iPhone, you expect it on every handset.


The Android software is far more interesting than the G1 hardware, in part because the developers tried to tear down the walls that divide applications. Other mobile-phone operating systems get you only some of the way to this goal. On a Windows Mobile handset or an iPhone, if you click on a Web address in an e-mail message, the phone opens a Web page in a browser. Click on a phone number in a Web page, and the phone usually dials it. But a task as simple as copying text from a Web page and pasting it into an e-mail is difficult to impossible on handsets.

Android tries to fix this by organizing activities in terms of users' needs and desires rather than predetermined programs. In a sense you are always in a browser, even when it doesn't look like it. Not surprisingly for a product designed by Google, search is central: If you start typing while browsing the Web or looking at a picture, Android will search the phone contents and the Web based on the text. This instant search could prove to be either extremely helpful or really annoying. I will explore it in a more detailed review of the G1 closer to its launch. One problem with the initial Android release is its Google-centricity. The search, of course, is Google search, and e-mail is optimized for Google's Gmail. The phone pulls contacts from Google Contacts, so you'll need to jump through hoops to keep the phone's contact list in sync with Outlook or the Mac Address Book.
thanks to: economictimes.indiatimes.com

Tata Motors to sell stake in 6 arms

MUMBAI: Tata Motors is learnt to have initiated talks with private equity (PE) funds to sell up to 25% stake each in its six profit-making unlisted subsidiaries. The biggest of the lot is the wholly-owned arm Tata Daewoo Commercial Vehicle Company. Others include HV Excels, HV Transmissions, Tata Motors Finance, Tata Technologies and Telco Construction Equipment (Telcon).

A banker close to the development said the move is part of the company’s plan to raise Rs 3,000 crore through divestment of stakes in its subsidiaries and selling shares in listed firms. Tata Motors is also raising Rs 4,200 crore through a simultaneous, but unlinked rights issue to finance the $2.3-billion acquisition of Jaguar Land Rover (JLR) in June.

“The company feels that it need not hold large holdings in these subsidiaries. Thus, the company will bring them down by 20-25 % in each of them. However, it would like to hold a majority stake in these firms, which are mainly supplying components to it or financing its products,” the banker added. Another banker said Tata Motors would conclude the stake sale by June 2009.

The company had raised $3-billion bridge loans in June this year. Of this, $2.3 billion has been utilised for the JLR buyout and the rest was spent to meet JLR’s working capital expenditure. Tata Motors will pay back the bridge loans in June 2009.

It is learnt that JLR would return $700 million to Tata Motors and mark the loans on its balance sheet.
When contacted, a Tata Motors spokesperson told ET: “Tata Motors has already announced, on August 20, 2008, its intention to review the current investment portfolio and pursue a programme of monetising certain investments over the coming quarters.

We will be announcing these divestment decisions as and when they are taken up by the company. It would not be possible for us to comment on specific companies or initiatives at this stage.” Tata Motors has started selling shares in Tata Steel as part of its fund-raising programme. On Thursday, it sold one crore shares worth Rs 485 crore to Tata Sons.
thanks to: economictimes.indiatimes.com

Gold recovers on firm global cues

NEW DELHI: Gold prices recovered by Rs 170 to Rs 13,130 per 10 gram in the bullion market here today increased demand triggered by a firming trend in global markets.

Traders said buying activity gathered momentum in the precious metals on reports of a firming trend in global markets, which normally sets prices here.

Gold, which fell by over Rs 220 per 10 gram, bounced back as the metal in New York rose on fresh buying by stockists at existing levels.

The metal in New York rose heading for the second straight weekly gain as talks on the 700 billion dollar bailout by the US government to ease the credit crunch stalled.

Standard gold and ornaments, which had lost Rs 220 each in previous day's trading, staged a strong comeback and shot up by Rs 170 each to Rs 13,130 and Rs 12,980 per 10 gram, while the sovereign gained Rs 50 at Rs 10,500 per piece of eight gram.

A similar firming trend was extended in the white metal as silver ready rose by Rs 250 to Rs 20,850 per kg and weekly- based delivery by Rs 295 to Rs 21,095 per kg. Its coins also traded higher by Rs 100 to Rs 28,300 for buying and Rs 28,400 for selling of 100 pieces.
thanks to: economictimes.indiatimes.com

Nath takes a dig at troubled US banks

NEW DELHI: Taking a pot shot at the US financial sector, which is facing one of the worst turmoils ever, Commerce and Industry Minister Kamal Nath today said those "preaching" others have not kept their own house in order.

"Those who preached us best practices have not helped their own financial sector," Nath told reporters here when asked to comment on the US financial crisis, worsened by collapse of investment bank Lehman Brothers.

Nath said the amount of exposure of the banks going down is small in Asia. "A very small fraction of that (US economic turmoil) is in Asia. This shows that best practices have been adhered to in Asia," Nath said.

However, he said, the economic turmoil in the US is causing concern to most of the global economies. "It still has to be assessed to what extent it will affect the economy in Europe," he said.

The US credit crisis worsened yesterday with 158-year-old Lehman Brothers filing for bankruptcy protection after losing around 60 billion dollars in the sinking real-estate market. Earlier, the troubled investment bank Merrill Lynch was bought by Bank of America.

Citigroup Global Markets puts 'buy' on OnMobile Global

OnMobile Global

cmp: Rs 495
target price: Rs 630

Citigroup Global Markets has initiated coverage on OnMobile Global with a ‘buy’ rating saying OnMobile Global is India’s largest VAS (value-added services) operator (35% share) in a rapidly growing market [FY08-11 (estimated) CAGR at 51%.

The estimated 36% EPS (earnings per share) CAGR over FY08-11 (estimated), was due to the company’s increasing international presence, said Citi.

“Though it appears high in the current environment, we believe our target PE (price to earning)of 25x Mar10E is justified by OnMobile’s strong growth prospects and is in line with the multiple for comparable peers,” the note added.

According to the Citi note, the domestic VAS has graduated from being a glorified sub-set of p-to-p SMS to a well-demarcated segment. “The current contribution of the company at 3.4% of wire-less revenues is likely to increase to 6% by FY12E,” the note said.

“OnMobile’s industry-leading position in voice platform and CRBTs, organisation structure geared to innovate/scale up quickly, and strong operator relationships make the company well-positioned to capitalise on this opportunity,” it added.
thanks to: economictimes.indiatimes.com

Stocks to watch on Tuesday

MUMBAI: Reliance Industries’ special economic zone in Raigad, Maharashtra, may take off if the company announces a better compensation for farmers willing to part with their land, media reports quoted ministers in the state government as saying.

According to the rehabilitation package announced by RIL in 2006, the displaced farmers will be given Rs 25,00,000 per hectare. RIL also promised a job to one person in each family in the industries that came up in the zone. This may give a boost to the RIL stock, which ended down 2.45 per cent at Rs 1,884.10 on BSE Monday.

The promoters of Emami, Agarwals, have nearly doubled the open offer to acquire 20 per cent stake in ayurvedic pharma firm, Zandu Pharmaceutical Works. The offer was raised to Rs 15,000 a share from Rs 7,315 earlier.

The attempts of Agarwals to enter the board of Zandu have been stalled by the Parekhs, who have raised their stake by nearly 2 per cent in the past couple of months through open market purchases. Emami currently holds 27.5 per cent stake in Zandu while the Parekhs hold over 40 per cent in the company.

On Monday, Zandu shares fell by 5 per cent to close at Rs 16,728 on the BSE, while Emami fell by 2.9 per cent to Rs 279.60. Zandu shares had touched a high of Rs 24,643 on BSE on July 24.

Allcargo Global Logistics has firmed up plans to set up two greenfield ports on both coasts of the country. The company’s shares, which ended 4.18 per cent lower at Rs 848.95 on Monday, could see some upside.

Shares of Usher Agro are likely to witness some action on reports that private equity firms such as Blackstone, TPG, Blue River Capital are eyeing more than a 40 per cent stake in the agri-processing firm. The company’s shares rose 2.99 per cent to Rs 199.75 on Monday.

Jet Airways is in talks with Bangalore-based infrastructure developer GMR Group to buy at least 24 per cent stake in a proposed aircraft maintenance, repair and overhaul venture, to be set up at Hyderabad. Jet Airways shares ended 1.06 per cent lower at Rs 511.30 on BSE.

ICICI Bank has Rs 375-cr exposure in Lehman Brothers

NEW DELHI: Country's largest private sector lender, ICICI Bank today said its London subsidiary has 57 million Euro (about Rs 375 crore) exposure in the Lehman Brothers which has filed for bankruptcy protection.

"ICICI Bank UK Plc holds 57 million euro of senior bonds of Lehman Brothers Inc potential losses are not material," the bank said in a statement. The bank said it had undertaken transactions with the US-based troubled investment banker as part of treasury operations.

"The exposure to Lehman Brothers' entities on account of these transactions and potential loss thereon are not material," it said. ICICI Bank shares plunged by 5.82 per cent to Rs 591.35 on the Bombay Stock Exchange.

Lehman Brothers, which is a 158-years-old-financial institution has filed for bankruptcy protection, after losing around USD 60 billion (About Rs 2,76,000 crore) in sinking real-estate market.

Another investment bank Merrill Lynch is being bought over by Bank of America for USD 50 billion, while world's largest insurer American International Group (AIG) is also facing financial crisis. Meanwhile, Lehman has suspended operations of its three Asian arms.

Lehman Brothers Asia Ltd, Lehman Brothers Securities Asia Ltd and Lehman Brothers Futures Asia Ltd have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice.

Alembic shares up 9% on NSE block deal

MUMBAI: Shares of Alembic soared nearly 9 per cent after 2.05 million shares, or 1.4 per cent of equity changed hands in a block deal on the NSE, at Rs 42 each. The identity of the buyer or seller was not immediately available. At 1 pm, the company's shares were up 8.82 per cent at Rs 45.65 after touching a high of Rs 45.85 in trade so far.

S and P launches index of Indian equities for int'l investors

NEW DELHI: Standard & Poor's on Monday launched an equity index of 60-listed Indian companies, including the likes of Infosys, Bharti Airtel and Reliance Industries, to provide international investors with information on tradeable exposure to the largest and most liquid scrips in the country.

"The new S&P India Select Index was developed in response to growing investor demand for access to the leading companies in India. The index has a pool of easily accessible underlying stocks that provides a unique way for international investors to take part in India's growth story," R Ravimohan, Managing Director and Head of South and Southeast Asia, S&P said in a statement.

The 'S&P India Select Index' comprises leading companies, with no single scrip representing a weight more than 10 per cent in the index.

According to the leading index provider, the stocks that have reached the maximum percentage holding for Foreign Institutional Investors (FIIs) are excluded from the index in order to reflect the "lack of access of those stocks to foreign investors."

"The index is fully float adjusted and stock weights are determined by what is legally and practically available to foreign investors," the statement added.

The top 10 holdings by percentage of index weight are Infosys Technologies, Bharti Airtel, Oil and Natural Gas Corporation, Reliance Communications, Housing Development Finance, Reliance Industries, ICICI Bank, Hindustan Lever, Bharat Heavy Electricals, and Larsen & Toubro.
thanks to: economictimes.indiatimes.com

Short covering in Nifty futures; Aug ends flat

MUMBAI: Bouts of profit booking on weak opening of European markets led Indian stocks to shed all early gains on Monday.

National Stock Exchange's 50-share Nifty closed the day slightly higher at 4335.35 and August futures provisionally ended flat to spot. However, September futures settled at 1 point discount, indicating rollovers of short positions in the series.

August futures price gained 0.29 per cent while open interest shed 3.25 lakh shares. Nifty September futures price advanced 0.32 per cent and added 59 lakh shares in OI.

Call writing was observed at strikes 4400 and 4300 of August series and in September at strikes 4500 and 4400.

Put buying was witnessed in August series at strikes 4400 and 4300 levels while September series showed put buying at 4200 and 4000 levels. The options data indicates resistance at 4400 and support at 4200 levels.

"We saw short covering across the counters ahead of F&O expiry Thursday. Markets will remain volatile till the expiry. Data on US and India GDP, due on Aug 28 and 29 respectively, are of vital importance for the markets, also inflation data. Players should utilise every rally to lighten their commitments," said Subrato Basubani, analyst with Spark, a wealth advisory firm.

Realty and banking sectors were the major gainers while metal, power and oil & gas lost the most.

In banking, Bank of Baroda August futures gained 4.5 per cent while the contract ended flat to spot. Kotak Mahindra Bank near month futures price advanced 2.31 per cent and open interest added 1.16 lakh shares. ICICI Bank contract ended in a slight premium to spot.

DLF August rose 1.88 per cent while the contract closed at Rs 5 discount. HDFC jumped 3.36 per cent on short covering. However, HDIL futures dropped 2.17 per cent and shed 8.71 lakh shares in open interest.

Metal and commodity stocks fell on tumbling prices in international market.

Tata Steel futures fell 2.19 per cent, Sterlite Industries skid 0.44 per cent and shed 6.30 lakh shares and SAIL August futures slipped 0.34 per cent with huge additions in open interest, indicating short build up in the SAIL contract.

Total F&O turnover on NSE was Rs 45,979 crore, up 3 per cent from Friday.

Elsewhere, European stocks fell as concern deepened that credit losses will spread, threatening economic and profit growth. US index futures declined.
thanks to: economictimes.indiatimes.com

Short covering in stock futures, huge call writing at 4300 level

MUMBAI: After an initial hiccup, Indian markets recovered smartly in afternoon trade on Friday on the back of positive opening in European markets. National Stock Exchange's 50-share Nifty closed the day 0.84 per cent higher at 4319 and August futures provisionally settled at a premium.

The August futures premium widened to 10 points from 4 points Thursday. The contract price gained 0.98 per cent and added 10.5 lakh shares in open interest. Rising open interest coupled with widening premium indicates some longs being added in the contract.

Interestingly, huge call writing was observed at 4400 and 4300 levels while 4200 strike saw call buying. On the other hand, 4300 and 4400 puts shed positions in open interest where as 4200 witnessed put writing from bulls. The options data indicates Nifty range at 4200-4400 levels.

"Short covering was observed in banking, metal and auto stocks ahead of F&O expiry next week. Metal stocks gained as weak dollar bolstered the commodity prices in international markets," said Amrit Mehta, an independent analyst.

"The F&O expiry next week may fuel the volatility in the markets. On Aug 29, Indian GDP data for Q1FY09 will be released. This is a figure market is waiting anxiously for. For banking sector, next week will be a tough one. Bounce back in crude prices is expected to continue and it may impact bank stocks," said Praveen Kumar, an analyst with large brokerage

"On Aug 28, US GDP preliminary data will be released. Advance estimates are indicating US economy to grow 1.9% annualized rate. If the actual figure comes in line with the preliminary estimate then it would mean recessionary fears are over and the Federal Reserve can concentrate on inflation fighting and we can expect rate hikes in US," Kumar added.

In stocks futures, Hindalco futures gained 4.17 per cent and Sterlite Industries jumped 3.7 per cent on short covering. Steel Authority of India August advanced 3.67 per cent.

Axis Bank August rose 4.83 per cent, Kotak Mahindra Bank increased 3.35 per cent and HDFC Bank gained 2.16 per cent.

Tata Motors futures gained 1.81 per cent, Mahindra & Mahindra advanced 1.53 per cent and Maruti rose 1.77 per cent.

Total F&O turnover on NSE was at Rs 44,332 crore, down 14 per cent from Thursday.

Meanwhile, European stocks rose as investors speculated takeovers may increase and a drop in oil boosted airlines and carmakers. U.S. index futures advanced, while Asian shares retreated.

thanks to: www.economictimes.indiatimes.com

Prabhudas puts outperformer on Bharti Airtel: target Rs 973

MUMBAI: Prabhudas Lilladher has maintained ‘outperformer’ on Bharti Airtel for a target price of Rs 973. Bharti expects the industry’s wireless subscriber base to reach 500 million by 2010 and 750 million by 2015, implying a compounded annual growth rate of 15 per cent over the period. The company has reiterated sustaining 25 per cent market share.

There are 5-10 slots available in all the circles, except Mumbai and Delhi that will suffice the needs of most of the operators. Mumbai and Delhi have 2-3 slots for auction with around five operators offering 2G services. These two circles being the key markets for 3G services may see serious bidding, says Prabhudas.

Bharti expects the auction process to take place between Sept’08-Oct’08 and launch of services in 6-9 months. However, no datapoints were given on the 3G capital expenditure.

3G will help the GSM incumbents to garner additional spectrum in the key markets for offering voice and high-end services. The spectrum-starved operators would like to ride the 3G services before the launch of Rcom GSM panindia and new entrants like Datacom, Unitech etc. rolling out their network.

Bharti expects to launch its DTH platform by Oct’08, initially targeting 100-120 cities. Test trials on 10,000 employees and associates have shown good results, says the brokerage.

Prabhudas expects Bharti to report strong subscriber additions over the next 5-6 months and has maintained its wireless leadership. Faster access to 3G spectrum shall be the key trigger in the foreseeable future.

At market price of Rs 792, the stock trades at a PER of 15.5x and at an EV/EBITDA of 9x FY10E earnings.
thanks to: economictimes.indiatimes.com

Bargain hunting helps indices close higher

MUMBAI: Selective stock buying by deep pockets and short coverings in banking, metals and auto stocks on Friday saw indices close on a higher note.

The market started off on a weak note on the back of negative Asian cues and rising oil prices. But soon, traders covered short positions in interest rates sensitive sectors as inflation rose moderately. Positive opening of European market bolstered sentiments further.

Metal commodity prices surged on speculation that demand will pick up in China after Olympics and as US dollar continued to decline against basket of currencies.

Capital goods and power space lost momentum as the day progressed on worries of outcome of the second day meet of Nuclear-Supply-Group on India-US nuclear deal.

“Stocks were available at good valuations after yesterday’s fall so some value buying was seen. Market seems to be in a neutral to positive zone,” said Ajay Parmar, Head of Research, Emkay Global Financial Services.

Bombay Stock Exchange’s Sensex closed at 14,401.49, up 157.76 points or 1.11 per cent. The index touched a high of 14,428.52 and low of 14136.86.

National Stock Exchange’s Nifty ended at 4327.45, up 43.60 points or 1.02 per cent. The broader index touched a high of 4337 and low of 4248.

BSE Midcap Index closed 0.34 per cent higher at 5726.85 while BSE Smallcap Index was down 0.16 per cent at 6,925.85.

Biggest Sensex gainers were Sterlite Industries (4.34%), Hindalco Industries (4.26%), Hindustan Unilever (3.73%), HDFC (3.22%) and BHEL (2.76%).

Index losers comprised Satyam Computer (-3.18%), Grasim Industries (-1.85%), NTPC (-1.70%), Wipro (-1.04%) and Larsen & Toubro (-0.88%).

Market breadth, however, remained negative with 1414 declines against 1209 advances on BSE.

Tata Motors may sell stakes in group cos to raise funds

MUMBAI: The possible avenues through which Tata Motors could raise Rs 3,000 crore to bridge the gap between the old and revised rights issue structure, include selling of shares in group Tata companies, both listed and unlisted.

Some of them include Tata Steel, in which Tata Motors held 3.14 crore shares at the end of FY08, which is currently valued at nearly Rs 1,840 crore, coupled with partial dilutions in Tata Motor’s subsidiaries like Korea-based Tata Daewoo Commercial Vehicle and Tata Technologies, point out investment banking sources.

Tata Daewoo’s total income for the year ended March 31, 2008 was Rs 3,069.7 crore while its profit after tax was Rs 158.9 crore. Other immediate liquid assets available to Tata Motors, include its cash and bank balance of Rs 2,397.3 crore at the end of FY08.

Of course, the revised terms of the rights issue will only result in a 42% dilution of the company’s paid-up equity capital of Rs 386 crore, as compared to earlier estimates of 57%, point out analysts at foreign brokerage houses. Tata Motors’ fully diluted earnings per share was Rs 48.28 for FY08.

Tata Motors currently has 85% shareholding in HV Transmissions and HV Axles each. In the past two quarters the company has been diluting stakes in these two companies. HV Transmissions and HV Axles are valued at Rs 1,100 crore.

Incidentally, the Tata group had earlier planned to dilute equity in some of the subsidiaries like Tata Daewoo, HV Axles and HV Transmissions through an IPO. An auto analyst pointed out that since the market is on a downturn, and it would be difficult to get a good price, the main holding company Tata Sons will initially fund. Nevertheless, the Tata Motors stock declined 1.4% to Rs 417.95 on Thursday, given the bearish sentiment on the Street.

In the changed structure Tata Motors has decided to sell certain investments instead of its earlier plan of raising Rs 3,000 crore through issue of the convertible preference shares, one of three instruments of the proposed rights issue. However, other two instruments — issue of ordinary equity shares and offer of equity shares with differential voting rights — amounts to Rs 4,200 crore.

The proceeds of the divestment will be utilised for repayment of the bridge loan taken for JLR acquisition. The company has already monetised some of its investments in this year.

Tata Motors purchased JLR from Ford Motor for $2.3 billion in January. In May this year it announced plans to raise Rs 7,200 crore through the unlinked but simultaneous rights issue. The company also announced to raise between Rs 2,000 crore and Rs 2,500 crore ($500-600 million) from overseas markets through issue of securities. In all, the company plans to raise a total of Rs 9,500 crore to fund the JLR deal.
thanks to :- economictimes.indiatimes.com

Hindalco drops over 4 pc; HDFC surges 3 pc on BSE

MUMBAI Shares of Aditya Birla Group firm Hindalco declined over four per cent, while mortgage lender Housing Development Finance Corporation gained over three per cent, amid the benchmark index Sensex losing 78.52 points to close at 14,645.66 points.

Hindalco, the biggest loser among the 30 blue chips, plunged 4.53 per cent to close at Rs 129.65 on the Bombay Stock Exchange after touching an intra-day low of Rs 128.70.

Another Aditya Birla Group firm Grasim Industries ended the day at Rs 1,963.50, down 4.52 per cent, while more than 16,000 shares of the company changed hands today.

Anil Ambani-led Reliance Communication slipped 2.71 per cent to close at Rs 412.40, whereas corporate giant Reliance Industries lost 2.21 per cent to close at Rs 2,224.95.

Homegrown auto major Mahindra & Mahindra lost 2.56 per cent to close at Rs 568.10, despite the company announcing a joint venture with a Chinese tractor firm.

Among the sectoral indices, Oil&Gas, Metal, Power, Auto, Consumer Durables all closed in the negative territory following the trend of the benchmark index Sensex.

Meanwhile, Housing Development Finance Corporation jumped 3.12 per cent to close at Rs 2,359.75 and more than one lakh shares changed hands on the bourse.

Private sector lender HDFC Bank ended the day at Rs 1,200.40, up 2.14 per cent. It had touched an intra-day high of Rs 1,222 on day's trade.

Other gainers include software major Satyam Computers, engineering and construction major Larsen & Toubro, software exporter Tata Consultancy Services and FMCG firm Hindustan Unilever soared over one per cent on the exchange.

The IT index was the only gainer in the day's trade on the BSE and settled with a gain of 0.75 per cent at 3,926.38 points.

Citigroup cuts S&P 500 year-end target

Citigroup lowered its 2008 year-end targets for S&P 500 and Dow Jones Industrial Average by about 5 per cent due to the weak credit environment, and said a year's worth of tightening credit is only now being felt.

The brokerage cut its S&P 500 target to 1,475 and Dow Jones Industrial Average target to 13,250. "While global economic trends have been weakening, credit conditions continue to deteriorate and point to more bad news that may have not yet been discounted," the brokerage said.

Gold may slip below Rs 10,500 by end of Sept

MUMBAI: In line with the sharp fall in price in global markets, gold price in India is expected to fall below the Rs 11,000 mark per 10 gm by September, a top industry official said.

“Gold prices have witnessed a steep fall in line with the global markets and are likely to drop further and may touch the Rs 10,400 to Rs 10,600 per 10 gm-mark by September-end,” said Bombay Bullion Association (BBA) president Suresh Hundia on Sunday.
Domestic gold prices in July saw an inverted U-shaped trend. Trading initially at Rs 12,900 per 10 gm, it reached the peak of Rs 13,567 per 10 gm by mid-month before beginning its downward journey at the end of the month and finishing at Rs 12,557 per 10 gm, much below the level it had initially begun.
The gold price dropped from Rs 12,705 on July 26 to the present level of Rs 11,300 per 10 gm in the local bullion market. In the international market, the yellow metal dipped below $800 an ounce for the first time since December 2007.
As US economists see improved prospects for its economy, the dollar could be more attractive as an investment, particularly in times of crisis, making gold less lustrous like other precious metals. In the domestic market, gold demand has already started picking up and people have advanced their purchases before Diwali and wedding season, following a sharp decline in prices, bullion traders said.

Market participants expect the metal to test further lows in line with the steep fall in prices.

“The metal is losing its social value and more dependent on the foreign exchange,” said All India Sarafa Bazar president Sheel Chand Jain, adding that every rise in dollar would reduce the appeal of the metal. He said easing crude oil prices have also eroded the demand for gold as a hedge against inflation.
Gold in overseas markets hit an intra-day low of $773.90 an ounce, its weakest since November 20 last year, down from $811.25 late in the New York on Thursday as the dollar firmed up to a six-month high against the euro. Crude oil prices fell to $111.34 a barrel on demand fears. Bullion traders said prices would see more lows in the next few days following a fall in demand among stockists and jewellery fabricators.

Overall, there has been a shortfall in demand for physical gold in India, which usually stands at about 800 metric tonne annually. According to the BBA, India’s gold imports have fallen by almost 50% in the first quarter. BBA statistics said gold imports in the first quarter of this year is 101 metric tonne against 193 during the same period last year.
thanks to: economictimes.indiatimes.com/

The right portfolio

Courtesy- Vikas Agarwal, ET Bureau
The domestic markets have been quite volatile with a negative bias this year. There has been a flurry of negative news coming in from all quarters.

For example, the persistent high inflation rate - especially the core inflation rate that is driven by basic commodities, rising commodity prices in the global markets, a slowdown in the global economy, and no visible signs of improvement.

However, many investors harvested higher returns than the reference indices by investing with a well-balanced equity portfolio and booking profits from time to time.
thanks to: economictimes.indiatimes.com

Analysts pick Future Cap Holdings, HCL Infosystems, Vishal Retail, Wipro , New tips

Future Cap Holdings
cmp: Rs 360.50
target price: NA

Edelweiss has initiated coverage on Future Capital Holdings with an ‘accumulate’ rating as it feels that the company with its vertically-integrated model is likely to capture value across the chain in the high-growth consumption space.

“The company is building a vertically integrated capital-cum-agency business model through its investment advisory, financing and financial products distribution businesses,” says the report. The company is a focused investment advisor with $1.5 billion funds under advice in consumption-related sectors, it adds.

The brokerage expects its assets under management to grow to $5 billion by FY11E. It also expects the “company’s net revenues to grow seven-fold to Rs 7.7 billion in FY10E and profit after tax to grow to Rs 1.8 billion in FY10E”. The stock is trading at 12.6 times FY10E earnings and 2.5 times FY10E book, says the report. Edelweiss recommends investors to accumulate the stock at current levels from a long-term perspective (2-3 years).

HCL Infosystems
cmp: Rs 121.80
target price: Rs 155

CLSA has maintained an ‘outperform’ rating on HCL Infosystems while lowering the target price from Rs 230 to Rs 155 due to the further slowing down of PC sales. “HCL Infosystems’ sales are slowing down further and we now expect flat to negative year-on-year revenue growth in the segment in the June’08 quarter,” says the brokerage.

Around 30% of the company’s PC sales go to the retail segment, where the slowdown observed since late CY2007 has deepened, it says. Lower computer systems revenue assumptions are driving around 4-11% further cut in EPS estimates for FY08-10, it goes on to add.

According to CLSA, the demand of PC seems to be waning due to “cost-led 5-7% price hikes passed on by vendors, plus the lower financing options available (higher interest rates plus cut back in new loans from financiers)”. A 6.4% dividend yield provides some buffers to the stock, but upsides seem limited as a weak quarter looms, it adds.

Vishal Retail
cmp: Rs 415.90
target price: Rs 485

Kotak Institutional Equities has initiated coverage on Vishal Retail with a ‘add’ rating as it feels that the company would benefit from its ‘value’ model that has national scalability, thereby offering economies of scale.

“The company’s transformation to an integrated retailer dilutes its dependence on apparel while its emphasis on private labels is likely to support margins,” says the report.

It goes on to add that the company’s product mix is likely to under go significant changes in the near future, with negative margin impact of FMCG sales offset by higher share of private labels. The brokerage, however, feels that the “proposed rollout is aggressive” and that it would be “tempered by funding constraints”.

“We expect the total retail space to grow at 48% CAGR to 7 million sq ft by FY2011E, which is 30% lower than management estimates, after factoring in funding constraints,” says the report. Inflation and economic slowdown are concerns given the company’s concentration on lower income categories, it adds.

Wipro
cmp: Rs 433.30
target price: NA

ICICI Securities has maintained a ‘buy’ rating on Wipro even while viewing that the risk-reward is unfavourable at current valuations owing to deteriorating earnings visibility. The brokerage believes that Wipro’s upswing in the past weeks and the resulting par-valuations with Infosys is unjustified in the short term and expects profit booking at current levels.

“With FY09E and FY10E PE at 17.2 times and 14.1 times (versus 17 times and 14.9 times for Infosys), we believe Wipro will witness profit booking in the short term given lower earnings visibility and similar EPS CAGR through FY08-11E,” says the report.

As against a historically strong second quarter, Wipro’s Q2FY09 dollar-denominated revenue growth guidance indicates that the company is witnessing client-specific ramp downs in Q2FY09, it adds. ICICI Securities, however, believes that client-specific issues in material accounts (GM, Nokia-Siemens, Alcatel-Lucent) are likely to lead to a bounceback in revenue growth only post Q2FY09.

Disclaimer: The stocks recommended above are picked up at random from research reports of broking houses. Investors are advised to use their judgement before acting on these recommendations. ET does not associate itself with the choices.
thanks to :-economictimes.indiatimes.com

Sugar industry pushes for export freedom

NEW DELHI: The sugar industry has demanded a long-term policy to enable it to export regularly irrespective of variations in output. It mentioned that the irregular nature of sugar shipments from India is resulting in a low price realisation.

“Usually, importing countries do not look upon the Indian exporters as a reliable long-term supplier. So, Indian exporters suffer from that is reflected in the price realisation for Indian sugar,” Indian Sugar Mills Association (Isma) director-general SL Jain said.

Mr Jain said Indian sugar sells at a discount of almost $100 per tonne against the international price. Though it is admittedly a bit inferior quality than the refined sugar abroad, the huge price variation is not justified, he said.
The Centre in 2006 had banned export of sugar that was lifted in January 2007 after a gap of six months, though India produced a record output of 28.3 mn tonnes in the 2006-07 season (October-September).

The ban in the first crucial three months had badly affected exports in 2006-07 season and the overall shipment in the entire season was 1.8 mn tonnes. The industry has suggested that a piece of legislation be framed by the government, providing for a minimum export of sugar per annum, irrespective of variations in the indigenous sugar production.

“While prescribing such minimum obligation on individual basis, it should be left to the sugar factories to make additional exports, should they so desire,” said Mr Jain.

The industry has also demanded that export quotas, whenever fixed, be provided with a tradable character. Since factories in the non-coastal regions have to incur higher transportation and incidental cost to undertake exports, the tradable character of exports quota would facilitate such mills to negotiate with units located in coastal areas to fulfil shipment obligations.

In such a scenario, sugar mills in the coastal areas may export on behalf of their hinterland counterparts, or units located in distant places may also buy sugar from the coastal units and fulfil exports obligations. India is the second largest sugar producer in the world, next only to Brazil, and the largest consumer of the sweetener. Sugar production in 2008-09 season is estimated to touch 22 mn tonnes, while in 2009-10 it is expected to be 25 mn tonnes. The domestic demand, at present, is pegged at about 21 mn tonnes.

Meanwhile, industry experts fear that sugar exports may fall by over 60% to about 1.5 mn tonnes in the 2008-09 season on expectation of lower production coupled with rising domestic prices.

“The domestic prices have gone up while the global market has softened. Besides, the estimated lower production would also be one of the factors for the decline in exports next season,” an analyst said.
thanks to :-economictimes.indiatimes.com

FIIs sell shares worth Rs 1,195 cr this week

MUMBAI: Amid markets witnessing a volatile trade, foreign institutional investors turned out to be net sellers shedding equities worth Rs 1,194.88 crore this week.

FIIs invested in equities worth Rs 409.70 crore and offloaded shares valued Rs 1,604.58 crore till today, a net sale of Rs 1,194.88 crore as per data available on the SEBI and BSE website.

Triggered by weak global stock markets, the BSE barometer Sensex fell nearly three per cent to 14,724.18 points this week.

FIIs today invested in shares worth Rs 1,752.94 crore and shed equities worth Rs 2,326.92 crore, resulting in the net sale of Rs 573.98 crore, as per provisional data available on the BSE.

Reversing the trend, domestic institutional investors today bought equities valued Rs 23.32 crore in the Indian market.

Brokers purchased shares worth Rs 248.41 crore for their clients or retail investors, while non-resident Indian entities invested in shares worth 0.67 crore respectively.

Meanwhile, proprietors shed shares worth Rs 37.31 crore amid the Sensex falling 369 points today.

Facebook named world's top social networking site

SAN FRANCISCO: Facebook has overtaken MySpace to become the world's most popular social networking site with 132 million unique visitors in June, according to new figures from web tracking firm ComScore.
The study also found that Facebook's visitor growth far outpaced that of MySpace, with Facebook visits up 153 per cent on an annual basis, compared to just three percent growth for MySpace. Other social networks showing strong global growth include Hi5 (100 per cent) Friendster (50 per cent), Orkut (41 per cent) and Bebo (32 per cent).
Comscore said Facebook grew 38 per cent in the US, where it had 49 million visitors in June.
The strongest growth was in Latin America, where Facebook's visitors grew by 1055 per cent. The number of European visitors tripled to 35 million a month, while growth in the Middle East and Africa was 400 per cent. In the Asia Pacific region visitors increased 458 per cent.
"Facebook has done an exceptional job of leveraging its brand internationally during the past year," ComScore executive Jack Flanagan said in a statement from the company. "By increasing the site's relevance to local markets through local language interface translation, the site is now competing strongly or even capturing the lead in several markets where it had a relatively minor presence just a year ago."

Comscore said the dizzying increases were helped by Facebook's tiny global presence prior to its recent initiative to translate the site into other languages. A year ago, it had only one million unique visits a month in all of Latin America, three million in the Middle East and Africa, and four million in all of Asia Pacific.
Flanagan said international expansion was now the main target for the major social networking sites.
"While the social networking trend first took off in North America, it is beginning to reach a point of maturity in the region," Flanagan said. "However, the phenomenon is still growing rapidly in other regions around the world - especially as the established American brands turn their focus to developing markets."
thanks to :-economictimes.indiatimes.com