Thursday, March 25, 2010

BOR: Market Outlook: Indian markets may have flat to positive opening today

Market Outlook: Indian markets may have flat to positive opening today and then remain ranged through the session with the F&O expiry for the March series underway. Nifty has support at 5150 and resistances are at 5280- 5310. The markets have entered into the consolidation phase so as to create a base before we head for a big rally. We might see markets trading with high volatility ahead of F&O Expiry.

Global Events to watch for today

  • Jobless Claims
  • Natural Gas Report

Global indices Update @ 8:

Dow Jones : 10785 (- 52.68)

NASDAQ : 2395 (- 16.48)

Nikkei 225 : 10826 (+10.99)

Hang seng : 21158 (- 345.0)

SGX CNX Nifty : 5221 (- 04.00)

INR / 1 USD : 45.56

Stocks in action for the day : SAIL, Bharti Airtel, Piramal Healthcare, Torrent Power, Cairn, Bosch, Gail, RCF

SAIL divestment to get okay today: The government, which owns 86% stake in SAIL, will propose to divest a total of 10% stake in SAIL in two tranches of 5% each in the next two financial years. The company would also raise fresh equity in the same proportion.

Zain board approves sale of African assets to Bharti: Bharti Airtel stood on the cusp of transforming itself into an emerging-market multinational after the board of Kuwait’s Zain Telecom on Wednesday approved the sale of most of its African assets to India’s largest mobile phone company. The $10.7-billion deal for Zain’s operations in 15 countries will give Bharti a firm foothold in the relatively untapped African market and take it past China Unicom, Sweden’s TeliaSonera, and Germany’s T-Mobile as the world’s seventh-largest mobile phone company by subscribers.

Piramal gains as Cipla takes precaution : The sale of contraceptive brand I-pill by Cipla to Piramal Healthcare may appear to be a win-win deal for both the companies but a closer look indicates that Cipla could be a loser with Piramal Healthcare obviously gaining from the deal. Cipla launched the I-pill brand two years ago, marking its entry into the over-the-counter products segment. It made the contraceptive pill into a Rs 30-crore strong lucrative brand commanding approximately 60% of the market.

Gokul group eyes RSSB land for Rs 4.5-5.5 bn Aims to foray into township, residential projects Punjab headquartered Radha Saomi Satsang Beas (RSSB) sect is likely to break all realty benchmarks in the city by striking a Rs 4.5-5.5 billion deal with Siddhpur based Gokul group for its sprawling campus at Chandkheda. With this deal Gokul group that owns Gokul Re-foils and Solvent is planning to foray into realty business by setting up a township project. Gokul group is inching closer to strike a deal for the 70 acres land owned by Radha Swami Santsang near Chandkheda region, said sources privy to the development.

Jaypee group may foray into fertilizer industry The once celebrated Duncans fertilizer plant, which closed down more than three years ago, is showing signs of resurgence. If things go as planned, and the interested Jaypee group is able to float its new fertilizer arm, the plant can witness smoke belching chimneys soon. The Centre, after repeated pleas from city MP and Union Coal Minister Sri Prakash Jaiswal, has exceptionally allowed the naphtha-based operation of the plant. Now, the Rs 70 billion Jaypee group is said to be interested in the deal to foray into fertilizer business by acquiring the plant, which has a production capacity of 2,250 tones of urea everyday. The Duncans are said to be willing to hand over the plant for an estimated Rs 2 billion as the present management is unenthusiastic to regenerate production despite the permission to operate on naptha.

Torrent to begin power distribution in Kanpur by June Uttar Pradesh Power Corporation (UPPCL) franchisee company Torrent Power is expected to take over the electricity distribution system of the city by June this year. UPPCL subsidiary Kanpur Electricity Supply Company (Kesco) inked the Memorandum of Understanding (MoU) to hand over the power distribution to Torrent Power last year. According to the MoU, working under the input-based franchisee model system, Kesco will hand over the distribution of electricity, realisation of bills, maintenance and development of the infrastructure and other related works to the Torrent Power for a period of 20 years. The takeover by Torrent was hanging in abeyance due to severe opposition from the Kesco staff, which has led to a few rages in some parts of city where the Torrent officials were physically assaulted.

Cairn to take up drilling in Ravva field from October Cairn India is planning to begin drilling activities in the Ravva field of Krishan-Godavari Basin from October. The company recently called expressions of interest from drilling rig suppliers. Cairn India, the operator of the Ravva block, holds 22.5% participating interest in the Ravva block. Its joint venture partners ONGC holds 40%, Vidiocon 25% and Ravva Oil (Singapore) 12.5% stake. ``The 4D seismic study by Global Geophysical in the Ravva field will be complete by March. The study is showing encouraging results which is why we are planning to start drilling activities from October 2010,`` sources from Cairn India told Business Standard. Initially, Cairn India will take up drilling in two wells.

Bosch settles wage talks at Bangalore plant The management of Bosch reached an amicable settlement with the employees` union at its Bangalore plant today. Though details of the settlement were not known, company sources told Business Standard the management had agreed to give an increase of Rs 8,000 per month in their CTC (cost to company), more than double the Rs 3,600 paid in the previous settlement four years ago. In return, the union assured 100 per cent normalcy in production operations from March 25. A memorandum of understanding is likely to be signed between the two parties on Thursday.

PNGRB to approve RIL, GAIL pipeline rates soon The rate for the gas pipelines of Reliance Gas Transportation India and GAIL India would be decided soon by the downstream oil sector regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB). ``The two consultants - Ernst & Young and Crisil - will evaluate the proposals submitted by the two companies and give a report to the Board, (which) will finalise after studying the report in the following two weeks,`` said a board official. He said the new rate would apply from the date of notification of the regulations in this regard, which was Nov. 20, 2009, or the date when the pipeline began operations, whichever was later.

CIL, GAIL, RCF in pact for Talcher coal project Mining major Coal India (CIL), Gas Authority of India (GAIL) and Rashtriya Chemicals and Fertilizers (RCF) will come together to establish a project for producing urea and ammonium nitrate at Tachler, Orissa. CIL has earmarked about 5.5 million tones of raw coal for the scheme, which once washed will come down to approximately 3.7 million tones of coal with less than 30% ash content. Subsequently, GAIL is to gasify the fuel to produce urea and ammonium nitrate. ``The exact investment figures have not been fixed as the technology that will be utilized to produce urea and ammonium nitrate is still being studied. But an estimated few thousand cores are likely to be spent,`` CIL chairman Partha S. Bhattacharyya said.

Ranbaxy gets a reprieve in generic case The Delhi High Court has turned down a plea by US pharma major Bristol-Myers Squibb (BMS) to ban India`s Ranbaxy Laboratories from launching a generic, or copycat, version of its patented hepatitis B drug Baraclude. BMS has argued that Ranbaxy`s proposed launch infringes on its patent. Admitting the case on Tuesday, the court asked Ranbaxy to file its reply within two weeks. The next hearing is scheduled for Apr. 19. The HC ruling allows Ranbaxy to go ahead, for now, with the launch of a drug that goes by chemical name Entecavir and has global sales of USD 191 million for the quarter ended October 2009.

Bayer drags Cipla to court over patent: German drugmaker Bayer has filed a patent infringement case against Cipla, the largest domestic drug seller, to stop the Mumbai-based company from selling its generic version of controversial cancer medicine Nexavar (chemical name Sorafenib Tosylate). The Delhi High Court has issued notice to Cipla and the next hearing is scheduled for April 23.

Tech Mahindra: AT&T'S purchase not to impact Shareholders: AT&T’S purchase of 8% stake in Tech Mahindra is not likely to impact the Indian company’s shareholders. The management has clarified that it was a one-off deal and there is no likelihood of more such transactions being carried out in the future. AT&T has long been a client of Mumbai-based Tech Mahindra, which offers IT solutions to global telecom players. In 2005, Tech Mahindra had entered in a long-term contract with AT&T. As an incentive, Tech Mahindra offered to sell equity stake to AT&T as and when the overseas firm achieves a given milestone revenue using Tech Mahindra’s solutions.


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