Wednesday, August 4, 2010

Market Outlook: Indian markets are expected to open flat to positive terrain

Market Outlook: Indian markets are expected to open flat to positive terrain on the back of mixed action seen on US and Asian counters. Overall we could see some more upside but also profit bookings on the way up. The crucial support for the Nifty is 5380 and strong resistance at 5550.

Results today: IDFC, Adani Power, GMR Inds, Mundra Port, Standard Chartered, IL&FS Transportation, ITI, Future Capital Holding, Technocraft Inds, Bombay Rayon Fashion, Aftek

Global events to watch:

Þ MBA Purchase Applications

Þ Challenger Job-Cut Report

Þ ADP Employment Report

Þ ISM Non-Mfg Index

Global indices Update @ 8:

Dow Jones : 10636 (- 38.00)

NASDAQ : 2283 (- 11.84)

Nikkei 225 : 9548 (- 145.4)

Hang seng : 21526 (+68.42)

SGX CNX Nifty : 5440 (+05.00)

INR / 1 USD : 46.22

Stocks in action for the day: Borosil Glass, RIL, Jagran Prak, Punj Lloyd, Everonn, RPower, Lupin, HPCL, SAIL, GMR Infra...

IT stocks on focus, Cognizant reports stellar numbers, ups guidance significantly; stock surged 5% Cognizant’s CY'Q2 2010 Revenue at USD 1.105 billion, (up 15% QoQ) -Net profit up USD 172.2 million, (up 13.7% QoQ) -Ups FY10 revenue guidance growth to 36% at USD 4.46 bn (earlier guidance was 25%, so a quantum jump)

Punj Lloyd Q1FY11 -Consolidated net loss at Rs 30.6 crore versus profit of Rs 127 crore (YoY) -Consolidated net sales at Rs 1,606 crore versus Rs 2,953 crore (YoY)

Jagran Prakashan – Sources -INM likely to sell 6.5% equity in Jagran Prakashan today CNBC-TV18 Alert: INM: Independent News & Media Investments -Deal size over Rs 200 crore; I-Sec banker

NDTV Q1 ((Consolidated)) -Sales at Rs 83.56 crore versus Rs 130.69 crore (YoY) -Loss at Rs 31.1 crore versus Rs 83 crore (YoY) Note: Number not comparable due sale of Ent. Biz

Nadir Godrej says -Godrej Industries in early stages of acquisitions in niche areas -Marginal price hike likely in palm oil, palm oil derivatives -Will consider price hike in durable goods -Price hike in FY11 will be marginal

Listing of Orissa Mineral Development Company on Exchanges (Already listed on Calcutta Stock Exchange @ Rs.19500/share)

Listing of Midfield Industries on exchanges (Issue Price: Rs 133/share)

RIL, Essar to bid for BP’s USD 500 million assets

Borosil Glass sells Andheri plot for Rs 875 crore – TOI

Canara Bank raises `750 cr: Canara Bank has raised `750 crore (including a green shoe option of `250 crore) through a perpetual bond issue. The issue carrying a coupon rate of 9.05% for the first 10 years closed on August 3. The bank’s CAR stood at 13.43% as of March 2010, but the new norms on not using the quarterly profit for calculating CAR has seen the capital adequacy ratio slip to 12.41%.

ABG Shipyard trims stake in Great Offshore: Shares of Great Offshore have been declining for the past few weeks as ABG Shipyard has been selling the stock after its failed bid to acquire the company. The latter together with its wholly-owned subsidiary Eleventh Land Developers sold a little over 2% between May 12 and July 16, and has now reduced its stake to 5.3%.

Everonn to acquire 65 ICFAI schools at Rs 250-300 crore: Everonn Business Education Limited, wholly owned subsidiary of Everonn is looking at large scale expansion, so acquisition is on the agenda right now, Sources say that Everonn is in talks with ICFAI to require its 65 schools. ICFAI is planning to sell 135 schools in all. This is largely going to be under the IIPS branch, which is handling the business management education. Post-acquisition a string of diploma courses in management are likely to be rolled under the IIPS branch. The deal is pegged at Rs 700 crore. However it is learnt that IFCAI will get it at a discount rate of Rs 250-300 crore. A meeting is scheduled on 19 August to finalise the deal.

Reliance Power used 50% IPO funds, projects yet to start: Macquarie Equity Research Reliance Power has spent half of the proceeds garnered from its initial share sale but has not made much progress on the execution of its major power projects, according to Macquarie Equity Research. RPower had raised USD 2.5 billion in January 2008, from the largest IPO in the history of the Indian markets. The report, authored by analyst Jeff Evans, retains an underperform rating on the stock as he believes the current market value cannot be justified considering what it describes as the ``risk around execution``. A lot of success is already built into the price, according to the report.

SAIL, Japan`s Kobe Steel in talks to form JV in 6 months Steel Authority of India (SAIL) hopes to stitch up a joint venture with Japan`s Kobe Steel within the next six months. The two companies are in talks to set up a 0.5 million tonne greenfield steel plant in India using Kobe Steel`s pioneering new steel-making technology. ``We are engaged in a feasibility study about the proposed venture, which we hope to complete in three months. Following this, we are looking at finalising the JV,`` SAIL chairman CS Verma told ET. The new unit will put into use Kobe Steel`s iron-making technology to make nuggets. These can be used with fines and thermal coal for steel making. The unit will produce a special type of alloy steel which will have specific applications. As far as the technology goes, this will be a first-of-its-kind venture for SAIL.

HPCL to sell jet fuel to Kingfisher Airlines only against cash State-owned Hindustan Petroleum Corp (HPCL) will sell jet fuel to Vijay Mallya-run Kingfisher Airlines only against cash as it has failed to provide bank guarantee cover against payment defaults. HPCL is Kingfisher Airline`s largest aviation turbine fuel (ATF) supplier. The airline, which buys 1,300-1,350 kilolitre of jet fuel worth some Rs 1.33 billion every month, has defaulted on its payments. ``Currently,Kingfisher Airlines has been put on cash-and- carry arrangement by HPCL as they have been unable to fulfill the obligations imposed by HPCL board,`` Minister of State for Petroleum and Natural Gas Jitin Prasad told Rajya Sabha.

GMR infuses USD 100-mn equity to re-finance Intergen buy GMR Infra today said it had re-financed USD 737 million of a short-term loan raised for the InterGen acquisition two years earlier and due for repayment later this year. This amount will now be due for repayment after five years. The total short-term debt raised on account of the Intergen buy was USD 837 million (Rs 38.4 billion). Sources say GMR converted USD 100 million of the debt into equity. The parent company, GMR Holdings, contributed by infusing equity from its internal accruals. ``An amount of USD 100 million was prepaid by a combination of dividend payments from Intergen, management fees and internal accruals from the parent company,`` said a source. GMR refused to comment.

Lupin hires Nycomed to lead US subsidiary Lupin has appointed Paul McGarty, former CEO of US-based speciality drug firm Nycomed, as president of its US subsidiary. McGarty was instrumental in transforming Nycomed from a topical product manufacturer to a leading fully integrated dermatology specialty company in the US, a Lupin statement said. The US, which contributes 35% of Lupin`s global revenues, is one of its most important target markets, with India and Japan. The appointment of McGarty will accelerate Lupin`s US growth, Vinita Gupta, CEO of Lupin Pharmaceuticals Inc, the US subsidiary, said.


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