Friday, October 8, 2010

Market Outlook: Indian markets are expected to open positive on a flat note

Market Outlook: Indian markets are expected to open positive on a flat note taking cues from mixed global counters. We may witness some more profit booking attempts in stocks that have run-up sharply in past month or so. The crucial level of support is near 6060 while resistance is near 6160. Overall markets is struggling to sustain in the upper regions and we expect this to be volatile as markets are expecting IIP number which is due next week.

Global events to watch:

Þ Employment Situation

Þ Wholesale Trade

Global indices Update @ 8:

Dow Jones : 10948 (- 19.07)

NASDAQ : 2383 (+03.01)

Nikkei 225 : 9653 (- 31.43)

Hang seng : 22861 (- 23.17)

SGX CNX Nifty : 6152 (+08.00)

INR / 1 USD : 44.28

Stocks in action for the day: SAIL, Tata Motors, SKS Microfinance, Cairn Energy, UltraTech, JSPL, Pantaloon, Hind-Dorr Oliver

Orient Green Power Company (Discount to issue price(Rs. 47 - Rs. 55))and Ramky Infrastructure (Rs. 8 – 10 premium to issue price(Rs. 405 - Rs. 468)) and Electrosteel Steel (Rs. 1.10 - 1.20 premium to issue price(Rs. 10 - Rs. 11)) will list their equity shares today October 8, 2010 on exchanges

BS Transcomm IPO update: Overall subscribed 0.45x; NII: 1.74x, retail: 0.54x; closes today

Prestige Estates sets IPO price band at Rs 172-183/sh: South based real estate company Prestige Estates Projects is entering capital market with an initial public offering of Rs 1200 crore on October 12, 2010, as per advertisement in newspaper. The issue will close for subscription on October 14. The company has fixed its IPO price band at Rs 172-183 per share. Issue proceeds are proposed to be used for financing ongoing projects and projects under development; existing subsidiaries which investment will be utilized for the construction and development of commercial ongoing project, retail ongoing and retail projects under development undertaken by subsidiaries; acquisition of land; and for repaying certain loans.

Oberoi Realty IPO subscribed 1.34 times: Mumbai based real estate company Oberoi Realty's initial public offering of 395.62 lakh equity shares has been subscribed 1.34 times, as per NSE website. Qualified institutional investors' reserved portion subscribed 2 times The company aims to raise Rs 1000 crore through IPO. Oberoi has received commitment of Rs 185.15 crore from anchor investors as against allotment of 71,21,160 equity shares at Rs 260, at higher end of price band of Rs 253-260 a share.

RBI relaxes guidelines on restructured loans: The Reserve Bank of India (RBI) on Thursday relaxed norms governing restructuring of loans given to corporates, granting promoters more time to repay their share of funds to the bank. The promoters could be allowed to bring in 50% of their sacrifice, i.e. 50% of 15%, upfront and the balance within a period of one year," the RBI said in a notification. The RBI said besides cash payment, the promoter can also bring in contribution in the form of de-rating of equity, conversion of unsecured loan brought by the promoter into equity and interest free loans.

SAIL FPO unlikely by Nov 2010: Steel Secretary: The much-awaited follow-on public offer (FPO) of India's second-largest steel company, SAIL doesn’t seem to see the light of the day anytime soon. Company is still working out the pricing for the FPO and need to see the impact of Coal India initial public offering (IPO) on the market,

Tata Motors raises Rs 3,351 cr via QIP issue: Tata Motors has raised Rs 3351 crore via Qualified Institutional Placement (QIP) issue. The Board of Directors of the Company has decided to close the bid for the today. Late last week, Tata Motors had launched an issue of Ordinary Shares and ‘A’ Ordinary Shares that carry differential voting rights through the QIP route, for a base amount of US$525mn. The QIP originally comprised of US$200mn of Ordinary Shares and US$325mn of ‘A’ Ordinary Shares, with an option to up the size of the ‘A’ Ordinary Shares to US$400mn.

More to SKS script than meets the eye It just doesn`t add up. This May, the board of directors of SKS Microfinance gave CEO Suresh Gurumani a 50%-plus increment, hiking his annual compensation from Rs 15 million to over Rs 23 million. It also awarded him a Rs 80-lakh cash bonus. Three months after that, Gurumani helped complete a spectacularly successful IPO, the first by a microfinance institution (MFI) in India and the second the world over, fulfilling a key mandate the board had given him when he was hired in December 2008. The stock listed at a market cap of Rs 80 billion, exceeding most analyst expectations. And yet, within two months of what was a landmark listing for India’s microfinance sector, the board fired Gurumani.

ING Vysya suspends 2 officials over `disguised` forex positions The lure and pitfalls of the foreign exchange market have claimed their first victims this year. Two officials of ING Vysya Bank have been suspended after the private bank discovered disguised positions and losses in currency trades. One of the traders kept on building new positions when the market turned against him, with the hope that he would eventually salvage the losses - a folly that traders across financial markets in the world have committed in different points of time. ``About two months ago, the officials in question went on leave. ING has informed RBI about the development,`` said a person familiar with the development. ING officials were not available for comments.

Cairn Energy shareholders give nod to Vedanta deal Vedanta`s proposed deal to buy majority stake in Cairn India came a step closer on Thursday as shareholders of parent Cairn Energy overwhelmingly approved the deal, which could be worth USD 8.5 billion. India will decide on whether to approve the sale by the end of 2010, oil secretary S Sundareshan said on Thursday. A decision on the deal would need to be followed by a formal approval, which could take longer. Another Indian official said that he didn`t think state-run explorer Oil and Natural Gas (ONGC) had plans to pre-empt the stake sale, after ONGC said in September it was ``not passive`` to the deal and India`s trade minister said in August the company should have a say in the transaction. ``I don’t think the ONGC board has seriously considered a counter offer,`` the deputy to the oil minister said at a briefing in London on Thursday.

Sesa`s open offer for Cairn to be delayed Vedanta Group firm Sesa Goa`s open offer to acquire up to 20% in Cairn India will be delayed as market regulator Sebi is yet to approve the scheme. London-listed Vedanta Resources is acquiring a 40-51% in Cairn India that owns the nation`s largest onland oilfield, for USD 8.48 billion. As part of the acquisition, its group company Sesa Goa had on August 17 filed papers for making an open offer for additional 20% shares of Cairn India. The offer was to open on October 11, but in the absence of Sebi approval it is set to be delayed. When contacted, Sesa Goa managing director PK Mukherjee said, ``We are still awaiting Sebi clearances.``

UltraTech readies Rs 50 bn capacity expansion plan Ultratech Cement , India`s largest cement maker, has kick-started the next round of its capacity expansion which is likely to cost `50 billion, immediately after execution of its earlier plan of adding nearly 20 million tonne over the past four years. The Aditya Birla Group Company has placed orders for two 3.3-million tonne kilns on KHD Humboldt Wedag of Germany as part of its plan to add 9.4-million tonne capacity by 2012-13, said a company official who did not wish to be named. The Aditya Birla group spokesperson declined to comment as the company was in the silent period ahead of the September quarter earnings announcement.

Jet`s fund-raising to get delayed Jet Airways` plans to raise USD 400 million through a share sale to foreign institutions may get delayed as the government on Thursday deferred a decision on the proposal of the private air carrier. ``The airline needs to bring its foreign holdings down in some way or other as it crosses the FDI cap (of 49%) and then come back to us,`` an official source said. The Foreign Investment Promotion Board (FIPB), at a meeting on October 1, decided to defer the proposal after the civil aviation ministry said the airline was breaching the FDI guideline, sources said.

JSPL bids for majority stake in Zimbabwe steelworks The Naveen Jindal-controlled Jindal Steel & Power (JSPL) has bid for majority control in Zimbabwe`s largest steelworks, Zimbabwe Iron & Steel Company (Ziscosteel). ``We have submitted the price bid,`` the company`s Director and Group Chief Financial Officer Sushil Maroo confirmed, without divulging much details. However, he added the company was looking for opportunities that made a strategic fit. JSPL is one of five bidders that have submitted the price bid for Ziscosteel. ArcelorMittal South Africa is also believed to be in the race.

Emaar MGF project fails to take off in Dehra Dun Three years after Emaar MGF Consortium and Inter Continental Hotel group jointly won the bid for constructing a five-star hotel in Dehra Dun, the project has not yet taken off. The 165-room hotel is being constructed on 10 acres of land at Garhi Cantonment area of Dehra Dun. After winning the contract, the company faced the heat of the recession following which it sought permission from the government to construct a mall in the allotted land. The company was of the view that construction of the mall would be a better option for making the project viable.

Pantaloon Retail board approves raising up to Rs 750 cr via QIP

Metal stocks in focus: Alcoa reports strong Q3 earnings

Piramals in talks with IVRCL for Hind-Dorr Oliver – DNA ((Sudhir Reddy had told this week that he is open to selling Hind Dorr provided price is at substantial premium))


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