Thursday, December 2, 2010

Market Outlook: Indian markets are expected to drive up in positive terrain

Market Outlook: Indian markets are expected to drive up in positive terrain on the back of Strong global cues. US stocks ended more than 2% higher for the first trading day of the month, wiping out November`s losses, after several economic reports gave investors confidence the U.S. economy is improving. Asian stocks rose with a regional benchmark climbing the most in almost two weeks after U.S. economic reports and speculation that Europe`s debt crisis will be contained boosted confidence in a global recovery. Back to domestic markets Overall trend remains sideways with technically support is at 5910 and strong resistance around 6100.

Global events to watch:

Þ Monster Employment Index

Þ Jobless Claims

Þ Pending Home Sales Index

Global indices Update @ 8:

Dow Jones : 11255 (+249.7)

NASDAQ : 2549 (+51.20)

Nikkei 225 : 10166 (+178.0)

Hang seng : 23498 (+249.0)

SGX CNX Nifty : 6024 (+42.00)

INR / 1 USD : 45.70

Stocks in action for the day: Hero Honda, Dewan Hsng, HDFC, ICICI Bank, Emami, Great Offshore, ONGC, Mastek

MOIL IPO subsription reaches 56.29 times on final day of issue: Shares reserved for QIBs under the IPO were subscribed 49.16 times. Under Non Institutional Investors 144.9 times, under Retail Individual Investors (RIIs) 32 times

Hero, Honda agree to royalty at around Rs 2300-2400 cr: Hero and Honda have agreed to the royalty terms of around Rs 2,300 to 2,400 crore. The deal is virtually finalised and is on track to meet its December 31 deadline. Currently, Hero Honda pays around Rs 500 crore per year as royalty fees, which is around 2.2 to 3% of total sales. According to the talks, Honda will supply three new variants at 8% royalty. This (the three new variants), Honda had agreed to supply before the decision of terminating the joint venture. The Honda board has agreed to the sale at a discount to CMP (current market price). The board is convinced about the discount as the joint venture has been losing market share as well as margins. It is learnt that the Japanese automobile manufacturer also wants the existing portfolio to remain untouched while it is likely to allow flexibility in all but nine products. The Munjals are currently in talks with banks to organise funding.

Cabinet approves Rs 6,000 crore capital infusion to PSBs -Move to raise govt holding in PSBs to 58% -10 PSBs to benefit from capital infusion Alert: Rs 15,000 crore capital infusion already provided in budget

Wipro says -Company chairman Azim Premji to transfer 213 million shares to a trust (8.7% stake) -Azim Premji controls trust -Premji to retain voting rights of transferred shares -Azim Premji to transfer shares to trust by December 7 -Trust created to finance social, not-for-profit projects

Mastek buys assets of UK-based SEG Software Mastek says -SEG Soft's Assets to aid co's insurance products in North America -SEG Software asset buy by arm 'not a large deal' -See SEG Software assets buy aiding revenue after 3 years

Jubilant hives off polymer, agri business: Jubilant Life Sciences Limited said on Wednesday it has demerged its agri and performance polymers businesses into an independent company effective November 15. The demerged entity-Jubilant Industries Ltd-is expected to be listed on the stock exchanges by January 2011

Dewan Hsng to buy Deutsche Bank's Indian arm for Rs 1080 cr: Dewan Housing is planning to buy Deutsche Bank's Indian assets for Rs 1,080 crore, reports CNBC-TV18. It is learnt that promoters and investors will fund the deal. Deutsche Bank had put its Indian housing finance business on the block in October 2010, in line with a global restructuring of the company. If the deal for Deutsche Postbank Home Finance goes through, it would be Dewan Housing's second buyout after its 2004 purchase of Vysya Bank Housing Finance, boosting its loan book and pan-India presence.

HDFC, ICICI Bank, Corp Bank withdraw teaser rate loans” HDFC, ICICI Bank and Corporation Bank have decided not to extend their teaser home loan schemes, while two of the country`s largest banks, State Bank of India and Punjab National Bank , have decided to continue with their schemes till December 31. Teaser-rate loans are multi-year loans that bear low monthly repayment in the initial two-three years. In India, banks were offering a fixed rate of interest in the first few years and a floating rate, which would be the prevailing rate of interest on a home loan, for the remaining tenure of it. The move to withdraw the schemes gains significance in the context of concerns expressed by banking regulator, the Reserve Bank of India (RBI), in its November policy. It said that borrowers may find it difficult to service the loans once the normal rate of interest is applied. To tackle this, RBI asked banks to set aside higher capital - 2% provision from 0.40% earlier - on teaser loan schemes.

Emami frontrunner to bag Paras Pharma for about Rs 30 bn Even as the race to acquire Paras Pharma hots up with a host of pharmaceutical and FMCG companies in the fray, there is a strong buzz that homegrown company Emami is within striking distance of clinching the deal. Industry sources told TOI that Emami’s bid for the consumer healthcare firm was ``as good as sealed`` . Emami, which has shown a keen interest in Paras Pharma ever since the beginning of the bidding game, is understood to be shelling out around Rs 30 billion for a controlling stake in the Ahmedabadbased firm. Currently, while the promoters hold 30% stake in Paras, the remaining 70% stake is held by private equity firms, Actis Advisors and Sequoia Capital.

Welspun Ind to foray into tech textiles; invest Rs 7 bn Welspun India has earmarked around Rs 7 billion for foraying into technical textile, a top company executive said. ``We are planning to invest Rs 6-7 billion for the new arena of technical textiles and are waiting for the government`s Technology Up gradation Fund (TUF) scheme, which is expected to be revived soon,`` Welspun India President, Corporate Functions (Business HR, Strategy, Projects) Updeep Singh said here. For this purpose, the company will set up a research and development-based unit in Kutch area of Gujarat. The company is also eyeing up to 10% growth in its sales turnover this fiscal, he said.

ONGC share split gets government nod: Minister The cabinet has approved state-run explorer Oil and Natural Gas Corp`s planned stock split, road transport minister Kamal Nath told reporters on Wednesday, without giving any further details. ONGC had proposed a two-for-one share split to the government ahead of a planned follow-on share sale, Chairman R.S. Sharma said last month. Separately, a news agency reported the cabinet also approved issuing one free share for every one ONGC share held by stock holders, without saying where it got the information from. Chairman Sharma declined to comment on the bonus share offering when contacted by Reuters.

Great Offshore bags USD 4.3-million contract from GSPC Great Offshore today said it has bagged a multi-million contract with Gujarat State Petroleum Corp (GSPC) for deployment of its 2007 built state of the art Anchor Handling Tug Supply Vessel (AHTSV). The AHTSV, `Malaviya Twenty Three`, is being deployed in the KG basin at East coast of India, the shipping company said in a filing to the Bombay Stock Exchange (BSE). The one-year contract with the state PSU, valued at around USD 4.3 million, was awarded through international competitive bidding process, it said. ``Malaviya Twenty Three is built by Bharati Shipyard and has been serving GSPC since 2007 on a three-year contract,`` the company added.

Bharti, Punj Lloyd vie for TCIL stake in Hexacom Bharti Airtel and Punj Lloyd are the only companies bidding for Telecom Consultants of India`s (TCIL) 30% stake in Bharti Hexacom, officials in know of the deal told ET. The Sunil Mittal-promoted company, which has 70% in Hexacom, operates in six north eastern states (excluding Assam) and Rajasthan through Bharti Hexacom. When contacted, both Bharti Airtel and Punj Lloyd did not comment. The deal is estimated to be more than Rs 18 billion, which is the base price prescribed by the government appointed consultant. This values Hexacom, which has a customer base of around 13 million, at about Rs 60 billion.

Essar Steel looks abroad for auto partner hereEssar Steel wants to partner with a foreign company to consolidate its position in the automobile steel market in India. The company, soon to be a 10-million tonne per annum manufacturer, has 20-25% of the auto steel market. It does not wish to lose any of it to the recent joint ventures formed by various Indian steelmakers with Japanese ones. ``We`re getting a study done to identify which international auto companies are going to be big in India,`` Chief Executive Officer Malay Mukherjee told Business Standard. ``We would like to tie up with their preferred suppliers of steel.`` He said the study would enable Essar to decide on a partner for setting up an auto grade steel manufacturing unit. The consultant`s report is expected in three to four months. He added, ``our point is, we will take help in making automotive steel. We don`t only want the technology, but we also want that whoever is the provider enables us to open the door to its customers. Then only does it make sense.``

IOC aims to raise Rs 200 bn in follow-on issue The country`s biggest petro marketing company, Indian Oil Corporation (IOC), expects to sell its shares at around Rs 450 each in its follow-on public offer (FPO) expected early next year, Chairman B M Bansal told reporters here. Reacting to this, the share price of the government-owned company touched an intra-day high of Rs 395.75 at the Bombay Stock Exchange and closed at Rs 384.10, up 11% from the previous day. Bansal said the FPO, in which the government would divest 10% of IOC equity (it presently owns nearly 80%), along with the company selling an equal number of freshly issued shares, was likely in the third or fourth week of January. The company has hired six banks, including Merrill Lynch, Citigroup and ICICI Securities, to handle the public offer. Morgan Stanley, SBI Capital and UBS are the other banks. Bansal said the FPO would raise about Rs 200 billion, half each for the government and the company.

PNB hikes interest rate on term deposits -PNB hikes 8% interest rate on TDs of Rs 1-10 crore of 1 year & above

Cement numbers -UltraTech Cement November cement sales down 9.3% at 2.66 mt (YoY) -Jaypee Cement November cement sales up 13% at 1.1 mt

Sesa Goa closes third party mining operations in Orissa Sesa Goa says -Contract for 3rd party mining in Barbil expired on November 30 -Company was working on short-term renewals since June 2009 -Mining operations ceased now due to lack of viable commercial term -Orissa operation was the highest cost operation

Indian Bank Hikes BPLR By 25 bps To 13%

Murli Ind: Board meet today consider sale of cement business

Bharti, Punj Lloyd bid for TCIL’s 30% in Hexacom – ET


No comments: