Monday, December 20, 2010

Market Outlook: Indian markets are expected to open flat

Market Outlook: Indian markets are expected to open flat and trade in the range of 5880-5990. On the global counters US stocks posted small gains for the week, despite all the major indexes either closing at or touching 52-week highs at some point, as investors weighed continued economic strength against European sovereign debt worries. The crucial support on the downside for the Nifty is 5850 and resistance at 6070.

Global events to watch:

Þ 4-Week Bill Announcement

Þ 3-Month Bill Auction

Þ 6-Month Bill Auction

Global indices Update @ 8:

Dow Jones : 11491 (- 07.34)

NASDAQ : 2642 (+05.66)

Nikkei 225 : 10271 (- 32.55)

Hang seng : 22656 (- 58.81)

SGX CNX Nifty : 5958 (- 02.00)

INR / 1 USD : 45.39

Stocks in action for the day: Hero Honda, NTPC, Brigade, IDFC, EIH, Union Bank, JSW, Jindal Power...

Listing Today: Claris Lifesciences & ZEE Learn

Hero Honda board approves new licensing pact with Honda -Hero group to acquire 26% stake from Honda-All existing products to continue -Company free to export products to new markets -Company free to set up own research & development, product development operations -Company change in ground operations in near future -Company, brand name to be changed 'over time' -Company, Honda Motor to ensure gradual, smooth transition

Honda Motor says: -To give Hero Honda licenses for existing, new products

Hero Group head says: -Deal with Honda in favour of Hero Honda -Termination done keeping in mind interests of shareholders

Hero Honda says: -Royalty rate to start declining from January 2011 -As of now, no segment-wise non-compete between Hero, Honda -Even now, Hero Honda & HMSI compete in same segments -Free to look for technology post JV termination -Expect most models to become royalty-free soon -Honda to exit JV some time next year

Union Bank raises BPLR by 0.50% to 13.25%: Public sector lender Union Bank of India today increased its benchmark prime lending rate (BPLR) by 0.50% to 13.25% on the back of hardening of interest rates across the economy. ``In view of the current micro-economic scenario and hardening of interest rates, UBI has decided to revise its BPLR by 50 basis points with effect from December 20,`` the bank said in a statement to the Bombay Stock Exchange. The rate increase will apply to old borrowers who have not migrated to the new base rate system, which was introduced from July 1 this year to make lending rates more transparent. Apart from the increase in rates on the lending side, the Mumbai-based bank also hiked its term deposit rates by up to 100 basis points, it said in the statement.

JSW, Jindal Power join race for Ispat Inds stake JSW Steel and Jindal Steel & Power have emerged as strong contenders for steelmaker Ispat Industries sources familiar with the development said. The companies are run by brothers Sajjan Jindal and Naveen Jindal respectively and are part of the OP Jindal group. While JSW has already signed a non-disclosure pact and is carrying out due diligence, Jindal Steel has been approached by Ispat which has appointed Kotak Mahindra Bank to explore possible suitors for a controlling interest, according to the sources. ArcelorMittal, controlled by LN Mittal group, is also carrying out due diligence and has signed a non-disclosure agreement with Ispat, the report said. However, Ispat told stock exchanges this month that reports of selling stake to ArcelorMittal was entirely speculative.

Moser Baer Solar plans up to USD 600 mn capex over 3-4 years Leading solar photovoltaic company, Moser Baer Solar (MBSL), has planned a capital expenditure of USD 500-600 million over the next three to four years for expanding its manufacturing capacity of crystalline cells and crystalline silicon modules in India, a senior company official said. ``Considering the huge potential in the solar power sector, both in the global as well as Indian markets, we have planned a capex of USD 500-600 million over the next three to four years for expanding our manufacturing capacity of crystalline cells and crystalline modules,`` Moser Baer India`s Group CFO, Yogesh Mathur, said in Mumbai. The company plans to raise the funds through a combination of debt, equity and internal accruals.

Tata Steel mulls bid for Ispat Industries Tata Steel, the country`s largest steelmaker, is contemplating the possibility of bidding for Ispat Industries, as lenders to the ailing steel company attempt to recover their dues totalling about Rs 70 billion. A team from Jamshedpur-based Tata Steel visited Ispat`s unit Dolvi near Mumbai, conducting a technical due diligence on the Ispat plant, similar to the exercise initiated by ArcelorMittal India three weeks back, according to people familiar with the development. A technical due diligence assesses the manufacturing capabilities of a company. A Tata Steel spokesman said his company was not in the race for Ispat. Earlier, EThad reported that a team of senior executives from ArcelorMittal, the world`s biggest steelmaker by capacity, had met the top management of Ispat Industries under a technical due diligence process. This visit has been confirmed by ArcelorMittal India.

Hindustan Tin eyeing Rs 3.15 bn turnover Metal can manufacturer Hindustan Tin Works today said its turnover is likely to rise by over 10% year-on-year to around Rs 3.15 billion in the current fiscal on the back of an increase in exports. ``We had recorded Rs 2.85 billion turnover last fiscal, which includes Rs 440 million exports. This year, exports are likely to go up to over Rs 600 million and the turnover to Rs 3.1-3.15 billion,`` Hindustan Tin Works Managing Director, Sanjay Bhatia said. Bhatia said the focus of the company for the last couple of years has been on increasing business abroad and expansion in newer markets. Hindustan Tin Works exports its products in 21 countries, mainly in Europe and the Middle East. The company enjoys an over 20% share of the Rs 12 billion domestic can market and the topline of the company has experienced a compounded annual growth rate of 12% over the past three-four years, as against the average growth rate of just 4% recorded by the industry as a whole.

NTPC on gas allocation: -Have asked for 22.8 mmscmd of gas from EGoM -Approached govt to allocate gas at any price, quantity -May use allotted gas for Kawas, Gandhar Projects -Solicitor General says EGoM allocation not to weaken case NTPC says: -Have requested govt to revive Lohari Nagpala Project -Have not received cancellation letter yet -Do not need funds via FPO -Up to govt to decide on further divestment alert: -Reports suggest NTPC may go in for FPO -NTPC raised Rs 8,000 crore via FPO in February

HMSI - -Producation at HMSI gurgaon plant disrupted by sec of employees -Labour unrest after alleged clash with security manager -HMSI suspends security manager, case inquiry on -Labour inspector & union brought in to resolve matter HMSI Says -Final decision on matter pending -Minor impact on production on Friday -Production at some lines disrupted -Incident in light of upcoming elections in January alert Saturday is weekly off for HMSI

Rita Menon, textile secretary says -Happy if DGFT regulates registration of cotton exports -More concerned about 55 Lakh bales that we want to keep as export cap on cotton -Cap on exports will not be lifted Till December 15, 30 lakh bales have been shipped -We will be re opening registration so that balance 25 lk bales can also be shipped

DoT - Sources Say -DoT to meet Home Ministry on 3G video call ban -3G video call ban to be taken up next week -AUSPI meets telecom minister Kapil Sibal -AUSPI ask Sibal to allow 3G video calls Association Of Unified Service Providers Of India -DoT asked telcos to stop 3G Video on December 14-MTNL/BSNL continue to offer 3G video calls.

AUSPI To Kapil Sibal: -Currently not possible to do real time intercepts -Provide level playing field to all telcos -Currently intercept possible at end of video calls -Telcos have interception facilities as per DoT norms -Same process for voice & data call monitoring -Security agencies have already cleared 3G services -Will take 6-9 months to upgrade systems further

IDFC sells 25% equity stake of IDFC Asset Management Company Limited and of IDFC AMC Trustee Company Limited to Natixis Global Asset Management of France for Rs 275 crore

Patni stake sale in last lap, likely to be announced this week – ET

Tata Steel plans to sell SA unit to raise USD 150 million – ET

Oil Ministry plans to raise LPG cylinder prices by Rs 50-100/cylinder – ET

EIH gets SEBI nod for rights issue, may spark open offer from both RIL and ITC if holding goes beyond 15% - ET

IOB hikes BPLR by 25 bps to 13.25%

ABG Infralogistics Ltd board meet on 22nd to consider buyback upto 10%

Aqua Logistics defers closing of GDR issue to jan 2011 - due to holiday season in international markets

Assam Company acquired all the shares of Duncan Macneill Power & Utilities Limited, an unlisted Company - becomes WOS

United Phosphorus Ltd acquired RiceCo LLC, USA along with its subsidiaries and certain assets of the International business of its Affiliate Company'

Bank of Maharashtra approved the revision in the Base Rate from 8.25% p.a. to 9.00% p.a. w.e.f. December 15, 2010.

Brigade Enterprises entered into a Joint Development Agreement for 16.50 acres of land for development of 1.80 million square feet in Whitefield, Bangalore. This will generate a turnover of around Rs 650 crore in the next 3 to 4 years

Finolex Industries proposed to set up a Rigid PVC Pipes manufacturing plant at Village Masart Taluka Padra, District Baroda, Gujarat with an annual capacity of 50,000 M.T. at an estimated cost of Rs 100 crore.

Velan Hotel board approves draft letter of rights issue - The size of the issue shall not exceed a maximum of Rs 65 crore inclusive of premium,

Viceroy Hotels Draft Scheme of Arrangement for Demerger of Bangalore Project Division to the Wholly Owned Subsidiary (WOS)

Federal Bank have decided to infuse an amount of Rs 25 crore as fresh capital in to its wholly owned subsidiary Company Fedbank Financial Services Limited

BLB Ltd incorporates a WOS - business of real estate, purchasing, selling and developing land or plot and other related activities.

Sharon Biomedicine has been allotted 10 acres of Land in MIDC, Chincholi, Sangli, Dist. Solapur, Maharashtra; Company will construct an USFDA approved Active Pharma Ingredients and Intermediate Plant


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