Monday, January 31, 2011

Market Outlook: Indian markets are expected to open on dark note...

Market Outlook: Indian markets are expected to open on dark note on the back of depressing sentiments on the global counters. Negative news such as the chaos in Egypt will only add to the market volatility that has already been created by inflationary pressures. Asia trading lower; Hang Seng down 1.4%, Nikkei slips 1.2%. Global investors are worried that sticky inflation, led by spike in food prices, will impact India's consumption-led economic growth. The support for the Nifty is at 5400-5360 and resistance at 5625.

Results today: Andhra Bank, Asahi Infra, Bajaj Steel, Birla Cap, BPCL, DB Realty, Dabur India, DLF, GVK Power, NTPC, IDFC, Tata Comm, KEC Intl, Gujarat Fluorochemical

Global events to watch

Þ Personal Income and Outlays

Þ Chicago PMI

Global indices Update @ 8:

Dow Jones : 11823 (- 166.3)

NASDAQ : 2686 (- 68.39)

Nikkei 225 : 10233 (- 126.6)

Hang seng : 23343 (- 273.8)

SGX CNX Nifty : 5452 (- 92.00)

INR / 1 USD : 45.74

Stocks in action for the day: Maruti Suzuki, Telecom Counter, HDFC, Tata Power, HPCL...

Maruti Suzuki Q3 net profit slips 18% to Rs 565 cr: India's largest car maker Maruti Suzuki reported a standalone net profit of Rs 565.2 crore for the quarter ended December 2010, down 18% as compared to Rs 687.5 crore in same period the previous year. Net sales the company grew by 25.83% to Rs 9,276.7 crore in third quarter of financial year 2009-10 from Rs 7,372.6 crore reported in same quarter last year. Bottomline as well as topline numbers were below expectations. Market expected net profit of Rs 610 crore and revenues of Rs 9,513 crore.

Telecom spectrum to be given on mkt driven prices: Sibal Telecom Minister Kapil Sibal today announced the broad contours of the new National Telecom Policy, which has been in the works for several months. The minister plans to delink the licences from the spectrum. Spectrum would now be awarded on a market-based pricing mechanism. Sibal said the Telecom Regulatory Authority of India will give recommendations on the new mechanism. New licence to telecom companies will be in the nature of unified licence and licence holders will be free to offer any service. Further, he said, cancelled licences will be re-allocated under the new policy. For a fixed amount of cancelled licences, any amount of additional licences will be allocated under the market pricing mechanism. There would now be a uniform rate of revenue share to be paid by the operators as spectrum charge to the government. The reforms in policy is expected to have a direct impact on existing telcos like Bharti, Idea, Vodafone, and RCom. Spectrum held beyond 6.2 Mhz will be charged on the basis of market driven prices.

Following are the broad contours of the new policy:

• Will delink licence from spectrum

• Spectrum to be awarded on market based pricing mechanism

• TRAI wIll give recommendations on new mechanism

• Need to ensure adequate spectrum to go around

• Will provide adequate spectrum for operators

• New licence to telcos will be in nature of unified licence

• Licence holders will be free to offer any service

• No contractual spectrum any more

• No concept of initial/Start-up spectrum any more

• Uniform rate for all players for revenue sharing

• Want to make service technology-neutral

• New Telecom Policy is not with retrospective effect

• New Policy will create level playing field in telecom space

ONGC not to exercise rights in Cairn-Vedanta deal: Oil and Natural Gas Corp will not exercise its pre-emptive rights in Cairn Energy's plans to sell a controlling stake in its Indian unit to Vedanta Resources, its chairman said on Sunday. The decision could quicken the completion of a deal worth up to USD 9.6 billion and boost investor sentiment about India's business climate. ONGC has, in the past, said the royalty payment should be shared proportionately by the two partners.

HDFC debuts in education In its first ever investment in the booming education sector, Housing Development Finance Corporation (HDFC has picked up stake in Indus World Schools, a unit of education company Career Launcher. The deal size is valued at around Rs 400-500 million, according to industry sources with knowledge of the transaction. Private equity firm Gaja Capital Partners, an existing investor, is part in this round of funding that will finance the expansion plans for the education company. Kindergarten to class 12 (K-12 ) in India is one of the fastest growing segments accounting for about 40% of the USD 65 billion education market in 2010, and is expected to grow by 14% over the next two years.

Tata Power to refinance USD 270 mn loan raised for PT Bumi assets Tata Power, the largest private utility in the country, is negotiating to refinance debt of USD 270 million, raised to buy assets of Indonesia`s PT Bumi Resources, said bankers aware of the development. The company had purchased 30% stake in two thermal coal mines and trading companies of Bumi for USD 1.1 billion in 2007. The acquisition was then backed by UK`s Barclays Bank. Tata Power did not respond to phone calls seeking comments for this story. The company is searching for fresh coal mine acquisitions in Indonesia and Africa. It may also increase its stake in the Bumi assets, including the mines PT Kaltim Prima Coal (KPC), and PT Arutmin Indonesia. It had borrowed USD 950 million by way of a one-year bridge loan to finance the purchase, made through two special purpose vehicles, Tata Power Mauritius and Tata Power Cyprus. In August 2008, some USD 850 million worth loans were refinanced. Of this, about USD 580 million were non-recourse loans with six-year tenure. The rest, around USD 270 million, is being refinanced, the bankers said.

ITC to set up Rs 30 bn paper unit in Andhra Diversified conglomerate ITC on Sunday said it will invest up to Rs 30 billion to set up a paper manufacturing unit in Andhra Pradesh as part of plans to double capacity over the next five years. ``The total project cost for the new greenfield project will be about Rs 30 billion. It`s part of our plan to touch 1 million tonnes capacity in the next five years,`` ITC Executive Director Pradeep Dhobale told reporters here. The company`s paperboards and specialty papers division, which caters to a wide spectrum of packaging, writing and printing paper requirements, has four manufacturing units at present, with a total capacity of 5.5 lakh million tonnes per annum.

HPCL plans lubricant blending facility State-run Hindustan Petroleum Corporation (HPCL) may turn its Mumbai refinery into a national lubricant blending facility after a new refinery at Ratnagiri, coastal Maharashtra, takes shape. ``Engineers India is giving a detailed feasibility report on the new refinery in Ratnagiri by the end of next month. The report will not only provide project details of the new refinery but also look at what good use can the old refinery be put to. An option is to convert it completely into our lubricant blending unit,`` said a senior official from HPCL.

Crompton Greaves reported net profit of Rs 232.80 crores for the quarter ended December against Rs 199.64 crores in the same quarter a year ago. Net sales stood at Rs 2396.99 crores against Rs 2246.42 crores.

ONGC has fixed February 09 as the record date for the purpose of ascertaining the eligibility of the shareholders / beneficial owners who would be entitled to receive sub-divided shares and bonus shares.

Bharat Electronics posted net profit of Rs 170.59 crores for the quarter ended December 2010 as compared to Rs 223.87 crores for the same quarter previous fiscal. Total income increased to Rs 1419.04 crores from Rs 1284.66 crores during the same period.

Sundaram Clayton posted standalone net profit of Rs 9.78 crores for December 2010 quarter against Rs 5.19 crores in the corresponding quarter a year ago. Net sales were at Rs 197.82 crores from Rs 142.36 crores.

Havells India reported net profit of Rs 61.12 crores for the quarter ended December 2010 against Rs 58.93 crores in the same quarter a year ago. Net sales rose to 722.14 crores against Rs 590.81 crores in the same quarter previous fiscal.

Cadila Healthcare has signed an agreement with Bayer HealthCare to set up 50:50 joint venture in the name of "Bayer Zydus Pharma" for the sales and marketing of pharmaceutical products in India.

Sumeet Industries has approved raising funds through placement of equity shares to Qualified Institutional Buyers and has deferred the Right Issue until further notice.

Tulsyan NEC has approved The Rights Issue in ratio 2:1 ie. two equity shares for every one share held by the shareholders as on the record date to be fixed at a later date.

Simbhaoli Sugars has announced a joint venture agreement with ED & F Man Holdings to set up a green field sugar refinery with a capacity of 1000 tones of sugar per day, at Kandla, West Coast, Gujarat, India through the joint venture company, Uniworld Sugars.

Redington’s standalone net profit grew to Rs 29.49 crores for the quarter ended December 2010 against Rs 27.28 crores in the same quarter a year ago. Net sales stood at Rs 2149.44 crores for quarter against Rs 2031.89 crores in the corresponding quarter previous fiscal.

Reliance Power plans to expand four large coal-fired power projects by 50 per cent to generate an additional 8,000 MW of power, which may be sold at more attractive merchant rates.

Siemens makes open offer to acquire 19.82% stake at Rs 930/sh (CMP Rs 727), promoters currently hold 55% stake, offer opens of March 25, closes on April 13

ITC to setup Rs 3000 crore paper unit in Andhra Pradesh as part of plans to double capacity over the next five years (ET)

Deepak Fertilizers plans to invest Rs 80-100 corre to setup a plant to manufacture customized fertilizers in the next 18-24 months (ET)

Tata Power in negotiations to refinance close to USD 300 million of debt raised to buy assets of Indonesia’s PT Bumi Resources (ET)

SAIL to setup 1000 MW power plant in Sultanpur Uttar Pradesh (ET)

Nirma set to delist its shares at Rs 260/share currently holding 22.83% (ET)

Dhanlaxmi Bank plans to raise Rs 1100 crore to improve its capital position ahead of the entry of new private banks (ET)

JSW to setup downstream facility on the 700 acres of the land of BSAL has acquired the land for Rs 210 crore (FE)

GTL Infra & VIOM networks eyeing to buy Vodafone Essar Ltd’s 7000 telecom towers (Mint)

United Phosphorus set to restart its Ankleshwar unit in Gujarat which was closed down after Chinese companies started dumping phosphorus (DNA)

Lupin plans to launch products in USA, Latin America, Australia and South Africa (DNA) Lupin in talks to buy 300 acres from Indiabulls near Nashik in SEZ for around Rs 300 crore (HT)

Kingfisher gets a Rs 1644 crore debt relief through debt restructuring (BL)

PharmAsia News says Zenotech gets USFDA nod for injectibles facility near Hyderabad

Simbhaoli Sugar allots 30 lakh shares at Rs 50/sh (CMP Rs 47) on preferential basis to non promoters

Eros International & Ocher Studios to co-produce Rajnikanth's next movie RANA

Renaissance Jewellery board approves issue of 20,00,000 convertible share warrants on preferential basis

Kerala Ayurveda Ltd (also listed) & Tata Global Beverages Ltd & Kerala Ayurveda Limited sign MOU to form a Joint Venture for Product Development

Binani Industries proposes to acquire Composite Products, Inc, USA. Its company engaged in the manufacture of Composite Products, and acquisition through the merger of the Company's SPV, Binani Composites, USA with it.

CEBBCO obtained Vendor approval from Wagon Directorate of RDSO, Ministry of Railways, for refurbishment work of BOXNR Wagons for the Indian Railway

Emami Ltd: Emami Overseas FZE a step down WOS of company has acquired 90.59% (1926 shares) Share Capital of M/s. Pharma Derm S A E Co

Persistent System: Ex dividend by Rs 3

Videocon in F&O ban


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