S&Y Market View India

Pick up in FII puchases

2006-08-30T23:39:00.000-07:00

Huge inflow of Rs 368.90 crore on 29 August.Foreign institutional investors (FIIs) were buyers for the fourth day in a row on Tuesday (29 August 2006). They bought shares worth a net Rs 368.90 crore compared to Monday’s (28 August) purchases of Rs 43.40 crore.

FIIs made gross purchases worth Rs 1,485.60 crore and gross sales worth Rs 1,116.70 crore on 29 August 2006. The 30-share BSE Sensex surged 87.33 points (0.75%), to settle at 11,706.85 on 29 August 2006.

FII inflows for August 2006, till 29 August, stood at Rs 4,306.20 crore compared to Rs 4,793.10 during the same period last year.

For the calendar year 2006, the total FII inflows aggregate Rs 17,052.50 crore, a decline of 47.68% compared to Rs 32,596.20 crore during the same period last year.

Stock Alert

2006-08-30T23:37:00.000-07:00

Gujarat Gas may fall as it warns of Rs 6 crore hit in Q3 profits
Gas transporter Gujarat Gas Company said its pretax earnings for July-September 2006 quarter would be hit by Rs 6 crore after floods in Gujarat affected gas supplies and prices. "Lower offtake of gas by some of the customers and alternative sourcing of gas supplies at higher rates is expected to impact the company," Gujarat Gas said in a statement on Wednesday. The company, which is an arm of Britain's BG Group, said the impact was limited only to the present quarter. Gujarat Gas runs a city gas distribution network in the city of Surat and its operations were hit after flood waters entered its facilities in the region.

Packaging firm Essel Propack said on Wednesday it signed an agreement to buy out Packaging India, a unit of personal care and cosmetic products maker CavinKare Pvt. Ltd.

Sun Pharmaceutical Industries has received final approval from the US Food and Drug Administration to market gabapentin capsules and tablets. Gabapentin is a generic version of Pfizer Inc.'s epilepsy drug Neurontin.

Tractor and motorcycle maker Escorts said on Wednesday its board had approved the divestment of its entire shareholding in Carraro India to its joint venture partner Carraro S.p.A. of Italy for 20 million euros. Escorts decided to sell off the stake because the company wants to focus on three core areas - tractors, construction equipment and auto components.

NCL Industries said on Wednesday its board had approved the issue of one s0hare for every six held in NCL Energy for the merger of the two companies. NCL Energy is engaged in generation of hydel power, having two projects of 7.5 MW and 8.25 MW in Andhra Pradesh and Karnataka respectively, generating power for the last few years.

State-run Andhra Bank said on Wednesday its board approved forming a joint venture with Japan's Dai Ichi Mutual Life Insurance and Bank of India to enter the life insurance business.

How will the market be today??

2006-08-30T23:10:00.000-07:00

Volatility may prevail ahead of derivatives expiry
Steady to firm Asian markets and figures showing a surge in FII inflow in the past two trading sessions may trigger firm opening on the domestic bourses today. Oil price rose slightly but it remains sharply lower that a record high of $78.40 a barrel hit last month.

Volatility may be high today due to alternate bouts of short covering and bull unwinding in the derivatives segment ahead of expiry of August 2006 derivatives contracts. August derivatives contrasts expire today. The rollover from August to September contracts has been about 55% so far.

Asian stocks edged higher on Thursday (31 August) after the US government on Wednesday reported that gross domestic product grew at a pace that was slightly faster than first reported, in the second quarter. Key benchmark indices in Hong Kong, Japan, South Korea and Singapore were up by between 0.42% to 1.6%.

The Nasdaq rose and the blue-chip Dow edged up on Wednesday after a government report showed economic growth, while slowing, remains fairly strong. But comments late in the session from Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, took some of the shine off the market's advance. The Dow Jones industrial average advanced 12.97 points, or 0.11% to end at 11,382.91. The Standard & Poor's 500 Index was down a mere 0.01 of a point, or unchanged on a percentage basis, to finish at 1,304.27. The Nasdaq Composite Index rose 13.43 points, or 0.62% to close at 2,185.73.

NYMEX crude for October delivery rose 34 cents to $70.37 a barrel in Asian trading on Thursday despite an unexpected build in US crude and gasoline inventories, as Iran appeared set to defy a UN deadline to halt nuclear fuel work -- exposing the world's fourth largest oil exporter to possible sanctions.

As per provisional data, FIIs bought shares worth a net Rs 287 crore on Wednesday (30 August), the day when Sensex rose 17 points. The net FII inflow on Tuesday (29 August) was Rs 369 crore. Sensex had risen 87 points on that day.

Mutual funds bought shares worth a net Rs 73 crore on 29 August. Mutual funds are sitting on good amount of cash and they may step up purchases at declines.

Nifty 50 Quotes at End Of Day

2006-08-30T05:41:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3425.7	3430.35	0.14
ABB	2826.95	2803.95	-0.81
ACC	912.35	922.25	1.09
BAJAJAUTO	2720.4	2689.6	-1.13
BHARTIARTL	415.25	413.8	-0.35
BHEL	2283.3	2283.6	0.01
BPCL	352.65	373.75	5.98
CIPLA	248.3	248.35	0.02
DABUR	138.2	138.3	0.07
DRREDDY	713.4	719.3	0.83
GAIL	271.55	270.6	-0.35
GLAXO	1202.05	1203.85	0.15
GRASIM	2225.8	2264.75	1.75
GUJAMBCEM	114.75	114.75	0
HCLTECH	580.6	578.85	-0.3
HDFC	1290.7	1300.7	0.77
HDFCBANK	845.45	840	-0.64
HEROHONDA	719.3	720.4	0.15
HINDALC0	175.4	173.4	-1.14
HINDLEVER	234.9	236.5	0.68
HINDPETRO	270.75	282.9	4.49
ICICIBANK	595.3	593.9	-0.24
INFOSYSTCH	1805.8	1801.2	-0.25
IPCL	294.2	293.7	-0.17
ITC	184.65	187.35	1.46
JETAIRWAYS	560.25	556.6	-0.65
LT	2433.95	2430.5	-0.14
M&M	656.85	657.35	0.08
MARUTI	855.2	862.3	0.83
MTNL	158.5	161.3	1.77
NATIONALUM	208.75	204.75	-1.92
ONGC	1221.6	1221.45	-0.01
ORIENTBANK	195.5	198.05	1.3
PNB	463.2	471.75	1.85
RANBAXY	395.5	405.3	2.48
REL	448.7	439.5	-2.05
RELIANCE	1118.85	1128.8	0.89
SAIL	77.2	74.7	-3.24
SATYAMCOMP	818.7	819.45	0.09
SBIN	922.05	930.75	0.94
SIEMENS	1052.8	1049.85	-0.28
SUNPHARMA	906.7	905.8	-0.1
SUZLON	1236.05	1235.6	-0.04
TATAMOTORS	845.4	854.25	1.05
TATAPOWER	538.8	526.3	-2.32
TATASTEEL	517.25	506.85	-2.01
TATATEA	829.2	821.45	-0.93
TCS	990.1	983.8	-0.64
VSNL	415.95	421.6	1.36
WIPRO	525.6	526.35	0.14
ZEETELE	287.75	289.6	0.64

Markets Today

2006-08-30T05:37:00.000-07:00

Sensex ends nearly flat
The benchmark index ended positive after witnessing high volatility throughout the day. Index heavyweights RIL, SBI, ITC and Ranbaxy propelled the barometer index above the 11,750 mark in late afternoon trade.With today’s 17-point surge, the Sensex has advanced 317 points (2.78%) in the last five sessions, from 11,406.65 on 23 August 2006. RIL has led the rally from the forefront.

The BSE 30-shares Sensex ended 17.07 points (0.15%) higher, on 11,723.92. After opening firm at 11,735.05, the Sensex showed signs of nervousness and started declining. The slide continued till the Sensex hit a low of 11,643.38.The barometer index had surged to a fresh high of 11,756.08, in late afternoon trade as buying intensified.It oscillated 113 points, with a high degree of volatility, which is expected to remain high till Thursday, ahead of the expiry of Futures & Options contracts for August.The S&P CNX Nifty rose 4.65 points (0.14%), to 3,430.35.

The market-breadth, strong in early trade, turned negative as selling pressure ate into small-cap and mid-cap stocks. However, it has also recovered along with the broader market. For 1,064 shares that advanced on BSE, 1,461 declined. As many as 72 shares were unchanged.The BSE Mid-Cap index was down 0.09% while the BSE Small-Cap index lost 0.35%.The total turnover on BSE amounted to Rs 2,607 crore. It was lower than that of Tuesday’s Rs 2,715 crore.Among the 30-Sensex pack, 17 declined while 13 advanced.

Ranbaxy Laboratories jumped 2.40% to Rs 405 on a volume of 4.30 lakh shares after the company got a favourable ruling from a Norwegian court involving two patents on Atorvastatin. Atorvastatin is a cholesterol-lowering drug marketed by Pfizer as Lipitor. A Norwegian court ruled in its favour, and against Pfizer Inc., in a case involving two patents of a cholesterol-lowering drug. An Oslo city court found that Ranbaxy's Atorvastatin did not infringe upon Pfizer's Norwegian patents, the Indian pharma major said in a statement.

Index heavyweight Reliance Industries (RIL) rose 1.11%, to Rs 1,129.15 on a volume of 12.06 lakh shares. It surged to a high of Rs 1134.95, while the low for the day was Rs 1,107.

ITC (up 1.85% to Rs 188), Grasim (up 1.62% to Rs 2,260) and SBI (up 1.20% to Rs 932.15) were the other gainers.

REL (down 2.40% to Rs 437.45), Bajaj Auto (down 1.20% to Rs 2685) and NTPC (down 1.92% to Rs 125) were prime losers.

Reliance Communications lost 1%, to Rs 306 on a volume of 9.26 lakh shares. The company has deployed a next generation IP based ILD network, which will have a capacity to carry 12 billion minutes of voice traffic annually.

RIL was the top-traded counter on BSE with a total turnover of Rs 135.74 crore followed by Tata Steel (Rs 76.67 crore) and Tech Mahindra (Rs 64.61 crore).

Two block deals, of 8.17 lakh shares and 2.46 lakh shares, were executed in the Eveready Industries counter at Rs 99.50 and Rs 100 per share respectively by 12:30 hours. The stock ended 4.90% lower, at Rs 98.10, on a cumulative volume of 15.06 lakh shares.

Metal stocks came under pressure today following reports that steel prices may be cut by Rs 750 to Rs 1,000 per tonne, from 1 September 2006, in line with global metal prices. Also, PSU steel maker SAIL will decide the quantum of price cut Thursday. This soured the sentiment in metal stocks.

The BSE Metal index lost the most from among sectoral indices, plummetting 184.92 points (2.20%), to 8,221.80. Tata Steel (down 2.20% to Rs 515.65), SAIL (down 2.80% to Rs 75.10), Essar Steel (down 3.43% to Rs 36.60), Tata Sponge (down 1.93% to Rs 111.50), Hindustan Zinc (down 4.23% to Rs 577.20), Sterlite Industries (down 3.60% to Rs 421) and Hindalco (down 1.37% to Rs 173.10) were the major losers.

Refinery shares edged higher on renewed buying as crude oil price fell below $70 a barrel, its lowest in more than two-months. A fall in crude oil price, the government’s decision to issue oil bonds and value-buying has aided refinery shares in the past few days.

HPCL (up 4.30%, to Rs 283), BPCL (up 5.86% to Rs 373.25), Indian Oil Corporation (IOC) (up 1.66% to Rs 493.50), IBP (up 1.10% to Rs 486.50), Chennai Petroleum (up 1.4% to Rs 201) and Kochi Refineries (up 6.05% to Rs 163) advanced.

Among side-counters, Jay Bharat Maruti jumped 10.83%, to Rs 110.50 on expectations that it will shortly announce a record date for bonus issue. The company had already declared a liberal 1:1 bonus issue on 01 August 2006.

Infotech Enterprises rose 1%, to Rs 212 after its wholly-owned subsidiary, Infotech Enterprises America, signed an agreement with IBM to jointly provide services to assist clients across the globe in accelerating the deployment of product lifecycle management (PLM) and engineering solutions for the manufacturing industry.

United Phosphorus surged 3.67%, to Rs 240 on purchase of crop protection products from Bayer CropScience AG, Germany, to the tune of Euro 43.5 million, which also includes inventories. Among the products purchased are systemic carbamate herbicidal active ingredient Asulam (brand names Asulox Asilan ) and two insecticidal products. Bayer CropScience has retained certain rights related to non-agricultural uses in strategic markets.

Praj Industries surged 2.12%, to Rs 178.10 after its board earmarked Rs 100 crore for expansion and acquisitions of an engineering company in the US. The company has also planned investments in a new R&D center, two manufacturing workshops nearer to the port and in expanding the engineering center at Pune. This expenditure will be carried out over a period of 12-15 months.

Emco rose 0.70% to Rs 533 after it bagged a Rs 270 crore power transformer order from Karnataka Power Transmission Corporation.

Hercules Hoists spurted 6.30%, to Rs 2,380 on fixing 15 September 2006 as a record date for allocating 1:1 bonus shares.

Indo Asian Fusegear rose 1.66%, to Rs 137.50 on a high volume of 25.43 lakh shares after it was reported that Indo Asian Fusegear plans to invest Rs 30 crore in a joint venture with a unit of Spain's Simon Holding. The joint venture will make wiring accessories and home automation systems in India.

Cadila Healthcare turned ex-bonus today, issuing 1:1 bonus shares to shareholders. The scrip closed at Rs 338 on a volume of 16,929 shares.

The Hang Seng index rose 201.43 points (1.18%), to 17,284.71 while the Nikkei 225 index lost 18.54 points (0.12%), to 15,872.02.

US markets rebounded from their early lows and ended with steady gains on Tuesday after minutes from the last Fed meeting mellowed concerns about rate hikes. The Dow Jones advanced 18 points to 11,370, while the Nasdaq Composite rose 12 points, to finish on 2,172.

Crude oil prices rose after a sharp decline on Tuesday; the Nymex light crude oil for October delivery rose 51 cents, to $ 70.22 a barrel.

On 28 August 2006, FIIs were net buyers of stocks to the tune of Rs 43.40 crore (gross purchases worth Rs 806.50 crore and gross sales of Rs 763.10 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 10.84 crore (gross purchases worth Rs 331.73 crore and gross sales of Rs 342.57 crore).

Hot News

2006-08-30T05:31:00.000-07:00

MIRC Electronics hits a purple patch
MIRC Electronics surged 20%, to Rs 22.10, with the scrip rising on a high volume of 23 lakh shares on BSE.Today the volume was much higher than the average daily volume in the past one year (1.3 lakh shares) on BSE .The stock has surged since early this month on the back of a recovery in small-cap and mid-cap shares. From a low of Rs 15.60 on 7 August 2006, it has gained 41.6% to the current Rs 22.10.

The current price of Rs 22.10 discounts its FY 2006 (year ended 31 March 2006) EPS of Rs 2.30, by a PE multiple of 9.60.

To reduce dependence on a single product for growth, MIRC ventured into the audio, air-conditioner and the home appliances market in recent months to leverage the strength of the Onida brand.

The company enjoys 13% share in the Indian colour television (CTV) market. During the recently concluded soccer world cup, the company initiated an aggressive advertising campaign to promote its premium electronics products along with its low cost products. This will augur well for the company during the coming festive season.

MIRC Electronics competes with leading MNC brands like LG Electronics, Samsung, Sony, Phillips in its core CTV business.

The company’s recent initiative to foray into telecom service is quite interesting. Although the business structure has not been decided on that front, the company may become a MVNO (Mobile Virtual Network Operator). In such an arrangement, the company provides the branded last mile mobile service to customers on a major telecom operators network.

For Q1 June 2006, MIRC Electronics reported 15% growth in net profit to Rs 7.29 crore, on 40% growth in sales to Rs 333.50 crore.

Hot News

2006-08-30T05:28:00.000-07:00

Solar business consolidation plan makes Moser Baer volatile
Moser Baer rose 1.84% to Rs 193.50 in early trade after the company announced plans to invest $ 17 million in its solar technology arm, but soon pared gains.The scrip was trading flat at Rs 190.A thin volume 5,238 shares was traded on the BSE.The counter has seen much volatility in the last few weeks. From a low of Rs 169.85 on 24 July, it advanced amid much volatility to close at Rs 190 on 29 August 2006.

Moser Baer India's board has approved an investment of $ 17 million in Moser Baer Photo Voltaic (MBPV), its wholly-owned subsidiary, in the high growth global photo voltaic industry. This investment will be in a phased manner and provide further impetus to MBPV's technology and R&D initiatives.

MBPV is setting up a PV cell & module manufacturing project with an 80 Mw capacity in India's first renewable energy SEZ at Greater Noida, UP, India.

The global photovoltaic market is on a high growth curve - sales expected to grow over $ 40 billion by 2010. This demand is also highly price elastic. A lowering of PV electricity costs to conventional levels could exponentially expand this market as photo voltaic (PV) starts to penetrate into base load demand of electricity.

Last month, Moser Baer India proposed a 100% subsidiary in Cyprus with an initial capital of Euros 25,000 for acquiring / setting up optical media and other businesses, including acquiring future technology in Europe, US and the rest of the world. The proposed subsidiary would help identify opportunities in global R&D in optical media and other technologies and simultaneously, look for setting up greenfield projects in Europe and other global markets.

In late July, the company had begun exporting HD DVD-R (recordable), a next generation format, to its global original equipment manufacturer (OEM) customers. The HD DVD-R has a capacity of 15 GB and offers more than three times the data storage capacity of standard DVD media.

On 20 February, Moser Baer India announced that it will establish and invest in a new public limited subsidiary, to function as 'developer' of SEZs. The company has decided to set-up this firm as a special economic zone unit.

Moser Baer India registered a net profit of Rs 6.47 crore for Q1 June 2006 compared to a loss of Rs 11.15 crore in Q1 June 2005. Net sales rose 30% to Rs 454.52 crore from Rs 349.88 crore.

Ranbaxy upbeat on favourable court verdict
Ranbaxy Laboratories surged 1.52%, to Rs 401.50 on getting a favourable ruling from a Norwegian court involving two patents on Atorvastatin.As many as 1.99 lakh shares were traded on the BSE.The scrip witnessed a bout of volatility in the first quarter of FY 2007. It moved up from Rs 393.15 on 23 March to Rs 504.15 on 21 April on three overseas acquisitions. Here, the scrip dropped to Rs 470.55 on 27 April, only to rise to Rs 522 by 2 May. Thereafter, it tumbled in a weak market to Rs 342.15 by 8 June 2006. After finding support at this level, the stock rose to Rs 391.20 on 25 June as the market recovered from a bearish hold. Thereafter, the stock slipped to Rs 320.40 on 17 July 2006 only to rally to Rs 395.50 on 29 August on strong Q1 results and on US FDA approvals for generic entities.

At the current market price of Rs 401.50, Ranbaxy Laboratories trades at 52.14 times its Q2 June 2006 annualized consolidated EPS of Rs 7.70.

Ranbaxy Laboratories has announced that a Norwegian court has ruled in favour of the company in its case against Pfizer, involving two patents on Atorvastatin. Atorvastatin is a cholesterol-lowering drug marketed by Pfizer as Lipitor.

Recently, Ranbaxy Laboratories launched its Soliten (Solifenacin) in India for managing chronic urological disorder. The product is being introduced for the first time in India. Soliten will be sold in dosage form of 5 mg and 10 mg tablets.

Ranbaxy Laboratories has plans to sell a manufacturing facility in Ireland and consolidate its Romanian operations. In June, Ranbaxy acquired Romania's Terapia S.A. for $ 324 million, to boost its presence in the fast-growing CIS markets.

Earlier this month, Ranbaxy Laboratories received tentative approval from the US Food and Drug Administration for risperidone oral solution, to treat schizophrenia, whose total annual sales touch $ 66 million. Further, the company had signed a deal in July with the Canada-based Janssen-Ortho to supply generic risperidone tablets in the North American nation.

In early July, Ranbaxy Laboratories received approval from the US Food and Drug Administration to manufacture and market Cefprozil oral suspension USP, 125 mg/5ml and 250 mg/5ml. The total annual market sales for Cefprozil are estimated at $93 million.

Faced with tough pricing pressure in the US, Ranbaxy has turned to Europe. It purchased Romania's Terapia for $324 million earlier this year, followed by Belgium's Ethimed NV, GlaxoSmithKline's Italian and Spanish generic business, and the rights and assets of Senetek Plc's autoinjector device. Europe is the largest generics market in the world after the US.

In mid-July Nihon Pharmaceutical Industry (NPI), a joint venture of Ranbaxy Laboratories and Nippon Chemiphar, launched the generic versions of Clarithromycin as well as Terbinafine tablets in Japan. Clarithromycin is an anti-biotic and Terbinafine an anti-fungal with market sizes of around $400 million and $300 million respectively in Japan.

In early June, Ranbaxy Laboratories struck a strategic partnership with US-based Invagen Pharmaceuticals to market Zonisamide capsules in the US.

Ranbaxy Laboratories registered a consolidated net profit growth of 20% to Rs 121.10 crore (Rs 101.30crore) for Q2 June 2006. Net sales during the period rose 9% to Rs 1,433.90 crore (Rs 1,317.70 crore).

SAT slaps Rs 2 lakh fine on Sebi

2006-08-29T23:06:00.000-07:00

The Securities and Exchange Board of India (Sebi) has been penalised by the Securities Appellate Tribunal (SAT) for wrongly debarring a listed company and its promoters from accessing the capital market for a period of five years.

The tribunal has not only set aside the Sebi order debarring these entities but has also directed the regulator to pay the cost of the litigation to these entities.

SAT in its order, the copy of which is available with FE, has asked the Sebi to pay Rs 2 lakh within six weeks from the date of the order. The SAT order was passed on August 24, '06. This is the second instance of SAT asking the capital market regulator to cough up the cost of litigation to the market intermediaries.

Earlier this year, the three-member bench headed by presiding officer, Justice NK Sodhi had directed Sebi to pay Rs 50,000 as cost of litigation to Times capital Ltd, a stock broker. The broker was asked to pay the turnover fees, where none was due from him and the regulator withheld his various permissions.

In the instant case, Sawaca Business Machines Ltd (Sawaca) was debarred from accessing capital market through an order passed by Sebi whole time member AK Batra on July 13, 2004.

The Sebi contention was that the preferential allotment of shares made by the Sawaca was not in accordance with the law and that the company had resorted to fictitious book entries for showing receipt of subscription towards the preferential allotment and thereby violated Sebi's Fradulent and Unfair Trade Practices (FUTP) Regulations.

SAT in its order disposed off all the allegations made by Sebi in impugned order and said it is arbitrary to the case. By debarring the appellant (Sawaca), who is a listed company, its reputation has been damaged. The Sebi order has also worked as detriment to the shareholders of Sawaca.

“The damage caused is irreparable both to the company and its shareholders. We are, therefore, of the view that this is a fit case where the Board (Sebi) should be burdened with heavy costs.”

Stock Alert

2006-08-29T22:59:00.000-07:00

EMCO may gain on new order win
EMCO has received power transformers order worth Rs 270 crore from Karnataka Power Transmission Corporation (KPTCL) which is funded by Power Finance Corporation and is to be executed within 1 year. With this order, the company's order book stands at a record high of Rs 810 crore, EMCO said in a statement.

Lloyd Electric & Engineering has signed a memorandum of understanding (MOU) with Hanyung Alcobis Company, a Korea based company, for manufacturing of Roll Bond and Fin Cross Evaporators including all type of Evaporator/condensor for refrigerators produced by the Korean Company.

Moser Baer India has received the approval from its board of directors for investment of an additional $ 17 million (Rs 79.20 crore) in Moser Baer Photo Voltaic Ltd (MBPV), a wholly owned subsidiary in the high growth global photo voltaic industry. This investment will be in a phased manner and provide further impetus to MBPV's technology & R&D initiatives in exciting & emerging technology verticals in the global PV space, Moser Bear India said in a statement.

Geometric Software Solutions Company has announced formation of a new group for Virtual Product Design. This would further align the focus of the company to that of the OEM's who are moving away from physical prototypes to virtual or digital mock ups to reduce cost and time to market entry of new models, the company said in a statement. The VPD group will facilitate additional capability to the company in terms of offering services in the area of advanced CAE and CFD for automobile, aerospace and the general engineering domains, the company said.

Packaging company Radha Madhav Corporation said late on Tuesday that its board had decided to allow foreign investment in the company up to 30% of the expanded capital.

Generic drugmaker Ranbaxy Laboratories on Tuesday said a Norwegian court ruled in its favor against Pfizer Inc. involving two patents on a cholesterol-lowering drug. The Oslo city court found that Ranbaxy's Atorvastatin was not infringing Pfizer's Norwegian patents, Ranbaxy said in a statement.

How will the market be today??

2006-08-29T22:56:00.000-07:00

Volatility may heighten ahead of derivatives expiry
The market may open firm on the back of steady to firm Asian markets and on further fall in crude oil price. In the next two days, the market may turn volatile due to alternate bouts of short covering and bull unwinding in the derivatives segment ahead of expiry of August 2006 derivatives contracts on Thursday (31 August). Historically, short covering has been witnessed ahead of the futures expiry.

Asian stock markets inched higher on Wednesday on growing expectations of an extended pause in US interest rate rises, but gains were limited by worries of flagging consumer confidence in the world's biggest economy. Key benchmark indices in Hong Kong, Japan, Taiwan and Singapore were up by between 0.29% to 1.6%. South Korea’s Seoul Composite was slightly lower.

US stocks rose on Tuesday as minutes from the latest Federal Reserve meeting helped to cement investors' view that the Fed won't need to raise interest rates again any time soon and crude oil prices dropped below $70 a barrel. The Dow Jones industrial average gained 17.93 points, or 0.16% to end at 11,369.94. The Standard & Poor's 500 Index added 2.50 points, or 0.19% to finish at 1,304.28. The Nasdaq Composite Index climbed 11.60 points, or 0.54% to close at 2,172.30.

Crude oil recouped part of Tuesday’s fall. NYMEX crude for October delivery rose 29 cents to $70 a barrel in Asian trading on Wednesday, supported by an expected decline in US crude and gasoline stocks in statistics due later on Wednesday and Iran's determination to press ahead with its nuclear programme.

As per provisional data, FIIs bought shares worth a net Rs 203 crore on Tuesday (29 August), the day when Sensex had risen 87 points. On Monday 28 August, FIIs bought shares worth a net Rs 43.40 crore. There has been sustained FII buying since late July 2006.

Mutual funds sold shares worth a net Rs 11 crore on 28 August. Mutual funds are sitting on good amount of cash and they may step up purchases at declines.

Tech Mahindra to debut on BSE, NSE on 28 August

2006-08-25T04:22:00.000-07:00

IPO was priced at Rs 365 per share
Shares of Tech Mahindra will be listed on BSE and NSE on Monday (28 August 2006). The IPO was priced at Rs 365 per share, the upper end of the Rs 315 - 365 price band.

The issue had received an overwhelming response from FIIs.The post-issue, paid-up equity capital of Tech Mahindra is Rs 115.87 crore. Each share has a face value of Rs 10.

Tech Mahindra (TML) is a leading provider of IT services and solutions to the telecommunications industry. Nasscom ranked TML as the eighth largest Indian IT services company in export revenue in 2005-06.

Traditionally, the focus of TML was on telecommunications service providers (TSPs). But after the acquisition of Axes Technologies in November 2005, the coverage has expanded to telecommunications equipment manufacturers (TEMs) and independent software vendors

Markets Today

2006-08-25T04:20:00.000-07:00

Sensex ends above 11,500
The benchmark index finished stronger for the second straight day after experiencing hiccups in the afternoon session of trade, as blue-chip counters found support.The BSE 30-shares Sensex ended with gain of 40.25 points (0.35%), on 11,531.95.The benchmark index had opened strong, at 11,589.35, beginning from where it left off the 125-point surge from yesterday. It went ahead and struck 11,635.25, in early trade itself. It also slipped to a low of 11,542.10.The Sensex has moved in a range of 93 points for the day’s trading.The S&P CNX Nifty rose 16.75 points (0.50%), to 3,387.15

Even as the benchmark index scampered up and down, the market breath remained rock solid. The advance-decline ratio on BSE was pegged at close to 1.32:1; 1,424 shares advancing compared to 1,076 that declined. A total of 67 shares remained unchanged. The BSE Mid-Cap rose 0.89%, while the BSE Small-Cap index advanced 0.84%.

The total turnover on BSE amounted to Rs 3,165 crore, compared to Thursday’s Rs 3,165 crore.Among the 30 Sensex pack, 18 advanced while 12 slipped.

PSU banking major, SBI was the biggest gainer, up 3.37% to Rs 903.60 on 11.84 lakh shares. It has moved in a range of Rs 882 - 913.80. The Cabinet has approved amendments to the SBI Act, allowing RBI's stake to be cut from 55% to 51%. As per the SBI Act amendment, the bank will now be able to raise fresh funds from the capital market. The Union Cabinet has also allowed SBI to issue bonus as well as preference shares.

Aluminium and Copper major, Hindalco, jumped 3.05% to Rs 173 on a high volume of 29.26 lakh shares.

FMCG major, HLL, advanced 2.35% to Rs 237.15 on 12.57 lakh shares.

Tata Steel (up 2.15% to Rs 528.40 on 17.16 lakh shares) and Bajaj Auto (up 1.83% to Rs 2745 on 59,884 shares) were the other gainers.

Index heavyweight RIL added 0.31%, to Rs 1,110 on 20.24 lakh shares. It surged to a high of Rs 1,124.90, and also slipped to a low of 1,102.

REL (down 2.10% to Rs 446.80), Tata Motors (down 1.45% to Rs 848) and NTPC (down 1.30% to Rs 124.50) were the major losers.

RIL was the top-traded counter on BSE with a total turnover of Rs 225.29 crore, followed by Mahindra Gesco Developers (Rs 109.42 crore) and SBI (Rs 107.26 crore).

The Nikkei share average fell 0.14% on Friday, posting its first weekly loss in five weeks, as Toyota Motor Corp., and other recent gainers declined on lacklustre outlook for the key US market. The Nikkei 225 index ended 21.96 points lower, at 15,938.66. For the week, it fell 1.04%. It had risen as high as 1.23% during the morning, before falling in afternoon.

The Hang Seng index rose 72.41 points (0.43%), to 16,955.45.Crude oil prices inched higher, the Nymex crude oil rising 0.63 cents to $ 72.99 per barrel.As per provisional data, FIIs sold shares worth a net Rs 24 crore on 24 August (yesterday), the day when the Sensex surged 125 points.

US stocks ended flat on Thursday as consumer durable goods report exceeded forecast. The Dow Jones industrial average rose 6.56 points, or 0.06%, to 11,304.46. The Nasdaq composite index rose 2.45 points, or 0.11%, to 2,137.11.

Hot News

2006-08-25T04:17:00.000-07:00

Voltas waltzes on Dutch tie-up
Voltas surged 4.75%, to Rs 876 on partnering with Netherlands-based Besseling Group to deliver turnkey solutions for storage of horticulture produce.As many as 46,003 shares were traded on the BSE.The stock has smartly recovered after depreciating since mid-June till earlier July. From Rs 854.30 on 16 June 2006, it had slipped to Rs 652.25 on 24 July 2006, under intense selling pressure. Here, it found support and advanced to Rs 836.30 by 24 August 2006 on strong Q1 results.

At the current market price of Rs 876, Voltas trades at 31.97 times its FY06 EPS of Rs 27.40.

Voltas and Netherlands-based CA/ULO storage technology specialist Besseling Group have announced the formation of a strategic partnership to deliver turnkey solutions for storage of horticulture produce in the controlled atmosphere (CA) / ultra-low-oxygen (ULO) atmosphere. The company will be Besseling-Group’s sole representative in India.

The Voltas-Besseling alliance has tremendous scope when one considers the scale and size of the storage solutions market in India, which is as large as Rs 5,000 crore. The company plans on targeting a sizeable chunk of this market and has bagged several projects including Adani project, International Flower Auction Sector in Bangalore, Abhirami in Chennai, and Jaya Cold Storage in Tamil Nadu.

Meanwhile, Voltas, the Rs 2,022 crore air-conditioning and engineering services company, of the Tata group, is betting big on water treatment as a future growth driver. Water treatment, purifying, recycling, and desalination are some areas the company is actively looking at and may acquire the technology in this space to service the sector.

The electro-mechanical projects division contributes 55% to the topline as well as bottomline, whereas the engineering products and services contributes 7-8% to revenues and 25% to net profit.

The company is setting up three plants in Himachal Pradesh for Rs 50 crore. The company has shut its Hyderabad unit, whose production line will be shifted to Pantnagar. Its voluntary retirement scheme bill for the year stood at Rs 65 crore.

Voltas registered a net profit growth of 31% to Rs 21.75 crore (Rs 16.55 crore) for Q1 June 2006. Net sales rose 33% to Rs 580.40 crore (Rs 436.71 crore).

Hindustan Motors hails land development clearance
Hindustan Motors jumped on heavy volumes for the second day in a row after the West Bengal government allowed it to develop land at its plant near Kolkata.The scrip was up 6% to Rs 42.60. As many as 36.4 lakh shares changed hands in the counter on BSE.
Anther announcement by the company that it will expand its auto components business also aided the rally in the stock. The stock has surged in the past few days amid intermittent rise in volumes. From Rs 31.60 on 7 August, the stock has risen 34.8% to current Rs 42.60. From an earlier low of Rs 25.70, the stock has gained 65.7%.

Hindustan Motors said it is planning to develop automotive forgings, automotive castings & automotive stampings business by cost effectively leveraging existing facilities & infrastructure. Hindustan Motors has been ramping up production of automobile components for other carmakers at its 63-year-old Uttarpara (Kolkata) factory using the facilities like foundries, which had become a drag on it.

McKinsey & Company and other reputed consultants have forecast auto component exports from India to grow manifold from current levels of $ 1.5 billion and Uttarpara is well placed to ride this growth wave, Hindustan Motors said in a press release today.

Meanwhile, Hindustan Motors has got clearance from the West Bengal government to develop land at its plant near Kolkata. Hindustan Motors plans to develop a residential township, auto parts cluster and an information technology hub in 314 acres, of the 700 acres, it owns near Kolkata.

Hindustan Motors (HM) makes Mitsubishi (Lancer) cars since 1998 under a tie-up with Mitsubishi Motor Corporation, Japan. Recently, the company launched premium sports utility Montero, which is being imported as a completely built unit from Mitsubishi, Japan.

HM also plans to launch a range of Mitsubsishi cars in India next year, and is entering into a special partnership for their exclusive marketing.

Hot News

2006-08-25T04:14:00.000-07:00

SBI rejoices as Cabinet clears follow-on offer
State Bank of India jumped 3.7%, to Rs 906.90 after the Union Cabinet allowed it to raise fresh capital by issuing equity and preference shares.As many as 4.7 lakh shares changed hands in the counter on BSE.State Bank of India made a strong rebound from the lower level as bond prices started recovering from multi-year lows, raising hopes that domestic rates may not rise in the short term. Improved Q1 June 2006 results aided a rebound in the stock. From a low of Rs 689.50 on 19 July, it surged to Rs 887.10 on 16 August, before cooling off a bit to a low of Rs 862.60 on 23 August. It rose 1.3%, to Rs 874.10 on 24 August.

At the current market price of Rs 906.90, the stock trades at 14.9 times its Q1 June 2006 standalone annualized EPS of Rs 60.7 and 12.4 times Q1 June 2006 consolidated annualized EPS of Rs 73.

The Union Cabinet on Thursday sanctioned a follow-on public issue by State Bank of India, by approving the SBI (Amendment) Bill. The bill proposes to lower the floor for RBI’s holding in SBI to 51%. RBI, currently, holds 59.73% in India's largest commercial lender. The lowering of the floor for RBI's stake will create sufficient space for bank to hit the capital market with the follow-on offering.

The SBI (Amendment) Bill also proposes to allow SBI to raise Rs 5,000 crore of capital through an issue of preference shares. This will help the bank meet capital adequacy needs for growth, and also be prepared for implementing the reviewed capital adequacy norms which are referred to as Basel II. The implementation of Basel II norms is estimated to reduce the capital adequacy of banks by about 2 percentage points.

Recently, SBI had obtained board permission for raising Rs 5,000 crore through either hybrid instruments or subordinated debt. SBI has already raised Rs 2,300 crore in June this year.

The banking sector has continuously raised lending rates over the past few months to protect their margins, when the cost of funds has been rising in a rising rates environment. SBI’s asset liability committee had recommended a 0.25% increase in PLR on 1 August. The rate hike came into effect from 2 August. After the hike was announced, the finance ministry directed public sector banks to obtain approval of their boards for increasing lending rates.

Earlier, public sector banks had raised their prime lending rates (PLRs) by 50 basis points on 1 May, even though the RBI had left its key rates untouched in the April policy, after hiking them by 25 basis points in January.The banking sector has been showing credit growth of over 31%, dominated mainly by non-food credit.

UTI Bank hardens on raising FII ceiling
UTI Bank jumped nearly 4%, to Rs 341.95 after RBI raised FII ceilng in the scrip to 49% of its equity capital.As many as 60,016 shares changed hands in the counter on BSE.As on 30 June 2006, total FII-holding in UTI Bank was 41.70%. This includes GDR holding of 5.19%. The hike in FII-holding provides scope for further increase in foreign investment in bank.

UTI Bank has surged over the past few months. Strong Q1 June 2006 results aided the rally. From a low of Rs 252.90 on 19 July, it advanced to Rs 329 by 24 August 2006.

At the current price of Rs 341.95, the stock trades at 19.88 times its Q1 June 2006 annualized EPS of Rs 17.2, and 3.5 times its end-June 2006 adjusted book-value of Rs 95.

The scrip has been a favourite of investors due to consistent earnings growth and because of its ability to protect margins in a challenging environment and sustain growth. UTI Bank has reported a consistent growth of over 25 % in its earnings per share (EPS) over the past several quarters. The June 2006 quarter was no exception, the bank clocking a 30% growth in its EPS. Driven by a robust growth in retail loans, UTI Bank's advances grew 65% in the quarter. The bank's increasing thrust on high-yielding retail loans has helped it improve the net interest margins (NIMs).

The bank's increasing thrust on the retail segment and a stronger focus on non-fund based banking are likely to ensure healthy growth over the next few quarters, analysts reckon.

Early this month, UTI Bank forayed into credit cards segment to further boost its fee-based income. UTI Bank, along with MasterCard, launched an international debit card for small and medium enterprises and self-employed professionals.

UTI Bank has a network of 369 branches, 95 extension counters and 1,987 ATMs across the country.

UTI Bank early this month raised capital abroad through a debt offering, the first one to take advantage of recent norms unveiled by the India's banking regulator. The bank raised $150 million in the form of upper tier bonds. UTI Bank's issue was priced at 170 basis points(bps) above the six-month Libor, which took the fixed coupon rate to 7.25%. UTI Bank plans to utilise the money raised abroad to fund its overseas operations.UTI Bank has maintained low NPAs for a long period of time.

BSE to suspend trading in 42 companies

2006-08-24T23:03:00.000-07:00

For non-payment of annual listing fees
BSE has decided to suspend trading in shares of 42 companies from 11 September 2006, due to non-payment of annual listing fees for 2006-07 by them. The companies still continue to default despite being issued reminders and show-cause notice, the BSE said in a circular.

The list includes Atcom Technologies, Baffin Engineering Projects, Core Healthcare, Global Boards, Mafatlal Dyes & Chemicals and Snowcem India.

Stock Alert

2006-08-24T23:02:00.000-07:00

NTPC may gain on expansion plan
NTPC has signed a deal with Haryana Power Generation Corp. and Indraprastha Power Generation Co. to set up a 1,500 megawatt coal-based power plant in Haryana state. The state-run power generation company said on Thursday it also signed a preliminary agreement with Delhi Transco to expand a thermal power station in capital New Delhi.

The union cabinet on Thursday approved changes in an act to enable the country's largest lender, State Bank of India to raise more capital and improve its operations. "The State Bank of India (Amendment) Bill will be introduced in parliament with such modifications," Information and Broadcasting Minister Priyaranjan Dasmunshi told reporters on Thursday.

The government has reportedly approved Infosys Technologies’ plans to set up three special economic zones for software and backoffice services. Two zones will come up in Karnataka and one will be set up in Maharashtra.

Construction firm Hindustan Dorr Oliver said on Thursday it got an order worth Rs 16.49 crore from a Maharashtra state government agency to build a sewage treatment plant.

Pantaloon Retail India said on Thursday it plans to raise up to Rs 960 crore ($206 million) by selling some stake in subsidiaries and issuing debt and equity to fund expansion. Pantaloon said it would raise up to Rs 500 crore by selling a maximum of 24 percent in its subsidiaries. It would raise Rs 260 crore by selling shares or equity-related bonds to the public and qualified institutional buyers.

The company said it would also issue 1.2 million convertible warrants at Rs 1635 per share to promoters to raise nearly Rs 200 crore.

Drug maker Kopran said on Thursday its board approved the issue of 2,26,000 shares to State Bank of India and 4,48,370 shares to Industrial Development Bank of India.

The West Bengal government has reportedly cleared Hindustan Motors's proposal to develop land at its plant near Kolkata. Hindustan Motors plans to develop a residential township, auto parts cluster and an information technology hub in 314 acres of the 700 acres it owns near Kolkata.

VSNL on Thursday announced up to 40% cut in prices for its international bandwidth services. The company expects to generate higher volumes and market share, from the price cut.

Tata Steel said on Thursday said it had raised $750 million in syndicated loans to expand capacity. The seven-year loans were raised at 54 basis points over LIBOR, the company said in a statement. Tata Steel plans to more than double its steel output in the next four years from the current 5.1 million tonnes.

In the last 18 months, Tata Steel, which had bought assets such as Singapore's NatSteel and Thailand's Millennium Steel PCL had raised about $900 million in syndicated loans and from the International Finance Corporation, it said.

RIL armada drops anchor for SEZ at Rewas Port

2006-08-24T21:19:00.000-07:00

MUKESH Ambani’s Reliance Industries (RIL) is foraying into the port sector in a big way. The group, which is setting up a mega special economic zone (SEZ) in Navi Mumbai, will pay around Rs 200 crore to pick up close to 40% stake in Rewas Port (RPL).

The Rs 5,000-crore greenfield port, around 10-nautical miles off Mumbai harbour, will be developed by Reliance and the initial promoters, Amma Lines. The deal is expected to be signed early next week, said sources close to the development.

As part of the deal with the Maharashtra government, Amma Lines is expected to hold a majority stake in RPL. Sources said Reliance will later increase stake in RPL. RPL may also rope in international port/terminal operators with an operational contract.

The acquisition will help Reliance secure a key supply and export route for the proposed mega SEZs in Navi Mumbai and Raigad districts. The two SEZs will cover a combined area of about 35,000 acres. A nearby all-weather port, with deep draft of 20 metres compared with Jawaharlal Nehru Port Trust’s 12.5 metres, will be of immense help to exporters and importers as the biggest container ships would be able to call on the port.

Reliance also plans to construct a 40-metre single buoy mooring facility that will help very large crude carriers offload their cargo. The port, the proposed airstrip and the road facilities, such as the Sewri-Nhava Sheva trans-harbour link, will help Reliance attract more clients to its SEZs, providing them with easy connectivity to Mumbai and the rest of the world.

As a prelude to the deal, Amma Lines has bought out the 50% held by IL&FS in Rewas Port Development Company (RPDCL) for Rs 50 crore, to make it a wholly-owned company. Vijay Papa Rao, CMD of RPL, will stay on as chairman as part of the agreement. RPL director Hemanth Meka Rao refused to comment on the issue.

The port, which will handle both containers and bulk cargo, will cater to the proposed SEZs in Navi Mumbai and Maha Mumbai. Sources said Phase-I, which will have six multipurpose berths, is expected to be operational in 24 months. The ground-breaking is expected to be in two months. RPL will acquire around 1,200 hectares of land, most of which is owned by the government, for developing the first phase of the port.

Maharashtra Maritime Board (MMB) will hold up to 11% in RPL, as per the valuation exercise to be undertaken after land acquisition. RPL has already received all the required regulatory approvals to develop the minor port as one of the largest ports in the country. It is also planning to set up a mega shipyard and dry-docking facility at Rewas.

RPL wants to dredge the port and the channel up to 20 metres to facilitate smooth transit of large mother vessels. Sources said it will involve only soft dredging. The channel does not require rock dredging and siltation is low. The Rewas Port was awarded to Amma Lines in ’02 under the build-own-operate-share-transfer (BOOST) agreement with a 50-year concession lease licence.

As per the MoU signed between Amma Lines and the state government, the greenfield port project will be developed by RPL, with a royalty of Rs 3 per tonne cargo handled at the port. Amma Lines was in talks with many international port operators and financial investors for offloading equity.

Its initial plan was to develop it as a lease port, where the berths and terminals could be leased to operators on a long-term basis.

Amma Lines had already commissioned the detailed project report and environmental impact assessment study to the Water and Power Consultancy Services India, and the model study of the port site, sea waves and currents, soil structure and navigational channel to the Pune-based Central Water and Power Research Station.

The Rewas and Dighi ports were among the seven minor ports for which the state government had invited private investments in May 1996. However, poor response to the bidding had forced the government to strike the MoU route to develop them.

How will the market be today??

2006-08-24T21:11:00.000-07:00

Market may extend gains
The market may edge higher tracking steady to firm Asian markets. On Thursday (24 August) 2006, Sensex jumped 125 points due to short covering in derivatives ahead of expiry of August 2006 derivatives contracts next week (on 31 August).

Volatility may remain high on the bourses till next Thursday (31 August) ahead of expiry of the August 2006 derivatives contracts.

Volumes had witnessed a surge in the middle of this month. But they have declined in the last two trading sessions. The daily total traded quantity of shares on BSE was about 16 crore shares in the past two trading sessions compared to a range of between 16 crore to 23 crore shares between 10 August to 22 August.

Asian markets were steady to firm on Friday (25 August). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.25% to 1.23%.

Meanwhile, concerns that a new tropical depression could threaten oil facilities lifted US crude oil futures above $73. Frontmonth US crude for October delivery briefly touched $73.05 a barrel and was up 72 cents at $72.88 in Asian trading on Friday.

Back home, some cautiousness may emerge on the bourses in the near term on reports that there is a strong pipeline of IPOs of about Rs 18000 crore which could suck out liquidity from the secondary market. DLF alone expected to raise Rs 13000 crore. The timing of the DLF IPO is however not yet known.

As per provisional data, FIIs sold shares worth a net Rs 24 crore on 24 August, the day when Sensex had surged 125 points.

Nifty 50 Quotes at End Of Day

2006-08-24T05:44:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3335.8	3370.4	1.04
ABB	2770.8	2740.5	-1.09
ACC	894.55	912	1.95
BAJAJAUTO	2686.4	2696.8	0.39
BHARTIARTL	406	415.3	2.29
BHEL	2247.1	2240.85	-0.28
BPCL	349.35	350.75	0.4
CIPLA	245.9	246.95	0.43
DABUR	136.2	137.6	1.03
DRREDDY	1449.15	1455.9	0.47
GAIL	256.1	266.55	4.08
GLAXO	1164	1206.95	3.69
GRASIM	2195.45	2200.2	0.22
GUJAMBCEM	110.1	113.95	3.5
HCLTECH	566.15	572.15	1.06
HDFC	1278.4	1277.6	-0.06
HDFCBANK	852.95	853.35	0.05
HEROHONDA	700.15	713.4	1.89
HINDALC0	161.95	168	3.74
HINDLEVER	229.85	231.8	0.85
HINDPETRO	258.4	258.45	0.02
ICICIBANK	590.6	589.15	-0.25
INFOSYSTCH	1767.9	1766.9	-0.06
IPCL	283.65	300.75	6.03
ITC	178.8	180.05	0.7
JETAIRWAYS	556.9	563.85	1.25
LT	2360.1	2363.75	0.15
M&M	632.8	640.95	1.29
MARUTI	826	830.65	0.56
MTNL	152.8	155.5	1.77
NATIONALUM	199.9	201.55	0.83
ONGC	1198.45	1189.1	-0.78
ORIENTBANK	187.95	193.7	3.06
PNB	427.2	445.5	4.28
RANBAXY	385.2	389	0.99
REL	458.55	456.05	-0.55
RELIANCE	1061.9	1106.85	4.23
SAIL	76	75.65	-0.46
SATYAMCOMP	801.95	807.45	0.69
SBIN	863.15	874.65	1.33
SIEMENS	1043.65	1058.6	1.43
SUNPHARMA	895.2	896.95	0.2
SUZLON	1209.7	1210.7	0.08
TATAMOTORS	847.3	860.1	1.51
TATAPOWER	523.6	525.35	0.33
TATASTEEL	505.5	517.45	2.36
TATATEA	828.15	832.2	0.49
TCS	963.1	970.4	0.76
VSNL	414.4	416.2	0.43
WIPRO	511	515.4	0.86
ZEETELE	273.1	279.2	2.23

Markets Today

2006-08-24T05:38:00.000-07:00

Highest closing level for Sensex in over 3-months
A solid intra-day rebound took the barometer BSE Sensex to its highest closing level in more than 3-months. The barometer index jumped 125.30 points (1.1%), to settle at 11,531.95, its highest closing since 17 May 2006. The S&P CNX Nifty gained 34.60 points (1%), to finish on 3,370.40.

After a initial 100-point fall caused by weak global markets, the market staged a solid intra-day rebound and ended upbeat on the back of a rise in bond prices to a two-month high, and on expectations that domestic fuel prices may not rise in the near term. When bond prices rise, bond yields fall on expectations that interest rates may not rise in the near term.

Index heavyweight Reliance Industries (RIL) surged, paving the way for the recovery. Most blue-chips firmed up towards the second half of trading, in contrast to an early slide. Metal, cement, auto, banking, IT and construction shares firmed up.

Following a surge in the Sensex in the latter part of the day, the market-breadth turned positive from negative. For 1,349 shares that rose on BSE, only 1,113 declined. As many as 81 shares were unchanged. Gainers outpaced losers by a ratio of 1.2:1. In early trade, declines had outpaced gainers by a ratio of 2.4:1. The BSE Mid-Cap index rose 0.25% to settle at 4,771.24 while the BSE Small-Cap index added 0.6%, to finish on 5,783.80.

The BSE clocked a turnover of Rs 3,146 crore, higher than Wednesday’s Rs 2,998 crore.
Volatility may be the order of the day on the bourses in the next few days ahead of the expiry of August 20006 derivatives contracts next Thursday (31 August).

Most of the analysts advocate a bottom-up approach of investment at this juncture. `Invest in only those stocks that are fundamentally sound and enjoy high earnings visibility’, states a retail brokerage in a report released early this month. Meanwhile, strong earnings growth witnessed by the corporate sector is expected to continue in Q2 September 2006, Brics Securities notes in a report.

Indian equity valuations remain higher compared to its emerging market peers because of the premium attached due to decent-to-strong earnings growth of the Indian corporate sector. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

In today’s trade, RIL jumped 5.3%, to Rs 1,118. The stock rose on a heavy volume of 27.7 lakh shares on BSE.

Metal shares staged a solid intra-day rebound. Sterlite Industries rose 4% to Rs 424.95, Hindalco gained 4% to Rs 168.50, Hindustan Zinc gained 3% to Rs 594, and Tata Steel gained 2.4% to Rs 518.55. Metal shares had eased in early trade, following a weak US housing data. BSE Metal index rose 2% to 8,251.14.

Select cement shares advanced on expectation of a pick up in demand as the southwest monsoon nears its end. Gujarat Ambuja Cements rose 3.4% to Rs 113.80, ACC gained 2% to Rs 912, Grasim rose 1.2% to Rs 2,220, India Cements rose 3% to Rs 191.40, JK Lakshmi Cement added 3% to Rs 142.75, and Madras Cement gained 3% to Rs 2,870.

State Bank of India rose 1.5% to Rs 876 ahead of its board meeting later in the day to consider a hike in prime lending rates. The bank’s executive committee on 3 August approved the asset-liability committee’s decision to hike prime lending rate by 25 basis points, to 11.5%. However, the government later asked state-run banks to seek clearance of their respective boards for fixing lending rates, and hence the board meeting today.

Cellular services major Bharti Airtel gained 2.3% to Rs 415 on reports that it has offered a contract worth $ 1 billion to expand and upgrade its telecom network to telecom equipment maker Ericsson.

Gas transmission firm GAIL India surged 4.4% to Rs 267.25 as 4.3 lakh shares changed hands in the counter on BSE.

Select auto shares firmed up on expectations that the government will refrain from a hike in domestic fuel prices in the near term due to the recent cooling off of global crude oil price from a record high of $ 79 a barrel. Hero Honda rose 2.5% to Rs 718, Mahindra & Mahindra gained 1.6% to Rs 642.50, car major Maruti Udyog rose 0.7% to Rs 831.50 and Tata Motors rose 1.5% to Rs 860. The government is set to review domestic oil prices on 1 September 2006. BSE Auto index gained 1%, to settle at 4,930.82.

PSU banks edged higher on expectation that interest rates may not rise in the near term; more so as the Lok Sabha passed a bill on Wednesday that allows state-run banks to raise funds through private placements and preferential shares allotment. Punjab National Bank surged 4.9% to Rs 447, Oriental Bank of Commerce rose 3.9% to Rs 195.35, Bank of India gained 3.5% to Rs 132.75, Andhra Bank rose 2.8% to Rs 85, Syndicate Bank rose 2% to Rs 71, and Indian Overseas Bank gained 1.6% to Rs 91.50. BSE Bankex rose 26.58 points (0.5%), to end on 5,169.66.

Engineering & construction major L&T ended flat at Rs 2,360, off a session low of Rs 2,325 after the company in consortium with Haldor Topsoe, Denmark, was awarded a $150 million contract to set up methanol and carbon monoxide plants in Saudi Arabia.

Tata Tea rose just 0.6% to Rs 832.90. The stock came off the higher level after an initial surge of 5% to Rs 870. Tata Tea said on Wednesday that it had agreed to buy 30% of Energy Brands Inc, maker of fast-growing brand Glaceau vitaminwater, for $677 million.

IPCL surged nearly 7% to Rs 303.05. A huge 14.1 lakh shares changed hands in the counter on BSE.

Hot News

2006-08-24T05:34:00.000-07:00

Crompton Greaves thrives on block deal
Crompton Greaves rose 1% to Rs 208 following a block deal of 3.75 lakh shares on BSE at Rs 205 per share by 10:55 hours.The counter clocked a cumulative volume of 4.24 lakh shares on BSE, compared to the two-week average volume of 77,891 shares.The stock has witnessed high volatility in the past couple of trading sessions. From Rs 191.67 on 28 July 2006, it surged to Rs 222 as buying continued. Here, it slipped to Rs 205.20 by 23 August 2006, on profit-booking.

Recently, Crompton Greaves concluded an arrangement for the acquisition of transformers, gas insulated switchgear, rotating machines and contracting businesses of Ganz Transelektro Villamossagi Zrt, together with the business of Transverticum kft, which is engaged in supporting areas of design, erection, commissioning and commercial activity; both in Hungary, for Euro 35 million.

The company also proposed a new unit in Madhya Pradesh. The company, which already has two units for power transformer manufacturing in Madhya Pradesh, will set up the unit in Malanpur (near Gwalior) in Bhind for an investment of Rs 5 crore.

Earlier in June, Crompton Greaves announced its plan to invest up to Rs 16.03 crore in the share capital of Malanpur Captive Power (MCPPL) comprising 59% of MCPPL's share capital. As a result, MCPPL will become a subsidiary of the company. Further, MCPPL plans to develop, finance, construct and operate a 25.5 Mw gas-based group captive power plant in Malanpur, Madhya Pradesh.

Earlier in May, the company’s transformer division chalked out a capex of Rs 32 crore in its existing Mandideep (near Bhopal) plant. The new investment will be for technology upgradation. Crompton Greaves will make 800 kvA capacity transformers to become the first company in India to make the product. This capex will be completed by September. The company will make 7,000 transformers each year in this capacity.

Crompton Greaves offers a wide-range of products such as power & industrial transformers, HT circuit breakers, LT & HT motors, DC motors, traction motors, alternators/ generators, railway signaling equipment, lighting products, fans, pumps and public switching, transmission and access products. In addition, the company undertakes turnkey projects from concept to commissioning. It supplies the products to power and industrial sectors like power utilities, process industries, railways, mines, electricity boards and industries in domestic as well as world markets.

Crompton Greaves is the biggest Indian exporter of power transformers. Its products are exported in more than 40 countries worldwide.

Crompton Greaves registered a net profit rise of 16.38% to Rs 36.37 crore for Q1 June 2006 compared to Rs 31.25 crore in Q1 June 2005. Total income during the same period under consideration has increased from Rs 527.51 crore to Rs 745.55 crore.

ACC darts ahead as monsoon looks to make an exit
Associated Cement Companies rose 1.99% to Rs 912 on continued buying interest due to expectation of pick up in demand as the southwest monsoon nears its end.As many as 3.12 lakh shares were traded on the BSE.The stock has advanced sharply since late-July 2006. From Rs 788.45 on 21 July, the stock appreciated 13.41% to Rs 894.20 on 23 August 2006 on strong Q2 and dispatch figures.

At the current market price of Rs 912, Associated Cement Companies (ACC) trades at 14 times its Q2 June 2006 annualized EPS of Rs 64.70 based on consolidated earnings.

ACC despatch for July 2006 rose 10.9% to 1.42 million tonnes as against 1.28 million tonnes for the same period last year. The cumulative cement despatches increased 7.57% to 11.08 million tonnes as against 10.30 million tones for the same period last year.

With the continued emphasis on infrastructure and housing sectors, the demand for cement is expected to remain strong.ACC is expanding its Bargarh cement works from 0.96 million tonnes per annual to 2.14 million tones. It is also setting up a 30 Mw captive power plant. The total outlay for this expansion project is Rs 537 crore.Last year, Holcim acquired a controlling stake in ACC.

ACC had registered a consolidated net profit growth of 176% to Rs 411.79 crore (Rs 148.95 crore) for Q1 June 2006. Net sales rose 22% to Rs 1,440.07 crore (Rs 1180.97 crore).

Hot News

2006-08-24T05:32:00.000-07:00

Tata Tea stronger on buying stake in US co
Tata Tea surged 2.19%, to Rs 846 on acquiring 30% stake in Energy Brand, US, for $ 677 million.As many as 86,830 shares were traded on the BSE.At the current market rate of Rs 846, Tata Tea trades at 14 times its Q1 June 2006 annualized consolidated EPS of Rs 60.30.

Tata Tea and Tata Sons will together invest $ 677 million to buy 30% stake in US-based Energy Brands (EBI). Commonly known as Glaceau, EBI is engaged in the high growth business of enhanced water and markets vitaminwater, smartwater and fruitwater.

Of the $ 677 million, Tata Tea will invest $ 192 million and Tata Sons $ 58 million in the equity of Tata Tea GB through which, the transaction will be done. Tata Tea GB will raise the rest by way of debt.

Tata Group will initially nominate the chairman of the company, in addition to which, two directors from the group will attend all board meetings of the company.

The company is also planning to come out with new tea-based products for organic growth, both in the domestic and international markets. It is also open to the idea of coming out with multiple forms of tea - speciality tea, flavoured tea, strawberry tea and others.

Earlier, Tata Tea bought the UK-based Tetley for $ 407 million in 2000 and its subsidiary, Tata Coffee, bought the US-based Eight o’Clock Coffee for $ 220 million in June this year.

In May, Tata Tea’s UK-arm acquired the assets of Jemca, a tea company in Czech Republic, from food processing company, Alima Znackova Potravina, for an undisclosed amount. The Tetley group had funded the acquisition.

Jemca has 26.6% share by volume in the tea market of the Czech Republic and has a turnover of 300 million Czech Koruna (around $ 12.5 million). According to the agreement, Jemca will continue to pack tea at its production facility in Jemnice, Czech Republic, and will sell it under the Jemca brand.

Tata Tea had reported a decline of 5.53% in consolidated net profit for the Q1 June 2006 to Rs 83.45 crore (Rs 88.33). Net sales rose 11.47% to Rs 798.92 crore (Rs 716.69 crore).

HCL Infosystems up on decent earnings report
HCL Infosystems advanced 2.40%, to Rs 166.50 after it announced on Wednesday that its Q4 consolidated net profit rose 18.6%.As many as 58,164 shares were traded in the counter on BSE.A steady rally in the counters materialised in the past due to a strong appetite for it. From Rs 128.45 on 24 July 2006, it advanced to Rs 162.65 by 23 August 2006, as buying continued.

HCL Infosystems' consolidated Q4 net profit rose 18.6% to Rs 70 crore compared to Rs 59 crore during the corresponding period last year.

Riding on better sales of computers, mobile phones and office automation products, HCL's consolidated total revenue surged to Rs 3,149 crore during the quarter ended 30 June 2006, from Rs 2,198 crore in the corresponding period last year. The consolidated results include those of its wholly-owned subsidiaries, HCL Infinet and Microcomp.

On a standalone basis, HCL's net profit dipped 17% to Rs 26.88 crore during the fourth quarter compared to Rs 32.42 crore during the corresponding period last year. Total revenue rose 13.90% to Rs 601.41 crore (Rs 527.81 crore).

Revenue from the computer systems business grew 21% to Rs 2,381.4 crore against Rs 1,970.9 crore in the previous year. Revenue from the telecommunication and office automation business is Rs 9,049.8 crore (Rs 5779.3 crore), a growth of 57%.

For the full year ended 30 June, the company's consolidated net profit jumped to Rs 280 crore (Rs 228 crore). Total revenue during the year grew 46.2% to Rs 11,454 crore from Rs 7,787 crore.

Earlier in January, HCL Infosystems bagged Rs 250 crore orders in the domestic market in telecom, education and government verticals. The orders are primarily for the computer business, including system integration and hardware.

Bull run is just 4-5-day long story

2006-08-24T00:21:00.000-07:00

A study of the daily records of closing values of the sensex since the beginning of the current bull run (April 2003) by the ET Intelligence group reveals that upticks last on an average for around 4-5 days.

Any thing else is like a six sigma event – very rare. The other interesting element of the study is that the retracements after the consecutive rise are bare minimal, barring one occasion when the market shed more than it gained. Volumes also rise during consecutive upticks indicating the bullish undertone in the market.

The study shows that there are only two occasions when the market actually went up consecutively for 10 trading sessions or more. The sensex rallied consecutively for a maximum period of 11 days between September 26, ‘03 and October 13, ‘03. It gained almost 12% during these 11 sessions, adding 466 points on the back of increasing volumes. The other spectacular consecutive rise was a 10-day rise from August 30, ‘05 to September 13, ‘05. Though the sensex added 448 points during this period, there was only 7% gain. The consecutive gains seem to be tiring down as the market touches newer highs.

The current consecutive seven day rise in the market ended on Friday (August 18) when the sensex closed 12 points lower after rising for seven consecutive trading sessions. Volumes almost doubled during these sessions indicating a very bullish undertone.

This probably pointed that the retracement may be marginal. Friday’s marginal 12-point fall and a rise on Monday concluded that fact. During these seven trading sessions, sensex gained 6% by adding 462 points.

Since the beginning of the current bull rally, the sensex closed three times consecutively for nine trading sessions. These were during July 23, ‘03 till August 4, ‘03, July 22, ‘05 till August 4, ‘05 and April 28, ‘06 till May 10, ‘06. The percentage gain during these periods was 7.9%, 6.6% and 6.4%, respectively.

However, during the following next eight trading sessions following the nine-day rise between the April 28, ‘06 and May 10, ‘06, the sensex shed 18%, reflecting a steep drop from a close of 12,612.38 on May 10, ‘06 to 10,481.77 on May 22, ‘06. This was the only time that the sensex retraced more than what it had gained. In earlier cases the sensex lost not more than 2.19% and even gained further in other cases.

Bonus issues lose lustre against market volatility

2006-08-24T00:19:00.000-07:00

Most companies usually offer bonus issues as a strategy to add to shareholders’ value. However, this strategy appears to have gone awry in the current calendar year, with the adjusted prices of ex-bonus stocks now ruling 10%-30 % below the closing cum-bonus prices before their respective record dates.

These scrips include Cipla, Kalpataru Power, Atlas Copco, Karur Vysysa Bank, Sterlite Industries, Jayant Agro, National Peroxide, among others. This list also includes a couple of such stocks in whose case management has made twin offers of bonus as well as stock splits simultaneously.

Take the case of pharma major Cipla. The company proposed a liberal bonus issue in the ratio of three shares for every two shares held in February this year. Before its record date for bonus, the stock was quoting at Rs 660. However, since then, the stock has slipped after adjusting the bonus, and is now quoting around Rs 250. This means that by spending Rs 1,250, the investor could mop up five shares of Cipla now, which were earlier available cum-bonus, at a price of Rs 1,320 before the stock went ex-bonus . Similarly, in the case of Kalpataru Power Transmission, the company proposed a bonus of one share for each share held in the company towards the end of March.

Before the stock went ex-bonus on April 13, it was commanding a price of Rs 1,932. Since then, the stock has been beaten down, and is now quoting around Rs 770. This effectively means an erosion in stock prices by close to 20% on an adjusted basis since the time it has gone ex-bonus. The case is similar for multinational company Atlas Copco, which is in the engineering business. The stock was quoting at Rs 1,406 before going ex-bonus on June 14. After a 1:1 bonus issue, the scrip is trading around Rs 591, down 16% on an adjusted basis since going ex-bonus.

Other companies such as Karur Vysysa Bank and Jayant Agro too, have shown similar erosion in prices on an adjusted basis after going ex-bonus. This phenomenon of adjusted ex-bonus share price being less than the cum-bonus price is the result of high volatility in markets over the past three months. This trend can also be spotted in companies that went in for simultaneous stock splits and bonuses during the current year. The few stocks that have defied the trend amidst the changed scenario are the tech heavyweights such as TCS, Infosys and few others like Lupin.

Stock Alert

2006-08-24T00:08:00.000-07:00

Tata Tea may gain on major US acquisition
Tata Tea and Glaceau(R), the maker of vitaminwater(R), on Wednesday announced that they have signed a definitive agreement whereby Tata Tea will invest $677 million in Glaceau to purchase the stake previously held by TSG Consumer Partners and provide additional growth capital. As a result of this investment, Tata will own 30% of Glaceau, based on a valuation of more than $2.2 billion.

Tata Tea’s investment in Glaceau strengthens its US presence and provides opportunities for global growth for Tata's beverage businesses. Glaceau brands include vitaminwater, which is nutrient-enhanced, smartwater(R) which is electrolyte-enhanced, and fruitwater(R), which is flavor-enhanced.

JSW Steel said on Wednesday it had signed a preliminary agreement with an entity in Mozambique, which had been allotted rights for coal exploration.

The US Food and Drug Administration has approved Glenmark Pharmaceuticals’ epilepsy drug gabapentin. The approval is for 600-milligram and 800-milligram dosage tablets.

Essar Shipping & Logistics parent of Essar Shipping said on Wednesday it had raised $200 million from a consortium of overseas banks to finance its subsidiary's ship-buying plans. The a 10-year facility was fully underwritten by De Nationale Investeringsbank N.V. Inc. and was availed at a pricing of 120 basis points over the LIBOR rate, the company said.

Auto parts maker Rane Madras said on Wednesday it would set up a manufacturing unit in northern Uttaranchal state with an initial investment of about Rs 9.30 crore. The unit would supply steering gears exclusively to Tata Motors.

PSU banks may edge higher after the Lok Sabha passed a bill on Wednesday that seeks to allow state-run banks to raise funds through private placements and preferential shares. The banking companies bill, however, restricts banks from diluting the government's holding below 51% while selling shares. Many PSU banks are planning to raise more funds to meet stringent Basel-II regulations by March 2007 and to sustain high loan growth. The bill still has to pass in Rajya Sabha and get presidential approval before it becomes law.

Zenith Infotech said the world's largest computer chip maker, Intel has agreed to use its software in motherboards on a revenue-sharing basis. Zenith said on Wednesday it had signed a software licence and distribution deal with Intel.

How will the market be today??

2006-08-24T00:06:00.000-07:00

Domestic bourses may track weak global markets
Profit taking which was set on the domestic bourses in the past two days after a recent rally may continue today. Asian stocks edged lower on Thursday following weak US home sales data and on jitters over Iran's nuclear program.

On the flip side a sharp fall in global crude oil price and reports in a section of the media that the government was unlikely to raise domestic fuel prices may limit fall on domestic bourses.
Volatility may take place in the next few days ahead of expiry of August 2006 derivatives contracts next Thursday (31 August).

Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.16% to 1.3% on Thursday.

US stocks fell on Wednesday after a report showed existing home sales declined to the lowest level in more than two years, stoking fears that consumer spending will slow and hurt economic growth. An Iranian news agency said Tehran soon will announce a "very important achievement" in an unspecified area of nuclear technology, which added to the negative sentiment. The Dow Jones industrial average fell 41.94 points, or 0.37% to end at 11,297.90. The Standard & Poor's 500 Index declined 5.83 points, or 0.45% to finish at 1,292.99. The Nasdaq Composite Index dropped 15.36 points, or 0.71% to close at 2,134.66.

US crude was hovering at just below $72 a barrel in Asian trading on Thursday after a 2% drop overnight on higher US stockpiles data. The Indian government is set to review domestic fuel prices on 1 September 2006 but it is unlikely to raise prices at a time when the global crude oil prices have cooled off from record highs, reports suggest.

Nifty 50 Quotes at End Of Day

2006-08-23T05:05:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3364.6	3335.8	-0.86
ABB	2796.95	2770.8	-0.93
ACC	907.6	894.55	-1.44
BAJAJAUTO	2759.8	2686.4	-2.66
BHARTIARTL	409.4	406	-0.83
BHEL	2237.8	2247.1	0.42
BPCL	352.65	349.35	-0.94
CIPLA	252.05	245.9	-2.44
DABUR	138.8	136.2	-1.87
DRREDDY	1441.15	1449.15	0.56
GAIL	254.15	256.1	0.77
GLAXO	1179.8	1164	-1.34
GRASIM	2224.55	2195.45	-1.31
GUJAMBCEM	109.8	110.1	0.27
HCLTECH	579.95	566.15	-2.38
HDFC	1324.35	1278.4	-3.47
HDFCBANK	858.7	852.95	-0.67
HEROHONDA	705.35	700.15	-0.74
HINDALC0	164.4	161.95	-1.49
HINDLEVER	232.6	229.85	-1.18
HINDPETRO	265	258.4	-2.49
ICICIBANK	595.15	590.6	-0.76
INFOSYSTCH	1781.15	1767.9	-0.74
IPCL	288.4	283.65	-1.65
ITC	181.9	178.8	-1.7
JETAIRWAYS	577.9	556.9	-3.63
LT	2396.05	2360.1	-1.5
M&M	659.75	632.8	-4.08
MARUTI	836.65	826	-1.24
MTNL	155.3	152.8	-1.61
NATIONALUM	199.9	199.9	0
ONGC	1205.7	1198.45	-0.6
ORIENTBANK	186.65	187.95	0.7
PNB	437.35	427.2	-2.32
RANBAXY	392.15	385.2	-1.77
REL	461.35	458.55	-0.61
RELIANCE	1064.8	1061.9	-0.27
SAIL	77.65	76	-2.12
SATYAMCOMP	794.15	801.95	0.98
SBIN	878.45	863.15	-1.74
SIEMENS	1027.45	1043.65	1.58
SUNPHARMA	891	895.2	0.47
SUZLON	1195.35	1209.7	1.2
TATAMOTORS	845.35	847.3	0.23
TATAPOWER	523.65	523.6	-0.01
TATASTEEL	515.45	505.5	-1.93
TATATEA	846	828.15	-2.11
TCS	975.4	963.1	-1.26
VSNL	407.05	414.4	1.81
WIPRO	512.15	511	-0.22
ZEETELE	271.25	273.1	0.68

Markets Today

2006-08-23T04:56:00.000-07:00

Sensex ends with a near 96-point deficit
The benchmark index finished with losses for the second straight day, as profit-booking dominated proceeding during the day.

The BSE 30-shares Sensex lost 95.97 points (0.83%), to finish on 11,406.65. It had opened at 11,579.92 (also the high for the day), and immediately begun sliding. The benchmark index struck a fresh low of 11,374.86 at the fag end of the day as selling intensified. It witnessed a swing of 205 points during the day.The NSE Nifty lost 28.80 points (0.86%), to settle at 3,335.80.

The benchmark index exhibited signs of weakness since the opening bell, and kept on tumbling as trading progressed. Fresh selling continued to emerge in key index pivotals.The total turnover on BSE amounted to Rs 2,982 crore, lower than Tuesday’s Rs 3,079 crore.

The market-breadth was weak with the advances to decline ratio pegged at 1:1.81. Only 887 shares advanced on BSE compared to 1,610 that declined. As many as 64 scrips did not move. The BSE Mid-Cap index slipped 1.12% and the BSE Small-Cap index lost 1.34%.
From among the 30-member Sensex pack, 21 slipped while only 9 advanced.

HDFC was the biggest loser, down 3.15% to Rs 1,276.10 followed by Bajaj Auto (down 2.16% to Rs 2691.40) and Cipla (down 2% to Rs 246.40).

Satyam Computers was the biggest gainer, up 1.24% to Rs 804 on 5.17 lakh shares.

Index heavyweight RIL slipped 0.06% to Rs 1,064.25 on 11.73 lakh shares. It had moved in a range of Rs 1,073.85 and Rs 1,056.05 for the day.

The SBI counter remained hectic throughout. It stuck a high of Rs 1,053.45 in opening trade and a low of Rs 859.50 as the session progressed. The scrip closed 1.91% lower, at Rs 861.10 on a volume of 7.15 lakh shares.

Educomp Solutions was the top-traded counter on BSE with a turnover of Rs 154.14 crore. The stock witnessed extremely high volatility. It struck a new 52-week high of Rs 613, while its low was at Rs 516.20. Educomp ended 6.90% lower, at Rs 532.20 on a high volume of 27.63 lakh shares. Yesterday, the stock surged 20%, a spurt of 51% in just six trading sessions from its close of Rs 377.75 on 11 August 2006.

Bombay Dyeing had a turnover of Rs 128.46 crore. It plunged 10.90% to Rs 635 on high volumes of 19.41 lakh shares.

Mahindra Gesco Developers' clocked a turnover of Rs 126.01 crore. The counter slipped 10% to Rs 756.50 on 16.08 lakh shares.

Metal, Auto and FMCG stocks were the worst hit on renewed selling.The BSE Metal index was the worst hit, as it shed 129.90 points (1.58%), to end at 8,083.76, on fears of easing global base metal prices. Major losers were Tata Steel (down 1.80% to Rs 506.10), SAIL (down 2.32% to Rs 75.70), Uttam Galva (down 1.55% to Rs 32), Kalyani Steel (down 4.53% to Rs 277) and Jindal Saw (down 4.66% to Rs 291.50).

The BSE Auto index lost 71.33 points (1.44%), to finish on 4,879.75. Noteworthy losers included Maruti Udyog (down 1.46% to Rs 826), LML (down 4.42% to Rs 18.40), Hindustan Motors (down 4.53% to Rs 36.85), Ashok Leyland (down 2% to Rs 38.85) as well as Mahindra & Mahindra (down 3.70% to Rs 635).

FMCG stocks also slipped and the BSE FMCG index declined 1.35%. Some eminent losers were Nestle India (down 0.82% to Rs 1,011), Dabur India (down 1.66% to Rs 136.25), ITC (down 2% to Rs 178.10), Colgate-Palmolive (down 2.30% to Rs 357) and HLL (down 1% to Rs 230), all succumbing to selling pressure.

Among side-counters, Sundram Fasteners jumped 6.91%, to Rs 128.50 on 5.85 lakh shares after the company surprised the market by declaring a liberal 1:1 bonus issue.

Four Soft surged 4.11% to Rs 58.25 on announcing that DHL Global Mail had implemented its iLogistics product suite to manage DHL’s daily logistical operations for Euro 0.12 million.

Suzlon Energy rose 1.15%, to Rs 1,209 after announcing that its Danish arm had bagged orders to supply 29 wind turbines to an Italian and a Portuguese firm. The company said it would supply 10 units of its 2.1-megawatt turbine to Italy's Maestrale Green Energy, and 19 units with the same capacity to Portugal's Tecnologias Energeticas, SA. With the signing of these orders, its cumulative international order-book stands at 670.9 Mw.

Gayatri Sugar advanced 1% to Rs 12.40 on reports that Clearwater Capital has bought 30% stake in the sugar producer.

R Systems International rose 1.80%, to Rs 165.50 on announcement that its board had decided to set up a wholly-owned subsidiary in the US.

Coromandel Fertilisers slipped 0.16% to Rs 64.15. Reports indicate that it has entered into a joint venture with a Tunisian group, Chimique Tunisien, and GSFC to manufacture phosphoric acid in Tunisia.

Welspun Gujarat Stahl Rohren spurted 5.79%, to Rs 74.95 on reports that the company plans to invest Rs 1,200 crore to set up a plates-mill having a capacity of 1.2 million tonnes at Anjar.

Dishman Pharmaceuticals & Chemicals rose 2.51%, to Rs 204.40 on acquisition of Carbogen Amcis AG, a Swiss research-based company with its three production facilities, for manufacturing highly potent high-value products from Solutia Europe SA/NV (SESA) for over $ 75 million. The acquisition was done through Dishman Pharma Solutions AG (DPS), its wholly-owned subsidiary in Brussels on 22 August 2006.

The Hang Seng index lost 61.36 points (0.36%), to 17,088.39. The Nikkei share average dipped 0.11% on Wednesday with a regulator's probe into consumer lender Acom Co., weighing on the sector, but losses were capped by gains in firms with solid profit prospects. The Nikkei 255 index slipped 18.14 points to 16,163.03, after the benchmark ended at a three-month closing high in the previous session.

Crude oil prices slipped in the US market, with the Nymex light crude oil for September delivery slipping 43 cents, to $ 72.67 a barrel.

US indices finished without much of a change on Tuesday. The Dow Jones ended a tad lower, at 11,340, while the Nasdaq Composite ended unchanged at 2,151.

On 21 August 2006, FIIs were net buyers of stocks to the tune of Rs 42.70 crore (gross purchases worth Rs 997.10 crore and gross sales of Rs 954.40 crore) while domestic mutual funds were net buyers of stocks to the tune of Rs 3.45 crore (gross purchases worth Rs 298.75 crore and gross sales of Rs 295.30 crore).

Sebi to resume UIN allotment

2006-08-23T04:47:00.000-07:00

Market watch-dog to thus create database of all market participants and investors

In addition to the Permanent Account Number (PAN), investors may also have to get their unique identification number (UIN) to be allotted by Sebi.

The market regulator has decided to resume allotment of UIN, which had been discontinued earlier in July 2005, on recommendation from a Sebi-appointed committee.The UIN project was targetted at creating a database of market participants and investors (Mapin).

Now Sebi has decided to resume fresh registration. To begin with, the cut-off limit for obtaining UIN with biometric impressions for natural persons has been raised from the existing limit of a trade order value of Rs 1 lakh to Rs 5 lakh or more. The limit will be progressively reduced , Sebi stated in its annual report for 2006-06 released today.

BSE transfers 459 scrips to normal rolling settlement from trade-to-trade

2006-08-23T04:45:00.000-07:00

NSE transfers 97 scrips to normal rolling settlement

The stock exchanges have announced shift of a number of stocks back to normal rolling settlement from trade-to-trade segment. The shift will take effect from Monday 28 August.

BSE has transferred whopping 459 scrips from trade to trade segment to normal rolling settlement. NSE has transferred 97 scrips from trade to trade segment to normal rolling settlement.

Some of the scrips transferred by NSE to normal rolling settlement from trade to trade segment include CEAT, Agro Tech Foods, BPL, Crest Animation Studios, Hindustan Organic Chemicals, Indian Hume Pipe, ITD Cementation, Jindal Drilling, Kinetic Motor, Mid-Day Multimedia, Mysore Cements, Natco Pharma, Petron Engineering, Piramyd Retail, Phoenix Lamps, Shivvani Oil, SPIC, Solar Explosives, and Thirumalai Chemicals.

Hot News

2006-08-23T04:38:00.000-07:00

Overseas orders boost Suzlon Energy
Suzlon Energy rose 1.59%, to Rs 1,214.30 after announcing its Danish arm bagged orders to supply 29 wind turbines to an Italian and a Portuguese firm.As many as 1.27 lakh shares were traded on the BSE.The stock had spurted during late June 2006 to early July 2006 – to Rs 1,137.20 on 5 July from a low of Rs 814.65 on 26 June. However, the rally soon fizzled out and the scrip slipped to a low of Rs 921.85 on 19 July from a high of Rs 1,137.20 on 5 July. It had recovered once again to Rs 1,240.10 by 11 August. Here, the scrip slipped to Rs 1,195.30 by 22 August 2006.

At the current market price of Rs 1,214.30, Suzlon Energy trades at 42.45 times its FY 2006 EPS of Rs 28.60.

Suzlon Energy announced that its Danish subsidiary had orders for supplying 29 wind turbines to Italian and Portuguese firms. The company said it would supply 10 units of its 2.1-megawatt turbine to Italy's Maestrale Green Energy, and 19 units with the same capacity to Portugal's Tecnologias Energeticas, SA.

With the signing of these orders, the cumulative international order-book position of the company stands at 670.9 Mw.

Earlier this month, Suzlon Energy announced its expansion plan by investing Rs 1,400 crore in 2006-07 across three plants in India. The company plans to raise its wind turbine manufacturing capacity to 4200 megawatt from the current 3300 megawatt this fiscal. Suzlon will invest Rs 750 crore in a new integrated turbine manufacturing facility near Mangalore, which will increase the company's turbine capacity by 1500 megawatt. The plant, which is coming up in the special economic zone, will be an export-oriented unit and will aid the company's proposed forays into US, China, Australia and Europe. The plant is expected to become operational from June 2007.

Suzlon Energy had, in May this year, fully integrated its WTG manufacturer unit post-acquisition of the world's second largest windmill gearbox manufacturer, Hansen Transmission, for EV of $ 538 million.

Meanwhile, the recently established manufacturing facilities in the world's fastest growing markets, US and China, will help it increase its market share.

Recently, Suzlon Energy (Tianjin), the step-down subsidiary of the company, and P R China signed a contract with Datang International for 40 Mw comprising 32 units of 1.25 Mw wind turbine generators for installation at the Zhuozi Wind Farm.

In June, Suzlon Energy shareholders cleared a special resolution enabling the firm to raise up to Rs 5,000 crore through the a combination of equity and debt.

Suzlon Energy had registered a net profit growth of 222% to Rs 193.60 crore (Rs 60.14 crore) for Q1 June 2005. Income from operations rose 203.5% to Rs 933.77 crore (Rs 307.59 crore).Suzlon Energy is a leading manufacturer of wind-turbine generators (WTG).

Educomp Solutions flip-flop, bears brunt of volatility
Educomp Solutions plunged nearly 8%, to Rs 526 in contrast to a firm early trend in the scrip when it had hovered at Rs 589 compared to Tuesday’s closing price of Rs 571.45.The volume in the scrip was a huge 23.7 lakh shares on BSE.The stock had spurted nearly 20% on Tuesday to Rs 571.45, on a high volume of 10.4 lakh shares on BSE.Before Tuesday’s spurt, the scrip witnessed a sustained rise since early August, to Rs 476.25 on 21 August from Rs 371.75 on 10 August.

The stock trades at a huge premium over its IPO price of Rs 125. The company had come out with its IPO in December 2005.On 28 June 2006, foreign fund Goldman Sachs bought 3.4 lakh shares of Educomp in a block deal from another foreign fund Lloyd George Investment.

The stock valuation is rich. At current Rs 526, it trades at a PE multiple of 37, based on its FY 2006 EPS of Rs 14.16.

Educomp Solutions is an e-learning solutions provider. In late July 2006, the company had launched an exciting new initiative in online learning - Mathguru.com, an innovative 24x7 math-help program designed to help students solve every single math problem as per their curriculum on an anytime-anywhere basis.

In June 2006, the company had signed two contracts -- one with Gujarat Council of Primary Education (GCPE) and another with Education Department of West Bengal State for providing certain equipments and providing computer aided education services. Both contracts were together worth Rs 50 crore.

Educomp is a technology-driven e-learning solutions provider specialising in creation, management and delivery of learning content. The company has 27 offices in India, a wholly-owned subsidiary in the US and employs over 1,000 personnel.

Recently, the company had approved raising of funds up to $ 25 million from domestic/ international markets.

For Q1 June 2006, the company registered 132% growth in net profit to Rs 1.88 crore, on 75% growth in sales to Rs 9.37 crore. Educomp Solutions' business is seasonal and most of the revenue and profit is booked in the second half, specially the fourth quarter.

For FY 2006 (year ended 31 March 2006), the company’s net profit jumped 119.6% to Rs 13.90 crore, on 68% growth in sales to Rs 52.30 crore.

Stock Alert

2006-08-22T21:43:00.000-07:00

ONGC may gain on increase in gas supply from flood-hit Hazira unit
Oil and Natural Gas Corporation has raised gas supplies from its flood-hit Hazira complex to nearly 30% of normal daily capacity of 40 million cubic metres. ONGC raised daily supply to 12 million cubic metres on Monday from 6 million cubic metres when it resumed gas supply on Friday after a near two-week shutdown due to flooding. "Hazira Gas Processing Complex of ONGC restarted the second train of plant revival on August 21, restoring gas supply to over 12 million metric standard cubic metres per day," a company statement said.

Goodyear India said on Tuesday it would invest Rs 50 crore to strengthen its sales network in the fast-expanding automotive market in India. Goodyear India will set up 50 shop-in-shop branded stores by the end of 2006 and at least 250 more by end-2008, it said.

India's passenger radial tyre market is estimated to grow at 15 percent a year. Of this market, tubeless radials are growing even faster, at about 30 percent a year. "A number of car manufacturers have already switched to tubeless radials as original fitment," Antonio Capellini, managing director, Goodyear India, said in a statement. "This will result in a strong demand for tubeless radials in the replacement market," he said.

The government holding in India's state-run banks will remain 51 percent and above, the Finance Minister, P Chidambaram, said on Tuesday.

Scrips to be transferred by BSE and NSE to normal rolling settlement from trade to trade segment with effect from 28 August, may edge higher. Normally, volumes in a stock fall when it is in trade-to-trade segment as no intra-day squaring up of positions in trade to trade segment is allowed and each trade has to compulsorily result in delivery.

BSE has transferred whopping 459 scrips from trade to trade segment to normal rolling settlement. NSE has transferred 97 scrips from trade to trade segment to normal rolling settlement. Some of the scrips transferred by NSE to normal rolling settlement from trade to trade segment include CEAT, Agro Tech Foods, BPL, Crest Animation Studios, Hindustan Organic Chemicals, Indian Hume Pipe, ITD Cementation, Jindal Drilling, Kinetic Motor, Mid-Day Multimedia, Mysore Cements, Natco Pharma, Petron Engineering, Piramyd Retail, Phoenix Lamps, Shivvani Oil, SPIC, Solar Explosives, and Thirumalai Chemicals.

Indian growth second fastest: S&P

2006-08-22T21:42:00.000-07:00

A new article by Standard & Poor's Ratings Services says that India's economy is growing at an average rate of more than 8% in the past three years, making it the second-fastest growing economy in the world.

"This sustained growth performance is driven by a combination of domestic consumption and investment, supplemented by gains from rapid integration with the global economy through exports, and capital inflows," explained Standard & Poor's contributing author Subir Gokarn.

The threat from high oil prices has, so far, failed to weaken the momentum. We expect the growth to moderate a bit but remain strong at 7.3% for full-year 2007 (April 2006-March 2007).

FIIs hold on to $1bn cash

2006-08-22T21:40:00.000-07:00

Foreign institutional investors (FIIs), who pumped in a record $10bn in Indian equities in ‘05, appear to be sitting it out during the near term considering the huge pile of cash they are holding.

At the last count, these investors, who have a dominant influence on the local stock markets, had cash balances estimated at over $1bn. This has surprised many market players and analysts as these funds parked with banks do not earn any interest. There is no significant cost to be incurred in bringing the money in and taking it out of the country. The rationale could be that these institutional investors may well be waiting for the opportune time to put money.

According to the latest Reserve Bank of India figures, net FII investments into the country between January ’06 and May ’06 aggregated $3.13bn, while according to the figures put out by the Securities and Exchange Board of India (Sebi), they have invested a total of only $1.07bn in equity and debt combined during the same period.

On the face of it this could be viewed as a discrepancy between the figures compiled by the two regulators (both of whom adopt different approaches), but it might not really be the case. While the RBI calculates FII investment on an inflow and outflow basis, or based on the amount of the money that is brought into the country; Sebi publishes the purchases and sales figures of equity and debt.

To this, if one factors in the investments of FIIs in futures and options during the period, even a liberal estimate would place this figure at much less than $1bn. But according to analysts, it still does not explain how over $1bn of funds brought in by FIIs have remained uninvested during this period.

Though a section of the market is inclined to attribute this to leads and lags until actual investment takes place, the gap between the two is rather secular and widening. Figures indicate that in almost every successive months since November ’05 (except December ’05 and February ’06) the difference between the Sebi and RBI figures have widened by a margin of over 100%, while historically, this difference has at best varied between 10% and 40%.

Besides, the money parked by FIIs with custodian banks is also growing. According to the latest available figures, funds in FII accounts in custodian banks has gone up from $332m as of December ‘04 to $1.05bn at the end of December ’05.

Though the actual balance since January ‘06 is not available in the public domain, analysts say that the growing discrepancy between the Sebi and RBI figure indicates that FIIs are sitting on a pile of cash waiting for opportunities to invest. Foreign portfolio investors could not have incurred significant exchange loss on remitting funds back home as the rupee has moved in a narrow range against the dollar since January.

FIIs also do not have to face any tax liability for the uninvested component of funds brought into India.Instead, the custodian banks end up earning a float on the idle cash balances lying with them. Besides, to the extent, the funds lie in the banks in their current accounts, they add to the total stock of money in the financial system.

FIIs lead in open interest position

2006-08-22T21:36:00.000-07:00

Foreign institutional investors (FII) accounted for 60% of the open interest position in single stock futures during the financial year ‘05-06, as per the Sebi balance sheet. Open interest comprise outstanding transactions yet to be settled.

In index futures, FIIs had a share of roughly 35% of the open interest position in FY06. However, these sophisticated investors have chosen to shy away from the relatively complex options market. FIIs share in index options was 5% as on March 31, ‘06, while that in stock options was 0.4%. Overall, open interest in the derivatives segment rose 83% in FY06 to Rs 38,469 crore.

One of the reasons for FIIs staying away from the options market could be its illiquid nature. But lack of FII interest has resulted in a vicious circle for this segment, slowing growth. Single stock futures segment accounted for 57.9% of the total turnover in the derivatives segment FY06, similar to FY05. Index futures comprised 31.4% of the total turnover in FY06, compared with 30.7% the year before.

Index options segment constituted 7% compared with a 4.8% the year before, while the share of stock options fell to 3.7% from 6.6%. “Western markets have stock options as the single largest trading instrument, but in India, single stock futures continued to remain as the most popular derivative product,” the Sebi annual report said.

Meanwhile, in the cash segment, turnover at the BSE and NSE rose by 57.3% and 37.7%, respectively in FY06. Both exchanges accounted for 99% of the total turnover in the cash segment. Despite the broadening and widening of the geographical reach, about 60% of the total turnover was concentrated in Mumbai and Thane. Delhi came next with a 10.1% share, followed by Kolkata with a market share of 7.9%.

M-cap to GDP ratio, an important indicator of market development, surged to 85.58% from 54.41%the previous year.

The number of stocks traded on the BSE and NSE saw an increase of 3,049 and 956, respectively, compared with 2,906 and 856 the year before. However, trading frequency in the stocks on both exchanges gave a mixed picture.

On the BSE, about 86% of the stocks were traded for more than 100 days compared to 81% in 2004-05. However, at NSE, the percentaeg of this group of stocks declined to 92% from 96%. The percentage of stocks which were traded for 30 days or less declined on BSE, but increased at NSE during ‘05-06.

Infosys m-cap hits Rs 1 lakh cr

2006-08-22T21:33:00.000-07:00

Here’s another milestone for tech behemoth and IT biggie, Infosys Technologies. It had the distinction of seeing its market capitalisation (based on the NSE price) cross the magical Rs 1 lakh crore mark on Tuesday.

The Infy scrip which started the day in the green, however, ended the day lower at Rs 1,781.15, though the intra-day high was Rs 1,809. The intra-day low was Rs 1,775.2.

While it crossed the coveted Rs 1 lakh crore milestone at the day’s high figure, by Tuesday’s close, the Infy scrip was valued at a shade over Rs 98,000 crore as against the TCS market capitalisation of Rs 95,450 crore.

ONGC continued its dream run and retained the top spot ending Tuesday with a market capitalisation topping Rs 1.7 lakh crore, partly driven by the interest the market saw in oil and petro-companies. Reliance Industries closed Tuesday with a market capitalisation of Rs 1.48 lakh crore.

Infosys came in fourth behind NTPC. It must, however, be mentioned here that the market capitalisation calculation would be different if one took the prices on the BSE-based sensex.

The reason being that the sensex is based on the free-float mechanism which indicates that the market capitalisation is calculated without the promoter’s holdings.

RBI imposes fine on IDBI for flouting KYC guidelines

2006-08-22T21:29:00.000-07:00

The Reserve Bank of India (RBI) on Monday announced that it had imposed a penalty of Rs 5 lakh on IDBI. The action has been taken following the bank’s violation of the RBI guidelines on account opening, including joint accounts, Know Your Customer (KYC) norms and other extant guidelines relating to IPO financing.

At an earlier date, the RBI had served a show-cause notice on the bank, in response to which IDBI had submitted a written reply. The CMD of the bank, in the meantime, had sought a personal hearing with the central bank, which has been granted.

After studying the bank’s response, the RBI was of the view that the violation charges had been substantiated and hence, the monetary penalty.In October ’04, as part of its measures to improve transparency in banks, the RBI had decided to put penalty information in the public domain, after following the due procedure of advising a bank and seeking explanation from it.

On June 1, ’06 Centurion Bank of Punjab got RBI stick when it was asked to pay up Rs 15 lakh for flouting KYC norms and issuing 10,200 cheque leaves to a customer in a short span of just 2 months.

Other banks that have faced similar action from the regulator in the past include Standard Chartered Bank, Citibank, ICICI Bank, HDFC Bank, Bharat Overseas Bank, Indian Overseas Bank and ING Vysya Bank.

How will the market be today??

2006-08-22T21:24:00.000-07:00

Market may edge lower on profit taking
Profit taking in blue chips at the fag end of the trading session pulled the Sensex down 9 points on Tuesday (22 August). Further profit taking is likely today with oil prices remaining high. Subdued to weak trend in Asian stocks on Wednesday may also weigh on the domestic bourses today.

But small-cap and mid-cap stocks may edge higher after the stock exchanges on Tuesday shifted a host of stocks back to normal rolling settlement from trade to trade segment. The change will take effect from Monday 28 August.

Volatility may take place in the next few days ahead of expiry of August 2006 derivatives contracts next Thursday (31 August).

Sliding technology and export shares dragged Asian stock markets lower on Wednesday on renewed fears US interest rates may rise and stifle demand. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.3% to 0.68%.

Higher oil prices remain a concern, with no resolution in sight yet to end a nuclear stand-off between Iran and the West. In Asian trading on Wednesday, US crude oil futures were steady near $73 a barrel after Iran called for more talks with the West over its disputed nuclear programme. The UN Security Council has set an Aug. 31 deadline for Iran to halt its nuclear work or face sanctions.

Nifty 50 Quotes at End Of Day

2006-08-22T05:15:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3366	3364.6	-0.04
ABB	2837.2	2796.95	-1.42
ACC	913.2	907.6	-0.61
BAJAJAUTO	2771	2759.8	-0.4
BHARTIARTL	409.9	409.4	-0.12
BHEL	2284.05	2237.8	-2.02
BPCL	371.1	352.65	-4.97
CIPLA	251.7	252.05	0.14
DABUR	138.8	138.8	0
DRREDDY	1474.2	1441.15	-2.24
GAIL	252.9	254.15	0.49
GLAXO	1219.15	1179.8	-3.23
GRASIM	2239.85	2224.55	-0.68
GUJAMBCEM	110.55	109.8	-0.68
HCLTECH	584.1	579.95	-0.71
HDFC	1291.3	1324.35	2.56
HDFCBANK	837.55	858.7	2.53
HEROHONDA	697.6	705.35	1.11
HINDALC0	161.3	164.4	1.92
HINDLEVER	236.35	232.6	-1.59
HINDPETRO	287.4	265	-7.79
ICICIBANK	594.65	595.15	0.08
INFOSYSTCH	1798.1	1781.15	-0.94
IPCL	292.7	288.4	-1.47
ITC	180.75	181.9	0.64
JETAIRWAYS	588.65	577.9	-1.83
LT	2369.05	2396.05	1.14
M&M	663.9	659.75	-0.63
MARUTI	841.3	836.65	-0.55
MTNL	153.1	155.3	1.44
NATIONALUM	199.2	199.9	0.35
ONGC	1190.7	1205.7	1.26
ORIENTBANK	184.65	186.65	1.08
PNB	441.4	437.35	-0.92
RANBAXY	400.65	392.15	-2.12
REL	449	461.35	2.75
RELIANCE	1067.6	1064.8	-0.26
SAIL	75.65	77.65	2.64
SATYAMCOMP	800.25	794.15	-0.76
SBIN	883.35	878.45	-0.55
SIEMENS	1044.35	1027.45	-1.62
SUNPHARMA	869.2	891	2.51
SUZLON	1207.3	1195.35	-0.99
TATAMOTORS	858.55	845.35	-1.54
TATAPOWER	523.85	523.65	-0.04
TATASTEEL	508.05	515.45	1.46
TATATEA	845.75	846	0.03
TCS	969.3	975.4	0.63
VSNL	413.5	407.05	-1.56
WIPRO	510.75	512.15	0.27
ZEETELE	271.9	271.25	-0.24

Markets Today

2006-08-22T05:12:00.000-07:00

Sensex ends slightly lower on profit-taking
The market ended in the red today as weakness gripped the last 30 minutes of trade. It had remained firm till the first half of the trading session, following in the stride of robust Asian markets. However, volatility crept in during mid-afternoon trade.

The benchmark BSE Sensex lost 9 points, to settle at 11,502.62. From the day’s high of 11,619.86, the barometer index shed 117 points. The S&P CNX Nifty shed 1.40 points, to end at 3,364.60.The market-breath turned negative in late trading. This was in contrast to a strong breadth earlier during the day. As many as 1,284 shares declined on BSE compared to 1,237 that declined. A total of 67 shares remained unchanged. Losers outpaced gainers by a ratio of 1.03:1.

The BSE clocked a turnover of Rs 3,063 crore, compared with Monday’s Rs 2,687 crore.

Refinery shares plunged as crude topped $72 a barrel level. Crude prices also weighed on auto shares. Pharma pivotals as well as those from IT, cement and the FMCG sectors slipped. However, metal shares advanced tracking firm global base metal prices.

The market has staged a solid rebound from a lower level in the past few days and may consolidate its gains. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Unless oil prices & interest rates rise significantly, there is no serious danger to India's growth story, brokerage Enam Securities notes in a recent report. India’s long-term growth drivers are a favourable demography (large share of young population), robust domestic consumption and acceleration in infrastructure creation.

Indian equity valuations remain higher compared to its emerging market peers because of the premium attached due to decent-to-strong earnings growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

In today’s trade, a sell-off gripped refinery shares as crude price strengthened. HPCL plunged 6% to Rs 269, BPCL lost 6% to Rs 348 and Indian Oil Corporation lost 5% to Rs 446.50. US crude oil was hovering at $ 72.55 a barrel after Monday’s sharp surge. Refinery shares spurted last week as a sharp fall in crude oil prices eased concerns about their losses incurred on sales of petrol and diesel.

Index heavyweight Reliance Industries (RIL) slipped into the red in late trading. The stock shed 0.89%, to Rs 1,058.50. It came sharply off the session’s high of Rs 1,084.80.PSU power equipment major Bhel dropped 2.3%, to Rs 2,229.

Pharma major Ranbaxy lost 2% to Rs 392.45. Media reports on Monday stated that Ranbaxy Laboratories is close to acquiring Russian generic drugs maker Akrikhin for $100 million.

Dr Reddy’s Lab dropped 2.3% to Rs 1,438 on profit-taking after a recent rally. The scrip currently trades cum-bonus (a 1:1 bonus).

Auto shares dropped on fears of a possible rise in domestic retail prices. Tata Motors shed 2% to Rs 841, Ashok Leyland shed 1.3% to Rs 39.65, Mahindra & Mahindra shed 1% to Rs 657, Bajaj Auto lost 1% to Rs 2,745 and car major Maruti Udyog shed 0.7%, to Rs 834. The government is set to review retail prices of petrol and diesel on 1 September 2006.

Software major Infosys lost 1.2% to Rs 1,776.HDFC Bank and HDFC firmed up in late trading. The former surged 3% to Rs 863 and the latter gained 2.2% to Rs 1,319.

Sterlite Industries rose 3% to Rs 416 after it approved the sale of its power transmission division to focus on the metals business.

Biocon rose 2% to Rs 387. From a recent low of Rs 329.75 on 9 August, the stock has risen 17%.

Select side-counters surged. Educomp Solutions jumped 20% to Rs 571.50, Uniply Industries rose 17% to Rs 28.65, Everest Kanto Cylinder jumped nearly 14% to Rs 437, Sintex Industries gained 12% to Rs 183.50, Rajesh Exports rose 8% to Rs 155.80 and Granules India gained 9% to Rs 102.40.

Gitanjali Gems jumped 5% to Rs 176.95 on reports that the company is looking at both organic and inorganic route, to grow its international retail business. At present international branded business accounts for 20% of retail sales, which is expected to go up by 50% till 2010.

Aristocrat Luggage jumped 5% to Rs 43.45 after its board of directors decided to sale/dispose the company’s land and building located at Waluj, near Aurangabad, in Maharashtra.

Paper major Ballarpur Industries rose 2.4% to Rs 113.50 after it reported a 68% surge in net profit for Q4 June 2006 to Rs 67.88 crore (Rs 40.47 crore). Net sales rose 11% to Rs 529.69 crore (Rs 476.86 crore).

Ramco Systems plunged 7% to Rs 207 after stock exchanges said the scrip would be transferred to trade-to-trade segment from 25 August.

Hot News

2006-08-22T05:11:00.000-07:00

Aristocrat Luggage cheers propery sale programme
Aristocrat Luggage surged 5%, to Rs 43.45 after its board agreed to sell the firm's Aurangabad property.A thin volume of 2,200 shares was traded on the BSE. There were pending buy orders for 2,420 shares at the maximum price.The scrip has rallied from a recent low of Rs 32.05 on 11 July, amid bouts of volatility, to Rs 47.30 by 3 August. Here, the stock declined slowly to Rs 41.40 by 21 August 2006.

At the current market price of Rs 43.45, Aristocrat Luggage trades at three times its Q1 June 2006 annualized EPS of Rs 12.29.

In the first quarter of FY 2006, Aristocrat had set up a new plant with installed capacity of 1 million pieces per annum, at Haridwar, Uttaranchal, to manufacture moulded luggage. Commercial production started in June. The company incurred a capex of Rs 7.5 crore on this facility.Aristocrat Luggage registered a net profit growth of 352% to Rs 1.72 crore (Rs 0.38 crore) for Q1 June 2006. Net sales rose 55.5% to Rs 25.46 crore (Rs 16.37 crore).

Aristocrat Luggage manufactures, markets and distributes luggages and related accessories.

Block deal enhances Balaji Telefilms stature
Balaji Telefilms surged 4.62%, to Rs 136 on a block deal as Reliance Capital Asset Management purchased 9,97,057 shares at Rs 130 per share.A total of 16,379 shares was traded on the BSE.The counter has rallied smartly from a recent low of Rs 105 on 24 July to Rs 134.70 on 14 August on strong Q1 results. Here, the stock slipped to Rs 130 by 21 August on profit-booking.

At the current market price of Rs 136, Balaji Telefilms trades at 12 times its Q1 June 2006 annualized EPS of Rs 10.66.

On Monday, Reliance Capital Asset Management purchased 9,97,057 shares of Balaji Telefilms from Oppenheimer Fund at Rs 130 per share on Monday. Oppenheimer sold 10 lakh shares of the company at the same rate on Monday.

Balaji Telefilms plans to diversify into ad film-making. The company, which is expanding its operations by foraying into production of ad films and corporate films, has appointed Kalpana Ravi, who has 15 years of experience in the field, head of the new venture.

Further, Balaji Telefilms plans to set up a television training school in Pune. The project is likely to be functional by mid-2007. The company has come up with this idea to fulfil the demand of trained talent in the television space. Those trained at the school will work with them. The school will ensure a regular flow of trained television professionals.

This school will train students in production, direction, editing and acting. It will run a two-year course and a short six-month course. Students will have to sign a bond that they would work with Balaji Telefilms for a certain period after finishing the course.

At present, Balaji Telefilms runs seven soaps on Star Plus, one show on Zee TV and two shows on Sony. The production house also has seven shows for the southern market.

Balaji is essentially a television content provider. It caters to a wide spectrum of audiences through sitcoms, soaps, game shows, suspense-thrillers and children’s programmes in Hindi as well as other regional languages.

Balaji Telefilms registered a net profit growth of 38.8% to Rs 17.38 crore (Rs 12.52 crore) for Q1 June 2006. Net sales rose 16% to Rs 73.54 crore (Rs 63.33 crore).

Hot News

2006-08-22T05:09:00.000-07:00

Micro Technologies powers ahead on tie-up for US market
Mciro Technologies surged 4.91%, to Rs 217 on decision to tie-up with a US-based firm for customizing the high-end security products of the company in the US market.As many as 1.57 lakh shares were traded on the BSE.The stock has been southbound and is yet to recover from the recent meltdown in small-caps and mid-caps. From a closing high of Rs 355.10 on 10 May, it dropped amid much fluctuation, to Rs 128.25 on 21 July. Here, the stock rose to close at Rs 206.85 on 21 August 2006.

At the current market price of Rs 217, Micro Technologies trades at 8 times its Q1 June 2006 annualized EPS of Rs 25.90.

Micro Technologies India has tied up with Knowledge Vector, a US based enterprise solutions company. Knowledge Vectors will customize the high-end security products of the company for the huge security solutions market in the US. This tie-up leverages technologies from both companies to connect advantage of global market and will cater to the growing demand for defense and homeland security product in the US market.

Recently, Micro Technologies India entered into a tie-up with Active Solutions of Nepal for launching its security products. Also, the company and Girvan Institute of Technology struck a partnership under which they will together introduce various security products, developed by Micro Technologies, in the US. Girvan will customize the products of the company to meet the huge demand for homeland security products in the US.

Micro Technologies in May developed an innovative global mobile messaging product, Micro LMS (Long Messaging Service). The patent pending micro LMS fulfills the long-standing need for a messaging service that overcomes the barriers posed by a SMS (Short Message Service).

On 21 April, Micro Technologies India unveiled Micro SBB (Secure-Bank Black Box), the first ever wireless product for the Indian banking system. The product is built on a technology backbone of electronics and telecommunications solutions. According to industry estimates, the total India market size is pegged at Rs 350 crore for this type of product solutions.

In March, the company tied up with ARAI for developing automotive electronic products.Earlier in February, Micro Technologies India signed a strategic memorandum of understanding with Sony Ericsson for developing new high-tech wireless products and solutions for the global market.

Micro Technologies, whose clients include Mahindra & Mahindra, Bharti Tele-Ventures Mahanagar Telephone Nigam, and Bharat Petroleum, makes disaster management and security products. Micro Technologies is attempting to make the product available in key towns like Delhi, Mumbai, Bangalore, Pune, Hyderabad and Chennai.

Micro Technologies has registered a net profit growth of 177.4% to Rs 6.52 crore (Rs 2.35 crore) for Q1 June 2006. Net sales during the period increased to Rs 22.16 crore from Rs 11.84 crore.

Ballarpur Industries ballistic on robust results
Ballarpur Industries jumped 2.45%, to Rs 113.50 after it reported a strong set of results for quarter and full year ended June 2006.As many as 2.74 lakh shares were traded in the counter on BSE.The scrip has witnessed a steady uptrend in the past couple of days. From Rs 89.35 on 13 June 2006, it advanced till Rs 110.80 by 21 August 2006, as demand lasted.

Ballarpur Industries posted a 67.65% rise in net profit to Rs 67.88 crore for the quarter ended 30 June 2006 compared to Rs 40.47 crore for the quarter ended 30 June 2005. Total income increased from Rs 476.86 crore to Rs 529.69 crore.

For FY 06, the company posted 26% rise in net profit to Rs 212 crore as compared to Rs 168.09 crore for the year ended 30 June 2005. Total Income increased from Rs 1,800.29 crore to Rs 1,880.37 crore.

On consolidated basis, the group posted a net profit after taxation, minority interest and share in associates of Rs 214.17 crore for the year ended 30 June 2006 compared to Rs 168.88 crore for the year ended 30 June 2005. Total income increased from Rs 1,800.42 crore to Rs 1,919.68 crore.

Recently, Ballarpur Industries entered into a conditional agreement on 4 June 2006 for acquisition of 97.8% in Sabah Forest Industries (SFI), Malaysia, an integrated paper and pulp mill in Malaysia for $ 261 million, payable over a period of 18 months from the date of completion of acquisition. The Malaysian company has a paper capacity of 1,44,000 million tonnes per annum (mtpa) and a pulp capacity of 1,20,000 mtpa, together with various forest concessions with respect to 2,89,000 hectares of land, valid till December 2094. SFI's other assets include a jetty, a power plant facility and a steam generation facility. The acquisition has been done jointly with J P Morgan, which will get up to 20% in SFI, with the balance being acquired by the company.

Ballarpur Industries is the country's largest paper producer of high-quality and high-margin coated paper, hi-bright maplitho paper, and bond paper; and the second largest producer in the copier paper segment.

HCL Tech: Betting big

2006-08-21T23:26:00.000-07:00

With the strategy of chasing large deals paying off, HCL Tech puts up a decent show in the June quarter.

HCL Technologies had a reasonably decent quarter ended June 2006. Its revenues increased 11.8 per cent q-o-q to Rs 1,253.8 crore in the June quarter. Infrastructure management services reported growth of 20 per cent, while IT services grew 11.4 per cent.

Though direct costs went up 14 per cent, other costs – selling, general and administrative – stayed at the same levels in March 2006 and, as a result, the company was able to see its EBITDA margin nudge up 10 basis points to 22.4 per cent in the June quarter.

For the year ended June 2006, HCL Tech's sales were about $24 million short of its targeted $1 billion. However, its strategy of chasing large orders seems to be paying off. It bagged multi-million, multi-year deals from EXA, Skandia and DSG International.

According to the management, infrastructure management has been the entry point for the company to win large orders in many cases, despite the fact that applications (IT services) dominate the contract.

Company officials also clarified that the margins on the large deals are identical to those on smaller projects. In the IT services segment, its operating margin fell 30 basis points q-o-q to 23.2 per cent.

In BPO, its margins improved by 130 basis points. Infrastructure management margins improved by over 240 basis points owing to a better sales mix but are still low at 17.44 per cent.

HCL's employee addition in FY06 at 9 per cent was lower compared with other tech companies, and it plans to ramp it up this year. The key to the company's growth is how able it is to execute large orders and improve utilisation rates.

At the current price, the HCL Tech stock trades at about 19 times estimated FY07 EPS and 16 times FY07 EPS, and investors seem to have adopted a 'wait-and-watch' approach before the impact of its large deals becomes evident over the next few quarters.

Stock Alert

2006-08-21T22:51:00.000-07:00

M&M may gain on overseas initiatives
Mahindra & Mahindra (M&M) said on Monday it had entered into a contract with the government of Gambia to supply tractors and set up an assembly plant there. "The African continent is important for M&M's global plans ... M&M plans to work with more countries in Africa," a statement from the company said. Mahindra, the world's fourth-biggest tractor maker, has a joint venture with China's Jiangling Motors Company and is also eyeing acquisitions in Europe.

Heavy Industries Minister Santosh Mohan Deb said on Monday his ministry had no objection to the sale of the government's remaining stake in the country's biggest car maker Maruti Udyog. "I have no objection to the sale of remaining share in Maruti. I have already informed this to the finance minister," Deb told reporters. Government holds 10.27% in Maruti Udyog. Japan's largest minicar maker, Suzuki Motor holds 54.2% stake in Maruti.

Radico Khaitan said on Monday it had formed an equal joint venture with Britain's Diageo Plc to develop liquor brands for the growing Indian market. The deal is subject to regulatory approvals. Diageo brands including Smirnoff vodka and Johnnie Walker whisky are already sold in India.

New Delhi-based Radico, which has the second-largest share of the Indian liquor market with annual sales of 12 million cases, makes brands like 8 PM whisky and Contessa rum, and distributes some international wine and whisky brands.

Cupid has received an order for supply 30 million pieces of condoms (Nirodh) from the Ministry of Health and Family Welfare, Government of India. The order is valued at Rs 3.76 crore.

Spentex Industries said on Monday it raised Rs 46.59 crore through the issue of 7.5 million shares at Rs 62.13 per share to a total of four funds. The money raised would be used for expansion and acquisitions, the company said in a statement. The shares were allotted to Sundaram BNP Paribas Mutual Fund, Goldman Sachs Investments (Mauritius), Voyager Fund (Mauritius) and Nikko Asset Management (Mauritius).

The board of directors of Suryajyoti Spinning Mills has accorded its consent to issue Foreign Currency Convertible Bonds (FCCBs), Global Depository Receipts (GDRs), and other similar securities up to $ 20 million.

Himachal Futuristic group has reportedly appointed a UK-based consultant, Euromax, to scout for investors for its two listed companies, Himachal Futuristic Communications and HFCL Infotel. Himachal Futuristic Communications makes telecom equipment while HFCL Infotel provides basic telephony services in Punjab on the CDMA platform.

Sterlite Industries said on Tuesday its board had approved the sale of its power transmission division to group company Sterlite Optical Technologies for Rs 148.51 crore. The power transmission division makes power conductors.

How will the market be today??

2006-08-21T22:45:00.000-07:00

Oil price rise may cap upside on bourses
The market may open higher tracking steady to firm trend in Asian stocks. However, a rebound in oil price would cap upside. Domestic bourses are likely to consolidate in the near term after a sharp surge in the past few days.

Notwithstanding drop in US stocks on Monday (21 August), Asian markets edged higher on Tuesday (22 August). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.05% to 0.77%.

US stocks fell on Monday, for the first time in six sessions, as a sharp rebound in oil prices and a disappointing outlook from Lowe's Cos. Inc., the No. 2 US home improvement chain, raised fears about slower consumer spending. The Dow Jones industrial average dropped 36.42 points, or 0.32% to close at 11,345.05. The Standard & Poor's 500 Index declined 4.78 points, or 0.37% to finish at 1,297.52. The Nasdaq Composite Index fell 16.20 points, or 0.75% to end at 2,147.75.

Crude oil edged higher, topping $72 a barrel on Tuesday as Iran, the world's fourth-largest oil exporter, said it would press ahead with its nuclear program, indicating it will not heed a UN demand to stop enriching uranium. Crude was hovering at $72.49 a barrel in early Asian trading.

As per provisional data, FIIs sold shares worth a net Rs 139 crore on Monday (21 August), the day when Sensex had risen 46 points. There has been sustained FII inflow in Indian stocks since late July 2006.

Mutual funds sold shares worth a net Rs 57 crore on Friday 18 August, the day when Sensex had lost 12 points. The inflow of mutual funds for August 2006, till 18 August, reached Rs 251 crore. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to the premium attached to decent-to-strong earnings growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

Nifty 50 Quotes at End Of Day

2006-08-21T07:29:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3356.75	3366	0.28
ABB	2832.2	2837.2	0.18
ACC	903	913.2	1.13
BAJAJAUTO	2706.75	2771	2.37
BHARTIARTL	409.65	409.9	0.06
BHEL	2283.3	2284.05	0.03
BPCL	374.5	371.1	-0.91
CIPLA	249.65	251.7	0.82
DABUR	141.4	138.8	-1.84
DRREDDY	1495.7	1474.2	-1.44
GAIL	254.1	252.9	-0.47
GLAXO	1208.7	1219.15	0.86
GRASIM	2206.25	2239.85	1.52
GUJAMBCEM	110.05	110.55	0.45
HCLTECH	574.7	584.1	1.64
HDFC	1306.05	1291.3	-1.13
HDFCBANK	841.1	837.55	-0.42
HEROHONDA	706.2	697.6	-1.22
HINDALC0	160.95	161.3	0.22
HINDLEVER	237.95	236.35	-0.67
HINDPETRO	273.75	287.4	4.99
ICICIBANK	588.35	594.65	1.07
INFOSYSTCH	1762	1798.1	2.05
IPCL	286.9	292.7	2.02
ITC	179.75	180.75	0.56
JETAIRWAYS	575.05	588.65	2.37
LT	2359.5	2369.05	0.4
M&M	644.85	663.9	2.95
MARUTI	840.65	841.3	0.08
MTNL	153.1	153.1	0
NATIONALUM	199.1	199.2	0.05
ONGC	1210.25	1190.7	-1.62
ORIENTBANK	176.35	184.65	4.71
PNB	414.05	441.4	6.61
RANBAXY	408.25	400.65	-1.86
REL	455.9	449	-1.51
RELIANCE	1055.9	1067.6	1.11
SAIL	76.9	75.65	-1.63
SATYAMCOMP	793.4	800.25	0.86
SBIN	879.1	883.35	0.48
SIEMENS	1056.8	1044.35	-1.18
SUNPHARMA	866.1	869.2	0.36
SUZLON	1194.1	1207.3	1.11
TATAMOTORS	849.95	858.55	1.01
TATAPOWER	524.7	523.85	-0.16
TATASTEEL	513	508.05	-0.96
TATATEA	844.8	845.75	0.11
TCS	969.7	969.3	-0.04
VSNL	402.85	413.5	2.64
WIPRO	512.2	510.75	-0.28
ZEETELE	271.8	271.9	0.04

Markets Today

2006-08-21T07:25:00.000-07:00

Session posts a low turnover
Even as the benchmark index notched up gains and finished higher, the total turnover on BSE dwindled to Rs 2,520 crore compared to Rs 3,238 crore on Friday.The benchmark index did a complete reversal in the second half of the day’s trading due to strong buying in key index pivotals, after having remained weak for the first half. This early weakness was induced by Asian indices, which were lacklustre today.

The BSE 30-shares Sensex ended with spurt of 45.96 points, on 11,511.68.It had opened higher, at 11,488.03, but slipped immediately to a low of 11,375.90 under selling pressure, tracking the weak Asian indices.The Sensex had struck a high of 11,531.60, in the fag hours of the day as buying intensified.The barometer index witnessed a swing of 115 points for the day.The S&P CNX Nifty rose 9.25 points, to close on 3,366.

The market-breadth was firm throughout the day, and gathered steam during the latter part of the day. For 1,444 shares that advanced, only 1,039 declined. As many as 75 shares remained unchanged.The BSE Mid-Cap index rose 0.77% while the BSE Small-Cap index moved higher 0.90%.Among the Sensex pack, 18 advanced while 12 declined.

Grasim was the biggest gainer, up 2.40% to Rs 2,551.30 followed by Bajaj Auto which advanced 2.40% to Rs 2,775.Infosys Technologies (up 2.20% to Rs 1,800), Tata Motors (up 1.77% to Rs 865) and ACC (up 1.37% to Rs 915) were the other gainers.

Pharma counters Ranbaxy (down 1.65% to Rs 401.30) and Dr Reddy's (down 1.54% to Rs 1,472) were the noteable losers.

PSU oil exploration major, ONGC, slipped 1.35% to Rs 1,193.90 on a volume of 2.32 lakh shares. It moved in a range of Rs 1,217 - 1,178 for the day.

Index heavyweight RIL made a smart recovery from a low of Rs 1,045, rallying 1.61%, to Rs 1,072.50 on a volume of 10.12 lakh shares.

The BSE FMCG index which has slipped sharply, recovered to close 0.11% lower, at 1,982.14, and was the biggest loser among sectoral indices.

Among FMCG stocks, Nestle India (down 2.32% to Rs 1,025), Dabur India (down 1.66% to Rs 139), Colgate-Palmolive (down 1.13% to Rs 363) and HLL (down 0.35% to Rs 237) lost ground under selling pressure.

Select refinery shares witnessed buying demand on the back of a sharp fall in crude oil price from record highs. HPCL (up 5.33% to Rs 287.55), Indian Oil Corporation (IOC) (up 1.05% to Rs 472), Kochi Refineries (up 3.65% to Rs 161) and IBP (up 1% to Rs 474), advanced as investors reckoned that these stocks have turned attractive at current levels after a protracted underperformance. These shares have underperformed the benchmarks in the last couple of years due to earnings uncertainty on rising disparity between crude oil prices and domestic retail prices of petroleum products. However, the long-term outlook for their earnings remain hazy as the government retains control on pricing of petroleum products.

GMR Infrastructure finished at Rs 210.30, a miniscule premium over the IPO price of Rs 210. The stock hit a low of Rs 205.10 and a high of Rs 219.80. As many as 72.08 lakh shares changed hands in the counter on BSE. GMR Infrastructure's IPO received a strong response from FIIs and domestic institutional investors. The post-issue, FII-holding in the scrip is 6.53%. Retail investors were allotted shares at Rs 199.50, a discount of 5% over the issue price of Rs 210.

Among side-counters, Tera Software jumped 5% to Rs 72.20 after it scheduled a board meeting for 28 August 2006 to consider an issue of bonus shares.

Punj Lloyd surged 3.91% to Rs 765 on securing a pipeline order of $ 290 million from Sirte Oil Company, Libya, on an EPC basis.

Great Eastern Shipping Company advanced 4.12%, to Rs 259.30 after the company’s wholly-owned subsidiary, Greatship India (GIL), signed a contract for two new building anchor handling tug cum supply vessels (AHTSVs). The 80 T - AHTSVs ordered with Colombo Dockyard, are scheduled to be delivered during Q3 and Q4 of FY 2007-08.

Rana Sugars jumped 9.82%, to Rs 30.20 on allotment of liquor quota and other sops by the Punjab Government.

Mawana Sugars surged 16.30% to Rs 81 on a high volume of 12.78 lakh shares. Its shares will begin to trade on NSE from Tuesday (22 August 2006).

Patel Engineering surged 5%, to Rs 327.30 on bagging a power project contract worth Rs 318 crore from NTPC. The project, to come up on the the Bhagirathi river in Uttaranchal, has to be completed in 38 months.

Centurion Bank of Punjab rose 3.72% to Rs 24.20 on a high volume of 15.50 lakh shares after deciding to acquire Kerala-based Lord Krishna Bank. Based in Kerala, Lord Krishna Bank commands a strong presence in the region with a network of 112 branches. If the deal goes through, it will be CBoP's second acquisition in two years. Last year it acquired Bank of Punjab in an all-share deal.

Aditya Birla Nuvo jumped 4.77% to Rs 839.30 after TransWorks Information Services, a member of the Aditya Birla Group, announced its success in bidding for Minacs Worldwide.

HCL Technologies rose 1.60% to Rs 584.50 as its net income rose 44% to Rs 233 crore for the fourth quarter ended 30 June 2006. Consolidated revenues rose to Rs 1,254 crore from Rs 927 crore in the same quarter a year ago. On sequential basis, HCL Tech’s Q4 (QoQ) net profit rose 20.79% from Rs 192.9 crore to Rs 233 crore. Revenues increased 11.75% from Rs 1,122 crore to Rs 1,253.8 crore.

The Hang Seng index lost 322.82 points (1.86%), to 17,007.88 while the Nikkei 225 index was down 136.94 points (0.85%), to 15,969.04.US indices advanced in a late bout of buying support on Friday, with the Nasdaq Composite registering the biggest single-week gain in over three years, to finish at 2,164, up 6 points from the previous closing. Dow Jones rose 47 points, to 11,381.

Price of crude oil, after retreating for the last few sessions, rose on Friday in the US market. The Nymex light crude oil for September delivery inched higher by $ 0.62, to $ 71.76 a barrel.

On 17 Aug 2006, FIIs were net buyers of stocks to the tune of Rs 808.80 crore (gross purchases worth Rs 1,994.60 crore and gross sales of Rs 1,185.80 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs 23.84 crore (gross purchases worth Rs 448.69 crore and gross sales of Rs 472.53 crore).

Volumes translate into value for LML

2006-08-21T07:24:00.000-07:00

High volumes have accompanied a recovery of late in the battered LML counter.It surged nearly 6% today to Rs 19.65. The volume in the stock on BSE aggregated a huge 59.7 lakh shares.From a recent low of Rs 15.15 on 10 August, it has risen 29.7%.

Volumes have picked up in the stock just at the time when the scrip has began recovering from 11 August. The daily volume surged to a massive 1.6 crore shares on BSE on 16 August. In four trading sessions, from 11 August to 18 August, the daily volumes on BSE hovered between 21 lakh and 67 lakh shares. This is much higher than the average daily volume of 4.29 lakh shares in the scrip on BSE.

Foreign funds like Merrill Lynch and Credit Suisse, Singapore have recently sold large number of shares of in the secondary market in the LML scrip. Earlier, these FIIs had purchased substantial stake in LML through conversion of foreign currency convertible bonds into equity shares.

Since early May 2006, LML plunged to a low of Rs 15.15 on 10 August from Rs 44.65 on 10 May.The major positive trigger for the scrip could be the picking up of stake by a strategic partner. In February 2006, LML had announced that it was looking at inducting a strategic partner.

Labour unrest and a lack of working capital has practically stopped production and despatches at the plant since months.LML had earlier planned for the launch of gearless scooters and focus on exports as a route to revival.

For the quarter ended June 2006, LML reported a net loss of Rs 13.32 crore as compared to a net loss of Rs 15.80 crore for the corresponding period last year. Sales plunged to Rs 4.22 crore from Rs 79.19 crore.

Hot News

2006-08-21T07:20:00.000-07:00

Grand Q4 numbers lift HCL Tech
HCL Technologies rose 2.7%, to Rs 591 on the back of strong Q4 June 2006 results.As many as 49,397 shares changed hands in the counter on BSE.The stock had surged ahead of the results in a firm market. From a recent low of Rs 515.85 on 1 August, it had risen 11.5% to Rs 575.35 on 18 August. The results were announced on Saturday (19 August).

The pre-results recovery in the stock was a continuation of the recovery in the scrip that had begun in mid-June 2006. From a low of Rs 410.40 on 14 June, it had surged to Rs 575.35 by 18 August. Earlier, the scrip witnessed a sharp fall in a weak market, to a low of Rs 410.40 on 14 June from a high of Rs 651.15 on 18 April.

The current price of Rs 591 discounts its FY 2006 (year ended 30 June 2006) EPS of Rs 23.90, by a PE multiple of 24.7.

For the fourth quarter ended 30 June 2006, HCL Tech reported 21% sequential growth in consolidated net profit to Rs 233 crore. Consolidated topline expanded 12% to Rs 1,253.80 crore.For the year ended 30 June 2006, HCL registered 27% growth in consolidated net profit to Rs 773.20 crore, along with 30% growth in sales to Rs 4,388.20 crore.

HCL Technologies, which provides software services to companies such as Cisco Systems Inc. and Johnson & Johnson Company, said it hired 2,678 workers during the April-June period, taking its staff size to 32,626.

The company, headquartered in Noida - an industrial hub adjoining New Delhi, plans to invest $8 billion and hire 35,000 workers over the next two years to expand and grab a larger share of the outsourcing industry.

India's software and technology firms are seeing rapid profit growth as Western companies transfer their software development and back-office work to India, where wages are low and skilled English-speaking workers are plentiful.

In January this year, HCL Tech bagged a five-year outsourcing deal worth Rs 1,500 crore from a European electrical retailer, DSG International.HCL Technologies is also setting up a dedicated design center for product engineering services in Bangalore for Augmentix Corporation, one of the leading worldwide suppliers of mission critical solutions for rugged environments.

New orders bolster GE Shipping
Great Eastern Shipping Company rose 0.78%, to Rs 251 on getting orders for building two anchor handling tug cum supply vessels.As many as 1.35 lakh shares were traded on the BSE.The stock had recovered from a lower level at Rs 188.45 on 14 June, to advance to Rs 232.90 on 30 June. The stock had remained range bound, thereafter, and moved between Rs 229-234 till 13 July. Here, the stock dropped to Rs 203.15 on 21 July only to advance further to Rs 253.80 by 14 August. The stock slipped later and closed at Rs 249.05 on 18 August 2006.

GE Shipping’s current price of Rs 251, discounts its Q1 June 2006 annualized EPS of Rs 57.99, by a PE multiple of 4.32.

Great Eastern Shipping Company (GE Shipping)'s wholly-owned subsidiary, Greatship India (GIL), has signed a contract for two new building anchor handling tug cum supply vessels (AHTSVs). The 80 T - AHTSVs ordered with Colombo Dockyard, are scheduled to be delivered during Q3 and Q4 of FY 2007-08.

This brings the total order-book of GIL to 5 OSVs: Four new building (2 PSVs and 2 AHTSVs) and 1 second hand PSV aggregating around $ 103 million.

According to reports, Sheth cousins of GE Shipping have now agreed to a fresh formula for the de-merger of Great Offshore (GOL), their offshore business, into a new company. It will not involve any cash transaction vis-a-vis the earlier plan of swapping equity stakes held by the cousins in the two companies with a premium, and an inevitable cash deal.

Earlier, the board of directors of Great Eastern Shipping had asked for an extension of time from the Bombay High Court for implementing the company's proposal to de-merge its offshore business into a separate entity. GE Shipping had decided against the spin off, citing the lapse of a six-month deadline. Oil and Natural Gas Commission proved to be the biggest stumbling block in GE Shpping’s demerger process, as it was initially recalcitrant to give approval to negotiating with a new entity on the ground that its contract was with GE Shipping. Although ONGC, after much delay, did give its conditional approval recently, there was not much time left with GE Shipping to wrap up the de-merger process within the stipulated deadline.

Meanwhile, the offshore market has firmed up significantly over the past few months. This prompted the company to step up investments in the business. It quickly acquired two second-hand platform supply vessels (PSVs) and ordered two new-building PSVs and a rig.

What also augurs well for GE Shipping’s shipping business is the firming up of spot shipping freight rates in the key tanker segment over the past few months. This will help GE Shipping, which has substantial presence in the tanker segment, fetch better realizations.

For Q1 June 2006, GE Shipping reported 22% fall in net profit to Rs 275.93 crore (Rs 353.42 crore). Sales declined 4% to Rs 552.88 crore

Stock Alert

2006-08-20T23:25:00.000-07:00

Acquisition of Lord Krishna Bank may lift Centurion Bank of Punjab
Centurion Bank of Punjab has decided to acquire privately held Lord Krishna Bank and the bank's board will meet shortly to fix the value of the deal, Centurion's managing director said on Saturday, 19 August. Centurion Bank has been hunting for smaller banks to increase its retail presence and grab a greater share of the rapidly growing financial services market.

"Growing by inorganic means is an important component our strategy and the proposed merger with Lord Krishna Bank would further improve our franchise and customer proposition across the country," Centurion's managing director Shailendra Bhandari said in a statement. Centurion Bank's board will meet on Sept. 4 to finalise the merger proposal.

Based in Kerala, Lord Krishna Bank commands a strong presence in the region with a network of 112 branches. If the deal goes through, it will be Centurion Bank's second acquisition in two years. Last year it acquired Bank of Punjab in an all share deal.

Centurion Bank has already obtained shareholders' approval to raise up to Rs 800 crore to fund proposed acquisitions. Post merger, the combined entity would have 361 branches across India.

High interest rates in government securities helped Lord Krishna Bank to turn profitable in the full year to March 31 2006. It posted a net profit of Rs 3.70 crore after a net loss of Rs 24.40 crore in 2004/05.

GMR Infrastructure makes its debut on BSE and NSE today. The company had priced its IPO at Rs 210. The scrip also enters the futures & options (F&O) segment on NSE. The lot size for GMR Infrastructure in the F&O segment is 1,000.

State Bank of India (SBI) said on Friday that its executive committee had approved raising up to Rs 5000 crore in debt in the year to March 2007. The funds would be raised in tranches with a minimum maturity of 60 months, the bank said.

Watch component maker, Kamla Dials & Devices said on Friday its board had approved an issue of rights shares in the ratio of two shares for every three held, at a price of Rs 22 per share.

HCL Technologies said on Saturday its net income rose 44% to Rs 233 crore for the fourth quarter ended June 30. Consolidated revenues rose to Rs 1254 crore from Rs 927 crore in the same quarter a year ago.

How will the market be today??

2006-08-20T21:22:00.000-07:00

Market may edge lower on subdued Asian markets
The market may remain weak today tracking subdued Asian markets and on firming up of oil price. The market is likely to consolidate in the near term after a solid rally over the last few days. Fund flushed mutual funds may support the bourses at declines.

From a low of 10,085.91 on 21 July, Sensex has risen 13.6% to current 11,465.72. Sustained FII inflow, a sharp fall in oil price due to truce in the Middle East, recovery in global markets following US Federal Reserve’s decision to keep US interest rates unchanged, upgrade in India’s rating by international rating agency Fitch and strong Q1 June 2006 results boosted the domestic bourses.

As per provisional data, FIIs bought shares worth a net Rs 87.62 crore on Friday 18 August, the day when Sensex had lost 12 points. The inflow of mutual funds for August 2006, till 17 August, reached Rs 309 crore. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Asian markets were subdued to weak on Monday (21 August). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.13% to 2.2%.

NYMEX crude for September delivery rose 31 cents to $71.45 a barrel as the Aug. 31 United Nations deadline for Iran to stop work on its nuclear fuel programme approached, renewing fears tensions in the oil-rich Middle East will affect world supply.

Indian equity valuations remain higher compared to its emerging market peers due to the premium attached to decent-to-strong earnings growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

Debt to equity ratio of India Inc down to 0.63

2006-08-20T20:19:00.000-07:00

Despite rising debt, which is normally seen as a worrying sign, Indian companies are in a comfortable situation even as overall debt to equity levels in corporate India have declined.

Amidst rising interest rates that raise concerns about profitability and future expansion, the debt-equity ratio for India Inc has come down from 0.68 in FY05 to 0.63 in FY06. Aggregate borrowings have gone up 18% to Rs 115,560 crore. The ratio, which was 0.9 in FY03, could remain comfortable despite companies accelerating their debt raising plans.

At first glance, the fall in gearing may seem puzzling since record borrowings to fund investment plans have seen debt levels rising. However, the answer lies in a sharp increase in net worth due to an increase in equity funding and raising money through IPOs.

For the 636 companies in the sample analysed, net worth has risen by 27%, to Rs 145,242 crore. Even if these companies were to raise Rs 10,400 crore more of debt, their leverage will be the same as in FY05. And, if one considers the text-book debt to equity ratio of 2:1, borrowing can actually go up by as much as Rs 268,000 crore.

Sectors which have seen maximum reduction are cement & cement products and metals. The upturn in the economy combined with a construction boom and substantial increase in realisation has helped companies in cement sector book record profits and increase internal accruals. For the sector, while equity has gone up by 28%, borrowing rose by only 1.3%, leading to the change in leverage. Among the companies, for India Cements, D/E ratio has fallen from 5.8 to 1.8, whereas for ACC, it is down from 0.95 to 0.55.

The metals business is another classic case of turnaround that was aided by global demand-supply change. Metal companies were in a serious crisis till FY03, with cash flows drying up and debt levels rising.

The companies have restructured debt using surpluses generated in the last 2-3 years and reduce interest costs. As a result, D/E has fallen from 1.68 in FY03 to 0.99 in FY05 and further to 0.83 in FY06. Total net worth for this sector has gone up by more than 40% in FY06 against increase of 18% in borrowing.

Among the companies, the ratio has fallen from 4.08 to 2.25 for Mukand, whereas for Jindal Saw, it has fallen from 1.5 to 1.2. Two sugar companies, Triveni Engg and Bajaj Hindustan, are other major companies for whom the ratio has come down from more than 2.0 to less than 1.0.

The only sector to see a marginal increase in the gearing is chemicals (excluding oil). Sector’s equity grew by 17% against 22% growth in borrowing. Textile industry is another sector to buck the trend, with constant ratio. For the sector, both debt and equity has risen by about 17.5%.

GBN files DRHP with Sebi; to raise Rs 105cr via IPO

2006-08-19T20:15:00.000-07:00

Global Broadcast News Ltd, a TV18 group company, on Friday said it has filed its red herring prospectus with the Securities and Exchange Board of India to enter the capital markets with its Initial Public Offer of shares.

GBN, which owns the news channel CNN-IBN, proposes to raise up to Rs 105 crore through an initial public offer of equity shares of Rs 10 each for cash at a premium, which would to be decided through 100 per cent book building process, a company statement said.

The retail portion of the IPO comprises of Rs 100 crores and the issue of equity shares aggregating up to Rs 5 crores is reserved for the employees.

Of the net offer to public, 60 per cent is reserved for allotment to Qualified Institutional Buyers on a proportionate basis, 5 per cent of which will be available for allotment to mutual funds.

Further, up to 10 per cent of the net offer to public is reserved for allotment to non-institutional investors and the balance of up to 30 per cent for allotment to retail investors, it said.

"The IPO is an important milestone in realizing our larger corporate vision. It would help strengthen GBN's position in the television news business and tap future growth opportunities," GBN Joint Managing Director Sameer Manchanda said.

The Book Running Lead Managers to the issue are ICICI Securities Ltd and Kotak Mahindra Capital Company Ltd. JM Morgan Stanley Limited and IL&FS Investsmart Limited are the Co- Book Running Lead Managers.

HCL Tech posts 44% rise in Q4 profits

2006-08-19T20:08:00.000-07:00

Backed by strong deals, Noida-based HCL Technologies today posted a 44 per cent increase in the fourth quarter consolidated net profit at Rs 233 crore on a year-on-year basis while revenues grew 35 per cent.

The Shiv-Nadar owned company’s revenue for the quarter ended June 2006 stood at Rs 1253.8 crore. The board has recommended a final dividend of Rs 4 per share (200 per cent per share with face value of Rs 2) for the year ended June 30, which takes the full-year dividend to 800%.

For the full-year, the company's net profit was up 27 per cent at Rs 773.9% while its revenue grew 30.5 per cent to Rs 4388 crore. HCL Technologies’ Scheme of Amalgamation for merging wholly owned sub-sidiaries DSL Software, Shipara Technologies, HCL Technologies BPO Serv-ices, HCL Technologies (Mumbai), Aquila Technologies and HCL Enterprise Solutions (India) Ltd with itself had been approved by the Delhi and Karnataka High Courts during the quarter ended December 31, 2005.

According to a release issued by the company to the BSE, HCL Technologies Ltd posted a net profit of Rs 136.45 crore for the quarter ended June 30, where as the same was at Rs 85.22 crore for the corresponding quarter in 2005. Total income stood at Rs 813.18 crore for the fourth quarter in 2006 where as the same was at Rs 424.09 crore in the year-ago period.

For the year ended June 30, the company reported a net profit of Rs 638.38 crore where as the same was at Rs 329.27 crore for the year ended June 30, 2005. The total income was Rs 3116.26 crore for the year ended June 30, where as the same was at Rs 1530.03 crore a year-ago.

The Week Ahead

2006-08-19T20:06:00.000-07:00

Fund flows, crude price hold key to trend
The market will move northwards if FIIs continue to have faith in the India. Some help from mutual funds and fund flows from insurance companies may drive up the market further. The market will also take cues from global and Asian markets. The major news that provided relief to the markets was the US Federal Reserve’s decision to hold interest rates steady at 5.25%. It is reckoned that the Reserve Bank of India (RBI) may not raise domestic interest rates, at least in the short term, following the Fed move.

Crude oil prices are currently hovering around $71 per barrel. The price declined by about $4 barrel this week, following a truce in the Middle East. A further fall in crude oil price will boost bourses.

There has been a sustained inflow by FIIs since late July 2006 as US interest rate fears eased after the US Federal Reserve, on 8 August, kept US interest rates unchanged at 5.25%. The net inflow of FIIs by the first half of August 2006, till 16 August, aggregated Rs 2,450 crore. They pumped in Rs 1,145 crore in July. It is expected that FII inflows in India could pick up further, following an upgrade of India’s rating by Fitch, an international rating agency.

The inflow of mutual funds for August 2006, till 17 August, reached Rs 309 crore. Mutual funds are sitting on a good amount of cash and may step up purchasing at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to the premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

The Week That Went

2006-08-19T20:04:00.000-07:00

Sensex garners 273 points
Firm Asian markets coupled with a fall in crude oil prices triggered an upswing in the market, the BSE Sensex collecting 273 points. The market recorded the fourth straight week of gains as several positive news came in during the past few weeks. The major news that provided relief to the markets was the US Federal Reserve’s decision to hold interest rates steady at 5.25%.

For the week ended Friday (18 August), the BSE Sensex added 273 points (2.4%), to close at 11,465.72. The S&P CNX Nifty gained 82.4 points (2.5%), to close at 3,356.75.

The BSE Sensex added 120 points on Monday, taking cue from firm Asian and European markets and receding global crude oil price. On Tuesday the market was closed on account of Independence Day. The Sensex advanced 135.32 points on Wednesday, on trigger from a rally in Asian markets due to easing concerns of inflation in the US, and a further fall in global crude oil price.

On Thursday, the BSE Sensex added 29.17 points on the back of sustained buying in blue chips. The benchmark index finished lower on Friday as profit-booking crept in, losing 12 points.

Crude oil price declined sharply by about $ 4 a barrel during the week following a truce in the Middle East that came into force from Monday (14 August).

FIIs invested to the tune of Rs 962.6 crore in two trading sessions, on Monday and Wednesday, while mutual funds bought Rs 59.53 crore in equities in the same interval.

Fall in crude oil prices boosted refiners. HPCL shot up 22.5% for the week to close at Rs 273, BPCL rose 22.6% for the week to close at Rs 374.6 and Indian Oil Corporation advanced 17% for the week to close at Rs 467.15. Refinery firms are incurring losses on marketing of petrol and diesel as a rise in oil price has kept pace with the surge in crude oil price. Their losses will be reduced by a recent fall in crude oil price, which has come down by about $4 a barrel.

The BSE Auto index rose 4.47% for the week, to close at 4,924 as global crude oil witnessed a fall in their prices. Tata Motors rose 7% for the week to close at Rs 849.95, Maruti gained 5.80% for the week to close at Rs 840.35, Bajaj Auto rose 2.2% for the week to close at Rs 2,710.20 and Hero Honda gained 1.29% to close at Rs 705.70.

The BSE Healthcare index, which includes pharma stocks, rose 173 points (5%) to close at 3,556.53. Reports came in on Friday that the government has agreed to a 10-year exemption from price control for any new drug molecule emerging out of indigenous research and development. MNC pharma stocks like Glaxosmithkline Pharma shot up 10.2% for the week to close at Rs 1,207.85, Pfizer gained 12% to close at Rs 800.35, Novartis advanced 12% to close at Rs 472. Ranabxy was up 3.55% to close at Rs 408, Dr Reddy's was up 3.7% to finish at Rs 1,495 and Cipla rose 3.4% to close at Rs 249.6.

Hindustan Zinc rose 2.24% for the week, to close at Rs 559.65 despite reports that it has cut zinc prices by Rs 8,200 per tonne.

Mahindra & Mahindra (M&M) rose 5.2% for the week, to close at Rs 645. The company plans to introduce another new vehicle after Ingenio's launch in 2008. It will set up its single biggest plant by FY 2010. This may have a capacity of up to 5 lakh units. M&M inked a memorandum of understanding (MOU) with the Maharashtra Government to set up a Rs 550 crore project code-named Ingenio. This plant will manufacture the company's new multi-purpose vehicle.

ONGC rose 1.3% to Rs 1,210.20. ONGC is looking for stakes in "many more" overseas oil assets in collaboration with Chinese firms, the company's chairman, R S Sharma, said on Monday. Sharma was speaking after announcing ONGC's success in bidding for a 50% share in Colombian oil firm, Omimex de Colombia, along with China's Sinopec.

Reliance Industries gained 4.3% for the week, to close at Rs 1,055.50. As per reports, RIL will open its first retail store in September 2006 in Hyderabad. Initially, Reliance will restrict itself to retailing food and vegetables.

Infosys rose 1.12% for the week to close at Rs 1,761.7 as substantial buying was witnessed in the stock.

Nifty 50 Quotes at End Of Day

2006-08-18T05:24:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3353.9	3356.75	0.08
ABB	2809.3	2832.2	0.82
ACC	889.7	903	1.49
BAJAJAUTO	2721.8	2706.75	-0.55
BHARTIARTL	414.6	409.65	-1.19
BHEL	2267.4	2283.3	0.7
BPCL	347.2	374.5	7.86
CIPLA	244.6	249.65	2.74
DABUR	141.5	141.4	-0.07
DRREDDY	1488.85	1495.7	0.46
GAIL	254.1	254.1	0
GLAXO	1133.5	1208.7	6.63
GRASIM	2209.8	2206.25	-0.16
GUJAMBCEM	108.1	110.05	1.8
HCLTECH	590.1	574.7	-2.61
HDFC	1294.5	1306.05	0.89
HDFCBANK	848.65	841.1	-0.89
HEROHONDA	693.65	706.2	1.81
HINDALC0	164.7	160.95	-2.28
HINDLEVER	234.9	237.95	1.3
HINDPETRO	254.4	273.75	7.78
ICICIBANK	591.5	588.35	-0.53
INFOSYSTCH	1757.6	1762	0.25
IPCL	288.7	286.9	-0.62
ITC	181.1	179.75	-0.75
JETAIRWAYS	562.6	575.05	2.21
LT	2395.35	2359.5	-1.5
M&M	644.8	644.85	0.01
MARUTI	819.75	840.65	2.55
MTNL	155.45	153.1	-1.51
NATIONALUM	200.9	199.1	-0.9
ONGC	1211.1	1210.25	-0.07
ORIENTBANK	180.1	176.35	-2.08
PNB	419.05	414.05	-1.19
RANBAXY	405.5	408.25	0.68
REL	462.7	455.9	-1.47
RELIANCE	1066.1	1055.9	-0.96
SAIL	76.15	76.9	0.98
SATYAMCOMP	793.25	793.4	0.02
SBIN	881.65	879.1	-0.29
SIEMENS	1053.35	1056.8	0.33
SUNPHARMA	859	866.1	0.83
SUZLON	1214.6	1194.1	-1.69
TATAMOTORS	837.5	849.95	1.49
TATAPOWER	516.55	524.7	1.58
TATASTEEL	518.65	513	-1.09
TATATEA	841.25	844.8	0.42
TCS	960.15	969.7	0.99
VSNL	394.9	402.85	2.01
WIPRO	511.25	512.2	0.19
ZEETELE	273.15	271.8	-0.49

Markets Today

2006-08-18T05:18:00.000-07:00

Sensex takes it easy before the weekend
Pre-weekend profit-taking after a recent sharp surge in share prices pulled the Sensex down a bit today. Although the market was volatile, its movement was spread over a narrow range. Till the first half of the trading session, the BSE Sensex moved in a range of just about 69 points, which rose to about 100 points later.

The Sensex lost 11.76 points, or 0.1%, to 11,465.72. It moved 99.06 points for the day, between a low of 11,409.11 and a high of 11,508.17. The S&P CNX Nifty rose 2.85 points (0.08%), to 3,356.75.

Crude oil price edged towards $ 71 a barrel level after Thursday’s sharp fall to $70 a barrel.The BSE clocked a turnover of Rs 3,216 crore compared to Thursday’s Rs 3,850 crore.Cheaper crude oil lifted refinery and auto shares. MNC pharma shares surged. Select cement shares rose on sustained buying. Metal shares declined on weak global metal prices.

The market-breadth was slightly positive. For 1,262 shares that rose on BSE, 1,217 declined. Just 64 shares were unchanged. Gainers outpaced losers by a ratio of 1.03:1.

The Sensex is currently hovering at a three-month high. The recent surge on the bourses materialised following a sharp fall in global crude oil price, thanks to a UN-brokered truce which took effect between Israel and Lebanese militant group, Hizbollah, on 14 August (Monday). Global markets surged as concerns about rising US interest rates eased after a tame inflation data, lifting the domestic bourses as well.

There has been a sustained inflow by FIIs since late July 2006 as US interest rates fears eased and after the US Federal Reserve, on 8 August, kept US interest rates unchanged at 5.25%. The net inflow of FIIs by the first half of August 2006, till 16 August, aggregated Rs 2,450 crore. They pumped in Rs 1,145 crore in July. It is expected that FII inflows in India could pick up further, following an upgrade of India’s rating by Fitch, an international rating agency.

The inflow of mutual funds for August 2006, till 17 August, reached Rs 309 crore. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of about 20, based on its trailing 12-month June 2006 earnings.

Refinery shares hogged the limelight in today’s trade. HPCL jumped 7% to Rs 272.30, BPCL gained 7.7% to Rs 374 and Indian Oil Corporation advanced nearly 3% to Rs 4,640. Refinery firms are incurring losses on sale of petrol and diesel as the hike in their price has not been in tune with the surge in crude oil prices. A decline in the price of crude, which has come down by about $4 a barrel this week, will curtail their losses.

Select auto shares were in demand on lower crude price. Car major Maruti Udyog gained 2% to Rs 837, Hero Honda rose 1.4% to Rs 702, and Mahindra & Mahindra gained 0.5% to Rs 648.Tata Motors gained 1.4% to Rs 849 on reports that the company may roll out a new truck on Renault platform and also on reports that it may come out with IPOs for its two subsidiaries, HV Axles and HV Transmission.

Metal shares dropped, tracking Thursday’s sharp fall in copper prices on the London Metal Exchange. Hindalco shed 2.3% to Rs 160.85, Sterlite Industries shed 3% to Rs 393.90, Hindustan Zinc lost 2.8% to Rs 561 and National Aluminium Company shed 1.2% to Rs 198.50. Steel major Tata Steel lost 1.2% to Rs 512. As many as 13.2 lakh shares changed hands in the counter on BSE.

MNC pharma shares hogged the limelight on reports that the government has agreed to a 10-year exemption from price control for any new drug molecule emerging out of indigenous research and development. Glaxosmithkline Pharma jumped 6.5% to Rs 1,206, Pfizer rose 7.5% to Rs 797, Novartis gained 7% to Rs 472, Aventis Pharma gained 7% to Rs 1,607, Merck rose 6% to Rs 552 and Wyeth gained 3.9% to Rs 591.95.

Abbott India jumped nearly 9% to Rs 548 after the company said its board will meet on 25 August to consider a proposal for buy-back.

IT bellwether Infosys gained 0.4% to Rs 1,766. The stock firmed up in late trading.

Reliance Industries lost 1% to Rs 1,053.80. As per reports, RIL will open its first retail store in September 2006 in Hyderabad. Initially, Reliance will restrict itself to retailing food and vegetables.

Select cement shares were in demand on sustained buying due to prospects of cement prices staying firm over the medium term. ACC gained 1.5% to Rs 903, Gujarat Ambuja Cements gained 1.9% to Rs 110, JK Lakshmi Cement jumped 6% to Rs 145.75, Mangalam Cement rose 3% to Rs 160 and JK Cement gained 1.7% to Rs 168.90.

State Bank of India (SBI) ended flat at Rs 879. SBI on Friday hiked interest rates on fixed deposits by between 25 to 50 basis points with effect from Saturday(19 August).

FMCG major Hindustan Lever gained 1.1% to Rs 237.65. A strong 7.3 lakh shares changed hands in the counter on BSE.

Hindustan Motors surged nearly 11% to Rs 38.60 on reports that the firm plans to sell about 314 acres (127.1 hectares) of excess land at its plant in West Bengal. The firm also plans to invest a "significant amount" to build up production capacity for auto components over three years.

Alembic Glass Industries jumped 10% to Rs 1,852.80 after Nirayu and Sierra Investments made an offer to buy 29.10% at a floor price of Rs 1,742.

Gateway Distriparks rose 2.7% to Rs 174.70 after the company said it had commissioned operations of a new warehouse at its Container Freight Station (CFS) near Jawahrala Nehru Port Trust (JNPT), increasing the container handling capacity of the CFS at JNPT to 216,000 TEUs per annum.

Hot News

2006-08-18T05:15:00.000-07:00

Ranbaxy Labs crawls up on new drug launch
Ranbaxy Laboratories rose 0.67% to Rs 407.30 on launching Soliten to treat urological disorders for the first time in India.As many as 3.41 lakh shares were traded on the BSE.The scrip witnessed a bout of volatility in the first quarter of FY 2007. It moved up from Rs 393.15 on 23 March to Rs 504.15 on 21 April on three overseas acquisitions. Here, the scrip dropped to Rs 470.55 on 27 April, only to rise to Rs 522 by 2 May. Thereafter, it tumbled in a weak market to Rs 342.15 by 8 June 2006. After finding support at this level, the stock rose to Rs 391.20 on 25 June as the market recovered from a bearish hold. Thereafter, the stock slipped to Rs 320.40 on 17 July 2006 only to rally to Rs 404.60 on 17 August on strong Q1 results and US FDA approvals to its generic entities.

At the current market price of Rs 407.30, Ranbaxy Laboratories trades at 38 times its Q2 June 2006 annualized EPS of Rs 10.7.

Ranbaxy Laboratories has launch its brand Soliten (Solifenacin) in India for managing chronic urological disorder. The product is being introduced for the first time in India. Soliten will be sold in dosage form of 5 mg and 10 mg tablets.

Ranbaxy Laboratories has plans to sell a manufacturing facility in Ireland in order to consolidate its Romanian operations. In June, Ranbaxy acquired Romania's Terapia S.A. for $ 324 million, to boost its presence in the fast-growing CIS markets.

Earlier this month, Ranbaxy Laboratories received tentative approval from the US Food and Drug Administration for risperidone oral solution, to treat schizophrenia, with total annual sales of $ 66 million. Further, the company had signed a deal in July with the Canada-based Janssen-Ortho to supply the generic version of risperidone tablets in the North American nation.

In early July, Ranbaxy Laboratories received approval from the US Food and Drug Administration to manufacture and market Cefprozil oral suspension USP, 125 mg/5ml and 250 mg/5ml. The total annual market sales for Cefprozil are estimated at $93 million.

Faced with tough pricing pressure in the US, Ranbaxy has turned to Europe. It purchased Romania's Terapia for $324 million earlier this year, followed by Belgium's Ethimed NV, GlaxoSmithKline's Italian and Spanish generic business, and the rights and assets of Senetek Plc's autoinjector device. Europe is the largest generics market in the world after the US.

In mid-July Nihon Pharmaceutical Industry (NPI), a joint venture of Ranbaxy Laboratories and Nippon Chemiphar, launched the generic versions of Clarithromycin as well as Terbinafine tablets in Japan. Clarithromycin is an anti-biotic and Terbinafine an anti-fungal with Japanese market sizes of around $400 million and $300 million respectively.In early June, Ranbaxy Laboratories struck a strategic partnership with US-based Invagen Pharmaceuticals to market Zonisamide capsules in the US.

Ranbaxy Laboratories registered a net profit growth of 31% to Rs 99.83 crore (Rs 76.49 crore) for Q2 June 2006. Net sales during the period increased to Rs 1,043.73 crore (Rs 952.78 crore).

Maruti Udyog steps on the accelerator
Maruti Udyog (MUL) advanced 1.80%, to Rs 834, extending the recent rally on sustained buying in the scrip.The counter moved in a range of Rs 839.80 and Rs 821.It has been steadily rallying in the past. It surged 15.25% from Rs 711.15 on 21 July to Rs 819.30 on 17 August 2006, on sustained buying interest. Also, the expectation of bumper sales in the festival season ahead, and consistent decline in global crude oil prices, triggered the rally in the stock.

Global crude oil prices slipped further in the US market, with the Nymex light crude oil for September delivery declining $ 1.83 to $ 70.06 a barrel. The London Brent crude slipped by $ 1.26 to $ 71.57 per barrel.

In August, MUL hiked prices of some models. The hike has been in the range of Rs 500 - 5,000. While the Maruti-800 (both standard & AC) and Alto (all variants) became costlier by Rs 500, the two variants of the new WagonR LPG became dearer by Rs 5,000.

MUL reported 10.1% growth in total sales to 44,653 units in July this year. The company sold 18,238 passenger vehicles in the domestic market, an increase of 40.4%. Its sales of commercial vehicles in the domestic market were 21,534, an increase of 54.3%, while light commercial vehicles sales were 9,395, a growth of 58%.

Recently, there were reports about Maruti Udyog (MUL) making an upward revision of 1 lakh cars for Japanese auto-giant Nissan motors at its upcoming facility at Manesar, Haryana. This means Maruti will hike the manufacturing capacity at the Manesar unit from the planned 1 lakh units per annum.

It may be recalled that earlier in July, the two Japanese auto majors - Nissan and Suzuki - announced a global production alliance, which will see Nissan supply mini vans to Suzuki on an OEM (original equipment manufacturer) basis starting 2006-end. The deal also included Suzuki’s commitment to supplying a mini vehicle to Nissan on an OEM basis.

Maruti is set to launch five new models in the next five years, including a new diesel-engine vehicle later this year that could help boost its sales volume in this growing segment, where it has no presence now. Diesel cars today account for 20% of overall volume.

MUL also approved the merger of its subsidiary, Maruti Suzuki Automobile India (MSAIL), with itself. Maruti held 70% in MSAIL, with the remained owned by Suzuki Motor. According to an agreement in September 2004, MSAIL was set up as a subsidiary to operate a new car plant in Manesar, Haryana, which will initially have a capacity of 1,00,000 cars per year. Capacity will be scaled up to 2,50,000 cars per annum by 2008/09. The plant will begin production by the end of 2006 and is being set up at an investment of Rs 1,524.20 crore.

Maruti Udyog posted a net profit growth of 63.19% to Rs 369.57 crore for Q1 June 2006 as compared to Rs 226.46 crore for Q1 June 2005. Total income during the period has increased from Rs 2,723.67 crore to Rs 3,268.77 crore.

Hot News

2006-08-18T05:11:00.000-07:00

Tata Motors firm on subsidiaries IPO proposal
Tata Motors rose 2.10%, to Rs 855 following plans to launch initial public offerings (IPOs) for two of its subsidiaries.Tata Motors plans to float IPOs for HV Axels and HV Transmissions .As many as 3.01 lakh shares changed hands in the counter on BSE.
The stock staged a smart comeback on sustained buying interest after retreating to a low of Rs 658.05 on 19 July from a high of Rs 800.65 on 05 July. From Rs 658.05 on 19 July, it recovered to Rs 837.30 by 17 August.

Reports added that the company could come out with IPOs by the end of the financial year. They also pointed out that the IPOs might generate around Rs 400 crore if the Tata company went for a 30% dilution of stake.

The key subsidiaries of Tata Motors include Tata Construction in which it holds 60% stake, Tata Technologies (95% stake) and Tata Daewoo (100% stake). Tata Motors has 30 subsidiaries in all.

In FY06, HV Transmission posted net profit of Rs 30.1 crore (Rs 27 crore in FY05) over revenue of Rs 127.6 crore (Rs 126.6 crore).During the last financial year, HV Axels has recorded a net profit of Rs 46.3 crore (Rs 42.7 crore) over revenue of Rs 143.9 crore (Rs 145.8 crore).Tata Motors latest paid-up equity share capital stands at Rs 38.28 crore. Total foreign holding in the company is 39.23% (as on 30 June 2006).

Tata Motors vehicle sales rose 44.5% in July to 45,056 units from 31,173 units a year earlier. Sales of commercial vehicles (CV) rose 54% to 21,534 units from 13,957 units, while sales of cars and utility vehicles rose 40% to 18,238 units. Exports rose 25% to 5,284 units from 4,220 units.

For Q1 June 2006, Tata Motors reported 40% growth in net profit to Rs 381.85 crore (Rs 272.67 crore). Net sales increased 48% to Rs 5,783.41 crore (Rs 3,907.50).

Abbott India upbeat on share buy-back proposal
Abbott India spurted 6.16%, to Rs 534 after it scheduled a board meet for 25 August 2006, to consider a proposal to buyback equity shares of the company.The counter clocked high volumes of 59,273 shares on BSE as compared to a two-week average volume of 10,543 shares.The stock witnessed a sharp spurt in the past few days. From Rs 415.30 by 01 August 2006, it jumped to Rs 514.65 by 14 August 2006, as buying continued. Here, it witnessed profit-booking, only to slide to Rs 503 by 17 August 2006.

Abbott India is an MNC associate pharma company and has a latest paid-up equity share capital of Rs 15.28 crore, of which parent company Abbott Laboratories Inc holds 61.70% stake through Lupharma. Total public holding in the company is 22.99%.

Abbott India derives most of its revenues from insulin and related products. Apart from diabetes care, Abbott also focuses on niche therapeutic segments, in CNS products, gastroenterology and pain management. The company’s pharma products like Brufen, and Digene are leaders in their respective segments in the domestic market.

Abbott India registered a decline in net profit to Rs 13.59 crore for Q2 May 2006 compared with Rs 15.04 crore in Q2 May 2005. Total income during the same period under consideration increased from Rs 117.26 crore to Rs 134.68 crore.

The company's net profit declined 42.14% to Rs 59.16 crore for the year ended 30 November 2005 compared to Rs 102.25 crore for the year ended 30 November 2004. Total income slipped marginally by 0.66% to Rs 459.53 crore (Rs 462.61 crore).

Charts watch: Correction ahead

2006-08-17T22:28:00.000-07:00

Following a steady rise in the benchmarks since the start of this month, the open interest in Nifty put options has risen over the past few sessions, while that of Nifty call options has dropped. This has resulted in a steady upward movement in put call ratio (PCR), a popular sentiment indicator. Analysts said the PCR trend over the past few sessions pointed to expectations of a correction in the short term.

Nifty PCR ratio has risen to over 1.5, from 0.97 at the start of the month, while the Nifty cash has gained 7% during the said period. PCR is the number of put options divided by the number of call options. A rise in put call ratio means there are more outstanding puts options than calls.

Usually, PCR is used as a contrarian indicator when the ratio reaches extreme levels. This means a sharp rise in PCR is seen as an oversold level, while a sharp dip is perceived as an over-bought situation, indicating that there could be a reversal.

Though there is no benchmark for extreme levels of PCR, analysts look at the sharp spikes and fall in this ratio as an indicator.

“Though open interest in puts has risen much faster than calls since August 1, in the past 3-4 sessions the rise in PCR has been more on account of the squaring of call options than rise in puts. This trend suggests that investors are not expecting much upside in the near term and possibly a correction,” said Alex Mathews, head of derivatives research, Geojit Financial Services.

Open interest in Nifty put options has surged to roughly 1.3 crore, from 55 lakh on August 1, and 1.18 crore on August 14. Open interest in Nifty calls is up, to 85 lakh from 58 lakh on August 1, but has fallen from nearly 87 lakh on August 14, analysts said.

“When the market is rising, all call writers are rushing to minimise losses, while call buyers are booking profits, leading to a fall in PCR,” reasons Utpal Choudhury, derivatives analyst, IDBI Capital Market Services.

In the current scenario, analysts are looking at a PCR of 1 as a benchmark to determine the sentiment. The Nifty PCR touched the year’s high of 2.31 during the end of February and a low of around 0.45-0.5 in June, analysts added.

Aptech to raise Rs 54 crore via preferential issue

2006-08-17T22:27:00.000-07:00

IT training company Aptech on Thursday said that it will raise up to Rs 53.8 crore through allotment of 47,62,500 warrants on preferential basis to investors.

According to a notice to the Bombay Stock Exchange (BSE), “The board of directors at its meeting on Wednesday approved to allot 20 lakh warrants to Rekha Jhunjhunwala, 11 lakh warrants to Gopikishan S Damani and 7 lakh warrants to Rakesh Jhunjhunwala.”

Aptech would also allot 6.5 lakh warrants to ASK Investment and Financial Consultants, 2.5 lakh warrants to Vijay Agarwal, 50,000 warrants to C Y Pal and 12,500 warrants to Ramesh S Damani, it added. “Each warrant will be convertible in the next 18 months, into one fully paid up equity share of Rs 10 each at an exercise price (including premium) not higher than Rs 113/warrant.

It has been decided that, upon the approval of shareholders, an amount of Rs 13 per warrant will be paid by the allottees on the date of allotment of the warrants. The balance of Rs 100 per warrant will be payable by the allottees at the time of the conversion of warrants into equity shares,” the release said.

The company has also decided to formulate a new employee stock option scheme (ESOP) of up to 15 lakh equity shares. An EGM of the company would be held on September 16 to consider the issue of convertible warrants and ESOP. The shares of the company closed at Rs 121.4 on Thursday.

Tata Motors to float IPOs for 2 arms

2006-08-17T22:26:00.000-07:00

Tata Motors, India’s largest commercial vehicle maker, is learnt to be working on an initial public offering (IPO) for two of its group companies -HV Axles and HV Transmissions - as part of a larger corporate restructuring programme and to also tap alternate options of raising resources to part-finance expansion plans.

According to sources, senior company officials have already begun the process by meeting with investment bankers. The IPOs for the two wholly-owned subsidiaries of Tata Motors are likely to be scheduled by the end of the current fiscal year.

It has been learnt that Tata Motors is also considering strategic partners for both the companies and may look at selling part of its stake in HV Axles and HV Transmissions, before the proposed IPO.The sources indicated that Tata Motors was in talks with major global companies such as Automotive Axles and Arvin Meritor for a strategic alliance.

In a recent interaction with ET on the sidelines of a conference, Tata Motors MD Ravi Kant had said that his company was examining all options “that could enhance the contribution from our subsidiaries.” He declined to elaborate. When contacted, a spokesperson said: “Tata Motors is open to considering options of strategic partners or IPOs for these two subsidiaries to unlock value in these companies. But, the company has not set any time-frame.”

The stake sale is expected to help the company in price discovery and also extend the two companies’ clientele. Both HV Axles and HV Transmissions were spun off Tata Motors’ commercial business unit in ’00. The two companies supply components only to their parent company Tata Motors.

According to analysts, based on FY08 earnings and a price earning multiple of 12, the total value of Tata Motors’ stake in HV Axles and HV Transmissions could be in the region of Rs 773 crore and Rs 453 crore, respectively.

In a recent report, Motilal Oswal Securities said Tata Motors would benefit from the significant value creation in its subsidiaries. “We value its subsidiaries at Rs 181 per share (applied 20% discount to actual valuation). We value the core business at 15.5 times forward earnings,” the brokerage had said after Tata Motors posted its fiscal first quarter results.The sources said that Tata Motors is likely to use the stake sale and IPO funds for its capex plans.

The company is planning an expenditure of Rs 10,000 crore in the next 2-3 years of which Rs 2,000 crore will go toward its expansion, while the remaining Rs 8,000 crore would be allotted for daily operations and development of new products.

The move is likely to be welcomed by the market. “There is an increasing trend among major corporates to explore ways of raising funds to meet their capex plans, especially as interest rates are going up,” said SP Jain, chairman of Mumbai-based brokerage Networth Stockbroking. “Any kind of value unlocking where the market participates, the parent company will automatically benefit.”

The market has already been reacting to a possible IPO news from Tata Motors. Shares of Tata Motors have been rising steadily in the past one month, surging 22% to end at Rs 837 a share on the Bombay Stock Exchange on Thursday.
Both the companies have posted improved earnings. HV Axles reported a 57% growth in its revenue in the first quarter of the current fiscal at Rs 42.4 crore, while net profit surged 84% to Rs 14.3 crore. HV Transmission ended the first quarter with a 43% growth in revenue at Rs 37.4 crore, and a 78% increase in its profit at Rs 9.7 crore.

HV Axles and HV Transmissions were formed in March ’00 and they acquired Tata Motors’ heavy axle division and gear box division at Jamshedpur, respectively. HVAL has an equity capital of Rs 45 crore while HVTL was started with an equity capital of Rs 40 crore.

Stock Alert

2006-08-17T22:15:00.000-07:00

Pharma scrips may drop as firms accept margin cap for unbranded generics
Pharma scrips may drop on reports the prices of most drugs will fall by 50%-60% after the pharma industry on Thursday agreed to cap the trade margin on unbranded generics drugs from 2 October 2006. This promises to resolve the contentious issues in the government’s forthcoming pharma policy.

The margins will be capped at 35% for retail and 15% for wholesale trade in these drugs which account for 5% to 7% of the Rs 35,000 crore domestic pharma market. The government on its part has agreed to a 10-year exemption from price control for any new drug molecule emerging out of indigenous research and development.

Supreme Petrochem has reported a sharp fall in net profit for Q4 June 2006 to Rs 3.75 crore (Rs 6.97 crore). Net sales has risen 8.9% to Rs 350.60 crore (Rs 321.86 crore).

Gitanjali Gems said on Thursday it has increased its shareholding in Gili India to 65% from 40%. Gili India owns a retail jewellery brand.

SAAG RR Infra has bagged an order worth Rs 6.25 crore from Bharat Earth Movers (BEML). The order is for construction of a new Hanger adjacent to Rear Traverser at Bharat Earth Movers in Bangalore, which is to be completed within 6 months.

As a major restructuring exercise in its shipping and logistics business, the Essar Group on Thursday announced that Essar Shipping will be brought under Group’s new fully owned subsidiary, Essar Shipping & Logistics (ESLL) registered in Cyprus. The new subsidiary will own 77% of Essar Shipping.

Auto parts maker Pricol plans to restructure its operations into two independent divisions to battle rising input cost and competition.

KSB Pumps has launched an openwell submersible pumpset – Monosub R. The new product will be available from September through the company’s distribution chain. The pump comes in 13 models with power varying between 0.5 HP and 10 HP. The product price ranges between Rs 5500 to Rs 20000 depending on the power required.

How will the market be today??

2006-08-17T21:05:00.000-07:00

Market may remain steady to firm
Sustained FII inflow, mostly firm Asian markets and cheaper crude oil price may continue to support domestic bourses. However, profit taking may set in at higher ahead of the week-end.

The key trigger for the rebound in local and global markets this week has been a sharp fall in global crude oil price. Though crude oil recovered some ground in early Asian trade on Friday (18 August) on renewed worries about Iran's nuclear programme after falling to $70 overnight, it remained almost $4 down on the week on fading supply worries. Crude was hovering at $ 70.46 a barrel.

Strong FII inflow too has boosted bourses. As per provisional data, FIIs bought shares worth a net Rs 442 crore on Thursday 17 August, the day when Sensex had risen 29 points. Sustained FII inflow has been witnessed since late July 2006 on a view that the US Fed might have finished with its two-year run of credit tightening.

Mutual funds bought shares worth a net Rs 27 crore on 16 August, the day when Sensex had jumped 135 points. The inflow of mutual funds by the first half of August 2006 totaled Rs 333 crore. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Asian share markets were mostly higher on Friday (18 August). Key benchmark indices in Japan, South Korea, Taiwan and Singapore were up by between 0.05% to 0.43%.

Indian equity valuations remain higher compared to its emerging market peers due to premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of nearly 20, based on its trailing 12-month June 2006 earnings.

Nifty 50 Quotes at End Of Day

2006-08-17T05:11:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3356.05	3353.9	-0.06
ABB	2784.4	2809.3	0.89
ACC	886.25	889.7	0.39
BAJAJAUTO	2741.85	2721.8	-0.73
BHARTIARTL	413.7	414.6	0.22
BHEL	2244.4	2267.4	1.02
BPCL	347.05	347.2	0.04
CIPLA	246.25	244.6	-0.67
DABUR	139.65	141.5	1.32
DRREDDY	1453.7	1488.85	2.42
GAIL	259.6	254.1	-2.12
GLAXO	1159.45	1133.5	-2.24
GRASIM	2209.4	2209.8	0.02
GUJAMBCEM	108.8	108.1	-0.64
HCLTECH	581.7	590.1	1.44
HDFC	1285.7	1294.5	0.68
HDFCBANK	846.15	848.65	0.3
HEROHONDA	705.15	693.65	-1.63
HINDALC0	169.05	164.7	-2.57
HINDLEVER	230.5	234.9	1.91
HINDPETRO	260.8	254.4	-2.45
ICICIBANK	590.7	591.5	0.14
INFOSYSTCH	1752.3	1757.6	0.3
IPCL	277.05	288.7	4.21
ITC	180.9	181.1	0.11
JETAIRWAYS	564.3	562.6	-0.3
LT	2381.6	2395.35	0.58
M&M	634.6	644.8	1.61
MARUTI	814.95	819.75	0.59
MTNL	154.05	155.45	0.91
NATIONALUM	202.35	200.9	-0.72
ONGC	1241.9	1211.1	-2.48
ORIENTBANK	184.25	180.1	-2.25
PNB	428.05	419.05	-2.1
RANBAXY	403.3	405.5	0.55
REL	479.25	462.7	-3.45
RELIANCE	1046.5	1066.1	1.87
SAIL	77.9	76.15	-2.25
SATYAMCOMP	785.85	793.25	0.94
SBIN	888.5	881.65	-0.77
SIEMENS	1008.95	1053.35	4.4
SUNPHARMA	850.35	859	1.02
SUZLON	1193	1214.6	1.81
TATAMOTORS	817.55	837.5	2.44
TATAPOWER	505.15	516.55	2.26
TATASTEEL	532.45	518.65	-2.59
TATATEA	856.35	841.25	-1.76
TCS	972.2	960.15	-1.24
VSNL	390.75	394.9	1.06
WIPRO	514.7	511.25	-0.67
ZEETELE	274.1	273.15	-0.35

Markets Today

2006-08-17T05:09:00.000-07:00

Market remains impregnable for seventh straight session
The benchmark index continued its upward journey for the seventh straight day on the back of sustained buying in blue-chips. The BSE Sensex advanced 664.36 points (6.14%) during this period, from the close of 10,812.64 on 07 August 2006.

However the overall market-breath was negative as a host of small-cap and mid-cap stocks sunk into the red due to heavy selling.The BSE 30-shares Sensex rose 29.17 points (0.25%), to finish on 11,477.48 for today.The benchmark index opened higher at 11,498.47 and surged to 11,551.59 on strong purchases. An overall buoyancy in the international markets helped domestic bourses to a high in initial trading. It had sunk to a low of 11,379.44.

The BSE Sensex witnessed a swing of 173 odd points, amid high volatility.The NSE Nifty lost 5.15 points (0.15%), to finish on 3,350.90.

The market-breadth, which was firm in the opening session, stayed weak, as a host of stocks from the small-cap and mid-cap basket declined on profit-booking. While 871 shares advanced, only 1,603 declined. As many as 65 scrips have remained unchanged by now. The market-breadth was strong for the past couple of sessions.

The BSE Mid-Cap index slipped 0.87% while the BSE Small-Cap index lost 1.29%. Major losers included Tilaknagar Industries (down 11.43% to Rs 37.20), Shriram Overseas (down 10.96% to Rs 51.60), Eldeco Housing (down 10% to Rs 178.85), Tantia Constructions (down 8% to Rs 129.50), Geodesic Information Systems (down 8.62% to Rs 153.20), Atul (down 6.60% to Rs 107) and EID Parry (down 6.85% to Rs 181.90).

The total turnover on BSE amounted to Rs 3,835 crore, higher than Wednesday’s Rs 3,455 crore.Among the Sensex pack, 15 advanced while the other 15 slipped.

Reliance Communication was the biggest gainer, up 4.55% to Rs 297.85 on a high volume of 42.89 lakh shares. The stock moved in a range of Rs 289 – 281.20.

Index heavyweight RIL surged 1.63% to Rs 1,062 on 22.80 lakh shares. The stock, quiet till noon, picked up momentum in the later half of the session. It moved in a range of Rs 1,073.50 - 1,038.

Dr Reddy’s (up 2.70% to Rs 1,490), HLL (up 2.20% to Rs 235.50) and Tata Motors (up 3% to Rs 841) were the other gainers.

REL (down 3.55% to Rs 462), Hindalco (down 2.72% to Rs 164.40), ONGC (down 2.20% to Rs 1212) and Tata Steel (down 2.95% to Rs 517.50) constituted the top losers.

Infrastructure Development Finance Company (IDFC) was the top traded counter on BSE with a total turnover of Rs 256.14 crore. It rose 2.72% to Rs 58.60 on the back of three bulk deals of 1.4 crore shares each, of which two were struck at Rs 60 per share, while one was executed at Rs 57.90 per share, which was executed in opening trade. RIL contributed Rs 241.80 crore and Mahindra Gesco added Rs 228.68 crore to the day's turnover so far.

Metal stocks came under selling pressure; the BSE Metal index was the biggest loser among sectoral indices and slipped 177.88 points (2.12%) to 8,199.62, under heavy selling pressure. Tata Steel (down 2.95% to Rs 517.50), SAIL (down 2.06% to Rs 76.15), Essar Steel (down 3.20% to Rs 34.90), Tata Sponge (down 2.86% to Rs 108.80) and Hindustan Copper (down 2.6% to Rs 96.35) were some of the major losers.

Sugar counters continued to witness profit-booking as product prices softened globally. Shares of KM Sugar (down 6.05% to Rs 49), Sakthi Sugars (down 5.80% to Rs 140), Oudh Sugar (down 5% to Rs 119.65), Dwarikesh Sugar (down 4.40% to Rs 122.50), Bannari Amman Sugars (down 3.85% to Rs 975), Uttam Sugar (down 6.05% to Rs 179.50) and Bajaj Hindusthan (down 3.25% to Rs 335.20) declined.

Among side-counters, Shree Precoated Steels surged 9.30%, to Rs 175.85 on a high volume of 6.81 lakh shares following plans to raise Rs 1,163 crore by issuing securities.

Jagran Prakashan rose 2.65%, to Rs 307 on news that Ireland's Independent News & Media had approached Sebi to raise its stake in the Indian firm by up to 3%.

Savita Chemicals rose to its maximum daily limit of 10%, to Rs 509.55 for the second session, in the run up to a board meeting scheduled for 21 August 2006 to consider a bonus issue.

Mahindra & Mahindra (M&M) rose 1.50% to Rs 644 on 2.43 lakh shares. The company plans to introduce another new vehicle after Ingenio's launch in 2008. It will set up its single biggest plant by FY 2010. This may have a capacity of up to 5 lakh units. M&M inked a memorandum of understanding (MOU) with the Maharashtra Government to set up a Rs 550 crore project code-named Ingenio. This plant will manufacture the company's new multi-purpose vehicle.

Spanco Telesystems & Solutions surged 4%, to Rs 133 on plans to enter into a joint venture in Oman. The company may rope in a partner for its network system integration ad IT solutions businesses in Oman.

Hindustan Zinc plunged 4.20% to Rs 576.50 on 7.54 lakh shares following reports that it has cut zinc prices by Rs 8,200 per tonne.

Japan’s Nikkei 225 Index slipped 50.52 points (0.31%), to 16,020.84 while Hong Kong’s Hang Seng index lost 77.98 points (0.45%), to 17,373.05.US indices rallied for the second consecutive session on Wednesday on optimism that the US Federal Reserve may keep interest rates unchanged in the near-term due to benign inflation numbers. The Dow Jones soared 97 points, to 11,327, the Nasdaq composite advanced 35 points, to settle at 2,150.Crude oil prices in the US market eased as the Nymex light crude oil for September delivery declined $ 1.16 to $ 71.89 a barrel.

On 14 August 2006, FIIs were net buyers of stocks to the tune of Rs 10.60 crore (gross purchases worth Rs 910.20 crore and gross sales of Rs 899.60 crore) while domestic mutual funds were net buyers of stocks to the tune of Rs 32.49 crore (gross purchases worth Rs 313.05 crore and gross sales of Rs 280.56 crore).

Hot News

2006-08-17T05:08:00.000-07:00

RIL continues to recover
Reliance Industries rose nearly 2% to Rs 1,065, extending its rise that began earlier this month.A strong 15 lakh shares changed hands in the counter on BSE.The oil refining and petrochemicals behemoth has nearly 11% weightage in the BSE Sensex, its rise helping the benchmark index's upmove. The barometer index was up 29 points, on 11,478.From a recent low of Rs 955 on 7 August, RIL has gained 11.5% to current Rs 1,065.

The recovery in the stock is partly due to a cooling of crude oil prices. RIL has been incurring losses on domestic sales of petrol and diesel as the rise in domestic prices have not been in tandem with a surge in global crude oil prices. Earlier, the stock came under selling pressure at the beginning of the month after the government rejected RIL demand for compensation to make up for the losses it suffered on petrol and diesel sales. From Rs 989.90 on 2 August 2006, the stock had slipped to a low of Rs 955 on 7 August.

The fall in oil price will help RIL to reduce its losses on marketing of petrol and diesel. Currently, RIL loses about Rs 4 a litre on petrol and Rs 6 a litre on diesel despite pricing the two about Rs 2.50 a litre higher than state-owned oil marketing companies (OMCs). RIL has more than 1,250 outlets, of which it owns and operates about 400. The rest are owned and operated by dealers.

Crude oil was down 51 cents a barrel at $71.38 in Asian trading on Thursday after touching its lowest since June 26 at $71.33. Oil price began plummetting on Monday (14 August) after a UN-brokered truce in the Middle East took effect.

RIL had increased diesel margins for its dealers and offered to take steps to bear some of the interest on their loans.

Meanwhile, RIL has submitted a Rs 288 crore bid to revive an ailing shopping cooperative Super Bazar. RIL’s bid for the cooperative, Super Bazar, which has several shops in and around Delhi, was well above a Rs 70 crore bid from Indian Labour Co-operative Society along with Indian Potash. Reliance already runs Sahakari Bhandar chain of retail outlets in Mumbai.

Reliance plans to invest over Rs 25,000 crore (or $5.6 bn) in retail, selling everything from food to clothes to travel services in convenience stores and supermarkets around the country.

Meanwhile, with regard to its polymers business, RIL plans to introduce three fibres in the next 15 months. These fibres will be specially developed for the Indian market by its Patalganga-based research centre. The new fibre range will include an anti-bacterial fibre, a fire retardant fibre and one with high hygroscopic capacity. RIL has already begun commercial trials for these products.

RIL reported 10% growth in net profit for Q1 June 2006 to Rs 2,547 crore, on 38% growth in sales to Rs 24,522 crore.

Siemens powers ahead
MNC infrastructure and industrial solutions major Siemens jumped 4.4%, to Rs 1,055 on continued buying.As many as 3.6 lakh shares changed hands in the counter on BSE.The stock witnessed a sustained rise since late July in a broad market recovery. From a low of Rs 822 on 24 July, it has gained 28%. Strong Q3 June 2006 results and a healthy order-book supported the scrip.

The current price of Rs 1,055 discounts its trailing 12-month June 2006 EPS of Rs 18.90, by a PE multiple of 55.8.

The company is sitting on a large order-book and continues to enjoy a strong order flow. Its unexecuted order-book, as on 30 June 2006, was Rs 7,722 crore.Siemens is largely insulated from volatility in price of inputs due to price variation clause as far as orders from domestic power utilities are concerned.

Infrastructure led growth for Siemens is expected to continue with power sector reforms and industrial demand for automations and machinery. The power generation, power transmission & distribution, automation and drives are expected to be the principle drivers for Siemens in the near term, analysts reckon.

Siemens, which picked up 50% stake in Flender, a manufacturer of industrial gear boxes, couplings has decided to acquire the remaining 50% stake after 1 October 2006 from Flender AG, a subsidiary of Siemens AG Germany, for up to Rs 72.50 crore. Moreover, the company has also decided to acquire an additional 23% stake in Siemens Industrial Turbomachinery Services (SITS) from Pimac Engineers for up to Rs 5.60 crore. Earlier in April 2005, Siemens acquired 51% stake in SITS, which is engaged in the overhauling, maintenance and servicing of gas turbines in Bangalore.

For Q3 June 2006, Siemens registered 43% growth in net profit to Rs 56.52 crore, on 76% growth in sales to Rs 1,052.27 crore.As on 31 March 2006, FII holding in Siemens was 12.33% and mutual funds held 8.53%. The combined holding of banks, financial institutions and insurance firms aggregated 5.38%.

Hot News

2006-08-17T04:58:00.000-07:00

Price cut hurts Hindustan Zinc
Hindustan Zinc dropped 2.2%, to Rs 588.85 on reports that it has cut zinc prices by Rs 8,200 per tonne.As many as 2.9 lakh shares changed hands in the counter on BSE.The stock had surged 5% to Rs 601.55 on Wednesday (16 August), and on a high volume of 14.5 lakh shares on BSE.

The company has been frequently changing domestic zinc prices on cue from the trend in prices on the London Metal Exchange (LME).The company revised prices six times last month. In late July, it had cut zinc prices by about 5% across all categories. Even after the recent price cuts, the zinc prices are higher on year-on-year basis. Firm zinc prices have boosted the company's financial performance.

Hindustan Zinc (HZL) has the advantage in terms of captive sources of ore. HZL is the country's only integrated producer of zinc and among the world's leading integrated producers with a domestic market share of approximately 70%.Its zinc capacity is currently 4,00,000 tonne per annum with smelter operations situated in Chanderiya, Debari and Visakhapatnam.

Middle East truce, strong sales support Tata Motors' upmove
Tata Motors rose 2%, to Rs 833 on sustained buying.As many as 4.2 lakh shares changed hands in the counter on BSE.The stock has sustained its rally since late July 2006, when the market began to recover. From a low of Rs 658.05 on 19 July, it surged 24% to Rs 816.65 by 16 August.The recent upsurge in the counter was on the back of easing concerns pertaining to oil price, which started falling on 14 August after a UN brokered truce took effect in the Middle East. Continued strong sales growth has also aided the recovery in the scrip.

The current price of Rs 833 discounts its Q1 June 2006 annualised EPS of Rs 42.70, by a PE multiple of 19.5.

Tata Motors reported total sales of 45,056 vehicles (including exports) for July, a growth of 44.5% over 31,173 vehicles sold in July last year. Cumulative sales for the company is at 1,71,210, a growth of 44.3%. The Supreme Court ban, early this year, on overloading of trucks has led to an impressive growth in demand for commercial vehicles over the past few months and continues to benefit Tata Motors.

Tata Motors increased product prices of commercial vehicles by 2-3% in June 06 and by around 1% for utility vehicles (UVs), to protect margins when input costs are rising.

Meanwhile, Tata Motors is reportedly sprucing up its retail network in its passenger car business unit (PCBU). The company plans to have 600 showrooms by 2008 from the existing 140. With the company's Rs 1 lakh car to hit the roads soon, and the growing demand for its utility vehicles in smaller markets, the company plans to strengthen its retail presence, especially in the smaller markets.

Recently, Tata Motors and Fiat India made a commitment to invest Rs 2,000 crore in Ranjangaon, Pune, to produce Fiat’s Grande Punto. The duo plan to initially produce nearly 1 lakh cars a year and about 2.5 lakh diesel engines and accessories from Fiat India’s Ranjangaon facility. The plant has been shut for the last six years. The Fiat Grande Punto is expected to roll out in December 2007 or early 2008.

Tata Motors plans to raise Rs 3,000 crore from the international or domestic market through the issue of foreign currency convertible bonds (FCCBs), equity shares or other securities. The annual general meeting (AGM) of the Tata Group company held recently accorded authority to the board to raise the funds through an issue of FCCBs, shares, debentures or other securities to domestic or foreign institutions, non-resident Indians, corporate bodies, mutual funds or banks. A borrowing limit of Rs 7,500 crore was also approved by the shareholders at the meeting.

For Q1 June 2006, Tata Motors reported 40% growth in net profit to Rs 381.85 crore, on 48% growth in sales to Rs 5,783.41 crore.

Stock Alert

2006-08-16T21:32:00.000-07:00

GAIL (India) may see action on unveiling estimated gas reserves in Myanmar blocks
GAIL (India) on Wednesday announced that it has estimated reserves of 5.7 trillion cubic feet (TCF) to 10 TCS of natural gas in the three Myanmar discovered gas fields of Shwe and Shwe Phyu in Block A-1, and Mya filed in Block A-3. The total estimated gas initially in place has been certified by Gaffney Cline and Associates. GAIL along with consortium partners, Daewoo International Corporation, ONGC Videsh and KOGAS are carrying out exploration activities in Block A-1 and A-3 in Myanmar.

Jupiter Bioscience has acquired a manufacturing facility from Aurobindo Pharma in Medak district, Andhra Pradesh. The company said the acquisition of the facility was a part of its expansion programme for commercialization of speciality APIs, Chiral Intermediates and key organic intermediates and bulk Peptide raw materials.

The board of directors of Spanco Telesystems & Solutions will meet on 17 August 2006 to consider a proposal for entering into a Joint Venture in Oman for its Network System Integration and IT Solutions business. The board will also consider a proposal to set up/acquire BPO/call centers in Middle East and China. Further, the board will also consider proposal for acquisition/strategic stake in a company in India, engaged in the business of IT solutions.

Steel wire maker Ramsarup Industries on Wednesday unveiled an expansion plan for the current fiscal year to March 2007 at a cost of Rs 130 crore. Ramsarup said in a statement it would spend Rs 65 crore of its planned investment to expand wire capacity by 60,000 metres per year, the company said in a statement. The wire expansion would add Rs 250 crore and Rs 25 crore in profits, the company said.

The newly started transmission lines business was expected to bring in Rs 200 crore in total business in 2006/07 and post profits of Rs 20 crore. "With our expansion plans, we are perfectly placed to leverage the opportunities (in India)," Chairman and Managing Director Ashish Jhunjhunwala said.

The board of directors of Kinetic Motor Company, has passed resolution for issue of 6,50,000 Fully Convertible Debentures (FCDs) of face value of Rs 65 each to Citicorp Finance (India) Ltd (CFIL). Each FCD shall be compulsorily convertible into one Fully paid-up Equity share @ Rs 65 each (Rs 10 face value + Rs 55 premium) on 365th day from the date of allotment or earlier in the manner set out in the Debenture Subscription agreement. The Issue price of Rs 65/- is higher than the price calculated as per formula specified in Chapter XIII of SEBI (Disclosure & Investor Protection), Guidelines, 2000, the company said.

The proceeds of the issue of FCDs will be utilized for the purpose of capital expenditure requirement for launching of new scooter models, expansion of two-wheeler business and meeting long term working capital requirements.

Tata Steel would soon start work on the construction of its 1.35 lakh tonne per annum (ltpa) ferrochrome smelter plant in South Africa’s Richards Bay province. The project has been delayed by around two years a result of a shift in location.

How will the market be today??

2006-08-16T21:31:00.000-07:00

Market may extend gains on cheaper oil
The market is likely to open on a firm note tracking mostly firm Asian markets and further fall in global crude oil prices. Sustained inflow from FIIs may also support the market but traders may resort to profit taking after a recent sharp surge in share prices.

From a recent low of 10,812.64 on 7 August, Sensex has risen 5.8% in the past 6 trading sessions to current 11,448.31. From 10,085.91 on 21 July, it has surged 13.5%. Fall in crude price, recovery in Asian markets and sustained FII inflow have boosted the domestic bourses.

Asian technology and export stocks climbed on Thursday (17 August) extending their recent rally as investors bet that credit costs in the United States would not go much higher, while crude oil fell to an eight-week low as supply concerns eased. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.16% to 1.2%.

Crude oil was down 41 cents a barrel at $71.48 in Asian trading on Thursday after touching its lowest since June 26 at $ 71.34. Weekly US stockpiles data was in line with expectations and showed a recent Alaska shut-in had had limited impact. Crude oil started falling since Monday (14 August) following an UN-brokered truce in the Middle East.

US stocks rallied on Wednesday (16 August) with the S&P 500 reaching a three-month high as investors interpreted a tame increase in core consumer prices to mean the Federal Reserve will keep interest rates unchanged in the short term. The Dow Jones industrial average jumped 96.86 points, or 0.86% to end at 11,327.12, while the Standard & Poor's 500 Index advanced 9.85 points, or 0.77% to finish at 1,295.43. The Nasdaq Composite Index climbed 34.53 points, or 1.63% to close at 2,149.54.

As per provisional data, FIIs bought shares worth a net Rs 304 crore on 16 August, the day when Sensex had jumped 135 points. There was a sustained inflow by FIIs since late July 2006. The net inflow of FIIs in the first few days of this month, till 14 August, totaled Rs 1,498 crore. They pumped in Rs 1,145 crore in July. It is expected that FII inflows in India could pick up further, following a recent upgrade of India’s rating by international rating agency Fitch.

The inflow of mutual funds for August 2006, till 14 August, totaled Rs 306 crore. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of nearly 20, based on its trailing 12-month June 2006 earnings.

StanChart weighs equity broking business in India

2006-08-16T20:50:00.000-07:00

It’s a global first for Standard Chartered Bank. And it’s happening in India. The multinational bank is planning a foray into the equity broking business by year end.

Buoyed by booming stock markets and growing retail interest in equity and equity-related investments in the country, this will be the first initiative of the bank in this area.

As a part of a larger global initiative, the bank will pick up stake in an equity broking house. “We are looking at getting into equity broking. It fits in well with our wealth management business. We are currently working out the business plan and may look at picking up a stake in an equity broking house,” said Neeraj Swaroop, CEO of Standard Chartered Bank in India.

“Equity broking has not been option for Standard Chartered globally, but are looking at launching that business in India. It’s part of a larger initiative globally,” he added.

With large brokers in India growing at 30-35%, the bank will cash in on the investible surplus of a growing economy. Emerging economies have been throwing up opportunities for foreign financial services companies to offer a wide array of financial services.

With the entry of several corporate players, the industry has attained size and scale, industry analysts said. Private banking is also on its agenda, considering Asia is home to the fastest growing High NetWorth Individuals (HNIs) markets — with Asian countries occupying 5 of the top ten fast-growing HNI markets.The natural advantage will be upgrading some of the existing priority banking customers that constitute a large captive customer base to private banking.

India’s dollar millionaires’ club is growing faster than most other economies. The number of HNIs — individuals with financial assets of Rs 4.5 crore and above — grew by 19.3% in ’05.

The India list now stands at 83,500 as compared to 70,000 in ’04, according to the World Wealth report from Capgemini and Merrill Lynch. In Asia-Pacific, there are nearly 2.4m HNIs, with combined wealth of $7.6 trillion.

Currently, the top 10 players in the equity broking business — Kotak Securities, Karvy, Motilal Oswal, Anagram and ICICI Direct — corner one-fourth of the total equity market turnover.

Fitch upgrades ICICI Bank’s issuer default rating to BBB

2006-08-16T20:49:00.000-07:00

Global rating agency Fitch on Wednesday upgraded the long-term foreign currency Issuer Default Rating (IDR) of India’s largest private sector bank, ICICI Bank, from non-investment to investment grade following the recent upgrade of India’s sovereign ratings. It also gave the bank’s short-term currency rating to fair quality grade.

The IDR has been upgraded to ‘BBB-’ from ‘BB+’ while the short-term foreign currency has been upgraded to ‘B’ from ‘F3’. The long-term rating outlook is stable, the rating agency said in a release. Meanwhile, the rating on the bank’s outstanding Rs 50 crore bonds have also been upgraded to investment grade (BBB-) from earlier non-investment grade (BB+), it said.

ICICI’s foreign currency ratings continue to reflect the bank’s improved financial condition, the rating agency said. However, it added, the key challenges are to maintain asset quality following the rapid loan growth since FY03 with the bulk of loans staring season during the environment of rising interest rate, which could affect borrowers’ repayment capacity.

GE plans to build N-plants, supply fuel

2006-08-16T20:48:00.000-07:00

After discussions with Nuclear Power Corporation of India (NPCIL), GE now intends to supply advanced boiling water reactor (ABWR) and economic simplified boiling water reactor (ESBWR) technologies to India.

“GE has two technologies that would be a great fit for the Indian market. The first is the ABWR. This is the only Generation-III reactor technology that has been developed, approved, built and operated in the world,” Peter Wells, general manager (marketing) for GE Energy’s nuclear business, told ET over phone from his North Carolina office in the US. “In addition, GE holds technology for ESBWR. This is based on the ABWR technology platform with some key evolution that will improve operational efficiency, safety and economics. It entails lower construction and operational costs. The design is currently undergoing review by the Nuclear Regulatory Commission in the US. Final Design Approval is expected by ’08, but the design is already being developed for two US utilities.”

He said further: “GE has supplied ABWR technology to Japan and Taiwan. Today, there are four ABWR plants operating, three more are under construction, and 14 are at planning stage in Japan and the US. This technology is available now and proved, making it an ideal option for India.”

GE Nuclear is primarily looking at four principal areas of opportunities in India, including building reactors. It’s keen on supplying fuel for these reactors, along with parts and services, to maintain and improve plant performance. To this effect, Andrew White, president and CEO of GE Energy’s nuclear business, will also be interacting with a number of government officials towards the end of the year. “GE has already established a dedicated team for nuclear energy in Mumbai, and we hope to expand this capability as and when we have approval from the US government to do so,” Mr Wells said.

Executives from GE’s nuclear division have already met their NPCIL counterparts, other government officials plus executives from a select few private engineering firms in India. “These meetings will continue, and we have scheduled some more for the rest of the year. It includes meeting officials of the ministry of economic affairs (MEA), the Planning Commission, the Atomic Energy Commission (AEC), the department of atomic energy (DAE), Bhabha Atomic Research Centre (BARC), and NPCIL,” Mr Wells told ET.

Reverse book building fails to click with investors

2006-08-16T20:46:00.000-07:00

Companies wanting to delist from the stock exchanges have found to their dismay that it is easy to sell shares to an Indian investor than to buy back shares. Share buyback through reverse book building, as allowed under the Securities and Exchange Board of India (delisting of securities) guidelines ‘03, has not been much of a success, say merchant bankers.

According to them, a lack of involvement of investors with physical shares in the price Discovery process, confusion over the limit at which delisting is permitted, and risk of misuse of the system by people bidding at abnormally high prices, have resulted in limited participation of shareholders in the bidding process.

The buyback statistics available with the Bombay Stock Exchange show companies like Ingersoll Rand, Herbertsons and SKF India received a below 50% response to their respective buyback offers through reverse book building. Of these companies, Herbertsons received bidding for as low as 11.6% of the book size of 14.15 lakh shares. The other two offers - SKF India and Ingersoll Rand - received 45.4% and 32.6% of their respective offers. Also the fact that most of these offers were unattractively priced as compared with the prevailing prices also acted as a main deterrent.

For instance, Herbertsons’ offer was at a floor price of Rs 220 while its shares were trading in the range of Rs 271-275 between January 16 and 23 (the offer period). The company finally offered an exit price of Rs 300 after taking into consideration all the bids.

In case of Ingersoll Rand, the shares moved between Rs 394 and Rs 406 during March 13-24, ‘06, during the time the company made the buyback offer for 82 lakh shares at a floor price of Rs 345 per share. The exit price was finally fixed at Rs 450. SKF India, too, had witnessed the similar trend. The shares were trading between Rs 213 and Rs 223, against the floor price of Rs 153 per share.

There are some major issues which merchant bankers say should be tackled to ensure that reverse book building as a method of delisting shares is implemented properly.

“As bidders can quote any price above the floor price, there is a possibility that minority shareholders’ interest may not be protected. Big shareholders may bid at a higher price and try to manipulate the share price,” said a senior official with a leading Mumbai-based merchant banker. If most of the bids are at a price considered to be very high by the company, it can call off the delisting process.

In reverse book building, only demat shareholders can participate in the price discovery process as bids are routed through a screen-based bidding system. Only after the price is discovered, physical shareholders are allowed to tender their shares. Merchant bankers say physical shareholders should also be given a chance to participate in the bidding process to ensure proper price discovery. There is also confusion over the limit of promoter holding beyond which delisting is allowed. Merchant bankers say as per listing agreement, promoters can go for delisting of shares if their holding crosses 75% but stock exchanges do not allow delisting unless promoter holding rises beyond 90%.

The reverse book building is a mechanism provided for accepting bids online from the shareholders through respective book running lead managers. Under the mechanism, the acquirer or the company offers to buy back shares from shareholders. During the period for which reverse book building is open, offers are collected from shareholders at various prices, which are above or equal to the floor price. The buy back price is determined after the offer closing date.

Cairn to get desi identity via mega IPO

2006-08-16T08:12:00.000-07:00

Cairn to get desi identity via mega IPO
The first step in the $6.5 billion Cairn’s strategy to become Indian is an initial public offer that is likely to open sometime late this year or early next. “Essentially we want to become an Indian company,’’ Dhir says.
To Read More Click Here

Pvt equity firms queue up for power equipment cos

2006-08-16T08:08:00.000-07:00

The power equipment sector seems to be latest attraction for private equity (PE) investors. The sector has not only witnessed a sizeable equity pick up by PE investors, but has also witnessed half-a-dozen deals during the last four months.

Private equity funds like Clearwater Capital, Morgan Stanley, HSBC, CLSA and Reliance Capital have picked up 8-15% in various power equipment companies such as Apar Industries, Kirloskar Electrical, Paramount Communication, IMP Powers and Diamond Cables and KLG Systel. Now, a mid-sized firm Emco has decided to mobilise $50m through various means, including equity placement with PE investors.

Last month, Clearwater picked up a 14.9% stake in Diamond Cables for Rs 100 crore, HSBC bought 9% equity in Kirloskar Electric, while Emerging Capital Advisors and Morgan Stanley picked up over 5% equity in Paramount Communications.

With this, total foreign fund holding in Paramount has touched 20% mark. Recently, IMP Powers divested 15% equity to various high net worth investors and private equity funds for about Rs 85 crore, and Reliance Capital - through Sonata Investments - picked up 6% equity in KLG Systel. About a year ago, CLSA acquired 14.9% equity in Apar Industries.

“Indian companies are hoping that private equity investors will bring in global business deals, and help enhance valuations for their future initial public offerings (IPOs). It will also support the inorganic growth of their company,” said Aditya R Dhoot, joint managing director, IMP Powers.

The Electricity Act has breathed fresh life into the sector, and the government’s fresh initiatives are helping the sector substantially. About 100,000 mega-watt (MW) of generation capacity will be added by 2012 and an additional 20,000 MW by the upcoming five ultra-mega power projects.

As a thumb rule, for every 1MW of capacity installed, seven million volt ampere (mva) of transformers are required, thus an additional demand of 700,000 mva of transformers will be felt till 2012, according to Mr Dhoot.

“Noticing the current activity in the power sector, PE investors have geared up their buyout plans in power equipment manufacturing companies. Net sales of these companies are showing a steady increase, as a result of which their profit margins are also increasing.

The demand for finished electric equipment has touched an all-time high with most projects in the pipeline gaining momentum,” said Sunil More, secretary general, IEEMA. He added that India is emerging as a hub for electrical equipment due to cheap labour.

NTPC sets sights on Fortune-500 entry by ’17

2006-08-16T08:07:00.000-07:00

National Thermal Power Corporation (NTPC) is eyeing a slot in the Fortune-500 companies with a Rs 1,40,000-crore group turnover and 66,000 MW of generation capacity by ’17.

This is part of NTPC’s recently laid-down corporate plan till ’17. Estimates on the group’s turnover, according to the roadmap, puts income from bulk customers at about Rs 45,000 crore and sale to state utilities at another Rs 45,000 crore. Generation from joint ventures is expected to be about Rs 17,500 crore, while distribution would generate about Rs 10,000 crore. Trading, on the other hand, will fetch about Rs 10,000 crore towards the total revenue kitty.

To achieve the targeted capacity, NTPC will need to set up additional facilities of 41,000 MW over the next 11 years. Liberal estimates peg the investments required at an excess of Rs 1,60,000 crore. It has, in fact, divided the expansion plan into two phases.

These tally with the 11th and the 12th five-year plan periods, the broad contours of which are already in place. “It includes ramping up of generation capacity from 24,954 MW to at least 45,705 MW by the end of 11th five-year plan (’12) and further to 66,000 MW including a 2,000-MW nuclear power generation capability by ’17,” said a highly-placed NTPC official.

The power major intends to add about 20,751 MW of fresh capacity by ’12. Currently, it’s preparing feasibility reports for 2,460 MW of fresh capacity which includes 1,000 MW at Simhadri in Andhra Pradesh, 660 MW at Barh in Bihar and 800 MW in Orissa’s Ib Valley.

Another 2,000 MW will be through two joint ventures with the railways in Bihar and another in JV with the Tamil Nadu Electricity Board (TNEB). Feasibility report for some 4,200 MW generation capacity has been recently drawn up. Now, it’s in the process of receiving clearances and approvals from various government departments.

Shaw Wallace's subsidiaries to merge

2006-08-16T08:02:00.000-07:00

Vijay Mallya-controlled Shaw Wallace and Company Ltd on Wednesday said its two subsidiaries, Shaw Wallace Financial Services Ltd (SWFSL) and Shaw Wallace Breweries Ltd (SWBL) have decided to merge.

In a filing on the Bombay Stock Exchange the liquor and beverages manufacturer said it is seeking approval for the Scheme of Amalgamation (merger of SWFSL with SWBL) from relevant High Courts.Shares of the company, a UB group firm, were trading at Rs 139, up 0.65 per cent at the BSE on Wednesday.

Acordis sells stake in Century Enka
Acordis Overseas Investment BV, an associate of Dutch company Acordis BV, has offloaded 2.08 per cent of its total stake held in BK Birla group company Century Enka Ltd, taking its total stake in the company to 4.13 per cent.

Century Enka said in a filing on the National Stock Exchange that Acordis sold about 4 lakh equity shares aggregating to 2.08 per cent of the company's total paid up capital through open market transactions from June 19 to August 11.

Following the sale, the stake of Acordis in Century Enka stands at over 8 lakh shares aggregating to 4.13 per cent stake, down from 6.2 per cent held previously.

Markets Today

2006-08-16T08:00:00.000-07:00

Sensex scales three-month high; oil, banking, metal shares advance
A rally in Asian markets due to easing concerns of inflation in the US, and a further fall in global crude oil price lifted domestic bourses today with the Sensex scaling a 3-month high. However, some late profit- taking in select blue-chips pulled the Sensex off 11,500 in the last 40 minutes or so of trading.

The barometer index rose 135.32 points, or 1.2%, to settle at 11,448.31, its highest closing since 17 May 2006. The S&P CNX Nifty advanced 42.95 points, or 1.3%, to finish on 3,356.05.Major Asian share indices climbed to landmark highs on Wednesday as US inflation fears eased. Another drop in crude oil prices also helped equities in the region. Crude oil fell below $73 a barrel on Wednesday after a UN-brokered truce ended fighting between Israel and Lebanon's Hizbollah.

Oil, banking, construction and metal shares edged higher. However, sugar scrips witnessed an across the board fall.

The market-breadth was strong. Against 1,759 shares rising on BSE, only 755 declined. A total of 53 shares were unchanged. Gainers outpaced losers by a ratio of 2.3:1. The BSE Small-Cap Index rose 1.7% to 5,801.02 whereas the BSE Mid-Cap Index advanced 1.2% to 4,781.48.The turnover on BSE surged to Rs 3,439 crore from Monday (14 August)’s Rs 2,848.28 crore. The market remained closed on Tuesday (15 August) for Independence Day.Sustained FII inflows, recovery in global markets following US Federal Reserve’s decision to keep US interest rates unchanged, an upgrade in India’s rating by Fitch, good rains in the crucial sowing month of July and strong Q1 June 2006 results, have instilled confidence on the domestic bourses since late July.

Concerns about rise in domestic interest rates waned after the US Federal Reserve, on 8 August 2006, kept US interest rates unchanged at 5.25%. It is reckoned that the Reserve Bank of India (RBI) may not raise domestic interest rates, at least in the short term, following the Fed move.

There was a sustained inflow by FIIs since late July 2006. The net inflow of FIIs in the first few days of this month, till 11 August, totaled Rs 1,487 crore. They pumped in Rs 1,145 crore in July. It is expected that FII inflows in India could pick up further, following an upgrade of India’s rating by Fitch.

The inflow of mutual funds for August 2006, till 11 August, totaled Rs 274 crore. Mutual funds sold shares worth a net Rs 81.71 crore in July 2006. Mutual funds are sitting on a good amount of cash and may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10,000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of over 19, based on its trailing 12-month June 2006 earnings.

In today’s trade, oil refining scrips surged in response to Prime Minister Manmohan Singh's Independence Day speech on Tuesday, hinting at a cut in subsidies on kerosene and LPG. HPCL jumped 11% to Rs 262, Indian Oil Corporation rose 7.7% to Rs 456.50 and BPCL gained 5% to Rs 343. Oil exploration major ONGC rose 2% to Rs 1,238 and gas transmission firm GAIL India gained 2.3% to Rs 257. Oil firms have been bearing a huge subsidy burden as prices of kerosene and LPG have not been proportionately raised despite a surge in global crude prices. The fall in global crude oil prices also aided the rally in refinery shares. BSE Oil & Gas sector index rose 2.3% to 5,432.26.

A host of PSU and private sector banks extended their recent gains on hopes of a pause to US interest rate hikes for the short term, thanks to a tame economic data released yesterday. HDFC Bank surged 4.6% to Rs 844, State Bank of India gained 1.4% to Rs 884.90 and ICICI Bank rose 1.8% to Rs 588. The BSE Bankex gained 2.5% to 5,171.71.

IT bellwether Infosys lost 0.7% to Rs 1,743. The stock came off a high of Rs 1,784, struck in early trade. Infosys has a huge 11.3% weightage in the Sensex.

Metal shares were in demand. Hindustan Zinc surged 4.4% to Rs 598.55, Hindalco gained 1.2% to Rs 168.65, Sterlite Industries added 2% to Rs 408.90 and National Aluminium Company gained 1.5% to Rs 202.60. The BSE Metal sector index rose 1.4% to 8,377.50.

Select construction stocks extended their recent recovery. L&T rose nearly 3% to Rs 2,374.90, Hindustan Construction gained 7% to Rs 112, Nagarjuna Construction advanced 4.5% to Rs 304 and Jaiprakash Associates rose 2.8% to Rs 443.

PSU power equipment major Bhel surged 3.3% to Rs 2,250 on renewed buying on the back of a strong order-book position of the company.

Fall in crude prices lifted auto shares. Hero Honda gained 3% to Rs 703, Tata Motors rose 2% to Rs 817, Ashok Leyland rose 1.3% to Rs 38, and Maruti Udyog gained 0.7% to Rs 808. BSE Auto sector index rose nearly 1% to 4,842.29.

Mahindra & Mahindra gained 2% to Rs 633 after the company said on Wednesday that it will invest Rs 550 crore to build a new auto plant in Maharashtra. The facility to make Ingenio utility vehicles will begin production by 2008, it said.

Index heavyweight Reliance Industries (RIL) rose 1.3% to Rs 1,043. A massive 12.3 lakh shares changed hands in the counter on BSE.

Sugar scrips witnessed a broad-based fall. Balrampur Chini Mills lost 6% to Rs 100, Bajaj Hindustan shed 2.8% to Rs 345.50, Dhampur Sugar shed 3% to Rs 111.75, Triveni Engineering lost 4% to Rs 78.90, EID Parry shed 3.8% to Rs 194.55, and Ponni Sugars (Erode) shed 6% to Rs 59.85.

Jet Airways added 3.5% to Rs 561.90 on a fall in crude oil prices. Meanwhile, as per reports in a section of the media, Jet Airways and Air Sahara have begun corrective action for the failed Jet buy-out of Air Sahara.

Construction firm Simplex Infrastructures jumped 10% to Rs 1,501.60, its maximum daily limit, after the firm said it had won orders worth Rs 577 crore.

Blue Dart Express jumped 11% to Rs 590, a day ahead of a board meeting to consider an open offer by majority shareholder DHL Express. The offer at Rs 550 a share is for the remaining 19% stake by DHL, which already owns 81%.

Jindal Steel & Power rose 2.3% to Rs 1,532 on reports that it had signed a joint-venture deal with the Bolivian Government for developing El Mutun, one of the world's biggest iron-ore deposits.

Gulf Oil Corporation jumped nearly 4% to Rs 1,242 after the firm said its mining and infrastructure division had secured a Rs 110 crore contract from state-run Singareni Collieries.

Amara Raja Batteries gained 1.2% to Rs 336.40 after the industrial and automotive battery maker's board approved an investment of Rs 88.20 crore by 2007/08 to expand capacity by 50%, to help it achieve revenues of Rs 1,000 crore a year.

Varun Shipping jumped 8.7% to Rs 78.75 after its board approved raising Rs 2,500 crore through an issue of securities in the domestic and overseas markets. The board also raised foreign funds investment limit in the company to 49%.

Real estate developer Mahindra Gesco Developers jumped 8%, to Rs 803.40 and the stock rose on a high volume of 22.6 lakh shares on BSE.

JSW Steel rose 13% to Rs 278.90. As many as 2.1 lakh shares changed hands in the counter on BSE.

i-flex (up 3.9% to Rs 1435) surged on reports that Oracle Corporation will make an open offer for additional 20% stake in the company at Rs 1,475 per share, consequent to i-flex on Monday deciding to make a preferential allotment of 4.447 million shares to Oracle, to finance a US acquisition.

Aksh Optifibre jumped 9% to Rs 60.75 after the company said it has entered into an agreement with MTNL for providing broadband content services in Delhi & Mumbai, using the latter's broadband network.

Hot News

2006-08-16T07:51:00.000-07:00

M&M impresses with new project
Mahindra & Mahindra surged 3.64%, to Rs 642.75 on signing an agreement with the Maharashtra Government to set up a Rs 550 crore new project code-named ‘Ingenio’ at Nasik.As many as 2.35 lakh shares were traded on the BSE.The stock bounced back from a lower level in the past few weeks as strong Q1 results declared on 26 July aided the upmove. From a recent low of Rs 511 on 19 July, it recovered to Rs 620.15 on 14 August 2006. Earlier, from a high of Rs 627.60 on 4 July, it tumbled to a low of Rs 511 on 19 July.

At the current price of Rs 642.75, Mahindra & Mahindra trades at 18.84 times its Q1 June 2006 annualised EPS of Rs 34.1.

Mahindra & Mahindra (M&M) and the Maharashtra Government has inked a memorandum of understanding to set up a Rs 550 crore new project code-named "Ingenio" at its manufacturing facility in Nashik. This plant will manufacture the company's new multi-purpose vehicle platform code named "Ingenio", which is expected to commence by the year 2008. With this additional investment the production capacity at existing plant at Nashik will increase to 1.5 lakh vehicles per annum.

Earlier this month, M&M reported a 39% growth in vehicle sales for July 2006 to 13,136 units from 9,454 units a year earlier. Its domestic auto sales, including utility vehicles, light commercial vehicles and three-wheelers, rose 41% to 12,481 units from 8,830 units a year earlier. Exports rose 5% to 655 units from 624 units. M&M sold 7,526 tractors in July, up 40% from 5,384 units a year earlier.

As per reports, M&M had in late July signed a long-term agreement with Bavarian Auto Trading Company, an Egyptian automobile manufacturer and trader, for setting up a completely-knocked-down (CKD) assembly unit in Egypt.

M&M also launched `Champion Alfa', a 0.5-tonne three-wheeler cargo vehicle in Tamil Nadu in July 2006. This is a smaller load variant of M&M's 0.75-tonne Champion. M&M is the market leader in the utility vehicles segment and has a roadmap in place for continued dominance in this segment. The company is also a dominant player in the tractor segment in India.

M&M’s net profit jumped 41% in Q1 June 2006 to Rs 204.17 crore, on 23% growth in sales to Rs 2,236.25 crore.

BSE Bankex comes into its own on changing interest rate milieu
The BSE Bankex advanced 2.34%, or 118.24 points, to 5,166.19, and was one of the major gainers among sectoral indices.Banking shares, including those of private as well as PSU banks, surged on sustained buying interest. The banking sector scrips have been doing well recently on hopes of US interest rates staying put in the short term. The US Federal reserve will meet sometime in September to consider revision of interest rates.

HDFC Bank (up 4.75% to Rs 845), ICICI Bank (up 1.70% to Rs 587.55), IndusInd Bank (up 2.36% to Rs 41.20), and Kotak Mahindra Bank (up 5.30% to Rs 317.85) were the major gainers among private sector banks.

Among PSU banks, Corporation Bank (up 3.30% to Rs 291.50), Syndicate Bank (up 3.05% to Rs 70.90), State Bank of India (up 1.80% to Rs 888) and Bank of Baroda (up 1.55% to Rs 241) advanced.

The BSE Bankex has been consistently advancing in the past month on strong buying momentum for banking stocks. It has advanced a sharp 24.54% to 5,044.89 by 14 August 2006 from 4,051.44 points on 19 July 2006. Further, a number of banks have raised prime lending rates (PLRs) in the past few weeks to protect their margins in a rising interest regime. The latest bank to raise its PLR is Union Bank of India, hiking its rate by 25 basis points.

Earlier, bank scrips were hit by rising borrowing costs and on concerns arising from deprecation in their gilts investments, in a rising interest rate environment.

India’s largest commercial bank, SBI, reported 34.69% fall in net profit to Rs 798.57 crore for the quarter ended 30 June 2006 as compared to Rs 1,222.83 crore for the quarter ended 30 June 2005. Total income decreased 1.34% to Rs 10,598.75 crore (Rs 10,742.85 crore).

On consolidated basis, the group had posted a net profit after minority interest of Rs 963.01 crore for the quarter ended 30 June 2006 as compared to Rs 1,322.67 crore for the quarter ended 30 June 2005. Total income increased to Rs 15,290.27 crore (Rs 14,483.50 crore).

Stock Alert

2006-08-15T22:55:00.000-07:00

Amara Raja Batteries may gain on expansion plan
Amara Raja Batteries on Monday said its board had approved the investment of Rs 88.20 crore to increase battery capacity by 50% to 5.4 million units per year. The expansion would be completed by the second half of 2007/08, it said in a statement. "Once this expansion is completed, the turnover of our company should exceed Rs 1000 crore," Managing Director Jayadev Galla said.

Bolivia has signed a joint-venture deal with Jindal Steel and Power (JSPL) for the development of El Mutun, a site believed to contain one of the world's biggest iron-ore deposits. The Bolivian government had changed the conditions of the El Mutun bidding to include a steel production operation in order to generate jobs and supply the country's domestic needs. A final contract is expected to be signed within a month.

According to the agreement, JSPL will use iron ore to produce steel and other metal products at plants to be built in Bolivia. JSPL and Bolivian government will evenly split the earnings from the iron ore mines. JSPL had first filed a claim on the El Mutun deposits with Bolivia in June, a month after the Bolivian government nationalized the country’s oil & gas reserves. The 60-sq-km El Mutun site, which lies near the Brazilian border near the city of Puerto Suarez, is estimated to contain iron-ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.

Wheels India is reportedly feeling the pinch of cheap Chinese imports which has also made it difficult for the company to seek price increases from its customers even though steel prices have been going up continuously. The Chinese products were about 20% cheaper. Meanwhile, the company has of late been following a policy of putting up units close to the customers’ plants.

Union Bank of India (UBI) has become the latest among a slew of public sector banks that have hiked their prime lending rates in the past three weeks. UBI has hiked its PLR to 11.5% from 11.25%. Its home lending rates too have been hiked by 25 basis points while interest rates on deposits have been left untouched.

A partial gas supply from ONGC’s flooded Hazira gas complex in Gujarat will begin before Aug. 21, chairman R.S. Sharma said on Monday.

P/E play: Look at the big picture

2006-08-15T21:25:00.000-07:00

Consolidation is the key. And so it appears from the results declared by India, Inc. ET analysed companies which have already declared Q1FY07 earnings and found that numbers on a standalone basis are often an illusion to the real developments in the company.

The real story could be ascertained by analysing consolidated numbers. And sometimes this is the reason why companies rise faster even with high P/E ratios.

Take for instance Sterlite Industries. The company has a P/E of 32 based on previous four-quarter earnings. However, when one looks at the consolidated numbers, the stock is trading in multiples of around nine. This is amazing and especially for a company like Sterlite, valuations on a consolidated basis do look attractive when compared against the industry.

This is not just a one-off example. There are several (refer table). The study, based on around 100 companies, which have declared their Q1FY07 numbers thus far, shows that almost all companies start to look attractive when one considers consolidated numbers. That’s the magic of consolidation. And several investors are missing this point.

Though the broad market appears to be very volatile, major gurus have been continuously talking about buying into quality stocks. FIIs, who have been positive during the current month are driving home this point. And much of their buying seems to be coming into these large cap stocks, which are looking fairly attractive on a consolidated basis.

Consolidation essentially brings to light the importance of economic form over a legal form of the company. It is the result obtained on a balance sheet when the accounts of a parent company and its subsidiaries are combined to reflect the financial position and operating results of the group as if it operated as a single entity.

How does looking at consolidated numbers help? Inter company equity/debt/sales/inventory can artificially distort the entire picture and so consolidation helps in eliminating all these and presents a true and better picture about the company.

An investor doesn’t want to see effect of money moving from one pocket of entity to another. He/She wants to see only transactions with outsider (non-controlled entities) and hence consolidation helps.

For instance, if Reliance sells something to its subsidiary Reliance Petroleum, investors don’t want to see the impact of it on bottom line as its fake. The inventory as well as profit in this case are still on the books. Only when the product is sold outside, profit is booked.

Increasingly, analysts and hard core investors have take a fondness to looking at consolidated numbers of a company. This not only gives a better insight to the company, but also brings out the real value of the company, which can be very easily window dressed in standalone results.

Sebi slaps fine on Citigroup

2006-08-15T21:19:00.000-07:00

For PN violation
Securities & Exchange Board of India (Sebi) has levied the maximum fine of Rs 1 crore on Citigroup Global Markets (Mauritius) Ltd. (CGMML) for violation of norms relating to issue of offshore derivative instruments, commonly known as participatory notes. CGMML had been charged with issuing off-shore derivative instruments (ODI) to Magnus Capital Corporation, a firm prohibited from investing in Indian securities.

"CGMML filed a statement and it is alleged that despite issuance of ODIs (overseas derivative instruments) to Magnus, they gave an undertaking and declaration which was not true," a Sebi order said. "CGMML is charged with violating the declaration given", the order said.

How will the market be today??

2006-08-15T21:17:00.000-07:00

Firm global markets, oil price fall may boost domestic bourses
The market is expected to extend its recent strong gains on the back of firm global markets and on further fall in crude oil price. Sensex had surged 120 points on Monday (14 August) on the back of drop in oil price and on truce in the Middle East. The market remained closed on Tuesday 15 August on account of Independence Day.

Major Asian share indexes reached landmark highs on Wednesday as US inflation fears eased. A weaker-than-expected producer prices raised hopes the Federal Reserve may keep interest rates unchanged in the short term. Key benchmark indices in Hong Kong, Japan, South Korea, Taiwan and Singapore were up by 0.6% to 1.6%.

Another drop in crude oil prices also helped Asian equities. Crude oil fell below $73 a barrel on Wednesday after a UN-brokered truce ended fighting between Israel and Lebanon's Hizbollah.

US stocks rallied on Tuesday, with the Nasdaq surging more than 2% as US inflation fears eased. The Dow Jones industrial average shot up 132.39 points, or 1.19% to close at 11,230.26, while the Standard & Poor's 500 Index rose 17.37 points, or 1.37% to settle at 1,285.58. The Nasdaq Composite Index soared 45.97 points, or 2.22% to close at 2,115.01.

As per provisional data, FIIs sold shares worth a net Rs 61.23 crore on 14 August, the day when Sensex had risen 120 points. Last few days witnessed strong FII inflow. FII inflow for the month of August 2006, till 11 August, totaled Rs 1487 crore. They had pumped in Rs 1145 crore in the month of July 2006.

The inflow of mutual funds for the month of August 2006, till 11 August, totaled Rs 274 crore. Mutual funds are sitting on a good amount of cash and they may step up purchases at declines. Analysts also say that significant fund flows in equities are expected from domestic insurance companies this year. Life Insurance Corporation alone plans to invest Rs 10000 crore in equities this financial year (FY 2007).

Indian equity valuations remain higher compared to its emerging market peers due to premium attached to decent-to-strong growth of the Indian corporate sector in a booming economy. The Sensex currently trades at a PE multiple of a little over 19, based on its trailing 12-month June 2006 earnings.

IT's star performer in sensex rally

2006-08-15T20:33:00.000-07:00

Even as the BSE sensex has risen by 25% after hitting rock bottom in mid-June, half of the scrips which constitute the 30-stock benchmark index have risen at a lower pace. After the crash from its all-time high of 12,671 on May 11, the sensex touched a closing low of 8,929 on June 14. Thereafter, it has risen by 25% to close at 11,192 on Friday.

Among the sensex laggards were heavyweight scrips like Reliance Industries which was up 18%, SBI which rose by 16% and ITC and Hindustan Lever which went up by just 19-20%. The top performers were Infosys Technologies which shot up by a huge 40% during this period, followed by Reliance Communications with a 38% rise, Grasim with 37% and Tata Steel with 36%.

Naresh Kothari, head of institutional equities at investment firm Edelweiss Capital told ET that Sensex stocks were driven by first quarter results. “The IT sector emerged as the star performer, coming out with better-than expected results,” says Mr Kothari.

Domestic and foreign flows, therefore, moved substantially to the IT sector. While Infosys gained the most, Satyam Computer also appreciated by 32% and both TCS and Wipro went up by 30% from mid-June to August 11.

While the mid-cap and the small-cap segments grew at a much lower rate, a handful of large-cap stocks managed to push up the sensex and pull the market out of the panic situation it faced in the second half of May and June.

“Even as many investors, especially in the retail segment, remained sceptical about Indian markets, the sensex continued to rise steadily and gradually crossed the 10,000 mark and then the 11,000 level recently,” says Mr Kothari.

“RIL’s Q1 results were below expectations and the closure of its retail outlets due to high petrol and diesel prices made matters worse for the company,” says Vinod Sharma, director of Anagram Securities.

SBI’s results were also not satisfactory. Hindustan Lever posted higher profits due to cost-cutting, but the sales growth was not very encouraging, according to Mr Sharma.

Nifty 50 Quotes at End Of Day

2006-08-14T07:03:00.000-07:00

Company	Prev Close	LTP	%Change
NSE Sensex	3274.35	3313.1	1.18
ABB	2764.9	2759.25	-0.2
ACC	880.8	887.8	0.79
BAJAJAUTO	2651.4	2784.75	5.03
BHARTIARTL	405.05	413	1.96
BHEL	2151.95	2180.45	1.32
BPCL	305.5	325.05	6.4
CIPLA	241.45	250.35	3.69
DABUR	136	136	0
DRREDDY	1441.3	1439.4	-0.13
GAIL	249.7	251.2	0.6
GLAXO	1096.55	1122.15	2.33
GRASIM	2191.2	2197.35	0.28
GUJAMBCEM	106.35	108	1.55
HCLTECH	585.1	590	0.84
HDFC	1267.45	1301.65	2.7
HDFCBANK	810.65	807.45	-0.39
HEROHONDA	695.95	682.55	-2.19
HINDALC0	165.8	166.55	0.45
HINDLEVER	223.2	227.15	1.77
HINDPETRO	222.25	236	6.19
ICICIBANK	584.5	576.75	-1.33
INFOSYSTCH	1742.2	1755.5	0.76
IPCL	273.5	277.15	1.33
ITC	175.25	178.55	1.88
JETAIRWAYS	520.5	541.1	3.96
LT	2320.55	2307.6	-0.45
M&M	612.95	620.2	1.18
MARUTI	796.1	802.25	0.77
MTNL	146.9	148.45	1.06
NATIONALUM	195.75	199.35	1.84
ONGC	1193.65	1215.3	1.81
ORIENTBANK	178.15	182.95	2.69
PNB	409.75	414.4	1.13
RANBAXY	394.9	392.65	-0.57
REL	473.15	480.35	1.52
RELIANCE	1011	1029.25	1.81
SAIL	77.45	77.65	0.26
SATYAMCOMP	757.1	775.25	2.4
SBIN	859.5	871.45	1.39
SIEMENS	1000.05	1006.85	0.68
SUNPHARMA	810.85	827.85	2.1
SUZLON	1240.1	1227.8	-0.99
TATAMOTORS	789.9	800.65	1.36
TATAPOWER	500.3	502	0.34
TATASTEEL	525.35	531.7	1.21
TATATEA	868.1	869.25	0.13
TCS	967.6	964.65	-0.3
VSNL	384.95	390.05	1.32
WIPRO	504.95	510.15	1.03
ZEETELE	269.95	272.4	0.91