Pragmatic Investments

Date: 31 July 2009

 Thought for the day

“Do the thing you fear, and the death of fear is certain”
 

– Ralph Waldo Emerson

 GENERAL

 1)After getting three desi versions of US president’s ‘Air Force One’, the Indian President and PM are now all set to also acquire 12 swanky and secure helicopters for VVIP travel on the lines of ‘Marine One”. The multi-million dollar deal to procure the 12EH/AW-101 helicopters, manufactured by Italian aviation major Agusta Westland, is in the concluding stages now, say defence ministry sources.

TOI

 ECONOMY

 2)The annual Wholesale Price Index fell for a seventh straight week, declining 1.54 per cent in the week to July 18 after falling 1.17 per cent on a year-on-year basis in the previous week, the Government said on Thursday. Inflation was recorded at 12.54 per cent during the corresponding week of the previous year.

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CORPORATE / INDUSTRY

3)Usha Martin Ltd, manufacturer of wire and wire ropes and special steel, has entered the Chinese market for the first time, according to the Chairman, Mr B.K. Jhawar. “We have secured an initial order valued at $3 million for supplying 1,200 tonnes of special wire ropes to China Oil Company for meeting its requirements for drilling and exploration operations,” Mr R. Jhawar, Managing Director, told Business Line.

BL

MONEY & BANKING

4)The rupee gained marginally by 8 paise against the dollar, tracking the Sensex which gained in the last hour of trade. The domestic currency opened at 48.54 and strengthened to close at 48.34, as against the previous close of 48.42.

BL

5)BUOYED by treasury gains, the country’s largest lender, State Bank of India(SBI), beat market estimates to post a 42% rise in net profit at Rs 2,330 crore against Rs 1,641 crore a year ago. On a consolidated basis, SBI group’s profit stood at Rs 2,759 crore, up 68% year on year.

ET

6)UCO Bank may float a Rs 800-850 crore follow-on issue during the third quarter of the current fiscal. The bank has also decided to float a non-life joint venture company by this September.

ET

MARKETS

7)The country’s equity indices ’snapped initial losses’ and closed the day with gains, following short covering and positive cues from the Asian and European markets. Domestic markets remained volatile throughout the trading session on the last day of expiry of July futures and option(F&O) series. Dealers in the markets also added
 that, better than expected results from the State Bank of India (SBI) led the buying in the banking stocks during the final hours of trading. The 30-share Sensex of Bombaty Stock Exchange(BSE) added 214.50 points or 1.41% to close the day at 15,387.96 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) gained 57.95 points or 1.28% to end the day at 4,571.45 points. Ambareesh Baliga, vice president at Karvy Stock Broking said, “It was basically huge short covering during the final hours
 of trading. Benchmark indices are likely to remain unstable in the coming days, due to lack of any trigger from the domestic as well as international front”.

FE

8)The July series expired on a bright note, led by smart gains in IT, realty, banking and FMCG stocks. Reliance Industries and metal stocks were weak. The August futures are expected to open on a strong note and the Nifty is likely to cross the 4,600-mark during early trades with upside resistance at around 4,650 levels.

BS

9)Markets regulator Sebi plans to introduce more dollar-rupee contract versions to give currency futures traders a wider choice. It has also decided not to introduce trading in other currencies with the rupee at this time. “We do not have much demand for other currency pairs. Instead(traders) need more variety in the current single-pair offering,” a senior Sebi executive told FE.

FE

IPO

10)Buoyed by the recent surge in capital markets, India Inc is planning to raise Rs 16,000 crore($3.3 billion) through initial public offerings(IPOs) this fiscal, an industry lobby report said on Thursday. “The companies are weighing higher expectations from renewed investors’ sentiments to raise funds from the primary market,” Assocham President Sajjan Jindal said. The Assocham Financial Pulse(AFP) analysis of the emerging IPO trends said companies in the infrastructure, IT, hospitality and textile sec-
 tors would issue IPOs to raise funds.

Indian Express

11)THE COUNTRY’S largest steelmaker SAIL may hit the capital market through an initial public offering(IPO) this year to raise funds for its current expansion programme, a senior official said. “The board will soon finalise a proposal in this regard and submit it to the steel ministry for its approval,” he said requesting anonymity. For the first time, SAIL will offload equity to retail investors, he said.

ET

STOCK SPLIT

12)GMR Infrastructure on Thursday said it has received the approval from its board for splitting its stocks in the ratio of 1:2. The board has accorded approval for sub-division of all its equity shares of Rs 2 each into two equity shares of Re 1 a piece, GMR Infrastructure said in a filing to the BSE.

FE

MUTUAL FUNDS

13)Increasing number of mutual fund houses are gearing up to battle the no-entry-load regime, which will come into effect on August 1, by raising exit barriers for investors. Fund houses such as HSBC Mutual Fund, Tata Mutual Fund, Kotak Mutual Fund and Escorts Mutual Fund have already announced that they will increase their exit loads. Other fund houses such as IDFC Mutual Fund and Mirae Asset Management Co too are planning to follow suit.

BL

14)WITH ban on entry loads in mutual funds becoming effective from Saturday, distributors have begun unveiling their cost structure. From transaction-linked fees to portfolio-linked fees, mutual fund investors will be charged on the basis of the amount they invested. They may not be able to negotiate rates with distributors. But on
 balance, the fee they will be paying is likely to be a fraction of what they were being charged till now.

ET

CORPORATE SCORE

15)Indian Oil Corp, the country’s largest oil refiner, on Thursday reported a nine-fold jump in net profit in the first quarter of the current fiscal as it took advantage of falling crude oil prices, making inventory gains. IOC posted a net profit of Rs 3,682.83 crore in the April-June quarter against Rs 415.13 crore a year ago, chairman Sarthak Behuria told reporters. This year’s profit also included that of Bongaigaon Refineries Ltd, which was merged with the company in March.

FE

16)MAHINDRA & Mahindra, the country’s largest utility vehicles and tractor maker, on Thursday announced a better-than-expected 152% growth in net profit in the June quarter, boosted by lower raw material costs, higher sales and the merger of Punjab Tractors with itself. The company’s net profit rose to Rs 401 crore in the period under review from Rs 159 crore in a year-ago period while net sales rose by 29% to Rs 4,229 crore.

ET

17)BHUSHAN Steel posted 30% increase in net profit to Rs 171.8 crore for the quarter ended June compared with Rs 132.6 crore in the corresponding period last year, backed by steep drop in raw material prices. Net sales slipped marginally by 1% to Rs 1,304 crore during the quarter.

ET

COMMODITIES

 18)Gold imports into India in July were between 8 to 10 tonnes against 24 tonne in all of July a year ago, the head of Bombay Bullion Association(BBA) said on Thursday. “The reason for the fall is the same the prices are too high,” Suresh Hundia, president of the BBA said.

FE

COMMUNICATIONS

19)Notwithstanding a booming telecom market, state-owned Bharat Sanchar Nigam Ltd has reported a massive decline in its profit for 2008-09 to Rs 574.85 crore from Rs 3,009 crore in the previous year. This is in sharp contrast to the private players who have been reporting good numbers riding on record number of subscriber additions.
 Bharti Airtel, for instance, reported profit of Rs 2,648 crore in just one quarter.

BL

20)SUNIL Mittal, chairman and group CEO of Bharti Enterprises, is in talks with government officials to clear regulatory issues over listing of the Bharti Airtel-MTN combined entity in India as well as South Africa in case the negotiations between the two telcos eventually lead to a full merger.

ET

INFORMATION TECHNOLOGY

21)In a move aimed at going aggressively after Government contracts, IT services major Wipro is ‘revisiting’ its strategy and game plan with regard to the Government business. “Government business has been a thrust area for us..But we feel that our plans have been somewhat conservative. We expect the business to be big in this
 space, and so the exercise is aimed at leveraging our full capability in tapping the opportunities,” Mr Suresh Vaswani, Joint Chief Executive Officer of Wipro Ltd, said. Wipro – like its larger rivals TCS and Infosys – is said to be keenly eyeing the Unique Identification (UID) Project and other large Government contracts.

BL

INTERNATIONAL

22)Crude oil rose more than $3 a barrel and gasoline surged the most in four months after better-than-expected corporate earnings and as jobless claims held below late-June levels. Crude oil for September delivery rose $2.98, or 4.7 per cent, to $66.33 a barrel at 10:54 a.m on the New York Mercantile Exchange.

BL                                                                                                   

FOR MORE INFORMATION, PLEASE BROWSE THROUGH THE FOLLOWING SITES.

Karvy Consultants Ltd www.karvy.com
 www.khojhyderabad.com
 www.indiacorporateadvisor.com
 www.karvycomtrade.com (Commodities)
KARVY Global Services Ltd www.KARVYGlobal.com
KARVY Realty (India) Limited www.karvyrealty.com
Economic Times www.economictimes.com
The Financial Express www.financialexpress.com
Business Line www.businessline.in
Business Standard www.business-standard.com
The Times of India www.timesofindia.com
The Hindu www.hindu.com
Deccan Chronicle www.deccan.com
The New Indian Express www.newindpress.com

FOR THE DAY:

The indices are expected to open on a positive note as global markets have ended on a positive note.

Trade long in Nifty above 4600 levels else from lower supports of 4550 with a stop loss placed at 4520 levels targeting 4680 and 4700 levels.

Previous Close: SENSEX 15388 : NIFTY 4571

Today’s Levels

Trade long if SENSEX sustains above 15388 (NIFTY 4471)

[Upper targets/resistances at 15463(4599)/15580(4636) or higher]

Trade short if SENSEX fails to sustain above 15580 (NIFTY 4636)

[Lower targets/supports at 15463(4599)/15388(4471) or lower]

Date: 30 July 2009

Thought for the day

“Believe you can do it. Believing something can be done puts your mind to work for you and helps you find ways to do it.”

–George Shinn

GENERAL

1)China has proposed that there should be a hotline between the Chinese Premier and the Prime Minister of India to maintain regular contacts at the highest level, External Affairs Minister S M Krishna told the Lok Sabha on Wednesday. In a written reply, the Union Minister said the two countries were in the process of discussing the technical and other modalities. A hotline between India and Russia is currently operational, Krishna said.

Indian Express

ECONOMY

2)A day after the Reserve Bank of India pegged economic growth at 6% for 2009-10,finance minister Pranab Mukherjee on Wednesday told the Rajya Sabha that he expected growth to stay at the 6.7% level recorded in 2008-09. Pointing to the positive trends in manufacturing sector output as well as core sector production in June, Mukherjee expressed hope that the trend gathered momentum ‘when the busy season comes.’

FE

3)INDIA received $2.2 billion foreign direct investments(FDI) in May this year, department of industrial policy & promotion(DIPP) secretary Ajay Shankar said. There is a 43% drop in the FDI inflow in May 2009 compared to $3.9 billion received in the same month of the previous year. The inflow of foreign capital into the country will improve now, as the country’s industrial output in June looks “promising,” Mr Shankar said on the sidelines of a seminar by Confederation of Indian Industry(CII). “We think, with liquidity improving and confidence in the economy rising, these (FDI) numbers should pick up,” he said.

ET

CORPORATE / INDUSTRY

4)JSW Cement, part of the Rs 40,000-crore OP Jindal Group, plans to set up cement units near the group’s steel plants at Kurnool, Andhra Pradesh, and Vijayanagar, Karnataka. The units will have a combined capacity of 5.5 million tonnes per annum(mtpa).

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MONEY & BANKING

5)The rupee opened lower as the dollar gained against most major currencies in the overseas market and weakend during the day tracking the negative equity indices and on month-end demand. The rupee opened at 48.32 and closed at 48.42, about 20 paise lower than the previous close of 48.20/21. During the day it touched a low of 48.51.

BL

6)Punjab National Bank has reported a 62 per cent increase in net profit for the quarter ended June 30, at Rs 832.05 crore(Rs 512.40 crore). A sharp increase in treasury income coupled with robust credit growth helped the bank’s bottomline growth.

BL

7)Aided by a robust treasury income, mainly trading profits from Government securities, Corporation Bank reported a 41.75 per cent increase in net profit in the first quarter of the current fiscal at Rs 261.25 crore(Rs 184.30 crore).

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INSURANCE

8)The Insurance Regulatory and Development Authority (Irda) is likely to relax the cap on the distribution cost of unit-linked insurance plans(Ulips). The cap is to be effective from October 1, 2009. The move follows a meeting of the Life Insurance Council today, where insurers suggested that mortality charges, which go into fixing the risk premium, be kept outside the ceiling imposed by Irda last week, Irda representatives were also present at the meeting.

BS

9)The country’s largest insurer Life Insurance Corporation has increased its market share to 62% among life insurers in the first quarter of current fiscal, thereby growing by about 20 per cent, compared to same period last year.

FE

MARKETS

10)Despite huge volatility throughout the trading session, equity indices closed the day below the dotted line, following weak cues from the Asian markets and intense selling in realty and metal stocks. The 30-share Sensex of Bombay Stock Exchange(BSE) lost 158.48 points or 1.03% to close the day at 15,173.46 points. The broader S&P CNX Nifty of National Stock Exchange(NSE) was down 50.60 points or 1.11% to end the day at 4,513.50 points.

FE

11)Indian investors’ appetite for overseas equity and debt continued to rise during the last financial year. No wonder brokers and mutual funds are cashing in on the opportunity. Broking firms are forging ites with global players to facilitate direct equity market transactions. According to the Reserve Bank of India (RBI) data, investments in these two instruments have risen from $144.7 million in 2007-08 to $151.4 million in 2008-09.

BS

RIGHTS ISSUE

12)THE Securities and Exchange Board of India is considering a further reduction in the rights issue timeline to 30 days or less from the existing 43 days. The move is in line with the regulator’s ongoing efforts to streamline primary market procedure. Three investment banking officials told ET that as part of this process, an offer document may no longer be required for a rights issue.

ET

MUTUAL FUNDS

13)Fund houses have started inducing distributors by offering them sops to attract customers after the August 1 deadline, when the entry load for investing in mutual funds will be abolished. In the past few days, various senior officials from large fund houses have been meeting distributors and promising commissions of 2%-2.5% after August 1. A distributor, on condition of anonymity, said, “In the past few days, many fund houses have started assuring us commission of at least 2% after August 1. Mostly, all the major fund houses have promised us an upfront commission, while smaller ones are still trying to figure out the load structure.”

FE

CORPORATE SCORE

14)Hindustan Petroleum Corp Ltd (HPCL) has posted a net profit of Rs 649.12 crore for the quarter ended June 30,2009, as against a net loss of Rs 888.12 crore in the same quarter a year ago.

FE

15)On the back of the highest ever quarterly two-wheeler sales in its history, Hero Honda Motors on Wednesday posted a 83% jump in its net profit during the April-June period at Rs 500.11 crore as against Rs 272.87 crore in the corresponding quarter of the last financial year. This is the highest-ever quarterly profit posted by it.

FE

16)RAJESH Exports Limited’s first quarter net sales jumped 58% to Rs 3,672.1 compared to Rs 2,332.16 crore in the year-ago period. The first quarter net profit stood at Rs 18.45 crore as against Rs 34.43 crore compared to the same quarter last year. A company filing made with the stock exchangs said the order book stood at Rs 1,262.32 crore as on June 30,2009 compared to Rs 1,246 crore order book as on March 31,2009.

ET

COMMODITIES

17)Commodities market regulator Forward Markets Commission asked exchanges to impose stringent penalty on cash transactions, which are banned. It is for the second time in as many months the regulator is asking the bourses to take stern action to curb rampant cash dealings. After a directive from FMC in June, commodity exchanges came up a penalty of 0.1% for every cash dealing of over Rs 10 lakh which, however, did not succeed much to prevent such a practice.

FE

18)Gold fell in London and New York to more than a one-week low as a stronger dollar dimmed the metals appeal as a alternate investment. Gold futures for August delivery fell $5.20, or 0.6 per cent, to $933.90 an ounce as of 8:40 a.m. on the New York Mercantile Exchanges Comex division.

BL

19)THE worst fears for consumers is coming true. With festivities kicking off as early as July 31 in the three southern states Karnataka, Andhra Pradesh and Tamil Nadu tur dal(or pigeonpea) has breached the psychological barrier of Rs 100 per kg in Karnataka.

ET

COMMUNICATIONS

20)THE deal between Bharti Airtel and MTN is likely to be inked only by September this year. It is learnt that the two companies could extend the exclusively period for discussion in a few weeks. The original timeline for discussions expires on July 31. In the event of the deal going through, the Bharti-MTN combined entity could be the third largest wireless group globally.

ET

BUSINESS PROCESS OUTSOURCING

21)After a lull in hiring in the $12.7-billion Indian business process outsourcing(BPO) exports industry, players have again started putting up the ‘we are hiring’ sign. Even walk-in-interviews organised by hiring consultants are back in fashion. While most companies are looking at hiring in the finance and accounting, banking and insurance verticals,the industry is no more recruiting in droves bucking the trend for the last couple of years.

FE

INFORMATION TECHNOLOGY

22)Information Technology(IT) industry body Nasscom has projected that the Indian IT industry will grow by 4 to 7 per cent in financial year 2009-10. The industry body has also estimated that the export revenues will be $48 billion to $50 billion in 2009-10 fiscal and domestic revenues will grow by 15 to 18 per cent to reach around $650-670 billion.

BS

INTERNATIONAL

23)Crude oil fell the most in three months after a government report showed an unexpected gain in US inventories as imports jumped and refiners reduced operating rates. Crude oil for September delivery fell $3.23, or 4.8 per cent, to $64 a barrel at 10:48 a.m on the New York Mercantile Exchange.

BL

FOR MORE INFORMATION, PLEASE BROWSE THROUGH THE FOLLOWING SITES.

Karvy Consultants Ltd www.karvy.com
www.khojhyderabad.com
www.indiacorporateadvisor.com
www.karvycomtrade.com (Commodities)
KARVY Global Services Ltd www.KARVYGlobal.com
KARVY Realty (India) Limited www.karvyrealty.com
Economic Times www.economictimes.com
The Financial Express www.financialexpress.com
Business Line www.businessline.in
Business Standard www.business-standard.com
The Times of India www.timesofindia.com
The Hindu www.hindu.com
Deccan Chronicle www.deccan.com
The New Indian Express www.newindpress.com