Headlines (23 October 2008)

GENERAL

1)India’s Polar Satelite Launch Vehicle (PSLV-C11) on Wednesday morning successfully put Chandrayaan-1 into its initial orbit, marking the spacecraft’s long journey to the Moon. This is the first time India is sending a spacecraft to the Moon, 3.84 lakh km away. India is the sixth country to do so, after Russia, the U.S, the European Space Agency, Japan and China. It will be three weeks before Chandrayaan-1 reaches its final destination of 100-km orbit around the moon.

Hindu

CORPORATE / INDUSTRY

2)PMP Components, the auto-component company of the Ashok Piramal Group, has announced the acquisition of Czech Republic-based PAL International for an undisclosed amount. PAL International, which is the third largest wiping systems manufacturing company in Europe was earlier owned by the Canadian auto group, Magna International.

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MONEY & BANKING

3)THE rupee plummeted to an all-time low of 49.5 against the dollar on Wednesday, as foreign portfolio investors continued their selling spree on the stock exchanges. Heavy intervention by the central bank was of little help, as the rupee ended the day at a record closing of 49.28/29 against the dollar, weakening from Tuesday’s close of 49.04/06.

ET

4)The government is likely to infuse Rs 3,000 crore into seven public sector banks to shore up their capital adequacy ratio to 12 per cent to improve market confidence in the banking sector. The banks likely to benefit from the capitalisation programme include Central Bank of India, Vijaya Bank, Bank of Maharashtra, UCO Bank and Indian Overseas Bank, Allahabad Bank and United Bank. All these banks have a capital-to-risk-assets ratio(CRAR) of below 12 per cent.

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5)Bank of India reported an 80 per cent growth in second quarter net profit, beating analysts’ predictions. Mr T.S. Narayanasami, Chairman and Managing Director, attributed the better-than-expected results to robust credit growth and healthy recovery of written off assets. The bank’s net profit increased to Rs 763 crore from Rs 425 crore in the year-ago period.

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MARKETS

6)Key equity indices snapped their two-day gains and ended in the negative terrain on Wednesday. Intense selling pressure, coupled with weak global cues and sustained selling by foreign funds, forced the market to remain under pressure throughout the day. The 30-share Sensex of the Bombay Stock Exchange(BSE) plunged by 513.49 points, or 4.81%, and closed the day at 10,169.90 points. Earlier in the day, the Sensex opened with a negative gap and touched an intra-day high of 10,484.45 points and fell to a low of 10,128.22 points. The broader Nifty of the National Stock Exchange (NSE) also lost 169.75 points or 5.25%, ending at 3,065.15 points.

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7)Even as emerging markets are witnessing a massive capital outflow in the wake of the global credit crisis, foreign institutional investors (FIIs) have increased their stake in as many as eight companies in the 30-share Sensex. The major companies, in which the FII share went up from June 30 to September 30 this calendar year, include heavyweights such as HDFC, Hindalco Industries, Maruti Suzuki, BHEL and Larsen & Toubro. Analysts said the strong fundamentals of these companies continue to attract FII interest.

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8)Power Exchange India, promoted by the National Stock Exchange(NSE) and National Commodity and Derivatives Exchange(NCDEX), started operations today. The exchange received bids for 6300 MWH of power today and the matched power was cleared at the market prices between Rs 7.6/KWH and Rs 9.8/KWH.

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9)Nine out of the past 10 Diwalis saw Indian stocks rise after the festival. But with new and international factors at play, would this decade-long trend prevail this year as well? Fidelity Funds Network has analysed the performance of domestic stocks over the last 10 years, comparing them for the 30 days preceding and 30 days following Diwali. The analysis showed that the Indian indices did comparatively better after Diwali than before, said a release from Fidelity.

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10)With the rupee touching a new low on Wednesday, volumes in currency futures trading on the bourses hit new highs. A total of 2.06 lakh contracts were traded on the NSE on Wednesday, which is the highest number traded since the day currency futures commenced, on August 29. The total turnover on NSE amounted to Rs 1,026 crore.

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11)The Securities and Exchange Board of India(Sebi) has modified the earlier circular it had issued asking stockbrokers/clearing members to carry out complete internal audit on half-yearly basis. Now, the audit can be carried out by chartered accountants, company secretaries or cost and management accountants who are practising and do not have any conflict of interest. Earlier, Sebi had specifically stated that the half-yearly audit could be carried out only by independent qualified chartered accountants.

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IPO

12)THE government is likely to launch the proposed initial public offers(IPOs) and follow-on public offers(FPOs) of public sector companies only after the stock market conditions improve. It was expected that Oil India (OIL) and National Hydroelectric Power Company(NHPC) would be listed during the current fiscal, and discussions were on for floating IPOs of several other PSUs.

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MUTUAL FUNDS

13)ABN Amro Mutual Fund has extended the initial offer period for its bond fund until Monday, the fund house said in a notice today. ABN Amro Bond Fund, an open-ended debt scheme launched Sep 29, was slated to close initial subscription today.

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COMMODITIES

14)Tracking weakening global trend, gold prices dropped further by Rs 300 to 12,450 per 10 gram on the bullion market in New Delhi on heavy selling by stockists amid restricted buying. Standard gold and ornaments remained under selling pressure and plunged further by Rs 300 each to 12,450 and Rs 12,300 per 10 grams respectively. The metal fell Rs 210 in previous day’s trading.

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REAL ESTATE

15)Real estate major DLF has emerged as the sole bidder for the commercial development on 45,371 sq.metres of railway land in Mumbai’s Western Express highway at Bandra-east. Rail Land Development Authority(RLDA), which is executing the project, is likely to technically evaluate the project before taking a call on the next course of action, said sources in the know. Wednesday was the last day to accept the bid. Real estate firms including Akriti, DLF, Emaar-MGF, Tata Realty and Infrastructure and a subsidiary of Reliance ADAG had attended the recently held pre-bid meeting.

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16)Given the current global economy slowdown and its impact on the Indian economy, real estate developers have hit upon novel marketing strategies to woo reluctant flat buyers. Real estate players such as Mantri Synergy, Jains Sunderbans, ETA Rosedale and Hirco Palace Gardens have come out with new schemes to attract buyers. In what is seen as a clear move to shore up the ‘sagging morale’ of prospective buyers, property developers have now come forward to pay pre-EMI(equated monthly instalment) interest on part-money disbursed on the housing loan taken by a flat buyer. “Given the current situation, builders are taking a conscious decision to bear the interest burden of the consumer,” Prakash Challa, President, Confederation of Real Estate Developers Association of India (CREDAI).

Hindu

INFORMATION TECHNOLOGY

17)The country’s top IT firm TCS today said its net profit grew to Rs 1,270.99 crore in the quarter ended September 30 from Rs 1,251.60 crore in the year-ago period. Total income rose to Rs 6,784.45 crore in the second quarter of this financial year on a consolidated basis, nearly 18 per cent up from Rs 5,761.82 crore in the July-September quarter of last year, Tata Consultancy Services said.

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18)Wipro, the soaps to software major, riding on operational efficiencies has reported a 19 per cent increase in its net profit to Rs 978 crore for second quarter of the current fiscal as compared to the corresponding period last year. Revenues were up 36 per cent to Rs 6,507 crore. However, the guidance of its flagship IT services business, Wipro Technologies, indicates it will crawl by hardly a per cent during the third quarter, indicating tought times.

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19)Inspite of a slowdown in the US, TCS has said that it is on course to meeting its annual hiring target of 30,000 to 35,000. The Tata group company is ahead of its hiring target for the half year ended September 2008 as it added 18,664 in that period, according to Mr Ajoy Mukherjee, Vice-President, Head, Global Human resources.

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INTERNATIONAL

20)OIL prices fell below $69 a barrel Wednesday as investors shrugged off a looming OPEC production cut after company forecasts suggested the US may be headed for a severe economic slowdown that would crimp demand for crude. Light, sweet crude for December delivery dropped $3.37 to $68.81 a barrel in electronic trading on the New York mercantile exchange by mid-afternoon in Europe.

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21)THE world’s worst financial crisis in 80 years hammered emerging markets on Wednesday, prompting emergency central bank moves and call for international help to curb investor flight. Emerging market stocks, sovereign debt and currencies all came under intense pressure as investors unwound funding positions amid worries about the deteriorating world economy. That overshadowed signs that efforts to bolster the financial system were beginning to bear fruit.

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