GOOD MORNING Date: 01 June 2009
Thought for the day
“The winners in life think constantly in terms of I can, I will, and I am. Losers, on the other hand, concentrate their waking thoughts on what they should have or would have done, or what they can’t do.”
1)THE new Lok Sabha, with a more dominant Congress heading a coalition having a comfortable majority with its allies, opens its first session on Monday whose highlight would be the election of the Speaker and unfolding of the UPA Government’s plan of action.
2)WHILE finance minister Pranab Mukherjee has asserted that the next wave of economic reforms will provide a sustained stimulus to growth, the finance ministry has listed out seven important pending reform bills – on insurance, pension and banking reforms – for ‘priority’ passage by Parliament.
3)THE new UPA government at the Centre plans to raise Rs 10,000 crore through stake sales in state-owned units over the next one year, more than what the previous UPA government achieved during its entire five-year tenure. With the Left off its back, the Manmohan Singh-led government is planning to unveil its disinvestment agenda in the budget, complete with annual targets, a finance ministry official said.
CORPORATE / INDUSTRY
4)ANIL Ambani-promoted Reliance Power is in talks with Australian mining firms BHP Billiton and Rio Tinto for setting up a coal mining joint venture that will develop the mines allocated to the company and supply coal to its power plants. The company plans to spend close to Rs 5,000 crore in developing coal mines, said a person familiar with the development.
5)THE board of Bharat Shipyard has decided to make an open offer for Great Offshore even as Vijay Sheth, the vice-chairman and managing director of the company resigned from the company on May 29. Bharti Shipyard currently holds 14.9% stake in Great Offshore while Mr Sheth, the erstwhile promoter, holds less than a 1% stake in Great Offshore.
6)THE promoters of Ispat Industries, Pramod and Vinod Mittal, have pledged their entire shareholding in the company with lenders as the beleaguered steel company makes yet another attempt to rid itself of a mountain of debt and emerge healthy.
7)Kowshik Kuchroo is sure that the bad days for the shipping industry are over, finally. The vice-president of Mercator Line, India’s largest dry bulk carrier, said operations have become profitable once again and the company is, in fact, looking to buy new ships.
MONEY & BANKING
8)The country’s largest lender, State Bank of India, is hopeful of earning more profit than the landmark figure of Rs 10,000 crore in the current fiscal. “Looking at the past performance and(the) way the bank has been expanding its businesses, we expect the net profit to cross Rs 10,000-crore mark in FY’10,” a senior SBI official said.
9)PRO-BUSINESS comments by the government to boost the economy and trends in overseas equities will be key to a positive market sentiment this week. Though the wider consensus among market participants is that stocks appear overbought, the existing positive undertone may extend the flow of money into Indian equities from both foreign and domestic funds.
10)PSU stocks are on a roll. Market expectations that the UPA government, without the baggage of its Left allies, would push forward with the divestment of public sector undertaking(PSU) companies, is driving these stocks. As a result, since May 16 there has been investor euphoria for the stocks of government-run companies. The PSU index on BSE has gained 40%, double the sensex gain of 20% during the same period.
11)SIGNS of renewed confidence in stock markets among investors is encouraging retail broking firms to revive their nearly-dormant margin funding business. While many brokers have slashed interest rates on margin borrowing by at least 2.5% to encourage borrowing by clients to trade, a few of them have approached the stock exchanges, seeking permission to extend the scope for such lending to small and mid cap stocks.
12)Before derivatives trading began, NSE and BSE were all-electronic equity spot markets. By international standards, they were small markets. Derivatives trading, which started in June 2000, was a turning point in many ways. And after all the changes had fallen into place, NSE and BSE were both amongst the top 10 exchanges in the world by the number of transactions.
IPO / FPO
13)After a lull of nearly three months and following the installation of a stable government at the Centre, the capital market is set to witness action again, with Rishabhdev Technocable coming out with its Rs 22-crore follow-on public offer (FPO) scheduled to hit the market on June 4.
14)Some large domestic mutual funds are asking market regulator Sebi to revise a rule that prevents them from investing more than a tenth of an equity scheme’s assets in a single stock or equity-related instrument. The main trigger for the request is that the rule is constraining or will constrain these schemes from increasing their investments in shares of Reliance Industries, usually at the vanguard of a bull rally in stock prices.
15)Shinsei Asset Management (India), plans to launch its first two mutual fund products in the country before end-July and targets to have six-eight products in the market in the next 18-months, a top company official said.
16)Crude oil futures on the national bourses gained further momentum on the week ended Friday and prices rose nearly over 8% during the week on continued buying support from market participants mainly on reports of OPEC’s decision to hold output and falling US crude reserves supported by dollar weakness. The rally in gold futures on the MCX continued even this week because of higher crude oil price supported by weak dollar value.
17)Enthused by a strong institutional response to QIP(qualified institutional placement) issues, builders are now anticipating revival of private equity(PE) investments at project level, but real estate funds want to see more sales in the property market before finalising deals.
BUSINESS PROCESS OUTSOURCING
18)INDIA’S $47 billion IT outsourcing industry, struggling to cut costs without compromising on seat capacity, is now reinventing the wheel. Some of them have stitched up deals with telecom companies, outsourcing their own communication infrastructure, a model now known as “hosting services”.
19)After the pall of gloom owing to shrinking IT budget of the corporates for over three quarters, there is a ray of hope for the sector. According to global market research firm IDC, worldwide IT spending is expected to turn positive in 2010.
20)The impending bankruptcy declaration by General Motors may not have a major impact on Indian IT vendors, though analysts believe that there could be some short-term uncertainty on receivables and volumes.
21)TATA Consultancy Services(TCS), the country’s largest IT services firm, is exploring new avenues in the life sciences and healthcare space, while demand from existing clients gains momentum. Out sourcing analysts say there are deals worth $300-400 million in the market at various stages of negotiations.
22)Satyam Computer is planning to reduce real estate costs by terminating lease contracts for offices in India, which will help the embattled IT firm save up to Rs 100 crore by the end of this year.
23)OPTIMISM over the US government’s stimulus programs to combat the recession lifted consumer confidence in May to its highest level in eight months, a survey released on Friday showed. The gradual healing in consumer confidence, which hit a 28-year low in November, has been seen as a sign of an economic rebound from the worst downturn since the Great Depression.