GOOD MORNING Date: 02 June 2009
Thought for the day
“A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history.”
1)Humility and quiet resignation marked the first day of the 15th Lok Sabha on Monday as the House met for the first time after a long and acrimonious electoral battle that saw many parties and leaders biting the dust and from which many new faces emerged.
CORPORATE / INDUSTRY
2)THE automobile industry, though slowly, is showing signs of revival. While Maruti Suzuki India, the country’s largest passenger car manufacturer with a market share of over 50%, registered a growth of
10.4% in May at 70,785 units compared to 64,143 units in the corresponding month last year, its close competitor, Hyundai Motors, posted a decline of 4.1% in domestic sales last month at 23,503 units vis-a-vis 24,510 units in May 2008.
3)AHMADABAD-based Zydus Cadila and Israeli generic major Teva have settled their patent disputes over active pharmaceutical ingredients (APIs) used to make generic versions of GlaxoSmithKline’s heart drug and Johnson & Johnson’s anti-psychotic drug. Zydus will now be able to sell its generic versions of these products in the US without legal implications from Teva.
4)SUN Pharmaceuticals, India’s biggest drug company by market capitalisation, will spend Rs 332 crore in research & development of low-cost version of original drugs to be sold in domestic and global markets, a top company executive said.
5)Voltas electro-mechanical business has secured two orders worth Rs 300 crore for electromechanical projects for the most prestigious and noteworthy ‘new generation’ airports in India, namely Kolkata’s Netaji Subhas Chandra Bose International(NSCBI) airport and Chennai International Airport.
6)US Drug maker Mylan will pay Rs 817 crore to buy-back 24.8% equity in Matrix Labs. The price, arrived through a reverse book-building process, is Rs 236 crore (41%) higher than the indicative price. The US-based company came out with a public offer in the first week of May to buy back the remaining 24.8% equity in Matrix at an indicative price of Rs 150 per share.
MONEY & BANKING
7)The rupee touched a six-month high buoyed by strong gains in the domestic equities market and a weak dollar. “Although there was a two-way movement, the strengthening bias for the rupee continues,” said a forex dealer with a private sector bank. On Monday, the rupee opened at 47 and closed at 46.97 against Friday’s close of 47.08.
8)LEADING banks have told corporates that there can be no dramatic reduction in lending rates. While the government is nudging banks to cut interest rates, the lenders have told apex industry bodies
that rates cannot be lowered to the extent corporates are demanding. At a meeting last week, the Indian Banks’Association(IBA), an association of bank managements, spelt out its views to the CII
and the FICCI. “We have told corporates that lending rates can be cut by 50 to 100 basis points (bps) from the current level in the near to medium term,” said a bank CEO who attended the meeting.
Corporates have asked for a 400-500 basis points cut in lending rates.
9)Overseas analysts are now bullish on the Indian economy. An analysis by Bank of America and Merrill Lynch has upgraded our FY10 capital inflow projections by $14 billion, on a mix of receding international risk aversion as well as domestic political risks.
10)The positive momentum on the domestic equity bourses on expectations of speedy implementations of economic reforms by the new government continued to push share prices higher. The 30-share Sensex of the Bombay Stock Exchanges(BSE) extended its upward rally by another 215.38 points or 1.47% on Monday to end the trading session at 14,840.60 points, just 160 points short of the 15-k level. Similarly, the broader 50-share Nifty of the National Stock Exchange(NSE) extended its gain by 1.82% or 80.95 points to close the day at 4,529.90 points.
11)WITH FIIs getting back the voracious appetite for Indian stocks, they have put in over Rs 3,500 crore through just 62 bulk deals on the BSE in the first two months of the current financial year. According to an analysis of bulk deals on the exchange in April and May this year, FIIs transacted as many as 62 bulk deals buying shares worth Rs 3,516.61 crore, with the biggest deal being the sale of over 5% stake in DLF for Rs 2,106 crore.
12)Stocks of oil exploration and production companies showed good performance recently, primarily due to a steady rise in crude oil prices. Nymex crude moved up over 10 per cent in the last
13)Shares of Great Offshore rose 2.68 per cent to Rs 373.70 after Bharati Shipyard announced an open offer for another 20 per cent stake on Monday. Bharati, which holds 14.89 per cent stake in the
company, is yet to announce the open offer price. Analysts expect the offer price should be around Rs 326 a share.
14)CIVIL aviation minister Praful Patel has said that government will consider listing of national carrier Air India on the bourses after capital market improves. “But the airline will not lose is public
sector character and it will not be privatised,” he told media persons after assuming charge for the second consecutive term.
15)Assets under management(AUM) of several fund houses gained a significant amount in May compared to April, representative of smart inflows from retail investors in the Mutual Fund(MF) industry.
AUM refers to the market value of assets that an investment company manages on behalf of investors. Reliance MF for instance, the country’s biggest fund house, crossed the Rs 1 lakh crore mark in May. Fund managers attribute these gains to a surge in the Indian equity market in the last one-month. Data released of 27 fund houses by the Association of Mutual Fund in India(Amfi) showed AUM of Rs 4,40,589.64 crore for May, gaining 16.84% or 63,502.22 compared to Rs 3,77,087.41 crore in April. AUM of Reliance MF stood at Rs 1,02,730.15 crore, up by 14,342.16 crore or 16.23% compared to Rs 88,387.98 crore in April.
16)WITH monsoon activity reviving after a brief pause, fears of another spike in food price inflation is dispelled for the time being. Monsoons have advanced over the southern states of Karnataka and Andhra Pradesh, after a week’s lull, India Meteorological Department, said on Monday. Agri commodity analysts pointed out that any further delay in revival in rain would have lead to a spike in prices of kharif crops. “Further delay hereafter (in advancement of monsoon) would have affected land preparation and sowing activities. In such event the prices of Kharif crops would have moved higher,” said Harish Galipelli, chief analyst at Karvy Comtrade.
17)Many commodity stocks have surged 25-60 per cent during the first five months of this calendar year. The major reason is China’s strategic buying and the re-entry of hedge funds and institutional
investors in commodities in a big way. This has led, among other things, to crude oil at a year’s high of $68 a barrel and gold is also close to the year’s high of $1,000 per ounce. Copper and lead are up over 60 per cent in the calendar year.
18)Copper rose more than 3 per cent on Monday to top $5,000 a tonne for the first time since mid-October, as Chinese data and a weak dollar drove industrial metals to new multi-month highs.
19)Chana futures prices on the national commodity bourses may remain weak over the next few days on higher stocks with exchange warehouses supported by continued imported inflows of pulses. Overall demand from local buyers is limited.
20)Realty firm Parsvnath Developers will invest Rs 700 crore to develop a premium luxury housing project at Civil Lines in the national capital and expects a realisation of about Rs 1,300 crore in three financial years.
21)LEADING GSM operators Bharti Airtel and Vodafone Essar have added 2.8 million and 2.7 million subscribers, respectively, in April, continuing with their growth momentum. The second-largest mobile
operator, Reliance Communications, added just over 2 million subscribers last month, according to data released by telecom regulator Trai on Monday.
22)Summit Technology Solutions, a Summit Holding company, Egypt, has announced its partnership with Polaris Software Lab Ltd. Through this partnership, Polaris has made its first major product go live in the Egypt market.
23)Asian automakers have largely protected themselves from any disruption from the bankruptcy filing by General Motors and should gain further market share down the road, analysts and automakers said on Monday. General Motors, the world’s largest carmaker until its 77-year reign ended last year, filed for bankruptcy protection in the US with a plan to create a 21st-century company that can compete in world markets. GM reported $82.29 billion on assets and $172.81 billion in debt. The US government will bankroll the transformation of the 100-year-old automaker, a victim of tumbling sales and higher gas prices. The US plans to convert much of its $50 billion of loans to a 60% stake in new entity, administration officials said.
24)CHINA’S manufacturing sector continued to expand moderately in May as new export orders improved, two surveys showed on Monday, adding to tentative signs that the world’s third-largest economy is stabilising.
25)Crude oil rose to the highest since November as China’s manufacturing expanded for a third month, signalling that fuel demand in the world’s second-biggest energy consumer may increase. Crude oil
for July delivery rose $1.25, or 1.9 per cent, to $67.56 a barrel at 9:58 am on the New York Mercantile Exchange.