HEADLINES (03 JUNE 2009)


GOOD MORNING Date: 03 June 2009

Thought for the day

“The results you achieve will be in direct proportion to the effort you apply.”

–Denis Waitley

GENERAL

1)Nominations in favour of Meira Kumar as Speaker of the Lok Sabha were filed on Tuesday with Secretary-General of the Lok Sabha P.D.T Achary by almost all sections of the House except the major constituents of the “Third Front’ – the Left parties, the Telugu Desam Party and the All-India Anna Dravida Munnetra Kazhagam – paving the way for a smooth and unanimous election on Wednesday.

Hindu

ECONOMY

2)APRIL is no longer the cruellest month – in the first month of the current fiscal year, six core industries together clocked the fastest growth rate in ten months, emboldening the prime minister’s economic advisor to hint at the possibility of an upward revision of economic growth forecast for the year. Power, crude oil, refinery products, coal, cement and finished steel grew by 4.3% year-on-year, recovering from the low of 1.1% in December 2008, according to a release by the ministry of commerce and industry on Tuesday.

ET

3)The government may rope in merchant banker NM Rothschild to put in place a detailed roadmap for selling stakes in state-run companies, according to a finance ministry official. “We are also working on an advisory panel on disinvestment, which could include Accenture, McKinsey and Ernst & Young among others,” the official said on conditions of anonymity.

ET

4)IN a move that would significantly benefit Indian companies seeking to aggressively expand overseas and bulk up inorganically, the government is learnt to be studying the possibility of allowing cross border mergers. “Under Indian law, a merger is only allowed if both merging companies are registered in India,” Diljeet Titus, managing director at corporate law firm Titus & Company, told FE.

FE

CORPORATE / INDUSTRY

5)THE FMCG sector has grown dramatically in April-May 2009 to log a 20% surge, compared with 17-18% in the same period last year. Across categories, companies are ploughing back savings from lower commodity prices to invest in brand building, consumer discounts and promotions, coupled with improved distribution strategies. Rough industry projections peg growth at 30% in 2009-10. FMCG companies are also investing in distribution, and tailoring their products and prices to specific geographies to increase the return on investment(RoI).

ET

6)Consumer durables company Videocon is undertaking an image makeover exercise, as it looks to position itself as a premium brand with focus on eco-friendly and youth oriented products.

BS

MONEY & BANKING

7)The rupee declined for the first time in five days on concern an advance in crude oil prices will increase import costs. The rupee declined 0.2 per cent to 47.025 a dollar at the close, according to data compiled by Bloomberg. It touched 46.89 yesterday, the strongest intraday level since December 18.

BS

8)Local cheques should be cleared on the same day or at the most the next day of their presentation. For outstation cheques, the time frame for clearing should not exceed seven days for State capitals, 10 days for major cities and 14 days for other locations, said the Reserve Bank of India in a notification issued today.

BL

9)INDIA has seen a huge spurt in overall ATM transactions since April 1, when the usage of teller machine was made free for all customers irrespective of the bank they banked with – thanks to customers opting for multiple and smaller transactions. This trend is making many banks reconsider their earlier aggressive branch expansion targets.

ET

10)KARUR-based Lakshmi Vilas bank is set to raise Rs 2,500 crore over the next five years through a combination of a rights issue, issue of subordinated debt, follow-on public offer, global depository receipt(GDR) and a perpetual bond issue. The capital is needed to augment the bank’s business from around Rs 12,000 crore to Rs 70,000 crore over the next five years.

ET

INSURANCE

11)Country’s largest private sector life insurer, ICICI Prudential Life, has launched SecureSave, which is a unit-linked product that aims to grow the value of the investor’s savings, overtime, with an assurance of a minimum guaranteed maturity amount. SecureSave will provide a guaranteed maturity benefit up to 150% of the sum of all the investment premiums paid.

FE

12)HDFC Standard Life has launched the Unit Linked Wealth Multiplier, targeting high networth individuals, with limited premium paying term of 3 years for a fixed tenure of 10 years. The product comes with five fund options including Money Plus, Bond Opportunities, Large and Mid Cap.

FE

MARKETS

13)Indian equity indices closed the day on a flat note after witnessing huge volatility throughout the trading session. The 30-share Sensex of the Bombay Stock Exchange(BSE) added 34.28 points or 0.23% to close the day at 14,874.91 points. The broader S&P CNX Nifty of the National Stock Exchange lost 4.65 points or 0.10% to end the day at 4,525.25 points. Dealers in the market said apart from strong cues from the global markets, huge profit booking was witnessed in the markets.

FE

14)Shares of KGN Industries, a non-banking finance company,hit the 5 per cent upper circuit, closing the day at Rs 395.25. The company’s board will meet on June 6, 2009, to consider a stock split (current face value is Rs 10) in the ratio of 1:10.

BS

15)The Bajaj Hindusthan scrip rose 6.6 per cent to Rs 159.65 on announcement that the company has repurchased foreign currency convertible bonds(FCCBs) worth $17.93 million for cash at a discount. A total of $119.5 million was outstanding prior to this.

BS

16)With the equity market gaining momentum and the country’s economic outlook looking stable, brokerages have started upgrading companies here. Most of the upgrades have been of companies in the capital goods, oil and gas, infrastructure and real estate sectors.

BL

17)The Securities and Exchange Board of India(Sebi) is discussing a proposal to make it mandatory for brokers to collect margins from clients in the cash market. This is now practised only in the derivative segment.

BS

IPO

18)Oil India Ltd(OIL), the nation’s second-largest state-run explorer, is likely to launch an initial public offering(IPO) by September this year, company Chairman N M Borah said today. The company has initiated discussions with its IPO advisers to decide on the timing

BS

MUTUAL FUNDS

19)The asset base of the mutual fund industry rose sharply in May and crossed the Rs 6 lakh crore-mark as equities surged and liquidity improved. The assets under management (AUM) grew over 15 per cent to Rs 6,37,609 crore from Rs 5,51,254 crore in April, according to data released by Association of Mutual Funds in India(AMFI). This is the steepest monthly rise recorded since the market fall in January 2008.

BL

20)After missing out on the initial leg of this three-month rally in stocks, equity mutual funds have managed to catch up in May. They generated an average return of 31 per cent in May against the Sensex gain of 28 per cent. The post-election spurt ensured a 71 percent gain in equity fund NAVs(averaged) from their March lows.

BL

21)After stocks and land, gold has caught the attention of mutual funds, which are bracing up to tap India’s craze for the yellow metal by launching gold funds. Several top mutual fund companies are planning new gold funds and fund of funds that would invest in gold, gold ETFs(exchange traded funds) and even in gold mining companies.

DC

22)Japan’s Nomura Group is set to acquire 35 per cent in LIC Mutual Fund, India’s seventh largest mutual fund, after the board of directors of Life Insurance Corporation(LIC) approved a proposal to induct the Japanese financial services major as a strategic partner in the mutual fund business, sources in the state-owned life insurer said.

BS

COMMODITIES

23)Gold edged higher in Europe on Tuesday, recovering from earlier losses, as dealers remained wary about the outlook for the dollar which hit its lowest level this year in the last session. New dollar weakness could spark buying of bullion as a hedge against currency weakness, analysts said. Spot gold was bid at $975.40 an ounce, against $973.95 an ounce late in New York on Monday.

BS

REAL ESTATE

24)Signing of new commercial deals in metros is seeing signs of revival in the first quarter of the financial year 2009-10. Taking advantage of the soft-scenario on real estate deals and incoming supply, corporates are finding it of an advantage to do deals in this area.

FE

INTERNATIONAL

25)GENERAL Motors Corp won court approval on its first day in bankruptcy to sell assets as soon as next month after collapsing under $172.8 billion in debt and failing to adapt to consumer demands for smaller cars.

FE

26)Morgan Stanley, the sixth-largest US bank by assets, plans to raise $2.2 billion by selling common stock to help repay a government cash infusion. The capital will satisfy regulators’ requirement that banks tap the equity markets before they can repay bailout money received under the Troubled Asset Relief Programme, New York-based Morgan Stanley said on Tuesday in a statement.

FE

27)Crude oil fell for the first time in seven days after the Organisation of Petroleum Exporting Countries and Russia raised production in May. OPEC oil output climbed 1.5 per cent to an average 28.15 million barrels a day last month, according to a Bloomberg survey. Russia’s oil production in May advanced for the third straight month, a government report showed. Crude oil for July delivery fell 28 cents, or 0.4 per cent, to $68.30 a barrel at 10:53 am on the New York Mercantile Exchange.

BL

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