Date: 26 June 2009
Thought for the day
“The chains of habit are generally too small to be felt until they are too strong to be broken.”
– Samuel Johnson
1)India and Sri Lanka are set to energise their relations. Literally. The two neighbours will soon sign an MoU to study the feasibility of laying an undersea cable, which will be one-of-its-kind in Asia when completed, to connect their power networks. Sources said the MEA has approved the draft agreement, which is to be signed shortly.
2)DRIVEN by higher prices of food items like pulses, cereals, milk, and fruit and vegetables, inflation rose marginally to minus 1.14% against -1.61% in the previous week. The wholesale price index stood at 11.80% during the corresponding week a year ago. The index was 234.2 points for the week ended June 13 from 236.9 in the same week a year ago. India possibly is the only major economy moving into a deflationary zone though the European region is near zero level due to recessionary pressures. However, the Reserve Bank governor D Subbarao last week had said there is no threat of deflation as food and crude oil prices are still firm and India does not suffer from demand constraints.
CORPORATE / INDUSTRY
3)THE KK Modi Group is looking to acquire a Hong Kong-based tobacco company for an estimated $15-20 million, said a person with direct knowledge of the development. The tobacco firm being targeted is primarily into the business of cigars and caters to high-end consumers. It also has some cigarette brands in its portfolio.
MONEY & BANKING
4)THE rupee ended flat on Thursday, a day after the Federal Reserves laid out a positive outlook for the American and global economy. The rupee ended at 48.60 against the dollar, four basis points weaker than Wednesday’s close. On Tuesday it had fallen to 48.90, its lowest since May 15.
5)Amid industry’s demand for interest rate cuts, the Reserve Bank of India(RBI) will come out with the first quarter review of Monetary Policy on July 28. “RBI Governor D Subbarao will release the first quarter review of Monetary Policy 2009-10 on July 28,”the central bank said in a release today.
6)State-owned lender, IDBI Bank, has slashed its benchmark prime lending rate(BPLR) keeping in view the current interest rate environment and decided to reduce it by 25 basis points to 12.75%,
with effect from 1 July,2009. The reduction will apply to all the loans linked to BPLR including home loans.
7)UNIT linked insurance plans(Ulips), one of the hottest products in a bull run, could become more attractive for retail investors. Insurance regulator Irda is looking at a 500 basis point cut on the charges that are levied by insurance companies on Ulip investments. This will make the product more attractive by increasing the return.
8)AEGON Religare Life Insurance, one of the newest entrants in the life insurance market, plans to pump in Rs 230 crore into the company during this year. The company had initially started operations
in July last year with an initial investment of Rs 350 crore.
9)Widespread selling in auto and some other stocks, including Reliance Industries, offset gains from short-covering on the expiry of the June derivatives contracts as shares closed lower on Thursday.The BSE Sensex, fell 0.5 per cent, or 77.11 points, to close at 14,345.62. The trade was range-bound but volatile as the index swung between 14,261.14 and 14,578.46. “The markets are going through the motions,” said Mr Arun Kejriwal, Director of KRIS Pvt Ltd. ‘The roll-overs to the next month’s contracts are low, which goes to show that people are not that gung-ho about the markets as they were earlier.” On the NSE, the 50-stock S&P CNX Nifty index fell 1.2 per cent, or 51.10 points, to 4,241.85. Participants said expectations of below-normal monsoon rains this year also weakened the market sentiment.
10)SAMTEL Color shares have been steadily on the rise after the finance ministry last month slapped an anti-dumping duty on colour television picture tubes imported from Malaysia, Thailand, China and South Korea. On Thursday, the stock rose 2.2% to close at Rs 16.60, with nearly 72,000 shares changing hands on the BSE, compared with the two-week daily average volume of around 55,000
11)WEALTHY stock traders – those who missed out the post-election result rally and the handful who tasted success – are trying to ensure that they have a winning formula ready to cash in on the post-Budget swing in stock prices. These players are creating trading combinations in equity options that will help them capture extreme movements on either side.
12)The NSE’s revised market lot size (downsizing) for 141 stocks in the F&O segment would take effect from Friday. Among them are Ashok Leyland, Bajaj Auto, HDIL, JP Associates, LIC Housing Fin, M&M, Maruti Suzuki, Tata Motors, Tata Chemicals, Tata Steel, Suzlon, Unitech, Wipro and YES Bank.
13)ASIA’S oldest bourse Bombay Stock Exchange has revived its plans to go public. The exchange will soon file the IPO document with Sebi. According to sources, investment bank Kotak Mahindra Capital will advise the exchange in preparing the document.
14)With the NSE Nifty index moving to the free float market cap from Friday, mutual funds which have index funds are rushing to realign their portfolios accordingly. The NSE had announced in March that
the Nifty index would be calculated using the free-float method from June 26. The index weightage currently is being calculated using the constituent companies’ market caps. Free-float market capitalisation takes into consideration only those shares issued by the company that are readily available for trading in the market.
15)Sahara Mutual Fund on Thursday announced the launch of its new scheme, Sahara Super 20 Fund. It is an open-ended growth scheme with the objective to provide long term capital appreciation by investing in predominantly equity and equity-related securities of around 20 potentially attractive companies selected out of the top 100 largest market capitalisation companies, at the point of investment.
16)COMMODITY exchanges MCX and NCDEX have announced for the second time in as many months a special margin – an amount traders have to pay for taking long-term positions – to contain price rise in potato futures. A special margin of 20% is levied on futures contracts in potato with effect from June 27, MCX and NCDEX said in a separate circulars.
17)Gold rose on Thursday, heading towards $935 per ounce as investors found support from the US Federal Reserve indicating that it was in no hurry to raise borrowing costs from ultra-low levels. Spot gold stood at $932.80 per ounce at 1102 GMT, up from $931.10 quoted late in New York on Wednesday.
18)Three weeks after celebrating his 55th birthday, Infosys co-founder Nandan Nilekani will step down from the board of Infosys Technologies,of which he is co-chairman, on 9 July to take over as chairman of the Unique Identification Authority of India(UIDAI), the government’s ambitious project to provide every citizen with a unique biometric identity card. Nilekani, who was selected by Prime Minister Manmohan Singh, will hold a post equivalent to the rank of a Cabinet minister.
19)Patni Computer Systems is in the midst of a major transformation exercise. Over the next 18 months, the company wants to increase its presence in certain verticals in the market and build a strong (intellectual property) IP base. The company has set a target of being among the top five IT companies in India and in this regard a business strategy review meet has been planned.
20)Crude oil rose after militants attacked a Royal Dutch Shell Plc pipeline supplying an export terminal in Nigeria, Africas largest producer. Prices retreated from the days highs after a government
report showed that the number of Americans filing claims for unemployment unexpectedly increased last week. Crude oil for August delivery rose 63 cents, or 0.9 per cent, to $69.30 a barrel at 9:24 a.m. on the New York Mercantile Exchange.
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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