Headlines (03 July 2009)

Date: 03 July 2009

Thought for the day

“Ideas without action are like being all dressed up with no place to go.”

 –Harvey Mackey

 GENERAL

 1)With the United Progressive Alliance government back in power for a second term in office, with a thumping mandate and without any encumbrances, the pre-Budget ‘Economic Survey 2008-09 has charted out a roadmap for sweeping financial sector reforms. It also envisages an ambitious programme for public sector equity disinvestment, decontrol of sugar, fertilizers, drugs and petroleump-based fuels, opening up of the railways to private sector and easier foreign direct investment (FDI) norms in defence, retail trade and insurance. Tabled in Parliament on Thursday by Finance minister Pranab Mukherjee, the Survey noted that the worst of the global meltdown was over. A GDP (gross domestic product) growth of up to 7.5 per cent would be possible during 2009-10, it said while cautioning that financial investors could be manipulating global oil and commodity prices.

Hindu

ECONOMY

2)INFLATION stayed negative for the third week in a row, at minus 1.3% for the week ended June 20, even as prices of food like fruit and vegetables rose as compared to last year during the same period.
 This is the third week in a row that inflation remained in negative territory with the index being((-)1.14% for the week ended June 13. Inflation for the corresponding week last year stood at 11.91%, a
 time when price rise was a major cause for the government’s concern.

FE

3)The Economic Survey on Thursday sought sweeping tax reforms by way of phasing out all cesses and surcharges on taxes and elimination of various other levies such as the securities transaction
 tax (STT) and the fringe benefit tax(FBT), while advocating the introduction of a new income tax code.

Hindu

CORPORATE / INDUSTRY

4)Glenmark Pharmaceuticals has received first-to-file status for three of its abbreviated new drug applications(ANDA) that have a combined revenue of over $2 billion(about Rs 9,600 crore at current exchange rates) in the US. The company has received first-to-file status for Zetia(generic name Ezetimibe), Tarke(Trandola- pril+Verapamil) and Cutivate(Fluticasone lotion).

ET

5)Engineering major Punj Lloyd on Thursday said it has bagged three contracts worth Rs 1,873.18 crore from the Housing and Infrastructure Board of Libya for infrastructure-related works in the African nation. Under the project, the Indian firm would be responsible for the designing, procurement, installation and commissioning of utilities in three towns of Libya-Zawara, Ragdaleen and Al Jamail, it said in a filing to the BSE.

FE

6)GRANTING a lifeline to cash-strapped Maytas Infra, state-owned and private banks that lent money to the infrastructure firm approved the Rs 1,700-crore corporate debt restructuring package. The anks will now provide funds for working capital requirements, besides paring interest and extending the period of loan repayment.

ET

7)Hindalco Industries, the Aditya Birla group flagship, has decided to raise up to $500 million(about Rs 2400 crore) through a qualified institutional placement(QIP) of equity shares. The metal and mining firm took the QIP route to raise funds to meet “future growth options,” CFO Sunirmal Talukdar told ET.”

ET

MONEY & BANKING

 8)The rupee closed marginally lower due to importer buying. The dollar inflows were low and put pressure on the rupee, said a forex dealer with a private bank. The domestic currency opened higher at 47.76 and closed at 47.95, against the previous close of 47.90/92.

BL

9)LIC Housing Finance(LICHF), has slashed its interest rates for new customers. Also, it has introduced a new product – a 3 year ‘Fix-o-Floaty’ scheme effective from Thursday, which offers flexibility to customers as well as protection against the volatilities of interest rate movement. Under this scheme, the borrowers will pay a fixed interest rate of 8.9% for loans upto Rs 75 lakh and 9.5% for loans above Rs 75 lakh for a period of 3 years and thereafter a floating rate prevailing at the end of 3 years.

FE

INSURANCE

10)The Economic Survey 2008-09 has suggested a way out “to dispel the fears over foreign equity” in insurance. Apart from hiking the foreign direct investment(FDI) limit in the insurance sector from 26 per cent to 49 per cent, the survey said 100 per cent foreign equity should be allowed in a special category of insurance companies that provide all types of insurance such as health and weather to rural residents, and for all agriculture-related activities including agro-pro-cessing.

BS

11)WITH stock market bouncing back in the country, the life insurance policy holders are now more keen to buy equity-linked Ulip products. For the private sector life insurer, ICICI Prudential,investors are opting more for the equity-linked ULIP products than the debt-linked ones. This shift in buying behaviour has been observed by the insurer during past few months.

FE

12)Life Insurance Corporation of India has launched a unit-linked plan called Jeevan Saathi Plus. Under the plan, couples can take life cover under a single policy and enjoy the benefit of market- linked returns, a press release issued by the corporation said.

BL

MARKETS

13)Ignoring some of the positive cues in the Economic Survey for 2008-09, the Sensex ended flat at 14,658(up 13 points) on Thursday. The index was trading up more than 100 points till mid-day before
 it started its descent, post the release of the Survey. The broader Nifty ended 0.18 per cent up at 4,348 points. Marketmen, some of whom described the Survey as “rather ambitious”, said that inves-
 tors are waiting for Monday’s Budget to see what actually the government would do.

BL

14)Nearly 80 stocks on the BSE today witnessed an unusual price movement of up to 20 per cent. Belonging to ‘S’ and ‘Z’ categories and the trade-to-trade group, these scrips normally attract 5per cent circuit breakers.

BS

15)Longer trading hours apart, market intermediaries may soon have to get used to fewer trading holidays as well. Responding to feedback from the industry, market regulator Sebi is learnt to be considering a proposal for reduction in the number of trading holidays. The move is said to be the next step in a adopted to international best practices. People familiar with the development said it made sense to rationalise the holiday structure at a time when there is a view to extend trading hours.

ET

16)The Economic Survey has recommended a slew of measures for bringing transparency to and deepening the Indian stock markets. For integrated development of financial markets, it said all regulations should be brought under the Securities and Exchange Board of India (Sebi). This recommendation, if implemented, would enhance Sebi’s powers, whereby it can have a say over insurance and commodities as well.

BS

MUTUAL FUNDS

17)The mutual fund industry’s assets continued to grow in June. The average assets under management grew(AAUM) from Rs 639,129.81 crore to Rs 670993.10 crore, a rise of 5 per cent, or Rs 31,863.32 crore. Market experts attributed this to a sharp rise in inflows in liquid and debt schemes. Assets of equity schemes increased mostly due to rise in stock prices. High liquidity in the system also helped mutual funds as they were able to garner excess funds.

BS

18)The recent move by the Securities and Exchange Board of India(Sebi) to scrap entry load for mutual fund distributors might see changing business models in wealth management. Wealth managers are likely to increasingly move to an advisory-based fee model from the commission structure earlier. While Sebi does not prohibit charging commission from investors, wealth managers say the industry will now move from pushing products to charging clients on the basis of advice.

BS

COMMODITIES

19)The Economic Survey for 2008-09 has recommended the agenda for reforms in the commodity market. It has favoured regulation of the commodity futures market by the Sebi, lifting of ban on futures trading of rice, tur and urad, extension of spot commodity trading in electronic form to agricultural markets by involving APMCs and complete removal of the commodity transaction tax(CTT).

BS

20)Gold fell below $930 an ounce on Thursday as the dollar rose versus a basket of currencies after a larger than expected dip in US non-farm payrolls, which prompted some buying of the currency as a haven from risk.

BL

REAL ESTATE

21)SALES slowdown, stagnating capital values and a need to manage resources better are pushing Indian realty firms to invest in technology that will help them achieve optimum productivity, information
 access and regulatory compliance. End-to-end ERP solutions, that manages diverse projects across diverse locations, are slowly finding favour. ERP vendors are seeing increased enquiries pushing
 them to develop tailored solutions targeted at mid-market realty firms.

ET

22)BANGALORE-based realty major Brigade Enterprises is looking at raising capital through the private equity route to spearhead hotel projects under subsidiary firm Brigade Hospitality Services. The firm has mandated JP Morgan for the fund raising exercise.

ET

INFORMATION TECHNOLOGY

23)Kavveri Telecom Products Ltd, a maker of antennas and radio frequency (RF) products for the wireless industry, has acquired a 67 per cent stake in Canada-based design and development firm,
 Trackom Systems International, for an undisclosed sum.

BL

24)Satyam Computer Services (now renamed Mahindra Satyam) may have brought some disgrace to the IT fraternity in India and its founder Ramalinga Raju may be still languishing in prison. But, Satyam still topped the list of exporters from the Software Technology Parks of India(STPI) and IT SEZs in Andhra Pradesh for 2008-09.

BL

FOR MORE INFORMATION, PLEASE BROWSE THROUGH THE FOLLOWING SITES.

Karvy Consultants Ltd www.karvy.com
 www.khojhyderabad.com
 www.indiacorporateadvisor.com
 www.karvycomtrade.com (Commodities)
KARVY Global Services Ltd www.KARVYGlobal.com
KARVY Realty (India) Limited www.karvyrealty.com
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

Trading Tip

FOR THE DAY: The indices are expected to open on a negative note backed by weak moves in the US markets while, the Asian indices are also trading negative.

Trade long in the Nifty from 4280 levels with a stop loss placed at 4250 levels.

Nifty has a crucial resistance placed at 4200 levels which if breached below; short positions may be assumed for carry forward, speculative shorts may be taken if Nifty fails to break past 4340 levels targeting lower supports with a stop loss placed above 4360 levels.

Investors are advised to remain cautious ahead of the big event.