Monday, 6 January 2014

Benchmarks end lower for fourth straight day

Indian equity benchmarks continued their southward journey for fourth straight day with both the frontline gauges ending the session below their crucial 20,800 (Sensex) and 6,200 (Nifty) levels amid weak global cues. It turned out to be a lethargic day of trade for Indian equity markets where bourses traded mostly in the red during the session in a tight band. Sentiments remained dampened after activity in India’s services sector shrank at a faster pace in December as new orders dwindled, surprisingly, despite this firms hired at their fastest pace in five months. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 46.7 in December from 47.2 in November.

Global cues too remained subdued with Asian markets ending mostly lower after growth in China’s services sector slowed sharply last month, and Japanese Nikkei had endured a rocky first day of 2014 trading as the jitters prompted its biggest drop in over two-months. Moreover, European markets, after a negative start, turned flat in early deals as investors digested a raft of services sector data that shed additional light on the divergence between top economies Germany and France as well as the gradual recovery in Italy and Spain.

Back home, some concern came in after a study report by industry body Assocham, said that uncertainty over the outcome of the upcoming Lok Sabha elections is likely to cast a shadow on the economy. Sentiments also remained somber after the rupee depreciated and was trading at 62.31 per dollar at the time of equity markets closing versus its close of 62.16 on Friday tracking the dollar’s broad gains versus major currencies. Meanwhile, shares of power producers like Tata Power and Reliance Infrastructure slipped on reports that Maharashtra is planning to cut tariffs by around 15 per cent.

However, losses remained capped after gross direct tax collections rose 12.33% to Rs 4.81 lakh crore during the first nine months of this financial year. Direct tax collections totaled Rs 4.29 lakh crore during the April-December period in 2012-13. Some support also came in from rally in sugar stocks like Shree Renuka Sugars, Bajaj Hindusthan, Balrampur Chini, Triveni Engineering etc. after the government has notified the modalities in order to avail the sector with interest-free loans to the tune of Rs 6,600 crore from banks for payments to cane growers. Shares of public sector Oil marketing companies (OMCs) too remained on buyers’ radar after hiking petrol and diesel prices by 75 paise and 50 paise a litre, respectively. Petrol price, which was last hiked by 41 paise excluding VAT on December 21 as government hiked the commission to be paid to petrol pump dealers, will now cost Rs 72.43 a litre in Delhi, up 91 paise from Rs 71.52 current.

The NSE’s 50-share broadly followed index Nifty slipped by twenty points to below its psychological 6,200 level, while Bombay Stock Exchange’s sensitive Index -- Sensex dropped by over sixty points to end below the psychological 20,800 mark.

Broader markets, however, outperformed benchmarks and ended the session with gain of around half a percent. Moreover, the market breadth remained in favour of advances, as there were 1,477 shares on the gaining side against 1,036 shares on the losing side, while 159 shares remained unchanged.

Finally, the BSE Sensex plunged by 64.03 points or 0.31%, to settle at 20,787.30, while the CNX Nifty lost 19.70 points or 0.32% to settle at 6,191.45.

The BSE Sensex touched a high and a low of 20,913.79 and 20,721.98, respectively. The BSE Mid cap index was up by 0.35%, while the Small cap index gained 0.95%.

The top gainers on the Sensex were ONGC up 1.92%, Sun Pharma up 1.41%, Tata Motors up 1.14%, TCS up 0.79%, and HDFC up 0.63%, on the flip side Tata Power down 2.56%, ICICI Bank down 2.46%, SBI down 1.66%, Hero MotoCorp down 1.45%, and Infosys down by 1.44%,were the top losers on the index.

On the BSE Sectoral front Healthcare up by 0.48%, FMCG up by 0.44%, Auto up by 0.20%, Capital Goods up by 0.14%, and Consumer Durables up by 0.03%, were the top gainers, while Bankex down by 1.13%, Realty down by 0.71%, IT down by 0.49%, Power down by 0.41%, and Teck down by 0.34%, were the top losers on the sectoral front.

Meanwhile, in order to speed up the implementation of ultra-mega power projects, the Environment and Forests Ministry has issued a notification that power stations of such projects will no longer be linked to clearance of their captive coal blocks.

As per the earlier rule, mines and power stations were considered a single component for green clearances and until a coal block received stage-I forest clearance, the power plant could not apply for environmental approvals. Such delays in getting approval for a mine impacted the commissioning of the power plants further.

Power Ministry has been urging the Environment Ministry to change the procedure for forest clearance. Meanwhile, Power Finance Corporation (PFC) has invited bids for the 4,000 MW project at Bedabahal in Odisha, which is likely to be awarded in February. Nine power developers including Jindal Steel, Power, Tata Power, NTPC and Adani Power are in the fray to bag the 4,000 MW power plant at Bedabahal, which will use domestic coal from three major coal blocks in region such as Meenakshi, Meenakshi-B and dip side of Meenakshi.

The CNX Nifty touched a high and low of 6,224.70 and 6,170.25 respectively.

The top gainers on the Nifty were ONGC up by 1.90%, Jindal Steel & Power up by 1.70%, Sun Pharmaceuticals Industries up by 1.48%, Tata Motors up by 1.25%, and Lupin up by 0.76%, On the other hand, Tata Power Company down by 2.74%, ICICI Bank down by 2.23%, Bank of Baroda down by 2.13%, State Bank of India down by 2.01%, and Hero MotoCorp down by 1.57%, were the top losers.

Most of the European markets were trading in green, France's CAC 40 was up by 0.02% and Germany's DAX was up by 0.03%, while, United Kingdom's FTSE 100 was down by 0.17%.

The Asian markets barring Seoul Composite concluded Monday’s trade in red, with Japanese stocks falling sharply on their first day of trading in 2014. Chinese stocks were also weaker, as the impact of a reopened initial-public-offering market continued to weigh on local sentiment. A year-long moratorium on new listing was lifted earlier in the year, reviving fears that too many new stocks could hit the market. HSBC’s China services Purchasing Managers’ Index also weighed on sentiment. The gauge of expansion intentions in the services sector fell to 50.9 in December from 52.5 in November. This followed numbers released last week that showed a deceleration in both China manufacturing and services sectors.

Indonesia’s Finance Minister stated that economy contracted by 1.4 to 2.0 percent in the fourth quarter from the previous three months, though full-year growth was 5.7 percent. The minister also added that current-account deficit, which has been a major worry for investors, will be 3.5-3.7 percent of gross domestic product (GDP) in 2013 and decline to 2.7-3.2 percent in 2014. Indonesia’s consumers grew more optimistic in December, indicating an improvement in wages and domestic consumption. The consumer confidence index rose to 116.5 in December, compared with 114.3 in November.

Asian Indices
Last Trade
Change in Points
Change in %
Shanghai Composite
2045.71
-37.43
-1.80
Hang Seng
22684.15
-133.13
-0.58
Jakarta Composite
4202.81
-54.85
-1.29
KLSE Composite
1829.18
-5.56
-0.30
Nikkei 225
15908.88
-382.43
-2.35
Straits Times
3123.82
-7.65
-0.24
KOSPI Composite
1953.28
7.14
0.37
Taiwan Weighted
8500.01
-46.53
-0.54

Sika Interplant System bags new orders worth Rs 24 crore

Sika Interplant System, a technology driven company focused on the Aerospace & Defence sector, has secured new orders approximately worth Rs 24 crore for advanced engineering products and services during last quarter (Q3 / FY13-14).

With these contracts, the order backlog for Sika Interplant Systems has now gone up to around Rs 33 crore, reflecting the total value of unexecuted orders as on 31st December 2013.

Sika Interplant Systems incorporated in 1985, is an engineering company in projects, systems, products and engineering services for aerospace, space, marine, automotive and core industries.

Polaris wins the Data Security Council of India Excellence Award 2013

Data Security Council of India (DSCI) has selected Polaris Financial Technology as the winner of the 2013 DSCI Excellence Award in Security in IT Services (Large) category. The award was given in recognition of Polaris' excellence in the area of Information Security and for establishing innovative security processes for its corporate clients. The award was presented at the NASSCOM - DSCI Annual Information Security Summit 2013 held in New Delhi.

Polaris is a full-spectrum Financial Technology major, using technology as an enabler to drive unprecedented operational productivity in Retail, Corporate and Investment Banking. Polaris services over 200 banks across the world, including 9 of the top 10 banks, with a comprehensive suite of products, services and consulting offerings.

FDI in Indian pharma sector increases by 86.5% to $1.08 billion during April-October’ 2013

Amid rising concerns over increasing acquisitions of domestic pharma firms by multinationals, Foreign Direct Investment (FDI) in the pharma sector grew by 86.5 percent to $ 1.08 billion during April-October period of current fiscal as compared to $ 580 million during the same period last year.

The Department of Industrial Policy and Promotion (DIPP) had proposed the norms to arrest the increasing foreign investment in domestic pharma firms as it is of the view that continuing acquisitions of Indian pharma firms by foreign companies would pose serious problems in availability of life-saving drugs to consumers in near future. Meanwhile, the DIPP proposal to reduce FDI cap to 49 percent in critical verticals from 100 percent was rejected by the Union Cabinet. DIPP also wants to restrict FDI in brown-field or existing pharma companies amid concerns that such acquisitions could shrink India’s capacity of producing low-cost generic drugs. During the period from April 2012 to April 2013, over 96 percent of the total FDI in the sector has come into brown-field pharma, reflecting meager growth in FDI in pharma green field projects. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.

Meanwhile, overall FDI into the country has declined by 15 percent to $12.6 billion during the seven month period of the current fiscal. Other sectors which received high FDI during the period include services ($1.36 billion), automobile ($784 million), construction ($699 million) and chemicals ($433 million).

Govt notifies guidelines for interest-free loans to sugar mills

With a view to improve liquidity position of beleaguered sugar industry, the government has notified the modalities in order to avail the sector with interest-free loans to the tune of Rs 6,600 crore from banks for payments to cane growers. The Food Ministry in its notification has stated that notified scheme for extending financial assistance to sugar undertakings 2014 will enable the industry to clear cane price arrears of previous seasons and timely settlement of cane price of current season.

The Cabinet Committee on Economic Affairs (CCEA) had approved Rs 6,600 crore loans for the cash-starved sugar mills last month. The interest burden on the loans is estimated at Rs 2,750 crore during the next five years and will be borne by the government from the Sugar Development Fund. The notification further added that interest subvention rate up to 12 percent, whichever is lower as per normal banking practice, shall be provided to sugar mills through participating scheduled commercial banks, regional rural banks and cooperative banks for five years.

The government will release interest subvention amounts on a quarterly basis in advance to the nodal bank, while, loan will be disbursed through a separate bank account to ensure the utilisation of money is monitored. On the other hand, in order to get loans, sugar mills will have to submit an utilisation certificate, verified by the sugarcane commissioner, stating the loan has been used for the specified purpose and state sugarcane commissioner will monitor utilisation of the loan. Furthermore, sugar mills with loans classified as non-performing assets by banks will be eligible for the credit provided the state governments concerned guarantee their new loans.

Further, Food Ministry notified that mills have to repay the loans in five years and can avail of a moratorium on repayment for the first two years. Loans will be given to sugar mills that have been functional during the 2013-14 (October-September) and the quantum of loan would be equivalent to the excise duty, cess and surcharge on sugar paid by the mills in the past three years. Meanwhile, Finance Ministry will soon issue instructions to banks to operationalise the scheme, including the appointment of the nodal bank.

McNally Bharat strengthens on bagging orders worth Rs 14.16 crore

Mcnally Bharat Engineering Company is currently trading at Rs. 59.35, up by 1.30 points or 2.24% from its previous closing of Rs. 58.05 on the BSE.

The scrip opened at Rs. 58.00 and has touched a high and low of Rs. 59.90 and Rs. 57.50 respectively. So far 15602 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 104.70 on 09-Jan-2013 and a 52 week low of Rs. 37.00 on 07-Aug-2013.

Last one week high and low of the scrip stood at Rs. 61.40 and Rs. 57.00 respectively. The current market cap of the company is Rs. 180.34 crore.

The promoters holding in the company stood at 32.28% while Institutions and Non-Institutions held 14.37% and 53.35% respectively.

McNally Bharat Engineering Company has bagged orders aggregating Rs 14.16 crore. The company has bagged Operation & Maintenance of a Coal Handling Plant order for a value of Rs 9.06 crore. It has also bagged another order for replacement of Cranes at a Cargo Jetty for a value of Rs 5.10 crore.

McNally Bharat Engineering Company is one of the leading engineering companies. It provides turnkey solutions in areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply etc.

ONGC to invest $9 billion to produce oil and gas from Krishna Godavari basin

In a bid to produce oil and gas from Krishna Godavari basin, State-owned Oil and Natural Gas Corp (ONGC) will invest over $9 billion. The company has made 11 oil and gas discoveries in the Block KG-DWN-98/2, which sits next to Reliance Industries’ KG-D6 Block and Gujarat State Petroleum Corp’s Deendayal gas field.

The block is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA).

NDA holds around 92.30 million tons of oil reserves and 97.568 billion cubic meters of inplace gas reserves spread over seven fields. The NDA comprises discoveries like Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA.

Bank of India receives NFS operational excellence awards 2013

Bank of India has received the National Financial Switch (NFS) operational excellence awards 2013 -Runner Up in Public sector category at the National Payments Corporation of India (NPCI) 9th NFS User Group Meet at Mumbai. This award is given to the bank in recognition of its excellent performance in key parameters in respect of ATMs and switch connected to NFS network.

National Financial Switch (NFS) is a nationwide ATM network with major public, private sector & cooperative banks as members, which is being managed and monitored by National Payments Corporation of India.

Every year, NFS excellence award for best Bank is awarded under categories like cooperative banks, private & foreign banks and public sector banks. 

JSW Steel gains on concluding acquisition of cement grinding facility

JSW Steel, a leading industry player, has completed the acquisition of Heidelberg Cement India’s cement grinding facility situated at Raigad in state of Maharashtra. The cement grinding facility has been transferred to the company with effect from the end of business hours on January 03, 2014.

Last year in October, the company had entered into a business transfer agreement with Heidelberg Cement India for acquisition of its cement grinding facility as a going concern on a slump sale basis. Subsequently, the approval of the Competition Commission of India was sought in relation to the proposed acquisition and the Commission consented to the acquisition vide its order dated December 12, 2013.

JSW Steel is part of the JSW group which, in turn, is a part of the O P Jindal group. JSW Steel is one of the largest steel manufacturing companies in India having units in Karnataka and Maharashtra producing crude steel, long steel and flat steel products.

Vijaya Bank plans to improve CASA share to 25% of total deposits in 2 years

Vijaya Bank, the Karnataka-based bank is planning to take its CASA (current account/savings account) deposits to 25% of its total deposits in the next 2 years to bring down its costs. Currently, the bank’s CASA share is 17.83% of its total deposits. The move will also help the bank to improve its net interest margin, from the current 2.12%. Meanwhile, the bank is also planning to take the total number of Branches and ATMs to 1500 each by March 2014.

Vijaya Bank, the Karnataka-based bank offers various products and services specific to various segments such as it has saving accounts for children, scheme for women clientele, credit facilities to minority communities like Zoroastrians, Buddhists are among others.

Adani Power commissions 1,320-MW coal-fired power project in Rajasthan

Adani Power, India’s largest thermal private power producer has fully commissioned the 1,320-MW coal-fired power project in Rajasthan taking its overall electricity generation capacity to 7,920 MW. The company aims to increase its total generation capacity to 9,240 MW by the end of this fiscal.

The Kawai project has two super critical units, each having a generation capacity of 660 MW. While the first unit is operational since last year, the second one was commissioned this month. Kawai project is the largest private power plant in Rajasthan and its work was completed in three years.

Adani Power plans to add another 1,320 MW generation capacity in the current financial year ending March 2014. Its current capacity is 7,920 MW.

MOIL increases prices of Ferro grade Manganese Ore by 3% for January-March, 2014

Manganese Ore India (MOIL) has fixed price of various grades of manganese ore for the quarter January-March, 2014. The price of the Ferro grade Manganese Ore has been increased by 3% and price of SMAGR & Fines have been increased by 7.5% over the prices for October-December 2013.

Besides, the prices of Electrolytic Manganese Dioxide (EMD) have been increased by 5% over the prices for October- December 2013. The company has taken this step in line with its business practice of quarterly revising the prices of manganese ore.

MOIL is the largest iron ore company in India and fifth largest in world. It currently operates seven underground mines (Kandri, Munsar, Beldongri, Gumgaon, Chikla, Balaghat and Ukwa mines) and three opencast mines (Dongri Buzurg, Sitapatore/Sukli, and Tirodi). The company is actively involved in exploration and development activities with a view to increase its proven manganese ore reserves.

Petrol price hiked by 75 paise a litre, diesel by 50 paise

On account of rise in global oilrates and fall in rupee value, the oil marketing companies have raised Petrolprices by 75 paise and diesel by 50 paise a litre. These hikes, effective fromJanuary 3 midnight, are excluding local sales tax or VAT and actual increasewill be higher and vary from city to city. Much against the buzz of governmentholding back the hike in fuel prices on account of upcoming general elections2014. The price revision was due on January 1, 2014, but the retailers did notchange for fear of drawing flak from the public for spoiling the festive mood.

 Petrol price, which was lasthiked by 41 paise excluding VAT on December 21 as government hiked thecommission to be paid to petrol pump dealers, will now cost Rs 72.43 a litre inDelhi, up 91 paise from Rs 71.52 current. Meanwhile, the price of diesel willbe hiked by 56 paise, including tax, to Rs 54.34 per litre in Delhi and willcost Rs 61.42 a litre in Mumbai as against Rs 60.80 currently. Earlier, dieselprices were hiked by 10 paise on December 21.

Diesel price increase is in linewith the January 2013 decision of the government to raise rates by up to 50paise per month till such time that the entire losses on the fuel are wipedout. Since last January, diesel rates have risen by a cumulative Rs 7.19 thisyear.  Even after taking intoconsideration of current rate hike, under recovery (loss) on diesel shall standat Rs 9.24 per litre. Besides diesel, the state-owned oil firms are losing Rs37.33 a litre on sale of kerosene through public distribution system (PDS) andRs 762.50 per 14.2-kg domestic cooking gas (LPG) cylinder.

Markets to make a soft to cautious start of the new week

The Indian markets extended their decline in last session, though there was a good comeback in last but still the benchmarks ended the session in red. Today the start of the new week is likely to remain mildly soft-to-cautious and after weak manufacturing numbers, traders will be eyeing the Services PMI to be announced later in the day. There will be some concern with a study report by industry body Assocham, saying that uncertainty over the outcome of the upcoming Lok Sabha elections is likely to cast a shadow on the economy, adding to investor concerns. FII movement too will be watched in today’s trade, as the global fund managers would be returning to their desk after the New Year holiday. However, marketmen will be keenly eyeing the other major developments like the start of the earnings season and IIP data to be announced later in the week for further course of action. The sugar sector stocks may see some action, as the government has notified the modalities for the beleaguered sugar industry to avail of interest-free loans to the tune of Rs 6,600 crore from banks for payments to cane growers. There will be some buzz among the pharma stocks on report that FDI in the sector jumped by 86.5 per cent to $1.08 billion during April-October period of the current fiscal amid concerns over continuous mergers and acquisitions of domestic drug makers by multinationals.

The US markets ended lower in last trading session after Bernanke’s speech acknowledging that economy has a long way to go to return to normal. The Asian markets have mostly made a weak start with the Japanese market snapping its strongest rally in over four years as yen strengthened against the dollar.

Back home, extending their southward journey for third straight session, Indian equity benchmarks ended the lethargic day of trade slightly in the red on Friday. Domestic bourses traded in very tight range throughout the session as investors remained on sidelines ahead of third quarter corporate earnings, beginning on January 10, 2013 with IT major Infosys and private sector bank IndusInd Bank announcing their numbers. Sentiments remained dampened since morning on report that the government is mulling hiking the quota of subsidized LPG cylinders to 12 per household in a year from the current limit of 9, a move which on implementation would definitely increase the subsidy burden. Frontline gauges lost some more ground after Prime Minister Manmohan Singh disappointed street in his press conference as there was lack of announcement of any future trajectory to boost Indian economy. The domestic bourses witnessed some recovery in last leg of trade supported by firm opening in European markets. Back home, sentiments also remained dampened after Indian rupee depreciated to two-week low of 62.47 per dollar at the time of equity markets closing versus previous close of 62.26 per dollar. Power stocks slipped after CCEA approved the proposal to amend the policy on mega power projects. As per the proposal, power generating firms can take benefit from this policy only after fulfilling certain mandatory conditions as the developer must tie up at least 65 percent of the installed capacity through competitive bidding and remaining 35 percent of the installed capacity should be through the regulated tariff. Meanwhile, metal and mining stocks edged lower for the second day in a row after a gauge of China’s non-manufacturing industries declined. Additionally, auto stocks slide on weak December sales. Bajaj Auto registered a 13% drop in total sales to 2,97,776 units in December 2013 against 3,43,946 units in December 2012. Hero MotoCorp declined after the company reported fall of 3.07% in December sales at 5,24,990 units as compared to 5,41,615 units sold in the corresponding month last year. Finally, the BSE Sensex declined by 37.00 points or 0.18%, to settle at 20851.33, while the CNX Nifty lost 10.00 points or 0.16% to settle at 6,211.15.