Gold Holds 2-Day Decline as Investors Weigh U.S. Outlook

Gold was little changed, after falling the previous two days, as investors weighed signs of an improving U.S. economy against tension over Ukraine and in the Middle East.

The Federal Reserve concludes a two-day meeting today. Data are forecast to show the U.S. economy rebounded last quarter, and the dollar reached an almost eight-week high against 10 major currencies. Interest-rate increases may come “sooner and be more rapid than currently envisioned” if the labor market continues to improve more quickly than anticipated, Fed Chair Janet Yellen told lawmakers this month.

Geopolitical tensions helped gold gain 8.1 percent this year. The U.S. and European Union sought to put more pressure on Russia by targeting banking, energy and defense industries for sanctions in another attempt to get President Vladimir Putin to back down in Ukraine. Hamas’s military chief ruled out a truce in the Gaza Strip until Israel lifts its blockade of the Palestinian territory, as the military’s bombardment intensified.

Silver for immediate delivery rose 0.2 percent to $20.6073 an ounce in London. Platinum was little changed at $1,480.88 an ounce. Palladium rose 0.3 percent to $882.64 an ounce. It reached a 13-year high of $889.75 on July 17.

Platinum and palladium have gained this year as restricted output from a five-month mine strike that ended in June in South Africa, the biggest platinum producer, and rising usage in cars added to supply shortages. Russia is the top palladium supplier, with South Africa the next largest.

Sony to de-list shares from London Stock Exchange

Sony said on Wednesday it would de-list its shares from the London Stock Exchange after 34 years because of thin trading volume, following a series of pullouts by other Japanese firms. 

The consumer electronics giant, which said its stock would still trade in Tokyo and New York, was listed in London in 1970. 

The changes would happen around the end of August, it said. "The listing of our shares on the London Stock Exchange has become less  economically ratiol because of low trading volume," a company spokesman said. 

Sony is undergoing a painful restructuring and is expected to remain in the red for another year after booking a $1.26 billion loss for the latest fiscal year. 

Other Japanese companies, including Toshiba, Fujitsu and mobile carrier NTT Docomo, have withdrawn from the London market as they seek to cut costs associated with listing shares on an exchange where there is little investor appetite. 

Rio Tinto pulls plug on ill-fated Mozambique coal venture

 Rio Tinto (RIO.L) (RIO.AX) has agreed to sell coal assets it bought through its $4 billion acquisition of Riversdale in 2011 for just $50 million to an Indian joint venture, ending its ill-fated venture in Mozambique's coal sector.

The sale, to International Coal Ventures Private Limited (ICVL), includes the Benga coal mine and other projects in Tete province.

In 2013, Rio Tinto sacked its chief executive and other executives directly involved in the acquisition of Riversdale and wrote off about $3.5 billion of the purchase price, partly owing to a failure to secure a permit to move coal by barge down Mozambique's Zambezi River.

"It has clearly been a horrible experience for Rio Tinto," said Liberum analyst Richard Knights, adding that the sale price was lower than he expected and implied a further writedown.

"The assets clearly weren’t as good as they thought but in order for them to be written down that aggressively they must have seen very little scope in the foreseeable future for the profitable export of coal from Mozambique."

A source familiar with the sale said Rio Tinto had been reviewing the division for the past 18 months.

ICVL was set up by the Indian government for the acquisition of coal assets overseas to meet the needs of some state-owned companies such as Steel Authority of India Limited, Coal India Limited, Rashtriya Ispat Nigam Limited, National Minerals Development Corporation Limited and National Thermal Power Corporation Limited.

The sale is subject to certain conditions and to regulatory approvals and is expected to be completed in the third quarter this year, Rio Tinto said.

Crude palm oil futures marginally up on spot demand

Crude palm oil prices marginally up by Rs 1.30 to Rs 522.50 per 10 kg in futures trade today as speculators created fresh positions on the back of rising spot demand. 

On the Multi Commodity Exchange, crude palm oil for August delivery rose by Rs 1.30, or 0.24 per cent, to Rs 522.50 per kg, with a trading volume of 39 lots. 

Similarly, the oil for delivery in July moved up marginally by 0.80 paise, or 0.14 per cent, to Rs 540 per 10 kg, with a business turnover of 116 lots. Analysts said fresh positions built-up by speculators driven by rising spot demand, mainly led to the rise in crude palm oil prices at futures market. 

Bank of Baroda Q1 profit beats forecast, up 17%; NPA rises

Net interest income, the difference between interest earned and interest expended, grew 15.2 percent, higher-than-expected, to Rs 3,328.3 crore during the same period while other income (non-interest income) declined 16.7 percent on yearly basis to Rs 1,024.54 crore in the quarter gone by.

Public sector lender  Bank of Baroda  suprassed street expectations with the first quarter (April-June) net profit rising 16.6 percent at Rs 1,362 crore compared to Rs 1,167.9 crore in same quarter last year on account of lower provisions but impacted by lower other income and higher tax expenses.

Net interest income, the difference between interest earned and interest expended, grew 15.2 percent, higher-than-expected, to Rs 3,328.3 crore during the same period while other income (non-interest income) declined 16.7 percent on yearly basis to Rs 1,024.54 crore in the quarter gone by.

The bank has cash recovery of Rs 564 crore during June quarter while write-offs were Rs 493 crore and upgrades at Rs 741 crore for the quarter. During the quarter, Bank of Baroda sold financial assets with net book value of Rs 185.54 crore to asset reconstruction companies on cash and security receipt basis. Provisions fell significantly to Rs 527 crore in first quarter of current financial year compared to Rs 1,153 crore in previous quarter and Rs 1,018 crore in corresponding quarter of last fiscal. Provision coverage ratio of the bank was 66.68 percent as on June 2014. The bank said it has made provision at 20 percent on the secured sub-standard advance as against the regulatory requirement of 15 percent. "The bank has made additional ad-hoc provision of Rs 340.56 crore for the quarter in certain non-performing domestic advance accounts," it added. Capital adequacy ratio (as per Basel III norms) declined to 11.91 percent in June quarter from 12.28 percent in March quarter and 12.46 percent in same quarter last year. Tax expenses more than doubled to Rs 591.01 crore during April-June quarter from Rs 250 crore in corresponding quarter of last fiscal.

Oil prices ease in Asian trade

Oil prices eased in Asia Wednesday as dealers stood on the sidelines awaiting the latest US stockpiles report for clues about demand in the world's top crude consumer, analysts said. 

US benchmark West Texas Intermediate for September delivery fell six cents to $100.91 and Brent crude for September was down 34 cents at $107.38 in late-morning trade. 

"Oil prices are quiet at the moment with investors focusing on the US stockpiles data out later in the day," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP. 

Reserves are expected to have fallen by 1.8 million barrels on average in the week to July 25, according to analysts polled by the Wall Street Journal. 

Gasoline stockpiles are expected to have risen 800,000 barrels, while stocks of distillates, which include heating oil and diesel, are also expected to have increased by one million barrels. 

Refinery use is expected to fall by 0.2 per centage points to 93.6 per cent of capacity. 

Sesa Sterlite Q1 net profit at Rs3755.60 mn

otal Income is Rs. 184668.80 million for the quarter ended June 30, 2014 where as the same was at Rs. 3842.00 mn for the quarter ended June 30, 2013.

Sesa Sterlite Ltd has posted a net profit after taxes, Minority Interest & Consolidated Share of Profit / (Losses) of Associates of Rs. 3755.60 mn for the quarter ended June 30, 2014 where as the same was of Rs. 4143 mn for the quarter ended June 30, 2013. Total Income is Rs. 184668.80 mn for the quarter ended June 30, 2014 where as the same was at Rs. 3842.00 mn for the quarter ended June 30, 2013. EBITDA margins at Aluminium business continued to improve due to higher premiums and cost control; Zinc India was impacted adversely by higher costs coming from lower volume; Cairn India was also lower due to profit petroleum increase. On an overall basis, while favourable oil prices, LME, premiums, and currency depreciation helped increase EBITDA, lower volumes in Zinc & Power, higher COPs, higher profit petroleum, and Australian mines closure resulted in a modest EBITDA increase of 3.5%. Sequentially, EBITDA was lower by Rs. 995 crore primarily due to lower volumes as explained above. EBITDA margin was marginally higher thus helping offset some of the effect of lower volume. Depreciation and amortisation have increased in Q1 by Rs. 178 crore to Rs. 2,064 crore over Q1 FY2014, most of the increase due to higher depreciation charge in Cairn India on account of change in depreciation method from Straight Line Method (SLM) to Unit of Production (UOP) on tangible assets. There was lower amortisation of goodwill due to lesser production in Zinc International & Australian mines, which was more than offset by the depreciation increases. The depreciation and amortisation for the quarter is lower than Q4 FY2014 by Rs. 329 crore, due to higher goodwill amortisation charge at Lisheen mine in Q4FY2014. In the quarter, finance cost was marginally lower at Rs. 1,537 crore than in proforma Q1 FY 2014, reflecting refinancing benefits. This is also in line with Q4 FY 2014. In Q1, other income at Rs 1,139 crore increased by Rs. 539 crore compared to the corresponding prior quarter. The increase was mainly on account of higher maturities of investments in Fixed Maturity Plans (FMPs) at Zinc and Cairn India, as income is recognized at maturity of FMP’s due to partial adoption of AS 30. The higher current quarter maturities also led to an increase of Rs 375 crore sequentially over Q4FY 2014. Thus, net interest was lower in current quarter as compared to corresponding previous quarter as well as sequentially, largely due to higher other income. Due to change in closing currency rate, there was a forex gain of Rs. 141 crore in this quarter, mainly at Cairn India driven by their dollar denominated investments & trade debtors.

China Takes on Hitachi as Rare Earth Patent Ends

Some Chinese producers of rare-earth magnets are seeking to use this month’s expiry of a key patent held by Hitachi Metals Ltd. (5486) to expand exports of the micro magnets used in products from motors to smartphones.

The expiry of a 17-year-old patent that defines the structure of such magnets paves the way for previously blocked Chinese producers to sell to U.S. customers, said Sun Baoyu, chairman of Shenyang General Magnetic Co. It’s formed an alliance with six Chinese producers to promote their products and fight Hitachi over other patents, that the Japanese company says largely prevent rivals from making magnets.

“Hitachi’s whole patent package’s base is this ingredient patent,” said Li Weifeng, a Shanghai-based analyst with Everbright Securities Co. It is a “very basic” patent for the magnets, he said.

The end of the patent will pit the seven producers in the alliance and potentially others who try to tap into the market against Hitachi and eight Chinese companies that have paid for the right to make and ship the magnet. An increase in exporters of the magnets could cut prices of the product used in Apple Inc. (AAPL)’s iPhones and Toyota Motor Corp. (7203) hybrid-electric cars.

Hitachi holds more than 600 patents for rare-earth magnets globally, some of which it acquired after taking over Sumitomo Special Metals Co. in the 2000s, said spokesman Akio Minami

Piramal, Dutch APG tie up for $1 bln infra investment

Piramal Enterprises Ltd (PIRA.NS) has tied up with Dutch pension fund APG Asset Management to invest $1 billion in Indian infrastructure companies over three years, in a move that would help indebted firms access funds to complete projects.

A sluggish economy and stalled bureaucratic decision-making for the past two years thwarted capital investment and dented earnings, making it tough for infrastructure companies to raise funds and launch or complete road and power projects.

Piramal, controlled by billionaire Ajay Piramal, and APG will invest in local infrastructure companies through rupee-denominated mezzanine instruments, the two sides said in a statement on Wednesday.

Mezzanine debt, commonly used by private equity firms, comes between senior debt and equities.

Piramal and APG have each initially committed $375 million for investments under the alliance, the companies said.

Led by one of India's 50 richest people, Piramal has evolved from a textiles manufacturer in the mid-1980s into a group with interests in pharmaceuticals, glass, financial services and real estate.

Macquarie Capital acted as the sole financial advisor for the Piramal and APG deal.

ITC Q1 net profit up 15.6%

Profit Before Tax increased by 18.2% to Rs. 3265.67 crores

ITC recorded another strong performance during the quarter with robust growth in revenue and profits despite a challenging business environment. Net Revenue for the quarter grew by 24.9% toRs. 9164.42 crores, driven by Agri Business and FMCG Segments. Profit Before Tax increased by 18.2% to Rs.3265.67 crores while Net Profit at Rs. 2186.39 crores registered a growth of 15.6%. Earnings Per Share for the quarter stood at Rs. 2.75. The Branded Packaged Foods Businesses posted healthy growth in revenues during the quarter, despite sluggish demand conditions and a marked deceleration in industry growth rate. In the Staples, Spices and Ready-to-Eat Foods Business, ‘Aashirvaad’ atta sustained its high growth trajectory consolidating its leadership position across markets. In the Bakery and Confectionery Foods Business, the recently launched ‘Sunfeast Farmlite’ range of cookies in the health segment continues to garner increasing consumer franchise. The Business also rebranded its offerings in the mid-price cream Biscuits segment under the ‘Sunfeast Bounce’ sub-brand for sharper positioning in the market. In the Snack Foods Business, ‘Bingo!’ registered robust growth driven by the finger snacks portfolio comprising the ‘Mad Angles’, ‘Tangles’, ‘Tedhe Medhe’ and ‘Galata Masti’ sub-brands. The 'Original Style' variants of Bingo! Yumitos potato chips, launched in Feb'14, gained good traction in launch markets. In the Instant Noodles category, ‘Sunfeast YiPPee!’ continued to record healthy growth leading to improvement in market standing. During the quarter, the Personal Care Products Business expanded its portfolio in the Deodorant category with the addition of two new variants each for men and women, taking the total number of variants under the ‘Engage’ brand to 14. Engage has garnered impressive market standing in a relatively short span of time and continues to gain traction in the market. The Education & Stationery Products Business consolidated its position as the leading and fastest growing player in the Indian Stationery market. During the quarter, the Business further expanded its presence in the popular segment of notebooks with the extension of the ‘Saathi’ brand in more markets.

Rupee down 8 paise against dollar

The rupee depreciated by 8 paise to 60.21 against the US dollar in early trade today, extending losses for the fourth day at the Interbank Foreign Exchange market due to month-end demand for the American currency from importers. 

The dollar's gains against other currencies overseas and a lower opening in the domestic equity market also put pressure on the local unit.

The rupee had weakened by 3 paise to end at nearly a one-week low of 60.13 against the dollar on Monday. Forex market remained closed yesterday on account of "Id-ul-Fitr".