Top corporate news of the day - January 20, 2015

Mindtree said it has entered into a definite agreement to acquire US-based Discoverture Solutions LLC, a provider of insurance solutions for a consideration of around USD15mn.

Force Motors Ltd, said it expects to sell 23,000 vehicles during the current fiscal. It is actively looking at tapping the huge potential that the Indian defence sector offers.

Mindtree said it has entered into a definite agreement to acquire US-based Discoverture Solutions LLC, a provider of insurance solutions for a consideration of around USD15mn. 

Suzlon Energy finalized the sale of its German offshore wind turbine making unit Senvion, earlier known as REpower, for close to around Rs72bn to a private equity fund.

Delhi High Court dismissed Adani Power Ltd's plea seeking to restrain Lanco Infratech Ltd from selling its shares in its 1,200 mega watt thermal power plant in Udupi district of Karnataka. 

The Competition Commission has ordered a probe against state-owned REC for allegedly indulging in unfair business practices with respect to financing of rural electrification schemes.

SpiceJet’s loss in the month of December last year on the back of sharp fleet reductions has been IndiGo’s gain. The latter saw market share rise by almost three percentage points to 36.1% in December 2014 over the previous month, while SpiceJet’s share fell over four percentage points to 10.4% - the lowest point for the low-cost carrier this year.

Cement manufacturer Sanghi Industries said it will invest Rs2.5bn over the next couple of years for developing waste heat recovery system and facilities at Navlakhi Port in Gujarat.

A joint venture comprising Hyderabad-based Ramky Infrastructure Limited, an integrated infrastructure development and management company, and Barbrik Project Limited has bagged orders aggregating Rs2.09bn from the ministry of road transport and highways.

Bengaluru-based jewellery exporter, Rajesh Exports Ltd (REL) has bagged an export order worth Rs17.80bn for supply of designer range of gold and diamond studded jewellery and medallions from UAE-based Jamcelat Jewellery. 

Reliance Industries (RIL) will commission all of its 1400 fuel retail outlets in a year's time and plans to replicate the success of 2006 in the fuel retail segment by mopping up a market share of 14.3 per cent in high speed diesel and 7.2 per cent in petrol.

Lighting firm Surya Roshni is aiming for Rs5bn revenue from the light-emitting diode (LED) segment in the next three years.

Air-conditioning and commercial refrigeration company Blue Star Ltd would finalise the land to set up a manufacturing unit in the Southern region, which would see investments of about Rs1.50bn. 

Coal India is in the process of identifying key projects to increase output to one billion tonnes a year by 2020. The identified projects would be brought under a comprehensive development plan and will be kept under close monitoring of the Coal Ministry.

Kansai Nerolac Paints has entered into a joint venture pact with Sri Lanka's Capital Holdings Maharaja Pvt Ltd. 

Customers of ICICI Bank can use their Twitter account for real-time fund transfers, prepaid mobile recharges and to check bank balance.   

Aiming to expand in the Latin American market, Tata Communications has made an investment in Seaborn Networks, which is laying a submarine network cable between the US and Brazil.

Sensex rallies 500 points...Nifty nears 8,700 levels

At 3:02PM, the S&P BSE Sensex is trading at 28,771 up 500 points, while NSE Nifty is trading at 8,690 up 139 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%.

Auto, Power, banking, healthcare metal, realty, capital goods, FMCG, Oil and gas indices are the gainers, while Consumer Durables indices is only the loser.

Tata Steel, Axis Bank, Tata Motors, ITC, Hindalco, Reliance, HDFC Bank are among the gainers, whereas GAIL, Maruti, Tata Power, TCS are losing sheen on BSE.

Sensex zooms 400 points

The market continues to trade on a gung-ho note on smart buying across all sectors. 

At 2:48 PM, the S&P BSE Sensex is trading at 28,742 up 479 points, while NSE Nifty is trading at 8,545 up 134 points. 

All the Sectoral indices are trading on a positive note. 

The CNX Metal index has surged 2.5 per cent. 

The Bank Nifty has jumped 1.5 per cent. 

The CNX FMCG index has advanced 1.2 per cent. 

The CNX Energy index has spurted over a per cent. 

The CNX IT, the CNX Infra, the CNX Auto and the CNX Realty indices have added 0.3 per cent each. 

The market breadth is positive in the noon deals. 

Out of 1,741 stocks traded on the NSE - 865 stocks have advanced, while 654 stocks have declined.

Bharat Gears stock zooms 20%

Bharat Gears has hit the 20 per cent upper circuit on possible multiple block deals in the late morning trade on the BSE. The counter saw a huge spike in volume around 1030 hrs, as the stock zoomed and hit the 20 per cent upper circuit. The stock now remains locked at the 20 per cent upper circuit at Rs. 96.40 - which is also a fresh 4.3-year high. The counter has seen huge volume of around 756,000 shares as against the two-week daily average volume of around 16,000 shares. As per data available from the BSE, the counter has seen multiple block deals of around 52,000 shares, 190,000 shares, 123,000 shares, 43,000, 33,000 and 60,000 in a span of 10-15 minutes around 1030 hrs. There are pending buy orders for around 24,700 odd shares on the BSE.

Nifty hits record high

At 1:09 PM, the S&P BSE Sensex is trading at 28,508 up 246 points, while NSE Nifty is trading at 8,621 up 70 points after hitting a record high of 8629.85 a short while ago.

The BSE Mid-cap Index is trading up 0.57% at 10,741 , whereas BSE Small-cap Index is trading up 0.65% at 11,474.

Fantastic come back! Nifty has once again surpassed the life time high levels of 8626.95 led by the banking stocks accompanied by metals, realty and FMCG stocks. The Nifty has risen almost by 7% from its January 7, 2014 low of 8,065.

Among Sectoral indices -The CNX PSU Bank continues to out-perform the Bank Nifty. The CNX PSU Bank has surged over a per cent, while the Bank Nifty is up 1.06 per cent. The CNX Realty index has added 0.56 per cent.

Asia Insights: India rates, stay long bonds, take profits on swap flatteners - See more at: http://www.indiainfoline.com/article/news-top-story/asia-insights-india-rates-stay-long-bonds-take-profits-on-swap-flatteners

We remain constructive on India rates and continue to express this view through long bond positions. In swaps, we recently recommended taking profits on flatteners and we wait for some steepening before reconsidering re-establishing flatteners or outright receivers, Asia Insights said.

An interesting way to start the year

The RBI surprised markets by delivering an intermeeting 25bp rate cut, taking repo rate to 7.75% from 8%. Although the rate cut was widely anticipated, expectations of its timing were divided between February and April. As such, the inter-meeting move in January surprised even the most bullish of expectations on the street. Indeed, rates markets reacted positively. We expect this bullish momentum to increase in coming weeks. In bonds, we revise down our 10yr year-end target to 7.20% from 7.50%.
Take profits on flatteners as swap curve can steepen tactically

We have been recommending swap flatteners since early 2014 but following this recent rate cut, we took profits on our the most recent flattener position that we initiated in July (DV01: USD3K; entry: -37bp; exit: -79bp including roll; total profit 42bp.

1. Valuations: The (ND) OIS curve is now trading near all-time inverted levels. The only time it was more inverted was in August-September 2013. However, that was during a bear flattening that was driven by a 300bp equivalent hike by the RBI (Figure 1). During the previous two rate cut cycles as well, the swap curve inversion took place in anticipation of and towards the early part of the rate cut cycle. The curve inversion as measured by 1yrfwd1yr-1yr and 1yrfwd1s4s – our two preferred ways to look at the curves – is at its widest levels. Therefore, the current risk-reward for holding flatteners appears low.
2. Positive surprise on pace of easing: Beyond the unattractive valuations, another reason for our decision to close our flattener position was the positive surprise on pace of easing. If the delivered pace of easing is faster than the pace implied by the forward curve, then the realised carry would be much less than what is implied by the curve. Given the RBI can ease further in coming meetings, the implied carry of flatteners (as measured by the current (ND) OIS curve) may not be realised.
3. Seasonality: The third reason to take profits on flatteners is seasonality. In February and March, the very front end typically outperforms as the market tries to price in a seasonal improvement in banking system liquidity in April. Also, the longer end of the curve usually prices in supply concession ahead of next fiscal year’s bond supply, which starts in April.

Nifty nears 8,600 levels

At 9:25AM, the S&P BSE Sensex is trading at 28,359 up 98 points, while NSE Nifty is trading at 8,585 up 34 points. The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%. Auto, Consumer Durables, Power, banking, capital goods, Oil and gas indices are the gainers, while FMCG indices is only the loser. GAIL, BHEL, COALINDIA,SUNPHARMA,TATASTEEL, Reliance, Hindalco are among the gainers, whereas HDFC Bank, Infosys, Axis Bank, HUL are losing sheen on BSE. The VIX has closed at a 27-week high on anticipation of volatile moves ahead of announcement of euro zone stimulus via bond buying. Cement counters are gaining strength. Ambuja and Ultratech breaking all-time highs, the rally may well continue for a while. US markets were closed. Asian markets are mostly higher. Japan's Nikkei is up over a percent while Hong Kong's Hang Seng has gained half a percent. China's Shanghai index is also up a percent. MRF could be in action on reports that is in advance discussion with Kesoram Industries to acquire its main tyre unit. Punj Lloyd sold its entire 17.74% stake in Global Health Pvt Ltd to an arm of Temasek Holdings. After 23 years, Tata Consultancy Services has overtaken RIL to be the most profitable Indian company. TCS posted a net profit of Rs 5,328 crore for the quarter ended December, overtaking Reliance Industries Ltd’s profit of Rs 5,256 crore, says a report. Finance Minister Arun Jaitley said that there is a need to rationalise all subsidies and ensure stability in policies in order to attract investment and drive growth. The Minister also underline the need for stability in tax and other policies to make India an attractive place for investment. The Telecom Commission approved base price of Rs 3,700 crore for each MHz of 2,100-MHz spectrum to be auctioned on February 25, says report. According to reports, the final reserve price is 36% higher than the Rs 2,720 crore recommended by the Telecom Regulatory Authority of India (Trai). The Union Cabinet is likely to meet this week and will take a final call. Government is considering removing price controls on urea and scrapping an import duty of 5%, according to reports.Report said that Modi's government is planning to decontrol maximum retail price (MRP) of urea which is currently fixed at Rs5,360 ($87) a tonne. Mahanagar Gas Ltd is planning to raise around Rs8 bn ($129.66 million) via IPO in the first quarter of 2015, according to reports. Report said that the company has hired Kotak Mahindra Capital and Citigroup to manage the initial public offering (IPO).The company is expected to file for the IPO with market regulator Securities and Exchange Board of India over the next month, says report. MindTree Ltd has posted a net profit of Rs. 1408 mn for the quarter ended December 31, 2014 as compared to Rs. 888 mn for the quarter ended December 31, 2013.The stock will be in limelight. -