Thursday, 11 June 2015

BHEL commissions all 4 Hydro sets of 82.5 MW each

BHEL has announced that it has commissioned all 4 Hydro sets of 82.5 MW each. 

BHEL has announced that it has commissioned all 4 Hydro sets of 82.5 MW each at 330 MW Hydro Power Station in just 60 days.

Tata Power in talks with lenders consortium to refinance Coastal Gujarat Power loans

The Exchange had sought clarification from Tata Power Company Ltd with respect to news article appearing in The Financial Express titled "Tata Power too plugs into 5/25 scheme, near deal for Rs 10,000cr refinance". 

The Exchange had sought clarification from Tata Power Company Ltd with respect to news article appearing in The Financial Express on June 10, 2015 titled "Tata Power too plugs into 5/25 scheme, near deal for Rs 10,000cr refinance".

Tata Power Company Ltd clarified that the company is in discussions with the Lenders consortium to refinance the loans of Coastal Gujarat Power Limited by extending the tenure of loan repayments for refinancing project loans.

The final approvals are yet to be obtained from lenders.

Slowdown! World Bank reduces 2015 global growth forecast to 2.8%

Developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs as they adapt to a new era of low prices for oil and other key commodities, resulting in a fourth consecutive year of disappointing economic growth this year, says the World Bank Group’s latest Global Economic Prospects (GEP) report, released today. 

Developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs as they adapt to a new era of low prices for oil and other key commodities, resulting in a fourth consecutive year of disappointing economic growth this year, says the World Bank Group’s latest Global Economic Prospects (GEP) report, released today.

As a result, developing countries are now projected to grow by 4.4 percent this year, with a likely rise to 5.2 percent in 2016, and 5.4 percent in 2017.  

“Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment,” said World Bank Group President Jim Yong Kim. “We’ll do all we can to help low- and middle-income countries become more resilient so that they can manage this transition as securely as possible. We believe that countries that invest in people’s education and health, improve the business environment, and create jobs through upgrades in infrastructure will emerge much stronger in the years ahead. These kinds of investments will help hundreds of millions of people lift themselves out of poverty.”

With an expected liftoff in U.S. interest rates, borrowing will become more expensive for emerging and developing economies over the coming months. This process is expected to unfold relatively smoothly since the U.S. economic recovery is continuing and interest rates remain low in other major global economies.

However, there are considerable risks around this expectation, the report argues. Just as the initial announcement of U.S. policy normalization caused turmoil in financial markets in 2013 – now referred to as the “taper tantrum” – the U.S. Federal Reserve’s first interest rate increase, or liftoff, since the global financial crisis could ignite market volatility and reduce capital flows to emerging markets by up to 1.8 percentage points of GDP, the report says.  

“Slowly but surely the ground beneath the global economy is shifting. China has avoided the potholes skillfully for now and is easing to a growth rate of 7.1 percent; Brazil, with its corruption scandal making news, has been less lucky, dipping into negative growth. With an expected growth of 7.5 percent this year, India is, for the first time, leading the World Bank’s growth chart of major economies. The main shadow over this moving landscape is of the eventual U.S. liftoff,” said Kaushik Basu, World Bank Chief Economist and Senior Vice President. “This could dampen capital flows and raise borrowing costs. This GEP provides a comprehensive analysis of what the liftoff may mean for the developing world.”
This would especially hurt emerging markets with greater vulnerabilities and weakening growth prospects. For commodity-exporting emerging markets that are already struggling to adjust to persistently low commodity prices, or for countries experiencing policy uncertainty, a slowdown in capital flows would add to their policy challenges.

“Unless emerging markets have taken the prudent policy steps to be fiscally and externally resilient, they may face significant challenges dealing with the turbulence and other fallout that could be associated with a Fed tightening,” said Ayhan Kose, the World Bank’s Director of Development Prospects.

Lower prices for oil and other strategic commodities have intensified the slowdown in developing countries, many of which depend heavily on commodity exports. While commodity importers are benefiting from lower inflation, fiscal spending pressures, and import costs, low oil prices have so far been slow to spur more economic activity because many countries face persistent shortages of electricity, transport, irrigation, and other key infrastructure services; political uncertainty; and severe flooding and drought caused by adverse climate. 
   
Growth in Brazil, held back by weak confidence and higher inflation, is expected to contract by 1.3 percent in 2015, a 2.3 percentage point swing from January, while Russia’s economy, hit by oil price declines and sanctions, is forecast to contract by 2.7 percent. Mexico’s GDP is projected to advance by a more moderate 2.6 percent, as a soft patch in U.S. activity and falling oil prices weigh on growth. In China, the carefully managed slowdown continues, with growth likely to moderate to a still robust 7.1 percent this year. In India, which is an oil-importer, reforms have buoyed confidence and falling oil prices have reduced vulnerabilities, paving the way for the economy to grow by a robust 7.5 percent rate in 2015. 

A special analysis in the report finds that low-income countries, many of which depend on commodity exports and investment, are vulnerable in the current environment. During the commodity price boom of the mid-2000s, their economies strengthened considerably with new discoveries of key metals and minerals, resource investment, and expanding commodity exports. The prospect, therefore, of persistently low commodity prices may persuade policy makers to steer their resources away from metals and minerals and into other national economic priorities that will drive growth instead. This puts a premium on policies to build buffers that can ease the transition and reforms that support growth in the non-resource sector.

“After four years of disappointing performance, growth in developing countries is still struggling to gain momentum,” said Franziska Ohnsorge, Lead Author of the report. “Despite auspicious financing conditions, a protracted slowdown has been underway in many developing countries, driven by shortages in agriculture, power, transport, infrastructure, and other vital economic services. This makes the case for structural reforms all the more urgent.”

In high-income countries, in contrast, recovery is gaining momentum, as growth in the Euro Area and Japan picks up and the United States continues to expand, despite a weak start to the year. High-income countries are on course to grow by 2.0 percent this year, 2.4 percent in 2016 and 2.2 percent in 2017. The global economy is likely to expand by 2.8 percent this year, 3.3 percent in 2016 and 3.2 percent in 2017.
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Risks to the outlook for emerging and developing economies continue to weigh on growth. As some risks, such as the possibility of persistent stagnation in the Euro Area and Japan, have receded, new ones have emerged. Coinciding with the expected rise in U.S. interest rates, positive credit ratings for emerging markets are fading, especially in oil exporting countries, risks of financial market volatility are increasing, and capital flows are declining. An excessive appreciation of the U.S. dollar could curtail the recovery in the world’s largest economy, with adverse side-effects for U.S. trading partners around the world.

Regional Highlights:
In the East Asia and Pacific region, growth is expected to ease to 6.7 percent in 2015 and remain stable over the next two years. This reflects a continued slowdown in China that is offset by a modest pickup in the rest of the region. A net oil importer, the region is expected to benefit from lower fuel prices, although commodity exporters Indonesia and Malaysia face pressures from lower global prices of oil, gas, coal, palm oil, and rubber.

Growth in China is on course to ease to 7.1 percent this year. Regional growth (excluding China) is projected to be 4.9 percent this year, rising to 5.4 percent by 2016 due to strengthening external demand -- notwithstanding slower growth in China, less policy uncertainty in Thailand, and easing domestic pressures elsewhere.

Growth in Europe and Central Asia is expected to weaken further to 1.8 percent in 2015 as the oil price collapse, geopolitical tensions, and related spillovers, including from Russia, are only partly offset by a moderate recovery in the Euro Area.

In Russia, a 2.7 percent contraction this year is expected to be followed by a moderate recovery in 2016 supported by policies that are shifting the economy to a lower oil price environment. In Turkey, growth is projected at 3 percent in 2015 with private spending to recover after the June elections. Assuming a slight rise in oil prices in 2016-17, no further deterioration in the geopolitical situation, and continued macroeconomic stabilization policies in major economies, regional growth is expected to strengthen to 3.5 percent in 2016-17.

In Latin America and the Caribbean, growth will ease to 0.4 percent in 2015, as South America struggles with domestic economic challenges, including widespread droughts, weak investor confidence, and low commodity prices.

In Brazil, a slump in investment and business confidence, partly due to the Petrobras investigations, will push the economy into a contraction this year of 1.3 percent. In Mexico, sentiment has remained fragile and activity is picking up, but at a slower pace than expected, as a result of lower oil prices, a weak first quarter in the United States, and modest wage growth. For 2016-17, growth in the region is expected to pick up to 2.4 percent, on average, as South America emerges from recession and robust growth in the United States lifts activity in North and Central America and the Caribbean.

In the Middle East and North Africa, growth is expected to remain flat at 2.2 percent in 2015. The plunge in oil prices is a particular challenge for oil-exporting countries, most of which also have severe security challenges (Iraq, Libya, and Yemen) or limited economic cushioning (Iran, Iraq). For oil-importing countries, the potential positive effects of lower oil prices are partially offset by spillover effects from more fragile countries in the region, including through lower remittances and security risks. Long-standing structural constraints present a chronic obstacle to faster growth in the region. The expected regional growth rebound to 3.7 percent in 2016-17 is predicated on improving external demand, strengthening confidence that boosts investments in some oil-importing countries (Egypt, Jordan).

Growth in South Asia is expected to continue firming to 7.1 percent this year, led by a recovery in India and supported by a gradual strengthening of demand in high-income countries. The decline in global oil prices has been a major benefit for the region, driving improvements in fiscal and current accounts, enabling subsidy reforms in some countries, and the easing of monetary policy.
In India, new reforms are improving business and investor confidence and attracting new capital inflows, and should help raise growth to 7.5 percent this year. In Pakistan, remittances are expected to remain solid, and manufacturing and service sectors should continue to recover. However, growth is expected to remain moderate, reflecting ongoing energy constraints.

In Sub-Saharan Africa, low oil prices have considerably reduced growth in commodity-exporting countries (Angola, Nigeria), and have also slowed activity in non-oil sectors. Although South Africa is expected to be one of the main beneficiaries of low oil prices, growth is being held back by energy shortages, weak investor confidence amid policy uncertainty, and by the anticipated gradual tightening of monetary and fiscal policy. Growth in the region is forecast to slow to 4.2 percent, slower than previously expected. This mainly reflects a reassessment of prospects in Nigeria and Angola following the sharp drop in oil prices, and in South Africa, because of ongoing difficulties in electricity supply. For 2016-17, growth is expected to be only marginally higher as these challenges partially offset stronger trading partner growth and the continued expansion in the region’s low-income countries.
Using 2010 purchasing power parity weights, global growth would be 3.4 percent in 2015, and 4.0 percent for each of 2016 and 2017.

TCS is the largest dividend payer in FY15

A report says that Tata Group company paid a dividend of Rs 15,474 crore to shareholders in FY15. 

Tata Consultancy Services (TCS) is the largest dividend payer in India Inc this year.

A report says that Tata Group company paid a dividend of Rs 15,474 crore to shareholders in FY15.
While Coal India cut its dividend payout by 28.6% to Rs 13,075 crore ONGC's payout remained same at~ Rs 8,128 crore. 

In year 1995-96, Reliance Industries was the biggest payer, ahead of ONGC and Steel Authority of India (SAIL)


Narrower CAD strengthens Rupee!

The rupee is currently trading at 63.79, stronger by 5 paise from its previous close of 63.84 on Wednesday. 

Indian rupee, extending previous two consecutive sessions’ appreciating streak was trading strong in early deals on Thursday. Relentess dollar selling by state run banks and exporters combined with higher opening of local equities mainly aided the sentiment. The curreny also strengthened after the current account deficit (CAD) for the March quarter slipped to 0.2% of gross domestic product (GDP), its lowest in a year, helped by a lower trade deficit. This is positive news for local currency as a low CAD basically supports rupee and would help India counter possible capital outflows in the event of a hike in interest rates by the US Federal Reserve later this year. On the global front,  dollar resumed its uptrend against the yen Thursday after suffering a sharp sell-off in the previous session. Bank of Japan chief Haruhiko Kuroda sent the yen soaring on Wednesday when he said the Japanese unit's recent sell-off was "unlikely" to continue, even if the Federal Reserve hikes interest rates.

The rupee is currently trading at 63.79, stronger by 5 paise from its previous close of 63.84 on Wednesday. The currency touched a high and low of 63.82 and 63.74 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 63.88 and for Euro stood at 72.14 on June 10, 2015. While, the RBI’s reference rate for the Yen stood at 51.94, the reference rate for the Great Britain Pound (GBP) stood at 98.4722. 

Bank Nifty dumped; Indices tumble after positive start

The BSE Mid-cap Index is trading down 0.05% at 10,265, whereas BSE Small-cap Index is trading up 0.23% at 10,804. 

At 10:27 AM, the S&P BSE Sensex is trading at 26,778 down 62 points, while NSE Nifty is trading at 8,099 down 25 points.

The BSE Mid-cap Index is trading down 0.05% at 10,265, whereas BSE Small-cap Index is trading up 0.23% at 10,804.

Some buying activity is seen in pharma, capital goods, banking, consumer durable,auto and metal sectors, while oil & gas sector is showing weakness on BSE.

ICICI Bank, Hero Motocorp, Vedanta, Sun Pharma, Axis Bank, HUL and Bajaj Auto are among the gainers, whereas Tata Motors, Tata Steel, NTPC, HDFC Bank, M&M and GAIL are losing sheen on BSE.

Finance Minister Arun Jaitley said the healthy growth in indirect taxes indicates pick up in manufacturing particularly and pointed that there are green shoots in the economy.  Indirect tax revenues grew 39.2% in April-May. In May, the Centre’s indirect tax revenues grew 37.3%, he said.

MSCI deferring inclusion of China stocks to its benchmark indices have turned the bulls berserk for now. The bounceback by the Indian rupee against the US Dollar provided yet another positive trigger for Wednesday’s upswing.

Follow up buying may be seen as investors look to lap up some beaten down shares. Global cues are healthy for now. The Dow and S&P 500 added over a percent while Nasdaq gained 1.25%. Asian markets are mostly higher except for China’s Shanghai index which is marginally lower. Japan's Nikkei is up over a percent while Hong Kong's Hang Seng index has gained 0.9%.

The Pharma, PSU Bank, Infra, Finance and FMCG and Bank Nifty indices have added over 0.5 percent each.

In the Nifty-50 stocks - Sun Pharma is the top gainer - up almost 2 percent at Rs. 839. Ambuja Cement has jumped 1.5 percent at Rs. 229.

Zee Entertainment, ICICI Bank, Yes Bank, Tech Mahindra and Hindalco are the other prominent gainers.

On the other, Cairn India is the only major loser - down over 1.5 percent at Rs. 181. 

41st AGM: Will Ambani announce launch date for Reliance Jio?

A report says that Ambani could use the platform to announce a launch date for the venture. 

Mukesh Ambani, chairman and managing director of Reliance Industries, may use 41st annual general meeting to announce plans for telecom subsidiary Reliance Jio Infocomm, according to media reports.
A report says that  Ambani could use the platform to announce an launch date for the venture.

"Reliance Jio Infocomm's ambitious project to provide reliable (fourth generation) high-speed internet services with rich communication and digital services continues to gather speed. We are currently working with several strategic partners in deployment and testing activities," Mukesh Ambani had said in the previous Reliance Industries' annual report.

Canara HSBC Oriental Bank of Commerce Life Insurance appoints Anuj Mathur as CEO

Mathur will take charge as the CEO on 1 July 2015, succeeding the current CEO, John Holden.

Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited – a joint venture between two of India’s largest public sector banks, Canara Bank and Oriental Bank of Commerce, and HSBC Insurance (Asia Pacific) Holdings Limited announced the appointment of Anuj Mathur as the new Chief Executive Officer of the company. Mathur will take charge as the CEO on 1 July 2015, succeeding the current CEO, John Holden.
 
Under Holden's leadership the Company reported its maiden profit in less than five years of commencing operations and the Board thanked John for his contribution. The Company continues to pursue a pure bancassurance model and passing the benefits of its lean cost structure to the three banks' customers through highly competitive products backed up by strong customer service.
 
Anuj Mathur is a founding member of the company having joined in 2007 to lead Legal, Compliance & Risk, Corporate Governance, before taking over as the Chief Financial Officer in September 2009.  He has over 22 years of experience, out of which more than 14 years have been with the life insurance industry.  He is a fellow member of The Institute of Chartered Accountants of India, Institute of Company Secretaries of India, associate member of Institute of Cost Accountants of India and a Commerce graduate from Shri Ram College of Commerce, Delhi University.

Top corporate news of the day-June 11, 2015

BEML has bagged an order worth Rs. 6.45bn from Delhi Metro Rail Corporation (DMRC) for design, manufacture, supply, testing and commissioning of 74 nos broad guage metro cars for their RS-13 project.

Newspaper and glasses
The Crime Investigation Department (CID) Telangana has registered a case against Abbott Health Care Pvt Ltd, a subsidiary of drug maker Abbott India, and their associates in an alleged case of smuggling cough syrup ‘Phensedyl’ to Bangladesh. The investigation was prompted when cough syrup (containing narcotic substance) worth Rs.576 mn on its way to Bangladesh was intercepted in Shillong six months ago, according to a statement issued by state Drug Control Administration (DCA).

BEML, a defence public sector undertaking, has bagged an order worth Rs. 6.45bn from Delhi Metro Rail Corporation (DMRC) for design, manufacture, supply, testing and commissioning of 74 nos broad guage metro cars for their RS-13 project.

Apollo Hospital recent acquisition is a 51% stake in a Guwahati-based Assam Hospitals for about Rs.570mn, which will strengthen the company’s presence in the North-East. While this investment is small, Apollo Hospitals has also approved a rights issue to raise Rs7.5bn for investing in capacities and newer hospitals and also for acquisition-led growth in a few key segments.

The patent office in India has decided to grant patent for automobile manufacturer TVS Motor for an engine for a three wheeler, with a cooling system for the rear mounted liquid cooled engine.

Vedanta (formerly known as Sesa Sterlite) is set to make an official announcement of its merger deal with wholly-owned subsidiary Cairn India on June 14th. The deal will give Vedanta access to Cairn India's cash and investments worth Rs160bn.

Larsen and Toubro, which is developing the Rs160bn Hyderabad Metro Rail project, said it will develop the entire 18.5 million sq ft commercial space around the project in a phased manner over the next ten years.

Videocon Telecom, the telecom arm of the USD10bn Videocon Group, will launch its 4G services in Uttar Pradesh and Bihar within the next 6-8 months.

The Kerala cabinet cleared the lone bid submitted by Adani Ports and SEZ Limited for developing the Vizhinjam International port. It approved the recommendations of a high power committee, headed by the chief secretary, for the Rs.65bn project.

ICICI Bank country’s largest private sector lender is looking at raising Rs500bn through private placement of securities including bonds and non-convertible debentures (NCDs). 

Top economy news of the day - June 11, 2015

The government approved Rs47bn highways projects in Madhya Pradesh and Telangana under its flagship highways building programme NHDP. 

News key
The country’s current account deficit (CAD) narrowed sharply to USD1.3bn, or 0.2% of GDP, in the fourth quarter of the last financial year on a sequential basis mainly on account of a lower trade gap. The same shrank to 1.3% of GDP for full financial year 2014-15. 

The government approved Rs47bn highways projects in Madhya Pradesh and Telangana under its flagship highways building programme NHDP.

Data for the first two months of the financial year show a sharp fall in demand for new scooters, indicating a possible slowdown now creeping into urban and semi-urban markets. Data from SIAM shows scooter sales growth declined sharply to under 4% in April and May, at 708,825 units. In the same period last year, the segment had growth of 25%.

Indices open in green

Some buying activity is seen in pharma, capital goods, banking, consumer durable,auto and metal sectors, while oil & gas sector is showing weakness on BSE. 

Following yesterday's sharp rally, the market has kick-started the day on a firm note, as the global cues were favorable.

Overnight in US, the Dow Jones surged 236 points to 18,000. Following which, the Asian markets - the Nikkei index jumped 1.5 percent. The Hang Seng index spurted a percent and the Straits Times index gained over 0.5 percent.

Yesterday, government of India announced current account deficit (CAD) narrowed sharply to $ 1.3 billion (0.2 percent of GDP) in Q4 of 2014-15 from $ 8.3 billion (1.6 percent of GDP) in Q3; on a year-on-year (y-o-y) basis, however, the CAD was a shade higher ($ 1.2 billion or 0.2 percent of GDP in Q4 of 2013-14).

Back home, the BSE Sensex opened higher by 120-odd points at 26,960 and the NSE Nifty gained 33 points at 8,157.

Soon, the key benchmark indices touched a high at 27,000 and 8,163, respectively.

At 9:38 AM, the S&P BSE Sensex is trading at 26,923 up 82 points, while NSE Nifty is trading at 8,143 up 19 points.

The BSE Mid-cap Index is trading up 0.56% at 10,329, whereas BSE Small-cap Index is trading up 0.62% at 10,847.

Some buying activity is seen in pharma, capital goods, banking, consumer durable,auto and metal sectors, while oil & gas sector is showing weakness on BSE.

ICICI Bank, Hero Motocorp, Vedanta, Sun Pharma, Axis Bank, HUL and Bajaj Auto are among the gainers, whereas Tata Motors, Tata Steel, NTPC, HDFC Bank, M&M and GAIL are losing sheen on BSE.

Finance Minister Arun Jaitley said the healthy growth in indirect taxes indicates pick up in manufacturing particularly and pointed that there are green shoots in the economy.  Indirect tax revenues grew 39.2% in April-May. In May, the Centre’s indirect tax revenues grew 37.3%, he said.

MSCI deferring inclusion of China stocks to its benchmark indices have turned the bulls berserk for now. The bounceback by the Indian rupee against the US Dollar provided yet another positive trigger for Wednesday’s upswing.

Follow up buying may be seen as investors look to lap up some beaten down shares. Global cues are healthy for now. The Dow and S&P 500 added over a percent while Nasdaq gained 1.25%. Asian markets are mostly higher except for China’s Shanghai index which is marginally lower. Japan's Nikkei is up over a percent while Hong Kong's Hang Seng index has gained 0.9%.

The Pharma, PSU Bank, Infra, Finance and FMCG and Bank Nifty indices have added over 0.5 percent each.

In the Nifty-50 stocks - Sun Pharma is the top gainer - up almost 2 percent at Rs. 839. Ambuja Cement has jumped 1.5 percent at Rs. 229.

Zee Entertainment, ICICI Bank, Yes Bank, Tech Mahindra and Hindalco are the other prominent gainers.

On the other, Cairn India is the only major loser - down over 1.5 percent at Rs. 181.