FinMin wants RIL to supply outstanding gas at old rate

The Finance Ministry has called for Reliance Industries  ( RIL ) to deliver outstanding gas at old price of USD 4.2/ million metric British thermal units, reports Nayantara Rai.

The Finmin also sought to put cap on the increased domestic gas price. This was suggested to the oil ministry because Finmin believes upside in price needs to be capped to control unlimited gains. However companies can reap gains with upswing in global price, sources said.

There was never any talk of having an upward ceiling or a cap. Finance ministry now wants the oil ministry to put an upward ceiling. It believes that gas producers should not reap in all the benefits especially when there is an upswing in global prices and that is something the oil ministry and finance ministry will have to work out.

Also, CNBC-TV18 has accessed the note written by the finance ministry where it says that because of all the technical problems that Reliance Industries has been having, when production goes up, government should ensure that RIL supplies the shortfall in gas at the old price of USD 4.2/mmBtu. It also mentions that RIL is going to be the biggest beneficiary of new price regime and should not benefit from that new price until it delivers all the outstanding gas promised to the government.

An arbitration process between RIL and the government has also been seen. It will be interesting to see how this progresses because finance ministry has also told the oil ministry to reach a logical conclusion with RIL on outstanding legal issues whether it is towards cost recovery or penalty. As far as ceiling is concerned, gas producers in the country will not be happy about it. The talk of a ceiling was unexpected and the plan was to move to a market-linked regime in five years.

Banks in demand as bond yields slide

IndusInd Bank  (up 4.24%), Bank of Baroda (up 3.46%), Federal Bank (up 3.34%), HDFC Bank (up 3.30%), Yes Bank (up 3.27%), Axis Bank (up 3.08%), Union Bank of India (up 2.69%), Punjab National Bank (up 2.55%), Bank of India (up 2.47%), State Bank of India (up 2.37%), Canara Bank (up 2.32%), IDBI Bank (up 2.29%), ICICI Bank (up 2.24%) and Kotak Mahindra Bank (up 1.89%), edged higher.
The BSE Bankex was up 2.73% at 13,335.42. It outperformed the BSE Sensex, which was up 1.92% at 19,665.43.
The BSE Bankex had underperformed the market over the past one month till 10 July 2013, falling 6.13% compared with the Sensex's 0.76% fall. The index had also underperformed the market in past one quarter, rising 1.76% as against Sensex's 4.78% rise.
The benchmark 10-year bond yield were down 8 basis points at 7.44% on the back of US Federal Reserve Chairman Ben S. Bernanke's statement on Wednesday, 10 July 2013, that the world's biggest economy will continue to need stimulus.
A rise in bond prices, which move inversely to yields, will boost the value of bond holdings of banks. Profits from trading in government bonds form a substantial part of revenue of commercial banks.

Cairn India gains along with crude oil price

Cairn India rose 2.09% to Rs 292.65 at 11:25 IST on BSE as US crude oil futures traded near the highest level in 15 months after crude stockpiles in United States fell for a second week, indicating growth in demand in the world's largest oil consumer

On BSE, 43,000 shares were traded in the counter as against average daily volume of 1.74 lakh shares in the past one quarter.

The stock hit a high of Rs 292.85 and a low of Rs 289 so far during the day. The stock had hit a 52-week high of Rs 365.90 on 17 September 2012. The stock had hit a 52-week low of Rs 267.90 on 28 March 2013.

The stock had underperformed the market over the past one month till 10 July 2013, sliding 1% compared with the Sensex's 0.76% fall. The scrip had also underperformed the market in past one quarter, declining 2.32% as against Sensex's 4.78% gain.

The large-cap company has equity capital of Rs 1910.30 crore. Face value per share is Rs 10.
US crude oil futures for August 2013 delivery were up 49 cents a barrel at $107.01 a barrel in the electronic trading today, 11 July 2013. The contract had surged $2.99 a barrel or 2.88% to settle at $106.52 a barrel on the New York Mercantile Exchange on Wednesday, 10 July 2013, its highest closing level since 27 March 2012. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms like Cairn India.

Crude inventories in the United States dropped by 9.87 million barrels last week, as per the data released on Wednesday, 10 July 2013 by the US Energy Information Administration (EIA). Total US crude inventories declined to 373.9 million barrels, the lowest level since February, the data showed. United States is the world's biggest oil consumer.

Meanwhile, Egypt ordered the arrest of the Muslim Brotherhood leader, escalating a confrontation between Islamists and an army-backed interim administration.

Cairn India's consolidated net profit rose 17.3% to Rs 2563.60 crore on 19.5% growth in net sales to Rs 4363.36 crore in Q4 March 2013 over Q4 March 2012. The company unveils Q1 June 2013 results on 24 July 2013.

Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. The company sells its oil to major refineries in India and its gas to both public sector units and private buyers.

HDFC AMC plans to sell stake in Nitesh Housing

Nitesh Housing Developers is in talks with private equity investors to raise around Rs 3.50bn, report was quoted as saying.

Reports said that HDFC Asset Management Company, the portfolio manager of HDFC Mutual Fund is planning to sell its entire stake in Nitesh Housing Developers, a subsidiary of Bangalore-based Nitesh Estates.

The fund house had acquired 10.1% stake in the subsidiary of the real estate developer for Rs 68 crore in 2009.

Nitesh Housing Developers owns four projects in Bangalore - Hyde Park, Columbus Square, Napa Valley and Fisher Island - spread across 10 million sq ft.

Nitesh Housing Developers is in talks with private equity investors to raise around Rs 3.50bn, report was quoted as saying.

Government to release IIP, CPI data after market hours

Key macroeconomic data including gross domestic product (GDP) and index of industrial production (IIP) numbers will now be released after market hours, in an apparent bid by the government to prevent any knee-jerk reaction to such information.

According to a statement available on the Ministry of Statistics and Programme Implementation website, GDP, consumer price index (CPI) and IIP will now be released at 5.30 p.m.

A source said the government has taken this decision in view of deteriorating markets and the depreciating rupee.

Andhra Bank slips ex-dividend

Andhra Bank fell 4.36% to Rs 82.20 at 9:24 IST on BSE after turning ex-dividend today, 11 July 2013, for dividend of Rs 5 per share for the year ended 31 March 2013.

On BSE, 40,000 shares were traded in the counter as against an average daily volume of 1.72 lakh shares in the past one quarter.
The stock hit a high of Rs 83 and a low of Rs 81.35 so far during the day. The stock had hit a 52-week high of Rs 130 on 8 January 2013. The stock had hit a 52-week low of Rs 78.15 on 25 June 2013.

The stock had underperformed the market over the past one month till 10 July 2013, sliding 1.09% compared with the Sensex's 0.76% fall. The scrip had also underperformed the market in past one quarter, falling 6.83% as against Sensex's 4.78% rise.

The mid-cap company has an equity capital of Rs 559.58 crore. Face value per share is Rs 10.

Before turning ex-dividend, the stock offered a dividend yield of 5.82% based on the closing price of Rs 85.95 on Wednesday, 10 July 2013.

Net profit of Andhra Bank rose 1.45% to Rs 344.58 crore on 15% rise in operating income to Rs 3713.06 crore in Q4 March 2013 over Q4 March 2012.


The Government of India (GoI) holds 58% stake in Andhra Bank (as on 30 June 2013).

Markets to see some recovery on sanguine global cues

The Indian markets suffered selling in last session mainly on global cues and some on the reports that finance ministry has mooted cap on gas prices, asking Reliance Industries to sell the quantity of gas by which it has fallen short of targets during the past three years at the present rate of $4.2 per unit. Though, the oil & gas sector is likely to remain under pressure even today with the proposals, but the markets are likely to get a good start tailing sanguine global cues. Meanwhile, in view of deteriorating markets and depreciating rupee the government has decided that key macroeconomic data including GDP and IIP numbers will now be released after market hours. Now GDP, CPI and Index of Industrial Production (IIP) data will be released at 5.30 PM in the evening. Traders will also be eyeing the movement of rupee and bullion as the dollar slumped and gold jumped to its highest in more than two weeks after Federal Reserve Chairman Ben Bernanke said the US central bank will continue to pursue an accommodative monetary policy for now. Jewellery exporters may see some upmove on the report that government is considering incentives for gold jewellery exporters hit by restrictions imposed on import of the metal to contain current account deficit.

The US markets went through a choppy day of trade in last session and after remaining directionless for most part of the day, lost some gains on release of the minutes of the Federal Reserve's latest monetary policy meeting, which indicated that the central bank is moving closer to tapering its asset purchase program. The Asian markets have made a good start with most of the indices trading considerably higher, as US Fed Chief said the world’s biggest economy will continue to need stimulus.

Back home, Wednesday’s trading session turned out to be a disappointing one for the Indian equity markets, as investors booked profit after last session’s rally ahead of the start of official Q1FY14 earnings  season with Infosys’ releasing its Q1 numbers on Friday. Investors also turned cautious tracking weakness in rupee, the Indian currency after recovering in last session on the SEBI and RBI’s measures to control its fall, once again depreciated in early deals, despite RBI’s further efforts to check the fall, asking each state-run oil company to buy dollars from a single bank. Sentiments also got dented after the International Monetary Fund (IMF) cut India’s growth outlook for 2013-14 to 5.6 percent from the 5.8 percent it projected in April. Supportive cues from US markets provided the much needed support to local bourses initially. Investors’ morale got buttressed with Alcoa reporting a better than expected second quarter numbers. Moreover, most of the Asian counters too ended in the green on Wednesday. However, weakness in European market took their toll on domestic sentiments in second half and dragged the frontline gauges below their psychological levels. Back home, selling in index heavyweight Reliance Industries (RIL) too weighed on sentiments after Finance Ministry in its latest gas pricing formula reportedly told Oil Ministry that RIL must deliver outstanding gas at old rate of $4.2 and that upside needs to be capped as it cannot allow unlimited gains to the cdespite indicating tapering ompanies. Selling in shares of public sector oil marketing companies like BPCL, HPCL and IOC too dampened the sentiments as Crude oil prices moved higher and the Nymex crude surged to its fourteen-month high, tracking gains in the global equity markets and fears of supply disruption through the Suez Canal, on the increasingly fluid situation in Egypt. Finally, the BSE Sensex lost 145.36 points or 0.75% to settle at 19,294.12, while the CNX Nifty declined by 42.30 points or 0.72% to end at 5,816.70.

Asian shares hit 3-week high on Bernanke's comments

Financial markets have recently sold off on concerns that the Fed may begin to scale back its $85 billion a month bond-buying programme as soon as September.

But Bernanke's remarks, which played down the strength of last week's June payrolls report, prompted investors to reassess the risk of an early end to the Fed's programme. They cut long dollar positions and sent U.S. Treasuries prices higher.

"I was pretty shocked with this selloff this morning. Obviously, Bernanke kicked it all off, but it was a bit of a delayed reaction," said Bart Wakabayashi, head of forex at State Street Global Markets in Tokyo.

"I'm hearing there were some margin calls, stop losses triggered there, and it moved down, so it seems like it's pretty thin and maybe some Asian players were trying to unwind their dollar longs.

"But it does seem like a bit of an overreaction. Having said that, it's a bit surprising, all of a sudden, the change in the tone of Bernanke, so it's a whole new world all of a sudden."

The dollar index added 0.3 percent after dropping 1.8 percent on Wednesday - a magnitude not seen since 2008-2009 at the height of the global financial crisis.

The euro surged 1.4 percent after earlier hitting a three-week high of $1.32085. Against the yen, the dollar eased 0.3 percent after falling to a two-week low of 98.20 yen.

Commodity currencies also jumped against its U.S. peer with the Australian dollar climbing as high as $0.9300, putting further distance from a 34-month trough of $0.9036 plumbed just last week.

The Australian dollar was also aided by a surprise increase in Australian employment in June, a result that may lessen the chance of the central bank lowering interest rates further in the short-term.

M&M to observe 'No Production Days'

Mahindra & Mahindra Ltd has announced that the Company, as part of aligning its production with sales requirements, would be observing 'No Production Days' at its Automotive Plants for a period ranging from 1 to 8 days during the remaining period of July, 2013.
Further the Company would also informed that one of its wholly owned subsidiaries viz. Mahindra Vehicle Manufacturers Limited would also be observing 'No Production Days' for about 8 days during the remaining period of July 2013 at its Plant situated at Chakan.
The Management does not envisage any adverse impact on availability of vehicles in the market due to adequacy of vehicle stocks to serve the market requirements.

Gap up opening for Sensex, Nifty

A lot may be accomplished in the market without anything really happening except that the Fed had reiterated something he spoke recently. Policymakers have learned the hard way to treat financial stability as a top goal, said Bernanke who says he has reserved his comments for July 17-19 when he will address the House of Representatives Financial Services Committee and the Senate Banking Committee.

The minutes from the Fed's June meeting showed many of the 12 Fed voting officials said they need to see further improvement in the job market before mulling winding down the stimulus program. Bernanke however didn't signal any changes in the Fed's bond-buying program, which has kept long-term interest rates low and encouraged more borrowing and spending.

A strong start is in the offing for the Indian market. Besides positive global indications, the domestic currency too seems to be in control. Government action to arrest the free fall seems to be working; the Indian Rupee closed at Rs. 59.78 closing below the Rs. 60/$level.

The Dow Jones fell marginally, the S&P 500 closed flat while the Nasdaq gained half a percent.

Japan's Nikkei 225 is flat while Hong Kong's Hang Seng index is 1.5% up. South Korea's Kospi index has gained almost 2% while China's Shanghai index is up 1.5%.

US crude oil prices added 0.2 percent after trading as high as $106.95 a barrel.
The finance ministry has asked the oil ministry to consider putting a cap on natural gas prices under the formula approved by a Cabinet panel last month. The companies in this sector already saw some weakness on account of this news on Wednesday.

A decision on increasing foreign direct investment limits could be postponed beyond this month as key ministers have not yet submitted their views on the same.

IndusInd Bank emerged as the front runner to buy Royal Bank of Scotland's India retail assets and a deal could be announced as early as next week, says a report adding that besides IndusInd Bank, others in the fray include Kotak Mahindra Bank, Axis Bank and Standard Chartered Bank.

IndusInd Bank Q1 FY14 net profit is up 42% year-on-year at Rs. 3.35bn.

Saudi Arabia and United Arab Emirates have pledged $8 bn aid to Egypt.

AGMs today include Federal Bank, JSL Industries and Kakatiya Cement.

Malabar Trading Co board will meet today to consider fund raising

Kalindee Rail Nirman (Engineers) could be in focus as it considers fund raising.

KEI Industries will consider allotment of shares and convertible warrants on a preferential basis National Pharmaceutical Pricing Authority has capped prices of 25 widely used drugs including painkillers and antibiotics.

TRAI has issued new guidelines for activation and de-activation of value-added services.