Markets end higher, US jobs data eyed

Market gained for the second straight day but ended off their day highs as investors turned cautious and booked profits at higher levels on concerns that the US Fed may tone down its monetary stimulus measures if the jobs data, due for release later today, is better-than-expected. Resumption of buying by foreign institutional investors also helped improve sentiment.

The 30-share Sensex ended up 85 points at 19,496 after hitting an intra-day high of 19,640 and the 50-share Nifty gained 31 points to close at 5,868 after topping the 5,900 mark in intra-day trades.

Foreign Institutional Investors were net buyers of equities in the cash segment worth Rs 164 crore, exchange data showed.

Asian stocks gained on Friday, while sterling hit a five-week low, after two of Europe's most important central banks surprised the market by assuring investors they were in no hurry to wind down stimulus. In Asia, Japan's Nikkei average closed 2.1% higher at 14,310 and touched a five-week high. Shanghai Composite ended flat while Hang Seng surged 1.9% and Straits Times ended up 0.8%.

European shares were trading mixed as investors remained cautious ahead of the US jobs data due for release later today. The CAC-40 and DAX were down 0.1% while FTSE-100 was trading 0.7% higher.

The BSE Oil and Gas index was the top sectoral gainer on the BSE up 1.5% followed by FMCG, Metal, Capital Goods and Bankex indices.

Oil and Gas shares rebounded from their lows after profit taking was seen in the previous sessions. Reliance Ind ended up 2.1% while ONGC gained 2.2%.

FMCG shares witnessed buying after Hindustan Unilever parent's open offer received good response. HUL ended up 1.4% after surging in early trades. Earlier, the stock had rallied over 4% in opening trades to touch an all-time high of Rs 631.95 after its parent company Unilever said it has acquired 14.8% stake against target of 22.5% in Indian unit. ITC ended up 1%.

Other Sensex gainers include, HDFC Bank and Tata Motors.

Bharti Airtel, Mah&Mah, TCS and ICICI Bank were some of the Sensex losers.

Among other shares, Gitanjali Gems and MMTC remained under selling pressure. MMTC ended locked in 5% lower circuit at Rs 79.75, its lowest value since July 2006 on BSE. Gitanjali Gems ended down 5% at Rs 183.

BGR Energy Systems dipped 3% to end at Rs 123 after the promtoers’s 3% share sale commenced on bourses. The promoter has fixed floor price at Rs 118 per share.

Accelya Kale Solutions Ltd (formerly Kale Consultants) has surged 7.3% to end at Rs 489, on winning outsourcing contract from Garuda Indonesia.

Parekh Aluminex ended in 10% upper circuit at Rs 49.10, extending its previous day’s 5% rally, after the company said the restructuring of the liabilities of the company are at the final stage of the approval.

In the broader market, the BSE Mid-cap ended up 0.2% while the Small-cap index gained 0.3%.

Market breadth ended strong with 1,205 gainers and 1,130 losers on the BSE.

ONGC EBITDA to improve by US$2bn a year from FY15: S&P

"We expect ONGC's EBITDA to improve by at least US$2bn each year on average from fiscal 2015 once India implements the gas price increase," said Standard & Poor's credit analyst Andrew Wong.

India-based Oil and Natural Gas Corp. Ltd. (ONGC) is likely to strengthen its cash flow and profitability from the next fiscal year, exceeding the earlier expectations of Standard & Poor's Ratings Services. The credit rating agency bases its view on a recent hike in domestic natural gas prices and ONGC's latest acquisition activity.

"We expect ONGC's EBITDA to improve by at least US$2.0 billion each year on average from fiscal 2015 [ended March 31, 2015] once India implements the gas price increase," said Standard & Poor's credit analyst Andrew Wong. "Our 'BBB-' rating and negative outlook on the company remain unchanged."

Standard & Poor's bases its EBITDA forecast on its current assumptions for oil and gas production, oil prices, and ONGC's contribution to the government's oil subsidies. On June 27, 2013, the Indian government announced an increase in domestic natural gas prices to US$8.4 per million British thermal units (mmbtu) from US$4.2 per mmbtu, starting April 2014.

We now believe ONGC's acquisition investments over 2014-2016 could be lower than we originally forecast. Our view reflects the company's failure to acquire a US$5 billion investment in the Kashagan Field in Kazakhstan, which we previously included in our forecasts. On July 2, 2013, the government of Kazakhstan announced its intention to use its pre-emption right to acquire ConocoPhillips' 8.4% stake in the field. Nevertheless, we still anticipate that ONGC's investment requirements will remain high.

"We expect ONGC to continue to pursue overseas investments to improve the country's fuel security. The increase in gas prices is also likely to encourage higher investments to boost domestic oil and gas production," said Mr. Wong.

Recently, ONGC Videsh Ltd., a wholly owned subsidiary of ONGC, and Oil India Ltd. entered an agreement to acquire Videocon Mozambique Rovuma 1 Ltd., which holds a 10% participating interest in the Rovuma Area 1 Offshore Block in Mozambique. We expect ONGC to hold a 60% stake in this investment. The transaction is still subject to certain government and regulatory approvals in India and Mozambique, as well as pre-emption rights.

"We believe ONGC's financial metrics will be stronger than we previously expected over the next three years, given the company's improving cash flows and its acquisition profile," said Mr. Wong. "We now estimate that ONGC's ratio of funds from operations to total debt will remain above 80%. The company's financial position should remain very strong for the rating despite its aggressive growth plans."

Nevertheless, ONGC continues to face high geographic concentration risk in India. Its international businesses also have higher operating risks than in India, in our view. In addition, the company remains exposed to the country risks of India, given its "very important" role for and "very strong" link to the government, as our criteria define those terms.

In our opinion, ONGC is sensitive to negative intervention by the Indian government. Our 'a' stand-alone credit profile for ONGC already factors in the company's ongoing contribution to the funding of the government's oil subsidies, which were higher than we expected for fiscal 2013.

In an extraordinary situation of severe sovereign stress, we believe the government could significantly increase ONGC's share of the oil-subsidy burden. ONGC also has counterparty credit risk relating to its customers: the government-owned oil marketing companies in India.

Thermax bags Rs 1700 crore order for supply of CFBC boilers

Thermax Ltd has informed BSE regarding a Press Release dated July 05, 2013, titled "Thermax bags Rs. 1700 crore order for supply of CFBC boilers" Thermax has received a prestigious order from a leading petrochemical company for the design, manufacture and commissioning of 9 CFBC high pressure boilers of 500 TPH each for two of its plants. The approximate order value is Rs 1700 crore.

Sensex rises 155 points on sustained buying

The Indian stock markets continued to trade higher on Friday in the noon session.

At 12.39 p.m., the Sensex was trading up 155.25 points or 0.80 per cent at 19,566.09, while the Nifty was up 42.85 points or 0.73 per cent at 5,879.80.

Among the BSE sectoral indices, Oil & Gas, FMCG and Metal gained the most.

The top Sensex gainers during the session were Jindal Steel, RIL and HDFC Bank. The losers included GAIL, M&M, Coal India, Bharti Airtel, NTPC and ICICI Bank.

The Nifty and the Sensex opened in the green after European Central Bank surprised investors with an assurance that economic stimulus would not be slowly wound down. Asian bourses also opened in the green on Friday as a result.

The Nifty opened the day at 5,890 up 53 points, and the Sensex opened at 19,569, up 158 points.

A report from Espirito Santo Securities said: “With interest rates likely to fall further, greater intent from the Government, and some private sector players able to monetise their assets to strengthen balance sheets, we think India’s capex cycle has likely bottomed.

"Despite this, a recovery is at least 18 months away as private sector investments are moderating due to their overleveraged balance sheets and the government is in no position to pick up this slack.

"The risk of the government resorting to populist measures (potentially derailing the ‘reform momentum’ in the process) as 2014 elections approach also cannot be completely ruled out.”

Volatility was down one per cent and the volatility index India Vix was quoting at 18.40.

In the Asian markets, the Nikkei was up 1.71 per cent at 14,258.60 while the Hang Seng was up 1.78 per cent at 20,833.20.

Ashoka Buildcon : Outcome of Committee Meeting

Ashoka Buildcon Ltd has informed BSE that the Company has allotted 52,651,030 equity shares of Rs. 5/- each fully paid to eligible shareholders who hold the shares on Record Date i.e. July 04, 2013, at the meeting of Empowered Committee of the Board of Directors of the Company held on July 05, 2013.

The total issued and paid-up share capItal of the Company after the allotment of bonus shares stands at Rs. 78,97,65,450/- divIded into 157,953,090 equity shares of Rs. 5/- each.

9 stocks that FIIs can buy next

In the quarter ending March, India had been a good hunting ground for the foreign investor community which  largely invested in sectors like IT, FMCG and private banks .  As many stocks in these sectors have now either become expensive or have reached closer to the prescribed FII holdings limit, question arises where will this community turn to now?


A recent Axis Direct report has shortlisted nine Nifty stocks based on criteria like float >USD 3 billion, trading volume >USD15m, headroom for FII limit >5 percent, and not in the top quartile of historical valuations. While six of these are private sector companies,  3 are in the public sector.

Of the above names, FIIs already hold record high position in NTPC and Mahindra and Mahindra .

RBI introduces interest pmt norms for frozen NBFC deposits

The Reserve Bank of India (RBI) introduced detailed procedures for payment of interest by NBFCs on public deposits that have been frozen under directions from government authorities. 

A request letter may be obtained from the customer on maturity. While obtaining the request letter from the depositor for renewal, NBFCs should also advise him to indicate the term for which the deposit is to be renewed. 

In case the depositor does not exercise his option of choosing the term for renewal, NBFCs may renew the same for a term equal to the original term, the RBI said in a notification on Thursday.

No new receipt is required to be issued. However, suitable note may be made regarding renewal in the deposit ledger, it added.

Renewal of deposit may be advised by registered letter / speed post / courier service to the concerned Government department under advice to the depositor. In the advice to the depositor, the rate of interest at which the deposit is renewed should also be mentioned, 
RBI further said.

If overdue period does not exceed 14 days on the date of receipt of the request letter, renewal may be done from the date of maturity. If it exceeds 14 days, NBFCs may pay interest for the overdue period as per the policy adopted by them, and keep it in a separate interest free sub-account which should be released when the original fixed deposit is released, the central bank said.

According to RBI, doubts have been raised on the payment of interest on such deposit which have been seized by the government authorities. 

NBFCs are at times required to freeze the term deposits of customer based on the orders of the enforcement authorities or the deposit receipts are seized by the enforcement authorities. 

Canara Bank gains after reduction in base rate

Canara Bank rose 1.75% to Rs 352.55 at 10:30 IST on BSE after the state-run bank said it has reduced the base rate by 30 basis points to 9.95% for all loans/advances viz. agriculture, MSME sector, retail and export credit with effect from 8 July 2013.

The announcement was made after market hours on Thursday, 4 July 2013.

Meanwhile, the S&P BSE Sensex was up 165.27 points or 0.85% at 19,576.11.

On BSE, 22,000 shares were traded in the counter as against average daily volume of 99,401 shares in the past one quarter.

The stock hit a high of Rs 355.30 and a low of Rs 351 so far during the day. The stock had hit a 52-week high of Rs 550 on 14 January 2013. The stock had hit a 52-week low of Rs 306 on 30 August 2012.

The stock had underperformed the market over the past one month till 4 July 2013, sliding 13.05% compared with the Sensex's 0.69% fall. The scrip had also underperformed the market in past one quarter, declining 11.52% as against Sensex's 4.87% rise.The large-cap state-run bank has equity capital of Rs 443 crore. Face value per share is Rs 10.

Besides cutting lending rate, Canara Bank has also reduced rate of interest on deposits on few maturity slabs.

Canara Bank's net profit declined 12.5% to Rs 725.38 crore on 4.8% growth in total income to Rs 9471.57 crore in Q4 March 2013 over Q4 March 2012.

The Government of India (GoI) holds 67.72% stake in Canara Bank (as per the shareholding pattern as on 30 June 2013).

11 Power projects worth Rs 52000 cr cleared

Its effect of Prime Minister, Manmohan Singh as there were about 11 power plants worth Rs 52,000 crore have been cleared, according to reports.

These projects, cleared by the Prime Minister’s Project Monitoring Group, were stalled for want of coal.
The fuel-supply agreements for the projects, including those promoted by Adani, GMR, Lanco and Haldia, will be signed by August 31, report was quoted as saying.

                 The Project Monitoring Group (PMG), set up in the Cabinet Secretariat, was tasked with removing bottlenecks for stalled projects, with an estimated bank funding of Rs 7-lakh crore. According to reports, the cleared projects includes Maruti Clean Coal and Power, TRN Energy, Korba West Power, DB Power, Jhabua Power, Adani Power Maharashtra, GMR Kamalanga Energy, Lanco Babandh Power, Talwandi Power, Haldia Energy and Prayagraj Power Generation Co. have a total generating capacity of 10,390 MW and involve an investment of Rs 52,349 crore.

Govt plans to increase sugar import duty to 15%

The imports are putting pressure on domestic prices and thereby preventing millers from clear cane arrears to farmers.

According to reports, the government is planning to increase import duty on sugar to 15% from the current 10%.

The imports are putting pressure on domestic prices.

"We had a meeting on this issue today. We have agreed to raise import duty on both raw and refined sugar to 15%," Food Minister K V Thomas said.
Minister also reported that they have taken cautious steps and agreed for a marginal increase of 5% fearing price rise at a time when state governments have started procuring sugar from open market for PDS.