Market
may open flat to slightly higher
DATE: 18/09/2012
Trading of S&P CNX
Nifty futures on the Singapore stock exchange indicates that the Nifty could
gain 8.50 points at the opening bell. All eyes today, 18 September 2012, are on
Trinamool Congress (TC) chief and West Bengal Chief Minister Mamata Banerjee as
her 72-hour deadline to the UPA government at the centre to roll back fuel
price hike, LPG cap and FDI in retail ends. The Trinamool Congress which has
six ministers will decide today, 18 September 2012, whether to remain with the
UPA. TC has a total of 19 Lok Sabha MPs, making her the second-largest
constituent of UPA, after the Congress. Last week, the government allowed FDI
in multi-brand retail, raised diesel prices by Rs 5 a litre and capped the
number of subsidised LPG cylinders at six a year. TMC chief Mamata Banerjee
immediately responded with a 72-hour deadline for withdrawing the decisions.
Hindalco Industries on
Monday said it has achieved financial closure for its Rs 13195 crore greenfield
Aditya Aluminium smelter project at Lapanga in Odisha. The project has been
funded in a debt equity ratio of 75:25 with a debt component of Rs. 9896 crore.
The debt carries a tenor of 12.5 years and is priced at the SBI base rate plus
125 basis points (bps) which presently works out to 11.25% per annum. SBI
Capital Markets and IDBI Bank led the debt syndication, which saw a huge
participation from almost the entire banking community with a total of 28
commercial banks and financial institutions participating in the transaction,
Hindalco said in a statement issued after trading hours on Monday, 17 September
2012.
PSU OMCs will be focus
after the Ministry of Petroleum & Natural Gas on Monday, 17 September 2012,
said that PSU OMCs are currently (effective from 16 September 2012) incurring
daily under-recovery of about Rs 498 crore on the sale of Diesel, PDS Kerosene
and Domestic LPG. The Petroleum Planning and Analysis Cell (PPAC) under the
Ministry of Petroleum and Natural Gas reviewed international prices of crude
oil and petroleum products during the 1st fortnight of September 2012. The
under-recovery on High Speed Diesel (HSD) applicable for 2nd fortnight of
September effective 16 September 2012 remains at high level of Rs 13.86 per
litre despite last week's price hike, the Ministry of Petroleum & Natural
Gas said in a statement. In case of PDS Kerosene and Domestic LPG the
under-recoveries are Rs 32.70 a litre and Rs 347 per cylinder respectively for
September 2012 as the same are reviewed on monthly basis, the Ministry of
Petroleum & Natural Gas said.
Bhushan Steel turns ex-dividend
today, 18 September 2012, for dividend of 50 paise per share for the year ended
31 March 2012 (FY 2012). Hindustan Copper turns ex-dividend today, 18 September
2012, for dividend of Rs 1 per share for FY 2012. Jaiprakash Associates turns
ex-dividend today, 18 September 2012, for final dividend of 50 paise per share
for FY 2012. Jaypee Infratech turns ex-dividend today, 18 September 2012, for
final dividend of 50 paise per share for FY 2012.
Tech Mahindra
announced after market hours Monday the acquisition of 51% stake on a fully
diluted basis in Comviva Technologies, a Bharti Group Company, and a global
leader in providing mobile Value Added Services (VAS), Mobile Money and Mobile
Payment solutions, for Rs 260 crore. The deal will be subject to regulatory
approvals. The new brand identity will be Mahindra Comviva, reflecting the
combined strength and spirit of both the entities. As part of this arrangement,
Tech Mahindra will make an upfront payment of Rs 125 crore towards the stake
acquired and the balance amount of Rs 135 crore will be paid out over a period
of five years based, on Comviva achieving mutually agreed performance targets.
The current promoters will continue to hold a 20% stake on a fully diluted
basis in Comviva, post the deal closure.
Commenting on this
move, Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said: "This
acquisition is a significant step forward, in our vision of being a complete
and comprehensive partner to our clients and like always, we are confident of
making this a successful venture for our stakeholders. In addition to the
market leading capabilities, this will also add to our relationship with large
operator groups across the world."
"The world of
mobility today encompasses wide range of solutions, where customers be it
enterprise or consumers are driving their business and entertainment needs
through mobility. This acquisition marks our strong intent and entry into the
world of mobility products. We are adding significant capability in areas such
as payments and VAS," said CP Gurnani, Managing Director, Tech Mahindra.
Key benchmark indices
edged higher on Monday, 17 September 2012, as the government after market hours
on Friday, 14 September 2012, announced slew of reform measures. The BSE Sensex
advanced 78.04 points or 0.42% to 18,542.31 on that day, its highest closing
level since 25 July 2011.
Foreign institutional
investors (FIIs) made heavy purchases of Indian stocks on Monday, 17 September
2012, as per the provisional data. FIIs bought shares worth a net Rs 2252.17
crore on Monday, 17 September 2012, as per the provisional data from the stock
exchanges. FIIs had bought shares worth a net Rs 2859.80 crore from the
secondary equity markets on Friday, 14 September 2012, as per data from
Securities & Exchange Board of India (Sebi).
The government after
market hours on Friday, 14 September 2012, announced liberalization of foreign
investment rules in retail, aviation and broadcasting sectors. While the
government has allowed up to 51% foreign direct investment (FDI) in multi-brand
retail trading (MBRT), in the aviation sector the government has allowed
foreign airlines to acquire up to 49% stake in Indian carriers.
The Reserve Bank of
India Monday, 17 September 2012, announced a reduction of 25 basis points in
the cash reserve ratio (CRR) of scheduled banks to 4.5% of their net demand and
time liabilities (NDTL) effective the fortnight beginning 22 September 2012
from current 4.75% after mid-quarter review of monetary policy. The reduction
in CRR will inject around Rs 17000 crore of primary liquidity into the banking
system, RBI said in a statement. The RBI kept its policy rate viz. the repo
rate unchanged at 8%, stating that inflationary pressures, both at wholesale
and retail levels, remain strong. As inflationary tendencies have persisted,
the primary focus of monetary policy remains the containment of inflation and
anchoring of inflation expectations, RBI said.
While the recent
upward revision in diesel prices and rationalisation of subsidy for LPG is a
significant achievement, in the short-term, there will be pressures on headline
inflation, RBI said. Over the medium-term, however, it will strengthen
macroeconomic fundamentals, RBI said. Over the longer run, holding down
subsidies to under 2 per cent of GDP as indicated in the Union Budget for
2012-13 is crucial to manage demand-side pressures on inflation. Containing
inflationary pressures and lowering inflation expectations warrant maintaining
the momentum of recent policy actions to step up investment, alleviate supply
constraints, and improve productivity, RBI said.
RBI said since the
First Quarter Review (FQR) of Monetary Policy in July while growth risks have
increased, inflation risks remain. Mitigating the growth risks and taking the
economy to a higher sustainable growth trajectory requires concerted policy
action across a range of domains, a process to which last week's actions made a
significant contribution, RBI said. Monetary policy also has an important role
in supporting the growth revival, RBI said. However, in the current situation,
persistent inflationary pressures alongside risks emerging from twin deficits –
current account deficit and fiscal deficit - constrain a stronger response of
monetary policy to growth risks, RBI said. Accordingly, as this process
evolves, the stance of monetary policy will be conditioned by careful and
continuous monitoring of the evolving growth-inflation dynamic, management of
liquidity conditions to ensure adequate flows of credit to productive sectors
and appropriate responses to shocks emanating from external developments, RBI
said.
Finance Minister P.
Chidambaram, Monday, 17 September 2012, said the government will unveil more
measures to narrow fiscal deficit and to boost economic growth, which may
encourage the central bank to cut interest rates at its next monetary policy
review on 30 October 2012. He didn't elaborate on what the measures could be.
RBI is scheduled to undertake Second Quarter Review of Monetary Policy -
2012-13 on 30 October 2012.
Meanwhile, the
government's attempts to boost economy by allowing foreign direct investment in
retail, its decision to raise diesel prices and restrict allotment of subsidies
cooking gas cylinder to households and disinvestment in of stake in state-run
companies have sparked protests across the political spectrum.
Eight non-Congress,
and non-BJP parties - including Samajwadi Party (SP), CPI, CPM, BJD and TDP -
have decided to called for a nationwide bandh on Thursday, 20 September 2012,
against a clutch of government decisions like allowing FDI in multi-brand
retail, disinvestment in navratna companies, hike in diesel price and cut in
subsidy on gas cylinders. The Bharatiya Janata Party (BJP) has already given
call for a 'Bharat Bandh' on the same day. But NDA constituent Shiv Sena
decided to stay away from the strike call, citing Ganesh festival as the
reason. The Maharashtra Navnirman Sena (MNS), led by Raj Thackeray, has also
announced that MNS will not be a part of the shutdown call citing similar
reasons.
Opposition parties and
some allies of the government are demanding rollback of diesel price hike due
to worries that inflation would accelerate. Their opposition to FDI in
multi-brand retail is due to fears that the entry of foreign retail giants like
Wal-Mart Stores Inc. and Carrefour S.A. will force local mom-and-pop store to
close down.
The Full Planning
Commission, chaired by Prime Minister Manmohan Singh on Saturday approved the
12th Five Year Plan document. The plan which extends from 2012 to 2017 has
lowered the economic growth target across five years to 8.2%. Besides other
things, the 12th Plan seeks to achieve 4% agriculture sector growth during the
Plan period. The growth target for manufacturing sector has been pegged at 10%.
The Cabinet Committee
on Political Affairs (CCPA) raised price of heavily subsidised diesel by Rs 5
per liter on Thursday, 13 September 2012 to balance government's fiscal deficit
situation. The CCPA also restricted the supply of subsidized LPG cylinders to
each consumer to six cylinders (of 14.2 kg) per annum.
+POWERED BY: CAPITAL MARKET NEWS
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