± Infosys plans salary hike across board in April 2010. (ET)
± NTPC and L&T keen to partner IOC for the LNG project. (BL)
± BHEL set to bag orders for steam turbine generators.(BL)
± Hindalco has suspended operation at its Nagpur unit due to labour problems. (BL)
± SBI plans to scale up the intake of the clerical staff to 25,000 from initial estimate of 11,000. (BS)
± SAIL and Tata Steel hike prices by up to Rs2,000/ton. (BS)
± Ashok Leyland February sales up 142% yoy to 7,869 units. (BS)
The bulls seem to be able to bear any apprehensions for now. It’s not as if risk appetite is increasing, but who wants to miss a joyride! The indices have been on a firm footing as the health of the Indian economy appears to be getting better by the day. The Auto and cement numbers have given some reason to cheer. For those who rejoice in numbers of any kind, the total market cap of all the listed firms on the BSE has surged to Rs60,742bn, adding Rs2,410bn in three trading sessions since Budget Day.
With Finance Minister making it clear that fuel price rise is here to stay, keeping inflation under control will remain a challenge.
A flat start is in the offing; a reversal of recent fortunes could well take place during the day depending on how the global events pan out. Expectations though are that the Nifty may breach the 5100 mark before any worthwhile correction. The Asian markets are indecisive for now. US indices wiped out gains following worries about the job and manufacturing reports expected in the coming days.
Fantastic performance
of our last recommendation
Tata Motors said it would bring an electric version of the Nano, the world’s cheapest car, to Europe within three years, starting with Britain and Scandinavia. (ET)
Karnataka Bank has entered into a memorandum of understanding with Tata Motors to finance purchase of passenger and goods transportation vehicles manufactured by the company. (BL)
Corus the British-Dutch subsidiary of Tata Steel has sold its 50% stake in Cindu Chemicals, a Netherlands-based tar distillation plant, to Koppers International, as part of the overall Tata Group strategy to exit non-core areas. (ET)
GAIL and Maharashtra Industrial Development Corporation plan to establish a joint venture company for distributing gas to industrial consumers in the state. (BL)
BHEL secured an order worth ~Rs57.8bn from Indiabulls Group firm Elena Power & Infrastructure Ltd, to set up projects at Nashik (5x270 MW) and Amravati (5x270 MW). (BL)
Today, it’s the season of recalls as far as the global auto industry is concerned even as the Indian auto story remains on a firmer footing so far. At the same time, policymakers across the globe, barring a few troubled spots, are reversing the crisis-fighting stimulus. India has already made its intentions clear on stimulus withdrawal as the economy has rebounded strongly. One only hopes that the UPA doesn’t succumb to political pressure on the issue of fuel price hike.
There might be some reversal on the bourses after two successive days of Budget-related gains. The start will most probably be a flat one due to uncertain global cues. US market erased bigger gains to close slightly higher. European indices did somewhat better and it’s a mixed bag for Asian markets.
The Budget has prevented further breakdown in sentiment but the upside too appears capped a little above these levels. Among the key factors to watch out for will be FII flows, which have turned positive again. Summer is here for now but it will be the dark clouds of monsoon which will bring the desired sunshine on the bourses.
FIIs were net buyers in the cash segment on Tuesday at Rs13.35bn on a provisional basis while the local funds were net sellers of Rs9.77bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs28.17bn. On Friday, FIIs were net buyers of Rs10.94bn in the cash segment.
± SAIL says hike in excise duty will be passed on to customers resulting in a Rs500-600 per ton price hike on long products. (BL)
± Bhushan Steel plans to invest about Rs280bn to set up a value-added steel plant in Karnataka. (DNA)
± Maruti Suzuki would raise prices between Rs3,000 to Rs13,000 across various models, with immediate effect. (DNA)
± Cement companies across all regions have increased prices in the range of Rs10-12 per bag to offset the twin effects of hike in excise duty and rise in diesel rates. (ET)
± RIL is on the verge of losing its bid for bankrupt petrochemical company Lyondell-Basell, as it baulks at rising valuation due to the recovering global economy. (ET)
± Coal India will increase its spending by three times to Rs98bn in the next financial year, primarily to fund its expansion and acquisition programmes. (FE)
± Hindustan Dorr-Oliver has acquired Sheffield-based DavyMarkham, a 180-year-old company involved in design, manufacture and assembly of large equipment used in mining, power, oil, gas and nuclear sectors. (BS)
± Tata Steel rules out raising equity to meet covenants. (BS)
± MphasiS Ltd is scouting for a company with revenues in the region of US$45-60mn and having a good presence in the cloud computing space, with a view to growing its Infrastructure and Technology Outsourcing (ITO) business. (BS)
± SAIL to spend ~Rs123bn in the next financial year largely to fund its mega expansion programme. (FE)
± Bhushan Steel would spend Rs280bn to build a 6 lakh tonnes steel plant in the Bellary region of Karnataka. (ET)
± Nabard plans to provide Credit Plus services through the Farmers’ Clubs. (BS)
± Hike in customs duties and excise duties on crude and petroleum products
± Petrol and diesel prices raised to offset budget impact
± GRMs to be lower on account of lower duty differential
± Hikes to increase inflation by 20bps
± Further price hikes and de-regulation warranted
± GRMs to stabilize at current levels
± Sector to underperform unless de-regulation happens
± Higher excise duties to impact demand in the near term
± Higher disposable income on back of change in personal tax slabs to drive long term demand
± Higher fuel prices could impact profitability of fleet operators
± Thrust on rural employment generation
± Price hike by OEMs to cushion margin impact
± Higher weight on R&D deduction to increase investment for fuel efficient and less polluting technology
Today,i nvestors have had a long weekend to put their knowledge at work after the budget. With the major event risk out of the way, a lot will again depend on how the global events play out. The market is expected to open on a positive note. Stock-specific and sector-specific activity will be the order of the day as investors understand the impact of the budget on their holdings.
Asian stocks have pared their gains after a positive start. US stocks climbed on Monday taking the Nasdaq and S&P 500 into positive zone for the year. AIG's $35 billion asset sale and a some mergers in the pharma space brought some cheer. A Greek bailout package is being closely watched and could have a bearing on the market sentiment. The consumption story is here to stay. With the budget putting in more money in the hands of the consumers, a lot of consumption-related stocks will see renewed action.
The EXIM numbers and sales numbers from auto and cement firms will be among the data points tracked today.
REMEMBER?? OUR SMS WAS
"Buy IDFC at 147
SL 141.90
Target 154 & 159"
Orient Bank of Commerce (BUY, CMP Rs277, Target Rs295): On the daily chart, the stock broke out from a four week resistance line. The stock touched a low of Rs253 in early February 2010, which has proved to be an intermediate low. Since then, the stock has created multiple higher bottom formations. The supportive technical oscillators are positive and the upmove which begun last week from the levels of Rs258 has taken support at 100-DMA. We recommend traders to buy the stock between the range of Rs275-280 for target of Rs295 with a stop loss of Rs268.
± Six core industries grew by 9.4% yoy in January 2010. (BS)
± Power Tariffs across the country may have to be revised upwards in excess of 7% annually if the Government goes by the recommendation of the 13th Finance Commission. (ET)
± Government has invited applications from telecom operators for bidding for 3G and Broadband wireless access spectrum to be auctioned starting April 9. (BL)
± Gujarat proposes 5% increase in tax on tobacco products. (BL)
Today, is the Big Budget day. No point in speculating now on what it will have in store for the India Inc. and the people in general and the market in particular. Let’s wait and listen. With the Finance Ministry having accepted most recommendations of the 13th Finance Commission, there is not much suspense left so far as fiscal consolidation is concerned. The fact that the fiscal stimulus has to be unwound is a no-brainer. Some announcement on GST implementation is likely. Some sops may be retained for sectors that are yet to recover fully.
Expectations of big bang reforms are minimal. One space which needs to be dealt with urgently though is the huge subsidies, especially to the oil sector.Whether the Finance Minister takes any concrete step in this direction is anybody’s guess. On the whole, the market will be volatile, which is a given on the Budget day. The start will be nervous due to mixed global markets.
The ministry's economic survey for the financial year 2009-10 urged a calibrated exit from fiscal stimulus, which cushioned India's economy from the worst of the global downturn but pushed the fiscal deficit to a 16-year high of 6.8% of GDP.
The report, presented in Parliament ahead of Friday's Union Budget, forecast economic growth at 8.25%-8.75% in 2010-11, accelerating to over 9% the year after, compared with projected growth of 7.2%-7.5% in the current year.
SBI plans to raise up to US$4.3bn through a rights equity issue in 2010-11. The bank needs about half the amount to sustain growth over the next 5 years, the chairman was quoted as saying.
SBI to raise Rs200bn via right issue; needs over Rs500bn capital in the next five years. (ET)
ONGC is looking to enhance its presence in Africa and Latin America. (ET)
Wipro wins 10-year outsourcing deal from Punjab and Sind Bank. (BS)
SBI to buy significant stake in Tata Motor Finance says SBI chairman. (ET)
Bharti Airtel eyes US$7bn offshore loans to back its offer to buy Zain’s African cellular assets. (BS)
Government puts on hold the IPO of Satluj Jal Vidyut Nigam following poor response to the FPO of NTPC and REC. (ET)
Rahul Bajaj sells stake in Bajaj Electrical to Shekhar Bajaj. (BS)
ITC plans to foray the food market of UAE and Gulf Co-operation Council. (BS)
Mindtree to raise debt upto US$100mn. (BS)
Today Listing
Hathway Cable
(BSE Code: 533162)
Today,the fact that master blaster Sachin Ton-dulkar has overshadowed Mamata Banerjee is proof enough of how disappointing Railway Budget is. Populism took precedence over pragmatism. One only hopes the Finance Minister doesn’t fall prey to the temptation. Those batting around conventional wisdom of making some quick gain on railway-related stocks had to make a hasty retreat less their capital evaporates further.
Meanwhile, the Economic Survey will be unveiled today. Here again, we have seen that the Survey always talks of a spate of reforms urgently needed to accelerate India’s growth. But, the Budget hardly incorporates any recommendations made in the Survey. The key is to keep expectations low and one will not be disheartened. As for the markets, they are set for another colorless show. The opening is likely to be sedate to say the least. There might be some more volatility today due to the F&O expiry. Global cues are inconclusive. US market ended higher on reassurances from Federal Reserve chairman Ben Bernanke that he will keep rates at record low for some time to come. Asian markets are mixed. European shares managed modest gains.
The market is in a predicament and a bit nervous ahead of Budget. The NSE Nifty has been stuck in a range of 4800-4930 of late and is unlikely to make a big move anytime soon- at least not today. A long overdue breakout in either direction could take place only post the Budget. At the same time, one has to take into account the emerging global situation before jumping the gun.
FIIs were net buyers in the cash segment on Wednesday at Rs4.85bn on a provisional basis while the local funds were net sellers of Rs1.54bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers of Rs7.47bn. On Tuesday, FIIs were net buyers of Rs7.44bn in the cash segment.
Railway Minister Mamata Banerjee could be inspired to chart her on course when she presents Railway Budget today. She is unlikely to follow her predecessor though, who brought back glory to the Railways and earned plaudit for himself.
Cairn India's 670km long crude carrier pipeline is nearing completion and will be commissioned next month. (BL)
Maruti Suzuki admitted to recalling 100,000 A-Stars which were manufactured before August 22, 2009 to replace faulty components that could cause fuel leakages. (BS)
HDFC has ruled out any immediate hike in its lending rates given the surplus liquidity in the system and low credit demand. (ET)
The Punjab government has cleared the phase-I of Super Mega Mixed Use Integrated Industrial Park being developed by DLF Home Developers Ltd over an area of 1,250 acres, with an investment of Rs27bn in Mullanpur Local Planning Area. (BS)
Public sector banks and insurance majors step in to salvage the FPO of state-owned Rural Electrification Corporation which closed with the issue being oversubscribed 3x. (BS)
Axis Bank’s private equity arm Axis Private Equity is mulling to separate itself from the parent company in the coming weeks - a move that is part of the group’s overall restructuring plan. (ET)
UK-based GlaxoSmithKline’s plan to buy about 5% stake in Dr Reddy’s Laboratories for US$150-160mn is stuck and unlikely to happen. (ET)
Though Railway Minister Mamata Banerjee could chart her on course, she is unlikely to replicate the success of her predecessor, who brought back glory to the Railways and earned plaudit for himself. With an eye on West Bengal polls, ‘Didi’ might be inclined to play to the gallery. Too much populism and less emphasis on revenue generation could mar the sentiment further. A ‘Peace Train’ may be in the offing between Kanyakumari to Kashmir.
As for the markets, there is no peace or happiness at start. We expect a soft start owing to weak global markets. By itself, the Railway Budget is not expected to swing the mood on the bourses. That might happen when the Union Budget is out on Friday. But, even that might not be able to do so, given the concerns on local as well as global front. In short, the choppy consolidation phase may prevail for a while before the market breaks out of the current rangebound activity. The best way to overcome near-term uncertainty is to stay put and not do anything adventurous.
FIIs were net buyers in the cash segment on Tuesday at Rs5.5bn on a provisional basis while the local funds were net sellers of Rs1.8bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs2.38bn. On Monday, FIIs were net buyers of Rs396mn in the cash segment, while Mutual Funds were net buyers at Rs889mn, according to SEBI web site.
FIIs were net sellers in the cash segment on Monday at Rs1.02bn on a provisional basis while the local funds were net buyers of Rs1.17bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs9.11bn. On Friday, FIIs were net buyers of Rs2.93bn in the cash segment, while Mutual Funds were net sellers at Rs1.48bn, according to SEBI web site.
Today, though India has successfully weathered the financial storm, the market remains in a limbo. With budget a couple of days away, the lackluster trend may remain. We expect a slightly lower start given that most world markets are in the red.
The main indices have been stuck in a tight range amid concerns over fresh local as well as external headwinds. Even the broader market has been largely lackluster. FII flows have been erratic with a negative bias. Buying from local funds has been anything but tepid. The NSE Nifty could meet resistance at around 4930. It has to sustain above 4950 convincingly to signal start of a fresh advance. Conversely, a break below 4800 might take it as low as 4650. We expect Nifty to remain in a range of 4800 to 4900 in the near-term. Of course, the budget could potentially alter the current market direction.
Global markets made a tentative start to the week as concerns about the speed of monetary tightening and worries over Greece’s fiscal position policy linger.
± RIL has raised its offer for Lyondell Basell (LB) to US$14.5bn, US$1bn higher than its previous offer made in November. (BS)
± Power Grid Corp of India plans to raise Rs35bn by selling shares to fund an expansion of its grid to end blackouts. (BS)
± Religare Enterprises is close to buying a majority stake in US based venture capital and private equity investment firm Northgate for US$200m (ET)
± Tata Steel expects the arrival of equipment and machinery worth Rs5bn for the 6mtpa project at Kalinganagar by the end of FY10. (BS)
± The devastating fire at IOC’s Jaipur fuel depot has delayed commissioning of Cairn India’s pipeline for transporting crude from its Rajasthan oil fields. (BS)
± The Government is likely to approach state-owned banks and institutions, including the biggest local investor, Life Insurance Corporation (LIC), to bail out REC’s equity issue, if investors choose to stay away. (ET)
± Apollo Tyres plans to make Chennai its hub for both manufacturing and research and development (R&D) and is setting up a Rs20bn manufacturing facility. (BS)
± ITC plans to launch noodles under the ‘Sunfeast’ brand name. (BS)
± L&T will finalise plans to unlock value in its financial services arm in the next 12 months. (ET)
± US-based investor fund QVT has proposed an alternative debt restructuring plan to Wockhardt. (BS)
Power Finance Corporation (PFC) - BUY
CMP Rs235, Target Price Rs299, Upside 27.3%
Power Finance Corporation (PFC) with prominent market share (20%+) in power financing business is expected to be the key beneficiary of the hefty capex plan as articulated in the XIth Five Year Plan. The company has witnessed robust 32% CAGR in sanctions over FY05-FY09. With an improving investment appetite, we expect PFC to capitalise on the growth opportunity. Predominant exposure towards generation segment, increasing proportion of disbursement towards private sector and near zero levels of NPA would drive a sturdy 21% CAGR in balance sheet and 22% CAGR in loan book over FY09-11E. Recommend BUY.
± SBI may not raise deposit rates before May-June. (BL)
± REC FPO subscribed just 0.29 times receiving bids for 34.90mn shares out of the total issue size of 171.73mn shares on opening day. (BS)
± HDFC Bank increases the rates on fixed deposits by up to 150bps across maturities. (BL)
± Reliance MediaWorks has made an open offer to purchase a controlling stake in Fame India. (Mint)
± Bharti Airtel chairman says his company does not need any regulatory approvals in India to acquire African assets of Zain Telecom; hopes the deal would be concluded by the end of April. (TOI)
± Bharti Airtel lines up funds aggregating US$9bn from foreign and local banks for its proposed acquisition of Zain Telecom, as it settles to finance the entire deal through debt in the first phase. (ET)
± S&P and Crisil placed Bharti Airtel’s long-term bank facilities and debt programme on ‘rating watch with negative implications. (ET)
± Ambuja Cements plans to spend around Rs35bn to expand its capacity to 24mn tons from the current 19mn tons by year-end. (ET)
± Shree Renuka Sugars announces the acquisition of 51% stake in Equipav S.A. Acucar e Alcool, one of the largest sugar and ethanol companies in Brazil, for Rs15bn. (BL)
± Patel Engineering plans to dilute as much as 40% of equity in its power subsidiary, Patel Energy Resources. (BS)
± The Foreign Investment Promotion Board asks United Breweries Holdings to clarify some issues on an application to bring in foreign investment. (BS)
A good start to an action-packed week will at least save you the Monday blues. Asian markets are all smiling with the Nikkei 225 up nearly 3%. The Railway Budget, Economic Survey and Union Budget and F&O expiry will see the bulls and bears have a slug-fest especially later this week.
Besides the Q3 GDP figures later this week, the report of the 13th Finance Commission will also be closely watched. A new FDI policy is expected to be unveiled on March 31, according to a report which adds that the government has begun the process of restricting fresh foreign investment in the tobacco sector.
A lot of economic reports are due from the US this week, including numbers on housing and revision in third quarter GDP. The Federal Reserve Chairman Ben Bernanke will testify on the state of the economy and monetary policy on Wednesday.
Buy on dips :Videocon Inds at 220-240 hold for Target Rs255: The stock continues to be in an uptrend after breaking out a downward-sloping trend line since January 2010. The momentum indicator RSI is exhibiting positive movement suggesting further upside in the near term. We believe a move past Rs244 will see the stock testing January 2010 peak. Keeping in mind the above mentioned technical parameters, we recommend traders to buy the stock in the range of Rs220-240 with SL of Rs217 for target of Rs255 and Rs260 plus in coming days.
BUY AND HOLD