MyValueResearch

Dawn of 13thNov08

INR biggest 1 day fall in 12 Y, PM Aide says rate cut, inflation poll-10.37%, GDP 7%from 9%, US $700 Bl not for bad mortgages- Market Tumble, Unitech to sell office Omaxe to sell stake, PE door opens

RUPEE

Ø INR falls 2.4 %, biggest single-day fall since Feb. 96 Heavy dollar demand from state-run banks hurts INR may test 50/dlr on Friday if cbank stays away INR posted its biggest single-day fall in more than 12 years on Wednesday, hit by rising outflows from the local share market and heavy dollar demand from state-run banks to meet commercial operations. INR ended at 49.30/32 per dollar, 2.4 % weaker than Tuesday’s close of 48.1250/1400. On Oct. 27, it fell to a record low of 50.29. 1M NDF were quoting at 50.04/19, weaker than the onshore spot rate, indicating a bearish outlook for the currency in the near term.

BONDS

Ø Yields closed at their lowest in more than a week on Wednesday, as forecasts of easing inflation were seen freeing the RBI’s hands to cut interest rates further in coming months. 10Y ended at 7.60 %, eight basis points below Tuesday’s close of 7.68%. A Reuters poll showed inflation moderating to 10.37 % in early November, below 10.72 % a week Suresh Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said on Tuesday there would be scope for more rate cuts, and added the RBI may take action if overnight rates rise.

CALL

Ø Rates ended little changed on Wednesday as demand for funds prevailed in the banking system ahead of treasury bill auction outflows and bond sale due on Friday. Call rates closed at 7.30/40 %, slightly lower than 7.40/7.50 at close on Tuesday. RBI pumped in a total of 109.9 billion INRs in to the system through the repo auctions, indicating some tightness in available cash.

STOCKS

Ø Shares fall on deepening global recession worries . Gains on industrial production data prove shortlived. Reliance, ICICI lead fall .Shares fell 3.08 % on Wednesday, taking their losses over two days to 9.5 % as investor fears of a global recession and a local downturn remained dominant, despite some data meeting expectations. Economists have cut forecasts for Asia’s third-largest economy, with many expecting growth to slow to 7 % or lower in the year to March 2009, sharply down from rates of 9 % or higher clocked in the past three fiscal years.

GLOBAL

Ø DJIA 8,282.66 -411.30 Nikkei 8,250.05 -445.46 FTSE 4,182.02 -64.67 H Seng 13,122.05 -817.04 US10Y 3.656 -0.104 EUR 1.2469 Yen 95.72 Gold 724.75 Crude 55.85

Ø U.S. stocks tumbled on Wednesday after the United States backed away from using its $700 billion bailout to mop up sour mortgages and added to uncertainty about how the government plans to revive bank lending.

Ø European shares slid on Wednesday, led lower by banks and oils that fell on worries of more losses and a darkening economic picture, and Wall Street fretted over changes to a $700 billion financial sector bailout.

Ø Nikkei average sank 5.1 % on Thursday as a strong yen and a wave of grim earnings forecasts from the US boosted worries about the global economy, dragging tech exporters such as Sony Corp lower.

Ø The U.S. dollar tumbled against the yen on Wednesday as investors shunned risky assets after comments by U.S. Treasury Secretary Henry Paulson heightened concerns about the economy and sparked a global sell-off in equities.

Ø Bank of England warned the British economy will shrink sharply next year. BoE Governor Mervyn King also bolstered expectations of further aggressive interest rate cuts.

Ø Gold slipped 1 % on Wednesday as the dollar firmed and weaker oil prices weighed on the market, but firm physical demand was underpinning prices.

Ø Copper steadied into the close on Wednesday, bouncing from an early slide to three-year lows, as rising inventories and decelerating economic growth continued to highlight the industrial metal’s dim demand prospects.

Ø U.S. crude futures tumbled on Wednesday amid a bleak demand forecast from the government and as Wall Street skidded again, along with other major equities markets, on deepening economic worries.

INDIA FRONT PAGE

Ø United Spirits is in partnership talks with the world’s largest alcoholic drinks group, Diageo to buy 14.99 % stake for $450 million to $500 million in the Indian firm and have two members on the board.

Ø The Foreign Investment Promotion Board has ruled foreign investment can flow into private equity funds registered as trusts.

Ø Unitech Ltd has put a 200,000 sq. ft. office in Saket, New Delhi for sale. The real estate developer is in talks with HDFC to sell the property for 4.5 billion-5 billion INRs.

Ø ONGC Videsh, has bagged an oil block in Colombia as part of its 50:50 consortium with Pacific Stratus. The contract will be signed in a few weeks.

Ø TRAI has recommended that no political party, state government or panchayati raj body will be able to broadcast and distribute cable channels and no religious body will be able to own a broadcasting station.

Ø Real-estate firm Omaxe Ltd is looking at offloading 35-45 % equity in its construction division.

Ø French bank Societe Generale has sold 3.25 % stake in Varun Shipping Co Ltd for about 2.5 billion INRs to the founding group company, Khatau International, at 50.55 INRs a share.