MyValueResearch

Dawn of 12th Feb 09

INR opens weaker on Asian Stocks, Govt Aide says 460 billion of additional borrowing , REUTERS FORECAST inflation 4.43 , IIP at 1.3

Gold Shines , US Stimulus cheers west but disappoints Asia OIL Slips and Slips 4% more

Rumors of ICICI top guard changing, PNB Chairman tipped to be Deputy Guv., DLF Slow down , EPFO may size Subiksha , Tata may sell property, Primal may be sold to Glaxo, Reliance Infatel to sell stake

Rupee
INR opened down on Thursday as falls in Asian stocks markets raised concerns about FII outflows, but the dollar’s weakness against major currencies provided some support. * At 9:05 a.m., INR was at 48.71/72 per dollar, after touching a low of 48.75 in opening deals, compared with Wednesday’s close of 48.69/70 per dollar. IIP and WPI data on Thursday should provide an update on the economy and prospects for further rate cuts. Inflation rate is forecast to have fallen to 4.43 %, its lowest in just over a year at the end of January due to a cut in state-set fuel prices, a Reuters poll showed. Industrial output is forecast to have risen in December by 1.3 % from a year earlier, about half November’s 2.4 % increase but stronger than October’s 0.3 % fall, a Reuters poll showed.

Bonds
Yields edged lower on Thursday on expectations the central bank may cut interest rates further to shore up the economy. A 50-basis point cut in rates to a record low of 2 % by South Korea also bolstered sentiment. dealers said. WPI and IIP will also be keenly watched. At 9:25 a.m., the yield on the 8.24 % 2018 f was 6.22 %, below Wednesday’s close of 6.30 %.

Stocks
Shares are seen starting lower on Thursday after losses in Asian markets on rising risk aversion on uncertainty about the global outlook. There could be some support from industrial output and inflation data due around noon traders said. Asian shares were trading lower as investors disappointed by the contents of a U.S. bank bailout moved to lock in profits

Call
Rates were little changed on Wednesday due to lower demand for funds as most banks have already completed their funding needs for the current reporting fortnight. Call rates ended at 4.10/15 %, from Tuesday’s close of 4.00/20 %. India will borrow an extra 460 billion INRs between Feb. 20 and March 20, a finance ministry official said on Tuesday. Banks parked a total of 458.45 billion INRs with it via the reverse repo window, while no bank borrowed funds through the repo route, indicating a surplus in the system.

Global
DJIA 7,939.53 +50.65 Nikkei 7,759.67 -186.27 FTSE 4,234.26 +21.18 H Seng13,378.40 -160.81

EUR 1.2894 Yen 90.39 Gold 938.00 Light Crude 36.06

Ø U.S. stocks rose in a choppy session on Wednesday after lawmakers reached a deal on a $789 billion stimulus package that is seen as crucial to reviving the recession-hit economy.

Ø FTSE ended 0.5 % higher on Wednesday, buoyed by a rally on Wall Street and gains from commodity stocks and Reckitt Benckiser > which offset weakness in banks and property issues.

Ø Nikkei stock average fell 2.3 % on Thursday as investors grappled with disappointment over a U.S. bank bailout plan, with a slightly stronger yen hitting exporters such as Canon Inc

Ø USD rose against the yen and euro in volatile trading on Wednesday, bolstered by a safe haven bid, with investors remaining uncertain about the final size and scope of the U.S. stimulus package.

Ø U.S. gold futures rose more than 3 % to reach a 6-½ month high on Wednesday, fueled by record investment demand in bullion-backed exchange-traded funds and heavy stop-loss buying.

Ø Copper fell 3.4 % on Wednesday, dragging most of the industrial metals lower, as sliding Chinese copper imports further clouded demand prospects for the industrial metal.

Ø Oil futures tumbled more than 4 % on Wednesday, weighed down by a large increase in domestic crude stocks last week and a gloomy oil demand forecast from the International Energy Agency.

India Front Page
Ø Shikha Sharma, managing director of ICICI Prudentail Life Insurance, may step down within a few months. Renuka Ramnath, managing director and chief executive of ICICI Venture may also quit. ICICI Bank denied any such development was in the offing.

Ø Piramal Healthcare has roped in investment bank, Credit Suisse, as an advisor for a take over deal. GlaxoSmithKline and Sanofi are interested buyers.

Ø Indian Hotels Co Ltd which runs the ‘Taj’ hotel brand, plans to sell its Colaba-based corporate office, Oxford House. The hotelier could earn over 600 million from the sale and the funds could be used to refurbish the Heritage wing of its Taj Mahal Palace, damaged in the Mumbai attacks.

Ø The government plans to extend the tax concessions enjoyed by the technology parks and 100 % export-oriented units beyond March 2010.

Ø EPFO in Chennai intends to attach the properties of the promoters of Subhiksha to meet provident fund dues for around 4,500 employees. The retail chain is in talks with banks and financial institutions to restructure debt worth 7 billion INRs.

Ø DLF Ltd has stopped work at two of its biggest mid-income housing projects. The developer has already stalled at least a quarter of its commericial projects.

Ø PNB chairman and managing director, K.C. Chakraborty, has emerged as the front runner for the post of a deputy governor of the Reserve Bank of India. The post, in charge of banking regulation, has been vacant since the term of V Leeladhar came to an end in December.

Ø Reliance Infratel, the tower company of Reliance Communications Ltd plans to offload 5 % of its equity stake. It is said to be in discussion with seven global strategic investors and is looking to bring in as much as $500 million.

Ø Oil and Natural Gas Corp has said its profits are likely to fall by 30 % in 2009/10 due to the drop in international prices of oil.