MyValueResearch

Dawn of 15th June 2009

INR@ 47.82 , on $ strength , SGX Nifty down , 4 Auctions up 25% 14 weeks rise in SENSEX , IIP 1.4% better than expected, Advance tax 400 billion. $ Zooms on weak Euro zone IIP , Dow in +ver territory. SEBI promoters share holding on scanner , Pfizer to buy Wokhardt , Suzlon sell asset to park loan , GMR QIB runs in pricing trouble.

 

INR
INR @ 47.74 & is expected to edge lower on Monday following the $’s rebound against major currencies and weakness in some Asian stock markets. INR ended @ 47.61/62 on Friday, half a % below an intraday peak of 47.3750 hit in afternoon deals and steady with Thursday’s close. It fell 1 % on the week. The INR has risen 9.6 % from a record low of 52.2 in March.  IIP  rose 1.4 % in April from a year earlier, beating forecasts for a fall, driven by domestic demand and confirming hopes Asia’s third-biggest economy has weathered the worst of the global crisis.

 

BONDS
Yields are set to open higher on Monday as investors pare positions ahead of a 210 billion INRs supply of debt this week. 10Y ended at 6.89 % on Friday, unchanged from Thursday’s close, after rising to 6.94 %, its highest since April 8, following strong IIP. AUCTION: The RBI will auction 60 billion of t-Bills  on Wednesday and the Gov. will sell 150 billion of bonds on Friday compared to an original budgeted bond offering of 120 billion.  In the past 4W the Gov. increased the size of the past four bond auctions by 25 %.
 
STOCK
Indian shares fell 1.1 % on Friday as investors took profits on a more than 90 % rally since early March, but notched their 14th straight weekly gain for the first time in 4Y.     The market initially rode a rally across Asia and rose as much as 1.2 % after upbeat U.S. and Chinese economic data boosted sentiment. But an unexpected rise in Indian factory output in April bought the market down , since it implied that RBI  might not cut rates any further. SGX Nifty negative 34 points or .74%.

 

CALL
Rates closed flat on Friday as the ample cash surplus in the banking system helped banks meet RBI requirements comfortably. 3D call ended at 3.20/30 %, unmoved from its previous closing.  Although Indian companies are expected to pay an estimated 400 billion as advance tax due next week, the cash surplus is more than enough to meet the outflows, dealers said. Banks parked 1.32 trillion with the RBI in its reverse repo auction on Friday, showing the level of excess cash with them.   

 

GLOBAL MARKET

DJIA  8,799.26 +28.34  Nikkei10,068.03  -67.79 FTSE 4,441.95  -19.92 HSeng 18,861.62  -28.06 US10Y  3.792 EUR 1.3965  Yen 98.29   Gold 937.25  Crude 72.04

·         The Dow moved into +ve  territory for the year for the first time since early January on Friday, lifted by defensive sectors like pharmaceuticals while a disappointing outlook from National Semiconductor  weighed on technology stocks.
·         FTSE lost 0.5 % on Friday as weakness in heavyweight commodity stocks offset gains from pharmaceuticals, with investors still cautious on the prospects for a sustained economic recovery.
·         Nikkei stock average slipped 0.7 % on Monday, dragged lower by chipmakers after disappointing guidance from a U.S. peer as investors searched for clear signs that economic recession may be easing.
·         $ rose broadly on Friday, rebounding from a selloff earlier this week, while demand for the euro fell after data showed a plunge in euro zone industrial production.     
·         Gold futures broke below $940 an ounce on Friday, losing 2 % on the back of a strong $ rally which prompted funds to switch money out of the commodities sector and into other investments.
·         A recovery in the U.S. $ dragged copper values down from this week’s eight-month highs on Friday, but analysts expect renewed price strength in the coming week due to solid technical patterns and brighter economic prospects.
·         Oil fell on Friday, dragged from eight-month highs as the $ firmed and players took profits from a three-day rally.

 

INDIA FRONT PAGE

·         Suzlon Energy Ltd is exploring the option of selling a large portion of its stake, or its entire stake, in Belgian company Hansen Transmissions to raise money for retiring part of its 120-billion-INR debt.

·         South Africa’s MTN’s proposed 25 % stake in Bharti Airtel may be through global depository receipts if the plan by the two companies to mutually acquire equity to form a major emerging markets telecoms group goes through.

·         corporate debt restructuring exercise at Maytas Infra  has reached the final stage with lenders close to finalizing the terms of the package. Banks with exposure to the infrastructure firm have agreed to pare interest on loans and extend the repayment tenure in the proposed plan.

·         TCS, Wipro & MNC  rivals are preparing to bid for a $200 million outsourcing contract being considered by Britain’s public postal service Royal Mail Group.

·         GMR Infrastructure and potential investors are struggling to reach an accord on pricing the company’s qualified institutional placement, likely leading to a smaller fund mop-up than the originally planned $1 billion.

·         Larsen & Toubro may call off its proposed insurance joint venture with Travellers of USA, and is weighing the option of going it alone.

·         Pfizer Inc is in advanced talks with Wockhardt Ltd  to acquire part of the business of the Indian pharmaceuticals firm. Wockhardt will likely spin off the for-sale units into separate companies before the deal.

·         SEBI  is seeking information including details on the power of attorney vested in others by promoters as well as on conversion of shares from demat to physical form to tighten disclosure of share transactions by company promoters and improve transparency.