MyValueResearch

Dawn of 17th June 09

NDF above 48, SGX Nifty down, RBI announces buyback, US yields fall.Russia says new global reserve currency , AUD in favour,
Federal and Catholic Syrian Bank to merge, IDBI asks gov. for equity, BSE turns down NSE to marry NEAT & BOLT, Westside to expand.

 

INR
INR @ 47.86 &  is expected to ease on Wednesday, as the $’s gains against the euro and falls in some regional stock markets may prompt FII to trim positions.  INR closed at 47.75/76 Tuesday, 1M NDF @ 48.01 much weaker than the onshore spot rate. SGX Nifty down 27 points.    * The euro slipped on Wednesday, paring the gains it made after Russia suggested the need for a reserve currency other than the $, while the yen rose as a dip in investor confidence prompted a move out of riskier assets.

 

BONDS
Yields may slip on Wednesday following lower U.S. Treasury yields and softening oil prices but sharp falls may be checked ahead of heavy supplies this week. 6.07 %  2014 ended at 6.67 % on Tuesday, above Monday’s 6.63 %. The 10Y ended at 6.88 % on Tuesday against Friday’s close of 6.89 %. AUCTION :  RBI will sell 60 billion T bills on Wednesday and will buy back 60 billion of bonds on Thursday before it auctions 150 billion of debt on Friday.

 

STOCK
Indian shares climbed 0.55 % on Tuesday, led by SBI as some long-term investors saw value in the market after it shed almost 4 % over three days.But trading was choppy as tepid U.S. regional manufacturing data soured sentiment across markets in Asia. Concerns have emerged about expensive valuations, with niggling worries about the global economy and an uncertain outlook for corporate earnings growth weighing on investor confidence.

 

CALL
Indian cash rates held steady close to the RBI’s main borrowing rate on Tuesday as funds with banks were abundant while advance tax outflows failed to have much impact on the huge surplus with banks Call  closed at 3.25/3.30 %, Vs PD  close of 3.20/3.30 %.   Banks parked a total of 1.2 trillion with the RBI  at its reverse repo window on Tuesday, lower than 1.36 trillion INRs on Monday, indicating some amount of money had exited the system on account of advance tax payments.

 

GLOBAL MARKET

DJIA  8,504.67 -107.46  Nikkei   9,791.97+39.09

FTSE  4,328.57+2.56 Hang S  17,935.73 -229.77

US10Y 3.651 EUR 1.3844  Yen 96.48  

Gold 934.00  Crude 70.37
$  U.S. stocks slid on Tuesday as mixed economic data and Best Buy’s disappointing sales spurred worries about an anemic recovery.

$  FTSE closed 0.1 % higher on Tuesday, recovering only a small part of Monday’s sharp falls, as strength in defensive stocks was countered by falls in oils, miners, and banks.

$  Nikkei stock average edged up 0.4 % on Wednesday but stalled in the face of renewed  worries about a U.S. economic recovery, with Mitsubishi Corp and other resource shares down on lower oil and metal prices.

$  The $ fell across the board on Tuesday, pressured by comments from Russia suggesting a need for a global reserve currency other than the $ Reduced safe-haven demand for the $ also weighed after data showing a rebound in U.S. housing starts and an unexpectedly small rise in producer prices. Investors snapped up higher-yielding currencies such as the AUD .

$  Gold rose in Europe on Tuesday as the $ broadly weakened and an upturn in oil prices boosted bullion’s appeal as a hedge against potential oil-induced inflation.

$  Copper ended down at a one-week low on Tuesday after a weak $ failed to provide support as investors worried that prices might have exceeded fundamentals in the face of mixed economic data.

$  Oil fell 15 cents on Tuesday afternoon, giving back early gains as the $ strengthened and worries about the ailing world economy persisted.

 

INDIA FRONT PAGE

$  First Data Corporation has emerged as the successful bidder for ICICI Bank’s point of sale terminals. The deal is likely to be valued at 3.5 billion INRs and signed in a few weeks.

$  NTPC Ltd and RIL are expected to sign a separate gas sales purchase agreement for the state-run company’s other power units.

$  Catholic Syrian Bank with Federal Bank is expected to be through in a month when the boards meet. The acquisition price will be fixed at this time.

$  SCI  plans to acquire more container ships and is looking to start new services to the US and the east coast of Africa.

$  Trent (Westside)  plans to open about 15 stores of Topshop and Topman brands in India in the next three years through its franchise agreement with Britain’s Arcadia group.

$  BSE  may turn down a proposal from the NSE to develop an electronic platform that will enable brokers of the two exchanges to trade simultaneously.

$  IDBI Bank has approached the Gov. for an infusion of 80 billion INRs to re capitalize and fund its own growth in the next two to three years.