Thursday, 28 August 2014
Sensex gains seventh straight month riding the Modi wave
Sensex extended gains for the sixth straight session and also gained for the seventh straight month, rising the most in May, after the Modi-led NDA government took charge and announced a slew of initiates that helped improve business sentiment and lifted the economy back on the growth track. Further, today was also the expiry of August futures and options contracts.
Both the benchmark share indices ended at record closing highs. The 30-share Sensex gained 78 points at 26,638 mark after hitting a fresh intra-day high of 26,674.38. For the seven months since February 2014, the benchmark index surged nearly 27%. The 50-share Nifty closed higher by 18 points at 7,954 levels.
Global firms have revised their GDP estimates upwards on the back of improving economic environment in recent months. Global ratings agency Moody’s raised the first quarter growth estimate to 5.1% from the sub-five levels that has been clocked over the past two years. Moody’s expects the economy to clock 6% growth in 2015.
Sonal Varma and Aman Mohunta of Nomura are even more bullish than Moody’s, predicting Q1 GDP growth to hit 5.9% per cent annually, compared to their initial estimate of 4.7%. Nomura expects GDP growth of 5.5% and 6.7% per cent in FY2015 and FY2016 (4.7% and 6.3% previously).
Barclays and Standard Chartered too have increased their expectation of GDP growth to 6%. Standard Chartered in its reports has attributed the revised numbers to improvement in industrial activity and services sector.
Foreign institutional investors have been aggressive buyers in Indian equities infusing around Rs 77,684 crore in the past seven months since February and Rs 6,408 crore for this month till August 26, as per regulatory data.
Meanwhile, the stock market will remain closed tomorrow on account of Ganesh Chaturthi.
AUGUST F&O
The August futures and options contracts expired today and the Nifty rollovers to the September were around 70% on a provisional basis. The rollovers have been in line with the average of the past few months.
"For the September F&O series the momentum is likely to continue. This is the seventh consecutive positive series so risk of taking fresh long positions is rising in the market. So one has to take a calculated risk for the September series." said Chandan Taparia, derivative analyst at Anand Rathi Securities.
GLOBAL MARKETS
Tokyo stocks fell on Thursday as concerns about Japan's economic recovery pushed investors to the sidelines as they waited for a batch of key data out on Friday.
The Nikkei share average ended 0.5% lower to 15,459.86. The broader Topix declined 0.4% to 1,280.74, and JPX-Nikkei Index 400 fell 0.5% to 11,630.32.
Hong Kong's benchmark index finished at a two-week low in choppy conditions on Thursday, hurt by continued weakness in the Chinese onshore market and poor corporate earnings.
European shares edged lower ahead of the release of the revised US gross domestic product figures for the second quarter later in the global day. Asian stocks were mixed. Brent crude oil futures fell as expectations of ample supply weighed on prices.
RUPEE
The rupee is trading at 60.53 versus its previous close of 60.45/46. Traders say good dollar buying from state-run banks is seen, likely on behalf of oil importers to meet month-end demand.
SECTORS & STOCKS
BSE Capital Goods, Oil & Gas and FMCG indices gained by 1% each. However, BSE Realty, IT and Metal indices declined between 1-2%.
PSU OMCs gained after the government removed the restriction of one subsidized LPG cylinder per month for each consumer. The restriction of 12 subsidized cylinders per consumer per annum continues. HPLC, BPCL and IOCL gained between 1-3%. GAIL gained by over 2%.
From the capital goods space, BHEL was the top Sensex gainer, up over 5%. Betting big on the new government's initiative to clear major infrastructure projects which were stuck, engineering major Larsen & Toubro said that it expects to bag a number of construction deals. L&T gained by nearly 2%.
In the auto sector, Hero Moto, Tata Motors and Maruti Suzuki gained by nearly 1% each. Tata Motors has announced the launch of its passenger vehicle range in Algeria.
Other notable gainers were ONGC, Wipro, ICICI Bank, Dr Reddy’s Labs, HUL and ITC.
On the losing side, Tata Power, Tata Steel, SBI, Infosys and NTPC declined between 1-2%.
SMART MOVERS
Hydro S&S Industries was locked in upper circuit for fourth straight day, up 10% at Rs 98 after the company said it got shareholders approval for preferential issue to strategic investor Hong Kong Victory Investment Company.
Rollatainers hit an upper circuit limit of 5% at Rs 314 on BSE after the company said it signed a pact to launch Wendy's hamburger restaurant chain in India.
Railway-related stocks ended higher by up to 12% after the government notified the liberalised foreign direct investment (FDI) norms for rail infrastructure, allowing 100% FDI through automatic route in the sector.
Texmaco Rail & Engineering, BEML, Titagarh Wagons, Kalindee Rail Nirman, Kernex Microsystems and Stone India were up between 5-12% on the BSE.
Both the benchmark share indices ended at record closing highs. The 30-share Sensex gained 78 points at 26,638 mark after hitting a fresh intra-day high of 26,674.38. For the seven months since February 2014, the benchmark index surged nearly 27%. The 50-share Nifty closed higher by 18 points at 7,954 levels.
Global firms have revised their GDP estimates upwards on the back of improving economic environment in recent months. Global ratings agency Moody’s raised the first quarter growth estimate to 5.1% from the sub-five levels that has been clocked over the past two years. Moody’s expects the economy to clock 6% growth in 2015.
Sonal Varma and Aman Mohunta of Nomura are even more bullish than Moody’s, predicting Q1 GDP growth to hit 5.9% per cent annually, compared to their initial estimate of 4.7%. Nomura expects GDP growth of 5.5% and 6.7% per cent in FY2015 and FY2016 (4.7% and 6.3% previously).
Barclays and Standard Chartered too have increased their expectation of GDP growth to 6%. Standard Chartered in its reports has attributed the revised numbers to improvement in industrial activity and services sector.
Foreign institutional investors have been aggressive buyers in Indian equities infusing around Rs 77,684 crore in the past seven months since February and Rs 6,408 crore for this month till August 26, as per regulatory data.
Meanwhile, the stock market will remain closed tomorrow on account of Ganesh Chaturthi.
AUGUST F&O
The August futures and options contracts expired today and the Nifty rollovers to the September were around 70% on a provisional basis. The rollovers have been in line with the average of the past few months.
"For the September F&O series the momentum is likely to continue. This is the seventh consecutive positive series so risk of taking fresh long positions is rising in the market. So one has to take a calculated risk for the September series." said Chandan Taparia, derivative analyst at Anand Rathi Securities.
GLOBAL MARKETS
Tokyo stocks fell on Thursday as concerns about Japan's economic recovery pushed investors to the sidelines as they waited for a batch of key data out on Friday.
The Nikkei share average ended 0.5% lower to 15,459.86. The broader Topix declined 0.4% to 1,280.74, and JPX-Nikkei Index 400 fell 0.5% to 11,630.32.
Hong Kong's benchmark index finished at a two-week low in choppy conditions on Thursday, hurt by continued weakness in the Chinese onshore market and poor corporate earnings.
European shares edged lower ahead of the release of the revised US gross domestic product figures for the second quarter later in the global day. Asian stocks were mixed. Brent crude oil futures fell as expectations of ample supply weighed on prices.
RUPEE
The rupee is trading at 60.53 versus its previous close of 60.45/46. Traders say good dollar buying from state-run banks is seen, likely on behalf of oil importers to meet month-end demand.
SECTORS & STOCKS
BSE Capital Goods, Oil & Gas and FMCG indices gained by 1% each. However, BSE Realty, IT and Metal indices declined between 1-2%.
PSU OMCs gained after the government removed the restriction of one subsidized LPG cylinder per month for each consumer. The restriction of 12 subsidized cylinders per consumer per annum continues. HPLC, BPCL and IOCL gained between 1-3%. GAIL gained by over 2%.
From the capital goods space, BHEL was the top Sensex gainer, up over 5%. Betting big on the new government's initiative to clear major infrastructure projects which were stuck, engineering major Larsen & Toubro said that it expects to bag a number of construction deals. L&T gained by nearly 2%.
In the auto sector, Hero Moto, Tata Motors and Maruti Suzuki gained by nearly 1% each. Tata Motors has announced the launch of its passenger vehicle range in Algeria.
Other notable gainers were ONGC, Wipro, ICICI Bank, Dr Reddy’s Labs, HUL and ITC.
On the losing side, Tata Power, Tata Steel, SBI, Infosys and NTPC declined between 1-2%.
SMART MOVERS
Hydro S&S Industries was locked in upper circuit for fourth straight day, up 10% at Rs 98 after the company said it got shareholders approval for preferential issue to strategic investor Hong Kong Victory Investment Company.
Rollatainers hit an upper circuit limit of 5% at Rs 314 on BSE after the company said it signed a pact to launch Wendy's hamburger restaurant chain in India.
Railway-related stocks ended higher by up to 12% after the government notified the liberalised foreign direct investment (FDI) norms for rail infrastructure, allowing 100% FDI through automatic route in the sector.
Texmaco Rail & Engineering, BEML, Titagarh Wagons, Kalindee Rail Nirman, Kernex Microsystems and Stone India were up between 5-12% on the BSE.
Markets open higher; Sensex hits record high
Markets have opened firm with Sensex touching life time high of 26,643 with Index heavyweights L&T and ICICI Bank leading the rally.
However, markets are likely to remain volatile in the latter half of the trading session with expiry of August derivative contracts today.
However, markets are likely to remain volatile in the latter half of the trading session with expiry of August derivative contracts today.
At 9:18AM, the 30-share Sensex is up 55 points at 26, 615 and the 50-share Nifty is up 17 points at 7,953.
In the broader market, the BSE Mid-cap and Small-cap indices are trading 0.4-0.5% higher.
Market breadth is strong with 712 gainers and 256 losers on the BSE.
In the Sensex pack, L&T, Bharti Airtel, Coal India and ICICI Bank are among the gainers while Infosys, Sun Pharma and ONGC are trading marginally lower.
Global Markets:
US stocks ended mixed on Wednesday with trading activity seen in retailer stocks post their earnings annoucement. Tiffany & Co ended higher after the retailer reported better-than-expected revenue. Meanwhile, S&P 500 held on to the 2,000 mark to end at a new record closing high of 2,000.12. The global benchmark Dow Jones gained 0.1% at 17,122.01 while the tech-laden Nasdaq ended tad lower by 0.02% at 4,569.62.
European shares ended mixed on Wednesday. The CAC-40 ended flat with positive bias up 0.04%, DAX lost 0.2% and FTSE-100 ended up 0.1%.
Asian shares are trading firm tracking overnight cues from Wall Street. However, Japanese shares are trading marginally lower. The benchmark Nikkei is trading 0.5% lower. China's Shanghai Composite is up 0.05% while Hang Seng and Straits Times have gained 0.4% each.
Back home, Rupee is trading at 60.36/37 versus the dollar, higher than yesterday's close of 60.45/46.
Meanwhile, overseas investors bought shares worth 2.90 billion rupees on Wednesday - provisional exchange data shows
Meanwhile, overseas investors bought shares worth 2.90 billion rupees on Wednesday - provisional exchange data shows
Sectors & Stocks:
On the sectoral front, barring BSE Realty index, all other indices are trading in the positive territory. BSE Capital goods index is leading the rally followed by Consumer Durables and Oil & Gas indices. Bankex is up 0.2%. However, BSE Healthcare and IT indices are trading flat with a positive bias.
The Auto pack is continuing its yesterday's rally with Tata Motors, Baja Auto and Maruti Suzuki trading up between 0.2-1% after Tata Motors decided to challenge the penalty imposed on it by CCI.
In the financial segment, ICICI Bank, Axis Bank and HDFC twins have gained between 0.2-1%.
Engineering conglomerate L&T has climbed 0.8% during the early trades on fresh buying. BHEL has added 0.6% to the rise on the Sensex.
Select metal stocks are witnessing fresh buying. Sesa Sterlite, Tata Steel and Coal India have gained between 0.2-0.5%.
Bharti Airtel, Wipro and RIL are some of the notable names in green among others.
On the flip side, Hero Motocorp, TCS, Sun Pharma and Cipla are some of the prominent names in red among others down between 0.5-1%.
DLF continues to be under pressure after the Supreme Court on Wednesday directed DLF, the country’s largest real estate player, to deposit Rs 630 crore in the registry within three months and is down 1.2% to Rs 181 on the BSE.
Banks seek stricter norms for reporting on wilful defaulters
Banks have urged the Reserve Bank of India (RBI) to amend the norms for reporting on wilful defaulters and non-performing assets (NPAs). They said to prevent defaulters from taking fresh loans from other lenders, reporting to RBI and credit information companies should continue even after NPAs were sold to asset reconstruction companies.
Banks and financial institutions can’t grant additional facilities to those listed as wilful defaulters. Also, those identified as having siphoned or diverted funds or involved in fraudulent transactions are barred from securing institutional finance.
Senior public sector bank executives said there was apprehension the banking system would be misused by wilful defaulters after banks stopped reporting about them. Continuing such reporting would help asset reconstruction companies recover dues from the assets acquired by them and, consequently, redeem security receipts, they added.
After the asset quality of lenders was hit by the economic slowdown, risks of a hit to loan books emerged. Also, various sector-specific concerns have come to light, especially in the power, roads and airline sectors. Exposure to certain group firms with excessive leverage has also hit asset quality.
Through the past three years, the credit quality of banks in India has deteriorated sharply. Gross NPAs increased from 2.4 per cent of gross advances in March 2011 to 4.4 per cent in December 2013, before improving to 4.1 per cent in March 2014.
Banks, through the Indian Banks’ Association, have also urged RBI and credit information companies to maintain a database of wilful defaulters. Any addition or deletion from this database should be carried out only after receipt of information from banks that had reported the wilful default, banks said.
Considering the threat of NPAs and wilful defaults, the scope of reporting could also be extended to regional rural banks, local area banks and non-banking financial companies (NBFCs), they added.
A senior NBFC executive said so far, NBFCs weren’t part of the reporting framework, but the new guidelines for early detection and resolution of stressed assets had seen a start in this regard.
From April 1 this year, NBFCs had to inform RBI of loans for which payments were due for 31-60 days (special mention account 1, or SMA1, category) and 61-90 days (SMA2 category). Also, these entities had to be part of a joint lenders’ group set up to frame a corrective action plan for borrowers.
Finance companies are still not required to declare borrower who is defaulter as willful defaulter and report it to the regulator.
Banks and financial institutions can’t grant additional facilities to those listed as wilful defaulters. Also, those identified as having siphoned or diverted funds or involved in fraudulent transactions are barred from securing institutional finance.
Senior public sector bank executives said there was apprehension the banking system would be misused by wilful defaulters after banks stopped reporting about them. Continuing such reporting would help asset reconstruction companies recover dues from the assets acquired by them and, consequently, redeem security receipts, they added.
After the asset quality of lenders was hit by the economic slowdown, risks of a hit to loan books emerged. Also, various sector-specific concerns have come to light, especially in the power, roads and airline sectors. Exposure to certain group firms with excessive leverage has also hit asset quality.
Through the past three years, the credit quality of banks in India has deteriorated sharply. Gross NPAs increased from 2.4 per cent of gross advances in March 2011 to 4.4 per cent in December 2013, before improving to 4.1 per cent in March 2014.
Banks, through the Indian Banks’ Association, have also urged RBI and credit information companies to maintain a database of wilful defaulters. Any addition or deletion from this database should be carried out only after receipt of information from banks that had reported the wilful default, banks said.
Considering the threat of NPAs and wilful defaults, the scope of reporting could also be extended to regional rural banks, local area banks and non-banking financial companies (NBFCs), they added.
A senior NBFC executive said so far, NBFCs weren’t part of the reporting framework, but the new guidelines for early detection and resolution of stressed assets had seen a start in this regard.
From April 1 this year, NBFCs had to inform RBI of loans for which payments were due for 31-60 days (special mention account 1, or SMA1, category) and 61-90 days (SMA2 category). Also, these entities had to be part of a joint lenders’ group set up to frame a corrective action plan for borrowers.
Finance companies are still not required to declare borrower who is defaulter as willful defaulter and report it to the regulator.
Sebi tweaks Settlement Guarantee Fund norms
In a revamp of risk management in the stock market, the Securities and Exchange Board of India (Sebi) has mandated creation of a ‘core’ amount within the existing Settlement Guarantee Fund (SGF) and stress testing to detect risks.
An SGF, set up through levies on brokers, is used in the event of a default to meet settlement obligations.
“In the event of a clearing member failing to honour settlement commitments, the core SGF shall be used to fulfill the obligations of that member and complete the settlement without affecting the normal settlement process,” Sebi has now said.
The regulator has also asked clearing corporations to conduct daily stress tests to assess risk due to likely defaults by institutional trades. This will also help determine the corpus needed for core funds. The test framework prescribed by Sebi will be in line with international standards.
In doing these tests, clearing corporations will have to devise scenarios for a variety of ‘extreme but plausible market conditions’. These would include peak price volatility and multiple defaults by a single member, said Sebi.
The new norms are also intended to ring-fence each segment of a clearing corporation from defaults in other segments. The exchanges will be required to contribute 25 per cent of their total assets towards the core fund, while 50 per cent will be contributed by the Clearing Corporation. Clearing members cannot contribute more than 25 per cent of the total fund size, said Sebi.
The exchanges and clearing corporations have been asked to set up the core fund by December 1.
At present, the initial capital maintained by brokers with exchanges as well as a smaller portion of trading turnover goes towards the SGF, with exchanges and Clearing Corporation contributing towards the fund.
The Bimal Jalan committee in 2010 recommended a portion of the stock exchange profit should go to the SGF but it wasn't made mandatory by the regulator.
Currently, the SGF at National Stock Exchange's and BSE's clearing corporations take contributions only from members on an ongoing basis.
NEW GUIDELINES
An SGF, set up through levies on brokers, is used in the event of a default to meet settlement obligations.
“In the event of a clearing member failing to honour settlement commitments, the core SGF shall be used to fulfill the obligations of that member and complete the settlement without affecting the normal settlement process,” Sebi has now said.
The regulator has also asked clearing corporations to conduct daily stress tests to assess risk due to likely defaults by institutional trades. This will also help determine the corpus needed for core funds. The test framework prescribed by Sebi will be in line with international standards.
In doing these tests, clearing corporations will have to devise scenarios for a variety of ‘extreme but plausible market conditions’. These would include peak price volatility and multiple defaults by a single member, said Sebi.
The new norms are also intended to ring-fence each segment of a clearing corporation from defaults in other segments. The exchanges will be required to contribute 25 per cent of their total assets towards the core fund, while 50 per cent will be contributed by the Clearing Corporation. Clearing members cannot contribute more than 25 per cent of the total fund size, said Sebi.
The exchanges and clearing corporations have been asked to set up the core fund by December 1.
At present, the initial capital maintained by brokers with exchanges as well as a smaller portion of trading turnover goes towards the SGF, with exchanges and Clearing Corporation contributing towards the fund.
The Bimal Jalan committee in 2010 recommended a portion of the stock exchange profit should go to the SGF but it wasn't made mandatory by the regulator.
Currently, the SGF at National Stock Exchange's and BSE's clearing corporations take contributions only from members on an ongoing basis.
NEW GUIDELINES
- Sebi mandates creation of a ‘core’ amount within the existing Settlement Guarantee Fund and stress testing to detect risks
- An SGF, set up through levies on brokers, is used in the event of a default to meet settlement obligations
- The regulator also asks clearing corporations to conduct daily stress tests to assess risk due to likely defaults by institutional trades
- The Bimal Jalan committee in 2010 recommended a portion of the stock exchange profit should go to the SGF but it wasn't made mandatory by the regulator
Wednesday, 27 August 2014
Sensex up over 100 points; ICICI Bank up 1%, ONGC up 2%
Markets continued to trade higher, amid firm Asian cues, with bank and oil shares leading the gains. However, intra-day volatility is not ruled out later today with the expiry of August derivative contracts tommorrow.
At 9:40AM, the 30-share Sensex was trading 132 points up at 26,574 and the 50-share Nifty was trading 36 points up at 7,941.
US stocks firmed up on Tuesday as encouraging data showed that the economic growth is picking up pace. Gains were led by energy stocks and the broader S&P 500 ended above 2,000 for the first time to close at 2,000.02. It may be recalled that the S&P 500 had hit 2,000 in intra-day trade on Monday. The global benchmark Dow Jones gained 0.2% at 17,106.70 while the tech-laden Nasdaq ended up 0.3% at 4,570.64.
European shares ended higher on Tuesday, tracking firm US markets, on hopes of further monetary stimulus from the European Central Bank. The CAC-40 ended up 1.2%, DAX gained 0.8% and FTSE-100 ended up 0.7%.
Asian shares were steady in early trades while the Nikkei seems to be consolidating after recent gains. The Nikkei was trading flat with positive bias. China's Shanghai Composite was up 0.1% while Hang Seng was also up 0.1% and Straits Times gained 0.3%.
All sectoral indices on the BSE were in the green. The BSE Realty and COnsumer Durables indices were the top sectoral gainers up over 1% each. Capital Goods, Auto, Bankex, Oil and Gas were the other gainers.
In the banking pack, ICICI Bank, SBI, Axis Bank were trading over 1% higher. Gains were seen after ICICI Bank and SBI reduced interest rates on big-ticket home loans.
Metal shares rebounded after recent losses following the apex court's verdict on coal block allocations. Jindal Steel was up 2%, Hindalco, Sesa Sterlite and Tata Steel were up over 0.5% e.ach
ONGC was up over 2% on talk that the subsidy burden would be shared between the government and upstream oil companies.
Tata Motors, L&T, Reliance Ind and Bharti Airtel were the other top Sensex gainers.
IT shares came under profit taking with Infosys, Wipro and TCS trading with marginal losses.
In the broader market, the BSE Mid-cap and Small-cap indices were up 0.9% each.
Market breath was strong with 1,187 gainers and 391 losers on the BSE.
At 9:40AM, the 30-share Sensex was trading 132 points up at 26,574 and the 50-share Nifty was trading 36 points up at 7,941.
US stocks firmed up on Tuesday as encouraging data showed that the economic growth is picking up pace. Gains were led by energy stocks and the broader S&P 500 ended above 2,000 for the first time to close at 2,000.02. It may be recalled that the S&P 500 had hit 2,000 in intra-day trade on Monday. The global benchmark Dow Jones gained 0.2% at 17,106.70 while the tech-laden Nasdaq ended up 0.3% at 4,570.64.
European shares ended higher on Tuesday, tracking firm US markets, on hopes of further monetary stimulus from the European Central Bank. The CAC-40 ended up 1.2%, DAX gained 0.8% and FTSE-100 ended up 0.7%.
Asian shares were steady in early trades while the Nikkei seems to be consolidating after recent gains. The Nikkei was trading flat with positive bias. China's Shanghai Composite was up 0.1% while Hang Seng was also up 0.1% and Straits Times gained 0.3%.
All sectoral indices on the BSE were in the green. The BSE Realty and COnsumer Durables indices were the top sectoral gainers up over 1% each. Capital Goods, Auto, Bankex, Oil and Gas were the other gainers.
In the banking pack, ICICI Bank, SBI, Axis Bank were trading over 1% higher. Gains were seen after ICICI Bank and SBI reduced interest rates on big-ticket home loans.
Metal shares rebounded after recent losses following the apex court's verdict on coal block allocations. Jindal Steel was up 2%, Hindalco, Sesa Sterlite and Tata Steel were up over 0.5% e.ach
ONGC was up over 2% on talk that the subsidy burden would be shared between the government and upstream oil companies.
Tata Motors, L&T, Reliance Ind and Bharti Airtel were the other top Sensex gainers.
IT shares came under profit taking with Infosys, Wipro and TCS trading with marginal losses.
In the broader market, the BSE Mid-cap and Small-cap indices were up 0.9% each.
Market breath was strong with 1,187 gainers and 391 losers on the BSE.
Tuesday, 26 August 2014
Markets end flat amid volatility; Nifty reclaims 7,900
Markets ended flat, amid a volatile trading session, even as select metal stocks rebounded while power stocks extended losses after the apex court's verdict on coal block allocations.
The 30-share Sensex ended up 6 points at 26,443 and the 50-share Nifty ended down 2 points at 7,905
The Indian rupee was trading at 60.52 per US dollar compared to the previous close of 60.56. Asian currencies were marginally up on hopes the the ECB would infuseo expand liquidity to boost the European economy.
Major Asian markets were trading lower with Chinese shares declining the most. Japanese shares which had rebounded yesterday failed to extend gains after investors booked profits as the weakening yen was seen stable against the dollar. The Nikkei ended down 0.6%. Losses were led by exporters stocks such as SoftBank Corp and global car major Honda Motor Co. Shanghai COmposite ended down 1%, Hang Seng slipped 0.4% and Straits Times ended down 0.2%.
European shares were trading flat as investors booked profits at higher levels post the sharp gains seen on Monday on hopes of further monetary stimulus measures from the European Central Bank to boost the economy. The FTSE-100 was up 0.2%, DAX fell 0.5% and the CAC-40 was trading flat with negative bias.
Capital Goods, Power, Oil and Gas indices were the top sectoral losers on the BSE which ended down 0.2-1.3% each along with Auto, Bankex and IT indices. However, FMCG and Healthcare indices ended up 0.9-1.1% each.
ONGC was the top Sensex loser which ended down 2.5% after the Government decided to divest 5% stake in the company via offer for sale (OFS) mechanism. The Government currently holds 69% stake in the company. Index heavyweight Reliance Industries was down 0.7%.
In the capital goods segment, power equipment makers L&T ended down 1.3% on concerns that the recent apex court verdict would hamper fresh order inflows from power generators.
Banking stocks which have exposure to metal and power stocks also witnessed profit taking. SBI, ICICI Bank, and Punjab National Bank ended down 0.2-1% each.
Jindal Steel and Power was the top Nifty loser which ended down 6.5% after investors pressed sales on concerns that the profits from the existing operational Gare-Palma coal blocks and also the latest Utkal-B1 block for Angul Steel & Power project would take a hit.
Thermal-based power companies continued to be impacted with the SC verdict on coal allocation. Tata Power ended down 2.8% and NTPC slipped 0.6%.
However, select metal shares rebounded on short covering after sharp losses in the previous session. Tata Steel ended up 2.5% after analysts said that the company will not be impacted by the apex court verdict on coal block allocation. Hindalco gained 3.4%.
Auto shares declined after the Competition Commission of India slapped a penalty of Rs 2,545-crore penalty on automotive companies for alleged indulgence in unfair practices. M&M, Maruti Suzuki and Tata Motors were down 0.1-1.3% each. Honda Cars, Volkswagen, Fiat, BMW, Ford, General Motors, Hindustan Motors, Mercedes-Benz, Nissan Motors, SkodaAuto, Toyota complete the list of 14 companies which have been penalised by the CCI.
Pharma shares ended higher on defensive buying and after analysts said that the Indian pharma market is likely to report a double-digit growth going ahead. Sun Pharma, Cipla, Ranbaxy and Dr Reddy's Labs ended up 0.2-1.3% each.
In the FMCG space, ITC and Hindustan Unilever ended up 1% each.
TCS ended up 0.6% after it announced a tie-up with US-based Cloudera to offer big data and analytics services globally.
Among other shares, Muthoot Finance gained nearly 2% at Rs 193 after the company announced the acquisition of stake in Sri Lanka-based Asia Asset Finance PLC.
Havells India ended up after the stock turned ex-stock split today. The stock was split into five equity shares of face value Re 1 each from face value of Rs 5 earlier.
Jet Airways ended down 4%, extending its previous day’s 5% fall on BSE, after the credit rating agency ICRA has downgraded the company’s loan ratings from “”BB” to “D”. Instruments with “D” rating are in default or are expected to be in default soon.
In the broader market, the BSE-Mid-cap and Small-cap indices ended down 0.2-0.8% each.
Market breadth was weak with 1,828 losers and 1,129 gainers on the BSE.
Nifty opens below 7,900; metals & power under pressure
Markets have opened lower on account of selling pressure in metal and power stocks after the Supreme Court on Monday held that guidelines were breached in coal block allocations during the UPA government and that the terms of allotment, going as far back as 1993, were themselves illegal.
The Sensex has opened lower by 27 points at 26,409 mark and the Nifty slipped by 11 points at 7,895 mark.
GLOBAL MARKETS
US stocks ended higher as investors bought shares after recent data showed that the economy is on an uptick while better-than-expected earnings also boosted sentiment.
Meanwhile, the broader S&P 500 touched a fresh all-time high led by biotechnology and financials surpassing the 2,000 mark for the first time ever but closed shy of that level at 1,997.92.
The global benchmark Dow Jones ended up 0.4% at 17,076.87 while the tech-laden Nasdaq ended up 0.4% at 4,557.35.
Asian shares got off to a firm start on Tuesday as investors warmed up to the idea of more monetary stimulus by the European Central Bank to boost the sagging euro zone economy.
The euro slipped to a one-year low against the dollar as comments from ECB chief Mario Draghi late last week that the central bank was prepared to respond with all its "available" tools resonated in the market.
South Korean shares rose 0.3% and the Australian market edged up 0.2% in early trade. MSCI's dollar-denominated index of Asia-Pacific shares outside Japan tacked on 0.05%.
The Sensex has opened lower by 27 points at 26,409 mark and the Nifty slipped by 11 points at 7,895 mark.
GLOBAL MARKETS
US stocks ended higher as investors bought shares after recent data showed that the economy is on an uptick while better-than-expected earnings also boosted sentiment.
Meanwhile, the broader S&P 500 touched a fresh all-time high led by biotechnology and financials surpassing the 2,000 mark for the first time ever but closed shy of that level at 1,997.92.
The global benchmark Dow Jones ended up 0.4% at 17,076.87 while the tech-laden Nasdaq ended up 0.4% at 4,557.35.
Asian shares got off to a firm start on Tuesday as investors warmed up to the idea of more monetary stimulus by the European Central Bank to boost the sagging euro zone economy.
The euro slipped to a one-year low against the dollar as comments from ECB chief Mario Draghi late last week that the central bank was prepared to respond with all its "available" tools resonated in the market.
South Korean shares rose 0.3% and the Australian market edged up 0.2% in early trade. MSCI's dollar-denominated index of Asia-Pacific shares outside Japan tacked on 0.05%.
Monday, 25 August 2014
Markets end flat after SC verdict on coal block allocation
Benchmark indices which hit fresh record highs early today ended flat amid selling pressure in metal and power stocks after the Supreme Court on Monday held that guidelines were breached in coal block allocations during the UPA government and that the terms of allotment, going as far back as 1993, were themselves illegal.
However, the 30-share Sensex ended at a record closing highup 17 points at 26,437 after hitting a fresh record high of 26,631 and the 50-share Nifty ended down seven points at 7,906 after hitting a fresh record high of 7,968.
The sell-off was more prominent in the broader markets with both the Mid and Smallcap indices ending 0.6% and 0.4% lower, respectively.
Sectors & Stocks
Metal index down over 4% was the top sectoral loser along with Realty, Power and Banking index down 1-2%.
Oil & Gas, Capital Goods and Consumer Durables were the other indices to close in red, down 0.3-1%.
Defensive pocket like IT, FMCG and Health Care were back in focus with the respective indices registering gains of 0.5-1%.
Metal stocks which are dependent on thermal power to operate their plants lost ground fter the Supreme Court's crack down on coal block allocation. As a result, Hindalco, Tata Steel, Sesa Sterlite and Tata Power slumped 3-10% and were the top losers in the Sensex pack.
ICICI Bank, Axis Bank, GAIL and L&T ended down 1% each were the other notable losers.
TCS, HUL, Dr Reddys and Hero MotoCorp gained 2-2.5% to emerge as the top gainers for the day.
The market breadth ended negative on BSE. 1,624 stocks declined while 1,393 stocks advanced.
Global Markets
Most Asian markets with the exception of China ended with firm gains on Monday and Japanese shares rebounded to hit three and a half week highs.
Shares in Japan rebounded to end at their highest closing level since end July with exporter shares leading the gains after the yen depreciated against the US dollar. The Nikkei was up 0.5%. Shanghai Composite down 0.5% was the only index to close in red.
In Europe, CAC and DAX were up 1% each while FTSE was flat with a negative bias.
However, the 30-share Sensex ended at a record closing highup 17 points at 26,437 after hitting a fresh record high of 26,631 and the 50-share Nifty ended down seven points at 7,906 after hitting a fresh record high of 7,968.
The sell-off was more prominent in the broader markets with both the Mid and Smallcap indices ending 0.6% and 0.4% lower, respectively.
Sectors & Stocks
Metal index down over 4% was the top sectoral loser along with Realty, Power and Banking index down 1-2%.
Oil & Gas, Capital Goods and Consumer Durables were the other indices to close in red, down 0.3-1%.
Defensive pocket like IT, FMCG and Health Care were back in focus with the respective indices registering gains of 0.5-1%.
Metal stocks which are dependent on thermal power to operate their plants lost ground fter the Supreme Court's crack down on coal block allocation. As a result, Hindalco, Tata Steel, Sesa Sterlite and Tata Power slumped 3-10% and were the top losers in the Sensex pack.
ICICI Bank, Axis Bank, GAIL and L&T ended down 1% each were the other notable losers.
TCS, HUL, Dr Reddys and Hero MotoCorp gained 2-2.5% to emerge as the top gainers for the day.
The market breadth ended negative on BSE. 1,624 stocks declined while 1,393 stocks advanced.
Global Markets
Most Asian markets with the exception of China ended with firm gains on Monday and Japanese shares rebounded to hit three and a half week highs.
Shares in Japan rebounded to end at their highest closing level since end July with exporter shares leading the gains after the yen depreciated against the US dollar. The Nikkei was up 0.5%. Shanghai Composite down 0.5% was the only index to close in red.
In Europe, CAC and DAX were up 1% each while FTSE was flat with a negative bias.
Coal block allocations since 1993 illegal: SC
The Supreme Court on Monday held that guidelines were breached in coal block allocations during the UPA government and that the terms of allotment, going as far back as 1993, were themselves illegal.
While the court did not de-allocate the blocks, the bench, headed by Chief Justice R M Lodha, said that no objective criteria was followed for the allocations done by the screening committee. The court is expected to conduct hearings on de-allocation from Sept 1.
The court also disallowed commercial diversion of captive coal mines by UMPPs, short for ultra mega power plants.
The bench was hearing a batch of petitions seeking quashing of coal blocks allocated by the UPA government.
It examined the allegations about alleged irregularities in the allocation of around 194 coal blocks. The coal blocks were alloted in Jharkhand, Chattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh to private companies and parties between 2004 to March 2011.
In 2012, the office of the Comptroller and Auditor General of India released a report saying that by not following a competitive bidding process for allocation of coal blocks, the national exchequer had lost out on Rs 1.86 lakh crore (Rs 1.86 trillion).
The irregularities in the coal block allegations, which came to be known as 'Coalgate', eventually led to questions over then Prime Minister Manmohan Singh's efficacy -- he held the coal portfolio briefly in 2004 and then again from 2007 through 2012 -- and along with the 2G telecom scam, became a key issue in the BJP's campaign against the government.
While the court did not de-allocate the blocks, the bench, headed by Chief Justice R M Lodha, said that no objective criteria was followed for the allocations done by the screening committee. The court is expected to conduct hearings on de-allocation from Sept 1.
It has suggested setting up of a committee headed by a retired apex court judge to examine what should be done about these coal blocks.
The court also disallowed commercial diversion of captive coal mines by UMPPs, short for ultra mega power plants.
The bench was hearing a batch of petitions seeking quashing of coal blocks allocated by the UPA government.
It examined the allegations about alleged irregularities in the allocation of around 194 coal blocks. The coal blocks were alloted in Jharkhand, Chattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh to private companies and parties between 2004 to March 2011.
In 2012, the office of the Comptroller and Auditor General of India released a report saying that by not following a competitive bidding process for allocation of coal blocks, the national exchequer had lost out on Rs 1.86 lakh crore (Rs 1.86 trillion).
The irregularities in the coal block allegations, which came to be known as 'Coalgate', eventually led to questions over then Prime Minister Manmohan Singh's efficacy -- he held the coal portfolio briefly in 2004 and then again from 2007 through 2012 -- and along with the 2G telecom scam, became a key issue in the BJP's campaign against the government.
Markets open higher; Nifty hits fresh record high
Markets have opened on a positive note with Nifty touching fresh record high on sustained buying by foreign investors shrugging off mixed trend in Asian markets.
At 9:15AM, the 30-share Sensex is up 78 points at 26, 498 and the 50-share Nifty is up 18 points at 7,931 after hitting a fresh record high of 7,938.35 so far.
In the broader market, the BSE Mid-cap and Small-cap indices are trading 0.3% higher.
Market breadth was strong with 635 gainers and 183 losers on the BSE.
Meanwhile, foreign portfolio investors bought shares worth a net Rs 302 crore on Friday, as per provisional data from the stock exchanges.
Meanwhile, foreign portfolio investors bought shares worth a net Rs 302 crore on Friday, as per provisional data from the stock exchanges.
Across the Globe:
On the global front, the dollar marched higher against the euro and yen on Monday as investors wagered that interest rates were set on a diverging course in the United States, Europe and Japan, giving a lift to Tokyo stocks in the process.
Wall Street and other stock markets paused on Friday, halting the week's strong gains, as worsening Ukraine tensions dogged trading, while the dollar rose after Federal Reserve Chair Janet Yellen said policymakers eyeing interest rate hikes need to move cautiously.
Ukraine on Friday said Russia had launched a "direct invasion" of its territory after Moscow sent a convoy of aid trucks across the border into eastern Ukraine, where pro-Russian rebels are fighting government forces.
Friday, 22 August 2014
Markets open higher; Nifty hits fresh record high
Markets opened higher, amid firm global cues, led by index heavyweights Reliance Industries and Infosys.
At 9:25AM, the 30-share Sensex was up 104 points at 26,464 and the 50-share Nifty was up 25 points at 7,916 after hitting a record high of 7,925.
US stocks ended higher on Thursday, with the S&P 500 at a record after a flurry of positive economic data, as investors hoped for signs from an annual meeting of central bankers that interest-rate hikes are not imminent.
The S&P 500 broke two records during Thursday's session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Investors are anticipating that the benchmark index will touch the 2,000 level, which it has yet to breach.
Asian shares rose in early trading on Friday, after upbeat U.S. data sparked another record close on Wall Street.
U.S. home resales rose to a 10-month high in July, factory activity in the mid-Atlantic region hit its highest level since March 2011 in August, and a gauge of future economic activity grew solidly last month.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1% in early trading, on track for a weekly gain of 0.4 percent. Japan's Nikkei stock average added 0.2%, poised for a robust 1.9% weekly rise.
BSE IT index was the top sectoral gainer on the BSE along with Bankex, Oil and Gas, Metal, Capital Goods among other. The BSE Healthcare index was the sole loser in early trades.
HDFC, Reliance Ind, Infosys, SBI, TCS and L&T contributed the most to the Sensex gains in opening trades.
Auto shares witnessed profit taking with Bajaj Auto trading marginally lower.
Among other shares, Promoters of no-frills airline SpiceJet will make a fresh infusion in the cash-strapped airline. Board approves increase in authorised share capital to Rs 1,500 crore from Rs 1,000 crore. The stock was up 3%.
Axis Bank-country's third largest private sector bank-has now joined the bandwagon of lenders that will be raising money via long term bonds. The stock was up nearly 1%.
Market breadth was strong with 910 gainers and 288 losers on the BSE.
At 9:25AM, the 30-share Sensex was up 104 points at 26,464 and the 50-share Nifty was up 25 points at 7,916 after hitting a record high of 7,925.
US stocks ended higher on Thursday, with the S&P 500 at a record after a flurry of positive economic data, as investors hoped for signs from an annual meeting of central bankers that interest-rate hikes are not imminent.
The S&P 500 broke two records during Thursday's session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Investors are anticipating that the benchmark index will touch the 2,000 level, which it has yet to breach.
Asian shares rose in early trading on Friday, after upbeat U.S. data sparked another record close on Wall Street.
U.S. home resales rose to a 10-month high in July, factory activity in the mid-Atlantic region hit its highest level since March 2011 in August, and a gauge of future economic activity grew solidly last month.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1% in early trading, on track for a weekly gain of 0.4 percent. Japan's Nikkei stock average added 0.2%, poised for a robust 1.9% weekly rise.
BSE IT index was the top sectoral gainer on the BSE along with Bankex, Oil and Gas, Metal, Capital Goods among other. The BSE Healthcare index was the sole loser in early trades.
HDFC, Reliance Ind, Infosys, SBI, TCS and L&T contributed the most to the Sensex gains in opening trades.
Auto shares witnessed profit taking with Bajaj Auto trading marginally lower.
Among other shares, Promoters of no-frills airline SpiceJet will make a fresh infusion in the cash-strapped airline. Board approves increase in authorised share capital to Rs 1,500 crore from Rs 1,000 crore. The stock was up 3%.
Axis Bank-country's third largest private sector bank-has now joined the bandwagon of lenders that will be raising money via long term bonds. The stock was up nearly 1%.
Market breadth was strong with 910 gainers and 288 losers on the BSE.
Thursday, 21 August 2014
158 stocks have zoomed over 50% since poll results
A sharp rally in equities since the announcement of general election results earlier this year has seen 158 stocks from the BSE-500, midcap and smallcap indices gaining more than 50 per cent. Of these, 25 have more than doubled their value and 133 have risen between 50 per cent and 100 per cent. Another 231 have moved up 25-50 per cent.
Since May 15, the BSE midcap and smallcap indices have outperformed their large-cap peers, appreciating 32 per cent and 21 per cent, respectively. The benchmark indices, NSE Nifty and the BSE Sensex, have rallied 10 per cent each since the Narendra Modi-led Bharatiya Janata Party (BJP) won a clear majority in the Lok Sabha elections.
The rally has been backed by sustained foreign institutional investor (FII) flows and participation of domestic mutual funds, which have bought aggressively in the past two months. Better-than-expected corporate earnings for the quarter ended June also boosted sentiment.
“FII stake in BSE-500 companies continues to be high, despite a marginal decline to 19.6 per cent in June, mostly due to the market outpacing FII holdings. During the June quarter, FIIs as a group seem to have tried to add to beta, and we estimate they net-bought shares of public-sector banks, real estate, utilities, telecom, healthcare and private banks. They sold staples and NBFCs (non-banking financial companies), cement and information technology stocks,” says Neelkanth Mishra, India Equity Strategist at Credit Suisse.
FII inflow totalled Rs 34,688 crore ($5.8 billion), while mutual funds invested a net of Rs 12,074 crore in Indian equities between May 16 and August 19, data from the Securities and Exchange Board of India show.
Among individual stocks, IFB Industries, Greenply Industries, Avanti Feeds, Hitachi Home and Life Solutions, Century Plyboards, Force Motors, Dynamatic Technology, Jindal Polyfilms, Ahluwalia Contracts and GHCL are among stocks that have become multi-baggers since election results.
From the cement pack, J K Lakshmi Cement, Orient Cement, JK Cement and Birla Corp rallied between 85 per cent and 130 per cent during the period. The aggregate net profit of these four companies rose 70 per cent to Rs 221 crore in the June quarter, against Rs 130 crore in the corresponding quarter last year.
Outlook
Analysts suggest the upward move might sustain if the government effectively puts its plans into action and implements some of the key policy reforms it has initiated. However, given the run-up in recent months, the geopolitical situation and the domestic macros, one needs to be careful while allocating fresh money to equities.
“The feel-good factor has resulted in stock indices reaching new highs, typical of any run up in stock markets before an economic recovery is reflected in numbers. While the feel-good factor continues to remain buoyant, implementation of stalled initiatives is going to be the key,” points out R Sreesankar, head of institutional equities, Prabhudas Lilladher.He maintains an overweight outlook on sectors like financials, capital goods and engineering and automobiles. He is underweight on FMCG and neutral on healthcare and IT. Among the mid-cap stocks, Aurobindo Pharma, Cummins India, United Phosphorous, Federal Bank, Tata Chemicals, The Ramco Cements, Dish TV India, PI Industries, JK Lakshmi Cement, KPIT Technologies are his top picks.
Since May 15, the BSE midcap and smallcap indices have outperformed their large-cap peers, appreciating 32 per cent and 21 per cent, respectively. The benchmark indices, NSE Nifty and the BSE Sensex, have rallied 10 per cent each since the Narendra Modi-led Bharatiya Janata Party (BJP) won a clear majority in the Lok Sabha elections.
The rally has been backed by sustained foreign institutional investor (FII) flows and participation of domestic mutual funds, which have bought aggressively in the past two months. Better-than-expected corporate earnings for the quarter ended June also boosted sentiment.
“FII stake in BSE-500 companies continues to be high, despite a marginal decline to 19.6 per cent in June, mostly due to the market outpacing FII holdings. During the June quarter, FIIs as a group seem to have tried to add to beta, and we estimate they net-bought shares of public-sector banks, real estate, utilities, telecom, healthcare and private banks. They sold staples and NBFCs (non-banking financial companies), cement and information technology stocks,” says Neelkanth Mishra, India Equity Strategist at Credit Suisse.
FII inflow totalled Rs 34,688 crore ($5.8 billion), while mutual funds invested a net of Rs 12,074 crore in Indian equities between May 16 and August 19, data from the Securities and Exchange Board of India show.
Among individual stocks, IFB Industries, Greenply Industries, Avanti Feeds, Hitachi Home and Life Solutions, Century Plyboards, Force Motors, Dynamatic Technology, Jindal Polyfilms, Ahluwalia Contracts and GHCL are among stocks that have become multi-baggers since election results.
From the cement pack, J K Lakshmi Cement, Orient Cement, JK Cement and Birla Corp rallied between 85 per cent and 130 per cent during the period. The aggregate net profit of these four companies rose 70 per cent to Rs 221 crore in the June quarter, against Rs 130 crore in the corresponding quarter last year.
Outlook
Analysts suggest the upward move might sustain if the government effectively puts its plans into action and implements some of the key policy reforms it has initiated. However, given the run-up in recent months, the geopolitical situation and the domestic macros, one needs to be careful while allocating fresh money to equities.
“The feel-good factor has resulted in stock indices reaching new highs, typical of any run up in stock markets before an economic recovery is reflected in numbers. While the feel-good factor continues to remain buoyant, implementation of stalled initiatives is going to be the key,” points out R Sreesankar, head of institutional equities, Prabhudas Lilladher.He maintains an overweight outlook on sectors like financials, capital goods and engineering and automobiles. He is underweight on FMCG and neutral on healthcare and IT. Among the mid-cap stocks, Aurobindo Pharma, Cummins India, United Phosphorous, Federal Bank, Tata Chemicals, The Ramco Cements, Dish TV India, PI Industries, JK Lakshmi Cement, KPIT Technologies are his top picks.
Irda allows insurers to invest in onshore rupee bonds of ADB, IFC
Insurance Regulatory and Development Authority (IRDA) has allowed insurance companies to invest in onshore rupee bonds issued by Asian Development Bank (ADB) and International Finance Corporation (IFC), an arm of the World Bank.
IFC had sent a representation to Irda to permit insurers to invest in onshore rupee bonds to be issued by it. IFC proposes to raise $5 billion in the next 10 years through rupee bonds and the proceeds would be used to fund IFC’s projects in India that require rupee financing.
The Centre has “onshore rupee bonds” issued by multilateral institutions such as Asian Development Bank and IFC as securities. Irda said that in light of this, it examined IFC’s request and decided that onshore rupee bonds issued by Asian Development Bank and IFC are ‘approved investments’.
The regulator said these bonds would be duly approved by the sectoral regulator (Securities and Exchange Board of India or SEBI). The proceeds of the issue shall be meant for investment in India.
Further, these bonds are required to meet the rating criteria to qualify as ‘approved investments’ prescribed by IRDA’s investment regulations as amended from time to time. If SEBI exempts the rating requirement from rating agencies registered with SEBI in view of the rating obtained from International rating agencies, then such rating shall be considered for classifying as ‘approved investments’.
Also, these investments shall be classified in line with the National Industrial Classification for the sectors to which the said tranche belongs. For example, if most of the proceeds of a tranche are meant for Infrastructure, then such investments shall be treated as exposure to infrastructure. If the same is not identifiable, then the exposure shall be treated as exposure to the BFSI (banking, financial services and insurance) sector. The valuation of these bonds shall be in line with corporate bonds and debentures.
IFC had sent a representation to Irda to permit insurers to invest in onshore rupee bonds to be issued by it. IFC proposes to raise $5 billion in the next 10 years through rupee bonds and the proceeds would be used to fund IFC’s projects in India that require rupee financing.
The Centre has “onshore rupee bonds” issued by multilateral institutions such as Asian Development Bank and IFC as securities. Irda said that in light of this, it examined IFC’s request and decided that onshore rupee bonds issued by Asian Development Bank and IFC are ‘approved investments’.
The regulator said these bonds would be duly approved by the sectoral regulator (Securities and Exchange Board of India or SEBI). The proceeds of the issue shall be meant for investment in India.
Further, these bonds are required to meet the rating criteria to qualify as ‘approved investments’ prescribed by IRDA’s investment regulations as amended from time to time. If SEBI exempts the rating requirement from rating agencies registered with SEBI in view of the rating obtained from International rating agencies, then such rating shall be considered for classifying as ‘approved investments’.
Also, these investments shall be classified in line with the National Industrial Classification for the sectors to which the said tranche belongs. For example, if most of the proceeds of a tranche are meant for Infrastructure, then such investments shall be treated as exposure to infrastructure. If the same is not identifiable, then the exposure shall be treated as exposure to the BFSI (banking, financial services and insurance) sector. The valuation of these bonds shall be in line with corporate bonds and debentures.
Markets open flat; metal stocks down.
Markets opened flat with steel stocks losing ground in ealry trades on the back of hike in royalty rates.
At 9:18AM, the 30-share Sensex was up 27 points at 26, 346 and the 50-share Nifty was up 4 points at 7,879.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 251.36 crore on Wednesday, as per provisional data from the stock exchanges.
On Wednesday, markets snapped their six-day winning streak on profit taking after sharp gains which lifted the benchmark share indices to their record highs.
On the global front, Asian shares were trading lower after a private survey showed weaker-than-expected Chinese manufacturing data. HSBC/Markit Flash China Manufacturing Purchasing Manager's Index slipped to 50.3 in August compared with 51.7 in July, against a forecast of 51.5.
Except for Nikkei all other indices were trading lower. Nikkei was up 0.8%, Hang Seng was down 0.8%, Shanghai Composite fell 0.3% and Straits Times was trading flat.
US stocks came off their day's highs to end firm on Wednesday after the US Fed indicated that it is likely to raise interest rates soon. The Dow Jones ended up 59 points at 16,979. The S&P 500 gained 5 points to close at 1,987. The Nasdaq Composite ended 1 point lower at 4,526.
Mid-cap IT and pharma shares were among the gainers in early trades.
In the Sensex pack, Reliance Ind, Tata Motors and M&M were among the gainers while Tata Steel was trading lower.
In the broader market, the BSE Mid-cap and Small-cap indices were trading 0.4-0.5% higher.
Market breadth was strong with 809 gainers and 265 losers on the BSE.
At 9:18AM, the 30-share Sensex was up 27 points at 26, 346 and the 50-share Nifty was up 4 points at 7,879.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 251.36 crore on Wednesday, as per provisional data from the stock exchanges.
On Wednesday, markets snapped their six-day winning streak on profit taking after sharp gains which lifted the benchmark share indices to their record highs.
On the global front, Asian shares were trading lower after a private survey showed weaker-than-expected Chinese manufacturing data. HSBC/Markit Flash China Manufacturing Purchasing Manager's Index slipped to 50.3 in August compared with 51.7 in July, against a forecast of 51.5.
Except for Nikkei all other indices were trading lower. Nikkei was up 0.8%, Hang Seng was down 0.8%, Shanghai Composite fell 0.3% and Straits Times was trading flat.
US stocks came off their day's highs to end firm on Wednesday after the US Fed indicated that it is likely to raise interest rates soon. The Dow Jones ended up 59 points at 16,979. The S&P 500 gained 5 points to close at 1,987. The Nasdaq Composite ended 1 point lower at 4,526.
Mid-cap IT and pharma shares were among the gainers in early trades.
In the Sensex pack, Reliance Ind, Tata Motors and M&M were among the gainers while Tata Steel was trading lower.
In the broader market, the BSE Mid-cap and Small-cap indices were trading 0.4-0.5% higher.
Market breadth was strong with 809 gainers and 265 losers on the BSE.
Wednesday, 20 August 2014
Just Dial gains after board nod for hiking FII limit
Just Dial is trading 3% higher at Rs 1,781 after the company's board approved increasing the shareholding limit of foreign institutional investors in the company to 75% from 49%.
The board also approved acquisition of Just Dial Inc. from Just Dial Global Private Limited. subject to necessary approvals and authorizations as required under applicable law and also decided to explore business opportunities in global markets.
"The board decided to seek approval of shareholders for increasing the limit on aggregate shareholding of foreign institutional investors (FIIs)/foreign portfolio investors in the company from existing 49% to 75% of the paid-up equity share capital of the company," Just Dial said in a statement.
The stock opened at Rs 1,755 and hit a high of Rs 1,783 on BSE. A combined 47,063 shares changed hands on the counter in early morning deals on BSE and NSE.
The board also approved acquisition of Just Dial Inc. from Just Dial Global Private Limited. subject to necessary approvals and authorizations as required under applicable law and also decided to explore business opportunities in global markets.
"The board decided to seek approval of shareholders for increasing the limit on aggregate shareholding of foreign institutional investors (FIIs)/foreign portfolio investors in the company from existing 49% to 75% of the paid-up equity share capital of the company," Just Dial said in a statement.
The stock opened at Rs 1,755 and hit a high of Rs 1,783 on BSE. A combined 47,063 shares changed hands on the counter in early morning deals on BSE and NSE.
Banks ask Bhushan to sell & lease back critical assets
A day after effectively taking charge of Bhushan Steel, lenders have delivered another punch. The bankers’ consortium, which met in New Delhi on Monday, has asked the troubled steel maker to sell and lease back some of its critical assets to reduce debt, as the borrower is finding it difficult to raise equity from the market.
This is part of the road map drawn by SBI Caps, the merchant banking arm of State Bank of India (SBI), for recovery of around Rs 40,000 crore that Bhushan Steel has borrowed from 35 lenders.
According to the plan, the steel company has been asked to deleverage by repaying debt. However, given the company’s present problems that led to a slide in its share price, raising equity through a qualified institutional placement was not a viable proposition at this point, a banker who attended Monday’s meeting told Business Standard.
This is part of the road map drawn by SBI Caps, the merchant banking arm of State Bank of India (SBI), for recovery of around Rs 40,000 crore that Bhushan Steel has borrowed from 35 lenders.
According to the plan, the steel company has been asked to deleverage by repaying debt. However, given the company’s present problems that led to a slide in its share price, raising equity through a qualified institutional placement was not a viable proposition at this point, a banker who attended Monday’s meeting told Business Standard.
| THE STORY SO FAR |
| AUGUST 2 CBI arrests Syndicate Bank’s chief, S K Jain, over graft charges AUGUST 7 CBI arrests Bhushan Steel Vice-Chairman & Managing Director Neeraj Singal for allegedly bribing Jain AUGUST 8 SBI Chairman Arundhati Bhattacharya says an external agency will be appointed to monitor day-to-day operations of Bhushan Steel. AUGUST 18 Lenders decide to go for forensic audit; say they will nominate three members on the company’s board |
The share price of Bhushan Steel has fallen 62 per cent since August 5. The shares closed at Rs 144.90 apiece on Tuesday.
Bankers said four assets, including a coke oven plant, had been identified by the steel company. It is not immediately known how much debt will be reduced through the sale and lease-back.
According to bankers, there is no dearth of buyers for the company’s facilities and SBI Caps is in the process of identifying prospective bidders, which might include global steel producers.
Banks have tightened their grip on the firm since its vice-chairman & managing director, Neeraj Singal, was arrested by the Central Bureau of Investigation on August 7 for allegedly bribing SK Jain, the now-suspended chairman & managing director of Syndicate Bank.
Bankers said the forensic audit, as decided by the consortium on Monday, would be done by an external agency and would seek to find out if the firm diverted the borrowed funds or used those for purposes other than those for which the loans were given.
It would also find out whether there was creation of genuine assets.
These steps were taken even as the loans continue to be standard on the books of banks and have not become non-performing. However, following the liquidity problem that Bhushan Steel, one of the most indebted steel makers of the country, is facing, the loan is now categorised as special mention account 2 that is overdue in 60 days.
A concurrent auditor will also be appointed to monitor cash flows on a daily basis and an independent engineer will look at the operations of the company.
“Given the magnitude of the exposure and the number of lenders involved, banks will take a huge hit if the loan turns bad,” said a senior executive of a public-sector bank.
Markets open firm; Nifty tops 7,900
The markets have opened on a firm note tracking positive global cues. Receding geo political tension in Ukraine and Gaza also aided bullish sentiment. Index heavyweight HDFC Bank and IT majors Infosys and TCS are contributing the most to the rise on the Sensex.
At 9.15 AM, the Sensex is up 69 points at 26,489 and the Nifty has climbed 17 points to trade at 7914.
Broader markets are in line with the large counterparts both the mid and smallcap indices have surged by 0.2 and 0.4%, each.
The market breadth is positive with 619 stocks advancing while 248 stocks declining on BSE.
Meanwhile, Foreign portfolio investors (FPIs) bought shares worth a net Rs 559.39 crore on Tuesday, as per provisional data from the stock exchanges.
Global Markets:
Markets have Asian stocks were steady on Wednesday after strong U.S. housing data lifted Wall Street shares, helping nudge Treasury yields higher and keeping the dollar well bid against the euro and yen.
Global equities have attracted funds in recent sessions on expectations major central banks, including the U.S. Federal Reserve, will continue to retain their easy money policies for a while. Tokyo's Nikkei gained 0.1 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat.
Wall Street drew support from robust housing data on Tuesday, which pushed up Treasury yields and drove the dollar to a nine-month high against the euro.