Q3 CAD narrows to $4.2bn on lower trade deficit

[Editor: As usual, hackneyed takes by two (Aditi Nayar and Shubhada Rao) so-called experts on CNBV TV18. Aditi Nayar  said, "Moderation in merchandise trade export growth and mild growth in services exports is likely to continue in Q4 as well. Particularly, for merchandise exports the base effect is rather high in Q4 particularly in March. So, I think a little bit of caution is still warranted." Also, remittances in Q4 could be on the lower side because of unofficial gold imports coming in through back channel, she said. The question is: what is she trying say...?]

Mar 05, 2014: India’s current account deficit (CAD) narrowed sharply to USD 4.2 billion (0.9 percent of GDP) in Q3 of 2013-14 from USD 31.9 billion (6.5 percent of GDP) in Q3 of 2012-13 primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports. 

This is also lower than USD 5.2 billion (1.2 percent of GDP) in Q2 of 2013-14. On a BoP basis, merchandise exports increased by 7.5 percent to USD 79.8 billion in Q3 of 2013-14 (3.9 percent in Q3 of 2012-13) on the back of significant growth especially in the exports of engineering goods, readymade garments, iron ore, marine products and chemicals. 

On the other hand, merchandise imports at USD 112.9 billion, recorded a decline of 14.8 per cent in Q3 of 2013-14 as against an increase of 10.4 percent in Q3 of 2012-13. Decline in imports in Q3 was primarily led by a steep decline in gold imports, which amounted to USD 3.1 billion as compared to USD 17.8 billion in Q3 of 2012-13 and USD 3.9 billion in Q2 of 2013-14. As a result, the merchandise trade deficit (BoP basis) contracted by around 43 per cent to USD 33.2 billion in Q3 of 2013-14 from USD 58.4 billion a year ago. 

Net services receipts improved during Q3 of 2013-14, essentially reflecting a decline in payments on account of services imports. Net services at USD 18.1 billion recorded a growth of 8.9 per cent in Q3 of 2013-14 (y-o-y). Net outflow on account of primary income (profit, dividend and interest) amounting to USD 5.4 billion in Q3 of 2013-14 was relatively lower than that in the corresponding quarter (USD 5.8 billion) of 2012-13 as well as the preceding quarter (USD 6.3 billion). In Q3 of 2013-14, gross private transfer receipts at USD17.3 billion showed an increase of 4.8 percent (y-o-y). 

How experts read it 

Q3 CAD is slightly better than even our lower band of estimation, Aditi Nayar of ICRA told CNBC-TV18 in an interview. 

For the full year, she sees CAD at USD 35-40 billion.  Moderation in merchandise trade export growth and mild growth in services exports is likely to continue in Q4 as well, she added. “Particularly, for merchandise exports the base effect is rather high in Q4 particularly in March. So, I think a little bit of caution is still warranted,” she said. Also, remittances in Q4 could be on the lower side because of unofficial gold imports coming in through back channel, she said. 

Agreeing with Nayar, Soumya Kanti Ghosh of SBI said that Q3 CAD has beaten estimates and for the full year, CAD can further narrow to USD 35-40 billion with larger probability of it being close to USD 35 billion. 

Meanwhile, sharing views on the impact of lowering CAD on the rupee, Shubhada Rao of Yes Bank said despite stress in the global currency markets, rupee has been better performing currency essentially because of CAD concerns ebbing and sustained improvement in capital flows.

“Funding risks have ebbed. Shrinkage in current account is what is giving the fundamental supports to the rupee to trade in narrow range,” she added.

Courtesy: Money Control

IVRCL Ltd: Huge Returns Expected

CMP: Rs.18.45

S Ramachandran,
Director of IVRCL Ltd

Infra player IVRCL currently has an order book of Rs.26,000 crore. However, of the total, orders worth Rs.18,000-20,000 crore are executable, Business Development & Corp Strategy S Ramachandran, Director told CNBC-TV18.

The company has been performing well in segments like buildings, irrigation but orders from the transmission line segment are at nascent stage, he informed. Ramachandran is hopeful that the company will perform well in FY14.

Further, the company is looking at reducing Rs.1,000 crore debt via stake sale in special purpose vehicles (SPVs) this year, he added.

Below is the verbatim transcript of his interview on CNBC-TV18

Q: Could you just walk us through how FY14 is looking in terms of order book visibility and which big projects do you think will come on board and show through for the course of FY14?

A: We have an order book of about Rs 26,000 crore but out of them few of them are non starters for various reasons. So, effectively we can say anywhere between Rs 18,000 crore to Rs 20,000 crore is the order book which can be implemented now.

As far as FY14 goes, it should be a much better year because we have done a little bit of reworking in terms of our overheads and people cost, lot of unwanted stuff has also been removed. I would say that, we definitely would have an upside from here.

In terms of the sectors, buildings’ are doing quite well. We have a fairly good order load of about Rs 4,500 crore on buildings. Irrigation and water is also pretty strong. We have moved to different states such as Madhya Pradesh, Chhattisgarh and now something is coming up in Orrisa, and Gujarat was always there. In terms of transmission lines still remains at a nascent stage and last is our highway sector.

Our turnover would come from basically these four sectors and in addition we do have some orders from railways. So, things are looking up for FY14. The only constrain here that is actually for all of us infrastructure companies is financing. We did have problems, I presume it is with everybody and this is the time we expect the bankers to come forward and hold us or at least support us, which even what the finance minister has been telling the bankers that you must treat them differently and should not be fair-weather friends. All these years we have been giving them fairly good amount of business but when we are in a little bit of trouble they should support us. Some of them are supporting, I guess the others also will come forward.
Q: The analyst community has gotten quite positive on your company ever since you made clear your intent to exit some of your assets and reduce your debt can you give us a definitive guideline of how much you plan to reduce your debt by from this current Rs 3,000 crore figure that you are sitting at. What are the tools that you guys will use in this calendar year itself either in the form of unlocking value in your special purpose vehicles (SPVs) or any other asset sales?
A: It has to be the SPVs only. After having signed this definitive agreement with Tata Realty for the three roads, some others are also seriously looking at some of our roads, which are under construction like in Indore-Jabhuva, Phaltan-Baramati, Chandrapur, these are all under construction. Some of them can go on stream anywhere between six to nine months from now.

In addition, we also have the Chennai desalination plant which is doing very well this whole year. It has been hitting over 95 percent capacity. Things have really fallen for good for us and it is all going to be trying to divest. Now, that the government has also formed three member committee consisting of finance minister, planning commissioner, and the minister of highways, there is some news about them recommending divestment of our equity immediately after financial closure. We need it to be able to sustain ourselves. In that process all the SPV debts will come out.

I would be happy if we can get another Rs 1,000 crore out of the SPV off, and maybe pare about Rs 300 crore of IVRCL debt during the year. We are working in that direction, it is not very easy but we are hopeful now this year we should be better off.

Q: What is the experience been with regards to road projects, it is less competitive or is it still quite cut throat in terms of bidding and are margins still quite low for some of these projects?

A: On the concession front there are hardly any bidders. Very few roads have actually been bid out or people have come forward with any offer. The concession needs to be revised in the sense that there is no control over escalation which is a big disaster. If this is how the rupee is going to go up, this is how the crude oil prices are going to go up, automatically it will reflect on diesel and petrol etc and that in turn will reflect on transportation cost, cement, steel etc.

It is very difficult for anybody to factor in such an unpredictable and very-very high rate of escalation. There is a talk also going on to see how some elements of this escalation can be factored in new concession. Unless the concession is modified and made more fair to both the concessionaire as well as the government, things are going to be non starters for some time to come.

Q: Just to throw some more light on the cost overruns that IVRCL is seeing this quarter you did see some improvement in your margins to about 9 percent or so, but the fear is that your cost overruns will prevent margins from improving further going ahead. What would your sustainable trajectory be in terms of margins in FY14?
A: In additions to cost overruns, we also have a threshold overhead. Essentially, in any infrastructure project unless the top-line improves drastically it is not able to sustain the threshold overheads which are there. It has to do with cost of finance because the interest rates are very high, it has to do with people cost, and all costs of administration. So, the magic only lies in increasing the turnover so that the overheads can be absorbed.

To that extent we have taken some definitive action to see how we can reduce our overhead costs in all ways but what is most crucial is to be able to work on our receivables. Typically, when we closed the project the final bill hangs on - that money is due, retention money hangs on - that money is due. Then there are bank guarantees and bank guarantees is as good as money. So, unless we have improvements in these directions, they are definitely going to bite into our margins. At the gross level we would still be anywhere between 9 to 11 percent.

Courtesy: www.moneycontrol.com

Winning Strokes:Think Different:

Crude Oil Price in Numex is near my third Target of $85 per barrel. When I predicted this, about a couple of months back at crude around $147 per barrel, 80% of the investors laughed at me and now I am laughing at them........hahahahaaa. What happened to Ashis Kapoor who said "General consensus is that the price of Crude Oil would rise....": Ennore Coke Ltd & ASM Technologies Ltd shot up today....Reliance Industrial Infrastructure, BGR Energy Ltd and KEC International Ltd shot up in late trade overcoming their earlier (intra-day) heavy losses. But why??? Buy IT, Real Estate, Bank and Oil Marketing Companies for the next 15 days time frame. Today Paid Members were asked to buy BPCL Ltd:

Buy, Ram Informatics Ltd, Premier Explosives Ltd (Getting magnified revenues from its two overseas subsidiaries in Turkey and Georgia, due to Rupee Depreciation), KPIT Cummins Ltd etc.:

I sometimes laugh when NDTV Profit repeatedly belches out the same boring messages of one of the analysts of a Foreign Brokerage Firm about Satyam Computers' clients' lists in the US. It seems Satyam has only one client and that too the one whose financials are in question.....!!! Ditto was done in case of ICICI Bank when it had very little exposure in the US financial markets. A day when the market sentiments at at their lowest points, is NDTV Profit started to tread the "Self Destructive Path" of CNBC TV18???!!! Financial Media in India is trying to emulate what another "Shylock", Bloomberg is doing in the US---just to Paint the Republicans (in the US) Red. What can the US Government do, if an Investment Bank gives loans at high interest rate to such persons who do not have the ability to pay, or invests in Emerging markets in an over-leveraged way!!!??? In the last couple of months Lehman Brothers had sold equities worth more than Rs.300 Cr. But still they are bankrupt--who is to be blamed for this carefully thought of plan...That is why I say do NOT play in the F & O or else be prepared for selling ur house one day:

US Fed is doing all that is necessary to stem the crisis and we should appreciate that and not crack a joke, like the Shankar Sharma did today on CNBC TV18:

I think it is the best time to invest in the IT companies when the INR is depreciating and the US Economy is set to improve in the days to come. Good part is that all these Indian Information Technology (IT) Companies till date did not announce any loss of major clients nor do they sound any death knell.

I do not know when will these media channels stop broadcasting messages from Foreign Brokerage Houses and create confusion among the investing community. If Lehman Brothers is a client of an Indian IT company and so is Bank of America?? So why only highlight Lehman and not Bank of America ??? May be we have to read between the lines of these apparently Naive News items, which gets rolled out in front of us everyday---were they being Paid by the Indian-bears so that "they could short the markets and make millions"??

Or they have a common aim to Paint Indian Growth Story, Black---just ponder over this point!!! If there is a cut in the Interest Rate in the US, then the Indian Markets would stage in a smart rally tomorrow: Today I advised my Paid Clients to go for selective buying of some scrips:

Fed pumps $70B into nation's financial system:

If pumping of money in the US system is called by Mark Faber as "Bernanke Bubble", I rename his ranting and chantings as "Faber-Delirium":

WASHINGTON – Urgently trying to keep cash flowing amid a Wall Street meltdown, the Federal Reserve on Tuesday pumped another $70 billion into the nation's financial system to help ease credit stresses.

The Federal Reserve Bank of New York's action came in two operations in which $50 billion and then another regularly scheduled $20 billion were injected in temporary reserves.

The maneuver takes place as Federal Reserve Chairman Ben Bernanke and his central bank colleagues prepare to meet to decide their next move on interest rates and conduct a fresh assessment of the country's financial and economic troubles.

Some believe the financial system turmoil raises the odds the Fed will cut rates. Others still predict the Fed will hold its key rate steady at 2 percent.

In the last few days, the American financial system has been badly shaken as bad bets on dodgy mortgage-backed securities claimed more Wall Street giants.

Lehman Brothers, the country's fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of Bank of America. Now, the insurance giant American International Group is dangerously wobbling. Against this backdrop, Wall Street on Monday plunged 500 points, the most since the September 2001 terror attacks.

The cash infusion Tuesday was designed to help ease a spike in the overnight lending rate between banks. A sharp rise in such borrowing costs makes banks reluctant to lend to each other and to hoard cash, worsening already tight credit conditions. Harder-to-get credit has crimped spending by consumers and business, a factor in the slowing economy. To help grease the financial plumbing Monday, the Fed pumped a total of $70 billion into the system through open market operations.

WINNING STROKE: THINK DIFFERENT:

The markets moved up today, in anticipation of a Rate cut by the RBI also due to governement's Rs.150 bn stimulus package, to the infrastructure sector and Rs.20 bn for the exporters of labour-sensitive products.

Napolean Pillai in CNBC TV18 was talking of 1800 on the Nifty.....what a choice of analyst by this news channel!!

Today again CNBC TV18 brought in Shankar Sharma (it seems both NDTV and CNBC cannot survive without the blessings of this gentleman) to give all sorts of rotten sermons. I decided not to react to the stupid utterances by some morons on television channels, everytime, except in certain cases. If people wants get themselves ruined everytime following all these fools and moron, they are free to do so......

My today morning's Intra-day call IDFC Ltd at Rs.53, gave massive return during the day as the stock closed at Rs.61.60, after facing resistance at Rs.62.55. The Company has posted a net profit of Rs 2104.323 million for the quarter ended September 30, 2008 as compared to Rs 1794.395 million for the quarter ended September 30, 2007. Total Income has increased from Rs 6044.297 million for the quarter ended September 30, 2007 to Rs 8487.793 million for the quarter ended September 30, 2008.

Larsen and Toubro Ltd (L &T) which was recommended to the Paid Groups at around Rs.680, gave more than 15% return in just 3 days time frame. The stock was mentioned yesterday in this blog.

Unitech Ltd recommended to the Paid Groups around Rs.25 and then mentioned in this blog shot up by more than 15% with huge volume. The stock has overcome a major resistance and is expected to move towards Rs.50, in the days to come. Many did not believe me when I said some days back that the stock could be potential multi-bagger from here due to huge land holding and its massive order book. Most of the analysts who proliferate TV these days had written off the stock.

Tata Steel Ltd moved up today by more than 13%, on the news of expected fall in the USD and also due to the fact that it has brakes on its greenfield projects in Jharkhand and Chhattisgarh, in the light of present liquidity crisis senario, WHICH IS POSITVE. If anyone has invested in the scrip today, please keep a SL of Rs.149.

PVR Ltd moved up today, by more than 4% today on the news that it to set up 15 entertainment centres with bowling alleys and gaming zones by 2012. This stock was also mentioned in the morning mail.

Arshiya International Ltd recommended at Rs.86 and again recommended at Rs.82 moved to Rs.100 today, before cooling down a bit. A profit of more than 20% in just 20 days time frame.

Yes Bank Ltd recommended in the today's morning mail moved up by more than 10% to close at Rs.64. The stock is expected to cross Rs.100 this time. Those who have still not take position in the scrip should seriously think of buying the scrip, keeping a SL of Rs.56.5.

My recently recommended Prajay Engineers Syndicate Ltd moved up by more than 3.4% today with good volume. There is already a research report on the company at: http://www.sumanspeaksplus.blogspot.com/--- you can go through it before buying the counter.

The company currently has around 31 projects underway and plans to construct around 37.6 million square feet in the next four to five years. All projects have credit Rating of A+ by FIs.The company want to invest around Rs.500-600 Cr in the coming years to develop the hospitality segment; to create 1000 room capacity by 2009 in the 5 star, 4-star and the 3- star business class categories; and to develop 31 projects including residential, commercial, retail and hospitality projects, aggregating to around 37.57 million square feet over the next five years.

PESL’s 100% subsidiary Prajay Holdings, has received a commitment of FDI recently, to the tune of rupees equivalent of US $ 36 million for one of its prime projects at Hyderabad wherein a development of around 40 lac square ft has been planned by the company.

Prajay Engineers Syndicate Ltd's Land bank stands at approximately 850 acres, 80% of which is in and around Hyderabad. If we calculate the value of land bank alone the stock should be above Rs.50.

The company is riding high on the real estate and infrastructure boom: it has set a target of reaching Rs.1000 crore turnover by FY10.

My Recommended English India Clays Ltd moved up by 6.99% with good volume. The company is coming up with a rights issue at Rs.1000 per share. Also the Cogeneration Power Plant of English India Clays Ltd, has been commissioned at Yarn Nagar and started operation w.e.f September 01, 2008. This is expected to save much of the energy cost and could fetch them carbon credits in future. Moreover, the company has already purchased land for its upcoming starch project in Karnataka. The company should benefit, as the commodity prices have come down dramatically, as it is an end user. The September, 2008 results of the company is simply excellent.

Banking and Infrastrufutre/Real Estate sectors, performed well, as was mentioned yesterday in this blog. My Recommended DCB Ltd moved up by 11% with good volumes, while both Federal Bank and Indian Overseas Bank moved up by more than 3%. All these stock were mentioned yesterday in this blog.

Phoenix International Ltd moved up by more than 8.75% nealy hitting the buyer freeze. The company's sister company Focus Energy Ltd is coming up with Gas production from 2009, which will free the shares of this company which has been pledged by Focus Energy Ltd to take a huge loan from the bank. The company could suddenly show its huge rental income on the books.

Likely government measures to pump prime the economy, hopes of a further cut in interest rates, firm European stocks and rebound in US index futures boosted the domestic bourses today. The BSE 30-share Sensex jumped 482.32 points, or 5.51%, led by a surge in realty, metal, banking shares and index heavyweight Reliance Industries (RIL). The barometer index breached the psychological 9,000 mark. All the sectoral indices on BSE were in the green.

Bank shares were in demand on as falling inflation heightened expectations for an interest rate cute by the Reserve Bank of India (RBI). As per the market buzz, the Reserve Bank of India (RBI) is expected to cut repo and reverse repo rates to the extent of 200 basis points and 125 basis points respectively at the weekend, in an attempt to shield the domestic economy from the global economic slowdown. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

Inflation based on the wholesale price index rose 8.4% in the year through 22 November 2008, lower than previous week's 8.84% rise, data released by the government at about 13:15 IST showed. Inflation had surged into double digits in early June this year after an increase in state-set retail fuel prices, and peaked at 12.91% on, 2 August 2008, the highest reading since annual numbers in the current data series became available in April 1995. Reserve Bank of India (RBI) governor D Subbarao today, 4 December 2008, said India remains vulnerable to global financial and economic developments and a period of painful adjustment was inevitable. The RBI governor said India's economic fundamentals were strong. He added that the outlook for India was mixed and there was evidence of activity slowing down.

Meanwhile, the Indian government is slated to announce a slew of measures at the weekend to pump prime the economy. The likely measures include a Rs 2000-crore export package, a further relaxation in external commercial borrowings norms and Rs 15,000-crore budgetary support for infrastructure.

A bout of volatility was witnessed earlier in the day. Likely government measures to pump prime the economy and hopes of further rate cuts by the Reserve bank of India gave a positive start to the domestic bourses. But the market soon slipped into the red due to lower US index futures, concerns about the weakening global economy and due to tension between Indian and Pakistan following last week's terror attacks in Mumbai may cap the upside. The market firmed up again in early trade. After the recovery, the market pared gains before bouncing back again. Sensex swung 518.35 points between the day's high and low.

European stocks reversed early losses to rally on Thursday, 4 December 2008, rising for the third session in a row as investors hoped deep interest rate cuts would help soothe the global economic slump. The key benchmark indices in France, Germany and UK were up by between 0.54% to 2.62%.

The Bank of England slashed interest rates by a full percentage point today to shore up Britain's crumbling economy and head off the threat of deflation. The cut took rates to 2% their lowest level since 1951. The central bank in Sweden slashed its key interest rate by a record 175 basis points to 2% on Thursday, a shock move to try and prevent the economy from sliding deeper into recession.

At its policy meeting later in the day, the European Central Bank (ECB) is expected to cut rates by at least 75 basis points.

Meanwhile, economic, corporate and industry data continues to be weak in major economies. Japan said on Thursday, 4 December 2008, it may be in a deeper recession than first thought, in the latest signal that the global economic downturn is sparing few corners of the world. Earlier, a corporate survey in Japan signaled the country's economic performance in the third quarter may have been even worse than first reported. Australia's vehicle sales slumped in November 2008.

US data on Wednesday, 3 December 2008, showed large job losses by US employers and a slumping service sector. The US economy is already in recession for a year.

Swiss Bank Credit Suisse today, 4 December 2008, reported a net loss of about 3 billion Swiss francs ($2.5 billion) in the two months to end-November 2008 and cut another 5,300 jobs.

Trading in US index futures indicated the Dow could rise 23 points at the opening bell. The US index futures bounced back from steep losses earlier in the day.

Closer home, the Indian government is reportedly considering various options including a strike on Pakistan to dismantle its terror bases in response to the recent Mumbai terror attacks. As a strike on Pakistan could lead to a full scale war between the two nuclear armed countries, India is maintaining a cautious approach and wants to gauge every possible ramification of its decision, reports suggest.

Tension between India and Pakistan have mounted after the Mumbai attacks. India has blamed Islamist militants based in Pakistan for the attacks.

The BSE 30-share Sensex was up 482.32 points, or 5.51%, to 9,229.75. At the day's high of 9,245.06 hit in late trade, the Sensex rose 497.63 points. The Sensex lost 20.72 points at the day's low of 8,726,71 hit in early trade.

The S&P CNX Nifty was up 131.55 points, or 4.95%, to 2,788.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,503 shares rose as compared with 668 that declined. 60 shares remained unchanged.

The BSE clocked a turnover of Rs 3727 crore today, higher than Rs 2,955.08 crore on Wednesday, 3 December 2008.

Nifty December 2008 futures were at 2796, at a premium of 8 points as compared to the spot closing of 2788. Turnover in NSE's futures & options (F&O) segment rose to Rs 34,123.92 crore from Rs 33,606.23 crore on Wednesday, 3 December 2008.

The barometer index BSE Sensex is down 11,057.24 points or 54.5% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,977.02 points or 56.47% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE Realty index (up 12.44% to 1,753.65), the BSE Metal index (up 7.93% to 4,803.91), the BSE Capital Goods index (up 6.91% to 6,506.98), the BSE Oil & Gas index (up 5.86% to 5,682.68), the BSE Power index (up 5.7% to 1,676.43), the BSE Bankex (up 5.64% to 4,803.37) outperformed the Sensex.

The BSE HealthCare index (up 0.92% to 2,849.12), the BSE Consumer Durables index (up 1.21% to 1,734.53), the BSE IT index (up 2.69% to 2,464.74), the BSE FMCG index (up 2.8% to 1,954.75), the BSE Auto index (up 3.22% to 2,243.11), the BSE Teck index (up 3.32% to 1,982.39) and the BSE PSU index (up 3.71% to 4,667.57), underperformed the Sensex.

As per the provisional data on BSE, foreign institutional investors (FIIs) bought shares worth Rs 307.14 crore today, 4 December 2008 and domestic funds bought shares worth Rs 79.24 crore.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) surged 8.4% to Rs 1,159.30 on recent reports it intends to restart retailing of petrol and diesel soon after margins on the two fuels turned positive.

Realty stocks rose on reports the government will next week unveil measures for the realty sector, which may include incentives for low-cost housing and lower loan rates. Indiabulls Real Estate, DLF, Unitech rose by between 11.28% to 17.17%.

Metal stocks rebounded from earlier slide on recovery in metal prices on the London Metal Exchange (LME). Tata Steel, Hindalco Industries, Sterlite Industries, Steel Authority of India, National aluminum Company rose by between 2.65% to 13.84%.

Banking stocks edged higher on rate cut hopes. India's largest private sector bank by net profit ICICI Bank rose 8.75% as American depository receipt (ADR) gained 5.64% on Wednesday, 3 December 2008. India's largest commercial bank State Bank of India (SBI) jumped 6.55%. India's second largest private sector bank by net profit HDFC Bank gained 3.52% as ADR rose 2.6% on Wednesday.

Shares of housing finance firms rose on likely sops for the realty sector, which may include incentives for low-cost housing and lower loan rates. India's top mortgage lender by market capitalisation Housing Development Finance Corporation (HDFC) rose 6.76% and India's second-biggest mortgage lender by market capitalisation LIC Housing Finance rose 10.37%.

Infrastructure Development Finance Company jumped 14.29% after a block deal of 17.01 lakh shares was executed on BSE at Rs 58.50 per share.

Indian Overseas Bank rose 3.04% after a block deal of ten lakh shares was executed on BSE at Rs 67 per share.

IT stocks shrugged off a stronger rupee after India's second largest IT exporter by sales Infosys' chief executive S. Gopalakrishnan today, 4 December 2008, said though the company has seen delays in orders there is no change in its third quarter December 2008 guidance. Infosys rose 3.12%, recovering from a 4.29% fall in the previous trading session. India's fourth largest IT exporter by sales Wipro gained 4.71% as ADR rose 1.95%. India's third largest IT exporter by sales Satyam Computer Services rose 1.04% as ADR gained 2.43% on Wednesday, 3 December 2008. India's largest IT exporter by sales Tata Consultancy Services rose 2.82%.

The Indian rupee was stronger in afternoon trade on Thursday as hefty gains in the domestic share market raised expectations of fresh capital inflows while a drop in oil prices also eased concerns of a widening trade deficit. The partially convertible rupee was at 49.78/80 per dollar, stronger than its Wednesday's close of 49.99/50.01. On Tuesday, the rupee had hit a record low of 50.65. A stronger rupee affects IT firms negatively as they earn most of their revenues from exports.

Auto stocks rose on hopes lower interest rates will spur demand which is mainly driven by finance and on possible measures by the government to boost the commercial vehicles sector. Mahindra & Mahindra, Maruti Suzuki India and Hero Honda Motors rose by between 0.56% to 4.74%.

India's largest commercial vehicle maker by sales Tata Motors up 13.29% on reports of possible excise duty cut on commercial vehicles as a part of the government's package to boost the economy.

Capital goods stocks rose on hopes government efforts to boost economy will lift orders. Larsen & Toubro, Suzlon Energy, Bharat Heavy Electricals, Crompton Greaves and Thermax rose by between 2.87% to 10.24%.

Power stocks rose on reports the likely government measures to boost the economy may include special credit window for the power sector. Tata Power Company, Reliance Infrastructure, Reliance Power, Power Grid Corporation of India jumped by between 3.21% to 7.46%.

India's largest drug maker by sales Ranbaxy Laboratories rose 3.57% on signing a pact with a US drug firm.

Orchid Chemicals & Pharmaceuticals rose 2.51% on receiving US approval for a new drug. Infrastructure stocks extended gains for the second day in a row on hopes a likely government package to boost the economy will give thrust to the infrastructure sector. Hindustan Construction Company, Nagarjuna Construction Company, and IVRCL Infrastructure & Projects rose by between 5.46% to 11.88%.

Marg was locked at 5% upper limit at Rs 34.45 at 12:54 IST on BSE, on bagging a contract for developing an airport at Bijapur in Karnataka.

PSU OMCs rose on fall in crude oil prices. BPCL, HPCL and Indian Oil Corporation rose by between 0.66% to 1.28%. Crude oil fell for a fifth day to the lowest in almost four years after a report showed US fuel demand extended declines because of the country's deepening economic slump. Crude oil for January 2008 delivery dropped as much as $1.49, or 3.2%, to $45.30 a barrel on the New York Mercantile Exchange. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Hindustan Oil Exploration Company rose 6.12% on bagging two oil and gas blocks.

Consumer durables stocks rose on hopes further rate cuts by the Reserve Bank of India would spur demand which is mainly driven by finance. Videocon Indusries, Blue Star,Titan Industries, Lloyd Electric and Rajesh Exports rose by between 1.52% to 3.56%.

Cement stocks rose on hopes likely government measures to boost the infrastructure sector will spurt demand. ACC, Birla Corporation of India, Ultratech Cement, Ambuja Cements and Grasim Industries rose by between 1.13% to 6.6%.

Unitech clocked the highest volume of 3.19 crore shares on BSE. Suzlon Energy (2.46 crore shares), GVK Power & Infrastructure (1.82 crore shares), Housing Development & Infrastructure (1.1 crore shares) and Jaiprakash Associates (82.64 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 404.61 crore on BSE. State Bank of India (Rs 203.61 crore), Educomp Solutions (Rs 178.33 crore), Reliance Infrastructure (Rs 153.18 crore) and DLF (Rs 132.49 crore) were the other turnover toppers in that order.

Haldyn Glass Gujarat spurted 8.51% on increase in the promoters' stake in the company.

Nava Bharat Ventures jumped 20.28% on share buyback plan.

PVR galloped 4.88% on reports it plans to set up entertainment centres across the country.

Chinese stocks rose after the government on Wednesday, 3 December 2008, announced measures whereby it will use financial policy to support the economy. The Shanghai Composite was up 1.84%. But most Asian shares weakened after earlier gains. Key benchmark indices in South Korea, Hong Kong, Japan and Taiwan were down by between 0.58% to 1.58%.

China will make use of required reserves as well as interest rates and the exchange rate to ensure ample liquidity in the banking system, the government said on Wednesday. The State Council, China's cabinet, also approved measures aimed at stabilising the domestic stock market, boosting bond issuance and increasing the supply of credit.

Winning Strokes:

Ennore Coke Ltd recommended to the Paid Groups, a couple of days back gave more than 30% in less than 7 days. Amazing!! What is the real story now........why is it suddenly rising???!!!

Videocon Industries Ltd recommended on 1st October, 2008, to the Paid Groups in the Morning Mails, rose up by more than 13% on the news that the govt revived the proposal for allowing 100% FDI in electronics and sports goods retail.

This line was mentioned on 1st October, 2008 to the Paid Groups: "The govt revived the proposal for allowing 100% FDI in electronics and sports goods retail. This is very good news for the companies like Videocon Industries Ltd. This is very good news for the companies like Videocon Industries Ltd." I think most of the Paid Group members made money from this scrip.....

All the Nuclear Deal related stocks or defence related stocks (KEC International Ltd, BGR Energy Ltd, CESC Ltd, Reliance Power Ltd, BHEL, L & T, Premier Explosives Ltd, HCC etc.) are expected to shoot up in the coming days. BGR Energy Ltd has very recently being recommended by Kotak Securities Ltd.

Infosys Technologies Ltd recommended a couple of days back also rose up by more than 4% on last Friday. Patni Computers Ltd recommended to the Paid Groups rose by more than 7% on 1st October, 2008----both the scrips gave huge intra-day gains. All the technology counters (IT Counters) are expected to do well in the coming months due to rapidly changing (read improving) fundamentals of the US economy.

The Real Estate/Construction stocks are expected to do well in the coming months as the inflation is going to fall further in the coming weeks and the RBI is expected to cut down the CRR of the banks. I am very bullish on Banks, Real Estate/Construction and Power.

Among my recently recommended counters in the banking sector on last Friday, Yes Bank, SBI, etc did well, while Dena Bank, DCB etc. closed flat before cooling down a bit.

The Sensex is expected to reach 21, 000 by October, 2009 and by 2010 end we could see 40, 000 on the Sensex. By this "Deewali" we could see 17, 500 on the Sensex and 5500 on the Nifty.

If even after a MASSIVE BAIL OUT PACKAGE of $700 Billion dollar, if the US investors looks at some trivial things like employment data (if industries are to be made competitive in a depressing environment it is obvious that they will cut job----what is great news about it. I would consider it to be a positive news for the markets) or some such foolish things to decide on investing in the stock markets and feel depressed then God Help the US investors and their analysts......

If some "Investment Banks", whose employees talk like supermen in front of Television Cameras (the Hemendra Kothari variety) take leverages which are not in tune to their coffers what would the Government in a free economy do, unless these erring banks fall due to their own weights.

The Bush administration is doing all that it could to correct these aberrations with the help of Democrats. It is good to see how in the US both the major political conglomerates are working hand and in hand to pull the "elephant out of the mud", unlike Indians.....

We are better off in India.....!!!! I think Indian investors and analysts are better equipped than those overseas-faces which we see everyday on Fox News or CNBC TV18. CNN however has better breed of financial journalists but most of them are boring, lacking presentation, like Lata Venkatesh of CNBC TV 18.

What I feel is that CNBC TV18 should use the services of charming and talented Ayesha Faridi more to increase the TRP of their channels......like NDTV is using Shabani Bagai these days.

Lata tried in vain to create a sensation with his new catch, William B, but unlike big "B" of our own Hollywood, this gentleman probably from London School of Economics, only used his "B" to "Bore" the viewers/ audiences.

It seems English Media (Financial Channels) has insatiable love for overseas economists, most of whom are junk and parrot the same thing time and again (Ambarish Baliga, Ved Prakash Chaturvedi etc. variety). I am disappointed to see how William B mixed up the simple AIG case with the Lehman Brothers' case, without understanding the fact that AIG is an insurance company and it is natural that it could be affected, when the whole of the financial system is in turmoil!! But then it has already been bailed out, so where is the problem!!

Here in India, after the new political equation assumed power at the centre, "bomb culture" has become order of the day. I have already mentioned earlier that when a Bomb drops or explodes in a place it will not distinguish between a Hindu and a Muslim--it will summarily kill all those who in the proximity of that bomb.

Now Christian Missionaries have started giving lessons on how "conversions has taken place without use of any money or other such baits". I do not understand why they do not answer to this simple question, "If God is same,which all the religions around the world preaches, what is the need for conversion at all....."? So the truth lies somewhere.....!!!

I am of course an atheist......as I do not understand the concept of "God" and would prefer to study (or do some research) or practise music, or play chess or take some rest, etc. than spending my time in a Temple or a Mosque.

Buffett: My fix for the economy

Investment guru proposes his own solution to the credit crisis after warning that the $700 billion bailout may not be large enough.

Warren Buffett said Thursday the pricetag of the controversial $700 billion Wall Street bailout may have to rise, and suggested that Treasury team with private investors to buy the distressed mortgage assets at the center of the rescue plan.

Buffett, the chairman and CEO of Berkshire Hathaway, likened the recent turmoil in the markets to an "economic Pearl Harbor" and said that the economy needs a quicker response than Congress has provided.

"We had an economic Pearl Harbor hit," he said during an appearance at Fortune's Most Powerful Women Summit in Aviara, Calif. "For a couple of weeks we've been arguing about who's fault [and] fooling around while things have gotten a lot worse."

On Wednesday, the Senate passed a $700 billion bailout package. The House is expected to vote on the revised bill on Friday, four days after rejecting an earlier version.

"It will cost more to solve this problem today than it did two weeks ago," said Buffett, referring to when Treasury Secretary Henry Paulson's first proposed that Congress help rescue Wall Street, which has seen the collapse of Lehman Brothers and Bear Stearns and the sale of Merrill Lynch. "It's that bad. If we don't get it solved next week, I may go back to delivering papers."

He didn't estimate how much more money would be needed to buy enough toxic mortgage investments in order to create a more stable market and get credit flowing.

Finding a price for distressed assets

But Buffett described a plan he thought of Thursday morning on the way to the Summit that would allow Treasury and private investors to buy assets together. He said his proposal would quickly kickstart demand for mortgage-backed securities and help find a market price for these troubled assets.

"One easy way to do part of the program is to say to anybody - hedge fund operators, Wall Street firms, or anybody else - that the Treasury will lend you 80% of the purchase cost of a bunch of distressed assets," he said, explaining the concept of his proposal. The investors benefit from borrowing at lower rates, but Treasury would get first claim on the sale of those assets, which means it would get its loan back plus interest and possibly turn a profit.

"Now you have someone with 20% skin in the game," he explained. "Believe me, I won't be overpaying if I'm buying with that kind of leverage. And you have someone [the investors] to manage the assets to the extent they need to be managed."

Buffett said that the bill that passed the Senate Wednesday evening isn't perfect, but that it's crucial to prevent the global economy from grinding to a halt. He then warned it will take a while to work and that the economy is going to struggle even with its passage.

He said the problems now facing the economy are unprecedented, and likened the the crisis to a great athlete that has had a massive heart attack.

"We've never seen anything like this where perfectly credit-worthy companies can't get funds," he said.

"Anyone who thinks this bill is a panacea is [making] a mistake," he said. "Without it, it's a disaster."

Raj Television Ltd recommended to the Paid Groups yesterday at Rs.63.50 touched Rs.71.10 today: 
Also my recommended Country Club Ltd at around Rs.11.40-11.50, moved to Rs.13.40 intra-day.. and Glory Polyfilms Ltd touched Rs.3.54 intra-day..!!

AIADMK seems to be heading for a sweep (It has already swept Tamil Nadu --this is a couple of days old report which appeared in a Financial Website) in the Tamil Nadu Assembly polls, having established leads in 198 constituencies in the 234-member House.

In an interview with CNBC-TV18’s, M Raajhendhran, CMD, Raj Television Network says, in the period of DMK, media companies were suffering a lot. Media companies will be relieved, once the AIADMK rule comes, he adds.

He expects revenues of Rs 90 crore in ’11-’12.

Below is the verbatim transcript of his interview with Reema Tendulkar and Ekta Batra of CNBC-TV18.

Q: The markets are quite relieved atleast for your company that AIADMK is going to be holding the power and the reigns over there. For a business per se, what impact do you think that will have? Previously with DMK ruling, any kind of problems that you faced?

A: In the period of DMK, we were suffering a lot. But now we can have a peaceful business. We can do a good business. In that regime, every media got troubled.

Q: Can you quantify what you mean by suffering and trouble? What was your business like, how much did you have to lose out on account of that?

A: Total media industry was suffering a lot. All the media, cinema, newspaper or visual media, everything was suffering. But now they will be relieved, once the AIADMK rule comes.

Q: Let us talk about how this could possibly affect your distribution revenues, can you give us an update on what increase in cable collections we could see?

A: Last year, last quarter we made a profit. Now, in future we will make profit. We are coming out with several programmes and there won’t be any distribution problem in future.

Q: So, in terms of under-recoveries, how much do you expect it to increase by in particular?

A: It is too early to say.

Q: What were your under-recoveries at this point in time? Can you give us an amount?

A: We may grow by 50%.

Q: What other impact can you see in terms of an improvement for business sentiment for you going forward?

A: We were doing production of movies earlier, now we stopped it. We cannot compete with them. In future, we can produce movies. Our network is second largest in South India and sixth largest network in India. Though we were strong enough because of the political arena, we couldn’t come up.

Q: On the subject of under-recoveries, we understand that for your total distribution revenue, you were facing under-recoveries to the tune of maybe 60-80%, is that perhaps true?

A: We were collecting only Rs 1 crore. But we will be able to collect about Rs 5 crore per month.

Q: So, you expect it to go up to Rs 60 crore totally?

A: Yes, Rs 60 crore per annum.

Q: Tell us what the impact on your bottom-line would be, you did a profit of around 2 crore if I am not mistaken, tell us how this would help you going forward?

A: I will work it out and come back to you.

Q: Going by the calculation that you told us that you were managing to recover only about Rs 1 crore, now you would perhaps be able to recover that additional Rs 48 crore. Would that totally come up to your revenue? Will your revenues grow up from Rs 45 crore by another Rs 45 crore?

A: Yes.

Q: So, Rs 90 crore is what FY12 could potentially look like?

A: Yes, ’11-’12 we are expecting Rs 90 crore.

Q: Any sort of plans on improving your market share at all, you stand at number four currently, can you tell us about your market share in terms of how you plan to improve it?

A: Yes, we are improving via the content. Distribution will help us to grow.

Q: Give us a quick update on how you expected to improve for the entire media space, once the AIADMK comes into power?

A: There won’t be any interference in the media. Yes, the government interference won’t be there, their family interference was there earlier.

Steel and mines ministry seeks pre-budget hike in import duty on finished steel

[Editor: Meanwhile, Rajat Bose of www.rajatkbose.com told CNBC-TV18, on January 23, 2015: "I have seen that any good news on Europe Tata Steel Ltd (Rs.402.65) tends to perform for valid reasons. In Tata Steel I would put a stoploss below Rs.395, on closing price basis I am looking at a price of Rs.418-421. Again this is a positional trade and the next target beyond Rs.421 would be Rs.429. Tata Steel could well be forming a bottom, getting a fillip with this new found momentum.” Yesterday, Ambareesh Baliga - Independent market expert told CNBC-TV18: "Tata Steel  is one stock where I see further movement of Rs.20-25 more from the current level". So, we could soon see a rally in the steel stocks]

Photo: Scrap Monster

KOLKATA, 22 Jan, 2015: The union steel and mines ministry has sought an immediate hike in import duty on finished steel to 10% from the present level of 5 to 7.5% and a withdrawal of duty on raw materials like, iron ore and coking coal in the light of surging steel imports. 

While these have been part of its Budget recommendations, the move gathered significance recently with the ministry shooting off an urgent letter to the finance ministry to implement a pre-Budget change in duty rates. 

The move, if implemented, will bring much needed cheer to domestic steelmakers grappling with rising imports and scare raw materials, the ministry's suggestion against lowering export duty on iron ore will disappoint the mining sector players. 

The Budget proposals were sent to the Finance Ministry as part of its budget recommendations late last month.

Steel imports grew by 58% during April-December 2014, even as exports fell by 6.6 % in the same period. In contrast, domestic steel consumption has shown a lacklustre growth of 1.4% in the first nine months of the current fiscal. 

The domestic steel industry has been urging the government to take measure to restrain steel imports, which have surged in the past months. A hike in import duty on finished steel is likely to check imports from China, which is facing an economic slowdown. 

However, a huge quantity of steel is also being imported from countries like Japan and Korea, due to the free trade agreements between India and these countries that allows preferential tariffs. 

On the raw material side, withdrawal of import duty on iron ore and coking coal will come as a huge benefit for domestic steelmakers who are facing problems in sourcing iron ore due to the mining problems. Rupee depreciation has also emerged as a threat for steel companies which have had to resort to imports of iron ore, in addition to coking coal imports. 

Removal of import duty will thus help Indian steel companies contain production costs and make them more competitive both in the domestic and export markets. 

However, if implemented, the ministry's suggestion will disappoint mining industry players who have been demanding a reduction in the 30% export duty on iron ore. 

Courtesy: The Economic Times

What revival plan? Kingfisher fails to obtain NoCs from stakeholders

[Editor: It seems a section of  JOURNALISTS are no better than 3rd rated ANIMALS!! Anyway, tell me, what is the role of journalists? To destroy India or to help re-building India...? If your take is the 2nd one, then explain to me, why instead of writing positives about Kingfisher Airlines Ltd or giving suggestion, as to how to start the operations, most of the Indian Media, are going ga ga against the company? Is the airlines running any "Ponzi Scheme"? Or what is the real reason? So, many families are attached with this airlines. If it starts operation, these distressed families would be saved. Isn't it? Also, so many shareholders have invested their funds, in the company, and would love to see their money get appreciated. Why are these people bent on behaving in such an insane way, like they did in case of "Delhi Rape Case".
It is a fact that most people like/enjoy, others being criticized and harassed, and these unholy people hit those raw nerves to gain brownie points--an example of very low mentality. I again reiterate: Journalists should find out solutions so that this distressed airlines can start its operation; but instead they are in a taunting mood (look at the headline). Also, did you see the way, Shreen Bhan of CNBC TV18 was interviewing, Mr.Subrata Roy, yesterday, as if he is a thief........Huh!!..........thank god that lady did not interview me or Ms.Mamta Banerjee...!! If the government does not bring laws to clip their wings, then I fear one day, they might pulverize India, for their own interest] 

Photo: Indian Express

Vijay Mallya-led Kingfisher Airlines on Wednesday  submitted a revival plan to aviation regulator  DGCA to restart operations, asking for its licence to be renewed with the help of funds from its parent UB Group.

We have given a complete plan…which includes our schedule that we plan to operate, the aircraft we plan to operate, the number of people we have,” Kingfisher CEO Sanjay Aggarwal had said yesterday.However, the grounded airline has failed to obtain the no-objection certificate from the Airport Authority of India (AAI).

The DGCA had insisted that Kingfisher, before resuming operations, obtain no objection certificates (NOCs) from all the stakeholders and also clear all dues and salaries of its employees to ensure safe and smooth operations. However,  chances of the airline’s revival appear slim with lessors seizing the aircraft and lenders selling pledged shares.

Also, according to the new revival plan,the airline was to start operations on a “cash-and-carry basis” (paying airport operators and oil companies on a per take-off basis) and planned to use  the Rs 652-crore funding for payment of salary dues, refurbishment of planes and daily operating losses. However, sources in the AAI told CNBC-TV18 that the airline will not be able to operate on a cash-and carry basis since it has still not cleared dues of Rs 290 crore and nor has it furnished any bank guarantees, which is a prerequisite for the airline to restart operations.  What’s worse is the airline has not been replying to queries on settlement of dues either.

A DGCA official was further quoted by the Financial Express as saying that  airline not got clearance from  banks and service tax department among others

Kingfisher’s flying licence  was suspended in October and later lapsed in December after the airline was grounded following a strike by its employees, including pilots, over non-payment of dues. The airline has since then been talking about roping in investors to raise funds but there has been  no development on this front.

Meanwhile, banking sources also told the channel that the revival plan in unclear and inconclusive like previous plans submitted by the airline. According to a report in the Financial Express, State Bank of India has sent a legal notice to KFA seeking recovery of loans.

As per the revival plan, Kingfisher would resume limited operations with five Airbus A-320 and two turboprop ATR aircraft and gradually step up its operations by increasing the number of planes to 20.

The one silver lining about the revival plan is the promise to pay its staff salaries till January 2013. Earlier this month, the airline paid two months worth of salary dues to its employees who have not been paid for the past 10 months.

Agarwal told DGCA that the airline planned to start the operations immediately after renewal of its SOP and try to repair other planes once the operations start”.

Courtesy: First Post