News across India 27th Feb 2008

News across India

• Mutual Funds see opportunity in stock market fall
• RIL, Reliance Cap among Asia's 20 best for future investor returns
• Budget 2008: Railway fares set to fall further
• Railways turns up the heat on airlines by slashing AC fares
• Cement transportation to jump 100% by 2011-12
• Steel firms to gain on rail plans
• Lalu launches 53 new trains
  

Mutual Funds see opportunity in stock market fall

MUMBAI: Equity fund managers, who trimmed stock exposure to a four-month low in January, now plan to deploy cash back mainly in energy and financial sectors, according to a poll conducted by a news agency from Feb 19 to Feb 25.

Seven of the 10 participants in the Reuters Asset Allocation Poll said the benchmark index was not likely to show negative return in the next three months, making battered stocks a good bet at current levels. "Valuations are looking quite attractive after the recent decline in the stock market," said R Rajagopal, who oversees about Rs 3000 crore as chief investment officer for DBS Cholamandalam Asset Management Ltd.

"The corporate results of third quarter have also been robust enough to indicate that the growth rate would be in the range of 20-25 per cent," he added. (Full story)

 

RIL, Reliance Cap among Asia's 20 best for future investor returns

NEW DELHI: Seven Indian firms, including Reliance Industries and Reliance Capital from the two Ambani groups, have been named among Asia Pacific's 20 best companies in terms of expected investor returns over next five years.

The list titled "Tomorrow's Winners" prepared by global investment banking giant Morgan Stanley also includes telecom major Bharti Airtel, engineering and construction major Larsen & Toubro, Kishore Biyani-led Pantaloon Retail, infrastructure company IDFC and real estate firm Sobha Developers.

"Of the companies selected, more than half are listed in either China or India. Many of these are capitalising on major secular trends, such as infrastructure investment and per capita consumption growth," Morgan Stanley said in a report. (Full story)  

 

 

Budget 2008: Railway fares set to fall further

NEW DELHI: Setting the tone for an 'Election Budget', railway minister Lalu Prasad is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods.

Since this will be the last full-fledged Railway Budget before the general elections, scheduled for next year, the railway minister is expected to go all out with populist measures, ministry sources said. According to officials at the Rail Bhawan, there will be no deviation from the trend of not hiking freight and passenger rates as the Railways is right on track to meet the twin objectives of reducing operational cost and increasing revenues. Between April 2007 and January 2008, earnings from freight and passenger traffic have grown 11% and 14%, respectively, giving enough cushion for Mr Lalu Prasad to cut rates. (Full story)  

 

Railways turns up the heat on airlines by slashing AC fares

NEW DELHI: Competition between the railways and low-cost airlines is set to reach a new level with railway minister Lalu Prasad Yadav lowering AC fares up to 7%. The airline industry is already facing a tough time thanks to spiralling aviation turbine fuel (ATF) price.

In the last nine months alone, airfares have gone up by Rs 900 as fuel surcharge. This has helped the railways woo passengers as the gap between airfare and rail fare has widened significantly. While on long-haul routes, such as Bangalore-Delhi and Mumbai-Kochi, airlines have managed to remain more competitive, on short-haul routes, such as Delhi-Chandigarh and Delhi-Amritsar budget, carriers are finding the going tough.

Presenting his fifth budget , Mr Yadav announced reduction of fares for AC-I class by 7% and AC-II tier by 4%. A fare reduction of 2% for the newly-designed AC 3 tier and AC Chair Car coaches was also announced. The reduction would, however, only be half for popular trains and during the peak period.

Consolidation in domestic skies has also left the Railways better placed. With merger and acquisition in the aviation industry, various offers such as Rs 2 and Rs 50 airfares launched by the carriers have disappeared. The minimum airfare available today is for Rs 2,550. A few years back the same Rs 2,550 airfare was available for Rs 900. (Full story)

 

 

Cement transportation to jump 100% by 2011-12

NEW DELHI: With the reduction of freight charges, the Indian Railways has set aside an ambitious target of doubling the transportation of cement to 200 metric tonnes by 2011-12 from the current 100 metric tonnes.

"Railways receive more than 100 MT traffic every year from the cement industry and we are targeting a loading of 200 MT from the cement industry in 2011-12," Railway Minister Lalu Prasad on Tuesday said while presenting the Railway Budget 2008-09 in Parliament.

Production of cement is expected to increase from 170 MT to 280 MT by 11th plan, he said adding "there are more than 10 big clusters of cement production in the country".

Prasad said work is in progress on Nandyal-Yerraguntla, Jaggayyapet-Mallacheruvu and Vishnupuram-Janpahad new lines and would be completed within the stipulated time frame. (Full story)  

 

Steel firms to gain on rail plans

NEW DELHI: India's stainless steel consumption will rise by at least 140,000 tonnes over the next one year or so after the railway minister announced plans to build new freight wagons and passenger coaches from the metal, a senior industry official said on Tuesday.

Railways minister Lalu Prasad Yadav told Parliament that 20,000 new freight wagons would be needed in 2008/09 and they would be constructed from stainless steel. He added that all new passenger coaches would be made from the commodity by the following year.(Full story)

 

Lalu launches 53 new trains

NEW DELHI: Railways Minister Lalu Prasad Yadav has proposed 53 new trains, including 10 Garib Raths, in the coming fiscal. Besides, he announced extension of 16 trains and higher frequency for 11 trains. The number of new trains announced in this budget is significantly higher than the 32 new trains and 8 Garib Raths announced last year.

While daily service of Garib Raths would be provided on short-haul routes, such as Varanasi-Delhi and Secunderabad-Visakhapatnam, on longer routes like Ranchi-New Delhi, it would run twice or thrice a week. Garib Rath is a low-cost air conditioned (AC) train. New Garib Raths would also be deployed on Jaipur-Chandigarh, Secundarabad-Visakhapatnam and Ranchi-Delhi routes. Full story-

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Sub Prime Crisis - Forecasts StanChart

Sub Prime Crisis  - Forecasts StanChart

Announces 27 per cent increase in pre-tax profits to $4.04 billion (£2.05 billion).

Shares in Standard Chartered rose 4.6 per cent in early London trading as the bank announced a 27 per cent increase in pre-tax profits to $4.04 billion (£2.05 billion) and offered a confident outlook for 2008.

It was the first time profits had exceeded $4 billion. Operating income rose 28 per cent to $11.1 billion.

Peter Sands, chief executive, said the bank's main markets in Asia and the Middle East, would show "much greater resilience than in previous cycles" to economic slowdown in the US and Europe. Asian domestic economies had expanded and trade had increased between them, making them less reliant on exports to the west, he said.

The group plans a 11.7 per cent increase in the total dividend for 2007 to 79.35 cents. The shares rose 73p to £16.53.

Sands cautioned that the group would not be immune to continued turbulence in credit markets. "The turmoil is far from over, we do expect further shocks and surprises," he said.

However, he said the bank had "never been in better shape" and was well positioned to weather such shocks, having strong finances and having paid close attention to its risk profile. The group's tier 1 capital ratio, an important measure of financial strength, rose from 8.3 per cent to 9.8 per cent over the year.

Total losses from the US subprime-related turmoil had been $300 million, with its interest in Whistlejacket, the structured investment vehicle which went into receivership recently, accounting for $133 million of that. The figure was in line with previous guidance.

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Reliance Energy Ltd announced Buy Back

Board meeting on March 5 to consider the proposal.

The Anil Dhirubhai Ambani group-promoted Reliance Energy Ltd (REL) has proposed a buyback of its shares.

The management has not stated any particular objective for buyback, but a press release said it has convened a board meeting on March 5, to consider the proposal.

The move comes just two days after Reliance Power, another group company in which REL owns 45 per cent, offered bonus shares to its shareholders in the ratio of 3:5.

According to industry watchers, one reason for the buyback could be to keep the share price from falling. The REL stock has lost about 36 per cent from its peak of Rs 2,631.70 in January and it currently trades at Rs 1,697.25.

Typically, managements initiate a buyback if they believe their companies' shares are undervalued and that the market price does not reflect the fundamentals. By supporting the stock price at a certain level, the company can absorb any selling by investors, they point out.

Buyback options, however, require spare cash. The company's reserves and surplus were approximately Rs 9,000 crore at the end of March 2007.

Going by the market regulator's rule that companies can invest up to 25 per cent of their reserves on share buybacks, the amount spent on acquiring the shares could be in the region of Rs 2,250 crore.

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Reliance MF launches new Fixed Horizon Fund

Reliance MF launches new Fixed Horizon Fund

 

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Name of Fund: Reliance Fixed Horizon Fund VII-Series 3

Scheme: It is a close-ended income scheme.

Objective: The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility.

Fund Opens: 26 February 2008

Fund Closes: 28 February 2008

Face Value: Rs 10 per unit.

Investment Options: The scheme will have growth and dividend option.

Entry Load: Being a close end scheme it will not charge any entry load during the initial offer.

Exit Load: The scheme charges an exit load of 2.00% if redeemed on or before completion of 6 months and 1.00% if redeemed between 6 months-1 day and maturity of the scheme.

Minimum Investment Amount: The minimum investment amount is Rs 5,000 and in multiple of Re 1 thereafter.

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ING MF launches ING FMF- Series XXXV

ING MF launches ING FMF- Series XXXV

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Name of Fund: ING FMP- Series XXXV

Scheme: ING Fixed Maturity Fund Series XXXV is a close-ended bond scheme offering an investment plan of 93 days maturity. The scheme shall mature on 30 May 2008.

Objective: The scheme will be investing in a portfolio of government securities or highly rated corporate bonds maturing close to the maturity of the scheme so as to generate returns comparable with alternative fixed-income instruments of similar maturity. The scheme will invest in debt securities with maturity coinciding closely with the maturity of the scheme, so as to minimise the impact of price fluctuation of such securities and the value at maturity.

Fund Opens: 25 February 2008

Fund closes: 27 February 2008

Face Value: Rs 10 per unit

Investment Options: The scheme provides two plans i.e. retail and institutional plan with a sub-option of growth, dividend and bonus.

Asset allocation: The scheme shall invest up to 100% in debt securities and money market instruments including call money and reverse repo. The debt securities may include securitised debt up to 100% of the net assets. The investments in derivatives instruments shall be to a maximum of 50% of the net assets of the scheme.

Entry load: The scheme does not charge an entry load as it is of close-ended nature.

To provide liquidity to investors, the fund proposes to provide repurchase facility in the scheme on 28 March 2008, 27 April 2008, and 29 May 2008. If repurchase request is submitted after 28 February 2008 and on or before 29 May 2008, the scheme may levy 1% as Contingent Deferred Sales Charge (CDSC).

Minimum Investment Amount: The minimum investment amount is Rs 5,000 and in multiple of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 1 crore in multiple of Re 1 thereafter.

Minimum subscription amount: Rs 1 lakh

Benchmark index: CRISIL Liquid Fund Index

Fund Manager: Mr. Prashant Singh

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Mirae Asset MF launches new Liquid Fund

Mirae Asset MF launches new Liquid Fund

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Name of Fund: Mirae Asset Liquid Fund

Scheme: It is an open ended liquid scheme.

Objective: The primary investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The scheme does not guarantee any returns.

 

Fund Opens: 27 February 2008

Fund Closes: 3 March 2008

Face Value: Rs 1000 per unit.

Investment Options: The scheme will have super institutional, institutional and regular plans. The scheme offers growth, bonus and dividend option under each plan.

Dividend frequency: The scheme offers dividend with facility of dividend reinvestment on daily, weekly and monthly dividend. It also offers dividend transfer and monthly dividend payout option.

Entry Load:The scheme will not charge any entry load and exit load during the initial offer.

Asset Allocation: The scheme invest 0-100% in money market instruments. It may have investment of 0-100% in debt instruments with residual maturity and re-pricing tenor not exceeding 1 year. The scheme may have exposure up to 50% of the net assets in securitised debt. Debt instruments include securitized debt up to 50% of net assets. The scheme may invest in derivatives up to 50% of the net assets of the scheme. In addition, the scheme may also invest in foreign securities up to 25% of net assets of the scheme.

Minimum Investment Amount: The minimum investment amount under regular plan is Rs 5000 and in multiple of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 1 crore and in multiple of Re 1 thereafter. The minimum investment amount under super instituinal plan is Rs 10 crore and in multiple of Re 1 thereafter.

Benchmark Index: CRISIL Liquid Fund Index

Fund Manager: Mr. Murthy Nagarajan

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Mutual Funds 27th Feb 2008

Mutual Funds

• AIG MF launches Short Term Fund
• ABN Amro adds dividend option for its interval plan
• ABN Amro MF declares dividend
• Birla Sun Life MF declares dividend
• ING MF declares dividend
• Franklin Templeton MF declares dividend
• JM Financial MF changes Fund Manager
• ING MF launches ING FMF- Series XXXV
• ING MF files an offer document with SEBI
• Kotak MF declares dividend under quarterly interval plan
• Kotak MF revises minimum purchase amount
• Mirae Asset MF launches new Liquid Fund
• Religare skips race for StanChart AMC

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AIG MF launches Short Term Fund

AIG Mutual Fund launched AIG Short Term Fund. The primary objective of the scheme is to seek to generate income from a portfolio constituted of short to medium term debt and money market securities. The fund will invest up to 40%-100% in debt and money market securities with maturity less than equal to 370 days or have put options within a period not exceeding 370 days. It will have investment of 0-60% in debt instruments including government securities, corporate debt and other debt instruments with maturity greater than 370 days.

 

         

ABN Amro adds dividend option for its interval plan

ABN Amro Mutual Fund has announced that investors of ABN Amro Interval Fund-Monthly Plan A may get an additional dividend option viz. calendar monthly dividend option with effect from forthcoming interval period. ABN Amro Interval Fund-Monthly Plan A seeks an investment objective to generate steady returns through investments made in a basket of fixed income securities, with a provision to offer liquidity at periodic interval.

 

         

ABN Amro MF declares dividend

ABN Amro Mutual Fund has announced 29 February 2008 as the record date for declaration of dividend under dividend option of ABN Amro Tax Advantage Plan-ELSS. The quantum of dividend is 20% i.e. Rs. 2.00 per unit on the face value of Rs. 10. The NAV for the scheme was Rs. 15.055 as on 22 February 2008. ABN Amro Tax Advantage Plan-ELSS is a open-ended scheme offering an investment objective to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity related securities along with income tax rebate, as may be prevalent from time to time.

 

         

Birla Sun Life MF declares dividend

Birla Sun Life Mutual Fund has declared the declaration of dividend on the face value of Rs 10 per unit for Birla Sun Life Quarterly Interval Fund-Series 2. The record date is set as 28 February 2008. The fund house has decided to distribute 100% of surplus available under option as on record date. The NAV for the scheme was Rs. 10.2077 as on 21 February 2008. Birla Sun Life Quarterly Interval Fund-Series 2 is an interval income fund that seeks to generate regular income through investments in debt and money market instruments.

 

 

ING MF declares dividend

ING India Mutual Fund has announced 29 February 2008 as the record date for declaration of dividend under dividend option of ING Domestic Opportunities Fund. The quantum of dividend is 30% i.e. Rs. 3.00 per unit on the face value of Rs. 10. The NAV for the scheme was Rs. 16.29 as on 21 February 2008. ING Domestic Opportunities Fund is a open-ended scheme offering an investment objective to provide long-term capital appreciation from a portfolio that is primarily invested in companies which derive a significant proportion of their revenues from the domestic Indian market place / economy.

 

Franklin Templeton MF declares dividend

Franklin Templeton Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit for Templeton Quarterly Interval Plan- Plan B. The record date is set as 29 February 2008. The fund house has decided to distribute 100% of surplus available under option as on record date. Templeton Quarterly Interval Plan- Plan B is an interval income fund that seeks to generate returns and reduce interest rate volatility, through a portfolio of fixed income securities.

 

 

JM Financial MF changes Fund Manager

JM Financial MF approved the following change in the fund manager in the following the schemes:

Mr Sandeep Neema will be the fund mangers for JM Agri and Infra Fund; and Mr Sanjay Chhabaria for JM balanced Fund.

 

 

ING MF launches ING FMF- Series XXXV

Name of Fund: ING FMP- Series XXXV

Scheme: ING Fixed Maturity Fund Series XXXV is a close-ended bond scheme offering an investment plan of 93 days maturity. The scheme shall mature on 30 May 2008.

Objective: The scheme will be investing in a portfolio of government securities or highly rated corporate bonds maturing close to the maturity of the scheme so as to generate returns comparable with alternative fixed-income instruments of similar maturity. The scheme will invest in debt securities with maturity coinciding closely with the maturity of the scheme, so as to minimise the impact of price fluctuation of such securities and the value at maturity.

Fund Opens: 25 February 2008

Fund closes: 27 February 2008

Face Value: Rs 10 per unit

Investment Options: The scheme provides two plans i.e. retail and institutional plan with a sub-option of growth, dividend and bonus.

Asset allocation: The scheme shall invest up to 100% in debt securities and money market instruments including call money and reverse repo. The debt securities may include securitised debt up to 100% of the net assets. The investments in derivatives instruments shall be to a maximum of 50% of the net assets of the scheme.

Entry load: The scheme does not charge an entry load as it is of close-ended nature.

To provide liquidity to investors, the fund proposes to provide repurchase facility in the scheme on 28 March 2008, 27 April 2008, and 29 May 2008. If repurchase request is submitted after 28 February 2008 and on or before 29 May 2008, the scheme may levy 1% as Contingent Deferred Sales Charge (CDSC).

Minimum Investment Amount: The minimum investment amount is Rs 5,000 and in multiple of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 1 crore in multiple of Re 1 thereafter.

Minimum subscription amount: Rs 1 lakh

Benchmark index: CRISIL Liquid Fund Index

Fund Manager: Mr. Prashant Singh

 

 

ING MF files an offer document with SEBI

Name of Fund: ING Fixed Maturity Fund- Series 43 to 46

Scheme: The scheme is a close-ended bond scheme.

Objective: The investment objective of the scheme is to generate returns comparable with alternative fixed-income instruments of similar maturity and to minimize the impact of price fluctuation of debt securities on the value at maturity.

Investment options: This close-ended bond scheme has two plans i.e. retail & institutional plans. Investors under the Scheme may choose between a growth option and dividend option.

Asset Allocation: The scheme will invest 100% of its portfolio in debt securities and money market instruments including call money and reverse repo. The debt securities may include securitised debt up to 100% of the net assets. The investments in derivatives instruments shall be to a maximum of 50% of the net assets of the scheme.

Face Value: Rs 10.

Entry Load: There will be no entry load charged for the scheme as the scheme is a close ended.

Exit Load: The scheme charges an exit load of 1% if units are redeemed on or before the 30th day from the date of allotment to 90th day i.e. on the date of maturity.

Minimum Investment Amount: The minimum investment amount under retail plan is Rs.5000 and in multiples of Re.1 thereafter. For institutional plan the minimum investment amount is Rs 1 crore and in multiple of Re 1 thereafter.

Benchmark index: CRISIL Liquid Fund Index

Fund Manager: Mr. Prashant Singh

 

 

Kotak MF declares dividend under quarterly interval plan

Kotak Mutual Fund has announced 3 March 2008 as the record date for declaration of dividend under dividend option of Kotak Quarterly Interval Plan Series 4.

The fund house has decided to distribute 100% of surplus available as on record date. The NAV for the scheme was Rs. 10.1474 as on 25 February 2008.

Kotak Quarterly Interval Plan Series 4 is an interval debt fund. The investment objective of the scheme is to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk.

 

 

Kotak MF revises minimum purchase amount

Kotak mutual fund has announced the change in the minimum purchase amount under regular plan of Kotak Mahindra Bond Unit scheme 99.

According to the announcement, the fund has raised its minimum purchase amount from Rs 1000 to Rs 5 lakh with effect from 3 March 2008.

Kotak Mahindra Bond Unit scheme 99 is an open-ended debt scheme. The investment objective of the scheme is to create a portfolio of debt instruments of different maturities so as to spread the risk across a wide maturity horizon and different kinds of issuers in the debt market.

 

 

Mirae Asset MF launches new Liquid Fund

Name of Fund: Mirae Asset Liquid Fund

Scheme: It is an open ended liquid scheme.

Objective: The primary investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The scheme does not guarantee any returns.

 

Fund Opens: 27 February 2008

Fund Closes: 3 March 2008

Face Value: Rs 1000 per unit.

Investment Options: The scheme will have super institutional, institutional and regular plans. The scheme offers growth, bonus and dividend option under each plan.

Dividend frequency: The scheme offers dividend with facility of dividend reinvestment on daily, weekly and monthly dividend. It also offers dividend transfer and monthly dividend payout option.

Entry Load:The scheme will not charge any entry load and exit load during the initial offer.

Asset Allocation: The scheme invest 0-100% in money market instruments. It may have investment of 0-100% in debt instruments with residual maturity and re-pricing tenor not exceeding 1 year. The scheme may have exposure up to 50% of the net assets in securitised debt. Debt instruments include securitized debt up to 50% of net assets. The scheme may invest in derivatives up to 50% of the net assets of the scheme. In addition, the scheme may also invest in foreign securities up to 25% of net assets of the scheme.

Minimum Investment Amount: The minimum investment amount under regular plan is Rs 5000 and in multiple of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 1 crore and in multiple of Re 1 thereafter. The minimum investment amount under super instituinal plan is Rs 10 crore and in multiple of Re 1 thereafter.

Benchmark Index: CRISIL Liquid Fund Index

Fund Manager: Mr. Murthy Nagarajan

 

 

Religare skips race for StanChart AMC

Religare Enterprises the financial services holding arm of the promoters of Ranbaxy has decided to drop out of the race for Standard Chartereds mutual fund business in India. It has decided instead to concentrate on building its presence organically with its Dutch joint venture partner Aegon.

The financial services company has also decided not to pursue GE Moneys consumer lending business, which is up for sale.

StanCharts asset management business was put up for sale last year and Swiss banking major UBS had finalised a deal worth $120 million to acquire the business. However, this deal came unstuck as UBS didnt get the mandatory approvals from Indian authorities.

Religare was among the list of firms which were formally in the race for StanCharts mutual fund business. But after evaluation, the management felt it could do a better job by investing the same money to grow the business on its own.

In July 2006, Religare formed a 50:50 JV with Hague-headquartered insurance and financial services major Aegon Religare Aegon Asset Management Company. This was in addition to its life insurance joint venture with Aegon. The asset management JV has already received an in-principle approval from the market regulator SEBI.

As per reports, the valuation of StanCharts mutual fund business has gone up significantly since UBS bid for it. Some estimates peg the revised value close to $200 million, about 66% more than the previous deal value. This is despite the bearish undertone in the equity markets.

StanCharts assets under management is more than $3 billion, a third of which or about $1 billion is in equities. The balance is through debt mutual fund schemes.

Religare already has a non-banking finance company, Religare Finvest, which is at present engaged in providing personal credit through loans against shares and other personal loans apart from distribution of mutual funds, wealth management, IPO financing and corporate finance services.

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International Markets - 27th Feb 2008

International Markets

• Bond insurer news lifts US Market
• IBM acts as the catalyst for US Market

 

Bond insurer news lifts US Market

In spite of opening modestly higher in the morning, US Market ended the day with sufficient gains as indices rallied in the final hour of trading today, Monday, 25 February, 2008. In the last hour of trading, a rally was spurred by news that Standard & Poor's has reaffirmed the credit ratings of two key bond insurers whose financial outlook has been at the center of investor anxiety in recent months. Each of the major economic sectors ended trading in positive territory, with materials posting the highest relative gain.

The Dow Jones industrial Average ended the day with a gain of 189 points at 12,570. The Nasdaq Composite Index, finished higher by 24 points at 2,327. S&P 500 finished higher by 18.7 points at 1,371.

Twenty-nine of thirty Dow stocks ended in the green today. Exxon Mobil and Home Depot were the main Dow winners today. Citigroup was the sole Dow laggard.

The day started off on a positive note despite no economic news. Existing home sales for January came in at an annualized rate of 4.89 million, which marks a decline of 0.4% month-over-month, but the lowest sales pace in ten years. Market expected 4.80 million sales, a decrease of 1.8% month-over-month. The median price of an existing home fell to $201,100, a 4.6% decrease from last year.

Then in the post lunch hours it was reported that Standard & Poor's took MBIA off CreditWatch and assigned a negative outlook. Additionally, the ratings agency affirmed the 'AAA' financial strength rating of Ambac Financial. Shares of MBIA and Ambac rose 20% and 16% respectively.

Crude prices rose today as fresh tensions again cropped up in the Middle East and cold weather continued to affect parts of US. But the rise in price was restricted due to the ongoing concerns about the health of the US economy.

Crude-oil futures for light sweet crude for April delivery today closed at $99.23/barrel (higher by $0.42/barrel or 0.4%) on the New York Mercantile Exchange. Earlier in the session, the April contract it a low of $97.75 and a high of $99.7 a barrel.

In the earnings section, home improvement retailer Lowe's issued earnings guidance that fell short of expectations. It did, however, report fourth quarter earnings that topped expectations.

Volume on the New York Stock Exchange topped 1.5 billion, and advancers outran declining stocks about 3 to 1. On the Nasdaq, 1 billion shares exchanged hands, and advancing stocks edged ahead of those declining nearly 2 to 1.

Tomorrow there are economic reports on the dock. A couple of earning reports are expected. The January Producer Price Index and January New Home Sales report will hit the wires. Other than that, Target and Home Depot will announce their earning reports.

 

 

IBM acts as the catalyst for US Market

US Market ignored the weak economic data today, Tuesday, 25 February, 2008 but focused more on IBM and bond insurers news and ultimately ended the day with good gains. News of buyback from IBM offsets the weak consumer sentiments today. All ten of the major economic sectors finished the day for the better. Energy made the best showing after crude prices hit a new intraday high.

The Dow Jones industrial Average ended the day with a gain of 115 points at 12,685. The Nasdaq Composite Index, finished higher by 17 points at 2,345. S&P 500 finished higher by 10 points at 1,381.

Twenty-three out of thirty Dow stocks ended in the green today, led by IBM.

IBM stock was up nearly 4% today after the tech giant raised its 2008 earnings forecast due to the positive impact of a $15 billion stock buyback plan.

Earlier in the day, market opened in a negative note. The slight selling pressure was fueled by a higher than expected inflation reading. January Producer Price Index (PPI) rose 1% month-over-month, compared to the expected rise of 0.4%. Excluding food and energy, PPI rose 0.4% month-over-month, higher than the consensus estimate that called for a rise of 0.2%.

Also, the Conference Board said that February consumer confidence fell to 75 from the prior reading of 87.3. Economists expected a reading of 82. Separately, the Richmond Fed manufacturing index, a regional manufacturing survey, fell to -5. Economists expected a reading of -12. A reading below 0 reflects contraction in manufacturing in that region.

But with the impact of IBM news, market reversed gear and traded in the green for the rest of the day.

Crude prices rose today as cold weather continued to grip parts of North East and Mid West USA. Dropping dollar against euro also pushed crude prices also higher prompting traders to invest in commodities against a hedge against inflation. Crude-oil futures for light sweet crude for April delivery today closed at $100.88/barrel (higher by $1.65/barrel or 1.7%) on the New York Mercantile Exchange. It was the highest close since trading began in 1983. Earlier in the session, the April contract touched a high of $101.06/barrel.

In the earnings section, Target pointed to a weakening economy as its fourth-quarter earnings fell. Home Depot also reported a 27.5% profit decline. Home Depot expects 2008 adjusted earnings per share to slide as much as 24% on a 5% sales drop.

Volume on the New York Stock Exchange topped 1.5 billion, and advancing stocks passed decliners more than 2 to 1. On the Nasdaq, more than 1 billion shares traded, with advancing issues outrunning those declining, 9 to 5.

Tomorrow there are economic reports on the dock. Durable Goods Orders for January are due tomorrow morning followed by the January New Home Sales reading. Federal Chairman Bernanke will speak to the Financial Services Committee for his semiannual monetary policy testimony also tomorrow morning.

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Market News 27th Feb 2008

Market News

• Megasoft fixes Book Closure for Dividend & AGM
• 3i Infotech - Allotment of equity shares under ESOS
• Videocon Appliances Board recommends dividend
• Trend Electronics Board recommends dividend
• Panacea Biotec - Limited Review for the quarter ended Dec 31, 2007
• Nicholas Piramal - NPIL Research & Development Ltd commences Phase I trials on new molocule for metabolic disorders in Eu
• Hindustan Unilever Ltd - Increase in paid-up Capital
• Prajay Engineers - Allotment of equity shares on conversion of FCCBs
• Era Infra - Updates
• ITD Cementation Board to consider dividend
• Power Grid to replace Bajaj Auto in Nifty
• Infosys Technologies partners with ACDI/VOCA
• UB Engineering allots equity shares
• Jindal Saw recommends dividend
• HCL Infosystems allots equity shares

 

Megasoft fixes Book Closure for Dividend & AGM

Megasoft Ltd has informed that the Register of Members & Share Transfer Books of the Company will remain closed from June 01, 2008 to June 12, 2008 (both days inclusive) for the purpose of payment of dividend & 8th Annual General Meeting (AGM) of the Company to be held on June 12, 2008.

 

         

3i Infotech - Allotment of equity shares under ESOS

3i Infotech Ltd has informed that the Company has allotted 35,200 equity shares on February 25, 2008, to the applicants under Employee Stock Option Scheme (ESOS), 2000

 

 

Videocon Appliances Board recommends dividend

Videocon Appliances Ltd has informed that the Board of Directors of the Company at its meeting held on February 25, 2008, inter alia, has recommended 5% dividend i.e. Re 0.50 (Paise Fifty Only) per share for the financial year ended September 30, 2007 for the consideration and declaration by the members at the ensuing Annual General Meeting.

 

 

Trend Electronics Board recommends dividend

Trend Electronics Ltd has informed that the Board of Directors of the Company at its meeting held on February 25, 2008, inter alia, has recommended 5% dividend i.e., Re. 0.50 (Paise Fifty Only) per share for the financial year ended September 30, 2007 for the consideration and declaration by the members at the ensuing Annual General Meeting.

 

Panacea Biotec - Limited Review for the quarter ended Dec 31, 2007

Panacea Biotec Ltd has informed that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations:

·         Redemption of outstanding amount of US $ 36,800,000 out of 'US$ 50 Million Zero Coupon Convertible Bonds due 2011' is due on February 14, 2011. Unless these Bonds have been previously converted, redeemed, repurchased and cancelled, Company will redeem these Bonds at a Price equal to 142.80% of the outstanding principal amount on the maturity date. Since the redemption of bonds is contingent upon its non-conversion into Equity Shares, the Company has not provided for the proportionate premium on redemption for the period upto March 31, 2007. The same was disclosed as a matter of emphasis in the Audited Annual Accounts as in the opinion of the management likelihood of redemption cannot presently be ascertained and the same was disclosed as a contingent liability. Similarly, proportionate premium on redemption of Rs 29,900,002 and Rs 87,851,543 for the three months and nine months ending December 31, 2007 respectively, has not been provided for.

·         Annual audited accounts contained a matter of emphasis regarding capitalization of expenditure on clinical trials amounting to Rs 91,557,518 since the ultimate approval of such products, which has been considered as highly likely by the management, was not within the direct control of the entity. Likewise expenses of similar nature amounting to Rs 72,956,795 and Rs 160,597,381 for three months and nine months ending December 31, 2007 respectively have been capitalized in the books on similar grounds.

·         In 2006, Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 02, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdues beyond the specified period irrespective of the terms agreed with the suppliers. The Company is in the process of compiling information regarding measurement of interest liability prescribed by the Act. In view of the above, the Auditors are unable to comment upon the impact, if any, thereof on these accompanying results. Audited Accounts of immediate previous year contains a qualification in respect of an compliance of "The Micro, Small and Medium Enterprises Development Act, 2006".

 

         

Nicholas Piramal - NPIL Research & Development Ltd commences Phase I trials on new molocule for metabolic disorders in Eu

Nicholas Piramal India Ltd has informed that NPIL Research and Development Ltd ("NRDL") (name now changed Piramal Life Sciences Ltd) has commenced Phase I studies of a new experimental drug molecule, P1201-07, in The Netherlands.

In this regard the Company has issued the following Press Release:

"NPIL Research & Development Ltd (NRDL), recently demerged from Nicholas Piramal India Ltd (NPIL) has commenced Phase I studies of a new experimental drug molecule, P1201-07, in The Netherlands.

The Company had submitted the Clinical Trial Application (CTA) for P1201-07 to the Central Committee on Research involving Human Subjects (CCMO), the regulatory authority of The Netherlands and the Independent Ethics Committee of the foundation Evaluation Of Ethics in Biomedical Research (BEBO), Assen, The Netherlands. Both these bodies have approved the Company's application to initiate the Phase I study of P1201-07.

P1201-07 is an in compound from Eli Lilly & Co. (USA) and is being developed for metabolic disorders.

"This is our fourth new drug to enter the clinic and the first from the research collaboration with pharma major Eli Lilly. The drug development timeline is on schedule. We in-licensed this molecule from Lilly only in January 2007, and it has gone to the clinic in just a year", said Dr. Swati Piramal, Director -Strategic Alliances & Communications, NPIL."

Further the Company has inform that, it may be recalled that the Company (i.e. Nicholas Piramal) has demerged its NCE Research Unit to NRDL pursuant to the Composite Scheme of Arrangement which has been sanctioned by the Hon'ble Bombay High Court. The Record Date for issue of shares by NRDL to the shareholders of the Company under the said scheme was February 22, 2008. The shares of NRDL would be listed on the BSE and NSE in accordance with the Scheme.

 

         

Hindustan Unilever Ltd - Increase in paid-up Capital

Hindustan Unilever Limited has informed regarding the details of the increase in the Paid-up Capital of the Company as under:- Authorised Capital - Rs. 2,25,00,00,000; Existing Paid-up Capital - 217,74,63,355 Equity share of Re. 1 each; Shares allotted/increased by - 2,66,198 Equity share of Re. 1 each; Revised Paid-up Capital - 217,77,29,553 Equity share of Re. 1 each. The existing Issued capital - 220,76,99,127 Equity share of Re. 1 each; Shares allotted/increased by - 2,66,198 Equity share of Re. 1 each; Revised Issued capital - 220,79,65,325 Equity share of Re. 1 each. The difference between issued capital and paid up capital is due to the Buy back made from open Market as per Special Resolution passed through Postal Ballot on September 14,2007. The total number of shares bought back under the Scheme were 3,02,35,772. The new shares rank pari passu in all respects with the existing capital. Further, the Committee of the Board, at its meeting held on February 22, 2008, has allotted 2,66,198 Equity Shares of Re. 1/- each under ESOP. Therefore, the paid-up capital of the Company has increased to 217,77,29,553 shares & the Issued capital has increased to 220,79,65,325 shares.

 

         

Prajay Engineers - Allotment of equity shares on conversion of FCCBs

Prajay Engineers Syndicate Ltd has informed that the Company at its Allotment Committee Meeting held on February 25, 2008 allotted 76,02,315 equity shares to the following entities on conversion of 3405 Foreign Currency Convertible Bonds.

• Name of the Shareholder: Goldman Sachs International No of Shares Allotted: 223269
• Name of the Shareholder: Deutsche Bank AG London No of Shares Allotted: 223269
• Name of the Shareholder: CLSA (Mauritius) Ltd No of Shares Allotted: 1361942
• Name of the Shareholder: Lehman Brothers Intl Europe No of Shares Allotted: 457701
• Name of the Shareholder: RBC Dexia Investor Services Trust No of Shares Allotted: 5336134.

 

Era Infra - Updates

Era Infra Engineering Ltd has informed that Company's Construction & Contract division, in joint venture with KMB, Ukraine has been awarded the work of "Expansion and Modification to Terminal Building for International Operation at C E Pune" by "Air Ports Authority of India" on February 25, 2008 valuing "Rs 77,91,57,986". The contract duration is 7.5 months.

 

 

ITD Cementation Board to consider dividend

ITD Cementation India Ltd has informed that a meeting of the Board of Directors of the Company will be held on March 07, 2008, to consider the Annual Accounts and recommend dividend, if any for the year ended December 31, 2007.

 

 

Power Grid to replace Bajaj Auto in Nifty

The National Stock Exchange (NSE) has included Power Grid Corporation of India in place of Bajaj Auto its 50-share S&P CNX Nifty index. The change will take effect from 14 March 2008, the day when a demerger scheme of Bajaj Auto takes effect.

 

 

Infosys Technologies partners with ACDI/VOCA

Infosys Technologies partnered with ACDI/VOCA, a non-profit international development organization that promotes broad-based economic growth, to develop an information and communication technology (ICT)-enabled application that would improve efficiencies in the agro supply chain in India. The solution successfully minimizes inventory requirements, reduces waste and allows retailers and farmers to be better integrated.

This application falls under ACDI/VOCA's growth-oriented Microenterprise Development Program (GMED), which is a $6.3 million, USAID-funded Initiative. GMED is an innovative program that develops sustainable and scalable approaches to job creation by fostering the growth of micro and small enterprises.

The application tackles supply chain management from profiling of farmer clusters to crop planning, scheduling, tracking and forecasting. The application allows farmers to access technical information including database searches for data and images, access to region- specific weather updates and market information, i.e., daily sales volumes and average prices. The application can handle several thousand concurrent users and yet ensures that data is secure through data-encryption mechanisms. There are 1,700 small holder farmers currently integrated into organized retail supply chains through this application, thereby bridging the urban-rural agricultural divide. Over the next five to eight years, the usage is expected to increase to a million farmers.

Infosys has built the solution consisting of wireless software applications that are accessible on handheld devices, enabling agents to address Information gaps constraining vegetable and fruit farmers and enabling other supply chain participants to monitor and control the back-end and front-end supply chain functions. The application also enables wholesaler/retailer or other intermediaries to optimize cost by allowing large procurement, efficient transportation management and enabling intelligent crop production management.

The solution is built on Infosys TruSync, a context-aware, client-server solution that is designed for situations with limited or no network availability and allows for peer-to-peer (p2p) synchronization between field agents without connecting to a central server.

The company made this announcement during the trading hours today, 26 February 2008.

 

 

UB Engineering allots equity shares

The committee of UB Engineering has allotted 47,40,819 equity shares of Rs 10 each for cash at a price of Rs 126 per equity share aggregating to Rs 59,73,43,194 to the shareholders as on the record date on rights basis.

Consequent upon the allotment of equity shares to the aforesaid shareholders on rights basis, the total issued and paid up capital of the company stands increased to Rs 17,06,69,490 divided into 1,70,66,949 equity shares of Rs 10 each.

These shares were allotted at the committee meeting held on 26 February 2008.

 

 

Jindal Saw recommends dividend

The board of Jindal Saw has recommended dividend at the rate of Rs 6.25 per share for the 15 months period ended 31 December 2007.

This was recommended at the board meeting held on 26 February 2008.

 

 

HCL Infosystems allots equity shares

The committee of HCL Infosystems has allotted 26660 equity shares of Rs 2 each to the employees on exercise of their stock options under HCL Infosytems ESOS 2000.

These shares were allotted by the committee of directors on 25 February 2008.

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Economy News 27th Feb 2008

Economy News

• Budget 2008 likely to be pro common man
• Vasundhara imposes tax on corporate-run retail stores
• Rail Budget likely to be on aam admi track
• Haryana to enhance power supply in rural areas
• Lalu plays Santa to students, women, AIDS patients

 

Budget 2008 likely to be pro common man

Personal and corporate income tax cuts, excise duty relief and simplification of taxes are expected in the Union Budget for 2008-09, the last full-fledged budget before the next general elections. Finance Minister P Chidambaram, who will be presenting his seventh budget on Friday in Parliament, has a tough exercise on hand of balancing conflicting interests in coming out with a budget for the 'aam aadmi' (common man). Social sector projects.He is expected to announce massive funds for social sector projects like National Rural Employment Guarantee (NREG), Sarva Shiksha Abhiyan, rural health and power sectors and a debt-relief package for farmers to share the benefits of high growth especially in view of the coming Lok Sabha elections by this year end or early next year.The Indian middle-class and the industry, which still remember his dream budget of 1997-98, are expecting a bonanza from the Finance Minister in terms of relief in income tax and excise duties and simplification of other taxes.

Government servants are expecting an announcement on implementation of the Sixth Pay Commission.Sources say that the Finance Minister is unlikely to introduce any new tax in the budget for 2008-09 although some controversial taxes like the banking cash transaction tax may be reviewed, adding that with buoyancy in revenue collections he is capable of working out packages for every constituency.Apart from meeting the fiscal and revenue deficit targets, the budget is likely to aim at sustaining 9 per cent GDP growth, while containing politically sensitive inflation rate around four per cent.

 

 

Vasundhara imposes tax on corporate-run retail stores

Jaipur: The BJP Government in Rajasthan on Monday presented its fifth and final Budget that had plenty of "small trader"-friendly proposals, including a four per cent tax on fruits and vegetables sold by corporate-run food stores.

Tabling the Budget, with a Plan expenditure size of Rs.15,248 crore for 2008-09, Chief Minister Vasundhara Raje told the Assembly that implements like coal-fired press, wire brush and small construction tools sold by street vendors would be exempt from taxes.

She also proposed to raise the minimum wages for unskilled labourers to Rs.100 a day from Rs.73, semi-skilled to Rs.107 from Rs.77, and skilled to Rs.115 from Rs.81.

But by far the most populist of her proposals was the four per cent tax on vegetables and fruits sold by company-run food retail stores (such as those operated by Reliance and Spencer's). The levy is aimed at protecting small vendors who have been protesting against the entry of industrial houses in the food-products retailing space.

The Budget also proposed several sops for the people, mainly farmers, Scheduled Castes and Scheduled Tribes, women and students, besides the small and medium traders. Ms. Raje also proposed a customised incentive package on a first-come-first-served basis to three corporate houses that invest Rs.500 crore in districts that are relatively untouched by industrial activity. In her speech that lasted two hours and fifteen minutes, the Chief Minister said that through better management the fiscal deficit was expected to be brought down to Rs.5,266 crore in 2008-09 from Rs.5,420 crore last year.

 

 

Rail Budget likely to be on aam admi track

New Delhi: One year before the general elections, the government is worried about rising prices but the Railways might cut freight rates to offset the oil price shock. This could please the industry. Freight charges on coal, fertilisers, food grains, iron ore and petroleum products may be lowered by 3-5 per cent. The total plan outlay is estimated at Rs 36,000 crore as Railways profits this year could be as high as Rs 23,000 crore.

The Railway Minister is also likely to announce 26 railway line projects. A higher capex expenditure on freight corridor, locomotives, technology might also be in the pipeline. There has been a long-awaited demand to improve rail transportation in Mumbai which means that there could be more funds for the Mumbai Urban Transport Project.

Government may try to look at the future of Indian Railways as well. The budget could also see an announcement on feasibility study for high-speed train corridors and may encourage use of higher axle load wagons.Above all, airline companies in this budget will be listening to Lalu's budget speech very carefully. Expectedly, more Garib Raths might be introduced and fares for AC-3 tier segment could also see a cut by 2-3 per cent.

 

 

Haryana to enhance power supply in rural areas

Chandigarh: Uttar Haryana Bijli Vitran Nigam on Tuesday said that two-phase power supply would be ensured in rural areas for domestic consumers from 5 a.m. to 7 a.m. and 6-30 p.m. to 10-30 p.m. daily in view of the ensuing examinations of students.

These consumers would also get power when three-phase power is supplied for tube-wells for agriculture and public health water works for drinking water purpose, said an official release. The Nigam would supply electricity in two groups to the tube-well consumers. The farmers would get electricity for six hours in the night group and for five hours during the day group with additional one hour supply for drinking water. The timings of rural groups will change alternatively, it said.

A spokesman for the Nigam said on Tuesday that in view of the present demand and availability of electricity the supply would be regulated for more than seven hours on urban and mixed urban feeders supplying power mainly to the domestic category consumers during different time slots daily. The duration of restrictions would vary from 60 to 90 minutes in one slot in district Ambala, Yamuna Nagar, Kurukshetra, Rohtak, Jhajjar, Sonepat, Kaithal, Karnal, Panipat and Jind.

 

 

Lalu plays Santa to students, women, AIDS patients

New Delhi: Railway Minister Lalu Prasad doled out concessions to students, women and AIDS patients. Railways have decided to extend free monthly season tickets for second class travel between school and home for girl students up to graduation and boys up to Class XII, Prasad announced in the Rail Budget.

Earlier, this facility was available to girl students up to Class XII and boy students up to Class X. Prasad also announced a concession of 50 per cent in second class passenger fares for rail travel by AIDS patients to nominated ART centres for treatment.

Railways also increased the concession provided to woman senior citizens in passenger fares of all classes from 30 per cent to 50 per cent. Prasad also announced the extension of the scheme for travel concessions for decorated soldiers in Rajdhani and Shatabdi trains. Paramvir Chakra, Mahavir Chakra and Vir Chakra awardees are entitled for travelling in AC-II tier along with one companion which is valid in Rajdhani and Shatabdi trains.

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