Archive for the ‘Automobiles’ Category

INDIAN ECONOMY – GAINING STRENGTH Part 1

Stock market reflects & discounts the overall conditions in the economy.Besides, stock prices in the market are also governed by the investor behavior & valuations. Sometimes investor’s optimism takes the market valuation to a level that it does not matches up with the actual future growth, thus becoming the basis for correction & vice- versa. It is said that “ markets may remain irrational till the life of human being”. Now let us have a look at the economy to see what lies in the future & how it is shaping up for the next leg of growth.

.

.

Indian economy is expected to grow by 7.2% in the fiscal ended on 31st march 2010 & is projected to expand by 8.55 in the current fiscal year and 9% in the next year. The continued improvement in the sentiments of the manufacturing sector which currently contributes around 15% in GDP is likely to play a major role in taking GDP growth to double digits.

.

.

Strong industrial recovery has been the key underlying strength behind the recovery of GDP. During April- December 2009, the index of industrial production (IIP) increased by 8.6% over the corresponding period. Factors that will drive the growth in the industrial production are:

.

  • Improvement in agriculture output- Tokyo-based Research institute for global change has predicted normal monsoon rains in india for the current year. On the belief of climatic conditions will remain normal during the year we expect the improved availability of agricultural output to push up production of manufactured food products..

.

  • Rising consumer demand – as the business conditions are improving & corporate are giving wage hikes, we believe this will strengthen the sense of financial security in the minds of urban middle-class. A rise in purchasing power and availability of easy and affordable loans are expected to increase the demand for durable goods like auto, consumer appliances.

.

  • More availability of mining products- we expect natural gas & crude oil output would increase as the result of the efforts that are being done by companies like Reliance & Cairn India. Coal Production will also rise owing to the allocation of new coal blocks by the government. Fertilizer & Electricity sector would be the key & direct beneficiary with the improvement in the gas & coal availability.

    .

    Stay tuned for more on this 🙂

    Advertisements

    NEWS ROUND UP 29th March – 02nd April

    Economy

    🙂

    ·India’s annual food price index stood at 16.22% as on week ended March 13, slower than the 16.30% growth recorded last week. A year ago, food prices were up 7.46%. At the same time, primary articles inflation rose to 13.88% from 4.91% last year, while fuel, power, light & lubricants prices climbed to 12.68%.

    .

    Power

    🙂

    ·NTPC, the state owned power generator, has evinced interest to set up solar and wind projects in Orissa with aggregate generation capacity of 500 Mw.

    .

    The company has sent a draft MoU for approval of the Orissa government in this regard.

    .

    ·GMR Energy will soon raise over Rs 1,600 crore from a group of private equity players led by Singapore-based Temasek Holdings and banks to fund its expansion. The company is a subsidiary of the G M Rao-led GMR Infrastructure that has interests in highways, airports, agri-business and urban infrastructure.

    .

    Oil & Gas

    🙂

    .

    ·ONGC has approved investing Rs 3,240 crore ($712 million) for the first phase development of three marginal fields located in Mumbai offshore on the western coast.

    .

    Capital Goods

    🙂

    ·L&T has been awarded a contract by the Ministry of Defense for the design and construction of 36 high speed interceptor boats for the Indian Coast Guard. The contract is valued at Rs 977 crore. The design is being carried out in house by the Company and its ship design center, that is a part of the Company’s Heavy Engineering division. The boats are planned to be constructed at the Company’s existing shipyard at Hazira and at its new shipyard coming up at Katupalli near Ennore.

    .

    ·L&T bagged six orders worth Rs 1,181 crore for construction of power transmission line and sub-station works. Three of these six orders worth Rs 741 crore have been secured from the Gulf markets and the other orders worth Rs 440 crore are for domestic projects. These orders will be executed by electrical and gulf projects operating company, a part of L&T’s construction division.

    .

    Automobile

    🙂

    .

    ·Tata Motors, India’s largest vehicle manufacturer by revenue, is selling a third of its stake in the construction equipment-making subsidiary, Telcon, to its joint venture partner, Hitachi, for Rs 1,000 crore.

    .

    ·Tata Motors had signed an agreement with the Myanmarese government for setting up a heavy truck plant in the South-East Asian nation, with an installed capacity of up to 5,000 units annually.

    .

    ·TVS Motor Company has announced the launch of its new model TVS Jive, India’s first auto-clutch motorcycle, in Chandigarh. With this launch, the company expects that it sales in Punjab will grow significantly from 2,000 motorcycles to 3,600 motorcycles per month.

    .

    Realty/ Construction

    🙂

    .

    ·Patel Engineering has been awarded the contract to develop the largest waterfront project in the southern hemisphere. The project, an integrated township in Port Louis, the capital of Mauritius, is valued at $1 billion.

    Spread over more than 24 hectares, the project involves residential, commercial, entertainment and real estate.

    .

    ·Punj Lloyd plans to sell its 19.4 per cent stake in Pipavav Shipyard to co-promoter Skil Infrastructure through an inter se promoter transfer. The stake is valued at Rs 825 crore at the company’s current market
    capitalisation of Rs 4,251 crore. The Nikhil Gandhi-promoted Skil Infrastructure has an 18.27 per cent stake in Pipavav Shipyard.

    .

    Telecommunication

    🙂

    .

    ·Kuwait-based Zain Telecom’s board cleared Bharti Airtel’s proposal to buy its African assets for $10.7 billion (around Rs 48,600 crore), marking the Indian company’s first successful attempt to acquire operations in Africa after two failures.

    .

    Cement

    🙂

    .

    ·Shree Cement has got the Central Electricity Regulatory Commission’s (CERC) approval to start inter-state trading business in power it produces at its merchant plant. The company has 260 MW installed captive power generation capacity and is in the process of putting up additional 300 MW merchant capacity, which is set to go on stream in a few days.

    NEWS ROUND UP 22nd – 26th March

    Hello Friends here we come up with the News Round Up from various categories.

    Economy

    🙂


    ·The Reserve Bank of India (RBI) unexpectedly raised interest rates from record-low levels for the first time since it began cutting in 2008, citing intensifying inflationary pressures and a steady economic recovery. The central bank raised the repo rate, the rate at which it lends to banks to 5.00 percent from 4.75 percent and reverse repo rate, the rate which it absorbs funds from the system to 3.50 percent from 3.25 percent with immediate effect.

    .

    ·India’s Wholesale price inflation accelerated to 9.89 percent in February from a year ago, above the Reserve Bank of India’s end March projection of 8.5 percent and higher than the 8.56 percent level recorded in January this year.

    .

    ·India’s food price index rose 16.30 percent in the 12 months to March 6, while the fuel index was up 12.68 percent. The rise in the food price index was lower than an annual rise of 17.81 percent in the previous week.

    .

    Pharmaceutical

    .


    ·Elder Pharmaceuticals had increased its stake in Bulgarian subsidiary Elder Biomeda AD to 61 per cent from the present 51 per cent, as part of its strategy to strengthen its presence in the European market. The Rs 600- crore turnover Elder Pharma did not disclose the deal size. In April 2008, Elder had formed Biomeda AD in Bulgaria, to acquire three Bulgarian healthcare companies belonging to the local Biomeda group.

    .

    Metal

    .


    ·Welspun Gujarat Stahl Rohren unit will acquire a 75 per cent stake in MSK Projects, marking its foray into infrastructure. Welspun will invest a total of Rs 400 crore, of which Rs 200 crore will be infused directly into MSK.

    .

    Realty/ Construction.

    .


    ·Punj Lloyd has bagged a project worth $40 million (nearly Rs 181 crore) from Abu Dhabi Gas Industries (GASCO) for infrastructure related works.

    .

    The company has secured a letter of award for engineering, procurement and construction works in UAE from GASCO.

    .

    ·Subhash Projects & Marketing has bagged two orders worth Rs 475.34 crore for infrastructure related works. The company, along with Kirloskar Brothers Ltd, has bagged a contract worth Rs 439.35 crore from Bangalore Water supply Sewerage Board for civil and electromechanical works.

    .

    ·· Hindustan Construction Company (HCC) acquired a controlling stake in Swiss real estate firm Karl Steiner AG in an all-cash deal for around Rs 150 crore (Swiss Francs 35 million), a move that will pave way for the company to enter the European and Gulf markets.

    .

    ·PT Madhucon Indonesia, a subsidiary of the Hyderabad-based infrastructure company Madhucon Projects Ltd, has been granted a new coal mining business permit for exploration of 30,970 hectares at Mauraduwa in south Sumatra, Indonesia.

    .

    Oil & Gas

    .


    ·GAIL India plans to transit 21 per cent more natural gas through its pipelines at 114.8 million cubic meters per day in 2010-11 fiscal. The company in a press statement that it has set a target of transmitting 114.8 mmscmd of natural gas from domestic fields and imported LNG in 2010-11 fiscal as opposed to moving 94.8 mmscmd during current fiscal.

    .

    Capital Goods

    .


    ·McNally Bharat Engineering Company has bagged an order worth Rs 173.2 crore for works at Mahanadi Coalfields in Sambalpur, Orissa. This is the third order that the company has bagged within a week, the first two being from NPCC and SAIL.

    .

    ·Larsen & Toubro (L&T) has bagged a project worth Rs 2,035 crore from ONGC Mangalore Petrochemicals Ltd to set up an aromatics complex at Mangalore special economic zone.

    .

    Automobile.

    .

    ·Mahindra & Mahindra has joined the long list of corporate houses looking to obtain a banking licence after the finance minister’s budget speech revealed that banking regulator RBI was planning to allow more players in the sector. A top executive of the $6.3-billion group that it was planning to seek a banking licence for its non-banking finance company Mahindra & Mahindra Financial Services (MMFSL).

    NEWS ROUND UP

    Economy

    .


    ·IIP for the month of January grew 16.7% on year. The mining sector grew 14.6% in the month while the manufacturing sector grew 17.9%. The electricity sector witnessed a growth of 5.6% in the month.

    .

    India’s annual food price index increased 17.81% as on week ended February 27, slower than the 17.87% growth recorded last week. A year ago, food prices were up 7.54%.

    .

    Healthcare

    .

    ·Fortis Healthcare announced the largest overseas acquisition by an Indian company in the healthcare space, buying the entire 23.9 per cent stake held by TPG Capital in Singapore’s Parkway Holding Ltd for $686 million (Rs 3,119 crore).

    .

    Capital Goods

    .

    ·ABB Ltd. has bagged orders worth $22 million (nearly Rs 100 crore) from Haryana Vidyut Prasaran Nigam for the supply of four sub-stations. The company would deliver four sub-stations equipped with automation, protection and control systems to HVPNL.

    .

    ·Areva T&D India has bagged a contract worth Rs 400 crore from Uttar Pradesh(UP) Power Transmission Corporation for building a substation. The company’s transmission and distribution division will build a 765 KV extra high voltage substation at Anpara thermal plant in UP.

    .

    ·Thermax announced a JV with US-based Babcock & Wilcox Power Generation Group to manufacture super-critical boilers in the country. The total investment in the JV is estimated at Rs 700 crore.

    .

    ·McNally Bharat Engineering Company has bagged an order worth Rs 245.42 crore from Steel Authority of India Ltd for infrastructure related works at Rourkela steel plant. The contract is for inter-plant transportation facilities at Rourkela steel plant.

    .

    Mining & Minerals

    .

    ·State-owned miner NMDC is planning to invest around Rs 2,400 crore to lay a pipeline between its Chhattisgarh plant and Visakhapatnam in Andhra Pradesh.

    .

    Realty & Construction

    .

    ·Gammon India has bagged an order worth Rs Rs 631.81 crore from Delhi Tourism and Transportation Development Corporation for construction of bridge. The company has received the project for construction of bridge and its approaches over river Yamuna, Delhi.

    .

    ·Hindustan Construction Company (HCC) has plans to invest around Rs 50,000 crore in its township project in Lavasa, near here, over the next 10-12 years ·Hindustan Construction Company (HCC) along with its joint venture partner has bagged a contract worth Rs 197 crore from North Frontier Railway for
    development of a tunnel in Imphal.The company has bagged the project along with its JV partner Coastal Projects Ltd for developing a railway tunnel between Jiribam and Tupur in Imphal.

    .

    ·Nagarjuna Construction Company secured new contracts aggregating to Rs 1,221 crore. The first order is of two contracts valued at Rs 647 crore from Hyderabad Growth Corridor. In addition, it has secured three contracts worth Rs 358 crore from Maharashtra State Electricity Distribution.

    ·Construction firm Ahluwalia Contracts India is in acquisition talks for specialised construction firms, with a war-chest of up to Rs 100 crore, and hopes to sew up the deal by June. The New Delhi-based firm sees a 25-30 per cent organic growth for next five years and acquisitions of up to Rs 100 crore could be funded from its internal resources.

    .


    Banking & Finance

    .

    ·Rural Electrification Corporation Ltd (REC) signed a memorandum of understanding (MoU) with NTPC Tamil Nadu Energy Company Ltd (NTECL), a joint venture company set up by NTPC and the Tamil Nadu Electricity Board (TNEB), to fund a power project in North Chennai. Of the total project cost, 30 per cent is being met by equity and balance through debt.

    .

    Distilleries

    .

    ·The country’s largest liquor maker United Spirits is undertaking an aggressive promotion campaign for its recently launched energy drink ‘Romanov Red’.

    .

    The company will invest over Rs 5 crore in the next one year on promotions, as it aims to garner a 15 per cent share in the domestic energy drink market that stands at around 1.5 million cases (of 24 cans) per annum.

    .

    Stay Tuned for More updates 🙂

    WEEKLY Update 8th – 12th March

    Here we bring you the weekly overview of the Indian as well as of the Global economy and latest global business and industry updates.

    .

    Markets continued to build on the gains that came in the post budget week. Investors seem to have overcome the worry factors like domestic fiscal deficit & concerns over Euro Zone.

    .


    Even the sudden burst of buying by the foreign institutional investors reflects the confidence  in the domestic economy. Food price index rose 17.87% in the 12 months to 20 February 2010, faster than the annual rise of 17.58% in the previous week but is expected to come down on the likelihood of good harvest going ahead.

    .

    On the external economy front, India’s imports posted a strong growth for the second month running in January, signaling a pickup in domestic demand and investment. Non-oil imports registered a growth of 28.8% in January, while oil imports were up 56% from the year ago period.

    🙂

    Exports jumped for a third  straight month in January, rising 11.5 per cent from a year earlier as demand  picked up in the United States and other major overseas markets.

    .

    The data cheered the markets & eased some concerns over the optimistic economic growth outlook that came after the third quarter GDP numbers showing growth of 6%. In the nine months to December Indian economy has expanded by 6.7% & in order to meet the CSO expected growth of 7.2% in the current fiscal, it should grow by 8.8% in the last quarter ending March 2010.

    .

    Going forward markets are expected to trade in line with the global markets & will keep a close eye on the IIP numbers that are scheduled to be announced in the coming week. However markets may face liquidity pressure with approximately 22,000 crore going out from the banking system last week & another 12,000 crore expected to go out by the week ending 13th march as a result of hike in Cash reserve ratio by 75 bps by RBI.

    .


    Another liquidity squeeze would be from the corporate in the system as the last tranche of Advance tax is approaching i.e. 15th March. Above all the expected rush of new & follow on public offering in the near term is expected to put a continuous pressure on the liquidity front.

    .

    The week gone by saw one of the strongest rallies in stock markets across the world which goes to show that bulls are still strong and a lot of money lying in the sidelines enters the market at every fall. Trend of Nifty and Sensex is bullish and Nifty has support between 5030-4950 and Sensex between 16700- 16400 levels. The dollar index is finding a strong resistance between 80-81 levels and if it does not cross this strongly then the rally is expected to continue.

    .

    Commodities rose on benefits of doubt as dollar index is witnessing see saw movements amid some improvement in economic releases. However, there is still some uneasiness, regarding the health of European countries, including Spain. In metals and energy, things look balanced right now. These commodities are expected to trade in a range.

    Story of agro commodities is little different.

    .


    Despite fragile outlook, most of commodities prices soared on support at lower level buying and domestic as well as overseas demand.

    .

    Cautious trading is advisable here, especially in spices as they have already witnessed significant upside in last few trading sessions.

    .

    Stay Tuned for More updates

    .

    Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

    WEEKLY COMMENTARY 1st – 05th March

    Series of economic data amid Indian Union Budget resulted in erratic price movements in commodities throughout the week. Market participants indulged actively themselves in the market. Bullions cut some of their losses in the later part of the week on short covering.

    Expiry of February contract of base metals also made them very volatile. Most of them surrendered their previous gain on poor outcome of economic data.

    .

    .

    Strong dollar together with the most recent signs that the U.S. economy is still struggling to recover, led bearishness in all base metals. On the date of expiry, lead closed down and the gap between lead and zinc  narrowed down to 90 paisa. Similar to base metals, even energy complex drifted lower on negative economic releases in the middle of strong dollar.

    .

    .

    A stronger dollar makes oil and other commodities less affordable for holders of other currencies. On MCX, it touched the 3722 and moved down towards the level of 3600 on profit booking. Rising number of rigs coupled with rising mercury in Midwest cooled down natural gas prices further. On Friday, commodities recovered marginally on improved US GDP.

    .

    Bears were seen active in agro-commodities last week as most of the future contracts on NCDEX settled in red zone on weekly basis. Guar pack settled in red territory as weak domestic and export demand hammered maize prices on future bourses.

    .

    In oil seeds section, soyabean also ended the week with negative impression as the Indian market moved in line with weak overseas market. Continuation of subdued demand for soy meal from South East Asian countries and ample stocks of edible oil kept prices under check during the week.

    .

    .

    Mustard seed futures traded range bound. Lack of demand and improvement in weather condition had a bearish impact on market in the week gone by.

    .

    .

    In spices pack except turmeric futures all other futures settled in red zone. Pepper and jeera futures maintained their downtrend during the week taking cues from the higher fresh arrivals to the physical market. However turmeric futures ended the week on positive note supported by good export demand. Maize also traded in negative zone due to fresh crop arrivals and higher output estimates. According to latest government estimates the total output of current rabi season will be at 5.64 million tonnes over 5.61 million tonnes last year.

    Weekly Update of The Market (08th-12th February)

    Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and  latest global business and industry updates.

    .

    Weekly Update of The Market (08th-12th February)

    .

    After starting the year on a good note & Indices making fresh highs within few weeks many Asian markets have corrected between 7 to 10%.

    .

    The global sell off over sovereign debt problems in Europe and an unexpected rise in jobless claims in US put investors on the defensive mode.

    .

    The anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the Euro & has led strength to US dollar.

    .

    Foreign investors sell off is an outcome of dollar-carry-trade unwinding as when they borrowed the dollar was cheap & now it is recovering.

    .

    Investors viewed the markets in year 2010 with confidence in view of recovery gaining momentum is now shaken over the debt problems, nascent economic recovery & confidence of the governments that stand behind the euro.

    .

    Efforts of China to curb lending preventing overheating in economy also pose a risk to derail the global recovery.

    .

    Back at home, the effect of turmoil in the international market also made government to think its strategy on ambitious disinvestment programme.

    .

    🙂

    .

    Lukewarm response to the NTPC, the much awaited issue managed to get subscription of just 1.2 times on its closing day.

    .

    The maximum bid of 20.87 crore shares was put by Indian institution under the first time adopted French Auction route.

    .

    This has challenged the finance Ministry hopes on the proceeds from disinvestments to make up the sliding revenue & rising expenditure.

    .

    While it looks that PSU disinvestment may not yield desired results on market weakness, the 3G auction i.e. expected to garner Rs. 35,000 crore could be postponed to next fiscal year.

    .

    🙂

    .

    The fate of some of the IPO’s like NMDC, Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation that are on the disinvestment agenda before March 31, looks tough to sail through, if the stock markets do not rise and big investors do not come back.

    .

    On the contrary, Banks like Bank of Baroda & Indian Bank that were expected to raise money overseas have put now their plans on hold.

    .

    🙂

    .

    The good news from the external sector continued as the data showed a 9.3% annual increase in exports in December to $14.6 billion, a second consecutive month rise.

    .

    While imports increased by 27.2% from a year earlier to $24.75 billion.

    .

    Food inflation remained at high levels & rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week on the back of rising pulses & potato prices.

    .

    Markets are likely to take a closer view of the advance estimates on economic growth for the current fiscal ending March 2010 scheduled to be released on Monday.

    .

    🙂

    .

    In the days to come an activity in the sectors like railways, fertiliser, textiles, pharma, education, power and infrastructure may be seen on expected positive policy announcements and budgetary sops.

    .

    It was clearly mentioned last week that world markets are going in downtrend and one should be careful in such a scenario and that one should be moving in cash.

    .

    Now the markets have taken a very sharp fall last week due to rise in Dollar Index and fall in all asset classes.

    .

    🙂

    .

    The coming week might see some counter rally from lower levels.

    Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

    .

    🙂

    .

    If we talk about commodity markets then one can see that strengthening dollar and lack of firm global cues had pressurized commodities prices to move southward.

    .

    Investors are selling riskier assets and putting their money in dollar as a safe haven buying.

    .

    Debt concerns facing Greece, Portugal and Spain coupled with dollar index which is trading above the mark of 80 is most likely to compel commodities to trade lower.

    .

    French and euro zone GDP, USD advance retail sales, USD U. of Michigan Confidence will give further direction to commodities.

    .

    Investors should keep an eye on gold – silver ratio.

    It was 58:1 few months back, now reached to 67:1 on MCX, heading towards the level of 70:1.

    It is demonstrating more selling in silver.

    .

    🙂

    .

    Stay Tuned for More on weekly updates.

    .

    Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here