| Daily News as on 3rd Aug, 2011 |
| INTERNATIONAL MARKET |
| US markets fall to lowest level since June : |
| The S&P 500 Index turned negative for year and closed below 200-day moving average. Moody’s and Fitch affirmed US ratings while warning that the ratings could be downgraded if lawmakers fail to enact debt reduction measures and the economy weakens. The Dow Jones Industrial Average ended down 266 points at 11,867. NASDAQ Composite was down 75 points at 2,669 and S&P 500 Index fell 33 points at 1,254. US Declining Sectors: Tech fell 2.3%, Energy was down 2.7%, Financials slipped 2.8%, Materials declined 2.9%, Industrials lost 3.4% and Consumer Discretionary slipped 3.7%. |
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| Europe shares hit 11-month low as banks and miners stocks tumbled. France's CAC was down 1.82%, Germany's DAX down 2.26% and Britain's FTSE down 1%. Other peripheral European markets; Market Vector Egypt was down 4%, Athex Comp down 3.2%, Italy down 2.5% and Spain down 2.2%. Asian stocks opened down; Kospi was down 2.6%, Nikkei down 1.8%, Straits Times down 1.5% and Taiwan down 1.5%. SGX Nifty was down 1.3%. The S&P 500 Index turned negative for year and closed below 200-day moving average. |
| DOMESTIC MARKET |
| Nifty trades lower; realty, capital goods slip |
| The Sensex continued to toil, down over 150 points in late morning trade while the NSE Nifty was hovering around 5400 mark. All sectoral indices were in negative terrain. Heavy sell off seen in realty, capital goods, banks, auto and IT stocks. Indian equity market was mirroring global indices. Out of BSE Sensex 30, only ONGC, ITC and Hero Honda were trading positive. At 11 hrs IST, the Sensex was down 156.18 points or 0.86% at 17953.71, and the Nifty was down 50.85 points or 0.93% at 5405.70. On the global front, Asian markets were trading weak, Nikkei 225, Hang Seng were down over 1%, US market closed lower, Dow & Nasdaq were down 2% each. |
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| At 11 hrs IST, the Sensex was down 156.18 points or 0.86% at 17953.71, and the Nifty was down 50.85 points or 0.93% at 5405.70. Adrian Mowat, JPMorgan says, “We have downgraded India to Neutral on the back of higher comparable inflation levels and RBI's response. Indian markets relative to EM is down 3% since the last upgrade and we see more opportunities in other ASEAN markets. Recent rate hike in India may complicate situations further.” Top losers on the Sensex were DLF at Rs 220.30 down 3.31%, Tata Motors at Rs 931 down 2.66%, L&T at Rs 1,699 down 2%, M&M at Rs 710 down 1.97% and Bharti Airtel at Rs 423.75 down 1.92%. |
| CORPORATE ANNOUNCEMENT |
| Gitanjali Gems eyes China acquisition by end 2011 |
| Gitanjali Gems Ltd will acquire a Chinese manufacturing unit and jewellery retail firm by the end of 2011 as it looks to expand its global footprint and boost sales. Gitanjali, which retails diamond jewellery under the brands Gili, Nakshatra, Asmi and D'Damas in India, recently acquired four Italian jewellery brands from a unit of Dubai's debt‐laden jewellery group Damas International. |
| Aurobindo scouting for $100‐200 mn buyouts |
| Aurobindo Pharma, which has set an ambitious target of nearly doubling its revenues to $2 billion in three years, is gearing up for acquisitions yet again. The acquisitions are likely to happen both in domestic and overseas markets in addition to the company roping in strategic partners for some of its activities. |
| GVK Power will seek a partner for oil & gas |
| GVK Power is likely to rope in a partner for furthering its plans for tapping the potential in oil & gas sector. The company has already won seven deepwater oil and gas blocks under the NELP VII on the west coast in 2008. The company has partnered with the Australia‐based global resources company BHP Billiton. “We are working on a plan. We have a meeting shortly and we will decide on the future plan during the meeting,” G V Krishna Reddy, the GVK group chairman, said. |
| Tube Investments plans Rs 500 cr capex |
| Tube Investments of India Ltd has lined up capacity expansion to the tune of over Rs 500 crs. The proposed investments include setting up of greenfield facility for bicycles in east India and for tubes in north India. Speaking to reporters on the sidelines of the company AGM in Chennai, TII managing director L Ramkumar said the investment would be funded mainly through debt and internal accruals. |
| Coal India may not bid for Golden Energy Mines |
| Coal India, which was in talks with the Indonesia‐based Sinar Mas Group for acquiring a stake in PT Golden Energy Mines, will have to refrain from making its final bid because it is yet to receive the signal from the coal and the finance ministry. Though Coal India was shortlisted for bidding, two officials familiar with the development indicated that the go ahead is not likely to come soon, and therefore it cannot submit the final bid for the property. |
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| Fortis Healthcare in talks to buy controlling stake in Vietnam’s Hoan My Medical Corp |
| Fortis Healthcare is in talks to buy a controlling stake in Hoan My Medical Corp, the Vietnamese hospital operator backed by Deutsche Bank AG, people with knowledge of the matter aid. Shareholders of privately held Hoan My plan to sell more than 50% of the company in a deal that may value it at about $100 mn, the people said, asking not to be identified because the information is private. The acquisition would bolster Fortis's expansion in Asia, where the Economist Intelligence Unit forecasts healthcare spending per person will grow 55% between 2010 and 2015. |
| Piramal Healthcare expects OTC biz to grow 45‐50 pct in FY12 |
| Piramal Healthcare Ltd expects its over‐the‐counter business to grow 45‐50 percent this fiscal year from 1.5 billion rupees last year, Chairman Ajay Piramal told reporters. The company also expects its contract research and manufacturing services or CRAMS business to grow 20 percent in FY12 from 10 billion rupees last year, he added. |
| Wockhardt sells nutrition biz to Danone for Rs 1,576 cr |
| Wockhardt Ltd has agreed to sell its nutrition business to French food multinational Danone for about $356 mn (Rs 1,576 crs), more than double the amount at which it had signed a similar deal with US pharmaceutical giant Abbott a year ago. Under the current agreement, Danone will acquire Wockhardt's nutrition business and brands such as Farex, Dexolac, Nusobee and Protinex as well as related industrial operations from Carol Info Service, located in Punjab, to enter the baby nutrition and medical nutrition markets in India. |
| DOMESTIC EVENTS |
| After losing Ford, Maharashtra's new plan to claim VAT set off |
| Once bitten twice shy. After losing out an investment of Rs 4,000 crs by Ford to Gujarat, the Maharashtra government has now woken up to revisit modifications made since April on claiming value added tax (VAT) set off by the automobile industry. Instead of VAT set off claimed on gross sales basis, the government has replaced by claiming VAT set off on net sales basis which has been objected to by the automobile industry. |
| Government seeks Parliamentary nod for Rs 34,724 crore extra spend in 2011‐12 |
| Government sought Parliamentary approval for additional gross expenditure of Rs 34,724 crore for 2011‐12 with an assurance that the net cash outgo of Rs 9,016 crore will not push fiscal deficit beyond projections in the Budget. This is the first batch of supplementary demand for grants in the current year. |
| Q1 onion exports drop on good China, Pak crop, says Nafed |
| Onion exports have declined by at least 25% in the April‐June quarter as onion from competing nations is available cheaper. The situation is likely to continue for at least one more month. "Onion exports are less this year as production in competing countries such as Pakistan and China is very good," said Nafed chairman Dr Bijender Singh. |
| INTERNATIONAL EVENTS |
| Carlyle to buy 9 pc of China's Haier |
| Global buyout firm Carlyle Group has agreed to buy 9 percent of Haier Electronics Group Co, Ltd. (HEG) through convertible bonds, raising its stake in a Chinese company that is xpanding into Japan. The deal comes within days of Haier's decision to buy Panasonic Corp's Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for $130 million. Carlyle said it will invest up to $194 million, which with other investments in the company will give it the right to own around 9 percent of Haier. |
| SABMiller expands in China in $47 million move |
| SABMiller, the world's second largest brewer, moved to expand further in China by increasing its stakes to 100 percent in two brewers in the central Chinese province of Zhejiang for $47 million in cash. The London‐based group said its China Resources Snow Breweries Ltd (CR Snow) joint venture will acquire the remaining 55 percent stake in Hangzhou Xihu Beer and the remaining 25 percent interest in Huzhou Brewery from Japanese brewer Asahi. |
| HSBC to hire 15,000 in emerging markets |
| Global banking giant HSBC said it would hire thousands of people in emerging markets by 2014 as it looked particularly to Asia's booming financial sector to power future growth. We are planning to hire up to 15,000 people in emerging markets over the next three years," the bank's Chief Executive Stuart Gulliver told a press briefing in Hong Kong. |
