MORNING EQUITY UPDATE

ASIA

According to Chinese PM Wen Jiabao, corruption could threaten China’s power structure. (Reuters)

INDIA

EGoM undertook a decision to allow export of additional one million tonnes of sugar over the previously approved two million tonnes for the marketing year through September. This move aims to ease surplus sugar stock and support sugar mills in repaying arrears of INR 8409 crore owed to farmers. According to data released by Indian Sugar Mills Association, sugar output in India increased to 21.16 million tonnes since October 1, up 14% from a Y-o-Y basis. (Financial Express)

According to the Steel Minister, India’s steel production stood at 63.894 million tonnes during the April-February period this fiscal, up 6.8 per cent over the same period last year. He also added that steel production during the entire 2010-11 fiscal was 66.013 million tonnes, up 8.8 per cent over 60.624 million tonnes in 2009-10. (thehindubusinessline)

The lack of clarity in terms of the new General Anti-Avoidance Rule GAAR rules drove the market down on Monday.  According to a brokerage firm IIFL the introduction of GAAR could give powers to the tax department to deny double taxation treaty benefits to foreign funds based out of tax-havens like Mauritius. (Reuters)

According to a CRISIL research report, the new home prices in Mumbai are unlikely to decline, despite a 40 per cent decline in new home sales in 2011. (NDTV)

CIL – In a letter to the Coal Ministry, an UK based hedge fund which holds a minority stake in co. has alleged that co.’s board and top management for not performing adequately and were harming the co.’s growth. (Economic Times/PTI)

Kotak Mahindra Bank – Private equity investor Warburg Pincus LLC has sold 3.6 per cent of its remaining stake in the co. Reports say that the investor sold shares for INR1,400cr through this deal. (thehindubusinessline)

Reliance Gas Transport Infrastructure Ltd – Co. is up for sale and PSU companies GAIL and Oil India have shown interest in buying the co., according to a source. (Economic Times)

IDBI Bank – According to the co. the government has decided to infuse INR 810cr in the bank by way of preferential allotment of shares. (Business Standard/PTI)

Tea Co.’s – According to the Indian Tea Association (ITA), tea production in North India covering Assam and West Bengal for 2012 is set to register a sharp drop due to a prolonged dry spell and rising temperatures across the two States, according to the Indian Tea Association. Data compiled by ITA in respect of its members estimate rainfall deficit for West Bengal to range between 31 and 42 per cent during January-March 2012 as compared to the same period in 2011. (thehindubusiness line)

Infra Co.’s – US Commerce Secretary John Bryson on Monday pitched for U.S. companies to participate in India’s massive private sector-driven push in building infrastructure. However he also warned on the high import tariffs that could hurt long-term ties. (Reuters)

Tata Motors – Co.’s subsidiary Jaguar Land Rover (JLR) yesterday said it has raised GBP 500mn through issue of bonds. (Business Standard/PTI)

Tata Metaliks – Co. yesterday said its board had approved an issue of preference shares worth INR 100cr to its promoter Tata Steel.  (Economic Times/PTI)

EIH Associated Hotels – Shares in co. rose 11 per cent to INR 174.10 on the back of the co.’s proposal of a rights issue as well as merging of the co.’s wholly owned subsidiary Island Hotel Maharaja Ltd with itself. (Money Control)

JSW Steel – Co. yesterday said one of its promoters, JSW Investments, has increased stake in the company to 3.70 per cent by purchasing shares worth INR 1.69cr. (Economic Times/PTI)

Gammon Infrastructure Projects – Co. has bagged a contract from the National Highways Authority of India (NHAI) for four-laning a national highway in Haryana at an estimated cost of INR 934.93cr. (Business Standard/PTI)

Kingfisher – Co. made a tax payment of INR 44cr to the Income Tax Dept. In other news ICICI Bank has sent a loan recall notice to the company asking it to repay the loan or top up the share collateral. The Bank has an exposure of INR 600cr, out of which, INR 170cr is equity and the INR 430cr is debt. In other news the civil aviation minister Ajit Singh issued a warning to the co. saying that the company should pay all its dues to airports and oil companies in order to avoid stoppage of services and fuel. In related news co. owed over INR 5,600cr to public sector banks as on February this year, according to the government. (CNBC TV18/Economic Times/NDTV/PTI)

EUROPE

ECB President, Mr. Mario Draghi, in his speech stated that economy is stabilizing in the troubled Euro zone. He cited that improved lending activities by banks to the financial markets could stabilize the region.  European banks have issued about EUR 70 bn of senior unsecured debt this year, which was above the amount which was issued in 2HY10. (Reuters)

Germany has backed down from its resistance to boosting Europe’s financial firewalls, after Chancellor Angela Merkel said she was open to temporarily boosting the eurozone’s bailout funds to EUR 700bn. But the move still falls short of what may be needed to protect Italy and Spain from collapse. In other news Angela Merkel said that it would be “catastrophic” to allow Greece to leave the eurozone because of its debt problems. (Telegraph/boston.com /AP)

According to ECB’s Christian Noyer, it may not be easy to return to the policies that existed before the financial and debt crises and it was crucial to remain focused on price stability. (Economic Times/Reuters)

Germany’s Ifo index rose in March to 109.8 vs. prev. 109.6, beating the consensus forecast for no change and confounding some expectations of a weaker figure after disappointing economic surveys last week. (Reuters)

HSBC – Co. said it was in talks over a possible sale of its Mauritius retail banking and wealth management division, as the co. sells non-core assets to boost investor returns. (Reuters)

Tullow Oil Plc – Co. discovered oil in the northern part of the country and will undertake further steps to ascertain commercial viability of the well. (Reuters)

RBS – the UK government is in advanced talks to sell a significant stake in the Royal Co. to Abu Dhabi. (BBC)

Royal Mail – UK state-owned postal operator, Royal Mail, is set to launch an IPO by 2013, depending on market conditions. Analysts estimate that the company is valued at GBP 3-4 bn.  The UK Government initially plans a partial sell-off of the company with a complete divestment not ruled out.  The European Commission’s approval of the UK Government taking over Royal Mail’s GBP 9.5 bn pension deficit reduced approximately GBP 1 bn of its GBP 1.7bn debt. (Financial Times)

 NORTH AMERICA

Ben Bernanke, in his speech on Monday stated that labor markets remained weak and that the US Fed could still conduct further quantitative easing if required. For the labor markets to pick up, Mr. Bernanke stated that the economy would still have to grow at a faster rate to create jobs through expansion of production and an increase in demand from consumers and corporations. The decline in US unemployment rate from 9.1 percent to 8.3 percent over the past six months could be stated as a one-off bounce back from the massive layoff witnessed during 2008 and 2009. The April FOMC meeting could reveal the Fed’s policies in terms of whether it plans to continue “operation twist” – buying long-dated Treasury’s and selling short dated ones to keep interest rates low,  or to conduct a third round of asset purchases or QE3. (Financial Times, CNBC)

Schlumberger Ltd – Co. was downbeat on this profits as it said that downward pricing pressure for hydraulic fracturing services, which had now reached North American liquids basins as well. (Reuters)

Anadarko Petroleum Corp – Co. plans to drill six to eight exploration and appraisal wells in the Gulf of Mexico this year, a plan that marks a full recovery from disruption stemming from the government’s 2010 drilling moratorium. (Reuters)

According to a report by Morgan Stanley and consultancy firm Oliver Wyman, investment banks, collectively, are set to reduce their balance sheets by USD 1 tn on account of higher funding costs and increased regulatory pressure to maintain adequate capital. Some of the measures undertaken by the banks include reduction in risk weighted assets by USD 900 bn and USD 10-12 bn in other costs.  (Financial Times)

 Economic Activity

Argentina’s 4Q GDP rises by 7.3 percent on a Y-o-Y basis beating economists’ forecast of 7 percent.  4Q GDP was also up 0.8 percent on a Q-o-Q basis according to data from Argentina’s national statistics agency, Indec. During 2011, the Argentinean economy expanded 8.9 percent, down from 9.2 percent a year before. Argentina’s central bank has forecasted a GDP growth for 2012 at 6 percent even though many economists are less optimistic. (MarketWatch)

German IFO – Business Climate (Mar) at 109.8 vs 109.7 (Previous).

United States Pending Home Sales (MoM) (Feb) data at -0.50 per cent vs 2.0 per cent (Previous)



Categories: General News

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