WEEKEND COVERAGE – 12 MAY TO 13 MAY

ASIA

The People’s bank of China has reduced the reserve requirement ratio by 50 basis point, effective from 18 May to boost bank lending. The reduction in the reserve ratio is expected to free up USD 63.5b. (Reuters/NYTimes)

According to Japanese Prime Minister Yoshihiko Noda, the European debt crisis is the biggest risk to the Japanese economy. (Economic Times/AFP)

China is in talks with Japan and South Korea to start a free-trade accord between these nations to cater to boost trading and business. (Bloomberg)

ASIAN EARNINGS

Nissan – Co. in FY11-12 earned JPY 341.43b vs. forecasted JPY 290b. Sales at JPY 9.41t. For FY12-13 net profit expected at JPY 400b and sales at JPY 10.3t. (Financial Express)

INDIA

The market capitalization of the top 10 companies on the BSE Sensex 30 Index declined by INR 58797 cr for the week ended 11 May. Coal India Ltd saw its market cap decline by INR 9569 cr, the highest decline amongst the 10 companies. Reliance Industries, ITC, TCS, Infosys, HDFC Bank, ONGC were also some of the companies witnessing significant declines on weaker market sentiment. (Economic Times)

SpiceJet – According to a HSBC report co. is likely to perform better than its peers. However the report ruled out a financial turnaround in the near term. The report forecasts FY13 to be far better than FY12. But expects losses to continue till 4Q12-13. In related news co. has been upgraded to ‘Overweight’ by HSBC. (Financial Express/Economic Times)

Jet Airways – Co. has been upgraded to ‘neutral’ by HSBC. (Economic Times)

Central Bank of India – State-owned bank stated that it would be requiring an amount in excess of INR 14000 cr of capital to comply with Basel III norms. The bank aims to meet the requirements by March 2018. (Economic Times)

NTPC – Co. states that it would be unable to add an additional capacity of 12500 megawatts (MW) of power generation capacity on account of shortage in the supply of coal. Under the currenty 5 year plan (2012-17), NTPC aims to generate a total capacity of 70000 MW but supply shortages could force it to reduce its target to 65000  MW or even upto 50000 mW in future. (Economic Times)

Rashtriya Ispat Nigam Ltd (RINL) – State owned steel firm RINL is to launch its initial public offering (IPO) on 3 July 2012. The government of India aims to dilute a 10 percent stake in the firm to raise about INR 2500 cr. Other state-owned firms such as SAIL, Hindustan Copper, Oil India and Hindustan Aeronautics would also be launching their IPO’s as part of the Indian government’s INR 30000 cr divestment plan. (Business Standard)

According to a report by rating agency CRISIL, the assets under management (AUM) for mutual funds in India increased by 16 percent to INR 6.8 t in April 2012 bs INR 5.87 t in March 2012. The rise in AUM was due to higher inflows into liquid money market funds which comprised about 82 percent (INR 75700 cr) of the total inflows. (Business Standard)

EUROPE

Greece’s president will meet heads of political parties on Sunday in a last attempt to form a coalition government, as three rounds of negotiations proved fruitless. In related news according to ECB governing council member Patrick Honohan, Greece’s possible exit from the EU was not fatal and could be managed. However he also said that such an event would be destabilizing both for Greece and Euro Zone and all sides were attempting to avoid such an event. The Euro Zone was more resilient to a possible Greek exit than two years back, EU Economic and Monetary Commissioner Olli Rehn said. (NDTV/AP/Bloomberg/IBTimes)

BMW – Co.’s CFO said that co. may increase the dividend payout by 30 to 40 per cent in the coming years if earnings continued to rise. (Frankfurter Allgemeine Sonntagszeitung/ Reuters)

BAE Systems – Indian government has purchased 145 howitzer guns for USD 560m. (Economic Times/AFP)

NORTH AMERICA

JPMorgan – Fitch rating agency lowered co.’s long term default rating to AA – vs. previous AA+; short term grade lowered to F1 vs. previous F1+. The rating agency has placed all parent and subsidiary long-term rating on negative watch. (Business standard/ Bloomberg)

Chevron – Co. has signed a 20 year agreement to sell Japan’s Tohoku Electric with 1mt of LNG. (Economic Times/Reuters)

Ally Financial Inc – Co.’s Residential Capital unit was close to filing for bankruptcy in an attempt to restructure its mortgage business. Fortress Investment Group, an investment management firm is expected to make a bid to acquire USD 2 b worth of debt while Ally Financial would purchase the remaining of the co’s assets. (Reuters)

Chesapeake Energy Corp – Co received a USD 3 b unsecured loan from two firms to repay its debt obligations. Goldman Sachs and the Jefferies Group provides the loan to help the struggling firm to repay its USD 4 b revolving credit facility. Chesapeake also plans to sell assets worth USD 9 – 11.5 b to fund its debt. (Reuters)

 The state of California saw its budget deficit rise to USD 16 b on a slower economy which saw declining tax revenues. The deficit came in higher than expected from previous forecasts of USD 9.2 b made in January 2012. (Bloomberg)

 According to a Canadian government report, Glencore International plc’s CAD 6.1 b (USD 6.1 b) takeover of Viterra Inc. could reduce competition in retail fertilizer industry. (Bloomberg)

 COMMODITIES

According to Saudi Arabian Oil Minister Ali Naimi, Saudi Arabia stated that the price of an oil barrel should stay above USD 100 a barrel which would benefit the country. The minister also stated that global inventories must also rise to signal an increase in demand. He also affirmed that Saudi Arabia was keeping its output of oil at 1.3 – 1.5 m of barrels a day to meet global demand. (Reuters)



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