EQUITY UPDATE – 20 JUNE 2012

INDIA

RBI Governor D. Subbarao blamed the domestic and global economy as the main factors contributing to the fall in the rupee. Higher trade deficit on increased imports due to oil and gold price rise were the major domestic factors while eurozone crisis was the global issue responsible for the trading pattern of the rupee. In related news, the RBI also stated that inflation in India, was above acceptable levels and called out to the government to undertake further measures to support the economy. This statement was also made to defend the RBI’s decision to not cut benchmark CRR and repo rates on Monday. (Economic Times)

The Reserve Bank of India is set to purchase government securities maturing in 2018, 2021, 2030 and 2032 for an aggregate amount of INR 12,000cr on 22 June 2012, according to a RBI statement. (Economic Times/PTI)

Indian Government pledged USD 10b to the IMF, along with Brazil and Russia, while South Africa contributed USD 2b. Highest contribution among the BRIC nations was made by China, pledging 43b. IMF’s total lending capacity stood at USD 430b. (FirstPost)

Foreign Direct Investment in India declined 41 per cent to USD 1.85b in April 2012 versus USD 3.12b in April 2011. (Economic Times/PTI)

Macquarie Bank – Co. sold 80,00,000 shares in IDFC for INR 102 cr in open market transactions. The deal was conducted at share price of INR 127.55 a share. (Economic Times)

India’s competition regulator CCI has detected that around 11 cement firms were found guilty of forming a price cartel on cement prices. CCI has imposed a penalty of 8 percent on the 11 co.’s average revenues (for last 3 years) which amounts to about INR 3000 cr. The collective turnover of the 11 firms stood at INR 37,500 cr for that period. (Business Standard)

Advance Tax collection of top 100 co.’s in India rose 5 percent to INR 33,089 cr for 1Q12 period (April – June). This is against the targeted range of 15 percent growth rate for FY12-13. Co.’s such as Reliance Industries and BHEL have paid lower taxes in the period of collection as compared to 1Q11. (Business Standard)

ONGC – Co. signed a memorandum of understanding with China National Petroleum Corporation to explore business opportunities. (The Hindu Business Line)

BHEL – Co. plans to set up a fabrication unit and photovaltic manufacturing plant in Bhandara, India. The total outlay is estimated at INR 4000 cr. (Economic Times)

GMR – Co. allotted 1000 secured non-convertible debentures with a aggregate value of INR 100cr to ICICI Bank. (Economic Times)

HCL Infosystems – Co. to launch a third generation tablet PC in August 2012 priced at INR 18,000. (Indian Express)

Sterlite Technologies – Co. secured debt financing of INR 2,200cr from a debt syndicate for its two grid projects. (The Hindu Business Line)

Cement co.’s – Cement sales up 14 per cent to 16.26 million tonnes in May against 14.20 nillion tonnes in the same period last year. (The Hindu Business Line)

EUROPE

According to a senior European Union official, Spain will officially request aid for its banking sector in the coming days. (Fox Business/Dow Jones Newswire)

Spanish T-Bill auctions saw a sale of EUR 2.4 b worth of bills sold on higher yields. Yields averaged 5.074 percent vs previous rates of 2.985 percent in the auction in May.  Bid-to-cover ratio, which gauges demand, came in at 2.16x. It also auctioned EUR 639 m worth of bills due 18 months at 5.107 percent vs previous yields of 3.302 percent. Bid-to-cover was at 4.42x, exceeding previous periods ratio. The country would conduct an auction of medium term bonds on Thursday. (Financial Times)

UK Annual CPI declined to 2.8 percent in May against expectations of 3 percent, which hinged on previous period’s inflation number. Declining food and fuel prices led to the drop in the data, paving way for quantitative easing to stimulate the economy. Food prices rose 0.3 percent in May on a m/m basis a 1.3 percent on a y/y basis. Fuels and lubricants declined 3.1 percent on a m/m basis as prices of crude oil declined globally. (Financial Times)

Danone SA – Co. warned on lower profit margins in FY12 due to the ongoing European crisis. (Boston.com/AP)

NORTH AMERICA

Microsoft Inc – Co. launched a tablet called Surface to rival Apple’s Ipad.  The device will have a Windows 8 operating system. (Financial Times)

KKR – PE firm KKR has finalized its decision to acquire Prisma Capital Partners, a fund of hedge fund manager but did not disclose the financial terms of the deal. (Financial Times)

Air Products and Chemicals Inc. – Co. would acquire Chile’s Indura SA for USD 707 m, granting it a controlling stake of 67 percent. (Bloomberg)

Walgreens – Co. will acquire a 45 percent stake in retail and wholesale pharmacy co. Alliance Boot’s in a deal valued at USD 6.7 b. The deal would be conducted in cash and shares. The co. will look to acquire Boots completely in the next three years for an additional USD 9.5 b which would also include its outstanding debt. The co.’s would aim to target markets in China through the wholesale pharmacy distribution business of Boots and would look to gain a firm presence in the US. (Financial Times)

 

 



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