EQUITY UPDATE – 28 JUNE 2012

INDIA

FII made gross purchases of INR 1,914.47cr and made gross sales totaling INR 1,828.38cr. DII made gross purchases of INR 709.31cr and gross sales totaling INR 724.38cr. (Business Standard)

Oil Co.’s – Co.’s to cut petrol prices by INR 4 a litre from 1 July due the fall in oil rates in the international markets. (Financial Express)

Axis Bank/Yes Bank – HSBC offered to sell 19.6m shares in Axis Bank for INR 950.0-970.9 and 16.8m shares in Yes Bank for INR 318.1-324.8; valuing the total deal at USD 429.5cr. (Economic Times/Reuters)

Tata Power – Co. is planning to explore overseas coal mines in the event of a shortage of coal supply in India. The co. is actively seeking opportunities in Indonesia and South Africa. (Economic Times)

Rallis India – Co. expects INR 500cr revenue in five years from its newly commissioned agriculture chemical plant at Dahej in Gujarat.  (The Hindu Business Line)

Strides Arcolab – Co. redeemed outstanding foreign currency bonds worth USD 80m. (Business Standard)

Indian Hotels Company – Tata Sons increased stake in co. by 4.78 per cent to 24.36 per cent through an investment of INR 497.47cr. (Financial Express)

EUROPE

According to ECB’s executive board member Peter Praet’s, interest rates could be cut further if they justified price stability in the medium term. In related news, a poll conducted by Reuters showed that 48 out of 71 analysts expect a rate cut, majority of them see rates cut by 25 basis points to 0.75 per cent. (Reuters)

Spanish Prime Minister Mariano Rajoy stated that the country would be unable to finance itself in the event of higher borrowing costs in the longer term. Yields on the Spanish government 10 yr bonds rose to almost 7 percent on rising concerns. In related news, Spain’s central bank, The Bank of Spain issued a warning that the recession in the country had intensified further. In other news euro zone finance ministers see Spain requiring EUR 51 to 62b and an additional safety margin. This was in response to the bailout request made by Spain yesterday. (Economic Times/Reuters)

European Commission/European Central Bank/IMF have accepted Cyprus’ request for a financial aid and will begin the assessing the amount of bailout funds required. Cyprus had requested EUR 2.3b to shore up its two commercial banks namely: Bank of Cyprus and Cyprus Popular Bank. (Economic Times/AP)

According to former Bank of England’s governor Andrew Large, BoE’s power to include financial stability as one of its mandate could be manageable. BoE plans to handle additional responsibility, that of the Financial Services Authority. (Bloomberg)

Barclays – Co. to pay USD 452m penalty for labor rate manipulation. (CNBC- TV18/Money Control)

Glencore International plc – Mining giant Glencore will seek to conduct negotiations with Qatari based sovereign fund, Qatar Holding LLC, over its GBP 16 b (USD 25 b) takeover of Xstrata plc. The fund, which initially had backed the deal, overruled its previous decision by citing a lower offer. Glencore’s offer of 2.8 shares of the co. for each share of Xstrata is now wanted by the fund to be raised to 3.25 for the merger to go through. The deal, if concludes without any objections, is expected to occur by October. (Bloomberg)

BHP Billiton Ltd – Co. cut its forecast for the price of iron ore on slowdown in demand from China. Prices of iron ore declined 2.2 percent in 2012 till date on slowdown in the Chinese economy. (Bloomberg)

Commerzbank – Co. is to exit its noncore shipping finance operations on suboptimal market conditions. (Financial Times)

NORTH AMERICA

US Pending Home sales index, a sign of purchase of previously owned homes, rose by 5.9 percent 101.1 vs a 5.5 percent decline in April. The data exceeded expectations of a 1.5 percent rise, as forecasted. Lower mortgage rates coupled with lower prices of properties aims to revive the housing market in the US. (Bloomberg)

Orders for durable goods in the US rose 1.1 percent in May vs a decline of 0.2 percent in April. Median forecasts came in at a gain of 0.5 percent. New orders declined 6.8 percent for the first four months of 2012. Non-defense capital goods orders rose 1.6 percent in May vs a decline of 1.4 percent previously. (Bloomberg)

COMMODITIES

According to analyst surveyed by Reuters, oil prices are expected to average below USD 100 a barrel over the next two years, due to weak medium-term economic growth and concerns about oil supplies. (Economic Times)



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