EQUITY UPDATE – 3 JULY 2012

ASIA

Kawasaki Heavy Industries has asked underwriter Daiwa Securities to cease from underwriting the co’s bond issuance on account of Daiwa being involved in an insider trading case. (Financial Times)

Nissan Motors – Co.’s Indian car sales at 4167 units in June 2012 versus 1632 units in June 2011. (Economic Times/PTI)

Hyundai Motors – Co. India car sales at 54,354 units in June 2012 versus 52,521 units in June 2011. (The Hindu Business Line)

INDIA

According to a Crisil report, there exists a two in three chance for the rupee to appreciate to the 50 level against the dollar by the end of current fiscal, which is subject to government taking right measures to revive growth. However the report also states that there was a one-third possibility of rupee to continue trading in the 55-57 band if the current domestic policy setting environment prevailed and there was no change in the Euro-Zone problems and ongoing global turbulence. (Indian Express)

Oil PSUs – Co.’s losses on the sales of diesel and cooking fuels have halved due to the drop in the international oil rates and rupee strength. Co.’s are losing INR 372cr versus previous INR 670cr per day. (Economic Times/PTI)

ITC – Uttar Pradesh government increased taxes on tobacco products from 12.5 per cent to 50 per cent. (Financial Express)

Hero MotoCorp –   Co.’s June 2012 sales at 534,091 units versus 512,244 units in June 2011. (Financial Express)

ACC/Ambuja Cement – Co.’s production growth in June recorded at 1.97 million tonnes (vs. previous 1.96 m.t in June 2011) and 1.78 m.t (previous 1.65 m.t in June 2011). Despatches for ACC at 1.96 m.t vs. previous 1.91 m.t in June 2011 and for Ambuja at 1.79 m.t versus 1.66 m.t in June 2011. (The Hindu Business Line)

GVK – Co.’s Alpha coal project is expected to get environmental clearance from the Australian Government by the end of this month or latest by early August, according to Hancock executive. (Firstpost/PTI)

Kingfisher Airlines – Over 200 pilots of the co. prolonged their two-day strike on failure to resolve their issues with the management over non-payment of salaries.  In other news promoter holding in the co. dropped to a record low of 35.86 per cent. (Economic Times)

Elecon Engineering – Co. received orders worth INR 104.4 cr from BHEL to supply rail accessories, hydraulic drivers, clamps and other equipment. (Economic Times)

EUROPE

The European Commission has forecasted that the Polish economy is expected to expand by 2.7 percent in 2012, making it the fastest in the European Union. (Financial Times)

The leaders in Finland and the Netherlands may decide to block the European Union’s move to utilize eurozone’s bailout funds to purchase sovereign bonds in the secondary markets. Even though a clause in the fund requires an 85 percent majority approval, the statement by Finland’s Prime Minister Jyrki Katainen’s statements would affect the markets. These nations reiterated that bond buying measures would still be insufficient to counter the crisis. (Reuters)

Morgan Stanley raised its outlook on the equity market in Europe on the back of a successful conclusion at the EU Summit which concluded last week, stating that the measures would improve the risk-reward of investing in the equity markets. The sector was upgraded to ‘neutral’.  The co raised ratings on the European insurance sector to “overweight” and the financial sector to “neutral.” It also downgraded the outlook on the consumer staples sector to ‘underweight,’ on high valuations and relatively high earnings growth. (Economic Times)

Turkey’s GDP for 1Q12 period expanded 3.2 percent as against expectations of an expansion of 2.8 percent. On a seasonally adjusted basis, the GDP for the country rose 0.2 percent on a q/q basis. In related news, the country’s HSBC Manufacturing Purchasing Managers’ Index (PMI) index rose to 51.4 in June from 50.2 in May. (Financial Times)

GlaxoSmithKline plc – Co. has agreed to plead guilty to charges of misdemeanor in the U.S as it sold drugs to patients which were against U.S laws. The co. has agreed to settle the litigation through payment of USD 3 b to the U.S authorities. The co. sold its anti-depressant drug Paxil to patients under the age of 18 years when it was only approved for adults and that its drug Wellbutrin was sold to treat diseases it didn’t have permission for. (Reuters)

Volkswagen – Co.’s Indian unit posted a marginal decline in its sales at 5371 units for June 2012 vs 5397 units sold in June 2011. In related news Audi India – Co. recorded a 75 percent rise in vehicle sales at 718 units vs 408 units sold a year ago. (Economic Times)

NORTH AMERICA

The Institute for Supply Management’s index which gauges manufacturing activity in the US, declined to 49.7 in June vs 53.5 in May. Production and orders for new goods saw greater than expected declines in the month, signaling a slowdown in activity. Production declined to 51 from 55.6, new orders fell to 47.8 from 60.1 in May, its steepest decline, which indicates that demand is falling quicker than expected. (Financial Times)

Ford Motors – Co.’s Indian sales down by 21.20 per cent at 7281 units in June versus 9228 in June 2011. (Money Control/PTI)

The Linde Group – Co., an industrial gas producer, will acquire Lincare Holdings, a US based provider of oxygen and respiratory services for USD 4.6 b. The co. has offered USD 41.50 a share, 64 percent premium to its previous period’s closing price. Linde could finance the transaction via a USD 4.5 b loan plus cash, and would refinance the purchase through debt and up to EUR 1.5 b in funds from an equity issuance. (Financial Times)

Micron Technology – US chip manufacturing co. Micron Technology will acquire bankrupt firm Elpida Memory in a deal worth JPY 200 b (USD 2.5 b). The co. would pay JPY 60 b in cash with the rest JPY 140 b in yearly installments until 2019. (Financial Times)

COMMODITIES

According to an Iranian MP Ibrahim Agha Mohammadi, Iran’s National Security and Foreign Policy Committee has drafted a bill to stop oil tankers from shipping crude through the Strait of Hormuz to countries supporting sanctions against it. (Fox Business)



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