EQUITY UPDATE – 4 JULY 2012

ASIA

Malaysia’s IHH Healthcare Berhad plans to launch its initial public offering of USD 2b simultaneously on the Kuala Lumpur and Malaysian stock exchanges. The shares are expected to be priced at Malaysian Ringgit (MYR) 2.85 (USD 0.9) a share on the Malaysian exchange and at Singapore Dollar (SGD) 1.18 (USD 0.93) a share. The co. will offer 2.2 b shares comprising of 1.8 b freshly issued shares and 434 m shares owned by Abraaj, a Cayman Island incorporated firm. (Financial Times)

INDIA

Nomura lowered India’s growth forecast to 5.5 per cent (from 6.1 per cent) in 2012 and to 6.6 per cent (from 7.1 per cent) in 2013, citing slowdown in monetary and fiscal policy and global financial service. Nomura also revised its WPI inflation forecast to 7.6 per cent from 7.1 per cent.  In another report Nomura said that Indian economy may enter into stagflation due to evaporating of demand and elevated inflationary expectations. (Economic Times)

Associated Chambers of Commerce and Industry suggested that Reserve Bank of India should lower interest rates by at least 100 basis points to spur economic activity. (The Hindu Business Line)

SAIL – Co. will sign an agreement with Kobe Steel in the next week for their joint-venture operations for a iron ore plant. The 50:50 JV will see an investment of INR 1500 cr. In other news Fitch rating affired co.s BBB- rating with outlook negative. (Economic Times)

Cairn India – LIC hiked its stake in co. to over 5 per cent. (Economic Times/PTI)

Educomp Solutions – Co. has sacked 800-900 employees and more may have to leave, according to a source. The source cited that existing employee’s salaries have been deployed. (Economic Times)

Ashok Leyland – Co.’s sales rose 27.9 percent in June at 10,244 units on the back of its light commercial vehicle range ‘Dost’.  For the April-June 2012 period, the co. sold 27,585 units vs 19,277 units a year ago, leading to a rise of 43.09 percent. (Economic Times)

Power Trading Co.’s – The government has allowed co.’s to supply power directly to smaller industrial units. (Money Control/CNBC-TV18)

EUROPE

Spain’s unemployment for June declined 2.1 percent to 4.62 m. No. of registered unemployed people declined by 98,853 on a m/m basis. On an annual basis, Spain’s unemployment rose by 493,468 citizens, the highest in the EU region. Youth unemployment, unemployment of people below 25 yrs, declined 7.6 percent. (Financial Times)

The IMF raised the forecast on Germany’s GDP to an expansion of 1 percent vs. prv. forecast of 0.6 percent. The IMF cited strong domestic demand on the back of a strong labour market would help the country manage structural reforms to mitigate the effects of the eurozone crisis. The country is expected to grow by 1.4 percent in FY2013. (Economic Times)

Portugal’s Prime Minister Pedro Passos Coelho stated that citizens of the country should look for employment abroad as youth unemployment (under 24 yrs) rose to 36.6 percent. (Financial Times)

Eon – Energy firm doubled its outlook for the FY12 period to EUR 4.1 – 4.5 b adjusted for one-off effects, from previous forecast of EUR 2.3 – 2.7 b. The forecast was raised as the co. reached a price concession deal with Gazprom on energy supply contracts believed to extend into the longer term. EBITDA was forecasted to touch EUR 10.4 – 11.0 b in the same period. The deal with Gazprom had positive impact on the stock price which rose 2.7 percent in afternoon trade at EUR 17.50 a share. (Financial Times)

Barclays Plc  – The Chief Operating Officer Jerry del Missier quit from co., becoming the third high profile person to exit the bank faced with charges of rigging the Libor rate. (Economic Times)

 NORTH AMERICA

Microsoft Inc – Co. recorded a USD 6.2 b write down on its online advertising business whose operations commenced five years ago. Microsoft purchased AQuantive, to compete with Google Inc, which strengthened its operations in the online advertising industry. In related news according to Nomura equity research co. could be willing to sell its online businesses, due to diminishing prospects and mounting losses. Nomura added that co. could be willing to sell its businesses if right partner like facebook emerged. (Financial Times/Reuters)

BlackRock – Co. is in talks to acquire Swiss Re’s private equity fund of funds unit at an undisclosed amount. The acquisition will see BlackRock’s assets in the private equity space double to USD 15 b. (Financial Times)

US Factory orders saw a rise for the first time in three months with a 0.7 percent gain in May vs a 0.7 percent decline in April. Median forecasts came in at a gain of 0.1 percent. Factory orders excluding transportation equipment saw a rise of 0.4 percent vs April’s revised number of -0.6 percent. Durable goods orders saw a 1.3 percent rise, which makes up over 50 percent of total factory demand. Factory inventories declined 0.2 percent in May. Shipments of equipment and products saw a 0.5 percent rise in May. (Bloomberg)

The International Monetary Fund (IMF) reduced its GDP forecast for the US economy to 2 percent vs prv forecast of 2.1 percent. Steep cuts in spending and increases in tax rates combined with the worsening of the euro crisis could see the US worse off by the end of 2012. (Economic Times)

JP Morgan Chase & Co. – Co. is under investigation on allegations of a potential manipulation of electricity contracts. The co. was questioned by the Federal Energy Regulatory Commission over bidding process leading to USD 73 m in improper payments. (Bloomberg)

Morgan Stanley – Investors, who filed a lawsuit against Morgan Stanley, claim that the co. successfully lured rating agencies S&P and Moody’s to give an investment grade credit rating in 2006 to over USD 23 b of subprime mortgage notes. The case pertains to notes issued by Cheyne Finance Plc, a structured-investment vehicle that filed for bankruptcy in 2007. (Bloomberg)

GEOPOLITICAL

According to Iranian media reports, Iran successfully tested medium-range missiles capable of hitting Israel.  (Yahoo/Reuters)



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