EQUITY UPDATE: 22 AUGUST 2012

ASIA

CnooC – China’s offshore drilling firm saw its 1HY12 profit decline 19 percent on a y/y basis to RMB 31.9 b vs prv RMB 39.3 b on higher costs and lower gas output. The co. reduced its interim dividend by 40 percent to HKD 0.15 a share to save up for its USD 15.1 b takeover deal of oil firm Nexen. Oil production output declined 4.6 percent to 161 m barrels. The oil spill at its Penglai field contributed to the fall in output. (Financial Times)

Thailand’s 2Q12 GDP expanded 4.2 percent vs growth of 0.3 percent in the prv quarter. The emergence of the nation from the flood crisis affecting it last year saw a strong comeback from sectors such as tourism, manufacturing and construction. (Financial Times)

INDIA

According to the Reserve Bank of India’s minutes, five of the seven external members of the advisory committee favored the governor’s decision to keep interest on hold in July. The advisory committee members were in opposition to the bank’s surprise rate cut in April. (MoneyControl)

The research firm Dun & Bradstreet, expects Indian economy to grow at a 6 per cent rate during the current fiscal.  Research firm cited unsatisfactory progress in monsoon, posed an upside risk to overall inflation. As food prices remained elevated. (MoneyControl/PTI)

FII’s made gross purchases of INR 2,220.91cr and sales of total of INR 2,079.54cr. DII’s made gross purchases of INR 1,022.73cr and gross sales of INR 1,164.37. (Business Standard)

Bharti Airtel – Telecom firm saw its stock downgraded by Morgan Stanley to equal weight from overweight with a price target of INR 280. Pressures on operating margins arising from expansion and higher traffic coupled with intensity in tariff competition could affect the co. further. Lowering 3G rates was also cited weighing on its dismal results. (Economic Times)

ONGC – Offshore drilling firm is to extract geothermal energy from the South Cambay basin in Gujarat with a 50:50 joint venture with Talboom. (Economic Times)

Tata Steel – Co. to pay USD 471.17m to redeem its FCCBs maturing on 5 September 2012. (Business Standard/PTI)

Gail – Co. has cut its stake in ONGC’s Dahej project to 15.5 per cent from 19 per cent as project cost escalated by 9.5 per cent. (Business Standard/PTI)

L&T – Utility and engineering firm’s subsidiary L&T Const. saw its orders received rise to INR 2044 cr in the second quarter period. (Economic Times)

Wockhardt – Pharma firm received US FDA permission to market the generic version of the Felodipine tablets in the U.S.(Business Standard)

Tata Global Beverages – Co.  and European Bank of Reconstruction and Development, together acquired the remaining 49 per cent shares of SuntyCo Holdings. (The Hindu Business Line)

EUROPE

Great Britain posted a budget deficit of GBP 557 m (USD 878 m) vs a surplus of GBP 2.84 b a year ago for the July 2012 period on a y/y basis. Expectations came in at a surplus of GBP 2.2 b. Lower corporate tax collections partly on closure of the Elgin gas field in the North Sea contributed to the deficit. Government spending rose by 5.1 percent and tax revenues declined 0.8 percent. (Bloomberg)

According to PIMCO’s Mohamed El-Erian, capping interest rates to control the borrowing costs of European countries was a not a likely option for the ECB to adopt. Mohamed EL-Erian further added that, capping yield levels signaled unlimited intervention. (Economic Times/Reuters)

Glencore International plc – Miner did not back down to demands from Qatar’s Sovereign wealth fund to improve terms of its takeover plan of Xstrata plc. The sovereign fund is a 12 percent stakeholder in Xstrata which collectively negotiated better terms from Glencore. The deal was stated by Glencore Chief Ivan Glasenberg as not a must-do deal which explains its firm stance. In related news, the co. reported a 26 percent decline in its 1HY12 profit to USD 1.8 b vs exp of USD 1.6 b on lower prices of commodities. The co. declared a dividend of 5.4 cents a share. (Financial Times/Bloomberg)

Julius Baer – Asset management firm plans to reduce its rights issue from Swiss Franc (SFr) 750 m to SFr 500 m on shareholder backlash. (Financial Times)

NORTH AMERICA

Best Buy Inc – Retailer saw its 2Q12 profits drop 91 percent on higher restructuring costs which prompted the co. to suspend its earnings guidance. Shares declined 10 percent to USD 18.16 a share over prv period’s decline of 10 percent over the failure of the co.’s former chairman’s r takeover plans. Sales came in 3 percent lower at USD 10.5 b. Profits came in at USD 12 m vs USD 128 m a year ago. EPS came in at 4 cents vs 34 cents a year ago. Restructuring charges amounted to USD 91 m. EPS excl charges came in at 20 cents vs exp. 31 cents. (Financial Times)



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