EQUITY UPDATE: 24 AUGUST 2012

ASIA

Qantas – Australian airliner reported a loss of AUD 244 m (USD 256 m) for the FY11-12 period ended 30 June vs profit of AUD 250 m a year ago. The co. has also cancelled its USD 8.5 b order of 35 Boeing Dreamliner aircrafts citing lower demand and restructuring. The delivery date for additional 50 planes has also been postponed to 2016. Rising fuel costs, intense competition from other firms on the international route and other charges affected the firm. (Financial Times)

Hyundai Motors – Co.’s operations are affected by the possibility of an all-out strike by workers at its plants in South Korea. The co. has seen its exports decline 25 percent in July on a m/m basis to 94,576 units as the co. suffers losses of USD 1 b or 60,000 units. (Financial Times)

INDIA

According to domestic rating agency ICRA, revised its GDP forecast to 5.7 per cent from its previous estimate of 6.2-6.4 per cent in June. The rating agency cited sluggish investment sentiment, weaker monsoon and likely rise in inflation. ICRA also expects that the lack of monsoon’s to increase the fiscal deficit target of 5 per cent to 5.7 – 6 per cent.  Government borrowing target of INR 2000b to overshoot by INR 600b to INR 900b; current account deficit to improve to 3.7 per cent from 4.3 per cent, the rating agency said. ICRA revised headline inflation to 7.5 to 7.7 per cent from earlier 7 to 7.5 per cent. (Money Control/PTI)

FII’s made gross purchases of INR 2,473cr and sale of INR 2,161.93cr. DII’s made gross purchases of INR 929.59cr and gross sales of INR 1,090.69cr. (Business Standard)

Cochin Shipyard – Co. plans to launch an IPO to fund its INR 1500 cr expansion of a ship construction project. The majority state-owned co. expects a divestment programme in which the proceeds would be used to construct a ship building and repair centre at Cochin. (Business Standard)

Reliance Life – Co. is talks with banks to offload a 5 percent stake in the firm. (Business Standard)

Tata Steel – Co. plans to arrange a USD 5 b loan from a consortium to fund its expansion plans in India. Expansion of its plant in Jamshedpur, addition of a plant in Odisha is the main purpose of its expansion plans. (Business Standard)

Wockhardt – Macquarie maintained a ‘outperform’ rating on co., with price target increased to INR 1,575. Citing 20 per cent expected growth in FY 13 and a strong product pipeline. (Economic Times)

GVK Power and Infrastructure – Co. secured federal environmental clearance for its Alpha Mine and Rail Project in Queensland, Australia. (MoneyControl)

EUROPE

According to a source, the European Central Bank of considering setting a yield target on purchases of new bond – buying plan, without making the levels public. (Reuters/ CNBC)

Kazakhmys PLC – Mining firm saw lower copper prices coupled with rise in inventory levels affect its 1HY12 earnings. Revenues declined 17 percent y/y to USD 1.5 b on lower volumes. Rising wages and input costs saw operating costs rise 20 percent to USD 966 m. Copper sales declined to 118,000 tonnes a year from 136,000 tonnes a year ago. (Financial Times)

NORTH AMERICA

U.S Initial jobless claims rose by 4000 to a seasonally adjusted 372,000 applications for week ending 18 August vs forecasts of 365,000. The lack of a pickup in the labour markets could hasten the process of a stimulus or a QE stimulus to prop up the economy. The four-week moving average rose by 3750 applicants to 368,000 for first time claims. No. of people filing for benefits came in at 3.32 m while the 4 week moving average rose to 3.31 m. (Reuters/IBT)

Sales on new homes in the U.S rose 3.6 percent to 372,000 units on a seasonally adjusted rate for July vs 359,000 in June vs exp sales of 365,000 units. But median homes prices declined 2.5 percent on a y/y basis to USD 225,000 a home. New home inventory declined 0.7 percent to 142,000 units, leading to record lows. (Reuters)

ISS, a shareholder organization followed by institutional investors in the U.S has disapproved the merger of Glencore and Xstrata. Valuation of the firms and compensation packages granted to the executives were the downside of the deal while a rise in output was viewed as a favourable event for the deal. (Financial Times)

HP – Co. reported a 2Q12 loss at USD 8.9 b, on an USD 8 b writedown it took on its services business. Revenues declined 5 percent y/y on lower sales of printers and computers. Sales clocked in at USD 29.7 vs expectations of USD 30.1 b. The co. alongwith Dell, is losing out on market share to Asian firms such as Asus, Lenovo and Acer. FY12 EPS forecasts came in at USD 4.05 – 4.07 a share ,below expectations of USD 4.08 a share. The firm plans to reduce its workforce by 8 percent, leading to 27,000 job cuts by 2014. (Financial Times)

General Motors – Co. is to downsize on its operations at two plants in Germany on lower sales. GM’s Opel division will halt production for 20 days in the last four months of 2012 on lower demand for vehicles on account of the crisis in Europe. (Reuters)

 



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