Top Gainers Vs Losers

Top Gainers (NSE) (%) M&M +23.99 % TATACOMM +17.95 % HDFC +17.29 % STER +15.90 % Top Losers (NSE) (%) BPCL -6.59 % UNITECH -4.35 % SUZLON -3.79 % HEROHONDA -3.07 %

Suzlon Energy Ltd suspended right issue of Rs.1800 Crores

Suzlon Energy Ltd, India’s biggest wind-turbine mak er, suspended a rights offer announced a month ago to raise Rs1,800 crore to buy an additional stake in Repower Systems AG. In a separate announcement, Repower said in Frankfurt on Monday that it was in advanced negotiations with a syndicate of banks for loans to fund its growth. It said banks had demanded that Repower refrain from entering into a domination and profit transfer agreement with Suzlon, and that the two companies had decided to comply. Repower shares were trading down 35.6% on Monday evening India time, the biggest loser on Frankfurt’s technology index . “Suzlon will need to offer a buyout to Repower’s minority shareholders before it can integrate their technology,” said an analyst with a foreign brokerage, who declined to be named. Suzlon has recently faced breakages on its turbines in the US. Suzlon suspended its plan to raise money by selling shares to existing shareholders after a slump in stock markets across the world. The Indian bench mark share index has fallen 58% this year. “In view of the current capital market environment, it has been decided to suspend the rights issue,” Suzlon said in a release to the Bombay Stock Exchange on Monday. Suzlon shares turned positive after the announcement, before ending 0.6% lower at Rs46.95 in a Mumbai market that fell 2.2%. Suzlon had struck a deal in September to buy Martifer’s 22.48% stake in Repower for nearly $400 million, which would have taken its holding to 90% by December. The Indian company said the Martifer deal was on track but it had dropped negotiations to buy the remaining minority shareholding in the German company. Suzlon shares have dropped 88% this year. The move to drop the rights issue won’t hamper the plans of the company, Suzlon said. “Since the rights issue was planned to further accelerate the original plans of the company, the proposed suspension shall not impact the original plans,” the company said. The company also said that it was suspending talks on the “domination” agreement with Repower. “In the context of the current market environment, both the parties have jointly agreed to suspend the process of negotiation of domination agreement for the time being,” Suzlon said. “However, the company will continue to pursue its strategy for sustainable growth.” “In the current global financial meltdown, the fundamentals of the wind industry remain largely unchanged and hence the company’s business plans remain on track,” it added. Suzlon’s billionaire founder Tulsi Tanti was seeking control and a power-transfer agreement, which would let the majority shareholder assume management of Repower. The purchase of Martifer’s stake is scheduled to take place before 15 December. Suzlon bid successfully for Hamburg-based Repower in May last year in partnership with Martifer, topping a rival offer from Areva SA. The company bought Areva’s 30% stake in Repower in June. IDFC Private Equity completed an investment of Rs400 crore for a 17.1% stake in SE Forge Ltd., a unit of the turbine maker, Suzlon said. Suzlon will hold 82.9% in SE Forge after the sale. The company’s plans to drop the share offering follows just concluded rights offers by Hindalco Industries and Tata Motors that had to be bailed out by underwriters and their founders. Reuters’ Prashant Mehra and Narayanan Somasundaram contributed to this story.

SBI 2nd quarter net profit up 40pct YoY

27 Oct 2008

State Bank of India, on impartial basis, has posted a net profit of Rs 2259.72 crore for the quarter ended Sep 30, 2008 against Rs 1611.42 crore in the same quarter of 2007. Interest earned stood at Rs 15566.50 crore alongside Rs 11616.28 crore earlier years. Interest expended was Rs 10111.15 crore beside Rs 7853.36 crore same quarters last year.

Consolidated Results

SBI reported, “The net profit of Rs 2378.19 crore for the quarter ended Sep 30, 2008 against Rs 2204.56 crore in the year ago quarter. Interest earned was Rs 22568.05 crore against Rs 17058.28 crore in 2007. Interest expended was Rs 15049.33 crore for the quarter ended Sep 30, 2008 beside Rs 11783.16 crore in 2007.”

State Bank, which has more than 10,000 branches across India and overseas, has the lowest cost of funds among the nation's lenders. The bulk of its funds come from savings bank deposits that cost about 3.5 pct in annual interest payments.

Asian Stocks, U.S. Futures Advance; Hong Kong's Hang Seng Jumps Asian stocks rose, snapping four days of declines, as investors speculated recent losses were overdone. U.S. stock index futures gained and the yen dropped. Hong Kong's Hang Seng Index rallied 11 percent, rebounding from its biggest decline in a decade, as HSBC Holdings Plc surged. Toyota Motor Corp. climbed 7.8 percent in Tokyo, where the Nikkei Nikkei 225 Stock Average closed yesterday at a 26-year low. Hynix Semiconductor Inc. surged 15 percent in Seoul, after South Korea's National Pension Service said it's buying stocks. The MSCI Asia Pacific Index added 3.1 percent to 77.55 as of 4:02 p.m. in Tokyo, erasing earlier losses of 2.8 percent. The measure slumped 19 percent in the previous four days, closing yesterday at the lowest since August 2003. Futures on the Standard & Poor's 500 Index gained 3.2 percent. ``We are beginning to see a lot of value emerging,'' said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion. ``On a fundamental basis, stocks are starting to look appealing for investors with a long- term horizon.'' The MSCI index has lost 51 percent this year on concern the widening financial crisis and slowing economic growth will hurt company profits. The measure now trades at less than 1 times book value, compared with the S&P 500's 1.6 times. Japan's Nikkei 225 Stock Average gained 6.4 percent. Finance Minister Shoichi Nakagawa said restrictions on short-selling of shares will take effect today to bolster the stock market. Mitsubishi UFJ Financial Group Inc. fell, limiting gains, after unveiling a plan to raise as much as 990 billion yen ($10.7 billion). Hong Kong Rally The yen dropped for the first time in six days against the dollar and dropped the most in almost eight years versus the euro as the rebound in stocks bolstered investor confidence in higher- yielding assets. Hong Kong's Hang Seng Index jumped 13 percent, the biggest gain since 1998 and ending a five-day, 28 percent plunge, after Financial Secretary John Tsang said the government will act to support the stock market if necessary.

SEBI allows creeping acquisition beyond 55 per cent The measure is expected to boost the market sentiment as promoters will be tempted to resort to creeping acquisition given the current depressed prices of their shares. Hiterto, creeping acquisition, the process through which promoters can increase their stake in the company by buying upto five per cent of the company's equity in a year, was allowed only till the promoters holding reached 55 per cent of the equity of the company. SEBI on Monday said as part of consolidation of holdings under Takeover Regulations, it would allow creeping acquisition beyond 55 per cent but upto 75 per cent via open market purchases in the normal segment. However, consolidation via bulk, block or negotiated deals or through preferential allotment would not be permitted. Besides, the market regulator has also said that henceforth promoters would not require permission if their holding in the company were to increase by five per cent in the event of a buyback of shares. "It has now been decided to automatically exempt increase/ consolidation upto 5 per cent per annum as a result of buy back by a company," a press note by SEBI said.

Indonesia Plans `Response Policy' to Boost Currency Indonesia's President Susilo Bambang Yudhoyono said the government will announce a ``response policy'' tonight to stem a slide in the nation's currency. The currency fell as much as 8.7 percent before recovering to trade down 0.9 percent at 11,050 against the dollar. ``We cannot always solve this through intervention,'' Yudhoyono told reporters in Jakarta today, referring to the central bank buying the local currency. ``If the decline is because of fundamental reasons, what we must solve is the fundamental reasons.''

Capital One, Key Among 19 Banks Getting $35 Billion At least 19 regional U.S. banks, including SunTrust Banks Inc. and Capital One Financial Corp., accepted $35 billion in government cash as the Treasury rolled out the second half of its $250 billion package to shore up lenders and thaw frozen credit markets. Treasury Secretary Henry Paulson is doling out cash to recapitalize struggling lenders and jump-start takeovers in an industry suffering from the worst housing crisis since the Great Depression. SunTrust, Capital One, KeyCorp and PNC Financial Services Group Inc. are among regional lenders that have agreed to take cash so far by selling preferred shares to the U.S. ``This is just unprecedented,'' said BMO Capital Markets analyst Peter Winter. ``What the government has said is that you can't let the financial system fail, and if this doesn't work they'll come up with another plan.'' The capital infusions come as governments worldwide do all they can to ensure the stability of banks. Kuwait's central bank said it will guarantee deposits at Gulf Bank KSC, which remains solvent after clients defaulted on currency derivatives contracts, the state-run Kuwait News Agency reported. Paulson already gave $125 billion to nine of the biggest U.S. lenders. Some banks are raising money on their own. Mitsubishi UFJ Financial Group Inc., the Japanese bank investing $9 billion in Morgan Stanley, said it will sell as much as 990 million yen ($10.7 billion) of stock to replenish its capital. Japan's biggest bank may sell as much as 600 billion yen of common shares in the 12 months starting Nov. 4.

JP Morgan invests $450mn of $1bn fund across sectors JP Morgan India, which plans to invest USD one billion across sectors in the country, has so far committed USD 450 million in real estate, infrastructure, manufacturing and financial sectors. "We have a fund of USD one billion to invest in Indian companies. We have committed nearly half the money in real estate, infrastructure, manufacturing and financial sectors," JP Morgan India CEO Kalpana Morparia told reporters. "These investments are opportunistic," she said, adding there was no time-frame for completing investments as the money belonged to the company itself. JP Morgan, which started operations in 2001 in India, has approached the Reserve Bank for licences to set up four more branches in the country. The branches would be in Delhi, Chennai, Bangalore and one more destination in the south, she said. Apart from its branch in Mumbai, the company presently also has back-offices in Mumbai and Bangalore with a headcount of 11,500. Notwithstanding the global financial crisis, JP Morgan will increase its headcount in India. "Headcount will grow," Morparia said. "JP Morgan is focused on increasing its footprint across corporate and investment banking, transaction banking and asset and wealth management segments in Asia," Morparia said. JP Morgan is a US-headquarted bank that has weathered the credit turmoil in its home country. Outside the US, JP Morgan does only corporate and investment banking business.

NTPC can only be a minority partner in setting up plants State-run NTPC Ltd can only be a minority stakeholder in a proposed venture with Nuclear Power Corp. of India Ltd, or NPCIL, to build nuclear power plants on safety and strategic considerations, government officials said. “NTPC will remain a minority partner. It is very clear that NPCIL will have to be in the driver’s seat due to fuel supply, safety and strategic considerations,” said Jairam Ramesh, minister of state for power and commerce. India’s Atomic Energy Commission, too, is of the view that NTPC can jointly set up nuclear power projects with NPCIL, where the latter will hold majority stake. Currently, only NPCIL, a public sector undertaking of the department of atomic energy, is mandated to set up such plants. NTPC’s chairman and managing director R.S Sharma declined to comment on the issue citing ongoing discussions, merely saying, “We will enter the (nuclear) sector.” Power secretary Anil Razdan, however, said, “NTPC will have to go as a minority partner for its nuclear joint venture. While NPCIL has huge experience in the nuclear sector, NTPC has vast experience in project management and generation.” The country’s largest power generation firm has been lobbying for a role bigger than that of an investor for its nuclear plans and aims to build two such projects of 2,000MW each. After the signing of the Indo-US nuclear deal, the atomic power sector is expected to be opened up to private and public sector firms. “As long as there is no exclusivity condition that prevents NTPC from independent development or other JVs, even being an investor will still be of some value to NTPC,” said Anish De, chief executive of Mercados Asia, an energy consulting firm. “However, given that private developers have been implicitly encouraged till now, a security threat perception from NTPC defies logic.” Private-sector firms such as Jindal Steel and Power Ltd, Tata Power Ltd, Vedanta Resources Plc. and Reliance Power Ltd have shown interest in building atomic power plants. Overseas nuclear power technology providers such as Alstom SA, Areva SA, Siemens AG and General Electric Co. are eyeing Indian orders estimated to be worth $14 billion (Rs70,000 crore). Out of India’s installed power generation capacity of at least 140,000MW, nuclear energy accounts for only 4,120MW. NPCIL plans to create additional generating capacity of 3,160MW by 2012. According to KPMG’s India Energy Outlook report, the department of atomic energy hopes to build 250,000MW nuclear capacity by 2050 to meet power requirements.

BHEL wins first commercial order Bharat Heavy Electricals Limited (BHEL) has won its first commercial order valued at Rs 1,474 crore for 660 MW Steam Turbine Generators from NTPC, with supercritical parameters against International Competitive Bidding (ICB). The order is for setting up the 2x660 mega watt steam turbine generator package at Barh Thermal Power Project Stage-II, located about 75 km from Patna in Bihar. The supercritical steam parameters for this project are higher than those for the other supercritical projects presently under installation by NTPC at Sipat and Barh Stage-I, resulting in higher efficiency. BHEL will design, engineer, manufacture, supply, erect and commission two Steam Turbine Generator sets of 660 MW each along with associated auxiliaries. The turbine generators will be manufactured by BHEL at its Haridwar works, while the company’s Hyderabad plant will supply the pumps and heaters. The construction of the plant will be undertaken by BHEL’s Power Sector — Eastern Region, Kolkata.

SEBI allows creeping acquisition beyond 55 per cent The measure is expected to boost the market sentiment as promoters will be tempted to resort to creeping acquisition given the current depressed prices of their shares. Hiterto, creeping acquisition, the process through which promoters can increase their stake in the company by buying upto five per cent of the company's equity in a year, was allowed only till the promoters holding reached 55 per cent of the equity of the company. SEBI on Monday said as part of consolidation of holdings under Takeover Regulations, it would allow creeping acquisition beyond 55 per cent but upto 75 per cent via open market purchases in the normal segment. However, consolidation via bulk, block or negotiated deals or through preferential allotment would not be permitted. Besides, the market regulator has also said that henceforth promoters would not require permission if their holding in the company were to increase by five per cent in the event of a buyback of shares. "It has now been decided to automatically exempt increase/ consolidation upto 5 per cent per annum as a result of buy back by a company," a press note by SEBI said.

Fear Vs Bear FED decided to cut interest rate to as low as 1% whereas the whole world is acting fast on Rate cut. India is the only country where no rate has been cut so far. How far they would delay is really a matter of debate but for sure there is no choice. In order to bring back the trailing economy back on growth path interest rates, repo rates as well as crr and slr need to be cut at very rapid pace. Yesterday market regulator has allowed creeping acquisition upto 75% instead of 55% yet the limit of 5% remains which means those who have done or would like to do can’t buy more than 5%. The selling by FII’s are more than 5% in some companies and hence this limit may not work positively across the board. It may help few large cap companies like Tisco where promoters want to raise their stake beyond 55%. More actions are required on margin fronts. When the markets were going strong at 20000 the margins were raised to as high as 60% on long positions. Similarly when markets are falling and if you do not want to stop short selling then at least the margins on short positions should be 60% or more or even 100% which will deter shorts to a great extent. Today I heard few experts sharing their views on a live wire channel. One of the fund managers threw a very sarcastic comment on the host questioning his deliberate attempts of fear some bearish presentations. The host smiled and replied that it is his job to do so and if something good is required to be said then it is the job of the F M. Well, everybody knows that we all are going through very difficult time which is historically unprecedented and has happened only after 1929. But there is no point in creating more fear in already frightened small investors. It is true that there will be only one bear for every 999 bull and hence the bear phase will help only 1 out of 1000 people. It is also true that bears must be the happiest lot now. But the time can’t always remain same. We are 8000 where the 09 pe is just at 8 and hence where little head room for seeing downside on fundamentals. Off course fundamentals will not work till the time markets are governed by awesome fear, rumours spread by bears and the uncertainty with regard to global stability. The package of U S Govt could start showing impact from 1st week of Nov. Mr Bush who could be responsible for the US collapse through oil mismanagement and financial turmoil is set to be out from action from 4th Nov 2008. I firmly believe that oil will not fall below 50 usd and graph of consumption will start from that point of time. China which has halted consuming metal purposefully will start its consumption very soon as the prices have cooled off substantially. Non profitable units will close down, stronger one have already cut production which will get adjusted to the excess inventory very soon which will bring back reversal in commodity very soon. In short, the bear tamasha will come to end abruptly with all global governments have decided to act fast to arrest the recession. I wish Indian Govt too should act faster instead of taking peace meal approach. We have potential to recover much faster than the global economies. Europe has gone on record saying that India can do a major role in global economic recovery. All the best once again on this auspicious occasion of Dipawali.

Sensex cuts sharp early losses in choppy trade; ends above 8,500 level

Key benchmark indices witnessed sharp intra-day pullback in second half of the day's trading session helped by short covering of derivative positions ahead of the expiry on Wednesday, 29 October 2008, after plunging to over 3-year low in the first half spooked by weak global equities. Volatility was the hallmark of the day's trading session. The market breadth was weak. The opening volatility on the bourses followed the slump in Asian markets to five-year lows, following the poor showing by the US markets overnight on concerns of looming US recession worries and global economic slowdown decelerating corporate earnings growth. Key benchmark indices in China, Hong Kong, South Korea, Taiwan, and Japan slipped between 0.80% and 6.36% today, 27 October 2008. European markets were not spared from the global bloodbath either as indices in France, Germany and UK fell between 3.16% to 6.31%. The Dow Jones industrial average futures were down about 200 points today, 24 October 2008. S&P 500 and Nasdaq 100 futures also fell sharply as turmoil gripped markets around the world. Futures measure current index values against perceived future performance and give an indication of how markets may open when trading begins in New York. The BSE 30-share Sensex declined 180.49 points, or 2.07%, to provisionally close at 8,520.58, after slumping 1,003.68 points to 7,697.39 in afternoon trade, its lowest since 28 October 2005. At the day’s high of 8,739.48 hit in early trade, the Sensex rose 38.41 points. The Sensex had opened 112.21 points lower at 8,588.86. The S&P CNX Nifty lost 51.60 points, or 2%, to 2,532.40 as per the provisional figures, after tanking to a low of 2252.75, its lowest since 22 July 2005. The market breadth, indicating the overall health of the market, was weak with 1,996 shares declining compared with just 538 that rose. 41 shares remained unchanged. The volatility is attributed to the expiry of the derivative contracts for October 2008 series on Wednesday, 29 October 2008. As per reports, marketwide rollover of positions was 37%, while that of Nifty stood at 45% from the October 2008 series to November 2007, by Friday, 24 October 2008. The rollovers are fairly high, indicating market players are uncertain about the direction of the market. Among the 30-member Sensex pack, 21 declined while the rest gainer. Mahindra & Mahindra (down 15.67% to Rs 241.80), Tata Motors (down 13.73% to Rs 1404.40), Grasim Industries (down 10.2% to Rs 946) were the key losers from the Sensex pack. India’s largest state-run bank by net profit State Bank of India (SBI) fell 9.2% to Rs 1050 on muted growth in consolidated net profit in Q2 September 2008. In its results declared before market hours today, 27 October 2008, SBI reported a 10.60% rise in consolidated net profit to Rs 2378.19 crore on a 26.4% increase in total income to Rs 27083.47 crore in Q2 September 2008 over Q2 September 2007. The consolidated earnings include numbers from recently acquired State Bank of Saurashtra. India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) jumped 6.25% to Rs 1,079, making a strong recovery from day’s low of Rs 930 . RIL’s net profit rose 7.4% to Rs 4122 crore on 39.8% growth in sales to Rs 44787 crore in Q2 September 2008 over Q2 September 2007, the company said after market hours on Thursday, 23 October 2008. Select Sensex stocks reversed early losses. India's second largest IT exporter by sales Infosys was rose 0.3% to Rs 1252.50 after hitting an intra-day low of Rs 1,161. Sterlite Industries rose 1.49% to Rs 211.45 off from day’s low of Rs 164.50. India’s largest private sector bank by net profit ICICI Bank rose 1.61% to Rs 315 after declining to low of Rs 282.15. India’s largest telecom services provider by market share Reliance Communications surged 6.33% to Rs 205.65 off day’s low of Rs 148.60. Bharti Airtel, India’s largest telecom services provider by market share jumped 10.17% to Rs 588.80, off day’s low of Rs 484. Reliance Infrastructure rose 5.13% to Rs 401, recovering from low of Rs 354. India's third largest IT exporter by sales Satyam Computer Services rose 2.28% to Rs 293.40 off day’s low of Rs 240.25. Its ADR slid 6.9% in US on Friday. India's fourth largest IT exporter by sales Wipro tumbled 6.4% to Rs 220.10 off day’s low of Rs 181.70. Its ADR shed 9.6% on Friday in US. India’s second largest power generation company in terms of net profit Tata Power Company slumped 8.75% to Rs 570.25 ahead of its Q2 results today, 27 October 2008. BSE Realty index rose 4.25% and was the major gainer from the sectoral indices on BSE. Realty majors, Indiabulls Real Estate, Unitech rose between 15.07% to 41.86%. However, India’s largest real estate player by market capitalization DLF fell 2.84% to Rs 198.10 off day’s low of Rs 158. Central banks across the globe are likely to launch new coordinated emergency action this week to calm panic in financial markets. Reports indicate the US Federal Reserve is widely expected to announce a 50 basis-point cut in overnight rates on Wednesday, 29 October 2008 that would take them to 1%, the lowest level since June 2004, with some expecting an even deeper reduction to 0.75%. The US markets had declined in volatile trade on Friday, 24 October 2008, as fears of a full-blown global recession intensified and investors dumped risky assets. The Dow Jones Industrial Average plunged 312.30 points, or 3.59%, to 8,378.95. The S&P 500 index slipped 31.34 points, or 3.45%, to 876.77, and the Nasdaq Composite index lost 51.88 points, or 3.23%, to 1,552.03. Back home, markets suffered a severe setback on Friday 24 October 2008, plunging to three-year lows mirroring weak global equities on worries about a sharp global economic slowdown and disappointment from the second quarter monetary policy review of the Reserve Bank of India. The BSE 30-share Sensex plunged 1070.63 points, or 10.96%, to 8,701.07, recording its biggest fall in percentage terms since May 2004 and the S&P CNX Nifty was down 359.50 points or 12.2% to 2,584. Crude oil was little changed in New York near a 16-month low amid expectations that OPEC's decision to cut production will start to bring supply back in line with demand that is being curbed by the global financial crisis. Crude oil for December delivery was at $US63.93 a barrel down 22 cents, in after-hours electronic trading on the New York Mercantile Exchange today. The Indian currency continued its downward march and plunged to 50.05 against the greenback in early trade on Monday