Sensex ends up 134pts

The markets have slipped in late-noon trades. The Sensex is now quoting at 17462, higher by 118 points and the Nifty is at 5200, up 31 points. Jaiprakash Associates (stronger by Rs 4 or 3.4% at Rs 147), SBI (higher by Rs 42 or 1.9% at Rs 2267) and Bhel (up Rs 37 or 1.5% at Rs 2398) are the leading Sensex gainers. NTPC, which touched a 52-week high this morning, has given up some of its gains and is now merely 1% up. DLF (weakened by Rs 3 or 0.8% to Rs 362) and Maruti (dropped by Rs 9 or 0.6% at Rs 1560) are the major losers. Reliance Infrastructure is trading flat, with a negative bias, consolidating its recent gains. The market breadth is strong. Out of 2935 stocks traded on the BSE, there are 1732 advancing stocks as against 1121 declines.

RBI restricts FII limit in UB Holdings to 25.65%

United Breweries (Holdings) Limited has said that Reserve Bank of India (RBI) has approved its proposal for revision of the FII limit in the company from 26 per cent to 23.25 per cent. RBI has also advised the company to fix the intermediary limit and monitor it. Presently, the FII holding in UB (Holdings) is 24.65 per cent. It is proposed that the FII holding be restricted to 24.65 per cent and it should not drop below 23.25 per cent, the company informed the National Stock Exchange today.

Orchid Chemicals buys bonds worth $19.77 mn

Orchid Chemicals & Pharmaceuticals has purchased bonds at an aggregrate face value of $19.77 million (around Rs 90 crore), the company said in a filing to the National Stock Exchange (NSE). Earlier this month the company had said that it is exploring opportunities for the buyback of its outstanding foreign currency convertible bonds (FCCBs). Currently, the firm has a debt of about Rs 1,200 crore, besides a liability of $155 million in FCCBs, which would mature in 2012. The company also has a tax liability of $20 million.

Sensex to enter silver jubilee year

The BSE Sensex, the barometer of stock market, is all set to enter its silver jubilee year. The 30 scrip index was launched by the Bombay Stock Exchange on January 2, 1986 with 1978/79 as the base year. It had closed that day at 549.43. A booklet on the sensex released by the Exchange giving reasons for compiling the index had said, "the absence of an index number of equity prices to reflect the general trend of the market was felt for a long time by investors and also by newspapers who do not compile their own index numbers. With this end in view, the exchange started compiling and publishing a sensitive index number of share prices from January 2, 1986." Referring to the base year, the exchange said it was due to stability of shares prices and its proximity to the current period (launch date) prompted it to choose 1978\79 as the base year. It was earlier called as 'sensitive index' but later some analysts started referring to it as 'sensex' and it has become popular by that name. The sensex which will be entering the 25th year on January 2, 2010 has come a long way and so also the Indian market and the economy. The composition of the index has undergone change many times. Only 11 of the original 30 companies continue to be part of the sensex. The companies that were part of the sensex on January 2, 1986 were ACC, Ballarpur Industries, Century Spg, Bombay Dyeing, Reliance, Gwalior Rayon (Grasim), Indian Rayon, Great Eastern Shipping, Siemens, Peico Electronics (Philips), Tata Power, Tata Steel, Hindustan Aluminium, Tata Engineering (Tata Motors), L&T, Kirloskar Cummins, Premier Automobiles, Hindustan Motors, Mahindra & Mahindra, Mukand Iron, Zenith, Gujarat State Fertilisers, Indian Organic, Hindustan Lever, Glaxo, Food Specialities (Nestle), Ceat Tyres, Voltas, Indian Hotels and ITC.

3G auction to be held by mid-Feb

The government is planning to auction third-generation wireless radio spectrum by mid-February, about a month later than had been scheduled, a senior government official told . "January 25 will be the last date for applications. Auctions would start around Feb 10-12," the official, who did not want to be named, said, adding that the new schedule should be released later in the day. The auction, which would allow mobile firms to offer high speed Internet services on phones, has been deferred several times before. The auction had been due to start from Jan. 14. The telecoms minister said last week that schedule would be met, but the government is yet to seek applications. Analysts expect phone companies to spend between $1-$1.5 billion on all-India 3G spectrum, while building the high-speed networks will cost billions of dollars more.

NHPC signs agreement with Royal Govt of Bhutan

NHPC Ltd has announced that the Agreement for the preparation of DPRs for Chamkharchhu-I (670MW) and Kuri-Gongri (1800 MW) HE Projects in Bhutari with a cost of Rs220mn and Rs270mn respectively were signed on December 22, 2009 between Company and Royal Government of Bhutan at New Delhi.

L&T secures order worth Rs 580 c

Engineering and construction group Larsen and Toubro secured orders worth Rs 581 crore from Powergen Infrastructure and Bangalore Water Supply and Sewerage Board (BWSSB) during the third quarter of 2009-10. These projects will be executed by the metallurgical, material handling and water operating company of L&T’s construction division. The contract from Powergen Infrastructure is for setting up a coal handling plant in Maharashtra. This greenfield project, to be set up in 30 months, was secured against international competitive bidding, said the company in its filing to the Bombay Stock Exchange. The contract secured from BWSSB will be completed in 24 months, involves laying pipeline from Harohalli to Tataguni and Vajarahalli, along with associated civil work.

Primary articles inflation at 15.49%

Primary articles inflation at 15.49% for week ended December 19 versus 14.66% week ago

Government to split NALCO in three

Shares of public listed NALCO shot up that the government plans to split the company into NALCO Aluminium, NALCO Power and NALCO International at an opportune time. According to the government, NALCO will aim at revenues of Rs 25,400 crore by FY 2020 and Rs 5440 crore annual net profit by FY20. The company will also be aiming to sell at 1000 MW power by 2016. While speaking to, B L Bagra, Director, Finance, NALCO, said that the demerger plan is part of company’s 2020 vision and will take 2-4 years. The power and other metal companies will increase the turnover by 30-40 per cent. NALCO International will be an investment vehicle.

Mukherjee: Need to balance growth, fiscal deficit

India needs to strike a balance between economic growth and cutting fiscal deficit, Finance Minister Pranab Mukherjee said on Wednesday. India's fiscal deficit is estimated at 6.8 percent of gross domestic product for 2009/10 (April-March), higher than 6.2 percent in the previous year as the government cut tax rates and boosted spending. The economy grew 6.7 percent in 2008/09, slower than 9 percent or more in the previous three years.

Fuel shortage continues to haunt thermal power projects

Coal shortage continued to hit the power sector as 11 electricity generation projects received less dry fuel in November. Power projects in the western and the eastern belt were the worst sufferers of insufficient supply of the fuel leading to critical coal stock position at the generating stations, as per the data by the Central Electricity Authority (CEA). The 1,200-MW Pathadi project in Chhattisgarh, the 1,470-MW Wanakbori project (Gujarat), the 1,980 MW Koradi Dhanu project (Maharashtra) and Amarkantak (MP) in the Western region witnessed critical coal stocks (reserves for less than 7 days) in November, the data said. Patratu (840 MW), Tenughat (420 MW) in Jharkhand, Bandel (530 MW), DPL, Kolaghat (420 MW) in West Bengal and Obra (UP) in North India had less than a week's stock of coal last month. "Less receipt of coal is mainly due to supply constraints," a senior CEA official said but could not explain the reasons for critical coal stock position at all the four thermal power plants in the Southern region.

Bharti Airtel moves to close deal with Dhaka telecom

Telecom major Bharti Airtel is close to acquiring a majority stake in the Bangladesh operations of Warid Telecom, with officials of both companies meeting key officials to wrap up the deal, . The Indian company is looking at buying a 70 per cent stake in Warid and has received a favourable response from the Bangladeshi firm's promoters -- the Abu Dhabi group -- who are here to thrash out the deal. "A memorandum of understanding (MoU) could be signed between the companies during the visit," the daily quoted a Warid Telecom official as saying. The MoU is the primary step before signing the final deal between the companies to share confidential business strategies. In a related development, chairman and group chief executive officer of Bharti Enterprises Sunil Bharti Mittal called on Bangladesh telecom minister Rajiuddin Ahmed Raju at his office Tuesday. Both Bharti Airtel and the Abu Dhabi group, which has diversified business interests in Pakistan, Bangladesh, Iran, Uganda, Congo and West Asia, have sought the approval of Bangladesh Telecommunication Regulatory Commission (BTRC), the country's sectoral watchdog. BTRC has asked for some details from the companies such as Airtel's investment plans in Bangladesh, and the approvals of the two companies' board of directors. BTRC also asked the two firms to clarify how Warid Telecom would clear its liabilities, including bank loans, after the stake sale. "BTRC has asked the companies to submit these documents before signing the deal," said The Daily Star quoting the commission chairman Zia Ahmed. Bharti Airtel has placed a $300-million initial investment plan to BTRC, which will be implemented after signing the deal. According to The Daily Star, Bangladesh telecom secretary Sunil Kanti Bosh has confirmed that Airtel would invest in Bangladesh. Bosh said the company wanted to develop the voice market in Bangladesh and planned to provide telecom services between that country and India at affordable rates. SingTel, Vodafone and Etisalat have also approached Warid to form a partnership in Bangladesh. Incidentally, another Indian telecom operator, Essar Group, acquired a majority share in Warid's operations in Uganda and Congo for $318 million. Warid entered Bangladesh as its sixth mobile operator in May 2007 and has 2.79 million subscribers.

India cautions against hasty withdrawal of stimulus packages

India has cautioned against immediate withdrawal of stimulus packages by the governments as it may lead to "collapse" of the world economy. "Immediately coming out of the stimulus package... Exit policy may not be the correct approach because in that case if the world economy collapses the depression would be deeper," Finance Minister Pranab Mukherjee said today at a Corporation Bank function while recalling his interactions with Japanese Prime Minister Yukio Hatoyama yesterday. Later, when asked if he was hinting at gradual withdrawal of stimulus packages, Mukherjee said, "I am not hinting at anything. What I told (Japanese Prime Minister) was that we shall have to strike a balance between the requirement of the economy and the capacity of the economy to bear this level of fiscal deficit and borrowing." The Finance Minister said that he has told Japanese Prime Minister that countries have spent huge amount of money in stimulus packages to help the economies which has resulted in high fiscal deficit in almost every country and also greater borrowing which have propensity to leave little resources to the private sector. On the Indian economy, he said that stimulus packages are projected to widen the fiscal deficit to 6.8 of the gross domestic product this fiscal. He reiterated that this kind of fiscal deficit cannot be sustained for a longer period.

HDIL secures closure of Rs 400 cr debentures

Mumbai-based India's third largest real estate developer, Housing Development and Infrastructure (HDIL) has achieved the closure of its first tranche of secured redeemable non-convertible debentures to the tune of Rs 400 crore. "The company has received application and subscription for 4,000 secured redeemable and non convertible debentures of Rs 10,00,000 each aggregating to Rs 400 crore", the company said in a statement sent to the National Stock Exchange. HDIL will be raising a total of Rs 1,150 crore through the issue of 11,500 secured redeemable NCDs in separate tranches and will be listed on the Bombay Stock Exchange.

ICICI sees 2010 infrastructure growth

Infrastructure, telecoms and health are expected to be among growth sectors for the economy next year, ICICI Bank Ltd Chief Executive Chanda Kochhar said in an interview published on Tuesday. India's three-year investment of about $250 billion for industrial and infrastructure development will be a "growth multiplier", she told business daily Il Sole 24 Ore. "In terms of organic growth, cement, steel and everything involved in infrastructure looks good, from power plants to highways," Kocchar said. "In terms of inorganic growth, the spectrum is very broad. The first things that come to mind are health and telecommunications." She said rural India was the next factor for growth by private banks such as ICICI, India's No.2 lender. "But new banking methods are needed to lower the cost per transaction. I am thinking of biometric smart cards and mobile phones."

RBI says focus on managing inflation, growth

The focus of India's monetary policy is shifting to managing recovery and containing inflation from one concentrated on fostering growth after the global downturn, a deputy governor at the Reserve Bank of India said. "The near-term policy challenges are clearly conditioned by the evolving growth-inflation outcome that supports shifting the balance of policy focus on managing the recovery and on containment of inflation," Shyamala Gopinath said in a speech delivered in Bangalore on Monday. The Reserve Bank released her speech on Tuesday. The comments, which reinforced market expectations of monetary tightening in January, pushed the 10-year benchmark bond yield up 3 basis points to 7.67 percent. It had closed at 7.68 percent on Thursday. Financial markets were closed on Friday and Monday for holidays. "Surely they will tighten policy, but the question is whether they will due it before the January policy or at policy," said Piyush Wadhwa, senior vice president at ICICI Securities Primary Dealership. The next scheduled policy review is on Jan. 29, but the central bank can change policy at any time. Gopinath's comments follow those from fellow Deputy Governor Subir Gokarn on Thursday, who said the January policy review would focus both on growth and inflation, instead of the previous policy focus on growth. Most economists polled by Reuters early this month expected the Reserve Bank to raise banks' cash reserve ratio or the proportion of deposits that banks' must set aside with it as cash by the end of January.

No interest rate hike likely in six months: SBI

The country's largest lender, State Bank of India, has said that there will be no hike in lending rates in the next six months as there is surplus liquidity in the market. Despite inflationary pressure, there will be no increase in the interest rate on loan in the next six months because of surplus liquidity in the market and rising deposits, SBI Chairman O P Bhatt told reporters here last night. Bhatt said that there is a good amount of liquidity in the market and credit offtake is slowly picking up. Referring to the ongoing merger process of SBI associate banks, Bhatt said SBI is a major stakeholder in SBI associate banks like State Bank of Saurashtra and State Bank of Indore. "In fact, we did not have less than 75 per cent stake in any of these banks and owned 100 per cent in State Bank of Hyderabad and State Bank of Patiala which were with us for the last 50 to 60 years," he said. State Bank of Saurashtra has already merged while process was on in regard to State Bank of Indore, Bhatt said. The merger would improve SBI in terms of efficiency in operation, release of capital, economies of scale and avoiding waste and duplication. "More importantly, we are getting good quality people," he said. However, the merger process, he said, should not be viewed in terms of benefit as it was a process of restructuring within a family

ONGC strikes new gas well in Tripura

Oil and Natural Gas Corporation Limited (ONGC), has struck a new gas well at Sundaribari in South Tripura district, about 125 km from here, official sources said. "Preliminary examination shows that the low resistivity sand perforated in the interval of 2164-68 metre produced gas at the rate of 160,000 million cubic metre per day," officials said. "The gas reserve is huge and the new discovery would form a considerable reserve base of hydrocarbon which would also cater to the needs of supplying gas to the 740 MW gas-based thermal plant at Palatan in South Tripura district. The thermal project would be completed by 2012, sources said. The Tripura Asset of ONGC has set a target of 60 lakh cubic metres of gas production per day which would be completed by three phases and Rs 1,946.22 crore has already been sanctioned by ONGC board for the first phase to be completed by 2011-12, the officials said.

Rise in food prices strengthen case for RBI action

Food prices rose nearly 19 percent annually in mid-December, reinforcing the case for the Reserve Bank of India (RBI) to withdraw excess liquidity in January to stem inflationary expectations. Food prices have been surging after the driest spell in nearly four decades and flooding in some parts of the country hurt crops and pushed up food prices. Government data showed on Thursday that food prices rose 18.65 percent in the year to Dec. 12, slightly lower than the 19.95 percent annual rise a week earlier. "Even though the current food inflation is due to supply side shocks, it will spill over to other sectors. In that scenario, monetary measures are important to stem inflationary expectation," said N.R. Bhanumurthy, an economist with the National Institute of Public Finance and Policy. "A hike in cash reserve ratio (CRR) will make sense. We expect it to be raised by 50 basis points by January policy," he said. The benchmark 10-year bond yield was steady at 7.71 percent after the data. The fuel index rose an annual 3.95 percent in the 12 months to Dec. 12, as the statistical aberrations caused due to price spikes of 2008 faded out. Monthly price data for November showed manufacturing prices rose an annual 4 percent, a sign a growing economic recovery is allowing firms to pass on higher costs.

Nov infrastructure output up 5.3 pct y/y - min

India's infrastructure sector grew an annual 5.3 percent in November, Trade Minister Anand Sharma said on Thursday. Infrastructure sector output grew 3.5 percent in October from a year earlier. The sector accounts for 26.7 percent of India's industrial output.