Reliance Power soars post merger announcement

The Reliance Power scrip gained 3.5 percent Monday, a day after the Anil Dhirubhai Ambani Group (ADAG) announced that another group firm, Anil Dhirubhai Ambani Group was merging with the company. The boards of the two ADAG energy firms — one in the business of generating power and the other that trades and transports oil and gas — Sunday approved the merger plan in a $11-billion all-stock deal, which involves a swap of four shares of Reliance Natural Resources for every Reliance Power stock. The Reliance Power stock, which touched its intra-day high soon after the opening bell, rising to Rs.189.80, 8.36 percent higher than its previous close at Rs.175.15, before settling down at Rs.177.95 in afternoon trade. The Reliance Natural Resources, which had closed Friday at Rs.63.65, tumbled 27.26 percent to Rs.46.30 to come to parity with the price following the 4:1 stock swap agreement. It had slipped to an intra-day low of Rs.45.80, down 28.51 percent from its previous close. An equities analyst with a top brokerage firm said at Reliance Power’s trading price range of Rs.175-180, the Reliance Natural Resources scrip would be valued around Rs.44-45. ADAG has said the deal would bring “substantial benefits” to the shareholders of both the companies. Meanwhile, Reliance Power Chief Executive J.P. Chalasani told a television channel that the merger “assures gas supply to Reliance Power” as Reliance Natural has finalised a gas supply agreement with Mukesh Ambani-controlled Reliance Industries. Chalasani said the merger is likely to be concluded in 90 days.

Ford India to export Figo to Asia-Pacific markets

Ford India, the Indian arm of American car maker Ford Motor Company, will be shipping out its new small car Figo to markets in the Asia-Pacific region in addition to South Africa, a top company official said Monday. “We will be exporting to markets in the Asia Pacific region from India, which is the global hub for Figo. Currently, we have confirmed orders for 5,000 Figos and new overseas markets will be announced soon,” Michael Boneham, president and managing director, told reporters here. Ford India also exports another model Fiesta and engines from its Maraimalai Nagar plant near here. “We will be exporting around 3,000 Fiestas this year. We will be shipping out around 2,500 engines per month to Thailand,” Boneham added after flagging off a consignment of 1,200 Figos to South Africa. He said the 1.4 litre petrol and diesel engine Figos will be sold through 123 dealerships in South Africa. On the domestic front owing to the increased demand for its Figo launched four months ago (orders booked 24,000 units) Ford India has started second shift at its plant thereby getting a production capacity of 140,000 vehicles. He said during the first quarter of the current fiscal the company has sold 22,858 units and last month Ford India sold 7,269 units. According to him, the company sells around 300 Ikon models per month in semi-urban and rural areas and 1,000 Fiestas nationwide. Asked about the ensuing competition from Nissan Motor India’s Micra model, he said: “We did compare the features – size, interior space and other things- and found Figo is better. The Micra threat depends on its pricing.” The Ford India’s plant near here has a capacity to roll out 200,000 cars and 250,000 engines per year.

Sharma to hold trade talks with Malaysia and Singapore

Commerce Minister Anand Sharma will hold talks with his counterparts in Malyasia and Singapore aimed at enhancing trade during a four-day visit to the two countries starting Tuesday. Sharma will be leading a delegation of nearly 100 Indian business leaders, including Fortis group chairman Malvinder Singh, Larsen and Toubro chairman A.M. Naik and GMR Urban and Transport and Infrastructure Group chairman Srinivas Bommidala. While in Malaysia, Sharma will meet the ministers of international trade and industry Datuk Mustapa Mohamed, and minister of transport Datuk Sri Kong Cho and minister of foreign affairs Dato’ Sri Anifah Aman. He will also call on the Prime Minister of Malaysia. He will also address a meeting organised jointly by the Confederation of Indian Industry, the Malaysia-India Business Council (MIBC) and Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI). The main items India exports to Malaysia are copper, aluminium and zink, meat products, chemicals and petroleum products while major items of imports from Malaysia are crude petroleum, chemicals, palm oil and electronic products. Trade between India and Malaysia has grown from $2.94 billion in 2003-04 to $10.60 billion in 2008-09. On July 8, Sharma will meet with Lim Hng Kiang, Singapore’s minister for trade and industry and foreign minister George Yeo. He will also address a session on India-Singapore trade and economic cooperation and give a public lecture on “Resurgence of Asia in 21st century”. During 2008-09, India’s exports to Singapore amounted to US $8.45 billion and imports stood at US $7.65 billion. The major items India exports to Singapore are transport equipment and gems and jewellery. The main items it imports from Singapore are electronic goods and organic chemicals.

Sensex moves up after initial slip

A benchmark index for Indian equities Tuesday crawled into the green after a weak opening and was ruling 54 points higher than its previous close, about 30 minutes into trade. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,402.68 points, was ruling at 17,496.15 points, 54.71 points or 0.31 percent up from its previous close at 17,441.44 points. At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty was ruling at 5,249.35 points, up 0.26 percent from its previous close. Broader markets indices were also in the positive, with the BSE midcap index ruling 0.4 percent higher and the BSE smallcap index up a similar quantum.

Sensex extends gains, IT stocks shine

A benchmark index for Indian equities Tuesday extended its morning gains and was up 109 points, helped by buy-ins in IT stocks and heavyweight Reliance Industries, as investors turned bullish with the revival of the monsoon. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,402.68 points, was ruling at 17,550.65 points, 109.21 points or 0.63 percent up from its previous close at 17,441.44 points. At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty was ruling at 5,269.25 points, up 0.64 percent from its previous close at 5,235.9 points. Broader markets indices were also in the positive, with the BSE midcap index ruling 0.58 percent higher and the BSE smallcap index up 0.6 percent. The meteorological department Monday said the monsoon had revived and covered all parts of the country. IT, metals, telecom and banking stocks saw most of the buying and all the 13 sectoral indices on the BSE were in the green. The market breadth was positive, with 1,600 scrips advancing, compared to 1,140 stocks declining, and 106 remaining unchanged. Asian markets were holding on to modest gains amidst fears of a slowdown in China and feeble growth in the U.S. The Japanese Nikkei was ruling 0.77 percent up at 9,338.04 points, while the South Korean Kospi closed 0.57 percent up at 1,684.94 points. Hong Kong’s Hang Seng was sluggish at 19,903.69 points, up 0.31 percent. However, the Chinese Shanghai Composite index rose 1.92 percent at 2,409.42 points, helped by sharp gains in the recently battered banking stocks.

Euro debt crisis to hit global IT spending: Gartner

The European sovereign debt crisis and a weaker euro will impact worldwide IT spending in 2010, technology research and advisory firm Gartner said in a revised study on trends in the global tech industry.“The European sovereign debt crisis is having an impact on the outlook for IT spending, which is projected to grow 3.9 percent in 2010 to $3.35 trillion as against $3.23 trillion in a recession-hit 2009,” Gartner research vice president Richard Gordon said in a report released this week. The devaluation of the euro against the US dollar since January has also forced Gartner to lower its outlook for global IT spending from 5.3 percent it projected in the first quarter (January-March) of this year. “The dollar has strengthened against the euro during the second quarter (April-June) and the trend is likely to continue in the second half of 2010, putting downward pressure on dollar-denominated IT spending growth,” Gordon noted.Though an appreciating dollar will dampen the overall growth in software, IT services and telecom this year, the study forecast that spending will turn positive in all the three segments from a de-growth in 2009 when budgets for discretionary spending were frozen. Spending in software will grow 3.1 percent to $229 billion in 2010 from -2.6 percent or $224 billion in 2009.Similarly, IT services will grow 2.9 percent to $786 billion from -5.3 percent or $763 billon and telecom 3.4 percent to $1.97 trillion from -3.5 percent or $1.91 trillion.Spending on computing hardware, however, will witness robust growth of 9.1 percent this year to $364 billion as against a negative growth of 12.4 percent or $334 billion in 2009. “The computing hardware sector continues to benefit from a healthy PC (personal computer) sector, which accounts for two-thirds of total IT spending. Shipments are expected to remain robust till 2011,” Gordon asserted.The study also predicted that consumer shipments will be powered by strong mobile PC uptake while commercial shipments will be buoyed by a replacement cycle and migration to Window 7. While Gartner’s revised forecast reflects a stable global economic outlook, IT spending will be vulnerable to shocks in key regions like Europe and in industrial sectors where decisions will be determined by the return on investments.“Chief executives (CEOs) hope for a return to growth this year as their financial executives (CFOs) expect increased spending. But information executives (CIOs) see marginal increase in budgets limiting discretionary spending,” Gordon said. In the European context, the study calls for an effective policy response to stimulate investment in general and in IT particular, as private sector activity will be hindered by the impact of the austerity measures on key government suppliers and the ripple effect.“Longer term, public sector spending will be curtailed across Europe as governments struggle to trim budget deficits in five years and reduce debt over a decade,” Gordon added.

US car companies lead by percentage, Asians by volume

Powered by their small cars, the two American car makers, Ford India and General Motors India, have logged triple digit sales growth in June, compared to the same month in 2009.While Ford India’s sales went up by 267 percent at 7,269 units, compared to 1,982 units sold in June 2009, General Motors sold 9,539 units, an increase of 112 percent over 4,492 units it sold in June last year. Ford India’s sales growth is primarily driven by its new model Figo, though the company did not provide a model-wise sales break up. The other models sold by Ford India are Ikon, Fiesta and Endeavour.The company has booked orders for more than 24,000 Figos in the first four months of its launch. With a wider product portfolio, General Motors’ June sales comprised Beat (3,415 units), Spark (2,911 units), Cruze (773 units), Tavera (1,423 units), Aveo (398 units), Aveo U-VA (387 units), Captiva (139 units) and 93 units of Optra.On the other hand, Asian majors Maruti Suzuki, Hyundai Motor India and Tata Motors logged handsome growth but in double digits owing to their large base numbers compared to the two American companies. India’s leading car maker Maurti Suzuki logged 17.3 percent sales growth last month, selling 88,091 units. Exports during the month grew 14.6 percent to 15,279 units.Segment wise sales numbers for Maruti Suzuki for last month are: A2 (Alto, Wagon-R, Zen, Swift, Ritz and A-Star) 51,418 units; A3 (SX4 and D’Zire) 8,081 units; C segment (Omni, Versa and Eeco) 9,914 units. Hyundai Motor India reported an overall, including exports, two percent fall in sales. On the domestic sales front, the company has logged 18.9 percent growth, selling 27,366 units last month.Exports declined 22.1 percent at 18,888 units from 24,250 units in June last year.“The domestic market continues to show a steady growth but the exports have slowed down especially in the EU countries in the absence of any fresh incentives from the respective governments there,” said Arvind Saxena, Director (Marketing and Sales). The segment-wise cumulative sales for last month for Hyundai Motor are as follows: A2 segment (Santro, i10, Getz and i20) 42,099 units; A3 Segment (Accent, Verna) 4,137 units; A5 segment (Sonata Transform) 18 units. The home grown Tata Motors’ passenger vehicles business reported a total sale and distribution offtake of 29,948 units (27,811 Tata and 2,137 Fiat) in the domestic market in June 2010, a 53 percent increase compared to 19,513 units (17,039 Tata and 2,474 Fiat) in the corresponding month last year. The company sold 7,704 units of Nano. Sales of Indica range stood at 9,003 units showing 12 percent dip over 2009 June figures. The Indigo range recorded sales of 7,502 units, a growth of 113 percent over June last year. The Sumo/Safari range logged 9 percent sales growth last month selling 3,602 units.

Andhra sets IT exports target of Rs.70,000 crore by 2015

The Andhra Pradesh government Thursday unveiled its new information technology and communications (ICT) policy, setting an export target of Rs.70,000 crore ($15 billion) by 2015 and offering sops for small and medium enterprises (SMEs). The ICT policy 2010-15 has projected 17 percent annual growth rate in IT exports. The IT exports, which were Rs.32,500 crore ($6200 million) are expected to reach Rs.70,000 crore ($15 billion) by 2015. The policy, approved by the state cabinet here, also aims to create 125,000 direct and 500,000 indirect jobs in the sector over the next five years. Andhra Pradesh currently accounts for 15 percent of the total IT exports from India and ranks fourth after Karnataka, Maharashtra and Tamil Nadu. In a major initiative aimed at promoting SMEs, the government will set up towers in notified IT special economic zones (SEZs)and make it compulsory for major companies to outsource 10 to 20 percent of the government projects to SMEs. Defining startups as companies with 0-5 years of operating history, 0-50 employees and turnover upto Rs.50 lakhs, the government has offered the SMEs several incentives, including 100 percent reimbursement of stamp duty, transfer duty and registration on sale/lease deeds and 25 percent subsidy on lease rentals upto Rs.5 lakh per annum maximum upto a period of three years in STPI/SEZ. IT Minister Venkat Reddy told reporters that startups would also get assistance of Rs.2.5 lakh for recruitment made up to 50 IT professionals within a period of one year. Ratna Prabha, principal secretary, IT, said product and research and development companies were also the focus of the ICT policy. As the state is emerging as a major gaming and animation hub, the government also decided to develop a gaming and animation facility comprising built up incubation space, shared studios, processing labs, media centre and conference facilities. The state will also start an animation and gaming academy in collaboration with the industry. “The government will also promote a full-fledged gaming and animation city to cater to the requirements of digital entertainment sector,” she said.

Mukesh Ambani group tops in market cap, Anil’s logs sharpest growth

The Mukesh Ambani-led Reliance Industries group has emerged as India’s largest private business house by market capitalisation as on June 30 though his younger brother Anil’s empire registered the maximum growth last quarter. The Reliance Industries group’s market cap grew 2 percent to Rs.357,902 crore during the last quarter, while companies under the Tata group ranked second but actually registered a 3 percent decline at Rs.326,827 crore. The Reliance Anil Dhirubhai Ambani Group, ranked third, grew 14 percent during the period under review to Rs.142,380 crore, based on an analysis of data as on June 30 available with the bourses. The other two on the top of the chart are metals major Sterlite “Vedanta” group and the telecom services group Bharti Airtel. But their market capitalisation over the quarter slipped 20 percent at Rs.131,522 crore and 16 percent at Rs.99,970 crore, respectively. The top five ranked companies according to their market caps are: Reliance Industries (Rs.356,422 crore), Tata Consultancy (Rs.146,987 crore), Bharti Airtel (Rs.99,970 crore), Sterlite Industries (Rs.57,114 crore) and Tata Steel (Rs.43,088 crore). In terms of growth in market capitalisation registered by individual companies, Titan topped the list with 195 percent, followed by 32 percent for Sterlite Technologies and 24 percent each for Anil Ambani’s Reliance Broadcast and Tata Tea.

Decision on State Bank of Indore’s merger soon: SBI

The government’s decision on merging State Bank of Indore with State Bank of India (SBI) is expected this month, the SBI chairman said Thursday. “We expect to hear from the government on merging State Bank of Indore this month. After that, it would take a month to complete the merger process,” SBI chairman Om Prakash Bhatt told reporters here. He was here to inaugurate the Green Channel counter that facilitates paperless banking. According to him, the interest rates have an upward bias now and would soon stabilised. However, Bhatt said the policy makers should disrupt the growth pace by measures that would tighten interest rates. He expected inflation to move down from next month onwards as the monsoon is expected to be good. Speaking of the credit growth Bhatt said the first quarter hasn’t seen much credit off take. “The RBI’s (Reserve Bank of India) estimates of 20 per cent credit growth is reasonable. It might go up to 22 percent but not higher,” he said.

Sensex crawls up after a brief slip, Asia weak

A key index for Indian equities Wednesday crawled back into the green after a brief slip into the red, even as other Asian markets took a tumble. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,523.47 points, was ruling at 17,548.21 points, 38.88 points or 0.22 percent up from its previous close at 17,509.33 points. At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty was ruling at 5,263.25 points, up 0.23 percent from its previous close at 5,251.4 points. Broader markets indices were in the positive, with the BSE midcap index ruling 0.53 percent higher and the BSE smallcap index 0.7 percent up. Telecom, IT and FMCG stocks saw selling pressure, while there were some buys of PSU scrips. The market breadth was positive, with 1,692 scrips on the advance, compared to 1,008 stocks declining, and 103 remaining unchanged. In other Asian markets, investors continued to sell on persistent fears over the US economic recovery. The US monthly jobs report will be out later Friday. The Japanese Nikkei was flat towards closing bell at 9,194.48 points, 0.03 percent up from its previous close, while Hong Kong’s Hang Seng caught up with other losing peers, after a one-day break Thursday, and was ruling 1.38 percent lower at 19,851.42 points. The South Korean Kospi closed 0.86 percent down at 1,671.82 points.