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7 more H1N1 deaths in India,

Sep 302009
 

swine-fluSeven more influenza A (H1N1) deaths were reported from India today, taking the toll due to the pandemic in the country so far to 315, an official statement said.

Two of the deaths occurred today, one in Delhi and the other in Andhra Pradesh, the statement said.

Besides, a death that occurred in a private hospital in Delhi yesterday and four deaths in Karnataka have now been confirmed as cases of H1N1 by the results of the laboratory tests on the patients, it said.

There were two suspected swine flu deaths in Andhra Pradesh today, but the results of the laboratory tests were awaited, it said.

Of the total deaths, Maharashtra now accounts for 120, while 96 people have lost their lives in Karnataka, 34 in Andhra Pradesh, 31 in Gujarat, 13 in Delhi, 5 in Kerala, 4 in Tamil Nadu, 3 each in Goa and Haryana, 2 each in Uttar Pradesh and Uttarakhand and 1 each in Chhattisgarh and Rajasthan.

Meanwhile, as many as 197 fresh cases of the flu were reported today from across the country, including 59 in Delhi, 46 in Maharashtra, 25 in Tamil Nadu, 13 each in Karnataka and Kerala, 12 each in Haryana and Chandigarh, 9 in Andhra Pradesh, 4 in Uttar Pradesh, 2 in Chhattisgarh and 1 each in Goa and Rajasthan.

With these, the total number of laboratory-confirmed cases of the virus reported so far in India has risen to 10,233, the statement added.
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Realty IPO fever heating up

Sep 302009
 

rbs-worldpay-iposWith a host of realty initial public offers set to hit the markets to raise Rs 2,790 crore in the Draft Red Herring Prospectus. Oberoi Constructions, yet another real estate major, too is looking to raise about Rs 1,500 crore.

The Lodha Developers DRHP was filed yesterday.What I understand from the DRHP is that the capital raised target is Rs 2,790 crore—that is the exclusive detail we have from the DRHP. The green shoe option remains 10%, which means Lodha will issue 2.5-2.7 crore shares and that is the base issue—that is what we learn from Lodha Developers.

Another DRHP filing that we can expect going forward is Oberoi Constructions and that is looking to raise about Rs 1,500 crore. Morgan Stanley already has a 10% stake in the company which it had picked up in January 2007—that valued the company at Rs 6,570 crore. We understand that Morgan Stanley will remain the lead investor in their IPO issue as well and since then the company has doubled its land bank.

It is a zero-debt company at the moment and it’s not surprising that there will be no pre-IPO placement. So the target for valuation for Oberoi Construction is anywhere between Rs. 13,000-15,000 crore. Kotak Mahindra and Enam Securities are likely to be lead book runners along with Goldman Sachs and JP Morgan. We understand that Amarchand Mangaldas is acting as legal advisors and the extent of stake dilution is 10-11% by the promoters. DRHP is expected to be filed within this month.
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Sensex closes above 17000

Sep 302009
 

equity-negliBenchmark indices extended their winning streak on Wednesday to close at new 52-week highs. Sentiments turned bullish ahead of second quarter results and as traders covered short positions after benchmarks crossed psychological resistance levels.

“There was euphoria in the market as we crossed psychological levels. It was evident with rise in textiles, fertilisers midcap auto and banking stocks.

In short to medium term Nifty can move upto 5150-5200 on the higher side and witness profit booking. Though the overall trend looks bullish investors are advised to buy on declines only. Oscillators position and price pattern indicate that investors should be cautious at 5150-5200.

That doesn’t mean once can take contrarion call at 5200 as the world markets are supportive. We have to look at any bearish formation on the daily charts.
Bombay Stock Exchange’s Sensex closed at 17126.84, up 273.93 points or 1.63 per cent. The index hit a high of 17142.52 and low of 16868.46. The index closed above psychological mark for the first time since May 21, 2008.

National Stock Exchange’s Nifty ended at 5083.95, up 77.1 points or 1.54 per cent. The index touched an intra-day high of 5087.60 and low of 5004.35.

BSE Midcap Index was up 0.95 per cent and BSE Smallcap Index gained 0.94 per cent.

Amongst the sectoral indices, BSE Bankex gained 3.69 per cent, BSE Auto Index moved up 2.13 per cent and BSE Capital Goods Index advanced 1.74 per cent. BSE FMCG Index slipped 0.42 per cent.
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Rupee falls to 48.12,

Sep 302009
 

finance1The Centre will raise debt worth Rs 1.23 lakh crore in the second half of the fiscal, by selling bonds between Rs 7,000 crore and Rs
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10,000 crore each week until early February, RBI said on Tuesday.

It also said it will buy securities up to Rs 58,000 crore from traders, against Rs 80,000 crore for the first half. Market watchers say yields could rise if the government and the central bank do not make “the right noises” to that effect.

“RBI seems to have tilted towards the longer end while drawing out the debt-raising plan,” said GA Tadas, managing director and CEO of IDBI Gilts, a mid-sized bond house. “But the market should not take it negatively, especially because RBI is committed to keeping the costs of borrowing for the government at a minimum,” he added.

Ten-year bonds fell for a third day after the government announced its debt sale plan, as the yield was at two-week high of 7.19%. The yield has risen 3 bps from Friday’s close. RBI’s daily liquidity window also showed strain for the first time in many months after banks borrowed Rs 2,000 crore from the central bank and parked only Rs 60,000 crore with it.

RBI deputy governor KC Chakraborty said the issue of raising the HTM limit was being looked into and nothing has been decided on the same. The borrowing calendar was fixed after a meeting between government and central bank officials at Delhi on Tuesday. RBI deputy governor Shyamala Gopinath said the central bank will conduct the borrowing in a non-disruptive manner after the meeting while ensuring adequate funds for companies.

The rupee closed 12 paisa weaker than Friday’s close at 48.12 as a stronger dollar weakened the sentiment for the local unit, despite upswing in stocks.
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US stocks down

Sep 302009
 

share-market-india2Wall Street retreated after data showed American consumer confidence fell unexpectedly in September, raising fresh fears about the pace
of recovery from recession.

The Dow Jones Industrial Average shed 47.16 points (0.48 per cent) to 9,742.20 yesterday, a day after the blue-chip gauge posted a triple digit gain fuelled by a pickup in merger and acquisition activity.

The technology-heavy Nasdaq composite dipped 6.70 points (0.31 per cent) to 2,124.04 and the Standard & Poor’s 500 index fell 2.37 points (0.22 per cent) to 1,060.61.

A disappointing consumer confidence index reading for September subjected stocks to a sudden flurry of selling pressure, erasing early gains on the back of positive housing data, market analysts said.

The Conference Board’s consumer confidence index dipped in September to 53.1 from 54.5 in August as worries about a tight job market overshadowed improving economic conditions.

Among rising stocks was Boeing, which climbed 2.92 per cent to USD 54.62 after it won two contracts for the US Navy totalling more than USD 22 million.

Citigroup added 2.84 per cent to USD 4.70 following its sale of its Portuguese credit card business to Barclays.
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Nikkei flat trade,

Sep 302009
 

nikkei-houseJapan’s Nikkei average was flat in cautious trade on Wednesday, with investors hesitant to actively take positions ahead of a series of economic data releases, while Toyota Motor Corp fell following a US recall announcement.

The stock market lost steam after the dollar/yen exchange rate fell below 90 yen, though some exporters such as Honda Motor Co managed to hold on to their gains.

“The yen below 90 yen against the dollar is having a negative impact, while investors
are gradually taking a wait-and-see approach as they wait for important economic indicators both in Japan and overseas,” said Mitsuo Shimizu, deputy general manager at Cosmo Securities.

Among a raft of economic indicators due this week, the Bank of Japan will issue its tankan survey of corporate sentiment for July-September on Thursday and US jobs data is due on Friday.

“But investors don’t want to aggressively sell stocks, either, due to demand and supply concerns as there still could be end-of-month-related buying today,” Shimizu said.

In light trade, the benchmark Nikkei inched up 6.58 points to 10,106.78, after rising 0.9 per cent the previous day.

The broader Topix was flat at 904.40. On Tuesday, the S&P 500 Index shed 0.2 per cent as the Conference Board’s Consumer Confidence Index for September fell, underscoring concerns about personal finances amid the worst US job market in 26 years.

Toyota fell 0.8 per cent to 3,540 yen after saying it would recall some 3.8 million vehicles because of the risk that a loose floormat could force down the accelerator, a problem suspected of causing crashes that have killed five people.

But market players said they weren’t too concerned about the impact on the company’s stock price, with one saying recalls usually don’t have a lasting effect on shares.

NGK Insulators shot up 8.1 per cent to 2,065 yen after the producer of insulators for power utilities and high-energy density batteries raised its profit forecasts for the year to March 2010, citing a steady recovery in demand for auto and electronics-related products.

Other exporters climbed, though many trimmed some of their earlier gains. The yen stood around 89.77 yen to the dollar in early Asia trade, after hitting an eight-month high against the greenback at 88.23 yen on Monday.

Many Japanese exporters have set their exchange rate assumptions for the dollar around 90-95 yen for the current fiscal year to March.

The impact of a stronger yen on earnings of exporter companies is a concern for market players as a stronger Japanese currency eats into exporters’ profits when they are repatriated.

Honda Motor Co added 1.7 per cent to 2,750 yen, while electronics parts maker Kyocera Corp rose 0.7 per cent to 8,370 yen and Tokyo Electron Ltd climbed 1.2 per cent to 5,750 yen.
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Asia shares rise

Sep 302009
 

usstockAsian shares edged higher on Wednesday looking past a surprise fall in US consumer confidence and the Australian dollar jumped to a
13-month high after August retail sales data beat forecasts.

European stock futures pointed to a slight rise in opening trade on the last day of a quarter seen registering the strongest gain in nearly a decade, while US equity futures were up about 0.2 per cent.

China’s main stock market jumped a per cent boosted by the acquisition plans of Industrial and Commercial Bank of China (ICBC), the world’s biggest bank by market value, while the Korean won rose to a near one-year high.

“GDP and earnings are still being upgraded, valuations are not horribly expensive and cash is still zero per cent, we are in a sweet spot,” said Khiem Do, head of the Asia multi-asset group at Baring Asset Management.
Referring to US consumer confidence he said: “It is a volatile data, next month it may be up again and it is very difficult to predict. Its not as if its been falling for months in a row.”

The Aussie dollar, which has been on the uptrend after recent market talk about an imminent rate hike lifted its yield allure, received a further boost as data showed consumers continue spending even as the stimulus programme nears its end.

The data took the currency to a peak of $0.8820 and pushed interest rate swaps to a three-week high as markets priced in a greater chance of a rate increase in November, with increased chances of hike in December as well.

The Shanghai Composite Index rose as much as 1.8 per cent after ICBC said it was bidding to buy Thailand’s ACL Bank for up to $545 million to tap rapid growth in the Thai economy and in trade..

Yet, the benchmark stock index has lost around 7 per cent so far this quarter and is heading for its worst quarterly performance this year, mainly reflecting worries about an oversupply of shares.

South Korea’s won currency rose as high as 1,177.5 to a dollar, a one-year high, forcing foreign exchange authorities to buy the greenback to curb the won’s strength.
Taiwan, which competes with South Korea in exports of a number of goods, including electronics, also saw its currency rise, with exporter deals
and foreign fund inflows boosting the Taiwan dollar to a near one-year high. The currency rose to as high as T$32.157 to the US dollar.

Broadly, Asian stock markets were higher as investors ignored an unexpected fall in US consumer confidence in September, which brought down shares at Wall Street.

The MSCI index of Asia Pacific stocks traded outside Japan was up about 0.4 per cent and is set to post a second straight quarterly gain.

The regional gauge is up 21 per cent this quarter, adding to the second quarter’s 32 per cent gains. Prior to that it had posted six successive quarters of losses.

The Thomson Reuters index for stocks in Asia-Pacific ex-Japan was down about half a per cent.

Japan’s Nikkei average edged up 0.3 per cent in cautious trade, with investors hesitant to actively take positions ahead of a series of economic data releases and at the end of Japan’s fiscal half-year.

Meanwhile, the US dollar fell against the yen towards an eight-month low marked earlier this week as Japanese exporters sold the dollar to settle business before the quarter ends.

Earlier, the dollar had risen on short-covering and as Japanese importers bought dollars. But it soon erased gains as such corporate demand faded.

The dollar slipped 0.4 per cent from late US trade to 89.65 yen, erasing earlier gains to 90.42 yen on trading platform EBS and falling towards an eight-month trough near 88.20 yen hit on Monday.
But to others the dollar’s reversal was not surprising and the broad downtrend for the US currency is still down.
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Europe shares set for rise in 10 years

Sep 302009
 

asian-stock-market1European shares look set to finish the third quarter with their best performance in nearly a decade on expectations of economic recovery while world stocks also rose strongly though not as much as in the previous period. The pan-European FTSEurofirst 300 index put on 0.4 percent on Wednesday and the MSCI world index added the same, while commodity prices were also firmer but the dollar fell against a basket of currencies.

“We’re ticking higher on the last day of a strong quarter but investors remain a touch cautious ahead of the start of October, always a volatile month, and Friday’s U.S. jobs report,” said Mic Mills, senior trader at ETX Capital in London.

Equities have been rallying hard since early March as investors have become more confident about the prospects for economic recovery.

The European benchmark index is up more than 18 percent in July-September, on course to record its biggest quarterly rise since December 1999. It rose nearly 16 percent in the previous quarter but is still 38.5 percent below its peak in mid-2007.

Global stocks gained 17.6 percent this quarter after rising more than 21 percent in April-June, its best ever quarterly rise, while Britain’s FTSE 100 was set to register its best quarterly gains since the index was launched in 1984.

The corporate outlook has also showed some signs of revival, with the world economy recovering from its worst recession since the 1930s Great Depression.

British retailer Marks & Spencer on Wednesday posted an improvement in its quarterly sales trend and raised its forecast for full-year profit margin, but cautioned 2010 was likely to be a tough year.

Crude prices were higher, rising above $67 a barrel as the dollar eased, while investors are focusing on talks over Iran’s nuclear plans.

Metal prices also stayed firm, helped by the weaker dollar. Gold was poised to post its best quarterly performance since the first quarter of 2008.

The U.S. dollar slipped against major currencies on month- and quarter-end buying lifting sterling and the yen. The greenback was down 0.4 percent at 89.76 yen.

The euro held firm ahead of the European Central Bank’s one-year cash tender results. Attention will focus on the amount of liquidity pumped into the system.

Lacklustre demand would strengthen the ECB’s belief that money markets
are on the mend, But strong demand would mean levels of cash held by banks remain at exceptionally high levels until the middle of next year, unless the ECB takes steps to drain it from the market.

The Australian dollar, which has been on the uptrend after recent market talk about an imminent rate hike lifts its yield allure, received a further boost as data showed consumers continue spending even as the stimulus programme nears its end. The Aussie dollar was up 1 percent at $0.8795.

Yields on benchmark 10-year U.S. Treasuries were up 2 basis points at 3.316 percent, while the 10-year euro zone Bund yield was up 1 basis points at 3.232 percent.
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Bharti Airtel gains over 1%

Sep 302009
 

bharti-airtel Telecom major Bharti Airtel rose 1.22 per cent on the Bombay Stock Exchange amid looming uncertainty over its proposed deal with the
South African entity MTN, for which the exclusive discussions period is ending today.

Shares of Airtel climbed 1.22 per cent to Rs 424 on BSE and on the National Stock Exchange the scrip made a decent gain of 1.10 per cent to touch a high of Rs 423.75.

On the volume front, over 17.95 lakh shares of Airtel changed their hands on the two bourses.

Even though the exclusive talks period between the two companies ends today, a clear picture is yet to emerge on the proposed deal, which would create a combined entity having over 200 million subscribers.

Meanwhile, the government yesterday said it has a positive approach toward the proposed USD 23-billion deal between Bharti and South African MTN, even as the time for exclusive talks between the two companies ends on September 30.
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share broker is eligible to claim the irrecoverable amount due from clients

Sep 302009
 

dalal-streetThe Delhi High Court has ruled that a share broker is eligible to claim the irrecoverable amount due from clients as bad debt under the provisions of the Income-Tax Act. The court was hearing an appeal filed by the I-T department against DB Securities, a member of the Delhi Stock Exchange.

The broker had purchased shares worth Rs 1.6 crore on instructions from its sub-broker, Glory Securities. The sub-broker paid only Rs 64 lakh of the amount due.

So DB Securities did not deliver the shares to the client, but it accounted the brokerage while calculating its tax liability. Since the balance payment was not made even in the following year, the broker claimed deduction for the amount as bad debt.

The I-T department counsel contended that the balance payment could not be considered as bad debt since the broker had retained the shares and could recover the money from the sale of the said shares.

The court, however, held that there was a valid transaction between the broker and the sub-broker and the brokerage was assessed. The broker had to make the payment to the stock exchange and as he could not recover money, that sum had to be treated as a debt. But since the broker had retained the shares, the balance would have to be reduced by the proceeds from the sale of the said shares.

“The assessee could sell the said shares in the market for whatever consideration it could fetch and that was to be adjusted against the balance,” states the order while observing that tribunal has not even looked into this aspect while refusing the deduction to the broker.

The court has asked the Income Tax Appellate Tribunal to consider the matter afresh, in view of its observations. A similar case is also pending before the special I-T bench at Mumbai.
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