Weekly news presentation 10

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Weekly news presentation 10

  1. 1. Weekly news presentation 10
  2. 2. RBI to raise rates by 50 bps by end-March  The Reserve Bank of India (RBI) is likely to raise rates for the sixth time this year at its review on Tuesday to batten down stubbornly high inflation pressures in the fast-growing economy  The RBI's key lending rate, or the repo rate , at the end of March 2011 is seen at 6.5 percent, while the reverse repo rate , or borrowing rate, is seen at 5.5 percent.  The RBI, which has raised policy rates by 125 basis points since mid-March, is expected to pause the tightening cycle after the current fiscal year ends  India's economy, Asia's third-largest, is expected to expand by at least 8.5 percent in 2010/11, the fastest pace among major economies after China.
  3. 3. India to supersede 'ageing' China as Asia's dominant nation  China is "rapidly ageing" because of its one-child policy and this will allow India, a younger country, to supersede it as the dominant nation in Asia before the end of the 21st century, former Australian prime minister John Howard has said.  The problem China has is that she will grow old before she grows rich, she's got a terrible demographic problem because of the one- child policy. China is a rapidly ageing country, whereas a country like India is a younger country and I wouldn't be surprised if by the end of the century India is a more powerful country
  4. 4. 7 of top-10 firms shed Rs 28k cr in m-cap in a week  Market capitalization (m-cap) of seven of the country's top-10 firms eroded by Rs 28,193 crore last week, with oil and gas major ONGC recording the biggest loss in valuation  ONGC shares declined by nearly three per cent during the week to close at Rs 1,303.25 on Friday at the Bombay Stock Exchange.  India's largest software exporter Tata Consultancy Services also witnessed its valuation swell by Rs 2,289.93 crore to Rs 2,05,858.3 crore.  Meanwhile, country's top public sector lender State Bank of India saw its valuation decline by Rs 3,168.6 crore to Rs 2,00,098.05 crore.
  5. 5. FII money set to push markets higher  The stock markets are anticipating another massive round of quantitative easing by the US Fed next week.  As the markets get closer to the D-day the markets seem to indicate their confidence of the easing happening. In case the quantum of easing is what the markets expect, India can expect more foreign institutional investor (FII) inflows.  FIIs are still bullish on Indian equity and expect the markets to rally here. They do not think India is a risky bet given its GDP growth and its earnings growth  Asian central bankers on the other hand are of the view is that the easing is an attempt to export the US's problems to Asia once more. This time around, Asia is already reeling from the upward pressures on their currencies.
  6. 6. JK Cement slips into red, reports Rs 21-cr loss  J K Cement has slipped into the red with a Rs 21-crore loss in the quarter ended September 30, due to a stiff rise in costs of raw material, freight, and fuel.  The company had reported Rs 65.38-crore net profit in the corresponding quarter last fiscal, it said in a statement to the Bombay Stock Exchange.  Total income of the company also remained almost static at Rs 434.85 crore vis-a-vis 439.64 crore reported in the July- September quarter of the last fiscal.  Consumption of raw materials increased to Rs 60.58 crore in the reporting quarter from Rs 44.16 crore in the same quarter last fiscal. Expenditure on fuel also rose to Rs 110.5 crore from Rs 88.62 crore.
  7. 7. Nova to invest Rs 1,000 cr to set up 100 centres by 2014  Nova Medical Centres, a specialised day care surgery centre chain, plans to invest nearly Rs 1,000 crore for setting up 100 centers across the country by 2014.  In the first phase, the company plans to open 25 day care centres across the country at an investment of Rs 250 crore, in the next two years.  The company, which has tied up with Max Healthcare Institute in the national capital region (NCR), plans to go solo in other parts of the country. In July, the company had entered into an agreement with Max Healthcare for day care centres in NCR.  At present, Nova Medical has two day care centres in Bangalore and has opened one in Delhi. The company also plans to open two more in the capital by early next year.
  8. 8. ONGC may stall Cairn-Vedanta deal  In a possible spoiler to Vedanta Resources' $ 9.6 billion acquisition of Cairn India, Oil and Natural Gas Corp appears keen to buy out partner Cairn's stake in the Rajasthan oil block -- the mainstay property of Cairn.  ONGC on October 21 wrote to Cairn Energy, saying it had preemption rights and asked for value of each of the 10 assets held by the British firm's Indian unit so as to enable it to "decide on the future course of action  Cairn may not have put a separate value to each of the 10 properties and it, like in the past, is likely to dispute ONGC's claim for preemption right on grounds that the deal with Vedanta was more a corporate transaction.

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