The Sensex opened with a huge negative gap of 226 points at 17,541 on bearish cues from the US markets. The index soon slipped to a low of 17,445 - down 322 points from the previous close.
Buying at lower levels saw the index recoup losses and move into positive zone as the day progressed. The index crossed the 18,000-mark and touched a high of 18,143 - up 698 points from the day's low.
The Sensex finally ended with a gain of 2% (349 points) at 18,115.
The Mid-cap index surged nearly 2% (139 points) to 7,592, and the Small-cap index rallied 2.3% (213 points) to 9,408.
The BSE Metal and Realty indices gained 3.5% each at 16,167 and 10,497, respectively. The Oil & Gas index moved up 3% to 11,269.
The NSE Nifty gained almost 2% (101 points) at 5,303.
The BSE market breadth was fairly positive - out of 2,793 stocks traded, 1,986 advanced, 761 declined and the rest were unchanged today.
INDEX MOVERS...
Hindalco zoomed 9% to Rs 179. Tata Steel gained 5% to Rs 819.
Bajaj Auto rallied nearly 5% to Rs 2,175. SBI, Ranbaxy and Hindustan Unilever gained around 4% each to Rs 2,298, Rs 396 and Rs 211, respectively.
Mahindra & Mahindra and Reliance moved up over 3% each to Rs 619 and Rs 2,591, respectively.
ICICI Bank and Tata Motors gained 2.5% each at Rs 1,191 and Rs 751, respectively. HDFC added 2% to Rs 2,921.
ITC and DLF moved up 1.7% each to Rs 203 and Rs 879, respectively.
Infosys and Major Gainers Major Losers
Name Close
% Chg
Name Close
% Chg
Murli Inds 619.25 20.0 RPG Life 54.70 16.4
Rama Newsprint 31.35 19.9 Sky Inds 86.65 15.8
Priya Spin 18.15 19.8 Nicholas Piramal 288.25 12.6
Man Inds 122.10 19.0 Modipon 60.55 10.2
Valson Ind 47.00 19.0 U P Hotels 350.00 7.8
Wipro were up over 1% each at Rs 1,565 and Rs 420, respectively.
Friday, February 15, 2008
Monday, February 4, 2008
Reliance Infratel to raise Rs 6,000 cr via IPO
Reliance Infratel, the tower subsidiary of Reliance Communications, has proposed to raise Rs 6,000 crore through an Initial Public Offering (IPO) and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI).
The Anil Ambani group company has proposed to offload 10.05 per cent stake to the public, which puts the valuation of the company at around Rs 60,000 crore. The IPO follows that of another group company, Reliance Power, which is to be listed on February 11.
According to the DRHP, Reliance Infratel has proposed to offload 8,91,64,100 equity shares of Rs 5 each at a price that will be decided through the book building process.
The issue proceeds will be utilised to finance development of passive infrastructure sites and for general corporate purposes. Upon the completion of the listing, the company intends to list the shares both on BSE and NSE.
Around 60 per cent of the issue will be allocated to Qualified Institutional Buyers (QIBs), with 5 per cent for mutual funds, and 30 per cent to be allocated on a proportionate basis to retail individual bidders.
The Anil Ambani group company has proposed to offload 10.05 per cent stake to the public, which puts the valuation of the company at around Rs 60,000 crore. The IPO follows that of another group company, Reliance Power, which is to be listed on February 11.
According to the DRHP, Reliance Infratel has proposed to offload 8,91,64,100 equity shares of Rs 5 each at a price that will be decided through the book building process.
The issue proceeds will be utilised to finance development of passive infrastructure sites and for general corporate purposes. Upon the completion of the listing, the company intends to list the shares both on BSE and NSE.
Around 60 per cent of the issue will be allocated to Qualified Institutional Buyers (QIBs), with 5 per cent for mutual funds, and 30 per cent to be allocated on a proportionate basis to retail individual bidders.
Used-car prices in reverse gear ahead of Nano
Call it the “Nano effect” but less than a month after Tata Motors displayed its competitively-priced small car at the Delhi auto show, prices in the 1.3-million used-car market crashed 15 to 30 per cent, if not more.
The Nano, due to be launched this October, will carry an on-road price of about Rs 1.3 lakh (for the base model), which is lower than the price of many used cars in the A segment (which includes the Maruti 800 and Alto, for instance).
“The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today,” said Arif Fazulbhoy, director, Fazulbhoy Motors, one of Mumbai’s largest car dealers.
A 2003 Hyundai Santro that was available for Rs 2 lakh before the Nano display, is now on offer with an 18 per cent discount at Rs 1.65 lakh.
A 2003 WagonR model from Maruti Suzuki is currently sold at Rs 1.8 lakh, a discount of Rs 33,000 on its used-car price of December.
CRASH COURSE
Model Year Revised price (Rs) Prices prior to Nano display (Rs)
M800 2002 75,000 1,10,000
Santro 2003 1,65,000 2,00,000
WagonR 2003 1,80,000 2,13,000
Alto 2004 1,10,000 1,35,000
Esteem 2003 2,80,000 3,20,000
Ikon 2004 3,90,000 4,30,000
Palio1.9 2003 2,55,000 2,95,000
Despite this steep price drop, Fazulbhoy said it is hard to find buyers because many are postponing their purchase decisions till the Nano launch.
“With Nano’s entry the three-year-old Alto has now become affordable to the buyer who was earlier looking only for a Maruti 800 used car,” added Sunil Mittal, vice -president — network and business development — of one of Delhi’s largest used-car dealers, First Choice Wheels (earlier known as Automart India).
Mittal said the price of a three-year-old Alto has dropped from Rs 1.35 lakh to Rs 1.10 lakh since the Nano went on display.
The small used-car market accounts for over 70 per cent of all used-car sales within the country. Eighty-five to 90 per cent of all car sales from the Maruti True Value outlets are small cars.
However, despite car manufacturers getting into used cars the unorganised market dominates the country’s used car market.
Analysts and dealers predicted that used-car prices will only head further south once the Nano is on the roads. “The Nano will cannibalise used-car sales by exerting more downward price pressure,” said Vaishali Jajoo, auto analyst in Angel Broking, who sees prices falling 10 to 20 per cent more.
Accordingly, used-car dealers are bracing themselves for a squeeze on margins. Admits Ankit Sharma, manager — sales — in Delhi-based Patliputra Automart India: “With the small car contributing 70 per cent of our sales, used-car dealers might have to refocus their business on high-end cars.”
Also, as a Mumbai-based dealer pointed out, “When a Nano buyer is getting a better finance deal with a monthly instalment of Rs 1,100, at a much cheaper interest rate (11 per cent), why would he go for a second-hand car, which carries an interest rate of 17 to 18 per cent?”
The Nano, due to be launched this October, will carry an on-road price of about Rs 1.3 lakh (for the base model), which is lower than the price of many used cars in the A segment (which includes the Maruti 800 and Alto, for instance).
“The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today,” said Arif Fazulbhoy, director, Fazulbhoy Motors, one of Mumbai’s largest car dealers.
A 2003 Hyundai Santro that was available for Rs 2 lakh before the Nano display, is now on offer with an 18 per cent discount at Rs 1.65 lakh.
A 2003 WagonR model from Maruti Suzuki is currently sold at Rs 1.8 lakh, a discount of Rs 33,000 on its used-car price of December.
CRASH COURSE
Model Year Revised price (Rs) Prices prior to Nano display (Rs)
M800 2002 75,000 1,10,000
Santro 2003 1,65,000 2,00,000
WagonR 2003 1,80,000 2,13,000
Alto 2004 1,10,000 1,35,000
Esteem 2003 2,80,000 3,20,000
Ikon 2004 3,90,000 4,30,000
Palio1.9 2003 2,55,000 2,95,000
Despite this steep price drop, Fazulbhoy said it is hard to find buyers because many are postponing their purchase decisions till the Nano launch.
“With Nano’s entry the three-year-old Alto has now become affordable to the buyer who was earlier looking only for a Maruti 800 used car,” added Sunil Mittal, vice -president — network and business development — of one of Delhi’s largest used-car dealers, First Choice Wheels (earlier known as Automart India).
Mittal said the price of a three-year-old Alto has dropped from Rs 1.35 lakh to Rs 1.10 lakh since the Nano went on display.
The small used-car market accounts for over 70 per cent of all used-car sales within the country. Eighty-five to 90 per cent of all car sales from the Maruti True Value outlets are small cars.
However, despite car manufacturers getting into used cars the unorganised market dominates the country’s used car market.
Analysts and dealers predicted that used-car prices will only head further south once the Nano is on the roads. “The Nano will cannibalise used-car sales by exerting more downward price pressure,” said Vaishali Jajoo, auto analyst in Angel Broking, who sees prices falling 10 to 20 per cent more.
Accordingly, used-car dealers are bracing themselves for a squeeze on margins. Admits Ankit Sharma, manager — sales — in Delhi-based Patliputra Automart India: “With the small car contributing 70 per cent of our sales, used-car dealers might have to refocus their business on high-end cars.”
Also, as a Mumbai-based dealer pointed out, “When a Nano buyer is getting a better finance deal with a monthly instalment of Rs 1,100, at a much cheaper interest rate (11 per cent), why would he go for a second-hand car, which carries an interest rate of 17 to 18 per cent?”
Friday, February 1, 2008
Microsoft makes $45bn bid for Yahoo!
Microsoft said on Friday it had offered to buy search engine group Yahoo with a proposal that values the internet group’s equity at $44.6 billion, as the software giant seeks to catch up with arch-rival Google.
If completed, it would be the largest acquisition that Microsoft has made and the biggest internet merger since AOL bought Time Warner for $112 billion in 2000.
The unsolicited cash proposal, with a cash and shares alternative, is pitched at $31 a share, a 62 per cent premium to Yahoo’s closing share price of $19.18 on Thursday. Shares in Yahoo jumped 53 per cent to $29.13 in pre-market trading, while Microsoft was $1.60 lower at $31.
The proposed offer price is below Yahoo’s 52-week high of $34.08 reached last October.
Microsoft signalled that a combination of the two companies would provide stronger competition for Google, the leading internet search engine. It said the proposed combination could generate synergies of $1 billion, and provide significant economies of scale.
Steve Ballmer, Microsoft chief executive, said: “We see this as the next major milestone in the transformation of the company to embrace online services.
“Microsoft and Yahoo are companies that share a vision for online services and the result of a combination will be a company that is more efficient and successful.”
Microsoft has been trying to build market share in online advertising with acquisitions such as the $6 billion purchase of Aquantive last year. The company has stated a goal of being the number two in this market within the next few years.
“They have set a series of very aggressive goals, but overall Microsoft’s online business is floundering and the only way they can grow their business is with a big acquisition like this,” said Ian Maude, analyst at Enders Analysis.
However, Maude was sceptical how much the deal would help Microsoft.
“The main problem is that online advertising is largely driven by search, and Google owns that market. The one thing this deal doesn’t do is fix that problem,” he said.
Microsoft said it had been in on-off talks with Yahoo over the last 18 months about a combination, but had been turned down by Yahoo’s board, which had been hoping to see an improvement in the company’s performance under a new turnaround strategy.
However, in a strongly-worded letter to Yahoo’s board, Ballmer said: “A year has gone by, and the competitive situation has not improved.”
In a short statement in response, Yahoo said its board would “evaluate this proposal carefully and promptly in the context of Yahoo’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.”
Microsoft has struck as Wall Street is growing increasingly disillusioned with Yahoo. The search engine group’s earnings before interest, tax, depreciation and amortisation are projected to fall to 32 per cent of revenue in 2008.
That is sharply down from a margin of 38 per cent in 2007, with Yahoo having promised to improve the situation in 2009.
Yahoo’s shares slid earlier this week after it issued a downbeat outlook for this year reflecting its struggles to revamp its core online services.
The decline took the total fall since October to 45 per cent and pointed to Wall Street’s growing doubts that co-founder Jerry Yang, who stepped into the chief executive chair last year, can revive the fortunes of one of the brightest stars of the internet’s first decade.
Henry Blodget, the former technology analyst writing on his blog, said: “This is a brilliant move by Microsoft — a big premium dangled in front of battered Yahoo shareholders, but a price that would have seemed absurdly low as recently as six months ago. Given Yahoo’s battered stock and low 2008 outlook, we expect the offer will be accepted.”
“This deal looks much more likely to happen this time,” agreed John Delaney, analyst at Ovum. “Yahoo hasn’t made a convincing turnaround, and advertising is in a precarious position in a downturn. Microsoft would provide a safehaven for the company in a worsening economic climate.”
Microsoft said a combination with Yahoo would benefit from economies of scale in the online advertising market.
Other advantages included pooling engineering talent to accelerate innovation, operational efficiencies by stripping out costs, and the ability to seize on emerging opportunities such as video and mobile.
Kevin Johnson, Microsoft’s president of platforms and services, said: “The combined assets and strong services focus of these two companies will enable us to achieve scale economics while reaching R&D critical mass to deliver innovation breakthroughs.”
If completed, it would be the largest acquisition that Microsoft has made and the biggest internet merger since AOL bought Time Warner for $112 billion in 2000.
The unsolicited cash proposal, with a cash and shares alternative, is pitched at $31 a share, a 62 per cent premium to Yahoo’s closing share price of $19.18 on Thursday. Shares in Yahoo jumped 53 per cent to $29.13 in pre-market trading, while Microsoft was $1.60 lower at $31.
The proposed offer price is below Yahoo’s 52-week high of $34.08 reached last October.
Microsoft signalled that a combination of the two companies would provide stronger competition for Google, the leading internet search engine. It said the proposed combination could generate synergies of $1 billion, and provide significant economies of scale.
Steve Ballmer, Microsoft chief executive, said: “We see this as the next major milestone in the transformation of the company to embrace online services.
“Microsoft and Yahoo are companies that share a vision for online services and the result of a combination will be a company that is more efficient and successful.”
Microsoft has been trying to build market share in online advertising with acquisitions such as the $6 billion purchase of Aquantive last year. The company has stated a goal of being the number two in this market within the next few years.
“They have set a series of very aggressive goals, but overall Microsoft’s online business is floundering and the only way they can grow their business is with a big acquisition like this,” said Ian Maude, analyst at Enders Analysis.
However, Maude was sceptical how much the deal would help Microsoft.
“The main problem is that online advertising is largely driven by search, and Google owns that market. The one thing this deal doesn’t do is fix that problem,” he said.
Microsoft said it had been in on-off talks with Yahoo over the last 18 months about a combination, but had been turned down by Yahoo’s board, which had been hoping to see an improvement in the company’s performance under a new turnaround strategy.
However, in a strongly-worded letter to Yahoo’s board, Ballmer said: “A year has gone by, and the competitive situation has not improved.”
In a short statement in response, Yahoo said its board would “evaluate this proposal carefully and promptly in the context of Yahoo’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.”
Microsoft has struck as Wall Street is growing increasingly disillusioned with Yahoo. The search engine group’s earnings before interest, tax, depreciation and amortisation are projected to fall to 32 per cent of revenue in 2008.
That is sharply down from a margin of 38 per cent in 2007, with Yahoo having promised to improve the situation in 2009.
Yahoo’s shares slid earlier this week after it issued a downbeat outlook for this year reflecting its struggles to revamp its core online services.
The decline took the total fall since October to 45 per cent and pointed to Wall Street’s growing doubts that co-founder Jerry Yang, who stepped into the chief executive chair last year, can revive the fortunes of one of the brightest stars of the internet’s first decade.
Henry Blodget, the former technology analyst writing on his blog, said: “This is a brilliant move by Microsoft — a big premium dangled in front of battered Yahoo shareholders, but a price that would have seemed absurdly low as recently as six months ago. Given Yahoo’s battered stock and low 2008 outlook, we expect the offer will be accepted.”
“This deal looks much more likely to happen this time,” agreed John Delaney, analyst at Ovum. “Yahoo hasn’t made a convincing turnaround, and advertising is in a precarious position in a downturn. Microsoft would provide a safehaven for the company in a worsening economic climate.”
Microsoft said a combination with Yahoo would benefit from economies of scale in the online advertising market.
Other advantages included pooling engineering talent to accelerate innovation, operational efficiencies by stripping out costs, and the ability to seize on emerging opportunities such as video and mobile.
Kevin Johnson, Microsoft’s president of platforms and services, said: “The combined assets and strong services focus of these two companies will enable us to achieve scale economics while reaching R&D critical mass to deliver innovation breakthroughs.”
Tuesday, January 22, 2008
Japanese team to discuss Chennai metro rail
A three-member team from the Japan Bank for International Cooperation is in Chennai to have a detailed discussion with officials of Chennai Metro Rail Company.
The Japanese Bank is the funding agency for the Rs.9,575-crore project. The team is headed by the bank’s Deputy Director Yoshi Bumi Bito.
The project, cleared by the Union Urban Development Ministry, has been sent to the Planning Commission for final approval, which according to officials here is a formality.
Chennai Metro Rail Company officials are scheduled to have a meeting with the Delhi Metro Rail Corporation (DMRC), the consultant for the project, during the course of next week to firm up the proposed alignment for the metro rail. At present, two corridors are planned – from Washermenpet to the airport and from Fort to St.Thomas Mount. The DMRC, which has drawn up the project report, will be closely associated with the Chennai project right through.
In addition, the company would be appointing a general consultant, the officials added.
The State Government, which has formed the Chennai Metro Rail Company to execute and maintain the partly-elevated and partly-underground metro railway line, is keen on a unified metropolitan transport authority to enable commuters to move from one railway network to the other or to the public transport system.
The Japanese Bank is the funding agency for the Rs.9,575-crore project. The team is headed by the bank’s Deputy Director Yoshi Bumi Bito.
The project, cleared by the Union Urban Development Ministry, has been sent to the Planning Commission for final approval, which according to officials here is a formality.
Chennai Metro Rail Company officials are scheduled to have a meeting with the Delhi Metro Rail Corporation (DMRC), the consultant for the project, during the course of next week to firm up the proposed alignment for the metro rail. At present, two corridors are planned – from Washermenpet to the airport and from Fort to St.Thomas Mount. The DMRC, which has drawn up the project report, will be closely associated with the Chennai project right through.
In addition, the company would be appointing a general consultant, the officials added.
The State Government, which has formed the Chennai Metro Rail Company to execute and maintain the partly-elevated and partly-underground metro railway line, is keen on a unified metropolitan transport authority to enable commuters to move from one railway network to the other or to the public transport system.
Monday, January 21, 2008
Sensex sheds 1408 points
The contagion effect of U.S. bad loans dealt a big blow to Indian retail investors on Monday as the domestic benchmark stock index, the BSE 30-share Sensex, lost 1408.35 points or 7.41 per cent to close at 17605.35.
This was the largest ever fall in the history of the Indian stock index, which crossed 21,000 points only a few days ago.
The NSE 50-share Nifty lost 496.50 points or 8.70 per cent to close at 5208.80.
“The fall needs to be seen in the context of the sharp run- up witnessed in the last quarter of 2007 and the increasing volatility in the global markets amidst concerns about future economic growth. In that sense, this consolidation being witnessed in recent days is largely due to the growing risk aversion in global markets and was along expected lines,” said Sukumar Rajah, chief investment officer (equity), Franklin Templeton Investments India.
Other markets in the region also moved down sharply.
The decline in the Sensex can be attributed to several technical factors.
This was the largest ever fall in the history of the Indian stock index, which crossed 21,000 points only a few days ago.
The NSE 50-share Nifty lost 496.50 points or 8.70 per cent to close at 5208.80.
“The fall needs to be seen in the context of the sharp run- up witnessed in the last quarter of 2007 and the increasing volatility in the global markets amidst concerns about future economic growth. In that sense, this consolidation being witnessed in recent days is largely due to the growing risk aversion in global markets and was along expected lines,” said Sukumar Rajah, chief investment officer (equity), Franklin Templeton Investments India.
Other markets in the region also moved down sharply.
The decline in the Sensex can be attributed to several technical factors.
Brown backs India’s bid for Security Council seat
The United Kingdom has announced its support for India’s membership of the United Nations Security Council (UNSC), but said the road to the expansion faced several challenges.
“I am pleased to announce that we support the membership of India in the UNSC and reforms of the Security Council for the future,” British Prime Minister Gordon Brown said at a joint press conference with Prime Minister Manmohan Singh here on Monday.
“We have agreed that it is in the interest of both our countries and the world that international institutions should be reformed for the modern era. They need to be equipped to deal with the challenges of the 21st century and to ensure that there are more representatives of the new global order,” he observed.
A joint statement, issued at the end of Mr. Brown’s two-day visit, noted the U.K.’s support for the Indo-U.S. civil nuclear agreement and an “appropriate” India-specific exemption in the guidelines of the Nuclear Suppliers Group.
The two sides also agreed to promote cooperation in the civil nuclear sector and work towards a bilateral agreement.
Mr. Brown said that in his talks with Dr. Singh they found common ground to reform other multilateral institutions such as the World Bank and the International Monetary Fund.
“Essay in persuasion”
While expressing their resolve to reform the UNSC, the Prime Ministers underlined the challenges that the process faced. “We don’t underestimate the difficulties that lie in reforming global institutions. It is an essay in persuasion,” observed Dr. Singh.
Mr. Brown pointed out that there was general acceptance in the world community for reforming the UNSC, but the challenge lay in how change should be effected.
At the same time, both Prime Ministers said they were not pessimistic about reforming multilateral institutions. “It is in the interest of the world economy and politics that in an increasingly interdependent world, international institutions should be representative of contemporary realities. … We can’t deal with global problems unless India is at the global high table,” Dr. Singh said.
India and the U.K. signed, besides the joint statement, an agreement on cooperation in the scientific arena.
Mr. Brown was hopeful that companies from both countries would finalise business worth £10 billion in the near future.
“I am pleased to announce that we support the membership of India in the UNSC and reforms of the Security Council for the future,” British Prime Minister Gordon Brown said at a joint press conference with Prime Minister Manmohan Singh here on Monday.
“We have agreed that it is in the interest of both our countries and the world that international institutions should be reformed for the modern era. They need to be equipped to deal with the challenges of the 21st century and to ensure that there are more representatives of the new global order,” he observed.
A joint statement, issued at the end of Mr. Brown’s two-day visit, noted the U.K.’s support for the Indo-U.S. civil nuclear agreement and an “appropriate” India-specific exemption in the guidelines of the Nuclear Suppliers Group.
The two sides also agreed to promote cooperation in the civil nuclear sector and work towards a bilateral agreement.
Mr. Brown said that in his talks with Dr. Singh they found common ground to reform other multilateral institutions such as the World Bank and the International Monetary Fund.
“Essay in persuasion”
While expressing their resolve to reform the UNSC, the Prime Ministers underlined the challenges that the process faced. “We don’t underestimate the difficulties that lie in reforming global institutions. It is an essay in persuasion,” observed Dr. Singh.
Mr. Brown pointed out that there was general acceptance in the world community for reforming the UNSC, but the challenge lay in how change should be effected.
At the same time, both Prime Ministers said they were not pessimistic about reforming multilateral institutions. “It is in the interest of the world economy and politics that in an increasingly interdependent world, international institutions should be representative of contemporary realities. … We can’t deal with global problems unless India is at the global high table,” Dr. Singh said.
India and the U.K. signed, besides the joint statement, an agreement on cooperation in the scientific arena.
Mr. Brown was hopeful that companies from both countries would finalise business worth £10 billion in the near future.
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