Posts filed under 'Stock Market & Economic Growth'
Mumbai-based Nitin Fire Protection Industries got listed today, June 5, on both NSE and BSE with significant gains after receiving astounding response from investors for its IPO. The company accessed primary market to raise funds primarily to set-up a high-pressure seamless cylinder plant at Visakhapatnam special economic zone (SEZ).
The shares of the company opened at premium of Rs 142.50, or 75%, at Rs 332.50. Presently the shares were trading at Rs 462.80, up Rs 272.8, or 143.58% after reaching a high of Rs 483 and alow of Rs 332.5. The total traded value was 827,276 at the BSE. (10.01 a.m.)
The company gained overwhelming response for its public issue, with issue being oversubscribed 48.48 times. It decided to issue shares at Rs 190 as against price band of Rs 171 to Rs 190.
Promoted by Nitin Shah, Nitin Fire Protection Industries was incorporated in 1995. It is engaged in business of fire protection systems. It provides wide range of products including fire extinguishers and gas based suppression systems. It has two manufacturing cum warehousing units situated at Vashi and Taloja, near Mumbai. In addition, the company has a system design and service centre in Mumbai.
Source : Myiris.com
June 5th, 2007
Mumbai : With equity benchmarks across the world at historic peaks, Indian equities may join the party. Recently, spate of merger and acquisition activity has propelled many global indices to record highs.
US stocks rose Friday, driving the Dow Jones industrial Average and Standard & Poor’s 500 Index to record highs, as investors cheered economic data pointing to a healthy economy.
The Labor Department released a report stating that payrolls rose 157,000 in May against expectations of a 132,000 rise. In April the US had added 80,000 jobs. Service industries added 176,000 workers last month against an 119,000 increase in April, the report showed. Retailers lost 4,900 jobs in May against a fall of 24,700 in April.
Asian stocks rose early Monday, but pared gains as a steep fall in the Chinese market alarmed investors. But export oriented stocks were lifted by upbeat US economic data, which boosted confidence in Asia’s top export market.
Back home, higher sales and other income have helped India Inc report its highest net profit growth of 47% in the last three years, said Business Standard. Analysts expect the party to continue, with the economy growing at a fast pace and most companies utilising their full production capacity.
The inflation rate too has eased to 5.06% for week ended May 19.
Aviation stocks may witness some action with a spate of mergers in the air. After Air India-Indian Airlines, Jet Airways-Air Sahara and Kingfisher-Deccan Aviation, Madurai-based Paramount Airways is interested in acquiring Mumbai-based low-budget airline Go Air of the Wadia group.
Deccan Aviation and UB Holdings are likely to see further upside. With the deal finalised, the two entities are expected to focus on attaining synergies and generate benefits of Rs 300 crore this year.
Reliance Communications may move northward on its subsidiary, Flag Telecom, entering into an alliance with a global submarine cable operator to extend its reach to South America and Australia.
Friday, Bombay Stock Exchange’s Sensex closed 26 points higher at 14544. The 30-share index hit a three month high of 14682 intra day. National Stock Exchange’s Nifty closed 2 points up at 4295, after recording an all-time high of 4325 earlier in the day.
Source : Economictimes.indiatimes.com
June 4th, 2007
Bloomberg : India became the third emerging stock market after China and Russia to surpass $1 trillion in value, helped by the fastest economic growth in 60 years, a strengthening currency and overseas investment.
The Bombay Stock Exchange’s 30-member key Sensitive Index, or Sensex, rose 0.3 percent at 11:43 a.m. today to 14,547.27, which is 0.7 percent below the Feb. 8 record. India’s rupee, Asia’s best performer this year against the dollar, advanced to a nine-year high, helping push the market’s value to $1 trillion.
Indian economic growth averaging 8.6 percent the past four years helped spur earnings growth of as much as 35 percent for the year ended March 31, according to Ratnesh Kumar, Citigroup Inc.’s Mumbai-based Indian research head. Overseas funds are also supporting the stock market after buying a net $3.76 billion of equities this year, the Securities and Exchange Board of India, the capital market regulator, said May 28.
“Profit growth at Indian companies has been phenomenal,” said Ashish Goyal, who helps manage about $20 billion in Asian stocks at Prudential Asset Management (HK) Ltd. “You can’t ignore a market that delivers such fantastic earnings.”
The Sensex has jumped 34 percent in the past year and the rupee has strengthened 12 percent, closing yesterday at 40.4975 per dollar, the highest since May 1998.
The Sensex is valued at 23 times reported earnings, the highest in Asia after China and Japan. That’s more than the benchmark’s five-year average of about 17 times profit.
A combined $10 billion of new share sales planned by ICICI Bank Ltd., Tata Steel Ltd. and DLF Ltd. will help boost India’s stock market value further.
ICICI, Tata
ICICI Bank, India’s largest lender by market value, is raising $5 billion in the country’s biggest share sale. Tata Steel Chairman Ratan Tata is selling stock to help fund his $12 billion purchase of London-based Corus Group Plc, creating the world’s sixth-largest steelmaker. DLF, a New Delhi-based property developer, plans to sell at least $2.1 billion of shares.
The offers are dwarfed by Industrial & Commercial Bank of China Ltd.’s $22 billion stock sale, the world’s largest initial public offering, and OAO Rosneft’s $10.6 billion sale in Russia. China’s market value has doubled in the past year to $2.47 trillion. Russia’s market value dipped below $1 trillion this month to $949 billion yesterday, according to data compiled by Bloomberg.
Reliance Industries Ltd., India’s largest stock, is ranked 137th globally, compared with seventh and 12th for the biggest companies in China and Russia.
‘Long Way to Go’
“Even as we reach $1 trillion, the size of our companies is still small in comparison to global peers,” said Rajiv Anand, who manages $3.5 billion in assets at Standard Chartered Mutual Fund in Mumbai. “We have a long way to go to achieve scale.”
Rising earnings are leading some Indian companies to expand overseas. Sun Pharmaceutical Industries Ltd., which is headed by billionaire Dilip Shanghvi, on May 21 agreed to spend $454 million in cash to buy an unprofitable Israeli rival and repay its creditors. Shares of Sun, India’s biggest drugmaker, have soared sixfold in the past four years.
Record profit at billionaire Kumar Mangalam Birla’s Hindalco Industries Ltd., India’s biggest aluminum producer, helped the company pay more than $3.4 billion to acquire Novelis Inc. of Atlanta. Birla was ranked 86th on Forbes’ list of the world’s richest people in 2006, after his wealth almost doubled in a year.
Founders of companies included in the Bombay Stock Exchange’s BSE 200 Index own about 73 percent of the benchmark’s combined market value, according to data on the exchange’s Web site. Overseas investors own about 21 percent and local mutual funds 3.7 percent, according to the exchange.
Best Performer
Bharti Airtel Ltd., the best-performing stock in the Sensex in the past five years, has jumped 30 times in value. India’s largest mobile-phone company posted a 12th straight quarter of record profit as it added new customers in the world’s fastest- growing wireless market.
Reliance climbed 10-fold in the past five years even as the company was split last year to settle a dispute between the Ambani brothers, Mukesh and Anil, who controlled the group.
Finance Minister Palaniappan Chidambaram said in March the nation’s gross domestic product is likely to surpass $1 trillion next year, making it the third Asian economy to do so.
“Reaching $1 trillion is a sentiment booster,” said Chakri Lokapriya, who manages $425 million of stocks in India, Brazil, Russia and China at BNP Paribas Asset Management U.K. Ltd. in London. “It validates the India story of robust growth.”
Source : quote.bloomberg.com
May 30th, 2007
Mumbai : Continuing with its upward march, the Bombay Stock Exchange benchmark Sensex on Tuesday gathered another 66 points in early trade with funds buying in heavy- weight blue-chip stocks.
The 30-share index, Sensex, which had gained 175 points in the past two sessions, gained 66.27 points at 14,464.16 in the first five minutes of trading on the back of rise in banking, steel, PSUs and auto sector stocks.
Similarly, on the wide-based National Stock Exchange, NIFTY was up by 17.75 points at 4,274.30.
Stock brokers said firming trends in other Asian markets influenced the trading sentiments to some extent.
They said excellent quarterly performance along with a liberal bonus shares issue announced by realty firm Unitech Ltd too positively impacted the trading sentiments.
Major gainers, which gave a push to the Sensex were Larsen and Toubro, BHEL, Tata Steel, Infosys Technologies, ICICI Bank and HDFC Ltd.
Source : Zeenews.com
May 29th, 2007
NEW DELHI — Concerned that the rising value of the Indian rupee is threatening to limit the country’s economic growth, especially in the lucrative outsourcing industry, monetary policy experts here have started putting pressure on the Reserve Bank of India to stem the rupee’s rise.
So far the central bank has taken no action, and some critics say it is also under pressure to keep inflation down.
“In the past, the R.B.I. intervened in the currency markets,” said Manika Premsingh, economist with Edelweiss Capital in Mumbai, referring to the bank by its initials. But recently the bank “seems to have gone through a policy change and is now allowing the rupee to appreciate,” she said.
The rupee has climbed 9 percent against the United States dollar since the beginning of the year, sharply in April. On Wednesday, it reached a nine-year high of 40.58 to the dollar.
The currency’s value may be affecting India’s trade balance, according to preliminary reports. Merchandise exports grew at a slower-than-expected 8.8 percent in March, according to Commerce Ministry data. The trade deficit grew 38 percent during the month.
“India is just beginning to gain competitiveness, and exports had been doing very well,” said Ramgopal Agarwala, a former World Bank economist and senior adviser to the policy research organization RIS here. The rupee’s rise has been a “negative shock that is very unwise.”
A strong rupee may stifle India’s growing manufacturing industries, which are trying to compete with those of China, and threaten one of the pillars of India’s success — outsourcing. Wages in India have risen as much as 25 percent a year in some sectors, as demand for skilled professionals starts to outstrip supply.
Mr. Agarwala and others say that the bank has been allowing the rupee to rise in order to control domestic inflation, which remains above its target of 5 percent, even though the benchmark interest rate is at a five-year high.
Consumers are feeling the pinch as costs rise for staples like onions and lentils. Rural and lower-income Indians, who have benefited least from the country’s economic growth, are the most affected — and politicians in India ignore them, the country’s majority, at their peril.
A strong rupee lowers the value of imports into India and drives down the demand abroad for Indian exports. One result should be a flood of lower-price supplies on the domestic market, which would help drive down inflation. But this also hurts companies that rely on exports or are trying to attract outsourcing contracts.
The central bank is “finding it hard to do a balancing act” between curbing inflation and credit growth, and keeping the rupee from appreciating, Ms. Premsingh said.
Many newspapers have carried criticism of the bank’s actions.
“It is also time the policy makers remembered that exchange rate is not like the price of cabbage that can be left to the pure market forces of demand and supply,” professors from Pondicherry University wrote in The Hindu on Saturday.
A Reserve Bank of India spokeswoman, Alpana Killawala, said that the bank never commented on its actions.
But others said they thought that the bank might move in the next few months to lower the rupee’s value. “There is a strong chance the R.B.I. may step in once it gets some comfort on inflation numbers,” Ms. Premsingh said. Edelweiss Capital expects inflation to drop below 5 percent in June, she said, adding, “We could see the R.B.I. step in then.”
Several other countries on the subcontinent and in Southeast Asia are eager to capture some of the outsourcing business that has been dominated by India. Vietnam, the Philippines and Malaysia are all expected to join the competition.
So far, though, specialists in the field say it is too early to see much impact from the rupee’s rise.
“The problem is that the technology industry here in Vietnam has so far not caught up to India,” said Karen Davies of Opus Recruitment in Vietnam. “Although there are a lot of people in university studying, there are few experienced people in the marketplace.
“Over the next three to five years, I see that changing,” she said. “It’s just not going to happen overnight.
Source : Nytimes.com
May 24th, 2007
Mumbai : The rupee rallied sharply against the US currency and today hit a new nine-year high of 40.55/56 during morning trading on fresh dollar selling triggered by China’s decision to revise the trading bank for yuan as well as strong equity markets.
In fairly active trade at the interbank foreign exchange (forex) market, the rupee resumed weak at 40.74/76 a dollar but surge to a fresh nine-year high of 40.55/56 a dollar in late morning deals. It closed at 40.70/71 per dollar on Friday.
The rupee rallied sharply as anticipated in response to China’s decision to widen the trading band on the yuan and to raise domestic interest rates, a forex dealer said.
The benchmark Sensex jumped by over 141 points this morning on sustained FII inflows.
Source : Zeenews.com
May 22nd, 2007
Indian shares rose Monday tracking global markets and led by gains in banks and the index heavyweight Reliance Industries.
The Bombay Stock Exchange’s 30-share Sensex index rose 115 points, or 0.8 percent, to 14,419 points.
On the broader National Stock Exchange, the 50-company S&P Nifty index climbed 46 points, or 1.1 percent, to close at a record high of 4,261 points.
“The Sensex is likely to see some selling pressure as it nears all-time high levels,” said Sharmila Joshi an analyst at Asit Mehta Investments.
The Sensex had touched a high of 14,515 points three months ago.
State Bank of India rose 2 percent to 1,347 rupees, HDFC Bank rose 3 percent to 1,103 rupees and Punjab National Bank closed up 2 percent at 560 rupees.
Among the other gainers Steel Authority of India rose 4 percent to end at 145 rupees, Reliance Industries Ltd. closed up 4 percent up at 1,762 rupees.
Source : news.yahoo.com
May 22nd, 2007
MUMBAI - India’s 50-issue NSE index rose to a lifetime high early on Monday, buoyed by gains in Asian markets.By 9:58 a.m. (0428 GMT), the index was trading 0.95 percent up at 4,254.65. It’s earlier peak was 4,245.30 points on Feb. 8.
The main 30-issue BSE index was up 0.83 percent at 14,421.97.
Source : news.yahoo.com
May 21st, 2007
New Delhi, May 15: Finance Minister P Chidambaram today denied that terrorists operating from tax haven are routing their investments and wreaking havoc on the stock market.
Adequate systems and safeguards are in place to deal with illegal activities on the Indian stock market, he said while replying to a question in the Rajya Sabha.
The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) keep a close watch on money movements, said Mr Chidambaram.
All Foreign Institutional Investors (FII’s) are registered with the SEBI. Under regulations, a FII may issue participatory notes with Indian instruments (equity/debt/derivatives) as the underlying securities, subject to the subscriber being a regulated entity.
Further downstream issuance of PN’s can also be done to regulate entity, said Mr Chidambaram. The regulations also require FII’s which issue PN’s to file a report in a prescribed format by each month-end.
Besides, the Foreign Exchange Management Act (FEMA) 1999 has provisions to deal with cases of unauthorized transfer of foreign exchange, including through Hawala.
At the international level, said the finance minister, India is a member of Asia Pacific group on money laundering and combating of financing of terrorism. The country has observer status in its financial action task force.
Source : Zeenews.com
May 16th, 2007
India’s economic growth is among the world’s fastest, and its main stock market gauge rose 47% last year. In short, India has been hotter than masala.
But can performance continue at its recent heady pace?
Not quite — but close enough, if two money managers IBD spoke to are right. Their funds are two of five direct paths to India’s market.
Three key factors — population, outsourcing and investment — are expected to drive an average annual
Last year’s surge by the Bombay Stock Exchange’s Sensex index dwarfed the S&P 500’s 15.8% gain. Views for India’s stock market dimmed after February’s global sell-off. But the Bombay index has regained all it lost and then some.
“Economically, India is comparatively immune from the global cycle as far as trade flows are concerned, but fund flows are highly correlated with what is happening in the rest of the world.” said Darling. Thus, India is greatly exposed to the fear and greed of foreign investors.
Indian firms are facing rising commodity costs, wages and competition. Sharat Shroff, co-manager of Matthews India Fund (NASDAQ:MINDX - News), says these factors are dampening growth.
“EPS growth (last year) was upward of 20%, and it seems to have moderated to a high teens rate,” said Shroff. “It moderated because of margin compression, but it is still robust in my view.”
His fund lost 16.5% from peak to trough in February-March. But its 12.37% rebound in April was tops among emerging-market funds tracked by Lipper. It was ahead 8% for the year heading into Tuesday. It rose 36.5% in 2006, the year of its debut, beating the MSCI EAFE by 10.1 percentage points.
Matthews India divides assets evenly among small- and mid- and big-cap stocks. It holds 47 stocks with 22% turnover. It extracts 1.41% of assets a year to cover expenses.
Thirteen-year-old Eaton Vance Greater India favors big caps. It holds 38 stocks and has annual turnover of 67%.
It was up 5% this year, after returning 36.3% in 2006. It has returned an average annual of 43.27% the past three years and 38.05% the past five. Expenses run 2.14% a year.
“The Indian market, as with many other markets around the world, is currently driven by global fund flows. In this environment of superabundant liquidity, it is the larger-cap names that generally attract most of the attention,” said Eaton Vance’s Darling. He took over management of Greater India in March.
Eaton Vance Greater India is more heavily weighted in industrials than Matthews India. Both funds have allocated 15% of assets to tech. Both of their strategies involve bottom-up stock picking and buying companies with good long-term prospects at cheap prices.
India equity funds worldwide hold about $20 billion in assets, according to Emerging Portfolio Fund Research. The funds had $712.9 million in net outflow this year through May 9. That amounted to 3.9% of total assets. By contrast, they saw $1.64 billion in inflow in 2006 and $2.82 billion in 2005.
Two closed-end funds, Morgan Stanley India Investment (NYSE:IIF - News) and Blackstone Group’s India Fund (NYSE:IFN - News), offer alternate passages to India. Their fees are comparable to Matthews India’s.
Morgan Stanley India returned an average annual 38.4% the past five years, as of May 14. That was 21.67 percentage points higher than the EAFE. The fund returned 27.1% in 2006. Blackstone India cranked out an average annual 38.62% the past five years, beating the EAFE by 22.09 points. Its dividend yield is 8.5%.
Unlike mutual funds, closed-end funds have a fixed number of shares. They trade just like stocks and ETFs. Their prices are determined by supply and demand and not by net asset values of their holdings, as in the case of mutual funds.
Unlike ETFs, closed-end funds don’t have mechanisms that keep share prices close to NAVs. So closed-end funds’ stock prices can trade above or below their NAVs.
Morgan Stanley India’s stock is down 12.34% this year and is trading at an 11.86% discount to its NAV. Blackstone India is off 10.89% and trades at a 13% discount.
IPathSM MSCI India IndexSM Exchange Traded Note (NYSE:INP - News) uses derivatives to mimic returns of the 68-stock MSCI India Total Return Index. The index is up 7.4% this year.
Source : news.yahoo.com
May 16th, 2007
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