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Fundamentals Dec 27 2012

Nik's Diary
The U.S. markets moved mostly lower during trading on Wednesday on continued concerns about the looming fiscal cliff. The weakness on Wall Street came as traders expressed pessimism about the fiscal cliff negotiations, considering that lawmakers have only a few days to reach a budget agreement before the year-end deadline. The worries about the fiscal cliff overshadowed a report from Standard & Poor's, showing the strongest annual rate  of  growth  in  home  prices  in  over  two years. All of the major European markets remained closed for a second straight day due to the Christmas holidays, while stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Indian shares rallied on Wednesday on the back of easing liquidity concerns after the Reserve Bank of India said it would pump in `8,000cr in the market on 28th December 2012 by buying government securities. The budget negotiations are likely to once again overshadow a batch of economic data, including reports on new home sales and consumer confidence which are due to be released today evening.



Govt. of India to infuse  `1,550cr in Bank of Baroda via preferential issue: Bank of Baroda will issue shares on a preferential basis to Govt. of India for an amount not exceeding  `1,550cr, which will aid the bank to improve its Capital adequacy ratio. As of 2QFY2013, excluding for 1HFY2013 profits, Bank of Baroda had CAR of  12.9%, with tier-I at 9.6%, which will improve approximately by 55bp post issuance of shares on preferential basis.

Ashoka Buildcon emerges as lowest bidder for Chennai : Ashoka Buildcon and GVR Infra Projects - a consortium (50%:50%) have emerged as the lowest bidder for a road project in Chennai. The project involves development of Chennai outer ring road phase III from Nemilicheri in NH 205 to Minjur road on design, build, finance, operate and transfer annuity basis. The project has a concession period of 20 years and has an estimated project cost of `985.4cr. Target Price @286. 


CCEA approves disinvestment in RCF: The Cabinet Committee on Economic Affairs (CCEA) approved divestment of 12.5% equity in Rashtriya Chemicals and Fertilizers Ltd (RCF). The divestment will bring down government’s stake in the company down to 80% as against the present 92.5% and is expected to fetch roughly `360cr to the exchequer. The paid up equity capital of the company as on 31st March, 2012 is `551.69cr. RCF is a listed Mini-Ratna public sector company under the administrative control of the Ministry of Chemicals & Fertilizers, Department of Fertilizers. It is engaged in the business of manufacturing and marketing fertilizers, industrial chemicals such as methanol, methylamines, ammonium bicarbonate, ammonium nitrate etc. So far, the government has divested its stake in Hindustan Copper and NMDC and garnered proceeds amounting to about `6,900cr. For the government to meet its budgeted divestment target of  `30,000cr for the fiscal, the CCEA has also approved the sale of shares in NALCO, SAIL, NTPC, RINL, BHEL, Oil India, MMTC and Hindustan Aeronautics. As per media reports, the stake sale in Oil India is slated to happen in January 2013 followed by that in NTPC. 

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