Nik's Diary
The Indian market
is expected to open flat today with a positive bias, mirroring SGX Nifty which
is trading marginally in the grain. Most of the Asian markets are trading in
the positive zone with gains in the range of 0.3% to 1.3%. US markets
rose higher on Friday buoyed by expectations of a mild recovery in the economy
and hopes that the Federal Reserve would continue with loose monetary policy to
support the growth. European markets too rose on Friday, tracking
positive news from US and improvement in PMI for non manufacturing sector
reported by China for January. Key benchmark indices in India dropped in choppy
trade after the results of a private survey showed that manufacturing output
expanded at its slowest pace in three months in January 2013 as new orders
grew at a weak pace and as power outages continued to hurt industrial activity.
Sensex and Nifty sliding to the three week closing low.
Cigarette packs may show
nicotine levels
In what would bring Indian cigarette
companies on a par with their global peers, the Food Safety and Standards
Authority of India ( FSSAI) has proposed to make it mandatory for
companies to specify the amount of nicotine and tar on cigarette packs. FSSAI
officials told Business Standard the authority would soon issue a notification
in this regard. Citing the absence of adequate research facilities to verify
the amount of nicotine and tar in cigarettes, companies in India have resisted
the move for some time. The Cigarettes and Other Tobacco
Products Act 2003, which regulates trade, as well as advertisement of
cigarettes and other tobacco-related products, has a provision for declaration
of cigarette contents. However, owing to the lack of research laboratories, the
government hadn’t notified the rule. “This anomaly will now be corrected,” said
FSSAI officials. Six tobacco research laboratories were being set up in
Chandigarh, Gujarat, Noida, Ghaziabad, Chennai and Kolkata at a cost of Rs 57
crore, the officials said, adding the World Health Organization would help
establish these. The Tobacco Institute of India, an industry body, did not
respond to a mail seeking comment. Healthy industry officials said earlier,
manufacturers had resisted the move, as they felt when consumers saw the amount
of nicotine and tar in cigarettes, business would be hit. While nicotine is
addictive, tar can cause cancer. Health experts say the amount of nicotine and
tar in Indian cigarettes is above the global permissible levels of one mg and
10 mg a cigarette, respectively. Indian cigarettes contain about 13-14 mg of
tar and 1.3-1.8 mg of nicotine. Experts add besides putting in place a system
to determine the amount of nicotine and tar in cigarettes, FSSAI would also
have to determine the permissible levels of these substances, something not yet
mandated by law. “Once that is done, it would go a long way in streamlining the
process,” says Monika Arora, head (health promotion and tobacco control),
Public Health Foundation of India. Indian manufacturers have graphic, as well
as text warnings such as ‘smoking kills’ and ‘tobacco causes cancer’ on
cigarette packs. Arora said the move to disclose the contents of a cigarette
was the next step towards weaning smokers off the habit. At 274.9 million,
India had the second-highest number of tobacco users after China (300.8
million), according to a study released last year by The Lancet, a medical
journal. The number of smokers in India stands at 138 million. Analysts say
this number is growing rapidly. Health experts have also pitched for other
steps to check the growing tobacco consumption in the country. These include
indicating the levels of carbon monoxide emitted when a cigarette is smoked. Source: Business Standard
Ultratech eyes ABG cement
unit
India's largest cement maker, Aditya
Birla Group-owned UltraTech Cement, has begun talks to purchase an
incomplete 6.7-million-tonne cement plant in Gujarat owned by ABG Cement
(ABGCL), a person with direct knowledge of the development
said. "Executives of both UltraTech CementBSE 2.27 % and ABG
had three rounds of negotiations," the same person said. Axis
CapitalBSE -1.98 %, the investment banking arm of Axis BankBSE
-0.05 %, is advising UltraTech on the deal. "We had some discussions
in the past," a senior ABG official said. "The company is keen to
complete the plant and grow its cement business." UltraTech has
offered around 4,660 crore at $130 a tonne while ABG is believed to be asking
for 5,008 crore at $156 a tonne. ABG owns two power plants located close to the
main consumption markets of Maharashtra and Gujarat, which are growing at about
10%, and an incomplete jetty. "It is unlikely to get a premium for a
non-operational plant that needs additional money to complete," says an
analyst tracking the sector for more than 15 years. "The buyer needs to
invest 550 crore to complete the plant." ABGCL is promoted by ABG
Cement Holdco Pvt Ltd, or ABGHPL. IFCIBSE 4.76 % owns a small stake
of 7.62%. ABGHPL is owned by Rishi Agarwal and family, the promoters of listed
shipbuilder ABG ShipyardBSE -0.21 %. Rating agency CARE recently
downgraded ABGCL's rating to B from BB- as its project faced cost and time
overrun and increased reliance on debt. "The rating remains
constrained by ABG Cement's residual project execution risk and limited
experience of the promoters in the cement business," the agency said in a
note published on January, 8, 2013, after reviewing the company's plans to
raise 1,494-crore loan from banks. Until June, ABGCL had invested 2,525
crore in the cement plant, with debt of 1,544 crore and the balance using promoter
funds and loans. The estimated cost of the project is 3,028 crore, and it is
expected to be operational by the fourth quarter of 2013-14. "The
ability of ABGCL to achieve the tie-up for required funds so as to commence
operations to achieve optimum capacity utilisation, and timely fund infusion by
the promoters to support debt servicing in the mean time remain the key rating
sensitivities," CARE said. The deal, if concluded, will help
UltraTech consolidate its position in Gujarat. It currently leads
rival Gujarat Ambuja BSE 0.88 % Cements, owned by Swiss cement
maker Holcim, with a 7-million-tonne capacity against GACL's 4.5 million
tonnes. UltraTech can cut down its transportation cost by ferrying raw material
and cement by sea. Source: Economic Times
Ceat registers a 23.8% yoy
growth in tyre production in December 2012
As per the filing with the BSE, Ceat has
registered a strong 23.8% yoy growth in tyre production in December 2012.
The growth was led by a strong 42.7% and 22.8% yoy growth in the
motorcycle and small commercial vehicle segments respectively. The
passenger vehicle segment too registered a strong growth of 15.9% yoy
during the month. The company’s radial facility at Halol continues to ramp-up
and registered a growth of 109% yoy on a low base of last year. At `105, the
stock is trading at attractive levels of 2.6x FY2014E earnings. Source: Angel Broking
Comments
Post a Comment