Skip to main content

Fundamentals April 3, 2013



Nik's Diary
The Indian market opened in the red today mirroring the negative opening trades in the SGX nifty and most of the Asian bourses. The US markets continued to perform well throughout the trading session on Tuesday and ended on a positive note. Positive sentiment on the Wall Street was generated by the release of a Commerce Department report showing a notable rebound in factory orders in the month of February. Traders also kept an eye on developments in Europe, where Cyprus was reportedly given an additional two years to meet the conditions of its bailout agreement. Most of the European bourses rallied higher on Tuesday, after returning from their four day Easter holiday weekend. Economic data from Europe and the U.S. contributed to the positive mood. Meanwhile, Indian markets rose sharply on Tuesday, extending recent gains after the RBI rationalized investment limits for foreign investors in bonds in a bid to attract more foreign flows to plug the widening current account deficit. Investor sentiments were also improved after Finance Minister asserted that the government remains committed to reforms. 

L&T Construction bagged `3,700cr orders in March
L&T Construction bagged new orders worth Rs 3,700 crore under different business segments during March 2013. While the building and factories business got orders for Rs 1,986 crore for building residential towers and for commercial development, the power transmission and distribution business accounted for orders valued at Rs 1,097 crore. A major order is from the Punjab State Power Corporation for the execution of the restructured accelerated power development and reforms programme on a turnkey basis at Amritsar, Jalandhar and Ludhiana city. The work includes construction of 66/11kV and 33/11kV grid substations, 11kV distribution lines, distribution transformer centres, underground cabling and substations. An order from Power Grid Corporation of India is for the construction of a 400 kV station at Tuticorin. The solar business unit got orders worth Rs 373 crore for construction of solar PV plants in Rajasthan and Tuticorin in Tamil Nadu, and the balance orders for Rs 244 crore were for different ongoing projects in infrastructure, metallurgical and material handling businesses, L&T said in a release. Source: HinduBusinessLine

Supreme Court refuses closure for Sterlite’s copper plant; fines `100cr
The Supreme Court Tuesday ordered Sterlite Industries, a subsidiary of the UK-based Vedanta Group, to pay a record penalty of Rs 100 crore for inappropriately operating its copper smelting plant in Tuticorin and damaging the environment between 1997 and 2012. The order came three days after the Tamil Nadu Pollution Control Board ordered the plant shut following an alleged gas leak on March 23, which left several people ill. "Considering the magnitude, capacity and prosperity of the company, we are of the view that it should be held liable for... Rs 100 crore for having polluted the environment... and for having operated the plant without a renewal of the consents by the Tamil Nadu Pollution Control Board...," a bench led by Justice A K Patnaik said. "Any less amount would not have the desired deterrent effect." Sterlite has three months to pay up. The money will be used for environment protection in the plant's vicinity. The bench, however, refrained, in "public interest", from ordering permanent closure of the plant. It noted that Sterlite had removed 29 of the 30 deficiencies pointed out by experts, and contributed towards copper production and job creation. Sterlite said it would continue to work in close association with the state government and regulatory bodies. Source: Indian Express

Mukesh Ambani's 4G arm Reliance Jio inks `1,200cr pact with Anil Ambani's RCom
In the first significant collaboration between their companies since they scrapped a non-compete pact in 2010, the Ambani brothers joined hands Tuesday with a subsidiary of Mukesh Ambani's Reliance Industries Ltd signing a Rs 1,200 crore-deal with Anil Ambani's Reliance Communicatiaons Ltd (R-Com) to use its optical fibre cable network. The RIL unit, Reliance Jio Infocomm Ltd, will ride on the R-Com network across the country to provide the backbone for its upcoming 4G service launch. The pact is not only the first major tie-up between the brothers' companies after they resolved their feud and ended their non-compete pact in May 2010, it is also the first business deal between them since they split in 2005. The companies Tuesday said they could cooperate further in the future, including mutually utilising towers and other related assets. The announcement sparked a rally in their shares, with the R-Com stock surging as much as 17 per cent and closing 11 per cent higher on the BSE. Other Anil Ambani group stocks also saw a rally. The RIL stock closed up 2 per cent. "This agreement is the first in an intended comprehensive framework of business cooperation between Reliance Jio Infocomm and Reliance Communications to provide for optimal utilisation of the existing and future infrastructure of both companies on reciprocal basis, including inter alia, inter-city fibre, intra-city fibre, tower and related assets," R-Com said in a statement. Reliance Jio "will utilise multiple fibre pairs across R-Com's 1,20,000-km inter-city fibre optic network to provide a robust and future-proof backbone for rolling out its state-of-the-art 4G (fourth generation) services," it said. With the government recently approving norms allowing Reliance Jio to launch calling service using its 4G spectrum, the company can also launch voice services in the future. Analysts said the move would offer some relief for debt-laden R-Com, while it is likely to help Reliance Jio hit the market faster than expected. "I would wait for agreements that follows this deal. R-Com is looking to sell stake in Reliance Infrastructure and, going ahead, RIL may buy stake in that company. If that happens, R-Com will benefit in a big way out of the deal, as the money it is getting out of the current agreement is a relatively small amount," said Ankita Somani, telecom analyst at Angel Broking. The agreement, however, provides partial relief to R-Com, which had a debt of around Rs 37,360 crore until December 31, 2012. R-Com, the country's third-largest mobile-telecom company with services in all 22 telecom circles, is reported to have been looking at selling stake in its tower firm Reliance Infrastructure. The company has also held discussions with various firms to lower its stake in the under-sea cable firm Globalcom. After the brothers split their empire in 2005, Mukesh Ambani retained RIL while Anil Ambani got Reliance Communications and other group business entities in sectors such as power and infrastructure. The initial agreement between the brothers did not allow them to compete directly against each other, which was amended in 2010. In the same year, RIL bought 95 per cent in Infotel Broadband and renamed it Reliance Jio Infocomm Ltd, which owned frequencies to provide broadband communication services. 
ICEBREAKER 
FIRST significant collaboration between the brothers' companies after the non-compete pact was scrapped in May 2010. Also, first business deal between them since the 2005 split. COMPANIES said they could cooperate further in future, including mutually utlising towers, related assets. MARKET RALLY followed; R-Com shares surged 17%, closed 11% up on BSE. Other ADAG stocks also rallied. RIL stock closed 2% higher. Source: Indian Express

NALCO reported FY2013 production numbers
National Aluminium Company Ltd (Nalco) Tuesday reported record sales of over Rs 7,200 crore and foreign exchange earnings of Rs 3,400 crore for 2012-13 fiscal. According to the company site, it had recorded net sales of Rs 6,500 crore and an export turnover of Rs 2,569 crore in 2011-12. Besides, despite delay in renewal of mining lease, the company has achieved the highest-ever bauxite production of 54.19 lakh tonnes, against the previous best of 50.03 lakh tonnes achieved in previous fiscal. At the same time, Nalco’s Alumina Refinery has produced 18.02 lakh tonnes of alumina hydrate, which is an all-time record against the previous best of 16.87 lakh tonnes achieved in 2011-12. However, during the year, the metal production of the company slumped marginally from 4.13 lakh tonnes to 4.03 lakh tonnes, due to planned shutdown of pot shells of the smelter. "Besides coal shortage, the dwindling LME prices of metal, forced the company to cut down its production of metal to some extent, said Nalco CMD Ansuman Das. "It was not commercially viable to produce more metal using expensive imported coal," said Das adding the net power generation by the company’s Captive Power Plant was 6,076 million units during the fiscal. Moreover, during the year, the company sold 983,191 tonnes of alumina hydrate against 842,396 tonnes in 2011-12. Aluminium export by the company also increased to 144,161 tonnes this year from 98,399 tonnes achieved in the last financial year.  Source: Zeenews

MOIL raises manganese ore prices by 9% for April-June quarter
State-owned manganese ore producer MOIL Ltd has hiked prices by nine per cent across its product basket for the April-June quarter to cash in on rising demand. "It is to inform that in line with company's business practice of quarterly revising the prices of manganese ore, the prices of each grade of manganese ore has been increased for the quarter April-June, 2013 by 9 per cent over the prices for Jan-March, 2013," MOIL said in a BSE filing. MOIL's Chairman and Managing Director G P Kundargi attributed the hike to increased demand in the domestic market. It takes around 32 kg manganese ore to make one tonne of steel. The company has hiked the raw material prices in line with increase in global rates, Kundargi added. MOIL Ltd, country's single largest manganese ore producer with the capacity of producing 1.1 million tonnes, sells over 60 types of products. The hike has been effected across the basket with effect from April 1. Following the hike, price of first grade lump manganese ore now stands at Rs 13,416 per tonne. Source: Business Standard

HC refuses relief to Mallya, banks free to sell shares
In a setback to liquor baron Vijay Mallya , the Bombay High Court today refused to restrain banks from selling shares of United Spirits pledged as security against loans to Kingfisher, apparently jeopardising his plans to complete stake sale to Diageo and to revive the grounded carrier. “Ad-interim relief refused,” said Justice S J Kathawala after hearing the banks and United Breweries Holdings, Kingfisher’s parent company, which had filed the suit. The court order would mean that the consortium of 17 banks would be free to sell shares of the subsidiary companies of the UB Group which had been pledged with the lenders under an agreement in 2010. During the course of arguments, the banks informed the court that the process of sale of shares had already begun. Their counsels informed the court that after the borrower defaulted on repayment, it was decided to sell the pledged shares as per the agreement between the parties. Even those banks which are not part of the consortium have also started selling the shares, they said. Birendra Saraf, Counsel for UB Group, told reporters that the banks had informed that one crore shares of Mangalore Chemicals and Fertilisers, a subsidiary of UB Holdings, pledged with the lenders, had already been sold. “The deal was materialised today,” he said. He had told the court earlier that 23 lakh shares of companies, including United Spirits Ltd and Kingfisher Airlines, were pledged in exchange for loans. Mallya-owned UB Holdings pleaded in the suit that the banks be restrained from selling shares of United Spirits Ltd (USL) and other companies collectively worth Rs 100 crore. The petition sought a stay after State Bank of India sold a portion of USL shares recently, prompting the Mallaya-owned group to move the high court for relief. The action by the banks, led by SBI which is the lead lender to the airline with over Rs 1800 crore dud exposure, is seen as a big jolt to Mallya’s plans of reviving the airline as well as completing the stake sale in USL to Diageo, announced last November for over Rs 11,000 crore. The banks decided to sell shares of USL after Kingfisher failed to repay their dues worth over Rs 7,500 crore since January 2012. In February, the banks had decided to recall the loans to Kingfisher by selling a portion of the collaterals with them which included USL and Mangalore Fertilisers shares, Mallya’s Goa villa and also the Kingfisher House in Mumbai apart from the brand kingfisher which was valued at over Rs 4,000 crore at the time it was pledged. Finance Minister P Chidambaram appeared to support such a move when he last month asked state-run banks to take action against rich promoters of ailing companies. “We cannot have an affluent promoter and a sick company. Promoters must bring in money… We wish banks take firm steps to recover non-performing assets,” Chidambaram had said after a meeting with the bankers. While the consortium leader SBI has an exposure of Rs 1,800 crore to Kingfisher, Punjab National Bank has Rs 800 crore, IDBI Bank (Rs 800 crore), BoI (Rs 650 crore), Bank of Baroda (Rs 550 crore), United Bank of India (Rs 430 crore), Central Bank of India (Rs 410 crore), UCO Bank (Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab and Sind Bank (Rs 60 crore) and Axis Bank Ltd (Rs 50 crore). The lenders hold 3.5 crore shares of USL as collateral which at today’s closing price is worth over Rs 6,550 crore. More than 90 percent of promoters stake are pledged with various banks. USL today closed at Rs 1859.80, down 1.5 percent on the BSE, while Mangalore Fertilisers closed at Rs 39.30, up 20 percent and Kingfisher closed Rs 8.71, up 4.06 percent on the BSE, whose Sensex rallied 176 points today. Source: firstpost

Comments

Popular posts from this blog

NDPMS Stock Advisory

It is entirely possible that NDPMS could have, from time to time, some trading or investment positions in the stocks being discussed on the blog. This blog is not intended for distribution to, or use by, any person or entity, any jurisdiction or country, where such distribution or use would be contrary to local law or regulation. Reproduction in whole or in part without written permission is prohibited.

12.1% Equity Return in 10 days !! Review it to believe it !!

This is a pseudo folio. The base folio amount was kept at Rs 1 lakh and was created on September 26, 2015. Most of the positions are still open hence please consider this post as an update on the folio.The folio heat was kept at 10% which in simpler words mean that of all position gets their stop losses hit, the folio will drop maximum by 10%. Risk reward ratio is kept at 3:1 which implies that target points are set at 3 times the risks per position taken. This post is subjected to promotion of NDPMS Stock Markets Training Program. Please read the disclaimer before forming any opinions about the post, stock markets or NDPMS Wealth Management. Disclaimer: The intention of this post is not at all to entice the blog viewers to take up NDPMS Advisory Service. The post is solely used to promote NDPMS Training Program. It is entirely possible that NDPMS could have, from time to time, some trading or investment positions in the stocks being discussed on the blog. This blog is not int...

Professional Trading !!

Professional Trading is a profession where an individual makes his living from trading in stock and commodity markets. A professional that involves prolonged training and experience. It provides you with other various opportunities. It gives you freedom of time and money. It has no competition threat. There are no deadlines, no geographical deadlines, no dependency on staff. You are your own boss.  When people come to the world of trading many think that they only need to learn a strategy and follow the rules of that strategy and they do this for a while. The problem with those who do not first get a good foundation of the markets is that when the markets change or when they have a draw down they start making mistakes. Those mistakes lead to self sabotage even in the healthiest of minds. The process of trading is only enjoyable when your sub conscious mind figure out the right ways for trade. In other words those who start with passion very often find that those feelings are...