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Fundamentals May 17, 2013

Nik's Diary
The Indian markets opened flat today with a positive bias tracking positive opening in SGX Nifty which is trading higher by 0.4%. Most of the Asian markets too are trading in the green. US markets saw modest strength earlier in the session, however, came under pressure towards the close on Thursday. Investors were disappointed by the larger than expected increase in U.S. weekly jobless claims, the drop in U.S. housing starts and the weak Philly Fed data. The major indices ended the day in negative pulling back off the record highs. Meanwhile, European markets too finished in negative following the sharp rise of the previous two trading sessions. Some of the day's losses were attributed to profit booking, following the strong gains in recent days.Meanwhile Indian markets ended higher for a third straight day in a row on Thursday. Key Benchmark indices closed higher by 0.2% after remaining volatile during the day. The markets which rose higher in the morning trade but turned negative in the after-noon trade. However, the recovery in the late afternoon trade resulted in the positive closing to the day’s trade. RBI Governor had earlier in the week said that the central bank will take note of falling inflation when discussing potential interest rate cuts, which resulted in improving the market sentiments.

ICICI Bank repatriates equity capital of CAD 75mn from its Canadian subsidiary
ICICI Bank, the country’s largest private lender, has repatriated C$75 million ($73 million) from its subsidiary in Canada, the bank said today. In May, the bank had received regulatory clearances for bringing back capital from its UK subsidiary. The bank said its effort was aimed at optimising capital for the ICICI Group and to improve its return on equity. “ICICI Bank already has a strong capital adequacy ratio and the above return of capital would further improve the same and enhance ICICI Bank’s ability to optimise capital deployment and return on equity,” it said. ICICI Bank Canada’s capital adequacy ratio as of March 31 was 33.2 per cent. Its share capital after repatriation is C$857 million. Slowing business growth and a stringent regulatory environment had led to the decision to bring back the capital. Despite the repatriation, both the UK and Canada subsidiaries continue to have strong capital, the bank maintained. Analysts said the lender had deployed large capital in its UK and Canadian subsidiaries some years earlier, hoping the growth rate would be high in those businesses. However, with growth not in line with expectation, there was excess capital in the subsidiaries. In addition, the UK had put in place stringent norms for foreign entities and asked such lenders to ring-fence their retail operations. ICICI also has a third subsidiary abroad, in Russia. In all other international markets, the bank operates through branches. Source: BusinessStandard

L&T has bagged various new orders worth `2,542cr
L&T Construction has won orders valued at over Rs.2542 crore during the months of April and May. The Building and Factory segment had the biggest piece of the pie, with orders worth Rs 1,021 crore. This included orders for construction of residential towers, a cement plant and a factory, according to an exchange update. The Heavy Civil Infrastructure Business also secured orders, this time worth Rs 866 crore for the Kochi Metro Rail Project. The Transportation Infrastructure Business secured an order worth Rs 315 crore. The order was for the design and construction of electrification, signaling, telecommunication and associated works for a double track railway line between Karwandiya to Durgauti section of the eastern corridor. The Water & Renewable Energy Business has secured EPC(Engineering, Procurement  and Construction) orders worth Rs 148 crore from the Public Health Engineering Department, Rajasthan for a water supply system to 97 villages. Additional orders have been received for Rs 192 crore, under the power transmission and distribution business. Larsen and Toubro was up 0.88%, compared to a 0.11% rise in the Sensex, and trading at Rs 1,594.3 at the time of writing. Besides construction, Larsen and Toubro is involved in the technology, manufacturing and financial services segments. Source: BusinessStandard

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