Nik's Diary
The Indian markets opened in the red tracking negative cues from the SGX Nifty and mixed opening in Asian markets.US markets ended Monday's trading mostly higher, although stocks fluctuated over the course of the trading day due to mixed reaction to a pair of disappointing economic reports. The fluctuations seen over the course of the session came as the disappointing manufacturing data raised concerns about the economic outlook but also eased worries about outlook for the Federal Reserve's asset purchase program. The Fed has indicated that it will not start scaling back its stimulus program until the data points to sustained economic growth and improvement in the labor market. Meanwhile, the European markets fell on Monday after manufacturing data from China and the United States came in weaker than anticipated. However, manufacturing data from Europe was better than expected. Meanwhile, Indian shares ended lower weighed down by weak global cues and disappointing auto sales and PMI data. Going ahead, trading on Tuesday could be impacted by release of a report on the US trade balance in the month of April.
Fujifilm and Dr. Reddy's call off JV for generic drugs in Japan
Japanese imaging technology giant Fujifilm Corporation and Indian drugmaker Dr Reddy's have decided to terminate joint venture partnership they entered into in July 2011 to set up pharmaceutical formulations facility in Japan, the world's second largest pharma market. In a statement, Dr Reddy's said the partners have mutually agreed to call off the partnership owing a change in business strategy of Fujifilm for the pharmaceutical sector. "As Fujifilm realigns its long-term growth strategy for the pharmaceutical business, both companies have led to a mutual agreement to terminate the MoU." However, both the companies will continue to explore partnerships and alliance opportunities in other pharmaceutical businesses including development and manufacturing of active pharmaceutical ingredients "contract research and development and manufacturing, and the development and marketing of super-generics." In terms of the original agreement, the partners were to have an exclusive pact in generic drugs business for the Japanese market where Fujifilm was to hold majority stake of 51%. Dr Reddy's eyed a major growth through the joint venture to address $97 billion Japanese pharma market, the second largest global market after the US. The Japanese market was found attractive with low penetration of generic drugs at 23% as against 70% in the US market. Both Fujifilm and Dr Reddy's had even conducted detailed studies on setting up of joint venture for development and manufacturing generic drugs in Japan before deciding on breaking up. Notwithstanding the latest decision to call off ties with Fujifilm on generic formulations production, Dr Reddy's will continue to explore the Japanese generics market. Dr Reddy's chairman GV Prasad said, "I want to reinforce our commitment towards a planned entry into Japan to bring affordable and innovative drugs to more patients worldwide." Fujifilm intends to focus on new drugs in the Japanese market in the long term. Takatoshi Ishikawa, Director, Corporate Vice President and General Manager of pharmaceutical products division, said, "In the long-term we will be focusing more on priority fields such as new drugs in cancer field, more value-added super generic, and bio-related business by using our core technologies: analysis technologies, original nanotechnology, and high reliability and high quality manufacturing technologies. Meanwhile, we will continue future collaboration with Dr Reddy's in other fields." On Monday, Dr Reddy's stock suffered a fall of 0.98% to close at Rs 2,113 on BSE the day the exchange's benchmark Sensex lost 149 points at 19,610 points. "Given that the JV does not contribute, this will not change our estimates and hence maintain our buy recommendation on the stock with a target price of Rs 2,535," said Angel Broking analyst Sarbjit Kour Nangra. Source: EconomicTimes
JSW Steel completes merger with JSW Ispat
JSW Steel BSE 0.86 % today said it has completed the merger of JSW Ispat Steel BSE 1.16 % with itself and the amalgamation has become effective from June 1. With the completion of merger, JSW Steel has become the second largest steel producer in the country after state-owned Steel Authority of India BSE 0.88 % (SAIL) with 14.3 million tonnes capacity. The company, led by Sajjan Jindal, had announced merger of JSW Ispat into itself in September last year. "With reference to the earlier announcement... JSW Steel has now informed BSE that... the Scheme has become effective from June 1, 2013, upon filing of the certified copy of the order of the High Court of Bombay with the Registrar of Companies, Maharashtra, Bombay," it said in a BSE filing. JSW Ispat also communicated the same to the stock exchanges through a separate filing. The Bombay High Court had approved the composite scheme of amalgamation and arrangement amongst the two companies and their shareholders and creditors on May 3, 2013. Shareholders and creditors of the two companies had approved the merger on January 30. As per the merger scheme, shareholders of JSW Ispat would get one JSW Steel share for every 72 shares they hold. Moreover, JSW Ispat was to transfer its Kalmeshwar undertaking and JSW Steel was to transfer its downstream undertaking to JSW Steel Coated Products. Besides, JSW Building Systems was to be merged with JSW Steel. Post-merger, JSW Steel promoters will now hold a little over 35 per cent stake in the company. JSW's second largest shareholder JFE Steel holding will now come down to 14.92 per cent. JFE had about 15 per cent stake in JSW Steel till the time of merger announcement in September last year. However, it was not clear how much stake Pramod and Vinod Mittal -- the erstwhile promoters of JSW Ispat-- will have in the merged entity as they have offloaded their significant stake in JSW Ispat in last few months. JSW Steel had acquired 41 per cent stake in debt-ridden Ispat Industries from the Mittal brothers -- brothers of the steel czar L N Mittal-- for about Rs 2,157 crore in December, 2010. Subsequently, Ispat was renamed as JSW Ispat. Later, JSW increased its stake to 46.75 per cent in JSW Ispat and was the single-largest shareholder of the company. Through merger, JSW Steel is aiming at various benefits, including synergy in operations and reducing the borrowing cost of JSW Ispat by Rs 250 crore. Post today's announcement, JSW shares rose 1.93 per cent on the BSE to close at Rs 693.90 apiece. JSW Ispat shares closed 2.15 per cent up on the BSE at Rs 9.49 apiece. Source: EconomicTimes
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