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updated : WEDNESDAY
31 DECEMBER
2008 |
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Sensex extends gains; Satyam,
RCOM, M &M among big gainers
Mumbai, Dec
30: Stretching the gains to
the second straight day, the
benchmark Sensex on the Bombay
Stock Exchange today closed
higher by over 180 points amid
intense expectations of a second
stimulus package which attracted
good buying in realty, auto
and IT shares. The Sensex ended
up by 182.64 points at 9,716.16
after trimming some part of
the gains it posted in intra-day.
It surged to 9,785.04, over
a 250-point gain in the late
afternoon, after a strong start
on European markets. However,
there was a bout of profit selling
in the last 30 minutes of the
trade indicating that the higher
levels still attract resistance.
The 30-share Sensex’s
gain of 1.92 per cent was the
best today in the Asian markets
where the Japanese Nikkei was
the next best at 1.28 per cent.
Blue-chip Satyam Computer Services
surged for the third straight
day amid speculations that the
rein of the company might to
go institutional investors.
Satyam today ended up by 8.33
per cent at Rs 162.45. During
the day, the scrip soared 9.58
per cent. Satyam shraes witnessed
heavy rush for the second day
in a row with nearly six crore
shares changing hands on bourses.
Reliance Communication, which
today rolled out its nation-wide
GSM services, was also in limelight
with its shares surging 7.16
per cent. Mahindra & Mahindra
advanced by a hefty 5.75 per
cent after reports of the auto
major exiting from Swaraj Mazda
by selling its 14.04 per cent
to Sumitomo Corporation of Japan
for Rs 40.03 crore. Tata Motors
was another prominent gainer
at 4.91 per cent. Tata Motors
and M&M were the two biggest
losers yesterday.
Grasim Industries was the lone
loser today at 1.16 per cent.
Amid talks of the government
doling out incentives in the
second stimulus package and
the possibility of the Reserve
Bank cutting the key policy
rates, interest rate sensitive
realty and bank shares also
attracted brisk buying. While
all the sectoral indices ended
in the positive terrain, realty
and auto were the winners at
over 3 per cent. Among realty
stocks, Unitech, which got additional
spectrum for its telecom business,
improved by 4.35 per cent, while
IndiaBulls at 4.57 per cent
was the biggest gainer among
realty stocks. With BEL surging
5.49 per cent, the consumer
goods index also netted a gain
of 2.92 per cent. BHEL at 2.01
per cent and BEML at 3.08 per
cent were the other significant
scrips. Among the IT stocks,
besides Satyam Infosys was up
1.32 per cent, while Moser Baer
and Mphasis surged over 7 per
cent. The positive sentiment
in the market also saw the National
Stock Exchange index Nifty closing
in on the psychologically important
3000-point level but closed
at 2979.50, still up by 57.30
points from its last close.
The wider index touched a high
of 2,999.15 points during the
day.
The market breadth on BSE was
positive with 1,642 counters
gaining ground against 812 losing.
The trading volume improved
further to Rs 3,984.49 crore
from Rs 3,411.155 crore on Monday
RIL topped the list of highest
traded securities with a turnover
of Rs 317.77 crore followed
by Bajaj Hind (Rs 278.33 crore),
Satyam Computer (Rs 269.61 crore),
Reliance Com (Rs 150.74 crore)
and Reliance Capital (Rs 142.40
crore). The BSE-100 index improved
further by 91.21 points or 1.85
per cent to 5,016.49 from 4,925.28
previously.(PTI) |
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Raju
asks staff to stay with him
Hyderabad, Dec 30: Virtually
hitting back at four directors
who quit over the Maytas takeover
fiasco, Satyam Computer Chairman
Ramalinga Raju today asked
employees to stand-by him,
saying the Board had unanimously
voted in favour of the now-aborted
deal. Under continuous attack
over the deal for two firms
promoted by his family, Raju
also held out a promise to
investors that everything
possible is being done to
get Satyam back on track.
Raju, who was forced to step
back from the deal in the
face of stiff opposition from
institutional investors, said
that "the Board arrived
at its decision to bid for
Maytas by following all required
processes and procedures...
Their vote to approve the
motion was unanimous."
But the company's decision
raised questions about ethics
and corporate governance issues,
following which four directors
resigned. “I am of the
view that resigning from the
Board now is like deserting
a troubled ship. We should
remember Satyam is a major
player in global IT space...,”
independent director T R Prasad
said today, referring to the
resignations of Mangalam Srinivasan,
Vinod Dham, Krishna G Palepu
and M Rammohan Rao. The four
also came in for criticism
from lawyers and chartered
accountants and company secretaries,
who said that by resigning
the directors failed in their
fiduciary duty to protect
the interest of shareholders
and other stakeholders whose
interest they represent on
the board. Company law practitioner
Naseer Ahmed said, "They
are accepting the wrong which
had happened at the Satyam's
Board meeting... They should
not run away from their collective
decision and responsibility...It
also appears that they are
influenced by some vested
groups in the company."
Breaking his silence on the
embarrassing developments
over the last two weeks, Raju
asked the employees to "please
be assured that the Board
and the leadership team are
doing everything that's possible
to get Satyam back on track.
"We cannot do this without
your help... I ask for your
continued faith in Satyam
and for your steadfast focus
on your customers, specially
in the face of wild speculation
and unchecked rumours."
There are five members left
on the Board, including Raju.
The letter comes amid reports
of uneasiness among the over
50,000 employees of the company,
even as speculation was rife
that a chunk of its talented
employees was already looking
for other options.
Raju further assured employees
that customers continue to
show a high level of trust
in Satyam. “We have
also been in contact with
many of our investors, and
we have taken key steps to
regain their confidence. These
include strengthening the
board by changing its size
and composition, and engaging
DSP Merrill Lynch to provide
strategic advice and options,”
he added.
The Satyam board is scheduled
to meet on January 10, 2009
to consider these options.
The company has suffered a
series of embarrassments after
its abortive USD 1.6 billion
bid to acquire two firms -
Maytas Properties and Maytas
Infrastructure - promoted
by Raju’s family and
the World Bank's decision
to bar the IT major from doing
business with it for eight
years. On issues of business
strategy, he said the company
would continue to focus on
its core business. (PTI)
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Business
Clips
Reliance Communications
launches GSM telephony
Mumbai, Dec 30: The Reliance
Anil Dhirubhai Ambani Group
Wednesday launched its much-awaited
GSM mobile telephone services
spread over 11,000 towns and
340,000 villages with a capital
infusion of Rs.10,000 crore
(Rs.100 billion/$2 billion).
Chairman Anil Ambani, who
launched the services from
the Reliance Centre here,
said the rollout happened
six months ahead of schedule,
with the company having secured
the frequency spectrum for
the services only in January.
“What has taken other
companies 15 years to achieve,
we have completed in less
than 15 months,” Ambani
said, adding that the GSM
telephony will complement
the group's CDMA offering
to give customers a wider
choice. The CDMA network of
Reliance Communications spans
more than 20,000 towns and
450,000 villages and has some
60 million subscribers across
the country, as per the company’s
web site. The launch of GSM
services came just two days
after the 76th birth anniversary
of the company's late founder
Dhirubhai H. Ambani. It was
on his 70th birth anniversary
Dec 28, 2002 that Reliance
had launched its mobile phone
services.(IANS)
Air India announces
fare cut up to 82 per cent
New Delhi, Dec 30: A day after
Jet Airways reduced fares
on domestic routes, state-owned
operator Air India on Tuesday
announced fare cut up to 82
per cent in at least 20 sectors,
mostly on metro routes, a
senior airline official said.
“The new fare cut comes
into effect today (Tuesday).
We have cut fares on 20 sectors
by up to 82 per cent. This
will largely benefit passengers
on metro routes,” an
airline spokesperson told
IANS. India’s leading
private air carrier Jet Airways
Monday reduced fares on its
domestic routes by up to 40
per cent with immediate effect.
Another leading carrier, Kingfisher
Airlines, Sunday announced
fare cut from Jan 1. However,
it has not announced the quantum
of fare cut. Low cost carriers
are also expected to follow
suit, said an industry official.
The fare cuts comes in the
wake of slackening demand
in the post-peak season and
continued decline in fuel
prices. Over the past four
months, there has been a sharp
decline in aviation fuel prices.
While some air carriers earlier
this month reduced the fuel
surcharge on the ticket price
by Rs.200 to Rs.400, they
did not touch the base fare.
Oil companies have reduced
aviation fuel prices seven
times since September. The
fuel is now sold at Rs.32,691.28
per kilolitre in Delhi after
prices were slashed by Rs.4,208.37
in the first week of December.
(IANS)
Government to bring
down fuel prices
Kochi (Kerala), Dec 30: Union
Petroleum and Natural Gas
Minister Murli Deora has said
the Government has decided
to bring down the prices of
petrol, diesel, kerosene and
LPG further following the
fall in international oil
prices. Deora added that the
announcement could be made
in a few weeks. He was speaking
here during a function to
facilitate Hibi Eden, who
was recently elevated as president
of the National Student Union
of India (NSUI), the student
wing of the Congress. Deora
said oil prices in the international
market had come down to 37
dollars to 38 dollars a barrel.
He pointed out that the Government
hadn't raised the kerosene
price even at a time when
the crude oil price was at
a record high as the poor
people depend on it.In a dig
against the Left parties,
which have been agitating
for a further cut in the price
of petrol and other products,
Deora said that during the
galloping rise of oil prices,
the government exchequer had
shelled out Rs 58,000 crore
as a shield to counter the
cascading effect of high oil
prices. (ANI)
Suzlon raises stake
in REpower to 73.7 per cent
New Delhi, Dec 30: Suzlon
Energy, India's largest wind
turbine manufacturer, has
acquired the first tranche
of Martifer group's stake
in REpower Systems AG of Germany
for approximately euro 65
million ($89 million or Rs.4.23
billion), the company announced
Tuesday. The transaction takes
Suzlon's holding in REpower
to 73.71 percent. It already
holds 91 percent voting rights
in REpower through an existing
agreement with Martifer. Earlier
this month, Suzlon signed
an agreement with Martifer
Group on a revised payment
schedule to pick up a 22.4
percent stake that Martifer
Group of Portugal holds in
REpower, which upgraded its
holding in the German firm
to about 91 per cent. As per
the new terms, Suzlon will
pay Martifer in three tranches
with the first instalment
of euro 65 million which the
company paid. The next instalment,
of euro 30 million ($41 million
or Rs.1.95 billion), will
be made in April 2009 and
the final one of euro 175
million ($239 million or Rs.11.38
billion)the following month.
Suzlon's acquisition of REpower
Systems is aimed at tapping
the European and North American
wind energy markets. While
Suzlon's largest on-shore
wind turbine is of 2.1 MW
capacity, REpower's wind turbines
are in the range 2.2 MW to
5 MW. (IANS)
Housing bank expects
finance firms to reduce rates
Kolkata, Dec 30: India's apex
housing finance institution,
the National Housing Bank
(NHB), expects housing finance
companies to reduce lending
rates, a top company official
said here on Tuesday. "As
we have reduced rates, we
expect housing finance companies
to reduce rates and pass on
the benefits to consumers,"
NHB chairman and managing
director S. Sridhar told reporters
on the sidelines of a workshop
on reverse mortgage. Sridhar
agreed that some housing finance
companies have already reduced
rates by 50-75 basis points.
Dwelling on refinance rates,
he said these varied depending
on the schemes, and added:
"At present, it is available
at 8 percent for the weaker
sections or rural housing
while other refinance rates
vary from 9-9.75 percent depending
on the period and borrowing
institutions." NHB has
reduced its prime lending
rate (PLR) from 11.25 percent
to 10.75 percent; it reduced
its refinance rates earlier.
Asked whether the bank has
plans to raise any fund from
market, Sridhar said: “Depending
on the demand, we will plan
to raise funds from the market.
We have a plan to raise Rs.3,000
crore (Rs.30 billion) by June
2009, mainly through bonds.”(IANS)
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STOCK
COMMENTS
HCC has target of
Rs 65: G Shah
Gaurang Shah of Geojit
Financial Services is of the
view that HCC has target of
Rs 65.
Shah told CNBC-TV18, “We
have a target price of Rs
65 on HCC. It is a leading
infrastructure and construction
company. It has presence in
the spectrum of transportation,
hydel-power, airports and
ports etc. HCC has got a very
order book of around about
Rs 9,000 crore plus and large
part of this order book around
71% is fairly shielded from
any kind of cost pressures,
which leaves a fair amount
of margins on the hands of
the company and improves the
bottomline. The Lavasa Project
which is a 12,500 acre project
on the Mumbai-Pune expressway,
is valued at around about
Rs 10,000 crore and if you
take a very conservative contribution
from this particular project
towards the share price of
Rs 38, then considering the
current market price at around
about Rs 50 the other verticals
are going to contribute significantly
going forward. Also the other
catalyst possibly could act
as a positive trigger is the
reimbursement of the Bandra-Worli
Sea Link, the resolution in
favour of HCC of the SawalKote
hydro-project and of course
any further stake sale of
Lavasa Project is going to
be expected to be at a higher
level.”
He further added, “Other
triggers for the company could
be contribution from BOT and
Vikhroli IT Park to contribute
to share price. Considering
Rs 50 as the share price of
HCC, the amongst the infrastructure
sector, HCC stands to benefit
if somebody has got a time
horizon of at least one-and-half
to two-years. A very decent
return can be expected out
of the stock.”
Satyam has support
at Rs 125-135: R Jain
Rajesh Jain of SMC Global
Securities is of the view
that Satyam Computer Services
has support at Rs 125-135.
Jain told CNBC-TV18, “Satyam
is definitely quite oversold
at the moment; Rs 125-135
would be a very strong support
zone because it’s taking
a technical bounce. But between
Rs 180-200 levels it’s
going to face a lot of resistance
where it’s much better
to quit and then stay away
and even if the stock is to
move up in the long term chart
it has to form a base and
without forming a base I don’t
think it will be easily able
to move up. But the stock
is likely to trade between
Rs 130-200 levels in the next
few days.”
Pick Punj Lloyd on
declines: Mukadam
Shahina Mukadam, Director
of Varun Capital Markets is
of the view that one can pick
Punj Lloyd on declines.
Mukadam told CNBC-TV18, “Punj
Lloyd is doing pretty well
in terms of its business and
if you see the last quarter
numbers, the turnover was
almost up by 56%. They have
an orderbook close to about
18 months, which puts them
in a very comfortable position
and construction companies
are now preferred if you look
at it in the overall construction
and real estate pack and I
like the way Punj Lloyd’s
business has been distributed
over various geographies like
they have 30-35% from India,
another 30-35% from south
east India by some acquisitions
done lately and Middle-East
is also a growing market for
them at 20%. But I am not
too sure if it’s the
right price to get in today
or now at Rs 145 and maybe
to buy at declines would be
a better strategy and hold
it then for upto maybe Rs
160-170. So it is a good buy
and maybe one can pick it
at declines.”
Book profits in Core
Projects: Mukadam
Shahina Mukadam, Director
of Varun Capital Markets is
of the view that one can book
profits in Core Projects &
Technologies at higher level.
Mukadam told CNBC-TV18, “Core
Projects is more of a speculative
stock and I don’t think
its so much fundamentally
tracked. So now it’s
in the news given its acquisitions
and I would take this opportunity
to book profits at upper levels.”
Hold HDIL, says Mukadam
Shahina Mukadam, Director
of Varun Capital Markets is
of the view that one can hold
Housing Development and Infrastructure,
HDIL.
Mukadam told CNBC-TV18, “I
would hold on HDIL and I think
in the whole real estate space
this is one stock with very
attractive valuations, its
available currently at just
0.5 times book value and even
if you take the market value
of the land bank it is about
close to Rs 450. So I would
just hold on to the stock
and there is a definite upside
from here and technically
also it looks pretty okay.”
Satyam looks
attractive: Reddy
KC Reddy, Head-Asset
Mgmt, Amas Bank is of the
view that Satyam is looking
attractive.
Reddy told CNBC-TV18,
“In Satyam there are
a lot of moving things in
that subject to comment on
but obviously a positive outcome
would be some kind of change
in the ownership structure
or new management being in
place. But we need to see
more clarity on what the existing
management has to say. They
haven’t said much in
the last week or so and also
if there are any new interested
parties either strategic investors
taking over a private equity.
So I think this space needs
to be watched for the next
one-two weeks.”
He further added, “Having
said that I still think that
whether with the existing
management or not, the valuations
are significantly attractive
and the company would be of
good strategic interest given
that the business is fairly
low beta in terms of its exposure
to the global economy. So
I think it is a fairly good
level, one way or the other
I think the resolution will
happen and I would believe
that even to some extent it
is pretty unacceptable but
even with the existing management
valuations are fairly attractive
in my opinion.”
Aptech has target
of Rs 120: Gujral
Technical Analyst, Ashwani
Gujral is of the view that
Aptech is sort of moving up,
next target here could be
around Rs 105 and then Rs
120.
Gujral told CNBC-TV18,
“Aptech is sort of moving
up, next target here could
be around Rs 105 and then
Rs 120. If the market stabilizes
these stocks could have some
upside. Rolta may rally upto
Rs 157-160, once it is clear
that IT probably would not
as bad you would see a huge
rally in this midcap IT stocks.
Rolta has support now at Rs
104.”
He further added, “NIIT
Tech has been showing a bit
of bottoming out, so if it
can get past Rs 68 that could
head upto Rs 82, the support
out there is above Rs 57.
They have been beaten out
of shape much more than the
largecaps. So, if you need
to look for a space that has
low risk in terms of stock
price, then probably midcap
IT is a better bet.”
SAIL can test
Rs 103: Gujral
Technical Analyst, Ashwani
Gujral is of the view that
SAIL can test Rs 103.
Gujral told CNBC-TV18,
“SAIL has found support
around Rs 65. I think the
next level here could easily
be Rs 90 and then Rs 103.
Steel seems to be showing
some action. Basically, along
with the market it is a high
beta kind of stock, it tends
to move but steel is showing
more gumption than the other
metals.”
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