Current Feed Content from 10 Oct 08 07:03
Axon board withdraws Infosys recommendation
Fri, 03 Oct 2008 06:14:00 +0000The Axon board has withdrawn the Infosys offer recommendation. The board will unanimously recommend the HCL offer when it is made reports CNBC-TV18 quoting sources.
Infosys had offered 600 pence per share for Axon on August 25 and HCL tech had offered 650 pence per share for axon on September 26.
Earlier CNBC-TV18 had reported that the 60-hour deadline to Infosys to get back to Axon has expired. As it was previously estimated with Infosys, the deadline was only a safety precaution that the Indian IT major was entitled to under the earlier agreement. In that time period, the Axon board could not withdraw its recommendation to Infosys offer.
Once that deadline has passed, the Axon board is free to withdraw its recommendation of Infosys offer to its shareholders. But there is a caveat here. It does not mean that the Axon board will withdraw its recommendation. But given the offer that HCL has put forward to Axon is much higher – nearly 3.8% higher than Infosys – in all probability the board will side with the higher offer.
It is a pure cash deal; there are no shares to be exchanged. Therefore, the Axon shareholders just have to sell and get out of the company. The company will be delisted if the open offer or the Scheme of Arrangement goes through. Both the parties have a 1% inducement or break-up fee depending on which party you talk to.patelarp@gmail.comNifty tests 3900; Sterlite Ind, Tata Steel, SAIL top losers
Fri, 03 Oct 2008 06:10:00 +0000Markets have slipped further as metal and IT stocks are witnessing heavy selling pressure. Nifty slips below its crucial support of 3900. The BSE oil & gas, realty, auto and banking indices are trading negative. However, some buyng interest is seen in FMCG, capital goods and power stocks.
At 10.33 am, the Sensex was down 174.15 points or 1.33% at 12881.52, and the Nifty was down 67.55 points or 1.71% at 3883.20.
About 1274 shares have advanced, 1660 shares have declined, and 247 shares are unchanged.
Top losers on the bourses are Sterlite Ind at Rs 395.15 down 7.98%, SAIL at Rs 114.10 down 7.57%, Tata Steel at Rs 415.40 down 5.3% and Infosys at Rs 1, 396.00 down 3.98%.
Most active shares on BSE are Axis Bank at Rs 728.80 with volumes of 1, 687, 452, Reliance at Rs 1, 843.15 with volumes of 353, 362 and Rel Capital at Rs 1, 125.80 with volumes of 404, 032.
Markets @ 9: 56 am: Metal, IT, auto drag markets down
Markets have opened lower following weak global cues. Selling pressure is seen in metal, IT, oil & gas, realty, auto and banking stock. The SGX Nifty was trading down 93 points at 3880. Sensex is below 13000 and Nifty is slipping towards 3900.
Huge selling pressure is seen in Bharti Airtel DLF, ICICI Bank, TCS, Satyam, Sterlite, SAIL, Unitech, Suzlon Energ, Wipro and Infosys.
At 9:56 am, the Sensex was down 191 points at 12863, and the Nifty was down 41 points at 3909.
Crude tanked and was trading below $ 94/bbl.
On the global front, Asian markets were trading lower. Hang Seng fell 2.60%, Nikkei was down 1.29%, Straits Times plunged 2.13% and Taiwan Weighted was down 0.54%.
The Dow plunged 348.22 points, or 3.22%, to 10, 482.85. The S&P 500 index declined 46.78 points, or 4.03%, to 1, 114.28, and the Nasdaq composite index lost 92.68 points, or 4.48%, to 1, 976.72.
The US Senate has passed the bailout bill but this did little to cheer up sentiment on Wall Street. Markets dropped as a jump in borrowing costs and reports showing a worsening economy spurred concern that the bailout plan won't be enough to stimulate growth.
Another key trigger for the fall yesterday were the discouraging data points. Weekly jobless claims rose, exceeding consensus. August factory orders too showed worse-than-expected decline. Rise in weekly jobless claims and monthly jobs report will be out today.
Market cues:
US senate approves bailout package, Indo-US nuke deal
US house of representatives to vote on bailout package, decision likely early morning India time tomorrow
FIIs net buy USD 21 million in equity on Sep 30: SEBI
NSE F&O Open Int up by Rs 2421 crore at Rs 62, 643 crore
F&O cues:
Futures Open Int up by Rs 773 crore, Options Open Int up by Rs 1648 crore
Nifty futures Open Int unchanged, at 16-point premium vs 6-point premium
Nifty Open Int Put-Call Ratio (PCR) at 0.96 vs 0.93
Nifty Puts add 23 lakh, Calls add 12 lakh shares in Open Int
Nifty 3800 Put adds 7.7 lakh shares in Open Int
Nifty 3650 Put adds 6.9 lakh shares in Open Int
Nifty 4200 Call adds 4.1 lakh shares in Open Int
Nifty 4000 Call adds 4 lakh shares in Open Int
Stock futures add 1.2 cr shares in Open Intpatelarp@gmail.comAutoline Industries accelerates on Italian acquisition
Fri, 26 Sep 2008 04:43:00 +0000Autoline Industries rose 2.78% to Rs 159 at 15:18 IST on BSE after the company said its wholly owned subsidiary, Koderat Investments, has acquired 49% stake in Italy-based automobile design firms SZ Design Srl and Zagato S.r.l
The company made this announcement during trading hours today, 25 September 2008.
Meanwhile, the BSE Sensex was down 130.55 points, or 0.96%, to 13, 561.27.
On BSE, 31, 379 shares were traded in the counter. The stock had an average daily volume of 3, 892 shares in the past one quarter.
The stock hit a high of Rs 167 and a low of Rs 154.50 so far during the day. The stock has a 52-week high of Rs 283.50 on 7 May 2008 and hit a 52-week low of Rs 149.25 on 23 September 2008.
The small-cap stock had underperformed the market over the past one month till 24 September 2008 falling 13.55% as compared to the Sensex’s decline of 4.92%. It had also underperformed the market in the past one quarter, falling 29.18% as compared to the Sensex’s decline of 2.94%.
The company’s current equity is Rs 12.20 crore. Face value per share is Rs 10.
The current price of Rs 159 discounts Q1 June 2008 annualized EPS of Rs 4.39, a PE multiple of 36.21.
The acquisition cost is 9 million euros. Koderat has also entered into a deal with Icon Development SA, under which it will have the right to raise its stake in the firms to 60% in three years, Autoline said
Autoline would raise debt to fund the acquisition.
Autoline Industries’ net profit fell 61.6% to Rs 1.34 crore on 2.1% increase in net sales to Rs 67.33 crore in Q1 June 2008 over Q1 June 2007.
Autoline is engaged in manufacturing and designing of auto components, sheet metal components, sub assemblies and assemblies.patelarp@gmail.comLarge orders fuel Man Industries
Fri, 26 Sep 2008 04:42:00 +0000Man Industries India galloped 13.56% to Rs 63.65 at 15:40 IST on BSE, after the company said it has secured new orders worth Rs 1100 crore in longitudinal submerged arc welded and helical submerged arc welded segments in the current quarter.
The company made this announcement during trading hours today, 25 September 2008.
Meanwhile, the BSE Sensex was down 115.82 points, or 0.85%, to 13, 576.70.
On BSE, 5, 00, 815 shares changed hands in the counter. The stock had an average daily volume of 34, 938 shares in the past one quarter.
The stock hit a high of Rs 64.80 and a low of Rs 55.95 so far during the day. The stock has a 52-week high of Rs 177 on 2 January 2008 and hit a 52-week low of Rs 53.55 on 23 September 2008.
The small-cap stock had underperformed the market over the past one month till 24 September 2008, declining 19.41% as compared to the Sensex’s decline of 4.92%. It had also underperformed the market in the past one quarter, falling 32.06% as compared to the Sensex’s decline of 2.94%.
The company’s current equity is Rs 26.64 crore. Face value per share is Rs 5.
The current price of Rs 63.65 discounts Q1 June 2008 annualized EPS of Rs 10.90, a PE multiple of 5.84.
With these orders, Man Industries’ order book has crossed Rs 1500 crore.
Man Industries has also announced the commissioning of its 3rd helical submerged arc welded (HSAW) production line at Anjar in Gujarat.
The company also acquired 155 acres of land in Little Rock, Arkansas USA for setting up a state of the art HSAW pipe manufacturing plant having capacity of 3 lakh metric tonne at an approximate project cost of $100 million.
Man Industries India’s net profit fell 16.3% to Rs 14.52 crore on 1.3% fall in net sales to Rs 316.88 crore in Q1 June 2008 over Q1 June 2007.
The company makes oil and gas pipelines.patelarp@gmail.comTata Steel tops volumes on BSE
Fri, 26 Sep 2008 04:39:00 +0000Reliance Natural Resources, Austral Coke & Projects, IFCI and Sesa Goa are among the other volume toppers on BSE.
Tata Steel declined 0.34% to Rs 484.05 on a volume of 1.12 crore shares on BSE. It was the top traded counter on BSE in terms of volumes. After around 1 crore shares, or 1.37% of its equity, changed hands in two block deals on BSE in the early trade at a weighted average price of Rs 486.50.
Reliance Natural Resources (RNRL) slipped 0.82% to Rs 79 on a volume of 82.94 lakh shares and stood second in the list of top traded counters on BSE. The family memorandum of understanding between Anil Ambani and Mukesh Ambani based on which the Reliance empire was split continues to remain the main point of argument in the ongoing case between Reliance Industries (RIL) and RNRL over sharing of natural gas from the KG basin.
Austral Coke & Projects slumped 5.72% to Rs 247.10 on a volume of 69.32 lakh shares on BSE. It was the third top traded counter on BSE.
IFCI surged 3.06% to Rs 40.45 on a volume of 67.28 lakh shares on BSE. It was the fourth top traded counter on BSE.
Sesa Goa tumbled 5.42% to Rs 116.85 on volume of 51.93 lakh on BSE and stood fifth in the list of top traded counters on BSE.patelarp@gmail.comMSK Projects builds on large block deal
Fri, 26 Sep 2008 04:38:00 +0000MSK Projects surged 7.97% to Rs 65.05 at 16:12 IST on BSE after 15.7 lakh shares or 6.88% of the company's equity changed hands in a block deal on NSE.
Meanwhile, the BSE Sensex was down 167.70 points, or 1.25%, to 13, 521.65.
On BSE, 35, 077 shares were traded in the counter. The stock had an average daily volume of 16, 499 shares in the past one quarter.
The stock hit a high of Rs 71.90 and a low of Rs 58 so far during the day. The stock has a 52-week high of Rs 195.95 on 3 January 2008 and hit a 52-week low of Rs 56.05 on 18 September 2008.
The small-cap construction firm had underperformed the market over the past one month till 24 September 2008 falling 17.75% as compared to the Sensex’s decline of 4.92%. It had also underperformed the market in the past one quarter, falling 22.76% as compared to the Sensex’s decline of 2.94%.
The company’s current equity is Rs 22.82 crore. Face value per share is Rs 10.
The current price of Rs 65.05 discounts Q1 June 2008 annualized EPS of Rs 10.53, a PE multiple of 6.17.
The company’s net profit rose 55.3% to Rs 6.01 crore on 28% rise in sales to Rs 76.84 crore in Q1 June 2008 over Q1 June 2007.
MSK Projects is into infrastructure development. Its focus is on build- operate-and- transfer (BOT) road projects.patelarp@gmail.comIndia Cements leads gainers in ‘A’ group
Fri, 26 Sep 2008 04:36:00 +0000Bajaj Holdings & Investment, Punj Lloyd, CESC and Marico are among the other gainers.
India Cements rose 5.6% to Rs 136.60. The scrip topped gainers in BSE's A group shares.
Bajaj Holdings & Investment rose 4.82% to Rs 473.20. It was the second biggest gainer in A group.
Punj Lloyd rose 4.74% to Rs 303.95. It was the third biggest gainer in A group.
CESC rose 4.15% to Rs 291.40. It was the fourth biggest gainer in A group.
Marico climbed up 3.79% to Rs 60.25. It was the fifth biggest gainer in A grouppatelarp@gmail.comReligare Enterprises slips after Sebi nod for mutual fund business
Fri, 26 Sep 2008 04:34:00 +0000Religare Enterprises fell 0.22% to Rs 382.95 at 14:!6 IST on BSE even as the company received approval from the Securities & Exchange Board of India to launch mutual fund business in the country.
The company announced thid during the market hours today, 25 September 2008
Meanwhile, the BSE Sensex was down 198.28 points, or 1.46%, to 13, 493.25.
On BSE, 7, 403 shares were traded in the counter. The stock had an average daily volume of 6, 149 shares in the past one quarter.
The stock hit a high of Rs 383.50 and a low of Rs 380 so far during the day. The stock has a 52-week high of Rs 730 on 3 January 2008 and hit a 52-week low of Rs 323.75 on 21 November 2007.
From a recent high of Rs 388.15 on 22 September 2008, the stock has lost 1.22%.
The mid-cap stock had outperformed the market over the past one month till 24 September 2008 falling 0.51% as compared to the Sensex’s decline of 4.92%. It had also outperformed the market in the past one quarter, declining 0.17% as compared to the Sensex’s decline of 2.94%.
The company’s current equity is Rs 76.15 crore. Face value per share is Rs 10.
Religare Aegon Asset Management Company, is a joint venture between Religare and Dutch insurer Aegon. The asset management company (AMC) is looking at launching its first product by November-December 2008 for the Indian retail investor.
Religare Enterprises (REL) is one of the leading integrated financial services groups in India. REL's businesses are broadly clubbed across three key verticals, the retail, institutional and wealth spectrums, catering to a diverse and wide base of clients.
The company reported a net loss of Rs 8.42 crore on operating income of Rs 1.79 crore in Q1 June 2008. Figures for the corresponding previous year period were not available.patelarp@gmail.comGSPC plans IPO by January for raising $1 bn
Mon, 22 Sep 2008 05:36:00 +0000NEW DELHI: Gujarat State Petroleum Corporation is likely to sell 10-15 per cent of Gujarat government equity holding to public through an IPO by January 2009 to raise about $1 billion.
"The IPO planning is in advanced stage. It was slated to hit the market sometime in November but now (with financial market turmoil) I think it is likely by December or January, " a company official said on the sidelines of the GEO India 2008 conference at Greater Noida near here.
GSPC is 100 per cent owned by the Gujarat government and is engaged in oil and gas exploration and production and city gas distribution.
"We have appointed DSP Merrill Lynch, JM Financials, Kotak, SBI Caps and Citi Bank for the initial public offering, " he said.
GSPC proposes to invest $1 billion in bringing to production its eastern offshore Krishna Godavari basin gas field by December 2011.
The company is close to receiving Government approvals for development plans for KG-8 gas field that lies in the western quarter of the block KG-OSN-2001/3. "We have divided the block into three parts - the western quarter, northern quarter and the eastern plane. In the Phase-I, we are proposing to develop gas finds only in the 15 square kilometre western quarter, " he said.
KG-8, according to the commerciality report submitted to oil regulator DGH, holds a minimum of 2.6 Tcf and a maximum of 5.6 Tcf recoverable reserves and it can alone produce about 6 mmscmd gas.
GSPC recently discovered gas in KG-22 well and it believes the well have hold up to 3 Tcf of reserves. The entire block in GSPC's assessment holds more than 20 Tcf of inplace reserves.
The company by December 2011 will pump 7-8 million standard cubic meters per day of gas from the block where KG-8 was the first of the five discoveries so far. We have taken capacity in Reliance Industries' East-West (Kakinada to Baruch) pipeline to transport gas to Gujarat, the official said.
He said the state government had dropped the idea of selling 30 per cent stake in the block to a foreign strategic partner like Chevron Corp, and was now concentrating on the IPO.
GSPC holds 80 per cent in KG-OSN-2001/3 block that the company won in third round of auctions under New Exploration Licensing Policy in 2003. GeoGlobal and Jubilant Enpro hold 10 per cent a piece.patelarp@gmail.comOil India asked not to use IPO cash in Iran
Mon, 22 Sep 2008 05:34:00 +0000NEW DELHI: Foreign banks advising Oil India Ltd on its initial public offering have sought an assurance the explorer will not invest the funds raised in Iran and Sudan, which face US sanctions, oil ministry officials said on Wednesday.
The company aims to open its IPO on November 10 to raise more than Rs 15 billion ($325 million) to fund its expansion, the sources said. They said Oil India plans to invest Rs 23.4 billion in the next financial year, mostly on exploration and development.
HSBC, Citigroup, Morgan Stanley, and JM Financial Ltd are the bankers to the initial public offering. "The bankers, HSBC, Citi, and Morgan Stanley, with bases in the US have asked Oil India not to invest IPO proceeds in Iran and Sudan, " said an oil ministry official with knowledge of the IPO plans, who did not wish to be identified.
State-run Oil India holds a 10 per cent interest in a pipeline in Sudan, 20 per cent in the offshore Farsi exploration block in Iran, and has stakes in explorations blocks in several countries including Libya, Nigeria and Yemen. Another ministry official said Oil India was expected to give such an assurance on the IPO funds to attract institutional investors from Western countries.
A third official confirmed the development, saying the bankers sought assurances that Oil India would not use the funds for existing or future participation and investments in countries where sanctions have been put in place by the US Office of Foreign Assets Control (OFAC).
"Bankers know the pulse of overseas institutional investors. They have prepared the list of interested parties and are expected to begin discussion with them from October 13, " the third source said. The move by the banks is a sign that the US-led campaign to isolate Tehran over its nuclear programme is making it more difficult to invest in the Islamic Republic.
Oil India and other Indian firms plan to invest $3 billion to develop gas fields in Iran's Farsi block and are waiting for Tehran's formal approval.
State-run Oil and Natural Gas Corp and refiner Indian Oil Corp each hold 40 per cent participating interest in the Farsi block that Oil India has an interest in. The first official said Oil India would still be able to invest in Iran if needed, as it was a debt-free company and could raise loans or fund through internal resources.
Iran is drawing interest from Indian and Chinese firms that are keen to tap the world's second-largest reserves of oil and gas and are less susceptible than many other companies to Western pressure over Tehran's nuclear programme. ($1=46.3 rupees)patelarp@gmail.comOIL to raise debt if IPO plans fail
Mon, 22 Sep 2008 04:54:00 +0000KOLKATA: State-owned PSU Oil India Limited (OIL), which recently received SEBI approval to float an IPO, would raise debt instead if market conditions are not conducive for the offer, a company official said.
OIL Chairman and managing director M S Pasrija told reporters here that the company had got SEBI approval on September 11 for the proposed IPO.
He said that the company was required to float the offer within a period of 90 days from September 11.
To a query Pasrija replied "we are going ahead with the IPO activity, we hope to come out with the offer soon."
Asked whether the prevailing market conditions were suitable for floating the issue, Pasrija said "we are watching the market conditions very closely."
Commenting on the failure to float the IPO and its effect on the company's capital expenditure plans, he said "in that case, OIL would raise debt. We are a debt-free company."
For the current financial year and the next, the company has earmarked an expenditure of Rs 4, 575 crore for exploration and production (E&P), both domestic and overseas.patelarp@gmail.comCLSA cuts Info Edge's rating to 'underperform'
Mon, 22 Sep 2008 04:35:00 +0000INFO EDGE
RESEARCH: CLSA
RATING: UNDERPERFORM
CMP: RS 691
CLSA has cut Info Edge’s stock rating to ‘underperform’ . The company’s flagship job portal, Naukri.com, is decelerating due to a slowdown in hiring in the domestic IT services sector as well as banking.
CLSA has reduced earnings estimates for FY09-11 by 10-26 %. For FY09, the company is likely to miss its 35-50 % year-on-year (y-o-y ) revenue growth outlook and post 20-25 % growth in revenues instead .
Valuations at 35x March ’09 and 26x March ’10 earnings look expensive as growth slows. Info Edge’s valuations cannot be defended by mid-single digit earnings per share (EPS) growth, which the company is likely to post this fiscal.
Even assuming an upturn in FY10 and beyond, the stock’s 22-23 % EPS compound annual growth rate (CAGR) over FY08-11 justifies a target price of Rs 650 — 13% down from the current levels.
Credit Suisse maintains 'neutral' rating on ONGC
Credit Suisse maintains ‘neutral’ rating on Oil and Natural Gas Corporation.patelarp@gmail.comBuzz of new gas find fuels RIL
Fri, 19 Sep 2008 05:05:00 +0000Reliance Industries rose 1.91% to Rs 1970 at 10:22 IST on BSE on reports the company has struck gas at eight more locations in the Krishna-Godavari basin, which it intends to develop at an approximate cost of $3 billion.
Meanwhile, the BSE Sensex was up 398.58 points, or 2.99%, to 13714.18. Stocks rose across the globe on reports US policymakers will work through the weekend on a plan that will focus on dealing with illiquid assets -- the toxic source that has shattered balance sheets, pushed Lehman Brothers to file for bankruptcy protection and prompted the US bailout of American International Group this week.
On BSE, 1.88 lakh shares were traded in the counter. The scrip had an average daily volume of 12.74 lakh shares in the past one quarter.
The stock hit a high of Rs 2007 and a low of Rs 1962.20 so far during the day. The stock had a 52-week high of Rs 3252.10 on 15 January 2008 and a 52-week low of Rs 1764 on 18 September 2008.
The scrip had underperformed the market over the past one month till 18 September 2008, falling 13.13% compared to the Sensex’s 9.08% fall. It had also underperformed the market in the past one quarter, falling 15.36% compared to Sensex’s 13.66% fall.
India’s largest private sector firm by market capitalisation and oil refiner has an equity capital of Rs 1453.71 crore. Face value per share is Rs 10.
The current price of Rs 1970 discounts its Q1 June 2008 annualised EPS of Rs 113.07, by a PE multiple of 17.42.
According to reports, Reliance has asked the Directorate General of Hydrocarbons (DGH) for approval to develop the areas located in the Krishna Godavari basin. This is in addition to existing plans to produce 80 million cubic meters of gas a day from the D-1 and D-3 areas located in the same region.
The company may start producing gas at its biggest field off the country's eastern coast in November, the DGH had said on 17 September 2008. Reliance may initially produce 15 million cubic meters a day, the reports added.
Reliance Industries’ net profit rose 13.2% to Rs 4110 crore on a 40.8% rise in sales to Rs 41579 crore in Q1 June 2008 over Q1 June 2007.
Reliance Industries manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, India that produces a wide range of products such as gasoline, superior kerosene oil and liquified petroleum gas.patelarp@gmail.comExpansion plan powers Godawari Power & Ispat
Fri, 19 Sep 2008 05:05:00 +0000Godawari Power & Ispat galloped 5.30% to Rs 160 at 9:55 IST on BSE, after the company said it has signed a memorandum of understanding with the state government of Chhattisgarh for setting-up a 1000 megawatt thermal power project.
The company made this announcement after trading hours on Thursday, 18 September 2008.
Meanwhile, the BSE Sensex was up 491.49 points, or 3.69%, to 13, 807.09. Stocks rose across the globe on reports US policymakers will work through the weekend on a plan that will focus on dealing with illiquid assets -- the toxic source that has shattered balance sheets, pushed Lehman Brothers to file for bankruptcy protection and prompted the US bailout of American International Group this week.
On BSE, 10 shares were traded in the counter. The stock had an average daily volume of 33, 568 shares in the past one quarter.
The stock hit a high of Rs 160 and a low of Rs 160 so far during the day. The stock has a 52-week high of Rs 376.50 on 1 January 2008 and a 52-week low of Rs 149.05 on 24 March 2008.
The small-cap stock had underperformed the market over the past one month till 17 September 2008, falling 26.09% as compared to the Sensex’s decline of 9.92%. It had also underperformed the market in the past one quarter, declining 20.84% as compared to the Sensex’s decline of 15.51%.
The company’s current equity is Rs 28.07 crore. Face value per share is Rs 10.
The current price of Rs 160 discounts Q1 June 2008 annualized EPS of Rs 54.22, by a PE multiple of 2.95.
In July 2008, Godawari Power & Ispat signed a memorandum of understanding with the government of Chhattisgarh for setting up cement plants and power plant in the state at a total cost of Rs 628 crore.
Godawari Power & Ispat’s net profit rose 81.7% to Rs 38.05 crore on 88.3% rise in sales to Rs 320.44 crore in Q1 June 2008 over Q1 June 2007.
The company is engaged in manufacturing steel intermediate products like sponge iron and ferro alloys and finished long steel products like billets, wire rods and mild steel wires, which find application in the construction and infrastructure sectors. The group operates in three segments namely steel, electricity and others.patelarp@gmail.comFor AIG, $85 billion might not be enough
Thu, 18 Sep 2008 04:21:00 +0000American International Group's deal with the government is a bankruptcy liquidation in all but name, and the $85 billion it has borrowed may not be enough extra money to pay off all its obligations, particularly in its derivatives books.
AIG had $971.7 billion of liabilities at the end of June, but a subsidiary also has about $447 billion of credit derivatives on its books. That compares with a little more than $1 trillion of assets.
There is a real question mark around the credit derivatives. The $447 billion is the amount of principal the company has protected, but how that translates to actual losses is difficult to forecast without detail about the real risk.
But even if AIG does not ultimately make payouts on the credit default contracts, it could have to post more collateral and write down the derivatives as markets gyrate. Financial companies have continually underestimated their potential risk during the credit crisis, and this time may not be different.
"There is substantial risk in that credit derivatives book, " said Sean Egan, co-founder of rating agency Egan-Jones Rating Co. AIG declined to comment.
The government has a major role in AIG's operations now -- it essentially named a new chief executive, Edward Liddy, and owns nearly 80 per cent of the company's stock.
But the government is widely expected to sell off AIG's assets to get its money back, rather than aggressively pursue new business, because the United States' main priority is to get its money back, rather than to maximize profit for shareholders, experts said.
"I can't imagine they'll be in business creation mode, " said Dan Alpert, a banker at Westwood Capital in New York.
Customers, meanwhile, are likely to try to reduce their business with AIG. Worried clients in Singapore thronged the office of an AIG unit earlier this week to try to redeem their policies. Press reports said the same happened elsewhere in Asia, one of AIG's most important markets.
"To say that confidence has been shaken is an understatement. In the insurance business, trust is of the utmost importance, " said Walter Todd, portfolio manager at Greenwood Capital Associates in Greenwood, South Carolina.
In other words, AIG can't grow out of its problems, and will in fact likely be forced to shrink. But selling off assets to meet obligations is difficult when most other financial institutions around the world are reducing the assets, depressing valuations.
When it's all said and done, AIG might not have enough...Source: www.financialexpress.compatelarp@gmail.comEquities seen sliding for the 8th session
Thu, 18 Sep 2008 04:21:00 +0000Equities are set to extend their losing streak to eight sessions in a row on Thursday, with emergency actions by central banks and governments around the world failing to ease a financial crisis.
Asian stocks tumbled 3-4 per cent in morning trade after Wall Street slid to a three-year low on Wednesday as the US rescue of insurer AIG failed to ease a confidence crisis and banks were wary of lending to each other.
On Wednesday, No. 2 US investment bank Morgan Stanley and top US savings and loan Washington Mutual were reportedly up for sale.
"Watch out for a 500-600 point weaker opening, " V.K. Sharma, head of research at Anagram Stock Broking, said. "If we slide at this rate, we run the risk of triggering margin calls in the next sessions."
The 30-share BSE index dropped 1.9 per cent to 13, 380.56 on Wednesday taking its losses in the last seven sessions to more than a tenth. It is down nearly 35 per cent this year.
The flight of foreign funds from Indian shares has shredded investor confidence, traders said. The funds have sold Indian shares worth $8.7 billion so far in 2008 with $1.3 billion in September alone.
Annual inflation in early September is expected to have eased for the fourth consecutive week but should be still above 12 per cent, a Reuters poll showed. The data is due at 6 p.m.
By 0330 GMT, Japan's Nikkei was down 3.2 per cent and MSCI's measure of other Asian stocks was 3.6 per cent lower. Nifty futures traded in Singapore was down almost 4 per cent.patelarp@gmail.comNew order engineers recovery in McNally Bharat Engineering
Thu, 18 Sep 2008 04:21:00 +0000McNally Bharat Engineering Company surged 3.45% to Rs 109.50 at 14:36 IST on BSE, after the company said on Wednesday, 17 September 2008, it has bagged an order worth Rs 87.12 crore from Damodar Valley Corporation.
The company made this announcement during trading hours today, 17 September 2008.
Meanwhile, the BSE Sensex was down 167.01 points, or 1.24%, to 13, 351.79.
On BSE, 2, 751 shares were traded in the counter. The stock had an average daily volume of 19, 054 shares in the past one quarter.
The stock hit a high of Rs 110 and a low of Rs 107 so far during the day. The stock has a 52-week high of Rs 316.90 on 17 December 2007 and a 52-week low of Rs 102 on 16 September 2008.
The small-cap stock had underperformed the market over the past one month till 16 September 2008, falling 17.14% as compared to the Sensex’s decline of 8.19%. It had also underperformed the market in the past one quarter, declining 28.79% as compared to the Sensex’s decline of 12.19%.
The company’s current equity is Rs 31.09 crore. Face value per share is Rs 10.
The current price of Rs 109.50 discounts Q1 June 2008 annualized EPS of Rs 5.24, by a PE multiple of 20.90.
In July 2008, McNally Bharat Engineering Company (MBECL) bagged an order worth Rs 246 crore from Vedanta Alumina.
In June 2008, the company bagged an order worth Rs 47.30 crore from Mundra Port and Special Economic Zone, Ahmedabad for supply of four rail mounted bucket wheels.
MBECL’s net profit fell 7.1% to Rs 4.07 crore on 18.6% increase in net sales to Rs 131.80 crore in Q1 June 2008 over Q1 June 2007.
The company provides turnkey solutions in the areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supplySource: www.capitalmarket.com'patelarp@gmail.comJaipan Industries reaches a summit
Thu, 18 Sep 2008 04:21:00 +0000Jaipan Industries was locked at upper limit of 5% of Rs 168.10, a lifetime high, at 14:38 IST on BSE, extending gains for the 24th trading session in a row.
Meanwhile, the BSE Sensex was down 201.47 points, or 1.46%, to 13320.96.
On BSE, 77846 shares were traded in the counter. The scrip had an average daily volume of 31, 818 shares in the past one quarter.
The stock had a 52-week low of Rs 11.05 on 26 March 2008.
The Jaipan stock has surged 220.49% in past 24 trading session to Rs 168.10 from Rs 52.45 on 12 August 2008.
The scrip had outperformed the market over the past one month till 16 September 2008, soaring 176.99% compared to the Sensex’s 8.19% fall. It had also outperformed the market in the past one quarter, surging 339.23% compared to Sensex’s 12.19% fall.
The small-cap home appliances maker has an equity capital of Rs 6.10 crore. Face value per share is Rs 10.
The current price of Rs 168.10 discounts its Q1 June 2008 annualised EPS of Rs 1.70, by a PE multiple of 98.99.
The net profit of Jaipan Industries rose 100% to Rs 0.26 crore on a 85.5% rise in sales to Rs 7.16 crore in Q1 June 2008 over Q1 June 2007.
Jaipan Industries makes various home and kitchen appliances under the brand name of Jaipan. It is also specialized in manufacturing consumer durable products. Jaipan has a very strong presence in direct marketing, distribution, teleshopee, multi level marketing and corporate sales in India.patelarp@gmail.comRNRL tops volumes on BSE
Thu, 18 Sep 2008 04:21:00 +0000IFCI, ICICI Bank, GVK Power & Infrastructure and Austral Coke & Projects are among the other volume toppers on BSE.
Reliance Natural Resources (RNRL) declined 3.25% to Rs 77.30 on a volume of 1.27 crore shares on BSE. It was the top traded counter on BSE in terms of volumes. The family memorandum of understanding between Anil Ambani and Mukesh Ambani based on which the Reliance empire was split continues to remain the main point of argument in the ongoing case between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) over sharing of natural gas from the KG basin.
IFCI slumped 3.67% to Rs 39.35 on a volume of 97.48 lakh shares and stood second in the list of top traded counters on BSE.
ICICI Bank tumbled 5.32% to Rs 559.90 on a volume of 68.63 lakh shares on BSE. It was the third top traded counter on BSE. The bank today, 17 September 2008, denied rumors of sale of shares by the top management. "These rumours are baseless and irresponsible, and no shares have been sold by members of the top management of the bank during the current year, " the bank said in a statement.
GVK Power & Infrastructure slipped 2.65% to Rs 33 on a volume of 58.12 lakh shares on BSE. It was the fourth top traded counter on BSE.
Austral Coke & Projects galloped 11.61% to Rs 267.75 on volume of 58.09 lakh on BSE and stood fifth in the list of top traded counters on BSE.source:www.capitalmarket.compatelarp@gmail.comAkruti City leads gainers in 'A' group
Thu, 18 Sep 2008 04:21:00 +0000Tata Motors, Cairn India, KSK Energy Ventures and Indian Bank are among the other gainers.
Real estate developer Akruti City spurted 7.22% to Rs 793.80. It topped gainers in BSE's A group shares.
India's largest commercial vehicles maker in terms of market share Tata Motors jumped 4.84% to Rs 417.70. It was the second biggest gainer in A group.
Private sector oil explorer Cairn India moved up 4.81% to Rs 208.05. It was the third biggest gainer in A group. The stock moved up after crude oil gained $3.15 to $94.30 a barrel today, 17 September 2008, following a $85 billion bailout of American International Group.
KSK Energy Ventures, which undertakes power plant projects, flared up 4.63% to Rs 211.40. It was the fourth biggest gainer in A group. The company said in a statement on, 16 September 2008, the shareholding of Lehman Brothers and its units in the company was locked in for a year. Lehman affiliates hold 28.41% in the company, which they had acquired as a part of a pre-initial public offer (IPO) transaction.
State-run Indian Bank rose 4.08% to 130. It was the fifth biggest gainer in A group.patelarp@gmail.com
The Axon board has withdrawn the Infosys offer recommendation. The board will unanimously recommend the HCL offer when it is made reports CNBC-TV18 quoting sources.
Infosys had offered 600 pence per share for Axon on August 25 and HCL tech had offered 650 pence per share for axon on September 26.
Earlier CNBC-TV18 had reported that the 60-hour deadline to Infosys to get back to Axon has expired. As it was previously estimated with Infosys, the deadline was only a safety precaution that the Indian IT major was entitled to under the earlier agreement. In that time period, the Axon board could not withdraw its recommendation to Infosys offer.
Once that deadline has passed, the Axon board is free to withdraw its recommendation of Infosys offer to its shareholders. But there is a caveat here. It does not mean that the Axon board will withdraw its recommendation. But given the offer that HCL has put forward to Axon is much higher – nearly 3.8% higher than Infosys – in all probability the board will side with the higher offer.
It is a pure cash deal; there are no shares to be exchanged. Therefore, the Axon shareholders just have to sell and get out of the company. The company will be delisted if the open offer or the Scheme of Arrangement goes through. Both the parties have a 1% inducement or break-up fee depending on which party you talk to.
Infosys had offered 600 pence per share for Axon on August 25 and HCL tech had offered 650 pence per share for axon on September 26.
Earlier CNBC-TV18 had reported that the 60-hour deadline to Infosys to get back to Axon has expired. As it was previously estimated with Infosys, the deadline was only a safety precaution that the Indian IT major was entitled to under the earlier agreement. In that time period, the Axon board could not withdraw its recommendation to Infosys offer.
Once that deadline has passed, the Axon board is free to withdraw its recommendation of Infosys offer to its shareholders. But there is a caveat here. It does not mean that the Axon board will withdraw its recommendation. But given the offer that HCL has put forward to Axon is much higher – nearly 3.8% higher than Infosys – in all probability the board will side with the higher offer.
It is a pure cash deal; there are no shares to be exchanged. Therefore, the Axon shareholders just have to sell and get out of the company. The company will be delisted if the open offer or the Scheme of Arrangement goes through. Both the parties have a 1% inducement or break-up fee depending on which party you talk to.
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