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NMDC $ 3 Bn share sale to open March 10

admin — Thu, 04 Mar 2010 03:34:58 +0000

A share sale in state-run miner NMDC Ltd to raise about $ 3 billion will open on March 10, and follow the standard book-building system for Indian offerings reports CNBC-TV18 quoting Sources. A price band for the issue will be announced on March 8, two of the sources, who did not wish to be named as they were not authorised to speak to the media, said on Wednesday.

Retail investors and NMDC employees are likely to get a discount of 5 percent to the discovered price, the sources said.

Infosys unit in Chandigarh SEZ under the Revenue Department’s scanner – Sources

admin — Thu, 04 Mar 2010 03:33:03 +0000

Infosys’ unit in the Chandigarh special economic zone (SEZ) is under the Revenue Department’s scanner, reports CNBC-TV18, quoting sources. The unit located at the Chandigarh Technology Park SEZ was developed by the Chandigarh administration.

Sources say the Revenue Department alleges gross violations of SEZ norms and that structures were in place prior to the SEZ approval. SEZ norms need vacant land before approval. Mundra Port and Essar SEZs in Gujarat faced similar issues. The Empowered Group of Ministers (EGoM) cleared the Mundra Port and Essar SEZ of violations in 2008.

The Revenue Department alleges that existing IT campuses were converted to SEZ and that the SEZ board of approval was misled. The department has called for the withdrawal of SEZ status. Sources say the Commerce and Revenue Secretaries are likely to discuss the matter soon.

When contacted, Infosys says it has complied with the SEZ regulations. The site has been inspected by authorities and full disclosure has been given to the board of approvals. “No existing campuses have been converted to SEZ.”

P&G has filed a case against Hindustan Unilever’s

admin — Thu, 04 Mar 2010 03:29:35 +0000

P&G has filed a case in the Calcutta High Court against Hindustan Unilever’s new ad campaign, which openly challenges the superiority of its product Rin over P&G’s Tide

The battle for market share in laundry segment has spread from pricing to other platforms now making it an open war. P&G has filed a case in the Calcutta High Court against Hindustan Unilever’s new ad campaign, which openly challenges the superiority of its product Rin over P&G’s Tide. CNBC-TV18’s Tanvi Shukla delves deeper on this new form of advertising and traces it back to what triggered the issue.

HUL’s new Rin campaign claims in an advertisement that Rin provides more brightness in comparison to Tide Naturals, which is the new product that P&G launched a couple of months ago in the mass segment positioning it against Rin as well as Wheel.

The reason that triggered this campaign is HULs new found aggression to regain market share and arrest the decline in market share that it has seen specifically in the laundry segment. Also, Tide Natural came up with an advertisement a few weeks ago where it claimed it provided whiteness with a special fragrance. HUL subsequently challenged Tide’s claim in the Chennai High Court. On March 1, the court asked P&G to modify the ad since they were not really able to substantiate the claim. A written judgement is still awaited on this matter.

Meanwhile advertising watchdog ASCI has said it has issued a notice to FMCG major HUL asking it to “substantiate” in 15 days its claim in a TV commercial that its washing powder Rin is better than rival P&G’s Tide.

When contacted, HUL denied receiving any notice from ASCI
and said the Rin commercial is in line with advertising code followed by the industry. “The claim is factual, accurate and substantiated as it is based on laboratory tests done through globally accepted protocols in independent third party laboratories,” an HUL spokesperson said.

A P&G spokesperson, on other hand, said, “We are aware of the disparaging advertisement on air against Tide Naturals and have filed a case against the same. The matter is currently being heard in the court and we are not in a position to comment on the outcome.”

In an interview with CNBC-TV18, Shripad Nadkarni, Founder Director, Marketgate consulting and Harish Bijoor, Brand Consultant & CEO, Harish Bijoor Consults Inc spoke on the issue.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: What did you make of this battle between Rin and Tide? Will the consumer of Rin bite?

Bijoor: The consumer out there is a new consumer today and the consumer wants to have some fun and at the end of the day I do believe this kind of in the eye kind of advertising which pokes fun at the other brand or talks about superiority of one brand over the other tends to work, consumers aren’t really concerned about the fact that possibly that was not the done thing and consumer’s love this and to an extent people tend to talk about it a lot, people have never have comment about the detergent dull detergent advertising are going to be talking about detergent advertising all of a sudden that seems to be the objective.

GENERAL MOTORS CORP

admin — Sun, 17 May 2009 11:36:39 +0000

GENERAL MOTORS CORP – CITI

Q1 2009 Results — GM reported adjusted Q1 EPS of $(9.66) excluding $0.12 in charges, above low expectations for a consensus loss of $(11.05). Revenue of $22.4 billion fell short of our $25.6 billion estimate. The company no longer reports segment results on an EBT basis but now provides EBIT by segment. Total adjusted EBT came in at $(6.0) billion, slightly ahead of our $(6.6) billion estimate. GMNA reported EBIT of $(2.8) billion, a $2.5 billion decline from last year. This was ahead of our expectation for a $3.9 billion decline in segment pre-tax profit as $2.3 billion in structural savings and pricing helped reduce pressure from $5.0 billion in profit decline related to volume, mix, commodities, and exchange. GME posted EBIT of $(1.2) billion, a year over year profit decline of $1.5 billion, which was only slightly ahead of our expectation. GMLAAM generated EBIT of $42 million, down $458 million from last year, which was also slightly ahead our estimate. GMAP posted EBIT of $21 million, a decline of $331 million. This decline was also slightly ahead of our estimate. Corporate and other now includes interest expense.

Cash Balances In-Line — Operating-related cash burn was $11.0 billion, including restructuring, slightly worse than our $10.6 billion estimate. Balance sheet cash balances ended Q1 at a low $11.6 billion, below our $13.0 billion estimate. Cash balances now include the Financing and Insurance segment. GM also reported $0.9 billion in debt extinguishment for a March 4 amendment to its $1.5 billion U.S. term loan due in 2013. We look for more details on this on the call.

Reiterate Sell — We maintain a Sell/Speculative Risk rating on the shares of GM. The company’s weak results and updated restructuring plan confirm challenging fundamentals and no resolution on stakeholder negotiations. Even if GM successfully obtains incremental government funding and equity for debt exchanges from the UAW and bondholders, shareholder dilution should be meaningful while leverage will likely remain high, with pro forma debt-to- EBITDA at a high 3.5x.

Investment strategy
We rate GM shares Sell/Speculative Risk on deteriorating credit conditions and unappealing valuations. The company’s February 17, 2009 restructuring plan confirmed worsening fundamentals, greater liquidity needs and no resolution on stakeholder negotiations. The new plan shows that even if the company successfully obtains incremental government funding and equity for debt exchanges from the UAW and bondholders, gross leverage would remain high at above 3 times with free cash flow prospects remaining bleak until 2012. With declining share values, existing shareholders will likely share a smaller piece of a GM’s shrinking residual equity if the company restructures successfully, as result of lower conversion prices for the debt exchanges
resulting in the UAW and bondholders obtaining an even larger majority of GM’s total shares. In the near term, we await progress with bondholder and the UAW debt exchanges, and the White House and U.S. Treasury Department’s response to GM’s latest appeal for an additional $9.1 billion in government support (including $2 billion in March 2009) to maintain cash balances at around $10 billion. By March 31, GM must submit to the government a certification of the plan. The President’s Designee will then determine whether these steps are sufficient to ensure long-term viability. (The designee would have authority to extend the certification date by up to 30 days.) If the designee ultimately fails to certify GM’s plan, the company then would likely file for bankruptcy protection.

Stock Advice On ITC

admin — Thu, 23 Apr 2009 13:11:05 +0000

Stock Advice On ITC – HSBC

Price increases on the Goldflake brand to add INR0.20 for FY10e EPS but slowdown in hotels reduces gains marginally

We still believe that the budget will be the single most important event for ITC; we revise our two scenarios

We arrive at a new price target of INR193 (previously INR172) based on SOTP and retain our Neutral rating.Price increases on Goldflake. ITC has raised the prices of Goldflake Kings from INR4 to INR4.4 per stick. We had mentioned in our previous report dated 18 February that Goldflake Regulars is another likely candidate for price increase and we now believe that the price increase in Kings will be shortly followed by one in Regulars, although the company has not confirmed this. We believe that the annualised impact of these price

increases on EPS is INR0.88. However, as the budget is due in Q2 FY10, we build in the impact only for Q1 FY10, which works out to INR0.20.

FMCG, hotels overhang likely to continue. We believe that the situation in the hotel industry is likely to turn out worse than what we had built in our estimates. We therefore reduce our FY10e hotels EBIT by 8.8%. We forecast FMCG losses in FY09e at INR4.6bn and we believe that this will come down to INR3.6bn for FY10e, which is still sizeable. We believe that these concerns are fairly priced in the stock. Our FY10e EPS changes from INR10.23 to INR10.38.

Change in estimates and valuation. Our EPS estimate for FY10e changes from INR10.23 to INR10.38 as a result of increase in cigarettes EBIT by 2.3% and decrease in hotels EBIT by 8.8%. We revise our scenario analysis to take into account these changes, as well as the absence of any tax hikes in Q1 due to the delayed budget this year. Our low tax scenario derives a price target of INR217 and high tax scenario, INR166. We take an average to arrive at our revised target price of INR193 and retain our Neutral rating.

World Recession

admin — Fri, 17 Apr 2009 08:51:50 +0000

The world economy collapsed into steep recession in the final quarter of 2008 with global real GDP dropping at a 6 percent annual rate. This was undoubtedly the sharpest decline in world output and especially in world industrial production and world trade of the postwar era, with virtually all countries participating in the downturn and many registering record quarterly declines in real GDP.Incoming data indicate that the global economic contraction continued through the first quarter of 2009, although perhaps at a somewhat slower pace than the preceding quarter. Downward momentum will likely continue at least through the spring. A number of forecasters and pundits foresee a global recession lasting through this year and perhaps well into 2010. However long the recession may last, the common expectation is that the recovery will be quite sluggish—the forecast of an L-shaped global recession and recovery. Despite a huge write-down in my global growth forecast from last September, I am more optimistic. Aided by substantial policy stimulus, growth in the Chinese economy should begin to accelerate in the first half of 2009 and the US recession should bottom out around mid-year with recovery accelerating to about a 4 percent annual rate by the fourth quarter. Recoveries in other countries will likely lag a little behind those in China and the United States. But, aided by a bounce-back in global trade from its recent extraordinarily sharp decline, the world economy generally will be in recovery by year-end. Then we will observe, as we have many times before, the Zarnowitz rule: Deep recessions are almost always followed by steep recoveries.

Before this recovery starts the world recession will become the deepest of the postwar era, with global real GDP falling about three-quarters of one percent on a year-overyear basis—the first significant decline of world real GDP in six decades. Output declines in the advanced economies (the traditional industrial countries plus Hong Kong, Israel, Singapore, South Korea, and Taiwan) will average 3 percent. Many emerging-market and developing countries, notably those in Central and Eastern Europe, will also see their real GDPs fall, but significantly positive year-over-year growth in China, India, and some other countries will keep growth for this broad and diverse group at about 1½ percent plus.

For 2010, global growth is projected to strengthen to 3.7 percent—a sharp rise from the preceding year but still somewhat below the potential global growth rate of about 4 percent. For the advanced economies, growth is expected to bounce back to 3 percent— enough to begin to narrow the margins of slack that developed during the recession. For emerging-market and developing countries, growth in 2010 is expected to rise to 4.7 percent, on its way back up to a potential growth rate above 6 percent.

Stock Advice On Sugar Sector

admin — Fri, 17 Apr 2009 04:11:43 +0000

About The Sugar Price Fluctuations

Though the whole market has been going up, sugar stocks are on a rise for the last over two weeks. This is mainly due to commodity prices having moved to Rs.25 per kg., ex-mill in U.P. and at Rs.24 per kg. in other parts of the country. Prices in retail has risen to over Rs.27 per kg.Inspite of the fact that first phase of general election has commenced today and would end on 13th May, in its fifth and last phase. Maybe, by then, prices may go up by another one rupee per kg.

Inspite of this, some people have the apprehensions of this being a politically sensitive commodity or not much sugar stocks available in the market. To answer both these, if global and Indian production of sugar is low, how any government can really control it? People need sugar to eat and its production can’t get increased by policies or merely by setting up the sugar mills. One needs sugarcane which takes 10 – 12 months to grow. Secondly, there are over 35 listed stocks available for investment and trading, of which 4 are in F&O segment. Since all these companies having produced sugar, will gain and would get reflected in the share prices. The companies are even making a profit of Rs.5 per kg.on sugar produced, from bagasse and molasses (by-products) which is enough to cover the cost of production from sugarcane to sugar, estimated at Rs.5 per Kg.

About The Sugar Sector Stock

Sweetness of sugar stocks will keep rising for next 6-8 quarters and those taking a time call on these stocks will gain.

Asian Markets & U.S. Markets – 15 April 09

admin — Wed, 15 Apr 2009 03:19:30 +0000

Asian Markets
Asian Markets are trading lower following cues from U.S. markets led by weak U.S. retail sales.

Nikkei Stock Average 225 was down 0.84 pct to 8,768.35 .
Hang Seng Index was down 1.84 pct to 15,294.10.
KOSPI Index down 0.94 at 1,329.96.Shanghai Composite Index was up 0.55 to 2,541.18.

U.S. Markets
On Wall Street,Stocks declined on weak U.S. retail sales.The Dow Jones industrial average lost 137.63, 1.71 percent, to 7,920.18.The Standard & Poor’s 500 index lost 17.23, 2.01 percent, to 841.50. The Nasdaq composite index lost 27.59, 1.67 percent, to 1,625.72.

Market Outlook – 9 April 09

admin — Thu, 09 Apr 2009 03:45:43 +0000

Indian stocks have risen sharply with taking support from global positive rally, this rally increase hopes to sweep dark cloud global economic recession .

SENSEX closing 10742.34 with gains +207.47 and Nifty closing on 3342.95 with gains +86.35

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