DELAY IN REFORMS COULD SEE OIL SUBSIDY SPIRAL TO INR 190,000 cr IN FY12 : MORGAN STANLEY

Investment bank Morgan Stanley reports that a delay in reforms on fuel subsidy could see the outlay rise up to around INR 190,000 cr during FY2012-13. Lack of price rises in that of petrol and diesel would see the subsidy bill spiral out of control in India, which heavily subsidizes fuel.

As a result of these events, the firm is negative in its outlook on oil stocks and has downgraded ONGC to equalweight from overweight. GAIL, meanwhile has an underweight rating on its equity on declining oil volumes and higher imports. (Moneycontrol)

EQUITY UPDATE: 22 AUGUST 2012

ASIA

CnooC – China’s offshore drilling firm saw its 1HY12 profit decline 19 percent on a y/y basis to RMB 31.9 b vs prv RMB 39.3 b on higher costs and lower gas output. The co. reduced its interim dividend by 40 percent to HKD 0.15 a share to save up for its USD 15.1 b takeover deal of oil firm Nexen. Oil production output declined 4.6 percent to 161 m barrels. The oil spill at its Penglai field contributed to the fall in output. (Financial Times)

Thailand’s 2Q12 GDP expanded 4.2 percent vs growth of 0.3 percent in the prv quarter. The emergence of the nation from the flood crisis affecting it last year saw a strong comeback from sectors such as tourism, manufacturing and construction. (Financial Times)

INDIA

According to the Reserve Bank of India’s minutes, five of the seven external members of the advisory committee favored the governor’s decision to keep interest on hold in July. The advisory committee members were in opposition to the bank’s surprise rate cut in April. (MoneyControl)

The research firm Dun & Bradstreet, expects Indian economy to grow at a 6 per cent rate during the current fiscal.  Research firm cited unsatisfactory progress in monsoon, posed an upside risk to overall inflation. As food prices remained elevated. (MoneyControl/PTI)

FII’s made gross purchases of INR 2,220.91cr and sales of total of INR 2,079.54cr. DII’s made gross purchases of INR 1,022.73cr and gross sales of INR 1,164.37. (Business Standard)

Bharti Airtel – Telecom firm saw its stock downgraded by Morgan Stanley to equal weight from overweight with a price target of INR 280. Pressures on operating margins arising from expansion and higher traffic coupled with intensity in tariff competition could affect the co. further. Lowering 3G rates was also cited weighing on its dismal results. (Economic Times)

ONGC – Offshore drilling firm is to extract geothermal energy from the South Cambay basin in Gujarat with a 50:50 joint venture with Talboom. (Economic Times)

Tata Steel – Co. to pay USD 471.17m to redeem its FCCBs maturing on 5 September 2012. (Business Standard/PTI)

Gail – Co. has cut its stake in ONGC’s Dahej project to 15.5 per cent from 19 per cent as project cost escalated by 9.5 per cent. (Business Standard/PTI)

L&T – Utility and engineering firm’s subsidiary L&T Const. saw its orders received rise to INR 2044 cr in the second quarter period. (Economic Times)

Wockhardt – Pharma firm received US FDA permission to market the generic version of the Felodipine tablets in the U.S.(Business Standard)

Tata Global Beverages – Co.  and European Bank of Reconstruction and Development, together acquired the remaining 49 per cent shares of SuntyCo Holdings. (The Hindu Business Line)

EUROPE

Great Britain posted a budget deficit of GBP 557 m (USD 878 m) vs a surplus of GBP 2.84 b a year ago for the July 2012 period on a y/y basis. Expectations came in at a surplus of GBP 2.2 b. Lower corporate tax collections partly on closure of the Elgin gas field in the North Sea contributed to the deficit. Government spending rose by 5.1 percent and tax revenues declined 0.8 percent. (Bloomberg)

According to PIMCO’s Mohamed El-Erian, capping interest rates to control the borrowing costs of European countries was a not a likely option for the ECB to adopt. Mohamed EL-Erian further added that, capping yield levels signaled unlimited intervention. (Economic Times/Reuters)

Glencore International plc – Miner did not back down to demands from Qatar’s Sovereign wealth fund to improve terms of its takeover plan of Xstrata plc. The sovereign fund is a 12 percent stakeholder in Xstrata which collectively negotiated better terms from Glencore. The deal was stated by Glencore Chief Ivan Glasenberg as not a must-do deal which explains its firm stance. In related news, the co. reported a 26 percent decline in its 1HY12 profit to USD 1.8 b vs exp of USD 1.6 b on lower prices of commodities. The co. declared a dividend of 5.4 cents a share. (Financial Times/Bloomberg)

Julius Baer – Asset management firm plans to reduce its rights issue from Swiss Franc (SFr) 750 m to SFr 500 m on shareholder backlash. (Financial Times)

NORTH AMERICA

Best Buy Inc – Retailer saw its 2Q12 profits drop 91 percent on higher restructuring costs which prompted the co. to suspend its earnings guidance. Shares declined 10 percent to USD 18.16 a share over prv period’s decline of 10 percent over the failure of the co.’s former chairman’s r takeover plans. Sales came in 3 percent lower at USD 10.5 b. Profits came in at USD 12 m vs USD 128 m a year ago. EPS came in at 4 cents vs 34 cents a year ago. Restructuring charges amounted to USD 91 m. EPS excl charges came in at 20 cents vs exp. 31 cents. (Financial Times)

WEEKEND EQUITY UPDATE: 18 AUGUST 2012 – 19 AUGUST 2012

ASIA

Prices of new homes in China rose in 49 of the 70 cities in July over the previous month’s data. The cutting of interest rates, improved sentiment and incentives for new home buyers weighed in on the data. Prices declined in nine cities and were unchanged in twelve. (Bloomberg)

INDIA

FII’s have infused a total of USD 11 b in Indian equities in 2012 on a YTD basis. USD 1 b alone came in the month of August as the government could put in a fresh round of initiatives and reforms to stimulate the slowing economy. (Economic Times)

The combined market capitalization (m-cap) of top ten co.’s rose by INR 17,658 cr for the week ended 17 August. Reliance Industries contributed the most with gains of INR 10,696 cr followed by ONGC, Coal India, Infosys while TCS, HDFC Bank, ITC and NTPC saw their m-caps decline over the week. (Economic Times)

ONGC Videsh Ltd – OVL, the overseas arm of ONGC, is planning to invest in oil fields in Russia, mostly in the Arctic Ocean with joint-ventures. The co. is to form JVs with ExxonMobil and ENI. (Business Standard)

Tata Steel – Co.’s Ferro Alloys and Mineral Division to add 1.1 lac tons of ferro chrome and silico manages production capacity by 2012 at its Odisha plants.  (Financial Express)

Reliance Power – Co. refuted allegations made by India’s Comptroller and Auditor General (CAG) that the firm benefitted from the auctions of the coal mines. The co. is alleged to have made benefits of INR 29,000 cr by diverting its surplus coal output for its operations in Sasan, MP, India. The co, has stated that the allegations are erroneous and the co. did not receive any undue benefits. (Economic Times)

Lanco Infratech Limited – Co.’s management plans to increase the coal out to 5.5m tons per annum but March 2014 at its Griffin coal mines located in Western Australia. The Griffin coal mines are expected to hold total reserves over 1.1b tons and co. is expected to secure various clearances by the end of the current financial year. (The Hindu Business Line)

United Bank of India – Co. expects to recover INR 400-500cr in cash in this financial year, as gears up to fasten its recovery process, according to co.’s Executive Director Deepak Narang. (Business Standard/ PTI)

EUROPE

According to a German weekly magazine report, ECB is considering setting interest rate thresholds for any purchases of struggling euro zone country’s bonds so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds. In other news the weekly magazine also reported that, Greece will likely need to cut additional EUR 2.5b in spending over the next two years to meet the requirement for financial aid. Der Spiegel cites an interim report by the troika. (Economic Times/Reuters)

Spain’s Economy Minister Luis de Guindos stated that the bank bailout fund would take care of restructuring and recapitalizing the banks. The funds received from the EU will be put up for approval by the Cabinet by 24 August. The non-performing assets of the bad banks will be transferred into the FROB fund to access loans. (Bloomberg)

Germany’s Finance Minister Wolfgang Schaeuble dismissed talks of providing a fresh round of funding to Greece even though the state of country remains in a difficult situation. The nation has received two rounds of funding worth EUR 240 b since the onset of the crisis. With GDP expected to contract at a slower pace in the next two years on the funding, Germany is aware of the additional constraints on the EU and other nations if the funding were to continue. (Bloomberg)

The U.S Justice Department have started investigating Deutsche Bank to understand its possible role in the transactions linked with Iran, Sudan and other nations currently facing international sanctions. (Reuters)

NORTH AMERICA

Rating agencies Moody’s and S&P are to face lawsuits filed by investors for falsely assigning inflated ratings to debt backed by subprime mortgages. Morgan Stanley sold the notes during the 2008 crisis incl. The Abu Dhabi Commercial Bank. (Bloomberg)

Caterpillar – Heavy equipment manufacturer stated that the uncertain outlook of the global economy was worse than the state during the 2008 crisis. Lower demand in the construction and infra sector on account of the slowdown has affected the co in terms of lower orders. (Financial Times)

 

 

 

 

 

 

EQUITY UPDATE – 14 AUGUST 2012

ASIA

China Mengiu Dairy Co.- Dairy product producing firm is in talks to acquire China Modern Dairy Holdings Ltd. (Bloomberg)

INDIA

Investments by Private equity funds in India declined 39 percent on a y/y basis for 1HY12 period. Total investments totaled USD 9.8 b vs prv USD 14.9 b. Fundraising totaled USD 17.2 b and could be in line to achieve a target of USD 38.5 b, an amount raised in FY11. Fund raising in China also declined 8 percent, saw a 53 percent increase in Brazil with 42 percent in the Mid-east. Indian investments declined on account of volatility in the rupee, investment and regulatory policies. (Economic Times)

Maruti Suzuki India – Co. plans to resume partial operations at its Manesar plant next Tuesday. Initial work is expected to start with automated operations before workers resuming work. (Economic Times)

ONGC – Co. discovered an oil field in Tamil Nadu, India. The exploratory well produces 115 cu. Mt per day and 11,500 cu mt of gas in the Cauvery Basin block. (Economic Times)

EUROPE

The Euro Zone GDP for the 2Q12 period declined 0.2 percent, in line with estimates. Many major economies such as Spain and Italy undertaking budget cuts and implementing austerity measures weighed in on the data. Germany’s better than expected growth offset the negative growth of Spain. Italy also saw its GDP decline 0.7 percent while Spain’s GDP fell 0.4 percent on a q/q basis. As many as six nations face q/q GDP declines leading to a technical recession. (Bloomberg)

Greece raised EUR 4.06 b worth of T-bills today to repay a EUR 3.2 b bond loan to the ECB. Yields on the 3 month bills came in at 4.43 percent vs 4.28 percent from prv auction. Bid to cover ratio, a gauge of demand came in lower at 1.36 vs 2.12 previously.  The nation is expected make an obligation payment on 20th August to the ECM which rejected the nation’s proposal to delay the repayment by a month but raised the ceiling on the amount of bills used as collateral for obtaining additional loans. (Financial Times)

AP Moller Maersk – Container ship operating firm saw its 2Q12 profit come in at USD 227 m vs prv loss of USD 599 m. On a consolidated basis, the firm saw profits decline 39 percent y.y to USD 965 m. But the strength of its shipping business saw the co. raise its earnings guidance to around USD 3.4 b. (Financial Times)

Manganese Bronze – London’s black cab manufacturer saw its shares decline 32 percent to GBP 0.17 a share in trade on IT system errors after discovering a GBP 3.9 m deficit in its accounts. (Financial Times)

RWE – Electric utility firm stated that its plan to cut annual costs by upto EUR 1 b by 2014 could see around 2400 job cuts. (Financial Times)

NORTH AMERICA

U.S Retail Sales rose more than forecast for July on higher spending seen at department stores, electronic stores. Sales rose 0.8 percent in July vs expectations of a rise of 0.3 percent vs  decline of 0.7 percent in June. The 13 major categories of the index also registered growth, mitigating fears of slowdown in the economy. Same store sales rose 4.4 percent vs exp. Gain of 0.3 percent. (Bloomberg)

Home Depot – Co. saw its 2Q12 profit rise 12 percent to USD 1.53 b vs USD 1.36 b previously. EPS came in at USD 1.10 a share vs exp. 97 cents. These results prompted the co. to raise its forecasts to USD 2.95 a share vs exp. USD 2.92 a share. Revenues for the firm rose 1.7 percent to USD 20.6 b. (Bloomberg)

DAILY MARKET REPORT – 13 AUGUST 2012

Increased buying in large caps such as L&T, SBI, Reliance and HDFC saw buying momentum pushing markets to close higher in trade today. The rangebound trades for the last two weeks sees the market await some kind of a trigger to give it direction in the coming periods. The Sensex closed 75.71 points higher to close at 17633.45 points, while the Nifty closed 27.50 points higher at 5347.90 points.

On the global market scenario, Asia ended lower, but on a marginal basis on concerns of a slowing global economy. Japan reported lower than expected at 1.4 percent vs expectations of 2.7 percent growth. Sure to slow down hopes of a recovery. On the European markets, Greece’s lower GDP numbers did not bother investors, as they pared losses to trade marginally higher.

On the individual stock front, Sterlite rose 2.66 percent, ONGC saw higher volumes of profit booking to cut its gains of 3.5 percent to 0.5 percent. KingFisher airlines gained 20 percent hitting an upper circuit even though it reported lower earnings. Possible reasons could be that the stock was sold short all the while and markets participants do not expect the rally to hold further. Maruti gained on expectations of the co. restarting operations at its Manesar plant.

Kindly check the Market Summary tab for further information on stock-related data.

(Moneycontrol and Economic Times)

WEEKEND EQUITY UPDATE: 4 AUGUST 2012 TO 5 AUGUST 2012

INDIA

FII’s investing through the Mauritius route has exited their holdings in about 24 Indian companies in FY12 on a YTD basis. Co.’s such as Yes Bank, Axis Bank, Bajaj Hindustan all saw selling pressure from the FII’s who have exited their positions from these companies. The total value of the sale of shares is about INR 3000 cr. (NDTV Profit)

According to the Centre for Monitoring Indian Economy (CMIE), an economic research organization, profits of Indian firms are expected to rise by around 25 percent in the FY13 period on lower commodity prices and stable interest rates. FY12 saw profits decline by 0.6 percent. The organization also stated that firms would have incorporated the impact of the fluctuation in the Rupee as well as compared to the previous fiscal. (NDTV Profit)

Indian foreign exchange reserves increased by USD 1.3b to USD 288b over the week ended 27 July. Foreign currency assets at USD 256b, gold reserves 25.7b, drawing at USD 4.3b and reserve position at the IMF at USD 2.1b. (Business Standard)

The top eight companies on the Sensex saw their market capitalization rise by INR 35,882 cr for week ended 3 August 2012. NTPC gained the most by adding INR 10,926 cr with Reliance Industries following the firm. SBI, Infosys, ONGC also rose but Coal India and Bharti Airtel saw a decline in their values. (Economic Times)

Coal India Ltd – Co. has entered into a fuel supply agreement with 29 power plants in India to supply these firms with fuels for power generation, based on a directive from the Indian Government. The co. will also import around 20 m tonnes of coal to meet the supply shortage gap. (Economic Times)

Jindal Steel and Power – Co. is in advanced talks to plan an investment of INR 100,000 cr to expand output at its plants in Raigarh and construct new plants in Odisha and Jharkhand in India. The total expected output by 2020 is about 20 m tonnes per annum, as stated by Chairman Navin Jindal. (Economic Times)

Emami – FMCG firm has voiced concerns that rising costs of raw materials and a higher inflation could affect the firm in FY12-13 period. However, the co. plans to implement certain cost efficient measures and strengthen its distributor network to overcome these challenges. (Economic Times)

NTPC – India’s power producer would conduct capital expenditures of INR 138,000 cr on various power projects to increase its power output to 27,000 megawatts. A total of INR 95,965 cr would be funded from issuing debt securities. (Economic Times)

Maruti Suzuki – According to Haryana Chief Minister Bupinder Singh Hooda, expected co.’s Manesar plant to resume production shortly. However he did not provide a time-line for the plant to resume its activities. (Financial Express)

Jet Airways – FII holdings in co. increased from 6.70 per cent to 7.12 per cent during the 1Q12-13. (Economic Times/PTI)

Kingfisher Airlines – FII holdings in co. increased from 0.34 per cent to 0.98 per cent during the 1Q12-13. In others news, Airport Authority of India (AAI) has refused aircraft lessors to take back their aircrafts leased to co., as co. owes INR 300cr to AAI.  (Economic Times/PTI/The Hindu Business Line))

SpiceJet – FII holdings in co. increased from 2.61 per cent to 3.59 per cent during the 1Q12-13. (Economic Times/PTI)

EUROPE

According to Italian Prime Minister Mario Monti, the Italian Government did not require German cash to recover from its current situation. (Reuters)

The Spanish finance minister Luis de Guindos, the Spain had covered 70 per cent of its 2012 financing need and will wait for clearer guidelines from ECB, before requesting for aid. (FoxBusiness DowJones Newswire)

Yields on Spanish two-year notes declined 1.35 percent to 3.96 percent and 10 yr bonds fell below 7 percent on speculative news of the ECB buying short-term bonds to calm the bond markets. Spain’s bonds returned -6.3 percent while German debt provided returns of 4.5 percent and Italy with 6.5 percent. (Bloomberg)

According to the inspectors from IMF, the European Commission and the European Central Bank said that, Greece had made some progress in finding budget cuts needed to continue its bailout programme. However the international inspectors said that, not all work had been done and inspectors will return early September for a final verdict. Greece has a EUR 3.2b bond maturing in August. (The Telegraph UK)

Standard and Poor’s downgraded Slovenia’s long term credit rating to ‘A’ from ‘A+’; short term rating affirmed at ‘A-1’. Outlook: negative. (Economic Times/AFP)

Marks & Spencer – According to an Sunday Times reports, Bank of America Merrill Lynch have been assessing possibilities of providing debt financing for a speculative bid for co. Co. is been viewed as a GBP 6b bid target, as shares in co. have tumbled 50 per cent since 2007. (FoxBusiness/Sunday Times)

NORTH AMERICA

U.S Trade Deficit for June is expected to have lowered as the nation imported less oil  and slower growth reduced demand for U.S made goods abroad. Data due on 9 August forecasts deficit to come in at USD 47.5 b vs USD 48.7 b in May. Lower outlay on imports are due to lower prices of crude oil and lower exports due to slowing economies in Asia and Europe exhibiting lower demand for U.S made goods. (Bloomberg)

Boeing Co. – Airplane manufacturer secured orders to conduct the sale of 94 single-aisle 737 airplanes to Asian airline firms including 54 jet deal with Singapore Airlines Ltd. The deals are expected to touch USD 8.4 b. (Bloomberg)

 

 

DAILY MARKET REPORT – 1 AUGUST 2012

The markets ended on a flat note today on lack of global and domestic news. IT and Metal stocks saw pressure from sellers, while other declining exports and other PMI data caused investors to exercise caution today.

India’s exports declined 5.5 percent to USD 25.1 b in June with imports falling to USD 35.4 b, leading to a trade deficit of USD 10.3 b. The HSBC PMI data for China and India came out and both nations saw declining data, with India suffering its biggest month-on-month drop in the PMI. Elsewhere, European PMI data from Italy, France, Germany, U.K and the European Union all declined for the month of July, most notable the UK PMI. On the economic front, we have a lot of data coming from the US, with the ISM Manufacturing Index, its Non farm employment change data. But the biggest of them all is the U.S Federal Reserve’s decision on the interest rates followed by the FOMC’s statements. Could see the markets to remain choppy to end flat either sides. This, combined with ECB’s interest rate decision could lay the path for this week.

Asian markets declined, generally on China’s lower PMI data. Europe is mixed but marginally higher ahead of the Fed’s meet.

Coming back to the Indian markets, the Sensex closed at 17257.38, up 21 points (0.12%) on highs of 17291.99 and a low of 17189.16 points today. The Nifty closed 11.50 points higher at 5240.50 points on highs 5246.30 and a low of 5212.65 today.

On sectoral indices on the BSE, the Healthcare Index rose 1.32 percent, the Capital Goods Index rose 0.95 percent and Power Index gained 0.91 percent. The Metal Index declined 0.66 percent, the Oil & Gas Index was lower by 0.58 percent and the IT Index declined 0.40 percent.

On the stock front, Cipla rose 4.4 percent in trade on better than expected results. Reliance, L&T, Infosys and HUL rose between 0.4 – 0.8 percent. Tata Motors rose 0.6  percent after its sales for July rose 15 percent y.y to 74,159 units. Reliance overtook ONGC to become the most valued co. on market capitalization. Adani Power declined on lower results.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Business Standard, CNBC and Moneycontrol)

DAILY MARKET REPORT – 27 JULY 2012

The markets ended the week on a higher note, on buying in FMCG, Metals, while heavyweights such as BHEL, ONGC and L&T saw profit booking. Global cues played their part in boosting investor sentiment. We saw many banks reporting their earnings and banks with higher NPA’s did see some sell off’s post their results. Yesterday, ECB Mario Draghi stated that they would do their very best to prevent any kind of a collapse of the Eurozone. That was propped the Asian markets in the day. Asian markets rose on average by a 1 – 2 percent in hope of stimulus and rescue hopes.

The Sensex closed 199.37 points higher at 16839.19 points (+1.20%). The Sensex touched lows of 16776.16 and highs of 16975.03 points in intraday trade. The Nifty ended at 5099.85, up 56.85 points (+1.13%). It touched highs of 5147.75 and lows of 5079.40 points. Europe opened marginally higher but is mixed in trade.

On the stock front, Hero Motocorp declined 2 percent and Tata Motors rose 3 percent, recovering its losses of yesterday. ICICI Bank advanced 2 percent on higher earnings numbers. Sun TV declined massively on graft charges against its owners for taking bribes. TCS overtook ONGC to become the most valued firm at INR 137,500 cr. Most banking stocks were down on account of the weak financial numbers posted by various PSU banks.

Well, to end the report, US GDP numbers would come out tonight and could sum up the trend today.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Business Standard and CNBC)

DAILY MARKET REPORT – 25 JULY 2012

The markets covered their losses in trade led by buying in shares of ITC, Bank of India, L&T, ONGC and Bharti  Airtel. Global cues again painted a sorry picture of events occurring in Europe. We saw a lot of earnings data in Europe as well as India. Earnings did play its part when it came to stock specific trades.

According to Bank of America – Merrill Lynch India’s report, they observe that the trading pattern of the markets would see it remain range bound this year. Monsoon would impact inflation as well. S&P added to this by stating that banks in countries in the BRIC’s category would experience slowdown in the next 1 – 2 years, leading to depressed earnings and decline in the quality of assets.

The Sensex 30 closed at 16846.05 points, down 72 points (-0.43%). It touched highs of 16899.01 and lows of 16736.6 points in intraday trade. The Nifty declined 18.60 points to close at 5109.60 points. The index ranged from highs of 5121.60 points and lows of 5076.60 points in trade.

With regards to the sectoral indices on the BSE, the Metal Index declined 2.02 percent, the Consumer Durable Index slipped 1.75 percent and the Power Index closed lower by 1.4 percent. The Healthcare Index gained 0.3 percent, the FMCG Index rose 0.3 percent and the FMCG Index gained 0.2 percent.

The global markets in Asia declined in trade, ranging from 0.50 – 1.50 percent in trade. The reason – Spain again!! Economic data did not help matters much though but DAX, FTSE, CAC all are trading higher in trade. UK 2Q12 GDP declined more than expected. German Business Confidence data also declined, following Moody’s review of the country’s ratings.

On stock specific news, Kirloskar Industries, Vijaya Bank, Powergrid Corp, NIIT Ltd, Novartis India Limited, Jindal Steel, Yes Bank, HCL Technologies, were amongst the many which reported their earnings.

On the European front, Daimler and Peugeot exhibited dismal numbers, more so for Peugeot.

The Rupee still hovered above the 56 mark at 56.12 to the Dollar.

Commodities traded higher during the session with WTI at USD 88.83 up 0.37% and Brent trading at USD 103.45 up 0.03%. Later in the day EIA crude oil inventory data will be released. Previously inventory levels showed a drawdown of 0.809m. On the weather front, severe storm expected over Wisconsin, Michigan and the Great Lakes.

Kindly check the Market Summary tab for further information on stock-related data.

(CNBC, Business Standard and Economic Times)

WEEKEND COVERAGE : 21 JULY TO 22 JULY

ASIA

China’s 3Q12 GDP growth could slow to 7.4 percent on a y/y basis, as stated by an advisor to China’s central bank.  A short term deflationary period could also be posed to provide problems to the economy. (Bloomberg)

INDIA

According to economic think tank CMIE, the agricultural sector would perform well in FY2012-13 but major crop production is expected to decline 0.5 percent. The drop is due to decline in production of soyabean, cotton and rapeseed. Livestock, fisheries and forestry products are also expected to rise marginally by 4 percent, with agriculture industry expected to rise 2.4 percent. Delayed and insufficient monsoon is also expected to affect crop output. (Business Standard)

The market capitalization of top seven co.’s on the Sensex reduced by INR 14,931 cr for the week ended 21 July 2012. Major co.’s such as TCS, which led the losses by INR 5207 cr, saw ONGC, Infosys, ITC, SBI, HDFC Bank and NTPC post in loss of m-cap. However, Reliance Industries, Coal India and Bharti Airtel saw their market cap gain marginally over the week. (Economic Times)

FII’s have lowered their exposure (stake) in stocks of the co.’s under the umbrella of Reliance, owned by Anil and Mukesh Ambani. FII’s sold a total of INR 1500 cr worth of shares in Reliance industries owned by Mukesh Ambani and in four listed co.’s owned by Anil Ambani. Other investors which reduced their stake include offloading shares worth INR 500 cr, taking the total to INR 2000 cr. FII’s offloaded stakes on a marginal basis. (Economic Times)

Funds based in Mauritius which invest in the Indian equity markets will be under the purview of SEBI and RBI for possible transfer of illegal wealth of Indian and non-resident Indian’s back into India. Many funds have been identified as part of market regulator’s investigations. (Business Standard)

Sail – A proposed merger of SAIL and Neelachal Ispat Nigam will not go ahead as the government does not want to retain complete stakeholding in the co., as opposed to its earlier stance of divestment. Meetings with the Ministry of Commerce revealed its message of not going ahead with the merger. NINL is the largest producer of pig iron and divestment talks were on about the merger for over seven years. (Business Standard)

Sail/Nalco/JSPL/Monnet Ispat/MECL/Others – Co.’s to bid for developing copper deposits in Afghanistan. (Economic Times/PTI)

Maruti Suzuki – According to co.’s management dispatch operations to continue from the stockyard of Manesar plant, which has a inventory of about 26,000 units

Tata Power – Co. expects its hydel power project in Bhutan to commence operations by FY2013-14 period. The 126 megawatt Dagchu project accounts for USD 200 m in which Tata Power has a 26 percent stake. (Economic Times)

Bajaj Auto – Co. expects that exports would account for almost 50 percent of its revenues in the next three years. Co. plans to explore markets such as Latin America, viz., Chile and Argentina. Its motorcycle sales are also expected to pick up in the said period, which accounts for 35 percent of their sales. (Economic Times)

JSPL – Co. is to acquire Canada-based coal firm CIC Energy in a deal worth USD 115 m (INR 600 cr). The co.’s will sign a binding agreement in the next few weeks. JSPL will get access to CIC’s 2.6 b tonne thermal coal plant for its power projects. (Business Standard)

EUROPE

According to Greece PM, Greece was in a ‘Great Depression’, similar to the one faced by the United States in 1930. The PM wants the budget below 3 per cent of GDP by the end of 2014 from the previous 9.3 per cent in of GDP in 2011. In related news, IMF is expected to cut off further rescue aid to Greece. (FirstPost/Reuters/FoxBusiness)

U.K’s 2Q12 GDP data, expected on 25 July, is expected to decline 0.2 percent, based on median estimates, deepening the double-dip recession. Previous quarter decline was 0.3 percent and 0.4 percent in 4Q11. (Bloomberg)

BP – Co. has proposed that its joint venture TNK-BP pay shareholders a USD 1b interim dividend. (Fox Business)

NORTH AMERICA

Argentina’s Factory output (Industrial Production) declined 4 percent in June, a second successive m/m decline. Slowdown in trade with Brazil affected Argentina in terms of exports of automobile and steel. Previous month decline stood at 4.7 percent and 0.1 percent drop in May. Estimates came in at a drop of 4.5 percent. (Bloomberg)

GEOPOLITICAL

According to Iran’s head of Atomic Energy Organization, Iran has sent a new batch of enriched uranium to fuel a medical research reactor in its capital. (Yahoo/ Reuters)