EQUITY UPDATE – 26 MAY 2012

ASIA

Shanghai Automotive Industry Corp. (SAIC) – Co. is to sell its 1 percent stake in the joint-venture with General Motors Co. in a deal valued at around USD 91.4 m. (Bloomberg)

INDIA

SAIL – Co. to complete the INR 16000cr plant expansion of its IISCO Steel Plant at Burnpur in West Bengal by year end. (The Hindu Business Line)

Suzlon – Co. to sell certain non-critical assets to raise between USD 100m to USD 200m in the current fiscal to pare its USD 2b debt, according to a senior official. (Reuters)

TVS Motor Company – Co. plans to invest INR 100 to 125cr in the current year on product development and R&D. Co. is expected to launch three two-wheelers in 4Q. (The Hindu Business Line)

NHPC Ltd – Co. stated that it would invest around INR 4000 cr vs INR 3546 cr previously,  in FY12-13 to develop various hydropower projects with a power generation capacity of 1200 megawatts. (Economic Times)

Reliance Communications – Co. to cut 3G rates by 61 per cent. (Rediff.com)

EUROPE

Bankia SA – Nationalised Spanish bank, Bankia SA, has requested the Spanish government to provide an additional EUR 19 b (USD 24 b) in financing to tackle losses from its mortgage loans. The amount was almost twice of what Spanish Finance Minister Luis de Guindos thought it would require.  In related news, the region of Catalonia added to concerns as it would also require additional capital from the central government as it is unable to raise funds due to high interest rates. The region aims to jointly guarantee bonds issued by regional institutions to raise capital. The credit rating of Catalonia was reduced to one notch above ‘junk’ credit rating by Standard & Poor’s. (Reuters)

French banks such as Credit Agricole, BNP Paribas and Societe Generale would be preparing for a contingency plan following a possible exit of Greece from the Euro zone. These banks have significant exposures in terms of lending activities to Greece. For FY11, the total lending amount was USD 44.4 b to Greece, out of which Credit Agricole accounts for EUR 5.2 b of loans, BNP Paribas accounts for EUR 2.9 b and EUR 0.4 b for Societe Generale. (Reuters)

According to the Charles Dallara, Managing Director of the Institute of International Finance, Greece’s exit from the eurozone could cost the region in excess of EUR 1 t (USD 1.25 t). The European Central Bank’s (ECB’s) loan exposure to Greece’s debt obligations and liabilities was estimated to be around twice the capital held by ECB. (Bloomberg)

Bank of England’s (BoE) policymaker Martin Weale stated that the central bank could conduct further stimulus measures on account of weaker GDP numbers. He also stated that UK could survive the impact of Greece’s exit from the eurozone. (Reuters)

NORTH AMERICA

The Thomson Reuters/University of Michigan’s Consumer confidence index rose in May to 79.3 points vs 76.4 from the previous month. The index number came in above expectations of 77.8. Improving jobs market and the housing sector combined with lower gasoline prices contributed to the higher outlook. (Bloomberg)

Dell Inc. – Co. is in talks to acquire Quest Software Inc., a designer of security software for USD 2.12 b. Other possible bidders include Microsoft, Oracle, BMC Software Inc, CA Inc. (Reuters)

Boeing – Indonesia’s Lion Air is close to signing a deal of USD 1.9b for 10 787-8 Dreamliner passenger jets. (Reuters)

Talbots Inc – Co.’s shares declined sharply by 39 percent in Friday’s trade as it could not reach an agreement with private equity firm Sycamore Partners, which planned to acquire Talbots. The offer was at USD 3.05 a share which valued the co. at USD 215 m. (Reuters)

Suntech Power Holdings Co – Shares of the firm declined to a 7-month low as HSBC Holdings plc reduced its outlook on the co’s shares. HSBC reduced its target on the co. USD 1 – 1.27 a share on account of a larger than expected net loss of USD 133 m in its 1Q12 results. (Bloomberg)

WEEKEND EQUITY COVERAGE – 5 MAY 2012 – 6 MAY 2012

INDIA

Reserve Bank of India forecast March 2013 inflation rate at 6.5 per cent. However the latest inflation expectation survey of Households expects inflation rate at 12.5 per cent in March 2013. (The Hindu Business Line)

General Anti-avoidance rule (GAAR) – According to Indian government sources, the parliament will kick start plans on introducing a finance bill which includes the GAAR tax proposals with details expected in a month’s time. In related news, foreign institutional investors (FII’s) invested about INR 876 cr in the Indian equity markets for the first week of May on hopes that the government would review implementation of the GAAR provision. Despite heavy withdrawals experienced in April, there are widespread expectations that review of the tax proposal to take place. Indian markets have lost about an estimated value of USD 10 b in investments from FII’s and foreign-national individuals on taxation worries. (Economic Times/Business Standard/NDTV Profit)

The U.S government’s Secretary of State, Hillary Clinton will seek assurances from the Indian government to further reduce its oil imports from sanction-hit Iran. Clinton, who is on a three-day trip to India, also urged for the nation to review its policies related to multi-brand retail firms such as Wal-Mart Stores, to operate in the country. (NDTV Profit)

Infosys – The co.’s patent filings increased by 50 per cent as compared to FY11. Co. filed 143 unique patent applications with the United States Patents and Trademark Office (USPTO) and the Indian Patent Office. (The Hindu Business Line)

Jain Irrigation Systems – Co. signed a Memorandum of Understanding (MoU) with the University of Nebraska to develop technologies pertaining to conservation of water and sustainable food production. (Economic Times)

Sugar Co.’s – Total area under sugarcane plantation in the country increased to 48.61 Lakh vs. previous 47.61 lakh, according to government data. The sugar output poised to touch a record of 26mt with consumption pegged at 22mt. The International Sugar Organization (ISO) has forecasted the sugar output for FY12-13 at 24.5mt, down 5 per cent over previous year. However the National Federation of Co-operative Sugar Factories estimates output for FY12-13 at 25mt. (The Hindu Business Line)

Ruchi Soya – Co. has clarified that it has not been trading in guar gum commodities on the exchange. Media reports cited that co.’s name was included in the Forward Markets Commission report for guar gum price manipulation. The report includes approximately 4500 entities. (The Hindu Business Line)

Indian Overseas Bank – According to co.’s chairman and MD, the co. roughly required INR 9500cr capital by 2017-18 to Basel 3 capital requirements. (The Hindu Business Line)

Discoms – Losses at power distribution companies will account for up to 1.2 per cent of GDP by March 2014, if no reforms are done. (Indian Express)

Textile Co.’s – According to senior Textile Ministry official, the textile export target is raised to USD 38b in FY12-13, up 12 per cent from previous year. (Indian Express)

Idea Cellular – Co. added the maximum number of subscribers at 3.32m due to mobile number portability. Co. received 9.29m port-in requests vs. 5.97m port-out requests, the telecom minister informed Parliament (Economic Times/PTI)

Vodafone – Co. added the maximum number of subscribers at 2.89m due to mobile number portability. Co. received 11.04m port-in requests vs. 8.15m port-out requests, the telecom minister informed Parliament. (Economic Times/PTI)

Airtel – Co. added the maximum number of subscribers at 1.21m due to mobile number portability. Co. received 10.82m port-in requests vs. 9.61m port-out requests, the telecom minister informed Parliament. (Economic Times/PTI)

Reliance Communications – Co.’s GSM service received 1.79m port-in requests vs. 3.14m port-out requests. Co.’s CDMA service received 0.24m port-in requests vs. 1.72m port-out requests, the telecom minister informed Parliament.  (Economic Times/PTI)

Tata Teleservices – Co. GSM service received 2.89m port-in requests vs. 3.40m port-out requests, the telecom minister informed Parliament. Co. CDMA service received 0.09m port-in requests vs. 1.30m port-out requests, the telecom minister informed Parliament. (Economic Times/PTI)

BSNL – Co. GSM service received 1.68m port-in requests vs. 2.45m port-out requests, the telecom minister informed Parliament. (Economic Times/PTI)

MTNL – Co. received 0.03m port-in requests vs. 0.13m port-out requests, the telecom minister informed Parliament. (Economic Times/PTI)

EUROPE

BAE Systems – Co. is close to finalizing a deal with Saudi Arabian government to supply 30 Hawk trainer aircrafts in a deal worth GBP 500 m (USD 808 m). The order is expected to be finalized in the next two months. (Reuters)

Eurasian Natural Resources Corp plc (ENRC) – Co. is considering an option to spin off its international operations into a newly listed entity. The new entity would comprise of its operations in the Democratic Republic of Congo and its mines in Kazakhstan. (Reuters)

Graff Diamonds – Co. is set to launch its initial public offering (IPO) worth USD 1 b in Hong Kong’s markets on 21 May 2012. The company will start is roadshow from 7 May to gauge investor demand. (Reuters)

Thomas Cook Group plc – Co. received three-year loans worth GBP 1.4 b from its lenders. Thomas Cook’s high debt of GBP 890 m was severely affected. Lenders such as Royal Bank of Scotland, will receive warrants to subscribe for new shares of the company which represent 5 percent of the issued capital raised by the company. In other news, Co. is in the process of selling 77.1 per cent in its Indian business arm Thomas Cook (India) Ltd. Co. has received strong interest in its Indian operations, with Kohlberg Kravis Roberts (KKR), Carlyle and Travelex being strong contenders. (The Hindu Business Line/Business Standard)

America

According to Colombia’s Mines and Energy Minister Mauricio Cardenas, Colombia’s government plans to jointly work with Chinese companies for the construction and development of its oil pipeline in the Pacific coastal region. The pipeline would transport oil from the Caribbean coast to the Pacific coastal region. (Bloomberg)

Yahoo Inc – Co. is in talks to sell its 15 to 25 per cent stake in Alibaba Group back to the e-commerce company, according to a person familiar, but added that there was no guarantee. (Reuters/Business Standard)

INDIAN EQUITY UPDATE – 17 APRIL 2012

INDIA

Reserve Bank of India (RBI), in its survey cut its GDP growth estimate for FY 2012-13 to 7.2 percent. The report cited that even though inflation has moderated upside risks still persist. It also stated that prices of crude oil and a weakening rupee could pose inflationary risks this fiscal. (NDTV Profit).

Indian government plans to sell stakes in Balco and Hindustan Zinc as part of its divestment program in FY13. Vedanta Resources has offered INR 15,494 cr for a 29.5 percent stake in Hindustan Zinc and INR 1780 cr for the government’s 49 percent stake in Balco. (Moneycontrol)

Dabur India – Co’s sales have surpassed the USD 1 b mark in FY11-12. The company plans to speed up innovation for new products in the personal care and healthcare categories in order to maintain the momentum of growth. The company also plans to invest in a manufacturing plant in Sri Lanka and its overseas units. (Economic Times)

Tata Steel – Co. plans to invest USD 250 m (INR 2000 cr) in its UK facility which includes reconstructing a blast furnace in Wales at Port Talbot. No timeline for the proposed investment was mentioned by the company.

Tata Motors – Vehicle sales for the month of March increased by 26 percent on a Y-o-Y basis to 139,655 vehicles on account of strong performance of its Jaguar Land Rover vehicles. Sales of Tata Motor’s passenger vehicles increased by 41 percent at 75,864 vehicles for March on a Y-o-Y basis. (Moneycontrol)

Mahindra & Mahindra – Co.’s SUV Bolero has crossed one-lakh in sales in the last fiscal. Sales were recorded at 1,00,686 in FY11-12 vs. previous 83,112 in FY10-11. (Indian Express)

According to Oil Secretary G.C. Chaturvedi, India’s oil refining capacity is expected to increase by more than 43 percent to 310 m tones a year by 2017. With current productions at 216 m tones, de-licensing of petroleum refining undertaken by the government would help increase production levels in 2017. (Business Standard)

Crisil Limited – Co. reported 4Q total income stood at INR 229.74cr vs, previous INR 178.77cr. Net profit after tax at INR 56.98cr vs. 45.99cr. Co. declared a interim dividend of INR 3 per share on shares of face value INR 1. In addition to this on the occasion of co.’s Silver Jubilee year, co. declared a one time special dividend of INR 3 per share. (Money Control)

Sail India Ltd- Co. plans to increase the output of saleable steel by 4.8 per cent to 13 million metric tons in current fiscal, according to two government officials. Sales are expected to grow by 4.6 per cent to INR 519.33bn in FY12-13 vs. previous estimate of INR 496.18bn in FY11-12. (Dow Jones Newswires/S-traders.ocm)

Hindalco Industries – According to sources, co. is planning a 10 year bond sale to raise USD 291.66mn. (Economic Times)

HUL – Co. is likely to earn INR 300cr through a lease agreement with HDFC. (CNBC TV18)

Reliance Communications – Co, and entered into an partnership with Google to market all devices built on the Android platform for two years in India. (The Hindu Business Line/PTI)

Kingfisher Airlines – Co. cleared a second income tax department due of INR 9cr yesterday, however the due date was on 14 April 2012. (CNBC TV18)

IVRCL – Essel group said that it had no immediate plans to buy additional shares in co. In related news Merill Lynch buys 2.1mn shares in co. for INR 15cr. (Business Standard/Economic Times/PTI)