TOP STORIES

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Markets mauled on Europe debt debacle

The Greek storm continued to rattle world markets. Fears that Greece may not be the only eurozone economy in need of bailout cash sent world equity markets into a tailspin. Apart from stocks, commodities and emerging market currencies bore the brunt of the worldwide meltdown. Risk appetite tumbled and investors rushed to the safety of the dollar and bonds. The euro fell to a 14-month low on the dollar and one-year low on the yen, raising concerns over the currency’s reserve status. However, Spain's successful auction of a 5-year bond helped nudge the euro off 14-month lows. Spain sold 2.23 billion euros of five-year notes with a bid-to-cover ratio of 2.35. The maximum yield was 3.58%. Average yield was 3.532%. The yield was 2.816% when Spain sold €4.5bn of the same securities on March 4. Investors are demanding the biggest premium in yield to buy Spanish bonds rather than benchmark German bunds since the euro’s introduction in 1999. Spain's budget deficit is almost four times the European Union’s limit.

Public protests mounted in Greece, stoking concerns whether it will be able to attain the proposed cuts in budget deficit to win €110bn in aid from EU and IMF. Other members of ‘PIIGS’ like Spain and Portugal were staring at further downgrades. The idea of EU as a unified, cohesive economic bloc and euro as its common currency took further beating. To make the matters worse, China’s benchmark stock index slid to its lowest level in eight months as investors fret about government measures to cool the property market and a flood of new bank shares coming to market. Global mining shares were also hit by Australia's decision to slap resource tax on companies like BHP Billiton and Rio Tinto.

Pound sterling declined amid a strong possibility that the UK will see its first hung parliament since 1974. Investors are worried that Britain's budget deficit will remain high. Still, strategists at Lloyds TSB Corporate Markets said that sterling's weakness could have more to do with general risk aversion than worries about a hung parliament. The gap of about 8% in support between conservative David Cameron and Labour Party leader Gordon Brown in the latest polls is little changed from April 6, the day the premier called the election. Voting was to end at 10 p.m. on Thursday. Exit polls will give the first indications of the outcome but the final result won’t be known before Friday afternoon.

Greece secures bigger EU-IMF loan package

Greek crisis may spread, but no danger to big nations: IMF

ECB suspends rating threshold for Greek debt

3G Auction...All-India price at Rs113.27bn

The Government is all set to pocket a cool Rs500bn from the auction of third-generation (3G) mobile spectrum if one includes the matching bids from state-owned Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL). At Thursday's close, the Centre is expected to garner about Rs456.90bn from 3G auction alone as against projection of Rs350bn from the combined 3G-BWA auction. So, quite clearly, the final figure from the 3G-BWA auction process could well be somewhere around Rs600bn. "The revenue from 3G auction alone may cross Rs400bn. Revenues from 3G and Broadband Wireless Access (BWA) spectrum put together may touch Rs500-550bn," Telecom Minister A Raja was quoted as saying last week.

Meanwhile, bids for one set of pan-India 3G mobile licences reached Rs113.27bn, more than double the base price of Rs35bn, on the 23rd day of the auction. As per the details given by the Department of Telecommunications (DoT), four more Clock Rounds were completed on Thursday. With this, the total number of Clock Rounds completed to date has come to 132. The 3G auction started on April 9. BWA bidding will start two days after the 3G auction concludes.

Proceeds from the two auctions would help the Government bridge the fiscal deficit. India's fiscal deficit may come down to 5.2% of GDP from the estimated 5.5% of GDP. The Government has pegged the fiscal deficit at Rs3.81 lakh crores for FY11. Mumbai and Delhi continued to be among the most sought-after circles with highest bids of Rs19.87bn and Rs19.20bn, respectively. The reserve price for both the Mega Metro circles is Rs3.2bn. Maharashtra's bid stood at Rs10.62bn while that for Andhra Pradesh was at Rs9.79bn, and Gujarat at Rs9.45bn.

According to the DoT, the bidding activity requirement was set at 100% on Thursday. The 3G auction would continue till the available number of slots is equal to number of bidders in all 22 circles simultaneously. Out of a total of 22 circles for the 3G spectrum, 17 have three slots, while in rest of the five circles, four blocks of spectrum are available. The successful bidders would be allotted air waves in September after the spectrum is vacated by the defence forces. The BWA auction is also expected to be equally competitive, as 11 players are in the fray for just two slots for each circle, while the reserve price for pan-India licence is Rs17.5bn.

No delay in vacation of defence spectrum: DoT

Cartoon of the Week

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Deep trouble...

Source: Economist

SPECIAL STORIES

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Total M&A and PE deals at US$2.21bn during April: Grant Thornton

The total M&A and PE (incl. QIP) deals in the month of April 2010 were valued at US$2.21bn (129 Deals) as compared to US$1.02bn (39 deals) and US$1.69bn (74 Deals) in the corresponding month of 2009 and 2008 respectively.

The total value of outbound deals (Indian companies acquiring businesses outside India) in April 2010 was US$483mn (23 deals) as compared to US$32mn (5 deals) and US$626mn (23 deals) during the corresponding month in 2009 and 2008 respectively.

The total value of inbound deals (foreign companies or their subsidiaries acquiring Indian businesses) in April 2010 was US$51mn (8 deals) as compared to US$44mn (3 deals) and US$408mn (9 deals) during the corresponding month in 2009 and 2008 respectively.

The total value of domestic deals in April 2010 was US$310mn (58 deals) as compared to US$351mn (13 deals) and US$92mn (10 deals) during the corresponding month in 2009 and 2008 respectively.

PE (incl QIP) deal values amounted to US$1.37bn (40 deals) in April 2010 as compared to US$596mn (18 deals) and US$563mn (32 deals) during the corresponding month in 2009 and 2008 respectively.

There were 5 QIP deals valued at US$516.49mn in the month of April 2010

There were 5 IPO’s listed in the month of April 2010, which raised a sum of US$179.63mn from the public. The total amount raised through IPO during the period Jan-Dec 09 was US$3335mn from 17 IPO’s.

DOMESTIC NEWS

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India's manufacturing output slows again in April: PMI

Manufacturing activity in India slowed for a second straight month, retreating from a 20-month high hit in February, as expansion in output and new order flows eased, according to the outcome of a survey released. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to 57.2 in April from 57.8 in March. It has been above 50 level for 13 months. A reading above 50 shows an expansion. Still, the underlying trends continued to improve, as demand for Indian manufactured goods was supported by better global economic conditions, successful promotional activities and good business reputations, HSBC said in a statement. Output and new orders indexes remained above 60 and employment showed modest growth in April after stagnating the month before. The output price index rose for a second month in a row to 55.8 from 54.6. It has risen nearly four points since February. The backlogs of work index jumped to an all-time high thanks to new orders, delays in delivery times and power cuts. Output prices registered their strongest increase for three months as backlogs jumped to an all time high.

Food inflation moderates, fuel unchanged

India's annual food inflation fell to 16.04% in the week ended April 24 compared to 16.61% in the previous week, data released by the Government showed. Inflation in this group stood at 8.95% in the corresponding week of last year. The WPI for Food Articles group declined by 0.1% to 292.3. Inflation in the Primary Articles group rose to 13.93% from 13.55% in the week ended April 17, according to the Commerce & Industry data. Inflation in this group was at 6.77% during the week ended April 25, 2009. The WPI for this group rose by 0.4% to 291.2. Non-Food Articles inflation rose to 11.04% from 10.61% in the week ended April 24. It was at 2.07% in the comparable week last year. The WPI for Non-Food Articles group remained unchanged at its previous week’s level of 257.5.

Inflation in the Minerals group too increased to 1.27% versus -9.55% in the week ended April 17. It was at 3.49% in the year-ago period. The WPI for Minerals group rose by 12% to 684.0. At 12.69%, inflation was unchanged in the Fuel & Power group during the week ended April 24. Inflation for this group stood at -5.54% during the corresponding week of the previous year. The WPI for this major group remained unchanged at it’s previous week’s level of 365.1. Annual, point-to-point inflation in the Coal Mining, Mineral Oils and Electricity sub-groups stood unchanged at 13.46%, 16.90% and 4.72%, respectively.

India to grow by 8.3% in 2010: UN body

March exports up 54% yoy

India’s merchandise exports grew at the fastest pace in six years in March as the global economic recovery picked up pace. Overseas shipments rose 54% to US$19.9bn, Union Commerce Minister Anand Sharma said in New Delhi today, after a 34.8% gain in February. Exports are rebounding after an average 16.5% drop in 2009 and expanded at the fastest pace since March 2004.

For the whole of fiscal year (2009-10) India's merchandise exports dropped to US$176.5bn from around US$185bn in the previous fiscal year, Trade Secretary Rahul Khullar said today. Imports fell by 8.2% in the financial year ended March to US$278.7bn. As a result, the trade deficit declined to US$102bn, from US$118bn in the year ended March 2009.

"The fall has been mainly due to the global meltdown, but still we have been able to perform well," Sharma told reporters in New Delhi. Merchandise export target for the current fiscal year (2010-11) has been set at US$200bn, the Commerce Minister said, adding that India wants to double exports by 2014 from the current levels.

Rupee hits 6-week low as dollar climbs

The rupee touched a six-week low of 45.46 but recovered some of the lost ground amid suspected intervention by the RBI. The partially convertible Indian currency closed at 45.30, after hitting its lowest since March 26, but was well below last Friday's close of 44.37. At Thursday's low, the rupee was down 1.2% on the day. Some dealers also that said exporters may have sold dollars taking advantage of the sudden fall. The rupee was also weighed down by persistent selling in Indian stocks and the dollar's gains overseas amid simmering eurozone debt worries.

The rupee fell this week on speculation that importers will step up purchases of the US currency to pay for shipments after an index that tracks the greenback's strength touched a one-year high. The rupee weakened as India’s benchmark stock index headed for the worst week in more than three months, spurring concern that global investors are exiting emerging-market assets in favor of the US currency. The Dollar Index, which tracks the greenback against the currencies of six major American trading partners, rose as high as 84.307, the highest level since May 2009.

The euro extended its losses against the dollar and yen, dropping to a fresh 14-month low below US$1.2770 and hitting a two-month low against the Japanese currency as concerns about debt problems in the euro zone mounted.

Banks' loans, deposits fall in fortnight to April 23

Bank loans and deposits declined in the fortnight ended April 23, according to the latest RBI data, but bankers are optimistic on credit growth over the remaining part of the fiscal year and will be looking to raise resources to fund the same. During the fortnight under review, total bank loans dipped by Rs264.83bn to Rs14,37,363 crores. Food credit and loans to individuals and businesses dipped by Rs1.7bn and Rs263.13bn, respectively. Deposits were down Rs233.28bn to Rs45,06,747 crores during the fortnight ended April 23. Demand deposits and term deposits fell by Rs208.34bn and Rs24.94bn, respectively, during the fortnight. Bank loans rose about 17.13% on year as of April 23, according to the provisional data released by the RBI. Deposits were up 14.97% from a year earlier, the RBI data showed. Bank credit had risen 17% and deposits were up 16% on year as of April 9. The final figures for the week ended April 24 would be released by the RBI its weekly statistical supplement on May 7. Investments in government and other approved securities were down by Rs171.69bn to Rs14,37,363 crores during the fortnight.

OMCs to get Rs140bn cash this month: Murli Deora

The public sector oil marketing companies (OMCs) will get Rs140bn (US$3.1bn) of cash from the Finance Ministry this month to partially compensate them for selling fuels at subsidised rates, Petroleum Minister Murli Deora said. Though the OMCs will get the funds at a later stage, they can use the authorisation while preparing their financial results for the 2009-10 financial year, Deora said. In the first installment, the Finance Ministry paid Rs120bn to OMCs for their revenue losses in 2009-10 on kerosene and LPG. "Another installment of Rs140bn (announced on Wednesday) doesn’t fully cover their revenue losses for the year gone by. The combined revenue loss of the OMCs in FY10 was Rs460bn. While ONGC, Oil India (OIL) and Gail India have chipped in with about Rs150bn, the Government is expected to meet balance losses of about Rs310bn through cash. So far, the Finance Ministry has agreed to pay Rs260bn in two installments. Combined losses of the three companies for FY11 is estimated around Rs900bn. Currently, the OMCs are losing about Rs5.52 a litre on petrol, about Rs5.21 a litre on diesel, Rs18.80 a litre on kerosene and Rs254.37 per cylinder on cooking gas.

Assured life cover mandatory in all ULIPs: IRDA

The Insurance Regulatory & Development Authority (IRDA) reiterated its long-standing demand that life insurance companies should offer assured life cover with Unit Linked insurance Products (ULIPs). In an order issued late on Monday night IRDA said that all ULIPs, including pension/annuity products must have a minimum assured sum payable on death. However, IRDA clarified that provision of death benefit will not be mandatory in case of unit linked products providing health insurance cover. The revised IRDA norms will come into effect from July 1. ULIPs cannot be used to obtain loans, IRDA said, adding that minimum policy term would be five years in the case of individual products, while the group products would continue to be renewed annually.

Partial withdrawal from the policies would be allowed only after the fifth policy anniversary for all unit linked products, except pension or annuity products, IRDA said. In the case of unit linked pension or annuity products, no partial withdrawal will be permitted and the insurer will be allowed to convert the accumulated fund value into an annuity only at maturity, the insurance regulator said. The insured will have the option to commute up to a maximum of one-third of the accumulated value as lump sum at the time of maturity. In the case of surrender, only up to a maximum of one-third of the surrender value could be availed in lump sum and the remaining amount must be used to purchase an annuity, IRDA said.

Every top-up premium will have a lock in period of three years from the date of payment of that top-up premium, IRDA said. Top-up premium will not be allowed during the last three years of the contract, it added.

Essar Energy shares fall on London debut

Essar Energy started trading on the London Stock Exchange (LSE) on May 4 but the UK's largest stock market listing in more than two years suffered the worst debut of any big issue in almost eight years. Essar Energy, which plans to join the FTSE 100 shortly after its listing, tumbled 7.2% in conditional trading after raising £1.2bn last week. Shares ended at 389.5 pence as against the IPO price of 420 pence. Conditional trading allows institutional investors to buy and sell a stock without delivery. It normally continues for three days till the listing of the stock. Essar Energy will be listed on LSE on May 7. The power and oil-and-gas exploration company had originally set the price range for its IPO at between 450 pence and 550 pence a share but lowered the price amid stock market volatility. The last big IPO on LSE was that of HMV, which sank 7.5% in May 2002. Essar Energy's listing came on a rough day for global equity markets, with London's FTSE 100 index closing down 2.5% amid mounting debt problems in the Southern European nations. JPMorgan Cazenove, Essar Energy's sponsor and adviser on the IPO, had to buy shares to help stabilise the company's share price. Essar Energy is part of India's Essar Group, which sold 23.4% of the energy business through the IPO. The parent company holds the remaining shares. Essar Energy will comprise the power business and the oil & gas businesses currently held within companies owned by Essar Global Ltd., a subsidiary of Essar Group. The banks arranging the IPO were Deutsche Bank and JP Morgan Cazenove, part of JP Morgan Chase & Co.

L&T signs JV pact with Howden

Larsen & Toubro (L&T) and Howden signed a Joint Venture (JV) agreement to design, engineer, manufacture and supply axial fans and air pre-heaters to Indian thermal power plants ranging between 100 MW to 1200 MW. These products form vital components of energy efficient thermal power plants. The JV will invest around Rs1bn for setting up of the industrial facility and related infrastructure. The manufacturing unit will be set up in Hazira, Gujarat, and its operations are expected to commence in 2011. This strategic partnership allows L&T to join forces with a global technology leader, and offers Howden access to the fast growing Indian power plant equipment market. L&T also has joint ventures with Mitsubishi Heavy Industries for the manufacturing of Super Critical Boilers, Steam Turbines and Generators. The manufacture of fans and air-heaters augments L&T Power’s portfolio of products from its own operations and operations of its existing joint ventures. With the combination of these three joint ventures, L&T Power will have a distinct edge in the market for power plants.

Future Group inks pact with Carrefour: reports

DKNY Menswear…Donna Karan International (DKI) forms JV with SKNL

Bajaj Finserv shares jump on RBI circular

Shares of Bajaj Finserv Ltd. surged after the Reserve Bank of India revised guidelines that may raise the value of its stake in the two insurance joint ventures with Allianz. Bajaj Finserv rose on speculation that it will get a higher price should Allianz exercise its option to increase its stake in the insurance JVs. The RBI asked overseas investors to value privately held companies using the discounted cash flow method, valuing future cash receipts and expenditures, instead of using net asset value norm. The RBI issued a circular on May 4, revising the pricing guidelines for transfer of shares by Indian residents to non-residents. With respect to transfer of unlisted shares, it said that the pricing cannot be less than the fair value to be determined by an appropriate third party as per the discounted free cash flow (DCF) method. "Bajaj Finserv is expected to be an incidental beneficiary of this circular as its JV partner Allianz may have to pay much higher price for raising its stake in life and general insurance businesses," IIFL said in a research note to clients. The agreement between Bajaj and Allianz is subject to prevailing government regulations. Bajaj Finserv’s agreement with Allianz allows the foreign partner to increase its stake in the Indian life insurance venture up to 74% from 26%, and in non-life JV up to 50%. Allianz was earlier required to pay only a nominal amount for raising this stake. "Consequent to this circular, we believe the transfer pricing of unlisted shares to non-residents, is likely to happen at a much higher price than was the case earlier," IIFL said.

Bajaj Finserv to foray into wealth management

Glenmark Generics inks licensing agreement with Par Pharma

Glenmark Generics Ltd. announced that its US subsidiary, Glenmark Generics Inc., has entered into an exclusive licensing agreement with Par Pharmaceutical, the generic division of Par Pharmaceutical Companies, Inc. to market Ezetimibe 10 mg tablets, the generic version of Merck-Schering Plough’s Zetia in the US. Zetia is a cholesterol modifying agent with annual US sales of approximately US$1.4bn, according to IMS Health data. Glenmark believes it is the first-to-file an ANDA containing a paragraph IV certification for the product, which would potentially provide 180 days of marketing exclusivity. On April 24, 2009, Glenmark was granted tentative approval for its product by the US Food and Drug Administration (FDA).

Under the terms of the licensing and supply agreement, Par has made a payment to Glenmark for exclusive rights to market, sell and distribute Ezetimibe in the US. The companies will share in profits from the sales of the product. Glenmark is currently involved in patent litigation concerning Ezetimibe in the US District Court for the District of New Jersey. Par will share control and costs with Glenmark for ongoing litigation. A trial is scheduled to commence on May 12.

Glenmark Generics Inc., a wholly owned subsidiary of Glenmark Generics Ltd., also announced that it has entered into an exclusive license and supply agreement for a branded product with Taro Pharmaceuticals Inc. (Taro USA), a subsidiary of Taro Pharmaceutical Industries Ltd. Under the agreement, Glenmark will manufacture the FDA approved product exclusively for Taro USA. Taro USA’s branded division, TaroPharma, will be the exclusive US distributor of the product. Glenmark will receive milestone payments and a royalty on sales. Additional terms of the agreement are not being disclosed.

Sanofi-Aventis and Glenmark Pharma sign license agreement

Orchid enters distribution agreement with Alvogen

Hindustan Motors skids on net worth erosion

Hindustan Motors shares slumped after the company reported that losses had wiped out more than half of its net worth. Hindustan Motors announced that it was planning to approach the board for Industrial and Financial Reconstruction (BIFR) as previous four fiscals saw the company's net worth getting eroded by more than 50%. The company expects sales to double this fiscal year helped by the introduction of a new mini truck and aims to sell between 25,000 and 30,000 vehicles in the year ending March 2011, Rattan Singh, chief general manager in charge of sales and marketing, was quoted as saying.

Bank of Rajasthan in merger talks with private banks: report

Bank of Rajasthan (BoR) shares jumped on reports the bank's promoters have begun talks with large private sector banks for a possible merger. Tayals, the promoters of BoR are reported to have had preliminary discussions with ICICI Bank, and a few other banks to explore the possibility of merger. According to a business daily, Tayals had also approached the HDFC group for a possible deal with HDFC Bank. However, HDFC Bank did not evince any interest, the financial newspaper said. ICICI Bank is reported to have indicated that it is willing to pay more than BoR's present market valuation. But the BoR's promoters are looking for a better deal. As per reports, ICICI Bank will propose a share-swap deal with BoR.

Tayals, who acquired BoR a decade ago, are reportedly under pressure to sell the old private bank amid alleged regulatory violations. SEBI and the RBI. In March, SEBI banned 100 entities allegedly holding BoR shares on behalf of the promoters from all stock market activities. The RBI slapped a penalty of Rs2.5mn on the bank for a string of violations like deletion of records in the bank's IT system, irregular property deals and lapses in the accounts of a corporate group.

Axis Bank signs 10-year agreement with Max New York Life

Tata Motors April sales up 52% yoy

Tata Motors’ total sales (including exports) of Tata commercial and passenger vehicles in April 2010 were 57,202 vehicles, a growth of 52% over 37,518 vehicles sold in April 2009. The company’s domestic sales of Tata commercial and passenger vehicles for April 2010 were 54,065 nos., a 49% growth over 36,257 nos. sold in April last year.

Maruti April sales jump 30% yoy

Maruti Suzuki India said that its total sales in April rose by 29.7% to 93,058 units as against 71,748 units sold during the same month last year. The carmaker, which is part of Japan's Suzuki Motor, said that its domestic sales stood at 80,034 units versus 64,857 units sold in April 2009, representing an increase of 23.4%. Exports jumped by 89% to 13,024 units in the month under review from 6,891 units sold in the year-ago period. Sales in the A2 segment (comprising Alto, WagonR, Estilo, Swift, A-Star and Ritz) were up 20.5%at 56,416 units compared with 46,817 units in the same month a year ago. Sales in the A3 segment (consisting of SX4 and DZiRE) climbed by 41.445 to 9,994 units from 7,066 units in April 2009.

Hero Honda April sales flat

Hero Honda Motors Ltd., the world’s largest two wheeler manufacturer, continues to post monthly sales of over 3 lakh units. This is the 16th consecutive month that the company has reported three-lakh-plus sales. The company started the first quarter (April-June) of Financial Year (FY) 2010-11, with sales of 3,71,652 units in the month of April, 2010. Hero Honda had sold 3,70,575 two-wheelers in April last year. To further keep up this momentum, the company has introduced two models in April – the refreshed Glamour and Glamour FI.

Bajaj Auto total April sales up 85%

TVS Motor April sales up 28% yoy

Jagran Prakashan to buy print biz of Mid-Day Multimedia

Jagran Prakashan Ltd. announced that its Board of Directors at its meeting held on May 5, has approved the Scheme of Arrangement whereby it would acquire the print business of Mid-Day Multimedia Ltd. The Scheme of Arrangement is subject to necessary approvals and consents. Mid-Day Multimedia's print business, run by its 100% subsidiary Mid-Day Infomedia Ltd. (MIL), comprises publication brands viz. Mid-Day (published from Mumbai, Pune, Bangalore and Delhi), Sunday Mid-Day, Gujarati Mid-day and The Inquilab, the largest read Urdu newspaper in the country and all publication related internet properties. The valuation of the two businesses has been done by Ernst & Young and the swap ratio as per their report works out to be 7 : 2 (i.e. for each 7 fully paid up equity shares of Rs10 each of Mid-Day Multimedia, its shareholders will be entitled to 2 fully paid up equity share of Rs2 each of Jagran Prakashan). The radio business of Mid-Day Multimedia, operated through its subsidiary Radio Mid-Day, will continue to stay with the present shareholders of Mid-Day Multimedia Ltd. Singhi Advisors were the advisors to the transaction.

DB Corp to absorb demerged radio biz of subsidiary

Shopper's Stop to spend Rs1.25bn on expansion

Shopper's Stop has lined-up a capital expenditure of nearly Rs1.25bn as it opens about 8-12 stores this fiscal, CEO Govind Shrikhande said. The group will also add 3-5 Hypercity stores. "We will focus mainly on the metros we are already present in, besides some Tier II cities," Shrikhande told reporters on the sidelines of the India Shopping Forum in Mumbai. Currently, the company has 29 stores across the country, including the recent addition at Amritsar. The new stores will come up in Bangalore, Delhi, Pune, Bhopal, Aurangabad, Vijaywada and Durgapur, Shrikhande said. Shopper's Stop expects a 20% growth in revenue in FY11.

Shopper’s Stop, part of the K. Raheja group, is planning to raise about Rs3bn by selling shares to institutional investors in 6-9 months, Vice Chairman B.S. Nagesh said. The company already has shareholders’ approval to issue 4 million shares to institutional investors but the exact number of shares to be issued may change, Nagesh told reporters. The funds would be used for expansion of the group’s Shopper’s Stop and Hypercity stores.

Welspun to buy majority stake in Saudi pipe making firm

Welspun Gujarat Stahl Rohren, the flagship company of Welspun Group, changed its name to Welspun Corp, citing the reason that the words Gujarat and Stahl Rohren (meaning steel pipe in German) are no longer relevant for the company in today's context. Welspun Corp. also announced that it will purchase a majority equity stake in Aziz European Pipe Factory LLC, a Saudi Arabian pipe and pipe coating facility for an undisclosed sum. Aziz European Pipe manufactures pipes primarily for the oil & gas industry. Welspun Corp said it believes the acquisition will help it in providing a complete solution to the oil and gas majors and water companies in the GCC (Gulf Corporation Council) region. The acquisition will be done though its subsidiaries, and is subject to the regulatory approvals. Aziz European Pipe Factory is a JV company between the Saudi firm Aziz and the Forest Group, and is claimed to be one of the largest manufacturer of spiral submerged arc welded steel pipes in the Middle East. It has a production capacity of 2.7 lakh MTPA (million tonne per annum) of pipes.

Temasek gets approval to buy 5% in NSE

EIH buys out partner Amex in international JV

Kirloskar Brothers acquires 90% shares in Braybar Pumps of South Africa

HCL Tech inks 5-year deal with Merck & Co.

HCL Technologies Ltd. signed a five-year, US$500mn strategic engagement with MSD (also known as Merck & Co., Inc. with headquarters in Whitehouse Station, NJ, USA), a global research-driven pharmaceutical company. HCL will extend its existing relationship with MSD, dating back to 2004, to become an integral business and technology services partner and provide a multitude of services including software-led IT solutions, remote infrastructure management, engineering and business and knowledge process services. MSD will leverage HCL's near-shore delivery network in the US comprised of its operations center in Raleigh, North Carolina and its global data center delivery ecosystem, powered by its partner footprints across the globe. As a result of this engagement, HCL will expand its US team in North Carolina, relying on local hires to staff projects, thus creating jobs for the local community. In total, HCL will deliver services out of 20 worldwide locations including USA, Poland, China and Brazil.

Mahindra Satyam signs deal with BASF IT Services

Jaypee Infratech IPO sails through on QIB strength

The IPO of Jaypee Infratech was subscribed 1.24 times, as per the NSE web site. The issue closed on May 4. The company received bids for 27.39 crore shares compared with 22.17 crore shares on offer, according to the NSE data. The qualified institutional buyers' (QIB) portion was bid 1.77 times. The non-institutional investors (NII) segment was subscribed 1.15 times. The retail investors segment was subscribed 0.61 times. The price band for the IPO was Rs102-117 per share. Retail investors will be allotted shares at a discount of up to 5% to the issue price that will be determined as per the book-building route. The IPO was a combination of fresh issue of equity shares aggregating up to Rs16.5bn and an offer for sale of 60mn equity shares by Jaiprakash Associates Ltd. Jaypee Infratech is engaged in the development of the 165-kilometer Yamuna Expressway (access controlled concrete pavement expressway) connecting Greater Noida and Agra. The project which includes development of 5 integrated townships along the expressway is scheduled to be completed by 2011. Jaypee Infratech registered net profit of Rs3.99bn on net sales of Rs5.25bn for nine months ended December 2009.

Satluj Jal Vidyut Nigam IPO subscribed 6.64 times

GLOBAL NEWS

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Moody's warns of a downgrade on Portugal

Moody's Investor Service said that it had placed Portugal's investment-grade bonds on review for possible downgrade citing the recent deterioration of the country's public finances and long-term growth challenges for its decision. In the event of a downgrade, Portugal's Aa2 ratings would fall by one or, at most, two notches, the debt ratings agency said. Moody's said that it expects to complete the review within three months. Moody's senior analyst Anthony Thomas said the decision to place Portugal on review reflected the potentially lasting deterioration in the government's debt metrics, which in the context of a small and slow-growing economy may no longer be consistent with a Aa2 rating. Moody's also said it believes that increased risk discrimination in the financial markets may raise Portugal's financing costs for some time to come. But the debt ratings agency said it expected Portugal's debt service costs to remain very affordable in the near to medium term. Although the country's debt metrics may turn out to be more consistent with a low Aa or high A rating, government debt is neither unsustainable nor unbearable.

EU raises eurozone growth forecast

There is some good news for the battered and bruised eurozone even as global financial markets continue to reel under the impact of worsening debt situation in some parts of the region. The European Commission raised its forecast for economic growth in the 16-nation eurozone, but warned that the prospects are still surrounded by high uncertainty, as illustrated by tensions in sovereign bond markets. The Brussels-based commission, which is the executive arm of the European Union, said that it now expects eurozone GDP to grow 0.9% in 2010 and 1.5% in 2011. The commission had previously forecast a growth of 0.7% this year. The 27-state EU is also set to grow by 0.9% in 2010, the commission said, adding that the GDP will expand by 1.75% in 2011. For 2010 and 2011, the commission said that the Greek GDP will contract 3% and 0.5%, respectively. Greece's budget deficit will equal 9.3% of GDP this year, down from a 13.6% ratio in 2009, before rising again to 9.9% in 2011.

Eurozone manufacturing PMI hits 4-year peak

ECB holds rates steady as debt crisis escalates

As expected, the European Central Bank (ECB) held its key interest rate at record low for a 13th consecutive month amid persistent fears that the debt crisis, which forced Greece to take loans from the EU and IMF, could spread to other heavily indebted nations in Southern Europe. The move came just days after the EU and IMF jointly decided to lend €110bn to euro-zone member Greece. The Greek parliament votes later on Thursday on whether to accept the rescue package, and other euro-zone nations needs to ratify it as well.

This was the first rate decision by the ECB since dropping rules on the collateral that Greek banks can provide in return for loans. The euro has nose-dived since that decision and plunged to a 14-month low on May 5. The move was regarded as a lifeline for Greek banks, which have used their holdings of government debt to raise much-needed cash. Had other ratings agencies followed Standard & Poor’s in downgrading Greek bonds to junk status, the paper would have no longer been eligible as collateral under the usual ECB rules.

The ECB could also reverse the withdrawal of emergency lending measures used to fight last year’s recession, dilute collateral rules further and even resort to government bond purchases to restore confidence in markets and lower borrowing costs. ECB council member Axel Weber said that the threat of contagion doesn’t merit using every means, rejecting calls for the central bank to consider buying government bonds. "Measures that damage the fundamental principles of the currency union and the trust of the people would be mistaken and more expensive for the economy in the longer term," he said.

China manufacturing PMI up for 14th straight month

China's Manufacturing Purchasing Managers Index (PMI) rose to 55.7 in April from 55.1 in March, according to a survey released on May 1 by the China Federation of Logistics and Purchasing. A PMI reading above 50 implies expansion, while anything below 50 signals contraction. The figure stood at 56.6 in December 2009, the highest since May 2008, according to the CFLP. The new orders index rose to 59.3, up 1.2%, in April from the previous month. The report by CFLP also said that inflationary pressures in China may be rising, with prices of water, electricity, oil and gas poised to advance further. Input price index has stayed above 60 for four straight months since November and has continued to rise to 72.6% in April. The PMI purchasing prices index surged to 72.6, the highest level since the second half of 2008, up 7.5% from March.

HSBC's China PMI falls to 55.4 in April vs 57 in March

China raises bank reserve requirement

Australia central bank ups policy rate by 25 bps

The Reserve Bank of Australia raised the benchmark cash rate by a quarter of a percentage point. The rate now stands at 4.5%. The RBA raised the cash rate in March and April by 25 basis points, having already lifted it by 75 basis points between October and December last year. The central bank has increased its benchmark rate by 150 basis points since early October. RBA governor Glenn Stevens has said that, with the economy having recovered, the cash rate should be "normal" in a range of 4.5% to 5%. Stevens said that interest rates for most borrowers will now be around average levels. Stronger growth and higher borrowing costs have pushed the Australian dollar up 26% in the past year. Australia’s economy has accelerated, stoking inflation and property prices, which surged more than 20% in the 12 months through March. Policy makers are less concerned about factors such as Greece’s debt turmoil, which Stevens cited as a reason for keeping rates unchanged in February.

BHP, Rio shares slide on new tax regime

US auto sales up 20% in April

US auto sales jumped by about 20% in April from the year-ago period's recession-hit results, but the figures were still not as strong as anticipated, stoking concerns about the pace of the post-crisis recovery. The seasonally adjusted annual rate of sales for the industry in April jumped to 11.2 million cars and trucks from 9.2 million a year ago, according to Autodata. The results for April were lower compared to the March numbers of 11.8 million vehicles. Ford Motor posted a 25% year-over-year sales gain in April, the fifth straight month of 20% or more improvement. Ford said sales rose 24.7% to 167,542 vehicles from 134,401 in the same month a year earlier. For the year to date, total sales have jumped 33%. Sales of cars and utility vehicles rose 10% each, while trucks surged 38%.

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Apple sells 1 million iPads in first month

Apple said that it has sold more than one million iPads in a month, with sales of the touch-screen tablet device outpacing the first month sales for the iPhone by roughly two to one. Shares of Apple rose following the news. The stock is up more than 25% since the first of the year. The news also gave a boost to the shares of companies such as SanDisk and Micron Technology which make Flash memory chips used in devices such as the iPad. Apple released the WiFi version of the iPad on April 3, while the 3G version went on sale last Friday. iPad sales have already outstripped initial Wall Street estimates and the company is struggling to meet the high demand. Apple plans to launch the device in international markets later this month. Jobs said that demand continues to outpace supply and that the company is working hard to try to produce iPads at a faster rate. Apple also said that iPad users have downloaded more than 12 million apps from the company's App Store, as well as more than 1.5 million e-books.

Continental Airlines to merge with United Airlines

Continental Airlines and United Airlines parent company UAL Corp. have agreed to merge their operations in an all-stock transaction. Under the deal, Continental shareholders will receive 1.05 shares of the United common stock for each Continental share they own. United shareholders will own roughly 55% of the equity of the combined company and Continental shareholders the remaining 45%. The companies have estimated annual cost savings of US$1bn to US$1.2bn by 2013. Jeff Smisek, Continental's CEO, will head the combined company. Glen Tilton, CEO of UAL, will serve as a non-executive chairman. The brand name for the combined airline will be United Airlines and the marketing brand will be a combination of both.

Glencore mulls merger plan with Xstrata

Norsk Hydro to buy Vale's aluminum business: report

Weekly SUPPORT & RESISTANCE LEVEL

May, 2010
COMPANY NAME	S3	S2	S1	CLOSING PRICE	R1	R2	R3
ABB	524	567	640	683	755	799	871
ACC	776	800	838	861	899	923	961
Ambuja Cem	83	92	102	111	121	130	141
BHEL	2,179	2,238	2,323	2,382	2,467	2,526	2,612
BPCL	462	494	518	550	573	606	629
Bharti	264	271	281	288	297	304	314
Cairn	227	243	269	286	312	328	354
Cipla	303	316	329	342	355	368	380
DLF	244	255	274	285	304	315	334
Gail	393	401	412	420	431	439	449
Grasim	2,293	2,366	2,487	2,560	2,681	2,754	2,875
HCL Tech	348	358	375	386	402	413	429
HDFC Bank	1,645	1,699	1,794	1,848	1,943	1,997	2,092
Hero Honda	1,751	1,793	1,843	1,885	1,936	1,977	2,028
Hindalco	136	144	155	163	174	182	193
HUL	212	220	227	235	242	250	257
HDFC	2,503	2,568	2,662	2,727	2,820	2,885	2,979
ICICI Bank	755	788	844	877	933	966	1,022
Idea	55	58	60	63	66	69	72
Infosys	2,470	2,509	2,578	2,617	2,686	2,725	2,793
ITC	226	238	247	259	269	281	290
L&T	1,338	1,391	1,464	1,517	1,590	1,643	1,716
M&M	472	491	506	524	539	557	572
Maruti	1,179	1,215	1,243	1,279	1,306	1,343	1,370
Nalco	362	374	389	401	415	427	442
NTPC	193	196	200	203	207	210	214
ONGC	979	1,002	1,022	1,045	1,065	1,087	1,107
Powergrid	99	101	104	106	109	111	114
PNB	761	836	939	1,014	1,117	1,192	1,295
Ranbaxy	396	414	431	450	467	485	502
Rcom	129	136	146	153	163	170	180
Reliance	902	949	986	1,033	1,070	1,117	1,154
Reliance Infra	760	816	922	978	1,085	1,141	1,247
Reiance Power	101	112	129	140	158	169	186
Satyam	76	79	85	88	94	97	103
Siemens	530	574	619	663	709	753	798
SBI	2,088	2,125	2,190	2,226	2,291	2,328	2,393
SAIL	179	188	199	208	219	228	239
Sterlite	558	598	674	714	790	830	906
Sunpharma	1,421	1,453	1,500	1,532	1,579	1,611	1,658
Suzlon	59	62	65	68	71	74	77
Tata Com.	238	244	254	260	270	276	286
TCS	686	702	726	741	766	781	806
Tata Motors	595	638	720	763	844	887	969
Tata Power	1,143	1,183	1,243	1,283	1,343	1,383	1,443
Tata Steel	453	481	531	558	608	636	685
Unitech	55	60	68	73	82	87	95
Wipro	563	584	617	638	671	692	725
Zee	239	250	268	279	297	308	327
NOTE : S1, S2 and S3 are critical support levels while R1, R2 and R3 are resistance levels. Trading call depends on the price band

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