GOLD neared three-week highs today as a Chinese interest rate hike highlighted simmering global inflation pressures.
The most actively traded contract, for April delivery, rose $US15.90, or 1.2 per cent, to settle at $US1364.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Thinly traded front-month gold gained $US15.80, to $US1363.40, its strongest close since January 19.
China, the world's No. 2 gold market after India, raised benchmark lending and deposit rates last night in the latest of a series of tightening measures, further stoking global inflation fears amid surging worldwide commodity prices.
Gold, which doesn't earn interest, is traditionally a hedge against inflation and often falls as interest rates rise and investors are drawn into higher-yielding assets.
But instead of having a calming effect, China's hike of its one-year lending and deposit rates to combat inflation reinforced fears that other governments have been "complacent" in letting easy monetary policy run too long, said Michael Gross, broker and futures analyst with OptionSellers.com.
"A general fear of inflation outweighed the action by China to tighten," he said.
Atlanta Federal Reserve president Dennis Lockhart said "inflation anxiety is rising" within the US, and sought to calm nerves, saying, broadly speaking, price pressures remain low.
He added that emerging-market economies, such as China and Brazil, can deal with any inflation pressures building in their own economies.
Some Fed critics have pointed to the US central bank's ultra-loose monetary policy as stoking inflation -- particularly in food prices -- in smaller economies.
Although core inflation remains subdued in the US, worries about longer-term price rises in the world's largest economy have also supported gold.
The combination of ultra-low interest rates -- which also boost the allure of non-interest bearing gold -- and Federal Reserve purchases of Treasuries to stimulate the economy is causing some to believe the Fed won't be able to sponge up extra liquidity in time to avoid problematic consumer and producer price increases over the longer term.
Those inflation concerns have been heightened as Treasury bond yields have recently jumped to their highest levels since May.
"You're continuing the inflation story no matter where you look," said George Gero, vice-president with RBC Capital Markets Global Futures.
Other precious metals traded in New York also rose. Comex March silver rallied 3.2 per cent. Nymex April platinum gained 1 per cent, while March palladium on the exchange added 2.4 per cent.
Wednesday, February 9, 2011
Tuesday, February 8, 2011
India-focused European funds see record inflows - Economic TImes
Europe-domiciled offshore India equity funds , which constitute over 90% of the overall India-focused offshore fund pie, continue to record bumper inflows, with the segment recording investments worth 24.32 billion in 2010.
Firm equities markets in the first nine months of 2010, coupled with robust long-term growth and diverse sector play, prompted foreign investors to park their money in India-focused equity funds, analysts at Morningstar said.
"Europe-domiciled India funds logged a 42% rise in investments in 2010. They're investing in Indian shares seeing good future prospects," Dhruva Raj Chatterji, senior research analyst, Morningstar India, told ET.
While European investors loaded their portfolios with emerging market funds, several Japanese investors redeemed their money from the region. Indian funds were the worst impacted as Japanese investors redeemed investment worth $2 billion from offshore pools investing in Indian companies.
Total net assets of India offshore funds in Japan shrank by about 13% in 2010, to close the year at ¥737 billion. The total assets of these India offshore funds in Japan have almost halved from their peak of ¥1,400 billion at the end of December 2007.
"Japanese investors have been redeeming equity investments across markets. Portfolio investors in Japan are shifting their investments from equities to emerging market bond funds and high-yield bonds," Mr Chatterji said.
One of the main reasons for Japanese investors exiting Indian funds was the appreciation of the yen vis-a-vis the rupee. The yen has appreciated 10% against the rupee over the past few months, which resulted in the underperformance of several India-focused funds. Nomura India Equity from Japan recorded the biggest net outflow of ¥ 22.97 billion in 2010. In all, only three of the 27 offshore India funds in Japan registered a positive inflow during the year.
Among other funds, HSBC GIF Indian Equity, the largest offshore India fund from Eurozone, registered an estimated net outflow of euro 285 million in 2010. The fund was a bottom quartile performer within its peer group during the year. Franklin India recorded the largest inflow of euro 338 million in 2010, and its assets base grew 90% during the considered period.
Despite the 30-share Sensex gaining about 17% in 2010, Indian markets underperformed emerging market peers such as Indonesia, Thailand, Malaysia and the Philippines. The top performing offshore India fund in 2010 was Aberdeen Global Indian Equity D2, which is the second-largest offshore India fund (with assets of $4.66 billion as of December 2010). The worst performing fund was Japan-domiciled HSBC India Infra Equity Open, which fell 12% during the year.
Firm equities markets in the first nine months of 2010, coupled with robust long-term growth and diverse sector play, prompted foreign investors to park their money in India-focused equity funds, analysts at Morningstar said.
"Europe-domiciled India funds logged a 42% rise in investments in 2010. They're investing in Indian shares seeing good future prospects," Dhruva Raj Chatterji, senior research analyst, Morningstar India, told ET.
While European investors loaded their portfolios with emerging market funds, several Japanese investors redeemed their money from the region. Indian funds were the worst impacted as Japanese investors redeemed investment worth $2 billion from offshore pools investing in Indian companies.
Total net assets of India offshore funds in Japan shrank by about 13% in 2010, to close the year at ¥737 billion. The total assets of these India offshore funds in Japan have almost halved from their peak of ¥1,400 billion at the end of December 2007.
"Japanese investors have been redeeming equity investments across markets. Portfolio investors in Japan are shifting their investments from equities to emerging market bond funds and high-yield bonds," Mr Chatterji said.
One of the main reasons for Japanese investors exiting Indian funds was the appreciation of the yen vis-a-vis the rupee. The yen has appreciated 10% against the rupee over the past few months, which resulted in the underperformance of several India-focused funds. Nomura India Equity from Japan recorded the biggest net outflow of ¥ 22.97 billion in 2010. In all, only three of the 27 offshore India funds in Japan registered a positive inflow during the year.
Among other funds, HSBC GIF Indian Equity, the largest offshore India fund from Eurozone, registered an estimated net outflow of euro 285 million in 2010. The fund was a bottom quartile performer within its peer group during the year. Franklin India recorded the largest inflow of euro 338 million in 2010, and its assets base grew 90% during the considered period.
Despite the 30-share Sensex gaining about 17% in 2010, Indian markets underperformed emerging market peers such as Indonesia, Thailand, Malaysia and the Philippines. The top performing offshore India fund in 2010 was Aberdeen Global Indian Equity D2, which is the second-largest offshore India fund (with assets of $4.66 billion as of December 2010). The worst performing fund was Japan-domiciled HSBC India Infra Equity Open, which fell 12% during the year.
When will the Indian stock market recover? - Reuters
January was a big disappointment to the stock market. The Sensex which had crossed the earlier peak was already down to 20,000 at the beginning of 2011. It gradually slumped further during the first three weeks and dropped with a thud towards the end of the month. There were reasons not all very apparent.
The Sensex was undoubtedly hammered by the global trends. The Egyptian crisis meant not only a setback to some of the Indian companies operating in Middle East but also a sharp increase in commodity prices. Oil shot up to more than $100 a barrel. International prices of food products also jumped. That meant higher costs and lower profits. There were also fears that the Suez Canal could be closed.
The domestic reasons were even more convincing. Inflation had relapsed. Food inflation crossed 17 percent and the headline inflation for December touched 8.5 percent. Besides, the many tales of widespread corruption had created doubts about effective governance.
The RBI reacted to inflation the usual way. It put up the repo rate by 25 bps threatening at the same time that further action may follow. That was more than a cue to the banking sector which pushed up the interest rate on lending as also borrowing. Added to all this was the rather tame performance of the corporate sector in the last quarter of 2010. That was enough to knock down the Sensex.
There is however more to it than that. For, the Sensex had started climbing down right from the beginning of the year and had lost 1,000 points by the middle of the month. That was because the FIIs had begun to repatriate part of their investment possibly because there were better opportunities at home.
In January, even before the Egypt crisis, the FIIs disinvested more than $1 billion. That was because the US economy was on a rebound. A reflection of that was seen in the recovery of Dow Jones which crossed 12,000 on 27th January, a jump of 3 percent in three weeks.
The US economy grew 3.2 percent in the last quarter of 2010. That was mainly because of the improvement in consumption which had stagnated and will become the mainstay of recovery in future. Interest rates have also been hardening and prices rising giving an indication that the US is on way to recovery though the Federal Reserve is still cautions mainly because unemployment is still above 9 percent. It therefore appears that about a half of the 2,000 points loss in Sensex in 2011 is due to US recovery which prompted return of FII funds. The month end events like the Egyptian crisis, crude oil prices, even domestic inflation, will be back to normal possibly in another 4-6 weeks. But the loss from return of FII funds may continue and put a lid on Sensex which will remain subdued for some time unless the budget provides a trigger.
The Sensex was undoubtedly hammered by the global trends. The Egyptian crisis meant not only a setback to some of the Indian companies operating in Middle East but also a sharp increase in commodity prices. Oil shot up to more than $100 a barrel. International prices of food products also jumped. That meant higher costs and lower profits. There were also fears that the Suez Canal could be closed.
The domestic reasons were even more convincing. Inflation had relapsed. Food inflation crossed 17 percent and the headline inflation for December touched 8.5 percent. Besides, the many tales of widespread corruption had created doubts about effective governance.
The RBI reacted to inflation the usual way. It put up the repo rate by 25 bps threatening at the same time that further action may follow. That was more than a cue to the banking sector which pushed up the interest rate on lending as also borrowing. Added to all this was the rather tame performance of the corporate sector in the last quarter of 2010. That was enough to knock down the Sensex.
There is however more to it than that. For, the Sensex had started climbing down right from the beginning of the year and had lost 1,000 points by the middle of the month. That was because the FIIs had begun to repatriate part of their investment possibly because there were better opportunities at home.
In January, even before the Egypt crisis, the FIIs disinvested more than $1 billion. That was because the US economy was on a rebound. A reflection of that was seen in the recovery of Dow Jones which crossed 12,000 on 27th January, a jump of 3 percent in three weeks.
The US economy grew 3.2 percent in the last quarter of 2010. That was mainly because of the improvement in consumption which had stagnated and will become the mainstay of recovery in future. Interest rates have also been hardening and prices rising giving an indication that the US is on way to recovery though the Federal Reserve is still cautions mainly because unemployment is still above 9 percent. It therefore appears that about a half of the 2,000 points loss in Sensex in 2011 is due to US recovery which prompted return of FII funds. The month end events like the Egyptian crisis, crude oil prices, even domestic inflation, will be back to normal possibly in another 4-6 weeks. But the loss from return of FII funds may continue and put a lid on Sensex which will remain subdued for some time unless the budget provides a trigger.
Monday, February 7, 2011
Investment Dar, creditors agree on $4.9bn debt plan - ArabianBusiness
Investment Dar Co, the Kuwait-based owner of half of Aston Martin Lagonda Ltd, and the coordinating committee of its creditors agreed to a revised plan to restructure the company’s debt. “The Enhanced Supplementary Plan contains revised facilities under which full repayment with profit will take place over a six to eight-year period," Investment Dar and the committee said in an e-mailed statement on Tuesday.
Investment Dar will pay KD405m of debt in three to four years with an 11 percent profit rate a year, according to the statement. Of that 11 percent, five percent will be paid in cash and the rest ‘‘payment in kind.’’ The remaining KD600m will be paid between years four to eight, the statement said.
Investment Dar, which missed a payment on a $100m Islamic bond in May 2009, said in March last year it was applying for legal protection under the Financial Stability Law to implement a restructuring plan. The law was passed by the government in 2009 to help financial institutions hurt by the credit crisis. The next Kuwaiti court hearing on the company’s application for protection under the law will be on February 10.
Investment Dar, which had KD1.03bn of debt outstanding at the end of September 2008, presented a plan to investors in December 2009. The company’s creditors number more than 100 banks and investors worldwide.
The coordinating committee includes Jordan International Bank, ABC Islamic Bank, Lloyds TSB, Al Rajhi Bank, Islamic Development Bank and Bank of Bahrain & Kuwait. The former committee resigned in November and the current one was formed last month.
The plan converts part of the creditors’ debt claims on the company into equity in Investment Dar, the statement said. Investment Dar ‘‘shareholders can reclaim part of this equity if debt repayments are honored in full,” it said. Under the plan, 10 percent of the company’s shares “will be passed to the banks and investors as part of the restructuring package. In addition, up to KD20m in fresh equity will be injected by Investment Dar’s shareholders in the first 12 months of the plan,” according to the statement.
Investment Dar will pay KD405m of debt in three to four years with an 11 percent profit rate a year, according to the statement. Of that 11 percent, five percent will be paid in cash and the rest ‘‘payment in kind.’’ The remaining KD600m will be paid between years four to eight, the statement said.
Investment Dar, which missed a payment on a $100m Islamic bond in May 2009, said in March last year it was applying for legal protection under the Financial Stability Law to implement a restructuring plan. The law was passed by the government in 2009 to help financial institutions hurt by the credit crisis. The next Kuwaiti court hearing on the company’s application for protection under the law will be on February 10.
Investment Dar, which had KD1.03bn of debt outstanding at the end of September 2008, presented a plan to investors in December 2009. The company’s creditors number more than 100 banks and investors worldwide.
The coordinating committee includes Jordan International Bank, ABC Islamic Bank, Lloyds TSB, Al Rajhi Bank, Islamic Development Bank and Bank of Bahrain & Kuwait. The former committee resigned in November and the current one was formed last month.
The plan converts part of the creditors’ debt claims on the company into equity in Investment Dar, the statement said. Investment Dar ‘‘shareholders can reclaim part of this equity if debt repayments are honored in full,” it said. Under the plan, 10 percent of the company’s shares “will be passed to the banks and investors as part of the restructuring package. In addition, up to KD20m in fresh equity will be injected by Investment Dar’s shareholders in the first 12 months of the plan,” according to the statement.
25 Indian Stocks to Consider (on a low P/B basis) - as of 7th Feb, 2010
The list provided above has been shortlisted from the more than 1000 stocks that are currently trading at a P/B ratio below 1. Furthermore, the list has been limited to stocks with a market capitalization greater than 500cr (approx. $100m). An additional filter considered to come up with this shortlist is the number of analysts covering the stock.
This list is probably a good place to begin to look for potential multibaggers. By no means are all the stocks listed above a good investment, keeping in mind that some of them might be trading at a low P/B as a result of the inherent charateristics; earnings quality, industry, corporate governance etc.
Invest at your own risk. Happy Investing !!
Egypt turmoil may worsen India's c/a deficit: Citi - EconomicTimes
A prolonged political turmoil in Middle Eastern countries, led by Egypt, may further deteriorate India's current account deficit and dent investment flows to emerging markets, Citi said in a research note on Monday.
The crisis in Egypt could result in oil prices trending higher, which will impact India's already deteriorating current account deficit, leading to higher subsidies and inflation, analysts Rohini Malkani and Anushka Shah wrote.
India's current account deficit in the September quarter widened to a record high of $15.8 billion as booming domestic consumer demand sucked in imports and service sector exports suffered from weak global demand.
Events in Egypt will have an impact on Indian monetary policy, the country's central bank deputy governor told reporters on Sunday, underscoring the worries about headline inflation above 8.4 percent.
India's economy, Asia's third-largest and a driver of the world recovery, is expected to grow 8.6 percent in the year ending in March, but at the risk of high commodity prices widening the trade gap and exacerbating inflation.
The Reserve Bank of India (RBI) has increased its end March inflation forecast to 7 percent from the earlier 5.5 percent.
India's central bank has raised rates seven times since March, although monetary policy is expected to have only a limited impact on reining in supply-side driven food inflation.
The turmoil in Egypt has raised concerns of a disruption to supply of Middle East oil shipped through Egypt, and of unrest spreading across the Middle East and North Africa, which combined produce more than a third of the world's oil.
North Sea Brent crude oil futures jumped back above $100 on Monday.
The Middle East accounts for more than half of India's remittances of $52 billion and is also India's largest export market, the Citi report said.
The crisis in Egypt could result in oil prices trending higher, which will impact India's already deteriorating current account deficit, leading to higher subsidies and inflation, analysts Rohini Malkani and Anushka Shah wrote.
India's current account deficit in the September quarter widened to a record high of $15.8 billion as booming domestic consumer demand sucked in imports and service sector exports suffered from weak global demand.
Events in Egypt will have an impact on Indian monetary policy, the country's central bank deputy governor told reporters on Sunday, underscoring the worries about headline inflation above 8.4 percent.
India's economy, Asia's third-largest and a driver of the world recovery, is expected to grow 8.6 percent in the year ending in March, but at the risk of high commodity prices widening the trade gap and exacerbating inflation.
The Reserve Bank of India (RBI) has increased its end March inflation forecast to 7 percent from the earlier 5.5 percent.
India's central bank has raised rates seven times since March, although monetary policy is expected to have only a limited impact on reining in supply-side driven food inflation.
The turmoil in Egypt has raised concerns of a disruption to supply of Middle East oil shipped through Egypt, and of unrest spreading across the Middle East and North Africa, which combined produce more than a third of the world's oil.
North Sea Brent crude oil futures jumped back above $100 on Monday.
The Middle East accounts for more than half of India's remittances of $52 billion and is also India's largest export market, the Citi report said.
Foreign funds outflow in equities markets tops $1 bn in 2011 - EconomicTimes
Foreign funds, which were a major factor in the rally of Indian equities markets in 2010, have contributed almost equally in the current weakness at the bourses, having sold scrips over $1 billion in 2011 till Friday.
Foreign institutional investors sold stocks worth $283.47 million in the last trading week alone, according to data available with the Securities and Exchange Board of India ( SEBI )).
A combination of factors have led to this withdrawal, with analysts mainly pointing to the increasing hawkish attitude adopted by the Reserve Bank of India for FIIs looking for greener pastures in other global markets.
In a bid to tame prices, which has kept annual food inflation hovering around double digits, India's central bank last month hiked its short-term lending and borrowing rates by 25 basis points and hinted at more tightening in the coming months if inflation did not come down.
In the past few days, unrest in Egypt, which led to global crude oil prices spiking to around $100 a barrel, has also raised the uneasiness of investors in economies like India which are mostly dependant on imported oil.
Though, prices of petrol were recently hiked by state-run oil marketing companies in India, a further hike in the fuel cannot be ruled out. Also, the government may not be able to hold off an increase in prices of diesel -- it still controls pricing of the fuel, unlike petrol.
Given this scenario, FIIs are looking to book profits in Indian equities markets, which last year had seen benchmark indices rally more than 17 per cent, fuelled to a large extent by the $28.83 billion inflow of overseas money.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange, which ended Dec 31, 2010 at 20,250.26 points, has fallen over 11 per cent in five weeks of trading. The Sensex closed Friday at 18,008.15 points.
Foreign institutional investors sold stocks worth $283.47 million in the last trading week alone, according to data available with the Securities and Exchange Board of India ( SEBI )).
A combination of factors have led to this withdrawal, with analysts mainly pointing to the increasing hawkish attitude adopted by the Reserve Bank of India for FIIs looking for greener pastures in other global markets.
In a bid to tame prices, which has kept annual food inflation hovering around double digits, India's central bank last month hiked its short-term lending and borrowing rates by 25 basis points and hinted at more tightening in the coming months if inflation did not come down.
In the past few days, unrest in Egypt, which led to global crude oil prices spiking to around $100 a barrel, has also raised the uneasiness of investors in economies like India which are mostly dependant on imported oil.
Though, prices of petrol were recently hiked by state-run oil marketing companies in India, a further hike in the fuel cannot be ruled out. Also, the government may not be able to hold off an increase in prices of diesel -- it still controls pricing of the fuel, unlike petrol.
Given this scenario, FIIs are looking to book profits in Indian equities markets, which last year had seen benchmark indices rally more than 17 per cent, fuelled to a large extent by the $28.83 billion inflow of overseas money.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange, which ended Dec 31, 2010 at 20,250.26 points, has fallen over 11 per cent in five weeks of trading. The Sensex closed Friday at 18,008.15 points.
BSE Sensex edges up 0.2 pct; sentiment shaky - Reuters
The BSE Sensex ended up 0.2 percent in choppy trade on Monday as firm world equities helped them recover slightly from last week's 2.1 percent decline, but investors were not convinced the strength in the market was here to stay. The 30-share BSE index closed 0.16 percent, or 29.04 points, higher in choppy trade to 18,037.19, with 21 of its components advancing. The index had declined 10.6 percent in January and is down more than 12 percent year-to-date.
"There is lack of confidence in the market. People are using any rise to sell," said Neeraj Dewan, director of Quantum Securities. Foreign funds have pulled out $1.35 billion this year until Feb. 3, on concerns over high inflation and as optimism over prospects of a U.S. economic recovery diverted attention. "Unless there is any significant improvement on the macro front, any gains will be sold," Dewan said.
Prime Minister Manmohan Singh said on Friday high headline inflation was beginning to pose a serious threat to India's high growth plans. Economic growth in Asia's third-largest economy for the 2010/11 fiscal year is estimated to grow at 8.6 percent, a government statement said on Monday.
Cipla shed nearly 3 percent after the drugmaker reported a larger-than-expected 19.4 percent drop in third-quarter net profit late on Friday. "While management remains upbeat about the growth prospects for the company, its time-frame for delivery of returns to shareholders may be longer than current market expectations," Emkay Global said in a note. The brokerage downgraded the stock to "reduce" from "accumulate."Cigarette-to-hotel business ITC recovered from Friday's 4.2 percent decline and led the gains with a 2.6 percent rise. Energy giant Reliance Industries, which has the highest weight on the main index, climbed 1.1 percent. It had declined 2.5 percent on Friday. Explorer Cairn India rose 1 percent after the Indian oil secretary said on Sunday he was hopeful of finding a "positive solution" to Vedanta Resources' deal to buy a controlling stake in the unit of Cairn Energy. Non-ferrous metals producer Sterlite Industries firmed 0.4 percent as London copper prices hit record high. Tata Steel, world's seventh-largest maker of the alloy, gained 0.6 percent, while aluminium producer Hindalco dropped nearly 2 percent.
In the broader market, losers were 1.5 times the number of gainers in a low volume of 268 million shares.The 50-share NSE Nifty closed barely changed at 5,396 points. World stocks were hovering near a 29-month high on further signs of global economic recovery. The MSCI world equity index rose 0.3 percent by 1045 GMT, while the emerging markets index edged 0.1 percent lower.
STOCKS THAT MOVED
* State-run oil marketing companies Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp rose between 1 percent and 1.7 percent, as international crude oil prices declined. Separately, Bharat Petroleum said it discovered gas in offshore Mozambique.
* Lanco Infratech and Punj Lloyd shed nearly 4 percent and nearly 2 percent, respectively, ahead of their quarterly earnings announcement.
* Bhushan Steel climbed 1 percent to 401.80 rupees after the steel maker said its October-December net profit rose 23.3 percent.
MAIN TOP THREE BY VOLUME
* SpiceJet on 16.4 million shares
* Suzlon Energy on 10.3 million shares
* Unitech on 4.7 million shares
Link
"There is lack of confidence in the market. People are using any rise to sell," said Neeraj Dewan, director of Quantum Securities. Foreign funds have pulled out $1.35 billion this year until Feb. 3, on concerns over high inflation and as optimism over prospects of a U.S. economic recovery diverted attention. "Unless there is any significant improvement on the macro front, any gains will be sold," Dewan said.
Prime Minister Manmohan Singh said on Friday high headline inflation was beginning to pose a serious threat to India's high growth plans. Economic growth in Asia's third-largest economy for the 2010/11 fiscal year is estimated to grow at 8.6 percent, a government statement said on Monday.
Cipla shed nearly 3 percent after the drugmaker reported a larger-than-expected 19.4 percent drop in third-quarter net profit late on Friday. "While management remains upbeat about the growth prospects for the company, its time-frame for delivery of returns to shareholders may be longer than current market expectations," Emkay Global said in a note. The brokerage downgraded the stock to "reduce" from "accumulate."Cigarette-to-hotel business ITC recovered from Friday's 4.2 percent decline and led the gains with a 2.6 percent rise. Energy giant Reliance Industries, which has the highest weight on the main index, climbed 1.1 percent. It had declined 2.5 percent on Friday. Explorer Cairn India rose 1 percent after the Indian oil secretary said on Sunday he was hopeful of finding a "positive solution" to Vedanta Resources' deal to buy a controlling stake in the unit of Cairn Energy. Non-ferrous metals producer Sterlite Industries firmed 0.4 percent as London copper prices hit record high. Tata Steel, world's seventh-largest maker of the alloy, gained 0.6 percent, while aluminium producer Hindalco dropped nearly 2 percent.
In the broader market, losers were 1.5 times the number of gainers in a low volume of 268 million shares.The 50-share NSE Nifty closed barely changed at 5,396 points. World stocks were hovering near a 29-month high on further signs of global economic recovery. The MSCI world equity index rose 0.3 percent by 1045 GMT, while the emerging markets index edged 0.1 percent lower.
STOCKS THAT MOVED
* State-run oil marketing companies Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp rose between 1 percent and 1.7 percent, as international crude oil prices declined. Separately, Bharat Petroleum said it discovered gas in offshore Mozambique.
* Lanco Infratech and Punj Lloyd shed nearly 4 percent and nearly 2 percent, respectively, ahead of their quarterly earnings announcement.
* Bhushan Steel climbed 1 percent to 401.80 rupees after the steel maker said its October-December net profit rose 23.3 percent.
MAIN TOP THREE BY VOLUME
* SpiceJet on 16.4 million shares
* Suzlon Energy on 10.3 million shares
* Unitech on 4.7 million shares
Link
Gulf states set for boom in public-private partnerships - ArabianBusiness
The Gulf is forecast to see a surge in public-private partnerships (PPPs) as governments rush to spread the cost and risk of giant infrastructure projects, a PricewaterhouseCoopers has said.
Local states are spending billions of dollars in overhauling infrastructure, with Qatar alone set to spend $100bn – or 87 percent of GDP – on modernising the emirate. “To see a rise in PPPs you have to start with infrastructure spending, and the Middle East is massive for that,” said Clement Walsh, director of infrastructure finance at PWC. “There are huge projects out here, in the UAE, Kuwait, Saudi Arabia and Qatar.” If just some of the infrastructure projects planned for the Gulf take place, he added, “it will be a big market” for PPPs.
As governments work to further develop and rejuvenate their economies in the wake of the global economic crisis, they are increasingly turning to private funding. Dubai’s state transport agency said in January it would offer about a third of its infrastructure projects over the next five years as PPPs in a bid to scale back its exposure to risk and costs. In Abu Dhabi and Saudi Arabia, big projects such as inter-country rail lines and causeways have also opened to private sector involvement. In Qatar, the Ministry of Business and Trade has also assigned a unit to examine PPPs as a possible source of funding for its infrastructure spree.
PwC is one of the PPP facilitators that will be making a significant investment in the Middle East in the next twelve to 36 months, said Neil Broadhead, partner in charge of advisory services. “Capital projects and infrastructure practice in the Middle East is a very significant investment,” he said. “It’s included on everyone’s agenda.” PwC currently has 30 engineers, accountants and other PPP facilitators on the ground in MENA, in offices from Dubai and Abu Dhabi to the newly opened arm in Ramallah.
Broadhead said the biggest demand was for professional service advice – ensuring that capital is managed effectively during the building of projects. Those projects include everything from transportation to waste treatment facilities. “Most governments looking at [making] big expenditures look at PPPs to reduce the burden on the public purse and as the best value for money,” Walsh said. “Because that’s the measure for success. Over a project’s life cycle they offer a better value – but they’re not cheap. They emerged from very mature economies… they are a way of managing risk to the public.”
Both said the Middle East and GCC – with a recovered economy, emphasis on building and projects tied into the Qatar World Cup and other initiatives – would be a PPP hotspot in the next year.“One year ago there was no capital projects team in the Mid East – now there’s Abu Dhabi, Doha, Saudi, Ramallah, capital projects in Dubai,” Broadhead said. “To work with these clients we need to be in their markets.”
Link
Local states are spending billions of dollars in overhauling infrastructure, with Qatar alone set to spend $100bn – or 87 percent of GDP – on modernising the emirate. “To see a rise in PPPs you have to start with infrastructure spending, and the Middle East is massive for that,” said Clement Walsh, director of infrastructure finance at PWC. “There are huge projects out here, in the UAE, Kuwait, Saudi Arabia and Qatar.” If just some of the infrastructure projects planned for the Gulf take place, he added, “it will be a big market” for PPPs.
As governments work to further develop and rejuvenate their economies in the wake of the global economic crisis, they are increasingly turning to private funding. Dubai’s state transport agency said in January it would offer about a third of its infrastructure projects over the next five years as PPPs in a bid to scale back its exposure to risk and costs. In Abu Dhabi and Saudi Arabia, big projects such as inter-country rail lines and causeways have also opened to private sector involvement. In Qatar, the Ministry of Business and Trade has also assigned a unit to examine PPPs as a possible source of funding for its infrastructure spree.
PwC is one of the PPP facilitators that will be making a significant investment in the Middle East in the next twelve to 36 months, said Neil Broadhead, partner in charge of advisory services. “Capital projects and infrastructure practice in the Middle East is a very significant investment,” he said. “It’s included on everyone’s agenda.” PwC currently has 30 engineers, accountants and other PPP facilitators on the ground in MENA, in offices from Dubai and Abu Dhabi to the newly opened arm in Ramallah.
Broadhead said the biggest demand was for professional service advice – ensuring that capital is managed effectively during the building of projects. Those projects include everything from transportation to waste treatment facilities. “Most governments looking at [making] big expenditures look at PPPs to reduce the burden on the public purse and as the best value for money,” Walsh said. “Because that’s the measure for success. Over a project’s life cycle they offer a better value – but they’re not cheap. They emerged from very mature economies… they are a way of managing risk to the public.”
Both said the Middle East and GCC – with a recovered economy, emphasis on building and projects tied into the Qatar World Cup and other initiatives – would be a PPP hotspot in the next year.“One year ago there was no capital projects team in the Mid East – now there’s Abu Dhabi, Doha, Saudi, Ramallah, capital projects in Dubai,” Broadhead said. “To work with these clients we need to be in their markets.”
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India on track to grow 8.6 pct in this fiscal year - Reuters
India's economy, Asia's third-largest and a driver of the world recovery, is expected to grow 8.6 percent in the year ending in March, but at the risk of high commodity prices widening the trade gap and exacerbating inflation.
The government estimate comes after a Reuters poll last month forecast the economy would grow 8.7 percent in the current fiscal year and 8.5 percent in the year that ends March 2012.
Prime Minister Manmohan Singh said last week rising prices were a serious threat to growth momentum, underscoring the worries of policymakers about headline inflation above 8.4 percent, driven by stubbornly high food prices. India is the second fastest-growing major economy in the world, after China, and both countries are battling inflation.
India's trade gap and fiscal deficit also cloud the outlook for an economy that, along with China's, has been a key driver of recovery from the global downturn. The trade gap hit a 23-month high of $13 billion in August as imports backed by rising domestic demand far outstripped exports, which were crimped by sluggish recovery in advanced markets, but it shrunk to $2.6 billion in December.
Trade Secretary Rahul Khullar has said that if global crude and commodity prices rise, the trade deficit in the January-March quarter could widen again. "I am happy with the 8.6 percent growth. But there are other concerns apart from GDP. My main concerns are inflation and the trade gap," Finance Minister Pranab Mukherjee told reporters. In the fiscal year that ended last March, India's GDP rose 8 percent, up from 6.7 percent in the fiscal year that ended in March 2009.
India's chief statistician, T.C.A. Anant, said rising global crude oil prices had put pressure on India's fiscal deficit, although he expects the government to meet its target of keeping the fiscal deficit to 5.5 percent of GDP this fiscal year. Rising crude prices threaten to add to the government's fuel-subsidy burden.
India's expected GDP growth this fiscal year will be helped by a rebound in agriculture, which is expected to grow 5.4 percent on good monsoon rains after expanding by just 0.2 percent a year earlier following a severe drought.
The full-year outlook implies a slowdown in fiscal fourth-quarter growth to about 8 percent year-on-year, a four-quarter low, according to Dariusz Kowalczyk, an analyst at Credit Agricole-CIB in Hong Kong. The expected January-March quarter moderation "would provide hope for slowdown in demand-pulled price pressures", Kowalczyk said in a note.
Bond yields, swap rates and the rupee were little changed after the release of the data on Monday.
The strong growth in agriculture is expected despite recent shortages in vegetables, such as onions and potatoes, which have led to high food inflation spilling into the broader economy.
RATE RISES
The Reserve Bank of India, has raised interest rates seven times since March, although monetary policy is expected to have only a limited impact on reining in supply-side driven food inflation. Rising interest rates, meanwhile, have taken a toll on manufacturing, which is expected to grow by 8.8 percent this fiscal year, down from nearly 11 percent growth a year earlier. "You have to look at manufacturing, which at 8.8 percent is beginning to show capacity constraints and price pressures, which could be a drag on growth going forward," said N. Bhanumurthy, senior economist with the National Institute of Public Finance and Policy. The manufacturing sector grew at 13 percent in the June quarter and nearly 10 percent in the September quarter, thanks to robust domestic demand, as India came out of the global financial crisis much faster than many other economies around the world. Core sectors in industry like mining and construction, which tend to reflect the health of the overall economy, are expected to grow at 6.2 percent in the current fiscal year. India's industrial growth slumped to an 18-month low in November to 2.7 percent but PMI data showed manufacturing grew at a slightly faster pace in January.
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The government estimate comes after a Reuters poll last month forecast the economy would grow 8.7 percent in the current fiscal year and 8.5 percent in the year that ends March 2012.
Prime Minister Manmohan Singh said last week rising prices were a serious threat to growth momentum, underscoring the worries of policymakers about headline inflation above 8.4 percent, driven by stubbornly high food prices. India is the second fastest-growing major economy in the world, after China, and both countries are battling inflation.
India's trade gap and fiscal deficit also cloud the outlook for an economy that, along with China's, has been a key driver of recovery from the global downturn. The trade gap hit a 23-month high of $13 billion in August as imports backed by rising domestic demand far outstripped exports, which were crimped by sluggish recovery in advanced markets, but it shrunk to $2.6 billion in December.
Trade Secretary Rahul Khullar has said that if global crude and commodity prices rise, the trade deficit in the January-March quarter could widen again. "I am happy with the 8.6 percent growth. But there are other concerns apart from GDP. My main concerns are inflation and the trade gap," Finance Minister Pranab Mukherjee told reporters. In the fiscal year that ended last March, India's GDP rose 8 percent, up from 6.7 percent in the fiscal year that ended in March 2009.
India's chief statistician, T.C.A. Anant, said rising global crude oil prices had put pressure on India's fiscal deficit, although he expects the government to meet its target of keeping the fiscal deficit to 5.5 percent of GDP this fiscal year. Rising crude prices threaten to add to the government's fuel-subsidy burden.
India's expected GDP growth this fiscal year will be helped by a rebound in agriculture, which is expected to grow 5.4 percent on good monsoon rains after expanding by just 0.2 percent a year earlier following a severe drought.
The full-year outlook implies a slowdown in fiscal fourth-quarter growth to about 8 percent year-on-year, a four-quarter low, according to Dariusz Kowalczyk, an analyst at Credit Agricole-CIB in Hong Kong. The expected January-March quarter moderation "would provide hope for slowdown in demand-pulled price pressures", Kowalczyk said in a note.
Bond yields, swap rates and the rupee were little changed after the release of the data on Monday.
The strong growth in agriculture is expected despite recent shortages in vegetables, such as onions and potatoes, which have led to high food inflation spilling into the broader economy.
RATE RISES
The Reserve Bank of India, has raised interest rates seven times since March, although monetary policy is expected to have only a limited impact on reining in supply-side driven food inflation. Rising interest rates, meanwhile, have taken a toll on manufacturing, which is expected to grow by 8.8 percent this fiscal year, down from nearly 11 percent growth a year earlier. "You have to look at manufacturing, which at 8.8 percent is beginning to show capacity constraints and price pressures, which could be a drag on growth going forward," said N. Bhanumurthy, senior economist with the National Institute of Public Finance and Policy. The manufacturing sector grew at 13 percent in the June quarter and nearly 10 percent in the September quarter, thanks to robust domestic demand, as India came out of the global financial crisis much faster than many other economies around the world. Core sectors in industry like mining and construction, which tend to reflect the health of the overall economy, are expected to grow at 6.2 percent in the current fiscal year. India's industrial growth slumped to an 18-month low in November to 2.7 percent but PMI data showed manufacturing grew at a slightly faster pace in January.
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