Huge $ buying by PSU oil cos trigger rupee weakness

Jul 04, 2013, 04.21 PM IST

The fall in the rupee came because of huge buying by public sector undertaking (PSU) oil companies

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Huge $ buying by PSU oil cos trigger rupee weakness

The fall in the rupee came because of huge buying by public sector undertaking (PSU) oil companies

Like this story, share it with millions of investors on M3

Huge $ buying by PSU oil cos trigger rupee weakness

The fall in the rupee came because of huge buying by public sector undertaking (PSU) oil companies

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The fall in the rupee came because of huge buying by public sector undertaking (PSU) oil companies

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FMCG companies upbeat about growth on early monsoon

The early arrival and prospects of a good monsoon are making FMCG firms such as Emami , Dabur , Marico and GSK Consumer Healthcare upbeat with expectations of growth in uptake in rural areas that account for up to 50 percent of their sales.

According to the FMCG companies, good monsoon adds to the 'feel good factor' in an economy and creates favourable emotional base for consumption.

"Early and good monsoon specially means good news for the rural economy where dependence on agriculture is high and thus a good monsoon benefits rural consumers very much," Emami Ltd CEO (Sales, Supply Chain and Human Capital) N Krishna Mohan told PTI.

Also read: By mid-July, rainfall across country to intensify: Met

According to him, Emami which gets about 40-45 percent of total sales comes from rural India, expects increased consumption of FMCG products due to a good monsoon. Emami had posted a total turnover of Rs 1,627 crore in 2012-13.

"A buoyant economy especially in rural India would mean more disposable income and would be favourable to FMCG industry as well and there would be increased consumption of FMCG products," Mohan said.

Expressing similar views, Dabur India CFO Lalit Malik said: "Good monsoons are generally favourable for FMCG consumption, particularly rural markets. With a good monsoon, we expect improvement in rural consumption sentiment."

Nearly 50 percent of Dabur's domestic sales are from rural India. Last fiscal the firm had a total sales of Rs 6,146 Crore.

Terming the early arrival of monsoon as a good development, Marico Group CFO Milind Sarwate said: "It creates a favourable emotional base for increased consumption... The feel good factor generated by a good monsoon does help in improving buyer behaviour."

When asked how much of Marico's sales comes from rural market, he said: "The proportion has increased over time and is currently around 30 percent."
Another FMCG player GlaxoSmithKline Consumer Healthcare, is also expecting this year's monsoon to boost consumer spending in rural market.

"Early monsoon lifts consumer sentiments and gives boost to agriculture and economy and therefore lifts consumer spending, especially in rural markets," GlaxoSmithKline Consumer Healthcare Executive Vice President Jayant Singh said.     

The FMCG companies are, however, of the view that over the last few years monsoon is not playing as much role in pushing consumer demand as was the case a decade ago. "This is because of various other reasons which impact the consumer sentiment.

Also the non-farm incomes in rural India are increasing. Therefore, the reliance on monsoon is not what it used to be a decade ago, though the same is still significant," said Mohan of Emami.

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Sadbhav Engg eyes Rs 200cr via rights/pref issue

Nitin Patel, ED of Sadbhav Engineering said the company will raise funds through a combination of rights and preferential issues. 

"The price of the rights issue based on the average of 60 days is coming to Rs 103. So all put together Rs 200 crore is being raised in the company," he told CNBC-TV18.

Below is the edited transcipt of his interview with CNBC-TV18:

Q: We still have only sketchy details about your money raising plan, can you tell us how much you are raising, what is the warrant priced at and what will it be finally converted?

A: Raising is in two parts, first is preferential offer to the promoter and 18 lakh shares have been offered to the promoter at average price of 26 weeks that is at Rs 115.75 per share and the balance 108 lakh shares are being offered in the form of rights issue to all the share holders including promoters.

The price of the rights issue based on the average of 60 days is coming to Rs 103. So the board has decided to offer it at Rs 103 per share. So all put together Rs 200 crore is being raised in the company.

Q: What is the rights ratio?

A: The rights ratio is for every 30 shares we will have one share and one detachable warrant to be converted into equity share at a later date as per the decision of the board.

Q: How do you expect people to subscribe to rights issue at Rs 103 per share when the current market price is Rs 87 per share? Normally rights issues are supposed to come at a discount to market price?

A: Ultimately the average price which has come as per the guideline has come at Rs 103. So based on the discussions amongst the board, it has decided that it will be issued at Rs 100 per share.

This discount in the stock price has come in the last four-five days, before that the stock was above Rs 100.

Q: My point is how would you expect someone to subscribe to the rights issue, how do you plan to raise the money when there is no one who is going to subscribe for this rights issue when you have a stock which is available in the stock market at a 20-25 percent discount and what is the warrant sweetener also along with the rights issue?

A: It will be the detachable warrant. The price of the warrant is also the same. But the subscription time for the warrant is 12-months from the date of issue of the right shares. Therefore, the company is confident that the issue will be subscribed. Accordingly the decision has been taken by the board today.

Q: How much will your equity be diluted by this share issue?

A: In terms of dilution, it is around 10-12 percent but in terms of the preferential offer and the right considering that the promoter which is currently 47.3 percent will go around 51.6 percent post this warrant and the rights issue.

Q: If indeed there is no subscription to the rights issues or if it is undersubscribed, will promoters pitch in and take the balance rights issue?

A: The option is obviously available. So at that time promoter has to take a call. If they are willing to take it, they may go and subscribe that portion also. That option is obviously available to them.

Q: What is the money going to be used for?

A: There are three-four purposes. Considering the current order book, which is above Rs 10,000 crore as compared to the turnover of Rs 1,800 crore of the FY13, it is expected that some capital investment is likely to be done in the company for over a couple of years of Rs 130 crore.

Apart from that, for general corporate purpose also the money will be required basically to cater to the topline target of and to execute all the orders of more than Rs 10,000 crore over the period of three years from now. So all put together, we intend to strengthen the company and also there are most likely chances that the new orders may come considering the current leg in the market. It is decided by the anagement that company should be ready to cater the growth, which is likely to come.

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Nifty closes above 5800 amid volatility; IT, FMCG on fire

16:25

Moneycontrol Bureau
Equity benchmarks surged Thursday, but brokers cautioned of volatility near term, given the global geopolitical developments and India's weak macro-economic fundamentals.

The Sensex ended at 19410.84, up 233.08 points over the previous close, and the Nifty gained 66.05 points to close at 5836.95.

To everybody's surprise, the market did not react negatively to the Cabinet decision to pass the Food Bill Ordinance. The cheap food programme covering 67 percent of the country's population is expected to further strain the already weak finances.

"This will pressure the fiscal deficit down the road, and that cannot be good for foreign investor sentiment, capital inflows and financing deficit," said Sajjid Z Chinoy, Economist (Asia), JP Morgan, in an interview to CNBC-TV18 earlier today.

FMCG and IT were the star performers of the day, while investors ignored shares from the power, metal and capital goods shares.

UCO Bank, TTK Prestige, Reliance Capital, Motherson Sumi and BPCL were the major gainers today, rising 5-10 percent.

Rupee continues to be the key worry for now, even as the RBI doing everything possible to support it, other than outright and aggressive intervention in the currency market.

"60/USD mark has become a strong support for the time being. With the flows having dried up substantially and outflows still continuing, we expect the rupee to be under pressure only," Ashutosh Raina of HDFC Bank.

The weak rupee is also likely to hurt the first quarter earnings of many companies, which be announcing their numbers shortly.

"We think there could be a risk of disappointment in earnings, especially
given the recent rupee depreciation," brokerage house Bank of America Merrill Lynch said in a note to clients, as it cautioned of the weakest sales growth in the last 15 quarters.

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Find out the road ahead for India's BPO industry

Jul 03, 2013, 03.58 PM IST

The BPO India Forum held in Delhi and Mumbai addressed the challenges that new technologies and the road ahead for India's BPOs.

The BPO India Forum held in Delhi and Mumbai addressed the challenges that new technologies and the road ahead for India's BPOs.

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Liquidity no problem; FinMin guidance does not apply: SBI

Jul 03, 2013, 04.21 PM IST

In light of gross NPAs of PSU banks having risen from Rs 71,080 crore to Rs 1.55 lakh crore as on December 2012, Chidambaram further said he has asked banks to review their lending rates. In response , SBI chairman Pratip Chaudhri said that Chidamabaram's guidance to cut base rate did not apply to the bank.

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Liquidity no problem; FinMin guidance does not apply: SBI

In light of gross NPAs of PSU banks having risen from Rs 71,080 crore to Rs 1.55 lakh crore as on December 2012, Chidambaram further said he has asked banks to review their lending rates. In response , SBI chairman Pratip Chaudhri said that Chidamabaram's guidance to cut base rate did not apply to the bank.

Like this story, share it with millions of investors on M3

Liquidity no problem; FinMin guidance does not apply: SBI

In light of gross NPAs of PSU banks having risen from Rs 71,080 crore to Rs 1.55 lakh crore as on December 2012, Chidambaram further said he has asked banks to review their lending rates. In response , SBI chairman Pratip Chaudhri said that Chidamabaram's guidance to cut base rate did not apply to the bank.

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Concerned over rising bad loans, finance minister P Chidambaram on Wednesday asked banks to focus on  top defaulters and take action against them.

Also Read: Take action against loan defaulters: Chidambaram to banks

In light of gross NPAs of PSU banks having risen from Rs 71,080 crore  as on March 2011, to Rs 1.55 lakh crore as on December 2012, Chidambaram further said he has asked banks to  review their lending rates. "Reduction in base rate will be a powerful stimulus to boost credit growth," he said  adding that unless the base rate is cut, interest rates cannot be brought  down.

In a response to the finance minister's comments, SBI chairman Pratip Chaudhri said that Chidamabaram's guidance to cut base rate did not apply to the bank.  "Liquidity is not a problem, we have reserves of Rs 50,000 crore and the bank is in position to merge a subsidiary at this point," he told CNBC-TV18.

Chaudhri added that a CRR cut by RBI would be welcome and the bank would take a view on recapitalisation in Q3FY14.

(With inputs from PTI)

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Silver prices today: Updates on silver rates in India

On Wednesday the rates of gold were trading mixed in major cities of India. However, on MCX silver prices were trading higher. At 15:03 hrs MCX Silver July contract was trading at Rs 40465 up Rs 582, or 1.46 percent.

The Silver rate touched an intraday high of Rs 40525 and an intraday low of Rs 40120. So far 120 contracts have been traded. Silver prices have moved down Rs 24545, or 37.76 percent in the July series so far.

Mumbai

Spot silver 999 prices gained by Rs 355 at Rs 42420 per one kilogram.

Ahmedabad

Spot silver 999 prices rose by Rs 150 at Rs 41030 per one kilogram.

Chennai

Spot silver 999 prices slipped by Rs 300 at Rs  40700 per one kilogram.

Delhi

Spot silver 999 prices were down by Rs 50 at Rs  41250 per one kilogram.

Jaipur

Spot silver 999 prices gained by Rs 200 at Rs  41300 per one kilogram.

Spot Gold Rates for 10 grams in major metros in India:

City	Silver 999	Change (Rs)
Mumbai (Jul 03)	42420	355
Ahmedabad (Jul 03)	41030	150
Chennai (Jul 03)	40700	-300
Delhi (Jul 03)	41250	-50
Jaipur (Jul 03)	41300	200

Click here for all other information on silver

Disclaimer: These are only indicative spot market prices obtained from market sources from various cities by commoditiescontrol.com. Investors are advised to confirm the rates before buying or selling as actual prices may vary. Moneycontrol.com will not responsible for any loss incurred by acting on these prices.

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Venus Remedies shares gain on Japanese patent for Elores

Moneycontrol Bureau  

Venus Remedies shares rallied 6.6 percent intraday Wednesday after the pharmaceutical company received patent from Japanese Patent Office for Elores - the antibiotic against superbugs.

The company is expecting to launch this product in Japanese market by end of 2015.

"We expect this product to generate revenue of around USD 100 million by 2018," Venus said in its filing.

Venus has received patents for this product from 46 countries across the world including US, European Union, Australia, New Zealand, Russia, South Africa, South Korea and India.
 
The stock rose 2.04 percent to close at Rs 265.10 amid large volumes on the Bombay Stock Exchange.

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Buy Canara Bank, TV18 Broadcast, Rel Comm: Lancelot D Cunha

In CNBC-TV18's popular show Bull's Eye, Lancelot D Cunha, Sharyans Wealth Management shares his trading strategies for the day.

One can buy Peninsula Land with a target of Rs 45.90 and stop loss of Rs 40.30. The stock has been sold off on fears of real estate segment slowing down. However, the company has performed very well in the last quarter and I expect that a bit of short covering as well as interest rate buying is taking place. The stock has broken out on large volumes and the momentum should continue and should move to its target price of Rs 45.90.

One can buy Canara Bank with a target of Rs 392. Canara Bank had sold off all the way down to Rs 348 and has seen significant buying thereafter in line with all the other public sector undertaking (PSU) banks that have seen interest rate buying. Since the stock has moved up on large volumes I expect the momentum to continue and should hit its target of Rs 392.

One can buy TV18 Broadcast with a target of Rs 26. TV18 has recently launched new channel which could be positive for the company and it has moved up in line with the market sentiment as well as on large volumes. I expect the momentum to continue and to take it to its target of Rs 26.

One can buy Reliance Communications (RComm) with a target of Rs 137.50. The stock has moved up with significant volumes, there could be a significant amount of short covering and the fact that the telecom authority is likely to allow RComm to continue with its dual licensing strategy is positive for the company. Buying momentum could continue and we could see it hitting its target price.

Disclaimer: Moneycontrol.com and Television Eighteen Network are both part of the Network18 Group.

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MCX Goldpetal September contract trades higher

At 15:56 hrs MCX GOLDPETAL July contract was trading at Rs 2620 up Rs 17, or 0.65 percent. The GOLDPETAL rate touched an intraday high of Rs 2624 and an intraday low of Rs 2600. So far 16861 contracts have been traded. GOLDPETAL prices have moved down Rs 96, or 3.53 percent in the July series so far.

MCX GOLDPETAL August contract was trading at Rs 2620 up Rs 18, or 0.69 percent. The GOLDPETAL rate touched an intraday high of Rs 2624 and an intraday low of Rs 2604. So far 3949 contracts have been traded. GOLDPETAL prices have moved down Rs 87, or 3.21 percent in the August series so far.

MCX GOLDPETAL September contract was trading at Rs 2625 up Rs 20, or 0.77 percent. The GOLDPETAL rate touched an intraday high of Rs 2631 and an intraday low of Rs 2605. So far 674 contracts have been traded. GOLDPETAL prices have moved up Rs 48, or 1.86 percent in the September series so far.

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