ICICI Bank fell 20% on Friday. KV Kamath, Managing Director and CEO, ICICI Bank, said that ICICI Bank is very well-capitalised at 150% of the requirement. He added that the bank is among the soundest financial institutions in the world.
Kamath feels the anatomy of rumours suggest they are intended to destabilize the bank. He said that the bank will continue to report malicious messages to the regulators, and that rumours are being spread by a market intermediary, and not by any bank.
Kamath said that the worry is that such things can be done to other financial institutions as well. He added that he can see a clear patter of disinformation which is a cause for worry. Rumours are playing negatively on the sentiment of people, he said.
Kamath clarified that there has not been any drastic decline in deposits in the last three weeks. He said their morale will remain high, and that the bank will continue to fight for its customers. He added that call rates had gone up to 22–24% due to high liquidity crunch and the long-term shareholders have not sold any stocks recently. He further said that no senior management has sold shares in the last nine months.
Monday, October 13, 2008
FM lauds RBI steps, says more measures could be on anvil
Finance Minister P Chidambaram has said that the root cause of uncertainty was liquidity and that there were no fundamental worries, and expressed confidence in the steps taken by the Reserve Bank of India to ease liquidity pressures. He pointed out that Rs 91,000 crore has been accessed via the LAF window.
The FM added that we live in times of uncertainty and one cannot ignore facts in an apparent reference to the global economic crisis.
India's economy continues to grow at a healthy pace, he said, pointing out that the International Monetary Fund notes Indian gross domestic product (GDP) to grow by 7.9% in the fiscal year ’09 and said that the investment GDP remains high at over 35%.
Being optimistic on the domestic situation, the FM referred to the country’s agricultural harvest and said that kharif crop has been good and the prospects of rabi crop were bright too.
Here is a verbatim transcript of Finance Minister P Chidambaram’s speech on CNBC-TV18. Also watch the accompanying video.
I met you last Wednesday after the Cabinet meeting and since then, there have been a number of developments both in other countries of the world and in India. I thought it would be appropriate to make a statement today.
These are times of uncertainty, yet even during times of uncertainty, there are some facts that cannot be and ought not to be ignored. The Indian economy continues to grow at a satisfactory rate. As recently as last week, the IMF’s research department Mr Oliver Blanchard noted that, ‘The Indian economy would continue to do well despite the global liquidity crunch.’ As per projections made by the IMF, India is expected to post a GDP growth of 7.9% during the current fiscal year.
The stock market Indices are important indicators but they are not the only indicators of the health of the Indian economy. The ratio of investment to GDP remains high at over 35% at the end of Q1 of 2008-09. The monsoon has been normal. The Kharif crop especially rice and cotton has been good, farmers are sowing their fields and the prospects for the Rabi crop are bright. Factories continue to produce goods and the services sector is growing at a brisk rate.
Crude oil and commodity prices have declined sharply and this is expected to have a beneficial effect on inflation. The root cause for the present uncertainty is liquidity and not any dramatic change in the fundamentals of the economy. According to RBI figures, as on 26 September 2008, non-food credit increased year-on-year by 24.8%. Between April and 26 September 2008, non-food credit grew by 7.8%. Time and demand deposits with banks grew year on year by 18.8% and between April and 26 September 2008 by 7.2%. I am happy that depositors continue to repose their confidence in the health of our banking system.
Nevertheless, liquidity was found to be inadequate and consequently lenders were unwilling to take risk. Some lenders and investors faced redemption pressures leading to a sale of assets especially stocks. The markets that are bearing the brunt of the problem are the capital market and the money market and to an extent the foreign-exchange market. These problems can be overcome if adequate liquidity is infused into the system.
Accordingly, Reserve Bank of India (RBI) has taken measures that have infused an additional Rs 60,000 crore into the financial system. The liquidity-adjustment facility (LAF) also provides liquidity and as on 10 October 2008, Rs 91,500 crore has been accessed by banks through the LAF window. We believe that these steps should ease the liquidity situation and the flow of credit should become smoother relieving the pressures that had built up in the last two weeks.
The Government, RBI and Securities and Exchange Board of India (SEBI) have been in close consultation of each other during the weekend. I had spoken to the Governor of RBI and Chairman of SEBI several times in the last two days. We are coordinating our actions. We are watching the situation carefully and we will respond swiftly according to the needs of the situation. We are working on more measures that will infuse liquidity, make credit intermediation smoother and increase the confidence of depositors and investors. We hope to be able to announce them shortly. Our banks are ready and willing to provide credit, suitable advisories are being issued to the banks.
Over the weekend, the US, UK, Euro Zone and Australian authorities have announced a number of measures to stabilize the financial system. The Australian capital market and three of the East-Asian capital markets have opened on a bright note this morning. I expect that our capital market will also take its cue from these positive developments. We must remain confident and respond to the situation in a cool and mature manner.
We must banish fear; especially depositors have nothing to fear because their deposits in banks are safe. Investors must take informed decisions. Before you sell; you must remember that for every seller there is a buyer. You must ask yourself why the buyer is buying in these times of perceived uncertainty and therefore ask yourself the further question whether there is a need to act in haste or in panic. In my view, there is no reason at all to act in haste or give room for panic. If all the players in the economy remain confident and take informed decisions, I have no doubt that the Indian economy will weather the current storm and emerge stronger. If necessary, I shall make a further statement later today.
The FM added that we live in times of uncertainty and one cannot ignore facts in an apparent reference to the global economic crisis.
India's economy continues to grow at a healthy pace, he said, pointing out that the International Monetary Fund notes Indian gross domestic product (GDP) to grow by 7.9% in the fiscal year ’09 and said that the investment GDP remains high at over 35%.
Being optimistic on the domestic situation, the FM referred to the country’s agricultural harvest and said that kharif crop has been good and the prospects of rabi crop were bright too.
Here is a verbatim transcript of Finance Minister P Chidambaram’s speech on CNBC-TV18. Also watch the accompanying video.
I met you last Wednesday after the Cabinet meeting and since then, there have been a number of developments both in other countries of the world and in India. I thought it would be appropriate to make a statement today.
These are times of uncertainty, yet even during times of uncertainty, there are some facts that cannot be and ought not to be ignored. The Indian economy continues to grow at a satisfactory rate. As recently as last week, the IMF’s research department Mr Oliver Blanchard noted that, ‘The Indian economy would continue to do well despite the global liquidity crunch.’ As per projections made by the IMF, India is expected to post a GDP growth of 7.9% during the current fiscal year.
The stock market Indices are important indicators but they are not the only indicators of the health of the Indian economy. The ratio of investment to GDP remains high at over 35% at the end of Q1 of 2008-09. The monsoon has been normal. The Kharif crop especially rice and cotton has been good, farmers are sowing their fields and the prospects for the Rabi crop are bright. Factories continue to produce goods and the services sector is growing at a brisk rate.
Crude oil and commodity prices have declined sharply and this is expected to have a beneficial effect on inflation. The root cause for the present uncertainty is liquidity and not any dramatic change in the fundamentals of the economy. According to RBI figures, as on 26 September 2008, non-food credit increased year-on-year by 24.8%. Between April and 26 September 2008, non-food credit grew by 7.8%. Time and demand deposits with banks grew year on year by 18.8% and between April and 26 September 2008 by 7.2%. I am happy that depositors continue to repose their confidence in the health of our banking system.
Nevertheless, liquidity was found to be inadequate and consequently lenders were unwilling to take risk. Some lenders and investors faced redemption pressures leading to a sale of assets especially stocks. The markets that are bearing the brunt of the problem are the capital market and the money market and to an extent the foreign-exchange market. These problems can be overcome if adequate liquidity is infused into the system.
Accordingly, Reserve Bank of India (RBI) has taken measures that have infused an additional Rs 60,000 crore into the financial system. The liquidity-adjustment facility (LAF) also provides liquidity and as on 10 October 2008, Rs 91,500 crore has been accessed by banks through the LAF window. We believe that these steps should ease the liquidity situation and the flow of credit should become smoother relieving the pressures that had built up in the last two weeks.
The Government, RBI and Securities and Exchange Board of India (SEBI) have been in close consultation of each other during the weekend. I had spoken to the Governor of RBI and Chairman of SEBI several times in the last two days. We are coordinating our actions. We are watching the situation carefully and we will respond swiftly according to the needs of the situation. We are working on more measures that will infuse liquidity, make credit intermediation smoother and increase the confidence of depositors and investors. We hope to be able to announce them shortly. Our banks are ready and willing to provide credit, suitable advisories are being issued to the banks.
Over the weekend, the US, UK, Euro Zone and Australian authorities have announced a number of measures to stabilize the financial system. The Australian capital market and three of the East-Asian capital markets have opened on a bright note this morning. I expect that our capital market will also take its cue from these positive developments. We must remain confident and respond to the situation in a cool and mature manner.
We must banish fear; especially depositors have nothing to fear because their deposits in banks are safe. Investors must take informed decisions. Before you sell; you must remember that for every seller there is a buyer. You must ask yourself why the buyer is buying in these times of perceived uncertainty and therefore ask yourself the further question whether there is a need to act in haste or in panic. In my view, there is no reason at all to act in haste or give room for panic. If all the players in the economy remain confident and take informed decisions, I have no doubt that the Indian economy will weather the current storm and emerge stronger. If necessary, I shall make a further statement later today.
ItzCash attracts int'l private equity invt of USD 10mn
ItzCash, India's first multi-purpose pre-paid card, which is part of the One Billion Dollar Essel Group of Companies, today announced closure of approx USD 10 million funding led by Matrix Partners India and co-investor Intel Capital. ItzCash will be using this fund for leading product innovation to expand the payments market.
Mr. Ashok Goel, Chairman (Non-Executive), ItzCash Card Limited said, "We are pleased to be associated with Matrix Partners, India and Intel Capital, who support ItzCash's vision, " To offer a safe and easy payment option to every Indian for seamless transactions across digital and physical domains". ItzCash India's first multipurpose prepaid cash card - a smart option to transact on-line and on-mobile has given millions of Indians a unique and secure transaction ability through the Internet and mobile."
Mr. Avnish Bajaj, co-founder and Managing Director Matrix Partners India said, "ItzCash is a unique & innovative product offering from Essel Group, India's well recognized and leading diversified business group, with a history of pioneering innovative businesses in India. We are delighted to be associated with ItzCash which we believe is strongly positioned at the intersection of a very large pre-paid card issuance and payments processing opportunity in India."
Mr. Sudheer Kuppam, Managing Director, Intel Capital India, Japan, Australasia & South-East Asia, said, "Having witnessed the positive impact of prepaid cards on the telecom sector, we believe prepaid cards have the potential to usher in similar growth in the Indian online commerce market. Given the new developments spurring the adoption of prepaid cards, we believe that companies like ItzCash will play an important role in the alternate payments space."
Mr. Ashok Goel, Chairman (Non-Executive), ItzCash Card Limited said, "We are pleased to be associated with Matrix Partners, India and Intel Capital, who support ItzCash's vision, " To offer a safe and easy payment option to every Indian for seamless transactions across digital and physical domains". ItzCash India's first multipurpose prepaid cash card - a smart option to transact on-line and on-mobile has given millions of Indians a unique and secure transaction ability through the Internet and mobile."
Mr. Avnish Bajaj, co-founder and Managing Director Matrix Partners India said, "ItzCash is a unique & innovative product offering from Essel Group, India's well recognized and leading diversified business group, with a history of pioneering innovative businesses in India. We are delighted to be associated with ItzCash which we believe is strongly positioned at the intersection of a very large pre-paid card issuance and payments processing opportunity in India."
Mr. Sudheer Kuppam, Managing Director, Intel Capital India, Japan, Australasia & South-East Asia, said, "Having witnessed the positive impact of prepaid cards on the telecom sector, we believe prepaid cards have the potential to usher in similar growth in the Indian online commerce market. Given the new developments spurring the adoption of prepaid cards, we believe that companies like ItzCash will play an important role in the alternate payments space."
Friday, October 10, 2008
Sensex India: Stock Market Today
Sensex crashes by 800 pts on weak global cues
Mumbai, Oct 10 (UNI) The Bombay Stock Exchange Sensex witnessed a southward movement for the fifth consecutive day today, as it declined by 800.51 points and ended in red at 10,527.85 points from it last close on the back of global sell-off and dismal Index of Industrial Production (IIP) data for August 2008.
The National Stock Exchange Nifty index also quoted below the 3,500 barrier and declined by 233.70 to settle at 3,279.95 points from it last finish of 3,513.65. The Sensex has plummeted steeply by 2,527.82 points in the last five days.
Brokers said that IT stocks suffered due to downward revision in guidance in dollar terms by IT bellwether Infosys Technologies.
Markets have completely shattered and washed out on account of scary global cues and weak IIP data, despite of RBI's initiative to inject around Rs 60,000 crore liquidity in the banking system in the form of cutting CRR by 150 bps, brokers said.
Metal, realty, capital goods, power, banking, and oil stocks have been affected severely. Midcap and small cap stocks took huge beating on the bourses as well.
In early as well as late trade, it was looking like the Sensex would hit lower circuit, but fortunately, it did not happen.
Lower circuit for the Sensex was fixed at 1,275 points and for the Nifty at 390 points. The Sensex tumbled 1,088.6 points and the Nifty fell by 314.7 points in the intra-day trade to hit a low of 10,239.76 and 3,198.95, respectively.
Banking stocks were volatile reacting to a slew of news such as cut in cash reserve rate, slowdown in industrial production and fall in inflation. Reliance Communications declined by 22.65 per cent, Reliance Infrastructure lost 20.09 per cent and Jaiprakash Associates shed 18.36 per cent.
Securities and Exchange Board of India (SEBI) chief C B Bhave today said there was no unusual activity in the stock market. He further said there has been no shorting by institutions in cash markets. Stocks fell across the globe despite worldwide central bank measures to stave off a crisis. Bank bailouts, liquidity injections and interest rate cuts across the world have failed to quell investor anxiety with Asian stocks tumbling today, following overnight setback in US stocks.
Back home, the Reserve Bank of India (RBI) today cut the cash Reserve Ratio (CRR) second time in the week. The central bank cut CRR by 100 basis points after 50 basis point cut earlier in the week.
BSE clocked a turnover of Rs 5,073 crore today as compared to a turnover of Rs 5,135.12 crore on October 8, as yesterday was a holiday. Total turnover traded stood very low at Rs 68,100.82 crore.
This includes Rs 14,727.85 crore from NSE Cash segment, Rs 48,279 crore from NSE F&O and balance Rs 5,093.97 crore from BSE cash segment.
On the BSE, key indices also suffered a setback as CG index heavily came down by 810.33 points to close low at 7,983.04 points followed by METAL index by 666.89 to 6,542.57, OILS & GAS index by 524.15 to 7,272.35, BANKEX index by 452.77 to 5,319.50 points, SML CAP index by 343.48 to 4,355.45, MID CAP index by 334.48 to 3,676.00, REALTY index by 321.27 to 2,523.07 points, PSU index by 259.23 to 5,535.99 points, CD index by 240.65 to 2,139.50, AUTO index by 186.98 to 3,255.68 points, TECK index by 152.70 to 2,112.03 points, HC index by 131.09 to 3,213.28 points, IT index by 116.98 to 2,584.25 points and FMCG index went down by 86.78 to 1,860.55 points.
The top heavy weight stocks also declined on renewal of offloading by local bear operators, as REL COM Limited fell steeply by 21.02 per cent to close negative at Rs 237.40, followed by ICICI Bank by 19.71 per cent to Rs 364.10, REL INFRA by 19.26 per cent to Rs 515.30, Jai Prakash Asso by 16.27 per cent to Rs 76.15, Tata Steel by 14.99 per cent to Rs 287.50, Hindalco by 11.18 per cent to Rs 80.65, HDFC by 8.98 per cent to Rs 1,719.20, DLF Limited by 8.79 per cent to 281.65, BHEL by 8.28 per cent to Rs 1,345.85, L & T by 8.02 per cent to Rs 889.15, Reliance by 7.43 per cent to Rs 1,527.00 and Hindustan Unilever by 6.72 per cent to Rs 222.05.
Only two leading heavy weight shares looked up on scattered bull support by local operators, as Ranbaxy Lab rose smartly by 4.71 per cent to settle high at Rs 292.40 and SBI was up by 2.27 per cent to Rs 1,352.15.
Mumbai, Oct 10 (UNI) The Bombay Stock Exchange Sensex witnessed a southward movement for the fifth consecutive day today, as it declined by 800.51 points and ended in red at 10,527.85 points from it last close on the back of global sell-off and dismal Index of Industrial Production (IIP) data for August 2008.
The National Stock Exchange Nifty index also quoted below the 3,500 barrier and declined by 233.70 to settle at 3,279.95 points from it last finish of 3,513.65. The Sensex has plummeted steeply by 2,527.82 points in the last five days.
Brokers said that IT stocks suffered due to downward revision in guidance in dollar terms by IT bellwether Infosys Technologies.
Markets have completely shattered and washed out on account of scary global cues and weak IIP data, despite of RBI's initiative to inject around Rs 60,000 crore liquidity in the banking system in the form of cutting CRR by 150 bps, brokers said.
Metal, realty, capital goods, power, banking, and oil stocks have been affected severely. Midcap and small cap stocks took huge beating on the bourses as well.
In early as well as late trade, it was looking like the Sensex would hit lower circuit, but fortunately, it did not happen.
Lower circuit for the Sensex was fixed at 1,275 points and for the Nifty at 390 points. The Sensex tumbled 1,088.6 points and the Nifty fell by 314.7 points in the intra-day trade to hit a low of 10,239.76 and 3,198.95, respectively.
Banking stocks were volatile reacting to a slew of news such as cut in cash reserve rate, slowdown in industrial production and fall in inflation. Reliance Communications declined by 22.65 per cent, Reliance Infrastructure lost 20.09 per cent and Jaiprakash Associates shed 18.36 per cent.
Securities and Exchange Board of India (SEBI) chief C B Bhave today said there was no unusual activity in the stock market. He further said there has been no shorting by institutions in cash markets. Stocks fell across the globe despite worldwide central bank measures to stave off a crisis. Bank bailouts, liquidity injections and interest rate cuts across the world have failed to quell investor anxiety with Asian stocks tumbling today, following overnight setback in US stocks.
Back home, the Reserve Bank of India (RBI) today cut the cash Reserve Ratio (CRR) second time in the week. The central bank cut CRR by 100 basis points after 50 basis point cut earlier in the week.
BSE clocked a turnover of Rs 5,073 crore today as compared to a turnover of Rs 5,135.12 crore on October 8, as yesterday was a holiday. Total turnover traded stood very low at Rs 68,100.82 crore.
This includes Rs 14,727.85 crore from NSE Cash segment, Rs 48,279 crore from NSE F&O and balance Rs 5,093.97 crore from BSE cash segment.
On the BSE, key indices also suffered a setback as CG index heavily came down by 810.33 points to close low at 7,983.04 points followed by METAL index by 666.89 to 6,542.57, OILS & GAS index by 524.15 to 7,272.35, BANKEX index by 452.77 to 5,319.50 points, SML CAP index by 343.48 to 4,355.45, MID CAP index by 334.48 to 3,676.00, REALTY index by 321.27 to 2,523.07 points, PSU index by 259.23 to 5,535.99 points, CD index by 240.65 to 2,139.50, AUTO index by 186.98 to 3,255.68 points, TECK index by 152.70 to 2,112.03 points, HC index by 131.09 to 3,213.28 points, IT index by 116.98 to 2,584.25 points and FMCG index went down by 86.78 to 1,860.55 points.
The top heavy weight stocks also declined on renewal of offloading by local bear operators, as REL COM Limited fell steeply by 21.02 per cent to close negative at Rs 237.40, followed by ICICI Bank by 19.71 per cent to Rs 364.10, REL INFRA by 19.26 per cent to Rs 515.30, Jai Prakash Asso by 16.27 per cent to Rs 76.15, Tata Steel by 14.99 per cent to Rs 287.50, Hindalco by 11.18 per cent to Rs 80.65, HDFC by 8.98 per cent to Rs 1,719.20, DLF Limited by 8.79 per cent to 281.65, BHEL by 8.28 per cent to Rs 1,345.85, L & T by 8.02 per cent to Rs 889.15, Reliance by 7.43 per cent to Rs 1,527.00 and Hindustan Unilever by 6.72 per cent to Rs 222.05.
Only two leading heavy weight shares looked up on scattered bull support by local operators, as Ranbaxy Lab rose smartly by 4.71 per cent to settle high at Rs 292.40 and SBI was up by 2.27 per cent to Rs 1,352.15.
RBI acts as Sensex reacts
The Indian stock markets have taken it on their chin. They started the day down almost 1,000 points with the benchmark BSE-30 and NSE-50 indices trailing the rout seen in other key Asian markets. However these have rebounded following a CRR cut by the RBI. Stocks in Japan, Hong Kong and Singapore are currently trading down by 10%, 7% and 7% respectively.
The Sensex and Nifty are currently trading down by almost 460 and 200 points respectively. The BSE-Midcap and BSE-Smallcap indices are trading lower by 6% and 5% respectively. The rupee is trading at 49.02 to the dollar.
In a move to tide over the liquidity crisis facing the Indian banking system, the RBI has slashed the CRR (cash reserve ratio) by 1.5%. However, this deduction is done in replacement of the 0.5% cut that was announced on October 6 (Read the RBI release on CRR cut). As such the total cut of 1.5% includes the earlier deduction. The CRR will now stand at 7.5% effective October 11 2008. The cut is expected to release Rs 600 bn into the banking system and is expected to soothe nerves. The Indian banking system has been severely starved for liquidity on account of the ongoing crisis in the US and Europe. Some banks have even ceased giving out loans and some are borrowing from their peers at very high rates. Stocks from the banking sector are trading weak currently. Major losers include ICICI Bank(down 9%), IDBI Bank (6%) and Yes Bank (5%).
Technology stocks are trading deep in the red currently, led by Infosys (down 6%) and Satyam (down 8%). Weakness in Infosys is despite a strong set of results announced by the company earlier this morning. The company has recorded sales and profits growth of 12% QoQ and 10% QoQ respectively for 2QFY09. What is more, operating margins have expanded to 33.1%, from 30.5% in 1QFY09. While citing a cautious outlook on the offshoring opportunity from the US, the management has maintained its guidance for FY09. The company added 40 new clients and 5,900 employees during the quarter.
The Sensex and Nifty are currently trading down by almost 460 and 200 points respectively. The BSE-Midcap and BSE-Smallcap indices are trading lower by 6% and 5% respectively. The rupee is trading at 49.02 to the dollar.
In a move to tide over the liquidity crisis facing the Indian banking system, the RBI has slashed the CRR (cash reserve ratio) by 1.5%. However, this deduction is done in replacement of the 0.5% cut that was announced on October 6 (Read the RBI release on CRR cut). As such the total cut of 1.5% includes the earlier deduction. The CRR will now stand at 7.5% effective October 11 2008. The cut is expected to release Rs 600 bn into the banking system and is expected to soothe nerves. The Indian banking system has been severely starved for liquidity on account of the ongoing crisis in the US and Europe. Some banks have even ceased giving out loans and some are borrowing from their peers at very high rates. Stocks from the banking sector are trading weak currently. Major losers include ICICI Bank(down 9%), IDBI Bank (6%) and Yes Bank (5%).
Technology stocks are trading deep in the red currently, led by Infosys (down 6%) and Satyam (down 8%). Weakness in Infosys is despite a strong set of results announced by the company earlier this morning. The company has recorded sales and profits growth of 12% QoQ and 10% QoQ respectively for 2QFY09. What is more, operating margins have expanded to 33.1%, from 30.5% in 1QFY09. While citing a cautious outlook on the offshoring opportunity from the US, the management has maintained its guidance for FY09. The company added 40 new clients and 5,900 employees during the quarter.
IIP numbers add to woes....
The markets continued to remain in the negative territory but have shed some of their earlier losses on account of buying activity at lower levels during the previous two hours. Stocks from the banking, engineering, power and telecom sectors are leading the pack of losers. The overall decline to advance ratio is poised at 8:1 on the BSE.
The BSE Sensex and NSE Nifty are trading lower currently, down by almost 620 points and 180 points respectively. The BSE Midcap and Smallcap indices are trading lower by 8% and 7% respectively. The rupee is trading at 48.13 to the dollar.
The Index of Industrial Production (IIP) numbers for the month of August 2008 show a growth rate of 1.3% YoY, much lower the 10.9% growth registered during the same period last year. As per the data released by the Ministry of Planning & Programme Implementation, the manufacturing sector reported a growth of mere 1.1 % as compared to 10.7% during August 2007. Capital goods growth stands at 2.3% YoY against 30.8%. The lower growth rate in output can be attributed to the tight monetary regime and a weaker rupee, which in turn has pulled down the overall demand in the economy.
Tata Chemicals plans to put hold on the joint venture (JV) with Tanzanian government. As per report from a leading daily, the company had plans to set up a soda ash plant in JV with the Tanzanian government with an investment of around US$ 500 mn. Environmentalists in Tanzania argued that the proposed plant might pose environmental hazards. Hence, the company decided to put on hold on building the plant till the Tanzanian government gets all the clearances. In other developments company's biofuel plant in Maharashtra will go on stream next month. It also plans to expand its urea production capacity from 0.95 m tonnes to 1.2 m tonnes at its UP plant. The stock is trading down 9%.
The BSE Sensex and NSE Nifty are trading lower currently, down by almost 620 points and 180 points respectively. The BSE Midcap and Smallcap indices are trading lower by 8% and 7% respectively. The rupee is trading at 48.13 to the dollar.
The Index of Industrial Production (IIP) numbers for the month of August 2008 show a growth rate of 1.3% YoY, much lower the 10.9% growth registered during the same period last year. As per the data released by the Ministry of Planning & Programme Implementation, the manufacturing sector reported a growth of mere 1.1 % as compared to 10.7% during August 2007. Capital goods growth stands at 2.3% YoY against 30.8%. The lower growth rate in output can be attributed to the tight monetary regime and a weaker rupee, which in turn has pulled down the overall demand in the economy.
Tata Chemicals plans to put hold on the joint venture (JV) with Tanzanian government. As per report from a leading daily, the company had plans to set up a soda ash plant in JV with the Tanzanian government with an investment of around US$ 500 mn. Environmentalists in Tanzania argued that the proposed plant might pose environmental hazards. Hence, the company decided to put on hold on building the plant till the Tanzanian government gets all the clearances. In other developments company's biofuel plant in Maharashtra will go on stream next month. It also plans to expand its urea production capacity from 0.95 m tonnes to 1.2 m tonnes at its UP plant. The stock is trading down 9%.
RBI's rescue attempt in vain
The carnage on the Indian bourses continued as selling pressure was witnessed across the sectors. Stocks from the realty and consumer durables sector were the worst hit. As regards global markets, Asian markets closed deep in the red, while European markets have also opened on a negative note.
The BSE Sensex closed almost 790 points lower, while the NSE Nifty closed lower by 230 points. The BSE Midcap and Smallcap indices also closed in the red, down 8% and 7% respectively. The rupee was trading at 48.65 to the dollar.
Mirroring its global peers, the benchmark indices opened deep in the red on account of worries of the ongoing financial crisis. After the announcement of 1% cut in CRR by RBI to ensure liquidity, the markets pared some losses. However, the tepid growth numbers of IIP worsened the case and the benchmark indices once gain dived down. The overall market breadth was negative with losers outnumbering gainers by a ratio of 10.9 to 1 on the NSE. While Ranabxy (up 4%) and SBI (up 2%) emerged as the top gainers on the BSE Sensex today, Reliance Communications (down 23%) and ICICI Bank (down 20%) led the pack of losers.
As per a leading business daily, Wockhardt has signed a 10 year in-licensing deal with UK-based Sinclair Pharma to market a range of dermatology and dental products in India. The 10-year exclusivity agreement covers a wide range of patented and innovative products, including Papulex (for acne), Atopiclair (for atopic dermatitis), Aloclair (for mouth ulcer) and Decapinol range (for gingivitis and plaque). As per ORG IMS, the Indian dermatology market has been pegged at about Rs 18 bn. As per the agreement, Wockhardt will leverage its technological capabilities by manufacturing formulations in India from bulk imported from Sinclair Pharma. The move is in line with the company's strategy to increase contribution from niche products. The stock (down 6%), along with its peers Dr. Reddy's (down 4%) and Biocon (down 3%), closed in the red. Ranbaxy closed higher by 4%.
ICICI Bank, the second largest bank in the country, closed lower by 18% on the benchmark indices today after having dipped as much as 26% from yesterday’s closing levels during the noon session. This was due to investor worries regarding the bank’s capital position despite the fact that its capital adequacy ratio (CAR) stood at 13.4% in 1QFY09, fairly above the minimum 9% norm as per the RBI. The bank has notified through a press release that it has enough liquidity to meet depositors’ needs and minimal exposure to overseas investments. The mark to market losses on the bank’s investment book in 1HFY09, however, remain a concern. The stock of HDFC Bank closed lower by 5%, while that of SBI ended higher by 2%.
The BSE Sensex closed almost 790 points lower, while the NSE Nifty closed lower by 230 points. The BSE Midcap and Smallcap indices also closed in the red, down 8% and 7% respectively. The rupee was trading at 48.65 to the dollar.
Mirroring its global peers, the benchmark indices opened deep in the red on account of worries of the ongoing financial crisis. After the announcement of 1% cut in CRR by RBI to ensure liquidity, the markets pared some losses. However, the tepid growth numbers of IIP worsened the case and the benchmark indices once gain dived down. The overall market breadth was negative with losers outnumbering gainers by a ratio of 10.9 to 1 on the NSE. While Ranabxy (up 4%) and SBI (up 2%) emerged as the top gainers on the BSE Sensex today, Reliance Communications (down 23%) and ICICI Bank (down 20%) led the pack of losers.
As per a leading business daily, Wockhardt has signed a 10 year in-licensing deal with UK-based Sinclair Pharma to market a range of dermatology and dental products in India. The 10-year exclusivity agreement covers a wide range of patented and innovative products, including Papulex (for acne), Atopiclair (for atopic dermatitis), Aloclair (for mouth ulcer) and Decapinol range (for gingivitis and plaque). As per ORG IMS, the Indian dermatology market has been pegged at about Rs 18 bn. As per the agreement, Wockhardt will leverage its technological capabilities by manufacturing formulations in India from bulk imported from Sinclair Pharma. The move is in line with the company's strategy to increase contribution from niche products. The stock (down 6%), along with its peers Dr. Reddy's (down 4%) and Biocon (down 3%), closed in the red. Ranbaxy closed higher by 4%.
ICICI Bank, the second largest bank in the country, closed lower by 18% on the benchmark indices today after having dipped as much as 26% from yesterday’s closing levels during the noon session. This was due to investor worries regarding the bank’s capital position despite the fact that its capital adequacy ratio (CAR) stood at 13.4% in 1QFY09, fairly above the minimum 9% norm as per the RBI. The bank has notified through a press release that it has enough liquidity to meet depositors’ needs and minimal exposure to overseas investments. The mark to market losses on the bank’s investment book in 1HFY09, however, remain a concern. The stock of HDFC Bank closed lower by 5%, while that of SBI ended higher by 2%.
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