Friday, August 31, 2012

Languishing GDP growth!

It is no surprise to learn that in the quarter ending June, the GDP growth of India got weaker, exhibiting its lowest in three years, at 5.5 percent. With this exposure, there seems to be no respite for Prime Minister Manmohan Singh. The economic agenda that he created is no wonder paralyzed owing to a series of political scandals. And the coal scandal exposed by CAG has added fuel to the fire. As he is trying to escape those scandals, the GDP report for June Qtr acted as an eye-opener, hitting him worse!

Exports have been hit due to weak demand in the West. But such fluctuations do occur. It is lack of government reforms and overspending that has affected greatly the GDP growth. Investors hoped that the weak GDP growth would influence the RBI to lower interest rates at its next policy meeting to be held on September 17. But again the stubbornly high inflation has come on the way!

After the GDP data report, sensex recovered to about 80 points from it's lowest point of the day and Nifty too improved by 25 points from it's lowest point. However, due to fall in ICICI bank shares, sensex fell by 0.92% and nifty fell by 1.1%.

Tuesday, August 28, 2012

Jindal Steel and Power Ltd hits its 3 years low!

The after effects of CAG report are putting many stocks on rout. Jindal Steel and Power is one of them and its shares have hit a 3 years low today. The NSE shares touched a low of Rs.358.85/- and closed at Rs.359.15/-

Jindal Steel and Power Ltd NSE shares had fall 6.5% today hitting it's earlier lowest, of previous two sessions, since May 2009. It’s 3rd day in a row that Jindal shares have slumped. It seems investors are holding to invest in companies who have been named in the Comptroller and Audit General report which was published earlier this month on August 17.

Not only Jindal, but the entire metal index got slashed today. Another reason for the dip accounts to the slowing demand due to low growth rate.

Friday, August 24, 2012

Price rally affecting Indian gold imports!

Revelation by delegates at a major conference on August 24 about Indian gold imports to fall further this year holds much ground. According to reports by the World Gold Council, it fell to 131 tonnes or 56 percent in the second quarter. The fall is all because of global gold prices being driven higher by the weaker dollar and surplus cash in the market. Prices of gold have more than doubled since 2008, restraining purchases from price-sensitive Indian buyers.

As of August 24 statistics, gold prices, exhibited its biggest weekly rise, an uptrend by 3 percent since early June. No wonder demand in China for gold is increasing; this may trigger gold market to peak at $1,800-$1,850 an ounce by the end of this year. Gold is seen by the government as a dead asset, hence encouragement to the masses to spend on other Indian goods and consume things in India.

Wednesday, August 22, 2012

Market trends and Bharti Airtel’s lowest close

Talks by the government of disinvestment and fuel subsidies may to some extent lead to improvement of the Indian economy. Decisions are delaying but a ray of hope persists amongst market investors.

On the 22nd of August, the share market fell, snapping the previous two-day rise. Whatever uptrend was witnessed in the India stock market since July was majorly contributed by foreign liquidity flows amounting to around $3 billion. And this has happened even without the government announcing any fiscal reforms.

You can well imagine the positive consequences when fiscal measures get announced by the government! Amid the market players that were a puppet of volatility, one of the biggest losses was faced by Bharti Airtel Ltd. NSE shares, the shares of which fell 3.8 percent to their lowest close (22nd August) since Oct. 2006. News about the potential entry into voice and data segments by Reliance Infotel, a unit of Reliance Industries, has led to Airtel shares downtrend.

Friday, August 17, 2012

After-effects of CAG reports!

CAG reports are creating headlines and it would no wonder affect India’s already volatile stock market. The reports reveal losses amounting to billions of dollars being incurred. The government was accused for the losses.

These reports were on three sectors, viz. coal, power, and aviation. Coal blocks, Delhi's flagship airport, and power projects were allocated at a fraction of market prices, which cost the exchequer tens of billions of dollars in lost proceeds. Developers got the airport land at a tenth of its market value, thus gaining an undue profit of $4.3 billion. Had the allocation happened wisely, results would have been otherwise in the CAG report.

It is now the PM’s turn to receive a blow of negative criticism and the opposition is already seeking answer from the PM, even demanding his resignation, as he was linked to the coal allocation in favor of private companies. It is to wait and watch the effect of the CAG reports! But the effect on the India stock market was evident with the falling share price of those named by the CAG!

Tuesday, August 14, 2012

Reliance Power Ltd posts 23% Rise in Net Profit

Reliance Power Ltd has posted a rise in net profit to 2.40 billion rupees from 1.96 billion rupees in April-June. The company has revealed that its sales have doubled at 11.36 billion rupees. This is in line with the expectations of analysts. The company operates at 1,540 MW capacity and is all set to triple its capacity to 5,000 MW by the end of 2012.

Despite a good show up of Reliance Power Qtly results, two giant projects of the company have been stalled, due to the scarcity of cheap fuel. The company will hold a news conference on Tuesday to talk specifically about these projects. The scarcity of cheap fuel has prompted many power plants in the country to run below the capacity. This led to world’s worst blackout a fortnight ago which affected half of the Indian population.

In order to meet the shortage of fuel, Reliance Power has been lobbying the government to import gas. Reliance Power, controlled by billionaire Anil Ambani, is caught in a legal dispute with government of four states over the issue of $3.2 billion power project in southern state of Andhra Pardesh.

The shares of Reliance Power Ltd. NSE closed at INR93.15 and saw a high of 1.8% by reaching  INR93.90 share value. Reliance Power has proven worthwhile to its shareholders and traders.

Monday, August 13, 2012

Coal India Targets Strong Growth With Rise in Net Profit!

Coal India, country’s fourth largest company by market, has reported it's highest ever, rise in net profit
to 8% to 44.69 billion rupees for April-June. This is in comparison to the figures last
year. The company’s net sales rose to 13.8 per cent touching 165 billion rupees. Coal India Ltd Qtrly results showed better-than-expected rise in earnings, which may prove helpful in boosting sentiments for stock,
which already has risen to 16% so far.

Coal India, producer of nearly 80% of the supply in India, has struggled hard to increase
the output in view of problems pertaining to regulatory approval and swift environmental
control. The company is under pressure by government to increase the supply in order to
deal with the shortage which has been the reason behind slowing down of many power

Bowing to the condition set by the government, Coal India has agreed to supply
minimum of 80 per cent coal required for new 48 power projects. The company has
reported that it produced 102.5 million tonnes of coal in the fiscal year in comparison to
96.3 million tonnes in the last year. There is a 6.3% rise in shipments to 113.04 million
tonnes. Coal India NSE shares are hoped to rise and traders are definitely looking up on a bullish trend!

Saturday, August 11, 2012

Rising Qtrly Loss - Rising Kingfisher's woes!

Kingfisher, controlled by Vijay Mallya, continues to struggle in view of high airport charges, high state taxes on jet fuel, an uncertain regulatory environment, and fares falling below the costs. Kingfisher, which used to be India’s second biggest carrier, has never made profit since 2005. Kingfisher net profit results showed that the carrier has suffered a loss of 6.51 billion rupees in quarter ending June in comparison to loss of 2.64 billion rupees in the last year.

Kingfisher Airlines Ltd NSE shares closed at INR7.40/- quite close to its 52 week low of INR7.20/-

According to Center for Asia Pacific Aviation Consultancy, Kingfisher needs at least $500 million for uninterrupted operations. Kingfisher has not received any stakes from any foreign airline. The rising state taxes up to 30% have made the jet fuel costlier in India as compared to other countries.

 Cancellation of flights due to non-payment of salaries of pilots or crew have added to the woes of the company. Kingfisher’s woes have worked no less than a boon for other players in the market, namely Jet Airways and SpiceJet, which have reported a surprise rise in quarterly profits.

Friday, August 10, 2012

SBI Q1 Net Profit Results: Expectations exceeded but shares plunge!

State Bank of India declared it's Q1 Net profit results. The SBI Q1 results have surpassed analyst expectations however the shares plunged on the grounds of rise in bad loans too.

State Bank of India has posted a second surge in the net profit from 15.84 billion rupees a year to 37.52 billion rupees. This is higher than the expectations of the analysts who had expected a net profit of 36.17 billion rupees. However there has been an improvement in the bad debts in the quarter ending March. UBS had downgraded SBI's rating from Buy to Sell on grounds of weak monsoon adding woes to it's high bad loans. The slowdown in Indian economy and falling monsoon rains are said to add to the already high bad loans by the bank.

The net interest income experienced a rise of 14.6 per cent to 111.19 billion rupees.

State Bank of India NSE shares also experienced a downfall of 2.7 per cent in Mumbai market on Friday afternoon. The investors have been experiencing some nervousness in view of the State Bank of India’s exposure to embattled Kingfisher Airlines and Air India.

Thursday, August 9, 2012

Tata Motors Ltd Faces Disappointing Results!

Recognized as India’s biggest truck and bus maker, Tata Motors, posted a rise in quarterly profit to 12% which is less than expected. Jaguar Land Rover (JLR), which was brought in 2008 has been Tata’s main profit driver in the latest quarters. However, profitability at Tata’s JLR seems to be dampening in view of sluggish growth in China and struggling phase of European economies.

In order to balance manufacturing with demand, Tata Motors Ltd. was forced to shut down two units twice for a three-day period in the month of June. Tata Motors Ltd net profit results shoved 22.45 billion rupees for the quarter that ended in June, which is up 12.3% when compared to previous year. This is, however, less than expected as the analysts expected the net profit to go up to 27.61 billion rupees. The company has also attributed the disappointing results to the impact of foreign exchange loss. The sales of Tata Motor Vehicles also fell by 3.6%

Tata Motors Ltd. NSE shares soon saw a downtrend of about 4% plunging it’s shares to as low as INR231.65/-

Wednesday, August 8, 2012

Bharti Airtel - 10th Qtr of Squeezed Margins!

Sunil Mittal, controller of Bharti Airtel Ltd, said there is a fall in net profits of about 37% to 7.62 billion rupees as compared to previous year for the first quarter of the fiscal year ending June. This is in contrast to the expectations of analysts where Bharti was likely to post a net profit of 12.7 billion rupees on revenue of 195.79 billion rupees.

With its 2010 venture into Africa and acquiring Kuwaiti Telecom Zain’s operations in 15 countries, Bharti has become world’s fifth largest mobile phone carrier. However, with the high African costs, Bharti is yet to turn the African operations gainful.

Bharti Airtel Ltd NSE shares hit it's new 52 week low today with shares trending around INR 272.75/- 

On his statement on Wednesday, Mittal attributed the fall in telecom revenues in India to the hyper-competition as well as regulatory and tax developments. Despite the voice call prices being stable, the markets are yet to recover from the sharp cuts on prices the war of which started 2 years ago.

Read complete coverage of Bharti Airtel Qtrly results at Reuters India.

Monday, August 6, 2012

Surging Money Market: Ray of Hope for India

Thanks to improved US jobs data sparking a global risk rally. Thanks to anticipation for government measures by the recently-appointed finance minister to clarify tax laws and of helping the mutual fund sector, which proved to be a welcome relief. Markets have surged by over one percent in today’s (6th August) trade, which is the peak close since July 11. While sensex ended at 17,412.96 points, up 1.25 percent, nifty ended at 5,282.55 points up 1.28 percent.

It was RIL. that exhibited the highest rise on the 50-share nifty index. The conglomerate soared to a four-and-a-half month high with volumes in the counter exceeding the 50-day average. At Rs 786, price of shares of RelianceIndustries Ltd NSE closed 5.9 per cent higher. No wonder, in terms of market capitalization, Reliance has emerged as India's most valued company, thus regaining the pole position. And there are genuine reasons for this sharp rise. A key meeting between Reliance Industries and officials of the oil ministry is supposedly to take place tomorrow (7th August). Investment plans for KG-D6 block including commercial viability of three new significant gas discoveries in this block are likely to be discussed. The worst hit Reliance Industries shares for the last 18 months did cast a shadow over Indian equity markets. Good times are sure to come and it is already being exhibited!

Finance Minister P. Chidambaram is all geared up to unveil a plan to rein in the country's fiscal deficit. Such measures will boost market sentiments to the favor of investors.Read complete purview on what the Finmin has in store for India at