February 11, 2010 IN FOCUS
Weekly Indicators Once you replace negative thoughts with positive ones, you'll start having positive results.
Indicators Current Last Week (Willie Nelson)
Sensex 16,153 15,791 RBI simplifies ECB norms; mulls replacing BPLR with new base lending rate
Nifty 4,827 4,719 The Reserve Bank of India (RBI) has simplified the procedures relating to external
Forex Reserves N/A US$280.95 bn commercial borrowing (ECB) with immediate effect. It has delegated the powers to
Food Inflation 17.94% 17.56% banks – which are category-I authorized dealers in foreign currency – to approve
changes in repayment schedule of the overseas borrowings already availed. The RBI
has allowed the banks to approve changes in the currency of borrowing, if the
Currency Current Last Week
borrower company desired. The banks have also been empowered to allow change in
US$1 Rs. 46.46 Rs. 46.56
the name of the borrower companies subject to production of supporting documents
€1 Rs. 64.02 Rs. 63.85
evidencing the change in the name from the RoC. Separately, the RBI is planning to
£1 Rs. 72.6541 Rs. 73.2086
introduce a new base rate with effect from April 01, 2010 for transparent pricing of
JP¥ 100 Rs. 51.66 Rs. 51.89 credit, replacing the existing Benchmark Prime Lending Rate (BPLR). The base rate
Global Economic News will be the new reference rate for determining lending rates. The RBI said that no
US unemployment rate falls to 9.7% in Jan’10 bank will be allowed to give loans below the base rate. The base rate will be
from 10% in Dec’09: Labor Department applicable for all new loans as well as for old loans that come for renewal. The RBI
UK economy grew 0.4% during three months to
January expects that deregulation of lending rates will increase the credit flow to small
The BoE has lowered UK's economic outlook and borrowers at a reasonable rate.
forecast inflation to undershoot its 2% target
Bernanke outlines strategy for unwinding Fed's accommodative policy
French industrial production declined 0.1% MoM
in Dec’09, reversing a revised 0.6% rise in Nov’09 Written testimony from Federal Reserve Chairman Ben Bernanke has outlined a
The Bank of Korea has voted to keep interest definite strategy for unwinding the Fed's accommodative policy but no timetable was
rates on hold for 12th consecutive month,
maintaining the record low of 2% provided on when it would do so, instead saying that the central bank would be
Japan saw a current account surplus of JP¥900.8 ready when the time comes. “Although at present the US economy continues to
bn in Dec’09 require the support of highly accommodative monetary policies, at some point the
German foreign trade balance showed a surplus
of €136.1 bn in 2009 Federal Reserve will need to tighten financial conditions by raising short-term
Japan saw a current account surplus of JP¥900.8 interest rates and reducing the quantity of bank reserves outstanding,” Bernanke
bn in Dec’09, registering a rise of 452.8% on YoY
said in prepared remarks. Though no timetable was given, Bernanke did outline
German industrial production declined 2.6% MoM specific strategies that the Fed could implement to unwind policy. The central bank
in Dec’09, reversing an increase of 0.7% in chief said that the Fed may move to a new benchmark target rate other than the
Japan's machine tool orders surged 192% YoY in federal funds rate. Bernanke said that the Fed may raise interest rates on reserves
Jan’10 after an increase of 63.4% in Dec’09 first, in order to put pressure on short term rates, and added that the Fed is also
considering raising the discount rate in the near future. Bernanke has also outlined
Global Corporate News other additional tools the central bank would use to reduce the reserves held by the
BHP Billiton Group has posted US$6.14 bn profit banking system. The Fed chief also said that the Fed would conduct tests in the
in H1, as against US$2.62 bn profit in H1 last year
spring on using term deposits to drain reserves.
UBS AG has posted CHF 1.37 bn profit in Q4CY09,
as against CHF 9.44 bn loss in Q4CY08 Govt developing projects worth $47.7 bn: FM
Coca-Cola has posted $1.54 bn profit in Q4CY09, The Union Finance Minister Pranab Mukherjee said that as many as 450
as against $995 mn profit in Q4CY08
Deutsche Bank has posted €1.3 bn profit in infrastructure projects are being set up through PPP mode in the country at an
Q4CY09, as against €4.8 bn net loss in Q4CY08 estimated cost of $47.7 bn, reflecting improved environment for upgrading the core
ArcelorMittal has posted US$1.07 bn profit in sector. According to the booklet issued for the purpose, 95 projects are being built in
Q4CY09, as against US$2.63 bn loss in Q4CY08
Walt Disney has posted $844 mn profit in Q1, as Karnataka with estimated project cost of Rs. 394.91 bn. In terms of cost, however,
against $845 mn profit in the year-ago quarter Andhra Pradesh tops the list with 65 projects worth Rs. 403.14 bn being set up in
AT&T has posted $3.01 bn profit in Q4CY09, as
against $2.4 bn net income in Q4CY08
the state. The highest number of projects is being set up in the road sector at 271
Prudential Financial has posted $1.79 bn profit in with estimated total costs of Rs. 1.02 lakh crore. As many as 43 projects are being
Q4CY09, as against $1.66 bn loss in Q4CY08 set up in the port sector with costs of over Rs. 660 bn. The urban development
Sprint Nextel has posted $980 mn loss in Q4CY09,
as against $1.62 bn loss in Q4CY08 sector is witnessing creation of 72 projects with total cost of over Rs. 150 bn.
S&P has lowered its ratings outlooks for Citi and PMEAC wants Govt to plan stimulus exit in Budget
Bank of America to negative from stable
Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan has
Boston Scientific has posted $1.07 bn loss in
Q4CY09, as against $2.39 bn loss in Q4CY08 said that the government should come out with a roadmap for withdrawal of
Cognizant has posted $144 mn profit in Q4CY09, stimulus in the upcoming Budget. He said the word rollback is too strong in
as against $112.29 mn profit in Q4CY08
EOG Resources has posted $400.43 mn profit in
expression and the stimulus exit has to be a gradual process. On Goods and Service
Q4CY09, as against $461.47 mn profit in Q4CY08 Tax (GST), he said that any step taken in the Budget that takes the country closer to
Principal Financial has posted $141.9 mn profit in GST should be a welcome. Rate adjustment for moving towards GST should be
Q4CY09, as against $7.5 mn net loss in Q4CY08
CVS Caremark has posted $1.04 bn profit in attempted in the budget, he added. The GST will do away with most of the indirect
Q4CY09, as against $949 mn profit in Q4CY08 taxes at the Centre like excise and service tax and at the states like VAT and octroi.
Hartford Financial has posted $557 mn profit in
Q4CY09, as against $806 mn net loss in Q4CY08
Fuel price hike on cards; Deora begins consultations
NYSE Euronext has posted $172 mn profit in The Union Minister for Petroleum & Natural Gas, Murli Deora has started
Q4CY09, as against $1.34 bn net loss in Q4CY08 consultations with political parties, including UPA's partners, ahead of taking a
Axis Capital has posted $282.06 mn profit in
Q4CY09, as against $130.85 mn profit in Q4CY08 proposal to increase fuel prices to the Union Cabinet. It is reported that the
Petroleum Ministry is likely to go with the Kirit Parikh panel's recommendation of
Asim Mohapatra freeing petrol and diesel prices, but wants the hike proposed for LPG and kerosene
Content Editor moderated. Deora is likely to meet the FM on Sunday to press for the unmet subsidy
firstname.lastname@example.org on cooking fuels, and discuss hike in fuel prices.
Bridging the Information Gap in Corporate Landscape
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2. Sectors 05-08
A. IT & ITeS 05
B. Auto & Auto Ancillaries / Pharma & Healthcare 06
C. Steel, Metals & Minerals/ Telecom 07
D. Banking & Financial Services / Miscellaneous 08
4. Ratings, Delistings & Open Offers 09
5. Insurance & Mutual Funds 10
6. M&As 11
7. Ensuing Events 12
6. Global 13-17
• Global Economy 13
• Global Business 14-17
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Weekly Newsletter 2
Bridging the Information Gap in Corporate Landscape
ECONOMY & INFRASTRUCTURE
IMF asks India to phase out subsidies
The International Monetary Fund (IMF) has asked India to phase out subsidies and introduce
market based pricing for petroleum products following its rapid recovery from the global
financial crisis. The IMF said that the subsidies on products consumed predominantly by the
poor should be replaced with targeted support. The IMF directors also suggested early
introduction of the Goods 7 Services Tax and the new Direct Tax. The IMF has suggested India
set financial sector reforms as its longer term priorities to facilitate infrastructure investment, and fiscal
consolidation. IMF directors also welcomed India's announcement to lower the deficit starting from the next
budget. The IMF said that most directors considered that anchoring India's medium term fiscal framework
with a debt target would be helpful. Given long transmission lags and the low policy rates, most IMF
directors advised a timely start of the withdrawal of monetary stimulus, which would help anchor inflation
expectations and soften the impact on long term interest rates. They recognized the challenges the
authorities face in managing capital inflows, and welcomed their intention to continue to employ a range of
measures. Most directors considered that rupee appreciation would help contain inflation and manage capital
inflows, although a few Directors argued for caution in this area. Sterilized intervention could help reduce
excessive exchange rate volatility, provided it does not generate further inflows, IMF said supporting the
RBI's approach to use prudential measures in case asset bubbles were to develop. Given the need to
develop India's financial markets, several Directors advised a tightening of capital controls only as a last
resort. Noting that India's financial system has weathered the global crisis well, they supported the
initiatives to further strengthen the capital of public banks and financial regulation and the higher
provisioning requirements recently introduced. Meanwhile, while appreciating India's self assessment of the
financial sector they noted that the assessment of financial stability could be further strengthened via
multifactor stress tests and an independent evaluation of compliance with international standards.
RBI simplifies ECB norms; gives more power to banks
The Reserve Bank of India (RBI) has simplified the procedures relating to external commercial borrowing
(ECB) as part of a liberalization of the ECB policy. The central bank has delegated the powers to banks,
which are category-I authorized dealers in foreign currency, to approve changes in the draw-down or
repayment schedule of the overseas borrowings already availed. Banks would be allowed to approve
changes in the schedule of drawdown or repayment subject to the original average maturity period
remaining the same. Any elongation or rollover in the repayment on expiry of the original maturity of the
overseas borrowing would require prior approval of RBI. In a notification, RBI said banks have also been
allowed to approve changes in the currency of borrowing, if the borrower company desired, subject to all
other terms and conditions of the ECB remaining unchanged. Banks will have to ensure that the proposed
currency of borrowing is freely convertible. The liberalization in the ECB policy is with immediate effect.
Borrowing companies have also been allowed to change the bank that would be handling the transactions
pertaining to the overseas borrowings after obtaining a no-objection certificate (NOC) from the existing
authorized dealer bank. Banks have also been empowered to allow change in the name of the borrower
companies subject to production of supporting documents evidencing the change in the name from the
Registrar of Companies. All other aspects of the ECB policy, such as $500 mn limit per company per financial
year under the automatic route, eligible borrower, recognized lender, end-use, all-in-cost ceiling, average
maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.
IOC, OVL, OIL with 2 consortium partners to develop oil project in Venezuela
An international consortium comprising of Indian Oil, ONGC Videsh (OVL), Repsol YPF (Repsol), Petroliam
Nasional Berhad (Petronas) and Oil India (OIL) has secured the right from the Venezuelan Government to
acquire 40% interest in an Empresa Mixta (Mixed Company), which would develop Carabobo 1 North and
Carabobo 1 Central blocks located in the Orinoco Heavy Oil Belt, as well as associated upgrading and
infrastructure projects. The Orinoco Oil Belt contains the largest accumulation of oil in Venezuela, with
estimated oil-in-place of over 1.0 trillion barrels. The 7 blocks included in 3 projects in the Carabobo region
are estimated to contain 128 bn barrels of heavy oil-in-place and the volume of crude oil recoverable from
each project has been estimated to be around 3 to 3.4 bn barrels. The multi-billion dollar project is one of
the largest integrated energy projects in the world. Corporacion Venezolana del Petroleo SA (CVP) – a
subsidiary of Petroleos de Venezuela (PdVSA) – will hold 60% equity interest in the Mixed Company, which
will have an initial license term of 25 years that can be extended by further 15 years. The Mixed Company
will construct heavy oil production facilities, upgrading facilities and associated infrastructure. The upstream
production facilities will produce about 400,000 barrels per day of extra heavy oil, which will be upgraded
into light crude oil in an upgrading facility to be located in the Soledad area, Anzoategui State in Venezuela.
The Govt needs investment to the tune of Rs. 3,610 bn to meet the shortage of nearly 25 mn housing units, said Minister of State
for Urban Development Sougata Roy said.
Weekly Newsletter 3
Bridging the Information Gap in Corporate Landscape
ECONOMY & INFRASTRUCTURE
Indo-Turkish trade cross US$5 bn mark by FY12: Turkish Minister
India and Turkey have much in common and the mutual expertise can be used to widen the trade prospects,
and there is a need to re-discover the Indo-Turkish relationship, said the President of Turkey, Abdullah Gul
at an exclusive interaction with the leaders of the Indian industry, which was organized by CII and BSE in
Mumbai. Sectors such as energy, tourism, transportation, IT & ITeS, construction, R&D, banking and finance
were identified as the key areas for fostering bilateral growth between the two countries. Encouraging
people-to-people interaction and improving air connectivity to other cities of India like Chennai, Hyderabad
and Kolkata, will certainly help in knowing each other better, highlighted the President. From US$3.44 bn in
FY08, it is envisaged that the bilateral trade will cross US$5 bn mark by FY12, said, Turkish Minister of State
Prof. Mehmet Aydin.
ASSOCHAM urges for refinance of infrastructure debts through ECB
According to Associated Chambers of Commerce & Industry of India (ASSOCHAM) the Indian lenders
especially for infrastructure sector including steel should be permitted to refinance their long-term debts
through External Commercial Borrowings (ECBs) from FY11 onwards so that their long term working capital
requirements are met without any inconvenience. It has also suggested that commercial banks be permitted
to raise long-term bonds from NRIs say for a period of 10 years to garner funds for infrastructure sector. It
has also mooted a proposal to permit pension funds to invest up to 15% of their funds in infrastructure
projects as also suggested that refinancing of existing rupee loans through ECB be permitted for such
projects based on interest cost advantage. It has emphasized that ECB usage should be permitted for
utilization against working capital and long term financing of debts for infrastructure sector especially steel
industry. The Chamber has emphasized that earlier policy of allowing Indian banks to guarantee ECBs
should be restored to enable corporates to access cheaper source of funds to effectively compete in the
export markets. Thirdly, it has suggested that commercial banks be allowed to raise long-term bonds from
NRIs as they are well equipped with funds and wants longer investments avenues in developing economy
like India to enable it garner funds for infrastructure sector. ASSOCHAM has also suggested that refinancing
of existing rupee loans through ECBs be permitted for such projects based on interest cost advantage.
The Govt has allowed Foreign Investment Promotion Board (FIPB) to approve foreign investment of up to Rs. 12 bn, against the
existing limit of Rs. 6 bn.
The wholesale price-based food inflation rose to 17.94% in the last week of January from 17.56% in the previous week. The
inflation for primary articles increased to 15.75% during the week from 14.56% a week earlier.
NHAI plans to increase the outlay on building roads for FY11 by 64.6% to Rs. 477.36 bn. Under its Work Plan I, which is a target of
projects to be awarded in FY10, the authority plans to award the 126 projects worth Rs. 1,000 bn and cover 11,928 kms.
The RBI will shortly put into circulation new commemorative circulation coins of Rs. 10 denomination (bi-metallic) on the occasion of
Homi Bhabha Birth Centenary Year.
Japan has signed an MoU with Gujarat Maritime Board (GMB) to invest Rs. 1 bn to upgrade the recycling yards, construct and
operate a common hazardous waste removal pre treatment facility, develop ways to add value to steel products with electric furnace
and cultivate human resource capacity by way of technology transfer and financial assistance under a private public partnership.
HCC has secured three projects worth Rs. 28.6 bn from NHAI, while Sadbhav Engineering-led consortium has bagged the project
worth Rs. 12.25 bn from NHAI, BHEL has bagged a Rs. 10 bn contract in Bhutan, L&T has bagged orders aggregating Rs. 5.82 bn,
and Areva T&D India has secured two contracts for Extra High Voltage turnkey projects at the Moga (Punjab) and Bhiwani
(Haryana) plants from PGCIL.
IIFCL plans to will raise US$1 bn (around Rs. 46 bn) in the next two fiscal years ($500 mn each in FY11 and FY12) to fund power,
road, port and airport projects.
Shiva Cement has announced that the dispatch of cement and clinker declined by 3.8% YoY in Jan'10 due to temporary drop in
production. However, dispatches rose by 39.7% YoY during Apr'09-Jan'10 period.
DLF is reportedly planning to raise Rs. 10 bn through unsecured loans by the end of this month, while hinting that prices in the
housing segment could witness an increase.
Unitech plans to launch 12-13 new projects, most of them residential, in the next few months. The total space of these new
projects would be 7-8 mn square feet.
Nagarjuna Construction has secured five orders worth Rs. 5.83 bn, while Madhucon Projects has secured 3 hydro power
projects of 25 mw each totaling 75 MW expandable to 100 MW on BOT basis from Uttarakhand Jal Vidyut Nigam, Sadbhav
Engineering has bagged contract worth Rs. 136.83 cr, BHEL has bagged a Rs. 4.95 bn hydel power project in J&K, Concurrent
(India) has won an order worth Rs. 11.8 cr in Orissa, and Kilburn Engineering has bagged two orders totaling to Rs. 67.82 crore.
NTPC and Indian Oil have signed an MoU for collaborative research in areas of mutual interest. The proposed joint research will be
will in the areas of power and energy sectors for import substitution of lubricants, bio–fuels, corrosion, and R&D infrastructure.
Weekly Newsletter 4
Bridging the Information Gap in Corporate Landscape
IT & ITeS
India's IT-BPO market to touch $285 bn by 2020: study
The country's IT-BPO market (including exports) is expected to touch $285 bn in 2020 from $71 bn in 2009,
on the back of double-digit growth, a study has said. The Indian IT-BPO sector will grow at a compounded
annual growth rate of 15%, a joint study by KPMG and Asian-Oceanian Computing Industry Organisation
said. The country's export-driven IT sector witnessed a single-digit growth in 2009-10 due to the financial
crisis and recession in the US, from where the sector gets more than half its revenue. “India is expected to
achieve double-digit growth rates in the IT-BPO industry,” KPMG Global Head of Sourcing Advisory Kumar
Parakala said. Moreover, India, the current market leader in global sourcing supply, serving about 51% of
overall global sourcing demand is expected to retain its leadership position by 2020, it added. The report
also highlighted that the composition of demand will undergo a change from 2008 to 2020. The contribution
of some of the developed countries like Japan, Australia and New Zealand in the demand for IT-BPO service
is likely to decrease. However, the contribution of developing countries like India and Thailand is expected to
increase in the coming years.
Tanla to launch on-device payments, pre-loaded content distribution partner program
Tanla Solutions, the global leader for in-application billing and mobile software license management
solutions has announced that it will be launching it's "On-device payments and preloaded content
distribution partner program" to coincide with the Mobile World Congress in Barcelona on 16 February 2010.
Tanla's partner program will be launched at a special event at the "Mercat de le Flors Theatre" in Barcelona
on 16th February at 8.30am. The developers program will be announced by Tanla and will be supported by
presentations from Carphone Warehouse, Sony Ericsson, Accumulate and a panel session hosted by Tim
Green, Editor, Mobile Entertainment Magazine. Tanla already has over 200 application developers using their
payments and license management solution. With the launch of the Tanla distribution partner program they
aim to expand the list of content providers and distribution partners.
Solix ExAPPS… Solix Technologies launches industry’s first application retirement appliance
Solix Technologies, a leading provider of enterprise data management solutions, has launched of Solix
ExAPPS, the industry’s first Application Retirement appliance to simplify and greatly reduce the cost of
retiring legacy applications in the enterprise without sacrificing data preservation. A single Solix ExAPPS
appliance can replace multiple physical servers, applications and storage in data centers or enterprises’ IT
departments. The Solix ExAPPs Application Retirement appliance - pre-built, pre-configured, pre-tested with
all necessary software and hardware components - introduces simplicity to a complex problem. Customers
with finite number of specific packaged and custom applications on distributed systems will find the
appliance most appealing as it will allow automated repeatable process for multiple applications.
Patni net income rises 13.5% QoQ to Rs. 1.87 bn in Q4
Patni Computer Systems has posted US$40.5 mn (Rs. 1,878.4 mn) net income in Q4CY09, as against
US$35.7 mn (Rs. 1,715.7 mn) net income in Q3CY09, registering a rise of 13.5% on QoQ basis. Its
revenues stood at US$170.2 mn (Rs. 7,896.1 mn) in Q4CY09, as against US$167.2 mn (Rs. 8,040.2 mn) in
Q3CY09, registering a rise of 1.8% on QoQ basis. Its operating income stood at US$33.3 mn (Rs.1,545.6
mn) in Q4CY09, as against US$27.1 mn (Rs.1,303.1 mn) in Q3CY09, registering a rise of 22.9% on QoQ
basis. The Company has posted US$119.8 mn (Rs. 5,557.8 mn) net income in CY09, as against US$101.4
mn (Rs. 4,927.0 mn) net income in CY08, registering a rise of 18.1% on YoY basis. Its revenues stood at
US$655.9 mn (Rs. 30,434.6 mn) in CY09, as against US$718.9 mn (Rs. 34,923.4 mn) in CY08. Its operating
income rose by 31.4% YoY to US$100.6 mn (Rs. 4,669.6 mn) in CY09, as against US$76.6 mn (Rs. 3,720.1
mn) in CY08. The Board of Directors of the Company has recommended 150% final dividend (Rs. 3 per
equity share of Rs. 2 each) for the year 2009.
Florida-based Magnus Hi-Tech Industries has experienced reduced engineering and CNC programming time by using CAMWorks, an intuitive
solids-based CAM solution from Geometric.
Comp U Learn Tech India has formed Compulearn Middle East FZC (CME), a majority-owned subsidiary of the Company in UAE as the
major growth initiative.
HCL Axon has announced a successful go live of SAP ECC for Tianjin Tasly Sants Pharmaceuticals, one of China's largest pharmaceutical
Subex has signed a multi-million dollar contract with the leading Tier-I North American communications service provider (CSP) to implement
ROC for cost management.
TCS is currently seeing 8-10% growth in domestic revenues and is eyeing a high double-digit growth in the next two years, as the deal cycle
has returned to the pre-crisis levels.
As a part of its expansion strategy, Firstobject Technologies is planning to set up a facility at SEZ, Vizag. The Company has started
interaction with the officials of SEZ, which is known as Visakhapatnam SEZ.
NIIT Technologies has received Rs. 228 order from Border Security Force for Intranet Prahari project.
Moser Baer India has announced that its subsidiary i.e. Moser Baer Photo Voltaic has terminated its long-term wafer purchase contract with
REC Wafer Norway AG, in exercise of its rights under the aforesaid contract.
Tanla Solutions has announced the release of the first unique mobile application on the iPhone allowing the world to discover its singing
ability in comparison to an original artist.
Four Soft has announced that its flagship product 45 eCustoms has successfully gone live at multiple locations of Charter Brokerage, one of
the major customs brokerage and freight forwarding companies in the US and Canada.
Weekly Newsletter 5
Bridging the Information Gap in Corporate Landscape
AUTO & AUTO ANCILLARIES
Auto sales cross record 11 lakh units in January
The Indian auto industry has reported the highest ever sales in a single month at over 11 lakh units in
Jan’10, boosted by easy availability of retail finance and soft interest rates. According to the Society of
Indian Automobile Manufacturers (SIAM), the total sales in domestic market stood at 11,14,157 units in
Jan’10, against 7,68,698 units in Jan’09, registering a rise of 44.94% on YoY basis. The earlier highest sales
by the industry was in October, 2006, at 10,17,198 units. Domestic passenger car segment has posted the
highest ever sales at 1,45,905 units in Jan’10, as against 1,10,300 units in Jan’09. During the month major
manufacturers, including Maruti Suzuki, Hyundai Motor, General Motors and Mahindra & Mahindra reported
their individual record breaking sales. Motorcycle sales rose 43.69% to 6,50,633 units in Jan’10, as against
4,52,809 units in Jan’09. Sale of commercial vehicles in the country soared over two-fold to 53,447 units in
Jan’10, as against 23,154 units in Jan’09. In the domestic passenger car segment, sales of Maruti Suzuki
increased 18.57% to 70,029 units in Jan’10, as against 59,060 units in Jan’09. Hyundai Motor India has
registered 40.86% growth at 29,601 units in Jan’10, as against 21,015 units in Jan’09. Tata Motors' sales
rose to 22,707 units in Jan’10, as against 15,406 units in Jan’09. Hero Honda's sales moved up 23.98% to
3,66,050 units in Jan’10, as against 2,95,241 units in Jan’09. Bajaj Auto's sales soared nearly three-fold to
1,79,212 units in Jan’10, as against 66,207 units in Jan’09. TVS Motor Company has posted 31% growth at
39,654 units in Jan’10, as against 30,271 units in Jan’09. Honda Motorcycle & Scooter India saw its bike
sales rise 9.53% to 40,174 units in Jan’10, as against 36,677 units in Jan’09. The total two-wheeler sales
surged by 43.43% to 8,34,383 units in Jan’10, as against 5,81,729 units in Jan’09.
Wabco-TVS (India) has entered into an agreement with original equipment manufacturer Mahindra Navistar Automotives (MNAL)
for development and long-term supply of air compressor technology, products for braking systems and clutch servo technology with
series production starting in 2010. MNAL, a JV in India between Mahindra & Mahindra and Navistar, manufactures a world class
range of trucks and tractor trailers that sets new levels of reliability, efficiency and customer value for the commercial vehicle
Renault has ruled out breaking away from its existing joint venture with the M&M, but said it wants to restructure the operations of
the partnership entity.
PHARMA & HEALTHCARE
Daiichi Sankyo to launch innovator products in Mexico through Ranbaxy
Ranbaxy Laboratories and Daiichi Sankyo Company announced specific plans to introduce innovator products
of Daiichi Sankyo in Mexico through the marketing division (“Daiichi Sankyo Division”) that was created last
year within Ranbaxy’s Mexican subsidiary, Ranbaxy Mexico SA de CV (Ranbaxy Mexico). Daiichi Sankyo and
Ranbaxy Mexico have agreed to commercialize olmesartan medoxomil, an antihypertensive discovered by
Daiichi Sankyo, in Mexico. The companies have agreed to promote prasugrel, an antiplatelet co-developed
by Daiichi Sankyo and Eli Lilly and Company, in Mexico. Prasugrel will be co-promoted by Lilly’s affiliate in
Mexico. In preparation for the launch and swift market penetration of olmesartan medoxomil and prasugrel,
Daiichi Sankyo Division will be hiring a dedicated team of medical representatives. Olmesartan medoxomil is
a member of the angiotensin receptor blocker (ARB) class of antihypertensive medications that help lower
blood pressure by blocking the angiotensin II receptor on the blood vessels and antagonizing the release of
the hormone which causes salt retention and increased blood volume. Olmesartan medoxomil is available in
more than 50 countries worldwide. Prasugrel, to be marketed as Effient in Mexico, is an antiplatelet agent
invented by Daiichi Sankyo and its Japanese research partner Ube Industries. Mexico, with an estimated
population of 107 mn people, is the second biggest market in Latin America and is the 11th largest
pharmaceutical market in the world, commanding a market size of US$$10.3 bn.
Lupin has announced that the US Food & Drug Administration (US FDA) has granted final approval for its Amlodipine/Benazepril
2.5mg/10mg, 5mg/10mg, 5mg/20mg and 10mg/20mg capsules. Commercial shipments of the product have already commenced.
Lupins Amlodipine/Benazepril capsules are the AB-rated generic equivalent of Novartis Lotrel capsules indicated for the treatment of
hypertension. Amlodipine/Benazepril had annual sales of approximately $1.1 bn for the twelve months ended September 2009,
based on IMS Health sales data.
Strides Arcolab has received ANDA approval for Labetalol Hydrochloride (HCI) injection, USP, 100 mg per 20 ml and 200 mg per
40 ml, multi-dose vials. This is expected to be launched shortly. Labetalol is the third product launched under the partnership
between Strides and Sagent Pharmaceuticals. Under this partnership, Strides and Sagent are jointly developing, supplying and
marketing more than 25 injectable products for the US market.
Elder Pharmaceuticals has announced that its new manufacturing facility at Charba village in Uttarakhand has commenced
commercial production in its Liquid Orals facility. The Company has submitted to BSE a copy of press release in respect of the same
dated February 10, 2010 titled "Elder commences new manufacturing facility in Dehradun.
Transgene Biotek has announced that a novel drug for liver cancer developed by its scientists has shown excellent efficacy in the
latest animal studies. This affirms the earlier data gathered from in-vitro studies. The Company claims that the technology involves
highly selective knock-down of specific liver cancer producing gene targets, which has demonstrated remarkable regression of the
tumours in the animal studies.
The Board of Directors of Poly Medicure has recommended Bonus Shares in proportion of one new equity share of Rs. 10 each for
every one existing equity shares of Rs. 10 each held by the shareholders as on record date.
The Board of Directors of Fortis Healthcare has approved the proposal to raise funds up to Rs. 12.5 bn from domestic/global
markets through suitable means to meet its funding requirements for addressing various growth opportunities.
Weekly Newsletter 6
Bridging the Information Gap in Corporate Landscape
STEEL, METALS & MINERALS
Apr-Jan steel consumption up 7.9% YoY
Steel consumption rose 7.9% YoY to 45.93 MT in Apr’09-Jan’10 period, as against 42.59 MT in Apr’08-Jan’09
period on the back of steady rise in demand from sectors including automobile, white goods and
construction. However, domestic steel production rose only 3.3% during the 10 months ended January 2010
and crossed the consumption pattern at 48.81 MT over 47.27 MTs in the comparable period last year,
according to provisional data of the Steel Ministry. Meanwhile, imports also surged 18.5% to 5.9 MT during
the period, thereby increasing the availability of the commodity in the market and putting pressure on
domestic prices. But, exports continued to slide and fell 34.1% to 2.39 MT during the reporting period,
reminiscent of the fact that the western market is still to recover from the economic crisis of 2008-09.
Leading steel producers like Tata Steel and Rashtriya Ispat Nigam reported 12.4% growth to 4.17 MT and
7.6% increase to 2.4 MT, respectively, during April-January over the same period previous fiscal. However,
the production of SAIL declined 6.1% to 7.83 MT against 8.34 MT in the April-January period previous fiscal.
However, RINL and Tata Steel saw their January production surging by 67.7% to 2.75 lakh tonne and 15.4%
to 4.65 lakh tonne, respectively over the corresponding period a year ago. Steel consumption has increased
by 8.7% YoY to 4.94 MT in Jan’10, while imports surged 34.2% to 7.26 lakh tonne against 5.41 lakh tonne
in Jan’09. Steel exports dipped by 15.2% to 2.96 lakh tonne in Jan’10, as against 3.49 lakh tonne shipped in
Surya Roshni to invest Rs. 200 bn to set up steel, power plants
Surya Roshni plans to invest Rs. 200 bn in the next few years for setting up steel manufacturing and power
plants, through an associate company. It is planning to set up a 1,000 MW power plant and a steel plant
with a capacity of 5 MTPA, both in Karnataka. The total investment in these two projects would be around
Rs. 200 bn, which the company will raise through a mix of debt and equity. Surya Roshni also announced
the launch of energy efficient T5 and T8 tubelights, which it claims can save up to 85% power. The Company
is also setting up two steel pipe manufacturing plants in Gujarat and Madhya Pradesh with a total
investment of around Rs. 5.5 bn. As the two new pipe plants would start production in the next fiscal, the
Company is aiming for a turnover of more than Rs. 50 bn by FY12.
SVC Resources has acquired a mine located at Dhamki in Jabalpur district of Madhya Pradesh measuring 2.07 acres through a
definitive agreement. The mine consists of laterite and has potentials of iron ore and manganese in it. The mineable reserve could be
assessed at a minimum of Rs. 10 crore. The Company has also acquired another mine at Dilari in Chhattarpur district of Madhya
Pradesh measuring 11.319 acres through a definitive agreement. The mine consists of white earth & ochre and has potentials of iron
ore & manganese in it. The mineable reserve could be assessed at a minimum Rs. 25 crore. The Company is confident of exploiting
the full reserves in the next 3 years.
ASSOCHAM has emphasized that ECB usage should be permitted for utilization against working capital and long term financing of
debts for infrastructure sector especially steel industry.
KIOCL is planning to restart its pig iron production at its blast furnace unit in Mangalore.
JSW Steel said that work on its West Bengal project will start in 6 months. It will invest Rs. 100 bn to Rs. 120 bn in Phase-I to set
up a 3 MT steel plant.
SAIL and Shipping Corporation of India will set up a joint venture (JV) very soon that would provide shipping-related services to the
former. It can be noted that the two companies had signed an MoU in 2008 to establish a JV that would render shipping-related
services to the steel maker in importing the coking coal required for its mills. The scope of the MoU also provided that the JV firm
could also participate in the international shipping trade.
Bharti Airtel highest revenue paying telco in Q3
Bharti Airtel has paid the highest revenue, both in terms of spectrum charges and licence fees, to the
government for the quarter ending Dec’09. As per the data compiled by TRAI, Bharti paid Rs. 570.17 crore
as licence fees and Rs. 301.49 crore as the spectrum charge for the third quarter ended Dec’09. Bharti had
added 2.85 mn new users in December. Going by TRAI's figures, Bharti's total outgo on licence fees and
spectrum charges together for the Q3 was more than double the amount paid by the two leading CDMA
players RCom and TTSL together. Bharti paid Rs. 871.66 crore to the government, while Rel Com and TTSL
together paid only Rs. 401.81 crore in Q3FY10.
Telenor Asia acquires 7.15% more stake in Unitech Wireless
Unitech has announced that Unitech Wireless has received an aggregate amount of Rs. 20.22 bn
(approximately) from Telenor Asia for acquisition of further 7.15% stake in Unitech Wireless by way of
issuance of fresh shares. Taking into account the existing investment of Rs. 41.13 bn (approximately) made
by Telenor, its total investment in Unitech Wireless amounts to Rs. 61.35 bn (approximately) and with this,
total shareholding of Telenor in the issued and paid-up equity share capital of Unitech Wireless shall increase
from 60.1% to 67.25%.
Idea Cellular has announced that the High Courts of Gujarat and Bombay have sanctioned the Scheme of Arrangement between
Idea Cellular and Aditya Birla Telecom contemplating demerger of demerged undertaking comprising of Unified Access Services
License (UASL) of Bihar (including Jharkhand) Service Area and certain assets and liabilities of Aditya Birla Telecom to the Company.
Weekly Newsletter 7
Bridging the Information Gap in Corporate Landscape
BANKING & FINANCIAL SERVICES
Bank of Maharashtra partners with Religare Securities, Munoth Capital & Enam Securities
Bank of Maharashtra has entered into a strategic tie-up with Religare Securities (the wholly owned
subsidiary of Religare Enterprises) to launch an online share trading facility - 'Maha-E-Trade'. With this,
Religare's internet trading services platform will become available to the bank's customers. The partnership
is a step forward to further strengthen the 'Bancinvest' channel created by Religare which already includes
tie-ups with Andhra Bank, Induslnd Bank, Tamilnad Mercantile Bank, Corporation Bank, Bank of Rajasthan,
Union Bank and Karur Vysya Bank. The internet trading facility will be part of the value-added offering for
the bank's savings account customers, offering them a savings and a DP account from the Bank along with
an internet trading account, powered by Religare. Separately, the Bank has also announced about its tie up
with Enam Securities Direct and Munoth Capital Markets for online trading services to be provided to the
customer of the Bank.
Bank of India signs MoU with Birla Sun Life MF
Bank of India has signed a Memorandum of Understanding (MoU) with Birla Sun Life
Mutual Fund for a strategic alliance to distribute and market Mutual Fund products
through branches of Bank of India. For Bank of India, it will be one more product to
offer to its clients and thus meet customers investment needs in a growing financial market. Birla Sun Life
Mutual Fund will be benefited by Bank branches, which are over 3,100, across the country and thus reach
across to pockets where they have no representatives. For varied investors need, the Bank’s branches will
be able to provide a bouquet of products, offered by different mutual fund companies, suited to cater
different segments of investors` community.
ASSOCHAM has emphasized that earlier policy of allowing Indian banks to guarantee ECBs should be restored to enable corporates to access cheaper
source of funds to effectively compete in the export markets.
ASSOCHAM has also suggested that commercial banks be allowed to raise long term bonds from NRIs
L&T Finance – the financial services arm of the engineering giant Larsen & Toubro – is planning to extend its micro-finance business to Gujarat and
PTC India Financial Services, promoted by PTC India, has raised Rs. 1 bn by issuance of Non-Convertible Debentures. The bond was issued at a
coupon rate of 9.35% annually with tenure of 2 years. The proceeds from it shall be used for the growth plan of PFS and is proposed to be listed on NSE.
The Board of Directors of Alka Securities has approved the proposal to invest in an NBFC company, reality and agro-based Company.
CARE has assigned “AAA” rating to the perpetual bonds issue of State Bank of India (SBI) up to an amount of Rs. 10 bn. The instruments with this
rating are considered to be of the best credit quality, offering highest safety for timely servicing of debt obligations. Such instruments carry minimal
Shiva Fertilizers Board approves raising stake in four firms
The Board of Directors of Shiva Fertilizers has approved the proposal to invest in Shiva Parvati Poultry Feed,
a profit making solvent extraction plant by acquiring 17,500 Equity Shares of Rs. 100 each at the rate of Rs.
130 per share aggregating to 5% of the total paid up capital of Shiva Parvati Poultry Feed for Rs. 22.75
lakh, taking its total stake to 42.05%. Its Board has also decided to invest in Ghatprabha Fertilizer, a profit
making Fertilizers manufacturing unit, by acquiring 72,500 Equity Shares of Rs. 100 each at the rate of Rs.
120 apiece aggregating to 29.59% of the total paid up capital of Ghatrapbha Fertilizer amounting to Rs. 87
lakh, taking its totalstake to 69.90%. Its Board has also decided to invest in Kirtiman Agro Genetics, a seed
processing unit, by acquiring 1,65,000 Equity Shares of Rs. 100 each at par aggregating to 41.25% of the
total paid up capital for Rs. 1.65 crore, taking its total stake to 78.75%. Its Board has also decided to invest
in Shrinivasa Agro Foods, a solvent extraction unit, by acquiring 203,500 Equity Shares of Rs. 100 each at
par aggregating to 40.70% of the total paid up capital for Rs. 2.03 crore, taking its total stake to 51%.
Jet Airways (India) has reported 30% YoY surge in international passenger traffic in Jan’10. Domestic passenger traffic in Jan’10 also registered a 26%
YoY increase. Its all-economy subsidiary, similarly posted a 12.8% YoY growth in passenger traffic on a seat factor of 75% in Jan’10.
Shri Ganesh Spinners has sold its land and building situated at GT Road Karnal Side Shimla Molana Road Panipat for a consideration of Rs. 1.05 crore.
The Board of Directors of JMDE Packaging & Realties has decided to subdivide the equity shares of the Company from Rs. 10 to Re. 1 each. Its Board
has approved the proposal to issue of further shares on rights basis to existing shareholders.
Mercator Lines has entered into an agreement to acquire a 1993-built MR Tanker of about 42,235 DWT, which is expected to join the fleet by end of
Rama Newsprint has announced that the workers at the Company's Mill who were on strike have ended the strike.
Greenply Industries has announced that its new laminate unit situated at Paterh Bhonku in Solan district of Himachal Pradesh has started commercial
production in third press with effect from February 08, 2010 out of a total of three presses proposed to be installed at the said unit.
The Board of Directors of Nuchem has decided to raise funds by entering into an agreement to sell for disposal of its property at Faridabad.
The Board of Directors of Kalpena Industries shall meet on February 16, 2010 to consider the matter relating to the merger of Alkom Specialty
Compounds, an unlisted Company, with the Company.
Decolight Ceramics has announced that the Company has secured an order worth Rs. 38 mn in ceramics division.
The Board of Directors of Balaji Amines has approved to venture into constructing, developing and to leasing out property for hotel business in Solapur.
GNFC has announced that there was an explosion on February 10, 2010 followed by fire in waste heat boiler of ammonia synthesis unit in ammonia
plant, resulting into disruption of ammonia production.
The Board of Directors of Empower Industries India shall meet on February 12, 2010 to consider issue of Bonus Shares to existing shareholders of the
Company, to fix the record date and ratio of Bonus.
The Board of Directors of Seshachal Technologies has decided to withdraw the proposal to acquire Enigma Digital Concepts.
The Board of Directors of Simmonds Marshall has decided to subdivide the equity shares of the Company from Rs. 10 each to Rs. 2each.
Kingfisher Airlines has received the approval for flying on seven new international routes. The new routes are New Delhi–London–New Delhi, New
Delhi–Hong Kong–New Delhi, New Delhi–Bangkok–New Delhi, New Delhi–Dubai–New Delhi, Mumbai–Colombo-Mumbai, Mumbai–Bangkok-Mumbai and
Weekly Newsletter 8
Bridging the Information Gap in Corporate Landscape
RATINGS, DELISTINGS & OPEN OFFERS
ICRA assigns “LBBB-” rating to bank lines of IBN 18 Broadcast
ICRA has assigned “LBBB-” rating to the Rs. 58.1 mn fund-based limits and Rs. 138.5 mn term loans of IBN
18 Broadcast (IBN18) ICRA has an “LBBB-” rating outstanding for Rs. 1 bn term loans and Rs. 160 mn fund-
based limits of IBN18. The outlook on the rating is stable. ICRA also has an “MA-” rating outstanding on the
company’s FD programme. The outlook on the FD rating is also stable. The assigned ratings take into
account the company’s presence across news, general entertainment, music and English entertainment
genres in television broadcasting as well as movie distribution. IBN18’s operating performance has been
weak over the last three years being the gestation period for the news channels launched by the company.
ICRA however derives comfort from the strong market position of its news channels and strong performance
of Colors (through its Viacom JV) in the highly competitive Hindi general entertainment segment. Viacom18
has turned profitable at operating as well as net level during Q3 FY10 on back of the popularity of Colors and
continued strong market position of MTV, Nickelodeon in their respective genres.
ICRA reaffirms ratings to bank facilities of Deepak Nitrite; assigns stable outlook
ICRA has reaffirmed the long term rating of “LA” assigned to the term loans and fund based facilities of
Deepak Nitrite (DNL) aggregating to Rs. 706.5 mn and Rs. 1262.0 mn respectively. ICRA has assigned a
stable outlook on the rating. ICRA has also reaffirmed the short term rating of “A1” assigned to the non-fund
based limits and CP programme of DNL aggregating to Rs. 850 mn and Rs. 200 mn respectively. The ratings
continue to reflect the long operating track record of the company in the chemical industry, diversified
product mix as well as exposure to diversified end-user industries, and the leading market share enjoyed by
the company in most of its products in the domestic as well as global markets. The ratings also favourably
consider the DNL’s multi-purpose manufacturing facility, with significant backward and forward integration
linkages, providing flexibility to change the product mix and cater to changing market requirements, and
DNL’s technical expertise to handle complex and hazardous chemical processes like nitration and
ICRA reaffirms ratings for bank lines, long-term and short-term debt programs of HAL
ICRA has reaffirmed “LAAA” rating for the Rs. 4.50 bn long-term debt programme and the Rs. 4.50 bn fund-
based limits of Hindustan Aeronautics (HAL). ICRA has also reaffirmed “A1+” rating assigned to the Rs. 4.5
bn short-term debt programme and Rs. 7.2 bn non-fund based limits of the Company. The ratings reflect
HAL’s strategic position as the major domestic agency for the manufacture and overhaul of defence aircrafts,
its currently strong order book position, and the low financial risk profile characterized by comfortable
profitability backed by an assured margin structure, low gearing and large liquid investments. The ratings
also take into account the continued high dependence of HAL on the Indian defence sector for orders due to
its limited, non-defence sales. The ratings continue to be supported by HAL’s complete ownership by GoI.
Rane (Madras) has announced that the equity shares of the Company have been delisted from the Madras Stock Exchange with
effect from January 21, 2010.
Inox Leisure (acquirer) along with Gujarat Fluorochemicals has made an Open Offer to the shareholders of Fame India to acquire
up to 8,231,759 equity shares of the latter representing in aggregate 20% of the fully diluted voting equity share capital, at a price
of Rs. 51 apiece payable in cash. The Offer shall open on April 01, 2010, while the date of closing of the Offer has been fixed at April
20, 2010. Enam Securities Pvt. Ltd. has been retained as the Manager to the Open Offer.
Samara Capital Partners Fund I Ltd (acquirer) has made an Open Offer to the public shareholders of Asian Oilfield Services to
acquire up to 30,64,889 fully paid-up equity share of Rs. 10 each – representing 20% of the post-issue voting capital – at a price of
Rs. 61.20 apiece, payable in cash. The Offer shall open on April 01, 2010, while the date of closing of the Offer has been fixed at
April 20, 2010. Meghraj Capital Advisors Pvt. Ltd. has been retained as the Manager to the Open Offer.
Maharashtra seamless has announced that CRISIL and ICRA have upgraded the Company's credit rating from “A” to “AA+” the
revised rating indicates high degree of safety with regard to timely payment of interest and principal of the debt program of the
company and stable outlook for the company.
ICRA has enhanced the rating of “A1+” of Balrampur Chini Mills for the Commercial Paper/Short Term Debt (STD) programme of
Rs. 5 bn (enhanced from Rs. 2 bn).
The Board of Directors of Goodyear India has approved the delisting proposal received from Goodyear Tire & Rubber Company
(GTRC) to initiate a voluntary delisting of the equity shares of the Company from BSE.
CRISIL has upgraded the rating assigned to Titan Industries’ long-term rating from “AA-Stable” to “AA Stable”, which indicates
high degree of safety of the long-term instruments.
ICRA has reaffirmed “LD” rating assigned to the Rs. 2,168.1 mn Partly Convertible Debenture programme of DCM. The rating re-
affirmation takes into account DCM’s continued delays in meeting its interest and principal obligations to banks, financial institutions
and other investors.
CARE has assigned “AAA” rating to the perpetual bonds issue of State Bank of India (SBI) up to an amount of Rs. 10 bn.
CARE has reaffirmed “BBB-” rating on the long-term bank facilities of Essar Oil (EOL) aggregating Rs. 12 bn. This rating is
applicable to facilities having tenure of more than one year. The facilities with this rating are considered to offer moderate safety for
timely servicing of debt obligations. CARE has also reaffirmed “PR3” rating to the short-term bank facilities of EOL aggregating Rs.
82.5 bn. This rating is applicable to facilities having tenure up to one year. The facilities with this rating would have moderate
capacity for timely repayment of short-term debt obligations at the time of rating and carry higher credit risk as compared to
facilities rated higher.
Weekly Newsletter 9
Bridging the Information Gap in Corporate Landscape
INSURANCE & MUTUAL FUNDS
Religare MF launches close-ended debt scheme
Religare Mutual Fund has launched a new fund named as Religare Fixed Maturity Plan - Series II - Plan A (13
Months), a close-ended debt scheme. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The
new issue is open for subscription from 5 February and closes on 10 February 2010. The investment
objective of the scheme is to generate income by investing in a portfolio of debt and money market
instruments normally maturing in line with the duration of the Scheme. The tenure of the plan is 13 months
from the date of allotment of units. The Scheme offers growth & dividend payout option. The scheme would
allocate up to 100% of assets in debt instruments including money market instruments with low risk profile.
Investment in securitised debt including pass through certificate (PTC) shall not exceed 50% of the net
assets of the scheme. The scheme will not invest in foreign securitised debt. Investment in foreign debt
securities (including units of overseas mutual fund investing in foreign debt securities/money market
instruments) shall not exceed 50% of the net assets of the Scheme. The minimum application amount is Rs.
5,000 and in multiples of Rs. 10 thereafter. Benchmark Index for the scheme will be CRISIL Short-Term
Bond Fund Index.
Income Advantage Fund… Edelweiss MF launches open-ended income scheme
Edelweiss Mutual Fund has launched a new fund named as Edelweiss Income Advantage Fund, an open-
ended income scheme. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue is
open for subscription from 10 February and will close on 17 February 2010. The scheme re-opens for
continuous sale and repurchase on 26 February 2010. The objective of the scheme is to generate returns
that are consistent with moderate levels of risk and liquidity through active management of a diversified
portfolio constituted of debt and money market instruments, securitised debt, Government securities, and
equity & equity related instruments. The scheme will have a Single Plan with Monthly Dividend and Growth
Option. Monthly Dividend option shall have Reinvestment, Payout & Sweep Facility. The scheme will allocate
80% to 100% of assets in debt & money market instruments with low to medium risk profile. It would
further invest up to 20% of assets in equity & equity related instruments with high risk profile. Entry load
charge will be nil. The exit load charge will be 1% if redeemed up to 30 days and nil for above 30 days. The
minimum application amount is Rs. 5,000 and in multiples of Re. 1 thereafter. The scheme’s performance
will be benchmarked against CRISIL MIP Blended Fund Index.
Sundaram BNP Paribas MF launches close-ended income scheme
Sundaram BNP Paribas Mutual Fund has launched a new fund named as Sundaram BNP Paribas FTP-Y, a
close-ended income scheme. The maturity period of the scheme is 18 months from the date of allotment of
units. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue is open for
subscription from 11 February and close on 23 February 2010. The objective of the scheme would be to
generate income with minimum volatility by investing in debt and money market securities, which mature on
or before the maturity of the scheme. The scheme offers dividend payout and growth option. The scheme
will allocate up-to 100% of assets in money market instruments, short-term, medium-term debt instruments
and securitised debt with low to medium risk profile. Investment in securitised debt can be up-to 100% of
the net assets. Entry load and exit load charge is not applicable for the scheme. The scheme is proposed to
be listed on NSE. The minimum application amount is Rs. 5000 and in multiples of Re 1 thereafter. The fund
seeks to collect a minimum subscription amount of Rs. 1 crore under the scheme during the NFO period. The
scheme’s performance will be benchmarked against CRISIL short-term bond index.
Birla Sun Life Mutual Fund has signed a Memorandum of Understanding (MoU) with Bank of India for a strategic alliance to
distribute and market Mutual Fund products through branches of Bank of India. For Bank of India, it will be one more product to
offer to its clients and thus meet customers investment needs in a growing financial market. Birla Sun Life Mutual Fund will be
benefited by Bank branches, which are over 3,100, across the country and thus reach across to pockets where they have no
representatives. For varied investors need, the Bank’s branches will be able to provide a bouquet of products, offered by different
mutual fund companies, suited to cater different segments of investors` community.
Sundaram BNP Paribas Mutual Fund has launched a new fund named as Sundaram BNP Paribas FTP - S, a close-ended income
scheme. The maturity period of the scheme is 367 days from the date of allotment of units. The New Fund Offer (NFO) price for the
scheme is Rs. 10 per unit. The new issue is open for subscription from 9 February and close on 15 February 2010. The objective of
the scheme would be to generate income with minimum volatility by investing in debt and money market securities, which mature
on or before the maturity of the scheme. Entry load and exit load charge is not applicable for the scheme. The scheme is proposed to
be listed on NSE. The minimum application amount is Rs. 5,000 and in multiples of Re. 1 thereafter per application.
L&T has received the preliminary (R1) approval of Insurance Regulatory and Development Authority (IRDA) to start the general
insurance joint venture.
IDFC Mutual Fund has announced the introduction of new plans, ‘Plan C’ under IDFC Super Saver Income Fund - Medium Term
(MT) and ‘Plan D’ under IDFC Super Saver Income Fund - Investment Plan (IP). The plans are to be introduced with effect from 10
February 2010. Plan C & Plan D under the respective schemes offers growth, dividend & dividend sweep options. The plans
introduction price is Rs. 10 per unit and at applicable NAV thereafter. Minimum application amount is Rs. 5,000 & in multiples of Re.
1 thereafter. Entry load charge will be nil.
Weekly Newsletter 10
Bridging the Information Gap in Corporate Landscape
Micron Technology agrees to buy Numonyx for US$1.27 bn
Boise, Idaho-based memory chipmaker, Micron Technology has agreed to acquire
privately held rival Numonyx Holdings BV in an all-stock transaction valuing Numonyx at
about US$1.27 bn. The combination will broaden the memory chips product portfolio of
Micron and expand its manufacturing and development scale as well as increase its customer reach. The
board of directors and supervisory board of Micron have approved the deal, while the deal is not subject to
Micron stockholder approval. The transaction, which is subject to regulatory review and other customary
closing conditions, is currently expected to close within three to six months. Numonyx is an independent
semiconductor company providing mainly flash memory solutions and was formed in Mar’08 as a flash
memory JV between Geneva-based STMicroelectronics with a 48.6% stake, Intel Corporation and
independent global equity firm Francisco Partners. Numonyx is the premier non-volatile memory innovator
and was the flash memory business of STMicroelectronics before evolving into the JV. The proposed deal is
expected to help Micron replace Hynix Semiconductor as the second biggest player in the memory chip
market and position itself closely behind market leader Samsung. The deal is expected to help strengthen
Micron's position as one of the world's leading memory companies, with a broad portfolio of DRAM, NAND
and NOR memory products as well as strong expertise in developing and supporting memory system
solutions. Micron would also gain access to Numonyx's customer base, and increased manufacturing scale
globally. Additionally, Micron would be able to increase its multi-chip offerings in the embedded and mobile
markets. Under the terms of the deal, Micron will issue 140 mn Micron common shares to Intel,
STMicroelectronics, and Francisco Partners. Micron will also issue up to 10 mn additional Micron common
shares to Numonyx shareholders, if the volume weighted average price of Micron's common stock for the 20
trading days, ending two days prior to closing of the deal, is between $7 and $9 per share. In exchange for
its stake in Numonyx, STMicroelectronics will receive about 66.6 mn shares of Micron, based on its current
trading price of $9.08 per share. Additionally, the Catania, Italy-based M6 industrial facility will be transfered
Ruchi Soya to merge Palm Tech with itself
The Board of Directors of Ruchi Soya Industries has approved the Scheme of Amalgamation of Palmtech
India (Palm Tech) with Ruchi Soya Industries (Ruchi Soya). PTIL is engaged in the business of development
of Oil palm plantation and processing of oil palm fruits. As per the scheme all assets and liabilities of PTIL
would be transferred to Ruchi Soya Industries. As consideration for merger 19 equity shares of Rs. 2 each of
Ruchi Soya Industries would be issued for 25 equity shares of Rs. 2 each held by shareholders of Palm Tech.
The promoters' holding on fully diluted basis will decrease from 53.64% to 50.3%. The scheme has also
been approved by the Board of Directors of Palm Tech.
Chettinad Cement to merge Allied Minerals with itself
The Board of Directors of Chettinad Cement Corporation has approved the proposal for amalgamation of
Allied Minerals & Metals with the Company, subject to necessary approval. The appointed date of
amalgamation is January 01, 2010. Its Board has also approved the share exchange ratio wherein, on
completion of the amalgamation. The shareholders of Allied Minerals & Metals would receive one fully paid
equity share of Rs. 10 each of Chettinad Cement Corporation for every forty six fully paid equity shares of
Rs. 10 each of Allied Minerals & Metals.
Prime Property Development Corporation has announced that Sea-King Club has become wholly owned subsidiary of the
Lesha Energy Resources has announced that the Gujarat High Court has approved the scheme of arrangement between the
Company and Lesha Industries (earlier known as Technocorp Infosystems) for the demerger of the steel division of the Company
into Lesha Industries.
The Board of Directors of MVL has approved the Scheme of Amalgamation of Balaji Tirupati Buildcon and Global Digital Technologies
with the Company.
Parle Software has acquired 45.83% stake in the capital of Hazoor Township Developers, which is a subsidiary of Hazoor Multi
Hazoor Multi Projects has divested its holding in Hazoor Township Developers by 45.83% to Pane Software. With this, Hazoor
Township Developers has become Associate of Parle Software with effect from February 09, 2010; while it will continue to be the
subsidiary and 54.17% of its capital will be held by the Company.
Unitech has announced that Unitech Wireless has received an aggregate amount of Rs. 20.22 bn (approximately) from Telenor Asia
for acquisition of further 7.15% stake in Unitech Wireless by way of issuance of fresh shares. Taking into account the existing
investment of Rs. 41.13 bn (approximately) made by Telenor, its total investment in Unitech Wireless amounts to Rs. 61.35 bn
(approximately) and with this, total shareholding of Telenor in the issued and paid-up equity share capital of Unitech Wireless shall
increase from 60.1% to 67.25%.
The Board of Directors of Colgate Palmolive (India) has approved a scheme of amalgamation, which provides for the merger of
its wholly owned subsidiary i.e. Professional Oral Care Products with itself.
Kriti Industries India has announced that Kriti Auto & Engineering Plastics has become wholly owned subsidiary of the Company
with effect from January 27, 2010.
Weekly Newsletter 11
Bridging the Information Gap in Corporate Landscape
NASI to organize first ever Indian Seed Congress in India
The National Seed Association of India (NASI) is organizing the first ever Indian Seed Congress in India. The
two day event will be held at Bangaluru from 12th to 13th of February 2010 at Hotel Lalit Ashok, Bangaluru.
The theme of the Congress is "Seeds for Global Food Security" and it will be focused closely on the issues
that threaten the food security in India and the rest of the world. Indian Seed Congress 2010 will be
inaugurated by Dr. BS Yediyurappa, Chief Minister of Karnataka on 12th February 2010. The two-day event
will have technical sessions on issues concerning the seed industry and would like to evolve answers to the
issues raised and project them in a forceful manner to the policy makers and decision makers, across the
globe. Sufficient space has been allocated for the exhibition of products embodying new technologies and
superior genetics and a favourable ambience for carrying out trade negotiations in seeds.
IACC to organize 6th Indo-US Economic Summit in New Delhi on Feb 16-17
Indo-American Chamber of Commerce (IACC) is organizing the 6th Indo-US Economic Summit in New Delhi
on February 16-17, 2010 to discuss the current economic engagement between the two countries and to
strengthen the relationship. The focus attention would be on the services sector, particularly export of
services from India. A panel discussion would also take place on the synergies among India, China, and the
US partnership for global development. Around 300 delegates are expected to attend the event. The Union
HRD Minister Kapil Sibal, Union Minister of New and Renewable Energy Farooq Abdullah, Deputy Chief of
Mission of the US Embassy Steven J White and the National Aviation Company of India (NACIL) chairman
Arvind Jadhav are among the dignitaries who are expected to attend the meet.
CII to organize 5th Brand Summit 2010 in Bangalore
The Confederation of Indian Industry (CII) is organizing Brand Summit 2010, the fifth
edition of the successful series from 19th-20th February 2010 at Hotel Taj West End,
Bangalore. The theme of this year's Summit is “Marketing Disruption: In the era of
discontinuity, how to build Brands.” The theme was chosen because marketing disruption
is taking place at three interconnected levels - emergence of new media, creation of new
customers and advancement of technology. The Summit is supported by Advertising Agencies Association of
India (AAAI); Indian Broadcasters Foundation (IBF); Indian Newspaper Society (INS); Indian Society of
Advertisers (ISA) and International Advertising Association - India Chapter (IAA). The Summit would focus
on the key areas like: Disruption by the New Age Customer; Disruption by Rise of New Media; Disruption by
Technological Advances; Co-Creation of Products, Commercial Content & Enhanced Consumer Experience;
Engaging with Consumer through Celebrities, and Enhancing Shareholders Value.
TERI, IGNOU to organize 3rd International Conference on Digital Libraries
TERI in partnership with IGNOU is organizing the Third International Conference on Digital Libraries (ICDL)
from 23 to 26 February 2010, the theme of which is "Shaping the Information Paradigm". Apart from theme
related special sessions and tutorials there will be a special focus on web-based methodologies in teaching
and learning, multimedia content, Digital Libraries (DL) standards, Knowledge Management, Copyright and
Digital Rights Management (DRM) etc. The conference will be inaugurated by HRD Minister Kapil Sibal at
India Habitat Center, New Delhi. The Embassies of Austria and the Netherlands and renowned organizations
such as Goethe Institute, Defence Research and Development Organization (DRDO), Indian National Science
Academy (INSA), Council of Scientific and Industrial Research (CSIR) and the Commonwealth Educational
Media Centre for Asia (CEMCA), are lending support to the conference which would see around 46 luminaries
from the field of digital library sciences participating to share their views on the conference theme related
ASSOCHAM to organize National Conference on Capital Markets on Feb 11 in New Delhi
The Associated Chambers of Commerce & Industry of India (ASSOCHAM) is organizing a “National
Conference on Capital Markets: Growth with Governance” on 11th February, 2010 at Hotel Shangri-La in New
Delhi. The Union Minister of Corporate Affairs Salman Khurshid has consented to grace the occasion as Chief
Guest, while Dr. Subir Gokaran, Deputy Governor of the Reserve Bank of India would join the event as
Guest of Honor. The keynote address shall be tendered by Naina Kidwai, the Country Head of HSBC Bank.
The conference brings together industry experts to lay a roadmap for enhancing capital raising avenues to
meet the huge demand of capital across all sectors. It also seeks to draw further on developing existing
capital raising mechanisms and search for innovative financial models to facilitate India Inc. in garnering a
major share of the world’s growth capital. The full day conference assures to bring together some of the best
minds and thoughts in the Indian Capital market across brokerages, investment banks, asset management
companies, insurance companies, FIIs, stock exchanges, regulators, policy makers, HNI, SMEs waiting to
raise capital and management schools.
The ASSOCHAM jointly with the Department of Consumer Affairs and Forward Market Commission (FMC) is organizing a national
conference on ‘Futures of Futures Market’ on February 12, 2010, at Hotel Le-Meridien, NewDelhi. The Chief Guest will also be
launching the Federation of Commodity Exchanges in India at this occasion.
Weekly Newsletter 12
Bridging the Information Gap in Corporate Landscape
Bernanke outlines strategy for unwinding Fed's accommodative policy
Written testimony from Federal Reserve Chairman Ben Bernanke has outlined a definite strategy
for unwinding the Fed's accommodative policy but no timetable was provided on when it would
do so, instead saying that the central bank would be ready when the time comes. “Although at
present the US economy continues to require the support of highly accommodative monetary
policies, at some point the Federal Reserve will need to tighten financial conditions by raising
short-term interest rates and reducing the quantity of bank reserves outstanding,” Bernanke said in
prepared remarks. Though no timetable was given, Bernanke did outline specific strategies that the Fed
could implement to unwind policy. The central bank chief said that the Fed may move to a new benchmark
target rate other than the federal funds rate. Bernanke said that the Fed may raise interest rates on
reserves first, in order to put pressure on short term rates, and added that the Fed is also considering
raising the discount rate in the near future. Bernanke has also outlined other additional tools the central
bank would use to reduce the reserves held by the banking system. The Fed chief also said that the Fed
would conduct tests in the spring on using term deposits to drain reserves.
BoE lowers UK GDP outlook
The Bank of England (BoE) has lowered UK's economic outlook and forecast inflation to undershoot its 2%
target. The central bank Governor Mervyn King also kept the door open for further quantitative easing. In its
February Inflation Report, the BoE said the British economic growth is set to reach around 3.2% in the
second quarter of next year, smaller than the previous estimate of 4%. The strength of the recovery is
highly uncertain and output is unlikely to return to a level consistent with its pre-crisis trend for a
considerable period, the bank said. The BoE sees the outlook for inflation as somewhat higher in the near
term than in the November Report. According to the BoE, inflation will peak at around 3.3% before slowing
to 0.9%. The prospects for inflation remain unusually uncertain, the bank said, and there are significant
risks to the inflation outlook in each direction.
German trade surplus falls in 2009
The German foreign trade balance showed a surplus of €136.1 bn in 2009, smaller than the €178.3 bn in
2008, according to Federal Statistical Office. According to provisional results of the Deutsche Bundesbank,
the current account surplus stood at €119.4 bn in 2009, down from €165.2 bn. Exports in 2009 dropped
18.4% from the previous year to €803.2 bn and imports slipped 17.2% to €667.1 bn. In Dec’09, exports
increased 3% MoM after rising 1.1% in Nov’09. At the same time, imports rose 4.5% MoM in Dec’09, as
against 6.2% decline in Nov’09. The trade surplus in Dec’09 fell to €13.5 bn from €17.2 bn in Nov’09. At the
same time, the current account surplus increased to €20.6 bn in Dec’09 €17.8 bn in Nov’09. The surplus
stood above the consensus forecast of €19.1 bn.
Japan saw a current account surplus of JP¥900.8 bn in Dec’09, registering a rise of 452.8% on YoY basis. The trade balance showed
a surplus of JP¥631.2 bn in Dec’09 following JP¥490.6 bn surplus in Nov’09. Seasonally adjusted, the current account surplus stood
at JP¥1.1 trillion in Dec’09, following JP¥1.3 trillion surplus in Nov09. The M2 money stock plus CDs rose 2.9% YoY to JP¥766.5
trillion in Jan’10. The M3 money stock climbed 2.1% YoY to JP¥1,066 trillion in Jan’10, following 2.2% YoY gain in Dec’09. The
seasonally adjusted at an annualized rate, M2 was up 2.8%, while M3 added 1.9%.
German industrial production declined 2.6% MoM in Dec’09, reversing an increase of 0.7% in Nov’09. On YoY basis, the production
slipped 7.1% in Dec’09, as against 8% decline in Nov’09. Production of intermediate goods was down 4.3% and capital goods
production slipped 3.4% on a monthly basis. Meanwhile, consumer goods output rose 1.5%.
Japan's machine tool orders surged 192% YoY in Jan’10 after an increase of 63.4% in Dec’09. The sharp increase in total orders was
led by external demand, which soared 297% YoY in Jan’10. Meanwhile, domestic orders climbed 78.9%.
In the US, the non-farm payroll employment fell by 20,000 jobs in Jan’10 following a revised decrease of 150,000 jobs in Dec’09.
However, the Labor Department also said that the unemployment rate unexpectedly fell to 9.7% in Jan’10 from 10% in Dec’09. With
the unexpected decrease, the unemployment rate fell to its lowest level since a matching rate in Aug’09, although it still remains at
a historically high level.
The US trade deficit widened to $40.2 bn in Dec’09 from $36.4 bn in Nov’09. The value of imports increased a faster pace than the
value of exports, which rose by 3.3% to $142.7 bn in Dec’09 from $138.1 bn in Nov’09. The politically-sensitive trade deficit with
China narrowed to $18.1 bn in Dec’09 from $20.2 bn in Nov’09.
The UK economy grew 0.4% during three months to January, faster than the 0.1% growth seen in the three months ended
December, the latest monthly estimates released by the National Institute of Economic and Social Research showed. The institute
noted that output levels are similar to those in the early summer of last year. Further, the think-tank said the output is unlikely to
pass its peak at the start of 2008 until the fourth quarter of 2012.
The industrial production in France declined 0.1% MoM in Dec’09, reversing a revised 0.6% rise in Nov’09. The manufacturing
production fell 0.8% MoM in Dec’09 after a downwardly revised increase of 0.8% in Nov’09.
The Bank of Korea (BoK) has voted to keep interest rates on hold for the 12th consecutive month, maintaining the record low of 2%.
Canadian housing starts rose roughly in line with estimates in Jan’10, suggesting further stabilization of the nation's housing market.
The seasonally adjusted annual rate of housing starts reached 186,300 units in Jan’10. This is an increase from an annual rate of
176,100 units in Dec’09. The actual housing starts for 2009 totaled 149,081 units, with activity improving as the year progressed.
The seasonally adjusted annual rate of urban starts increased by 4.4% to 165,200 units in Jan’10. Urban multiple starts increased by
5.7% to 76,300 units while single urban starts increased by 3.3% to 88,900 units.
Weekly Newsletter 13
Bridging the Information Gap in Corporate Landscape
BHP Billiton profit grows more than double to US$6.14 bn in H1
Melbourne, Australia-based world's largest mining company, BHP Billiton Group has posted
US$6.14 bn profit in the first half, as against US$2.62 bn profit in the year-ago period, boosted by
strong sales volume growth and cost control. The Company has noted that strong sales volume
growth on the back of demand recovery, particularly in steel-making raw materials and cost
control across the business helped partially offset lower prices and stronger producers' currencies.
Its revenues declined by 17.5% YoY to US$24.58 bn in the first half from US$29.78 bn in the same period
last year. For the first half, iron ore revenues declined 25.6% to US$4.48 bn, petroleum revenues declined
0.8% to US$4.18 bn, energy coal revenues dropped 50.9% to US$2.14 bn, metallurgical coal revenues
dipped 44.7% to US$2.72 bn and manganese revenues fell 53.7% to US$888 mn. Aluminum revenues were
down 20.4% to US$2.00 bn. Meanwhile, base metal revenues surged up 66.55% from last year to US$5.47
bn, stainless steel material revenues rose 50.3% to US$1.66 bn and revenues from diamonds and specialty
products climbed 23.9% to US$566 mn. Looking ahead, despite the positive momentum, the Company
remains cautious about the speed and strength of the global economic recovery across the developed world.
However, in the long term, BHP Billiton said it continues to expect emerging economies' growth to strongly
outperform the developed economies as they follow a path of continued urbanization and industrialization.
UBS back in black; posts CHF 1.37 bn net profit in Q4
Zurich, Switzerland-based banking giant, UBS AG has posted CHF 1.37 bn net profit in Q4CY09,
as against CHF 9.44 bn net loss in Q4CY08, benefiting from higher net interest income and lower
costs. The Company noted that its performance in the fourth quarter improved from the third
quarter due to lower costs, lower own credit charges and a tax credit. Its net interest income grew to CHF
1.75 bn in Q4CY09, as against CHF 1.65 bn in Q4CY08, while its net fee and commission income decreased
to CHF 4.44 bn in Q4CY09, as against CHF 4.78 bn in Q4CY08. Its total operating income stood at CHF 6.09
bn in Q4CY09, as against CHF 4.7 bn total operating loss in Q4CY08. The Company has posted CHF 2.12 bn
net loss in CY09, as against CHF 20.72 bn net loss in CY08. Its net interest income grew to CHF 6.45 bn in
CY09, as against CHF 5.99 bn in CY08.
Coca-Cola net income soars to $1.54 bn in Q4 on higher sales
Atlanta, Georgia-based beverages giant, Coca-Cola has posted $1.54 bn net income in
Q4CY09, as against $995 mn net income in Q4CY08, helped by positive concentrate pricing
as well as geographic country mix. Its net operating revenues grew 5% YoY to $7.51 bn in
Q4CY09, as against $7.13 bn in Q4CY08. Its net operating revenues from Eurasia & Africa increased 7% YoY
to $542 mn in Q4CY09, as against $507 mn in Q4CY08. Europe generated revenues of $1.19 bn, in Q4CY09,
as against $1.17 bn in Q4CY08. Its revenues from Latin America grew 19% YoY to $1.12 bn in Q4CY09, as
against $941 mn in Q4CY08. North America posted $1.89 bn net operating revenues in Q4CY09, as against
$1.97 bn net operating revenues in Q4CY08. Its revenues from Pacific increased 5% YoY to $1.14 bn in
Q4CY09, as against $1.09 bn in Q4CY08. Bottling Investments revenues grew 12% YoY to $2.04 bn in
Q4CY09, as against $1.83 bn in Q4CY08. Its operating income stood at $1.78 bn in Q4CY09, as against
$1.71 bn in Q4CY08, while its non-GAAP operating income stood at $1.88 bn in Q4CY09, as against $1.81
bn in Q4CY08. The Company has posted $6.82 bn net income in CY09, as against $5.81 mn net income in
CY08. Its net operating revenues decreased to $30.99 bn in CY09, as against $31.94 bn in CY08.
Walt Disney posts $844 mn net income in Q1
Burbank, California-based diversified media and entertainment company, Walt Disney has
posted $844 mn net income in the first quarter as against $845 mn net income in the year-ago
quarter. Its Q1 revenue increased 1% YoY to $9.74 bn from $9.6 bn in the same quarter last
year. Its Q1 revenue from media network segment increased 7% YoY to $4.18 bn, while the segment's
operating income rose 11% YoY to $724 bn. Its Q1 operating income at cable networks increased $27 mn to
$544 mn. The Q1 operating income at Broadcasting increased $42 mn to $180 mn. The Q1 revenue from
parks and resorts stood flat at $2.7 bn but segment operating income decreased 2% to $375 mn. The Q1
revenue from studio entertainment division remained essentially flat essentially flat with year-ago quarter at
$1.9 bn. Its consumer products revenues for the quarter fell 3% to $746 mn and the division's operating
income declined 8% to $243 mn. Interactive Media revenues for the quarter dropped 29% to $221 mn and
the division's operating loss narrowed to $10 mn from $45 mn a year earlier.
Deutsche Bank has posted €1.3 bn net income in Q4CY09, as against €4.8 bn net loss in Q4CY08, helped by higher revenues and a
tax benefit. Its revenues stood at €5.5 bn in Q4CY09, as against €853 mn negative revenues in Q4CY08.
Sprint Nextel has posted $980 mn net loss in Q4CY09, as against $1.62 bn net loss in Q4CY08. Its net operating revenues declined
to $7.86 bn in Q4CY09, as against $8.43 bn in Q4CY08. It has posted $2.43 bn net loss in CY09, as against $2.796 bn net loss in
CY08. Its net operating revenues declined to $32.26 bn in CY09, as against $35.64 mn in CY08.
Dallas, Texas-based, AT&T has posted $3.019 bn net income in Q4CY09, as against $2.4 bn net income in Q4CY08. Its total
operating revenues slipped to $30.85 bn in Q4CY09, as against $31.07 bn in Q4CY08.
Weekly Newsletter 14
Bridging the Information Gap in Corporate Landscape
S&P trims outlook on BofA, Citigroup; affirms ratings
Standard & Poor's (S&P) has lowered its ratings outlooks for both Citi and Bank of
America Corporation to negative from stable, citing uncertainty about the US
government's willingness to bail out bond holders in the event of another bailout of the
banks. At the same time, the ratings agency affirmed the counterparty credit and debt
ratings of the banks and raised the ratings on Citi's hybrid capital issues, excluding preferred stock, to BB-
from B+. Standard & Poor's credit analyst said that the outlook revision reflects our increased uncertainty
about the US government's willingness to provide additional extraordinary support to highly systemically
important financial institutions in a way that benefits debt holders. S&P has cited the House bill HR 4173
passed in mid-December as an effort to specifically preclude the government from making company-specific
bailouts. In addition to the House bill, S&P has also referred to the proposed Financial Crisis Responsibility
Fee and said it underscores the extent to which the political climate may affect bond holders of these
companies adversely. S&P said that the upgrade of Citi's hybrid capital issues reflects the improvement in
Citi's stand-alone credit profile. While Standard & Poor's outlook for both Citi and Bank of America is
negative, its ratings for the companies is currently enhanced by three notches to reflect the potential for
additional extraordinary government support, should this be necessary. The agency said the counter-party
credit rating and stand-alone creditworthiness may converge at the current stand-alone profile level if it
became necessary to remove enhancement for government support as a rating factor.
NYSE Euronext turns to profit in Q4
Diverse exchange group, NYSE Euronext has posted $172 mn net income in Q4CY09, as
against $1.34 bn net loss in Q4CY08. Its non-GAAP net income has increased to $151 mn
in Q4CY09, as against $137 mn in Q4CY08. Its total revenues declined to $1.13 bn in Q4CY09, as against
$1.22 bn in Q4CY08. Its gross non-GAAP revenues stood at $1.01 bn in Q4CY09, as against $1.18 bn in
Q4CY08. Its net revenues decreased 6% YoY to $640 mn in Q4CY09, as against $683 mn in Q4CY08. Its
revenues from US operations decreased to $663 mn in Q4CY09, as against $794 mn in Q4CY08, while the
European operations generated $375 mn revenues in Q4CY09, as against $410 mn in Q4CY08. Its operating
income stood at $166 mn in Q4CY09, as against $1.47 bn operating loss in Q4CY08. The Company has
posted $219 mn net income in CY09, as against $738 mn net loss in CY08. Its non-GAAP net income
decreased to $533 mn in CY09, as against $763 mn in CY08. Its revenues decreased to $4.69 bn in CY09, as
against $4.7 bn in CY08. Its net revenues stood at $2.48 bn in CY09, as against $2.88 bn in CY08.
IMS Health net income declines to $71.5 mn in Q4
Healthcare market data provider, IMS Health has posted $71.5 mn net income in Q4CY09, as against $98.5
mn net income in Q4CY08, hurt by impairment charges as well as higher expenses. Excluding items, its non-
GAAP net income grew to $95.1 mn in Q4CY09, as against $90.6 mn in Q4CY08. Its operating income
slipped to $106.3 mn in Q4CY09, as against $126.6 mn in Q4CY08. On a non-GAAP basis, operating income
declined to $134 mn in Q4CY09, as against $136 mn in Q4CY08. Its revenue increased 3% YoY to $599.2
mn in Q4CY09, as against $580.9 mn in Q4CY08. Segment-wise, Information and Analytics revenue rose 5%
YoY to $452.9 mn in Q4CY09, while Consulting and Services revenue dropped 2% YoY to $146.3 mn in
Q4CY09. The Company has posted $258.5 mn net income in CY09, as against $311.3 mn net income in
CY08. On a non-GAAP basis, its net income stood at $315.6 mn in CY09, as against $311.7 mn in CY09, as
against. Its revenues declined 6% YoY to $2.19 bn in CY09, as against $2.33 bn in CY08.
Cognizant Technology posts $144 mn net income in Q4
Teaneck, New Jersey-based information technology services provider, Cognizant Technology
Solutions Corporation has posted $144 mn net income in Q4CY09, as against $112.29 mn net
income in Q4CY08, helped by a 20% increase in revenues. Its revenues increased to $902.72 mn in
Q4CY09, as against $753.04 mn in Q4CY08. Its income from operations increased to $166.91 mn in
Q4CY09, as against $142.67 mn in Q4CY08. It has posted $534.96 mn net income in CY09, as against
$430.85 mn net income in CY08. Its revenues increased to $3.27 bn in CY09, as against $2.81 bn in CY08.
Looking ahead, the Company expects at least $935 mn revenue the first quarter. For fiscal 2010, revenue is
expected to be at least $3.93 bn, up at least 20% from 2009.
Natick, Massachusetts-based medical device maker, Boston Scientific Corporation has posted $1.07 bn net loss in Q4CY09, as against
$2.39 bn net loss in Q4CY08. Its revenues increased to $2.079 bn in Q4CY09, as against $2 bn in Q4CY08. It has posted $1.02 bn net loss in
CY09, as against $2.036 bn net loss in CY08.
Newark, New Jersey-based life insurer Prudential Financial has posted $1.79 bn net income in Q4CY09, as against $1.66 bn net loss in
Q4CY08. Its total revenue rose to $6.79 bn in Q4CY09, as against $5.88 bn in Q4CY08. It has posted $3.41 bn net income in CY09, as against
of $1.14 bn net loss in CY08. its total revenue increased to $27.74 bn in CY09, as against $25.99 bn in CY08.
New Brunswick, New Jersey-based Johnson & Johnson has reported a decline in profit for Q4CY09 to $2.206 bn from last year due to a
hefty restructuring charge, while its sales fell 9% to $16.55 bn.
Abbott Laboratories has reported a marginal increase in fourth profit from last year, as one-time charges offset a 4.2% increase in revenue.
Weekly Newsletter 15
Bridging the Information Gap in Corporate Landscape
ArcelorMittal erases loss; posts US$1.07 bn net income in Q4
World’s biggest steel maker ArcelorMittal has posted US$1.07 bn net income in Q4CY09, as
against US$2.63 bn net loss in Q4CY08. Its sales declined to US$18.64 bn income in
Q4CY09, as against US$22.09 bn income in Q4CY08. Its total steel shipments rose to 20
mn metric tonne income in Q4CY09, as against 17.1 mn metric tonne income in Q4CY08. Flat Carbon
Americas generated sales of US$4.07 bn, down from US$4.54 bn a year ago. Crude steel production reached
5.4 MT in Q4CY09, as against 3.47 mn in Q4CY08, while its steel shipments stood at 4.83 MT in Q4CY09, as
against 3.93 MT in Q4CY08. Flat Carbon Europe reported quarterly sales of US$5.93 bn in Q4CY09, as
against US$7.03 bn in Q4CY08. Crude steel production reached 7.41 MT in Q4CY09, as against 5.15 MT in
Q4CY08, while its steel shipments grew to 6.41 MT in Q4CY09, as against 6.02 MT in Q4CY08. Long Carbon
Americas and Europe recorded sales of US$4.58 bn in Q4CY09, as against US$5.18 bn sales in Q4CY08.
Crude steel production increased to 5.36 MT in Q4CY09, as against 3.74 MT in Q4CY08, while its steel
shipments reached 5.23 MT in Q4CY09, as against 4.55 MT in Q4CY08. Asia Africa and CIS (AACIS) region
has reported sales of US$2.27 bn in Q4CY09, as against US$2.07 bn in Q4CY08. Crude steel production rose
to 3.9 MT in Q4CY09, as against 2.13 MT in Q4CY08, while steel shipments reached 3.08 MT in Q4CY09, as
against 2.19 MT in Q4CY08. Its stainless steel sales declined to US$1.25 bn in Q4CY09, as against US$1.32
bn in Q4CY08. Its Steel Solutions and Services generated sales of US$3.49 bn in Q4CY09, as against
US$4.31 bn in Q4CY08. ArcelorMittal has posted US$118 mn net income in CY09, as against US$9.4 bn net
income in CY08. However, its sales totaled US$65.11 bn in CY09, as against US$124.94 bn in CY08.
Principal Financial Group back in black; posts $141.9 mn profit in Q4
Des Moines, Iowa-based retirement and investment products provider, Principal Financial
Group has posted $141.9 mn net income in Q4CY09, as against $7.5 mn net loss in Q4CY08.
The Company has reported operating earnings of $200.9 mn in Q4CY09, as against $179 mn
in Q4CY08. Its total revenues decreased to $2.23 bn in Q4CY09, as against $2.28 bn in
Q4CY08. Its US Asset Accumulation Segment recorded $125.3 mn operating earnings in Q4CY09, as against
$102.8 mn operating earnings in Q4CY08. The segment’s operating revenues declined to $1.02 bn in
Q4CY09, as against $1.1 bn in Q4CY08. Its Global Asset Management Segment generated $12.7 mn
operating earnings in Q4CY09, as against $27 mn operating earnings in Q4CY08. The segment’s operating
revenues dipped to $120.4 mn in Q4CY09, as against $173.5 mn in Q4CY08. International Asset
Management and Accumulation Segment had operating earnings of $39.5 mn in Q4CY09, as against $18.4
mn in Q4CY08. The segment’s operating revenues increased to $180.3 mn in Q4CY09, as against $148.6 mn
in Q4CY08. The Life and Health Insurance Segment's operating earnings slipped to $44.6 mn in Q4CY09, as
against $50.6 mn in Q4CY08. The segment’s operating revenues declined to $1.1 bn in Q4CY09, as against
$1.15 bn in Q4CY08. The Company's assets under management recorded at $284.7 bn at December 31,
2009, compared to $247.0 bn at December 31, 2008. The Company has posted $589.7 mn net income in
CY09, as against $425.1 mn net income in CY08. Its operating earnings slid to $804.1 mn in CY09, as
against $942.7 mn in CY08. Its total revenues stood at $8.85 bn in CY09, as against $9.94 bn in CY08.
EOG Resources net income declines to $400.43 mn in Q4
Houston, Texas-based oil and natural gas producer, EOG Resources has posted $400.43 mn net
income in Q4CY09, as against $461.47 mn net income in Q4CY08. On an adjusted basis, its non-
GAAP net income rose to $234.33 mn in Q4CY09, as against $185.96 mn in Q4CY08. Its net
operating revenues grew 8.6% to $1.77 bn in Q4CY09, as against $1.63 bn in Q4CY08. Its operating
income declined to $654.11 mn in Q4CY09, as against $751.18 mn in Q4CY08. Its total production increased
0.9% to 194.9 bn cubic feet equivalent in Q4CY09, as against 193.1 bn cubic feet equivalent in Q4CY08.
However, natural gas volumes for the quarter declined to 1,607 MMcfd in Q4CY09, as against 1,664 MMcfd
in Q4CY08. Composite average natural gas prices declined to $3.88 per Mcf in Q4CY09, as against $5.32 per
Mcf in Q4CY08. Natural gas liquids volumes rose to 24.4 MBbld in Q4CY09, as against 16.8 MBbld in
Q4CY08. Crude oil and condensate volumes totaled 60.9 MBbld in Q4CY09, as against 55.7 MBbld in
Q4CY08. The Company has posted $546.63 mn net income in CY09, as against $2.44 bn net income in
CY08. Its net operating revenues fell 32.8% YoY to $4.79 bn in CY09, as against $7.13 bn in CY08. For the
full year, EOG delivered 6.5% growth in production to 773.0 Bcfe from 727.6 Bcfe in the prior year.
Insurance and reinsurance provider, Axis Capital has posted $282.06 mn profit in Q4CY09, as against $130.85 mn profit in
Q4CY08. It has posted $461.01 mn profit in CY09, as against $350.5 mn profit in CY08.
Canada-based diversified mining and metallurgical company, Teck Resources has posted C$411 mn profit in Q4CY09, as against
C$607 mn loss in Q4CY08. It has posted C$1.8 bn net income in CY09, as against C$659 mn in CY08.
Connecticut-based insurer, Hartford Financial Services has posted $557 mn profit in Q4CY09, as against $806 mn loss in Q4CY08.
It has posted $887 mn net loss in CY09, as against $2.7 bn net loss in CY08.
US Steel Corporation has posted $267 mn loss in Q4CY09, as against $290 mn profit in Q4CY08. Its net sales decreased to $3.35
bn in Q4CY09, as against $4.5 bn in Q4CY08.
Weekly Newsletter 16
Bridging the Information Gap in Corporate Landscape
Air China to purchase 20 Airbus aircrafts
Air China and Air China Import & Export Company has revealed a purchase agreement with Airbus
Company, a unit of European Aeronautic Defence and Space Company NV for the purchase 20
Airbus 320-series aircrafts. The basic price of the Airbus Aircraft in aggregate is approximately
US$1,628 mn, which is equivalent to approximately HK$12,649.6 mn. The transaction is expected
to be funded through cash generated from Air China's business operations, commercial bank loans and other
financing instruments. The Company said that the aircraft price is subject to price escalation by applying a
formula, while indicating that Airbus has granted it significant price concessions with regard to the aircraft.
These will take the form of credit memoranda which may be used by the company towards the final price
payment of the aircraft or may be used to purchase goods and services from Airbus Company. The purchase
will strengthen the fleet capacity of the Company with an increase of 5% based on available tonne
kilometers as at December 31, 2009, if not taking into account the adjustments that may be made to the
fleet based on marketing condition and aging of the fleet. Air China's purchase of Airbus Aircraft appears to
be a set back for Boeing, which expects China to spend about $400 bn to purchase 3,770 planes.
Bermuda-based insurance and reinsurance service provider, XL Capital has posted $40.3 mn loss in Q4CY09, as against $1.43 bn
loss in Q4CY08. It has posted $206.6 mn profit in CY09, as against $2.63 bn loss in CY08. Its revenue declined to $6.19 bn in CY09,
as against $7.15 bn in CY08.
Max Capital Group has posted $62.6 mn net income in Q4CY09, as against $94.1 mn net loss in Q4CY08. Its total revenues
increased to $268.3 mn in Q4CY09, as against $259.5 mn in Q4CY08.
Rhode Island-based pharmacy healthcare provider, CVS Caremark Corporation has posted $1.04 bn profit in Q4CY09, as against
$949 mn profit in Q4CY08. It has posted $3.69 bn profit in CY09, as against $3.19 bn profit in CY08.
Florida-based health care service provider, Lincare Holdings has posted $40.6 mn profit in Q4CY09, as against $55.6 mn profit in
Q4CY08. It has posted $136.1 mn profit in CY09, as against $227.3 mn profit in CY08.
Folsom, California-based Waste Connections has posted $23.25 mn profit in Q4CY09, as against $27.26 mn profit in Q4CY08. It
has posted $109.82 mn profit in CY09, as against $102.9 mn profit in CY08.
California-based medical device maker, CareFusion Corporation has posted $70 mn profit in Q2, as against $188 mn profit Q2 last
year. For the six-month period, it has posted $151 mn profit, as against $301 mn profit in the year-ago period.
China-based internet search engine giant, Baidu has posted CH¥1.48 bn (US$217.6 mn) net income in CY09, as against CH¥1 bn
(US$153.6 mn) in CY08. Its total revenues stood at CH¥4.44 bn (US$651.6 mn) in CY09, as against CH¥3.2 bn (US$468.8 mn) in
Connecticut-based audio equipment maker, Harman International has posted $16.1 mn profit in Q2, as against $319.13 mn loss
in Q2 last year. For the six-month period, it reported $6.63 mn profit, as against $298.14 mn loss in the year-ago period.
California-based, micro-controller and touch solutions provider, Atmel Corporation has posted $76.94 mn loss in Q4CY09, as
against $24.35 mn loss in Q4CY08. It has posted $103.17 mn loss in CY09, as against $27.21 mn loss in CY08.
California-based storage systems and chip maker, LSI Corporation has posted $64.81 mn net income in Q4CY09, as against
$606.35 mn net loss in Q4CY08. Its revenues increased 5% to $637.8 mn in Q4CY09, as against $609.96 mn in Q4CY08.
Multifamily real estate investment trust, UDR has posted $24.79 mn loss in Q4CY09, as against $18.38 mn loss in Q4CY08. It
posted $95.85 mn loss in CY09, as against $688.7 mn loss in CY08.
Pawtucket, Rhode Island-based games and toys manufacturer, Hasbro has posted $165.56 mn profit in Q4CY09, as against $93.58
mn profit in Q4CY08. It has posted $374.93 mn profit in CY09, as against $306.77 mn profit in CY08.
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Weekly Newsletter 17