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Record price to pinch festive gold demand
Prithviraj Kothari
Oil prices fall as Libya’s civil war nears end
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I-T dept makes tax demand of
Rs 2,114 cr on Mah Satyam
India Inc to go slow on new spending as confidence wanes
HP scrip dips 44% in eight months
SEBI simplifies process for opening trading accounts
India may have to import sugar from next year
Essar Energy hit by project delays
World stocks steady above 11-month lows
US slowdown hits exports from Punjab
Godrej Prop to spend
Rs 138.7 cr on loan repayment
GVK raises stake in BIAL
IIT
Kharagpur confers honorary doctorate on Sunil Mittal
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Record price to pinch festive gold demand
Mumbai, August 22 "If prices stay at current levels, demand will be lower during the festival season. But if prices fall to 25,000 rupees (per 10 grams), then it will rise," Prithviraj Kothari, president of the Bombay Bullion Association, said in an interview on Monday. "Overall (India's) imports I think will be more than 1,000 tonnes despite lower sales during festivals," he said. India’s key October gold contract on the Multi Commodity Exchange hit another record high on Monday at 28,244 rupees ($618.44) per 10 grams while international prices rallied towards $1,900 an ounce. Interest in the safe haven commodity was fuelled by concerns over the global economic outlook. "In January to June we have already imported over 500 tonnes. Now people are not only buying during festivals. They buy throughout the year. Whenever they get an opportunity, they buy," Kothari said. India, whose appetite for gold dates back centuries, imported a record 958 tonnes in 2010 and a recent Reuters poll forecast imports to fall by 12 percent in 2011. Kothari said though demand has been rising for gold, demand for jewellery is falling as more and more people buy coins and bars. “Two to three years back, 85 per cent of gold consumption was in jewellery form. Now that has fallen to 70 per cent. Investment demand is continuously rising due to higher (jewellery) making charges and wastage (at the time of sale),” he said, adding in coming years the shift towards investment will continue. Despite record high prices, scrap sales are not rising in India and Kothari says they are unlikely to rise in the current scenario. "I don't think scrap sales will rise because of higher prices. The equity market is not giving returns, property prices are steady ... they can sell gold, but where will they invest their money after selling?" he said. "Now prices are going up and up only. So I don't think Indians will sell old jewellery," he added.— Reuters
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Oil prices fall as Libya’s civil war nears end
New York, August 22 Libyan government tanks and snipers put up scattered resistance in Tripoli after rebels swept into the heart of the capital, cheered on by crowds hailing the end of Muammar Gaddafi's 42 years in power. "A resolution of the conflict is modestly bearish for crude oil prices, but it is less likely that we will get a $10-$20 drop in price of crude," Jason Schenker, president at Prestige Economics LLC in Austin, Texas, said in a note. "While the fundamentals of the conflict resolution appear at first glance to be only bearish, it could turn out to be quite bullish, as it could engender further conflict in the region," Schenker said. Brent losses were limited by the dollar's weakness and the greenback's slip and a bounce by equities on Wall Street helped lift U.S. crude prices, for both the expiring front-month September and October contracts. The euro edged up, helped by a rise in European shares, while the dollar weakened on speculation that the Federal Reserve may show some indication this week about the need to take additional measures to support an ailing economy. ICE Brent October crude fell $1.25 to $107.37 a barrel by 11:09 a.m., having recover from a $105.15 intraday low. US expiring September crude rose 84 cents to $83.10 a barrel, having reached as high as $84.30. OIL TO EASE AS END-GAME IN LIBYA ON HORIZON Libya pumped around 1.6 million barrels per day (bpd), nearly 2 per cent of global supply, before the war cut its output Production fell to almost nothing during the conflict but technical staff from Italy's oil and gas major ENI have already arrived in Libya to look into restarting oil facilities. Some Libyan output will be able to restart in a few months, but it will take as long as 18 months to reach the prewar level
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I-T dept makes tax demand of
Rs 2,114 cr on Mah Satyam
Mumbai, August 22 "The company has received draft notices of demand for Rs 1,037.69 crore and Rs 1,075.73 crore for assessment years 2002-03 and 2007-08, respectively," Mahindra Satyam said in a filing to the Bombay Stock Exchange. A senior official of the company said that they are yet to receive the notice and may approach the I-T tribunal for justice. "This is only a draft assessment order. We will respond once we receive the tax notice. We may approach the Tribunal. The
tax was levied on fictitious income. It is not justified. Even the
government is aware that the income was fictitious during that
period," the official said.— PTI |
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India Inc to go slow on new spending as confidence wanes
New Delhi, August 22 For a second successive year, Corporate India is unlikely to raise capital spending by much, which will a tepid 10 per cent year on year. Corporate confidence levels seem to be low and confidence in growth appears to have waned, which is the most crucial driver to capex. The survey of 312 large and medium sized companies suggests that the capacity utilisation is likely to be 78 per cent compared to 76 per cent last year. Fuel prices and inflation are the biggest worries. Interestingly, only 20 per cent of the sample think that the alleged corruption scandals are impacting their capex plans for 2012. Equity supply will remain sluggish and to date for this year, it is at $ 9 billion, down 46 per cent year-on-year. Corporates will continue to utilise profits followed by bank credit as the key sources of funding. Equities is the least preferred source of capital. If rates rise further, companies may resort to dividend cuts. The survey says that one third of capex is being funded by retained earnings. Balance sheet strength and availability of capital are the biggest drivers of capital raising. Debt to equity ratio has fallen from the previous survey. However, hiring appears fine as forecast profitability looks to be in good shape as corporate expect profit growth at 19 per cent in this financial year. They are budgeting for a 18 per cent growth in wage costs. Hiring has gained breadth with more corporate hiring at senior levels. Profitability is the biggest driver for hiring but rising wage bills may pressure profit growth. THE MONEY
Capacity utilisation is likely to be 78 per cent compared to 76 per cent last year. Equity supply will remain sluggish and to date for this year, it is at $ 9 billion, down 46 per cent y-o-y Corporates will continue to utilise profits followed by bank credit as the key sources of funding. Equities is the least preferred source of capital. |
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HP scrip dips 44% in eight months
San Francisco, August 22 Apotheker, who gained a reputation for sharp business acumen when he headed up SAP, thoroughly flummoxed HP shareholders last week with what some analysts have called a "value destroying" $11.7 billion deal to buy British software maker Autonomy and for sticking a for-sale sign on HP's PC division -- thus scaring off clients for the year or so it will take to decide on the division's future. In a resounding rejection of Apotheker's grand vision, shareholders sent HP shares down almost 20 per cent on Friday, wiping out $16 billion of value in the worst single-day fall since the Black Monday stock market crash of October 1987. "We wonder whether activist investors will — and should — begin to exert pressure on the board," said Toni Sacconaghi, an analyst with Sanford Bernstein. "If HP's results don't improve, the company will ultimately restructure its portfolio and/or replace its leadership." Pat Becker Jr, fund manager at Portland, Oregon-based Becker Capital Management Inc, which owns HP shares, noted that Apotheker has continually failed to instill confidence in his conference calls with investors. On a conference call last Thursday following the announcements on Autonomy and the PC division, Apotheker failed to fully address key questions from analysts, including why HP was paying a large premium for Autonomy.— PTI
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SEBI simplifies process for opening trading accounts
Mumbai, August 22 “The client will now be required to sign only on one document i.e. account opening form,” the regulator said, adding it was being done with a view to simplifying and rationalising the account opening process. Currently, an investor has to enter into a number of agreements depending on his trading preferences, like stock exchanges, segments, internet/ wireless technology based trading. SEBI said that henceforth, in the trading account opening form, the client would need to put his signatures instead of saying 'yes' or 'tick mark' while indicating preferences for trading. SEBI has devised uniform documentation to be followed by all the stock brokers and trading members.— PTI
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India may have to import sugar from next year
New Delhi, August 22 "India's sugar production and consumption are broadly expected to be in surplus for the 2011-12 crop year but there are already fears of a collapse of production in 2012-13 and the need once again for significant imports," Kingsman CEO Jonathan Kingsman said. Sugar production in India, the world's second largest producer and the biggest consumer, is estimated at 24.2 million tonnes in 2010-11 season (October-September) against the domestic demand of 21.5 mn tonnes.— PTI
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Essar Energy hit by project delays
London, August 22 The company said on Monday there would be ‘minor delays’ to its Salaya I, Mahan I and Vladinar phase 2 power projects and that it is still awaiting forest clearance from the Indian government for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations. "We believe that Essar Energy now faces a trust deficit and therefore there will be an even greater investor focus on project delivery times," said analysts at JP Morgan in a note. Essar Energy said in its statement: "Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern." "Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors.” For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $477.9 million, up from $320.2 million last year, boosted by higher refinery margins. This compared with a company-supplied anlayst consensus figure of $467 million. JP Morgan said in a note that when measured on a current price basis, earnings missed consensus, having been negatively impacted by a foreign exchange loss in the company's oil and gas unit. The FTSE 100 company was positive on the future of its refining business, saying it expected margins to stay at their current high levels to the end of 2011. "Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011," the company said. The company, which agreed to buy Royal Dutch Shell's (RDSa.L) Stanlow refinery in northwest England for $350 million in February, said its focus was on its Indian power projects and integrating Stanlow into its business. "We do not have any plans for any further acquisitions of refineries in Europe or elsewhere," chief executive Naresh Nayyar said in a conference call with reporters. Essar Energy, the majority shareholder in India-listed Essar Oil , is itself 77 percent-owned by privately-held Indian conglomerate Essar Group.— Reuters AWAITING CLEARANCE Still awaiting forest clearance for some coal blocks Says minor delays to three power projects Analysts say company faces a trust deficit after project hold-ups Scrip falls 4.4 per cent
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World stocks steady above 11-month lows
London, August 22 European shares did bounce back up as hopes of an end of conflict in Libya pushed energy shares higher and a recent sharp sell-off encouraged investors back into the market. But investors were in no mood to aggressively buy risky assets. Persistent worries that the sovereign debt crisis in euro zone peripheral countries may spread to bigger regional economies also kept safe-haven flows into gold, which hit another record high. "I am sure that there are some bargain hunters active in the market. Equities might gain some momentum as the week progresses," said Mike Lenhoff, chief strategist at Brewin Dolphin. "But if the market has to sustain the rebound, it has to have some cyclical sectors such as banks and mining behind it. Defensives tend to steady the markets, but I am not sure that they help to lead to a sustainable path for a rebound." "But if the market has to sustain the rebound, it has to have some cyclical sectors such as banks and mining behind it. Defensives tend to steady the markets, but I am not sure that they help to lead to a sustainable path for a rebound." The MSCI world equity index fell 0.7 percent at one point before erasing most losses. Emerging stocks lost 0.3 percent with losses led by Shanghai shares which hit a 13-month low. "A bigger concern is a slowdown in China's economy. We haven't reached that stage yet, but the equity market could be pricing that in, just in case," said Lee Wee-Liat, regional head of property at Samsung Securities. Beyond the short-term bounce, the equity market faces headwinds from the weakening outlook for earnings, especially in Europe.— Reuters FALL FOR FIVE WEEKS The benchmark MSCI for world stocks has now fallen five weeks in a row and is on track for the worst monthly performance since October 2008
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US slowdown hits exports from Punjab
Ludhiana, August 20 Exports of hand-tools, sports goods, auto-components, textile, apparels, leather and cycle industry in Punjab have been hit badly. The Central government needs to provide a special industrial package to Punjab to save manufacturers, says various industrial associations. Avtar Singh, general secretary Chamber of Industrial and Commercial Undertakings (CICU) said that the economic crisis in the US was leaving in its wake lots of instability in the global markets. He said that the US was the largest market for exports of hand tools and leather goods from Punjab. Hand tools worth around Rs 650 crore and leather goods worth Rs 500 crore were exported to America from Punjab. The slump in real estate sector had also affected steel industry of Mandi Gobindgarh and more than 40 units had already been shut down . "The Majority of exporters have already started to withdraw from the US market as the re-payment issues will crop up. This has made credit conditions more stringent as exports on the basis of Letter of Credit (LC) instead of Delivery Against Acceptance (DA) are now being preferred. The other main cause of worry for exporters in Punjab is the uncertainty of the US dollar", said Avtar Singh.
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Godrej Prop to spend
Rs 138.7 cr on loan repayment
New Delhi, August 22 In a filing to the BSE, the Godrej group firm said while Rs 75 crore will be utilised in acquiring land, Rs 12.70 crore will be spent on construction of its forthcoming projects. The balance Rs 51 crore will be utilised on repayment of loans. “We
are in advanced discussions for several new joint venture projects and
are planning new launches in Mumbai, Bangalore, Hyderabad, Chennai and
Kochi,” Godrej Group Chairman Adi Godrej said at the company's annual
general meeting.— PTI |
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Mumbai, August 22 In a filing to the Bombay Stock Exchange, GVK Power said, "Bangalore Airport & Infrastructure Developers Pvt Ltd, a step down subsidiary of the company has, subject to certain terms and compliances, exercised its Right of First Refusal, for acquiring 53,844,000 equity shares with a face value of Rs 10 each held by Siemens...".
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IIT Kharagpur confers honorary doctorate on Sunil Mittal New Delhi, August 22 The degree was awarded to Mittal by Prime Minister Manmohan Singh at the 57th Convocation of Indian Institute of Technology - Kharagpur, Bharti Airtel said . "I believe this recognition is also a tribute to Indian entrepreneurship and will be a source of inspiration for budding entrepreneurs," Mittal said. The Institution of Electronics and Telecommunication Engineers (IETE) had also conferred its highest honour, 'The Honorary Fellowship', to Mittal.— PTI
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Mumbai, August 22
Leo
Apotheker's credibility as a CEO is falling along with Hewlett-Packard's stock
price. Apotheker, who gained a reputation for sharp business acumen when he
headed up SAP, thoroughly flummoxed HP shareholders last week with what some
analysts have called a "value destroying" $11.7 billion deal to buy
British software maker Autonomy and for sticking a for-sale sign on HP's PC
division -- thus scaring off clients for the year or so it will take to decide
on the division's future.
Sunil
Bharti Mittal, the chairman and group CEO of Bharti Enterprises, has
been conferred the honorary doctorate by IIT Kharagpur for his
contribution to nation building as an entrepreneur.
Record high prices could pinch gold demand in India, the world's biggest consumer, during the key festival buying season in September and October, but investment demand will help ensure record imports in 2011, the head of India's leading trade body told Reuters.