Concept Consultants

If one has to go by the amount of pessimism in the market and the mood being really negative and nothing but negative, then going by the past experiences, markets  bottom out when every  one is talking about only down sides ignoring the  fundamentals and the latest financial results.

One more point which may support these levels is the latest results which are not as bad as expected by the market.

At SENSEX level of 21000, we saw the same euphoria where every one was talking about only higher levels for the index, and not looking at the PE, Fundamentals, or results. That’s when market made the TOP.

So will market stop falling at this level of 8000-7600 which is nearly 70% from the peak and show some sideways movement?

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A visit of PepsiCo Chairman and CEO, Ms Indra Nooyi, and all its top executives, merits a announcement such as a $500-million investment over the next three years to triple business in the next five years in India.“Looking forward, as a tangible sign of our continued confidence in India, I am delighted to announce that we expect to invest $500 million over the three years, with a goal to triple our business here. This represents a substantial acceleration of our business here,” said Ms Nooyi addressing a press conference in Gurgaon on Sunday.

The money would be spent on expanding manufacturing capacity and adding new facilities and further building marketing infrastructure, as well as for sustainable initiatives and R&D, said PepsiCo India’s CEO, Mr Sanjeev Chada.

Consumers can look forward to new fortified and flavoured water over the next 12 months and more offerings from its Quaker portfolio. PepsiCo will also look to bring in the “good for you” products and ideas that have helped its portfolio elsewhere to shift away from a predominantly “treat for you” or comfort food bias. India ranks among the company’s top ten markets overall in dollar terms. In purchasing power parity terms it would be counted among the top 5-6 markets, and is a very substantial one whose prospects the company was bullish about, said Ms Nooyi.

She was accompanied by Pepsico’s senior leadership team that included Vice-Chairman and Pepsico International CEO, Mr Michael D. White, and Mr Saad Abdul-Latif, President South Asia, Middle East and Africa (SAMEA) Region.

The Pepsico Executive Committee (PEC) is to meet here on Monday.

The three-day India visit is to give the 26 business leaders a first hand insight into “what makes India tick, its history, politics culture and most importantly cuisine.”

Source:Business line dated: 22-09-08

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Reliance Industries will be ready to sell gas from its Krishna Godavari offshore basin from the January-March quarter next year.Commercial production of gas from the D6 block in the KG basin would start from January-March quarter, said Mr Mukesh Ambani, Chairman, RIL, at a news conference on Sunday called to announce the commencement of oil production from the block.

Mr Ambani said the crude, which started flowing on September 17, is now stabilised at 5,000 barrels a day, and would be scaled up to 5.5 lakh barrels of oil equivalent a day over the next four to six quarters. This would account for 40 per cent of domestic output. Gas would account for 90 per cent of production from the D6 block, and crude the rest.

The gas from the D6 block is currently being injected back. By fiscal 2010, oil and gas would contribute 25 per cent of the RIL’s profits, against 2 per cent currently.

Source: Business line dated: 22-09-08

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While the collapse of the US-based investment bank Lehman Brothers may not have a direct impact on Indian banks, some of them may face marginal losses due to their exposures to the US bank.The biggest private bank in the country, ICICI Bank, has the largest exposure. It has invested €57 million, (approximately $80 million) in senior bonds of Lehman Brothers. The investment is through the UK subsidiary, ICICI Bank UK PLC, and the bank has already made a provision of about $12 million against investments in these bonds, said Ms Chanda Kochhar, the bank’s Joint Managing Director and Chief Financial Officer.

The investment in Lehman Brothers bonds constitutes less than 1 per cent of the bank’s UK subsidiary’s assets and less than 0.1 per cent of ICICI group’s total assets, she said in a statement issued on Tuesday.

“Considering a 50 per cent recovery estimate, the additional provision required would be about $28 million. There is no other material impact on ICICI Bank or ICICI Bank UK PLC on account of exposure to Lehman Brothers,” she said.

Some Indian banks which have overseas operations have an exposure to Lehman Brothers, but as the amounts involved are negligible, the impact is likely to be minimal, banking analysts said.

Among the public sector banks, State Bank of India has an exposure of $ 5 million to Lehman through one of its foreign offices, said a senior official from the bank.

Bank of India has an exposure of about $10 million to FRNs (Floating Rate Notes) of Lehman Holdings, (which has gone bankrupt) and about $20 million thorugh CLN (Credit Linked Notes) to a Lehman subsidiary which has not been affected, said Mr T S Narayanasami, Chairman and Managing Director, BoI.

“There will be a hit, but we will know only as time evolves. We will have to make some provision,” he said.

Bank of Baroda has an exposure of $10 million (approximately Rs 47 crore) to CLNs (Credit Linked Notes) issued by Lehman Brothers, said a senior official of the bank.

Axis Bank has an exposure of about $1 -$ 1.5 million to Lehman Brothers, through a marked-to-market forex counter-party deal, which is maturing sometime in 2009-2010, said a senior official from the bank. “The exposure of Axis Bank, Bank of Baroda and Bank of India is immaterial. The only bank to be the most impacted would be ICICI Bank, but they too have exited a large part of their portfolio consisting of international clients and are now concentrating on the domestic portfolios”, said a banking analyst with a brokerage.

Source:Business line dated:17-09-08�

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State-owned Bharat Heavy Electricals Ltd (BHEL) on Monday announced it has bagged an order worth Rs 200 crore for a hydro-electric power project in Vietnam.The contract, which marks the equipment manufacturer’s entry into the Vietnamese market, was awarded by State-owned Nam Chien Hydropower, BHEL said in a press release.

The project is located in Muong La, 350 kilometres north of Hanoi and is slated to be completed by end-2010.

“This success opens a huge market potential for BHEL not only in the hydro segment but also in the thermal and gas based power plants segments in Vietnam, which will witness huge capacity additions in the future,” the statement said.

Under the contract, BHEL would be responsible for the design, engineering, manufacture, supply and supervision of installation as well as commissioning of electro-mechanical equipment.

Major equipment to be supplied for the project include hydro turbines, generators, transformers, controls, monitoring and protection system and switchgear. The project is being funded by a line-of-credit from the Government of India to Vietnam.

Source: Business Line Dated 05-Aug-2008�

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The Essar group  on Monday said that its Aegis BPO has agreed to buy the Nasdaq listed PeopleSupport Inc firm for $250 million (Rs 1,057 crore). This will the eleventh acquisition of Aegis in past four years. The acquisition would result in revenues of $500 million and also employment for about 29,000 people.

Under the terms of the agreement, Aegis will pay shareholders of PeopleSupport $12.25 per share, a 29 per cent premium to the closing share price on August 1, 2008, said a joint statement from the companies. The company person also added that the deal will be funded through internal accruals of the Essar group.

The US company(PeopleSupport Inc) offers customer management, transcription and captioning and additional BPO services for global clients in areas such as travel, consumer, financial services, healthcare and others. It has three delivery centres in the Philippines and one in Costa Rica.

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Daiichi Sankyo is planning to acquire up to 9.21 crore shares at Rs 737 each through the open offer. The Japanese company had announced earlier that it was buying out 34.81 per cent stake in Ranbaxy held by the Singh family. It will also acquire 9.5 per cent through preferential allotment of equity shares and another 4.5 per cent through share warrants to be issued on a preferential basis. Daiichi Sankyo’s stake in Ranbaxy could go up to 58 per cent after the open offer. The entire deal is valued at $3.4-4.6 billion.

However this would increase the stake of Daiichi by 20% in Ranbaxy. Ranbaxy’s share price went up 2.8 per cent to close at Rs 524 on Monday after the final word from SEBI.

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Reliance Power has decided to offer three bonus shares to its investors for every five held in an effort to compensate for the fall of its share price, However the bonus shares will not be offered to the promoters.
The bonus issue will effectively reduce the Reliance Power’s share price by nearly 40 per cent to Rs 269 for retail investors (who paid Rs 430 a share) and by 37 per cent to Rs 281 for institutional investors. The market reaction to this bonus announcement appeared mixed. One long time broker said it would make little difference since after any such issue of shares, the stock price typically goes down and investors may still find they have not gained much. “However, they may be more favourably disposed towards the group, which has lined up more IPOs,” said another broker, After shareholder approval, the record date for the bonus shares would be communicated through the exchanges.�

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Nasscom-Deolitte study on Indian IT industry says that the IT Industries have contributed 5.2 percent this year as against 1.2 percent in 1998. The main findings were that the industry also contributed to foreign exchange reerve of the country by increasing export by 36 per cent.
The study said that in 2008, the direct employment from the industry is expected to be around 2 million about 26 per cent growth in last ten years, The study also shed light on few other aspects also according to the study 75 per cent of the workforce employed in these jobs are SSC/HSC or less educated. The industry has had a multiplier effect on other sector of the economy. $15.85 billion spent by the IT/ITES industry in the domestic economy in 2006 generated an additional output of $15.5 billion.

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CB Bhave, Chairman of National Securities Depository Ltd, will be the new chief of market regulator SEBI and will replace incumbent M Damodaran.

Bhave, who had earlier served both in the Finance Ministry as well as SEBI, is expected to take charge after Damodaran term ends on February 17, sources said.

There was, however, no official confirmation on the appointment that is believed to have been decided last night after Finance Ministry reportedly took up the issue with the Prime Minister’s Office.

A notification on the appointment of the new SEBI Chairman is expected to be announced shortly. The name of Bhave, along with that of UTI Asset Management Company (AMC) CMD UK Sinha, Canara Bank CMD MBN Rao and Ministry of External Affairs Additional Secretary J Bhagwati, was doing the rounds as a possible successor to Damodaran.

Source: Hindustan Times 14/02/08

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