The Week That Was(7th June-13th June)
Tuesday, June 16, 2009 , Posted by Silent Observer at Tuesday, June 16, 2009
SATYAM SURPRISE INVESTORS WITH PROFIT
Satyam Computer Services cheered the markets by announcing revenues of over Rs 2,000 crore and profit of Rs 181 crore for the Oct- Dec quarter. Satyam's revenues could thus touch around Rs 8,000 crore, or $ 1.6 billion, based on an extrapolation of these results. For January 2009, Satyam posted a net profit of Rs 4 crore. In February, net profit stood at Rs 52 crore on revenues of Rs 676 crore. The news saw Satyam shares surge past the open offer price of Rs 58/ share. Analysts said investors are unlikely to tender shares at a discount to the current price and TechM may benefit by receiving a preferential allotment of shares at a discount to the market price. The Indian IT firm on Thursday announced that up to 10,000 employees, or about a fourth of the staff, will join a virtual pool.
SESA GOA ACQUIRES DEMPO'S MINING ASSET
Sesa Goa, India's largest private iron ore exporter, has acquired Goa-based Dempo Group's mining assets for Rs 1,750 crore in an all-cash deal in a move intended to increase its pricing power and strengthen its position in the domestic market. A part of London-listed Vedanta Resources, Sesa Goa on Thursday said it has signed a definitive agreement to buy all outstanding common shares of the unlisted VS Dempo & Co (VSD), which owns 100% of the equity shares of Dempo Mining and a 50% stake in Goa Maritime. The deal includes VSD's net working capital of Rs 145 crore.
FRANCE TELE, TELSTRA & AT&T EYE AIRCEL
France Telecom, Telstra of Australia and US' AT&T are in talks with Malaysia's Maxis Communication to buy a minority stake in Aircel in yet another sign that slowdown and credit crunch are having little impact on telecom deals. The talks between the first two companies and Maxis — which owns 74% in Aircel — revolve around France Tele buying 20-25% in the Indian telecom player, a dominant player in Chennai and Tamil Nadu. The remaining stake in the telco is held by the Chennai-based Reddy family.
INFLATION AT 33-YEARS LOW
Inflation for the week ended May 30 dropped to 0.13%, lowest since the government started recording such data in 1977-78, fuelling speculation that the figure could enter negative territory next week. The decline in headline inflation was largely due to a high base effect, or higher inflation numbers in corresponding the week last year. Week on week, there was a 0.1% increase in the wholesale price index (WPI), led by a sharp 0.6% increase in the prices of food articles, data released by the commerce ministry on Thursday showed. A rise in the rate of inflation over the last couple of months and a relaxed monetary policy led to fears that inflation could become a concern soon. "We think inflationary pressures are sequentially building up," a recent note by Goldman Sachs said.
MARKET REMAINS BULLISH THIS WEEK
The stock market remained bullish for the fourteenth straight week with the benchmark Sensex gaining about 1% as the foreign investors' appetite for Indian equity showed impressive increase since May. The Smallcap and the Midcap segments suffered a sharp setback after outperforming the key index for the last few weeks, which analysts, saw as a required correction for the good health of market. Sectors such as realty, bank and consumer durables also was adjusted downward after a recent strong rally. Withstanding resistance above the 15-K psychological mark, the Bombay Stock Exchange 30-share barometer ended the week under review higher at 15,237.94, adding 134.39 points or 0.89% over its last weekend's close. The National Stock Exchange's 50-share Nifty, however, ended week flat at 4,583.40 against its previous weekend's close of 4,586.90. The market driver Foreign Institutional Investors (FIIs) have begun pouring their investments after the post-election political stability with the government's repeated hints about speedy economic reforms in key sectors amid strong signs of a recovery in Indian economy. The capital inflows amounted to more than Rs 5,500 crore so far in June taking the total inflows till date in the calendar year
to nearly Rs 27,000 crore. After showing a negative growth rate in the last four months, the industrial production for April was up 1.4%, a further indication that economy is on a recovery path. The market is expected to remain upbeat ahead of the full budget to be presented early next month amid high expectations of reforms and decisions on PSU disinvestment programme. The trading volume was relatively low during the week with a total turnover on BSE falling to Rs 39,216 crore from Rs 45,288 crore, and Rs 1,17,890 crore on the NSE from Rs 1,30,005 crore. India's largest private sector company and the top heavyweight in the Sensex pack — Reliance Industries — soared 6.55% over the week amid anticipation that the government may provide a seven-year tax holiday to natural gas producers as it is given to crude oil explorers in the Union Budget 2009-10. A sharp surge in metal prices on the London Metal Exchange triggered a rally in metal stocks at home. As a result, the BSE metal index jumped by 4.49%
