Market headed for showdown; fritters 400 points
The BSE Sensex, which had slipped below the psychological 14,000 level in the opening session, fell like nine pins as selling continued unabated. The benchmark index is now below 13,650, having touched a fresh low of 13,627.97 a little while ago.
At 14:29 IST the BSE Sensex was down 365 points, at 13,659.53. It had opened firm, at 14,071.27, but began declining immediately after.
The benchmark Sensex had sharply fallen close to 167 points on Thursday (22 February), in the last 45 minutes of trade, due to heavy unwinding of derivative contracts on account of their expiry. The February series, which expired on Thursday (22 February), was interestingly the first monthly series, since the devastating May plunge, when the Nifty settled in the red.
Market men are unwinding their long positions, choosing to watch from the sidelines, cautious ahead of the Union Budget for 2007-08.
Kinetic Motors in reverse gear
Kinetic Motors declined 1.39% to Rs 35.50, in a weak market, despite reports of the company signing a Rs 28-30 crore deal for selling 6,000 - 7,000 scooters to firms in Egypt and Sudan.The contract has to be executed in this calendar year itself.A very thin volume of 770 shares were traded on the BSE.
The scrip has been sliding since early-January 2007. From a recent high of Rs 44.30 on 8 January 2007, it slipped to Rs 36 by 22 February 2007. Earlier, the scrip rose from Rs 37.20 on 20 December 2006, to Rs 44.30 by 8 January 2007.
As per reports, Kinetic Motors has signed contracts worth approximately Rs 28-30 crore with companies in Egypt and Sudan for the sales of 6000-7000 scooters by the end of this calendar year.
In a bid to revamp its product range, the company also tied up with Taiwan's San Yang Motors. San Yang will have 11% stake in the joint venture. The new product is expected to hit the market sometime during this year. Further, Kinetic Motors has also tied-up with an Italian company, Italjet, to make ‘Euro’ scooters for the Indian market.
As per reports in November 2006, Kinetic Group, as a part of its restructuring process, moved its two-wheeler manufacturing to the Pithampur unit. Its flagship company, Kinetic Engineering (KEL), will be turned into the group's auto component manufacturer. Further, Kinetic Motor will buy, as a slump sale, the Supa undertaking/ business of KEL for Rs 53.50 crore. Supa, in Ahmednagar district, near Pune, is the assembly unit for KEL's mopeds. KEL has two other manufacturing locations - at Koregaon Bhima and Ahmednagar - which will presumably be used for the manufacture of automotive components, and bikes it exports.
The motorcycle business will now be shifted from Kinetic Engineering to Kinetic Motor, while Kinetic Engineering will become a full-fledged engines & components company.
Kinetic Motors, in August 2006, launched the Rs 51,000 new model, Blaze, the first in a line of seven models that Kinetic acquired from the Italian major, Italjet Moto, last year. A family scooter, Euro, the second model after the 165-cc Blaze, will also be launched soon.
Blaze was already being exported to Japan, and its next destinations include the US, Canada, Europe and Australia.Kinetic has two manufacturing units at Pithampur near Indore and Ahmednagar near Pune.The Ahmednagar unit is also foraying into export of automobile components. Currently, Kinetic has no plans for expansion, and was not in the SEZ race either.
Kinetic Motors posted a net loss of Rs 14.61 crore in the quarter ended December 2006 compared to a net loss of Rs 10.66 crore in the December 2005 quarter. Net sales for the December 2006 quarter rose 67.80% to Rs 46.64 crore from Rs 27.80 crore in the year ago quarter.
Tata Steel bucks weak trend
Tata Steel edged up 1.1% to Rs 461.35, in an otherwise weak market, amid reports that Corus had raised its hot/cold-rolled and coated prices in Europe, including in the UK.As many as 16.4 lakh shares changed hands in the counter on BSE, on news of Corus hiking prices, ranging from 5 - 7% for the second quarter 2007 deliveries.The Sensex was down 307 points, at 13,713.
Firm global steel prices have triggered a recovery in the Tata Steel stock over the past few days, which had been hammered late in January 2007 after winning an auction for the Anglo Dutch steelmaker. Worries of a short-term strain on its financials, due to the huge acquisition, had triggered a sell-off in the stock. From Rs 432.25 on 13 February 2007, the Tata Steel stock has risen 20.1%. Earlier, it had plunged 16.7% to Rs 432.25 from Rs 519.30 on 29 January 2007.
The decision to increase the prices by Corus is a reflection of favourable market conditions.After four months of weak prices, many of the mills have shut down furnaces in the US. Moreover, China has shut down some of its inefficient capacities, and is planning to clamp down on exports, which augur well for the price rise all around the world.
POSCO, the world's third-largest steel maker, may raise steel product prices from the second quarter if global demand remains strong, CEO Lee Ku-taek said on Friday.
In India, there are reports that domestic steel firms could raise prices by around Rs 1,000 a tonne post the Union Budget.
Cement scrips cornered
Cement majors ACC, Grasim, Gujarat Ambuja Cements and UltraTech Cement were down between 4.3 - 6.8%, extending their recent fall.UltraTech Cement was down 6.8% to Rs 895, Grasim was down 6% to Rs 2265, ACC was down 5.7% to Rs 908 and Gujarat Ambuja Cements 4.3% to Rs 121.20.
It was the second day in a row that cement shares were at the forefront of the fall. On Thursday (22 February), Grasim had plunged 5% to Rs 2415.85, ACC had lost 4.4% to Rs 963.50 and Gujarat Ambuja Cements had lost 3.3% to Rs 126.75.
Cement scrips have turned bearish as the government is keeping a watch on rising cement prices. In late-January 2007, the Central Government had abolished 12.5% import duty on cement, in a bid to rein in domestic cement prices. Traders said the government might impose ad-valorem duty in order to curtail price increase. Grasim is off 21.2% from its recent peak of Rs 2874.60 of 7 February 2007. ACC is down 18.6% from the peak of Rs 1115.80 of 22 January 2007 and UltraTech Cement has shed 21.1% from a recent peak of Rs 1120.85 of 7 February 2007.
Cement manufacturers have desisted from hiking cement prices, although the demand-supply situation distinctly favours a rise in domestic cement prices from the current levels.
Market is also agog with talk that the government may ban cement exports to rein in cement prices. Supply constraints are a major reason for the current firmness in cement prices. Very few capacities are getting operational in the near term. Even if there is a ban on export, it will hardly have any impact on domestic prices as exports account for a small portion of total production.
Analysts say that cement firms will continue to make good profits even if they maintain the prices at the current level. The price of a 50-kg cement bag in Mumbai is currently at Rs 226, a level maintained since November 2006. The current prices represents an 18% rise over the price in February 2006. Despite the government having done away with import duty on cement, it will hardly have any impact on the industry. India hardly imports cement.
Strong prices enabled cement companies report robust financial performance in December 2006 quarter. ACC’s net profit jumped 107% in to Rs 358.46 crore, on 50% growth in sales to Rs 1619.90 crore. Gujarat Ambuja Cements’s net profit jumped 287% to Rs 337.76 crore, on 72% growth in sales to Rs 1329.10 crore.
At 14:29 IST the BSE Sensex was down 365 points, at 13,659.53. It had opened firm, at 14,071.27, but began declining immediately after.
The benchmark Sensex had sharply fallen close to 167 points on Thursday (22 February), in the last 45 minutes of trade, due to heavy unwinding of derivative contracts on account of their expiry. The February series, which expired on Thursday (22 February), was interestingly the first monthly series, since the devastating May plunge, when the Nifty settled in the red.
Market men are unwinding their long positions, choosing to watch from the sidelines, cautious ahead of the Union Budget for 2007-08.
Kinetic Motors in reverse gear
Kinetic Motors declined 1.39% to Rs 35.50, in a weak market, despite reports of the company signing a Rs 28-30 crore deal for selling 6,000 - 7,000 scooters to firms in Egypt and Sudan.The contract has to be executed in this calendar year itself.A very thin volume of 770 shares were traded on the BSE.
The scrip has been sliding since early-January 2007. From a recent high of Rs 44.30 on 8 January 2007, it slipped to Rs 36 by 22 February 2007. Earlier, the scrip rose from Rs 37.20 on 20 December 2006, to Rs 44.30 by 8 January 2007.
As per reports, Kinetic Motors has signed contracts worth approximately Rs 28-30 crore with companies in Egypt and Sudan for the sales of 6000-7000 scooters by the end of this calendar year.
In a bid to revamp its product range, the company also tied up with Taiwan's San Yang Motors. San Yang will have 11% stake in the joint venture. The new product is expected to hit the market sometime during this year. Further, Kinetic Motors has also tied-up with an Italian company, Italjet, to make ‘Euro’ scooters for the Indian market.
As per reports in November 2006, Kinetic Group, as a part of its restructuring process, moved its two-wheeler manufacturing to the Pithampur unit. Its flagship company, Kinetic Engineering (KEL), will be turned into the group's auto component manufacturer. Further, Kinetic Motor will buy, as a slump sale, the Supa undertaking/ business of KEL for Rs 53.50 crore. Supa, in Ahmednagar district, near Pune, is the assembly unit for KEL's mopeds. KEL has two other manufacturing locations - at Koregaon Bhima and Ahmednagar - which will presumably be used for the manufacture of automotive components, and bikes it exports.
The motorcycle business will now be shifted from Kinetic Engineering to Kinetic Motor, while Kinetic Engineering will become a full-fledged engines & components company.
Kinetic Motors, in August 2006, launched the Rs 51,000 new model, Blaze, the first in a line of seven models that Kinetic acquired from the Italian major, Italjet Moto, last year. A family scooter, Euro, the second model after the 165-cc Blaze, will also be launched soon.
Blaze was already being exported to Japan, and its next destinations include the US, Canada, Europe and Australia.Kinetic has two manufacturing units at Pithampur near Indore and Ahmednagar near Pune.The Ahmednagar unit is also foraying into export of automobile components. Currently, Kinetic has no plans for expansion, and was not in the SEZ race either.
Kinetic Motors posted a net loss of Rs 14.61 crore in the quarter ended December 2006 compared to a net loss of Rs 10.66 crore in the December 2005 quarter. Net sales for the December 2006 quarter rose 67.80% to Rs 46.64 crore from Rs 27.80 crore in the year ago quarter.
Tata Steel bucks weak trend
Tata Steel edged up 1.1% to Rs 461.35, in an otherwise weak market, amid reports that Corus had raised its hot/cold-rolled and coated prices in Europe, including in the UK.As many as 16.4 lakh shares changed hands in the counter on BSE, on news of Corus hiking prices, ranging from 5 - 7% for the second quarter 2007 deliveries.The Sensex was down 307 points, at 13,713.
Firm global steel prices have triggered a recovery in the Tata Steel stock over the past few days, which had been hammered late in January 2007 after winning an auction for the Anglo Dutch steelmaker. Worries of a short-term strain on its financials, due to the huge acquisition, had triggered a sell-off in the stock. From Rs 432.25 on 13 February 2007, the Tata Steel stock has risen 20.1%. Earlier, it had plunged 16.7% to Rs 432.25 from Rs 519.30 on 29 January 2007.
The decision to increase the prices by Corus is a reflection of favourable market conditions.After four months of weak prices, many of the mills have shut down furnaces in the US. Moreover, China has shut down some of its inefficient capacities, and is planning to clamp down on exports, which augur well for the price rise all around the world.
POSCO, the world's third-largest steel maker, may raise steel product prices from the second quarter if global demand remains strong, CEO Lee Ku-taek said on Friday.
In India, there are reports that domestic steel firms could raise prices by around Rs 1,000 a tonne post the Union Budget.
Cement scrips cornered
Cement majors ACC, Grasim, Gujarat Ambuja Cements and UltraTech Cement were down between 4.3 - 6.8%, extending their recent fall.UltraTech Cement was down 6.8% to Rs 895, Grasim was down 6% to Rs 2265, ACC was down 5.7% to Rs 908 and Gujarat Ambuja Cements 4.3% to Rs 121.20.
It was the second day in a row that cement shares were at the forefront of the fall. On Thursday (22 February), Grasim had plunged 5% to Rs 2415.85, ACC had lost 4.4% to Rs 963.50 and Gujarat Ambuja Cements had lost 3.3% to Rs 126.75.
Cement scrips have turned bearish as the government is keeping a watch on rising cement prices. In late-January 2007, the Central Government had abolished 12.5% import duty on cement, in a bid to rein in domestic cement prices. Traders said the government might impose ad-valorem duty in order to curtail price increase. Grasim is off 21.2% from its recent peak of Rs 2874.60 of 7 February 2007. ACC is down 18.6% from the peak of Rs 1115.80 of 22 January 2007 and UltraTech Cement has shed 21.1% from a recent peak of Rs 1120.85 of 7 February 2007.
Cement manufacturers have desisted from hiking cement prices, although the demand-supply situation distinctly favours a rise in domestic cement prices from the current levels.
Market is also agog with talk that the government may ban cement exports to rein in cement prices. Supply constraints are a major reason for the current firmness in cement prices. Very few capacities are getting operational in the near term. Even if there is a ban on export, it will hardly have any impact on domestic prices as exports account for a small portion of total production.
Analysts say that cement firms will continue to make good profits even if they maintain the prices at the current level. The price of a 50-kg cement bag in Mumbai is currently at Rs 226, a level maintained since November 2006. The current prices represents an 18% rise over the price in February 2006. Despite the government having done away with import duty on cement, it will hardly have any impact on the industry. India hardly imports cement.
Strong prices enabled cement companies report robust financial performance in December 2006 quarter. ACC’s net profit jumped 107% in to Rs 358.46 crore, on 50% growth in sales to Rs 1619.90 crore. Gujarat Ambuja Cements’s net profit jumped 287% to Rs 337.76 crore, on 72% growth in sales to Rs 1329.10 crore.
posted by SY at 6:15 PM
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