Sensex pares gain
The market had pared gains in afternoon trade while Railway Minister Lalu Prasad Yadav continued presenting the Railway Budget to Parliament. Cement shares, although in the positive zone, had pared gains. Cement shares had surged just on the eve of the rail budget on expecting cuts in freight rates in the Railway Budget. There was no announcement so far with regard to changes in freight rate and passenger fare.
The market-breadth remained positive. Against 1,293 shares rising on BSE, 1,066 declined. A total of 61 shares remained unchanged. Gainers outpaced losers by a ratio of 1.2:1.At 12:46 IST the Sensex was up just 9 points, at 13,461. It had surged 80 points, to 12,713, by 12:09 IST just as Yadav's speech began.
Bank shares rebound as RBI to pay interest on CRR holdings
Bank shares were on fire today, after a two-day slump, following the central bank's decision to resume paying interest on eligible cash reserve ratio balances held by it.
The Reserve Bank of India had recently raised the cash reserve ratio (CRR) to 6% in two stages. The first phase of the hike came into effect last week, with CRR going from 5.50% to 5.75%. This monetary tightening was aimed at curtailing credit growth, and to rein in inflation, which for the 12-months ended 3 February 2007, stands at 6.63%.
A higher CRR requirement will deprive banks of lendable resources to that extent, by sucking out Rs 14,000 crore from the banking system. Banks do not earn any interest on CRR funds kept with the Reserve Bank of India. However, the RBI had announced that it will pay interest on eligible CRR balances held by it.
The Bankex has surged 0.45% to 6,808.75. Among private banks, South Indian Bank climbed 5.61% to Rs 104.50 followed by Dhanalakshmi Bank (up 3.02% to Rs 61.50), Bank of Rajasthan (up 2.29% to Rs 38), Centurion Bank (up 1.50% to Rs 37.15), UTI Bank (up 1.60% to Rs 499), ICICI Bank (up 0.45 to Rs 912), HDFC Bank (up 0.32% to Rs 960.50), and Yes Bank (up 1.20% to Rs 152.25).
Among PSU banks, State Bank of Mysore topped with a gain of 6.76% to Rs 6299 followed by Dena Bank (up 3.98% to Rs 35.30), Indian Overseas (up 3.68% to Rs 108.55), Punjab National Bank (up 3.24% to Rs 449), Canara Bank ( up 1.98% to Rs 213.90), Bank of India (up 1.87% to Rs 160.55), and State Bank of India (up 0.43% to Rs 1063.70).
Banks had recovered from the lower level in the last few days, as a number of them raised their prime lending rates (PLRs), in response to a hike in their cash reserve ratio (CRR) requirement by 50 basis points. From 6,976.88 on 14 February 2007, the Bankex had surged to 7,289.10 on 19 February 2007. From this high, the Bankex had slipped again to 6,759.58 by 23 February 2007.
Bank shares had tumbled ahead of the CRR hike. From a recent high of 7,594.83 on 8 February 2007, the Bankex lost 328.09 points (4.3%), to 7,266.74 by 13 February 2007.
Leading state-run banks like State Bank of India, Bank of India, Bank of Baroda and Punjab National Bank have raised their PLRs by a steep 50 basis points each, in the past few days. The hike in lending rates will help banks protect their margins in the current rising interest rate scenario. Strong credit growth, in a booming Indian economy, has pushed up both lending and deposit rates of banks in the past few years.
Bank credit has been growing at a robust pace but recently slowed in some segments like home loans. Non-food credit grew 30.2% year-on-year up to 2 February 2007, against a growth of 33.2% a year ago, while aggregate deposits expanded 23.2% year-on-year to 2 February, over and above 17.5% a year ago.
Block deal spurs EID Parry
EID Parry rose 2.74% to Rs 131.40, after a block deal was struck in the counter on BSE.The counter clocked cumulative volumes of 3.18 lakh shares on BSE, of which 3 lakh were traded in a block deal struck at Rs 127.75 per share at 10:40 IST.
The EI Parry stock had fallen sharply over the past few months as a major factor for the company’s profitability is sugar, which has largely, under-performed the market on concerns of falling prices. The stock lost 14.05% to Rs 127.90 on 23 February from Rs 150 on 23 November 2007.
EID Parry reported a 72.40% fall in Q3 December 2006 net profit to Rs 3.53 crore from Rs 12.80 crore for Q3 December 2005. Net sales for the December 2006 quarter slipped 28.20% to Rs 150.85 crore (Rs 210.16 crore).
EID Parry has targeted a turnover of Rs 1500 crore by 2009. The company is in the process of increasing its crushing capacity from the current 14,300 TCD to 24,500 TCD, alcohol capacity from the current 12 million litres to 72 million litres and co-generation capacity from 24.5 MW to 127 Mw. The total cost of the project is estimated to be around Rs 850 crore, and will be funded through a mix of internal accruals, debt and the sugar development fund.
In late-April 2006, EID Parry and Cargill International entered into a tie-up to set up a port-based sugar refinery in Kakinada, Andhra Pradesh, with an investment of Rs 325 crore, to tap the export market. EID Parry will hold 51 % stake and Cargill 49 % in the project.
The Kakinada facility, which will be an export-oriented unit, or will be located in a special economic zone (SEZ), will start operations by December 2007 with an initial capacity of 6 lakh tonnes a year. It will be expanded to 10 lakh tonnes. This sugar refining unit will be the largest of its kind in South Asia, a major market it hopes to tap. The unit will import raw sugar from markets such as Brazil, South Africa and Thailand. With the European Union obliged to cut down on subsidy-driven sugar exports, there is a deficit of over 6 million tonnes in the export market. In markets that can be reached from India alone, there is a three-million tonne deficit.
EID Parry recently transferred its Parryware business to its 50:50 joint venture with Roca of Spain.
The market-breadth remained positive. Against 1,293 shares rising on BSE, 1,066 declined. A total of 61 shares remained unchanged. Gainers outpaced losers by a ratio of 1.2:1.At 12:46 IST the Sensex was up just 9 points, at 13,461. It had surged 80 points, to 12,713, by 12:09 IST just as Yadav's speech began.
Bank shares rebound as RBI to pay interest on CRR holdings
Bank shares were on fire today, after a two-day slump, following the central bank's decision to resume paying interest on eligible cash reserve ratio balances held by it.
The Reserve Bank of India had recently raised the cash reserve ratio (CRR) to 6% in two stages. The first phase of the hike came into effect last week, with CRR going from 5.50% to 5.75%. This monetary tightening was aimed at curtailing credit growth, and to rein in inflation, which for the 12-months ended 3 February 2007, stands at 6.63%.
A higher CRR requirement will deprive banks of lendable resources to that extent, by sucking out Rs 14,000 crore from the banking system. Banks do not earn any interest on CRR funds kept with the Reserve Bank of India. However, the RBI had announced that it will pay interest on eligible CRR balances held by it.
The Bankex has surged 0.45% to 6,808.75. Among private banks, South Indian Bank climbed 5.61% to Rs 104.50 followed by Dhanalakshmi Bank (up 3.02% to Rs 61.50), Bank of Rajasthan (up 2.29% to Rs 38), Centurion Bank (up 1.50% to Rs 37.15), UTI Bank (up 1.60% to Rs 499), ICICI Bank (up 0.45 to Rs 912), HDFC Bank (up 0.32% to Rs 960.50), and Yes Bank (up 1.20% to Rs 152.25).
Among PSU banks, State Bank of Mysore topped with a gain of 6.76% to Rs 6299 followed by Dena Bank (up 3.98% to Rs 35.30), Indian Overseas (up 3.68% to Rs 108.55), Punjab National Bank (up 3.24% to Rs 449), Canara Bank ( up 1.98% to Rs 213.90), Bank of India (up 1.87% to Rs 160.55), and State Bank of India (up 0.43% to Rs 1063.70).
Banks had recovered from the lower level in the last few days, as a number of them raised their prime lending rates (PLRs), in response to a hike in their cash reserve ratio (CRR) requirement by 50 basis points. From 6,976.88 on 14 February 2007, the Bankex had surged to 7,289.10 on 19 February 2007. From this high, the Bankex had slipped again to 6,759.58 by 23 February 2007.
Bank shares had tumbled ahead of the CRR hike. From a recent high of 7,594.83 on 8 February 2007, the Bankex lost 328.09 points (4.3%), to 7,266.74 by 13 February 2007.
Leading state-run banks like State Bank of India, Bank of India, Bank of Baroda and Punjab National Bank have raised their PLRs by a steep 50 basis points each, in the past few days. The hike in lending rates will help banks protect their margins in the current rising interest rate scenario. Strong credit growth, in a booming Indian economy, has pushed up both lending and deposit rates of banks in the past few years.
Bank credit has been growing at a robust pace but recently slowed in some segments like home loans. Non-food credit grew 30.2% year-on-year up to 2 February 2007, against a growth of 33.2% a year ago, while aggregate deposits expanded 23.2% year-on-year to 2 February, over and above 17.5% a year ago.
Block deal spurs EID Parry
EID Parry rose 2.74% to Rs 131.40, after a block deal was struck in the counter on BSE.The counter clocked cumulative volumes of 3.18 lakh shares on BSE, of which 3 lakh were traded in a block deal struck at Rs 127.75 per share at 10:40 IST.
The EI Parry stock had fallen sharply over the past few months as a major factor for the company’s profitability is sugar, which has largely, under-performed the market on concerns of falling prices. The stock lost 14.05% to Rs 127.90 on 23 February from Rs 150 on 23 November 2007.
EID Parry reported a 72.40% fall in Q3 December 2006 net profit to Rs 3.53 crore from Rs 12.80 crore for Q3 December 2005. Net sales for the December 2006 quarter slipped 28.20% to Rs 150.85 crore (Rs 210.16 crore).
EID Parry has targeted a turnover of Rs 1500 crore by 2009. The company is in the process of increasing its crushing capacity from the current 14,300 TCD to 24,500 TCD, alcohol capacity from the current 12 million litres to 72 million litres and co-generation capacity from 24.5 MW to 127 Mw. The total cost of the project is estimated to be around Rs 850 crore, and will be funded through a mix of internal accruals, debt and the sugar development fund.
In late-April 2006, EID Parry and Cargill International entered into a tie-up to set up a port-based sugar refinery in Kakinada, Andhra Pradesh, with an investment of Rs 325 crore, to tap the export market. EID Parry will hold 51 % stake and Cargill 49 % in the project.
The Kakinada facility, which will be an export-oriented unit, or will be located in a special economic zone (SEZ), will start operations by December 2007 with an initial capacity of 6 lakh tonnes a year. It will be expanded to 10 lakh tonnes. This sugar refining unit will be the largest of its kind in South Asia, a major market it hopes to tap. The unit will import raw sugar from markets such as Brazil, South Africa and Thailand. With the European Union obliged to cut down on subsidy-driven sugar exports, there is a deficit of over 6 million tonnes in the export market. In markets that can be reached from India alone, there is a three-million tonne deficit.
EID Parry recently transferred its Parryware business to its 50:50 joint venture with Roca of Spain.
Labels: EID Parry
posted by SY at 1:34 PM
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