Value-buying offers some respite
The Sensex recovered some lost ground after plunging to a low of 14,182.34 on value-buying. At 12:36 IST the 30-shares BSE Sensex was down 247.39 points, to 14,291.55.
The BSE Sensex began on a highly bearish note, as selling pressure spilled over into this week. The horror show had started on Friday, when the benchmark Sensex tumbled close to 113 points, as a lot of stop losses were triggered due to highly leveraged positions in the derivatives market. Its high for the day is 14,529.28.
The market-breadth was quite weak. There were close to 10 losers for every single gainer on BSE. For 2,260 shares declining on BSE, only 272 rose. Just 15 shares were unchanged.The BSE clocked a turnover of Rs 2077 crore.All members of the Sensex pack were trading in the red.
Interest rate concerns bruise real estate scrips
Real estate scrip declined sharply extending their recent fall.
Some prime losers included Mahindra Gesco Developers was down 12.7% to Rs 562.90, Akruti Nirman was down 13% to Rs 481.80, Peninsula Land was down 9% to Rs 414.55, Unitech was down 9% to Rs 425, Parsvnath Developers was down 8.9% to Rs 309, Sobha Developers was down 7.9% to Rs 841.
Real estate stocks have been correcting in the past few days. From Rs 418.90 on 25 January 2007, Parsvnath Developers has lost 26% to the current Rs 309. Mahindra Gesco Developers has plunged 29.9%, from Rs 803.05 on 29 January 2007. From Rs 1057.70 on 25 January, Sobha Developers has dived 20.4%.
Market players are cautious about real estate companies due to fear of rising interest rates in India. It may be recalled that the real estate scrip had surged over the past two years, thanks to the housing boom due to easy availability of housing finance and relatively benign interest rates. The surge in real estate stocks was also because the property boom that pushed real estate prices higher.
On 31 January 2007, the Reserve Bank of India (RBI) raised short-term interest rates by 25 basis points. Further, the RBI has also raised the provisioning requirement of banks for real estate sector to 2% from 1%, excluding residential housing loans. The data on Friday (9 February 2007) showed that inflation rose to an over two-year high, raising concerns about further spike in interest rates.
Real estate firm reported a robust financial performance for the quarter ended December 2006. Unitech’s net profit jumped 3190% in December 2006 quarter to Rs 452.38 crore (Rs 13.75 crore). The net sales for the quarter rose 483.3% to Rs 1002.74 crore (Rs 171.91 crore).
Mahindra Gesco Developers has reported 277% surge in net profit in the December 2006 quarter, to Rs 9.50 crore (Rs 2.52 crore). Net sales for the quarter rose 34.2% to Rs 41.79 crore.
Prajay Engineers Syndicate reported 203.8% growth in net profit in the December 2006 quarter, to Rs 15.22 crore (Rs 5.01 crore). Net sales for the quarter rose 120.4% to Rs 42.08 crore (Rs 19.09 crore).
Anant Raj Industries reported 252.2% growth in net profit in the December 2006 quarter to Rs 42.30 crore (Rs 12.01 crore). Net sales for the quarter rose 290.1% to Rs 72.55 crore (Rs 18.60 crore).
US takeover offers no respite to GHCL
GHCL slipped 2.34% to Rs 168.95 in an overall weak market, despite the company acquiring the assets of US-based Best Manufacturing Group.As many as 75,054 shares were traded on the BSE, after the acquistion worth for $ 35 million.
The scrip has surged from a recent low of Rs 163.55 on 12 December 2006 to Rs 179.95 by 7 February 2007, only to slip to Rs 173 by 9 February 2007. Earlier, the scrip slipped from Rs 176.90 on 4 December to Rs 163.55 by 12 December 2006.
At the current market price of Rs 168.95, GHCL trades 13.35 times its Q4 December 2006 annualized EPS of Rs 12.65.
GHCL announced the acquisition of US-based Best Manufacturing Group, for $ 35 million. Best Manufacturing's annual sales stand at $160 million. Best is the leading manufacturer and distributor of home textiles and related items for the hospitality and healthcare sector in the US.
As per recent reports, GHCL is also considering the acquisition of Romanian soda ash maker, Uzinele Sodice Govora (USG). This transaction, once materialised, will be GHCL's second buyout in that country after its takeover of a 3 lakh tonne soda ash company, S C Bega Upsom SA, in December 2005. USG, a 2 lakh tonne soda ash producer, has mortgaged its assets with GHCL to tide over its financial crisis. The proposed acquisition is part of the company's target to quadruple capacity to 4 million tonnes by next year. Further, in January 2007, GHCL had acquired H W Baker Lenin for Rs 30.09 crore through an American subsidiary.
GHCL posted a net profit growth of 15.60% to Rs 30.70 crore (Rs 26.55 crore) in the Q4 December 2006. Net sales for the quarter rose 28.30% to Rs 217.05 crore from Rs 169.22 crore.
Grief in RComm over Hutch Essar loss
Reliance Communications was down 3% to Rs 460.90, after it lost the bid to acquire Hutchison Essar, the leading cellular services provider.Nevertheless, the stock was recovering after falling as much as 5.7%, to Rs 448.15 at 11:49 IST. As many as 13.5 lakh shares changed hands in the counter on BSE.
Mobile telecom services giant, Vodafone, won the $18.8 billion battle for the fourth largest cellular services firm. Vodafone staved off bids from Reliance Communications, the Hinduja brothers and Essar itself, to buy Hutchison's 67% stake for $11.1 billion in cash, and $2 billion more in debt, an enterprise value of $18.8 billion.
Vodafone's emergence as the top bidder has dashed Reliance Communications hope of becoming the largest mobile operator in the country from its number two position at present. A successful acquisition of Hutch-Essar would have made Reliance Communications India’s largest cellular company, with a combined subscriber base of 52 million, ahead of Bharti Airtel, which has a subscriber base of 33 million.
This also upsets Reliance Communication's plan of expanding into the GSM segment. Although Reliance Communications provides GSM services in eight circles, and has applied for a spectrum in others, Hutch-Essar would have provided it a readymade base without any major concerns on the spectrum front. Now, it will have to wait for clarity on the spectrum front for further penetrating the GSM segment. Reliance Communications is a leading CDMA-based mobile service provider.
With Vodafone’s entry into the Indian market, Reliance Communications will now have to face stiffer competition.
On the flip side, the huge valuation for Hutch-Essar may trigger re-rating of the sector.
There are about 6.5 million net new subscribers in India in January 2007, making it the fastest growing major mobile phone market in the world.
Reliance Communications (RCL) scrip had plunged 5% on 6 February 2007 to Rs 489.15 as a huge $1 billion FCCB issue, which was completed on 5 February 2007, raised concerns of equity dilution. It had declined further to Rs 475.55 by 9 February 2007 ahead of the opening of bids for Vodafone.
RCL’s consolidated net profit jumped 198 % in the Q3 December 2006 quarter, to Rs 924.42 crore, on 26% growth in consolidated revenue to Rs 3755.30 crore.
The BSE Sensex began on a highly bearish note, as selling pressure spilled over into this week. The horror show had started on Friday, when the benchmark Sensex tumbled close to 113 points, as a lot of stop losses were triggered due to highly leveraged positions in the derivatives market. Its high for the day is 14,529.28.
The market-breadth was quite weak. There were close to 10 losers for every single gainer on BSE. For 2,260 shares declining on BSE, only 272 rose. Just 15 shares were unchanged.The BSE clocked a turnover of Rs 2077 crore.All members of the Sensex pack were trading in the red.
Interest rate concerns bruise real estate scrips
Real estate scrip declined sharply extending their recent fall.
Some prime losers included Mahindra Gesco Developers was down 12.7% to Rs 562.90, Akruti Nirman was down 13% to Rs 481.80, Peninsula Land was down 9% to Rs 414.55, Unitech was down 9% to Rs 425, Parsvnath Developers was down 8.9% to Rs 309, Sobha Developers was down 7.9% to Rs 841.
Real estate stocks have been correcting in the past few days. From Rs 418.90 on 25 January 2007, Parsvnath Developers has lost 26% to the current Rs 309. Mahindra Gesco Developers has plunged 29.9%, from Rs 803.05 on 29 January 2007. From Rs 1057.70 on 25 January, Sobha Developers has dived 20.4%.
Market players are cautious about real estate companies due to fear of rising interest rates in India. It may be recalled that the real estate scrip had surged over the past two years, thanks to the housing boom due to easy availability of housing finance and relatively benign interest rates. The surge in real estate stocks was also because the property boom that pushed real estate prices higher.
On 31 January 2007, the Reserve Bank of India (RBI) raised short-term interest rates by 25 basis points. Further, the RBI has also raised the provisioning requirement of banks for real estate sector to 2% from 1%, excluding residential housing loans. The data on Friday (9 February 2007) showed that inflation rose to an over two-year high, raising concerns about further spike in interest rates.
Real estate firm reported a robust financial performance for the quarter ended December 2006. Unitech’s net profit jumped 3190% in December 2006 quarter to Rs 452.38 crore (Rs 13.75 crore). The net sales for the quarter rose 483.3% to Rs 1002.74 crore (Rs 171.91 crore).
Mahindra Gesco Developers has reported 277% surge in net profit in the December 2006 quarter, to Rs 9.50 crore (Rs 2.52 crore). Net sales for the quarter rose 34.2% to Rs 41.79 crore.
Prajay Engineers Syndicate reported 203.8% growth in net profit in the December 2006 quarter, to Rs 15.22 crore (Rs 5.01 crore). Net sales for the quarter rose 120.4% to Rs 42.08 crore (Rs 19.09 crore).
Anant Raj Industries reported 252.2% growth in net profit in the December 2006 quarter to Rs 42.30 crore (Rs 12.01 crore). Net sales for the quarter rose 290.1% to Rs 72.55 crore (Rs 18.60 crore).
US takeover offers no respite to GHCL
GHCL slipped 2.34% to Rs 168.95 in an overall weak market, despite the company acquiring the assets of US-based Best Manufacturing Group.As many as 75,054 shares were traded on the BSE, after the acquistion worth for $ 35 million.
The scrip has surged from a recent low of Rs 163.55 on 12 December 2006 to Rs 179.95 by 7 February 2007, only to slip to Rs 173 by 9 February 2007. Earlier, the scrip slipped from Rs 176.90 on 4 December to Rs 163.55 by 12 December 2006.
At the current market price of Rs 168.95, GHCL trades 13.35 times its Q4 December 2006 annualized EPS of Rs 12.65.
GHCL announced the acquisition of US-based Best Manufacturing Group, for $ 35 million. Best Manufacturing's annual sales stand at $160 million. Best is the leading manufacturer and distributor of home textiles and related items for the hospitality and healthcare sector in the US.
As per recent reports, GHCL is also considering the acquisition of Romanian soda ash maker, Uzinele Sodice Govora (USG). This transaction, once materialised, will be GHCL's second buyout in that country after its takeover of a 3 lakh tonne soda ash company, S C Bega Upsom SA, in December 2005. USG, a 2 lakh tonne soda ash producer, has mortgaged its assets with GHCL to tide over its financial crisis. The proposed acquisition is part of the company's target to quadruple capacity to 4 million tonnes by next year. Further, in January 2007, GHCL had acquired H W Baker Lenin for Rs 30.09 crore through an American subsidiary.
GHCL posted a net profit growth of 15.60% to Rs 30.70 crore (Rs 26.55 crore) in the Q4 December 2006. Net sales for the quarter rose 28.30% to Rs 217.05 crore from Rs 169.22 crore.
Grief in RComm over Hutch Essar loss
Reliance Communications was down 3% to Rs 460.90, after it lost the bid to acquire Hutchison Essar, the leading cellular services provider.Nevertheless, the stock was recovering after falling as much as 5.7%, to Rs 448.15 at 11:49 IST. As many as 13.5 lakh shares changed hands in the counter on BSE.
Mobile telecom services giant, Vodafone, won the $18.8 billion battle for the fourth largest cellular services firm. Vodafone staved off bids from Reliance Communications, the Hinduja brothers and Essar itself, to buy Hutchison's 67% stake for $11.1 billion in cash, and $2 billion more in debt, an enterprise value of $18.8 billion.
Vodafone's emergence as the top bidder has dashed Reliance Communications hope of becoming the largest mobile operator in the country from its number two position at present. A successful acquisition of Hutch-Essar would have made Reliance Communications India’s largest cellular company, with a combined subscriber base of 52 million, ahead of Bharti Airtel, which has a subscriber base of 33 million.
This also upsets Reliance Communication's plan of expanding into the GSM segment. Although Reliance Communications provides GSM services in eight circles, and has applied for a spectrum in others, Hutch-Essar would have provided it a readymade base without any major concerns on the spectrum front. Now, it will have to wait for clarity on the spectrum front for further penetrating the GSM segment. Reliance Communications is a leading CDMA-based mobile service provider.
With Vodafone’s entry into the Indian market, Reliance Communications will now have to face stiffer competition.
On the flip side, the huge valuation for Hutch-Essar may trigger re-rating of the sector.
There are about 6.5 million net new subscribers in India in January 2007, making it the fastest growing major mobile phone market in the world.
Reliance Communications (RCL) scrip had plunged 5% on 6 February 2007 to Rs 489.15 as a huge $1 billion FCCB issue, which was completed on 5 February 2007, raised concerns of equity dilution. It had declined further to Rs 475.55 by 9 February 2007 ahead of the opening of bids for Vodafone.
RCL’s consolidated net profit jumped 198 % in the Q3 December 2006 quarter, to Rs 924.42 crore, on 26% growth in consolidated revenue to Rs 3755.30 crore.
posted by SY at 2:11 PM
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