Nov 26, 2011 in FOCUS "No Great Deed Is Done by Falterers Who Ask for Certainty."– Eliot, George
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Nov 26, 2011 IN FOCUS "No great deed is done by falterers who ask for certainty."– Eliot, George. Weekly Indicators Indicators Current Last Week Fitch cuts Portugal credit rating, to review French & US rating Sensex 15,695 16,372 Fitch Ratings cut Portugal's sovereign credit rating to “BB plus” from “BBB minus”, Nifty 4,710 4,906 putting the country's rating in junk status. The rating carries a negative outlook, which Food Inflation 9.01% 10.63% means a further cut is possible. "The country's large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook mean the Exchange Rates sovereign's credit profile is no longer consistent with an investment-grade rating," Currency Current Last Week Fitch said in a news release. The ratings firm said recession will make the US$1 Rs.52.1665 Rs.51.3530 government's deficit-cutting plan more challenging and will hurt bank asset quality, € 1 Rs. 69.4263 Rs. 69.2589 but that the government's commitment to the plan was "strong." Regarding French JP¥ 100 Rs. 67.39 Rs. 66.80 rating, it said that its triple-A credit rating would be at risk if a further intensification of the euro-zone crisis resulted in a much sharper economic downturn in France and a £ 1 Rs. 80.6442 Rs. 80.9734 material increase in the risk of contingent liabilities. It also said that additional Global Economic and Corporate News consolidation measures are likely to be necessary for France to achieve its 3% of GDP • Chevron may face fine of $139 mn for Brazil deficit target by 2013, with Fitch projecting the deficit in 2013 to be around 4% of spill GDP. On the positive side, Fitch said that France's triple-A status is "underpinned by a U.S. oil major Chevron Corp. faces heavy fines in high-value added and diverse economy, broad and stable tax base and its Brazil after the company accepted responsibility for commitment to deficit reduction and stabilising, and eventually reducing, public debt." an oil spill at an offshore field, including the possible loss of a key license that allows Chevron to operate For US Ratings, it said that it would conclude a review of U.S. sovereign credit ratings in deep waters that potentially hold billions of barrels by the end of November, in light of the congressional supercommittee's failure to of crude, government officials told. reach a bipartisan deal to cut the federal debt. Fitch cited its previous statement in • Carlisle to sell PDT unit to Datwyler August that "failure by the supercommittee to reach agreement would likely result in a Carlisle Cos. said it will sell the profiles-and-frames unit of its German company, PDT Phoenix GmbH, to negative rating action, most likely a revision of the rating outlook to negative, which Switzerland's Datwyler Group, a deal that will allow would indicate a greater than 50% chance of a downgrade over a two-year horizon." It Carlisle to focus on its core European roofing-and- said a one-notch downgrade was possible but "less likely." waterproofing business. Indian Govt says FDI reforms in retail to help add 10 mn jobs in 3 years • Wal-Mart opens landmark 10,000th store worldwide The govt's decision to allow foreign direct investment in multi-brand retail is likely to Wal-Mart Stores Inc.'s opened its 10,000th store help create 10 mn jobs in the next three years. "My initial estimates are that it (the worldwide in central Mexico, as it speeds up its move) will create over 4 mn jobs in the country, and in logistics about 5-6 mn jobs in Mexican 2011 store expansion plan toward the end of the year. three years," Sharma told reporters at a press conference. The move to give more • AGR to sell a unit to Oceaneering for $236M access to foreign companies in the retail sector would not affect smaller retailers and Norwegian AGR Group announced the sale of its field farmers, he assured. The Union Cabinet approved allowing 51% FDI in multi-brand operations unit to Oceaneering AS, a wholly-owned retail, and raised FDI in single-brand retail to 100% from 51%. As per the new norms, subsidiary of applied technology firm Oceaneering multi-brand retailers will have to bring in a minimum FDI of $100 mn, and invest 50% International Inc., for 1.37 billion Norwegian krone ($236 million) on an enterprise value basis. of it on building back-end infrastructure. Expenditure on land cost and rentals will, • Weir Group buys Seaboard Holdings for $675M however, not be counted for the purposes of back-end infrastructure, the govt said. It Weir Group PLC, an industrial machinery firm, said it is also mandated that 30% of the procurement of manufactured products be sourced has bought oil and gas equipment manufacturer from small and medium enterprises that have a total investment of not more than $1 Seaboard Holdings Inc. for $675 million, funded from existing banking facilities. mn in plant and machinery. The govt said fresh agricultural produce should not be • Fiat starts to suspend production at Sicily plant branded. Multi-brand retail outlets that are seeking to enter the Indian market will Italy's Fiat SpA said it has initiated the gradual only be allowed to open up stores in cities with a population of more than 1 mn. suspension of production at its plant in Sicily, with RBI eases infra debt fund invest norms for non-resident investors the last car expected to roll off the line by the end of the month. The RBI eased the norms for investments by foreign institutional investors and non- • EU approves Philips buyout of Spain's Indal resident Indians into infrastructure debt funds. Non-resident investors can now invest The European Commission said it has cleared under in rupee and foreign currency denominated infrastructure bonds issued by non- the EU Merger Regulation the proposed acquisition of banking finance companies, the central bank said in a notification. They can also Industrias Derivadas del Aluminio SA, or Indal, of Spain by Philips of the Netherlands. invest in infrastructure-linked schemes of mutual funds. The first investment by the • ABB buying rail-infrastructure company non-resident investor must be in instruments that have minimum maturity of five Envitech years. All investments are subject to a lock-in period of three years, and non-resident Power and technology company ABB Ltd. said it investors can conduct any transactions in such instruments only among themselves. agreed to buy Canadian company Envitech Energy to expand its offerings in the electrical equipment Steroid of weak rupee to boost Indian drug cos' earnings sector for rail infrastructure. A weak rupee may put a spoke in wheels of several companies, but for Indian drug • Petrobras Argentina to put $800 mn in Santa makers it will act as a steroid, providing short-term gains to a sector that derives half Cruz of its revenue from overseas. For pharmaceutical companies that have hedged dollar Petrobras Argentina SA, the Argentine unit of Brazil's oil and gas company Petroleo Brasileiro SA, will receivables and huge foreign currency debt on books, however, the rupee's fall will be invest $800 million in the province of Santa Cruz in a sore point. It is positive to the extent that they are not hedged. It definitely is southern Argentina. The company will spend $200 positive for most of them. The extent to which the pharma companies will benefit from million a year over the next four years, according to a statement on the province's website. the weak rupee will depend on their exposure to the dollar, hedging, and foreign currency debt. India has a significant advantage in the global pharmaceuticals industry Nishita Shah Parsekar with one of the largest portfolio of generic drugs as well as largest number of US Food [email protected] and Drug Administration approved manufacturing sites outside US. Please refer to important disclosures at the end of the report For Private Circulation Only. Sushil Financial Services Private Limited Member : BSEL, SEBI Regn.No. INB/F010982338 | NSEIL, SEBI Regn.No.INB/F230607435. Office : 12, Homji Street, Fort, Mumbai 400 001. Phone: +91 22 40936000 Fax: +91 22 22665758 Email : [email protected] Info-Spectrum Bridging the Information Gap in Corporate Landscape INDEX 1. India’s Data Watch 03-05 2. Economy 06-13 3. Infrastructure 14-26 4. Sectors 27-60 A. IT & ITeS 27-29 B. Pharma & Healthcare 30-32 C. Telecom 33-36 D. Banking & Financial Services 37-41 E. Steel, Metals & Minels 42-46 F. Auto & Auto Ancillaries 47-49 G. Miscellaneous 50-60 5. IPO WATCH 61 6. Mergers & Accquisition 62 7. Ratings 63-64 8. Global Economy & Business 75-83 A. Global Economy 75-79 B. Global Business 80-83 Weekly Newsletter 2 Info-Spectrum Bridging the Information Gap in Corporate Landscape INDIA’S DATA WATCH Rupee falls below 52 per $1, at near 3-year low The Indian currency breached the psychological 52-per-dollar rate, a level that was last seen in Mar 2009. The rupee has depreciated nearly 15% so far in the current financial year and about 5% in Nov so far. The local currency has been falling as demand for the dollar has increased amid rising concerns over the European debt crisis. There are serious concerns over the rupee fall as it could add to the inflation due to rise in prices of imported goods. Consumer good companies have already started hiking product pricing by about 1% because of the rupee fall.