HCL Infosystems spurts on overseas acquisition

HCL Infosystems jumped 5.36% to Rs 118.90 at 09:06 IST on BSE after the company acquired a 60% stake in NTS Group, a leading IT services and solutions provider based in Dubai, involving an investment of about $6.5 million.

The announcement was made after market hours on Thursday, 8 July 2010.

Meanwhile, the BSE Sensex was up 140.02 points, or 0.79%, to 17,791.75

On BSE, 73,361 shares were traded in the counter as against an average daily volume of 72,835 shares in the past one quarter.

The stock hit a high of Rs 121.80 and a low of Rs 115.90 so far during the day. The stock had hit a 52-week high of Rs 188.80 on 22 October 2009 and a 52-week low of Rs 98 on 13 July 2009.

The stock had underperformed the market over the past one month till 8 July 2010, rising 3.44% compared with the Sensex's 6.23% rise. It underperformed the market in past one quarter, falling 14.34% as against 0.35% fall in the Sensex.

The mid-cap firm has an equity capital of Rs 43.63 crore. Face value per share is Rs 2

Following the acquisition of NTS Group, HCL Infosystems will be able to expand its presence in the Middle East and African markets to address system and service integration needs in the regions. NTS Group offers solutions in hardware, enterprise software, infrastructure and networking, e-security and web development.

HCL Infosystems' net profit rose 16.10% to Rs 66.76 crore on 7.10% decline in net sales to Rs 2793.83 crore in Q3 March 2010 over Q2 December 2009.

Source http://beta.profit.ndtv.com/news/show/hcl-infosystems-spurts-on-overseas-acquisition-81619

Read more at: http://beta.profit.ndtv.com/news/show/hcl-infosystems-spurts-on-overseas-acquisition-81619?cp

Sensex loses 143 points

The markets ended the day lower with all key benchmark indices including mid-cap, small-cap and the broad-based BSE-500 closing in the red.

Oil and gas (1.7%), metals (1.2%) and banking (1%) were the biggest losers among sectoral indices. IT stocks closed marginally higher and the BSE consumer durables index stayed in the green.

Sensex closed at 17,471.03, down 143.4 points or 0.8% while the Nifty ended at 5,241.1, down 47.95 points or 0.9%. While sensex and the Nifty opened marginally higher, they soon slipped amidst subdued global cues.

Source http://timesofindia.indiatimes.com/biz/india-business/-Sensex-loses-143-points/articleshow/6141181.cms

Corporate tax collections rise 21.7% in Q1

The government’s corporate tax collections grew a strong 21.7% in the first quarter of the current fiscal, confirming that economic recovery was beginning to translate into better profits for companies.

The Sensex was up 1% on the expectation of improved corporate performance.

Overall direct tax collections were up 15% to Rs 68,675 crore in the April-June quarter, data released by the finance ministry on Tuesday showed. India’s manufacturing had grown a strong 19.4% in April, suggesting a strong industrial recovery.

Corporate tax collections for the quarter added up to Rs 43,439 crore while personal income tax grew marginally by 1.24% to Rs 24,075 crore.

However, part of the buoyancy in direct tax collections was due to the base effect. Hit by the slowdown , corporate tax collections had grown only 3.3% in the first quarter of last fiscal while personal income tax had grown 4.4%.

The government has budgeted an overall tax mop-up of Rs 7.46 lakh crore during this fiscal, out of which Rs 4.3 lakh is to be realised from direct taxes, an increase of 13% over the amount realised last year.

The robust tax collection will help the government prune its fiscal deficit even more. It is already sitting on a Rs 65,000 crore excess windfall from 3G and broadband auction.

The fiscal deficit for current year is pegged at 5.5% of GDP. Better then budgeted realisation will help reduce government borrowing, leaving more funds for the private borrowers.

However, the realisation from the securities transaction tax (STT) declined to Rs 1,094 crore, from Rs 1,462 crore in the first quarter of previous fiscal reflecting possibly lower volumes because of the volatility in the stock market.

Advance tax collection in the first quarter was up by 31.4% to Rs 26,876 crore as against Rs 20,456 crore in the same period last fiscal.

Source http://economictimes.indiatimes.com/news/economy/finance/Corporate-tax-collections-rise-217-in-Q1/articleshow/6137144.cms

Shell-shocked investors dump RNRL

In a mega Rs 50,000-crore deal, Anil Ambani group announced merger of RNRL with Reliance Power.

Traders and investors in Reliance Natural Resources, or RNRL, watched in dismay on Monday as more than a fourth of the company’s market capitalisation was wiped out in what is being seen as a strong response to an unfavourable share-swap ratio with group firm Reliance Power.

The stock crashed 27% to close at Rs 46.40 as investors reacted to Sunday’s announcement that shareholders of RNRL would get one share in Reliance Power, also controlled by billionaire Anil Ambani, for every four shares they hold in the natural gas supplier. Most RNRL shareholders and analysts had counted on a swap ratio of one share of Reliance Power for every three they held in RNRL.

RNRL’s fall on Monday figures high in the list of stocks that have been pummelled the most in a single trading session. Realty firm Unitech is perched on top with its stock having slid 51% in October 2008 followed by Chennai-based pharma company Orchid, which slumped 39%.

Brokers say the stock could be under further pressure in the near term as many traders have heavily short sold the July futures. In short selling, an investor or trader sells a stock he does not own, betting on buying it later when the price slides.

Interestingly, the outstanding positions in RNRL July futures declined 7% while the futures closed at a premium of Rs 0.15 to the spot price. According to market participants, this indicates that many traders had squared off their short positions by purchasing the falling futures. They added these traders would have short sold the futures last week, in anticipation of an unfavourable merger ratio.

'RNRL shareholders stand to gain'

These traders are upset at what they reckon is an attempt by promoters to place their interests ahead of minority shareholders. Promoters control close to 85% in Reliance Power, and about 55% in RNRL.

Reliance Power CEO JP Chalasani told television channels that RNRL shareholders would benefit in the long run because of their exposure to the generation portfolio of R-Power.

At the end of March 31, 2010, there were a little over 25 lakh individual shareholders in RNRL while Reliance Power had close to 35 lakh individual shareholders. In FY10, Reliance Power had a book value of Rs 58.69, and RNRL Rs 11.47. A merger based on book value would have thrown up a swap ratio of 1: 5.

Some market participants say the ratio is not unfair, considering parameters such as book value and business fundamentals.

“If the promoters had strictly gone by book value, RNRL shareholders would have suffered further. Besides RNRL’s existence had been undermined by the recent court (Supreme Court) verdict,” said a BSE broker. What he meant was that after the Supreme Court ruled that the government had the last word in the pricing and distribution of natural gas, RNRL had little reason to exist in its present form. However, veteran brokers on Dalal Street say the merger ratio would have been influenced by minority shareholding in the respective companies.

Source http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/Shell-shocked-investors-dump-RNRL/articleshow/6133048.cms

RBI seen lifting rates at modest pace: DBS

The Reserve Bank of India is seen lifting its key rates at a modest pace to contain inflationary pressures, with another 25 basis point rate increase seen in the July-September quarter, DBS said in a note on Monday.

The Reserve Bank raised interest rates almost a month earlier than expected on Friday, and analysts said it would likely follow up the quarter point hike with another move on July 27, given concerns about inflation above 10%.

"The uncertainties arising from European debt worries and the declining year-on-year inflation prints should keep the central bank from normalizing rates more swiftly," DBS said.

DBS sees one more 25 basis points hike in the repo rate in the July-September quarter with a slightly over 50% chance that it comes in the policy meeting on July 27.

This is expected to be followed by a 50 basis points hikes in the October-December quarter and a 25 basis points hike in the January-March quarter, it added.

DBS expects the corridor between the repo and reverse repo rates to be maintained at 150 basis points and hence both the rates are expected to be lifted in tandem.

"Only short-term OIS rates and gilt yields are likely to rise. Longer-term OIS rates and gilt yields should not increase much, given that the INR yield curves already are extremely steep and all is priced in," DBS said.

Although bond yields and OIS rates are seen under upward pressure, a sharp increase was unlikely as a rate action from the central bank was expected, it added.

Source http://www.moneycontrol.com/news/business/rbi-seen-lifting-rates-at-modest-pace-dbs_467919.html

Srinagar under curfew ahead of proposed march

Sensing trouble ahead of a proposed march by separatists, authorities today brought the entire Srinagar district under curfew even as they gave no relaxation in curfew-hit areas of south Kashmir.

With overnight protests in the city and an abortive attempt by activists of a woman separatist outfit to take out a march to Pather Masjid in defiance of curfew yesterday, District Magistrate, Srinagar, Mehraj Ahmad Kakroo announced imposition of curfew in the entire Srinagar district this morning in a television address.

Curfew was imposed in seven police station areas of old city on June 28 following violent protests over the killing of youths in alleged firing by security forces.

The step to extend curfew was taken ahead of the separatists' plan to organise a march to Eidgah martyrs' graveyard, police said.

Source http://www.ptinews.com/news/758570_Srinagar-under-curfew-ahead-of-proposed-march-

Rupee off 3-week low, seen weak rest of trade

The Indian rupee was off a three-week low touched in early trade on Thursday, on the back of some exporter dollar sales, dealers said.

At 1:05 pm, the partially convertible rupee was at 46.68/69 per dollar, after hitting 46.78/79 – its weakest since June 11 – and compared with 46.45/46 at close on Wednesday.

There was some exporter selling at the low levels, but with stocks being weak and euro also falling against dollar, on net basis rupee is seen weakening further in the day, dealers said.

Indian shares got off to a shaky start to the new quarter, falling 1.1 per cent on Thursday as doubts resurfaced about the global economic recovery and a slower manufacturing growth at home.

The euro hit a lifetime low against the Swiss franc on Thursday, as weaker-then-expected Chinese data added to doubts about the strength of the global recovery, while jitters about funding strains in the euro zone lingered.

The index of the dollar against six major currencies was up 0.2 per cent and would be watched, dealers said.

Downside of the rupee is seen at 46.80 per dollar as exporters may find it a good level to sell, dealers said.

One-month offshore NDF contracts were quoted at 46.83/93, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 46.83.

Source http://economictimes.indiatimes.com/markets/forex/Rupee-off-3-week-low-seen-weak-rest-of-trade/articleshow/6114471.cms