Dow Jones crashes 314 points, Nasdaq 60

Big News Network.com Friday 29th February, 2008

Bulls were on their pants as Wall Street Friday as bears remained firmly in control of equity markets. The relentless fall in the U.S. dollar, and lingering fears of a recession, was the talk of the town. Sellers sent the Dow Jones Industrials down 314.32 points or 2.50% by the close of trading to 12,267.86. The Nasdaq Composite shed 60.09 points or 2.58% to 2,271.48. The Standard and Poor's 500 lost 37.05 points or 2.71% to 1,330.63. The National Association of Purchasing Managers-Chicago reported its index of regional business conditions fell to 44.5, its lowest reading in more than six years, from 51.5 in January. "It looks like there's been a reversal of fortune for the manufacturing sector from last month and the economy appears to have fallen off a cliff," Chris Rupkey, senior financial economist, Bank of Tokyo/Mitsubishi, New York, in referring to the Chicago PMI report, told Reuters newsagency. "This is just the latest piece of evidence that the U.S. economy is teetering on the edge of recession," he said. The dollar on Friday hit new record lows against the euro and Swiss franc, and dived to a three-year low against the Japanese yen.

Market Commentary

The barometer index BSE Sensex ended flat ahead of presentation of Union Budget 2008-09 by the Finance Minister P Chidambaram in Parliament. However, Nifty recorded gains against a flat closing for Sensex. Normally, the rise or fall in Sensex in a day is about three times that of Nifty.

The market had recovered from lower level in early afternoon trade after the finance ministry tabled Economic Survey - a report card on the economy during this fiscal in partliament at about 12:00 IST, the recovery was short lived. Derivatives contracts for February 2008 series expired today, 28 February 2008.

Auto, metal, healthcare stocks rose. Realty stocks fell. Reliance Industries slipped. The market breadth was weak. European markets which opened after Indian market were subdued in early trade. Asian markets, which opened before Indian market, were mixed.

Market News-28/02/2008

Supreme Court comes to UP Sugar mills rescue

Supreme Court has passed an interim order fixing the cane price for Sugar Season (SS) 06-07 at Rs 123 / quintal for early maturing variety and Rs 118 / quintal for late maturing variety. The same stood at Rs 130 / quintal and Rs 125 / quintal as per the SAP declared by the UP state government earlier. The Supreme Court had indicated that the sugarcane dues, based on the above prices, have to be paid by the mills within six weeks.
This news is negative for Bajaj Hindustan, which had accounted for cane cost at ~Rs89 /
quintal (based on SMP). Assuming cane cost at ~Rs120 / quintal and 12.6 million tonne of
cane crushing in SS 06-07, Bajaj Hindustan will have to account for a write off of Rs 39
crore as per the higher cane costs. However, the order will have a positive financial
impact on companies like Balrampur Chini Mills (BCML), Triveni Engg, Dwarikesh, etc,
which had accounted for cane cost at SAP rate of Rs125 / quintal. BCML, which crushed
9.2 million tonne in SS 06-07 will be able to write back ~Rs 46.2 crore (9.2 X Rs
50/tonne).

Impact of revised cane prices on UP Based Sugar Companies
Company Name Cane Crushed in SS 06-07 Net Benefit (Rs crore)
(million tonne) (@ Rs120 / quintal)
Bajaj Hindustan* 12.6 -39.0
Balrampur Chini* 9.2 46.2
Triveni Eng. 6.3 31.6
Simbholi Sugars 2.5 12.3
Dwarikesh 1.7 8.6
* on standalone basis

BGR Energy bags BOP contract worth Rs 793 crore from APGENCO
BGR Energy Systems has won a BOP contract worth Rs 793 crore from the Andhra Pradesh Power Generation Corporation for a 500-MW coal-based project in Kothagudam. This order was at a bidding stage when the company came out with its initial public offering. With this, BGR Energy has four BOP projects in its portfolio taking the total order book to Rs 3,715 crore.
Two unique strategies of BGR Energy in its BOP contracts — backward integration and direct bids to generation companies — provide it an edge over others in the business. BOP contracts not only involve providing services but also supplying materials. Of the products required to execute a BOP contract, BGR can manufacture up to 40-50 per cent in-house, given its backward integration. Such in-house production facilitates cost reduction.


Alfa Laval consolidates gains

Alfa Laval is a leading global provider of specialized products and engineering solutions based on its key technologies in heat transfer, separation and fluid handling. The Sweden based group’s listed 76.7% Indian subsidiary Alfa Laval (India) reported 112% surge in net profit to Rs 23.5 crore on 25% rise in net sales to Rs 203.1 crore in the quarter ended December 2007.
The company’s margins have improved for the second year in succession from 16.7% in Calendar Year 2005 to 17.3% in 2006, which has further hardened to 18.1% in 2007. But on a sequential basis, its margins have eased by 50 basis points from 18.1% in the quarter ended September 2007 to 17.6% in the quarter ended December 2007. It has maintained dividend at 250% for the fifth year in succession (including interim dividend of 100% paid in November 2007) since 2003 to 2007.

Market Commentary -26/12/2008

he market firmed up in mid-afternoon trade after Rail Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget which he presented to parliament today. The market had opened on a firm note today tracking steady to firm trend in Asian stocks. Metal, capital goods, banking, realty and power stocks rose.

The market breadth was strong. Mid-cap and small-cap indices outperformed Sensex. 21 stocks from 30-member Sensex pack were in the green.

Railway Minister Lalu Prasad today announced a cut in freight rates by 5% on petrol and diesel in the Railway Budget for 2008/09. He also announced a reduction of 5% in fares for second class sleeper-class passengers. Yadav cut the fare of air conditioned (AC) I-tier by 7%, AC II-tier by 4%, and AC III-tier by 3%. The Indian railways will offer discounts on charges for freight booked during lean seasons Yadav told parliament in his budget speech

The Railway Minister said Indian Railways will report a cash surplus of Rs 25,000 crore in FY 2008-09. Railways will invest Rs 75,000 crore to upgrade infrastructure over the next seven years and also to start making steel coaches from FY 2009 and introduce them from FY 2010. There will be no peak season surcharge on cement transport.

Daily Coorporate News-26/02/2008

L&T to set up power equipment manufacturing plant in Hazira

Larsen & Toubro has zeroed in on Hazira, Gujarat, to set up its Rs 1,500-crore power equipment manufacturing plant. The engineering major would make turbines and boilers at the Hazira plant, For this purpose, it has floated two companies, L&T Turbines and L&T Boilers. Last year, L&T had signed a joint venture agreement with Japan's Mitsubishi Heavy Industries for setting up a manufacturing facility for super-critical boilers, super steam turbine and generator.

W.S. Ind Vizag plant to go on stream by June 08

The second plant of the Chennai-based W.S. Industries Ltd (WSIL), coming up in the multi-product special economic zone in Visakhapatnam at a cost of Rs 107 crore, will be production-ready by June. The plant will add 10,000 tonnes to W.S. Industries’ present capacity of 16,000 tonnes. The company will then be among the world’s top 10
manufacturers of insulators for power transmission

: Market Commentary - 25/12/2008

The key benchmark indices, which opened with a positive gap but soon turned weak amid high volatility in eary trade, bounced back strongly in afternoon trade on account of sustained buying in oil & gas and information technology stocks.

Market breadth was weak. Cement pivotals spurted. Oil & Gas, IT stocks rose. Consumer durables stocks declined. The market breadth was weak. 25 stocks from 30-member Sensex pack were in the green.

Daily News-25/02/2008

R-Power sets bonus at 3:5

Anil Ambani’s Reliance Power (R-Power) will offer three bonus shares for every five held in order to reduce the cost of acquisition for investors who had bought at the time of its record Rs 12,000-crore IPO. The bonus shares will be issued to all shareholders, except the promoter groups, Reliance Energy (REL) and Anil Ambani’s personal investment vehicles. Mr Ambani also announced that he will transfer 2.6% of his personal stake in R-Power worth Rs 4,700 crore to REL in order to compensate the company for the dilution of its stake in R-Power. The move is to ensure that REL’s shareholding remains unchanged at 45% in R-Power even though it has declined to accept the bonus issue.The dual move is expected to reduce the cost of acquisition of R-Power stock substantially — 40% for retail shareholders to Rs 269 per share and 37% to Rs 281 for others. It will also bring down Mr Ambani’s shareholding in R-Power by 5% to 40%.

BHEL, NPCIL plan JV for nuclear power plants

Power equipment major Bharat Heavy Electricals Ltd (BHEL) and Nuclear Power Corporation of India (NPCIL) are planning to float a joint venture to take up construction activities for nuclear power plants. The plan is to have a special company for undertaking equipment, procurement and construction (EPC) business for power plants. However details of the new company’s operations have not been finalised. At present, NPCIL generates about 3,900 MW of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 MW over the next six years. NPCIL plans to add 2,660 MW over the next two years, taking the total number of reactors to 23 with a capacity of 7,280 MW.

Microsoft email prepares workers for Yahoo takeover

TOI Monday 25th February, 2008
SAN FRANCISCO: A Microsoft executive on Friday sent workers an upbeat email outlining a vision of how the software giant expects to take over Yahoo and merge the companies’ cultures and resources.

Yahoo spurned Microsoft’s $44.6-billion bid for the veteran internet firm on February 11. Microsoft is reportedly planning a hostile takeover bid if Yahoo’s board of directors doesn’t change its mind. In a message to employees, Microsoft platform and services division president Kevin Johnson shared “a perspective of the process going forward.” “We look forward to a constructive dialogue with Yahoo’s board, management, shareholders, and employees on the value of this combination and its strategic and financial merits,” Johnson wrote.

“Once Yahoo and Microsoft agree on a transaction, we can begin the integration planning process in parallel with the regulatory review.” If Yahoo capitulates, the transaction would likely close in the second half of this year, according to Johnson