Tata Motors overtakes Hyundai as India's second-biggest car maker

Tata Motors has overtaken Hyundai as the country's second-biggest passenger vehicle maker in June, behind only Maruti Suzuki. As theNano: Celebrating one year on the road
Tata Indigo Manza
production of Nano started at Sanand in Gujarat, Tata Motors has been witnessing a bulge in numbers.

Auto companies reported robust sales numbers in June, backed by strong demand for new models and comfortable financing rates. The country's biggest carmaker Maruti Suzuki saw sales in the domestic market going up 18% year-on-year at 72812 units, though numbers were down on a sequential basis as demand for cars remains usually subdued in the monsoon months. The company said it was closed for 6 days in June for a planned maintenance shutdown of the facilities.

But the action was for the second spot as Tata Motors moved ahead of Hyundai in terms of sales. And as anticipated this edge was given by Nano. Helped by 7704 units sold by Nano in June, passenger vehicle volumes of Tata Motors were up 63% at 27811 units, a few hundred units more than Hyundai's 27366 units (up 19%). However, this is not the first time that Tata Motors has done this.

While numbers of a single month cannot be the final verdict on the ranking in the Indian passenger vehicle market, it is believed that Nano numbers could see Tata Motors score higher than Hyundai quite regularly.
Others who saw demand remain strong was General Motors and Ford, both of whom are going strong on the back of new small cars they have launched. GM's Beat compact and Ford's Figo have ensured that the companies have a strong tempo in the domestic market. Toyota and Mercedes were also among companies whose numbers remained strong in the month. Toyota, that is again opening bookings for its Fortuner SUV after clearing backlog, saw numbers going up 41.5% in June, while for Mercedes, the growth was a big 94%.
However, volumes were down for utility vehicle maker Mahindra & Mahindra as well as Honda. Mahindra's UV sales fell 4% in June and the company said it had an annual shutdown in the first week of June.
On the two-wheeler side, Hero Honda enjoyed a good ride as the company sold 4.26 lakh units at a growth of 17%. TVS, the third-biggest two-wheeler maker, saw domestic volumes up 33% at 1.39 lakh units.


Source: Economic Times

Posted by: Rishma Shetty

India's top 5 most valued business houses :

1.Reliance Industries Limited :

Mukesh Ambani-controlled Reliance Industries Ltd is at numero uno position with a total M-cap of Rs 3,57,902 crore at the end of June quarter. Reliance pack shares have been rising since the warring siblings called a truce on May 23.

The two Mukesh Ambani Group firms -- RIL and Reliance Industrial Infrastructure -- added around Rs 5,102 crore and Rs 256 crore to their M-caps, respectively.

2.Tata Group :



Tata Group ranks second and is valued around Rs 3.26 lakh crore at the end of June quarter. It fell three per cent as compared to about Rs 3.37 lakh crore in the March quarter.

The Tata Group companies listed on the stock exchanges include Tata Motors, Tata Steel and Tata Power.

3. Anil Dhirubhai Ambani Group :

Anil Dhirubhai Ambani Group's market valuation soared 14 per cent in June quarter, the most among India's top five business houses,making it the third most valued group in the country.

Anil Ambani-led Reliance ADAG's market capitalisation was at Rs 1,42,380 crore for the three-month period ended June 30, 2010, higher by about 14 per cent compared to March quarter.

The seven listed companies of the Anil Ambani Group, led by Reliance Power and RCom, made their investors wealthier by Rs 16,969 crore.

4. Sterlite (Vedanta) Group :

NRI Billionaire Anil Agarwal-led Sterlite (Vedanta) Group ranks fourth. The group's M-cap stands at Rs 131,522 crore, down 20 per cent as against Rs 164,490 crore of March quarter.

The June quarter was a turbulent period for metal sector and all the four listed firms of Sterlite group saw erosion in valuation.

Sterlite Industries lost 20 per cent, Hindustan Zinc 19 per cent and Sesa Goa 25 per cent.

5.Bharti Group :

Bharti Group ranks fifth though its valuation eroded by 16 per cent to Rs 99,970 crore.

Following the recent $10.7 billion deal, Bharti Airtel will now have a pan-African footprint, thanks to the Zain’s operations in 15 countries, and will remain be-hind only to a select telecom companies that includes China Mobile and Vodafone.

It could also gallop ahead of other giants such as China Unicom, Sweden’s Telia Sonera, and Germany’s Tmobile.

Source: Economictimes.indiatimes.com

Posted By : Mayur Naik

Diesel Price Hike - Rs. 3.14 Per Litre ??

Diesel prices will have to be hiked by another Rs 3.14 per litre if the government is to implement its decision to decontrol diesel rates, like it has done in the case of petrol.

When an Empowered Group of Ministers (EGoM) on June 25 decided to raise diesel price by Rs 2 per litre in preparation for an eventual freeing of rates from government control, the gap between domestic rates and the imported cost was over Rs 3.50 per litre.

The calculations done on June 25 were mostly based on the average international price in the first fortnight of June.

After the hike, the gap had narrowed to just Rs 1.50 a litre.

"Today, the under-recovery on diesel is Rs 3.14 per litre," B M Bansal, chairman of Indian Oil [ Get Quote ] said on Thursday.

This is because from today (Thursday), the rates are calculated on the basis of the average of the second fortnight of June, when global oil prices had firmed up.

Bansal said the under-recovery on kerosene is Rs 15.60 per litre, while it is Rs 201.80 per 14.2-kg LPG cylinder.

IOC, Bharat Petroleum and Hindustan Petroleum were projected to lose around Rs 53,000 crore (Rs 530 billion) on selling fuel below cost this fiscal after the EGoM decision to free petrol price led to a Rs 3.50 a litre hike in the rates in Delhi  an Rs 2 per litre increase in diesel prices, an Rs 3 per litre rise in kerosene rates and a Rs 35 per cylinder increase in the cost of LPG.

But the industry is now projected to lose Rs 57,700 crore (Rs 577 billion) this fiscal on selling diesel, LPG and kerosene below cost, with IOC alone projected to lose Rs 32,250 crore (Rs 322.5 billion) in 2010-11.

Oil secretary S Sundareshan said the government had not decided to limit the subsidy on diesel to Rs 1.50 per litre and pass on the remaining required hike to the consumers.

"The decision of the EGoM is that diesel price will be market-determined. As of now the price has been raised by Rs 2 per litre. We are following that," he said.

The actual decontrol will happen in "future", he said, without giving a timeline.

The talks of limiting subsidy on diesel to Rs 1.50 per litre was a "personal opinion" of Chief Economic Advisor Kaushik Basu, he said.

Markets Today - 1/7/2010 - Disclaimer Post Applies

Implications: Higher put writing at lower levels than calls indicates strong support at lower levels especially at 5,200. However, on other hand, major call writing at higher levels indicates less upside. So, we believe markets to trade in a narrow range where the upside is capped at 5,400 and 5,200 maintaining a strong support on account of concentration for near term and 5,000 at lower end for July series. The strategy a trader can adopt is to sell 5,400 CE and 5,000 PE and hold till expiry.

Option Analysis

·         Call Writing: Fresh addition of open interest at higher levels indicates upside being capped. In today trading session, major activity was observed at 5,300 strike price which added 6.65 lakh shares. Concentration observed at 5,500 of 71 lakh shares.

·         Put Writing: Major activity was observed at lower strike prices with majority at 4,700 strike prices adding open interest of 5.46 lakh shares. Major concentration of open interest is observed at 5,200 strike price of 83.39 lakh shares.

Implications: Strong put writing at lower levels and call writing at higher levels indicates market to trade in a narrow range for next few trading sessions. We believe market to trade in range of 5,300 and 5,200 for intermediate term.

FIIs and DIIs activity in capital market segment

·         FIIs were net sellers of Rs 160 crore with Gross buyers of Rs 1,549 crore and Gross Sellers of Rs 1,709 crore.

·         DIIs were net sellers of Rs 7 crore with Gross buyers of Rs 1,153 crore and Gross sellers of Rs 1,160 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 1^st July, 2010 close at 21.44 which is 6.83% lower as compared to previous close, after touching an intraday high of 22.10 and low of 20.93.

Implications: Indian VIX as expected is moving upwards from its support. We are “Bullish” on the same and expect it to move up to 30 odd levels which would have a negative impact on Nifty.

Factors impacting Liquidity, interest rates and Bond Portfolios in the Financial Markets

The article is to educate investors about the factors which influence debt security prices and based on market developments which debt products can be looked at for investments.

Debt is an important asset class where a mutual fund invests. There are pure debt oriented schemes, blended schemes-which have blend of both debt and equity in the portfolio, which have allocation of money to debt as an asset class. It becomes important for the investors to know which factors influence NAV( Net Asset Value) movement of debt schemes, so that they take informed decisions. Bond prices move in the opposite direction of change in domestic interest rates. Rising interest rates cause the bond prices to fall. Longer maturity bonds see sharper declines in price compared to short maturity bonds. Debt as an asset class is influenced by the liquidity in the financial markets.

Liquidity keeps on changing due to changes in following factors:-

• Inflation

• Money Supply

• Foreign Exchange Markets

• RBI Policies

• Credit Demand

• Government Borrowings

Due to changes in all the factors mentioned above, the interest rates change (When there is ample liquidity, interest rates go down and vice versa). When interest rates change, bond prices change which influence the Bond Fund Performance.

Bond prices get influenced by mainly 5 forces:-

• Inflation and Bond Prices

Inflation is the other factor that can affect the bond prices. Interest rates on bonds are supposed to be little higher than inflation. Hence, if the inflation moves up, the real rate of return one gets is not sufficient to even beat inflation. In such a scenario, interest rates move up, bond yields too move up and as a result of this, bond prices are likely to move down.

Inflation gets impacted by various factors like:-

• Money supply & Bond Prices

Money Supply can be measured at various levels. The most popular indicator of money supply is the M3 (also called broad money), which includes currency with the public, other deposits with RBI, demand deposits and time deposits. The growth in money supply increases the availability of money, thus increasing inflation. Excess money supply leads to fall in the interest rates. This sometimes, leads to overheating in certain sectors which get access to cheap money from banks, leading to increase in inflation. RBI however, checks the money supply through policy measures like increase in CRR (Cash Reserve Ratio) or SLR (Statutory Liquidity Ratio) requirements for the banks. These measures drain liquidity and over a period of time, help anchor inflation.

Consumer spending is important for a vibrant economy. However, if the spending rate is too high, it leads to higher levels of borrowings, increasing the money supply and thus pushing inflation upwards. This also can be checked through monetary measures like changes in CRR (Cash Reserve Ratio), SLR (Statutory Liquidity Ratio) or change in the policy rates. At the same time, if the consumer spending slows down, the growth suffers. Government, in such cases steps in with tax cuts, thus putting more money in the hands of people, expecting the spending to go up. A combination of the capacity build-up and the productivity levels together influence inflation. Over capacity and high productivity together would make more good available thus, keeping prices low. The reverse of this will put upward pressure on inflation.

• Demand and Supply Factors

The cost of money is the interest rate. Thus, the demand – supply equation is one of the major factors affecting the interest rates. The demand for money pushes up the interest rates and supply brings it down. Demand for money would be influenced by industrial activity, Government borrowing, capital investments and cross-border trade. Supply of money would be influenced by foreign exchange inflows in form of portfolio investments or FDI, Government borrowings, household savings, Reserve Bank’s monetary policy through monetary measures and industrial productivity.

• Foreign Exchange Rates and Debt Prices

The foreign exchange rates get influenced by inflation in key countries as compared to India, structural imbalances across various geographies, money supply within and outside the economy. The exchange rate, domestic interest rates and inflation are considered to be interlinked. World stock market position has the potential to rapidly change the direction of portfolio investments, which inevitably puts pressure on the exchange rates. Finally India, being net importer of oil, is highly vulnerable to the changes in petroleum prices. Commodity price movement in international markets also affect inflation in India as some manufactured items in India, also procure raw material from outside , the prices of which is governed in international markets. If input prices go up, the end product prices also go up in the market causing inflation to go up on one hand and high import bill on the other hand. Costlier imports lead to increase in trade deficit, which widens fiscal deficit. Higher fiscal deficit leads to increased government borrowings and this leads to increase in interest rates and fall in bond prices as the two are inversely related.

• Government Borrowings and Debt Prices

This is directly related to Fiscal position of the government. If the expenditure of government goes up and its revenues dip, fiscal deficit widens.

This deficit is funded by the government by borrowings in the debt market. If the borrowing increases, excess supply of government bonds leads to fall in the prices of the bonds , which leads to increase in yields. Approximately 85% of the borrowings in debt markets is by Central Government & State governments put together and therefore how much government borrows from the debt market every week, starting from April of the financial year through to March of the next year, influences debt prices as liquidity gets absorbed due to high borrowing which leads to interest rates going up.

• Credit Growth

If credit growth picks up, industrial activity picks up and that results in higher growth numbers. This however, is dependent on the rates at which banking sector funds Industry, Agriculture and Services Sector. This , in turn is subject to availability of liquidity with banks. If liquidity is high, interest rates go down and funding of projects happen at low rates. Cost of funds go down and industrial activities pick up, which lead to employment generation, more income in the hands of consumers and increased spending by them.

In the present scenario, interest rates have an upward bias, due to change in liquidity position in the markets due to above factors. In such a scenario, the investors can look at parking their investments in low volatility debt portfolios. In these portfolios, the funds deploy money in short term debt papers , which currently offer better accruals and make the portfolio a low volatility portfolio. Liquid Funds, Ultra short funds and Short Term Plans make good investment avenue for risk averse investors who wish to park monies for short term investment horizon. Please also consult your financial planner to suggest good funds in these categories to you.

Source: ICICI Mutual Fund.

IPO of Hindustan Media Ventures Limited

IPO Details :

• Issue Size : Rs. 270 Crs

• QIB Category : 60% of issue size

• Retail Category : 30% of issue size

• HNI Category : 10% of issue size

• Issue Period : 5th July 2010 to 7th July 2010

• Price Band : Rs. 162/- to Rs. 175/-

• Lot Size : 40 Equity Shares and in multiples of 40 Equity Shares

• BRLM : Edelweiss Capital Ltd/Kotak Mahindra Capital Co Ltd

• Syndicate Member : Edelweiss Securities/Kotak Securities

• Registrar : Karvy Computershare Private Limited

A glance at the Bank Base Rate -

Launch of latest Equity Fund - "Canara Robeco Large Cap+ Fund"

Canara Robeco Large Cap+ Fund aims at providing capital appreciation by predominantly investing in companies having a large market capitalization. Large Cap Companies are referred to as the Top 150 companies in terms of market capitalization. The Scheme provides the following advantages in a single portfolio -

India Advantage - Benefit from growth in one of the fastest growing economies in the world which would create further investment opprotunities going forward

Large Cap Advantage - Benefit from Large Caps which are proxies to the Economy and represent the characteristics of LEADERS

Canara Robeco Advantage - Benefit from the power of true bottom-up stock picking and attain exposure to the best-in-class stocks in a single portfolio

Quant Advantage - Benefit from the globally renowned Quantitative Model which acts as an Idea Generator towards portfolio creation.

NFO Opens on 28th June, 2010 and Closes on 27th July, 2010.

Posted by : Mayur Naik

TRAI issues recommendations for FDI in broadcasting sector

Media companies shot up on Wednesday as the Telecom Regulatory Authority of India (TRAI) came out with to the information and broadcasting ministry on foreign investment caps in the broadcasting sector. TRAI has recommended that foreign investment in broadcast carriage services such as DTH, IPTV, HITS and MSOs should be hiked to 74% and in local cable operators (LCOs) by 26%. The key beneficiary of this would be DTH players such as Dish TV as their current foreign direct investment (FDI) cap is 49%.

TRAI has also recommended 26% foreign investment in radio companies versus the current 20%, with companies such as ENIL and Reliance Media World benefiting the most.

News and current affairs foreign investment cap is recommended at 26% with no restriction on uplinking and downlinking of TV channels except for news. All foreign investment less than 26% will be via the automatic route with above 26% will require prior approval from the government.

Source:Moneycontrol.com
Posted by:Kartik Gala

Markets Today - 30/6/2010 - Disclaimer Post Applies

In Yesterday trading sessions, after a weak put writing for consecutive two trading sessions, we have observed higher put writing than call writing at lower levels. More than ~8 lakh shares were added in put option strike prices between 5,000 to 5,300 indicates market bottoming out at lower levels or creating strong support at lower levels. However, on other hand, major call writing at higher levels like 5,300 and 5,400 indicates less upside from current levels. So, we believe market would be trading in a narrow range of 5,200 and 5,400 for near term and 5,000 at lower end for July series. The strategy a traders can adopt is to sell 5,400 CE and 5,000 PE and hold till expiry.

Option Analysis

·         Call Writing: Major activity was observed at 5,400 strike price which added 4.64 lakh shares and 5,200 strike price which added 4.66 lakh shares. Major concentration can be observed at 5,500 & 5,400 where the combined outstanding total open interest is 1.34 crore shares.

·         Put Writing: On the other hand, major writing was observed at lower levels. More than ~8 lakh shares were added between 5,200 and 5,000 strike prices each. Major concentration was observed at 5,200 strike price of 8.29 lakh shares indicating strong support at 5,200.

Implications: More of put writing than call at lower levels indicates Nifty to take strong support at every lower level and more of call writing than puts at higher strike indicates Nifty would face resistance at every higher level. Thus, we expect 5,200 to act as a major support and below that 4,800 whereas upside may be capped to 5,300 and above that 5,400.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 589 crore with Gross buyers of Rs 3,243 crore and Gross Sellers of Rs 2,653 crore.

·         DIIs were net sellers of Rs 151 crore with Gross buyers of Rs 1,422 crore and Gross sellers of Rs 1,573 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 30^th June, 2010 close at 20.07 which is 2.76% lower as compared to previous close, after touching an intraday high of 21.78 and low of 20.03.

Implications: Indian VIX is trading at its support. We expect it to move up and are “Bullish” on the same.