Wednesday, 12 November 2008

Oil hits 20-month low, price falls below $58

The move extended a fall of 5% on Tuesday when US light crude oil futures closed below $60 for the first time since March 2007

Oil prices fell on Wednesday to below $58 (Rs2,830) a barrel as expectations of weaker energy demand more than offset news of reductions in supply.
The move extended a fall of 5% on Tuesday when US light crude oil futures closed below $60 for the first time since March 2007.

News that the Organization of the Petroleum Exporting Countries (Opec) may cut supplies by an additional one million barrels per day (mbpd) when it meets in Algeria next month did little to prevent the downward spiral that has knocked 60% off oil’s value from a record high of more than $147 in mid-July.

Crude oil for December delivery fell as much as $1.63, or 2.8%, to $57.70 a barrel in electronic trading on the New York Mercantile Exchange. In the previous session, the market settled down $3.08 at $59.33 a barrel, its lowest settlement in 20 months.

London Brent crude was at $55.38, down 33 cents, at 12.23pm London time.

“It’s bearish news all around. I expect the IEA (International Energy Agency) to further revise down the energy demand forecasts,” said Tobias Merath, head of commodities research at Credit Suisse. “Even the new set of industrial production numbers due from China and Japan this week should be having a bearish undertone.”
China’s industrial production growth slowed to about 8% in the year to October, the first time it has been in single digits since the end of 2001, an official familiar with the data said earlier this week. The official data is due on Thursday.

The World Bank has slashed its 2009 forecast for developing countries and has offered new financing of more than $100 billion over the next three years to help cope with the financial crisis. It revised downward its growth forecast for developing economies to 4.5% for next year, from 6.4% projected in June, on a combination of financial turmoil, slower exports and weaker commodity prices.
Opec agreed last month to cut production by 1.5 mbpd from 1 November after the sharp fall in oil prices. But Qatar, one of Opec’s smallest members, has told at least two term buyers in Asia that it would not cut its crude oil supplies to them for November and December, people close to the lifters said on Wednesday.

This came even after energy minister Abdullah al-Attiyah told Reuters last week that Qatar had cut crude oil exports to Asia by about 40,000 bpd from this month in line with the Opec agreement.

US weekly inventory data was expected to show an 800,000-barrel rise in crude stocks last week as demand continues to slow, a Reuters poll of analysts found.

Pakistan raises interest rates as it reaches out to IMF

Joins Iceland and Ukraine, in contrast with others that have lowered rates to stave off global recession

Pakistan’s central bank increased its benchmark interest rate by 2 percentage points on Wednesday, the most in more than a decade, as the government seeks a loan from the International Monetary Fund (IMF) to avoid defaulting on its debt.

The State Bank of Pakistan raised the discount rate at which it lends to commercial banks to 15%, governor Shamshad Akhtar said in Karachi. The increase was part of conditions for an IMF loan, said Ahsan Iqbal, a spokesman for the Pakistan Muslim League-Nawaz party and former deputy chairman of the finance ministry’s planning commission. “It was the toughest decision of my life,” Akhtar said. “The IMF programme will be good for Pakistan as we need to be disciplined.”

Pakistan has been forced to seek funds from IMF after its foreign reserves shrank to $3.5 billion (Rs17,080 crore) as of 1 November from $14.2 billion a year ago, raising concerns the country will not be able to pay the $3 billion in debt-servicing costs due in the next 12 months. Higher borrowing costs may also tame inflation, which accelerated to near a three-decade high in October.

“It seems to be part of IMF conditionality though the central bank will argue that higher inflation and a rising trade gap were the reasons for the increase,” said Farhan Rizvi, an economist at JS Global Capital Ltd in Karachi.

Pakistan’s rupee rose 0.03% to 80.525 per dollar. Consumer prices in Pakistan jumped 25% in October from a year earlier. The central bank is aiming to keep average inflation at 12% in the fiscal year that started 1 July.

Pakistan joins Iceland and Ukraine in raising interest rates in order to receive an IMF bailout. That’s in contrast with the actions of central banks in the US, Europe and elsewhere in Asia, which have been lowering borrowing costs to stave off a global recession.

The US Federal Reserve has reduced its target for the overnight lending rate between banks by 4.25 percentage points since September 2007 to 1%. The Reserve Bank of India has cut its benchmark rate twice in less than a month and Bank of Japan on 31 October lowered its key rate for the first time in seven years.

Pakistan needs $10 billion over the next two years to avoid defaulting on its debt, according to IMF estimates. Pakistan ended its last IMF programme in 2004. “State Bank remains committed to price stability, so we have to introduce steeper monetary tightening to tame demand pressures,” Akhtar said. “We need to avert the depletion of our foreign reserves.”

Standard and Poor’s, and Moody’s Investors Service lowered their credit ratings for Pakistan in October, citing the nation’s inability to pay its overseas debt.

Source: Livemint

SAP looks at possible acquisitions in India

In 2006, the software maker said it would invest $1 billion in India by 2010, and increase its staff to 7,000

German software maker SAP AG said it is looking at possible acquisitions in India — its fastest growing market — while conceding that the local market had felt some impact of the global economic slowdown.

SAP, the world’s largest maker of business software by revenue, sold 46% more software licenses to firms in India in the third quarter ended September, from a year earlier. While it does not provide a country-specific revenue breakup, the company said in October 2007 that its India revenue would grow to $1 billion in five years, as local companies increase technology spending to match business growth. It has at least 3,500 customers in India.

SAP will look “at opportunity for acquisition, for inorganic growth (but) integration is important,” company director Peter Zencke said. SAP acquired YASU Technologies, a Hyderabad-based business intelligence software firm, for an undisclosed sum in October 2007. The integration is proceeding smoothly, the company said.

Last month, SAP cut its forecast for the quarter to December on lower-than-anticipated revenue amid slowing demand for its business software because of the global economic turmoil. “We don’t know the impact yet,” said Zencke. “Globally, all governments and international institutions have to address the problem. There is a global recession.”

“The slowdown has also hit India,” SAP India president and chief executive officer Ranjan Das said, but declined to comment on whether SAP would maintain growth in the current quarter.

SAP employs 5,297 people in India including 4,069 professionals at its research and development centre here, the second largest after one in Germany. In 2006, the software maker said it would invest $1 billion in India by 2010, and increase its staff to 7,000. “We are not scaling down our staff. There are no plans for that, (in fact) we are likely to scale it up,” said Zencke.

Source: Livemint

Honda cuts ‘Civic Hybrid’ price by Rs8.14 lakh

Honda slashed the price of the car to Rs13.36 lakh from Rs21.50 lakh earlier for a limited period, till December this year

Carmaker Honda Siel Cars India (HSCI) on Wednesday slashed the price of its eco-friendly sedan, Civic Hybrid, to Rs13.36 lakh (ex-showroom, Delhi) from Rs21.50 lakh earlier for a limited period, till December this year.

“There was a huge response from customers, who wanted to buy the car, but they were unable to do so because of the high import duty cost. As our priority is to popularise the technology, we have decided to cut the price for a limited period,” HSCI Vice-President (Marketing) Jananeswar Sen said.

He said part of the cost would be borne by the company and a limited number of units would be imported during the offer period.

Till last month, the company sold 60 units of the ‘Civic Hybrid’.

Sen said HSCI, which is constructing its second plant in Tapukara in Rajasthan, is having a review of its investment plans keeping in mind the current market slowdown.
“We have already invested Rs600 crore in the first phase out of the committed Rs1,000 crore at the plant. The remaining amount is supposed to be invested for car assembly, which we are reviewing now,” he said.

The company was analysing the market situation before going ahead, Sen added.
He, however, said the company’s plan to roll out its hatchback ‘Jazz’ by mid next year is on track.

Source: Livemint

Looking for jobs amid layoffs

The pink slip threat across different sectors has seen heightened activity in job sites

With the global financial crisis now starting to afflict India, the season of pink slips is here. So, how widespread are these job cuts?

"It’s a mixed bag. There are sectors over-exposed to the US economy and the BFSI (Banking and Financial Services Industry) space, which will need to downsize,” said Sairee Chahal, Founder Consultant, SAITA.

No wonder job sites are seeing a jump in activity.

Nidhi Lauria, Marketing Head, Firefly eVentures, which owns job portal, Shine.com, said: “If you look at the range of people registering, it is not just freshers but people at all levels.”

But not everyone needs to live in fear of the pink lightning, Lauria assured. There are sectors, which are hiring and some will hire at an increased pace.

“Telecom, retail, BPO-ITeS, within IT, areas like hardware,” said Nidhi, will continue to hire.

Experts say multitasking is a good skill to have while looking for a job in a downturn.

“Companies have become careful about the kind of people they hire,” she said.
Some companies are resorting to salary cuts rather than job cuts.
Said Sairee: “It is a thought that a lot of SMBs (Small and Medium Businesses) and young businesses are considering. It’s better to have a pay-cut than fire people—a socially smarter option.”

Even then some of us will be victims of downsizing. Experts are of the view, that finally if one does get pink-slipped, one should not waste time moping. Negotiate with your employer to get a good severance package. Experts advise, fine-tune your resume, prepare for interviews and to add new skill-sets related to your job profile. Networking with people online and offline is a must. Take a copy of contacts and networks that you have built during your tenure at the workplace that you are entitled to.

Remember, when the going gets tough the tough get going.

Source: Livemint

No cut in fuel prices now because oil cos are bleeding: Deora

New Delhi, Nov 12 (PTI) Government will consider reducing petrol and diesel prices once rupee-dollar parity and crude oil stabilise at levels sustainable to public sector oil companies, Petroleum Minister Murli Deora said today.
"Prime Minister has already said this, and I don't need to repeat that we cannot reduce prices just now because the oil companies are losing heavily," Deora said.

The rupee-dollar rate and international crude oil prices continue to be volatile and it would not be prudent to cut prices during such times, he said.

"We wanted to reduce prices but the rupee depreciation against the US dollar made things difficult," Deora said. Indian rupee has depreciated 20 per cent against the greenback since April.

Prime Minister Manmohan Singh had earlier this week stated that the Government would wait for public sector oil companies to break even on fuel sales before considering a price cut.

International crude oil prices have slid from an all-time high of USD 147 to USD 60 a barrel, but public sector oil companies continue to make losses on sale of diesel, domestic LPG and kerosene.

Though Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum have started making profit on sale of petrol, they lose about Rs 155 crore per day on sale of other three products.

Oil firms make a profit of Rs 4.12 a litre on petrol but lose Rs 0.96 on every litre of diesel, Rs 22.40 per litre on kerosene and Rs 343.49 per LPG cylinder.

Deora said a second tranche of oil bonds for the state oil firms was expected next week. "There were differences over calculation of revenue loss. Finance Minister P Chidambaram is very cooperative and I hope more bonds will be issued next week."

Source: PTI

UK unemployment rate soars to 11-year high

The number of unemployed people in the UK soared to an 11-year high to 1.82 million, with the number of people out of work increasing by as much as 1,40,000 during the September quarter.

The rate of unemployment increased to 5.8 per cent for July-September 2008, up 0.4 per cent over the previous quarter, according to the data released by the Office of National Statistics.

"The number of unemployed people increased by 1,40,000 over the quarter and by 1,82,000 over the year, to reach 1.82

million. The last time the number of unemployed was higher in the three months to December 1997," the statement said.

The official jobless data follows the announcement of as many as 5,000 job cuts by firms including Virgin Media and Yellow Pages major Yell last night.

Similarly, the United States witnessed the unemployment level rise to 6.5 per cent in October, its highest level since 1994, while 2,40,000 jobs were slashed in the month.

Back in the UK, the employment rate for the people of working age was 74.4 per cent for the three months to September 2008, down 0.4 from the previous quarter.

The number of those employed stood at 29.41 million for the three-month period ended September, down 99,000 over the quarter but increasing by 1,34,000 over the year, the statement said.

The data further revealed that although employment has fallen over the quarter, the average hours worked per week has increased.

Source: ndtvprofit

Banking stocks tumble on credit worries, slowdown fears

Banking stocks fell sharply on Wednesday, on worries over tight credit and fear of economic slowdown that pulled Asian stocks down for
second consecutive day.

ICICI Bank was the biggest loser, shedding nearly 9 per cent to close at Rs 397.90. Axis Bank followed with a loss of 6.82 per cent to Rs 525.65, Yes Bank was down 6 per cent to Rs 74, while Bank of India, Punjab National Bank, Kotak Bank, Bank of Baroda and HDFC Bank declined by 1.5 per cent to 3.5 per cent.

Union Bank of India, on the other hand, managed to remain positive through out the day and closed marginally up at Rs 157. The Bombay Stock Exchange’s Bankex was the second biggest sectoral loser of the day, falling by 4.38 per cent.

According to banking analysts, top lenders including ICICI Bank and State Bank of India were under selling pressure on concerns that tight credit markets could hurt their profitability and there could be considerable rise in bad loans. However, the vigilant approach of the banking regulator may help the banks at some level, though the tight liquidity conditions are likely to continue for at least next two quarters.

“We believe the transmission of the central bank's rapid monetary easing to the real economy is still a few quarters away, putting pressure on economic growth. As a natural fallout, banks are likely to face risk on credit quality, especially in the SME and corporate segments, as the full impact of lower economic growth filters through,” said Nilesh Parikh of Reliance Equities.

Reliance Equities had quoted HDFC Bank as a top pick in the sector on account of its well-balanced business performance while for ICICI Bank it said there is no near-term trigger or potential for better core performance.

“ICICI Bank will witness the biggest delta in its stock price once global credit market and domestic capital markets return to normalcy. Given the near term challenges on asset quality, we initiate with a hold on Axis Bank and SBI given their aggressive growth strategy,” it added

Source: EconomicTimes

Stocks to Watch: Jet Airways, Tata Steel

Stocks are expected to extend losses Wednesday tracking weak cues from global shores.

Investors will look forward to crucial IIP data which is scheduled to be announced around noon. Improvement in industrial growth may provide some positive sentimental impact. Industrial growth is expected to have risen 5-7 per cent in September from the 13-year low of 1.3 per cent in August.

Among stocks, shares of Dabur India are likely to see some action as the firm is close to acquiring Fem Care Pharma for nearly Rs 300 crore and expected to sign the agreement next week. The stock ended 5.48per cent lower at Rs 85.35 on Wednesday.

According to reports, private carrier Jet Airways is negotiating to sell 10 percent stake to the Singapore government-owned Temasek Holdings. Jet plans to raise around Rs 250 crore from the stake sale.

In another development, Jet Airways is believed to have struck a deal last week with west Asian investment agency Mubadala Development Company for funding of Rs 1000 crore. The instrument of funding has yet to be formalised. The airline's shares closed 6.6 per cent lower at Rs 188.85.

Tata Steel is scouting to buy European wire makers to boost the capactiy of Corus. It will also look at buying such companies in Asia. This acquisition interest could see some action in the shares of the steelmaker, which ended 10.98 per cent lower at Rs 190.90. However, there are reports that chairman Ratan Tata has directed the top management of his group to keep all plans for acquisitions on hold unless considered strategically critical.

According to reports, India's top engineering and construction firm, Larsen & Toubro may be in talks to buy Chennai-based financial services company, Integrated Enterprises. The companies are negotiating a deal worth Rs 500-600 crore.

Source: EconomicTimes

Heard on the Street - November 12, 2008

Old Fox takes a liking to long-term stories

Even as he continues to hammer the daylights out of most stocks by going short on them, the Old Fox of Dalal Street is also selectively identifying long-term investment stories. According to circles close to the Fox, he has started nibbling at shares of FMCG companies. At the same time, he is said to be doubling his short positions on stocks which he feels are still overvalued.

One mid-cap company in his line of fire is Educomp Solutions. The stock is down over 50% from its record highs seen in January this year. But even that may appear to be respectable, considering that some of the much-hyped IPOs in the broking and real estate sectors are down 80-85% from their peaks. Not long ago, Educomp was among the favourites in the Pink Panther’s portfolio.

In fact, it is said that Panther was the driving force behind the spectacular rise in the stock price over the past couple of years, with some help from ‘friendly’ circles as well. With the overall market in a downtrend, it looks unlikely that Panther would be keen to support to the stock. Meanwhile, the Fox is of the view that Educomp is undeserving of the valuations that it is commanding right now.

Also, the Fox seems to delight in punishing companies, where ‘friendly circles’ take a greater interest in their stock than is required. The Fox is said to have outsized gains from his raids on Suzlon and Unitech, and he seems convinced that Educomp is ripe for the picking.

Frantic layoffs, faster denials too

With the market showing no signs of revival yet, a large number of broking firms are frantically trying to trim costs through whatever means they can. Kotak Bank is reported to have axed between 200 and 250 employees, mostly at the junior levels, across various divisions. This was, however, denied by the firm. “We deny the development,” said an e-mail response from Kotak Bank.

Enam Securities is heard to have reduced headcount in its investment banking division. This too was denied by a senior official in the firm. Meanwhile, a prominent domestic broking house, which was supposed to lease office space at a prominent address in Lower Parel, has changed its plans, and instead decided to take up 40,000 square feet at Sion.

Source: EconomicTimes

Goldman CEO speaks as firm's future in doubt

For most of the past century, Goldman Sachs was top of the heap among Wall Street's investment banking firms, but its prospects as a
heavily regulated bank are not so bright.

After months of fretting about capital and liquidity levels at banks, the market has turned its focus from Goldman's survival prospects to its earnings potential. Investors clearly do not like what they see.

"The days of getting 35 per cent (returns) on equity are over – much of that was achieved with leverage," Mendon Capital President and Chief Investment Officer Anton Schutz said on Monday.

Brokers and banks, he said, must change their ways. "There is no doubt their balance sheets are seen as weaker. They're trying to get leverage ratios down," Schutz said.

Investors may get some answers when Goldman Chief Executive Lloyd Blankfein speaks at a Merrill Lynch investor conference after the closing bell on Tuesday.

Goldman Sachs Group Inc shares on Monday fell to their lowest levels since 2003 as a growing chorus of analysts forecast plunging markets will produce a fourth-quarter loss – the firm's first quarterly loss since it went public in 1999.

The stock has plunged 71 per cent since reaching a record high last October and is down nearly two-thirds since the end of July. It stood at $72.04 in Tuesday morning trade.

Investors are questioning the firm's ability to retain its famed Midas touch, where an elite army of traders and bankers generated the industry's biggest profits year after year.

The question now is where Goldman will seek new sources of revenue and which businesses it will abandon as it goes through the transition from broker to bank.

"I don't know what Goldman and Morgan Stanley will look like after they re-size," Oppenheimer & Co banking analyst Meredith Whitney said. "I'm agnostic on those names right now. There is a lot they have to go through."

Source: EconomicTimes

US stocks lower as Paulson unveils change in bailout

An already disheartened Wall Street turned sharply lower Wednesday after Treasury Secretary Henry Paulson said the government won't buy
banks' soured mortgage assets after all, disappointing investors who hoped to see the bad debt wiped off companies' books. The Dow Jones industrials fell more than 270 points, and all the major indexes dropped more than 2 percent as the market retreated for a third straight session.

Paulson said the government's $700 billion financial rescue package will not purchase troubled assets from banks as originally planned. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.

While the market had been pleased by the government's decision weeks ago to buy banks' stock, investors still hoped to see the financial industry relieved of the burden of the mortgage assets whose decline in value helped set off the nation's financial crisis.

Paulson also announced a new goal for the program to support financial markets which supply consumer credit in such areas as credit card debt, auto loans and student loans. He said "with a stronger capital base, our banks will be more confident" to support economic activity.

With the market also worried about sagging consumer spending, news from some of the nation's biggest retailers also sent stocks falling. Macy's Inc. said it lost $44 million in the third quarter as sales at the department store retailer fell more than 7 percent. Consumer electronics retailer Best Buy Co., meanwhile, slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.

Investors are worried that a severe pullback in consumer spending — which drives more than two-thirds of the U.S. economy — will prolong a global economic downturn.

In late morning trading, the Dow shed 274.39, or 3.16 percent, to 8,419.57.

The broader Standard & Poor's 500 index dropped 29.49, or 3.28 percent, to 869.46, and the Nasdaq composite index stumbled 41.43, or 2.62 percent, to 1,539.47.

The Russell 2000 index of smaller companies fell 14.24, or 2.95 percent, to 468.05.

Declining issues outnumbered advancers by about 4 to 1 on the New York Stock Exchange, where volume came to a light 235.6 million shares.

Concerns about consumer spending contributed to the market's declines on Monday and Tuesday.

Government bond prices, which did not trade Tuesday because of Veterans Day, moved higher as investors looked for safer investments. The three-month Treasury bill's yield fell to 0.19 percent from 0.22 percent late Monday, and the yield on the benchmark 10-year Treasury note fell to 3.69 percent from 3.76 percent late Monday.

Lower yields indicate stronger demand.

Crude dropped below $57 a barrel Wednesday on the growing realization that global economic growth next year will slow more than originally feared, cutting demand for crude products such as gasoline. Light, sweet crude fell $1.42 to $56.91 a barrel on the New York Mercantile Exchange.

In corporate news, the future of the country's top automakers remained a major concern on the Street. House Speaker Nancy Pelosi wants Congress to support a financial bailout for the troubled U.S. auto industry, which is suffering under the weight of poor sales, tight credit and a sputtering economy.

Source: EconomicTimes

GDP forecast to decline 1.4 percent in 2009: EIA

The estimate for U.S. real gross domestic product growth was lowered to 1.3 percent this year and was projected to decline by 1.4
percent in 2009, the U.S. Energy Information Administration said on Wednesday in its monthly forecast.

The U.S. average unemployment rate is expected to jump to 7.9 percent next year, the Energy Department's analytical arm said. World real GDP growth is projected to slow from about 4 percent in 2006 and 2007 to about 2.5 percent this year and 1.8 percent in 2009, the agency said.

Separately, the EIA said the price for U.S. West Texas Intermediate oil will average $63.50 a barrel next year.

Source: EconomicTimes

IIMs breathe easy as offers for summer placement pour in

The IIMs’ strategy of inviting more companies on campus during summer placements this year seems to have paid off quite a bit at a time
when the economic slowdown was supposed to affect placements in a big way. It’s early days still, but so far, both stipends and offers seem to be on track across campuses like IIM Calcutta, Kozhikode and Lucknow, which are either in the midst of or have wrapped up their summer placements.

In fact, things probably aren’t going to be as bad as expected even on the investment banking (IB) and banking and financial services (BFS) front, sectors which earlier seemed likely to be most badly hit.

Almost all regular recruiters in the I-banking space have turned up across IIMs, in part to maintain their relationships with elite institutes. New recruiters in this space have also turned up, along with some which did not participate in summers last year. And while most of the big names may have cut down on individual offers, calling more companies seems to have done the trick.

The total numbers of offers from the I-banking space have, if at all, decreased by a marginal 10-15%, claim insiders, while those in the banking space have seen a rise.

For IIM Kozhikode, which finished its summers last week, it’s been good news all the way. “Contrary to general expectations of a drastic reduction in the number of offers in the financial domain, students at IIM-K received more offers in the investment banking, private equity, treasury, corporate banking space compared with last year,” IIMK placement co-ordinator Revant Bhate told ET.

According to him, nine I-banks made 23 offers this year at IIMK, compared with 16 offers from six I-banks last year. Some 23 companies in the BFS space made 72 offers this time around, up from 51 offers by 18 such companies last year. New names in the I-banking space this year included IDG Ventures, Tata Capital, Deutsche Bank while those in BFS included Citigroup, Futures First and Emergent Ventures.

When contacted about its ongoing summer placements, Sushil Kumar, IIM Lucknow’s placement cell in-charge, said: “It is a policy decision that no information about the placements goes out till the process is over.” However, he said that things were on track, including in the banking space. “The earlier concerns were much worse than what the reality is turning out to be,” he added.

Source: EconomicTimes

As summer placements kick off, investment banks are not the flavour anymore

Talent, quality and good grades never go out of fashion, even in recessionary times. Just look at the summer placement scenario across
the Indian Institutes of Management (IIMs). At all institutes, the number of companies visiting the campuses has risen though the profile has undergone a change.

Summer placements have kicked off in most IIMs, while in a few like IIM-Ahmedabad and IIM-Bangalore, they will begin this week.

Expectedly, investment banks are not the flavour anymore. Traditional underdogs at the IIM job market—media and entertainment, pharmaceutical, healthcare and rural marketing—are the preferred sectors among students this year. The number of firms in these sectors has increased in the last two years.

“In IIM-Bangalore, only four firms from media and entertainment visited the campus last year. This year the number has doubled,” says a member of the IIM-Bangalore placement panel. IIM-B’s summer internship will start on Tuesday. It’s expecting a drop in offers from financial services and overseas postings.

“Last year we had about 100 international placements mostly in the domains of financial, consulting and engineering services. This time there will be a slump in the overseas offers,” says Sourav Mukherjee, the placement chairman of IIM-B.

IIM-Kozhikode had 14 international offers this year compared to four last year. It has recorded 100% placement. “Despite a drop in participation from investment banks, 27% of students will intern in finance companies this year, while a large chunk opted for the strategy and consulting roles,” says Revant Bhate, member, placements committee.

Media and real estate companies like Sony Entertainment Television, Viacom, Star News and BBC World have offered both creative and marketing roles. IIM-Ahmedabad is expecting more companies from the media and entertainment sectors. Placements in IIM-Calcutta are still in process.

An IIM-Indore official says, “This time our focus is on sectors like media and entertainment, start-ups, sports management and pharmaceuticals.”

Source: EconomicTimes

Morgan Stanley plans broad job cuts

Morgan Stanley plans to cut 10 percent of staff in its institutional securities unit and 9 percent in asset management, it said on
Wednesday, as it copes with a deteriorating economy, disrupted capital markets and falling asset values.

The cuts are in addition to roughly 4,800 jobs eliminated since the middle of 2007 by what was once Wall Street's second-largest investment bank.

It was not immediately clear how many employees will be affected by the latest cuts, or over what time period. A spokeswoman declined to comment. Morgan Stanley employed 46,383 people as of August 31, according to its website.

New York-based Morgan Stanley announced its cuts less than two months after converting into a bank holding company in the wake of Lehman Brothers Holdings Inc's (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) bankruptcy.

The change requires it to lower leverage, potentially cutting profitability. The bank has slashed its asset base to below $800 billion from $987 billion at the end of August.

"We're in a period of tremendous dislocation," Co-President James Gorman said at a Merrill Lynch financial services conference. "We're very mindful of the environment that we live in at the moment, and we will continue to rationalize headcount and costs accordingly."

Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley's main rival, also became a bank holding company in September. It set plans last month set plans to reduce 10 percent of its staff, or nearly 3,300 jobs.

In late morning trading, Morgan Stanley shares fell 80 cents, or 5.7 percent, to $13.28 on the New York Stock Exchange. They began the year at $53.11.

NO QUICK FIXES

Gorman said the bank holding company structure will allow Morgan Stanley to tap a wider array of funding sources.

He said the company plans to bulk up in retail banking, including through "targeted" acquisitions, and preserve or expand operations in capital raising, cash trading, commodities, corporate credit, equity derivatives, foreign exchange, mergers and acquisitions and rates.

On the other hand, he said Morgan Stanley plans to "reshape" operations in prime brokerage, proprietary trading, principal investments and commercial real estate origination,

In October, Morgan Stanley raised $9 billion from Japan's Mitsubishi UFJ Financial Group Inc (8306.T: Quote, Profile, Research, Stock Buzz), and received $10 billion from the U.S. government's bank bailout plan.

Chief Financial Officer Colm Kelleher said the infusions leaves Morgan Stanley "well-capitalized, with excess capital."

Yet he said the company still faces "incredibly dislocated markets," including "gridlock" in efforts to sell or dispose of troubled assets. "I'm not sure who is buying it," he said.

He also said Morgan Stanley aims to fund half its assets with equity, long-term debt and deposits, up from 26 percent at the end of August.

Many other companies are also seeking more stable funding, and credit card issuer American Express Co (AXP.N: Quote, Profile, Research, Stock Buzz) this week also became a bank holding company.

"There are no quick fixes," Kelleher said. "There is no magic bullet that will suddenly solve the deposit question for institutions that are moving over from wholesale funding."

Source: EconomicTimes

Bush grants visa-free travel to citizens of 7 nations

US President George Bush has granted visa-free travel to the citizens of seven countries, namely Czech Republic, Hungary, Slovakia, South Korea, Latvia, Estonia and Lithuania, to his country.

The President said that the US enjoyed "good, tight relations and co-operation" with the countries exempted.

"These close friends of America told me that it was unfair their people had to jump through bureaucratic hoops that other allies can walk around," the Daily Times quoted Bush as saying while announcing the decision.

Meanwhile, six European Union nations - Bulgaria, Cyprus, Greece, Malta, Romania, and Poland - however, will remain outside the scheme, for the time being, added the paper.

Source: EconomicTimes

Buy Tata Motors, target of Rs 283: Emkay Global

Emkay Global Financial Services has recommended a buy rating on Tata Motors with a target of Rs 283 in its November 3, 2008 research report. "Net sales at Rs 70.8 billion. Adjusted net profit at Rs 2.7 billion. We have revised our standalone earnings estimates by 39%% and 30% to Rs 24.5 and Rs 28.5 per share for FY09 and FY10 respectively. We have valued standalone business at Rs 228 (8x FY10 PER). We have valued subsidiaries at Rs 55 per share."

"We have not assigned any value to JLR as management is not likely to share information on JLR before 1QFY10 At CMP of Rs 172, the stock trades at a significant discount its FY09 standalone book value per share of Rs 256, Buy, target of Rs 283," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy PNB, target of Rs 540: Emkay Global

Emkay Global Financial Services has upgraded its rating on Punjab National Bank (PNB) to buy with a target of Rs 540 in its November 3, 2008 research report. "Punjab National (PNB) has reported a net profit of Rs 7.1 billion. The NII, at Rs 17.1 billion, is up 32.6% yoy driven by 28.5% yoy growth in advances and 25bps expansion in NIMs. The stock is currently quoting at 4.8x FY10E EPS and 0.9x FY10E ABV, which looks attractive."

"In our result note for Q1FY09, where we changed our recommendation on the stock to HOLD, we had mentioned that better NIMs and further improvement in the non-performing assets could be triggers for upgrading our recommendation and price target on the stock. With both the events happening we are upgrading the stock to a BUY with price target of Rs 540," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy TCS, target of Rs 682: KRChoksey

KRChoksey has maintained its buy rating on Tata Consultancy Services, TCS with a target of Rs 682 in its report on October 22, 2008. "We continue to maintain our POSITIVE view on TCS due to pricing stability, strong deal pipeline and volume expansion. We believe that offshoring of IT services will continue to grow as the company leverages on M&A opportunities that emerge from the global environment. At the CMP of Rs 546, TCS is trading at 10.4x its TTM earnings and 9.8x FY09E EPS of Rs 55.9. We maintain a BUY on the stock with a target price of Rs 682. At the target price the stock would be valued at 12.2x FY09E EPS of Rs 55.85 and 10.1x FY10E EPS of Rs 67.32 implying an upside potential of 24.9%, " says KRChoksey's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate Zee Entertainment: KRChoksey

KRChoksey has recommended an accumulate rating on Zee Entertainment in its report. "Zee Next has made losses of Rs 8.2 core in this quarter. The company is formulating a revised strategy for the channel and has therefore bought the channel under maintenance mode. Management has maintained its guideline of topline to grow by 30% and bottom-line by 25-30% (despite losses from Zee Next) in FY09. Zee entertainment would be launching 2-3 new programs in the coming months to compete with new channels, especially Colors which has become a direct challenger to Zee Entertainment’s no 2 spot in GEC. At CMP of Rs 145, the stock is trading at 11.6x TTM EPS of Rs 12.5. We recommend the investors to ACCUMULATE the stock at these levels," says KRChoksey's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investmenta decisions.

Source: Moneycontrol

Buy Andhra Bank, target of Rs 96: Karvy

Karvy Stock Broking has maintained its buy rating on Andhra Bank with a target of Rs 96 in its November 12, 2008 research report. "In 2QFY09, Andhra Bank reported net interest income growth of 34% (Y/Y) to Rs 4.3 billion. Due to expansion of core banking solution and provisions of Rs 200 million towards wage revisions total operating expenses grew by 16% (Y/Y) to Rs 2.9 billion; operating profit grew by 20% (Y/Y) to Rs 2.8 billion."

"Much higher NPA provisions of Rs 310 million (against Rs 113 mn) and general provisions of Rs160 mn (compared to Rs 75 mn) moderated the bank's bottomline growth to 6.8% (Y/Y) to Rs 1.6 billion. Improvement in CASA deposits share and decline in gross NPA were major positives of the result. We maintain our BUY rating on the stock with a target price of Rs 96 at 1.19x FY2010 adjusted BV," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Ciba India, target Rs 250: LKP Shares

LKP Shares has recommended a buy rating on Ciba India in its report dated November 10, 2008. "We expect BASF SE to make an open offer to shareholders of Ciba India Ltd. as well, which should provide investors in Ciba India an exit opportunity at around Rs 250 per share. It must be noted that the BASF open offer for Ciba Holding AG was made at CHF 50 per share, which was a premium of 32% over the closing price on the date of announcement of the offer. Ciba Holding holds 69% in Ciba India, Institutions hold 8% and the balance 23% constitutes Public Holding. Ciba India is virtually debt-free and has cash equivalent of Rs 90 per share and a book value of Rs 280. We recommend a BUY on Ciba India with a six-month price target of Rs 250," says LKP Shares' report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate Reliance Comm, target of Rs 272: Emkay Global

Emkay Global Financial Services has maintained its accumulate rating on Reliance Communications with a target of Rs 272 in its November 3, 2008 research report. "The Q2FY09 revenue growth at 6.1% QoQ. The reported PAT at Rs 15.3 billion. Post Q209 we reduce ARPU estimates by 3% and 5% and cut revenue estimates by 2.4% and 3.9% for FY09E and FY10E respectively. We reduce our EPS estimates by 11% and 18% to Rs 24.2 and Rs 28.2 for FY09E and FY10E respectively. We revise our target price to Rs 272 per share (from Rs 518 earlier) based on 20% discount to Bharti Airtel’s FY10E target EV/EBIDTA of 8.8x). Maintain ACCUMULATE rating," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

SKP Securities bullish on Indo Tech Transformers

SKP Securities is still bullish on Indo Tech Transformers on the expectation of rise in the demand of transformers due to increased spending of the Government on power sector.

SKP Securities' report on Indo Tech Transformers:

Indo Tech Transformers Ltd. (ITTL) has shown a rise in revenue by 27% from Rs 51.4 crores in Q2 FY08 to Rs 65.45 crores in Q2 FY09. This is due to better capacity utilizations and better realizations during the quarter.

At the current price of Rs 197, discounts the EPS of FY10E by 3.9x. We are still bullish on the stock on the expectation of rise in the demand of transformers due to increased spending of the Government on power sector.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy SBI, target of Rs 1700: Emkay Global

Emkay Global Financial Services has maintained its buy rating on State Bank of India with a target of Rs 1700 in its November 3, 2008 research report. "State Bank of India’s (SBI) Q2FY09 net profit at Rs 22.6 billion. The operating performance remained strong as the rising investment yield and moderate rise in cost of funds helped the bank to report a 45% yoy growth in NII. We have revised our EPS estimated for FY09 and FY10 by 13% and 9% each to take into account the H1FY09 performance. The stock is currently valued at 6.6x FY10E EPS and 1.2x FY10E ABV. We maintain our BUY rating with price target of Rs 1,700," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Marico, target Rs 64: KRChoksey

KRChoksey has recommended a buy rating on Marico with target of Rs 64 in its report on October 22, 2008. "Marico’s net sales increased 30.1% Y-o-Y to Rs 603.5 crore in Q2FY09 as against Rs 463.8 crore during Q2Y08. EBITDA of the company registered a growth of 14.1% Y-o-Y to 73.9 crore & PAT rose by 11.6% Y-o-Y to Rs 47.1 crore. The second half of FY09 is expected to present significant challenges in the domestic consumer products business, though the long term fundamentals of the company remains strong. At CMP of Rs 53.3, the stock is trading at 18.5x on FY09E EPS of Rs 2.8. We recommend a BUY on this stock with target price of Rs 64.0, which represents an upside potential of 20.0%," says KRChoksey's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold Mphasis, target of Rs 174: Indiabulls Securities

Indiabulls Securities Research has maintained its hold rating on Mphasis with a target price of Rs 174 in its October 28, 2008 research report. "In Q2’09, MphasiS Limited (MphasiS)’s revenue climbed 12.6% sequentially to Rs 8.4 billion, owing to a 5.5% increase in volumes, a 5.6% depreciation of the rupee, and a 1.5% improvement in the price realisation. Based on our DCF valuation, we have arrived at a target price of Rs 174, assuming an 8.0% Rf, a 13.6% WACC, and a 5.0% terminal growth rate. As our target price provides an upside of 1.4% from the current levels, we maintain Hold rating," says Indiabulls Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Union Bank, target of Rs 200: Emkay Global

Emkay Global Financial Services has maintained its buy rating on Union Bank of India with a target of Rs 200 in its November 3, 2008 research report. "Union Bank of India’s (UBI) reported net profit of Rs 3.6 billion for Q2FY09. The operating performance for Q2FY09 was much stronger than we expected with 48.6% growth in NII and 47% growth in fee income. The improving asset quality and strong cost/asset ratios remain positives for the bank."

"We have upgraded our earnings estimates for the bank by 10% each for FY09 and FY10. We continue to maintain it as one of our top picks. The stock is currently trading at 0.9x FY10E ABV and 3.9x FY10E FDPER. We maintain our BUY recommendation on the stock with price target of Rs 200," says Emkay Global Financial Services' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Sell Punj Lloyd: Indiabulls Securities Research

Indiabulls Securities Research has downgraded its rating on Punj Lloyd from hold to sell in its November 6, 2008 research report. "Punj Lloyd reported a strong performance in H1’09 with a 69.5% yoy jump in the consolidated revenues and a 62.3% yoy surge in the adjusted net profit. We have valued the Company by using discounted cash flow (DCF) methodology. Our fair value estimate of Rs 174 reflects a downside of 12.4% from the current market price. Hence, we downgrade our rating on the stock from Hold to Sell," says Indiabulls Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold Hero Honda, target Rs 920: KRChoksey

KRChoksey Research has recommended a hold rating on Hero Honda Motors with target of Rs 920 in its report on October 22, 2008. "Hero Honda has declared its Q2FY09 result which is almost in line with our expectation. The Net sales reported by the company is exactly in line with our estimation of Rs 3,202 crore whereas Net Profit is below expectation mainly due to increased input cost. The company has targeted to sell 6 lac bikes in the current festive season on the back of recent launched four new variants of its existing model coupled with sixth pay commission, further the company has plan to launch new bikes in the next 15-18 months. We recommend a Hold on the stock with a target price of Rs 920, implying an upside of 13.3%," says KRChoksey research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Akruti City: HDFC Securities

HDFC Securities has recommended a buy rating on Akruti City in its report dated November 12, 2008. "Akruti’s revenues and EBITDA grew by 5%and 9% respectively on account of an increase in other income (including income from JVs). Akruti had EBITDA margins of 98% and PAT margins of 78% in Q2 FY09 due to its high mix of commercial projects (49% of land bank) and very little presence in the residential segment (10% of land bank) as compared to other players. Akruti City, with its land bank in these areas, is in a position to tap this market. Given the visibility in project execution, its diverse land bank and strong presence in SRA schemes, we recommend a BUY on the stock," says HDFC Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Sell JK Lakshmi Cem, target of Rs 29: PINC

PINC Research has downgraded its rating on JK Lakshmi Cement to sell with a target of Rs 29 in its October 31, 2008 research report. "J K Lakshmi Cement Ltd’s (JKLC Ltd's) net sales in Q2FY09 were higher (+10%) YoY at Rs 2.9 billion. JKLC’s profitability was impacted by the dual impact of rising input costs and declining realisations. While we expect raw material costs to ease, we feel that JKLC’s pricing power in the near term may not be sufficient enough to secure a significant improvement in EBITDA/mt. This coupled with impending capex could exert substantial pressure on net profit/mt."

"Accordingly, we have downgraded our earnings estimates for FY09E and FY10E. At the CMP of Rs 38, JKLC is trading at P/E of 1.6x, EV/EBDITA of 1.5x and EV/ton of USD 21. While current valuations seem attractive, we have downgraded our recommendation to ‘SELL’, mindful of downtrend in EBITDA/mt,coupled with absence of clarity on impending capex,target of Rs 29," says PINC's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold Power Grid, target of Rs 86: KRChoksey

KRChoksey Research has recommended a hold rating on Power Grid Corporation of India with a target price of Rs 86 in its November 5, 2008 research report. "Net Sales of the company during the quarter increased by 51.0% to Rs 1,587.7 crore against Rs 1,051.2 crore in the corresponding previous quarter on back of superior performance by its transmission segment (contributed 91.3% to Net Sales) due to commissioning of new transmission assets. On back of huge transmission investments in INDIA, expansion plans and additional revenues from telecom business segment, we recommend to HOLD the stock with target price of Rs 86," says KRChoksey's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy HEG, target of Rs 205: PINC

PINC Research has maintained its buy rating on HEG with a target of Rs 205 in its November 5, 2008 research report. "HEG reported a decent 15% YoY growth in its revenues for Q2FY09 which stood at Rs 3 billion. A Rs 300 million provision for losses on account of mark-to-market on forex loans, dampened the profits, which fell by 25% on YoY basis. We believe that HEG would continue to maintain its margin and incremental volumes would drive its profit growth going forward."

"At the CMP of Rs 149, it is trading at P/E of 3.4x and EV/EBDIT of 2.3x discounting its FY10 estimates. We believe this is at substantial discount to its fair value, which also includes 36% stake in BEL. Hence we maintain ‘BUY’ recommendation on the stock with a revised price target of Rs 205 on a 12 month investment horizon," says PINC' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Redington, target of Rs 325: India Capital Markets

India Capital Markets has recommended a buy rating on Redington (India) with a target price of Rs 325 in its October 31, 2008 research report. "RDIL has posted a decent top line growth of 22.9% Y-o-Y in Q209, with revenue at Rs 32.7 billion with contribution from subsidiary being at Rs 16.1 billion. A sound business model, proven expertise & the given expansion plans gives a positive view on the company. We recommend a BUY with a Price target of Rs 325," says India Capital Markets' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold Sesa Goa, target of Rs 95: Indiabulls Securities

Indiabulls Securities Research has recommended a hold rating on Sesa Goa with a target price of Rs 95 in its November 3, 2008 research report. "DCF method, assuming a WACC of 16%. Thus, valuing the Company’s iron ore reserves of approximately 200 million tons, and pig iron and met coke divisions, we have arrived at a target price of Rs 95. Therefore, the stock seems to be fairly valued at the CMP; and hence, we give a Hold rating," says Indiabulls Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate Ranbaxy Labs: ULJK Securities

ULJK Securities has recommended an accumulate rating on Ranbaxy Laboratories in its November 8, 2008 research report. "Sale grew 10.5% to Rs 11,462 million strongly supported by 20% growth in sale in the emerging markets. Received Rs 35,849 million against preferential equity and warrant issued to Daiichi Sankyo. We believe this is a good opportunity for the current promoter, Daiichi Sankyo, to increase stake in Ranbaxy in the open market from current 63.92% to 75%, the new government limit of FDI investment in India. Ranbaxy is currently trading at 8.5x FY09 earnings and 5.2x EV/EBITDA."

"We expect earnings to go down by 8-13% by over slow US sales. We recommend 'Accumulate' based on the long term growth potential of Ranbaxy generic business," says ULJK Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate Wockhardt: ULJK Securities

ULJK Securities has recommended an accumulate rating on Wockhardt in its November 8, 2008 research report. "Revenue increased 25% YoY. Operating margin up 23% YoY while Net profit declined by 43% on account of currency loss. Interest cost likely to go up sharply in CY09, given the redemption of USD 110 million FCCB in CY09 and ECB of USD 250 million repayable from CY08."

"The US market is expected to demonstrate a robust growth in future years, increasing contribution to 35% by CY12 vis-à-vis current 25%. We believe that Wockhardt will manage to achieve its target of becoming a USD 1 billion by CY09. We expect Wockhardts RoE to remain in a range of 27-30% till CY10 and recommend ‘Accumulate’ on the stock," says ULJK Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold Taj GVK Hotels: PINC

PINC Research has downgraded its rating on Taj GVK Hotels & Resorts to hold in its November 7, 2008 research report. "TajGVK Hotels & Resorts Ltd. (TAJGVK) reported revenues of Rs 616 million (+4%YoY) in Q2FY09. A marginal increase in capital charges and tax provisioning resulted in net profits settling at Rs 163 million (flat YoY). While we like TajGVK’s business model on account of its diverse product portfolio and ability to leverage its offerings to maximise revenues, we believe that the ongoing turmoil in the global economy will lead to a clampdown in discretionary spending, by both corporates and individuals. This has the potential to impact revenues and profits. Hence, we downgrade our recommendation to ‘HOLD’ and will revisit the same in subsequent quarters," says PINC's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Hold TVS Motor, target of Rs 25: PINC

PINC Research has maintained its hold rating on TVS Motor Company with a 12-month price target revised downwards to Rs 25 in its November 7, 2008 research report. "TVS Motors Ltd. (TVSM) reported a 23% rise in net sales to Rs 10.1 billion on back of a 14% YoY growth in volumes and 9% improvement in realizations aided by price hikes and a richer product-mix. Net profits before exceptional items surged to Rs 102 million against Rs 17 million in Q2FY08. Despite YoY improvement shown in OPM, margins are markedly below industry average of 10-11%."

"Although some improvement in margins is expected in FY10 due to softening in input costs, the same will be curtailed by dependence on economy segment of motorcycles and mopeds. We expect volume growth to be a challenge due to sluggish market conditions, scarcity of finance and strong competition. Hence, we maintain a ‘HOLD’ recommendation with a 12-month price target revised downwards to Rs 25," says PINC's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Nava Bharat Ven, target of Rs 190: PINC

PINC Research has maintained its buy rating on Nava Bharat Ventures with 12-month price target to Rs 190 in its November 7, 2008 research report. "Nava Bharat Ventures Ltd. (NBVL) once again reported an excellent set of results in Q2FY09 as it posted a 157% increase in revenues, at Rs 4 billion, with 70% contribution from the ferro alloy division alone. Net profits grew by 127% to Rs 1.2 billion."

"At the CMP of Rs110, the stock is trading at a P/E of 2.3x and EV/EBIDT of 1.2x its FY10E earnings We believe these are very attractive valuations for a company with a very robust business model where the company can switch between power and ferro alloys production depending on the market conditions. Hence, we maintain our ‘BUY’ recommendation on the stock but revise our 12-month price target to Rs 190," says PINC's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Exit Ipca Laboratories above Rs 500: Tulsian

Investment Advisor SP Tulsian is of the view that one can exit Ipca Laboratories above Rs 500.

Tulsian told CNBC-TV18, "Ipca Laboratories yesterday announced the buyback from the open market for which they made an allocation of about Rs 60 crore and they will be buying shares up to Rs 600. So suppose if I take the present price of Rs 450 and I presume that if they make use of the entire allocated amount of Rs 60 crore, probably they should be able to mop up about 6% of the company’s equity. But if you see the financial performance that has been very good for Q2 maybe FY09 should be having an EPS of close to Rs 54-56. If I take that it translates into a P/E multiple of about 8-9 in line with the other pharma companies where we have been seeing huge forex losses that is not the case with this company. They are not ridden with too much of the debt in fact they have the surplus cash that’s the reason they made an allocation of Rs 60 crore for buyback. Overall, if one can remain invested in a stock at least look to exit maybe above Rs 500 or so."

Disclosure: Analyst has holdings in Hindalco and GVK.

Source: Moneycontrol

Exit Ipca Lab at Rs 500-550: Agarwal

Sanjeev Agarwal, Head-Equity of Globe Capital Market is of the view that one can exit Ipca Laboratories at Rs 500-550.

Agarwal told CNBC-TV18, "Ipca Laboratories has been showing a very strong strength in the last few sessions and what I feel like Rs 500-550 will be the ideal phase to exit this stock. One should actually shift to a much more volatile stock at this moment because we are near the bottom range and if that recovery comes, definitely one will be making much more money, which has a higher beta. This stock has a particularly very low beta and what I may at this point feel like Rs 550 will be the ideal point to exit this stock and enter into some other stocks, which you are getting much cheaper because of their volatility."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Tata Steel safest in metal space: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that Tata Steel is looking safe in the metal pack.

Sukhani told CNBC-TV18, "Suzlon Energy got pummeled yesterday because it is in a downtrend; it did not even show signs of life when we were having this small rally except for one day. So Suzlon is not a buying opportunity for traders, for investors, for anyone. We have to see how it pans out, builds a base."

He further added, "SAIL has been underperforming the market. It has been underperforming as compared to Tata Steel. In a market like this, it is again not easy, I would say if at all somebody wants to go into metals, Tata Steel would be the safest of them."

Disclosure: Analyst has delta neutral positions in the Nifty and investments in the shares.

Source: Moneycontrol

Buy Punj Lloyd: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that one should buy Punj Lloyd.

Sukhani told CNBC-TV18, "Punj Lloyd belongs to that infrastructure construction sector, which I think is now giving much better chart patterns. This is not going to go against the broad market, but if at all you have a sense that something is going up then Punj Lloyd is the first stock that you should be buying."

Disclosure: Analyst has delta neutral positions in the Nifty and investments in the shares.

Source: Moneycontrol

Infrastructure sector may outperformer: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view in another significant decline infrastructure stocks may do that much better, so it is likely to be a relative outperformer.

Sukhani told CNBC-TV18, "The impression is that infrastructures charts are emerging out of that very sharp down move that we saw and if the market were to rally, I think construction and infrastructure would outperform. So to that extent the charts are better than some of the names we have discussed. But if in the sense that the Nifty has to rally for these stocks to perform but the good side is that in another significant decline if we have a bout of declines again then these stocks may do that much better, so infrastructure is likely to be a relative outperformer."

Disclosure: Analyst has delta neutral positions in the Nifty and investments in the shares.

Source: Moneycontrol

Do not buy TTML: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that one should not buy TTML.

Sukhani told CNBC-TV18, "On the chart there is nothing to buy in TTML but if our promoters are wise and they keep on getting these Japanese companies then certainly there is an arbitrage opportunity. You buy it hoping that there will be some kind of a rally. But beyond that the charts do not suggest anything in fact telecom itself except for MTNL is a big zero on the charts just now."

Disclosure: Analyst has delta neutral positions in the Nifty and investments in the shares.

Source: Moneycontrol

Hindalco has resistance at Rs 70: Agarwal

Sanjeev Agarwal, Head-Equity of Globe Capital Market is of the view that Hindalco has resistance at Rs 70.

Agarwal told CNBC-TV18, " In a current scenario all the dips like what you are getting today or maybe a little bit extended if you might get it till tomorrow also but after that the market should be positive and we should be taking a buy call on Hindalco. So this share had been beaten down very squarely in the backdrop of the metal price meltdown but now I feel the market will consolidate and these shares will also recover like as far as the Hindalco goes, I would just like to mention one of the level, which is having a strong resistance level like somewhere around Rs 70. If it is able to cross Rs 70 like we will be seeing a level somewhere close to Rs 90 odd. So that has been a very strong resistance around Rs 70, so Rs 70 has to be crossed for Hindalco to resume its uptrend."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Exit Hindalco above Rs 63-64: Tulsian

Investment Advisor SP Tulsian is of the view that trader on the short-term horizon keep exiting Hindalco above Rs 63 or Rs 64.

Tulsian told CNBC-TV18, "The entire problem started for Hindalco with the acquisition of Novelis. If you heard the Chairman saying that probably the breakeven or the problems with Novelis should get over maybe it will get extended by another year by December 31, 2009. With all the fall of aluminium to the extent of USD 2,000/tonne will definitely be advantageous for Novelis, while it will be disadvantageous for the Hindalco local operations because they are making the virgin metal here. So that will get balanced out and I do not think that the beating of the share to this level is justified if you have a longer-term horizon because whatever debt they had of about USD 3 billion, which they have only been able to mobilize part of the amount with the rights issue but recently they have again been able to raise USD 1 billion definitely all these problems should get over maybe in next six-months time."

He further added, "With every fall in the aluminium prices, Novelis will stand to gain maybe that will affect the operations of the company here on the domestic front but remember the cost of production to Hindalco is less than USD 1,000/tonne and even if the aluminium prices rules at around USD 2,000/tonne they will be in a comfortable position to make a quarterly profit of close to Rs 500-600 crore on an equity base of Rs 175 crore. So I do not think that at these prices, you have any problem in having the shares acquired at Rs 56-57, if you have a longer-term horizon of about 6-12 months. But as a trader on the short-term horizon you may keep exiting above Rs 63 or Rs 64 whenever you see that kind of price. But this is not the price or the level at which you should sell or you should go short or you should exit from your existing holding."

Disclosure: Analyst has holdings in Hindalco and GVK.

Source: Moneycontrol

Fortis Health has target of Rs 100: Maheshwari

Ashish Maheshwari, Director of Globe Capital Markets is of the view that Fortis Healthcare has target of Rs 100.

Maheshwari told CNBC-TV18, "Fortis Healthcare is one the largest player in private healthcare segment operating with 22 hospitals and 2,600 beds primarily in Northern India. The company came into the black last quarter after reporting losses for a few years. Besides this, erstwhile promoters of Ranbaxy have shown their focus area that it will be healthcare and the money, which they have got will be rooted through Fortis Healthcare for expanding the business. So in my view this is the company where they will not have dearth of cash for next 3-4 years.”

He further added, “This company is also having manageable debt portfolio and healthcare is a segment where be it economic upturn or downturn people would not like to compromise on quality of the treatment. We are also envisaging that because of current downturn overseas, there will be good amount of medical tourism, which is also going to happen in the next 2-3 years to India and Fortis being one of the largest player is going to get benefit. We have recommended this stock to our clients with a price target of Rs 100 in the next 12-months."

Disclosure: Analyst doesn't hold the above stock but has recommended it to the clients.

Source: Moneycontrol

DLF may slip to Rs 220: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that DLF may slip to Rs 220.

Bhambwani told CNBC-TV18, "Moving on to DLF, below Rs 245, which it has breached intraday, I think it has breached a critical short-term support level. It is headed lower to probably Rs 220 or lower."

Disclosure: Analyst doesn't hold the above stock.

Source: Moneycontrol

Below Rs 1150, RIL may slip to Rs 1000-1040: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that below Rs 1150, Reliance Industries, RIL may slip to Rs 1000-1040.

Bhambwani told CNBC-TV18, "Unwinding is taking place across the index heavyweights as well. Should Reliance Industries actually manage to test or violate the Rs 1,150 level, you could see it go down all the way down to Rs 1,000-1,040 level."

He further added, "Bharti is also appearing weak. There is some more downside to go before you could see any kind of buying support coming in. The level to watch on Bharti on a closing basis for today would be Rs 615."

Disclosure: Analyst doesn't hold the above stock.

Source: Moneycontrol

Correction over; downtrend continues: Sukhani

Sudarshan Sukhani of Technical Trends feels we are back into a bear market and the corrective uptrend that continued is now over and done with. “The intermediate uptrend that we were seeing so far is now done and over with. That was confirmed with the sharp momentum that we saw throughout the day and the lows at which we closed,” he said. The downtrend pattern, Sukhani said, now resumes now that the correction is over.

The market is going to be rangebound at 2,900-3,200 levels and 2,900 is likely to be taken, Sukhani feels. “2,600 is technical level, but it doesn’t have much visible support. If 2,600 breaks down then — I’m sorry to break this news — we are in a freefall.”

Here is a verbatim transcript of Sudarshan Sukhani's interview on CNBC-TV18.

Q: What did you make of the way the market broke down yesterday and what sort of levels do you start pegging below 2,900?
A: Yesterday, when the markets opened with a downside gap, I felt that the intermediate uptrend that we were seeing so far is now done and over with. That was confirmed with the sharp momentum that we saw throughout the day and the lows at which we closed. Now the scenario is: we were in a bear market. We have got a corrective uptrend that is now, to my reckoning, complete and done with. So the primary trend — the downtrend — resumes. As we stand now, there is a narrow trading range between 2,900 and 3,200. Trading ranges are likely to be broken down on the downside because the trend is down, so 2,900 will likely to be taken out today, tomorrow, whenever.
A theoretical target is 2,600 but it won’t hold because the 2,600 level doesn’t have any other visible support. So my impression is: if and when this trading range breaks down, if it breaks down then we are in for a freefall again. I am so sorry to say all this because I know it hurts everyone but this market is not going to stop at October lows if that happens.

Q: Two frontline stocks that got pummeled yesterday: Suzlon Energy and SAIL.
A: Suzlon Energy got pummeled yesterday because it is in a downtrend. It did not even show signs of life when we were having this small rally except for one day. So Suzlon is not a buying opportunity for traders, for investors, for anyone. We have to see how it pans out, builds a base.

SAIL has been underperforming the market. It has been underperforming as compared to Tata Steel. In a market like this, it is again not easy. I would say if at all somebody wants to go into metals, Tata Steel would be the safest of them.

Q: What do you see on the charts of some of the infrastructure names like IVRCL, which has had a good rally or a GMR Infra too?
A: The impression is that these charts are emerging out of that very sharp down move that we saw. If the markets rallied, construction and infrastructure would outperform. So to that extent the charts are better than some of the names we have discussed. But if in the sense that the Nifty has to rally for these stocks to perform, the good side is that in another significant decline — if we have a bout of declines again — then these stocks may do that much better. So infrastructure is likely to be a relative outperformer.

Q: A quick chart check on Punj Lloyd.
A: Punj Lloyd belongs to that infrastructure construction sector, which is now giving much better chart patterns. This is not going to go against the broad market, but if at all you have a sense that yes, something is going to go up, Punj Lloyd is the first stock that you should be buying.

Q: Assuming that we start somewhere around 2,900, can you still initiate a trade this morning or would you wait to see if those 2,850 kind of levels of last week are holding or not?
A: No. There is only one trade today and that is to go short. So a trader could go short at any level inside this trading range or even outside or below it with a proper money management method: keep a stop. My suggestion was earlier also and now too that the stops had to be wide enough to take care of intra-day volatility. The direction is more or less very clear it is on the downside.

Q: Tata Teleservices Maharashtra at just under Rs 18. How would you trade that?
A: On the chart, there is nothing to buy in TTML but if our promoters are wise and they keep on getting these Japanese companies, then certainly there is an arbitrage opportunity. You buy it hoping that there will be some kind of a rally. But beyond that the charts do not suggest anything in fact telecom itself except for MTNL is a big zero on the charts just now.

Q: What about the real estate pack? What would you do with the stock like DLF or Unitech that’s back to sub-Rs 50?
A: We do not buy them — that has been my consistent refrain and that remains valid even now. So the only other option is can we go and sell them, sell short that’s something a professional trader could consider doing on any rally. The real estate sector can go back and test the October lows even if the Nifty were not to do so there is a lot of weakness possible in that sector.

Q: From 2,860, we saw a mild pullback to 2,877. Do you think it will hold out this attempt at a resistance?
A: My impression is that while 2,877 can easily be broken there will be intra-day resistance. The markets have limits on the upside, so anyone who seems to be looking for a big rally today is going to get disappointed. So whether the resistance comes at 2,880 or 2,900 or X value it’s a different issue. That is not easy to say, but there will be resistance.

Disclosure:
I have delta neutral positions in Nifty and investments in shares.

Source: Moneycontrol

Liquidity crunch to haunt India Inc for next yr: Ratan Tata

Its time to pull up your socks - that seems to be the message sent across by Ratan Tata to the Tata group companies - which makes up for some of the largest companies of corporate India.

Here is a verbatim transcript of Kenan Machado’s comments on CNBC-TV18.

Ratan Tata, Chairman of Tata Sons, said the Tata companies’ foreign operations acquisitions were already facing problems in raising capital or line of credit for operations. He added that the Indian operations of the Tata Group companies already are or may soon face major problems in their access to credit domestically.

Tata Group companies are unable to raise equity capital due to depressed stock market and investor confidence erosion and liquidity will continue to be a major problem, accompanied by depression in consumer demand, Ratan Tata said. He does not expect this state of affair to improve over next 12 months and feels that failure to manage this crisis could result in irretrievable positions.

Tata Sons said that the senior management of Tata group companies have advised them to be sensitive and conscious of difficult financial circumstances and added that the management has asked them to focus on cash flow and conserve expenditure.

Though Ratan Tata did not explicitly name any of the companies - the expectations are that the companies within the group to which this message clearly applies is Tata Motors, Tata Steel and TCS. Tata Motors made the massive Jaguar-Land Rover acquisition and that itself is proving not so good in hindsight. Same is the case with Tata Steel with the Corus acquisition. Corus in fact is cutting down production by nearly 30%.

Tata Steel is now the only steel company in India who is not given any indication of cutting down production though steel demand has massively come down within India. So there tough times ahead especially for those companies which made large acquisitions when the entire bull market was in full flow essentially.

Source: Moneycontrol

Sep IIP up at 4.8%: Are we still staring at slowdown?

The September IIP, or index industrial production, has come in at 4.8% up from 1.3% during August and 6.98% year-on-year.

The manufacturing output is up at 4.8% compared to 7.45% year-on-year. The capital goods output is up at 18.8% against 20.9%; mining output is up at 5.7% against 4.9%.

The consumer durable output is up 13.1% compared to a fall of 7.3% year-on-year. The August industrial output is revised to 1.4% from 1.3%, on provisional basis.

P Chidambaram, Finanace Minister, said September IIP numbers are encouraging and growth in capital goods sector has been impressive and satisfactory. However, data collection must be improved and made more relevant, he added.

"[It is] certainly better than what I was expecting, I was expecting a IIP growth rate of around 3.5–4%,” said Gaurav Kapoor, Senior Economist, ABN Amro Bank. “The core sector numbers were better so that pointed towards a better IIP number this time. Obviously, there was fairly high statistical base effect at play, so the August number was low to a large extent on account of that,” he said.

Kapoor added that he didn’t see negative growth for IIP for the month of October. The October IIP may be in the range of 3.5–4%, Kapoor said, as consumer spending is expected to remain strong. We may see 50-100 basis points repo rate cut by end of the year, he added.

Anubhuti Sahay, Associate Economist – Global Research, Standard Chartered, however, cautioned that there could likely be negative IIP numbers in November given the shutdowns that were taking place. Sahay expects IIP numbers in the range of 2.5–3% for H2FY09.

On the industrial perspective, K Ravi Kumar, CMD, BHEL, said FY09 the average capital goods growth was likely to be good, but cautioned that FY10 capital good numbers could be impacted if the slowdown continues.

So how do bankers view the September set of numbers?

Samiran Chakrabarty of ICICI Bank said the September IIP number is more or less in line with expectations but uncertainty is still not over and added that we need large policy action to strengthen the economy

Indranil Pan of Kotak Mahindra Bank said the Sep IIP number is higher than his expectations. “However, overall macro risk to lower production is consistent. Many sectors like textiles, leather are likely to see massive slowdown in production and there are plenty of risks going forward. We see an average of 4% IIP this year,” Pan said.

Shubhada Rao, Chief Economist, Yes Bank, said the September number is in line with her expectations in terms of bounceback from August. “Some correction is expected in October. However the broad moderation in IIP will continue for the rest of the year and would expect immediate support from monetary and fiscal policy to arrest the pace of moderation,” she said.

Source: Moneycontrol

MF assets dip 18% in October, slips below Rs 5 trillion mark

Mutual fund industry witnessed a 18 per cent decline in its assets under management in October, plunging below the Rs 5-trillion mark Volatile market: Take the MF route
for the first time this year.

The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of over Rs 97,000 crore and dropped to Rs 4,31,901.42 crore at the end of October.

At the end of September, the average AUM had been Rs 5,29,102.92 crore, according to the data released by the Association of Mutual Funds in India.

The top five fund houses - Reliance MF, HDFC MF, ICICI Prudential, UTI MF and Franklin Templeton lost a combined over Rs 45,000 crore in the month from their assets.

According to analysts, plunge in the stock market and huge redemptions in liquid schemes by corporates and banks has led to the sharp decline in assets of fund houses.

Reliance Mutual Fund suffered the biggest fall of Rs 15,400.75 crore in its average AUM at the end of October. However, despite a 17.81 per cent fall in its AUM, it continues to be the top fund house in the country with assets valued at Rs 71,093.70 crore at the end of October, against Rs 86,494.46 crore in the previous month.

"The sharp fall of about 25 per cent in valuations of stocks in the secondary market and redemptions in equity as well as liquid schemes and lack of any fresh inflows have led to the decline in the assets under management in the past month, " Taurus Mutual Fund Director R K Gupta said.

Further, HDFC MF retained the slot of the second biggest fund house in the country despite a Rs 6,519 crore dip in its AUM. HDFC MFs AUM dropped to Rs 45,479.37 crore from Rs 51,998.28 crore in September.

ICICI Prudential, which lost out its second ranking to HDFC MF, saw its value shrinking by Rs 10,590 crore to Rs 39,182.45 crore at the end of October.

Source: EconomicTimes

Mutual funds see outflow of Rs 47,000 crore in October

Mutual fund investors pulled out as much as Rs 47,000 crore in October -- the highest redemption from MF schemes in a month so far this
fiscal -- triggered by the meltdown in equity markets.

At the end of October, investors redeemed funds worth Rs 46,793 crore, with maximum of withdrawals coming in in fixed income plans, a monthly report by Association of Mutual Funds of India (AMFI) said.

The redemptions in mutual fund schemes have been on an increase in the current fiscal, and in September they had witnessed withdrawals to the tune of Rs 45,655 crore.

Fixed income plans, with assured returns annually, saw a maximum pullout of Rs 52,820 crore as on October, followed by equity funds investing in stocks worth Rs 706 crore.

Analysts said fixed maturity plans have witnessed panic redemption in October on concerns about the credit quality of debt papers held by these schemes.

However, liquid or money market schemes, with higher liquidity and short maturity period was the flavour with investors as the scheme witnessed repurchases worth Rs 3,256 crore.

In contrast, last month the liquid scheme witnessed a redemption of Rs 19,675 crore, following fixed income plans, which had witnessed redemption pressure of Rs 26,665 crore in September.

Analysts said the plunge in the stock market and huge redemptions in liquid schemes by corporates and banks has led to the sharp decline in assets of fund houses.

The combined assets under management of the mutual fund industry saw an 18 per cent fall in October, dipping below the Rs five-trillion mark for the first time this year.

"The sharp fall of about 25 per cent in valuations of stocks in the secondary market and redemptions in equity as well as liquid schemes, and lack of any fresh inflows have led to the decline in the assets under management in the past month," Taurus Mutual Fund Director R K Gupta said.

Also, Gilt funds, which invest in government securities, and Gold Exchange Traded Fund saw inflows of Rs 3,725 and Rs 140 crore, respectively.

Gilt funds are mutual fund schemes floated by asset management companies with exclusive investments in government securities.

According to data on the Securities and Exchange Board of India website, mutual funds have been net buyers to the tune of Rs 1,432 crore in equities in October.

The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of over Rs 97,000 crore and dropped to Rs 4,31,901.42 crore at the end of October.

Source: EconomicTimes

German economy will grind to halt in 2009: Experts

A blue-ribbon panel of experts said on Wednesday German economic growth would grind to a halt in 2009 and blasted Berlin's plans to shore up Europe's biggest economy as a mere fig leaf.

The group of five economic advisors handed Chancellor Angela Merkel their annual report in which they predicted no economic growth next year and said the government's announced measures would be of little help.

Gross domestic product (GDP) will grow 0.0 percent next year, after an expected gain of 1.7 percent this year, said the economists known as the Five Wise Men until a woman, Beatrice Weder di Mauro, joined in 2004.

Berlin recently cut its forecast for economic growth to a mere 0.2 percent in 2009 as the financial crisis continues to send shock waves around the world.

The panel said that "the conditions are in place to talk about recession", given the brutal nature of the slowdown.

The government will publish figures for third-quarter growth Thursday and if it contracted for the second three-month-period running, as widely expected, the world's top exporter will already be officially in recession.

The economists dismissed a recent multi-billion-euro bundle of tax breaks and state investment as a "hotch-potch of isolated projects designed to give the impression that the government is doing something."

It said the package was far too small to have a real impact, and unfairly targeted at specific industries such as automaking thanks to heavy lobbying.

Merkel acknowledged her left-right government was grappling with a crisis that was difficult to manage or fully understand and said Berlin was doing its best to help the country weather the storm.

"We are in a situation now in which it is extremely difficult for all of us to know exactly what the future will bring," she said as she accepted the report.

The experts noted that Germany's "real economy" had as yet remained relatively unscathed but it forecast that unemployment would rise 1.1 percentage points next year.

Last week Merkel's cabinet approved a raft of measures aimed at stimulating the economy with an extra 50 billion euros (63 billion dollars) in investment in 2009 and 2010, in what she called a "bridge" for the economy until activity picks up.

The stimulus measures were approved less than three weeks after Merkel's government rushed through parliament a 480-billion-euro rescue package to save the country's banks from collapse.

Merkel has stressed the stimulus measures are "targeted," after Berlin was highly critical of proposals by French President Nicolas Sarkozy -- whose country holds the current EU presidency -- for Europe-wide state intervention on a massive scale.

But economists are sceptical that the measures will do the trick.

The daily Financial Times Deutschland said in an editorial Wednesday based on leaked copies of the report that it hoped Merkel and her cabinet would heed the panel's advice.

"The experts' report could be the last chance to move the coalition towards a re-think," it said. "If the government doesn't even listen to a committee of experts it appointed itself then that would really give cause for despair."

Source: EconomicTimes

Hiring to fall short of expectations by 30 per cent

New job generation in the organised sector is expected to fall short of predictions by 30 percent this year following the global meltdown, a leading recruitment company said here Wednesday.

"As per our survey of 1,000 companies in 22 sectors early this year, around one million new jobs were expected to be created in 2008. But after the global meltdown coupled and domestic issues like high inflation, it will be 30 percent lower than expectations," K. Pandia Rajan, managing director of recruitment firm Ma Foi Group, told reporters.

According to him, there is deceleration in hiring. "Companies are playing a wait-and-watch game. They say there could be reverse or flat growth in hiring in the coming months," Rajan said.

As per a Ma Foi dipstick survey, large companies have slashed new hiring by around 22 percent, though layoff is the least preferred option.

"Employee benefits have taken a hit in the banking, financial services, insurance and information technology (IT) sectors," Rajan said.

As per the survey, sectors such as construction, real estate and consultancy have been badly hit, where as healthcare and pharma sectors could end up witnessing healthy hiring trends.

There is no single reason that has affected hiring across sectors.

"In the case of banking and financial services sectors, the stock market crash seems to have affected fresh hiring, whereas for other segments, inflation and the rise in input costs are some of the reasons," Rajan said.

According to him, around 400,000 permanent jobs may become temporary, which augurs well for flexi-staffing companies.

He said Ma Foi, now part of world's second largest recruitment group Randstad of the Netherlands, will offer specialised solutions to expand its market share.

Source: EconomicTimes

Economic woes increase, crisis deals in trouble

LONDON (REUTERS): A number of deals designed to cure the global financial crisis were in danger of unravelling on Wednesday, with losses mounting at banks and economies showing further signs of serious deterioration.

The euro zone, Britain, China and South Africa reported data supporting the arrival of a global recession and prompting expectations of further interest rate cuts.

"We are certainly prepared to cut ... again, if that proves to be necessary," Bank of England Governor Mervyn King told a news conference after UK inflation was forecast to be minimal.

The International Monetary Fund withheld official backing for a $6 billion bailout plan for Iceland, the Financial Times reported, putting loans to the North Atlantic island nation under threat.

Some of British banking giant Barclays' biggest shareholders have threatened to vote against a planned 7 billion pound ($10.83 billion) capital raising unless it improves the terms of the deal, British newspapers said.

The latter follows a row over the crisis-driven planned purchase of British lender HBOS by Lloyds TSB with leading banking figures arguing a more competitive deal should be sought.

Aides to U.S. President-elect Barack Obama, meanwhile, were playing down reports of tension with the Bush administration over help for the stricken car industry.

A feud within Japan's cabinet over whether rich people should get payouts as part of a stimulus package looked set to be put aside after delaying the plan for weeks.

Questions were also beginning to be asked about just how much help governments can give.

"The U.S.' financial resources are already stretched and a flood of new demands may overwhelm a government already staring down at a record budget deficit next year," UBS economists said in a note.

SEESAW

Financial markets seesawed again under the combined pressure of a global economic downturn and the worst financial crisis in 80 years.

Wall Street looked set for a flat to negative start and European shares dipped in and out of positive territory after losing more than 4 percent on Tuesday.

There were more corporate profit warnings with General Motors shares falling on Tuesday to levels not seen since World War Two.

"Whether it's economic indicators or company news, it's just too awful," said Takashi Ushio, head of the investment strategy division at Marusan Securities in Tokyo.

The financial crisis continued to take its toll with France's Natixis SA announcing falling investment banking revenue and Italy's UniCredit posting a sharp drop in quarterly net profit.

In Germany, troubled property lender Hypo Real Estate Holding AG posted a pretax loss of 3.1 billion euros ($4 billion) in the third quarter, more than analysts had expected. Losses and property writedowns ate into its income.

Dutch group ING posted its first-ever quarterly loss due to impairments on stocks and bonds, counterparty losses and property writedowns.

Govt may cut fuel price if crude, currency stable

NEW DELHI (Reuters) - India may consider cutting fuel prices if global crude prices and the rupee stabilise, the oil minister, Murli Deora, said on Wednesday.

India has so far rejected calls to cut prices arguing it raised rates by only 10 percent in June when crude costs had soared, unlike Indonesia, which increased fuel prices by 30 percent in May and is now considering lowering them.

U.S. crude has fallen to $59, down 60 percent from a record high of more than $147 in July, easing the burden on cash-strapped state firms, which sold fuel at low state-set rates when oil was at its peak.

But gains for Indian refiners have been partly offset by the depreciation of the Indian rupee, which fell last month to a record low of 50.15 per dollar as foreign funds fled the tumbling stock market, and was trading at 48.7 on Wednesday.

"We will review fuel prices once the rupee-dollar parity and crude oil stabilise," Deora told reporters.

The federal government fixes the price of petrol, diesel, kerosene and cooking gas to make fuels affordable and to control inflation.

The Indian government, facing key state polls in coming weeks and general elections in 2009, is under pressure to reduce prices.

But oil firms such as Indian Oil Corp, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd are resisting this as their debt burden has increased and quarterly earnings fell sharply.

BSE Sensex falls 3.1 pct as downturn fears weigh

NEW DELHI (Reuters) – The BSE Sensex fell 3.08 percent on Wednesday, taking its losses over two days to 9.5 percent as investor fears of a global recession and a local downturn remained dominant, despite some data meeting expectations.

Tata Teleservices (Maharashtra) rose 7.6 percent ahead of confirmation that Japan's NTT DoCoMo would buy 26 percent of its parent, Tata Teleservices, for $2.7 billion, but sector leaders Bharti Airtel and Reliance Communication fell 4.1 percent and 2.1 percent respectively.

Reliance Industries dropped 3.7 percent to 1,162.15 rupees, its weakest close since Oct. 28, and ICICI Bank slipped 8.4 percent to a two-week closing low of 397.90 rupees. The two stocks account for more than 20 percent of the main index.

The market got a boost from data showing industrial production rose an annual 4.8 percent in September, above the previous month's 1.4 percent, but, with economists saying a global recession and credit crunch would weigh on the local economy, the gains could not be sustained.

"Industrial production data was not bad in the current context. Macro pictures also look better to me given commodity prices are falling," said Gajendra Nagpal, CEO at Unicon Financial.

"But this selling pressure, gives me the impression that people are not convinced and they want to get out after every rise. And this supply overhang will continue."

The main 30-share BSE index fell 303.36 points to 9,536.33, its lowest close since Oct. 29, with 28 components falling. It hit a three-year low of 7,697.39 on Oct. 27.

In the broader market, 1,703 losers were ahead of 827 gainers on volume of 283 million shares.

The 50-share NSE index fell 3.07 percent to 2,848.45, its lowest close since Oct. 29.

"There are still so many negatives in the environment that any bounce back will be difficult to sustain," said Neeraj Dewan, director at Quantum Securities.

The market is shut on Thursday for a local holiday.

Economists have cut forecasts for Asia's third-largest economy, with many expecting growth to slow to 7 percent or lower in the year to March 2009, sharply down from rates of 9 percent or higher clocked in the past three fiscal years.

Traders said a sustainable recovery in the market was unlikely in the absence of massive investments by foreign funds, which have sold a net $12.7 billion of Indian stocks so far in 2008 after investing a record $17.4 billion last year.


STOCKS THAT MOVED

* Tata Group firms Tata Steel and Tata Motors fell 3 percent and 3.6 percent respectively, after news the conglomerate had put acquisitions on hold.

* Software exporters Tata Consultancy Services and Infosys Technologies rose after the rupee fell 2.4 percent against the dollar, its biggest single-day percentage fall since February 1996.

* Oil & Natural Gas Corp fell 3.2 percent to 711.55 rupees after its chairman said it would lose 3-4 billion rupees ($60-$80 million) a year if it followed a finance ministry directive to keep 60 percent of its surplus cash with state-run banks.

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.