Friday, 14 November 2008

Buy BHEL, target of Rs 1520: Emkay Global

Emkay Global Financial Services has maintained its buy rating on Bharat Heavy Electricals (BHEL) with a target of Rs 1520 in its November 12, 2008 research report. "Over the recent past BHEL stock has outperformed significantly. It outperformed Sensex by 22.1% over past 3 months and 12.3% over past 1 month. Similarly it has outperformed BSE Capital goods index by 20.2% over past 3 months and by 10.7% over past 1 month. Decent Q1 and Q2FY2009 numbers and significant drop in commodity prices can be attributed to this performance."

"Our earnings estimate for BHEL stands at Rs 73 for FY2009 and Rs 94 for FY2010. The stock trades at 18.7X its FY2009 and 14.6X its FY2010 earnings. Over a longer term we remain positive on BHEL and maintain our BUY with price target of Rs 1520. However we believe that near term order slowdown will impact stock performance," says Emkay Global Financial Services' research report.

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

Source: Moneycontrol

Buy Unitech, target of Rs 73: KRChoksey

KRChoksey Research has recommended a buy rating on Unitech with a target price of Rs 73 in its November 5, 2008 research report. "The sales for the Q2FY09 were stagnant at Rs 983.1 crore marginally down 3.0% y-o-y and 4.7% q-o-q but the operating margins is up by 1190 bps to 62% from 50%. We believe most of the concerns are already priced in, and recommend a BUY with a target price of Rs 73. At the target price the stock would be valued at 5.9x FY09E EPS of Rs 12.31, implying an upside potential of 47.17%," says KRChoksey's research report.

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

Source: Moneycontrol


PINC Research has recommended a hold rating on Housing Development and Infrastructure (HDIL) in its November 12, 2008 research report. "Net sales rose 3% YoY to Rs 4.8 billion. Net profit was lower by 16.4% on a QoQ basis. We have valued HDIL’s projects at Rs 285/sh. Over the next few quarters matching the fund inflows and outflows can be a concern. The airport project is expected to add another Rs 25/sh, taking its total NAV to Rs 310/sh."

"We assign a 50% disc. to NAV citing challenging property markets especially in the B2B segment (HDIL sells TDRs to other developers who themselves are under considerable pressure) and tight liquidity conditions. At CMP of Rs 109, HDIL trades at a 30% disc. to its value/sh estimate of Rs 155. Despite this, we revise our recommendation downwards to ‘HOLD’ and would revisit our recommendation on more visibility on revenues, debt obligations/management and interest rate front," says PINC's research report.

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

Source: Moneycontrol

Buy Hindustan Zinc, target of Rs 504: KRChoksey

KRChoksey Research has recommended a buy rating on Hindustan Zinc with a target price of Rs 504 in its November 7, 2008 research report. "Net sales of the company declined from Rs 1,984.0 crore to Rs 1,790.5 crore; negative growth of 9.8% (y-o-y). We recommend a BUY on the stock with a target price of Rs 504," says KRChoksey's research report.

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

Source: Moneycontrol

Buy Nava Bharat Ventures, target of Rs 247: KRChoksey

KRChoksey Research has maintained its buy rating on Nava Bharat Ventures with a target price of Rs 247 in its November 7, 2008 research report. "Net sales surged by 157.0%(YoY) to Rs 398.3 crore in Q2FY09 against Rs 151.3 crore in Q2FY08. On back of company’s diversified business model, power business initiatives, substantial land value holding at Hyderabad & Secundrabad and improving sugar prices, we maintain our BUY rating on the stock with the target price of Rs 247. Though we are cautious of ferro alloys business slow down, but we believe the concerns are already been discounted heavily in the stock prices," says KRChoksey's research report.

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

Source: Moneycontrol

Sell Hindalco: Motilal Oswal

Motilal Oswal has downgraded its rating on Hindalco Industries to sell in its November 12, 2008 research report. "Adjusted 2QFY09 PAT increased 12% YoY to Rs 7.2 billion. We are factoring in aluminium prices of USD 2,200/ton for 3Q and USD 2,000/ton for 4Q. As a result, we expect consolidated FY09E PAT to increase 5.2% YoY to Rs 20.8 billion, while EPS will decline 26.3% YoY to Rs 11.9 owing to dilution on account of the rights issue. FY10E EPS will decline further by 49% YoY to Rs 6.1 after factoring in aluminium prices of USD 2,000/ton. We believe the company’s major expansion programs to raise aluminium capacity by 3x to 1.5mtpa in next five years will get delayed for want of funds. The stock trades at 9.2x FY10E EPS. Downgrade to Sell," says Motilal Oswal's research report.

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

Source: Moneycontrol

Sell Shoppers Stop, target of Rs 161: KRChoksey

KRChoksey Research has recommended a sell rating on Shoppers Stop with a target price of Rs 161 in its November 6, 2008 research report. "SSL's standalone sales grew by 23% y-o-y to Rs 334.2 crore mainly driven by increase in number of stores, conversion ratio (to 29% in Q2FY09 from 25% in Q2FY08) and average ticket size ( 5.9% y-o-y). We are estimating SSL to incur net loss of Rs 60.4 crore in FY09. We recommend a SELL to the company's stock with a target price of Rs 161," says KRChoksey's research report.

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

Source: Moneycontrol

Sell NALCO: Motilal Oswal

Motilal Oswal has recommended a sell rating on National Aluminium Company (NALCO) in its November 12, 2008 research report. "Nalco is expanding the capacity of smelter from 345ktpa to 460ktpa by addition of 240pots. Margins are likely to come under pressure due to softening of aluminium and alumina prices. FY09 EPS is estimated at Rs 24.1 after factoring in aluminium prices of USD 2,200/ton for 3QFY09 and USD 2,000/ton for 4QFY09. FY10E EPS will decline 7.3%YoY to Rs 22.3 factoring in aluminium prices of USD 2,000/ton and alumina prices of USD 250/ton. Other income will contribute 25% to the earnings. The stock trades at P/E of 7.3x FY09E and 7.8x FY10E and EV/EBITDA of 4.3x FY09E and 3.9x FY10E. Sell," says Motilal Oswal's research report.

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

Source: Moneycontrol

Buy Welspun Gujarat, target of Rs 190: Asit C. Mehta

Asit C. Mehta has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target price of Rs 190 in its November 13, 2008 research report. "WGSRL has an order book of USD 2 billion, which provides revenue visibility until FY10. Current orders sufice current capacity. As new capacity becomes operational, the company should attract orders. However, with the current global credit crisis we expect new orders to come in at a slower pace."

"We believe that the company will benefit in the near term on account of the capex it has incurred in the pipes segment. We therefore maintain a positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 190, which is equivalent to a P/E multiple of 5 times its FY10E EPS," says Asit C. Mehta's research report.

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

Source: Moneycontrol

Buy Sanwaria Agro Oils, target of Rs 45: KRChoksey

KRChoksey has recommended a buy rating on Sanwaria Agro Oils with a target of Rs 45 in its report. The geographical benefits which the company enjoys on account of all its plants being located in the state of MP (largest producer of soybean seeds) is a key advantage over its peers. Further, SAOL will benefit from setting up of wind turbine generators which will bring down the operating cost and thus enhance margins by 230bps. We expect the profit margins to improve going forward as interest rates cool down."

"At CMP of Rs 32, the stock is trading at 6.4x FY08 earnings of Rs 4.98. We recommend a “BUY” rating on the stock with a price target of Rs 45 based on our P/E valuation, with an upside potential of 41% from current levels. At the target price, the stock would be valued at 6.6x FY09 EPS of 6.8," says KRChoksey's research report.

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

Source: Moneycontrol

Buy Indraprastha Gas, target of Rs 130: KRChoksey

KRChoksey Research has recommended a buy rating on Indraprastha Gas with a target price of Rs 130 in its November 13, 2008 research report. "IGL reported net sales of Rs 215.2 crore, up 23.6% Y-o-Y, on the back of increase in volume of CNG by 22.7% and PNG by 26.7% to 117.2 million Kg and 13.3 mmscm respectively. We recommended a BUY on the stock with target price of Rs 130, giving an upside potential of 23%. At the target price the stock would be valued at 9.0x and 7.6x its FY09E & FY10E EPS of Rs 14.5 and Rs 17.0 respectively," says KRChoksey's research report.

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

Source: Moneycontrol

Buy Orchid Chemicals, target of Rs 176: Reliance Money

Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target of Rs 176 in its November 14, 2008 research report. "Orchid Chemicals & Pharmaceuticals Ltd (Orchid) reported 19% growth in consolidated revenues on a higher base to Rs 3484.5 million during Q2FY09. As per revised estimates, we expect the Revenue and profit (excluding forex loss) would grow at a CAGR of 15% and 16%, respectively during FY08-10E. Thus, the revised EPS (excluding forex loss) stands at Rs 14 and Rs 22.9 for FY09E and FY10E, respectively."

"But the positive part of Orchid is that FCCBs have sufficient time horizon for conversion and the company does not hedge its revenues, which could benefit the company from the weakening Rupee scenario in the near term. In line with our changed estimate based on consolidated numbers and in order to align our valuation with market valuation, we are revising our target price. In fact, to capture the market wide correction in valuations, we have reduced the earning multiple by 35% and revise target price to Rs 176 (i.e. 8x FY10E EPS),Buy," says Reliance Money's research report.

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

Source: Moneycontrol

Tata Tele-NTT DOCOMO deal: What's it about?

NTT DOCOMO Inc would pick up 26% stake in Tata Teleservices for USD 2.7 billion.

CNBC-TV18's Sunita Nagpal and Varinder Bansal explain in detail, the nature of the deal:

The deal is a combination of fresh equity and stake sale by existing shareholders. The deal values Tata Teleservices at USD 10.4 billion. TTSL has a subscriber base of 30 million.

NTT DOCOMO says it would acquire 20% stake via fresh equity and 6% from exisiting shareholders. The company has said that the open offer price would be as per the Sebi’s (Securities and Exchange Board of India) prescribed minimum price on relevant date. Tata Teleservices would use the funds infused for strategic expansion and marketing efforts.

TTSL Shareholding:
Tata Sons: 45.4%
Temasek : 9.9%
C Sivasankaran: 8%
Tata Communications: 15%
Tata group companies: 21.7%
DOCOMO is strong in 3G services. The 3G auction is likely in January 2009. The foreign partner is important for Tata Teleservices’ 3G plans.

Tata Tele’s FY08 revenues stood at Rs 5378 crore. It’s net loss was Rs 9177 crore (Carried forward loss was Rs 7363 crore).

Tata Teleservices has 29.3 million subscribers. Its FY08 revenues are at Rs 5378 crore. It offers CDMA services in 20 circles. The company’s GSM launch is in early 2009.

Tata Teleservices holds 38% stake in Tata Tele Maharastra. DOCOMO’s indirect stake in TTML would be 9.88%. DOCOMO and Tata Sons would make an open offer for 20%. The open offer price is at Rs 24.70; the acceptance ratio would be at 58%. There is current freefloat of 34%.

Tata Teleservices can use the funds for capex and 3G auction. TTSL and TTML has announced a capex of USD 2 billion in the next 24 months. Out of this, USD 1.5 billion for rolling out GSM network and remain expanding CDMA network.

DOCOMO says TTSL GSM roll out to provide significant upside. Its penetration would increase from current 30% to 54% by 2012.

The acceptance ratio is seen at 58.2%. The residual value per share is Rs 16.5 per share, if purchase price is Rs 20 per share and cost is assumed 1.5% per month for four months. The open offer is closing on January 27 and un-tendered shares will come to account in February. Most of the arbitrageurs are waiting for stock to cool down. The arbitrageurs are advising covered call strategy as 25 call trading at 20 paisa and 20 call at Rs 1.15.

Vedika Bhandarkar, MD and Head-Investment Banking at JPMorgan India, said, “The opportunity is to partner with a nation wide carrier. A lot of the recent transactions which we are referring to are really new licenses where there is no existing operator, no existing management team and all of it needs to be built up. So this is an opportunity to partner with a nation wide carrier which is no 5 or no 6 in terms of coverage in terms of subscriber base and so there is a lot of head start which DoCoMo gets right on day one. Its not like they have to come and build a very robust network has already been built.”

Source: Moneycontrol

IVRCL Infra has resistance at Rs 160: Gujral

Technical Analyst, Ashwani Gujral is of the view that IVRCL Infrastructure and Projects has support at Rs 110 and resistance at Rs 160.

Gujral told CNBC-TV18, "Infrastructure stocks are all getting into some sort of ranges, they had this huge plunge in October but now it seems that they may form higher ranges something like JP associates, which will probably find support at around Rs 64 and face resistance at around Rs 95, IVRCL will find a support at Rs 110 and resistance back at Rs 160, so infrastructure may start doing a lot better to what it was doing last month. So PSU banks or Infrastructure wherever you have commodity prices or lower interest rates coming in, those sectors would outperform and commodities are likely to continue to underperform."

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

Source: Moneycontrol

Suzlon Energy has resistance at Rs 75-76: Gujral

Technical Analyst, Ashwani Gujral is of the view that Suzlon Energy has resistance at Rs 75-76.

Gujral told CNBC-TV18, "Suzlon Energy is in some sort of a range, it’s got support around Rs 54 to Rs 55 zone and again it’s got resistance upwards at around Rs 75 to Rs 76. These stocks are going to remain volatile in this Rs 20-30 range whenever you have an open interest cut they will come down about 10% to 15% and on an up day the same stock will go up 8%. But overall they will remain in this Rs 30 kind of range from Rs 45 to about Rs 75."

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

Source: Moneycontrol

Rel Comm has support at Rs 175-180: Gujral

Technical Analyst, Ashwani Gujral is of the view that Reliance Communications has support at Rs 175-180.

Gujral told CNBC-TV18, "Bharti Airtel continues to remain in the range of Rs 580 to about Rs 750. On the downside Reliance Communications has support at Rs 175 to Rs 180, for upside about Rs 260 to Rs 265 seems to be a resistance. Tata Communications strangely seems to be the strongest stock, its really outperforming the sector and could probably head towards Rs 550 to Rs 560 in the days to come."

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

Source: Moneycontrol

Exit TTML above Rs 24-25: R Shah

Rajen Shah of Angel Broking is of the view that one can exit TTML above Rs 24-25.

Shah told CNBC-TV18, "One should offload TTML in open offer. It reported about Rs 500 crore of loss in March ’06 and about Rs 250 crore in March ’07 even last year it reported about Rs 150 crore this year also its going to report about Rs 75 crore or Rs 80 crore of net loss. So fundamentally TTML was never worth more than Rs 20 but it was only because Tata Teleservices was holding about 65% stake in TTML that was keeping the stock in action. Right now one may just hold it and maybe if there is a good rally in the market and the stock goes beyond Rs 24-25 levels then he/she can offload the shares otherwise its better to tender in the open offer."

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

Source: Moneycontrol

Hold Axis Bank for long term: R Shah

Rajen Shah of Angel Broking is of the view that one can hold Axis Bank with long term perspective.

Shah told CNBC-TV18, "Fundamentally Axis Bank looks okay at the current levels; it’s quoting at about ten times March ’10 earnings and about 1.5 times March ’10 book value. But the FII (Foreign Institutional Investor) holding in this bank is about 28%. So in the short-term it could be a drag on the stock because some of the FIIs continue to do relentless selling and that could see even Axis Bank stock also been dumped. So fundamentally its fine, one can hold on for a longer period of time but in the short-term on account of high FII holding maybe the stock could drift a little from here."

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

Source: Moneycontrol

Stay away from Reliance Industries: Sukhani

Technical Analyst, Sudarshan Sukhani is of the opinion that traders should stay away from Reliance Industries.

Sukhani told CNBC-TV18, "Reliance does appear to be the most vulnerable stock. The stock has no support at all. The support in fact is so much lower that the stock can go for a free fall and still not find anything to hold on to. So it would not be a buying opportunity even on a dip or a crash, traders should stay away from it."

Source: Moneycontrol

Do not buy telecom stocks: Sukhani

Technical Analyst, Sudarshan Sukhani is of the opinion that one shouldn't buy telecom stocks.

Sukhani told CNBC-TV18, "Bharti remains in a trading range, now inside the trading range it is moving up and down and slowly pushing on the downside. Neither is Reliance Communications showing a good chart pattern, so telecom is not a buying opportunity."

Source: Moneycontrol

Pharma, FMCG look safe: D Mehta

Dipan Mehta, Member, BSE/NSE is of the view that pharmaceuticals and FMCG is looking safe at this point of time.

Mehta told CNBC-TV18, "There are a few defensives sectors and the one that comes to my mind instantly is Indian pharmaceuticals given that they benefit from a depreciating rupee. At the same time the prices over there, product prices have not corrected as much. So we could see that volumes remaining stable for that segment and profit margins moving on account of better gains on the foreign exchange currency side, so that seems to be a safe sector at this point of time. Also FMCG is also something, which seems to be pretty stable at this point of time. We have seen decent results coming out for the September quarter for most of the FMCG companies. So these are two sectors, which appear to be safe at this point of time and investors could park and be overweight in these two segments."

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

Source: Moneycontrol

Reliance can go down by another Rs 125: Mathew

Technical Analyst, E Mathew is of the view that Reliance can go down by another Rs 125.

Mathew told CNBC-TV18, "From here Reliance has the ability to drag the market further down and in the process Reliance itself can go down by another Rs 125 odd. But once again I would like to reiterate that next week is very crucial and if on Monday, Reliance and Tata Steel, both continue to remain weak then I am afraid that this 2,810 level, which we are all looking at so intently, that would not hold out."

Disclosure: It is safe to assume that I & my clients may have an investment interest in the stocks/sectors that have been spoken about.

Source: Moneycontrol

Tata Steel may slip to Rs 130-135: Mathew

Technical Analyst, E Mathew is of the view that Tata Steel may slip to Rs 130-135.

Mathew told CNBC-TV18, "I remember having given a sell call on Tata Steel when it was Rs 550 and my target at that particular point of time was around about Rs 150. But this time around, I am really worried, because today if Tata Steel closes even somewhere around about that Rs 170 zone it is pretty worrying because there is a chance that if we do not recover next week we may see Tata Steel possibly even go down to Rs 130-135. That of course would invite a lot of huge contrarian buying etc. But for short-term traders who have been going long on Tata Steel, they would have to undergo a lot of pain if today the stock closes somewhere around the 170 zone."

Source: Moneycontrol

Week ahead: Outcome of G20 meet holds key

The outcome of the two-day G20 meet scheduled on Friday and Saturday in Washington will set the tone for the global markets in the week ahead. Political uncertainty ahead of state elections and uncertainty about a US Treasury plan to forgo buying bad mortgage-related investments to buy stakes in US lenders, may weight on the domestic bourses.

The market may get support at lower level on expectations of a further cut in interest rates with inflation falling to single digit. Softening inflation will enable the Reserve Bank of India (RBI) to further cut interest rates to create more liquidity in a slowing economy. Lower interest rates boost stocks as they help rise in corporate bottomline by way of lower borrowing costs. RBI has already signaled an easier rate regime and cut a key short term rate earlier this month along with cuts in bank reserve ratios to free up funds for lending.

Inflation, as measured by the wholesale price index, declined sharply to 8.98% in the week ending 1 November 2008 from 10.72% in the previous week mainly due to sharp drop in oil prices

The investors will also keenly watch developments at the G20. The G20 political leaders in will discuss ways to protect the global economy from a repeat of the worst financial crisis in 80 years. Prime Minister Manmohan Singh, who left on Thursday night, 13 November 2008 for the G20 meet, is ready with his recommendation to tackle the global meltdown. Singh said International financial institutions like the IMF and World Bank should be strengthened to ensure that the fallout on developing countries is minimal. He also stressed that in a coordinated approach towards monetary and fiscal policies, India plans to work in tandem with China, Brazil, Mexico and South Africa within the G20.

The Indian economy is witnessing a slowdown after a strong growth in the past three years. An indication of the slowdown in economy and trade was a 5% fall in excise and customs collections to Rs 18664 crore in October 2008.

Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. FII outflow reached Rs 50,432.30 crore in calendar 2008, so far, till 11 November 2008.

In what will be a crucial and last popularity test ahead of parliamentary elections due early next year, six Indian states will elect new governments in staggered elections beginning Friday, 14 November 2008. Voters from Muslim-majority Jammu and Kashmir in the northern tip to Christian-majority Mizoram in the northeast will see polling along with Rajasthan, Delhi, Madhya Pradesh and Chhattisgarh. If Congress does well, the government may use the momentum to call early elections in February 2009. A poor showing could see the government wait until April 2009 or May 2009, the end of its term.

Source: ndtvprofit

Euro zone sinks into first-ever recession

The 15 countries that use the euro are officially in a recession, the European Union said on Friday, as growth shrank for a second straight quarter because of the world financial crisis and sinking demand.

EU statistics published on Friday show the euro zone shrank by 0.2 per cent in both the third and second quarters compared to the quarter before. Two successive quarters of negative growth is the usual definition of a recession.

Two of the region's largest economies — Germany and Italy — are in recession, Eurostat said, while France narrowly escaped, growing just 0.1 per cent in the third quarter after shrinking in the second quarter.

The spending slowdown and tight credit conditions are starting to hurt: carmakers said Friday that sales are slumping even as euro-zone inflation calms from record highs. So far, euro economies have not seen the jobless rate surge — but the EU executive Commission estimates that it will rise steadily over coming months.

Business and consumer confidence figures show business and consumers are worried, with companies readying to make cutbacks and households trying to save more as they worry about job losses. Both are hurt by tighter credit conditions that raise the cost of borrowing money.

It is the first recession since the euro currency was launched in 1999, when the European Central Bank took control of interest rates. That is the major lever of economic growth because changing borrowing costs can stoke or cool growth.

The last major recession to hit European economies was in 1993 when each country controlled its own monetary policy and could react individually to economy problems.

Euro-zone nations face more trouble in acting alone now and must consult the EU executive before launching major programs to kickstart the economy with state subsidies.

Germany, the largest euro economy, shrank 0.5 per cent in the third quarter as its main source of growth — exports — dropped and it could no longer rely on household demand to power the economy. Italy was also down 0.5 per cent. Spain also shrank in the third quarter.

They join Ireland, in recession since growth dropped in the second quarter. Third quarter figures for Irish growth are not yet available.

Outside the euro area, EU members Estonia and Latvia — until recently part of the Baltic boom — are in recession.

Britain and Hungary also contracted in the third quarter, remaining a quarter short of official recession. British unemployment is rising, with telecommunications firm BT saying Thursday it would cut 10,000 jobs by March, and the country is bracing for a deep downturn amid a collapsed housing market.

The spending slowdown is hitting major purchases hard with car sales across Europe slumping by 14.5 per cent last month, EU carmakers said Friday. The European carmakers' association ACEA said car sales in October dropped for the sixth month in a row from a strong year in 2007.

Ireland and Spain — both suffering badly from the bursting of a housing bubble — saw dramatic falls with Irish sales halving and Spanish sales down 40 per cent. Europe's biggest car market, Germany, was down 8.2 per cent from weak sales a year ago. France was down 7.4 per cent, Britain dropped 23 per cent and Italy 18.9 per cent.

Fast-growing eastern European nations that had pulled in bumper sales are no longer doing so with overall sales in the 10 EU newcomer states down 3.3 per cent despite an increase in Poland.

Major manufacturers saw sales dive, with Volkswagen AG down 7.6 per cent, Peugeot Citroen 16.3 per cent, Ford Motor Co. 11.9 per cent, General Motors Co. 25.2 per cent, Renault 19.1 per cent, Daimler AG 16 per cent and Japan's Toyota was down 23.6 per cent.

But there is some good news for shoppers as plummeting oil prices brought yearly inflation down to 3.2 per cent in October, Eurostat said, confirming an Oct. 31 first estimate.

The rate of price increases has been gradually falling from a record high of 4 per cent in June and July but is still well above the European Central Bank's guideline of just under 2 per cent that it looks to when it considers hiking or lowering interest rates.

Source: ndtvprofit

Mastek looking for acquisitions worth $10-$40 mln

MUMBAI (Reuters) - Software services firm Mastek Ltd is looking for acquisitions worth $10-$40 million, a top company official said on Friday.

The company would look to acquire the target in insurance and healthcare services, group Chief Financial Officer R S Desikan told Reuters in an interview.

The company plans to fund the acquisition through internal accruals and has 2 billion rupees in cash and cash equivalents, he said.

"Cash is not an issue for acquisition," he said.

Mastek would also be relatively insulated from the current financial crisis as its exposure to pure banking services was under 10 percent, he added.

BSE Sensex sheds 1.6 pct ahead of G20, Infy falls

BANGALORE (Reuters) – The BSE Sensex fell 1.58 percent on Friday to its lowest close in more than two weeks as the gloomy global economic outlook wilted early gains, with wary investors eyeing this weekend's G20 meeting for some direction.

Infosys Technologies dropped 3.3 percent to a one month closing low of 1,217.90 rupees after CLSA said the tech bellwether might miss its revenue guidance in dollar terms for the December quarter on a worsening global financial crisis.

Tata Teleservices (Maharashtra) gained 12.2 percent to 20.19 rupees. NTT DoCoMo Inc and Tata Sons have priced their joint open offer for up to 20 percent of Tata Teleservices at 24.70 rupees a share.

"There is unwinding happening at higher levels because investors are not feeling confident at all in carrying positions overnight," said Amit Khurana, head of institutional equities at Colin Stewart.

"Investors are not putting too much bet on any ground-breaking announcement coming out of the G20 meeting."

The 30-share BSE index closed down 150.91 points at 9,385.42, its lowest close since Oct. 29, with 23 of its stocks falling. It rose as much as 3.04 percent in opening deals and then dropped as much as 2.82 percent during trade.

"The international outlook is not very clear at this point and, therefore, this kind of volatility will continue," said Amitabh Chakraborty, president equities at Religare Securities.

The index, which has lost more than half its value in 2008 to be one of the worst Asian performers, declined 5.8 percent in the week after rising in the last two consecutive weeks.

Even a sharp fall in annual inflation to 8.98 percent as at Nov. 1 from 10.72 percent a week earlier, expected to open the door for further cuts in interest rates, proved little comfort to the market.

Brokerage India Infoline said in a report any rally would be short-lived as the undertone remained sluggish due to financial sector gloom and persistent concerns over the global economy.

"All eyes will be fixed on G20 meeting in Washington, as leaders of top countries will talk on what needs to be done to solve the current financial crisis," it said.

The G20 summit of industrialised and emerging economies will explore ways to deal with the world's biggest financial crisis in decades. Leaders will be reminded of the deepening economic gloom by a report expected to show the euro zone has slipped into recession.

Economists have lowered their forecasts for India's economy, with many now expecting growth to slow to 7 percent or less in the year to March 2009, sharply slower than rates of 9 percent

and higher clocked up in the past three fiscal years.

Shares in Bharti Airtel rose 3 percent to 650.15 rupees. Citigroup said it had a "buy" rating on India's top mobile operator with a price target of 900 rupees on expected stable revenue share despite the entry of new players.

In the broader market, 1,593 losers outpaced 934 gainers on normal volume of 286 million shares.

The broader 50-issue NSE index fell 1.34 percent to 2,810.35.

Citigroup to cut at least 10,000 jobs - WSJ

Reuters - Citigroup Inc is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world, the Wall Street Journal said, citing people familiar with the matter.

Citigroup Chief Executive Vikram Pandit and his deputies have instructed managers to slash their budgets for employee compensation by at least 25 percent, the paper said citing the people.

"We will continue to carefully manage our head count levels as we re-engineer the company in line with our stated goal and market realities," Citigroup spokeswoman Christina Pretto told the paper.

Citigroup announced last month it cut 11,000 jobs in the third quarter, bringing the total number of job cuts in 2008 to 23,000.

Citigroup aims to shrink its workforce to about 290,000 employees by next year from 352,000 as of Sept 30, the WSJ said, citing another person.

The paper also reported that Citigroup is notifying some credit card customers that their interest rates are being raised by an average of three percentage points.

A person familiar with the strategy estimated that the rate increases would apply to less than 20 percent of Citigroup's card portfolio, according to the paper.

A Citigroup spokeswoman told Reuters that she had nothing further to add to the company's comments reported by the Journal.

For Yahoo's Yang, news keeps getting worse: Eric Auchard

LONDON (Reuters) - Jerry Yang's elevation to chief executive at Yahoo Inc (YHOO.O: Quote, Profile, Research) after a long period of decline at the Web pioneer had the air of a fairy tale where the noble prince grows up and restores his kingdom's faded glory.

But Yang has worn his leadership like an ill-fitting coat since coming to power last year, appearing reluctant to make the dramatic restructuring moves analysts and investors have long considered vital to get Yahoo to reaccelerate its growth.

Yang made no concessions to the growing chorus of angry investors and media pundits calling for his ouster at a Web industry conference in London this week.

Avoiding questions about Microsoft's recent rebuff to renewed merger talks between the two, Yang posed for photos in front of dancing singers in oddly chosen surgical costumes singing "Staying Alive," the never-surrender disco anthem.

It was the kind of goofy humor cultivated by a company that turned a yodel into one of the biggest brands in Internet media but lately has seen little go its way as it attempts a turnaround in the midst of a 15-month-long downturn in online advertising.

In his speech to the Internet Advertising Bureau, Yang reiterated plans to boost Yahoo's audience and drive more advertising sales. But his underlying message was of deeper and deeper gloom for his company and the Web industry.

The slide into global recession looks likely to delay the adoption of advertising on mobile phones and on the latest generation of Internet televisions, Yang told the conference. It's an open question whether advertisers will keep spending on Web search advertising if consumers stop buying, he added.

"Yang is basically capitulating unless he can articulate a strategy for how to survive the next two years," said Jeffrey Lindsay, an Internet analyst with brokerage Sanford C. Bernstein in New York.

As leader, Yang, who recently turned 40, has failed to spark the kind of turnaround that companies like Apple Inc (AAPL.O: Quote, Profile, Research), Dell Inc (DELL.O: Quote, Profile, Research) and Starbucks Inc (SBUX.O: Quote, Profile, Research) saw to greater or lesser degrees once their legendary founders or early leaders returned to the top job.

Unlike Steve Jobs who used NeXT Computer, his intervening company, to test out many of the hardware and software ideas he later implemented in his triumphal return to Apple, Jerry never really stepped outside the company he founded 14 years ago.

Given a second shot at power, Jobs and Michael Dell focused relentlessly on operating efficiency, something Yang appears reluctant to do on the scale demanded by rapid industry change, voracious competition, and a falling economy.

"I don't think Yahoo has made the kind of drastic restructuring it needs to win investor confidence back," said Dona Roche-Terry, a managing partner at executive recruiter CT Partners in London. She formerly ran Heidrick & Struggles' North American telecommunications recruiting practice.

The economy has admittedly given Yang no breaks. As the top supplier of online brand advertising -- accounting for almost half its sales -- Yahoo has suffered more than rival Google Inc as advertisers slash spending on corporate marketing campaigns. This is because Google focuses largely on Web search advertising seen as more effective for advertisers to locate new customers.

Yang has lost credibility with investors after he scotched Microsoft's bid to acquire his down-on-its-luck company earlier this year. Yahoo shares trade just above $10, less than a third of Microsoft's best offer six months ago for Yahoo of $33.

For much of the year, Yahoo has traded at the mercy of whatever kindness or cruelty Microsoft's outspoken CEO Steve Ballmer bestowed on the hobbled company.

At hints of renewed interest the stock rockets 10 or 20 percent in a matter of days. When Microsoft's interest appears to cool, the shares tank again. It is now at 5-1/2 year lows.

It's hard to imagine a Yahoo without Jerry Yang.

Critics underestimate the stabilizing role Yang could play in helping seal a deal with Microsoft, were it to renew its offer. The upheaval created by pushing aside Yang in favor of a new Yahoo leader would likely delay Microsoft and Yahoo getting back to business. Besides, as a 3.8 percent owner of Yahoo, Yang will remain a player in any major transaction.

Most Wall Street analysts think it is only a matter of time before Microsoft and Yahoo start talking again about a deal for some or all of the company -- albeit at a far lower price, reflecting sharp market declines.

Lindsay believes we have entered an awkward waiting period before Microsoft renews its pursuit.

His theory is that Microsoft is waiting until early in 2009 for the new U.S. presidential administration and regulatory regime of Barack Obama before braving the fight to win passage for such a mega-merger from competition authorities.

Microsoft is no longer likely to pursue a public offer but will approach the Yahoo board to negotiate a private offer.

The plucky company Jerry started with co-founder David Filo 14 years ago as a navigational guide to "cool sites" on the Web would then become another brand in a stable that includes Windows, Office, Xbox and Zune.

Competitive pressures to consolidate established players in order to compete with the growing market dominance of Google have overrun the sentimental notion that a young prince would grow into a wise king in a land called Silicon Valley.

RBS mulls axing 3,000 investment bank jobs - source

LONDON (Reuters) - Royal Bank of Scotland is considering cutting 3,000 jobs in its investment banking arm, a person familiar with the matter said on Friday.

An RBS spokeswoman said in a statement: "We are constantly reviewing our business model to ensure that we are aligned to market conditions and we would take any action accordingly."

RBS employs 170,000 people globally, including 104,000 in Britain.

It is the latest in a string of companies to announce large-scale job losses as Britain faces a deepening depression. Telecoms company BT said this week it would cut 10,000 jobs, while many banks have also been reducing headcount over the past year.

Earlier this month RBS warned it faced more writedowns in its global banking and markets division and faces rising bad debts this quarter, which could drag it to its first ever full-year loss this year.

Shares in British banks have plunged this year during a global economic crisis which has forced the UK government step in to recapitalise several large financial institutions, including RBS.

Investors fear banks will suffer once again as Britain's economy enters a recession.

'British Telecom may axe more jobs'

UK-based telecom major British Telecom may slash more jobs in addition to the 10,000 lay-offs announced yesterday, a report said today.

"BT chief executive Ian Livingston has signalled he is ready to axe more jobs on top of the 10,000 announced yesterday to maintain profits through the looming recession," the UK daily 'The Telegraph' said in a report today.

Quoting Ian Livingston 'The Telegraph' said, "The decision to reduce BT's global headcount by about 6 per cent was 'long planned' and not a 'knee-jerk' reaction to the financial crisis."

According to the report, Ian Livingston expects the country's economy to be in recession for two years but he would do everything he can to ensure the company continues to deliver healthy profits.

"BT has cut its headcount from 250,000 at privatisation in 1984 to 160,000 today and indicated there is scope for more job losses. The company said 4,000 employees have already left the business this financial year and a further 6,000, mostly in the UK, will go by the end of March," he was quoted as saying.

The move to cut jobs comes after the company posted an 11 per cent decline in pre-tax profits at 590 million pounds for the September quarter, which excludes one-off items.

'The Telegraph' noted that British Telecom expects the job cuts to cost 160 million pounds to 170 million pounds.
"It does not anticipate compulsory redundancies. The company also confirmed it has come to a landmark pensions agreement with the unions that could cut its yearly contributions by 100 million pounds.

The telecom entity also proposes raising the retirement age, basing pensions on average, rather than final salary and increasing member contributions," the report added.

Source: EconomicTimes

Sun to cut up to 6,000 workers, 18% of staff

Sun Microsystems Inc says it will cut up to 6,000 of its workers, or 18 percent of its global staff.

Sun also says its software chief, Rich Green, has resigned.

The company has fallen into a deep slump as sales of its high-end servers have collapsed.

The Santa Clara, Calif.-based company said Friday the job cuts will include between 5,000 and 6,000 employees over the next year.

The company added that it expects to incur total charges in the range of $500 to $600 million over the next twelve months.

It says the cuts will save $700 million to $800 million annually and it expects to begin realizing cost savings in Q3.

Sun says about $375 to $450 million of charges will be incurred within its current fiscal year 2009 and restructuring plan is aimed at reducing costs by about $700 to $800 million anually.

Source: EconomicTimes

Eurozone, Hong Kong fall into recession

The economy of the 15 nations sharing the euro has slumped into recession for the first time ever, EU data released on Friday revealed, 2008: Year of global financial crisis

with GDP falling 0.2 percent in the second and third quarters.

The 27-nation EU as a whole avoided the same fate only by recording zero, rather than negative, growth in the second quarter

On a 12-month comparison, the eurozone economy grew 0.7 percent in the third quarter, down sharply from 1.7 percent in the previous quarter, the official Eurostat agency said.

Hong Kong falls into recession

Hong Kong slipped into recession in the third quarter as the global economic slowdown took its toll on the financial hub, government figures showed Friday.

Hong Kong's gross domestic product fell 0.5 percent from the previous quarter on a seasonally adjusted basis, following a fall of 1.4 percent in the second quarter, the Census and Statistics Department said in a statement.

The standard definition for recession is two consecutive quarters of falling GDP.

Italy follows Germany into recession

Italy's economy contracted by 0.5 percent in the third quarter, data showed on Friday, certifying that the euro zone's third largest economy, like its larger peer Germany, has been in recession since the spring.

The 0.5 percent fall in gross domestic product -- a bigger drop than expected and the steepest decline since the end of 1998 -- followed a 0.4 percent drop between April and June (revised from an originally reported -0.3 percent).

Italy thus met the technical definition of recession -- two consecutive quarters of negative growth -- for the first tine since the start of 2005. Official statistics agency ISTAT reported GDP was down 0.9 percent year-on-year, following a 0.2 percent drop in the previous three months (revised from -0.1 percent).

Source: EconomicTimes

Haryana minister is country's richest woman: Forbes

A low-profile minister in the Bhupinder Singh Hooda government in Haryana has emerged as the richest woman in the country.

Savitri Jindal, 58, who is the chairperson of the Jindal Group, has been named as the richest woman in India in the latest Forbes list of richest Indians.

Jindal is minister of state in the Hooda government looking after revenue, disaster management, consolidation, and rehabilitation and housing ministries.

According to Forbes, Savitri Jindal has a net worth of $2.9 billion, and is ranked 12th overall among the top-40 richest Indians who include the likes of Reliance Industries chairman Mukesh Ambani, expatriate steel tycoon Lakshmi Mittal, Reliance-ADAG chairman Anil Ambani and realty baron KP Singh.

Jindal's net worth, according to Forbes, came down from $8.5 billion in 2007 to 2.9 billion, mainly owing to the global financial meltdown. Last year, she was ranked 11th.

Her late husband, O.P. Jindal, had set up the Jindal empire from Hisar town in Haryana nearly four decades ago.

O.P. Jindal, who himself was a cabinet minister in the Hooda government, died when his private helicopter crashed near Saharanpur in Uttar Pradesh Mar 31, 2005. His cabinet colleague Surender Singh, son of former Haryana chief minister and union defence minister Bansi Lal, was also killed in the crash.

The Rs.1,500 billion Jindal group has interests in the iron, steel and power sectors. The group has nearly 50 plants in India and abroad, including South American countries like Chile, Bolivia and Peru.

Savitri Jindal was inducted as a minister of state with independent charge in the Hooda government just weeks after her husband died. She contested the Hisar assembly seat, earlier represented by her husband, in the 2005 by-election and won it by a huge margin.

The Jindal family mainly operates from Hisar, 300 km from Chandigarh. The family runs a well known school, Vidya Devi Jindal School, in the town.

RIL-RNRL case: Govt says it will finalise gas price

Mukesh Ambani-led Reliance Industries (RIL) cannot sell gas to anybody at a price less than $4.20 per British Thermal Units without its approving the pricing formula, the government informed the Bombay High Court on Friday through an affidavit.

Division bench of Justices J N Patel and K K Tated was hearing the dispute between RIL and Anil Ambani-owned Relaince Natural Resources (RNRL) over gas supply master agreement pertaining to supply of natural gas from RIL's Krishna Godavari reserves to RNRL's power plants at a predetermined price.

The government affidavit, filed by the Ministry of Petroleum and Natural Gas undersecretary, S Sundaram, stated that the sale of gas "at a price less than $4.20 per mmBTU is not envisaged as per the Empowered Group of Ministers' decision taken in accordance with Production Sharing Contract (between government and RIL)".

Earlier RIL had argued that it could not supply gas to RNRL at $2.34 per mmBTU, which RNRL argued was in accordance with the memorandum of understanding between Ambani brothers before the Reliance demerger. RIL had contended that the price at which RNRL sought the gas was subject to government's approval, which in turn, the government endorsed in its affidavit filed today.

RNRL had, however, said that government would only be concerned with the price of its (government's) share of the gas under the production sharing contract.

But the government's affidavit stated that price formula approved by eGOM and subsequently accepted by RIL, is applicable to 'all gas', including government's share as well as the gas which RIL will sell to other parties.

RNRL counsel Ram Jethmalani, however, will cross examine Sundaram, if allowed by court, on November 27 when the matter will come up for further hearing.

Source: EconomicTimes

Global crisis to hit India economy more in 2009: WEF

NEW DELHI: The global downturn will pressurise the Indian economy more next year and the government has to speed up reforms and boost investment to 2008: Year of global financial crisis
sustain high growth rates, a report said on Friday.

The report jointly prepared by World Economic Forum and Confederation of Indian Industry also said India could see a sharp outflow of capital, and a fall in share and asset prices due to the global financial crisis.

The report was released ahead of the annual India Economic Summit starting Nov. 16 in New Delhi, where top government officials are expected to interact with heads of global firms.

"India's dependence on capital flows to finance its current account deficit is a macroeconomic risk and the global crisis could generate a sharp increase in capital outflows and a reduction in the availability of finance," it said.

"Clearly, the global economic picture will be harsher next year and there will be greater pressures on Indian economy."

The global credit crisis has rattled Indian markets as foreign investors sold shares worth more than $12.5 billion so far this year while the rupee fell by more than 20 percent.

"It (global crisis) could also weaken the balance sheets of the financial institutions, cause a further fall in share and asset prices, and challenge the macroeconomic situation due to shrinking global growth," WEF said.

Indian policymakers expect a moderation in economic growth to less than 8 percent in the year to March 2009, compared with 9 percent recorded in 2007/08 fiscal year.

Earlier this month, Prime Minister Manmohan Singh cautioned that the global financial crisis could be more severe and prolonged, and the government would take all necessary steps -- monetary and fiscal -- to protect growth.

"A tighter environment may also help speed reforms and encourage greater efficiency," WEF said, adding a great deal of political will and dialogue with different stakeholders would be required to take reforms forward.

"...India's growth is still strong relative to other economies and its growth story will continue to be one that will unfold over decades rather than years," it added.

Source: EconomicTimes

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.