Weak global cues triggered weak opening of the Indian market. The
BSE 30-share Sensex was down 183.40 points. Asian stocks edged
lower after the proposed $700 billion bailout deal for the US
financial sector ran into unexpected roadblocks. News of the
biggest ever US bank failure compounded the bearish sentiments,
with the US government brokering a last-ditch purchase of thrift
Washington Mutual by JPMorgan
IT and realty stocks led the fall on the domestic bourses in early
trade. All the sectoral indices on BSE were negative.
Infrastructure construction firm Jaiprakash Associates was the top
gainer in the Sensex pack.
Inflation remained steady, the latest data showed. Inflation based
on the wholesale price index rose 12.14% in 12 months to 13
September 2008, unchanged from the previous week's annual rise,
government data released after trading hours on Thursday, 25
September 2008, showed. Inflation for the week ended 19 July 2008
was revised upwards to 12.54% from 11.98%.
Asian market, which opened before Indian market, were negative. Key
benchmark indices in China, Hong Kong, Japan, South Korea,
Singapore and Taiwan were down by between 0.6% to 2.4%.
At 10:20 IST, the BSE 30-share Sensex was down 183.40 points or
1.35% to 13,363.78. The index shed 214.05 points at the day's low
of 13,333.13, hit in early trade. The Sensex fell 60.98 points at
day's high of 13,486.20, hit at the onset of trading session.
The S&P CNX Nifty was down 59.85 points or 1.46% to 4050.70.
The BSE Mid-Cap index was up 0.68% at 5,058.45 and the BSE
Small-Cap index was up 0.16% at 6,040.54.
The market breadth was weak on BSE with 564 shares advancing as
compared to 935 that declined. 53 shares remained unchanged.
Infrastructure construction firm Jaiprakash Associates rose 2.87%
at Rs 127.05.
Hindustan Unilever (up 1.84% at Rs 254.20), and Reliance
Infrastructure (up 0.56% at Rs 882.50), were the other major gainer
in Sensex pack.
TCS (down 3% at Rs 3% at Rs 669.90), ONGC (down 3% at Rs 1039),
Grasim Industries (down 2.97% at Rs 1812), Mahindra & Mahindra
(down 2.46% at Rs 545.05), and Tata Steel (down 2.15% a tRs
474.35), were the major lowers from the Sensex pack.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) fell 0.47% at Rs 2015.50.
India's second largest software exporter by sales Infosys
Technologies fell 1.86% at Rs 1477.
India's largest private sector bank by market capitalisation ICICI
Bank rose 2.89% at Rs 578.75.
Private sector lender Axis Bank was the most active stock on BSE.
The stock fell 0.79% at Rs 716 on a turnover of Rs 60.17 crore.
The US Congress struggled to find agreement on modifying the Bush
proposal to attack the housing market crisis. The Bush
administration, last week, proposed a $700 billion financial rescue
package, aimed at staving off the collapse of the US financial
system. Meanwhile, a group of conservative Republican lawmakers
proposed an alternative mortgage insurance plan.
In a major development, JPMorgan Chase acquired the banking assets
of Washington Mutual late on Thursday, 25 September 2008, after the
troubled thrift was seized by federal regulators, marking the
biggest bank failure in the United States and the latest stunning
twist in the ongoing credit crisis.
US stocks surged on Thursday, 25 September 2008, boosted by reports
the US Congress had reached an agreement in principle on the $700
billion plan to buy bad debt from banks. The Dow Jones industrial
average jumped 196.89 points, or 1.82%, at 11,022.06. The Standard
& Poor's 500 Index was up 23.31 points, or 1.97%, at 1,209.18. The
Nasdaq Composite Index rose 30.89 points, or 1.43%, at 2,186.57.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1050.38 crore on Thursday, 25
September 2008. Domestic funds bought shares worth a net Rs 605.59
crore.
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. In India, FIIs sold
shares worth a net Rs 7357.20 crore this month (till 24 September
2008). The outflow has reached Rs 35871 crore in calendar year 2008
Friday, September 26, 2008
Pre Market Report 26/09/2008
The market may edge lower tracking weakness in Asian stocks as a proposed $700 billion bailout deal for the US financial sector stalled in Washington. The market sentiment has been hit by a sustained selling by foreign institutional investors.
Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.6% to 2.4%.
The US Congress struggled to find agreement on modifying the Bush proposal to attack the housing market crisis. The Bush administration, last week, proposed a $700 billion financial rescue package, aimed at staving off the collapse of the US financial system. Meanwhile, a group of conservative Republican lawmakers proposed an alternative mortgage insurance plan.
In a major development, JPMorgan Chase acquired the banking assets of Washington Mutual late on Thursday, 25 September 2008, after the troubled thrift was seized by federal regulators, marking the biggest bank failure in the United States and the latest stunning twist in the ongoing credit crisis.
A deep financial crisis engulfed the global markets last week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse. Early this week Goldman Sachs Group Inc and Morgan Stanley became bank holding companies after investors last week lost confidence in their freewheeling, high-risk broker model.
Back home, inflation remained steady, the latest data showed. Inflation based on the wholesale price index rose 12.14% in 12 months to 13 September 2008, unchanged from the previous week's annual rise, government data released after trading hours on Thursday, 25 September 2008, showed. Inflation for the week ended 19 July 2008 was revised upwards to 12.54% from 11.98%.
As per provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 1050.38 crore on Thursday, 25 September 2008. Domestic funds bought shares worth a net Rs 605.59 crore.
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. In India, FIIs sold shares worth a net Rs 7357.20 crore this month (till 24 September 2008). The outflow has reached Rs 35871 crore in calendar year 2008.
Meanwhile, the odds of the US-India civil nuclear cooperation agreement being approved by the US Congress improved on Thursday, 25 September 2008, when a key lawmaker embraced a bill to end the three-decade ban on nuclear trade with India. House of Representatives Foreign Affairs Committee Chairman Howard Berman introduced a bill to approve the deal identical to Senate legislation, dropping his own competing version and eliminating any need to reconcile the two.
Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.6% to 2.4%.
The US Congress struggled to find agreement on modifying the Bush proposal to attack the housing market crisis. The Bush administration, last week, proposed a $700 billion financial rescue package, aimed at staving off the collapse of the US financial system. Meanwhile, a group of conservative Republican lawmakers proposed an alternative mortgage insurance plan.
In a major development, JPMorgan Chase acquired the banking assets of Washington Mutual late on Thursday, 25 September 2008, after the troubled thrift was seized by federal regulators, marking the biggest bank failure in the United States and the latest stunning twist in the ongoing credit crisis.
A deep financial crisis engulfed the global markets last week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse. Early this week Goldman Sachs Group Inc and Morgan Stanley became bank holding companies after investors last week lost confidence in their freewheeling, high-risk broker model.
Back home, inflation remained steady, the latest data showed. Inflation based on the wholesale price index rose 12.14% in 12 months to 13 September 2008, unchanged from the previous week's annual rise, government data released after trading hours on Thursday, 25 September 2008, showed. Inflation for the week ended 19 July 2008 was revised upwards to 12.54% from 11.98%.
As per provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 1050.38 crore on Thursday, 25 September 2008. Domestic funds bought shares worth a net Rs 605.59 crore.
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. In India, FIIs sold shares worth a net Rs 7357.20 crore this month (till 24 September 2008). The outflow has reached Rs 35871 crore in calendar year 2008.
Meanwhile, the odds of the US-India civil nuclear cooperation agreement being approved by the US Congress improved on Thursday, 25 September 2008, when a key lawmaker embraced a bill to end the three-decade ban on nuclear trade with India. House of Representatives Foreign Affairs Committee Chairman Howard Berman introduced a bill to approve the deal identical to Senate legislation, dropping his own competing version and eliminating any need to reconcile the two.
Thursday, September 25, 2008
US Stocks rise on bailout hopes; credit remains tight
NEW YORK (AP) -- Financial markets were mixed Thursday as lawmakers moved closer to hammering out a deal aimed at reviving the crippled financial system. The Dow Jones industrial average rose more than 200 points on optimism about the deal but a credit market squeeze remained as doubts about the proposed plan's effectiveness drove demand for short-term, safe-haven assets.
To help ease credit markets, the Federal Reserve early Thursday issued more than $20 billion in collateral such as Treasury bills in exchange for dollars to help meet demand for safe assets.
Meanwhile, disappointing readings on employment and demand for big-ticket manufactured goods, as well as a sobering forecast from General Electric Co., were underscoring the broad effects of the more than year-old credit crisis.
But stock investors were hopeful that a $700 billion bailout plan would win approval, albeit with some important changes, following two days of testimony on Capitol Hill by the country's top economic leaders. The momentum intensified Thursday as President Bush summoned congressional leaders to a meeting aimed at securing the legislation.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged lawmakers on Tuesday and Wednesday to quickly sign off on the plan, which would help prop up the economy by removing billions of dollars in risky mortgage-related assets from financial firms' balance sheets. The president highlighted the urgency in a national address Wednesday night.
White House officials have yielded to a key demand by congressional leaders, agreeing to include widely supported limits on pay packages for executives whose companies benefit. Major elements are still being worked out, including how to phase in the mammoth cost of the package and a plan to let the government take an ownership stake in troubled companies as part of the rescue.
Strained credit markets tightened, suggesting investors are waiting to see the details.
Demand remained high for the 3-month Treasury bill, considered the safest short-term investment, with the yield trading at 0.47 percent, down from 0.49 percent late Wednesday. That means investors are still willing to earn the slimmest of returns in exchange for a safe place to put their money. The yield on the benchmark 10-year Treasury note rose to 3.84 percent from 3.81 late Wednesday.
In another sign of credit market tightness, the benchmark three-month London Interbank Offered Rate, a bank-to-bank lending rate known as LIBOR, jumped 0.29 percentage point to 3.77 percent.
In midmorning trading, the Dow Jones industrial average rose 236.80, or 2.19 percent, to 11,061.97. The Dow fell 563 points, or 4.95 percent, in the first three sessions this week.
Broader stock indicators also rose Thursday. The Standard & Poor's 500 index rose 22.86, or 1.93 percent, to 1,208.73, and the Nasdaq composite index rose 38.32, or 1.78 percent, to 2,194.00.
The dollar was mixed against other major currencies, while gold prices fell slightly.
Light, sweet crude for November delivery fell 6 cents to $105.67 on the New York Mercantile Exchange.
Meanwhile, the Labor Department said the number of people requesting jobless benefits increased by 32,000 to a seasonally adjusted 493,000 last week, the highest level in seven years and much greater than analysts' expectations of 445,000. Hurricanes Ike and Gustav added about 50,000 new claims in Louisiana and Texas, the department said.
The Commerce Department said sales of new homes fell sharply in August to the slowest pace in 17 years. The average sales price also fell by the largest amount on record. New homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales rate since January 1991.
The department also said orders for manufactured goods sank in August by the largest amount in seven months as demand for both airplanes and cars sank. Durable goods orders fell by 4.5 percent last month, far worse than the 1.6 percent decline that economists expected and the biggest drop since a 4.7 percent fall in January.
GE fell 74 cents, or 3 percent, to $23.85 after lowering its forecast for third-quarter and full-year earnings, citing unprecedented weakness and volatility in the financial services markets.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 103.9 million shares.
The Russell 2000 index of smaller companies rose 5.34, or 0.77 percent, to 703.10.
Overseas, Japan's Nikkei stock average was down 0.90 percent. Britain's FTSE 100 rose 0.27 percent, Germany's DAX index rose 1.31 percent, and France's CAC-40 added 1.60 percent.
To help ease credit markets, the Federal Reserve early Thursday issued more than $20 billion in collateral such as Treasury bills in exchange for dollars to help meet demand for safe assets.
Meanwhile, disappointing readings on employment and demand for big-ticket manufactured goods, as well as a sobering forecast from General Electric Co., were underscoring the broad effects of the more than year-old credit crisis.
But stock investors were hopeful that a $700 billion bailout plan would win approval, albeit with some important changes, following two days of testimony on Capitol Hill by the country's top economic leaders. The momentum intensified Thursday as President Bush summoned congressional leaders to a meeting aimed at securing the legislation.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged lawmakers on Tuesday and Wednesday to quickly sign off on the plan, which would help prop up the economy by removing billions of dollars in risky mortgage-related assets from financial firms' balance sheets. The president highlighted the urgency in a national address Wednesday night.
White House officials have yielded to a key demand by congressional leaders, agreeing to include widely supported limits on pay packages for executives whose companies benefit. Major elements are still being worked out, including how to phase in the mammoth cost of the package and a plan to let the government take an ownership stake in troubled companies as part of the rescue.
Strained credit markets tightened, suggesting investors are waiting to see the details.
Demand remained high for the 3-month Treasury bill, considered the safest short-term investment, with the yield trading at 0.47 percent, down from 0.49 percent late Wednesday. That means investors are still willing to earn the slimmest of returns in exchange for a safe place to put their money. The yield on the benchmark 10-year Treasury note rose to 3.84 percent from 3.81 late Wednesday.
In another sign of credit market tightness, the benchmark three-month London Interbank Offered Rate, a bank-to-bank lending rate known as LIBOR, jumped 0.29 percentage point to 3.77 percent.
In midmorning trading, the Dow Jones industrial average rose 236.80, or 2.19 percent, to 11,061.97. The Dow fell 563 points, or 4.95 percent, in the first three sessions this week.
Broader stock indicators also rose Thursday. The Standard & Poor's 500 index rose 22.86, or 1.93 percent, to 1,208.73, and the Nasdaq composite index rose 38.32, or 1.78 percent, to 2,194.00.
The dollar was mixed against other major currencies, while gold prices fell slightly.
Light, sweet crude for November delivery fell 6 cents to $105.67 on the New York Mercantile Exchange.
Meanwhile, the Labor Department said the number of people requesting jobless benefits increased by 32,000 to a seasonally adjusted 493,000 last week, the highest level in seven years and much greater than analysts' expectations of 445,000. Hurricanes Ike and Gustav added about 50,000 new claims in Louisiana and Texas, the department said.
The Commerce Department said sales of new homes fell sharply in August to the slowest pace in 17 years. The average sales price also fell by the largest amount on record. New homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales rate since January 1991.
The department also said orders for manufactured goods sank in August by the largest amount in seven months as demand for both airplanes and cars sank. Durable goods orders fell by 4.5 percent last month, far worse than the 1.6 percent decline that economists expected and the biggest drop since a 4.7 percent fall in January.
GE fell 74 cents, or 3 percent, to $23.85 after lowering its forecast for third-quarter and full-year earnings, citing unprecedented weakness and volatility in the financial services markets.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 103.9 million shares.
The Russell 2000 index of smaller companies rose 5.34, or 0.77 percent, to 703.10.
Overseas, Japan's Nikkei stock average was down 0.90 percent. Britain's FTSE 100 rose 0.27 percent, Germany's DAX index rose 1.31 percent, and France's CAC-40 added 1.60 percent.
Muhurat Trading session on account of Diwali
In pursuance of clause 2.3 and 2.4 of chapter 2 of part A of the Capital Market Trading Regulations and circular no.: NSE/CMO/063/2007 dated December 14, 2007 (Download No. NSE/CMTR/9908) and without prejudice to the applicable provisions of the Securities Contracts (Regulation) Act, 1956 and other relevant statutes, the Exchange hereby notifies the special trading session for muhurat trading on account of Diwali on Tuesday, October 28, 2008. The market timings for muhurat trading session for Normal / RDM/ Odd Lot Market shall be as follows:
Normal / RDM/ Odd Lot Market Open : 18:15 hrs
Normal / RDM / Odd Lot Market Close : 19:15 hrs
Closing Session start : 19:35 hrs
Closing Session end : 19:45 hrs
Normal / RDM/ Odd Lot Market Open : 18:15 hrs
Normal / RDM / Odd Lot Market Close : 19:15 hrs
Closing Session start : 19:35 hrs
Closing Session end : 19:45 hrs
Post Market Report:25/09/2008
Intense selling across the board dragged the key benchmark indices
lower at the fag end of the session. The BSE 30-share Sensex
provisionally ended 151.58 points down. The market had earlier
recovered to some extent on bottom fishing. All the sectoral
indices on BSE, barring BSE Auto index, were negative. India's
third largest software exporter by sales Wipro was the top lower
from the Sensex pack.
European markets, which opened after Indian market, rose led by
banks and insurers and tracking gains in US index futures on hopes
for an emergency meeting to hammer out details of a rescue plan for
the US financial sector. Key indices in UK, France and Germany were
up 0.09% to 0.87%.
Asian markets, which opened before Indian markets, were mixed. Key
benchmark indices in Japan, Singapore, Hong Kong and Taiwan were
down by between 0.15% to 1.35%. Key benchmark indices in South
Korea, and China were up by between 0.38% to 3.64%.
As per provisional closing, the BSE 30-share Sensex was down 151.58
points or 1.11% to 13,540.94. The index shed 261.84 points at the
day's low of 13,430.68, hit in mid-afternoon trade. The Sensex rose
24.36 points at day's high of 13,879.06, at the onset of trading
session.
The S&P CNX Nifty was down 53.70 points or 1.29% to 4107.55.
The BSE Mid-Cap index was down 0.76% at 5,087.79 and the BSE
Small-Cap index was down 0.89% at 6,047.49.
The market breadth was weak on BSE with 905 shares advancing as
compared to 1679 that declined. 81 shares remained unchanged.
BSE clocked a turnover of Rs 5054 crore as against Rs 4,319.28
crore on 24 September 2008.
India's third largest software exporter by sales Wipro slumped
5.19% at Rs 352.
Hindalco Industries (down 4.18% at Rs 104.30), Ranbaxy Laboratories
(down 3.94% at Rs 298.25), Grasim Industries (down 3.86% at Rs
1860.50), ACC (down 3.15% at Rs 608), DLF (down 3.27% at Rs
387.15), were the top losers from the Sensex pack.
HDFC Bank (up 0.87% at Rs 1293), ONGC (up 0.61% at Rs 1293), NTPC
(up 0.22% at Rs 178.85), Jaiprakash Associates (up 0.32% at Rs
123.75), and Larsen & Toubro (up 0.34% at Rs 2560), were the top
gainers from the Sensex pack.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) declined 1.35% at Rs 2020.
India's second largest software exporter Infosys Technologies fell
1.62% at Rs 1500.
India's largest private sector bank by market capitalisation ICICI
Bank down 0.36% at Rs 597.80.
Steel pipe maker Man Industries spurted 8.65% at Rs 60.90 after the
company said it received orders worth Rs 1100 crore in the current
quarter for spirally-welded pipes. The company's total order book
now stands at Rs 1500 crore, with exports accounting for over 26%.
Cigarette maker Golden Tobacco surged 8.89% at Rs 139.05 after the
company said on Wednesday, 24 September 2008 evening its board had
approved spinning off the tobacco and real estate businesses into
two separate companies.
Wind turbine maker Suzlon Energy dipped 7.42% at Rs 181.50 after
the company said its board would consider a rights issue to raise
up to Rs 1800 crore on 27 September 2008. According to reports, the
investors were worried the issue would lead to equity dilution.
The September 2008 derivatives contracts expired today. By
Wednesday, 24 September 2008, roll over in Nifty stood at about 44%
from September 2008 contracts to October 2008 contracts.
The Dow and the S&P 500 edged lower on Wednesday, 24 September
2008, as uncertainty about when the US Congress might approve a
proposed $700 billion financial sector bailout plan offset Warren
Buffett's $5 billion bet on Goldman Sachs. The Nasdaq edged up,
boosted by tech shares that rose on hopes an eventual bailout would
increase tech spending. Dow shed 29 points or 0.27% to 10,825.17.
The Nasdaq Composite index edged up 2.35 points or 0.11% at
2,155.68.
lower at the fag end of the session. The BSE 30-share Sensex
provisionally ended 151.58 points down. The market had earlier
recovered to some extent on bottom fishing. All the sectoral
indices on BSE, barring BSE Auto index, were negative. India's
third largest software exporter by sales Wipro was the top lower
from the Sensex pack.
European markets, which opened after Indian market, rose led by
banks and insurers and tracking gains in US index futures on hopes
for an emergency meeting to hammer out details of a rescue plan for
the US financial sector. Key indices in UK, France and Germany were
up 0.09% to 0.87%.
Asian markets, which opened before Indian markets, were mixed. Key
benchmark indices in Japan, Singapore, Hong Kong and Taiwan were
down by between 0.15% to 1.35%. Key benchmark indices in South
Korea, and China were up by between 0.38% to 3.64%.
As per provisional closing, the BSE 30-share Sensex was down 151.58
points or 1.11% to 13,540.94. The index shed 261.84 points at the
day's low of 13,430.68, hit in mid-afternoon trade. The Sensex rose
24.36 points at day's high of 13,879.06, at the onset of trading
session.
The S&P CNX Nifty was down 53.70 points or 1.29% to 4107.55.
The BSE Mid-Cap index was down 0.76% at 5,087.79 and the BSE
Small-Cap index was down 0.89% at 6,047.49.
The market breadth was weak on BSE with 905 shares advancing as
compared to 1679 that declined. 81 shares remained unchanged.
BSE clocked a turnover of Rs 5054 crore as against Rs 4,319.28
crore on 24 September 2008.
India's third largest software exporter by sales Wipro slumped
5.19% at Rs 352.
Hindalco Industries (down 4.18% at Rs 104.30), Ranbaxy Laboratories
(down 3.94% at Rs 298.25), Grasim Industries (down 3.86% at Rs
1860.50), ACC (down 3.15% at Rs 608), DLF (down 3.27% at Rs
387.15), were the top losers from the Sensex pack.
HDFC Bank (up 0.87% at Rs 1293), ONGC (up 0.61% at Rs 1293), NTPC
(up 0.22% at Rs 178.85), Jaiprakash Associates (up 0.32% at Rs
123.75), and Larsen & Toubro (up 0.34% at Rs 2560), were the top
gainers from the Sensex pack.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) declined 1.35% at Rs 2020.
India's second largest software exporter Infosys Technologies fell
1.62% at Rs 1500.
India's largest private sector bank by market capitalisation ICICI
Bank down 0.36% at Rs 597.80.
Steel pipe maker Man Industries spurted 8.65% at Rs 60.90 after the
company said it received orders worth Rs 1100 crore in the current
quarter for spirally-welded pipes. The company's total order book
now stands at Rs 1500 crore, with exports accounting for over 26%.
Cigarette maker Golden Tobacco surged 8.89% at Rs 139.05 after the
company said on Wednesday, 24 September 2008 evening its board had
approved spinning off the tobacco and real estate businesses into
two separate companies.
Wind turbine maker Suzlon Energy dipped 7.42% at Rs 181.50 after
the company said its board would consider a rights issue to raise
up to Rs 1800 crore on 27 September 2008. According to reports, the
investors were worried the issue would lead to equity dilution.
The September 2008 derivatives contracts expired today. By
Wednesday, 24 September 2008, roll over in Nifty stood at about 44%
from September 2008 contracts to October 2008 contracts.
The Dow and the S&P 500 edged lower on Wednesday, 24 September
2008, as uncertainty about when the US Congress might approve a
proposed $700 billion financial sector bailout plan offset Warren
Buffett's $5 billion bet on Goldman Sachs. The Nasdaq edged up,
boosted by tech shares that rose on hopes an eventual bailout would
increase tech spending. Dow shed 29 points or 0.27% to 10,825.17.
The Nasdaq Composite index edged up 2.35 points or 0.11% at
2,155.68.
Inflation Update September 25, 2008
Inflation Update September 25, 2008
Inflation based on the wholesale price index (WPI) for the week ended September 13, 2008 remained unchanged at 12.14%.
The Index for all commodities for the week remained unchanged at 241.10.
The wholesale price-based inflation was 3.51% during the corresponding week last year.
Inflation based on the wholesale price index (WPI) for the week ended September 13, 2008 remained unchanged at 12.14%.
The Index for all commodities for the week remained unchanged at 241.10.
The wholesale price-based inflation was 3.51% during the corresponding week last year.
NMDC eyes over 47% divestment
State-owned mining major National Mineral Development Corporation (NMDC) has asked the government to offload over 47 per cent of its stake in the company. The government holds 98.38 per cent in the navratna PSU with the balance being held by banks, financial institutions and public.
"We have recommended that government maintains its ownership of the company by retaining 51 per cent equity but divest the remaining," a company official said. "This will help the company's exposure in the market, improve its tradeability and mop up revenues for future expansions.
" Recently the company's stock was upgraded to the A category from the B category of stocks listed on the Bombay Stock Exchange. In February, the stock was moved from the lowest category of stocks-Z to the B category after the procedures for dematerialisation of 50 per cent of its publicly-held shares were completed.
It was also influenced by the market capitalisation of the company which had peaked at over Rs 200,000 crore in November 2007. NMDC had also split its shares and announced a bonus issue late last year.
The shift happened despite the company" miniscule free float. "The shift is a result of internal arrangement by the Securities and Exchange Board of India (SEBI), said Kumar Raghavan, company secretary and executive director, NMDC. "For private companies 10 per cent of the shares have to be public even at the time of listing but since NMDC is a public sector undertaking, there is no binding of this sort.
" With a market cap of over Rs 110,000 crore, the mining heavyweight is one of the biggest listed PSUs in the country. It produces 30 million tonnes of iron ore and has reserves of over 200 mt.
The company is investing Rs 19,000 crore over the next five years
"We have recommended that government maintains its ownership of the company by retaining 51 per cent equity but divest the remaining," a company official said. "This will help the company's exposure in the market, improve its tradeability and mop up revenues for future expansions.
" Recently the company's stock was upgraded to the A category from the B category of stocks listed on the Bombay Stock Exchange. In February, the stock was moved from the lowest category of stocks-Z to the B category after the procedures for dematerialisation of 50 per cent of its publicly-held shares were completed.
It was also influenced by the market capitalisation of the company which had peaked at over Rs 200,000 crore in November 2007. NMDC had also split its shares and announced a bonus issue late last year.
The shift happened despite the company" miniscule free float. "The shift is a result of internal arrangement by the Securities and Exchange Board of India (SEBI), said Kumar Raghavan, company secretary and executive director, NMDC. "For private companies 10 per cent of the shares have to be public even at the time of listing but since NMDC is a public sector undertaking, there is no binding of this sort.
" With a market cap of over Rs 110,000 crore, the mining heavyweight is one of the biggest listed PSUs in the country. It produces 30 million tonnes of iron ore and has reserves of over 200 mt.
The company is investing Rs 19,000 crore over the next five years
Rupee drops by 28 paise against US dollar in morning trade
Mumbai, Sep 25 (PTI) The rupee dropped by 28 paise against dollar to 46.22/23 in morning trade following persistent demand for the US currency amid poor supply. In active trade at the Interbank Foreign Exchange (Forex) market, local currency opened lower at 46.10/12 and dropped further to 46.25/26 before being quoted at 46.22/23 at 1100 hrs as against the overnight close of 45.94/95 a dollar.
Dollar buying by oil refiners to meet their month-end requirements weighed on the rupee. The Indian benchmark Sensex was down by 66.97 points at 13,625.55 in early trade as well as Asian stocks declined following doubts over the US government's proposed USD 700 billion bailout plan and worries about the economic fallout from the crisis.
Global crude oil prices were trading near USD 106 a barrel in Asian trade today. PTI.
Dollar buying by oil refiners to meet their month-end requirements weighed on the rupee. The Indian benchmark Sensex was down by 66.97 points at 13,625.55 in early trade as well as Asian stocks declined following doubts over the US government's proposed USD 700 billion bailout plan and worries about the economic fallout from the crisis.
Global crude oil prices were trading near USD 106 a barrel in Asian trade today. PTI.
Info Edge to buy 49 pct stake in Etechaces Marketing
MUMBAI (Reuters) - Info Edge India Ltd said on Thursday the company plans to invest 200 million rupees for a 49 percent stake in Etechaces Marketing and Consulting Pvt Ltd.
Etechaces distributes financial products online
Etechaces distributes financial products online
ONGC eyes oil assets in Latam, CIS, Africa
NEW DELHI (Reuters) - Oil and Natural Gas Corp is eyeing oil and gas assets in Latin America, the Commonwealth of Independent States and west Africa, Chairman R.S. Sharma said on Thursday.
He said ONGC had a big budget for the plan, but did say how much it was willing to spend.
"If you look at India's energy scenario, appetite is huge. When you have resources, you look for growth," Sharma told reporters on the sidelines of a conference.
He said ONGC had a big budget for the plan, but did say how much it was willing to spend.
"If you look at India's energy scenario, appetite is huge. When you have resources, you look for growth," Sharma told reporters on the sidelines of a conference.
NHB to raise 90 bln rupees by June 09
NEW DELHI (Reuters) - National Housing Bank plans to raise 90 billion rupees in the current financial year ending June 2009 to meet its loan demand, its chairman and managing director said on Thursday.
This will be lower than the 121.09 billion rupees it raised a year ago. "It is because we expect more repayments from borrowers this year," S. Sridhar told a news conference, which was held to announce its annual results.
National Housing Bank (NHB), which regulates and lends to mortgage firms, saw its net profit rising by 68 percent to 1.7 billion rupees for the year ended June 2008.
It disbursed loans worth 90.36 billion rupees and sanctioned loans worth 133.62 billion rupees during the year.
For the current financial year, NHB expects to disburse loans worth 110 billion rupees and sanction loans worth 155 billion rupees, Sridhar said.
The bank also plans to raise money from the public by offering deposit plans which it hasn't done before, he said.
National Housing Bank expects housing loan business to slow in line with a drop in demand for property because of inflated prices, Sridhar said.
"The housing market is seeing some correction in terms of demand. It should get reflected into prices also," he said, adding some pockets had already witnessed correction in prices
This will be lower than the 121.09 billion rupees it raised a year ago. "It is because we expect more repayments from borrowers this year," S. Sridhar told a news conference, which was held to announce its annual results.
National Housing Bank (NHB), which regulates and lends to mortgage firms, saw its net profit rising by 68 percent to 1.7 billion rupees for the year ended June 2008.
It disbursed loans worth 90.36 billion rupees and sanctioned loans worth 133.62 billion rupees during the year.
For the current financial year, NHB expects to disburse loans worth 110 billion rupees and sanction loans worth 155 billion rupees, Sridhar said.
The bank also plans to raise money from the public by offering deposit plans which it hasn't done before, he said.
National Housing Bank expects housing loan business to slow in line with a drop in demand for property because of inflated prices, Sridhar said.
"The housing market is seeing some correction in terms of demand. It should get reflected into prices also," he said, adding some pockets had already witnessed correction in prices
Deal close on $700 billion financial bailout plan
WASHINGTON (AP) -- President Bush is bringing presidential candidates Barack Obama and John McCain into negotiations on a $700 billion rescue of Wall Street as Democrats and Republicans near agreement on a bailout plan with more protections for taxpayers and new help for distressed homeowners.
Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.
They're still wrangling over major elements, including how to phase in the eye-popping cost -- a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout -- without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was under intense negotiation.
A bipartisan meeting was set for Thursday to begin drafting a compromise, which top Democrats said they hoped could pass within days.
The core of the plan envisions the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession.
Bush acknowledged in a prime-time television address Wednesday night that the bailout would be a "tough vote" for lawmakers.
But he said failing to approve it would risk dire consequences for the economy and most Americans.
"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package. "Our entire economy is in danger."
Bush's warning came soon after he invited Obama and McCain, one of whom will inherit the economic mess in four months, as well as key congressional leaders to a White House meeting Thursday to work on a compromise.
With the administration's original proposal considered dead in Congress, House leaders said they were making progress toward revised legislation that could be approved.
Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction.
"We're going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op," said Frank, the House Financial Services Committee chairman. "I wish they'd checked with us."
Paulson and Federal Reserve Chairman Ben Bernanke have been crisscrossing Capitol Hill in recent days, shuttling between public hearings on the proposal and private meetings with lawmakers, to sell the proposal.
Obama and McCain are calling for a bipartisan effort to deal with the crisis, little more than five weeks before national elections in which the economy has emerged as the dominant theme.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said in a joint statement Wednesday night. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
Presidential politics intruded, nonetheless, when McCain said earlier Wednesday he intended to return to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.
Obama said the debate should go ahead.
Lawmakers in both parties have objected strenuously to the rescue plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on more conditions and help for beleaguered homeowners.
But many in both parties said they were open to legislation, although on different terms than the White House has proposed.
Some partisan sticking points remain.
Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure -- a nonstarter for Republicans.
Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it's "probably something that we shouldn't try to do in this piece of legislation."
Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.
Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle.
Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, "we're now the biggest mortgage holder in town, and we can do serious foreclosure avoidance," Frank said.
Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.
They're still wrangling over major elements, including how to phase in the eye-popping cost -- a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout -- without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was under intense negotiation.
A bipartisan meeting was set for Thursday to begin drafting a compromise, which top Democrats said they hoped could pass within days.
The core of the plan envisions the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession.
Bush acknowledged in a prime-time television address Wednesday night that the bailout would be a "tough vote" for lawmakers.
But he said failing to approve it would risk dire consequences for the economy and most Americans.
"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package. "Our entire economy is in danger."
Bush's warning came soon after he invited Obama and McCain, one of whom will inherit the economic mess in four months, as well as key congressional leaders to a White House meeting Thursday to work on a compromise.
With the administration's original proposal considered dead in Congress, House leaders said they were making progress toward revised legislation that could be approved.
Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction.
"We're going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op," said Frank, the House Financial Services Committee chairman. "I wish they'd checked with us."
Paulson and Federal Reserve Chairman Ben Bernanke have been crisscrossing Capitol Hill in recent days, shuttling between public hearings on the proposal and private meetings with lawmakers, to sell the proposal.
Obama and McCain are calling for a bipartisan effort to deal with the crisis, little more than five weeks before national elections in which the economy has emerged as the dominant theme.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said in a joint statement Wednesday night. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
Presidential politics intruded, nonetheless, when McCain said earlier Wednesday he intended to return to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.
Obama said the debate should go ahead.
Lawmakers in both parties have objected strenuously to the rescue plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on more conditions and help for beleaguered homeowners.
But many in both parties said they were open to legislation, although on different terms than the White House has proposed.
Some partisan sticking points remain.
Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure -- a nonstarter for Republicans.
Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it's "probably something that we shouldn't try to do in this piece of legislation."
Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.
Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle.
Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, "we're now the biggest mortgage holder in town, and we can do serious foreclosure avoidance," Frank said.
IT stocks under pressure
Positive opening of the European markets was unable to lift Indian
market. The BSE 30-share Sensex was down 219.17 points. All the
sectoral indices on BSE, barring the FMCG index, were negative.
India's largest private sector bank by market capitalisation ICICI
Bank was the top loser from the Sensex pack. Shares of aluminium
makers and telecom firms declined sharply. Cement shares bucked the
weak market trend.
European markets, which opened after Indian markets, were positive.
Key indices in UK, France and Germany were up 0.08% to 0.59%.
Asian markets, which opened before Indian markets, were mixed. Key
benchmark indices in Japan, Singapore and Taiwan were down by
between 0.90% to 1.17%. Key benchmark indices in South Korea, Hong
Kong and China were up by between 0.05% to 3.64%.
At 13:25 IST, the BSE 30-share Sensex was down 219.17 points or
1.61% to 13,471.54. The index shed 247.16 points at the day's low
of 13,445.36, hit in afternoon trade. The Sensex rose 24.36 points
at day's high of 13,879.06, at the onset of trading session.
The S&P CNX Nifty was down 65.05 points or 1.56% to 4096.20.
The BSE Mid-Cap index was down 0.65% at 5,093.25 and the BSE
Small-Cap index was down 0.87% at 6,048.42.
The market breadth was weak on BSE with 787 shares advancing as
compared to 1553 that declined. 80 shares remained unchanged.
India's largest private sector bank by market capitalisation ICICI
Bank slipped 3.94% at Rs 576.70.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) declined 1.52% at Rs 2015.45.
India's fourth largest software exporter Satyam Computer tumbled
3.16% at Rs 323.35. Wipro (down 2.97% at Rs 359.75), TCS (down
2.11% at Rs 698.40), HCL Technologies (down 1.12% at Rs 230.40),
and Infosys Tecnologies (down 1.56% at Rs 230.40), were the other
software exporters that declined. The BSE IT index was down 2.26%
at 3,339.97.
Sterlite Industries fell 2.25% at Rs 476.60. Yesterday, 24
September 2008, the Sterlite stock had ended 8.36% higher after the
company dropped a restructuring plan. From a recent high of Rs
622.35 on 8 September 2008, the stock had tumbled 27.7% to Rs
449.95 on 23 September 2008 after parent Vedanta Resources said it
will transfer Sterlite's aluminium and energy businesses to Madras
Aluminium Company as part of restructuring. The restructuring of
the Vedanta group was planned to result in three units focused on
commodities produced by the group: copper, zinc and lead; aluminium
and energy; and iron ore.
Another Vedanta group firm Madras Aluminium slipped 4.51% to Rs
122.75.
India's largest aluminium producer by sales Hindalco Industries
fell 2.85% at Rs 105.75. It came off from a 52-week low of Rs
105.40, hit in afternoon trade. The company's Rs 5,050 crore rights
share offering for subscription Monday, 22 September 2008. The sale
in a ratio of three shares for every seven held at Rs 96 a share
will close on 10 October 2008. The company aims to use the funds to
repay a bridge loan it had taken to buy Canada's Novelis in 2007.
Telecom stocks slipped. Bharti Airtel (down 3.20% at Rs 784.45),
Idea Cellular (down 1.56% at Rs 79.10), and Reliance Communication
(down 1.44% at Rs 365), Tata Teleservice (Maharastra) (down 1.89%
at Rs 23.30), and MTNL (down 1.15% at Rs 90.10), tumbled.
Cement makers rose. India Cements (up 4.29% at Rs 134.85), Prism
Cement (up 4.91% at Rs 31), Ambuja Cements (up 1.72% at Rs 85.85),
Ultratech Cement (up 1.05% at Rs 560), ACC (up 0.40% at Rs 630.30),
rose.
Cigarette maker Golden Tobacco surged 8.61% at Rs 138.50 after the
company said on Wednesday, 24 September 2008 evening its board had
approved spinning off the tobacco and real estate businesses into
two separate companies.
Wind turbine maker Suzlon Energy dipped 5.13% at Rs 186 after the
company said its board would consider a rights issue to raise up to
Rs 1800 crore on 27 September 2008. According to reports, the
investors were worried the issue would lead to equity dilution.
Security system maker Zicom Electronic Security Systems rose 1.62%
to Rs 91 after the firm said it won an order worth Rs 7.5 crore for
installing a wireless broadband outdoor surveillance system in the
northern city of Gurgaon.
market. The BSE 30-share Sensex was down 219.17 points. All the
sectoral indices on BSE, barring the FMCG index, were negative.
India's largest private sector bank by market capitalisation ICICI
Bank was the top loser from the Sensex pack. Shares of aluminium
makers and telecom firms declined sharply. Cement shares bucked the
weak market trend.
European markets, which opened after Indian markets, were positive.
Key indices in UK, France and Germany were up 0.08% to 0.59%.
Asian markets, which opened before Indian markets, were mixed. Key
benchmark indices in Japan, Singapore and Taiwan were down by
between 0.90% to 1.17%. Key benchmark indices in South Korea, Hong
Kong and China were up by between 0.05% to 3.64%.
At 13:25 IST, the BSE 30-share Sensex was down 219.17 points or
1.61% to 13,471.54. The index shed 247.16 points at the day's low
of 13,445.36, hit in afternoon trade. The Sensex rose 24.36 points
at day's high of 13,879.06, at the onset of trading session.
The S&P CNX Nifty was down 65.05 points or 1.56% to 4096.20.
The BSE Mid-Cap index was down 0.65% at 5,093.25 and the BSE
Small-Cap index was down 0.87% at 6,048.42.
The market breadth was weak on BSE with 787 shares advancing as
compared to 1553 that declined. 80 shares remained unchanged.
India's largest private sector bank by market capitalisation ICICI
Bank slipped 3.94% at Rs 576.70.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) declined 1.52% at Rs 2015.45.
India's fourth largest software exporter Satyam Computer tumbled
3.16% at Rs 323.35. Wipro (down 2.97% at Rs 359.75), TCS (down
2.11% at Rs 698.40), HCL Technologies (down 1.12% at Rs 230.40),
and Infosys Tecnologies (down 1.56% at Rs 230.40), were the other
software exporters that declined. The BSE IT index was down 2.26%
at 3,339.97.
Sterlite Industries fell 2.25% at Rs 476.60. Yesterday, 24
September 2008, the Sterlite stock had ended 8.36% higher after the
company dropped a restructuring plan. From a recent high of Rs
622.35 on 8 September 2008, the stock had tumbled 27.7% to Rs
449.95 on 23 September 2008 after parent Vedanta Resources said it
will transfer Sterlite's aluminium and energy businesses to Madras
Aluminium Company as part of restructuring. The restructuring of
the Vedanta group was planned to result in three units focused on
commodities produced by the group: copper, zinc and lead; aluminium
and energy; and iron ore.
Another Vedanta group firm Madras Aluminium slipped 4.51% to Rs
122.75.
India's largest aluminium producer by sales Hindalco Industries
fell 2.85% at Rs 105.75. It came off from a 52-week low of Rs
105.40, hit in afternoon trade. The company's Rs 5,050 crore rights
share offering for subscription Monday, 22 September 2008. The sale
in a ratio of three shares for every seven held at Rs 96 a share
will close on 10 October 2008. The company aims to use the funds to
repay a bridge loan it had taken to buy Canada's Novelis in 2007.
Telecom stocks slipped. Bharti Airtel (down 3.20% at Rs 784.45),
Idea Cellular (down 1.56% at Rs 79.10), and Reliance Communication
(down 1.44% at Rs 365), Tata Teleservice (Maharastra) (down 1.89%
at Rs 23.30), and MTNL (down 1.15% at Rs 90.10), tumbled.
Cement makers rose. India Cements (up 4.29% at Rs 134.85), Prism
Cement (up 4.91% at Rs 31), Ambuja Cements (up 1.72% at Rs 85.85),
Ultratech Cement (up 1.05% at Rs 560), ACC (up 0.40% at Rs 630.30),
rose.
Cigarette maker Golden Tobacco surged 8.61% at Rs 138.50 after the
company said on Wednesday, 24 September 2008 evening its board had
approved spinning off the tobacco and real estate businesses into
two separate companies.
Wind turbine maker Suzlon Energy dipped 5.13% at Rs 186 after the
company said its board would consider a rights issue to raise up to
Rs 1800 crore on 27 September 2008. According to reports, the
investors were worried the issue would lead to equity dilution.
Security system maker Zicom Electronic Security Systems rose 1.62%
to Rs 91 after the firm said it won an order worth Rs 7.5 crore for
installing a wireless broadband outdoor surveillance system in the
northern city of Gurgaon.
Bush warns 'entire economy is in danger'
WASHINGTON (AP) -- President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said.
"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."
Said Bush: "We must not let this happen."
The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.
Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.
"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.
The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.
But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.
Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.
But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.
Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.
In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates -- bitterly fighting each other for the White House but coming together over this issue -- said the situation offers a chance for politicians to prove Washington's worth.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.
White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."
But that has not closed the deal, which for many recalls previous warnings of grave threats from Bush -- such as before the Iraq war -- that did not materialize. So Bush's goal with his speech, his first prime-time address in 377 days, was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the people's daily lives and inspire the public to demand action from Washington.
He said that more banks could fail, the stock market could plummet and erase retirement accounts, businesses could find it hard to get credit and be forced to close, wiping out jobs for millions of Americans.
He ended on a positive note, predicting lawmakers would "rise to the occasion" and that the nation's economy will overcome "a moment of great challenge."
With so many crises hitting the United States at once, the presidential race has taken a back seat and so has Bush's involvement in politics. Bush canceled a campaign trip to Florida on Wednesday to deal with the problem, the third time in a week that he has scrapped his attendance at out-of-town fundraisers, either because of the market turmoil or Hurricane Ike.
The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempted solution will certainly be added to that list.
"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."
Said Bush: "We must not let this happen."
The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.
Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.
"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.
The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.
But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.
Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.
But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.
Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.
In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates -- bitterly fighting each other for the White House but coming together over this issue -- said the situation offers a chance for politicians to prove Washington's worth.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.
White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."
But that has not closed the deal, which for many recalls previous warnings of grave threats from Bush -- such as before the Iraq war -- that did not materialize. So Bush's goal with his speech, his first prime-time address in 377 days, was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the people's daily lives and inspire the public to demand action from Washington.
He said that more banks could fail, the stock market could plummet and erase retirement accounts, businesses could find it hard to get credit and be forced to close, wiping out jobs for millions of Americans.
He ended on a positive note, predicting lawmakers would "rise to the occasion" and that the nation's economy will overcome "a moment of great challenge."
With so many crises hitting the United States at once, the presidential race has taken a back seat and so has Bush's involvement in politics. Bush canceled a campaign trip to Florida on Wednesday to deal with the problem, the third time in a week that he has scrapped his attendance at out-of-town fundraisers, either because of the market turmoil or Hurricane Ike.
The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempted solution will certainly be added to that list.
Pre Market Report 25/09/2008
Volatility may grip the bourses ahead of expiry of September 2008 derivatives contracts. By Wednesday, 24 September 2008, roll over in Nifty stood at about 44% from September 2008 contracts to October 2008 contracts.
The government will today, 25 September 2008, release inflation data for 12 months to 13 September 2008, after market hours. Inflation based on the whole price index rose 12.14% in 12 months to 6 September 2008, marginally above previous week's 12.10% rise.
The Dow and the S&P 500 edged lower on Wednesday, 24 September 2008, as uncertainty about when the US Congress might approve a proposed $700 billion financial sector bailout plan offset Warren Buffett's $5 billion bet on Goldman Sachs. The Nasdaq edged up, boosted by tech shares that rose on hopes an eventual bailout would increase tech spending. Dow shed 29 points or 0.27% to 10,825.17. The Nasdaq Composite index edged up 2.35 points or 0.11% at 2,155.68.
Asian stocks were mixed today, 25 September 2008. Key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 0.4% to 1.07%. Key benchmark indices in Hong Kong and China were up by between 0.4% to 4.2%.
Back home, as per provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 494.40 crore on Wednesday, 24 September 2008. Domestic funds bought shares worth a net Rs 170.18 crore.
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. In India, FIIs sold shares worth a net Rs 7182.80 crore this month (till 23 September 2008). The outflow has reached Rs 35696.60 crore in calendar year 2008.
A deep financial crisis engulfed the global markets last week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse. Early this week Goldman Sachs Group Inc and Morgan Stanley became bank holding companies after investors last week lost confidence in their freewheeling, high-risk broker model.
The government will today, 25 September 2008, release inflation data for 12 months to 13 September 2008, after market hours. Inflation based on the whole price index rose 12.14% in 12 months to 6 September 2008, marginally above previous week's 12.10% rise.
The Dow and the S&P 500 edged lower on Wednesday, 24 September 2008, as uncertainty about when the US Congress might approve a proposed $700 billion financial sector bailout plan offset Warren Buffett's $5 billion bet on Goldman Sachs. The Nasdaq edged up, boosted by tech shares that rose on hopes an eventual bailout would increase tech spending. Dow shed 29 points or 0.27% to 10,825.17. The Nasdaq Composite index edged up 2.35 points or 0.11% at 2,155.68.
Asian stocks were mixed today, 25 September 2008. Key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 0.4% to 1.07%. Key benchmark indices in Hong Kong and China were up by between 0.4% to 4.2%.
Back home, as per provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 494.40 crore on Wednesday, 24 September 2008. Domestic funds bought shares worth a net Rs 170.18 crore.
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. In India, FIIs sold shares worth a net Rs 7182.80 crore this month (till 23 September 2008). The outflow has reached Rs 35696.60 crore in calendar year 2008.
A deep financial crisis engulfed the global markets last week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse. Early this week Goldman Sachs Group Inc and Morgan Stanley became bank holding companies after investors last week lost confidence in their freewheeling, high-risk broker model.
Nikkei down 1.6 pct as U.S. bailout worries weigh
TOKYO, Sept 25 (Reuters) - The Nikkei share average fell 1.6 percent on Thursday, weighed down by financial shares, after U.S. stocks edged lower on uncertainty about when Congress might approve a proposed $700 billion financial sector bailout.
As of 0001 GMT, the benchmark Nikkei average .N225 shed 189.32 points to 11,925.71. The broader Topix declined 1.5 percent to 1,150.45.
As of 0001 GMT, the benchmark Nikkei average .N225 shed 189.32 points to 11,925.71. The broader Topix declined 1.5 percent to 1,150.45.
Oil falls below $106 on weak US energy demand
NEW YORK (AP) -- Oil prices ended a choppy session slightly lower Wednesday, falling below $106 a barrel as weak U.S. fuel demand and a stronger dollar outweighed concerns over a reduction in global crude output.
Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the New York Mercantile Exchange after rising as high as $109.50. On Tuesday, the contract fell $2.76 to settle at $106.61.
Crude prices have risen about $15 in the past week as investors funnel money back into commodities on worries that a proposed $700 billion bailout of financial firms will undercut the dollar and boost inflation.
But analysts said signs of weak U.S. demand for fuel have taken some of the momentum out of the rally. The economic slowdown has forced American consumers and businesses to cut back on energy use, sending oil prices falling from a record $147.27 a barrel reached July 11.
Demand for gasoline over the four weeks ended Sept. 19 was 3.5 percent lower than a year earlier, averaging 9 million barrels a day, the U.S. Energy Department's Energy Information Administration said in its weekly inventory report.
"Demand continues to be sluggish at best," said Andrew Lebow, senior vice president and broker at MF Global in New York. "Some people want to own real assets as an inflation hedge but others see crude as a consumable good, and any economic weakness is going to be bearish factor even if this bailout gets approved."
Highlighting Americans' reduced driving habits, filling stations hungry for business continued to ratchet down pump prices. A gallon of regular shed about penny overnight to a new national average of $3.715, according to auto club AAA, the Oil Price Information Service and Wright Express.
Still, some analysts say crude could be heading higher amid falling global supplies. About 66 percent of oil production and 61 percent of natural gas output in the Gulf of Mexico remains shut-in after the passage of Hurricanes Gustav and Ike, according to the U.S. Minerals Management Service. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity.
OPEC's decision earlier this month to cut production by 520,000 barrels a day and militant threats to Nigerian oil supplies have added to the supply shortage.
"The market is starting to come to grips with how bad the supply situation is going to be," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "We really can't afford to lose any more barrels."
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill Wednesday for a second day of testimony about the bailout plan. On Tuesday, Paulson and Bernanke told legislators that without the move, neither businesses nor consumers would be able to borrow money, and the world's largest economy would grind to a virtual halt.
Congressional leaders predicted the emergency rescue would pass, but with significant changes. Democrats and Republicans alike demanded that the bailout limit pay packages for executives of companies helped by the rescue.
Oil investors have also been weighing what impact the bailout plan will have on the value of the dollar, which gained slightly against the euro. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell them when the greenback recovers. The 15-nation euro bought $1.4652 late Wednesday, down from $1.4721 in New York late Tuesday.
"There's been a close correlation between oil and the dollar in the last week or so. Oil is tracking that pretty closely," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "And there's a real question mark over the direction of the dollar."
In its weekly inventory report, the EIA said U.S. crude stocks fell unexpectedly last week. U.S. crude inventories fell by 1.5 million barrels, 0.5 percent, to 290.2 million barrels for the week ending Sept. 19, according to the EIA. Analysts surveyed by energy information provider Platts had expected oil stocks to rise by 1.6 million barrels.
Meanwhile, gasoline inventories dropped by 5.9 million barrels, or 3.2 percent, to 178.7 million barrels. Analysts expected stockpiles of the motor fuel to fall by 5.1 million barrels.
Inventories of distillate fuel, which include diesel and heating oil, slid by 4.2 million barrels to 125.4 million barrels for the week ended Sept. 19. Analysts expected distillate stocks to decrease by 1.8 million barrels.
In other Nymex trading, heating oil futures rose 1.38 cents to settle at $3.027 a gallon, while gasoline prices fell less than half a penny to settle at $2.5947 a gallon. Natural gas for October delivery fell 23.6 cents to settle at $7.908 per 1,000 cubic feet.
In London, November Brent crude fell 63 cents to settle at $102.45 a barrel on the ICE Futures exchange.
Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the New York Mercantile Exchange after rising as high as $109.50. On Tuesday, the contract fell $2.76 to settle at $106.61.
Crude prices have risen about $15 in the past week as investors funnel money back into commodities on worries that a proposed $700 billion bailout of financial firms will undercut the dollar and boost inflation.
But analysts said signs of weak U.S. demand for fuel have taken some of the momentum out of the rally. The economic slowdown has forced American consumers and businesses to cut back on energy use, sending oil prices falling from a record $147.27 a barrel reached July 11.
Demand for gasoline over the four weeks ended Sept. 19 was 3.5 percent lower than a year earlier, averaging 9 million barrels a day, the U.S. Energy Department's Energy Information Administration said in its weekly inventory report.
"Demand continues to be sluggish at best," said Andrew Lebow, senior vice president and broker at MF Global in New York. "Some people want to own real assets as an inflation hedge but others see crude as a consumable good, and any economic weakness is going to be bearish factor even if this bailout gets approved."
Highlighting Americans' reduced driving habits, filling stations hungry for business continued to ratchet down pump prices. A gallon of regular shed about penny overnight to a new national average of $3.715, according to auto club AAA, the Oil Price Information Service and Wright Express.
Still, some analysts say crude could be heading higher amid falling global supplies. About 66 percent of oil production and 61 percent of natural gas output in the Gulf of Mexico remains shut-in after the passage of Hurricanes Gustav and Ike, according to the U.S. Minerals Management Service. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity.
OPEC's decision earlier this month to cut production by 520,000 barrels a day and militant threats to Nigerian oil supplies have added to the supply shortage.
"The market is starting to come to grips with how bad the supply situation is going to be," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "We really can't afford to lose any more barrels."
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill Wednesday for a second day of testimony about the bailout plan. On Tuesday, Paulson and Bernanke told legislators that without the move, neither businesses nor consumers would be able to borrow money, and the world's largest economy would grind to a virtual halt.
Congressional leaders predicted the emergency rescue would pass, but with significant changes. Democrats and Republicans alike demanded that the bailout limit pay packages for executives of companies helped by the rescue.
Oil investors have also been weighing what impact the bailout plan will have on the value of the dollar, which gained slightly against the euro. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell them when the greenback recovers. The 15-nation euro bought $1.4652 late Wednesday, down from $1.4721 in New York late Tuesday.
"There's been a close correlation between oil and the dollar in the last week or so. Oil is tracking that pretty closely," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "And there's a real question mark over the direction of the dollar."
In its weekly inventory report, the EIA said U.S. crude stocks fell unexpectedly last week. U.S. crude inventories fell by 1.5 million barrels, 0.5 percent, to 290.2 million barrels for the week ending Sept. 19, according to the EIA. Analysts surveyed by energy information provider Platts had expected oil stocks to rise by 1.6 million barrels.
Meanwhile, gasoline inventories dropped by 5.9 million barrels, or 3.2 percent, to 178.7 million barrels. Analysts expected stockpiles of the motor fuel to fall by 5.1 million barrels.
Inventories of distillate fuel, which include diesel and heating oil, slid by 4.2 million barrels to 125.4 million barrels for the week ended Sept. 19. Analysts expected distillate stocks to decrease by 1.8 million barrels.
In other Nymex trading, heating oil futures rose 1.38 cents to settle at $3.027 a gallon, while gasoline prices fell less than half a penny to settle at $2.5947 a gallon. Natural gas for October delivery fell 23.6 cents to settle at $7.908 per 1,000 cubic feet.
In London, November Brent crude fell 63 cents to settle at $102.45 a barrel on the ICE Futures exchange.
GM treasurer says company will put Strasbourg, France, factory and Hummer brand up for sale
DETROIT (AP) -- General Motors Corp.'s treasurer said Wednesday that the automaker is planning to put its Strasbourg, France, manufacturing operation and its Hummer truck brand up for sale, and it may announce more asset sales later this year.
Company Treasurer Walter Borst said in a slide presentation at the Deutsche Bank Leveraged Finance Conference that the company expects to distribute marketing materials for both operations in October.
The slides posted on GM's Web site Wednesday say the assets under review are worth $2 billion to $4 billion. The presentation also says GM continues to review other asset sales and will make more announcements in the fourth quarter.
"We believe that we can monetize certain assets without impacting the strategic direction of the company," Borst said during his presentation, which was posted on GM's investor Web site.
GM and other automakers have faced liquidity problems as losses have mounted and U.S. sales have declined. GM announced a plan in July to cut $10 billion in costs and raise another $5 billion through asset sales and borrowing through the end of next year.
On Friday, the nation's largest automaker gave notice that it would draw the remaining $3.5 billion of a $4.5 billion revolving credit facility to boost its liquidity.
Borst said GM expects the global market to grow from 70.6 million in sales last year to more than 75 million in 2010, and says GM is positioned to capture that growth in emerging markets. The growth, coupled with cost cuts, factory capacity reductions and other management decisions, will set the stage for improved financial results by 2010, he said.
By 2010, GM will sell two-thirds of its vehicles outside the U.S., compared with 59 percent in 2007, he said.
He said GM plans to reduce its North American structural costs from $33.2 billion in 2007 to $26 billion to $27 billion in 2010. That figure includes savings from shifting retiree health care costs to a trust administered by the United Auto Workers, although the accounting of those savings could change, he said.
By 2010, the company also expects to reduce its hourly health care costs by more than $2 billion. The company spent $3.8 billion in 2007, he said.
Borst said GM is shoring up its liquidity and has the scale to be well positioned for an industry rebound.
"We're making changes to compete and win in what we think is an industry revolution," he said.
GM shares fell 37 cents, or 3.5 percent, to close at $10.35.
Company Treasurer Walter Borst said in a slide presentation at the Deutsche Bank Leveraged Finance Conference that the company expects to distribute marketing materials for both operations in October.
The slides posted on GM's Web site Wednesday say the assets under review are worth $2 billion to $4 billion. The presentation also says GM continues to review other asset sales and will make more announcements in the fourth quarter.
"We believe that we can monetize certain assets without impacting the strategic direction of the company," Borst said during his presentation, which was posted on GM's investor Web site.
GM and other automakers have faced liquidity problems as losses have mounted and U.S. sales have declined. GM announced a plan in July to cut $10 billion in costs and raise another $5 billion through asset sales and borrowing through the end of next year.
On Friday, the nation's largest automaker gave notice that it would draw the remaining $3.5 billion of a $4.5 billion revolving credit facility to boost its liquidity.
Borst said GM expects the global market to grow from 70.6 million in sales last year to more than 75 million in 2010, and says GM is positioned to capture that growth in emerging markets. The growth, coupled with cost cuts, factory capacity reductions and other management decisions, will set the stage for improved financial results by 2010, he said.
By 2010, GM will sell two-thirds of its vehicles outside the U.S., compared with 59 percent in 2007, he said.
He said GM plans to reduce its North American structural costs from $33.2 billion in 2007 to $26 billion to $27 billion in 2010. That figure includes savings from shifting retiree health care costs to a trust administered by the United Auto Workers, although the accounting of those savings could change, he said.
By 2010, the company also expects to reduce its hourly health care costs by more than $2 billion. The company spent $3.8 billion in 2007, he said.
Borst said GM is shoring up its liquidity and has the scale to be well positioned for an industry rebound.
"We're making changes to compete and win in what we think is an industry revolution," he said.
GM shares fell 37 cents, or 3.5 percent, to close at $10.35.
Goldman raises $5 billion in public stock offer
NEW YORK (AP) -- Goldman Sachs Group Inc., seeking to improve not only its balance sheet but its standing with investors, has undertaken a huge capital-raising program that includes an investment of at least $5 billion from Warren Buffett and a common stock offering for another $5 billion.
Just a week earlier, Goldman looked to be on precarious ground as its stock price plunged in response to fears that it could not survive as an independent investment bank. But the company contended Wednesday that the current crisis in the financial markets, which sent Lehman Brothers Holdings Inc. into bankruptcy court and Merrill Lynch & Co. into a sale to Bank of America Corp., wasn't the catalyst for the deals.
"Although we felt we were under no pressure to raise capital, we've always said if an opportunity arose, we would look at it," Goldman spokesman Lucas van Praag said. Raising capital "gives us greater firepower and greater flexibility," he said.
Goldman said Wednesday it was raising $5 billion through a common stock offering, doubling the amount it announced just the night before. Goldman priced 40.65 million common shares at $123 apiece. An additional 6.1 million shares may be sold to cover overallotments, potentially boosting proceeds by $750.3 million.
Buffett, considered among the top investors in the world, will buy through his Berkshire Hathaway Inc. $5 billion in preferred Goldman stock and receive an option to purchase an additional $5 billion in common stock.
Buffett said during an interview on CNBC "there's no better firm on Wall Street." Buffett acknowledged other investment banks, including Lehman, had approached him in recent months, but he passed on those investment opportunities. He declined to discuss the deal beyond the comments made on CNBC.
The investment by Buffett -- which Goldman called an anchor for its common stock offering -- will likely provide reassurances to a nervous market, said Brad Hintz, an analyst with Sanford C. Bernstein and a former chief financial officer at Lehman.
Wall Street appeared pleased with the moves. Goldman stock rose $4.95, or 4 percent, to $130 on the New York Stock Exchange.
"If one thing is for sure, Goldman knows how to reorient itself for a changed environment, and this move is what was needed now," Deutsche Bank analyst Mike Mayo wrote in a research note. "The result should be increased confidence."
Buffett's investment will be his second major foray into Wall Street. In the late 1980s, Berkshire Hathaway invested in Salomon Brothers Inc. When the investment firm admitted wrongdoing in bidding for U.S. Treasury bonds in 1991, Buffett became interim chairman and helped Salomon reach a settlement with the government before stepping down in 1992. Salomon was later sold to what is now Citigroup Inc.
The preferred stock purchase by Buffett will pay a dividend of 10 percent annually and can be repurchased by Goldman at anytime for a 10 percent premium. The warrants to buy common shares are exercisable by Buffett at anytime in the next five years at a price of $115 per share.
Goldman's efforts to raise capital come just two days after the company received approval to convert to a bank holding company, and less than two weeks after the bankruptcy filing of Lehman set off fresh concerns about the fragile credit markets.
Goldman's conversion to a commercial bank also provides it broader and permanent access to borrow federal money and the ability to build a stable base of deposits -- which some analysts says provides further reassurance to the market.
"Lehman's failure spooked the market," Hintz said.
Within days of Lehman's collapse, Merrill agreed to sell itself to Bank of America and American International Group Inc. was rescued by a government loan of $85 billion that included the government receiving a 79.9 percent ownership stake in the insurer.
Amid the problems, shares of financial firms and the broader stock market tumbled as credit markets further seized up. Investors feared the stand-alone investment bank model was no longer viable. Although Goldman was widely considered one of the best performing banks during the crisis, its shares fell as low as $85.88 last week.
The broader credit crisis has forced financial firms worldwide to write down the value of their soured real estate holdings by more than $300 billion, but Goldman has taken less than $5 billion in write-downs. Still, despite the relatively small amount of damage it suffered, its stock plunged as investors lost confidence in the entire sector.
Credit markets began to deteriorate in 2007 as mortgages increasingly defaulted and investors worried that bonds backed by the troubled loans would default as well -- which left investors shying away from all but the safest debt, essentially shuttering the credit markets.
The series of dramatic events last week -- the Lehman failure and the Merrill and AIG deals -- led the government to announce plans to provide up to $700 billion in support to the financial services industry, a proposal still being debated on Capitol Hill.
With the new capital, Goldman positioned itself to ensure stability regardless of whether the government can push through the $700 billion bailout.
If the government is able to pass through its $700 billion plan, Goldman Sachs could be a buyer of distressed assets, using some of the new capital it raised, while its competitors might not have the flexibility to do so, van Praag said.
He added that if the government plan is not completed, the new capital provides Goldman with "better ability to withstand a longer period" of problems or uncertainty in the financial markets.
Mayo said the new capital could be used to purchase distressed assets or even consider an acquisition. With its new status, that acquisition could include a depository institution.
Just a week earlier, Goldman looked to be on precarious ground as its stock price plunged in response to fears that it could not survive as an independent investment bank. But the company contended Wednesday that the current crisis in the financial markets, which sent Lehman Brothers Holdings Inc. into bankruptcy court and Merrill Lynch & Co. into a sale to Bank of America Corp., wasn't the catalyst for the deals.
"Although we felt we were under no pressure to raise capital, we've always said if an opportunity arose, we would look at it," Goldman spokesman Lucas van Praag said. Raising capital "gives us greater firepower and greater flexibility," he said.
Goldman said Wednesday it was raising $5 billion through a common stock offering, doubling the amount it announced just the night before. Goldman priced 40.65 million common shares at $123 apiece. An additional 6.1 million shares may be sold to cover overallotments, potentially boosting proceeds by $750.3 million.
Buffett, considered among the top investors in the world, will buy through his Berkshire Hathaway Inc. $5 billion in preferred Goldman stock and receive an option to purchase an additional $5 billion in common stock.
Buffett said during an interview on CNBC "there's no better firm on Wall Street." Buffett acknowledged other investment banks, including Lehman, had approached him in recent months, but he passed on those investment opportunities. He declined to discuss the deal beyond the comments made on CNBC.
The investment by Buffett -- which Goldman called an anchor for its common stock offering -- will likely provide reassurances to a nervous market, said Brad Hintz, an analyst with Sanford C. Bernstein and a former chief financial officer at Lehman.
Wall Street appeared pleased with the moves. Goldman stock rose $4.95, or 4 percent, to $130 on the New York Stock Exchange.
"If one thing is for sure, Goldman knows how to reorient itself for a changed environment, and this move is what was needed now," Deutsche Bank analyst Mike Mayo wrote in a research note. "The result should be increased confidence."
Buffett's investment will be his second major foray into Wall Street. In the late 1980s, Berkshire Hathaway invested in Salomon Brothers Inc. When the investment firm admitted wrongdoing in bidding for U.S. Treasury bonds in 1991, Buffett became interim chairman and helped Salomon reach a settlement with the government before stepping down in 1992. Salomon was later sold to what is now Citigroup Inc.
The preferred stock purchase by Buffett will pay a dividend of 10 percent annually and can be repurchased by Goldman at anytime for a 10 percent premium. The warrants to buy common shares are exercisable by Buffett at anytime in the next five years at a price of $115 per share.
Goldman's efforts to raise capital come just two days after the company received approval to convert to a bank holding company, and less than two weeks after the bankruptcy filing of Lehman set off fresh concerns about the fragile credit markets.
Goldman's conversion to a commercial bank also provides it broader and permanent access to borrow federal money and the ability to build a stable base of deposits -- which some analysts says provides further reassurance to the market.
"Lehman's failure spooked the market," Hintz said.
Within days of Lehman's collapse, Merrill agreed to sell itself to Bank of America and American International Group Inc. was rescued by a government loan of $85 billion that included the government receiving a 79.9 percent ownership stake in the insurer.
Amid the problems, shares of financial firms and the broader stock market tumbled as credit markets further seized up. Investors feared the stand-alone investment bank model was no longer viable. Although Goldman was widely considered one of the best performing banks during the crisis, its shares fell as low as $85.88 last week.
The broader credit crisis has forced financial firms worldwide to write down the value of their soured real estate holdings by more than $300 billion, but Goldman has taken less than $5 billion in write-downs. Still, despite the relatively small amount of damage it suffered, its stock plunged as investors lost confidence in the entire sector.
Credit markets began to deteriorate in 2007 as mortgages increasingly defaulted and investors worried that bonds backed by the troubled loans would default as well -- which left investors shying away from all but the safest debt, essentially shuttering the credit markets.
The series of dramatic events last week -- the Lehman failure and the Merrill and AIG deals -- led the government to announce plans to provide up to $700 billion in support to the financial services industry, a proposal still being debated on Capitol Hill.
With the new capital, Goldman positioned itself to ensure stability regardless of whether the government can push through the $700 billion bailout.
If the government is able to pass through its $700 billion plan, Goldman Sachs could be a buyer of distressed assets, using some of the new capital it raised, while its competitors might not have the flexibility to do so, van Praag said.
He added that if the government plan is not completed, the new capital provides Goldman with "better ability to withstand a longer period" of problems or uncertainty in the financial markets.
Mayo said the new capital could be used to purchase distressed assets or even consider an acquisition. With its new status, that acquisition could include a depository institution.
us Stocks end mostly lower as markets await details of lifeline for banks; credit remains tight
NEW YORK (AP) -- Tension grew in the financial markets Wednesday, sending most stocks moderately lower as investors worried about the effectiveness of a still-emerging government plan to rescue banks from crippling debt. The credit markets also showed added strain, with demand rising for short-term Treasury bills, considered the safest of investments.
Wall Street was calmer than during the first two days of this week, with stocks meandering in and out of positive territory while investors tried to determine what shape the $700 billion plan might take. But the atmosphere was uneasy enough to erode the market's initial enthusiasm over investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc.
Investors focused on broader concerns that the dealmaking in Washington could produce less potent medicine than proponents say is necessary to aid moribund credit markets. Fear about bad debt on the books of financial companies has led to tightness in credit markets. That, in turn, has made it harder and more expensive for businesses and consumers to borrow.
Treasury Secretary Henry Paulson told the House Financial Services Committee that he agreed to limit the pay of Wall Street executives whose companies might benefit from the proposed measure.
Paulson appeared with Federal Reserve Chairman Ben Bernanke before Congress for a second day to brief lawmakers. Their appearance on Capitol Hill Tuesday unnerved investors, who began questioning whether lawmakers were doubting the necessity and form of the government bailout.
The waiting was clearly wearing on the credit markets, raising concerns again about liquidity in the banking system.
Demand for short-term government Treasuries increased as investors again sought safe places to keep cash. The yield on the 3-month Treasury bill, considered the safest short-term financial asset, was at 0.49 percent late Wednesday, down from 0.79 percent late Tuesday. Last week, demand spiked so high that the yield briefly dipped into negative territory; investors were so focused on putting their money in safe assets that they have been willing to accept small and at times even negative returns.
In other Treasury trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.81 percent from 3.80 percent late Tuesday.
"I think you're seeing a lot of tough talk from politicians who don't want to seem like they're rolling over for Wall Street and, normally, people would see that for what it is. But right now investors are exceptionally nervous," said Stephen Massocca, co-chief executive of Pacific Growth Equities in San Francisco.
The Dow Jones industrial average fell 29.00, or 0.27 percent, to 10,825.17. The decline leaves the Dow down more than 560 points, or about 5 percent, for the week.
Broader stock indicators were mixed. The Standard & Poor's 500 index slipped 2.35, or 0.20 percent, to 1,185.87, and the Nasdaq composite index rose 2.35, or 0.11 percent, to 2,155.68.
The dollar, whose struggles earlier this week contributed to extreme volatility in other markets, was mixed. Meanwhile, gold prices rose.
Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the New York Mercantile Exchange.
"I think the quiet in the market is essentially the collective breath being held by investors and unfortunately they can't hold their breath forever," said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. "We need Congress to do something."
Shares of Goldman Sachs Group Inc. rose $4.95, or 4 percent, to $130 Wednesday after Buffett's Berkshire Hathaway Inc. said late Tuesday it was investing at least $5 billion in Goldman -- a move Wall Street took as a sign of support for the independent investment bank model. Besides buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock.
Goldman also said it will sell $5 billion worth of common stock to the public; the company and Morgan Stanley earlier this week were granted approval to become bank holding companies, which would help them strengthen their balance sheets.
Beyond Goldman, investors put money into defensive areas like health care and utilities. Merck & Co. rose 72 cents, or 2.3 percent, to $31.47, while CenterPoint Energy Inc. rose 29 cents, or 2 percent, to $14.53.
Investors appeared unfazed by a larger-than-expected drop in sales of existing homes in August as their focus remained on the bailout. The National Association of Realtors said sales fell by 2.2 percent; sales had been expected to fall by 1.6 percent, according to economists surveyed by Thomson/IFR. The number of unsold homes on the market dropped by 7 percent from a record set in July, marking the steepest drop in inventory since December 2006.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to a relatively light 4.66 billion shares, compared with 5.11 billion traded Tuesday.
The Russell 2000 index of smaller companies fell 11.42, or 1.61 percent, to 697.77.
Overseas, Japan's Nikkei stock average rose 0.20 percent. Britain's FTSE 100 fell 0.79 percent, Germany's DAX index fell 0.26 percent, and France's CAC-40 fell 0.61 percent.
Wall Street was calmer than during the first two days of this week, with stocks meandering in and out of positive territory while investors tried to determine what shape the $700 billion plan might take. But the atmosphere was uneasy enough to erode the market's initial enthusiasm over investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc.
Investors focused on broader concerns that the dealmaking in Washington could produce less potent medicine than proponents say is necessary to aid moribund credit markets. Fear about bad debt on the books of financial companies has led to tightness in credit markets. That, in turn, has made it harder and more expensive for businesses and consumers to borrow.
Treasury Secretary Henry Paulson told the House Financial Services Committee that he agreed to limit the pay of Wall Street executives whose companies might benefit from the proposed measure.
Paulson appeared with Federal Reserve Chairman Ben Bernanke before Congress for a second day to brief lawmakers. Their appearance on Capitol Hill Tuesday unnerved investors, who began questioning whether lawmakers were doubting the necessity and form of the government bailout.
The waiting was clearly wearing on the credit markets, raising concerns again about liquidity in the banking system.
Demand for short-term government Treasuries increased as investors again sought safe places to keep cash. The yield on the 3-month Treasury bill, considered the safest short-term financial asset, was at 0.49 percent late Wednesday, down from 0.79 percent late Tuesday. Last week, demand spiked so high that the yield briefly dipped into negative territory; investors were so focused on putting their money in safe assets that they have been willing to accept small and at times even negative returns.
In other Treasury trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.81 percent from 3.80 percent late Tuesday.
"I think you're seeing a lot of tough talk from politicians who don't want to seem like they're rolling over for Wall Street and, normally, people would see that for what it is. But right now investors are exceptionally nervous," said Stephen Massocca, co-chief executive of Pacific Growth Equities in San Francisco.
The Dow Jones industrial average fell 29.00, or 0.27 percent, to 10,825.17. The decline leaves the Dow down more than 560 points, or about 5 percent, for the week.
Broader stock indicators were mixed. The Standard & Poor's 500 index slipped 2.35, or 0.20 percent, to 1,185.87, and the Nasdaq composite index rose 2.35, or 0.11 percent, to 2,155.68.
The dollar, whose struggles earlier this week contributed to extreme volatility in other markets, was mixed. Meanwhile, gold prices rose.
Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the New York Mercantile Exchange.
"I think the quiet in the market is essentially the collective breath being held by investors and unfortunately they can't hold their breath forever," said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. "We need Congress to do something."
Shares of Goldman Sachs Group Inc. rose $4.95, or 4 percent, to $130 Wednesday after Buffett's Berkshire Hathaway Inc. said late Tuesday it was investing at least $5 billion in Goldman -- a move Wall Street took as a sign of support for the independent investment bank model. Besides buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock.
Goldman also said it will sell $5 billion worth of common stock to the public; the company and Morgan Stanley earlier this week were granted approval to become bank holding companies, which would help them strengthen their balance sheets.
Beyond Goldman, investors put money into defensive areas like health care and utilities. Merck & Co. rose 72 cents, or 2.3 percent, to $31.47, while CenterPoint Energy Inc. rose 29 cents, or 2 percent, to $14.53.
Investors appeared unfazed by a larger-than-expected drop in sales of existing homes in August as their focus remained on the bailout. The National Association of Realtors said sales fell by 2.2 percent; sales had been expected to fall by 1.6 percent, according to economists surveyed by Thomson/IFR. The number of unsold homes on the market dropped by 7 percent from a record set in July, marking the steepest drop in inventory since December 2006.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to a relatively light 4.66 billion shares, compared with 5.11 billion traded Tuesday.
The Russell 2000 index of smaller companies fell 11.42, or 1.61 percent, to 697.77.
Overseas, Japan's Nikkei stock average rose 0.20 percent. Britain's FTSE 100 fell 0.79 percent, Germany's DAX index fell 0.26 percent, and France's CAC-40 fell 0.61 percent.
Wednesday, September 24, 2008
Post Market Report:24/09/2008
The domestic bourses saw a relief rally today posting decent gains
and snapping losses of the last two trading sessions. The BSE
Sensex rose 122.21 points. The barometer index had lost 472.01
points in last two trading sessions. The market breadth was
positive. Sterlite Industries rose more than 8% on canceling a
restructuring plan. Metal stocks rose. Index heavyweight Reliance
Industries (RIL) edged higher
US stock futures rose boosted by Warren Buffett's Berkshire
Hathaway's announcment of an infusion of $5 billion in Goldman
Sachs Group. Goldman will sell $5 billion of preferred stock to
Berkshire Hathaway, which will also receive warrants to purchase $5
billion of common stock with a strike price of $115 per share.
Berkshire has five years to exercise the warrants. The Dow futures
were up 83 points and the Nasdaq futures were up 14 points.
In Europe, France's CAC 40, Germany's DAX and UK's FTSE 100 were up
by between 0.11% to 0.17%. Most of the Asian markets were trading
higher today, 24 September 2008. Key benchmark indices in Hong
Kong, Singapore, Japan, China and South Korea were up by between
0.2% to 0.99%.
Meanwhile, a US-India civilian nuclear cooperation agreement moved
closer to approval by Congress on Tuesday, 23 September 2008, when
a key Senate Committee passed the deal with a landslide majority.
However, the historic agreement is yet to clear a few hurdles in
its final lap. The bill now goes to the floor of the Senate for the
final ratification.
The BSE 30-share Sensex ended up 122.21 points or 0.9% to
13,692.52. The Sensex rose 270.50 points at day's high of
13,840.81, hit in early afternoon trade. The index rose 22.48
points at the day's low of 13,592.79, hit in mid-afternoon trade.
The S&P CNX Nifty rose 34.35 points or 0.83% to 4,161.25. Nifty
September 2008 futures were at 4182.25, at a premium of 21 points
as compared to spot closing of 4161.25.
The BSE Sensex is down 6594.47 points or 32.5% in the calendar year
2008 so far from its close of 20,286.99 on 31 December 2007. It is
7514.25 points or 35.43% below its all-time high of 21,206.77
struck on 10 January 2008.
BSE clocked a turnover of Rs 4,304 crore today, 24 September 2008
as compared to a turnover of Rs 4,336.47 crore on 23 September
2008.
NSE's futures & options (F&O) segment turnover was Rs 67,051.71
crore, which was lower than Rs 68,368.66 crore on Tuesday, 23
September 2008. The September 2008 derivatives will expire
tomorrow, 25 September 2008.
The BSE Mid-Cap index was up 0.26% at 5,126.78 and the BSE
Small-Cap index was up 0.14% at 6,101.51.
BSE Metal index (up 2.19% to 10,142.29), BSE Oil & Gas index (up
1.22% to 9,435.85), BSE Bankex (up 1.21% to 6,886.65), BSE Power
index (up 1.1% to 2,473.39), BSE Capital Goods index (up 1.09% to
11,340.80) outperformed the Sensex.
BSE Consumer Durables index (down 1.23% to 3,166.84), BSE IT index
(down 1.1% to 3,417.11), BSE Teck index (down 0.15% to 2,759.62),
BSE Auto index was flat at 3,849.27, BSE HealthCare index (up 0.13%
to 3,876.11), BSE Realty index (up 0.34% to 3,916.98), BSE FMCG
index (up 0.35% to 2,189.68) and BSE PSU index (up 0.59% to
6,568.37) underperformed the Sensex.
The market breadth was positive on BSE with 1349 shares advancing
as compared to 1241 that declined. 89 shares remained unchanged.
India's largest private sector firm by market capitalization and
oil refiner Reliance Industries rose 1.89% to Rs 2,047.60.
India's largest commercial vehicle maker by sales Tata Motors
declined 1.55% to Rs 387.95. It came off from the session's high of
Rs 401.85.
India's biggest power generation firm by revenue, NTPC, declined
0.7% to Rs 178.60.
India's largest dedicated housing finance firm by operating income
HDFC declined 0.82% to Rs 2,180.10. It came off from the session's
high of Rs 2,258.20.
India's largest drug maker by sales Ranbaxy Laboratories rose 0.63%
to Rs 310.80. It came off from session's high of Rs 318. Japan's
third-largest drugmaker Daiichi Sankyo said on Wednesday, 24
September 2008, its open offer to buy up to 20% stake in generic
drugmaker Ranbaxy Laboratories was oversubscribed. Investors had
tendered more than 92.5 million Ranbaxy shares between in the open
offer, Daiichi Sankyo said.
In June 2008, Daiichi Sankyo had agreed to buy the 34.8% held by
Ranbaxy's founding family, and to make an open offer for a further
20% of Ranbaxy shares, as per Securities & Exchange Board of India
(Sebi) takeover regulations.
IT stocks recovered from lower levels. But majority of them ended
in the red. Wipro (down 5.05% to Rs 370.75), Infosys (down 1.27% to
Rs 1,523.70) and Tata Consultancy Services (down 1.01% to Rs
713.45) edged lower. India's third largest IT exporter by sales
Satyam Computer Services rose 0.68% to Rs 333.90.
Metal stocks rose. National Aluminum Company (up 5.79% to Rs
419.35), Tata Steel (up 3.13% to Rs 485.70), Hindalco Industries
(up 0.69% to Rs 108.85), Steel Authority of India (up 0.11% to Rs
142.25) and edged higher.
Sterlite Industries (India) surged 8.36% to Rs 487.55 after the
company dropped a restructuring plan. The stock came off from
session's high of Rs 517.70. From a recent high of Rs 622.35 on 8
September 2008, the stock had tumbled 27.7% to Rs 449.95 on 23
September 2008 after parent Vedanta Resources said it will transfer
Sterlite's aluminium and energy businesses to Madras Aluminium
Company as part of restructuring. The restructuring of the Vedanta
group was planned to result in three units focused on commodities
produced by the group: copper, zinc and lead; aluminium and energy;
and iron ore.
India's largest engineering and construction firm by sales Larsen &
Toubro rose 0.85% to Rs 2,553.70 after the company said it has
bagged several large value orders aggregating Rs 5000 crore for the
construction of a slew of institutional, commercial, residential
and factory buildings.
HDFC Bank (up 3.57% to Rs 1,281.85), Tata Steel (up 3.13% to Rs
485.70), Reliance Infrastructure (up 2.92% to Rs 889.10), Grasim
Industries (up 2.35% to Rs 1,935.20), Bharat Heavy Electricals (up
2.29% to Rs 1,663.30), Bharti Airtel (up 2.03% to Rs 810.40) edged
higher from the Sensex pack.
Sesa Goa clocked the highest volume of 96.1 lakh shares on BSE.
Reliance Natural Resources (87.33 lakh shares), Jaiprakash
Associates (75.19 lakh shares), Cals Refineries (63.13 lakh shares)
and Austral Coke & Projects (60.67 lakh shares) were the other
volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 259.22 crore on
BSE. Reliance Industries (Rs 229.66 crore), Austral Coke & Projects
(Rs 149.21 crore), Sterlite Industries (Rs 148.14 crore) and ICICI
Bank (Rs 134.50 crore) were the other turnover toppers in that
order.
and snapping losses of the last two trading sessions. The BSE
Sensex rose 122.21 points. The barometer index had lost 472.01
points in last two trading sessions. The market breadth was
positive. Sterlite Industries rose more than 8% on canceling a
restructuring plan. Metal stocks rose. Index heavyweight Reliance
Industries (RIL) edged higher
US stock futures rose boosted by Warren Buffett's Berkshire
Hathaway's announcment of an infusion of $5 billion in Goldman
Sachs Group. Goldman will sell $5 billion of preferred stock to
Berkshire Hathaway, which will also receive warrants to purchase $5
billion of common stock with a strike price of $115 per share.
Berkshire has five years to exercise the warrants. The Dow futures
were up 83 points and the Nasdaq futures were up 14 points.
In Europe, France's CAC 40, Germany's DAX and UK's FTSE 100 were up
by between 0.11% to 0.17%. Most of the Asian markets were trading
higher today, 24 September 2008. Key benchmark indices in Hong
Kong, Singapore, Japan, China and South Korea were up by between
0.2% to 0.99%.
Meanwhile, a US-India civilian nuclear cooperation agreement moved
closer to approval by Congress on Tuesday, 23 September 2008, when
a key Senate Committee passed the deal with a landslide majority.
However, the historic agreement is yet to clear a few hurdles in
its final lap. The bill now goes to the floor of the Senate for the
final ratification.
The BSE 30-share Sensex ended up 122.21 points or 0.9% to
13,692.52. The Sensex rose 270.50 points at day's high of
13,840.81, hit in early afternoon trade. The index rose 22.48
points at the day's low of 13,592.79, hit in mid-afternoon trade.
The S&P CNX Nifty rose 34.35 points or 0.83% to 4,161.25. Nifty
September 2008 futures were at 4182.25, at a premium of 21 points
as compared to spot closing of 4161.25.
The BSE Sensex is down 6594.47 points or 32.5% in the calendar year
2008 so far from its close of 20,286.99 on 31 December 2007. It is
7514.25 points or 35.43% below its all-time high of 21,206.77
struck on 10 January 2008.
BSE clocked a turnover of Rs 4,304 crore today, 24 September 2008
as compared to a turnover of Rs 4,336.47 crore on 23 September
2008.
NSE's futures & options (F&O) segment turnover was Rs 67,051.71
crore, which was lower than Rs 68,368.66 crore on Tuesday, 23
September 2008. The September 2008 derivatives will expire
tomorrow, 25 September 2008.
The BSE Mid-Cap index was up 0.26% at 5,126.78 and the BSE
Small-Cap index was up 0.14% at 6,101.51.
BSE Metal index (up 2.19% to 10,142.29), BSE Oil & Gas index (up
1.22% to 9,435.85), BSE Bankex (up 1.21% to 6,886.65), BSE Power
index (up 1.1% to 2,473.39), BSE Capital Goods index (up 1.09% to
11,340.80) outperformed the Sensex.
BSE Consumer Durables index (down 1.23% to 3,166.84), BSE IT index
(down 1.1% to 3,417.11), BSE Teck index (down 0.15% to 2,759.62),
BSE Auto index was flat at 3,849.27, BSE HealthCare index (up 0.13%
to 3,876.11), BSE Realty index (up 0.34% to 3,916.98), BSE FMCG
index (up 0.35% to 2,189.68) and BSE PSU index (up 0.59% to
6,568.37) underperformed the Sensex.
The market breadth was positive on BSE with 1349 shares advancing
as compared to 1241 that declined. 89 shares remained unchanged.
India's largest private sector firm by market capitalization and
oil refiner Reliance Industries rose 1.89% to Rs 2,047.60.
India's largest commercial vehicle maker by sales Tata Motors
declined 1.55% to Rs 387.95. It came off from the session's high of
Rs 401.85.
India's biggest power generation firm by revenue, NTPC, declined
0.7% to Rs 178.60.
India's largest dedicated housing finance firm by operating income
HDFC declined 0.82% to Rs 2,180.10. It came off from the session's
high of Rs 2,258.20.
India's largest drug maker by sales Ranbaxy Laboratories rose 0.63%
to Rs 310.80. It came off from session's high of Rs 318. Japan's
third-largest drugmaker Daiichi Sankyo said on Wednesday, 24
September 2008, its open offer to buy up to 20% stake in generic
drugmaker Ranbaxy Laboratories was oversubscribed. Investors had
tendered more than 92.5 million Ranbaxy shares between in the open
offer, Daiichi Sankyo said.
In June 2008, Daiichi Sankyo had agreed to buy the 34.8% held by
Ranbaxy's founding family, and to make an open offer for a further
20% of Ranbaxy shares, as per Securities & Exchange Board of India
(Sebi) takeover regulations.
IT stocks recovered from lower levels. But majority of them ended
in the red. Wipro (down 5.05% to Rs 370.75), Infosys (down 1.27% to
Rs 1,523.70) and Tata Consultancy Services (down 1.01% to Rs
713.45) edged lower. India's third largest IT exporter by sales
Satyam Computer Services rose 0.68% to Rs 333.90.
Metal stocks rose. National Aluminum Company (up 5.79% to Rs
419.35), Tata Steel (up 3.13% to Rs 485.70), Hindalco Industries
(up 0.69% to Rs 108.85), Steel Authority of India (up 0.11% to Rs
142.25) and edged higher.
Sterlite Industries (India) surged 8.36% to Rs 487.55 after the
company dropped a restructuring plan. The stock came off from
session's high of Rs 517.70. From a recent high of Rs 622.35 on 8
September 2008, the stock had tumbled 27.7% to Rs 449.95 on 23
September 2008 after parent Vedanta Resources said it will transfer
Sterlite's aluminium and energy businesses to Madras Aluminium
Company as part of restructuring. The restructuring of the Vedanta
group was planned to result in three units focused on commodities
produced by the group: copper, zinc and lead; aluminium and energy;
and iron ore.
India's largest engineering and construction firm by sales Larsen &
Toubro rose 0.85% to Rs 2,553.70 after the company said it has
bagged several large value orders aggregating Rs 5000 crore for the
construction of a slew of institutional, commercial, residential
and factory buildings.
HDFC Bank (up 3.57% to Rs 1,281.85), Tata Steel (up 3.13% to Rs
485.70), Reliance Infrastructure (up 2.92% to Rs 889.10), Grasim
Industries (up 2.35% to Rs 1,935.20), Bharat Heavy Electricals (up
2.29% to Rs 1,663.30), Bharti Airtel (up 2.03% to Rs 810.40) edged
higher from the Sensex pack.
Sesa Goa clocked the highest volume of 96.1 lakh shares on BSE.
Reliance Natural Resources (87.33 lakh shares), Jaiprakash
Associates (75.19 lakh shares), Cals Refineries (63.13 lakh shares)
and Austral Coke & Projects (60.67 lakh shares) were the other
volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 259.22 crore on
BSE. Reliance Industries (Rs 229.66 crore), Austral Coke & Projects
(Rs 149.21 crore), Sterlite Industries (Rs 148.14 crore) and ICICI
Bank (Rs 134.50 crore) were the other turnover toppers in that
order.
L&T bags Rs5,000 cr order in construction vertical
Mumbai: Engineering and construction major Larsen & Toubro today said it has bagged an order worth Rs5,000 crore for construction related works.
L&T secured the order in the second quarter of this fiscal to build institutional, commercial, residential and factory buildings, a company release said here.
NESCO, Godrej Properties, PBEL Property Development, Om Prakash Jindal and Mahi Cement are firms from whom L&T has bagged the orders.
These orders boost a growth trend that earlier saw the company securing major design and build orders in airports, IT parks and commercial space, the company said.
L&T has been engaged with airport projects in Hyderabad, Bangalore, Delhi and Mumbai.
L&T secured the order in the second quarter of this fiscal to build institutional, commercial, residential and factory buildings, a company release said here.
NESCO, Godrej Properties, PBEL Property Development, Om Prakash Jindal and Mahi Cement are firms from whom L&T has bagged the orders.
These orders boost a growth trend that earlier saw the company securing major design and build orders in airports, IT parks and commercial space, the company said.
L&T has been engaged with airport projects in Hyderabad, Bangalore, Delhi and Mumbai.
Simplex Infra bags Rs630cr order in Middle-East
Mumbai: Engineering firm Simplex Infrastructure today said it has bagged a Rs 630-crore order in the Middle East.
In a filing to the Bombay Stock Exchange Simplex said it has bagged the order for construction of a twin-tower complex in Dubai, which would add to its overseas revenue.
“This project would provide impetus to us in further capitalising on the emerging prospects in the national and international markets,” Simplex Infrastructure Director Amitabh Das Mundhra said.
“With the business growing at over 50%, we expect about 25% revenue from overseas operations,“ he added.
Earlier, the company had secured another order worth Rs587 crore for building a residential tower in Dubai, the filing added.
Shares of the company were trading at Rs404.10, down 1.20% in the late afternoon trade on the BSE.
In a filing to the Bombay Stock Exchange Simplex said it has bagged the order for construction of a twin-tower complex in Dubai, which would add to its overseas revenue.
“This project would provide impetus to us in further capitalising on the emerging prospects in the national and international markets,” Simplex Infrastructure Director Amitabh Das Mundhra said.
“With the business growing at over 50%, we expect about 25% revenue from overseas operations,“ he added.
Earlier, the company had secured another order worth Rs587 crore for building a residential tower in Dubai, the filing added.
Shares of the company were trading at Rs404.10, down 1.20% in the late afternoon trade on the BSE.
Tata Motors sets dates for $914 mn rights issue
Hong kONG: Tata Motors, India’s top vehicle maker, plans to open its Rs41.5 billion ($914 million) rights issue on 29 September, for shareholders on record as of 16 September, according to a term sheet obtained by Reuters.
The rights issue to ordinary and A-share stockholders will close on 20 October.
Tata has said that proceeds would be used to make an early repayment on some of the short-term funding of its $2.3 billion acquisition of Jaguar and Land Rover from Ford Motor Co. The $3 billion bridge loan expires in June 2009.
Among the banks involved in the offering are JM Financial, ICICI Securities, Citigroup and JPMorgan.
The rights issue to ordinary and A-share stockholders will close on 20 October.
Tata has said that proceeds would be used to make an early repayment on some of the short-term funding of its $2.3 billion acquisition of Jaguar and Land Rover from Ford Motor Co. The $3 billion bridge loan expires in June 2009.
Among the banks involved in the offering are JM Financial, ICICI Securities, Citigroup and JPMorgan.
Ahead of the US Bell: Bernanke briefing
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke is scheduled to return to Capitol Hill Wednesday to provide lawmakers an up-to-date assessment of the economy, and again make the case for Congress to speedily enact the $700 billion financial bailout package.
Bernanke's first stop will be Congress' Joint Economic Committee, where he'll discuss the economy, which has been badly bruised by the housing and credit debacles. That hearing is slated to begin at 10 a.m. EDT.
Unemployment has climbed to a five-year high of 6.1 percent as nervous employers cut jobs, and consumers are hunkering down as the bracing tonic of the government's tax rebates disappears.
Oil prices are up about $15 in the past week, momentarily halting a precipitous two-month slide from the all-time high of $147.27 a barrel reached in mid July.
Appearing Tuesday before the Senate Banking Committee, Bernanke warned that the economy could face grave consequences if credit problems persist because Congress doesn't step in and enact the financial bailout. More jobs would be lost, more homes would fall into foreclosure and the economy will contract, he said.
The plan would let the government buy bad mortgages and other troubled assets held by banks and other financial institutions. Getting those debts off their books, should make them more inclined to lend, breaking through the credit jam and reviving the economy. Congressional leaders predict passage but want significant changes to better protect taxpayers.
Later on Wednesday, Bernanke is scheduled to appear before the House Financial Services Committee, along with Treasury Secretary Henry Paulson, to talk about the state of financial markets and make a fresh pitch for the Bush administration's bailout package. That hearing is slated to begin at noon EDT.
Bernanke's first stop will be Congress' Joint Economic Committee, where he'll discuss the economy, which has been badly bruised by the housing and credit debacles. That hearing is slated to begin at 10 a.m. EDT.
Unemployment has climbed to a five-year high of 6.1 percent as nervous employers cut jobs, and consumers are hunkering down as the bracing tonic of the government's tax rebates disappears.
Oil prices are up about $15 in the past week, momentarily halting a precipitous two-month slide from the all-time high of $147.27 a barrel reached in mid July.
Appearing Tuesday before the Senate Banking Committee, Bernanke warned that the economy could face grave consequences if credit problems persist because Congress doesn't step in and enact the financial bailout. More jobs would be lost, more homes would fall into foreclosure and the economy will contract, he said.
The plan would let the government buy bad mortgages and other troubled assets held by banks and other financial institutions. Getting those debts off their books, should make them more inclined to lend, breaking through the credit jam and reviving the economy. Congressional leaders predict passage but want significant changes to better protect taxpayers.
Later on Wednesday, Bernanke is scheduled to appear before the House Financial Services Committee, along with Treasury Secretary Henry Paulson, to talk about the state of financial markets and make a fresh pitch for the Bush administration's bailout package. That hearing is slated to begin at noon EDT.
Wall Streets heads for higher open on Buffett's $5 billion investment in Goldman Sachs
NEW YORK (AP) -- Financial markets showed some signs of stabilizing Wednesday as investor Warren Buffett's $5 billion bet on Goldman Sachs Group Inc. renewed confidence that U.S. financial firms will survive the credit crisis. Stock futures pointed to a higher opening, although the credit markets, waiting for further news on the government's bank rescue package, were still restrained.
Buffett's Berkshire Hathaway Inc. said Tuesday it was investing at least $5 billion in Goldman -- a move Wall Street took as strong sign of support for the independent investment bank model.
Besides buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering; the company and Morgan Stanley earlier this week were granted approval to become bank holding companies, which would help them strengthen their balance sheets.
Though Buffett's move soothed nervous investors, it could also lead to new questions from lawmakers for Treasury Secretary Henry Paulson, a former co-CEO of Goldman Sachs. He and Federal Reserve Chairman Ben Bernanke are scheduled to appear before Congress for a second day Wednesday to brief lawmakers on a $700 billion bailout measure for financial services firms.
Their appearance on Capitol Hill Tuesday unnerved stock investors, who questioned whether lawmakers were beginning to doubt the necessity and form of the government bailout.
The Dow Jones industrial average futures rose 97, or 0.89 percent, to 10,951. The Dow fell more than 160 points on Tuesday.
The Standard & Poor's 500 index futures rose 13.20, or 1.11 percent, to 1,200.20, and the Nasdaq 100 index futures rose 19, or 1.15 percent, to 1,669.50.
In the bond market, demand for short-term government Treasuries remained strong as investors again sought safe places to keep cash. The yield on the 3-month Treasury bill, considered the safest short-term financial asset, was at 0.71 percent early Wednesday, down from 0.79 percent late Tuesday. In other Treasury trading, the yield on the benchmark 10-year Treasury note fell to 3.78 percent from 3.80 percent late Tuesday.
The dollar, whose weakness earlier this week contributed to intense volatility in the markets on Monday, was up against the euro and Japanese yen.
Light, sweet crude for November delivery rose $1.92 to $108.53 a barrel premarket electronic trading on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average rose 0.20 percent. Britain's FTSE 100 was up 0.24 percent, Germany's DAX index was up 0.37 percent, and France's CAC-40 was up 0.11 percent.
Buffett's Berkshire Hathaway Inc. said Tuesday it was investing at least $5 billion in Goldman -- a move Wall Street took as strong sign of support for the independent investment bank model.
Besides buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman's common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering; the company and Morgan Stanley earlier this week were granted approval to become bank holding companies, which would help them strengthen their balance sheets.
Though Buffett's move soothed nervous investors, it could also lead to new questions from lawmakers for Treasury Secretary Henry Paulson, a former co-CEO of Goldman Sachs. He and Federal Reserve Chairman Ben Bernanke are scheduled to appear before Congress for a second day Wednesday to brief lawmakers on a $700 billion bailout measure for financial services firms.
Their appearance on Capitol Hill Tuesday unnerved stock investors, who questioned whether lawmakers were beginning to doubt the necessity and form of the government bailout.
The Dow Jones industrial average futures rose 97, or 0.89 percent, to 10,951. The Dow fell more than 160 points on Tuesday.
The Standard & Poor's 500 index futures rose 13.20, or 1.11 percent, to 1,200.20, and the Nasdaq 100 index futures rose 19, or 1.15 percent, to 1,669.50.
In the bond market, demand for short-term government Treasuries remained strong as investors again sought safe places to keep cash. The yield on the 3-month Treasury bill, considered the safest short-term financial asset, was at 0.71 percent early Wednesday, down from 0.79 percent late Tuesday. In other Treasury trading, the yield on the benchmark 10-year Treasury note fell to 3.78 percent from 3.80 percent late Tuesday.
The dollar, whose weakness earlier this week contributed to intense volatility in the markets on Monday, was up against the euro and Japanese yen.
Light, sweet crude for November delivery rose $1.92 to $108.53 a barrel premarket electronic trading on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average rose 0.20 percent. Britain's FTSE 100 was up 0.24 percent, Germany's DAX index was up 0.37 percent, and France's CAC-40 was up 0.11 percent.
Nomura buys Lehman's Europe investment bank arm
Japan's Nomura Holdings Inc agreed to buy Lehman Brothers' equities and investment banking business in Europe and the Middle East, in its second swoop on the bankrupt U.S. bank's overseas assets in 24 hours.
Japan's biggest brokerage said it expects to retain "a significant proportion" of the 2,500 staff employed in the businesses.
It did not say how much it would pay but said it would not take on any trading assets or trading liabilities.
Lehman filed for bankruptcy protection last week. Britain's Barclays Plc bought its core U.S. broker-dealer business and Nomura bought its Asia-Pacific arm on Monday. The deals are expected to save most jobs in each region.
Nomura was the frontrunner to buy the European arm after entering exclusive talks with Lehman's administrators in Europe, PricewaterhouseCoopers (PwC), on Monday.
It adds to a run of big deals by major Japanese banks, who have been less hit by financial turmoil and asset writedowns in the past year than rivals, and are snapping up assets from or injecting capital at banks hit by the credit crunch.
Japan's biggest bank, Mitsubishi UFJ Financial, is planning to buy up to a fifth of Morgan Stanley for up to $8.5 billion.
Nomura, the first Japanese securities company to establish an overseas office 81 years ago, said it had struck "two transformational deals" in less than 24 hours.
Its immediate task is to get the Lehman businesses back operating under the Nomura name, it said.
"This transaction will significantly extend our European footprint and international reach, enabling us to realise our strategy of delivering Asia to the world," Nomura Chief Executive Kenichi Watanabe said in a statement.
Much of the business is based in London, where Nomura already has its European headquarters and has 1,500 staff. Before this week's deals, it had 18,000 staff in 30 countries.
PwC said the deal included investment banking and equities in Britain, the Netherlands, Spain, Italy, Germany, Sweden, Qatar, Dubai and Kuwait.
Barclays had also bid for some of Nomura's Asian and European assets, but it didn't want all of the businesses, people familiar with the matter said.
Japan's biggest brokerage said it expects to retain "a significant proportion" of the 2,500 staff employed in the businesses.
It did not say how much it would pay but said it would not take on any trading assets or trading liabilities.
Lehman filed for bankruptcy protection last week. Britain's Barclays Plc bought its core U.S. broker-dealer business and Nomura bought its Asia-Pacific arm on Monday. The deals are expected to save most jobs in each region.
Nomura was the frontrunner to buy the European arm after entering exclusive talks with Lehman's administrators in Europe, PricewaterhouseCoopers (PwC), on Monday.
It adds to a run of big deals by major Japanese banks, who have been less hit by financial turmoil and asset writedowns in the past year than rivals, and are snapping up assets from or injecting capital at banks hit by the credit crunch.
Japan's biggest bank, Mitsubishi UFJ Financial, is planning to buy up to a fifth of Morgan Stanley for up to $8.5 billion.
Nomura, the first Japanese securities company to establish an overseas office 81 years ago, said it had struck "two transformational deals" in less than 24 hours.
Its immediate task is to get the Lehman businesses back operating under the Nomura name, it said.
"This transaction will significantly extend our European footprint and international reach, enabling us to realise our strategy of delivering Asia to the world," Nomura Chief Executive Kenichi Watanabe said in a statement.
Much of the business is based in London, where Nomura already has its European headquarters and has 1,500 staff. Before this week's deals, it had 18,000 staff in 30 countries.
PwC said the deal included investment banking and equities in Britain, the Netherlands, Spain, Italy, Germany, Sweden, Qatar, Dubai and Kuwait.
Barclays had also bid for some of Nomura's Asian and European assets, but it didn't want all of the businesses, people familiar with the matter said.
AIG signs "definitive" $85-bln deal with U.S. Fed
American International Group Inc said late on Tuesday it signed a "definitive" agreement for up to $85 billion in borrowings from the U.S. Federal Reserve, the main part of a rescue by the central bank that will see it take a 79.9 percent stake in the giant insurer.
AIG Chief Executive Edward Liddy said in a statement the facility was "the company's best alternative" in the current market environment.
Under the terms of the agreement, AIG has to pay back the loan from, among other things, asset sales and new debt or share issues. In the statement, AIG made it clear how onerous the terms of the two-year loan will be.
Not only will it pay 8.50 percentage points over 3-month LIBOR, putting the current rate at well over 11 percent, but it will also pay commitment fees.
There will be an initial gross commitment of 2 percent of the total loan facility, and subsequently a fee on undrawn amounts of 8.5 percent a year. The interest and the fees will be added to the balance outstanding, the company said.
"We are pleased to have finalized the terms of the facility, and are already developing a plan to sell assets, repay the facility and emerge as a smaller but profitable company," Liddy said in the statement.
It wasn't immediately clear whether the signing of the agreement will derail efforts by a large investor group that is working to thwart a government takeover of the company.
A lawyer for the investors -- which represent more than a third of all AIG stockholders and have the backing of former CEO Maurice "Hank" Greenberg -- said representatives of the group were to be briefed by the company on its financial position.
The rescue plan was unveiled Sept. 16 amid the most tumultuous week in financial markets in recent memory.
AIG Chief Executive Edward Liddy said in a statement the facility was "the company's best alternative" in the current market environment.
Under the terms of the agreement, AIG has to pay back the loan from, among other things, asset sales and new debt or share issues. In the statement, AIG made it clear how onerous the terms of the two-year loan will be.
Not only will it pay 8.50 percentage points over 3-month LIBOR, putting the current rate at well over 11 percent, but it will also pay commitment fees.
There will be an initial gross commitment of 2 percent of the total loan facility, and subsequently a fee on undrawn amounts of 8.5 percent a year. The interest and the fees will be added to the balance outstanding, the company said.
"We are pleased to have finalized the terms of the facility, and are already developing a plan to sell assets, repay the facility and emerge as a smaller but profitable company," Liddy said in the statement.
It wasn't immediately clear whether the signing of the agreement will derail efforts by a large investor group that is working to thwart a government takeover of the company.
A lawyer for the investors -- which represent more than a third of all AIG stockholders and have the backing of former CEO Maurice "Hank" Greenberg -- said representatives of the group were to be briefed by the company on its financial position.
The rescue plan was unveiled Sept. 16 amid the most tumultuous week in financial markets in recent memory.
RBI seeks data from non-bank finance firms
The Reserve Bank of India (RBI) on Wednesday said non-banking financial companies which are not in business of taking deposits must submit basic business information to the RBI each quarter.
The rule applies to finance companies with an asset size between 500 million rupees and 1 billion rupees, it said.
The first such returns for the quarter ended September 2008 may be submitted by the first week of December, the RBI said in a circular posted on its website
The rule applies to finance companies with an asset size between 500 million rupees and 1 billion rupees, it said.
The first such returns for the quarter ended September 2008 may be submitted by the first week of December, the RBI said in a circular posted on its website
Tata Motors begins exit from Nano site: Report
Tata Motors, India’s top vehicle maker, has started moving equipment from its factory in eastern India, the Times of India newspaper said on Wednesday, as the company scrambles to launch the ultra-cheap Nano car as planned.
Tata Motors, which had planned to launch the Nano around October, had suspended work at the plant in Singur in West Bengal state earlier this month due to violent protests by farmers unhappy with the compensation offered for their land.
While talks between the state and opposition politicians backing the farmers were still underway, attacks on two security guards at the factory on Monday “might have been the last straw”, the Times of India said, citing unnamed government officials.
Earlier, NDTV Profit news channel had reported the company was likely to make a public announcement about its exit from West Bengal next week “unless something dramatic happens very soon”.
A spokesman for Tata Motors declined comment on the reports.
At the time of suspending work in Singur on 2 September, Tata Motors had said it was considering alternate locations to make the Nano, billed as the world’s cheapest car.
Last week, Tata Motors, which aims to price the Nano at just above Rs100,000 ($2,183), said southern Karnataka state, where it is already building a commercial vehicle plant, had offered land.
Tata Motors’ managing director said at the time they were “actively” looking at alternatives including Karnataka. Other states have also made offers to the Tatas, India’s second-largest conglomerate with interests ranging from salt to software.
“It is doubtful at this stage whether Tata Motors will be prepared to sit and wait for at least another fortnight for the situation to be resolved,” said Ian Fletcher, automotive analyst at research firm Global Insight in London.
“The other alternative is to move the entire project to one of the other states that have expressed an interest ... but it is uncertain whether Tata would be prepared to undergo such upheaval so close to the completion of the project,” he said.
Cost overruns caused by the delays in Singur have already raised the cost of the Nano project.
The company, India’s third-biggest carmaker, may be able to roll out a few hundreds or a few thousands of Nano cars from a plant in northern Uttarakhand state or from the western city of Pune, analysts have said.
But the rollout will fall well below the planned initial capacity of 250,000 units at the Singur plant.
The launch of the Nano in October, the peak of the festival season in India when demand rises, is crucial for the company, which is seeing softer demand for its dominant commercial vehicles because of high interest rates and fuel prices.
Tata Motors, which had planned to launch the Nano around October, had suspended work at the plant in Singur in West Bengal state earlier this month due to violent protests by farmers unhappy with the compensation offered for their land.
While talks between the state and opposition politicians backing the farmers were still underway, attacks on two security guards at the factory on Monday “might have been the last straw”, the Times of India said, citing unnamed government officials.
Earlier, NDTV Profit news channel had reported the company was likely to make a public announcement about its exit from West Bengal next week “unless something dramatic happens very soon”.
A spokesman for Tata Motors declined comment on the reports.
At the time of suspending work in Singur on 2 September, Tata Motors had said it was considering alternate locations to make the Nano, billed as the world’s cheapest car.
Last week, Tata Motors, which aims to price the Nano at just above Rs100,000 ($2,183), said southern Karnataka state, where it is already building a commercial vehicle plant, had offered land.
Tata Motors’ managing director said at the time they were “actively” looking at alternatives including Karnataka. Other states have also made offers to the Tatas, India’s second-largest conglomerate with interests ranging from salt to software.
“It is doubtful at this stage whether Tata Motors will be prepared to sit and wait for at least another fortnight for the situation to be resolved,” said Ian Fletcher, automotive analyst at research firm Global Insight in London.
“The other alternative is to move the entire project to one of the other states that have expressed an interest ... but it is uncertain whether Tata would be prepared to undergo such upheaval so close to the completion of the project,” he said.
Cost overruns caused by the delays in Singur have already raised the cost of the Nano project.
The company, India’s third-biggest carmaker, may be able to roll out a few hundreds or a few thousands of Nano cars from a plant in northern Uttarakhand state or from the western city of Pune, analysts have said.
But the rollout will fall well below the planned initial capacity of 250,000 units at the Singur plant.
The launch of the Nano in October, the peak of the festival season in India when demand rises, is crucial for the company, which is seeing softer demand for its dominant commercial vehicles because of high interest rates and fuel prices.
IFC lends $100 mln to India's Idea Cellular
IFC, an arm of the World Bank, said on Wednesday it had loaned $100 million to Idea Cellular Ltd to help expand availability of affordable mobile telephone services in the country.
The loan will help strengthen Idea's network in its existing markets and enable extension of services to Bihar, one of the few states in India without a well-developed telecommunications network, the IFC said in a statement.
"IFC's investment will provide the much-needed long-term funding that many companies in India find difficult to access, while helping expand the local telecommunications infrastructure," Sanjeev Aga, managing director of Idea, said.
Idea, India's fifth-largest mobile operator, last month launched services in Mumbai and also provides services in 11 of India's 22 telecoms service areas.
The extension of services in Bihar will help increase telephone penetration in the eastern state to more than 20 percent by 2012 from less than 8 percent in 2008, IFC said.
IFC and Idea are developing a project to deliver mobile phone-based communications and other services to rural communities and the urban poor in India, it said.
The loan will help strengthen Idea's network in its existing markets and enable extension of services to Bihar, one of the few states in India without a well-developed telecommunications network, the IFC said in a statement.
"IFC's investment will provide the much-needed long-term funding that many companies in India find difficult to access, while helping expand the local telecommunications infrastructure," Sanjeev Aga, managing director of Idea, said.
Idea, India's fifth-largest mobile operator, last month launched services in Mumbai and also provides services in 11 of India's 22 telecoms service areas.
The extension of services in Bihar will help increase telephone penetration in the eastern state to more than 20 percent by 2012 from less than 8 percent in 2008, IFC said.
IFC and Idea are developing a project to deliver mobile phone-based communications and other services to rural communities and the urban poor in India, it said.
Sterlite shares jump as restucturing dropped
Shares in Sterlite Industries India Ltd, part of miner Vedanta Resources Plc, jumped to two-week highs on Wednesday after the business group said it was shelving a plan to restructure its business.
India-focused Vedanta had announced on Sept. 9 a restructuring plan to form three commodity-focused groups: copper, zinc and lead; aluminium and energy; and iron ore.
On Wednesday, Vedanta said it was dropping its restructuring plan on account of the global financial markets, and Sterlite issued a similar statement.
"In view of the recent changes in the global financial markets, and investor feedback ... the board has decided not to pursue the proposed restructuring scheme," Sterlite said in its statement to the stock exchange in Mumbai.
"The company is committed to simplifying and streamlining the group corporate structure in the interest of all shareholders."
Anil Agarwal, chairman of both Vedanta and Sterlite, said restructuring plan was dropped because the investor mood had soured, but it would not impact any projects or spending plans.
"No one was in a mood ... there was no point in going ahead with this," Agarwal said in a television interview.
"We are having $6.5 billion of cash sitting with us and also the company is generating enough profit. At this time we are comfortable to pursue our projects. No capex plan will be postponed," he said.
"We should be in a position to complete our projects on time. We are not curtailing any projects."
Shares in Sterlite rose as much as 15.1 percent to 517.70 rupee, their highest since Sept 11.
In other group companies, shares in iron-ore exporter Sesa Goa trimmed morning losses and were down 1 percent at 126 rupees, and Madras Aluminium extended gains to 5 percent, their maximum daily limit, at 128.55 rupees.
Sterlite had risen 6.3 percent in morning trade after a U.S. judge cleared the way for creditors of bankrupt copper miner Asarco LLC to vote on two competing plans, including Sterlite's $2.6 billion bid.
India-focused Vedanta had announced on Sept. 9 a restructuring plan to form three commodity-focused groups: copper, zinc and lead; aluminium and energy; and iron ore.
On Wednesday, Vedanta said it was dropping its restructuring plan on account of the global financial markets, and Sterlite issued a similar statement.
"In view of the recent changes in the global financial markets, and investor feedback ... the board has decided not to pursue the proposed restructuring scheme," Sterlite said in its statement to the stock exchange in Mumbai.
"The company is committed to simplifying and streamlining the group corporate structure in the interest of all shareholders."
Anil Agarwal, chairman of both Vedanta and Sterlite, said restructuring plan was dropped because the investor mood had soured, but it would not impact any projects or spending plans.
"No one was in a mood ... there was no point in going ahead with this," Agarwal said in a television interview.
"We are having $6.5 billion of cash sitting with us and also the company is generating enough profit. At this time we are comfortable to pursue our projects. No capex plan will be postponed," he said.
"We should be in a position to complete our projects on time. We are not curtailing any projects."
Shares in Sterlite rose as much as 15.1 percent to 517.70 rupee, their highest since Sept 11.
In other group companies, shares in iron-ore exporter Sesa Goa trimmed morning losses and were down 1 percent at 126 rupees, and Madras Aluminium extended gains to 5 percent, their maximum daily limit, at 128.55 rupees.
Sterlite had risen 6.3 percent in morning trade after a U.S. judge cleared the way for creditors of bankrupt copper miner Asarco LLC to vote on two competing plans, including Sterlite's $2.6 billion bid.
Miner Vedanta drops restructure plan, shares sink
LONDON (Reuters) - Investors shed Vedanta Resources Plc shares on Wednesday after the India-focused miner dropped plans to split itself into three units, bowing to pressure from shareholders of its Sterlite Industries unit.
The restructuring aimed to streamline the company into three units focused on the commodities it produces: copper, zinc and lead; aluminium and energy; and iron ore.
It was welcomed by analysts when announced on Sept. 9 after a string of acquisitions in recent years resulted in overlapping businesses and cross-holdings between firms within the London-listed group.
Vedanta shares, which have shed a quarter of their value so far this year, fell 3.4 percent to 1,475 pence by 0751 GMT, lagging a 0.5 percent increase in the UK mining index.
"In view of the recent changes in global financial markets and investor feedback, Vedanta has decided not to pursue the proposed group restructuring," a statement said.
"Vedanta remains committed to simplifying and streamlining its corporate structure in the interests of all shareholders."
Wednesday's brief statement did not give details of why some investors opposed the move and how the turmoil on financial markets affected the plans.
Analyst Michael Rawlinson at Liberum Capital in London said Sterlite shareholders were worried about heavy dilution from the proposal, which would have seen new Sterlite shares issued for the transfer to Sterlite of Zambian copper unit Konkola Copper Mines (KCM).
"The news is a disappointment for Vedanta shareholders as on balance we liked the deal terms and structure," he said.
Shares in Indian-listed Sterlite, in which Vedanta owns 80 percent, jumped as much as 15 percent and were trading 9.2 percent stronger at 491.50 rupees.
ZAMBIAN UNIT VALUATION
A source close to the company said the main sticking point was the proposed valuation of KCM.
"There was widespread support for simplification, but there were a minority of Sterlite shareholders who weren't happy. So rather than force something through, the board thought it was quite important to have the support of all the shareholders," said the source, who declined to be named.
Vedanta, which earlier this month announced plans to boost aluminium output more than sixfold, will not postpone any of its capital expenditure plans, Chairman Anil Agarwal told Indian television.
"We have $6.5 billion of cash sitting with us and also the company is generating enough profit, at this time we are comfortable with pursuing our projects," Agarwal told CNBC TV18.
The firm previously said it planned to spend $9.8 billion to increase aluminium capacity to 2.6 million tonnes by 2012, making it the world's fourth-biggest producer after Rio Tinto's Alcan, Russia's UC Rusal and U.S.-based Alcoa.
The restructuring aimed to streamline the company into three units focused on the commodities it produces: copper, zinc and lead; aluminium and energy; and iron ore.
It was welcomed by analysts when announced on Sept. 9 after a string of acquisitions in recent years resulted in overlapping businesses and cross-holdings between firms within the London-listed group.
Vedanta shares, which have shed a quarter of their value so far this year, fell 3.4 percent to 1,475 pence by 0751 GMT, lagging a 0.5 percent increase in the UK mining index.
"In view of the recent changes in global financial markets and investor feedback, Vedanta has decided not to pursue the proposed group restructuring," a statement said.
"Vedanta remains committed to simplifying and streamlining its corporate structure in the interests of all shareholders."
Wednesday's brief statement did not give details of why some investors opposed the move and how the turmoil on financial markets affected the plans.
Analyst Michael Rawlinson at Liberum Capital in London said Sterlite shareholders were worried about heavy dilution from the proposal, which would have seen new Sterlite shares issued for the transfer to Sterlite of Zambian copper unit Konkola Copper Mines (KCM).
"The news is a disappointment for Vedanta shareholders as on balance we liked the deal terms and structure," he said.
Shares in Indian-listed Sterlite, in which Vedanta owns 80 percent, jumped as much as 15 percent and were trading 9.2 percent stronger at 491.50 rupees.
ZAMBIAN UNIT VALUATION
A source close to the company said the main sticking point was the proposed valuation of KCM.
"There was widespread support for simplification, but there were a minority of Sterlite shareholders who weren't happy. So rather than force something through, the board thought it was quite important to have the support of all the shareholders," said the source, who declined to be named.
Vedanta, which earlier this month announced plans to boost aluminium output more than sixfold, will not postpone any of its capital expenditure plans, Chairman Anil Agarwal told Indian television.
"We have $6.5 billion of cash sitting with us and also the company is generating enough profit, at this time we are comfortable with pursuing our projects," Agarwal told CNBC TV18.
The firm previously said it planned to spend $9.8 billion to increase aluminium capacity to 2.6 million tonnes by 2012, making it the world's fourth-biggest producer after Rio Tinto's Alcan, Russia's UC Rusal and U.S.-based Alcoa.
US hedge fund Paulson bets big against UK banks
LONDON (Reuters) - World stocks steadied on Wednesday and safe-haven government bonds rose after Warren Buffett's investment in Goldman Sachs failed to calm anxiety over the prospects for Washington's $700 billion bank bailout.
Billionaire investor Buffett's Berkshire Hathaway Inc will invest $5 billion in Goldman, a major boost for the Wall Street bank whose shares fell 50 percent from their 2007 record high in this month's market turmoil.
However, the news failed to significantly boost risky assets after the U.S. government's push for quick congressional approval of its financial rescue plan hit a wall of opposition on Tuesday among senators who said the plan puts taxpayers at risk.
Federal Reserve chairman Ben Bernanke testifies again later, after warning lawmakers on Tuesday that a failure to act could doom the economy to a recession.
"The market is still nervous about the outcome of the proposed U.S. plan as politics seems to be making the deal more complicated," said Ryuji Shimai, market analyst at Shinko Securities in Tokyo.
The FTSEurofirst 300 index erased early gains to stand flat on the day while the MSCI world equity index was broadly steady.
U.S. stock futures were up more than 1 percent, pointing to a stronger start on Wall Street later.
"Buffett's legendary status as a value investor gives the bulls reason for optimism, as some will see his move as a sign to call the bottom of the recent declines," said Chris Hossain, senior sales manager at ODL Securities.
The December bund future rose 30 ticks as jittery investors sought safety in government bonds.
Strains in the interbank money market lingered, with overnight dollar rates rising 195 basis points above the Fed's target rate at one point, before falling to stand around 30 bps above the rate.
The Fed moved for the second time within 24 hours to provide liquidity, acting in concert with Australia and Scandinavia, while the euro zone, Britain, Japan and Australia injected billions of dollars into their banking systems.
Once a byword for safety and liquidity, the short-term lending market where banks lend to each other has repeatedly seized up in the financial crisis because of increasing worries over the creditworthiness of borrowers.
The dollar was steady against a basket of major currencies while the euro stood unchanged on the day at $1.4654 .
Emerging sovereign spreads tightened 3 basis points while emerging stocks rose 0.4 percent on the day.
U.S. light crude rose 1.6 percent following forecasts of a drop in U.S. crude stocks. Gold rose edged lower to $887.80 an ounce.
Billionaire investor Buffett's Berkshire Hathaway Inc will invest $5 billion in Goldman, a major boost for the Wall Street bank whose shares fell 50 percent from their 2007 record high in this month's market turmoil.
However, the news failed to significantly boost risky assets after the U.S. government's push for quick congressional approval of its financial rescue plan hit a wall of opposition on Tuesday among senators who said the plan puts taxpayers at risk.
Federal Reserve chairman Ben Bernanke testifies again later, after warning lawmakers on Tuesday that a failure to act could doom the economy to a recession.
"The market is still nervous about the outcome of the proposed U.S. plan as politics seems to be making the deal more complicated," said Ryuji Shimai, market analyst at Shinko Securities in Tokyo.
The FTSEurofirst 300 index erased early gains to stand flat on the day while the MSCI world equity index was broadly steady.
U.S. stock futures were up more than 1 percent, pointing to a stronger start on Wall Street later.
"Buffett's legendary status as a value investor gives the bulls reason for optimism, as some will see his move as a sign to call the bottom of the recent declines," said Chris Hossain, senior sales manager at ODL Securities.
The December bund future rose 30 ticks as jittery investors sought safety in government bonds.
Strains in the interbank money market lingered, with overnight dollar rates rising 195 basis points above the Fed's target rate at one point, before falling to stand around 30 bps above the rate.
The Fed moved for the second time within 24 hours to provide liquidity, acting in concert with Australia and Scandinavia, while the euro zone, Britain, Japan and Australia injected billions of dollars into their banking systems.
Once a byword for safety and liquidity, the short-term lending market where banks lend to each other has repeatedly seized up in the financial crisis because of increasing worries over the creditworthiness of borrowers.
The dollar was steady against a basket of major currencies while the euro stood unchanged on the day at $1.4654 .
Emerging sovereign spreads tightened 3 basis points while emerging stocks rose 0.4 percent on the day.
U.S. light crude rose 1.6 percent following forecasts of a drop in U.S. crude stocks. Gold rose edged lower to $887.80 an ounce.
European stocks gain on EDF, Buffett investment plan
LONDON, Sept 24 (Reuters) - European shares rose early on Wednesday, helped by EDF's (EDF.PA: Quote, Profile, Research, Stock Buzz) agreed bid for British Energy (BGY.L: Quote, Profile, Research, Stock Buzz) and news that Warren Buffett's Berkshire Hathaway Inc will invest $5 billion in U.S. Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz).
By 0846 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,113.30 points after rising as high as 1,116.45. The benchmark closed 1.6 percent lower on Tuesday and is down about 26 percent so far this year.
A move by central banks to inject money into the financial system also lifted sentiment.
The U.S. Federal Reserve moved for the second time in 24 hours to keep the wheels of the financial world turning, acting in concert with Australia and Scandinavia to supply money markets with $30 billion in funds.
By 0846 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,113.30 points after rising as high as 1,116.45. The benchmark closed 1.6 percent lower on Tuesday and is down about 26 percent so far this year.
A move by central banks to inject money into the financial system also lifted sentiment.
The U.S. Federal Reserve moved for the second time in 24 hours to keep the wheels of the financial world turning, acting in concert with Australia and Scandinavia to supply money markets with $30 billion in funds.
Subscribe to:
Posts (Atom)