Companies & Sectors
2G spectrum auction: Bids cross Rs52,700 crore on 5th day

During the 33rd round, the bids for 2G spectrum in the 1800 MHz and 900 MHz band crossed Rs52,700 crore

The ongoing 2G spectrum auction has entered its 33rd round of bidding after starting off from the Rs52,689 crore mark on Friday morning.


According to an official statement, the auction of spectrum in the 1800 MHz and 900 MHz band that began on 3rd February completed 32 rounds, as per the latest information available on the fifth day and bidding was ongoing.


The government had received Rs30,754 crore of bids for the 1800 MHz band and bids totalling Rs21,935 crore for the 900 MHz band at the end of the fourth day.


There is no time limit for the sale of spectrum and the duration of the auction will depend on the appetite of the eight companies in the fray - Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio Infocomm, Aircel, Tata Teleservices, Telewings (Uninor) and Reliance Communications.


Winners of spectrum in auctions are allowed to borrow as much as $750 million, or about Rs4,671 crore, from overseas in every financial year to pay for the airwaves, the government had said in Parliament.


At the end of each bidding round, the price of airwaves is increased in the range of 1% to 10%, depending on the number of spectrum blocks in demand.


The price of the 900 MHz band in Delhi shot up by about 78% to Rs639.24 crore per MHz, compared with the base price of Rs360 crore fixed by the government. In the 1800 MHz band, the reserve price rose by 5% to Rs230 crore a MHz.


The auction for the fourth day ended with no excess demand for the first time for the 900 MHz in any of the three metros - Delhi, Mumbai and Kolkata.


In Mumbai, the price of the 900 MHz band increased 72% to Rs563.09 crore per MHz and in Kolkata it rose 54% to Rs 192.71 crore.


The government is offering about 385 MHz of spectrum in the 1800 MHz band, which started on 3rd February, following a February 2013 Supreme Court order.


Also on offer are airwaves in the 900 MHz band in Delhi, Mumbai and Kolkata, which are held by Vodafone, Airtel and Loop Mobile, whose licences expire in November.


The 3G auction in 2010 took place over 34 days, while the auction in November 2012 lasted for two days and the March auction last year was a one-day affair.


In November 2012, bids worth Rs9,407 crore were received for spectrum worth Rs28,000 on offer.


In March 2013, no GSM operators participated in the auction and only CDMA operator Sistema Shyam bought spectrum of about Rs 3,600 crore in eight of the 21 service areas


RBI is warding of the contagion in the financial market with its rate hikes, says SBI Research

With the Fed going for another round of taper at $10 billion, it is now evident that emerging economies (including India) are in close sync to ward off any destabilising impact on their domestic currencies, says SBI Research in its research note

The RBI (Reserve Bank of India) hiked the repo rate by 25 basis points on 28 January 2014 and the rate hike was ostensibly done with the purpose of reigning in inflation, but SBI Research believes it also served another purpose, warding of the contagion in the financial market. This is its opening remark in its research note of January 2014.


According to SBI Research, with the Fed going for another round of taper at $10 billion, it is now evident that emerging economies (including India) are in close sync to ward off any destabilising impact on their domestic currencies.


The year 2014 has already marked the start of the withdrawal of quantitative easing (QE) in the United States and a range of asymmetric policy responses across developed economies. SBI Research points out that the most desired and likely scenario is for the taper to follow a relatively orderly trajectory and for global interest rates to rise only slowly – reaching 3.6% only by mid-2016. Under this scenario capital flows to developing countries is projected to ease from about 4.6% of developing country GDP in 2013 to 4.1% in 2016, as investors take advantage of higher yields in high-income countries.


According to SBI Research, for emerging market economies, growth in 2013 was relatively weak, at an estimated 4.8%. It has been firming in recent months – partly reflecting strengthening growth in high-income countries, but also a recovery from earlier weakness in large middle-income countries, such as India and China. Overall, growth in developing countries is projected to come to about 5.3% this year and 5.5% and 5.7% in 2015 and 2016 respectively. India will not be an exception in this context.


Sensex, Nifty may decline after Tuesday: Weekly Market Report

While the recent downtrend in Nifty seems over, a fresh downtrend may start soon in the later part of the upcoming week

The BSE Sensex closed the week that ended on 7th February, at 20,376.56 (down 137 points or 0.67%) while the NSE Nifty closed at 6,063.20 (down 26 points or 0.43%) for the week.


In our last weekly market report, we had mentioned that if the Nifty goes below 6,060, it may test 6,000 or lower. Nifty closed almost near 6,000 on Monday itself. The market sentiment was affected by the slowdown in Chinese manufacturing growth on one hand and on the other the government back home revised the GDP growth rate for the year ended 31 March 2013 downwards to 4.5% from 5% reported earlier. A Chinese manufacturing gauge fell to a six-month low in January as output and orders slowed. Nifty closed at 6,002 (down 88 points or 1.44%).


Negative closing of the US indices on Monday and the weakness on the Asian counterparts spread to the bourses back home on Tuesday. However Indian market was trying to recover from the day’s low which was hit at the start of the day. Data showed factory activity in the US expanded in January at the weakest pace in eight months as orders slumped. Nifty closed at 6,001 (down 0.90 point).


On Wednesday, Nifty closed at 6,022 (up 22 points or 0.36%). The headline HSBC services business activity index increased from December's 46.7 to 48.3 in January, signaling a moderate rate of output contraction that was the weakest in the current seven-month sequence of decrease.


Finance Minister P Chidambaram expressed doubt over passing any key legislation, except for the vote-on-account, during the extended part of the Winter Session of Parliament that began on Wednesday. The Finance Minister also assured that the red line for fiscal deficit drawn by him 18 months ago will not be breached.


Indian markets managed to come out from the sudden plunge, which it made at the beginning of the day, and closed in the positive. As anticipated the controversy over Telangana, along with a number of other issues, washed out proceedings in Parliament for the second day. Nifty closed at 6,036 (up 14 points or 0.23%).


News from US, Philadelphia President Charles Plosser, who votes on policy this year, said he foresees the economy to expand 3% in 2014 as the jobless rate falls to 6.2% by year-end, warranting a quicker tapering to bond purchases by the central bank.


On the back of the news from the US where the initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended February 1 the indices back home moved up on Friday. After a volatile session where the Nifty traded almost in the green for the entire session, the index closed at 6,063 (up 27 points or 0.45%).


For the week, among the other indices on the NSE, the top two performers were Pharma (2%) and Media (2%) while the worst two performers were IT Sector (3%) and Service (1%).
Among the Nifty stocks, the top five stocks for the week were Coal India (9%); Tata Steel (8%); N T P C (8%); Ranbaxy (5%) and Lupin  (4%) while the top five losers were BHEL (10%); TCS (4%); HCL Technologies (4); Infosys (4%) and HDFC (3%).
Of the 1,354 companies on the NSE, 680 companies closed in the green, 628 companies closed in the red while 46 companies closed flat.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
Top ML sectors   Worst ML sectors  
Energy 4% Software & IT Services -3%
Sugar 3% Non-Ferrous Metals -3%
Pharma 2% Shipping -1%
Auto Components 2% Oil & Gas -1%
Auto 2% Refineries -1%


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