Meredith Whitney came out with a prescient warning about bank stocks in 2007. Now she is being lambasted by the news media-and by colleagues-for predicting a calamity in municipal bonds.
The US market ended with gains on Monday sending the Dow and the S&P 500 near their two-and-half year closing highs
Global cues indicate a cautious opening for the domestic market today. The US market ended with gains on Monday sending the Dow and the S&P 500 near their two-and-half year closing highs. The Asian pack was mostly higher in early trade on Tuesday on optimism from the US markets. The SGX Nifty was down 14.50 points at 5,390.50 compared to its previous close of 5,405.
Yesterday the market opened with decent gains as investors went bargain-hunting, picking up stocks at lower levels after the decline seen last week. The uptick was also supported by the Asian peers, which were mostly higher in early trade, most of which opened after the Lunar New Year holiday last week. Choppiness resulted in the indices touching their previous close a couple of times, but positive momentum continued with the market trading range-bound. However, the broader markets wilted under selling pressure, trading in the red. The market touched an intraday high in post-noon trade after which selling pressure became intense, pushing the key benchmarks into negative terrain. However, the indices were able to pull themselves out of the red, only to finish flat.
Although the market ended positive, it closed well below the day's opening. The Sensex ended 29 points up at 18,037 while the Nifty ended 0.25 points up at 5,396. The advance-decline on the National Stock Exchange was a poor 587:1,141. The market is not out of the woods yet. The Nifty has to cross 5,550 before we can look forward to some sort of rally.
Wall Street closed in the green, supported by deal news. The gains were also supported by president Obama’s comments that he would seek corporates’ help to tackle corporate taxes. He, however, did not specify any plan.
In merger and acquisition news, Danaher Corporation announced plans to buy laboratory-equipment maker Beckman Coulter Inc for $6.8 billion, Ensco Plc said it will buy drilling contractor Pride International Inc for $7.3 billion and Berkshire Hathaway Inc received a nod from its board to buy the 19.9% of the stock it doesn’t own in Wesco Financial Corporation.
In economic news, US outstanding consumer instalment credit climbed $6.1 billion, nearly triple the $2.3 billion that economists predicted, after an upwardly revised $2 billion increase in November. Total credit outstanding climbed $6.1 billion, nearly triple the $2.3 billion that Wall Street economists surveyed by Reuters had forecast, after an upwardly revised $2 billion increase in November. The rise came on the back of higher credit card usage, the best in two years.
The Dow gained 69.40 points (0.57%) at 12,161.55. The S&P 500 added 8.18 points (0.62%) at 1,319.05 and the Nasdaq rose 14.69 points (0.53%) at 2,783.99.
Markets in Asia were mostly higher in early trade today on improved earnings and news of merger deals in the US. Lower crude prices on easing of tensions in Egypt also supported investor sentiment. However, possible policy tightening steps kept gains in check.
The Hang Seng was up 0.03%, the Jakarta Composite gained 0.23%, the KLSE Composite rose 0.47%, the Nikkei 225 advanced 0.32% and the Taiwan Weighted added 0.10%. On the other hand, the Straits Times shed 0.17% and the Seoul Composite lost 0.24%.
Back home, the Telecom Regulatory Authority of India (TRAI) on Monday floated a tender to appoint an agency for calculating liability of transit carriage charges on individual operators, including Bharat Sanchar Nigam (BSNL).
The Supreme Court, on 30 August 2010, had asked TRAI to fix liability on individual telecom service providers. The telecom regulator had challenged telecom tribunal ruling which upheld state-owned BSNL’s view that transit carriage charges (TCC) should be calculated on call distance and not on per minute basis.
TCC is part of the network Interconnect Usage Charge (IUC). An operator, from where the call originates, has to pay IUC to another service provider on whose network calls end.
In a major positive development for the Indian TV distribution space, the I&B Ministry has given its approval for the TRAI recommendations and proposed a revised schedule for digitisation of cable distribution in the country
The information and broadcasting ministry has accepted the Telecom Regulatory Authority of India's (TRAI) recommendations on complete digitisation of television broadcasting, but it has proposed pushing back the deadline for implementation from 2013 to 2015. Representatives of cable companies are meeting TRAI officials today on the issue.
The ministry's proposal has been hailed by cable companies like Den and Hathway Cable, whose stock prices have surged after the announcement on Saturday. Cable operators are beaming too, as the deadline extension will enable them to educate their subscribers about set-top boxes (STB).
According to the ministry's proposal, digitisation will take place in four phases: the four metros Delhi, Mumbai, Chennai and Kolkata will be covered in Phase I by March 2012, Phase II will cover cities with more than one million population by March 2013, urban areas will be covered in Phase III by March 2014 and the rest of the country in Phase IV by March 2015.
Experts are optimistic about the move. Nikhil Vora, analyst at IDFC Securities, says, "The push may translate into overall growth for the industry. Not to mention, it will provide the viewer with more choices." To encourage the move, duties on the necessary equipment will be decreased and companies will be allowed to lay out optical fibres. TRAI has recommended that companies who complete digitisation by the deadline will be eligible for tax benefits and may even be granted tax holidays.
Roop Sharma, president of the Cable Operators' Federation of India, welcomed the move, saying that with digitisation allegations against cable operators of not revealing their actual customer base would be proved false. Moreover, with no extra charges being levied and prices of STBs decreasing, digitisation will enable operators to add more channels and make the sector more organised, thus opening the way for institutional funding.
Digitisation will bring in better picture quality and offer a plethora of interactive services like video gaming, tutorials and teleshopping. The a la carte option, which has become available only recently with direct-to-home service providers, will now be available to all cable subscribers. The viewer will be able to choose the channels he wants to watch, and pay only for these channels.
How will this move affect existing service providers? "It is true that they will face stiff competition, especially the smaller ones. But then, it was always the cable operators who got the lion's share in broadcasting," said an analyst. "These DTH service providers will provide other exclusive benefits and channels for their respective subscribers, which will ensure their revenues from their premium features."