FIIs turn bullish on Indian securities; invest Rs950 crore in Oct

“In the month of October, the Indian market has seen an upward movement, so FIIs (foreign institutional investors) invested in the market. In the last two months, overseas investors were pouring money in the gold,” BNP Paribas Alex Mathew said

Mumbai: After massively pulling out in the last two months, foreign funds have turned bullish and infused a hefty Rs950 crore in just a fortnight in Indian markets, reports PTI.

During 3rd to 14th October, overseas investors have purchased equity and debt securities worth a gross amount of Rs36,590 crore and sold securities valued Rs35,640.50 crore. This translated into a net inflow of Rs950 crore, according to data available with the Securities and Exchange Board of India (SEBI).

“In the month of October, the Indian market has seen an upward movement, so FIIs (foreign institutional investors) invested in the market. In the last two months, overseas investors were pouring money in the gold,” BNP Paribas Alex Mathew said.

He further said, “Over the coming months, FIIs will continue to infuse capital in the BRIC countries.”

Meanwhile, the 30-share Sensex grew by nearly 4% or 629 points so far in October. In the last trading session, the key index on BSE finished at 17,082.69, up 199 points from its previous close.

In August and September, FIIs have witnessed an outflow. In August, foreign funds pulled out nearly Rs8,000 crore, or $1.8 billion, from the Indian stock and debt markets—the highest monthly withdrawal since October 2008. Last month, they withdrew Rs1,866 crore.

Market analysts believe heavy selling by FIIs was triggered by ongoing debt crisis in the Eurozone and weakness in the US economy.

In October, FIIs are bullish on the debt market and poured in Rs1,707 crore, while they pulled out Rs757 crore from the equity market in the same period.

So far this year, FIIs have pumped in Rs18,614.20 crore into stock and bond markets, compared to about Rs1,79,674 crore in the whole of 2010.

The number of FIIs registered with SEBI stood at 1,751 as of October this year.

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CMIE pegs down GDP growth to 7.9%

“The decline in forecast is entirely because of scaling down for the industrial sector,” CMIE said in its monthly review, adding that expected 7.9% growth would be lower than the 8.5% growth recorded in FY10-11

Mumbai: The Centre for Monitoring Indian Economy (CMIE) has revised the economic growth forecast for the current year downwards to 7.9% from the earlier 8%; which is above the majority view of 7.5%, reports PTI.

“The decline in forecast is entirely because of scaling down for the industrial sector,” CMIE said in its monthly review, adding that expected 7.9% growth would be lower than the 8.5% growth recorded in FY10-11.

The decline would be attributed to a sharp fall in the growth in agriculture-from a rather high 6.6% to 2.9%—and the fall in the growth in industry from 7.9% to 7.5%, the report said.

The Mumbai-based think tank said the industrial sector is expected to slow to 7.5%, lower than earlier forecast of 7.8%. Similarly, the manufacturing sector will grow by 7.5% as against earlier estimate of 8%, and growth forecast for mining sector has been revised from 4.8% to 4.4%.

The decline in the growth expectation of manufacturing sector emanates from sharper-than-expected decline in growth in IIP (Index of Industrial Production) in July and an expectation that the August IIP would also be weak, it said.

“We do expect a recovery in the second half of the year.

However, the slower than expected growth in the first five months warranted the revision in forecast,” the report said.

The agency expected a 2.9% increase in the agricultural sector. The rainfall till September was good and the precipitation was 2% above the long period average.

Kharif sowing was 3.1% higher than previous season.

Of the earlier indicators of the services sector, the movement of freight on the Indian Railways during the first five months was higher by 6.1%, compared to 2.3% in the corresponding period a year ago. Cargo on the major ports was up by 4.5% against 0.6%.

“We expect the service sector to grow by 9.4% in FY11-12. This is the same level of growth as in FY10-11. While we expect the growth in trade, transport, hotels, storage and communication to accelerate, we expect the financial sector to see a fall in the growth rate,” report said.

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Reliance Industries net profit up 15.8% to Rs5,703 crore

RIL chairman & managing director Mukesh D Ambani said: “The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%

New Delhi: Reliance Industries (RIL) on Saturday reported nearly 16% rise in net profit for the second quarter this fiscal as higher earnings from oil refining and petrochemicals business helped it offset a dip in natural gas production, reports PTI.

The net profit was up 15.8% at Rs5,703 crore during July-September—RIL’s highest quarterly profit since 2007, the company said in a press statement.

RIL said its showpiece Krishna Godavari basin D6 gas fields have seen a sharp drop in production “mainly due to reservoir complexity”.

KG-D6 fields output dropped 20% to 147.2 billion cubic feet or an average of just over 45 million metric standard cubic meters per day (mmscmd) during the quarter.

The drop led to revenue from oil and gas exploration business fall 17.2% to Rs3,563 crore and pre-tax segment profit by 10.2% to Rs1,531 crore.

But this was more than made up by good performance by its twin adjacent refineries at Jamnagar in Gujarat with a combined capacity of 1.24 million barrels a day.

RIL said it earned $10.1 on turning every barrel of crude oil into fuel in the quarter as compared to $7.9 per barrel gross refining margin (GRM) a year ago. Higher GRM helped the firm earn 40.3% higher pre-tax profit of Rs3,075 crore.

The company’s refining margins were better than Singapore average of $6.18 per barrel.

Higher volumes and prices helped the firm’s petrochemical business post a 10.2% rise in pre-tax profit to Rs2,422 crore.

Even though the company had received at least two instalments, of the $7.2 billion it is getting from UK’s BP Plc for selling 30% interest in 23 oil and gas blocks including the prime KG-D6, its debt has risen.

RIL had an outstanding debt of Rs71,399 crore on 30th September compared to Rs67,397 crore as on 31 March 2011.

It was expected that the company would use proceeds from BP to pre-pay its debt and reduce its interest outgo.

It had cash of Rs61,490 crore ($12.6 billion), up from Rs45,775 crore as on 30 June 2011.

RIL chairman & managing director Mukesh D Ambani said: “The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%.

“RIL has strong balance sheet and sustained earning base to pursue growth opportunities.”

The GRM in Q2 was however lower than $10.3 per barrel margin RIL earned in April-June quarter of current fiscal.

Turnover was up 34.7% to Rs80,790 crore.

Increase in volumes accounted for 3.5% growth in revenue and higher prices accounted for 32.5% growth in revenue. Exports were higher by 52.2% at Rs101,872 crore as against Rs66,936 crore in first half (H1) FY10-11.

RIL said interest cost was higher at Rs1,205 crore in first half of current fiscal as against Rs1,083 crore a year ago principally due to higher foreign exchange difference.

“This resulted in gross interest cost being higher at Rs 1,481 crore as against Rs 1,311 crore,” the statement said.

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