Global cues indicate a soft opening for Indian stocks: Friday Market Preview

The domestic earnings season officially kicks off with Infosys announcing its Q4 numbers today

The Indian market is likely to open soft on the back of tepid cues from the global arena. US stocks, which opened in the red on weak economic data, ended with marginal gains while markets in Asia witnessed small gains in early trade as investors on Chinese inflation data and on fears that the last month’s earthquake and tsunami that devastated Japan would impact quarterly earnings. The SGX Nifty was down 41 points at 5,903 from its previous close of 5,944.

On the domestic front, IT bellwether Infosys Technologies is set to declare its quarterly numbers and announce its guidance for the fiscal 2011-12 today. Analysts are betting on a 3%-4% q-o-q revenue growth for the company. Besides, the government will release the wholesale price index (WPI) based inflation figures for March. Headline inflation for February stood at 8.31%, above the government’s comfort levels. The numbers will hold the key for the Reserve Bank of India to tinker with interest rates, going ahead.

On Wednesday the local market closed higher, erasing the losses accrued in the previous trading sessions. The Sensex surged 434 points to close at 19,697 and the Nifty gained 126 points to settle at 5,911,

The US markets, which opened lower on negative economic cues, closed with marginal gains overnight. Initial claims for unemployment benefits rose 27,000 to a seasonally adjusted 412,000, more than analysts’ estimates for a 380,000 fall. The previous week’s figure was revised up to 385,000 from the previously reported 382,000. The Labor Department said on Thursday its seasonally adjusted index for crore producer prices paid at the farm and factory gate—excluding volatile food and energy costs—rose 0.3% in March after gaining 0.2% in February. Economists had expected core PPI to rise 0.2% in March.

In the corporate arena, Google gained 0.4% ahead of its first quarter results. However, the stock slipped over 4% as its earnings fell short of expectations. Supervalu Inc soared 17% after it projected full-year profit that beat projections. Halliburton Co and Anadarko Petroleum Corp added more than 1.3% as oil rose on reports that Saudi Arabia reduced output this month. JP Morgan Chase & Co and Wells Fargo & Co fell at least 1.7% as Goldman Sachs Group cut its recommendation on financial shares.

The Dow gained 14.16 points (0.12%) to end at 12,285.15. The S&P 500 added 0.11 of a point (0.01%) to 1,314.52 while the Nasdaq shed 1.30 points (0.05%) to 2,760.22.

Markets in Asia witnessed small gains in early trade on Friday on China’s inflation numbers for March. The data, which was released a while ago, came in at 5.4% in March, a 32-month high and up from 4.9% in February.

The country’s annual gross domestic product growth witnessed a marginal decline in the first quarter of 2011 to 9.7% from 9.8% in the previous quarter. Besides, weak economic data emanating from the US and renewed debt concerns in Europe weighed on investors.

The Shanghai Composite was 0.07% higher, the Hang Seng surged 0.77, the Jakarta Composite gained 0.39%, the KLSE Composite rose 0.01%, the Straits Times added 0.09% and the Taiwan Weighted was0.06% higher. On the other hand, the Nikkei 225 slid 0.43% and the Seoul Composite shed 0.12%.

Back home, the Supreme Court, on Friday, will hear a plea by Vodafone challenging the Income Tax (I-T) department initiating penalty proceedings in the $2 billion tax case relating to the company's stake purchase in Hutchison-Essar.

Vodafone’s application would be mentioned before a three-judge Bench headed by the Chief Justice SH Kapadia. Earlier, the I-T department had issued notice to Vodafone in March saying penal action would be initiated against the British telecom major in the tax case.


Focus shifts to urban fringes as stress mounts on existing structures in Maharashtra

Representatives undertaking development projects and civic officials debate maximising output of land, securing quality of life

As demographic stress on existing urban areas increases, civic authorities in Maharashtra must look towards integrating fringe localities. This was the consensus among speakers on the first day of the conference on 'Use of Land Resources in Economic Development of Maharashtra', held in Mumbai, today.

Representatives from organisations undertaking development projects as well as municipal corporations, who participated in the programme, agreed that land development must focus on maximising economic output and securing quality life for citizens.

Mahesh Zagade, municipal commissioner of Pune, said attention should be paid to development of new urban centres and satellite towns, which will enable people to access commercial benefits without overburdening important commercial hubs. "Pune serves like a relief centre for Mumbai. Many people, entrepreneurs who cannot settle in Mumbai due to shortage of land, come to Pune. We are in talks with the panchayats of villages located on the fringe of the city, as we want to integrate them in our development plans," Mr Zagade said.

The Pune civic boss said that in order to make the most of available land and improving the quality of living, it was imperative to mix land use. "A city is not only a residential or commercial hub, it must have open spaces.
Authorities should focus on undertaking aesthetic, environmental and even small-scale agricultural projects, like we see in Western countries."

Ms Sonia Sharma, who represented Ernst & Young, a knowledge partner with Maharashtra Industrial Development Corporation, said, "People must know where land is available, and so government must tell entrepreneurs about new possible locations. MIDC is going to allot 30% of its plots to micro-, small- and medium-scale enterprises, and it believes that new upcoming areas must grow around these."

She gave the example of Nanded and Aurangabad, which boast of good infrastructure. Ms Sharma said the focus should be on developing commercial corridors, rather than isolated clusters. "Government must plan land use and share their plans with industrialists, so together they can come up with strategies that will ensure maximum output from a given piece of land."

SM Sabnis, chief engineer in the state public works department, said ribbon strips along the highways could be developed into important commercial zones. "Accessibility is the prime factor for commerce and the land in the vicinity of the highways can be utilised for greater economic benefits," Mr Sabnis said. The total road length in Maharashtra is 2.1 lakh km, perhaps the highest in any Indian state. "This is a tremendous resource that can be utilised," he said.

SS Hussain, who is associated with MIHAN (Multi-nodal International Hub Airport) in Nagpur, gave a brief profile of the ongoing work for the hub. He said one should consider growing centres with locational advantages for new projects, instead of overburdening existing structures.



Anoop Jha

5 years ago

Urban Fringe Growth dynamics - Role of Cities as Facilitator

Cities have to increasingly play a role of facilitator when it comes to development and growth of urban rural fringe ...

Anoop Jha

Citibank, Deutsche Bank advised Etisalat to invest in Swan

Swan was considered after studying different options in India. "The whole thing was given to us as government-approved and there was no suspicion or question raised," Etisalat senior vice-president, corporate communications, Ahmed bin Ali said

New Delhi: UAE-based Etisalat, which picked up equity in controversial Swan Telecom (now Etisalat DB), has said that two leading global banks-Citibank and Deutsche Bank-had advised the firm on investment decision, reports PTI.

"We were referred by reputed international investment banks to invest in Swan Telecom when we were exploring investment opportunity in India," Etisalat senior vice-president, corporate communications, Ahmed bin Ali told PTI.

"There were several options given to us. The banks that had been recommending us for this were Citibank and Deutsche Bank," Mr Ali said.

Swan was considered after studying different options in India. "The whole thing was given to us as government-approved and there was no suspicion or question raised," mentioned Mr Ali during interaction.

He, however, asserted that Etisalat remained committed to the Indian market and plans to raise stake in Etisalat DB.

Mr Ali said Etisalat was not involved with Swan Telecom at the time of licence procurement and this fact should be taken into consideration by the Indian authorities.

"The day we entered into discussion shows that there is big gap between the date we started negotiating with Swan and the date of licence completion process. The authorities must reconsider this," Mr Ali said.

Asked about his view on security concerns being raised about the company by the Indian government, he pointed out that being UAE-based, the organisation has expanded business in countries that share good relation with the country.

"This was one of the reasons that we invested in India.

The UAE government has 50% stake in Etisalat and we are very concerned about country's and company's image," he said.

Talking about Etisalat's relationship with Chinese companies, he said that Etisalat is sourcing equipment from same Chinese companies that supply equipment to other Indian telecom companies as well.

"There has never been any issue with supplies made by Chinese companies to Indian telecom companies. Therefore this should not be a reason for security concern," he said.

About Etisalat's operation in India, he said being an MNC Etisalat is present in 18 countries like any other MNC and hence downplayed the reason being given by security agencies.

"There are many MNCs which operate in various countries.

You can see this in your region as well," Mr Ali added.


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