A retreat in oil prices and steady global markets, coupled with the end to the stand-off between the Congress and the DMK, is expected to provide some direction to the market
The local market is likely to witness a flat-to-positive opening as the political situation at the Centre has cooled with the Congress and the DMK reaching a compromise on the seat-sharing issue for the forthcoming assembly polls in Tamil Nadu. Besides, easing of crude prices and upbeat global markets is also expected to provide some support back here.
Wall Street closed higher on Tuesday booted by banking stocks and a retreat in crude prices from 29-month highs. Tracking the US markets, the Asian pack was in the green in early trade today. The gains were also supported by an increase in Japanese machinery orders in January. The SGX Nifty was up 22 points at 5,559 against its previous close of 5,537.
Resuming its upmove after a day's pause, the Indian market opened with modest gains yesterday as the political situation at the Centre showed signs of easing. However, profit booking at higher levels resulted in the market giving up some gains. Trading was range-bound, with no big trigger to guide the indices. But a fresh bout of buying in the last hour lifted the indices to the day's highs, and the indices closed near those levels.
The market made up more than half the losses suffered on Monday. The Sensex and Nifty opened with a positive gap at 18,277 and 5,466, respectively, which were the lows of the day. After the initial gains, the market was lack-lustre throughout the day. Towards the end of the day, the benchmarks hit intra-day highs of 18,467 and 5,531, respectively. The Sensex closed 217 points up at 18,440, while the Nifty ended 58 points up at 5,521.
The US markets closed higher overnight on a surge in banking stocks and a retreat in oil prices. Bank of America’s chief executive Brian Moynihan expressed optimism that the bank would be able to earn between $35 billion and $40 billion a year in pre-tax earnings when the business normalizes, increase dividends and go in for share buybacks. The development pushed stocks of Bank of America, American Express, JP Morgan Chase and Wells Fargo higher.
This apart easing of crude prices from 29-month highs also supported investor sentiments. Reports of more countries assuring to increase production to offset any supply disruptions pushed oil lower. Brent crude slipped nearly 2% at $113.06 a barrel after Kuwaiti oil minister said OPEC was in discussions to increase production.
The Dow surged 124.58 points (1.03%) to 12,214.61. The S&P 500 rose 11.69 points (0.89%) to 1,321.82 and the Nasdaq gained 20.14 points (0.73%) to 2,765.77.
Tracking their US counterparts, markets in Asia were in positive territory in early trade on Wednesday. Easing of crude prices and a rise in Japanese machinery orders also aided the gains. Speculations of a military intervention to defuse the Libyan conflict and OPEC mulling to increase production eased crude prices. Meanwhile, Japan’s core machinery orders jumped 4.2% in January, compared to a 1.7% rise in December, beating analysts’ expectations.
The Shanghai Composite gained 0.21%, the Hang Seng advanced 0.74%, the Jakarta Composite rose 0.65%, the KLSE Composite gained 0.40%, the Nikkei 225 surged 1.03%, the Seoul Composite added 0.25% and the Taiwan Weighted was 0.67% higher in early trade. On the other hand, the Straits times declined 0.16%.
Back home, the government on Tuesday slashed the minimum export price (MEP) for onion, for the second time this month, to $350 per tonne from $450 per tonne earlier.
Last month, the government had lifted ban on onion exports after farmers protested a crash in domestic prices. It, however, capped the MEP at a higher level of $600 per tonne as a precautionary measure to control local prices, which had shot up to Rs70-Rs80 per kg in December last year.
The BSE board director believes that leaving women, children out of the financial area is something a family cannot afford today. Besides, she argues, men are known to be bad planners, and emphasises that women must learn more about investments
"Women definitely make better investors, because investing, by default, is a game of common sense and patience and women possess this in spades," Ms Deena Mehta, the lone woman member on the board of directors of the Bombay Stock Exchange, said today. Speaking at a workshop hosted by Moneylife Foundation on the occasion of International Women's Day, Ms Mehta said that keeping women and children out of the financial arena is something a family cannot afford today.
Chandita Mukherjee speaking about her organization Comet Media
Ms Mehta dwelt a lot on what families ought to do about their finances. "Simply sticking to fixed deposits will not help, because inflation will eat away at your money. Understanding the market is necessary, and not difficult. If you can take the pains to learn, you will not only make money, you will also contribute to family fortunes," she said.
Almost all families are financially sick, because they don't pay attention to their money, she said. "Women must educate themselves about investing and the market, because if you miss the market, you are missing a lot, and losing a lot of money in the process."
Nikita Ketkar speaking about ‘Masoom’ her organization working for night school children
Several international studies have shown that women are wiser in investing and they manage finances better, whether it is at home or at the workplace. India's top banks have prominent women administrators and heads-names like Naina Lal Kidwai, Chanda Kochhar, Ranjana Kumar, Kalpana Morparia. Still, finance, and in general economics, is viewed as a predominantly masculine field. Ms Mehta pointed out how, historically, stock markets had been an exclusive arena, with no entry for women. Hence, till date, very few women have entered the markets. Mass participation in the markets is only a recent phenomenon.
Busting the 'men-only' myth on finances, Ms Mehta said, "Most men have zero understanding of financial management, and bad planners. That doesn't only apply to the husbands, but the fund managers as well. So question the man of the house as well, because there is a very good chance that he is not doing his work properly, or is clueless about what should be done."
Preeti Telang speaking about 'Swadhaar- FinAccess' and its activities
On the occasion of International Women's Day today, Moneylife Foundation felicitated three women achievers: Ms Preeti Telang, general manager, Swadhaar FinAccess, which helps urban poor women save money and advocates financial literacy among them; Ms Chandita Mukherjee, award-winning short documentary film maker and founder of Comet Media, which develops media to foster education and a scientific spirit; and Ms Nikita Ketkar, founder of Masoom, which supports night schools.
Last year, on this occasion, Moneylife Foundation had felicitated Ms Indrani Malkani, who started the Model School Bus Service and is also involved in some other social projects; Ms Sumaira Abdulali , noted environmentalist and founder of Awaaz Foundation; and Ms Anandini Thakur, noted civic rights activist from Bandra and chairman of H/West Ward Citizens' Forum.
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The Hero Group also said it will raise fund from private equity firms, including Bain Capital and Lathe Investment, estimated to be around Rs4,500 crore to finance its buyout by selling stake in Hero Investments Private Limited
New Delhi: The BM Munjal-led Hero Group today said it will pay Rs3,841.83 crore for Honda's 26% stake in their joint venture Hero Honda, reports PTI.
The group also said it will raise fund from private equity firms, including Bain Capital and Lathe Investment, estimated to be around Rs4,500 crore to finance its buyout by selling stake in Hero Investments Private Limited (HIPL).
"HIPL, an investment company of the Hero Group stated that it is acquiring Honda's entire 26% stake in HHML at Rs739.97 per share," the group said in a statement.
Honda currently holds 51,91,8750 shares in Hero Honda and at the said share prices, the total value of the buyout amounts to Rs3,841.83 crore.
The Hero Honda scrip closed the day at Rs1,518.15 per share on the Bombay Stock Exchange (BSE), down 0.77% from the previous close.
The Hero group further said it has also signed definitive agreements with PE firms BC India Private Investors II, an affiliate of Bain Capital LLC, and Lathe Investment Private Limited, a wholly-owned subsidiary of the Government of Singapore Investment Corporation (Ventures) Pvt Ltd.
HIPL will sell stakes to the PE firms to raise funds for acquiring Honda's stake in Hero Honda, it added.
While the group did not disclose the amount to be raised from the PE firms, HIPL had sought government approval to bring in foreign investment of Rs4,500 crore.
HIPL is one of the main shareholders of the country's largest two-wheeler maker Hero Honda. It holds 17.33% stake in the company as on 31 December 2010. The Foreign Investment Promotion Board (FIPB) had recommended the proposal to the Cabinet Committee for Economic Affairs (CCEA) for approval as it involves foreign investment exceeding Rs1,200 crore.
"Further details will be shared after receiving the necessary approval from CCEA. The funds received as investment made in the holding company by the PE firms will be used to retire a significant portion of the debt that has been raised by HIPL recently for financing the acquisition," the Hero group said.
According to a sector analyst, the share price for the buyout is in line with indications given before and for the PE firms this is a long term investment.
"The Hero Group has long term plans both in the domestic and international markets but will have to face stiff competition from Honda which is becoming aggressive itself in the economy segment and Bajaj is already a tough competitor," the analyst said.
Last year the Hero Group and Honda agreed to part ways from their joint venture after 26 successful years.
There have been discords brewing up between the partners ever since the Japanese firm decided to enter the Indian two-wheeler market through its wholly-owned subsidiary Honda Motorcycle & Scooter India (HMSI).
Moreover, the Hero Group was also unhappy with restrictions over exports as Hero Honda was not allowed to explore overseas markets.
Hero Honda manufactures motorcycles such as Splendor, Passion, Karizma ZMR, Hunk, CBZ Xtreme and scooter Pleasure.