Market range-bound: Wednesday Closing Report

Nifty expected to move between 5,160 and 5,310

The market wiped all the gains in late trade on news that the oil minister is likely to convene an inter-ministerial meeting for hiking retail fuel prices later this month. After trading in the green for the major part of the day, the Nifty ended marginally higher. Yesterday, we mentioned that the Nifty may go down to the level of 5,160 if it doesn’t hold itself above the day’s low. Today the intraday low of 5,205 breached its previous low of 5,238. The index is likely to remain range-bound and may move between 5,160 and 5,310. The NSE (National Stock Exchange) saw a volume of 59.88 crore shares.

The Greek prime minister’s call for a referendum on the bailout package sent markets lower. The development also weighed on domestic investor sentiments, resulting in the market opening lower. Reports of oil marketing companies making a case for a hike in petrol prices also added to the woes. The Nifty opened with a cut of 41 points at 5,217 and the Sensex started the day at 17,348, down 133 points from its previous close.

The indices fell to the day’s lows in initial trade with the Nifty slipping to 5,205 and the Sensex to 17,338. However, buying in select stocks helped the market bounce back from the early lows to emerge into the green in the mid-morning session.

Extending its gains in subsequent trade, the market touched its intraday high at around 12.30pm with the Nifty going up to 5,300 and the Sensex climbing to 17,616. The indices pared all the gains and drifted into the negative in the post-noon session on news that the oil minister is building consensus for a fuel price hike. The market ended flat with the Nifty closing up 0.50 points at 5,258 and the Sensex edging 16 points lower at 17,465.

The advance-decline ratio on the NSE was almost equal at 888:868.

The broader indices also ended on a flat note with the BSE Mid-cap index up 0.02% and the BSE Small-cap index shedding 0.06%.

The BSE Oil & Gas index (up 0.76%), BSE Healthcare (up 0.44%) and BSE Fast Moving Consumer Goods (up 0.24%) were the sectoral gainers while BSE Auto (down 0.44%), BSE Bankex (down 0.35%), BSE PSU, BSE TECk (down 0.33% each) and BSE Capital Goods (down 0.30%) were the top losers.

Reliance Industries (up 1.27%), Tata Power (up 0.99%), Jindal Steel (up 0.75%), Jaiprakash Associates (up 0.66%) and Mahindra & Mahindra (up 0.56%) were the major gainers on the Sensex. The losers were led by Hero MotoCorp (down 2.84%), Bharti Airtel (down 2.63%), NTPC (down 1.24%), BHEL (down 1.10%) and Coal India (down 1.06%).

The top performers on the Nifty were Reliance Communications (up 4.97%), Reliance Power (up 3.10%), Reliance Infrastructure (up 2.16%), HCL Technologies (up 1.90%) and Dr Reddy’s (up 1.68%). Punjab National Bank (down 3.37%), Bharti Airtel (down 2.72%), Hero MotoCorp (down 2.45%), ICICI Bank (down 1.39%) and Tata Steel (down 1.27%) topped the Nifty losers’ list.

Markets in Asia closed mixed as Greece decided to go in for a referendum on the new bailout package. Investors were also awaiting the outcome of the two-day Federal Open Market Committee meeting later today for any new measures to boost the US economy.

The Shanghai Composite gained 1.38%; the Hang Seng advanced 1.88%; the Jakarta Composite climbed 2.12% and the Straits Times rose 1.63%. On the other hand, the KLSE Composite lost 0.32%; the Nikkei 225 tanked 2.21%; the Seoul Composite declined 0.61% and the Taiwan Weighted shed 0.31%.

Back home, foreign institutional investors were net sellers of stock to the tune of Rs20.66 crore. Similarly, domestic institutional investors were also net sellers as they offloaded equities worth Rs573.41 crore.

Arvind has divested its 40% stake in VF Arvind Brands Pvt Ltd (VFABPL) to VF Mauritius for Rs257 crore. VFABPL, which is engaged in marketing products under the brands Lee and Wrangler, was formed in September 2006 with 60:40 shareholding between VF Mauritius and Arvind. The India major had invested Rs5.47 crore in the capital of the joint venture. Arvind declined 0.42% to close at Rs106.50 on the NSE.

GAIL (India) has earmarked $400 million for its new Singapore trading office to secure LNG and petrochemical product cargoes for delivery to India in 2012. The company sees a huge potential for LNG in view of constrained supplies. The stock declined 1.21% to settle at Rs418 on the NSE.

Kavveri Telecom Products, a leading wireless sub-system manufacturer has completed acquisition of Rymsa Telecom Business of Radiaction y Microondas, SA. The company’s investment in Rymsa Telecom will be over Euro 20 million. The topline in the first year of operation will be Euro 15 million. The scrip gained 1.17% to end at Rs142.90 on the NSE.




5 years ago

very informative

India improves score in global bribery index, still ranked low

In a list of 28 countries, India has been ranked 19th, while China and Russia were fared the worst, at 27th and 28th positions, respectively. This was the maximum improvement for any country, but India “still remains near the bottom of the table,” Transparency International said

In a list of 28 countries, India has been ranked 19th, while China and Russia were fared the worst, at 27th and 28th positions, respectively. This was the maximum improvement for any country, but India “still remains near the bottom of the table,” Transparency International said

Berlin: When it comes to companies bribing public officials when doing business overseas, India’s score has improved the most in a global index, reports PTI quoting rights group Transparency International.

Nevertheless, India continues to be ranked near the bottom of the global Bribe Payers Index, as there was a high likelihood of Indian companies paying bribes abroad.

In a list of 28 countries, India has been ranked 19th, while China and Russia were fared the worst, at 27th and 28th positions, respectively.

The index was based on a survey of 3,000 business executives from developed and developing countries, the anti-corruption group said in a report.

The countries were evaluated on a scale of 0-10 points, with the maximum 10 points corresponding to the view that companies from that country never indulged in bribery abroad and a zero score being equivalent to these companies having always paid bribes.

India’s score improved to 7.5 points, up by 0.7 points since the last survey in 2008.

This was the maximum improvement for any country, but India “still remains near the bottom of the table,” Transparency International said.

It added that the leaders of G-20 nations, during their meeting at Cannes, were expected to recognise the steps taken by countries like India to tackle foreign bribery.

India’s score was below the global average of 7.8 points.

In this year’s list, the Netherlands and Switzerland have been ranked together on top with 8.8 points each—indicating that companies from these countries were the least likely to pay a bribe while doing business abroad.

On the other hand, Russia was ranked the worst, with a score of 6.1 points, while China was a notch higher at 27th position, with 6.5 points.

“Bribing public officials when doing business abroad is a regular occurrence,” Transparency International said.

“Companies from Russia and China, who invested $120 billion overseas in 2010, are seen as most likely to pay bribes abroad. Companies from the Netherlands and Switzerland are seen as least likely to bribe,” it added.

Those ranked below India include Turkey, Saudi Arabia, Argentina, the UAE, Indonesia and Mexico.

On the top of the list, the Netherlands and Switzerland were followed by Belgium, Germany, Japan, Australia, Canada, Singapore, the UK and the US.

Canada and the United Kingdom saw the most significant deterioration in their scores and their country rankings fell by five and three places, respectively.

Canada and Belgium were together ranked at the top of the previous list in 2008.

The 2008 survey comprised 22 countries and ranked India at 19th place with a score 6.8 points.

Transparency International said that addressing foreign bribery was a priority issue for the international community and urged the leaders of G-20 nations to tackle the issue as a matter of urgency.

The Group of 20 leading economies (G-20) last year had committed to tackling foreign bribery by launching an anti-corruption action plan.

“The progress report of the working group monitoring the action plan, which G-20 leaders are expected to approve at tomorrow’s Cannes summit, will recognise steps taken by G-20 countries China, Russia, Indonesia and India in criminalising foreign bribery,” it said.

Transparency International said that the G-20 governments must tackle foreign bribery as a matter of urgency.

“New legislation in G-20 countries is an opportunity to provide a fairer, more open global economy that creates the conditions for sustainable recovery and the stability of future growth.

“Governments can press home the advances made by putting resources behind investigations and prosecutions of foreign bribery, so that there is a very real deterrent to unethical and illegal behaviour,” said Transparency International chair, Huguette Labelle.

The survey found that there was a widespread practice of companies paying bribes to public officials in order to win public tenders, avoid regulation, speed up government processes or influence policy.

At the same time, the companies were found to be almost as likely to pay bribes to other business entities too.

“This suggests that corruption is not only a concern for the public sector, but for the business sector as well, carrying major reputational and financial risks for the companies involved,” Ms Labelle said.

“It is clear that bribery remains a routine business practice for too many companies and runs throughout their business dealings, not just those with public officials.

“And companies that fail to prevent bribery in their supply chains run the risk of being prosecuted for the actions of employees and business partners,” Ms Labelle added.

The survey also ranked 19 specific sectors on the likelihood of their firms to engage in bribery and exert undue influence on governments.

The public works and construction companies scored the lowest, emerging as a sector where bypassed regulations and poor delivery can have disastrous effects on public safety, the rights group said.

The oil and gas sector also emerged as a major sector prone to bribery, it said, adding that companies operating in oil-rich Nigeria have already been fined upwards of $3.2 billion in 2010-2011 for bribery of public officials.

Noting that there has been not much improvement since the last ranking in 2008, Transparency International said that the average global score stands at 7.9 in the latest index, as against 7.8 three years ago.

“An important first step in the fight against foreign bribery is for a government to have an effective anti- corruption system in place at home.

“Governments must set an example to companies by prohibiting corruption within the public sector and upholding high standards of integrity with no impunity,” it added.

It further said that the governments needed to step up their anti-bribery efforts, by ratifying key global conventions, providing appropriate resources to probe bribery- related offences, and by "mustering sufficient political will to prosecute corporate bribery.”


Illegal mining in Goa: Sesa Goa’s business likely to be impacted

Analysts say that the Shah Commission report, to be released later this week, could have significant impact on Sesa Goa

The Shah Commission, probing illegal mining in Goa, is expected to release its report later this week. Considering the mining ban in Karnataka, experts are cautious about the significance of the findings of the report that might impact Sesa Goa, the largest and only listed iron ore firm from the state. PINC Research has said in a report, “Even though Sesa Goa has indicated little involvement in the alleged illegal mining, any move of blanket ban on mining/exports from Goa would impact the company adversely, as Goa currently accounts for approximately100% (barring a little sale in Karnataka through e-auctions) of Sesa Goa’s iron-ore operations.”

Sesa Goa is the largest exporter of iron ore from Goa, with around 34% of market share. Goa accounts for 22% of iron ore with output of 50mntpa (million tonnes per annum), almost all of which is exported for its low grade and lack of sufficient beneficiation and pelletisation capacity.

A research analyst from a Mumbai-based brokerage firm, preferring anonymity, told Moneylife, “Sesa Goa’s operations in Orissa, where it was operating as a third party, were shut due to non-renewal of contracts. In Karnataka, where the company had environmental clearance of 6MT (million tonnes), the operations are shut due to complete export ban and the Supreme Court order. Sesa is selling from its inventory through e-auction.”

He added, “Sesa Goa mines around 15MT-16MT of iron ore annually from Goa, including that of Dempo which it acquired two years back. If the report (of the Shah Committee) suggests export ban or even an interim ban, there would be significant impact on Sesa Goa’s business operations as its entire iron ore is exported.”

For Q2FY12, Sesa Goa’s consolidated net sales declined by 14%, on a year-on-year (y-o-y) basis, to Rs7.90 billion mainly due to lower iron sales volume at 1.55MT (down 14.8% y-o-y) on account of the ban on iron ore mining in Karnataka and closure of third-party mines in Orissa and lower pig iron sales volume at 64,611 tonnes (down 23.1% y-o-y).

The Public Accounts Committee (PAC) report on illegal mining in Goa, had found the mining scam to be around Rs4,000 crore. Considering MB Shah's comments in the media, the PAC report, and the Supreme Court ruling in Karnataka, the PINC Research report says, “If developments in Karnataka are anything to go by, in case of an unfavourable report, the Supreme Court could recommend blanket ban on iron ore mining/ exports from Goa. Exports have been cited as the main reason for illegal mining in Goa.”

It further adds, “Even if the recommendation is only for ban on exports, this could bring Goan iron ore mining to a halt, as the entire output is exported and there is a lack of domestic demand for the low grade ore. Hence, unlike Karnataka, the impact of a ban/reduction of Goa iron ore on the domestic steel industry is not expected to be high.”


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