Stocks
Nifty, Sensex may shed some gains – Weekly closing report
We had mentioned in the last week’s closing report that Nifty, Sensex might head higher subject to dips. The major indices of the Indian stock markets were range-bound. On Friday, at the end of the week’s trading, the gains for the whole week were less than 1% for the major indices. The trends of the major indices in the course of the week’s trading are given in the table below:
 
 
Short covering, along with expectations of healthy quarterly results and stable crude oil prices, pushed the Indian equity markets marginally higher on Monday. The key indices oscillated in a narrow range following three days of sharp up-move and made marginal gains during the mid-afternoon trade session. Buying was witnessed in automobile, metals, and information technology (IT) stocks. However, gains were capped due to weak rupee and hawkish comments from the US Federal Reserve on a possible June rate hike. The US Fed Chairperson Janet Yellen last Friday hinted towards a possible June rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India. In addition, caution prevailed ahead of the upcoming release of the major macro-economic data like the fourth quarter GDP (gross domestic product), eight core industries (ECI) and the PMI (purchasing manager’s index).
 
Profit booking, coupled with caution ahead of release of key macro-economic data, depressed the Indian equity markets on Tuesday. Consequently, the key indices provisionally closed the day's trade flat -- marginally in the red. Selling pressure was witnessed in healthcare, IT (information technology) and capital goods stocks. The BSE market breadth was skewed in favour of the bears - with 1,564 declines and 1,001 advances. The key indices on Monday had closed at their highest levels since October 2015. Initially on Tuesday, the key indices opened on a higher note, in-sync with their Asian peers. The equity markets soon ceded their initial gains on the back of profit booking after five consecutive sessions of rise.
 
The Krishi Kalyan Cess of 0.5% on services imposed by Finance Minister Arun Jaitley came into force from Wednesday through which the government has proposed to collect Rs5,000 crore during the remaining 10 months of the current fiscal. The government policies have been aimed at improving the rural sector.
 
Initially on Wednesday, the key indices opened on a higher note, following the release of healthy domestic macro-economic data. Major domestic macro-economic data points like the fourth quarter GDP (gross domestic product), fiscal deficit and eight core industries (ECI) were released on Tuesday. The GDP data showed that the Indian economy expanded by 7.6% in 2015-16 to log the fastest growth among larger countries. Besides, India's core industrial output data, ECI edged up by 8.5% in April on the back of higher production of electricity, steel and refinery products.
 
Despite the positive opening on Wednesday, the key indices ceded some of their initial gains on the back of sluggish Asian markets and lower close of the US stocks on Tuesday. The US indices had closed lower on the back of disappointing consumer confidence data which stroked growth concerns in the world's largest economy. The US data also cast a doubt over the US economy's ability to withstand a speculated interest rate hike in June. In addition, lower crude oil prices, a weak rupee and profit booking dented investors' risk taking appetite. However, lower level value buying supported prices. Among the major indices, the Bank Nifty lost 1.12% over Tuesday’s close to close at 17,423.45.
 
Short covering, coupled with lower-level value buying, lifted the Indian equity markets on Thursday. The key indices traded in the positive territory during the late-afternoon session, as healthy buying was witnessed in metal, banking and capital goods stocks. The key indices on Wednesday had closed flat -- marginally in the green -- led by healthy macro-economic data. Initially on Thursday, the key indices opened on a weak note, in sync with their Asian peers and a lower close of the US stock on Wednesday. Asian stocks receded as investors were disappointed at the lack of further stimulus measures in Japan. Besides, the European stocks traded flat as caution prevailed ahead of the upcoming ECB (European Central Bank) meet, also later Thursday. In addition, a week rupee depressed the equity markets. However, a late afternoon bout of short covering supported prices. The recently released healthy domestic macro-economic data also aided the equity markets to pare some of their earlier losses. Overall, the markets were bullish on Thursday. The key Indian indices had closed at a fresh seven-month closing-high on Thursday. 
 
The Indian equity markets closed flat on Friday owing to mixed global cues. Both the key indices closed the day's trade on a flat note. Healthy buying was witnessed in banking and automobile stocks, whereas scrip of consumer durables, capital goods and healthcare came under heavy selling pressure. The BSE market breadth was skewed in favour of the bears -- with 1,522 declines and 1,097 advances.
 
Growth in India's private sector output declined in May as manufacturing and service sectors lost momentum in conditions of softer domestic demand, while services slowed sharply to a six-month low, a business survey on performance of the services sector showed on Friday. The Nikkei Services Purchasing Managers' Index for India fell from 53.7 in April to 51.0 in May. An index reading of above 50 indicates an overall increase, while below 50 an overall decrease. The PMI series of data are published by the leading global diversified provider of financial information services "Markit". 
 
The Reserve Bank of India is due to announce its second bi-monthly monetary policy review of the fiscal coming Tuesday in the backdrop of official data showing retail inflation in the country rose in April to 5.39%. 
 

User

HDFC ERGO to acquire L&T General Insurance
The Board of Directors of HDFC ERGO General Insurance Company Limited in its meeting held on 3rd June 2016, approved the purchase of 100% stake in L&T General Insurance Company Limited subject to IRDAI (Insurance Regulatory and Development Authority of India) and other regulatory approvals, according to a release from HDFC ERGO. The Board also approved the plan to merge the two companies subject to all regulatory approvals. 
 
"Considering the importance of scale in the insurance business, consolidation within the insurance industry is inevitable. This transaction marks the beginning of this consolidation phase. The acquisition will help HDFC ERGO to further strengthen its presence in the market. The combined size  and  expertise  will  result  in improved  cost  efficiencies  in  the  merged  entity  and  benefit  policy holders and other stakeholders," said Deepak Parekh, chairman  of  HDFC  Ltd  and HDFC ERGO  General Insurance.
 
For  the  all-cash deal structured  by Arpwood Capital Pvt Ltd., exclusive  financial advisors  to  HDFC ERGO, the transaction has been valued at Rs551 crore. The acquisition would help HDFC ERGO improve its market position. HDFC ERGO expects significant cost synergies arising out of business, technology optimisation and rationalisation of offices. 
 

User

Facebook seeks new rules to curtail Zuckerberg's full control if he quits
Mark Zuckerberg, who holds majority voting control of the social networking site, may not be an absolute power at Facebook if he decides to quit or his services are terminated in the future.
 
According to a regulatory filing by the Facebook board to the US Securities and Exchange Commission on Thursday, the board will ask shareholders at its annual meeting on June 20 to vote on a proposal that would convert Zuckerberg's Class B shares into Class A shares if he ceases to be at the helm, PCWorld reported.
 
Class A stock has one vote per share while Class B stock has 10 votes per share.
 
“The aim of the regulations is apparently to make it easier for the company to hire a top-quality successor to Zuckerberg who would not be shadowed by the founder or be from his family,” the report added quoting the filing. 
 
Currently, Zuckerberg holds Class A and Class B common stock that collectively represents about 53.8% of the company’s total voting power. 
 
“Under current rules, if Zuckerberg were to quit the company or his employment terminated for any reason, he would not be required to give up his majority voting control,” the report said. 
 
The measure, however, appears to be more of a precaution as the 32-year-old Facebook founder has not indicated any intention to quit.
 
The new terms will ensure that Facebook “will not remain a founder-controlled company after we cease to be a founder-led company”.
 
The new rules would “provide significant value to our company by incenting Mr. Zuckerberg to remain with our company”, the filing said.
 
In December, Zuckerberg and his wife Priscilla Chan pledged to donate 99 per cent of their Facebook shares -- about $45 billion -- to advance human potential and promote equality for children.
 
Declaring the "Chan Zuckerberg Initiative" as they welcomed their first girl child Maxima Chan Zuckerberg or "Max", the couple said they have created a new foundation that would initially focus on "personalised learning, curing disease, connecting people and building strong communities."
 
"We will give 99% of our Facebook shares during our lives to advance this mission. We know this is a small contribution compared to all the resources and talents of those already working on these issues. But we want to do what we can, working alongside many others," the couple wrote in a post.
 
Zuckerberg owns about four million of Class A shares in Facebook and approximately 419 million Class B shares.
 
Each Class B share is worth 10 votes apiece which gives Zuckerberg majority voting power and control over Facebook's strategic direction.
 
Facebook currently has over 1.6 billion monthly active users.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.  

 

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)