Markets in the US continued their rally brushing aside the Chinese rate hike and mixed corporate earning reports
The local market is likely to witness a subdued opening, tracking its Asian peers, which were trading mostly lower following a rate hike by the Chinese central bank, post market close yesterday. On the other hand, Wall Street continued its rally with the Dow closing at the highest level since June 2008. The SGX Nifty was down 20 points at 5,300 compared to its previous close of 5,320.
As suggested on Friday, a new downturn has started. Yesterday, the Sensex and Nifty opened higher at 18,142 and 5,432 respectively. This was the day's high and soon the market slipped below yesterday's closing. Thereafter it fell below yesterday's low and also below Friday's low. After 2.30PM, the market began to weaken suddenly and the Sensex and Nifty hit a new low point since July 2010-hitting 17,742 and 5,303 respectively during the day. The Sensex declined 261 points to 17,776 and the Nifty fell 83 points at 5,313.
Markets in the US continued their rally brushing aside the Chinese rate hike and mixed corporate earning reports. While McDonald’s Corporation gained 2.6% after sales beat analysts’ expectations, Teva Pharmaceutical Industries declined 5.4% and Avon Products Incorporated fell 3% on lower earnings reports. Mergers also made news as Kindred Healthcare announced the acquisition of RehabCare Group Incorporated to create a post-acute healthcare services company.
The Dow surged 71.52 points (0.59%) at 12,233.15. It was the seventh straight increase and the longest win streak since one that ended in July 2010.The S&P 500 added 5.52 points (0.42%) at 1,324.57, the highest close since 19 June 2008. The Nasdaq rose 13.06 points (0.47%) at 2,797.05. This was the index’s highest close since 6 November 2007.
Most markets in Asia were lower in early trade following the rate hike announced by the Chinese central bank on Tuesday. Material related stocks were under pressure on indications that rising material prices would impact their bottomlines, going ahead.
China raised interest rates for the third time since mid-October. The benchmark one-year lending rate has been increased to 6.06% from 5.81%, effective Wednesday. The one-year deposit rate will rise to 3% from 2.75%.
The Jakarta Composite was down 0.74%, the KLSE Composite fell 0.14%, the Straits Times declined 0.76%, the Seoul Composite lost 0.44% and the Taiwan Weighted shed 0.10%. On the other hand, the Shanghai Composite was up 0.01% and the Nikkei 225 rose 0.22%.
Back home, terming concerns expressed by some quarters over governance-deficit, tight liquidity and inflation in the country as “alarmist and highly-exaggerated”, managing director of HDFC Bank, Aditya Puri said that India is well-poised to achieve 8%-9% economic growth per annum over the next few years.
“Some say there is a governance-deficit in India—I think it is too strong a word. There have been some lapses but on the whole, things have been good. To paint the whole nation as suffering from a governance-deficit, is, in my opinion, too harsh,” Mr Puri, said on Tuesday.
The timeshare holiday company has disappointed customers and shareholders for 25 years with promises it never kept. Yet, it is now trying to woo holidayers all over again with the same old promises
They promised people dream holiday experiences and disappeared promptly after cheating many interested customers. Now, Sterling Holidays is back one more time, and playing the same card again. Will we see it repeat its previous performance?
Chennai-based Sterling Holiday Resorts (India) Ltd (SHRIL), which claims to be India's leading timeshare vacation provider, is back after a long hiatus. Suddenly, advertisements promising a holiday at plush locales and a unique experience at Sterling resorts are everywhere. It seems, that for just Rs1,999 a day, one can stay at any of its 14 resorts at 12 locations. The company is inviting people to grab this offer before 31st March.
But this is the very same company that went down some years ago, after incurring huge losses. In 2007, it declared that the board underwent changes. However, to the best of our knowledge there has been no major change in the management. R Subramanian, then chairman and managing director, is still in this position. The company management was unavailable for comment.
Sterling Holiday Resorts introduced the concept of timeshare long before Anand Mahindra started to use it with Club Mahindra Holidays. About a decade after Sterling launched its operations in 1986, timeshare sales plummeted. After some time, sales revived a bit, but the business kept slipping. The company made huge losses and as a result it had to suspend payment to creditors, retrenched staff and adopted other cost-cutting measures.
In 2003, Sterling suffered another reverse. The company had initiated a deal with Days Inn for a take over. But the move to buy out the promoters failed as Days Inn did not seal the deal within the stipulated time.
As business continued to slip, the company accumulated a loss of Rs135 crore, causing much worry for shareholders. In 2006, Sterling admitted that it was in debt to the tune of Rs211 crore and it also declared a three-year cleanup plan. This included restructuring debts and raising $15 million through the issue of foreign currency convertible bonds. In 2006-07, its plan to earn about Rs100 crore through the sale of timeshares also fell through.
In the beginning of 2007, the company decided to sell Rs50 crore worth of surplus assets to pay some of the debts. It also said that it would require another three years to clear its balance sheet.
The task was made doubly difficult by the poor reputation it had earned for the quality of service provided at its resorts. Even during its heydays, Sterling Holiday Resorts got negative reviews for service. Public forums like mouthshut.com and consumercomplaints.in contain numerous accounts about poor service to customers and a lack of maintenance at the resorts. In 2009, a customer wrote (on mouthshut.com) about dirty rooms at the Ooty resort. "It is better to go to some cheap hotel," the complainant wrote.
Several timeshare owners complained that even after making their payments they were unable to avail of holidays at the desired locations. On a group discussion forum (http://www.manaskriti.com/InteractInn/10029903.html), customers also complained about being charged for unexplained items. At consumercomplaints.in, one customer wrote in September last year that he had sold his Goa timeshare but had not received the payment for it. Another customer said that he could not avail of a hotel room despite full payment.
Today, the company claims that it is offering an affordable, world-class holiday experience for customers. Most of Sterling Holiday Resorts shares are owned by the public. After recovering in 2009-10, the stock price has slipped from about Rs98 in October 2010 to Rs75 today.
Mid-January this year, the company also announced that it plans to raise Rs100 crore to refurbish its properties and complete pending projects. It is relevant to mention that it had made a similar announcement in 2007 but nothing came out of that. Now, neither has the comeback plan nor the fund-raising announcement helped the stock price.
So, any body ready for a second ride?