MUMBAI: Tata Steel said on Friday its unit NatSteel Holdings Pte Ltd has sold 27.03 percent stake in Malaysia's Southern Steel Berhad for $72 million.
The sale is part of the steel maker's strategy to restructure its portfolio and reconsider its position in areas where it does not have majority control, it said in a statement.
The company would continue to explore opportunities to grow in south-east Asian businesses in the future, it added.
Source: Economic Times
Friday, July 16, 2010
TCS pips Infy as the most valued IT company in India
NEW DELHI: Country's top software exporter TCS today toppled its main rival Infosys Technologies as the most valued IT company in the country.
Shares of Tata Consultancy Services (TCS) rallied over 6 per cent on the Bombay Stock Exchange, taking its market capitalisation to Rs 1.62 lakh crore, higher by Rs 3,470 crore than Infosys' Rs 1.59 lakh crore valuation.
The Tata Group company TCS is now the fourth most valued company in the country. Billionaire Mukesh Ambani-led Reliance Industries is the most valued firm with market valuation of Rs 3.47 lakh crore as of today, followed by state-run ONGC and NTPC in that order. Infosys is at the fifth place in the top group.
TCS's over 24 per cent rise in April-June quarter profit at Rs 1,906 crore saw it shares surging on BSE. The counter closed up by a whopping 6.16 per cent, the highest among Sensex stocks.
"TCS results were above the street and our expectations. The company has positively surprised us by reporting a strong 6.4 per cent sequential growth in dollar-term revenue," said domestic brokerage firm Sharekhan.
The jump in TCS was infectious and other IT stocks, too, posted smart gains, pushing the BSE IT index about 100 points higher to 5,459. Infosys rose 0.70 per cent and Wipro 0.06 per cent.
"Strong results of TCS are proof of demand momentum for Indian techs and should soothe concerns after the street's disappointment with Infosys performance on account of heightened expectations," Emkay Global Financial Services said in a note.
The improved sentiment helped the Bombay Stock Exchange 30-share index close at 17,955.82, up 46.36 points, or 0.26 per cent.
Source: Economic Times
Shares of Tata Consultancy Services (TCS) rallied over 6 per cent on the Bombay Stock Exchange, taking its market capitalisation to Rs 1.62 lakh crore, higher by Rs 3,470 crore than Infosys' Rs 1.59 lakh crore valuation.
The Tata Group company TCS is now the fourth most valued company in the country. Billionaire Mukesh Ambani-led Reliance Industries is the most valued firm with market valuation of Rs 3.47 lakh crore as of today, followed by state-run ONGC and NTPC in that order. Infosys is at the fifth place in the top group.
TCS's over 24 per cent rise in April-June quarter profit at Rs 1,906 crore saw it shares surging on BSE. The counter closed up by a whopping 6.16 per cent, the highest among Sensex stocks.
"TCS results were above the street and our expectations. The company has positively surprised us by reporting a strong 6.4 per cent sequential growth in dollar-term revenue," said domestic brokerage firm Sharekhan.
The jump in TCS was infectious and other IT stocks, too, posted smart gains, pushing the BSE IT index about 100 points higher to 5,459. Infosys rose 0.70 per cent and Wipro 0.06 per cent.
"Strong results of TCS are proof of demand momentum for Indian techs and should soothe concerns after the street's disappointment with Infosys performance on account of heightened expectations," Emkay Global Financial Services said in a note.
The improved sentiment helped the Bombay Stock Exchange 30-share index close at 17,955.82, up 46.36 points, or 0.26 per cent.
Source: Economic Times
Monday, July 12, 2010
US sees 90 bank failures in just 7 months
NEW YORK: The US banking system continues to wobble under financial woes, with 13 banks on an average going belly up every month in 2010.
Notwithstanding the slow economic recovery, more banks are expected to fold up in coming months, especially due to high unemployment rate, which is hovering over nine per cent.
So far this year, 90 banks have been shut down by the authorities, which translates to an average of around 13 failures every month.
Four entities including Home National Bank, Bay National Bank, USA Bank and Ideal Federal Savings Bank, failed on July 9.
According to the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 banks, these failures would cost the agency more than USD 81 million.
The jobless rate in the world's largest economy stood at 9.5 per cent in June. High unemployment has resulted in rising defaults, primarily hitting small and medium banks.
In May and June, 22 banks bit the dust while the count of collapses had touched 23 in April, the highest for any month this year. Official figures show that 41 banks were closed down in the 2010 first quarter.
Going by the FDIC, the count of 'problem' banks -- those at risk of failing -- climbed to 775, the highest in nearly 17 years, in the first three months of 2010. The figure was at just 702 at the end of last year.
Last year, a whopping 140 banks went out of business. Recently, FDIC chairperson Sheila C Bair had warned of more bank failures since the banking system was facing many problems.
Courtesy: Economic Times
Notwithstanding the slow economic recovery, more banks are expected to fold up in coming months, especially due to high unemployment rate, which is hovering over nine per cent.
So far this year, 90 banks have been shut down by the authorities, which translates to an average of around 13 failures every month.
Four entities including Home National Bank, Bay National Bank, USA Bank and Ideal Federal Savings Bank, failed on July 9.
According to the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 banks, these failures would cost the agency more than USD 81 million.
The jobless rate in the world's largest economy stood at 9.5 per cent in June. High unemployment has resulted in rising defaults, primarily hitting small and medium banks.
In May and June, 22 banks bit the dust while the count of collapses had touched 23 in April, the highest for any month this year. Official figures show that 41 banks were closed down in the 2010 first quarter.
Going by the FDIC, the count of 'problem' banks -- those at risk of failing -- climbed to 775, the highest in nearly 17 years, in the first three months of 2010. The figure was at just 702 at the end of last year.
Last year, a whopping 140 banks went out of business. Recently, FDIC chairperson Sheila C Bair had warned of more bank failures since the banking system was facing many problems.
Courtesy: Economic Times
Tata Motors: On a new growth trajectory
As the company uses innovative methods to reduce debt and sets itself on a higher growth trajectory, equity dilution can be expected.
As operations of subsidiaries move in line with expectations and the company gets a sales volume boost in the domestic market (it became the second-largest passenger car company in June), Tata Motors sets off on a new growth trajectory.
However, it needs to take care of the debt numbers on its balance sheet. According to a management note, the consolidated net debt-to-equity stands at 3.3:1, and has high cost components. The company had managed to lower its net debt-to-equity from around five times during the previous financial year to the current levels. Subsequently, the interest cost fell 58 per cent to around Rs 103 crore in FY10.
Earlier, the company had issued almost 30 million equity shares in the form of global depository receipts to raise around $375 million. It also raised a similar amount by issuing four per cent convertible notes maturing in 2014. It had also given bondholders, with zero per cent Japanese ¥11,760 million and one per cent $300 million convertible bonds, an option to convert their bonds into ordinary shares during March 23-29. These plans were great successes and the company could extinguish almost $345 million of debt, say analysts.
Going ahead, the company has outlined a Rs 10,000-crore plan for its growth strategy. It is seeking shareholders’ permission to raise Rs 4,700 crore though issue of securities, modalities for which are yet to be finalised. With this, the net worth of the company will improve, allowing it to raise further debt. The company will also be seeking an increase in the borrowing limits to Rs 30,000 crore from Rs 20,000 crore. This, however, might not be able to generate large funds, as it is already near the threshold.
Moreover, as the company gets into another expansionary mode, a 10 to 15 per cent equity dilution is expected in the next few years. However, the company will be in a position to generate better cash inflows from operations this time than the earlier troubled years.
IOC, RIL among 8 Indian cos in Fortune 500 global list
NEW YORK: Eight Indian companies, including oil major Indian Oil Corporation and Mukesh Ambani-led Reliance Industries, have made the cut in the list of the world's 500 largest companies compiled by Fortune.
The league of 500 elite companies for 2010 is topped by US retailer Wal-Mart Stores, followed by oil giant Royal Dutch Shell and another oil major, Exxon Mobil, in that order.
Besides IOC and RIL, the other Indian companies in the list are steel-maker Tata Steel, auto company Tata Motors, oil entities Bharat Petroleum, Hindustan Petroleum and Oil & Natural Gas and public sector bank SBI.
Tata Motors has made an entry into the list for the first time this year, while seven other Indian entities, which were part of the list in the previous year as well, are also featured in this list.
The list also features Citigroup, ArcelorMittal, Pepsico and Motorola, four companies led by people with Indian roots.
Courtesy: Economic Times.
The league of 500 elite companies for 2010 is topped by US retailer Wal-Mart Stores, followed by oil giant Royal Dutch Shell and another oil major, Exxon Mobil, in that order.
Besides IOC and RIL, the other Indian companies in the list are steel-maker Tata Steel, auto company Tata Motors, oil entities Bharat Petroleum, Hindustan Petroleum and Oil & Natural Gas and public sector bank SBI.
Tata Motors has made an entry into the list for the first time this year, while seven other Indian entities, which were part of the list in the previous year as well, are also featured in this list.
The list also features Citigroup, ArcelorMittal, Pepsico and Motorola, four companies led by people with Indian roots.
Courtesy: Economic Times.
Tuesday, June 22, 2010
SIPs turn 'safe' bet for retail investors
MUMBAI: Nearly 80% of all redemption made by retail investors — even during adverse market conditions — are profitable. Systematic investment plans, or SIPs, are gaining popularity with about 22.5 lakh live SIPs in 2010 against 7 lakh in 2003. The first quarter of 2010 witnessed SIP subscriptions accounting for 19% of total inflows into equity mutual funds, compared with 2% in 2005, said a Boston Consulting Group (BCG) and Computer Age Management Systems (CAMS) report on equity mutual funds.
According to the BCG-CAMS report, equity MFs are increasingly gaining acceptance as a financial savings instrument by retail investors. MF investments as a percentage of gross household savings have increased from 1.1% in 1994 to a significant 7.9% in 2008. The growth in equity AUM has not, however, been backed by truly differentiated products from fund houses. Sectoral and mid-cap funds have lost significant market share and now represent only around 13% of total AUM. Large-cap and multi-cap funds have grown rapidly and now account for 87% of total AUM, the report said.
Retail customers continue to dominate equity MFs with over 90% of the investment volume coming from ticket sizes of less than Rs 1 lakh; nearly 99% of investment volume is in ticket sizes of less than Rs 5 lakh. Currently, there are nearly 40 lakh active SIPs with an average ticket size of Rs 2,300 every month and 97% of all retail SIP transactions are electronic, the report adds.
The BCG-CAMS report states that average tenure of equity money staying invested in one scheme is about 30 months; nearly 50% of the AUM has an investment tenure greater than two years. And nearly 70% of equity money has investment tenure exceeding 12 months. Only 30% of the equity asset base has a tenure of less than 12 months. “Going forward, retail consumers will continue to play an essential role in the equity fund space. The focus of fund houses should be to develope a plan that will bring in more retail money,” said Alpesh Shah, Partner & Director, BCG. “The focus of fund houses should be to support small distributors and strengthen the PSU bank network for widening distribution reach,” Mr Shah added.
The concentration of equity AUM in top cities is fast diminishing, the BCG-CAMS report says. The share of AUM beyond top-10 cities has shot up from about 10% in March 2003 to around 26% in March 2010. Mumbai and Delhi together account for nearly 45% of total equity AUM, and the top-30 cities account for around 90% of total equity AUM. “There has to be a focus on defining a geographic footprint strategy. Fund houses will have to move out of top-10 cities to cater to more investors,” said NK Prasad, president & CEO, CAMS.
The share of bank ranges from 19% to 38%; the share of IFAs has gone up to 34% from 20% and distributors’ share has gone up to 42% from 29% earlier.
While large-sized distributors, including large and well-networked IFAs, are gaining in market share, small IFAs are losing out the battle to larger players; the trend is more relevant post-entry load ban, notes the study,
The total share of small IFAs has fallen to less than 1% in 2010 from about 6% in 2004. Further analysis indicates that small IFAs are largely inactive, with no sales recorded. On an average, nearly 80% of all small IFAs are inactive every month, the BCG-CAMS report added.
Source: The Economic Times. June 22nd, 2010
According to the BCG-CAMS report, equity MFs are increasingly gaining acceptance as a financial savings instrument by retail investors. MF investments as a percentage of gross household savings have increased from 1.1% in 1994 to a significant 7.9% in 2008. The growth in equity AUM has not, however, been backed by truly differentiated products from fund houses. Sectoral and mid-cap funds have lost significant market share and now represent only around 13% of total AUM. Large-cap and multi-cap funds have grown rapidly and now account for 87% of total AUM, the report said.
Retail customers continue to dominate equity MFs with over 90% of the investment volume coming from ticket sizes of less than Rs 1 lakh; nearly 99% of investment volume is in ticket sizes of less than Rs 5 lakh. Currently, there are nearly 40 lakh active SIPs with an average ticket size of Rs 2,300 every month and 97% of all retail SIP transactions are electronic, the report adds.
The BCG-CAMS report states that average tenure of equity money staying invested in one scheme is about 30 months; nearly 50% of the AUM has an investment tenure greater than two years. And nearly 70% of equity money has investment tenure exceeding 12 months. Only 30% of the equity asset base has a tenure of less than 12 months. “Going forward, retail consumers will continue to play an essential role in the equity fund space. The focus of fund houses should be to develope a plan that will bring in more retail money,” said Alpesh Shah, Partner & Director, BCG. “The focus of fund houses should be to support small distributors and strengthen the PSU bank network for widening distribution reach,” Mr Shah added.
The concentration of equity AUM in top cities is fast diminishing, the BCG-CAMS report says. The share of AUM beyond top-10 cities has shot up from about 10% in March 2003 to around 26% in March 2010. Mumbai and Delhi together account for nearly 45% of total equity AUM, and the top-30 cities account for around 90% of total equity AUM. “There has to be a focus on defining a geographic footprint strategy. Fund houses will have to move out of top-10 cities to cater to more investors,” said NK Prasad, president & CEO, CAMS.
The share of bank ranges from 19% to 38%; the share of IFAs has gone up to 34% from 20% and distributors’ share has gone up to 42% from 29% earlier.
While large-sized distributors, including large and well-networked IFAs, are gaining in market share, small IFAs are losing out the battle to larger players; the trend is more relevant post-entry load ban, notes the study,
The total share of small IFAs has fallen to less than 1% in 2010 from about 6% in 2004. Further analysis indicates that small IFAs are largely inactive, with no sales recorded. On an average, nearly 80% of all small IFAs are inactive every month, the BCG-CAMS report added.
Source: The Economic Times. June 22nd, 2010
Monday, June 21, 2010
United Stock Exchange receives RBI authorisation
United Stock Exchange of India Limited, India's newest stock exchange for currency derivatives, said it has received authorisation from the Reserve Bank of India (RBI) to start operations.
USE had earlier received final approval from SEBI to launch operations in currency futures, the exchange said in a statement here. USE is a public-private partnership with equity participation by PSUs, public sector and private sector banks and corporate institutions.
All 21 Indian public sector banks, leading private sector banks, public sector undertakings and corporates are shareholders of the Exchange. "The RBI authorisation is another step forward towards the launch of the Exchange. We have recently started conducting mock trading to familiarise members with the platform," USE's CEO and Managing Director, T S Narayanasami, said. USE has planned to commence commercial operations in July 2010, the release said.
Courtesy: Hindustan Times
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