Kotak-ING Vysya deal: CCI will look at combined market share

NEW DELHI: The Competition Commission will look at the overall market share and size of the combined entity in the case of ING Vysya Bank's merger with Kotak Mahindra Bank when the proposal comes before the regulator for its approval.

In the biggest merger in India's banking sector, Kotak Mahindra Bank yesterday announced the buyout of ING Vysya Bank in an all-stock deal valued at Rs 15,000 crore.

"I suppose in due course they (the two banks) will make a filing to the Competition Commission. We will look at it as we look at any other merger proposal," the Competition Commission of India (CCI) Chairman Ashok Chawla told reporters here.

"The matter that will engage our attention is that the combined entity, what will be its market share and how big that will be. Based on that a decision will be taken within parameters of competition law," he said.

Chawla was responding to a query on what aspects of the deal the Commission would be looking into. He was speaking on the sidelines of Skoch Summit here.

CCI keeps a tab on anti-competitive practices at the market place across sectors and works to prevent as well as curb such activities.

Under the all-stock deal, ING Vysysa stock has been valued at Rs 790 a share, which is a 16 per cent premium to the 30-day stock price as of November 19, while pegging Kotak Bank at Rs 1,119 a share in similar manner.

Accordingly, ING shareholders would get 725 Kotak Mahindra Bank shares for 1000 shares of the Bangalore based lender. This values ING Vysya Bank at Rs 15,033 crore.

Post-deal, ING Group NV would have 6.5 per cent in the combined entity, while Kotak promoters' stake would be diluted to 34 per cent from 40.12 per cent.

After the transaction, ING would be the second largest stakeholder in the combined entity.
Source : economictimes

7 midcap stocks to bet post Sept quarter results

Midcap stocks are flavour of the season. The index is up 49% year-to-date and in 6 months it has jumped 35.90%. The BSE Midcap index touched its all-time highs of above 10,000 that it scaled in early 2008. ICICI Direct recommends 7 midcaps stocks to buy post September quarter results.

So, if you have been fence sitting and want to buy some midcaps, here are some stocks to buy.

Pidilite Industries

Rating: BUY

Potential upside: 16%

Target: Rs 462

Rationale: Estimate revenues, earnings CAGR of 19% in FY14-17E on the back of intact demand from tier II, tier III cities. A recovery in margin coupled with strong return ratios would justify the company’s re-rating possibilities.

IRB Infrastructure

Rating: HOLD

Target: Rs 269

Potential upside: Given the strong order of Rs 11,587 crore providing strong revenue visibility, see its earning to grow at 22.6 percent CAGR during FY14-16E. However, most of the positives have already been priced in the CMP. Hence, maintain HOLD.

Gujarat Pipavav Port

Rating: HOLD

Target: Rs 175

Potential upside: 3%

Rationale: With debt-free structure and ECB for funding further capex, interest cost is expected to decline substantially. Further, its higher revenue visibility and better margin on account of fixed cost model together with revenue from tank farms will provide further upside.

Gateway Distriparks

Rating: BUY

Target: Rs 330

Potential upside: 14%

Rationale: As container volumes at major ports like JNPT andChennai post growth of 9% and 5% YoY, respectively, in YTD, we expect the CFS segment to post confident growth.

East India Hotels

Rating: BUY

Target: Rs 124

Potential upside: 19%

Rationale: In terms of earnings, expect sales CAGR of 6.8% during FY14-16E coupled with expansion in margins.

Taj GVK Hotels

Rating: BUY

Target: Rs 116

Potential upside: 13%

Rationale: Expect the hotel business in Hyderabad to improve post resolution of the Telangana issue over next two years. Further, expansion into newer geographies of Bangalore and Mumbai would provide the company with better scale and geographic diversity over the longer-term.

Greaves Cotton

Rating: BUY

Target: Rs 175

Potential upside: 25%

Rationale: A recovery in the engines business and complete exit from the infrastructure business may drive PAT CAGR at 18% over FY14-17E. Even with the improvement in GDP, we expect sales to witness 14% CAGR over the same period.
Source : Moneycontrol

Both the indices end marginally higher after touching new peak

MUMBAI: Both the indices, sensex and nifty, ended marginally higher after touching life-time high in a truncated trading week.

This was on strong buying mainly in Realty, Healthcare, Banking and IT sectors despite mild profit-booking from operators in Metal, Power, Auto and Consumer Durable.

The Sensex conquered the 28,000 mark for the first time on expectations of more reforms by the Modi government and a rate cut by the RBI.

Markets were enthused after Finance Minister Arun Jaitley promised reforms in labour, land acquisition and insurance laws and expressed readiness to look at privatisation of some loss-making public sector companies.

Strong foreign capital inflows coupled with higher European cues mainly boosted the domestic market sentiment, even as services sector activity in India stagnated during October amid weaker growth of new orders as per an HSBC survey.

"The fall in crude oil prices will have a positive impact on, among other things, inflation....it will embolden the RBI to cut rates," said HDFC Securities in a note.

The sensex resumed higher at 27,943.04 and shot up further to an all-time high of 28,010.39 on initial strong buying. However, it declined afterwards to 27,739.56 before concluding the week at 27,868.33, showing a marginal gain of 2.70 points or 0.01 pct.

The CNX 50-share Nifty also moved by 14.80 points or 0.18 per cent to finish at 8,337.00 after touching an all-time high level of 8,365.55 during the week.

Ssentiments were on the negative side at the fag-end of the week in reaction to the OECD report, which lowered India's GDP growth forecast to 5.4 per cent for this year from 5.7 per cent earlier.

But, the downside also remained limited, tracking continuous FIIs inflow," said Jayant Manglik, President-retail distribution, Religare Securities.

BSE remained closed on November 4 for "Muharram" and November 6 on account of "Gurunanak Jayanti".

21 scrips out of the 30 Sensex companies ended lower while only nine finished higher.

Major losers from the Sensex pack were Gail India (8.34 per cent), Coal India (6.67 per cent), Hero Motocorp (5.33 per cent), M&M (4.81 per cent), Hindalco (4.38 per cent), SSLT (3.75 per cent), NTPC (3.63 per cent), Tata Steel (3.51 per cent), Tata Power (2.61 per cent), BHEL (2.60 per cent) and Reliance Ind (1.83 per cent).

However, Axis Bank rose by 6.86 per cent, followed by Dr Reddy (6.82 per cent), Sun Pharma (5.45 per cent), ICICI Bank (3.70 per cent), Infosys (2.89 per cent) and ONGC (1.04 per cent).

Among the S&P BSE sectoral indices, Realty rose by 5.73 per cent, followed by HC (3.70 per cent), Bankex (1.79 per cent), IT (1.11 per cent) and Teck by 1.06 per cent while Metal fell by 4.35 per cent, Power (1.49 per cent), CD (1.30 per cent) and Auto (1.29 per cent).

Small-cap and Mid-cap indices rose by 1.70 per cent and 1.68 per cent, respectively on persistent buying from retail investors.

Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 5,042.33 crore during the week, including the provisional figure of November 7.

The total turnover at BSE and NSE fell to Rs 11,865.96 crore and Rs 59,859.41 crore, respectively from Rs 15,192.70 crore and Rs 85,382.17 crore last week.
Source : economictimes

Choppy Sensex, Nifty end lower; auto, cap goods, auto drag

Equity benchmarks closed marginally lower amid consolidation on Friday, weighed down by capital goods, metals, auto and index heavyweights like Reliance and ITC. The broader markets closed mixed with the BSE Midcap rising 0.35 percent and Smallcap falling 0.4 percent.

The 30-share BSE Sensex declined 47.25 points to close at 27868.63 and the 50-share NSE Nifty fell 1.30 points to 8337.

This is a market in which investors should buy on dips, says Vibhav Kapoor, Group Chief Investment Officer, IL&FS.

According to him, the market is right now banking on hope and trying to discount FY16 numbers instead of FY15 numbers, be it macro or corporate earnings. The macro environment still looked a bit uncertain at the moment, but there were enough signs of an improvement in FY16, he added.

Kapoor expects to see the Nifty at 9000 by March 2015 while Aditya Narain, Citigroup remains comfortable with market view of 31,000 on the Sensex by December 2015.

For the week, the Sensex, Nifty closed flat while the CNX Midcap and BSE Smallcap indices gained more than a percent.

Meanwhile, media report suggested that Union Council of Ministers will be expanded on Sunday in which about 10 new faces, including Goa Chief Minister Manohar Parrikar, are likely to be inducted in an exercise that may also cover some allies.

State-run power equipment maker BHEL fell more than 3 percent while engineering and construction major Larsen & Toubro declined a percent ahead of earnings later today.

Private sector lender HDFC Bank fell 1.5 percent as the MSCI has deleted it from its India index. Public sector lender State Bank of India was down 1.5 percent while its rivals Axis Bank and ICICI Bank gained 2.8 percent and 1 percent, respectively.

Two-wheeler maker Hero Motocorp lost 1.9 percentas 2.9 percent equity shares changed hands via block deals today and most likely Bain Capital was the seller.

Among others, Reliance Industries, TCS, ITC, M&M, Sesa Sterlite, Gail India, Wipro, Tata Steel and Cipla were down 0.8-2 percent.

India’s largest coal miner Coal India declined 1 percent ahead of earnings on Saturday.

Drug maker Dr Reddy’s Labs topped buying list in the Sensex. Dr Reddy's Labs surged nearly 5 percent as it received USFDA approval for Valcyte generic while DLF climbed 5.5 percent as the Securities Appellate Tribunal or SAT has allowed the realty major to redeem Rs 1,806 crore from mutual funds till next month.

Other gainers include Axis Bank, HUL and ONGC.

BSE midcap gainers were Allcargo, Risa International, Abbott India, Firstsource Solution and
Prestige Estate. Shares of Aurobindo Pharma hit record high at Rs 1043.40 per share, up 4 percent intraday after it has reported a whopping 58.3 percent growth in consolidated net profit at Rs 372 crore for July-September quarter led by US generics.

Top losers in the midcap were Birla Corp, UCO Bank, Novartis India, NBCC and Bhushan.

About 1440 shares advanced while 1564 shares declined on the Bombay Stock Exchange.
Source : Moneycontrol

Wall Street dips after payrolls, but uptrend seen intact

NEW YORK: US stocks receded from record levels on Friday as investors locked in profits after the October payroll report came in weaker than expected, even as the report pointed to economic resilience in the face of slowing global demand.

Employers added 214,000 new jobs last month, below the 231,000 that was expected, while the September report was revised higher. The unemployment rate fell to 5.8 percent from 5.9 percent.

"It's hard to not bet on the economy, with the fundamentals looking like a full house: earnings are rock solid, we're growing at a nice pace and confidence is up," said David Kelly, chief global strategist for JPMorgan Funds in New York.

"The number was slightly weaker than expected, but until we see real weakness or higher interest rates, we'll continue to be overweight on equities."

The Dow was pressured by Walt Disney Co, which fell 3.4 percent to $88.82 a day after posting earnings that met expectations, though its cable networks were weaker. The stock closed at a record on Thursday.

Salix Pharmaceuticals Ltd plummeted 35 percent to $89.21 in its biggest one-day drop a day after it slashed its full-year forecast as its inventory for key drugs piled up. The issue dissuaded Allergan Inc from acquiring the drugmaker, people familiar with the matter said. More than 5.5 million shares exchanged hands in early trading, more than twice Salix's 50-day average of almost 2 million.

Energy shares were sharply higher on the day, rising 0.8 percent alongside a 1.3 percent jump in crude oil prices.

The industry was the top-performing S&P 500 sector by far. Among the most active names, Chesapeake Energy rose 2.6 percent to $23.34 while Newfield Exploration was up 2.4 percent at $33.28.

At 9:49 a.m. (1449 GMT) the Dow Jones industrial average fell 34.92 points, or 0.2 percent, to 17,519.55, the S&P 500 lost 2.4 points, or 0.12 percent, to 2,028.81 and the Nasdaq Composite dropped 10.38 points, or 0.22 percent, to 4,628.09.

For the week, the Dow is up 0.7 percent and the S&P is up 0.5 percent in their third straight week of gains. The Nasdaq is down 0.1 percent for the week.

While political tensions abroad have largely faded from markets, a cautious note was added to the market after the Kiev military said a column of tanks had crossed into eastern Ukraine from Russia.

Declining issues outnumbered advancing ones on the NYSE by 1,537 to 1,189, for a 1.29-to-1 ratio on the downside; on the Nasdaq, 1,465 issues fell and 821 advanced for a 1.78-to-1 ratio favoring decliners.

The S&P 500 index posted 28 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 43 new highs and 24 new lows.
Source : Moneycontrol

Bank of Maharashtra net profit soars 248% on higher margin recoveries

MUMBAI: State-run lender Bank of Maharashtra today reported a 248 per cent jump in net profit at Rs 162.91 crore in the September quarter on account of higher margin and improvement in cash recoveries.

The state run lender's net profit in the corresponding July-September quarter of the previous fiscal stood at Rs 46.85 crore.

"We have had a significant improvement on yield on advances, reduction in deposit cost and we have also had improved investment yields. These have resulted in net interest margins and return on assets," bank chairman and managing director S Muhnot told reporters here today.

Net interest margins grew to 2.90 per cent from 2.69 per cent in the year-ago period, while return on assets improved to 0.48 per cent from 0.14 per cent and yield on advances rose to 11.28 per cent from 11.05 per cent and yield from investments rose to 7.88 per cent from 7.79 per cent.

The bank was able to bring down its cost of funds to 6.47 per cent in the period from 6.58 per cent last year.

However, its asset quality worsened with gross non-performing assets soaring to 4.83 per cent from 2.77 per cent, while net NPAs nearly doubled to 3.29 per cent from 1.76 per cent.

Fresh slippages rose to Rs 1,277 crore as against Rs 1,206 crore last year. "Going forward, we expect slippages to reduce on higher recoveries and upgrades," Muhnot said.

Cash recoveries in the quarter jumped to Rs 218 crore from Rs 89 crore, while the bank upgraded Rs 426 crore of loan as against Rs 119 crore in the year ago period. The Pune-based lender wrote off Rs 52.21 crore of loans during the quarter.

Recoveries in the quarter stood at Rs 590 crore and the bank expects a similar amount of recoveries in pipeline. Total deposits increased to Rs 1,17,452 crore from Rs 1,17,293 crore last year, while advances increased from Rs 88,419 crore to Rs 90,119 crore.

Muhnot said the bank has asked for Rs 1,100 crore in capital infusion from the government. The bank is also planning to raise Rs 500 crore through issuance of additional Tier I bonds.

Bank of Maharashtra shares closed at Rs 44.60 per scrip on the BSE today, up 0.22 per cent from their previous close.
Source : Moneycontrol

Top exchanges BSE and NSE to suspend trading in Kingfisher Airlines, UB Engineering

MUMBAI: In a major clampdown for non- compliance of Listing Agreement, top exchanges BSE and NSE today announced suspension of trading in shares of Kingfisher Airlines and another group firm, UB Engineering, from next month.

Besides, the entire promoter shareholding of these companies have been frozen with effect from today itself.

The action follows non-compliance to a Listing Agreement clause relating to timely preparation and disclosure of financial results by a listed company for two consecutive quarters. The results are required to be disclosed by listed companies on stock exchange platform for benefit of investors.

In separate circulars, BSE and NSE said that the trading would be suspended in securities of Kingfisher and UB Engineering -- both parts of crisis-hit UB group headed by Vijay Mallya -- with effect from December 1.

The suspension follows Sebi guidelines with respect to Standard Operating Procedure (SOP) for suspension and revocation of trading of shares of listed entities for noncompliance of the Listing Agreement that a listed company needs to follow pursuant to its shares getting listed and traded on a stock exchange.

Shares of Kingfisher, once touted as most luxurious airline in India, are currently trading below Rs 2 apiece and its market capitalisation now stands at just about Rs 150 crore. At one point of time, before financial troubles began and led to its grounding in October 2012, the company carried a market valuation of close to Rs 10,000 crore.

For the year ended March 2013, the carrier saw its net loss widen to Rs 4,301.12 crore. During that period, the gross income stood at Rs 683.46 crore. A consortium of 17 banks has an outstanding debt of about Rs 6,521 crore from the now-grounded carrier and outside the consortium, there are some other loans also.

In Kingfisher, promoters have just 8.54 per cent stake, while public holding stands very high at 91.46 per cent.

The non-promoter shareholders include more than two lakh small investors, over 6,000 HNIs, over 2000 NRIs and 13 FIIs, among others.

Along with Kingfisher and UB Engineering, NSE has also announced trading suspension for securities of Varun Industries Limited on account of non-compliance with Clause 41 of the Listing Agreement for two consecutive quarters, that is quarter ended March, 2014 and June, 2014.

"Accordingly, the entire promoter shareholding of Varun Industries Limited, UB Engineering Limited and Kingfisher Airlines Limited shall be freezed with effect from November 7, 2014 till further notice."

"In case, Varun Industries, UB Engineering and Kingfisher Airlines complies with respective requirement/s including payment of fines on or before November 25, 2014 (five days before the proposed date of suspension), the trading in securities of the said companies will not be suspended," NSE said.

In UB Engineering, which has a market cap of about Rs 14 crore, public holds 59.26 per cent stake while promoter group controls 40.74 per cent.

In case these companies fail to comply with the provisions of the Listing Agreement on or before November 25, 2014, then trading in their shares would be suspended from December 1 and the suspension will continue till such time the company complies including the payment of fine.

After 15 days of suspension, trading in the shares of non-compliant companies would be allowed on Trade for Trade basis in on the first trading day of every week for six months, NSE said.

BSE has taken similar action against 21 companies, including Kingfisher and UB Engineering.

Others include Nilachal Refractories, Linkson International, Secure Earth Technologies, Ratan Glitter Industries, Bheema Cements, Arvind International, Elegant Floriculture & Agrotech India, Pretto Leather Industries, UT Ltd, Arihants Securities Ltd, Raghava Estates and Properties, Tutis Technologies, Valuemart Info Technologies, Ontrack Systems, Avon Corporation, Birla Pacific Medspa, Best & Crompton Engineering, Varun Industries and Maestros Mediline Systems.

Kingfisher Airlines is already facing a close regulatory scrutiny over suspected lapses in its accounting practices and the Corporate Affairs Ministry is looking into possible violations of Companies Act.

The airline, part of Vijay Mallya-led UB Group, has been grounded for over two years now after being bogged down by huge and mounting losses.

The carrier is yet to submit its annual financial results for the 2013-14 period to the stock exchanges.

In a filing to the BSE on August 26, the carrier had said that steps were being taken to appoint directors in order to comply with provisions of the Companies Act, 2013 and listing agreement with the stock exchanges.

"Thereafter, steps will be taken towards publishing the audited results for the year ended March 31, 2014 and for the quarter ended June 30, 2014," it had said.

Back in May, Kingfisher had informed stock exchanges that "there are hardly any employees attending office and the company is currently operating with skeletal staff making it difficult to audit and publish the results in time."

As part of the recovery process, banks in February last year decided to sell a portion of the collateral with them, including shares of its group companies United Spirits Ltd and Mangalore Chemicals & Fertilizers Ltd, Mallya's Goa villa, Kingfisher House in Mumbai and the Kingfisher brand, which was valued at over Rs 4,000 crore at the time it was pledged.