Market Analysis: Weekly roundup till Nov 16

Sensex and Nifty gained nearly 10 pc in Nov so far, the key drivers was the foreign investors bought the shares worth USD 774.2 million in Nov 2009, taking their total purchases to USD 14.8 billion in calendar year 2009.

Investor sentiment also got big boost after the government's disinvestment talk and assurance to keep stimulus packages until the global economy showed recovery.

The BSE Sensex gained 690 points against previous week's close, and finished at 16848. The Nifty gained by 202 points and closed at 4998 from its previous weekends close.

During the week BSE Mid-cap index gained 5.0 pc, while Small-cap index gained 5.6 pc. Week's top gainers were Metal and BSE IT indices by 7.1 and 6.5 pc respectively.

Going Forward

Domestic markets are likely to take an direction from the global markets. US retail and industrial production numbers influence the markets this week. Market participants are expected to remain cautious of increasing inflation which tends to put upward pressure on interest rates.

Corporate

Reliance Industries is close to overseas acquisition

Reliance Industries is close to announcing a major overseas acquisition. The company is targeting the LyondellBasell with an expected deal size should be around $ 6 billion. The deal includes both the US and European assets of LyondellBasell.

LyondellBasell had posted a loss of $7.3 billion on annual revenues of $50.7 billion for December 2008. It has $27 billion of assets and $19 billion of debt.

Tata Power plans to raise $300 million Through FCCB

Tata Power has launched a bond issue to raise $300 million to finance its operations in and outside India. The Tata Group's share holding will come down to 29 pc from 31 pc after the issue.

The proceeds of the issue will be utilized to fiance our upcoming projects in India and as well overseas operations. The bonds are likely to be listed on the Singapore Stock exchange and convertible at a 10 pc premium over Rs. 1323 per share.

Tata Power is in the process of investing around Rs. 23600 crore in power projects, including electricity distribution in Mumbai. It plans to scale up its power generation capacity to 9000 MW from 2700 MW in three years.

Canara HSBC plans group insurance foray in FY11

Canara HSBC Life Insurance is working on products for high net worth individuals and the rural markets. It is planning to increase its premium income to Rs.1000 crore by the end of this fiscal.

The group insurance market is fiercely competitive. There is a big opportunity for banks in the corporate sector because; they have already relationship with these customers.

Economy

HDFC Banks retail loan hit 18 month high

Backed by upturn in consumer demand and the government stimulus package, HDFC Bank has disbursed retail loans worth of Rs.3000 crore in Oct 2009.

The Bank has witnessed growth in auto, home, personal loans and credit cards. According to management, The Bank expects to grow its retail loan book faster than the industry.

HDFC Bank has a retail portfolio of Rs.60000 crore, Around 47-50 pc of incremental advances and 32 pc of deposits came from non-metros in Oct 2009.

IIP Growth continues to be robust at 9.1 pc

Industrial growth continued its upward march with factory production rising 9.1 pc in Sep against 6 pc in the same period last year. This takes total growth to 6.5 pc during the first half of this fiscal as against 5% a year ago.

All the three sectors-manufacturing, mining and electricity-showed growth in September over the year-ago period. Output in manufacturing was up by 9.3 pc in Sep against 6.2 pc in 2008, and mining was up by 8.6 pc compared to 5.8 pc.

Electricity generation rose 7.9 pc over 4.4 pc in 2008. On a monthly basis, however, industrial growth in Sep is down from revised figures of 10.95 pc in Aug 2009.

(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)