Market Analysis: Weekly roundup till Nov 13

Following the fears of interest rate hike in China, speculation about the deteriorating finances of Ireland, Portugal and Spain and lower than expected Industrial production data, BSE Sensex lost 4 percent as compared to the previous week.

Sensex lost 848 points and closed at 20,156 during the week, while Nifty ended the week at 6,071 was down by 3.8 percent over its previous weekend's close.

During the week BSE Mid-cap and small-cap indices lost 2.8 percent and 1.1 percent respectively. The entire BSE sector Indices closed in red during the week. BSE Realty and Bankex indices lost 6.5 percent and 6.0 percent respectively.

The second round of quantitative easing shows that the western world is not out of the woods and money will continue to flow into developing markets.

Going Forward

Indian markets may continue to be weighed down early this week by renewed worries of a sovereign debt crisis in Europe and interest rate hike in China.

Investors watch key US economic readings, including industrial production, the housing market and jobless claims and many others.

On domestic front, investors watch quarterly results of ABG Shipyard, Kinetic Motors, Satyam Computers and the wholesale price index for Oct 2010 to be announced.

Ex-Im Bank offers $5 billion loan to R-power

The Export-Import Bank of United States of America (USA) will offer loans up to $5 billion to Reliance Power, help the Company to purchase US goods and services for various power plants.

The Ex-Im Bank President of America and Anil Ambani signed the memorandum of understanding. The agreement would make available long-term dollar loans in the next three years.

The funding facility is to support Sasan Power plans of purchasing coal mining equipment. Reliance Power, a leading private sector power generation company, is implementing projects with aggregating capacity of over 37,000 MW.

The Company has the largest captive coal reserves in the private sector, estimated at more than 2 billion tonne. R-power has earlier placed a $750 million order with General Electric for its power plants.

Chevron to buy Atlas Energy, to become RIL ally

Chevron will buy US natural gas producer Atlas Energy for $3.2 billion, excluding debt. Chevron would gain access to as much 9 trillion cubic feet of natural gas in the shale fields in eastern United States.

Chevron will pay $43.34 per share, or a 37 percent premium to Atlas closing stock price on Monday, Nov 15. The offer consists of $38.2 per share in cash for each Atlas share, plus distribution of units in Atlas Pipeline Holdings worth about $5.09 per share.

Chevron will also assume net debt from Atlas about $1.1 billion, for total deal value of $4.3 billion. With this deal Chevron will take over Atlas 60 percent stake and serve as the operator of a joint venture in the Marcellus shale with India's Reliance Industries.
Reliance will continue to fund 75 percent of the operator's drilling upto $1.4 billion.

Sun Pharma buys out Templeton in Taro

Sun Pharmaceutical Industries has acquired the 12 percent stake in Taro Pharmaceuticals for $82 million from Templeton Asset Management. Sun paid $16 per share, about 14 percent premium to Taro's current market Price of $13.75.

With this, Sun Pharma increased its Taro stake at 65.2 percent from 53.2percent. The deal will help the Indian drug maker to get crucial 77 percent voting rights on management decisions related to Taro.

Templeton invested in Taro in 2005, and increased its stake in 2006, when Taro's shares were trading at $12 per share. Templeton bought more shares in 2007 at between $6.5 and $7.2 per share.

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