Market Analysis: Review on Tuesday, Dec 14

Mumbai Dec 15: BSE Sensex gained 107 points and closed at 19,799, while Nifty gained 36 points and closed at 5944 on Tuesday, Dec 14. BSE Consumer Durables and Metal indices gained 3.1 percent and 1.6 percent respectively. BSE Auto index was the sole loser down by 0.2 percent.

JSW Infra to sell 10 percent equity stake to Eton Park for $125 million

JSW Infrastructure an unlisted entity of the JSW group, will sell 10 percent equity stake to global investor Eton Park Capital for $125 million. JSW Infrastructure, Which valued at about $1.25 billion through the deal, and is involved in ports and logistics. The proceeds will use to part-finance its forthcoming port projections in the country. JSW group plans to develop five to six ports at various locations in the country that would require an investment of about Rs 10,000 crore to scale up cargo handling capacities by about six times, to about 200 million tonne in ten years.

The Company decided to invest Rs 1200 crore by the end of 2011 in port development projects in Maharastra, Goa, Orissa and West Bengal. Jaigarh port in Ratnagiri in Maharastra with a capacity of 10 million tonne and is looking at increasing the size to 50 million tonne at an investment of Rs 2,500 crore by 2020. JSW also operates a shipyard at Dabhol in Maharastra. Its ports handle 30-40% captive cargo and the remaining is for the third party.

R-Power to raise Rs.5K-crore loan from China bank

Reliance Power will finalize loans worth Rs 5000 crore with Chinese Banks for its 4,000-MW Sasan power project during the visit of the Country"s premier Wen Jiabao on Wednesday. Bank Of China, China Development Bank, the Export Import bank of China and Standard Chartered Bank, which arranged the loans, have finalized the term loans after Reliance Power signed a memorandum of Understanding in Shangai last October for loan amounting to Rs 56,000 crore for various projects it is executing.

The loans will support import of power equipment from the Shangai Electric Group Company. In October both the companies signed agreements for the supply of 660 MW boiler-turbine-generators (BTG), the main power equipment for their ultra mega power projects (UMPP). With the deal, the total value of orders placed by Reliance Power with the Chinese entity went up to about $10 billion for coal-fired generation capacity of 30,000 MW, or about a fifth of India"s total capacity.

Huawei to invest $2 billion in India over 5 years

Chinese vendor Huawei announced an investment of $2 billion in the next five years to set up an R&D center, local manufacturing and other activities. Huawei has been in India for over a decade and is committed to a long –term development and cooperation in India. As an integral part of the Indian telecom industry development and an active player serving all telecom service providers, Huawei India strives to be the long-term partner for the development of India"s telecom and IT Indsutry. As per the Company sources, new R&D campus would be set up in Bangalore.

Huawei was in spot here after the Indian Government raised security concerns about foreign telecom companies, especially Chinese ones. However, Huawei was allowed to bid to supply equipment to Indian telecom service provider only recently after it agreed to meet all guidelines, including sharing source code and equipment design.

Inflation rise slowest in 11 months

Wholesale price gains in November slowed to the lowest in 11 months. The Wholesale price index or WPI rose 7.4 percent in November from a year ago, a drop from the 8.5 percent increase in Oct. Rate of Inflation for Sep was raised to 8.9 percent from 8.6 percent.

Although the rate of price increases have fallen from a peak of 11 percent in Apr, driven by high food prices. The global commodity prices may spoil the India"s party as India imports more than two-thirds of its crude oil, which has risen beyond $90 a barrel, will increase the pressure on inflation.

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