Wednesday, May 6, 2009
Economic rebound to start towards year-end for India, says IMF
Economic rebound to start towards year-end for India, says IMF
The Financial Express, May 6, 2009, Page 2
New Delhi, (PTI)
Multilateral agency International Monetary Fund today said, the Indian economy, facing slowdown amid global financial slowdown is expected to rebound near the end of the current calendar year.
The Financial Express, May 6, 2009, Page 2
New Delhi, (PTI)
Multilateral agency International Monetary Fund today said, the Indian economy, facing slowdown amid global financial slowdown is expected to rebound near the end of the current calendar year.
"For India, we expect growth to slow markedly in 2009 before starting to rebound toward year end," the IMF said in its latest 'Regional Economic Outlook: Asia and Pacific'.
The IMF, which recently slashed its 2009 GDP forecast for India to 4.5 per cent from 5.1 per cent estimated earlier, said its fourth quarter (October-December 2009) outlook is 4.8 per cent.
On the coutry's slow growth in 2009, it said despite India's relatively low dependence on exports, the country will be particularly affected by the financial shock.
"... Because the strong investment growth in recent years owed much to favourable credit conditions. With external financing having tightened and the domestic credit cycle having turned, investment growth is expected to be severely curtailed, and so is GDP growth," IMF said.
The multilateral agency said the last quarter of the next year is also expected to be higher than the overall growth in the full year 2010.
According to IMF, India's GDP is expected to grow at 5.6 per cent in 2010, lower than prior projection of 6.5 per cent, and the view for the fourth quarter (Oct-Dec) of 2010 is 5.9 per cent.
US economy to grow later this year: Fed
US economy to grow later this year: Fed
The Times of India, May 6, 2009, Page 24
WASHINGTON: Federal Reserve chairman Ben Bernanke told Congress on Tuesday that the US economy should pull out of a recession and start growing again later this year. But in testimony to Congress Joint Economic Committee, Bernanke warned that even after a recovery gets under way, economic activity is likely to be subpar.
That means businesses will stay cautious about hiring, driving up the nations unemployment rate and causing "further sizable job losses" in the coming months, he said. The recession, which started in December 2007, already has snatched a net total of 5.1 million jobs. The unemployment rate "could remain high for a time, even after economic growth resumes," Bernanke said.
But while some economists believe unemployment could hit 10% by the end of this year, the Fed doesn’t share that view. The unemployment rate will probably climb "somewhere" in the 9% range, Bernanke said. "The loss of jobs is one of the most distressing aspects of this whole episode," he said. Even with all the cautionary notes, the Fed chief offered a far less dour assessment of the economy. "We continue to expect economic activity to bottom out, then to turn up later this year," he told lawmakers.
"We expect that the recovery will only gradually gain momentum." Recent data suggest the recession may be loosening its grip on the country, Bernanke said.
The Times of India, May 6, 2009, Page 24
WASHINGTON: Federal Reserve chairman Ben Bernanke told Congress on Tuesday that the US economy should pull out of a recession and start growing again later this year. But in testimony to Congress Joint Economic Committee, Bernanke warned that even after a recovery gets under way, economic activity is likely to be subpar.
That means businesses will stay cautious about hiring, driving up the nations unemployment rate and causing "further sizable job losses" in the coming months, he said. The recession, which started in December 2007, already has snatched a net total of 5.1 million jobs. The unemployment rate "could remain high for a time, even after economic growth resumes," Bernanke said.
But while some economists believe unemployment could hit 10% by the end of this year, the Fed doesn’t share that view. The unemployment rate will probably climb "somewhere" in the 9% range, Bernanke said. "The loss of jobs is one of the most distressing aspects of this whole episode," he said. Even with all the cautionary notes, the Fed chief offered a far less dour assessment of the economy. "We continue to expect economic activity to bottom out, then to turn up later this year," he told lawmakers.
"We expect that the recovery will only gradually gain momentum." Recent data suggest the recession may be loosening its grip on the country, Bernanke said.
Libor, RBI’s interest cheer for India Inc
Libor, RBI’s interest cheer for India Inc
The Economic Times, May 6, 2009, Page `1
Gaurav Pai MUMBAI
THE stock market cheerleaders have more reasons to rejoice. Global money markets are beginning to warm up to borrowers while banks in India are being left with little option but to lend.
For the first time, the three-month Libor (London inter-bank offered rate), an international benchmark interest rate used to price corporate loans, has slipped below 1%—an indication that banks are more willing to lend.
Corporate India may not only see its interest cost softening on all foreign loans, but could also find it easier to raise cheaper dollars to refinance the more expensive bridge loans that some companies took to fund ambitious acquisitions.
The global money market, which almost froze after the Lehman collapse, had turned risk-averse with bankers charging a hefty premium over Libor. This premium, better known as a spread over Libor, is now expected to narrow. Indian companies have borrowed more than $70 billion from overseas money markets in the past three years.
In a move that could also lower interest rates on rupee loans, the Reserve Bank of India on Tuesday announced that it would shut the second reverse repo window for accepting surplus fund from banks. With this, local banks would be forced to lend as much as Rs 40,000-50,000 crore. If they choose to invest the surplus money in government or corporate bonds, it would lead to plummeting yields on these papers.
From now on, RBI will conduct only one reverse repo in the morning while the afternoon reverse repo will be held only on reporting Fridays.
However, it’s the drop in Libor that could have a more far-reaching impact on financial markets that are being fuelled by trillions of dollars that central banks across the world have pumped in.
The Economic Times, May 6, 2009, Page `1
Gaurav Pai MUMBAI
THE stock market cheerleaders have more reasons to rejoice. Global money markets are beginning to warm up to borrowers while banks in India are being left with little option but to lend.
For the first time, the three-month Libor (London inter-bank offered rate), an international benchmark interest rate used to price corporate loans, has slipped below 1%—an indication that banks are more willing to lend.
Corporate India may not only see its interest cost softening on all foreign loans, but could also find it easier to raise cheaper dollars to refinance the more expensive bridge loans that some companies took to fund ambitious acquisitions.
The global money market, which almost froze after the Lehman collapse, had turned risk-averse with bankers charging a hefty premium over Libor. This premium, better known as a spread over Libor, is now expected to narrow. Indian companies have borrowed more than $70 billion from overseas money markets in the past three years.
In a move that could also lower interest rates on rupee loans, the Reserve Bank of India on Tuesday announced that it would shut the second reverse repo window for accepting surplus fund from banks. With this, local banks would be forced to lend as much as Rs 40,000-50,000 crore. If they choose to invest the surplus money in government or corporate bonds, it would lead to plummeting yields on these papers.
From now on, RBI will conduct only one reverse repo in the morning while the afternoon reverse repo will be held only on reporting Fridays.
However, it’s the drop in Libor that could have a more far-reaching impact on financial markets that are being fuelled by trillions of dollars that central banks across the world have pumped in.
Chief statistician counts on 8% growth patch
Chief statistician counts on 8% growth patch
The Economic Times, May 6, 2009, Page 11
PRONAB SEN SEES INVESTMENT, EXPORT & HARVEST LIFT
Anto Antony NEW DELHI
THE economy could fire on all cylinders and outgrow all projections for the current fiscal, be it the finance ministry’s 6% or the Reserve Bank of India’s 5.7%, or even the far more pessimistic estimates of the IMF.
According to Dr Pronab Sen, the country’s chief statistician, the economy could be back on a high growth trajectory earlier than expected and grow all of 8% in the current fiscal that started in April.
“I think that many of the estimates on growth that have come so far do not take into account many factors like the new investments in the pipeline, export orders which are showing signs of revival, a good harvest which will further boost already robust rural demand and the extra output from new oil and gas exploration fields such as the KG basin. We could achieve an 8% growth in the current fiscal,” said Dr Sen.
According to him, even though some of the projects might get shelved, the pipeline for new projects will remain robust. After growing at an average 8.5% plus for five consecutive years, the Indian economy is estimated to have grown at close to 6.7% in the fiscal ended last March.
Dr Sen’s thoughts on early signs of a revival in the Indian economy are in line with many leading indicators like Nomura’s Composite Leading Index and UBS Lead Economic Indicator. ABN AMRO purchasing manager’s index for April, released on Monday, showed India and China as two economies that expanded after months of contraction while the output index for six core sectors for March released last week showed a growth of 2.9%, the highest in the last six months. The Purchasing Manager’s Index for April had also shown an expansion in new export orders for the first time since last September.
However, exports from India have fallen for seven straight months starting October and saw their sharpest fall in March with a drop of 33%. According to Rajeev Kumar, director and CEO of Delhi-based think-tank Indian Council for Research in International Relations, even if global trade shrinks by 7-8%, India’s exports can achieve a healthy expansion once the government takes adequate measures to make Indian exports more competitive.
“The new export orders, which have begun to come in, may take anywhere from 3 weeks to 3 months to get reflected in the export data. From here on, the export sector could witness improvement,” Dr Sen explained. Bigger order books in domestic and overseas markets are expected to push the increase in purchases of industrial inputs, which will keep the sub zero inflation patch short. “At the maximum, the subzero inflation might last for a couple of weeks.”
According to Dr Sen, the rural story, which was the single leg on which growth in India withstood the global meltdown, will get better on robust growth in agriculture and allied services. “According to early indications, we may receive a better than expected harvest which will further boost the rural demand, which is already robust,” he added. Indeed, this will be the first time India will witness 4 continuous years of expansion in the last forty years.
Incidentally, International Monetary Fund and Organisation of Economic Co-operation and Development have the most pessimistic outlook for India’s growth in the current fiscal. They have pegged growth below 5%.
To this, Prime Minister’s economic advisory council chairman Suresh Tendulkar said ,”The psychology of gloom and doom have been imported into India without justification...an overly pessimistic view of the Indian economy is unwarranted .”
An unstable government could hurt, though. ”We might have to keep up public spending for the time being until private investment is back on full swing. For that, we need a strong and stable government at the Centre,” said the chief statistician
The Economic Times, May 6, 2009, Page 11
PRONAB SEN SEES INVESTMENT, EXPORT & HARVEST LIFT
Anto Antony NEW DELHI
THE economy could fire on all cylinders and outgrow all projections for the current fiscal, be it the finance ministry’s 6% or the Reserve Bank of India’s 5.7%, or even the far more pessimistic estimates of the IMF.
According to Dr Pronab Sen, the country’s chief statistician, the economy could be back on a high growth trajectory earlier than expected and grow all of 8% in the current fiscal that started in April.
“I think that many of the estimates on growth that have come so far do not take into account many factors like the new investments in the pipeline, export orders which are showing signs of revival, a good harvest which will further boost already robust rural demand and the extra output from new oil and gas exploration fields such as the KG basin. We could achieve an 8% growth in the current fiscal,” said Dr Sen.
According to him, even though some of the projects might get shelved, the pipeline for new projects will remain robust. After growing at an average 8.5% plus for five consecutive years, the Indian economy is estimated to have grown at close to 6.7% in the fiscal ended last March.
Dr Sen’s thoughts on early signs of a revival in the Indian economy are in line with many leading indicators like Nomura’s Composite Leading Index and UBS Lead Economic Indicator. ABN AMRO purchasing manager’s index for April, released on Monday, showed India and China as two economies that expanded after months of contraction while the output index for six core sectors for March released last week showed a growth of 2.9%, the highest in the last six months. The Purchasing Manager’s Index for April had also shown an expansion in new export orders for the first time since last September.
However, exports from India have fallen for seven straight months starting October and saw their sharpest fall in March with a drop of 33%. According to Rajeev Kumar, director and CEO of Delhi-based think-tank Indian Council for Research in International Relations, even if global trade shrinks by 7-8%, India’s exports can achieve a healthy expansion once the government takes adequate measures to make Indian exports more competitive.
“The new export orders, which have begun to come in, may take anywhere from 3 weeks to 3 months to get reflected in the export data. From here on, the export sector could witness improvement,” Dr Sen explained. Bigger order books in domestic and overseas markets are expected to push the increase in purchases of industrial inputs, which will keep the sub zero inflation patch short. “At the maximum, the subzero inflation might last for a couple of weeks.”
According to Dr Sen, the rural story, which was the single leg on which growth in India withstood the global meltdown, will get better on robust growth in agriculture and allied services. “According to early indications, we may receive a better than expected harvest which will further boost the rural demand, which is already robust,” he added. Indeed, this will be the first time India will witness 4 continuous years of expansion in the last forty years.
Incidentally, International Monetary Fund and Organisation of Economic Co-operation and Development have the most pessimistic outlook for India’s growth in the current fiscal. They have pegged growth below 5%.
To this, Prime Minister’s economic advisory council chairman Suresh Tendulkar said ,”The psychology of gloom and doom have been imported into India without justification...an overly pessimistic view of the Indian economy is unwarranted .”
An unstable government could hurt, though. ”We might have to keep up public spending for the time being until private investment is back on full swing. For that, we need a strong and stable government at the Centre,” said the chief statistician
OBAMA HITS IT HARD | US TAX PLANS TO BITE INDIA INC
OBAMA HITS IT HARD US TAX PLANS TO BITE INDIA INC
The Economic Times, May 6, 2009, Page `1
Expansion drive of US firms with captive ops may take a knock
Our Bureaus BANGALORE NEW DELHI MUMBAI
A day after US President Barack Obama said his administration would end tax breaks for American companies expanding their overseas operations, several US multinational firms and Indian outsourcing companies expressed concerns about any potential legislation aimed at curbing offshoring of IT and back-office projects to countries such as India.
While companies such as TCS, Wipro and Infosys are preparing to cope with anti-offshoring sentiments gaining momentum in the US—the world’s biggest market for software services—executives at large US firms with captive operations said ending tax-deferral could impact their expansion plans.
India’s second-biggest software exporter Infosys, which serves customers such as American Express and Bank of America, said it is monitoring the situation. “Right now, I do not see any impact on our business,” Infosys CEO S Gopalakrishnan told ET on Tuesday.
But President Obama’s reference to Bangalore in his speech has made the IT industry nervous. Mr Obama on Monday said his administration wanted to fix the loopholes in the country’s tax systems. “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” he said.
A top executive of an Indian IT company said the US president’s utterances will impact sentiment and ‘vitiate the atmosphere’. His statement on Monday is the latest in a series of remarks he has made against outsourcing and job losses in the US from the time he began his presidential campaign almost two years ago.
US companies have to pay almost 35% corporate tax on income generated in the country. “Under current laws, companies don’t pay taxes to the US government on income earned abroad until they bring the money back to their country. President Obama wants to reform this part of the law (which is called “deferral”) ,” Rosanne Altshuler, a Rutgers University economist specialising in international taxation, told ET in an interview last month.
AMERICA FIRST
Top US firms, including Citigroup, derive over half their revenues from overseas markets
By taxing foreign earnings of US firms, Obama wants to discourage offshoring of jobs
New tax will help US raise $210 b in tax revenues over next few years
Companies such as Citi, JPMorgan & GE outsource work to India not to evade taxes but leverage cost advantages
Back-office IT projects can be done at half of US costs in India
Captives in India export back-office projects worth $4.8 b annually
The Economic Times, May 6, 2009, Page `1
Expansion drive of US firms with captive ops may take a knock
Our Bureaus BANGALORE NEW DELHI MUMBAI
A day after US President Barack Obama said his administration would end tax breaks for American companies expanding their overseas operations, several US multinational firms and Indian outsourcing companies expressed concerns about any potential legislation aimed at curbing offshoring of IT and back-office projects to countries such as India.
While companies such as TCS, Wipro and Infosys are preparing to cope with anti-offshoring sentiments gaining momentum in the US—the world’s biggest market for software services—executives at large US firms with captive operations said ending tax-deferral could impact their expansion plans.
India’s second-biggest software exporter Infosys, which serves customers such as American Express and Bank of America, said it is monitoring the situation. “Right now, I do not see any impact on our business,” Infosys CEO S Gopalakrishnan told ET on Tuesday.
But President Obama’s reference to Bangalore in his speech has made the IT industry nervous. Mr Obama on Monday said his administration wanted to fix the loopholes in the country’s tax systems. “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” he said.
A top executive of an Indian IT company said the US president’s utterances will impact sentiment and ‘vitiate the atmosphere’. His statement on Monday is the latest in a series of remarks he has made against outsourcing and job losses in the US from the time he began his presidential campaign almost two years ago.
US companies have to pay almost 35% corporate tax on income generated in the country. “Under current laws, companies don’t pay taxes to the US government on income earned abroad until they bring the money back to their country. President Obama wants to reform this part of the law (which is called “deferral”) ,” Rosanne Altshuler, a Rutgers University economist specialising in international taxation, told ET in an interview last month.
AMERICA FIRST
Top US firms, including Citigroup, derive over half their revenues from overseas markets
By taxing foreign earnings of US firms, Obama wants to discourage offshoring of jobs
New tax will help US raise $210 b in tax revenues over next few years
Companies such as Citi, JPMorgan & GE outsource work to India not to evade taxes but leverage cost advantages
Back-office IT projects can be done at half of US costs in India
Captives in India export back-office projects worth $4.8 b annually
Realty rally surprises analysts
Realty rally surprises analysts
The Hindu Business Line, May 6, 2009, Page 10
Indiabulls Real Estate says preferential warrants to promoters have lapsed.
Our Bureau, Mumbai
Realty stocks continued their upward journey on Tuesday as the sectoral index on the BSE surged 8.45 per cent even when the Sensex ended on a flat note.
In the last month the BSE realty index has gained more than 35 per cent. The Sensex gained by 17 per cent during this period.
Analysts said they were clueless as to why exactly the realty share prices are on the rise. “It is rather difficult to guess. The fundamentals have not changed to that great an extent and the fourth quarter results of the listed real estate companies have been rather dismal,” said Mr Shailesh Kanani, Real Estate and Infrastructure Analyst at Angel Broking.
Investors probably feel that as these stocks have already plummeted 90-95 per cent, it cannot go down any further, he added.
Until a few months ago most of these stocks were trading at a 90 per cent discount from their 52-week highs. Investors may have seen some inherent value in these stocks, said Mr Hardeep Dayal, Managing Director (realty and infrastructure) at Centrum Capital.
During the second half of the last calendar year most of the realty stocks were trading below their IPO prices.
High beta stocks
“The realty stocks are high beta stocks, which is another reason for their rise,” said a realty analyst. High-beta securities fluctuate a lot more than the market index
Another analyst said while last year these companies were trading at bankruptcy levels and most people expected them to go bust, the companies have still survived: “Some investors may take this as a positive.”
Mr Dayal said positive reports coming in from the mid-market and affordable housing segments could be another boost for this sector. This segment has seen a little bit of pick-up in volumes as the pricing is very competitive.
Debt Rejig
Another reason could be that some of these companies have been able to raise money.
Unitech was able to rejig quite a bit of its debt to infuse liquidity into the company. “Liquidity is the main problem faced by these companies and if they are able to get it (money), then it will be a completely different ball game for the real estate companies,” said Mr Kanani.
Anant Raj, Ansal Infrastructure, DLF, HDIL, Peninsula Land and Unitech are the stocks that have gained between 28 per cent and 70 per cent in the last month.
Indiabulls Real Estate said the preferential warrants (which would have worked out to Rs 2,322 crore) allotted to its promoters and top officials have lapsed.
The allotment of 4.3 crore warrants (convertible at Rs 540 each) had been made on November 5, 2007, the company said in a filing to the BSE.
On Tuesday Indiabulls closed at Rs 139.65 a share on the BSE.
Ten per cent upfront money was paid, according to regulations, at the time of allotment of the warrants. The warrant holders were entitled to apply for and obtain allotment of one equity share of the face value Rs 2 each fully paid-up of the company upon payment of exercise price of Rs 540 a warrant, against each warrant held.
The last date for exercise of such right was May 4.
The Hindu Business Line, May 6, 2009, Page 10
Indiabulls Real Estate says preferential warrants to promoters have lapsed.
Our Bureau, Mumbai
Realty stocks continued their upward journey on Tuesday as the sectoral index on the BSE surged 8.45 per cent even when the Sensex ended on a flat note.
In the last month the BSE realty index has gained more than 35 per cent. The Sensex gained by 17 per cent during this period.
Analysts said they were clueless as to why exactly the realty share prices are on the rise. “It is rather difficult to guess. The fundamentals have not changed to that great an extent and the fourth quarter results of the listed real estate companies have been rather dismal,” said Mr Shailesh Kanani, Real Estate and Infrastructure Analyst at Angel Broking.
Investors probably feel that as these stocks have already plummeted 90-95 per cent, it cannot go down any further, he added.
Until a few months ago most of these stocks were trading at a 90 per cent discount from their 52-week highs. Investors may have seen some inherent value in these stocks, said Mr Hardeep Dayal, Managing Director (realty and infrastructure) at Centrum Capital.
During the second half of the last calendar year most of the realty stocks were trading below their IPO prices.
High beta stocks
“The realty stocks are high beta stocks, which is another reason for their rise,” said a realty analyst. High-beta securities fluctuate a lot more than the market index
Another analyst said while last year these companies were trading at bankruptcy levels and most people expected them to go bust, the companies have still survived: “Some investors may take this as a positive.”
Mr Dayal said positive reports coming in from the mid-market and affordable housing segments could be another boost for this sector. This segment has seen a little bit of pick-up in volumes as the pricing is very competitive.
Debt Rejig
Another reason could be that some of these companies have been able to raise money.
Unitech was able to rejig quite a bit of its debt to infuse liquidity into the company. “Liquidity is the main problem faced by these companies and if they are able to get it (money), then it will be a completely different ball game for the real estate companies,” said Mr Kanani.
Anant Raj, Ansal Infrastructure, DLF, HDIL, Peninsula Land and Unitech are the stocks that have gained between 28 per cent and 70 per cent in the last month.
Indiabulls Real Estate said the preferential warrants (which would have worked out to Rs 2,322 crore) allotted to its promoters and top officials have lapsed.
The allotment of 4.3 crore warrants (convertible at Rs 540 each) had been made on November 5, 2007, the company said in a filing to the BSE.
On Tuesday Indiabulls closed at Rs 139.65 a share on the BSE.
Ten per cent upfront money was paid, according to regulations, at the time of allotment of the warrants. The warrant holders were entitled to apply for and obtain allotment of one equity share of the face value Rs 2 each fully paid-up of the company upon payment of exercise price of Rs 540 a warrant, against each warrant held.
The last date for exercise of such right was May 4.
As utilisation peaks, cement cos see stable prices from June
As utilisation peaks, cement cos see stable prices from June
The Financial Express, Corporates & Markets, May 6, 2009, Page 1
Smita Joshi Saha, Mumbai
With capacity utilisation at its peak, the 212 million-tonne Indian cement industry expects prices to stabilise from June.
Cement players, with whom FE spoke to, said they don’t expect any immediate rise in prices and are looking at maintaining the current rates.
S Chouksey, wholetime director of JK Lakshmi Cement, said, “I don’t see any immediate rise in cement prices. We had tried to maximise our despatches and also postponed our normal plant maintenance shut down to meet the increased demand in the last quarter. However, we will now be going ahead with our mandatory plant shutdown. The industry will face an oversupply situation with more stock coming in from June-July,” he added.
Vinod Juneja, managing director of Binani Cement, also confirmed that the company would currently look at maintaining its prices.
Meanwhile ACC Ltd, the country’s largest cement producer, had also said it has not increased prices in Delhi since April 1 and has no plans to raise cement prices further in the city.
The company, however, remained silent on price movements in rest of the country.
An e-mail query on the company’s price decision on the remaining markets did not elicit any response.
With large capacity additions expected in the next two quarters, cement manufacturers anticipate an oversupply situation along with a fall in demand.
J Datta Gupta, chief commercial officer of ACC Ltd, had said in a statement, “Cement prices vary from location to location, and depend on the demand-supply balance. With large capacity additions expected in the next two quarters, it is expected that the prices will stabilise from July.”
Cement dispatches have grown 8-10% in the last five successive months and prices were hiked several times during quarter January-March, taking the average cement price higher by Rs 8-10/bag.
Meanwhile, Fitch, in its industrial sectoral outlook, said, along with the slowdown in demand, capacity additions have increased, negatively affecting the operating rates for producers. However, infrastructure spending of the government and upcoming Commonwealth Games would largely benefit players.
The Financial Express, Corporates & Markets, May 6, 2009, Page 1
Smita Joshi Saha, Mumbai
With capacity utilisation at its peak, the 212 million-tonne Indian cement industry expects prices to stabilise from June.
Cement players, with whom FE spoke to, said they don’t expect any immediate rise in prices and are looking at maintaining the current rates.
S Chouksey, wholetime director of JK Lakshmi Cement, said, “I don’t see any immediate rise in cement prices. We had tried to maximise our despatches and also postponed our normal plant maintenance shut down to meet the increased demand in the last quarter. However, we will now be going ahead with our mandatory plant shutdown. The industry will face an oversupply situation with more stock coming in from June-July,” he added.
Vinod Juneja, managing director of Binani Cement, also confirmed that the company would currently look at maintaining its prices.
Meanwhile ACC Ltd, the country’s largest cement producer, had also said it has not increased prices in Delhi since April 1 and has no plans to raise cement prices further in the city.
The company, however, remained silent on price movements in rest of the country.
An e-mail query on the company’s price decision on the remaining markets did not elicit any response.
With large capacity additions expected in the next two quarters, cement manufacturers anticipate an oversupply situation along with a fall in demand.
J Datta Gupta, chief commercial officer of ACC Ltd, had said in a statement, “Cement prices vary from location to location, and depend on the demand-supply balance. With large capacity additions expected in the next two quarters, it is expected that the prices will stabilise from July.”
Cement dispatches have grown 8-10% in the last five successive months and prices were hiked several times during quarter January-March, taking the average cement price higher by Rs 8-10/bag.
Meanwhile, Fitch, in its industrial sectoral outlook, said, along with the slowdown in demand, capacity additions have increased, negatively affecting the operating rates for producers. However, infrastructure spending of the government and upcoming Commonwealth Games would largely benefit players.
Sobha Developers to raise Rs 750 cr
Sobha Developers to raise Rs 750 cr
Business Standard, May 6, 2009, Page 4
Sobha Developers Ltd. said on Monday it would raise additional capital of up to Rs. 750 crore and increase investment limit for foreign institution investors to 100 per cent of equity. - Reuters
Business Standard, May 6, 2009, Page 4
Sobha Developers Ltd. said on Monday it would raise additional capital of up to Rs. 750 crore and increase investment limit for foreign institution investors to 100 per cent of equity. - Reuters
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