India Morning Report: 2G Auctions (discounted), Gas Price rise, Markets expiry and CAD data

The markets expiry should probably read F&O exiry but that is just here nor there. CAD(Current Account Deficit) data is as 3.6% of GDP is a very good score with a $17 B surplus admittedly par for the course for Jan — March quarter. Crude basket pricing has gone down to $101 for the year but still leaves a 6% bill hike for the OMCs and oilcos to distribute The resultant price increases if any including the known rise in Gas prices would not exert price pressures on the economy given new inflation levels either. Together that means that if there were buyers for the Rupee they would win. Obviously given the debilitation market punters have handed rupee trade in the imediate three weeks with the exit of INR 200 bln in FII debt positions, the cash positions re lower except at the Reserve Bank which managed to add a few dollars ($2.4 B) to the reserve before getting engulfed by the waterboarding slide uncovered by Ben Bernanke.

So musch for the Rupee and oil. The banks and telcos seem well poised for a recovery though as spectrum buys or no spectrum buys, there is great values at 280 levels in bharti and in RelComm though we never backed the scrip or even Jio infocomm as of now given the Ambani track record and obvious imposition of informal network values on bare minimum corporate governance and a resultant pathetic track record except in petrochem

US will allow more LNG imports to India while the Coal and power situation has also started improving. Chinese increases in consumption are sporadic and are being run by import consumption however in the riorities for the new government and so the US SED with Inia continues to be bland and almost inconsequential to India, a moot question most interested people between 18-40 ( and those just out of that range like us ) significantly continue to question as a fallout of the so called successful reforms since 1991

The rest, once i find a paying sponsor or a working proposition for the second career I start in my 40s

Markets have opened at 5650 and may make a close for expiry around 5700 around the 2:30 m bell though the close per se may find shorts active in that case, as they look at a longer innings in the july series against the virtual non representation in Jun


THE INDIA BUDGET 2012: Banking for All, Infrastructure and Industrial Development

70,000 habitations have been covered successfully in Swabhimaan. to be extended to all habitations of Pop>1000 in NE and hilly states and Pop>2000 else where

PPP investment reliance to continue , INR250 bln of INR 500 bln expected from Private Sector. Irrigation,

61 [the big mac index]

Dams, Fertilisers , Oil &Gas, LNG Storage, Telecom Towers and Eqpt all added to list of items for Viability Gap Funding of ProjectsSelf Reliance in the Defence Sector

Reaction: Where will the money come from

INR 100 bln for NHAI, and IRDL, INR 100 BLN for Power Sector and INR 50 Bln for Small sscale and other institutions

Propose INR 600 bln of infrastructure Bonds

IIFCL – Credit Enhancements and Takeout Finance provision, PPP projects.

NMP for 10 crore Jobs and 25% of GDP contribution

Reaction: Pie in the sky

Some longwinded comment on Coal provision, FM hurriyng thru. Power impact missed by this blog/spreadsheet

MoST to award 7000 kms under NHDP , 40% higher from 5000 kms last year

PPP in Road construction

FDI of 50% in Air Transport and MRO under active consideration

Central Assistance on INR 185 bln and Japanese $4.5 bln  for DMIC projects

National Housing Fund to INR 40 bln. Interest subvention of 1% extended for affordable housing

Midcap Select: Opto Circuit, Adani Ent


Opto got a first device FDA approval in the USA thrui its Cardiac Science Corp subsidiary. It can now invest in marketing of its retail Wearable Holter Cardiac Monitors


Apart from being close to outbid on the LNG unit in Gujarat Gas (65% stake + 26% open offer = 91.5% of $1

A Meghwal woman in the Hodka village, north of...
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bln+ Valn premium on sale) Adani also commissioned a largest of its kind 40 MW solar plant in Kutch in less than 6 months. Kutch is on the northwest coast of India in Gujarat, also where Adani’s port and Tata’s Mundra power plant are located.

The RE60, the 1.4 mln Akash Tablets and another LNG unit

The Bajaj auto effort to showcase the 3 wheeler market is an honest and probably remunerative strategy to capture latent non markets for consumer goods and durables in India as most categories have less than 50% attributable to brands and we have npot progressed beyongd the first few gains for brands last heard in the nineties.

In the meantime Datawind is reaping gains of consumers realisign their world ahs changed with more than amillion $35 tablets ordered. Blackberry sold 7000 of its tables it two days after it brough tprices to $200 closer to its international rates and half of its offer price earlier. Datawind is expanding to four mfg plants adding Noida, Kochi and Hyderabad 2 to its one plant in Hyderabad right now.

Meanwhile, the younger Ambani still has traction left in public and power infrastructure play Reliance Power,

Ambani's palace behind the hanging garden's
Image by xnmeme via Flickr

while its other flagship infra and telecom plays are losing investor confidence. East coast gets its first LNG storage plant at Samalkot, near Rpower’s own gas power project. The LNG facility in partnership with shell will cater to 7GW of power generation capacity in the area including GVK power

Zuari has a JV with Mitsubishi in Singapore, the same being used as vehicle to buy both a Fert unit in Peru from Fospac for $46.1 mln. Whatever happened to our post Airtell/ ONGC foray out in Africa and Latam!!!

Almost all from pg5 of today’s ET

Reliance losing in brand games and policy

Reliance’s gas pricing quandary continues with warehouse owner IGL retailing gas at up to $15 and Reliance following its earlier efforts at increasing its $4.2 supply rates to PSE Oil companies with a suit against the government asking it to pay more for the gas purportedly using the IGL model for itself even as a distribution supplier and not a retail distco like IGL or Petronet LNG

Reliance has failed on maost strategic fronts except in greenfield consumer and sports ventures like the Mumbai Indians team franchise , co branded cards etc where it has yet to begin or dowes not pull significant revenue compared to the Oil brand. Reliance has been almost synonymour with petrochemicals and oil enterprise int he country away from issues of subsidy and government benefaction for a decade or so, with Petro margins and oil and gas discoveries keeping markets happy,. Its last 2 years in the dust have been tough for Indian markets as a whole and there still might be a significant correlation thouhg not an over arching one between its and Brand India’s fortunes.

Reliance I would like to believe has frittered away the market’s dull times in continuing to expect largesse and

Mumbai Indians
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“sympathetic understanding” from public sources and markets. Its consumer brands are in no position to claim leadership and thus have no significant launches to their name. Its LTE venture is  working out a smashing deal at 10X the 3G industry’s competition and while ADA group has not done nay better either, it has at least delivered on time in long gestation projects which others would not even take up including the Power sector where delays and “non performance” are more understandable. Mukesh’s Reliance has not aggressively moved in infrastructure because it knew that investors would not empathise with the “long run” financing requirements of the sector but still, its alternative plans are almost in a state of a “null” ennui without response or favor it so much loves in its dinner plate.

There are no loyal investors left onthe Reliance bandwagon and they have to move fast before the M&M’s and the JP ‘s take over fromt hem with 1/10th the capitalisation and a much larger understanding of the current market and who it can be argued worked with almost the same handicaps and invested in unforgiving propositions

Also ADA’s failures in the financial services area could be a thing of the past soon when even they can look at aggressive growth again, leaving big brother with no work or profits on hand

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