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Economy News
4 The global steel production in July rose by 11.5% to 127 million tonne over the same month last year, the World Steel Association (WSA) said. India's contribution to the world's kitty was nearly 5% or 6.16 million tonne. This is, however, an increase of 6.3% from 5.79 million tonne recorded in the same month last year. (BS) 4 Suggesting strong measures to track black money, accounting regulator the Institute of Chartered Accountants of India (ICAI) said new foreign banks should be granted licences only if they agree to furnish details on "investment made by Indian people outside India". Apart from this, the ICAI also pitched for making it compulsory for revealing the source of funds of foreign donations coming into India to prevent money laundering. (BS) 4 Most of the developed nations witnessed slowing economic activities in the June quarter, latest OECD data showed indicating that the global economy is heading towards slowdown. The overall GDP in the OECD region, a grouping of mostly industrialised nations, slipped to 0.2% in three months ended June 2011 -- a decline in growth for the fourth consecutive quarter. (BS) 4 One of the major assumptions that helped the Planning Commission project an ambitious 9 per cent growth in the gross domestic product over the next five years is an improving energy elasticity of the economy. But this assumption, which forms a vital base for the government's approach paper for the 12th Five-Year Plan, could be misplaced, experts believe. (BS)
Equity
22 Aug 11 Indian Indices SENSEX Index NIFTY Index BANKEX Index BSET Index BSETCG INDEX BSEOIL INDEX CNXMcap Index BSESMCAP INDEX World Indices Dow Jones Nasdaq FTSE NIKKEI HANGSENG 16,342 4,899 10,749 4,710 11,724 8,357 7,239 7,113 10,855 2,345 5,095 8,628 19,487
% Chg 1 Day 1 Mth 3 Mths 1.2 1.1 (0.1) (0.6) 1.6 2.5 1.5 1.5 0.3 0.2 1.1 (1.0) 0.4 (12.7) (13.0) (16.7) (20.6) (14.5) (9.1) (11.2) (16.0) (14.4) (18.0) (14.1) (14.8) (13.5) (9.2) (9.1) (9.0) (21.7) (8.5) (9.2) (6.9) (11.7) (12.3) (15.0) (12.7) (8.7) (14.5)
Corporate News
4 India's largest real estate developer, DLF, plans to reduce its debt by Rs 25-30 Bn by the end of this financial year, according to group executive director Rajeev Talwar. The company aims to cut debt through the divestment of non-core assets, including hotels and plots of land that cannot be developed in the next five years . (BS) 4 JSW Ispat Ltd has completed the Rs 60 Bn debt refinancing deal. A source close to the development confirmed the new average interest rate for the refinance is 11.75 per cent, lower than the earlier rates. (BS) 4 Hyderabad-based GVK Power & Infrastructure is all set to become the single largest shareholder of Bangalore International Airport. The company said it was paying Rs. 114 for each equity share to Siemens Project Ventures to buy the latter's 14 per cent stake in Bangalore International Airport Ltd. The company, which also runs Mumbai International Airport, will pay close to Rs. 6.14 Bn, valuing the Bangalore project at almost Rs 44.4 Bn. (BS) 4 BL Bagra, chairman and managing director of National Aluminium Company (Nalco), said the aluminium major does not need to tap the markets in the next three years for expansion, but it is up to the government to take a call on disinvesting its stake in the company. The government, with 87.15% holding in Nalco, has put the company on its disinvestment radar during the current fiscal. (BS) 4 The downturn in global markets has taken a toll on Essar Oil's plans to raise $1.5 billion in foreign currency loans to finance its expansion plans and forced the company to look for options in a difficult environment. (ET)
Commodity
% Chg
22 Aug 11 1 Day 1 Mth 3 Mths
84.6
1,887.5 43.4
Sensex
21,100 19,400 17,700 16,000 Aug-10
Source: ET = Economic Times, BS = Business Standard, FE = Financial Express, BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange
Nov-10
Feb-11
May-11
Aug-11
MORNING INSIGHT
SECTOR UPDATE
Sanjeev Zarbade sanjeev.zarbade@kotak.com +91 22 6621 6305 Ruchir Khare ruchir.khare@kotak.com +91 22 6621 6448
Source: Bloomberg
MORNING INSIGHT
EBITDA
(%) Havells India Bajaj Electricals Crompton Greaves V-Guard Industries Khaitan Electricals IFB Industries
Source: Company
MORNING INSIGHT
Recommendation
In the universe of consumer durable companies under our coverage, we prefer Bajaj Electricals, Havells India and Voltas. n Voltas - Well entrenched position in domestic and Middle East markets. Unleveraged balance sheet and attractive valuations at 12.2x FY12 earnings. Target price of Rs 171. n Bajaj Electricals - We recommend Bajaj Electricals for being the direct play on the domestic market. Company has a pan India presence and enjoys dominating position in its key geographies. PEx at current price11.4, TP: Rs.285. n Havells - We also prefer Havells India for being geographically diversified player in the consumer appliances space. Company enjoys strong brand positioning in north and east India and is constantly gaining ground in the western region as well. Havells has successfully aligned the operations of its key subsidiary Sylvania in last two years. PEx at current price13, TP: Rs.410.
MORNING INSIGHT
Bulk deals
22-Aug Birla Pacific Med Gagan Ashok Kumar Khemka 22-Aug Birla Pacific Med Spark Finwiz Pvt Ltd 22-Aug Birla Pacific Med Jalan Cement Works Ltd 22-Aug Gammon India 22-Aug Gammon India 22-Aug Indiabulls Real 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Krishna Deep 22-Aug Midland Poly 22-Aug Midland Poly 22-Aug Midland Poly 22-Aug Polytex India 22-Aug Sheetal Diam 22-Aug Sheetal Diam 22-Aug Sungold Cap 22-Aug Suryalakshmi 22-Aug Suryalakshmi 22-Aug Vas Infra 22-Aug Vas Infra
Source: BSE
Ambit Capital Pvt Ltd (Prop) Macquarie Bank Ltd Sudhir Credit Pvt Ltd Sai Kanaka Mahalakshmi Finance Tanisha Business Pvt Ltd Parkin Marketing Pvt Ltd Falcon Holdings P Ltd Shiv Sharma Chandra Gupta Brijmohan Chandulal Alka Lakhotia Krishan Kumar Jora Kiran Bhiku Bhanaes Arun Dashrathbhai Prajapati Pankaj Vinod Shah Vijaybhai Kanubhai Thakor Vinodchandra Mansukhlal Parekh Teck Consultancy & Services Sanjay Balkrishna Bane Kaizen Stoktrade Pvt Ltd
MORNING INSIGHT
chg (%)
Index points
Volume (mn)
Research Team
Dipen Shah IT, Media dipen.shah@kotak.com +91 22 6621 6301 Sanjeev Zarbade Capital Goods, Engineering sanjeev.zarbade@kotak.com +91 22 6621 6305 Teena Virmani Construction, Cement, Mid Cap teena.virmani@kotak.com +91 22 6621 6302 Saurabh Agrawal Metals, Mining agrawal.saurabh@kotak.com +91 22 6621 6309 Saday Sinha Banking, NBFC, Economy saday.sinha@kotak.com +91 22 6621 6312 Arun Agarwal Automobiles arun.agarwal@kotak.com +91 22 6621 6143 Ruchir Khare Capital Goods, Engineering ruchir.khare@kotak.com +91 22 6621 6448 Ritwik Rai FMCG, Media ritwik.rai@kotak.com +91 22 6621 6310 Sumit Pokharna Oil and Gas sumit.pokharna@kotak.com +91 22 6621 6313 Amit Agarwal Logistics, Transportation agarwal.amit@kotak.com +91 22 6621 6222 Jayesh Kumar Economy kumar.jayesh@kotak.com +91 22 6652 9172 Shrikant Chouhan Technical analyst shrikant.chouhan@kotak.com +91 22 6621 6360 K. Kathirvelu Production k.kathirvelu@kotak.com +91 22 6621 6311
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