By Rakteem Katakey - Jul 8, 2011
Reliance Industries Ltd. (RIL) may lift natural gas output at India’s biggest deposit after two years as it awaits ships that will connect deepwater wells drilled this year to pipelines, a person with knowledge of the matter said.
The ships are booked and may become available for use at the KG-D6 block in 2013, the person said, asking not to be identified because he isn’t allowed to speak to the media. The Mumbai-based explorer plans to drill 11 wells this year to raise output at the KG-D6 block, the person said.
Reliance, India’s biggest company by market value, may win government approval next week to sell stakes in oil and gas blocks to BP Plc (BP/) and benefit from the London-based company’s technology and expertise in drilling and production in offshore areas. Reliance’s profit grew at the slowest pace in six quarters in the three months ended March 31 after production from KG-D6 declined because of technical difficulties.
“Two years of below-capacity production is a worry,” said Alok Deshpande, a Mumbai-based analyst at Elara Securities Ltd., who has an “accumulate” rating on Reliance. “Exploration and production was the major attraction for investors. That trigger is missing now.”
Manoj Warrier, a spokesman for Reliance, didn’t answer two calls to his mobile phone seeking comment.
Reliance currently produces about 48 million cubic meters of gas a day from the D1, D3 and MA areas of the block, located off India’s east coast, from about 60 million cubic meters a year earlier, the person said.
Drilling Commitment
The company last month submitted a plan to drill three wells in the block and has a commitment to dig eight more in the year ending March 31, the person said.
Reliance declined 1.8 percent to 854.85 rupees at the close of trading in Mumbai. The stock has fallen 19 percent this year compared with an 8.1 percent decrease in the benchmark Sensitive Index.
Morgan Stanley cut the stock to “equal-weight” from “overweight” today and lowered the price target by 20 percent to 956 rupees because of the absence of any positive triggers in the short term, according to its report. The bank cut its KG-D6 output forecast to 47 million cubic meters a day from 50 million.
Reliance sells gas to power plants and fertilizer units at $4.2 per million British thermal units, a price set by the government and scheduled for revision in April 2014.
Drilling rigs used in the Asia-Pacific region fell to 255 on land and sea in May from 268 a year earlier, Baker Hughes Inc., an oilfield services company, said on its website. Rigs in operation climbed to a 26-year high of 286 in January.
To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Friday, July 8, 2011
Thursday, July 7, 2011
Asian Stocks Advance for Third Week as U.S. Hiring, Retail Sales Improve
By Anna Kitanaka - Jul 7, 2011
Asian stocks rose, driving the benchmark index higher for a third week, as increasing U.S. retail sales and employment boosted confidence in the strength of the global economic recovery.
Toyota Motor Corp., the world’s biggest carmaker by market value, rose 1.9 percent in Tokyo. BHP Billiton Ltd., the world’s No. 1 mining company by market value, advanced 1.2 percent after oil prices gained on optimism fuel demand will increase in the U.S. Shinhan Financial Group Co. dropped 3.3 percent in Seoul after a term sheet showed that Korea Deposit Insurance Corp. is selling 2.9 million shares in the company.
The MSCI Asia Pacific Index increased 0.8 percent to 138.38 as of 11:25 a.m. in Tokyo, driving the measure toward a 2.1 percent gain this week, its third consecutive weekly jump. About three shares rose for each that fell on the 1,018-member gauge. All 10 industry groups advanced.
“The global recovery is still on foot,” said Prasad Patkar, who helps manage about $1.7 billion at Platypus Asset Management. “There was a little concern about the U.S. a couple of months ago, but that seems to be working its way through. It looks like there’s a reasonably healthy demand outlook for Asian exporters.”
Japan’s Nikkei 225 (NKY) Stock Average rose 1 percent after the nation’s Finance Ministry said the current-account surplus in May narrowed less than economists forecast. South Korea’s Kospi index rose was little changed in Seoul while Australia’s S&P/ASX 200 Index added 1 percent in Sydney.
U.S. Jobs Grow
Hong Kong’s Hang Seng index increased 1.1 percent, while China’s Shanghai Composite index fell 0.2 percent.
Futures on the Standard & Poor’s 500 Index were unchanged today. The S&P gained 1.1 percent yesterday to close at its highest level since May 10 after a report by ADP Employer Services showed U.S. companies added more jobs than forecast in June.
Consumer discretionary shares, led by Japanese exporters such as Toyota and Honda Motor Co., advanced 1 percent, the second-most among the 10 industry groups on the MSCI Asia Pacific Index.
Toyota, which receives 27 percent of its revenue from North America, rose 1.9 percent to 3,465 yen, the biggest boost to the MSCI Asia Pacific Index. Honda, which counts North America as its largest market, advanced 1.4 percent to 3,260 yen. Canon Inc., the world’s No. 1 camera maker by market value, rose 2 percent to 3,925 yen.
Adding Payrolls
Investor optimism was bolstered after a report that companies in the U.S. added 157,000 workers to their payrolls last month, compared with a 36,000 gain in May, according to ADP Employer Services. The median forecast in a Bloomberg News survey was for 70,000 extra jobs. Also, retail sales reports indicated shoppers took advantage of discounting in June to clear inventory.
“U.S. jobs rebounded in June after slumping in May because of the impact on the car industry from Japan’s earthquake,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “The job data shows the drop was temporary.”
Energy producers posted the biggest increase on the MSCI Asia Pacific Index after oil prices traded near the highest level in three weeks, and a gauge of metal prices rose in London.
Energy Producers Jump
BHP advanced 1.2 percent to A$44.97, the second-biggest drive to the MSCI Asia Pacific Index’s advance. Rio Tinto Group, the world’s second-largest mining company by sales, climbed 1.1 percent to A$84.48. PetroChina Co., China’s No. 1 oil and gas producer by market value, rose 1.7 percent to HK$11.72.
Energy stocks advanced as crude oil for August delivery rose as much as 0.3 percent to $98.97 a barrel in New York, after climbing yesterday to $98.67, the highest settlement since June 14. The London Metal Exchange Index of prices for six metals including copper and aluminum increased 2 percent yesterday to its highest level since May 3.
Shinhan Financial, the biggest drag on the MSCI Asia Pacific Index, slumped 3.3 percent to 50,300 won in Seoul. State-run Korea Deposit Insurance Corp. sold 2.9 million Shinhan Financial shares for 51,000 won each today before the start of trading, according to an e-mailed statement today.
Li Ning Co., which designs and makes sportswear in China, dropped 7.6 percent to HK$10.66, the biggest decline on the MSCI Asia Pacific Index. The company’s share price target was reduced by DBS Group Holdings Ltd., Mizuho Financial Group Inc. and United Overseas Bank Ltd. after the company said yesterday it expects first-half sales and profit margin to decline.
The MSCI Asia Pacific Index lost 0.3 percent this year through yesterday, compared with a gain of 7.6 percent by the S&P and an increase of less than 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.9 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.2 times for the Stoxx 600.
To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Asian stocks rose, driving the benchmark index higher for a third week, as increasing U.S. retail sales and employment boosted confidence in the strength of the global economic recovery.
Toyota Motor Corp., the world’s biggest carmaker by market value, rose 1.9 percent in Tokyo. BHP Billiton Ltd., the world’s No. 1 mining company by market value, advanced 1.2 percent after oil prices gained on optimism fuel demand will increase in the U.S. Shinhan Financial Group Co. dropped 3.3 percent in Seoul after a term sheet showed that Korea Deposit Insurance Corp. is selling 2.9 million shares in the company.
The MSCI Asia Pacific Index increased 0.8 percent to 138.38 as of 11:25 a.m. in Tokyo, driving the measure toward a 2.1 percent gain this week, its third consecutive weekly jump. About three shares rose for each that fell on the 1,018-member gauge. All 10 industry groups advanced.
“The global recovery is still on foot,” said Prasad Patkar, who helps manage about $1.7 billion at Platypus Asset Management. “There was a little concern about the U.S. a couple of months ago, but that seems to be working its way through. It looks like there’s a reasonably healthy demand outlook for Asian exporters.”
Japan’s Nikkei 225 (NKY) Stock Average rose 1 percent after the nation’s Finance Ministry said the current-account surplus in May narrowed less than economists forecast. South Korea’s Kospi index rose was little changed in Seoul while Australia’s S&P/ASX 200 Index added 1 percent in Sydney.
U.S. Jobs Grow
Hong Kong’s Hang Seng index increased 1.1 percent, while China’s Shanghai Composite index fell 0.2 percent.
Futures on the Standard & Poor’s 500 Index were unchanged today. The S&P gained 1.1 percent yesterday to close at its highest level since May 10 after a report by ADP Employer Services showed U.S. companies added more jobs than forecast in June.
Consumer discretionary shares, led by Japanese exporters such as Toyota and Honda Motor Co., advanced 1 percent, the second-most among the 10 industry groups on the MSCI Asia Pacific Index.
Toyota, which receives 27 percent of its revenue from North America, rose 1.9 percent to 3,465 yen, the biggest boost to the MSCI Asia Pacific Index. Honda, which counts North America as its largest market, advanced 1.4 percent to 3,260 yen. Canon Inc., the world’s No. 1 camera maker by market value, rose 2 percent to 3,925 yen.
Adding Payrolls
Investor optimism was bolstered after a report that companies in the U.S. added 157,000 workers to their payrolls last month, compared with a 36,000 gain in May, according to ADP Employer Services. The median forecast in a Bloomberg News survey was for 70,000 extra jobs. Also, retail sales reports indicated shoppers took advantage of discounting in June to clear inventory.
“U.S. jobs rebounded in June after slumping in May because of the impact on the car industry from Japan’s earthquake,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “The job data shows the drop was temporary.”
Energy producers posted the biggest increase on the MSCI Asia Pacific Index after oil prices traded near the highest level in three weeks, and a gauge of metal prices rose in London.
Energy Producers Jump
BHP advanced 1.2 percent to A$44.97, the second-biggest drive to the MSCI Asia Pacific Index’s advance. Rio Tinto Group, the world’s second-largest mining company by sales, climbed 1.1 percent to A$84.48. PetroChina Co., China’s No. 1 oil and gas producer by market value, rose 1.7 percent to HK$11.72.
Energy stocks advanced as crude oil for August delivery rose as much as 0.3 percent to $98.97 a barrel in New York, after climbing yesterday to $98.67, the highest settlement since June 14. The London Metal Exchange Index of prices for six metals including copper and aluminum increased 2 percent yesterday to its highest level since May 3.
Shinhan Financial, the biggest drag on the MSCI Asia Pacific Index, slumped 3.3 percent to 50,300 won in Seoul. State-run Korea Deposit Insurance Corp. sold 2.9 million Shinhan Financial shares for 51,000 won each today before the start of trading, according to an e-mailed statement today.
Li Ning Co., which designs and makes sportswear in China, dropped 7.6 percent to HK$10.66, the biggest decline on the MSCI Asia Pacific Index. The company’s share price target was reduced by DBS Group Holdings Ltd., Mizuho Financial Group Inc. and United Overseas Bank Ltd. after the company said yesterday it expects first-half sales and profit margin to decline.
The MSCI Asia Pacific Index lost 0.3 percent this year through yesterday, compared with a gain of 7.6 percent by the S&P and an increase of less than 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.9 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.2 times for the Stoxx 600.
To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Wednesday, July 6, 2011
Markets open higher, new listings gain
The markets opened higher with the Sensex gaining 52 points at 18,779 and the Nifty is up 11 points at 5,637. The broader markets consisting of the smallcap and the midcap indices too opened in line with the BSE benchmark index gaining 0.3% each. However, there was a small blip moving ahead but quickly rebounded. The Sensex is currently up 115 points at 18,842 and the Nifty is up 32 points at 5,657.
The new listing Rushil Decor,which makes decorative laminated sheets and plain particle board debuted at Rs 81 as compared to the IPO price band of Rs 63-72 per share.Birla Pacific Medspa debuted at a premium of 26.50% over the initial public offer price of Rs 10 per share. The scrip is trading at Rs 12.65.
Among the sectoral indices, Consumer Durables and FMCG indices are leading the gains up 1% each followed by realty. Oil & Gas and Power indices. On the other hand, Bankex has started in the negative, down 0.3%.
Foreign funds have pumped in nearly $2 billion in the eight sessions to July 4, as they ramped up their interest in riskier emerging market assets, helping the main index rack up gains.
Ashish Chaturmohta from IIFL, Vice President - Derivatives and Technical Analyst says that technically, Nifty future has resistance around 5700 levels, on downside short term support exists at 5620 levels, breaking below which there will be profit booking till 5580 levels where support can emerge.
Markets across Asia are trading mixed. Taiwan Weighted,Shanghai Composite and Nikkei are down 0.1-0.4% while Seoul Composite,Straits Times,Jakarta Composite and Hang Seng have gained 0.3-0.5%.
The top gainers among the Sensex stocks in the opening trades are Bharti Airtel, Jindal Steel, Reliance Infrastructure, Reliance Industries and ITC up 1% each.
Sterlite, ICICI Bank down 1% each are the top losers followed by Maruti Suzuki, HDFC Bank and Hindalco losing 0.3% each.
The market breadth is very positive. Of the total 1555 stocks traded on the BSE, 1033 stocks have advanced while 453 have declined.
The new listing Rushil Decor,which makes decorative laminated sheets and plain particle board debuted at Rs 81 as compared to the IPO price band of Rs 63-72 per share.Birla Pacific Medspa debuted at a premium of 26.50% over the initial public offer price of Rs 10 per share. The scrip is trading at Rs 12.65.
Among the sectoral indices, Consumer Durables and FMCG indices are leading the gains up 1% each followed by realty. Oil & Gas and Power indices. On the other hand, Bankex has started in the negative, down 0.3%.
Foreign funds have pumped in nearly $2 billion in the eight sessions to July 4, as they ramped up their interest in riskier emerging market assets, helping the main index rack up gains.
Ashish Chaturmohta from IIFL, Vice President - Derivatives and Technical Analyst says that technically, Nifty future has resistance around 5700 levels, on downside short term support exists at 5620 levels, breaking below which there will be profit booking till 5580 levels where support can emerge.
Markets across Asia are trading mixed. Taiwan Weighted,Shanghai Composite and Nikkei are down 0.1-0.4% while Seoul Composite,Straits Times,Jakarta Composite and Hang Seng have gained 0.3-0.5%.
The top gainers among the Sensex stocks in the opening trades are Bharti Airtel, Jindal Steel, Reliance Infrastructure, Reliance Industries and ITC up 1% each.
Sterlite, ICICI Bank down 1% each are the top losers followed by Maruti Suzuki, HDFC Bank and Hindalco losing 0.3% each.
The market breadth is very positive. Of the total 1555 stocks traded on the BSE, 1033 stocks have advanced while 453 have declined.
India isn't as good a bargain as Brazil: Jim O'Neil, Goldman Sachs
Goldman Sachs' Jim O'Neil, credited with coining the moniker BRICs to showcase the best growing parts of the global economy, is not as bullish about the 'I' in it, meaning India, as the rest of BR and C are better off. Inflation that ruined the party for India this year may begin to ease in the second half, says O'Neil, chairman , Goldman Sachs Asset Management , in an interview with ET NOW. Excerpts:
Among BRICs, where does India rank with regard to attracting fund flows in the second half of 2011?
I don't think it is quite as obvious as it was in the start of the year when India looked very expensive relative to the other three. Because the Indian market has been the weakest despite strong growth, the valuation mismatch is not quite as distant as it was. But that said it still looks to me as though India isn't a bargain basement whereas Russia still does. China also looks quite cheap. Those two I would tend to favour quite a bit more than India. Brazil relative to India is a bit tricky and I think has a few issues to do with managing part of its cycle serve. India would not be at top of my list but is not so obviously the one to stay away from.
Do you expect a revision in India's GDP growth estimates for FY12 if the price of crude oil rises coupled with food inflation?
If we have further increase in oil and food prices, it would be a surprise. For many emerging economies, the growing conviction is that inflation may peak in H2CY12.
Do you think optimism is back in Indian markets?
Two weeks ago, the mood was almost as grim as it was in early 2009. Last week, we had a great rally and the mood suddenly changes. I am in the camp that believes inflation is close to peaking and if that is true it probably should be pretty easy for markets to rally.
Do you see oil prices appreciate further in coming months?
I don't see that happening. I wouldn't be surprised if oil prices fell a bit further in second half of this year.
Among BRICs, where does India rank with regard to attracting fund flows in the second half of 2011?
I don't think it is quite as obvious as it was in the start of the year when India looked very expensive relative to the other three. Because the Indian market has been the weakest despite strong growth, the valuation mismatch is not quite as distant as it was. But that said it still looks to me as though India isn't a bargain basement whereas Russia still does. China also looks quite cheap. Those two I would tend to favour quite a bit more than India. Brazil relative to India is a bit tricky and I think has a few issues to do with managing part of its cycle serve. India would not be at top of my list but is not so obviously the one to stay away from.
Do you expect a revision in India's GDP growth estimates for FY12 if the price of crude oil rises coupled with food inflation?
If we have further increase in oil and food prices, it would be a surprise. For many emerging economies, the growing conviction is that inflation may peak in H2CY12.
Do you think optimism is back in Indian markets?
Two weeks ago, the mood was almost as grim as it was in early 2009. Last week, we had a great rally and the mood suddenly changes. I am in the camp that believes inflation is close to peaking and if that is true it probably should be pretty easy for markets to rally.
Do you see oil prices appreciate further in coming months?
I don't see that happening. I wouldn't be surprised if oil prices fell a bit further in second half of this year.
Punjab & Sind Bank seeks Rs 900 crore
NEW DELHI: Delhi-headquartered Punjab & Sind Bank has sought fresh capital infusion of Rs 900 crore from the government to push its business.
PK Anand, the bank's executive director and the officiating chief, told TOI that the public sector player wanted the funds through preference shares though the government was yet to revert to the proposal. Though the bank appeared comfortable with a capital adequacy ratio of nearly 13%, its Tier I capital adequacy was 8.35%, which is just marginally higher than the 8% comfort level.
"We need the capital to pursue our growth plans," Anand said. The government, which is fighting to stay within the budgeted fiscal deficit level of 4.6% of GDP, is however, going to find it tough to meet Punjab & Sind Bank's demand as the amount has not been budgeted for in the recpaitalisation plans for the current financial year.
In any case, the bank had been provided a significant amount before its initial public offer last year.
PK Anand, the bank's executive director and the officiating chief, told TOI that the public sector player wanted the funds through preference shares though the government was yet to revert to the proposal. Though the bank appeared comfortable with a capital adequacy ratio of nearly 13%, its Tier I capital adequacy was 8.35%, which is just marginally higher than the 8% comfort level.
"We need the capital to pursue our growth plans," Anand said. The government, which is fighting to stay within the budgeted fiscal deficit level of 4.6% of GDP, is however, going to find it tough to meet Punjab & Sind Bank's demand as the amount has not been budgeted for in the recpaitalisation plans for the current financial year.
In any case, the bank had been provided a significant amount before its initial public offer last year.
Tuesday, July 5, 2011
Larsen & Toubro to Double Overseas Orders on Gulf Construction
By Karthikeyan Sundaram - Jul 5, 2011
Larsen & Toubro Ltd. (LT), India’s biggest builder of power networks and refineries, expects to double overseas orders in three years as a new structure helps it challenge South Korean builders for projects in the Middle East.
Contracts from overseas will rise to 25 percent of total orders in the period as the company divides operations into nine units to improve management focus, Chief Financial Officer Y.M. Deosthalee said in a July 4 interview at the company’s Mumbai head office. Foreign deals now account for less than 10 percent of orders, he said.
“Our international strategy has not panned out the way it should have,” he said. That is one reason for the new management setup as “this business has to grow,” he said.
The company will focus its overseas push on the Gulf, as rising oil prices and economic development spur investment in refineries and infrastructure. Countries in the region plan to spend almost $1 trillion on construction over five years, Deloitte Corporate Finance Ltd. said in November.
“Larsen has the wherewithal to win orders overseas,” said Rupesh Kumar, a Mumbai-based analyst with KR Choksey Shares & Securities Pvt. “But, the going won’t be easy for them as they are facing some formidable competitors.”
Larsen plans to promote work it has done in India, including building four airports, to win overseas deals, Deosthalee said. India’s lower wages may also help Larsen challenge South Korean builders, including Hyundai Engineering & Construction Co., the nation’s biggest, which got 38 percent of sales in the Middle East last year.
‘Tough Job’
“It’s a very tough job to compete against them, but we have some advantages,” Deosthalee said. “Our entire design and engineering team is sitting in India,” which pares costs, he said.
Larsen last month announced 13.7 billion rupee ($310 million) of transmission and power distribution orders from the Middle East, including installing a 225 kilometer-long power line for a Saudi Arabian railway and building five substations for Abu Dhabi Ports Co.
The builder expects its total orderbook to rise as much as 20 percent by March 31 from 1.3 trillion rupees at the end of the last fiscal year, it said earlier this year. The company in January unveiled the new management set-up centered on nine units, focused on areas including construction, shipbuilding, electrical parts, information technology and financial services.
The company gained 0.1 percent to 1,791.6 rupees in Mumbai trading yesterday. It has dropped 9.5 percent this year, compared with an 8.6 percent decline for the Bombay Stock Exchange’s Sensitive Index.
Aside from the Middle East, Larsen is also looking to win business in other South Asian countries and in Africa, Deosthalee said. It has opened an office in South Africa to win contracts there to build electricity transmission lines, he said.
The company also makes heavy-engineering equipment, including parts for fertilizer plants and refineries, which are sold worldwide.
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow in Hong Kong at ndenslow@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Larsen & Toubro Ltd. (LT), India’s biggest builder of power networks and refineries, expects to double overseas orders in three years as a new structure helps it challenge South Korean builders for projects in the Middle East.
Contracts from overseas will rise to 25 percent of total orders in the period as the company divides operations into nine units to improve management focus, Chief Financial Officer Y.M. Deosthalee said in a July 4 interview at the company’s Mumbai head office. Foreign deals now account for less than 10 percent of orders, he said.
“Our international strategy has not panned out the way it should have,” he said. That is one reason for the new management setup as “this business has to grow,” he said.
The company will focus its overseas push on the Gulf, as rising oil prices and economic development spur investment in refineries and infrastructure. Countries in the region plan to spend almost $1 trillion on construction over five years, Deloitte Corporate Finance Ltd. said in November.
“Larsen has the wherewithal to win orders overseas,” said Rupesh Kumar, a Mumbai-based analyst with KR Choksey Shares & Securities Pvt. “But, the going won’t be easy for them as they are facing some formidable competitors.”
Larsen plans to promote work it has done in India, including building four airports, to win overseas deals, Deosthalee said. India’s lower wages may also help Larsen challenge South Korean builders, including Hyundai Engineering & Construction Co., the nation’s biggest, which got 38 percent of sales in the Middle East last year.
‘Tough Job’
“It’s a very tough job to compete against them, but we have some advantages,” Deosthalee said. “Our entire design and engineering team is sitting in India,” which pares costs, he said.
Larsen last month announced 13.7 billion rupee ($310 million) of transmission and power distribution orders from the Middle East, including installing a 225 kilometer-long power line for a Saudi Arabian railway and building five substations for Abu Dhabi Ports Co.
The builder expects its total orderbook to rise as much as 20 percent by March 31 from 1.3 trillion rupees at the end of the last fiscal year, it said earlier this year. The company in January unveiled the new management set-up centered on nine units, focused on areas including construction, shipbuilding, electrical parts, information technology and financial services.
The company gained 0.1 percent to 1,791.6 rupees in Mumbai trading yesterday. It has dropped 9.5 percent this year, compared with an 8.6 percent decline for the Bombay Stock Exchange’s Sensitive Index.
Aside from the Middle East, Larsen is also looking to win business in other South Asian countries and in Africa, Deosthalee said. It has opened an office in South Africa to win contracts there to build electricity transmission lines, he said.
The company also makes heavy-engineering equipment, including parts for fertilizer plants and refineries, which are sold worldwide.
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow in Hong Kong at ndenslow@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Asia Stocks Swing Between Gain, Losses as Moody’s Questions China Bad Debt
By Anna Kitanaka and Shani Raja - Jul 5, 2011
Asian stocks swung between gains and losses as banks declined in China after Moody’s Investors Service said the potential scale of problem loans at lenders is greater than had been anticipated, offsetting gains by Tokyo Electric Power Co.
Industrial & Commercial Bank of China Ltd., the world’s largest lender by market capitalization, fell 0.7 percent in Hong Kong. Tokyo Electric jumped 7.1 percent after the company yesterday said its cooling system used to douse its smoldering nuclear reactors is working. 77 Bank Ltd., a Japanese lender in the Tohoku region worst hit by the March 11 tsunami, advanced 2.5 percent after Nomura Holdings Inc. said it was bullish on regional banks. Taiwan Semiconductor Manufacturing Co. led Taiwanese shares lower after the Digitimes reported the nation’s liquid-crystal display panel makers have reduced output.
“China remains at the forefront of investors’ minds given its increasingly large contribution to global growth,” said Tim Schroeders, who helps manage $1 billion in global equities as a portfolio manager at Pengana Capital Ltd. in Melbourne. “Any slowdown in the rate of growth has heightened flow-on effects to growth expectations, not only in China but globally.”
The MSCI Asia Pacific Index fell 0.1 percent to 137.07 as of 1:08 p.m. in Tokyo, reversing earlier gains of as much as 0.2 percent. A similar number of shares rose and fell on the 1,018- member gauge. Through yesterday, the gauge fell 2.6 percent from this year’s high on May 2 amid concern a slowing U.S. economy, Europe’s sovereign-debt crisis and China’s steps to curb inflation will crimp earnings.
Nikkei, Kospi
Japan’s Nikkei 225 (NKY) Stock Average was little changed after earlier rising as much as 0.3 percent and falling 0.2 percent. South Korea’s Kospi Index climbed 0.6 percent and Australia’s S&P/ASX 200 Index slipped 0.2 percent. Hong Kong’s Hang Seng index (HSI) was little changed, while China’s Shanghai Composite index fell 0.1 percent.
Futures on the Standard & Poor’s 500 Index retreated 0.2 percent today. Exchanges in the U.S. were closed for the Independence Day holiday yesterday.
Industrial & Commercial Bank slid 0.7 percent to HK$5.92. China Construction Bank Corp., the No. 2 lender by market value, sank 0.8 percent to HK$6.51, the biggest drag on the Hang Seng index. Bank of China Ltd. declined 0.3 percent to HK$3.86.
Chinese banks fell after Moody’s said in a report today the potential scale of problem loans at the lenders may be closer to its stress case than its base case. The ratings agency said it views the credit outlook for the Chinese banking system as potentially turning to negative.
Biggest Gain
“We conclude that the banks’ exposure to local government borrowers is greater than we anticipated,” says Yvonne Zhang, a Moody’s vice president and one of the authors of the report.
Tokyo Electric, the utility at the center of the worst nuclear crisis in 25 years, jumped 4.6 percent to 411 yen today, its highest level since May 13. The utility’s self-contained cooling system that uses recycled water to douse smoldering reactors at its crippled nuclear plant is working for a third day after repeated stops and starts, spokesman Naoyuki Matsumoto said yesterday.
In Japan, regional banks rose after a report by Nomura said the brokerage is bullish on the local lenders. 77 Bank advanced 2.5 percent to 374 yen. Nomura said the bank was its “top pick” on improved earnings prospects. Bank of Yokohama Ltd. rose 1.5 percent to 416 yen and Fukuoka Financial Group Inc. increased 1.5 percent to 348 yen.
Banks ‘Cheap’
The regional lenders, which declined along with Japan’s major banks following the March 11 earthquake, tsunami and on- going nuclear crisis, are cheap, Nomura said in a report dated yesterday. Share prices are close to reaching the bottom, the report said.
Taiwan Semiconductor Manufacturing slumped 1 percent to NT$72.80 in Taipei, the biggest drag on the MSCI Asia Pacific Index. AU Optronics Corp., which makes thin film transistor- liquid crystal displays, dropped 4.9 percent to NT$18.30. LG Chem Ltd., which produces petrochemicals as well as industrial and electronic materials, declined 1.7 percent to 492,500 won in Seoul.
Electronic shares in Taipei and Seoul slid following a Digitimes report yesterday that Taiwanese and South Korean-based LCD panel makes have lowered output since the start of June as global demand for televisions remains weak. The cut in output may continue in July and August, Digitimes said, citing unnamed industry sources in Taiwan.
The MSCI Asia Pacific Index lost 0.4 percent this year through yesterday, compared with a gain of 6.5 percent by the Standard & Poor’s 500 and a drop of 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.7 times estimated earnings on average, compared with 13.5 times for the S&P 500 and 11.2 times for the Stoxx 600.
To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Asian stocks swung between gains and losses as banks declined in China after Moody’s Investors Service said the potential scale of problem loans at lenders is greater than had been anticipated, offsetting gains by Tokyo Electric Power Co.
Industrial & Commercial Bank of China Ltd., the world’s largest lender by market capitalization, fell 0.7 percent in Hong Kong. Tokyo Electric jumped 7.1 percent after the company yesterday said its cooling system used to douse its smoldering nuclear reactors is working. 77 Bank Ltd., a Japanese lender in the Tohoku region worst hit by the March 11 tsunami, advanced 2.5 percent after Nomura Holdings Inc. said it was bullish on regional banks. Taiwan Semiconductor Manufacturing Co. led Taiwanese shares lower after the Digitimes reported the nation’s liquid-crystal display panel makers have reduced output.
“China remains at the forefront of investors’ minds given its increasingly large contribution to global growth,” said Tim Schroeders, who helps manage $1 billion in global equities as a portfolio manager at Pengana Capital Ltd. in Melbourne. “Any slowdown in the rate of growth has heightened flow-on effects to growth expectations, not only in China but globally.”
The MSCI Asia Pacific Index fell 0.1 percent to 137.07 as of 1:08 p.m. in Tokyo, reversing earlier gains of as much as 0.2 percent. A similar number of shares rose and fell on the 1,018- member gauge. Through yesterday, the gauge fell 2.6 percent from this year’s high on May 2 amid concern a slowing U.S. economy, Europe’s sovereign-debt crisis and China’s steps to curb inflation will crimp earnings.
Nikkei, Kospi
Japan’s Nikkei 225 (NKY) Stock Average was little changed after earlier rising as much as 0.3 percent and falling 0.2 percent. South Korea’s Kospi Index climbed 0.6 percent and Australia’s S&P/ASX 200 Index slipped 0.2 percent. Hong Kong’s Hang Seng index (HSI) was little changed, while China’s Shanghai Composite index fell 0.1 percent.
Futures on the Standard & Poor’s 500 Index retreated 0.2 percent today. Exchanges in the U.S. were closed for the Independence Day holiday yesterday.
Industrial & Commercial Bank slid 0.7 percent to HK$5.92. China Construction Bank Corp., the No. 2 lender by market value, sank 0.8 percent to HK$6.51, the biggest drag on the Hang Seng index. Bank of China Ltd. declined 0.3 percent to HK$3.86.
Chinese banks fell after Moody’s said in a report today the potential scale of problem loans at the lenders may be closer to its stress case than its base case. The ratings agency said it views the credit outlook for the Chinese banking system as potentially turning to negative.
Biggest Gain
“We conclude that the banks’ exposure to local government borrowers is greater than we anticipated,” says Yvonne Zhang, a Moody’s vice president and one of the authors of the report.
Tokyo Electric, the utility at the center of the worst nuclear crisis in 25 years, jumped 4.6 percent to 411 yen today, its highest level since May 13. The utility’s self-contained cooling system that uses recycled water to douse smoldering reactors at its crippled nuclear plant is working for a third day after repeated stops and starts, spokesman Naoyuki Matsumoto said yesterday.
In Japan, regional banks rose after a report by Nomura said the brokerage is bullish on the local lenders. 77 Bank advanced 2.5 percent to 374 yen. Nomura said the bank was its “top pick” on improved earnings prospects. Bank of Yokohama Ltd. rose 1.5 percent to 416 yen and Fukuoka Financial Group Inc. increased 1.5 percent to 348 yen.
Banks ‘Cheap’
The regional lenders, which declined along with Japan’s major banks following the March 11 earthquake, tsunami and on- going nuclear crisis, are cheap, Nomura said in a report dated yesterday. Share prices are close to reaching the bottom, the report said.
Taiwan Semiconductor Manufacturing slumped 1 percent to NT$72.80 in Taipei, the biggest drag on the MSCI Asia Pacific Index. AU Optronics Corp., which makes thin film transistor- liquid crystal displays, dropped 4.9 percent to NT$18.30. LG Chem Ltd., which produces petrochemicals as well as industrial and electronic materials, declined 1.7 percent to 492,500 won in Seoul.
Electronic shares in Taipei and Seoul slid following a Digitimes report yesterday that Taiwanese and South Korean-based LCD panel makes have lowered output since the start of June as global demand for televisions remains weak. The cut in output may continue in July and August, Digitimes said, citing unnamed industry sources in Taiwan.
The MSCI Asia Pacific Index lost 0.4 percent this year through yesterday, compared with a gain of 6.5 percent by the Standard & Poor’s 500 and a drop of 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.7 times estimated earnings on average, compared with 13.5 times for the S&P 500 and 11.2 times for the Stoxx 600.
To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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