Reliance Communications Ltd. (RCOM), India’s second-largest mobile phone operator by subscribers, posted a 43 percent drop in profit, beating analyst estimates for the first time in three quarters.
Second-quarter net income fell to 2.52 billion rupees ($50 million) in the three months ended Sept. 30, from 4.46 billion rupees a year earlier, Mumbai-based Reliance Communications said in a statement today. Profit exceeded the 1.67 billion-rupee median of 14 analysts’ estimates compiled by Bloomberg.
Billionaire Anil Ambani’s flagship company joined competitors Bharti Airtel Ltd. (BHARTI) and Vodafone Group Plc (VOD) in starting third-generation wireless services this year to win subscribers with features such as streaming video and music downloads. Reliance, which spent 85.9 billion rupees last year at auctions of airwaves to start faster wireless services, is seeking to sell its tower unit to reduce debt.
Reliance had 147 million connections at the end of September, up from 117 million last year, according to the statement.
Revenue fell 4.6 percent to 47.9 billion rupees from a year earlier, according to the statement. That’s lower than the 50.2 billion-rupee median of 16 analysts’ estimates.
Earnings before interest, tax, depreciation and amortization, or Ebitda, declined 3 percent to 16.1 billion rupees, while the Ebitda margin, or ratio of earnings to sales, dropped to 31.8 percent from 32.4 percent a year earlier.
Reliance was little changed at 83.65 rupees at the close of trading in Mumbai yesterday, while the benchmark Sensitive Index fell 1 percent. The stock has declined 42 percent this year, compared with a 16 percent drop in the key index. Bharti has gained 10 percent.
To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
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Saturday, November 12, 2011
Friday, November 11, 2011
Billionaire Mallya’s Kingfisher Airlines Seeks Higher Loan Limit on Costs By Siddharth Philip and Karthikeyan Sundaram - Nov 11, 2011
Kingfisher Airlines Ltd. (KAIR), controlled by billionaire Vijay Mallya, asked banks to raise its lending limits to meet operating costs and pay for fuel as the stock fell the most in a month on concern that the company needs cash.
The carrier will cut flights to 300 a day from 340 as part of a strategy to return to profit, Chief Executive Officer Sanjay Aggarwal said yesterday in an e-mailed statement.
“The whole Indian aviation industry is struggling due to high costs and lower yields,” he said. “We are no exception.”
Kingfisher has posted losses totaling more than 47 billion rupees ($935 million) over the last three years as it added new planes and competed against state-owned Air India Ltd. Earlier this year, it won as much as 12.1 billion rupees of new loans after banks agreed to convert 13 billion rupees of existing debt into preferred shares.
The airline is complying with payment arrangements with vendors and hasn’t requested the government for a bailout, Aggarwal said. India’s finance ministry may ask banks to help Kingfisher restructure its debt after the carrier sought the government’s assistance, Civil Aviation Minister Vayalar Ravi said yesterday in New Delhi.
The carrier, India’s second-biggest by market share, fell 9.5 percent to 19.65 rupees yesterday at the close of Mumbai trading, the most since Sept. 30. United Breweries (Holdings) Ltd., Mallya’s holding company and Bangalore-based Kingfisher’s biggest shareholder, fell 8.7 percent.
Money to Survive
“Unless there is an infusion of money at this point, I don’t really see how it’s going to survive,” said Rishikesha Krishnan, a professor of corporate strategy at the Indian Institute of Management, Bangalore, who has written papers about Indian aviation. “That infusion of money has to come from Mallya. I can’t see anybody else who’s going to put money in.”
Jet Airways (India) Ltd., the nation’s biggest, yesterday reported a wider-than-estimated loss of 7.14 billion rupees for the quarter ended Sept. 30. Revenue rose 7 percent to 32.9 billion rupees, the company said in a statement.
Kingfisher will report quarterly earnings on Nov. 14, according to the BSE India website.
The airline isn’t operating 36 percent of flights scheduled for the winter season, E.K. Bharat Bhushan, Director General of Civil Aviation, said yesterday in New Delhi. The slots at airports that Kingfisher isn’t using will be given to other carriers, he said, without elaborating.
Jet, SpiceJet
Shares of Jet Airways and SpiceJet Ltd. (SJET), India’s only listed discount carrier, gained yesterday in Mumbai after Bhushan’s comments. Jet Airways rose 2.3 percent at the close, while SpiceJet climbed 3.6 percent.
Kingfisher has about $1.5 billion of debt and a debt-to- asset ratio of 82, according to data compiled by Bloomberg. Jet Airways’ ratio is 67, while SpiceJet is at 7.7.
Jet has posted losses for at least four years even as travel demand has surged. The number of domestic passengers in India rose 18.6 percent this year through August to 39.6 million, according to the Directorate General of Civil Aviation.
Mallya, 55, doubled personal guarantees against the carrier’s debt to 61.7 billion rupees in the year ended March, according to the airline’s annual report. The carrier paid him 508.7 million rupees for loan assurances, according to the report, published in September.
Debt Guarantees
United Breweries also more than doubled its debt guarantees to 168.5 billion rupees. The company, which owns 40 percent of Kingfisher, has dropped 71 percent this year.
Mallya formed Kingfisher Airlines in 2005, naming it after the UB Group’s beer brand. In 2008, Kingfisher completed a merger with Deccan Aviation Ltd., which operated India’s first low-cost airline, Air Deccan. Kingfisher had a fleet of 66 planes ranging from Avions De Transport Regional turboprops to Airbus SAS A330s as of March 31, according to its annual report.
The carrier has also ordered five Airbus A380 aircraft, deliveries of which are expected to start in 2016.
Mallya inherited the UB Group from his father in 1983 at the age of 27. He has since built United Breweries Ltd. (UBBL) into India’s biggest brewer.
The billionaire also has a stake in a Formula One team. In October, he sold a 42.5 percent stake in Force India to India’s Sahara Group for $100 million.
Mallya had a net worth of $1.1 billion, and was ranked 49th among India’s billionaires, according to Forbes magazine.
To contact the reporter on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net; Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
The carrier will cut flights to 300 a day from 340 as part of a strategy to return to profit, Chief Executive Officer Sanjay Aggarwal said yesterday in an e-mailed statement.
“The whole Indian aviation industry is struggling due to high costs and lower yields,” he said. “We are no exception.”
Kingfisher has posted losses totaling more than 47 billion rupees ($935 million) over the last three years as it added new planes and competed against state-owned Air India Ltd. Earlier this year, it won as much as 12.1 billion rupees of new loans after banks agreed to convert 13 billion rupees of existing debt into preferred shares.
The airline is complying with payment arrangements with vendors and hasn’t requested the government for a bailout, Aggarwal said. India’s finance ministry may ask banks to help Kingfisher restructure its debt after the carrier sought the government’s assistance, Civil Aviation Minister Vayalar Ravi said yesterday in New Delhi.
The carrier, India’s second-biggest by market share, fell 9.5 percent to 19.65 rupees yesterday at the close of Mumbai trading, the most since Sept. 30. United Breweries (Holdings) Ltd., Mallya’s holding company and Bangalore-based Kingfisher’s biggest shareholder, fell 8.7 percent.
Money to Survive
“Unless there is an infusion of money at this point, I don’t really see how it’s going to survive,” said Rishikesha Krishnan, a professor of corporate strategy at the Indian Institute of Management, Bangalore, who has written papers about Indian aviation. “That infusion of money has to come from Mallya. I can’t see anybody else who’s going to put money in.”
Jet Airways (India) Ltd., the nation’s biggest, yesterday reported a wider-than-estimated loss of 7.14 billion rupees for the quarter ended Sept. 30. Revenue rose 7 percent to 32.9 billion rupees, the company said in a statement.
Kingfisher will report quarterly earnings on Nov. 14, according to the BSE India website.
The airline isn’t operating 36 percent of flights scheduled for the winter season, E.K. Bharat Bhushan, Director General of Civil Aviation, said yesterday in New Delhi. The slots at airports that Kingfisher isn’t using will be given to other carriers, he said, without elaborating.
Jet, SpiceJet
Shares of Jet Airways and SpiceJet Ltd. (SJET), India’s only listed discount carrier, gained yesterday in Mumbai after Bhushan’s comments. Jet Airways rose 2.3 percent at the close, while SpiceJet climbed 3.6 percent.
Kingfisher has about $1.5 billion of debt and a debt-to- asset ratio of 82, according to data compiled by Bloomberg. Jet Airways’ ratio is 67, while SpiceJet is at 7.7.
Jet has posted losses for at least four years even as travel demand has surged. The number of domestic passengers in India rose 18.6 percent this year through August to 39.6 million, according to the Directorate General of Civil Aviation.
Mallya, 55, doubled personal guarantees against the carrier’s debt to 61.7 billion rupees in the year ended March, according to the airline’s annual report. The carrier paid him 508.7 million rupees for loan assurances, according to the report, published in September.
Debt Guarantees
United Breweries also more than doubled its debt guarantees to 168.5 billion rupees. The company, which owns 40 percent of Kingfisher, has dropped 71 percent this year.
Mallya formed Kingfisher Airlines in 2005, naming it after the UB Group’s beer brand. In 2008, Kingfisher completed a merger with Deccan Aviation Ltd., which operated India’s first low-cost airline, Air Deccan. Kingfisher had a fleet of 66 planes ranging from Avions De Transport Regional turboprops to Airbus SAS A330s as of March 31, according to its annual report.
The carrier has also ordered five Airbus A380 aircraft, deliveries of which are expected to start in 2016.
Mallya inherited the UB Group from his father in 1983 at the age of 27. He has since built United Breweries Ltd. (UBBL) into India’s biggest brewer.
The billionaire also has a stake in a Formula One team. In October, he sold a 42.5 percent stake in Force India to India’s Sahara Group for $100 million.
Mallya had a net worth of $1.1 billion, and was ranked 49th among India’s billionaires, according to Forbes magazine.
To contact the reporter on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net; Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Thursday, November 10, 2011
Tata Steel Second-Quarter Profit Falls 89% on Weak Demand, Material Costs By Abhishek Shanker - Nov 10, 2011
Tata Steel Ltd. (TATA), India’s biggest producer, reported an 89 percent drop in fiscal second-quarter group profit because of waning demand, foreign-exchange losses and higher raw material costs at its European operations.
Net income, including that of Tata Steel Europe Ltd., fell to 2.12 billion rupees ($42.2 million), or 1.75 rupees a share, in the three months ended Sept. 30 from 19.8 billion rupees, or 20.63 rupees, a year earlier, the Mumbai-based company said yesterday in a statement. The median profit estimate of 28 analysts in a Bloomberg survey was 8.39 billion rupees. Sales gained 16 percent to 325.1 billion rupees.
Rising costs of coking coal and iron ore and falling demand for steel have hindered producers’ efforts to overcome the industry’s worst slump in 60 years following the global recession. Commodity sales have waned since June on concern that Greece and other euro-zone members may default on debt and China’s economic growth has slowed.
Total costs rose 20 percent to 311.6 billion rupees, while raw material expenses climbed 15 percent to 108.3 billion rupees in the quarter. The depreciation of the Indian currency against the dollar affected Tata Steel’s exposure to foreign-currency convertible bonds by 1.5 billion rupees, Group Chief Financial Officer Koushik Chatterjee said.
The company had a net debt of $9.2 billion at the end of September, Chatterjee said. Income from sources other than the main business fell 85 percent to 1.2 billion rupees from 8.14 billion rupees, including a one-time gain, a year earlier, the company said.
Difficult Quarter
Tata Steel Europe Chief Executive Officer Karl-Ulrich Kohler said he expects the quarter ending Dec. 31 to be “difficult.” While the unit will maintain production this quarter, it may cut output in the following three months “if necessary,” he said, without elaborating.
Tata Steel Europe, which contributes about two-thirds of the group’s output and buys all the raw material it needs from outside, faced a 40 percent increase in coking coal prices, compared with a 14 percent surge in the price of steel hot- rolled coils. Cash iron ore prices at Tianjin port in China rose 28 percent on average in the quarter from a year earlier.
Commodity producers operating in India have reported lower earnings after the rupee’s depreciation. Vedanta Resources Plc (VED), the largest copper producer in India, said yesterday fiscal first-half profit dropped 92 percent on foreign-exchange losses.
Sesa Goa Ltd. (SESA), Steel Authority of India Ltd. (SAIL) and JSW Steel Ltd. (JSTL) missed profit estimates as the effect of foreign-exchange losses was exacerbated by higher raw-material costs.
Weakening Rupee
The rupee depreciated 8.7 percent last quarter, the most since 1992 and was the worst performer after South Korea’s won among Asian currencies, as Europe’s debt crisis prompted investors to pull money out of emerging-market assets. The currency lost 5.9 percent in September alone, the steepest slide since the Lehman Brothers Holdings Inc. collapse in 2008.
Tata Steel’s earnings mirror those of rival ArcelorMittal. (MT) The world’s largest steel producer reported on Nov. 3 third- quarter profit that missed analyst estimates and said it’s experiencing “volume and price pressures” in the final three months of 2011. ArcelorMittal, which has 16 of its 25 European blast furnaces in operation, has shuttered plants in France, Germany, Luxembourg, Poland and Spain in the past two months and announced the permanent halt of furnaces in Liege, Belgium.
Tata Steel fell 4.2 percent to 447.60 rupees at the close of trading in Mumbai on Nov. 9. The benchmark Sensitive Index declined 1.2 percent. The markets were closed yesterday on account of a holiday.
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net
To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net Andrew Hobbs at ahobbs4@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Net income, including that of Tata Steel Europe Ltd., fell to 2.12 billion rupees ($42.2 million), or 1.75 rupees a share, in the three months ended Sept. 30 from 19.8 billion rupees, or 20.63 rupees, a year earlier, the Mumbai-based company said yesterday in a statement. The median profit estimate of 28 analysts in a Bloomberg survey was 8.39 billion rupees. Sales gained 16 percent to 325.1 billion rupees.
Rising costs of coking coal and iron ore and falling demand for steel have hindered producers’ efforts to overcome the industry’s worst slump in 60 years following the global recession. Commodity sales have waned since June on concern that Greece and other euro-zone members may default on debt and China’s economic growth has slowed.
Total costs rose 20 percent to 311.6 billion rupees, while raw material expenses climbed 15 percent to 108.3 billion rupees in the quarter. The depreciation of the Indian currency against the dollar affected Tata Steel’s exposure to foreign-currency convertible bonds by 1.5 billion rupees, Group Chief Financial Officer Koushik Chatterjee said.
The company had a net debt of $9.2 billion at the end of September, Chatterjee said. Income from sources other than the main business fell 85 percent to 1.2 billion rupees from 8.14 billion rupees, including a one-time gain, a year earlier, the company said.
Difficult Quarter
Tata Steel Europe Chief Executive Officer Karl-Ulrich Kohler said he expects the quarter ending Dec. 31 to be “difficult.” While the unit will maintain production this quarter, it may cut output in the following three months “if necessary,” he said, without elaborating.
Tata Steel Europe, which contributes about two-thirds of the group’s output and buys all the raw material it needs from outside, faced a 40 percent increase in coking coal prices, compared with a 14 percent surge in the price of steel hot- rolled coils. Cash iron ore prices at Tianjin port in China rose 28 percent on average in the quarter from a year earlier.
Commodity producers operating in India have reported lower earnings after the rupee’s depreciation. Vedanta Resources Plc (VED), the largest copper producer in India, said yesterday fiscal first-half profit dropped 92 percent on foreign-exchange losses.
Sesa Goa Ltd. (SESA), Steel Authority of India Ltd. (SAIL) and JSW Steel Ltd. (JSTL) missed profit estimates as the effect of foreign-exchange losses was exacerbated by higher raw-material costs.
Weakening Rupee
The rupee depreciated 8.7 percent last quarter, the most since 1992 and was the worst performer after South Korea’s won among Asian currencies, as Europe’s debt crisis prompted investors to pull money out of emerging-market assets. The currency lost 5.9 percent in September alone, the steepest slide since the Lehman Brothers Holdings Inc. collapse in 2008.
Tata Steel’s earnings mirror those of rival ArcelorMittal. (MT) The world’s largest steel producer reported on Nov. 3 third- quarter profit that missed analyst estimates and said it’s experiencing “volume and price pressures” in the final three months of 2011. ArcelorMittal, which has 16 of its 25 European blast furnaces in operation, has shuttered plants in France, Germany, Luxembourg, Poland and Spain in the past two months and announced the permanent halt of furnaces in Liege, Belgium.
Tata Steel fell 4.2 percent to 447.60 rupees at the close of trading in Mumbai on Nov. 9. The benchmark Sensitive Index declined 1.2 percent. The markets were closed yesterday on account of a holiday.
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net
To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net Andrew Hobbs at ahobbs4@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Wednesday, November 9, 2011
State Bank of India Plunges After Chairman Says Delinquent Loans May Rise By Anto Antony and Ruth David - Nov 9, 2011
State Bank of India (SBIN) shares had their biggest drop in almost six months as the lender said delinquent loans may rise after reporting better-than-estimated earnings that were overshadowed by a jump in provisions.
Shares of India’s biggest bank fell 6.8 percent to 1,862.05 rupees as of the 3:30 p.m. close. Net income rose 12 percent to 28.1 billion rupees ($564 million) for the three months ended Sept. 30, the lender said today, beating the 25.2 billion rupee median of estimates compiled by Bloomberg.
The higher bad-loan ratio and increase in funds set aside for defaults may hamper efforts by Chairman Pratip Chaudhuri, who took the helm in April, to raise capital and meet regulatory requirements. Moody’s Investors Service downgraded the outlook for India’s banking system to negative today, citing concerns that global economic turmoil and a domestic slowdown may trigger defaults and curb profitability.
“Investors are worried about the spike in bad loans,” Alex Mathews, head of research at Geojit BNB Paribas Financial Services Ltd., said by telephone. “The bad-loan figures are in line with the concerns raised by Moody’s today.”
The lender’s gross non-performing assets rose to 4.19 percent of total debt in the quarter from 3.35 percent a year earlier, the bank said in the statement to exchanges today. Bad- loan provisions jumped 35 percent to 29.2 billion rupees.
Loan Stress
“Going ahead there is a possibility of increase in the non-performing assets,” Chaudhuri, 58, told reporters in Mumbai today. “Loans to companies and the agricultural sector are seeing stress as of now.”
Net interest income, or revenue from borrowers after deducting interest paid to depositors, rose 31 percent to 259.7 billion rupees last quarter from 198.08 billion rupees a year earlier. Net interest margin, a measure of lending profitability, widened to a record 3.79 percent from 3.43 percent.
Loans at the lender, based in Mumbai, climbed 17 percent to 8.1 trillion rupees as of Sept. 30, State Bank said. India’s outstanding bank loans climbed 21 percent in the 12 months to Sept. 30, according to data compiled by the central bank.
Shares of State Bank have dropped 33 percent this year, more than double the decline in the BSE India Sensitive Index, on concern that the steepest increases in borrowing costs among major Asian economies may spur defaults. The central bank has raised borrowing costs by 375 basis points since March 2010 in the fastest round of increases since the Reserve Bank of India was established in 1935, Bloomberg data show.
Economy Slowing
“India’s economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates,” said Vineet Gupta, a senior analyst at Moody’s in Singapore. “At the same time, concerns have emerged over the sustainability of the recovery in the U.S. and Europe, and the rise in the borrowing program of the Indian government, which could drain funds away from the private credit market.”
Moody’s downgraded State Bank’s financial-strength rating last month, citing rising bad debts. The company’s Tier 1 capital ratio “provides an insufficient cushion” to boost lending and to absorb higher credit costs as defaults climb, it said at the time.
The government has given an “assurance” to invest about 40 billion rupees into the bank to shore up capital, Chaudhuri said today. India will inject more than 30 billion rupees into State Bank to support its growth, a finance ministry official told reporters in New Delhi on Nov. 1.
Capital Infusion
State Bank has been in talks with the government for a capital infusion of about 200 billion rupees since at least February 2010 as it seeks funds to meet credit demand in Asia’s second-fastest growing major economy.
The bank reported an overall capital ratio of 11.4 percent and Tier 1 capital ratio of 7.47 percent as of Sept. 30. The Tier 1 ratio is below the 8 percent that the government targets for the state-run lenders. Chaudhuri said today that the ratio is poised to reach 9 percent by March.
ICICI Bank Ltd., India’s second-largest lender by assets, had Tier 1 capital adequacy of 13.1 percent as of Sept. 30. The Mumbai-based bank posted a 22 percent increase in net income for the quarter.
To contact the reporters on this story: Anto Antony in New Delhi at aantony1@bloomberg.net; Ruth David in Mumbai at rdavid9@bloomberg.net
To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Shares of India’s biggest bank fell 6.8 percent to 1,862.05 rupees as of the 3:30 p.m. close. Net income rose 12 percent to 28.1 billion rupees ($564 million) for the three months ended Sept. 30, the lender said today, beating the 25.2 billion rupee median of estimates compiled by Bloomberg.
The higher bad-loan ratio and increase in funds set aside for defaults may hamper efforts by Chairman Pratip Chaudhuri, who took the helm in April, to raise capital and meet regulatory requirements. Moody’s Investors Service downgraded the outlook for India’s banking system to negative today, citing concerns that global economic turmoil and a domestic slowdown may trigger defaults and curb profitability.
“Investors are worried about the spike in bad loans,” Alex Mathews, head of research at Geojit BNB Paribas Financial Services Ltd., said by telephone. “The bad-loan figures are in line with the concerns raised by Moody’s today.”
The lender’s gross non-performing assets rose to 4.19 percent of total debt in the quarter from 3.35 percent a year earlier, the bank said in the statement to exchanges today. Bad- loan provisions jumped 35 percent to 29.2 billion rupees.
Loan Stress
“Going ahead there is a possibility of increase in the non-performing assets,” Chaudhuri, 58, told reporters in Mumbai today. “Loans to companies and the agricultural sector are seeing stress as of now.”
Net interest income, or revenue from borrowers after deducting interest paid to depositors, rose 31 percent to 259.7 billion rupees last quarter from 198.08 billion rupees a year earlier. Net interest margin, a measure of lending profitability, widened to a record 3.79 percent from 3.43 percent.
Loans at the lender, based in Mumbai, climbed 17 percent to 8.1 trillion rupees as of Sept. 30, State Bank said. India’s outstanding bank loans climbed 21 percent in the 12 months to Sept. 30, according to data compiled by the central bank.
Shares of State Bank have dropped 33 percent this year, more than double the decline in the BSE India Sensitive Index, on concern that the steepest increases in borrowing costs among major Asian economies may spur defaults. The central bank has raised borrowing costs by 375 basis points since March 2010 in the fastest round of increases since the Reserve Bank of India was established in 1935, Bloomberg data show.
Economy Slowing
“India’s economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates,” said Vineet Gupta, a senior analyst at Moody’s in Singapore. “At the same time, concerns have emerged over the sustainability of the recovery in the U.S. and Europe, and the rise in the borrowing program of the Indian government, which could drain funds away from the private credit market.”
Moody’s downgraded State Bank’s financial-strength rating last month, citing rising bad debts. The company’s Tier 1 capital ratio “provides an insufficient cushion” to boost lending and to absorb higher credit costs as defaults climb, it said at the time.
The government has given an “assurance” to invest about 40 billion rupees into the bank to shore up capital, Chaudhuri said today. India will inject more than 30 billion rupees into State Bank to support its growth, a finance ministry official told reporters in New Delhi on Nov. 1.
Capital Infusion
State Bank has been in talks with the government for a capital infusion of about 200 billion rupees since at least February 2010 as it seeks funds to meet credit demand in Asia’s second-fastest growing major economy.
The bank reported an overall capital ratio of 11.4 percent and Tier 1 capital ratio of 7.47 percent as of Sept. 30. The Tier 1 ratio is below the 8 percent that the government targets for the state-run lenders. Chaudhuri said today that the ratio is poised to reach 9 percent by March.
ICICI Bank Ltd., India’s second-largest lender by assets, had Tier 1 capital adequacy of 13.1 percent as of Sept. 30. The Mumbai-based bank posted a 22 percent increase in net income for the quarter.
To contact the reporters on this story: Anto Antony in New Delhi at aantony1@bloomberg.net; Ruth David in Mumbai at rdavid9@bloomberg.net
To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Tuesday, November 8, 2011
Asia Stocks Rise as Berlusconi Offers to Resign By Jonathan Burgos and Yoshiaki Nohara - Nov 8, 2011
Asian stocks rose for the first time in three days as Italian Prime Minister Silvio Berlusconi’s offer to resign bolstered optimism Europe may find a way to contain its debt crisis, and China’s inflation rate eased.
Industrial & Commercial Bank of China (601398) Ltd. led a rally among Chinese lenders higher in Hong Kong as the nation’s inflation rate moderated to 5.5 percent last month. Westpac Banking Corp. (WBC), Australia’s second-largest lender by market value, gained 1.2 percent in Sydney as Australian home-loan approvals rose more than estimated in September. Inpex Corp. (1605), Japan’s biggest energy explorer, rose 2.7 percent in Tokyo after crude oil futures jumped to a three-month high.
“The markets will take the near-term resolution of political uncertainties in Europe positively,” said John Woods, Hong Kong-based chief Asian strategist at Citigroup Inc.’s private bank. “Now that we see inflation easing, it suggests that Asian central banks can switch to a more pro-growth strategy.”
The MSCI Asia Pacific Index increased 1.4 percent to 120.83 as of 11:11 a.m. in Tokyo, with almost five stocks rising for each that fell on the gauge. The measure sank 3.6 percent last week after Greece announced plans to hold a referendum on Europe’s rescue package. The sovereign-debt crisis has stirred political dramas across the region, with Berlusconi offering to resign just days after Greek Prime Minister George Papandreou stepped down.
Japan’s Nikkei 225 (NKY) Stock Average rose 0.9 percent. South Korea’s Kospi Index added 0.4 percent. Hong Kong’s Hang Seng Index climbed 2.1 percent, while China’s Shanghai Composite Index gained 0.3 percent. Australia’s S&P/ASX 200 climbed 1.4 percent.
‘Taming Political Risks’
Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index advanced 1.2 percent yesterday as Berlusconi agreed to quit after the Italian parliament next week approves austerity plans promised to European partners. The announcement came after the premier yesterday failed to muster an absolute majority on a routine parliamentary ballot.
“A change in premiership is going to tame political risks somewhat because criticism against Berlusconi was strong,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $322 billion. “Berlusconi’s resignation gives a short-term positive for the market, while the focus switches to austerity measures.”
The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 1.5 percent gain by the S&P 500 and a 13 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.4 times for the Stoxx 600.
A gauge of raw-material produces led the advance among the 10 industry groups in the regional benchmark index. Crude oil for December delivery rose $1.28 to $96.80 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since July 28.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Industrial & Commercial Bank of China (601398) Ltd. led a rally among Chinese lenders higher in Hong Kong as the nation’s inflation rate moderated to 5.5 percent last month. Westpac Banking Corp. (WBC), Australia’s second-largest lender by market value, gained 1.2 percent in Sydney as Australian home-loan approvals rose more than estimated in September. Inpex Corp. (1605), Japan’s biggest energy explorer, rose 2.7 percent in Tokyo after crude oil futures jumped to a three-month high.
“The markets will take the near-term resolution of political uncertainties in Europe positively,” said John Woods, Hong Kong-based chief Asian strategist at Citigroup Inc.’s private bank. “Now that we see inflation easing, it suggests that Asian central banks can switch to a more pro-growth strategy.”
The MSCI Asia Pacific Index increased 1.4 percent to 120.83 as of 11:11 a.m. in Tokyo, with almost five stocks rising for each that fell on the gauge. The measure sank 3.6 percent last week after Greece announced plans to hold a referendum on Europe’s rescue package. The sovereign-debt crisis has stirred political dramas across the region, with Berlusconi offering to resign just days after Greek Prime Minister George Papandreou stepped down.
Japan’s Nikkei 225 (NKY) Stock Average rose 0.9 percent. South Korea’s Kospi Index added 0.4 percent. Hong Kong’s Hang Seng Index climbed 2.1 percent, while China’s Shanghai Composite Index gained 0.3 percent. Australia’s S&P/ASX 200 climbed 1.4 percent.
‘Taming Political Risks’
Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index advanced 1.2 percent yesterday as Berlusconi agreed to quit after the Italian parliament next week approves austerity plans promised to European partners. The announcement came after the premier yesterday failed to muster an absolute majority on a routine parliamentary ballot.
“A change in premiership is going to tame political risks somewhat because criticism against Berlusconi was strong,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $322 billion. “Berlusconi’s resignation gives a short-term positive for the market, while the focus switches to austerity measures.”
The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 1.5 percent gain by the S&P 500 and a 13 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.4 times for the Stoxx 600.
A gauge of raw-material produces led the advance among the 10 industry groups in the regional benchmark index. Crude oil for December delivery rose $1.28 to $96.80 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since July 28.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Monday, November 7, 2011
Sensex Index Advance as Indian Earnings Weather Inflation, Interest Rates By Rajhkumar K Shaaw - Nov 7, 2011
India’s stocks climbed for the third day on signs company profits may weather accelerating inflation and higher interest rates.
Oil & Natural Gas Corp., the nation’s biggest state energy explorer, advanced the most in two weeks after reporting record quarterly earnings. Jaiprakash Associates Ltd., a builder of roads and bridges, climbed 2.2 percent.
The BSE India Sensitive Index, or Sensex, added 0.3 percent to 17,610.21 at 9:25 a.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange increased 0.3 percent to 5,298.70. Its November futures traded at 5,322.45. The markets were closed yesterday for a public holiday.
Five out of 17, or 29 percent, of Sensex companies that posted earnings for the September quarter have lagged behind analyst estimates, compared with 47 percent in the three months ended June, according to Bloomberg data. India’s manufacturing quickened in October, a sign the economy is withstanding record interest-rate increases and a faltering global recovery.
Overseas funds bought a net 779 million rupees of Indian stocks on Nov. 3, raising total investment in the equities this year to 21.7 billion rupees, according to data on the website of the market regulator. They withdrew a net $2.4 billion in August, the most since October 2008.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Oil & Natural Gas Corp., the nation’s biggest state energy explorer, advanced the most in two weeks after reporting record quarterly earnings. Jaiprakash Associates Ltd., a builder of roads and bridges, climbed 2.2 percent.
The BSE India Sensitive Index, or Sensex, added 0.3 percent to 17,610.21 at 9:25 a.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange increased 0.3 percent to 5,298.70. Its November futures traded at 5,322.45. The markets were closed yesterday for a public holiday.
Five out of 17, or 29 percent, of Sensex companies that posted earnings for the September quarter have lagged behind analyst estimates, compared with 47 percent in the three months ended June, according to Bloomberg data. India’s manufacturing quickened in October, a sign the economy is withstanding record interest-rate increases and a faltering global recovery.
Overseas funds bought a net 779 million rupees of Indian stocks on Nov. 3, raising total investment in the equities this year to 21.7 billion rupees, according to data on the website of the market regulator. They withdrew a net $2.4 billion in August, the most since October 2008.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Sunday, November 6, 2011
Euro, Asian Stocks Fall Before Italy Vote
By Shiyin Chen - Nov 6, 2011
The euro weakened against the dollar and yen, while Asian stocks declined as concern Italian Prime Minister Silvio Berlusconi will fail to muster a majority for a key parliamentary vote tomorrow overshadowed Greece’s plans to form a national unity government. The Swiss franc dropped.
The 17-nation currency retreated 0.2 percent to $1.3769 and lost 0.3 percent to 107.59 yen as of 1:05 p.m. in Tokyo. The franc sank 0.8 percent versus the euro after the central bank signaled it is ready to act if the currency’s strength threatens Switzerland’s economy. The MSCI Asia Pacific Index slipped 0.3 percent, while Standard & Poor’s 500 Index futures dipped 0.2 percent, down from an increase of as much as 0.6 percent. Oil was set for a fourth day of gains. Gold reached a six-week high.
Italy’s parliament will vote tomorrow on the 2010 budget report amid an unraveling of Berlusconi’s majority and a surge in the nation’s borrowing costs. Greek Prime Minister George Papandreou agreed to step down as a new government is created to secure international financing and avert a collapse of its economy. European finance chiefs will meet in Brussels today to work on details of a plan to bulk out the region’s bailout fund.
“It’s a short-term fix but even a new government needs to cut spending, increase taxes and get their house in order, so it’s not over yet,” said Kumar Palghat, managing director and founder of Kapstream Capital Pty, referring to Greece. “The next step is what happens in Italy. We’re really not out of the woods yet when it comes to Europe,” he said in a Bloomberg Television interview from Sydney.
Greece, Italy
The euro weakened 2.5 percent last week on Papandreou’s decision to put the terms of the European Union’s rescue plan to a referendum.
Investor concern about Italy’s ability to cut the region’s second-biggest debt load sent the yield on the nation’s 10-year bond to about 6.4 percent on Nov. 4. Two Berlusconi allies defected to the opposition last week and a third quit yesterday. Six others called for the Prime Minister to resign and seek a more broadly backed government in a letter to newspaper, Corriere della Sera.
“The market’s focus is shifting to Italy,” said Yunosuke Ikeda, an analyst of foreign-exchange research at Nomura Securities Co. “Yields on Italian bonds may continue to rise unless Berlusconi resigns. The euro is likely to inch lower amid the flow of rather bad news out of Europe.”
The Swiss franc weakened against all 16 major peers after central bank President Philipp Hildebrand said in an interview with NZZ am Sonntag newspaper that policy makers expect the currency to depreciate further. It traded at 1.2304 per euro and declined 1 percent to 89.36 centimes versus the dollar.
Government Intervention
Concern that Europe’s sovereign-debt crisis will spread and global economic growth is slowing has buoyed demand for havens such as the franc and yen, spurring Swiss and Japanese policymakers to intervene in currency markets. The yen climbed 0.1 percent to 78.14 per dollar, after advancing to a post-World War II record on Oct. 31.
About four shares retreated for every three that gained on MSCI’s Asia Pacific Index, which sank 3.6 percent last week. Japan’s Nikkei 225 Stock Average slid 0.4 percent, Australia’s S&P/ASX 200 Index decreased 0.5 percent, while Hong Kong’s Hang Seng Index slid 0.2 percent. Markets in India, Singapore, Malaysia and the Philippines are closed for a holiday today.
Asics Corp. tumbled 11 percent in Tokyo after the sporting goods maker cut its full-year net-income forecast. Furukawa Electric Co. slumped 10 percent after the cable maker forecast a full-year loss.
Futures on the S&P 500 signal the U.S. stocks gauge may extend the Nov. 4 drop of 0.6 percent. Treasury 10-year yields climbed three basis points to 2.06 percent, rebounding from a decrease of four basis points on Nov. 4. The U.S. Treasury Department plans to sell $72 billion of notes over three days this week, beginning with tomorrow’s sale of three-year debt.
Oil rose for a fourth day, gaining as much as 0.7 percent to $94.96 a barrel in electronic trading on the New York Mercantile Exchange. Gold for immediate-delivery climbed as much as 1 percent to $1,772.03 an ounce before trading at $1,769.27.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
The euro weakened against the dollar and yen, while Asian stocks declined as concern Italian Prime Minister Silvio Berlusconi will fail to muster a majority for a key parliamentary vote tomorrow overshadowed Greece’s plans to form a national unity government. The Swiss franc dropped.
The 17-nation currency retreated 0.2 percent to $1.3769 and lost 0.3 percent to 107.59 yen as of 1:05 p.m. in Tokyo. The franc sank 0.8 percent versus the euro after the central bank signaled it is ready to act if the currency’s strength threatens Switzerland’s economy. The MSCI Asia Pacific Index slipped 0.3 percent, while Standard & Poor’s 500 Index futures dipped 0.2 percent, down from an increase of as much as 0.6 percent. Oil was set for a fourth day of gains. Gold reached a six-week high.
Italy’s parliament will vote tomorrow on the 2010 budget report amid an unraveling of Berlusconi’s majority and a surge in the nation’s borrowing costs. Greek Prime Minister George Papandreou agreed to step down as a new government is created to secure international financing and avert a collapse of its economy. European finance chiefs will meet in Brussels today to work on details of a plan to bulk out the region’s bailout fund.
“It’s a short-term fix but even a new government needs to cut spending, increase taxes and get their house in order, so it’s not over yet,” said Kumar Palghat, managing director and founder of Kapstream Capital Pty, referring to Greece. “The next step is what happens in Italy. We’re really not out of the woods yet when it comes to Europe,” he said in a Bloomberg Television interview from Sydney.
Greece, Italy
The euro weakened 2.5 percent last week on Papandreou’s decision to put the terms of the European Union’s rescue plan to a referendum.
Investor concern about Italy’s ability to cut the region’s second-biggest debt load sent the yield on the nation’s 10-year bond to about 6.4 percent on Nov. 4. Two Berlusconi allies defected to the opposition last week and a third quit yesterday. Six others called for the Prime Minister to resign and seek a more broadly backed government in a letter to newspaper, Corriere della Sera.
“The market’s focus is shifting to Italy,” said Yunosuke Ikeda, an analyst of foreign-exchange research at Nomura Securities Co. “Yields on Italian bonds may continue to rise unless Berlusconi resigns. The euro is likely to inch lower amid the flow of rather bad news out of Europe.”
The Swiss franc weakened against all 16 major peers after central bank President Philipp Hildebrand said in an interview with NZZ am Sonntag newspaper that policy makers expect the currency to depreciate further. It traded at 1.2304 per euro and declined 1 percent to 89.36 centimes versus the dollar.
Government Intervention
Concern that Europe’s sovereign-debt crisis will spread and global economic growth is slowing has buoyed demand for havens such as the franc and yen, spurring Swiss and Japanese policymakers to intervene in currency markets. The yen climbed 0.1 percent to 78.14 per dollar, after advancing to a post-World War II record on Oct. 31.
About four shares retreated for every three that gained on MSCI’s Asia Pacific Index, which sank 3.6 percent last week. Japan’s Nikkei 225 Stock Average slid 0.4 percent, Australia’s S&P/ASX 200 Index decreased 0.5 percent, while Hong Kong’s Hang Seng Index slid 0.2 percent. Markets in India, Singapore, Malaysia and the Philippines are closed for a holiday today.
Asics Corp. tumbled 11 percent in Tokyo after the sporting goods maker cut its full-year net-income forecast. Furukawa Electric Co. slumped 10 percent after the cable maker forecast a full-year loss.
Futures on the S&P 500 signal the U.S. stocks gauge may extend the Nov. 4 drop of 0.6 percent. Treasury 10-year yields climbed three basis points to 2.06 percent, rebounding from a decrease of four basis points on Nov. 4. The U.S. Treasury Department plans to sell $72 billion of notes over three days this week, beginning with tomorrow’s sale of three-year debt.
Oil rose for a fourth day, gaining as much as 0.7 percent to $94.96 a barrel in electronic trading on the New York Mercantile Exchange. Gold for immediate-delivery climbed as much as 1 percent to $1,772.03 an ounce before trading at $1,769.27.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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