India’s Rupee Has Biggest Weekly Gain in a Month on Dollar Sales

By Divya Patil - May 2, 2014

India’s rupee completed its biggest weekly gain in a month on speculation exporters repatriated overseas income to benefit from a more favorable exchange rate.
Local companies may have stepped up dollar sales after the rupee weakened 0.7 percent in April, the steepest slide since January, according to Mecklai & Mecklai Ltd. The rupee also advanced after the Federal Reserve reinforced its commitment this week to record-low borrowing costs.
“Exporters are selling dollars heavily,” said Amogh Moghe, a Mumbai-based currency trader at Mecklai & Mecklai. “The Fed’s assurance that key rates will be kept at zero also aided the currency’s appreciation” as traders look to U.S. jobs data due later today, he said.
The rupee rose 0.8 percent this week to 60.1625 per dollar in Mumbai and climbed 0.3 percent from April 30, according to prices from local banks compiled by Bloomberg. It was the biggest weekly advance since March 28. Indian financial markets were shut yesterday for a public holiday.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 15 basis points, or 0.15 percentage point, today to 11.8475 percent. It declined 27 basis points this week.
The U.S. Labor Department may report today that nonfarm payrolls increased by 218,000 in April, up from 192,000 the previous month, according to the median estimate of economists in a Bloomberg survey.
The Fed cut its monthly bond-buying program by a further $10 billion this week to $45 billion and said more reductions in “measured steps” are likely. It said in a statement on April 30 that it will keep the benchmark rate close to zero for a “considerable time” after its bond-purchasing program ends.
Three-month offshore non-deliverable forwards on the rupee rose 1.1 percent this week to 61.25 per dollar, according to data compiled by Bloomberg. The contracts advanced 0.2 percent today. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in the greenback.
To contact the reporter on this story: Divya Patil in Mumbai at dpatil7@bloomberg.net
To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net Simon Harvey, Sam Nagarajan

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Bharti Profit Misses Estimates as Africa Growth Slows By Bianca Vázquez Toness - Apr 29, 2014

Bharti Airtel Ltd. (BHARTI), India’s biggest mobile-phone operator, reported fiscal fourth-quarter profit that missed analyst estimates as revenue growth at its African business slowed.

Net income rose 89 percent to 9.62 billion rupees ($159 million) in the three months ended March 31, New Delhi-based Bharti said yesterday. That lagged behind the 9.96 billion-rupee median of 26 analyst estimates compiled by Bloomberg.

Billionaire Chairman Sunil Mittal’s company was among carriers that were prohibited from selling new SIM cards in March in Nigeria, the largest telecommunications market in Africa, after missing service quality goals. Bharti, which operates in 17 African nations, is competing with carriers including MTN Group Ltd. (MTN) to woo users on the continent.

“Africa didn’t do well,” said Daljeet Kohli, head of research at India Nivesh Securities in Mumbai. ’’That’s a disappointment because many people were looking for Africa to stabilize, that this time they would could come to a break-even point. But that has not happened, so Africa will continue to be a drag on the good work that Airtel does in India.’’

Sales increased 13 percent to 222.2 billion rupees. That missed the 223.9 billion-rupee median analyst estimates.

Shares of Bharti fell 0.8 percent to 335 rupees in Mumbai yesterday, before the earnings announcement. The stock has gained 1.4 percent this year, compared with the 6.1 percent increase in the benchmark S&P BSE Sensex Index.

Africa Slowdown

Revenue in Africa increased 16.4 percent in the three months ended March 31, slowing from a 17.2 percent pace in the preceding quarter.

“The quarter was impacted by the seasonal downturn in parts of Africa and regulatory interventions in Nigeria,” Christian de Faria, chief executive officer of Bharti’s Africa business, said in a statement. “Our teams remain focused on accelerating growth through improving the quality of network, growing the data business.”

Bharti is benefiting from an addition in subscribers as well as an increase in voice and data usage in India. Smartphone sales in the South Asian nation almost tripled in 2013, according to International Data Corp., indicating more phone users will use their mobile devices to download videos, check e-mails and use the Internet.

Mobile data revenue in the home market jumped 89 percent from a year earlier to 13.3 billion rupees, the company said.

Less Competition

Phone-service providers in India have been curtailing free minutes as competitive intensity eases. India’s Supreme Court in 2012 canceled 122 licenses to provide wireless services amid graft charges. Reliance Communications Ltd. (RCOM), India’s third-biggest phone service provider by market value, this month increased some tariffs by as much as 20 percent.

Bharti’s average revenue per user in India increased 1.6 percent in the most recent quarter to 196 rupees.

While revenue per minute for voice calls at its India operations rose to 37.07 paise in the quarter from a year earlier, it was less than the 37.13 paise in the three months ended Dec. 31.

Bharti in February agreed to acquire Loop Mobile (India) Ltd.’s 3 million users in Mumbai, India’s financial hub.

Bharti, Vodafone Group Plc’s local unit and Idea Cellular Ltd. together account for more than half the total mobile-phone subscribers in the country.India had 903 million mobile-phone connections at the end of February, according to data from the Telecom Regulatory Authority of India.

In February, operators including Bharti and Vodafone won bids for wireless spectrum. Bharti will spend 185.3 billion rupees on the purchase, the company said Feb. 13. It will pay 54.3 billion rupees upfront and the balance will be paid in 10 annual installments, starting after two years, it said.

To contact the reporter on this story: Bianca Vázquez Toness in New Delhi at btoness@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Subramaniam Sharma, Dick Schumacher

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Carlyle, Axiata Said to Enter Bids for India’s Viom Networks By George Smith Alexander and Jonathan Browning - Apr 28, 2014

Carlyle Group LP (CG) and Axiata Group Bhd. (AXIATA) are among bidders for a majority stake in India’s Viom Networks Ltd., which owns mobile-phone towers in the country, said people with knowledge of the matter.

Carlyle and Axiata submitted first-round bids, said the people, who asked not to be identified as the matter is private. Gurgaon-based Viom, controlled by Indian carrier Tata Teleservices Ltd. and SREI Infrastructure Finance Ltd. (SREI), may receive an equity valuation of as much as 80 billion rupees ($1.3 billion) in a sale, two of the people said.

“Tower companies are basically a good play on the emerging data story,” Shobhit Khare, an analyst at Motilal Oswal Securities Ltd. in Mumbai, said by phone. They will benefit from wireless carriers’ spending on high-speed fourth-generation networks over the next three years, Khare said.

The bidders are seeking control of a company that owns more than 40,000 towers as new entrants including billionaire Mukesh Ambani join the crowded Indian cellular services market. Smartphone shipments to India almost tripled last year to 44 million units, according to International Data Corp.

SREI Infrastructure rose 7.9 percent, the most since March 26, to 33.45 rupees in Mumbai trading yesterday. The benchmark S&P BSE Sensex index fell 0.3 percent.

Tata Teleservices may hold a stake in Viom after the sale, while some of the company’s private-equity investors will exit, one person said. Singaporean sovereign wealth fund GIC Pte, Macquarie SBI Infrastructure Fund and the Oman Investment Fund are among Viom’s shareholders, according to itswebsite.

Axiata Towers

Viom had less than 65 billion rupees of debt at the end of March, according to spokesman Shudeep Majumdar. Tata Teleservices holds a 53 percent stake in Viom, according to a March 28 report from Standard & Poor’s local unit Crisil Ltd.

Customers that use Viom’s towers include Tata Teleservices and Telenor ASA (TEL)’s local unit, according to one of the people.

Sarika Kapoor Choksi, a spokeswoman for Tata Group, referred queries to Viom. Viom has hired advisers to explore capital-raising options including an initial public offering in London or New York, Majumdar said. He had no comment on bids from Carlyle and Axiata.

SREI Infrastructure Chairman Hemant Kanoria said Viom will seek to raise funds overseas after India’s elections and plans haven’t been concluded yet. Carlyle declined to comment in an e-mailed statement. Faridah Hashim, a spokeswoman for Kuala Lumpur-based Axiata, declined to comment.

Axiata also has operations in Indonesia and is the second-largest shareholder in India’s Idea Cellular Ltd. The company plans to list its tower assets within two years, James Maclaurin, chief financial officer at the time, said in October.

To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net; Jonathan Browning in Hong Kong atjbrowning9@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net Ben Scent, Dick Schumacher

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Indian Nifty Futures Swing After Benchmarks Drop Most in a Week By Rajhkumar K Shaaw - Apr 27, 2014

Indian stock-index futures swung between gains and losses after benchmark indexes dropped the most in a week.

SGX CNX Nifty Index futures for May delivery fell 0.1 percent to 6,807 at 9:43 a.m. in Singapore. The underlying CNX Nifty Index declined 0.9 percent to 6,782.75 on April 25, the biggest loss since April 16. The S&P BSE Sensex (SENSEX) lost 0.8 percent. The Bank of New York Mellon India ADR Index of U.S.- traded shares fell 0.6 percent.

The Sensex climbed to a record last week amid speculation an election victory for the main opposition Bharatiya Janata Party party will spur investment and boost economic growth. Opinion polls suggest the BJP will secure the most seats, ending the Congress Party’s decade-long rule. Counting begins May 16.

“Markets are expected to consolidate around the current levels till the outcome of the elections,” Dipen Shah, head of private client group research at Kotak Securities Ltd., wrote in an e-mail.

Hindustan Unilever Ltd. (HUVR), India’s biggest household products maker, may report its fourth-quarter profit rose 8 percent from a year earlier to 8.5 billion rupees ($140 million), according to the median estimate of 29 analysts in a Bloomberg survey.

Five out of the seven Sensex companies that have reported earnings for the three months ended March 31 have either exceeded or matched estimates.

Overseas investors bought a net $138 million of Indian shares on April 23, taking this year’s inflows to $5 billion.

The Sensex has climbed 7.2 percent this year and trades at 14.3 times projected 12-month profits. The MSCI Emerging Markets Index has dropped 1 percent in 2014 and is valued at 10.4 times.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Matthew Oakley, Chan Tien Hin

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