Taking cues from the firm Asian markets the Indian markets opened strong with the BSE benchmark index, Sensex up 132 points at 18,177 and the Nifty started off the day above the 5,400 level, gaining 32 points at 5,445.In the broader markets, the midcap and the smallcap indices added 0.4% each, underperforming the Sensex which added 0.6%.
Among the sectoral indices, there was renewed buying interest seen in the beaten down spaces like Realty and Bankex which gained 1% ecah in the opening trades. However, rate sensitive, Auto space started the day in the negative, giving off nearly 1%. Capital Goods and FMCG indices were also quiet with a gain of 0.4%. Tata Motors and Hero Honda shedding 3% and 1% respectively are weighing on the auto space.
Among the Sensex gainers in the opening trades are realty major DLF up nearly 2% followed by ICICI Bank, ONGC, Reliance Infrastructure, HDFC, Jaiprakash Associates and Bharti Airtel adding 1% each.
Apart from the auto scrips, Hindustan Unilever down 0.7% was the onlt loser among the Sensex scrips.
The market breadth was positive. Of the total 1326 scrips traded on the BSE, 901 scrips advanced while 365 declined.
Thursday, May 26, 2011
Indian exchanges given SME platform go-ahead
The Bombay Stock Exchange and National Stock Exchange of India have both secured provisional approval from India’s markets regulator to establish separate platforms for small and medium sized companies as the two go head-to-head for market share.
The new SME platforms will allow Indian companies to list at a lower cost and raise a smaller amount of money than on the main boards. The new platforms aim to increase visibility among investors and venture capitalists as well as providing liquidity for shareholders and encouraging entrepreneurship in India.
Madhu Kannan, chief executive of the BSE, said the SME platform would tie in well with the government’s agenda of opening up India’s markets to more of the population. He said it would also provide “promising enterprises of the future to access retail capital”.
Mr Kannan, a former banker who has worked for the New York Stock Exchange and Merrill Lynch, was appointed as head of the BSE two years ago with an agenda to drive through reforms at the 136-year old exchange, which had been steadily losing market share to its younger rival, the NSE.
Ravi Narain, chief executive of the NSE, said SMEs played a critical role in the Indian economy: “We are committed to providing a world class platform to deserving SMEs to give them the opportunity to list. This will give them access to the capital markets in an efficient manner and help them to raise capital to meet their growth opportunities.”
The Securities and Exchange Board of India, the market regulator, set out guidelines for an SME exchange last year, relaxing rules in an effort to make it easier for SMEs to list. Companies listing on the new trading platforms, for example, would only have to report half-yearly and not quarterly.
The BSE said it expected to secure final approval from Sebi in the next few months after it had addressed a number of technical, regulatory and arbitration issues. The NSE said it was making good progress to “operationalise” the platform.
The new trading platform will follow a hybrid model that copies elements from other exchanges such as London’s junior Aim market or Nasdaq OMX.
The Multi Commodity Exchange of India, controlled by Indian markets entrepreneur Jignesh Shah’s Financial Technologies, has also signalled interest in launching its own SME platform.
With only 2 per cent of India’s 1.2bn population involved in market trading, commentators point to the huge growth potential in India.
Research by the International Monetary Fund and Standard Chartered suggests that India could move from being the world’s tenth largest economy, with a GDP of $1,700bn, to the world’s third largest economy by 2030.
The Organisation for Economic Co-operation and Development said on Wednesday that it expected India’s economy to grow about 8.5 per cent this year.
The new SME platforms will allow Indian companies to list at a lower cost and raise a smaller amount of money than on the main boards. The new platforms aim to increase visibility among investors and venture capitalists as well as providing liquidity for shareholders and encouraging entrepreneurship in India.
Madhu Kannan, chief executive of the BSE, said the SME platform would tie in well with the government’s agenda of opening up India’s markets to more of the population. He said it would also provide “promising enterprises of the future to access retail capital”.
Mr Kannan, a former banker who has worked for the New York Stock Exchange and Merrill Lynch, was appointed as head of the BSE two years ago with an agenda to drive through reforms at the 136-year old exchange, which had been steadily losing market share to its younger rival, the NSE.
Ravi Narain, chief executive of the NSE, said SMEs played a critical role in the Indian economy: “We are committed to providing a world class platform to deserving SMEs to give them the opportunity to list. This will give them access to the capital markets in an efficient manner and help them to raise capital to meet their growth opportunities.”
The Securities and Exchange Board of India, the market regulator, set out guidelines for an SME exchange last year, relaxing rules in an effort to make it easier for SMEs to list. Companies listing on the new trading platforms, for example, would only have to report half-yearly and not quarterly.
The BSE said it expected to secure final approval from Sebi in the next few months after it had addressed a number of technical, regulatory and arbitration issues. The NSE said it was making good progress to “operationalise” the platform.
The new trading platform will follow a hybrid model that copies elements from other exchanges such as London’s junior Aim market or Nasdaq OMX.
The Multi Commodity Exchange of India, controlled by Indian markets entrepreneur Jignesh Shah’s Financial Technologies, has also signalled interest in launching its own SME platform.
With only 2 per cent of India’s 1.2bn population involved in market trading, commentators point to the huge growth potential in India.
Research by the International Monetary Fund and Standard Chartered suggests that India could move from being the world’s tenth largest economy, with a GDP of $1,700bn, to the world’s third largest economy by 2030.
The Organisation for Economic Co-operation and Development said on Wednesday that it expected India’s economy to grow about 8.5 per cent this year.
Tech Mahindra: Recovery in telecom spending bodes well; stock up
The country's fifth-largest software exporter Tech Mahindra, continued its earlier subdued performance even during the March 2011 quarter.
While the company managed a marginal revenue growth during the quarter, compared with earlier quarters, the growth in bottomline remained more or less flat.
At 9:42 am, shares of Tech Mahindra were trading 0.21 per cent up at Rs 660 on the Bombay Stock Exchange . It hit a low of Rs 587.15 nad a high of Rs 664.30 in trade so far.
The company's growth has remained restricted over the past few quarters due to turbulence in the global telecom sector, which contributes a major chunk of the company's overall business.
Also, the performance of the company's largest customer - British Telecom , which contributes over 40% to the overall business, has remained unstable in the past.
Facing these challenges, the slight increase in discretionary spends globally comes as a positive for the company. While demand from the the US and Europe continue to remain slow, emerging markets have shown healthy signs of demand revival.
To address the new technology initiatives such as cloud computing, Tech Mahindra has expanded its service offerings beyond applications to include infrastructure management, BPO, security, VAS & network services.
During the quarter, the company posted a 4.2% revenue growth atRs1,262 crore, against the previous quarter, driven largely by a 2.5% volume growth. On the operational front, increased selling, general and administrative expenses relative to net sales resulted in a more or less flat operating profit margin at 20.4%.
Wage hikes and pricing pressures in the coming quarters are likely to act as a headwind squeezing margins further. The company's bottomline also showed a flattish trend at Rs208 crore, on a sequential basis.
During the March 2011 quarter, the company's BT driven revenue stood at £70 million, which is expected to remain stagnant. However, non-BT revenues grew at 9% sequentially, showing signs of revival.
The company has witnessed an improved traction in its Africa business, where it is serving 2,000 clients across 7 countries. The Vodafone projects in Australia and Qatar, signed in the March quarter, bode well for the company. Tech Mahindra has witnessed increased demand from the emerging markets. This is evident from a significant employee addition of 4,125 during the quarter.
The stock is currently trading at 11.6 times its earnings for FY11. A strong traction is expected from emerging markets for the company in the coming quarters.
Also, the recovery in telecom spending and synergies from an ultimate merger with subsidiary Mahindra Satyam are positive signs for the company going ahead.
While the company managed a marginal revenue growth during the quarter, compared with earlier quarters, the growth in bottomline remained more or less flat.
At 9:42 am, shares of Tech Mahindra were trading 0.21 per cent up at Rs 660 on the Bombay Stock Exchange . It hit a low of Rs 587.15 nad a high of Rs 664.30 in trade so far.
The company's growth has remained restricted over the past few quarters due to turbulence in the global telecom sector, which contributes a major chunk of the company's overall business.
Also, the performance of the company's largest customer - British Telecom , which contributes over 40% to the overall business, has remained unstable in the past.
Facing these challenges, the slight increase in discretionary spends globally comes as a positive for the company. While demand from the the US and Europe continue to remain slow, emerging markets have shown healthy signs of demand revival.
To address the new technology initiatives such as cloud computing, Tech Mahindra has expanded its service offerings beyond applications to include infrastructure management, BPO, security, VAS & network services.
During the quarter, the company posted a 4.2% revenue growth atRs1,262 crore, against the previous quarter, driven largely by a 2.5% volume growth. On the operational front, increased selling, general and administrative expenses relative to net sales resulted in a more or less flat operating profit margin at 20.4%.
Wage hikes and pricing pressures in the coming quarters are likely to act as a headwind squeezing margins further. The company's bottomline also showed a flattish trend at Rs208 crore, on a sequential basis.
During the March 2011 quarter, the company's BT driven revenue stood at £70 million, which is expected to remain stagnant. However, non-BT revenues grew at 9% sequentially, showing signs of revival.
The company has witnessed an improved traction in its Africa business, where it is serving 2,000 clients across 7 countries. The Vodafone projects in Australia and Qatar, signed in the March quarter, bode well for the company. Tech Mahindra has witnessed increased demand from the emerging markets. This is evident from a significant employee addition of 4,125 during the quarter.
The stock is currently trading at 11.6 times its earnings for FY11. A strong traction is expected from emerging markets for the company in the coming quarters.
Also, the recovery in telecom spending and synergies from an ultimate merger with subsidiary Mahindra Satyam are positive signs for the company going ahead.
Tata Motors: Volume growth may be tough; stock slumps
Tata Motors posted its highest-ever quarterly consolidated profits for the March 2011 quarter in line with the Street's expectations. However, the signs of a slowdown have become visible with pressure on margin. On the other hand, the company has a significantly better balance sheet compared with a year ago, making it ready to face headwinds.
At 9:35 am, shares of Tata Motors were trading down 5.19 per cent atyRs 1101 on the Bombay Stock Exchange . It hit a low of Rs 1099.10 and a high of Rs 1185 in trade so far.
The company's operating profit margins for the March '11 quarter at 12.8% were the lowest in the four quarters of FY11 and the 27% growth in operating profit to Rs4,545.9 crore was the slowest during any quarter of the year. The year-on-year growth in net profit was a paltry 18% for the quarter. However, it was due to inflated profits of the year-ago period, following a sale of investments.
The company ended FY11 with a significantly strengthened balance sheet thanks to the 3.6 times jump in annual profits and also the capital infusion. The company issued Rs3,350 crore through qualified institutional placement in October 2010 and FCCB conversions added another 2.36 crore equity shares between November and March 2011. This has brought down the promoter group's shareholding from 37% a year ago to 34.83% by end-March '11.
As a result, the debt burden came down 6.6% through FY11 to Rs32,791 crore. This was 1.7 times its consolidated equity, against 4.3 a year ago. However, considering the Rs9,900-crore debt portfolio of its auto-finance subsidiary and its cash balance of Rs10,948 crore, net debt-toequity stands at 0.69.
For the full year, the company achieved a 33% revenue growth to Rs1,23,133 crore thanks mainly to the strong volume growth - 23% up in domestic and 70% jump in exports - while the price hikes remained just around 5% in both commercial as well as passenger car segments. A substantial jump in operating margins, reduction in interest cost and a benign increase in depreciation and tax expenses helped it clock a fantastic 261% jump in net profit to Rs9,274 crore.
The company faces many challenges going ahead. The macro-economic factors such as high inflation, rising interest rates and slower industrial growth have the potential to adversely impact demand for automobiles, while cost concerns continue with high commodity prices.
The company will focus mainly on export growth in both commercial as well as passenger vehicle segments and continue expanding and improving its product portfolio. It appears difficult for the company to maintain its volume growth, but reduction in interest and other costs could see it improve profits in the coming quarters.
At 9:35 am, shares of Tata Motors were trading down 5.19 per cent atyRs 1101 on the Bombay Stock Exchange . It hit a low of Rs 1099.10 and a high of Rs 1185 in trade so far.
The company's operating profit margins for the March '11 quarter at 12.8% were the lowest in the four quarters of FY11 and the 27% growth in operating profit to Rs4,545.9 crore was the slowest during any quarter of the year. The year-on-year growth in net profit was a paltry 18% for the quarter. However, it was due to inflated profits of the year-ago period, following a sale of investments.
The company ended FY11 with a significantly strengthened balance sheet thanks to the 3.6 times jump in annual profits and also the capital infusion. The company issued Rs3,350 crore through qualified institutional placement in October 2010 and FCCB conversions added another 2.36 crore equity shares between November and March 2011. This has brought down the promoter group's shareholding from 37% a year ago to 34.83% by end-March '11.
As a result, the debt burden came down 6.6% through FY11 to Rs32,791 crore. This was 1.7 times its consolidated equity, against 4.3 a year ago. However, considering the Rs9,900-crore debt portfolio of its auto-finance subsidiary and its cash balance of Rs10,948 crore, net debt-toequity stands at 0.69.
For the full year, the company achieved a 33% revenue growth to Rs1,23,133 crore thanks mainly to the strong volume growth - 23% up in domestic and 70% jump in exports - while the price hikes remained just around 5% in both commercial as well as passenger car segments. A substantial jump in operating margins, reduction in interest cost and a benign increase in depreciation and tax expenses helped it clock a fantastic 261% jump in net profit to Rs9,274 crore.
The company faces many challenges going ahead. The macro-economic factors such as high inflation, rising interest rates and slower industrial growth have the potential to adversely impact demand for automobiles, while cost concerns continue with high commodity prices.
The company will focus mainly on export growth in both commercial as well as passenger vehicle segments and continue expanding and improving its product portfolio. It appears difficult for the company to maintain its volume growth, but reduction in interest and other costs could see it improve profits in the coming quarters.
Global hospitality majors check into Bangalore
BANGALORE: With the city emerging as a hub for international business travel, global hospitality brands are checking into Bangalore rather rapidly. Starwood Hotels and Resorts opened Sheraton Hotel at Brigade Gateway in Malleswaram last week. Switzerland-based Movenpick Hotels & Resorts is opening its first 5-star property in the country in Bangalore on June 1.
Many more are in line, and over the next two years, the city will witness an addition of 2,500 rooms across categories (3-star budget to 5-star luxury). Bangalore currently has about 5,550 rooms in these categories.
Several of the new launches will be in the five-star deluxe category. Prestige Estates Projects has partnered with JW Marriott to build a 300-room luxury resort hotel —Prestige Golfshire — on Nandi Hills Road. Shangri-La on Palace Road and Ritz Carlton on Residency Road are expected to be ready within the next two years.
"A fair amount of supply has come into Bangalore which has allowed for some rate rationalization. However,there are many micro markets in Bangalore that continue to do well," said Manav Thadani, chairman of hospitality consultancy firm HVS.
Micro markets of Whitefield, Electronics City and Outer Ring Road are seeing new supplies with many IT/ITeS companies expanding on the periphery. MDB Zephyr, part of New Delhi-based MBD Group, is setting up a 200-room luxury hotel in Whitefield. Hospitality brand Alila is doing a 120-room luxury hotel in Whitefield.
Business travellers account for 80% of the demand for rooms in Bangalore. The meetings and conferences segment and the leisure segment account for 5% and 3% , according to real estate consultancy Cushman & Wakefield. "A large chunk of business is driven by corporates. Except for Aero India, there aren't big events coming to Bangalore," said Akshay Kulkarni, executive director for hospitality services South Asia, in Cushman & Wakefield. The average room rate peaked at Rs 8,500 in 2007 as per Cushman & Wakefield hospitality report 2010 . It dropped to Rs 6,600 in 2009, and has since hardened by 10-15% because of rising demand.
The incremental room supply will result in softening of room rates in the short to medium term. "Occupancy rates in Bangalore are improving with average rates more or less flat compared to last year. With the new supply, the growth in business will be absorbed leaving occupancy and average daily rates flat," said Chris Moloney, COO, South West Asia, Intercontinental Hotels Group (IHG), which will soon launch Holiday Inn Hotels and Resorts in Bangalore.
Dilip Puri, MD-India, Starwood Asia Pacific Hotels & Resorts, said the luxury room rates have corrected after the steep rise in 2007. "The average room rate for luxury hotels shot up to $400 some three years back. The recession brought about a reality check. Rentals are exactly where they should be today. Anything between $200-$250 per room night are realistic."
Many more are in line, and over the next two years, the city will witness an addition of 2,500 rooms across categories (3-star budget to 5-star luxury). Bangalore currently has about 5,550 rooms in these categories.
Several of the new launches will be in the five-star deluxe category. Prestige Estates Projects has partnered with JW Marriott to build a 300-room luxury resort hotel —Prestige Golfshire — on Nandi Hills Road. Shangri-La on Palace Road and Ritz Carlton on Residency Road are expected to be ready within the next two years.
"A fair amount of supply has come into Bangalore which has allowed for some rate rationalization. However,there are many micro markets in Bangalore that continue to do well," said Manav Thadani, chairman of hospitality consultancy firm HVS.
Micro markets of Whitefield, Electronics City and Outer Ring Road are seeing new supplies with many IT/ITeS companies expanding on the periphery. MDB Zephyr, part of New Delhi-based MBD Group, is setting up a 200-room luxury hotel in Whitefield. Hospitality brand Alila is doing a 120-room luxury hotel in Whitefield.
Business travellers account for 80% of the demand for rooms in Bangalore. The meetings and conferences segment and the leisure segment account for 5% and 3% , according to real estate consultancy Cushman & Wakefield. "A large chunk of business is driven by corporates. Except for Aero India, there aren't big events coming to Bangalore," said Akshay Kulkarni, executive director for hospitality services South Asia, in Cushman & Wakefield. The average room rate peaked at Rs 8,500 in 2007 as per Cushman & Wakefield hospitality report 2010 . It dropped to Rs 6,600 in 2009, and has since hardened by 10-15% because of rising demand.
The incremental room supply will result in softening of room rates in the short to medium term. "Occupancy rates in Bangalore are improving with average rates more or less flat compared to last year. With the new supply, the growth in business will be absorbed leaving occupancy and average daily rates flat," said Chris Moloney, COO, South West Asia, Intercontinental Hotels Group (IHG), which will soon launch Holiday Inn Hotels and Resorts in Bangalore.
Dilip Puri, MD-India, Starwood Asia Pacific Hotels & Resorts, said the luxury room rates have corrected after the steep rise in 2007. "The average room rate for luxury hotels shot up to $400 some three years back. The recession brought about a reality check. Rentals are exactly where they should be today. Anything between $200-$250 per room night are realistic."
Diesel, LPG prices may be hiked on June 9
NEW DELHI: The ministerial panel on fuels under FM Pranab Mukherjee is expected to raise diesel and cooking gas prices on June 9. Diesel price is likely to be increased by Rs 2-3 a litre and cooking gas by about Rs 35 per cylinder. The increase in price of diesel, which is the main transportation fuel, is expected to push up cost of essential items, all goods that move on trucks as well as bus and taxi fares.
A revision in diesel and cooking gas prices was in the offing since petrol price was jacked up on May 15 by Rs 5 a litre, the steepest-ever increase. The ministerial panel was expected to meet on May 11, the day after the last phase of polling was to get over in Bengal. But the government pushed the pause button in view of a see-saw in global crude prices after Osama bin-Laden's killing.
The fluctuation in crude price in the intervening period has brought down the loss on a litre of diesel from a high of Rs 19 or so, when the price of Indian crude mix averaged nearly $121 a barrel before Osama was killed. Diesel and cooking gas prices were last revised in June 2010. The present pump price of diesel corresponds to around $70 a barrel of crude mix bought by the state-run refiners. That mix is ruling at $118 now. As a result, oil marketers are currently losing Rs 16.49 on every litre of diesel and Rs 329 on each cooking gas refill.
The oil ministry will also push for an increase in the price of kerosene, politically the holy cow of fuels. The companies are losing almost Rs 30 a litre on the poor man's fuel, nearly 40% of which flows into the black market. The panel is unlikely to tinker with fuel taxes for fear of upsetting the government's calculations. Top finance ministry officials have, over the week, categorically ruled on reducing taxes to pare increase in fuel prices.
A revision in diesel and cooking gas prices was in the offing since petrol price was jacked up on May 15 by Rs 5 a litre, the steepest-ever increase. The ministerial panel was expected to meet on May 11, the day after the last phase of polling was to get over in Bengal. But the government pushed the pause button in view of a see-saw in global crude prices after Osama bin-Laden's killing.
The fluctuation in crude price in the intervening period has brought down the loss on a litre of diesel from a high of Rs 19 or so, when the price of Indian crude mix averaged nearly $121 a barrel before Osama was killed. Diesel and cooking gas prices were last revised in June 2010. The present pump price of diesel corresponds to around $70 a barrel of crude mix bought by the state-run refiners. That mix is ruling at $118 now. As a result, oil marketers are currently losing Rs 16.49 on every litre of diesel and Rs 329 on each cooking gas refill.
The oil ministry will also push for an increase in the price of kerosene, politically the holy cow of fuels. The companies are losing almost Rs 30 a litre on the poor man's fuel, nearly 40% of which flows into the black market. The panel is unlikely to tinker with fuel taxes for fear of upsetting the government's calculations. Top finance ministry officials have, over the week, categorically ruled on reducing taxes to pare increase in fuel prices.
Sunday, May 22, 2011
Reliance Fuel Exports From India Rise 25% on Gasoline, Jet-Fuel Shipments
By Pratish Narayanan - May 22, 2011
Fuel exports by Reliance Industries Ltd. (RIL), India’s largest publicly traded company, climbed 25 percent in the first half of May from a month earlier as it shipped more gasoline to the U.S. and demand for jet fuel grew.
The Mumbai-based company, which operates the world’s largest refining complex, sold at least 1 million metric tons of fuel products overseas from its Jamnagar facility from 800,000 tons in the first 15 days of April, according to ship-tracking data compiled by Bloomberg and vessel fixtures from Clarkson Research Services Ltd.
Reliance, controlled by billionaire Mukesh Ambani, is aiming to increase exports while state-owned rivals such as Indian Oil Corp. and Bharat Petroleum Corp. sell more fuel domestically at government-capped prices. Demand for gasoline in the U.S., the world’s biggest economy, peaks during the summer driving season, which lasts from the Memorial Day weekend in late May to the Labor Day holiday in early September.
Manoj Warrier, a spokesman for Reliance in Mumbai, didn’t respond to an e-mail seeking comment. All figures from Clarkson are for single-voyage bookings and exclude long-term charters. Shipbrokers aren’t obliged to report charters so the scope of data capture can vary from month to month.
Gasoline Shipments
Reliance exported at least 555,000 tons of gasoline from Jamnagar in western India during the first half of this month, according to transmissions captured by AISLive on Bloomberg and data from Clarkson Research, a unit of the world’s biggest shipbroker.
At least 41 percent of the month’s gasoline shipments went to the U.S., while other destinations included Europe, Africa and Singapore. Gasoline consumption rises when Americans take to the roads for summer vacations. Consumption tends to peak after Independence Day on July 4.
The Qi Lin Zuo was hired by New York-based Hess Corp. to transport 65,000 tons of gasoline to the U.S. from the port of Sikka near Jamnagar, the Clarkson data show. The vessel sailed from near Sikka in early May and was last tracked in the Mediterranean Sea headed to New York, according to ship transmissions captured by Bloomberg.
Reliance’s shipments of jet fuel jumped 120 percent to at least 125,000 tons in the first 15 days of this month, the data show. Jet-fuel stockpiles fell to the lowest in more than two years in Europe’s Amsterdam-Rotterdam-Antwerp oil-trading hub before the start of the peak summer travel season, according to PJK International BV.
Supplies of the aviation fuel in independent storage declined 37,000 tons, or 7 percent, to 491,000 tons, in the week to May 19, the Oosterhout, Netherlands-based researcher said. That’s the lowest since Oct. 16, 2008.
New Century
The New Century sailed from near Sikka this month, carrying 65,000 tons of jet fuel to Europe, the data show. The vessel was last tracked near the Suez Canal headed to Le Havre in France, according to ship transmissions captured by Bloomberg.
Reliance’s gasoil, or diesel, shipments were little changed at 160,000 tons during the period. Most of the diesel cargoes went to Africa, the data show. The company also shipped at least 130,000 tons of naphtha to Japan, up from 35,000 tons.
Reliance runs two refineries in the western Indian state of Gujarat, which are capable of processing heavier grades of crude. They have a combined processing capacity of 1.24 million barrels a day, and account for about 1.6 percent of global refining capacity, according to the company’s website.
To contact the reporter on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Fuel exports by Reliance Industries Ltd. (RIL), India’s largest publicly traded company, climbed 25 percent in the first half of May from a month earlier as it shipped more gasoline to the U.S. and demand for jet fuel grew.
The Mumbai-based company, which operates the world’s largest refining complex, sold at least 1 million metric tons of fuel products overseas from its Jamnagar facility from 800,000 tons in the first 15 days of April, according to ship-tracking data compiled by Bloomberg and vessel fixtures from Clarkson Research Services Ltd.
Reliance, controlled by billionaire Mukesh Ambani, is aiming to increase exports while state-owned rivals such as Indian Oil Corp. and Bharat Petroleum Corp. sell more fuel domestically at government-capped prices. Demand for gasoline in the U.S., the world’s biggest economy, peaks during the summer driving season, which lasts from the Memorial Day weekend in late May to the Labor Day holiday in early September.
Manoj Warrier, a spokesman for Reliance in Mumbai, didn’t respond to an e-mail seeking comment. All figures from Clarkson are for single-voyage bookings and exclude long-term charters. Shipbrokers aren’t obliged to report charters so the scope of data capture can vary from month to month.
Gasoline Shipments
Reliance exported at least 555,000 tons of gasoline from Jamnagar in western India during the first half of this month, according to transmissions captured by AISLive on Bloomberg and data from Clarkson Research, a unit of the world’s biggest shipbroker.
At least 41 percent of the month’s gasoline shipments went to the U.S., while other destinations included Europe, Africa and Singapore. Gasoline consumption rises when Americans take to the roads for summer vacations. Consumption tends to peak after Independence Day on July 4.
The Qi Lin Zuo was hired by New York-based Hess Corp. to transport 65,000 tons of gasoline to the U.S. from the port of Sikka near Jamnagar, the Clarkson data show. The vessel sailed from near Sikka in early May and was last tracked in the Mediterranean Sea headed to New York, according to ship transmissions captured by Bloomberg.
Reliance’s shipments of jet fuel jumped 120 percent to at least 125,000 tons in the first 15 days of this month, the data show. Jet-fuel stockpiles fell to the lowest in more than two years in Europe’s Amsterdam-Rotterdam-Antwerp oil-trading hub before the start of the peak summer travel season, according to PJK International BV.
Supplies of the aviation fuel in independent storage declined 37,000 tons, or 7 percent, to 491,000 tons, in the week to May 19, the Oosterhout, Netherlands-based researcher said. That’s the lowest since Oct. 16, 2008.
New Century
The New Century sailed from near Sikka this month, carrying 65,000 tons of jet fuel to Europe, the data show. The vessel was last tracked near the Suez Canal headed to Le Havre in France, according to ship transmissions captured by Bloomberg.
Reliance’s gasoil, or diesel, shipments were little changed at 160,000 tons during the period. Most of the diesel cargoes went to Africa, the data show. The company also shipped at least 130,000 tons of naphtha to Japan, up from 35,000 tons.
Reliance runs two refineries in the western Indian state of Gujarat, which are capable of processing heavier grades of crude. They have a combined processing capacity of 1.24 million barrels a day, and account for about 1.6 percent of global refining capacity, according to the company’s website.
To contact the reporter on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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