Week That Was

Page

Headlines
Table of Contents Headlines Market Updates Market Updates Economy and Industry Corporate News

Rate hike hits markets, Sensex down 525 points

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RBI hikes short term rates by 50 bps

3 4

Food Inflation at 20 month low at 7.33%

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Output of core sector industries up 5.2% in June

Deal Space

Presented by Team Equit-I

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India inbound M&A hits a record high of $26 billion

Anshul Jain Rajesh Kumar Acha

HCL Tech Q4 Net Surges 52%; beats forecast

Sailesh Lakhotia Saurabh Singhal Sushant Sarode

ICICI takes 29.7% GTL stake after share pledge

Email: equiti@iimidr.ac.in

Volume 7

Date: 1st August, 2011

From 25th July, 2011 to 31rd July, 2011

Week That Was

Market Updates

The markets were riled by RBI's unexpected, albeit not unprecedented, action on the rate front at its policy review meet on Tuesday, 26 July. The all-pervading nervousness across the global markets over the US debt impasse only exacerbated the prevailing mood. The BSE Sensex ended at 18197, weaker by 525 points or 2.8% and the Nifty shed 151 points or 2.6% to 5,482.

The midcap index ended at 6915 and the small-cap index ended at 8305, lower by 1.8% each.

Sensex
18,871 18,518 18,432

5,680

Nifty
5,574 5,546
Index India 5,487 5,482 Sensex Nifty

Global Markets 22-Jul 18722 5633 12681 2858 1345 5935 7326 22444 10132 29-Jul 18197 5482 12143 2756 1292 5815 7158 22440 9833 Change (2.80%)

18,210
18,197

(2.68%)
(4.24%) (3.57%) (3.94%) (2.02%) (2.29%) (0.02%) (2.95%)

Dow Jones USA Europe Asia

25-Jul

26-Jul

27-Jul

28-Jul

29-Jul

25-Jul

26-Jul

27-Jul

28-Jul

29-Jul

NASDAQ S&P 500

Sectors: Weekly Top Gainers & Losers Sector Teck Healthcare Change 0.12% 0.04% Sector Realty Capital Goods Metal Change (7.39%) (5.22%) (5.05%)

Stocks: Weekly Top Gainers & Losers Stock Idea Cellular Reliance Comm United Phosphorus Change 10.61% 8.55% 7.72% Stock SKS Microfin Adani Enterprises BGR Energy Change (23.2%) (20.5%) (13.7%)

FTSE DAX Hang Seng Nikkei

Volume 7

Date: 1st August, 2011

From 25th July, 2011 to 31rd July, 2011

Week That Was

Economic Indicators
The RBI hiked short-term borrowing and lending rates sharply by 50 basis points for the third time in three months to tame high inflation, a move that would make all personal and corporate loans more expensive. The RBI has also revised its fiscal-end inflation

Market Updates
Commodities
WTI crude remains stuck in its July range between 94 and 100 dollars as macro economic developments either side of the Atlantic continues to be the main focal point. In Brent crude the trading remains confided to the 115 to 120 dollar range for now. The spread between the two varieties has moved back above 20 dollars. Gold extended its recent gains and spent the week consolidating above USD 1,600. Silver meanwhile has been struggling to get a foothold above 40 dollars and has underperformed on a relative basis.

Foreign Exchange
The dollar on Friday hit a record low against the Swiss franc and a four-month trough against the yen, both traditional safe-haven currencies, as weak data on US economic growth ignited fears the economy could slip into another recession. The week gone by saw the USD/INR pair breaking the 43.98

projection to 7% from 6% earlier. Food inflation fell to its lowest level in 20 months at 7.33% for the week ended July 16 on the back of cheaper pulses, even as other items grew more expensive.

intermediate trend reversal levels. A bounce back however soon followed accompanied with a pick up in momentum readings.

YoY (In %) Inflation (31/05) IIP (30/04) GDP (31/03) CPI (31/05) CRR Bank rate

Current 9.1 6.3 7.8 8.72 6 6

Qtr Ago 9.54 8.1 8.3 8.82 5 6.25

Yr Ago 10.48 13.0 9.4 13.91 5 6.5 Volume 7

Price(USD) Light Crude Brent Crude Gold Silver

22-Jul 99.9 118.7 1601.9

29-Jul 95.7 116.7 1628.3

Change (4.20%) (1.68%) 1.65% No Change USD GBP Euro JPY

23-Jul 44.5912 72.7006 64.1498 0.56791

30-Jul 44.2872 72.4565 63.4516 0.57172

Change 0.68% 0.34% 1.09% (0.67%)

40.1

40.1

Light Crude and Brent Crude per barrel Gold and Silver per ounce September Contracts Date: 1st August, 2011

All currencies quoted in Indian Rupees.

From 25th July, 2011 to 31rd July, 2011

Week That Was

FICCI demands a institution to finance infrastructure sector

Economy and Industry

FICCI has reiterated its demand to set up an exclusive banking institution on the lines of National Housing Bank (NHB) and Power Finance Corporation for catering to financing needs of infrastructure sector. The construction sector is at a huge disadvantage due to a negative perception which has prevented banks from advancing loans Restriction on cotton exports set to be lifted With abundant availability and crash in prices, the government is likely to lift restrictions on cotton exports for the current season itself. The issue came in for review at a meeting of secretaries in the ministries of commerce, textiles and agriculture, convened by Commerce and Industry Minister Anand Sharma here yesterday People, particularly youngsters, returning to agriculture-ICAR A data being collected by Indian Council for Agricultural Research (ICAR) has revealed that people, particularly youngsters, are of late returning to agriculture. Use of Information and Communication Technology tools in the field of agriculture is driving more people to this sector. Output of core sector industries up 5.2% in June The output of eight core sector industries expanded 5.2% in June from a year ago, indicating little change in the level of industrial activity despite rising interest rates and worsening economic environment. Output had expanded 5.3% in May this year and 4.4% in June last year. The eight core sector industries -coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity - have a combined weight of 37.9% in the Index for industrial production (IIP), making it a good lead

indicator of industrial growth

Volume 7 Date: 1st August, 2011 From 25th July, 2011 to 31rd July, 2011

Week That Was

India inbound M&A hits a record high of $26 billion

Corporate News

Indicative of an increasing presence of global companies in the country, the India-focused merger and acquisition volume has touched USD 26 billion so far this year, which is more than double the USD 12.1 billion amount announced in the same period last year

HCL Tech Q4 Net Surges 52%; beats forecast HCL Technologies, India's fourth largest software services firm, on Wednesday posted a better-than-expected 52 percent jump in net profit for April-June, as all its verticals and geographies posted strong growth. HCL profit rose to 5.11 billion rupees for April-June, compared with a profit of 3.37 billion rupees a year ago.

Eicher Q2 profit rises 38% at Rs 76 cr

Commercial vehicle maker Eicher Motors reported 38.29% jump in its consolidated profit for the quarter ended June 30 at Rs
76.31 crore on account of good sales of its products across all verticals. The consolidated total income from operations during the second quarter also increase by 25.03% to Rs 1,298.42 crore from Rs 1,038.48 crore in the year-ago period

Ford India to build $900 million plant in Gujarat Ford Motor Company plans to invest $900 million to build a factory in Gujarat, doubling its investment in the country as the U.S. carmaker seeks to gain a greater share in the second-fastest growing auto market in the world. Several global automakers in India such as Toyota Motor Corp, Nissan Motor Co, Volkswagen and General Motors are lining up new models and boosting investment in the country with a focus on exports
Volume 7 Date: 1st August, 2011 From 25th July, 2011 to 31rd July, 2011

Week That Was

Walt Disney plans to delist UTV Software, Deal may cost $500 million

Deal Space

The Walt Disney Company has announced a delisting offer for its India unit UTV Software Communications Ltd, looking to take the media & entertainment firm private, which might cost between Rs 2,100-Rs 2,150Cr. The Walt Disney Company (Southeast Asia) Pte Ltd, which currently holds 50.44 per cent stake in UTV Software, has indicated a floor price of Rs 1,000 per share.

ICICI takes 29.7% GTL stake after share pledge ICICI Bank has assumed 29.3 per cent stake in debt-laden Indian telecoms infrastructure company GTL after taking over shares pledged by its promoter. The shares were acquired on Thursday, when GTL's stock ended at Rs 68.2 on the Bombay Stock Exchange

Cognizant to acquire Core Logic India for $50 million

Nasdaq-listed IT services firm Cognizant has struck a deal with NYSE-listed Core Logic, a firm specializing in information,
analytics and business services, to acquire Core Logic Global Services Pvt. Ltd with cash payment of $50 million plus adjustments for working capital

Cox & Kings in talks to acquire LSE listed-HolidayBreak Indian travel services firm Cox & Kings Ltd is in talks to acquire European holiday specialist, Holidaybreak Plc., in what can be the biggest overseas deal in the travel services industry. At the indicative offer price of 432.1 pence a share, the deal will value Holidaybreak at 305 million ($500 million). On the Bombay Stock Exchange, the shares of Cox & Kings closed at Rs 197.8, down 2.25 per cent
Volume 7 Date: 1st August, 2011 From 25th July, 2011 to 31rd July, 2011