Weekly News Round-up: 04 December 2010

Here is a quick look on the news of the last week that have a bearing on the stocks that is mentioned in the good buys watch list in my weekly portfolio review. A snapshot with link of some interesting reports is appended at the bottom. Hope it will be useful to you if you follow my wathclist.

News Update

Honda Motor Co plans to sell its stake in India’s top-ranked motorcycle maker, Hero Honda Motors , and instead focus on its wholly owned subsidiary in the country, a news report said on Saturday. The Japanese automaker may earn some 100 billion yen (1.2 billion dollars) from the sale of its shares in Hero Honda, founded in 1984 with India’s Hero Group, the Nikkei business daily said. Honda and the Hero Group reached a basic accord this week to dissolve their partnership, Nikkei said, adding that they will seek final approval from their respective boards of directors later this month for the break-up. – The Economic Times, Dec 4, 2010

India’s top motorcycle maker, Hero Honda, has agreed to increase its royalty payments to Honda Motor Co to 8 percent of annual sales in return for a technology makeover and a stake sale by the Japanese firm in the venture, the Business Standard reported. The newspaper cited unnamed industry sources as saying that Honda had agreed to cut stake in the joint venture with India’s Hero Group to 20 percent from 26 percent now, and to sell the balance to Hero Group at a discount to the current market price. – The Economic Times, Dec 2, 2010

The country’s largest two-wheeler maker Hero Honda today posted sale of 4,21,366 units for November, registering a jump of 10.48 per cent over the same month last year. The company had sold 3,81,378 units in the same month last year, Hero Honda said in a statement.  – The Indian Express, Dec 1, 2010

Auto major Mahindra and Mahindra said it will launch two SUV models — Kornado and Rexton — from its Ssangyong Motor Company Limited (SYMC) portfolio by next year. The company recently announced that it has signed a definitive agreement with SYMC to acquire 70 per cent stake in the ailing South Korean auto maker for USD 463 million (about Rs 2105 crore).  – The Indian Express, Dec 3, 2010

Auto maker Mahindra & Mahindra today (M&M) reported an 18-per cent jump in its total sales in November at 26,666 units. The company had sold 22,589 units in the corresponding month last year, M&M said in a statement.  – Business Standard, Dec 1, 2010

Mahindra & Mahindra will launch the compressed natural gas-powered variant of its Logan car at around Rs 5.20 lakh, in an attempt to spruce sales of the entry-level sedan. The car, to cost Rs 56,000 more than the traditional petrol model, will be made available in only two cities, Mumbai and Delhi initially, but will be distributed in other cities such as Kanpur, Surat and Ahmedabad at later stages. – Business Standard, Dec 1, 2010

Medical equipment-maker Opto Circuits today said it will conclude the merger of US-based Cardiac Science Corp with itself in the next few days. In October, India-based Opto Circuits had announced that it would snap up cardiology device-maker Cardiac Science at a price tag of around $85 million (about Rs 375 crore). – Business Standard, Dec 2, 2010

Bharti Airtel Ltd.’s Nigerian unit cut its mobile-phone call rate by 50 percent in a bid to attract customers from rivals six months after entering Africa’s biggest telecommunications market. The move is in line with the company’s policy to reduce costs for customers, Rajan Swaroop, chief executive officer of Airtel Nigeria, said in an e-mailed statement late yesterday. The rate was cut to 12 naira ($0.08) a minute from 24 naira, according to information on its website. – Bloomberg, Dec 2, 2010

Country’s largest power producer NTPC has tied up with a Singapore-based bank for a $300 million loan for funding its financial plans in this fiscal, a senior company official said today. The loan is for seven-year period, Mr. Singhal added.  – The Hindu, Dec 1, 2010

NTPC Ltd., India’s biggest power producer, plans to place orders for generators worth at least 328.5 billion rupees ($7.2 billion) by March 31 as it accelerates capacity addition to help reduce blackouts.  The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units, Chairman Arup Roy Choudhury said in an interview at his office in New Delhi Nov. 26. The equipment cost per megawatt is 25 million to 30 million rupees, he said. – Bloomberg, Nov 29, 2010

State-owned BHEL has bagged an order to supply the country’s first super critical 700-MW coal fire unit by Karnataka Power Corporation Ltd (KPCL) for its thermal power station (TPS) at Bellary. The order is valued at Rs 3,700 crore, BHEL said in a press release today. – The Economic Times, Nov 30, 2010

Indian technology outsourcing firm Tech Mahindra Ltd. is looking for potential acquisitions in Latin America jointly with its software outsourcing unit Satyam Computer Services Ltd. in a bid to bolster the two companies’ foothold in the region and cater to global customers. – The Wall Street Journal, Nov 30, 2010

India’s software services company Geometric Ltd is in price negotiations with a German firm for buyout and has earmarked $20-30 million for acquisitions over next three years, a top official told Reuters on Monday. – The Economic Times, Nov 30, 2010

Interesting Read

Mid-tier IT firms look to shore up onsite presence

A revival in information technology spends, rising demand and the lure of larger contracts are prompting mid-size software service firms to step up their onsite presence, especially in the United States, industry watchers said. Increasing resources at overseas locations could also shield IT companies from any potential protectionist moves by governments, while better positioning them to tap into gradually reviving IT budgets.


Rally in cement shares seems premature

Cement prices have weakened due to oversupply in most regions. Cement prices, up nearly 20% from April until August, fell sharply thereafter. In November, they dipped by an average of Rs.15-20/bag over August across the country, barring the eastern region. As if defying industry fundamentals, share prices of most cement firms have appreciated in the past three months. Output, too, has declined. November despatches of some pan-India players such as Ambuja Cements Ltd and UltraTech Cement Ltd are not very encouraging. They declined by 9-10% over the year-ago period. However, despatches from ACC Ltdand Jaiprakash Associates Ltd rose 5% and 13%, respectively, due to capacity addition. Demand growth, too, has been weak, partly due to the high base effect of fiscal 2010 and partly due to poor offtake from real estate and slower infrastructure growth. http://www.livemint.com/2010/12/02221446/Rally-in-cement-shares-seems-p.html?atype=tp

MphasiS bets on software products for next billion

The newest entrant into the billion-dollar club of Indian IT services companies, MphasiS, is looking at software products as a growth engine that could take it closer to the next billion. The firm has already incubated two products and is currently refining its go-to-market strategy. Executives from the company said the firm is “testing out” a hospital information management (HIM) product, designed and developed entirely for small to medium-sized hospitals in emerging geographies. According to industry watchers, hospital information system is globally a $20 billion market; the Asian market, including Japan, may be worth $4 billion. http://www.financialexpress.com/news/mphasis-bets-on-software-products-for-next-billion/717743/0

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One thought on “Weekly News Round-up: 04 December 2010”

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