Saturday, May 08, 2010
Glenmark Generics Ltd. announced that its US subsidiary, Glenmark Generics Inc., has entered into an exclusive licensing agreement with Par Pharmaceutical, the generic division of Par Pharmaceutical Companies, Inc. to market Ezetimibe 10 mg tablets, the generic version of Merck-Schering Plough’s Zetia in the US. Zetia is a cholesterol modifying agent with annual US sales of approximately US$1.4bn, according to IMS Health data. Glenmark believes it is the first-to-file an ANDA containing a paragraph IV certification for the product, which would potentially provide 180 days of marketing exclusivity. On April 24, 2009, Glenmark was granted tentative approval for its product by the US Food and Drug Administration (FDA).
Under the terms of the licensing and supply agreement, Par has made a payment to Glenmark for exclusive rights to market, sell and distribute Ezetimibe in the US. The companies will share in profits from the sales of the product. Glenmark is currently involved in patent litigation concerning Ezetimibe in the US District Court for the District of New Jersey. Par will share control and costs with Glenmark for ongoing litigation. A trial is scheduled to commence on May 12.
Glenmark Generics Inc., a wholly owned subsidiary of Glenmark Generics Ltd., also announced that it has entered into an exclusive license and supply agreement for a branded product with Taro Pharmaceuticals Inc. (Taro USA), a subsidiary of Taro Pharmaceutical Industries Ltd. Under the agreement, Glenmark will manufacture the FDA approved product exclusively for Taro USA. Taro USA’s branded division, TaroPharma, will be the exclusive US distributor of the product. Glenmark will receive milestone payments and a royalty on sales. Additional terms of the agreement are not being disclosed.
The rupee touched a six-week low of 45.46 but recovered some of the lost ground amid suspected intervention by the RBI. The partially convertible Indian currency closed at 45.30, after hitting its lowest since March 26, but was well below last Friday's close of 44.37. At Thursday's low, the rupee was down 1.2% on the day. Some dealers also that said exporters may have sold dollars taking advantage of the sudden fall. The rupee was also weighed down by persistent selling in Indian stocks and the dollar's gains overseas amid simmering eurozone debt worries.
The rupee fell this week on speculation that importers will step up purchases of the US currency to pay for shipments after an index that tracks the greenback's strength touched a one-year high. The rupee weakened as India’s benchmark stock index headed for the worst week in more than three months, spurring concern that global investors are exiting emerging-market assets in favor of the US currency. The Dollar Index, which tracks the greenback against the currencies of six major American trading partners, rose as high as 84.307, the highest level since May 2009.
The euro extended its losses against the dollar and yen, dropping to a fresh 14-month low below US$1.2770 and hitting a two-month low against the Japanese currency as concerns about debt problems in the euro zone mounted.
India's annual food inflation fell to 16.04% in the week ended April 24 compared to 16.61% in the previous week, data released by the Government showed. Inflation in this group stood at 8.95% in the corresponding week of last year. The WPI for Food Articles group declined by 0.1% to 292.3. Inflation in the Primary Articles group rose to 13.93% from 13.55% in the week ended April 17, according to the Commerce & Industry data. Inflation in this group was at 6.77% during the week ended April 25, 2009. The WPI for this group rose by 0.4% to 291.2. Non-Food Articles inflation rose to 11.04% from 10.61% in the week ended April 24. It was at 2.07% in the comparable week last year. The WPI for Non-Food Articles group remained unchanged at its previous week’s level of 257.5.
Inflation in the Minerals group too increased to 1.27% versus -9.55% in the week ended April 17. It was at 3.49% in the year-ago period. The WPI for Minerals group rose by 12% to 684.0. At 12.69%, inflation was unchanged in the Fuel & Power group during the week ended April 24. Inflation for this group stood at -5.54% during the corresponding week of the previous year. The WPI for this major group remained unchanged at it’s previous week’s level of 365.1. Annual, point-to-point inflation in the Coal Mining, Mineral Oils and Electricity sub-groups stood unchanged at 13.46%, 16.90% and 4.72%, respectively.
Manufacturing activity in India slowed for a second straight month, retreating from a 20-month high hit in February, as expansion in output and new order flows eased, according to the outcome of a survey released. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to 57.2 in April from 57.8 in March. It has been above 50 level for 13 months. A reading above 50 shows an expansion. Still, the underlying trends continued to improve, as demand for Indian manufactured goods was supported by better global economic conditions, successful promotional activities and good business reputations, HSBC said in a statement. Output and new orders indexes remained above 60 and employment showed modest growth in April after stagnating the month before. The output price index rose for a second month in a row to 55.8 from 54.6. It has risen nearly four points since February. The backlogs of work index jumped to an all-time high thanks to new orders, delays in delivery times and power cuts. Output prices registered their strongest increase for three months as backlogs jumped to an all time high.
The total M&A and PE (incl. QIP) deals in the month of April 2010 were valued at US$2.21bn (129 Deals) as compared to US$1.02bn (39 deals) and US$1.69bn (74 Deals) in the corresponding month of 2009 and 2008 respectively.
The total value of outbound deals (Indian companies acquiring businesses outside India) in April 2010 was US$483mn (23 deals) as compared to US$32mn (5 deals) and US$626mn (23 deals) during the corresponding month in 2009 and 2008 respectively.
The total value of inbound deals (foreign companies or their subsidiaries acquiring Indian businesses) in April 2010 was US$51mn (8 deals) as compared to US$44mn (3 deals) and US$408mn (9 deals) during the corresponding month in 2009 and 2008 respectively.
The total value of domestic deals in April 2010 was US$310mn (58 deals) as compared to US$351mn (13 deals) and US$92mn (10 deals) during the corresponding month in 2009 and 2008 respectively.
PE (incl QIP) deal values amounted to US$1.37bn (40 deals) in April 2010 as compared to US$596mn (18 deals) and US$563mn (32 deals) during the corresponding month in 2009 and 2008 respectively.
There were 5 QIP deals valued at US$516.49mn in the month of April 2010
There were 5 IPO’s listed in the month of April 2010, which raised a sum of US$179.63mn from the public. The total amount raised through IPO during the period Jan-Dec 09 was US$3335mn from 17 IPO’s.
The Government is all set to pocket a cool Rs500bn from the auction of third-generation (3G) mobile spectrum if one includes the matching bids from state-owned Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL). At Thursday's close, the Centre is expected to garner about Rs456.90bn from 3G auction alone as against projection of Rs350bn from the combined 3G-BWA auction. So, quite clearly, the final figure from the 3G-BWA auction process could well be somewhere around Rs600bn. "The revenue from 3G auction alone may cross Rs400bn. Revenues from 3G and Broadband Wireless Access (BWA) spectrum put together may touch Rs500-550bn," Telecom Minister A Raja was quoted as saying last week.
Meanwhile, bids for one set of pan-India 3G mobile licences reached Rs113.27bn, more than double the base price of Rs35bn, on the 23rd day of the auction. As per the details given by the Department of Telecommunications (DoT), four more Clock Rounds were completed on Thursday. With this, the total number of Clock Rounds completed to date has come to 132. The 3G auction started on April 9. BWA bidding will start two days after the 3G auction concludes.
Proceeds from the two auctions would help the Government bridge the fiscal deficit. India's fiscal deficit may come down to 5.2% of GDP from the estimated 5.5% of GDP. The Government has pegged the fiscal deficit at Rs3.81 lakh crores for FY11. Mumbai and Delhi continued to be among the most sought-after circles with highest bids of Rs19.87bn and Rs19.20bn, respectively. The reserve price for both the Mega Metro circles is Rs3.2bn. Maharashtra's bid stood at Rs10.62bn while that for Andhra Pradesh was at Rs9.79bn, and Gujarat at Rs9.45bn.
According to the DoT, the bidding activity requirement was set at 100% on Thursday. The 3G auction would continue till the available number of slots is equal to number of bidders in all 22 circles simultaneously. Out of a total of 22 circles for the 3G spectrum, 17 have three slots, while in rest of the five circles, four blocks of spectrum are available. The successful bidders would be allotted air waves in September after the spectrum is vacated by the defence forces. The BWA auction is also expected to be equally competitive, as 11 players are in the fray for just two slots for each circle, while the reserve price for pan-India licence is Rs17.5bn.
The Greek storm continued to rattle world markets. Fears that Greece may not be the only eurozone economy in need of bailout cash sent world equity markets into a tailspin. Apart from stocks, commodities and emerging market currencies bore the brunt of the worldwide meltdown. Risk appetite tumbled and investors rushed to the safety of the dollar and bonds. The euro fell to a 14-month low on the dollar and one-year low on the yen, raising concerns over the currency’s reserve status. However, Spain's successful auction of a 5-year bond helped nudge the euro off 14-month lows. Spain sold 2.23 billion euros of five-year notes with a bid-to-cover ratio of 2.35. The maximum yield was 3.58%. Average yield was 3.532%. The yield was 2.816% when Spain sold €4.5bn of the same securities on March 4. Investors are demanding the biggest premium in yield to buy Spanish bonds rather than benchmark German bunds since the euro’s introduction in 1999. Spain's budget deficit is almost four times the European Union’s limit.
Public protests mounted in Greece, stoking concerns whether it will be able to attain the proposed cuts in budget deficit to win €110bn in aid from EU and IMF. Other members of ‘PIIGS’ like Spain and Portugal were staring at further downgrades. The idea of EU as a unified, cohesive economic bloc and euro as its common currency took further beating. To make the matters worse, China’s benchmark stock index slid to its lowest level in eight months as investors fret about government measures to cool the property market and a flood of new bank shares coming to market. Global mining shares were also hit by Australia's decision to slap resource tax on companies like BHP Billiton and Rio Tinto.
Pound sterling declined amid a strong possibility that the UK will see its first hung parliament since 1974. Investors are worried that Britain's budget deficit will remain high. Still, strategists at Lloyds TSB Corporate Markets said that sterling's weakness could have more to do with general risk aversion than worries about a hung parliament. The gap of about 8% in support between conservative David Cameron and Labour Party leader Gordon Brown in the latest polls is little changed from April 6, the day the premier called the election. Voting was to end at 10 p.m. on Thursday. Exit polls will give the first indications of the outcome but the final result won’t be known before Friday afternoon.
As if the recent turmoil and the consequent gyrations were not enough, next week promises to be equally dramatic and eventful. So, brace yourselves for another rollercoaster ride as the market will have to consider a spate of big developments. Those include: UK election results, Greek parliament vote on austerity measures, ECB commentary, US jobs data, RIL-RNRL outcome, IIP and Inflation. With so many potentially market moving events to digest, the key indices are likely to remain on tenterhooks. One also cannot ignore the fact that the rupee has been sliding and FIIs have been big sellers.
Given the uncertain and murky backdrop, especially on the external front, it would be wise not to take any major directional calls, at least in the near term. Looks like the European debt crisis may take a while to subside. In that case, the Indian market will swing to the beat of the global tune and witness intermittent bouts of buying and selling. It would be difficult to accurately call market's direction and thus making money will only get tougher. Keep cash handy as there is a chance of the market going through some more pain in the coming days. Buy only fundamentally-sound companies and be careful while picking stocks in the Small- and Mid-Cap universe.