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Saturday, October 08, 2011

Walt Disney to acquire Indiagames for US$80-100mn

The Walt Disney Company has acquired all the equity in UTV’s Indiagames for an estimated $80-100 mn (Rs 3.90-4.90bn), according to a report. The report stated that Indiagames is a leading developer and publisher of mobile and online games. Earlier this year, Walt Disney had announced the acquisition of UTV Software Communications for Rs. 20bn.

Ranbaxy to extend Daiichi Sankyo products to Italy

Ranbaxy Italia S.p.A (Ranbaxy) and Daiichi Sankyo, Italia S.p.A (Daiichi Sankyo), today announced a partnership to leverage .Ranbaxy's distribution strengths and extensive relationships with Pharmacists across Italy, for the distribution of Daiichi Sankyo products. To start with, Ranbaxy will exclusively distribute two of Daiichi Sankyo's long established brands - CONGESCOR and LOPRESOR - to all pharmacies, in the country. These drugs are used extensively by Doctors in Italy for the treatment of Congestive Heart Failure and Hypertension. As per IMS Health, the total annual retail sales of CONGESCOR and LOPRESOR are around Euro 20 Mn. The partnership in Italy provides further impetus to the Hybrid Business Model between the two companies by comprehensively addressing Doctors and Pharmacists in improving the accessibility of drugs, for patients.

SBI stock sinks on Moody's downgrade

Shares of State Bank of India (SBI) took a pounding on October 4 after Moody’s Investor Service downgraded SBI's standalone rating, citing its modest capital and weakening asset quality. "Our expectations that non-performing assets are likely to continue rising in the near-term - due to higher rates and a slower economy - have caused us to adopt a negative view on SBI's creditworthiness," Beatrice Woo, Moody's Vice President and Senior Credit Officer, said in a statement. Moody's said that SBI's Tier-I capital, the core measure of a bank's financial strength, provides an insufficient cushion to support growth and to absorb potentially higher credit costs from worsening asset quality. SBI's non-performing assets (NPA) reached a three-year high of 3.52% of loans as of June 30. For the Indian banking system, the ratio was 2.3% as of March 31, 2011, Moody's said. "Against a backdrop of a slowing economy and higher interest rates, the rising trend evident in SBI's new NPA formation rate since 3QFY11 will continue," the Moody's report said. Moody's expects SBI's potential credit costs to be relatively high in the near term.

Food inflation climbs...Fuel inflation steady

The annual rate of inflation in the food space increased in the fourth week of September while inflation in the fuel group remained unchanged, data released by the Government showed on Friday. Annual inflation in the Food Articles group rose to 9.41% in the week ended Sept. 24 versus 9.13% in the preceding week, the Commerce & Industry Ministry said in a statement. It was at 16.88% in the corresponding period of last year. Inflation in the Primary Articles group fell to 10.84% in the week under review, from 11.43% in the week ended Sept. 17, according to the CommerceMinistry statement. It was at 19.58% in the year-ago period. Inflation in the Fuel & Power group was at 14.69% in the week ended September 24, unchanged from the previous week, the Government data showed. It was at 10.80% in the comparable week of the previous year. Inflation in the Non-Food Articles space declined to 10.77% in the week under review from 12.89% in the previous week, the Government data showed today. It was at 24.73% in the same period a year earlier. Inflation in the Minerals group stood at 21.05% in the week ending September 24 versus 24.73% in the week ended Sept. 17, according to the Commerce Ministry data. Inflation in this group stood at 29.61% in the year-ago period. On an annual basis, onions turned costlier by ~10.6% in the week under consideration, vegetable prices were up ~14.9% on an annual basis. Fruits turned costlier by ~11.7% year over year, while Milk prices increased ~10.35% and Egg, Meat & Fish became pricey by ~10.33% compared to the year-ago period.

The Carlyle Group acquires 9% stake in IIFL

India Infoline Group (IIFL) announced that one of the largest global alternative asset managers The Carlyle Group (Carlyle) has acquired a 9% stake in India Infoline Ltd, the flagship company of IIFL, through secondary market purchase of equity shares. Carlyle becomes a key institutional shareholder in IIFL and will be invited to join IIFL’s Board of Directors to support its future development, subject to necessary approvals. The acquisition cost is not disclosed. The investment was made by Carlyle Mauritius Investment Advisors Limited, a part of Carlyle Asia Partners (CAP), one of the largest private equity investors in Asia since 1998. CAP has five major investments in the financial services industry in the region encompassing banking, insurance and housing finance businesses, including HDFC in India. Financial services is a core industry focus at Carlyle, where the firm has made an equity commitment of more than US$2 bn in Asian financial services businesses. In addition, Carlyle has a significant commitment to India and has had a presence in India since 2000. Carlyle’s broad experience in Asia and internationally will bring added value to the growth at IIFL.

Weekly Stock Picks - Oct 8 2011

Buy Educomp

Buy Tata Steel

Buy Dish TV

Buy PowerGrid


Steve Jobs - The Apple of this generation’s eye dies at 56

Apple co-founder Steve Jobs died at the age of 56 after a long battle with pancreatic cancer. Jobs was surrounded by his wife and immediate family when he died in Palo Alto, California. Jobs is survived by his wife Laurene and five children, as well as his sister, the novelist Mona Simpson. The iPod, iPhone and iPad are his gifts to the world. "Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve," Apple said in a statement. "His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts." Apple changed it's website to a big black-and-white photograph of him with the caption "Steve Jobs: 1955-2011." Jobs took a medical leave from Apple in January and stepped down as chief executive in August saying he could "no longer meet (his) duties and expectations." Born on February 24, 1955, and then adopted, Jobs grew up in Cupertino, California - which today is home to Apple's headquarters. Jobs launched Apple Computer Inc. with co-founder Steve Wozniak. They built their first commercial product, the Apple 1, in Jobs' parents' garage in 1976. Jobs sold off his Volkswagen to help finance the venture. The computer, priced at ~US$666, had no keyboard or display, and customers had to assemble it themselves.

Weekly Newsletter - Oct 8 2011

Indian stock indices lost 1% each in a holiday-shortened but choppy week. If it wasn’t for Friday’s strong rally, the losses could have been deeper. Friday’s bounce was fueled by optimism that European authorities will take decisive steps to address the region’s credit crisis. New monetary easing measures taken by the ECB and the BOE also helped bolster investor confidence.

Markets close week with 1% loss

Weakness in the banking stocks alongwith global worries weighed on the sentiments, with the Sensex closing the week down by 1.34% and the Nifty down by 1.12%

Major news for the week

September Services PMI shrinks, signals broader economic slowdown

Moody's cuts Italy credit rating

Exports surge 44% in August

SBI hits 52-week low after Moody’s downgrade

Food inflation at 9.41% versus 9.13%

ICICI Bank spurts on Moody's reaffirm rating

Moody's cuts ratings of 12 UK banks

India's factory PMI growth falls to 30-month low

Banking, metal stocks lead decline

The market edged lower last week led by sell-off in banking shares after rating agency Moody's downgraded State Bank of India on Tuesday, 4 October 2011. Metal shares tumbled on global recession fears. Data showing a decline in service sector activity in September 2011, resumption of selling by foreign funds at the beginning of this month, and likely muted-to-weak Q2 earnings weighed on investors' sentiment. The market fell in three out of four trading sessions during the week. The stock market was closed on Thursday, 6 October 2011 on account of Dassera.