Breaking News & Stocks

Quote of the Day ? Despite past opportunities, the future holds more promises

Equities seen higher tracking global cues
28 Apr, 2008, 0916 hrs IST,

MUMBAI: Equities are likely to open higher on Monday tracking advances in overseas markets but gains may be limited ahead of Reserve Bank of India's annual monetary policy on Tuesday. Stock specific action is likely with key earnings declaration from the likes of Hindustan Unilever and Reliance Energy.

"So far, corporate numbers have not disappointed. Though inflation is worrisome, it is now a global concern, and the Indian market has taken it in its stride. Technically, the Indian market is strong. Once the Nifty cross 5140 on Monday, I would like to believe that the market has resumed its bull run," said independent technical analyst Sumeet Rohra optimistically.

US stocks ended higher Friday after healthy corporate earnings from Boeing and Philip Morris International bolstered speculation overseas growth will offset slower domestic demand.

Asian stocks edged higher Monday led by advances in financial shares. Japan's Nikkei rose 0.75 per cent, Hang Seng climbed 0.32 per cent and Straits Times rose 0.49 per cent.

Back home, key indices mounted crucial barriers on Friday as investors cheered outstanding corporate results. Bombay Stock Exchange's 30-share index crossed the psychological 17000 mark to close up 404.90 points at 17,125.98. The index rose to a high of 17,150.92 from a low of 16,781.97 during the day.

National Stock Exchange's 50-share index gained 112 points or 2.23 per cent close at 5111.70. The index swung between a high of 5,117.70 and low of 4,999.15.

Foreign institutional investors were net buyers of equity worth Rs 313.09 crore, while mutual funds net sold Rs 75.47 crore, according to provisional data on NSE.

Reliance Power 2007/08 net profit $23.6 ml

Mumbai, April 28: India`s Reliance Power Ltd said on Monday its net profit for the year ended March 31 was 946.7 million rupees (USD 23.6 million)

Total income for the year was 1,328.7 million rupees, it said.

Reliance Power raised a record USD 3 billion in India`s biggest initial public offer earlier this year, but it shares made a dismal debut in February and remain below the 450 rupee issue price.

At 0542 GMT, shares in the company were up 1.6 percent at 408.50 rupees in a flat Mumbai market.

Reliance Power, which is part of the Anil Dhirubhai Ambani group, plans to build power plants across India using funds raised from the IPO of a the 10.1 percent stake.

Markets under pressure ahead of RBI policy

Mumbai, April 28: The stock markets faced pressure after a buoyant start as investors adopted a cautious approach ahead of the Reserve Bank`s annual monetary policy review on Tuesday and booked profits at higher levels.

The Bombay Stock Exchange 30-share index was quoted at 17,072.10 at 1030 hrs, down 53.88 points from its previous close of 17,125.98.

The Sensex had risen to a high of 17,271.56 in the first 15 minutes of trade after resuming at 17,251.56.

The broader 50-share S&P CNX NIFTY on the National Stock Exchange was flat at 5,107.65 at 1030 hrs from its last close of 5,111.70.

The market anticipated more monetary measures by the central bank as inflation rose to 7.33 per cent for the week ended April 12 despite a 50 basis point hike in the cash reserve ratio announced on April 17, marketmen said.

There are strong possibility of a hike in interest rates and other monetary measures to contain the rising inflation, they added.

Soaring global crude oil prices, which today neared 120 dollar a barrel level in Asian trade also caused concerns among investors.

India`s Unilever Q1 net rises, but lags forecast

Mumbai, April 28: India's top consumer goods firm, Hindustan Unilever Ltd, posted a smaller-than-forecast 14 percent rise in quarterly profit, excluding a one-off gain a year ago, as high prices of raw-materials such as palm oil and coffee weighed on strong sales.

Rising rural and middle class incomes and the expansion of modern retail are boosting demand for everything from soaps to ready-to-eat foods in Asia's third-largest economy.

But rising input prices are squeezing margins and forcing companies to increase prices, which may encourage shoppers already crimped by high inflation to switch to cheaper options.

"Inflationary pressures are a cause for concern, but market growth continues to be strong and there is no evidence as yet of any significant impact on consumer spending," Chairman Harish Manwani said in a statement.

The unit of Anglo-Dutch Unilever Plc said net profit rose to 3.81 billion rupees ($95 million) in its first quarter from 3.34 billion a year earlier. The year-ago figure excluded an exceptional gain of 590 million rupees.

Net sales rose to 37.94 billion rupees from 31.84 billion.

Hindustan Unilever said its board had approved a change in the accounting year to commence from April 1.

Cost of packaging and raw-materials rose 31 percent in the March quarter, while advertising and promotional expenses increased by 21 percent because of fierce competition.

"Cost challenges continue, and we will endeavour to manage them, like we have done, through cost efficiencies and selective price increases," Vice Chairman D. Sundaram said.

Unilever, which makes Lux soap, Surf detergent and Lipton tea, has spun off some smaller units to focus on its core portfolio as it faces greater competition from rivals. It also named a new chief executive in February.

Its new businesses including a water purification system and beauty salons have been slow to scale up and yield returns.

Meanwhile, top cigarette maker ITC Ltd is launching more personal care products and packaged foods.

Others including Godrej Consumer Products, Marico, Dabur India and the local units of Procter & Gamble and Colgate-Palmolive also compete.

Ahead of the results, shares in Hindustan Unilever, which has a market worth of $13.4 billion, closed down 1 percent at 247.20 rupees in a weak Mumbai market.

The shares had risen 7 percent in the March quarter, beating a 1.3 percent decline for the sector index and a 23 percent fall on the main index.

The stock trades at 22.9 times forecast earnings, compared with 21.6 times for ITC, which is forecast to report a 16 percent rise in quarterly profit to 7.5 billion rupees.

Airtel cuts roaming, STD call rates upto 43%

Zeenews Bureau

New Delhi, April 28: In what may come as a major relief to millions of its customers, private telecom operator Bharti Airtel on Monday announced slashing its mobile STD rates and incoming roaming charges by up to 43%.

As per the announcement, the company has reduced STD rates by 43.39 % to re 1.50 minute from the earlier re 2.65 per minute. The new tariffs would be effective from April 30 and would be available for both pre and post-paid users.

According to the new tariff plan, roaming charges for incoming calls would be cut to re 1 per minute from the present Rs 1.75 per minute, a reduction of 42.85 per cent. Further, Airtel customers, while on roaming would be able to make local calls at re 1 per minute and an STD call at Re 1.50/minute.

The move by Airtel is expected to start a similar trend among all cellular operators like Vodafone Essar, Reliance Communications and TATA Teleservices to get more customers.

A Vodafone Essar spokesperson said, "The company has always endeavoured to deliver best value to customers and we will offer them the best value in this instance too."

It must note that, telecom regulator TRAI has been urging operators to reduce roaming rates for while, saying they have been on the higher side. TRAI has already abolished practice of levying Access Deficit Charges (ADC) on private operators.

Bharti Airtel President & CEO Manoj Kohli said, “Many users switch off their phones while on roaming as they feel the incoming rates are very high. We plan to check that with this reduction."

The move is largely expected to benefit the rural customers of the country.

Mars buying gum maker Wrigley with financing from Buffett
Monday April 28, 12:12 pm ET

Mars agrees to buy gum maker Wrigley for about $23B with financing help from Warren Buffett

CHICAGO -- Snickers and M&Ms candy maker Mars Inc. is buying Wm. Wrigley Jr. Co., which makes Juicy Fruit and Doublemint gum and Life Savers, for about $23 billion in cash.
The agreement announced Monday has the potential to transform the globe's confectionary industry and could spawn a series of other combinations.

"First and foremost, this is a great transaction at a great price that provides tremendous value to Wrigley stockholders," Bill Wrigley Jr., chairman of Wrigley's board, said in a statement. "We see this as an historic opportunity to preserve what is special about the Wrigley company in terms of values and culture, while continuing to grow and develop our associates, invest in our brands and drive long-term generational growth."

Family owned Mars is the world's largest chocolate seller.

If the deal is completed, the combined companies would unseat Britain's Cadbury Schweppes as the world's largest confection maker.

"I look at it as two companies that see the opportuntity to create a true global confectionary powerhouse," said Morningstar analyst Mitchell Corwin. "Combined, they catapult Cadbury by a significant margin. They become No. 1 in chocolate and No. 1 in chewing gum with a strong international presence and growth in emerging markets."

Under the agreement, shareholders at Chicago-based Wrigley would receive $80 in cash for each share Wrigley share.

The $80-per share offer is a 28 percent premium to Wrigley's Friday closing price of $62.45 and the news sent Wrigley's shares into overdrive in morning trading Monday.

The stock price soared $14.51, or 23.2 percent, to $76.96 in midday trading Monday after briefly rising to a 52-week high of $77.75.

After the buyout is completed in six to 12 months, Wrigley would become a subsidiary of McLean, Va.-based Mars. Its headquarters will stay in Chicago, where the business has operated since it was founded by the Wrigley family in 1891.

"When this transaction is completed, we will be proud to welcome Wrigley's associates to our company," Mars President Paul S. Michaels said in a statement. "The strong cultural heritage of two legendary American companies with a shared commitment to innovation, quality and best-in-class global brands provides a great basis for this combination."

Warren Buffett's Berkshire Hathaway Inc. will purchase $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed. The Omaha, Neb.-based company also offered $4.4 billion of subordinated debt to fund the deal.

"A good time to buy a really great business is when you can do it," Warren Buffett said on CNBC Monday, adding that he understands Mars and Wrigley better than the balance sheets of most major banks.

Among Wrigley's others brands are Orbit, Extra and Big Red gum and Altoids mints.

The company's name has been synonymous with Chicago for decades. The gum maker's ornate towering headquarters along the Chicago River is a favorite among tourists for snapping pictures. And the Chicago Cubs historic ballpark -- Wrigley Field -- got its name while the team was owned by the Wrigley family, which sold the franchise decades ago.

Meanwhile Monday, Wrigley said its first-quarter profit rose 18 percent, thanks to strong sales in Eastern Europe and Asia and a weakened U.S. dollar.

The company earned $168.6 million, or 61 cents per share during the January-through-March quarter. That's up from $142.7 million, or 52 cents per share last year. Revenue climbed 16 percent to $1.45 billion from $1.25 billion last year. Analysts polled by Thomson Financial expected a profit of 55 cents per share on revenue of $1.39 billion.

Punjab & Sind Bank FY`08 net up 75% at Rs 382 cr

New Delhi, April 28: State-run Punjab & Sind Bank, which had highest bad debts in the country three years back, on Monday announced a net profit of Rs 382.36 crore for 2007-08, a 74.97% increase as against the previous fiscal.

The bank had earned a net profit of Rs 218.53 crore in 2006-07.

The company attributed its performance to all-round increase in performance indicators and decline in non performing assets, it said in a statement.

The unprecedented cash recovery has enabled the bank to bring down gross NPAs to 0.74% as on March 31, 2008 from 2.43% as on March 31, 2007.

Total business of the bank as on March 2008 has reached Rs 43,240 crore compared to Rs 31,267 crore in the corresponding quarter last fiscal.

Deposits have gone up by 28.54% and net advances increased by 54.08%. The business per employee has risen from Rs 3.29 crore to Rs 4.67 crore as on March 31, further improving the productivity level of employees.

The process of providing it enabled services to clients is at an advanced stage and these would be provided on pilot basis in some of the branches during the current financial year, the bank said.

The bank set up ATM at a few centres and more such units would be operational this year, the release added.

Mars, Buffett team up to buy Wrigley

Chicago, April 28: M&M's candy maker Mars Inc has teamed up with billionaire Warren Buffett to buy Wm Wrigley Jr Co, the world's largest chewing gum maker, for $23 billion, creating the world's largest confectionary company.

The deal, announced on Monday, will give Buffett's Berkshire Hathaway Inc a minority stake in Wrigley, which will become a separate Mars subsidiary. Buffett's other food holdings include a stake in Kraft Foods Inc.

Aside from Berkshire, financing for the deal is also being provided by Goldman Sachs and JPMorgan, Mars said in a news release.

At $80 a share, the deal represents a 28 percent premium over Wrigley's closing stock price of $62.45 on Friday.

"The combined entity would have significant scale and breadth in a very attractive segment of the global food industry," Andrew Wood, analyst at Sanford Bernstein, said in a research note ahead of the formal announcement of the deal.

The combined companies would have a major presence in chocolate, gum and sugary sweets.

While Wrigley is a chewing gum giant, it has faced increasing competition from Cadbury Schweppes Plc's chewing gum business, which includes the Dentyne and Trident brands.

The Mars-Wrigley deal could force Mars rival Hershey Co and Cadbury into a deal of their own. The two companies are reported to have talked in the past, though the Hershey Trust, which controls about 78 percent of Hershey's voting shares, has said Pennsylvania law requires it to maintain control of Hershey.

Wrigley has brands such as Altoids, Extra and Eclipse, while privately held Mars is known for M&M's, Snickers, Starburst and Twix.

While publicly traded, the majority of Wrigley's shares are controlled by the Wrigley family, a Chicago presence whose name is on the Chicago Cubs baseball stadium and a well-known Michigan Avenue landmark building

Reliance Natural Q4 net up 44%

Mumbai, April 28: Anil Ambani group firm Reliance Natural Resources (RNRL) today announced a stand alone net profit of Rs 68.6 crore for financial year ended March, over two-fold growth from a year ago.

The firm had a net profit of Rs 28.87 crore for the fiscal ended March 31, 2007, RNRL said in a filing to the Bombay Stock Exchange (BSE).

The total income rose to Rs 367.31 crore for the fiscal ended March 31, from Rs 243.08 crore in the corresponding period last year.

The figures for the year ended March 31, 2007 are unaudited, while that of March 31, 2008 are audited, the filing added.

RNRL has announced a consolidated net profit of Rs 68.58 crore for the fiscal ended March 31, 2008.

Further, the register of members and share transfer books of the company would remain closed from July 29 to August 5 for the purpose of the annual general meeting, it added.

Shares of RNRL closed at Rs 123.60 on the BSE, down 0.28 per cent.